<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported); November 12, 1998
MORGAN STANLEY CAPITAL I INC.
(Exact name of registrant as specified in its charter)
DELAWARE 333-62911 13-3291626
(State or Other (Commission File Number) (I.R.S. Employer
Jurisdiction Incorporation Identification Number)
---------
1585 Broadway
2nd Floor
New York, New York 10036
(principal executive offices)
(212) 761-4000
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
On November 12, 1998, a single series of certificates, entitled Morgan
Stanley Capital I Inc. Commercial Mortgage Pass-Through Certificates,
Series 1998-HF2 (the "Certificates"), was issued pursuant to a pooling and
servicing agreement dated as of November 1, 1998 (the "Pooling and Servicing
Agreement"), attached hereto as Exhibit 4.1, among Morgan Stanley Capital I Inc.
(the "Depositor") as depositor, GMAC Commercial Mortgage Corporation, as master
servicer and special servicer, LaSalle National Bank, as Trustee and ABN Amro
Bank N.V., as fiscal agent. The Certificates consist of eighteen classes
identified as the "Class A1 Certificates", the "Class A2 Certificates", the
"Class X Certificates", the "Class B Certificates", the "Class C Certificates",
the "Class D Certificates", the "Class E Certificates", the "Class F
Certificates", the "Class G Certificates", the "Class H Certificates", the
"Class J Certificates", the "Class K Certificates", the "Class L Certificates",
the "Class M Certificates", the "Class N Certificates", the "Class R-I
Certificates", the "Class R-II Certificates", and the "Class R-III
Certificates", respectively, and were issued in exchange for, and evidence the
entire beneficial ownership interest in, the assets of a trust fund (the "Trust
Fund") consisting primarily of a segregated pool (the "Mortgage Pool") of 262
fixed rate, multifamily and commercial mortgage loans (the "Mortgage Loans")
having, as of the close of business on March 1, 1998 (the "Cut-off Date"), an
aggregate principal balance of $1,058,111,956 after taking into account all
payments of principal due on the Mortgage Loans on or before such date, whether
or not received.
The Class A1 Certificates have an initial Class Principal Balance of
$203,500,000. The Class A2 Certificates have an initial Class Principal Balance
of $547,759,000. The Class X Certificates have an initial Class Notional Amount
of $1,058,111,956. The Class B Certificates have an initial Class Principal
Balance of $52,906,000. The Class C Certificates have an initial Class Principal
Balance of $52,905,000. The Class D Certificates have an initial Class Principal
Balance of $58,196,000. The Class E Certificates have an initial Class Principal
Balance of $21,163,000. The Class F Certificates have an initial Class Principal
Balance of $23,807,000. The Class G Certificates have an initial Class Principal
Balance of $18,517,000. The Class H Certificates have an initial Class Principal
Balance of $10,581,000. The Class J Certificates have an initial Class Principal
Balance of $21,162,000. The Class K Certificates have an initial Class Principal
<PAGE>
Balance of $10,582,000. The Class L Certificates have an initial Class Principal
Balance of $15,871,000. The Class M Certificates have an initial Class Principal
Balance of $10,581,000. The Class N Certificates have an initial Class Principal
Balance of $10,581,956. Capitalized terms used and not otherwise defined herein
shall have the meanings assigned to them in the Pooling and Servicing Agreement.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired
Not Applicable.
(b) Pro Forma Financial Information
Not Applicable.
(c) Exhibits.
Exhibit No.
of Item 601 of
Exhibit No. Regulation S-K Description
- ----------- -------------- -----------
4.1 4 Pooling and Servicing Agreement dated
as of November 1, 1998 among Morgan
Stanley Capital I Inc. as depositor,
GMAC Commercial Mortgage Corporation,
as master servicer, and special
servicer, LaSalle National Bank, as
trustee, and ABN Amro Bank N.V., as
fiscal agent.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: December 1, 1998
MORGAN STANLEY CAPITAL I INC.
By: /s/ Russell Rahbany
-------------------------
Name: Russell Rahbany
Title: Vice President
<PAGE>
Exhibit 4.1
===============================================================================
MORGAN STANLEY CAPITAL I INC.,
AS DEPOSITOR,
AND
GMAC COMMERCIAL MORTGAGE CORPORATION
AS MASTER SERVICER,
AND
AS SPECIAL SERVICER,
AND
LASALLE NATIONAL BANK,
AS TRUSTEE,
AND
ABN AMRO BANK N.V.,
AS FISCAL AGENT,
POOLING AND SERVICING AGREEMENT
DATED AS OF NOVEMBER 1, 1998
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1998-HF2
===============================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS.................................................... 4
Section 1.1. Definitions.......................................... 4
Section 1.2. Certain Calculations in Respect of the
Mortgage Pool...................................... 43
Section 1.3. Interpretation....................................... 43
ARTICLE II. DECLARATION OF TRUST; ISSUANCES OF CERTIFICATES............... 44
Section 2.1. Conveyance of Mortgage Loans......................... 44
Section 2.2. Acceptance by Trustee................................ 46
Section 2.3. Sellers' Repurchase of Mortgage Loans for Document
Defects and Breaches of Representations
and Warranties..................................... 47
Section 2.4. Representations and Warranties....................... 48
Section 2.5. Conveyance of Interests.............................. 49
ARTICLE III. THE CERTIFICATES............................................. 49
Section 3.1. The Certificates..................................... 49
Section 3.2. Registration......................................... 50
Section 3.3. Transfer and Exchange of Certificates................ 50
Section 3.4. Mutilated, Destroyed, Lost or Stolen Certificates.... 56
Section 3.5. Persons Deemed Owners................................ 57
Section 3.6. Book-Entry Certificates.............................. 57
Section 3.7. Notices to Clearing Agency........................... 58
Section 3.8. Definitive Certificates.............................. 58
ARTICLE IV. ADVANCES...................................................... 58
Section 4.1. P&I Advances by Master Servicer...................... 58
Section 4.2. Servicing Advances................................... 59
Section 4.3. Advances by Trustee and Fiscal Agent................. 61
Section 4.4. Evidence of Nonrecoverability........................ 61
Section 4.5. Advance Interest..................................... 62
Section 4.6. Merger or Consolidation of Fiscal Agent.............. 62
Section 4.7. Limitation on Liability of the Fiscal Agent
and Others......................................... 62
Section 4.8. Indemnification of Fiscal Agent...................... 63
ARTICLE V. COLLECTION ACCOUNT; DISTRIBUTION ACCOUNT;
CERTAIN TRUSTEE REPORTS........................................ 63
Section 5.1. Collection Account................................... 63
Section 5.2. Application of Funds in the Collection Account....... 65
Section 5.3. Distribution Account................................. 68
Section 5.4. Trustee Reports; Access to Information............... 69
Section 5.5. Trustee Tax Reports.................................. 72
i
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ARTICLE VI. DISTRIBUTIONS.................................................. 73
Section 6.1. Distributions Generally.............................. 73
Section 6.2. REMIC I.............................................. 74
Section 6.3. REMIC II............................................. 75
Section 6.4. REMIC III............................................ 78
Section 6.5. Allocation of Realized Losses and Expense Losses..... 83
Section 6.6. Appraisal Reductions................................. 84
Section 6.7. Compliance with Withholding Requirements............. 85
ARTICLE VII. CONCERNING THE TRUSTEE AND THE FISCAL AGENT.................. 85
Section 7.1. Duties of Trustee and the Fiscal Agent............... 85
Section 7.2. Certain Matters Affecting the Trustee and
the Fiscal Agent................................... 86
Section 7.3. Trustee and Fiscal Agent Not Liable for
Certificates or Interests or Mortgage Loans........ 88
Section 7.4. Trustee and the Fiscal Agent May Own Certificates.... 88
Section 7.5. Eligibility Requirements for Trustee
and Fiscal Agent................................... 88
Section 7.6. Resignation and Removal of Trustee or Fiscal Agent... 89
Section 7.7. Successor Trustee or Fiscal Agent.................... 90
Section 7.8. Merger or Consolidation of Trustee................... 91
Section 7.9. Appointment of Co-Trustee, Separate Trustee
or Custodian....................................... 91
Section 7.10. Authenticating Agents............................... 92
Section 7.11. Indemnification..................................... 93
Section 7.12. Fees and Expenses of Trustee and Fiscal Agent....... 94
Section 7.13. Collection of Moneys................................ 95
Section 7.14. Notification to Holders............................. 95
Section 7.15. Representations and Warranties of Trustee
and Fiscal Agent.................................. 95
Section 7.16. Fiscal Agent Termination Event...................... 97
Section 7.17. Procedure Upon Termination Event.................... 98
Section 7.18. Impact of Year 2000 Compliance...................... 98
ARTICLE VIII. ADMINISTRATION AND SERVICING OF MORTGAGE LOANS.............. 98
Section 8.1. Servicing Standard; General Powers and Duties........ 98
Section 8.2. Collection of Mortgage Loan Payments.................100
Section 8.3. Collection of Taxes, Assessments and Similar
Items; Servicing Accounts and Reserve Accounts.....101
Section 8.4. Sub-Servicing Agreements.............................102
Section 8.5. Maintenance of Insurance Policies; Errors and
Omissions and Fidelity Coverage....................104
Section 8.6. Enforcement of Due-On-Sale Clauses; Assumption
Agreements; Subordinate Financing..................106
Section 8.7. Realization Upon Defaulted Mortgage Loans............108
Section 8.8. Trustee to Cooperate; Release of Mortgage Files......110
Section 8.9. Documents, Records and Funds in Possession of
Master Servicer or Special Servicer to be Held
for Trustee for the Benefit of Certificateholders..111
Section 8.10. Servicing Compensation..............................112
ii
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Section 8.11. Master Servicer Reports; Account Statements.........114
Section 8.12. Annual Statement as to Compliance...................114
Section 8.13. Annual Independent Public Accountants'
Servicing Report..................................114
Section 8.14. Certain Reports Regarding the Mortgage Loans and
the Mortgaged Properties..........................115
Section 8.15. Certain Available Information and Related Rights
of the Master Servicer and the Special Servicer...118
Section 8.16. Rule 144A Information...............................120
Section 8.17. Inspections; Collection of Financial Statements.....120
Section 8.18. Modifications, Waivers, Amendments, Extensions
and Consents......................................121
Section 8.19. Title to REO Property...............................125
Section 8.20. Management of REO Property..........................125
Section 8.21. Additional Obligations of the Master Servicer.......128
Section 8.22. Representations, Warranties and Covenants of the
Master Servicer and the Special Servicer..........128
Section 8.23. Merger or Consolidation.............................130
Section 8.24. Resignation of Master Servicer or Special Servicer..130
Section 8.25. Assignment or Delegation of Duties by Master
Servicer or the Special Servicer..................130
Section 8.26. Limitation on Liability of Master Servicer,
Special Servicer and Others.......................131
Section 8.27. Indemnification; Third-Party Claims.................131
Section 8.28. Tax Reporting.......................................133
Section 8.29. Certain Special Servicer Reports....................133
Section 8.30. Qualification to Service............................134
Section 8.31. Sale of Defaulted Mortgage Loans and
REO Properties....................................134
Section 8.32. Operating Adviser; Elections........................135
Section 8.33. Duties of Operating Adviser.........................136
Section 8.34. Exchange Act Reporting..............................137
Section 8.35. Credit Lease Servicing Provisions...................137
ARTICLE IX. DEFAULT.......................................................139
Section 9.1. Events of Default....................................139
Section 9.2. Trustee to Act; Appointment of Successor.............141
Section 9.3. Notification to Certificateholders...................141
Section 9.4. Waiver of Events of Default..........................142
ARTICLE X. PURCHASE AND TERMINATION OF THE TRUST..........................142
Section 10.1. Termination of Trust................................142
Section 10.2. Procedure Upon Termination of Trust.................143
Section 10.3. Additional Trust Termination Requirements...........144
ARTICLE XI. RIGHTS OF CERTIFICATEHOLDERS..................................145
Section 11.1. Limitation on Rights of Holders.....................145
Section 11.2. Access to List of Holders...........................146
Section 11.3. Acts of Holders of Certificates.....................146
iii
<PAGE>
ARTICLE XII. REMIC ADMINISTRATION.........................................147
Section 12.1. REMIC Administration................................147
Section 12.2. Prohibited Transactions and Activities..............152
Section 12.3. Liability with Respect to Certain Taxes and Loss
of REMIC Status...................................152
Section 12.4. Modifications of Mortgage Loans.....................153
ARTICLE XIII. MISCELLANEOUS PROVISIONS....................................153
Section 13.1. Binding Nature of Agreement.........................153
Section 13.2. Entire Agreement....................................153
Section 13.3. Amendment...........................................153
Section 13.4. GOVERNING LAW.......................................154
Section 13.5. Notices.............................................154
Section 13.6. Severability of Provisions..........................155
Section 13.7. Indulgences; No Waivers.............................155
Section 13.8. Headings Not to Affect Interpretation...............155
Section 13.9. Benefits of Agreement...............................155
Section 13.10. Special Notices to the Rating Agencies.............155
Section 13.11. Counterparts.......................................157
Section 13.12. Intention of Parties...............................157
Section 13.13. Recordation of Agreement...........................158
iv
<PAGE>
EXHIBITS
Exhibit A-1 Form of Class A-1 Certificate.............................A-1
Exhibit A-2 Form of Class A-2 Certificate.............................A-2
Exhibit A-3 Form of Class B Certificate...............................A-3
Exhibit A-4 Form of Class C Certificate...............................A-4
Exhibit A-5 Form of Class D Certificate...............................A-5
Exhibit A-6 Form of Class E Certificate...............................A-6
Exhibit A-7 Form of Class F Certificate...............................A-7
Exhibit A-8 Form of Class G Certificate...............................A-8
Exhibit A-9 Form of Class H Certificate...............................A-9
Exhibit A-10 Form of Class J Certificate..............................A-10
Exhibit A-11 Form of Class K Certificate..............................A-11
Exhibit A-12 Form of Class R-I Certificate............................A-13
Exhibit A-13 Form of Class R-II Certificate...........................A-14
Exhibit A-14 Form of Class R-III Certificate..........................A-15
Exhibit A-15 Form of Class X Certificate..............................A-16
Exhibit B-1 Form of Initial Certification of Trustee..................B-1
Exhibit B-2 Form of Final Certification of Trustee....................B-2
Exhibit C Form of Request for Release.................................C
Exhibit D-1 Form of Transferor Certificate for Transfers of
Definitive Privately Offered Certificates...............D-1-1
Exhibit D-2A Form I of Transferee Certificate for Transfers of
Definitive Privately Offered Certificates..............D-2A-1
Exhibit D-2B Form II of Transferee Certificate for Transfers of
Definitive Privately Offered Certificates..............D-2B-1
Exhibit D-3A Form I of Transferee Certificate for Transfers of
Interests in Book-Entry Privately Offered
Certificates...........................................D-3A-1
Exhibit D-3B Form II of Transferee Certificate for Transfers of
Interests in Book-Entry Privately Offered
Certificates...........................................D-3B-1
Exhibit E Form of Transferor Certificate for Transfers of
REMIC Residual Certificate..................................E
Exhibit F Form of Transfer Affidavit and Agreement for Transfers
of REMIC Residual Certificates..............................F
Exhibit G-1 Form of Monthly Certificateholder Report..................G-1
Exhibit G-2 Form of Specially Serviced Asset Report...................G-2
Exhibit H-1 Comparative Financial Status Report.......................H-1
Exhibit H-2 Delinquent Loan Status Report.............................H-2
Exhibit H-3 Historical Loan Modification Report.......................H-3
Exhibit H-4 Historical Loss Estimate Report...........................H-4
Exhibit H-5 REO Status Report.........................................H-5
Exhibit H-6 Watch List ...............................................H-6
Exhibit H-7 Operating Statement Analysis..............................H-7
Exhibit H-8 NOI Adjustment Worksheet .................................H-8
Exhibit H-9 CSSA Reports .............................................H-9
Exhibit H-10 CSSA Reports ............................................H-10
Exhibit H-11 CSSA Reports ............................................H-11
v
<PAGE>
SCHEDULES
Schedule I MSMC Loan Schedule..........................................I
Schedule II Heller Loan Schedule.......................................II
Schedule III Credit Lease Loan Schedule................................III
Schedule IV Reserve Account Schedule...................................IV
vi
<PAGE>
THIS POOLING AND SERVICING AGREEMENT is dated and effective as of November 1,
1998 (this "AGREEMENT") among MORGAN STANLEY CAPITAL I INC., as depositor (the
"DEPOSITOR"), GMAC COMMERCIAL MORTGAGE CORPORATION as master servicer and as
special servicer (the "MASTER SERVICER" or "SPECIAL SERVICER", as applicable ),
LASALLE NATIONAL BANK, as trustee (the "TRUSTEE") of the trust created hereby
(the "TRUST"), and ABN AMRO BANK N.V., as fiscal agent (only in its capacity as
a party required to make Advances pursuant to Article IV hereof) (the "FISCAL
Agent").
PRELIMINARY STATEMENT
On the Closing Date, the Depositor will acquire certain Mortgage Loans
from Heller Financial Capital Funding, Inc., as seller ("HELLER" and, in such
capacity, a "SELLER"), and the remaining Mortgage Loans from Morgan Stanley
Mortgage Capital Inc. ("MSMC" and also a "SELLER") and, as of such date, the
Depositor will be the owner of the Mortgage Loans (excluding the right to
Excess Interest in respect of the Hyper-Amortization Loans)and the other
property being conveyed by it to the Trustee for inclusion in the Trust. On the
Closing Date, the Depositor hereby creates the Trust and appoints the Trustee
to serve as trustee of the Trust. On the Closing Date, the Depositor will
acquire (i) the REMIC I Regular Interests and the Class R-I Certificates as
consideration for its transfer to the Trust of the Mortgage Loans and the other
property constituting the Trust described in the definition of "REMIC I"; (ii)
the REMIC II Regular Interests and the Class R-II Certificates as consideration
for its transfer of the REMIC I Regular Interests and the assets comprising the
grantor trust to the Trust; and (iii) the REMIC III Certificates as
consideration for its transfer of the REMIC II Regular Interests to the Trust.
The Depositor has duly authorized the execution and delivery of this Agreement
to provide for the foregoing and the issuance of (a) the REMIC I Regular
Interests and the Class R-I Certificates representing in the aggregate the
entire beneficial ownership of REMIC I, (b) the REMIC II Regular Interests and
the Class R-II Certificates representing in the aggregate the entire beneficial
ownership of REMIC II and (c) the REMIC III Certificates representing in the
aggregate the entire beneficial ownership of REMIC III, with the Class N
Certificates representing both an interest in REMIC III and the entire
beneficial ownership of the assets of the grantor trust. All covenants and
agreements made by the Depositor and the Trustee herein with respect to the
Mortgage Loans and the other property constituting the Trust are for the
benefit of the Holders of the Certificates. The parties hereto are entering
into this Agreement, and the Trustee is accepting the trusts created hereby,
for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged.
1
<PAGE>
REMIC I
As provided herein, the Trustee will make the election described in
Section 12.1 hereof for the segregated pool of assets consisting of the
Mortgage Loans (excluding the right to Excess Interest in respect of the
Hyper-Amortization Loans) and certain related assets to be treated for federal
income tax purposes as a real estate mortgage investment conduit (a "REMIC"
and, such particular segregated pool of assets, "REMIC I"). The REMIC I Regular
Interests will be designated as the "regular interests" in REMIC I and the
Class R-I Certificates will be designated as the sole class of "residual
interests" in REMIC I.
A separate uncertificated REMIC I Regular Interest will be issued with
respect to each Mortgage Loan. Each REMIC I Regular Interest will represent the
right to receive principal corresponding to the initial Stated Principal
Balance of a related Mortgage Loan and interest thereon at a remittance rate
(the "REMIC I REMITTANCE RATE") equal to the Net Mortgage Rate of the related
Mortgage Loan in effect as of the Closing Date. For purposes of Treasury
regulation Section 1.860G-1 (a)(4)(iii), the "latest possible maturity date"
for each REMIC I Regular Interest shall be the Final Rated Distribution Date.
The Class R-I Certificates will represent the sole class of residual interests
in REMIC I for purposes of the REMIC Provisions and will have no principal
balances and no remittance rate, but will be entitled to receive on each
Distribution Date any portion of the Available Distribution Amount for such
Distribution Date not otherwise deemed distributed on the REMIC I Regular
Interests.
REMIC II
As provided herein, the Trustee will make the election described in
Section 12.1 hereof for the segregated pool of assets consisting of the REMIC I
Regular Interests to be treated for federal income tax purposes as a separate
REMIC (such particular pool of assets, "REMIC II"). The REMIC II Regular
Interests will be designated as representing the "regular interests" in REMIC
II and the Class R-II Certificates will be designated as representing the sole
class of "residual interests" in REMIC II for purposes of the REMIC Provisions.
Fourteen separate uncertificated REMIC II Regular Interests will be
issued and are designated as the "regular interests" in REMIC II. The following
table irrevocably sets forth the designation, remittance rate (the "REMIC II
REMITTANCE RATE") and initial Uncertificated Principal Balance for each REMIC
II Regular Interest. For purposes of Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" of each REMIC II
Regular Interest shall be the Final Rated Distribution Date. The Class R-II
Certificates will have no principal balances and no remittance rate, but will
be entitled to receive on each Distribution Date any portion of the REMIC II
Distribution Amount for such Distribution Date not otherwise deemed distributed
on the REMIC II Regular Interests.
REMIC II REGULAR INTERESTS
- -------------------------------------------------------------------------------
REMIC II Initial Uncertificated
Designation Remittance Rate Principal Balance
- -------------------------------------------------------------------------------
A-1 7.233% $203,500,000
- -------------------------------------------------------------------------------
A-2 7.233% 547,759,000
- -------------------------------------------------------------------------------
B 7.233% 52,906,000
- -------------------------------------------------------------------------------
C 7.233% 52,905,000
- -------------------------------------------------------------------------------
D 7.233% 58,196,000
- -------------------------------------------------------------------------------
E 7.233% 21,163,000
- -------------------------------------------------------------------------------
2
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- -------------------------------------------------------------------------------
F 7.233% 23,807,000
- -------------------------------------------------------------------------------
G 7.233% 18,517,000
- -------------------------------------------------------------------------------
H 7.233% 10,581,000
- -------------------------------------------------------------------------------
J 7.233% 21,162,000
- -------------------------------------------------------------------------------
K 7.233% 10,582,000
- -------------------------------------------------------------------------------
L 7.233% 15,871,000
- -------------------------------------------------------------------------------
M 7.233% 10,581,000
- -------------------------------------------------------------------------------
N 7.233% 10,581,956
- -------------------------------------------------------------------------------
REMIC III
As provided herein, the Trustee will make the election described in
Section 12.1 for the segregated pool of assets hereof consisting of the REMIC
II Regular Interests to be treated for federal income tax purposes as a
separate REMIC (such particular pool of assets, "REMIC III"). The REMIC III
Regular Certificates (and, in the case of the Class N Certificates, the Class N
REMIC Interest represented by the Class N Certificates) will be designated as
representing the "regular interests" in REMIC III and the Class R-III
Certificates will be designated as representing the sole class of "residual
interests" in REMIC III for purposes of the REMIC Provisions.
Fifteen separate Classes of REMIC III Regular Certificates will be
issued. The following table irrevocably sets forth the designation, the
pass-through rate (the "PASS-THROUGH RATE") and the initial aggregate principal
balance (the "CLASS PRINCIPAL BALANCE") for each Class of REMIC III Regular
Certificates. For purposes of Treasury regulation Section 1.860G-1 (a)(4)(iii),
the "latest possible maturity date" of each Class of REMIC III Regular
Certificates shall be the Final Rated Distribution Date. The Class R-III
Certificates will have no principal balances and no pass-through rate, but will
be entitled to receive on each Distribution Date any portion of the REMIC III
Distribution Amount for such Distribution Date not otherwise deemed distributed
on the REMIC III Regular Certificates.
REMIC III REGULAR CERTIFICATES
- -------------------------------------------------------------------------------
Initial Class
Designation Pass-Through Rate Principal Balance
- -------------------------------------------------------------------------------
Class A-1 6.01% per annum $203,500,000
- -------------------------------------------------------------------------------
Class A-2 6.48% per annum $547,759,000
- -------------------------------------------------------------------------------
Class X 0.75% per annum1 $1,058,111,956(2)
- -------------------------------------------------------------------------------
Class B 6.71% per annum1 $52,906,000
- -------------------------------------------------------------------------------
(1) The Pass-Through Rate for the Class X, Class B, Class C, Class D and E
Certificates is variable and, subsequent to the initial Distribution
Date, will be determined as described herein under the definition of
"Pass-Through Rate".
(2) For purposes of the REMIC Provisions, the Class X Certificates shall be
treated as comprised of fourteen component interests, each related to a
separate uncertificated REMIC II Regular Interest. The Initial Class
Balance, which is a notional amount and does not represent an entitlement
to any distribution of principal, is the sum of the notional amounts of
such component interests as of the Closing Date.
3
<PAGE>
- -------------------------------------------------------------------------------
Class C 7.11% per annum1 $52,905,000
- -------------------------------------------------------------------------------
Class D 7.15% per annum1 $58,196,000
- -------------------------------------------------------------------------------
Class E 7.15% per annum1 $21,163,000
- -------------------------------------------------------------------------------
Class F 6.01% per annum $23,807,000
- -------------------------------------------------------------------------------
Class G 6.01% per annum $18,517,000
- -------------------------------------------------------------------------------
Class H 6.01% per annum $10,581,000
- -------------------------------------------------------------------------------
Class J 6.01% per annum $21,162,000
- -------------------------------------------------------------------------------
Class K 6.01% per annum $10,582,000
- -------------------------------------------------------------------------------
Class L 6.01% per annum $15,871,000
- -------------------------------------------------------------------------------
Class M 6.01% per annum $10,581,000
- -------------------------------------------------------------------------------
Class N 6.01% per annum $10,581,956
- -------------------------------------------------------------------------------
ARTICLE I.
DEFINITIONS
SECTION 1.1 DEFINITIONS. Whenever used in this Agreement, including
without limitation in the Preliminary Statement, the following words and
phrases, unless the context otherwise requires, shall have the following
meanings:
"ACCOUNTANT" means a person engaged in the practice of accounting who
is Independent and is a member of the American Institute of Certified Public
Accountants.
"ACCRUED CERTIFICATE INTEREST" means with respect to any Class of
REMIC III Regular Certificates (other than the Class X Certificates) for any
Distribution Date, the product of the Certificate Principal Balance of such
Class as of the close of the preceding Distribution Date (or, in the case of
the first Distribution Date, as of the Closing Date) and one-twelfth of the
applicable Pass-Through Rate; and with respect to the Class X Certificates, the
Class X Accrued Certificate Interest. The Accrued Certificate Interest in
respect of each Class of REMIC III Regular Certificates for each Distribution
Date shall accrue on the basis of a 360-day year consisting of twelve 30-day
months.
"ACT" shall have the meaning set forth in Section 11.3.
"ADDITIONAL MASTER SERVICING COMPENSATION" has the meaning set forth
in Section 8.10(a).
"ADDITIONAL RIGHT": With respect to any Double Net Lease or Triple Net
Lease, any termination or abatement rights of the related Credit Tenant arising
from a Mortgagor's default under such Double Net Lease or Triple Net Lease in
performing certain obligations including, without limitation, environmental
remediation not caused by the Credit Tenant, enforcement of restrictive
covenants affecting other property owned by the Mortgagor, compliance with laws
affecting the related Mortgaged Property or common areas relating to such
Mortgaged Property.
"ADDITIONAL SPECIAL SERVICING COMPENSATION" has the meaning set forth
in Section 8.10(b).
"ADDITIONAL TRUST EXPENSE" means any of the following items: (a)
Special Servicing Fees, Liquidation Fees and Workout Fees; (b) Advance Interest
not paid out of Default Interest or Late Fees; (c) amounts paid by the Trust to
indemnify the Master Servicer, the Special Servicer, the Trustee,
4
<PAGE>
the Fiscal Agent or any other Person pursuant to the terms of this Agreement;
(d) the items described in clauses (ix) and (xiii) of Section 5.2(b); (e) to
the extent not covered by indemnification by one of the parties hereto or paid
by a source other than the Trust, any federal, state or local taxes imposed on
the Trust or any of its assets or transactions; and (f) to the extent not
included in the calculation of a Realized Loss and not covered by
indemnification by one of the parties hereto or otherwise, any other
unanticipated cost, liability, or expense of the Trust which the Trust has not
recovered, and in the judgment of the Master Servicer (or, in the case of a
Specially Serviced Mortgage Loan, the Special Servicer) will not recover, from
the related Mortgagor or Mortgaged Property or otherwise.
"ADVANCE" means any P&I Advance or Servicing Advance.
"ADVANCE INTEREST" means interest payable pursuant to Section 4.5 to
the Master Servicer, the Special Servicer, the Trustee or the Fiscal Agent on
outstanding Advances made by any such Person out of its own funds.
"ADVANCE RATE" means a per annum rate equal to the Prime Rate as
published in the "Money Rates" section of The Wall Street Journal from time to
time or such other publication as determined by the Trustee in its reasonable
discretion.
"ADVERSE REMIC EVENT" shall have the meaning set forth in Section
12.1(j).
"AFFILIATE" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any specified Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"AGREEMENT" means this Pooling and Servicing Agreement and all
amendments and supplements hereto.
"APPRAISAL" means an appraisal by a Qualified Appraiser that is
prepared in accordance with 12 C.F.R. 225.64.
"APPRAISAL EVENT" means, with respect to any Mortgage Loan (including
without limitation an REO Mortgage Loan), not later than the earliest of (i)
the date 120 days after the occurrence of any delinquency in payment with
respect to such Mortgage Loan if such delinquency remains uncured, (ii) the
date 60 days after receipt of notice that the related Mortgagor has filed a
bankruptcy petition or a receiver is appointed in respect of the related
Mortgaged Property, provided such petition or appointment is still in effect,
(iii) the effective date of any modification to a Money Term of a Mortgage
Loan, other than the extension of the date that a Balloon Payment is due for a
period of less than six months from the initial maturity date, and (iv) the
date 30 days following the date the related Mortgaged Property becomes an REO
Property.
"APPRAISAL REDUCTION" means, with respect to any Required Appraisal
Loan with respect to which an Appraisal or internal valuation is performed
pursuant to Section 6.6, an amount, calculated as of the first Determination
Date that is at least fifteen days after the date on which the report in
respect of the most recent such Appraisal or internal valuation, as the case
may be, is performed, equal to the excess, if any, of (a) the sum of (i) the
Stated Principal Balance of such Required Appraisal Loan, (ii) to the extent
not previously advanced, all unpaid interest on such Mortgage Loan at a per
annum rate
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equal to the Mortgage Rate, (iii) all unreimbursed Advances and interest on
Advances at the Advance Rate with respect to such Mortgage Loan, and (iv) to
the extent not previously advanced by the Master Servicer, the Trustee or the
Fiscal Agent, all currently due and unpaid real estate taxes and assessments,
insurance premiums and, if applicable, ground rents in respect of the related
Mortgaged Property or REO Property, as the case may be (in each case, net of
any amounts escrowed for such items), over (b) 90% of the Appraised Value (net
of any prior mortgage liens) of the related Mortgaged Property or REO Property
as determined by such Appraisal or internal valuation, as the case may be. Each
Appraisal or internal valuation for a Required Appraisal Loan shall be updated
annually. The Appraisal Reduction for each Required Appraisal Loan will be
recalculated based on subsequent Appraisals, internal valuations or updates.
Notwithstanding the foregoing, if an internal valuation of the Mortgaged
Property is performed, the Appraisal Reduction will equal the greater of (A)
the amount calculated above and (B) 25% of the Stated Principal Balance of the
Mortgage Loan. Furthermore, if an appraisal is not obtained from an MAI
appraiser following the earliest of the dates described in clauses (i)-(iv) in
the definition of "Appraisal Event", then until such an appraisal is obtained
the Appraisal Reduction will equal 25% of the Stated Principal Balance of the
Mortgage Loan. Each Appraisal Reduction will be reduced to zero as of the date
the related Mortgage Loan is brought current under the then-current terms of
the Mortgage Loan for at least three consecutive months, paid in full,
liquidated, repurchased or otherwise disposed of. An appraisal for any Required
Appraisal Loan that has not been brought current for at least three consecutive
months (or paid in full, liquidated, repurchased or otherwise disposed of) will
be updated annually, with corresponding adjustments to the amount of the
Appraisal Reduction.
"APPRAISED VALUE" means, with respect to any Mortgaged Property or REO
Property, the appraised value thereof determined by an Appraisal of such
property or, in the case of an internal valuation performed pursuant to Section
6.6, the value of such property determined by such internal valuation.
"ASSET STATUS REPORT " has the meaning set forth in Section 8.29(c).
"ASSIGNMENT OF LEASES" means, with respect to any Mortgage Loan, any
assignment of leases, rents and profits or equivalent instrument, whether
contained in the related Mortgage or executed separately, assigning to the
holder or holders of such Mortgage all of the related Mortgagor's interest in
the leases, rents and profits derived from the ownership, operation, leasing or
disposition of all or a portion of the related Mortgaged Property as security
for repayment of such Mortgage Loan.
"ASSIGNMENT OF MORTGAGE" means an assignment of the Mortgage, notice
of transfer or equivalent instrument, in recordable form, sufficient under the
laws of the jurisdiction wherein the related Mortgaged Property is located to
reflect the transfer of the Mortgage to the Trustee, which assignment, notice
of transfer or equivalent instrument may be in the form of one or more blanket
assignments covering the Mortgage Loans secured by Mortgaged Properties located
in the same jurisdiction, if permitted by law.
"ASSUMED MONTHLY PAYMENT" means, (a) with respect to any Balloon
Mortgage Loan (other than a Balloon Mortgage Loan that has become an REO
Mortgage Loan) for its Stated Maturity Date (provided that such Mortgage Loan
has not been paid in full, and no other Liquidation Event has occurred in
respect thereof, on or before the end of the Collection Period in which such
Stated Maturity Date occurs) and for any subsequent Due Date therefor as of
which such Mortgage Loan remains outstanding and part of the Trust Fund, if no
Monthly Payment (other than the related delinquent Balloon Payment) is
otherwise due for such Due Date, the scheduled monthly payment of principal
and/or interest deemed to be due in respect thereof for such Due Date equal to
the Monthly Payment (other than any related delinquent Balloon Payment) that
would have been due in respect of such Mortgage Loan on such
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Due Date if it had been required to continue to accrue interest in accordance
with its terms, and to pay principal in accordance with the amortization
schedule (if any), in effect immediately prior to, and without regard to the
occurrence of, its most recent scheduled Maturity Date; and (b) with respect to
any REO Mortgage Loan, for any Due Date therefor as of which the related REO
Property remains part of the Trust Fund, the scheduled monthly payment of
principal and/or interest deemed to be due in respect thereof on such Due Date
equal to the Monthly Payment (or, in the case of a Balloon Mortgage Loan
described in clause (a) of this definition, the Assumed Monthly Payment) that
was due in respect of the subject Mortgage Loan for the last Due Date prior to
its becoming an REO Mortgage Loan.
"AUTHENTICATING AGENT" means any authenticating agent appointed by the
Trustee pursuant to Section 7.10.
"AUTHORIZED OFFICER" means any Person that may execute an Officer's
Certificate on behalf of the Depositor.
"AVAILABLE DISTRIBUTION AMOUNT" means (x) with respect to REMIC I and
any Distribution Date, an amount equal to the aggregate of (a) all amounts on
deposit in the Distribution Account as of the commencement of business on such
Distribution Date that represent payments and other collections on or in
respect of the Mortgage Loans and any REO Properties that were received by the
Master Servicer or the Special Servicer through the end of the related
Collection Period (exclusive of any such amounts that were deposited in the
Distribution Account in error, that are payable to the Trustee in respect of
unpaid Trustee Fees, that are Excess Interest or that constitute Prepayment
Premiums) and (b) if and to the extent not already among the amounts described
in clause (a), (i) the aggregate amount of any P&I Advances made by the Master
Servicer, the Trustee or the Fiscal Agent for such Distribution Date pursuant
to Section 4.1 and/or Section 4.3, and (ii) the aggregate of any Compensating
Interest Payments made by the Master Servicer for such Distribution Date
pursuant to Section 8.21(b); (y) with respect to REMIC II and any Distribution
Date, all amounts distributed on the REMIC I Regular Interests; and (z) with
respect to REMIC III and any Distribution Date, all amounts distributed on the
REMIC II Regular Interests.
"BALLOON MORTGAGE LOAN" means any Mortgage Loan that by its original
terms or by virtue of any modification entered into as of the Closing Date
provides for an amortization schedule extending beyond its Maturity Date.
"BALLOON PAYMENT" means, with respect to any Balloon Mortgage Loan as
of any date of determination, the Monthly Payment payable on the Maturity Date
of such Mortgage Loan.
"BANKRUPTCY CODE" means, the federal bankruptcy code, as amended from
time to time (Title II of the United States Code).
"BOOK-ENTRY CERTIFICATES" means certificates evidencing a beneficial
interest in a Class of Certificates, ownership and transfer of which shall be
made through book entries as described in Section 3.6; provided, that after the
occurrence of a condition whereupon book-entry registration and transfer are no
longer authorized and Definitive Certificates are to be issued to the
Certificate Owners, such certificates shall no longer be "Book-Entry
Certificates."
"BREACH" has the meaning set forth in Section 2.3(a).
"BUSINESS DAY" means any day other than (i) a Saturday or a Sunday,
(ii) a legal holiday in New York, New York or in any of the principal cities in
which the Trustee, the Master Servicer or the
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Special Servicer conducts trust or servicing operations with respect to this
Agreement, or (iii) a day on which banking institutions or savings associations
in New York, New York or in any of the principal cities in which the Trustee,
the Master Servicer or the Special Servicer conducts trust or servicing
operations with respect to this Agreement, are authorized or obligated by law
or executive order to be closed.
"CASH LIQUIDATION" means, as to any defaulted Mortgage Loan other than
an REO Mortgage Loan, the receipt of all related Insurance Proceeds,
Condemnation Proceeds, Liquidation Proceeds and other payments or recoveries in
connection with a Final Recovery Determination.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. ss. 9601, et
seq.).
"CERTIFICATES" means the Depositor's Series 1998-HF2 Commercial
Mortgage Pass- Through Certificates issued hereunder.
"CERTIFICATE FACTOR" means, with respect to any Class of REMIC III
Regular Certificates, as of any date of determination, a fraction, expressed as
a decimal carried to eight places, the numerator of which is the then-related
Class Principal Balance or Class X Notional Amount, as the case may be, and the
denominator of which is the related initial Class Principal Balance or initial
Class X Notional Amount, as the case may be, as of the Closing Date.
"CERTIFICATE NOTIONAL AMOUNT" means, with respect to any Class X
Certificate as of any date of determination, the then notional principal amount
on which such Certificate accrues interest equal to the product of (a) the
Percentage Interest evidenced by such Certificate, multiplied by (b) the then
Class X Notional Amount. For purposes of the REMIC Provisions, the Class X
Notional Amount may be described as the Sum of the Component Notional Amounts
of the Component Interests at such time.
"CERTIFICATE OWNER" means, with respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Certificate as reflected on the
books of the Clearing Agency or on the books of a Person maintaining an account
with the Clearing Agency directly or as an indirect participant, in accordance
with the rules of the Clearing Agency.
"CERTIFICATE PRINCIPAL BALANCE" means, with respect to any Principal
Balance Certificate, as of any date of determination, the then-outstanding
principal amount of such Certificate equal to the product of (a) the Percentage
Interest evidenced by such Certificate, multiplied by (b) the then Class
Principal Balance of the Class of Certificates to which such Certificate
belongs.
"CERTIFICATE REGISTER" has the meaning provided in Section 3.2.
"CERTIFICATE REGISTRAR" means the registrar appointed pursuant to
Section 3.2.
"CERTIFICATEHOLDER" has the same meaning as "Holder."
"CLASS" means, collectively, all of the Certificates bearing the same
alphabetical or alphanumerical class designation.
"CLASS A-1 CERTIFICATES," "CLASS A-2 CERTIFICATES," "CLASS X
CERTIFICATES," "CLASS B CERTIFICATES," "CLASS C CERTIFICATES," "CLASS D
CERTIFICATES," "CLASS E CERTIFICATES," "CLASS F
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CERTIFICATES," "CLASS G CERTIFICATES," "CLASS H CERTIFICATES," "CLASS J
CERTIFICATES," "CLASS K CERTIFICATES," "CLASS L CERTIFICATES," "CLASS M
CERTIFICATES," "CLASS N CERTIFICATES," "CLASS R-I CERTIFICATES," "CLASS R-II
CERTIFICATES," and "CLASS R-III CERTIFICATES" mean the Certificates designated
as "Class A-1," "Class A-2," "Class X," "Class B," "Class C," "Class D," "Class
E," "Class F," "Class G," "Class H," "Class J," "Class K," "Class L, " "Class
M", "Class N," "Class R-I," "Class R-II," and "Class R-III," respectively, on
the faces thereof, in substantially the forms attached hereto as Exhibits A-1
through A-18 hereof.
"CLASS A CERTIFICATES" means the Class A-1 Certificates and Class A-2
Certificates, collectively.
"CLASS B CERTIFICATE RATE" means, with respect to any Distribution
Date, one-twelfth of (x) the REMIC II Remittance Rate minus (y) 0.46%.
"CLASS C CERTIFICATE RATE" means, with respect to any Distribution
Date, one-twelfth of (x) the REMIC II Remittance Rate minus (y) 0.06%.
"CLASS D CERTIFICATE RATE" means, with respect to any Distribution
Date, one-twelfth of (x) the REMIC II Remittance Rate minus (y) 0.02%.
"CLASS E CERTIFICATE RATE" means, with respect to any Distribution
Date, one-twelfth of (x) the REMIC II Remittance Rate minus (y) 0.02%.
"CLASS INTEREST SHORTFALL" means, with respect to any Class of
Principal Balance Certificates and any Distribution Date (except the initial
Distribution Date, with respect to which the Class Interest Shortfall for each
such Class will equal zero), the sum of (a) the excess, if any, of (i) all
Distributable Certificate Interest in respect of such Class of Certificates for
the immediately preceding Distribution Date, over (ii) all distributions of
Distributable Certificate Interest made with respect to such Class of
Certificates on the immediately preceding Distribution Date pursuant to Section
6.4, and (b), to the extent permitted by applicable law, interest for the
related Interest Accrual Period accrued at the applicable Pass-Through Rate on
the amount of any such excess described in the immediately preceding clause
(a). With respect to any Class of Principal Balance Certificates, the interest
referred to in clause (b) of the preceding sentence shall accrue on the basis
of a 360-day year consisting of twelve 30-day months.
"CLASS N GRANTOR TRUST INTEREST" means that portion of the rights
represented by the Class N Certificate that evidences beneficial ownership of
the grantor trust assets, as described in Section 12.1(a) hereof.
"CLASS N REMIC INTEREST" means that portion of the rights represented
by the Class N Certificate that evidences a regular interest in REMIC III,
which rights consist of the rights to the distributions described in Section
6.4 hereof and all other rights of the Holders of the Class N Certificates
other than those comprising the Class N Grantor Trust Interest.
"CLASS PRINCIPAL BALANCE" means the aggregate principal amount of any
Class of Principal Balance Certificates outstanding as of any date of
determination. On each Distribution Date, the Class Principal Balance of each
Class of the Principal Balance Certificates shall be reduced by the amount of
any distributions of principal made thereon on such Distribution Date pursuant
to Section 6.4 and, if and to the extent appropriate, shall be further reduced
on such Distribution Date as provided in Section 6.5.
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"CLASS X ACCRUED CERTIFICATE INTEREST" means, with respect to any
Distribution Date, the product of the Class X Notional Amount as of the close
of business on the preceding Distribution Date and one-twelfth of the Class X
Certificate Rate. For purposes of the REMIC Provisions, Class X Accrued
Certificate Interest, with respect to such Class and any Distribution Date, may
be expressed as the sum of the products of the Component Notional Amount of
each Component Interest on such Distribution Date and one-twelfth of the
Component Interest Rate for such Component Interest. Class X Accrued
Certificate Interest shall be calculated on the basis of a 360-day year
consisting of twelve 30-day months.
"CLASS X CERTIFICATE RATE" means, with respect to any Distribution
Date, the excess of (x) REMIC II Remittance Rate over (y) the weighted average
of the Pass-Through Rates of the Principal Balance Certificates (weighted on
the basis of their respective Certificate Balances on such Distribution Date).
"CLASS X CERTIFICATES" means the Class of Certificates, representing
fourteen Classes of "regular interests" in REMIC III within the meaning of the
REMIC Provisions, that is entitled on each Distribution Date to receive Accrued
Certificate Interest for such Class, and, Prepayment Premiums collected during
the related period to the extent set forth in Section 6.4(c), and is designated
as Class X on the face thereof.
"CLASS X NOTIONAL AMOUNT" means the notional principal amount by
reference to which the amount of interest payable to the Holders of the Class X
Certificates is computed and described, which, as of any date of determination,
is equal to the aggregate Class Principal Balances of the Principal Balance
Certificates on such date. For purposes of the REMIC Provisions, the Class X
Notional Amount may be expressed as the sum of the Component Notional Amounts
of all Component Interests of the Class X Certificates as of the date of
determination. The Class X Notional Amount does not represent a right to
receive distributions in respect of amount of principal from the Trust.
"CLEARING AGENCY" shall mean an organization registered as a "clearing
agency" pursuant to Section 17A of the 1934 Act, which initially shall be the
Depository.
"CLOSING DATE" means November 12, 1998.
"CODE" means the Internal Revenue Code of 1986, as amended, any
successor statutes thereto, and applicable U.S. Department of Treasury
regulations issued pursuant thereto in temporary or final form and proposed
regulations thereunder, to the extent applicable to the Trust or any REMIC Pool
by reason of their proposed effective dates.
"COLLECTION ACCOUNT" has the meaning set forth in Section 5.1(a).
"COLLECTION PERIOD" means, with respect to any Distribution Date, the
period beginning on the day after the Determination Date in the month preceding
the month of such Distribution Date (or, in the case of the first Distribution
Date, on the day after the Cut-off Date) and ending on the Determination Date
in the month in which the Distribution Date occurs.
"COMPARATIVE FINANCIAL STATUS REPORT": A report substantially
containing the content described in Exhibit H-1 attached hereto, prepared in
accordance with Section 8.14(j). For the purposes of the Master Servicer's
production of any such report that is required to state information for any
period prior to the Cut-off Date, the Master Servicer may conclusively rely
(without independent verification), absent manifest error, on information
provided to it by the related Mortgage Loan Seller.
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"COMPENSATING INTEREST PAYMENTS" means, with respect to any
Distribution Date, any payments required to be made by the Master Servicer
pursuant to Section 8.21(b) to cover Prepayment Interest Shortfalls.
"COMPONENT INTEREST" means any of the fourteen component "regular
interests" (within the meaning of the REMIC Provisions) comprising the Class X
Certificates, each of which relates to a separate Class of REMIC II Regular
Interest and bears interest at the Component Interest Rate for such Class on a
notional amount equal to the Uncertificated Principal Balance of the Class of
REMIC II Regular Interests related to such Class (its "Component Notional
Amount"). The Component Interests are designated as Class A-1X, Class A-2X,
Class BX, Class CX, Class DX, Class EX, Class FX, Class GX, Class HX, Class JX,
Class KX, Class LX, Class MX, Class NX which interests relate to REMIC II
Regular Interest A-1, A-2, B, C, D, E, F, G, H, J, K, L, M and N, respectively.
"COMPONENT INTEREST RATE" means, with respect to any Component
Interest, the per annum rate equal to the excess of the REMIC II Remittance
Rate for its related Class of REMIC II Regular Interest over the Pass-Through
Rate for the Class of Certificates bearing the same alphabetical designation as
such Component Interest's related Class of REMIC II Regular Interests.
"COMPONENT NOTIONAL AMOUNT" shall have the meaning set forth in the
definition of "Component Interest".
"CONDEMNATION PROCEEDS" means any awards resulting from the full or
partial condemnation or any eminent domain proceeding or any conveyance in lieu
or in anticipation thereof with respect to a Mortgaged Property or REO Property
by or to any governmental or quasi-governmental authority.
"CONTROLLING CLASS" means the most subordinate Class of Principal
Balance Certificates outstanding at any time of determination (or, if the then
Class Principal Balance of such Class of Certificates is less than 25% of the
initial Class Principal Balance thereof and there is a more senior Class of
Principal Balance Certificates then outstanding, the next most subordinate
Class of Principal Balance Certificates). For purposes of determining the
Controlling Class, the Class A Certificates will be treated as a single Class
of Certificates, the Subordinate Certificates will be subordinate to the Class
A Certificates, and each Class of Subordinate Certificates will be subordinate
to each other Class of Subordinate Certificates, if any, with an earlier
alphabetical Class designation. As of the Closing Date, the Controlling Class
will be the Class N Certificates.
"CONTROLLING PERSON" means, with respect to any Person, any other
Person that constitutes a "controlling person" within the meaning of Section 15
of the Securities Act.
"CORPORATE TRUST OFFICE" means, with respect to the presentment and
surrender of Certificates for the final distribution thereon or the presentment
and surrender of Certificates for any other purpose, the principal corporate
trust office of the Trustee or the New York Presenting Office (if any). The
principal corporate trust office of the Trustee is presently located at 135
South LaSalle Street, Suite 1625, Chicago, IL 60603, Attention: Asset-Backed
Securities Trust Services Group-Morgan Stanley Series 1998-HF2, or at such
other address as the Trustee may designate from time to time by notice to the
Certificateholders, the Depositor, the Master Servicer and the Special
Servicer.
"CORRECTED MORTGAGE LOAN" means any Mortgage Loan that had been a
Specially Serviced Mortgage Loan, has ceased to be such in accordance with the
definition of "Specially Serviced Mortgage Loan" (other than by reason of a
Liquidation Event occurring in respect of such Mortgage
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Loan or a related Mortgaged Property becoming an REO Property) and is not the
subject of an existing Servicing Transfer Event.
"CPR" means an assumed constant rate of prepayment each month (which
is quoted on a per annum basis) relative to the then-outstanding principal
balance of a pool of mortgage loans for the life of such mortgage loans.
"CREDIT LEASE": A lease securing a Credit Lease Loan.
"CREDIT LEASE LOANS" means, a Mortgage Loan secured by a Mortgaged
Property net leased to a tenant, a list of which is attached hereto as Schedule
III.
"CREDIT TENANT": The Tenant under a Credit Lease securing a Credit
Lease Loan.
"CROSS-COLLATERALIZED MORTGAGE LOANS" means any two or more Mortgage
Loans listed on the Mortgage Loan Schedule that are cross-collateralized with
each other.
"CSSA REPORTS": With respect to the Mortgage Loans, data files which
contain the information substantially in the forms of the CSSA standard
reporting package attached as Exhibits H-9, H-10 and H-11.
"CURRENT PRINCIPAL DISTRIBUTION AMOUNT" means with respect to the
Mortgage Loans for any Distribution Date, an amount equal to the aggregate of:
(a) the principal portions of all Monthly Payments (other than Balloon
Payments) and any Assumed Monthly Payments due or deemed due, as the case may
be, in respect of the Mortgage Loans, including without limitation any REO
Mortgage Loans, for their respective Due Dates occurring during the related
Collection Period; and
(b) that portion of all payments (including without limitation
Principal Prepayments and Balloon Payments but excluding any Excess Interest),
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, Repurchase
Proceeds, payments of Substitution Shortfall Amounts, REO Income and other
collections that were received on or in respect of the Mortgage Loans
(including without limitation any REO Mortgage Loans) or received on or in
respect of any related REO Properties, during the related Collection Period and
were identified and applied by the Master Servicer in accordance with Section
1.2 as payments or other recoveries of principal of such Mortgage Loans, in
each case net of any portion of such amounts that represents (i) a payment or
other recovery of the principal portion of any Monthly Payment (other than a
Balloon Payment) due, or of the principal portion of any Assumed Monthly
Payment deemed due, in respect of any such Mortgage Loan on a Due Date during
or prior to the related Collection Period and not previously paid or recovered
or (ii) an early payment (other than in the form of a Principal Prepayment) of
the principal portion of any Monthly Payment due in respect of any such
Mortgage Loan on a Due Date subsequent to the end of the related Collection
Period.
"CUSTODIAN" means the Trustee or any Person who is appointed by the
Trustee at any time as custodian pursuant to Section 7.9(h) and who is
unaffiliated with the Depositor and each Seller.
"CUT-OFF DATE" means November 1, 1998.
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"CUT-OFF DATE PRINCIPAL BALANCE" means, with respect to any Mortgage
Loan included in the Trust Fund as of the Closing Date, the unpaid principal
balance of such Mortgage Loan as of the Cut-off Date, reduced by all payments
of principal due on or before the Cut-off Date, whether or not paid.
"DCR" means Duff & Phelps Credit Rating Co. or its successor in
interest.
"DEBT SERVICE COVERAGE RATIO" means, with respect to any Mortgage Loan
(or group of Cross-Collateralized Mortgage Loans) for any specified period, the
debt service coverage ratio calculated in accordance with Exhibit H.
"DEBT SERVICE REDUCTION AMOUNT" means, with respect to any Mortgage
Loan for any Due Date, the amount of the reduction of the Monthly Payment for
such Due Date with respect to such Mortgage Loan as a result of any proceeding
under bankruptcy law or any similar proceeding (other than a Deficient
Valuation Amount); provided, however, that in the case of an amount that is
deferred, but not forgiven, such reduction shall not constitute a Debt Service
Reduction Amount.
"DEFAULTED MORTGAGE LOAN" means a Mortgage Loan that is at least 60
days delinquent in respect of any Monthly Payment (such delinquency to be
determined without giving effect to any grace period permitted by the related
Mortgage or Mortgage Note) or as to which the Master Servicer has made a
determination that such Mortgage Loan's becoming so delinquent is imminent.
"DEFAULT INTEREST" means, with respect to any Mortgage Loan (including
without limitation an REO Mortgage Loan), any amounts collected thereon, other
than Late Fees, Prepayment Premiums or Excess Interest, that represent
additional interest in excess of interest on the principal balance of such
Mortgage Loan accrued at the related Mortgage Rate.
"DEFAULTING PARTY" has the meaning set forth in Section 9.1(b).
"DEFICIENT VALUATION" means, with respect to any Mortgage Loan, a
valuation by a court of competent jurisdiction of the Mortgaged Property
relating to a Mortgage Loan in an amount less than the then-outstanding
indebtedness under such Mortgage Loan, which valuation results from a
proceeding initiated under the Bankruptcy Code, as amended from time to time,
and that reduces the amount the Mortgagor is required to pay under such
Mortgage Loan.
"DEFICIENT VALUATION AMOUNT" means the amount by which the total
amount due with respect to a Mortgage Loan (excluding interest not yet
accrued), including the principal balance of a Mortgage Loan plus any accrued
and unpaid interest thereon and any other amounts recoverable from the
Mortgagor with respect thereto pursuant to the terms thereof, is reduced in
connection with a Deficient Valuation.
"DEFINITIVE CERTIFICATES" means Certificates of any Class issued in
definitive, fully registered, certificated form without interest coupons.
"DELETED MORTGAGE LOAN" means a Mortgage Loan which is repurchased
from the Trust pursuant to the terms hereof or as to which one or more
Qualifying Substitute Mortgage Loans is or are substituted.
"DELINQUENT LOAN STATUS REPORT": A report substantially containing the
content described in Exhibit H-2 attached hereto, prepared in accordance with
Section 8.14(j).
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"DEPOSITOR" means Morgan Stanley Capital I Inc., a Delaware
corporation, and its successors in interest.
"DEPOSITORY" has the meaning set forth in Section 3.6(a).
"DEPOSITORY AGREEMENT" means the Letter of Representations dated
November 12, 1998, by and among the Depositor, the Trustee and the Depository.
"DETERMINATION DATE" means, with respect to any Distribution Date, the
fifth day of the month in which such Distribution Date occurs (or, if such
fifth day is not a Business Day, the Business Day immediately preceding such
fifth day).
"DIRECTLY OPERATE" means, with respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon or any use
of such REO Property in a trade or business conducted by the Trust, in each
case other than through an Independent Contractor; provided, however, that the
Trustee (or the Special Servicer on behalf of the Trustee) shall not be
considered to Directly Operate an REO Property solely because the Trustee (or
the Special Servicer on behalf of the Trustee) establishes rental terms,
chooses tenants, enters into or renews leases, deals with taxes and insurance,
or makes decisions as to repairs, tenant improvements or capital expenditures
with respect to such REO Property or undertakes any ministerial action
incidental thereto.
"DISCOUNT RATE" has the meaning set forth in Section 6.4(c).
"DISQUALIFIED ORGANIZATION" means any of (i) the United States, any
State or any political subdivision thereof, or any agency or instrumentality of
any of the foregoing (other than an instrumentality which is a corporation if
all of its activities are subject to tax and, except for FHLMC, a majority of
its board of directors is not selected by any such governmental unit), (ii) a
foreign government, international organization or any agency or instrumentality
of either of the foregoing, (iii) an organization (except certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from tax
imposed by Chapter 1 of the Code (unless such organization is subject to the
tax imposed by Section 511 of the Code on unrelated business taxable income),
(iv) rural electric and telephone cooperatives described in Section 1381 of the
Code and (v) any other Person so designated by the Trustee based upon an
Opinion of Counsel that the holding of an ownership interest in a Residual
Certificate by such Person may cause any of the REMIC Pools, or any Person
having an Ownership Interest in any Class of Certificates, other than such
Person, to incur a liability for any federal tax imposed under the Code that
would not otherwise be imposed but for the transfer of an Ownership Interest in
a Residual Certificate to such Person. The terms "United States," "State" and
"international organization" shall have the meanings set forth in Section 7701
of the Code or successor provisions.
"DISTRIBUTABLE CERTIFICATE INTEREST" means, with respect to any Class
of REMIC III Regular Certificates for any Distribution Date, the Accrued
Certificate Interest in respect of such Class of Certificates for such
Distribution Date, reduced (to not less than zero) by that portion, if any, of
the Net Aggregate Prepayment Interest Shortfall, if any, for such Distribution
Date allocated to such Class of Certificates as set forth below, and increased
by any Class Interest Shortfall in respect of such Class of Certificates for
such Distribution Date. The Net Aggregate Prepayment Interest Shortfall, if
any, for each Distribution Date shall be allocated on such Distribution Date
among the respective Classes of REMIC III Regular Certificates, pro rata, in
accordance with the respective amounts of Accrued Certificate Interest for such
Classes of Certificates for such Distribution Date.
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"DISTRIBUTION ACCOUNT" has the meaning set forth in Section 5.3.
"DISTRIBUTION DATE" means the 15th day of each month or, if any such
15th day is not a Business Day, the next succeeding Business Day, commencing in
December, 1998.
"DUE DATE" means: (i) with respect to any Mortgage Loan (other than an
REO Mortgage Loan) on or prior to its Maturity Date, the day of the month set
forth in the related Mortgage Note on which each Monthly Payment thereon is
scheduled to be first due; (ii) with respect to any Balloon Mortgage Loan
(other than an REO Mortgage Loan) after the Maturity Date therefor, the day of
the month set forth in the related Mortgage Note on which each Monthly Payment
(other than, to the extent different, the Balloon Payment) on such Mortgage
Loan had been scheduled to be first due; and (iii) with respect to any REO
Mortgage Loan, the day of the month set forth in the related Mortgage Note on
which each Monthly Payment on such Mortgage Loan prior to its becoming an REO
Mortgage Loan had been scheduled to be first due.
"ELIGIBLE ACCOUNT" means an account that is any of the following: (i)
maintained with a depository institution or trust company whose (A) commercial
paper, short-term unsecured debt obligations or other short-term deposits are
rated by any two of the Rating Agencies at least A-1 in the case of the Duff,
and F-1+ (or its equivalent) in the case of Fitch, if the deposits are to be
held in the account for 30 days or less, or (B) long-term unsecured debt
obligations are rated by any two of the Rating Agencies at least AA- in the
case of Duff, and at least AA (or its equivalent) in the case of Fitch, if the
deposits are to be held in the account more than 30 days (or if not then rated
by Fitch, at least AA- by Standard & Poor's Ratings Service, a division of The
McGraw-Hill Companies, Inc. or Moody's Investors Service Inc.), or (ii) a
segregated trust account or accounts maintained in the trust department of the
Trustee or other financial institution subject to regulations regarding
fiduciary funds on deposit similar to Title 12 of the Code of Federal
Regulations Section 9.10(b), or (iii) an account or accounts of a depository
institution acceptable to each Rating Agency, as evidenced by written
confirmation from such Rating Agency to the effect that use of any such account
as the Certificate Account or the Distribution Account would not result in the
downgrade, qualification or withdrawal of the rating then assigned to any Class
of Certificates by such Rating Agency.
"ELIGIBLE INVESTMENTS" means any one or more of the following
obligations or securities:
(i) direct obligations of, and obligations fully guaranteed as to
timely payment of principal and interest by, the United States of America,
FNMA, FHLMC or any agency or instrumentality of the United States of
America the obligations of which are backed by the full faith and credit of
the United States of America; provided that any obligation of, or guarantee
by, FNMA or FHLMC, other than an unsecured senior debt obligation of FNMA
or FHLMC, shall be an Eligible Investment only if Rating Agency
Confirmation is obtained with respect to such investment;
(ii) demand, time or similar deposits in, certificates of deposit of,
money market deposit accounts of, or bankers' acceptances issued by, any
depository institution or trust company (including the Trustee, the Fiscal
Agent, the Master Servicer, the Special Servicer or any Affiliate of the
Master Servicer, the Special Servicer, the Fiscal Agent or the Trustee,
acting in its commercial capacity) incorporated or organized under the laws
of the United States of America or any State thereof and subject to
supervision and examination by federal or state banking authorities, so
long as the commercial paper or other short-term debt obligations of such
depository institution or trust company are rated "D-1+" by DCR and "A-1+"
by Fitch or the
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long-term unsecured debt obligations of such depository institution or
trust company have been assigned a rating by each Rating Agency at least
equal "AAA" or, alternatively, so long as the ratings on such obligations
are otherwise acceptable to the Rating Agencies;
(iii) repurchase agreements or obligations with respect to any
security described in clause (i) above where such security has a remaining
maturity of one year or less and where such repurchase obligation has been
entered into with a depository institution or trust company (acting as
principal) described in clause (ii) above and where such repurchase
obligation will mature prior to the Business Day preceding the next date
upon which, as described in this Agreement, such amounts are required to be
withdrawn from the Collection Account and which meets the minimum rating
requirement for such entity described above;
(iv) securities (other than stripped bonds or stripped coupons)
bearing interest or sold at a discount issued by any corporation
incorporated under the laws of the United States of America or any state
thereof, which securities are rated "AAA" by each Rating Agency, unless
otherwise specified in writing by the Rating Agency; provided that
securities issued by any particular corporation will not be Eligible
Investments to the extent that investment therein will cause the
then-outstanding principal amount of securities issued by such corporation
and held in the Collection Account to exceed 5% of the sum of the aggregate
Certificate Principal Balance of the Principal Balance Certificates and the
aggregate principal amount of all Eligible Investments in the Collection
Account;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than one year after the date of issuance thereof),
and (A) rated "D-1+" by DCR and "A-1+" by Fitch;
(vi) [Reserved];
(vii) guaranteed reinvestment agreements maturing within 365 days or
less issued by any bank, insurance company or other corporation whose
long-term unsecured debt rating is not less than "AAA" or "AAA" (or its
equivalent rating) by DCR and Fitch (if rated by DCR or, if not rated by
DCR, by Fitch and another nationally recognized statistical rating
organization);
(viii) any money market funds rated "AAAm" or "AAAm-G" (or its
equivalent rating) by Fitch and "AAA" by DCR (if rated by DCR or, if not
rated by DCR, then otherwise acceptable to DCR), and any other demand,
money-market or time deposit, or any other obligation, security or
investment, with respect to which Rating Agency Confirmation has been
obtained; and
(ix) such other investments bearing interest or sold at a discount,
earning a return "in the nature of interest" within the meaning of Treasury
Regulation Section 1.860G-2(g)(i) (as evidenced by an Opinion of Counsel
delivered to the Trustee by the Master Servicer at the Master Servicer's
expense), as are acceptable to the Rating Agencies (as evidenced by Rating
Agency Confirmation) and treated as "permitted investments" that are "cash
flow investments" under Code Section 860G(a)(5);
provided (A) such investment is held for a temporary period pursuant to Section
1.860G-2(g)(i) of the Treasury Regulations, (B) such investment is payable by
the obligor in U.S. dollars, and (C) that no such
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instrument shall be an Eligible Investment (1) if such instrument evidences
either (a) a right to receive only interest payments or only principal payments
with respect to the obligations underlying such instrument or (b) a right to
receive both principal and interest payments derived from obligations
underlying such instrument and the principal and interest payments with respect
to such instrument provide a yield to maturity of greater than 120% of the
yield to maturity at par of such underlying obligations, or (2) if it may be
redeemed at a price below the purchase price or (3) if it is not treated as a
"permitted investment" that is a "cash flow investment" under Code Section
860G(a)(5); and provided, further, that any such instrument shall have a
maturity date no later than the date such instrument is required to be used to
satisfy the obligations under this Agreement, and, in any event, shall not have
a maturity in excess of one year; any such instrument must have a predetermined
fixed dollar of principal due at maturity that cannot vary or change; if rated,
the obligation must not have an "r" highlighter affixed to its rating; interest
on any variable rate instrument shall be tied to a single interest rate index
plus a single fixed spread (if any) and move proportionally with that index;
and provided, further, that no amount beneficially owned by any REMIC Pool
(including any amounts collected by the Master Servicer but not yet deposited
in the Collection Account) may be invested in investments treated as equity
interests for Federal income tax purposes. No Eligible Investments shall be
purchased at a price in excess of par. For the purpose of this definition, (x)
units of investment funds (including money market funds) shall be deemed to
mature daily, and (y) the "MINIMUM MATURITY-BASED RATING" means, in all cases,
"AAA".
"EMERGENCY ADVANCE" means any Servicing Advance that must be made
within five Business Days by the Special Servicer in order to avoid any
material penalty, any material harm to a Mortgaged Property or any other
material adverse consequence to the Trust.
"ENVIRONMENTAL ASSESSMENT" means a "Phase I Assessment" conducted in
accordance with ASTM Standard E 1527-93 or any successor thereto published by
ASTM.
"ENVIRONMENTAL LAWS" means any and all federal, state and local
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions, now or hereafter in effect, relating to the
environment or to emissions, discharges or releases of chemical substances,
including, without limitation, any and all pollutants, contaminants, petroleum
or petroleum products, asbestos or asbestos-containing materials,
polychlorinated biphenyls, urea-formaldehyde insulation, radon, industrial,
toxic or hazardous substances or wastes, into the environment, including,
without limitation, ambient air, surface water, ground water or land, or
otherwise relating to the manufacture, processing, distribution, use, labeling,
registration, treatment, storage, disposal, transport or handling of any of the
foregoing substances or wastes or the clean-up or other remediation thereof.
"EQUIVALENT 30/360 RATE" means with respect to a Mortgage Loan on
which interest is computed on a basis other than a 360-day year consisting of
twelve 30-day months, the per annum rate at which interest would have to accrue
on the Stated Principal Balance of such Mortgage Loan outstanding immediately
prior to such Distribution Date, assuming such accrual of interest were to
occur on the basis of a 360-day year consisting of twelve 30-day months, in
order to produce the actual Uncertificated Accrued Interest in respect of the
REMIC I Regular Interest corresponding to such Mortgage Loan in respect of such
Distribution Date.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ESCROW PAYMENT" means any payment received by the Master Servicer or
the Special Servicer for the account of any Mortgagor for application toward
the payment of real estate taxes,
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assessments, insurance premiums, ground rents (if applicable) and similar items
in respect of the related Mortgaged Property.
"EVENT OF DEFAULT" means one or more of the events described in
Section 9.1(a).
"EXCESS INTEREST" means, with respect to any Hyper-Amortization Loan
and any Distribution Date following its Hyper-Amortization Date, the excess of
the amount of interest accrued on the outstanding principal balance of such
Mortgage Loan during the related Collection Period at the Mortgage Rate in
effect for such Mortgage Loan after the Hyper-Amortization Date (the "Revised
Interest Rate") over the amount of interest that would have accrued on the
outstanding principal balance of such Mortgage Loan during such Collection
Period at the Mortgage Rate in effect for such Mortgage Loan immediately prior
to its Hyper-Amortization Date, and interest on such excess amount at the
Revised Rate from the date accrued to the date such amount is paid by the
related Mortgagor.
"EXCESS INTEREST DISTRIBUTION ACCOUNT" has the meaning set forth in
Section 5.3.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXPENSE LOSS" means a loss realized upon payment by the Trust of an
Additional Trust Expense that was not otherwise subject to a Servicing Advance
or was the subject of a determination that such Servicing Advance, if made,
would be nonrecoverable.
"FDIC" means the Federal Deposit Insurance Corporation or any
successor thereto.
"FINAL PURCHASER" has the meaning set forth in Section 10.1.
"FITCH" means Fitch IBCA, Inc. or its successor in interest.
"FHLMC" means the Federal Home Loan Mortgage Corporation, or any
successor thereto.
"FINAL CERTIFICATION" has the meaning set forth in Section 2.2.
"FINAL RATED DISTRIBUTION DATE" means November 15, 2030.
"FINAL RECOVERY DETERMINATION" means a determination by the Special
Servicer with respect to any defaulted Mortgage Loan or REO Property that, in
the reasonable and good faith judgment of the Special Servicer, there has been
a recovery of all Insurance Proceeds, Condemnation Proceeds, Liquidation
Proceeds, and other payments or recoveries that, in the Special Servicer's
reasonable and good faith judgment, exercised without regard to any obligation
of the Master Servicer or the Special Servicer to make payments from its own
funds pursuant to Section 8.5, will ultimately be recoverable.
"FISCAL AGENT" means ABN AMRO Bank N.V., a banking organization
organized under the laws of the Netherlands, its successor in interest, or any
successor Fiscal Agent appointed as herein provided.
"FISCAL AGENT TERMINATION EVENT" has the meaning set forth in Section
7.16.
"FNMA" means the Federal National Mortgage Association, or any
successor thereto.
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"GLOBAL CERTIFICATE" has the meaning set forth in Section 3.6.
"HAZARDOUS MATERIALS" means any dangerous, toxic or hazardous
pollutants, chemicals, wastes, or substances, including, without limitation,
those so identified pursuant to CERCLA or any other federal, state or local
environmental related laws and regulations, and including, without limitation,
asbestos and asbestos-containing materials, 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 that would, if classified as unusable, be included in
the foregoing definition.
"HELLER" means Heller Financial Capital Funding, Inc. or its successor
in interest.
"HELLER LOANS" means, collectively, those Mortgage Loans sold to the
Depositor pursuant to Mortgage Loan Purchase Agreement II and shown on Schedule
II hereto.
"HISTORICAL LOAN MODIFICATION REPORT": A report substantially
containing the content described in Exhibit H-3 attached hereto, prepared in
accordance with Section 8.14(j).
"HISTORICAL LOSS ESTIMATE REPORT": A report substantially containing
the content described in Exhibit H-4 attached hereto, prepared in accordance
with Section 8.14(j).
"HOLDER" means the Person in whose name a Certificate is registered on
the Certificate Register except that, solely for the purposes of giving any
consent, approval or waiver pursuant to this Agreement, any Certificate
registered in the name of the Master Servicer, the Special Servicer, the
Depositor or any Affiliate of any of them shall be deemed not to be
outstanding, and the Voting Rights to which it is entitled shall not be taken
into account in determining whether the requisite percentage of Voting Rights
necessary to effect any such consent, approval or waiver has been obtained,
except as otherwise provided in Sections 8.32, 9.4 and 13.3. The Trustee shall
be entitled to request and rely upon a certificate of the Master Servicer, the
Special Servicer or the Depositor in determining whether a Certificate is
registered in the name of an Affiliate of such Person. All references herein to
"Holders" or "Certificateholders" shall reflect the rights of Certificate
Owners as they may indirectly exercise such rights through the Clearing Agency
and its Participants, except as otherwise specified herein; provided, however,
that the parties hereto shall be required to recognize as a "Holder" or
"Certificateholder" only the Person in whose name a Certificate is registered
in the Certificate Register.
"HYPER-AMORTIZATION DATE" means as to any Mortgage Loan the date prior
to the stated maturity thereof that the Mortgage Rate and the rate of principal
amortization increases.
"HYPER-AMORTIZATION LOAN" means any Mortgage Loan that provides for a
Balloon Payment on a stated date prior to its Stated Maturity Date, and
provides for an increased Mortgage Rate and/or rate of principal amortization
following such date if the Mortgage Loan remains outstanding.
"INDEPENDENT" means, when used with respect to any Accountants, a
Person who is "independent" within the meaning of Rule 2-01(b) of the
Securities and Exchange Commission's Regulation S-X. Independent means, when
used with respect to any other Person, a Person who (a) is in fact independent
of another specified Person and any Affiliate of such other Person, (b) does
not have any material direct financial interest in such other Person or any
Affiliate of such other Person and (c) is not connected with such other Person
or any Affiliate of such other Person as an officer, employee, promoter,
underwriter, trustee, partner, director or Person performing similar functions.
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"INDEPENDENT CONTRACTOR" means any Person that would be an
"independent contractor" with respect to REMIC I within the meaning of Section
856(d)(3) of the Code if REMIC I were a real estate investment trust (except
that the ownership test set forth in that section shall be considered to be met
by any Person that owns, directly or indirectly, 35 percent or more of any
Class of Certificates, or such other interest in any Class of Certificates as
is set forth in an Opinion of Counsel, which shall be at no expense to the
Trustee or the Trust, delivered to the Trustee), so long as REMIC I does not
receive or derive any income from such Person and provided that the
relationship between such Person and REMIC I is at arm's length, all within the
meaning of Treasury Regulation Section 1.856-4(b)(5), or any other Person upon
receipt by the Trustee of an Opinion of Counsel, which shall be at no expense
to the Trustee or the Trust, 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 herein contemplated to be taken by an Independent Contractor
will neither 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 Section 860D(a) of the Code) nor
cause any income realized in respect of such REO Property to fail to qualify as
Rents from Real Property.
"INITIAL CERTIFICATION" has the meaning set forth in Section 2.2.
"INDIRECT PARTICIPANTS" means entities, such as banks, brokers,
dealers and trust companies, that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly.
"INITIAL POOL BALANCE" means the aggregate Cut-off Date Principal
Balance of the Mortgage Pool.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D
of the Securities Act.
"INSURANCE POLICY" means any hazard insurance policy, flood insurance
policy or title insurance policy relating to any Mortgage Loan or Mortgaged
Property or REO Property in effect as of the Closing Date or thereafter during
the term of this Agreement.
"INSURANCE PROCEEDS" means amounts paid by the insurer under any
Insurance Policy.
"INTEREST ACCRUAL PERIOD" means with respect to any REMIC I Regular
Interest, any REMIC II Regular Interest or any Class of REMIC III Regular
Certificates for any Distribution Date, the calendar month immediately
preceding the month in which such Distribution Date occurs.
"INTEREST ONLY CERTIFICATES" means the Class X Certificates.
"INTERESTED PERSON" means, as of any date of determination, the Master
Servicer, the Special Servicer, the Depositor, the Operating Adviser, any
Certificateholder, any Certificate Owner or any Person known to a Responsible
Officer of the Trustee to be an Affiliate of any of them.
"ISSUE PRICE" means, with respect to each Class of Certificates, REMIC
I Regular Interests and REMIC II Regular Interests, the "issue price" as
defined in the REMIC Provisions.
"LATE COLLECTIONS" means with respect to any Mortgage Loan (including
without limitation any REO Mortgage Loan), all amounts received thereon during
any Collection Period, whether as payments, Insurance Proceeds, Condemnation
Proceeds, Liquidation Proceeds, Repurchase Proceeds,
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payments of Substitution Shortfall Amounts, or otherwise, which represent late
payments or collections of the principal and/or interest due or deemed due in
respect of such Mortgage Loan (without regard to any acceleration of amounts
due thereunder by reason of default) on a Due Date in a previous Collection
Period and not previously recovered; provided that "Late Collections" shall in
no event include Penalty Charges.
"LATE FEE" shall mean a fee paid or payable, as the context may
require, by a Mortgagor as provided in the related Mortgage Note or Mortgage in
connection with a late payment made on the related Mortgage Loan by such
Mortgagor. "LEASE ENHANCEMENT POLICY": A non-cancelable credit lease
enhancement insurance policy that insures against certain losses arising out of
casualty or condemnation of the related Mortgaged Property, the form of which
has been approved by the Rating Agencies.
"LEGENDED DEFINITIVE CERTIFICATE" means a Definitive Certificate
bearing the Securities Legend.
"LIQUIDATION EVENT" means with respect to any Mortgage Loan (other
than an REO Mortgage Loan), any of the following events: (i) such Mortgage Loan
is paid in full; (ii) a Final Recovery Determination is made with respect to
such Mortgage Loan; (iii) such Mortgage Loan is repurchased or replaced by a
Seller pursuant to Section 7 of the related Mortgage Loan Purchase Agreement;
(iv) such Mortgage Loan is purchased by the Majority Certificateholder of the
Controlling Class, the Master Servicer or the Special Servicer, or is otherwise
sold, pursuant to Section 8.31 or otherwise liquidated by judicial action; or
(v) such Mortgage Loan is purchased by any Person entitled to effect an
optional termination of the Trust pursuant to Section 10.1. With respect to any
REO Property (and the related REO Mortgage Loan), any of the following events:
(i) a Final Recovery Determination is made with respect to such REO Property;
(ii) such REO Property is sold pursuant to Section 8.31; or (iii) such REO
Property is purchased by any Person entitled to effect an optional termination
of the Trust pursuant to Section 10.1.
"LIQUIDATION EXPENSES" means all customary, reasonable and necessary
"out of pocket" costs and expenses incurred on behalf of the Trust by the
Special Servicer in connection with the liquidation of any Specially Serviced
Mortgage Loan or REO Property pursuant to Section 8.7 or 8.31 (including,
without limitation, legal fees and expenses, title and escrow expenses,
committee or referee fees and, if applicable, brokerage commissions and
conveyance taxes) that were not covered by a Servicing Advance.
"LIQUIDATION FEE" means, with respect to each Specially Serviced
Mortgage Loan or REO Property as to which Liquidation Proceeds have been
received (other than any Specially Serviced Mortgage Loan or REO Property
purchased by any Person entitled to effect an optional termination of the Trust
pursuant to Section 10.1), a fee in an amount equal to the product of (x) 1.0%,
and (y) the related Liquidation Proceeds.
"LIQUIDATION PROCEEDS" means proceeds (other than payments by a
Mortgagor, Insurance Proceeds, Condemnation Proceeds, Repurchase Proceeds,
payments of Substitution Shortfall Amounts and REO Income) from the sale or
liquidation of a Mortgage Loan or related REO Property, net of related
Liquidation Expenses.
"LOAN-TO-VALUE RATIO" means, with respect to any Mortgage Loan, as of
any date of determination, the fraction, expressed as a percentage, the
numerator of which is the then-unpaid
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principal balance of such Mortgage Loan (or, if part of a group of
Cross-Collateralized Mortgage Loans, of such group), and the denominator of
which is the appraised value of the related Mortgaged Property (or, in the case
of a group of Cross-Collateralized Mortgage Loans, of all the Mortgaged
Properties securing such group) as determined by an Appraisal thereof.
"LOCK-BOX ACCOUNT" means with respect to any Mortgage Loan, any
lock-box, cash management or similar account required under the terms of the
related Mortgage or Mortgage Note.
"LOCK-BOX AGREEMENT" means, with respect to any Mortgage Loan, any
lock-box agreement relating to such Mortgage Loan executed and delivered by the
related Mortgagor pursuant to which a Lock-Box Account is created.
"LOSSES" has the meaning set forth in Section 12.3.
"LOSS REIMBURSEMENT AMOUNT" means, with respect to any REMIC I Regular
Interest, REMIC II Regular Interest or Class of Principal Balance Certificates
for any Distribution Date (except the initial Distribution Date, with respect
to which the Loss Reimbursement Amount for such REMIC I Regular Interest, REMIC
II Regular Interest or Class of Certificates, as the case may be, will be
zero), an amount equal to (a)(i) the Loss Reimbursement Amount with respect to
such REMIC I Regular Interest, REMIC II Regular Interest or Class of
Certificates, as the case may be, for the immediately preceding Distribution
Date, minus (ii) the aggregate of all reimbursements of previously allocated
and unreimbursed Realized Losses and Expense Losses (with interest) made on the
immediately preceding Distribution Date pursuant to Section 6.2, 6.3 or 6.4, as
applicable, with respect to such REMIC I Regular Interest, REMIC II Regular
Interest or Class of Certificates, as the case may be, plus (iii) the aggregate
of all Realized Losses and Expense Losses allocated to such REMIC I Regular
Interest, REMIC II Regular Interest or Class of Certificates, as the case may
be, on the immediately preceding Distribution Date pursuant to Section 6.5,
plus (b) one month's interest (calculated on the basis of a 360-day year
consisting of twelve 30-day months) on the amount described in clause (a) at
the REMIC I Remittance Rate, REMIC II Remittance Rate or Pass-Through Rate, as
applicable, in respect of such REMIC I Regular Interest, REMIC II Regular
Interest or Class of Certificates, as the case may be, for the current
Distribution Date.
"MAI" means member of the appraisal institute.
"MAINTENANCE RIGHT": With respect to any Double Net Lease, any
termination and abatement rights of the related Credit Tenant arising from a
Mortgagor's default under such Double Net Lease in performing obligations such
as required maintenance, repairs and replacements for the related Mortgaged
Property.
"MAJORITY CERTIFICATEHOLDER" means, with respect to any particular
Class or Classes of Certificates, any Certificateholder entitled to a majority
of the Voting Rights allocated to such Class or Classes, as the case may be.
"MASTER SERVICER" means GMAC Commercial Mortgage Corporation or any
successor master servicer appointed as provided herein.
"MASTER SERVICER REMITTANCE DATE" means, with respect to each
Distribution Date, the Business Day immediately preceding such Distribution
Date.
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"MASTER SERVICER REMITTANCE REPORT" means a report prepared by the
Master Servicer and in such media as may be agreed upon by the Master Servicer
and the Trustee containing such information regarding the Mortgage Loans as
will permit the Trustee to calculate the amounts to be distributed to the
Certificateholders pursuant to this Agreement and to furnish the Monthly
Certificateholder Report to Certificateholders required to be delivered
hereunder and containing such additional information as the Master Servicer,
the Trustee and the Depositor may from time to time mutually agree.
"MASTER SERVICING FEE" means, with respect to each Mortgage Loan
(including without limitation each REO Mortgage Loan), the fee designated as
such and payable to the Master Servicer pursuant to Section 8.10(a).
"MASTER SERVICING FEE RATE" means, with respect to each Mortgage Loan
(including without limitation each REO Mortgage Loan), the rate per annum
indicated on the Mortgage Loan Schedule.
"MATERIAL DEFECT" has the meaning set forth in Section 2.3(a).
"MATURITY DATE" means, with respect to any Mortgage Loan as of any
date of determination, the date on which the last payment of principal is due
and payable under the related Mortgage Note, after taking into account all
Principal Prepayments received and any Deficient Valuation, Debt Service
Reduction Amount or modification of the Mortgage Loan occurring prior to such
date of determination, but without giving effect to (i) any acceleration of the
principal of such Mortgage Loan by reason of a default or (ii) any grace period
permitted by the related Mortgage Note.
"MEMORANDUM" means the private placement memorandum dated November 5,
1998, relating to the Privately Offered Certificates.
"MINIMUM MATURITY-BASED RATING" has the meaning provided under the
definition of "Eligible Investments" herein.
"MONEY TERM" means with respect to any Mortgage Loan, the Maturity
Date, Mortgage Rate, principal balance, amortization term or payment frequency
thereof (and shall not include Late Fees or Default Interest provisions).
"MONTHLY CERTIFICATEHOLDER REPORT" means a report prepared pursuant to
Section 5.4 by the Trustee as to each Distribution Date generally in the form
and substance of Exhibit G-1, which sets forth, to the extent applicable; (i)
the amount, if any, of the distributions on such Distribution Date to the
Holders of each Class of Principal Balance Certificates applied to (A) reduce
the respective Class Principal Balance thereof and (B) reimburse previously
allocated Realized Losses and/or Expense Losses (with interest); (ii) the
amount, if any, of the distributions to Holders of each Class of REMIC III
Regular Certificates allocable to (A) Distributable Certificate Interest and
(B) Prepayment Premiums; (iii) the number and aggregate Stated Principal
Balance of Mortgage Loans in the Mortgage Pool at the close of business on the
related Determination Date; (iv) the number and aggregate Stated Principal
Balance of Mortgage Loans in the Mortgage Pool that are at the close of
business on the related Determination Date (A) delinquent one month, (B)
delinquent two months, (C) delinquent three or more months or (D) as to which
foreclosure proceedings have been commenced; (v) with respect to any REO
Property acquired during the related Collection Period, the Stated Principal
Balance of the related Mortgage Loan as of the date of acquisition of the REO
Property; (vi)(A) the latest appraised value of any REO Property included in
the Trust Fund as of the related Determination Date, (B) as to any REO Property
sold during the
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related Collection Period, the date of the related Final Recovery Determination
and the amount of the proceeds of such sale deposited into the Collection
Account, and (C) 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 the loan number of the related Mortgage Loan;
(vii) the Class Principal Balance or Class X Notional Amount, as the case may
be, and Certificate Factor of each Class of REMIC III Regular Certificates
before and after giving effect to the distributions made on such Distribution
Date; (viii) the aggregate amount of Principal Prepayments made during the
related Collection Period; (ix) the Pass-Through Rate applicable to each Class
of REMIC III Regular Certificates for such Distribution Date; (x) the aggregate
amount of servicing fees retained by or paid to the Master Servicer and the
Special Servicer; (xi) the Net Aggregate Prepayment Interest Shortfall, if any,
for such Distribution Date and the amount of Realized Losses or Expense Losses,
if any, incurred with respect to the Mortgage Loans during the related
Collection Period; (xii) the aggregate amount of Servicing Advances and P&I
Advances outstanding as of the end of the prior calendar month that have been
made by the Master Servicer, the Special Servicer, the Trustee and the Fiscal
Agent, separately stated; and (xiii) the amount of any Appraisal Reductions
effected during the related Collection Period on a loan-by-loan basis and the
total Appraisal Reductions as of such Distribution Date. In the case of
information furnished pursuant to subclauses (i) and (ii) above, the amounts
shall be expressed as a dollar amount per $1,000 of original actual or notional
principal amount of the Certificates for all Certificates of each applicable
Class.
"MONTHLY PAYMENT" means, with respect to any Mortgage Loan, the
scheduled monthly payment of principal and/or interest on such Mortgage Loan,
including any Balloon Payment, which is payable by a Mortgagor from time to
time under the terms of the related Mortgage Note (as such may be modified at
any time following the Closing Date) and applicable law.
"MORTGAGE" means, with respect to any Mortgage Loan, separately and
collectively, as the context may require, each mortgage, deed of trust or other
instrument securing a Mortgage Note and creating a lien on the related
Mortgaged Property.
"MORTGAGE FILE" means, collectively with respect to any Mortgage Loan,
the mortgage documents listed below:
(i) the original Mortgage Note, endorsed by the most recent
endorsee prior to the Trustee or, if none, by the originator,
without recourse, either in blank or to the order of the
Trustee in the following form: "Pay to the order of LaSalle
National Bank, as trustee for the registered holders of Morgan
Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2, without recourse";
(ii) the original or a copy of the related recorded Mortgage and, if
applicable, the originals or copies of any intervening
assignments of such Mortgage showing a complete chain of
assignment from the originator of the Mortgage Loan to the most
recent assignee of record thereof prior to the Trustee, if any,
in each case with evidence of recording indicated thereon;
(iii) an original assignment of the related Mortgage, in recordable
form, executed by the most recent assignee of record thereof
prior to the Trustee or, if none, by the originator, either in
blank or in favor of the Trustee (in such capacity);
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(iv) the original or a copy of the related recorded Assignment of
Leases (if such item is a document separate from the related
Mortgage) and, if applicable, the originals or copies of any
intervening assignments of such Assignment of Leases showing a
complete chain of assignment from the originator of the
Mortgage Loan to the most recent assignee of record thereof
prior to the Trustee, if any, in each case with evidence of
recording thereon;
(v) an original assignment of any related Assignment of Leases (if
such item is a document separate from the related Mortgage), in
recordable form, executed by the most recent assignee of record
thereof prior to the Trustee or, if none, by the originator,
either in blank or in favor of the Trustee (in such capacity),
which assignment may be included as part of the corresponding
assignment of Mortgage referred to in clause (iii) above;
(vi) an original or copy of any related security agreement (if such
item is a document separate from the related Mortgage) and, if
applicable, the originals or copies of any intervening
assignments of such security agreement showing a complete chain
of assignment from the originator of the Mortgage Loan to the
most recent assignee thereof prior to the Trustee, if any;
(vii) an original assignment of any related security agreement (if
such item is a document separate from the related Mortgage)
executed by the most recent assignee thereof prior to the
Trustee or, if none, by the originator, either in blank or in
favor of the Trustee (in such capacity), which assignment may
be included as part of an omnibus assignment covering other
documents relating to the Mortgage Loan provided that such an
omnibus assignment would be effective under applicable law;
(viii) originals or copies of all assumption, modification, written
assurance and substitution agreements, with evidence of
recording thereon (if appropriate), in those instances where
the terms or provisions of the Mortgage, Mortgage Note or any
related security document have been modified or the Mortgage
Loan has been assumed;
(ix) the original or a copy of the lender's title insurance policy
issued in connection with the origination of the Mortgage Loan,
together with all endorsements or riders (or copies thereof)
that were issued with or subsequent to the issuance of such
policy, insuring the priority of the Mortgage as a first lien
on the Mortgaged Property;
(x) the original or a copy of any guaranty of the obligations of
the Mortgagor under the Mortgage Loan, together with (A) if
applicable, the originals or copies of any intervening
assignments of such guaranty showing a complete chain of
assignment from the originator of the Mortgage Loan to the most
recent assignee thereof prior to the Trustee, if any, and (B)
an original assignment of such guaranty executed by the most
recent assignee thereof prior to the Trustee or, if none, by
the originator (which assignment may be included as part of an
omnibus assignment covering other documents relating to the
Mortgage Loan provided that such an omnibus assignment would be
effective under applicable law);
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(xi) (A) a recorded acknowledgment copy of any UCC Financing
Statements and continuation statements which were filed in
order to perfect (and maintain the perfection of) any security
interest held by the originator of the Mortgage Loan (and each
assignee of record prior to the Trustee) in and to the
personalty of the Mortgagor at the Mortgaged Property (in each
case with evidence of filing thereon) and which were in the
possession of the related Seller (or its agent) at the time the
subject Mortgage File was delivered to the Trustee and (B) if
any such security interest remains perfected and the earlier
UCC Financing Statements and continuation statements were in
the possession of the Seller, a UCC Financing Statement
executed by the most recent assignee of record prior to the
Trustee or, if none, by the originator, evidencing the transfer
of such security interest, either in blank or in favor of the
Trustee;
(xii) the original or a copy of the power of attorney (with evidence
of recording thereon, if appropriate) granted by the Mortgagor
if the Mortgage, Mortgage Note or other document or instrument
referred to above was signed on behalf of the Mortgagor;
(xiii) if the Mortgagor has a leasehold interest in the related
Mortgaged Property, the original ground lease or a copy
thereof;
(xiv) the original or a copy of the loan agreement, if applicable;
(xv) the original or a copy of the lockbox agreement, if applicable;
and
(xvi) with respect to any Credit Lease Loan, a copy of the related
Credit Lease, any guaranty, and any Lease Enhancement Policy or
Residual Value Insurance Policy;
provided that whenever the term "Mortgage File" is used to refer to documents
actually received by the Trustee, such term shall not be deemed to include such
documents and instruments required to be included therein unless they are
actually so received.
