SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report: November 4, 1998
(Date of earliest event reported)
Morgan Stanley Capital I Inc.
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(Exact name of registrant as specified in its charter)
Delaware 333-62911-01 13-3291626
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(State or Other (Commission (I.R.S. Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
1585 Broadway, New York, N.Y. 10036
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 761-4000
<PAGE>
Item 5. Other Events.
Attached as Exhibit 1 is the Pooling and Servicing Agreement (as defined
below) for the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-XL2 (the "Certificates"). On October 15, 1998, Morgan
Stanley Capital I Inc. (the "Company") caused the issuance of the Certificates,
pursuant to a Pooling and Servicing Agreement dated as of October 1, 1998 (the
"Pooling and Servicing Agreement") by and among the Company, Midland Loan
Services, Inc., as master servicer, Midland Loan Services, Inc., as special
servicer and , as trustee, in eleven classes: the Class A-1, Class A-2, Class X,
Class B, Class C, Class D, Class E, Class F, Class Q, Class R and Class LR
Certificates.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
Item 601(a) of
Regulation S-K
Exhibit No. Exhibit No. Description
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1 4 Pooling and Servicing Agreement dated as of
October 1, 1998.
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on behalf of the
Registrant by the undersigned thereunto duly authorized.
MORGAN STANLEY CAPITAL I INC.
By: /s/ James E. Flaum
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Name: James E. Flaum
---------------------
Title: Vice President
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Date: October __, 1998
Execution Copy
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MORGAN STANLEY CAPITAL I INC.,
Depositor,
MIDLAND LOAN SERVICES, INC.,
Master Servicer,
MIDLAND LOAN SERVICES, INC.,
Special Servicer,
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
Trustee
---------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of October 1, 1998
---------------------------------
Commercial Mortgage Pass-Through Certificates
Series 1998-XL2
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<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms ..................................................
SECTION 1.02. Certain Calculations ...........................................
SECTION 1.03. Certain Constructions ..........................................
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans;
Assignment of Loan Sale Agreement ............................
SECTION 2.02. Acceptance by Custodian and the Trustee ........................
SECTION 2.03. Representations and Warranties of the Depositor ................
SECTION 2.04. Representations, Warranties and Covenants
of the Master Servicer and Special Servicer ..................
SECTION 2.05. Execution and Delivery of Certificates;
Issuance of Lower-Tier Regular Interests .....................
SECTION 2.06. Miscellaneous REMIC and Grantor Trust Provisions ...............
ARTICLE III
ADMINISTRATION AND SERVICING OF
THE MORTGAGE LOANS
SECTION 3.01. Master Servicer to Act as Master Servicer;
Administration of the Mortgage Loans .........................
SECTION 3.02. Liability of the Master Servicer and Special Servicer ..........
SECTION 3.03. Collection of Certain Mortgage Loan Payments ...................
SECTION 3.04. Collection of Taxes, Assessments and Similar Items;
Escrow Accounts ..............................................
SECTION 3.05. Collection Account; Upper-Tier Distribution Account;
Lower-Tier Distribution Account; Class Q Distribution
Account; and Deferred Interest Distribution Account ..........
SECTION 3.06. Permitted Withdrawals from the Collection Account ..............
SECTION 3.07. Investment of Funds in the Collection Account,
the Interest Reserve Account, the REO Account,
the Borrower Accounts, and Other Accounts ....................
SECTION 3.08. Maintenance of Insurance Policies and Errors
and Omissions and Fidelity Coverage ..........................
SECTION 3.09. Enforcement of Due-On-Sale Clauses; Assumption
Agreements; Defeasance Provisions ............................
SECTION 3.10. Realization Upon Defaulted Mortgage Loans ......................
SECTION 3.11. Trustee to Cooperate; Release of Mortgage Files ................
SECTION 3.12. Servicing Fees, Trustee Fees and
Special Servicing Compensation ...............................
SECTION 3.13. Reports to the Trustee; Collection Account Statements ..........
SECTION 3.14. Annual Statement as to Compliance ..............................
SECTION 3.15. Annual Independent Public Accountants'Servicing Report .........
SECTION 3.16. Access to Certain Documentation ................................
SECTION 3.17. Title and Management of REO Properties .........................
SECTION 3.18. Sale of Specially Serviced
Mortgage Loans and REO Properties ............................
SECTION 3.19. Additional Obligations of the Master Servicer;
Inspections; Successor Manager ...............................
SECTION 3.20. Reports to the Securities and Exchange Commission;
Available Information ........................................
SECTION 3.21. Lock-Box Accounts, Cash Collateral Accounts,
Escrow Accounts and Reserve Accounts .........................
SECTION 3.22. Property Advances ..............................................
SECTION 3.23. Appointment of Special Servicer ................................
SECTION 3.24. Transfer of Servicing Between
Master Servicer and Special Servicer; Record Keeping .........
SECTION 3.25. Limitations on and Authorizations of the Master
Servicer and Special Servicer with Respect to
Specific Mortgage Loans ......................................
SECTION 3.26. Modifications ..................................................
SECTION 3.27. Interest Reserve Account .......................................
ARTICLE IV
DISTRIBUTIONS TO
CERTIFICATEHOLDERS
SECTION 4.01. Distributions ..................................................
SECTION 4.02. Statements to Certificateholders;
Available Information; Information Furnished to
Financial Market Publisher ...................................
SECTION 4.03. Compliance with Withholding Requirements .......................
SECTION 4.04. REMIC Compliance ...............................................
SECTION 4.05. Imposition of Tax on the Trust Fund ............................
SECTION 4.06. Remittances; P&I Advances ......................................
SECTION 4.07. Grantor Trust Reporting ........................................
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates ...............................................
SECTION 5.02. Registration, Transfer and Exchange of Certificates ............
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates ..............
SECTION 5.04. Appointment of Paying Agent ....................................
SECTION 5.05. Access to Certificateholders'Names and Addresses ...............
SECTION 5.06. Actions of Certificateholders ..................................
SECTION 5.07. Authenticating Agent ...........................................
SECTION 5.08. Appointment of Custodians ......................................
ARTICLE VI
THE DEPOSITOR, THE MASTER
SERVICER AND THE SPECIAL SERVICER
SECTION 6.01. Liability of the Depositor, the Master
Servicer and the Special Servicer ............................
SECTION 6.02. Merger or Consolidation of the Master Servicer
and the Special Servicer .....................................
SECTION 6.03. Limitation on Liability of the Depositor, the
Master Servicer and Others ...................................
SECTION 6.04. Limitation on Resignation of the Master
Servicer or Special Servicer .................................
SECTION 6.05. Rights of the Depositor and the Trustee in
Respect of the Master Servicer and Special Servicer ..........
SECTION 6.06. Master Servicer or Special Servicer as Owner of a Certificate ..
ARTICLE VII
DEFAULT
SECTION 7.01. Events of Default ..............................................
SECTION 7.02. Trustee to Act; Appointment of Successor .......................
SECTION 7.03. Notification to Certificateholders .............................
SECTION 7.04. Other Remedies of Trustee ......................................
SECTION 7.05. Waiver of Past Events of Default; Termination ..................
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee ..............................................
SECTION 8.02. Certain Matters Affecting the Trustee ..........................
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage Loans ..........
SECTION 8.04. Trustee May Own Certificates ...................................
SECTION 8.05. Payment of Trustee Fees and Expenses; Indemnification ..........
SECTION 8.06. Eligibility Requirements for Trustee ...........................
SECTION 8.07. Resignation and Removal of the Trustee .........................
SECTION 8.08. Successor Trustee ..............................................
SECTION 8.09. Merger or Consolidation of Trustee .............................
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee ..................
SECTION 8.11. Representations and Warranties of the Trustee ..................
ARTICLE IX
TERMINATION; OPTIONAL MORTGAGE
LOAN PURCHASE
SECTION 9.01. Termination; Optional Mortgage Loan Purchase ...................
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Counterparts ..................................................
SECTION 10.02. Limitation on Rights of Certificateholders ....................
SECTION 10.03. Governing Law .................................................
SECTION 10.04. Notices .......................................................
SECTION 10.05. Severability of Provisions ....................................
SECTION 10.06. Notice to the Depositor and Each Rating Agency ................
SECTION 10.07. Amendment .....................................................
SECTION 10.08. Confirmation of Intent ........................................
SECTION 10.09. Third-Party Beneficiaries .....................................
<PAGE>
TABLE OF EXHIBITS
Exhibit A-1 Form of Class A-1 Certificate
Exhibit A-2 Form of Class A-2 Certificate
Exhibit A-3 Form of Class X Certificate
Exhibit A-4 Form of Class B Certificate
Exhibit A-5 Form of Class C Certificate
Exhibit A-6 Form of Class D Certificate
Exhibit A-7 Form of Class E Certificate
Exhibit A-8 Form of Class F Certificate
Exhibit A-9 Form of Class Q Certificate
Exhibit A-10 Form of Class R Certificate
Exhibit A-11 Form of Class LR Certificate
Exhibit B Mortgage Loan Schedule
Exhibit C-1 Form of Transferee Affidavit
Exhibit C-2 Form of Transferor Letter
Exhibit D-1 Form of Investment Representation Letter
Exhibit D-2 Form of ERISA Representation Letter
Exhibit E Form of Request for Release
Exhibit F Securities Legend
Exhibit G Loan Sale Agreement
Exhibit H Form of Summary Report
Exhibit I Form of Monthly Distribution Statement
Exhibit J Reserved
Exhibit K Form of Regulation S Transfer Certificate
Exhibit L Form of Transfer Certificate for Exchange or Transfer from
Rule 144A Global Certificate to Regulation S Global
Certificate during the Restricted Period
Exhibit M Form of Transfer Certificate for Exchange or Transfer from
Rule 144A Global Certificate to Regulation S Global
Certificate after the Restricted Period
Exhibit N Form of Transfer Certificate for Exchange or Transfer from
Regulation S Global Certificate to Rule 144A Global
Certificate
<PAGE>
Pooling and Servicing Agreement, dated as of October 1, 1998, among Morgan
Stanley Capital I Inc., as Depositor, Midland Loan Services, Inc., as Master
Servicer, Midland Loan Services, Inc., as Special Servicer and Norwest Bank
Minnesota, National Association, as Trustee.
PRELIMINARY STATEMENT:
(Terms used but not defined in this Preliminary
Statement shall have the meanings
specified in Article I hereof)
The Depositor intends to sell pass-through certificates to be issued
hereunder in multiple classes which in the aggregate will evidence the entire
beneficial ownership interest in the Trust Fund consisting primarily of the
Mortgage Loans. As provided herein, the Trustee will elect that the Trust Fund,
exclusive of the Default Interest, the Class Q Distribution Account, the
Deferred Interest and the Deferred Interest Distribution Account (such portion
of the Trust Fund, the "Trust REMICs"), be treated for federal income tax
purposes as two separate real estate mortgage investment conduits (each, a
"REMIC" or, in the alternative, the "Upper-Tier REMIC" and the "Lower-Tier
REMIC," respectively). The Class A-1, Class A-2, Class X, Class B, Class C,
Class D, Class E and Class F Certificates represent "regular interests" in the
Upper-Tier REMIC. The Class R Certificates constitute the sole class of
"residual interests" in the Upper-Tier REMIC. The Class LR Certificates
constitute the sole class of "residual interests" in the Lower-Tier REMIC for
purposes of the REMIC Provisions. There are also seven classes of uncertificated
Lower-Tier Regular Interests issued under this Agreement (the Class LA-1, Class
LA-2, Class LB, Class LC, Class LD, Class LE and Class LF Interests), each of
which will constitute a regular interest in the Lower-Tier REMIC. All such
Lower-Tier Regular Interests will be held by the Trustee as assets of the
Upper-Tier REMIC. The parties intend that the portions of the Trust Fund
representing assets of the Grantor Trust, including the Default Interest, the
Class Q Distribution Account, the Deferred Interest and the Deferred Interest
Distribution Account will be treated as a grantor trust under Subpart E of Part
1 of Subchapter J of the Code, that the Class Q Certificates represent pro rata
undivided beneficial interests in the portion of the Trust Fund consisting of
the Default Interest, subject to the obligation of the Trust Fund to pay Advance
Interest Amounts, and the Class Q Distribution Account, and that the Class B,
Class C, Class D, Class E and Class F Certificates represent undivided
beneficial interests in specified portions of the Trust Fund consisting of the
Deferred Interest and the Deferred Interest Distribution Account.
The following table sets forth the designation and aggregate initial
Certificate Principal Amount (or, with respect to the Class X Certificates,
aggregate initial Notional Amount) for each Class of Certificates (other than
the Class R, Class LR and Class Q Certificates).
Initial Certificate
Principal Amount or
Class Notional Amount
----- ---------------
Class A-1................................... $ 43,300,000
Class A-2................................... $ 467,121,000
Class X (1)................................. $ 706,465,702
Class B..................................... $ 75,945,000
Class C..................................... $ 42,388,000
Class D..................................... $ 45,920,000
Class E..................................... $ 21,194,000
Class F..................................... $ 10,597,702
(1) The initial Notional Amount of the Class X Certificates is equal to the
aggregate of the initial Certificate Principal Amounts of the Class LA-1, Class
LA-2, Class LB, Class LC and Class LD Lower-Tier Regular Interests, which
corresponds to the aggregate of the initial Certificate Principal Amounts of the
Class A-1, Class A-2, Class B, Class C and Class D Certificates.
The Class Q, Class R and Class LR Certificates do not have Certificate
Principal Amounts or Notional Amounts. The Certificate Principal Amount of any
Class of Certificates outstanding at any time represents the maximum amount
which holders thereof are entitled to receive as distributions allocable to
principal from the cash flow on the Mortgage Loans and the other assets in the
Trust Fund; provided, however, that in the event that amounts previously
allocated as Realized Losses to a Class of Certificates in reduction of the
Certificate Principal Amount thereof are recovered subsequent to the reduction
of the Certificate Principal Amount of such Class to zero, such Class may
receive distributions in respect of such recoveries in accordance with the
priorities set forth in Section 4.01. As of the Cut-Off Date, the Mortgage Loans
have an aggregate Stated Principal Balance equal to $706,465,702.
In consideration of the mutual agreements herein contained, the Depositor,
the Master Servicer, the Special Servicer and the Trustee agree as follows:
<PAGE>
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms.
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the meanings specified in this
Article.
"Accountant's Statement": As defined in Section 3.15.
"Act": The Securities Act of 1933, as it may be amended from time to time.
"Additional Trust Fund Expenses": (i) Special Servicing Fees, Special
Servicing Rehabilitation Fees and Liquidation Fees, (ii) interest in respect of
unreimbursed Advances, (iii) the cost of various default-related or
unanticipated Opinions of Counsel required or permitted to be obtained in
connection with the servicing of the Mortgage Loans and the administration of
the Trust Fund, (iv) unanticipated, non-Mortgage Loan specific expenses of the
Trust Fund, including indemnities and expense reimbursements to the Trustee,
indemnities and expense reimbursements to the Master Servicer, the Special
Servicer and the Depositor and federal, state and local taxes, and tax-related
expenses, specifically payable out of the Trust Fund and (v) any other
default-related or unanticipated expense of the Trust Fund not specifically
included in the calculation of Realized Loss for which there is no corresponding
collection from a borrower.
"Advance": Any P&I Advance or Property Advance.
"Advance Interest Amount": Interest at the Advance Rate on the aggregate
amount of P&I Advances and Property Advances for which the Master Servicer, the
Special Servicer or the Trustee, as applicable, have not been reimbursed for the
number of days from the date on which such Advance was made, provided, that,
with respect to a P&I Advance, in the event that the related Borrower makes
payment of the amount in respect of which such P&I Advance was made with
interest at the Default Rate, the Advance Interest Amount payable to the Master
Servicer or the Trustee shall be paid (i) first from the amount of Default
Interest paid by the Borrower and (ii) to the extent such amounts are
insufficient therefor, from amounts on deposit in the Collection Account.
"Advance Rate": A per annum rate equal to the Prime Rate (as most recently
published in the "Money Rates" section of The Wall Street Journal, New York
edition from time to time), compounded monthly as of each Master Servicer
Remittance Date.
"Adverse REMIC Event": As defined in Section 4.04(b).
"Affiliate": With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing. The Trustee may obtain
and rely on an Officers' Certificate of the Master Servicer, the Special
Servicer or the Depositor to determine whether any Person is an Affiliate of
such party.
"Affiliate Loan": That certain mezzanine loan, when and if made by Secore
to an affiliate of the Borrower with respect to the NorthTown Mall Loan as
permitted by and subject to the terms and conditions of the NorthTown Mall loan
documents.
"Affiliated Person": Any Person involved in the organization or operation
of the Depositor or an affiliate, as defined in Rule 405 of the Act, of such
Person.
"Agent Member": Members of, or participants in, the Depository.
"Agreement": This Pooling and Servicing Agreement and all amendments hereof
and supplements hereto.
"Allocated Loan Amount": With respect to each Mortgaged Property as of any
date of determination, the portion of the principal balance of the related
Mortgage Loan then allocated to such Mortgaged Property in accordance with the
terms of the applicable Mortgage or Loan Agreement; provided, that the Allocated
Loan Amount for a Mortgaged Property shall not be decreased by the amount of any
release payment made by the related Borrower with respect to any other Mortgaged
Property securing the same Mortgage Loan, to the extent the amount of the
release payment paid by such Borrower with respect to such other Mortgaged
Property is in excess of the Allocated Loan Amount for such other Mortgaged
Property.
"Annual Compliance Report": A report consisting of an annual statement of
compliance required by Section 3.14 hereof and an annual report of an
Independent accountant required pursuant to Section 3.15 hereof.
"Anticipated Termination Date": Any Distribution Date on which it is
anticipated that the Trust Fund will be terminated pursuant to Section 9.01(c).
"Applicable Monthly Payment": As defined in Section 4.06.
"Applicable Procedures": As defined in Section 5.02(c)(iv).
"Applicable State and Local Tax Law": For purposes hereof, the Applicable
State and Local Tax Law shall be (a) the tax laws of the State of New York, the
State of Missouri and the State of Maryland; and (b) such other state or local
tax laws whose applicability shall have been brought to the attention of the
Trustee by either (i) an Opinion of Counsel delivered to it, or (ii) written
notice from the appropriate taxing authority as to the applicability of such
state or local tax laws.
"Applicant": As defined in Section 5.05.
"Appraisal Reduction Amount": For any Distribution Date and for any
Mortgage Loan as to which an Appraisal Reduction Event has occurred, an amount
equal to the excess, if any, of (a) the Stated Principal Balance of such
Mortgage Loan as of the last day of the related Collection Period over (b) the
excess of (i) 90% of the sum of the appraised values of the related Mortgaged
Properties as determined by Updated Appraisals obtained by the Special Servicer
(the cost of which shall be advanced by the Master Servicer as a Property
Advance) over (ii) the sum of (A) to the extent not previously advanced by the
Master Servicer or the Trustee, all unpaid interest on such Mortgage Loan at a
per annum rate equal to its Mortgage Rate, (B) all unreimbursed Advances, with
interest thereon at the Advance Rate (to the extent provided hereunder) in
respect of such Mortgage Loan and (C) all currently due and unpaid real estate
taxes, ground rents, if applicable, and assessments and insurance premiums and
all other amounts due and unpaid with respect to such Mortgage Loan (which
taxes, premiums and other amounts have not been the subject of an Advance by the
Master Servicer, or the Trustee, as applicable). If no Updated Appraisal has
been obtained within the 12 months prior to the first Distribution Date on or
after an Appraisal Reduction Event has occurred, the Special Servicer shall
estimate the value of the related Mortgaged Properties (the "Special Servicer's
Appraisal Estimate") and such estimate shall be used for purposes of determining
the Appraisal Reduction Amount for such Distribution Date. Within 60 days after
the Special Servicer receives written notice or is otherwise aware of the
Appraisal Reduction Event (or such longer period of time, not to exceed 30 days,
provided that the Special Servicer is diligently proceeding in accordance with
the Servicing Standard to obtain such appraisal), the Special Servicer shall
obtain an independent MAI appraisal, the cost of which shall be paid by the
Master Servicer as a Property Advance; provided, however, that with respect to
an Appraisal Reduction Event enumerated in clause (ii) of the definition of
Appraisal Reduction Event, the Special Servicer shall obtain such appraisal no
later than 120 days following the date of the related delinquency. On the first
Distribution Date occurring on or after the delivery of such independent MAI
appraisal, the Special Servicer shall adjust the Appraisal Reduction Amount to
take into account such appraisal (regardless of whether the Updated Appraisal is
higher or lower than the Special Servicer's Appraisal Estimate). Each Appraisal
Reduction Amount shall also be adjusted with respect to the next Distribution
Date to take into account any subsequent Updated Appraisal and annual letter
updates, as of the date of each such subsequent Updated Appraisal or letter
update. Upon payment in full or liquidation of any Mortgage Loan for which an
Appraisal Reduction Amount has been determined, such Appraisal Reduction Amount
shall be equal to zero.
"Appraisal Reduction Event": With respect to any Mortgage Loan, the
earliest of (i) the third anniversary of the date on which an extension of the
Maturity Date of such Mortgage Loan becomes effective as a result of a
modification of such Mortgage Loan by the Special Servicer pursuant to the terms
hereof, which extension does not change the amount of Monthly Payments on the
Mortgage Loan, (ii) 90 days after an uncured delinquency (without regard to the
application of any grace period) occurs in respect of such Mortgage Loan, (iii)
45 days after the date on which a reduction in the amount of Monthly Payments on
the Mortgage Loan, or a change in any other material economic term of the
Mortgage Loan, becomes effective as a result of a modification of such Mortgage
Loan by the Special Servicer, (iv) 30 days after a receiver in respect of the
related Mortgaged Property has been appointed, (v) immediately after a voluntary
or involuntary petition for bankruptcy has been filed by or against the related
Borrower in a court of competent jurisdiction and (vi) immediately after a
Mortgage Loan becomes an REO Mortgage Loan. The Special Servicer shall notify
the Master Servicer and the Master Servicer shall notify the Special Servicer,
as applicable, promptly upon receiving notice of the occurrence of any of the
foregoing events.
"Assignment of Leases, Rents and Profits": With respect to any Mortgaged
Property, any assignment of leases, rents and profits or similar agreement
executed by the Borrower, assigning to the mortgagee all of the income, rents
and profits derived from the ownership, operation, leasing or disposition of all
or a portion of such Mortgaged Property, in the form which was duly executed,
acknowledged and delivered, as amended, modified, renewed or extended through
the date hereof and from time to time hereafter.
"Assignment of Mortgage": An assignment of Mortgage without recourse,
notice of transfer or equivalent instrument, in recordable form, which is
sufficient under the laws of the jurisdiction in which the related Mortgaged
Property is located to reflect of record the sale of the Mortgage, which
assignment, notice of transfer or equivalent instrument may be in the form of
one or more blanket assignments covering Mortgages encumbering Mortgaged
Properties located in the same jurisdiction, if permitted by law and acceptable
for recording; provided, however, that none of the Trustee, the Custodian and
the Master Servicer shall be responsible for determining whether any assignment
is legally sufficient or in recordable form.
"Assumption Fees": Any fees collected by the Master Servicer or Special
Servicer in connection with an assumption of a Mortgage Loan or substitution of
a Borrower thereunder permitted to be executed under the provisions of this
Agreement.
"Authenticating Agent": Any authenticating agent appointed by the Trustee
pursuant to Section 5.07.
"Available Funds": For a Distribution Date, the sum of (i) all Monthly
Payments, Extended Monthly Payments, Balloon Payments or other receipts on
account of principal and interest (including Unscheduled Payments and any Net
REO Proceeds transferred from an REO Account pursuant to Section 3.17(b)) on or
in respect of the Mortgage Loans received by the Master Servicer in the
Collection Period relating to such Distribution Date, (ii) all other amounts
received by the Master Servicer in such Collection Period and required to be
placed in the Collection Account pursuant to Section 3.05 allocable to such
Mortgage Loans, and including all P&I Advances made by the Master Servicer or
the Trustee, as applicable, in respect of such Distribution Date, (iii) for the
Distribution Date occurring in each March, the Withheld Amounts remitted to the
Lower-Tier Distribution Account pursuant to Section 3.27(b) and (iv) any late
payments of the items set forth in clause (i) above received after the end of
the Collection Period relating to such Distribution Date but prior to the
related Master Servicer Remittance Date, but in each case excluding the
following:
(a) amounts permitted to be used to reimburse the Master Servicer, the
Special Servicer or the Trustee for previously unreimbursed Advances and
interest thereon as described in Section 3.06(ii);
(b) those portions of each payment of interest which represent the
applicable Servicing Fee and an amount representing any applicable Special
Servicing Compensation with respect to such Distribution Date;
(c) all amounts in the nature of late fees (subject to Section 3.12
hereof), extension fees, loan service transaction fees, demand fees, beneficiary
statement charges, Assumption Fees and similar fees, and reinvestment earnings
on Investment Accounts which the Master Servicer or the Special Servicer is
entitled to retain as additional servicing compensation;
(d) all amounts representing scheduled Monthly Payments due after the
related Due Date;
(e) that portion of Net Liquidation Proceeds, Net Insurance Proceeds or the
Repurchase Price received with respect to a Mortgage Loan which represents any
unpaid Servicing Fee, Trustee Fee and Special Servicing Compensation, to which
the Master Servicer, Trustee and the Special Servicer, respectively, are
entitled;
(f) all amounts representing expenses specifically reimbursable or payable
to the Master Servicer, the Special Servicer or the Trustee and other amounts
permitted to be retained by the Master Servicer or withdrawn by the Master
Servicer from the Collection Account to the extent expressly set forth in this
Agreement (including, without limitation, as provided in Section 3.06 and
including any indemnities provided for herein), including interest thereon as
provided in this Agreement;
(g) any interest or investment income on funds on deposit in the Collection
Account, any Lock-Box Account, any Reserve Account, any Escrow Account, any Cash
Collateral Account, the Interest Reserve Account or any REO Account or in
Permitted Investments in which such funds may be invested;
(h) with respect to the Interest Reserve Loans and any Distribution Date
relating to each Interest Accrual Period ending in each February or any January
in a year which is not a leap year, an amount equal to one day of interest on
the Stated Principal Balance of such Mortgage Loan as of the Due Date in the
month preceding the month in which such Distribution Date occurs at the related
Mortgage Rate to the extent such amounts are to be deposited in the Interest
Reserve Account and held for future distribution pursuant to Section 3.27;
(i) all amounts received with respect to each Mortgage Loan previously
purchased or repurchased pursuant to Sections 2.03(c), 3.18 or 9.01 during the
related Collection Period and subsequent to the date as of which the amount
required to effect such purchase or repurchase was determined;
(j) the amount reasonably determined by the Trustee to be necessary to pay
any applicable federal, state or local taxes imposed on the Upper-Tier REMIC or
the Lower-Tier REMIC under the circumstances and to the extent described in
Section 4.05;
(k) Prepayment Premiums;
(l) Default Interest; and
(m) Deferred Interest.
"Balance": As defined in the definition of "Extended Monthly Payment."
"Balloon Payment": With respect to any Mortgage Loan, the payment of
principal due on its stated maturity date.
"Beneficial Owner": With respect to a Global Certificate, the Person who is
the beneficial owner of such Certificate as reflected on the books of the
Depository or on the books of a Person maintaining an account with such
Depository (directly as a Depository Participant or indirectly through a
Depository Participant, in accordance with the rules of such Depository). Each
of the Trustee and the Master Servicer shall have the right to require, as a
condition to acknowledging the status of any Person as a Beneficial Owner under
this Agreement, that such Person provide evidence at its expense of its status
as a Beneficial Owner hereunder.
"Borrower": With respect to any Mortgage Loan, any obligor or obligors on
any related Note or Notes.
"Borrower Accounts": As defined in Section 3.07(a).
"Business Day": Any day other than a Saturday, a Sunday or any day on which
banking institutions in the City of New York, New York, the cities in which the
principal offices of the Master Servicer or Special Servicer are located, or the
city in which the Corporate Trust Office is located are authorized or obligated
by law, executive order or governmental decree to be closed.
"Cash Collateral Account": With respect to any Mortgaged Property, any
account or accounts created pursuant to the related Mortgage, Loan Agreement,
Cash Collateral Account Agreement or other loan document into which the Lock-Box
Account monies and/or property account monies are swept on a regular basis for
the benefit of the Trustee as successor to the related Originator. Any Cash
Collateral Account shall be beneficially owned for federal income tax purposes
by the Person who is entitled to receive all reinvestment income or gain thereon
in accordance with the terms and provisions of the related Mortgage Loan and
Section 3.07, which Person shall be taxed on all reinvestment income or gain
thereon. The Master Servicer shall be permitted to make withdrawals therefrom
for deposit into the Collection Account. To the extent not inconsistent with the
related Mortgage Loan, each such Cash Collateral Account shall be an Eligible
Account.
"Cash Collateral Account Agreement": With respect to any Mortgage Loan, the
cash collateral account agreement or similar agreement, if any, between the
Originator, the related Borrower, and the bank named as party thereto pursuant
to which the related Cash Collateral Account, if any, may have been established,
together with any "lock-box agreement" or other similar agreement entered into
pursuant to the terms of any such cash collateral account agreement or similar
agreement.
"Cash Deposit": The sum of $0.00 being an amount equal to all cash payments
of principal and interest received by the related Originator in respect of the
Mortgage Loans prior to or on the Closing Date that are due after the Cut-Off
Date.
"CEDEL": Citibank, N.A., as depositary for CEDEL Bank, S.A., or its
successor in such capacity.
"Certificate": Any Class A-1, Class A-2, Class X, Class B, Class C, Class
D, Class E, Class F, Class Q, Class R or Class LR Certificate issued,
authenticated and delivered hereunder.
"Certificate Custodian": Initially, Norwest Bank Minnesota, National
Association; thereafter any other Certificate Custodian acceptable to the
Depository and selected by the Trustee.
"Certificate Principal Amount": With respect to any Class of Certificates
(other than the Class X, Class Q, Class R and Class LR Certificates) (a) on or
prior to the first Distribution Date, an amount equal to the aggregate initial
Certificate Principal Amount of such Class, as specified in the Preliminary
Statement hereto, and (b) as of any date of determination after the first
Distribution Date, the Certificate Principal Amount of such Class of
Certificates on the Distribution Date immediately prior to such date of
determination, after actual distributions of principal thereon and allocation of
Realized Losses thereto on such prior Distribution Date; provided that for
purposes of determining Voting Rights, the Certificate Principal Amount of each
of the Class B, Class C, Class D, Class E and Class F Certificates shall be
deemed to have been reduced by the amount of any Appraisal Reduction Amounts
notionally allocated thereto pursuant to Section 4.01(i). With respect to any
Class of Lower-Tier Regular Interests, (a) on or prior to the first Distribution
Date, an amount equal to the aggregate initial Certificate Principal Amount of
the Class of Related Certificates with respect thereto, and (b) as of any date
of determination after the first Distribution Date, the Certificate Principal
Amount of such Class on the Distribution Date immediately prior to such date of
determination, after distribution of principal thereon and allocation of
Realized Losses thereto on such prior Distribution Date in accordance with
Section 4.01(a).
"Certificate Register" and "Certificate Registrar": The register maintained
and the registrar appointed pursuant to Section 5.02.
"Certificateholder": With respect to any Certificate, the Person whose name
is registered in the Certificate Register; provided, however, that, except to
the extent provided in the next proviso, solely for the purpose of giving any
consent or taking any action pursuant to this Agreement, any Certificate
beneficially owned by the Depositor, the Master Servicer, the Special Servicer,
the Trustee, a Manager of a Mortgaged Property, a Borrower or any Person known
to a Responsible Officer of the Certificate Registrar to be an Affiliate of the
Depositor, the Trustee, the Master Servicer or the Special Servicer shall be
deemed not to be outstanding and the Voting Rights to which it is entitled shall
not be taken into account in determining whether the requisite percentage of
Voting Rights necessary to effect any such consent or take any such action has
been obtained; provided, however, that (i) for purposes of obtaining the consent
of Certificateholders to an amendment of this Agreement, any Certificates
beneficially owned by the Master Servicer or the Special Servicer or an
Affiliate thereof shall be deemed to be outstanding, provided, that, such
amendment does not relate to compensation of the Master Servicer or the Special
Servicer or benefit the Master Servicer or the Special Servicer (in its capacity
as such) or any Affiliate thereof (other than solely in its capacity as
Certificateholder) in any material respect, in which case such Certificate shall
be deemed not to be outstanding; and (ii) for purposes of obtaining the consent
of Certificateholders to any action proposed to be taken by the Special Servicer
with respect to a Specially Serviced Mortgage Loan, any Certificates
beneficially owned by the Master Servicer or an Affiliate thereof shall be
deemed to be outstanding, provided that the Special Servicer is not the Master
Servicer. For purposes of obtaining the consent of Certificateholders to any
action with respect to a particular Mortgage Loan proposed to be taken by the
Master Servicer or Special Servicer, any Certificates beneficially owned by the
Affiliates of the related Borrower, the related Manager, or Affiliates of the
related Manager shall not be deemed to be outstanding.
Notwithstanding the foregoing, solely for purposes of providing or
distributing any reports, statements or other information required or permitted
to be provided to a Certificateholder hereunder, a Certificateholder shall
include any Beneficial Owner, or any Person identified by a Beneficial Owner as
a prospective transferee of a Certificate beneficially owned by such Beneficial
Owner but only if the Trustee or another party hereto furnishing such report,
statement or information has been provided with the name of the Beneficial Owner
of the related Certificate or the Person identified to the reasonable
satisfaction of the Trustee or other such party as a prospective transferee
thereof. For purposes of the foregoing, the Depositor, the Master Servicer, the
Special Servicer, the Trustee, the Paying Agent or other such Person may rely,
without limitation, on a participant listing from the Depository or statements
furnished by a Person that on their face appear to be statements from a
participant in the Depository to such Person indicating that such Person
beneficially owns Certificates.
"Class": With respect to the Certificates, all of the Certificates bearing
the same alphabetical and numerical class designation, and with respect to the
Lower-Tier Regular Interests, each interest bearing the applicable alphabetical
and numerical designation set forth in the Preliminary Statement hereto.
"Class A Certificates": Class A-1 Certificates and the Class A-2
Certificates.
"Class A-1 Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent in substantially the
form set forth in Exhibit A-1 hereto.
"Class A-1 Component": With respect to the Class X Certificates, at any
date of determination, that portion of the Notional Amount of the Class X
Certificates equal to the Certificate Principal Amount of the Class A-1
Certificates.
"Class A-1 Pass-Through Rate": A per annum rate equal to 5.95%.
"Class A-2 Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent in substantially the
form set forth in Exhibit A-2 hereto.
"Class A-2 Component": With respect to the Class X Certificates, at any
date of determination, that portion of the Notional Amount of the Class X
Certificates equal to the Certificate Principal Amount of the Class A-2
Certificates.
"Class A-2 Pass-Through Rate": A per annum rate equal to 6.17%.
"Class B Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent in substantially the
form set forth in Exhibit A-4 hereto.
"Class B Component": With respect to the Class X Certificates, at any date
of determination, that portion of the Notional Amount of the Class X
Certificates equal to the Certificate Principal Amount of the Class B
Certificates.
"Class B Pass-Through Rate": With respect to the initial Distribution Date,
the WAC Rate minus 0.02% which is approximately equal to 6.661%, and for each
Distribution Date thereafter, a per annum rate equal to the WAC Rate minus
0.02%.
"Class C Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent in substantially the
form set forth in Exhibit A-5 hereto.
"Class C Component": With respect to the Class X Certificates, at any date
of determination, that portion of the Notional Amount of the Class X
Certificates equal to the Certificate Principal Amount of the Class C
Certificates.
"Class C Pass-Through Rate": With respect to the initial Distribution Date,
the WAC Rate minus 0.02% which is approximately equal to 6.661%, and for each
Distribution Date thereafter, a per annum rate equal to the WAC Rate minus
0.02%.
"Class D Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent in substantially the
form set forth in Exhibit A-6 hereto.
"Class D Component": With respect to the Class X Certificates, at any date
of determination, that portion of the Notional Amount of the Class X
Certificates equal to the Certificate Principal Amount of the Class D
Certificates.
"Class D Pass-Through Rate": With respect to the initial Distribution Date,
the WAC Rate minus 0.02% which is approximately equal to 6.661%, and for each
Distribution Date thereafter, a per annum rate equal to the WAC Rate minus
0.02%.
"Class E Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent in substantially the
form set forth in Exhibit A-7 hereto.
"Class E Pass-Through Rate": With respect to the initial Distribution Date,
the WAC Rate minus 0.02% which is approximately equal to 6.661%, and for each
Distribution Date thereafter, a per annum rate equal to the WAC Rate minus
0.02%.
"Class E Component": With respect to the Class X Certificates, at any date
of determination, that portion of the Notional Amount of the Class X
Certificates equal to the Certificate Principal Amount of the Class E
Certificates.
"Class F Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent in substantially the
form set forth in Exhibit A-8 hereto.
"Class F Pass-Through Rate": A per annum rate equal to 5.95%.
"Class F Component": With respect to the Class X Certificates, at any date
of determination, that portion of the Notional Amount of the Class X
Certificates equal to the Certificate Principal Amount of the Class F
Certificates.
"Class LA-1 Interest": A regular interest in the Lower-Tier REMIC entitled
to the monthly distribution payable thereto pursuant to Section 4.01(a).
"Class LA-2 Interest": A regular interest in the Lower-Tier REMIC entitled
to the monthly distribution payable thereto pursuant to Section 4.01(a).
"Class LB Interest": A regular interest in the Lower-Tier REMIC entitled to
the monthly distribution payable thereto pursuant to Section 4.01(a).
"Class LC Interest": A regular interest in the Lower-Tier REMIC entitled to
the monthly distribution payable thereto pursuant to Section 4.01(a).
"Class LD Interest": A regular interest in the Lower-Tier REMIC entitled to
the monthly distribution payable thereto pursuant to Section 4.01(a).
"Class LE Interest": A regular interest in the Lower-Tier REMIC entitled to
the monthly distribution payable thereto pursuant to Section 4.01(a).
"Class LF Interest": A regular interest in the Lower-Tier REMIC entitled to
the monthly distribution payable thereto pursuant to Section 4.01(a).
"Class LR Certificate": Any Certificate executed and authenticated by the
Trustee or the Authenticating Agent in substantially the form set forth in
Exhibit A-11 hereto. The Class LR Certificates have no Pass-Through Rate,
Certificate Principal Amount or Notional Amount.
"Class Prepayment Percentage": With respect to any Class of Certificates
(other than the Class X and Residual Certificates) and any Distribution Date, a
fraction, expressed as a percentage, the numerator of which is the portion of
the Principal Distribution Amount to be distributed to the Holders of such Class
of Certificates on such Distribution Date, and the denominator of which is the
aggregate Principal Distribution Amount for such Distribution Date.
"Class Q Certificate": Any Certificate executed and authenticated by the
Trustee or the Authenticating Agent in substantially the form set forth in
Exhibit A-9 hereto and entitled to the distributions payable thereto pursuant to
Section 4.01(d). The Class Q Certificates have no Pass-Through Rate, Certificate
Principal Amount or Notional Amount. The Class Q Certificates represent a
beneficial ownership interest in the Default Interest, subject to the obligation
to pay interest on Advances, and the Default Interest Distribution Account.
"Class Q Distribution Account": The account or accounts created and
maintained as a separate account or accounts by the Trustee pursuant to Section
3.05(c), which shall be entitled "Norwest Bank Minnesota, National Association,
as Trustee, in trust for Holders of Morgan Stanley Capital I Inc., Commercial
Mortgage Pass-Through Certificates, Series 1998-XL2, Class Q Certificateholders,
Class Q Distribution Account" and which must be an Eligible Account. The Class Q
Distribution Account shall not be an asset of the Lower-Tier REMIC or the
Upper-Tier REMIC formed hereunder.
"Class R Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent in substantially the
form set forth in Exhibit A-10 hereto. The Class R Certificates have no
Pass-Through Rate, Certificate Principal Amount or Notional Amount.
"Class X Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent in substantially the
form set forth in Exhibit A-3 hereto.
"Class X Notional Amount": For any date of determination, a notional
principal amount equal to the aggregate of the Certificate Principal Amounts of
the Class LA-1, Class LA-2, Class LB, Class LC, Class LD, Class LE and Class LF
Interests, which correspond to the aggregate of the Certificate Principal
Amounts of their Related Certificates, as of the preceding Distribution Date
(after giving effect to the distributions of principal and allocations of
Realized Losses on such Distribution Date) or, in the case of the first
Distribution Date, as of the Closing Date.
"Class X Pass-Through Rate": A per annum rate equal to the weighted average
of the Pass-Through Rates on the Class A-1 Component, the Class A-2 Component,
the Class B Component, the Class C Component, the Class D Component, Class E
Component and the Class F Component (each, a "Component Pass-Through Rate"),
weighted on the basis of their respective Notional Amounts. The Pass-Through
Rate on the Class A-1 Component is a per annum rate equal to the WAC Rate minus
the Class A-1 Pass-Through Rate. The Pass-Through Rate on the Class A-2
Component is a per annum rate equal to the WAC Rate minus the Class A-2
Pass-Through Rate. The Pass-Through Rate on the Class B Component is a per annum
rate equal to 0.02%. The Pass-Through Rate on the Class C Component is a per
annum rate equal to 0.02%. The Pass-Through Rate on the Class D Component is a
per annum rate equal to 0.02%. The Pass-Through Rate on the Class E Component is
a per annum rate equal to 0.02%. The Pass-Through Rate on the Class F Component
is a per annum rate equal to the WAC Rate minus the Class F Pass-Through Rate.
"Closing Date": October 15, 1998.
"Code": The Internal Revenue Code of 1986, as amended from time to time,
any successor statute thereto, and any temporary or final regulations of the
United States Department of the Treasury promulgated pursuant thereto.
"Collection Account": The account or accounts created and maintained by the
Master Servicer pursuant to Section 3.05(a), which shall be entitled "Midland
Loan Services, Inc., in trust for Norwest Bank Minnesota, National Association,
as Trustee, in trust for Holders of Morgan Stanley Capital I Inc., Commercial
Mortgage Pass-Through Certificates, Series 1998-XL2, Collection Account" and
which must be an Eligible Account.
"Collection Period": With respect to a Distribution Date and each Mortgage
Loan, the period beginning on the day after the Due Date in the month preceding
the month in which such Distribution Date occurs (or, in the case of the
Distribution Date occurring in November, 1998, on the day after the Cut-Off
Date) and ending on the Due Date in the month in which such Distribution Date
occurs.
"Commission": The Securities and Exchange Commission.
"Component": Any of the Class A-1 Component, the Class A-2 Component, the
Class B Component, the Class C Component the Class D Component, the Class E
Component and the Class F Component.
"Component Pass-Through Rate": As set forth in the definition of Class X
Pass-Through Rate.
"Corporate Trust Office": With respect to all matters relating to the
transfer of Certificates, the office of the Trustee located at Sixth and
Marquette, Minneapolis, Minnesota 55479-0113, Attention: Corporate Trust
Services (CMBS)-Morgan Stanley 1998-XL2 and with respect to all other matters
the principal corporate trust office of the Trustee located at 11000 Broken Land
Parkway, Columbia, Maryland 21044-3562, Attention: Corporate Trust Services
(CMBS) -Morgan Stanley 1998-XL2, or the principal trust office of any successor
trustee qualified and appointed pursuant to Section 8.08.
"Cross-over Date": The Distribution Date on which the Certificate Principal
Amount of each Class of Subordinate Certificates has been reduced to zero.
"Crystal Park IV": The Mortgage Loan identified as No. 7 on the Mortgage
Loan Schedule.
"Custodial Agreement": The custodial agreement, if any, from time to time
in effect between the Custodian named therein and the Trustee, as the same may
be amended or modified from time to time in accordance with the terms thereof.
"Custodian": Any Custodian appointed pursuant to Section 5.08 and, unless
the Trustee is Custodian, named pursuant to any Custodial Agreement. The
Custodian may (but need not) be the Trustee or the Master Servicer or any
Affiliate of the Trustee or the Master Servicer, but may not be the Depositor or
any Affiliate thereof.
"Cut-Off Date": October 1, 1998.
"DCR": Duff & Phelps Credit Rating Co., or its successor in interest.
"Default Interest": With respect to any Mortgage Loan, interest accrued on
such Mortgage Loan at the excess of the related Default Rate over the sum of the
related Mortgage Rate plus, if applicable, the Excess Rate for such Mortgage
Loan. The Default Interest shall not be an asset of the Lower-Tier REMIC or the
Upper-Tier REMIC formed hereunder.
"Default Rate": With respect to each Mortgage Loan, the per annum rate at
which interest accrues on such Mortgage Loan following any event of default on
such Mortgage Loan, including a default in the payment of a Monthly Payment, as
such rate is set forth on the Mortgage Loan Schedule.
"Deferred Interest": With respect to each Mortgage Loan, interest accrued
on such Mortgage Loan at the related Excess Rate plus interest thereon to the
extent permitted by applicable law at the related Revised Mortgage Rate.
Deferred Interest shall not be an asset of the Lower-Tier REMIC or the
Upper-Tier REMIC formed hereunder.
"Deferred Interest Distribution Account": The trust account or accounts
created and maintained as a separate account or accounts by the Trustee pursuant
to Section 3.05(d), which shall be entitled "Norwest Bank Minnesota, National
Association, as Trustee, in trust for Holders of Morgan Stanley Capital I Inc.,
Commercial Mortgage Pass-Through Certificates, Series 1998-XL2, Deferred
Interest Distribution Account" and which must be an Eligible Account. The
Deferred Interest Distribution Account shall not be an asset of the Lower-Tier
REMIC or the Upper-Tier REMIC formed hereunder.
"Deferred Interest Distribution Percentage": 14% with respect to the Class
B Certificates, 18% with respect to the Class C Certificates, 20% with respect
to the Class D Certificates, 24% with respect to the Class E Certificates, and
24% with respect to the Class F Certificates.
"Denomination": As defined in Section 5.01.
"Depositor": Morgan Stanley Capital I Inc., a Delaware corporation, and its
successors and assigns.
"Depository": The Depository Trust Company or a successor appointed by the
Certificate Registrar (which appointment shall be at the direction of the
Depositor if the Depositor is legally able to do so).
"Depository Participant": A Person for whom, from time to time, the
Depository effects book-entry transfers and pledges of securities deposited with
the Depository.
"Directing Class": Certificateholders representing 100% of the Percentage
Interests of the most subordinate Class of Certificates then outstanding;
provided, however, that with respect to the termination of the Special Servicer
pursuant to Section 3.23(b) by the majority of the Directing Class, the
Directing Class in the event that the Class A Certificates and the Class X
Certificates are the only Classes outstanding, will be the Class A Certificates
and the Class X Certificates together.
"Directly Operate": With respect to any REO Property, the furnishing or
rendering of services to the tenants thereof that are not customarily provided
to tenants in connection with the rental of space "for occupancy only" within
the meaning of Treasury Regulations Section 1.512(b)-1(c)(5), the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers in the ordinary course of a trade or business or any use of
such REO Property in a trade or business conducted by the Trust Fund, or the
performance of any construction work on the REO Property (other than the
completion of a building or improvement, where more than 10 percent of the
construction of such building or improvement was completed before default became
imminent), other than through an Independent Contractor; provided, however, that
the Special Servicer, on behalf of the Trust Fund, shall not be considered to
Directly Operate an REO Property solely because the Special Servicer, on behalf
of the Trust Fund, establishes rental terms, chooses tenants, enters into or
renews leases, deals with taxes and insurance, or makes decisions as to repairs
or capital expenditures with respect to such REO Property or takes other actions
consistent with Section 1.856-4(b)(5)(ii) of the regulations of the United
States Department of the Treasury.
"Discount Rate": The rate which, when compounded monthly, is equivalent to
the Treasury Rate when compounded semi-annually.
"Disqualified Non-U.S. Person": With respect to a Class R or Class LR
Certificate, any Non-U.S. Person or agent thereof other than (i) a Non-U.S.
Person that holds the Class R or Class LR Certificate in connection with the
conduct of a trade or business within the United States and has furnished the
transferor and the Certificate Registrar with an effective IRS Form 4224 or (ii)
a Non-U.S. Person that has delivered to both the transferor and the Certificate
Registrar an opinion of a nationally recognized tax counsel to the effect that
the transfer of the Class R or Class LR Certificate to it is in accordance with
the requirements of the Code and the regulations promulgated thereunder and that
such transfer of the Class R or Class LR Certificate will not be disregarded for
federal income tax purposes.
"Disqualified Organization": Either (a) the United States, a State or any
political subdivision thereof, any possession of the United States, or any
agency or instrumentality of any of the foregoing (other than an instrumentality
that is a corporation if all of its activities are subject to tax and a majority
of its board of directors is not selected by any such governmental unit), (b) a
foreign government, International Organization or agency or instrumentality of
either of the foregoing, (c) an organization that is exempt from tax imposed by
Chapter 1 of the Code (including the tax imposed by Code Section 511 on
unrelated business taxable income) on any excess inclusions (as defined in Code
Section 860E(c)(1)) with respect to the Class R or Class LR Certificates (except
certain farmers' cooperatives described in Code Section 521), (d) rural electric
and telephone cooperatives described in Code Section 1381(a)(2), or (e) any
other Person so designated by the Certificate Registrar based upon an Opinion of
Counsel to the effect that any Transfer to such Person may cause the Upper-Tier
REMIC or Lower-Tier REMIC to be subject to tax or to fail to qualify as a REMIC
at any time that the Certificates are outstanding. The terms "United States,"
"State" and "International Organization" shall have the meanings set forth in
Code Section 7701 or successor provisions.
"Distribution Date": The third Business Day of each month, commencing in
November, 1998.
"Due Date": With respect to any Mortgage Loan, the first day of each month,
and with respect to any Distribution Date, the Due Date occurring in the month
in which such Distribution Date occurs.
"Early Termination Notice Date": Any date as of which the aggregate Stated
Principal Balance of the Mortgage Loans is less than 1.0% of the sum of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-Off Date.
"Edens & Avant Pool I": The Mortgage Loan identified as No. 2 on the
Mortgage Loan Schedule.
"Edens & Avant Pool II": The Mortgage Loan identified as No. 6 on the
Mortgage Loan Schedule.
"Effective Maturity Date": With respect to each Mortgage Loan, the date set
forth below opposite such Mortgage Loan:
Grapevine Mills Loan October 1, 2008
Edens & Avant Pool I Loan October 1, 2008
Mall of New Hampshire Loan October 1, 2008
Westside Pavilion Loan July 1, 2008
NorthTown Mall Loan September 1, 2008
Edens & Avant Pool II Loan October 1, 2008
Crystal Park IV Loan September 1, 2008
"Eligible Account": Either (i) an account or accounts (A) maintained with
either a federal or state chartered depository institution or trust company (x)
if the deposits are to be held in such account 30 days or more, the long-term
unsecured debt obligations of which are rated by each of the Rating Agencies in
one of its two highest rating categories (without regard to pluses or minuses)
at all times, or (y) if the deposits are to be held in such account less than 30
days, the short-term unsecured debt obligations or commercial paper of which are
rated by S&P and DCR in its highest rating categories at all times or (B) if the
obligations of any such institution are not rated by any one or more Rating
Agencies, or if they are rated in a category lower than required herein, as to
which the Master Servicer or the Trustee, as applicable, has received written
confirmation from each such Rating Agency that holding funds in such account
would not cause such Rating Agency to qualify, withdraw or downgrade any of its
ratings on the Certificates or (ii) a segregated trust account or accounts
maintained with the corporate trust department of a federal depository
institution or state chartered depository institution or trust company which is
subject to regulations regarding fiduciary funds on deposit substantially
similar to 12 C.F.R. ss. 9.10(b), which, in each case, has corporate trust
powers, acting in its fiduciary capacity, or (iii) any other account that, as
evidenced by a written confirmation from each Rating Agency, would not, in and
of itself, cause a downgrade, qualification or withdrawal of the then current
ratings assigned to the Certificates, which may be an account maintained with
the Trustee or the Master Servicer.
"Eligible Investor": Any of (i) a Qualified Institutional Buyer that is
purchasing for its own account or for the account of a Qualified Institutional
Buyer to whom notice is given that the offer, sale or transfer is being made in
reliance on Rule 144A, or (ii) an Institutional Accredited Investor.
"Environmental Report": The environmental audit report or reports with
respect to each Mortgaged Property delivered to the related Originator in
connection with the origination of the related Mortgage Loan.
"ERISA": The Employee Retirement Income Security Act of 1974, as it may be
amended from time to time.
"Escrow Account": As defined in Section 3.04(b).
"Escrow Payment": Any payment made by any Borrower to the Master Servicer
pursuant to the related Mortgage, Lock-Box Agreement, Cash Collateral Account
Agreement, or Loan Agreement for the account of such Borrower for application
toward the payment of taxes, insurance premiums, assessments, ground rents and
similar items in respect of the related Mortgaged Property.
"Euroclear": Morgan Guaranty Trust Company of New York, Brussels Office, as
operator of the Euroclear System, or its successor in such capacity.
"Event of Default": A Master Servicer Event of Default or Special Servicer
Event of Default, as applicable.
"Excess Prepayment Interest Shortfall": With respect to any Distribution
Date, the aggregate amount by which the Prepayment Interest Shortfall with
respect to all Principal Prepayments received during the related Collection
Period exceeds the aggregate Servicing Fee (minus the Trustee Fee) available to
be paid to the Master Servicer for such Distribution Date.
"Excess Rate": With respect to each Mortgage Loan, the excess of the
related Revised Mortgage Rate over the related Mortgage Rate, each as set forth
in the Mortgage Loan Schedule.
"Exchange Act": The Securities Exchange Act of 1934, as amended.
"Exchange Act Report": A Form 8-K, Form 10-K, Form 10-Q or Form 12b-25 to
be filed with the Commission, under cover of the related form required by the
Exchange Act.
"Extended Monthly Payment": With respect to any extension of a Mortgage
Loan as to which any principal balance and accrued interest remains unpaid on
its Maturity Date (such unpaid amount, a "Balance"), an amount equal to (a) a
deemed principal portion of a revised monthly payment (which will be calculated
based on an amortization schedule which would fully amortize the applicable
Balance over a term that does not extend past the date occurring two years prior
to the Rated Final Distribution Date (commencing on the Maturity Date of such
Mortgage Loan) and an interest rate no less than the Mortgage Rate with respect
to such Mortgage Loan), and (b) interest at the applicable Default Rate;
provided, however, that the Special Servicer may agree that the Extended Monthly
Payments may include interest at a rate lower than the related Default Rate
(but, except as otherwise provided herein, not lower than the related Mortgage
Rate).
"FDIC": The Federal Deposit Insurance Corporation, or any successor
thereto.
"FHLMC": The Federal Home Loan Mortgage Corporation, or any successor
thereto.
"Final Recovery Determination": With respect to any Specially Serviced
Mortgage Loan or any Mortgage Loan subject to repurchase by MSMC pursuant to
Section 2.03(c), the recovery of all Insurance Proceeds, Liquidation Proceeds,
the related Repurchase Price and other payments or recoveries (including
proceeds of the final sale of any REO Property) which the Master Servicer (or in
the case of a Specially Serviced Mortgage Loan, the Special Servicer), in its
reasonable judgment as evidenced by a certificate of a Servicing Officer
delivered to the Trustee and the Custodian (and the Master Servicer, if the
certificate is from the Special Servicer), expects to be finally recoverable.
The Master Servicer shall maintain records, prepared by a Servicing Officer, of
each Final Recovery Determination until the earlier of (i) its termination as
Master Servicer hereunder and the transfer of such records to a successor Master
Servicer and (ii) five years following the termination of the Trust Fund.
"Financial Market Publisher": Bloomberg Financial Service.
"Financial Report": A Form 8-K including as exhibits under Item 7 of Form
8-K the financial statements and other financial information required to be
filed as described in Sections 3.20 and 4.02.
"Fixed Voting Rights Percentage": As defined in the definition of "Voting
Rights."
"FNMA": The Federal National Mortgage Association, or any successor
thereto.
"Form 8-K": A Current Report on Form 8-K under the Exchange Act, or such
successor form as the Commission may specify from time to time.
"Form 10-K": An Annual Report on Form 10-K under the Exchange Act, or such
successor form as the Commission may specify from time to time.
"Form 10-Q": A Quarterly Report on Form 10-Q under the Exchange Act, or
such successor form as the Commission may specify from time to time.
"Form 12b-25": A Notification of Late Filing required by Rule 12b-25 under
the General Rules and Regulations under the Exchange Act.
"Form 15": A Form 15 in accordance with the provisions of Rule 12b-3 under
the Exchange Act, suspending the reporting obligations under the Exchange Act
set forth herein.
"Global Certificates": The Class A-1, Class A-2, Class B, Class C, Class D,
Class E, Class F (to the extent issued as Private Global Certificates) and Class
X Certificates.
"Grantor Trust": A segregated asset pool within the Trust Fund consisting
of the Default Interest, the Deferred Interest and amounts held from time to
time in the Class Q Distribution Account and the Deferred Interest Distribution
Account.
"Grapevine Mills": The Mortgage Loan identified as No. 1 on the Mortgage
Loan Schedule.
"Hazardous Materials": Any dangerous, toxic or hazardous pollutants,
chemicals, wastes, or substances, including, without limitation, those so
identified pursuant to the Comprehensive Environmental Response, Compensation
and Liability Act, 42 U.S.C. Section 9601 et seq., or any other environmental
laws now or hereafter existing, and specifically including, without limitation,
asbestos and asbestos-containing materials, polychlorinated biphenyls, radon
gas, petroleum and petroleum products, urea formaldehyde and any substances
classified as being "in inventory", "usable work in process" or similar
classification which would, if classified as unusable, be included in the
foregoing definition.
"Holder": With respect to any Certificate, a Certificateholder; with
respect to any Lower-Tier Regular Interest, the Trustee.
"Indemnified Party": As defined in Section 8.05(c).
"Indemnifying Party": As defined in Section 8.05(c).
"Independent": When used with respect to any specified Person, any such
Person who (i) does not have any direct financial interest, or any material
indirect financial interest, in any of the Depositor, the Trustee, the Master
Servicer, the Special Servicer, any Borrower or any Affiliate thereof, and (ii)
is not connected with any such Person as an officer, employee, promoter,
underwriter, trustee, partner, director or Person performing similar functions.
"Independent Contractor": Either (i) any Person that would be an
"independent contractor" with respect to the Trust Fund within the meaning of
Section 856(d)(3) of the Code if the Trust Fund were a real estate investment
trust (except that the ownership tests set forth in that section shall be
considered to be met by any Person that owns, directly or indirectly, 35% or
more of any Class or 35% or more of the aggregate value of all Classes of
Certificates), provided that the Trust Fund does not receive or derive any
income from such Person and the relationship between such Person and the Trust
Fund is at arm's length, all within the meaning of Treasury Regulations Section
1.856-4(b)(5) (except neither the Master Servicer nor the Special Servicer shall
be considered to be an Independent Contractor under the definition in this
clause (i) unless an Opinion of Counsel (at the expense of the party seeking to
be deemed an Independent Contractor) addressed to the Special Servicer and the
Trustee has been delivered to the Trustee to that effect) or (ii) any other
Person (including the Master Servicer and the Special Servicer) if the Special
Servicer, on behalf of itself and the Trustee, has received an Opinion of
Counsel (at the expense of the party seeking to be deemed an Independent
Contractor) to the effect that the taking of any action in respect of any REO
Property by such Person, subject to any conditions therein specified, that is
otherwise herein contemplated to be taken by an Independent Contractor will not
cause such REO Property to cease to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code (determined without regard to the
exception applicable for purposes of Section 860D(a) of the Code) or cause any
income realized in respect of such REO Property to fail to qualify as Rents from
Real Property (provided that such income would otherwise so qualify).
"Individual Certificate": Any Certificate in definitive, fully registered
form without interest coupons.
"Institutional Accredited Investor": An entity meeting the requirements of
Rule 501(a)(1), (2), (3) or (7) of Regulation D promulgated under the Act, or an
entity in which all the equity owners meet such requirements.
"Insurance Proceeds": Proceeds of any fire and hazard insurance policy,
title policy or other insurance policy relating to a Mortgage Loan (including
any amounts paid by the Master Servicer or the Special Servicer pursuant to
Section 3.08).
"Interest Accrual Amount": With respect to any Distribution Date and any
Class of Principal Balance Certificates, an amount equal to interest for the
related Interest Accrual Period at the Pass-Through Rate for such Class on the
related Certificate Principal Amount (provided, that for interest accrual
purposes any distributions in reduction of Certificate Principal Amount or
reductions in Certificate Principal Amount as a result of allocations of
Realized Losses on the Distribution Date occurring in an Interest Accrual Period
shall be deemed to have been made on the first day of such Interest Accrual
Period). With respect to any Distribution Date and the Class X Certificates, an
amount equal to interest for the related Interest Accrual Period at the
Pass-Through Rate for such Class for such Interest Accrual Period on the
Notional Amount of such Class (provided, that for interest accrual purposes any
distributions in reduction of Notional Amount or reductions in Notional Amount
as a result of allocations of Realized Losses on the Distribution Date occurring
in an Interest Accrual Period shall be deemed to have been made on the first day
of such Interest Accrual Period). Calculations of interest due in respect of the
Regular Certificates shall be made on the basis of a 360-day year consisting of
twelve 30-day months.
"Interest Accrual Period": With respect to any Distribution Date and with
respect to each Class of Certificates, the calendar month preceding the month in
which such Distribution Date occurs. Each Interest Accrual Period is assumed to
consist of 30 days.
"Interest Distribution Amount": With respect to any Distribution Date and
each Class of Regular Certificates, an amount equal to (A) the sum of (i) the
Interest Accrual Amount for such Distribution Date and (ii) the Interest
Shortfall, if any, for such Distribution Date, less (B) any Excess Prepayment
Interest Shortfall allocated to such Class on such Distribution Date pursuant to
Section 4.01(f).
"Interest Reserve Account": The trust account created and maintained by the
Trustee pursuant to Section 3.27, which shall be entitled "Norwest Bank
Minnesota, National Association, as Trustee, in trust for Holders of Morgan
Stanley Capital I, Inc., Commercial Mortgage Pass-Through Certificates, Series
1998-XL2, Interest Reserve Account" and which must be an Eligible Account.
"Interest Reserve Loan": Any Mortgage Loan which has a Mortgage Rate less
than or equal to 6.61%.
"Interest Shortfall": With respect to any Distribution Date for any Class
of Regular Certificates, the sum of (a) the excess, if any, of (i) the Interest
Distribution Amount for such Class for the immediately preceding Distribution
Date, over (ii) all distributions of interest (other than Deferred Interest)
made with respect to such Class on the immediately preceding Distribution Date,
and (b) to the extent permitted by applicable law, (i) other than in the case of
the Class X Certificates, one month's interest on any such excess at the
Pass-Through Rate applicable to such Class for the current Distribution Date and
(ii) in the case of the Class X Certificates, one month's interest on any such
excess at the WAC Rate for such Distribution Date.
"Interested Person": As of any date of determination, the Depositor, the
Master Servicer, the Special Servicer, the Trustee, any Borrower, any manager of
a Mortgaged Property, any Independent Contractor engaged by the Special Servicer
pursuant to Section 3.17, or any Person known to a Responsible Officer of the
Trustee to be an Affiliate of any of them.
"Investment Account": As defined in Section 3.07(a).