"MORTGAGE LOAN" means a mortgage loan identified on the Mortgage Loan
Schedule, as amended from time to time, and conveyed, transferred, sold,
assigned to and deposited with the Trustee pursuant to Section 2.1 or Section
2.3. As used herein, the term "Mortgage Loan" includes the related Mortgage
Note, Mortgage and other security documents contained in the related Mortgage
File.
"MORTGAGE LOAN PURCHASE AGREEMENT" means either of Mortgage Loan
Purchase Agreement I or Mortgage Loan Purchase Agreement II, as the case may
be.
"MORTGAGE LOAN PURCHASE AGREEMENT I" means that certain Mortgage Loan
Purchase Agreement dated as of November 5, 1998, between MSMC and the
Depositor, with respect to the MSMC Loans.
"MORTGAGE LOAN PURCHASE AGREEMENT II" means that certain Mortgage Loan
Purchase Agreement dated as of November 5, 1998, between Heller and the
Depositor, with respect to the Heller Loans.
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"MORTGAGE LOAN SCHEDULE" or "LOAN SCHEDULE" means, collectively, the
schedules attached hereto as Schedule I, which identifies each MSMC Loan and
Schedule II, which identifies each Heller Loan, as such schedules may be
amended from time to time pursuant to Section 2.3.
"MORTGAGE NOTE" means the note or other evidence of indebtedness
evidencing the indebtedness of a Mortgagor under a Mortgage Loan, together with
any rider, addendum or amendment thereto.
"MORTGAGE POOL" means, collectively, all of the Mortgage Loans
(including without limitation REO Mortgage Loans and Replacement Mortgage
Loans, but excluding Deleted Mortgage Loans).
"MORTGAGE RATE" means, with respect to any Mortgage Loan (including
without limitation an REO Mortgage Loan), the fixed annualized rate at which
interest is scheduled (in the absence of default) to accrue on such Mortgage
Loan from time to time (in accordance with the terms of the related Mortgage
Note (as such may be modified at any time following the Closing Date) and
applicable law), and without regard to any passage of the Maturity Date or any
acquisition of the related Mortgaged Property as an REO Property, provided that
in the case of a Non-30/360 Mortgage Loan, the Mortgage Rate shall be
determined in accordance with this sentence assuming that interest is scheduled
(in the absence of default) to accrue on such Mortgage Loan at the Equivalent
30/360 Rate.
"MORTGAGED PROPERTY" means, individually and collectively, as the
context may require, the real property interest or interests subject to the
lien of a Mortgage and constituting collateral for a Mortgage Loan. With
respect to any Cross-Collateralized Mortgage Loan, as the context may require,
"Mortgaged Property" may mean, collectively, all the Mortgaged Properties
securing such Cross-Collateralized Mortgage Loan.
"MORTGAGEE" means, which respect to any Mortgage as of any date of
determination, the holder of the related Mortgage Note as of such date.
"MORTGAGOR" means the obligor or obligors on a Mortgage Note.
"MSMC" means Morgan Stanley Mortgage Capital Inc., or any successor in
interest.
"MSMC LOANS" means, collectively, those Mortgage Loans sold to the
Depositor pursuant to Mortgage Loan Purchase Agreement I and shown on Schedule
I hereto.
"NET AGGREGATE PREPAYMENT INTEREST SHORTFALL" means, with respect to
any Distribution Date, the amount, if any, by which (a) the aggregate of all
Prepayment Interest Shortfalls incurred in connection with the receipt of
Principal Prepayments on the Mortgage Loans during the related Collection
Period, exceeds (b) the sum of (i) the aggregate of all Prepayment Interest
Excesses realized in connection with the receipt of Principal Prepayments on
the Mortgage Loans during the related Collection Period, and (ii) the aggregate
amount deposited by the Master Servicer in the Distribution Account for such
Distribution Date pursuant to Section 8.21(b) in connection with such
Prepayment Interest Shortfalls.
"NET MORTGAGE RATE" means, with respect to any Mortgage Loan
(including without limitation an REO Mortgage Loan), as of any date of
determination, a rate per annum equal to the related Mortgage Rate then in
effect, minus the applicable Master Servicing Fee Rate and Trustee Fee Rate.
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"NEW LEASE" means any lease of any REO Property entered into on behalf
of the Trust, including any lease renewed or extended on behalf of the Trust if
the Trust has the right to renegotiate the terms of such lease.
"NEW YORK PRESENTING OFFICE" means any office of an agent of the
Trustee or the Certificate Registrar, located in New York, New York, as the
Trustee or the Certificate Registrar, as the case may be, may designate from
time to time by written notice to the Depositor and the Certificateholders.
"NOI ADJUSTMENT WORKSHEET": A report prepared by the Master Servicer
or the Special Servicer, as the case may be, substantially containing the
content described in Exhibit H-8 attached hereto, presenting the computations
made in accordance with the methodology described in such Exhibit H-8 to
"normalize" the full year net operating income and debt service coverage
numbers used in the other reports required by this Agreement, sent to the
Trustee with each annual operating statement for a Mortgaged Property pursuant
to Section 8.14(d).
"NON-30/360 MORTGAGE LOAN" means a Mortgage Loan that accrues interest
other than on the basis of a 360-day year consisting of twelve 30-day months.
"NONDISQUALIFICATION OPINION" means a written opinion of Independent
nationally recognized outside tax counsel addressed to the Trustee, reasonably
acceptable in form and substance to the Trustee, that a contemplated action
will neither cause (i) any REMIC Pool to fail to qualify as a REMIC at any time
that any Certificates are outstanding nor (ii) a gain on the disposition of a
Qualified Mortgage which would be subject to the 100% tax on "prohibited
transactions," imposed by Section 860F of the Code, nor (iii) any REMIC Pool to
be subject to any tax under the REMIC Provisions, except for any tax on net
income from foreclosure property as provided for herein.
"NONRECOVERABLE ADVANCE" means any Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance.
"NONRECOVERABLE P&I ADVANCE" means any P&I Advance previously made or
proposed to be made in respect of a Mortgage Loan (including, without
limitation, an REO Mortgage Loan) which, in the reasonable and good faith
judgment of the Master Servicer, or, if applicable, the Trustee or Fiscal
Agent, will not be ultimately recoverable (together with Advance Interest
thereon) from late payments, Insurance Proceeds, Condemnation Proceeds or
Liquidation Proceeds, or any other recovery on or in respect of such Mortgage
Loan.
"NONRECOVERABLE SERVICING ADVANCE" means any Servicing Advance
previously made or proposed to be made in respect of a Mortgage Loan or REO
Property which, in the reasonable and good faith judgment of the Master
Servicer, the Special Servicer or, if applicable, the Trustee or the Fiscal
Agent, will not be ultimately recoverable (together with Advance Interest
thereon) from late payments, Insurance Proceeds, Condemnation Proceeds,
Liquidation Proceeds, or any other recovery on or in respect of such Mortgage
Loan or REO Property.
"OFFICER'S CERTIFICATE" means (x) in the case of the Depositor, a
certificate signed by one or more of the Chairman of the Board, any Vice
Chairman, the President, or any Senior Vice President, Vice President or
Assistant Vice President, and by one or more of the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Depositor, or (y) in
the case of the Master Servicer and the Special Servicer, a certificate signed
by any of the officers referred to above or an
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employee thereof designated as a Servicing Officer or Special Servicing Officer
pursuant to this Agreement, and (z) in the case of the Trustee, a certificate
signed by a Responsible Officer.
"OPERATING ADVISER" shall have the meaning specified in Section 8.32.
"OPERATING STATEMENT ANALYSIS" means, with respect to each Mortgage
Loan and REO Mortgage Property, a report substantially containing the content
described in Exhibit H-7 attached hereto, prepared in accordance with Section
8.14(j).
"OPINION OF COUNSEL" means a written opinion of counsel addressed to
the Trustee, reasonably acceptable in form and substance to the Trustee, and
which may be from in-house or outside counsel to the party required to deliver
such opinion but which must be from Independent outside counsel with respect to
any such opinion of counsel concerning the taxation, or status as a REMIC for
tax purposes, of the Trust or any REMIC Pool.
"OTS" means the Office of Thrift Supervision or any successor thereto.
"OWNERSHIP INTEREST" means, as to any Certificate, any ownership or
security interest in such Certificate as the Holder thereof and any other
interest therein, whether direct or indirect, legal or beneficial, as owner or
as pledgee.
"P&I ADVANCE" means, as to any Mortgage Loan (including, without
limitation, any REO Mortgage Loan), any advance in respect of delinquent
principal and/or interest made by the Master Servicer pursuant to Section 4.1
(or any similar advance made by the Trustee or the Fiscal Agent pursuant to
Section 4.3).
"P&I ADVANCE DATE" means, with respect to any Distribution Date, the
Business Day preceding such Distribution Date.
"PARTICIPANT" means a broker, dealer, bank, other financial
institution or other Person for whom the Clearing Agency effects book-entry
transfers and pledges of securities deposited with the Clearing Agency.
"PASS-THROUGH ENTITY" means any of (a) a regulated investment company
described in Section 851 of the Code, a real estate investment trust described
in Section 856 of the Code, a common trust fund or an organization described in
Section 1381(a) of the Code, (b) any partnership, trust or estate as such terms
are defined in the Code or (c) any Person holding a Residual Certificate as
nominee for another Person.
"PASS-THROUGH RATE" means with respect to,
(1) the Class A-1 Certificates, the Class A-2 Certificates, the
Class F Certificates, the Class G Certificates, the Class H
Certificates, the Class J Certificates, the Class K
Certificates the Class L Certificates, the Class M Certificates
and the Class N Certificates, for any Distribution Date, the
respective fixed rates per annum specified as such in the
Preliminary Statement;
(2) the Class X Certificates, for any Distribution Date, the Class
X Certificate Rate.
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(3) the Class B Certificates, for any Distribution Date, the Class
B Certificate Rate;
(4) the Class C Certificates, for any Distribution Date, the Class
C Certificate Rate
(5) the Class D Certificates, for any Distribution Date, the Class
D Certificate Rate; and
(6) the Class E Certificates, for any Distribution Date, the Class
E Certificate Rate.
"PENALTY CHARGES" means, with respect to any Mortgage Loan (including
without limitation an REO Mortgage Loan), any amounts collected thereon that
represent Late Fees or Default Interest.
"PERCENTAGE INTEREST" means, (i) with respect to any REMIC III Regular
Certificate, the portion of the relevant Class evidenced by such Certificate,
expressed as a percentage, the numerator of which is the Certificate Principal
Balance or the Certificate Notional Amount, as the case may be, of such
Certificate as of the Closing Date, as specified on the face thereof, and the
denominator of which is the initial Class Principal Balance or the initial
Class X Notional Amount, as the case may be, of the relevant Class as of the
Closing Date; and (ii) with respect to a Residual Certificate, the percentage
interest in distributions to be made with respect to the relevant Class, as
stated on the face of such Certificate.
"PERMITTED TRANSFEREE" means any Transferee other than a Disqualified
Organization.
"PERSON" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"PLAN" has the meaning set forth in Section 3.3(d).
"POLICY TERMINATION EVENT": With respect to any Lease Enhancement
Policy and Residual Value Policy, any abatement, rescission, cancellation,
termination, contest, legal process, arbitration or disavowal of liability
thereunder by the related insurer.
"PREPAYMENT ASSUMPTION" means a CPR of 0%, applied to each Mortgage
Loan during any period that the related Mortgagor is permitted to make
voluntary Principal Prepayments without a Prepayment Premium (and with respect
to each Hyper-Amortization Loan, treating its Hyper-Amortization Date as its
Maturity Date), calculated on the basis of a yield maintenance formula used for
determining the accrual of original issue discount, market discount and
premium, if any, on the REMIC I Regular Interests, the REMIC II Regular
Interests or the REMIC III Regular Certificates for federal income tax
purposes.
"PREPAYMENT INTEREST EXCESS" means, with respect to any Mortgage Loan
that was subject to a Principal Prepayment in full or in part during any
Collection Period, which Principal Prepayment was applied to such Mortgage Loan
following such Mortgage Loan's Due Date in such Collection Period, the amount
of interest at the related Net Mortgage Rate (except to the extent it
constitutes Excess Interest) accrued on the amount of such Principal Prepayment
during the period from
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and after such Due Date to but not including the date such Principal Prepayment
was applied to such Mortgage Loan, to the extent actually collected from the
related Mortgagor (without regard to any Prepayment Premium that may have been
collected).
"PREPAYMENT INTEREST SHORTFALL" means, with respect to any Mortgage
Loan that was subject to a Principal Prepayment in full or part during any
Collection Period, which Principal Prepayment was applied to such Mortgage Loan
prior to such Mortgage Loan's Due Date in such Collection Period, the amount of
interest that would have accrued at the related Net Mortgage Rate (except to
the extent it constitutes Excess Interest) on the amount of such Principal
Prepayment during the period commencing on the date as of which such Principal
Prepayment was applied to such Mortgage Loan and ending on the day immediately
preceding such Due Date, inclusive, to the extent not collected from the
related Mortgagor (without regard to any Prepayment Premium that may have been
collected).
"PREPAYMENT PREMIUM" means any premium, penalty or fee paid or
payable, as the context requires, by a Mortgagor in connection with a Principal
Prepayment on, or other early collection of principal of, a Mortgage Loan
(including, without limitation, an REO Mortgage Loan).
"PRINCIPAL BALANCE CERTIFICATES" means, collectively, the REMIC III
Regular Certificates other than the Class X Certificates.
"PRINCIPAL DISTRIBUTION AMOUNT" means, for any Distribution Date, the
aggregate of (i) the Current Principal Distribution Amount for such
Distribution Date, and (ii) if such Distribution Date is subsequent to the
initial Distribution Date, the excess, if any, of the Principal Distribution
Amount for the preceding Distribution Date, over the aggregate distributions of
principal made on the Principal Balance Certificates in respect of such
Principal Distribution Amount on the preceding Distribution Date.
"PRINCIPAL PREPAYMENT" means any payment of principal made by the
Mortgagor on a Mortgage Loan that is received in advance of its scheduled Due
Date and that is not accompanied by an amount of interest representing
scheduled interest due on any date or dates in any month or months subsequent
to the month of prepayment.
"PRIVATELY OFFERED CERTIFICATES" means, unless and until registered
under the Securities Act, the Class X, Class F, Class G, Class H, Class J,
Class K, Class L, Class M, Class N and Residual Certificates.
"PROPOSED PLAN" has the meaning set forth in Section 8.20.
"PROSPECTIVE INVESTOR" means any prospective purchaser of a
Certificate or, in the case of a Book-Entry Certificate, of a beneficial
ownership interest therein.
"PROSPECTUS SUPPLEMENT" the Prospectus Supplement dated November 5,
1998 relating to the Publicly Offered Certificates.
"PUBLICLY OFFERED CERTIFICATES" means the Class A-1, Class A-2, Class
B, Class C, Class D and Class E Certificates.
"PURCHASE PRICE" means, with respect to any Mortgage Loan (other than
an REO Mortgage Loan), a price equal to the outstanding principal balance of
such Mortgage Loan as of the date of purchase, together with (a) all accrued
and unpaid interest on such Mortgage Loan at the related
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Mortgage Rate to but not including the Due Date in the Collection Period of
purchase, (b) all related unreimbursed Servicing Advances, and any Advance
Interest payable on any Advance hereunder accrued to the date of purchase on
Advances and (c) if such Mortgage Loan is being repurchased by a Seller
pursuant to Section 7 of the related Mortgage Loan Purchase Agreement, all
expenses reasonably incurred or to be incurred by the Master Servicer, the
Special Servicer, the Depositor and the Trustee in respect of the Breach or
Material Defect giving rise to the repurchase obligation. With respect to any
REO Property, Purchase Price means the amount calculated in accordance with the
preceding sentence in respect of the related REO Mortgage Loan.
"QIB" means a "qualified institutional buyer" within the meaning of
Rule 144A under the Securities Act.
"QUALIFIED APPRAISER" means an Independent licensed MAI-designated
appraiser with at least five years experience in properties of like kind and in
the same area.
"QUALIFIED INSURER" means an insurance company or security or bonding
company duly qualified as such under the laws of the relevant jurisdiction and
duly authorized and licensed in such jurisdiction to transact the applicable
insurance business and to write the insurance provided.
"QUALIFIED MORTGAGE" means a Mortgage Loan that is a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code (but without
regard to the rule in Treasury Regulation Section 1.860G-2(f)(2) that treats a
defective obligation as a qualified mortgage, or any substantially similar
successor provision) and applicable Treasury regulations promulgated pursuant
thereto.
"QUALIFYING SUBSTITUTE MORTGAGE LOAN" means a Mortgage Loan
substituted for a Deleted Mortgage Loan which, on the date of substitution, (i)
has a principal balance, after deduction of the principal portion of the
Monthly Payment due in the month of substitution, not in excess of the Stated
Principal Balance of the Deleted Mortgage Loan; (ii) is accruing interest at a
rate of interest at least equal to that of the Deleted Mortgage Loan; (iii) has
a fixed Mortgage Rate; (iv) is accruing interest on the same basis as the
Deleted Mortgage Loan (for example, on the basis of a 360-day year consisting
of twelve 30-day months); (v) has a remaining term to stated maturity not
greater than, and not more than two years less than, that of the Deleted
Mortgage Loan; (vi) has an original Loan-to-Value Ratio not higher than that of
the Deleted Mortgage Loan and a current Loan-to-Value Ratio (equal to the
principal balance on the date of substitution divided by its current Appraised
Value) not higher than the then-current Loan-to-Value Ratio of the Deleted
Mortgage Loan; (vii) will comply with all of the representations and warranties
relating to Mortgage Loans set forth in the related Mortgage Loan Purchase
Agreement, as of the date of substitution; (viii) has an Environmental
Assessment relating to the related Mortgaged Property in its Servicing File;
and (ix) as to which the Trustee has received a written opinion of Independent
outside tax counsel, reasonably acceptable in form and substance to the
Trustee, at the related Seller's expense, that such Mortgage Loan is a
"qualified replacement mortgage" within the meaning of Section 860G(a)(4) of
the Code; provided that no such Mortgage Loan shall be substituted for a
Deleted Mortgage Loan if it has a Maturity Date after the date three years
prior to the Final Rated Distribution Date, and provided, further, that no such
Mortgage Loan shall be substituted for a Deleted Mortgage Loan unless Rating
Agency Confirmation is obtained; and provided, further that no such Mortgage
Loan shall be substituted for a Deleted Mortgage Loan if it would result in an
Adverse REMIC Event in respect of any REMIC Pool; and provided, further that no
such Mortgage Loan shall be substituted for a Deleted Mortgage Loan unless the
Operating Adviser shall have approved of such substitution based upon an
engineering report and the Environmental Assessment obtained with respect to
such Mortgage Loan (provided, however, that such approval of the Operating
Adviser may not be unreasonably withheld, as determined by the Special Servicer
in accordance with the Servicing
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Standard). In the event that either one mortgage loan is substituted for more
than one Deleted Mortgage Loan or more than one mortgage loan is substituted
for one or more Deleted Mortgage Loans, then (a) the principal balance referred
to in clause (i) above shall be determined on the basis of aggregate principal
balances and (b) the rates referred to in clauses (ii) and (iii) above and the
remaining term to stated maturity referred to in clause (v) above shall be
determined on a weighted average basis. Whenever a Qualifying Substitute
Mortgage Loan is substituted for a Deleted Mortgage Loan pursuant to this
Agreement, the party effecting such substitution shall certify that such
Mortgage Loan meets all of the requirements of this definition and shall send
such certification to the Trustee.
"RATING AGENCIES" means DCR and Fitch.
"RATING AGENCY CONFIRMATION" means, with respect to any matter, where
required under this Agreement, confirmation in writing by each Rating Agency
that a proposed action, failure to act, or other event specified herein will
not in and of itself result in the withdrawal, downgrade, or in the case of
Fitch, qualification of the then-current rating assigned by such Rating Agency
to any Class of Certificates then rated by such Rating Agency.
"REALIZED LOSS" means (x) with respect to each defaulted Mortgage Loan
as to which a Final Recovery Determination has been made, or with respect to
any REO Mortgage Loan as to which a Final Recovery Determination has been made
as to the related REO Property, an amount (not less than zero) equal to (i) the
unpaid principal balance of such Mortgage Loan (or, in the case of an REO
Property, the related REO Mortgage Loan) as of the commencement of the
Collection Period in which the Final Recovery Determination was made, plus (ii)
all accrued but unpaid interest on such Mortgage Loan (or, in the case of an
REO Property, the related REO Mortgage Loan) at the related Mortgage Rate to
but not including the Due Date in the Collection Period in which the Final
Recovery Determination was made, in any event determined without taking into
account the amounts described in subclause (iv) of this sentence, plus (iii)
any related unreimbursed Servicing Advances as of the commencement of the
Collection Period in which the Final Recovery Determination was made, together
with any new related Servicing Advances made during such Collection Period and
all unpaid Advance Interest on all Advances, minus (iv) all payments and
proceeds, if any, received in respect of such Mortgage Loan or REO Property, as
the case may be, during the Collection Period in which such Final Recovery
Determination was made (net of any related Liquidation Expenses paid
therefrom); (y) with respect to any Mortgage Loan as to which any portion of
the outstanding principal or accrued interest owed thereunder was forgiven in
connection with a bankruptcy or similar proceeding involving the related
Mortgagor or a modification, waiver or amendment of such Mortgage Loan granted
or agreed to by the Master Servicer or Special Servicer pursuant to Section
8.18, the amount of such principal or interest so forgiven; and (z) with
respect to any Mortgage Loan as to which the Mortgage Rate thereon has been
permanently reduced for any period in connection with a bankruptcy or similar
proceeding involving the related Mortgagor or a modification, waiver or
amendment of such Mortgage Loan granted or agreed to by the Master Servicer or
Special Servicer pursuant to Section 8.18, the amount of the consequent
reduction in the interest portion of each successive Monthly Payment due
thereon. Each such Realized Loss shall be deemed to have been incurred on the
Due Date for each affected Monthly Payment.
"RECORD DATE" means, with respect to any Class of Certificates for any
Distribution Date, the last Business Day of the calendar month immediately
preceding the month in which such Distribution Date occurs.
"REMIC" means a real estate mortgage investment conduit within the
meaning of Section 860D of the Code.
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"REMIC I" means the segregated pool of assets included in the Trust
created hereby and to be administered hereunder, consisting of the Mortgage
Loans (excluding the right to Excess Interest in respect of the
Hyper-Amortization Loans), as from time-to-time are subject to this Agreement,
the Mortgage Files relating thereto, all proceeds of and payments under such
Mortgage Loans received after the Closing Date (other than Excess Interest),
such amounts as shall from time to time be held in the Collection Account and
the Distribution Account, the Insurance Policies and any REO Properties
acquired in respect of any Mortgage Loan, for which a REMIC election is to be
made pursuant to Section 12.1(a) hereof.
"REMIC I INTERESTS" means, collectively, the REMIC I Regular Interests
and the Class R-I Certificates.
"REMIC I REGULAR INTEREST" means, with respect to each Mortgage Loan
(including, without limitation, each REO Mortgage Loan), the separate
uncertificated interest in REMIC I issued in respect of such Mortgage Loan
hereunder and designated as a "regular interest" in REMIC I. Each REMIC I
Regular Interest shall represent a right to receive interest at the related
REMIC I Remittance Rate and distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance (which shall equal the Cut-off Date Principal
Balance of the related Mortgage Loan). The designation for each REMIC I Regular
Interest shall be the loan number for the related Mortgage Loan set forth in
the Mortgage Loan Schedule as of the Closing Date. If a Replacement Mortgage
Loan or Loans are substituted for any Deleted Mortgage Loan, the REMIC I
Regular Interest that related to the Deleted Mortgage Loan shall thereafter
relate to such Replacement Mortgage Loan(s).
"REMIC I REMITTANCE RATE" means, with respect to any REMIC I Regular
Interest for any Distribution Date, a rate per annum equal to the Net Mortgage
Rate in effect for the related Mortgage Loan (including without limitation an
REO Mortgage Loan) as of the Closing Date. If any Mortgage Loan included in the
Trust Fund as of the Closing Date is replaced by a Replacement Mortgage Loan or
Loans, the REMIC I Remittance Rate for the related REMIC I Regular Interest
shall still be calculated in accordance with the preceding sentence based on
the Net Mortgage Rate for the Deleted Mortgage Loan.
"REMIC II" means the segregated pool of assets consisting of the REMIC
I Regular Interests and all distributions thereon conveyed to the Trustee for
the benefit of REMIC III and for which a separate REMIC election is to be made
pursuant to Section 12.1(a) hereof.
"REMIC II DISTRIBUTION AMOUNT" has the meaning set forth in Section
6.2(c).
"REMIC II INTERESTS" means, collectively, the REMIC II Regular
Interests and the Class R-II Certificates.
"REMIC II REGULAR INTEREST" means any of the fourteen separate
uncertificated beneficial interests in REMIC II issued hereunder and designated
as a "regular interest" in REMIC II. Each REMIC II Regular Interest shall
represent a right to receive interest at the related REMIC II Remittance Rate
in effect from time to time and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto. The designations for the respective REMIC II
Regular Interests are set forth in the Preliminary Statement hereto.
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"REMIC II REMITTANCE RATE" means, with respect to each of REMIC II
Regular Interests A-1, A-2, B, C, D, E, F, G, H, J, K, L, M and N for any
Distribution Date, the Weighted Average REMIC I Remittance Rate.
"REMIC III CERTIFICATE" means any Certificate, other than a Class R-I
or Class R-II Certificate.
"REMIC III DISTRIBUTION AMOUNT" has the meaning set forth in Section
6.3(c).
"REMIC III REGULAR CERTIFICATE" means any REMIC III Certificate, other
than a Class R-III Certificate, and where appropriate with respect to a Class X
Certificate, may refer to the Component Interests thereof, as the case
requires. References to REMIC III Regular Certificates will, with respect to
the Class N Certificate, be considered to refer to that component of the rights
represented by such Class N Certificate that is a "regular interest" in REMIC
III, where appropriate.
"REMIC POOL" means each of the three segregated pools of assets
designated as a REMIC pursuant to Section 12.1(a) hereof.
"REMIC PROVISIONS" means the provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Sections
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations and rulings promulgated thereunder, as the
foregoing may be in effect from time to time and taking account, as
appropriate, of any proposed legislation which, as proposed, would have an
effective date prior to enactment thereof and any proposed regulations.
"RENTS FROM REAL PROPERTY" means, with respect to any REO Property,
income of the character described in Section 856(d) of the Code.
"REO ACQUISITION" means the acquisition of any REO Property pursuant
to Section 8.7.
"REO EXTENSION" has the meaning set forth in Section 8.19(a).
"REO INCOME" means, with respect to any REO Property for any
Collection Period, all income received in connection with such REO Property
during such period.
"REO MORTGAGE LOAN" means a Mortgage Loan as to which the related
Mortgaged Property is an REO Property.
"REO PROPERTY" means a Mortgaged Property acquired by the Trust
through foreclosure, deed-in-lieu of foreclosure, abandonment or reclamation
from bankruptcy in connection with a Defaulted Mortgage Loan or otherwise
treated as foreclosure property under the REMIC Provisions.
"REO SALE DEADLINE" has the meaning set forth in Section 8.19(a).
"REO STATUS REPORT": A report substantially containing the content
described in Exhibit H-5 attached hereto, prepared in accordance with Section
8.14(j).
"REO TAX" has the meaning set forth in Section 8.20(a).
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"REPLACEMENT MORTGAGE LOAN" means any Qualifying Substitute Mortgage
Loan that is substituted for one or more Deleted Mortgage Loans.
"REPORT DATE" means the third Business Day before the related
Distribution Date.
"REPURCHASE PROCEEDS" means amounts paid by any Seller under the
related Mortgage Loan Purchase Agreement, in connection with the repurchase of
any Mortgage Loan as contemplated by Section 2.3.
"REQUEST FOR RELEASE" means a request for release of certain documents
relating to the Mortgage Loans, a form of which is attached hereto as
Exhibit C.
"REQUIRED APPRAISAL LOAN" means any Mortgage Loan (including without
limitation any REO Mortgage Loan) as to which an Appraisal Event has occurred
and is continuing.
"RESERVE ACCOUNT" means the account or accounts created and maintained
pursuant to Section 8.3(d).
"RESERVE FUNDS" means, with respect to any Mortgage Loan, any cash
amounts or instruments convertible into cash delivered by the related Mortgagor
to be held in escrow by or on behalf of the Mortgagee representing reserves for
repairs, replacements, capital improvements, environmental testing and
remediation and/or similar type items with respect to the related Mortgaged
Property.
"RESIDUAL VALUE POLICY": A non-cancelable residual value insurance
policy that guarantees the Balloon Payment on a Balloon Loan, the form of which
has been approved by the Rating Agencies.
"RESIDUAL CERTIFICATES" means, with respect to REMIC I, the Class R-I
Certificates, with respect to REMIC II, the Class R-II Certificates and, with
respect to REMIC III, the Class R-III Certificates.
"RESPONSIBLE OFFICER" means, when used with respect to the initial
Trustee, any officer assigned to the Asset-Backed Securities Trust Services
Group of its Corporate Trust Department, and when used with respect to any
successor Trustee, any Vice President, Assistant Vice President, corporate
trust officer or any assistant corporate trust officer.
"REVISED INTEREST RATE" has the meaning set forth in the definition of
Excess Interest.
"RULE 144A" means Rule 144A under the Securities Act.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES LEGEND" means the legend to be printed on the Certificates
as set forth in Section 3.3(c).
"SELLER" means MSMC or Heller, as the case may be.
"SENIOR CERTIFICATES" means, collectively, the Class A and Class X
Certificates.
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"SERVICING ACCOUNT" means the account or accounts created and
maintained pursuant to Section 8.3(a).
"SERVICING ADVANCES" means all customary, reasonable and necessary
"out of pocket" costs and expenses (including attorneys' fees and expenses and
fees of real estate brokers) incurred by the Master Servicer, the Special
Servicer or, if applicable, the Trustee or the Fiscal Agent in connection with
the servicing and administering of (a) a Mortgage Loan in respect of which a
default, delinquency or other unanticipated event has occurred or as to which a
default is imminent or (b) an REO Property, including, but not limited to, the
cost of (i) compliance with the obligations of the Master Servicer and/or the
Special Servicer set forth in Section 8.3(c) and 8.7(c), (ii) the preservation,
restoration and protection of a Mortgaged Property or REO Property, (iii)
obtaining any Insurance Proceeds, Condemnation Proceeds or Liquidation Proceeds
in respect of any Mortgage Loan or REO Property, (iv) any enforcement or
proceedings with respect to a Mortgaged Property, including without limitation
foreclosures and similar proceedings, (v) the operation, management,
maintenance and liquidation of any REO Property and (vi) any other cost or
expense designated as a Servicing Advance in accordance with this Agreement;
provided that, notwithstanding anything to the contrary, "Servicing Advances"
shall not include allocable overhead of the Master Servicer or the Special
Servicer, such as costs for office space, office equipment, supplies and
related expenses, employee salaries and related expenses and similar internal
costs and expenses, or costs incurred by either such party in connection with
its purchase of any Mortgage Loan or REO Property pursuant to any provision of
this Agreement. All Emergency Advances made by the Special Servicer hereunder
shall be considered "Servicing Advances" for the purposes hereof.
"SERVICING FEES" means, with respect to each Mortgage Loan (including
without limitation each REO Mortgage Loan), the Master Servicing Fee and, if
applicable, the Special Servicing Fee.
"SERVICING FILE" means, collectively as to any Mortgage Loan, any
documents, other than documents required to be part of the related Mortgage
File, in the possession of the Master Servicer or Special Servicer and relating
to the origination and servicing of such Mortgage Loan, including without
limitation a closing binder for such Mortgage Loan and, in each case if and to
the extent available, any appraisal, environmental report, engineering report,
operating statements, rent rolls and copies of major leases.
"SERVICING OFFICER" means any officer or employee of the Master
Servicer involved in, or responsible for, the administration and servicing of
the Mortgage Loans whose name and specimen signature appear on a list of
servicing officers or employees furnished to the Trustee by the Master Servicer
and signed by an officer of the Master Servicer, as such list may from time to
time be amended.
"SERVICING STANDARD" has the meaning set forth in Section 8.1(a).
"SERVICING TRANSFER EVENT" means, with respect to any Mortgage Loan,
the occurrence of any of the events described in clauses (a) through (h) of the
definition of "Specially Serviced Mortgage Loan".
"SPECIAL SERVICER" means GMAC Commercial Mortgage Corporation or any
successor Special Servicer as herein provided.
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"SPECIAL SERVICING FEE" means, with respect to each Specially Serviced
Mortgage Loan and REO Mortgage Loan, the fee designated as such and payable to
the Special Servicer pursuant to Section 8.10(b).
"SPECIAL SERVICING FEE RATE" means, with respect to each Specially
Serviced Mortgage Loan and REO Mortgage Loan, 0.25% per annum.
"SPECIAL SERVICING OFFICER" means any officer or employee of the
Special Servicer involved in, or responsible for, the administration and
servicing of the Specially Serviced Mortgage Loans whose name and specimen
signature appear on a list of servicing officers or employees furnished to the
Trustee and the Master Servicer by the Special Servicer signed by an officer of
the Special Servicer, as such list may from time to time be amended.
"SPECIALLY SERVICED ASSET REPORT" means the report prepared by the
Special Servicer substantially with the information set forth in Exhibit G-2
attached hereto.
"SPECIALLY SERVICED MORTGAGE LOAN" means any Mortgage Loan as to which
any of the following events has occurred:
(a) the related Mortgagor has failed to make when due any Balloon
Payment, which failure has continued unremedied for 30 days; or
(b) the related Mortgagor has failed to make when due any Monthly
Payment (other than a Balloon Payment) or any other payment required under the
related Mortgage Note or the related Mortgage, which failure continues
unremedied for 60 days; or
(c) the Master Servicer has determined, in its good faith and
reasonable judgment, that a default in the making of a Monthly Payment or any
other payment required under the related Mortgage Note or the related Mortgage
is likely to occur within 30 days and is likely to remain unremedied for at
least 60 days or, in the case of a Balloon Payment, for at least 30 days; or
(d) there shall have occurred a default under the related loan
documents, other than as described in clause (a) or (b) above, that (in the
Master Servicer's good faith and reasonable judgment) materially impairs the
value of the related Mortgaged Property as security for the Mortgage Loan or
otherwise materially and adversely affects the interests of Certificateholders,
which default has continued unremedied for the applicable grace period under
the terms of the Mortgage Loan (or, if no grace period is specified, 60 days);
or
(e) a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises in an involuntary case under any present or
future federal or state bankruptcy, insolvency or similar law or the
appointment of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall have
been entered against the related Mortgagor and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 days; or
(f) the related Mortgagor shall have consented to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
such Mortgagor or of relating to all or substantially all of its property; or
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(g) the related Mortgagor shall have admitted in writing its inability
to pay its debts generally as they become due, filed a petition to take
advantage of any applicable insolvency or reorganization statute, made an
assignment for the benefit of its creditors, or voluntarily suspended payment
of its obligations; or
(h) the Master Servicer shall have received notice of the commencement
of foreclosure or similar proceedings with respect to the related Mortgaged
Property;
provided that a Mortgage Loan will cease to be a Specially Serviced Mortgage
Loan when a Liquidation Event has occurred in respect of such Mortgage Loan, or
at such time as such of the following as are applicable occur with respect to
the circumstances identified above that caused the Mortgage Loan to be
characterized as a Specially Serviced Mortgage Loan (and provided that no other
Servicing Transfer Event then exists):
(w) with respect to the circumstances described in clauses (a) and
(b) above, the related Mortgagor has made three consecutive
full and timely Monthly Payments under the terms of such
Mortgage Loan (as such terms may be changed or modified in
connection with a bankruptcy or similar proceeding involving
the related Mortgagor or by reason of a modification, waiver or
amendment granted or agreed to by the Special Servicer pursuant
to Section 8.18);
(x) with respect to the circumstances described in clauses (c),
(e), (f) and (g) above, such circumstances cease to exist in
the good faith and reasonable judgment of the Special Servicer;
(y) with respect to the circumstances described in clause (d)
above, such default is cured; and
(z) with respect to the circumstances described in clause (h)
above, such proceedings are terminated.
"STARTUP DAY" means, with respect to each of REMIC I, REMIC II and
REMIC III, the day designated as such in Section 12.1 (b).
"STATED MATURITY DATE" means, with respect to any Mortgage Loan, the
Due Date on which the last payment of principal is due and payable under the
terms of the related Mortgage Note as in effect on the Closing Date, without
regard to any change in or modification of such terms in connection with a
bankruptcy or similar proceeding involving the related Mortgagor or a
modification, waiver or amendment of such Mortgage Loan granted or agreed to by
the Master Servicer or Special Servicer pursuant to Section 8.18.
"STATED PRINCIPAL BALANCE" means, as of any date of determination,
with respect to any Mortgage Loan (including without limitation any REO
Mortgage Loan), an amount equal to (a) the unpaid principal balance of such
Mortgage Loan as of the Cut-off Date (or, in the case of a Replacement Mortgage
Loan, as of the related date of substitution), after application of all
payments due on or before such date, whether or not received, reduced on a
cumulative basis on each subsequent Distribution Date (to not less than zero)
by (b) the sum of (i) all payments (or P&I Advances in lieu thereof) of, and
all other collections allocated as provided in Section 1.2 to, principal of or
with respect to such Mortgage Loan that are (or, if they had not been applied
to cover any Additional Trust Expense, would have been) distributed to
Certificateholders on such Distribution Date, and (ii) the principal portion of
any Realized
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Loss incurred in respect of such Mortgage Loan during the related Collection
Period, provided that, notwithstanding the foregoing, if a Liquidation Event
occurs in respect of such Mortgage Loan (or any related REO Property), then the
"Stated Principal Balance" of such Mortgage Loan shall be zero commencing as of
the Distribution Date in the Collection Period next following the Collection
Period in which such Liquidation Event occurred.
"SUBORDINATE CERTIFICATES" means, collectively, the Class B, Class C,
Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class M
and Class N Certificates.
"SUB-SERVICER" means any Person with which the Master Servicer or the
Special Servicer has entered into a Sub-Servicing Agreement.
"SUB-SERVICING AGREEMENT" means the written contract between the
Master Servicer or the Special Servicer and any Sub-Servicer relating to
servicing and administration of Mortgage Loans as provided in Section 8.4.
"SUBSTITUTION SHORTFALL AMOUNT" means, in connection with the
substitution of one or more Replacement Mortgage Loans for one or more Deleted
Mortgage Loans, the amount, if any, by which the Purchase Price or aggregate
Purchase Price, as the case may be, for such Deleted Mortgage Loan(s) exceeds
the initial Stated Principal Balance or aggregate Stated Principal Balance, as
the case may be, of such Replacement Mortgage Loan(s).
"TAX MATTERS PERSON" means the person designated as the "tax matters
person" of any REMIC Pool pursuant to Treasury Regulation Section 1.860F-4(d)
and temporary Treasury Regulations Section 301.6231(a)(7)-1T (or relevant
successor provision), which initially shall be the person having the largest
Percentage Interest in the Residual Certificates of the related REMIC Pool.
"TAX RETURNS" means the federal income tax return on Internal Revenue
Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax
Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of each of REMIC I, REMIC II and REMIC III due to its
classification as a REMIC under the REMIC Provisions pursuant to its election
filed in accordance with Section 5.5 hereof, the federal income tax information
return on Internal Revenue Service Form 1041 U.S. Income Tax Return for Estate
and Trusts, to be filed on behalf of the grantor trust, and any and all other
information, reports or returns that may be required to be furnished to the
Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal or
state law.
"TERMINATION PRICE" shall have the meaning set forth in Section
10.1(b) herein.
"TRANSFER" means any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment of any Ownership Interest in a
Certificate.
"TRANSFEREE" means any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.
"TRUST" means the trust created pursuant to this Agreement, the assets
which consist of all the assets of REMIC I, REMIC II and REMIC III.
"TRUST FUND" means, collectively, all of the assets of the Trust.
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"TRUSTEE" means LaSalle National Bank, as Trustee, or its
successor-in-interest, or if any successor trustee or any co-trustee shall be
appointed as herein provided, then Trustee shall also mean such successor
trustee (subject to Section 7.7 hereof) and such co-trustee (subject to Section
7.9 hereof), as the case may be.
"TRUSTEE FEE" means, with respect to each Mortgage Loan (including
without limitation each REO Mortgage Loan), the fee designated as such and
payable to the Trustee pursuant to Section 7.12.
"TRUSTEE FEE RATE" means .0031% per annum.
"UCC FINANCING STATEMENT" means a financing statement executed and
filed pursuant to the Uniform Commercial Code, as in effect in the relevant
jurisdiction, or, in the case of Louisiana, the comparable provisions of
Louisiana law.
"UNCERTIFICATED ACCRUED INTEREST" shall mean, with respect to any
class of uncertificated REMIC I Regular Interests or REMIC II Regular Interests
for any Distribution Date, the product of the Uncertificated Principal Balance
of such class as of the close of the preceding Distribution Date (or, in the
case of the first Distribution Date, as of the Closing Date) and one-twelfth of
the applicable REMIC I Remittance Rate or REMIC II Remittance Rate. The
Uncertificated Accrued Interest in respect of each class of REMIC I Regular
Interests and REMIC II Regular Interest shall accrue on the basis of a 360-day
year consisting of twelve 30-day months.
"UNCERTIFICATED DISTRIBUTABLE INTEREST" means, with respect to any
REMIC I Regular Interest or REMIC II Regular Interest for any Distribution
Date, an amount equal to: (a) the Uncertificated Accrued Interest in respect of
such REMIC I Regular Interest or REMIC II Regular Interest, as the case may be,
for such Distribution Date; reduced (to not less than zero) by (b) the portion
of any Net Aggregate Prepayment Interest Shortfall for such Distribution Date
allocated to such REMIC I Regular Interest or REMIC II Regular Interest, as the
case may be, as set forth below; and increased by (c) any Uncertificated
Distributable Interest in respect of such REMIC I Regular Interest or REMIC II
Regular Interest, as the case may be, for the immediately preceding
Distribution Date that was not deemed paid on the immediately preceding
Distribution Date pursuant to Section 6.2 or 6.3, as applicable, together with
one month's interest (calculated on the basis of a 360-day year consisting of
twelve 30-day months) on such unpaid Uncertificated Distributable Interest at
the REMIC I Remittance Rate or the REMIC II Remittance Rate, as the case may
be, applicable to such REMIC I Regular Interest or REMIC II Regular Interest,
as the case may be, for the current Distribution Date. The Net Aggregate
Prepayment Interest Shortfall for any Distribution Date shall be allocated: (i)
among the respective REMIC I Regular Interests, pro rata in accordance with the
respective amounts of Uncertificated Accrued Interest with respect thereto for
such Distribution Date; and (ii) among the respective REMIC II Regular
Interests, pro rata in accordance with the respective amounts of Uncertificated
Accrued Interest with respect thereto for such Distribution Date.
"UNCERTIFICATED PRINCIPAL BALANCE" means the principal amount of any
REMIC I Regular Interest or REMIC II Regular Interest outstanding as of any
date of determination. As of the Closing Date, the Uncertificated Principal
Balance of each REMIC I Regular Interest shall equal the Cut-off Date Principal
Balance of the related Mortgage Loan. On each Distribution Date, the
Uncertificated Principal Balance of each REMIC I Regular Interest shall be
reduced by all distributions of principal deemed to have been made thereon on
such Distribution Date pursuant to Section 6.2 and, if and to the extent
appropriate, shall be further reduced on such Distribution Date as provided in
Section 6.5. As of the Closing Date, the Uncertificated Principal Balance of
each REMIC II Regular Interest shall equal the
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amount set forth in the Preliminary Statement hereto as its initial
Uncertificated Principal Balance. On each Distribution Date, the Uncertificated
Principal Balance of each REMIC II Regular Interest shall be reduced by all
distributions of principal deemed to have been made thereon on such
Distribution Date pursuant to Section 6.3 and, if and to the extent
appropriate, shall be further reduced on such Distribution Date as provided in
Section 6.5.
"UNDERWRITABLE CASH FLOW" means, with respect to any Mortgaged
Property or REO Property, for any twelve month period (or such shorter period
calculated on an annualized basis), the underwritable cash flow amount
calculated in accordance with Exhibit H hereto.
"UNDERWRITERS" means Morgan Stanley & Co. Incorporated or its
successor in interest, Bear, Stearns & Co. Inc. or its successor in interest
and Prudential Securities Incorporated or its successor in interest.
"UNINSURED CAUSE" means any cause of damage to property subject to a
Mortgage such that the complete restoration of such property is not fully
reimbursable by the hazard insurance policies or flood insurance policies
required to be maintained pursuant to Section 8.5.
"UNITED STATES PERSON" means 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 from sources without the United States is includable in
gross income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States or
a trust subject to the control of a United States person and the primary
supervision of a United States court.
"UNLEGENDED DEFINITIVE CERTIFICATE" means a Definitive Certificate
that does not bear the Securities Legend.
"USPAP" means the Uniform Standards of Professional Appraisal
Practices.
"VOTING RIGHTS" means the voting rights to which the
Certificateholders are entitled hereunder. At all times during the term of this
Agreement, 97% of the Voting Rights shall be allocated among the Holders of the
various outstanding Classes of Principal Balance Certificates in proportion to
the respective Class Principal Balances of their Certificates, 2% of the Voting
Rights shall be allocated to the Holders of the Interest Only Certificates, and
the remaining Voting Rights shall be allocated equally among the Holders of the
respective Classes of the Residual Certificates. Voting Rights allocated to a
Class of Certificateholders shall be allocated among such Certificateholders in
proportion to the Percentage Interests evidenced by their respective
Certificates.
"WATCH LIST": A report substantially containing the content described
in Exhibit H-6 attached hereto, prepared in accordance with Section 8.14(j).
"WEIGHTED AVERAGE REMIC I REMITTANCE RATE" means, with respect to each
Distribution Date, the weighted average of the REMIC I Remittance Rates for the
REMIC I Regular Interests, weighted on the basis of the Uncertificated
Principal Balances of the REMIC I Regular Interest related to each Mortgage
Loan at the beginning of the related Collection Period (disregarding any REMIC
I Regular Interest with respect to which a Principal Prepayment in full was
received during the Collection Period on the Mortgage Loan to which such REMIC
I Regular Interest relates).
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"WORKOUT FEE" means, with respect to each Corrected Mortgage Loan, the
fee designated as such and payable to the Special Servicer pursuant to Section
8.10(b).
"WORKOUT FEE RATE" means, with respect to each Corrected Mortgage Loan
as to which a Workout Fee is payable, 1.0% per annum.
SECTION 1.2. CERTAIN CALCULATIONS IN RESPECT OF THE MORTGAGE POOL.
(a) All amounts collected in respect of any group of related
Cross-Collateralized Mortgage Loans (other than REO Mortgage Loans) in the form
of payments from Mortgagors, Insurance Proceeds, Condemnation Proceeds and
Liquidation Proceeds, shall be applied by the Master Servicer among such
Mortgage Loans in accordance with the express provisions of the related loan
documents and, in the absence of such express provisions, on a pro rata basis
in accordance with the respective amounts then "due and owing" as to each such
Mortgage Loan. All amounts collected in respect of any Mortgage Loan (whether
or not such Mortgage Loan is a Cross-Collateralized Mortgage Loan) other than
an REO Mortgage Loan, in the form of payments from Mortgagors, Condemnation
Proceeds, Insurance Proceeds, Liquidation Proceeds, Repurchase Proceeds or
payments of Substitution Shortfall Amounts shall be applied to amounts due and
owing under the related Mortgage Note and Mortgage (including, without
limitation, for principal and accrued and unpaid interest) in accordance with
the express provisions of the related Mortgage Note and Mortgage and, in the
absence of, or to the extent not covered by, such express provisions, shall be
applied for purposes of this Agreement: first, as a recovery of any related
unreimbursed Servicing Advances and, if applicable, unpaid Liquidation
Expenses; second, as a recovery of accrued and unpaid interest at the related
Mortgage Rate on such Mortgage Loan to but not including, as appropriate, the
date of receipt or, in the case of a full Monthly Payment from any Mortgagor,
the related Due Date, third, as a recovery of principal of such Mortgage Loan
then due and owing, including, without limitation, by reason of acceleration of
the Mortgage Loan following a default thereunder (or, if a Liquidation Event
has occurred in respect of such Mortgage Loan, as a recovery of principal to
the extent of its entire remaining unpaid principal balance); fourth, as a
recovery of amounts to be currently applied to the payment of, or escrowed for
the future payment of, real estate taxes, assessments, insurance premiums,
ground rents (if applicable) and similar items; fifth, as a recovery of Reserve
Funds to the extent then required to be held in escrow; sixth, as a recovery of
any Prepayment Premium then due and owing under such Mortgage Loan; seventh, as
a recovery of any Penalty Charges then due and owing under such Mortgage Loan;
eighth, as a recovery of any assumption fees and modification fees then due and
owing under such Mortgage Loan; ninth, as a recovery of any other amounts then
due and owing under such Mortgage Loan; and tenth, as a recovery of any
remaining principal of such Mortgage Loan to the extent of its entire remaining
unpaid principal balance.
(b) Collections in respect of each REO Property (exclusive of amounts
to be applied to the payment of the costs of operating, managing, maintaining
and disposing of such REO Property) shall be treated: first, as a recovery of
any related unreimbursed Servicing Advances; second, as a recovery of accrued
and unpaid interest on the related REO Mortgage Loan at the related Mortgage
Rate to but not including the Due Date in the Collection Period of receipt;
third, as a recovery of principal of the related REO Mortgage Loan to the
extent of its entire unpaid principal balance; and fourth, as a recovery of any
other amounts deemed to be due and owing in respect of the related REO Mortgage
Loan.
(c) The foregoing applications of amounts received in respect of any
Mortgage Loan or REO Property shall be determined by the Master Servicer.
SECTION 1.3. INTERPRETATION.
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(a) As used herein and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in Section
1.1 shall have the respective meanings given to them under United States
generally accepted accounting principles or regulatory accounting principles,
as applicable.
(b) The words "hereof", "herein" and "hereunder", and words of similar
import when used in this Agreement, shall refer to this agreement as a whole
and not to any particular provision of this Agreement, and references to
Sections, Schedules and Exhibits contained in this Agreement are references to
Sections, Schedules and Exhibits in or to this Agreement unless otherwise
specified.
(c) Whenever a term is defined herein, the definition ascribed to such
term shall be equally applicable to both the singular and plural forms of such
term and to masculine, feminine and neuter genders of such term.
(d) This Agreement is the result of arm's-length negotiations between
the parties and has been reviewed by each party hereto and its counsel. Each
party agrees that any ambiguity in this Agreement shall not be interpreted
against the party drafting the particular clause which is in question.
ARTICLE II.
DECLARATION OF TRUST;
ISSUANCES OF CERTIFICATES
SECTION 2.1. CONVEYANCE OF MORTGAGE LOANS.
(a) The Depositor, concurrently with the execution and delivery
hereof, does hereby assign to the Trustee without recourse for the benefit of
the Certificateholders all the right, title and interest of the Depositor,
including any security interest therein for the benefit of the Depositor, in,
to and under (i) the Mortgage Loans identified on the Mortgage Loan Schedule,
(ii) Sections 2, 3, 6, 7 and 9 of each Mortgage Loan Purchase Agreement and
(iii) all other assets included or to be included in REMIC I (as described in
Section 12.1(a) hereof and the definition of REMIC I) or in the grantor trust
(as described in Section 12.1(a) hereof). Such assignment includes all interest
and principal received or receivable on or with respect to the Mortgage Loans
(other than payments of principal and interest due and payable on the Mortgage
Loans on or before the Cut-off Date). The transfer of the Mortgage Loans and
the related rights and property accomplished hereby is absolute and,
notwithstanding Section 13.12, is intended by the parties to constitute a sale.
(b) In connection with the Depositor's assignment pursuant to Section
2.1(a) above, the Depositor shall direct, and hereby represents and warrants
that it has directed, each Seller pursuant to the applicable Mortgage Loan
Purchase Agreement to deliver to and deposit with, or cause to be delivered to
and deposited with, the Trustee or a Custodian appointed thereby (with a copy
to the Master Servicer), on or before the Closing Date, the Mortgage File for
each Mortgage Loan so assigned. If a Seller cannot so deliver, or cause to be
delivered, as to any of its Mortgage Loans, the original or a copy of any of
the documents and/or instruments referred to in clauses (ii), (iv), (viii),
(xi)(A) and (xii) of the definition of "Mortgage File", with (if appropriate)
evidence of recording or filing, as the case may be, thereon, solely because of
a delay caused by the public recording or filing office where such document or
instrument has been delivered for recordation or filing, the delivery
requirements of this Section 2.1(b) shall be deemed to have been satisfied as
to such missing item, and such missing item shall be deemed to have been
included in the related Mortgage File, provided that such Seller has delivered
to the Trustee on or before the Closing Date a copy of such document or
instrument (without evidence of recording or
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filing thereon, but certified (which certificate may relate to multiple
documents and/or instruments) by such Seller to be a true and complete copy of
the original thereof submitted for recording or filing, as the case may be),
and the Seller shall deliver to or at the direction of the Trustee, promptly
following the receipt thereof, the original of such missing document or
instrument (or a copy thereof) with (if appropriate) evidence of recording or
filing, as the case may be, thereon. If a Seller cannot so deliver, or cause to
be delivered, as to any of its Mortgage Loans, the original or a copy of the
related lender's title insurance policy referred to in clause (ix) of the
definition of "Mortgage File" solely because such policy has not yet been
issued, the delivery requirements of this Section 2.1(b) shall be deemed to be
satisfied as to such missing item, and such missing item shall be deemed to
have been included in the related Mortgage File, provided that such Seller has
delivered to the Trustee on or before the Closing Date a commitment for title
insurance "marked-up" at the closing of such Mortgage Loan, and such Seller
shall deliver to or at the direction of the Trustee, promptly following the
receipt thereof, the original related lender's title insurance policy (or a
copy thereof). In addition, notwithstanding anything to the contrary contained
herein, if there exists with respect to any group of related
Cross-Collateralized Mortgage Loans only one original of any document referred
to in the definition of "Mortgage File" covering all the Mortgage Loans in such
group, then the inclusion of the original of such document in the Mortgage File
for any of the Mortgage Loans in such group shall be deemed an inclusion of
such original in the Mortgage File for each such Mortgage Loan. None of the
Trustee, any Custodian, the Master Servicer or the Special Servicer shall be
liable for any failure by any Seller or the Depositor to comply with the
document delivery requirements of the Mortgage Loan Purchase Agreements and
this Section 2.1(b).
Notwithstanding the foregoing, the failure to deliver the originals or
copies of any of the documents or instruments referred to in clauses (ii),
(iv), (viii), (ix), (xi)(A), (xii) and (ix) of the definition of "Mortgage
File" by the date 120 days after the Closing Date shall constitute a Material
Defect in respect of the related Mortgage Loan under Section 2.3 hereof.
If any of the endorsements referred to in clause (i) of the definition
of "Mortgage File", or any of the assignments referred to in clauses (iii),
(v), (vii), (x)(B) and (xi)(B) of the definition of "Mortgage File", are
delivered to the Trustee in blank, the Trustee shall be responsible for
completing the related endorsement or assignment in the name of the Trustee (in
such capacity).
(c) The Trustee shall, as to each Mortgage Loan, at the expense of the
related Seller, promptly (and in any event within 45 days following the receipt
thereof) record or file, as the case may be, in the appropriate public office
for real property records or UCC Financing Statements, as appropriate, each
assignment to the Trustee referred to in clauses (iii), (v), (vii), (x)(B) and
(xi)(B) of the definition of "Mortgage File". Each such assignment shall
reflect that it should be returned by the public recording office to the
Trustee following recording or filing (at which time it shall deliver a copy
thereof to the Master Servicer); provided that in those instances where the
public recording office retains the original assignment of Mortgage, assignment
of Assignment of Leases, or assignment of security agreement the Trustee shall
request the Seller to obtain therefrom for the Trustee at the expense of the
related Seller a certified copy of the recorded original. If any such document
or instrument is lost or returned unrecorded or unfiled, as the case may be,
because of a defect therein, the Trustee shall direct the Seller promptly to
prepare and file or record or cause to be prepared and filed or recorded, a
substitute therefor or cure such defect, as the case may be, at the expense of
the related Seller.
(d) All documents and records in the possession of the Depositor or
the Sellers that relate to the Mortgage Loans and that are not required to be a
part of a Mortgage File in accordance with the definition thereof shall be
delivered to the Master Servicer on or before the Closing Date and shall be
held by the Master Servicer on behalf of the Trustee in trust for the benefit
of the Certificateholders.
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(e) In connection with the Depositor's assignment pursuant to Section
2.1(a) above, the Depositor shall deliver to the Trustee and the Master
Servicer on or before the Closing Date a copy of a fully executed counterpart
of each Mortgage Loan Purchase Agreement, as in full force and effect on the
Closing Date.
SECTION 2.2. ACCEPTANCE BY TRUSTEE. The Trustee will hold (i) the
documents constituting a part of the Mortgage Files delivered to it, (ii) the
other REMIC I assets, (iii) the REMIC II assets and (iv) the REMIC III assets,
in each case, in trust for the use and benefit of all present and future
Certificateholders, and will hold the grantor trust assets for the use and
benefit of present and future Class N Certificateholders.
Upon execution and delivery of this Agreement in respect of the
Initial Certification, and within 75 days after the execution and delivery of
this Agreement in respect of the Final Certification, the Trustee shall examine
the Mortgage Files in its possession, and shall deliver to the Depositor, the
Master Servicer, the Special Servicer and each Seller a certification (the
"INITIAL CERTIFICATION" and the "FINAL CERTIFICATION", respectively, in the
respective forms set forth as Exhibit B-1 and Exhibit B-2 hereto) stating, (i)
in the case of the Initial Certification, as to each Mortgage Loan listed in
the Mortgage Loan Schedule, except as may be specified in the schedule of
exceptions to Mortgage File delivery attached thereto, that (A) all documents
specified in clause (i) of the definition of "Mortgage File" are in its
possession, (B) such documents have been reviewed by it and have not been
materially mutilated, damaged, defaced, torn or otherwise physically altered,
and such documents relate to such Mortgage Loan, (C) based on its examination
and only as to the foregoing documents, the loan number and the name of the
Mortgagor set forth in the Mortgage Loan Schedule respecting such Mortgage Loan
accurately reflects the information contained in such documents, and (D) each
Mortgage Note has been endorsed as provided in clause (i) of the definition of
"Mortgage File"; and (ii) in the case of the Final Certification, as to each
Mortgage Loan listed in the Mortgage Loan Schedule, except as may be certified
in the schedule of exceptions to Mortgage File delivery attached thereto, that
(W) all documents specified in clauses (i), (ii), (iii), (ix), (xii) (to the
extent it relates to the foregoing) and (xiii) are in its possession, (X) all
documents delivered to it or a Custodian as part of the related Mortgage File
have been reviewed by it or such Custodian and have not been materially
mutilated, damaged, defaced, torn or otherwise physically altered, and such
documents relate to such Mortgage Loan, (Y) based on its examination and only
as to the foregoing documents, the loan number, the street address of the
Mortgaged Property and the name of the Mortgagor set forth in the Mortgage Loan
Schedule respecting such Mortgage Loan accurately reflects the information
contained in the documents in the Mortgage File and (Z) each Mortgage Note has
been endorsed and each Mortgage has been assigned as provided in clauses (i)
and (iii), respectively, of the definition of "Mortgage File." The Trustee
shall deliver to the Master Servicer, the Special Servicer, each Seller (as to
its respective Mortgage Loans only), the Operating Adviser and the Majority
Certificateholder of the Controlling Class, a copy of such Final Certification.
Within 180 days after the Cut-off Date, the Trustee shall provide a
confirmation to the Master Servicer, the Special Servicer and each Seller of
receipt or non-receipt of recorded Assignments of Mortgage. In giving the
certifications required above, the Trustee shall be under no obligation or duty
to inspect, review or examine any such documents, instruments, securities or
other papers to determine whether they or the signatures thereon are valid,
legal, genuine, enforceable, in recordable form or appropriate for their
represented purposes, or that they are other than what they purport to be on
their face, or to determine whether any Mortgage File should include any
assumption agreement, modification agreement, consolidation agreement,
extension agreement, Assignment of Lease, ground lease, UCC Financing
Statement, guaranty, written assurance or substitution agreement.
The Trustee or its authorized agents shall retain possession and
custody of each Mortgage File in accordance with and subject to the terms and
conditions set forth herein.
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SECTION 2.3. SELLERS' REPURCHASE OF MORTGAGE LOANS FOR DOCUMENT
DEFECTS AND BREACHES OF REPRESENTATIONS AND WARRANTIES.
(a) If any party hereto discovers that any document constituting a
part of a Mortgage File has a Material Defect, or discovers or receives notice
of a breach of any representation, warranty or covenant relating to any
Mortgage Loan set forth in the related Mortgage Loan Purchase Agreement, as the
case may be, that may give rise to a repurchase obligation on the part of the
related Seller (a "BREACH"), such party shall give prompt written notice to the
other parties hereto. Promptly upon becoming aware of any such Material Defect
or Breach, the Trustee shall request that the related Seller within the time
period provided for in the related Mortgage Loan Purchase Agreement cure such
Material Defect or Breach, as the case may be, in all material respects or
repurchase the affected Mortgage Loan for a cash amount equal to the applicable
Purchase Price, all in accordance with the related Mortgage Loan Purchase
Agreement; provided, however, that, in lieu of effecting any such repurchase, a
Seller will be permitted to deliver a Qualifying Substitute Mortgage Loan and
to pay a cash amount equal to the applicable Substitution Shortfall Amount,
subject to the terms and conditions of the related Mortgage Loan Purchase
Agreement and this Agreement.
A document in the Mortgage File shall be deemed to have a "MATERIAL
DEFECT" if (a) any document required to be included in the Mortgage File is not
in the Trustee's possession within the time required to be delivered, (b) such
document has been mutilated, damaged, defaced, torn or otherwise physically
altered in any material respect at the time of its delivery to the Trustee, (c)
the information set forth in the Mortgage Loan Schedule respecting such
Mortgage Loan differs from the information contained in the documents in the
Mortgage File in a material and adverse manner, or (d) a Mortgage Note has not
been endorsed or a Mortgage has not been assigned, or an assignment of Mortgage
has not been delivered as provided in Section 2.1 hereof.
As to any Qualifying Substitute Mortgage Loan, the Trustee
shall direct the related Seller to deliver to the Trustee for such Qualifying
Substitute Mortgage Loan (with a copy to the Master Servicer), the related
Mortgage File with the related Mortgage Note endorsed as required by clause (i)
of the definition of "Mortgage File." No substitution may be made in any
calendar month after the Determination Date for such month. Monthly Payments
due with respect to Qualifying Substitute Mortgage Loans after the related date
of substitution, and Monthly Payments due with respect to Deleted Mortgage
Loans after the Cut-off Date and on or prior to the related date of
substitution, shall be part of the Trust Fund. Monthly Payments due with
respect to Qualifying Substitute Mortgage Loans on or prior to the related date
of substitution, and Monthly Payments due with respect to Deleted Mortgage
Loans after the related date of substitution, shall not be part of the Trust
Fund and will be remitted by the Master Servicer to the related Seller promptly
following receipt.
In any month in which a Seller substitutes one or more Qualifying
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer will determine the applicable Substitution Shortfall Amount. The
Trustee shall direct such Seller, to deposit cash equal to such amount into the
Collection Account concurrently with the delivery of the Mortgage File for the
Qualifying Substitute Mortgage Loan, without any reimbursement thereof. The
Seller shall give written notice to the Trustee and the Master Servicer of such
deposit promptly following the occurrence thereof.
If the affected Mortgage Loan is to be repurchased, the Trustee shall
designate the Collection Account as the account to which funds in the amount of
the Purchase Price are to be wired. Any such purchase of a Mortgage Loan shall
be on a whole loan, servicing released basis.
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The Trustee shall direct the related Seller to amend the Mortgage Loan
Schedule to reflect the removal of each Deleted Mortgage Loan and, if
applicable the substitution of the Qualifying Substitute Mortgage Loan; and,
upon such amendment, the Trustee shall deliver or cause the delivery of such
amended Mortgage Loan Schedule to the other parties hereto. Upon any such
substitution, the Qualifying Substitute Mortgage Loan shall be subject to the
terms of this Agreement in all respects.
(b) In connection with any repurchase of or substitution for a
Mortgage Loan contemplated by this Section 2.3, the Trustee, the Master
Servicer and the Special Servicer shall each promptly tender to the related
Seller, upon delivery to each of them of a receipt executed by such Seller, all
portions of the Mortgage File and other documents pertaining to such Mortgage
Loan possessed by it, and each document that constitutes a part of the Mortgage
File shall be endorsed or assigned to the extent necessary or appropriate to
the related Seller, or its designee in the same manner, and pursuant to
appropriate forms of assignment, substantially similar to the manner and forms
pursuant to which documents were previously assigned to the Trustee, but in any
event, without recourse, representation or warranty; provided that such tender
by the Trustee shall be conditioned upon its receipt from the Master Servicer
of a Request for Release.
(c) The Mortgage Loan Purchase Agreements provide the sole remedies
available to the Certificateholders, or the Trustee on behalf of the
Certificateholders, respecting any Material Defect or Breach.
SECTION 2.4. REPRESENTATIONS AND WARRANTIES. The Depositor hereby
represents and warrants to the Master Servicer, the Special Servicer, the
Fiscal Agent and the Trustee as of the Closing Date that:
(i) The Depositor is a corporation duly organized, validly
existing and in good standing under the laws governing its creation
and existence and has full corporate power and authority to own its
property, to carry on its business as presently conducted, to enter
into and perform its obligations under this Agreement, and to create
the trust pursuant hereto;
(ii) The execution and delivery by the Depositor of this
Agreement have been duly authorized by all necessary corporate action
on the part of the Depositor; neither the execution and delivery of
this Agreement, nor the consummation of the transactions herein
contemplated, nor compliance with the provisions hereof, will conflict
with or result in a breach of, or constitute a default under, (A) any
of the provisions of any law, governmental rule, regulation, judgment,
decree or order binding on the Depositor or its properties; (B) the
certificate of incorporation or bylaws of the Depositor; or (C) the
terms of any indenture or other agreement or instrument to which the
Depositor is a party or by which it is bound; neither the Depositor
nor any of its Affiliates is a party to, bound by, or in breach of 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, which materially and adversely affects or
to the best knowledge of the Depositor may in the future materially
and adversely affect (X) the ability of the Depositor to perform its
obligations under this Agreement or (Y) the business, operations,
financial condition, properties or assets of the Depositor;
(iii) The execution, delivery and performance by the Depositor of
this Agreement and the consummation of the transactions contemplated
hereby do not require the consent or approval of, the giving of notice
to, the registration with, or the taking of any other
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action in respect of, any state, federal or other governmental
authority or agency, except such as has been obtained, given, effected
or taken prior to the Closing Date;
(iv) This Agreement has been duly executed and delivered by the
Depositor and, assuming due authorization, execution and delivery by
the other parties hereto, constitutes a valid and binding obligation
of the Depositor enforceable against it in accordance with its terms;
(v) There are no actions, suits or proceedings pending or, to the
best of the Depositor's knowledge, threatened or likely to be asserted
against or affecting the Depositor, before or by any court,
administrative agency, arbitrator or governmental body (A) with
respect to any of the transactions contemplated by this Agreement or
(B) with respect to any other matter that in the judgment of the
Depositor will be determined adversely to the Depositor and will, if
determined adversely to the Depositor, materially and adversely affect
it or its business, assets, operations or condition, financial or
otherwise, or adversely affect its ability to perform its obligations
under this Agreement; and
(vi) Immediately prior to the consummation of the transactions
contemplated in this Agreement, the Depositor had good title to and
was the sole owner of each Mortgage Loan free and clear of any and all
adverse claims, charges or security interests.
SECTION 2.5. CONVEYANCE OF INTERESTS. Concurrently with the execution
and delivery of this Agreement, the Depositor does hereby transfer, assign, set
over, deposit with and otherwise convey to the Trustee, without recourse, in
trust, all the right, title and interest of the Depositor in and to (i) the
REMIC I Regular Interests in exchange for the REMIC II Interests, (ii) the
REMIC II Regular Interests in exchange for the REMIC III Certificates, and
(iii) the assets of the grantor trust in exchange for the 100% beneficial
ownership interest therein represented by the Class N Certificates.
ARTICLE III.
THE CERTIFICATES
SECTION 3.1. THE CERTIFICATES.
(a) The Certificates shall be in substantially the forms set forth in
Exhibits A-1 through A-16 hereto, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Agreement or as may in the reasonable judgment of the Trustee or the Depositor
be necessary, appropriate or convenient to comply, or facilitate compliance,
with applicable laws, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange on which any of
the Certificates may be listed, or as may, consistently herewith, be determined
by the officers executing such Certificates, as evidenced by their execution
thereof.
The Definitive Certificates shall be printed, typewritten,
lithographed or engraved or produced by any combination of these methods or may
be produced in any other manner permitted by the rules of any securities
exchange on which any of the Certificates may be listed, all as determined by
the officers executing such Certificates, as evidenced by their execution
thereof.
(b) The Certificates will be issued in minimum denominations of (i)
$25,000 initial Certificate Principal Balance, in the case of the Class A-1 and
Class A-2 Certificates, (ii) $50,000 initial Certificate Principal Balance, in
the case of the Class B Certificates, and (iii) $100,000 initial Certificate
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Principal Balance or Certificate Notional Amount, as applicable, in the case of
the remaining Classes of Certificates, and in each case in integral multiples
of $1 in excess thereof. The Residual Certificates will be issued in minimum
Percentage Interests of not less than 10%.
(c) Each Certificate shall, on original issue, be authenticated by the
Trustee or the Authenticating Agent upon the order of the Depositor. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certification of
authentication substantially in the form provided for herein, executed by an
authorized officer of the Trustee or the Authenticating Agent, if any, by
manual signature, and such certification 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. At any time and from time to time after the execution
and delivery of this Agreement, the Depositor may deliver Certificates to the
Trustee for authentication, and the Trustee or the Authenticating Agent shall
authenticate and deliver such Certificates as in this Agreement provided and
not otherwise. In the event that additional Certificates need to be prepared at
any time subsequent to the Closing Date, the Depositor shall prepare, or cause
to be prepared, and deliver, or cause to be delivered, at the Depositor's
expense, any such additional Certificates. With respect to the REMIC III
Regular Certificates, on the Closing Date the Trustee or the Authenticating
Agent upon the order of the Depositor shall authenticate Book-Entry
Certificates that are issued to a Clearing Agency or its nominee as provided in
Section 3.6 against payment of the purchase price thereof.
SECTION 3.2. REGISTRATION. The Trustee initially shall be the
registrar (the "CERTIFICATE REGISTRAR") in respect of the Certificates who
shall maintain books for the registration and for the transfer of Certificates
(the "CERTIFICATE REGISTER"). The Certificate Registrar may resign or be
discharged or removed by the Trustee or the Certificateholders, and a new
successor may be appointed, in accordance with the procedures and requirements
set forth in Sections 7.6 and 7.7 hereof with respect to the resignation,
discharge or removal of the Trustee and the appointment of a successor Trustee.
The Certificate Registrar may appoint, by a written instrument delivered to the
Holders and the Trustee, any trust company to act as co-registrar under such
conditions as the Certificate Registrar may prescribe; provided that the
Certificate Registrar shall not be relieved of any of its duties or
responsibilities hereunder by reason of such appointment.
SECTION 3.3. TRANSFER AND EXCHANGE OF CERTIFICATES.
(a) A Certificate may be transferred by the Holder thereof only upon
presentation and surrender of such Certificate at the Corporate Trust Office
(or the New York Presenting Office, if any) duly endorsed or accompanied by a
written instrument of transfer duly executed by such Holder or such Holder's
duly authorized attorney in such form as shall be satisfactory to the
Certificate Registrar. Upon the transfer of any Certificate in accordance with
the preceding sentence, and subject to the restrictions set forth in the other
subsections of this Section 3.3, the Trustee shall execute, and the Trustee or
any Authenticating Agent shall authenticate and deliver to the transferee, one
or more new Certificates of the same Class, in authorized denominations, and
evidencing, in the aggregate, the same aggregate Certificate Principal Balance,
Certificate Notional Amount or Percentage Interest, as the case may be, as the
Certificate being transferred. No service charge shall be made to a
Certificateholder for any registration of transfer of Certificates, but the
Certificate Registrar may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any registration
or transfer of Certificates. The Trustee may decline to accept any request for
a registration of transfer of any Certificate during the period beginning five
calendar days prior to any Distribution Date.
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(b) A Certificate may be exchanged by the Holder thereof for any
number of new Certificates of the same Class, in authorized denominations,
representing in the aggregate the same aggregate Certificate Principal Balance,
Certificate Notional Amount or Percentage Interest, as the case may be, as the
Certificate surrendered, upon surrender of the Certificate to be exchanged at
the Corporate Trust Office (or New York Presenting Office, if any) duly
endorsed or accompanied by a written instrument of exchange duly executed by
such Holder or such Holder's duly authorized attorney in such form as is
satisfactory to the Certificate Registrar. Certificates delivered upon any such
exchange will evidence the same obligations, and will be entitled to the same
rights and privileges, as the Certificates surrendered. No service charge shall
be made to a Certificateholder for any exchange of Certificates, but the
Certificate Registrar may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any exchange of
Certificates. Whenever any Certificates are so surrendered for exchange, the
Trustee shall execute and the Trustee or the Authenticating Agent shall
authenticate, date and deliver the Certificates that the Certificateholder
making the exchange is entitled to receive.
(c) All Definitive Certificates that are Privately Offered
Certificates shall initially be Legended Definitive Certificates. By acceptance
of a Legended Definitive Certificate, whether upon original issuance or
subsequent transfer, each Holder of such a Certificate acknowledges the
restrictions on the transfer of such Certificate set forth in the Securities
Legend and agrees that it will transfer such a Certificate only as provided
herein.
The Securities Legend shall appear on the face of the Legended
Definitive Certificates as follows:
THE CERTIFICATES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED OR
QUALIFIED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A)(1) TO A BUYER THAT THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE
144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), OR (3) TO A BUYER WHOM THE SELLER
REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN
THE MEANING OF RULE 501(a)(1), (2), (3) or (7) OF REGULATION D OF THE
SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
LAWS OF THE STATES OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION.
A transferee shall only be able to take delivery of an Unlegended
Definitive Certificate that is a Privately Offered Certificate if and after the
Depositor submits to the Trustee an Opinion of Counsel of the Depositor stating
that the Securities Legend is not required on such Definitive Certificate by
applicable law. Upon the Depositor submitting such Opinion of Counsel to the
Trustee, the Holder of such Certificate may submit such Certificate to the
Trustee to exchange such Certificate for an Unlegended Definitive Certificate
and the Trustee shall satisfy such request notwithstanding anything
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else herein to the contrary, and delivery permitted herein of a Legended
Definitive Certificate may be made in the form of an Unlegended Definitive
Certificate.
Except as described below in Sections 3.3(d), 3.3(e) and 3.3(f), no
restrictions to transfer shall apply to the transfer or registration of
transfer of an Unlegended Definitive Certificate to a transferee that takes
delivery in the form of an Unlegended Definitive Certificate.
(d) (i) No transfer of the Senior Certificate shall be made unless in
accordance with the prohibited transaction rules of ERISA and Section 4975 of
the Code and the terms of the Exemption as described in the Prospectus
Supplement under "ERISA Considerations". No Plan as to which the Initial
Purchaser, the Depositor, the Master Servicer, the Special Servicer, the Fiscal
Agent, the Operating Adviser or the Trustee is a party in interest or
disqualified person, and no QIB acting on behalf of or with "plan assets" of
any such Plan, may acquire such Certificates unless pursuant to a statutory
exemption or any of the administrative exemptions issued by the U.S. Department
of Labor, such that the acquisition and holding of Senior Certificates by, on
behalf of or with "plan assets" of such Plan would not constitute or result in
a non-exempt prohibited transaction under ERISA or Section 4975 of the Code by
reason of the application of one or more of the statutory or administrative
exemptions from the prohibited transaction rules described in the Memorandum.
(ii) No transfer of a Subordiante Certificate shall be made unless the
acquiror (i) is not a Plan and is not using "plan assets" of any Plan to
acquire such Certificates, or (ii) is an insurance company investing solely
assets of our general account and such purchase and holding of such
Certificates will not result in a non-exempt prohibited transaction under ERISA
or Section 4975 of the Code.
(e) No transfer, sale, pledge or other disposition of any
Privately-Offered Certificate or interest therein shall be made unless that
transfer, sale, pledge or other disposition is exempt from the registration
and/or qualification requirements of the Securities Act and any applicable
state securities laws, or is otherwise made in accordance with the Securities
Act and such state securities laws. If a transfer of any Privately-Offered
Certificate held as a Definitive Certificate is to be made without registration
under the Securities Act (other than in connection with the initial issuance of
the Certificates or a transfer of such Privately-Offered Certificate by the
Depositor or one of its Affiliates), then the Certificate Registrar shall
refuse to register such transfer unless it receives (and upon receipt, may
conclusively rely upon) either: (i) a certificate from the Certificateholder
desiring to effect such transfer substantially in the form attached as Exhibit
D-1 hereto and a certificate from such Certificateholder's prospective
Transferee substantially in the form attached either as Exhibit D-2A hereto or
as Exhibit D-2B hereto; or (ii) an Opinion of Counsel satisfactory to the
Trustee to the effect that such transfer shall be made without registration
under the Securities Act, together with the written certification(s) as to the
facts surrounding such transfer from the Certificateholder desiring to effect
such transfer and/or such Certificateholder's prospective Transferee on which
such Opinion of Counsel is based (such Opinion of Counsel shall not be an
expense of the Trust or of the Depositor, the Master Servicer, the Special
Servicer, the Trustee or the Certificate Registrar in their respective
capacities as such). If a transfer of any interest in a Privately-Offered
Certificate that constitutes a Book-Entry Certificate is to be made without
registration under the Securities Act (other than in connection with the
initial issuance of the Certificates or a transfer of any interest in such
Privately-Offered Certificate by the Depositor or any of its Affiliates), then
the Certificate Owner desiring to effect such transfer shall be required to
obtain either (i) a certificate from such Certificate Owner's prospective
Transferee substantially in the form attached as Exhibit D-3A hereto or as
Exhibit D-3B hereto, or (ii) an Opinion of Counsel to the effect that such
transfer may be made without registration under the Securities Act. None of the
Depositor, the Trustee, the Master Servicer or the Certificate Registrar is
obligated to register or qualify any Class of Privately-
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Offered Certificates under the Securities Act or any other securities law or to
take any action not otherwise required under this Agreement to permit the
transfer of any qualification. Any Certificateholder or Certificate Owner
desiring to effect a transfer of Privately-Offered Certificates or interests
therein shall, and does hereby agree to, indemnify the Depositor, the
Underwriter, the Trustee, the Master Servicer, the Special Servicer and the
Certificate Registrar against any liability that may result if the transfer is
not exempt from such registration or qualification or is not made in accordance
with such federal and state laws.
(f)(i) No Residual Certificate may be held or beneficially owned by a
Disqualified Organization. The Residual Certificates shall not be held or
beneficially owned by a non-United States Person. Prior to the registration
of any transfer, sale, pledge or other disposition of a Residual
Certificate, the proposed transferee shall provide to the Trustee a
Transfer Affidavit and Agreement in substantially the form set forth in
Exhibit F, to the effect that such transferee (1) agrees to be bound by the
terms of this Agreement and any restrictions set forth on the face of such
Residual Certificate, as the case may be, and (2) is not a Disqualified
Organization or a non-United States Person and will not hold such Residual
Certificate on behalf of a Disqualified Organization or non-United States
Person, and will promptly notify the Trustee of any change or impending
change in its status as such. The transferor of the Residual Certificate
shall also provide the Trustee with a Transferor Certificate substantially
in the form of Exhibit E.
(ii) In addition, any transfer, sale, pledge or other disposition of
any such Certificate to a Pass-Through Entity shall not be registered
unless the proposed transferee shall have agreed in writing, in such form
as the Trustee may require, to provide to the Trustee such information as
the Trustee may reasonably require concerning any record interest holder or
principal of such Pass-Through Entity who is or was a Disqualified
Organization. Any Holder of a Residual Certificate, by its acceptance
thereof, shall be deemed for all purposes to have consented to the
provisions of this Section 3.3(f).
(iii) The restrictions described in this Section 3.3(f) shall not
apply to a transfer of any such Certificate if the Trustee has received an
Opinion of Counsel to the effect that the restrictions described in this
Section 3.3(f) are not necessary to avoid the imposition of tax on a REMIC
or the disqualification of any REMIC as a REMIC under the Code.
(iv) If any Disqualified Organization shall become a Holder of a
Residual Certificate, then the last-preceding non-Disqualified Organization
shall be restored, to the extent permitted by law, to all rights and
obligations as Holder thereof retroactive to the date of registration of
such transfer of such Residual Certificate. If a non-United States Person
shall become a holder of a Residual Certificate, then the last-preceding
United States Person shall be restored, to the extent permitted by law, to
all rights and obligations as Holder thereof retroactive to the date of
registration of such transfer of such Residual Certificate. If a transfer
of a Residual Certificate is disregarded pursuant to the provisions of
Treasury Regulations Section 1.860E-1 or Section 1.860G-3, then the
last-preceding Permitted Transferee shall be restored, to the extent
permitted by law, to all rights and obligations as Holder thereof
retroactive to the date of registration of such transfer of such Residual
Certificate. The Trustee shall be under no liability to any Person for any
registration of transfer of a Residual Certificate that is in fact not
permitted by this Section 3.3(f) or for making any payments due on such
Certificate to the holder thereof or for taking any other action with
respect to such holder under the provisions of this Agreement.
(B) If any purported transferee shall become a Holder of a Residual
Certificate in violation of the restrictions in this Section 3.3(f) and to
the
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extent that the retroactive restoration of the rights of the Holder of such
Residual Certificate as described in clause (iv)(A) above shall be invalid,
illegal or unenforceable, then the Trustee shall have the right, without
notice to the holder or any prior holder of such Residual Certificate, to
sell such Residual Certificate to a purchaser selected by the Trustee on
such terms as the Trustee may choose. Such purported transferee shall
promptly endorse and deliver each Residual Certificate in accordance with
the instructions of the Trustee. Such purchaser may be the Trustee itself
or any Affiliate of the Trustee. The proceeds of such sale, net of the
commissions (which may include commissions payable to the Trustee or its
Affiliates), expenses and taxes due, if any, will be remitted by the
Trustee to such purported transferee. The terms and conditions of any sale
under this clause (iv)(B) shall be determined in the sole discretion of the
Trustee, and the Trustee shall not be liable to any Person having an
ownership interest in a Residual Certificate as a result of its exercise of
such discretion.
(v) Trustee shall make available all information necessary to compute
any tax imposed (A) as a result of the transfer of an ownership interest in
a Residual Certificate to any Person who is a Disqualified Organization,
including the information regarding "excess inclusions" of such Residual
Certificates required to be provided to the Internal Revenue Service and
certain Persons as described in Treasury Regulations Sections
1.860D-1(b)(5) and 1.860E-2(a)(5), and (B) as a result of any regulated
investment company, real estate investment trust, common trust fund,
partnership, trust, estate or organization described in Section 1381 of the
Code that holds an ownership interest in a Residual Certificate having as
among its record holders at any time any Person who is a Disqualified
Organization. Reasonable compensation for providing such information may be
required by the Trustee from such Person.
(g) Each investor purchasing Privately Offered Certificates from
either Underwriter will be deemed to have represented and agreed as follows
(terms used herein that are defined in Rule 144A or in Regulation D under
the Securities Act ("REGULATION D") are used herein as defined therein):
(i) The investor understands that the Certificates have not been
registered under the Securities Act, and that if in the future it decides
to offer, resell, pledge or otherwise transfer such Certificates within two
years after the later of the original issuance of such Certificates or the
last date on which such Certificates are held by an affiliate of the
Depositor, it will do so only (i) to the Depositor, (ii) to a person that
the seller reasonably believes is a QIB in a transaction meeting the
requirements of Rule 144A, (iii) pursuant to an exemption from registration
under the Securities Act provided by Rule 144 thereunder (if available), or
(iv) in certificated form to an Institutional Accredited Investor that
delivers to the Trustee a letter in the form of Exhibit D hereto and such
certifications, legal opinions and other information 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 Securities Act, and in each case in accordance with any
applicable securities laws of any state of the United States or any other
applicable jurisdiction.
(ii) The investor understands that the Certificates, except for the
Residual Certificates, will be issued only in the form of Book-Entry
Certificates, which will be held by the Custodian. Purchasers of such
Certificates will acquire beneficial interests in the Book-Entry
Certificates, which interests will be held directly or indirectly through
Participants.
(iii) The investor understands that Certificates will bear a
Securities Legend unless the Depositor determines otherwise consistent with
applicable law.
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The Senior Certificates will also bear the following additional legend:
NOTWITHSTANDING THE ABOVE, IF THE TRANSFEREE OF THIS CERTIFICATE IS AN
EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO THE FIDUCIARY RESPONSIBILITY
PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
OR ANY PERSON ACTING ON BEHALF OF SUCH PLAN OR IS USING THE ASSETS OF ANY
SUCH PLAN TO ACQUIRE OR HOLD THIS CERTIFICATE, SUCH PLAN OR SUCH PERSON
MUST BE AN ACCREDITED INVESTOR.
The Subordinate Certificates will also bear the following legend:
NOTWITHSTANDING THE ABOVE, THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED OR
OTHERWISE TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT OR OTHER
PLAN SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION
4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR ANY
PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR USING THE ASSETS OF SUCH PLAN
TO ACQUIRE THIS CERTIFICATE, EXCEPT FOR AN INSURANCE COMPANY INVESTING
SOLELY ASSETS OF ITS GENERAL ACCOUNT, WHICH SHALL BE DEEMED TO HAVE
REPRESENTED AND WARRANTED THAT THE PURCHASE AND OWNERSHIP OF THE
CERTIFICATE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER
ERISA OR SECTION 4975 OF THE CODE.
The Residual Certificates, will also bear the following additional legend:
THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED TO
"DISQUALIFIED ORGANIZATIONS" WITHIN THE MEANING OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED.
(iv) The investor is either (i) a QIB purchasing for its own account
or for the account of another QIB and it and such other Person are aware
that the sale to it is being made in reliance on Rule 144A or (ii) an
Institutional Accredited Investor and is purchasing the Certificates for
its own account or for an account with respect to which it exercises sole
investment discretion.
(v) If the investor is a QIB, the investor understands that the
Certificates offered in reliance on Rule 144A will be represented by the
Book-Entry Certificates. Before any interest in the Book-Entry Certificates
may be offered, sold, pledged or otherwise transferred to an Institutional
Accredited Investor, the transferee will be required to provide the Trustee
with a Purchaser's Letter in the form attached hereto as Exhibit D as to
compliance with the transfer restrictions referred to above.
(vi) The investor will deliver to each Institutional Accredited
Investor to whom it transfers Certificates notice of any restrictions on
transfer of such Certificates.
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(vii) If the investor is acquiring Senior Certificates, it understands
that, in accordance with the prohibited transaction rules of ERISA and
Section 4975 of the Code and the terms of the Exemptions (as such term is
defined and described under the heading "ERISA CONSIDERATIONS" in the
Prospectus Supplement), no Plan as to which either Underwriter, the
Depositor, the Master Servicer, the Special Servicer, the Fiscal Agent, the
Operating Adviser or the Trustee is a party in interest or disqualified
person, and no qualified institutional buyer acting on behalf of or with
"plan assets" of any such Plan, may acquire such Certificates unless
pursuant to a statutory exemption or any of the administrative exemptions
issued by the U.S. Department of Labor, such that the acquisition and
holding of Senior Certificates by, on behalf of or with "plan assets" of
such Plan would not constitute or result in a non-exempt prohibited
transaction under ERISA or Section 4975 of the Code by reason of the
application of one or more of the statutory or administrative exemptions
from the prohibited transaction rules described herein.
(viii) If the investor is acquiring Subordinate or Residual
Certificates, (i) it is not a Plan and is not using "plan assets" of any
Plan to acquire such Certificates and (ii) if it is an insurance company,
it is investing solely assets of its general account, and it shall be
deemed to have represented and warranted that the purchase and holding of
such Certificates will not constitute or result in a non-exempt prohibited
transaction under ERISA or Section 4975 of the Code.
(ix) If the investor is acquiring any Privately Offered Certificate as
a fiduciary or agent for one or more investor accounts, it represents that
it has sole investment discretion with respect to such account and that it
has full power to make the acknowledgments, representations and agreements
contained herein on behalf of each such account.
(x) The investor acknowledges that the Depositor, the Underwriters,
the Trustee, the Fiscal Agent and others will rely on the truth and
accuracy of the foregoing acknowledgments, representations and agreements,
and agrees that if any of the foregoing representations and agreements
deemed to have been made by it by its purchase are no longer accurate, it
shall promptly notify the Depositor and the Underwriters.
(xi) Each original purchaser of the Certificates will be required to
sign a Purchaser's Letter in the form attached as Exhibit D hereto.
(xii) The Trustee shall have no liability to the Trust arising from a
transfer of any Certificate in reliance upon a certification, ruling or
Opinion of Counsel described in this Section 3.3; provided, however, that
the Trustee shall not register the transfer of a Residual Certificate if it
has actual knowledge that the proposed transferee does not meet the
qualifications of a permitted Holder of a Residual Certificate as set forth
in this Section 3.3.
SECTION 3.4. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If (a) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate and (b) except in the case of a mutilated Certificate so
surrendered, there is delivered to the Trustee such security or indemnity as
may be required by it to save it harmless, then, in the absence of notice to
the Trustee that such Certificate has been acquired by a bona fide purchaser,
the Trustee shall execute, authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate
of like tenor and interest in the Trust. In connection with the issuance of any
new Certificate under this Section 3.4, the Trustee may require the payment of
a sum sufficient to cover any tax or other governmental charge
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that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee) connected therewith. Any replacement
Certificate issued pursuant to this Section 3.4 shall constitute complete and
indefeasible evidence of ownership in the Trust, as if originally issued.
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
SECTION 3.5. PERSONS DEEMED OWNERS. Prior to presentation of a
Certificate for registration of transfer, the Depositor, the Master Servicer,
the Special Servicer, the Fiscal Agent, the Trustee, the Operating Adviser and
any agent of the Depositor, the Master Servicer, the Special Servicer, the
Fiscal Agent, the Trustee or the Operating Adviser may treat the Person in
whose name any Certificate is registered as the owner of such Certificate for
the purpose of receiving distributions as provided in this Agreement and for
all other purposes whatsoever, and neither the Master Servicer, the Special
Servicer, the Trustee, the Fiscal Agent, the Operating Adviser nor any agent of
the Master Servicer, the Special Servicer the Fiscal Agent, the Trustee or the
Operating Adviser shall be affected by any notice to the contrary.
SECTION 3.6. BOOK-ENTRY CERTIFICATES.
(a) Notwithstanding the foregoing, each Class of REMIC III Regular
Certificates, upon original issuance, shall be issued in the form of one or
more physical certificates (collectively, as to any Class of Book-Entry
Certificates, a "GLOBAL CERTIFICATE") representing such Class, to be delivered
to the Trustee, as custodian for The Depository Trust Company (the
"DEPOSITORY"), the initial Clearing Agency, by, or on behalf of, the Depositor.
The Global Certificates shall initially be registered on the Certificate
Register in the name of Cede & Co., the nominee of the Depository, as the
initial Clearing Agency, and no Certificate Owner will receive a Definitive
Certificate representing such Certificate Owner's interest in the Book-Entry
Certificates, except as provided in Section 3.8. Unless and until Definitive
Certificates have been issued to the Certificate Owners pursuant to Section
3.8:
(i) the provisions of this Section 3.6 shall be in full force and
effect with respect to each such Class;
(ii) the Depositor, the Master Servicer, the Certificate Registrar and
the Trustee may deal with the Clearing Agency for all purposes (including
the making of distributions on the Certificates) as the authorized
representative of the Certificate Owners;
(iii) to the extent that the provisions of this Section 3.6 conflict
with any other provisions of this Agreement, the provisions of this Section
3.6 shall control with respect to each such Class; and
(iv) the rights of the Certificate Owners of each such Class shall be
exercised only through the Clearing Agency and the applicable Participants
and shall be limited to those established by law and agreements between
such Certificate Owners and the Clearing Agency, the Participants and/or
the Indirect Participants. Pursuant to the Depository Agreement, unless and
until Certificates are issued in respect of such Classes pursuant to
Section 3.8, the initial Clearing Agency will make book-entry transfers
among the Participants and receive and transmit distributions of principal
and interest on the related Certificates to such Participants.
(b) For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of, Holders of the
Certificates evidencing a specified percentage of the aggregate unpaid
principal (and, in the case of the Class X Certificates, notional) amount of
Certificates, such direction or consent may be given in respect of such Classes
by the Clearing Agency at
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the direction of Certificate Owners owning Certificates evidencing the
requisite percentage of principal (and, in the case of the Class X
Certificates, notional) amount of Certificates. The Clearing Agency may take
conflicting actions with respect to the Certificates to the extent that such
actions are taken on behalf of the Certificate Owners.
SECTION 3.7. NOTICES TO CLEARING AGENCY. Whenever a notice or other
communication to the Certificateholders is required under this Agreement,
unless and until Definitive Certificates shall have been issued to the related
Certificateholders pursuant to Section 3.8, the Trustee shall give all such
notices and communications specified herein to be given to Holders of the
Book-Entry Certificates to the Clearing Agency which shall give such notices
and communications to the related Participants in accordance with its
applicable rules, regulations and procedures.
SECTION 3.8. DEFINITIVE CERTIFICATES.
(a) Definitive Certificates will be issued to the owners of beneficial
interests in a Class of Book-Entry Certificates or their nominees if (i) the
Depository notifies the Depositor and the Trustee in writing that the
Depository is unwilling or unable to continue as Clearing Agency for the
Book-Entry Certificates and a qualifying successor Clearing Agency is not
appointed by the Depositor within 90 days thereof, (ii) the Depositor, at its
option, elects to terminate the book-entry system through the Clearing Agency
or (iii) an Event of Default shall have occurred and is continuing and Holders
of Book-Entry Certificates entitled to at least 51% of the Voting Rights
thereof advise the Depository and the Trustee that the continuation of the
book-entry system through the Depository (or a successor thereto) is no longer
in the best interest of Certificateholders. Upon notice of the occurrence of
either of the events described in the preceding sentence, the Trustee shall
notify all Certificate Owners, through the Clearing Agency, of the occurrence
of the event and of the availability of Definitive Certificates to such
Certificate Owners requesting the same. Upon surrender to the Trustee of the
Book-Entry Certificates by the Clearing Agency, accompanied by registration
instructions from the Clearing Agency for registration, the Trustee shall
execute, authenticate and deliver the Definitive Certificates. None of the
Depositor, the Fiscal Agent or the Trustee shall be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Certificates, all references herein to obligations imposed upon or to be
performed by the Clearing Agency shall be deemed to be imposed upon and
performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates, and the Trustee shall recognize the Holders of
Definitive Certificates as Certificateholders hereunder.
(b) Distributions of principal and interest on the Definitive
Certificates shall be made by the Trustee directly to holders of Definitive
Certificates in accordance with the procedures set forth in this Agreement.
ARTICLE IV.
ADVANCES
SECTION 4.1. P&I ADVANCES BY MASTER SERVICER.
(a) On each P&I Advance Date, the Master Servicer shall, subject to
Section 4.4, either (i) deposit into the Distribution Account (or, to the
extent made to cover unpaid Servicing Fees, in the Collection Account) from its
own funds an amount equal to the aggregate amount of P&I Advances, if any, to
be made in respect of the related Distribution Date, (ii) apply amounts held in
the Collection Account for future distribution to Certificateholders in
subsequent months in discharge of any such
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obligation to make P&I Advances, or (iii) make P&I Advances in the form of any
combination of (i) and (ii) aggregating the total amount of P&I Advances to be
made, provided that, if Late Collections of the delinquent principal and
interest payments for which P&I Advances are to be made for the related
Distribution Date, are on deposit in the Collection Account and available to
make such P&I Advances, the Master Servicer shall utilize such Late Collections
to make such P&I Advances pursuant to clause (ii) above. Any amounts held in
the Collection Account for future distribution and so used to make P&I Advances
shall be appropriately reflected in the Master Servicer's records and advanced
by the Master Servicer by deposit in the Collection Account on or before the
next succeeding Determination Date (to the extent not previously replaced
through the deposit of Late Collections of the delinquent principal and
interest in respect of which such P&I Advances were made). If, as of 3:00 p.m.,
New York City time, on any P&I Advance Date, the Master Servicer shall not have
made any P&I Advance required to be made on such date pursuant to this Section
4.01(a) (and shall not have delivered to the Trustee the requisite Officer's
Certificate and documentation related to a determination of nonrecoverability
of a P&I Advance), then the Trustee shall provide notice of such failure to a
Servicing Officer of the Master Servicer by facsimile transmission sent to
telecopy no. (312) 845-8617 (or such alternative number provided by the Master
Servicer to the Trustee in writing) and by telephone at telephone no. (312)
845-8585 (or such alternative number provided by the Master Servicer to the
Trustee in writing) as soon as possible, but in any event before 5:00 p.m., New
York City time, on such day.
(b) The aggregate amount of P&I Advances to be made by the Master
Servicer in respect of the Mortgage Loans (including without limitation Balloon
Mortgage Loans delinquent as to their respective Balloon Payments and REO
Mortgage Loans) for any Distribution Date shall equal, subject to Section 4.4
below, the aggregate of all Monthly Payments (other than Balloon Payments) and
any Assumed Monthly Payments, in each case net of any related Master Servicing
Fee and Workout Fee, that were due or deemed due, as the case may be, in
respect thereof on their respective Due Dates during the related Collection
Period and that were not paid by or on behalf of the related Mortgagors or
otherwise collected as of the close of business on the last day of the related
Collection Period (or otherwise offset as provided in Section 4.1(a) by amounts
held in the Collection Account for future distribution to Certificateholders);
provided that, if an Appraisal Reduction has occurred (and for so long as it
exists) with respect to any Required Appraisal Loan, then, in the event of
subsequent delinquencies thereon, the amount of the P&I Advance in respect of
such Required Appraisal Loan for the related Distribution Date shall be reduced
to an amount equal to the product of (i) the amount of the P&I Advance for such
Required Appraisal Loan for such Distribution Date without regard to this
proviso, multiplied by (ii) a fraction, expressed as a percentage, the
numerator of which is equal to the Stated Principal Balance of such Required
Appraisal Loan immediately prior to such Distribution Date, net of the related
Appraisal Reduction, if any, and the denominator of which is equal to the
Stated Principal Balance of such Required Appraisal Loan immediately prior to
such Distribution Date. The amount to be advanced by the Master Servicer,
Trustee or Fiscal Agent in respect of any Mortgage Loan on any Distribution
Date will be reduced by the greater of the reduction in respect of any
Appraisal Reduction and the reduction described in the preceding sentence.
SECTION 4.2. SERVICING ADVANCES.
(a) The Master Servicer, the Special Servicer, the Trustee and the
Fiscal Agent shall each make Servicing Advances to the extent provided in this
Agreement, except to the extent that the Master Servicer, the Special Servicer,
the Trustee or the Fiscal Agent determines, as applicable, in accordance with
Section 4.4 below, that any such Servicing Advance would be a Nonrecoverable
Advance. Such determination shall be conclusive and binding on the Trustee and
the Certificateholders.
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(b) No more frequently than once per calendar month, the Special
Servicer may require the Master Servicer, and the Master Servicer shall be
obligated, subject to the second following paragraph, to reimburse the Special
Servicer for any Servicing Advances made by but not previously reimbursed to
the Special Servicer, and to pay the Special Servicer interest thereon at the
Advance Rate from the date the advance was made to, but not including, the date
of reimbursement. Such reimbursement and any accompanying payment of interest
shall be made within ten (10) days of the request therefor by wire transfer of
immediately available funds to an account designated by the Special Servicer.
Upon the Master Servicer's reimbursement to the Special Servicer of any
Servicing Advance and payment to the Special Servicer of interest thereon, all
in accordance with this Section 4.2(b), the Master Servicer shall for all
purposes of this Agreement be deemed to have made such Servicing Advance at the
same time as the Special Servicer originally made such Servicing Advance, and
accordingly, the Master Servicer shall be entitled to reimbursement for such
Servicing Advance, together with interest thereon at the Advance Rate, at the
same time, in the same manner and to the same extent as the Master Servicer
would otherwise have been entitled if it had actually made such Servicing
Advance.
Notwithstanding anything to the contrary contained in this Agreement,
if the Special Servicer is required under this Agreement to make any Servicing
Advance but does not desire to do so, the Special Servicer may, in its sole
discretion, request that the Master Servicer make such Servicing Advance, such
request to be made in writing and in a timely manner that does not materially
and adversely affect the interests of any Certificateholder and to be
accompanied by such additional information regarding the circumstances
surrounding such Servicing Advance as the Master Servicer may reasonably
request. Subject to the following paragraph, the Master Servicer shall have the
obligation to make any such Servicing Advance that it is requested by the
Special Servicer to make within ten (10) days of the Master Servicer's receipt
of such request. The Special Servicer shall be relieved of any obligations with
respect to a Servicing Advance that it requests the Master Servicer to make
(regardless of whether or not the Master Servicer shall make such Advance). The
Master Servicer shall be entitled to reimbursement for any Servicing Advance
made by it at the direction of the Special Servicer, together with Advance
Interest thereon, at the same time, in the same manner and to the same extent
as the Master Servicer is entitled with respect to any other Servicing Advance
made thereby.
Notwithstanding the foregoing provisions of this Section 4.2(b), the
Master Servicer shall not be required to make at the Special Servicer's
direction, or to reimburse the Special Servicer for, any Servicing Advance if
the Master Servicer determines (in its good faith and reasonable judgment) that
the Servicing Advance which the Special Servicer is requesting the Master
Servicer to make or to reimburse to the Special Servicer hereunder, although
not characterized by the Special Servicer as a Nonrecoverable Servicing
Advance, is or would be, if made, a Nonrecoverable Servicing Advance. The
Master Servicer shall notify the Special Servicer in writing of such
determination. Such notice shall not obligate the Special Servicer to make any
such proposed Servicing Advance. The Special Servicer shall promptly provide
the Master Servicer with any information that comes into its possession that
constitutes evidence that any future Advances made with respect to any Mortgage
Loan or REO Property would be Nonrecoverable Advances. The Special Servicer
shall have the option (but not the obligation) to make a Servicing Advance with
respect to any Specially Serviced Mortgage Loan notwithstanding that such
Advance would constitute a Nonrecoverable Advance, if the Special Servicer
believes, in accordance with the Servicing Standard, that funding such Advance
would likely increase Liquidation Proceeds over the amount that otherwise would
have been realized. The Master Servicer may rely conclusively on any
determination by the Special Servicer that any Servicing Advance is or would be
a nonrecoverable advance and shall have no obligation to make a separate
determination of recoverability.
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SECTION 4.3. ADVANCES BY TRUSTEE AND FISCAL AGENT.
(a) To the extent that the Master Servicer fails to make a P&I Advance
by 11:00 a.m. on the Business Day following the related P&I Advance Date (other
than a P&I Advance that the Master Servicer determines is a Nonrecoverable
Advance), the Trustee shall make such P&I Advance unless the Trustee determines
that such P&I Advance, if made, would be a Nonrecoverable Advance. To the
extent that the Trustee is required hereunder to make P&I Advances, it shall
deposit the amount thereof in the Distribution Account (or, to the extent made
to cover unpaid Servicing Fees, in the Collection Account) on the relevant
Distribution Date.
(b) To the extent that the Trustee fails to make a P&I Advance
required to be made by the Trustee hereunder by 12:00 p.m., New York City time,
on any Distribution Date (other than a P&I Advance that the Trustee determines
is or would be a Nonrecoverable Advance), the Fiscal Agent will advance such
P&I Advance unless the Fiscal Agent determines that any such P&I Advance, if
made, would be a Nonrecoverable Advance. To the extent that the Fiscal Agent is
required hereunder to make P&I Advances, it shall deposit the amount thereof in
the Distribution Account (or, to the extent made to cover unpaid Servicing
Fees, in the Collection Account) on such Distribution Date.
(c) To the extent that the Master Servicer or Special Servicer fails
to make a Servicing Advance by the fifteenth day after such Servicing Advance
is required to be made (other than a Servicing Advance that the Master Servicer
or Special Servicer determines is or would be a Nonrecoverable Advance), if the
Trustee has actual knowledge of such failure, the Trustee will be required to
give the defaulting party notice of such failure and, if such failure continues
for three (3) more Business Days, the Trustee shall make such Servicing Advance
unless the Trustee determines that such Servicing Advance, if made, would be a
Nonrecoverable Advance.
(d) To the extent that the Trustee fails to make a Servicing Advance
required to be made by the Trustee hereunder by the later of (i) the date such
Servicing Advance is required to be made and (ii) five Business Days after the
date the Trustee knows or should know, pursuant to subsection (c) above, that
such Servicing Advance has not been made by the Master Servicer (other than a
Servicing Advance that the Trustee determines is or would be a Nonrecoverable
Advance), the Fiscal Agent will advance such Servicing Advance, unless the
Fiscal Agent determines that such Servicing Advance, if made, would be a
Nonrecoverable Advance.
The initial Trustee's failure to make any Advance required to be made
by it hereunder shall not constitute a default by the initial Trustee hereunder
if the initial Fiscal Agent makes such Advance.
SECTION 4.4. EVIDENCE OF NONRECOVERABILITY. Notwithstanding anything
herein to the contrary, no Advance shall be required to be made hereunder if
such Advance would, if made, constitute a Nonrecoverable Advance. In addition,
Nonrecoverable Advances shall be reimbursable pursuant to Section 5.2 out of
general collections on the Mortgage Loans and REO Properties on deposit in the
Collection Account. The determination by the Master Servicer, the Special
Servicer or, if applicable, the Trustee or the Fiscal Agent, that it has made a
Nonrecoverable Advance or that any proposed Advance, if made, would constitute
a Nonrecoverable Advance, shall be evidenced by an Officer's Certificate
delivered promptly (and, in any event, in the case of a proposed P&I Advance to
be made by the Master Servicer, no less than one Business Day prior to the
related P&I Advance Date) to the Trustee (or, if applicable, retained thereby)
and the Depositor, setting forth the basis for such determination, together
with (if such determination is prior to the liquidation of the related Mortgage
Loan or REO Property) a copy of an Appraisal or internal evaluation of the
related Mortgaged Property
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or REO Property, as the case may be, which shall have been performed within the
twelve months preceding such determination, and further accompanied by any
other information that the Master Servicer or the Special Servicer may have
obtained and that supports such determination. If such an Appraisal or internal
evaluation shall not have been required and performed pursuant to the terms of
this Agreement, the Master Servicer or the Special Servicer, as the case may
be, may, subject to its reasonable and good faith determination that such
Appraisal will demonstrate the nonrecoverability of the related Advance, obtain
an Appraisal for such purpose at the expense of the Trust payable out of the
Collection Account. The Trustee and the Fiscal Agent shall each be entitled to
rely on any determination of nonrecoverability that may have been made by the
Master Servicer or the Special Servicer with respect to a particular Advance,
and the Master Servicer shall be entitled to rely on any determination of
nonrecoverability that may have been made by the Special Servicer with respect
to a particular Advance and shall have no obligation to make a separate
determination of recoverability.
SECTION 4.5. ADVANCE INTEREST. The Master Servicer, the Special
Servicer, the Trustee and the Fiscal Agent shall each be entitled to receive
interest at the Advance Rate in effect from time to time, accrued on the amount
of each Advance made thereby (out of its own funds) for so long as such Advance
is outstanding, payable: first, out of Penalty Charges received on the Mortgage
Loan (including, without limitation, an REO Mortgage Loan as to which such P&I
Advance was made) or, if such amounts are insufficient, out of general
collections on the Mortgage Loans and REO Properties in the Collection Account.
SECTION 4.6. MERGER OR CONSOLIDATION OF FISCAL AGENT. Any Person into
which the Fiscal Agent may be merged or consolidated, or any Person resulting
from any merger, conversion, other change in form or consolidation to which the
Fiscal Agent shall be a party, or any Person succeeding to the business of the
Fiscal Agent, shall be the successor of the Fiscal Agent hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided that
(i) the successor to the Fiscal Agent or resulting Person shall have a net
worth of not less than $100,000,000, (ii) such successor or resulting Person
shall be satisfactory to the Trustee, (iii) such successor or resulting Person
shall execute and deliver to the Trustee an agreement, in form and substance
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 Fiscal Agent under this Agreement from and
after the date of such agreement, (iv) the Rating Agencies shall be given prior
written notice of the identity of the proposed successor or resulting Person
and the Rating Agencies shall have provided Rating Agency Confirmation, and (v)
the Fiscal Agent shall deliver to the Trustee an Officer's Certificate and an
Opinion of Counsel acceptable to the Trustee (which opinion shall be at the
expense of the Fiscal Agent) stating that all conditions precedent to such
action under this Section 4.6 have been completed and such action is permitted
by and complies with the terms of this Section 4.6.
SECTION 4.7. LIMITATION ON LIABILITY OF THE FISCAL AGENT AND OTHERS.
Neither the Fiscal Agent nor any of the directors, officers, employees, agents
or Controlling Persons of the Fiscal Agent shall be under any liability to the
Certificateholders, the Depositor, or the Trustee for any action taken or for
refraining from the taking of any action in good faith, using reasonable
business judgment, pursuant to this Agreement; provided that this provision
shall not protect the Fiscal Agent or any such person against any liability
which would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in its performance of duties under this Agreement. The Fiscal Agent
and any director, officer, employee or agent of the Fiscal Agent may rely in
good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Fiscal
Agent shall not be under any obligation to appear in, prosecute or defend any
legal action which is not incidental to its obligations under this Agreement.
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The provisions of this Section 4.7 shall survive the resignation or removal of
the Fiscal Agent and the termination of this Agreement.
SECTION 4.8. INDEMNIFICATION OF FISCAL AGENT. The Fiscal Agent and
each of its directors, officers, employees and agents shall be indemnified and
held harmless by the Trust out of the Collection Account against any and all
claims, losses, penalties, fines, forfeitures, legal fees and related costs,
judgments and any other costs, liabilities, fees and expenses incurred in
connection with any legal action relating to this Agreement, other than any
loss, liability or expense incurred by reason of a breach on the part of the
Fiscal Agent of any of its representations, warranties or covenants contained
herein or the Fiscal Agent's willful misfeasance, bad faith or negligence in
the performance of duties hereunder. The Fiscal Agent shall immediately notify
the Master Servicer and the Trustee if a claim is made by a third party with
respect to this Section 4.8 entitling the Fiscal Agent, its directors,
officers, employees or agents to indemnification hereunder, whereupon the
Master Servicer shall assume the defense of any such claim (with counsel
reasonably satisfactory to the Fiscal Agent) and pay out of the Collection
Account all expenses in connection therewith, including reasonable counsel
fees, and promptly pay, discharge and satisfy out of the Collection Account any
judgment or decree which may be entered against it or them in respect of such
claim. Any failure to so notify the Master Servicer shall not affect any rights
the Fiscal Agent, its directors, officers, employees or agents may have to
indemnification under this Section 4.8, unless the Master Servicer's defense of
such claim is materially prejudiced thereby. The indemnification provided
herein shall survive the resignation or removal of the Fiscal Agent and the
termination of this Agreement.
ARTICLE V.
COLLECTION ACCOUNT; DISTRIBUTION ACCOUNT;
CERTAIN TRUSTEE REPORTS
SECTION 5.1. COLLECTION ACCOUNT.
(a) The Master Servicer shall open, on or prior to the Closing Date,
and shall thereafter maintain a segregated account (the "COLLECTION ACCOUNT")
solely with respect to this Agreement, entitled "GMAC Commercial Mortgage
Corporation, as Master Servicer for LaSalle National Bank, as Trustee for the
Holders of Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2, Collection Account." The Collection Account
shall be an Eligible Account.
(b) On or prior to the date the Master Servicer shall first deposit
funds in the Collection Account, the Master Servicer shall give to the Trustee
prior written notice of the name and address of the depository institution at
which the Collection Account is maintained and the account number of the
Collection Account. The Master Servicer shall take such actions as are
necessary to cause the depository institution holding the Collection Account to
hold such account in the name of the Master Servicer as provided in Section
5.1(a), subject to the Master Servicer's right to direct payments and
investments and its rights of withdrawal under this Agreement.
(c) The Master Servicer shall deposit into the Collection Account two
Business Days following receipt (or, in the case of unscheduled remittances of
principal or interest, two Business Days following identification of the proper
application of such amounts), the following amounts received or paid by it,
other than in respect of interest and principal on the Mortgage Loans due on or
before the Cut-off Date which shall be remitted to the applicable Seller
(provided that the Master Servicer may retain
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amounts otherwise payable to the Master Servicer as provided in Section 5.2(b)
rather than deposit them into the Collection Account):
(i) Principal: all payments on account of principal, including,
without limitation, the principal component of Monthly Payments, any late
payments in respect thereof and any Principal Prepayments, on the Mortgage
Loans;
(ii) Interest: all payments on account of interest, including, without
limitation, the interest component of Monthly Payments, any late payments
in respect thereof and any Default Interest, on the Mortgage Loans but
excluding any Excess Interest (which, if and as received by the Master
Servicer or Special Servicer, shall be remitted by the Master Servicer or
the Special Servicer to the Trustee for deposit to the Excess Interest
Distribution Account, net of fees, expenses or taxes of the Trust Fund not
properly charged to the Collection Account);
(iii) Liquidation Proceeds: all Liquidation Proceeds with respect to
the Mortgage Loans, including, without limitation, REO Mortgage Loans;
(iv) Insurance Proceeds and Condemnation Proceeds: all Insurance
Proceeds and Condemnation Proceeds with respect to any Mortgaged Property
or REO Property (other than any such proceeds to be applied to the
restoration or repair of such property or released to the related Mortgagor
in accordance with applicable law, the terms of the related Mortgage Loan
or the Servicing Standard, in which case such proceeds shall be deposited
by the Master Servicer into an escrow account or released to the related
Mortgagor, as the case may be, and not deposited in the Collection
Account);
(v) Assumption Fees, Modification Fees, Late Fees and Prepayment
Premiums: all assumption fees, modification fees, Late Fees and Prepayment
Premiums with respect to the Mortgage Loans;
(vi) REO Income: all REO Income (net of any expenses and fees paid
therefrom by the related property manager) in respect of any REO
Properties;
(vii) Investment Losses: any amounts required to be deposited by the
Master Servicer pursuant to Section 5.1(e) in connection with losses
realized on Eligible Investments with respect to funds held in the
Collection Account;
(viii) P&I Advances: that portion of each P&I Advance that represents
the Master Servicing Fee and, if applicable, the Special Servicing Fee;
(ix) Repurchase Proceeds and Substitution Shortfall Amounts: All
Repurchase Proceeds and payments of Substitution Shortfall Amounts with
respect to the Mortgage Loans, including, without limitation, the REO
Mortgage Loans; and
(x) Other: all other amounts required to be deposited in the
Collection Account pursuant to this Agreement.
If the Master 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.
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(d) Upon its receipt of any of the amounts described in clauses (i)
through (vi) of Section 5.1(c) with respect to any Mortgage Loan or REO
Property, the Special Servicer shall promptly, but in no event later than the
Business Day after receipt, remit such amounts to the Master Servicer for
deposit into the Collection Account in accordance with Section 5.1(c), unless
the Special Servicer determines, consistent with the Servicing Standard, that a
particular item should not be deposited because of a restrictive endorsement or
other appropriate reason. With respect to any such amounts paid by check to the
order of the Special Servicer, the Special Servicer shall endorse such check to
the order of the Master Servicer and shall deliver promptly, but in no event
later than the Business Day after receipt, any such check to the Master
Servicer by overnight courier, unless the Special Servicer determines,
consistent with the Servicing Standard, that a particular item cannot be so
endorsed and delivered because of a restrictive endorsement or other
appropriate reason. The Master Servicer shall promptly inform the Special
Servicer of the name, account number, location and other necessary information
concerning the Collection Account in order to permit the Special Servicer to
make deposits therein.
(e) Funds in the Collection Account may be invested and, if invested,
shall be invested by, and at the risk of, the Master Servicer in Eligible
Investments selected by the Master Servicer which shall mature, unless payable
on demand, not later than the Business Day immediately preceding the next
Master Servicer Remittance Date, and any such Eligible Investment shall not be
sold or disposed of prior to its maturity unless payable on demand. All such
Eligible Investments shall be made in the name of "GMAC Commercial Mortgage
Corporation, in trust for LaSalle National Bank, as Trustee for the Holders of
the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2." None of the Depositor, the Mortgagors, the
Trustee or the Fiscal Agent shall be liable for any loss incurred on such
Eligible Investments.
An amount equal to all income and gain realized from any such
investment (to the extent not needed to offset losses from other investments)
shall be paid to the Master Servicer as additional servicing compensation and
shall be subject to its withdrawal at any time from time to time. The amount of
any losses incurred in respect of any such investments shall be for the account
of the Master Servicer which shall deposit the amount of such loss (to the
extent not offset by income from other investments) in the Collection Account
out of its own funds no later than the next succeeding Master Servicer
Remittance Date.
Except as expressly provided otherwise in this Agreement, if any
default occurs in the making of a payment due under any Eligible Investment, or
if a default occurs in any other performance required under any Eligible
Investment, the Trustee may take such action as may be appropriate to enforce
such payment or performance, including the institution and prosecution of
appropriate proceedings.
(f) Certain of the Mortgage Loans may provide for payment by the
Mortgagor to the Master Servicer of amounts to be used for payment of Escrow
Payments for the account of the Mortgagor. The Master Servicer shall deal with
these amounts in accordance with the Servicing Standard, applicable law and the
terms of the related Mortgage Loans.
SECTION 5.2. APPLICATION OF FUNDS IN THE COLLECTION ACCOUNT.
(a) Monthly, on each Master Servicer Remittance Date, the Master
Servicer shall withdraw from the Collection Account and deliver to the Trustee
for deposit in the Distribution Account all amounts then on deposit in the
Collection Account that represent payments and other collections on or in
respect of the Mortgage Loans and any REO Properties that were received by the
Master Servicer or the Special Servicer through the end of the related
Collection Period, exclusive of any such payments and
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other collections that: (i) constitute Monthly Payments due on a Due Date
following the end of the related Collection Period; (ii) are payable or
reimbursable to any Person from the Collection Account pursuant to clauses (i)
through (xvi), inclusive, of Section 5.2(b); and/or (iii) were deposited in the
Collection Account in error. The Trustee shall notify the Master Servicer (in a
manner consistent with the last sentence of Section 4.1(a)) if any such
remittance is not received by 3:00 p.m., New York City time, on any Master
Servicer Remittance Date. If the Master Servicer does not deposit such amounts
into the Distribution Account by 3:00 p.m., New York City time on the Master
Servicer Remittance Date, then the Master Servicer will pay interest to the
Trustee on such late payment at the prime rate from the Master Servicer
Remittance Date to the date (and not including) that such payment is received
by the Trustee. In addition, on each P&I Advance Date, the Master Servicer is
authorized (or, to the extent provided in Section 4.1, required) to apply
certain amounts held in the Collection Account for future distribution to
Certificateholders in subsequent months and certain Late Collections, all as
more particularly specified in Section 4.1, to make required P&I Advances on
such date.
(b) The Master Servicer may, from time to time, also make withdrawals
from the Collection Account for any of the following purposes:
(i) Servicing Fees: to pay to itself unpaid Master Servicing Fees and
to the Special Servicer unpaid Special Servicing Fees, in each case earned
thereby in respect of each Mortgage Loan, including, without limitation,
each REO Mortgage Loan, the Master Servicer's and the Special Servicer's
respective rights to payment pursuant to this clause (i) being limited to
amounts received, in each case in respect of such Mortgage Loan that is
allocable as a recovery of interest thereon or advanced as a P&I Advance
with respect to such Mortgage Loan;
(ii) Workout Fees and Liquidation Fees: to pay to the Special Servicer
earned and unpaid Workout Fees and Liquidation Fees to which it is entitled
pursuant to, and from the sources contemplated by, Section 8.10(b);
(iii) P&I Advances: to reimburse each of the Fiscal Agent, the Trustee
and the Master Servicer, in that order, for unreimbursed P&I Advances made
by each such Person, the Fiscal Agent's, Trustee's and Master Servicer's
respective rights to be reimbursed pursuant to this clause (iii) being
limited to amounts received that represent Late Collections of interest on
and principal of the particular Mortgage Loans, including, without
limitation, REO Mortgage Loans, with respect to which such P&I Advances
were made (in each case net of related Workout Fees);
(iv) Servicing Advances: to reimburse each of the Fiscal Agent, the
Trustee, the Master Servicer and the Special Servicer, in that order, for
unreimbursed Servicing Advances made by each such Person, the Fiscal
Agent's, the Trustee's, the Master Servicer's and the Special Servicer's
respective rights to be reimbursed pursuant to this clause (iv) being
limited to amounts received that represent Late Collections of interest on
and principal of the particular Mortgage Loans, including, without
limitation, REO Mortgage Loans, with respect to which such Servicing
Advances were made with respect to any Mortgage Loan or REO Property;
(v) Nonrecoverable Advances: to reimburse the Fiscal Agent, the
Trustee, the Master Servicer and the Special Servicer, in that order, out
of general collections on the Mortgage Loans and REO Properties, for
Nonrecoverable Advances made by each such Person;
(vi) Advance Interest: to pay the Fiscal Agent, the Trustee, the
Master Servicer and the Special Servicer, in that order, any unpaid Advance
Interest due and payable
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thereto, the Fiscal Agent's, the Trustee's, the Master Servicer's and the
Special Servicer's respective rights to payment pursuant to this clause
(vi) being limited to Penalty Charges collected in respect of the Mortgage
Loans, including without limitation any REO Mortgage Loan, as to which the
related Advance was made;
(vii) More Advance Interest: at or following such time as it
reimburses itself, the Special Servicer, the Trustee or the Fiscal Agent,
as applicable, for any unreimbursed Advance pursuant to clause (iii), (iv)
or (v) above or pursuant to Section 8.3, and insofar as payment has not
already been made pursuant to clause (vi) above, to pay itself, the Special
Servicer, the Trustee or the Fiscal Agent, as the case may be, out of
general collections on the Mortgage Loans and REO Properties, any related
Advance Interest accrued and payable on such Advance;
(viii) Additional Master Servicing and Special Servicing Compensation:
to pay to each of itself and the Special Servicer all amounts deposited in
the Collection Account from time to time that constitute Additional Master
Servicing Compensation and Additional Special Servicing Compensation,
respectively;
(ix) Certain Environmental Costs: to pay out of general collections on
the Mortgage Loans and REO Properties, any costs and expenses incurred by
the Trust pursuant to Section 8.7(c);
(x) Operation, Management and Maintenance of REO Property: to pay
expenses related to the proper operation, management and maintenance of any
REO Property pursuant to Section 8.20, but only out of amounts (whether in
the form of REO Income, Liquidation Proceeds, Condemnation Proceeds or
Insurance Proceeds) relating to such REO Property;
(xi) REO Extensions: to pay, out of general collections on the
Mortgage Loans and REO Properties, the cost of obtaining any REO Extension
contemplated by Section 8.19(a) in respect of any REO Property;
(xii) General Reimbursements and Indemnities: to pay itself, the
Special Servicer, the Trustee, the Fiscal Agent, or any of their respective
directors, officers, employees and agents, as the case may be, out of
general collections on the Mortgage Loans and REO Properties, pro rata
based on their respective entitlements, any amounts payable to any such
Person pursuant to any of Sections 4.8, 7.11, 8.15, 8.26 and 8.27;
(xiii) Legal Advice: to pay, out of general collections on the
Mortgage Loans and REO Properties, for (A) the cost of the Opinions of
Counsel contemplated by Sections 8.7(b)(ii), 8.19(a) and 13.13, (B) the
cost of any other Opinion of Counsel contemplated by this Agreement which
is specifically identified as an expense of the Trust and (C) the cost of
the advice of counsel contemplated by Section 8.20(a);
(xiv) Deleted Mortgage Loans: to any Seller or other appropriate
Person, with respect to each Mortgage Loan or REO Property, if any,
previously purchased or replaced by such Person pursuant to or as
contemplated by this Agreement, all amounts received on such Deleted
Mortgage Loan subsequent to the date of purchase;
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(xv) Taxes: to pay any and all federal, state and local taxes imposed
on REMIC I, REMIC II or REMIC III or on the assets or transactions of any
such REMIC Pool, together with all incidental costs and expenses, and any
and all reasonable expenses relating to tax audits, if and to the extent
that either (A) none of the Trustee, the Fiscal Agent, the Master Servicer
or the Special Servicer is liable therefor pursuant to Section 12.1(k), or
(B) any such Person that may be so liable (including any Holder of a Class
R-I, Class R-II or Class R-III Certificate) has failed to make the required
payment;
(xvi) Other Expenses of Trust: to pay to the Person entitled thereto
any amounts specified herein to be expenses of the Trust, the payment of
which is not more specifically provided for in any prior clause of this
Section 5.2(b);
(xvii) Correction of Errors: to withdraw funds deposited in the
Collection Account in error;
(xviii) Credit Lease Servicing Advances: to reimburse to the Master
Servicer amounts in accordance with Section 8.35(c); and
(xix) Clear and Terminate: to clear and terminate the Collection
Account with a termination of the Trust pursuant to Section 10.1.
The Master Servicer shall pay to or at the direction of each of the
Depositor, the Special Servicer, the Trustee and the Fiscal Agent from the
Collection Account amounts permitted to be paid therefrom to such Person (or to
third parties in respect of matters that are such Person's responsibility or
under such Person's control) promptly upon receipt of a certificate of, as
applicable, an Authorized Officer of the Depositor, a Special Servicing Officer
of the Special Servicer or a Responsible Officer of the Trustee or the Fiscal
Agent, describing the item and amount to which the Depositor, the Special
Servicer, the Trustee or the Fiscal Agent (or such third party), as the case
may be, is entitled. The Master Servicer may rely conclusively on any such
certificate and shall have no duty to re-calculate the amounts stated therein.
The Master Servicer shall keep and maintain a separate accounting for
each Mortgage Loan for the purpose of justifying any withdrawal from the
Collection Account.
SECTION 5.3. DISTRIBUTION ACCOUNT.
(a) The Trustee shall establish, on or prior to the Closing Date, and
thereafter maintain in the name of the Trustee, a segregated account (the
"DISTRIBUTION ACCOUNT") solely with respect to this Agreement, to be held in
trust for the benefit of the Holders of interests in the Trust until disbursed
pursuant to the terms of this Agreement, entitled: "LaSalle National Bank, as
trustee, in trust for the benefit of the Holders of Morgan Stanley Capital I
Inc., Commercial Mortgage Pass-Through Certificates, Series 1998-HF2,
Distribution Account." The Distribution Account shall be an Eligible Account.
(b) The Trustee shall deposit into the Distribution Account on the
Business Day received all moneys remitted by the Master Servicer pursuant to
Section 5.2(a) of this Agreement, together with (i) all P&I Advances and
Compensating Interest Payments made by the Master Servicer and (ii) any
reimbursements or indemnifications of the Trust made by any party hereto or any
other Person. Funds in the Distribution Account shall not be invested. The
Distribution Account shall be held separate
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and apart from and shall not be commingled with any other monies of or held in
trust by the Trustee, including, without limitation, other monies of the
Trustee held under this Agreement.
(c) The Trustee shall make withdrawals from the Distribution Account
only for the following purposes:
(i) to withdraw amounts deposited in the Distribution Account in error
and pay such amounts to the Persons entitled thereto;
(ii) to pay itself unpaid Trustee Fees and any other amounts owed to
it pursuant to Section 7.12 hereof;
(iii) to make distributions to the Certificateholders pursuant to
Section 6.4; and
(iv) to clear and terminate the Distribution Account in connection
with a termination of the Trust pursuant to Section 10.1.
SECTION 5.3.1. EXCESS INTEREST DISTRIBUTION ACCOUNT.
(a) The Trustee shall establish, on or prior to the Closing Date, and
thereafter maintain in the name of the Trustee, a segregated account (the
"Excess Interest Distribution Account") solely with respect to this Agreement,
to be held in trust for the benefit of the Holders of beneficial interests in
the grantor trust described in Section 12.1(a) hereof, until disbursed pursuant
to the terms of this Agreement, entitled "LaSalle National Bank, as trustee, in
trust for the benefit of the Holders of Morgan Stanley Capital I Inc.,
Commercial Mortgage Pass-Through Certificates, Series 1998-HF2, Class N, Excess
Interest Distribution Account." The Excess Interest Distribution Account shall
be an Eligible Account.
(b) The Trustee shall deposit into the Excess Interest Distribution
Account on the Business Day received all moneys received by it from the Master
Servicer or Special Servicer as Excess Interest. The Trustee shall hold
uninvested any funds in the Excess Interest Distribution Account, and shall
hold the Excess Interest Distribution Account separate and apart from, and
shall not commingle any monies thereof with, any other monies of or held in
trust by the Trustee, including, without limitation, other monies of the
Trustee held under this Agreement.
(c) The Trustee shall make withdrawals from the Excess Interest
Distribution Account only for the following purposes:
(i) to withdraw amounts deposited in the Excess Interest Distribution
Account in error and to pay such amounts to the Persons entitled thereto;
(ii) to make distributions to the Class N Certificateholders pursuant
to Section 6.4.1, and
(iii) to clear and terminate the Excess Interest Distribution Account
in connection with a termination of the Trust pursuant to Section 10.1.
SECTION 5.4. TRUSTEE REPORTS; ACCESS TO INFORMATION.
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(a) Based on (and to the extent of the information contained in) the
Master Servicer Remittance Report and the report pursuant to Section 8.14(a)
provided to the Trustee by the Master Servicer (no later than the Report Date),
on each Distribution Date, the Trustee shall deliver or cause to be sent by
first class mail (or such other medium as the Depositor shall reasonably
request, the incremental cost of which shall be paid in advance by the
recipient thereof), to each Certificateholder, the Rating Agencies, the Master
Servicer, the Special Servicer, the Underwriters, the Depositor, Heller and the
Operating Adviser (or if no Operating Adviser has been elected, then the
Majority Certificateholder of the Controlling Class), and, upon request and
written certification as to its beneficial ownership interest in the Book-Entry
Certificates, to any Certificate Owner: (i) a Monthly Certificateholder Report
(substantially in the form of Exhibit G-1); and (ii) a report containing
information regarding the Mortgage Loans as of the end of the related
Collection Period, which report will contain substantially the categories of
information regarding the Mortgage Loans set forth in Appendix I and Appendix
II to the Prospectus Supplement and will be presented in a tabular format
substantially similar to the format utilized in such Appendix I and Appendix
II. The report referred to in clause (ii) of the preceding sentence shall be
updated from time to time within a reasonable period after the requisite
information is available. The Trustee shall be entitled, in the absence of
manifest error, to conclusively rely on any such information provided to it by
the Master Servicer or the Special Servicer and shall have no obligation to
verify any such information.
(b) The Trustee shall provide or cause to be provided to the
Depositor, the Master Servicer and the Special Servicer, and to the OTS, the
FDIC, and any other federal or state banking or insurance regulatory authority
that may exercise authority over any Certificateholder, access to the Mortgage
Files and any other documentation regarding the Mortgage Loans and the Trust
Fund within its control that may be required by this Agreement or by applicable
law. Such access shall be afforded without charge but only upon reasonable
prior written request and during normal business hours at the offices of the
Trustee designated by it.
(c) Within a reasonable period of time after the end of each calendar
year, the Trustee shall send to each Person who at any time during the calendar
year was a Certificateholder of record, a report summarizing the items
specified in clauses (i), (ii) and (x) of the definition of Monthly
Certificateholder Report and provided to Certificateholders pursuant to this
Section 5.4, aggregated for such calendar year or the applicable portion
thereof during which such Person was a Certificateholder, together with such
other customary information as the Trustee deems may be necessary or desirable
for such Certificateholders to prepare their federal income tax returns.
(d) The Trustee shall make available to Persons with an account number
on the Trustee's ASAP (Automatic Statements Accessed by Phone) System (or a
similar system), the reports described in Section 5.4(a) and a summary report
of Certificate Factors via automated facsimile. The Trustee shall make
available, upon request, to Certificateholders, Certificate Owners identified
to the Trustee in accordance with subsection (g) below, the Depositor, the
Underwriters, the Master Servicer, the Rating Agencies and the Special Servicer
account numbers on the Trustee's ASAP System (or a similar system). In
addition, if the Depositor so directs the Trustee and on terms acceptable to
the Trustee, the Trustee shall make available through its electronic bulletin
board system, on a confidential basis, such information related to the Mortgage
Loans as the Depositor may reasonably request. A directory has been set up on
the bulletin board in which an electronic file is stored containing monthly
servicer data. All files shall be password protected. Passwords to each file
shall be released by the Trustee, upon request, to Certificateholders,
Certificate Owners identified to the Trustee in accordance with subsection (g)
below, the Depositor, the Underwriters, the Master Servicer, the Rating
Agencies and the Special Servicer. The Trustee also maintains a site on the
World Wide Web at WWW.LNBABS.COM at which certain of the above information will
be available.
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(e) The Trustee shall make available at its Corporate Trust Office,
during normal business hours, upon reasonable advance written notice for review
by any Certificateholder, any Certificate Owner, any Prospective Investor, the
Underwriters, each Rating Agency, the Operating Adviser (or if no Operating
Adviser has been elected, the Majority Certificateholder of the Controlling
Class) and the Depositor, originals or copies of, among other things, the
following items: (i) this Agreement, the Mortgage Loan Purchase Agreements and
any amendments thereto, to the extent such items are in the Trustee's
possession, (ii) all Monthly Certificateholder Reports and reports pursuant to
Section 5.4(a)(ii) delivered by the Trustee to Certificateholders since the
Closing Date and all Operating Statement Analyses, reports pursuant to Section
8.14(a), and Master Servicer Remittance Reports received by the Trustee from
the Master Servicer since the Closing Date, (iii) all Officer's Certificates
delivered to the Trustee since the Closing Date pursuant to Section 8.12, (iv)
all accountants' reports delivered to the Trustee since the Closing Date
pursuant to Section 8.13, (v) the most recent property inspection reports in
the possession of the Trustee in respect of each Mortgaged Property and REO
Property, (vi) the most recent Mortgaged Property/REO Property annual operating
statement and rent roll, if any, collected or otherwise obtained by or on
behalf of the Master Servicer or the Special Servicer and delivered to the
Trustee, (vii) any and all modifications, waivers and amendments of the terms
of a Mortgage Loan entered into by the Master Servicer and/or the Special
Servicer and delivered to the Trustee, (viii) any and all Officer's
Certificates (and attachments thereto) delivered to or retained by the Trustee
to support any of its, the Fiscal Agent's, the Special Servicer's or the Master
Servicer's determination that any Advance was not or, if made, would not be,
recoverable, (ix) any reports delivered by the Special Servicer to the Trustee
pursuant to Section 8.7(e), and (x) copies of the Prospectus Supplement and the
Memorandum, as such may have been amended or supplemented from time to time and
delivered to the Trustee. Copies (or computer diskettes or other digital or
electronic copies of such information if reasonably available in lieu of paper
copies) of any and all of the foregoing items shall be made available by the
Trustee upon request; provided, however, that the Trustee shall be permitted to
require payment by the requesting party (other than the Depositor, the
Underwriters or either Rating Agency) of a sum sufficient to cover the
reasonable expenses actually incurred by the Trustee of providing access or
copies (including electronic or digital copies) of any such information
requested in accordance with the preceding sentence.
(f) The Trustee shall afford the Underwriters, the Rating Agencies,
the Depositor, the Fiscal Agent, the Master Servicer, the Special Servicer, the
Operating Adviser, any Certificateholder, any Certificate Owner and any
Prospective Investor, upon reasonable notice and during normal business hours,
reasonable access to all relevant, non-attorney-client-privileged records and
documentation, including without limitation information delivered by the Master
Servicer or the Special Servicer to the Trustee pursuant to Section 8.16,
regarding the Mortgage Loans, any REO Properties and all other relevant matters
relating to this Agreement, and access to Responsible Officers of the Trustee.
Copies (or computer diskettes or other digital or electronic copies of such
information if reasonably available in lieu of paper copies) of any and all of
the foregoing items shall be made available by the Trustee upon request;
provided, however, that the Trustee shall be permitted to require payment by
the requesting party (other than the Depositor, the Master Servicer, the
Special Servicer, the Underwriters or either Rating Agency) of a sum sufficient
to cover the reasonable expenses actually incurred by the Trustee of providing
access or copies (including electronic or digital copies) of any such
information requested in accordance with the preceding sentence.
(g) In connection with providing access to or copies of the items
described in subsections (d), (e) and (f) of this Section 5.4, the Trustee may
require (a) in the case of Certificate Owners, a written confirmation executed
by the requesting Person, in form reasonably satisfactory to the Trustee,
generally to the effect that such Person is a beneficial holder of
Certificates, is requesting the information solely for use in evaluating such
Person's investment in the Certificates and will otherwise
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keep such information confidential and (b) in the case of Prospective
Investors, a written confirmation executed by the requesting Person, in form
reasonably satisfactory to the Trustee, generally to the effect that such
Person is a prospective purchaser of a Certificate or a beneficial ownership
interest therein, is requesting the information solely for use in evaluating a
possible investment in Certificates and will otherwise keep such information
confidential. All Certificateholders, by the acceptance of their Certificates,
shall be deemed to have agreed to keep such information confidential.
Notwithstanding the foregoing provisions of this Section 5.4(g), the Trustee
shall have no responsibility for the accuracy, completeness or sufficiency for
any purpose of any information so made available or furnished by it pursuant to
subsections (d), (e) and (f) of this Section 5.4.
(h) On each Distribution Date, except as described below, the Trustee
shall deliver or shall cause to be delivered by first class mail to each
Certificateholder, each prospective investor in a Certificate (upon request),
Certificate Owner (if known), the Depositor, each Underwriter and each Rating
Agency a copy of the Comparative Financial Status Report, the Delinquent Loan
Status Report, the Historical Loss Estimate Report, the Historical Loan
Modification Report, the REO Status Report and a Watch List (indicating those
Mortgage Loans that the Master Servicer has determined are in jeopardy of
becoming Specially Serviced Mortgage Loans) provided by the Master Servicer to
the Trustee pursuant to Section 8.14(c) and 8.14(e) on the Master Servicer
Remittance Date. The information that pertains to Specially Serviced Mortgage
Loans and REO Properties reflected in such reports shall be based solely upon
the reports delivered by the Special Servicer to the Master Servicer at least
two Business Days prior to the related Master Servicer Remittance Date. Absent
manifest error, (i) none of the Master Servicer, the Special Servicer or the
Trustee shall be responsible for the accuracy or completeness of any
information supplied to it by a Mortgagor or third party that is included in
any reports, statements, materials or information prepared or provided by the
Master Servicer, the Special Servicer or the Trustee, as applicable, (ii) the
Trustee shall not be responsible for the accuracy or completeness of any
information supplied to it by the Master Servicer or Special Servicer that is
included in any reports, statements, materials or information prepared or
provided by the Master Servicer or Special Servicer, as applicable, and (iii)
the Trustee shall be entitled to conclusively rely upon the Master Servicer's
reports and the Special Servicer's reports without any duty or obligation to
recompute, verify or re-evaluate any of the amounts or other information stated
therein.
The information contained in the reports in the preceding paragraph of
this Section 5.4(h) shall be made available to the Trustee and the Rating
Agencies electronically by the Master Servicer in the form of the standard CSSA
loan file and CSSA property file, and the Trustee will in lieu of mailing such
reports as described in such preceding paragraph make such reports available
electronically in such form to Certificateholders using the media mutually
agreed upon by the Trustee, each Underwriter and the Depositor; provided,
however, that the Trustee will continue to provide Certificateholders with a
written copy of such reports upon request in the manner described in such
preceding paragraph.
The Trustee shall deliver a copy of each Operating Statement Analysis
report and NOI Adjustment Worksheet that it receives from the Master Servicer
and Special Servicer to the Depositor, each Underwriter and each Rating Agency
promptly after its receipt thereof. Upon request, the Trustee shall make such
reports available to the Certificateholders and the Special Servicer. Upon
request, the Trustee shall also make available to any potential investor in the
Certificates any NOI Adjustment Worksheet for a Mortgaged Property or REO
Property in the possession of the Trustee.
SECTION 5.5. TRUSTEE TAX REPORTS. The Trustee shall perform all
reporting and other tax compliance duties that are the responsibility of each
REMIC Pool and of the grantor trust under the Code, the REMIC Provisions, or
other compliance guidance issued by the Internal Revenue Service
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or any state or local taxing authority. Consistent with this Agreement, the
Trustee shall provide (i) to the Internal Revenue Service or other Persons
(including, but not limited to, any Person that has transferred a Residual
Certificate to a Disqualified Organization or to an agent that has acquired a
Residual Certificate on behalf of a Disqualified Organization) such information
as is necessary for the application of any tax relating to the transfer of a
Residual Certificate to any Disqualified Organization and (ii) to the
Certificateholders such information or reports as are required by the Code or
REMIC Provisions. The Master Servicer shall on a timely basis provide the
Trustee with such information concerning the Mortgage Loans as is necessary for
the preparation of the tax or information returns or receipts of each REMIC
Pool as the Trustee may reasonably request from time to time. The Special
Servicer is required to provide to the Master Servicer all information in its
possession with respect to the Specially Serviced Mortgage Loans and REO
Properties in order for the Master Servicer to comply with its obligations
under this Section 5.5. The Trustee shall be entitled, in the absence of
manifest error, to conclusively rely on any such information provided to it by
the Master Servicer or the Special Servicer and shall have no obligation to
verify any such information.
ARTICLE VI.
DISTRIBUTIONS
SECTION 6.1. DISTRIBUTIONS GENERALLY.
(a) All distributions made with respect to each Class on each
Distribution Date shall be allocated pro rata among the outstanding
Certificates in such Class based on their respective Percentage Interests.
Except as otherwise provided below, all such distributions with respect to each
Class on each Distribution Date shall be made to the Certificateholders of the
respective Class of record at the close of business on the related Record Date
and shall be made by wire transfer of immediately available funds to the
account of any such Certificateholder at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Trustee with wiring instructions on or before the related Record Date
(which wiring instructions may be in the form of a standing order applicable to
all subsequent Distribution Dates) or otherwise by check mailed to the address
of such Certificateholder as it appears in the Certificate Register. The final
distribution on each Certificate (determined without regard to any possible
future reimbursement of any Realized Loss or Expense Loss previously allocated
to such Certificate) will be made in like manner, but only upon presentation
and surrender of such Certificate at the offices of the Certificate Registrar
or such other location specified in the notice to Certificateholders of such
final distribution. Any distribution that is to be made with respect to a
Certificate in reimbursement of a Realized Loss or Expense Loss previously
allocated thereto, which reimbursement is to occur after the date on which such
Certificate is surrendered as contemplated by the preceding sentence, will be
made by check mailed to the address of the Certificateholder that surrendered
such Certificate at such address as last appeared in the Certificate Registrar
or to any other address of which the Trustee was subsequently notified in
writing.
(b) Each distribution with respect to a Book-Entry Certificate shall
be paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of
its Participants in accordance with its normal procedures. Each Participant
shall be responsible for disbursing such distribution to the Certificate Owners
that it represents and to each Indirect Participant for which it acts as agent.
Each Participant and Indirect Participant shall be responsible for disbursing
funds to the Certificate Owners that it represents. None of the Trustee, the
Certificate Registrar, the Depositor, the Master Servicer or the Special
Servicer shall have any responsibility therefor except as otherwise provided by
this Agreement or applicable law.
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(c) The rights of the Certificateholders to receive distributions from
the proceeds of the Trust Fund in respect of their Certificates, and all rights
and interests of the Certificateholders in and to such distributions, shall be
as set forth in this Agreement. Neither the Holders of any Class of
Certificates nor any party hereto shall in any way be responsible or liable to
the Holders of any other Class of Certificates in respect of amounts properly
previously distributed on the Certificates. Distributions in reimbursement of
Realized Losses and Expense Losses previously allocated to a Class of
Certificates shall not constitute distributions of principal and shall not
result in a reduction of the related Class Principal Balance.
SECTION 6.2. REMIC I.
(a) On each Distribution Date, the Trustee shall be deemed to apply
the Available Distribution Amount (excluding any amounts attributable to
Prepayment Premiums) as is attributable to each Mortgage Loan for such date for
the following purposes and in the following order of priority:
(i) to pay interest to REMIC II in respect of each REMIC I Regular
Interest, up to an amount equal to, and pro rata in accordance with, all
Uncertificated Distributable Interest (excluding amounts attributable to
Prepayment Premiums) for each such REMIC I Regular Interest for such
Distribution Date;
(ii) to pay principal to REMIC II in respect of each REMIC I Regular
Interest, up to an amount equal to, and pro rata in accordance with, the
excess, if any, of the Uncertificated Principal Balance of such REMIC I
Regular Interest outstanding immediately prior to such Distribution Date,
over the Stated Principal Balance of the related Mortgage Loan (including
without limitation an REO Mortgage Loan or, if applicable, a Qualifying
Substitute Mortgage Loan) that will be outstanding immediately following
such Distribution Date;
(iii) to reimburse REMIC II for any Realized Losses and Expense Losses
previously deemed allocated to the various REMIC I Regular Interests (with
interest), up to an amount equal to, and pro rata in accordance with, the
Loss Reimbursement Amount for each such REMIC I Regular Interest for such
Distribution Date; and
(iv) to the Holders of the Class R-I Certificates that portion, if
any, of the Available Distribution Amount (excluding amounts attributable
to Prepayment Premiums) for such date that has not otherwise been deemed
paid to REMIC II in respect of the REMIC I Regular Interests pursuant to
this Section 6.2(a).
(b) On each Distribution Date, the Trustee shall be deemed to apply
each Prepayment Premium then on deposit in the Distribution Account and
received during or prior to the related Collection Period, to pay additional
interest to REMIC II in respect of the REMIC I Regular Interest that relates to
the Mortgage Loan (including without limitation an REO Mortgage Loan or, if
applicable, a Replacement Mortgage Loan) as to which such Prepayment Premium
was received.
(c) All amounts (other than additional interest in the form of
Prepayment Premiums) deemed paid to REMIC II in respect of the REMIC I Regular
Interests pursuant to this Section 6.2 on any Distribution Date is herein
referred to as the "REMIC II DISTRIBUTION AMOUNT" for such date.
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SECTION 6.3. REMIC II.
(a) It is the intention of the parties hereto that the distributions
set forth below result in the Certificate Principal Balances of each Class of
REMIC II Regular Interests and its corresponding Class of Certificates being
equal. On each Distribution Date, the Trustee shall be deemed to apply the
REMIC II Distribution Amount for such date for the following purposes and in
the following order of priority:
(i) to distributions of interest to REMIC III in respect of REMIC II
Regular Interest A-1 and REMIC II Regular Interest A-2, up to an amount
equal to (and pro rata in accordance with) all Uncertificated Distributable
Interest on such REMIC II Regular Interests for such Distribution Date;
(ii) to distributions of principal in respect of first, REMIC II
Regular Interest A-1, and second, REMIC II Regular Interest A-2, in each
case up to an amount equal to the lesser of (1) the then outstanding
Uncertificated Principal Balance of such Class and (2) the remaining
portion, if any, of such REMIC II Distribution Amount;
(iii) to reimburse REMIC III for any Realized Losses and Expense
Losses previously deemed allocated to REMIC II Regular Interest A-1 and
REMIC II Regular Interest A-2 (with interest), up to an amount equal to
(and pro rata in accordance with) the Loss Reimbursement Amount in respect
of such REMIC II Regular Interest for such Distribution Date;
(iv) to distributions of interest to REMIC III in respect of REMIC II
Regular Interest B, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
(v) to distributions of principal in respect of REMIC II Regular
Interest B, until the Uncertificated Principal Balance thereof is reduced
to zero;
(vi) to reimburse REMIC III for any Realized Losses and Expense Losses
previously deemed allocated to REMIC II Regular Interest B (with interest),
up to an amount equal to the Loss Reimbursement Amount in respect of such
REMIC II Regular Interest for such Distribution Date;
(vii) to distributions of interest to REMIC III in respect of REMIC II
Regular Interest C, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
(viii) to distributions of principal in respect of REMIC II Regular
Interest C, until the Uncertificated Principal Balance thereof is reduced
to zero;
(ix) to reimburse REMIC III for any Realized Losses and Expense Losses
previously deemed allocated to REMIC II Regular Interest C (with interest),
up to an amount equal to the Loss Reimbursement Amount in respect of such
REMIC II Regular Interest for such Distribution Date;
(x) to distributions of interest to REMIC III in respect of REMIC II
Regular Interest D, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
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(xi) to distributions of principal in respect of REMIC II Regular
Interest D, until the Uncertificated Principal Balance thereof is reduced
to zero;
(xii) to reimburse REMIC III for any Realized Losses and Expense
Losses previously deemed allocated to REMIC II Regular Interest D (with
interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such REMIC II Regular Interest for such Distribution Date;
(xiii) to distributions of interest to REMIC III in respect of REMIC
II Regular Interest E, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
(xiv) to distributions of principal in respect of REMIC II Regular
Interest E, until the Uncertificated Principal Balance thereof is reduced
to zero;
(xv) to reimburse REMIC III for any Realized Losses and Expense
Losses previously deemed allocated to REMIC II Regular Interest E (with
interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such REMIC II Regular Interest for such Distribution Date;
(xvi) to distributions of interest to REMIC III in respect of REMIC
II Regular Interest F, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
(xvii) to distributions of principal in respect of REMIC II Regular
Interest F, until the Uncertificated Principal Balance thereof is reduced
to zero;
(xviii) to reimburse REMIC III for any Realized Losses and Expense
Losses previously deemed allocated to REMIC II Regular Interest F (with
interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such REMIC II Regular Interest for such Distribution Date;
(xix) to distributions of interest to REMIC III in respect of REMIC II
Regular Interest G, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
(xx) to distributions of principal in respect of REMIC II Regular
Interest G, until the Uncertificated Principal Balance thereof is reduced
to zero;
(xxi) to reimburse REMIC III for any Realized Losses and Expense
Losses previously deemed allocated to REMIC II Regular Interest G (with
interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such REMIC II Regular Interest for such Distribution Date;
(xxii) to distributions of interest to REMIC III in respect of REMIC
II Regular Interest H, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
(xxiii) to distributions of principal in respect of REMIC II Regular
Interest H, until the Uncertificated Principal Balance thereof is reduced
to zero;
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(xxiv) to reimburse REMIC III for any Realized Losses and Expense
Losses previously deemed allocated to REMIC II Regular Interest H (with
interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such REMIC II Regular Interest for such Distribution Date;
(xxv) to distributions of interest to REMIC III in respect of REMIC II
Regular Interest J, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
(xxvi) to distributions of principal in respect of REMIC II Regular
Interest J, until the Uncertificated Principal Balance thereof is reduced
to zero;
(xxvii) to reimburse REMIC III for any Realized Losses and Expense
Losses previously deemed allocated to REMIC II Regular Interest J (with
interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such REMIC II Regular Interest for such Distribution Date;
(xxviii) to distributions of interest to REMIC III in respect of REMIC
II Regular Interest K, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
(xxix) to distributions of principal in respect of REMIC II Regular
Interest K, until the Uncertificated Principal Balance thereof is reduced
to zero;
(xxx) to reimburse REMIC III for any Realized Losses and Expense
Losses previously deemed allocated to REMIC II Regular Interest K (with
interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such REMIC II Regular Interest for such Distribution Date; and
(xxxi) to distributions of interest to REMIC III in respect of REMIC
II Regular Interest L, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
(xxxii) to distributions of principal in respect of REMIC II Regular
Interest L, until the Uncertificated Principal Balance thereof is reduced
to zero;
(xxxiii) to reimburse REMIC III for any Realized Losses and Expense
Losses previously deemed allocated to REMIC II Regular Interest L (with
interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such REMIC II Regular Interest for such Distribution Date;
(xxxix) to distributions of interest to REMIC III in respect of REMIC
II Regular Interest M, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
(xxxv) to distributions of principal in respect of REMIC II Regular
Interest M, until the Uncertificated Principal Balance thereof is reduced
to zero;
(xxxvi) to reimburse REMIC III for any Realized Losses and Expense
Losses previously deemed allocated to REMIC II Regular Interest M (with
interest), up to an amount
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equal to the Loss Reimbursement Amount in respect of such REMIC II Regular
Interest for such Distribution Date;
(xxxvii) to distributions of interest to REMIC III in respect of REMIC
II Regular Interest N, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
(xxxviii) to distributions of principal in respect of REMIC II Regular
Interest N, until the Uncertificated Principal Balance thereof is reduced
to zero;
(xxxix) to reimburse REMIC III for any Realized Losses and Expense
Losses previously deemed allocated to REMIC II Regular Interest N (with
interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such REMIC II Regular Interest for such Distribution Date;
(b) On each Distribution Date, the Trustee shall be deemed to apply
all Prepayment Premiums then on deposit in the Distribution Account and
received during or prior to the related Collection Period, to pay additional
interest to REMIC III in respect of the REMIC II Regular Interests.
(c) All amounts (other than additional interest in the form of
Prepayment Premiums) deemed paid to REMIC III in respect of the REMIC II
Regular Interests pursuant to this Section 6.3 on any Distribution Date is
herein referred to as the "REMIC III DISTRIBUTION AMOUNT" for such date.
SECTION 6.4. REMIC III.
(a) On each Distribution Date, following the deemed payments to REMIC
III in respect of the REMIC II Regular Interests on such date pursuant to
Section 6.3, the Trustee shall withdraw from the Distribution Account the REMIC
III Distribution Amount for such Distribution Date and shall apply such amount
for the following purposes and in the following order of priority:
(i) to pay interest to the Holders of the respective Classes of Senior
Certificates, in an amount equal to, and pro rata in accordance with, all
Distributable Certificate Interest in respect of each such Class of
Certificates for such Distribution Date,
(ii) to pay principal from the Principal Distribution Amount for such
Distribution Date, first to the Holders of the Class A-1 Certificates and,
second to the Holders of the Class A-2 Certificates in each case, up to an
amount equal to the lesser of (1) the then-outstanding Class Principal
Balance of such Class and (2) the remaining portion, if any, of such
Principal Distribution Amount;
(iii) to reimburse the Holders of the respective Classes of Class A
Certificates for any Realized Losses and Expense Losses previously deemed
allocated to such Classes of Certificates (with interest), up to an amount
equal to, and pro rata as among such Classes in accordance with, the
respective Loss Reimbursement Amounts in respect of such Classes of
Certificates for such Distribution Date; and
(iv) to make payments on the Subordinate and Residual Certificates as
provided below;
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provided that, on each Distribution Date after the aggregate of the Class
Principal Balances of the Subordinate Certificates has been reduced to zero,
and in any event on the final Distribution Date in connection with a
termination of the Trust described in Article X hereof, the payments of
principal to be made pursuant to clause (ii) above, will be so made to the
Holders of the respective Classes of Class A Certificates, up to an amount
equal to, and pro rata as among such Classes in accordance with, the respective
then outstanding Class Principal Balance of such Certificates for such
Distribution Date and without regard to the Principal Distribution Amounts for
such date;
(b) On each Distribution Date, following the foregoing series of
payments on the Senior Certificates, the Trustee shall apply the remaining
portion, if any, of the REMIC III Distribution Amount for such date for the
following purposes and in the following order of priority:
(i) to pay interest to the Holders of the Class B Certificates, up to
an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
(ii) if the Class Principal Balances of the Class A Certificates have
been reduced to zero, to pay principal to the Holders of the Class B
Certificates, up to an amount equal to the lesser of (A) the
then-outstanding Class Principal Balance of such Class of Certificates and
(B) the remaining Principal Distribution Amount for such Distribution Date;
(iii) to reimburse the Holders of the Class B Certificates for
Realized Losses and Expense Losses, if any, previously deemed allocated to
such Class of Certificates (with interest), up to an amount equal to the
Loss Reimbursement Amount in respect of such Class of Certificates for such
Distribution Date;
(iv) to pay interest to the Holders of the Class C Certificates, up to
an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
(v) if the Class Principal Balances of the Class A and Class B
Certificates have been reduced to zero, to pay principal to the Holders of
the Class C Certificates, up to an amount equal to the lesser of (A) the
then-outstanding Class Principal Balance of such Class of Certificates and
(B) the remaining Principal Distribution Amount for such Distribution Date;
(vi) to reimburse the Holders of the Class C Certificates for any
Realized Losses and Expenses Losses previously deemed allocated to such
Class of Certificates (with interest), up to an amount equal to the Loss
Reimbursement Amount in respect of such Class of Certificates for such
Distribution Date;
(vii) to pay interest to the Holders of the Class D Certificates, up
to an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
(viii) if the Class Principal Balances of the Class A, Class B and
Class C Certificates have been reduced to zero, to pay principal to the
Holders of the Class D Certificates, up to an amount equal to the lesser of
(A) the then-outstanding Class Principal Balance of such Class of
Certificates and (B) the remaining Principal Distribution Amount for such
Distribution Date;
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(ix) to reimburse the Holders of the Class D Certificates for any
Realized Losses and Expense Losses previously deemed allocated to such
Class of Certificates (with interest), up to an amount equal to the Loss
Reimbursement Amount in respect of such Class of Certificates for such
Distribution Date;
(x) to pay interest to the Holders of the Class E Certificates, up to
an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
(xi) if the Class Principal Balances of the Class A, Class B, Class C
and Class D Certificates have been reduced to zero, to pay principal to the
Holders of the Class E Certificates, up to an amount equal to the lesser of
(A) the then-outstanding Class Principal Balance of such Class of
Certificates and (B) the remaining Principal Distribution Amount for such
Distribution Date;
(xii) to reimburse the Holders of the Class E Certificates for any
Realized Losses and Expense Losses previously deemed allocated to such
Class of Certificates (with interest), up to an amount equal to the Loss
Reimbursement Amount in respect of such Class of Certificates for such
Distribution Date;
(xiii) to pay interest to the Holders of the Class F Certificates, up
to an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
(xiv) if the Class Principal Balances of the Class A, Class B, Class
C, Class D and Class E Certificates have been reduced to zero, to pay
principal to the Holders of the Class F Certificates, up to an amount equal
to the lesser of (A) the then-outstanding Class Principal Balance of such
Class of Certificates and (B) the remaining Principal Distribution Amount
for such Distribution Date;
(xv) to reimburse the Holders of the Class F Certificates for any
Realized Losses and Expense Losses previously deemed allocated to such
Class of Certificates (with interest), up to an amount equal to the Loss
Reimbursement Amount in respect of such Class of Certificates for such
Distribution Date;
(xvi) to pay interest to the Holders of the Class G Certificates, up
to an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
(xvii) if the Class Principal Balances of the Class A, Class B, Class
C, Class D, Class E and Class F Certificates have been reduced to zero, to
pay principal to the Holders of the Class G Certificates, up to an amount
equal to the lesser of (A) the then-outstanding Class Principal Balance of
such Class of Certificates and (B) the remaining Principal Distribution
Amount for such Distribution Date;
(xviii) to reimburse the Holders of the Class G Certificates for any
Realized Losses and Expense Losses previously deemed allocated to such
Class of Certificates (with interest), up to an amount equal to the Loss
Reimbursement Amount in respect of such Class of Certificates for such
Distribution Date;
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(xix) to pay interest to the Holders of the Class H Certificates, up
to an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
(xx) if the Class Principal Balances of the Class A, Class B, Class C,
Class D, Class E, Class F and Class G Certificates have been reduced to
zero, to pay principal to the Holders of the Class H Certificates, up to an
amount equal to the lesser of (A) the then-outstanding Class Principal
Balance of such Class of Certificates and (B) the remaining Principal
Distribution Amount for such Distribution Date;
(xxi) to reimburse the Holders of the Class H Certificates for any
Realized Losses and Expense Losses previously deemed allocated to such
Class of Certificates (with interest), up to an amount equal to the Loss
Reimbursement Amount in respect of such Class of Certificates for such
Distribution Date;
(xxii) to pay interest to the Holders of the Class J Certificates, up
to an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
(xxiii) if the Class Principal Balances of the Class A, Class B, Class
C, Class D, Class E, Class F, Class G and Class H Certificates have been
reduced to zero, to pay principal to the Holders of the Class J
Certificates, up to an amount equal to the lesser of (A) the
then-outstanding Class Principal Balance of such Class of Certificates and
(B) the remaining Principal Distribution Amount for such Distribution Date;
(xxiv) to reimburse the Holders of the Class J Certificates for any
Realized Losses and Expense Losses previously deemed allocated to such
Class of Certificates (with interest), up to an amount equal to the Loss
Reimbursement Amount in respect of such Class of Certificates for such
Distribution Date;
(xxv) to pay interest to the Holders of the Class K Certificates, up
to an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificate for such Distribution Date;
(xxvi) if the Class Principal Balances of the Class A, Class B, Class
C, Class D, Class E, Class F, Class G, Class H and Class J Certificates
have been reduced to zero, to pay principal to the Holders of the Class K
Certificates, up to an amount equal to the lesser of (A) the
then-outstanding Class Principal Balance of such Class of Certificates and
(B) the remaining Principal Distribution Amount for such Distribution Date;
(xxvii) to reimburse the Holders of the Class K Certificates for any
Realized Losses and Expense Losses previously deemed allocated to such
Class of Certificates (with interest), up to an amount equal to the Loss
Reimbursement Amount in respect of such Class of Certificates for such
Distribution Date;
(xxviii) to pay interest to the Holders of the Class L Certificates,
up to an amount equal to all Distributable Certificate Interest in respect
of such Class of Certificate for such Distribution Date;
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(xxix) if the Class Principal Balances of the Class A, Class B, Class
C, Class D, Class E, Class F, Class G, Class H, Class J and Class K
Certificates have been reduced to zero, to pay principal to the Holders of
the Class L Certificates, up to an amount equal to the lesser of (A) the
then outstanding Class Principal Balance of such Class of Certificates and
(B) the remaining Principal Distribution Amount for such Distribution Date;
(xxx) to reimburse the Holders of the Class L Certificates for any
Realized Losses and Expense Losses previously deemed allocated to such
Class of Certificates (with interest), up to an amount equal to the Loss
Reimbursement Amount in respect of such Class of Certificates for such
Distribution Date; and
(xxxi) to pay interest to the Holders of the class M Certificates up
to an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificate for such Distribution Date;
(xxxii) if the Class Principal Balances of the Class A, Class B, Class
C, Class D, Class E, Class F, Class G, Class H, Class J, Class K and Class
L Certificates have been reduced to zero, to pay principal to the Holders
to the Class M Certificates, up to an amount equal to the lesser of (A) the
then outstanding Class Principal Balance of such class of Certificates and
(B) the remaining Principal Distribution Amount for such Distribution Date;
(xxxiii) to reimburse the holders of the Class M Certificates for any
Realized Losses previously deemed allocated to such Class of Certificates
(with interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such Class of Certificates for such Distribution Date;
(xxxiv) to pay interest to the Holders of the Class N Certificates up
to an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificate for such Distribution Date;
(xxxv) if the Class Principal Balances of the Class A, Class B, Class
C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L
and Class M Certificates have been reduced to zero, to pay principal to the
Holders to the Class N Certificates, up to an amount equal to the lesser of
(A) the then outstanding Class Principal Balance of such class of
Certificates and (B) the remaining Principal Distribution Amount for such
Distribution Date;
(xxxvi) to reimburse the holders of the Class N Certificates for any
Realized Losses previously deemed allocated to such Class of Certificates
(with interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such Class of Certificates for such Distribution Date;
(xxxvii) to pay to the Holders of the Class R-III Certificates the
balance, if any, of the REMIC III Distribution Amount for such Distribution
Date.
(c) On each Distribution Date, the Trustee shall withdraw any amounts
then on deposit in the Distribution Account that represent Prepayment Premiums
collected in respect of Mortgage Loans during or prior to the related
Collection Period and shall distribute such amounts, in each case, subject to
available funds, as additional interest, to the Holders of the respective
Classes of Principal Balance Certificates (other than the Class F, G, H, J, K,
L, M, and N Certificates) then entitled to distributions of principal from the
Principal Distribution Amount for such Distribution Date an aggregate
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amount (allocable among such Classes, if more than one, as described below)
equal to the lesser of (i) such Prepayment Premium and (ii) such Prepayment
Premium multiplied by a fraction, the numerator of which is equal to the
excess, if any, of the Pass-Through Rate applicable to the most senior of such
Classes of Certificates then outstanding (or, in the case of the Class A
Certificates, the one with the earlier payment priority), over the relevant
Discount Rate (as defined below), and the denominator of which is equal to the
excess, if any, of the Mortgage Rate for the prepaid Mortgage Loan, over the
relevant Discount Rate. If there is more than one Class of Principal Balance
Certificates entitled to distributions of principal from the Principal
Distribution Amount for such Distribution Date, the aggregate amount described
in the preceding sentence shall be allocated among such Classes on a pro rata
basis in accordance with the relative amounts of such distributions of
principal. Any portion of such Prepayment Premium that is not so distributed to
the Holders of such Principal Balance Certificates will be distributed to the
Holders of the Class X Certificates.
For purposes of the foregoing, the "DISCOUNT RATE" is the rate which,
when compounded monthly, is equivalent to the Treasury Rate when compounded
semi-annually. The "TREASURY RATE" is the yield calculated by the linear
interpolation of the yields, as reported in Federal Reserve Statistical Release
H.15--Selected Interest Rates under the heading "U.S. government
securities/Treasury constant maturities" for the week ending prior to the date
of the relevant principal prepayment, of U.S. Treasury constant maturities with
a maturity date (one longer and one shorter) most nearly approximating the
maturity date (or the Hyper-Amortization Date, if applicable) of the Mortgage
Loan prepaid. If Release H.15 is no longer published, the Trustee shall select
a comparable publication to determine the Treasury Rate.
(d) All of the foregoing distributions to be made from the
Distribution Account on any Distribution Date with respect to the REMIC III
Certificates shall be deemed made from the payments deemed made to REMIC III in
respect of the REMIC II Regular Interests on such Distribution Date pursuant to
Section 6.3.
SECTION 6.4.1. GRANTOR TRUST.
(a) On each Distribution Date, the Trustee shall withdraw from the
Excess Interest Distribution Account the amount on deposit therein, and shall
pay such amount to the Holders of the Class N Certificates in respect of their
beneficial ownership interest in the assets of the grantor trust, pro rata in
accordance with their respective Percentage Interests. Such distributions shall
be made in addition to any amounts distributable to such Holders pursuant to
Section 6.4 hereof in respect of their interests in the REMIC regular interest
evidenced by such Class N Certificates, and without regard to whether the REMIC
regular interest component of the Class N Certificates is then outstanding.
SECTION 6.5. ALLOCATION OF REALIZED LOSSES AND EXPENSE LOSSES.
(a) On each Distribution Date, following the deemed distributions to
be made in respect of the REMIC I Regular Interests pursuant to Section 6.2,
the Uncertificated Principal Balance of each REMIC I Regular Interest (after
taking account of such deemed distributions) shall be reduced to equal the
Stated Principal Balance of the related Mortgage Loan (including without
limitation an REO Mortgage Loan or, if applicable, a Replacement Mortgage Loan)
that will be outstanding immediately following such Distribution Date. Such
reductions shall be deemed to be an allocation of Realized Losses and Expense
Losses.
(b) On each Distribution Date, following the payments deemed to be
made to REMIC III in respect of the REMIC II Regular Interests on such date
pursuant to Section 6.3, the Trustee
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shall also determine the amount, if any, by which (i) the then-aggregate
Uncertificated Principal Balance of REMIC II Regular Interests A, B, C, D, E,
F, G, H, J, L, M and N exceeds (ii) the aggregate Stated Principal Balance of
the Mortgage Pool that will be outstanding immediately following such
Distribution Date. If such excess does exist, then the respective
Uncertificated Principal Balances of such REMIC II Regular Interests shall be
reduced sequentially, in reverse alphabetical order of letter designation, in
each case, until the first to occur of such excess being reduced to zero or the
Uncertificated Principal Balance of the particular REMIC II Regular Interest
being reduced to zero. Such reductions in the Uncertificated Principal Balances
of such REMIC II Regular Interests shall be deemed to be allocations of
Realized Losses and Expense Losses.
(c) On each Distribution Date, following the distributions to be made
to the Certificateholders on such date pursuant to Section 6.4, the Trustee
shall determine the amount, if any, by which (i) the then-aggregate Certificate
Principal Balance of the Principal Balance Certificates, exceeds (ii) the
aggregate Stated Principal Balance of the Mortgage Pool that will be
outstanding immediately following such Distribution Date. If such excess does
exist, then the Class Principal Balances of the Class N, Class M, Class L,
Class K, Class J, Class H, Class G, Class F, Class E, Class D, Class C and
Class B Certificates shall be reduced sequentially, in that order, in each
case, until the first to occur of such excess being reduced to zero or the
related Class Principal Balance being reduced to zero. If, after the foregoing
reductions, the amount described in clause (i) of the second preceding sentence
still exceeds the amount described in clause (ii) of the second preceding
sentence, then the respective Class Principal Balances of the Class A-1 and
Class A-2 Certificates shall be reduced, pro rata in accordance with the
relative sizes of the then-outstanding Class Principal Balances of such Classes
of Certificates, until the first to occur of such excess being reduced to zero
or each such Class Principal Balance being reduced to zero. Such reductions in
the Class Principal Balances of the respective Classes of Principal
Certificates shall be deemed to be allocations of Realized Losses and Expense
Losses.
SECTION 6.6. APPRAISAL REDUCTIONS. Not later than the earliest of the
dates set forth in the definition of "Appraisal Event" in respect of any
Mortgage Loan, or within such longer period as the Special Servicer is
diligently and in good faith proceeding to obtain an appraisal, the Special
Servicer shall obtain (A) an Appraisal of the related Mortgaged Property or REO
Property, as applicable, if the Stated Principal Balance of such Required
Appraisal Loan exceeds $1,000,000 or (B) at the option of the Special Servicer,
if the Stated Principal Balance of such Required Appraisal Loan is less than or
equal to $1,000,000, either an internal valuation prepared by the Special
Servicer or an Appraisal; provided that if the Special Servicer had completed
or obtained an Appraisal or internal valuation within the immediately preceding
12 months, the Special Servicer may rely on such Appraisal or internal
valuation and shall have no duty to prepare a new Appraisal or internal
valuation, unless such reliance would not be in accordance with the Servicing
Standard. Such Appraisal or internal valuation shall be updated at least
annually to the extent such Mortgage Loan remains a Required Appraisal Loan.
The cost of any such Appraisal if not an internal valuation performed by the
Special Servicer shall be an expense of the Trust and may be paid from REO
Income, treated as an Additional Trust Expense or advanced by the Special
Servicer (or, at the direction of the Special Servicer, by the Master Servicer)
in which event it shall be treated as a Servicing Advance, subject to Section
4.4 hereof. The Special Servicer, based on the Appraisal or internal valuation,
shall calculate any Appraisal Reduction. The Special Servicer shall calculate
or recalculate the Appraisal Reduction for any Mortgage Loan based on updated
Appraisals or internal valuations. Any Appraisal or internal valuation obtained
by the Special Servicer pursuant to this Section 6.6 shall be delivered by the
Special Servicer to the Master Servicer, and the Master Servicer shall deliver
such Appraisal or internal valuation to the Trustee, and the Trustee shall
deliver such Appraisal or internal valuation to the Holders of the Privately
Offered Certificates within 15 days of receipt by the Trustee of such Appraisal
or internal valuation from the Master Servicer.
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SECTION 6.7. COMPLIANCE WITH WITHHOLDING REQUIREMENTS. Notwithstanding
any other provision of this Agreement to the contrary, the Trustee shall comply
with all federal withholding requirements with respect to payments to
Certificateholders of interest, original issue discount, or other amounts that
the Trustee reasonably believes are subject to such requirements under the
Code. The consent of Certificateholders shall not be required for any such
withholding. In the event the Trustee withholds any amount from payments made
to any Certificateholder pursuant to federal withholding requirements, the
Trustee shall indicate to such Certificateholder the amount withheld.
ARTICLE VII.
CONCERNING THE TRUSTEE AND THE FISCAL AGENT
SECTION 7.1. DUTIES OF TRUSTEE AND THE FISCAL AGENT.
(a) The Fiscal Agent and, prior to the occurrence of an Event of
Default and after the curing or waiver of all Events of Default that may have
occurred, the Trustee undertake to perform only those duties as are
specifically set forth in this Agreement and no implied covenants or
obligations shall be read into this Agreement against the Trustee or the Fiscal
Agent. Any permissive right of the Trustee or Fiscal Agent, as applicable,
provided for in this Agreement shall not be construed as a duty of the Trustee
or the Fiscal Agent. Subject to Section 7.1(c)(vi), if an Event of Default
occurs and is continuing, then, the Trustee shall exercise such of the rights
and powers vested in it by this Agreement and use the same degree of care and
skill in their exercise as a prudent Person would exercise or use under the
circumstances in the conduct of such Person's own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they on
their face conform to the requirements of this Agreement (to the extent such
requirements are set forth herein); provided 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 furnished by
the Master Servicer or any other Person to the Trustee pursuant to this
Agreement. If any such instrument is found on its face not to conform to the
requirements of this Agreement, the Trustee shall take such 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) No provision of this Agreement shall be construed to relieve the
Trustee or the Fiscal Agent or any of their respective directors, officers,
employees, agents or Controlling Persons from liability for their own negligent
action, their own negligent failure to act or their own willful misconduct;
provided that:
(i) Neither the Trustee nor the Fiscal Agent nor any of their
respective directors, officers, employees, agents or Controlling Persons
shall be personally liable with respect to any action taken, suffered or
omitted to be taken by it (A) in its reasonable business judgment in
accordance with this Agreement or (B) at the direction of Holders of
Certificates entitled to not less than a majority of the Voting Rights;
(ii) No provision of this Agreement shall require either the Trustee
or the Fiscal Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder, or
in the exercise of any of its rights or powers, if it
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shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured
to it;
(iii) None of the Trustee, the Fiscal Agent or any of their respective
directors, officers, employees, agents or Controlling Persons shall be
responsible for any act or omission of the Master Servicer, the Special
Servicer, the Depositor or any Seller, including, without limitation,
actions taken pursuant to this Agreement, except to the extent the Trustee
or Fiscal Agent is acting as Master Servicer or Special Servicer;
(iv) The execution by the Trustee of any forms or plans of liquidation
in connection with the REMIC Pools shall not constitute a representation by
the Trustee or the Fiscal Agent as to the adequacy of such form or plan of
liquidation;
(v) The Trustee and the Fiscal Agent shall not be under any obligation
to appear in, prosecute or defend any legal action which is not incidental
to its duties as Trustee or Fiscal Agent, as applicable, in accordance with
this Agreement. In such event, all legal expense and costs of such action
shall be expenses and costs of the Trust and the Trustee and the Fiscal
Agent shall be entitled to be reimbursed therefor from the Collection
Account pursuant to Section 5.2(b); and
(vi) Neither the Trustee nor the Fiscal Agent shall be charged with
knowledge of any failure by the Master Servicer or the Special Servicer to
comply with their respective obligations under this Agreement or any act,
failure, or breach of any Person upon the occurrence of which the Trustee
may be required to act, except to the extent the Trustee or Fiscal Agent is
acting as Master Servicer or Special Servicer, or unless a Responsible
Officer of the Trustee obtains actual knowledge of such failure. The
Trustee shall be deemed to have actual knowledge of the failure of the
Master Servicer or Special Servicer to deliver to the Trustee any report,
certificate or other document required to be delivered to the Trustee but
not so delivered when required pursuant to this Agreement.
SECTION 7.2. CERTAIN MATTERS AFFECTING THE TRUSTEE AND THE FISCAL
AGENT.
(a) Except as otherwise provided in Section 7.1:
(i) The Trustee or the Fiscal Agent may request, and may rely and
shall be protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or parties;
(ii) The Trustee or the Fiscal Agent may consult with counsel and the
advice of such 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 advice or Opinion of Counsel;
(iii) Neither the Trustee nor the Fiscal Agent nor any of their
respective directors, officers, employees, agents or Controlling Persons
shall be personally liable for any action taken, suffered or omitted by the
Trustee or the Fiscal Agent in its reasonable business
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judgment and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(iv) The Trustee and the Fiscal Agent (in their respective capacities
as such) shall be under no obligation to exercise any of the powers vested
in it by this Agreement or to institute, conduct or defend any litigation
hereunder or relating hereto or 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 (provided the same appears regular on its face), unless
requested in writing to do so by Holders of Certificates entitled to at
least 25% of the Voting Rights; provided that, if the payment within a
reasonable time to the Trustee or the Fiscal Agent of the costs, expenses
or liabilities likely to be incurred by it in connection with the foregoing
is, in the opinion of the Trustee or the Fiscal Agent not reasonably
assured to the Trustee or the Fiscal Agent by the security afforded to it
by the terms of this Agreement, the Trustee or the Fiscal Agent may require
reasonable indemnity against such expense or liability or payment of such
estimated expenses as a condition to proceeding. The Trustee's and the
Fiscal Agent's reasonable expenses shall be paid by the Certificateholders
making such request;
(v) The Trustee and the Fiscal Agent may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys, which agents or attorneys shall have any or
all of the rights, powers, duties and obligations of the Trustee or the
Fiscal Agent conferred on them by such appointment; provided that the
Trustee shall continue to be responsible for its duties and obligations
hereunder and shall not be liable for the actions or omissions of the
Master Servicer, the Special Servicer or the Depositor;
(vi) The Trustee and the Fiscal Agent shall in no event be required to
obtain a deficiency judgment against a Mortgagor;
(vii) Neither the Trustee nor the Fiscal Agent shall be required to
expend its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder (unless otherwise expressly
required herein to do so) if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such liability
is not assured to it;
(viii) Neither the Trustee nor the Fiscal Agent shall be liable for
any loss on any investment of funds pursuant to this Agreement; provided,
however, that this provision shall not operate to forgive the Trustee or
Fiscal Agent, in their respective individual capacities, for a liability
that either of them may have for any investment loss and incurred on such
investment; and
(ix) unless otherwise specifically required by law, the Trustee and
the Fiscal Agent shall not be required to post any surety or bond of any
kind in connection with the execution or performance of its duties
hereunder.
(b) Following the Closing Date, the Trustee shall not accept any
contribution of assets to the Trust not specifically contemplated by this
Agreement unless the Trustee shall have received a Nondisqualification Opinion
at the expense of the Person desiring to contribute such assets with respect to
such contribution.
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(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 the 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.
(d) The Trustee shall timely pay, from its own funds, the amount of
any and all federal, state and local taxes imposed on the Trust, its assets,
any REMIC Pool or transactions including, without limitation, (A) "prohibited
transaction" taxes as defined in Section 860F of the Code, if, when and as the
same shall be due and payable, (B) any tax on contributions to a REMIC after
the Closing Date imposed by Section 860G(d) of the Code and (C) any tax on "net
income from foreclosure property" as defined in Section 860G(c) of the Code,
but only if such taxes arise out of a breach by the Trustee of its obligations
hereunder, which breach constitutes negligence or willful misconduct of the
Trustee.
SECTION 7.3. TRUSTEE AND FISCAL AGENT NOT LIABLE FOR CERTIFICATES OR
INTERESTS OR MORTGAGE LOANS. The Trustee and the Fiscal Agent make no
representations as to the validity or sufficiency of this Agreement (other than
the certificate of authentication on the Certificates) or of any Mortgage Loan,
Assignment of Mortgage or related document. The Trustee and the Fiscal Agent
shall not be accountable for the use or application by the Depositor or the
Master Servicer or the Special Servicer of any of the Certificates or any of
the proceeds of such Certificates, or for the use or application by the
Depositor or the Master Servicer or the Special Servicer of funds paid in
consideration of the assignment of the Mortgage Loans to the Trust or deposited
into the Distribution Account or any other fund or account maintained with
respect to the Certificates or any account maintained pursuant to this
Agreement or for investment of any such amounts. Neither the Trustee nor the
Fiscal Agent shall at any time have any responsibility or liability for or with
respect to the legality, validity or enforceability of the Mortgages or the
Mortgage Loans, or the perfection and priority of the Mortgages or, except as
provided in Section 2.1(c), the maintenance of any such perfection and
priority, or for or with respect to the efficacy of the Trust or its ability to
generate the payments to be distributed to Certificateholders under this
Agreement, including, without limitation, the existence, condition and
ownership of any Mortgaged Property; the existence and enforceability of any
hazard insurance thereon; the validity of the assignment of the Mortgage Loans
to the Trust or of any intervening assignment; the completeness of the Mortgage
Loans; the performance or enforcement of the Mortgage Loans (other than if the
Trustee shall assume the duties of the Master Servicer or the Special
Servicer); any investment of monies by the Master Servicer or the Special
Servicer or any loss resulting therefrom; the failure of the Master Servicer or
any Sub-Servicer or the Special Servicer to act or perform any duties required
of it on behalf of the Trustee hereunder; or any action by the Trustee taken at
the instruction of the Master Servicer or the Special Servicer.
SECTION 7.4. TRUSTEE AND THE FISCAL AGENT MAY OWN CERTIFICATES. The
Trustee and the Fiscal Agent and any agent of the Trustee and the Fiscal Agent
in its individual or any other capacity may become the owner or pledgee of
Certificates with the same rights it would have if it were not the Trustee and
the Fiscal Agent or such agent.
SECTION 7.5. ELIGIBILITY REQUIREMENTS FOR TRUSTEE AND FISCAL AGENT.