"Investment Representation Letter": As defined in Section 5.02(c)(i)(A).
"IRS": The Internal Revenue Service.
"Liquidation Expenses": Expenses incurred by the Master Servicer, the
Special Servicer, and the Trustee in connection with the liquidation of any
Mortgage Loan or property acquired in respect thereof (including, without
limitation, legal fees and expenses, committee or referee fees, and, if
applicable, brokerage commissions, and conveyance taxes) and any Property
Protection Expenses incurred with respect to such Mortgage Loan or such property
including interest on the related Property Advances at the Advance Rate not
previously reimbursed from collections or other proceeds therefrom.
"Liquidation Fee": With respect to any Mortgage Loan or REO Property which
is sold or transferred or otherwise liquidated, an amount equal to 0.75% of the
amount equal to (a) the Liquidation Proceeds of such Mortgage Loan or REO
Property (other than any such proceeds specified in clause (i) of the definition
of Liquidation Proceeds) minus (b) any broker's commission and related brokerage
referral fees.
"Liquidation Proceeds": The amount (other than Insurance Proceeds) received
in connection with (i) the taking of a Mortgaged Property (or portion thereof)
by exercise of the power of eminent domain or condemnation, (ii) the liquidation
of a Specially Serviced Mortgage Loan through a trustee's sale, foreclosure sale
or otherwise or (iii) a sale of a Mortgage Loan or an REO Property in accordance
with Section 3.18 or Section 9.01.
"Loan Agreement": With respect to any Mortgage Loan, the loan agreement, if
any, between the related Originator and the Borrower, pursuant to which such
Mortgage Loan was made.
"Loan Documents": With respect to any Mortgage Loan, the documents executed
or delivered in connection with the origination of such Mortgage Loan or
subsequently added to the related Mortgage File.
"Loan Number": With respect to any Mortgage Loan, the loan number by which
such Mortgage Loan was identified on the books and records of the Depositor or
any sub-servicer for the Depositor, as set forth in the Mortgage Loan Schedule.
"Loan Sale Agreement": The Loan Sale Agreement, dated as of the Cut-Off
Date, by and between the Depositor and MSMC, a copy of which is attached hereto
as Exhibit G.
"Lock-Box Account": With respect to any Mortgaged Property, if applicable,
any account created pursuant to any documents relating to a Mortgage Loan to
receive rental or other income generated by the Mortgaged Property. Any Lock-Box
Account shall be beneficially owned for federal income tax purposes by the
Person who is entitled to receive the reinvestment income or gain thereon in
accordance with the terms and provisions of the related Mortgage Loan and
Section 3.07, which Person shall be taxed on all reinvestment income or gain
thereon. With respect to any Mortgage Loan as to which there is a Lock-Box
Account but not a separate Cash Collateral Account, (i) the Master Servicer
shall be permitted to make withdrawals from the related Lock-Box Account for
deposit into the Collection Account and (ii) to the extent not inconsistent with
the related Mortgage Loan, each such Lock-Box Account shall be an Eligible
Account.
"Lock-Box Agreement": With respect to any Mortgage Loan, the lock-box or
other similar agreement, if any, between the related Originator and the
Borrower, pursuant to which the related Lock-Box Account, if any, may have been
established.
"Lock-out Period": With respect to any Mortgage Loan, the period of time,
if any, specified in the related Loan Documents during which voluntary
prepayments by the related Borrower are prohibited.
"Lower-Tier Distribution Account": The account or accounts created and
maintained as a separate account or accounts by the Trustee pursuant to Section
3.05(b), which shall be entitled "Norwest Bank Minnesota, National Association,
as Trustee, in trust for Holders of Morgan Stanley Capital I Inc., Commercial
Mortgage Pass-Through Certificates, Series 1998-XL2, Lower-Tier Distribution
Account" and which must be an Eligible Account.
"Lower-Tier Regular Interests": The Class LA-1, Class LA-2, Class LB, Class
LC, Class LD, Class LE and Class LF Interests.
"Lower-Tier REMIC": A segregated asset pool within the Trust Fund
consisting of the Mortgage Loans (exclusive of Default Interest and Deferred
Interest), collections thereon, any REO Property acquired in respect thereof and
all proceeds of such REO Property, other property of the Trust Fund related
thereto, and amounts held in respect thereof from time to time in the Collection
Account and the Lower-Tier Distribution Account.
"MAI": Member of the Appraisal Institute.
"Mall of New Hampshire": The Mortgage Loan identified as No. 3 on the
Mortgage Loan Schedule.
"Management Agreement": With respect to any Mortgage Loan, any management
agreement, by and between any Manager with respect to any related Mortgaged
Property and the related Borrower, or any successor management agreement between
such parties.
"Manager": With respect to any Mortgage Loan, any property manager or
property managers for the related Mortgaged Property or Mortgaged Properties.
"Master Servicer": Midland Loan Services, Inc., a Delaware corporation or
its successor in interest, or any successor Master Servicer appointed as herein
provided.
"Master Servicer Event of Default": As defined in Section 7.01(a).
"Master Servicer Remittance Date": With respect to any Distribution Date,
the Business Day immediately preceding such Distribution Date.
"Master Servicer Remittance Report": A report prepared by the Master
Servicer 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 pursuant to Section 4.01
and to furnish statements to Certificateholders pursuant to Section 4.02 and
containing such additional information as the Master Servicer and the Trustee
may from time to time agree.
"Maturity Date": With respect to each Mortgage Loan, the maturity date as
set forth on the Mortgage Loan Schedule.
"Monthly Distribution Statement": As defined in Section 4.02(a).
"Monthly Payment": With respect to any Mortgage Loan (other than any REO
Mortgage Loan) and any Due Date, the scheduled monthly payment of principal (if
any) and interest at the related Mortgage Rate, which is payable by the related
Borrower on such Due Date under the related Note or Notes, but not including any
Balloon Payment. The Monthly Payment with respect to (i) an REO Mortgage Loan,
or (ii) any Mortgage Loan which is delinquent at its maturity date and with
respect to which the Special Servicer does not enter into an extension, is the
monthly payment that would otherwise have been payable on the related Due Date
had the related Note not been discharged or the related maturity date had not
been reached, as the case may be, determined as set forth in the preceding
sentence and on the assumption that all other amounts, if any, due thereunder
are paid when due.
"Mortgage": The mortgage, deed of trust or other instrument creating a
first lien on or first priority ownership interest in a Mortgaged Property
securing a Note.
"Mortgage File": With respect to any Mortgage Loan, the mortgage documents
listed in Section 2.01(i) through (xvi) pertaining to such particular Mortgage
Loan and any additional documents required to be added to such Mortgage File
pursuant to the express provisions of this Agreement.
"Mortgage Loan": Each of the mortgage loans transferred and assigned to the
Trustee pursuant to Section 2.01 and from time to time held in the Trust Fund,
the mortgage loans originally so transferred, assigned and held being identified
on the Mortgage Loan Schedule as of the Cut-Off Date. Such term shall include
any REO Mortgage Loan or defeased Mortgage Loan.
"Mortgage Loan Schedule": The list of Mortgage Loans included in the Trust
Fund as of the Closing Date being attached hereto as Exhibit B, which list shall
set forth the following information with respect to each Mortgage Loan:
(a) the Borrower's name;
(b) the Monthly Payment in effect as of the Cut-Off Date;
(c) the Mortgage Rate (separately identifying the Default Rate, the Excess
Rate and the Revised Mortgage Rate, if any), including the interest calculation
convention (i.e., "30/360" or "actual/360");
(d) the Net Mortgage Rate in effect at the Cut-Off Date;
(e) the original principal balance;
(f) the original term to stated maturity, remaining term to stated
maturity, and Maturity Date;
(g) the original and remaining amortization terms;
(h) the Stated Principal Balance as of the Cut-Off Date;
(i) the loan-to-value ratio as of the Cut-Off Date;
(j) the applicable Servicing Fee Rate;
(k) the applicable Loan Number; and
(l) the number of Mortgaged Properties securing such Mortgage Loan.
The Mortgage Loan Schedule shall also set forth the total of the amounts
described under clauses (b) and (h) above for all of the Mortgage Loans.
"Mortgage Rate": With respect to any Mortgage Loan, the per annum rate at
which interest accrues on such Mortgage Loan as stated in the related Note, in
each case without giving effect to the Excess Rate or the Default Rate with
respect to any Mortgage Loan. Notwithstanding the foregoing, if any Mortgage
Loan does not accrue interest on the basis of a 360-day year consisting of
twelve 30-day months, then, for purposes of calculating Pass-Through Rates, the
Mortgage Rate of such Mortgage Loan for any one-month period preceding a related
Due Date shall be a per annum rate equal to the Mortgage Rate thereof multiplied
by a fraction, the numerator of which is the actual number of days in such
Interest Accrual Period and the denominator of which is 30; provided however,
that with respect to each Interest Reserve Loan (as defined herein), (i) the
Mortgage Rate for the Collection Period preceding the Due Dates in (a) January
and February in each year that is not a leap year or (b) in February only in
each year that is a leap year, will be determined net of the Withheld Amounts
and (ii) the Mortgage Rate for the Collection Period preceding the Due Dates in
March for each related Interest Reserve Loan will be determined after taking
into account the addition of the Withheld Amounts with respect to each such
Mortgage Loan.
"Mortgaged Property": The underlying property or in the case of a Mortgage
Loan secured by multiple properties, any one of the underlying properties,
securing a Mortgage Loan, including any REO Property, consisting of a fee simple
estate, and, with respect to certain Mortgage Loans, a leasehold estate, or both
a leasehold estate and a fee simple estate, or a leasehold estate in a portion
of the property and a fee simple estate in the remainder, in one or more parcels
of land improved by a commercial or multifamily property, together with any
personal property, fixtures, leases and other property or rights pertaining
thereto.
"MSMC": Morgan Stanley Mortgage Capital Inc., a New York corporation.
"Net Default Interest": As defined in Section 3.05(c).
"Net Insurance Proceeds": Insurance Proceeds, to the extent such proceeds
are not to be applied to the restoration of the related Mortgaged Property or
released to the Borrower in accordance with the express requirements of the
Mortgage or Note or other Loan Documents included in the Mortgage File or in
accordance with prudent and customary servicing practices.
"Net Liquidation Proceeds": The Liquidation Proceeds received with respect
to any Mortgage Loan net of the amount of (i) Liquidation Expenses incurred with
respect thereto and, (ii) with respect to proceeds received in connection with
the taking of a Mortgaged Property (or portion thereof) by the power of eminent
domain in condemnation, amounts required to be applied to the restoration or
repair of the related Mortgaged Property.
"Net Mortgage Rate": With respect to any Mortgage Loan and any Distribution
Date, the per annum rate equal to the Mortgage Rate for such Mortgage Loan minus
the related Servicing Fee Rate; provided, however, that for purposes of
calculating any Pass-Through Rate, the Net Mortgage Rate of such Mortgage Loan
shall be determined without regard to any modification, waiver or amendment of
the terms of such Mortgage Loan, whether agreed to by the Special Servicer or
resulting from bankruptcy, insolvency or similar proceeding involving the
related Borrower.
"Net REO Proceeds": With respect to each REO Property and any related REO
Mortgage Loan, REO Proceeds with respect to such REO Property or REO Mortgage
Loan net of any insurance premiums, taxes, assessments, ground rents and other
costs and expenses permitted to be paid therefrom pursuant to Section 3.17(b) of
this Agreement.
"New Lease": Any lease of REO Property entered into on behalf of the Trust
Fund, including any lease renewed or extended on behalf of the Trust Fund if the
Trust Fund has the right to renegotiate the terms of such lease.
"Non-U.S. Person": A person that is not a U.S. Person.
"Nonrecoverable Advance": Any portion of an Advance proposed to be made or
previously made which has not been previously reimbursed to the Master Servicer,
the Special Servicer or the Trustee, as applicable, and which, in the good faith
business judgment of the Master Servicer, the Special Servicer or the Trustee,
as applicable, will not or, in the case of a proposed Advance, would not be
ultimately recoverable from late payments, Insurance Proceeds, Liquidation
Proceeds and other collections on or in respect of the related Mortgage Loan.
The judgment or determination by the Master Servicer, the Special Servicer or
the Trustee that it has made a Nonrecoverable Advance or that any proposed
Advance, if made, would constitute a Nonrecoverable Advance shall be evidenced
in the case of the Master Servicer or Special Servicer, by a certificate of a
Servicing Officer delivered to the Trustee, the Depositor and, in the case of
the Special Servicer, to the Master Servicer, and in the case of the Trustee, by
a certificate of a Responsible Officer of the Trustee delivered to the
Depositor, which in each case sets forth such judgment or determination and the
procedures and considerations of the Master Servicer, Special Servicer, or
Trustee, as applicable, forming the basis of such determination (including, but
not limited to, information selected by the person making such judgment or
determination in its good faith discretion, such as related income and expense
statements, rent rolls, occupancy status, property inspections, Master Servicer,
Special Servicer or Trustee inquiries, third party engineering and environmental
reports, and an appraisal conducted by an MAI appraiser in accordance with MAI
standards or any Updated Appraisal thereof conducted within the past 12 months;
copies of such documents to be included with the certificate of a Responsible
Officer). Any determination of non-recoverability made by the Master Servicer
may be made without regard to any value determination made by the Special
Servicer other than pursuant to an Updated Appraisal. Any determination by the
Master Servicer or Special Servicer that an Advance is non-recoverable or would
be non-recoverable if made, may be conclusively relied upon by the Trustee.
"NorthTown Mall": The Mortgage Loan identified as No. 5 on the Mortgage
Loan Schedule.
"Norwest Fund": As defined in the definition of "Permitted Investments."
"Note": With respect to any Mortgage Loan as of any date of determination,
the note or other evidence of indebtedness and/or agreements evidencing the
indebtedness of a Borrower under such Mortgage Loan, including any amendments or
modifications, or any renewal or substitution notes, as of such date.
"Notice of Termination": Any of the notices given to the Trustee by the
Master Servicer, the Depositor or any Holder of a Class LR Certificate pursuant
to Section 9.01(c).
"Notional Amount": In the case of the Class X Certificates, the Class X
Notional Amount. In the case of any Component, as set forth in the applicable
definition thereof.
"Officers' Certificate": A certificate signed by the Chairman of the Board,
the Vice Chairman of the Board, the President or a Vice President (however
denominated) and by the Treasurer, the Secretary, one of the Assistant
Treasurers or Assistant Secretaries, any Trust Officer or other officer of the
Master Servicer or the Special Servicer, as the case may be, customarily
performing functions similar to those performed by any of the above designated
officers and also with respect to a particular matter, any other officer to whom
such matter is referred because of such officer's knowledge of and familiarity
with the particular subject, or an authorized officer of the Depositor, and
delivered to the Depositor, the Trustee or the Master Servicer, as the case may
be.
"Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be counsel for the Depositor, the Special Servicer or the Master
Servicer, as the case may be, acceptable to the Trustee, except that any opinion
of counsel relating to (a) qualification of the Upper-Tier REMIC or Lower-Tier
REMIC as a REMIC or the imposition of tax under the REMIC Provisions on any
income or property of either REMIC, (b) compliance with the REMIC Provisions
(including application of the definition of "Independent Contractor"), (c)
qualification of the Grantor Trust as a grantor trust or (d) a resignation of
the Master Servicer pursuant to Section 6.04, must be an opinion of counsel who
is Independent of the Depositor, the Special Servicer and the Master Servicer.
"Originator": Secore.
"Ownership Interest": Any record or beneficial interest in a Class R or
Class LR Certificate.
"P&I Advance": As to any Mortgage Loan, any advance made by the Master
Servicer, pursuant to Section 4.06(b)(iii), or by the Trustee, pursuant to
Section 4.06(e). Each reference to the payment or reimbursement of a P&I Advance
shall be deemed to include, whether or not specifically referred to but without
duplication, payment or reimbursement of interest thereon at the Advance Rate
through the date of payment or reimbursement.
"Pass-Through Rate": Each of the Class A-1 Pass-Through Rate, the Class A-2
Pass-Through Rate, the Class X Pass-Through Rate, the Class B Pass-Through Rate,
the Class C Pass-Through Rate, the Class D Pass-Through Rate, the Class E
Pass-Through Rate, the Class F Pass-Through Rate, and any of the Component
Pass-Through Rates. The Class Q, Class R and Class LR Certificates do not have
Pass-Through Rates.
"Paying Agent": The paying agent appointed pursuant to Section 5.04.
"Percentage Interest": As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made with respect to the
related Class. With respect to any Certificate (except the Class Q, Class R and
Class LR Certificates), the Percentage Interest is equal to the initial
denomination of such Certificate divided by the initial Certificate Principal
Amount or Notional Amount, as applicable, of such Class of Certificates. With
respect to any Class Q, Class R or Class LR Certificate, the percentage interest
is set forth on the face thereof.
"Permitted Investments": Any one or more of the following obligations or
securities payable on demand or having a scheduled maturity on or before the
Business Day preceding the date upon which such funds are required to be drawn,
regardless of whether issued by the Depositor, the Master Servicer, the Trustee
or any of their respective Affiliates and having at all times the required
ratings, if any, provided for in this definition, unless each Rating Agency
shall have confirmed in writing to the Master Servicer that a lower rating would
not, in and of itself, result in a downgrade, qualification or withdrawal of the
then current ratings assigned to the Certificates:
(i) obligations of, or obligations fully guaranteed as to payment of
principal and interest by, the United States or any agency or
instrumentality thereof provided such obligations are backed by the
full faith and credit of the United States of America including,
without limitation, obligations of: the U.S. Treasury (all direct or
fully guaranteed obligations), the Farmers Home Administration
(certificates of beneficial ownership), the General Services
Administration (participation certificates), the U.S. Maritime
Administration (guaranteed Title XI financing), the Small Business
Administration (guaranteed participation certificates and guaranteed
pool certificates), the U.S. Department of Housing and Urban
Development (local authority bonds) and the Washington Metropolitan
Area Transit Authority (guaranteed transit bonds); provided, however,
that the investments described in this clause must (A) have a
predetermined fixed dollar of principal due at maturity that cannot
vary or change, (B) if such investments have a variable rate of
interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move proportionately with
that index, and (C) such investments must not be subject to
liquidation prior to their maturity;
(ii) Federal Housing Administration debentures;
(iii)obligations of the following United States government sponsored
agencies: Federal Home Loan Mortgage Corp. (debt obligations), the
Farm Credit System (consolidated systemwide bonds and notes), the
Federal Home Loan Banks (consolidated debt obligations), the Federal
National Mortgage Association (debt obligations), the Student Loan
Marketing Association (debt obligations), the Financing Corp. (debt
obligations), and the Resolution Funding Corp. (debt obligations);
provided, however, that the investments described in this clause must
(A) have a predetermined fixed dollar amount of principal due at
maturity that cannot vary or change, (B) if such investments have a
variable rate of interest, such interest rate must be tied to a single
interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (C) such investments must not be
subject to liquidation prior to their maturity;
(iv) federal funds, unsecured certificates of deposit, time or similar
deposits, bankers' acceptances and repurchase agreements, with
maturities of not more than 365 days, of any bank, the short term
obligations of which are rated in the highest short term rating
category by each Rating Agency (or, if permitted by the related
Mortgage Loan, if not rated by S&P or DCR, otherwise acceptable to S&P
or DCR, as applicable, as confirmed in writing that such investment
would not, in and of itself, result in a downgrade, qualification or
withdrawal of the then current ratings assigned to the Certificates);
provided, however, that the investments described in this clause must
(A) have a predetermined fixed dollar amount of principal due at
maturity that cannot vary or change, (B) if such investments have a
variable rate of interest, such interest rate must be tied to a single
interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (C) such investments must not be
subject to liquidation prior to their maturity;
(v) fully Federal Deposit Insurance Corporation-insured demand and time
deposits in (or, if maturing in less than 30 days, in certificates of
deposit of, or bankers' acceptances issued by) any bank or trust
company, savings and loan association or savings bank, the short term
obligations of which are rated in the highest short term rating
category by each Rating Agency (or, if permitted by the related
Mortgage Loan, if not rated by S&P or DCR, otherwise acceptable to S&P
or DCR, as applicable, as confirmed in writing that such investment
would not, in and of itself, result in a downgrade, qualification or
withdrawal of the then current ratings assigned to the Certificates);
provided, however, that the investments described in this clause must
(A) have a predetermined fixed dollar amount of principal due at
maturity that cannot vary or change, (B) if such investments have a
variable rate of interest, such interest rate must be tied to a single
interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (C) such investments must not be
subject to liquidation prior to their maturity;
(vi) debt obligations with maturities of not more than 365 days rated by
each Rating Agency (or, if permitted by the related Mortgage Loan, if
not rated by S&P or DCR, otherwise acceptable to S&P or DCR, as
applicable, as confirmed in writing that such investment would not, in
and of itself, result in a downgrade, qualification or withdrawal of
the then current ratings assigned to the Certificates) in its highest
long-term unsecured rating category; provided, however, that the
investments described in this clause must (A) have a predetermined
fixed dollar of principal due at maturity that cannot vary or change,
(B) if such investments have a variable rate of interest, such
interest rate must be tied to a single interest rate index plus a
fixed spread (if any) and must move proportionately with that index,
and (C) such investments must not be subject to liquidation prior to
their maturity;
(vii)commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than one year after the date of issuance
thereof) with maturities of not more than 365 days and that is rated
by each Rating Agency (or, if permitted by the related Mortgage Loan,
if not rated by S&P or DCR, otherwise acceptable to S&P or DCR, as
applicable, as confirmed in writing that such investment would not, in
and of itself, result in a downgrade, qualification or withdrawal of
the then current ratings assigned to the Certificates) in its highest
short-term unsecured debt rating; provided, however, that the
investments described in this clause must (A) have a predetermined
fixed dollar of principal due at maturity that cannot vary or change,
(B) if such investments have a variable rate of interest, such
interest rate must be tied to a single interest rate index plus a
fixed spread (if any) and must move proportionately with that index,
and (C) such investments must not be subject to liquidation prior to
their maturity;
(viii) the Federated Prime Obligation Money Market Fund (the "Fund") and
the Norwest Advantage U.S. Government Money Market Fund, or any
successor to such fund (the "Norwest Fund"), so long as the Fund or
the Norwest Fund, as applicable, is rated by each Rating Agency in its
highest ratings category applicable to money market funds (or, if not
rated by S&P or DCR, otherwise acceptable to S&P or DCR, as
applicable, as confirmed in writing that such investment would not, in
and of itself, result in a downgrade, qualification or withdrawal of
the then current ratings assigned to the Certificates); and
(ix) any other demand, money market or time deposit, demand obligation or
any other obligation, security or investment, provided that each
Rating Agency has confirmed in writing to the Master Servicer, Special
Servicer or Trustee, as applicable, that such investment would not, in
and of itself, result in a downgrade, qualification or withdrawal of
the then current ratings assigned to the Certificates;
provided, however, that, in each case, if the investment is rated by S&P, it
shall not have an "r" highlighter affixed to its ratings from S&P; provided
further, however, that, in the judgment of the Master Servicer, such instrument
continues to qualify as a "cash flow investment" pursuant to Code Section
860G(a)(6) earning a passive return in the nature of interest and that no
instrument or security shall be a Permitted Investment if (i) such instrument or
security evidences a right to receive only interest payments or (ii) the right
to receive principal and interest payments derived from the underlying
investment provides a yield to maturity in excess of 120% of the yield to
maturity at par of such underlying investment.
Notwithstanding the foregoing, to the extent that the Loan Documents with
respect to a particular Mortgage Loan require the funds in the related Borrower
Accounts to be invested in investments other than those itemized in clause (i)
through (ix) above, the Master Servicer shall invest the funds in such Borrower
Accounts in accordance with the terms of the related Loan Documents.
"Permitted Transferee": With respect to a Class R or Class LR Certificate,
any Person that is a Qualified Institutional Buyer other than (a) a Disqualified
Organization, (b) any other Person so designated by the Certificate Registrar
based upon an Opinion of Counsel (provided at the expense of such Person or the
Person requesting the Transfer) to the effect that the Transfer of an Ownership
Interest in any Class R or Class LR Certificate to such Person may cause the
Upper-Tier REMIC or Lower-Tier REMIC to fail to qualify as a REMIC at any time
that the Certificates are outstanding, (c) a Person that is a Disqualified
Non-U.S. Person and (d) a Plan or any Person investing the assets of a Plan.
"Person": Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Plan": As defined in Section 5.02(k).
"Prepayment Assumption": The assumption that each of the Mortgage Loans
prepays on its respective Effective Maturity Date.
"Prepayment Interest Shortfall": With respect to any Distribution Date and
any Mortgage Loan, an amount equal to the amount of any shortfall in collections
of interest, adjusted to the applicable Net Mortgage Rate, resulting from a
Principal Prepayment on such Mortgage Loan during the related Collection Period
and prior to the Due Date in such Collection Period.
"Prepayment Premium": Payments received on a Mortgage Loan as the result of
the receipt of certain Unscheduled Payments (other than an amount paid in
connection with the release of the related Mortgaged Property through
defeasance), which are intended to compensate the holder of the related Note for
prepayment.
"Principal Balance Certificates": The Class A-1, Class A-2, Class B, Class
C, Class D, Class E and Class F Certificates collectively.
"Principal Distribution Amount": For any Distribution Date, the sum,
without duplication, of:
(i) the principal component of all scheduled Monthly Payments (other than
Balloon Payments) which become due on the Due Date immediately
preceding such Distribution Date (if received, or advanced by the
Master Servicer, the Special Servicer or Trustee, in respect of such
Distribution Date) with respect to the Mortgage Loans;
(ii) the principal component of all Extended Monthly Payments due on the
related Due Date (if received, or advanced by the Master Servicer, the
Special Servicer or Trustee, in respect of such Distribution Date)
with respect to the Mortgage Loans;
(iii)the principal component of any payments (including any Balloon
Payment) on any Mortgage Loan received on or after the Maturity Date
thereof in the related Collection Period; and
(iv) the portion of Unscheduled Payments allocable to principal of any
Mortgage Loan received or applied during the related Collection
Period, net of the principal portion of any unreimbursed P&I Advances
related to such Mortgage Loan.
The principal component of the amounts set forth above shall be determined
in accordance with Section 1.02 hereof.
"Principal Prepayment": Any payment of principal made by a Borrower on a
Mortgage Loan which is received in advance of its scheduled Due Date and which
is not accompanied by an amount of interest representing the full amount of
scheduled interest due on any date or dates in any month or months subsequent to
the month of prepayment other than any amount paid in connection with the
release of the related Mortgaged Property through defeasance.
"Private Global Certificate": As defined in Section 5.01 hereof.
"Property Advance": As to any Mortgage Loan, any advance made by the Master
Servicer, Special Servicer or the Trustee in respect of Property Protection
Expenses or any expenses incurred to protect, preserve and enforce the security
for a Mortgage Loan or taxes and assessments or insurance premiums, pursuant to
Section 3.04, Section 3.08 or Section 3.22, as applicable. Each reference to the
payment or reimbursement of a Property Advance shall be deemed to include,
whether or not specifically referred to but without duplication, payment or
reimbursement of interest thereon at the Advance Rate from and including the
date of the making of such Advance through and including the date of payment or
reimbursement.
"Property Protection Expenses": Any costs and expenses incurred by the
Master Servicer or the Special Servicer pursuant to Sections 3.04, 3.08,
3.10(a), 3.10(b), 3.10(f), 3.10(g), 3.10(i) and 3.17(b) or indicated herein as
being a cost or expense to be advanced by the Master Servicer or the Special
Servicer, as applicable.
"Public Global Certificate": Each of the Class A-1, Class A-2, Class B,
Class C, Class D and Class E Certificates so long as any such Class of
Certificates is registered in the name of a nominee of the Depository.
"Qualified Institutional Buyer" or "QIB": A qualified institutional buyer
within the meaning of Rule 144A.
"Qualified Insurer": As used in Sections 3.08 and 5.08, in the case of (i)
all policies not referred to in clause (ii) below, an insurance company or
security or bonding company qualified to write the related insurance policy in
the relevant jurisdiction and whose claims paying ability is rated in one of the
two highest applicable rating categories by S&P and DCR, and (ii) in the case of
the fidelity bond and the errors and omissions insurance required to be
maintained pursuant to Section 3.08(c), an insurance company or security or
bonding company having a claim paying ability rated by each Rating Agency (and
if such company is not rated by DCR, is otherwise acceptable to DCR) no lower
than two ratings categories (without regard to pluses or minuses) lower than the
highest rating of any outstanding Class of Certificates from time to time, but
in no event lower than "A" by DCR and S&P, unless in the case where such
insurance is not rated by one or more Rating Agencies or where such insurance
has a claims paying ability rated by one or more Rating Agencies in a rating
category lower than required herein, each such Rating Agency has confirmed in
writing that obtaining the related insurance from an insurance company that is
not rated by such Rating Agency (subject to the foregoing exceptions) or that
has a lower claims paying ability than such requirements shall not result, in
and of itself, in a downgrade, qualification or withdrawal of the then current
ratings by such Rating Agency to any Class of Certificates.
"Qualified Mortgage": A Mortgage Loan that is a "qualified mortgage" within
the meaning of Code Section 860G(a)(3) of the Code (but without regard to the
rule in Treasury Regulations Section 1.860G-2(f)(2) that treats a defective
obligation as a qualified mortgage, or any substantially similar successor
provision).
"Rated Final Distribution Date": The Distribution Date occurring in October
2034.
"Rating Agency": Either of DCR or S&P. References herein to the highest
long-term unsecured debt rating category of DCR and S&P shall mean "AAA" and in
the case of any other rating agency shall mean such highest rating category or
better without regard to any plus or minus or numerical qualification.
"Real Property": Land or improvements thereon such as buildings or other
inherently permanent structures thereon (including items that are structural
components of the buildings or structures), in each such case as such terms are
used in the REMIC Provisions.
"Realized Loss": With respect to any Distribution Date, the amount, if any,
by which the aggregate Certificate Principal Amount of the Certificates after
giving effect to distributions on such Distribution Date exceeds the aggregate
Stated Principal Balance of the Mortgage Loans after giving effect to any
payments of principal received or advanced with respect to the Due Date
occurring immediately prior to such Distribution Date.
"Reassignment of Assignment of Leases, Rents and Profits": As defined in
Section 2.01(viii).
"Record Date": With respect to each Distribution Date and each Class of
Certificates, the close of business on the last day of the month immediately
preceding the month in which such Distribution Date occurs, or if such day is
not a Business Day, the immediately preceding Business Day.
"Regular Certificates": The Class A-1, Class A-2, Class X, Class B, Class
C, Class D, Class E and Class F Certificates.
"Regulation D": Regulation D under the Act.
"Regulation S": Regulation S under the Act.
"Regulation S Global Certificate": As defined in Section 5.01.
"Regulation S Investor": With respect to a transferee of an interest in a
Regulation S Global Certificate, a transferee that acquires such interest
pursuant to Regulation S.
"Regulation S Transfer Certificate": As defined in Section 5.02(c)(i)(B).
"Related Certificate" and "Related Lower-Tier Regular Interest": For any
Class of Lower-Tier Regular Interest, the related Class of Certificates set
forth below, and for any Class of Certificates (other than the Class X, Class Q,
Class R and Class LR Certificates), the related Class of Lower-Tier Regular
Interest set forth below:
Related Lower-Tier
Related Certificate Regular Interest
------------------- ----------------
Class A-1......................... Class LA-1
Class A-2......................... Class LA-2
Class B........................... Class LB
Class C........................... Class LC
Class D........................... Class LD
Class E........................... Class LE
Class F........................... Class LF
"REMIC": A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
"REMIC Provisions": Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at Section 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations (including any applicable proposed regulations) and rulings
promulgated thereunder, as the foregoing may be in effect from time to time.
"Rents from Real Property": With respect to any REO Property, gross income
of the character described in Section 856(d) of the Code, which income, subject
to the terms and conditions of that Section of the Code in its present form,
does not include:
(i) except as provided in Section 856(d)(4) or (6) of the Code, any amount
received or accrued, directly or indirectly, with respect to such REO
Property, if the determination of such amount depends in whole or in
part on the income or profits derived by any Person from such property
(unless such amount is a fixed percentage or percentages of receipts
or sales and otherwise constitutes Rents from Real Property);
(ii) any amount received or accrued, directly or indirectly, from any
Person if the Trust Fund owns directly or indirectly (including by
attribution) a ten percent or greater interest in such Person
determined in accordance with Sections 856(d)(2)(B) and (d)(5) of the
Code;
(iii)any amount received or accrued, directly or indirectly, with respect
to such REO Property if any Person Directly Operates such REO
Property;
(iv) any amount charged for services that are not customarily furnished in
connection with the rental of property to tenants in buildings of a
similar class in the same geographic market as such REO Property
within the meaning of Treasury Regulations Section 1.856-4(b)(1)
(whether or not such charges are separately stated); and
(v) rent attributable to personal property unless such personal property
is leased under, or in connection with, the lease of such REO Property
and, for any taxable year of the Trust Fund, such rent is no greater
than 15 percent of the total rent received or accrued under, or in
connection with, the lease.
"REO Account": As defined in Section 3.17(b).
"REO Mortgage Loan": Any Mortgage Loan as to which the related Mortgaged
Property has become an REO Property.
"REO Proceeds": With respect to any REO Property and the related REO
Mortgage Loan, all revenues received by the Special Servicer with respect to
such REO Property or REO Mortgage Loan which do not constitute Liquidation
Proceeds.
"REO Property": A Mortgaged Property title to which has been acquired by
the Special Servicer on behalf of the Trust Fund through foreclosure, deed in
lieu of foreclosure or otherwise.
"Repurchase Price": With respect to a Mortgage Loan, the sum of:
(i) the outstanding principal balance of such Mortgage Loan as of the date
of purchase;
(ii) all accrued and unpaid interest on such Mortgage Loan at the related
Mortgage Rate, in effect from time to time, to but not including the
Due Date in the Collection Period of purchase;
(iii)all related unreimbursed Property Advances plus accrued and unpaid
interest on all related Advances at the Advance Rate (to the extent
provided hereunder), and accrued and unpaid Special Servicing Fees
allocable to such Mortgage Loan; and
(iv) all reasonable out-of-pocket expenses reasonably incurred by the
Master Servicer, the Special Servicer, the Depositor and the Trustee
in respect of the breach giving rise to the repurchase obligation,
including any expenses arising out of the enforcement of the
repurchase obligation, which are reimbursable to such parties pursuant
to the terms herein.
"Request for Release": A request for a release signed by a Servicing
Officer, substantially in the form of Exhibit E hereto.
"Reserve Accounts": With respect to any Mortgage Loan, reserve accounts, if
any, established pursuant to the Mortgage or the Loan Agreement and any Escrow
Account. Any Reserve Account shall be beneficially owned for federal income tax
purposes by the Person who is entitled to receive the reinvestment income or
gain thereon in accordance with the terms and provisions of the related Mortgage
Loan and Section 3.07, which Person shall be taxed on all reinvestment income or
gain thereon. To the extent not inconsistent with the related Mortgage Loan,
each such Reserve Account shall be an Eligible Account.
"Residual Certificates": The Class R and Class LR Certificates.
"Responsible Officer": Any officer of the Corporate Trust Department of the
Trustee (and, in the event that the Trustee is not the Certificate Registrar or
the Paying Agent, of the Certificate Registrar or the Paying Agent, as
applicable) assigned to the Corporate Trust Office with direct responsibility
for the administration of this Agreement and also, with respect to a particular
matter, any other officer to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject, and, in the
case of any certification required to be signed by a Responsible Officer, such
an officer whose name and specimen signature appears on a list of corporate
trust officers furnished to the Master Servicer by the Trustee, as such list may
from time to time be amended.
"Restricted Certificate": As defined in Section 5.02(k).
"Revised Mortgage Rate": With respect to any Mortgage Loan, the revised
Mortgage Rate on each such Mortgage Loan (in the absence of a default), as set
forth on the Mortgage Loan Schedule.
"Rule 144A": Rule 144A under the Act.
"Rule 144A Global Certificates": As defined in Section 5.01.
"S&P": Standard & Poor's Ratings Services, a division of The McGraw Hill
Companies, Inc.
"Scheduled Final Distribution Date": The Distribution Date occurring in
October 2032.
"Secore": Secore Financial Corporation, a Pennsylvania corporation.
"Securities Legend": With respect to each Private Global Certificate,
Residual Certificate or any Individual Certificate, the legend set forth in, and
substantially in the form of, Exhibit F hereto.
"Servicing Fee": With respect to each Mortgage Loan and for any
Distribution Date, an amount equal to the product of (i) the Servicing Fee Rate
(converted to a monthly rate) and (ii) the Stated Principal Balance of such
Mortgage Loan; provided, that such amounts shall be computed on the basis of the
same principal amount and, in connection with any partial interest payment, for
the same period respecting which any related interest payment due or deemed due
on the related Mortgage Loan is computed. Such amount includes the compensation
payable to the Master Servicer and the Trustee Fee. With respect to any
Distribution Date, to the extent that there are Prepayment Interest Shortfalls
with respect to Principal Prepayments received during the related Collection
Period, the Servicing Fee which the Master Servicer would otherwise be entitled
to with respect to all the Mortgage Loans for such Distribution Date (but not
the fees payable to the Special Servicer and the Trustee), shall be reduced (but
not below zero) up to the amount sufficient to fully offset such Prepayment
Interest Shortfalls.
"Servicing Fee Rate": A rate equal to: 0.028% per annum.
"Servicing Officer": Any officer or employee of the Master Servicer or the
Special Servicer, as applicable, involved in, or responsible for, the
administration and servicing of the Mortgage Loans or this Agreement and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's or employee's knowledge of and familiarity
with the particular subject, and, in the case of any certification required to
be signed by a Servicing Officer, such an officer or employee whose name and
specimen signature appears on a list of servicing officers furnished to the
Trustee by the Master Servicer or the Special Servicer, as applicable, as such
list may from time to time be amended by the Master Servicer or the Special
Servicer, as applicable.
"Servicing Standard": With respect to the Master Servicer or Special
Servicer shall mean the servicing of the Mortgage Loans by the Master Servicer
or Special Servicer in the best interests of and for the sole benefit of all of
the Certificateholders (as determined by the Master Servicer or Special Servicer
as the case may be, in the exercise of its good faith and reasonable judgment)
and in accordance with applicable law, the specific terms of the respective
Mortgage Loans and this Agreement and to the extent not inconsistent with the
foregoing, in the same manner in which, and with the same care, skill and
diligence as is normal and usual in its general mortgage servicing and REO
property management activities on behalf of third parties, giving due
consideration to customary and usual standards of practice of prudent
institutional commercial mortgage lenders servicing their own loans and to the
maximization of the net present value of the Mortgage Loans, or the same care,
skill, prudence and diligence which the Master Servicer and Special Servicer
uses for loans serviced for their own account, whichever is higher, with respect
to mortgage loans and REO properties that are comparable to those for which it
is responsible hereunder, and in each event 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
collection that will be distributable to Certificateholders to be performed at
the related Net Mortgage Rate), but in any case without regard to:
(i) any known relationship that the Master Servicer, the Special Servicer
or any Affiliate of the Master Servicer or the Special Servicer may
have with any Borrower or any other parties to this Agreement;
(ii) the ownership of any Certificate by the Master Servicer, the Special
Servicer or any Affiliate of the Master Servicer or Special Servicer,
as applicable;
(iii)the Master Servicer's or Special Servicer's obligation to make
Advances;
(iv) 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
for its services hereunder or with respect to any particular
transaction;
(v) the ownership, servicing or management for others or itself, by the
Master Servicer or the Special Servicer of any other mortgage loans or
properties; or
(vi) any obligation of the Master Servicer or Special Servicer, if it is
also an Originator, to pay any indemnity with respect to or repurchase
of any Mortgage Loan.
"Similar Law": As defined in Section 5.02(k).
"Special Event Report": As defined in Section 3.20.
"Special Servicer": Midland Loan Services, Inc., or any successor Special
Servicer appointed as provided herein.
"Special Servicer Event of Default": As defined in Section 7.01(b).
"Special Servicer's Appraisal Estimate": As defined in the definition of
Appraisal Reduction Amount.
"Special Servicing Compensation": With respect to any Mortgage Loan, any of
the Special Servicing Fee, the Special Servicing Rehabilitation Fee, and the
Liquidation Fee which shall be due to the Special Servicer.
"Special Servicing Fee": With respect to each Specially Serviced Mortgage
Loan and any Distribution Date, an amount per Interest Accrual Period equal to
the product of (i) one-twelfth of the Special Servicing Fee Rate and (ii) the
Stated Principal Balance of such Specially Serviced Mortgage Loan; provided,
that such amounts shall be computed on the basis of the same principal amount,
in connection with any partial interest payment, and for the same period
respecting which any related interest payment due or deemed due on the related
Mortgage Loan is computed; provided further, that such fee for the first
Interest Accrual Period shall be appropriately prorated to reflect the fact that
the first Interest Accrual Period is less than a full month.
"Special Servicing Fee Rate": A rate equal to 0.15% per annum.
"Special Servicing Rehabilitation Fee": As to any Mortgage Loan that has
been a Specially Serviced Mortgage Loan, on the occasion that such Mortgage Loan
has not been a Specially Serviced Mortgage Loan for three consecutive Collection
Periods (or 12 consecutive Collection Periods in the case of any Mortgage Loan
which became a Specially Serviced Mortgage Loan as a result of circumstances
described in clauses (iii) through (vii) of the definition thereof), an amount
equal to 0.75% of the highest Stated Principal Balance of such Mortgage Loan
while it was a Specially Serviced Mortgage Loan; provided, however, that such
Special Servicing Rehabilitation Fee shall be due only once for each Mortgage
Loan during the term of this Agreement.
"Specially Serviced Mortgage Loan": Subject to Section 3.24, any Mortgage
Loan with respect to which:
(i) the related Borrower has not made two consecutive Monthly Payments
(and has not cured at least one such Delinquency by the next Due Date
under such Mortgage Loan);
(ii) the Master Servicer or the Trustee, individually or collectively, have
made four consecutive P&I Advances (regardless of whether such P&I
Advances have been reimbursed), other than any P&I Advance with
respect to which the related Monthly Payment was received during the
related grace period specified in the applicable Loan Documents;
(iii)the related Borrower has expressed to the Master Servicer an
inability to pay or a hardship in paying the Mortgage Loan in
accordance with its terms;
(iv) the Master Servicer has received notice that the Borrower has become
the subject of any bankruptcy, insolvency or similar proceeding,
admitted in writing the inability to pay its debts as they come due or
made an assignment for the benefit of creditors;
(v) the Master Servicer has received notice of a foreclosure or threatened
foreclosure of any lien on the Mortgaged Property securing the
Mortgage Loan;
(vi) a default (A) of which the Master Servicer has notice (other than a
failure by the Borrower to pay principal or interest) and (B) which
materially and adversely affects the interests of the
Certificateholders has occurred, and remained unremedied for the
applicable grace period specified in the Mortgage Loan (or, if no
grace period is specified, 60 days); provided that a default requiring
a Property Advance shall be deemed to materially and adversely affect
the interests of the Certificateholders; or
(vii)in the opinion of the Master Servicer (consistent with the Servicing
Standard) a default under a Mortgage Loan is imminent and such
Mortgage Loan deserves the attention of the Special Servicer;
provided, however, that a Mortgage Loan will cease to be a Specially
Serviced Mortgage Loan:
(a) with respect to the circumstances described in clause (i) and (ii)
above, when the Borrower thereunder has brought the Mortgage Loan current and
thereafter made three consecutive full and timely Monthly Payments including
pursuant to any workout of the Mortgage Loan;
(b) with respect to the circumstances described in clause (iii), (iv), (v)
and (vii) above, when such circumstances cease to exist in the good faith
judgment of the Master Servicer; or
(c) with respect to the circumstances described in clause (vi) above, when
such default is cured;
provided, in any case, that at that time no circumstance identified in clauses
(i) through (vii) above exists that would cause the Mortgage Loan to continue to
be characterized as a Specially Serviced Mortgage Loan.
"Startup Day": The day designated as such pursuant to Section 2.06(a)
hereof.
"Stated Principal Balance": With respect to any Mortgage Loan at any date
of determination, an amount equal to (a) the principal balance as of the Cut-Off
Date of such Mortgage Loan, minus (b) the sum of (i) the principal portion of
each Monthly Payment or, if applicable, Extended Monthly Payment due on such
Mortgage Loan after the Cut-Off Date and prior to such date of determination, if
received from the Borrower or advanced by the Master Servicer or Trustee, (ii)
all Balloon Payments, voluntary and involuntary principal prepayments and other
unscheduled collections of principal received with respect to such Mortgage
Loan, to the extent distributed to Certificateholders or applied to other
payments required under this Agreement before such date of determination and
(iii) any adjustment to the principal balance of such Mortgage Loan as a result
of a reduction of principal by a bankruptcy court or as a result of a
modification reducing the principal amount due on such Mortgage Loan. The Stated
Principal Balance of a Mortgage Loan with respect to which title to the related
Mortgaged Property has been acquired by the Trust Fund is equal to the principal
balance thereof outstanding on the date on which such title is acquired less any
Net REO Proceeds allocated to principal on such Mortgage Loan. The Stated
Principal Balance of a Specially Serviced Mortgage Loan with respect to which
the Special Servicer has made a Final Recovery Determination is zero.
"Sub-servicing Agreements": As defined in Section 3.01(c).
"Subordinate Certificates": Any of the Class B, Class C, Class D, Class E
and Class F Certificates.
"Successor Manager": As defined in Section 3.19(b).
"Summary Report": A quarterly report or annual summary of quarterly reports
setting forth the information with respect to the Borrowers and Mortgaged
Properties, substantially in the form of Exhibit H hereto.
"Tax Returns": The federal income tax returns on IRS Form 1066, U.S. Real
Estate Mortgage Investment Conduit Income Tax Return, including Schedule Q
thereto, Quarterly Notice to Residual Interest Holders of REMIC Taxable Income
or Net Loss Allocation, or any successor forms, to be filed on behalf of each of
the Upper-Tier REMIC or Lower-Tier REMIC under the REMIC Provisions, together
with any and all other information, reports or returns that may be required to
be furnished to the Certificateholders or filed with the IRS or any other
governmental taxing authority under any applicable provisions of federal tax
laws or Applicable State and Local Tax Laws.
"Terminated Party": As defined in Section 7.01(c).
"Termination Date": The Distribution Date on which the Trust Fund is
terminated pursuant to Section 9.01.
"Transfer": Any direct or indirect transfer or other form of assignment of
any Ownership Interest in a Class R or Class LR Certificate.
"Transferee Affidavit": As defined in Section 5.02(l)(ii).
"Transferor Letter": As defined in Section 5.02(l)(ii).
"Treasury Rate": 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 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.
"Trust Fund": The corpus of the trust created hereby and to be administered
hereunder, consisting of: (i) such Mortgage Loans as from time to time are
subject to this Agreement, together with the Mortgage Files relating thereto;
(ii) all scheduled or unscheduled payments on or collections in respect of the
Mortgage Loans due after the Cut-Off Date; (iii) any REO Property; (iv) all
revenues received in respect of any REO Property; (v) the Master Servicer's, the
Special Servicer's and the Trustee's rights under the insurance policies with
respect to the Mortgage Loans required to be maintained pursuant to this
Agreement and any proceeds thereof; (vi) any Assignments of Leases, Rents and
Profits and any security agreements; (vii) any indemnities or guaranties given
as additional security for any Mortgage Loans; (viii) the Trustee's rights in
all assets deposited in the Lock-Box Accounts, Cash Collateral Accounts, Escrow
Accounts, Reserve Accounts; (ix) the Collection Account, the Lower-Tier
Distribution Account, the Upper-Tier Distribution Account, the Deferred Interest
Distribution Account, the Class Q Distribution Account, the Interest Reserve
Account and any REO Account, including reinvestment income thereon; (x) any
environmental indemnity agreements relating to the Mortgaged Properties; (xi)
the rights and remedies under the Loan Sale Agreement; and (xii) the proceeds of
any of the foregoing.
"Trust REMICs": The Lower-Tier REMIC and the Upper-Tier REMIC.
"Trustee": Norwest Bank Minnesota, National Association, a national banking
association, in its capacity as trustee, or its successor in interest, or any
successor trustee appointed as herein provided.
"Trustee Fee": With respect to each Mortgage Loan and for any Distribution
Date, an amount per Interest Accrual Period equal to the product of (i)
one-twelfth of the Trustee Fee Rate multiplied by (ii) the Stated Principal
Balance of such Mortgage Loan immediately prior to such Distribution Date;
provided, that such amounts shall be computed on the basis of the same principal
amount and for the same period respecting which any related interest payment due
or deemed due on the related Mortgage Loan is computed.
"Trustee Fee Rate": A rate equal to 0.003% per annum.
"Underwriter": Morgan Stanley & Co. Incorporated.
"Unscheduled Payments": With respect to a Mortgage Loan and a Collection
Period, all Net Liquidation Proceeds, Net Insurance Proceeds and net
condemnation proceeds payable under such Mortgage Loan, any Principal
Prepayment, any delinquent Monthly Payment received from the related Borrower
after the Master Servicer Remittance Date for the Due Date related to such
Monthly Payment, any Repurchase Price received in connection with a Mortgage
Loan repurchased from the Trust Fund pursuant to Sections 2.03, 3.18 or 9.01,
and any other payments under or with respect to such Mortgage Loan not scheduled
to be made, but excluding Prepayment Premiums, Deferred Interest, Default
Interest, and any amount paid in connection with the release of the related
Mortgaged Properties through defeasance.
"Updated Appraisal": An appraisal of a Mortgaged Property or REO Property,
as the case may be, conducted subsequent to any appraisal performed on or prior
to the Cut-Off Date and in accordance with MAI standards, the costs of which
shall be paid as a Property Advance by the Master Servicer. Updated Appraisals
shall be conducted by an Independent MAI appraiser selected by the Special
Servicer.
"Upper-Tier Distribution Account": The trust account or accounts created
and maintained as a separate trust account or accounts by the Trustee pursuant
to Section 3.05(b), which shall be entitled "Norwest Bank Minnesota, National
Association, as Trustee, in trust for Holders of Morgan Stanley Capital I Inc.,
Commercial Mortgage Pass-Through Certificates, Series 1998-XL2, Upper-Tier
Distribution Account" and which must be an Eligible Account.
"Upper-Tier REMIC": A segregated asset pool within the Trust Fund
consisting of the Lower-Tier Regular Interests and amounts held from time to
time in the Upper-Tier Distribution Account.
"U.S. Person": A person that is a citizen or resident of the United States,
a corporation, partnership (except to the extent provided in applicable Treasury
regulations), or other entity created or organized in or under the laws of the
United States or any political subdivision thereof, an estate whose income is
subject to United States federal income tax regardless of its source, or a trust
if a court within the United States is able to exercise primary supervision over
the administration of such trust, and one or more such U.S. Persons have the
authority to control all substantial decisions of such trust (or, to the extent
provided in applicable Treasury regulations, certain trusts in existence on
August 20, 1996 which are eligible to elect to be treated as U.S. Persons).
"Voting Rights": The portion of the voting rights of all of the
Certificates that is allocated to any Certificate or Class of Certificates. At
all times during the term of this Agreement, the percentage of the Voting Rights
assigned to each Class shall be (a) 0%, in the case of the Class Q, Class R and
Class LR Certificates; (b) 2.9%, in the case of the Class X Certificates (the
"Fixed Voting Rights Percentage"); (c) in the case of any of the Class A-1,
Class A-2, Class B, Class C, Class D, Class E and Class F Certificates, a
percentage equal to the product of (i) 100% minus the Fixed Voting Rights
Percentage multiplied by (ii) a fraction, the numerator of which is equal to the
aggregate outstanding Certificate Principal Amount of any such Class (which will
be reduced for this purpose by the amount of any Appraisal Reduction Amounts
notionally allocated to such Class, if applicable) and the denominator of which
is equal to the aggregate outstanding Certificate Principal Amounts of all
Classes of Certificates. The Voting Rights of any Class of Certificates shall be
allocated among Holders of Certificates of such Class in proportion to their
respective Percentage Interests. The aggregate Voting Rights of Holders of more
than one Class of Certificates shall be equal to the sum of the products of each
such Holder's Voting Rights and the percentage of Voting Rights allocated to the
related Class of Certificates. Any Certificateholder may transfer its Voting
Rights without transferring its ownership interest in the related Certificates
provided that such Certificateholder provides notice of such transfer to the
Trustee prior to the effectiveness of such transfer.
"WAC Rate": With respect to any Distribution Date, the weighted average of
the Net Mortgage Rates in effect for the Mortgage Loans as of their Due Dates in
the month preceding the month in which such Distribution Date occurs weighted on
the basis of their respective Stated Principal Balances on such Due Date.
"Westside Pavilion": The Mortgage Loan identified as No. 4 on the Mortgage
Loan Schedule.
"Withheld Amounts": As defined in Section 3.27(a).
SECTION 1.02. Certain Calculations.
Unless otherwise specified herein, the following provisions shall apply:
(a) All calculations of interest with respect to the Mortgage Loans shall
be made in accordance with the terms of the related Note and Mortgage or, if
such documents do not specify the basis upon which interest accrues thereon, on
the basis of 30 days in each month and a 360-day year.
(b The portion of any Insurance Proceeds and Net Liquidation Proceeds in
respect of a Mortgage Loan allocable to principal shall equal the total amount
of such proceeds minus (i) any portion thereof payable to the Master Servicer,
the Special Servicer or the Trustee pursuant to the provisions of this Agreement
and (ii) a portion thereof equal to the interest component of the Monthly
Payment or Extended Monthly Payment, as the case may be, at the related Net
Mortgage Rate from the date as to which interest was last paid by the Borrower
up to but not including the Due Date in the Collection Period in which such
proceeds are received.
(c) For purposes of distribution of Prepayment Premiums pursuant to
Sections 4.01(a)(ii) and 4.01(c) on any Distribution Date, the Class of
Lower-Tier Regular Interests or Certificates as to which any prepayment shall be
deemed to be distributed shall be determined on the assumption that the portion
of the Principal Distribution Amount paid to the Lower-Tier Regular Interests or
Certificates on such Distribution Date in respect of principal shall consist
first of scheduled payments included in the definition of Principal Distribution
Amount and second of prepayments included in such definition.
(d) Any Mortgage Loan payment is deemed to be received on the date such
payment is actually received by the Master Servicer, the Special Servicer or the
Trustee; provided, however, that for purposes of calculating distributions on
the Lower-Tier Regular Interests and the Certificates, Principal Prepayments
with respect to any Mortgage Loan are deemed to be received on the date they are
applied in accordance with Section 3.01(b) to reduce the outstanding principal
balance of such Mortgage Loan on which interest accrues.
(e) Any amounts received in respect of a Mortgage Loan as to which a
default has occurred shall be applied to Default Interest and other amounts due
on such Mortgage Loan prior to the application to late fees.
SECTION 1.03. Certain Constructions.
For purposes of this Agreement, references to the most or next most
subordinate Class of Certificates outstanding at any time shall mean the most or
next most subordinate Class of Certificates then outstanding as among the Class
A-1, Class A-2, Class X, Class B, Class C, Class D, Class E and Class F
Certificates; provided, however, that for purposes of determining the most
subordinate Class of Certificates, in the event that the Class A Certificates
are the only Class of Certificates outstanding (other than the Class X, Class Q,
Class LR or Class R Certificates), the Class A Certificates and the Class X
Certificates together will be treated as the most subordinate Class of
Certificates. For purposes of this Agreement, each Class of Certificates other
than the Class Q, Class LR and Class R Certificates shall be deemed to be
outstanding only to the extent its respective Certificate Principal Amount or
Notional Amount has not been reduced to zero; provided, however, that
notwithstanding the foregoing, solely for the purpose of distributing Deferred
Interest in accordance with the terms and priorities set forth in Section
4.01(e), any Class of Certificates entitled to distributions of Deferred
Interest shall continue to be deemed to be outstanding for so long as the
Mortgage Loans with respect to which such Class is entitled to distributions of
Deferred Interest received therefrom (as set forth in Section 4.01(e)) remain
outstanding. For purposes of this Agreement, the Class Q Certificates shall be
deemed to be outstanding so long as there are any Certificates outstanding and
the Class R and Class LR Certificates shall be deemed to be outstanding so long
as the Trust REMICs have not been terminated pursuant to Section 9.01.
<PAGE>
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans; Assignment of Loan Sale
Agreement.
The Depositor, concurrently with the execution and delivery hereof, does
hereby sell, transfer, assign, set over and otherwise convey to the Trustee
without recourse (except to the extent herein provided) all the right, title and
interest of the Depositor in and to the Mortgage Loans, including all rights to
payment in respect thereof, except as set forth below, and any security interest
thereunder (whether in real or personal property and whether tangible or
intangible) in favor of the Depositor, and all Reserve Accounts, Lock-Box
Accounts, Cash Collateral Accounts and all other assets included or to be
included in the Trust Fund, in trust for the benefit of the Certificateholders.
Such transfer and assignment includes all interest and principal due on or with
respect to the Mortgage Loans other than interest and principal due on or prior
to the Cut-Off Date. In connection with such transfer and assignment, the
Depositor shall make a cash deposit to the Collection Account in an amount equal
to the Cash Deposit. The Depositor, concurrently with execution and delivery
hereof, does also hereby transfer, assign, set over and otherwise convey to the
Trustee without recourse (except to the extent provided herein) all the right,
title and interest of the Depositor in, to and under the Loan Sale Agreement.
The Depositor shall cause the Reserve Accounts, Cash Collateral Accounts and
Lock-Box Accounts to be transferred to and held in the name of the Master
Servicer on behalf of the Trustee as successor to the applicable Originator.
In connection with such transfer and assignment, the Depositor
shall, on or prior to the Closing Date, deliver to, and deposit with, the
Custodian (on behalf of the Trustee), with copies to the Master Servicer and
Special Servicer, the following documents or instruments with respect to each
Mortgage Loan so assigned, along with a list indicating, with respect to each
Mortgage Loan, which of such documents or instruments are applicable with
respect to such Mortgage Loan:
(i) the original of the Note, endorsed (such endorsement may take the
form of a note allonge) without recourse to the order of the
Trustee in the following form: "Pay to the order of Norwest Bank
Minnesota, National Association, as Trustee for the Morgan
Stanley Capital I Inc. Commercial Mortgage Pass-Through
Certificates, Series 1998-XL2, without recourse" which Note and
all endorsements thereon or allonges thereto shall show a
complete chain of endorsement from the related Originator to the
Trustee;
(ii) the original recorded Mortgage or counterpart thereof showing the
related Originator as mortgagee or, if any such original Mortgage
has not been returned from the applicable public recording
office, a copy thereof certified by such recording office to be a
true and complete copy of the original thereof submitted for
recording;
(iii)an executed Assignment of Mortgage that is complete and in
suitable form for recordation in the jurisdiction in which the
Mortgaged Property is located to "Norwest Bank Minnesota,
National Association, as Trustee for the Morgan Stanley Capital I
Inc. Commercial Mortgage Pass-Through Certificates, Series
1998-XL2";
(iv) if the related security agreement is separate from the Mortgage,
the original executed version or counterpart of such security
agreement and the assignment thereof to the Trustee;
(v) a copy of the UCC-1 financing statement, together with an
original executed UCC-2 or UCC-3 financing statement that is
complete and in a form suitable for filing, disclosing the
assignment to the Trustee of the security interest in the
personal property (if any) constituting security for repayment of
the Mortgage Loan;
(vi) the original of the Loan Agreement or counterpart thereof
relating to such Mortgage Loan, if any;
(vii)the original lender's title insurance policy (or the original pro
forma title insurance policy), together with any endorsements
thereto;
(viii) if any related Assignment of Leases, Rents and Profits is
separate from the Mortgage, the original executed version or
counterpart thereof, together with an executed reassignment of
such instrument to the Trustee (a "Reassignment of Assignment of
Leases, Rents and Profits") that is complete and in suitable form
for recordation in the jurisdiction in which the Mortgaged
Property is located (which reassignment, however, may be included
in the Assignment of Mortgage and need not be a separate
instrument);
(ix) copies of the original Environmental Reports of the Mortgaged
Properties made in connection with origination of the Mortgage
Loan, if any, and copies of the original environmental
indemnities, if any;
(x) copies of the original Management Agreements, if any, for the
Mortgaged Properties and any consents of manager;
(xi) a copy of the related ground lease, if any, as amended, for the
Mortgaged Properties;
(xii)if the related assignment of contracts is separate from the
Mortgage, the original executed version of such assignment of
contracts and the assignment thereof to the Trustee;
(xiii) if any related Lock-Box Agreement or Cash Collateral Agreement
is separate from the Mortgage or Loan Agreement, a copy thereof;
with respect to the Reserve Accounts, Cash Collateral Accounts
and Lock-Box Accounts, if any, a copy of the UCC-1 financing
statements, if any, submitted for filing with respect to the
related Originator's security interest in the Reserve Accounts,
Cash Collateral Accounts and Lock-Box Accounts and all funds
contained therein (and UCC-2 or UCC-3 financing statements that
are complete and in a form suitable for filing assigning such
security interest to the Trustee on behalf of the
Certificateholders);
(xiv)the originals of any letters of credit, issued in the name of
the Trustee or endorsed or accompanied by an executed transfer
certificate showing assignment to the Trustee;
(xv) any and all side amendments, modifications and supplements to,
and waivers related to, any of the foregoing; and
(xvi) any other written agreements related to the Mortgage Loan.
On or promptly following the Closing Date, the Trustee shall, to the extent
possession thereof has been delivered to it by the Depositor (or its designee),
at the expense of the Depositor, (1) submit for recording (a) each Assignment of
Mortgage referred to in Section 2.01(iii) which has not yet been submitted for
recording and (b) each Reassignment of Assignment of Leases, Rents and Profits
referred to in Section 2.01(viii) (if not otherwise included in the related
Assignment of Mortgage) which has not yet been submitted for recordation; and
(2) submit for filing each UCC-2 or UCC-3 financing statement referred to in
Section 2.01(v) or (xiii) which has not yet been submitted for filing. The
Trustee shall upon delivery promptly submit (and in no event later than 30
Business Days following the receipt of the related documents in the case of
clause 1(a) above and 60 days following the Closing Date in the case of clauses
1(b) and 2 above) for recording or filing, as the case may be, in the
appropriate public recording office, each such document. In the event that any
such document is lost or returned unrecorded because of a defect therein, the
Depositor, or the Trustee, at the request and expense of the Depositor, shall
use its best efforts to promptly prepare a substitute document for signature by
the Depositor, and thereafter the Trustee shall cause each such document to be
duly recorded. The Trustee shall, promptly upon receipt of the original recorded
copy (and in no event later than five Business Days following such receipt)
deliver such original to the Custodian. Notwithstanding anything to the contrary
contained in this Section 2.01, in those instances where the public recording
office retains the original Mortgage, Assignment of Mortgage or Reassignment of
Assignment of Leases, Rents and Profits, if applicable, after any has been
recorded, the obligations hereunder of the Depositor shall be deemed to have
been satisfied upon delivery to the Custodian of a copy of such Mortgage,
Assignment of Mortgage or Reassignment of Assignment of Leases, Rents and
Profits, if applicable, certified by the public recording office to be a true
and complete copy of the recorded original thereof. If a pro forma title
insurance policy has been delivered to the Custodian in lieu of an original
title insurance policy, the Depositor will promptly deliver to the Custodian the
related original title insurance policy upon receipt thereof. The Depositor
shall promptly cause the UCC-1's referred to in Section 2.01(v) and (xiii), if
not already filed, to be filed in the applicable public recording office and
upon filing will promptly deliver to the Custodian the related UCC-1, with
evidence of filing thereon. The Depositor shall pay all recording fees of the
Trustee and shall reimburse the Trustee for all out-of-pocket expenses incurred
and filing fees paid by the Trustee in connection with its obligations under
this paragraph. Copies of such recorded or filed documents shall be delivered to
the Master Servicer by the Depositor or the Trustee, as applicable.