The Trustee hereunder shall at all times be (i) an institution insured by the
FDIC, (ii) a corporation, authorized to exercise corporate trust powers, having
a combined capital and surplus of not less than $100,000,000 and subject to
supervision or examination by federal or state authority, and (iii) an
institution whose long-term senior unsecured debt is, for so long as a Fiscal
Agent is acting hereunder, rated not less than "BBB" by DCR and "BBB" by Fitch;
provided that either the Trustee or
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the Fiscal Agent shall at all times be an institution whose long-term senior
unsecured debt is rated not less than "AA" by DCR and "AA" by Fitch or
otherwise acceptable to the Rating Agencies. If such corporation, national bank
or national banking association publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising
or examining authority, then, for the purposes of this Section, the combined
capital and surplus of such corporation, national bank or national banking
association shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Trustee or Fiscal Agent shall cease to be eligible in accordance with
provisions of this Section, the Trustee or Fiscal Agent shall resign
immediately in the manner and with the effect specified in Section 7.6.
SECTION 7.6. RESIGNATION AND REMOVAL OF TRUSTEE OR FISCAL AGENT.
(a) The Trustee or the Fiscal Agent may at any time resign and be
discharged from the trusts hereby created by giving written notice thereof to
the Depositor, the Master Servicer and the Rating Agencies; provided that such
resignation shall not be effective until its successor shall have accepted the
appointment and Rating Agency Confirmation shall have been obtained with
respect to such appointment. Upon receiving such notice of resignation, the
Depositor will promptly appoint a successor trustee or fiscal agent, as the
case may be, except in the case of the initial Trustee or Fiscal Agent, in
which case both shall be so replaced concurrently, by written instrument, one
copy of which instrument shall be delivered to the resigning Trustee or the
Fiscal Agent, one copy to the successor trustee and one copy to each of the
Master Servicer and the Rating Agencies. If no successor trustee or fiscal
agent shall have been so appointed and shall have accepted appointment within
30 days after the giving of such notice of resignation, the resigning Trustee
or the Fiscal Agent may petition any court of competent jurisdiction for the
appointment of a successor trustee or fiscal agent.
(b) If at any time (i) the Trustee shall cease to be eligible in
accordance with the provisions of Section 7.5 and shall fail to resign after
written request therefor by the Depositor, (ii) the Trustee shall become
incapable of acting, or shall be adjudged a 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, (iii) a
tax is imposed or threatened with respect to the Trust or any REMIC Pool by any
state in which the Trustee or the Trust held by the Trustee is located;
provided, however, that, if the Trustee agrees to indemnify the Trust for such
taxes, it shall not be removed pursuant to this clause (iii), or (iv) the
continuation of the Trustee as such would result in a downgrade, qualification
or withdrawal of the rating by the Rating Agencies of any Class of Certificates
with a rating as evidenced in writing by the Rating Agencies, then the
Depositor may remove such Trustee and appoint a successor trustee by written
instrument, one copy of which instrument shall be delivered to the Trustee so
removed, one copy to the successor trustee and one copy to each of the Master
Servicer and the Rating Agencies. In the case of removal under clauses (i),
(ii), (iii) and (iv) above, the Trustee shall bear all such costs of transfer.
Such succession shall take effect after a successor trustee has been appointed.
In the case of the removal of the initial Trustee, the Depositor shall also
remove the Fiscal Agent. In this case, the procedures and liability for costs
of such removal shall be the same as they are stated in subsection (c) with
respect to the Fiscal Agent.
(c) If at any time (i) the Fiscal Agent shall cease to be eligible in
accordance with the provisions of Section 7.5 and shall fail to resign after
written request therefor by the Depositor, or (ii) a Fiscal Agent Termination
Event has occurred, then the Depositor shall send a written notice of
termination to the Fiscal Agent (which notice shall specify the reason for such
termination) and remove such Fiscal Agent and appoint a successor Fiscal Agent
by written instrument, one copy of which instrument shall be delivered to the
Fiscal Agent so removed, one copy to the successor Fiscal Agent, and
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one copy to each of the Trustee, the Master Servicer and the Rating Agencies.
In all such cases, the Fiscal Agent shall bear all costs of transfer to a
successor Fiscal Agent, such succession only to take effect after a successor
Fiscal Agent has been appointed. In the case of the initial Fiscal Agent, the
Depositor may, but is not required to, also remove the Trustee. In this case,
the procedures and liability for costs of such removal shall be the same as
they are stated in subsection (b) with respect to the Trustee.
(d) The Holders of Certificates entitled to at least 51% of the Voting
Rights may without cause upon 30 days' written notice to the Trustee or the
Fiscal Agent and to the Depositor remove the Trustee or the Fiscal Agent by
such written instrument, signed by such Holders or their attorney-in-fact duly
authorized, one copy of which instrument shall be delivered to the Depositor
and one copy to the Trustee or the Fiscal Agent so removed; the Depositor shall
thereupon use its best efforts to appoint a successor Trustee or Fiscal Agent
in accordance with this Section. The Certificateholders effecting such transfer
shall be responsible for the reasonable out-of-pocket costs of such removal,
including fees and any related expenses, such as those incurred in transferring
the Mortgage Files to the successor Trustee.
(e) Any resignation or removal of the Trustee or the Fiscal Agent and
appointment of a successor trustee or fiscal agent pursuant to any of the
provisions of this Section shall become effective upon acceptance of
appointment by the successor trustee and fiscal agent as provided in Section
7.7. Upon any succession of the Trustee or the Fiscal Agent under this
Agreement, the predecessor Trustee or Fiscal Agent shall be entitled to the
payment of compensation and reimbursement agreed to under this Agreement for
services rendered and expenses incurred (including without limitation
unreimbursed Advances made thereby, with any related unpaid Advance Interest
accrued on such Advances) at such times and from such sources as if the
predecessor Trustee or Fiscal Agent had not resigned or been removed. The
Trustee and the Fiscal Agent shall not be liable for any action or omission of
any successor Trustee or Fiscal Agent.
SECTION 7.7. SUCCESSOR TRUSTEE OR FISCAL AGENT.
(a) Any successor Trustee or Fiscal Agent appointed as provided in
Section 7.6 shall execute, acknowledge and deliver to the Depositor and to its
predecessor Trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor Trustee or Fiscal Agent
shall become effective and such successor Trustee or Fiscal Agent, without any
further act, deed or conveyance, shall become fully vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect
as if originally named as Trustee or Fiscal Agent herein. The predecessor
Trustee shall deliver to the successor Trustee all Mortgage Files and documents
and statements related to the Mortgage Files held by it hereunder, and shall
duly assign, transfer, deliver and pay over to the successor Trustee the entire
Trust, together with all instruments of transfer and assignment or other
documents properly executed necessary to effect such transfer and such records
or copies thereof maintained by the predecessor Trustee or Fiscal Agent in the
administration hereof as may be reasonably requested by the successor Trustee
or Fiscal Agent and shall thereupon be discharged from all duties and
responsibilities under this Agreement. In addition, the Depositor and the
predecessor Trustee or the Fiscal Agent shall execute and deliver such other
instruments and do such other things as may reasonably be required to more
fully and certainly vest and confirm in the successor Trustee or the successor
Fiscal Agent all such rights, powers, duties and obligations. Anything herein
to the contrary notwithstanding, in no event shall the combined fees payable to
a successor Trustee and successor Fiscal Agent exceed the Trustee Fee.
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(b) No successor Trustee shall accept appointment as provided in this
Section unless at the time of such appointment such successor Trustee shall be
eligible under the provisions of Section 7.5.
(c) Upon acceptance of appointment by a successor Trustee or Fiscal
Agent as provided in this Section, the successor Trustee or Fiscal Agent shall
mail notice of the succession of such Trustee or Fiscal Agent hereunder to all
Holders of Certificates at their addresses as shown in the Certificate Register
and to the Rating Agencies (evidence of such mailing to be provided to the
Depositor and the Master Servicer). The expenses of such mailing shall be borne
by the successor Trustee or Fiscal Agent.
SECTION 7.8. MERGER OR CONSOLIDATION OF TRUSTEE. Any Person into which
the Trustee may be merged or converted or with which it may be consolidated, or
any Person resulting from any merger, conversion or consolidation to which such
Trustee shall be a party, or any Persons succeeding to the business of such
Trustee or Fiscal Agent, shall be the successor of such Trustee or Fiscal Agent
hereunder, provided that such Person shall be eligible under the provisions of
Section 7.5, 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 7.9. APPOINTMENT OF CO-TRUSTEE, SEPARATE TRUSTEE OR CUSTODIAN.
(a) Notwithstanding any other provisions hereof, at any time, the
Trustee, the Depositor or, in the case of the Trust, the Certificateholders
entitled to more than 50% of the Voting Rights shall each have the power from
time to time to appoint one or more Persons to act either as co-trustees
jointly with the Trustee or as separate trustees, or as custodians, for the
purpose of holding title to, foreclosing or otherwise taking action with
respect to any Mortgage Loan outside the state where the Trustee has its
principal place of business where such separate trustee or co-trustee is
necessary or advisable (or the Trustee is advised by the Master Servicer or
Special Servicer that such separate trustee or co-trustee is necessary or
advisable) under the laws of any state in which a property securing a Mortgage
Loan is located or for the purpose of otherwise conforming to any legal
requirement, restriction or condition in any state in which a property securing
a Mortgage Loan is located or in any state in which any portion of the Trust is
located. The separate trustees, co-trustees, or custodians so appointed shall
be trustees or custodians for the benefit of all the Certificateholders, shall
have such powers, rights and remedies as shall be specified in the instrument
of appointment and shall be deemed to have accepted the provisions of this
Agreement; provided that no such appointment shall, or shall be deemed to,
constitute the appointee an agent of the Trustee; provided, further that the
Trustee shall not be relieved of liability for the actions or omissions of any
co-trustee or separate trustee appointed by it and shall not be liable for the
actions of any co-trustee or separate trustee not appointed by it.
(b) Every separate trustee, co-trustee, and custodian shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all powers, duties, obligations and rights conferred upon the
Trustee in respect of the receipt, custody and payment of moneys shall be
exercised solely by the Trustee;
(ii) all other 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, co-trustee, or
custodian jointly, except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee
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hereunder or as successor to the Master Servicer hereunder) the Trustee
shall be incompetent or unqualified to perform such act or acts, in which
event such rights, powers, duties and obligations, including the holding of
title to the Trust or any portion thereof in any such jurisdiction, shall
be exercised and performed by such separate trustee, co-trustee, or
custodian;
(iii) no trustee or custodian hereunder shall be personally liable by
reason of any act or omission of any other trustee or custodian hereunder;
and
(iv) the Trustee or, in the case of the Trust, the Certificateholders
entitled to more than 50% of the Voting Rights outstanding may at any time
accept the resignation of or remove any separate trustee, co-trustee or
custodian, so appointed by it or them, if such resignation or removal does
not violate the other terms of this Agreement.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then-separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee, co-trustee or custodian shall refer to this
Agreement and the conditions of this Article VII. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every provision of
this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed with
the Trustee.
(d) Any separate trustee, co-trustee or custodian 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, co-trustee or custodian shall die, become incapable of acting, resign
or be removed, all of its estates, properties, rights, remedies and trusts
shall vest in and be exercised by the Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.
(e) No separate trustee, co-trustee or custodian hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
7.5 hereof and no notice to Certificateholders of the appointment of any
separate trustee, co-trustee or custodian hereunder shall be required.
(f) The Trustee agrees to instruct the co-trustees, if any, to the
extent necessary to fulfill the Trustee's obligations hereunder.
(g) The Trustee shall pay the reasonable compensation of the
co-trustees, separate trustees or custodians appointed pursuant to this Section
7.9 and shall be reimbursed in accordance with the standards, specified in
Section 7.12 hereof.
(h) Subject to the consent of the Depositor, which consent shall not
be unreasonably withheld, the Trustee may appoint at any time a custodian to
hold some or all of the Mortgage Files; provided that Rating Agency
Confirmation from Fitch is obtained with respect to such appointee. Upon the
appointment of a Custodian, the Trustee and the Custodian shall enter into a
custodial agreement.
SECTION 7.10. AUTHENTICATING AGENTS.
(a) The Trustee may appoint one or more Authenticating Agents which
shall be authorized to act on behalf of the Trustee in executing and
authenticating Certificates. Wherever
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reference is made in this Agreement to the execution and authentication of
Certificates by the Trustee or the Trustee's certificate of authentication,
such reference shall be deemed to include execution and authentication on
behalf of the Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent must be acceptable to the Depositor and must be a
corporation organized and doing business under the laws of the United States of
America or of any state and having a principal office and place of business in
the Borough of Manhattan, the City and State of New York or in the State of
Illinois, having a combined capital and surplus of at least $50,000,000,
authorized under such laws to do a trust business and subject to supervision or
examination by federal or state authorities. The Trustee initially shall be
Authenticating Agent hereunder. No such appointment shall relieve the Trustee
of liability or responsibility for the duties to be carried out by the
Authenticating Agent.
(b) Any Person into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from
any merger, conversion or consolidation to which any Authenticating Agent shall
be a party, or any Person succeeding to the corporate agency business of any
Authenticating Agent, shall continue to be the Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
(c) Any Authenticating Agent may at any time resign by giving at least
30 days' advance written notice of resignation to the Trustee and the
Depositor. The Trustee may at any time terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and the Depositor. Upon receiving a notice of resignation
or upon such a termination, or in case at any time any Authenticating Agent
shall cease to be eligible in accordance with the provisions of Section
7.10(a), the Trustee may appoint a successor Authenticating Agent, shall give
written notice of such appointment to the Depositor and shall mail notice of
such appointment to all Holders of Certificates. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with all
the rights, powers, duties and responsibilities of its predecessor hereunder,
with like effect as if originally named as Authenticating Agent. No such
Authenticating Agent shall be appointed unless eligible under the provisions of
Section 7.10(a). No Authenticating Agent shall have responsibility or liability
for any action taken by it as such at the direction of the Trustee.
SECTION 7.11. INDEMNIFICATION.
(a) The Trustee and each of its directors, officers, employees, agents
and Controlling Persons shall be entitled to indemnification from the Trust for
any and all claims, losses, penalties, fines, forfeitures, legal fees and
related costs, judgments and any other costs, liabilities, fees and expenses
incurred in connection with any legal action not expressly required hereby to
be borne by the Trustee and incurred without negligence or willful misconduct
on their part, arising out of, or in connection with this Agreement, the
Certificates and the acceptance or administration of the trusts created
hereunder (including, without limitation, any unanticipated loss, liability or
expense incurred in connection with any action or inaction of the Master
Servicer, the Special Servicer or the Depositor hereunder, except to the extent
that the Trustee is acting as Master Servicer or Special Servicer), including
the reasonable costs and expenses of defending themselves against any claim in
connection with the exercise or performance of any of their powers or duties
hereunder and the Trustee and each of its directors, officers, employees,
agents and Controlling Persons shall be entitled to indemnification from the
Trust for any unanticipated loss, liability or expense incurred in connection
with the provision by the Trustee of any report required to be provided by the
Trustee pursuant to this Agreement; provided that:
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(i) with respect to any such claim, the Trustee shall have given the
Depositor and the Holders of the Certificates written notice thereof
promptly after the Trustee shall have knowledge thereof; provided, however,
that failure to give such notice to the Depositor and the Holders of
Certificates shall not affect the Trustee's rights to indemnification
herein unless the Master Servicer's defense of such claim is materially
prejudiced thereby;
(ii) while maintaining control over its own defense, the Trustee shall
cooperate and consult fully with the Master Servicer in preparing such
defense; and
(iii) notwithstanding anything to the contrary in this Section 7.11,
the Trust shall not be liable for settlement of any such claim by the
Trustee entered into without the prior consent of the Master Servicer,
which consent shall not be unreasonably withheld.
(b) The Trustee agrees to indemnify the Special Servicer and the
Master Servicer, and any director, officer, employee or agent thereof, and hold
them harmless against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments and any other costs,
liabilities, fees and expenses that either of them may sustain arising from or
as a result of the willful misfeasance, bad faith or negligence in the
performance of any of the Trustee's duties hereunder or by reason of reckless
disregard of the Trustee's obligations and duties hereunder, including a breach
of such obligations a substantial motive of which is to obtain an economic
advantage from being released from such obligations, (unless such claim, loss,
penalty, fine, forfeiture, legal fees and related costs results from the
willful misfeasance, bad faith or negligence of such indemnified party) and if
in any such situation the Trustee is replaced, the parties hereto agree that
the amount of such claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments and other costs, liabilities, fees and expenses
shall at least equal the incremental costs, if any, of retaining a successor
Trustee. Each of the Special Servicer and the Master Servicer shall immediately
notify the Trustee if a claim is made by a third party with respect to this
Agreement, the Certificates or any asset of the Trust Fund entitling the
Special Servicer or the Master Servicer to indemnification hereunder, whereupon
the Trustee shall assume the defense of any such claim (with counsel reasonably
satisfactory to the Special Servicer and the Master Servicer and pay all
expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree that may be entered against it or
them in respect of such claim. Any failure to so notify the Trustee shall not
affect any rights the Special Servicer or the Master Servicer may have to
indemnification under this Agreement or otherwise, unless the Trustee's defense
of such claim is materially prejudiced thereby and the Trustee delivers a
certification explaining the prejudice. The indemnification provided herein
shall survive the termination of this Agreement and the resignation or
termination of the Master Servicer, the Special Servicer, the Trustee and the
Fiscal Agent.
The provisions of this Section 7.11 shall survive any termination of this
Agreement and the resignation or removal of the Trustee.
SECTION 7.12. FEES AND EXPENSES OF TRUSTEE AND FISCAL AGENT.
Monthly, the Trustee shall be entitled to receive the Trustee Fee
(which shall not be limited by any provision of law with respect to the
compensation of a trustee of an express trust), for all services rendered by it
in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Trustee. On or
before the Master Servicer Remittance Date in each month (commencing in April
1998), the Master Servicer shall, pursuant to Section 5.2(a), remit to the
Trustee for deposit in the Distribution Account that portion of funds then on
deposit in the Collection Account that are allocable to cover the Trustee Fees,
and the Trustee shall be entitled to withdraw such portion from the
Distribution Account to pay itself its unpaid Trustee Fees. The Trustee and the
Fiscal Agent shall also be entitled to recover from the Trust all reasonable
unanticipated
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expenses and disbursements incurred or made by the Trustee and the Fiscal Agent
in accordance with any of the provisions of this Agreement (including the
reasonable compensation and the reasonable expenses and disbursements of its
outside counsel and other Persons not regularly in its employ), not including
expenses incurred in the ordinary course of performing its duties as Trustee
and Fiscal Agent hereunder, and except any such expense, disbursement or
advance as may arise from its negligence or bad faith or which is the
responsibility of the Holders of the Certificates hereunder. The provisions of
this Section 7.12 shall survive any termination of this Agreement and the
resignation or removal of the Trustee and Fiscal Agent.
SECTION 7.13. COLLECTION OF MONEYS. Except as otherwise expressly
provided in this Agreement, the Trustee may demand payment or delivery of, and
shall receive and collect, all money and other property payable to or
receivable by the Trustee pursuant to this Agreement. The Trustee shall hold
all such money and property received by it as part of the Trust and shall
distribute it as provided in this Agreement. If the Trustee shall not have
timely received amounts to be remitted with respect to the Mortgage Loans from
the Master Servicer, the Trustee shall request the Master Servicer to make such
distribution as promptly as practicable or legally permitted. If the Trustee
shall subsequently receive any such amount, it may withdraw such request.
SECTION 7.14. NOTIFICATION TO HOLDERS. Upon termination of the Master
Servicer or appointment of a successor to the Master Servicer, the Trustee
shall promptly mail notice thereof by first class mail to the Rating Agencies
and the Certificateholders at their respective addresses appearing on the
Certificate Register.
SECTION 7.15. REPRESENTATIONS AND WARRANTIES OF TRUSTEE AND FISCAL
AGENT.
(a) The Trustee hereby represents and warrants as of the Closing Date
that:
(i) The Trustee is a national banking association, duly organized,
validly existing and in good standing under the laws governing its creation
and existence and has full corporate power and authority to own its
property, to carry on its business as presently conducted, and to enter
into and perform its obligations under this Agreement;
(ii) The execution and delivery by the Trustee of this Agreement have
been duly authorized by all necessary corporate action on the part of the
Trustee; neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated in this Agreement, nor
compliance with the provisions of this Agreement, will conflict with or
result in a breach of, or constitute a default under, (A) any of the
provisions of any law, governmental rule, regulation, judgment, decrees or
order binding on the Trustee or its properties that would materially and
adversely affect the Trustee's ability to perform its obligations under
this Agreement, (B) the organizational documents of the Trustee, or (C) the
terms of any material agreement or instrument to which the Trustee is a
party or by which it is bound; the Trustee is not in default with respect
to any order or decree of any court or any order, regulation or demand of
any federal, state, municipal or other governmental agency, which default
would materially and adversely affect its performance under this Agreement;
(iii) The execution, delivery and performance by the Trustee of this
Agreement and the consummation of the transactions contemplated by this
Agreement do not require the consent, approval, authorization or order of,
the giving of notice to or the registration with any state, federal or
other governmental authority or agency, except such as has been or will
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be obtained, given, effected or taken in order for the Trustee to perform
its obligations under this Agreement;
(iv) This Agreement has been duly executed and delivered by the
Trustee and, assuming due authorization, execution and delivery by the
other parties hereto, constitutes a valid and binding obligation of the
Trustee, enforceable against the Trustee in accordance with its terms,
subject, as to enforcement of remedies, (A) to applicable bankruptcy,
reorganization, insolvency, moratorium and other similar laws affecting
creditors' rights generally as from time to time in effect, (B) to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and (C) to public policy
considerations underlying the securities laws to the extent that such
considerations limit the enforceability of the provisions of this Agreement
that purport to provide for indemnification for securities law violations;
and
(v) No litigation is pending or, to the best of the Trustee's
knowledge, threatened, against the Trustee that, either in one instance or
in the aggregate, would draw into question the validity of this Agreement,
or the outcome of which could reasonably be expected to materially and
adversely affect the execution, delivery and performance by, or the
enforceability against, the Trustee of this Agreement or the ability of the
Trustee to perform under the terms of this Agreement.
(vi) The Trustee is currently modifying its system with the intention
of being Year 2000 ready by August 31, 1999.
(b) The Fiscal Agent hereby represents and warrants as of the Closing
Date that:
(i) The Fiscal Agent is a foreign bank corporation duly organized,
validly existing and in good standing under the laws governing its creation
and existence and has full corporate power and authority to own its
property, to carry on its business as presently conducted, and to enter
into and perform its obligations under this Agreement;
(ii) The execution and delivery by the Fiscal Agent of this Agreement
have been duly authorized by all necessary corporate action on the part of
the Fiscal Agent; neither the execution and delivery of this Agreement, nor
the consummation of the transactions contemplated in this Agreement, nor
compliance with the provisions of this Agreement, will conflict with or
result in a breach of, or constitute a default under, (i) any of the
provisions of any law, governmental rule, regulation, judgment, decrees or
order binding on the Fiscal Agent or its properties that would materially
and adversely affect the Fiscal Agent's ability to perform its obligations
under this Agreement, (ii) the organizational documents of the Fiscal
Agent, or (iii) the terms of any material agreement or instrument to which
the Fiscal Agent is a party or by which it is bound; the Fiscal Agent is
not in default with respect to any order or decree of any court or any
order, regulation or demand of any federal, state, municipal or other
governmental agency, which default would materially and adversely affect
its performance under this Agreement;
(iii) The execution, delivery and performance by the Fiscal Agent of
this Agreement and the consummation of the transactions contemplated by
this Agreement do not require the consent, approval, authorization or order
of, the giving of notice to, or the registration with, any state, federal
or other governmental authority or agency, except such as has been
obtained, given, effected or taken prior to the date hereof;
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(iv) This Agreement has been duly executed and delivered by the Fiscal
Agent and, assuming due authorization, execution and delivery by the other
parties hereto, constitutes a valid and binding obligation of the Fiscal
Agent, enforceable against the Fiscal Agent in accordance with its terms,
subject, as to enforcement of remedies, (A) to applicable bankruptcy,
reorganization, insolvency, moratorium and other similar laws affecting
creditors' rights generally as from time to time in effect, (B) to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and (C) to public policy
considerations underlying the securities laws to the extent that such
considerations limit the enforceability of the provisions of this Agreement
that purport to provide for indemnification for securities law violations;
and
(v) No litigation is pending or, to the best of the Fiscal Agent's
knowledge, threatened, against the Fiscal Agent, the outcome of which could
reasonably be expected to materially and adversely affect the execution,
delivery and performance by, or the enforceability against, the Fiscal
Agent of this Agreement or the ability of the Fiscal Agent to perform under
the terms of this Agreement.
SECTION 7.16. FISCAL AGENT TERMINATION EVENT. "FISCAL AGENT
TERMINATION EVENT," wherever used herein, means any one of the following
events:
(i) Any failure by the Fiscal Agent to remit to the Trustee when due
any required Advances; or
(ii) A decree or order of a court or agency or supervisory authority
having jurisdiction in the premises in an involuntary case under any
present or future federal or state bankruptcy, insolvency or similar law
for the appointment of a conservator, receiver, liquidator, trustee or
similar official in any bankruptcy, insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against
the Fiscal Agent and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days; or
(iii) The Fiscal Agent shall consent to the appointment of a
conservator, receiver, liquidator, trustee or similar official in any
bankruptcy, insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings or relating to the Fiscal Agent or of or
relating to all or substantially all of its property; or
(iv) The Fiscal Agent shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of
any applicable bankruptcy, insolvency or reorganization statute, make an
assignment for the benefit of its creditors, voluntarily suspend payment of
its obligations, or take any corporate action in furtherance of the
foregoing; or
(v) Either Rating Agency shall indicate its intent to reduce, qualify
(which shall not include a "negative" credit watch) or withdraw the
outstanding rating of any Class of Certificates because the prospective
financial condition or capacity to make Advances of the Fiscal Agent is
insufficient to maintain such rating; or
(vi) The long-term unsecured debt of the Fiscal Agent is rated below
"AA" by either Rating Agency.
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SECTION 7.17. PROCEDURE UPON TERMINATION EVENT.
(a) On the date specified in a written notice of termination given to
the Fiscal Agent pursuant to Section 7.6(c), all authority, power and rights of
the Fiscal Agent under this Agreement, whether with respect to the Mortgage
Loans or otherwise, shall terminate and either a successor Fiscal Agent shall
be appointed by the Trustee, with the consent of the Depositor, or the Trustee
shall take such other action as shall prevent the downgrading of the
then-current ratings of the certificates; provided that in no event shall the
termination of the Fiscal Agent be effective until Rating Agency Confirmation
shall have been obtained with respect to the appointment of a successor fiscal
agent or such other action. The Fiscal Agent agrees to cooperate with the
Trustee in effecting the termination of the Fiscal Agent's responsibilities and
rights hereunder as Fiscal Agent.
(b) Notwithstanding the termination of its activities as Fiscal Agent,
the terminated Fiscal Agent shall continue to be entitled to reimbursement of
its Advances (with Advance Interest thereon) to the extent provided in Section
5.2 but only to the extent such reimbursement relates to the period up to and
including the date on which the Fiscal Agent's termination is effective. The
Fiscal Agent shall be reimbursed for all amounts owed to it hereunder on or
prior to the effective date of its termination from amounts on deposit in the
Collection Account.
SECTION 7.18. IMPACT OF YEAR 2000 COMPLIANCE.
(a) Any type of difficulties or problems that may be encountered by
the Trustee or Fiscal Agent related in any way to the manipulation of dates in
1999, 2000 or later, or otherwise related to such party not being Year 2000
ready, shall not in any way relieve such party of its obligations or
liabilities under this Agreement.
ARTICLE VIII.
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 8.1. SERVICING STANDARD; GENERAL POWERS AND DUTIES.
(a) Each of the Master Servicer and the Special Servicer shall service
and administer the Mortgage Loans that it is obligated to service pursuant to
this Agreement on behalf of the Trustee and in the best interests of and for
the sole benefit of the Certificateholders (as determined by the Master
Servicer or the Special Servicer, as the case may be, in its good faith and
reasonable judgment), in accordance with applicable law, the terms of this
Agreement and the terms of the respective Mortgage Loans and, to the extent
consistent with the foregoing, further as follows: (i) with the same skill,
care and diligence as is normal and usual in its general mortgage servicing and
REO property management activities on behalf of third parties or on behalf of
itself, whichever is higher, with respect to mortgage loans and REO properties
that are comparable to the Mortgage Loans; (ii) with a view to the timely
collection of all scheduled payments of principal and interest under the
Mortgage Loans or, if a Mortgage Loan comes into and continues in default and
if, in the good faith and reasonable judgment of the Special Servicer, no
satisfactory arrangements can be made for the collection of the delinquent
payments, the maximization of the recovery on such Mortgage Loan to the
Certificateholders (as a collective whole) on a present value basis (the
relevant discounting of anticipated collections that will be distributed to
Certificateholders to be performed at the related Net Mortgage Rate); and (iii)
without regard to (A) any relationship that the Master Servicer or the Special
Servicer, as the case may be, or any Affiliate thereof may have with the
related borrower, (B) the ownership of any Certificate by the Master Servicer
or the
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Special Servicer, as the case may be, or by any Affiliate thereof, (C) the
Master Servicer's obligation to make Advances, (D) the Special Servicer's
obligation to make (or to direct the Master Servicer to make) Servicing
Advances and (E) the right of the Master Servicer (or any Affiliate thereof) or
the Special Servicer (or any Affiliate thereof), as the case may be, to receive
reimbursement of costs, or the sufficiency of any compensation payable to it,
hereunder or with respect to any particular transaction (the "SERVICING
STANDARD"). Without limiting the generality of the foregoing, each of the
Master Servicer and the Special Servicer, in its own name, in connection with
its servicing and administrative duties hereunder is hereby authorized and
empowered by the Trustee to exercise all efforts consistent with the foregoing
standard and to execute and deliver, on behalf of the Certificateholders and
the Trustee or any of them, any and all financing statements, continuation
statements and other documents or instruments necessary to maintain the lien
created by any Mortgage or other security document in the related Mortgage File
on the related Mortgaged Property and related collateral; subject to Section
8.18, any and all modifications, waivers, amendments or consents to or with
respect to any documents contained in the related Mortgage File; and any and
all instruments of satisfaction or cancellation, or of full release or
discharge, and all other comparable instruments, with respect to the Mortgage
Loans and the Mortgaged Properties. Subject to Section 8.18, each of the Master
Servicer and the Special Servicer is also authorized to approve a request by a
Mortgagor under a Mortgage Loan that it is obligated to service and administer
pursuant to this Agreement, for an easement, consent to alteration or
demolition, and for other similar matters, provided that the Master Servicer or
the Special Servicer, as the case may be, determines, exercising its good faith
business judgment in the same manner as it would if it were the owner of the
related Mortgage Loan, that such approval will not affect the security for, or
the timely and full collectability of, the related Mortgage Loan. Subject to
Section 8.8, the Trustee shall furnish, or cause to be furnished, to the Master
Servicer and the Special Servicer any powers of attorney and other documents
necessary or appropriate to enable the Master Servicer or the Special Servicer,
as the case may be, to carry out its servicing and administrative duties
hereunder; provided, however, that the Trustee shall not be held liable for any
negligence with respect to, or misuse of, any such power of attorney by the
Master Servicer or the Special Servicer, as the case may be.
(b) Except as otherwise expressly set forth herein with respect to
specific duties, the Master Servicer shall be responsible for the servicing and
administration of all the Mortgage Loans other than Specially Serviced Mortgage
Loans and REO Mortgage Loans, and the Special Servicer shall be responsible for
the servicing and administration of Specially Serviced Mortgage Loans, REO
Mortgage Loans and REO Properties. Subject to Section 8.1(a), the Master
Servicer and the Special Servicer shall each have full power and authority,
acting alone or, subject to Section 8.4, through Sub-Servicers, to do or cause
to be done any and all things in connection with such servicing and
administration that it may deem necessary or desirable.
(c) Upon determining that a Servicing Transfer Event has occurred with
respect to any Mortgage Loan and if the Master Servicer is not also the Special
Servicer, the Master Servicer shall promptly give notice thereof, and deliver
the related Servicing File, to the Special Servicer and shall use reasonable
efforts to provide the Special Servicer with all information, documents (or
copies thereof) and records (including records stored electronically on
computer tapes, magnetic discs and the like) relating to the Mortgage Loan and
reasonably requested by the Special Servicer to enable it to assume its
functions hereunder with respect thereto without acting through a Sub-Servicer.
The Master Servicer shall use reasonable efforts to comply with the preceding
sentence within five Business Days of the occurrence of each related Servicing
Transfer Event. The Special Servicer may, as to any delinquent Mortgage Loan,
prior to the occurrence of a Servicing Transfer Event with respect thereto,
upon reasonable request, obtain the foregoing documents and information.
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Upon determining that a Specially Serviced Mortgage Loan has become a
Corrected Mortgage Loan and if the Master Servicer is not also the Special
Servicer, the Special Servicer shall promptly give notice thereof, and return
the related Servicing File, to the Master Servicer and upon giving such notice,
and returning such Servicing File, to the Master Servicer, the Special
Servicer's obligation to service such Mortgage Loan, and the Special Servicer's
right to receive the Special Servicing Fee with respect to such Mortgage Loan,
shall terminate, and the obligations of the Master Servicer to service and
administer such Mortgage Loan in accordance with this Agreement shall resume.
Notwithstanding other provisions in this Agreement to the contrary,
the Master Servicer shall remain responsible for the billing and collection,
accounting, data collection, reporting and other basic Master Servicer
administrative functions with respect to Specially Serviced Mortgage Loans,
provided that the Special Servicer shall establish procedures for the Master
Servicer as to the application of receipts and tendered payments and shall have
the exclusive responsibility for and authority over all contacts with and
notices to Mortgagors and similar matters relating to each Specially Serviced
Mortgage Loan and the related Mortgaged Property.
(d) The Master Servicer and Special Servicer will each be required to
service and administer each of the respective groups of Cross-Collateralized
Mortgage Loans as a single Mortgage Loan as and when it deems necessary and
appropriate, consistent with the Servicing Standard. If any
Cross-Collateralized Mortgage Loan becomes a Specially Serviced Mortgage Loan,
then each other Mortgage Loan with which it is cross-collateralized shall also
become a Specially Serviced Mortgage Loan. Similarly, no Cross-Collateralized
Mortgage Loan may subsequently become a Corrected Mortgage Loan, unless and
until all Servicing Transfer Events in respect of each other Mortgage Loan with
which it is cross-collateralized, are remediated or otherwise addressed as
contemplated above.
(e) Notwithstanding anything in this Agreement to the contrary, in the
event that the Master Servicer and the Special Servicer are the same Person,
all notices, certificates, information and consents required to be given by the
Master Servicer to the Special Servicer or vice versa shall be deemed to be
given without the necessity of any action on such Person's part.
(f) The relationship of each of the Master Servicer and the Special
Servicer to the Trustee and, unless the same Person acts in both capacities, to
each other under this Agreement is intended by the parties to be that of an
independent contractor and not of a joint venturer, partner or agent. Unless
the same person acts in both capacities, the Master Servicer shall have no
responsibility for the performance of the Special Servicer of its duties under
this Agreement, and the Special Servicer shall have no responsibility for the
performance of the Master Servicer under this Agreement.
SECTION 8.2. COLLECTION OF MORTGAGE LOAN PAYMENTS.
(a) The Master Servicer (or the Special Servicer with respect to the
Specially Serviced Mortgage Loans) shall, in accordance with the Servicing
Standard, make reasonable efforts to collect all payments called for under the
terms and provisions of the Mortgage Loans, and shall follow procedures which
are consistent with the Servicing Standard; provided, however, that nothing
herein contained shall be construed as an express or implied guarantee by the
Master Servicer or the Special Servicer of the collectability of the Mortgage
Loans. Consistent with the foregoing, the Master Servicer may in its discretion
waive any Penalty Charge in connection with any delinquent payment on a
Mortgage Loan (other than a Specially Serviced Mortgage Loan) and the Special
Servicer may in its discretion waive any Penalty Charge in connection with any
delinquent payment on a Specially Serviced Mortgage Loan.
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(b) With respect to each Mortgage Loan, if any Lock-Box Agreement or
similar agreement is required by the terms of the related Mortgage, the Master
Servicer shall establish and maintain one or more accounts ("LOCK-BOX
ACCOUNTS") to be held outside the Trust and maintained by the Master Servicer
in accordance with the terms of the related Mortgage. Subject to the terms of
the related Mortgage, any Lock-Box Agreement or similar agreement, Lock-Box
Accounts shall be Eligible Accounts. The Master Servicer shall apply the funds
deposited in such accounts in accordance with the terms of the related
Mortgage, any Lock-Box Agreement and/or any similar agreement and in accordance
with the Servicing Standard.
(c) The Master Servicer and the Special Servicer shall not take any
enforcement action other than requests for payment with respect to payment of
Excess Interest or principal in excess of the principal component of the
Monthly Payment prior to the final maturity date. The Master Servicer will also
be permitted to forgive the payment of Excess Interest under the circumstances
set forth in Section 8.18.
SECTION 8.3. COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR ITEMS;
SERVICING ACCOUNTS AND RESERVE ACCOUNTS.
(a) The Master Servicer shall establish and maintain one or more
accounts (the "SERVICING ACCOUNTS") into which all Escrow Payments shall be
deposited and retained. Subject to the terms of the related Mortgage Note and
Mortgage, Servicing Accounts shall be Eligible Accounts. Withdrawals of amounts
so collected in respect of any Mortgage Loan (and interest earned thereon) from
a Servicing Account may be made only to: (i) effect payment of real estate
taxes, assessments, insurance premiums, ground rents (if applicable) and
comparable items in respect of the related Mortgaged Property; (ii) reimburse
the Master Servicer, the Special Servicer, the Trustee or the Fiscal Agent, as
applicable, for any unreimbursed Servicing Advances and unreimbursed Advance
Interest made thereby to cover any of the items described in the immediately
preceding clause (i); (iii) refund to the related Mortgagor any sums as may be
determined to be overages; (iv) pay interest, if required and as described
below, to the related Mortgagor on balances in the Servicing Account (or, if
and to the extent not payable to the related Mortgagor, to pay such interest to
the Master Servicer); or (v) clear and terminate the Servicing Account at the
termination of this Agreement in accordance with Section 10.1. As part of its
servicing duties, the Master Servicer shall pay or cause to be paid to the
Mortgagors interest on funds in Servicing Accounts maintained thereby, to the
extent required by law or the terms of the related Mortgage Loan, and otherwise
may retain such amounts.
(b) The Master Servicer shall (i) maintain accurate records with
respect to each related Mortgaged Property reflecting the status of real estate
taxes, assessments and other similar items that are or may become a lien
thereon and the status of insurance premiums and any ground rents payable in
respect thereof and (ii) use reasonable efforts to obtain, from time to time,
all bills for the payment of such items (including renewal premiums); and the
Master Servicer shall effect payment thereof (in the case of Specially Serviced
Mortgage Loans, at the direction of the Special Servicer) prior to the
applicable penalty or termination date, employing for such purpose Escrow
Payments as allowed under the terms of the related Mortgage Loan. To the extent
that a Mortgage Loan does not require a Mortgagor to escrow for the payment of
real estate taxes, assessments, insurance premiums, ground rents (if
applicable) and similar items, the Master Servicer (or the Special Servicer
with respect to the Specially Serviced Mortgaged Loans) shall use efforts
consistent with the Servicing Standard to cause the related Mortgagor to comply
with the requirements of the related Mortgage for payments in respect of such
items at the time they first become due.
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(c) In accordance with the Servicing Standard, the Master Servicer (at
the direction of the Special Servicer in the case of Specially Serviced
Mortgage Loans) shall, subject to Section 4.4, advance with respect to each
related Mortgaged Property all such funds as are necessary for the purpose of
effecting the payment of (i) real estate taxes, assessments and other similar
items that are or may become a lien thereon, (ii) ground rents (if applicable),
and (iii) premiums on Insurance Policies, in each instance if and to the extent
that Escrow Payments, if any, collected from the related Mortgagor are
insufficient to pay such item when due and the related Mortgagor has failed to
pay such item on a timely basis. All such advances shall be reimbursable in the
first instance from related collections from the Mortgagors, and further as
provided in Section 5.2. No costs incurred by the Master Servicer or the
Special Servicer in effecting the payment of real estate taxes, assessments,
ground rents (if applicable) and other similar items on or in respect of the
Mortgaged Properties shall, for purposes hereof, including, without limitation,
calculating monthly distributions to Certificateholders, be added to the unpaid
principal balances of the related Mortgage Loans, notwithstanding that the
terms of such Mortgage Loans so permit.
(d) The Master Servicer shall establish and maintain, as applicable,
one or more accounts (the "RESERVE ACCOUNTS"), into which all Reserve Funds, if
any, shall be deposited and retained. Withdrawals of amounts so deposited may
be made to pay for, or to reimburse the related Mortgagor in connection with,
the related repairs, environmental remediation, replacements, capital
improvements and/or similar items at the related Mortgaged Property if such
repairs, environmental remediation, replacements, capital improvements and/or
similar items have been completed, and such withdrawals are made, in accordance
with the Servicing Standard and the terms of the related Mortgage Note,
Mortgage and any agreement with the related Mortgagor governing such Reserve
Funds. Subject to the terms of the related Mortgage Note and Mortgage, all
Reserve Accounts shall be Eligible Accounts. Within six months of the Closing
Date, the Master Servicer shall deliver a report to the Depositor setting forth
the status of each of the Reserve Accounts for each of the Reserve Accounts
listed on Schedule IV and the actions taken in respect of the purposes for
which the Reserve Accounts were established and any recommendations in respect
thereof.
SECTION 8.4. SUB-SERVICING AGREEMENTS.
(a) The Master Servicer and the Special Servicer may each enter into
Sub-Servicing Agreements for the servicing and administration of all or a part
of the Mortgage Loans for which it is responsible hereunder, provided that, in
each case, the Sub-Servicing Agreement: (i) is consistent with this Agreement
and shall provide that the Sub-Servicer shall maintain errors and omissions
insurance and fidelity bond coverage as required of the Master Servicer or the
Special Servicer under Section 8.5 hereof, (ii) provides that if the Master
Servicer or the Special Servicer, as the case may be, shall for any reason no
longer be the Master Servicer or Special Servicer, as applicable, hereunder
(including, without limitation, by reason of an Event of Default and its
termination hereunder), the Trustee or its designee may either thereupon assume
all of the rights and, except to the extent they arose prior to the date of
assumption, obligations of the Master Servicer or the Special Servicer, as the
case may be, under such agreement or, alternatively, may terminate such
agreement without payment of any termination fee or penalty out of the Trust;
(iii) in the case of a Sub-Servicing Agreement entered into by the Master
Servicer, expressly or effectively provides that (if the Master Servicer and
the Special Servicer are not the same Person) such
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agreement shall terminate with respect to any Mortgage Loan serviced thereunder
at the time such Mortgage Loan becomes a Specially Serviced Mortgage Loan
(provided that such agreement may provide that such Mortgage Loan may again be
serviced thereunder if it becomes a Corrected Mortgage Loan); (iv) in the case
of a Sub-Servicing Agreement entered into by the Special Servicer, relates only
to Specially Serviced Mortgage Loans or REO Properties and expressly or
effectively provides that (if the Master Servicer and the Special Servicer are
not the same Person) such agreement shall terminate with respect to any such
Mortgage Loan that becomes a Corrected Mortgage Loan; (v) provides that the
Trustee for the benefit of the Certificateholders shall be a third party
beneficiary under such Sub-Servicing Agreement, but that (except to the extent
the Trustee or its designee assumes the obligations of the Master Servicer or
the Special Servicer, as the case may be, thereunder as contemplated by the
immediately preceding clause (ii)) none of the Trust Fund, the Trustee, any
successor Master Servicer or Special Servicer (unless and to the extent that
the successor Master Servicer or the Special Servicer is a party to such
Sub-Servicing Agreement), as the case may be, or any Certificateholder shall
have any duties under such Sub-Servicing Agreement or any liabilities arising
therefrom; (vi) permits any purchaser of a Mortgage Loan pursuant to this
Agreement to terminate such Sub-Servicing Agreement with respect to such
purchased Mortgage Loan at its option and without penalty and (vii) does not
permit the Sub-Servicer any direct rights of indemnification that may be
satisfied out of assets of the Trust Fund. References in this Agreement to
actions taken or to be taken by the Master Servicer or the Special Servicer, as
the case may be, include actions taken or to be taken by a Sub-Servicer on
behalf of the Master Servicer or the Special Servicer, as the case may be; and,
in connection therewith, all amounts advanced by any Sub-Servicer to satisfy
the obligations of the Master Servicer or the Special Servicer, as the case may
be, hereunder to make Servicing Advances and P&I Advances shall be deemed to
have been advanced by the Master Servicer or the Special Servicer, as the case
may be, out of its own funds. For purposes of this Agreement, the Master
Servicer and the Special Servicer each shall be deemed to have received any
payment when the Sub-Servicer receives such payment. Annually, in connection
with the delivery of the Officer's Certificate contemplated in Section 8.12,
the Master Servicer and the Special Servicer each shall identify to the other,
the Trustee and the Depositor any Sub-Servicers then retained thereby.
(b) Each Sub-Servicer shall be authorized to transact business in the
state or states in which the Mortgaged Properties securing the Mortgage Loans
it is to service are situated, if and to the extent required by applicable law.
(c) As part of its servicing activities hereunder, the Master Servicer
and the Special Servicer, for the benefit of the Trustee and the
Certificateholders, shall (at no expense to the Trustee, the Certificateholders
or the Trust Fund) monitor the performance and enforce the obligations of each
Sub-Servicer retained by it under the related Sub-Servicing Agreement. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Sub-Servicing Agreements in accordance with their respective
terms and the pursuit of other appropriate remedies, shall be in such form and
carried out to such an extent and at such time as the Master Servicer or the
Special Servicer, as the case may be, would require were it the owner of the
Mortgage Loans. Subject to the terms of the applicable Sub-Servicing Agreement,
the Master Servicer and the Special Servicer each shall have the right to
remove a Sub-Servicer retained by it at any time it considers such removal to
be in the best interests of Certificateholders.
(d) In the event the Trustee or its designee assumes the rights and
obligations of the Master Servicer or the Special Servicer under any
Sub-Servicing Agreement, the Master Servicer or the Special Servicer, as the
case may be, at its expense shall, upon request of the Trustee, deliver to the
assuming party all documents and records relating to such Sub-Servicing
Agreement and the Mortgage Loans then being serviced thereunder and an
accounting of amounts collected and held on behalf of it thereunder, and
otherwise use reasonable efforts to effect the orderly and efficient transfer
of the Sub-Servicing Agreement to the assuming party.
(e) Notwithstanding any Sub-Servicing Agreement, the Master Servicer
and the Special Servicer each shall remain obligated and liable to the Trustee
and the Certificateholders for the servicing and administration of the Mortgage
Loans in accordance with the provisions of this Agreement
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to the same extent and under the same terms and conditions as if it alone were
servicing and administering the Mortgage Loans for which it is responsible.
(f) Notwithstanding anything to the contrary contained herein, neither
the Master Servicer nor the Special Servicer shall have the right to delegate
to any Sub-Servicer any right granted to the Master Servicer or the Special
Servicer, as applicable, hereunder to modify or foreclose upon any Mortgage
Loan.
SECTION 8.5. MAINTENANCE OF INSURANCE POLICIES; ERRORS AND OMISSIONS
AND FIDELITY COVERAGE.
(a) The Master Servicer shall use reasonable efforts to cause each
Mortgagor to maintain in respect of the related Mortgaged Property all
insurance coverage (other than earthquake insurance) as is required under the
related Mortgage; provided that if any Mortgage permits the holder thereof to
dictate to the Mortgagor the insurance coverage to be maintained on such
Mortgaged Property, the Master Servicer, or the Special Servicer in the case of
Specially Serviced Mortgage Loans, shall impose such insurance requirements as
are consistent with the Servicing Standard. If a Mortgagor fails to maintain
such insurance, the Master Servicer or the Special Servicer in the case of
Specially Serviced Mortgage Loans, shall (to the extent available at
commercially reasonable rates) obtain such insurance (which may be through a
master or single interest policy), and the cost (including any deductible
relating to such insurance) of such insurance (or in the case of a master or
single interest policy, the incremental cost (including any deductible relating
to such insurance) of such insurance relating to the specific Mortgaged
Property), shall be a Servicing Advance (subject to the limitations set forth
in Section 4.2(a)) recoverable by the Master Servicer, or the Special Servicer
in the case of Specially Serviced Mortgage Loans, pursuant to Section 5.2. If
at any time a Mortgaged Property is located in an area identified in the Flood
Hazard Boundary Map or Flood Insurance Rate Map issued by the Federal Emergency
Management Agency as having special flood hazards or it becomes located in such
area by virtue of remapping conducted by such agency (and flood insurance has
been made available), then upon the Master Servicer or the Special Servicer
becoming aware of such fact (using efforts consistent with the Servicing
Standard), the Master Servicer, or the Special Servicer in the case of
Specially Serviced Mortgage Loans, shall, if and to the extent that the
Mortgage Loan requires the Mortgagor or permits the Mortgagee to require the
Mortgagor to do so, use efforts consistent with the Servicing Standard to cause
the related Mortgagor to maintain a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
in an amount representing coverage of not less than the least of (i) the unpaid
principal balance of the related Mortgage Loan, (ii) the full insurable value
of such Mortgaged Property, (iii) the maximum amount of insurance coverage
available under the National Flood Insurance Act of 1968, the Flood Disaster
Protection Act of 1973 or the National Flood Insurance Reform Act of 1994, as
amended, and (iv) 100% of the replacement cost of the improvements on such
Mortgaged Property. If (i) the Mortgagor is required by the terms of the
Mortgage Loan to maintain such insurance (or becomes obligated by virtue of the
related Mortgaged Property becoming located in such area by virtue of such
remapping) or (ii) the terms of the Mortgage Loan permit the mortgagee to
require the Mortgagor to obtain such insurance, the Master Servicer shall
promptly notify the Mortgagor of its obligation to obtain such insurance. If
the Mortgagor fails to obtain such flood insurance within 120 days of such
notification, the Master Servicer, or the Special Servicer in the case of
Specially Serviced Mortgage Loans, shall obtain such insurance (to the extent
available at commercially reasonable rates), and the cost of such insurance
shall be a Servicing Advance recoverable by the Master Servicer, or the Special
Servicer in the case of Specially Serviced Mortgage Loans, pursuant to Section
5.2.
The Special Servicer shall cause to be maintained for each REO
Property no less insurance coverage than was previously required of the
Mortgagor under the related Mortgage. All such
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insurance policies shall contain a "standard" mortgagee clause or shall
identify the Trustee as the named insured, as applicable, with any loss payable
to the Master Servicer (in the case of Mortgaged Properties) or the Special
Servicer (in the case of REO Properties) on behalf of the Trustee. Any amounts
collected by the Master Servicer or the Special Servicer under any such
policies (other than amounts to be applied to the restoration or repair of the
related Mortgaged Property or REO Property or amounts to be released to the
related Mortgagor, in each case in accordance with applicable law, the terms of
the related Mortgage Loan documents and the Servicing Standard) shall be
deposited in the Collection Account, subject to withdrawal pursuant to Section
5.2. Any cost incurred by the Master Servicer or the Special Servicer in
maintaining any such insurance shall not, for purposes hereof, including,
without limitation, calculating monthly distributions to Certificateholders, be
added to the outstanding principal balance of the related Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so permit.
(b) (i) If the Master Servicer or the Special Servicer, as applicable,
causes any Mortgaged Property or REO Property to be covered by a blanket
insurance policy, which provides protection equivalent to the individual
policies otherwise required, the Master Servicer or Special Servicer will
conclusively be deemed to have satisfied its respective obligations to cause
hazard insurance to be maintained on such Mortgaged Properties or REO
Properties. Such policy may contain a deductible clause, in which case the
Master Servicer or the Special Servicer, as applicable, will in the event that
(i) there shall not have been maintained on the related Mortgaged Property or
REO Property a policy otherwise complying with the provisions of Section
3.07(a), and (ii) a loss occurs that would have been covered by such a policy
had it been maintained, immediately deposit into the Certificate Account (or
into the Servicing Account if insurance proceeds are to be applied to the
repair or restoration of the applicable Mortgaged Property or disbursed to the
related Mortgagor) from its own funds the amount not otherwise payable under
such policy because of such deductible, to the extent that any such deductible
exceeds the deductible limitation that pertained to the related Mortgage Loan,
or, in the absence of any such deductible limitation, the deductible limitation
which is consistent with the Servicing Standard. The Master Servicer and the
Special Servicer each agrees to prepare and present, on behalf of itself, the
Trustee and Certificateholders, claims under any such blanket insurance policy
maintained by it in a timely fashion in accordance with the terms of such
policy. The incremental cost of such insurance allocable to any Mortgaged
Property or REO Property, if not borne by the Mortgagor, will be paid by the
Master Servicer as a Servicing Advance.
(ii) If the Master Servicer or the Special Servicer, as applicable,
causes any Mortgaged Property or REO Property to be covered by a master force
placed insurance policy, which provides protection equivalent to the individual
policies otherwise required, the Master Servicer or Special Servicer shall
conclusively be deemed to have satisfied its respective obligations to cause
hazard insurance to be maintained on such Mortgaged Properties and/or REO
Properties. Such policy may contain a deductible clause, in which case the
Master Servicers or the Special Servicer, as applicable, shall in the event
that (i) there shall not have been maintained on the related Mortgaged Property
or REO Property a policy otherwise complying with the provisions of Section
3.07(a), and (ii) there shall have been one or more losses which would have
been covered by such a policy had it been maintained, immediately deposit into
the Certificate Account (or into the Servicing Account if insurance proceeds
are to be applied to the repair or restoration of the applicable Mortgaged
Property or disbursed to the related Mortgagor) from its own funds the amount
not otherwise payable under such policy because of such deductible to the
extent that any such deductible exceeds the deductible limitation that
pertained to the related Mortgage Loan, or, in the absence of any such
deductible limitation, the deductible limitation which is consistent with the
Servicing Standard. The Master Servicer and the Special Servicer each agrees to
prepare and present, on behalf of itself, the Trustee and Certificateholders,
claims under any such master force placed insurance policy maintained by it in
a timely fashion in accordance with the terms of such policy. The incremental
cost of such insurance allocable to any Mortgaged Property or
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REO Property, if not borne by the Mortgagor, will be paid by the Master
Servicer as a Servicing Advance.
(c) Each of the Master Servicer and the Special Servicer shall obtain
and maintain at its own expense and keep in full force and effect throughout
the term of this Agreement a blanket fidelity bond and an errors and omissions
insurance policy covering its officers and employees and other persons acting
on behalf of it in connection with its activities under this Agreement. The
amount of coverage shall be at least equal to the coverage that would be
required by FNMA or FHLMC, whichever is greater, with respect to the Master
Servicer or Special Servicer, as the case may be, if the Master Servicer or
Special Servicer, as the case may be, were servicing and administering the
Mortgage Loans and/or REO Properties for which it is responsible hereunder for
FNMA or FHLMC. Coverage of the Master Servicer or the Special Servicer under a
policy or bond obtained by an Affiliate of such Person and providing the
coverage required by this Section 8.5(c) shall satisfy the requirements of this
Section 8.5(c).
(d) All insurance coverage required to be maintained by the Master
Servicer or the Special Servicer under this Section 8.5 shall be obtained from
Qualified Insurers (A) whose claims-paying ability is rated (or the obligations
of which are guaranteed or backed by a company having such claims paying
ability or rating) at least investment grade (or, in the case of a blanket
hazard policy obtained in accordance with Section 8.5(b), rated in one of the
two highest ratings categories) by any Rating Agency or (B) who are (as
evidenced by the receipt of Rating Agency Confirmation) otherwise acceptable to
each Rating Agency.
SECTION 8.6. ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION
AGREEMENTS; SUBORDINATE FINANCING.
(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 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
Special Servicer, on behalf of the Trustee as the mortgagee of record, shall
exercise (or, subject to Section 8.18(a), waive its right to exercise) any
right it may have with respect to such Mortgage Loan (x) to accelerate the
payments thereon, or (y) to withhold its consent to any such sale or other
transfer, in a manner consistent with the Servicing Standard; provided,
however, that if the Mortgaged Property to be sold or transferred relates to a
Mortgage Loan that constitutes 2% or more of the Stated Principal Balance of
all the Mortgage Loans (taking into account for the purposes of such
calculation, (a) in the case of any such Mortgage Loan that is a
Cross-Collateralized Mortgage Loan, any Mortgage Loan with which it is
cross-collateralized and (b) in the case of any such Mortgage Loan with respect
to which the related Mortgagor or its affiliate is a Mortgagor with respect to
one or more other Mortgage Loans, such other Mortgage Loan or Mortgage Loans),
then any such sale or transfer shall require Rating Agency Confirmation. In the
event that the Special Servicer intends or is required, in accordance with the
preceding sentence, the Mortgage Loan documents or applicable law, to permit
the transfer of any Mortgaged Property, the Special Servicer, if consistent
with the Servicing Standard, may enter into a substitution of liability
agreement, pursuant to which the original Mortgagor and any original guarantors
are released from liability, and the transferee
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and any new guarantors are substituted therefor and become liable under the
Mortgage Note and any related guaranties. In connection with any such transfer
and substitution, the Special Servicer may require from the related Mortgagor a
reasonable and customary fee for the additional services performed by it,
together with reimbursement for any related costs and expenses incurred by it
(but only to the extent that charging such fee will not be a significant
modification of the Mortgage Loan for purposes of the REMIC Provisions or
result in an Adverse REMIC Event in respect of any REMIC Pool). The Special
Servicer shall promptly notify the Trustee and the Master Servicer of any such
agreement and forward the original thereof to the Trustee for inclusion in the
related Mortgage File (with a copy to the Master Servicer and the Rating
Agencies). In connection with the Rating Agency Confirmation, the Master
Servicer shall prepare and deliver to the Rating Agencies a memorandum
outlining its analysis and recommendation in accordance with the Servicing
Standard, together with copies of all relevant documentation. The Master
Servicer shall also prepare and provide the Rating Agencies with such
memorandum and documentation for all transfer, assumption and encumbrance
consents granted for Mortgage Loans that constitute less than 2% of the Stated
Principal Balance of all of the Mortgage Loans (taking into account clauses (a)
and (b) above), but for which the Master Servicer's decision will be sufficient
and a No Downgrade Confirmation will not be required.
(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 additional lien or
other encumbrance on the related Mortgaged Property; or
(ii) requires the consent of the mortgagee to the creation of any such
additional lien or other encumbrance on the related Mortgaged Property,
then, for so long as such Mortgage Loan is included in the Trust Fund, the
Special Servicer, on behalf of the Trustee as the mortgagee of record, shall
exercise (or, subject to Section 8.18(a)(ii), waive its right to exercise) any
right it may have with respect to such Mortgage Loan (x) to accelerate the
payments thereon, or (y) to withhold its consent to the creation of any such
additional lien or other encumbrance, in a manner consistent with the Servicing
Standard; provided, however, that any such waiver shall require Rating Agency
Confirmation, provided that such Confirmation shall be required of DCR only if
the Mortgage Loan represents 2% or more of the Stated Principal Balance of all
Mortgage Loans (taking into account clauses (a) and (b) of Section 8.6(a)).
(c) Nothing in this Section 8.6 shall constitute a waiver of the
Trustee's right, as the mortgagee of record, to receive notice of any
assumption of a Mortgage Loan, any sale or other transfer of the related
Mortgaged Property or the creation of any additional lien or other encumbrance
with respect to such Mortgaged Property.
(d) Except as otherwise permitted by Section 8.18, neither the Master
Servicer nor the Special Servicer shall agree to modify, waive or amend any
term of any Mortgage Loan in connection with the taking of, or the failure to
take, any action pursuant to this Section 8.6.
(e) In the event that a Mortgagor elects to obtain a release of the
related Mortgaged Property from the lien of the related Mortgage by pledging
defeasance collateral in accordance with the terms of the Mortgage Note, then
the Master Servicer shall, in accordance with the terms of such Mortgage Note,
obtain reasonable assurance that the Certificates will not be subject to a
downgrade, withdrawal or qualification by the Rating Agencies as a result of
such defeasance and that any related
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expenses will be paid for by the Mortgagor. In addition, to the extent
permitted by the Mortgage Loan documents or applicable law, the Master Servicer
shall require an Opinion of Counsel (which shall be at the expense of the
Mortgagor) to the effect that such defeasance will not cause an Adverse REMIC
Event.
(f) Notwithstanding the provisions of Section 8.6(e), if a defeasance
is effected such that (i) the Mortgagor provides U.S. government securities as
defeasance collateral in an amount sufficient to generate cash for loan
payments as and when due under the Mortgage Note, (ii) an independent
accounting firm certifies that such defeasance collateral is sufficient to pay
the Mortgage Note in accordance with its terms, (iii) the loan is assumed (and
the collateral owned) by an entity meeting single purpose bankruptcy-remote
criteria (if the Mortgagor no longer complies), and (iv) counsel provides an
Opinion of Counsel that the Trustee has a perfected security interest in the
defeasance collateral, then no such assurance from DCR shall be required. The
Master Servicer shall not be required to establish and maintain on behalf of
the Mortgagor a single purpose bankruptcy-remote entity. The out-of-pocket
expenses incurred by the Master Servicer with respect to a defeasance pursuant
to this Section 8.6(f) if not required to be paid by the Mortgagor shall
constitute a Servicing Advance.
SECTION 8.7. REALIZATION UPON DEFAULTED MORTGAGE LOANS.
(a) The Master Servicer shall notify the Special Servicer of the
occurrence of a Servicing Transfer Event in respect of any Mortgage Loan and,
subject to Section 8.18, the Special Servicer shall monitor such Mortgage Loan,
evaluate whether the causes of any default thereunder can be corrected over a
reasonable period without significant impairment of the value of the related
Mortgaged Property, initiate corrective action in cooperation with the
Mortgagor if, in the Special Servicer's reasonable and good faith judgment,
cure is likely, and take such other actions as are consistent with the
Servicing Standard. If, in the Special Servicer's reasonable and good faith
judgment, such corrective action has been unsuccessful, no satisfactory
arrangement can be made for collection of delinquent payments and no other
alternative consistent with the Servicing Standard can be negotiated, and the
defaulted Mortgage Loan has not been released from the Trust Fund pursuant to
any provision hereof, then the Special Servicer shall, subject to subsections
(b) through (d) of this Section 8.7, exercise reasonable efforts, consistent
with the Servicing Standard, to foreclose upon or otherwise comparably convert
(which may include an REO Acquisition) the ownership of property securing such
Mortgage Loan. The foregoing is subject to the provision that, in any case in
which a Mortgaged Property shall have suffered damage from an Uninsured Cause,
the Master Servicer and the Special Servicer shall each have the right but not
the obligation to expend its own funds as a Servicing Advance toward the
restoration of such property if it shall determine in its reasonable discretion
(i) that such restoration will increase, on a net present value basis, the net
proceeds of liquidation of such Mortgaged Property to Certificateholders after
reimbursement to itself for such Advances (together with Advance Interest), and
(ii) that such Advances (together with Advance Interest) will be recoverable by
the Master Servicer or Special Servicer, as the case may be, out of the
proceeds of liquidation of such Mortgaged Property, as contemplated in Section
5.2. The Special Servicer (or, at the direction of the Special Servicer, the
Master Servicer) shall be responsible for all other costs and expenses incurred
by it in any such proceedings, subject to its being entitled to reimbursement
therefor as a Servicing Advance as provided in Section 4.2 or Section 5.2, and
further subject to its being entitled to pay out of the related Liquidation
Proceeds any Liquidation Expenses incurred in respect of any Mortgage Loan,
which Liquidation Expenses were outstanding at the time such proceeds are
received. When applicable state law permits the Special Servicer to select
between judicial and non-judicial foreclosure in respect of any Mortgaged
Property, the Special Servicer shall make such selection in a manner consistent
with the Servicing Standard. Nothing contained in this Section 8.7 shall be
construed so as to require the Special Servicer, on behalf of the Trust Fund,
to make a bid on any Mortgaged Property at a foreclosure sale or similar
proceeding that is in
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excess of the fair market value of such property, as determined by the Special
Servicer in its sole judgment taking into account, among other things, the
physical condition of the Mortgaged Property, the state of the local economy,
the Trust's obligation to dispose of any REO Property within the period
specified in Section 8.19, and the results of any Appraisal obtained pursuant
to this Agreement, all such bids to be made in a manner consistent with the
Servicing Standard. If and when the Master Servicer or the Special Servicer
deems it necessary and prudent for purposes of establishing the fair market
value of any Mortgaged Property securing a defaulted Mortgage Loan, whether for
purposes of bidding at foreclosure or otherwise, the Special Servicer is
authorized to have an Appraisal performed with respect to such property (the
cost of which Appraisal shall be covered by, and be reimbursable as, a
Servicing Advance).
(b) The Special Servicer shall not acquire any personal property
pursuant to this Section 8.7 (with the exception of cash or cash equivalents
pledged as collateral for a Mortgage Loan) unless either:
(i) such personal property is incident to real property (within the
meaning of Section 856(e)(1) of the Code) so acquired by the Special
Servicer; or
(ii) the Special Servicer shall have obtained an Opinion of Counsel
(the cost of which may be withdrawn from the Collection Account pursuant to
Section 5.2) to the effect that the holding of such personal property by
the Trust Fund will not cause the imposition of a tax on the Trust Fund or
any REMIC Pool under the REMIC Provisions or cause any of REMIC I, REMIC II
or REMIC III to fail to qualify as a REMIC at any time that any Certificate
is outstanding.
(c) Notwithstanding the foregoing provisions of this Section 8.7,
neither the Master Servicer nor the Special Servicer shall, on behalf of the
Trustee, complete foreclosure proceedings, obtain title to a Mortgaged Property
in lieu of foreclosure or otherwise, have a receiver of rents appointed with
respect to any Mortgaged Property, or take any other action with respect to any
Mortgaged Property, if, as a result of any such action, the Trustee, on behalf
of the Certificateholders, would be considered to hold title to, to be a
"mortgagee-in-possession" of, or to be an "owner" or "operator" of such
Mortgaged Property within the meaning of CERCLA or any comparable law, unless
(as evidenced by an Officer's Certificate to such effect delivered to the
Trustee) the Special Servicer has previously received an Environmental
Assessment in respect of such Mortgaged Property prepared by a Person who
regularly conducts Environmental Assessments and the Special Servicer, based
solely (as to environmental matters and related costs) on the information set
forth in such Environmental Assessment, determines that:
(i) the Mortgaged Property is in compliance with applicable
Environmental Laws or, if not, that acquiring such Mortgaged Property and
taking such actions as are necessary to bring the Mortgaged Property in
compliance therewith is reasonably likely to produce a greater recovery to
Certificateholders on a present value basis than not acquiring such
Mortgaged Property and not taking such actions; and
(ii) there are no circumstances or conditions present at the Mortgaged
Property relating to the use, management or disposal of Hazardous Materials
for which investigations, testing, monitoring, containment, clean-up or
remediation could be required under any applicable environmental laws and
regulations or, if such circumstances or conditions are present for which
any such action could be required, that acquiring such Mortgaged Property
and taking such actions with respect to such Mortgaged Property is
reasonably likely to produce a
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greater recovery to Certificateholders on a present value basis than not
acquiring such Mortgaged Property and not taking such actions.
The cost of any such Environmental Assessment, as well as the cost of any
remedial, corrective or other further action contemplated by clause (i) and/or
clause (ii) of the preceding paragraph, may be withdrawn from the Collection
Account by the Master Servicer as an expense of the Trust pursuant to Section
5.2; and if any such Environmental Assessment so warrants, the Special Servicer
shall, at the expense of the Trust payable out of the Collection Account
pursuant to Section 5.2, perform such additional environmental testing as is
consistent with the Servicing Standard to determine whether the conditions
described in clauses (i) and (ii) of the preceding paragraph have been
satisfied.
(d) If the environmental testing contemplated by subsection (c) above
establishes that either of the conditions set forth in clauses (i) and (ii) of
the first sentence thereof has not been satisfied with respect to any Mortgaged
Property securing a defaulted Mortgage Loan, then the Special Servicer shall
take such action as it deems to be in the best economic interest of the Trust
Fund (other than proceeding to acquire title to the Mortgaged Property) and is
hereby authorized at such time as it deems appropriate to release all or a
portion of such Mortgaged Property from the lien of the related Mortgage.
(e) The Special Servicer shall provide monthly to the Master Servicer,
who shall, in turn, promptly deliver copies thereof to the Trustee, written
reports regarding any actions taken by the Special Servicer with respect to any
Mortgaged Property securing a defaulted Mortgage Loan as to which the
environmental testing contemplated in subsection (c) above has revealed that
either of the conditions set forth in clauses (i) and (ii) of the first
sentence thereof has not been satisfied, in each case until the earliest to
occur of satisfaction of both such conditions, removal of the related Mortgage
Loan from the Trust Fund and release of the lien of the related Mortgage on
such Mortgaged Property. Within 5 days of its receipt thereof, the Trustee
shall deliver a copy of each such report to the Depositor and each Rating
Agency.
(f) The Special Servicer shall report to the Internal Revenue Service
and the related Mortgagor, in the manner required by applicable law, the
information required to be reported regarding any Mortgaged Property which is
abandoned or foreclosed. The Special Servicer shall deliver a copy of any such
report to the Trustee and the Master Servicer.
(g) The Special Servicer shall have the right to determine, in
accordance with the Servicing Standard, the advisability of the maintenance of
an action to obtain a deficiency judgment if the laws of the state in which the
Mortgaged Property is located and the terms of the Mortgage Loan permit such an
action.
(h) The Special Servicer shall maintain accurate records, prepared by
a Servicing Officer, of each Final Recovery Determination in respect of a
defaulted Mortgage Loan or REO Property and the basis thereof. Each Final
Recovery Determination shall be evidenced by an Officer's Certificate delivered
to the Trustee and the Master Servicer no later than 10 Business Days following
such Final Recovery Determination.
SECTION 8.8. TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES.
(a) Upon the payment in full of any Mortgage Loan, or the receipt by
the Master Servicer or the Special Servicer of a notification that payment in
full shall be escrowed in a manner customary for such purposes, the Master
Servicer or the Special Servicer, as the case may be, will immediately notify
the Trustee and request delivery of the related Mortgage File. Any such notice
and
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request shall be in the form of a Request for Release signed by a Servicing
Officer and shall include a statement to the effect that all amounts received
or to be received in connection with such payment that are required to be
deposited in the Collection Account pursuant to Section 5.1 have been or will
be so deposited. Within five Business Days (or within such shorter period as
release can reasonably be accomplished if the Master Servicer or the Special
Servicer notifies the Trustee of an exigency) of receipt of such notice and
request, the Trustee shall release, or cause any related Custodian to release,
the related Mortgage File to the Master Servicer or the Special Servicer,
whichever requested it. No expenses incurred in connection with any instrument
of satisfaction or deed of reconveyance shall be chargeable to the Collection
Account.
(b) From time to time as is appropriate for servicing or foreclosure
of any Mortgage Loan, the Master Servicer or the Special Servicer may deliver
to the Trustee a Request for Release signed by a Servicing Officer thereof.
Upon receipt of the foregoing, the Trustee shall deliver or cause the related
Custodian to deliver, the Mortgage File or any document therein to the Master
Servicer or the Special Servicer, as the case may be. Upon return of such
Mortgage File or such document to the Trustee or the related Custodian, or the
delivery to the Trustee of a certificate of a Servicing Officer stating that
such Mortgage Loan was liquidated and that all amounts received or to be
received in connection with such liquidation that are required to be deposited
into the Collection Account pursuant to Section 5.1 have been or will be so
deposited, or that such Mortgage Loan has become an REO Mortgage Loan, the
Request for Release shall be released by the Trustee to the Master Servicer or
the Special Servicer, as applicable.
(c) Within five Business Days (or within such shorter period as
delivery can reasonably be accomplished if the Special Servicer notifies the
Trustee of an exigency) of receipt thereof, the Trustee shall execute and
deliver to the Special Servicer any court pleadings, requests for trustee's
sale or other documents necessary to the foreclosure or trustee's sale in
respect of a Mortgaged Property or to any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Mortgage or to obtain a
deficiency judgment, or to enforce any other remedies or rights provided by the
Mortgage Note or Mortgage or otherwise available at law or in equity. The
Special Servicer shall be responsible for the preparation of all such documents
and pleadings. When submitted to the Trustee for signature, such documents or
pleadings shall be accompanied by a certificate of a Servicing Officer
requesting that such pleadings or documents be executed by the Trustee and
certifying as to the reason such documents or pleadings are required and that
the execution and delivery thereof by the Trustee will not invalidate or
otherwise affect the lien of the related Mortgage, except for the termination
of such a lien upon completion of the foreclosure or trustee's sale.
SECTION 8.9. DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF MASTER
SERVICER OR SPECIAL SERVICER TO BE HELD FOR TRUSTEE FOR THE BENEFIT OF
CERTIFICATEHOLDERS.
Notwithstanding any other provisions of this Agreement, the Master
Servicer and the Special Servicer shall each transmit to the Trustee, to the
extent required by this Agreement, all documents and instruments coming into
the possession of the Master Servicer or the Special Servicer, as the case may
be, from time to time and shall account fully to the Trustee for any funds
received or otherwise collected thereby, including Liquidation Proceeds,
Condemnation Proceeds or Insurance Proceeds in respect of any Mortgage Loan or
REO Property. All Mortgage Loan documents and funds collected or held by, or
under the control of, the Master Servicer or the Special Servicer in respect of
any Mortgage Loans and/or REO Properties, whether from the collection of
principal and interest payments or from Liquidation Proceeds, Condemnation
Proceeds or Insurance Proceeds or otherwise, including any funds on deposit in
the Collection Account, shall be held by the Master Servicer or the Special
Servicer,
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as the case may be, for and on behalf of the Trustee and the Certificateholders
and shall be and remain the sole and exclusive property of the Trustee, subject
to the applicable provisions of this Agreement. The Master Servicer and the
Special Servicer each agrees that it shall not create, incur or subject any
Mortgage Loan documents or any funds that are deposited in the Collection
Account or any Lock-Box Account, Reserve Account or Servicing Account, or any
funds that otherwise are or may become due or payable to the Trustee, to any
claim, lien, security interest, judgment, levy, writ of attachment or other
encumbrance, or assert by legal action or otherwise any claim or right of
setoff against any Mortgage Loan documents or any funds collected on, or in
connection with, a Mortgage Loan or REO Property, except, however, that the
Master Servicer and the Special Servicer each shall be entitled to receive from
any such funds any amounts that are properly due and payable to the Master
Servicer or the Special Servicer, as the case may be, under this Agreement.
SECTION 8.10. SERVICING COMPENSATION.
(a) As compensation for its activities hereunder, the Master Servicer
shall be entitled to receive the Master Servicing Fee with respect to each
Mortgage Loan, including without limitation each Specially Serviced Mortgage
Loan and each REO Mortgage Loan. As to each Mortgage Loan, including without
limitation each Specially Serviced Mortgage Loan and each REO Mortgage Loan,
the Master Servicing Fee shall accrue on the related Stated Principal Balance
of such Mortgage Loan outstanding from time to time at the applicable Master
Servicing Fee Rate and shall be computed for the same period respecting which
any related interest payment due or deemed due on such Mortgage Loan is
computed. The Master Servicing Fee with respect to any Mortgage Loan or REO
Mortgage Loan shall cease to accrue if a Liquidation Event occurs in respect
thereof. The Master Servicing Fee shall be payable monthly, on a loan-by-loan
basis, from payments of interest on each Mortgage Loan, REO Income allocable as
interest on each REO Mortgage Loan and the interest portion of P&I Advances on
each Mortgage Loan, including without limitation each REO Mortgage Loan. The
Master Servicer shall be entitled to recover unpaid Master Servicing Fees in
respect of any Mortgage Loan, including without limitation each REO Mortgage
Loan, out of that portion of related Insurance Proceeds, Condemnation Proceeds,
Liquidation Proceeds, Repurchase Proceeds or payments of Substitution Shortfall
Amounts allocable as recoveries of interest, to the extent permitted by Section
5.2. The Master Servicer's right to receive the Master Servicing Fee may not be
transferred in whole or in part except in connection with the transfer of all
of the Master Servicer's responsibilities and obligations under this Agreement.
The Master Servicer shall be entitled to additional master servicing
compensation ("ADDITIONAL MASTER SERVICING COMPENSATION") in the form of:
(i) 50% of any modification fees and assumption fees and 100% of any
available similar or ancillary fees not otherwise addressed herein and
Penalty Charges collected on Mortgage Loans other than Specially Serviced
Mortgage Loans and REO Mortgage Loans, but only to the extent actually paid
by the related Mortgagor and to the extent that all amounts then due and
payable with respect to the related Mortgage Loan (including Advance
Interest) have been paid and, with respect to Penalty Charges only, are not
needed to pay Advance Interest with respect to any other Mortgage Loan;
(ii) any Prepayment Interest Excesses collected on the Mortgage Loans,
including without limitation Specially Serviced Mortgage Loans and REO
Mortgage Loans, but only to the extent that the aggregate of all such
Prepayment Interest Excesses collected during each Collection Period
exceeds the Prepayment Interest Shortfalls incurred during such Collection
Period;
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(iii) any interest and other income earned on the investment of funds
in the Collection Account, but only to the extent not applied to offset
losses on other investments of funds in the Collection Account, and
(iv) any interest and other income earned on the investment of funds
in the Servicing Accounts maintained by the Master Servicer, but only to
the extent not required to be paid to Mortgagors under applicable law or
the terms of the respective Mortgage Loan documents.
(b) As compensation for its activities hereunder, the Special Servicer
shall be entitled to receive the Special Servicing Fee with respect to each
Specially Serviced Mortgage Loan and each REO Mortgage Loan. As to each
Specially Serviced Mortgage Loan and each REO Mortgage Loan, the Special
Servicing Fee shall accrue on the related Stated Principal Balance of such
Mortgage Loan outstanding from time to time at the Special Servicing Fee Rate
and shall be computed for the same period respecting which any related interest
payment due on such Specially Serviced Mortgage Loan or deemed to be due on
such REO Mortgage Loan is computed. The Special Servicing Fee with respect to
each Specially Serviced Mortgage Loan and each REO Mortgage Loan shall cease to
accrue if a Liquidation Event occurs in respect thereof. As to each Specially
Serviced Mortgage Loan and each REO Mortgage Loan, earned but unpaid Special
Servicing Fees shall be payable monthly out of [the same sources and at the
same time (but separate from) Master Servicing Fees payable to the Master
Servicer in respect of such Specially Serviced Mortgage Loans or REO Mortgage
Loans].
As further compensation for its activities hereunder, the Special
Servicer shall be entitled to receive the Workout Fee with respect to each
Corrected Mortgage Loan. As to each Corrected Mortgage Loan, the Workout Fee
shall be payable from, and shall be calculated by application of the Workout
Fee Rate to, each collection of interest and principal received on such
Mortgage Loan for so long as it remains a Corrected Mortgage Loan. The Workout
Fee with respect to any Corrected Mortgage Loan will cease to be payable if a
Servicing Transfer Event occurs with respect thereto or if the related
Mortgaged Property becomes an REO Property, provided that a new Workout Fee
will become payable if and when such Mortgage Loan again becomes a Corrected
Mortgage Loan. If the Special Servicer is terminated other than for cause or
resigns in accordance with Section 8.24, it shall retain the right to receive
any and all Workout Fees payable in respect of Mortgage Loans that became
Corrected Mortgage Loans during the period that it acted as Special Servicer
and were still such at the time of such termination or resignation (and the
successor Special Servicer shall not be entitled to any portion of such Workout
Fees), in each case until the Workout Fee for any such loan ceases to be
payable in accordance with the preceding sentence.
As further compensation for its activities hereunder, the Special
Servicer shall also be entitled to receive a Liquidation Fee with respect to
each Specially Serviced Mortgage Loan or REO Property as to which it receives
any full or discounted payoff or any Liquidation Proceeds (other than in
connection with the purchase of any such Specially Serviced Mortgage Loan or
REO Property by any Person entitled to effect an optional termination of the
Trust pursuant to Section 10.01). The Liquidation Fee with respect to any such
Specially Serviced Mortgage Loan will not be payable if such Mortgage Loan
becomes a Corrected Mortgage Loan. Notwithstanding anything herein to the
contrary, no Liquidation Fee will be payable from, or based upon the receipt
of, Liquidation Proceeds collected as a result of any purchase of a Specially
Serviced Mortgage Loan or REO Property described in the parenthetical to the
first sentence of this paragraph.
The Special Servicer shall be entitled to additional special servicing
compensation ("ADDITIONAL SPECIAL SERVICING COMPENSATION") in the form of 100%
of any modification fees,
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assumption fees, ancillary fees not otherwise addressed herein and, to the
extent not otherwise applied to pay Advance Interest as provided herein,
Penalty Charges, collected on Specially Serviced Mortgage Loans and REO
Mortgage Loans and 50% of any modification fees and assumption fees collected
on Mortgage Loans other than Specially Serviced Mortgage Loans and REO Mortgage
Loans.
(c) The Master Servicer and the Special Servicer shall each be
required to pay out of its own funds all overhead and general and
administrative expenses incurred by it in connection with its servicing
activities hereunder (including, without limitation, payment of any amount due
and owing to any Sub-Servicers retained by it and the premiums for any blanket
policy obtained by it insuring against hazard losses pursuant to Section
8.5(b)), if and to the extent such expenses are not payable directly out of the
Collection Account, and neither the Master Servicer nor the Special Servicer,
as the case may be, shall be entitled to reimbursement except as expressly
provided in this Agreement. In the event that Rating Agency Confirmation is
required in connection with any exercise of rights by the Master Servicer or
the Special Servicer, as applicable, under any Mortgage Loan, the Master
Servicer or Special Servicer, as the case may be, shall use its reasonable
efforts to cause the related Borrower to pay any fee required by the applicable
Rating Agency for such confirmation, and if the Borrower does not pay such fee,
then it shall be paid by the Master Servicer as a Servicing Advance.
SECTION 8.11. MASTER SERVICER REPORTS; ACCOUNT STATEMENTS.
(a) The Master Servicer shall deliver to the Trustee, no later than
2:00 p.m. Eastern time on the Report Date, the Master Servicer Remittance
Report with respect to the related Distribution Date. The Special Servicer
shall provide all information relating to Specially Serviced Mortgage Loans and
REO Properties to permit the Master Servicer to satisfy its duties in this
Section 8.11 on or before the date that is one Business Day after the
Determination Date.
(b) The Master Servicer shall deliver to the Trustee within 45 days
following each Master Servicer Remittance Date a statement setting forth the
status of the Collection Account as of the close of business on such Master
Servicer Remittance Date showing, for the period covered by such statement, the
aggregate of deposits of each type provided in Section 5.1 in, and the
aggregate of withdrawals of each type provided in Section 5.2 from, the
Collection Account.
SECTION 8.12. ANNUAL STATEMENT AS TO COMPLIANCE. The Master Servicer
and the Special Servicer shall each deliver to the Depositor, the Operating
Adviser (or if no Operating Adviser has been elected, the Majority
Certificateholder of the Controlling Class), the Rating Agencies and the
Trustee (and, in the case of the Special Servicer, to the Master Servicer) on
or before April 30 of each year, an Officer's Certificate stating, as to the
signer thereof, that (a) a review of the activities of the Master Servicer or
the Special Servicer, as the case may be, during the preceding calendar year or
portion thereof and of the performance of the Master Servicer or the Special
Servicer, as the case may be, under this Agreement has been made under such
officer's supervision and (b) to the best of such officer's knowledge, based on
such review, the Master Servicer or the Special Servicer, as the case may be,
has fulfilled in all material respects all its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and the
nature and status thereof. The Master Servicer and the Special Servicer shall
each forward to the Rating Agencies a copy of each such statement delivered by
it to the Depositor and the Trustee.
SECTION 8.13. ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT.
On or before April 30 of each year beginning April 30, 2000, the Master
Servicer at its expense shall cause a firm of
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Accountants to furnish a statement to the Depositor, the Operating Adviser (or
if no Operating Adviser has been elected, the Majority Certificateholder of the
Controlling Class) and the Trustee to the effect that (i) it has obtained a
letter of representation regarding certain matters from the management of the
Master Servicer, which includes an assertion that the Master Servicer has
complied with certain minimum mortgage loan servicing standards (to the extent
applicable to commercial and multifamily mortgage loans), identified in the
Uniform Single Attestation Program for Mortgage Bankers established by the
Mortgage Bankers Association of America, with respect to the servicing of
commercial and multifamily mortgage loans during the most recently completed
calendar year and (ii) on the basis of an examination conducted by such firm in
accordance with standards established by the American Institute of Certified
Public Accountants, such representation is fairly stated in all material
respects, subject to such exceptions and other qualifications that may be
appropriate. In rendering its report such firm may rely, as to matters relating
to the direct servicing of commercial and multifamily mortgage loans by
Sub-Servicers, upon comparable reports of firms of independent certified public
accountants rendered on the basis of examinations conducted in accordance with
the same standards (rendered within one year of such report) with respect to
those Sub-Servicers.
The Special Servicer will deliver to the Depositor, the Operating
Adviser (or if no Operating Adviser has been elected, the Majority
Certificateholder of the Controlling Class), the Trustee and the Master
Servicer an annual accountants' report only if, and in such form as may be,
requested by the Rating Agencies in the form set forth above.
The Master Servicer and the Special Servicer, to the extent
applicable, shall each, with 90 days' prior written notice, use reasonable
efforts to cause the applicable Accountants to cooperate with the Depositor in
conforming any reports delivered pursuant to this Section 8.13 to requirements
imposed by the Securities and Exchange Commission on the Depositor in
connection with the Securities and Exchange Commission's issuance of a
no-action letter relating to the Depositor's reporting requirements in respect
of the Trust Fund pursuant to the Exchange Act.
The Master Servicer and the Special Servicer shall each forward to the
Rating Agencies a copy of each statement delivered by it to the Depositor and
the Trustee pursuant to this Section 8.13.
SECTION 8.14. CERTAIN REPORTS REGARDING THE MORTGAGE LOANS AND THE
MORTGAGED PROPERTIES.
(a) On or before the Report Date in each month, the Master Servicer
shall deliver to the Trustee a report containing information regarding the
Mortgage Loans as of the end of the related Collection Period, which report
will contain substantially the categories of information regarding the Mortgage
Loans set forth in Appendix II to the Memorandum, will be delivered in a format
mutually acceptable to the Master Servicer and the Trustee and will be updated
within a reasonable period after the requisite underlying information is
available. The Master Servicer may maintain a site on the World Wide Web at
which the Master Servicer may make property level information will be
available. The Master Servicer will notify the Trustee, the Depositor and the
Rating Agencies if it elects to post information on such site.
(b) [reserved.]
(c) No later than 1:00 p.m. New York time on the Master Servicer
Remittance Date, the Master Servicer shall deliver or cause to be delivered to
the Trustee the following reports with respect to the Mortgage Loans (and, if
applicable, the related REO Properties), providing the required information as
of the Due Date: (i) a Comparative Financial Status Report, (ii) a Delinquent
Loan Status
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Report; (iii) an Historical Loss Estimate Report; (iv) an Historical Loan
Modification Report; (v) an REO Status Report; and (vi) CSSA Reports. Such
reports shall be presented in writing and on a computer readable medium
reasonably acceptable to the Trustee. The information that pertains to
Specially Serviced Mortgage Loans and REO Properties reflected in such reports
shall be based solely upon the reports delivered by the Special Servicer to the
Master Servicer pursuant to Section 8.29. In the absence of manifest error, the
Master Servicer shall be entitled to conclusively rely upon, without
investigation or inquiry, the information and reports delivered to it by the
Special Servicer and any Borrower, and the Trustee shall be entitled to
conclusively rely upon the Master Servicer's reports and the Special Servicer's
reports without any duty or obligation to recompute, verify or recalculate any
of the amounts and other information stated therein. Any of such reports, the
NOI Adjustment Worksheet and the reports described in sub-section (a). (d), (f)
and (g) of this Section 8.14 may include any disclaimers that the Master
Servicer deems appropriate.
(d) The Master Servicer shall deliver or cause to be delivered to the
Trustee the following materials, in each case to the extent that such materials
or the information on which they are based have been received by the Master
Servicer:
(i) At least annually by June 30th, with respect to each Mortgage Loan
(other than Credit Lease Loans) and REO Mortgage Loan, an Operating
Statement Analysis for the related Mortgaged Property or REO Property as of
the end of the preceding calendar year, together with copies of the
operating statements and rent rolls (but only to the extent the related
Mortgagor is required by the Mortgage to deliver, or otherwise agrees to
provide such information and, with respect to operating statements and rent
rolls for Specially Serviced Mortgage Loans and REO Properties, only to the
extent delivered by the Special Servicer) for the related Mortgaged
Property or REO Property as of the end of the preceding fiscal year. The
Master Servicer shall use its reasonable efforts to obtain such annual
operating statements and rent rolls with respect to each of the Mortgage
Loans other than Credit Lease Loans, Specially Serviced Mortgage Loans or
REO Mortgage Loans, which efforts shall include (if such reports are
required by the terms of the Mortgage Loans) a letter sent to the related
Mortgagor each quarter (followed up with telephone calls) requesting such
annual operating statements and rent rolls until they are received to the
extent such action is consistent with applicable law and the terms of the
Mortgage Loans. In the absence of manifest error, the Master Servicer and
the Special Servicer shall be entitled to rely conclusively on all
information provided by the Borrower and shall have no liability arising
directly or indirectly from the inaccuracy or incompleteness of any
information provided by the Borrower and shall have no duty to verify the
information provided by the Borrower, subject to its compliance with the
Servicing Standard.
(ii) Within thirty days after receipt by the Master Servicer (or
twenty days after receipt from the Special Servicer in the case of a
Specially Serviced Mortgage Loan or REO Property) of any annual operating
statements with respect to any Mortgaged Property (other than a Mortgaged
Property securing a Credit Lease Loan) or REO Property, an NOI Adjustment
Worksheet for such Mortgaged Property (with the annual operating statements
attached thereto as an exhibit).
The Master Servicer shall maintain one Operating Statement Analysis
report for each Mortgaged Property (other than a Mortgaged Property securing a
Credit Lease Loan) and REO Property (to the extent prepared by and received
from the Special Servicer in the case of any REO Property or any Mortgaged
Property constituting security for a Specially Serviced Mortgage Loan). The
Operating Statement Analysis report for each Mortgaged Property (other than any
such Mortgaged Property which is REO Property or constitutes security for a
Specially Serviced Mortgage Loan or a Credit Lease Loan)
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is to be updated by the Master Servicer and such updated report delivered to
the Trustee on the Master Servicer Remittance Date which is no earlier than
thirty days after receipt by the Master Servicer of updated operating
statements for such Mortgaged Property. The Master Servicer will use the
"normalized" column from the NOI Adjustment Worksheet to update the Operating
Statement Analysis report and will use any operating statements received with
respect to any Mortgaged Property (other than any such Mortgaged Property which
is REO Property or constitutes security for a Specially Serviced Mortgage Loan
or a Credit Lease Loan) to update the Operating Statement Analysis report for
such Mortgaged Property, such updates to be completed and copies thereof sent
to the Trustee within thirty days after receipt of the necessary information.
(e) No later than 1:00 p.m. New York time on the Master Servicer
Remittance Date, beginning in December 1998, the Master Servicer shall prepare
and deliver to the Trustee and the Special Servicer, a Watch List of all
Mortgage Loans that the Master Servicer has determined are in jeopardy of
becoming Specially Serviced Mortgage Loans. For this purpose, Mortgage Loans
that are in jeopardy of becoming Specially Serviced Mortgage Loans shall
include, without limitation: (i) Mortgage Loans having a current Debt Service
Coverage Ratio that is 80% or less of the trailing twelve-month Debt Service
Coverage Ratio as of the Cut-off Date or having a current trailing twelve-month
Debt Service Coverage Ratio that is less than 1.00x, (ii) Mortgage Loans as to
which any required inspection of the related Mortgaged Property conducted by
the Master Servicer indicates a problem that the Master Servicer determines can
reasonably be expected to materially adversely affect the cash flow generated
by such Mortgaged Property, (iii) Mortgage Loans which have come to the Master
Servicer's attention in the performance of its duties under this Agreement
(without any expansion of such duties by reason hereof) that (A) any tenant
occupying 25% or more of the space in the related Mortgaged Property has
vacated (without being replaced by a comparable tenant and lease) or been the
subject of bankruptcy or similar proceedings or (B) relate to a borrower or an
affiliate that is the subject of a bankruptcy or similar proceeding, (iv)
Mortgage Loans that are at least one full Collection Period delinquent in
payment, and (v) Mortgage Loans that are within 60 days of maturity. Any such
Watch List may include any disclaimers the Master Servicer deems appropriate.
The Special Servicer shall report to the Master 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 Master Servicer and the Special Servicer shall provide to each other and to
the Trustee written notice of any event that comes to their knowledge with
respect to a Mortgage Loan or REO Property that the Master Servicer or the
Special Servicer, respectively, determines, in accordance with Servicing
Standards, 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.
(f) One Business Day after the Determination Date, the Special
Servicer shall deliver, or cause to be delivered, to the Master Servicer and,
upon the request of any of the Trustee, the Depositor or either Rating Agency,
to such requesting party, the following reports with respect to the Specially
Serviced Mortgage Loans (and, if applicable, the related REO Properties),
providing the required information as of the Due Date: (i) a Delinquent Loan
Status Report; (ii) an Historical Loss Estimate Report; (iii) an Historical
Loan Modification Report; (iv) an REO Status Report; (v) Comparative Financial
Status Reports with respect to all Specially Serviced Mortgage Loans; (vi) a
Watch List; and (vii) CSSA Reports, as defined. Such reports shall be presented
in writing and on a computer readable magnetic medium.
(g) The Special Servicer shall deliver or cause to be delivered to the
Master Servicer and, upon the request of any of the Trustee, the Depositor or
any Rating Agency, to such requesting
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party, the following materials, in each case to the extent that such materials
or the information on which they are based have been received by the Special
Servicer:
(i) Annually, on or before June 10 of each year, commencing with June
10, 1998, with respect to each Specially Serviced Mortgage Loan and REO
Mortgage Loan, an Operating Statement Analysis for the related Mortgaged
Property or REO Property as of the end of the preceding calendar year,
together with copies of the operating statements and rent rolls for the
related Mortgaged Property or REO Property as of the end of the preceding
calendar year. The Special Servicer shall use its best reasonable efforts
in accordance with the Servicing Standard to obtain such annual operating
statements and rent rolls with respect to each Mortgaged Property
constituting security for a Specially Serviced Mortgage Loan and each REO
Property, which efforts shall include a letter sent to the related
Mortgagor or other appropriate party each quarter (followed up with
telephone calls) requesting such annual operating statements and rent rolls
until they are received.
(ii) Within 10 days of receipt by the Special Servicer of any annual
operating statements with respect to any Mortgaged Property relating to a
Specially Serviced Mortgage Loan, or at least six months of operating
information with respect to any REO Property, an NOI Adjustment Worksheet
for such Mortgaged Property or REO Property (with the annual operating
statements attached thereto as an exhibit).
The Special Servicer shall maintain one Operating Statement
Analysis report for each Mortgaged Property securing a Specially Serviced
Mortgage Loan and REO Property. The Operating Statement Analysis report for
each Mortgaged Property which constitutes security for a Specially Serviced
Mortgage Loan or is an REO Property is to be updated by the Special Servicer
and such updated report delivered to the Master Servicer within ten days after
receipt by the Special Servicer of updated operating statements for each such
Mortgaged Property. The Special Servicer will use the "normalized" column from
the NOI Adjustment Worksheet to update the Operating Statement Analysis report
and will use any operating statements received with respect to any Mortgaged
Property which constitutes security for a Specially Serviced Mortgage Loan or
is an REO Property to update the Operating Statement Analysis report for such
Mortgaged Property, such updates to be completed and copies thereof sent to the
Master Servicer within ten days after receipt of the necessary information.
(h) 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 Master Servicer or the Special Servicer pursuant to this Agreement.
(i) The Trustee shall send copies of the reports received by it
pursuant to Sections 8.14(a) and (b) to the Depositor, Heller, the Holders of
the Privately Offered Certificates and each Rating Agency.
(j) All reports prepared by the Master Servicer and Special Servicer
pursuant to this Section 8.14 shall be prepared, to the extent applicable, in
the format recommended by CCSA.
SECTION 8.15. CERTAIN AVAILABLE INFORMATION AND RELATED RIGHTS OF THE
MASTER SERVICER AND THE SPECIAL SERVICER.
(a) Subject to the restrictions described below (and except to the
extent not permitted by law or under any of the Mortgage Loan documents), the
Master Servicer and the Special Servicer shall each also afford the Rating
Agencies, the Depositor, the Trustee, the Fiscal Agent, the Special Servicer,
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the Underwriters, and the Operating Adviser, and the Majority Certificateholder
of the Controlling Class upon reasonable notice and during normal business
hours, reasonable access to any and all additional relevant, non-proprietary
and non-attorney-client-privileged records and documentation in its possession
or under its control regarding the Mortgage Loans, REO Properties and all
accounts, insurance policies and other relevant matters relating to this
Agreement, and access to Servicing Officers of the Master Servicer or Special
Servicing Officers of the Special Servicer, as the case may be, responsible for
its obligations hereunder. Copies (or computer diskettes or other digital or
electronic copies of such information if reasonably available in lieu of paper
copies) of any and all of the foregoing items shall be made available by the
Master Servicer or the Special Servicer, as the case may be, upon request;
provided, however, that the Master Servicer and the Special Servicer shall each
be permitted to require payment by the requesting party (other than the
Depositor, the Trustee, the Underwriters or either Rating Agency) of a sum
sufficient to cover the reasonable expenses actually incurred by the Master
Servicer or the Special Servicer, as the case may be, of providing access or
copies (including electronic or digital copies) of any such information
requested in accordance with the preceding sentence.
(b) Nothing herein shall be deemed to require the Master Servicer or
Special Servicer to confirm, represent or warrant the accuracy of (or to be
liable or responsible for) any other Person's information or report, included
in any communication from the other (unless the Master Servicer and the Special
Servicer are the same Person) or from a Mortgagor. Neither the Master Servicer
nor the Special Servicer shall have any liability to the Depositor, the
Trustee, any Certificateholder, any Certificate Owner, the Underwriters, either
Rating Agency or any other Person to whom it delivers information pursuant to
this Section 8.15 or any other provision of this Agreement for federal, state
or other applicable securities law violations relating to the disclosure of
such information. In the event any Person brings any claims relating to or
arising from the foregoing against the Master Servicer, the Special Servicer,
the Trustee or the Fiscal Agent, the Trust (from amounts held in the Collection
Account from time to time) shall hold harmless and indemnify the Master
Servicer, the Special Servicer, the Trustee or the Fiscal Agent, as the case
may be, from any loss or expense (including attorneys' fees) relating to or
arising from such claims.
(c) The Master Servicer and the Special Servicer shall each produce
the reports required of it under this Agreement; provided, however, that
neither the Master Servicer nor the Special Servicer shall be required to
produce any ad hoc non-standard written reports with respect to the Mortgage
Loans. In the event the Master Servicer or the Special Servicer elects to
provide such reports, it may require the Person requesting such report to pay a
reasonable fee to cover the costs of the preparation thereof. Requests for any
such report shall be made, and any such report shall be disseminated, through
the Trustee.
(d) In connection with providing access to or copies of the items
described in the subsections (a), (b) and/or (c) of this Section 8.15 or in
Section 8.16, the Master Servicer, the Special Servicer and the Trustee may
each require: (a) in the case of Certificate Owners, a written confirmation
executed by the requesting Person, in form reasonably satisfactory to the
Master Servicer, the Special Servicer or the Trustee, as the case may be,
generally to the effect that such Person is a beneficial holder of
Certificates, is requesting the information solely for use in evaluating such
Person's investment in the Certificates and will otherwise keep such
information confidential; and (b) in the case of Prospective Investors, a
written confirmation executed by the requesting Person, in form reasonably
satisfactory to the Master Servicer, the Special Servicer or the Trustee, as
the case may be, generally to the effect that such Person is a prospective
purchaser of a Certificate or an interest therein, is requesting the
information solely for use in evaluating a possible investment in Certificates
and will otherwise keep such information confidential.
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(e) The Master Servicer and the Special Servicer shall each provide or
cause to be provided to the OTS, the FDIC and any other federal or state
banking or insurance regulatory authority that may exercise authority over any
Certificateholder or Certificate Owner, access to any and all records and other
documentation regarding the Mortgage Loans and the Trust Fund within its
control that may be required by this Agreement or by applicable law. Such
access shall be afforded without charge but only upon reasonable prior written
request and during normal business hours at the offices of the Master Servicer
or the Special Servicer, as the case may be, designated by it.
(f) The Master Servicer and the Special Servicer shall each cooperate
in providing the Rating Agencies with such other pertinent information relating
to the Mortgage Loans as is or should be in their respective possession as the
Rating Agencies may reasonably request. Any Holder of a Privately Offered
Certificate may, upon request to the Trustee (which may be in the form of a
standing request for as long as such Holder remains a Holder of any such
Certificates), obtain a copy of any report or other information (to the extent
the Trustee has such report or other information in its possession) delivered
to the Rating Agencies under this Agreement.
SECTION 8.16. RULE 144A INFORMATION. For so long as any of the
Certificates are "restricted securities" within the meaning of Rule 144A under
the Securities Act, each of the Master Servicer and the Special Servicer agrees
to provide to the Trustee, which in turn shall provide to any Holder,
Certificate Owner or Prospective Investor of such Certificates, upon the
request of such Holder, Certificate Owner or Prospective Investor, subject to
the other provisions of this Section 8.16 and the provisions of subsections
(b), (c) and (d) of Section 8.15, any information prepared by or otherwise in
the possession or under the control of the Master Servicer or the Special
Servicer, as the case may be, that has not already been delivered to the
Trustee and that is required to be provided to such Holder, Certificate Owner
or Prospective Investor to satisfy the condition set forth in Rule 144A(d)(4)
under the Securities Act, including, without limitation, copies of the reports
and information described in subsection (a) of Section 8.15.
Any recipient of information provided pursuant to this Section 8.16
shall agree that such information shall not be disclosed or used for any
purpose other than the evaluation of an investment in the Certificates. Unless
the Master Servicer or the Special Servicer chooses to deliver the information
directly, the Trustee shall be responsible for the physical delivery of the
information requested pursuant to this Section 8.16. As a condition to the
Master Servicer or the Special Servicer making any report or information
available upon request to any Person other than one of the other parties
hereto, the Master Servicer or the Special Servicer, as the case may be, may
require that the recipient of such information acknowledge that the Master
Servicer or the Special Servicer, as the case may be, may contemporaneously
provide such information to the Depositor, the Trustee, the Underwriters and/or
the Certificateholders and Certificate Owners. The Master Servicer and the
Special Servicer will each be permitted to require payment of a sum by the
requesting party (other than the Rating Agencies, the Depositor, the Trustee or
the Underwriters) sufficient to cover the reasonable costs and expenses of
making such information available.
SECTION 8.17. INSPECTIONS; COLLECTION OF FINANCIAL STATEMENTS.
(a) The Master Servicer shall perform (or cause to be performed) a
physical inspection of each Mortgaged Property (other than (i) Mortgaged
Properties constituting REO Properties or collateral for Specially Serviced
Mortgaged Loans and (ii) Mortgaged Properties securing Credit Lease Loans) at
such times and in such manner as are consistent with the Servicing Standard,
but in any event at least once every two years (or, if the related Mortgage
Loan has a current balance of more than $2,000,000, at least once every year)
provided that the Master Servicer will have no obligation to inspect
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a Mortgaged Property inspected by the Special Servicer during such period. The
Master Servicer shall promptly prepare (or cause to be prepared) a written
report of each such inspection detailing the condition of the Mortgaged
Property and specifying the existence of (i) any vacancy in the Mortgaged
Property evident from such inspection that the Master Servicer deems material,
(ii) any sale, transfer or abandonment of the Mortgaged Property evident from
such inspection, (iii) any adverse change in the condition or value of the
Mortgaged Property evident from such inspection that the Master Servicer deems
material, or (iv) any waste committed on the Mortgaged Property evident from
such inspection. The Master Servicer shall upon request deliver to the Trustee,
the Special Servicer and the Depositor a copy of each such written report of
the related inspection, and the Trustee shall deliver to the Holders of the
Privately Offered Certificates a copy of each such written report within 15
days of receipt of such report from the Master Servicer. Inspections of
Mortgaged Properties securing Credit Lease Loans shall be performed in
accordance with Section 8.35(f).
(b) If any Mortgage Loan becomes a Specially Serviced Mortgage Loan,
then as soon as practicable (and in any event within 90 days thereafter) the
Special Servicer shall perform (or cause to be performed) a physical inspection
of each Mortgaged Property constituting collateral for such Mortgage Loan
(unless such Mortgaged Property had been inspected within the prior three
months), and the Special Servicer shall thereafter inspect such Mortgaged
Property at such times and in such manner as are consistent with the Servicing
Standard (but in any event at least once per calendar year). The cost of such
inspections shall be a Servicing Advance. The Special Servicer shall promptly
prepare (or cause to be prepared) a written report of each such inspection
detailing the condition of the Mortgaged Property and specifying the existence
of (i) any vacancy in the Mortgaged Property evident from such inspection that
the Special Servicer deems material, (ii) any sale, transfer or abandonment of
the Mortgaged Property evident from such inspection, (iii) any adverse change
in the condition or value of the Mortgaged Property evident from such
inspection that the Special Servicer deems material, or (iv) any waste
committed on the Mortgaged Property evident from such inspection. The Special
Servicer shall deliver to the Master Servicer, the Trustee, the Holders of the
Privately Offered Certificates and the Depositor a copy of each such written
report within 60 days of the related inspection.
(c) The Master Servicer (or, in the case of Specially Serviced
Mortgage Loans, the Special Servicer) shall make reasonable efforts to collect
promptly from each Mortgagor quarterly and annual operating statements and rent
rolls of the related Mortgaged Property (other than Mortgaged Properties
securing Credit Lease Loans), and financial statements of such Mortgagor, if
delivery of such items is required pursuant to the terms of the related
Mortgage. In addition, the Special Servicer shall use reasonable efforts to
obtain quarterly and annual operating statements and rent rolls with respect to
each REO Property. The Master Servicer and Special Servicer shall, upon
request, each deliver copies of the collected items to the other such party and
the Trustee, and the Trustee shall deliver copies of such items to the
Depositor and Holders of the Privately Offered Certificates upon request.
SECTION 8.18 MODIFICATIONS, WAIVERS, AMENDMENTS, EXTENSIONS AND
CONSENTS.
(a) Subject to the limitations of Section 12.4 hereof, the Special
Servicer and Master Servicer, as applicable, shall have the following powers:
(i) The Special Servicer in accordance with the Servicing Standard,
may agree to any modification, waiver, amendment or consent of or relating
to any non-Money Term of a Mortgage Loan that is not a Specially Serviced
Mortgage Loan so long as such amendment will not result in an Adverse REMIC
Event. The Special Servicer may extend the maturity date of any Balloon
Mortgage Loan that is not a Specially Serviced Mortgage Loan to a date that
is
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not more than 60 days following the original Maturity Date and not later
than two years prior to the Rated Final Distribution Date, if in the
Special Servicer's sole judgment exercised in good faith and in accordance
with the Servicing Standard (and evidenced by an Officer's Certificate), a
default in the payment of the Balloon Payment is reasonably foreseeable and
such extension is reasonably likely to produce a greater recovery on a net
present value basis than liquidation of such Mortgage Loan. The Special
Servicer shall process all such extensions and shall be entitled to (as
additional servicing compensation) 100% of any extension fees collected
from a Mortgagor with respect to any such extension.
The Master Servicer may modify or amend the terms of any Mortgage Loan
without the consent of the Special Servicer in order to (i) cure any
ambiguity therein or (ii) correct or supplement any provisions therein
which may be inconsistent with any other provisions therein or correct any
error, provided that such modification or amendment would not cause an
Adverse REMIC Event to occur. Other than as set forth above in this Section
8.18(a)(i) the Master Servicer shall not agree to any modification or
amendment of a Mortgage Loan or any waiver or consent (other than
immaterial waivers and consents made in the ordinary course of business).
(ii) The Special Servicer may require, in its discretion, as a
condition to granting any request by a Mortgagor for any consent,
modification, waiver or amendment, that such Mortgagor pay to the Special
Servicer a reasonable and customary modification fee to the extent
permitted by law (50% of which will be paid to the Master Servicer with
respect to any Mortgage Loan that is not a Specially Serviced Mortgage
Loan). The Special Servicer may charge the Mortgagor for any costs and
expenses (including attorneys' fees) incurred by the Special Servicer in
connection with any request for a modification, waiver or amendment. The
failure or inability of the Mortgagor to pay any such costs and expenses
shall not impair the right of the Special Servicer to cause such costs and
expenses, and interest thereon at the Advance Rate, to be paid or
reimbursed by the Trust as a Servicing Advance (to the extent not paid by
the Mortgagor).
(iii) Each of the Special Servicer and the Master Servicer, as
applicable, shall notify the Trustee of any modification, waiver or
amendment of any term of any Mortgage Loan permitted by it under this
Section and the date thereof, and shall deliver to the Trustee for deposit
in the related Mortgage File, an original counterpart of the agreement
relating to such modification, waiver or amendment, promptly following the
execution thereof except to the extent such documents have been submitted
to the applicable recording office, in which event the Special Servicer or
the Master Servicer, as applicable, shall promptly deliver copies of such
documents to the Trustee. The Trustee shall deliver copies of such
documents to the Holders of the Privately Offered Certificates within 15
days of receipt by the Trustee thereof.
(b) Subject to the limitation of Section 12.4 hereof, the Special
Servicer, in accordance with the Servicing Standard, shall have the
following additional powers:
(i) The Special Servicer may enter into a modification, waiver or
amendment (including, without limitation, the substitution or release of
collateral or the pledge of additional collateral) of the terms of a
Specially Serviced Mortgage Loan, including any modification, waiver or
amendment to (a) reduce the amounts owing under any Specially Serviced
Mortgage Loan by forgiving principal, accrued interest or any Prepayment
Premium, (b) reduce the amount of the Monthly Payment on any Specially
Serviced Mortgage Loan, including by way of a reduction in the related
Mortgage Rate, (c) forebear in the enforcement of
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any right granted under any Mortgage Note or Mortgage relating to a
Specially Serviced Mortgage Loan, (d) extend the Maturity Date of any
Specially Serviced Mortgage Loan and/or (e) accept a principal prepayment
on any Specially Serviced Mortgage Loan during any period during which
voluntary Principal Prepayments are prohibited, provided that (1) the
related Mortgagor is in default with respect to the Specially Serviced
Mortgage Loan or, in the judgment of the Special Servicer, such default is
reasonably foreseeable, (2) in the reasonable judgment of the Special
Servicer such modification would increase the recovery on the Mortgage Loan
to Certificateholders on a net present value basis (the relevant
discounting of amounts that will be distributable to Certificateholders to
be performed at the related Mortgage Rate) and (3) such modification,
waiver or amendment would not cause an Adverse REMIC Event to occur.
In no event shall the Special Servicer (i) extend the Maturity Date of
a Specially Serviced Mortgage Loan beyond a date that is two years prior to the
Final Rated Distribution Date; (ii) extend the Maturity Date of any Specially
Serviced Mortgage Loan at an interest rate below the then-prevailing interest
rate for comparable loans at the time of such modification as determined by the
Special Servicer (such limitation of extensions made at below market rates
shall not limit the ability of the Special Servicer to extend the Maturity Date
of any Specially Serviced Mortgage Loan at an interest rate at or in excess of
the prevailing rate for comparable loans at the time of such modification);
(iii) if the Specially Serviced Mortgage Loan is secured by a ground lease,
extend the Maturity Date of such Specially Serviced Mortgage Loan beyond a date
which is less than 10 years prior to the expiration of the term of such ground
lease; (iv) reduce the Mortgage Rate of a Specially Serviced Mortgage Loan to a
rate below the then-prevailing interest rate for comparable loans at the time
of such modification, as determined by the Special Servicer; or (v) defer
interest due on any Specially Serviced Mortgage Loan in excess of 10% of the
Stated Principal Balance of such Specially Serviced Mortgage Loan or defer the
collection of interest on any Specially Serviced Mortgage Loan without accruing
interest on such deferred interest at a rate at least equal to the Mortgage
Rate of such Specially Serviced Mortgage Loan.
Notwithstanding the foregoing, if a Mortgage Loan is a Balloon Loan
that has failed to make the Balloon Payment at its scheduled maturity, and such
Balloon Loan is not a Specially Serviced Mortgage Loan (other than by reason of
failure to make the Balloon Payment) and has not been delinquent in the
preceding 12 months (other than with respect to the Balloon Payment), then in
addition to the other alternatives specified above, the Special Servicer may
make up to three one-year extensions at the existing Mortgage Rate for such
Mortgage Loan; provided that in no event shall any such extension extend beyond
the date that is two years prior to the Final Rated Distribution Date.
The determination of the Special Servicer contemplated by clause (2)
of the proviso to the first paragraph of this Section 8.18(b)(i) and clause
(ii) of the second paragraph of this Section 8.18(b)(i) shall be evidenced by
an Officer's Certificate to such effect delivered to the Trustee and the Master
Servicer and describing in reasonable detail the basis for the Special
Servicer's determination. The Special Servicer shall append to such Officer's
Certificate any information, including but not limited to income and expense
statements, rent rolls, property inspection reports and appraisals, that
support such determination.
(ii) In the event the Special Servicer intends to permit a Mortgagor
to substitute collateral for all or any portion of a Mortgaged Property
pursuant to Section 8.18(b)(i) or pledge additional collateral for the
Mortgage Loan pursuant to Section 8.18(b)(i), if the security interest of
the Trust in such collateral would be perfected by possession, or if such
collateral requires special care or protection, then prior to agreeing to
such substitution or addition of collateral, the Special Servicer shall
make arrangements for such possession, care or protection, and prior to
agreeing to such substitution or addition of collateral (or such
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arrangement for possession, care or protection) shall obtain the prior
written consent of the Trustee with respect thereto (which consent shall
not be unreasonably withheld, delayed or conditioned); provided, however,
that any such substitution or addition of collateral shall require Rating
Agency Confirmation; provided further, however, that the Trustee shall not
be required (but has the option) to consent to any substitution or addition
of collateral or to hold any such collateral which will require the Trustee
to undertake any additional duties or obligations or incur any additional
expense.
(iii) The Special Servicer will promptly deliver to the Master
Servicer, the Operating Adviser (or if no Operating Adviser has been
elected, the Majority Certificateholder of the Controlling Class), the
Rating Agencies and the Trustee a notice, specifying any such
modifications, waivers or amendments, such notice identifying the affected
Specially Serviced Mortgage Loan. Such notice shall be delivered to the
Trustee and shall set forth the reasons for such waiver, modification, or
amendment (including, but not limited to, information such as related
income and expense statements, rent rolls, occupancy status, property
inspections, and an internal or external appraisal performed in accordance
with MAI standards and methodologies (and, if done externally, the cost of
such appraisal shall be recoverable as a Servicing Advance subject to the
provisions of Section 4.2 hereof)). The Special Servicer shall also deliver
to the Trustee (or the Custodian), for deposit in the related Mortgage
File, an original counterpart of the agreement relating to such
modification, waiver or amendment promptly following the execution thereof.
(iv) No fee described in this Section shall be collected by the
Special Servicer from the Mortgagor (or on behalf of the Mortgagor) in
conjunction with any consent or any modification, waiver or amendment of
the Mortgage Loan if the collection of such fee would cause such consent,
modification, waiver or amendment to be a "significant modification" of the
Mortgage Note within the meaning of Treasury Regulation ss. 1.860G-2(b).
Subject to the foregoing, the Special Servicer shall use its reasonable
efforts, to collect any modification fees and other expenses connected with
a permitted modification of a Mortgage Loan from the Mortgagor. The
inability of the Mortgagor to pay any costs and expenses of a proposed
modification shall not impair the right of the Special Servicer, the Master
Servicer or the Trustee to be reimbursed by the Trust for such expenses
(including any cost and expense associated with the Opinion of Counsel
referred to in this Section).
(v) The Special Servicer shall cooperate with the Master Servicer (as
provided in Section 8.6) in connection with assignments and assumptions of
Mortgage Loans that are not Specially Serviced Mortgage Loans.
(vi) Notwithstanding anything herein to the contrary, the Special
Servicer shall not be permitted to take or refrain from taking any action
pursuant to instructions from the Operating Adviser that would cause it to
violate any term or provision of this Agreement, including the REMIC
Provisions and the Servicing Standard.
(c) The Master Servicer or Special 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 Master Servicer or Special Servicer, as
applicable, determines that (i) in the absence of the waiver of such Excess
Interest, there is a reasonable likelihood that the Mortgage Loan will not be
paid in full on the related Maturity Date and (ii) waiver of the right to such
accrued Excess
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Interest is reasonably likely to produce a greater payment in the aggregate to
Certficateholders on a present value basis than a refusal to waive the right to
such Excess Interest. Any such waiver shall not be effective until such
prepayment is tendered.
SECTION 8.19. TITLE TO REO PROPERTY.
(a) If title to any REO Property is acquired, the deed or certificate
of sale shall be issued in the name of the Trustee on behalf of the
Certificateholders. The Special Servicer, on behalf of the Trust Fund, shall in
accordance with Section 8.31 attempt to sell any REO Property for cash by the
close of the third taxable year of the REMIC following the taxable year in
which the Trust Fund acquires ownership of such REO Property for purposes of
Section 860G(a)(8) of the Code (such date, the "REO SALE DEADLINE"), unless the
Special Servicer either (i) applies for, more than 60 days prior to the REO
Sale Deadline, and is subsequently granted an extension of time (an "REO
EXTENSION") by the Internal Revenue Service to sell such REO Property, or (ii)
obtains for the Trustee an Opinion of Counsel, addressed to the Trustee and the
Special Servicer, to the effect that the holding by the Trust Fund of such REO
Property subsequent to the REO Sale Deadline will not result in the imposition
of taxes on "prohibited transactions" of REMIC I, REMIC II or REMIC III as
defined in Section 860F of the Code or cause REMIC I, REMIC II or REMIC III to
fail to qualify as a REMIC at any time that any Certificates are outstanding.
If the Special Servicer is granted the REO Extension contemplated by clause (i)
of the immediately preceding sentence or obtains the Opinion of Counsel
contemplated by clause (ii) of the immediately preceding sentence, the Special
Servicer shall attempt to sell such REO Property within such period beyond the
REO Sale Deadline as is permitted by such REO Extension or is contemplated by
such Opinion of Counsel, as the case may be. Any expense incurred by the
Special Servicer in connection with its being granted the REO Extension
contemplated by clause (i) of the second preceding sentence or its obtaining
the Opinion of Counsel contemplated by clause (ii) of the second preceding
sentence, shall be an expense of the Trust Fund payable out of the Collection
Account pursuant to Section 5.2.
(b) The Special Servicer shall deposit, or cause to be deposited, in
the Collection Account, or shall deliver to the Master Servicer (which shall
deposit such amounts into the Collection Account), upon receipt, all REO Income
(net of the fees of any property manager and net of any expenses payable
therefrom), Insurance Proceeds, Condemnation Proceeds and Liquidation Proceeds
received in respect of an REO Property, subject to withdrawal by the Master
Servicer pursuant to Section 5.2.
SECTION 8.20. MANAGEMENT OF REO PROPERTY.
(a) Prior to the acquisition of title to any Mortgaged Property
securing a defaulted Mortgage Loan, the Special Servicer shall review the
operation of such Mortgaged Property and determine the nature of the income
that would be derived from such property if it were acquired by the Trust. If
the Special Servicer determines from such review, in its good faith and
reasonable judgment, that:
(i) none of the income from Directly Operating such Mortgaged Property
would be subject to tax as "net income from foreclosure property" within
the meaning of the REMIC Provisions or would be subject to the tax imposed
on "prohibited transactions" under Section 860F of the Code (either such
tax referred to herein as an "REO TAX"), then such Mortgaged Property may
be Directly Operated by the Special Servicer as REO Property;
(ii) Directly Operating such Mortgaged Property as REO Property could
result in income from such Mortgaged Property that would be subject to an
REO Tax, but that a
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lease of such Mortgaged Property to another party to operate such Mortgaged
Property, or the performance of some services by an Independent Contractor
with respect to such Mortgaged Property, or another method of operating
such Mortgaged Property would not result in income subject to an REO Tax,
then the Special Servicer may (provided that, in the good faith and
reasonable judgment of the Special Servicer, it is commercially feasible)
acquire such Mortgaged Property as REO Property and so lease or operate
such REO Property; or
(iii) Directly Operating such Mortgaged Property as REO Property could
result in income subject to an REO Tax and, in the good faith and
reasonable judgment of the Special Servicer, that no commercially feasible
means exists to operate such Mortgaged Property as REO Property without the
Trust incurring or possibly incurring an REO Tax on income from such
Mortgaged Property, then the Special Servicer shall deliver to the Trustee,
in writing, a proposed plan (the "PROPOSED PLAN") to manage such Mortgaged
Property as REO Property. Such plan shall include potential sources of
income, and to the extent commercially feasible, estimates of the amount of
income from each such source. Within a reasonable period of time after
receipt of such plan, the Trustee shall consult with the Special Servicer
and shall advise the Special Servicer of the Trust's federal income tax
reporting position with respect to the various sources of income that the
Trust would derive under the Proposed Plan. In addition, the Trustee shall
(to the maximum extent possible) advise the Special Servicer of the
estimated amount of taxes that the Trust would be required to pay with
respect to each such source of income. After receiving the information
described in the two preceding sentences from the Trustee, the Special
Servicer shall either (A) implement the Proposed Plan (after acquiring the
respective Mortgaged Property as REO Property) or (B) manage and operate
such REO Property in a manner that would not result in the imposition of an
REO Tax on the income derived from such REO Property.
The Special Servicer's decision as to how each REO Property shall be
managed and operated shall in any event be based on the good faith and
reasonable judgment of the Special Servicer, consistent with the Servicing
Standard, as to which means would (to the extent commercially feasible)
maximize the net after-tax REO Income received by the Trust with respect to
such REO Property without materially and adversely affecting the Special
Servicer's ability to sell such REO Property in accordance with this Agreement.
Both the Special Servicer and the Trustee may consult with counsel
knowledgeable in such matters at the expense of the Trust Fund in connection
with determinations required under this Section 8.20(a). Neither the Special
Servicer nor the Trustee shall be liable to the Certificateholders, the Trust,
the other parties hereto or each other for errors in judgment made in good
faith in the reasonable exercise of their discretion while performing their
respective responsibilities under this Section 8.20(a) or, to the extent it
relates to federal income tax consequences for the Trust, Section 8.20(b)
below. Nothing in this Section 8.20(a) is intended to prevent the sale of a
Defaulted Mortgage Loan or REO Property pursuant to the terms and subject to
the conditions of Section 8.31.
(b) If title to any REO Property is acquired, the Special Servicer or
an Independent Contractor chosen by the Special Servicer shall manage,
conserve, protect and operate such REO Property for the benefit of the
Certificateholders solely for the purpose of its prompt disposition and sale in
a manner that does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by the Trust of any "income from non-permitted assets"
within the meaning of Section 860F(a)(2)(B) of the Code or result in an Adverse
REMIC Event. Except as otherwise expressly provided herein, the Special
Servicer shall not enter into any lease, contract or other agreement that
causes REMIC I to receive, and (unless required to do so under any lease,
contact or agreement to which the Special Servicer or the Trust may become a
party or a successor to a party due to a foreclosure, deed-in-lieu of
foreclosure or other similar exercise of a
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creditor's rights or remedies with respect to a Mortgage Loan) shall not cause
or allow REMIC I to receive, any "net income from foreclosure property" that is
subject to taxation under the REMIC Provisions. Subject to the foregoing,
however, the Special Servicer shall have full power and authority to do any and
all things in connection therewith as are in the best interests of and for the
benefit of the Certificateholders in accordance with the Servicing Standard (as
determined by the Special Servicer in its good faith and reasonable judgment)
and, consistent therewith, shall direct the Master Servicer to withdraw from
the Collection Account, to the extent of amounts on deposit therein with
respect to each REO Property, and deliver to the Special Servicer (for
appropriate application), funds necessary for the proper operation, management
and maintenance of such REO Property, including, without limitation:
(i) all insurance premiums due and payable in respect of such REO
Property;
(ii) all real estate taxes and assessments in respect of such REO
Property that may result in the imposition of a lien thereon;
(iii) any ground rents in respect of such REO Property; and
(iv) all costs and expenses necessary to maintain such REO Property.
To the extent that amounts on deposit in the Collection Account in respect of
any REO Property are insufficient for the purposes set forth in clauses (i) -
(iv) above with respect to such REO Property, the Master Servicer (at the
direction of the Special Servicer) shall advance from its own funds such amount
as is necessary for such purposes unless such advances would, if made,
constitute Nonrecoverable Advances; provided, however, that the Master Servicer
(at the direction of the Special Servicer) shall make any such Servicing
Advance if it is a necessary fee or expense incurred in connection with the
defense or prosecution of legal proceedings and such advance shall be deemed to
constitute a recoverable Servicing Advance.
(c) The Special Servicer may contract with any Independent Contractor
for the operation and management of any REO Property, provided that:
(i) The terms and conditions of any such contract may not be
inconsistent herewith and shall reflect an agreement reached at arm's
length;
(ii) the fees of such Independent Contractor (which shall be an
expense of the Trust, payable out of related REO Income) shall be
reasonable and customary in light of the nature and locality of the REO
Property;
(iii) any such contract shall require, or shall be administered to
require, that the Independent Contractor (A) pay all costs and expenses
incurred in connection with the operation and management of such REO
Property, including, without limitation, those listed in subsection (b) of
this Section 8.20 and (B) remit all related REO Income collected (net of
its fees and such costs and expenses) to the Special Servicer upon receipt;
(iv) none of the provisions of this Section 8.20(c) relating to any
such contract or to actions taken through any such Independent Contractor
shall be deemed to relieve the Special Servicer of any of its duties and
obligations hereunder with respect to the operation and management of any
such REO Property; and
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(v) the Special Servicer shall be obligated with respect thereto to
the same extent as if it alone were performing all duties and obligations in
connection with the operation and management of such REO Property.
The Special Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Special Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification.
SECTION 8.21. ADDITIONAL OBLIGATIONS OF THE MASTER SERVICER.
(a) The Master Servicer and the Special Servicer shall each deliver to
the other and to the Trustee (for inclusion in the Mortgage File) copies of all
Appraisals, environmental reports and engineering reports (or, in each case,
updates thereof) obtained with respect to any Mortgaged Property or REO
Property.
(b) The Master Servicer shall deliver to the Trustee for deposit in
the Distribution Account on each P&I Advance Date, without any right of
reimbursement therefor, an amount equal to the lesser of (i) the excess, if
any, of all Prepayment Interest Shortfalls over all Prepayment Interest
Excesses, in each case resulting from Principal Prepayments received in respect
of the Mortgage Pool during the most recently ended Collection Period, and (ii)
that portion of the aggregate Master Servicing Fees received by the Master
Servicer during such Collection Period calculated in respect of all of the
Mortgage Loans at a rate of 0.02% per annum.
SECTION 8.22. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MASTER
SERVICER AND THE SPECIAL SERVICER.
(a) GMAC Commercial Mortgage Corporation ("GMACCM") in its capacity as
the Master Servicer and Special Servicer, hereby represents and warrants to
the Trustee, for its own benefit and the benefit of the Certificateholders,
and to the Depositor, as of the Closing Date, that:
(i) GMACCM is a corporation, duly organized, validly existing and in
good standing under the laws of the State of California, and GMACCM is in
compliance with the laws of each State in which any Mortgaged Property is
located to the extent necessary to perform its obligations under this
Agreement.
(ii) The execution and delivery of this Agreement by GMACCM, and the
performance and compliance with the terms of this Agreement by GMACCM, will
not violate GMACCM's organizational documents or constitute a default (or
an event which, with notice or lapse of time or both, would constitute a
default) under, or result in the breach of any material agreement or other
instrument to which it is a party or which is applicable to it or any of
its assets.
(iii) GMACCM has the full power and authority to enter into and
consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement, and
has duly executed and delivered this Agreement.
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(iv) This Agreement, assuming due authorization, execution and
delivery by the other parties hereto, constitutes a valid, legal and
binding obligation of GMACCM, enforceable against GMACCM in accordance with
the terms hereof, subject to (A) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
creditors' rights generally, and (B) general principles of equity,
regardless of whether such enforcement is considered in a proceeding in
equity or at law.
(v) GMACCM is not in violation of, and its execution and delivery of
this Agreement and its performance and compliance with the terms of this
Agreement will not constitute a violation of, any law, order or decree of
any court or arbiter, or any order, regulation or demand of any federal,
state or local governmental or regulatory authority, which violation, in
GMACCM's good faith and reasonable judgment, is likely to affect materially
and adversely either the ability of GMACCM to perform its obligations under
this Agreement or the financial condition of GMACCM.
(vi) No litigation is pending or, to the best of GMACCM's knowledge,
threatened against GMACCM the outcome of which, in GMACCM's good faith and
reasonable judgment, could reasonably be expected to prohibit GMACCM from
entering into this Agreement or materially and adversely affect the ability
of GMACCM to perform its obligations under this Agreement.
(vii) GMACCM has errors and omissions insurance coverage which is in
full force and effect and complies with the requirements of Section 8.5
hereof.
(viii) No consent, approval, authorization or order, registration or
filing with or notice to any governmental authority or court is required,
under federal or state law, for the execution, delivery and performance of
or compliance by GMACCM with this Agreement, or the consummation by GMACCM
with this Agreement, or the consummation by GMACCM of any transaction
contemplated hereby, other than (1) such consents, approvals,
authorizations, qualifications, registrations, filings, or notices as have
been obtained or made and (2) where the lack of such consent, approval,
authorization, qualification, registration, filing or notice would not have
a material adverse effect on the performance by GMACCM under this
Agreement.
(ix) It is understood that the representations and warranties set
forth in this Section 8.22(a) shall survive the execution and delivery of
this Agreement.
(x) Upon discovery by any of the parties hereto of a breach of any of
the foregoing representations and warranties that materially and adversely
affects the interests of the Certificateholders or any party hereto, the
party discovering such breach shall give prompt written notice to each of
the other parties hereto.
(xi) Any successor Master Servicer shall be deemed to have made, as of
the date of its succession, each of the representations set forth in
Section 8.22(a)(i), subject to such appropriate modifications to the
representation and warranty set forth in Section 8.22(a)(i)(A) to
accurately reflect such successor's jurisdiction of organization and
whether it is a corporation, partnership, bank, association or other type
of organization.
(xii) The GMACCM covenants that by August 31, 1999, any custom-made
software or hardware designated or purchased or licensed by GMACCM and used
by GMACCM in the course of the operation or management of, or the
compiling, reporting or generation of data
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required by this Agreement will not contain any deficiency (x) in the
ability of such software or hardware to identify correctly or perform
calculations or other processing with respect to dates after December 31,
1999 or (y) that would cause such software or hardware to be fit no longer
for that purpose for which it was intended by reason of the changing of the
date from 1999 to 2000.
SECTION 8.23. MERGER OR CONSOLIDATION. Any Person into which the
Master Servicer or the Special Servicer may be merged or consolidated or to
which the Master Servicer or the Special Servicer has transferred all or
substantially all of its assets, or any Person resulting from any merger,
conversion, other change in form or consolidation to which the Master Servicer
or the Special Servicer shall be a party, or any Person succeeding to the
business of the Master Servicer or the Special Servicer, shall be the successor
of the Master Servicer or the Special Servicer, as the case may be, hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; provided, that Rating Agency Confirmation shall have
been obtained with respect to such merger, consolidation, or succession.
SECTION 8.24. RESIGNATION OF MASTER SERVICER OR SPECIAL SERVICER.
(a) Except as otherwise provided in Section 8.24(b) hereof, neither
the Master Servicer nor the Special Servicer shall resign from the obligations
and duties hereby imposed on it, unless there is a determination that its
duties hereunder are no longer permissible under applicable law or are in
material conflict by reason of applicable law with any other activities carried
on by it (the other activities so causing such conflict being of a type and
nature carried on by it at the date of this Agreement). Any such determination
permitting the resignation of the Master Servicer or the Special Servicer shall
be evidenced by an Opinion of Counsel to such effect delivered to the Trustee.
No such resignation shall become effective until a successor servicer
designated by the Trustee, with the consent of the Depositor, shall have
assumed the Master Servicer's or Special Servicer's, as the case may be,
responsibilities and obligations under this Agreement and Rating Agency
Confirmation shall have been obtained. Notice of such resignation shall be
given promptly by the Master Servicer or the Special Servicer, as the case may
be, to the Trustee.
(b) The Master Servicer and the Special Servicer may each resign from
the obligations and duties imposed on it, upon 30 days notice to the Trustee,
provided that (i) a successor servicer (x) is available, (y) has assets of at
least $15,000,000 and (z) is willing to assume the obligations,
responsibilities, and covenants to be performed hereunder by the resigning
party on substantially the same terms and conditions, and for not more than
equivalent compensation, to that herein provided; (ii) the resigning party
bears all costs associated with its resignation and the transfer of servicing;
and (iii) Rating Agency Confirmation is obtained with respect to such servicing
transfer, as evidenced by a letter delivered to the Trustee by each Rating
Agency.
SECTION 8.25. ASSIGNMENT OR DELEGATION OF DUTIES BY MASTER SERVICER OR
THE SPECIAL SERVICER. The Master Servicer and the Special Servicer shall each
have the right without the prior written consent of the Trustee to assign and
delegate all of its duties hereunder; provided, however, that (i) the Master
Servicer or the Special Servicer, as the case may be, gives the Depositor and
the Trustee notice of such assignment and delegation; (ii) such purchaser or
transferee accepting such assignment and delegation executes and delivers to
the Depositor and the Trustee an agreement accepting such assignment, which
contains an assumption by such Person of the rights, powers, duties,
responsibilities, obligations and liabilities of the Master Servicer or the
Special Servicer, as the case may be, with like effect as if originally named
as a party to this Agreement; (iii) a
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Rating Agency Confirmation shall have been obtained with respect to such
assignment and delegation; and (iv) the assignment and delegation is reasonably
satisfactory to the Trustee and the Depositor. In the case of any such
assignment and delegation in accordance with the requirements of this Section,
the Master Servicer or the Special Servicer, as the case may be, shall be
released from its obligations under this Agreement, except that the Master
Servicer or the Special Servicer, as the case may be, shall remain liable for
all liabilities and obligations incurred by it as the Master Servicer or the
Special Servicer, as the case may be, hereunder prior to the satisfaction of
the conditions to such assignment set forth in the preceding sentence.
Notwithstanding the above, each of the Master Servicer and the Special Servicer
may appoint Sub-Servicers in accordance with Section 8.4 hereof, provided that
the Master Servicer or the Special Servicer remains fully liable for their
actions, agents or independent contractors appointed or retained to perform
select duties thereof.
SECTION 8.26. LIMITATION ON LIABILITY OF MASTER SERVICER, SPECIAL
SERVICER AND OTHERS.
(a) None of the Master Servicer, the Special Servicer or any of their
respective directors, officers, employees or agents shall be under any
liability to the holders of the Certificates, the Trust or any other party for
any action taken or for refraining from the taking of any action in good faith
or for errors in reasonable judgment; provided that this provision shall not
protect the Master Servicer, the Special Servicer or any such Person against
any breach of a representation, warranty or covenant contained herein or any
liability that would otherwise be imposed by reason of willful misfeasance, bad
faith or negligence in its performance of duties under this Agreement or by
reason of negligent disregard of obligations and duties hereunder. The Master
Servicer, the Special Servicer and any director, officer, employee or agent of
the Master Servicer or the Special Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. Neither the Master Servicer nor the
Special Servicer shall be under any obligation to appear in, prosecute or
defend any legal action that is not incidental to its duties under this
Agreement; provided that the Master Servicer and the Special Servicer each may
in its sole discretion undertake any such action that it may reasonably deem
necessary or desirable in order to protect the interests of the
Certificateholders and the Trustee in the Mortgage Loans for which it is
responsible hereunder or otherwise under this Agreement. In such event, all
legal expenses and costs of such action shall be expenses and costs of the
Trust, and the Master Servicer or the Special Servicer, as applicable, shall be
entitled to be reimbursed therefor as Servicing Advances as provided by Section
5.2.
(b) In addition, neither the Master Servicer nor the Special Servicer
shall have any liability with respect to, and each shall be entitled to
conclusively rely as to the truth of the statements made and the correctness of
the opinions expressed therein on, any certificates or opinions furnished to
the Master Servicer or the Special Servicer, as the case may be, and conforming
to the requirements of this Agreement. Subject to the Servicing Standard, the
Master and the Special Servicer each shall have the right to rely on
information provided to it by the other (unless the Master Servicer and the
Special Servicer are the same party) and by the Mortgagors, and will have no
duty to investigate or verify the accuracy thereof.
(c) Neither the Master Servicer nor the Special Servicer shall be
obligated to incur any liabilities, costs, charges, fees or other expenses that
relate to or arise from any breach of any representation, warranty or covenant
made by the Depositor, the Fiscal Agent or Trustee in this Agreement.
SECTION 8.27. INDEMNIFICATION; THIRD-PARTY CLAIMS.
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(a) The Master Servicer, the Special Servicer and each of their
respective directors, officers, employees and agents shall be indemnified by
the Trust and held harmless against any and all claims, losses, penalties,
fines, forfeitures, legal fees and related costs, judgments and any other
costs, liabilities, fees and expenses incurred in connection with any legal
action relating to this Agreement, the Certificates or any asset of the Trust
Fund, other than any loss, liability or expense: (i) specifically required to
be borne by such Person pursuant to the terms hereof; (ii) that constitutes a
Servicing Advance (and is otherwise specifically reimbursable hereunder); (iii)
that was incurred in connection with claims against such party resulting from
(A) any breach of a representation, warranty or covenant made herein by such
party, or (B) willful misfeasance, bad faith or negligence in the performance
of obligations or duties hereunder by such party, or from reckless disregard of
such obligations or duties, or (iv) imposed by any taxing authority if such
loss, liability or expense is not specifically reimbursable pursuant to the
terms of this Agreement. Each of the Master Servicer and the Special Servicer
shall promptly notify the Trustee if a claim is made by a third party with
respect to this Agreement, the Certificates or any asset of the Trust Fund
entitling the Master Servicer or the Special Servicer, as the case may be, to
indemnification hereunder, whereupon the Trustee, on behalf of the Trust, shall
assume the defense of any such claim (with counsel reasonably satisfactory to
the Master Servicer or the Special Servicer, as applicable) and pay out of the
Collection Account all expenses in connection therewith, including counsel
fees, and promptly pay, discharge and satisfy out of the Collection Account any
judgment or decree that may be entered against it or them in respect of such
claim. Any failure to so notify the Trustee shall not affect any rights the
Master Servicer or the Special Servicer may have to indemnification under this
Agreement or otherwise, unless the Trust's defense of such claim is prejudiced
thereby and the Trustee delivers a certification explaining the prejudice. The
Trustee or the Master Servicer shall promptly make from the Collection Account
any payments certified by the Master Servicer or the Special Servicer to the
Trustee as required to be made to the Master Servicer or the Special Servicer,
as the case may be, pursuant to this Section 8.27(a). The indemnification
provided herein shall survive the resignation or termination of the Master
Servicer or the Special Servicer.
(b) The Master Servicer agrees to indemnify the Trust, the Trustee,
the Fiscal Agent, the Special Servicer (if different than the Master Servicer),
the Depositor, and any director, officer, employee or agent thereof, and hold
them harmless against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments and any other costs,
liabilities, fees and expenses that any of them may sustain arising from or as
a result of the willful misfeasance, bad faith or negligence in the performance
of any of the Master Servicer's duties hereunder or by reason of reckless
disregard of the Master Servicer's obligations and duties hereunder (unless
such claim, loss, penalty, fine, forfeiture, legal fee and related cost or
judgment results from the willful misfeasance, bad faith or negligence of such
indemnified party), and if in any such situation the Master Servicer is
replaced, the parties hereto agree that the amount of such claims, losses,
penalties, fines, forfeitures, legal fees and related costs, judgments and
other costs, liabilities, fees and expenses shall at least equal the
incremental costs, if any, of retaining a successor Master Servicer. Each of
the Trustee, the Depositor, the Special Servicer (if different than the Master
Servicer), and the Fiscal Agent shall immediately notify the Master Servicer if
a claim is made by a third party with respect to this Agreement, the
Certificates or any asset of the Trust Fund entitling the Trust, the Trustee,
the Depositor, the Special Servicer or the Fiscal Agent, as the case may be, to
indemnification hereunder, whereupon the Master Servicer shall assume the
defense of any such claim (with counsel reasonably satisfactory to the Trustee,
the Depositor, the Special Servicer, or the Fiscal Agent, as applicable) and
pay all expenses in connection therewith, including counsel fees, and promptly
pay, discharge and satisfy any judgment or decree that may be entered against
it or them in respect of such claim. Any failure to so notify the Master
Servicer shall not affect any rights the Trust, the Trustee, the Depositor,
Special Servicer, or the Fiscal Agent may have to indemnification under this
Agreement or otherwise, unless the Master Servicer's defense of such claim is
materially prejudiced thereby and the Master Servicer delivers a certification
explaining the prejudice. The indemnification
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provided herein shall survive the termination of this Agreement and the
resignation or termination of the Master Servicer, the Special Servicer, the
Trustee and the Fiscal Agent.
(c) The Special Servicer agrees to indemnify the Trust, the Trustee,
the Fiscal Agent, the Master Servicer (if different than the Special Servicer),
the Depositor, and any director, officer, employee or agent thereof, and hold
them harmless against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments and any other costs,
liabilities, fees and expenses that any of them may sustain arising from or as
a result of the willful misfeasance, bad faith or negligence in the performance
of any of the Special Servicer's duties hereunder or by reason of reckless
disregard of the Special Servicer's obligations and duties hereunder by the
Special Servicer (unless such claim, loss, penalty, fine, forfeiture, legal fee
and related cost or judgment results from the willful misfeasance, bad faith or
negligence of such indemnified party). Each of the Trustee, the Fiscal Agent,
the Master Servicer (if different than the Special Servicer) and the Depositor
shall immediately notify the Special Servicer if a claim is made by a third
party with respect to this Agreement, the Certificates or any asset of the
Trust Fund entitling the Trust or the Trustee, the Fiscal Agent, the Master
Servicer or the Depositor, as the case may be, to indemnification hereunder,
whereupon the Special Servicer shall assume the defense of any such claim (with
counsel reasonably satisfactory to the Trustee, the Fiscal Agent, the Master
Servicer or the Depositor, as applicable) and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree that may be entered against it or them in respect of such
claim. Any failure to so notify the Special Servicer shall not affect any
rights the Trust, the Trustee, the Fiscal Agent, the Master Servicer or the
Depositor may have to indemnification under this Agreement or otherwise, unless
the Special Servicer's defense of such claim is materially prejudiced thereby.
The indemnification provided herein shall survive the termination of this
Agreement and the resignation or termination of the Special Servicer, the
Master Servicer, the Trustee and the Fiscal Agent.
SECTION 8.28. TAX REPORTING. From and after the Closing Date, the
Special Servicer shall comply with the Mortgagor tax reporting requirements
imposed by Sections 6050H, 6050J and 6050P of the Code and any similar tax
reporting obligations under State law with respect to any Specially Serviced
Mortgage Loan. The Special Servicer shall provide to the Master Servicer copies
of any such reports. The Master Servicer shall forward such reports to the
Trustee.
SECTION 8.29 CERTAIN SPECIAL SERVICER REPORTS.
(a) The Special Servicer, in the case of any Specially Serviced
Mortgage Loans will deliver, at such times as are in Section 8.14(f), the
reports set forth in Section 8.14(f) and will include a Specially Serviced Loan
Detail Report which shall contain a narrative description for each Specially
Serviced Mortgage Loan of the current status of such Mortgage Loan any
additional reports as may be reasonably agreed upon by the Operating Adviser
and the Special Servicer for a reasonable fee payable by the Operating Adviser.
(b) The Special Servicer shall maintain accurate records, prepared by
a Servicing Officer, of each Final Recovery Determination with respect to any
Mortgage Loan or REO Property and the basis thereof. Each Final Recovery
Determination shall be evidenced by an Officer's Certificate delivered to the
Trustee, the Master Servicer and the Operating Adviser (or if no Operating
Adviser has been elected, the Majority Certificateholder of the Controlling
Class) no later than the tenth Business Day following such Final Recovery
Determination.
(c) In addition, no later than 30 days after a Servicing Transfer
Event for a Mortgage Loan, the Special Servicer shall deliver to each Rating
Agency and the Operating Adviser (or if no
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Operating Adviser has been elected, the Majority Certificateholder of the
Controlling Class) a report (the "Asset Status Report") with respect to such
Mortgage Loan and the related Mortgaged Property. Such Asset Status Report
shall set forth the following information to the extent reasonably
determinable:
(i) summary of the status of such Specially Serviced Mortgage Loan and
any negotiations with the related Mortgagor;
(ii) the most current rent roll and income or operating statement
available for the related Mortgaged Property;
(iii) upon receipt of an Appraisal, the Appraised Value of the
Mortgaged Property together with the assumptions used in the calculation
thereof; and
(iv) such other information as the Special Servicer deems relevant in
light of the Servicing Standard.
(d) The Special Servicer will provide a summary of whether it intends
to foreclose or work out the Mortgage Loan.
SECTION 8.30. QUALIFICATION TO SERVICE. The Master Servicer and the
Special Servicer shall each keep in full force and effect such qualifications
to do business and any necessary licenses as are necessary to perform its
duties under this Agreement.
SECTION 8.31. SALE OF DEFAULTED MORTGAGE LOANS AND REO PROPERTIES.
(a) The Special Servicer may offer to sell for cash to any Person any
REO Property or Defaulted Mortgage Loan. In the case of REO Property, the
Special Servicer shall offer to sell such REO Property no later than the time
determined by the Special Servicer to be sufficient to result in the sale of
such REO Property on or prior to the date specified in Section 8.19(a), and in
any event prior to the Final Rated Distribution Date. The Special Servicer
shall give the Operating Adviser and the Trustee not less than five days' prior
written notice of its intention to sell any such Defaulted Mortgage Loan or REO
Property, and in respect of such sale, the Special Servicer shall offer such
Defaulted Mortgage Loan or REO Property for sale in a fair auction or other
manner as is consistent with the Servicing Standard and shall accept the
highest cash bid received in such auction or other procedure from any Person
other than an Interested Person for any Defaulted Mortgage Loan or REO Property
in an amount, except as otherwise provided in this Section, at least equal to
the Purchase Price therefor.
In the absence of a bid in an amount at least equal to the Purchase
Price (after deducting allocable expenses), the Special Servicer shall accept
the highest cash bid received from any Person other than any Interested Person
or the Trustee in its individual capacity, unless the Special Servicer has
received other bids, the Interested Party's bid is the highest bid, and the
Special Servicer determines that acceptance of such bid is in the best interest
of the Certificateholders.
The Special Servicer shall not be obligated by either of the foregoing
paragraphs or otherwise to accept the highest cash bid if the Special Servicer
determines, in accordance with the Servicing Standard, that rejection of such
bid would be in the best interests of the Certificateholders. In addition, the
Special Servicer may accept a lower bid (including a bid lower than the
Purchase Price) if it determines, in accordance with the Servicing Standard,
that acceptance of such bid would be in the best interests of the
Certificateholders (for example, if the prospective buyer making the lower bid
is more
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likely to perform its obligations, or the terms offered by the prospective
buyer making the lower bid are more favorable). The Special Servicer shall
determine no later than six months prior to the end of the REO Sale Deadline
with respect to any REO Property whether a sale of such REO Property pursuant
to any bids being made with respect thereto is in the best economic interests
of the Certificateholders as a whole. If the Special Servicer so determines in
accordance with the Servicing Standard that such a sale would not be in the
best interests of the Certificateholders, the Special Servicer shall seek an
extension of such period in the manner described in Section 8.19.
(b) Subject to the REMIC Provisions, the Special Servicer shall act on
behalf of the Trust in negotiating and taking any other action necessary or
appropriate in connection with the sale of any Defaulted Mortgage Loan or REO
Property, including the collection of all amounts payable in connection
therewith. Any sale of a Defaulted Mortgage Loan or REO Property shall be
without recourse to, or representation or warranty by, the Trustee, the
Depositor, the Special Servicer, the Master Servicer, or the Trust. None of the
Special Servicer, the Master Servicer, the Depositor, the Fiscal Agent or the
Trustee shall have any liability to the Trust or any Certificateholder with
respect to the price at which a Defaulted Mortgage Loan is sold if the sale is
consummated in accordance with the terms of this Agreement.
(c) The proceeds of any sale after deduction of the expenses of such
sale incurred in connection therewith shall be deposited within one Business
Day in the Collection Account.
(d) Notwithstanding anything herein to the contrary, the Special
Servicer shall not be required to take or refrain from taking any action
pursuant to instructions from (or which require the approval of) the Operating
Adviser that would cause it to violate any term or provision of this Agreement,
the REMIC Provisions or the Servicing Standard.
SECTION 8.32. OPERATING ADVISER; ELECTIONS.
(a) In accordance with Section 8.32(c), the Holders of Certificates
representing more than 50% of the Class Principal Balance of the Controlling
Class shall be entitled to elect an operating adviser (the "OPERATING ADVISER")
with the powers set forth in Section 8.33. An election of an Operating Adviser
may also be held upon the resignation or removal of any Person acting as
Operating Adviser. The initial election of an Operating Adviser may be held at
any time on or after the Closing Date.
(b) At the request of the Holders of Certificates representing at
least 50% of the Class Principal Balance of the Controlling Class, the Trustee
shall call a meeting of the Holders of the Controlling Class for purpose of
electing an Operating Adviser. Notice of the meeting shall be mailed or
delivered by the Trustee to each Holder of Certificates of the Controlling
Class not less than 10 nor more than 60 days prior to the meeting. The notice
shall state the place and the time of the meeting, which may be held by
telephone. Holders of Certificates representing a majority of the Class
Principal Balance of the Controlling Class, present in person or represented by
proxy, shall constitute a quorum for the nomination of an Operating Adviser. At
the meeting, each Holder shall be entitled to nominate one Person to act as
Operating Adviser. The Trustee shall cause the election of the Operating
Adviser to be held as soon thereafter as is reasonably practicable.
(c) Each Holder of Certificates of the Controlling Class shall be
entitled to vote in each election of the Operating Adviser. The voting in each
election of the Operating Adviser shall be in writing mailed, telecopied,
delivered or sent by courier and actually received by the Trustee on or prior
to the date of such election. Immediately upon receipt by the Trustee of votes
(which have not been
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rescinded) from the Holders of Certificates representing more than 50% of the
Class Principal Balance of the Controlling Class which are cast for a single
Person, such Person shall be, upon such Person's acceptance, the Operating
Adviser. The Trustee shall act as judge of each election and, absent manifest
error, the determination of the results of any election by the Trustee shall be
conclusive. Notwithstanding any other provisions of this Section 8.32, the
Trustee may make such reasonable regulations as it may deem advisable for any
election.
(d) The Operating Adviser may be removed at any time by the written
vote, copies of which must be delivered to the Trustee, of the Holders of the
Certificates representing more than 50% of the Class Principal Balance of the
Controlling Class.
(e) For purposes of electing or removing an Operating Adviser,
Certificates of the Controlling Class held by the Depositor, the Master
Servicer or the Special Servicer or by any Affiliate of any of them shall be
taken into account with the same force and effect as if any other Person held
such Certificates.
SECTION 8.33. DUTIES OF OPERATING ADVISER.
(a) If an Operating Adviser has been elected and is currently acting
in such capacity, then, prior to the Special Servicer's taking any of the
following actions, the Special Servicer shall notify such Operating Adviser of
its intention to take such action:
(i) any foreclosure upon or comparable conversion (which may include
acquisition of an REO Property) of the ownership of properties securing
such of the Specially Serviced Mortgage Loans as come into and continue in
default;
(ii) any modification of a Money Term of a Mortgage Loan (other than a
modification consisting of the extension of the original Maturity Date of
such Mortgage Loan for two years or less);
(iii) any sale of a Defaulted Mortgage Loan or REO Property pursuant
to Section 8.31;
(iv) any determination to bring a Mortgaged Property or an REO
Property into compliance with Environmental Laws; and
(v) any acceptance of substitute or additional collateral for a
Mortgage Loan.
(b) The Operating Adviser, if any, may direct the Trustee to remove
the Special Servicer at any time effective upon the appointment and written
acceptance of such appointment by a successor to the Special Servicer appointed
by the Operating Adviser; provided that, prior to the effectiveness of any such
appointment the Operating Adviser and the Trustee shall have received: (i)
Rating Agency Confirmation; and (ii) an Opinion of Counsel (which shall not be
an expense of the Trustee or Trust) to the effect that this Agreement shall be
enforceable against the designated successor in accordance with its terms. The
existing Special Servicer shall be deemed to have resigned simultaneously with
such designated successor's becoming the Special Servicer hereunder; provided,
however, that (i) the resigning Special Servicer shall continue to be entitled
to receive all amounts accrued or owing to it under this Agreement on or prior
to the effective date of such resignation, whether in respect of Servicing
Advances or otherwise, and (ii) it and its directors, officers, employees and
agents
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shall continue to be entitled to the benefits of Sections 8.26 and 8.27,
notwithstanding any such resignation. Such resigning Special Servicer shall
cooperate with the Trustee and the replacement Special Servicer in effecting
the termination of the resigning Special Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer within two Business Days
to the replacement Special Servicer for administration by it of all cash
amounts that shall at the time be or should have been deposited in the
Collection Account or delivered by the Special Servicer to the Master Servicer
or that are thereafter received with respect to Specially Serviced Mortgage
Loans and REO Properties.
SECTION 8.34. EXCHANGE ACT REPORTING. The Trustee shall, at the
Trustee's expense, prepare for filing, execute and properly file with the
Securities and Exchange Commission, any and all reports, statements and
information, including, without limitation Form 10-K, Form 10-Q and Form 8-K,
respecting the Trust Fund and/or the Certificates required or specifically
provided herein to be filed on behalf of the Trust under the Exchange Act. The
Master Servicer and the Special Servicer shall provide any items required to be
delivered by either of them under this Agreement in a format acceptable to the
Trustee for electronic filing via the EDGAR system (in addition to any other
required format). The Trustee shall, at the Trustee's expense, seek from the
Securities and Exchange Commission a no-action letter or other exemptive relief
relating to reduced reporting requirements in respect of the Trust under the
Exchange Act and shall, in accordance with and to the extent permitted by
applicable law, file a Form 15 relating to automatic termination of reporting
in respect of the Trust under the Exchange Act.
SECTION 8.35. CREDIT LEASE SERVICING PROVISIONS.
(a) Notice; Review of Policies. The Depositor shall provide, or cause
to be provided, written notice (with copies to the Master Servicer) to the
provider of each of the Lease Enhancement Policy and the Residual Value Policy
within 30 days after the Closing Date, that (i) the Master Servicer shall be
sent all notices under each Lease Enhancement Policy and Residual Value Policy
and (ii) LaSalle National Bank, as trustee for the registered holders of the
Certificates shall be the loss payee under each Residual Value Policy and shall
be named the insured party under each Lease Enhancement Policy. The Master
Servicer shall review and be familiar with the terms and conditions relating to
enforcing claims and shall monitor the dates by which any claim or action must
be taken (including delivering any notices to the related insurer and
performing any actions required under each policy) under each policy to realize
the full value of such policy for the benefit of the Certificateholders. None
of the Depositor, the Master Servicer or the Special Servicer shall be liable
for making any payments under the Lease Enhancement Policy.
(b) Compliance with Policies. The Master Servicer shall abide by the
terms and conditions precedent to payment of claims under any Lease Enhancement
Policy and Residual Value Policy and take all such action as may be required to
comply with the terms and provisions of such policies in order to maintain, in
full force and effect, such policies, including, but not limited to, notifying
the related insurer in writing as soon as reasonably practicable, and within
the time period required under the applicable policy, after the Master Servicer
first receives written notification or has actual knowledge of (i) the
commencement of a condemnation proceeding, (ii) the occurrence of physical
damage, (iii) termination or rent abatement by the related Credit Tenant, and
(iv) any other event requiring notice to the insurer in order to make a timely
claim under the policy. In addition to complying with all conditions to
coverage, the Master Servicer shall take any and all actions required under the
Lease Enhancement Policy and Residual Value Policy in connection with any
claim, including (a) the timely presentation of a proof of loss containing all
required information, (b) the prosecution of all claims relating to a casualty
or condemnation, which will maximize any recoveries or awards from sources
other than the insurer under the Lease Enhancement Policy, (c) providing
reasonable access to
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any Mortgaged Property (but only to the extent such access is available
pursuant to the related Mortgage Loan documents, applicable law and the related
Credit Lease), and (d) the providing of any other notices required under the
policies in a timely fashion and any other actions which will maximize any
recoveries under the policies.
(c) Advances. The Master Servicer shall make a Servicing Advance with
respect to a Mortgaged Property in an amount equal to all such funds as are
necessary for the costs of maintenance or repair of a Mortgaged Property or
other obligation of the related Mortgagor to the extent the failure to complete
such maintenance or repair or other obligation may give rise to a Maintenance
Right or Additional Right of the related Credit Tenant under a Double Net Lease
or Triple Net Lease and provided that the particular Servicing Advance would
not, if made, constitute a Nonrecoverable Advance. All such Advances shall be
reimbursable from collections from the Mortgagor, and if not recovered from the
Mortgagor, such Advance shall be reimbursable from general collections no later
than three months after the date advanced. The foregoing shall in no way limit
the Master Servicer's ability to charge and collect from the Mortgagor or the
related Credit Tenant such costs together with interest thereon including any
lien granted with respect to any advances made by any mortgagee under any
Mortgage. The lien of the Mortgage on the Mortgaged Property shall not be
released by the Trustee, the Servicer or the Special Servicer until the amount
of the Servicing Advance made under this Section 8.35(c) have been recovered,
and shall be considered a Specially Serviced Mortgage Loan.
(d) Policy Termination. In the event that the Master Servicer receives
notice of any Policy Termination Event, the Master Servicer shall provide
written notice of such Policy Termination Event to the Trustee and the Rating
Agencies and redress such Policy Termination Event in accordance with the
Servicing Standard. Any legal fees incurred in connection with a resolution of
a Policy Termination Event shall be paid by the Master Servicer and shall be
reimbursable to it from the Mortgagor or other responsible party, and if not
recoverable, then from the Trust as an Additional Trust Expense.
(e) Rating Report. On the Master Servicer Remittance Date, the Master
Servicer will deliver to the Trustee a report stating with respect to each
Credit Tenant and any guarantor as of a date no earlier than three Business
Days prior to such date: (i) the long-term unsecured ratings for each Credit
Tenant and any guarantor as of the Closing Date as provided by Seller and as of
the date of such report, (ii) the long-term unsecured ratings for such Credit
Tenant or Guarantor included in the report prepared pursuant to this Section
for the immediately preceding Determination Date, and (iii) whether such Credit
Tenant or guarantor has been placed on a credit watch.
(f) Property Inspection. The Master Servicer will inspect or cause the
inspection of each Mortgaged Property securing a Credit Lease Loan once every
three (3) calendar years if the related Credit Tenant (or guarantor) has a
published rating of not less than BBB-, every two (2) years if the related
Credit Tenant (or guarantor) has a published rating between BB+ and BB-, and
annually if the related Credit Tenant has a published rating of less than BB-.
The Master Servicer will inspect or cause to be inspected annually each
Mortgaged Property for which no published rating is publicly available for the
related Tenant and such Mortgaged Property loan represents 5% or more of the
aggregate Cut-off Date Principal Balance of the Mortgage Loans, and will
inspect or cause to be inspected every second year each other Mortgaged
Property for which the related Credit Tenant has no published, publicly
available rating. In the event the published rating for any Credit Tenant or
Guarantor is downgraded by any Rating Agency, "Moody's Investors Service", Inc.
or "Standard & Poor's Rating Service" by one or more rating increment (i.e., AA
to A, or BBB- to BB-) and no inspection has been performed due to a ratings
downgrade in the preceding 12 months for the related Mortgaged Property, then
in each such
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instance, the Master Servicer shall cause all Mortgaged Properties leased to
such Credit Tenant to be inspected as soon as reasonably practical.
ARTICLE IX.
DEFAULT
SECTION 9.1. EVENTS OF DEFAULT.
(a) "Event of Default", wherever used herein, means any one of the
following events:
(A) any failure by the Master Servicer to make a required deposit to
the Collection Account which continues unremedied for one Business Day
following the date on which such deposit was first required to be made, or
(B) any failure by the Master Servicer to deposit into, or to remit to the
Trustee for deposit into, the Distribution Account any amount required to
be so deposited or remitted, which failure is not remedied by 11:00 a.m.
(New York City time) on the relevant Distribution Date; or
(ii) any failure by the Special Servicer to deposit into, or to remit
to the Master Servicer for deposit into, the Collection Account any amount
required to be so deposited or remitted under this Agreement which failure
continues unremedied for one Business Day following the date on which such
deposit or remittance was first required to be made; or
(iii) any failure by the Master Servicer or the Special Servicer to
timely make any Servicing Advance required to be made by it pursuant to
this Agreement and could reasonably be expected to have a material adverse
effect on which continues unremedied for a period ending on the earlier of
(A) 15 days following the date such Servicing Advance was first required to
be made, and (B) either, if applicable, (1) in the case of a Servicing
Advance relating to the payment of insurance premiums, the day on which
such insurance coverage terminates if such premiums are not paid or (2) in
the case of a Servicing Advance relating to the payment of real estate
taxes, the date of the commencement of a foreclosure action with respect to
the failure to make such payment; or
(iv) any failure on the part of the Master Servicer or the Special
Servicer duly to observe or perform in any material respect any other of
the covenants or agreements on the part of the Master Servicer or the
Special Servicer contained in this Agreement which continues unremedied for
a period of 30 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Master
Servicer or the Special Servicer, as the case may be, by the Trustee or the
Depositor, or to the Master Servicer or the Special Servicer, as the case
may be, the Depositor and the Trustee by the Holders of Certificates
entitled to not less than 25% of the Voting Rights; or
(v) any breach on the part of the Master Servicer or the Special
Servicer of any representation or warranty contained in this Agreement
which materially and adversely affects the interests of any Class of
Certificateholders and which continues unremedied for a period of 30 days
after the date on which notice of such breach, requiring the same to be
remedied, shall have been given to the Master Servicer or the Special
Servicer, as the case may be, by the Trustee or the Depositor, or to the
Master Servicer or the Special Servicer, as the case may be, the Depositor
and the Trustee by the Holders of Certificates entitled to not less than
25% of the Voting Rights; or
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(vi) a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises in an involuntary case under any
present or future federal or state bankruptcy, insolvency or similar law
for the appointment of a conservator, receiver, liquidator, trustee or
similar official in any bankruptcy, insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against
the Master Servicer or the Special Servicer and such decree or order shall
have remained in force undischarged or unstayed for a period of 60 days; or
(vii) the Master Servicer or the Special Servicer shall consent to the
appointment of a conservator, receiver, liquidator, trustee or similar
official in any bankruptcy, insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings of or relating to it or of or
relating to all or substantially all of its property;
(viii) the Master Servicer or the Special Servicer shall admit in
writing its inability to pay its debts generally as they become due, file a
petition to take advantage of any applicable bankruptcy, insolvency or
reorganization statute, make an assignment for the benefit of its
creditors, voluntarily suspend payment of its obligations, or take any
corporate action in furtherance of the foregoing; or
(ix) the Trustee shall have received written notice from either Rating
Agency that the continuation of the Master Servicer or the Special Servicer
in such capacity would result in the downgrade, qualification (which shall
not include a "negative" credit watch) or withdrawal of any rating then
assigned by such Rating Agency to any Class of Certificates.
(b) If any Event of Default with respect to the Master Servicer or the
Special Servicer (in either case for purposes of this Section 9.1(b), the
"DEFAULTING PARTY") shall occur and be continuing, then, and in each and every
such case, so long as such Event of Default shall not have been remedied, the
Depositor or the Trustee may terminate, and at the written direction of the
Holders of Certificates entitled to at least 51% of the Voting Rights, the
Trustee shall terminate, by notice in writing to the Defaulting Party, with a
copy of such notice to the Depositor (if the termination is effected by the
Trustee) or to the Trustee (if the termination is effected by the Depositor),
all of the rights and obligations of the Defaulting Party under this Agreement
and in and to the Mortgage Loans and the proceeds thereof (other than any
rights of the Defaulting Party as Certificateholder and for recovery of amounts
due the Defaulting Party out of the proceeds of the Mortgage Loans). From and
after the receipt by the Defaulting Party of such written notice, all authority
and power of the Defaulting Party under this Agreement, whether with respect to
the Certificates (other than as a Holder of any Certificate) or the Mortgage
Loans or otherwise, shall pass to and be vested in the Trustee pursuant to and
under this Section, and, without limitation, the Trustee is hereby authorized
and empowered to execute and deliver, on behalf of and at the expense of the
Defaulting Party, as attorney-in-fact or otherwise, any and all documents and
other instruments, and to do or accomplish all other acts or things necessary
or appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer and the Special Servicer
each agrees that if it is terminated pursuant to this Section 9.1(b), it shall
promptly (and in any event no later than ten Business Days subsequent to its
receipt of the notice of termination) provide the Trustee with all documents
and records requested by the Trustee to enable it or a successor servicer to
assume the Master Servicer's or Special Servicer's, as the case may be,
functions hereunder, and shall cooperate with the Trustee in effecting the
termination of the Master Servicer's or Special Servicer's, as the case may be,
responsibilities and rights hereunder, including, without limitation, the
transfer within two Business Days to the Trustee or a successor servicer for
administration by it of all cash amounts that shall at the time be or should
have been credited by the Master Servicer or the Special Servicer, as the case
may be, to the
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Collection Account, the Distribution Account or any Servicing Account or
thereafter be received with respect to the Mortgage Loans or any REO Property
(provided, however, that the Master Servicer and the Special Servicer each
shall continue to be entitled to receive all amounts accrued or owing to it
under this Agreement on or prior to the date of such termination, whether in
respect of Advances (together with Advance Interest thereon) made by it or
otherwise, and it and its directors, officers, employees and agents shall
continue to be entitled to the benefits of Sections 8.26 and 8.27
notwithstanding any such termination).
SECTION 9.2. TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR. On and after
the time the Master Servicer or the Special Servicer receives a notice of
termination pursuant to Section 9.1, the Trustee shall be the successor in all
respects to the Master Servicer or the Special Servicer, as the case may be, in
its capacity as such under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties
and liabilities (except for liabilities incurred prior to the Event of Default)
relating thereto and arising thereafter placed on the Master Servicer or the
Special Servicer, as the case may be, by the terms and provisions hereof,
including, without limitation, the Master Servicer's obligation to make P&I
Advances; provided that any failure to perform such duties or responsibilities
caused by the Master Servicer's or the Special Servicer's failure to provide
information or monies required by Section 9.1 shall not be considered a default
by the Trustee hereunder. The Trustee shall not be liable for any of the
representations and warranties of the Master Servicer or the Special Servicer
and the Trustee shall not be required to purchase any Mortgage Loan hereunder.
As compensation therefor, the Trustee shall be entitled to the applicable
Servicing Fees and all funds relating to the Mortgage Loans that the Master
Servicer or the Special Servicer would have been entitled to charge to the
Collection Account if the Master Servicer or the Special Servicer had continued
to act hereunder. Notwithstanding the above, the Trustee may, if it shall be
unwilling to so act, or shall, if it is unable to so act or if the Holders of
Certificates entitled to at least 51% of the Voting Rights so request in
writing to the Trustee or if it is not appropriately rated as an approved
master servicer or special servicer, as the case may be, by each Rating Agency,
promptly appoint, or petition a court of competent jurisdiction for the
appointment of, a mortgage loan servicing institution that has a net worth of
not less than $15,000,000 and is otherwise acceptable to each Rating Agency (as
evidenced by Rating Agency Confirmation), as the successor to the Master
Servicer or the Special Servicer, as the case may be, hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Master Servicer or the Special Servicer. No appointment of a successor to
the Master Servicer or the Special Servicer hereunder shall be effective until
the assumption by the successor to the Master Servicer or the Special Servicer
of all the responsibilities, duties and liabilities of the Master Servicer or
the Special Servicer, as the case may be, hereunder. Pending appointment of a
successor to the Master Servicer or the Special Servicer hereunder, the Trustee
shall act in such capacity as hereinabove provided and shall be entitled to
such compensation as would otherwise have been payable to the Master Servicer
or the Special Servicer, as the case may be. In connection with any such
appointment and assumption described herein, the Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans or otherwise as it and such successor shall agree; provided, however,
that no such compensation shall be in excess of that permitted the resigning or
terminated party hereunder. The Depositor, the Trustee and such successor shall
take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession.
SECTION 9.3. NOTIFICATION TO CERTIFICATEHOLDERS.
(a) Upon any resignation of the Master Servicer or the Special
Servicer pursuant to Section 8.24, any termination of the Master Servicer or
the Special Servicer pursuant to Section 9.1 or any appointment of a successor
to the Master Servicer or the Special Servicer pursuant to Section 9.2, the
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Trustee shall give prompt written notice thereof to Certificateholders at their
respective addresses appearing in the Certificate Register.
(b) Not later than the later of (i) 60 days after the occurrence of
any event which constitutes or, with notice or lapse of time or both, would
constitute an Event of Default and (ii) five days after the Trustee discovers
or is notified of the occurrence of such an event, the Trustee shall transmit
by mail to the Depositor and all Certificateholders notice of such occurrence,
unless such default shall have been cured.
SECTION 9.4. WAIVER OF EVENTS OF DEFAULT. The Holders of Certificates
entitled to at least 66 2/3% of the Voting Rights allocated to the respective
Classes of Certificates affected by any Event of Default hereunder may waive
such Event of Default; provided, however, that an Event of Default under clause
(i) or (ii) of Section 9.1 may be waived only by all of the Certificateholders.
Upon any such waiver of an Event of Default, such Event of Default shall cease
to exist and shall be deemed to have been remedied for every purpose hereunder;
provided, however, that the Trustee shall be entitled to reimbursement pursuant
to Section 7.12 for any costs and expenses incurred as a result of such Event
of Default. No such waiver shall extend to any subsequent or other Event of
Default or impair any right consequent thereon except to the extent expressly
so waived. Notwithstanding any other provisions of this Agreement, for purposes
of waiving any Event of Default pursuant to this Section 9.4, Certificates
registered in the name of the Depositor or any Affiliate of the Depositor shall
be entitled to the same Voting Rights with respect to the matters described
above as they would if any other Person held such Certificates.
ARTICLE X.
PURCHASE AND TERMINATION OF THE TRUST
SECTION 10.1. TERMINATION OF TRUST.
(a) Subject to Section 10.3, the Trust and the respective obligations
and responsibilities of the Depositor, the Trustee, the Master Servicer, the
Special Servicer and the Fiscal Agent hereunder (other than the obligation of
the Trustee to make payments to Certificateholders on the final Distribution
Date pursuant to Section 6.4 or otherwise as set forth in Section 10.2 and
other than the obligations in the nature of information or tax reporting or
tax-related administrative or judicial contests or proceedings) shall terminate
on the earlier of (i) the later of (A) the final payment or other liquidation
of the last Mortgage Loan held by the Trust and (B) the disposition of the last
REO Property held by the Trust and (ii) the sale of all Mortgage Loans and any
REO Properties held by the Trust in accordance with Section 10.1(b); provided
that in no event shall the Trust created hereby continue beyond the expiration
of 21 years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late Ambassador of the United States to the Court of St. James,
living on the date hereof.
(b) As soon as reasonably practical, the Trustee shall give the
Depositor, the Master Servicer, the Special Servicer, the Majority
Certificateholder of the Controlling Class and the Class R-I Certificateholders
notice of the date when the aggregate Certificate Principal Balance of the
Principal Balances Certificates, after giving effect to distributions of
principal made on the next Distribution Date, will be less than or equal to 1%
of the Initial Pool Balance. The Depositor, the Master Servicer, the Special
Servicer, the majority holders of the Controlling Class and the Holders of
Class R-I Certificates representing a majority Percentage Interest in such
Class shall thereafter be entitled, in that order of priority, to purchase, in
whole only, the Mortgage Loans and any REO Properties then remaining in the
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Trust Fund. If any such party desires to exercise such option, it will notify
the Trustee who will notify any other such party with a prior right to exercise
such option. If any such party that has been so provided notice by the Trustee
notifies the Trustee within ten Business Days after receiving notice of the
proposed purchase that it wishes to purchase the assets of the Trust, then such
party (or, in the event that more than one of such parties notifies the Trustee
that it wishes to purchase the assets of the Trust, the party with the first
right to purchase the assets of the Trust) may purchase the assets of the Trust
in accordance with this Agreement. The "TERMINATION PRICE" shall equal the
greater of (x) the sum of (i) the aggregate Purchase Price of all the remaining
Mortgage Loans (other than REO Mortgage Loans and Mortgage Loans as to which a
Final Recovery Determination has been made) held by the Trust, plus (ii) the
appraised value of each remaining REO Property, if any, held by the Trust (such
appraisal to be conducted by a Qualified Appraiser selected by the Master
Servicer and approved by the Trustee), minus (iii) solely in the case where the
Master Servicer is effecting such purchase, the aggregate amount of
unreimbursed Advances made by the Master Servicer, together with any Advance
Interest accrued and payable to the Master Servicer in respect of such Advances
and any unpaid Master Servicing Fees remaining outstanding (which items shall
be deemed to have been paid or reimbursed to the Master Servicer in connection
with such purchase) (or, solely in the case where the Special Servicer is
effecting such purchase, the aggregate amount of unreimbursed Servicing
Advances made by the Special Servicer, together with any Advance Interest
accrued and payable to the Special Servicer in respect of such Servicing
Advances and any unpaid Special Servicing Fees remaining outstanding (which
items shall be deemed to have been paid or reimbursed to the Special Servicer
in connection with such purchase); (y) the fair market value of all remaining
assets of REMIC I and the grantor trust; and (z) the amount that would be
sufficient to pay the outstanding Certificate Principal Balance of each Class
of Certificates, Distributable Certificate Interest thereon, and Distributable
Certificate Interest on the Class X Certificates for the final Distribution
Date.
In the event that the Depositor, the Master Servicer, the Special
Servicer, the Majority Certificateholder of the Controlling Class or the
Holders of Class R-I Certificates representing a majority Percentage Interest
in such Class purchase all of the remaining Mortgage Loans and REO Properties
held by the Trust in accordance with the preceding paragraph, the party
effecting such purchase (the "FINAL PURCHASER") shall (i) deposit in the
Collection Account not later than the Determination Date relating to the
Distribution Date on which the final distribution on the Certificates is to
occur, an amount in immediately available funds equal to the Termination Price
(other than the amount, if any, of such Termination Price paid in respect of
the assets of the grantor trust, which amount shall be paid to the Trustee for
deposit in the Excess Interest Distribution Account) and (ii) deliver notice to
the Trustee of its intention to effect such purchase. Upon confirmation that
such deposit has been made, the Trustee shall release or cause to be released
to the Final Purchaser or its designee the Mortgage Files for the remaining
Mortgage Loans and shall execute all assignments, endorsements and other
instruments furnished to it by the Final Purchaser as shall be necessary to
effectuate transfer of the remaining Mortgage Loans and REO Properties held by
the Trust, in each case without representation or warranty by the Trustee. All
Servicing Files for the remaining Mortgage Loans and REO Properties shall be
delivered to the Final Purchaser or its designee at the expense of the Final
Purchaser.
(c) As a condition to the purchase of the assets of the Trust pursuant
to Section 10.1(b), the Final Purchaser must deliver to the Trustee an Opinion
of Counsel, which shall be at the expense of the Final Purchaser, stating that
such termination will be a "qualified liquidation" under Section 860F(a)(4) of
the Code of each of REMIC I, REMIC II and REMIC III. Such purchase shall be
made in accordance with Section 10.3.
SECTION 10.2. PROCEDURE UPON TERMINATION OF TRUST.
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(a) Notice of any termination pursuant to the provisions of Section
10.1, specifying the Distribution Date upon which the final distribution shall
be made, shall be given promptly by the Trustee to each Rating Agency and each
Certificateholder by first class mail no later than the later of (a) ten days
prior to the date of such termination and (b) the date the Trustee receives
notice of such termination. Such notice shall specify (A) the Distribution Date
upon which final distribution on the Certificates will be made and (B) that the
Record Date otherwise applicable to such Distribution Date is not applicable,
distribution being made only upon presentation and surrender of the
Certificates at the office or agency of the Trustee therein specified. The
Trustee shall give such notice to the Depositor and the Certificate Registrar
at the time such notice is given to Certificateholders. Upon any such
termination, the Trustee shall terminate, or request the Master Servicer to
terminate, the Collection Account and the Distribution Account and any other
account or fund maintained with respect to the Certificates, subject to the
Trustee's obligation hereunder to hold all amounts payable to the nontendering
Certificateholders in trust without interest pending such payment.
(b) On the final Distribution Date, the Trustee shall distribute to
each Certificateholder that presents and surrenders its Certificates all
amounts payable on such Certificates on such final Distribution Date in
accordance with Section 6.4 and Section 6.4.1.
(c) In the event that all of the Holders do not surrender their
Certificates for cancellation within three months after the time specified in
the above-mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
one year after the second notice any Certificates shall not have been
surrendered for cancellation, the Trustee may take appropriate steps to contact
the nontendering Certificateholders concerning surrender of their Certificates,
and the cost thereof shall be paid out of the amounts distributable to such
Holders. If within two years after the second notice any such Certificates
shall not have been surrendered for cancellation, the Trustee shall, subject to
applicable state law relating to escheat, hold all amounts distributable to
such Holders for the benefit of such Holders. No interest shall accrue on any
amount held by the Trustee and not distributed to a Certificateholder due to
such Certificateholder's failure to surrender its Certificate(s) for payment of
the final distribution thereon in accordance with this Section. Any money held
by the Trustee pending distribution under this Section 10.2 after 90 days after
the adoption of a plan of complete liquidation shall be deemed for tax purposes
to have been distributed from the REMICs and shall be beneficially owned by the
related Holder.
SECTION 10.3. ADDITIONAL TRUST TERMINATION REQUIREMENTS.
(a) In the event of a purchase of all the remaining Mortgage Loans and
REO Properties held by the Trust in accordance with Section 10.1 or any other
termination of the Trust under this Article X, the Trust and each REMIC Pool
shall be terminated in accordance with the following additional requirements,
unless in the case of a termination under Section 10.1 hereof, the Final
Purchaser delivers to the Trustee an Opinion of Counsel at the expense of the
Final Purchaser (or, in the case of any other termination, the Trustee shall
obtain such Opinion of Counsel at the expense of the Trust Fund) addressed to
the Depositor and the Trustee to the effect that the failure of the Trust to
comply with the requirements of this Section 10.3 will not (i) result in the
imposition of taxes on "prohibited transactions" of any REMIC Pool under the
REMIC Provisions or (ii) cause any REMIC Pool to fail to qualify as a REMIC at
any time that any Certificates are outstanding:
(i) within 89 days prior to the final Distribution Date set forth in
the notice given by the Trustee under Section 10.2, the Trustee shall adopt
a plan of complete liquidation
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prepared by the Final Purchaser and meeting the requirements for a
qualified liquidation for each REMIC Pool under Section 860F of the Code
and any regulations thereunder;
(ii) during such 90-day liquidation period and at or after the
adoption of the plans of complete liquidation and at or prior to the final
Distribution Date, the Trustee shall sell all of the remaining Mortgage
Loans and any REO Properties held by the Trust to the Final Purchaser for
cash in an amount equal to the Termination Price, such cash shall be
deposited into the Collection Account, shall be deemed distributed on the
REMIC I Regular Interests in retirement thereof, shall be deemed
distributed on the REMIC II Regular Interests in retirement thereof, and
shall be distributed to the Certificateholders in retirement of the
Certificates;
(iii) at the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited, to the Holders of the related Class of Residual
Certificates all cash on hand in each REMIC Pool after making such final
deemed payment or payments (other than cash retained to meet claims), and
REMIC I, REMIC II and REMIC III shall terminate at that time; and
(iv) in no event may the final payment on the REMIC I Interests, the
REMIC II Interests, the REMIC III Regular Certificates, or the Class R-III
Certificates be made after the 89th day from the date on which such plans
of complete liquidation are adopted. The Trustee shall specify the first
day of the 90-day liquidation period in a statement attached to the final
Tax Return for each REMIC Pool pursuant to Treasury regulation 1.860F-1.
(b) By their acceptance of Certificates, the Holders thereof hereby
agree to authorize the Trustee to adopt a plan of complete liquidation of REMIC
I, REMIC II and REMIC III in accordance with the foregoing requirements, which
authorization shall be binding upon all successor Certificateholders.
ARTICLE XI.
RIGHTS OF CERTIFICATEHOLDERS
SECTION 11.1. LIMITATION ON RIGHTS OF HOLDERS.
(a) The death or incapacity of any Certificateholder shall not operate
to terminate this Agreement or the Trust, nor entitle such Certificateholder's
legal representatives or heirs to claim an accounting or take any action or
proceeding in any court for a partition or winding up of the Trust, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
(b) Except as otherwise expressly provided herein, no
Certificateholder, solely by virtue of its status as a Certificateholder, shall
have any right to vote or in any manner otherwise control the Master Servicer,
the Special Servicer or the operation and management of the Trust, 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.
(c) No Certificateholder, solely by virtue of its status as
Certificateholder, shall have any right by virtue or by availing of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement unless the
Holders of
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Certificates entitled to not less than 25% of the Voting Rights shall have made
written request upon the Trustee to institute such action, suit or proceeding
in its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the cost, 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 and no
direction inconsistent with such written request has been given the Trustee
during such 60-day period by such Certificateholders; it being understood and
intended, and being expressly covenanted by each Certificateholder with every
other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatsoever by virtue or by
availing 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 benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
SECTION 11.2. ACCESS TO LIST OF HOLDERS.
(a) If the Trustee is not acting as Certificate Registrar, the
Certificate Registrar will furnish or cause to be furnished to the Trustee,
within fifteen days after receipt by the Certificate Registrar of a request by
the Trustee in writing, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Certificateholders of each Class as
of the most recent Record Date.