All original documents relating to the Mortgage Loans which are not
delivered to the Custodian are and shall be held by the Depositor, the Trustee
or the Master Servicer, as the case may be, in trust for the benefit of the
Certificateholders. In the event that any such original document is required
pursuant to the terms of this Section to be a part of a Mortgage File, such
document shall be delivered promptly to the Custodian.
SECTION 2.02. Acceptance by Custodian and the Trustee.
If the Depositor cannot deliver any original or certified recorded document
described in Section 2.01 on the Closing Date, the Depositor shall use its best
efforts, promptly upon receipt thereof and in any case not later than 45 days
from the Closing Date, to deliver such original or certified recorded documents
to the Custodian (unless the Depositor is delayed in making such delivery by
reason of the fact that such documents shall not have been returned by the
appropriate recording office in which case it shall notify the Custodian and the
Trustee in writing of such delay and shall deliver such documents to the
Custodian promptly upon the Depositor's receipt thereof). By its execution and
delivery of this Agreement, the Trustee acknowledges the assignment to it, in
trust, of the Mortgage Loans in good faith without notice of adverse claims and
declares that the Custodian holds and will hold such documents and all others
delivered to it constituting the Mortgage File (to the extent the documents
constituting the Mortgage File are actually delivered to the Custodian) for any
Mortgage Loan assigned to the Trustee hereunder in trust, upon the conditions
herein set forth, for the use and benefit of all present and future
Certificateholders. The Trustee agrees to review each Mortgage File within 45
days after the later of (a) the Trustee's receipt of such Mortgage File or (b)
execution and delivery of this Agreement, to ascertain that all documents (other
than the Environmental Reports referred to in clause (ix) of Section 2.01 which
shall be delivered to the Master Servicer) referred to in Section 2.01 above
(provided that, in the case of the documents referred to in Section 2.01(iv),
(v), (vi), (vii) (in the case of any endorsement thereto) and (viii) and (x)
through (xvi), only to the extent identified to it in writing by the Depositor)
and any original recorded documents referred to in the first sentence of this
Section 2.02 included in the delivery of a Mortgage File have been received,
have been executed, appear to be what they purport to be, purport to be recorded
or filed (as applicable) and have not been torn, mutilated or otherwise defaced,
and that such documents relate to the Mortgage Loans identified in the Mortgage
Loan Schedule. In so doing, the Trustee may rely on the purported due execution
and genuineness of any such document and on the purported genuineness of any
signature thereon. If at the conclusion of such review any document or documents
constituting a part of a Mortgage File (and, if applicable, identified by the
Depositor) have not been executed or received, have not been recorded or filed
(if required), are unrelated to the Mortgage Loans identified in the Mortgage
Loan Schedule, appear not to be what they purport to be or have been torn,
mutilated or otherwise defaced, the Trustee shall promptly so notify the
Depositor and MSMC by providing a written report, setting forth for each
affected Mortgage Loan, with particularity, the nature of the defective or
missing document. The Depositor shall, or shall cause MSMC to, deliver an
executed, recorded or undamaged document, as applicable, within 90 days of
receipt of such notice or, if the failure to deliver such document in such form
has a material adverse effect on the security provided by the related Mortgaged
Property (in the reasonable judgment of the Depositor), the Depositor shall, or
shall cause MSMC to, repurchase the related Mortgage Loan in the manner and
within the time period provided in Section 2.03. None of the Master Servicer,
the Special Servicer and the Trustee shall be responsible for any loss, cost,
damage or expense to the Trust Fund resulting from any failure to receive any
document constituting a portion of a Mortgage File noted on such a report.
The Trustee shall hold that portion of the Trust Fund delivered to the
Trustee consisting of "instruments" (as such term is defined in Section 9-105(i)
of the Uniform Commercial Code as in effect in Minnesota on the date hereof) in
the State of Minnesota and, except as otherwise specifically provided in this
Agreement, shall not remove such instruments from the State of Minnesota unless
it receives an Opinion of Counsel (obtained and delivered at the expense of the
Person requesting the removal of such instruments from the State of Minnesota)
that in the event the transfer of the Mortgage Loans to the Trustee is deemed
not to be a sale, after such removal, the Trustee will possess a first priority
perfected security interest in such instruments.
SECTION 2.03. Representations and Warranties of the Depositor.
(a) The Depositor hereby represents and warrants that:
(i) The Depositor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware;
(ii) The Depositor has taken all necessary action to authorize the
execution, delivery and performance of this Agreement by it, and
has the power and authority to execute, deliver and perform this
Agreement and all the transactions contemplated hereby,
including, but not limited to, the power and authority to sell,
assign and transfer the Mortgage Loans in accordance with this
Agreement;
(iii)This Agreement has been duly and validly authorized, executed
and delivered by the Depositor and assuming the due
authorization, execution and delivery of this Agreement by each
other party hereto, this Agreement and all of the obligations of
the Depositor hereunder are the legal, valid and binding
obligations of the Depositor, enforceable in accordance with the
terms of this Agreement, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, liquidation,
receivership, moratorium or other laws relating to or affecting
creditors' rights generally, or by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law);
(iv) The execution and delivery of this Agreement and the performance
of its obligations hereunder by the Depositor will not conflict
with any provision of its certificate of incorporation or bylaws,
or any law or regulation to which the Depositor is subject, or
conflict with, result in a breach of or constitute a default
under (or an event which with notice or lapse of time or both
would constitute a default under) any of the terms, conditions or
provisions of any agreement or instrument to which the Depositor
is a party or by which it is bound, or any order or decree
applicable to the Depositor, or result in the creation or
imposition of any lien on any of the Depositor's assets or
property, which would materially and adversely affect the ability
of the Depositor to carry out the transactions contemplated by
this Agreement. The Depositor has obtained any consent, approval,
authorization or order of any court or governmental agency or
body required for the execution, delivery and performance by the
Depositor of this Agreement;
(v) There is no action, suit or proceeding pending against the
Depositor in any court or by or before any other governmental
agency or instrumentality which would materially and adversely
affect the ability of the Depositor to carry out its obligations
under this Agreement; and
(vi) The Trustee, if not the owner of the related Mortgage Loan, will
have a valid and perfected security interest of first priority in
each of the Mortgage Loans and any proceeds thereof.
(b) It is understood and agreed that the representations and warranties set
forth in this Section 2.03 shall survive delivery of the respective Mortgage
Files to the Trustee until the termination of this Agreement, and shall inure to
the benefit of the Certificateholders and the Master Servicer.
(c) Upon discovery by the Custodian, the Master Servicer, the Special
Servicer, or the Trustee of a breach of any representation or warranty of MSMC
in the Loan Sale Agreement, with respect to any Mortgage Loan, or that any
document required to be included in the Mortgage File does not conform to the
requirements of Section 2.01, such Person shall give prompt notice thereof to
MSMC and the Depositor, and MSMC shall, to the extent MSMC is obligated to cure
or repurchase the related Mortgage Loan, under the terms of the Loan Sale
Agreement, either cure such breach or repurchase said Mortgage Loan, at the
Repurchase Price within 90 days of the receipt of notice of the breach; it being
understood and agreed that none of the Custodian, the Master Servicer, the
Special Servicer, and the Trustee has an obligation to conduct any investigation
with respect to such matters (except, in the case of the Mortgage Files, to the
extent provided in Section 2.02); provided, however, that in the event that such
breach or non-conformity (other than a breach or non-conformity that would cause
a related Mortgage Loan to fail to qualify as a Qualified Mortgage) is capable
of being cured but not within such 90 day period and MSMC has commenced and is
diligently proceeding with the cure of such breach or non-conformity within such
90 day period, MSMC shall have an additional 90 days to complete such cure;
provided, further, that with respect to such additional 90 day period MSMC shall
have delivered an officer's certificate to the Trustee and the Master Servicer
setting forth the reason such breach is not capable of being cured within the
initial 90 day period and what actions MSMC is pursuing in connection with the
cure thereof and stating that MSMC anticipates that such breach will be cured
within the additional 90 day period. Notwithstanding the foregoing, any such
breach or non-conformity that causes the related Mortgage Loan to fail to
qualify as a Qualified Mortgage shall be repurchased by MSMC at the Repurchase
Price within 90 days of the discovery of such breach or non-conformity.
(d) Upon receipt by the Master Servicer from MSMC of the Repurchase Price
for the repurchased Mortgage Loan, the Master Servicer shall deposit such amount
in the Collection Account, and the Trustee, pursuant to Section 3.11, shall,
upon receipt of a certificate of a Servicing Officer certifying as to the
receipt by the Master Servicer of the Repurchase Price and the deposit of the
Repurchase Price into the Collection Account pursuant to this Section 2.03(d),
release or cause to be released to MSMC the related Mortgage File and shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, representation or warranty, as shall be prepared by the Master
Servicer to vest in MSMC any Mortgage Loan released pursuant hereto, and any
rights of MSMC in, to and under the Loan Sale Agreement as it relates to such
Mortgage Loan, that were initially transferred to the Trust Fund under Section
2.01, and the Trustee and the Master Servicer shall have no further
responsibility with regard to such Mortgage File.
(e) In the event that MSMC incurs any expense in connection with curing a
breach of a representation or warranty pursuant to Section 2.03(c) which also
constitutes a default under the related Mortgage Loan, MSMC shall have a right,
subrogated to that of the Trustee, as successor to the mortgagee, to recover the
amount of such expenses from the related Borrower. The Master Servicer shall use
reasonable efforts in recovering, or assisting MSMC in recovering, from the
related Borrower the amount of any such expenses.
SECTION 2.04. Representations, Warranties and Covenants of the Master
Servicer and Special Servicer.
(a) The Master Servicer, in its capacity as Master Servicer hereunder,
hereby represents, warrants and covenants that as of the Closing Date:
(i) The Master Servicer is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Delaware; the Master Servicer is, and throughout the term of this
Agreement shall remain, to the extent necessary to comply with
its obligations under this Agreement, duly authorized and
qualified to transact business as a foreign corporation in each
jurisdiction where any Mortgaged Property is located; the Master
Servicer possesses and shall continue to possess all requisite
authority, power, licenses, permits, franchises, and approvals
necessary in order to conduct its business and to execute,
deliver, and comply with its obligations under this Agreement;
(ii) The execution and delivery of this Agreement and the Master
Servicer's performance of and compliance with the terms hereof in
the manner contemplated by this Agreement (A) will not violate
the charter or by-laws of the Master Servicer, respectively, or
any other instrument governing its operations and (B) will not
violate any laws, regulations, orders or decrees of any
governmental authority applicable to the Master Servicer, which
violation could reasonably be expected to materially and
adversely affect the Master Servicer's performance under this
Agreement and (C) will not constitute a default (or any event
which, with notice or lapse of time or both, would constitute a
default) under any contract, agreement, or other instrument to
which the Master Servicer is a party or which may be applicable
to any of its assets;
(iii)The Agreement constitutes a valid, legal, and binding obligation
of the Master Servicer, enforceable against it in accordance with
its terms, subject to bankruptcy, insolvency, reorganization,
receivership laws and other laws of general application affecting
the rights of creditors and subject to the application of the
rules of equity, including those respecting the availability of
specific performance;
(iv) The Agreement has been duly executed and delivered by the Master
Servicer;
(v) All consents, approvals, authorizations, orders or filings of or
with any court or governmental agency or body, if any, required
for the execution, delivery and performance of this Agreement by
the Master Servicer have been obtained or made;
(vi) There is no action, suit, proceeding or arbitration pending and,
to the best of the Master Servicer's knowledge, there is no
action, suit proceeding, arbitration, or governmental
investigation threatened against the Master Servicer the adverse
outcome of which (whether pending or threatened) could reasonably
be expected to materially and adversely affect the Master
Servicer's performance under this Agreement;
(vii)The Master Servicer will examine each Sub-Servicing Agreement
and will be familiar with the terms thereof. Any Sub-Servicing
Agreements will comply with the provisions of Section 3.01; and
(viii) Each officer or employee of the Master Servicer that has
responsibilities concerning the servicing and administration of
Mortgage Loans is covered by errors and omissions insurance in
the amounts and with the coverage required by Section 3.08.
Neither the Master Servicer nor, to the best of the Master
Servicer's knowledge, any of its officers or employees that is
involved in the servicing or administration of Mortgage Loans has
been refused such coverage or insurance.
(b) The Special Servicer, hereby represents, warrants and covenants that as
of the Closing Date or as of such date specifically provided herein:
(i) The Special Servicer is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Delaware; the Special Servicer is, and throughout the term of
this Agreement shall remain, to the extent necessary to comply
with its obligations under this Agreement, duly authorized and
qualified to transact business as a foreign corporation in each
jurisdiction where any Mortgaged Property is located; the Special
Servicer possesses and shall continue to possess all requisite
authority, power, licenses, permits, franchises, and approvals
necessary in order to conduct its business and to execute,
deliver, and comply with its obligations under this Agreement;
(ii) The execution and delivery of this Agreement and the Special
Servicer's performance of and compliance with the terms hereof in
the manner contemplated by this Agreement (A) will not violate
the charter or by-laws of the Special Servicer, respectively, or
any other instrument governing its operations and (B) will not
violate any laws, regulations, orders or decrees of any
governmental authority applicable to the Special Servicer, which
violation could reasonably be expected to materially and
adversely affect the Special Servicer's performance under this
Agreement and (C) will not constitute a default (or any event
which, with notice or lapse of time or both, would constitute a
default) under any contract, agreement, or other instrument to
which the Special Servicer is a party or which may be applicable
to any of its assets;
(iii)The Agreement constitutes a valid, legal, and binding obligation
of the Special Servicer, enforceable against it in accordance
with its terms, subject to bankruptcy, insolvency,
reorganization, receivership laws and other laws of general
application affecting the rights of creditors and subject to the
application of the rules of equity, including those respecting
the availability of specific performance;
(iv) The Agreement has been duly executed and delivered by the Special
Servicer;
(v) All consents, approvals, authorizations, orders or filings of or
with any court or governmental agency or body, if any, required
for the execution, delivery and performance of this Agreement by
the Special Servicer have been obtained or made;
(vi) There is no action, suit, proceeding or arbitration pending and,
to the best of the Special Servicer's knowledge, there is no
action, suit proceeding, arbitration, or governmental
investigation threatened against the Special Servicer the adverse
outcome of which (whether pending or threatened) could reasonably
be expected to materially and adversely affect the Special
Servicer's performance under this Agreement;
(vii)The Special Servicer will examine each Sub-Servicing Agreement
and will be familiar with the terms thereof. Any Sub-Servicing
Agreements will comply with the provisions of Section 3.01; and
(viii) Each officer or employee of the Special Servicer that has
responsibilities concerning the servicing and administration of
Mortgage Loans is covered by errors and omissions insurance in
the amounts and with the coverage required by Section 3.08.
Neither the Special Servicer nor, to the best of the Special
Servicer's knowledge, any of its officers or employees that is
involved in the servicing or administration of Mortgage Loans has
been refused such coverage or insurance.
(c) It is understood and agreed that the representations and warranties set
forth in this Section shall survive delivery of the respective Mortgage Files to
the Trustee or the Custodian on behalf of the Trustee until the termination of
this Agreement, and shall inure to the benefit of the Trustee, the Depositor and
the Master Servicer or Special Servicer, as the case may be. Upon discovery by
the Depositor, the Master Servicer, the Special Servicer or a Responsible
Officer of the Trustee (or upon written notice thereof from any
Certificateholder) of a breach of any of the representations and warranties set
forth in this Section which materially and adversely affects the interests of
the Certificateholders, the Master Servicer, the Special Servicer or the Trustee
in any Mortgage Loan, the party discovering such breach shall give prompt
written notice to the other parties hereto.
(d) The Master Servicer covenants that by September 30, 1999, any
custom-made software or hardware designed or purchased or licensed by the Master
Servicer and used by the Master Servicer in the course of the operation or
management of, or the compiling, reporting or generation of data required by
this Agreement will not contain any material deficiency (x) in the ability of
such software or hardware to identify correctly or perform calculations or other
processing with respect to dates after September 30, 1999 or (y) that would
cause such software or hardware to be fit no longer for the purpose for which it
was intended by reason of the changing of the date from 1999 to 2000. The
foregoing matters extend and relate only to the internal functioning of the
software and hardware maintained by the Master Servicer, and the Master Servicer
shall not be responsible for the accuracy or integrity of any data or
calculations provided to the Master Servicer by any third party. A breach of the
covenant set forth in this Section 2.04(d) shall constitute an Event of Default
pursuant to Section 7.01(a)(viii) and such Event of Default shall be subject to
the remedies set forth in Article VII.
(e) The Special Servicer covenants that by September 30, 1999, any
custom-made software or hardware designed or purchased or licensed by the
Special Servicer and used by the Special Servicer in the course of the operation
or management of, or the compiling, reporting or generation of data required by
this Agreement will not contain any material deficiency (x) in the ability of
such software or hardware to identify correctly or perform calculations or other
processing with respect to dates after September 30, 1999 or (y) that would
cause such software or hardware to be fit no longer for the purpose for which it
was intended by reason of the changing of the date from 1999 to 2000. The
foregoing matters extend and relate only to the internal functioning of the
software and hardware maintained by the Special Servicer, and the Special
Servicer shall not be responsible for the accuracy or integrity of any data or
calculations provided to the Special Servicer by any third party. A breach of
the covenant set forth in this Section 2.04(e) shall constitute an Event of
Default pursuant to Section 7.01(b)(vii) and such Event of Default shall be
subject to the remedies set forth in Article VII.
SECTION 2.05. Execution and Delivery of Certificates; Issuance of
Lower-Tier Regular Interests.
The Trustee acknowledges the assignment to it of the Mortgage Loans and the
delivery of the Mortgage Files to the Custodian (to the extent the documents
constituting the Mortgage Files are actually delivered to the Custodian),
subject to the provisions of Section 2.01 and Section 2.02 and, concurrently
with such delivery, (i) the Trustee acknowledges the issuance of the Lower-Tier
Regular Interests to the Depositor and the execution, authentication, and
delivery of the Class LR Certificates to or upon the order of the Depositor,
evidencing ownership of the entire Lower-Tier REMIC, in exchange for the
Mortgage Loans (other than the Deferred Interest and the Default Interest),
receipt of which is hereby acknowledged, (ii) the Depositor hereby conveys all
rights, title and interest in and to the Lower-Tier Regular Interests to the
Trustee, in trust, and (iii) the Trustee acknowledges that it has executed and
caused to be authenticated and delivered to and upon the order of the Depositor,
(A) in exchange for the Lower-Tier Regular Interests and the Deferred Interest,
the Regular Certificates and the Class R Certificates and (B) in exchange for
the Default Interest, the Class Q Certificates, in authorized denominations,
registered in the names set forth in such order and duly authenticated by the
Trustee evidencing ownership of the Upper-Tier REMIC and the undivided interests
in the Grantor Trust set forth in Section 2.06(b).
SECTION 2.06. Miscellaneous REMIC and Grantor Trust Provisions.
(a) The Class LA-1, Class LA-2, Class LB, Class LC, Class LD, Class LE and
Class LF Interests are hereby designated as "regular interests" in the
Lower-Tier REMIC within the meaning of Section 860G(a)(1) of the Code, and the
Class LR Certificates are hereby designated as the sole class of "residual
interests" in the Lower-Tier REMIC within the meaning of Section 860G(a)(2) of
the Code. The Class A-1, Class A-2, Class X, Class B, Class C, Class D, Class E
and Class F Certificates are hereby designated as representing beneficial
interests in "regular interests" in the Upper-Tier REMIC within the meaning of
Section 860G(a)(1) of the Code and the Class R Certificates are hereby
designated as the sole class of "residual interests" in the Upper-Tier REMIC
within the meaning of Section 860G(a)(2) of the Code. The Closing Date is hereby
designated as the "Startup Day" of the Lower-Tier REMIC and the Upper-Tier REMIC
within the meaning of Section 860G(a)(9) of the Code. The "latest possible
maturity date" of the Lower-Tier Regular Interests and the Regular Certificates
for purposes of Section 860G(a)(1) of the Code is the Scheduled Final
Distribution Date.
(b) The Class Q Certificates represent pro rata undivided beneficial
interests in the Default Interest (subject to the obligation of the Trust Fund
to pay the Advance Interest Amounts), proceeds therefrom and the Class Q
Distribution Account. The Class B, Class C, Class D, Class E and Class F
Certificates represent pro rata undivided beneficial interests in any Deferred
Interest with respect to the Mortgage Loans and related portions of the Deferred
Interest Distribution Account, in the proportions specified in Section 4.01(e).
The Class Q Certificates do not represent regular or residual interests in
either the Upper-Tier REMIC or the Lower-Tier REMIC.
(c) None of the Depositor, the Trustee, the Master Servicer or the Special
Servicer shall enter into any arrangement by which the Trust Fund will receive a
fee or other compensation for services other than as specifically contemplated
herein.
<PAGE>
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.01. Master Servicer to Act as Master Servicer; Administration
of the Mortgage Loans.
(a) The Master Servicer and the Special Servicer, each as an independent
contractor, shall service and administer the Mortgage Loans on behalf of the
Trust Fund and the Trustee (as trustee for Certificateholders) in accordance
with the Servicing Standard. To the extent consistent with the foregoing and
subject to any express limitations set forth in this Agreement, the Master
Servicer and Special Servicer shall seek to maximize the timely and complete
recovery of principal and interest on the Mortgage Loans. Subject only to the
Servicing Standard, the Master Servicer and Special Servicer shall have full
power and authority, acting alone or through sub-servicers (subject to paragraph
(c) of this Section 3.01 and to Section 3.02), to do or cause to be done any and
all things in connection with such servicing and administration which it may
deem consistent with the Servicing Standard and, in its reasonable judgment, in
the best interests of the Certificateholders, including, without limitation,
with respect to each Mortgage Loan, to prepare, execute and deliver, on behalf
of the Certificateholders and the Trustee or any of them: (i) any and all
financing statements, continuation statements and other documents or instruments
necessary to maintain the lien on each Mortgaged Property and related
collateral; (ii) any modifications, waivers, consents or amendments to or with
respect to any documents contained in the related Mortgage File; and (iii) any
and all instruments of satisfaction or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with respect to the
Mortgage Loans and the Mortgaged Properties. Notwithstanding the foregoing,
neither the Master Servicer nor the Special Servicer shall modify, amend, waive
or otherwise consent to any change of the terms of any Mortgage Loan except
under the circumstances described in Sections 3.09, 3.10, 3.25 and 3.26 or the
definition of Extended Monthly Payment hereof. The Master Servicer and Special
Servicer shall service and administer the Mortgage Loans in accordance with
applicable law and shall provide to the Borrowers any reports required to be
provided to them thereby. Subject to Section 3.11, the Trustee shall, upon the
receipt of a written request of a Servicing Officer, execute and deliver to the
Master Servicer and Special Servicer any powers of attorney and other documents
prepared by the Master Servicer and Special Servicer and necessary or
appropriate (as certified in such written request) to enable the Master Servicer
and Special Servicer to carry out their servicing and administrative duties
hereunder. Each of the Master Servicer and the Special Servicer shall indemnify
the Trustee for any and all costs, liabilities and expenses incurred by the
Trustee in connection with the negligent or willful misuse of such powers of
attorney by the Master Servicer or the Special Servicer, as applicable.
(b) Unless otherwise provided in the related Loan Documents, the Master
Servicer shall apply any partial Principal Prepayment received on a Mortgage
Loan on a date other than a Due Date to the principal balance of such Mortgage
Loan as of the Due Date immediately following the date of receipt of such
partial Principal Prepayment. Unless otherwise provided in the related Loan
Documents, the Master Servicer shall apply any amounts received on U.S. Treasury
obligations (which shall not be redeemed by the Master Servicer prior to the
maturity thereof) in respect of a Mortgage Loan being defeased pursuant to its
terms to the principal balance of and interest on such Mortgage Loan as of the
Due Date immediately following the receipt of such amounts.
(c) Each of the Master Servicer and the Special Servicer may enter into
sub-servicing agreements (each a "Sub-servicing Agreement") with third parties
with respect to any of its respective obligations hereunder, provided that (i)
any such agreement shall be consistent with the provisions of this Agreement,
(ii) no sub-servicer retained by the Master Servicer or the Special Servicer, as
applicable, shall grant any modification, waiver or amendment to any Mortgage
Loan or foreclose on any Mortgage Loan or sell any Mortgage Loan or REO Property
without the approval of the Master Servicer or the Special Servicer, as
applicable, which approval shall be given or withheld in accordance with the
procedures set forth in Sections 3.09, 3.10, 3.25, 3.26, or the definition of
Extended Monthly Payment and (iii) such agreement shall be consistent with the
Servicing Standard. Any such sub-servicing agreement may permit the sub-servicer
to delegate its duties to agents or subcontractors so long as the related
agreements or arrangements with such agents or subcontractors are consistent
with the provisions of this Section 3.01(c). Any sub-servicing agreement entered
into by the Master Servicer or the Special Servicer, as applicable, shall
provide that it may be assumed or terminated by the Trustee, if the Trustee has
assumed the duties of the Master Servicer or the Special Servicer, or by any
successor Master Servicer or Special Servicer, as applicable, without cost or
obligation to the assuming or terminating party or the Trust Fund, upon the
assumption by such party of the obligations of the Master Servicer or the
Special Servicer, as applicable, pursuant to Section 7.02.
Any sub-servicing agreement, and any other transactions or services
relating to the Mortgage Loans involving a sub-servicer, shall be deemed to be
between the Master Servicer or the Special Servicer, as the case may be, and
such sub-servicer alone, and the Trustee, the Trust Fund and the
Certificateholders shall not be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to the sub-servicer,
except as set forth in Section 3.01(d) and no provision herein may be construed
so as to require the Trust Fund to indemnify any such sub-servicer.
(d) If the Trustee or any successor Master Servicer assumes the obligations
of the Master Servicer, or if the Trustee or any successor Special Servicer
assumes the obligations of the Special Servicer, in each case in accordance with
Section 7.02, the Trustee or such successor, as applicable, to the extent
necessary to permit the Trustee or such successor, as applicable, to carry out
the provisions of Section 7.02, shall, without act or deed on the part of the
Trustee or such successor, as applicable, succeed to all of the rights and
obligations of the Master Servicer or the Special Servicer, as applicable, under
any sub-servicing agreement entered into by the Master Servicer or the Special
Servicer, as applicable, pursuant to Section 3.01(c), subject to the right of
termination by the Trustee set forth in Section 3.01(c). In such event, the
Trustee or the successor Master Servicer or the successor Special Servicer, as
applicable, shall be deemed to have assumed all of the Master Servicer's or the
Special Servicer's interest, as applicable, therein (but not any liabilities or
obligations in respect of acts or omissions of the Master Servicer or the
Special Servicer, as applicable, prior to such deemed assumption) and to have
replaced the Master Servicer or the Special Servicer, as applicable, as a party
to such sub-servicing agreement to the same extent as if such sub-servicing
agreement had been assigned to the Trustee or such successor Master Servicer or
successor Special Servicer, as applicable, except that the Master Servicer or
Special Servicer, as applicable, shall not thereby be relieved of any liability
or obligations under such sub-servicing agreement that accrued prior to the
succession of the Trustee or the successor Master Servicer or successor Special
Servicer, as applicable.
In the event that the Trustee or any successor Master Servicer or successor
Special Servicer, as applicable, assumes the servicing obligations of the Master
Servicer or the Special Servicer, as applicable, upon request of the Trustee, or
such successor Master Servicer or Special Servicer, as applicable, the Master
Servicer or Special Servicer shall at its own expense deliver to the Trustee or
such successor Master Servicer or Special Servicer, as applicable, all documents
and records relating to any sub-servicing agreement and the Mortgage Loans then
being serviced thereunder and an accounting of amounts collected and held by it,
if any, and will otherwise use its best efforts to effect the orderly and
efficient transfer of any sub-servicing agreement to the Trustee or the
successor Master Servicer or Special Servicer, as applicable.
SECTION 3.02. Liability of the Master Servicer and Special Servicer.
Notwithstanding any sub-servicing agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Master Servicer or
Special Servicer and any Person acting as sub-servicer (or its agents or
subcontractors) or any reference to actions taken through any Person acting as
sub-servicer or otherwise, the Master Servicer or Special Servicer, as
applicable, shall remain obligated and primarily liable for the servicing and
administering of the Mortgage Loans in accordance with the provisions of this
Agreement without diminution of such obligation or liability by virtue of such
sub-servicing agreements or arrangements or by virtue of indemnification from
any Person acting as sub-servicer (or its agents or subcontractors) to the same
extent and under the same terms and conditions as if the Master Servicer or
Special Servicer, as applicable, alone were servicing and administering the
Mortgage Loans. Each of the Master Servicer and the Special Servicer shall be
entitled to enter into an agreement with any sub-servicer providing for
indemnification of the Master Servicer or Special Servicer, as applicable, by
such sub-servicer, and nothing contained in this Agreement shall be deemed to
limit or modify such indemnification, but no such agreement for indemnification
shall be deemed to limit or modify this Agreement.
SECTION 3.03. Collection of Certain Mortgage Loan Payments.
(a) The Master Servicer or the Special Servicer, as applicable, shall use
its reasonable best efforts, consistent with the Servicing Standard, to collect
all payments called for under the terms and provisions of the Mortgage Loans it
is obligated to service hereunder, and shall follow the Servicing Standard with
respect to such collection procedures. The Master Servicer or the Special
Servicer, as applicable, shall use its reasonable best efforts, consistent with
the Servicing Standard, to collect income statements, rent rolls and other
reporting information from Borrowers as required by the related Loan Documents
and the terms hereof. Consistent with the foregoing, the Master Servicer or
Special Servicer, as applicable, may in its discretion waive any late payment
charge in connection with any delinquent Monthly Payment with respect to any
Mortgage Loan. In addition, the Master Servicer or the Special Servicer, as
applicable, shall be entitled to take such actions with respect to the
collection of payments on the Mortgage Loans as are permitted or required under
Section 3.25 hereof.
(b) In the event that the Master Servicer or Special Servicer receives, or
receives notice from the related Borrower that it will be receiving, Deferred
Interest in any Collection Period, the Master Servicer or Special Servicer, as
applicable, will promptly notify the Trustee in writing.
SECTION 3.04. Collection of Taxes, Assessments and Similar Items;
Escrow Accounts.
(a) With respect to each Mortgage Loan (other than any REO Mortgage Loan),
the Master Servicer shall maintain accurate records with respect to each related
Mortgaged Property reflecting the status of taxes, assessments, ground rents and
other similar items that are or may become a lien on the related Mortgaged
Property and the status of insurance premiums payable with respect thereto. From
time to time, the Master Servicer shall (i) use its reasonable best efforts,
consistent with the Servicing Standard, to obtain all bills for the payment of
such items (including renewal premiums), and (ii) subject to Section 3.08 with
respect to the payment of insurance premiums, effect payment of all such bills
with respect to such Mortgaged Properties prior to the applicable penalty or
termination date, in each case employing for such purpose Escrow Payments as
allowed under the terms of the related Mortgage Loan. If a Borrower fails to
make any such payment on a timely basis or collections from the Borrower are
insufficient to pay any such item before the applicable penalty or termination
date, the Master Servicer shall advance the amount of any shortfall as a
Property Advance unless the Master Servicer determines in its good faith
business judgment that such Advance would be a Nonrecoverable Advance; provided,
however, that with respect to the payment of taxes and assessments, in the event
that the Master Servicer reasonably anticipates that such bill will be paid by
the related Borrower prior to the close of business on such penalty or
termination date, the Master Servicer may delay payment of such tax or
assessment until the earlier of (i) five Business Days after the Master Servicer
has determined that such bill has not been paid by the related Borrower prior to
the close of business on such penalty or termination date and (ii) forty-five
(45) days past such penalty or termination date; provided that during such
forty-five day period the Master Servicer shall use its best efforts to
determine whether the related Borrower has paid such tax or assessment prior to
the close of business on such penalty or termination date. The Master Servicer
shall be entitled to reimbursement of Advances, with interest thereon at the
Advance Rate, that it makes pursuant to the preceding sentence from amounts
received on or in respect of the related Mortgage Loan respecting which such
Advance was made or if such Advance has become a Nonrecoverable Advance, to the
extent permitted by Section 3.06 of this Agreement. No costs incurred by the
Master Servicer in effecting the payment of taxes and assessments on the
Mortgaged Properties shall, for the purpose of calculating distributions to
Certificateholders, be added to the amount owing under the related Mortgage
Loans, notwithstanding that the terms of such Mortgage Loans so permit.
(b) The Master Servicer shall segregate and hold all funds collected and
received pursuant to any Mortgage Loan constituting Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one or more segregated custodial accounts (each, an "Escrow Account")
into which all Escrow Payments shall be deposited within one Business Day after
receipt. The Master Servicer shall also deposit into each applicable Escrow
Account any amounts representing losses on Permitted Investments pursuant to
Section 3.07(b) and any Insurance Proceeds or Liquidation Proceeds which are
required to be applied to the restoration or repair of any Mortgaged Property
pursuant to the related Mortgage Loan. Escrow Accounts shall be Eligible
Accounts (except to the extent the related Mortgage Loan requires or permits it
to be held in an account that is not an Eligible Account) and shall be entitled,
"Midland Loan Services, Inc., as Master Servicer, in trust for Norwest Bank
Minnesota, National Association, as Trustee in trust for Holders of Morgan
Stanley Capital I Inc., Commercial Mortgage Pass-Through Certificates, Series
1998-XL2 and Various Borrowers". Withdrawals from an Escrow Account may be made
by the Master Servicer only:
(i) to effect timely payments of items for which Escrow Payments have
been made in accordance with the related Loan Documents and in
accordance with the terms of the related Mortgage Loan;
(ii) to transfer funds to the Collection Account to reimburse the
Master Servicer, the Special Servicer or the Trustee, as
applicable, for any Advance (with interest thereon at the Advance
Rate) relating to Escrow Payments, but only from amounts received
with respect to the related Mortgage Loan which represent late
collections of Escrow Payments thereunder;
(iii)for application to the restoration or repair of the related
Mortgaged Property in accordance with the related Mortgage Loan
and the Servicing Standard;
(iv) to clear and terminate such Escrow Account upon the termination
of this Agreement;
(v) to pay from time to time to the related Borrower (A) any interest
or investment income earned on funds deposited in the Escrow
Account if such income is required to be paid to the related
Borrower under law or by the terms of the Mortgage Loan, or
otherwise to the Master Servicer and (B) any other funds required
to be released to the related Borrowers pursuant to the related
Loan Documents; and
(vi) to remove any funds deposited in an Escrow Account that were not
required to be deposited therein.
SECTION 3.05. Collection Account; Upper-Tier Distribution Account;
Lower-Tier Distribution Account; Class Q Distribution
Account; and Deferred Interest Distribution Account .
(a) The Master Servicer shall establish and maintain the Collection Account
in the Trustee's name, for the benefit of the Certificateholders and the Trustee
as the Holder of the Lower-Tier Regular Interests. The Collection Account shall
be established and maintained as an Eligible Account. The Master Servicer shall
deposit or cause to be deposited in the Collection Account within one Business
Day following receipt the following payments and collections received or made by
it on or with respect to the Mortgage Loans:
(i) all payments on account of principal on the Mortgage Loans,
including the principal component of Unscheduled Payments;
(ii) all payments on account of interest on the Mortgage Loans and the
interest portion of all Unscheduled Payments;
(iii) all Prepayment Premiums;
(iv) any amounts required to be deposited pursuant to Section 3.07(b)
in connection with net losses realized on Permitted Investments
with respect to funds held in the Collection Account;
(v) all Net REO Proceeds withdrawn from an REO Account pursuant to
Section 3.17(b) and all Net Insurance Proceeds and Net
Liquidation Proceeds;
(vi) any amounts received from Borrowers which represent recoveries of
Property Protection Expenses, to the extent not permitted to be
retained by the Master Servicer as provided herein; and
(vii)any other amounts required by the provisions of this Agreement
to be deposited into the Collection Account by the Master
Servicer or Special Servicer, including, without limitation,
proceeds of any repurchase of a Mortgage Loan pursuant to Section
2.03(c) hereof.
The foregoing requirements for deposits in the Collection Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges (subject to
Section 3.12 hereof), Assumption Fees, modification fees, loan service
transaction fees, extension fees, demand fees, beneficiary statement charges and
similar fees need not be deposited in the Collection Account by the Master
Servicer and, to the extent permitted by applicable law, the Master Servicer and
Special Servicer shall be entitled to retain the portion of any such charges and
fees received with respect to the Mortgage Loans to the extent to which it is
entitled pursuant to Section 3.12. In the event that 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. The Master Servicer shall
give written notice to the Trustee of the location and account number of the
Collection Account and shall notify the Trustee in writing of any subsequent
change thereof.
(b) The Trustee shall establish and maintain (i) the Lower-Tier
Distribution Account in the name of the Trustee, in trust for the benefit of the
Certificateholders and the Trustee as the Holder of the Lower-Tier Regular
Interests; and (ii) the Upper-Tier Distribution Account in the name of the
Trustee, in trust for the benefit of the Certificateholders. The Lower-Tier
Distribution Account and Upper-Tier Distribution Account shall be established
and maintained as Eligible Accounts. With respect to each Distribution Date, on
or before such date the Trustee shall make the withdrawals from the Lower-Tier
Distribution Account, as set forth in Section 4.01 hereof, shall make the
deposits into the Upper-Tier Distribution Account, as set forth in Section 4.01
hereof, and shall cause the amount of Available Funds (including P&I Advances)
and Prepayment Premiums to be distributed in respect of the Certificates,
pursuant to Section 4.01 hereof on such date.
(c) The Trustee shall establish and maintain the Class Q Distribution
Account in the name of the Trustee in trust for the benefit of the Holders of
the Class Q Certificates. The Class Q Distribution Account shall be established
and maintained as an Eligible Account. On or before the Master Servicer
Remittance Date related to each Distribution Date, the Master Servicer shall
remit to the Trustee for deposit in the Class Q Distribution Account an amount
equal to (i) the amount of the aggregate Default Interest received during the
preceding Collection Period, minus (ii) any portions thereof withdrawn from the
Collection Account pursuant to clause (ii) of Section 3.06 or otherwise applied
to pay the Advance Interest Amount in respect of Advances (such amount, if any,
the "Net Default Interest" for such Distribution Date).
(d) Prior to the Master Servicer Remittance Date relating to the Collection
Period, if any, in which Deferred Interest is received, the Trustee shall
establish and maintain the Deferred Interest Distribution Account in the name of
the Trustee in trust for the benefit of the Certificateholders as set forth in
Section 2.06(b). The Deferred Interest Distribution Account shall be established
and maintained as an Eligible Account. On or before the Master Servicer
Remittance Date related to the applicable Distribution Date, the Master Servicer
shall remit to the Trustee for deposit in the Deferred Interest Distribution
Account an amount equal to the Deferred Interest received during the applicable
Collection Period.
Following the distribution of Deferred Interest to Certificateholders on
the first Distribution Date after which there are no longer any Mortgage Loans
outstanding which pursuant to their terms could pay Deferred Interest, the
Trustee shall terminate the Deferred Interest Distribution Account.
(e) The Trustee will establish and maintain an Interest Reserve Account in
the name of the Trustee in trust for the benefit of the Certificateholders. The
Interest Reserve Account shall be established and maintained as an Eligible
Account, and shall be administered in accordance with Section 3.27 herein.
(f) Funds in the Collection Account may be invested only in Permitted
Investments in accordance with the provisions of Section 3.07.
SECTION 3.06. Permitted Withdrawals from the Collection Account.
The Master Servicer may make withdrawals from the Collection Account only
as described below (the order set forth below not constituting an order of
priority for such withdrawals):
(i) to remit to the Trustee for deposit in the Lower-Tier
Distribution Account, the Class Q Distribution Account, the
Interest Reserve Account and the Deferred Interest Distribution
Account, the amounts required to be deposited in the Lower-Tier
Distribution Account, the Class Q Distribution Account, the
Interest Reserve Account and the Deferred Interest Distribution
Account pursuant to Sections 4.01(a), 3.05(c), 3.27(a) and
3.05(d), respectively;
(ii) to pay or reimburse the Master Servicer, the Special Servicer or
the Trustee for Advances and any related Advance Interest Amounts
to the extent not paid from Default Interest (provided that the
Trustee shall have priority with respect to such payment or
reimbursement), the Master Servicer's right to reimburse any such
Person pursuant to this clause (ii) being limited to (x) any
collections on or in respect of the particular Mortgage Loan or
REO Property respecting which such Advance was made, or (y) any
other amounts in the Collection Account in the event that such
Advances have been deemed to be Nonrecoverable Advances or are
not recovered from such recoveries in respect of the related
Mortgage Loan or REO Property after a Final Recovery
Determination;
(iii)to pay on or before each Master Servicer Remittance Date to the
Master Servicer and the Special Servicer, as applicable, as
compensation, the aggregate unpaid Servicing Fee and Special
Servicing Compensation (if any), respectively, in respect of the
immediately preceding Interest Accrual Period, to be paid, in the
case of the Servicing Fee, from interest received on the related
Mortgage Loan, and to pay from time to time to the Master
Servicer in accordance with Section 3.07(b) any interest or
investment income earned on funds deposited in the Collection
Account;
(iv) to pay on or before each Distribution Date to the Depositor, MSMC
or any other applicable Person as the case may be, with respect
to each Mortgage Loan or REO Property that has previously been
purchased or repurchased by it pursuant to Section 2.03(c),
Section 3.18 or Section 9.01, all amounts received thereon during
the related Collection Period and subsequent to the date as of
which the amount required to effect such purchase or repurchase
was determined;
(v) to the extent not reimbursed or paid pursuant to any other clause
of this Section 3.06, to reimburse or pay the Master Servicer,
the Trustee, the Special Servicer or the Depositor, as
applicable, for unpaid Servicing Fees, Special Servicing
Compensation and other unpaid items incurred by such Person
pursuant to the second sentence of Section 3.07(c), Section
3.08(a) and (b), Section 3.10, Section 3.12(e), Section 3.17(a),
Section 3.18(b), Section 6.03, Section 7.04, Sections 8.05(a),
(b) and (d) or Section 10.07, or any other provision of this
Agreement pursuant to which such Person is entitled to
reimbursement or payment from the Trust Fund, in each case only
to the extent expressly reimbursable under such Section, it being
acknowledged that this clause (v) shall not be deemed to modify
the substance of any such Section, including the provisions of
such Section that set forth the extent to which one of the
foregoing Persons is or is not entitled to payment or
reimbursement;
(vi) to transfer to the Trustee for deposit in one or more separate,
non-interest bearing accounts any amount reasonably determined by
the Trustee to be necessary to pay any applicable federal, state
or local taxes imposed on the Upper-Tier REMIC or the Lower-Tier
REMIC under the circumstances and to the extent described in
Section 4.05;
(vii)to withdraw any amount deposited into the Collection Account
that was not required to be deposited therein;
(viii) with respect to the first Interest Accrual Period, to withdraw
an amount equal to the Servicing Fee for the period commencing on
the Cut-Off Date and ending on the day immediately prior to the
Closing Date, and to remit such amount to the Depositor; and
(ix) to clear and terminate the Collection Account pursuant to Section
9.01.
The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account pursuant to subclauses (ii)-(v) above.
The Master Servicer shall pay to the Trustee or the Special Servicer from
the Collection Account amounts permitted to be paid to the Trustee or the
Special Servicer therefrom as set forth above, promptly upon receipt of a
certificate of a Responsible Officer of the Trustee or a certificate of a
Servicing Officer, as applicable, describing the item and amount to which such
Person is entitled; provided that in no event shall such a certificate be
required in connection with the payment to the Trustee of the Trustee Fee. The
Master Servicer may conclusively rely on any such certificate and shall have no
duty to recalculate the amounts stated therein. In addition, the Master Servicer
shall promptly, upon receipt, pay the Depositor the amounts permitted to be paid
to the Depositor pursuant to clause (viii) above.
The Trustee, the Special Servicer and the Master Servicer shall in all
cases have a right prior to the Certificateholders to any funds on deposit in
the Collection Account from time to time for the reimbursement or payment of the
Servicing Fees (including investment income), or Trustee Fees, Special Servicing
Compensation, Advances, Advance Interest Amounts and their respective expenses
hereunder to the extent such fees and expenses are to be reimbursed or paid from
amounts on deposit in the Collection Account pursuant to this Agreement (and to
have such amounts paid directly to third party contractors for any invoices
approved by the Trustee, the Master Servicer or the Special Servicer, as
applicable).
The Trustee shall, upon receipt, deposit in the Lower-Tier Distribution
Account, the Class Q Distribution Account and the Deferred Interest Distribution
Account any and all amounts received by the Trustee in accordance with Section
3.06(i). If, as of 3:00 p.m., New York City time, on any Master Servicer
Remittance Date or on such other date as any amount referred to in the foregoing
clause (i) is required to be delivered hereunder, the Master Servicer shall not
have delivered to the Trustee for deposit in the Lower-Tier Distribution
Account, the Class Q Distribution Account or the Deferred Interest Distribution
Account the amounts required to be deposited therein pursuant to Section
3.06(i), then the Trustee shall, to the extent that a Responsible Officer of the
Trustee has such knowledge, provide notice of such failure to the Master
Servicer by facsimile transmission sent to telecopy no. (816) 435-2326 (or such
alternative number provided by the Master Servicer to the Trustee in writing)
and by telephone at telephone no. (816) 435-5000 (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.
SECTION 3.07. Investment of Funds in the Collection Account, the
Interest Reserve Account, the REO Account, the
Borrower Accounts, and Other Accounts.
(a) The Master Servicer (or with respect to any REO Account, the Special
Servicer) may direct any depository institution (such direction may be a
standing direction until otherwise revoked) maintaining the Collection Account
and any Borrower Accounts (subject to the second succeeding sentence) and any
REO Account (each, for purposes of this Section 3.07, an "Investment Account"),
to invest the funds in such Investment Account in one or more Permitted
Investments that bear interest or are sold at a discount, and that mature,
unless payable on demand, no later than the Business Day preceding the date on
which such funds are required to be withdrawn from such Investment Account
pursuant to this Agreement, provided that any funds in the Interest Reserve
Account shall be invested in the Norwest Fund, as long as such fund is a
Permitted Investment. Any direction by the Master Servicer or the Special
Servicer to invest funds on deposit in an Investment Account shall be in writing
and shall certify that the requested investment is a Permitted Investment which
matures at or prior to the time required hereby or is payable on demand. In the
case of any Escrow Account, Lock-Box Account, Cash Collateral Account or Reserve
Account (the "Borrower Accounts"), the Master Servicer shall act upon the
written request of the related Borrower or Manager to the extent the Master
Servicer is required to do so under the terms of the respective Mortgage Loan or
related documents, provided that in the absence of appropriate written
instructions from the related Borrower or Manager meeting the requirements of
this Section 3.07, the Master Servicer shall have no obligation to, but will be
entitled to, direct the investment of funds in such accounts in Permitted
Investments. All such Permitted Investments shall be held to maturity, unless
payable on demand. Any investment of funds in an Investment Account shall be
made in the name of the Trustee (in its capacity as such) or in the name of a
nominee of the Trustee. The Trustee shall have sole control (except with respect
to investment direction which shall be in the control of the Master Servicer, or
the Special Servicer, with respect to any REO Accounts, as an independent
contractor to the Trust Fund) over each such investment and any certificate or
other instrument evidencing any such investment shall be delivered directly to
the Trustee or its agent (which shall initially be the Master Servicer),
together with any document of transfer, if any, necessary to transfer title to
such investment to the Trustee or its nominee. The Trustee shall have no
responsibility or liability with respect to the investment directions of the
Master Servicer or the Special Servicer, any Borrower or Manager or any losses
resulting therefrom, whether from Permitted Investments or otherwise. In the
event amounts on deposit in an Investment Account are at any time invested in a
Permitted Investment payable on demand, the Master Servicer (or the Special
Servicer), shall: (x) consistent with any notice required to be given
thereunder, demand that payment thereon be made on the last day such Permitted
Investment may otherwise mature hereunder in an amount equal to the lesser of
(1) all amounts then payable thereunder and (2) the amount required to be
withdrawn on such date; and (y) demand payment of all amounts due thereunder
promptly upon determination by the Master Servicer (or the Special Servicer)
that such Permitted Investment would not constitute a Permitted Investment in
respect of funds thereafter on deposit in the related Investment Account.
(b) All income and gain realized from investment of funds deposited in any
Investment Account shall be for the benefit of the Master Servicer (except with
respect to the investment of funds deposited in (i) any Borrower Account, which
shall be for the benefit of the related Borrower to the extent required under
the Mortgage Loan or applicable law or (ii) any REO Account, which shall be for
the benefit of the Special Servicer or (iii) the Interest Reserve Account, which
shall be for the benefit of MSMC), and, if held in the Collection Account or REO
Account shall be subject to withdrawal by the Master Servicer or the Special
Servicer, as applicable, in accordance with Section 3.06 or Section 3.17(b), as
applicable. The Master Servicer (or with respect to any REO Account, the Special
Servicer, or with respect to the Interest Reserve Account, MSMC) shall deposit
from its own funds into any applicable Investment Account, the amount of any
loss incurred in respect of any such Permitted Investment immediately upon
realization of such loss; provided, however, that the Master Servicer or Special
Servicer, as applicable, may reduce the amount of such payment to the extent it
foregoes any investment income in such Investment Account otherwise payable to
it. The Master Servicer shall also deposit from its own funds in any Borrower
Account the amount of any loss incurred in respect of Permitted Investments,
except to the extent that amounts are invested for the benefit of the Borrower
under the terms of the Mortgage Loan or applicable law.
All amounts on deposit in the Lower-Tier Distribution Account, the
Upper-Tier Distribution Account, the Class Q Distribution Account and the
Deferred Interest Distribution Account shall be held uninvested.
(c) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment, or
if a default occurs in any other performance required under any Permitted
Investment, the Trustee shall take such action as may be appropriate to enforce
such payment or performance, including the institution and prosecution of
appropriate proceedings. In the event the Trustee takes any such action, the
Trust Fund shall pay or reimburse the Trustee for all reasonable out-of-pocket
expenses, disbursements and advances incurred or made by the Trustee in
connection therewith; provided, however, that the Trustee shall use its best
efforts to recover any such amounts from the Person responsible for such costs.
In the event that the Trustee does not take any such action, the Master Servicer
may, but is not obligated to, take such action at its own cost and expense.
SECTION 3.08. Maintenance of Insurance Policies and Errors and
Omissions and Fidelity Coverage.
(a) The Master Servicer on behalf of the Trustee, as mortgagee, shall use
its reasonable best efforts, consistent with the Servicing Standard, to cause
the related Borrower to maintain, to the extent required by each Mortgage Loan
(other than REO Mortgage Loans), and if the Borrower does not so maintain, shall
itself maintain (subject to the provisions of this Agreement concerning
Nonrecoverable Advances and to the extent the Trustee as mortgagee has an
insurable interest and to the extent available at commercially reasonable
rates), (i) fire and hazard insurance (and hurricane insurance, if applicable)
with extended coverage on the related Mortgaged Property in an amount which is
at least equal to the lesser of (A) one hundred percent (100%) of the then "full
replacement cost" of the improvements and equipment, (excluding foundations,
footings and excavation costs), without deduction for physical depreciation, and
(B) the outstanding principal balance of the related Mortgage Loan or such
greater amount as is necessary to prevent any reduction in such policy by reason
of the application of co-insurance provisions and to prevent the Trustee
thereunder from being deemed to be a co-insurer and provided such policy shall
include a "replacement cost" rider, (ii) insurance providing coverage against 18
months (or such longer period or with such extended period endorsement as
provided in the related Mortgage or other Loan Document or, if the Mortgage Loan
expressly permits a shorter period, such shorter period) of rent interruptions
and (iii) such other insurance as is required in the related Mortgage Loan. The
Special Servicer shall maintain fire and hazard insurance with extended coverage
on each REO Property (subject to the provisions of this Agreement concerning
Nonrecoverable Advances) in an amount which is at least equal to one hundred
percent (100%) of the then "full replacement cost" of the improvements and
equipment (excluding foundations, footings and excavation costs), without
deduction for physical depreciation. If the Special Servicer does not maintain
the insurance described in the preceding sentence or the required flood
insurance described below, the Master Servicer shall, as soon as practicable
after receipt of notice of such failure, maintain such insurance, and if the
Master Servicer does not maintain such insurance, the insurance required in the
first sentence of this Section 3.08(a) or the required flood insurance described
below (if the related Borrower fails to maintain such insurance), the Trustee
shall, as soon as practicable after receipt of notice of such failure, maintain
such insurance, provided that such obligations of the Special Servicer, Master
Servicer and Trustee will be subject to the provisions of this Agreement
concerning Nonrecoverable Advances and to the availability of such insurance at
commercially reasonable rates. The Special Servicer shall maintain, with respect
to each REO Property to the extent available at commercially reasonable rates
(i) public liability insurance providing such coverage against such risks as the
Special Servicer determines, consistent with the related Loan Documents and the
Servicing Standard, to be in the best interests of the Trust Fund, (ii)
insurance providing coverage against 18 months (or such longer period of time as
is consistent with the Loan Documents and the Servicing Standard) of rent
interruptions and (iii) such other insurance as was required pursuant to the
terms of the related Mortgage Loan. All insurance for an REO Property shall be
from a Qualified Insurer. Any amounts collected by the Master Servicer or the
Special Servicer under any such policies (other than amounts required to be
applied to the restoration or repair of the related Mortgaged Property or
amounts to be released to the Borrower in accordance with the terms of the
related Loan Documents) shall be deposited into the Collection Account pursuant
to Section 3.05, subject to withdrawal pursuant to Section 3.06. Any cost
incurred by the Master Servicer or the Special Servicer in maintaining any such
insurance shall not, for the purpose of calculating distributions to
Certificateholders, be added to the unpaid principal balance of the related
Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.
It is understood and agreed that no other additional insurance other than flood
insurance or earthquake insurance subject to the conditions set forth below is
to be required of any Borrower or to be maintained by the Master Servicer other
than pursuant to the terms of the related Loan Documents and pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. If the Mortgaged Property (other than an REO
Property) is located in a federally designated special flood hazard area, the
Master Servicer will use its best efforts to cause the related Borrower to
maintain, to the extent required by each Mortgage Loan, and if the related
Borrower does not so maintain, shall itself obtain (subject to the provisions of
this Agreement concerning Nonrecoverable Advances) and maintain flood insurance
in respect thereof to the extent available at commercially reasonable rates.
Such flood insurance shall be in an amount equal to the lesser of (i) the unpaid
principal balance of the related Mortgage Loan and (ii) the maximum amount of
such insurance required by the terms of the related Mortgage Loan and as is
available for the related property under the national flood insurance program
(assuming that the area in which such property is located is participating in
such program). If a Mortgaged Property is related to a Mortgage Loan pursuant to
which earthquake insurance was in place at the time of origination and is
required to be maintained pursuant to the terms of the Mortgage Loan, the Master
Servicer shall use its reasonable best efforts to cause the related Borrower to
maintain, and if the related Borrower does not so maintain will itself obtain
(subject to the provisions of this Agreement concerning Nonrecoverable Advances
and for so long as such insurance continues to be available at commercially
reasonable rates) and maintain earthquake insurance in respect thereof, in the
amount required by the Mortgage Loan or, if not specified, in-place at
origination and with substantially the same terms and provisions as the policy
in-place at origination or, if such a policy is unavailable at commercially
reasonable rates, with terms and provisions generally acceptable to commercial
mortgage servicers of mortgage loans similar to such Mortgage Loan. If an REO
Property (i) is located in a federally designated special flood hazard area or
(ii) is related to a Mortgage Loan pursuant to which earthquake insurance was in
place on the Closing Date and continues to be available at commercially
reasonable rates, the Special Servicer will obtain (subject to the provisions of
this Agreement concerning Nonrecoverable Advances) and maintain flood insurance
and/or earthquake insurance in respect thereof providing the same coverage as
described in the preceding sentences or, with respect to earthquake insurance,
in the amount required by the Mortgage Loan or, if not specified, in-place at
origination. If at any time during the term of this Agreement a recovery under a
flood or fire and hazard insurance policy in respect of an REO Property is not
available but would have been available if such insurance were maintained
thereon in accordance with the requirements applied to Mortgaged Properties
described herein, the Special Servicer shall (subject to the provisions hereof
relating to Nonrecoverable Advances) either (i) immediately deposit into the
Collection Account from its own funds the amount that would have been recovered
(after taking into account the standard deductibles applicable to such insurance
policy) or (ii) apply to the restoration and repair of the property from its own
funds the amount that would have been recovered (after taking into account the
standard deductibles applicable to such insurance policy), if such application
would be consistent with the Servicing Standard; provided, however, that the
Special Servicer shall not be responsible for any shortfall in insurance
proceeds resulting from an insurer's refusal or inability to pay a claim. In the
case of any insurance otherwise required to be maintained pursuant to this
Section that is not being so maintained because the Master Servicer or the
Special Servicer, as applicable, has determined that it is not available at
commercially reasonable rates, the Master Servicer or the Special Servicer, as
applicable, shall deliver an Officers' Certificate to the Trustee, the Depositor
and each Rating Agency which details the steps that were taken in seeking such
insurance and the factors which led to the determination that such insurance was
not so available. Out-of-pocket expenses incurred by the Master Servicer or
Special Servicer in maintaining insurance policies pursuant to this Section 3.08
shall be paid by the Master Servicer or Special Servicer as a Property Advance
and shall be reimbursable to the Master Servicer or Special Servicer with
interest at the Advance Rate, except to the extent such expenses are paid from
the REO Account pursuant to Section 3.17(b). The Master Servicer (or the Special
Servicer, with respect to the Specially Serviced Mortgage Loans) agrees to
prepare and present, on behalf of itself, the Trustee and the
Certificateholders, claims under each related insurance policy maintained
pursuant to this Section 3.08(a) in a timely fashion in accordance with the
terms of such policy and to take such reasonable steps as are necessary to
receive payment or to permit recovery thereunder.
All insurance policies required hereunder shall name the Trustee, or the
Master Servicer or the Special Servicer on behalf of the Trustee, as the
mortgagee, as loss payee, and, unless otherwise required under the related Loan
Documents, or with respect to insurance maintained by a Borrower, otherwise
expressly permitted at the Borrower's election, shall be issued by Qualified
Insurers.
(b) (I) If the Master Servicer or the Special Servicer, as applicable,
obtains and maintains a blanket insurance policy insuring against fire and
hazard losses on all of the Mortgaged Properties (other than REO Properties) as
to which the related Borrower has not maintained insurance required by the
related Mortgage Loan or on all of the REO Properties, as the case may be, it
shall conclusively be deemed to have satisfied its respective obligations
concerning the maintenance of insurance coverage set forth in Section 3.08(a).
Any such blanket insurance policy shall be maintained with a Qualified Insurer
and provide no less coverage in scope and amount for such Mortgaged Property or
REO Property than the insurance required to be maintained pursuant to Section
3.08(a). A blanket insurance policy may contain a deductible clause, in which
case the Master Servicer or the Special Servicer, as applicable, shall, in the
event that (i) there shall not have been maintained on the related Mortgaged
Property a policy otherwise complying with the provisions of Section 3.08(a),
and (ii) there shall have been one or more losses which would have been covered
by such a policy had it been maintained, immediately deposit into the Collection
Account from its own funds the amount not otherwise payable under the blanket
policy because of such deductible clause to the extent that any such deductible
exceeds the deductible limitation that pertained to the related Mortgage Loan,
or, in the absence of any such deductible limitation, the deductible limitation
which is consistent with the Servicing Standard. In connection with its
activities as Master Servicer or the Special Servicer hereunder, as applicable,
the Master Servicer and the Special Servicer, respectively, agree to prepare and
present, on behalf of itself, the Trustee and Certificateholders, claims under
any such blanket policy which it maintains in a timely fashion in accordance
with the terms of such policy and to take such reasonable steps as are necessary
to receive payment or permit recovery thereunder.
(II) If the 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 and such policy shall be issued by a Qualified Insurer and
provide no less coverage in scope and amount for such Mortgaged Property or REO
Property than the insurance required to be maintained pursuant to Section
3.08(a), then the Master Servicer or Special Servicer shall conclusively be
deemed to have satisfied its respective obligations to maintain insurance
pursuant to Section 3.08(a). Such policy may contain a deductible clause, in
which case the Master Servicer or the Special Servicer, as applicable, shall, in
the event that (i) there shall not have been maintained on the related Mortgaged
Property or REO Property a policy otherwise complying with the provisions of
Section 3.08(a), and (ii) there shall have been one or more losses which would
have been covered by such a policy had it been maintained, immediately deposit
into the Collection Account from its own funds the amount not otherwise payable
under such policy because of such deductible to the extent that any such
deductible exceeds the deductible limitation that pertained to the related
Mortgage Loan, or, in the absence of any such deductible limitation, the
deductible limitation which is consistent with the Servicing Standard.
(c) The Master Servicer and the Special Servicer shall each maintain a
fidelity bond in the form and amount that would meet the servicing requirements
of FNMA or FHLMC, whichever is greater, with the Trustee named as
certificateholder or loss payee, as applicable thereunder. The Master Servicer
and the Special Servicer each shall be deemed to have complied with this
provision if one of its respective Affiliates has such fidelity bond coverage
and, by the terms of such fidelity bond, the coverage afforded thereunder
extends to the Master Servicer or the Special Servicer, as applicable. In
addition, the Master Servicer and the Special Servicer shall each keep in force
during the term of this Agreement a policy or policies of insurance covering
loss occasioned by the errors and omissions of its officers and employees in
connection with its obligations to service the Mortgage Loans hereunder in the
form and amount that would meet the servicing requirements of FNMA or FHLMC,
whichever is greater, with the Trustee named as certificateholder or loss payee,
as applicable thereunder. The Master Servicer and the Special Servicer shall
cause each and every sub-servicer for it to maintain, or cause to be maintained
by any agent or contractor servicing any Mortgage Loan on behalf of such
sub-servicer, a fidelity bond and an errors and omissions insurance policy which
satisfy the requirements for the fidelity bond and the errors and omissions
policy to be maintained by the Master Servicer pursuant to this Section 3.08(c).
All fidelity bonds and policies of errors and omissions insurance obtained under
this Section 3.08(c) shall be issued by a Qualified Insurer.
For so long as the long-term debt obligations of the Master Servicer or
Special Servicer, as the case may be, (or their respective direct or indirect
parent) are rated "A" (or its equivalent) or better by all of the Rating
Agencies (or such lower rating as will not result in qualification, downgrading
or withdrawal of the ratings then assigned to the Certificates, as evidenced in
writing by the Rating Agencies), such Person may self-insure with respect to the
risks described in this subsection 3.08(c).
SECTION 3.09. Enforcement of Due-On-Sale Clauses; Assumption
Agreements; Defeasance Provisions.
(a) If any Mortgage Loan contains a provision in the nature of a
"due-on-sale" clause, which by its terms:
(i) provides that such Mortgage Loan shall (or may at the mortgagee's
option) become due and payable upon the sale or other transfer of
an interest in the related Mortgaged Property or related
Borrower, or
(ii) provides that such Mortgage Loan may not be assumed without the
consent of the related mortgagee in connection with any such sale
or other transfer,
then, for so long as such Mortgage Loan is included in the Trust Fund, the
Master Servicer or Special Servicer, as applicable, on behalf of the Trust Fund
shall not be required to enforce such due-on-sale clause and in connection
therewith shall not be required to (x) accelerate payments thereon or (y)
withhold its consent to such an assumption to the extent permitted under the
terms of the related Mortgage Loan if (x) such provision is not exercisable
under applicable law or such exercise is reasonably likely to result in
meritorious legal action by the related Borrower or (y) the Master Servicer or
Special Servicer, as applicable, determines, in accordance with the Servicing
Standard, that granting such consent would be likely to result in a greater
recovery, on a present value basis (discounting at the related Mortgage Rate),
than would enforcement of such clause. If the Master Servicer or Special
Servicer, as applicable, determines that granting of such consent would likely
result in a greater recovery, the Master Servicer or Special Servicer, as
applicable, is authorized to take or enter into an assumption agreement from or
with the Person to whom the related Mortgaged Property has been or is about to
be conveyed, and to release the original Borrower from liability upon the
Mortgage Loan and substitute the new Borrower as obligor thereon, provided, that
(a) the credit status of the prospective new Borrower is in compliance with the
Master Servicer's or Special Servicer's, as applicable, regular commercial
mortgage origination or servicing standards and criteria (as evidenced in
writing by the Master Servicer or Special Servicer) and the terms of the related
Mortgage and (b) the Master Servicer or Special Servicer has received written
confirmation from each Rating Agency that such assumption or substitution would
not, in and of itself, cause a downgrade, qualification or withdrawal of the
then current ratings assigned to the Certificates. In connection with each such
assumption or substitution entered into by the Special Servicer, the Special
Servicer shall give prior notice thereof to the Master Servicer. The Master
Servicer or Special Servicer, as applicable, shall notify the Trustee that any
such assumption or substitution agreement has been completed by forwarding to
the Trustee (with a copy to the Master Servicer, if applicable) the original
copy of such agreement, which copies shall be added to the related Mortgage File
and shall, for all purposes, be considered a part of such Mortgage File to the
same extent as all other documents and instruments constituting a part thereof.
(b) Subject to Section 3.25(a), if any Mortgage Loan contains a provision
in the nature of a "due-on-encumbrance" clause, which by its terms:
(i) provides that such Mortgage Loan shall (or may at the mortgagee's
option) become due and payable upon the creation of any lien or
other encumbrance on the related Mortgaged Property, or
(ii) requires the consent of the related mortgagee to the creation of
any such lien or other encumbrance on the related Mortgaged
Property,
then the Master Servicer or Special Servicer, as applicable, on behalf of
the Trust Fund, shall not be required to enforce such due-on-encumbrance clause
and in connection therewith will not be required to (i) accelerate the payments
on the related Mortgage Loan or (ii) withhold its consent to such lien or
encumbrance if in either case the Master Servicer or Special Servicer, as
applicable, (x) determines, in accordance with the Servicing Standard, that such
enforcement would not be in the best interests of the Trust Fund and (y)
receives prior written confirmation from each Rating Agency that granting such
consent would not, in and of itself, cause a downgrade, qualification or
withdrawal of any of the then current ratings assigned to the Certificates.
(c) Nothing in this Section 3.09 shall constitute a waiver of the Trustee's
right, as the mortgagee of record, to receive notice of any assumption of a
Mortgage Loan, any sale or other transfer of the related Mortgaged Property or
the creation of any lien or other encumbrance with respect to such Mortgaged
Property.
(d) In connection with the taking of, or the failure to take, any action
pursuant to this Section 3.09, neither the Master Servicer nor the Special
Servicer shall agree to modify, waive or amend, and no assumption or
substitution agreement entered into pursuant to Section 3.09(a) shall contain
any terms that are different from, any term of any Mortgage Loan or the related
Note, other than pursuant to Section 3.26.
(e) With respect to any Mortgage Loan which permits release of Mortgaged
Properties through defeasance, to the extent not inconsistent with the related
Loan Documents:
(i) In the event such Mortgage Loan requires that the Master
Servicer on behalf of the Trustee purchase the required U.S.
government obligations, the Master Servicer shall, at the
Borrower's expense, purchase such obligations in accordance
with the terms of such Mortgage Loan and hold the same on
behalf of the Trust Fund; provided, that the Master Servicer
shall not accept the amounts paid by the related Borrower to
effect defeasance until acceptable U.S. government
obligations have been identified.
(ii) The Master Servicer shall obtain an Opinion of Counsel
(which shall be an expense of the related Borrower) to the
effect that the Trustee has a first priority security
interest in the defeasance deposit and the U.S. government
obligations and the assignment thereof is valid and
enforceable; such opinion, together with any other
certificates or documents to be required in connection with
such defeasance shall be in form and substance acceptable to
the Master Servicer.
(iii)The Master Servicer shall obtain a certificate (which may
be conclusively relied upon by the Master Servicer) at the
related Borrower's expense from an Independent certified
public accountant certifying that payments from the U.S.
government obligations are sufficient to pay all amounts
when and as due under the related Mortgage Loan.
(iv) Prior to permitting release of any Mortgaged Properties
through defeasance, the Master Servicer shall (at the
Borrower's expense) obtain written confirmation from each
Rating Agency that such defeasance would not, in and of
itself, result in a downgrade, qualification or withdrawal
of the then current ratings assigned to the Certificates.
(v) The Master Servicer shall use its reasonable best efforts to
cause the related Borrower to establish at such Borrower's
cost and expense (and shall use its reasonable best efforts
to cause the related Borrower to consent to such assumption)
a special purpose entity which is an accommodation borrower
to assume the defeased obligations, the establishment of
which will not, as evidenced in a writing of the Rating
Agencies delivered to the Trustee, in and of itself, result
in the downgrade, qualification or withdrawals of the
ratings then assigned to the Certificates.
(vi) Prior to permitting release of any Mortgaged Property
through defeasance, the Master Servicer shall obtain an
Opinion of Counsel (which shall be an expense of the related
Borrower) to the effect that such release will not cause
either the Upper-Tier REMIC or Lower-Tier REMIC to fail to
qualify as a REMIC at any time that any Certificates are
outstanding or cause a tax to be imposed on the Trust Fund
under the REMIC Provisions.
SECTION 3.10. Realization Upon Defaulted Mortgage Loans.
(a) Within 60 days after the occurrence of an Appraisal Reduction Event (or
such longer period of time, up to 30 days, provided that the Special Servicer is
diligently proceeding in accordance with the Servicing Standard to obtain such
appraisal), the Special Servicer shall obtain an Updated Appraisal of the
related Mortgaged Property or REO Property, as the case may be, the costs of
which shall be a Property Advance to be advanced by the Master Servicer;
provided, however, that the Special Servicer shall not be required to obtain an
Updated Appraisal of any Mortgaged Property with respect to which there exists
an appraisal which is less than twelve months old; provided, further, however,
that with respect to an Appraisal Reduction Event enumerated in clause (ii) of
the definition of Appraisal Reduction Event, the Special Servicer shall obtain
such appraisal no later than 120 days following the date of the related
delinquency. The Master Servicer or Special Servicer, as applicable, shall
obtain annual letter updates to the Updated Appraisal or new Updated Appraisals,
provided, that in the event that the Master Servicer or Special Servicer, as
applicable, becomes aware pursuant to the financial and property reports, if
any, collected from the related Borrower that net operating income with respect
to any Mortgaged Property (calculated as provided in the related Loan Documents)
has dropped by more than 10% for any fiscal year or the debt service coverage
ratio of any Mortgaged Property (calculated as provided in the related Loan
Documents) has fallen below 1.2 (based on such fiscal year's financial
statements), the Master Servicer or Special Servicer, as applicable, shall
obtain a new Updated Appraisal.
Following a default in the payment of any principal balance and accrued
interest on the maturity date of a Mortgage Loan, either (x) the Master Servicer
shall continue to make P&I Advances (with respect to delinquent Extended Monthly
Payments or Monthly Payments, as applicable) in accordance with Section 3.10(j),
or (y) the Special Servicer shall foreclose upon or comparably convert or elect
to grant up to three consecutive one-year extensions of the Specially Serviced
Mortgage Loan; provided that the Special Servicer may only extend such Mortgage
Loan if (i) immediately prior to the default on the maturity date (or the first
or second anniversary thereof in the case of the second or third extension,
respectively), the related Borrower had made twelve consecutive Monthly Payments
(or Extended Monthly Payments (as defined herein) in the case of the second or
third extension) on or prior to their Due Dates, (ii) the Special Servicer
determines that (A) extension of such Mortgage Loan is consistent with the
Servicing Standard and (B) extension of such Mortgage Loan is likely to result
in a recovery which on a net present value basis would be greater than the
recovery that would result from a foreclosure, (iii) such extension requires
that all cash flow on all related Mortgage Properties in excess of amounts
required to operate and maintain such Mortgaged Properties be applied to
payments of principal and interest on such Mortgage Loan, (iv) the Special
Servicer terminates the related Manager unless the Special Servicer determines
that retaining such Manager is conducive to maintaining the value of such
Mortgaged Properties and (v) such extension requires the related Borrower to
make Extended Monthly Payments. The Special Servicer's determination to extend
shall be made in the Special Servicer's good faith judgment, and may, but is not
required to be, based on an Updated Appraisal or a letter update thereof. In
addition, the Special Servicer's determination set forth in clause (ii) above
shall be evidenced by an Officer's Certificate delivered to the Trustee, the
Rating Agencies and the Depositor. The Officer's Certificate shall set forth the
considerations of the Special Servicer forming the basis of such determination
(which shall include but shall not be limited to information, to the extent
available, such as related income and expense statements, rent rolls, occupancy
status, and property inspections).
The Special Servicer will not agree to any extension of a Mortgage Loan
beyond the date which is two years prior to the Rated Final Distribution Date or
beyond the date that is ten years prior to the expiration of any ground lease
with regard to a Mortgage Loan. If the related Borrower fails to make an
Extended Monthly Payment during the initial extension period, no further
extensions will be granted. In no event will the Special Servicer be permitted
to extend any Mortgage Loan at a rate lower than the Mortgage Rate.
(b) In connection with any foreclosure, enforcement of the Loan Documents
or other acquisition, the Special Servicer shall pay the out-of-pocket costs and
expenses, including travel expenses, in any such proceedings as a Property
Advance unless the Special Servicer determines, in its good faith judgment, that
such Advance would constitute a Nonrecoverable Advance. The Special Servicer
shall be entitled to reimbursement of Advances (with interest at the Advance
Rate) made pursuant to the preceding sentence to the extent permitted by Section
3.06(ii).
If the Special Servicer elects to proceed with a non-judicial foreclosure
in accordance with the laws of the state where the Mortgaged Property is
located, the Special Servicer shall not be required to pursue a deficiency
judgment against the related Borrower or any other liable party if the laws of
the state do not permit such a deficiency judgment after a non-judicial
foreclosure or if the Special Servicer determines, in its best judgment, that
the likely recovery if a deficiency judgment is obtained will not be sufficient
to warrant the cost, time, expense and/or exposure of pursuing the deficiency
judgment and such determination is evidenced by an Officers' Certificate
delivered to the Trustee.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be issued to the Trustee, to a co-trustee or to its nominee (which shall
not include the Master Servicer or the Special Servicer) or a separate trustee
or co-trustee on behalf of the Trustee as Holder of the Lower-Tier Regular
Interests and on behalf of the Holders of the Certificates. Notwithstanding any
such acquisition of title and cancellation of the related Mortgage Loan, such
Mortgage Loan shall (except for purposes of Section 9.01) be considered to be a
REO Mortgage Loan held in the Trust Fund until such time as the related REO
Property shall be sold by the Trust Fund and shall be reduced only by
collections net of expenses. Consistent with the foregoing, for purposes of all
calculations hereunder, so long as such Mortgage Loan shall be considered to be
an outstanding Mortgage Loan: (i) it shall be assumed that, notwithstanding that
the indebtedness evidenced by the related Note shall have been discharged, such
Note and, for purposes of determining the Stated Principal Balance thereof, the
related amortization schedule in effect at the time of any such acquisition of
title remain in effect; and (ii) Net REO Proceeds received in any month shall be
applied to amounts that would have been payable under the related Note in
accordance with the terms of such Note. In the absence of such terms, Net REO
Proceeds shall be deemed to have been received first in payment of the accrued
interest (not including Default Interest or Deferred Interest) that remained
unpaid on the date that the related REO Property was acquired by the Trust Fund;
second in respect of the delinquent principal installments that remained unpaid
on such date; and thereafter, Net REO Proceeds received in any month shall be
applied to the payment of installments of principal and accrued interest on such
Mortgage Loan deemed to be due and payable in accordance with the terms of such
Note and such amortization schedule. If such Net REO Proceeds exceed the Monthly
Payment then payable, the excess shall be treated as a Principal Prepayment
received in respect of such Mortgage Loan.
(c) Notwithstanding any provision to the contrary, the Special Servicer
shall not acquire for the benefit of the Trust Fund any personal property
pursuant to this Section 3.10 unless either:
(i) such personal property is incident to real property (within
the meaning of Section 856(e)(1) of the Code) so acquired by
the Special Servicer for the benefit of the Trust Fund; or
(ii) the Special Servicer shall have requested and received an
Opinion of Counsel (which opinion shall be an expense of the
Trust Fund) to the effect that the holding of such personal
property by the Trust Fund will not cause the imposition of
a tax on the Lower-Tier REMIC or Upper-Tier REMIC under the
REMIC Provisions or cause the Lower-Tier REMIC or Upper-Tier
REMIC to fail to qualify as a REMIC at any time that any
Certificate is outstanding.
(d) Notwithstanding any provision to the contrary in this Agreement,
neither the Special Servicer nor the Master Servicer shall, on behalf of the
Trust Fund, obtain title to any direct or indirect partnership interest or other
equity interest in any Borrower pledged pursuant to any pledge agreement unless
it shall have requested and received an Opinion of Counsel (which opinion shall
be an expense of the Trust Fund) to the effect that the holding of such direct
or indirect partnership interest or other equity interest by the Trust Fund will
not cause the imposition of a tax on the Lower-Tier REMIC or Upper-Tier REMIC
under the REMIC Provisions or cause the Lower-Tier REMIC or Upper-Tier REMIC to
fail to qualify as a REMIC at any time that any Certificate is outstanding.
(e) Notwithstanding any provision to the contrary contained in this
Agreement, the Special Servicer shall not, on behalf of the Trust Fund, obtain
title to a Mortgaged Property as a result of or in lieu of foreclosure or
otherwise, obtain title to any direct or indirect partnership interest in any
Borrower pledged pursuant to a pledge agreement and thereby be the beneficial
owner of a Mortgaged Property, and shall not otherwise acquire possession of, or
take any other action with respect to, any Mortgaged Property if, as a result of
any such action, the Trustee, for the Trust Fund or the Certificateholders,
would be considered to hold title to, to be a "mortgagee-in-possession" of, or
to be an "owner" or "operator" of such Mortgaged Property within the meaning of
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended from time to time, or any comparable law, unless the Special
Servicer has previously determined in accordance with the Servicing Standard,
based on an updated environmental assessment report prepared by an Independent
Person who regularly conducts environmental audits, that:
(A) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, after consultation with an
environmental consultant, that it would be in the best
economic interest of the Trust Fund to take such actions as
are necessary to bring such Mortgaged Property in compliance
therewith; and
(B) there are no circumstances present at such Mortgaged
Property relating to the use, management or disposal of any
Hazardous Materials for which investigation, testing,
monitoring, containment, clean-up or remediation could be
required under any currently effective federal, state or
local law or regulation, or that, if any such Hazardous
Materials are present for which such action could be
required, after consultation with an environmental
consultant, it would be in the best economic interest of the
Trust Fund to take such actions with respect to the affected
Mortgaged Property. In the event that the environmental
assessment first obtained by the Special Servicer with
respect to a Mortgaged Property indicates that such
Mortgaged Property may not be in compliance with applicable
environmental laws or that Hazardous Materials may be
present but does not definitively establish such fact, the
Special Servicer shall cause such further environmental
tests to be conducted by an Independent Person who regularly
conducts such tests as the Special Servicer shall deem
prudent to protect the interests of Certificateholders. Any
such tests shall be deemed part of the environmental
assessment obtained by the Special Servicer for purposes of
this Section 3.10.
(f) The environmental assessment contemplated by Section 3.10(e) shall be
prepared within two months of the determination that such assessment is required
(or such longer period of time, not to exceed 30 days, provided that the Special
Servicer is diligently proceeding in accordance with the Servicing Standard to
obtain such environmental assessment) by any Independent Person who regularly
conducts environmental audits for purchasers of commercial property where the
Mortgaged Property is located, as determined by the Special Servicer in a manner
consistent with the Servicing Standard. The Master Servicer shall pay as a
Property Advance the cost of preparation of such environmental assessments
unless the Master Servicer determines, in its good faith judgment, that such
Advance would be a Nonrecoverable Advance. The Master Servicer shall be entitled
to reimbursement of Advances (with interest at the Advance Rate) made pursuant
to the preceding sentence in the manner set forth in Section 3.06.
(g) If the Special Servicer determines pursuant to Section 3.10(e)(A) that
a Mortgaged Property is not in compliance with applicable environmental laws but
that it is in the best economic interest of the Trust Fund to take such actions
as are necessary to bring such Mortgaged Property in compliance therewith, or if
the Special Servicer determines pursuant to Section 3.10(e)(B) that the
circumstances referred to therein relating to Hazardous Materials are present
but that it is in the best economic interest of the Trust Fund to take such
action with respect to the containment, clean-up or remediation of Hazardous
Materials affecting such Mortgaged Property as is required by law or regulation,
the Special Servicer shall take such action as it deems to be in the best
economic interest of the Trust Fund, but only if the Trustee has mailed notice
to the Holders of the Regular Certificates of such proposed action, which notice
shall be prepared by the Special Servicer and delivered to the Trustee, and only
if the Trustee does not receive, within 30 days of such notification,
instructions from the Holders of greater than 50% of the aggregate Voting Rights
of such Classes directing the Special Servicer not to take such action. None of
the Trustee, the Master Servicer or the Special Servicer shall be obligated to
take any action or not take any action pursuant to this Section 3.10(g) at the
direction of the Certificateholders unless the Certificateholders agree to
indemnify the Trustee, the Master Servicer and the Special Servicer with respect
to such action or inaction. The Special Servicer shall pay as a Property Advance
the cost of any such compliance, containment, clean-up or remediation unless the
Special Servicer determines, in its good faith judgment, that such Advance would
constitute a Nonrecoverable Advance.
(h) The Special Servicer shall report to the IRS and to the related
Borrower, in the manner required by applicable law, the information required to
be reported regarding any Mortgaged Property which is abandoned or foreclosed.
The Special Servicer shall deliver a copy of any such report to the Trustee.
(i) The costs of any appraisal or annual letter update obtained pursuant to
this Section 3.10 shall be paid by the Master Servicer as an Advance and shall
be reimbursable from the Collection Account pursuant to Section 3.06.
(j) Following a default in the payment of principal or interest on a
Mortgage Loan, the Special Servicer, after consultation and agreement in writing
by the Master Servicer, may elect not to foreclose or institute similar
proceedings or to modify the loan pursuant to Section 3.26 and instead the
Master Servicer shall continue to make P&I Advances with respect to such
delinquencies so long as (i) the Special Servicer, in its reasonable judgment in
accordance with the Servicing Standard, after consultation and agreement in
writing by the Master Servicer, concludes that the election not to foreclose or
to modify would likely result in a greater recovery, on a present value basis,
than would foreclosure or modification and (ii) the Master Servicer, in its
reasonable judgment, in accordance with the Servicing Standard, concludes that
such P&I Advances will not be Nonrecoverable Advances.
SECTION 3.11. Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the Master
Servicer of a notification that payment in full has been escrowed in a manner
customary for such purposes, the Master Servicer shall immediately notify the
Trustee or the Custodian by a certification (which certification shall include a
statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the
Collection Account pursuant to Section 3.05 have been or will be so deposited)
of a Servicing Officer and shall request delivery to it of the Mortgage File. No
expenses incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Trust Fund.
From time to time upon request of the Master Servicer or Special Servicer
and delivery to the Trustee and the Custodian of a Request for Release, the
Trustee shall promptly cause the Custodian to release the Mortgage File (or any
portion thereof) designated in such Request for Release to the Master Servicer
or Special Servicer, as applicable. Upon return of the foregoing to the
Custodian, or in the event of a liquidation or conversion of the Mortgage Loan
into an REO Property, receipt by the Trustee of a certificate of a Servicing
Officer stating that such Mortgage Loan was liquidated and that all amounts
received or to be received in connection with such liquidation which are
required to be deposited into the Collection Account or the Lower-Tier
Distribution Account, as applicable, have been so deposited, or that such
Mortgage Loan has become an REO Property, the Custodian shall deliver a copy of
the Request for Release to the Master Servicer or Special Servicer, as
applicable.
Upon written certification of a Servicing Officer, the Trustee shall
execute and deliver to the Special Servicer any court pleadings, requests for
trustee's sale or other documents prepared by the Special Servicer, its agents
or attorneys, necessary to the foreclosure or trustee's sale in respect of a
Mortgaged Property or to any legal action brought to obtain judgment against any
Borrower on the Mortgage Loan or to obtain a deficiency judgment, or to enforce
any other remedies or rights provided by the Loan Documents or otherwise
available at law or in equity. Each such certification shall include a request
that such pleadings or documents be executed by the Trustee and a statement as
to the reason such documents or pleadings are required, and that the execution
and delivery thereof by the Trustee will not invalidate or otherwise affect the
lien of the Mortgage or other security agreement, except for the termination of
such lien upon completion of the foreclosure or trustee's sale.
SECTION 3.12. Servicing Fees, Trustee Fees and Special Servicing
Compensation.
(a) As compensation for its activities hereunder, the Master Servicer shall
be entitled, with respect to each Mortgage Loan and each Interest Accrual
Period, to the Servicing Fee, which shall be payable from amounts on deposit in
the Collection Account as set forth in Section 3.06(iii). The Master Servicer's
rights to the Servicing Fee may not be transferred in whole or in part except in
connection with the transfer of all of the Master Servicer's responsibilities
and obligations under this Agreement. In addition, the Master Servicer shall be
entitled to receive, as additional servicing compensation, to the extent
permitted by applicable law and the related Mortgage Loans (i) any late payment
charges, loan service transaction fees, demand fees, beneficiary statement
charges or similar items (but not including any Net Default Interest or
Prepayment Premiums), (ii) the Assumption Fees collected with respect to any
Mortgage Loan that is not a Specially Serviced Mortgage Loan and (iii) a portion
of any modification fees, forbearance fees and extension fees pursuant to
Section 3.12(d) below, in each case to the extent received and not required to
be deposited or retained in the Collection Account pursuant to Section 3.05;
provided, however, that the Master Servicer shall not be entitled to apply or
retain any amounts as additional compensation, including any late payment
charges, with respect to a specific Mortgage Loan with respect to which a
default or event of default thereunder has occurred and is continuing unless and
until such default or event of default has been cured and all delinquent amounts
(excluding any Default Interest) due with respect to such Mortgage Loan have
been paid. The Master Servicer shall also be entitled pursuant to, and to the
extent provided in, Sections 3.06(iii) and 3.07(b) to withdraw from the
Collection Account and to receive from any Borrower Accounts (to the extent not
payable to the related Borrower under the Mortgage Loan or applicable law) any
interest or other income earned on deposits therein.
Notwithstanding the foregoing, the aggregate Servicing Fee (minus the
Trustee Fee) due to the Master Servicer with respect to any Distribution Date
shall be reduced (but not below zero) by the aggregate amount of any Prepayment
Interest Shortfalls for the related Collection Period.
As compensation for its activities hereunder, on each Distribution Date the
Trustee shall be entitled with respect to each Mortgage Loan to the Trustee Fee,
which shall be payable by the Master Servicer out of the aggregate Servicing
Fee. The Trustee shall pay the routine fees and expenses of the Certificate
Registrar, the Paying Agent, the Custodian and the Authenticating Agent. The
Trustee's rights to the Trustee Fee may not be transferred in whole or in part
except in connection with the transfer of all of the Trustee's responsibilities
and obligations under this Agreement.
Except as otherwise provided herein, the Master Servicer shall pay all
expenses incurred by it in connection with its servicing activities hereunder,
including all fees of any sub-servicers retained by it. Except as otherwise
provided herein, the Trustee shall pay all expenses incurred by it, the
Certificate Registrar, the Paying Agent, the Custodian and the Authenticating
Agent in connection with their activities hereunder.
(b) As compensation for its activities hereunder, the Special Servicer
shall be entitled with respect to each Specially Serviced Mortgage Loan to the
Special Servicing Fee, which shall be payable from amounts on deposit in the
Collection Account as set forth in Section 3.06(iii). The Special Servicer's
rights to the Special Servicing Fee may not be transferred in whole or in part
except in connection with the transfer of all of the Special Servicer's
responsibilities and obligations under this Agreement. In addition, the Special
Servicer shall be entitled to receive as additional servicing compensation, to
the extent permitted by applicable law and the related Specially Serviced
Mortgaged Loans (i) a portion of any modification fees, forbearance fees and
extension fees pursuant to Section 3.12(d) below, (ii) the Assumption Fees
collected with respect to any Specially Serviced Mortgage Loans and (iii) any
interest or other income earned on deposits in the REO Accounts.
Except as otherwise provided herein, the Special Servicer shall pay all
expenses incurred by it in connection with its servicing activities hereunder.
(c) In addition to the Special Servicing Fees provided for in this
Agreement, and not in lieu thereof, the Special Servicer shall be entitled to
the following fees and compensation:
(i) the Special Servicing Rehabilitation Fee; and
(ii) the Liquidation Fee payable out of the Liquidation Proceeds
prior to the deposit of the Net Liquidation Proceeds in the
Collection Account. However, no Liquidation Fee will be
payable in connection with, or out of, Liquidation Proceeds
resulting from the purchase of any Specially Serviced
Mortgage Loan or REO Property (i) by MSMC, or (ii) by the
Master Servicer, the Depositor or the Certificateholders
pursuant to Section 2.03 or Section 9.01.
(d) As additional compensation for their activities hereunder, the Master
Servicer and the Special Servicer shall be entitled to a portion of any
modification fees, forbearance fees and extension fees paid by or on behalf of a
Borrower in the following manner: (i) with respect to any Mortgage Loan that is
being serviced by the Master Servicer, the Master Servicer shall be entitled to
75% of such fees and the Special Servicer shall be entitled to 25% of such fees;
provided that the amount to which the Special Servicer is entitled to shall be
subject to a maximum of $10,000 and any excess thereof shall be payable to the
Master Servicer and (ii) with respect to any Specially Serviced Mortgage Loans,
the Special Servicer shall be entitled to 75% of such fees and the Master
Servicer shall be entitled to 25% of such fees; provided that the amount to
which the Master Servicer is entitled to shall be subject to a maximum of
$10,000 and any excess thereof shall be payable to the Special Servicer.
(e) The Master Servicer, Special Servicer and Trustee shall be entitled to
reimbursement from the Trust Fund for the costs and expenses incurred by them in
the performance of their duties under this Agreement which are "unanticipated
expenses incurred by the REMIC" within the meaning of Treasury Regulations
Section 1.860G-1(b)(3)(iii). Such expenses shall include, by way of example and
not by way of limitation, environmental assessments, Updated Appraisals and
appraisals in connection with foreclosure, the fees and expenses of any
administrative or judicial proceeding and expenses expressly identified as
reimbursable in Section 3.06(v).
(f) No provision of this Agreement or of the Certificates shall require the
Master Servicer, the Special Servicer or the Trustee to expend or risk their own
funds or otherwise incur any financial liability in the performance of any of
their duties hereunder or thereunder, or in the exercise of any of their rights
or powers, if, in the good faith business judgment of the Master Servicer,
Special Servicer or Trustee, as the case may be, repayment of such funds would
not be ultimately recoverable from late payments, Net Insurance Proceeds, Net
Liquidation Proceeds and other collections on or in respect of the Mortgage
Loans, or from adequate indemnity from other assets comprising the Trust Fund
against such risk or liability.
If the Master Servicer, the Special Servicer or the Trustee receives a
request or inquiry from a Borrower, any Certificateholder or any other Person
the response to which would, in the Master Servicer's, the Special Servicer's or
the Trustee's good faith business judgment require the assistance of Independent
legal counsel or other consultant to the Master Servicer, the Special Servicer
or the Trustee, the cost of which would not be an expense of the Trust Fund
hereunder, then the Master Servicer, the Special Servicer or the Trustee, as the
case may be, shall not be required to take any action in response to such
request or inquiry unless the Borrower or such Certificateholder or such other
Person, as applicable, makes arrangements for the payment of the Master
Servicer's, the Special Servicer's or Trustee's expenses associated with such
counsel (including, without limitation, posting an advance payment for such
expenses) satisfactory to the Master Servicer, the Special Servicer or the
Trustee, as the case may be, in its sole discretion. Unless such arrangements
have been made, the Master Servicer, the Special Servicer or the Trustee, as the
case may be, shall have no liability to any Person for the failure to respond to
such request or inquiry.
SECTION 3.13. Reports to the Trustee; Collection Account Statements.
(a) The Master Servicer shall deliver to the Trustee (solely for the
purposes of determining P&I Advances) no later than the fifth Business Day prior
to each Distribution Date a preliminary report containing the information
provided on the Master Servicer Remittance Report and by no later than 1:00 p.m.
New York City time on the second Business Day prior to each Distribution Date,
the Master Servicer Remittance Report with respect to the related Distribution
Date (which shall include, without limitation, a preliminary estimate of the
amount of Available Funds for such related Collection Period) including a
written statement of anticipated P&I Advances for the related Distribution Date.
The Master Servicer's responsibilities under this Section 3.13(a) with respect
to REO Mortgage Loans shall be subject to the satisfaction of the Special
Servicer's obligations under Section 3.24.
(b) Not later than fifteen days after each Distribution Date, the Master
Servicer shall forward to the Trustee a statement prepared by the Master
Servicer setting forth the status of the Collection Account as of the close of
business on the related Distribution Date and showing the aggregate amount of
deposits into and withdrawals from the Collection Account of each category of
deposit specified in Section 3.05 and each category of withdrawal specified in
Section 3.06 since the preceding Distribution Date. The Trustee and its agents
and attorneys may at any time during normal business hours, upon reasonable
notice, inspect and copy the books, records and accounts of the Master Servicer
solely relating to the Mortgage Loans and the performance of its duties
hereunder.
(c) Subject to Section 8.01(b) hereof, 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.
SECTION 3.14. Annual Statement as to Compliance.
The Master Servicer and the Special Servicer (each, a "reporting person")
each shall deliver to the Trustee, the Depositor and to the Rating Agencies on
or before March 31 of each year, beginning with March 31, 1999, an Officers'
Certificate stating, as to each signatory thereof, (i) that a review of the
activities of the reporting person during the preceding calendar year (or such
shorter period from the Closing Date to the end of the related calendar year)
and of its performance under this Agreement has been made under such officer's
supervision, (ii) that, to the best of such officer's knowledge, based on such
review, the reporting person has fulfilled all of its obligations under this
Agreement in all material respects throughout such year (or such shorter
period), or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer, the nature and
status thereof and what action it proposes to take with respect thereto, (iii)
that, to the best of such officer's knowledge, each sub-servicer has fulfilled
its obligations under its sub-servicing agreement in all material respects, or,
if there has been a material default in the fulfillment of such obligations,
specifying each such default known to such officer and the nature and status
thereof, (iv) that it has maintained an effective internal control system over
the servicing of mortgage loans including the Mortgage Loans and other loans,
and (v) whether it has received any notice regarding qualification, or
challenging the status, of the Upper-Tier REMIC or Lower-Tier REMIC as a REMIC
from the IRS or any other governmental agency or body.
SECTION 3.15. Annual Independent Public Accountants' Servicing Report.
On or before March 31 of each year, beginning with March 31, 1999, the
Master Servicer and the Special Servicer (each, a "reporting person") at its own
expense shall cause a firm of nationally recognized Independent public
accountants (who may also render other services to the reporting person) which
is a member of the American Institute of Certified Public Accountants to furnish
a statement (an "Accountant's Statement") to the Trustee, to the effect that the
assertion of management of the Master Servicer or the Special Servicer that it
has maintained an effective internal control system over the servicing of
mortgage loans including the Mortgage Loans and other loans, for the preceding
calendar year (or shorter period from the Closing Date to the end of the related
calendar year) is fairly stated, based on an examination conducted substantially
in compliance with the Uniform Single Attestation Program for Mortgage Bankers
or the Audit Program for Mortgages serviced for FHLMC, except for exceptions and
errors as stated in such report.
SECTION 3.16. Access to Certain Documentation.
The Master Servicer and Special Servicer shall provide to any
Certificateholders that are federally insured financial institutions, the
Federal Reserve Board, the FDIC and the OTS and the supervisory agents and
examiners of such boards and such corporations, and any other governmental or
regulatory body to the jurisdiction of which any Certificateholder is subject,
access to the documentation regarding the Mortgage Loans required by applicable
regulations of the Federal Reserve Board, FDIC, OTS or any such governmental or
regulatory body, such access being afforded without charge but only upon
reasonable request and during normal business hours at the offices of the Master
Servicer or Special Servicer. Nothing in this Section 3.16 shall detract from
the obligation of the Master Servicer and Special Servicer to observe any
applicable law prohibiting disclosure of information with respect to the
Borrowers, and the failure of the Master Servicer and Special Servicer to
provide access as provided in this Section 3.16 as a result of such obligation
shall not constitute a breach of this Section 3.16.
SECTION 3.17. Title and Management of REO Properties.
(a) In the event that title to any Mortgaged Property is acquired for the
benefit of Certificateholders in foreclosure, by deed in lieu of foreclosure or
upon abandonment or reclamation from bankruptcy, the deed or certificate of sale
shall be taken in the name of the Trustee, or its nominee (which shall not
include the Master Servicer or the Special Servicer), or a separate trustee or
co-trustee, on behalf of the Trust Fund. The Special Servicer, on behalf of the
Trust Fund, shall dispose of any REO Property prior to the close of the third
calendar year beginning after the year in which the Trust Fund acquires
ownership of such REO Property for purposes of Section 860G(a)(8) of the Code,
unless (i) the Special Servicer on behalf of the Lower-Tier REMIC has applied
for an extension of such period pursuant to Sections 856(e)(3) and 860G(a)(8)(A)
of the Code, in which case the Special Servicer shall sell such REO Property
within the applicable extension period or (ii) the Special Servicer seeks and
subsequently receives an Opinion of Counsel (which opinion shall be an expense
of the Trust Fund), addressed to the Special Servicer and Trustee, to the effect
that the holding by the Trust Fund of such REO Property for an additional
specified period will not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code
(determined without regard to the exception applicable for purposes of Section
860D(a) of the Code) at any time that any Certificate is outstanding, in which
event such period shall be extended by such additional specified period subject
to any conditions set forth in such Opinion of Counsel. The Special Servicer, on
behalf of the Trust Fund, shall dispose of any REO Property held by the Trust
Fund prior to the last day of such period (taking into account extensions) by
which such REO Property is required to be disposed of pursuant to the provisions
of the immediately preceding sentence in a manner provided under Section 3.18
hereof. The Special Servicer shall manage, conserve, protect and operate each
REO Property for the Certificateholders solely for the purpose of its prompt
disposition and sale in a manner which does not cause such REO Property to fail
to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code (determined without regard to the exception applicable for purposes of
Section 860D(a)).
(b) The Special Servicer shall have full power and authority, subject only
to the specific requirements and prohibitions of this Agreement, to do any and
all things in connection with any REO Property as are consistent with the
Servicing Standard and the terms of this Agreement, all on such terms and for
such period as the Special Servicer deems to be in the best interests of
Certificateholders, and, in connection therewith, the Special Servicer shall
only agree to the payment of management fees that are consistent with general
market standards or to terms that are more favorable to the Trust Fund.
Consistent with the foregoing, the Special Servicer shall cause or permit to be
earned with respect to such REO Property any "net income from foreclosure
property," within the meaning of Section 860G(c) of the Code, which is subject
to tax under the REMIC Provisions only if it has determined, and has so advised
the Trustee in writing, that the earning of such income on a net after-tax basis
could reasonably be expected to result in a greater recovery on behalf of
Certificateholders than an alternative method of operation or rental of such REO
Property that would not be subject to such a tax. The Special Servicer shall
segregate and hold all revenues received by it with respect to any REO Property
separate and apart from its own funds and general assets and shall establish and
maintain with respect to any REO Property a segregated custodial account (each,
an "REO Account"), each of which shall be an Eligible Account and shall be
entitled "Midland Loan Services, Inc., in trust for Norwest Bank Minnesota,
National Association, as Trustee, in trust for Holders of Morgan Stanley Capital
I Inc., Commercial Mortgage Pass-Through Certificates, Series 1998-XL2, REO
Account." The Special Servicer shall be entitled to withdraw for its account any
interest or investment income earned on funds deposited in an REO Account to the
extent provided in Section 3.07(b). The Special Servicer shall deposit or cause
to be deposited in the REO Account within one Business Day after receipt all
revenues received by it with respect to any REO Property (other than Liquidation
Proceeds, which shall be remitted pursuant to Section 3.18(e) to the Collection
Account), and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of such REO Property and for other Property
Protection Expenses with respect to such REO Property, including:
(i) all insurance premiums due and payable in respect of any REO
Property;
(ii) all real estate taxes and assessments in respect of any REO
Property that may result in the imposition of a lien
thereon;
(iii)all costs and expenses reasonable and necessary to protect,
maintain, manage, operate, repair and restore any REO
Property; and
(iv) any taxes imposed on the Upper Tier REMIC or Lower-Tier
REMIC in respect of net income from foreclosure property in
accordance with Section 4.05.
To the extent that such REO Proceeds are insufficient for the purposes set
forth in clauses (i) through (iii) above and the Special Servicer has provided
written notice of such shortfall to the Master Servicer at least five Business
Days prior to the date that such amounts are due, the Master Servicer shall pay
as a Property Advance the amount of such shortfall unless the Master Servicer
determines, in its good faith judgment, that such Advance would be a
Nonrecoverable Advance. If the Master Servicer does not make any such Advance in
violation of the immediately preceding sentence, the Trustee shall make such
Advance, unless in either case, the Trustee determines that such Advance would
be a Nonrecoverable Advance. The Trustee shall be entitled to rely,
conclusively, on any determination by the Master Servicer that an Advance, if
made, would be a Nonrecoverable Advance. The Trustee, in determining whether or
not a proposed Advance would be a Nonrecoverable Advance, shall be subject to
the standards applicable to the Master Servicer hereunder. The Master Servicer
or the Trustee, as applicable, shall be entitled to reimbursement of such
Advances (with interest at the Advance Rate) made pursuant to the preceding
sentence, to the extent set forth in Section 3.06. The Special Servicer shall
withdraw from each REO Account and remit to the Master Servicer for deposit into
the Collection Account on a monthly basis prior to the related Master Servicer
Remittance Date the Net REO Proceeds received or collected from each REO
Property, except that in determining the amount of such Net REO Proceeds, the
Special Servicer may retain in each REO Account reasonable reserves for repairs,
replacements and necessary capital improvements and other related expenses.
Notwithstanding the foregoing (but subject to the second sentence of this
Section 3.17(b)), the Special Servicer shall not:
(i) permit the Trust Fund to enter into, renew or extend any New
Lease, if the New Lease by its terms will give rise to any
income that does not constitute Rents from Real Property;
(ii) permit any amount to be received or accrued under any New
Lease, other than amounts that will constitute Rents from
Real Property;
(iii)authorize or permit any construction on any REO Property,
other than the repair or maintenance thereof or the
completion of a building or other improvement thereon, and
then only if more than ten percent of the construction of
such building or other improvement was completed before
default on the related Mortgage Loan became imminent, all
within the meaning of Section 856(e)(4)(B) of the Code; or
(iv) Directly Operate or allow any Person to Directly Operate any
REO Property on any date more than 90 days after its date of
acquisition by the Trust Fund, unless such Person is an
Independent Contractor;
unless, in any such case, the Special Servicer has requested and received an
Opinion of Counsel addressed to the Special Servicer and the Trustee (which
opinion shall be an expense of the Trust Fund) to the effect that such action
will not cause such REO Property to fail to qualify as "foreclosure property"
within the meaning of Section 860G(a)(8) of the Code (determined without regard
to the exception applicable for purposes of Section 860D(a) of the Code) at any
time that it is held by the Trust Fund, in which case the Special Servicer may
take such actions as are specified in such Opinion of Counsel.
The Special Servicer shall be required to contract with an Independent
Contractor, the fees and expenses of which shall be an expense of the Trust Fund
and payable out of REO Proceeds, for the operation and management of any REO
Property, within 90 days of the Trust Fund's acquisition thereof (unless the
Special Servicer shall have provided the Trustee with an Opinion of Counsel that
the operation and management of any REO Property other than through an
Independent Contractor shall not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Code Section 860G(a)(8)) (which
opinion shall be an expense of the Trust Fund), provided that:
(i) the terms and conditions of any such contract shall be
reasonable and customary for the area and type of property
and shall not be inconsistent herewith;
(ii) any such contract shall require, or shall be administered to
require, that the Independent Contractor pay all costs and
expenses incurred in connection with the operation and
management of such REO Property, including those listed
above, and remit all related revenues (net of such costs and
expenses) to the Special Servicer as soon as practicable,
but in no event later than thirty days following the receipt
thereof by such Independent Contractor;
(iii)none of the provisions of this Section 3.17(b) relating to
any such contract or to actions taken through any such
Independent Contractor shall be deemed to relieve the
Special Servicer of any of its duties and obligations to the
Trust Fund or the Trustee on behalf of the
Certificateholders with respect to the operation and
management of any such REO Property; and
(iv) the Special Servicer shall be obligated with respect thereto
to the same extent as if it alone were performing all duties
and obligations in connection with the operation and
management of such REO Property.
The Special Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Special Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification.
(c) When and as necessary, the Special Servicer shall send to the Trustee a
statement prepared by the Special Servicer setting forth the amount of net
income or net loss, as determined for federal income tax purposes, resulting
from the operation and management of a trade or business on, the furnishing or
rendering of a non-customary service to the tenants of, or the receipt of any
other amount not constituting Rents from Real Property in respect of, any REO
Property in accordance with Sections 3.17(a) and 3.17(b).
SECTION 3.18. Sale of Specially Serviced Mortgage Loans and REO Properties.
(a) With respect to any Specially Serviced Mortgage Loan or REO Property
which the Special Servicer has determined to sell in accordance with Sections
3.10 or 3.17, the Special Servicer shall deliver to the Trustee and the Rating
Agencies an Officers' Certificate to the effect that, pursuant to Sections 3.10
or 3.17, the Special Servicer has determined to sell such Specially Serviced
Mortgage Loan or REO Property in accordance with this Section 3.18. The Special
Servicer may then offer to sell to any Person any Specially Serviced Mortgage
Loan which is in default or for which default is reasonably foreseeable or any
REO Property or, subject to the following sentence, purchase any such Specially
Serviced Mortgage Loan or REO Property (in each case at the Repurchase Price
therefor), but shall, in any event, so offer to sell any REO Property no later
than the time determined by the Special Servicer to be sufficient to result in
the sale of such REO Property within the period specified in Section 3.17(a).
The Special Servicer shall deliver such Officers' Certificate and give the
Trustee not less than five Business Days' prior written notice of its intention
to sell any Specially Serviced Mortgage Loan or REO Property, in which case the
Special Servicer shall accept the highest offer received from any Person for any
Specially Serviced Mortgage Loan or any REO Property in an amount at least equal
to the Repurchase Price therefor or, at its option, if it has received no offer
at least equal to the Repurchase Price therefor, purchase the Specially Serviced
Mortgage Loan or REO Property at the Repurchase Price.
In the absence of any such offer or purchase by the Special Servicer, the
Special Servicer shall accept the highest offer received from any Person that is
determined by the Special Servicer to be a fair price, as determined in
accordance with Section 3.18(b), for such Specially Serviced Mortgage Loan or
REO Property, if the highest offeror is a Person other than an Interested
Person, or if such offer is determined to be a fair price by the Trustee in
accordance with Section 3.18(b), if the highest offeror is an Interested Person;
provided, that the Trustee (or the Special Servicer, if the Special Servicer or
any Affiliate of the Special Servicer is not an offeror) shall be entitled to
engage, at the expense of the Trust Fund, an Independent appraiser to determine
whether the highest offer is a fair price and, further provided, that if the
highest offeror is an Interested Person such offer shall not be accepted if it
is less than the Repurchase Price, unless the Rating Agencies have confirmed, in
writing, that such acceptance will not, in itself, result in the qualification,
downgrade or withdrawal of the then current ratings assigned to the
Certificates. Notwithstanding anything to the contrary herein, neither the
Trustee, in its individual capacity, nor any of its Affiliates may make an offer
or purchase any Specially Serviced Mortgage Loan or any REO Property pursuant
hereto.
The Special Servicer shall not be obligated by either of the foregoing
paragraphs or otherwise to accept the highest offer if the Special Servicer
determines, in accordance with the Servicing Standard, that rejection of such
offer would be in the best interests of the Certificateholders. In addition, the
Special Servicer may accept a lower offer if it determines, in accordance with
the Servicing Standard, that acceptance of such offer would be in the best
interests of the Certificateholders (for example, if the prospective buyer
making the lower offer is more likely to perform its obligations, or the terms
offered by the prospective buyer making the lower offer are more favorable),
provided that the offeror is not the Special Servicer or an Affiliate of the
Special Servicer.
In the event that the Special Servicer determines with respect to any REO
Property that the offers being made with respect thereto are not in the best
interests of the Certificateholders and that the end of the period referred to
in Section 3.17(a) with respect to such REO Property is approaching, the Special
Servicer shall seek an extension of such period in the manner described in
Section 3.17(a); provided, however, that the Special Servicer shall use its best
efforts, consistent with the Servicing Standard, to sell each Specially Serviced
Mortgage Loan and any REO Property prior to the Rated Final Distribution Date.
(b) In determining whether any offer received from an Interested Person
represents a fair price for any Specially Serviced Mortgage Loan or any REO
Property, the Trustee may conclusively rely on the opinion of an Independent
appraiser, provided that any such appraisal shall meet the requirements of an
Updated Appraisal hereunder. In determining whether any offer constitutes a fair
price for any Specially Serviced Mortgage Loan or any REO Property, the Special
Servicer (if the highest offeror is not an Interested Person) or the Trustee
shall take into account, and any appraiser or other expert in real estate
matters shall be instructed to take into account, as applicable, among other
factors, any Updated Appraisal previously obtained, the period and amount of any
delinquency on the affected Specially Serviced Mortgage Loan, the physical
(including environmental) condition of the related Mortgaged Property or such
REO Property, the state of the local economy and the Trust Fund's obligation to
dispose of any REO Property within the time period specified in Section 3.17(a).
(c) Subject to the provisions of Section 3.17, the Special Servicer shall
act on behalf of the Trust Fund in negotiating and taking any other action
necessary or appropriate in connection with the sale of any Specially Serviced
Mortgage Loan or REO Property, including the collection of all amounts payable
in connection therewith. Any sale of a Specially Serviced Mortgage Loan or any
REO Property shall be without recourse to, or representation or warranty by, the
Trustee, the Depositor, the Master Servicer, the Special Servicer or the Trust
Fund (except that any contract of sale and assignment and conveyance documents
may contain customary warranties of title, so long as the only recourse for
breach thereof is to the Trust Fund), and, if such sale is consummated in
accordance with the duties of the Special Servicer, the Master Servicer, the
Depositor and the Trustee pursuant to the terms of this Agreement, no such
Person who so performed shall have any liability to the Trust Fund or any
Certificateholder with respect to the purchase price therefor accepted by the
Special Servicer, if the offeror is not an Interested Person (or the Trustee, if
an Interested Person is an offeror).
(d) The Special Servicer shall file information returns regarding the
abandonment or foreclosure of Mortgaged Properties with the IRS at the time and
in the manner required by the Code.
(e) The proceeds of any sale pursuant to this Section 3.18 after deduction
of the expenses of such sale incurred in connection therewith shall be promptly,
and in any event within one Business Day following receipt thereof, remitted by
the Special Servicer to the Master Servicer for deposit in the Collection
Account in accordance with Section 3.05(a)(v).
SECTION 3.19. Additional Obligations of the Master Servicer;
Inspections; Successor Manager.
(a) The Master Servicer (or, with respect to Specially Serviced Mortgage
Loans and REO Properties, the Special Servicer) shall inspect or cause to be
inspected each Mortgaged Property at such times and in such manner as are
consistent with the Servicing Standard, but in any event shall inspect each
Mortgaged Property (i) with an Allocated Loan Amount of (A) $5,000,000 or more
at least once every 12 months and (B) less than $5,000,000 at least once every
24 months (provided, however, that at least 50% of the Mortgaged Properties with
an Allocated Loan Amount of less than $5,000,000 with respect to each Mortgage
Loan shall be inspected within the initial 12 months after the Closing Date), in
each case commencing in October, 1999 (or at such lesser frequency as each
Rating Agency shall have confirmed in writing to the Master Servicer will not
result in a downgrade, qualification or withdrawal of the then current ratings
assigned to any Class of the Certificates) and (ii) if any Mortgage Loan (A)
becomes a Specially Serviced Mortgage Loan or (B) has a debt service coverage
ratio (calculated as provided in the related Loan Documents) of less than 1.0
for the immediately preceding twelve-month period, the related Mortgaged
Property shall be inspected by the Master Servicer (or the Special Servicer with
respect to Specially Serviced Mortgage Loans) as soon as practicable and
thereafter at least every 12 months for so long as such condition exists. The
cost of any such inspection shall be borne by the Master Servicer unless the
related Mortgage Loan is a Specially Serviced Mortgage Loan, in which case any
out-of-pocket costs, including travel related expenses, incurred with respect to
such inspection by the Special Servicer shall be paid by the Master Servicer as
a Property Advance.
(b) With respect to each Mortgage Loan, the Master Servicer and the Special
Servicer (with respect to Specially Serviced Mortgage Loans) shall enforce the
Trustee's rights with respect to the Manager or Managers under the related Loan
Documents and Management Agreement or Management Agreements. In the event the
Master Servicer or the Special Servicer (with respect to Specially Serviced
Mortgage Loans) is entitled to terminate or cause the related Borrower to
terminate the Manager or Managers, and the Master Servicer or Special Servicer,
as applicable, has determined, in accordance with the Servicing Standard, that
such termination is appropriate, the Master Servicer or the Special Servicer, as
the case may be, shall promptly give notice of its intent to exercise its right
to terminate the Manager or Managers to the Trustee (who shall copy the
Certificateholders and the Rating Agencies), the related Originator, the Master
Servicer or Special Servicer, as applicable, and the Depositor. After receipt of
such notice, the most subordinate Class of Certificates then outstanding shall
have the right to recommend termination of the Manager or Managers, and if so,
to recommend a Successor Manager or Managers (meeting the requirements set forth
below). Certificateholders representing Voting Rights of greater than 50% of
such subordinate Class of Certificates will have ten Business Days from the
receipt of such notice to respond to such notice. Upon receipt of a
recommendation to terminate the Manager or Managers and appoint a Successor
Manager or Managers, the Master Servicer or the Special Servicer, as the case
may be, shall give notice of such recommendation to the Trustee (who shall copy
the Certificateholders), and the Master Servicer or Special Servicer, as
applicable, shall effect such recommendation unless: (i) within five Business
Days of the receipt of notice of such recommendation, Certificateholders
representing Voting Rights of greater than 50% of any Class of Certificates then
outstanding which was assigned a rating by any Rating Agency on the Closing Date
reject (in writing delivered to the Trustee) such proposed Successor Manager or
Managers in which case the Master Servicer or the Special Servicer, as the case
may be, shall procure a Successor Manager or Managers as set forth in the
following sentence; or (ii) the Master Servicer or the Special Servicer, as the
case may be, determines that effecting such recommendation to terminate is not
consistent with the Servicing Standard, and therefore, the Master Servicer or
the Special Servicer, as the case may be, elects not to effect such
recommendation. If the Master Servicer or the Special Servicer, as the case may
be, does not receive a required response (or if the response received is
inconsistent) and the Master Servicer or Special Servicer, as the case may be,
determines it is consistent with the Servicing Standard to terminate the Manager
or Managers or in the event the Manager or Managers is otherwise terminated or
resigns under the related Mortgage or Management Agreement, the Master Servicer
or the Special Servicer, as the case may be, shall use its best efforts to
retain a Successor Manager or Managers (or the recommended Successor Manager or
Managers, if any) on terms substantially similar to the Management Agreement or,
failing that, on terms as favorable to the Trust Fund as can reasonably be
obtained. A "Successor Manager" shall be reasonably acceptable to the Master
Servicer or the Special Servicer, as the case may be, and shall be a
professional management corporation or business entity which (i) manages, and is
experienced in managing, other comparable commercial properties, (ii) will not
result in a downgrade, qualification or withdrawal of the then current ratings
assigned to the Certificates by each Rating Agency, as confirmed in writing by
each Rating Agency, and (iii) otherwise satisfies any criteria set forth in the
Mortgage and related Loan Documents.
SECTION 3.20. Reports to the Securities and Exchange Commission;
Available Information.
(a) The Trustee shall prepare, sign, and electronically file on behalf of
the Depositor, and at the expense of the Depositor, any and all Exchange Act
Reports as may be required with respect to the Certificates pursuant to this
Agreement; provided, however, that the Depositor shall prepare, sign and file
with the Commission the initial Form 8-K relating to the Trust Fund. In the
event the Depositor notifies the Trustee, the Master Servicer and the Special
Servicer in writing as to any change in the Exchange Act reporting requirements
applicable to the Certificates, the Trustee, the Special Servicer and the Master
Servicer shall conform the reporting obligations as set forth herein to any such
changes as notified by the Depositor. The Master Servicer and the Special
Servicer, to the extent such information has been received by the Master
Servicer or Special Servicer, as applicable, agree to provide such information
with respect to the Mortgage Loans in an EDGAR-compatible electronic format to
the Trustee and such entity as is designated by the Depositor pursuant to
Section 3.20(f) in a timely fashion as may be requested by the Trustee in
connection with such Exchange Act Reports, so that such Exchange Act Reports may
be timely filed by the Trustee. Manually-signed copies of each Exchange Act
Report shall be delivered by the Trustee to the Depositor to the attention of
the Secretary (or such other Persons as are designated in writing by the
Depositor).
On a monthly basis prior to the filing on behalf of the Trust Fund of a
Form 15, the Trustee will file on behalf of the Trust Fund within 15 days after
the Distribution Date a Form 8-K that includes the Monthly Distribution
Statement.
On a quarterly basis prior to the filing on behalf of the Trust Fund, and
effectiveness, of a Form 15, the Trustee will file, to the extent the Trustee
receives the information set forth below in electronic format in accordance with
Section 3.20(f), within 45 days after the end of the relevant Borrower's fiscal
quarter a Financial Report for those Borrowers which represent 10% or more of
the aggregate Stated Principal Balance of the Mortgage Loans (on the date
hereof, the Grapevine Mills Loan, the Edens & Avant Pool I Loan, the Mall of New
Hampshire Loan, the Westside Pavilion Loan and the NorthTown Mall Loan). The
quarterly Financial Report with respect to (i) those Mortgage Loans that
represent 20% or more of the aggregate Stated Principal Balance of the Mortgage
Loans (on the date hereof The Grapevine Mills Loan) shall consist of unaudited
financial statements with respect to the Mortgaged Properties securing such
Mortgage Loans, and (ii) those Mortgage Loans that represent 10% but less than
20% of the aggregate Stated Principal Balance of the Mortgage Loans (on the date
hereof, the Edens & Avant Pool I Loan, the Mall of New Hampshire, the Westside
Pavilion Loan and the NorthTown Mall Loan) shall consist of summarized quarterly
financial information (substantially in the form set forth in Exhibit A-2,
Exhibit A-3, Exhibit A-4 and Exhibit A-5 respectively, to the Depositor's
Prospectus Supplement dated October 8, 1998 relating to the Certificates) as
described in Rule 1.02(bb) of Regulation S-X with respect to the Mortgaged
Properties securing such Mortgage Loan.
On an annual basis prior to the filing on behalf of the Trust Fund, and
effectiveness, of a Form 15, the Trustee will file, to the extent the Trustee
receives the information set forth below in electronic format in accordance with
Section 3.20(f), within 90 days after the end of the relevant Borrower's fiscal
year end a Financial Report for those Borrowers which represent 10% or more of
the aggregate Stated Principal Balance of the Mortgage Loans (on the date
hereof, the Grapevine Mills Loan, the Edens & Avant Pool I Loan, the Mall of New
Hampshire Loan, the Westside Pavilion Loan and the NorthTown Mall Loan). The
annual Financial Report with respect to (i) those Mortgage Loans that represent
20% or more of the aggregate Stated Principal Balance of the Mortgage Loans (on
the date hereof, the Grapevine Mills Loan) shall consist of audited financial
statements with respect to the Mortgaged Properties securing such Mortgage
Loans, and (ii) those Mortgage Loans that represent 10% but less than 20% of the
aggregate Stated Principal Balance of the Mortgage Loans (on the date hereof,
the Edens & Avant Pool I Loan, the Mall of New Hampshire Loan, the Westside
Pavilion Loan and the NorthTown Mall Loan) shall consist of summarized annual
financial information (substantially in the form set forth in Exhibit A-2,
Exhibit A-3, Exhibit A-4 and Exhibit A-5 respectively, to the Depositor's
Prospectus Supplement dated October 8, 1998 relating to the Certificates) as
described in Rule 1.02(bb) of Regulation S-X with respect to the Mortgaged
Properties securing such Mortgage Loan.
The Master Servicer, each Special Servicer and the Trustee hereby agree to
cooperate with the Borrowers and their accountants in obtaining any consents of
accountants that are required to be filed with any financial statements being
filed on a Form 10-K or Form 8-K.
If information for any Financial Report is incomplete by the date on which
required to be filed, the Trustee shall prepare, execute and file a Form 12b-25
and shall deliver a manually signed version of such form to the Depositor to the
attention of the Secretary (or such other Persons as are designated in writing
by the Depositor).
None of the Master Servicer, the Special Servicer and the Trustee shall (i)
file a Form ID with respect to the Depositor or (ii) cause the Trust Fund to
stop filing reports, statements and information with the Commission pursuant to
this Section unless directed to do so by the Depositor or the continued
reporting is prohibited under the Exchange Act or any regulations thereunder.
Promptly following the end of each calendar year, commencing December 31, 1998,
the Trustee shall notify the Depositor when the Certificates are held of record
by less than 300 persons within the meaning of Section 15(d) of the Exchange
Act. Upon receipt of such notice from the Trustee, the Depositor may instruct
the Trustee to file a Form 15, in which case the Trustee shall file a Form 15
within 15 days following the receipt of such instructions from the Depositor,
whereupon the Trustee's responsibilities under this Section 3.20(a) shall end.
The Trustee shall, at the written direction of the Depositor, solicit any
and all proxies of the Certificateholders whenever such proxies are required to
be solicited pursuant to the Exchange Act.
(b) Prior to the filing on behalf of the Trust Fund, and effectiveness, of
a Form 15, the Master Servicer shall promptly prepare and provide to the Trustee
and the Special Servicer a report (each, a "Special Event Report") reporting (i)
any notice from a Borrower or insurance company, or any knowledge otherwise
obtained, regarding an upcoming voluntary or involuntary prepayment (including
that resulting from a casualty or condemnation) or defeasance of all or part of
the related Mortgage Loan (provided that a request by a Borrower or other Person
for a quotation of the amount necessary to satisfy all obligations with respect
to a Mortgage Loan shall not, in and of itself, be deemed to be such notice);
(ii) any imminent or actual monetary default or other default on a Mortgage Loan
the results of which the Master Servicer, after consultation with the Special
Servicer, reasonably believes is likely to result in the acceleration of the
indebtedness due under such Mortgage Loan; (iii) the results of any property
inspection of which the Master Servicer has knowledge and which has revealed any
material damage or deterioration or the presence of any environmental condition
with respect to any Mortgaged Property; (iv) any notice from a Borrower, or any
knowledge otherwise obtained, regarding any litigation involving such Borrower
or any related Mortgaged Property which the Master Servicer reasonably believes
is likely to have an adverse effect on the Mortgaged Property or the ability of
such Borrower to pay the amounts due under the related Mortgage Loan; (v) any
notice received from a Borrower, Manager or Managers or tenant of a Mortgaged
Property, or any knowledge otherwise obtained, regarding the material default of
such tenant under the terms of its lease or early termination by either the
tenant or the Borrower of such lease, the bankruptcy of such tenant or its
direct or indirect parent, the loss of a license or permit relating to the
Mortgaged Property or other material adverse tenant activity; (vi) any
amendment, modification or waiver of a material provision of a Mortgage Loan of
which the Master Servicer has knowledge; and (vii) any event of which the Master
Servicer has actual knowledge (other than an event covered by clause (i)) which
would result in the release of any part of the Mortgaged Property; provided,
however, that in the event that the Master Servicer after consulting with the
Depositor and the Special Servicer determines in its good faith judgment that
any of the preceding items will not materially affect the interests of the
Certificateholders, the Master Servicer shall omit such item from the reporting
obligation described above.
With respect to any Specially Serviced Mortgage Loan or any REO Property,
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 other known event with respect to a Mortgage Loan or REO
Property that the Master Servicer or the Special Servicer, respectively,
determines would have a material adverse effect on such Mortgage Loan or REO
Property, which notice shall include an explanation as to the reason for such
material adverse effect.
(c) The Master Servicer or Special Servicer, as applicable, shall from time
to time contact the Borrowers regarding the delivery of financial information
required by the Loan Documents commencing at least 15 days prior to the date on
which each Borrower is obligated to provide the Master Servicer or Special
Servicer, as applicable, with quarterly and annual financial statements or
reports so that such statements and reports will be delivered to the Master
Servicer in a timely fashion. The Master Servicer or Special Servicer, as
applicable, will cause such information to be provided to the Trustee in such
format as the Trustee may reasonably request to enable the Trustee to comply
with the Exchange Act reporting requirements specifically set forth in this
Section 3.20. Promptly following the end of each calendar quarter and the end of
each calendar year, the Master Servicer shall prepare a Summary Report in the
form of Exhibit H based on information provided to the Master Servicer by the
Borrowers without modification, interpretation or analysis (except that the
Master Servicer will use its best efforts to isolate management fees and funded
reserves from Borrower reported expenses, if necessary). The Master Servicer
shall deliver a copy of each Summary Report to the Trustee and the Special
Servicer. None of the Master Servicer, the Special Servicer and the Trustee
shall be responsible for the completeness or accuracy of such information
provided by the Borrowers (except that the Master Servicer will use its best
efforts to correct patent errors).