(b) If the Depositor, the Operating Adviser, the Special Servicer, the
Master Servicer or three or more Holders (hereinafter referred to as
"applicants," with a single Person that (together with its Affiliates) is the
Holder of more than one Class of Certificates being viewed as a single
"applicant" for these purposes) apply in writing to the Trustee, and such
application states that the applicants desire to communicate with other Holders
with respect to their rights under this Agreement or under the Certificates and
is accompanied by a copy of the communication which such applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt
of such application, send, at such Person's expense, the written communication
proffered by the applicants to all Certificateholders at their addresses as
they appear in the Certificate Register. The Depositor, the Master Servicer and
the Special Servicer may each obtain, upon request, from the Trustee and the
Certificate Registrar a copy of the Certificate Register.
(c) Every Holder, by receiving and holding a Certificate, agrees with
the Depositor, the Certificate Registrar and the Trustee that neither the
Depositor, the Certificate Registrar nor the Trustee shall be held accountable
by reason of the disclosure of any such information as to the names and
addresses of the Certificateholders hereunder, regardless of the source from
which such information was derived.
SECTION 11.3. ACTS OF HOLDERS OF CERTIFICATES.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders 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, where it is hereby expressly required, to the Depositor.
Such instrument or instruments (as the action embodies therein and evidenced
thereby) are herein sometimes referred to as an "ACT" of the Holders signing
such instrument
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or instruments. Proof of execution of any such instrument or of a writing
appointing any such agents shall be sufficient for any purpose of this
Agreement and conclusive in favor of the Trustee and the Depositor, if made in
the manner provided in this Section. The Trustee agrees to promptly notify the
Depositor of any such instrument or instruments received by it, and to promptly
forward copies of the same.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer
authorized by law to take acknowledgments or deeds, certifying that the
individual signing such instrument or writing acknowledged to such notary
public or other officer the execution thereof. Whenever such execution is by an
officer of a corporation or a member of a partnership on behalf of such
corporation or partnership, such certificate or affidavit shall also constitute
sufficient proof of such officer's or member's authority. The fact and date of
the execution of any such instrument or writing, or the authority of the
individual executing the same, may also be proved in any other manner which the
Trustee deems sufficient.
(c) The ownership of Certificates (notwithstanding any notation of
ownership or other writing thereon made by anyone other than the Trustee) shall
be proved by the Certificate Register, and neither the Trustee nor the
Depositor shall be affected by any notice to the contrary.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Certificate shall bind every future
Holder of the same Certificate and the Holder of every Certificate issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Depositor in reliance thereon, whether or not notation of such action is
made upon such Certificate.
ARTICLE XII.
REMIC ADMINISTRATION
The provisions of this Article XII shall apply to each REMIC Pool.
SECTION 12.1. REMIC ADMINISTRATION.
(a) An election will be made by the Trustee on behalf of the Trust to
treat the segregated pool of assets consisting of the Mortgage Loans, such
amounts as shall from time to time be held in the Collection Account and the
Distribution Account, the Insurance Policies and any REO Properties and any
other assets constituting REMIC I (as set forth on the definition of REMIC I)
as a REMIC under the Code. Such election will be made on Form 1066 or other
appropriate federal tax or information return or any appropriate state return
for the taxable year ending on the last day of the calendar year in which the
REMIC I Interests are issued. For purposes of such election, the REMIC I
Regular Interests shall each be designated as a separate class of "regular
interests" in REMIC I and the Class R-I Certificates shall be designated as the
sole class of "residual interests" in REMIC I.
An election will be made by the Trustee on behalf of REMIC II to treat
the segregated pool of assets consisting of the REMIC I Regular Interests as a
REMIC under the Code. Such election will be made on Form 1066 or other
appropriate federal tax or information return or any appropriate state return
for the taxable year ending on the last day of the calendar year in which the
REMIC II Interests are issued. For the purposes of such election, the REMIC II
Regular Interests shall be designated as the
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"regular interests" in REMIC II and the Class R-II Certificates shall be
designated as the sole class of "residual interests" in REMIC II.
An election will be made by the Trustee on behalf of REMIC III to
treat the segregated pool of assets consisting of the REMIC II Regular
Interests as a REMIC under the Code. Such election will be made on Form 1066 or
other appropriate federal tax or information return or any appropriate state
return for the taxable year ending on the last day of the calendar year in
which the REMIC III Certificates are issued. For purposes of such election, the
Class A-1, Class A-2, Class B, Class C, Class D, Class E, Class F, Class G,
Class H, Class J, Class L, Class M, Class N Certificates and each Component
Interest of the Class X Certificates shall be designated as the "regular
interests" in REMIC III and the Class R-III Certificates shall be designated as
the sole class of "residual interests" in REMIC III.
The Trustee shall not permit the creation of any "interests" (within
the meaning of Treasury regulation Section 1.860D-1(b)(1)) in any of the REMIC
Pools other than the REMIC I Regular Interests, the REMIC II Regular Interests
and the interests evidenced by the Certificates.
(b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC Pool within the meaning of Section 860G(a)(9) of the Code. The latest
possible maturity date for the REMIC I Interests, the REMIC II Interests and
the REMIC III Certificates shall be the Final Rated Distribution Date.
The assets of the Trust Fund consisting of the right to any Excess
Interest in respect of the Hyper-Amortization Loans and the Excess Interest
Distribution Account shall be held by the Trustee for the benefit of the
Holders of the Class N Certificates, and such Class N Certificates, in the
aggregate, will evidence 100% beneficial ownership of such assets (the "grantor
trust assets") from and after the Closing Date. It is intended that the portion
of the Trust Fund consisting of the grantor trust assets will be treated as a
grantor trust for federal income tax purposes, and each of the parties to this
Agreement agrees that it will not take any action that is inconsistent with
establishing or maintaining such treatment. The Trustee shall hold the grantor
trust assets separate and apart from the assets of REMIC I, REMIC II, and REMIC
III.
(c) The Trustee shall pay all routine tax related expenses (not
including any taxes, however denominated, including any additions to tax,
penalties and interest) of each REMIC Pool and the grantor trust, excluding any
professional fees or extraordinary expenses related to audits or any
administrative or judicial proceedings with respect to any REMIC Pool or the
grantor trust that involve the Internal Revenue Service or state tax
authorities.
(d) The Trustee shall cause to be prepared, signed, and timely filed
with the Internal Revenue Service, on behalf of each REMIC Pool, an application
for a taxpayer identification number for each REMIC Pool and the grantor trust
on Internal Revenue Service Form SS-4. The Trustee, upon receipt from the
Internal Revenue Service of the Notice of Taxpayer Identification Number
Assigned, shall promptly forward a copy of such notice to the Depositor and the
Master Servicer. The Trustee shall prepare and file Form 8811 on behalf of each
REMIC Pool within 30 days after the Closing Date and shall designate an
appropriate Person to respond to inquiries by or on behalf of
Certificateholders for original issue discount and related information in
accordance with applicable provisions of the Code.
(e) The Trustee shall prepare, execute and file all of each REMIC
Pool's and the grantor trust's federal and state income or franchise tax and
information returns as such REMIC Pool's and the grantor trust's direct
representative; the expenses of preparing and filing such returns shall be
borne by the Trustee. The Depositor, the Master Servicer and the Special
Servicer shall each provide on
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a timely basis to the Trustee or its designee such information with respect to
the Trust or any REMIC Pool as is in the Depositor's, the Master Servicer's or
the Special Servicer's, as the case may be, possession, that the Depositor, the
Master Servicer or the Special Servicer, as the case may be, has received or
prepared by virtue of its acting in such capacity hereunder and that is
reasonably requested by the Trustee to enable it to perform its obligations
under this subsection, and the Trustee shall be entitled to conclusively rely
on such information in the performance of its obligations hereunder. The
Depositor shall indemnify the Trust, the Trustee and the Fiscal Agent for any
liability or assessment against any of them or any cost or expense (including
attorneys' fees) incurred by any of them resulting from any error in any of
such tax or information returns resulting from bad faith, negligence, or
willful malfeasance of the Depositor in providing any information for which the
Depositor is responsible for preparing. The Master Servicer and the Special
Servicer shall each indemnify the Trust, the Trustee, the Fiscal Agent and the
Depositor for any liability or assessment against the Trust, the Trustee, the
Fiscal Agent or the Depositor, as the case may be, and any expenses incurred in
connection with such liability or assessment (including attorney's fees)
resulting from any error in any of such tax or information returns resulting
from errors in the information provided by the Master Servicer or the Special
Servicer, as the case may be, caused by the negligence, willful misconduct or
bad faith of the Master Servicer or the Special Servicer, as the case may be.
The Trustee shall be liable to the Trust, the Master Servicer, the Special
Servicer and the Depositor for any expense incurred by the Trust, the Master
Servicer, the Special Servicer or the Depositor resulting from any error in any
of such tax or information returns resulting from errors in the preparation of
such returns caused by the negligence, willful misconduct or bad faith of the
Trustee. Each indemnified party shall immediately notify the indemnifying party
or parties of the existence of a claim for indemnification under this Section
12.1(e), and provide the indemnifying party or parties, at the expense of such
indemnifying party or parties, an opportunity to contest the tax or assessment
or expense giving rise to such claim, provided that the failure to give such
notification rights shall not affect the indemnification rights in favor of the
Trust under this Section 12.1(e). Any such indemnification shall survive the
resignation or termination of the Master Servicer, the Special Servicer, the
Trustee or the Fiscal Agent and the termination of this Agreement.
(f) The Trustee shall perform on behalf of each REMIC Pool and the
grantor trust all reporting and other tax compliance duties that are the
responsibility of such REMIC Pool and the grantor trust under the Code, REMIC
Provisions, or other compliance guidance issued by the Internal Revenue Service
or any state or local taxing authority. Among its other duties, the Trustee
shall provide (i) to the Internal Revenue Service or other Persons (including,
but not limited to, any Person that transferred a Residual Certificate to a
Disqualified Organization or to an agent that has acquired a Residual
Certificate on behalf of a Disqualified Organization) such information as is
necessary for the application of any tax relating to the transfer of a Residual
Certificate to any Disqualified Organization and (ii) to the Certificateholders
such information or reports as are required by the Code or REMIC Provisions.
(g) The Trustee shall forward to the Depositor copies of quarterly and
annual Tax Returns and Form 1099 information returns and such other information
within the control of the Trustee as the Depositor may reasonably request in
writing. Moreover, the Trustee shall forward to Certificateholders such forms
and furnish such information within its control as are required by the Code to
be furnished to them, shall prepare and file with the appropriate state
authorities as may to the actual knowledge of a Responsible Officer of the
Trustee be required by applicable law and shall prepare and disseminate to
Certificateholders Forms 1099 (or otherwise furnish information within the
control of the Trustee) to the extent required by applicable law. The Trustee
will make available to any Certificateholder any tax related information
required to be made available to such Certificateholder pursuant to the Code
and any Treasury Regulations thereunder.
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(h) The Holder of Certificates representing the greatest Percentage
Interest in each Class of Residual Certificates shall be the Tax Matters Person
for the related REMIC Pool; provided that if Treasury Regulations shall be
modified to require another Person to be designated as Tax Matters Person, then
such Person shall become Tax Matters Person at such time. The duties of the Tax
Matters Person for each of the REMIC Pools are hereby delegated to the Trustee,
and each Residual Certificateholder, by acceptance of its Residual Certificate,
agrees, on behalf of itself and all successor holders of such Residual
Certificate, to such delegation to the Trustee as their agent and attorney in
fact. If the Code or applicable Treasury regulations prohibits the Trustee from
signing any applicable Internal Revenue Service, court or other administrative
documents or from otherwise acting as Tax Matters Person (as an agent or
otherwise), the Trustee shall do or cause to be done whatever is necessary for
the signing of such documents and the taking of any other such act, and the
Residual Certificateholders shall reasonably cooperate with the Trustee in
connection therewith. The Trustee shall not be required to expend or risk its
own funds or otherwise incur any other financial liability in the performance
of its duties hereunder or in the exercise of any of its rights or powers
(except to the extent of the ordinary expenses of performing its duties under,
or as otherwise expressly provided in, this Agreement), if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
(i) The Trustee, the Holders of the Residual Certificates, the Master
Servicer and the Special Servicer shall each exercise reasonable care, to the
extent within its control, and with respect to each of the Trustee, the Master
Servicer and the Special Servicer, within the scope of its express duties, and
shall each act in accordance with this Agreement and the REMIC Provisions, in
order to create and maintain the status of each REMIC Pool as a REMIC and the
grantor trust assets as a grantor trust or, as appropriate, adopt a plan of
complete liquidation in accordance with the REMIC Provisions and Article X
hereof.
(j) The Trustee, the Master Servicer, the Special Servicer, the Fiscal
Agent and the Holders of Residual Certificates shall not take any action or
fail to take any action or cause any REMIC Pool to take any action or fail to
take any action if any of such Persons knows or could, upon the exercise of
reasonable diligence, know, that, under the REMIC Provisions, such action or
failure to act, as the case may be, could (i) endanger the status of any REMIC
Pool as a REMIC or (ii) result in the imposition of a tax upon any REMIC Pool
(including but not limited to the tax on prohibited transactions as defined in
Section 860F(a)(2) of the Code, the tax on contributions to a REMIC set forth
in Section 860G(d) of the Code, or except as provided in Section 8.20(a)
hereof, result in the imposition of a tax on "net income from foreclosure
property" as defined in Section 860G(c) of the Code (any of the foregoing, an
"ADVERSE REMIC EVENT")), unless the Trustee has received an Opinion of Counsel
(at the expense of the party seeking to take such action) to the effect that
the contemplated action will not endanger such status or result in the
imposition of such a tax. Any action required under this Section which would
result in an unusual or unexpected expense shall be undertaken at the expense
of the party seeking to have the Trustee, the Master Servicer, the Special
Servicer, the Fiscal Agent or the Holders of the Residual Certificates
undertake such action.
(k) In the event that any tax is imposed on the grantor trust or on
REMIC I, REMIC II or REMIC III, including, without limitation, "prohibited
transactions" taxes as defined in Section 860F(a)(2) of the Code, any tax on
"net income from foreclosure property" as defined in Section 860G(c) of the
Code, any taxes on contributions to REMIC I, REMIC II or REMIC III after the
Startup Day pursuant to Section 860G(d) of the Code, and any other tax imposed
by the Code or any applicable provisions of state or local tax laws (other than
any tax permitted to be incurred by the Special Servicer pursuant to Section
8.20(a)), such tax, together with all incidental costs and expenses (including,
without limitation, penalties and reasonable attorneys' fees), shall be charged
to and paid by: (i) the Trustee, if
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such tax arises out of or results from a breach of any of its obligations under
this Article XII; (ii) the Special Servicer, if such tax arises out of or
results from a breach by the Special Servicer of any of its obligations under
Article VIII or this Article XII; (iii) the Master Servicer, if such tax arises
out of or results from a breach by the Master Servicer of any of its
obligations under Article VIII or this Article XII; or (iv) the Trust in all
other instances. Any tax permitted to be incurred by the Special Servicer
pursuant to Section 8.20(a) shall be charged to and paid by the Master Servicer
(at the direction of the Trust) from the net income generated on the related
REO Property. Any such amounts payable by the Trust in respect of taxes shall
be paid by the Master Servicer (at the direction of the Trustee) out of amounts
on deposit in the Collection Account or, if appropriate, out of collections of
Excess Interest.
(l) The Trustee shall, for federal income tax purposes, maintain books
and records with respect to each REMIC Pool on a calendar year and on an
accrual basis. The books and records shall be sufficient concerning the nature
and amount of each REMIC Pool's investments to show that such REMIC Pool has
complied with the REMIC Provisions.
(m) None of the Trustee, the Master Servicer or the Special Servicer
shall enter into any arrangement by which any REMIC Pool will receive a fee or
other compensation for services (other than under the circumstances described
in, and subject to the conditions of, Section 8.20(a)).
(n) In order to enable the Trustee to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Trustee
within ten (10) days after the Closing Date all information or data that the
Trustee reasonably determines to be relevant for tax purposes on the valuations
and offering prices of the Certificates, including, without limitation, the
yield, Prepayment Assumption, Issue Prices and projected cash flows of the
Senior Certificates, Subordinate Certificates and Residual Certificates, as
applicable, and the projected cash flows of the Mortgage Loans. Thereafter, the
Depositor shall provide to the Trustee or its designee, promptly upon request
therefor, any such additional information or data within the Depositor's
possession or knowledge that the Trustee may, from time to time, reasonably
request in order to enable the Trustee to perform its duties as set forth
herein. The Trustee is hereby directed to use any and all such information or
data provided by the Depositor in the preparation of all federal and state
income or franchise tax and information returns and reports for each REMIC Pool
and the grantor trust to Certificateholders as required herein. The Depositor
hereby indemnifies the Trustee, the Fiscal Agent and each REMIC Pool for any
losses, liabilities, damages, claims, expenses (including attorneys' fees) or
assessments against the Trustee, the Fiscal Agent and each REMIC Pool arising
from any errors or miscalculations of the Trustee pursuant to this Section that
result from any failure of the Depositor to provide, or to cause to be
provided, accurate information or data to the Trustee (but not resulting from
the methodology employed by the Trustee) on a timely basis and such
indemnification shall survive the termination of this Agreement and the
termination or resignation of the Trustee or Fiscal Agent; provided, however,
that to the extent that any Certificates have been transferred to a Seller
under circumstances in which the fair market value of such Certificates is
their issue price, the Depositor may exclusively rely on the accuracy of a
determination of such fair market value by such Seller in supplying information
to the Trustee pursuant to this Section 12.1(n).
The Trustee agrees that all such information or data so obtained by it
is to be regarded as confidential information and agrees that it shall use its
best reasonable efforts to retain in confidence, and shall ensure that its
officers, employees and representatives retain in confidence, and shall not
disclose, without the prior written consent of the Depositor, any or all of
such information or data, or make any use whatsoever (other than for the
purposes contemplated by this Agreement) of any such information or data
without the prior written consent of the Depositor, unless such information is
generally available to the public (other than as a result of a breach of this
Section 12.1 (n)) or is required by law or applicable regulations to be
disclosed or is disclosed (i) to independent auditors and accountants, counsel
and other
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professional advisers of the Trustee and its parent, or (ii) in connection with
enforcing its rights and obligations under this Agreement.
(o) At all times as may be required by the Code, the Trustee, the
Master Servicer and the Special Servicer each shall, to the extent within its
control and the scope of its duties more specifically set forth herein,
maintain the assets of each REMIC Pool as "qualified mortgages" as defined in
Section 860G(a)(3) of the Code and "permitted investments" as defined in
Section 860G(a)(5) of the Code, subject to the "de minimis" exception of
Treasury Regulations Section 1.860D-1(b)(3).
(p) the Holders of the Class R-I, Class R-II and Class R-III
Certificates shall pay when due their pro rata share of any and all federal,
state and local taxes imposed on REMIC I, REMIC II or REMIC III, as applicable,
or their respective assets or transactions, including, without limitation,
"prohibited transaction" taxes, as defined in Section 860F of the Code, any tax
on contributions imposed by Section 860G(d) of the Code, and any tax on "net
income from foreclosure property" as defined in Section 860G(c) of the Code. To
the extent that such taxes are not paid by the Class R-I, Class R-II or Class
R-III Certificateholders, respectively, the Trustee shall pay such remaining
REMIC taxes out of current or future amounts otherwise distributable to the
respective Holder or, if no such amounts are available, out of other amounts
held in the Distribution Account.
SECTION 12.2. PROHIBITED TRANSACTIONS AND ACTIVITIES. None of the
Trustee, the Master Servicer or the Special Servicer shall, to the extent
within its control, permit the sale, disposition or substitution of any of the
Mortgage Loans (except in a disposition pursuant to (i) the foreclosure,
default or imminent default of a Mortgage Loan, (ii) the bankruptcy or
insolvency of any REMIC Pool, (iii) the termination of the REMIC Pools in a
"qualified liquidation" as defined in Section 860F(a)(4) of the Code, or (iv) a
repurchase or substitution by any Seller, as contemplated by Article II
hereof), nor acquire any assets for the Trust, except as provided herein, nor
sell or dispose of any investments in the Collection Account or Distribution
Account for gain, nor accept any contributions to any REMIC Pool (other than a
cash contribution during the 3-month period beginning on the Startup Day),
unless it has received an Opinion of Counsel (at the expense of the Person
requesting such action) to the effect that such sale, disposition, acquisition,
substitution, or acceptance will not (a) affect adversely the status of any
REMIC Pool as a REMIC or of the REMIC I Regular Interests, the REMIC II Regular
Interests, the REMIC III Regular Certificates or the Component Interests of the
Class X Certificates, as the case may be, as the regular interests therein, (b)
affect the distribution of interest or principal on the Certificates, (c)
result in the encumbrance of the assets transferred or assigned to any REMIC
Pool (except pursuant to the provisions of this Agreement) or (d) cause any
REMIC Pool to be subject to a tax on "prohibited transactions" or "prohibited
contributions" or other tax pursuant to the REMIC Provisions.
SECTION 12.3. LIABILITY WITH RESPECT TO CERTAIN TAXES AND LOSS OF
REMIC STATUS. In the event that any REMIC Pool fails to qualify as a REMIC,
loses its status as a REMIC, or incurs state or local taxes, or tax as a result
of a prohibited transaction or prohibited contribution subject to taxation
under the REMIC Provisions due to the negligent performance by the Trustee of
its duties and obligations set forth herein, the Trustee shall be liable to the
REMIC Pools and the Holders of the Residual Certificates for any and all
losses, claims, damages, liabilities or expenses ("LOSSES") resulting from such
negligence and relating to the Residual Certificates; provided, however, that
the Trustee shall not be liable pursuant to this Section 12.3 to the extent
that any such Losses are attributable to the action or inaction of the Master
Servicer, the Special Servicer, the Depositor or the Holders of such Residual
Certificates or to the extent that any such Losses result from any actions or
failures to act taken in reliance on an Opinion of Counsel or misinformation
provided by the Master Servicer, the Special Servicer, the Depositor or such
Holders of the Residual Certificates. The foregoing
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shall not be deemed to limit or restrict the rights and remedies of the Trust
or the Certificateholders under any other provision of this Agreement or now or
hereafter otherwise existing at law or in equity. The Trustee shall be entitled
to intervene in any litigation in connection with the foregoing and to maintain
control over its defense.
SECTION 12.4. MODIFICATIONS OF MORTGAGE LOANS. Notwithstanding
anything to the contrary in this Agreement, neither the Trustee, the Master
Servicer nor the Special Servicer shall permit any modification of any Money
Term of a Mortgage Loan or a Specially Serviced Mortgage Loan unless the
Trustee and the Master Servicer have received a Nondisqualification Opinion or
a ruling to the same effect as a Nondisqualification Opinion from the Internal
Revenue Service (at the expense of the party making the request that the Master
Servicer or the Special Servicer modify the Mortgage Loan or a Specially
Serviced Mortgage Loan) to the effect that such modification would not be
treated as an exchange pursuant to Section 1001 of the Code (or, if it would be
so treated, would not be treated as a "significant modification" for purposes
of Treasury regulation Section 1.860G-2(b) of the Code).
ARTICLE XIII.
MISCELLANEOUS PROVISIONS
SECTION 13.1. BINDING NATURE OF AGREEMENT. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
SECTION 13.2. ENTIRE AGREEMENT. This Agreement contains the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or
written, of any nature whatsoever with respect to the subject matter hereof.
The express terms hereof control and supersede any course of performance or
usage of the trade inconsistent with any of the terms hereof.
SECTION 13.3. AMENDMENT.
(a) This Agreement may be amended from time to time by the parties
hereto, without notice to or the consent of any of the Holders, (i) to cure any
ambiguity, (ii) to correct or supplement any provision herein which may be
inconsistent with any other provisions herein, (iii) to amend any provision
hereof to the extent necessary or desirable to maintain the status of each
REMIC Pool as a REMIC for the purposes of federal income tax law (or comparable
provisions of state income tax law), (iv) to make any other provisions with
respect to matters or questions ensuing under or with respect to this Agreement
not inconsistent with the provisions hereof, or (v) to modify, add to or
eliminate the provisions of Article III relating to transfers of Residual
Certificates as provided under such Article; provided that (x) no such
amendment shall adversely affect the status of any REMIC Pool as a REMIC and
(y) no such amendment effected pursuant to clause (i), (ii) or (iv) of the
preceding sentence shall adversely affect in any material respect the interests
of any Holder not consenting thereto. Prior to entering into any amendment
without the consent of Holders pursuant to this paragraph, the Trustee may
require (at the expense of the party requesting such amendment, except that if
the Trustee requests such amendment, such amendment shall be at the expense of
the Depositor, if the Depositor consents) a Nondisqualification Opinion and an
Opinion of Counsel to the effect that such amendment is permitted under this
paragraph. The placement
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of an "original issue discount" legend on, or any change required to correct
any such legend previously placed on, a Certificate shall not be deemed an
amendment to this Agreement.
(b) This Agreement may also be amended from time to time by the
parties hereto with the consent of the Holders of Certificates entitled to not
less than 51% of the Voting Rights allocated to all Classes affected by such
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 Holders or the rights and obligations of any
party hereto; provided that no such amendment may (i) reduce in any manner the
amount of, or delay the timing of the distributions required to be made on any
Certificate without the consent of the Holder of such Certificate, (ii)
adversely affect in any material respect the interests of the Holders of any
Class of Certificates in a manner other than as described in the immediately
preceding clause (i), without the consent of all the Holders of Certificates of
such Class, or (iii) modify the provisions of this Section 13.3, without the
consent of all the Holders of Certificates. Prior to entering into any
amendment pursuant to this paragraph, the Trustee may require (at the expense
of the party requesting the amendment) a Nondisqualification Opinion and an
Opinion of Counsel to the effect that such amendment is permitted under this
paragraph.
(c) Promptly after the execution of any such amendment, the Trustee
shall furnish written notification of the substance of such amendment to each
Holder and the Rating Agencies.
(d) It shall not be necessary for the consent of Holders under this
Section 13.3 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Holders shall be in the affirmative and in writing and
shall be subject to such reasonable regulations as the Trustee may prescribe.
(e) Notwithstanding any other provision of this Agreement, for
purposes of the giving or withholding of consents pursuant to this Section
13.3, Certificates registered in the name of the Depositor, the Master
Servicer, the Special Servicer or any of their respective Affiliates shall be
entitled to the same Voting Rights with respect to matters described above as
they would if any other Person held such Certificates.
SECTION 13.4. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
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 (WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES
APPLIED IN THE STATE OF NEW YORK, OTHER THAN THE PRINCIPLES SET FORTH IN
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
SECTION 13.5. NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given when
received by (a) in the case of the Depositor, Morgan Stanley Capital I Inc.,
1585 Broadway, New York, New York 10036, Attention: John Kessler; (b) in the
case of the Trustee and the Fiscal Agent, at the Corporate Trust Office; (c) in
the case of Heller, Heller Financial Capital Funding, Inc., 500 West Monroe,
15th Floor, Chicago, Illinois 60661, Attention: Securitization Manager; (d) in
the case of the Master Servicer, GMAC Commercial Mortgage Corporation, 150
South Wacker Drive, 28th Floor Chicago, Illinois 60606, facsimile number (312)
845-8617, Attention: Master Servicing,; with a copy to GMAC Commercial Mortgage
Corporation, 650 Dresher Road, P.O. Box 1015, Horsham, Pa. 19044-8015,
Attention: General Counsel, facsimile number (215) 328-3620; (e) in the case of
the Special Servicer, GMAC Commercial Mortgage Corporation, 550
154
<PAGE>
California Street, San Francisco, California 94101, Attention: CMBS Portfolio
Manager, facsimile number (415) 391-2949 with a copy to GMAC Commercial
Mortgage Corporation, 650 Dresher Road, P.O. Box 1015, Horsham, Pa. 19044,
Attention: General Counsel, facsimile number (215) 328-3620 or as to each party
hereto such other address as may hereafter be furnished by such party to the
other parties hereto in writing. Any notice required or permitted to be given
to a Holder shall be mailed by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Holder receives such
notice.
SECTION 13.6. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the
Certificates or the rights of the Holders thereof.
SECTION 13.7. INDULGENCES; NO WAIVERS. Neither the failure nor any
delay on the part of a party to exercise any right, remedy, power or privilege
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or of any other right, remedy, power or privilege,
and no waiver of any right, remedy, power or privilege with respect to any
occurrence shall be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence. No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted
such waiver.
SECTION 13.8. HEADINGS NOT TO AFFECT INTERPRETATION. The headings
contained in this Agreement are for convenience of reference only, and shall
not be used in the interpretation hereof.
SECTION 13.9. BENEFITS OF AGREEMENT. Nothing in this Agreement or in
the Certificates, express or implied, shall give to any Person, other than the
parties to this Agreement and their successors hereunder and the Holders of the
Certificates, any benefit or any legal or equitable right, power, remedy or
claim under this Agreement.
SECTION 13.10. SPECIAL NOTICES TO THE RATING AGENCIES.
(a) The Trustee (or, in the case of the items in clauses (vi) and
(vii), the successor trustee) shall give prompt notice to the Rating Agencies
and, except in the case of clause (viii), the Operating Adviser (or if no
Operating Adviser has been elected, the Majority Certificateholder of the
Controlling Class), of the occurrence of any of the following events of which
it has notice or actual knowledge:
(i) any amendment to this Agreement pursuant to Section 13.3 hereof;
(ii) any repurchase or replacement of any Mortgage Loan by a Seller;
(iii) waiver of a due-on-sale or due-on-encumbrance clause as provided
in Section 8.6;
155
<PAGE>
(iv) any resignation or removal of the Master Servicer, the Special
Servicer or the Fiscal Agent pursuant to this Agreement;
(v) the appointment of any successor to the Master Servicer, the
Special Servicer or the Fiscal Agent pursuant to this Agreement;
(vi) the resignation or removal of the Trustee pursuant to Section 7.6;
(vii) the appointment of a successor trustee pursuant to Section 7.7;
(viii) the election, resignation or removal of an Operating Adviser
pursuant to Section 8.32;
(ix) termination of the Trust pursuant to Article X hereof;
(x) the final distribution to any Class of Certificateholders; and
(xi) an Event of Default.
(b) All notices to the Rating Agencies shall be in writing and sent by
first class mail, telecopy or overnight courier, as follows:
If to DCR, to:
Duff & Phelps Credit Rating Co.
55 East Monroe Street
Chicago, Illinois 60603
Attention: Structured Finance Commercial Real Estate Monitoring
Telecopy: (312) 263-2852
If to Fitch, to:
Fitch IBCA, Inc.
One State Street Plaza
New York, N.Y. 10004
Attention: Commercial Mortgage Surveillance
Telecopy: (212) 635-0295
If to any other Rating Agency, at such address as shall be provided in
writing to the Depositor by such Rating Agency.
(c) The Master Servicer and the Special Servicer shall each deliver to
the Trustee, and the Trustee shall deliver to the Rating Agencies and the
Depositor, copies of all reports prepared by the Master Servicer or Special
Servicer, as the case may be, pursuant to this Agreement and required to be
delivered to each other, the Trustee or the Certificateholders, together with
any other information as reasonably requested by the Rating Agencies and the
Depositor.
(d) Any notice or other document required to be delivered or mailed by
the Depositor, the Master Servicer, the Special Servicer or the Trustee shall
be given by such parties, respectively, on a best efforts basis and only as a
matter of courtesy and accommodation to the Rating Agencies, unless
156
<PAGE>
otherwise specifically required herein, and such parties, respectively, shall
have no liability for failure to deliver any such notice or document to the
Rating Agencies.
SECTION 13.11. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, and all of
which together shall constitute one and the same instrument.
SECTION 13.12. INTENTION OF PARTIES.
(a) It is the express intent of the parties hereto that the conveyance
of the Mortgage Loans and related property to the Trustee, for the benefit of
the Certificateholders, by the Depositor as provided in Section 2.1 be, and be
construed as, an absolute sale of the Mortgage Loans and related property. It
is, further, not the intention of the parties that such conveyance be deemed a
pledge of the Mortgage Loans and related property 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, such conveyance is held
not to be an absolute sale of the Mortgage Loans or any related property, or
the Mortgage Loans or any related property are for any other reason held to be
the property of the Depositor, then:
(i) This Agreement shall be deemed to be a security agreement.
(ii) The conveyance provided for in Section 2.1 shall be deemed to be
a grant by the Depositor to the Trustee, for the benefit of the
Certificateholders, of a security interest in all of the Depositor's right,
title, and interest, whether now owned or hereafter acquired, in and to:
(A) All accounts, contract rights, general intangibles, chattel paper,
instruments, documents, money, deposit accounts, certificates of deposit,
goods, letters of credit, advises of credit and uncertificated securities
consisting of, arising from or relating to any of the property described in
clauses (1)-(4) below: (1) the Mortgage Loans (including, without
limitation, the Mortgage Notes, the related Mortgages, the related security
agreements, and the related title, hazard and other insurance policies)
identified on the Mortgage Loan Schedule, including all Replacement
Mortgage Loans, together with all payments and other collections with
respect thereto after the Cut-off Date (other than Monthly Payments of
principal and interest due on or before the Cut-off Date) and the related
Mortgage Files; (2) the Distribution Account and the Collection Account,
including, without limitation, all funds and investments therein and all
income from the investment of funds therein (including any accrued discount
realized on liquidation of any investment purchased at a discount); (3) the
REMIC I Regular Interests, the REMIC II Regular Interests and the
Certificates; and (4) the Mortgage Loan Purchase Agreements;
(B) All accounts, contract rights, general intangibles, chattel paper,
instruments, documents, money, deposit accounts, certificates of deposit,
goods, letters of credit, advises of credit, uncertificated securities, and
other rights arising from or by virtue of the disposition of, or
collections with respect to, or insurance proceeds payable with respect to,
or claims against other Persons with respect to, all or any part of the
collateral described in clause (A) above (including any accrued discount
realized on liquidation of any investment purchased at a discount); and
(C) All cash and non-cash proceeds of the collateral described in
clauses (A) and (B) above.
157
<PAGE>
(iii) The possession by the Trustee of the Mortgage Notes, the
Mortgages and such other goods, letters of credit, advises of credit,
instruments, money, documents, chattel paper or certificated securities
shall be deemed to be "possession by the secured party," or possession by a
purchaser or a Person designated by him or her, for purposes of perfecting
the security interest pursuant to the Uniform Commercial Code (including,
without limitation, Sections 9-305, 8-313 or 8-321 thereof) as in force in
each relevant jurisdiction.
(iv) Notifications to Persons holding such property, and
acknowledgments, receipts or confirmations from Persons holding such
property, shall be deemed to be 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.
(b) The Depositor and, at the Depositor's direction, the Master
Servicer and the Trustee, at the Depositor's expense, shall, to the extent
consistent with this Agreement, take such reasonable actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the property described above, 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 the Agreement. The
Master Servicer shall file, at the direction and at the expense of the
Depositor, all filings necessary to maintain the effectiveness of any original
filings necessary under the Uniform Commercial Code as in effect in any
relevant jurisdiction to perfect the Trustee's security interest in such
property, including, without limitation, continuation statements. In connection
herewith, the Trustee shall have all of the rights and remedies of a secured
party and creditor under the Uniform Commercial Code as in force in the
relevant jurisdiction.
(c) The Depositor shall not take any action inconsistent with the
Trust's ownership of the Mortgage Loans.
SECTION 13.13. RECORDATION OF AGREEMENT. This Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere. Such recordation, if any, shall be
effected by the Master Servicer at the expense of the Trust payable out of the
Collection Account, but only upon direction of the Trustee accompanied by an
Opinion of Counsel (the cost of which shall be payable out of the Collection
Account) to the effect that such recordation materially and beneficially
affects the interests of the Certificateholders of the Trust.
158
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
day and year first above written.
MORGAN STANLEY CAPITAL I INC.,
as Depositor
By:
-------------------------------------
Name:
Title:
GMAC COMMERCIAL MORTGAGE CORPORATION
as Master Servicer
By:
-------------------------------------
Name:
Title:
GMAC COMMERCIAL MORTGAGE CORPORATION,
as Special Servicer
By:
-------------------------------------
Name:
Title:
LASALLE NATIONAL BANK,
as Trustee
By:
-------------------------------------
Name:
Title:
ABN AMRO BANK N.V., as Fiscal Agent
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
159
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of November, 1998, before me, a notary public in and
for said State, personally appeared ________________________, personally known
to me (or proved to me on the basis of satisfactory evidence) to be the person
who executed the within instrument as __________________________ on behalf of
MORGAN STANLEY CAPITAL I INC., and acknowledged to me that such corporation
executed the within instrument pursuant to its by-laws or a resolution of its
Board of Directors.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed my
official seal the day and year in this certificate first above written.
-------------------------------------
Notary Public
160
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of November, 1998, before me, a notary public in and
for said State, personally appeared _______________________________, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person who executed the within instrument as _____________________________ of
GMAC COMMERCIAL MORTGAGE CORPORATION and acknowledged to me that such
corporation executed the within instrument pursuant to its bylaws or a
resolution of its Board of Directors.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed my
official seal the day and year in this certificate first above written.
-------------------------------------
Notary Public
161
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of November, 1998, before me, a notary public in and
for said State, personally appeared _____________________________, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person who executed the within instrument as _______________________________ on
behalf of GMAC COMMERCIAL MORTGAGE CORPORATION, and acknowledged to me that
such corporation executed the within instrument pursuant to its by-laws or a
resolution of its Board of Directors.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed my
official seal the day and year in this certificate first above written.
-------------------------------------
Notary Public
162
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of November, 1998, before me, a notary public in and
for said State, personally appeared __________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person who executed the within instrument as
___________________________________ on behalf of LASALLE NATIONAL BANK, and
acknowledged to me that such nationally chartered bank executed the within
instrument pursuant to its by-laws or a resolution of its Board of Directors.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed my
official seal the day and year in this certificate first above written.
-------------------------------------
Notary Public
163
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of November, 1998, before me, a notary public in and
for said State, personally appeared _______________________________, personally
known to me (or proved to me on the basis of satisfactory evidence) to be one
of the persons who executed the within instrument as
_________________________________ on behalf of ABN AMRO BANK N.V., and
acknowledged to me that such banking corporation executed the within instrument
pursuant to its by-laws or a resolution of its Board of Directors.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed my
official seal the day and year in this certificate first above written.
-------------------------------------
Notary Public
164
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of November, 1998, before me, a notary public in and
for said State, personally appeared ______________________________, personally
known to me (or proved to me on the basis of satisfactory evidence) to be one
of the persons who executed the within instrument as
____________________________ on behalf of ABN AMRO BANK N.V., and acknowledged
to me that such banking corporation executed the within instrument pursuant to
its by-laws or a resolution of its Board of Directors.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed my
official seal the day and year in this certificate first above written.
-------------------------------------
Notary Public
165
<PAGE>
- -------------------------------------------------------------------------------
MORGAN STANLEY CAPITAL I INC.,
as Depositor,
and
GMAC COMMERCIAL MORTGAGE CORPORATION,
as Master Servicer,
and
GMAC COMMERCIAL MORTGAGE CORPORATION,
as Special Servicer,
and
LASALLE NATIONAL BANK,
as Trustee,
and
ABN AMRO BANK N.V.,
as Fiscal Agent,
-------------------
EXHIBITS AND SCHEDULES TO
POOLING AND SERVICING AGREEMENT
Dated as of November 1, 1998
-------------------
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1998-HF2
- -------------------------------------------------------------------------------
<PAGE>
EXHIBITS
<TABLE>
<CAPTION>
<S> <C>
Exhibit A-1 Form of Class A-1 Certificate.................................................................A-1
Exhibit A-2 Form of Class A-2 Certificate.................................................................A-2
Exhibit A-3 Form of Class B Certificate...................................................................A-3
Exhibit A-4 Form of Class C Certificate...................................................................A-4
Exhibit A-5 Form of Class D Certificate...................................................................A-5
Exhibit A-6 Form of Class E Certificate...................................................................A-6
Exhibit A-7 Form of Class F Certificate...................................................................A-7
Exhibit A-8 Form of Class G Certificate...................................................................A-8
Exhibit A-9 Form of Class H Certificate...................................................................A-9
Exhibit A-10 Form of Class J Certificate..................................................................A-10
Exhibit A-11 Form of Class K Certificate..................................................................A-11
Exhibit A-12 Form of Class L Certificate..................................................................A-12
Exhibit A-13 Form of Class M Certificate..................................................................A-13
Exhibit A-14 Form of Class N Certificate..................................................................A-14
Exhibit A-15 Form of Class R-I Certificate................................................................A-15
Exhibit A-16 Form of Class R-II Certificate...............................................................A-16
Exhibit A-17 Form of Class R-III Certificate..............................................................A-17
Exhibit A-18 Form of Class X Certificate..................................................................A-18
Exhibit B-1 Form of Initial Certification of Trustee......................................................B-1
Exhibit B-2 Form of Final Certification of Trustee........................................................B-2
Exhibit C Form of Request for Release.....................................................................C
Exhibit D-1 Transfers of Definitive Privately Offered Certificates.......................................D1-1
Exhibit D-2A Form I of Transferee Certificate For Transfers of Definitive Privately Offered
Certificates.................................................................................D2-1
Annex 1 Qualified Institutional Buyer Status Under SEC Rule 144A.....................................D2-3
Annex 2 Qualified Institutional Buyer Status Under SEC Rule 144A.....................................D2-6
Exhibit D-2B Form II of Transferee Certificate for Transfers of Definitive Privately Offered
Certificates.................................................................................D2-8
Exhibit D-3A Form I of Transferee Certificate for Transfers of Interests in Book-Entry Privately
Offered Certificates.........................................................................D3-1
Exhibit D-3B Form II of Transferee Certificate for Transfers of Interests in Book-Entry Privately
Offered Certificates.........................................................................D3-3
Annex 1 Qualified Institutional Buyer Status Under SEC Rule 144A.....................................D3-5
Annex 2 Qualified Institutional Buyer Status Under SEC Rule 144A.....................................D3-8
Exhibit E Form of Transferor Certificate for Transfers of REMIC Residual Certificate......................E
Exhibit F Form of Transfer Affidavit and Agreement for Transfers of REMIC Residual Certificates...........F
Exhibit G-1 Form of Monthly Certificateholder Report......................................................G-1
Exhibit G-2 Form of Specially Serviced Asset Report.......................................................G-2
Exhibit H-1 Comparative Financial Status Report...........................................................H-1
Exhibit H-2 Delinquent Loan Status Report.................................................................H-2
Exhibit H-3 Historical Loan Modification Report...........................................................H-3
Exhibit H-4 Historical Loss Estimate Report...............................................................H-4
Exhibit H-5 REO Status Report.............................................................................H-5
Exhibit H-6 Watch List ...................................................................................H-6
Exhibit H-7 Operating Statement Analysis..................................................................H-7
Exhibit H-8 NOI Adjustment Worksheet .....................................................................H-8
Exhibit H-9 CSSA Reports .................................................................................H-9
Exhibit H-10 CSSA Reports ................................................................................H-10
<PAGE>
Exhibit H-11 CSSA Reports ................................................................................H-11
SCHEDULES
Schedule I MSMC Loan Schedule..............................................................................I
Schedule II Heller Loan Schedule...........................................................................II
</TABLE>
<PAGE>
EXHIBIT A-1
[FORM OF CLASS A-1 CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, ANY UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER SERVICER,
THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL NOT BE
INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
NOTWITHSTANDING THE ABOVE, IF THE TRANSFEREE OF THIS CERTIFICATE IS AN EMPLOYEE
BENEFIT PLAN SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF
ANY SUCH PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE OR HOLD THIS
CERTIFICATE, SUCH PLAN OR SUCH PERSON MUST BE AN "ACCREDITED INVESTOR" WITHIN
THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT").
THE PORTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THE CERTIFICATES EVIDENCED
BY THIS CERTIFICATE WILL BE DECREASED BY THE PORTION OF PRINCIPAL
DISTRIBUTIONS, REALIZED LOSSES AND CERTAIN EXPENSE LOSSES ON THE CERTIFICATES
ALLOCABLE TO THIS CLASS A-1 CERTIFICATE. ACCORDINGLY, THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE LESS THAN THAT SET FORTH BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE PRINCIPAL
BALANCE BY INQUIRY OF THE TRUSTEE.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
THIS CLASS A-1 CERTIFICATE WAS ISSUED ON NOVEMBER 12, 1998 AND IS NOT TREATED
AS HAVING BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME
TAX PURPOSES. THE ISSUE PRICE OF THIS CERTIFICATE IS __________% OF THE
ORIGINAL PRINCIPAL AMOUNT OF THIS CERTIFICATE. HOWEVER, IT IS POSSIBLE THAT
APPLICABLE LAW AND TREASURY REGULATIONS COULD BE INTERPRETED TO PROVIDE THAT
ALL INTEREST PAYMENT ON THIS CERTIFICATE ARE TO BE TREATED AS PART OF THE
STATED REDEMPTION PRICE AT MATURITY OF THE CERTIFICATE (I.E., PRINCIPAL) AND
WOULD NOT CONSTITUTE QUALIFIED STATED INTEREST, THEREBY CAUSING THIS
CERTIFICATE TO HAVE OID. IN SUCH CASE, THE FOLLOWING INFORMATION WOULD BE
APPLICABLE: (I) THE AMOUNT OF OID AS A PERCENTAGE OF THE ORIGINAL PRINCIPAL
AMOUNT OF THIS CERTIFICATE WOULD BE
A-1-1
<PAGE>
APPROXIMATELY _______, (II) THE YIELD TO MATURITY OF THIS CERTIFICATE FOR
PURPOSES OF COMPUTING OID WOULD BE APPROXIMATELY _____ PER ANNUM, COMPOUNDED
MONTHLY, AND (III) THE TOTAL AMOUNT OF OID ALLOCABLE TO THE INITIAL ACCRUAL
PERIOD (NOVEMBER 12, 1998 TO DECEMBER 15, 1998) FOR PURPOSES OF COMPUTING OID
ON THIS CERTIFICATE AS A PERCENTAGE OF THE ORIGINAL AMOUNT OF THIS CERTIFICATE
WOULD BE APPROXIMATELY _____%. THE METHOD USED TO CALCULATE THE YIELD TO
MATURITY AND THE AMOUNT OF OID ALLOCABLE TO THE INITIAL ACCRUAL PERIOD IS THE
EXACT METHOD. THE ACTUAL YIELD TO MATURITY AND OID ON THIS CERTIFICATE MAY
DIFFER FROM THE PROJECTED AMOUNTS. THE PREPAYMENT ASSUMPTION USED IN
CALCULATING THE YIELD TO MATURITY IS 0% CPR AND THE PAYMENT OF THE BALLOON
PAYMENT ON THE HYPERAMORTIZATION LOANS. NO REPRESENTATION IS MADE THAT THE
MORTGAGE LOANS WILL PREPAY AT THE ASSUMED RATE OR ANY OTHER RATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
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 HEREON 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.
A-1-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
INITIAL PASS-THROUGH RATE: 6.01% CERTIFICATE PRINCIPAL BALANCE OF
THIS CLASS A-1 CERTIFICATE AS OF
THE CLOSING DATE $203,500,000
DATE OF POOLING & SERVICING MASTER SERVICER: GMAC
AGREEMENT: AS OF NOVEMBER 1, 1998 COMMERCIAL MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 INITIAL SPECIAL SERVICER:
GMAC COMMERCIAL MORTGAGE
CORPORATION
CLOSING DATE: NOVEMBER 12, 1998 TRUSTEE: LASALLE NATIONAL BANK
FIRST DISTRIBUTION DATE: FISCAL AGENT: ABN AMRO BANK N.V.
DECEMBER 15, 1998
AGGREGATE CERTIFICATE PRINCIPAL CUSIP NO.
BALANCE OF THE CLASS A-1
CERTIFICATE AS OF THE CLOSING DATE: NO. 1
$203,500,000
CLASS A-1 CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of
a pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class A-1 Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of
the pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be
held in the Collection Account, the Distribution Account, the Insurance
Policies and any REO Properties. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Pooling and
Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing an interest in the Class of
Certificates specified on the face hereof equal to the quotient expressed as a
percentage obtained by dividing the Certificate Principal Balance of this
Certificate specified on the face hereof by the aggregate initial Certificate
Principal Balance of the Class A-1 Certificates. The Certificates are
designated as the Morgan Stanley Capital I Inc., Commercial Mortgage
Pass-Through Certificates, Series 1998-HF2 and are issued in sixteen Classes as
A-1-3
<PAGE>
specifically set forth in the Pooling and Servicing Agreement. The Certificates
will evidence in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and
Servicing Agreement and reference is made to the Pooling and Servicing
Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby and the rights, duties and
obligations of the Trustee. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which the
Certificateholder is bound. In the case of any conflict between terms specified
in this Certificate and terms specified in the Pooling and Servicing Agreement,
the terms of the Pooling and Servicing Agreement shall govern.
Distributions of principal of and interest on this Certificate will be
made out of the Available Distribution Amount, to the extent and subject to the
limitations set forth in the Pooling and Servicing Agreement, on the 15th day
of each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (a "Distribution Date") commencing on the first Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"). All sums
distributable on this Certificate are payable in the coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
Interest on this Certificate will accrue (computed as if each year
consisted of 360 days and each month consisted of 30 days) during the Interest
Accrual Period relating to such Distribution Date at a Pass-Through Rate
calculated as specified in the Pooling and Servicing Agreement on the
Certificate Principal Balance of this Certificate immediately prior to each
Distribution Date. Principal and interest allocated to this Certificate on any
Distribution Date will be in an amount due to this Certificate's pro rata share
of the amount to be distributed on the Certificates of this Class as of such
Distribution Date, with a final distribution to be made upon retirement of this
Certificate as set forth in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed 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.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses
and interest shortfalls on the Mortgage Loans allocated to any Class of
Certificates will be allocated pro rata among the outstanding Certificates of
such Class.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth in the Pooling and Servicing Agreement. As provided in
the Pooling and Servicing Agreement, withdrawals from the Collection Account
shall be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of certain expenses
incurred with respect to the servicing of the Mortgage Loans and administration
of the Trust.
All distributions under the Pooling and Servicing Agreement to a
nominee of The Depository Trust Company ("DTC") will be made by or on behalf of
the Trustee by wire transfer in immediately available funds to an account
specified in the request of such Certificateholder. All distributions under the
Pooling and Servicing Agreement to Certificateholders will be made by wire
transfer in immediately available funds to the account specified by the
Certificateholder, at a bank or other entity having appropriate facilities
therefor, if such Certificateholder will have provided the Trustee with wiring
instructions no more than five business days after the related Record Date, or
otherwise by check mailed to such Certificateholder. Notwithstanding the above,
the
A-1-4
<PAGE>
final distribution on any Certificate will be made only upon presentation
and surrender of such Certificate at the location that will be specified in a
notice of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of the aggregate Certificate Principal Balance of the Certificates
then outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon the Certificate.
The Pooling and Servicing Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, the transfer of this Certificate is
registrable in the Certificate Register upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Certificate Registrar duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations will be issued to the designated transferee or
transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class
A-1 and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations
of $100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates
registered in the name of Cede & Co., as nominee of the DTC. No Certificate
Owner will be entitled to receive a Definitive Certificate representing such
interest, except under the limited circumstances described in the Pooling and
Servicing Agreement. The Residual Certificates will be issued in fully
registered, certificated form in minimum percentage interests of 10% and in
multiples of 10% in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trustee, the Fiscal
Agent, the Master Servicer, the Special Servicer, the Certificate Registrar nor
any such agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby
(other than the obligation of the Trustee to make payments to the
Certificateholders as set forth in Section 10.2 of the Pooling and Servicing
Agreement and other than the obligations in the nature of information or tax
reporting) shall terminate on the earliest of (i) the later of (A) the final
payment or other liquidation of the last Mortgage Loan remaining in the Trust
and (B) the disposition of all REO Property or (ii) the sale of the property
held by the Trust in accordance with Section 10.1(b) of the Pooling and
Servicing Agreement; provided that in no event shall the Trust continue beyond
the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James, living on the date hereof. The parties
A-1-5
<PAGE>
designated in the Pooling and Servicing Agreement may exercise their option to
purchase the Mortgage Loans and any other property remaining in the Trust and
cause the termination of the Trust in accordance with the requirements set
forth in the Pooling and Servicing Agreement. Upon termination of the Trust and
payment of the Certificates and of all administrative expenses associated with
the Trust, any remaining assets of the Trust shall be distributed to the
holders of the Class R-I Certificates.
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-1-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:
-----------------------------
AUTHORIZED OFFICER
Dated:
A-1-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS A-1 CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
BY:
----------------------------
AUTHORIZED SIGNATORY
A-1-8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT . . . .Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.......................
common (State)
Additional abbreviations may also be used though not in the above
list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
- -------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------
- ------------------------------
-------------------------------------------------
- -------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- -------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- -------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the
within-named Trust, with full power of substitution in the premises.
Dated:
------------------------- -------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of this Certificate in every
particular without alteration or
enlargement or any change whatever.
- -------------------------------
SIGNATURE GUARANTEED The
signature must be
guaranteed by a
commercial bank or trust
company or by a member
firm of the New York
Stock Exchange or another
national securities
exchange. Notarized or
witnessed signatures are
not acceptable.
A-1-9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ____________ for the account of
_________________________________________ account number _____________________
or, if mailed by check, to __________________________. Statements should be
mailed to ______________________. This information is provided by assignee
named above, or ____________________________, as its agent.
A-1-10
<PAGE>
EXHIBIT A-2
[FORM OF CLASS A-2 CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
NOTWITHSTANDING THE ABOVE, IF THE TRANSFEREE OF THIS CERTIFICATE IS AN EMPLOYEE
BENEFIT PLAN SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF
ANY SUCH PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE OR HOLD THIS
CERTIFICATE, SUCH PLAN OR SUCH PERSON MUST BE AN "ACCREDITED INVESTOR" WITHIN
THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT").
THE PORTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THE CERTIFICATES EVIDENCED
BY THIS CERTIFICATE WILL BE DECREASED BY THE PORTION OF PRINCIPAL
DISTRIBUTIONS, REALIZED LOSSES AND CERTAIN EXPENSE LOSSES ON THE CERTIFICATES
ALLOCABLE TO THIS CLASS A-2 CERTIFICATE. ACCORDINGLY, THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE LESS THAN THAT SET FORTH BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE PRINCIPAL
BALANCE BY INQUIRY OF THE TRUSTEE.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
THIS CLASS A-2 CERTIFICATE WAS ISSUED ON NOVEMBER 12, 1998 AND IS NOT TREATED
AS HAVING BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME
TAX PURPOSES. THE ISSUE PRICE OF THIS CERTIFICATE IS __________% OF THE
ORIGINAL PRINCIPAL AMOUNT OF THIS CERTIFICATE. HOWEVER, IT IS POSSIBLE THAT
APPLICABLE LAW AND TREASURY REGULATIONS COULD BE INTERPRETED TO PROVIDE THAT
ALL INTEREST PAYMENT ON THIS CERTIFICATE ARE TO BE TREATED AS PART OF THE
STATED REDEMPTION PRICE AT MATURITY OF THE CERTIFICATE (I.E., PRINCIPAL) AND
WOULD NOT CONSTITUTE QUALIFIED STATED INTEREST, THEREBY CAUSING THIS
CERTIFICATE TO HAVE OID. IN SUCH CASE, THE FOLLOWING INFORMATION WOULD BE
APPLICABLE: (I) THE AMOUNT OF OID AS A PERCENTAGE OF THE ORIGINAL PRINCIPAL
AMOUNT OF THIS CERTIFICATE WOULD BE APPROXIMATELY _______, (II) THE YIELD TO
MATURITY OF THIS CERTIFICATE FOR PURPOSES OF COMPUTING OID WOULD BE
APPROXIMATELY _____ PER ANNUM, COMPOUNDED MONTHLY, AND (III) THE TOTAL AMOUNT
OF OID ALLOCABLE TO THE INITIAL ACCRUAL PERIOD (NOVEMBER 12, 1998 TO DECEMBER
15, 1998) FOR PURPOSES OF COMPUTING OID ON THIS CERTIFICATE AS A PERCENTAGE OF
THE ORIGINAL AMOUNT OF THIS CERTIFICATE WOULD BE APPROXIMATELY _____%. THE
METHOD USED TO CALCULATE THE YIELD TO MATURITY AND THE AMOUNT OF OID ALLOCABLE
TO THE INITIAL ACCRUAL PERIOD IS THE EXACT METHOD.
A-2-1
<PAGE>
THE ACTUAL YIELD TO MATURITY AND OID ON THIS CERTIFICATE MAY DIFFER FROM THE
PROJECTED AMOUNTS. THE PREPAYMENT ASSUMPTION USED IN CALCULATING THE YIELD TO
MATURITY IS 0% CPR AND THE PAYMENT OF THE BALLOON PAYMENT ON THE
HYPERAMORTIZATION LOANS. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT THE ASSUMED RATE OR ANY OTHER RATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
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 HEREON 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.
A-2-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
INITIAL PASS-THROUGH RATE: 6.48% CERTIFICATE PRINCIPAL BALANCE OF
THIS CLASS A-2 CERTIFICATE AS OF
THE CLOSING DATE $547,759,000
DATE OF POOLING & SERVICING AGREEMENT: MASTER SERVICER: GMAC COMMERCIAL
AS OF MARCH 1, 1998 MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER1, 1998 INITIAL SPECIAL SERVICER: GMAC
COMMERCIAL MORTGAGE CORPORATION
CLOSING DATE: NOVEMBER 12, 1998 TRUSTEE: LASALLE NATIONAL BANK
FIRST DISTRIBUTION DATE: FISCAL AGENT: ABN AMRO BANK N.V.
DECEMBER 15, 1998
AGGREGATE CERTIFICATE PRINCIPAL CUSIP NO.
BALANCE OF THE CLASS A-2
CERTIFICATE AS OF THE CLOSING DATE: NO. 1
$547,759,000
CLASS A-2 CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of
a pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class A-2 Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of
the pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be
held in the Collection Account, the Distribution Account, the Insurance
Policies and any REO Properties. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Pooling and
Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing an interest in the Class of
Certificates specified on the face hereof equal to the quotient expressed as a
percentage obtained by dividing the Certificate Principal Balance of this
Certificate specified on the face hereof by the aggregate initial Certificate
Principal Balance of the Class A-2 Certificates. The Certificates are
designated as the Morgan Stanley Capital I Inc., Commercial Mortgage
Pass-Through Certificates, Series 1998-HF2 and are issued in sixteen Classes as
specifically set forth in the Pooling and Servicing Agreement. The Certificates
will evidence in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and
Servicing Agreement and reference is made to the Pooling and Servicing
Agreement for information with respect to the interests, rights, benefits,
A-2-3
<PAGE>
obligations, proceeds, and duties evidenced hereby and the rights, duties and
obligations of the Trustee. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which the
Certificateholder is bound. In the case of any conflict between terms specified
in this Certificate and terms specified in the Pooling and Servicing Agreement,
the terms of the Pooling and Servicing Agreement shall govern.
Distributions of principal of and interest on this Certificate will be
made out of the Available Distribution Amount, to the extent and subject to the
limitations set forth in the Pooling and Servicing Agreement, on the 15th day
of each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (a "Distribution Date") commencing on the first Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"). All sums
distributable on this Certificate are payable in the coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
Interest on this Certificate will accrue (computed as if each year
consisted of 360 days and each month consisted of 30 days) during the Interest
Accrual Period relating to such Distribution Date at a Pass-Through Rate
calculated as specified in the Pooling and Servicing Agreement on the
Certificate Principal Balance of this Certificate immediately prior to each
Distribution Date. Principal and interest allocated to this Certificate on any
Distribution Date will be in an amount due to this Certificate's pro rata share
of the amount to be distributed on the Certificates of this Class as of such
Distribution Date, with a final distribution to be made upon retirement of this
Certificate as set forth in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed 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.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses
and interest shortfalls on the Mortgage Loans allocated to any Class of
Certificates will be allocated pro rata among the outstanding Certificates of
such Class.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth in the Pooling and Servicing Agreement. As provided in
the Pooling and Servicing Agreement, withdrawals from the Collection Account
shall be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of certain expenses
incurred with respect to the servicing of the Mortgage Loans and administration
of the Trust.
All distributions under the Pooling and Servicing Agreement to a
nominee of The Depository Trust Company ("DTC") will be made by or on behalf of
the Trustee by wire transfer in immediately available funds to an account
specified in the request of such Certificateholder. All distributions under the
Pooling and Servicing Agreement to Certificateholders will be made by wire
transfer in immediately available funds to the account specified by the
Certificateholder, at a bank or other entity having appropriate facilities
therefor, if such Certificateholder will have provided the Trustee with wiring
instructions no more than five business days after the related Record Date, or
otherwise by check mailed to such Certificateholder. Notwithstanding the above,
the final distribution on any Certificate will be made only upon presentation
and surrender of such Certificate at the location that will be specified in a
notice of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of the aggregate Certificate Principal Balance of the Certificates
then outstanding, as specified in the Pooling and
A-2-4
<PAGE>
Servicing Agreement. Any such consent by the Holder of this Certificate shall
be conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon the Certificate. The Pooling and Servicing Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, the transfer of this Certificate is
registrable in the Certificate Register upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Certificate Registrar duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations will be issued to the designated transferee or
transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class
A-1 and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations
of $100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates
registered in the name of Cede & Co., as nominee of the DTC. No Certificate
Owner will be entitled to receive a Definitive Certificate representing such
interest, except under the limited circumstances described in the Pooling and
Servicing Agreement. The Residual Certificates will be issued in fully
registered, certificated form in minimum percentage interests of 10% and in
multiples of 10% in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trustee, the Fiscal
Agent, the Master Servicer, the Special Servicer, the Certificate Registrar nor
any such agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby
(other than the obligation of the Trustee to make payments to the
Certificateholders as set forth in Section 10.2 of the Pooling and Servicing
Agreement and other than the obligations in the nature of information or tax
reporting) shall terminate on the earliest of (i) the later of (A) the final
payment or other liquidation of the last Mortgage Loan remaining in the Trust
and (B) the disposition of all REO Property or (ii) the sale of the property
held by the Trust in accordance with Section 10.1(b) of the Pooling and
Servicing Agreement; provided that in no event shall the Trust continue beyond
the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James, living on the date hereof. The parties designated in
the Pooling and Servicing Agreement may exercise their option to purchase the
Mortgage Loans and any other property remaining in the Trust and cause the
termination of the Trust in accordance with the requirements set forth in the
Pooling and Servicing Agreement. Upon termination of the Trust and payment of
the Certificates and of all administrative expenses associated with the Trust,
any remaining assets of the Trust shall be distributed to the holders of the
Class R-I Certificates.
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
A-2-5
<PAGE>
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-2-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:
--------------------------------------
AUTHORIZED OFFICER
Dated:
A-2-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS A-2 CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
BY:
--------------------------------------
AUTHORIZED SIGNATORY
A-2-8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT . . . .Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.......................
common (State)
Additional abbreviations may also be used though not in the above
list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
- -------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- -------------------------------------
- -------------------------------------
------------------------------------------
- -------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- -------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- -------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the
within-named Trust, with full power of substitution in the premises.
Dated:
-------------------------- -------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of this Certificate in every
particular without alteration or
enlargement or any change whatever.
- --------------------------------
SIGNATURE GUARANTEED The
signature must be
guaranteed by a
commercial bank or trust
company or by a member
firm of the New York
Stock Exchange or another
national securities
exchange. Notarized or
witnessed signatures are
not acceptable.
A-2-9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ____________ for the account of
_________________________________________ account number _____________________
or, if mailed by check, to __________________________. Statements should be
mailed to ______________________. This information is provided by assignee
named above, or ____________________________, as its agent.
A-2-10
<PAGE>
EXHIBIT A-3
[FORM OF CLASS B CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
NOTWITHSTANDING THE ABOVE, THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, EXCEPT FOR
AN INSURANCE COMPANY INVESTING SOLELY ASSETS OF ITS GENERAL ACCOUNT, WHICH
SHALL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT THE PURCHASE AND
OWNERSHIP OF THIS CERTIFICATE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER ERISA AND SECTION 4975 OF THE CODE.
THIS CLASS B CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN OTHER
CLASSES OF CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THE PORTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THE CERTIFICATES EVIDENCED
BY THIS CERTIFICATE WILL BE DECREASED BY THE PORTION OF PRINCIPAL
DISTRIBUTIONS, REALIZED LOSSES AND CERTAIN EXPENSE LOSSES ON THE CERTIFICATES
ALLOCABLE TO THIS CLASS B CERTIFICATE. ACCORDINGLY, THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE LESS THAN THAT SET FORTH BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE PRINCIPAL
BALANCE BY INQUIRY OF THE TRUSTEE.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
THIS CLASS B CERTIFICATE WAS ISSUED ON NOVEMBER 12, 1998 AND IS NOT TREATED AS
HAVING BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX
PURPOSES. THE ISSUE PRICE OF THIS CERTIFICATE IS __________% OF THE ORIGINAL
PRINCIPAL AMOUNT OF THIS CERTIFICATE. HOWEVER, IT IS POSSIBLE THAT APPLICABLE
LAW AND TREASURY REGULATIONS COULD BE INTERPRETED TO PROVIDE THAT ALL INTEREST
PAYMENT ON THIS CERTIFICATE ARE TO BE TREATED AS PART OF THE STATED REDEMPTION
PRICE AT MATURITY OF THE CERTIFICATE (I.E., PRINCIPAL) AND WOULD NOT CONSTITUTE
QUALIFIED STATED INTEREST, THEREBY CAUSING THIS CERTIFICATE TO HAVE OID. IN
SUCH CASE, THE FOLLOWING INFORMATION WOULD BE APPLICABLE: (I) THE AMOUNT OF OID
AS A PERCENTAGE OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS CERTIFICATE WOULD BE
APPROXIMATELY _______, (II) THE YIELD TO MATURITY OF THIS CERTIFICATE FOR
PURPOSES OF COMPUTING OID WOULD BE APPROXIMATELY _____ PER ANNUM, COMPOUNDED
MONTHLY, AND (III) THE TOTAL AMOUNT OF OID ALLOCABLE TO THE INITIAL ACCRUAL
PERIOD (NOVEMBER 12, 1998 TO DECEMBER 15, 1998) FOR PURPOSES
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<PAGE>
OF COMPUTING OID ON THIS CERTIFICATE AS A PERCENTAGE OF THE ORIGINAL AMOUNT OF
THIS CERTIFICATE WOULD BE APPROXIMATELY _____%. THE METHOD USED TO CALCULATE
THE YIELD TO MATURITY AND THE AMOUNT OF OID ALLOCABLE TO THE INITIAL ACCRUAL
PERIOD IS THE EXACT METHOD. THE ACTUAL YIELD TO MATURITY AND OID ON THIS
CERTIFICATE MAY DIFFER FROM THE PROJECTED AMOUNTS. THE PREPAYMENT ASSUMPTION
USED IN CALCULATING THE YIELD TO MATURITY IS 0% CPR AND THE PAYMENT OF THE
BALLOON PAYMENT ON THE HYPERAMORTIZATION LOANS. NO REPRESENTATION IS MADE THAT
THE MORTGAGE LOANS WILL PREPAY AT THE ASSUMED RATE OR ANY OTHER RATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
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 HEREON 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.
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<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
INITIAL PASS-THROUGH RATE: 6.71% CERTIFICATE PRINCIPAL BALANCE OF
THIS CLASS B CERTIFICATE AS OF THE
CLOSING DATE $52,906,000
DATE OF POOLING & SERVICING AGREEMENT: MASTER SERVICER: GMAC COMMERCIAL
AS OF NOVEMBER 1, 1998 MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 INITIAL SPECIAL SERVICER: GMAC
COMMERCIAL MORTGAGE CORPORATION
CLOSING DATE: NOVEMBER 12, 1998 TRUSTEE: LASALLE NATIONAL BANK
FIRST DISTRIBUTION DATE: FISCAL AGENT: ABN AMRO BANK N.V.
DECEMBER 15, 1998
AGGREGATE CERTIFICATE PRINCIPAL CUSIP NO.
BALANCE OF THE CLASS B
CERTIFICATE AS OF THE CLOSING DATE: NO. 1
$52,906,000
CLASS B CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of
a pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class B Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of
the pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be
held in the Collection Account, the Distribution Account, the Insurance
Policies and any REO Properties. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Pooling and
Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing an interest in the Class of
Certificates specified on the face hereof equal to the quotient expressed as a
percentage obtained by dividing the Certificate Principal Balance of this
Certificate specified on the face hereof by the aggregate initial Certificate
Principal Balance of the Class B Certificates. The Certificates are designated
as the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2 and are issued in sixteen Classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will
evidence in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and
Servicing Agreement and reference is made to the Pooling and Servicing
Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby and the rights, duties and
obligations of the Trustee. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Pooling and Servicing
A-3-3
<PAGE>
Agreement, to which Pooling and Servicing Agreement, as amended from time to
time, the Certificateholder by virtue of the acceptance hereof assents and by
which the Certificateholder is bound. In the case of any conflict between terms
specified in this Certificate and terms specified in the Pooling and Servicing
Agreement, the terms of the Pooling and Servicing Agreement shall govern.
Distributions of principal of and interest on this Certificate will be
made out of the Available Distribution Amount, to the extent and subject to the
limitations set forth in the Pooling and Servicing Agreement, on the 15th day
of each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (a "Distribution Date") commencing on the first Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"). All sums
distributable on this Certificate are payable in the coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
Interest on this Certificate will accrue (computed as if each year
consisted of 360 days and each month consisted of 30 days) during the Interest
Accrual Period relating to such Distribution Date at a Pass-Through Rate
calculated as specified in the Pooling and Servicing Agreement on the
Certificate Principal Balance of this Certificate immediately prior to each
Distribution Date. Principal and interest allocated to this Certificate on any
Distribution Date will be in an amount due to this Certificate's pro rata share
of the amount to be distributed on the Certificates of this Class as of such
Distribution Date, with a final distribution to be made upon retirement of this
Certificate as set forth in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed 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.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses
and interest shortfalls on the Mortgage Loans allocated to any Class of
Certificates will be allocated pro rata among the outstanding Certificates of
such Class.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth in the Pooling and Servicing Agreement. As provided in
the Pooling and Servicing Agreement, withdrawals from the Collection Account
shall be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of certain expenses
incurred with respect to the servicing of the Mortgage Loans and administration
of the Trust.
All distributions under the Pooling and Servicing Agreement to a
nominee of The Depository Trust Company ("DTC") will be made by or on behalf of
the Trustee by wire transfer in immediately available funds to an account
specified in the request of such Certificateholder. All distributions under the
Pooling and Servicing Agreement to Certificateholders will be made by wire
transfer in immediately available funds to the account specified by the
Certificateholder, at a bank or other entity having appropriate facilities
therefor, if such Certificateholder will have provided the Trustee with wiring
instructions no more than five business days after the related Record Date, or
otherwise by check mailed to such Certificateholder. Notwithstanding the above,
the final distribution on any Certificate will be made only upon presentation
and surrender of such Certificate at the location that will be specified in a
notice of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of the aggregate Certificate Principal Balance of the Certificates
then outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in
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<PAGE>
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon the Certificate. The Pooling and Servicing Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, the transfer of this Certificate is
registrable in the Certificate Register upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Certificate Registrar duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations will be issued to the designated transferee or
transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class
A-1 and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations
of $100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates
registered in the name of Cede & Co., as nominee of the DTC. No Certificate
Owner will be entitled to receive a Definitive Certificate representing such
interest, except under the limited circumstances described in the Pooling and
Servicing Agreement. The Residual Certificates will be issued in fully
registered, certificated form in minimum percentage interests of 10% and in
multiples of 10% in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trustee, the Fiscal
Agent, the Master Servicer, the Special Servicer, the Certificate Registrar nor
any such agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby
(other than the obligation of the Trustee to make payments to the
Certificateholders as set forth in Section 10.2 of the Pooling and Servicing
Agreement and other than the obligations in the nature of information or tax
reporting) shall terminate on the earliest of (i) the later of (A) the final
payment or other liquidation of the last Mortgage Loan remaining in the Trust
and (B) the disposition of all REO Property or (ii) the sale of the property
held by the Trust in accordance with Section 10.1(b) of the Pooling and
Servicing Agreement; provided that in no event shall the Trust continue beyond
the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James, living on the date hereof. The parties designated in
the Pooling and Servicing Agreement may exercise their option to purchase the
Mortgage Loans and any other property remaining in the Trust and cause the
termination of the Trust in accordance with the requirements set forth in the
Pooling and Servicing Agreement. Upon termination of the Trust and payment of
the Certificates and of all administrative expenses associated with the Trust,
any remaining assets of the Trust shall be distributed to the holders of the
Class R-I Certificates.
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
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<PAGE>
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-3-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:
----------------------------------
AUTHORIZED OFFICER
Dated:
A-3-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS B CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
BY:
---------------------------------
AUTHORIZED SIGNATORY
A-3-8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT . . . .Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.......................
common (State)
Additional abbreviations may also be used though not in the above
list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
- -------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- -------------------------------
- -------------------------------
------------------------------------------------
- -------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- -------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- -------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the
within-named Trust, with full power of substitution in the premises.
Dated:
------------------------ -------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of this Certificate in every
particular without alteration or
enlargement or any change whatever.
- ------------------------------
SIGNATURE GUARANTEED The
signature must be
guaranteed by a
commercial bank or trust
company or by a member
firm of the New York
Stock Exchange or another
national securities
exchange. Notarized or
witnessed signatures are
not acceptable.
A-3-9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ____________ for the account of
_________________________________________ account number _____________________
or, if mailed by check, to __________________________. Statements should be
mailed to ______________________. This information is provided by assignee
named above, or ____________________________, as its agent.
A-3-10
<PAGE>
EXHIBIT A-4
[FORM OF CLASS C CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
NOTWITHSTANDING THE ABOVE, THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, EXCEPT FOR
AN INSURANCE COMPANY INVESTING SOLELY ASSETS OF ITS GENERAL ACCOUNT, WHICH
SHALL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT THE PURCHASE AND
OWNERSHIP OF THIS CERTIFICATE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER ERISA AND SECTION 4975 OF THE CODE.
THIS CLASS C CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN OTHER
CLASSES OF CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THE PORTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THE CERTIFICATES EVIDENCED
BY THIS CERTIFICATE WILL BE DECREASED BY THE PORTION OF PRINCIPAL
DISTRIBUTIONS, REALIZED LOSSES AND CERTAIN EXPENSE LOSSES ON THE CERTIFICATES
ALLOCABLE TO THIS CLASS C CERTIFICATE. ACCORDINGLY, THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE LESS THAN THAT SET FORTH BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE PRINCIPAL
BALANCE BY INQUIRY OF THE TRUSTEE.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
THIS CLASS C CERTIFICATE WAS ISSUED ON NOVEMBER 12, 1998 AND IS NOT TREATED AS
HAVING BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX
PURPOSES. THE ISSUE PRICE OF THIS CERTIFICATE IS __________% OF THE ORIGINAL
PRINCIPAL AMOUNT OF THIS CERTIFICATE. HOWEVER, IT IS POSSIBLE THAT APPLICABLE
LAW AND TREASURY REGULATIONS COULD BE INTERPRETED TO PROVIDE THAT ALL INTEREST
PAYMENT ON THIS CERTIFICATE ARE TO BE TREATED AS PART OF THE STATED REDEMPTION
PRICE AT MATURITY OF THE CERTIFICATE (I.E., PRINCIPAL) AND WOULD NOT CONSTITUTE
QUALIFIED STATED INTEREST, THEREBY CAUSING THIS CERTIFICATE TO HAVE OID. IN
SUCH CASE, THE FOLLOWING INFORMATION WOULD BE APPLICABLE: (I) THE AMOUNT OF OID
AS A PERCENTAGE OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS CERTIFICATE WOULD BE
APPROXIMATELY _______, (II) THE YIELD TO MATURITY OF THIS CERTIFICATE FOR
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<PAGE>
PURPOSES OF COMPUTING OID WOULD BE APPROXIMATELY _____ PER ANNUM, COMPOUNDED
MONTHLY, AND (III) THE TOTAL AMOUNT OF OID ALLOCABLE TO THE INITIAL ACCRUAL
PERIOD (NOVEMBER 12, 1998 TO DECEMBER 15, 1998) FOR PURPOSES OF COMPUTING OID
ON THIS CERTIFICATE AS A PERCENTAGE OF THE ORIGINAL AMOUNT OF THIS CERTIFICATE
WOULD BE APPROXIMATELY _____%. THE METHOD USED TO CALCULATE THE YIELD TO
MATURITY AND THE AMOUNT OF OID ALLOCABLE TO THE INITIAL ACCRUAL PERIOD IS THE
EXACT METHOD. THE ACTUAL YIELD TO MATURITY AND OID ON THIS CERTIFICATE MAY
DIFFER FROM THE PROJECTED AMOUNTS. THE PREPAYMENT ASSUMPTION USED IN
CALCULATING THE YIELD TO MATURITY IS 0% CPR AND THE PAYMENT OF THE BALLOON
PAYMENT ON THE HYPERAMORTIZATION LOANS. NO REPRESENTATION IS MADE THAT THE
MORTGAGE LOANS WILL PREPAY AT THE ASSUMED RATE OR ANY OTHER RATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
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 HEREON 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.
A-4-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
INITIAL PASS-THROUGH RATE: 7.11% CERTIFICATE PRINCIPAL BALANCE OF
THIS CLASS C CERTIFICATE AS OF THE
CLOSING DATE $52,905,000
DATE OF POOLING & SERVICING AGREEMENT: MASTER SERVICER: GMAC COMMERCIAL
AS OF NOVEMBER 1, 1998 MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 INITIAL SPECIAL SERVICER: GMAC
COMMERCIAL MORTGAGE CORPORATION
CLOSING DATE: NOVEMBER 12, 1998 TRUSTEE: LASALLE NATIONAL BANK
FIRST DISTRIBUTION DATE: FISCAL AGENT: ABN AMRO BANK N.V.
DECEMBER 15, 1998
AGGREGATE CERTIFICATE PRINCIPAL CUSIP NO.
BALANCE OF THE CLASS C
CERTIFICATE AS OF THE CLOSING DATE: NO. 1
$52,905,000
CLASS C CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of
a pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class C Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of
the pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be
held in the Collection Account, the Distribution Account, the Insurance
Policies and any REO Properties. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Pooling and
Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing an interest in the Class of
Certificates specified on the face hereof equal to the quotient expressed as a
percentage obtained by dividing the Certificate Principal Balance of this
Certificate specified on the face hereof by the aggregate initial Certificate
Principal Balance of the Class C Certificates. The Certificates are designated
as the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2 and are issued in sixteen Classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will
evidence in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and
Servicing Agreement and reference is made to the Pooling and Servicing
Agreement for information with respect to the interests, rights, benefits,
A-4-3
<PAGE>
obligations, proceeds, and duties evidenced hereby and the rights, duties and
obligations of the Trustee. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which the
Certificateholder is bound. In the case of any conflict between terms specified
in this Certificate and terms specified in the Pooling and Servicing Agreement,
the terms of the Pooling and Servicing Agreement shall govern.
Distributions of principal of and interest on this Certificate will be
made out of the Available Distribution Amount, to the extent and subject to the
limitations set forth in the Pooling and Servicing Agreement, on the 15th day
of each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (a "Distribution Date") commencing on the first Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"). All sums
distributable on this Certificate are payable in the coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
Interest on this Certificate will accrue (computed as if each year
consisted of 360 days and each month consisted of 30 days) during the Interest
Accrual Period relating to such Distribution Date at a Pass-Through Rate
calculated as specified in the Pooling and Servicing Agreement on the
Certificate Principal Balance of this Certificate immediately prior to each
Distribution Date. Principal and interest allocated to this Certificate on any
Distribution Date will be in an amount due to this Certificate's pro rata share
of the amount to be distributed on the Certificates of this Class as of such
Distribution Date, with a final distribution to be made upon retirement of this
Certificate as set forth in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed 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.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses
and interest shortfalls on the Mortgage Loans allocated to any Class of
Certificates will be allocated pro rata among the outstanding Certificates of
such Class.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth in the Pooling and Servicing Agreement. As provided in
the Pooling and Servicing Agreement, withdrawals from the Collection Account
shall be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of certain expenses
incurred with respect to the servicing of the Mortgage Loans and administration
of the Trust.
All distributions under the Pooling and Servicing Agreement to a
nominee of The Depository Trust Company ("DTC") will be made by or on behalf of
the Trustee by wire transfer in immediately available funds to an account
specified in the request of such Certificateholder. All distributions under the
Pooling and Servicing Agreement to Certificateholders will be made by wire
transfer in immediately available funds to the account specified by the
Certificateholder, at a bank or other entity having appropriate facilities
therefor, if such Certificateholder will have provided the Trustee with wiring
instructions no more than five business days after the related Record Date, or
otherwise by check mailed to such Certificateholder. Notwithstanding the above,
the final distribution on any Certificate will be made only upon presentation
and surrender of such Certificate at the location that will be specified in a
notice of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of
A-4-4
<PAGE>
the aggregate Certificate Principal Balance of the Certificates then
outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon the Certificate.
The Pooling and Servicing Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, the transfer of this Certificate is
registrable in the Certificate Register upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Certificate Registrar duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations will be issued to the designated transferee or
transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class
A-1 and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations
of $100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates
registered in the name of Cede & Co., as nominee of the DTC. No Certificate
Owner will be entitled to receive a Definitive Certificate representing such
interest, except under the limited circumstances described in the Pooling and
Servicing Agreement. The Residual Certificates will be issued in fully
registered, certificated form in minimum percentage interests of 10% and in
multiples of 10% in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trustee, the Fiscal
Agent, the Master Servicer, the Special Servicer, the Certificate Registrar nor
any such agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby
(other than the obligation of the Trustee to make payments to the
Certificateholders as set forth in Section 10.2 of the Pooling and Servicing
Agreement and other than the obligations in the nature of information or tax
reporting) shall terminate on the earliest of (i) the later of (A) the final
payment or other liquidation of the last Mortgage Loan remaining in the Trust
and (B) the disposition of all REO Property or (ii) the sale of the property
held by the Trust in accordance with Section 10.1(b) of the Pooling and
Servicing Agreement; provided that in no event shall the Trust continue beyond
the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James, living on the date hereof. The parties designated in
the Pooling and Servicing Agreement may exercise their option to purchase the
Mortgage Loans and any other property remaining in the Trust and cause the
termination of the Trust in accordance with the requirements set forth in the
Pooling and Servicing Agreement. Upon termination of the Trust and payment of
the Certificates and of all administrative expenses associated with the Trust,
any remaining assets of the Trust shall be distributed to the holders of the
Class R-I Certificates.
A-4-5
<PAGE>
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-4-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:
-----------------------------------
AUTHORIZED OFFICER
Dated:
A-4-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS C CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
BY:
------------------------------------
AUTHORIZED SIGNATORY
A-4-8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT . . . .Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.......................
common (State)
Additional abbreviations may also be used though not in the above
list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
- -------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ----------------------------------
- ----------------------------------
---------------------------------------------
- -------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- -------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- -------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the
within-named Trust, with full power of substitution in the premises.
Dated:
-------------------------- -------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of this Certificate in every
particular without alteration or
enlargement or any change whatever.
- --------------------------------
SIGNATURE GUARANTEED The
signature must be
guaranteed by a
commercial bank or trust
company or by a member
firm of the New York
Stock Exchange or another
national securities
exchange. Notarized or
witnessed signatures are
not acceptable.
A-4-9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ____________ for the account of
_________________________________________ account number _____________________
or, if mailed by check, to __________________________. Statements should be
mailed to ______________________. This information is provided by assignee
named above, or ____________________________, as its agent.
A-4-10
<PAGE>
EXHIBIT A-5
[FORM OF CLASS D CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
NOTWITHSTANDING THE ABOVE, THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, EXCEPT FOR
AN INSURANCE COMPANY INVESTING SOLELY ASSETS OF ITS GENERAL ACCOUNT, WHICH
SHALL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT THE PURCHASE AND
OWNERSHIP OF THIS CERTIFICATE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER ERISA AND SECTION 4975 OF THE CODE.
THIS CLASS D CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN OTHER
CLASSES OF CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THE PORTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THE CERTIFICATES EVIDENCED
BY THIS CERTIFICATE WILL BE DECREASED BY THE PORTION OF PRINCIPAL
DISTRIBUTIONS, REALIZED LOSSES AND CERTAIN EXPENSE LOSSES ON THE CERTIFICATES
ALLOCABLE TO THIS CLASS D CERTIFICATE. ACCORDINGLY, THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE LESS THAN THAT SET FORTH BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE PRINCIPAL
BALANCE BY INQUIRY OF THE TRUSTEE.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
THIS CLASS D CERTIFICATE WAS ISSUED ON NOVEMBER 12, 1998 AND IS NOT TREATED AS
HAVING BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX
PURPOSES. THE ISSUE PRICE OF THIS CERTIFICATE IS __________% OF THE ORIGINAL
PRINCIPAL AMOUNT OF THIS CERTIFICATE. HOWEVER, IT IS POSSIBLE THAT APPLICABLE
LAW AND TREASURY REGULATIONS COULD BE INTERPRETED TO PROVIDE THAT ALL INTEREST
PAYMENT ON THIS CERTIFICATE ARE TO BE TREATED AS PART OF THE STATED REDEMPTION
PRICE AT MATURITY OF THE CERTIFICATE (I.E., PRINCIPAL) AND WOULD NOT CONSTITUTE
QUALIFIED STATED INTEREST, THEREBY CAUSING THIS CERTIFICATE TO HAVE OID. IN
SUCH CASE, THE FOLLOWING INFORMATION WOULD BE APPLICABLE: (I) THE AMOUNT OF OID
AS A PERCENTAGE OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS CERTIFICATE WOULD BE
APPROXIMATELY _______, (II) THE YIELD TO MATURITY OF THIS CERTIFICATE FOR
A-5-1
<PAGE>
PURPOSES OF COMPUTING OID WOULD BE APPROXIMATELY _____ PER ANNUM, COMPOUNDED
MONTHLY, AND (III) THE TOTAL AMOUNT OF OID ALLOCABLE TO THE INITIAL ACCRUAL
PERIOD (NOVEMBER 12, 1998 TO DECEMBER 15, 1998) FOR PURPOSES OF COMPUTING OID
ON THIS CERTIFICATE AS A PERCENTAGE OF THE ORIGINAL AMOUNT OF THIS CERTIFICATE
WOULD BE APPROXIMATELY _____%. THE METHOD USED TO CALCULATE THE YIELD TO
MATURITY AND THE AMOUNT OF OID ALLOCABLE TO THE INITIAL ACCRUAL PERIOD IS THE
EXACT METHOD. THE ACTUAL YIELD TO MATURITY AND OID ON THIS CERTIFICATE MAY
DIFFER FROM THE PROJECTED AMOUNTS. THE PREPAYMENT ASSUMPTION USED IN
CALCULATING THE YIELD TO MATURITY IS 0% CPR AND THE PAYMENT OF THE BALLOON
PAYMENT ON THE HYPERAMORTIZATION LOANS. NO REPRESENTATION IS MADE THAT THE
MORTGAGE LOANS WILL PREPAY AT THE ASSUMED RATE OR ANY OTHER RATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
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 HEREON 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.
A-5-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
INITIAL PASS-THROUGH RATE: 7.15% CERTIFICATE PRINCIPAL BALANCE OF
THIS CLASS D CERTIFICATE AS OF THE
CLOSING DATE $58,196,000
DATE OF POOLING & SERVICING AGREEMENT: MASTER SERVICER: GMAC
AS OF NOVEMBER 1, 1998 COMMERCIAL MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 INITIAL SPECIAL SERVICER: GMAC
COMMERCIAL MORTGAGE CORPORATION
CLOSING DATE: NOVEMBER 12, 1998 TRUSTEE: LASALLE NATIONAL BANK
FIRST DISTRIBUTION DATE: FISCAL AGENT: ABN AMRO BANK N.V.
DECEMBER 15, 1998
AGGREGATE CERTIFICATE PRINCIPAL CUSIP NO.
BALANCE OF THE CLASS D
CERTIFICATE AS OF THE CLOSING DATE: NO. 1
$58,196,000
CLASS D CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of
a pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class D Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of
the pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be
held in the Collection Account, the Distribution Account, the Insurance
Policies and any REO Properties. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Pooling and
Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing an interest in the Class of
Certificates specified on the face hereof equal to the quotient expressed as a
percentage obtained by dividing the Certificate Principal Balance of this
Certificate specified on the face hereof by the aggregate initial Certificate
Principal Balance of the Class D Certificates. The Certificates are designated
as the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2 and are issued in sixteen Classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will
evidence in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and
Servicing Agreement and reference is made to the Pooling and Servicing
Agreement for information with respect to the interests, rights, benefits,
A-5-3
<PAGE>
obligations, proceeds, and duties evidenced hereby and the rights, duties and
obligations of the Trustee. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which the
Certificateholder is bound. In the case of any conflict between terms specified
in this Certificate and terms specified in the Pooling and Servicing Agreement,
the terms of the Pooling and Servicing Agreement shall govern.
Distributions of principal of and interest on this Certificate will be
made out of the Available Distribution Amount, to the extent and subject to the
limitations set forth in the Pooling and Servicing Agreement, on the 15th day
of each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (a "Distribution Date") commencing on the first Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"). All sums
distributable on this Certificate are payable in the coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
Interest on this Certificate will accrue (computed as if each year
consisted of 360 days and each month consisted of 30 days) during the Interest
Accrual Period relating to such Distribution Date at a Pass-Through Rate
calculated as specified in the Pooling and Servicing Agreement on the
Certificate Principal Balance of this Certificate immediately prior to each
Distribution Date. Principal and interest allocated to this Certificate on any
Distribution Date will be in an amount due to this Certificate's pro rata share
of the amount to be distributed on the Certificates of this Class as of such
Distribution Date, with a final distribution to be made upon retirement of this
Certificate as set forth in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed 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.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses
and interest shortfalls on the Mortgage Loans allocated to any Class of
Certificates will be allocated pro rata among the outstanding Certificates of
such Class.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth in the Pooling and Servicing Agreement. As provided in
the Pooling and Servicing Agreement, withdrawals from the Collection Account
shall be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of certain expenses
incurred with respect to the servicing of the Mortgage Loans and administration
of the Trust.
All distributions under the Pooling and Servicing Agreement to a
nominee of The Depository Trust Company ("DTC") will be made by or on behalf of
the Trustee by wire transfer in immediately available funds to an account
specified in the request of such Certificateholder. All distributions under the
Pooling and Servicing Agreement to Certificateholders will be made by wire
transfer in immediately available funds to the account specified by the
Certificateholder, at a bank or other entity having appropriate facilities
therefor, if such Certificateholder will have provided the Trustee with wiring
instructions no more than five business days after the related Record Date, or
otherwise by check mailed to such Certificateholder. Notwithstanding the above,
the final distribution on any Certificate will be made only upon presentation
and surrender of such Certificate at the location that will be specified in a
notice of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of
A-5-4
<PAGE>
the aggregate Certificate Principal Balance of the Certificates then
outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon the Certificate.