(d) The Master Servicer shall, in accordance with such reasonable rules and
procedures as it may adopt (which may include the requirement that an agreement
that provides that such information shall be used solely for purposes of
evaluating the investment characteristics of the Certificates be executed to the
extent the Master Servicer deems such action to be necessary or appropriate),
also make available any additional information relating to the Mortgage Loans,
the Mortgaged Properties or the Borrowers, for review by the Depositor, the
Rating Agencies, the Certificateholders, the Special Servicer and any other
Persons to whom the Master Servicer believes such disclosure is appropriate, in
each case except to the extent doing so is prohibited by applicable law or by
any related Loan Documents related to a Mortgage Loan. Consistent with the
foregoing, the Master Servicer may, at its discretion, at the request of any of
the Depositor, the Rating Agencies, the Trustee or any Certificateholder, but is
not required to, prepare from information delivered by the Borrowers pursuant to
any of the Loan Documents one or more reports in addition to the reports and
information that the Master Servicer is required to furnish pursuant to this
Agreement and may charge for such service a fee to any Person (other than the
Rating Agencies) requesting a copy of any such additional report. The Master
Servicer may, but is not required to, make information which is otherwise
available to the public available on the Internet.
(e) The Trustee shall provide or make available a copy of each Summary
Report and Annual Compliance Report to each Rating Agency and, upon request, to
each Certificateholder and Beneficial Owner (provided that each
Certificateholder and Beneficial Owner may only make one request per month and
will be required to pay any expenses incurred by the Trustee in connection with
the provision of such information). The Trustee shall also deliver a copy of
each Special Event Report to each Rating Agency, Certificateholder and, if
known, Beneficial Owner within one Business Day of receipt. The Trustee shall so
deliver the foregoing information and reports and shall file such Summary Report
and Annual Compliance Report annually on Form 10-K and shall file such Special
Event Reports on Form 8-K promptly upon the occurrence of the applicable event,
in each case unless the Trust Fund is no longer filing Exchange Act Reports. The
Trustee shall also make available at its offices primarily responsible for
administration of the Trust Fund, during normal business hours, or send to the
requesting party at the expense of each such requesting party (other than the
Rating Agencies) for review by the Depositor, the Rating Agencies, any
Certificateholder, any Person identified to the reasonable satisfaction of the
Trustee by a Certificateholder as a prospective transferee of a Certificate and
any other Persons to whom the Trustee believes such disclosure is appropriate,
the following items: (i) this Agreement, (ii) all Monthly Distribution
Statements, (iii) all Annual Compliance Reports, (iv) all Summary Reports and
(v) all Special Event Reports.
The Master Servicer and the Special Servicer shall, in accordance with such
reasonable rules and procedures as each may adopt (which may include the
requirement that an agreement that provides that such information shall be used
solely for purposes of evaluating the investment characteristics of the
Certificates be executed to the extent the Master Servicer or the Special
Servicer, as applicable, deems such action to be necessary or appropriate), each
make available at its offices during normal business hours, or send to the
requesting party at the expense of each such requesting party (other than the
Rating Agencies) for review by the Depositor, the Trustee, the Rating Agencies,
any Certificateholder, any Person identified to the Master Servicer or the
Special Servicer, as applicable, by a Certificateholder as a prospective
transferee of a Certificate and any other Persons to whom the Master Servicer or
the Special Servicer, as applicable, believes such disclosure to be appropriate,
in each case except to the extent doing so is prohibited by applicable law or by
any related Loan Documents related to a Mortgage Loan, the following items: (i)
all financial statements, occupancy information, rent rolls and similar
information received by the Master Servicer or the Special Servicer, as
applicable, from each Borrower, (ii) the inspection reports prepared by or on
behalf of the Master Servicer or the Special Servicer, as applicable, in
connection with the property inspections pursuant to Section 3.19, (iii) any and
all modifications, waivers and amendments of the terms of a Mortgage Loan
entered into by the Master Servicer or the Special Servicer, as applicable, and
(iv) any and all officer's certificates and other evidence delivered to the
Trustee and the Depositor to support the Master Servicer's determination that
any Advance was, or if made would be, a Nonrecoverable Advance. The Master
Servicer or the Special Servicer may require that such party execute a
reasonable confidentiality agreement customary in the industry (and approved by
the Depositor) with respect to such information.
Copies of any and all of the foregoing items shall be available from the
Master Servicer or the Special Servicer, as applicable, or the Trustee, as
applicable, upon request at the requesting party's expense.
(f) The Depositor shall designate, and pay the expenses of, a financial
printer or other entity (which may be the Trustee) to prepare the materials
required to be filed pursuant to this Section 3.20 for filing via the EDGAR
system, and the Master Servicer and Special Servicer shall each cooperate fully
with such entity and the Master Servicer and the Special Servicer shall provide
the information required hereunder with respect to the Mortgage Loans, to the
extent made available by the related Borrowers, in a timely manner in order to
allow the Trustee to file such materials at the times required hereunder. In the
event the Trustee does not receive in electronic format Borrower information it
receives in hard copy format within two Business Days after it receives the
information in hard copy, the Trustee shall promptly notify the Depositor by
telephone or by facsimile transmission and shall have no obligation to file such
information pursuant to this Section 3.20 until it receives such information in
an EDGAR-compatible electronic format.
(g) Notwithstanding any other provision of this Section 3.20, at least
three Business Days prior to the date upon which any materials are required to
be filed with the Commission pursuant to the terms hereof, the Trustee shall, to
the extent it has received the necessary information from the Master Servicer or
Special Servicer, as appropriate, provide a copy of such filing, in hard copy
form (or such electronic format acceptable to the Depositor), to the Depositor
(with a copy to the Underwriter). The Depositor shall review such filing and
make any necessary corrections to such filing or direct the Trustee not to make
such filing prior to the date such materials are required to be filed pursuant
to the terms hereof.
(h) The Trustee shall indemnify and hold the Depositor harmless against any
loss, liability or expense incurred as the direct result of the Trustee's
negligent failure to file any Exchange Act Report specifically identified in
this Section 3.20 or in writing by the Depositor in the form and at the time
required pursuant to the terms of this Section 3.20; provided that any failure
on the part of the Master Servicer, the Special Servicer or the Depositor to
timely provide the Trustee in the correct form the information required by the
Trustee to file such Exchange Act Reports shall not constitute negligence on the
part of the Trustee. Furthermore, the Trustee shall have no liability with
regards to the accuracy of the information included in such Exchange Act
Reports.
SECTION 3.21. Lock-Box Accounts, Cash Collateral Accounts, Escrow
Accounts and Reserve Accounts.
The Master Servicer shall administer each Lock-Box Account, Cash Collateral
Account, Escrow Account and Reserve Account in accordance with the related
Mortgage or Loan Agreement, Cash Collateral Account Agreement or Lock-Box
Agreement, if any, and administer any letters of credit pursuant to the related
letter of credit agreements and the Loan Documents.
SECTION 3.22. Property Advances.
(a) The Master Servicer (or, to the extent provided in Section 3.22(b), the
Trustee or, to the extent specifically provided for in this Agreement, the
Special Servicer) shall make any Property Advances as and to the extent
otherwise required pursuant to the terms hereof.
Any Property Advance required to be made by the Special Servicer in
accordance with the terms of this Agreement shall, at the Special Servicer's
option, either (i) be paid by the Master Servicer upon the request of the
Special Servicer or (ii) shall be made by the Special Servicer who shall be
reimbursed by the Master Servicer on a monthly basis, and in each case such
payments and reimbursements by the Master Servicer shall be treated for all
purposes hereunder as a Property Advance. The Special Servicer shall submit not
more than one such request in each calendar month unless the request relates to
an extraordinary expense. In the event that the Master Servicer fails to pay or
reimburse the Special Servicer for any Property Advance made by the Special
Servicer the Trustee shall reimburse the Special Servicer for such Property
Advance in the same manner as all other Property Advances.
For purposes of distributions to Certificateholders and compensation to the
Master Servicer, Special Servicer or Trustee, Property Advances shall not be
considered to increase the principal balance of any Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so provide.
(b) The Master Servicer shall notify the Trustee, and the Special Servicer
shall notify the Master Servicer and the Trustee, in writing promptly upon, and
in any event within one Business Day after, becoming aware that it will be
unable to make any Property Advance required to be made pursuant to the terms
hereof, including Master Servicer's reimbursement of a Property Advance made by
the Special Servicer, and in connection therewith, shall set forth in such
notice the amount of such Property Advance, the Person to whom it will be paid,
and the circumstances and purpose of such Property Advance, and shall set forth
therein information and instructions for the payment of such Property Advance,
and, on the date specified in such notice for the payment of such Property
Advance, or, if the date for payment has passed or if no such date is specified,
then within five Business Days following such notice, the Trustee (or with
respect to a Property Advance required to be made by the Special Servicer, the
Master Servicer, and if the Master Servicer so fails, the Trustee), subject to
the provisions of Section 3.22(c), shall pay the amount of such Property Advance
in accordance with such information and instructions.
(c) Notwithstanding anything herein to the contrary, none of the Master
Servicer, the Trustee or the Special Servicer shall be obligated to make a
Property Advance as to any Mortgage Loan or REO Property if the Master Servicer,
the Trustee or the Special Servicer, as applicable, determines that such Advance
will be a Nonrecoverable Advance. The Trustee (or the Master Servicer with
respect to a Property Advance required to be made by the Special Servicer) shall
be entitled to rely, conclusively, on any determination by the Master Servicer
or Special Servicer, as applicable, that a Property Advance, if made, would be a
Nonrecoverable Advance. The Trustee and the Special Servicer, in determining
whether or not a Property Advance previously made is, or a proposed Property
Advance, if made, would be, a Nonrecoverable Advance shall be subject to the
standards applicable to the Master Servicer hereunder.
(d) The Master Servicer, the Special Servicer and/or the Trustee, as
applicable, shall be entitled to the reimbursement of Property Advances made by
any of them to the extent permitted pursuant to Section 3.06(ii) of this
Agreement, together with any related Advance Interest Amount in respect of such
Property Advances, and the Master Servicer and Special Servicer hereby covenant
and agree to promptly seek and effect the reimbursement of such Property
Advances from the related Borrowers to the extent permitted by applicable law
and the related Loan Documents.
SECTION 3.23. Appointment of Special Servicer.
(a) Midland Loan Services, Inc. is hereby appointed as the initial Special
Servicer to service each of the Mortgage Loans.
(b) The holders of a majority of the Percentage Interests of the Directing
Class shall be entitled to remove the Special Servicer with or without cause and
to appoint a successor Special Servicer entitled to the same servicing
compensation as its predecessor, provided that each Rating Agency confirms to
the Trustee in writing that such appointment, in and of itself, would not have
caused a downgrade, qualification or withdrawal of the then current ratings
assigned to any Class of Certificates. If there is a Special Servicer Event of
Default, the Special Servicer shall be removed and replaced pursuant to Sections
7.01(c) and 7.02. The Special Servicer may be removed by Certificateholders as
aforesaid with respect to only one or more Mortgage Loans and remain the Special
Servicer with respect to the remainder of the Mortgage Loans; provided that a
successor Special Servicer is appointed, in respect of the Mortgage Loans that
the Special Servicer would no longer be servicing, as provided in this Section
3.23. The Directing Class shall then appoint a successor Special Servicer in
accordance with this Section 3.23.
(c) The appointment of any such successor Special Servicer, shall not
relieve the Master Servicer or the Trustee of their respective obligations to
make Advances as set forth herein; provided, however, the initial Special
Servicer specified in Section 3.23(a) above shall not be liable for any actions
or any inaction of such successor Special Servicer. Any termination fee payable
to the terminated Special Servicer (other than the initial Special Servicer)
shall be paid by the Certificateholders so terminating the Special Servicer and
shall not in any event be an expense of the Trust Fund.
(d) No termination of the Special Servicer and appointment of a successor
Special Servicer shall be effective until (a) the successor Special Servicer has
assumed all of its responsibilities, duties and liabilities hereunder pursuant
to a writing satisfactory to the Trustee and each Rating Agency, as evidenced in
writing and the Trustee has received written confirmation from each Rating
Agency that such appointment would not cause any Rating Agency to qualify,
withdraw or downgrade any of its then current ratings on any Certificates and
(b) with respect to the initial Special Servicer only, if the predecessor
Special Servicer has been terminated pursuant to Section 3.23 without cause, the
predecessor Special Servicer has been paid or reimbursed for all unpaid Special
Servicing Compensation, all unreimbursed Advances with interest thereon at the
Advance Rate and reasonable expenses relating to the servicing transfer.
(e) Any successor Special Servicer shall be deemed to make the
representations and warranties provided for in Section 2.04(a) mutatis mutandis
as of the date of its succession.
(f) Notwithstanding any of the foregoing provisions, for the purposes of
determining the requisite Percentage Interests pursuant to Section 3.23(b), or
the requisite Voting Rights pursuant to Section 7.01(b) and Section 7.02, any
Certificate owned by a Person that is, or whose Affiliate is, also the lender of
any debt of any Affiliate of the Borrowers shall be deemed not to be outstanding
and the Percentage Interests or Voting Rights represented by such Certificate
shall not be taken into account in making such determination.
SECTION 3.24. Transfer of Servicing Between Master Servicer and
Special Servicer; Record Keeping.
(a) Upon determining that any Mortgage Loan has become a Specially Serviced
Mortgage Loan, the Master Servicer shall immediately give written notice thereof
to the Special Servicer and shall use its best efforts to provide the Special
Servicer with all information, documents (but excluding the original documents
constituting the Mortgage File) and records (including records stored
electronically on computer tapes, magnetic discs and the like) relating to the
Mortgage Loan and reasonably requested by the Special Servicer to enable it to
assume its duties hereunder with respect thereto without acting through a
sub-servicer, including, without limitation, financial statements, appraisals,
environmental and engineering reports, rent rolls and tenant estoppels. The
Master Servicer shall use its best efforts to comply with the preceding sentence
within five Business Days of the date such Mortgage Loan became a Specially
Serviced Mortgage Loan and in any event shall continue to act as Master Servicer
and administrator of such Mortgage Loan until the Special Servicer has commenced
the servicing of such Mortgage Loan, which shall occur upon the receipt by the
Special Servicer of the information, documents and records referred to in the
preceding sentence. With respect to each Mortgage Loan that becomes a Specially
Serviced Mortgage Loan, the Master Servicer shall instruct the related Borrower
to either (i) to continue to remit all payments in respect of such Mortgage Loan
to the Master Servicer or (ii) to remit all payments in respect of such Mortgage
Loan to the Special Servicer, provided that the payee in respect of such
payments shall remain the Master Servicer. The Special Servicer shall remit to
the Master Servicer any such payments received by it pursuant to the preceding
sentence within one Business Day of receipt. The Master Servicer shall forward
any notices it would otherwise send to the Borrower of a Specially Serviced
Mortgage Loan to the Special Servicer who shall send such notices to the related
Borrower.
Upon determining that no event has occurred and is continuing with respect
to a Mortgage Loan that causes such Mortgage Loan to be a Specially Serviced
Mortgage Loan, the Special Servicer shall immediately give notice thereof to the
Master Servicer and, upon giving such notice, such Mortgage Loan shall cease to
be a Specially Serviced Mortgage Loan in accordance with the first proviso of
the definition of Specially Serviced Mortgage Loans, the Special Servicer's
obligation to service such Mortgage Loan shall terminate and the obligations of
the Master Servicer to service and administer such Mortgage Loan as a Mortgage
Loan that is not a Specially Serviced Mortgage Loan shall resume. In addition,
if the related Borrower has been instructed, pursuant to the preceding
paragraph, to make payments to the Special Servicer, upon such determination,
the Special Servicer shall instruct the related Borrower to remit all payments
in respect of such Mortgage Loan directly to the Master Servicer.
(b) In servicing any Specially Serviced Mortgage Loan, the Special Servicer
shall provide to the Trustee originals of documents included within the
definition of "Mortgage File" for inclusion in the related Mortgage File (to the
extent such documents are in the possession of the Special Servicer) and copies
of any additional related Mortgage Loan information, including correspondence
with the related Borrower, and the Special Servicer shall promptly provide
copies of all of the foregoing to the Master Servicer as well as copies of any
analysis or internal review prepared by or for the benefit of the Special
Servicer.
(c) Not later than the Business Day preceding each date on which the Master
Servicer is required to furnish a report under Section 3.13(a) to the Trustee,
the Special Servicer shall deliver to the Master Servicer a written statement
describing, on a Mortgage Loan by Mortgage Loan basis, (i) the amount of all
payments on account of interest received on each Specially Serviced Mortgage
Loan, the amount of all payments on account of principal, including Principal
Prepayments, on each Specially Serviced Mortgage Loan, the amount of Net
Insurance Proceeds and Net Liquidation Proceeds received with respect to each
Specially Serviced Mortgage Loan, and the amount of net income or net loss, as
determined from management of a trade or business on, the furnishing or
rendering of a non-customary service to the tenants of, or the receipt of any
rental income that does not constitute Rents from Real Property with respect to
the REO Property relating to each applicable Specially Serviced Mortgage Loan,
in each case in accordance with Section 3.17 and (ii) such additional
information relating to the Specially Serviced Mortgage Loans as the Master
Servicer or Trustee reasonably requests to enable it to perform its duties under
this Agreement.
(d) Notwithstanding the provisions of the preceding subsection (c), the
Master Servicer shall maintain ongoing payment records with respect to each of
the Specially Serviced Mortgage Loans and shall provide the Special Servicer
with any information reasonably required by the Special Servicer to perform its
duties under this Agreement. The Special Servicer shall provide the Master
Servicer with any information reasonably required by the Master Servicer to
perform its duties under this Agreement.
SECTION 3.25. Limitations on and Authorizations of the Master Servicer
and Special Servicer with Respect to Specific Mortgage
Loans.
(a) With respect to any Mortgage Loan which permits the related Borrower,
with the consent or grant of a waiver by mortgagee, to incur additional
indebtedness or to amend or modify the related Borrower's organizational
documents, then the Master Servicer or the Special Servicer, as the case may be,
may only consent to either such action, or grant a waiver with respect thereto,
if the Master Servicer or the Special Servicer determines that such consent or
waiver is likely to result in a greater recovery on a present value basis
(discounted at the related Mortgage Rate) than would not consenting to such
action and the Master Servicer or the Special Servicer first obtains written
confirmation from each Rating Agency that such consent or grant of a waiver
would not, in and of itself, result in a downgrade, qualification or withdrawal
of any of the then current ratings assigned to the Certificates. Any such
consent or waiver shall also satisfy the criteria set forth in Section 3.09(b),
to the extent applicable. In addition, with respect to any such consent or
waiver granted by the Master Servicer which materially affects the terms of the
related Mortgage Loan, the Master Servicer shall first obtain the consent of the
Special Servicer to such action who may grant or withhold its consent in
accordance with the Servicing Standard and the terms of this Agreement.
(b) The Master Servicer shall receive bills from the Rating Agencies for
monitoring, review and surveillance of the Certificates and the Mortgage Loans
and shall pay such amounts in a timely manner. 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 best efforts to cause the related Borrower to pay any fee required by
the applicable Rating Agency for such confirmation. If the related Borrower does
not pay such fee, and the Mortgage Loan is a Specially Serviced Mortgage Loan,
such fee shall be paid by the Master Servicer or Special Servicer, as the case
may be, as a Property Advance and shall be borne by the Trust Fund. If the
Borrower does not pay such fee, and the Mortgage Loan is not a Specially
Serviced Mortgage Loan, the Depositor shall pay such fee. Notwithstanding the
reimbursement of any such amounts by the Trust Fund, the Master Servicer and the
Special Servicer shall, to the extent consistent with the Servicing Standard,
continue to endeavor to collect any such amounts from the related Borrower.
(c) Prior to taking any enforcement action with respect to a Mortgage Loan
secured in whole or in part by Mortgaged Properties located in a "one-action"
state, the Master Servicer or Special Servicer, as applicable, shall consult
with legal counsel admitted to practice in the relevant jurisdiction, the fees
and expenses of which shall be an expense of the Trust Fund.
(d) With respect to all Mortgage Loans that provide that the holder of the
related Note may apply the monthly payment against principal, interest and any
other sums due in such order as the holder shall determine, the Master Servicer
shall apply such Monthly Payment to interest (other than Deferred Interest or
Default Interest) under the related Mortgage Loan prior to application to
principal or any other sums due.
(e) With respect to each Mortgage Loan, neither the Master Servicer (nor
the Special Servicer (including in its capacity as a Certificateholder, if
applicable), shall take any enforcement action with respect to the payment of
Deferred Interest or principal in excess of the principal component of the
constant Monthly Payment, other than requests for collection, until the Maturity
Date of the related Mortgage Loan; provided, that the Master Servicer or Special
Servicer, as the case may be, may take action to enforce the Trust Fund's right
to apply excess cash flow to principal in accordance with the terms of the Loan
Documents.
(f) The obligations of the Master Servicer and Special Servicer set forth
in this Section 3.25 shall be subject to the operative documents with respect to
the related Mortgage Loan, and the failure or inability of the related Borrower
to comply with the Master Servicer's or the Special Servicer's direction shall
not be deemed to be an Event of Default of the Master Servicer or the Special
Servicer hereunder.
(g) The Master Servicer or the Special Servicer, as applicable, shall be
permitted, in its discretion, to waive all or any accrued Deferred 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 Deferred Interest, provided that the Master Servicer or the Special
Servicer, as applicable, determines (taking into account the value and revenues
of the related Mortgaged Property and the ability of the Borrower to pay the
Mortgage Loan (including such Deferred Interest)) that (1) in the absence of the
waiver of such Deferred Interest, there is a reasonable likelihood that the
Mortgage Loan will not be paid in full on the related Maturity Date and (2) the
waiver of the right to such accrued Deferred Interest is reasonably likely to
produce a larger (and not equivalent) payment in the aggregate to
Certificateholders on a present value basis than a refusal to waive the right to
such Deferred Interest. The Master Servicer shall have no liability to the Trust
Fund, the Certificateholders or any other person so long as such determination
is based on such criteria. In no event shall such waiver of such Deferred
Interest be effective prior to the date of actual prepayment in full (other than
such waived Deferred Interest), and such waiver shall in no event be effective
if such prepayment is not made.
(h) The Master Servicer and the Depositor shall cooperate and send written
notice to each Borrower and the related Manager or Managers and clearing bank or
banks sweeping monies to a Cash Collateral Account that, if applicable, the
Master Servicer has been appointed as the "Designee" or agent of the "Lender"
(or equivalent terminology) under any related Lock-Box Agreement and/or Cash
Collateral Account Agreement.
(i) For any Mortgage Loan with respect to which, under the terms of the
related Loan Documents, the mortgagee may, in its discretion, apply Insurance
Proceeds, condemnation awards or escrowed funds to the prepayment of such loan
prior to the expiration of the related Lock-out Period, the Master Servicer or
Special Servicer, as applicable, may only require such a prepayment if the
Master Servicer or Special Servicer, as applicable, has determined in accordance
with the Servicing Standard that such prepayment is in the best interests of the
Certificateholders.
(j) [reserved]
(k) With respect to each Mortgage Loan, the Master Servicer or the Special
Servicer, as applicable, shall give notice to the related Borrower of any
default or event of default under such Mortgage Loan, including without
limitation any default in the payment of interest or principal, immediately upon
receipt of knowledge thereof, in conformity with the notice provisions of such
Mortgage Loan, whether or not notice is required to be given thereunder.
(l) With respect to each Mortgage Loan, the giving of any consent or
approval to an investment of funds permitted with mortgagee consent or approval
pursuant to the terms of any Loan Document shall be conditioned on such
investments being made in Permitted Investments (as defined herein).
(m) Notwithstanding any other provision herein to the contrary (but subject
to Section 3.25(n)), the Trustee, the Master Servicer and the Special Servicer,
as applicable, shall be subject to the following limitations or authorizations,
as applicable, with respect to the specific Mortgage Loans identified below:
(i) The Trustee, the Master Servicer or the Special Servicer, as
applicable, shall not take any of the following actions unless (x) it has
received prior written confirmation from each Rating Agency that such
action, in and of itself, will not result in the qualification, downgrade
or withdrawal of the then current ratings assigned by such Rating Agency to
any of the Classes of Certificates or (y) the mortgagee is not given
discretion under the terms of the related Mortgage Loan:
(A) With respect to each Mortgage Loan, the giving of any
consent to the transfer of any interest in a related
Mortgaged Property or of any direct or indirect interest in
the related Borrower.
(B) With respect to each Mortgage Loan, the giving of any
consent to the termination of the related Manager or the
designation of any replacement Manager.
(C) With respect to any Mortgage Loan, the giving of consent to
any future encumbrances of the related Mortgaged Property,
except (i) for easements entered into in the ordinary course
of business and (ii) for the NorthTown Mall Loan in
connection with the development of the parcel of land on the
NorthTown Mall property owned by Mervyn's, which in the case
of clauses (i) and (ii) above, do not materially interfere
with the use of the related Mortgaged Property or its value.
(D) With respect to the NorthTown Mall Loan the giving of
consent to terminate or replace the Manager of the NorthTown
Mall Mortgaged Property or entering into a new management
agreement with respect to the NorthTown Mall Mortgaged
Property.
(E) With respect to both the Edens & Avant Pool I and the Edens
& Avant Pool II Mortgaged Properties, the giving of any
consent to enter into a new management agreement with any
new Manager.
(ii) Unless expressly provided otherwise in the related Loan
Documents, the "discount rate" used to calculate any yield maintenance
charge with respect to any Mortgage Loan shall be the Discount Rate.
(iii) With respect to any Mortgage Loan that requires the Borrower to
provide additional collateral upon a decline in the debt service coverage
ratio thereof, or permits the Borrower or Manager to provide additional
collateral in order to avoid a termination of the Manager as a result of a
decline in Debt Service Coverage Ratio, the Master Servicer shall monitor
such debt service coverage ratio based on the information provided by the
Borrower in accordance with the Loan Documents, and shall enforce such
obligation of the Borrower in accordance with the Servicing Standard. If
such additional collateral is provided in the form of a letter of credit,
or if any Escrow Account or Reserve Account contains a letter of credit, or
if a letter of credit is provided as additional collateral to avoid
termination of a Manager, the Master Servicer shall require that such
letter of credit be issued by a bank meeting the requirements of the
related Mortgage Loan, and if such requirements are based on credit rating,
shall monitor such rating in accordance with the Servicing Standard and
shall take such actions as are permitted by the related Mortgage Loan and
in accordance with the Servicing Standard to require replacement of and/or
draw down upon, such letter of credit if the issuer thereof is downgraded
below the required rating level or its rating is qualified or withdrawn.
(iv) With respect to any Mortgage Loan that permits the Borrower to
provide additional collateral to avoid termination of the related Manager
upon a decline in debt service coverage ratio, if the Borrower so elects to
provide such collateral, the Master Servicer shall continue to monitor such
debt service coverage ratio based on the information provided by the
Borrower in accordance with the Loan Documents and enforce the obligation
of the Borrower to provide and increase the amount of such collateral in
accordance with the Servicing Standard.
(v) With respect to the Crystal Park IV Loan, the Master Servicer or
the Special Servicer, as applicable, shall give notice of any default or
event of default under either such Mortgage Loan to the related ground
lessor immediately upon knowing of such default or event of default, and in
no event later than the giving of notice to the related Borrower as
required by Section 3.25(k). Such notice to the ground lessor shall be
given both by certified mail, return receipt requested, and by a nationally
recognized overnight courier, with acknowledgment of receipt required.
(n) Notwithstanding any of the other provisions of this Section 3.25, the
Master Servicer shall only take such actions that are required under this
Section 3.25, to the extent that such actions are not expressly inconsistent
with the terms of the related Loan Documents.
(o) To the extent that the Master Servicer is provided with discretion
under the Loan Documents to select insurance or to consent to insurance
coverage, the Master Servicer shall, upon expiration of any policy in place as
of the Cut-Off Date or to the extent the conditions set forth in the last
paragraph of Section 3.08(a) are no longer satisfied, select or consent to
insurers which satisfy the definition of "Qualified Insurer".
(p) With respect to each Mortgage Loan having an Effective Maturity Date,
if the related Loan Documents give the mortgagee the right to cause the
termination and replacement of the related Manager as a result of the Mortgage
Loan not being prepaid by the Effective Maturity Date or by a certain specified
date after the Effective Maturity Date, the Master Servicer or the Special
Servicer shall not exercise such right solely by virtue of the fact that the
Mortgage Loan has not been prepaid by the Effective Maturity Date or by such
specified date thereafter.
SECTION 3.26. Modifications.
(a) During the term of a Mortgage Loan, the Special Servicer, may,
consistent with the Servicing Standard, agree to modify a Specially Serviced
Mortgage Loan to reduce the amount of principal (but, except as provided in this
Section 3.26, not interest) payable monthly on such Mortgage Loan, provided that
(i) a material default in respect of payment on such Mortgage Loan has occurred
or, in the Special Servicer's reasonable and good faith judgment, a default in
respect of payment on such Mortgage Loan is reasonably foreseeable, and such
modification is reasonably likely to produce a greater recovery to
Certificateholders, on a net present value basis, than would liquidation; (ii)
the Special Servicer terminates the related Manager (unless the Special Servicer
determines that retaining such manager is conducive to maintaining the value of
the related Mortgaged Properties); and (iii) the Special Servicer may only agree
to reductions of monthly payments of principal lasting a period of no more than
twelve consecutive months and, in the aggregate, to no more than three
reductions of twelve months or less each; provided, however, Certificateholders
representing greater than 66-2/3% of all Voting Rights may direct the Special
Servicer in writing not to agree to any such modification. The Special Servicer
shall promptly provide a copy of such proposed modification to the Master
Servicer, the Rating Agencies and the Trustee. The Trustee shall, within two
Business Days of receipt of such notice, notify, in writing, all of the
Certificateholders that have Voting Rights of such proposed modification. For
purposes of determining whether Certificateholders representing 66-2/3% of all
Voting Rights have directed the Special Servicer not to agree to such
modification, each Certificateholder shall have 15 days following the date of
the Trustee's notice to respond to such notice, and any Certificateholder that
has not responded within such time period shall be deemed to have consented to
such modification. Each Certificateholder shall be deemed to have responded at
the time of receipt of such response by the Trustee.
Additionally, the Special Servicer may, consistent with the Servicing
Standard, agree to any modification, waiver or amendment of any term or forgive
or defer interest on and principal of, and/or add collateral for, any Mortgage
Loan with the consent of the Directing Class, subject, however, to each of the
following limitations, conditions and restrictions: (a) a material default in
respect of such Mortgage Loan has occurred or, in the Special Servicer's
reasonable and good faith judgment, a default in respect of payment on such
Mortgage Loan is reasonably foreseeable, and such modification, waiver,
amendment or other action is reasonably likely to produce a greater recovery to
Certificateholders, on a net present value basis, than would liquidation; (b) no
reduction in the scheduled monthly payment of interest on any Mortgage Loan as a
result of such modification, waiver or amendment may result in an Interest
Shortfall to any Class other than the Directing Class, determined as of the date
of such modification, waiver or amendment; (c) any reduction in the scheduled
monthly payment of principal and/or interest on any Mortgage Loan must require
that all cash flow on all related Mortgaged Properties in excess of amounts
required to operate and maintain such Mortgaged Properties be applied to
payments of principal and interest on such Mortgage Loan; (d) the Special
Servicer may only agree to reductions of principal and/or interest lasting a
period of no more than twelve consecutive months and, in the aggregate, to no
more than three periods of twelve months or less each; (e) the Special Servicer
may not reduce any Prepayment Premium or Lock-out Period; (f) the Special
Servicer may not at any time forgive principal of a Mortgage Loan to the extent
that the amount forgiven, together with all amounts of principal previously
forgiven pursuant to this paragraph would be in excess of (i) the Certificate
Principal Amount of the Directing Class less the sum of (ii) the aggregate
amount of Appraisal Reduction Amounts then outstanding and (iii) the aggregate
amount of Interest Shortfalls then outstanding (other than with respect to the
Directing Class with respect to Interest Shortfalls); (g) the Special Servicer
shall not permit any Borrower to add any real property collateral unless the
Special Servicer (i) has first determined in accordance with the Servicing
Standard, based upon an environmental assessment prepared by an Independent
Person who regularly conducts environmental assessments, at the expense of the
Borrower, that such additional real property collateral is in compliance with
applicable environmental laws and regulations and that there are no
circumstances or conditions present with respect to such new collateral relating
to the use, management or disposal of any Hazardous Materials for which
investigation, testing, monitoring, containment, clean-up or remediation would
be required under any then applicable environmental laws and/or regulations and
(ii) has received confirmation from each Rating Agency that such action will not
result in the downgrade, qualification or withdrawal of the ratings of the
Certificates; and (h) no Mortgage Loan may be extended past the date occurring
two years immediately prior to the Rated Final Distribution Date or beyond the
date that is ten years prior to the expiration of any ground lease with respect
to a Mortgage Loan. Notwithstanding the foregoing, the Trustee shall promptly
upon request provide the Special Servicer with such information as is in its
possession and as is reasonably necessary to enable the Special Servicer to make
the determinations required by clauses (b) and (f) above. The Certificateholders
of the Directing Class will be required to identify themselves to the Trustee
and the Special Servicer (who may rely on such identification absent any
contrary instructions from the Trustee). Notwithstanding anything else to the
contrary in this Section 3.26(a), the Special Servicer will not be required to
act contrary to the Servicing Standard. For the purposes of determining the
Percentage Interest of the Directing Class, the Certificates held by any
Certificateholder that holds, or whose Affiliate is, also the lender of any debt
of any Affiliate of the Borrowers that is related to the Mortgage Loan that is
the subject of such consent, shall not be taken into consideration.
(b) Notwithstanding Section 3.26(a), the Master Servicer or the Special
Servicer, as applicable, shall be permitted to modify, waive or amend any term
of a Mortgage Loan that is not in default or as to which default is not
reasonably foreseeable, but only if such modification, waiver or amendment (i)
either would not be "significant" as such term is defined in Treasury
Regulations Section 1.860G-2(b)(3), as determined by the Master Servicer or
Special Servicer (and the Master Servicer or Special Servicer may rely on an
Opinion of Counsel in making such determination) or occurs within three months
of the Startup Day; (ii) would be in accordance with the Servicing Standard and
(iii) would not adversely affect in any material respect the interest of any
Certificateholder not consenting thereto. The consent thereto of the majority of
Percentage Interests of each Class of Certificates affected thereby or written
confirmation from each Rating Agency that such modification, waiver or amendment
will not result in a qualification, withdrawal or downgrading of the then
current ratings assigned to the Certificates shall not be required but shall be
conclusive evidence, which may be relied upon by the Master Servicer or the
Special Servicer, as applicable, that such modification, waiver or amendment
would not adversely affect in any material respect the interest of any
Certificateholder not consenting thereto.
Prior to entering into any material modification, waiver or amendment
pursuant to this Section 3.26(b), the Master Servicer shall first provide to the
Special Servicer a copy of its recommendation and the materials upon which such
recommendation is based and, subject to the requirements of the previous
paragraph, shall not take such action unless it has received the written consent
of the Special Servicer, which consent shall be granted or denied by the Special
Servicer within five Business Days (or, upon request of the Special Servicer,
such reasonably extended period) after the Special Servicer's receipt of all
information reasonably requested by the Special Servicer with respect to such
consent request. The Special Servicer's consent shall be given or withheld in
accordance with the Servicing Standard.
(c) The Master Servicer or Special Servicer, as applicable, shall provide
copies of any modifications, waivers or amendments pursuant to this Section 3.26
to each Rating Agency, to the Trustee and to the Depositor.
SECTION 3.27. Interest Reserve Account.
(a) On each Distribution Date relating to any Interest Accrual Period
ending in any February and on any Distribution Date relating to any Interest
Accrual Period ending in any January which occurs in a year which is not a leap
year, the Trustee shall deposit from amounts remitted to the Trustee by the
Master Servicer pursuant to Section 3.06(i) (based on information provided by
the Master Servicer or Special Servicer), in respect of the Interest Reserve
Loans, into the Interest Reserve Account, an amount equal to one day's interest
(assuming a 360-day year) on the Stated Principal Balance of the Interest
Reserve Loans as of the Due Date occurring in the month preceding the month in
which such Master Servicer Remittance Date occurs at the related Mortgage Rate,
to the extent a full Monthly Payment or P&I Advance is made and received in
respect thereof (all amounts so deposited in any consecutive January and
February, "Withheld Amounts").
(b) On each Distribution Date occurring in March, the Trustee shall
withdraw from the Interest Reserve Account an amount equal to the Withheld
Amounts from the preceding January and February, if any, and deposit such amount
into the Lower-Tier Distribution Account.
<PAGE>
ARTICLE IV
DISTRIBUTIONS TO CERTIFICATEHOLDERS
SECTION 4.01. Distributions.
(a) On each Master Servicer Remittance Date, to the extent of Available
Funds (except for the amounts referred to in clause (iii) of the definition of
Available Funds), amounts held in the Collection Account shall be withdrawn by
the Master Servicer and remitted to the Trustee for deposit in the Lower-Tier
Distribution Account. On each Distribution Date, the amount that has been so
transferred to the Lower-Tier Distribution Account from the Collection Account
shall be distributed by the Trustee on the Lower-Tier Regular Interests to the
Upper-Tier REMIC in accordance with the provisions set out below. Thereafter,
such amounts shall be considered to be held in the Upper-Tier Distribution
Account until distributed to the Certificateholders.
(i) Principal amounts, rates of interest and timing of payments of
principal and interest on each Class of Lower-Tier Regular Interest will be
identical to such amounts, rates and timing on the corresponding Class of
Related Certificates, except that, solely for this purpose, all calculations of
interest with respect to the Related Lower-Tier Regular Interests shall be made
as though the Class A-1, Class A-2, Class B, Class C and Class D Certificate
Pass-Through Rates were equal to the WAC Rate and as though the Class X Notional
Amount were zero at all times, such that the rates of interest and timing of
interest payments on each Related Lower-Tier Regular Interest represent the
aggregate of the corresponding amounts on each Class of Related Certificates and
its related Component of the Class X Certificates. The Certificate Principal
Amount of each Class of Lower-Tier Regular Interests shall at all times be equal
to the Certificate Principal Amount of its Related Class of Certificates, and
the interest rate of each Class of Lower-Tier Regular Interests shall be the WAC
Rate.
(ii) Any Prepayment Premium that is to be paid to a Class of Regular
Certificates, other than the Class X Certificates, shall be paid to the Related
Lower-Tier Regular Interest, and the balance of any such Prepayment Premium, so
long as any one or more of the Class LA-1, Class LA-2, Class LB, Class LC, Class
LD, Class LE or Class LF Interests remain outstanding, shall be paid to such
Lower-Tier Regular Interests, pro rata, in proportion to the Interest
Distribution Amount for the Related Certificates for such Distribution Date.
(iii) Realized Losses and other amounts specified in Section 4.01(f) shall
be allocated to, and shall reduce the Certificate Principal Amount of, each
Class of Lower-Tier Regular Interests without distribution on any Distribution
Date, to the extent that the Certificate Principal Amount of such Class exceeds
the Certificate Principal Amount of the corresponding Class of Related
Certificates because of Realized Losses and other amounts specified in Section
4.01(f) allocated to such Related Certificates. Amounts recovered in respect of
any amounts previously written off as Realized Losses and other amounts
specified in Section 4.01(f) will be distributed on the Related Lower-Tier
Regular Interests, to the extent that amounts recovered in respect of any
amounts previously written off as Realized Losses and other amounts specified in
Section 4.01(f) are distributed on the corresponding Related Certificates plus
interest thereon to the extent paid to the respective Related Certificates.
(iv) On each Distribution Date, any amounts remaining in the Lower-Tier
Distribution Account after the distributions set forth above in this Section
4.01(a)(i)-(iii) shall be distributed to the Class LR Certificates.
(b) On each Distribution Date prior to the Cross-over Date, Holders of each
Class of Certificates (other than the Class Q and Class LR Certificates) shall
receive distributions from amounts on deposit in the Upper-Tier Distribution
Account in respect of interest and principal, to the extent of Available Funds,
in the amounts and in the order of priority set forth below:
First, pro rata, in respect of interest, to the Class A-1, Class A-2, and
Class X Certificates, up to an aggregate amount equal to, and pro rata as among
such Classes in accordance with, the Interest Distribution Amounts of such
Classes;
Second, to the Class A Certificates, in reduction of their respective
Certificate Principal Amounts in the following order: first, to the Class A-1
Certificates, and second, to the Class A-2 Certificates, in each case up to an
amount equal to the lesser of (i) the Certificate Principal Amount thereof and
(ii) the Principal Distribution Amount for such Distribution Date;
Third, to the Class B Certificates, in respect of interest, up to an amount
equal to the Interest Distribution Amount of such Class;
Fourth, to the Class B Certificates, in reduction of the Certificate
Principal Amount thereof, up to an amount equal to the Principal Distribution
Amount less the portion of the Principal Distribution Amount distributed
pursuant to all prior clauses, until the Certificate Principal Amount thereof is
reduced to zero;
Fifth, to the Class B Certificates, an amount equal to the aggregate of
unreimbursed Realized Losses previously allocated to such Class, plus interest
thereon at the Pass-Through Rate for such Class compounded monthly from the date
the related Realized Loss was allocated to such Class;
Sixth, to the Class C Certificates, in respect of interest, up to an amount
equal to the Interest Distribution Amount of such Class;
Seventh, to the Class C Certificates, in reduction of the Certificate
Principal Amount thereof, up to an amount equal to the Principal Distribution
Amount less the portion of the Principal Distribution Amount distributed
pursuant to all prior clauses, until the Certificate Principal Amount thereof is
reduced to zero;
Eighth, to the Class C Certificates, an amount equal to the aggregate of
unreimbursed Realized Losses previously allocated to such Class, plus interest
thereon at the Pass-Through Rate for such Class compounded monthly from the date
the related Realized Loss was allocated to such Class;
Ninth, to the Class D Certificates, in respect of interest, up to an amount
equal to the Interest Distribution Amount of such Class;
Tenth, to the Class D Certificates, in reduction of the Certificate
Principal Amount thereof, up to an amount equal to the Principal Distribution
Amount less the portion of the Principal Distribution Amount distributed
pursuant to all prior clauses, until the Certificate Principal Amount thereof is
reduced to zero;
Eleventh, to the Class D Certificates, an amount equal to the aggregate of
unreimbursed Realized Losses previously allocated to such Class, plus interest
thereon at the Pass-Through Rate for such Class compounded monthly from the date
the related Realized Loss was allocated to such Class;
Twelfth, to the Class E Certificates, in respect of interest, up to an
amount equal to the Interest Distribution Amount of such Class;
Thirteenth, to the Class E Certificates, in reduction of the Certificate
Principal Amount thereof, up to an amount equal to the Principal Distribution
Amount less the portion of the Principal Distribution Amount distributed
pursuant to all prior clauses, until the Certificate Principal Amount thereof is
reduced to zero;
Fourteenth, to the Class E Certificates, an amount equal to the aggregate
of unreimbursed Realized Losses previously allocated to such Class, plus
interest thereon at the Pass-Through Rate for such Class compounded monthly from
the date the related Realized Loss was allocated to such Class;
Fifteenth, to the Class F Certificates, in respect of interest, up to an
amount equal to the Interest Distribution Amount of such Class;
Sixteenth, to the Class F Certificates, in reduction of the Certificate
Principal Amount thereof, up to an amount equal to the Principal Distribution
Amount less the portion of the Principal Distribution Amount distributed
pursuant to all prior clauses, until the Certificate Principal Amount thereof is
reduced to zero;
Seventeenth, to the Class F Certificates, an amount equal to the aggregate
of unreimbursed Realized Losses previously allocated to such Class, plus
interest thereon at the Pass-Through Rate for such Class compounded monthly from
the date the related Realized Loss was allocated to such Class;
Eighteenth, to the Class R Certificates, any amounts remaining in the
Upper-Tier Distribution Account.
On each Distribution Date occurring on and after the Cross-over Date,
regardless of the allocation of principal payments described in priority Second
above, an amount equal to the aggregate of the Principal Distribution Amounts
will be distributed, first, to the Class A-1 and Class A-2 Certificates, pro
rata, based on their respective Certificate Principal Amounts, in reduction of
their respective Certificate Principal Amounts, until the Certificate Principal
Amount of each such Class is reduced to zero, and, second, to the Class A-1 and
Class A-2 Certificates for unreimbursed amounts of Realized Losses previously
allocated to such Classes, pro rata, in accordance with the amount of such
unreimbursed Realized Losses so allocated, plus interest thereon at the
Pass-Through Rate for such Class compounded monthly from the date the Realized
Loss was allocated to such Class.
All references to "pro rata" in the preceding clauses with respect to
interest and Interest Shortfalls shall mean pro rata based on the amount
distributable pursuant to such clauses, with respect to distributions of
principal other than in reimbursement of Realized Losses shall mean pro rata
based on Certificate Principal Amount, and with respect to distributions in
reimbursement of Realized Losses shall mean pro rata based on the amount of
unreimbursed Realized Losses previously allocated to the applicable Classes.
(c) On any Distribution Date, Prepayment Premiums collected during the
related Collection Period shall be distributed to the Holders of the Classes of
Certificates as follows:
(i) If any Class A Certificate remains outstanding on such Distribution
Date, to Holders of the Classes of Principal Balance Certificates entitled to
distributions of principal on such Distribution Date in an aggregate amount
(allocable among such Classes if more than one such Class remains outstanding,
as described below) equal, with respect to the applicable Prepayment Premium, to
the product of (a) the amount of such Prepayment Premium, multiplied by (b) a
fraction, expressed as a percentage, the numerator of which is equal to the
excess, if any, of the then current Pass-Through Rate applicable to the most
senior of such Classes of Principal Balance Certificates (or, in the case of
both classes of Class A Certificates remaining outstanding, the one with the
earliest payment priority), over the relevant Discount Rate, 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 on 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 required to be so distributed to the Holders of
such Principal Balance Certificates shall be distributed to the Class X
Certificates; and
(ii) If no Class A Certificate remains outstanding on such Distribution
Date, to Holders of the Class X Certificates, an amount equal to, with respect
to the applicable Prepayment Premium, the product of such Prepayment Premium,
multiplied by a fraction, the numerator of which is equal to the sum of the
Servicing Fee Rate and the Component Pass-Through Rate related to the Class of
Certificates with the earliest Class designation which has a Class Prepayment
Percentage greater than zero, and the denominator of which is the greater of (x)
the excess, if any, of the Mortgage Rate of the Mortgage Loan that prepaid over
the relevant Discount Rate, and (y) the sum of such Component Pass-Through Rate
and the Servicing Fee Rate. Any portion of such Prepayment Premium that is not
required to be so distributed to the Holders of the Class X Certificates shall
be distributed to the Holders of the Class B, Class C, Class D and Class E
Certificates in an amount with respect to each such Class equal to the product
of (a) the Class Prepayment Percentage with respect to the related Class of
Certificates for such Distribution Date and (b) the remaining portion of such
Prepayment Premium.
(d) On each Distribution Date the Trustee shall withdraw the amount of any
Net Default Interest received in the related Collection Period from the Class Q
Distribution Account and shall distribute such funds to the holders of the Class
Q Certificates.
(e) On each Distribution Date, any Deferred Interest received during the
related Collection Period with respect to any Mortgage Loan shall be distributed
to Holders of the Class B, Class C, Class D, Class E and Class F Certificates in
an amount, with respect to each such Class, equal to the product of (x) the
related Deferred Interest Distribution Percentage and (y) the aggregate amount
of any such Deferred Interest.
(f) The Certificate Principal Amount of each Class of Principal Balance
Certificates entitled to distributions of principal will be reduced without
distribution on any Distribution Date, as a write-off, to the extent of any
Realized Loss allocated to such Class on such Distribution Date. Any such
write-offs will be applied to such Classes of Principal Balance Certificates in
the following order, until each is reduced to zero; first, to the Class F
Certificates, second, to the Class E Certificates; third, to the Class D
Certificates; fourth; to the Class C Certificates; fifth, to the Class B
Certificates; and, finally, pro rata to the Class A-1 and Class A-2 Certificates
based on their respective Certificate Principal Amounts.
Shortfalls in Available Funds resulting from additional servicing
compensation other than the Servicing Fee, interest on Advances not covered by
Default Interest, Excess Prepayment Interest Shortfalls, Additional Trust Fund
Expenses, a reduction of the interest rate of a Mortgage Loan by a bankruptcy
court pursuant to a plan of reorganization or pursuant to any of its equitable
powers or other unanticipated or default-related expenses will be allocated to
each Class of Certificates in the same manner as Realized Losses.
(g) All amounts distributable, or reductions allocable on account of
Realized Losses, to a Class of Certificates pursuant to this Section 4.01 on
each Distribution Date shall be allocated pro rata among the outstanding
Certificates in each such Class based on their respective Percentage Interests.
Such distributions shall be made on each Distribution Date other than the
Termination Date to each Certificateholder of record on the related Record Date
(a) by wire transfer of immediately available funds to the account of such
Certificateholder at a bank or other entity located in the United States and
having appropriate facilities therefor, if such Certificateholder provides the
Trustee with wiring instructions no less than five Business Days prior to the
related Record Date, or otherwise (b) by check mailed to such Certificateholder.
The final distribution on each Certificate shall be made in like manner, but
only upon presentment and surrender of such Certificate at the office of the
Trustee or its agent (which may be the Paying Agent or the Certificate Registrar
acting as such agent) that is specified in the notice to Certificateholders of
such final distribution.
(h) Except as otherwise provided in Section 9.01 with respect to an
Anticipated Termination Date, the Trustee shall, no later than the fifteenth day
of the month in the month preceding the month in which the final distribution
with respect to any Class of Certificates is expected to be made, mail to each
Holder of such Class of Certificates, on such date a notice to the effect that:
(A) the Trustee reasonably expects based upon information
previously provided to it that the final distribution with
respect to such Class of Certificates will be made on such
Distribution Date, but only upon presentation and surrender
of such Certificates at the office of the Trustee therein
specified, and
(B) if such final distribution is made on such Distribution
Date, no interest shall accrue on such Certificate, or on
the Related Lower-Tier Regular Interests from and after such
Distribution Date;
provided, however, that the Class Q, Class R and Class LR Certificates shall
remain outstanding until there is no other Class of Certificates outstanding.
Any funds not distributed to any Holder or Holders of Certificates of such
Class on such Distribution Date because of the failure of such Holder or Holders
to tender their Certificates shall, on such date, be set aside and held in trust
for the benefit of the appropriate non-tendering Holder or Holders. If any
Certificates as to which notice has been given pursuant to this Section 4.01(h)
shall not have been surrendered for cancellation within six months after the
time specified in such notice, the Trustee shall mail a second notice to the
remaining non-tendering Certificateholders to surrender their Certificates for
cancellation to receive the final distribution with respect thereto. If within
one year after the second notice not all of such Certificates shall have been
surrendered for cancellation, the Trustee may, directly or through an agent,
take appropriate steps to contact the remaining non-tendering Certificateholders
concerning surrender of their Certificates. The costs and expenses of holding
such funds in trust and of contacting such Certificateholders shall be paid out
of such funds. If within two years after the second notice any such Certificates
shall not have been surrendered for cancellation, the Paying Agent shall pay to
the Trustee all amounts distributable to the Holders thereof, and the Trustee
shall thereafter hold such amounts for the benefit of such Holders until the
earlier of (i) its termination as Trustee hereunder and the transfer of such
amounts to a successor Trustee and (ii) the termination of the Trust Fund and
distribution of such amounts to the Class R Certificateholders. No interest
shall accrue or be payable to any Certificateholder on any amount held in trust
hereunder or by the Trustee as a result of such Certificateholder's failure to
surrender its Certificate(s) for final payment thereof in accordance with this
Section 4.01(h). Any funds not distributed on such Distribution Date shall be
set aside and held uninvested in trust for the benefit of Certificateholders not
presenting and surrendering their Certificates in the aforesaid manner.
(i) The Certificate Principal Amounts of the Class F, Class E, Class D,
Class C and Class B Certificates will be notionally reduced on any Distribution
Date for purposes of determining the Voting Rights of each Class of Certificates
to the extent of any Appraisal Reduction Amounts allocated to such Class with
respect to such Distribution Date. To the extent that the aggregate of the
Appraisal Reduction Amounts for any Distribution Date do exceed such Certificate
Principal Amount, such excess will be applied, subject to any reversal described
below, to notionally reduce the Certificate Principal Amounts of the next most
subordinate Class of Certificates on the next Distribution Date. Any such
reductions will be applied in the following order of priority first, to the
Class F Certificates; second, to the Class E Certificates; third, to the Class D
Certificates; fourth, to the Class C Certificates; and finally to the Class B
Certificates (provided in each case that no Certificate Balance in respect of
any such Class may be notionally reduced below zero).
SECTION 4.02. Statements to Certificateholders; Available Information;
Information Furnished to Financial Market Publisher.
(a) On each Distribution Date, the Trustee shall, based on information
provided by the Master Servicer or provided by the Special Servicer to the
Master Servicer (with respect to a Specially Serviced Mortgage Loan, an REO
Property or the servicing responsibilities of the Special Servicer set forth
herein including the Special Servicer's obligation to make Advances) and subject
to receipt thereof, prepare and make available, either in an electronic format
or by first-class mail, to each Holder of a Certificate, the Depositor, the
Paying Agent, the Master Servicer, the Special Servicer, the Rating Agencies and
up to three market reporting services designated by the Depositor, a statement
as to such distribution (a "Monthly Distribution Statement") setting forth the
information set forth on Exhibit I hereto, and including among other things, for
each Class, as applicable:
(i) the Principal Distribution Amount and the amount of
Available Funds allocable to principal included therein;
(ii) The Interest Distribution Amount distributable on such Class
and the amount of Available Funds allocable thereto,
together with any Interest Shortfall allocable to such
Class;
(iii)The amount of any P&I Advances by the Master Servicer or
the Trustee included in the amounts distributed to
Certificateholders not reimbursed since the previous
Distribution Date;
(iv) The initial Certificate Principal Balance or initial
Notional Amount, as applicable, of each Class, and the
Certificate Principal Amount or Notional Amount, as
applicable, of each Class after giving effect to the
distribution of amounts in respect of the Principal
Distribution Amount on such Distribution Date;
(v) Realized Losses (for such month and cumulative basis and on
a Mortgage Loan by Mortgage Loan basis) and other shortfalls
attributable to amounts specified in Section 4.01(f) and
their allocation to the Certificate Principal Amount of any
Class of Certificates;
(vi) The Stated Principal Balance of the Mortgage Loans as of the
Due Date immediately prior to such Distribution Date;
(vii)The number and aggregate principal balance of Mortgage
Loans (and the identity of each related Borrower) (A)
delinquent one month, (B) delinquent two months, (C)
delinquent three or more months, (D) as to which foreclosure
proceedings have been commenced and (E) that otherwise
constitute Specially Serviced Mortgage Loans, and, with
respect to each Specially Serviced Mortgage Loan, the amount
of Property Advances made during the related Collection
Period, the amount of the P&I Advance made with respect to
such Distribution Date, the aggregate amount of Property
Advances theretofore made that remain unreimbursed and the
aggregate amount of P&I Advances theretofore made that
remain unreimbursed;
(viii) With respect to any Mortgage Loan that became an REO
Property during the preceding calendar month, the principal
balance and appraised value (based on an Updated Appraisal,
if required under Section 3.10(a)) of such Mortgage Loan as
of the date it became an REO Mortgage Loan;
(ix) (A) For any REO Property sold during the related Collection
Period, the date on which the Special Servicer determined
that a Final Recovery Determination was made and the amount
of the proceeds of such sale deposited into the Collection
Account, (B) the aggregate amount of other revenues
collected by the Special Servicer with respect to each REO
Property during the related Collection Period and credited
to the Collection Account, in each case identifying such REO
Property by name and (C) the appraised value as determined
by the most recent Updated Appraisal (or annual letter
update thereof) of any REO Property, if required under
Section 3.10(a);
(x) The amount of the Servicing Fee, Trustee Fee and Special
Servicing Compensation paid with respect to such
Distribution Date;
(xi) (A) The amount of Prepayment Premiums, if any, received
during the related Collection Period, (B) the amount of
Default Interest received during the related Collection
Period and the Net Default Interest for such Distribution
Date and (C) the amount of Deferred Interest, if any,
received during the related Collection Period;
(xii)The outstanding principal balance and Repurchase Price of
any Mortgage Loan purchased or repurchased pursuant to
Sections 2.03(c), 3.18 or 9.01(c);
(xiii) The amount of Prepayment Interest Shortfalls with respect
to such Distribution Date;
(xiv) The CUSIP number for such Class of Certificates, if any;
(xv) The amount of negative amortization on the Mortgage Loans,
created by any modification;
(xvi)The Appraisal Reduction Amounts with respect to such
Distribution Date;
(xvii) A reference to any Special Event Report furnished to the
Trustee during the preceding calendar month, including
without limitation, any such report relating to anchor
tenants;
(xviii) Account reconciliations with respect to the immediately
preceding Distribution Date with respect to the Collection
Account (giving effect to P&I Advances, Property Advances,
Servicing Fees, Trustee Fees, additional servicing
compensation, Prepayment Premiums, Default Interest, Net
Default Interest, and Deferred Interest); and
(xix) other information reasonably requested by the Depositor.
In the case of information furnished pursuant to subclauses (i), (ii),
(iv), (v), and (xi) above, the amounts shall be expressed as a dollar amount in
the aggregate for all Certificates of each applicable Class, and for a
Certificate of each Class of Certificates having a denomination of $1,000
initial Certificate Principal Amount or Notional Amount.
Within a reasonable period of time after the end of each calendar year, the
Trustee shall furnish to each Person who at any time during the calendar year
was a Holder of a Certificate (except for a Class R or Class LR Certificate) a
statement containing the information set forth in subclauses (i) and (ii) above,
aggregated for such calendar year or applicable portion thereof during which
such Person was a Certificateholder. Such obligation of the Trustee shall be
deemed to have been satisfied to the extent that it provided substantially
comparable information pursuant to any requirements of the Code as from time to
time in force.
On each Distribution Date, the Trustee shall make available to each Holder
of a Class R or Class LR Certificate a copy of the reports forwarded to the
other Certificateholders on such Distribution Date and a statement setting forth
the amounts, if any, actually distributed with respect to the Class R or Class
LR Certificates on such Distribution Date. Such obligation of the Trustee shall
be deemed to have been satisfied to the extent that it provided substantially
comparable information pursuant to any requirements of the Code as from time to
time in force.
Within a reasonable period of time after the end of each calendar year, the
Trustee shall furnish to each Person who at any time during the calendar year
was a Holder of a Class R or Class LR Certificate a statement containing the
information provided pursuant to the previous paragraph aggregated for such
calendar year or applicable portion thereof during which such Person was a
Certificateholder. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that it provided substantially comparable information
pursuant to any requirements of the Code as from time to time in force.
(b) On or within two Business Days following each Distribution Date, the
Trustee shall make available to the Financial Market Publisher and the
Underwriter, using the format and media mutually agreed upon by the Trustee, the
Financial Market Publisher and the Underwriter, the following information
regarding each Mortgage Loan and any other information reasonably requested by
the Underwriter and available to the Trustee:
(i) the Loan Number;
(ii) each related Mortgage Rate; and
(iii) the principal balance as of such Distribution Date.
The Trustee will make available the Monthly Distribution Statement and
certain other information (including certain loan-level information with respect
to the Mortgage Loans and any prospectus or prospectus supplement relating to
the publicly-offered Certificates) through the Trustee's Internet Website,
electronic bulletin board and its fax-on-demand service. The Trustee's Internet
Website will initially be located at "www.securitieslink.net/cmbs". Upon request
by any Certificateholder, the Trustee shall mail the Monthly Distribution
Statement to such Certificateholder. The Trustee shall only be obligated to
deliver the statements, reports and information contemplated by Section 4.02(a)
and 4.02(b) to the extent it receives the necessary underlying information from
the Master Servicer or the Special Servicer and shall not be liable for any
failure to deliver any thereof on the prescribed due dates, to the extent caused
by failure to receive timely such underlying information and, if the Master
Servicer is not the Special Servicer, the Master Servicer shall not be liable
for any failure of the Special Servicer to provide such underlying information.
In connection with providing access to the Trustee's Internet Website or
electronic bulletin board, the Trustee may require registration and the
acceptance of a disclaimer. The Trustee shall not be liable for the
dissemination of information in accordance with this Agreement. Nothing herein
shall obligate the Trustee, the Master Servicer or the Special Servicer to
violate any applicable law or provision of any Loan Document prohibiting
disclosure of information with respect to any Borrower and the failure of the
Trustee, the Master Servicer or the Special Servicer to disseminate information
for such reason shall not be a breach hereof.
SECTION 4.03. Compliance with Withholding Requirements.
Notwithstanding any other provision of this Agreement, the Paying Agent
shall comply with all federal withholding requirements with respect to payments
to Certificateholders of interest or original issue discount that the Paying
Agent reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for any such withholding. The Paying
Agent agrees that it will not withhold with respect to payments of interest or
original issue discount in the case of a Certificateholder that is a Non-U.S.
Person that has furnished or caused to be furnished (i) an effective Form W-8 or
Form W-9 or an acceptable substitute form or a successor form and who is not a
"10-percent shareholder" within the meaning of Code Section 871(h)(3)(B) or a
"controlled foreign corporation" described in Code Section 881(c)(3)(C) with
respect to the Trust Fund or the Depositor, or (ii) an effective Form 4224 or an
acceptable substitute form or a successor form. In the event the Paying Agent or
its agent withholds any amount from interest or original issue discount payments
or advances thereof to any Certificateholder pursuant to federal withholding
requirements, the Paying Agent shall indicate the amount withheld to such
Certificateholder. Any amount so withheld shall be treated as having been
distributed to such Certificateholder for all purposes of this Agreement.
SECTION 4.04. REMIC Compliance.
(a) The parties intend that each of the Upper-Tier REMIC and the Lower-Tier
REMIC shall constitute, and that the affairs of each of the Upper-Tier REMIC and
the Lower-Tier REMIC shall be conducted so as to qualify it as, a "real estate
mortgage investment conduit" as defined in, and in accordance with, the REMIC
Provisions, and the provisions hereof shall be interpreted consistently with
this intention. In furtherance of such intention, the Trustee shall, to the
extent permitted by applicable law, act as agent, and is hereby appointed to act
as agent, of each of the Upper-Tier REMIC and the Lower-Tier REMIC and shall on
behalf of each of the Upper-Tier REMIC and the Lower-Tier REMIC: (i) prepare,
sign and file, or cause to be prepared and filed, all required Tax Returns for
each of the Upper-Tier REMIC and the Lower-Tier REMIC, using a calendar year as
the taxable year for each of the Upper-Tier REMIC and the Lower-Tier REMIC when
and as required by the REMIC Provisions and other applicable federal tax laws or
Applicable State and Local Tax Laws; (ii) make an election, on behalf of each of
the Upper-Tier REMIC and the Lower-Tier REMIC, to be treated as a REMIC on Form
1066 for its first taxable year, in accordance with the REMIC Provisions; (iii)
prepare and forward, or cause to be prepared and forwarded, to the
Certificateholders and the Internal Revenue Service and applicable state and
local tax authorities all information reports as and when required to be
provided to them in accordance with the REMIC Provisions of the Code and Section
4.07; (iv) if the filing or distribution of any documents of an administrative
nature not addressed in clauses (i) through (iii) of this Section 4.04(a) is
then required by the REMIC Provisions in order to maintain the status of the
Upper-Tier REMIC or the Lower-Tier REMIC as a REMIC or is otherwise required by
the Code, prepare, sign and file or distribute, or cause to be prepared and
signed and filed or distributed, such documents with or to such Persons when and
as required by the REMIC Provisions or the Code or comparable provisions of
Applicable State and Local Tax Laws; (v) within thirty days of the Closing Date,
furnish or cause to be furnished to the Internal Revenue Service, on Form 8811
or as otherwise may be required by the Code, the name, title and address of the
Person that the holders of the Certificates may contact for tax information
relating thereto (and the Trustee shall act as the representative of each of the
Upper-Tier REMIC and the Lower-Tier REMIC for this purpose), together with such
additional information as may be required by such Form, and shall update such
information at the time or times and in the manner required by the Code (and the
Depositor agrees within 10 Business Days of the Closing Date to provide any
information reasonably requested by the Trustee and necessary to make such
filing); and (vi) maintain such records relating to each of the Upper-Tier REMIC
and the Lower-Tier REMIC as may be necessary to prepare the foregoing returns,
schedules, statements or information, such records, for federal income tax
purposes, to be maintained on a calendar year and on an accrual basis. The
Holder of the largest Percentage Interest in the Class R or Class LR
Certificates shall be the tax matters person of the Upper-Tier REMIC or the
Lower-Tier REMIC, respectively, pursuant to Treasury Regulations Section
1.860F-4(d). If more than one Holder should hold an equal Percentage Interest in
the Class R or Class LR Certificates larger than that held by any other Holder,
the first such Holder to have acquired such Class R or Class LR Certificates
shall be such tax matters person. The Trustee shall act as attorney-in-fact and
agent for the tax matters person of each of the Upper-Tier REMIC and Lower-Tier
REMIC, and each Holder of a Percentage Interest in the Class R or Class LR
Certificates, by acceptance hereof, is deemed to have consented to the Trustee's
appointment in such capacity and agrees to execute any documents required to
give effect thereto, and any fees and expenses incurred by the Trustee in
connection with any audit or administrative or judicial proceeding shall be paid
by the Trust Fund. The Trustee shall not intentionally take any action or
intentionally omit to take any action if, in taking or omitting to take such
action, the Trustee knows that such action or omission (as the case may be)
would cause the termination of the REMIC status of the Upper-Tier REMIC or the
Lower-Tier REMIC or the imposition of tax on the Upper-Tier REMIC or the
Lower-Tier REMIC (other than a tax on income expressly permitted or contemplated
to be received by the terms of this Agreement). Notwithstanding any provision of
this paragraph to the contrary, the Trustee shall not be required to take any
action that the Trustee in good faith believes to be inconsistent with any other
provision of this Agreement, nor shall the Trustee be deemed in violation of
this paragraph if it takes any action expressly required or authorized by any
other provision of this Agreement, and the Trustee shall have no responsibility
or liability with respect to any act or omission of the Depositor or the Master
Servicer which does not enable or impedes the ability of the Trustee to comply
with any of clauses (i) through (vi) of the fifth preceding sentence or which
results in any action contemplated by clauses (i) through (iii) of the next
succeeding sentence. In this regard the Trustee shall (i) exercise reasonable
care not to allow the occurrence of any "prohibited transactions" within the
meaning of Code Section 860F(a), unless the party seeking such action shall have
delivered to the Trustee an Opinion of Counsel (at such party's expense) that
such occurrence would not (A) result in a taxable gain, (B) otherwise subject
the Upper-Tier REMIC or Lower-Tier REMIC to tax (other than a tax at the highest
marginal corporate tax rate on net income from foreclosure property), or (C)
cause either of the Upper-Tier REMIC or Lower-Tier REMIC to fail to qualify as a
REMIC; and (ii) exercise reasonable care not to allow either of the Trust REMICs
to receive income from the performance of services or from assets not permitted
under the REMIC Provisions to be held by a REMIC (provided, however, that the
receipt of any income expressly permitted or contemplated by the terms of this
Agreement shall not be deemed to violate this clause) and (iii) not permit the
creation of any "interests," within the meaning of the REMIC Provisions, in the
Upper-Tier REMIC other than the Regular Certificates and the Class R
Certificates or in the Lower-Tier REMIC other than the Lower-Tier Regular
Interests and the Class LR Certificates. None of the Master Servicer, the
Special Servicer or the Depositor shall be responsible or liable for any failure
by the Trustee to comply with the provisions of this Section 4.04. The
Depositor, the Master Servicer and the Special Servicer shall cooperate in a
timely manner with the Trustee in supplying any information within the
Depositor's, the Master Servicer's or the Special Servicer's control (other than
any confidential information) that is reasonably necessary to enable the Trustee
to perform its duties under this Section 4.04.
(b) The tax matter person, the Master Servicer and the Special Servicer
each hereby covenants to perform its duties hereunder so as to maintain the
status of the Trust REMICs as REMICs (and the Master Servicer and the Special
Servicer shall assist the Trustee to the extent reasonably requested by the
Trustee and to the extent of information within the Master Servicer's or the
Special Servicer's possession or control). None of the tax matters person, the
Master Servicer or the Special Servicer shall knowingly take (or cause the
applicable Trust REMICs to take) any action or fail to take (or fail to cause to
be taken) any action within their respective control and the scope of their
respective duties under this Agreement that if taken or not taken, as the case
may be, would (i) endanger the status of either Trust REMIC as a REMIC, or (ii)
result in the imposition of a tax upon either Trust REMIC (including, but not
limited to the tax on prohibited transactions as defined in Section 860F(a) of
the Code), other than a tax at the highest marginal corporate tax rate on net
income from foreclosure property (any such endangerment or imposition, an
"Adverse REMIC Event"), unless the Trustee has received an Opinion of Counsel
(at the expense of the party requesting such action) to the effect that the
contemplated action will not result in an Adverse REMIC Event. In addition,
prior to taking any action with respect to either Trust REMIC, or causing either
Trust REMIC to take any action, that is not permitted under the terms of this
Agreement, the tax matters person, the Master Servicer and the Special Servicer
shall consult with the Trustee or its designee, in writing, with respect to
whether such action would cause an Adverse REMIC Event to occur.
(c) The following assumptions are to be used for purposes of determining
the anticipated payments of principal and interest for calculating the original
yield to maturity and original issue discount with respect to the Regular
Certificates: (i) each Mortgage Loan will pay principal and interest in
accordance with its terms and scheduled payments will be timely received on
their Due Dates, provided that the Mortgage Loans in the aggregate will prepay
in accordance with the Prepayment Assumption; (ii) none of the Master Servicer,
the Depositor and the Class LR Certificateholders will exercise the right
described in Section 9.01 of this Agreement to cause early termination of the
Trust Fund; and (iii) no Mortgage Loan is repurchased by MSMC or the Depositor
pursuant to Article II hereof.
SECTION 4.05. Imposition of Tax on the Trust Fund.
In the event that any tax, including interest, penalties or assessments,
additional amounts or additions to tax, is imposed on the Upper-Tier REMIC or
Lower-Tier REMIC, such tax shall be charged against amounts otherwise
distributable to the Holders of the Certificates; provided, that any taxes
imposed on any net income from foreclosure property pursuant to Code Section
860G(c) or any similar tax imposed by a state or local jurisdiction shall
instead be treated as an expense of the related REO Property in determining Net
REO Proceeds with respect to the REO Property (and until such taxes are paid,
the Special Servicer from time to time shall withdraw from the REO Account and
transfer to the Trustee amounts reasonably determined by the Trustee to be
necessary to pay such taxes, which the Trustee shall maintain in a separate,
non-interest-bearing account, and the Trustee shall remit to the Master Servicer
for deposit in the Collection Account the excess determined by the Trustee from
time to time of the amount in such account over the amount necessary to pay such
taxes) and shall be paid therefrom; provided that any such tax imposed on net
income from foreclosure property that exceeds the amount in any such reserve
shall be retained from Available Funds as provided in Section 3.06(vii) and the
next sentence. Except as provided in the preceding sentence, the Trustee is
hereby authorized to and shall retain or cause to be retained from the
Collection Account in determining the amount of Available Funds sufficient funds
to pay or provide for the payment of, and to actually pay, such tax as is
legally owed by the Upper-Tier REMIC, or Lower-Tier REMIC (but such
authorization shall not prevent the Trustee from contesting, at the expense of
the Trust Fund, any such tax in appropriate proceedings, and withholding payment
of such tax, if permitted by law, pending the outcome of such proceedings). The
Trustee is hereby authorized to and shall segregate or cause to be segregated,
into a separate non-interest bearing account, (i) the net income from any
"prohibited transaction" under Code Section 860F(a) or (ii) the amount of any
contribution to the Upper-Tier REMIC or Lower-Tier REMIC after the Startup Day
that is subject to tax under Code Section 860G(d) and use such income or amount,
to the extent necessary, to pay such tax (and return the balance thereof, if
any, to the Lower-Tier Distribution Account or the Upper-Tier Distribution
Account, as the case may be). To the extent that any such tax is paid to the
IRS, the Trustee shall retain an equal amount from future amounts otherwise
distributable to the Holders of the Class R or the Class LR Certificates, as the
case may be, and shall distribute such retained amounts to the Holders of
Regular Certificates or to the Trustee in respect of the Lower-Tier Regular
Interests, as applicable, until they are fully reimbursed and then to the
Holders of the Class R Certificates or the Class LR Certificates, as applicable.
Neither the Master Servicer, the Special Servicer nor the Trustee shall be
responsible for any taxes imposed on the Upper-Tier REMIC or Lower-Tier REMIC
except to the extent such tax is attributable to a breach of a representation or
warranty of the Master Servicer, the Special Servicer or the Trustee or an act
or omission of the Master Servicer, the Special Servicer or the Trustee in
contravention of this Agreement in both cases, provided, further, that such
breach, act or omission could result in liability under Section 6.03, in the
case of the Master Servicer or Section 4.04 or 8.01, in the case of the Trustee.
Notwithstanding anything in this Agreement to the contrary, in each such case,
the Master Servicer or the Special Servicer shall not be responsible for
Trustee's breaches, acts or omissions, and the Trustee shall not be responsible
for the breaches, acts or omissions of the Master Servicer or the Special
Servicer.
SECTION 4.06. Remittances; P&I Advances.
(a) "Applicable Monthly Payment" shall mean, for any Mortgage Loan with
respect to any month, (A) if such Mortgage Loan has been extended (other than
pursuant to Section 3.26) in accordance with the terms and conditions otherwise
set forth in this Agreement, the lesser of (1) the Extended Monthly Payment (net
of the related Servicing Fee) and (2) the Monthly Payment on the Mortgage Loan
prior to such extensions, and (B) if such Mortgage Loan is not described by the
preceding clause (A) (including any such Mortgage Loan as to which the related
Mortgaged Property has become an REO Property), the Monthly Payment; provided,
however, that for purposes of calculating the amount of any P&I Advance required
to be made by the Master Servicer or the Trustee, notwithstanding the amount of
such Applicable Monthly Payment, interest shall be calculated at the Net
Mortgage Rate plus the Trustee Fee Rate; and provided further that for purposes
of determining the amount of any P&I Advance, the Monthly Payment shall be as
reduced pursuant to any modification of a Mortgage Loan pursuant to Section
3.26.
(b) On the Master Servicer Remittance Date immediately preceding each
Distribution Date, the Master Servicer shall:
(i) remit to the Trustee for deposit in the Lower-Tier
Distribution Account an amount equal to the Prepayment
Premiums received by the Master Servicer in the Collection
Period preceding such Distribution Date;
(ii) remit to the Trustee for deposit in the Lower-Tier
Distribution Account an amount equal to the Available Funds
(other than the amounts referred to in clause (iii) below);
and
(iii)subject to Section 4.06(c), make a P&I Advance, by deposit
into the Lower-Tier Distribution Account, in an amount equal
to the sum of the Applicable Monthly Payments for each
Mortgage Loan to the extent such amounts were not received
on such Mortgage Loan prior to the close of business on the
related Due Date (or if the Due Date is not a Business Day,
the first Business Day thereafter) and therefore are not
included in the remittance described in the preceding clause
(ii). (c) The Master Servicer shall not be required or
permitted to make an advance for Deferred Interest, Default
Interest, Prepayment Premiums or Balloon Payments. The
amount required to be advanced in respect of Applicable
Monthly Payments on Mortgage Loans that have been subject to
an Appraisal Reduction Event will equal (i) the amount
required to be advanced by the Master Servicer, without
giving effect to such Appraisal Reduction Amounts less (ii)
an amount equal to the product of (x) the amount required to
be advanced by the Master Servicer in respect to delinquent
payments of interest without giving effect to such Appraisal
Reduction Amounts, and (y) a fraction, the numerator of
which is the Appraisal Reduction Amount with respect to such
Mortgage Loan and the denominator of which is the Stated
Principal Balance as of the last day of the related
Collection Period. (d) Any amount advanced by the Master
Servicer pursuant to Section 4.06(b)(iii) shall constitute a
P&I Advance for all purposes of this Agreement and the
Master Servicer shall be entitled to reimbursement (with
interest at the Advance Rate to the extent provided herein)
thereof to the full extent as otherwise set forth in this
Agreement. (e) If as of 11:00 A.M., New York City time, on
any Distribution Date the Master Servicer shall not have
made the P&I Advance required to have been made on the
related Master Servicer Remittance Date pursuant to Section
4.06(b)(iii), the Trustee shall no later than 1:00 p.m., New
York City time, on such Distribution Date deposit into the
Lower-Tier Distribution Account in immediately available
funds an amount equal to the P&I Advances otherwise required
to have been made by the Master Servicer. (f)
Notwithstanding anything herein to the contrary, none of the
Master Servicer or the Trustee shall be obligated to make a
P&I Advance as to any Monthly Payment or Extended Monthly
Payment on any date on which a P&I Advance is otherwise
required to be made by this Section 4.06 if the Master
Servicer or the Trustee, as applicable, determines that such
advance will be a Nonrecoverable Advance. The Master
Servicer shall be required to provide notice to the Trustee
on or prior to the Master Servicer Remittance Date of any
such non-recoverability determination made on or prior to
such date. The Trustee shall be entitled to rely,
conclusively, on any determination by the Master Servicer
that a P&I Advance, if made, would be a Nonrecoverable
Advance; provided, however, that if the Master Servicer has
failed to make a P&I Advance for reasons other than a
determination by the Master Servicer that such Advance would
be a Nonrecoverable Advance, the Trustee shall make such
advance within the time periods required by Section 4.06(e)
unless the Trustee, in good faith, makes a determination
prior to the times specified in Section 4.06(e) that such
advance would be a Nonrecoverable Advance. The Trustee, in
determining whether or not an Advance previously made is, or
a proposed Advance, if made, would be, a Nonrecoverable
Advance shall be subject to the standards applicable to the
Master Servicer hereunder. (g) The Master Servicer or the
Trustee, as applicable, shall be entitled to the
reimbursement of P&I Advances it makes together with any
related Advance Interest Amount in respect of such P&I
Advances, in each case, to the extent permitted pursuant to
Section 3.06(ii) of this Agreement and the Master Servicer
and Special Servicer hereby covenant and agree to promptly
seek and effect the reimbursement of such Advances from the
related Borrowers to the extent permitted by applicable law
and the related Mortgage Loan.
SECTION 4.07. Grantor Trust Reporting.
The parties intend that the portions of the Trust Fund consisting of (i)
the Default Interest, proceeds therefrom and the Class Q Distribution Account
and (ii) Deferred Interest, proceeds therefrom and the Deferred Interest
Distribution Account shall constitute, and that the affairs of the Trust Fund
(exclusive of the Trust REMICs) shall be conducted so as to qualify such portion
as, a "grantor trust" under the Code, and the provisions hereof shall be
interpreted consistently with this intention. In furtherance of such intention,
the Trustee shall furnish or cause to be furnished to Certificateholders and
shall file or cause to be filed with the IRS together with Form 1041 or such
other form as may be applicable, (i) to the Holders of the Class Q Certificates,
a statement of income with respect to their allocable share of Default Interest
and the amount of any Advance Interest Amounts paid to the Master Servicer, the
Special Servicer or the Trustee, as applicable, therefrom pursuant to Section
3.06(ii), as such amounts are received by or accrue to the Trust Fund, as the
case may be, at the time or times and in the manner required by the Code and
(ii) to the Holders of the Classes of Regular Certificates entitled thereto as
set forth in Section 2.06(b), a statement of income with respect to their
allocable share of Deferred Interest, as such amounts accrue to the Trust Fund,
at the time or times and in the manner required by the Code.
<PAGE>
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
The Certificates consist of the Class A-1 Certificates, the Class A-2
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 Q Certificates, the Class R Certificates and the Class
LR Certificates.
The Class A-1, Class A-2, Class X, Class B, Class C, Class D, Class E,
Class F, Class Q, Class R and Class LR Certificates will be substantially in the
forms annexed hereto as Exhibits A-1 through A-12, respectively. The
Certificates of each Class (other than the Class Q, Class LR and Class R
Certificates) will be issuable in registered form only, in minimum denominations
of authorized initial Certificate Principal Amount or Notional Amount, as
applicable, as described in the succeeding table, and multiples of $1 in excess
thereof. With respect to any Certificate or any beneficial interest in a
Certificate, the "Denomination" thereof shall be (i) the amount (A) set forth on
the face thereof or (B) in the case of any Global Certificate, set forth on a
schedule attached thereto or, in the case of any beneficial interest in a Global
Certificate, the product of the Percentage Interest represented by such
beneficial interest and the amount set forth on such schedule of the related
Global Certificate, (ii) expressed in terms of initial Certificate Principal
Amount or Notional Amount, as applicable, and (iii) in an authorized
denomination, as set forth below. With respect to the Class F Certificates, on
the Closing Date, the Trustee or the Authenticating Agent shall execute and
authenticate and the Certificate Registrar shall deliver (i) Rule 144A global
Class F Certificates (the "Rule 144A Global Certificates") in definitive, fully
registered form without interest coupons, (ii) Regulation S global Class F,
Certificates (the "Regulation S Global Certificates" and together with the Rule
144A Global Certificates, the "Private Global Certificates") in definitive,
fully registered form without interest coupons or (ii) one or more, if any,
Individual Certificates, in each case substantially in the form of Exhibit A-8
hereto, respectively. The Certificate will share ratably in all rights of the
related Class. The Class Q, Class R and LR Certificates will each be issuable in
one or more Individual Certificates in minimum denominations of 5% Percentage
Interests and integral multiples of a 1% Percentage Interest in excess thereof
and together aggregating the entire 100% Percentage Interest in each such Class.
Aggregate
Denominations
of all Certificates
Minimum of Class
Certificate Principal Amount (in Initial Denomination or
Class Notional Amount)
----- ----------------
A-1 $10,000.00 $ 43,300,000
A-2 $10,000.00 $467,121,000
B $10,000.00 $ 75,945,000
C $10,000.00 $ 42,388,000
D $10,000.00 $ 45,920,000
E $10,000.00 $ 21,194,000
F $10,000.00 $ 10,597,702
X $10,000.00 $706,465,702
The Global Certificates shall be issued as one or more certificates
registered in the name of a nominee designated by the Depository, and Beneficial
Owners shall hold interests in the Global Certificates through the book-entry
facilities of the Depository in the minimum Denominations and aggregate
Denominations and Classes as set forth above. The Global Certificates shall in
all respects be entitled to the same benefits under this Agreement as Individual
Certificates authenticated and delivered hereunder.
Except insofar as pertains to any Individual Certificate, the Trust Fund,
the Paying Agent and the Trustee may for all purposes (including the making of
payments due on the Global Certificates and the giving of notice to Holders
thereof) deal with the Depository as the authorized representative of the
Beneficial Owners with respect to the Global Certificates for the purposes of
exercising the rights of Certificateholders hereunder; provided, however, that,
for purposes of providing information pursuant to Section 3.20 or transmitting
communications pursuant to Section 5.05(a), to the extent that the Depositor has
provided the Trustee with the names of Beneficial Owners, the Trustee shall make
available such information to such Beneficial Owners directly. The rights of
Beneficial Owners with respect to Global Certificates shall be limited to those
established by law and agreements among such Beneficial Owners and the
Depository and Depository Participants. Except in the limited circumstances
described below, Beneficial Owners of Public Global Certificates shall not be
entitled to physical certificates for the Public Global Certificates as to which
they are the Beneficial Owners. Requests and directions from, and votes of, the
Depository as Holder of the Global Certificates shall not be deemed inconsistent
if they are made with respect to different Beneficial Owners. Subject to the
restrictions on transfer set forth in Section 5.02 and Applicable Procedures, a
Beneficial Owner of a Private Global Certificate may request that the Depositor,
or an agent thereof, cause the Depository (or any Agent Member) to notify the
Certificate Registrar and the Certificate Custodian in writing of a request for
transfer or exchange of such beneficial interest for an Individual Certificate
or Certificates. Upon receipt of such a request and payment by the related
Beneficial Owner of any attendant expenses, the Depositor shall cause the
issuance and delivery of such Individual Certificates. The Certificate Registrar
may establish a reasonable record date in connection with solicitations of
consents from or voting by Certificateholders and give notice to the Depository
of such record date. Without the written consent of the Depositor and the
Certificate Registrar, no Global Certificate may be transferred by the
Depository except to a successor Depository that agrees to hold the Global
Certificates for the account of the Beneficial Owners.
Any of the Certificates may be issued with appropriate insertions,
omissions, substitutions and variations, and may have imprinted or otherwise
reproduced thereon such legend or legends, not inconsistent with the provisions
of this Agreement, as may be required to comply with any law or with rules or
regulations pursuant thereto, or with the rules of any securities market in
which the Certificates are admitted to trading, or to conform to general usage.
The Global Certificates (i) shall be delivered by the Certificate Registrar to
the Depository or, pursuant to the Depository's instructions on behalf of the
Depository to, and deposited with, the Certificate Custodian, and in either case
shall be registered in the name of Cede & Co. and (ii) shall bear a legend
substantially to the following effect:
"Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Certificate
Registrar for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein."
The Global Certificates may be deposited with such other Depository as the
Certificate Registrar may from time to time designate, and shall bear such
legend as may be appropriate.
If (i) the Depository advises the Trustee in writing that the Depository is
no longer willing, qualified or able properly to discharge its responsibilities
as Depository, and the Depositor is unable to locate a qualified successor, (ii)
the Depositor or the Trustee, at its sole option, elects to terminate the
book-entry system through the Depository with respect to all or any portion of
any Class of Certificates or (iii) after the occurrence of an Event of Default,
Beneficial Owners owning not less than a majority in Certificate Principal
Amount or Notional Amount, as applicable, of the Global Certificate for any
Class then outstanding advise the Depository through Depository Participants in
writing that the continuation of a book-entry system through the Depository is
no longer in the best interest of the Beneficial Owner or Owners of such Global
Certificate, the Trustee shall notify the affected Beneficial Owners through the
Depository of the occurrence of such event and the availability of Individual
Certificates to such Beneficial Owner or Owners requesting them. Upon surrender
to the Trustee of Global Certificates by the Depository, accompanied by
registration instructions from the Depository for registration of transfer, the
Trustee shall issue the Individual Certificates. Neither the Trustee, the
Certificate Registrar, the Master Servicer, the Special Servicer nor the
Depositor shall be liable for any actions taken by the Depository or its
nominee, including, without limitation, any delay in delivery of such
instructions. Upon the issuance of Individual Certificates, the Trustee, the
Certificate Registrar, the Master Servicer, the Special Servicer, and the
Depositor shall recognize the Holders of Individual Certificates as
Certificateholders hereunder.
If the Trustee, its agents or the Master Servicer or Special Servicer has
instituted or has been directed to institute any judicial proceeding in a court
to enforce the rights of the Certificateholders under the Certificates, and the
Trustee, the Master Servicer or the Special Servicer has been advised by counsel
that in connection with such proceeding it is necessary or appropriate for the
Trustee, the Master Servicer or the Special Servicer to obtain possession of the
Certificates, the Trustee, the Master Servicer or the Special Servicer may in
its sole discretion determine that the Certificates represented by the Global
Certificates shall no longer be represented by such Global Certificates. In such
event, the Trustee or the Authenticating Agent will execute and authenticate and
the Certificate Registrar will deliver, in exchange for such Global
Certificates, Individual Certificates (and if the Trustee or the Certificate
Custodian has in its possession Individual Certificates previously executed, the
Authenticating Agent will authenticate and the Certificate Registrar will
deliver such Certificates) in a Denomination equal to the aggregate Denomination
of such Global Certificates.
If the Trust Fund ceases to be subject to Section 13 or 15(d) of the
Exchange Act, the Trustee shall cooperate with the Depositor to make available
to each Holder of a Class F, Class Q, Class R or Class LR Certificate, upon
request of such a Holder, information substantially equivalent in scope to the
information currently filed by the Trustee with the Commission pursuant to the
Exchange Act, plus such additional information required to be provided for
securities qualifying for resales under Rule 144A under the Act which
information shall be provided on a timely basis to the Trustee by the Master
Servicer, to the extent such information relates to the Mortgage Loans and is in
the possession of, or readily obtainable by, the Master Servicer. The Trustee
shall have no responsibility for the sufficiency under Rule 144A or any other
securities laws of any available information so furnished to any person
including any prospective purchaser of a Certificate or any interest therein,
nor for the content or accuracy of any information so furnished which was
prepared or delivered to the Trustee by another.
Each Certificate may be printed or in typewritten or similar form, and each
Certificate shall, upon original issue, be executed and authenticated by the
Trustee or the Authenticating Agent and delivered to the Depositor. All
Certificates shall be executed by manual or facsimile signature on behalf of the
Trustee or Authenticating Agent by an authorized officer or signatory.
Certificates bearing the signature of an individual who was at any time the
proper officer or signatory of the Trustee or Authenticating Agent shall bind
the Trustee or Authenticating Agent, notwithstanding that such individual has
ceased to hold such office or position prior to the delivery of such
Certificates or did not hold such office or position at the date of such
Certificates. No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
a certificate of authentication in the form set forth in Exhibits A-1 through
A-11 executed by the Authenticating Agent by manual signature, and such
certificate of authentication upon any Certificate shall be conclusive evidence,
and the only evidence, that such Certificate has been duly authenticated and
delivered hereunder. All Certificates shall be dated the date of their
authentication.
SECTION 5.02. Registration, Transfer and Exchange of Certificates.
(a) The Trustee shall keep or cause to be kept at the Corporate Trust
Office books (the "Certificate Register") for the registration, transfer and
exchange of Certificates (the Trustee, in such capacity, being the "Certificate
Registrar"). The names and addresses of all Certificateholders and the names and
addresses of the transferees of any Certificates shall be registered in the
Certificate Register; provided, however, in no event shall the Certificate
Registrar be required to maintain in the Certificate Register the names of the
individual participants holding beneficial interests in the Trust Fund through
the Depository. The Person in whose name any Certificate is so registered shall
be deemed and treated as the sole owner and Holder thereof for all purposes of
this Agreement and the Certificate Registrar, the Master Servicer, the Trustee,
any Paying Agent and any agent of any of them shall not be affected by any
notice or knowledge to the contrary. An Individual Certificate is transferable
or exchangeable only upon the surrender of such Certificate to the Certificate
Registrar at the Corporate Trust Office together with an assignment and transfer
(executed by the Holder or his duly authorized attorney), subject to the
applicable requirements of this Section 5.02. Upon request of the Trustee, the
Certificate Registrar shall provide the Trustee with the names, addresses and
Percentage Interests of the Holders.
(b) Upon surrender for registration of transfer of any Individual
Certificate, subject to the applicable requirements of this Section 5.02, the
Trustee shall execute and the Authenticating Agent shall duly authenticate in
the name of the designated transferee or transferees, one or more new
Certificates in Denominations of a like aggregate Denomination as the Individual
Certificate being surrendered. Such Certificates shall be delivered by the
Certificate Registrar in accordance with Section 5.02(e). Each Certificate
surrendered for registration of transfer shall be canceled and subsequently
destroyed by the Certificate Registrar. Each new Certificate issued pursuant to
this Section 5.02 shall be registered in the name of any Person as the
transferring Holder may request, subject to the applicable provisions of this
Section 5.02.
(c) In addition to the applicable provisions of this Section 5.02 and the
rules of the Depository, the exchange, transfer and registration of transfer of
Individual Certificates or beneficial interests in the Private Global
Certificates shall be subject to the following restrictions.
(i) Transfers between Holders of Individual Certificates. With
respect to the transfer and registration of transfer of an
Individual Certificate representing an interest in the Class
F, Class Q, Class R or Class LR Certificates to a transferee
that takes delivery in the form of an Individual
Certificate:
(A) The Certificate Registrar shall register the transfer
of an Individual Certificate if the requested transfer
is being made by a transferee who has provided the
Certificate Registrar with an Investment Representation
Letter substantially in the form of Exhibit D-1 hereto
(an "Investment Representation Letter"), to the effect
that the transfer is being made to a Qualified
Institutional Buyer in accordance with Rule 144A;
(B) The Certificate Registrar shall register the transfer
of an Individual Certificate pursuant to Regulation S
after the expiration of the Restricted Period if (1)
the transferor has provided the Certificate Registrar
with a Regulation S Transfer Certificate substantially
in the form of Exhibit K hereto (a "Regulation S
Transfer Certificate"), and (2) the transferee
furnishes to the Certificate Registrar an Investment
Representation Letter; and
(C) The Certificate Registrar shall register the transfer
of an Individual Certificate (other than a Residual
Certificate) if prior to the transfer such transferee
furnishes to the Certificate Registrar (a) an
Investment Representation Letter to the effect that the
transfer is being made to an Institutional Accredited
Investor in accordance with an applicable exemption
under the Act, (b) an Opinion of Counsel acceptable to
the Certificate Registrar that such transfer is in
compliance with the Act and (c) the Certificate
Registrar shall register the transfer of an Individual
Certificate only if prior to the transfer the
transferee furnishes to the Certificate Registrar a
written undertaking by the transferor to reimburse the
Trust for any costs incurred by it in connection with
the proposed transfer;
(ii) Transfers within the Private Global Certificates.
Notwithstanding any provision to the contrary herein, so
long as a Private Global Certificate remains outstanding and
is held by or on behalf of the Depository, transfers within
the Private Global Certificates shall only be made in
accordance with this Section 5.02(c)(ii).
(A) Rule 144A Global Certificate to Regulation S Global
Certificate During the Restricted Period. If, during
the Restricted Period, a Beneficial Owner of an
interest in a Rule 144A Global Certificate wishes at
any time to transfer its beneficial interest in such
Rule 144A Global Certificate to a Person who wishes to
take delivery thereof in the form of a beneficial
interest in the related Regulation S Global
Certificate, such Beneficial Owner may, in addition to
complying with all applicable rules and procedures of
the Depository and Cedel or Euroclear applicable to
transfers by their respective participants (the
"Applicable Procedures"), transfer or cause the
transfer of such beneficial interest for an equivalent
beneficial interest in such Regulation S Global
Certificate only upon compliance with the provisions of
this Section 5.02(c)(ii)(A). Upon receipt by the
Certificate Registrar at the Corporate Trust Office of
(1) written instructions given in accordance with the
Applicable Procedures from an Agent Member directing
the Certificate Registrar to credit or cause to be
credited to another specified Agent Member's account a
beneficial interest in the Regulation S Global
Certificate in an amount equal to the Denomination of
the beneficial interest in the Rule 144A Global
Certificate to be transferred, (2) a written order
given in accordance with the Applicable Procedures
containing information regarding the account of the
Agent Member and the Euroclear or Cedel account, as the
case may be, to be credited with, and the account of
the Agent Member to be debited for, such beneficial
interest, and (3) a certificate in the form of Exhibit
L --------- hereto given by the Beneficial Owner of
such interest, the Certificate Registrar shall instruct
the Depository or the Certificate Custodian, as
applicable, to reduce the Denomination of the Rule 144A
Global Certificate by the Denomination of the
beneficial interest in the Rule 144A Global Certificate
to be so transferred and, concurrently with such
reduction, to increase the Denomination of the
Regulation S Global Certificate by the Denomination of
the beneficial interest in the Rule 144A Global
Certificate to be so transferred, and to credit or
cause to be credited to the account of the Person
specified in such instructions (who shall be an Agent
Member acting for or on behalf of Euroclear or Cedel,
or both, as the case may be) a beneficial interest in
the Regulation S Global Certificate having a
Denomination equal to the amount by which the
Denomination of the Rule 144A Global Certificate was
reduced upon such transfer.
(B) Rule 144A Global Certificate to Regulation S Global
Certificate After the Restricted Period. If, after the
Restricted Period, a Beneficial Owner of an interest in
a Rule 144A Global Certificate wishes at any time to
transfer its beneficial interest in such Rule 144A
Global Certificate to a Person who wishes to take
delivery thereof in the form of a beneficial interest
in the related Regulation S Global Certificate, such
holder may, in addition to complying with all
Applicable Procedures, transfer or cause the transfer
of such beneficial interest for an equivalent
beneficial interest in such Regulation S Global
Certificate only upon compliance with the provisions of
this Section 5.02(c)(ii)(B). Upon receipt by the
Certificate Registrar at the Corporate Trust Office of
(1) written instructions given in accordance with the
Applicable Procedures from an Agent Member directing
the Certificate Registrar to credit or cause to be
credited to another specified Agent Member's account a
beneficial interest in the Regulation S Global
Certificate in an amount equal to the Denomination of
the beneficial interest in the Rule 144A Global
Certificate to be transferred, (2) a written order
given in accordance with the Applicable Procedures
containing information regarding the account of the
Agent Member and, in the case of a transfer pursuant to
and in accordance with Regulation S, the Euroclear or
Cedel account, as the case may be, to be credited with,
and the account of the Agent Member to be debited for,
such beneficial interest, and (3) a certificate in the
form of Exhibit M hereto given by the Beneficial Owner
of such interest, the Certificate Registrar shall
instruct the Depository or the Certificate Custodian,
as applicable, to reduce the Denomination of the Rule
144A Global Certificate by the aggregate Denomination
of the beneficial interest in the Rule 144A Global
Certificate to be so transferred and, concurrently with
such reduction, to increase the Denomination of the
Regulation S Global Certificate by the aggregate
Denomination of the beneficial interest in the Rule
144A Global Certificate to be so transferred, and to
credit or cause to be credited to the account of the
Person specified in such instructions a beneficial
interest in the Regulation S Global Certificate having
a Denomination equal to the amount by which the
Denomination of the Rule 144A Global Certificate was
reduced upon such transfer.
(C) Regulation S Global Certificate to Rule 144A Global
Certificate. If the Beneficial Owner of an interest in
a Regulation S Global Certificate wishes at any time to
transfer its beneficial interest in such Regulation S
Global Certificate to a Person who wishes to take
delivery thereof in the form of a beneficial interest
in the related Rule 144A Global Certificate, such
Beneficial Owner may, in addition to complying with all
Applicable Procedures, transfer or cause the transfer
of such beneficial interest for an equivalent
beneficial interest in such Rule 144A Global
Certificate only upon compliance with the provisions of
this Section 5.02(c)(ii)(C). Upon receipt by the
Certificate Registrar at the Corporate Trust Office of
(1) written instructions given in accordance with the
Applicable Procedures from an Agent Member directing
the Certificate Registrar to credit or cause to be
credited to another specified Agent Member's account a
beneficial interest in the Rule 144A Global Certificate
in an amount equal to the Denomination of the
beneficial interest in the Regulation S Global
Certificate to be transferred, (2) a written order
given in accordance with the Applicable Procedures
containing information regarding the account of the
Agent Member to be credited with, and the account of
the Agent Member or, if such account is held for
Euroclear or Cedel, the Euroclear or Cedel account, as
the case may be, to be debited for, such beneficial
interest, and (3) with respect to a transfer of a
beneficial interest in a Regulation S Global
Certificate for a beneficial interest in the related
Rule 144A Global Certificate (i) during the Restricted
Period, a certificate in the form of Exhibit N hereto
given by the holder of --------- such beneficial
interest or (ii) after the Restricted Period, an
Investment Representation Letter from the transferee to
the effect that such transferee is a Qualified
Institutional Buyer, the Certificate Registrar shall
instruct the Depository or the Certificate Custodian,
as applicable, to reduce the Denomination of the
Regulation S Global Certificate by the aggregate
Denomination of the beneficial interest in the
Regulation S Global Certificate to be transferred, and,
concurrently with such reduction, to increase the
Denomination of the Rule 144A Global Certificate by the
aggregate Denomination of the beneficial interest in
the Regulation S Global Certificate to be so
transferred, and to credit or cause to be credited to
the account of the Person specified in such
instructions a beneficial interest in such Rule 144A
Global Certificate having a Denomination equal to the
amount by which the Denomination of the Regulation S
Global Certificate was reduced upon such transfer.
(iii)Transfers from the Private Global Certificates to Individual
Certificates. Any and all transfers from a Private Global
Certificate to a transferee wishing to take delivery in the
form of an Individual Certificate will require the
transferee to take delivery subject to the restrictions on
the transfer of such Individual Certificate described on the
face of such Certificate, and such transferee agrees that it
will transfer such Individual Certificate only as provided
therein and herein. No such transfer shall be made and the
Certificate Registrar shall not register any such transfer
unless such transfer is made in accordance with this Section
5.02(c)(iii).
(A) Transfers of a beneficial interest in a Private Global
Certificate to an Institutional Accredited Investor
will require delivery in the form of an Individual
Certificate and the Certificate Registrar shall
register such transfer only upon compliance with the
provisions of Section 5.02(c)(i)(C).
(B) Transfers of a beneficial interest in a Private Global
Certificate to a Qualified Institutional Buyer or a
Regulation S Investor wishing to take delivery in the
form of an Individual Certificate will be registered by
the Certificate Registrar only upon compliance with the
provisions of Sections 5.02(c)(i)(A) and (C),
respectively.
(C) Notwithstanding the foregoing, no transfer of a
beneficial interest in a Regulation S Global
Certificate to an Individual Certificate pursuant to
subparagraph (B) above shall be made prior to the
expiration of the Restricted Period.
(D) Upon acceptance for exchange or transfer of a
beneficial interest in a Private Global Certificate for
an Individual Certificate, as provided herein, the
Certificate Registrar shall endorse on the schedule
affixed to the related Private Global Certificate (or
on a continuation of such schedule affixed to such
Private Global Certificate and made a part thereof) an
appropriate notation evidencing the date of such
exchange or transfer and a decrease in the Denomination
of such Private Global Certificate equal to the
Denomination of such Individual Certificate issued in
exchange therefor or upon transfer thereof. Unless
determined otherwise by the Certificate Registrar in
accordance with applicable law, an Individual
Certificate issued upon transfer of or exchange for a
beneficial interest in the Private Global Certificate
shall bear the Securities Legend.
(iv) Transfers of Individual Certificates to the Private Global
Certificates. If a Holder of an Individual Certificate
wishes at any time to transfer such Certificate to a Person
who wishes to take delivery thereof in the form of a
beneficial interest in the related Regulation S Global
Certificate or the related Rule 144A Global Certificate,
such transfer may be effected only in accordance with all
applicable rules and procedures of the Depository applicable
to transfers by their respective participants (the
"Applicable Procedures"), and this Section 5.02(c)(iv). Upon
receipt by the Certificate Registrar at the Corporate Trust
Office of (1) the Individual Certificate to be transferred
with an assignment and transfer pursuant to Section 5.02(a),
(2) written instructions given in accordance with the
Applicable Procedures from an Agent Member directing the
Certificate Registrar to credit or cause to be credited to
another specified Agent Member's account a beneficial
interest in such Regulation S Global Certificate or such
Rule 144A Global Certificate, as the case may be, in an
amount equal to the Denomination of the Individual
Certificate to be so transferred, (3) a written order given
in accordance with the Applicable Procedures containing
information regarding the account of the Agent Member and,
in the case of any transfer pursuant to Regulation S, the
Euroclear or Cedel account, as the case may be, to be
credited with such beneficial interest, and (4) (x) an
Investment Representation Letter from the transferee and, if
delivery is to be taken in the form of a beneficial interest
in the Regulation S Global Certificate, a Regulation S
Transfer Certificate from the transferor or (y) an
Investment Representation Letter from the transferee to the
effect that such transferee is a Qualified Institutional
Buyer if delivery is to be taken in the form of a beneficial
interest in the Rule 144A Global Certificate, the
Certificate Registrar shall cancel such Individual
Certificate, execute and deliver a new Individual
Certificate for the Denomination of the Individual
Certificate not so transferred, registered in the name of
the Holder, and the Certificate Registrar shall instruct the
Depository or the Certificate Custodian, as applicable, to
increase the Denomination of the Regulation S Global
Certificate or the Rule 144A Global Certificate, as the case
may be, by the Denomination of the Individual Certificate to
be so transferred, and to credit or cause to be credited to
the account of the Person specified in such instructions
who, in the case of any increase in the Regulation S Global
Certificate during the Restricted Period, shall be an Agent
Member acting for or on behalf of Euroclear or Cedel, or
both, as the case may be, a corresponding Denomination of
the Rule 144A Global Certificate or the Regulation S Global
Certificate, as the case may be.
It is the intent of the foregoing that under no
circumstances may an Institutional Accredited Investor that
is not a Qualified Institutional Buyer take delivery in the
form of a beneficial interest in a Private Global
Certificate.
(v) All Transfers. An exchange of a beneficial interest in a
Private Global Certificate for an Individual Certificate or
Certificates, an exchange of an Individual Certificate or
Certificates for a beneficial interest in the Private Global
Certificate and an exchange of an Individual Certificate or
Certificates for another Individual Certificate or
Certificates (in each case, whether or not such exchange is
made in anticipation of subsequent transfer, and in the case
of the Private Global Certificates, so long as the Private
Global Certificates remain outstanding and are held by or on
behalf of the Depository), may be made only in accordance
with this Section 5.02 and in accordance with the rules of
the Depository and Applicable Procedures.
(d) If Certificates are issued upon the transfer, exchange or replacement
of Certificates not bearing the Securities Legend, the Certificates so issued
shall not bear the Securities Legend. If Certificates are issued upon the
transfer, exchange or replacement of Certificates bearing the Securities Legend,
or if a request is made to remove the Securities Legend on a Certificate, the
Certificates so issued shall bear the Securities Legend, or the Securities
Legend shall not be removed, as the case may be, unless there is delivered to
the Certificate Registrar such satisfactory evidence, which may include an
Opinion of Counsel (at the expense of the party requesting the removal of such
legend) familiar with United States securities laws, as may be reasonably
required by the Certificate Registrar, that neither the Securities Legend nor
the restrictions on transfers set forth therein are required to ensure that
transfers of any Certificate comply with the provisions of Rule 144A or Rule 144
under the Act or that such Certificate is not a "restricted security" within the
meaning of Rule 144 under the Act. Upon provision of such satisfactory evidence,
the Certificate Registrar shall execute and deliver a Certificate that does not
bear the Securities Legend.
(e) Subject to the restrictions on transfer and exchange set forth in this
Section 5.02, the Holder of any Individual Certificate may transfer or exchange
the same in whole or in part (with a Denomination equal to any authorized
Denomination) by surrendering such Certificate at the Corporate Trust Office or
at the office of any transfer agent appointed as provided under this Agreement,
together with an instrument of assignment or transfer (executed by the Holder or
its duly authorized attorney), in the case of transfer, and a written request
for exchange in the case of exchange. Following a proper request for transfer or
exchange, the Certificate Registrar shall, within five Business Days of such
request if made at such Corporate Trust Office, or within ten Business Days if
made at the office of a transfer agent (other than the Certificate Registrar),
execute and deliver at the Corporate Trust Office or at the office of such
transfer agent, as the case may be, to the transferee (in the case of transfer)
or Holder (in the case of exchange) or send by first class mail (at the risk of
the transferee in the case of transfer or Holder in the case of exchange) to
such address as the transferee or Holder, as applicable, may request, an
Individual Certificate or Certificates, as the case may require, for a like
aggregate Denomination and in such Denomination or Denominations as may be
requested. The presentation for transfer or exchange of any Individual
Certificate shall not be valid unless made at the Corporate Trust Office or at
the office of a transfer agent by the registered Holder in person, or by a duly
authorized attorney-in-fact. The Certificate Registrar may decline to accept any
request for an exchange or registration of transfer of any Certificate during
the period of fifteen days preceding any Distribution Date.
(f) An Individual Certificate (other than an Individual Certificate issued
in exchange for a beneficial interest in a Public Global Certificate pursuant to
Section 5.01) or a beneficial interest in a Private Global Certificate may only
be transferred to Eligible Investors in accordance with the provisions set forth
herein. In the event that a Responsible Officer of the Certificate Registrar
becomes aware that such an Individual Certificate or beneficial interest in a
Private Global Certificate is being held by or for the benefit of a Person who
is not an Eligible Investor, or that such holding is unlawful under the laws of
a relevant jurisdiction, then the Certificate Registrar shall have the right to
void such transfer, if permitted under applicable law, or to require the
investor to sell such Individual Certificate or beneficial interest in a Private
Global Certificate to an Eligible Investor within fourteen days after notice of
such determination and each Certificateholder by its acceptance of a Certificate
authorizes the Certificate Registrar to take such action.
(g) Subject to the provisions of this Section 5.02 regarding transfer and
exchange, transfers of the Global Certificates shall be limited to transfers of
such Global Certificates in whole, but not in part, to nominees of the
Depository or to a successor of the Depository or such successor's nominee.
(h) No fee or service charge shall be imposed by the Certificate Registrar
for its services in respect of any registration of transfer or exchange referred
to in this Section 5.02 other than for transfers to Institutional Accredited
Investors, as provided herein. In connection with any transfer to a transferee
that is not a QIB, the transferor shall reimburse the Trust Fund for any costs
(including the cost of the Certificate Registrar's counsel's review of the
documents and any legal opinions, submitted by the transferor or transferee to
the Certificate Registrar as provided herein) incurred by the Certificate
Registrar in connection with such transfer. The Certificate Registrar may
require payment by each transferor of a sum sufficient to cover any tax, expense
or other governmental charge payable in connection with any such transfer.
(i) The Certificate Registrar may as a condition of the registration of any
transfer of the Class F, Class Q, Class R and Class LR Certificates require the
transferor to furnish other certifications, legal opinions or other information
(at the transferor's expense) as it may reasonably require to confirm that the
proposed transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Act and other
applicable laws.
(j) Neither the Depositor, the Master Servicer, the Special Servicer, the
Trustee nor the Certificate Registrar is obligated to register or qualify the
Class F, Class Q, Class R or Class LR Certificates under the Act or any other
securities law or to take any action not otherwise required under this Agreement
to permit the transfer of such Certificates without registration or
qualification. Any such Certificateholder desiring to effect such transfer
shall, and does hereby agree to, indemnify the Depositor, the Master Servicer,
the Special Servicer, the Trustee and the Certificate Registrar against any
loss, liability or expense that may result if the transfer is not so exempt or
is not made in accordance with such federal and state laws.
(k) No transfer of any Class B, Class C, Class D, Class E, Class F, Class
Q, Class R or Class LR Certificate (each, a "Restricted Certificate") shall be
made to (i) an employee benefit plan or other retirement arrangement, including
an individual retirement account or a Keogh plan, which is subject to Title I of
ERISA or Section 4975 of the Code, or a governmental plan (as defined in Section
3(32) of ERISA) that is subject to any federal, state or local law ("Similar
Law") which is, to a material extent, similar to the foregoing provisions of
ERISA or the Code (each, a "Plan") or (ii) a collective investment fund in which
such Plans are invested, an insurance company that is using assets of separate
accounts or general accounts which include assets of Plans (or which are deemed
pursuant to ERISA or Similar Law to include assets of Plans) or other Person
acting on behalf of any such Plan or using the assets of any such Plan to
acquire any such Restricted Certificate, other than (with respect to any
transfer of a Restricted Certificate that is a Subordinated Certificate) an
insurance company investing the assets of its general account under
circumstances whereby the purchase and holding of such Restricted Certificate by
such insurance company would be exempt from the prohibited transaction
provisions of ERISA and Section 4975 of the Code under Prohibited Transaction
Class Exemption 95-60. Each prospective transferee of a Restricted Certificate
that takes the form of an Individual Certificate shall either (1) deliver to the
Depositor, the Certificate Registrar and the Trustee a representation letter,
substantially in the form of Exhibit D-2 hereto, stating that the prospective
transferee is not a Person referred to in (i) or (ii) above or (2) in the event
the transferee is such a Person, except in the case of a Residual Certificate,
which may not be transferred unless the transferee represents it is not such a
Person, the prospective transferee shall provide to the Depositor, the Trustee
and the Certificate Registrar an Opinion of Counsel which establishes to the
satisfaction of the Depositor, the Trustee and the Certificate Registrar that
the purchase or holding of the Restricted Certificates by or on behalf of a Plan
will not result in the assets of the Trust Fund being deemed to be "plan assets"
and subject to Title I of ERISA, Section 4975 of the Code or Similar Law, will
not constitute or result in a prohibited transaction within the meaning of ERISA
or Section 4975 of the Code, or a materially similar characterization under any
Similar Law, and will not subject the Master Servicer, the Special Servicer, the
Depositor, the Trustee or the Certificate Registrar to any obligation or
liability (including obligations or liabilities under ERISA, Section 4975 of the
Code or any Similar Law) in addition to those set forth in this Agreement, which
Opinion of Counsel shall not be an expense of the Trustee, the Trust Fund, the
Master Servicer, the Special Servicer, the Certificate Registrar or the
Depositor. The Certificate Registrar shall not register the transfer of an
Individual Certificate that is a Restricted Certificate unless the transferee
has provided the representation letter or Opinion of Counsel referred to in the
preceding sentence. The transferee of a beneficial interest in a Global
Certificate that is a Restricted Certificate shall be deemed to represent that
it is not a Person referred to in (i) or (ii) above. Any transfer of a
Restricted Certificate that would result in a prohibited transaction under ERISA
or Section 4975 of the Code, or a materially similar characterization under any
Similar Law, shall be deemed absolutely null and void ab initio.
(l) Each Person who has or acquires any Ownership Interest shall be deemed
by the acceptance or acquisition of such Ownership Interest to have agreed to be
bound by the following provisions and the rights of each Person acquiring any
Ownership Interest are expressly subject to the following provisions:
(i) Each Person acquiring or holding any Ownership Interest shall be
a Permitted Transferee and shall not acquire or hold such
Ownership Interest as agent (including a broker, nominee or other
middleman) on behalf of any Person that is not a Permitted
Transferee. Any such Person shall promptly notify the Certificate
Registrar of any change or impending change in its status (or the
status of the beneficial owner of such Ownership Interest) as a
Permitted Transferee. Any acquisition described in the first
sentence of this Section 5.02(l) by a Person who is not a
Permitted Transferee or by a Person who is acting as an agent of
a Person who is not a Permitted Transferee shall be void and of
no effect, and the immediately preceding owner who was a
Permitted Transferee shall be restored to registered and
beneficial ownership of the Ownership Interest as fully as
possible.
(ii) No Ownership Interest may be Transferred, and no such Transfer
shall be registered in the Certificate Register, without the
express written consent of the Certificate Registrar, and the
Certificate Registrar shall not recognize the Transfer, and such
proposed Transfer shall not be effective, without such consent
with respect thereto. In connection with any proposed Transfer of
any Ownership Interest, the Certificate Registrar shall, as a
condition to such consent, (x) require delivery to it in form and
substance satisfactory to it, and the proposed transferee shall
deliver to the Certificate Registrar and to the proposed
transferor an affidavit in substantially the form attached as
Exhibit C-1 (a "Transferee Affidavit") of the proposed transferee
(A) that such proposed transferee is a Permitted Transferee and
(B) stating that (i) the proposed transferee historically has
paid its debts as they have come due and intends to do so in the
future, (ii) the proposed transferee understands that, as the
holder of an Ownership Interest, it may incur liabilities in
excess of cash flows generated by the residual interest, (iii)
the proposed transferee intends to pay taxes associated with
holding the Ownership Interest as they become due, (iv) the
proposed transferee will not transfer the Ownership Interest to
any Person that does not provide a Transferee Affidavit or as to
which the proposed transferee has actual knowledge that such
Person is not a Permitted Transferee or is acting as an agent
(including a broker, nominee or other middleman) for a Person
that is not a Permitted Transferee, and (v) the proposed
transferee expressly agrees to be bound by and to abide by the
provisions of this Section 5.02(e) and (y) other than in
connection with the initial issuance of the Class R and Class LR
Certificates, require a statement from the proposed transferor
substantially in the form attached as Exhibit C-2 (the
"Transferor Letter"), that the proposed transferor has no actual
knowledge that the proposed transferee is not a Permitted
Transferee and has no actual knowledge or reason to know that the
proposed transferee's statements in the preceding clauses
(x)(B)(i) or (iii) are false.
(iii)Notwithstanding the delivery of a Transferee Affidavit by a
proposed transferee under clause (ii) above, if a Responsible
Officer of the Certificate Registrar has actual knowledge that
the proposed transferee is not a Permitted Transferee, no
Transfer to such proposed transferee shall be effected and such
proposed Transfer shall not be registered on the Certificate
Register; provided, however, that the Certificate Registrar shall
not be required to conduct any independent investigation to
determine whether a proposed transferee is a Permitted
Transferee. Upon notice to the Certificate Registrar that there
has occurred a Transfer to any Person that is a Disqualified
Organization or an agent thereof (including a broker, nominee, or
middleman) in contravention of the foregoing restrictions, and in
any event not later than 60 days after a request for information
from the transferor of such Ownership Interest, or such agent,
the Certificate Registrar and the Trustee agree to furnish to the
IRS and the transferor of such Ownership Interest or such agent
such information necessary to the application of Section 860E(e)
of the Code as may be required by the Code, including, but not
limited to, the present value of the total anticipated excess
inclusions with respect to such Class R or Class LR Certificate
(or portion thereof) for periods after such Transfer. At the
election of the Certificate Registrar and the Trustee, the
Certificate Registrar and the Trustee may charge a reasonable fee
for computing and furnishing such information to the transferor
or to such agent referred to above; provided, however, that such
Persons shall in no event be excused from furnishing such
information.
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Certificate
Registrar, or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate, and (ii) there is delivered
to the Certificate Registrar such security or indemnity as may be required by it
to save it, the Trustee and the Master Servicer harmless, then, in the absence
of actual knowledge by a Responsible Officer of the Certificate Registrar that
such Certificate has been acquired by a bona fide purchaser, the Trustee or the
Authenticating Agent shall execute and authenticate and the Certificate
Registrar shall deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of the same Class and
of like tenor and Percentage Interest. Upon the issuance of any new Certificate
under this Section 5.03, the Certificate Registrar may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Certificate Registrar) connected therewith. Any replacement Certificate
issued pursuant to this Section 5.03 shall constitute complete and indefeasible
evidence of ownership of the corresponding interest in the Trust Fund, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
SECTION 5.04. Appointment of Paying Agent.
The Trustee may appoint a paying agent for the purpose of making
distributions to Certificateholders pursuant to Section 4.01. The Trustee shall
cause such Paying Agent, if other than the Trustee or the Master Servicer, to
execute and deliver to the Master Servicer and the Trustee an instrument in
which such Paying Agent shall agree with the Master Servicer and the Trustee
that such Paying Agent will hold all sums held by it for the payment to
Certificateholders in trust for the benefit of the Certificateholders entitled
thereto until such sums have been paid to the Certificateholders or disposed of
as otherwise provided herein. The initial Paying Agent shall be the Trustee. The
Paying Agent shall at all times be an entity having a long-term unsecured debt
rating of at least "AA" by DCR and S&P, or shall be otherwise acceptable to each
Rating Agency. The Trustee shall not be relieved of any liability or
responsibility by virtue of its appointment of a different Paying Agent.
SECTION 5.05. Access to Certificateholders' Names and Addresses.
(a) If any Certificateholder (for purposes of this Section 5.05, an
"Applicant") applies in writing to the Certificate Registrar, and such
application states that the Applicant desires to communicate with other
Certificateholders, the Certificate Registrar shall furnish or cause to be
furnished to such Applicant a list of the names and addresses of the
Certificateholders as of the most recent Record Date, at the expense of the
Applicant.
(b) Every Certificateholder, by receiving and holding its Certificate,
agrees with the Trustee that the Trustee and the Certificate Registrar shall not
be held accountable in any way by reason of the disclosure of any information as
to the names and addresses of the Certificateholders hereunder, regardless of
the source from which such information was derived.
SECTION 5.06. Actions of Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
agent duly appointed in writing; and except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, when required, to the Depositor, the Special
Servicer, or the Master Servicer. Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient for any purpose of
this Agreement and conclusive in favor of the Trustee, the Depositor, the
Special Servicer, and the Master Servicer, if made in the manner provided in
this Section.
(b) The fact and date of the execution by any Certificateholder of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient.
(c) Any request, demand, authorization, direction, notice, consent, waiver
or other act by a Certificateholder shall bind every Holder of every Certificate
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, in respect of anything done, or omitted to be done, by the
Trustee, the Depositor, the Special Servicer, or the Master Servicer in reliance
thereon, whether or not notation of such action is made upon such Certificate.
(d) The Trustee or Certificate Registrar may require such additional proof
of any matter referred to in this Section 5.06 as it shall deem necessary.
SECTION 5.07. Authenticating Agent.
The Trustee may appoint an Authenticating Agent to execute and to
authenticate Certificates. The Authenticating Agent must be acceptable to the
Depositor and must be a corporation organized and doing business under the laws
of the United States of America or any state, having a principal office and
place of business in a state and city acceptable to the Depositor, having a
combined capital and surplus of at least $15,000,000, authorized under such laws
to do a trust business and subject to supervision or examination by federal or
state authorities. The Trustee shall serve as the initial Authenticating Agent
and the Trustee hereby accepts such appointment. No appointment of another
person as Authenticating Agent shall relieve the Trustee of any obligation as
Authenticating Agent hereunder.
Any corporation into which the Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Authenticating Agent
shall be party, or any corporation succeeding to the corporate agency business
of the Authenticating Agent, shall be the Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
The Authenticating Agent may at any time resign by giving at least 30 days'
advance written notice of resignation to the Trustee and the Depositor. The
Trustee may at any time terminate the agency of the Authenticating Agent by
giving written notice of termination to the Authenticating Agent and the
Depositor. Upon receiving a notice of resignation or upon such a termination, or
in case at any time the Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section 5.07, the Trustee promptly shall
appoint a successor Authenticating Agent, which shall be acceptable to the
Depositor, and shall mail notice of such appointment to all Certificateholders.
Any successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers, duties and responsibilities of
its predecessor hereunder, with like effect as if originally named as
Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section 5.07.
The Authenticating Agent shall have no responsibility or liability for any
action taken by it as such at the direction of the Trustee. Any compensation
paid to the Authenticating Agent shall be an unreimbursable expense of the
Trustee.
SECTION 5.08. Appointment of Custodians.
The Trustee may appoint one or more Custodians to hold all or a portion of
the Mortgage Files as agent for the Trustee, by entering into a Custodial
Agreement; provided that no Custodial Agreement shall be required in the event
the Trustee is serving as Custodian. The Trustee agrees to comply with the terms
of each Custodial Agreement and to enforce the terms and provisions thereof
against the Custodian for the benefit of the Certificateholders. Each Custodian
shall be a depository institution subject to supervision by federal or state
authority, shall have a combined capital and surplus of at least $10,000,000,
shall have a long-term debt rating of at least "BBB" from DCR and S&P, unless
the Trustee shall have received prior written confirmation from each Rating
Agency that the appointment of such Custodian would not cause such Rating Agency
to withdraw, qualify or downgrade any of its then-current ratings on the
Certificates, and shall be qualified to do business in the jurisdiction in which
it holds any Mortgage File. Each Custodial Agreement may be amended only as
provided in Section 10.07. Any compensation paid to the Custodian shall be an
unreimbursable expense of the Trustee. The Trustee shall serve as the initial
Custodian. The Custodian, if the Custodian is not the Trustee, shall maintain a
fidelity bond in the form and amount that are customary for securitizations
similar to the securitization evidenced by this Agreement, with the Trustee
named as loss payee. The Custodian shall be deemed to have complied with this
provision if one of its respective Affiliates has such fidelity bond coverage
and, by the terms of such fidelity bond, the coverage afforded thereunder
extends to the Custodian. In addition, the Custodian shall keep in force during
the term of this Agreement a policy or policies of insurance covering loss
occasioned by the errors and omissions of its officers and employees in
connection with its obligations hereunder in the form and amount that are
customary for securitizations similar to the securitization evidenced by this
Agreement, with the Trustee named as loss payee. All fidelity bonds and policies
of errors and omissions insurance obtained under this Section 5.08 shall be
issued by a Qualified Insurer, or by any other insurer, that, as confirmed by
each Rating Agency in writing to the Trustee, would not in and of itself result
in the downgrade, withdrawal or qualification of any of the ratings assigned to
any Class of Certificates. No appointment of another person as Custodian shall
relieve the Trustee of any obligation as Custodian hereunder.
<PAGE>
ARTICLE VI
THE DEPOSITOR, THE MASTER SERVICER AND THE SPECIAL SERVICER
SECTION 6.01. Liability of the Depositor, the Master Servicer and the
Special Servicer.
The Depositor, the Master Servicer and the Special Servicer each shall be
liable in accordance herewith only to the extent of the obligations specifically
imposed by this Agreement. Each of the Master Servicer and the Special Servicer
shall indemnify the Depositor, and any employee, director or officer of the
Depositor, and the Trust Fund and hold the Depositor and any employee, director
or officer of the Depositor, and the Trust Fund harmless against any loss,
liability or expense incurred by such parties (i) in connection with any willful
misconduct, bad faith, fraud or negligence in the performance of duties of the
Master Servicer or the Special Servicer, as the case may be, or by reason of
negligent disregard of the Master Servicer's or Special Servicer's, as the case
may be, obligations or duties hereunder, or (ii) as a result of the breach by
the Master Servicer or the Special Servicer, as the case may be, of any of its
representations or warranties contained herein.
SECTION 6.02. Merger or Consolidation of the Master Servicer and the
Special Servicer.
Subject to the following paragraph, the Master Servicer will keep in full
effect its existence, rights and good standing as a corporation under the laws
of the State of Delaware and will not jeopardize its ability to do business in
each jurisdiction in which the Mortgaged Properties are located or to protect
the validity and enforceability of this Agreement, the Certificates or any of
the Mortgage Loans and to perform its respective duties under this Agreement.
The Master Servicer and the Special Servicer may be merged or consolidated
with or into any Person, or transfer all or substantially all of its assets to
any Person, in which case any Person resulting from any merger or consolidation
to which it shall be a party, or any Person succeeding to its business, shall be
the successor of the Master Servicer or the Special Servicer, as the case may
be, hereunder, and shall be deemed to have assumed all of the liabilities of the
Master Servicer or the Special Servicer, as the case may be, hereunder, if each
of the Rating Agencies has confirmed in writing that such merger or
consolidation or transfer of assets and succession, in and of itself, will not
cause a downgrade, qualification or withdrawal of the then current ratings
assigned by such Rating Agency to any Class of Certificates.
SECTION 6.03. Limitation on Liability of the Depositor, the Master
Servicer and Others.