The Pooling and Servicing Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, the transfer of this Certificate is
registrable in the Certificate Register upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Certificate Registrar duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations will be issued to the designated transferee or
transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class
A-1 and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations
of $100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates
registered in the name of Cede & Co., as nominee of the DTC. No Certificate
Owner will be entitled to receive a Definitive Certificate representing such
interest, except under the limited circumstances described in the Pooling and
Servicing Agreement. The Residual Certificates will be issued in fully
registered, certificated form in minimum percentage interests of 10% and in
multiples of 10% in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trustee, the Fiscal
Agent, the Master Servicer, the Special Servicer, the Certificate Registrar nor
any such agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby
(other than the obligation of the Trustee to make payments to the
Certificateholders as set forth in Section 10.2 of the Pooling and Servicing
Agreement and other than the obligations in the nature of information or tax
reporting) shall terminate on the earliest of (i) the later of (A) the final
payment or other liquidation of the last Mortgage Loan remaining in the Trust
and (B) the disposition of all REO Property or (ii) the sale of the property
held by the Trust in accordance with Section 10.1(b) of the Pooling and
Servicing Agreement; provided that in no event shall the Trust continue beyond
the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James, living on the date hereof. The parties designated in
the Pooling and Servicing Agreement may exercise their option to purchase the
Mortgage Loans and any other property remaining in the Trust and cause the
termination of the Trust in accordance with the requirements set forth in the
Pooling and Servicing Agreement. Upon termination of the Trust and payment of
the Certificates and of all administrative expenses associated with the Trust,
any remaining assets of the Trust shall be distributed to the holders of the
Class R-I Certificates.
A-5-5
<PAGE>
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-5-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:
------------------------------
AUTHORIZED OFFICER
Dated:
A-5-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS D CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
BY:
---------------------------------
AUTHORIZED SIGNATORY
A-5-8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT . . . .Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.......................
common (State)
Additional abbreviations may also be used though not in the above
list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
- -------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- -------------------------------------
- -------------------------------------
------------------------------------------
- -------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- -------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- -------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the
within-named Trust, with full power of substitution in the premises.
Dated:
-------------------------- -------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of this Certificate in every
particular without alteration or
enlargement or any change whatever.
- --------------------------------
SIGNATURE GUARANTEED The
signature must be
guaranteed by a
commercial bank or trust
company or by a member
firm of the New York
Stock Exchange or another
national securities
exchange. Notarized or
witnessed signatures are
not acceptable.
A-5-9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ____________ for the account of
_________________________________________ account number _____________________
or, if mailed by check, to __________________________. Statements should be
mailed to ______________________. This information is provided by assignee
named above, or ____________________________, as its agent.
A-5-10
<PAGE>
EXHIBIT A-6
[FORM OF CLASS E CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
NOTWITHSTANDING THE ABOVE, THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, EXCEPT FOR
AN INSURANCE COMPANY INVESTING SOLELY ASSETS OF ITS GENERAL ACCOUNT, WHICH
SHALL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT THE PURCHASE AND
OWNERSHIP OF THIS CERTIFICATE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER ERISA AND SECTION 4975 OF THE CODE.
THIS CLASS E CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN OTHER
CLASSES OF CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THE PORTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THE CERTIFICATES EVIDENCED
BY THIS CERTIFICATE WILL BE DECREASED BY THE PORTION OF PRINCIPAL
DISTRIBUTIONS, REALIZED LOSSES AND CERTAIN EXPENSE LOSSES ON THE CERTIFICATES
ALLOCABLE TO THIS CLASS E CERTIFICATE. ACCORDINGLY, THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE LESS THAN THAT SET FORTH BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE PRINCIPAL
BALANCE BY INQUIRY OF THE TRUSTEE.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
THIS CLASS E CERTIFICATE WAS ISSUED ON NOVEMBER 12, 1998 AND IS NOT TREATED AS
HAVING BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX
PURPOSES. THE ISSUE PRICE OF THIS CERTIFICATE IS __________% OF THE ORIGINAL
PRINCIPAL AMOUNT OF THIS CERTIFICATE. HOWEVER, IT IS POSSIBLE THAT APPLICABLE
LAW AND TREASURY REGULATIONS COULD BE INTERPRETED TO PROVIDE THAT ALL INTEREST
PAYMENT ON THIS CERTIFICATE ARE TO BE TREATED AS PART OF THE STATED REDEMPTION
PRICE AT MATURITY OF THE CERTIFICATE (I.E., PRINCIPAL) AND WOULD NOT CONSTITUTE
QUALIFIED STATED INTEREST, THEREBY CAUSING THIS CERTIFICATE TO HAVE OID. IN
SUCH CASE, THE FOLLOWING INFORMATION WOULD BE APPLICABLE: (I) THE AMOUNT OF OID
AS A PERCENTAGE OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS CERTIFICATE WOULD BE
APPROXIMATELY _______, (II) THE YIELD TO MATURITY OF THIS CERTIFICATE FOR
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<PAGE>
PURPOSES OF COMPUTING OID WOULD BE APPROXIMATELY _____ PER ANNUM, COMPOUNDED
MONTHLY, AND (III) THE TOTAL AMOUNT OF OID ALLOCABLE TO THE INITIAL ACCRUAL
PERIOD (NOVEMBER 12, 1998 TO DECEMBER 15, 1998) FOR PURPOSES OF COMPUTING OID
ON THIS CERTIFICATE AS A PERCENTAGE OF THE ORIGINAL AMOUNT OF THIS CERTIFICATE
WOULD BE APPROXIMATELY _____%. THE METHOD USED TO CALCULATE THE YIELD TO
MATURITY AND THE AMOUNT OF OID ALLOCABLE TO THE INITIAL ACCRUAL PERIOD IS THE
EXACT METHOD. THE ACTUAL YIELD TO MATURITY AND OID ON THIS CERTIFICATE MAY
DIFFER FROM THE PROJECTED AMOUNTS. THE PREPAYMENT ASSUMPTION USED IN
CALCULATING THE YIELD TO MATURITY IS 0% CPR AND THE PAYMENT OF THE BALLOON
PAYMENT ON THE HYPERAMORTIZATION LOANS. NO REPRESENTATION IS MADE THAT THE
MORTGAGE LOANS WILL PREPAY AT THE ASSUMED RATE OR ANY OTHER RATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
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 HEREON 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.
A-6-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
INITIAL PASS-THROUGH RATE: 7.15% CERTIFICATE PRINCIPAL BALANCE OF
THIS CLASS E CERTIFICATE AS OF THE
CLOSING DATE $21,163,000
DATE OF POOLING & SERVICING AGREEMENT: MASTER SERVICER: GMAC COMMERCIAL
AS OF NOVEMBER 1, 1998 MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 INITIAL SPECIAL SERVICER: GMAC
COMMERCIAL MORTGAGE CORPORATION
CLOSING DATE: NOVEMBER 12, 1998 TRUSTEE: LASALLE NATIONAL BANK
FIRST DISTRIBUTION DATE: FISCAL AGENT: ABN AMRO BANK N.V.
DECEMBER 15, 1998
AGGREGATE CERTIFICATE PRINCIPAL CUSIP NO.
BALANCE OF THE CLASS E
CERTIFICATE AS OF THE CLOSING DATE: NO. 1
$21,163,000
CLASS E CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of
a pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class E Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of
the pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be
held in the Collection Account, the Distribution Account, the Insurance
Policies and any REO Properties. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Pooling and
Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing an interest in the Class of
Certificates specified on the face hereof equal to the quotient expressed as a
percentage obtained by dividing the Certificate Principal Balance of this
Certificate specified on the face hereof by the aggregate initial Certificate
Principal Balance of the Class E Certificates. The Certificates are designated
as the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2 and are issued in sixteen Classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will
evidence in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and
Servicing Agreement and reference is made to the Pooling and Servicing
Agreement for information with respect to the interests, rights, benefits,
A-6-3
<PAGE>
obligations, proceeds, and duties evidenced hereby and the rights, duties and
obligations of the Trustee. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which the
Certificateholder is bound. In the case of any conflict between terms specified
in this Certificate and terms specified in the Pooling and Servicing Agreement,
the terms of the Pooling and Servicing Agreement shall govern.
Distributions of principal of and interest on this Certificate will be
made out of the Available Distribution Amount, to the extent and subject to the
limitations set forth in the Pooling and Servicing Agreement, on the 15th day
of each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (a "Distribution Date") commencing on the first Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"). All sums
distributable on this Certificate are payable in the coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
Interest on this Certificate will accrue (computed as if each year
consisted of 360 days and each month consisted of 30 days) during the Interest
Accrual Period relating to such Distribution Date at a Pass-Through Rate
calculated as specified in the Pooling and Servicing Agreement on the
Certificate Principal Balance of this Certificate immediately prior to each
Distribution Date. Principal and interest allocated to this Certificate on any
Distribution Date will be in an amount due to this Certificate's pro rata share
of the amount to be distributed on the Certificates of this Class as of such
Distribution Date, with a final distribution to be made upon retirement of this
Certificate as set forth in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed 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.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses
and interest shortfalls on the Mortgage Loans allocated to any Class of
Certificates will be allocated pro rata among the outstanding Certificates of
such Class.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth in the Pooling and Servicing Agreement. As provided in
the Pooling and Servicing Agreement, withdrawals from the Collection Account
shall be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of certain expenses
incurred with respect to the servicing of the Mortgage Loans and administration
of the Trust.
All distributions under the Pooling and Servicing Agreement to a
nominee of The Depository Trust Company ("DTC") will be made by or on behalf of
the Trustee by wire transfer in immediately available funds to an account
specified in the request of such Certificateholder. All distributions under the
Pooling and Servicing Agreement to Certificateholders will be made by wire
transfer in immediately available funds to the account specified by the
Certificateholder, at a bank or other entity having appropriate facilities
therefor, if such Certificateholder will have provided the Trustee with wiring
instructions no more than five business days after the related Record Date, or
otherwise by check mailed to such Certificateholder. Notwithstanding the above,
the final distribution on any Certificate will be made only upon presentation
and surrender of such Certificate at the location that will be specified in a
notice of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of
A-6-4
<PAGE>
the aggregate Certificate Principal Balance of the Certificates then
outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon the Certificate.
The Pooling and Servicing Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, the transfer of this Certificate is
registrable in the Certificate Register upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Certificate Registrar duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations will be issued to the designated transferee or
transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class
A-1 and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations
of $100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates
registered in the name of Cede & Co., as nominee of the DTC. No Certificate
Owner will be entitled to receive a Definitive Certificate representing such
interest, except under the limited circumstances described in the Pooling and
Servicing Agreement. The Residual Certificates will be issued in fully
registered, certificated form in minimum percentage interests of 10% and in
multiples of 10% in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trustee, the Fiscal
Agent, the Master Servicer, the Special Servicer, the Certificate Registrar nor
any such agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby
(other than the obligation of the Trustee to make payments to the
Certificateholders as set forth in Section 10.2 of the Pooling and Servicing
Agreement and other than the obligations in the nature of information or tax
reporting) shall terminate on the earliest of (i) the later of (A) the final
payment or other liquidation of the last Mortgage Loan remaining in the Trust
and (B) the disposition of all REO Property or (ii) the sale of the property
held by the Trust in accordance with Section 10.1(b) of the Pooling and
Servicing Agreement; provided that in no event shall the Trust continue beyond
the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James, living on the date hereof. The parties designated in
the Pooling and Servicing Agreement may exercise their option to purchase the
Mortgage Loans and any other property remaining in the Trust and cause the
termination of the Trust in accordance with the requirements set forth in the
Pooling and Servicing Agreement. Upon termination of the Trust and payment of
the Certificates and of all administrative expenses associated with the Trust,
any remaining assets of the Trust shall be distributed to the holders of the
Class R-I Certificates.
A-6-5
<PAGE>
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-6-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:
---------------------------------
AUTHORIZED OFFICER
Dated:
A-6-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS E CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
BY:
---------------------------------
AUTHORIZED SIGNATORY
A-6-8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT . . . .Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.......................
common (State)
Additional abbreviations may also be used though not in the above
list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
- -------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- -----------------------------------
- -----------------------------------
--------------------------------------------
- -------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- -------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- -------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the
within-named Trust, with full power of substitution in the premises.
Dated:
-------------------------- -------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of this Certificate in every
particular without alteration or
enlargement or any change whatever.
- --------------------------------
SIGNATURE GUARANTEED The
signature must be
guaranteed by a
commercial bank or trust
company or by a member
firm of the New York
Stock Exchange or another
national securities
exchange. Notarized or
witnessed signatures are
not acceptable.
A-6-9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ____________ for the account of
_________________________________________ account number _____________________
or, if mailed by check, to __________________________. Statements should be
mailed to ______________________. This information is provided by assignee
named above, or ____________________________, as its agent.
A-6-10
<PAGE>
EXHIBIT A-7
[FORM OF CLASS F CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A)(1) TO A PERSON THAT THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE SECURITIES
ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION.
NOTWITHSTANDING THE ABOVE, THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, EXCEPT FOR
AN INSURANCE COMPANY INVESTING SOLELY ASSETS OF ITS GENERAL ACCOUNT, WHICH
SHALL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT THE PURCHASE AND
OWNERSHIP OF THIS CERTIFICATE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER ERISA AND SECTION 4975 OF THE CODE.
THIS CLASS F CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN OTHER
CLASSES OF CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THE PORTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THE CERTIFICATES EVIDENCED
BY THIS CERTIFICATE WILL BE DECREASED BY THE PORTION OF PRINCIPAL
DISTRIBUTIONS, REALIZED LOSSES AND CERTAIN EXPENSE LOSSES ON THE CERTIFICATES
ALLOCABLE TO THIS CLASS F CERTIFICATE. ACCORDINGLY, THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE LESS THAN THAT SET FORTH BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE PRINCIPAL
BALANCE BY INQUIRY OF THE TRUSTEE.
THIS CLASS M CERTIFICATE WAS ISSUED ON NOVEMBER 12, 1998 AND IS TREATED AS
HAVING BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX
PURPOSES. THE ISSUE PRICE OF THIS CERTIFICATE IS _______% OF THE ORIGINAL
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<PAGE>
PRINCIPAL AMOUNT OF THIS CERTIFICATE. ASSUMING THAT THIS CERTIFICATE PAYS IN
ACCORDANCE WITH PROJECTED CASH FLOWS BASED ON CERTAIN ASSUMPTIONS USED IN
PRICING THE CERTIFICATES AND THAT NONE OF THE STATED INTEREST IS TREATED AS
"QUALIFIED STATED INTEREST", THE FOLLOWING INFORMATION WOULD BE APPLICABLE: (I)
THE AMOUNT OF OID AS A PERCENTAGE OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS
CERTIFICATE WOULD BE APPROXIMATELY __________, (II) THE YIELD TO MATURITY OF
THIS CERTIFICATE FOR PURPOSES OF COMPUTING OID WOULD BE APPROXIMATELY _____%
PER ANNUM, COMPOUNDED MONTHLY, AND (III) THE TOTAL AMOUNT OF OID ALLOCABLE TO
THE INITIAL ACCRUAL PERIOD (NOVEMBER 12, 1998 TO DECEMBER 15, 1998) FOR
PURPOSES OF COMPUTING OID ON THIS CERTIFICATE AS A PERCENTAGE OF THE ORIGINAL
PRINCIPAL AMOUNT OF THIS CERTIFICATE WOULD BE APPROXIMATELY ____%. THE METHOD
USED TO CALCULATE THE YIELD TO MATURITY AND THE AMOUNT OF OID ALLOCABLE TO THE
INITIAL ACCRUAL PERIOD IS THE EXACT METHOD. THE ACTUAL YIELD TO MATURITY AND
OID ON THIS CERTIFICATE MAY DIFFER FROM THE PROJECTED AMOUNTS. THE PREPAYMENT
ASSUMPTION USED IN CALCULATING THE YIELD TO MATURITY IS 0% CPR AND THE PAYMENT
OF THE BALLOON PAYMENT ON THE HYPERAMORTIZATION DATE IN THE CASE OF THE
HYPERAMORTIZATION LOANS. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT THE ASSUMED RATE OR ANY OTHER RATE.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
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 HEREON 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.
A-7-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
INITIAL PASS-THROUGH RATE: 6.01% CERTIFICATE PRINCIPAL BALANCE OF
THIS CLASS F CERTIFICATE AS OF THE
CLOSING DATE $23,807,000
DATE OF POOLING & SERVICING AGREEMENT: MASTER SERVICER: GMAC COMMERCIAL
AS OF NOVEMBER 1, 1998 MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 INITIAL SPECIAL SERVICER: GMAC
COMMERCIAL MORTGAGE CORPORATION
CLOSING DATE: NOVEMBER 12, 1998 TRUSTEE: LASALLE NATIONAL BANK
FIRST DISTRIBUTION DATE: FISCAL AGENT: ABN AMRO BANK N.V.
DECEMBER 15, 1998
AGGREGATE CERTIFICATE PRINCIPAL CUSIP NO.
BALANCE OF THE CLASS F
CERTIFICATE AS OF THE CLOSING DATE: NO. 1
$23,807,000
CLASS F CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of
a pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class F Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of
the pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be
held in the Collection Account, the Distribution Account, the Insurance
Policies and any REO Properties. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Pooling and
Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing an interest in the Class of
Certificates specified on the face hereof equal to the quotient expressed as a
percentage obtained by dividing the Certificate Principal Balance of this
Certificate specified on the face hereof by the aggregate initial Certificate
Principal Balance of the Class F Certificates. The Certificates are designated
as the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2 and are issued in sixteen Classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will
evidence in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and
Servicing Agreement and reference is made to the Pooling and Servicing
Agreement for information with respect to the interests, rights, benefits,
A-7-3
<PAGE>
obligations, proceeds, and duties evidenced hereby and the rights, duties and
obligations of the Trustee. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which the
Certificateholder is bound. In the case of any conflict between terms specified
in this Certificate and terms specified in the Pooling and Servicing Agreement,
the terms of the Pooling and Servicing Agreement shall govern.
Distributions of principal of and interest on this Certificate will be
made out of the Available Distribution Amount, to the extent and subject to the
limitations set forth in the Pooling and Servicing Agreement, on the 15th day
of each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (a "Distribution Date") commencing on the first Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"). All sums
distributable on this Certificate are payable in the coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
Interest on this Certificate will accrue (computed as if each year
consisted of 360 days and each month consisted of 30 days) during the Interest
Accrual Period relating to such Distribution Date at a Pass-Through Rate
calculated as specified in the Pooling and Servicing Agreement on the
Certificate Principal Balance of this Certificate immediately prior to each
Distribution Date. Principal and interest allocated to this Certificate on any
Distribution Date will be in an amount due to this Certificate's pro rata share
of the amount to be distributed on the Certificates of this Class as of such
Distribution Date, with a final distribution to be made upon retirement of this
Certificate as set forth in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed 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.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses
and interest shortfalls on the Mortgage Loans allocated to any Class of
Certificates will be allocated pro rata among the outstanding Certificates of
such Class.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth in the Pooling and Servicing Agreement. As provided in
the Pooling and Servicing Agreement, withdrawals from the Collection Account
shall be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of certain expenses
incurred with respect to the servicing of the Mortgage Loans and administration
of the Trust.
All distributions under the Pooling and Servicing Agreement to a
nominee of The Depository Trust Company ("DTC") will be made by or on behalf of
the Trustee by wire transfer in immediately available funds to an account
specified in the request of such Certificateholder. All distributions under the
Pooling and Servicing Agreement to Certificateholders will be made by wire
transfer in immediately available funds to the account specified by the
Certificateholder, at a bank or other entity having appropriate facilities
therefor, if such Certificateholder will have provided the Trustee with wiring
instructions no more than five business days after the related Record Date, or
otherwise by check mailed to such Certificateholder. Notwithstanding the above,
the final distribution on any Certificate will be made only upon presentation
and surrender of such Certificate at the location that will be specified in a
notice of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of
A-7-4
<PAGE>
the aggregate Certificate Principal Balance of the Certificates then
outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon the Certificate.
The Pooling and Servicing Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, the transfer of this Certificate is
registrable in the Certificate Register upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Certificate Registrar duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations will be issued to the designated transferee or
transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class
A-1 and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations
of $100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates
registered in the name of Cede & Co., as nominee of the DTC. No Certificate
Owner will be entitled to receive a Definitive Certificate representing such
interest, except under the limited circumstances described in the Pooling and
Servicing Agreement. The Residual Certificates will be issued in fully
registered, certificated form in minimum percentage interests of 10% and in
multiples of 10% in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trustee, the Fiscal
Agent, the Master Servicer, the Special Servicer, the Certificate Registrar nor
any such agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby
(other than the obligation of the Trustee to make payments to the
Certificateholders as set forth in Section 10.2 of the Pooling and Servicing
Agreement and other than the obligations in the nature of information or tax
reporting) shall terminate on the earliest of (i) the later of (A) the final
payment or other liquidation of the last Mortgage Loan remaining in the Trust
and (B) the disposition of all REO Property or (ii) the sale of the property
held by the Trust in accordance with Section 10.1(b) of the Pooling and
Servicing Agreement; provided that in no event shall the Trust continue beyond
the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James, living on the date hereof. The parties designated in
the Pooling and Servicing Agreement may exercise their option to purchase the
Mortgage Loans and any other property remaining in the Trust and cause the
termination of the Trust in accordance with the requirements set forth in the
Pooling and Servicing Agreement. Upon termination of the Trust and payment of
the Certificates and of all administrative expenses associated with the Trust,
any remaining assets of the Trust shall be distributed to the holders of the
Class R-I Certificates.
A-7-5
<PAGE>
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-7-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:
-------------------------------------
AUTHORIZED OFFICER
Dated:
A-7-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS F CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
BY:
-----------------------------------
AUTHORIZED SIGNATORY
A-7-8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT . . . .Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.......................
common (State)
Additional abbreviations may also be used though not in the above
list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
- -------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------------
- ------------------------------------
-------------------------------------------
- -------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- -------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- -------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the
within-named Trust, with full power of substitution in the premises.
Dated:
--------------------------- -------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of this Certificate in every
particular without alteration or
enlargement or any change whatever.
- ---------------------------------
SIGNATURE GUARANTEED The
signature must be
guaranteed by a
commercial bank or trust
company or by a member
firm of the New York
Stock Exchange or another
national securities
exchange. Notarized or
witnessed signatures are
not acceptable.
A-7-9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ____________ for the account of
_________________________________________ account number _____________________
or, if mailed by check, to __________________________. Statements should be
mailed to ______________________. This information is provided by assignee
named above, or ____________________________, as its agent.
A-7-10
<PAGE>
EXHIBIT A-8
[FORM OF CLASS G CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A)(1) TO A PERSON THAT THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE SECURITIES
ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION.
NOTWITHSTANDING THE ABOVE, THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, EXCEPT FOR
AN INSURANCE COMPANY INVESTING SOLELY ASSETS OF ITS GENERAL ACCOUNT, WHICH
SHALL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT THE PURCHASE AND
OWNERSHIP OF THIS CERTIFICATE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER ERISA AND SECTION 4975 OF THE CODE.
THIS CLASS G CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN OTHER
CLASSES OF CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THE PORTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THE CERTIFICATES EVIDENCED
BY THIS CERTIFICATE WILL BE DECREASED BY THE PORTION OF PRINCIPAL
DISTRIBUTIONS, REALIZED LOSSES AND CERTAIN EXPENSE LOSSES ON THE CERTIFICATES
ALLOCABLE TO THIS CLASS G CERTIFICATE. ACCORDINGLY, THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE LESS THAN THAT SET FORTH BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE PRINCIPAL
BALANCE BY INQUIRY OF THE TRUSTEE.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
A-8-1
<PAGE>
THIS CLASS G CERTIFICATE WAS ISSUED ON NOVEMBER 12, 1998 AND IS TREATED AS
HAVING BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX
PURPOSES. THE ISSUE PRICE OF THIS CERTIFICATE IS _______% OF THE ORIGINAL
PRINCIPAL AMOUNT OF THIS CERTIFICATE. ASSUMING THAT THIS CERTIFICATE PAYS IN
ACCORDANCE WITH PROJECTED CASH FLOWS BASED ON CERTAIN ASSUMPTIONS USED IN
PRICING THE CERTIFICATES AND THAT NONE OF THE STATED INTEREST IS TREATED AS
"QUALIFIED STATED INTEREST", THE FOLLOWING INFORMATION WOULD BE APPLICABLE: (I)
THE AMOUNT OF OID AS A PERCENTAGE OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS
CERTIFICATE WOULD BE APPROXIMATELY __________, (II) THE YIELD TO MATURITY OF
THIS CERTIFICATE FOR PURPOSES OF COMPUTING OID WOULD BE APPROXIMATELY _____%
PER ANNUM, COMPOUNDED MONTHLY, AND (III) THE TOTAL AMOUNT OF OID ALLOCABLE TO
THE INITIAL ACCRUAL PERIOD (NOVEMBER 12, 1998 TO DECEMBER 15, 1998) FOR
PURPOSES OF COMPUTING OID ON THIS CERTIFICATE AS A PERCENTAGE OF THE ORIGINAL
PRINCIPAL AMOUNT OF THIS CERTIFICATE WOULD BE APPROXIMATELY ____%. THE METHOD
USED TO CALCULATE THE YIELD TO MATURITY AND THE AMOUNT OF OID ALLOCABLE TO THE
INITIAL ACCRUAL PERIOD IS THE EXACT METHOD. THE ACTUAL YIELD TO MATURITY AND
OID ON THIS CERTIFICATE MAY DIFFER FROM THE PROJECTED AMOUNTS. THE PREPAYMENT
ASSUMPTION USED IN CALCULATING THE YIELD TO MATURITY IS 0% CPR AND THE PAYMENT
OF THE BALLOON PAYMENT ON THE HYPERAMORTIZATION DATE IN THE CASE OF THE
HYPERAMORTIZATION LOANS. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT THE ASSUMED RATE OR ANY OTHER RATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
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 HEREON 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.
A-8-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
INITIAL PASS-THROUGH RATE: 6.01% CERTIFICATE PRINCIPAL BALANCE OF
THIS CLASS G CERTIFICATE AS OF THE
CLOSING DATE $18,517,000
DATE OF POOLING & SERVICING AGREEMENT: MASTER SERVICER: GMAC COMMERCIAL
AS OF NOVEMBER 1, 1998 MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 INITIAL SPECIAL SERVICER: GMAC
COMMERCIAL MORTGAGE CORPORATION
CLOSING DATE: NOVEMBER 12, 1998 TRUSTEE: LASALLE NATIONAL BANK
FIRST DISTRIBUTION DATE: FISCAL AGENT: ABN AMRO BANK N.V.
DECEMBER 15, 1998
AGGREGATE CERTIFICATE PRINCIPAL CUSIP NO.
BALANCE OF THE CLASS G
CERTIFICATE AS OF THE CLOSING DATE: NO. 1
$18,517,000
CLASS G CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of
a pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class G Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of
the pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be
held in the Collection Account, the Distribution Account, the Insurance
Policies and any REO Properties. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Pooling and
Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing an interest in the Class of
Certificates specified on the face hereof equal to the quotient expressed as a
percentage obtained by dividing the Certificate Principal Balance of this
Certificate specified on the face hereof by the aggregate initial Certificate
Principal Balance of the Class G Certificates. The Certificates are designated
as the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2 and are issued in sixteen Classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will
evidence in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and
Servicing Agreement and reference is made to the Pooling and Servicing
Agreement for information with respect to the interests, rights, benefits,
A-8-3
<PAGE>
obligations, proceeds, and duties evidenced hereby and the rights, duties and
obligations of the Trustee. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which the
Certificateholder is bound. In the case of any conflict between terms specified
in this Certificate and terms specified in the Pooling and Servicing Agreement,
the terms of the Pooling and Servicing Agreement shall govern.
Distributions of principal of and interest on this Certificate will be
made out of the Available Distribution Amount, to the extent and subject to the
limitations set forth in the Pooling and Servicing Agreement, on the 15th day
of each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (a "Distribution Date") commencing on the first Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"). All sums
distributable on this Certificate are payable in the coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
Interest on this Certificate will accrue (computed as if each year
consisted of 360 days and each month consisted of 30 days) during the Interest
Accrual Period relating to such Distribution Date at a Pass-Through Rate
calculated as specified in the Pooling and Servicing Agreement on the
Certificate Principal Balance of this Certificate immediately prior to each
Distribution Date. Principal and interest allocated to this Certificate on any
Distribution Date will be in an amount due to this Certificate's pro rata share
of the amount to be distributed on the Certificates of this Class as of such
Distribution Date, with a final distribution to be made upon retirement of this
Certificate as set forth in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed 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.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses
and interest shortfalls on the Mortgage Loans allocated to any Class of
Certificates will be allocated pro rata among the outstanding Certificates of
such Class.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth in the Pooling and Servicing Agreement. As provided in
the Pooling and Servicing Agreement, withdrawals from the Collection Account
shall be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of certain expenses
incurred with respect to the servicing of the Mortgage Loans and administration
of the Trust.
All distributions under the Pooling and Servicing Agreement to a
nominee of The Depository Trust Company ("DTC") will be made by or on behalf of
the Trustee by wire transfer in immediately available funds to an account
specified in the request of such Certificateholder. All distributions under the
Pooling and Servicing Agreement to Certificateholders will be made by wire
transfer in immediately available funds to the account specified by the
Certificateholder, at a bank or other entity having appropriate facilities
therefor, if such Certificateholder will have provided the Trustee with wiring
instructions no more than five business days after the related Record Date, or
otherwise by check mailed to such Certificateholder. Notwithstanding the above,
the final distribution on any Certificate will be made only upon presentation
and surrender of such Certificate at the location that will be specified in a
notice of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of
A-8-4
<PAGE>
the aggregate Certificate Principal Balance of the Certificates then
outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon the Certificate.
The Pooling and Servicing Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, the transfer of this Certificate is
registrable in the Certificate Register upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Certificate Registrar duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations will be issued to the designated transferee or
transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class
A-1 and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations
of $100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates
registered in the name of Cede & Co., as nominee of the DTC. No Certificate
Owner will be entitled to receive a Definitive Certificate representing such
interest, except under the limited circumstances described in the Pooling and
Servicing Agreement. The Residual Certificates will be issued in fully
registered, certificated form in minimum percentage interests of 10% and in
multiples of 10% in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trustee, the Fiscal
Agent, the Master Servicer, the Special Servicer, the Certificate Registrar nor
any such agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby
(other than the obligation of the Trustee to make payments to the
Certificateholders as set forth in Section 10.2 of the Pooling and Servicing
Agreement and other than the obligations in the nature of information or tax
reporting) shall terminate on the earliest of (i) the later of (A) the final
payment or other liquidation of the last Mortgage Loan remaining in the Trust
and (B) the disposition of all REO Property or (ii) the sale of the property
held by the Trust in accordance with Section 10.1(b) of the Pooling and
Servicing Agreement; provided that in no event shall the Trust continue beyond
the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James, living on the date hereof. The parties designated in
the Pooling and Servicing Agreement may exercise their option to purchase the
Mortgage Loans and any other property remaining in the Trust and cause the
termination of the Trust in accordance with the requirements set forth in the
Pooling and Servicing Agreement. Upon termination of the Trust and payment of
the Certificates and of all administrative expenses associated with the Trust,
any remaining assets of the Trust shall be distributed to the holders of the
Class R-I Certificates.
A-8-5
<PAGE>
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-8-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:
------------------------------------
AUTHORIZED OFFICER
Dated:
A-8-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS G CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
BY:
---------------------------------
AUTHORIZED SIGNATORY
A-8-8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT . . . .Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.......................
common (State)
Additional abbreviations may also be used though not in the above
list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
- -------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------
- --------------------------------------
-----------------------------------------
- -------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- -------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
to transfer the said Certificate in the Certificate Register of the
within-named Trust, with full power of substitution in the premises.
Dated:
--------------------------- -------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of this Certificate in every
particular without alteration or
enlargement or any change whatever.
- ---------------------------------
SIGNATURE GUARANTEED The
signature must be
guaranteed by a
commercial bank or trust
company or by a member
firm of the New York
Stock Exchange or another
national securities
exchange. Notarized or
witnessed signatures are
not acceptable.
A-8-9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ____________ for the account of
_________________________________________ account number _____________________
or, if mailed by check, to __________________________. Statements should be
mailed to ______________________. This information is provided by assignee
named above, or ____________________________, as its agent.
A-8-10
<PAGE>
EXHIBIT A-9
[FORM OF CLASS H CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A)(1) TO A PERSON THAT THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE SECURITIES
ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION.
NOTWITHSTANDING THE ABOVE, THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, EXCEPT FOR
AN INSURANCE COMPANY INVESTING SOLELY ASSETS OF ITS GENERAL ACCOUNT, WHICH
SHALL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT THE PURCHASE AND
OWNERSHIP OF THIS CERTIFICATE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER ERISA AND SECTION 4975 OF THE CODE.
THIS CLASS H CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN OTHER
CLASSES OF CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THE PORTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THE CERTIFICATES EVIDENCED
BY THIS CERTIFICATE WILL BE DECREASED BY THE PORTION OF PRINCIPAL
DISTRIBUTIONS, REALIZED LOSSES AND CERTAIN EXPENSE LOSSES ON THE CERTIFICATES
ALLOCABLE TO THIS CLASS H CERTIFICATE. ACCORDINGLY, THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE LESS THAN THAT SET FORTH BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE PRINCIPAL
BALANCE BY INQUIRY OF THE TRUSTEE.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
A-9-1
<PAGE>
THIS CLASS H CERTIFICATE WAS ISSUED ON NOVEMBER 12, 1998 AND IS TREATED AS
HAVING BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX
PURPOSES. THE ISSUE PRICE OF THIS CERTIFICATE IS _______% OF THE ORIGINAL
PRINCIPAL AMOUNT OF THIS CERTIFICATE. ASSUMING THAT THIS CERTIFICATE PAYS IN
ACCORDANCE WITH PROJECTED CASH FLOWS BASED ON CERTAIN ASSUMPTIONS USED IN
PRICING THE CERTIFICATES AND THAT NONE OF THE STATED INTEREST IS TREATED AS
"QUALIFIED STATED INTEREST", THE FOLLOWING INFORMATION WOULD BE APPLICABLE: (I)
THE AMOUNT OF OID AS A PERCENTAGE OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS
CERTIFICATE WOULD BE APPROXIMATELY __________, (II) THE YIELD TO MATURITY OF
THIS CERTIFICATE FOR PURPOSES OF COMPUTING OID WOULD BE APPROXIMATELY _____%
PER ANNUM, COMPOUNDED MONTHLY, AND (III) THE TOTAL AMOUNT OF OID ALLOCABLE TO
THE INITIAL ACCRUAL PERIOD (NOVEMBER 12, 1998 TO DECEMBER 15, 1998) FOR
PURPOSES OF COMPUTING OID ON THIS CERTIFICATE AS A PERCENTAGE OF THE ORIGINAL
PRINCIPAL AMOUNT OF THIS CERTIFICATE WOULD BE APPROXIMATELY ____%. THE METHOD
USED TO CALCULATE THE YIELD TO MATURITY AND THE AMOUNT OF OID ALLOCABLE TO THE
INITIAL ACCRUAL PERIOD IS THE EXACT METHOD. THE ACTUAL YIELD TO MATURITY AND
OID ON THIS CERTIFICATE MAY DIFFER FROM THE PROJECTED AMOUNTS. THE PREPAYMENT
ASSUMPTION USED IN CALCULATING THE YIELD TO MATURITY IS 0% CPR AND THE PAYMENT
OF THE BALLOON PAYMENT ON THE HYPERAMORTIZATION DATE IN THE CASE OF THE
HYPERAMORTIZATION LOANS. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT THE ASSUMED RATE OR ANY OTHER RATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
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 HEREON 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.
A-9-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
INITIAL PASS-THROUGH RATE: 6.01% CERTIFICATE PRINCIPAL BALANCE OF
THIS CLASS H CERTIFICATE AS OF THE
CLOSING DATE $10,581,000
DATE OF POOLING & SERVICING AGREEMENT: MASTER SERVICER: GMAC COMMERCIAL
AS OF NOVEMBER 1, 1998 MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 INITIAL SPECIAL SERVICER: GMAC
COMMERCIAL MORTGAGE CORPORATION
CLOSING DATE: NOVEMBER 12, 1998 TRUSTEE: LASALLE NATIONAL BANK
FIRST DISTRIBUTION DATE: FISCAL AGENT: ABN AMRO BANK N.V.
DECEMBER 15, 1998
AGGREGATE CERTIFICATE PRINCIPAL CUSIP NO.
BALANCE OF THE CLASS H
CERTIFICATE AS OF THE CLOSING DATE: NO. 1
$10,581,000
CLASS H CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of
a pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class H Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of
the pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be
held in the Collection Account, the Distribution Account, the Insurance
Policies and any REO Properties. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Pooling and
Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing an interest in the Class of
Certificates specified on the face hereof equal to the quotient expressed as a
percentage obtained by dividing the Certificate Principal Balance of this
Certificate specified on the face hereof by the aggregate initial Certificate
Principal Balance of the Class H Certificates. The Certificates are designated
as the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2 and are issued in sixteen Classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will
evidence in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and
Servicing Agreement and reference is made to the Pooling and Servicing
Agreement for information with respect to the interests, rights, benefits,
A-9-3
<PAGE>
obligations, proceeds, and duties evidenced hereby and the rights, duties and
obligations of the Trustee. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which the
Certificateholder is bound. In the case of any conflict between terms specified
in this Certificate and terms specified in the Pooling and Servicing Agreement,
the terms of the Pooling and Servicing Agreement shall govern.
Distributions of principal of and interest on this Certificate will be
made out of the Available Distribution Amount, to the extent and subject to the
limitations set forth in the Pooling and Servicing Agreement, on the 15th day
of each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (a "Distribution Date") commencing on the first Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"). All sums
distributable on this Certificate are payable in the coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
Interest on this Certificate will accrue (computed as if each year
consisted of 360 days and each month consisted of 30 days) during the Interest
Accrual Period relating to such Distribution Date at a Pass-Through Rate
calculated as specified in the Pooling and Servicing Agreement on the
Certificate Principal Balance of this Certificate immediately prior to each
Distribution Date. Principal and interest allocated to this Certificate on any
Distribution Date will be in an amount due to this Certificate's pro rata share
of the amount to be distributed on the Certificates of this Class as of such
Distribution Date, with a final distribution to be made upon retirement of this
Certificate as set forth in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed 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.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses
and interest shortfalls on the Mortgage Loans allocated to any Class of
Certificates will be allocated pro rata among the outstanding Certificates of
such Class.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth in the Pooling and Servicing Agreement. As provided in
the Pooling and Servicing Agreement, withdrawals from the Collection Account
shall be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of certain expenses
incurred with respect to the servicing of the Mortgage Loans and administration
of the Trust.
All distributions under the Pooling and Servicing Agreement to a
nominee of The Depository Trust Company ("DTC") will be made by or on behalf of
the Trustee by wire transfer in immediately available funds to an account
specified in the request of such Certificateholder. All distributions under the
Pooling and Servicing Agreement to Certificateholders will be made by wire
transfer in immediately available funds to the account specified by the
Certificateholder, at a bank or other entity having appropriate facilities
therefor, if such Certificateholder will have provided the Trustee with wiring
instructions no more than five business days after the related Record Date, or
otherwise by check mailed to such Certificateholder. Notwithstanding the above,
the final distribution on any Certificate will be made only upon presentation
and surrender of such Certificate at the location that will be specified in a
notice of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of
A-9-4
<PAGE>
the aggregate Certificate Principal Balance of the Certificates then
outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon the Certificate.
The Pooling and Servicing Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, the transfer of this Certificate is
registrable in the Certificate Register upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Certificate Registrar duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations will be issued to the designated transferee or
transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class
A-1 and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations
of $100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates
registered in the name of Cede & Co., as nominee of the DTC. No Certificate
Owner will be entitled to receive a Definitive Certificate representing such
interest, except under the limited circumstances described in the Pooling and
Servicing Agreement. The Residual Certificates will be issued in fully
registered, certificated form in minimum percentage interests of 10% and in
multiples of 10% in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trustee, the Fiscal
Agent, the Master Servicer, the Special Servicer, the Certificate Registrar nor
any such agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby
(other than the obligation of the Trustee to make payments to the
Certificateholders as set forth in Section 10.2 of the Pooling and Servicing
Agreement and other than the obligations in the nature of information or tax
reporting) shall terminate on the earliest of (i) the later of (A) the final
payment or other liquidation of the last Mortgage Loan remaining in the Trust
and (B) the disposition of all REO Property or (ii) the sale of the property
held by the Trust in accordance with Section 10.1(b) of the Pooling and
Servicing Agreement; provided that in no event shall the Trust continue beyond
the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James, living on the date hereof. The parties designated in
the Pooling and Servicing Agreement may exercise their option to purchase the
Mortgage Loans and any other property remaining in the Trust and cause the
termination of the Trust in accordance with the requirements set forth in the
Pooling and Servicing Agreement. Upon termination of the Trust and payment of
the Certificates and of all administrative expenses associated with the Trust,
any remaining assets of the Trust shall be distributed to the holders of the
Class R-I Certificates.
A-9-5
<PAGE>
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-9-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:
-----------------------------------
AUTHORIZED OFFICER
Dated:
A-9-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS H CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
BY:
------------------------------------
AUTHORIZED SIGNATORY
A-9-8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT . . . .Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.......................
common (State)
Additional abbreviations may also be used though not in the above
list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
- -------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------------------
- ------------------------------------------
-------------------------------------
- -------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- -------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- -------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the
within-named Trust, with full power of substitution in the premises.
Dated:
--------------------------- -------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of this Certificate in every
particular without alteration or
enlargement or any change whatever.
- ---------------------------------
SIGNATURE GUARANTEED The
signature must be
guaranteed by a
commercial bank or trust
company or by a member
firm of the New York
Stock Exchange or another
national securities
exchange. Notarized or
witnessed signatures are
not acceptable.
A-9-9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ____________ for the account of
____________________ account number ______________ or, if mailed by check, to
__________________________. Statements should be mailed to
______________________. This information is provided by assignee named above,
or ____________________________, as its agent.
A-9-10
<PAGE>
EXHIBIT A-10
[FORM OF CLASS J CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A)(1) TO A PERSON THAT THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE SECURITIES
ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION.
NOTWITHSTANDING THE ABOVE, THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, EXCEPT FOR
AN INSURANCE COMPANY INVESTING SOLELY ASSETS OF ITS GENERAL ACCOUNT, WHICH
SHALL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT THE PURCHASE AND
OWNERSHIP OF THIS CERTIFICATE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER ERISA AND SECTION 4975 OF THE CODE.
THIS CLASS J CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN OTHER
CLASSES OF CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THE PORTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THE CERTIFICATES EVIDENCED
BY THIS CERTIFICATE WILL BE DECREASED BY THE PORTION OF PRINCIPAL
DISTRIBUTIONS, REALIZED LOSSES AND CERTAIN EXPENSE LOSSES ON THE CERTIFICATES
ALLOCABLE TO THIS CLASS J CERTIFICATE. ACCORDINGLY, THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE LESS THAN THAT SET FORTH BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE PRINCIPAL
BALANCE BY INQUIRY OF THE TRUSTEE.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
A-10-1
<PAGE>
THIS CLASS J CERTIFICATE WAS ISSUED ON NOVEMBER 12, 1998 AND IS TREATED AS
HAVING BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX
PURPOSES. THE ISSUE PRICE OF THIS CERTIFICATE IS _______% OF THE ORIGINAL
PRINCIPAL AMOUNT OF THIS CERTIFICATE. ASSUMING THAT THIS CERTIFICATE PAYS IN
ACCORDANCE WITH PROJECTED CASH FLOWS BASED ON CERTAIN ASSUMPTIONS USED IN
PRICING THE CERTIFICATES AND THAT NONE OF THE STATED INTEREST IS TREATED AS
"QUALIFIED STATED INTEREST", THE FOLLOWING INFORMATION WOULD BE APPLICABLE: (I)
THE AMOUNT OF OID AS A PERCENTAGE OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS
CERTIFICATE WOULD BE APPROXIMATELY __________, (II) THE YIELD TO MATURITY OF
THIS CERTIFICATE FOR PURPOSES OF COMPUTING OID WOULD BE APPROXIMATELY _____%
PER ANNUM, COMPOUNDED MONTHLY, AND (III) THE TOTAL AMOUNT OF OID ALLOCABLE TO
THE INITIAL ACCRUAL PERIOD (NOVEMBER 12, 1998 TO DECEMBER 15, 1998) FOR
PURPOSES OF COMPUTING OID ON THIS CERTIFICATE AS A PERCENTAGE OF THE ORIGINAL
PRINCIPAL AMOUNT OF THIS CERTIFICATE WOULD BE APPROXIMATELY ____%. THE METHOD
USED TO CALCULATE THE YIELD TO MATURITY AND THE AMOUNT OF OID ALLOCABLE TO THE
INITIAL ACCRUAL PERIOD IS THE EXACT METHOD. THE ACTUAL YIELD TO MATURITY AND
OID ON THIS CERTIFICATE MAY DIFFER FROM THE PROJECTED AMOUNTS. THE PREPAYMENT
ASSUMPTION USED IN CALCULATING THE YIELD TO MATURITY IS 0% CPR AND THE PAYMENT
OF THE BALLOON PAYMENT ON THE HYPERAMORTIZATION DATE IN THE CASE OF THE
HYPERAMORTIZATION LOANS. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT THE ASSUMED RATE OR ANY OTHER RATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
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 HEREON 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.
A-10-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
INITIAL PASS-THROUGH RATE: 6.01% CERTIFICATE PRINCIPAL BALANCE OF
THIS CLASS J CERTIFICATE AS OF THE
CLOSING DATE $21,162,000
DATE OF POOLING & SERVICING AGREEMENT: MASTER SERVICER: GMAC COMMERCIAL
AS OF NOVEMBER 1, 1998 MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 INITIAL SPECIAL SERVICER: GMAC
COMMERCIAL MORTGAGE CORPORATION
CLOSING DATE: NOVEMBER 12, 1998 TRUSTEE: LASALLE NATIONAL BANK
FIRST DISTRIBUTION DATE: FISCAL AGENT: ABN AMRO BANK N.V.
DECEMBER 15, 1998
AGGREGATE CERTIFICATE PRINCIPAL CUSIP NO.
BALANCE OF THE CLASS J
CERTIFICATE AS OF THE CLOSING DATE: NO. 1
$21,162,000
CLASS J CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of
a pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class J Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of
the pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be
held in the Collection Account, the Distribution Account, the Insurance
Policies and any REO Properties. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Pooling and
Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing an interest in the Class of
Certificates specified on the face hereof equal to the quotient expressed as a
percentage obtained by dividing the Certificate Principal Balance of this
Certificate specified on the face hereof by the aggregate initial Certificate
Principal Balance of the Class J Certificates. The Certificates are designated
as the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2 and are issued in sixteen Classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will
evidence in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and
Servicing Agreement and reference is made to the Pooling and Servicing
Agreement for information with respect to the interests, rights, benefits,
A-10-3
<PAGE>
obligations, proceeds, and duties evidenced hereby and the rights, duties and
obligations of the Trustee. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which the
Certificateholder is bound.In the case of any conflict between terms specified
in this Certificate and terms specified in the Pooling and Servicing Agreement,
the terms of the Pooling and Servicing Agreement shall govern
Distributions of principal of and interest on this Certificate will be
made out of the Available Distribution Amount, to the extent and subject to the
limitations set forth in the Pooling and Servicing Agreement, on the 15th day
of each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (a "Distribution Date") commencing on the first Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"). All sums
distributable on this Certificate are payable in the coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
Interest on this Certificate will accrue (computed as if each year
consisted of 360 days and each month consisted of 30 days) during the Interest
Accrual Period relating to such Distribution Date at a Pass-Through Rate
calculated as specified in the Pooling and Servicing Agreement on the
Certificate Principal Balance of this Certificate immediately prior to each
Distribution Date. Principal and interest allocated to this Certificate on any
Distribution Date will be in an amount due to this Certificate's pro rata share
of the amount to be distributed on the Certificates of this Class as of such
Distribution Date, with a final distribution to be made upon retirement of this
Certificate as set forth in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed 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.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses
and interest shortfalls on the Mortgage Loans allocated to any Class of
Certificates will be allocated pro rata among the outstanding Certificates of
such Class.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth in the Pooling and Servicing Agreement. As provided in
the Pooling and Servicing Agreement, withdrawals from the Collection Account
shall be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of certain expenses
incurred with respect to the servicing of the Mortgage Loans and administration
of the Trust.
All distributions under the Pooling and Servicing Agreement to a
nominee of The Depository Trust Company ("DTC") will be made by or on behalf of
the Trustee by wire transfer in immediately available funds to an account
specified in the request of such Certificateholder. All distributions under the
Pooling and Servicing Agreement to Certificateholders will be made by wire
transfer in immediately available funds to the account specified by the
Certificateholder, at a bank or other entity having appropriate facilities
therefor, if such Certificateholder will have provided the Trustee with wiring
instructions no more than five business days after the related Record Date, or
otherwise by check mailed to such Certificateholder. Notwithstanding the above,
the final distribution on any Certificate will be made only upon presentation
and surrender of such Certificate at the location that will be specified in a
notice of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of
A-10-4
<PAGE>
the aggregate Certificate Principal Balance of the Certificates then
outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon the Certificate.
The Pooling and Servicing Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, the transfer of this Certificate is
registrable in the Certificate Register upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Certificate Registrar duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations will be issued to the designated transferee or
transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class
A-1 and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations
of $100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates
registered in the name of Cede & Co., as nominee of the DTC. No Certificate
Owner will be entitled to receive a Definitive Certificate representing such
interest, except under the limited circumstances described in the Pooling and
Servicing Agreement. The Residual Certificates will be issued in fully
registered, certificated form in minimum percentage interests of 10% and in
multiples of 10% in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trustee, the Fiscal
Agent, the Master Servicer, the Special Servicer, the Certificate Registrar nor
any such agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby
(other than the obligation of the Trustee to make payments to the
Certificateholders as set forth in Section 10.2 of the Pooling and Servicing
Agreement and other than the obligations in the nature of information or tax
reporting) shall terminate on the earliest of (i) the later of (A) the final
payment or other liquidation of the last Mortgage Loan remaining in the Trust
and (B) the disposition of all REO Property or (ii) the sale of the property
held by the Trust in accordance with Section 10.1(b) of the Pooling and
Servicing Agreement; provided that in no event shall the Trust continue beyond
the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James, living on the date hereof. The parties designated in
the Pooling and Servicing Agreement may exercise their option to purchase the
Mortgage Loans and any other property remaining in the Trust and cause the
termination of the Trust in accordance with the requirements set forth in the
Pooling and Servicing Agreement. Upon termination of the Trust and payment of
the Certificates and of all administrative expenses associated with the Trust,
any remaining assets of the Trust shall be distributed to the holders of the
Class R-I Certificates.
A-10-5
<PAGE>
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-10-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:
-----------------------------------
AUTHORIZED OFFICER
Dated:
A-10-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS J CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
BY:
-------------------------------------
AUTHORIZED SIGNATORY
A-10-8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT . . . .Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.......................
common (State)
Additional abbreviations may also be used though not in the above
list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
- -------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- -----------------------------------
- -----------------------------------
--------------------------------------------
- -------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- -------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- -------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the
within-named Trust, with full power of substitution in the premises.
Dated:
--------------------------- -------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of this Certificate in every
particular without alteration or
enlargement or any change whatever.
- ---------------------------------
SIGNATURE GUARANTEED The
signature must be
guaranteed by a
commercial bank or trust
company or by a member
firm of the New York
Stock Exchange or another
national securities
exchange. Notarized or
witnessed signatures are
not acceptable.
A-10-9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ____________ for the account of
___________________ account number ___________________ or, if mailed by check,
to __________________________. Statements should be mailed to
______________________. This information is provided by assignee named above,
or ____________________________, as its agent.
A-10-10
<PAGE>
EXHIBIT A-11
[FORM OF CLASS K CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A)(1) TO A PERSON THAT THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE SECURITIES
ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION.
NOTWITHSTANDING THE ABOVE, THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, EXCEPT FOR
AN INSURANCE COMPANY INVESTING SOLELY ASSETS OF ITS GENERAL ACCOUNT, WHICH
SHALL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT THE PURCHASE AND
OWNERSHIP OF THIS CERTIFICATE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER ERISA AND SECTION 4975 OF THE CODE.
THIS CLASS K CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN OTHER
CLASSES OF CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THE PORTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THE CERTIFICATES EVIDENCED
BY THIS CERTIFICATE WILL BE DECREASED BY THE PORTION OF PRINCIPAL
DISTRIBUTIONS, REALIZED LOSSES AND CERTAIN EXPENSE LOSSES ON THE CERTIFICATES
ALLOCABLE TO THIS CLASS K CERTIFICATE. ACCORDINGLY, THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE LESS THAN THAT SET FORTH BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE PRINCIPAL
BALANCE BY INQUIRY OF THE TRUSTEE.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
A-11-1
<PAGE>
THIS CLASS K CERTIFICATE WAS ISSUED ON NOVEMBER 12, 1998 AND IS TREATED AS
HAVING BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX
PURPOSES. THE ISSUE PRICE OF THIS CERTIFICATE IS _______% OF THE ORIGINAL
PRINCIPAL AMOUNT OF THIS CERTIFICATE. ASSUMING THAT THIS CERTIFICATE PAYS IN
ACCORDANCE WITH PROJECTED CASH FLOWS BASED ON CERTAIN ASSUMPTIONS USED IN
PRICING THE CERTIFICATES AND THAT NONE OF THE STATED INTEREST IS TREATED AS
"QUALIFIED STATED INTEREST", THE FOLLOWING INFORMATION WOULD BE APPLICABLE: (I)
THE AMOUNT OF OID AS A PERCENTAGE OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS
CERTIFICATE WOULD BE APPROXIMATELY __________, (II) THE YIELD TO MATURITY OF
THIS CERTIFICATE FOR PURPOSES OF COMPUTING OID WOULD BE APPROXIMATELY _____%
PER ANNUM, COMPOUNDED MONTHLY, AND (III) THE TOTAL AMOUNT OF OID ALLOCABLE TO
THE INITIAL ACCRUAL PERIOD (NOVEMBER 12, 1998 TO DECEMBER 15, 1998) FOR
PURPOSES OF COMPUTING OID ON THIS CERTIFICATE AS A PERCENTAGE OF THE ORIGINAL
PRINCIPAL AMOUNT OF THIS CERTIFICATE WOULD BE APPROXIMATELY ____%. THE METHOD
USED TO CALCULATE THE YIELD TO MATURITY AND THE AMOUNT OF OID ALLOCABLE TO THE
INITIAL ACCRUAL PERIOD IS THE EXACT METHOD. THE ACTUAL YIELD TO MATURITY AND
OID ON THIS CERTIFICATE MAY DIFFER FROM THE PROJECTED AMOUNTS. THE PREPAYMENT
ASSUMPTION USED IN CALCULATING THE YIELD TO MATURITY IS 0% CPR AND THE PAYMENT
OF THE BALLOON PAYMENT ON THE HYPERAMORTIZATION DATE IN THE CASE OF THE
HYPERAMORTIZATION LOANS. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT THE ASSUMED RATE OR ANY OTHER RATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
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 HEREON 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.
A-11-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
INITIAL PASS-THROUGH RATE: 6.01% CERTIFICATE PRINCIPAL BALANCE OF
THIS CLASS K CERTIFICATE AS OF THE
CLOSING DATE $10,582,000
DATE OF POOLING & SERVICING AGREEMENT: MASTER SERVICER: GMAC COMMERCIAL
AS OF NOVEMBER 1, 1998 MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 INITIAL SPECIAL SERVICER: GMAC
COMMERCIAL MORTGAGE CORPORATION
CLOSING DATE: NOVEMBER 12, 1998 TRUSTEE: LASALLE NATIONAL BANK
FIRST DISTRIBUTION DATE: FISCAL AGENT: ABN AMRO BANK N.V.
DECEMBER 15, 1998
AGGREGATE CERTIFICATE PRINCIPAL CUSIP NO.
BALANCE OF THE CLASS K
CERTIFICATE AS OF THE CLOSING DATE: NO. 1
$10,582,000
CLASS K CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of
a pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class K Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of
the pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be
held in the Collection Account, the Distribution Account, the Insurance
Policies and any REO Properties. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Pooling and
Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing an interest in the Class of
Certificates specified on the face hereof equal to the quotient expressed as a
percentage obtained by dividing the Certificate Principal Balance of this
Certificate specified on the face hereof by the aggregate initial Certificate
Principal Balance of the Class K Certificates. The Certificates are designated
as the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2 and are issued in sixteen Classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will
evidence in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and
Servicing Agreement and reference is made to the Pooling and Servicing
Agreement for information with respect to the interests, rights, benefits,
A-11-3
<PAGE>
obligations, proceeds, and duties evidenced hereby and the rights, duties and
obligations of the Trustee. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which the
Certificateholder is bound. In the case of any conflict between terms specified
in this Certificate and terms specified in the Pooling and Servicing Agreement,
the terms of the Pooling and Servicing Agreement shall govern.
Distributions of principal of and interest on this Certificate will be
made out of the Available Distribution Amount, to the extent and subject to the
limitations set forth in the Pooling and Servicing Agreement, on the 15th day
of each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (a "Distribution Date") commencing on the first Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"). All sums
distributable on this Certificate are payable in the coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
Interest on this Certificate will accrue (computed as if each year
consisted of 360 days and each month consisted of 30 days) during the Interest
Accrual Period relating to such Distribution Date at a Pass-Through Rate
calculated as specified in the Pooling and Servicing Agreement on the
Certificate Principal Balance of this Certificate immediately prior to each
Distribution Date. Principal and interest allocated to this Certificate on any
Distribution Date will be in an amount due to this Certificate's pro rata share
of the amount to be distributed on the Certificates of this Class as of such
Distribution Date, with a final distribution to be made upon retirement of this
Certificate as set forth in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed 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.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses
and interest shortfalls on the Mortgage Loans allocated to any Class of
Certificates will be allocated pro rata among the outstanding Certificates of
such Class.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth in the Pooling and Servicing Agreement. As provided in
the Pooling and Servicing Agreement, withdrawals from the Collection Account
shall be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of certain expenses
incurred with respect to the servicing of the Mortgage Loans and administration
of the Trust.
All distributions under the Pooling and Servicing Agreement to a
nominee of The Depository Trust Company ("DTC") will be made by or on behalf of
the Trustee by wire transfer in immediately available funds to an account
specified in the request of such Certificateholder. All distributions under the
Pooling and Servicing Agreement to Certificateholders will be made by wire
transfer in immediately available funds to the account specified by the
Certificateholder, at a bank or other entity having appropriate facilities
therefor, if such Certificateholder will have provided the Trustee with wiring
instructions no more than five business days after the related Record Date, or
otherwise by check mailed to such Certificateholder. Notwithstanding the above,
the final distribution on any Certificate will be made only upon presentation
and surrender of such Certificate at the location that will be specified in a
notice of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of
A-11-4
<PAGE>
the aggregate Certificate Principal Balance of the Certificates then
outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon the Certificate.
The Pooling and Servicing Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, the transfer of this Certificate is
registrable in the Certificate Register upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Certificate Registrar duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations will be issued to the designated transferee or
transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class
A-1 and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations
of $100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates
registered in the name of Cede & Co., as nominee of the DTC. No Certificate
Owner will be entitled to receive a Definitive Certificate representing such
interest, except under the limited circumstances described in the Pooling and
Servicing Agreement. The Residual Certificates will be issued in fully
registered, certificated form in minimum percentage interests of 10% and in
multiples of 10% in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trustee, the Fiscal
Agent, the Master Servicer, the Special Servicer, the Certificate Registrar nor
any such agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby
(other than the obligation of the Trustee to make payments to the
Certificateholders as set forth in Section 10.2 of the Pooling and Servicing
Agreement and other than the obligations in the nature of information or tax
reporting) shall terminate on the earliest of (i) the later of (A) the final
payment or other liquidation of the last Mortgage Loan remaining in the Trust
and (B) the disposition of all REO Property or (ii) the sale of the property
held by the Trust in accordance with Section 10.1(b) of the Pooling and
Servicing Agreement; provided that in no event shall the Trust continue beyond
the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James, living on the date hereof. The parties designated in
the Pooling and Servicing Agreement may exercise their option to purchase the
Mortgage Loans and any other property remaining in the Trust and cause the
termination of the Trust in accordance with the requirements set forth in the
Pooling and Servicing Agreement. Upon termination of the Trust and payment of
the Certificates and of all administrative expenses associated with the Trust,
any remaining assets of the Trust shall be distributed to the holders of the
Class R-I Certificates.
A-11-5
<PAGE>
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-11-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:
---------------------------------
AUTHORIZED OFFICER
Dated:
A-11-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS K CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
BY:
---------------------------------
AUTHORIZED SIGNATORY
A-11-8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT . . . .Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.......................
common (State)
Additional abbreviations may also be used though not in the above
list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------
- --------------------------------------
-----------------------------------------
- -------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- -------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- -------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the
within-named Trust, with full power of substitution in the premises.
Dated:
--------------------------- -------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of this Certificate in every
particular without alteration or
enlargement or any change whatever.
- ---------------------------------
SIGNATURE GUARANTEED The
signature must be
guaranteed by a
commercial bank or trust
company or by a member
firm of the New York
Stock Exchange or another
national securities
exchange. Notarized or
witnessed signatures are
not acceptable.
A-11-9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ____________ for the account of
_________________________________________ account number _____________________
or, if mailed by check, to __________________________. Statements should be
mailed to ______________________. This information is provided by assignee
named above, or ____________________________, as its agent.
A-11-10
<PAGE>
EXHIBIT A-12
[FORM OF CLASS L CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A)(1) TO A PERSON THAT THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE SECURITIES
ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION.
NOTWITHSTANDING THE ABOVE, THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, EXCEPT FOR
AN INSURANCE COMPANY INVESTING SOLELY ASSETS OF ITS GENERAL ACCOUNT, WHICH
SHALL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT THE PURCHASE AND
OWNERSHIP OF THIS CERTIFICATE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER ERISA AND SECTION 4975 OF THE CODE.
THIS CLASS L CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN OTHER
CLASSES OF CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THE PORTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THE CERTIFICATES EVIDENCED
BY THIS CERTIFICATE WILL BE DECREASED BY THE PORTION OF PRINCIPAL
DISTRIBUTIONS, REALIZED LOSSES AND CERTAIN EXPENSE LOSSES ON THE CERTIFICATES
ALLOCABLE TO THIS CLASS L CERTIFICATE. ACCORDINGLY, THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE LESS THAN THAT SET FORTH BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE PRINCIPAL
BALANCE BY INQUIRY OF THE TRUSTEE.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
A-12-1
<PAGE>
THIS CLASS L CERTIFICATE WAS ISSUED ON NOVEMBER 12, 1998 AND IS TREATED AS
HAVING BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX
PURPOSES. THE ISSUE PRICE OF THIS CERTIFICATE IS _______% OF THE ORIGINAL
PRINCIPAL AMOUNT OF THIS CERTIFICATE. ASSUMING THAT THIS CERTIFICATE PAYS IN
ACCORDANCE WITH PROJECTED CASH FLOWS BASED ON CERTAIN ASSUMPTIONS USED IN
PRICING THE CERTIFICATES AND THAT NONE OF THE STATED INTEREST IS TREATED AS
"QUALIFIED STATED INTEREST", THE FOLLOWING INFORMATION WOULD BE APPLICABLE: (I)
THE AMOUNT OF OID AS A PERCENTAGE OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS
CERTIFICATE WOULD BE APPROXIMATELY __________, (II) THE YIELD TO MATURITY OF
THIS CERTIFICATE FOR PURPOSES OF COMPUTING OID WOULD BE APPROXIMATELY _____%
PER ANNUM, COMPOUNDED MONTHLY, AND (III) THE TOTAL AMOUNT OF OID ALLOCABLE TO
THE INITIAL ACCRUAL PERIOD (NOVEMBER 12, 1998 TO DECEMBER 15, 1998) FOR
PURPOSES OF COMPUTING OID ON THIS CERTIFICATE AS A PERCENTAGE OF THE ORIGINAL
PRINCIPAL AMOUNT OF THIS CERTIFICATE WOULD BE APPROXIMATELY ____%. THE METHOD
USED TO CALCULATE THE YIELD TO MATURITY AND THE AMOUNT OF OID ALLOCABLE TO THE
INITIAL ACCRUAL PERIOD IS THE EXACT METHOD. THE ACTUAL YIELD TO MATURITY AND
OID ON THIS CERTIFICATE MAY DIFFER FROM THE PROJECTED AMOUNTS. THE PREPAYMENT
ASSUMPTION USED IN CALCULATING THE YIELD TO MATURITY IS 0% CPR AND THE PAYMENT
OF THE BALLOON PAYMENT ON THE HYPERAMORTIZATION DATE IN THE CASE OF THE
HYPERAMORTIZATION LOANS. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT THE ASSUMED RATE OR ANY OTHER RATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
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 HEREON 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.
A-12-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
INITIAL PASS-THROUGH RATE: 6.01% CERTIFICATE PRINCIPAL BALANCE OF
THIS CLASS L CERTIFICATE AS OF THE
CLOSING DATE $15,871,000
DATE OF POOLING & SERVICING AGREEMENT: MASTER SERVICER: GMAC COMMERCIAL
AS OF NOVEMBER 1, 1998 MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 INITIAL SPECIAL SERVICER: GMAC
COMMERCIAL MORTGAGE CORPORATION
CLOSING DATE: NOVEMBER 12, 1998 TRUSTEE: LASALLE NATIONAL BANK
FIRST DISTRIBUTION DATE: FISCAL AGENT: ABN AMRO BANK N.V.
DECEMBER 15, 1998
AGGREGATE CERTIFICATE PRINCIPAL CUSIP NO.
BALANCE OF THE CLASS L
CERTIFICATE AS OF THE CLOSING DATE: NO. 1
$15,871,000
CLASS L CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of
a pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class L Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of
the pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be
held in the Collection Account, the Distribution Account, the Insurance
Policies and any REO Properties. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Pooling and
Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing an interest in the Class of
Certificates specified on the face hereof equal to the quotient expressed as a
percentage obtained by dividing the Certificate Principal Balance of this
Certificate specified on the face hereof by the aggregate initial Certificate
Principal Balance of the Class L Certificates. The Certificates are designated
as the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2 and are issued in sixteen Classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will
evidence in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and
Servicing Agreement and reference is made to the Pooling and Servicing
Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby and the rights, duties and
obligations of the Trustee. This
A-12-3
<PAGE>
Certificate is issued under and is subject to the terms, provisions and
conditions of the Pooling and Servicing Agreement, to which Pooling and
Servicing Agreement, as amended from time to time, the Certificateholder by
virtue of the acceptance hereof assents and by which the Certificateholder is
bound. In the case of any conflict between terms specified in this Certificate
and terms specified in the Pooling and Servicing Agreement, the terms of the
Pooling and Servicing Agreement shall govern.
Distributions of principal of and interest on this Certificate will be
made out of the Available Distribution Amount, to the extent and subject to the
limitations set forth in the Pooling and Servicing Agreement, on the 15th day
of each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (a "Distribution Date") commencing on the first Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"). All sums
distributable on this Certificate are payable in the coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
Interest on this Certificate will accrue (computed as if each year
consisted of 360 days and each month consisted of 30 days) during the Interest
Accrual Period relating to such Distribution Date at a Pass-Through Rate
calculated as specified in the Pooling and Servicing Agreement on the
Certificate Principal Balance of this Certificate immediately prior to each
Distribution Date. Principal and interest allocated to this Certificate on any
Distribution Date will be in an amount due to this Certificate's pro rata share
of the amount to be distributed on the Certificates of this Class as of such
Distribution Date, with a final distribution to be made upon retirement of this
Certificate as set forth in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed 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.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses
and interest shortfalls on the Mortgage Loans allocated to any Class of
Certificates will be allocated pro rata among the outstanding Certificates of
such Class.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth in the Pooling and Servicing Agreement. As provided in
the Pooling and Servicing Agreement, withdrawals from the Collection Account
shall be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of certain expenses
incurred with respect to the servicing of the Mortgage Loans and administration
of the Trust.
All distributions under the Pooling and Servicing Agreement to a
nominee of The Depository Trust Company ("DTC") will be made by or on behalf of
the Trustee by wire transfer in immediately available funds to an account
specified in the request of such Certificateholder. All distributions under the
Pooling and Servicing Agreement to Certificateholders will be made by wire
transfer in immediately available funds to the account specified by the
Certificateholder, at a bank or other entity having appropriate facilities
therefor, if such Certificateholder will have provided the Trustee with wiring
instructions no more than five business days after the related Record Date, or
otherwise by check mailed to such Certificateholder. Notwithstanding the above,
the final distribution on any Certificate will be made only upon presentation
and surrender of such Certificate at the location that will be specified in a
notice of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of the aggregate Certificate Principal Balance of the Certificates
then outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such
A-12-4
<PAGE>
Holder and upon all future Holders of this Certificate and of any Certificate
issued upon the transfer hereof or in exchange herefor or in lieu hereof
whether or not notation of such consent is made upon the Certificate. The
Pooling and Servicing Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, the transfer of this Certificate is
registrable in the Certificate Register upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Certificate Registrar duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations will be issued to the designated transferee or
transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class
A-1 and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations
of $100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates
registered in the name of Cede & Co., as nominee of the DTC. No Certificate
Owner will be entitled to receive a Definitive Certificate representing such
interest, except under the limited circumstances described in the Pooling and
Servicing Agreement. The Residual Certificates will be issued in fully
registered, certificated form in minimum percentage interests of 10% and in
multiples of 10% in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trustee, the Fiscal
Agent, the Master Servicer, the Special Servicer, the Certificate Registrar nor
any such agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby
(other than the obligation of the Trustee to make payments to the
Certificateholders as set forth in Section 10.2 of the Pooling and Servicing
Agreement and other than the obligations in the nature of information or tax
reporting) shall terminate on the earliest of (i) the later of (A) the final
payment or other liquidation of the last Mortgage Loan remaining in the Trust
and (B) the disposition of all REO Property or (ii) the sale of the property
held by the Trust in accordance with Section 10.1(b) of the Pooling and
Servicing Agreement; provided that in no event shall the Trust continue beyond
the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James, living on the date hereof. The parties designated in
the Pooling and Servicing Agreement may exercise their option to purchase the
Mortgage Loans and any other property remaining in the Trust and cause the
termination of the Trust in accordance with the requirements set forth in the
Pooling and Servicing Agreement. Upon termination of the Trust and payment of
the Certificates and of all administrative expenses associated with the Trust,
any remaining assets of the Trust shall be distributed to the holders of the
Class R-I Certificates.
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
A-12-5
<PAGE>
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-12-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:
-------------------------------
AUTHORIZED OFFICER
Dated:
A-12-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS L CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
BY:
--------------------------------
AUTHORIZED SIGNATORY
A-12-8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT . . . .Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.......................
common (State)
Additional abbreviations may also be used though not in the above
list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
- -------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ---------------------------------------
- ---------------------------------------
----------------------------------------
- -------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- -------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- -------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the
within-named Trust, with full power of substitution in the premises.
Dated:
--------------------------- -------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of this Certificate in every
particular without alteration or
enlargement or any change whatever.
- ---------------------------------
SIGNATURE GUARANTEED The
signature must be
guaranteed by a
commercial bank or trust
company or by a member
firm of the New York
Stock Exchange or another
national securities
exchange. Notarized or
witnessed signatures are
not acceptable.
A-12-9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ____________ for the account of
_________________________________________ account number _____________________
or, if mailed by check, to __________________________. Statements should be
mailed to ______________________. This information is provided by assignee
named above, or ____________________________, as its agent.
A-12-10
<PAGE>
EXHIBIT A-13
[FORM OF CLASS M CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A)(1) TO A PERSON THAT THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE SECURITIES
ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION.
NOTWITHSTANDING THE ABOVE, THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, EXCEPT FOR
AN INSURANCE COMPANY INVESTING SOLELY ASSETS OF ITS GENERAL ACCOUNT, WHICH
SHALL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT THE PURCHASE AND
OWNERSHIP OF THIS CERTIFICATE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER ERISA AND SECTION 4975 OF THE CODE.
THIS CLASS M CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN OTHER
CLASSES OF CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THE PORTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THE CERTIFICATES EVIDENCED
BY THIS CERTIFICATE WILL BE DECREASED BY THE PORTION OF PRINCIPAL
DISTRIBUTIONS, REALIZED LOSSES AND CERTAIN EXPENSE LOSSES ON THE CERTIFICATES
ALLOCABLE TO THIS CLASS M CERTIFICATE. ACCORDINGLY, THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE LESS THAN THAT SET FORTH BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE PRINCIPAL
BALANCE BY INQUIRY OF THE TRUSTEE.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
A-13-1
<PAGE>
THIS CLASS M CERTIFICATE WAS ISSUED ON NOVEMBER 12, 1998 AND IS TREATED AS
HAVING BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX
PURPOSES. THE ISSUE PRICE OF THIS CERTIFICATE IS _______% OF THE ORIGINAL
PRINCIPAL AMOUNT OF THIS CERTIFICATE. ASSUMING THAT THIS CERTIFICATE PAYS IN
ACCORDANCE WITH PROJECTED CASH FLOWS BASED ON CERTAIN ASSUMPTIONS USED IN
PRICING THE CERTIFICATES AND THAT NONE OF THE STATED INTEREST IS TREATED AS
"QUALIFIED STATED INTEREST", THE FOLLOWING INFORMATION WOULD BE APPLICABLE: (I)
THE AMOUNT OF OID AS A PERCENTAGE OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS
CERTIFICATE WOULD BE APPROXIMATELY __________, (II) THE YIELD TO MATURITY OF
THIS CERTIFICATE FOR PURPOSES OF COMPUTING OID WOULD BE APPROXIMATELY _____%
PER ANNUM, COMPOUNDED MONTHLY, AND (III) THE TOTAL AMOUNT OF OID ALLOCABLE TO
THE INITIAL ACCRUAL PERIOD (NOVEMBER 12, 1998 TO DECEMBER 15, 1998) FOR
PURPOSES OF COMPUTING OID ON THIS CERTIFICATE AS A PERCENTAGE OF THE ORIGINAL
PRINCIPAL AMOUNT OF THIS CERTIFICATE WOULD BE APPROXIMATELY ____%. THE METHOD
USED TO CALCULATE THE YIELD TO MATURITY AND THE AMOUNT OF OID ALLOCABLE TO THE
INITIAL ACCRUAL PERIOD IS THE EXACT METHOD. THE ACTUAL YIELD TO MATURITY AND
OID ON THIS CERTIFICATE MAY DIFFER FROM THE PROJECTED AMOUNTS. THE PREPAYMENT
ASSUMPTION USED IN CALCULATING THE YIELD TO MATURITY IS 0% CPR AND THE PAYMENT
OF THE BALLOON PAYMENT ON THE HYPERAMORTIZATION DATE IN THE CASE OF THE
HYPERAMORTIZATION LOANS. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT THE ASSUMED RATE OR ANY OTHER RATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
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 HEREON 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.
A-13-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
INITIAL PASS-THROUGH RATE: 6.01% CERTIFICATE PRINCIPAL BALANCE OF
THIS CLASS L CERTIFICATE AS OF THE
CLOSING DATE $10,581,000
DATE OF POOLING & SERVICING AGREEMENT: MASTER SERVICER: GMAC COMMERCIAL
AS OF NOVEMBER 1, 1998 MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 INITIAL SPECIAL SERVICER: GMAC
COMMERCIAL MORTGAGE CORPORATION
CLOSING DATE: NOVEMBER 12, 1998 TRUSTEE: LASALLE NATIONAL BANK
FIRST DISTRIBUTION DATE: FISCAL AGENT: ABN AMRO BANK N.V.
DECEMBER 15, 1998
AGGREGATE CERTIFICATE PRINCIPAL CUSIP NO.
BALANCE OF THE CLASS L
CERTIFICATE AS OF THE CLOSING DATE: NO. 1
$10,581,000
CLASS M CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of
a pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class M Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of
the pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be
held in the Collection Account, the Distribution Account, the Insurance
Policies and any REO Properties. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Pooling and
Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing an interest in the Class of
Certificates specified on the face hereof equal to the quotient expressed as a
percentage obtained by dividing the Certificate Principal Balance of this
Certificate specified on the face hereof by the aggregate initial Certificate
Principal Balance of the Class M Certificates. The Certificates are designated
as the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2 and are issued in sixteen Classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will
evidence in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and
Servicing Agreement and reference is made to the Pooling and Servicing
Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby and the rights, duties and
obligations of the Trustee. This
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Certificate is issued under and is subject to the terms, provisions and
conditions of the Pooling and Servicing Agreement, to which Pooling and
Servicing Agreement, as amended from time to time, the Certificateholder by
virtue of the acceptance hereof assents and by which the Certificateholder is
bound. In the case of any conflict between terms specified in this Certificate
and terms specified in the Pooling and Servicing Agreement, the terms of the
Pooling and Servicing Agreement shall govern.
Distributions of principal of and interest on this Certificate will be
made out of the Available Distribution Amount, to the extent and subject to the
limitations set forth in the Pooling and Servicing Agreement, on the 15th day
of each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (a "Distribution Date") commencing on the first Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"). All sums
distributable on this Certificate are payable in the coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
Interest on this Certificate will accrue (computed as if each year
consisted of 360 days and each month consisted of 30 days) during the Interest
Accrual Period relating to such Distribution Date at a Pass-Through Rate
calculated as specified in the Pooling and Servicing Agreement on the
Certificate Principal Balance of this Certificate immediately prior to each
Distribution Date. Principal and interest allocated to this Certificate on any
Distribution Date will be in an amount due to this Certificate's pro rata share
of the amount to be distributed on the Certificates of this Class as of such
Distribution Date, with a final distribution to be made upon retirement of this
Certificate as set forth in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed 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.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses
and interest shortfalls on the Mortgage Loans allocated to any Class of
Certificates will be allocated pro rata among the outstanding Certificates of
such Class.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth in the Pooling and Servicing Agreement. As provided in
the Pooling and Servicing Agreement, withdrawals from the Collection Account
shall be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of certain expenses
incurred with respect to the servicing of the Mortgage Loans and administration
of the Trust.
All distributions under the Pooling and Servicing Agreement to a
nominee of The Depository Trust Company ("DTC") will be made by or on behalf of
the Trustee by wire transfer in immediately available funds to an account
specified in the request of such Certificateholder. All distributions under the
Pooling and Servicing Agreement to Certificateholders will be made by wire
transfer in immediately available funds to the account specified by the
Certificateholder, at a bank or other entity having appropriate facilities
therefor, if such Certificateholder will have provided the Trustee with wiring
instructions no more than five business days after the related Record Date, or
otherwise by check mailed to such Certificateholder. Notwithstanding the above,
the final distribution on any Certificate will be made only upon presentation
and surrender of such Certificate at the location that will be specified in a
notice of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of the aggregate Certificate Principal Balance of the Certificates
then outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such
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Holder and upon all future Holders of this Certificate and of any Certificate
issued upon the transfer hereof or in exchange herefor or in lieu hereof
whether or not notation of such consent is made upon the Certificate. The
Pooling and Servicing Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, the transfer of this Certificate is
registrable in the Certificate Register upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Certificate Registrar duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations will be issued to the designated transferee or
transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class
A-1 and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations
of $100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates
registered in the name of Cede & Co., as nominee of the DTC. No Certificate
Owner will be entitled to receive a Definitive Certificate representing such
interest, except under the limited circumstances described in the Pooling and
Servicing Agreement. The Residual Certificates will be issued in fully
registered, certificated form in minimum percentage interests of 10% and in
multiples of 10% in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trustee, the Fiscal
Agent, the Master Servicer, the Special Servicer, the Certificate Registrar nor
any such agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby
(other than the obligation of the Trustee to make payments to the
Certificateholders as set forth in Section 10.2 of the Pooling and Servicing
Agreement and other than the obligations in the nature of information or tax
reporting) shall terminate on the earliest of (i) the later of (A) the final
payment or other liquidation of the last Mortgage Loan remaining in the Trust
and (B) the disposition of all REO Property or (ii) the sale of the property
held by the Trust in accordance with Section 10.1(b) of the Pooling and
Servicing Agreement; provided that in no event shall the Trust continue beyond
the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James, living on the date hereof. The parties designated in
the Pooling and Servicing Agreement may exercise their option to purchase the
Mortgage Loans and any other property remaining in the Trust and cause the
termination of the Trust in accordance with the requirements set forth in the
Pooling and Servicing Agreement. Upon termination of the Trust and payment of
the Certificates and of all administrative expenses associated with the Trust,
any remaining assets of the Trust shall be distributed to the holders of the
Class R-I Certificates.
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
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THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
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<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:
----------------------------------
AUTHORIZED OFFICER
Dated:
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<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS M CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
BY:
----------------------------------
AUTHORIZED SIGNATORY
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<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT . . . .Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.......................
common (State)
Additional abbreviations may also be used though not in the above
list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
- -------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ----------------------------------
- ----------------------------------
---------------------------------------------
- -------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- -------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- -------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the
within-named Trust, with full power of substitution in the premises.
Dated:
--------------------------- -------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of this Certificate in every
particular without alteration or
enlargement or any change whatever.
- ---------------------------------
SIGNATURE GUARANTEED The
signature must be
guaranteed by a
commercial bank or trust
company or by a member
firm of the New York
Stock Exchange or another
national securities
exchange. Notarized or
witnessed signatures are
not acceptable.
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<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ____________ for the account of
_________________________________________ account number _____________________
or, if mailed by check, to __________________________. Statements should be
mailed to ______________________. This information is provided by assignee
named above, or ____________________________, as its agent.
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<PAGE>
EXHIBIT A-14
[FORM OF CLASS N CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A)(1) TO A PERSON THAT THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE SECURITIES
ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION.
NOTWITHSTANDING THE ABOVE, THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, EXCEPT FOR
AN INSURANCE COMPANY INVESTING SOLELY ASSETS OF ITS GENERAL ACCOUNT, WHICH
SHALL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT THE PURCHASE AND
OWNERSHIP OF THIS CERTIFICATE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER ERISA AND SECTION 4975 OF THE CODE.
THIS CLASS N CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN OTHER
CLASSES OF CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THE PORTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THE CERTIFICATES EVIDENCED
BY THIS CERTIFICATE WILL BE DECREASED BY THE PORTION OF PRINCIPAL
DISTRIBUTIONS, REALIZED LOSSES AND CERTAIN EXPENSE LOSSES ON THE CERTIFICATES
ALLOCABLE TO THIS CLASS N CERTIFICATE. ACCORDINGLY, THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE LESS THAN THAT SET FORTH BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE PRINCIPAL
BALANCE BY INQUIRY OF THE TRUSTEE.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
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<PAGE>
THIS CLASS N CERTIFICATE WAS ISSUED ON NOVEMBER 12, 1998 AND TO THE EXTENT IT
CONSTITUTES A REMIC REGULAR INTEREST, IT IS TREATED AS HAVING BEEN ISSUED WITH
ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX PURPOSES. THE ISSUE
PRICE OF THIS CERTIFICATE ALLOCATED BY THE DEPOSITOR TO THE REMIC REGULAR
INTEREST IS _______% OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS CERTIFICATE.
ASSUMING THAT THIS CERTIFICATE PAYS IN ACCORDANCE WITH PROJECTED CASH FLOWS
BASED ON CERTAIN ASSUMPTIONS USED IN PRICING THE CERTIFICATES AND THAT NONE OF
THE STATED INTEREST IS TREATED AS "QUALIFIED STATED INTEREST", THE FOLLOWING
INFORMATION WOULD BE APPLICABLE: (I) THE AMOUNT OF OID AS A PERCENTAGE OF THE
ORIGINAL PRINCIPAL AMOUNT OF THIS CERTIFICATE WOULD BE APPROXIMATELY
__________, (II) THE YIELD TO MATURITY OF THIS CERTIFICATE FOR PURPOSES OF
COMPUTING OID WOULD BE APPROXIMATELY _____% PER ANNUM, COMPOUNDED MONTHLY, AND
(III) THE TOTAL AMOUNT OF OID ALLOCABLE TO THE INITIAL ACCRUAL PERIOD (NOVEMBER
12, 1998 TO DECEMBER 15, 1998) FOR PURPOSES OF COMPUTING OID ON THIS
CERTIFICATE AS A PERCENTAGE OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS
CERTIFICATE WOULD BE APPROXIMATELY ____%. THE METHOD USED TO CALCULATE THE
YIELD TO MATURITY AND THE AMOUNT OF OID ALLOCABLE TO THE INITIAL ACCRUAL PERIOD
IS THE EXACT METHOD. THE ACTUAL YIELD TO MATURITY AND OID ON THIS CERTIFICATE
MAY DIFFER FROM THE PROJECTED AMOUNTS. THE PREPAYMENT ASSUMPTION USED IN
CALCULATING THE YIELD TO MATURITY IS 0% CPR AND THE PAYMENT OF THE BALLOON
PAYMENT ON THE HYPERAMORTIZATION DATE IN THE CASE OF THE HYPERAMORTIZATION
LOANS. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY AT THE
ASSUMED RATE OR ANY OTHER RATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
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 HEREON 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.
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<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
INITIAL PASS-THROUGH RATE: 6.01% CERTIFICATE PRINCIPAL BALANCE OF
THIS CLASS L CERTIFICATE AS OF THE
CLOSING DATE $10,581,000
DATE OF POOLING & SERVICING AGREEMENT: MASTER SERVICER: GMAC COMMERCIAL
AS OF NOVEMBER 1, 1998 MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 INITIAL SPECIAL SERVICER: GMAC
COMMERCIAL MORTGAGE CORPORATION
CLOSING DATE: NOVEMBER 12, 1998 TRUSTEE: LASALLE NATIONAL BANK
FIRST DISTRIBUTION DATE: FISCAL AGENT: ABN AMRO BANK N.V.
DECEMBER 15, 1998
AGGREGATE CERTIFICATE PRINCIPAL CUSIP NO.
BALANCE OF THE CLASS L
CERTIFICATE AS OF THE CLOSING DATE: NO. 1
$10,581,000
CLASS N CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of
a pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class N Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of
the pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be
held in the Collection Account, the Distribution Account, the Insurance
Policies and any REO Properties. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Pooling and
Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing an interest in the Class of
Certificates specified on the face hereof equal to the quotient expressed as a
percentage obtained by dividing the Certificate Principal Balance of this
Certificate specified on the face hereof by the aggregate initial Certificate
Principal Balance of the Class N Certificates. The Certificates are designated
as the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2 and are issued in sixteen Classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will
evidence in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and
Servicing Agreement and reference is made to the Pooling and Servicing
Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby and the rights, duties and
obligations of the Trustee. This
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<PAGE>
Certificate is issued under and is subject to the terms, provisions and
conditions of the Pooling and Servicing Agreement, to which Pooling and
Servicing Agreement, as amended from time to time, the Certificateholder by
virtue of the acceptance hereof assents and by which the Certificateholder is
bound. In the case of any conflict between terms specified in this Certificate
and terms specified in the Pooling and Servicing Agreement, the terms of the
Pooling and Servicing Agreement shall govern.
Distributions of principal of and interest on this Certificate will be
made out of the Available Distribution Amount, to the extent and subject to the
limitations set forth in the Pooling and Servicing Agreement, on the 15th day
of each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (a "Distribution Date") commencing on the first Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"). All sums
distributable on this Certificate are payable in the coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
Interest on this Certificate will accrue (computed as if each year
consisted of 360 days and each month consisted of 30 days) during the Interest
Accrual Period relating to such Distribution Date at a Pass-Through Rate
calculated as specified in the Pooling and Servicing Agreement on the
Certificate Principal Balance of this Certificate immediately prior to each
Distribution Date. Principal and interest allocated to this Certificate on any
Distribution Date will be in an amount due to this Certificate's pro rata share
of the amount to be distributed on the Certificates of this Class as of such
Distribution Date, with a final distribution to be made upon retirement of this
Certificate as set forth in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed 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.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses
and interest shortfalls on the Mortgage Loans allocated to any Class of
Certificates will be allocated pro rata among the outstanding Certificates of
such Class.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth in the Pooling and Servicing Agreement. As provided in
the Pooling and Servicing Agreement, withdrawals from the Collection Account
shall be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of certain expenses
incurred with respect to the servicing of the Mortgage Loans and administration
of the Trust.
All distributions under the Pooling and Servicing Agreement to a
nominee of The Depository Trust Company ("DTC") will be made by or on behalf of
the Trustee by wire transfer in immediately available funds to an account
specified in the request of such Certificateholder. All distributions under the
Pooling and Servicing Agreement to Certificateholders will be made by wire
transfer in immediately available funds to the account specified by the
Certificateholder, at a bank or other entity having appropriate facilities
therefor, if such Certificateholder will have provided the Trustee with wiring
instructions no more than five business days after the related Record Date, or
otherwise by check mailed to such Certificateholder. Notwithstanding the above,
the final distribution on any Certificate will be made only upon presentation
and surrender of such Certificate at the location that will be specified in a
notice of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of the aggregate Certificate Principal Balance of the Certificates
then outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such
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<PAGE>
Holder and upon all future Holders of this Certificate and of any Certificate
issued upon the transfer hereof or in exchange herefor or in lieu hereof
whether or not notation of such consent is made upon the Certificate. The
Pooling and Servicing Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, the transfer of this Certificate is
registrable in the Certificate Register upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Certificate Registrar duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations will be issued to the designated transferee or
transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class
A-1 and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations
of $100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates
registered in the name of Cede & Co., as nominee of the DTC. No Certificate
Owner will be entitled to receive a Definitive Certificate representing such
interest, except under the limited circumstances described in the Pooling and
Servicing Agreement. The Residual Certificates will be issued in fully
registered, certificated form in minimum percentage interests of 10% and in
multiples of 10% in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trustee, the Fiscal
Agent, the Master Servicer, the Special Servicer, the Certificate Registrar nor
any such agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby
(other than the obligation of the Trustee to make payments to the
Certificateholders as set forth in Section 10.2 of the Pooling and Servicing
Agreement and other than the obligations in the nature of information or tax
reporting) shall terminate on the earliest of (i) the later of (A) the final
payment or other liquidation of the last Mortgage Loan remaining in the Trust
and (B) the disposition of all REO Property or (ii) the sale of the property
held by the Trust in accordance with Section 10.1(b) of the Pooling and
Servicing Agreement; provided that in no event shall the Trust continue beyond
the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James, living on the date hereof. The parties designated in
the Pooling and Servicing Agreement may exercise their option to purchase the
Mortgage Loans and any other property remaining in the Trust and cause the
termination of the Trust in accordance with the requirements set forth in the
Pooling and Servicing Agreement. Upon termination of the Trust and payment of
the Certificates and of all administrative expenses associated with the Trust,
any remaining assets of the Trust shall be distributed to the holders of the
Class R-I Certificates.
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
A-14-5
<PAGE>
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-14-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:
----------------------------------
AUTHORIZED OFFICER
Dated:
A-14-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS N CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
BY:
----------------------------------
AUTHORIZED SIGNATORY
A-14-8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT . . . .Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.......................
common (State)
Additional abbreviations may also be used though not in the above
list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
- -------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------
- --------------------------------------
-----------------------------------------
- -------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- -------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- -------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the
within-named Trust, with full power of substitution in the premises.
Dated:
--------------------------- -------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of this Certificate in every
particular without alteration or
enlargement or any change whatever.
- ---------------------------------
SIGNATURE GUARANTEED The
signature must be
guaranteed by a
commercial bank or trust
company or by a member
firm of the New York
Stock Exchange or another
national securities
exchange. Notarized or
witnessed signatures are
not acceptable.