Subject to Section 6.01, neither the Depositor, the Master Servicer, the
Special Servicer nor any of the directors, officers, employees or agents of the
Depositor or the Master Servicer or the Special Servicer shall be under any
liability to the Trust Fund or the Certificateholders for any action taken, or
for refraining from the taking of any action, in good faith pursuant to this
Agreement, or for errors in judgment (or with respect to those actions that are
subject to the Special Servicer's consent, due to the denial of such consent);
provided, however, that this provision shall not protect the Depositor or the
Master Servicer or the Special Servicer or any such Person against liability
which would be imposed by reason of (i) any breach of warranty or
representation, or any expense or liability specifically required to be borne
thereby pursuant to the terms of this Agreement, with respect to such respective
party or (ii) any willful misconduct, bad faith, fraud or negligence in the
performance or disregard of duties hereunder with respect to such respective
party. The Depositor, the Master Servicer, the Special Servicer and any
director, officer, employee or agent of the Depositor, the Master Servicer or
the Special Servicer may rely in good faith on any document of any kind which,
prima facie, is properly executed and submitted by any appropriate Person
respecting any matters arising hereunder. The Depositor, the Master Servicer,
the Special Servicer and any director, officer, employee or agent of the
Depositor or the Master Servicer or the Special Servicer shall be indemnified
and held harmless by the Trust Fund against any loss, liability or expense
incurred in connection with, or relating to, this Agreement or the Certificates,
other than any loss, liability or expense (including legal fees and expenses)
(i) incurred by reason of willful misconduct, bad faith, fraud or negligence in
the performance or disregard of duties hereunder, in each case by the Person
being indemnified; or (ii) with respect to any such party, resulting from the
breach by such party of any of its representations or warranties contained
herein. Neither the Depositor nor the Master Servicer nor the Special Servicer
shall be under any obligation to appear in, prosecute or defend any legal action
unless such action is related to its respective duties under this Agreement and
in its opinion it will be repaid for any expense or liability or receive
adequate indemnity against such risk or liability; provided, however, that the
Depositor or the Master Servicer or the Special Servicer may in its discretion
undertake any such action related to its obligations hereunder which it may deem
necessary or desirable with respect to this Agreement and the rights and duties
of the parties hereto and the interests of the Certificateholders hereunder. In
such event, the legal expenses and costs of such action and any liability
resulting therefrom shall be expenses, costs and liabilities of the Trust Fund,
and the Depositor, the Master Servicer and the Special Servicer shall be
entitled to be reimbursed therefor from the Collection Account as provided in
Section 3.06 of this Agreement.
SECTION 6.04. Limitation on Resignation of the Master Servicer or
Special Servicer.
(a) In addition to the matters provided in Sections 3.01(c) and 6.02, each
of the Master Servicer and the Special Servicer may assign its respective rights
and delegate its respective duties and obligations under this Agreement,
provided that: (i) the purchaser or transferee accepting such assignment and
delegation (A) shall be satisfactory to the Trustee and to the Depositor, (B)
shall be an established mortgage finance institution, bank or mortgage servicing
institution, organized and doing business under the laws of any state of the
United States or the District of Columbia, authorized under such laws to perform
the duties of a servicer of mortgage loans or a Person resulting from a merger,
consolidation or succession that is permitted under Section 6.02, and (C) shall
execute and deliver to the Trustee an agreement, in form and substance
reasonably satisfactory to the Trustee, which contains an assumption by such
Person of the due and punctual performance and observance of each covenant and
condition to be performed or observed by the Master Servicer or the Special
Servicer, as the case may be, under this Agreement from and after the date of
such agreement; (ii) as confirmed by a letter from each Rating Agency delivered
to the Trustee, each Rating Agency's rating or ratings of the Regular
Certificates in effect immediately prior to such assignment, sale, transfer or
delegation will not be qualified, downgraded or withdrawn as a result of such
assignment, sale, transfer or delegation; (iii) the Master Servicer or the
Special Servicer shall not be released from its obligations under this Agreement
that arose prior to the effective date of such assignment and delegation under
this Section 6.04; and (iv) the rate at which the Servicing Fee or Special
Servicing Compensation, as applicable (or any component thereof) is calculated
shall not exceed the rate then in effect. Upon acceptance of such assignment and
delegation, the purchaser or transferee shall be the successor Master Servicer
or Special Servicer, as applicable, hereunder.
(b) Except as provided in this Section 6.04, the Master Servicer and the
Special Servicer shall not resign from their respective obligations and duties
hereby imposed on them except upon determination that such duties hereunder are
no longer permissible under applicable law. Any such determination permitting
the resignation of the Master Servicer or the Special Servicer, as applicable,
shall be evidenced by an Opinion of Counsel (obtained at the resigning Master
Servicer's or Special Servicer's expense) to such effect delivered to the
Trustee.
No resignation or removal of the Master Servicer or the Special Servicer as
contemplated herein shall become effective until the Trustee or a successor
Master Servicer or Special Servicer shall have assumed the Master Servicer's or
the Special Servicer's responsibilities, duties, liabilities and obligations
hereunder. If no successor Master Servicer or Special Servicer can be obtained
to perform such obligations for the same compensation to which the terminated
Master Servicer or Special Servicer would have been entitled, additional amounts
payable to such successor Master Servicer or Special Servicer shall be treated
as Realized Losses.
Notwithstanding the foregoing, if the Master Servicer acquires any
Affiliate Loan, the Master Servicer shall promptly resign as Master Servicer
hereunder in accordance with this Section 6.04, and if the Master Servicer fails
to promptly resign, the Trustee shall terminate the Master Servicer with respect
to such Mortgage Loan, in accordance with the provisions set forth in Section
7.01 and Section 7.02. Notwithstanding the foregoing, if the Special Servicer
acquires any Affiliate Loan, the Special Servicer shall promptly resign as
Special Servicer hereunder with respect to such Mortgage Loan in accordance with
Section 6.04 hereof, and if the Special Servicer fails to promptly resign, the
Trustee shall terminate the Special Servicer with respect to such Mortgage Loan,
in accordance with the provisions set forth in Section 7.01 and Section 7.02.
SECTION 6.05. Rights of the Depositor and the Trustee in Respect of the
Master Servicer and Special Servicer.
The Master Servicer and the Special Servicer shall afford the Depositor,
the Trustee and the Rating Agencies, upon reasonable notice, during normal
business hours access to all records maintained by it in respect of its rights
and obligations hereunder and access to its officers responsible for such
obligations. Upon request, the Master Servicer and the Special Servicer shall
furnish to the Depositor and the Trustee its most recent annual financial
statements and such other information in its possession regarding its business,
affairs, property and condition, financial or otherwise as the party requesting
such information, in its reasonable judgment, determines to be relevant to the
performance of the obligations hereunder of the Master Servicer and the Special
Servicer; provided that such requesting party may not disclose the contents of
such financial statements to non-affiliated third parties (other than
accountants, attorneys, financial advisors or other third parties retained by
such requesting party) unless otherwise required by applicable law. The
Depositor may, but is not obligated to, enforce the obligations of the Master
Servicer or the Special Servicer hereunder which are in default and may, but is
not obligated to, perform, or cause a designee to perform, any defaulted
obligation of such Person hereunder or exercise its rights hereunder, provided
that the Master Servicer and the Special Servicer shall not be relieved of any
of their obligations hereunder by virtue of such performance by the Depositor or
its designee. In the event the Depositor or its designee undertakes any such
action it will be reimbursed by the Trust Fund from the Collection Account as
provided in Section 3.06 and Section 6.03 hereof to the extent not recoverable
from the Master Servicer or Special Servicer, as applicable. Neither the
Depositor nor the Trustee and neither the Master Servicer, with respect to the
Special Servicer, nor the Special Servicer, with respect to the Master Servicer,
shall have any responsibility or liability for any action or failure to act by
the Master Servicer or the Special Servicer and neither such Person is obligated
to monitor or supervise the performance of the Master Servicer or the Special
Servicer under this Agreement or otherwise.
Neither the Master Servicer nor the Special Servicer shall be under any
obligation to disclose confidential or proprietary information pursuant to this
Section.
SECTION 6.06. Master Servicer or Special Servicer as Owner of a
Certificate.
The Master Servicer or an Affiliate of the Master Servicer or the Special
Servicer or an Affiliate of the Special Servicer may become the Holder (or with
respect to a Global Certificate, Beneficial Owner) of any Certificate with the
same rights it would have if it were not the Master Servicer or the Special
Servicer or an Affiliate thereof, except as otherwise expressly provided herein.
If, at any time during which the Master Servicer or the Special Servicer or an
Affiliate of the Master Servicer or the Special Servicer is the Holder or
Beneficial Owner of any Certificate, the Master Servicer or the Special Servicer
proposes to take action (including for this purpose, omitting to take action)
that (i) is not expressly prohibited by the terms hereof and would not, in the
Master Servicer's or the Special Servicer's good faith judgment, violate the
Servicing Standard, and (ii) if taken, might nonetheless, in the Master
Servicer's or the Special Servicer's good faith judgment, be considered by other
Persons to violate the Servicing Standard, the Master Servicer or the Special
Servicer may seek the approval of the Certificateholders to such action by
delivering to the Trustee a written notice that (i) states that it is delivered
pursuant to this Section 6.06, (ii) identifies the Percentage Interest in each
Class of Certificates beneficially owned by the Master Servicer or the Special
Servicer or an Affiliate of the Master Servicer or the Special Servicer, and
(iii) describes in reasonable detail the action that the Master Servicer or the
Special Servicer proposes to take. The Trustee, upon receipt of such notice,
shall forward it to the Certificateholders (other than the Master Servicer and
its Affiliates or the Special Servicer and its Affiliates, as appropriate)
together with such instructions for response as the Trustee shall reasonably
determine. If at any time Certificateholders holding greater than 50% of the
Voting Rights of all Certificateholders (calculated without regard to the
Certificates beneficially owned by the Master Servicer or its Affiliates or the
Special Servicer or its Affiliates) shall have consented in writing to the
proposal described in the written notice, and if the Master Servicer or the
Special Servicer shall act as proposed in the written notice, such action shall
be deemed to comply with the Servicing Standard. The Trustee shall be entitled
to reimbursement from the Master Servicer or the Special Servicer, as
applicable, of the reasonable expenses of the Trustee incurred pursuant to this
paragraph. It is not the intent of the foregoing provision that the Master
Servicer or the Special Servicer be permitted to invoke the procedure set forth
herein with respect to routine servicing matters arising hereunder, except in
the case of unusual circumstances.
<PAGE>
ARTICLE VII
DEFAULT
SECTION 7.01. Events of Default.
(a) "Master Servicer Event of Default", wherever used herein, means any one
of the following events:
(i) any failure by the Master Servicer to remit to the Collection
Account or any failure by the Master Servicer to remit to the
Trustee for deposit into the Lower-Tier Distribution Account,
Deferred Interest Distribution Account or the Class Q
Distribution Account, any amount required to be so remitted by
the Master Servicer (including a P&I Advance) pursuant to, and at
the time specified by the terms of this Agreement, which failure
is not remedied by 11:00 a.m., New York City time, on the related
Distribution Date (provided, however, that the Master Servicer
will pay the Trustee interest on such late payment at the Advance
Rate from and including the related Distribution Date until such
late payment is received by the Trustee);
(ii) any failure on the part of the Master Servicer duly to observe or
perform in any material respect any of its other covenants or
agreements (including specifically the payment to the Trustee of
the Trustee Fee pursuant to Section 8.05), or the material breach
of its representations or warranties on the part of the Master
Servicer contained in this Agreement, which continues unremedied
for a period of 30 days after the date on which written notice of
such failure or breach, requiring the same to be remedied, shall
have been given to the Master Servicer by the Depositor or the
Trustee, or to the Master Servicer, the Depositor and the Trustee
by the Holders of Certificates evidencing Percentage Interests of
at least 25% of any Class affected thereby; provided that if such
default is not capable of being cured within such 30 day period
and the Master Servicer is diligently pursuing such cure (as
evidenced by an Officer's Certificate of the Master Servicer
setting forth the circumstances surrounding such delay and the
steps then being taken by the Master Servicer to effect a cure),
the Master Servicer shall be entitled to an additional 30 day
period; provided further that the failure of the Master Servicer
to perform any covenant or agreement contained herein (other than
as provided in clause (i) above) as a result of an inconsistency
between this Agreement and any Loan Document shall not be a
Master Servicer Event of Default hereunder;
(iii)confirmation in writing by any Rating Agency that not
terminating the Master Servicer would, in and of itself, cause
the then-current rating assigned to any Class of Certificates to
be qualified, withdrawn, or downgraded;
(iv) a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises in an involuntary case under
any present or future federal or state bankruptcy, insolvency or
similar law for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered
against the Master Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60
days;
(v) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or
similar proceedings of or relating to the Master Servicer, or of
or relating to all or substantially all of its property;
(vi) the Master Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute,
make an assignment for the benefit of its creditors, or
voluntarily suspend payment of its obligations; or
(vii)the Master Servicer shall fail to make any Property Advance
required to be made by the Master Servicer hereunder (whether or
not the Trustee makes such Property Advance), which failure
continues unremedied for a period of fifteen (15) days after the
date on which such Advance was first due (or for any shorter
period as may be required, if applicable, to avoid any lapse in
insurance coverage required under any Mortgage or this Agreement
with respect to any Mortgaged Property or to avoid any
foreclosure or similar action with respect to any Mortgaged
Property by reason of a failure to pay real estate taxes and
assessments); provided, however, that in the event the Trustee
makes a required Property Advance pursuant to Section 3.22(b) due
to the Master Servicer's failure to make a required Property
Advance, such Event of Default shall occur immediately upon the
making of such Property Advance by the Trustee; or
(viii) the Master Servicer shall breach the covenant set forth in
Section 2.04(d);
then, and in each and every such case, so long as a Master Servicer Event of
Default shall not have been remedied, the Trustee may, and at the written
direction of the Holders of at least 25% of the aggregate Voting Rights of all
Certificates shall, terminate the Master Servicer.
In the event that the Master Servicer is also the Special Servicer and the
Master Servicer is terminated as provided in this Section 7.01, the Master
Servicer shall also be terminated as Special Servicer.
(b) "Special Servicer Event of Default", wherever used herein, means any
one of the following events:
(i) any failure by the Special Servicer to remit to the Collection
Account any amount required to be so deposited by the Special
Servicer pursuant to, and at the time specified, and in
accordance with the terms of this Agreement;
(ii) any failure on the part of the Special Servicer duly to observe
or perform in any material respect any other of the covenants or
agreements, or the material breach of any representations or
warranties on the part of the Special Servicer contained in this
Agreement, which continues unremedied for a period of 30 days
after the date on which written notice of such failure or breach,
requiring the same to be remedied, shall have been given to the
Special Servicer by the Master Servicer, the Depositor, the
Trustee or by the Holders of Certificates evidencing Percentage
Interests of at least 25% of any Class affected thereby; provided
that if such default is not capable of being cured within such 30
day period and the Special Servicer is diligently pursuing such
cure (as evidenced by an Officer's Certificate of the Special
Servicer setting forth the circumstances surrounding such delay
and the steps then being taken by the Special Servicer to effect
a cure), the Special Servicer shall be entitled to an additional
30 day period; provided further that the failure of the Special
Servicer to perform any covenant or agreement contained herein
(other than as provided in clause (i) above) as a result of an
inconsistency between this Agreement and any Loan Document shall
not be a Special Servicer Event of Default hereunder;
(iii)confirmation in writing by any Rating Agency that failure to
remove the Special Servicer would, in and of itself, cause a
downgrade, qualification or withdrawal of the then current
ratings assigned to any Class of Certificates;
(iv) a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises in an involuntary case under
any present or future federal or state bankruptcy, insolvency or
similar law for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered
against the Special Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60
days;
(v) the Special Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or
similar proceedings of or relating to the Special Servicer, or of
or relating to all or substantially all of its property; or
(vi) the Special Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute,
make an assignment for the benefit of its creditors, or
voluntarily suspend payment of its obligations; or
(vii)the Special Servicer shall breach the covenant set forth in
Section 2.04(e);
then, and in each and every such case, so long as a Special Servicer Event of
Default shall not have been remedied, the Trustee may, and at the written
direction of the Holders of at least 25% of the aggregate Voting Rights of all
Certificates shall, terminate the Special Servicer.
(c) In the event that the Master Servicer or the Special Servicer is
terminated pursuant to this Section 7.01, the Trustee shall, by notice in
writing to the Master Servicer or the Special Servicer, as the case may be (the
"Terminated Party"), terminate all of its rights and obligations (but not the
liabilities for actions and omissions occurring prior hereto) of the Terminated
Party under this Agreement and in and to the Mortgage Loans and the proceeds
thereof, other than any rights the Terminated Party may have hereunder as a
Certificateholder and any rights or obligations that accrued prior to the date
of such termination (including the right to receive all amounts accrued or owing
to it under this Agreement, plus interest at the Advance Rate on such amounts
until received to the extent such amounts bear interest as provided in this
Agreement, with respect to periods prior to the date of such termination and the
right to the benefits of Section 6.03 notwithstanding any such termination). On
or after the receipt by the Terminated Party of such written notice, all of its
authority and power under this Agreement, whether with respect to the
Certificates (except that the Terminated Party shall retain its rights as a
Certificateholder in the event and to the extent that it is a Certificateholder)
or the Mortgage Loans or otherwise, shall pass to and be vested in the 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 Terminated Party, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. The Master Servicer and
the Special Servicer each agrees that, in the event it is terminated pursuant to
this Section 7.01, it shall promptly (and in any event no later than ten
Business Days subsequent to such notice) provide, at its own expense, the
Trustee or a successor Master Servicer or successor Special Servicer, as
applicable, with all documents and records requested by the Trustee or such
successor Master Servicer or successor Special Servicer, as applicable, to
enable the Trustee or such successor Master Servicer or successor Special
Servicer, as applicable, to assume its functions hereunder, and to cooperate
with the Trustee and the successor to its responsibilities hereunder in
effecting the termination of its responsibilities and rights hereunder,
including, without limitation, the transfer to the successor Master Servicer or
successor Special Servicer or the Trustee, as applicable, for administration by
it of all cash amounts which shall at the time be or should have been credited
by the Master Servicer or the Special Servicer to the Collection Account, any
REO Account or Lock-Box Account or shall thereafter be received with respect to
the Mortgage Loans, and shall promptly provide the Trustee or such successor
Master Servicer or Special Servicer (which may include the Trustee), as
applicable, all documents and records reasonably requested by it, such documents
and records to be provided in such form as the Trustee or such successor Master
Servicer or Special Servicer shall reasonably request (including electromagnetic
form), to enable it to assume the Master Servicer's or Special Servicer's
function hereunder. All reasonable costs and expenses of the Trustee or the
successor Master Servicer or successor Special Servicer incurred in connection
with transferring the Mortgage Files to the successor Master Servicer or Special
Servicer and amending this Agreement to reflect such succession as successor
Master Servicer or successor Special Servicer pursuant to this Section 7.01
shall be paid by the predecessor Master Servicer or the Special Servicer, as
applicable, upon presentation of reasonable documentation of such costs and
expenses. If the predecessor Master Servicer or Special Servicer (as the case
may be) has not reimbursed the Trustee or the successor Master Servicer or
Special Servicer for such expenses within 90 days after the presentation of
reasonable documentation, such expense shall be reimbursed by the Trust Fund;
provided that the Terminated Party shall not thereby be relieved of its
liability for such expenses.
SECTION 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer or the Special Servicer receives
a notice of termination pursuant to Section 7.01, the Trustee shall be its
successor in all respects in its capacity as Master Servicer or Special Servicer
under this Agreement and the transactions set forth or provided for herein and,
except as provided herein, shall be subject to all the responsibilities, duties,
limitations on liability and liabilities relating thereto and arising thereafter
placed on the Master Servicer or Special Servicer by the terms and provisions
hereof; provided, however, that (i) the Trustee shall have no responsibilities,
duties, liabilities or obligations with respect to any act or omission of the
Master Servicer or Special Servicer and (ii) any failure to perform, or delay in
performing, such duties or responsibilities caused by the Terminated Party's
failure to provide, or delay in providing, records, tapes, disks, information or
monies shall not be considered a default by such successor hereunder. The
Trustee, as successor Master Servicer or successor Special Servicer, shall have
the same right to indemnification as the Master Servicer or Special Servicer, as
applicable, had under this Agreement prior to the Master Servicer's or the
Special Servicer's termination. The appointment of a successor Master Servicer
or successor Special Servicer shall not affect any liability of the predecessor
Master Servicer or Special Servicer which may have arisen prior to its
termination as Master Servicer or Special Servicer. The Trustee shall not be
liable for any of the representations and warranties of the Master Servicer or
Special Servicer herein or in any related document or agreement, for any acts or
omissions of the predecessor Master Servicer or predecessor Special Servicer or
for any losses incurred in respect of any Permitted Investment by the Master
Servicer pursuant to Section 3.07 hereunder nor shall the Trustee be required to
purchase any Mortgage Loan hereunder. As compensation therefor, the Trustee as
successor Master Servicer or successor Special Servicer shall be entitled to the
Servicing Fee or Special Servicing Compensation, as applicable, and all funds
relating to the Mortgage Loans that accrue after the date of the Trustee's
succession to which the Master Servicer or Special Servicer would have been
entitled if the Master Servicer or Special Servicer, as applicable, had
continued to act hereunder. In the event any Advances made by the Master
Servicer, the Special Servicer and the Trustee shall at any time be outstanding,
or any amounts of interest thereon shall be accrued and unpaid, all amounts
available to repay Advances and interest hereunder shall be applied entirely to
the Advances made by the Trustee (and the accrued and unpaid interest thereon),
until such Advances and interest shall have been repaid in full. Notwithstanding
the above, the Trustee may, if it shall be unwilling to so act, or shall, if it
is unable to so act, or if the Holders of Certificates entitled to at least 25%
of the aggregate Voting Rights so request in writing to the Trustee, or if the
Trustee is not rated by each Rating Agency in one of its two highest long-term
debt rating categories or if the Rating Agencies do not provide written
confirmation that the succession of the Trustee, as Master Servicer or Special
Servicer, as applicable, will not cause a downgrade, qualification or withdrawal
of the then current ratings assigned to the Certificates, promptly appoint, or
petition a court of competent jurisdiction to appoint, any established mortgage
loan servicing institution, the appointment of which will not result in a
downgrade, qualification or withdrawal of the then current rating or ratings
assigned to any Class of Certificates as evidenced in writing by each Rating
Agency, as the successor to the Master Servicer or Special Servicer, as
applicable, hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer or Special
Servicer hereunder. No appointment of a successor to the Master Servicer or
Special Servicer hereunder shall be effective until the assumption by such
successor of all the Master Servicer's or Special Servicer's responsibilities,
duties and liabilities hereunder. Pending appointment of a successor to the
Master Servicer (or the Special Servicer if the Special Servicer is also the
Master Servicer) hereunder, unless the Trustee shall be prohibited by law from
so acting, the Trustee shall act in such capacity as herein above provided.
Pending the appointment of a successor to the Special Servicer, the Trustee
shall act in such capacity as provided in this Section 7.02. In connection with
such appointment and assumption described herein, the Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided, however, that no such
compensation shall be in excess of that permitted the Terminated Party
hereunder, provided, further, that if no successor to the Terminated Party can
be obtained to perform the obligations of such Terminated Party hereunder,
additional amounts shall be paid to such successor and such amounts in excess of
that permitted the Terminated Party shall be treated as Realized Losses. The
Depositor, the Trustee, the Master Servicer or Special Servicer and such
successor shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession.
SECTION 7.03. Notification to Certificateholders.
(a) Upon any termination pursuant to Section 7.01 above or appointment of a
successor to the Master Servicer or the Special Servicer, the Trustee shall give
prompt written notice thereof to Certificateholders at their respective
addresses appearing in the Certificate Register and to each Rating Agency.
(b) Within 30 days after the occurrence of any Event of Default of which a
Responsible Officer of the Trustee has actual knowledge, the Trustee shall
transmit by mail to all Holders of Certificates and to each Rating Agency notice
of such Event of Default, unless such Event of Default shall have been cured or
waived.
SECTION 7.04. Other Remedies of Trustee.
During the continuance of any Master Servicer Event of Default or a Special
Servicer Event of Default when the Master Servicer is also serving as Special
Servicer, so long as such Master Servicer Event of Default or Special Servicer
Event of Default, if applicable, shall not have been remedied, the Trustee, in
addition to the rights specified in Section 7.01, shall have the right, in its
own name as trustee of an express trust, to take all actions now or hereafter
existing at law, in equity or by statute to enforce its rights and remedies and
to protect the interests, and enforce the rights and remedies, of the
Certificateholders (including the institution and prosecution of all judicial,
administrative and other proceedings and the filing of proofs of claim and debt
in connection therewith). In such event, the legal fees, expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Trust Fund, and the Trustee shall be entitled to be
reimbursed therefor from the Collection Account as provided in Section 3.06.
Except as otherwise expressly provided in this Agreement, no remedy provided for
by this Agreement shall be exclusive of any other remedy, and each and every
remedy shall be cumulative and in addition to any other remedy and no delay or
omission to exercise any right or remedy shall impair any such right or remedy
or shall be deemed to be a waiver of any Master Servicer Event of Default or
Special Servicer Event of Default, if applicable.
SECTION 7.05. Waiver of Past Events of Default; Termination.
The Holders of Certificates (other than the Master Servicer or the Special
Servicer, as applicable) evidencing not less than 66-2/3% of the aggregate
Voting Rights of the Certificates (exclusive of such Certificates held by the
Master Servicer or the Special Servicer) may, on behalf of all Holders of
Certificates, waive any default by the Master Servicer or Special Servicer in
the performance of its obligations hereunder and its consequences, except a
default in making any required deposits (including P&I Advances) to or payments
from the Collection Account or the Lower-Tier Distribution Account or in
remitting payments as received, in each case in accordance with this Agreement.
Upon any such waiver of a past default, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereon. Any reasonable costs
and expenses incurred by the Trustee in connection with such default and prior
to such waiver shall be reimbursed by the Master Servicer or the Special
Servicer, as applicable, promptly upon demand therefor and if not reimbursed to
the Trustee within 90 days of such demand, from the Trust Fund; provided, that
the Trust Fund shall be reimbursed by the Master Servicer or the Special
Servicer, as applicable, to the extent such amounts are reimbursed to the
Trustee from the Trust Fund.
<PAGE>
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default of which a
Responsible Officer of the Trustee has actual knowledge and after the curing or
waiver of all Events of Default which may have occurred, undertakes to perform
such duties and only such duties as are specifically set forth in this Agreement
and no permissive right of the Trustee shall be construed as a duty. During the
continuance of an Event of Default of which a Responsible Officer of the Trustee
has actual knowledge, the Trustee, subject to the provisions of Sections 7.02
and 7.04, shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) The Trustee, upon receipt of any resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform on their face to the requirements of this Agreement to the extent
specifically set forth herein; provided, however, that, the Trustee shall not be
responsible for the accuracy or content of any such resolution, certificate,
statement, opinion, report, document, order or other instrument provided to it
hereunder. If any such instrument is found not to conform on its face to the
requirements of this Agreement in a material manner, the Trustee shall request a
corrected instrument, and if the instrument is not corrected to the Trustee's
reasonable satisfaction, the Trustee will provide notice thereof to the
Certificateholders.
(c) Neither the Trustee nor any of its officers, directors, employees,
agents or "control" persons within the meaning of the Act shall have any
liability arising out of or in connection with this Agreement, provided, that,
subject to Section 8.02, no provision of this Agreement shall be construed to
relieve the Trustee, or any such person, from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct or its
own bad faith; and provided, further, that:
(i) Prior to the occurrence of an Event of Default of which a
Responsible Officer of the Trustee has actual knowledge, and
after the curing or waiver of all such Events of Default which
may have occurred, the duties and obligations of the Trustee
shall be determined solely by the express provisions of this
Agreement, the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Agreement, no implied covenants or obligations
shall be read into this Agreement against the Trustee and, in the
absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
resolutions, certificates, statements, reports, opinions,
documents, orders or other instruments furnished to the Trustee
that conform on their face to the requirements of this Agreement
without responsibility for investigating the contents thereof;
(ii) The Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or
Responsible Officers, unless it shall be proved that the Trustee
was negligent in ascertaining the pertinent facts;
(iii)The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith
in accordance with the direction of Holders of Certificates
entitled to greater than 50% of the Percentage Interests (or such
other percentage as is specified herein) of each affected Class,
or of the aggregate Voting Rights of the Certificates, relating
to the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Agreement;
(iv) Neither the Trustee nor any of its respective directors,
officers, employees, agents or control persons shall be
responsible for any act or omission of any Custodian, Paying
Agent or Certificate Registrar that is not an Affiliate of the
Trustee and that is selected other than by the Trustee, performed
or omitted in compliance with any custodial or other agreement,
or any act or omission of the Master Servicer, Special Servicer,
the Depositor or any other third Person, including, without
limitation, in connection with actions taken pursuant to this
Agreement;
(v) The Trustee shall not be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to
its respective duties as Trustee in accordance with this
Agreement (and, if it does, all legal expenses and costs of such
action shall be expenses and costs of the Trust Fund), and the
Trustee shall be entitled to be reimbursed therefor from the
Collection Account, unless such legal action arises out of the
negligence or bad faith of the Trustee or any breach of an
obligation, representation, warranty or covenant of the Trustee
contained herein; and
(vi) The Trustee shall not be charged with knowledge of any act,
failure to act or breach of any Person upon the occurrence of
which the Trustee may be required to act, unless a Responsible
Officer of the Trustee obtains actual knowledge of such failure.
The Trustee shall be deemed to have actual knowledge of the
Master Servicer's or the Special Servicer's failure to provide
scheduled reports, certificates and statements when and as
required to be delivered to the Trustee pursuant to this
Agreement.
None of the provisions contained in this Agreement shall require the
Trustee, in its capacity as Trustee, to expend or risk its own funds, or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if in the opinion
of the Trustee the repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it, and none of the provisions
contained in this Agreement shall in any event require the Trustee to perform,
or be responsible for the manner of performance of, any of the obligations of
the Master Servicer or the Special Servicer under this Agreement, except during
such time, if any, as the Trustee shall be the successor to, and be vested with
the rights, duties, powers and privileges of, the Master Servicer or the Special
Servicer in accordance with the terms of this Agreement. The Trustee shall not
be required to post any surety or bond of any kind in connection with its
performance of its obligations under this Agreement and the Trustee shall not be
liable for any loss on any investment of funds pursuant to this Agreement (other
than any funds invested with it in its commercial capacity). The provisions of
this Article VIII relating to the Trustee shall apply to the Trustee in any
capacity under which it is acting pursuant to this Agreement; provided, however,
that if Trustee has assumed the duties of Master Servicer or Special Servicer
pursuant to the terms of this Agreement, the Trustee shall be subject to the
terms of this Agreement applicable to the Master Servicer or Special Servicer,
as applicable.
SECTION 8.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) The Trustee may request and/or rely upon and shall be protected
in acting or refraining from acting upon any resolution,
Officers' Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal;
(ii) The Trustee may consult with counsel and any Opinion of Counsel
shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such Opinion of
Counsel;
(iii)(A) The Trustee shall be under no obligation to institute,
conduct or defend any litigation hereunder or in relation hereto
at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby; (B) the
right of the Trustee to perform any discretionary act enumerated
in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or
willful misconduct in the performance of any such act; and (C)
provided, that subject to the foregoing clause (A), nothing
contained herein shall relieve the Trustee of the obligations,
upon the occurrence of an Event of Default (which has not been
cured or waived) of which a Responsible Officer of the Trustee
has actual knowledge, to exercise such of the rights and powers
vested in it by this Agreement, and to use the same degree of
care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such
person's own affairs;
(iv) Neither the Trustee nor any of its directors, officers,
employees, Affiliates, agents or "control" persons within the
meaning of the Act shall be personally liable for any action
taken, suffered or omitted by it in good faith and reasonably
believed by the Trustee to be authorized or within the discretion
or rights or powers conferred upon it by this Agreement;
(v) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document, unless
requested in writing to do so by Holders of Certificates entitled
to at least 25% (or such other percentage as is specified herein)
of the Percentage Interests of any affected Class; provided,
however, that if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the
opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Agreement, the
Trustee may require reasonable indemnity against such expense or
liability as a condition to taking any such action. The
reasonable expense of every such investigation shall be paid by
the Master Servicer or the Special Servicer, as applicable, if an
Event of Default shall have occurred and be continuing relating
to the Master Servicer, or the Special Servicer, respectively,
and otherwise by the Certificateholders requesting the
investigation; and
(vi) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through
agents or attorneys but shall not be relieved of its obligations
hereunder.
(b) Following the Start-up Day, the Trustee shall not, except as expressly
required by any provision of this Agreement, accept any contribution of assets
to the Trust Fund unless the Trustee shall have received an Opinion of Counsel
(the costs of obtaining such opinion to be borne by the Person requesting such
contribution) to the effect that the inclusion of such assets in the Trust Fund
will not cause either the Upper-Tier REMIC or the Lower-Tier REMIC to fail to
qualify as a REMIC at any time that any Certificates are outstanding or subject
either the Upper-Tier REMIC or the Lower-Tier REMIC to any tax under the REMIC
Provisions or other applicable provisions of federal, state and local law or
ordinances.
(c) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of this Agreement.
The Trustee shall have no duty to conduct any affirmative investigation as
to the occurrence of any condition requiring the repurchase of any Mortgage Loan
by the Depositor pursuant to this Agreement or the eligibility of any Mortgage
Loan for purposes of this Agreement.
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates shall not be taken as
the statements of the Trustee, the Master Servicer, or the Special Servicer, and
the Trustee, the Master Servicer and Special Servicer assume no responsibility
for their correctness. The Trustee, the Master Servicer and Special Servicer
make no representations or warranties as to the validity or sufficiency of this
Agreement, of the Certificates or any prospectus used to offer the Certificates
for sale or the validity, enforceability or sufficiency of any Mortgage Loan or
related document. The Trustee shall not at any time have any responsibility or
liability for or with respect to the legality, validity and enforceability of
any Mortgage, any Mortgage Loan, or the perfection and priority of any Mortgage
or the maintenance of any such perfection and priority, or for or with respect
to the sufficiency of the Trust Fund or its ability to generate the payments to
be distributed to Certificateholders under this Agreement. Without limiting the
foregoing, the Trustee shall not be liable or responsible for: the existence,
condition and ownership of any Mortgaged Property; the existence of any hazard
or other insurance thereon (other than if the Trustee shall assume the duties of
the Master Servicer or the Special Servicer pursuant to Section 7.02) or the
enforceability thereof; the existence of any Mortgage Loan or the contents of
the related Mortgage File on any computer or other record thereof (other than if
the Trustee shall assume the duties of the Master Servicer or the Special
Servicer pursuant to Section 7.02); the validity of the assignment of any
Mortgage Loan to the Trust Fund or of any intervening assignment; the
completeness of any Mortgage File (except for its review thereof pursuant to
Section 2.02); the performance or enforcement of any Mortgage Loan (other than
if the Trustee shall assume the duties of the Master Servicer or the Special
Servicer pursuant to Section 7.02); the compliance by the Depositor, the Master
Servicer or the Special Servicer with any warranty or representation made under
this Agreement or in any related document or the accuracy of any such warranty
or representation prior to the Trustee's receipt of notice or other discovery of
any non-compliance therewith or any breach thereof; any investment of monies by
or at the direction of the Master Servicer or any loss resulting therefrom
(other than if the Trustee shall assume the duties of the Master Servicer or the
Special Servicer pursuant to Section 7.02), it being understood that the Trustee
shall remain responsible for any Trust Fund property that it may hold in its
individual capacity; the acts or omissions of any of the Depositor, the Master
Servicer or the Special Servicer (other than if the Trustee shall assume the
duties of the Master Servicer or Special Servicer pursuant to Section 7.02) or
any sub-Master Servicer or any Borrower; any action of the Master Servicer or
Special Servicer (other than if the Trustee shall assume the duties of the
Master Servicer or the Special Servicer pursuant to Section 7.02) or any
sub-Master Servicer taken in the name of the Trustee, except to the extent such
action is taken at the express written direction of the Trustee; the failure of
the Master Servicer or the Special Servicer or any sub-Master Servicer to act or
perform any duties required of it on behalf of the Trust Fund or the Trustee
hereunder; or any action by or omission of the Trustee taken at the instruction
of the Master Servicer or the Special Servicer (other than if the Trustee shall
assume the duties of the Master Servicer or the Special Servicer pursuant to
Section 7.02) unless the taking of such action is not permitted by the express
terms of this Agreement; provided, however, that the foregoing shall not relieve
the Trustee of its obligation to perform its duties as specifically set forth in
this Agreement. The Trustee shall not be accountable for the use or application
by the Depositor, the Master Servicer or the Special Servicer of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor, the Master Servicer or the
Special Servicer in respect of the assignment of the Mortgage Loans or deposited
in or withdrawn from the Collection Account, Lower-Tier Distribution Account,
Upper-Tier Distribution Account, Class Q Distribution Account, Interest Reserve
Account, Deferred Interest Distribution Account, Lock Box Account, Cash
Collateral Account, Reserve Accounts or any other account maintained by or on
behalf of the Master Servicer or the Special Servicer, other than any funds held
by the Trustee. Except as provided in Section 2.01, the Trustee shall not have
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder (unless the Trustee shall have
become the successor Master Servicer) or to record this Agreement. In making any
calculation hereunder which includes as a component thereof the payment or
distribution of interest for a stated period at a stated rate "to the extent
permitted by applicable law," the Trustee shall assume that such payment is so
permitted unless a Responsible Officer of the Trustee has actual knowledge, or
receives an Opinion of Counsel (at the expense of the Person asserting the
impermissibility) to the effect that such payment is not permitted by applicable
law.
The Trustee and the Certificate Registrar shall have no liability for
transfers, including transfers made through the book-entry facilities of the
Depository or between or among Depository Participants or beneficial owners of
the Certificates, made in violation of applicable restrictions.
SECTION 8.04. Trustee May Own Certificates.
The Trustee and any agent of the Trustee in its individual capacity or any
other capacity may become the owner or pledgee of Certificates, and may deal
with the Depositor and the Master Servicer in banking transactions, with the
same rights it would have if it were not Trustee or such agent.
SECTION 8.05. Payment of Trustee Fees and Expenses; Indemnification.
(a) The Trustee or any successor Trustee shall be entitled, on each
Distribution Date, to the Trustee Fee (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
for all services rendered by the Trustee in the execution of the trusts hereby
created and in the exercise and performance of any of the powers and duties
hereunder of the Trustee, which Trustee Fee shall be paid to the Trustee prior
to the distribution on such Distribution Date of amounts to the
Certificateholders. In the event that the Trustee assumes the servicing
responsibilities of the Master Servicer or the Special Servicer hereunder
pursuant to or otherwise arising from the resignation or removal of the Master
Servicer or the Special Servicer, the Trustee shall be entitled to the
compensation to which the Master Servicer or the Special Servicer, as the case
may be, would have been entitled.
(b) The Trustee shall be paid or reimbursed by the Trust Fund upon its
request for all reasonable expenses, disbursements and advances incurred or made
by the Trustee pursuant to and in accordance with any of the provisions of this
Agreement (including the reasonable compensation and the expenses and
disbursements of its counsel and of all persons not regularly in its employ) to
the extent such payments are "unanticipated expenses" as described in clause (d)
below, except any such expense, disbursement or advance as may arise from its
negligence or bad faith; provided, however, that, subject to the last paragraph
of Section 8.01, the Trustee shall not refuse to perform any of its duties
hereunder solely as a result of the failure to be paid the Trustee Fee and the
Trustee's expenses.
The Master Servicer and the Special Servicer covenant and agree to pay or
reimburse the Trustee for the reasonable out-of-pocket expenses incurred or made
by the Trustee in connection with any transfer of the servicing responsibilities
of the Master Servicer or the Special Servicer, respectively, hereunder,
pursuant to or otherwise arising from the resignation or removal of the Master
Servicer or the Special Servicer, in accordance with any of the provisions of
this Agreement (and including the reasonable fees and expenses and disbursements
of its counsel and all other persons not regularly in its employ), except any
such expense, disbursement or advance as may arise from the negligence or bad
faith of the Trustee. The holders of a majority of the Percentage Interests of
the Directing Class who are entitled to remove the Special Servicer and appoint
a successor Special Servicer to Midland Loan Services, Inc. (the initial Special
Servicer) will be required to pay or reimburse the Trustee and the initial
Special Servicer for the reasonable out-of-pocket expenses incurred or made by
the Trustee and the initial Special Servicer in connection with any transfer of
the servicing responsibilities of the Special Servicer hereunder, pursuant to or
otherwise arising from the removal of the Special Servicer without cause in
accordance with Section 3.23 of this Agreement (and including the reasonable
fees and expenses and disbursements of its counsel and all other persons not
regularly in its employ), except, in the case of the Trustee any such expense,
disbursement or advance as may arise from the negligence, willful misconduct or
bad faith of the Trustee. If such amounts are not paid pursuant to the preceding
sentence, prior to becoming Special Servicer, such successor Special Servicer
will be required to pay such amounts.
(c) Each of the Paying Agent, the Certificate Registrar, the Custodian, the
Depositor, the Master Servicer and the Special Servicer (each, an "Indemnifying
Party") shall indemnify the Trustee and its Affiliates and each of the
directors, officers, employees and agents of the Trustee and its Affiliates
(each, an "Indemnified Party"), and hold each of them harmless against any and
all claims, losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees and
expenses that the Indemnified Party may sustain in connection with this
Agreement (including, without limitation, reasonable fees and disbursements of
counsel incurred by the Indemnified Party in any action or proceeding between
the Indemnifying Party and the Indemnified Party or between the Indemnified
Party and any third party or otherwise) related to each such Indemnifying
Party's respective willful misconduct, bad faith, fraud and/or negligence in the
performance of each of its respective duties hereunder or by reason of reckless
disregard of its respective obligations and duties hereunder (including in the
case of the Master Servicer, any agent of the Master Servicer or subservicer of
the Master Servicer).
(d) The Trust Fund shall indemnify each Indemnified Party from, and hold it
harmless against, any and all losses, liabilities, damages, claims or
unanticipated expenses (including, without limitation, reasonable fees and
disbursements of counsel incurred by the Indemnified Party in any action or
proceeding between the Indemnifying Party and the Indemnified Party or between
the Indemnified Party and any third party or otherwise) arising in respect of
this Agreement or the Certificates, in each case to the extent and only to the
extent, such payments are expressly reimbursable under this Agreement, or are
unanticipated expenses (as defined below), other than (i) those resulting from
the negligence, fraud, bad faith or willful misconduct of the Indemnified Party
and (ii) those as to which such Indemnified Party is entitled to indemnification
pursuant to Section 8.05(c). The term "unanticipated expenses" shall include, by
way of example, any fees, expenses and disbursement of any separate trustee or
co-trustee appointed hereunder, only to the extent such fees, expenses and
disbursements were not reasonably anticipated as of the Closing Date, and the
losses, liabilities, damages, claims or incremental expenses (including
reasonable attorneys' fees) incurred or advanced by an Indemnified Party in
connection with (i) a default under any Mortgage Loan and (ii) any litigation
arising out of this Agreement, including, without limitation, under Section
2.03, Section 3.10, the third paragraph of Section 3.11, Section 4.05 and
Section 7.01. The right of reimbursement of the Indemnified Parties under this
Section 8.05(d) shall be senior to the rights of all Certificateholders.
(e) Notwithstanding anything herein to the contrary, this Section 8.05
shall survive the termination or maturity of this Agreement or the resignation
or removal of the Trustee as regards rights accrued prior to such resignation or
removal and (with respect to any acts or omissions during their respective
tenures) the resignation, removal or termination of the Master Servicer, the
Special Servicer, the Paying Agent, the Certificate Registrar or the Custodian.
(f) This Section 8.05 shall be expressly construed to include, but not be
limited to, such indemnities, compensation, expenses, disbursements, advances,
losses, liabilities, damages and the like, as may pertain or relate to any
environmental law or environmental matter.
SECTION 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation or association
organized and doing business under the laws of any state or the United States of
America, authorized under such laws to exercise corporate trust powers and to
accept the trust conferred under this Agreement, having a combined capital and
surplus of at least $50,000,000 and a rating on its unsecured long-term debt of
at least "AA" by DCR and S&P and subject to supervision or examination by
federal or state authority and shall not be an Affiliate of the Master Servicer
(except during any period when the Trustee has assumed the duties of the Master
Servicer pursuant to Section 7.02) or such other rating as the Rating Agencies
confirm in writing would not result in a downgrade, qualification or withdrawal
of the then current ratings assigned to the Certificates. If a corporation or
association publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for purposes of this Section the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In the event that the place
of business from which the Trustee administers the Trust Fund is a state or
local jurisdiction that imposes a tax on the Trust Fund or the net income of a
REMIC (other than a tax corresponding to a tax imposed under the REMIC
Provisions) the Trustee shall elect either to (i) resign immediately in the
manner and with the effect specified in Section 8.07, (ii) pay such tax from its
own funds and continue as Trustee or (iii) administer the Trust Fund from a
state and local jurisdiction that does not impose such a tax. In case at any
time the Trustee shall cease to be eligible in accordance with the provisions of
this Section, the Trustee shall resign immediately in the manner and with the
effect specified in Section 8.07.
SECTION 8.07. Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Depositor, the Master Servicer
and each Rating Agency. Upon such notice of resignation the Depositor shall
promptly appoint a successor Trustee, the appointment of which would not, as
evidenced in writing from each of the Rating Agencies, in and of itself, result
in a downgrade, qualification or withdrawal of the then current ratings assigned
to the Certificates. If no successor Trustee shall have been so appointed and
have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 8.06 and shall fail to resign after written request
therefor by the Depositor or Master Servicer, or if at any time the Trustee
shall become incapable of acting, or shall be adjudged bankrupt or insolvent, or
a receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or upon
a confirmation in writing by any Rating Agency that not terminating the Trustee
would, in and of itself, cause the then-current rating assigned to any Class of
Certificates to be qualified, withdrawn or downgraded, then the Depositor may
remove the Trustee and promptly appoint a successor Trustee by written
instrument, which shall be delivered to the Trustee so removed and to the
successor Trustee. The Holders of Certificates entitled to at least 50% of the
Voting Rights of all of the Certificates may at any time remove the Trustee and
appoint a successor Trustee by written instrument or instruments, in seven
originals, signed by such Holders or their attorneys-in-fact duly authorized,
one complete set of which instruments shall be delivered to the Depositor, one
complete set to the Master Servicer, one complete set to the Trustee so removed,
one complete set to the successor Trustee so appointed; provided, however, that
the fee paid to the successor Trustee shall in no event be greater than the
Trustee Fee. All expenses incurred by the Trustee upon any removal without cause
shall be paid by the party(ies) terminating the Trustee. Such termination shall
not be effective until such expenses have been paid.
In the event that the Trustee is terminated or removed pursuant to this
Section 8.07, all of its rights and obligations under this Agreement and in and
to the Mortgage Loans shall be terminated, other than any rights or obligations
that accrued prior to the date of such termination or removal (including the
right to receive all fees, expenses and other amounts accrued or owing to it
under this Agreement, plus interest at the Advance Rate on all such amounts
until received to the extent such amounts bear interest as provided in this
Agreement, with respect to periods prior to the date of such termination or
removal).
Any resignation or removal of the Trustee and appointment of a successor
Trustee shall not become effective until acceptance of appointment by the
successor Trustee as provided in Section 8.08.
SECTION 8.08. Successor Trustee.
(a) Any successor Trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Depositor, the Master Servicer and to
the predecessor Trustee instruments accepting their appointment hereunder, and
thereupon the resignation or removal of the predecessor Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as Trustee herein, provided that the appointment of such successor Trustee
shall not, as evidenced in writing by each Rating Agency, result in a downgrade,
qualification or withdrawal of the then current ratings assigned to the
Certificates. The predecessor Trustee shall deliver to the successor Trustee all
Mortgage Files and related documents and statements held by it hereunder, and
the Depositor and the predecessor Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for more
fully and certainly vesting and confirming in the successor Trustee all such
rights, powers, duties and obligations. No successor Trustee shall accept
appointment as provided in this Section 8.08 unless at the time of such
acceptance such successor Trustee shall be eligible under the provisions of
Section 8.06.
Upon acceptance of appointment by a successor Trustee as provided in this
Section 8.08, the Depositor shall mail notice of the succession of such Trustee
hereunder to all Holders of Certificates at their addresses as shown in the
Certificate Register. If the Depositor fails to mail such notice within 10 days
after acceptance of appointment by the successor Trustee, the successor Trustee
shall cause such notice to be mailed at the expense of the Depositor.
(b) Any successor Trustee appointed pursuant to this Agreement shall
satisfy the eligibility requirements set forth in Section 8.06 hereof.
SECTION 8.09. Merger or Consolidation of Trustee.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be eligible under the provisions of Section
8.06, without the execution or filing of any paper or any further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions hereof, at any time, for the purpose
of meeting any legal requirements of any jurisdiction in which any part of the
Trust Fund or property securing the same may at the time be located, the
Depositor and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee to act (at the expense of the Trustee) as co-trustee or co-trustees,
jointly with the Trustee, or separate trustee or separate trustees, of all or
any part of the Trust Fund, and to vest in such Person or Persons, in such
capacity, such title to the Trust Fund, or any part thereof, and, subject to the
other provisions of this Section 8.10, such powers, duties, obligations, rights
and trusts as the Depositor and the Trustee may consider necessary or desirable.
If the Depositor shall not be in existence or shall not have joined in such
appointment within 15 days after the receipt by it of a request so to do, or in
case an Event of Default shall have occurred and be continuing, the Trustee
alone shall have the power to make such appointment. Except as required by
applicable law, the appointment of a co-trustee or separate trustee shall not
relieve the Trustee of its responsibilities, obligations and liabilities
hereunder. No co-trustee or separate trustee hereunder shall be required to meet
the terms of eligibility as a successor Trustee under Section 8.06 hereunder and
no notice to Holders of Certificates of the appointment of co-trustee(s) or
separate trustee(s) shall be required under Section 8.08 hereof.
In the case of any appointment of a co-trustee or separate trustee pursuant
to this Section 8.10, all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or co-trustee is not authorized to
act separately without the Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed (whether as Trustee hereunder or as successor to the Master
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust Fund or any portion thereof in any
such jurisdiction) shall be exercised and performed by such separate trustee or
co-trustee solely at the direction of the Trustee.
No trustee under this Agreement shall be personally liable by reason of any
act or omission of any other trustee under this Agreement. The Depositor and the
Trustee acting jointly may at any time accept the resignation of or remove any
separate trustee or co-trustee, or if the separate trustee or co-trustee is an
employee of the Trustee, the Trustee acting alone may accept the resignation of
or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Every such instrument shall be filed with the Trustee.
Each separate trustee and co-trustee, upon its acceptance of the trusts
conferred, shall be vested with the estates or property specified in its
instrument of appointment, either jointly with the Trustee or separately, as may
be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. In no
event shall any such separate trustee or co-trustee be entitled to any provision
relating to the conduct of, affecting the liability of, or affording protection
to, such separate trustee or co-trustee that imposes a standard of conduct less
stringent than that imposed on the Trustee hereunder, affording greater
protection than that afforded to the Trustee hereunder or providing a greater
limit on liability than that provided to the Trustee hereunder.
Any separate trustee or co-trustee may, at any time, constitute the Trustee
its agent or attorney-in-fact, with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement on
its behalf and in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
SECTION 8.11. Representations and Warranties of the Trustee.
(a) The Trustee hereby represents and warrants to the Depositor, the Master
Servicer and the Special Servicer and for the benefit of the Certificateholders,
as of the Closing Date, that:
(i) The Trustee is a national banking association, duly organized,
validly existing and in good standing under the laws of The
United States;
(ii) The execution and delivery of this Agreement by the Trustee, and
the performance and compliance with the terms of this Agreement
by the Trustee, will not violate the Trustee's charter and
by-laws or constitute a default (or an event which, with notice
or lapse of time, or both, would constitute a default) under, or
result in the breach of, any material agreement or other
instrument to which it is a party or which is applicable to it or
any of its assets;
(iii)The Trustee has the full power and authority to enter into and
consummate all transactions contemplated by this Agreement, has
duly authorized the execution, delivery and performance of this
Agreement, and has duly executed and delivered this Agreement;
(iv) This Agreement, assuming due authorization, execution and
delivery by each of the other parties hereto, constitutes a
valid, legal and binding obligation of the Trustee, enforceable
against the Trustee in accordance with the terms hereof, subject
to (a) applicable bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors'
rights generally and the rights of creditors of national banking
associations specifically and (b) general principles of equity,
regardless of whether such enforcement is considered in a
proceeding in equity or at law;
(v) The Trustee is not in violation of, and its execution and
delivery of this Agreement and its performance and compliance
with the terms of this Agreement will not constitute a violation
of, any law (subject to the appointment in accordance with such
applicable laws of any co-trustee or separate trustee required
pursuant to this Agreement), any order or decree of any court or
arbiter, or any order, regulation or demand of any federal, state
or local governmental or regulatory authority, which violation,
in the Trustee's good faith and reasonable judgment, is likely to
affect materially and adversely either the ability of the Trustee
to perform its obligations under this Agreement or the financial
condition of the Trustee;
(vi) No litigation is pending or, to the best of the Trustee's
knowledge, threatened against the Trustee which would prohibit
the Trustee from entering into this Agreement or, in the
Trustee's good faith and reasonable judgment, is likely to
materially and adversely affect either the ability of the Trustee
to perform its obligations under this Agreement or the financial
condition of the Trustee; and
(vii)No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution,
delivery and performance by the Trustee, or compliance by the
Trustee with, this Agreement or the consummation of the
transactions contemplated by this Agreement, except for any
consent, approval, authorization or order which has not been
obtained or cannot be obtained prior to the actual performance by
the Trustee of its obligations under this Agreement, and which,
if not obtained would not have a materially adverse effect on the
ability of the Trustee to perform its obligations hereunder; and
(b) The Trustee covenants that by September 30, 1999, any custom-made
software or hardware designed or purchased or licensed by the Trustee and used
by the Trustee in the course of the operation or management of, or the
compiling, reporting or generation of data required by this Agreement will not
contain any material deficiency (x) in the ability of such software or hardware
to identify correctly or perform calculations or other processing with respect
to dates after September 30, 1999 or (y) that would cause such software or
hardware to be fit no longer for the purpose for which it was intended by reason
of the changing of the date from 1999 to 2000.
<PAGE>
ARTICLE IX
TERMINATION; OPTIONAL MORTGAGE LOAN PURCHASE
SECTION 9.01. Termination; Optional Mortgage Loan Purchase.
(a) The respective obligations and responsibilities of the Master Servicer,
the Special Servicer, the Depositor and the Trustee created hereby with respect
to the Certificates (other than the obligation to make certain payments and to
send certain notices to Certificateholders as hereinafter set forth) shall
terminate immediately following the occurrence of the last action required to be
taken by the Trustee pursuant to this Article IX on the Termination Date;
provided, however, that in no event shall the trust created hereby continue
beyond the expiration of twenty-one years from the death of the last survivor of
the descendants of Joseph P. Kennedy, the late ambassador of the United States
to the United Kingdom, living on the date hereof.
(b) The Upper-Tier REMIC and the Lower-Tier REMIC shall be terminated and
the assets of the Trust Fund with respect to the Trust REMICs shall be sold or
otherwise disposed of in connection therewith, only pursuant to a "plan of
complete liquidation" within the meaning of Code Section 860F(a)(4)(A) providing
for the actions contemplated by the provisions hereof pursuant to which the
applicable Notice of Termination is given and requiring that the assets of each
of the Upper-Tier REMIC and the Lower-Tier REMIC shall be sold for cash and that
each such REMIC shall terminate on a Distribution Date occurring not more than
90 days following the date of adoption of the plan of complete liquidation. For
purposes of this Section 9.01(b), the Notice of Termination given pursuant to
Section 9.01(c) shall constitute the adoption of the plan of complete
liquidation as of the date such notice is given, which date shall be specified
by the Master Servicer in the final federal income tax returns of the Upper-Tier
REMIC and the Lower-Tier REMIC. Notwithstanding the termination of the REMICs or
the Trust Fund, the Trustee shall be responsible for filing the final Tax
Returns for the REMICs and applicable income tax or information returns for the
Grantor Trust for the period ending with such termination, and shall maintain
books and records with respect to the REMICs and the Grantor Trust for the
period for which it maintains its own tax returns or other reasonable period.
(c) The Depositor may effect an early termination of the Trust Fund, upon
not less than 30 days' prior notice given to the Trustee and Master Servicer any
time on or after the Early Termination Notice Date specifying the Anticipated
Termination Date, by purchasing on such date all, but not less than all, of the
Mortgage Loans then included in the Trust Fund, and all property acquired in
respect of any Mortgage Loan, at a purchase price, payable in cash, equal to not
less than the greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of each Mortgage Loan
included in the Trust Fund as of the last day of the month
preceding such Distribution Date;
(B) the fair market value of all other property included in the
Trust Fund as of the last day of the month preceding such
Distribution Date, as determined by an Independent appraiser
acceptable to the Master Servicer as of the date not more
than 30 days prior to the last day of the month preceding
such Distribution Date;
(C) all unpaid interest accrued on such principal balance of
each such Mortgage Loan (including for this purpose any
Mortgage Loan as to which title to the related Mortgaged
Property has been acquired) at the Mortgage Rate (plus the
Excess Rate, to the extent applicable), to the last day of
the Interest Accrual Period preceding such Distribution
Date;
(D) the aggregate amount of unreimbursed Property Advances, and
unpaid Servicing Fees, Special Servicing Compensation,
Trustee Fees and Trust Fund expenses, in each case to the
extent permitted hereby with interest on all unreimbursed
Advances at the Advance Rate; and
(ii) the aggregate fair market value of the Mortgaged Property, and
all other property acquired in respect of any Mortgage Loan in
the Trust Fund, on the last day of the month preceding such
Distribution Date, as determined by an Independent appraiser
acceptable to the Master Servicer as of a date not more than 30
days prior to the last day of the month preceding such
Distribution Date, together with one month's interest thereon at
the related Mortgage Rates.
The Master Servicer or, if the Master Servicer does not, any Holder of a
Class LR Certificate representing greater than a 50% Percentage Interest in such
Class, may also effect such termination as provided above if it first notifies
the Depositor, or the Depositor and the Master Servicer, respectively, through
the Trustee of its intention to do so in writing at least 30 days prior to the
Early Termination Notice Date and neither the Depositor nor the Master Servicer
as the case may be, terminates the Trust Fund as described above within such
30-day period. All costs and expenses incurred by any and all parties to this
Agreement or by the Trust Fund in connection with the purchase of the Mortgage
Loans and other assets of the Trust Fund pursuant to this Section 9.01(c) shall
be borne by the party exercising its purchase rights hereunder. The Trustee
shall be entitled to rely conclusively on any determination made by an
Independent appraiser pursuant to this subsection (c).
Any Mortgage Loan purchased under the circumstances described in this
subsection (c) may only be purchased subject to a continuing right of (i) the
Persons who are then the holders of the Class Q Certificates to receive from the
purchaser(s), from time to time, payments corresponding to Default Interest with
respect to such Mortgage Loan and (ii) the Persons who are then the holders of
the Classes of Certificates entitled to receive the Deferred Interest with
respect to such Mortgage Loan, as specified in Section 2.06(b), to receive from
the purchaser(s), from time to time, payments corresponding to Deferred Interest
with respect to such Mortgage Loan, to the extent such Deferred Interest and
Default Interest have not been waived; provided that the Trustee shall have no
responsibility with respect to any continuing rights and the related portions of
the Grantor Trust shall be terminated upon such purchases.
(d) If the Trust Fund has not been previously terminated pursuant to
subsection (c) of this Section 9.01, the Trustee shall determine as soon as
practicable the Distribution Date on which the Trustee reasonably anticipates,
based on information with respect to the Mortgage Loans previously provided to
it, that the final distribution will be made (i) to the Holders of outstanding
Regular Certificates, and to the Trustee in respect of the Lower-Tier Regular
Interests, notwithstanding that such distribution may be insufficient to
distribute in full an amount equal to the remaining Certificate Principal Amount
of each such Certificate or Lower-Tier Regular Interest, together with amounts
required to be distributed on such Distribution Date pursuant to Section 4.01 or
(ii) if no such Regular Certificates are then outstanding, to the Holders of the
Class LR Certificates of any amount remaining in the Collection Account or the
Lower-Tier Distribution Account and to the Holders of the Class R Certificates
of any amount remaining in the Upper-Tier Distribution Account, in either case,
following the later to occur of (A) the receipt or collection of the last
payment due on any Mortgage Loan included in the Trust Fund or (B) the
liquidation or disposition pursuant to Section 3.18 of the last asset held by
the Trust Fund and (iii) to the holders of the Class Q Certificates, of any
amount remaining in the Class Q Distribution Account and to the holders of
Certificates entitled to receive Deferred Interest, as provided in Section
2.06(b), of any amount remaining in the Deferred Interest Distribution Account.
(e) Notice of any termination of the Trust Fund pursuant to this Section
9.01 shall be mailed by the Trustee to affected Certificateholders with a copy
to the Master Servicer and each Rating Agency at their addresses shown in the
Certificate Registrar as soon as practicable after the Trustee shall have
received, given or been deemed to have received a Notice of Termination but in
any event not more than thirty days, and not less than ten days, prior to the
Anticipated Termination Date. The notice mailed by the Trustee to affected
Certificateholders shall:
(i) specify the Anticipated Termination Date on which the final
distribution is anticipated to be made to Holders of Certificates
of the Classes specified therein;
(ii) specify the amount of any such final distribution, if known; and
(iii)state that the final distribution to Certificateholders will be
made only upon presentation and surrender of Certificates at the
office of the Paying Agent therein specified.
If the Trust Fund is not terminated on any Anticipated Termination Date for
any reason, the Trustee shall promptly mail notice thereof to each affected
Certificateholder.
(f) Any funds not distributed on the Termination Date because of the
failure of any Certificateholders to tender their Certificates shall be set
aside and held in trust for the account of the appropriate non-tendering
Certificateholders, whereupon the Trust Fund shall terminate. If any
Certificates as to which notice of the Termination Date has been given pursuant
to this Section 9.01 shall not have been surrendered for cancellation within six
months after the time specified in such notice, the Trustee shall mail a second
notice to the remaining Certificateholders, at their last addresses shown in the
Certificate Register, to surrender their Certificates for cancellation in order
to receive, from such funds held, the final distribution with respect thereto.
If within one year after the second notice any Certificate shall not have been
surrendered for cancellation, the Trustee may, directly or through an agent,
take appropriate steps to contact the remaining Certificateholders concerning
surrender of their Certificates. The costs and expenses of maintaining such
funds and of contacting Certificateholders shall be paid out of the assets which
remain held. If within two years after the second notice any Certificates shall
not have been surrendered for cancellation, the Paying Agent shall pay to the
Class R Certificateholders all amounts distributable to the Holders thereof. No
interest shall accrue or be payable to any Certificateholder on any amount held
as a result of such Certificateholder's failure to surrender its Certificate(s)
for final payment thereof in accordance with this Section 9.01.
<PAGE>
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
such counterparts shall constitute but one and the same instrument.
SECTION 10.02. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust Fund, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
No Certificateholder shall have any right to vote (except as expressly
provided for herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the Certificates,
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement
or any Mortgage Loan, unless such Holder previously shall have given to the
Trustee a written notice of default and of the continuance thereof, as
hereinbefore provided, and unless also the Holders of Certificates representing
Percentage Interests of at least 25% of each affected Class of Certificates
shall have made written request upon the Trustee to institute such action, suit
or proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more Holders of
Certificates of any Class shall have any right in any manner whatever by virtue
of any provision of this Agreement to affect, disturb or prejudice the rights of
the Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Holders of Certificates of such Class. For the
protection and enforcement of the provisions of this Section, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
SECTION 10.03. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 10.04. Notices.