A-14-9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ____________ for the account of
_________________________________________ account number _____________________
or, if mailed by check, to __________________________. Statements should be
mailed to ______________________. This information is provided by assignee
named above, or ____________________________, as its agent.
A-14-10
<PAGE>
EXHIBIT A-15
[FORM OF CLASS R-I CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A)(1) TO A PERSON THAT THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE SECURITIES
ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS THE
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE"). THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A
NON-UNITED STATES PERSON.
THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED TO
"DISQUALIFIED ORGANIZATIONS" WITHIN THE MEANING OF THE CODE.
A SALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS R-I CERTIFICATE MAY BE MADE
ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE TRUSTEE TO
THE EFFECT THAT (1) SUCH TRANSFEREE AGREES TO BE BOUND BY THE TERMS OF THE
POOLING AND SERVICING AGREEMENT AND ALL RESTRICTIONS SET FORTH ON THE FACE
HEREOF, (2) SUCH TRANSFEREE IS NOT (A) THE UNITED STATES, ANY STATE OR
POLITICAL SUBDIVISION THEREOF OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE
FOREGOING (OTHER THAN AN INSTRUMENTALITY WHICH IS A CORPORATION IF ALL OF ITS
ACTIVITIES ARE SUBJECT TO TAX AND, EXCEPT FOR FHLMC, A MAJORITY ITS BOARD OF
DIRECTORS IS NOT SELECTED BY ANY SUCH GOVERNMENTAL UNIT), (B) AN ORGANIZATION
(OTHER THAN CERTAIN FARMERS' COOPERATIVES DESCRIBED IN SECTION 521 OF THE CODE)
WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE (UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE ON
UNRELATED BUSINESS TAXABLE INCOME), (C) A RURAL ELECTRIC OR TELEPHONE
COOPERATIVE DESCRIBED IN SECTION 1381 OF THE CODE (ANY SUCH PERSON DESCRIBED IN
THE FOREGOING CLAUSES (A), (B) OR (C) BEING HEREINAFTER REFERRED TO AS A
"DISQUALIFIED ORGANIZATION"), (D) A PERSON THAT IS NOT A CITIZEN OF OR RESIDENT
OF THE UNITED STATES, A CORPORATION, PARTNERSHIP OR OTHER ENTITY CREATED OR
ORGANIZED IN, OR UNDER THE LAWS OF, THE UNITED STATES OR ANY POLITICAL
SUBDIVISION THEREOF, OR AN ESTATE WHOSE
A-15-1
<PAGE>
INCOME FROM SOURCES WITHOUT THE UNITED STATES IS INCLUDABLE IN GROSS INCOME FOR
UNITED STATES FEDERAL INCOME TAX PURPOSES REGARDLESS OF ITS CONNECTION WITH THE
CONDUCT OF TRADE OR BUSINESS IN THE UNITED STATES OR A TRUST SUBJECT TO THE
CONTROL OF A UNITED STATES FIDUCIARY AND THE PRIMARY SUPERVISION OF A UNITED
STATES COURT (ANY SUCH PERSON BEING HEREINAFTER REFERRED TO AS A "UNITED STATES
PERSON") OR (E) AN AGENT OF A DISQUALIFIED ORGANIZATION OR A NONUNITED STATES
PERSON, AND (3) NO PURPOSE OF SUCH TRANSFER IS TO ENABLE THE TRANSFEROR TO
IMPEDE THE ASSESSMENT OR COLLECTION OF TAX. NOTWITHSTANDING THE REGISTRATION IN
THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS
CLASS R-I CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR A NONUNITED STATES
PERSON OR AN AGENT OF A DISQUALIFIED ORGANIZATION OR A NON-UNITED STATES
PERSON, OR TO ANY OTHER PROHIBITED TRANSFEREE AS PROVIDED IN THE POOLING AND
SERVICING AGREEMENT, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE
OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A
CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE
RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF A CLASS R-I
CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED
TO THE PROVISIONS OF THIS PARAGRAPH.
A-15-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
PERCENTAGE INTEREST OF THIS CLASS MASTER SERVICER: GMAC COMMERCIAL
R-I CERTIFICATE: _____% MORTGAGE CORPORATION
DATE OF POOLING & SERVICING AGREEMENT: INITIAL SPECIAL SERVICER: GMAC
AS OF NOVEMBER 1, 1998 COMMERCIAL MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 TRUSTEE: LASALLE NATIONAL BANK
CLOSING DATE: NOVEMBER 12, 1998 FISCAL AGENT: ABN AMRO BANK N.V.
FIRST DISTRIBUTION DATE:
DECEMBER 15, 1998
NO. _________
CLASS R-I CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of
a pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class R-I Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of
the pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be
held in the Collection Account, the Distribution Account, the Insurance
Policies and any REO Properties. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Pooling and
Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing the Percentage Interest in the
Class R-I Certificates specified on the face hereof. The Certificates are
designated as the Morgan Stanley Capital I Inc., Commercial Mortgage
Pass-Through Certificates, Series 1998-HF2 and are issued in sixteen Classes as
specifically set forth in the Pooling and Servicing Agreement. The Certificates
will evidence in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and
Servicing Agreement and reference is made to the Pooling and Servicing
Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby and the rights, duties and
obligations of the Trustee. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which the
Certificateholder is bound. In the case of any conflict between terms specified
in this Certificate and terms specified in the Pooling and Servicing Agreement,
the terms of the Pooling and Servicing Agreement shall govern.
A-15-3
<PAGE>
The Holder of this Certificate shall be entitled to receive only
certain amounts set forth in the Pooling and Servicing Agreement, including a
distribution upon termination of the Pooling and Servicing Agreement and the
related REMIC created thereby of the amounts which remain on deposit in the
Distribution Account after payment to the Holders of all other Certificates of
all amounts set forth in the Pooling and Servicing Agreement. Distributions on
this Certificate will be made out of the Available Distribution Amount, to the
extent and subject to the limitations set forth in the Pooling and Servicing
Agreement, on the 15th day of each month or, if such 15th day is not a Business
Day, the next succeeding Business Day (a "Distribution Date") commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (the "Record
Date"). All sums distributable on this Certificate are payable in the coin or
currency of the United States of America as at the time of payment is legal
tender for the payment of public and private debts.
Unless the certificate of authentication hereon has been executed 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.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses
and interest shortfalls on the Mortgage Loans allocated to any Class of
Certificates will be allocated pro rata among the outstanding Certificates of
such Class.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth in the Pooling and Servicing Agreement. As provided in
the Pooling and Servicing Agreement, withdrawals from the Collection Account
shall be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of certain expenses
incurred with respect to the servicing of the Mortgage Loans and administration
of the Trust.
All distributions under the Pooling and Servicing Agreement to a
nominee of The Depository Trust Company ("DTC") will be made by or on behalf of
the Trustee by wire transfer in immediately available funds to an account
specified in the request of such Certificateholder. All distributions under the
Pooling and Servicing Agreement to Certificateholders will be made by wire
transfer in immediately available funds to the account specified by the
Certificateholder, at a bank or other entity having appropriate facilities
therefor, if such Certificateholder will have provided the Trustee with wiring
instructions no more than five business days after the related Record Date, or
otherwise by check mailed to such Certificateholder. Notwithstanding the above,
the final distribution on any Certificate will be made only upon presentation
and surrender of such Certificate at the location that will be specified in a
notice of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of the aggregate Certificate Principal Balance of the Certificates
then outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon the Certificate.
The Pooling and Servicing Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, the transfer of this Certificate is
registrable in the Certificate Register upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Certificate Registrar duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon
A-15-4
<PAGE>
one or more new Certificates of the same Class in authorized denominations will
be issued to the designated transferee or transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class
A-1 and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations
of $100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates
registered in the name of Cede & Co., as nominee of the DTC. No Certificate
Owner will be entitled to receive a Definitive Certificate representing such
interest, except under the limited circumstances described in the Pooling and
Servicing Agreement. The Residual Certificates will be issued in fully
registered, certificated form in minimum percentage interests of 10% and in
multiples of 10% in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trustee, the Fiscal
Agent, the Master Servicer, the Special Servicer, the Certificate Registrar nor
any such agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby
(other than the obligation of the Trustee to make payments to the
Certificateholders as set forth in Section 10.2 of the Pooling and Servicing
Agreement and other than the obligations in the nature of information or tax
reporting) shall terminate on the earliest of (i) the later of (A) the final
payment or other liquidation of the last Mortgage Loan remaining in the Trust
and (B) the disposition of all REO Property or (ii) the sale of the property
held by the Trust in accordance with Section 10.1(b) of the Pooling and
Servicing Agreement; provided that in no event shall the Trust continue beyond
the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James, living on the date hereof. The parties designated in
the Pooling and Servicing Agreement may exercise their option to purchase the
Mortgage Loans and any other property remaining in the Trust and cause the
termination of the Trust in accordance with the requirements set forth in the
Pooling and Servicing Agreement. Upon termination of the Trust and payment of
the Certificates and of all administrative expenses associated with the Trust,
any remaining assets of the Trust shall be distributed to the holders of the
Class R-I Certificates.
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-15-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:
-----------------------------------
AUTHORIZED OFFICER
Dated:
A-15-6
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS R-I CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
BY:
---------------------------------
AUTHORIZED SIGNATORY
A-15-7
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT . . . .Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.......................
common (State)
Additional abbreviations may also be used though not in the above
list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
- -------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------
- --------------------------------------
-----------------------------------------
- -------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- -------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- -------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the
within-named Trust, with full power of substitution in the premises.
Dated:
--------------------------- -------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of this Certificate in every
particular without alteration or
enlargement or any change whatever.
- ---------------------------------
SIGNATURE GUARANTEED The
signature must be
guaranteed by a
commercial bank or trust
company or by a member
firm of the New York
Stock Exchange or another
national securities
exchange. Notarized or
witnessed signatures are
not acceptable.
A-15-8
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ____________ for the account of
_________________________________________ account number _____________________
or, if mailed by check, to __________________________. Statements should be
mailed to ______________________. This information is provided by assignee
named above, or ____________________________, as its agent.
A-15-9
<PAGE>
EXHIBIT A-16
[FORM OF CLASS R-II CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A)(1) TO A PERSON THAT THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE SECURITIES
ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS THE
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE"). THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A
NON-UNITED STATES PERSON.
THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED TO
"DISQUALIFIED ORGANIZATIONS" WITHIN THE MEANING OF THE CODE.
A SALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS R-II CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE
TRUSTEE TO THE EFFECT THAT (1) SUCH TRANSFEREE AGREES TO BE BOUND BY THE TERMS
OF THE POOLING AND SERVICING AGREEMENT AND ALL RESTRICTIONS SET FORTH ON THE
FACE HEREOF, (2) SUCH TRANSFEREE IS NOT (A) THE UNITED STATES, ANY STATE OR
POLITICAL SUBDIVISION THEREOF OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE
FOREGOING (OTHER THAN AN INSTRUMENTALITY WHICH IS A CORPORATION IF ALL OF ITS
ACTIVITIES ARE SUBJECT TO TAX AND, EXCEPT FOR FHLMC, A MAJORITY ITS BOARD OF
DIRECTORS IS NOT SELECTED BY ANY SUCH GOVERNMENTAL UNIT), (B) AN ORGANIZATION
(OTHER THAN CERTAIN FARMERS' COOPERATIVES DESCRIBED IN SECTION 521 OF THE CODE)
WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE (UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE ON
UNRELATED BUSINESS TAXABLE INCOME), (C) A RURAL ELECTRIC OR TELEPHONE
COOPERATIVE DESCRIBED IN SECTION 1381 OF THE CODE (ANY SUCH PERSON DESCRIBED IN
THE FOREGOING CLAUSES (A), (B) OR (C) BEING HEREINAFTER REFERRED TO AS A
"DISQUALIFIED ORGANIZATION"), (D) A PERSON THAT IS NOT A CITIZEN OF OR RESIDENT
OF THE UNITED STATES, A CORPORATION, PARTNERSHIP OR OTHER ENTITY CREATED OR
ORGANIZED IN, OR UNDER THE LAWS OF, THE UNITED STATES OR ANY POLITICAL
SUBDIVISION THEREOF, OR AN ESTATE WHOSE
A-16-1
<PAGE>
INCOME FROM SOURCES WITHOUT THE UNITED STATES IS INCLUDABLE IN GROSS INCOME FOR
UNITED STATES FEDERAL INCOME TAX PURPOSES REGARDLESS OF ITS CONNECTION WITH THE
CONDUCT OF TRADE OR BUSINESS IN THE UNITED STATES OR A TRUST SUBJECT TO THE
CONTROL OF A UNITED STATES FIDUCIARY AND THE PRIMARY SUPERVISION OF A UNITED
STATES COURT (ANY SUCH PERSON BEING HEREINAFTER REFERRED TO AS A "UNITED STATES
PERSON") OR (E) AN AGENT OF A DISQUALIFIED ORGANIZATION OR A NONUNITED STATES
PERSON, AND (3) NO PURPOSE OF SUCH TRANSFER IS TO ENABLE THE TRANSFEROR TO
IMPEDE THE ASSESSMENT OR COLLECTION OF TAX. NOTWITHSTANDING THE REGISTRATION IN
THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS
CLASS R-II CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR A NONUNITED STATES
PERSON OR AN AGENT OF A DISQUALIFIED ORGANIZATION OR A NON-UNITED STATES
PERSON, OR TO ANY OTHER PROHIBITED TRANSFEREE AS PROVIDED IN THE POOLING AND
SERVICING AGREEMENT, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE
OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A
CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE
RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF A CLASS R-II
CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED
TO THE PROVISIONS OF THIS PARAGRAPH.
A-16-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
PERCENTAGE INTEREST OF THIS CLASS R-II MASTER SERVICER: GMAC COMMERCIAL
CERTIFICATE: _____% MORTGAGE CORPORATION
DATE OF POOLING & SERVICING AGREEMENT: INITIAL SPECIAL SERVICER: GMAC
AS OF NOVEMBER 1, 1998 COMMERCIAL MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 TRUSTEE: LASALLE NATIONAL BANK
CLOSING DATE: NOVEMBER 12, 1998 FISCAL AGENT: ABN AMRO BANK N.V.
FIRST DISTRIBUTION DATE:
DECEMBER 15, 1998
NO. _________
CLASS R-II CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of
a pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class R-II Certificates issued by the
Trust created pursuant to the Pooling and Servicing Agreement, dated as
specified above (the "Pooling and Servicing Agreement"), among Morgan Stanley
Capital I Inc. (hereinafter called the "Depositor", which term includes any
successor entity under the Pooling and Servicing Agreement), the Trustee, the
Master Servicer, the Special Servicer and the Fiscal Agent, a summary of
certain of the pertinent provisions of which is set forth hereafter. The Trust
consists primarily of the Mortgage Loans, such amounts as shall from time to
time be held in the Collection Account, the Distribution Account, the Insurance
Policies and any REO Properties. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Pooling and
Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing the Percentage Interest in the
Class R-II Certificates specified on the face hereof. The Certificates are
designated as the Morgan Stanley Capital I Inc., Commercial Mortgage
Pass-Through Certificates, Series 1998-HF2 and are issued in sixteen Classes as
specifically set forth in the Pooling and Servicing Agreement. The Certificates
will evidence in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and
Servicing Agreement and reference is made to the Pooling and Servicing
Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby and the rights, duties and
obligations of the Trustee. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which the
Certificateholder is bound. In the case of any conflict between terms specified
in this Certificate and terms specified in the Pooling and Servicing Agreement,
the terms of the Pooling and Servicing Agreement shall govern.
A-16-3
<PAGE>
The Holder of this Certificate shall be entitled to receive only
certain amounts set forth in the Pooling and Servicing Agreement, including a
distribution upon termination of the Pooling and Servicing Agreement and the
related REMIC created thereby of the amounts which remain on deposit in the
Distribution Account after payment to the Holders of all other Certificates of
all amounts set forth in the Pooling and Servicing Agreement. Distributions on
this Certificate will be made out of the Available Distribution Amount, to the
extent and subject to the limitations set forth in the Pooling and Servicing
Agreement, on the 15th day of each month or, if such 15th day is not a Business
Day, the next succeeding Business Day (a "Distribution Date") commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (the "Record
Date"). All sums distributable on this Certificate are payable in the coin or
currency of the United States of America as at the time of payment is legal
tender for the payment of public and private debts.
Unless the certificate of authentication hereon has been executed 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.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses
and interest shortfalls on the Mortgage Loans allocated to any Class of
Certificates will be allocated pro rata among the outstanding Certificates of
such Class.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth in the Pooling and Servicing Agreement. As provided in
the Pooling and Servicing Agreement, withdrawals from the Collection Account
shall be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of certain expenses
incurred with respect to the servicing of the Mortgage Loans and administration
of the Trust.
All distributions under the Pooling and Servicing Agreement to a
nominee of The Depository Trust Company ("DTC") will be made by or on behalf of
the Trustee by wire transfer in immediately available funds to an account
specified in the request of such Certificateholder. All distributions under the
Pooling and Servicing Agreement to Certificateholders will be made by wire
transfer in immediately available funds to the account specified by the
Certificateholder, at a bank or other entity having appropriate facilities
therefor, if such Certificateholder will have provided the Trustee with wiring
instructions no more than five business days after the related Record Date, or
otherwise by check mailed to such Certificateholder. Notwithstanding the above,
the final distribution on any Certificate will be made only upon presentation
and surrender of such Certificate at the location that will be specified in a
notice of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of the aggregate Certificate Principal Balance of the Certificates
then outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon the Certificate.
The Pooling and Servicing Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, the transfer of this Certificate is
registrable in the Certificate Register upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Certificate Registrar duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon
A-16-4
<PAGE>
one or more new Certificates of the same Class in authorized denominations will
be issued to the designated transferee or transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class
A-1 and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations
of $100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates
registered in the name of Cede & Co., as nominee of the DTC. No Certificate
Owner will be entitled to receive a Definitive Certificate representing such
interest, except under the limited circumstances described in the Pooling and
Servicing Agreement. The Residual Certificates will be issued in fully
registered, certificated form in minimum percentage interests of 10% and in
multiples of 10% in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trustee, the Fiscal
Agent, the Master Servicer, the Special Servicer, the Certificate Registrar nor
any such agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby
(other than the obligation of the Trustee to make payments to the
Certificateholders as set forth in Section 10.2 of the Pooling and Servicing
Agreement and other than the obligations in the nature of information or tax
reporting) shall terminate on the earliest of (i) the later of (A) the final
payment or other liquidation of the last Mortgage Loan remaining in the Trust
and (B) the disposition of all REO Property or (ii) the sale of the property
held by the Trust in accordance with Section 10.1(b) of the Pooling and
Servicing Agreement; provided that in no event shall the Trust continue beyond
the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James, living on the date hereof. The parties designated in
the Pooling and Servicing Agreement may exercise their option to purchase the
Mortgage Loans and any other property remaining in the Trust and cause the
termination of the Trust in accordance with the requirements set forth in the
Pooling and Servicing Agreement. Upon termination of the Trust and payment of
the Certificates and of all administrative expenses associated with the Trust,
any remaining assets of the Trust shall be distributed to the holders of the
Class R-I Certificates.
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-16-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:
-----------------------------------
AUTHORIZED OFFICER
Dated:
A-16-6
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS R-II CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
BY:
-----------------------------------
AUTHORIZED SIGNATORY
A-16-7
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT . . . .Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.......................
common (State)
Additional abbreviations may also be used though not in the above
list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
- -------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------
- --------------------------------------
-----------------------------------------
- -------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- -------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- -------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the
within-named Trust, with full power of substitution in the premises.
Dated
--------------------------- -------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of this Certificate in every
particular without alteration or
enlargement or any change whatever.
- ----------------------------------
SIGNATURE GUARANTEED The
signature must be
guaranteed by a
commercial bank or trust
company or by a member
firm of the New York
Stock Exchange or another
national securities
exchange. Notarized or
witnessed signatures are
not acceptable.
A-16-8
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ____________ for the account of
_________________________________________ account number _____________________
or, if mailed by check, to __________________________. Statements should be
mailed to ______________________. This information is provided by assignee
named above, or ____________________________, as its agent.
A-16-9
<PAGE>
EXHIBIT A-17
[FORM OF CLASS R-III CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A)(1) TO A PERSON THAT THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE SECURITIES
ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS THE
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE"). THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A
NON-UNITED STATES PERSON.
THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED TO
"DISQUALIFIED ORGANIZATIONS" WITHIN THE MEANING OF THE CODE.
A SALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS R-III CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE
TRUSTEE TO THE EFFECT THAT (1) SUCH TRANSFEREE AGREES TO BE BOUND BY THE TERMS
OF THE POOLING AND SERVICING AGREEMENT AND ALL RESTRICTIONS SET FORTH ON THE
FACE HEREOF, (2) SUCH TRANSFEREE IS NOT (A) THE UNITED STATES, ANY STATE OR
POLITICAL SUBDIVISION THEREOF OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE
FOREGOING (OTHER THAN AN INSTRUMENTALITY WHICH IS A CORPORATION IF ALL OF ITS
ACTIVITIES ARE SUBJECT TO TAX AND, EXCEPT FOR FHLMC, A MAJORITY ITS BOARD OF
DIRECTORS IS NOT SELECTED BY ANY SUCH GOVERNMENTAL UNIT), (B) AN ORGANIZATION
(OTHER THAN CERTAIN FARMERS' COOPERATIVES DESCRIBED IN SECTION 521 OF THE CODE)
WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE (UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE ON
UNRELATED BUSINESS TAXABLE INCOME), (C) A RURAL ELECTRIC OR TELEPHONE
COOPERATIVE DESCRIBED IN SECTION 1381 OF THE CODE (ANY SUCH PERSON DESCRIBED IN
THE FOREGOING CLAUSES (A), (B) OR (C) BEING HEREINAFTER REFERRED TO AS A
"DISQUALIFIED ORGANIZATION"), (D) A PERSON THAT IS NOT A CITIZEN OF OR RESIDENT
OF THE UNITED STATES, A CORPORATION, PARTNERSHIP OR OTHER ENTITY CREATED OR
ORGANIZED IN, OR UNDER THE LAWS OF,
A-17-1
<PAGE>
THE UNITED STATES OR ANY POLITICAL SUBDIVISION THEREOF, OR AN ESTATE WHOSE
INCOME FROM SOURCES WITHOUT THE UNITED STATES IS INCLUDABLE IN GROSS INCOME FOR
UNITED STATES FEDERAL INCOME TAX PURPOSES REGARDLESS OF ITS CONNECTION WITH THE
CONDUCT OF TRADE OR BUSINESS IN THE UNITED STATES OR A TRUST SUBJECT TO THE
CONTROL OF A UNITED STATES FIDUCIARY AND THE PRIMARY SUPERVISION OF A UNITED
STATES COURT (ANY SUCH PERSON BEING HEREINAFTER REFERRED TO AS A "UNITED STATES
PERSON") OR (E) AN AGENT OF A DISQUALIFIED ORGANIZATION OR A NONUNITED STATES
PERSON, AND (3) NO PURPOSE OF SUCH TRANSFER IS TO ENABLE THE TRANSFEROR TO
IMPEDE THE ASSESSMENT OR COLLECTION OF TAX. NOTWITHSTANDING THE REGISTRATION IN
THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS
CLASS R-III CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR A NONUNITED STATES
PERSON OR AN AGENT OF A DISQUALIFIED ORGANIZATION OR A NON-UNITED STATES
PERSON, OR TO ANY OTHER PROHIBITED TRANSFEREE AS PROVIDED IN THE POOLING AND
SERVICING AGREEMENT, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE
OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A
CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE
RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF A CLASS R-III
CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED
TO THE PROVISIONS OF THIS PARAGRAPH.
A-17-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
PERCENTAGE INTEREST OF THIS CLASS R-III MASTER SERVICER: GMAC COMMERCIAL
CERTIFICATE: _____% MORTGAGE CORPORATION
DATE OF POOLING & SERVICING AGREEMENT: INITIAL SPECIAL SERVICER: GMAC
AS OF NOVEMBER 1, 1998 COMMERCIAL MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 TRUSTEE: LASALLE NATIONAL BANK
CLOSING DATE: NOVEMBER 12, 1998 FISCAL AGENT: ABN AMRO BANK N.V.
FIRST DISTRIBUTION DATE:
DECEMBER 15, 1998
NO. _________
CLASS R-III CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of
a pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class R-III Certificates issued by the
Trust created pursuant to the Pooling and Servicing Agreement, dated as
specified above (the "Pooling and Servicing Agreement"), among Morgan Stanley
Capital I Inc. (hereinafter called the "Depositor", which term includes any
successor entity under the Pooling and Servicing Agreement), the Trustee, the
Master Servicer, the Special Servicer and the Fiscal Agent, a summary of
certain of the pertinent provisions of which is set forth hereafter. The Trust
consists primarily of the Mortgage Loans, such amounts as shall from time to
time be held in the Collection Account, the Distribution Account, the Insurance
Policies and any REO Properties. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Pooling and
Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing the Percentage Interest in the
Class R-III Certificates specified on the face hereof. The Certificates are
designated as the Morgan Stanley Capital I Inc., Commercial Mortgage
Pass-Through Certificates, Series 1998-HF2 and are issued in sixteen Classes as
specifically set forth in the Pooling and Servicing Agreement. The Certificates
will evidence in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and
Servicing Agreement and reference is made to the Pooling and Servicing
Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby and the rights, duties and
obligations of the Trustee. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which the
Certificateholder is bound. In the case of any conflict between terms specified
in this Certificate and terms specified in the Pooling and Servicing Agreement,
the terms of the Pooling and Servicing Agreement shall govern.
A-17-3
<PAGE>
The Holder of this Certificate shall be entitled to receive only
certain amounts set forth in the Pooling and Servicing Agreement, including a
distribution upon termination of the Pooling and Servicing Agreement and the
related REMIC created thereby of the amounts which remain on deposit in the
Distribution Account after payment to the Holders of all other Certificates of
all amounts set forth in the Pooling and Servicing Agreement. Distributions on
this Certificate will be made out of the Available Distribution Amount, to the
extent and subject to the limitations set forth in the Pooling and Servicing
Agreement, on the 15th day of each month or, if such 15th day is not a Business
Day, the next succeeding Business Day (a "Distribution Date") commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (the "Record
Date"). All sums distributable on this Certificate are payable in the coin or
currency of the United States of America as at the time of payment is legal
tender for the payment of public and private debts.
Unless the certificate of authentication hereon has been executed 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.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses
and interest shortfalls on the Mortgage Loans allocated to any Class of
Certificates will be allocated pro rata among the outstanding Certificates of
such Class.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth in the Pooling and Servicing Agreement. As provided in
the Pooling and Servicing Agreement, withdrawals from the Collection Account
shall be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of certain expenses
incurred with respect to the servicing of the Mortgage Loans and administration
of the Trust.
All distributions under the Pooling and Servicing Agreement to a
nominee of The Depository Trust Company ("DTC") will be made by or on behalf of
the Trustee by wire transfer in immediately available funds to an account
specified in the request of such Certificateholder. All distributions under the
Pooling and Servicing Agreement to Certificateholders will be made by wire
transfer in immediately available funds to the account specified by the
Certificateholder, at a bank or other entity having appropriate facilities
therefor, if such Certificateholder will have provided the Trustee with wiring
instructions no more than five business days after the related Record Date, or
otherwise by check mailed to such Certificateholder. Notwithstanding the above,
the final distribution on any Certificate will be made only upon presentation
and surrender of such Certificate at the location that will be specified in a
notice of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of the aggregate Certificate Principal Balance of the Certificates
then outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon the Certificate.
The Pooling and Servicing Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, the transfer of this Certificate is
registrable in the Certificate Register upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Certificate Registrar duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon
A-17-4
<PAGE>
one or more new Certificates of the same Class in authorized denominations will
be issued to the designated transferee or transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class
A-1 and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations
of $100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates
registered in the name of Cede & Co., as nominee of the DTC. No Certificate
Owner will be entitled to receive a Definitive Certificate representing such
interest, except under the limited circumstances described in the Pooling and
Servicing Agreement. The Residual Certificates will be issued in fully
registered, certificated form in minimum percentage interests of 10% and in
multiples of 10% in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trustee, the Fiscal
Agent, the Master Servicer, the Special Servicer, the Certificate Registrar nor
any such agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby
(other than the obligation of the Trustee to make payments to the
Certificateholders as set forth in Section 10.2 of the Pooling and Servicing
Agreement and other than the obligations in the nature of information or tax
reporting) shall terminate on the earliest of (i) the later of (A) the final
payment or other liquidation of the last Mortgage Loan remaining in the Trust
and (B) the disposition of all REO Property or (ii) the sale of the property
held by the Trust in accordance with Section 10.1(b) of the Pooling and
Servicing Agreement; provided that in no event shall the Trust continue beyond
the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James, living on the date hereof. The parties designated in
the Pooling and Servicing Agreement may exercise their option to purchase the
Mortgage Loans and any other property remaining in the Trust and cause the
termination of the Trust in accordance with the requirements set forth in the
Pooling and Servicing Agreement. Upon termination of the Trust and payment of
the Certificates and of all administrative expenses associated with the Trust,
any remaining assets of the Trust shall be distributed to the holders of the
Class R-I Certificates.
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-17-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:
-------------------------------------
AUTHORIZED OFFICER
Dated:
A-17-6
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS R-III CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
BY:
----------------------------------
AUTHORIZED SIGNATORY
A-17-7
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT . . . .Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.......................
common (State)
Additional abbreviations may also be used though not in the above
list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
- -------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- -----------------------------------------
- -----------------------------------------
--------------------------------------
- -------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- -------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- -------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the
within-named Trust, with full power of substitution in the premises.
Dated:
--------------------------- -------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of this Certificate in every
particular without alteration or
enlargement or any change whatever.
- ---------------------------------
SIGNATURE GUARANTEED The
signature must be
guaranteed by a
commercial bank or trust
company or by a member
firm of the New York
Stock Exchange or another
national securities
exchange. Notarized or
witnessed signatures are
not acceptable.
A-17-8
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ____________ for the account of
_________________________________________ account number _____________________
or, if mailed by check, to __________________________. Statements should be
mailed to ______________________. This information is provided by assignee
named above, or ____________________________, as its agent.
A-17-9
<PAGE>
EXHIBIT A-18
[FORM OF CLASS X CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A)(1) TO A PERSON THAT THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE SECURITIES
ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION.
NOTWITHSTANDING THE ABOVE, IF THE TRANSFEREE OF THIS CERTIFICATE IS AN EMPLOYEE
BENEFIT PLAN SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF
ANY SUCH PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE OR HOLD THIS
CERTIFICATE, SUCH PLAN OR SUCH PERSON MUST BE AN "ACCREDITED INVESTOR" WITHIN
THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT").
THE PORTION OF THE CERTIFICATE NOTIONAL AMOUNT OF THE CERTIFICATES EVIDENCED BY
THIS CERTIFICATE WILL BE DECREASED BY THE PORTION OF PRINCIPAL PAYMENTS,
REALIZED LOSSES AND CERTAIN EXPENSE LOSSES ON THE MORTGAGE LOANS ALLOCABLE TO
THE CERTIFICATE NOTIONAL AMOUNT OF THIS CLASS X CERTIFICATE. ACCORDINGLY, THE
CERTIFICATE NOTIONAL AMOUNT OF THIS CERTIFICATE MAY BE LESS THAN THAT SET FORTH
BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE
NOTIONAL AMOUNT BY INQUIRY OF THE TRUSTEE.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS AN INVESTMENT
UNIT COMPRISED OF TWELVE COMPONENT INTERESTS, EACH OF WHICH IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
A-18-1
<PAGE>
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
HEREON 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.
A-18-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
INITIAL PASS-THROUGH RATE: 1.22% INITIAL CERTIFICATE NOTIONAL AMOUNT
OF THIS CLASS X CERTIFICATE:
$1,283,705,560
DATE OF POOLING & SERVICING AGREEMENT: MASTER SERVICER: GMAC COMMERCIAL
AS OF NOVEMBER 1, 1998 MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 INITIAL SPECIAL SERVICER: GMAC
COMMERCIAL MORTGAGE CORPORATION
CLOSING DATE: NOVEMBER 12, 1998 TRUSTEE: LASALLE NATIONAL BANK
FIRST DISTRIBUTION DATE: FISCAL AGENT: ABN AMRO BANK N.V.
DECEMBER 15, 1998
AGGREGATE CERTIFICATE NOTIONAL CUSIP NO.
AMOUNT OF THE CLASS X
CERTIFICATES AS OF THE CLOSING DATE: NO. 1
$1,283,705,560
CLASS X CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of
a pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class X Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of
the pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be
held in the Collection Account, the Distribution Account, the Insurance
Policies and any REO Properties. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Pooling and
Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing an interest in the Class of
Certificates specified on the face hereof equal to the quotient expressed as a
percentage obtained by dividing the Certificate Notional Amount of this
Certificate specified on the face hereof by the initial aggregate Certificate
Notional Amount of the Class X Certificates. The Certificates are designated as
the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1996-HF2 and are issued in sixteen Classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will
evidence in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and
Servicing Agreement and reference is made to the Pooling and Servicing
Agreement for information with respect to the interests, rights, benefits,
A-18-3
<PAGE>
obligations, proceeds, and duties evidenced hereby and the rights, duties and
obligations of the Trustee. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which the
Certificateholder is bound. In the case of any conflict between terms specified
in this Certificate and terms specified in the Pooling and Servicing Agreement,
the terms of the Pooling and Servicing Agreement shall govern.
Distributions of interest on this Certificate will be made out of the
Available Distribution Amount, to the extent and subject to the limitations set
forth in the Pooling and Servicing Agreement, on the 15th day of each month or,
if such 15th day is not a Business Day, the next succeeding Business Day (a
"Distribution Date") commencing on the first Distribution Date specified above,
to the Person in whose name this Certificate is registered at the close of
business on the last Business Day of the month immediately preceding the month
of such distribution (the "Record Date"). All sums distributable on this
Certificate are payable in the coin or currency of the United States of America
as at the time of payment is legal tender for the payment of public and private
debts.
Interest on this Certificate will accrue (computed as if each year
consisted of 360 days and each month consisted of 30 days) during the Interest
Accrual Period relating to such Distribution Date at a Pass-Through Rate
calculated as specified in the Pooling and Servicing Agreement on the
Certificate Notional Amount of this Certificate immediately prior to each
Distribution Date. Interest allocated to this Certificate on any Distribution
Date will be in an amount due to this Certificate's pro rata share of the
amount to be distributed on the Certificates of this Class as of such
Distribution Date, with a final distribution to be made upon retirement of this
Certificate as set forth in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed 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.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses
and interest shortfalls on the Mortgage Loans allocated to any Class of
Certificates will be allocated pro rata among the outstanding Certificates of
such Class.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth in the Pooling and Servicing Agreement. As provided in
the Pooling and Servicing Agreement, withdrawals from the Collection Account
shall be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of certain expenses
incurred with respect to the servicing of the Mortgage Loans and administration
of the Trust.
All distributions under the Pooling and Servicing Agreement to a
nominee of The Depository Trust Company ("DTC") will be made by or on behalf of
the Trustee by wire transfer in immediately available funds to an account
specified in the request of such Certificateholder. All distributions under the
Pooling and Servicing Agreement to Certificateholders will be made by wire
transfer in immediately available funds to the account specified by the
Certificateholder, at a bank or other entity having appropriate facilities
therefor, if such Certificateholder will have provided the Trustee with wiring
instructions no more than five business days after the related Record Date, or
otherwise by check mailed to such Certificateholder. Notwithstanding the above,
the final distribution on any Certificate will be made only upon presentation
and surrender of such Certificate at the location that will be specified in a
notice of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of
A-18-4
<PAGE>
the aggregate Certificate Principal Balance of the Certificates then
outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon the Certificate.
The Pooling and Servicing Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, the transfer of this Certificate is
registrable in the Certificate Register upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Certificate Registrar duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations will be issued to the designated transferee or
transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class
A-1 and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations
of $100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates
registered in the name of Cede & Co., as nominee of the DTC. No Certificate
Owner will be entitled to receive a Definitive Certificate representing such
interest, except under the limited circumstances described in the Pooling and
Servicing Agreement. The Residual Certificates will be issued in fully
registered, certificated form in minimum percentage interests of 10% and in
multiples of 10% in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trustee, the Fiscal
Agent, the Master Servicer, the Special Servicer, the Certificate Registrar nor
any such agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby
(other than the obligation of the Trustee to make payments to the
Certificateholders as set forth in Section 10.2 of the Pooling and Servicing
Agreement and other than the obligations in the nature of information or tax
reporting) shall terminate on the earliest of (i) the later of (A) the final
payment or other liquidation of the last Mortgage Loan remaining in the Trust
and (B) the disposition of all REO Property or (ii) the sale of the property
held by the Trust in accordance with Section 10.1(b) of the Pooling and
Servicing Agreement; provided that in no event shall the Trust continue beyond
the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James, living on the date hereof. The parties designated in
the Pooling and Servicing Agreement may exercise their option to purchase the
Mortgage Loans and any other property remaining in the Trust and cause the
termination of the Trust in accordance with the requirements set forth in the
Pooling and Servicing Agreement. Upon termination of the Trust and payment of
the Certificates and of all administrative expenses associated with the Trust,
any remaining assets of the Trust shall be distributed to the holders of the
Class R-I Certificates.
A-18-5
<PAGE>
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-18-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:
------------------------------------
AUTHORIZED OFFICER
Dated:
A-18-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS X CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
BY:
------------------------------------
AUTHORIZED SIGNATORY
A-18-8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT . . . .Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.......................
common (State)
Additional abbreviations may also be used though not in the above
list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
- -------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- -----------------------------------
- -----------------------------------
--------------------------------------------
- -------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- -------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- -------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the
within-named Trust, with full power of substitution in the premises.
Dated:
--------------------------- -------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of this Certificate in every
particular without alteration or
enlargement or any change whatever.
- ---------------------------------
SIGNATURE GUARANTEED The
signature must be
guaranteed by a
commercial bank or trust
company or by a member
firm of the New York
Stock Exchange or another
national securities
exchange. Notarized or
witnessed signatures are
not acceptable.
A-18-9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ____________ for the account of
_________________________________________ account number _____________________
or, if mailed by check, to __________________________. Statements should be
mailed to ______________________. This information is provided by assignee
named above, or ____________________________, as its agent.
A-18-10
<PAGE>
EXHIBIT B-1
FORM OF INITIAL CERTIFICATION OF TRUSTEE
November __, 1998
Morgan Stanley Capital I Inc.
1585 Broadway, 37th Floor
New York, New York 10036
Re: Pooling and Servicing Agreement ("Pooling and
Servicing Agreement") relating to Morgan Stanley
Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2
-----------------------------
Ladies and Gentlemen:
In accordance with the provisions of Section 2.2 of the Pooling and
Servicing Agreement, the undersigned hereby certifies that, with respect to
each Mortgage Loan listed in the Mortgage Loan Schedule and subject to the
exceptions noted in the schedule of exceptions attached hereto, that: (a) all
documents specified in clause (i) of the definition of "Mortgage File" are in
its possession, (b) such documents have been reviewed by it and have not been
materially mutilated, damaged, defaced, torn or otherwise physically altered,
and such documents relate to such Mortgage Loan, (c) based on its examination
and only as to the foregoing documents, the loan number and the name of the
Mortgagor set forth in the Mortgage Loan Schedule respecting such Mortgage Loan
accurately reflects the information contained in such documents, and (d) each
Mortgage Note has been endorsed as provided in clause (i) of the definition of
"Mortgage File". The Trustee makes no representations as to: (i) the validity,
legality, sufficiency, enforceability or genuineness of any such documents
contained in each Mortgage File or any of the Mortgage Loans identified in the
Mortgage Loan Schedule, or (ii) the collectibility, insurability, effectiveness
or suitability of any such Mortgage Loan.
The Trustee acknowledges receipt of notice that the Depositor has
granted to the Trustee for the benefit of the Certificateholders a security
interest in all of the Depositor's right, title and interest in and to the
Mortgage Loans.
Capitalized words and phrases used herein and not otherwise defined
herein shall have the respective meanings assigned to them in the Pooling and
Servicing Agreement. This Certificate is subject in all respects to the terms
of said Pooling and Servicing Agreement.
LASALLE NATIONAL BANK, as Trustee
By:
---------------------------------------
Name:
Title:
B-1-1
<PAGE>
EXHIBIT B-2
FORM OF FINAL CERTIFICATION OF TRUSTEE
November __, 1998
Morgan Stanley Capital I Inc.
1585 Broadway, 37th Floor
New York, New York 10036
Re: Pooling and Servicing Agreement ("Pooling and
Servicing Agreement") relating to Morgan Stanley
Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2
-----------------------------
Ladies and Gentlemen:
In accordance with the provisions of Section 2.2 of the Pooling and
Servicing Agreement, the undersigned hereby certifies that, with respect to
each Mortgage Loan listed in the Mortgage Loan Schedule and subject to the
exceptions noted in the schedule of exceptions attached hereto, that: (a) all
documents required to be included in the Mortgage File pursuant to clauses (i),
(ii), (iii), (ix), (xii) (to the extent it relates to the foregoing) and (xiii)
(if a leasehold interest of the borrower in the related Mortgaged Property is
evident from the related Mortgage or title policy) of the definition of
"Mortgage File" are in its possession, (b) such documents have been reviewed by
it and have not been materially mutilated, damaged, defaced, torn or otherwise
physically altered, and such documents relate to such Mortgage Loan, (c) based
on its examination and only as to the foregoing documents, the loan number, the
street address of the Mortgaged Property and the name of the Mortgagor set
forth in the Mortgage Loan Schedule respecting such Mortgage Loan accurately
reflects the information contained in the documents in the Mortgage File, and
(d) each Mortgage Note has been endorsed and each Mortgage has been assigned as
provided in clauses (i) and (iii) of the definition of "Mortgage File". The
Trustee makes no representations as to: (i) the validity, legality,
sufficiency, enforceability or genuineness of any of the documents contained in
each Mortgage File or any of the Trustee Mortgage Loans identified in the
Mortgage Loan Schedule, or (ii) the collectibility, insurability, effectiveness
or suitability of any such Mortgage Loan.
The Trustee acknowledges receipt of notice that the Depositor has
granted to the Trustee for the benefit of the Certificateholders a security
interest in all of the Depositor's right, title and interest in and to the
Mortgage Loans.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement. This
Certificate is qualified in all respects by the terms of said Pooling and
Servicing Agreement including but not limited to Section 2.2.
LASALLE NATIONAL BANK, as Trustee
By:
----------------------------------------
Name:
Title:
B-2-1
<PAGE>
EXHIBIT C
FORM OF REQUEST FOR RELEASE
To: LaSalle National Bank, Trustee
135 South LaSalle Street
Suite 1625
Chicago, Illinois 60674-4107
Attn: Asset-Backed Securities Trust Services Group -
Morgan Stanley Series 1998-HF2
Re: Morgan Stanley Capital I Inc., Commercial
Morgan Pass-Through Certificates, Series 1998-HF2
-------------------------------------------------
Date: November __, 1998
In connection with the administration of the Mortgage Loans held by
you as Trustee under the Pooling and Servicing Agreement dated as of November
1, 1998, by and among Morgan Stanley Capital I Inc., as Depositor, GMAC
Commercial Mortgage Corporation, as Master Servicer and Special Servicer,
LaSalle National Bank, as Trustee, and ABN AMRO Bank N.V., as Fiscal Agent (the
"Pooling and Servicing Agreement"), the undersigned hereby requests a release
of the Mortgage File held by you as Trustee with respect to the following
described Mortgage Loan for the reason indicated below.
Mortgagor's Name:
Address:
Loan No.:
Reason for requesting file:
____1. Mortgage Loan paid in full.
(The [Master] [Special] Servicer hereby certifies that all amounts
received in connection with the Mortgage Loan have been or will be,
following the [Master] [Special] Servicer's release of the Trustee
Mortgage File, credited to the Collection Account or the Distribution
Account pursuant to the Pooling and Servicing Agreement.)
____2. Mortgage Loan repurchased.
(The [Master] [Special] Servicer hereby certifies that the Purchase
Price has been credited to the Distribution Account pursuant to the
Pooling and Servicing Agreement.)
____3. Mortgage Loan substituted.
(The [Master] [Special] Servicer hereby certifies that a Qualifying
Substitute Mortgage Loan has been assigned and delivered to you along
with the related Mortgage File pursuant to the Pooling and Servicing
Agreement.)
____4. The Mortgage Loan is being foreclosed.
____5. Other. (Describe)
C-1
<PAGE>
The undersigned acknowledges that the above Mortgage File will be held
by the undersigned in accordance with the provisions of the Pooling and
Servicing Agreement and will be returned to you, except if the Mortgage Loan
has been paid in full, repurchased or substituted for by a Qualifying
Substitute Mortgage Loan (in which case the Mortgage File will be retained by
us permanently), when no longer required by us for such purpose).
Capitalized terms used herein shall have the meanings ascribed to them
in the Pooling and Servicing Agreement.
[Name of [Master] [Special] Servicer]
By:
----------------------------------
Name:
Title:
C-2
<PAGE>
EXHIBIT D-1
TRANSFERS OF DEFINITIVE PRIVATELY OFFERED CERTIFICATES
[Date]
LaSalle National Bank
135 LaSalle Street
Suite 1625
Chicago, IL 60674-4170
Attention: Asset-Backed Securities Trust Services
Re: Morgan Stanley Capital I Inc., Commercial Mortgage
Pass-Through Certificates, Series 1998-HF2,
(the "Certificates")
Dear Sirs:
This letter is delivered to you in connection with the transfer by
_______________ (the "Transferor") to ________________ (the "Transferee") of a
Certificate (the "Transferred Certificate") having an initial Principal Balance
or Notional Amount as of November 12, 1998 (the "Closing Date") of $__________.
The Certificates were issued pursuant to the Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement"), to be dated as of November 1, 1998,
among Morgan Stanley Capital I Inc. as depositor (the "Depositor"), GMAC
Commercial Mortgage Corporation, as master servicer and as special servicer,
LaSalle National Bank, as trustee and ABN AMRO Bank N.V., as fiscal agent. All
terms used herein and not otherwise defined shall have the meanings set forth
in the Pooling and Servicing Agreement. The Transferor hereby certifies,
represents and warrants to you, as Certificate Registrar, that:
1. The Transferor is the lawful owner of the Transferred
Certificate with the full right to transfer such Certificate free from
any and all claims and encumbrances whatsoever.
2. Neither the Transferor nor anyone acting on its behalf has
(a) offered, transferred, pledged, sold or otherwise disposed of any
Certificate, any interest in any Certificate or any other similar
security to any person in any manner, (b) solicited any offer to buy
or accept a transfer, pledge or other disposition of any Certificate,
any interest in any Certificate or any other similar security from any
person in any manner, (c) otherwise approached or negotiated with
respect to any Certificate, any interest in any Certificate or any
other similar security with any person in any manner, (d) made any
general solicitation by means of general advertising or in any other
manner, or (e) taken any other action, which (in the case of any of
the acts described in clauses (a) through (e) hereof) would constitute
a distribution of any Certificate under the Securities Act of 1933, as
amended (the "Securities Act"), or would render the disposition of any
Certificate a violation of Section 5 of the Securities Act or any
state securities laws, or would require registration or qualification
of any Certificate pursuant to the Securities Act or any state
securities laws.
Very truly yours,
--------------------------------------
(Transferor)
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
D1-1
<PAGE>
EXHIBIT D-2A
FORM I OF TRANSFEREE CERTIFICATE
FOR TRANSFERS OF DEFINITIVE
PRIVATELY OFFERED CERTIFICATES
[Date]
LaSalle National Bank
135 LaSalle Street
Suite 1625
Chicago, IL 60674-4170
Attention: Asset-Backed Securities Trust Services
Re: Morgan Stanley Capital I Inc., Commercial Mortgage
Pass-Through Certificates, Series 1998-HF2
(the "Certificates")
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
_________________ (the "Transferor") to __________________ (the "Transferee")
of Class __________ Certificates having an initial Principal Balance or
Notional Amount as of November 12, 1998 (the "Closing Date") of $____________
(the "Transferred Certificates"). The Certificates, including the Transferred
Certificates, were issued pursuant to the Pooling and Servicing Agreement, to
be dated as of November 1, 1998 (the "Pooling and Servicing Agreement"), among
Morgan Stanley Capital I Inc., as depositor (the "Depositor"), GMAC Commercial
Mortgage Corporation, as master servicer and as special servicer, LaSalle
National Bank, as trustee and ABN AMRO Bank N.V., as fiscal agent. All
capitalized terms used but not otherwise defined herein shall have the
respective meanings set forth in the Pooling and Servicing Agreement. The
Transferee hereby certifies, represents and warrants to you, as Certificate
Registrar, that:
1. The Transferee is a "qualified institutional buyer" (a
"Qualified Institutional Buyer") as that term is defined in Rule 144A
("Rule 144A") under the Securities Act of 1933, as amended (the
"Securities Act") and has completed one of the forms of certification
to that effect attached hereto as Annex 1 and Annex 2. The Transferee
is aware that the sale to it of the Transferred Certificates is being
made in reliance on Rule 144A. The Transferee is acquiring the
Transferred Certificates for its own account or for the account of a
Qualified Institutional Buyer, and understands that such Transferred
Certificates may be resold, pledged or transferred only (i) to a
person reasonably believed to be a Qualified Institutional Buyer that
purchases for its own account or for the account of a Qualified
Institutional Buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to
another exemption from registration under the Securities Act.
D2-1
<PAGE>
2. The Transferee has been furnished with all information
regarding (a) the Transferred Certificates and distributions thereon,
(b) the nature, performance and servicing of the Mortgage Loans, (c)
the Pooling and Servicing Agreement, and (d) any credit enhancement
mechanism associated with the Transferred Certificates, that it has
requested.
Very truly yours,
(Transferor)
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
D2-2
<PAGE>
ANNEX 1 TO EXHIBIT D-2A
-----------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[for Transferees other than Registered Investment Companies]
The undersigned hereby certifies as follows to [name of Transferor]
(the "Transferor") and [name of Certificate Registrar], as Certificate
Registrar, with respect to the mortgage pass-through certificates being
transferred (the "Transferred Certificates") as described in the Transferee
Certificate to which this certification relates and to which this certification
is an Annex:
1. As indicated below, the undersigned is the chief financial
officer, a person fulfilling an equivalent function, or other
executive officer of the entity purchasing the Transferred
Certificates (the "Transferee").
2. The Transferee is a "qualified institutional buyer" as
that term is defined in Rule 144A under the Securities Act of 1933, as
amended ("Rule 144A") because (i) the Transferee owned and/or invested
on a discretionary basis $______________________1 in securities (other
than the excluded securities referred to below) as of the end of the
Transferee's most recent fiscal year (such amount being calculated in
accordance with Rule 144A) and (ii) the Transferee satisfies the
criteria in the category marked below.
____ Corporation, etc. The Transferee is a corporation (other than a
bank, savings and loan association or similar institution), Massachusetts or
similar business trust, partnership, or any organization described in Section
501(c)(3) of the Internal Revenue Code of 1986.
____ Bank. The Transferee (a) is a national bank or a banking
institution organized under the laws of any State, U.S. territory or the
District of Columbia, the business of which is substantially confined to
banking and is supervised by the State or territorial banking commission or
similar official or is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in its latest annual
financial statements, a copy of which is attached hereto, as of a date not more
than 16 months preceding the date of sale of the Certificate in the case of a
U.S. bank, and not more than 18 months preceding such date of sale for a
foreign bank or equivalent institution.
____ Savings and Loan. The Transferee (a) is a savings and loan
association, building and loan association, cooperative bank, homestead
association or similar institution, which is supervised and examined by a State
or Federal authority having supervision over any such institutions or is a
foreign savings and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in its latest annual
financial statements, a copy of which is attached hereto, as of a date not more
than 16 months preceding the date of sale of the Certificate in the case of a
U.S. savings and loan association, and not more than 18 months preceding such
date of sale for a foreign savings and loan association or equivalent
institution.
____ Broker-dealer. The Transferee is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934, as amended.
____ Insurance Company. The Transferee is an insurance company whose
primary and predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and
- ---------
1 Transferee must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Transferee is a dealer, and, in that case,
Transferee must own and/or invest on a discretionary basis at least $10,000,000
in securities.
D2-3
<PAGE>
which is subject to supervision by the insurance commissioner or a similar
official or agency of a State, U.S. territory or the District of Columbia.
____ State or Local Plan. The Transferee is a plan established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the benefit of
its employees.
____ ERISA Plan. The Transferee is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of 1974.
____ Investment Adviser. The Transferee is an investment adviser
registered under the Investment Advisers Act of 1940, as amended.
____ Other. (Please supply a brief description of the entity and a
cross-reference to the paragraph and subparagraph under subsection (a)(1) of
Rule 144A pursuant to which it qualifies. Note that registered investment
companies should complete Annex 2 rather than this Annex 1.)
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee, (ii)
securities that are part of an unsold allotment to or subscription by
the Transferee, if the Transferee is a dealer, (iii) bank deposit
notes and certificates of deposit, (iv) loan participations, (v)
repurchase agreements, (vi) securities owned but subject to a
repurchase agreement and (vii) currency, interest rate and commodity
swaps. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Transferee, the
Transferee did not include any of the securities referred to in this
paragraph.
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the
Transferee, the Transferee used the cost of such securities to the
Transferee, unless the Transferee reports its securities holdings in
its financial statements on the basis of their market value, and no
current information with respect to the cost of those securities has
been published, in which case the securities were valued at market.
Further, in determining such aggregate amount, the Transferee may have
included securities owned by subsidiaries of the Transferee, but only
if such subsidiaries are consolidated with the Transferee in its
financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are
managed under the Transferee's direction. However, such securities
were not included if the Transferee is a majority-owned, consolidated
subsidiary of another enterprise and the Transferee is not itself a
reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Transferee acknowledges that it is familiar with Rule
144A and understands that the Transferor and other parties related to
the Transferred Certificates are relying and will continue to rely on
the statements made herein because one or more sales to the Transferee
may be in reliance on Rule 144A.
____ ____ Will the Transferee be purchasing the Transferred
Yes No Certificates only for the Transferee's own account?
6. If the answer to the foregoing question is "No", then in each case
where the Transferee is purchasing for an account other than its own, such
account belongs to a third party that is itself a "qualified institutional
buyer" within the meaning of Rule 144A, and the "qualified institutional buyer"
status of such third party has been established by the Transferee through one
or more of the appropriate methods contemplated by Rule 144A.
7. The Transferee will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Transferee's purchase of the Transferred
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In
D2-4
<PAGE>
addition, if the Transferee is a bank or savings and loan as provided above,
the Transferee agrees that it will furnish to such parties any updated annual
financial statements that become available on or before the date of such
purchase promptly after they become available.
----------------------------------------
Print Name of Transferee
By:
-------------------------------------
Name
--------------------------------
Title:
------------------------------
Date:
-------------------------------
D2-5
<PAGE>
ANNEX 2 TO EXHIBIT D-2A
-----------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[for Transferees that are Registered Investment Companies]
The undersigned hereby certifies as follows to [name of Transferor]
(the "Transferor") and [name of Certificate Registrar], as Certificate
Registrar, with respect to the mortgage pass-through certificate being
transferred (the "Transferred Certificates") as described in the Transferee
Certificate to which this certification relates and to which this certification
is an Annex:
1. As indicated below, the undersigned is the chief financial
officer, a person fulfilling an equivalent function, or other
executive officer of the entity purchasing the Transferred
Certificates (the "Transferee") or, if the Transferee is a "qualified
institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because the
Transferee is part of a Family of Investment Companies (as defined
below), is an executive officer of the investment adviser (the
"Adviser").
2. The Transferee is a "qualified institutional buyer" as
defined in Rule 144A because (i) the Transferee is an investment
company registered under the Investment Company Act of 1940, as
amended, and (ii) as marked below, the Transferee alone owned and/or
invested on a discretionary basis, or the Transferee's Family of
Investment Companies owned, at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the
Transferee's most recent fiscal year. For purposes of determining the
amount of securities owned by the Transferee or the Transferee's
Family of Investment Companies, the cost of such securities was used,
unless the Transferee of any member of the Transferee's Family of
Investment Companies, as the case may be, reports its securities
holdings in its financial statements on the basis of their market
value, and no current information with respect to the cost of those
securities has been published, in which case the securities of such
entity were valued at market.
The Transferee owned and/or invested on a discretionary basis
$__________ in securities (other than the excluded securities referred to
below) as of the end of the Transferee's most recent fiscal year (such amount
being calculated in accordance with Rule 144A).
The Transferee is part of a Family of Investment Companies which owned
in the aggregate $____________ in securities (other than the excluded
securities referred to below) as of the end of the Transferee's most recent
fiscal year (such amount being calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein
means two or more registered investment companies (or series thereof)
that have the same investment adviser or investment advisers that are
affiliated (by virtue of being majority owned subsidiaries of the same
parent or because one investment adviser is a majority owned
subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are
part of the Transferee's Family of Investment Companies, (ii) bank
deposit notes and certificates of deposit, (iii) loan participations,
(iv) repurchase agreements, (v) securities owned but subject to a
repurchase agreement and (vi) currency, interest rate and commodity
swaps. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Transferee, or
owned by the Transferee's Family of Investment Companies, the
securities referred to in this paragraph were excluded.
D2-6
<PAGE>
5. The Transferee is familiar with Rule 144A and understands
that the parties to which this certification is being made are relying
and will continue to rely on the statements made herein because one or
more sales to the Transferee will be in reliance on Rule 144A.
____ ____ Will the Transferee be purchasing the Transferred
Yes No Certificates only for the Transferee's own account?
6. If the answer to the foregoing question is "No", then in
each case where the Transferee is purchasing for an account other than
its own, such account belongs to a third party that is itself a
"qualified institutional buyer" within the meaning of Rule 144A, and
the "qualified institutional buyer" status of such third party has
been established by the Transferee through one or more of the
appropriate methods contemplated by Rule 144A.
7. The undersigned will notify the parties to which this
certification is made of any changes in the information and
conclusions herein. Until such notice by the undersigned, the
Transferee's purchase of the Transferred Certificates will constitute
a reaffirmation of this certification by the undersigned as of the
date of such purchase.
------------------------------------------
Print Name of Transferee or Adviser
By:
---------------------------------------
Name
----------------------------------
Title:
--------------------------------
Date:
---------------------------------
IF AN ADVISER:
------------------------------------------
Print Name of Transferee
Date:
-------------------------------------
D2-7
<PAGE>
EXHIBIT D-2B
FORM II OF TRANSFEREE CERTIFICATE
FOR TRANSFERS OF DEFINITIVE
PRIVATELY OFFERED CERTIFICATES
[Date]
LaSalle National Bank
135 LaSalle Street
Suite 1625
Chicago, IL 60674-4170
Attention: Asset-Backed Securities Trust Services
Re: Morgan Stanley Capital I Inc., Commercial Mortgage
Pass-Through Certificates, Series 1998-HF2
(the "Certificates")
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
__________________ (the "Transferor") to _____________________ (the
"Transferee") of Class ____ Certificates having an initial Principal Balance or
Notional Amount as of November 12, 1998 (the "Closing Date") of $___________
(the "Transferred Certificates"). The Certificates, including the Transferred
Certificates, were issued pursuant to the Pooling and Servicing Agreement, to
be dated as of November 1, 1998 (the "Pooling and Servicing Agreement") among
Morgan Stanley Capital I Inc., as depositor (the "Depositor"), GMAC Commercial
Mortgage Corporation, as master servicer and as special servicer, LaSalle
National Bank, as trustee and ABN AMRO Bank N.V., as fiscal agent. All
capitalized terms used but not otherwise defined herein shall have the
respective meanings set forth in the Pooling and Servicing Agreement. The
Transferee hereby certifies, represents and warrants to you, as Certificate
Registrar, that:
1. The Transferee is acquiring the Transferred Certificates
for its own account for investment and not with a view to or for sale
or transfer in connection with any distribution thereof, in whole or
in part, in any manner which would violate the Securities Act of 1933,
as amended (the "Securities Act"), or any applicable state securities
laws.
2. The Transferee understands that (a) the Class of
Certificates to which the Transferred Certificates belong has not been
and will not be registered under the Securities Act or registered or
qualified under any applicable state securities laws, (b) none of the
Depositor, the Trustee or the Certificate Registrar is obligated to so
register or qualify the Class of Certificates to which the Transferred
Certificates belong, and (c) no Transferred Certificate may be resold
or transferred unless it is (i) registered pursuant to the Securities
Act and registered or qualified pursuant any applicable state
securities laws or (ii) sold or transferred in transactions which are
exempt from such registration and qualification and the Certificate
Registrar has received either: (A) a certificate from the
Certificateholder desiring to effect such transfer substantially in
the form attached as Exhibit ___ to the Pooling and Servicing
Agreement and a certificate from such Certificateholder's prospective
transferee substantially in the form attached either as Exhibit ___ or
as Exhibit ___ to the Pooling and Servicing Agreement; or (C) an
opinion of counsel satisfactory to the Trustee with respect to the
availability of such exemption from registration under the Securities
Act, together with copies of the written certification(s) from the
transferor and/or transferee setting forth the facts surrounding the
transfer upon which such opinion is based.
D2-8
<PAGE>
3. The Transferee understands that it may not sell or
otherwise transfer any Transferred Certificate except in compliance
with the provisions of Section 3.3 of the Pooling and Servicing
Agreement, which provisions it has carefully reviewed.
4. Transferee understands that each Transferred Certificate
will bear the following legends:
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE
SECURITIES LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE OR ANY INTEREST HEREIN WITHOUT SUCH REGISTRATION OR QUALIFICATION
MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT REQUIRE SUCH REGISTRATION OR
QUALIFICATION AND WHICH IS IN ACCORDANCE WITH THE PROVISIONS OF SECTION 3.3 OF
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF
1986 (THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING
THIS CERTIFICATE ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH
ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, WILL
BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
5. Neither the Transferee nor anyone acting on its behalf has
(a) offered, pledged, sold, disposed of or otherwise transferred any
Certificate, any interest in any Certificate or any other similar
security to any person in any manner, (b) solicited any offer to buy
or accept a pledge, disposition or other transfer of any Certificate,
any interest in any Certificate or any other similar security from any
person in any manner, (c) otherwise approached or negotiated with
respect to any Certificate, any interest in any Certificate or any
other similar security with any person in any manner, (d) made any
general solicitation with respect to any Certificate, any interest in
any Certificate or any other similar security by means of general
advertising or in any other manner, or (e) taken any other action with
respect to any Certificate, any interest in any Certificate or any
other similar security, which (in the case of any of the acts
described in clauses (a) through (e) above) would constitute a
distribution of the Transferred Certificates under the Securities Act,
would render the disposition of the Transferred Certificates a
violation of Section 5 of the Securities Act or any state securities
law or would require registration or qualification of the Transferred
Certificates pursuant thereto. The Transferee will not act, nor has it
authorized or will it authorize any person to act, in any manner set
forth in the foregoing sentence with respect to any Certificate, any
interest in any Certificate or any other similar security.
6. The Transferee has been furnished with all information
regarding (a) the Depositor, (b) the Transferred Certificates and
distributions thereon, (c) the Pooling and Servicing Agreement and the
Trust Fund created pursuant thereto, (d) the nature, performance and
servicing of the Mortgage Loans, and (e) all related matters, that it
has requested.
D2-9
<PAGE>
7. The Transferee is an "accredited investor" as defined in
any of paragraphs (1), (2), (3) and (7) of Rule 501(a) under the
Securities Act or an entity in which all of the equity owners come
within such paragraphs. The Transferee has such knowledge and
experience in financial and business matters as to be capable of
evaluating the merits and risks of an investment in the Transferred
Certificate; the Transferee has sought such accounting, legal and tax
advice as it has considered necessary to make an informed investment
decision; and the Transferee is able to bear the economic risks of
such investment and can afford a complete loss of such investment.
Very truly yours,
--------------------------------------------
(Transferee)
By:
-----------------------------------------
Name
------------------------------------
Title:
----------------------------------
D2-10
<PAGE>
EXHIBIT D-3A
FORM I OF TRANSFEREE CERTIFICATE
FOR TRANSFERS OF INTERESTS IN
BOOK-ENTRY PRIVATELY OFFERED CERTIFICATES
[Date]
[TRANSFEROR]
Re: Morgan Stanley Capital I Inc., Commercial Mortgage
Pass-Through Certificates, Series 1998-HF2
(the "Certificates")
Dear Sirs:
This letter is delivered to you in connection with the transfer by
____________________ (the "Transferor") to __________________ (the
"Transferee") of a Certificate (the "Transferred Certificate") having an
initial Principal Balance or Notional Amount as of November 12, 1998 (the
"Closing Date") of $____________. The Certificates were issued pursuant to the
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"), dated
as of November 1, 1998, among Morgan Stanley Capital I Inc., as depositor (the
"Depositor"), GMAC Commercial Mortgage Corporation, as master servicer and as
special servicer, LaSalle National Bank, as trustee and ABN AMRO Bank N.V., as
fiscal agent. All terms used herein and not otherwise defined shall have the
meanings set forth in the Pooling and Servicing Agreement. The Transferee
hereby certifies, represents and warrants to you, and for the benefit of the
Depositor and the Trustee, that:
1. The Transferee is acquiring the Transferred Certificate
for its own account for investment and not with a view to or for sale
or transfer in connection with any distribution thereof, in whole or
in part, in any manner which would violate the Securities Act of 1933,
as amended (the "Securities Act"), or any applicable state securities
laws.
2. The Transferee understands that (a) the Certificates have
not been and will not be registered under the Securities Act or
registered or qualified under any applicable state securities laws,
(b) none of the Depositor, the Trustee or the Certificate Registrar is
obligated to so register or qualify the Certificates and (c) no
interest in the Certificates may be sold or transferred unless (i)
such Certificates are registered pursuant to the Securities Act and
registered or qualified pursuant to any applicable state securities
laws or (ii) such interest sold or transferred in transactions which
are exempt from such registration and qualification and the
Certificate Owner desiring to effect such transfer has received either
(A) a certification from such Certificate Owner's prospective
transferee (substantially in the form attached to the Pooling and
Servicing Agreement) setting forth the facts surrounding the transfer
or (B) an opinion of counsel satisfactory to the Certificate Registrar
with respect to the availability of such exemption, together with
copies of the certification(s) from the transferor and/or transferee
setting forth the facts surrounding the transfer upon which such
opinion is based.
3. The Transferee understands that it may not sell or
otherwise transfer any portion of its interest in the Transferred
Certificate except in compliance with the provisions of Section 3.3 of
the Pooling and Servicing Agreement, which provisions it has carefully
reviewed.
4. Transferee understands that each Transferred Certificate
will bear the following legends:
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE
SECURITIES LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A
TRANSACTION
D3-1
<PAGE>
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 3.3 OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO A RETIREMENT PLAN OR OTHER EMPLOYEE
BENEFIT PLAN OR ARRANGEMENT THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY
PURCHASING THIS CERTIFICATE ON BEHALF OF, AS INVESTMENT MANAGER OF, AS NAMED
FIDUCIARY OF, AS TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN
OR OTHER RETIREMENT ARRANGEMENT, WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH
THE PROCEDURES DESCRIBED HEREIN.
5. Neither the Transferee nor anyone acting on its behalf has
(a) offered, pledged, sold, disposed of or otherwise transferred any
Certificate, any interest in any Certificate or any other similar
security to any person in any manner, (b) solicited any offer to buy
or accept a pledge, disposition or other transfer of any Certificate,
any interest in any Certificate or any other similar security from any
person in any manner, (c) otherwise approached or negotiated with
respect to any Certificate, any interest in any Certificate or any
other similar security with any person in any manner, (d) made any
general solicitation by means of general advertising or in any other
manner, or (e) taken any other action, that (in the case of any of the
acts described in clauses (a) through (e) above) would constitute a
distribution of any Certificate under the Securities Act, would render
the disposition of an Certificate a violation of Section 5 of the
Securities Act or any state securities law or would require
registration or qualification of any Certificate pursuant thereto. The
Transferee will not act, nor has it authorized or will it authorize
any person to act, in any manner set forth in the foregoing sentence
with respect to any Certificate.
6. The Transferee has been furnished with all information
regarding (a) the Depositor, (b) the Transferred Certificates and
distributions thereon, (c) the Pooling and Servicing Agreement and (d)
all related matters, that it has requested.
7. The Transferee is an institutional "accredited investor"
as defined in Rule 501(a) (1), (2), (3) or (7) under the Securities
Act and has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of an
investment in the Certificates; the Transferee has sought such
accounting, legal and tax advice as it has considered necessary to
make an informed investment decision; and the Transferee is able to
bear the economic risks of such an investment and can afford a
complete loss of such investment.
Very truly yours,
--------------------------------------------
(Transferee)
By:
-----------------------------------------
Name
------------------------------------
Title:
----------------------------------
D3-2
<PAGE>
EXHIBIT D-3B
FORM II OF TRANSFEREE CERTIFICATE
FOR TRANSFERS OF INTERESTS IN
BOOK-ENTRY PRIVATELY OFFERED CERTIFICATES
[Date]
[TRANSFEROR]
Re: Morgan Stanley Capital I Inc., Commercial Mortgage
Pass-Through Certificates, Series 1998-HF2
(the "Certificates")
Dear Sirs:
This letter is delivered to you in connection with the transfer by
____________________ (the "Transferor") to _____________________ (the
"Transferee") of a Certificate (the "Transferred Certificate") having an
initial Principal Balance or Notional Amount as of November 12, 1998 (the
"Closing Date") of $________. The Certificates were issued pursuant to the
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"), dated
as of November 1, 1998, among Morgan Stanley Capital I Inc. as depositor (the
"Depositor"), GMAC Commercial Mortgage Corporation, as master servicer and as
special servicer, LaSalle National Bank as trustee and ABN AMRO Bank N.V., as
fiscal agent. All terms used herein and not otherwise defined shall have the
meanings set forth in the Pooling and Servicing Agreement. The Transferee
hereby certifies, represents and warrants to you, and for the benefit of the
Depositor and the Trustee, that:
1. The Transferee is a "qualified institutional buyer" as
that term is defined in Rule 144A ("Rule 144A") under the Securities
Act of 1933, as amended (the "Securities Act"), and has completed one
of the forms of certification to that effect attached hereto as Annex
1 and Annex 2. The Transferee is aware that the sale to it is being
made in reliance on Rule 144A. The Transferee is acquiring the
Transferred Certificate for its own account or for the account of a
qualified institutional buyer, and understands that such Certificate
or any interest therein may be resold, pledged or transferred only (i)
to a person reasonably believed to be a qualified institutional buyer
that purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to
another exemption from registration under the Securities Act.
2. The Transferee understands that (a) the Class of
Certificates to which the Transferred Certificate belongs have not
been and will not be registered under the Securities Act or registered
or qualified under any applicable state securities laws, (b) none of
the Depositor, the Trustee or the Certificate Registrar is obligated
so to register or qualify the Certificates and (c) no interest in the
Certificates may be sold or transferred unless (i) such Certificates
are registered pursuant to the Securities Act and registered or
qualified pursuant to any applicable state securities laws or (ii)
such interest sold or transferred in transactions which are exempt
from such registration and qualification and the Certificate Owner
desiring to effect such transfer has received either (A) a
certification from such Certificate Owner's prospective transferee
(substantially in the form attached to the Pooling and Servicing
Agreement) setting forth the facts surrounding the transfer or (B) an
opinion of counsel satisfactory to the Certificate Registrar with
respect to the availability of such exemption, together with copies of
the certification(s) from the transferor and/or transferee setting
forth the facts surrounding the transfer upon which such opinion is
based.
3. The Transferee understands that it may not sell or
otherwise transfer any portion of its interest in the Transferred
Certificate except in compliance with the provisions of Section 3.3 of
the Pooling and Servicing Agreement, which provisions it has carefully
reviewed.
D3-3
<PAGE>
4. Transferee understands that each Transferred Certificate
will bear the following legends:
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE
SECURITIES LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A
TRANSACTION WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 3.3 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY
PURCHASING THIS CERTIFICATE ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF,
OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
5. The Transferee has been furnished with all information
regarding (a) the Certificates and distributions thereon, (b) the
nature, performance and servicing of the Mortgage Loans, (c) the
Pooling and Servicing Agreement, and (d) any credit enhancement
mechanism associated with the Transferred Certificate, that it has
requested.
Very truly yours,
--------------------------------------------
(Transferee)
By:
-----------------------------------------
Name
------------------------------------
Title:
----------------------------------
D3-4
<PAGE>
ANNEX 1 TO EXHIBIT D-3B
-----------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned hereby certifies as follows to [name of Transferor]
(the "Transferor"), and for the benefit of the Depositor and the Trustee, as
Certificate Registrar, with respect to the commercial mortgage pass-through
certificate being transferred (the "Transferred Certificate") as described in
the Transferee Certificate to which this certification relates and to which
this certification is an Annex:
1. As indicated below, the undersigned is the chief financial
officer, a person fulfilling an equivalent function, or other
executive officer of the entity purchasing the Transferred Certificate
(the "Transferee").
2. The Transferee is a "qualified institutional buyer" as
that term is defined in Rule 144A under the Securities Act of 1933, as
amended ("Rule 144A"), because (i) the Transferee owned and/or
invested on a discretionary basis $__________ in securities (other
than the excluded securities referred to below) as of the end of the
Transferee's most recent fiscal year (such amount being calculated in
accordance with Rule 144A) and (ii) the Transferee satisfies the
criteria in the category marked below.
____ Corporation, etc. The Transferee is a corporation (other than
a bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or any
organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended.
____ Bank. The Transferee (a) is a national bank or a banking
institution organized under the laws of any State, U.S.
territory or the District of Columbia, the business of which
is substantially confined to banking and is supervised by the
State or territorial banking commission or similar official
or is a foreign bank or equivalent institution, and (b) has
an audited net worth of at least $25,000,000 as demonstrated
in its latest annual financial statements, a copy of which is
attached hereto, as of a date not more than 16 months
preceding the date of sale of the Certificate in the case of
a U.S. bank, and not more than 18 months preceding such date
of sale for a foreign bank or equivalent institution.
____ Savings and Loan. The Transferee (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority
having supervision over any such institutions or is a foreign
savings and loan association or equivalent institution and
(b) has an audited net worth of at least $25,000,000 as
demonstrated in its latest annual financial statements, a
copy of which is attached hereto, as of a date not more than
16 months preceding the date of sale of the Certificate in
the case of a U.S. savings and loan association, and not more
than 18 months preceding such date of sale for a foreign
savings and loan association or equivalent institution.
D3-5
<PAGE>
____ Broker-dealer. The Transferee is a dealer registered
pursuant to Section 15 of the Securities Exchange Act of
1934, as amended.
____ Insurance Company. The Transferee is an insurance company
whose primary and predominant business activity is the
writing of insurance or the reinsuring of risks underwritten
by insurance companies and which is subject to supervision by
the insurance commissioner or a similar official or agency of
a State, U.S. territory or the District of Columbia.
____ State or Local Plan. The Transferee is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
____ ERISA Plan. The Transferee is an employee benefit plan within
the meaning of Title I of the Employee Retirement Income
Security Act of 1974, as amended.
____ Investment Adviser. The Transferee is an investment adviser
registered under the Investment Advisers Act of 1940, as
amended.
____ Other. (Please supply a brief description of the entity and a
cross-reference to the paragraph and subparagraph under
subsection (a)(1) of Rule 144A pursuant to which it
qualifies. Note that registered investment companies should
complete Annex 2 rather than this Annex 1.)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee, (ii)
securities that are part of an unsold allotment to or subscription by
the Transferee, if the Transferee is a dealer, (iii) bank deposit
notes and certificates of deposit, (iv) loan participations, (v)
repurchase agreements, (vi) securities owned but subject to a
repurchase agreement and (vii) currency, interest rate and commodity
swaps. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Transferee, the
Transferee did not include any of the securities referred to in this
paragraph.
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the
Transferee, the Transferee used the cost of such securities to the
Transferee, unless the Transferee reports its securities holdings in
its financial statements on the basis of their market value, and no
current information with respect to the cost of those securities has
been published, in which case the securities were valued at market.
Further, in determining such aggregate amount, the Transferee may have
included securities owned by subsidiaries of the Transferee, but only
if such subsidiaries are consolidated with the Transferee in its
financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are
managed under the Transferee's direction. However, such securities
were not included if the Transferee is a majority-owned, consolidated
subsidiary of another enterprise and the Transferee is not itself a
reporting company under the Securities Exchange Act of 1934, as
amended.
D3-6
<PAGE>
5. The Transferee acknowledges that it is familiar with Rule
144A and understands that the Transferor and other parties related to
the Transferred Certificate are relying and will continue to rely on
the statements made herein because one or more sales to the Transferee
may be in reliance on Rule 144A.
____ ____ Will the Transferee be purchasing the Transferred
Yes No Certificate only for the Transferee's own account?
6. If the answer to the foregoing question is "No", then in
each case where the Transferee is purchasing for an account other than
its own, such account belongs to a third party that is itself a
"qualified institutional buyer" within the meaning of Rule 144A, and
the "qualified institutional buyer" status of such third party has
been established by the Transferee through one or more of the
appropriate methods contemplated by Rule 144A.
7. The Transferee will notify each of the parties to which
this certification is made of any changes in the information and
conclusions herein. Until such notice is given, the Transferee's
purchase of the Transferred Certificate will constitute a
reaffirmation of this certification as of the date of such purchase.
In addition, if the Transferee is a bank or savings and loan as
provided above, the Transferee agrees that it will furnish to such
parties any updated annual financial statements that become available
on or before the date of such purchase, promptly after they become
available.
-----------------------------------------
Print Name of Transferee
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Date:
------------------------------------
D3-7
<PAGE>
ANNEX 2 TO EXHIBIT D-3B
-----------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That Are Registered Investment Companies]
The undersigned hereby certifies as follows to [name of Transferor]
(the "Transferor"), and for the benefit of the Depositor and the Trustee, with
respect to the commercial mortgage pass-through certificate being transferred
(the "Transferred Certificate") as described in the Transferee Certificate to
which this certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the chief financial
officer, a person fulfilling an equivalent function, or other
executive officer of the entity purchasing the Transferred Certificate
(the "Transferee") or, if the Transferee is a "qualified institutional
buyer" as that term is defined in Rule 144A under the Securities Act
of 1933, as amended ("Rule 144A"), because the Transferee is part of a
Family of Investment Companies (as defined below), is an executive
officer of the investment adviser (the "Adviser").
2. The Transferee is a "qualified institutional buyer" as
defined in Rule 144A because (i) the Transferee is an investment
company registered under the Investment Company Act of 1940, as
amended, and (ii) as marked below, the Transferee alone owned and/or
invested on a discretionary basis, or the Transferee's Family of
Investment Companies owned, at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the
Transferee's most recent fiscal year. For purposes of determining the
amount of securities owned by the Transferee or the Transferee's
Family of Investment Company, the cost of such securities was used,
unless the Transferee or any member of the Transferee's Family of
Investment Companies, as the case may be, reports its securities
holdings in its financial statements on the basis of their market
value, and no current information with respect to the cost of those
securities has been published, in which case the securities of such
entity were valued at market.
____ The Transferee owned and/or invested on a discretionary basis
$___________ in securities (other than the excluded
securities referred to below) as of the end of the
Transferee's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
____ The Transferee is part of a Family of Investment Companies
which owned in the aggregate $_________ in securities (other
than the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year (such amount
being calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein
means two or more registered investment companies (or series thereof)
that have the same investment adviser or investment advisers that are
affiliated (by virtue of being majority owned subsidiaries of the same
parent or because one investment adviser is a majority owned
subsidiary of the other).
D3-8
<PAGE>
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are
part of the Transferee's Family of Investment Companies, (ii) bank
deposit notes and certificates of deposit, (iii) loan participations,
(iv) repurchase agreements, (v) securities owned but subject to a
repurchase agreement and (vi) currency, interest rate and commodity
swaps. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Transferee, or
owned by the Transferee's Family of Investment Companies, the
securities referred to in this paragraph were excluded.
5. The Transferee is familiar with Rule 144A and understands
that the parties to which this certification is being made are relying
and will continue to rely on the statements made herein because one or
more sales to the Transferee will be in reliance on Rule 144A.
____ ____ Will the Transferee be purchasing the Transferred
Yes No Certificate only for the Transferee's own account?
6. If the answer to the foregoing question is "No", then in
each case where the Transferee is purchasing for an account other than
its own, such account belongs to a third party that is itself a
"qualified institutional buyer" within the meaning of Rule 144A, and
the "qualified institutional buyer" status of such third party has
been established by the Transferee through one or more of the
appropriate methods contemplated by Rule 144A.
7. The undersigned will notify the parties to which this
certification is made of any changes in the information and
conclusions herein. Until such notice, the Transferee's purchase of
the Transferred Certificate will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
-----------------------------------------
Print Name of Transferee or Adviser
By:
--------------------------------------
Name:
------------------------------------
Date:
------------------------------------
IF AN ADVISER:
-----------------------------------------
Print Name of Transferee
Date:
------------------------------------
D3-9
<PAGE>
EXHIBIT E
FORM OF TRANSFEROR CERTIFICATE FOR TRANSFERS OF
REMIC RESIDUAL CERTIFICATES
[Date]
LaSalle National Bank,
as Certificate Registrar
135 South LaSalle Street
Suite 1625
Chicago, Illinois 60674-4107
Attention: Asset-Backed Securities Trust Services Group - Morgan Stanley
Series 1998 - HF2
Re: Morgan Stanley Capital I Inc., Commercial Mortgage
Pass-Through Certificates, Series 1998-HF2 (the
"Certificates")
--------------------------------------------------
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
________________ (the "Transferor") to __________________ (the "Transferee") of
[Class R-I] [Class R-II] [Class R-III] Certificates evidencing a ____%
Percentage Interest in such Class (the "Residual Certificates"). The
Certificates, including the Residual Certificates, were issued pursuant to the
Pooling and Servicing Agreement, dated as of November 1, 1998 (the "Pooling and
Servicing Agreement"), among Morgan Stanley Capital I Inc., as depositor, GMAC
Commercial Mortgage Corporation, as master servicer and as special servicer,
LaSalle National Bank, as trustee, and ABN AMRO Bank N.V., as fiscal agent. All
capitalized terms used but not otherwise defined herein shall have the
respective meanings set forth in the Pooling and Servicing Agreement. The
Transferor hereby certifies, represents and warrants to you, as Certificate
Registrar, that:
1. No purpose of the Transferor relating to the transfer of the
Residual Certificates by the Transferor to the Transferee is or will be to
impede the assessment or collection of any tax.
2. The Transferor understands that the Transferee has delivered to you
a Transfer Affidavit and Agreement in the form attached to the Pooling and
Servicing Agreement as Exhibit F. The Transferor does not know or believe that
any representation contained therein is false.
3. The Transferor has at the time of this transfer conducted a
reasonable investigation of the financial condition of the Transferee as
contemplated by Treasury regulation Section 1.860E-1(c)(4)(i) and, as a result
of that investigation, the Transferor has determined that the Transferee has
historically paid its debts as they became due and has found no significant
evidence to indicate that the Transferee will not continue to pay its debts as
they become due in the future. The Transferor understands that the transfer of
the Residual Certificates may not be respected for United States income tax
purposes (and the Transferor may continue to be liable for United States income
taxes associated therewith) unless the Transferor has conducted such an
investigation.
Very truly yours,
E-1
<PAGE>
-----------------------------------------
(Transferor)
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
E-2
<PAGE>
EXHIBIT F
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
FOR TRANSFERS OF REMIC RESIDUAL CERTIFICATES
STATE OF )
) ss:
COUNTY OF )
__________________________, being first duly sworn, deposes and says
that:
1. He/She is the ___________________________ of ___________________
(the prospective transferee (the "Transferee") of Morgan Stanley Capital I
Inc., Commercial Mortgage Pass-Through Certificates, Series 1998-HF2, Class
[R-I] [R-II] [R-III], evidencing a ____% Percentage Interest in such Class (the
"Residual Certificates")), a ___________________ duly organized and validly
existing under the laws of _________________, on behalf of which he/she makes
this affidavit. All capitalized terms used but not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement pursuant to which the Residual Certificates were issued (the "Pooling
and Servicing Agreement").
2. The Transferee (i) is, and as of the date of transfer will be, a
"Permitted Transferee" and will endeavor to remain a "Permitted Transferee" for
so long as it holds the Residual Certificates, and (ii) is acquiring the
Residual Certificates for its own account or for the account of another
prospective transferee from which it has received an affidavit in substantially
the same form as this affidavit. A "Permitted Transferee" is any Person other
than a "disqualified organization" or a possession of the United States. (For
this purpose, a "disqualified organization" means the United States, any state
or political subdivision thereof, any agency or instrumentality of any of the
foregoing (other than an instrumentality, all of the activities of which are
subject to tax and, except for the Federal Home Loan Mortgage Corporation, a
majority of whose board of directors is not selected by any such governmental
entity) or any foreign government, international organization or any agency or
instrumentality of such foreign government or organization, any rural electric
or telephone cooperative, or any organization (other than certain farmers'
cooperatives) that is generally exempt from federal income tax unless such
organization is subject to the tax on unrelated business taxable income.)
3. The Transferee is aware (i) of the tax that would be imposed on
transfers of the Residual Certificates to "disqualified organizations" under
the Code that applies to all transfers of the Residual Certificates; (ii) that
such tax would be on the transferor or, if such transfer is through an agent
(which Person includes a broker, nominee or middleman) for a non-Permitted
Transferee, on the agent; (iii) that the Person otherwise liable for the tax
shall be relieved of liability for the tax if the transferee furnishes to such
Person an affidavit that the transferee is a Permitted Transferee and, at the
time of transfer, such Person does not have actual knowledge that the affidavit
is false; and (iv) that the Residual Certificates may be a "noneconomic
residual interest" within the meaning of Treasury regulation Section
1.860E-1(c) and that the transferor of a "noneconomic residual interest" will
remain liable for any taxes due with respect to the income on such residual
interest, unless no significant purpose of the transfer is to enable the
transferor to impede the assessment or collection of tax.
4. The Transferee is aware of the tax imposed on a "pass-through
entity" holding the Residual Certificates if at any time during the taxable
year of the pass-through entity a non-Permitted Transferee is the record holder
of an interest in such entity. (For this purpose, a "pass-through entity"
includes a regulated
F-1
<PAGE>
investment company, a real estate investment trust or common trust fund, a
partnership, trust or estate, and certain cooperatives.)
5. The Transferee is aware that the Certificate Registrar will not
register any transfer of the Residual Certificates by the Transferee unless the
Transferee's transferee, or such transferee's agent, delivers to the
Certificate Registrar, among other things, an affidavit and agreement in
substantially the same form as this affidavit and agreement. The Transferee
expressly agrees that it will not consummate any such transfer if it knows or
believes that any representation contained in such affidavit and agreement is
false.
6. The Transferee consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to
constitute a reasonable arrangement to ensure that the Residual Certificate
will only be owned, directly or indirectly, by a Permitted Transferee.
7. The Transferee's taxpayer identification number is
_________________.
8. The Transferee has reviewed the provisions of Section 3.3(f) of the
Pooling and Servicing Agreement, a description of which provisions is set forth
in the Residual Certificates (in particular, clause (iv)(A) of Section 3.3(f)
which authorizes the Trustee to deliver payments on the Residual Certificate to
a Person other than the Transferee and clause (iv)(B) of Section 3.3(f) which
authorizes the Trustee to negotiate a mandatory sale of the Residual
Certificates, in either case, in the event that the Transferee holds such
Residual Certificates in violation of Section 3.3(f)); and the Transferee
expressly agrees to be bound by and to comply with such provisions.
9. No purpose of the Transferee relating to its purchase or any sale
of the Residual Certificates is or will be to impede the assessment or
collection of any tax.
10. The Transferee hereby represents to and for the benefit of the
transferor that the Transferee intends to pay any taxes associated with holding
the Residual Certificates as they become due, fully understanding that it may
incur tax liabilities in excess of any cash flows generated by the Residual
Certificates.
11. The Transferee will, in connection with any transfer that it makes
of the Residual Certificates, deliver to the Certificate Registrar a
representation letter substantially in the form of Exhibit E to the Pooling and
Servicing Agreement in which it will represent and warrant, among other things,
that it is not transferring the Residual Certificates to impede the assessment
or collection of any tax and that it has at the time of such transfer conducted
a reasonable investigation of the financial condition of the proposed
transferee as contemplated by Treasury regulation Section 1.860E-l(c)(4)(i) and
has satisfied the requirements of such provision.
12. The Transferee is a citizen or resident of the United States, a
corporation, a partnership or other entity created or organized in, or under
the laws of, the United States or any political subdivision thereof, or an
estate or trust whose income from sources without the United States is
includable in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States.
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its ____________ and its corporate seal to be hereunto attached, attested by
its [Assistant] Secretary, this ___ day of _______________, 199_.
[NAME OF TRANSFEREE]
By:
----------------------------------
F-2
<PAGE>
[Name of Officer]
[Title of Officer]
- ------------------------------
[Corporate Seal]
ATTEST:
- ------------------------------
[Assistant] Secretary
Personally appeared before me the above-named ____________________,
known or proved to me to be the same person who executed the foregoing
instrument and to be the ___________________________ of the Transferee, and
acknowledged to me that he/she executed the same as his/her free act and deed
and the free act and deed of the Transferee
Subscribed and sworn before me this ___ day of __________________,
199_.
-----------------------------------
NOTARY PUBLIC
COUNTY OF
--------------------------
STATE OF
---------------------------
My Commission expires the ____
day of _________________, 19___.
F-3
<PAGE>
EXHIBIT G-1
FORM OF MONTHLY CERTIFICATEHOLDER REPORT
G-1-1
<PAGE>
EXHIBIT G-2
FORM OF SPECIALLY SERVICED ASSET REPORT
G-3-1
<PAGE>
EXHIBIT H-1
COMPARATIVE FINANCIAL STATUS REPORT
H-1
<PAGE>
EXHIBIT H-2
COMPARATIVE FINANCIAL STATUS REPORT
H-2
<PAGE>
EXHIBIT H-3
HISTORICAL LOAN MODIFICATION REPORT
H-3
<PAGE>
EXHIBIT H-4
HISTORICAL LOSS ESTIMATE REPORT
H-4
<PAGE>
EXHIBIT H-5
REO STATUS REPORT
H-5
<PAGE>
EXHIBIT H-6
WATCH LIST
H-6
<PAGE>
EXHIBIT H-7
OPERATING STATEMENT ANALYSIS
H-7
<PAGE>
EXHIBIT H-8
NOI ADJUSTMENT WORKSHEET
H-8
<PAGE>
EXHIBIT H-9
CSSA REPORTS
H-9
<PAGE>
EXHIBIT H-10
CSSA REPORTS
H-10
<PAGE>
EXHIBIT H-11
CSSA REPORTS
Subject to the terms of the Pooling and Servicing Agreement, the Class
A-1 and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance, as applicable
and in any whole dollar denomination in excess thereof. The remaining
Certificates will initially be issued in denominations of $100,000 initial
Certificate Principal Balance or Certificate Notional Amount and in any whole
dollar denomination in excess thereof. Each Class of Certificates other than
the Residual Certificates will be represented by one or more Certificates
registered in the name of Cede & Co., as nominee of the DTC. No Certificate
Owner will be entitled to receive a Definitive Certificate representing such
interest, except under the limited circumstances described in the Pooling and
Servicing Agreement. The Residual Certificates will be issued in fully
registered, certificated form in minimum percentage interests of 10% and in
multiples of 10% in excess thereof.
H-11