All demands, notices and communications hereunder shall be in writing,
shall be deemed to have been given upon receipt (except that notices to Holders
of Class Q, Class R and Class LR Certificates or Holders of any Class of
Certificates no longer held through a Depository and instead held in registered,
definitive form shall be deemed to have been given upon being sent by first
class mail, postage prepaid) as follows:
If to the Trustee, to:
Norwest Bank Minnesota, National Association
Regarding Certificate Transfers
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479-0113
Attn: Morgan Stanley Series 1998-XL2
Fax No.: (612) 667-4927
For All Other Services
11000 Broken Land Parkway
Columbia, Maryland 21044-3562
Attn: Morgan Stanley Series 1998-XL2
Fax No.: (410) 884-2360
If to the Depositor, to:
Morgan Stanley Capital I Inc.
1585 Broadway
New York, New York 10036
Attention: Cecilia Tarrant
With a copy to: Gregory Walker, Esq.
Fax No.: (212) 761-0525
If to the Master Servicer, to:
Midland Loan Services, Inc.
210 West 10th Street
Kansas City, Missouri 64105
Attn: President
With a copy to:
Morrison & Hecker L.L.P.
2600 Grand Avenue
Kansas City, Missouri 64108
Attention: William A. Hirsch
Fax No.: (816) 474-4208
If to the Special Servicer, to:
Midland Loan Services, Inc.
210 West 10th Street
Kansas City, Missouri 64105
Attn: President
With a copy to:
Morrison & Hecker L.L.P.
2600 Grand Avenue
Kansas City, Missouri 64108
Attention: William A. Hirsch
Fax No.: (816) 474-4208
If to the Underwriter, to:
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Attention: Cecilia Tarrant
With a copy to: Gregory Walker, Esq.
If to any Certificateholder, to:
the address set forth in the
Certificate Register,
or, in the case of the parties to this Agreement, to such other address as such
party shall specify by written notice to the other parties hereto.
SECTION 10.05. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then, to the
extent permitted by applicable law, such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
SECTION 10.06. Notice to the Depositor and Each Rating Agency.
(a) The Trustee shall use its best efforts to promptly provide notice to
the Depositor and each Rating Agency with respect to each of the following of
which a Responsible Officer of the Trustee has actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Event of Default that has not been cured;
(iii)the merger, consolidation, resignation or termination of the
Master Servicer, Special Servicer or the Trustee;
(iv) the repurchase of Mortgage Loans pursuant to Section 2.03(c);
(v) the final payment to any Class of Certificateholders;
(vi) any change in the location of the Collection Account, the
Lower-Tier Distribution Account or the Upper-Tier Distribution
Account;
(vii)any event that would result in the voluntary or involuntary
termination of any insurance of the accounts of the Master
Servicer;
(viii) any change in the lien priority of a Mortgage Loan;
(ix) any new lease of an anchor or a termination of an anchor lease at
a retail Mortgaged Property; and
(x) any material damage to a Mortgaged Property.
(b) The Master Servicer (or the Trustee with respect to item (iv) below or
the Special Servicer with respect to reports it has generated pursuant to
Section 3.24) shall promptly furnish to each Rating Agency and, upon request, to
each Certificateholder (at the expense of such Certificateholder and subject to
any requirement governing disclosure of information under Section 3.20), to the
extent not otherwise provided under this Agreement, copies of the following:
(i) each of its annual statements as to compliance described in
Section 3.14;
(ii) each of its annual independent public accountants' servicing
reports described in Section 3.15;
(iii)a copy of each operating and other financial statement, rent
rolls, occupancy reports, and sales reports to the extent such
information is required to be delivered under a Mortgage Loan, in
each case to the extent collected pursuant to Section 3.03 and to
the extent consistent with applicable law and the related Loan
Documents;
(iv) each report to Certificateholders described in Section 4.02 and
Section 3.20 and any Special Event Report prepared pursuant to
Section 3.20(b);
(v) each inspection report prepared in connection with any inspection
conducted pursuant to Section 3.19(a); and
(vi) a copy of each report (other than the preliminary report referred
to in Section 3.13(a)) produced pursuant to Sections 3.13 and
3.24.
(c) The Master Servicer, Special Servicer and Trustee, as applicable, shall
furnish each Rating Agency with such information with respect to the Trust Fund,
any Mortgaged Property, a Borrower and a non-performing or Specially Serviced
Mortgage Loan as such Rating Agency shall reasonably request and which the
Master Servicer, Special Servicer and Trustee, as applicable, can reasonably
obtain. The Rating Agencies shall not be charged any fee or expense in
connection therewith.
(d) Notices to each Rating Agency shall be addressed as follows:
Duff & Phelps Credit Rating Co.
55 East Monroe Street
Chicago, Illinois 60603
Attention: CMBS Monitoring
Fax: (312) 265-2852
Standard & Poor's Ratings Service
26 Broadway
New York, New York 10004
Attention: Commercial Mortgage Surveillance
or in each case to such other address as any Rating Agency shall specify by
written notice to the parties hereto.
SECTION 10.07. Amendment.
This Agreement or any Custodial Agreement may be amended from time to time
by the Depositor, the Master Servicer, the Special Servicer and the Trustee,
without the consent of any of the Certificateholders, (i) to cure any ambiguity,
(ii) to correct or supplement any provisions herein or therein that may be
defective or inconsistent with any other provisions herein or therein, (iii) to
amend any provision hereof or thereof to the extent necessary or desirable to
maintain the status of each of the Upper-Tier REMIC and Lower-Tier REMIC as a
REMIC, or to prevent the imposition of any material state or local taxes, (iv)
to amend or supplement any provisions herein or therein that shall not adversely
affect in any material respect the interests of any Certificateholder not
consenting thereto, as evidenced in writing by an Opinion of Counsel, at the
expense of the party requesting such amendment, or as evidenced by confirmation
in writing from each Rating Agency that such amendment or supplement will not
result in a qualification, withdrawal or downgrading of the then current ratings
assigned to the Certificates, (v) to amend or supplement any provisions therein
to the extent necessary or desirable to maintain the ratings assigned to each of
the Classes of Certificates by each Rating Agency or (vi) to make any other
provisions with respect to matters or questions arising under this Agreement,
which shall not be inconsistent with the provisions of this Agreement and will
not result in a downgrade, qualification or withdrawal of the then current
rating or ratings then assigned to any outstanding Class of Certificates, as
confirmed by each Rating Agency in writing.
Further, the Depositor, the Master Servicer, the Special Servicer and the
Trustee, at any time and from time to time, without the consent of the
Certificateholders, may amend this Agreement to modify, eliminate or add to any
of its provisions to such extent as shall be necessary to maintain the
qualification of the Trust REMIC as two separate REMICs or of the Grantor Trust
as a grantor trust, or to prevent the imposition of any additional material
state or local taxes, at all times that any Certificates are outstanding;
provided, however, that such action, as evidenced by an Opinion of Counsel
(obtained at the expense of the Trust Fund), is necessary or helpful to maintain
such qualification or to prevent the imposition of any such taxes, and would not
adversely affect in any material respect the interest of any Certificateholder.
This Agreement or any Custodial Agreement may also be amended from time to
time by the Depositor, the Master Servicer, the Special Servicer and the Trustee
with the consent of the Holders of Certificates representing not less than
66-2/3% of the Percentage Interests of each Class of Certificates affected by
the amendment for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or any Custodial
Agreement or of modifying in any manner the rights of the Certificateholders;
provided, however, that no such amendment shall:
(i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be
distributed on any Certificate without the consent of all the
holders of all Certificates representing all Percentage Interests
of the Class or Classes affected thereby;
(ii) change the percentages of Voting Rights of Holders of
Certificates which are required to consent to any action or
inaction under this Agreement, without the consent of the Holders
of all Certificates representing all of the Percentage Interest
of the Class or Classes affected hereby;
(iii)alter the Servicing Standard or the obligations of the Master
Servicer, the Special Servicer or the Trustee to make a P&I
Advance or Property Advance without the consent of the Holders of
all Certificates representing all of the Percentage Interests of
the Class or Classes affected thereby; or
(iv) amend any section hereof which relates to the amendment of this
Agreement without the consent of all the holders of all
Certificates representing all Percentage Interests of the Class
or Classes affected thereby.
In the event that neither the Depositor nor any successor thereto, if any,
is in existence, any amendment under this Section 10.07 shall be effective with
the consent of the Trustee and the Master Servicer, in writing, and to the
extent required by this Section, the Certificateholders. Promptly after the
execution of any amendment, the Master Servicer shall forward to the Trustee and
the Trustee shall furnish written notification of the substance of such
amendment to each Certificateholder and each Rating Agency. It shall not be
necessary for the consent of Certificateholders under this Section 10.07 to
approve the particular form of any proposed amendment, but it shall be
sufficient if such consent shall approve the substance thereof. The method of
obtaining such consents and of evidencing the authorization of the execution
thereof by Certificateholders shall be subject to such reasonable regulations as
the Trustee may prescribe; provided, however, that such method shall always be
by affirmation and in writing.
Notwithstanding any contrary provision of this Agreement, no amendment
shall be made to this Agreement or any Custodial Agreement unless, if requested
by the Master Servicer and/or the Trustee, the Master Servicer and the Trustee
shall have received an Opinion of Counsel, at the expense of the party
requesting such amendment (or, if such amendment is required by any Rating
Agency to maintain the rating issued by it or requested by the Trustee for any
purpose described in clause (i) or (ii) of the first sentence of this Section,
then at the expense of the Trust Fund), to the effect that such amendment will
not cause any of the Upper-Tier REMIC or Lower-Tier REMIC to fail to qualify as
a REMIC at any time that any Certificates are outstanding, will not cause a tax
to be imposed on the Trust Fund under the REMIC Provisions (other than a tax at
the highest marginal corporate tax rate on net income from foreclosure property)
and will not cause the Grantor Trust to fail to qualify as a grantor trust.
Prior to the execution of any amendment to this Agreement or any Custodial
Agreement, the Trustee, the Special Servicer and the Master Servicer may request
and shall be entitled to rely conclusively upon an Opinion of Counsel, at the
expense of the party requesting such amendment (or, if such amendment is
required by any Rating Agency to maintain the rating issued by it or requested
by the Trustee for any purpose described in clause (i), (ii), (iii) or (v)
(which do not modify or otherwise relate solely to the obligations, duties or
rights of the Trustee) of the first sentence of this Section, then at the
expense of the Trust Fund) stating that the execution of such amendment is
authorized or permitted by this Agreement. The Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Trustee's own
rights, duties or immunities under this Agreement.
SECTION 10.08. Confirmation of Intent.
It is the express intent of the parties hereto that the conveyance of the
Trust Fund (including the Mortgage Loans) by the Depositor to the Trustee on
behalf of Certificateholders as contemplated by this Agreement and the sale by
the Depositor of the Certificates be, and be treated for all purposes as, a sale
by the Depositor of the undivided portion of the beneficial interest in the
Trust Fund represented by the Certificates. It is, further, not the intention of
the parties that such conveyance be deemed a pledge of the Trust Fund by the
Depositor to the Trustee to secure a debt or other obligation of the Depositor.
However, in the event that, notwithstanding the intent of the parties, the Trust
Fund is held to continue to be property of the Depositor then (a) this Agreement
shall also be deemed to be a security agreement under applicable law; (b) the
transfer of the Trust Fund provided for herein shall be deemed to be a grant by
the Depositor to the Trustee on behalf of Certificateholders of a first priority
security interest in all of the Depositor's right, title and interest in and to
the Trust Fund and all amounts payable to the holders of the Mortgage Loans in
accordance with the terms thereof and all proceeds of the conversion, voluntary
or involuntary, of the foregoing into cash, instruments, securities or other
property, including, without limitation, all amounts from time to time held or
invested in the Collection Account, Lower-Tier Distribution Account, Upper-Tier
Distribution Account, Class Q Distribution Account and Deferred Interest
Distribution Account, whether in the form of cash, instruments, securities or
other property; (c) the possession by the Trustee (or the Custodian on its
behalf) of Notes and such other items of property as constitute instruments,
money, negotiable documents or chattel paper shall be deemed to be "possession
by the secured party" for purposes of perfecting the security interest pursuant
to Section 9-305 of the Delaware and Maryland Uniform Commercial Code; and (d)
notifications to Persons holding such property, and acknowledgments, receipts or
confirmations from Persons holding such property, shall be deemed notifications
to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Trustee for the purpose
of perfecting such security interest under applicable law. Any assignment of the
interest of the Trustee pursuant to any provision hereof shall also be deemed to
be an assignment of any security interest created hereby. The Depositor shall,
and upon the request of the Master Servicer, the Trustee shall, to the extent
consistent with this Agreement (and at the expense of the Trust Fund), take such
actions as may be necessary to ensure that, if this Agreement were deemed to
create a security interest in the Mortgage Loans, such security interest would
be deemed to be a perfected security interest of first priority under applicable
law and will be maintained as such throughout the term of this Agreement. It is
the intent of the parties that such a security interest would be effective
whether any of the Certificates are sold, pledged or assigned.
SECTION 10.09. Third-Party Beneficiaries.
No Person other than a party to this Agreement and any Certificateholder
shall have any rights with respect to the enforcement of any of the rights or
obligations hereunder.
Without limiting the foregoing, the parties to this Agreement specifically
state that no Borrower, Manager or other party to a Mortgage Loan is an intended
third-party beneficiary of this Agreement.
<PAGE>
IN WITNESS WHEREOF, the Depositor, the Master Servicer, the Special
Servicer and the Trustee have caused their names to be signed hereto by their
respective officers thereunto duly authorized all as of the day and year first
above written.
MORGAN STANLEY CAPITAL I INC.,
as Depositor
By: ______________________________
Name: ____________________________
Title: ___________________________
MIDLAND LOAN SERVICES, INC.,
as Master Servicer
By: ______________________________
Name: ____________________________
Title: ___________________________
MIDLAND LOAN SERVICES, INC.,
as Special Servicer
By: ______________________________
Name: ____________________________
Title: ___________________________
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee, Custodian, Certificate
Registrar
By: ______________________________
Name: ____________________________
Title: ___________________________
<PAGE>
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On this _____ day of _________, 1998, before me, the undersigned, a Notary
Public in and for the State of New York, duly commissioned and sworn, personally
appeared ________________________, to me known who, by me duly sworn, did depose
and acknowledge before me and say that he resides at ________________________;
that she is the Vice President of Morgan Stanley Capital I Inc., a Delaware
corporation, the corporation described in and that executed the foregoing
instrument; and that he signed his name thereto under authority of the board of
directors of said corporation and on behalf of such corporation.
WITNESS my hand and seal hereto affixed the day and year first above
written.
__________________________________
NOTARY PUBLIC in and for the
State of New York.
My Commission expires:
(stamp)
(seal)
This instrument prepared by:
______________________________
<PAGE>
STATE OF _____________________)
) ss:
COUNTY OF ____________________)
On this ____ day of _______, 1998, before me, the undersigned, a Notary
Public in and for the State of _________________, duly commissioned and sworn,
personally appeared ___________________, to me known who, by me duly sworn, did
depose and acknowledge before me and say that he/she is the
______________________ Vice President of Midland Loan Services, Inc., the
corporation described in and that executed the foregoing instrument; and that
he/she signed his/her name thereto under authority of the board of directors of
said corporation and on behalf of such corporation.
WITNESS my hand and seal hereto affixed the day and year first above
written.
__________________________________
NOTARY PUBLIC in and for the
State of _____________.
My Commission expires:
(stamp)
(seal)
This instrument prepared by:
______________________________
<PAGE>
STATE OF _____________________)
) ss:
COUNTY OF ____________________)
On this ______ day of _______, 1998, before me, the undersigned, a Notary
Public in and for the State of _____________, duly commissioned and sworn,
personally appeared ___________________, to me known who, by me duly sworn, did
depose and acknowledge before me and say that he/she resides at
______________________________; is the ______________ of Norwest Bank Minnesota,
National Association, described in and that executed the foregoing instrument;
and that he/she signed his/her name thereto under authority of the board of
directors of said corporation and on behalf of such corporation.
WITNESS my hand and seal hereto affixed the day and year first above
written.
__________________________________
NOTARY PUBLIC in and for the
State of _____________.
My Commission expires:
(stamp)
(seal)
This instrument prepared by:
______________________________
<PAGE>
EXHIBIT A-1
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1998-XL2, CLASS A-1
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE CERTIFICATE
REGISTRAR FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE
DEPOSITOR, THE MASTER SERVICER, THE TRUSTEE, THE UNDERWRITER OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THE CERTIFICATES NOR THE UNDERLYING MORTGAGE
LOANS ARE INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
PRINCIPAL PAYMENTS ON THIS CERTIFICATE ARE PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL AMOUNT OF THIS
CERTIFICATE AT ANY TIME MAY BE LESS THAN THE INITIAL CERTIFICATE PRINCIPAL
AMOUNT SET FORTH BELOW.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G(a)(1) AND 860D OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED.
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-XL2, CLASS A-1
<TABLE>
<CAPTION>
<S> <C>
Pass-Through Rate: __________%
First Distribution Date: Cut-Off Date: October 1, 1998
November 4, 1998
Aggregate Initial Scheduled Final
Certificate Principal Amount of the Distribution Date: October 3, 2034
Class A-1 Certificates:
$ ___________________
CUSIP: Initial Certificate Principal
Amount of this Certificate:
ISIN: $
</TABLE>
Common Code:
No.:
This certifies that CEDE & CO. is the registered owner of a beneficial
ownership interest in a Trust Fund, including the distributions to be made with
respect to the Class A-1 Certificates. The Trust Fund, described more fully
below, consists primarily of a pool of Mortgage Loans secured by first liens on
commercial properties and held in trust by the Trustee and serviced by the
Master Servicer. The Trust Fund was created, and the Mortgage Loans are to be
serviced, pursuant to the Pooling Agreement (as defined below). The Holder of
this Certificate, by virtue of the acceptance hereof, assents to the terms,
provisions and conditions of the Pooling Agreement and is bound thereby. Also
issued under the Pooling Agreement are the Class A-2, Class X, Class B, Class C,
Class D, Class E, Class F, Class Q, Class R, and Class LR Certificates (together
with the Class A-1 Certificates, the "Certificates"; the Holders of Certificates
issued under the Pooling Agreement are collectively referred to herein as
"Certificateholders").
This Certificate is issued pursuant to, and in accordance with, the terms
of a Pooling and Servicing Agreement dated as of October 1, 1998 (the "Pooling
Agreement"), by and among Morgan Stanley Capital I Inc., as Depositor, Midland
Loan Services, Inc., as Master Servicer, Midland Loan Services, Inc., as Special
Servicer and Norwest Bank Minnesota, National Association, as Trustee. To the
extent not defined herein, capitalized terms used herein shall have the meanings
assigned thereto in the Pooling Agreement.
This Certificate represents a "regular interest" in a "real estate mortgage
investment conduit," as those terms are defined, respectively, in Sections
860G(a)(1) and 860D of the Internal Revenue Code of l986, as amended.
The Trustee makes no representation or warranty as to any of the statements
contained herein or the validity or sufficiency of the Certificates or the
Mortgage Loans and has executed this Certificate in its limited capacity as
Trustee under the Pooling Agreement.
Pursuant to the terms of the Pooling Agreement, the Trustee, or the Paying
Agent on behalf of the Trustee, will distribute (other than the final
distribution on any Certificate), on the third Business Day of each month,
commencing in November 1998 (each such date, a "Distribution Date"), to the
Person in whose name this Certificate is registered as of the related Record
Date, an amount equal to such Person's pro rata share (based on the Percentage
Interest represented by this Certificate) of that portion of the aggregate
amount of principal and interest then distributable, if any, allocable to the
Class A-1 Certificates for such Distribution Date, all as more fully described
in the Pooling Agreement. Holders of this Certificate may be entitled to
Prepayment Premiums, as provided in the Pooling Agreement.
Interest accrued on this Certificate during an Interest Accrual Period,
plus the aggregate unpaid Interest Shortfall with respect to this Certificate,
if any, will be payable on the related Distribution Date to the extent provided
in the Pooling Agreement. The "Interest Accrual Period" with respect to any
Distribution Date and with respect to each Class of Certificates is the calendar
month preceding the month in which such Distribution Date occurs. Each Interest
Accrual Period with respect to each Class of Certificates is assumed to consist
of 30 days.
All distributions (other than the final distribution on any Certificate)
will be made by the Paying Agent to the persons in whose names the Certificates
are registered at the close of business on each Record Date, which will be the
close of business on the last day of the month immediately preceding the month
which such Distribution Date occurs, or if such day is not a Business Day, the
immediately preceding Business Day. Such distributions shall be made on each
Distribution Date other than the Termination Date to each Certificateholder of
record on the related Record Date (a) by wire transfer of immediately available
funds to the account of such Certificateholder at a bank or other entity located
in the United States and having appropriate facilities therefor, if such
Certificateholder provides the Trustee with wiring instructions no less than
five Business Days prior to the related Record Date, or otherwise (b) by check
mailed to such Certificateholder. The final distribution on each Certificate
shall be made in like manner, but only upon presentment and surrender of such
Certificate at the office of the Trustee or its agent (which may be the Paying
Agent or the Certificate Registrar acting as such agent) that is specified in
the notice to Certificateholders of such final distribution.
Any funds not distributed on the Termination Date because of the failure of
any Certificateholders to tender their Certificates shall be set aside and held
in trust for the account of the appropriate non-tendering Certificateholders,
whereupon the Trust Fund shall terminate. If any Certificates as to which notice
of the Termination Date has been given pursuant to Section 9.01 of the Pooling
Agreement shall not have been surrendered for cancellation within six months
after the time specified in such notice, the Trustee shall mail a second notice
to the remaining Certificateholders, at their last addresses shown in the
Certificate Register, to surrender their Certificates for cancellation in order
to receive, from such funds held, the final distribution with respect thereto.
If within one year after the second notice any Certificate shall not have been
surrendered for cancellation, the Trustee may, directly or through an agent,
take appropriate steps to contact the remaining Certificateholders concerning
surrender of their Certificates. The costs and expenses of maintaining such
funds and of contacting Certificateholders shall be paid out of the assets which
remain held. If within two years after the second notice any Certificates shall
not have been surrendered for cancellation, the Paying Agent shall pay to the
Class R Certificateholders all amounts distributable to the Holders thereof. No
interest shall accrue or be payable to any Certificateholder on any amount held
as a result of such Certificateholder's failure to surrender its Certificate(s)
for final payment thereof in accordance with Section 9.01 of the Pooling
Agreement.
This Certificate is limited in right of payment to, among other things,
certain collections and recoveries in respect of the Mortgage Loans, as more
specifically set forth herein and in the Pooling Agreement.
As provided in the Pooling Agreement, the Trust Fund includes (i) such
Mortgage Loans as from time to time are subject to the Pooling Agreement,
together with the Mortgage Files relating thereto; (ii) all scheduled or
unscheduled payments on or collections in respect of the Mortgage Loans due
after the Cut-Off Date; (iii) any REO Property; (iv) all revenues received in
respect of any REO Property; (v) the Master Servicer's, the Special Servicer's
and the Trustee's rights under the insurance policies with respect to the
Mortgage Loans required to be maintained pursuant to the Pooling Agreement and
any proceeds thereof; (vi) any Assignments of Leases, Rents and Profits and any
security agreements; (vii) any indemnities or guaranties given as additional
security for any Mortgage Loans; (viii) the Trustee's rights in all assets
deposited in the Lock-Box Accounts, Cash Collateral Accounts, Escrow Accounts,
Interest Reserve Accounts, Reserve Accounts (to the extent such assets in such
accounts are not assets of the respective Borrowers), (ix) The Collection
Account, the Lower-Tier Distribution Account, the Upper-Tier Distribution
Account, the Deferred Interest Distribution Account, the Class Q Distribution
Account and any REO Account including reinvestment income thereon; (x) any
environmental indemnity agreements relating to the Mortgaged Properties; (xi)
the rights and remedies under the Loan Sale Agreement; and (xii) the proceeds of
any of the foregoing.
This Certificate does not purport to summarize the Pooling Agreement, and
reference is made to the Pooling Agreement for the interests, rights, benefits,
obligations and duties evidenced hereby, and the limitations thereon, and the
rights, duties and immunities of the Trustee.
As provided in the Pooling Agreement and subject to certain limitations set
forth therein, this Certificate is transferable or exchangeable only upon
surrender of this Certificate to the Certificate Registrar at the Corporate
Trust Office together with an assignment and transfer (executed by the Holder or
his duly authorized attorney), subject to the applicable requirements in Article
V of the Pooling Agreement. Upon surrender for registration of transfer of this
Certificate, subject to the applicable requirements of Article V of the Pooling
Agreement, the Trustee shall execute and the Authenticating Agent shall duly
authenticate in the name of the designated transferee or transferees, one or
more new Certificates in Denominations of a like aggregate Denomination of this
Certificate. Such Certificates shall be delivered by the Certificate Registrar
in accordance with Section 5.02(e) of the Pooling Agreement.
Prior to due presentation of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar, any Paying Agent and any agent of any of them may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and none of the Depositor, the Master Servicer, the Special
Servicer, the Trustee, the Certificate Registrar, any Paying Agent or any agent
of any of them shall be affected by any notice or knowledge to the contrary.
No fee or service shall be imposed by the Certificate Registrar for its
services in respect of any registration of transfer or exchange referred to in
Section 5.02 of the Pooling Agreement. The Certificate Registrar may require
payment by each transferor of a sum sufficient to cover any tax, expense or
other governmental charge payable in connection with any such transfer.
The Pooling Agreement or any Custodial Agreement may be amended from time
to time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee, without the consent of any of the Certificateholders; (i) to cure any
ambiguity; (ii) to correct or supplement any provisions in the Pooling Agreement
or any Custodial Agreement that may be defective or inconsistent with any other
provisions in such agreement; (iii) to amend any provision thereof to the extent
necessary or desirable to maintain the status of each of the Upper-Tier REMIC
and Lower-Tier REMIC as a REMIC, or to prevent the imposition of any material
state or local taxes; (iv) to amend or supplement any provisions in either of
such agreements to the extent necessary or desirable to maintain the rating or
ratings assigned to each of the Classes of Certificates by each Rating Agency;
(v) to amend or supplement any provisions in either of such agreements that
shall not adversely affect in any material respect the interests of any
Certificateholder not consenting thereto, as evidenced in writing by an Opinion
of Counsel, at the expense of the party requesting such amendment, or as
evidenced by confirmation in writing from each Rating Agency that such amendment
or supplement will not result in a qualification, withdrawal or downgrading of
the then-current ratings assigned to the Certificates; or (vi) to make any other
provisions with respect to matters or questions arising under the Pooling
Agreement, which shall not be inconsistent with the provisions of the Pooling
Agreement and will not result in a downgrade, qualification or withdrawal of the
then current rating or ratings then assigned to any outstanding Class of
Certificates, as confirmed by each Rating Agency in writing.
Further, the Depositor, the Master Servicer, the Special Servicer and the
Trustee, at any time and from time to time, without the consent of the
Certificateholders, may amend the Pooling Agreement to modify, eliminate or add
to any of its provisions to such extent as shall be necessary to maintain the
qualification of the Trust REMIC as two separate REMICs or of the Grantor Trust
as a grantor trust, or to prevent the imposition of any additional material
state or local taxes, at all times that any Certificates are outstanding;
provided, however, that such action, as evidenced by an Opinion of Counsel
(obtained at the expense of the Trust Fund), is necessary or helpful to maintain
such qualification or to prevent the imposition of any such taxes, and would not
adversely affect in any material respect the interest of any Certificateholder.
The Pooling Agreement or any Custodial Agreement may also be amended from
time to time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee with the consent of the Holders of Certificates evidencing not less than
66-2/3% of the Percentage Interests of each Class of Certificates affected by
the amendment for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Pooling Agreement or any
Custodial Agreement or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such amendment shall:
(i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be
distributed on any Certificate without the consent of all the
Holders of all Certificates representing all Percentage
Interests of the Class or Classes affected thereby;
(ii) change the percentages of Voting Rights of Holders of
Certificates which are required to consent to any action or
inaction under the Pooling Agreement, without the consent of all
the Holders of all Certificates representing all Percentage
Interests of the Class or Classes affected thereby;
(iii) alter the Servicing Standard or the obligations of the Master
Servicer, the Special Servicer or the Trustee to make a P&I
Advance or Property Advance without the consent of the Holders
of all Certificates representing all of the Percentage Interests
of the Class or Classes affected thereby; or
(iv) amend any section of the Pooling Agreement which relates to the
amendment thereof, without the consent of all the Holders of all
Certificates representing all Percentage Interests of the Class
or Classes affected thereby.
The Depositor may effect an early termination of the Trust Fund, upon not
less than 30 days' prior notice given to the Trustee and Master Servicer any
time on or after the Early Termination Notice Date (defined as any date as of
which the aggregate Stated Principal Balance of the Mortgage Loans is less than
1.0% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
Cut-Off Date) specifying the Anticipated Termination Date, by purchasing on such
date all, but not less than all, of the Mortgage Loans then included in the
Trust Fund, and all property acquired in respect of any Mortgage Loan, at a
purchase price, payable in cash, equal to not less than the greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of each Mortgage Loan
included in the Trust Fund as of the last day of the month
preceding such Distribution Date;
(B) the fair market value of all other property included in the
Trust Fund as of the last day of the month preceding such
Distribution Date, as determined by an Independent appraiser
acceptable to the Master Servicer as of the date not more
than 30 days prior to the last day of the month preceding
such Distribution Date;
(C) all unpaid interest accrued on such principal balance of
each such Mortgage Loan (including for this purpose any
Mortgage Loan as to which title to the related Mortgaged
Property has been acquired) at the Mortgage Rate (plus the
Excess Rate, to the extent applicable) to the last day of
the Interest Accrual Period preceding such Distribution
Date;
(D) the aggregate amount of unreimbursed Property Advances, and
unpaid Servicing Fees, Special Servicing Compensation,
Trustee Fees and Trust Fund expenses, in each case to the
extent permitted under the Pooling Agreement with interest
on all unreimbursed Advances at the Advance Rate; and
(ii) the aggregate fair market value of the Mortgage Loans, and all
other property acquired in respect of any Mortgage Loan in the
Trust Fund, on the last day of the month preceding such
Distribution Date, as determined by an Independent appraiser
acceptable to the Master Servicer as of a date not more than 30
days prior to the last day of the month preceding such
Distribution Date, together with one month's interest thereon at
the related Mortgage Rates.
The Master Servicer or, if the Master Servicer does not, any Holder of a
Class LR Certificate representing greater than a 50% Percentage Interest in such
Class, may also effect such termination as provided above if it first notifies
the Depositor, or the Depositor and the Master Servicer, respectively, through
the Trustee of its intention to do so in writing at least 30 days prior to the
Early Termination Notice Date and neither the Depositor nor the Master Servicer
as the case may be, terminates the Trust Fund as described above within such
30-day period. All costs and expenses incurred by any and all parties to this
Agreement or by the Trust Fund in connection with the purchase of the Mortgage
Loans and other assets of the Trust Fund pursuant to Section 9.01(c) of the
Pooling Agreement shall be borne by the party exercising its purchase rights
hereunder. The Trustee shall be entitled to rely conclusively on any
determination made by an Independent appraiser pursuant to Section 9.01(c) of
the Pooling Agreement.
The respective obligations and responsibilities of the Master Servicer, the
Special Servicer, the Depositor and the Trustee created by the Pooling Agreement
with respect to the Certificates (other than the obligation to make certain
payments and to send certain notices to Certificateholders as set forth in the
Pooling Agreement) shall terminate immediately following the occurrence of the
last action required to be taken by the Trustee pursuant to Article IX of the
Pooling Agreement on the Termination Date; provided, however, that in no event
shall the trust created thereby continue beyond the expiration of twenty-one
years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late ambassador of the United States to the United Kingdom, living
on the date of the Pooling Agreement.
Unless the Certificate of Authentication on this Certificate has been
executed by the Trustee or on its behalf by the Authenticating Agent, by manual
signature, this Certificate shall not be entitled to any benefit under the
Pooling Agreement or be valid for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Class A-1 Certificate to be
duly executed.
Dated: October ___, 1998
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Trustee
By:______________________________________
Authorized Officer
Certificate of Authentication
-----------------------------
This is one of the Class A-1 Certificates referred to in the Pooling
Agreement.
Dated: October ___, 1998
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Authenticating Agent
By:_______________________________________
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned ("Assignor(s)") hereby sell(s),
assign(s) and transfer(s) unto __________________________________________
______________________________________________________________________________
(please print or typewrite name(s) and address(es), including postal zip code(s)
of assignee(s)) ("Assignee(s)") the entire Percentage Interest represented by
the within Class A-1 Certificate and hereby authorize(s) the registration of
transfer of such interest to Assignee(s) on the Certificate Register of the
Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Class A-1
Certificate of the entire Percentage Interest represented by the within Class
A-1 Certificates to the above-named Assignee(s) and to deliver such Class A-1
Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Date: _________________ ______________________________________________
Signature by or on behalf of
Assignor(s)
----------------------------------------------
Taxpayer Identification Number
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee(s) should include the following for purposes of
distribution:____________________________________ Address of the Assignee(s) for
the purpose of receiving notices and distributions:
_____________________________________________________________________________
Distributions, if being made by wire transfer in immediately available
funds to __________________________ for the account of
__________________________ account number ____________________________.
This information is provided by ______________________________ the
Assignee(s) named above, or ____________________________________ as its (their)
agent.
By: ______________________________________________
----------------------------------------------
[Please print or type name(s)]
----------------------------------------------
Title:
----------------------------------------------
Taxpayer Identification Number
<PAGE>
EXHIBIT A-2
Morgan Stanley Capital I Inc.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-XL2, CLASS A-2
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE CERTIFICATE
REGISTRAR FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE
DEPOSITOR, THE MASTER SERVICER, THE TRUSTEE, THE UNDERWRITER OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THE CERTIFICATES NOR THE UNDERLYING MORTGAGE
LOANS ARE INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
PRINCIPAL PAYMENTS ON THIS CERTIFICATE ARE PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL AMOUNT OF THIS
CERTIFICATE AT ANY TIME MAY BE LESS THAN THE INITIAL CERTIFICATE PRINCIPAL
AMOUNT SET FORTH BELOW.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G(a)(1) AND 860D OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED.
<PAGE>
Morgan Stanley Capital I Inc.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-XL2, CLASS A-2
<TABLE>
<CAPTION>
<S> <C>
Pass-Through Rate: %
First Distribution Date: Cut-Off Date: October 1, 1998
November 4, 1998
Aggregate Initial Scheduled Final
Certificate Principal Amount of the Distribution Date: October 3, 2034
Class A-2 Certificates:
CUSIP: Initial Certificate Principal
Amount of this Certificate:
ISIN: $
</TABLE>
Common Code:
No.:
This certifies that CEDE & CO. is the registered owner of a beneficial
ownership interest in a Trust Fund, including the distributions to be made with
respect to the Class A-2 Certificates. The Trust Fund, described more fully
below, consists primarily of a pool of Mortgage Loans secured by first liens on
commercial properties and held in trust by the Trustee and serviced by the
Master Servicer. The Trust Fund was created, and the Mortgage Loans are to be
serviced, pursuant to the Pooling Agreement (as defined below). The Holder of
this Certificate, by virtue of the acceptance hereof, assents to the terms,
provisions and conditions of the Pooling Agreement and is bound thereby. Also
issued under the Pooling Agreement are the Class A-1, Class X, Class B, Class C,
Class D, Class E, Class F, Class Q, Class R and Class LR Certificates (together
with the Class A-2 Certificates, the "Certificates"; the Holders of Certificates
issued under the Pooling Agreement are collectively referred to herein as
"Certificateholders").
This Certificate is issued pursuant to, and in accordance with, the terms
of a Pooling and Servicing Agreement, dated as of October 1, 1998 (the "Pooling
Agreement"), by and among Morgan Stanley Capital I Inc., as Depositor, Midland
Loan Services, Inc., as Master Servicer, Midland Loan Services, Inc., as Special
Servicer and Norwest Bank Minnesota, National Association, as Trustee. To the
extent not defined herein, capitalized terms used herein shall have the meanings
assigned thereto in the Pooling Agreement.
This Certificate represents a "regular interest" in a "real estate mortgage
investment conduit," as those terms are defined, respectively, in Sections
860G(a)(1) and 860D of the Internal Revenue Code of l986, as amended.
The Trustee makes no representation or warranty as to any of the statements
contained herein or the validity or sufficiency of the Certificates or the
Mortgage Loans and has executed this Certificate in its limited capacity as
Trustee under the Pooling Agreement.
Pursuant to the terms of the Pooling Agreement, the Trustee, or the Paying
Agent on behalf of the Trustee, will distribute (other than the final
distribution on any Certificate), on the third Business Day of each month,
commencing in November 1998 (each such date, a "Distribution Date"), to the
Person in whose name this Certificate is registered as of the related Record
Date, an amount equal to such Person's pro rata share (based on the Percentage
Interest represented by this Certificate) of that portion of the aggregate
amount of principal and interest then distributable, if any, allocable to the
Class A-2 Certificates for such Distribution Date, all as more fully described
in the Pooling Agreement. Holders of this Certificate may be entitled to
Prepayment Premiums, as provided in the Pooling Agreement.
Interest accrued on this Certificate during an Interest Accrual Period,
plus the aggregate unpaid Interest Shortfall with respect to this Certificate,
if any, will be payable on the related Distribution Date to the extent provided
in the Pooling Agreement. The "Interest Accrual Period" with respect to any
Distribution Date and with respect to each Class of Certificates is the calendar
month preceding the month in which such Distribution Date occurs. Each Interest
Accrual Period with respect to each Class of Certificates is assumed to consist
of 30 days.
All distributions (other than the final distribution on any Certificate)
will be made by the Paying Agent to the persons in whose names the Certificates
are registered at the close of business on each Record Date, which will be the
close of business on the last day of the month immediately preceding the month
in which such Distribution Date occurs, or if such day is not a Business Day,
the immediately preceding Business Day. Such distributions shall be made on each
Distribution Date other than the Termination Date to each Certificateholder of
record on the related Record Date (a) by wire transfer of immediately available
funds to the account of such Certificateholder at a bank or other entity located
in the United States and having appropriate facilities therefor, if such
Certificateholder provides the Trustee with wiring instructions no less than
five Business Days prior to the related Record Date, or otherwise (b) by check
mailed to such Certificateholder. The final distribution on each Certificate
shall be made in like manner, but only upon presentment and surrender of such
Certificate at the office of the Trustee or its agent (which may be the Paying
Agent or the Certificate Registrar acting as such agent) that is specified in
the notice to Certificateholders of such final distribution.
Any funds not distributed on the Termination Date because of the failure of
any Certificateholders to tender their Certificates shall be set aside and held
in trust for the account of the appropriate non-tendering Certificateholders,
whereupon the Trust Fund shall terminate. If any Certificates as to which notice
of the Termination Date has been given pursuant to Section 9.01 of the Pooling
Agreement shall not have been surrendered for cancellation within six months
after the time specified in such notice, the Trustee shall mail a second notice
to the remaining Certificateholders, at their last addresses shown in the
Certificate Register, to surrender their Certificates for cancellation in order
to receive, from such funds held, the final distribution with respect thereto.
If within one year after the second notice any Certificate shall not have been
surrendered for cancellation, the Trustee may, directly or through an agent,
take appropriate steps to contact the remaining Certificateholders concerning
surrender of their Certificates. The costs and expenses of maintaining such
funds and of contacting Certificateholders shall be paid out of the assets which
remain held. If within two years after the second notice any Certificates shall
not have been surrendered for cancellation, the Paying Agent shall pay to the
Class R Certificateholders all amounts distributable to the Holders thereof. No
interest shall accrue or be payable to any Certificateholder on any amount held
as a result of such Certificateholder's failure to surrender its Certificate(s)
for final payment thereof in accordance with Section 9.01 of the Pooling
Agreement.
This Certificate is limited in right of payment to, among other things,
certain collections and recoveries in respect of the Mortgage Loans, as more
specifically set forth herein and in the Pooling Agreement.
As provided in the Pooling Agreement, the Trust Fund includes (i) such
Mortgage Loans as from time to time are subject to the Pooling Agreement,
together with the Mortgage Files relating thereto; (ii) all scheduled or
unscheduled payments on or collections in respect of the Mortgage Loans due
after the Cut-Off Date; (iii) any REO Property; (iv) all revenues received in
respect of any REO Property; (v) the Master Servicer's, the Special Servicer's
and the Trustee's rights under the insurance policies with respect to the
Mortgage Loans required to be maintained pursuant to the Pooling Agreement and
any proceeds thereof; (vi) any Assignments of Leases, Rents and Profits and any
security agreements; (vii) any indemnities or guaranties given as additional
security for any Mortgage Loans; (viii) the Trustee's rights in all assets
deposited in the Lock-Box Accounts, Cash Collateral Accounts, Escrow Accounts,
Interest Reserve Accounts, Reserve Accounts (to the extent such assets in such
accounts are not assets of the respective Borrowers) (ix) the Collection
Account, the Lower-Tier Distribution Account, the Upper-Tier Distribution
Account, the Deferred Interest Distribution Account, the Class Q Distribution
Account, and any REO Account including reinvestment income thereon; (x) any
environmental indemnity agreements relating to the Mortgaged Properties; (xi)
the rights and remedies under the Loan Sale Agreement; and (xii) the proceeds of
any of the foregoing.
This Certificate does not purport to summarize the Pooling Agreement, and
reference is made to the Pooling Agreement for the interests, rights, benefits,
obligations and duties evidenced hereby, and the limitations thereon, and the
rights, duties and immunities of the Trustee.
As provided in the Pooling Agreement and subject to certain limitations set
forth therein, this Certificate is transferable or exchangeable only upon
surrender of this Certificate to the Certificate Registrar at the Corporate
Trust Office together with an assignment and transfer (executed by the Holder or
his duly authorized attorney), subject to the applicable requirements in Article
V of the Pooling Agreement. Upon surrender for registration of transfer of this
Certificate, subject to the applicable requirements of Article V of the Pooling
Agreement, the Trustee shall execute and the Authenticating Agent shall duly
authenticate in the name of the designated transferee or transferees, one or
more new Certificates in Denominations of a like aggregate Denomination of this
Certificate. Such Certificates shall be delivered by the Certificate Registrar
in accordance with Section 5.02(e) of the Pooling Agreement.
Prior to due presentation of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar, any Paying Agent and any agent of any of them may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and none of the Depositor, the Master Servicer, the Special
Servicer, the Trustee, the Certificate Registrar, any Paying Agent or any agent
of any of them shall be affected by any notice or knowledge to the contrary.
No fee or service shall be imposed by the Certificate Registrar for its
services in respect of any registration of transfer or exchange referred to in
Section 5.02 of the Pooling Agreement. The Certificate Registrar may require
payment by each transferor of a sum sufficient to cover any tax, expense or
other governmental charge payable in connection with any such transfer.
The Pooling Agreement or any Custodial Agreement may be amended from time
to time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee, without the consent of any of the Certificateholders; (i) to cure any
ambiguity; (ii) to correct or supplement any provisions in the Pooling Agreement
or any Custodial Agreement that may be defective or inconsistent with any other
provisions in such agreement; (iii) to amend any provision thereof to the extent
necessary or desirable to maintain the status of each of the Upper-Tier REMIC
and Lower-Tier REMIC as a REMIC, or to prevent the imposition of any material
state or local taxes; (iv) to amend or supplement any provisions in either of
such agreements to the extent necessary or desirable to maintain the rating or
ratings assigned to each of the Classes of Certificates by each Rating Agency;
(v) to amend or supplement any provisions in either of such agreements that
shall not adversely affect in any material respect the interests of any
Certificateholder not consenting thereto, as evidenced in writing by an Opinion
of Counsel, at the expense of the party requesting such amendment, or as
evidenced by confirmation in writing from each Rating Agency that such amendment
or supplement will not result in a qualification, withdrawal or downgrading of
the then-current ratings assigned to the Certificates, or (vi) to make any other
provisions with respect to matters or questions arising under the Pooling
Agreement, which shall not be inconsistent with the provisions of the Pooling
Agreement and will not result in a downgrade, qualification or withdrawal of the
then current rating or ratings then assigned to any outstanding Class of
Certificates, as confirmed by each Rating Agency in writing.
Further, the Depositor, the Master Servicer, the Special Servicer and the
Trustee, at any time and from time to time, without the consent of the
Certificateholders, may amend the Pooling Agreement to modify, eliminate or add
to any of its provisions to such extent as shall be necessary to maintain the
qualification of the Trust REMIC as two separate REMICs or of the Grantor Trust
as a grantor trust, or to prevent the imposition of any additional material
state or local taxes, at all times that any Certificates are outstanding;
provided, however, that such action, as evidenced by an Opinion of Counsel
(obtained at the expense of the Trust Fund), is necessary or helpful to maintain
such qualification or to prevent the imposition of any such taxes, and would not
adversely affect in any material respect the interest of any Certificateholder.
The Pooling Agreement or any Custodial Agreement may also be amended from
time to time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee, with the consent of the Holders of Certificates evidencing not less
than 66-2/3% of the Percentage Interests of each Class of Certificates affected
by the amendment for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Pooling Agreement or any
Custodial Agreement or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such amendment shall:
(i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be
distributed on any Certificate without the consent of all the
Holders of all Certificates representing all Percentage
Interests of the Class or Classes affected thereby;
(ii) change the percentages of Voting Rights of Holders of
Certificates which are required to consent to any action or
inaction under the Pooling Agreement, without the consent of all
the Holders of all Certificates representing all Percentage
Interests of the Class or Classes affected thereby;
(iii) alter the Servicing Standard or the obligations of the Master
Servicer, the Special Servicer or the Trustee to make a P&I
Advance or Property Advance without the consent of the Holders
of all Certificates representing all of the Percentage Interests
of the Class or Classes affected thereby; or
(iv) amend any section of the Pooling Agreement which relates to the
amendment thereof, without the consent of all the Holders of all
Certificates representing all Percentage Interests of the Class
or Classes affected thereby.
The Depositor may effect an early termination of the Trust Fund, upon not
less than 30 days' prior notice given to the Trustee and Master Servicer any
time on or after the Early Termination Notice Date (defined as any date as of
which the aggregate Stated Principal Balance of the Mortgage Loans is less than
1.0% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
Cut-Off Date) specifying the Anticipated Termination Date, by purchasing on such
date all, but not less than all, of the Mortgage Loans then included in the
Trust Fund, and all property acquired in respect of any Mortgage Loan, at a
purchase price, payable in cash, equal to not less than the greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of each Mortgage Loan,
included in the Trust Fund as of the last day of the month
preceding such Distribution Date;
(B) the fair market value of all other property included in the
Trust Fund as of the last day of the month preceding such
Distribution Date, as determined by an Independent appraiser
acceptable to the Master Servicer as of the date not more
than 30 days prior to the last day of the month preceding
such Distribution Date;
(C) all unpaid interest accrued on such principal balance of
each such Mortgage Loan (including for this purpose any
Mortgage Loan as to which title to the related Mortgaged
Property has been acquired) at the Mortgage Rate (plus the
Excess Rate, to the extent applicable) to the last day of
the Interest Accrual Period preceding such Distribution
Date;
(D) the aggregate amount of unreimbursed Property Advances, and
unpaid Servicing Fees, Special Servicing Compensation,
Trustee Fees and Trust Fund expenses, in each case to the
extent permitted under the Pooling Agreement with interest
on all unreimbursed Advances at the Advance Rate; and
(ii) the aggregate fair market value of the Mortgage Loans, and all
other property acquired in respect of any Mortgage Loan in the
Trust Fund, on the last day of the month preceding such
Distribution Date, as determined by an Independent appraiser
acceptable to the Master Servicer as of a date not more than 30
days prior to the last day of the month preceding such
Distribution Date, together with one month's interest thereon at
the related Mortgage Rates.
The Master Servicer or, if the Master Servicer does not, any Holder of a
Class LR Certificate representing greater than a 50% Percentage Interest in such
Class, may also effect such termination as provided above if it first notifies
the Depositor, or the Depositor and the Master Servicer, respectively, through
the Trustee of its intention to do so in writing at least 30 days prior to the
Early Termination Notice Date and neither the Depositor nor the Master Servicer
as the case may be, terminates the Trust Fund as described above within such
30-day period. All costs and expenses incurred by any and all parties to this
Agreement or by the Trust Fund in connection with the purchase of the Mortgage
Loans and other assets of the Trust Fund pursuant to Section 9.01(c) of the
Pooling Agreement shall be borne by the party exercising its purchase rights
hereunder. The Trustee shall be entitled to rely conclusively on any
determination made by an Independent appraiser pursuant to Section 9.01(c) of
the Pooling Agreement.
The respective obligations and responsibilities of the Master Servicer, the
Special Servicer, the Depositor and the Trustee created by the Pooling Agreement
with respect to the Certificates (other than the obligation to make certain
payments and to send certain notices to Certificateholders as set forth in the
Pooling Agreement) shall terminate immediately following the occurrence of the
last action required to be taken by the Trustee pursuant to Article IX of the
Pooling Agreement on the Termination Date; provided, however, that in no event
shall the trust created thereby continue beyond the expiration of twenty-one
years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late ambassador of the United States to the United Kingdom, living
on the date of the Pooling Agreement.
Unless the Certificate of Authentication on this Certificate has been
executed by the Trustee or on its behalf by the Authenticating Agent, by manual
signature, this Certificate shall not be entitled to any benefit under the
Pooling Agreement or be valid for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Class A-2 Certificate to be
duly executed.
Dated: October ___, 1998
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Trustee
By:_________________________________
Authorized Officer
Certificate of Authentication
-----------------------------
This is one of the Class A-2 Certificates referred to in the Pooling
Agreement.
Dated: October ___, 1998
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Authenticating Agent
By:__________________________________
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned ("Assignor(s)") hereby sell(s),
assign(s) and transfer(s) unto _________________________________________
_______________________________________________________________________ (please
print or typewrite name(s) and address(es), including postal zip code(s) of
assignee(s)) ("Assignee(s)") the entire Percentage Interest represented by the
within Class A-2 Certificate and hereby authorize(s) the registration of
transfer of such interest to Assignee(s) on the Certificate Register of the
Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Class A-2
Certificate of the entire Percentage Interest represented by the within Class
A-2 Certificates to the above-named Assignee(s) and to deliver such Class A-2
Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Date: _________________ _____________________________________________
Signature by or on behalf of
Assignor(s)
---------------------------------------------
Taxpayer Identification Number
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee(s) should include the following for purposes of
distribution:____________________________________
Address of the Assignee(s) for the purpose of receiving notices and
distributions:____________________________
Distributions, if being made by wire transfer in immediately available
funds to ___________________________ for the account of
_____________________________ account number __________________________.
This information is provided by __________________________ the Assignee(s)
named above, or ________________________________________________ as its (their)
agent.
By: _________________________________________
-----------------------------------------
[Please print or type name(s)]
-----------------------------------------
Title:
-----------------------------------------
Taxpayer Identification Number
<PAGE>
EXHIBIT A-3
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-XL2, CLASS X
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE CERTIFICATE
REGISTRAR FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE MASTER SERVICER, THE TRUSTEE, THE UNDERWRITER OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THE CERTIFICATES NOR THE UNDERLYING MORTGAGE
LOANS ARE INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
THE HOLDERS OF THIS CLASS X CERTIFICATE WILL BE ENTITLED ONLY TO DISTRIBUTIONS
OF INTEREST ON THE NOTIONAL AMOUNT OF THE CLASS X CERTIFICATES AND WILL NOT BE
ENTITLED TO ANY DISTRIBUTIONS WITH RESPECT TO PRINCIPAL. THE NOTIONAL AMOUNT OF
THE CLASS X CERTIFICATES IS EQUAL TO THE AGGREGATE CERTIFICATE PRINCIPAL AMOUNTS
OF THE CLASS A-1, CLASS A-2, CLASS B, CLASS C AND CLASS D CERTIFICATES AS SET
FORTH IN THE POOLING AGREEMENT REFERRED TO BELOW. ACCORDINGLY, THE OUTSTANDING
NOTIONAL AMOUNT OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN THE INITIAL
NOTIONAL AMOUNT SET FORTH BELOW.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G(a)(1) AND 860D OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED.
THIS CERTIFICATE IS ISSUED ON OCTOBER 15, 1998, AT AN ISSUE PRICE OF [ ]% OF THE
INITIAL CLASS X NOTIONAL AMOUNT, INCLUDING ACCRUED INTEREST, AND A STATED
REDEMPTION PRICE AT MATURITY EQUAL TO ALL INTEREST DISTRIBUTIONS HEREON, AND IS
ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX PURPOSES.
ASSUMING (A) THAT THIS CERTIFICATE PAYS IN ACCORDANCE WITH PROJECTED CASH FLOWS
REFLECTING THE PREPAYMENT ASSUMPTION OF SCENARIO 1 (AS DESCRIBED IN THE
PROSPECTUS SUPPLEMENT DATED OCTOBER 15, 1998 WITH RESPECT TO THE OFFERING OF THE
CLASS A-1, CLASS A-2, CLASS X, CLASS B, CLASS C, CLASS D AND CLASS E
CERTIFICATES) USED TO PRICE THIS CERTIFICATE AND (B) THAT THE PASS-THROUGH RATE
HEREON CHANGES IN ACCORDANCE WITH THE PREPAYMENT ASSUMPTION: (I) THE AMOUNT OF
OID AS A PERCENTAGE OF THE INITIAL CLASS X NOTIONAL AMOUNT IS APPROXIMATELY [
]%; (II) THE ANNUAL YIELD TO MATURITY OF THIS CERTIFICATE, COMPOUNDED MONTHLY,
IS APPROXIMATELY [ ]%; AND (III) THE AMOUNT OF OID ALLOCABLE TO THE SHORT FIRST
ACCRUAL PERIOD (OCTOBER [ ], 1998 TO NOVEMBER 4, 1998) AS A PERCENTAGE OF THE
INITIAL CLASS X NOTIONAL AMOUNT, CALCULATED USING THE EXACT METHOD, IS
APPROXIMATELY [ ]%.
<PAGE>
Morgan Stanley Capital I Inc.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-XL2, CLASS X
<TABLE>
<CAPTION>
<S> <C>
Pass-Through Rate: As determined in accordance with the
Pooling Agreement.
First Distribution Date: Cut-Off Date: October 1, 1998
November 4, 1998
Aggregate Initial Scheduled Final
Notional Amount of the Distribution Date: October 3, 2034
Class X Certificates:
CUSIP: Initial Notional
Amount of this Certificate:
ISIN: $
</TABLE>
Common Code:
No.:
This certifies that CEDE & CO. is the registered owner of a beneficial
ownership interest in a Trust Fund, including the distributions to be made with
respect to the Class X Certificates. The Trust Fund, described more fully below,
consists primarily of a pool of Mortgage Loans secured by first liens on
commercial properties and held in trust by the Trustee and serviced by the
Master Servicer. The Trust Fund was created, and the Mortgage Loans are to be
serviced, pursuant to the Pooling Agreement (as defined below). The Holder of
this Certificate, by virtue of the acceptance hereof, assents to the terms,
provisions and conditions of the Pooling Agreement and is bound thereby. Also
issued under the Pooling Agreement are the Class A-1, Class A-2, Class B, Class
C, Class D, Class E, Class F, Class Q, Class R, and Class LR Certificates
(together with the Class X Certificates, the "Certificates"; the Holders of
Certificates issued under the Pooling Agreement are collectively referred to
herein as "Certificateholders").
This Certificate is issued pursuant to, and in accordance with, the terms
of a Pooling and Servicing Agreement, dated as of October 1, 1998 (the "Pooling
Agreement"), by and among Morgan Stanley Capital I Inc., as Depositor, Midland
Loan Services, Inc., as Master Servicer, Midland Loan Services, Inc., as Special
Servicer and Norwest Bank Minnesota, National Association, as Trustee. To the
extent not defined herein, capitalized terms used herein shall have the meanings
assigned thereto in the Pooling Agreement.
This Certificate represents a "regular interest" in a "real estate mortgage
investment conduit," as those terms are defined, respectively, in Sections
860G(a)(1) and 860D of the Internal Revenue Code of l986, as amended.
The Trustee makes no representation or warranty as to any of the statements
contained herein or the validity or sufficiency of the Certificates or the
Mortgage Loans and has executed this Certificate in its limited capacity as
Trustee under the Pooling Agreement.
Pursuant to the terms of the Pooling Agreement, the Trustee, or the Paying
Agent on behalf of the Trustee, will distribute (other than the final
distribution on any Certificate), on the third Business Day of each month,
commencing in November 1998 (each such date, a "Distribution Date"), to the
Person in whose name this Certificate is registered as of the related Record
Date, an amount equal to such Person's pro rata share (based on the Percentage
Interest represented by this Certificate) of that portion of the aggregate
amount of interest then distributable, if any, allocable to the Class X
Certificates for such Distribution Date, all as more fully described in the
Pooling Agreement. Holders of this Certificate may be entitled to Prepayment
Premiums, as provided in the Pooling Agreement.
Interest accrued on this Certificate during an Interest Accrual Period,
plus the aggregate unpaid Interest Shortfall with respect to this Certificate,
if any, will be payable on the related Distribution Date to the extent provided
in the Pooling Agreement. The "Interest Accrual Period" with respect to any
Distribution Date and with respect to each Class of Certificates is the calendar
month preceding the month in which such Distribution Date occurs. Each Interest
Accrual Period with respect to each Class of Certificates is assumed to consist
of 30 days.
All distributions (other than the final distribution on any Certificate)
will be made by the Paying Agent to the persons in whose names the Certificates
are registered at the close of business on each Record Date, which will be the
close of business on the last day of the month immediately preceding the month
in which such Distribution Date occurs, or if such day is not a Business Day,
the immediately preceding Business Day. Such distributions shall be made on each
Distribution Date other than the Termination Date to each Certificateholder of
record on the related Record Date (a) by wire transfer of immediately available
funds to the account of such Certificateholder at a bank or other entity located
in the United States and having appropriate facilities therefor, if such
Certificateholder provides the Trustee with wiring instructions no less than
five Business Days prior to the related Record Date, or otherwise (b) by check
mailed to such Certificateholder. The final distribution on each Certificate
shall be made in like manner, but only upon presentment and surrender of such
Certificate at the office of the Trustee or its agent (which may be the Paying
Agent or the Certificate Registrar acting as such agent) that is specified in
the notice to Certificateholders of such final distribution.
Any funds not distributed on the Termination Date because of the failure of
any Certificateholders to tender their Certificates shall be set aside and held
in trust for the account of the appropriate non-tendering Certificateholders,
whereupon the Trust Fund shall terminate. If any Certificates as to which notice
of the Termination Date has been given pursuant to Section 9.01 of the Pooling
Agreement shall not have been surrendered for cancellation within six months
after the time specified in such notice, the Trustee shall mail a second notice
to the remaining Certificateholders, at their last addresses shown in the
Certificate Register, to surrender their Certificates for cancellation in order
to receive, from such funds held, the final distribution with respect thereto.
If within one year after the second notice any Certificate shall not have been
surrendered for cancellation, the Trustee may, directly or through an agent,
take appropriate steps to contact the remaining Certificateholders concerning
surrender of their Certificates. The costs and expenses of maintaining such
funds and of contacting Certificateholders shall be paid out of the assets which
remain held. If within two years after the second notice any Certificates shall
not have been surrendered for cancellation, the Paying Agent shall pay to the
Class R Certificateholders all amounts distributable to the Holders thereof. No
interest shall accrue or be payable to any Certificateholder on any amount held
as a result of such Certificateholder's failure to surrender its Certificate(s)
for final payment thereof in accordance with Section 9.01 of the Pooling
Agreement.
This Certificate is limited in right of payment to, among other things,
certain collections and recoveries in respect of the Mortgage Loans, as more
specifically set forth herein and in the Pooling Agreement.
As provided in the Pooling Agreement, the Trust Fund includes (i) such
Mortgage Loans as from time to time are subject to the Pooling Agreement,
together with the Mortgage Files relating thereto; (ii) all scheduled or
unscheduled payments on or collections in respect of the Mortgage Loans due
after the Cut-Off Date; (iii) any REO Property; (iv) all revenues received in
respect of any REO Property; (v) the Master Servicer's, the Special Servicer's
and the Trustee's rights under the insurance policies with respect to the
Mortgage Loans required to be maintained pursuant to the Pooling Agreement and
any proceeds thereof; (vi) any Assignments of Leases, Rents and Profits and any
security agreements; (vii) any indemnities or guaranties given as additional
security for any Mortgage Loans; (viii) the Trustee's rights in all assets
deposited in the Lock-Box Accounts, Cash Collateral Accounts, Escrow Accounts,
Interest Reserve Accounts, Reserve Accounts (to the extent such assets in such
accounts are not assets of the respective Borrowers), (ix) the Collection
Account, the Lower-Tier Distribution Account, the Upper-Tier Distribution
Account, the Deferred Interest Distribution Account, the Class Q Distribution
Account and any REO Account including reinvestment income thereon; (x) any
environmental indemnity agreements relating to the Mortgaged Properties; (xi)
the rights and remedies under the Loan Sale Agreement; and (xii) the proceeds of
any of the foregoing.
This Certificate does not purport to summarize the Pooling Agreement, and
reference is made to the Pooling Agreement for the interests, rights, benefits,
obligations and duties evidenced hereby, and the limitations thereon, and the
rights, duties and immunities of the Trustee.
As provided in the Pooling Agreement and subject to certain limitations set
forth therein, this Certificate is transferable or exchangeable only upon
surrender of this Certificate to the Certificate Registrar at the Corporate
Trust Office together with an assignment and transfer (executed by the Holder or
his duly authorized attorney), subject to the applicable requirements in Article
V of the Pooling Agreement. Upon surrender for registration of transfer of this
Certificate, subject to the applicable requirements of Article V of the Pooling
Agreement, the Trustee shall execute and the Authenticating Agent shall duly
authenticate in the name of the designated transferee or transferees, one or
more new Certificates in Denominations of a like aggregate Denomination of this
Certificate. Such Certificates shall be delivered by the Certificate Registrar
in accordance with Section 5.02(e) of the Pooling Agreement.
Prior to due presentation of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar, any Paying Agent and any agent of any of them may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and none of the Depositor, the Master Servicer, the Special
Servicer, the Trustee, the Certificate Registrar, any Paying Agent or any agent
of any of them shall be affected by any notice or knowledge to the contrary.
No fee or service shall be imposed by the Certificate Registrar for its
services in respect of any registration of transfer or exchange referred to in
Section 5.02 of the Pooling Agreement. The Certificate Registrar may require
payment by each transferor of a sum sufficient to cover any tax, expense or
other governmental charge payable in connection with any such transfer.
The Pooling Agreement or any Custodial Agreement may be amended from time
to time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee, without the consent of any of the Certificateholders; (i) to cure any
ambiguity; (ii) to correct or supplement any provisions in the Pooling Agreement
or any Custodial Agreement that may be defective or inconsistent with any other
provisions in such agreement; (iii) to amend any provision thereof to the extent
necessary or desirable to maintain the status of each of the Upper-Tier REMIC,
and Lower-Tier REMIC as a REMIC, or to prevent the imposition of any material
state or local taxes; (iv) to amend or supplement any provisions in either of
such agreements to the extent necessary or desirable to maintain the rating or
ratings assigned to each of the Classes of Certificates by each Rating Agency;
(v) to amend or supplement any provisions in either of such agreements that
shall not adversely affect in any material respect the interests of any
Certificateholder not consenting thereto, as evidenced in writing by an Opinion
of Counsel, at the expense of the party requesting such amendment, or as
evidenced by confirmation in writing from each Rating Agency that such amendment
or supplement will not result in a qualification, withdrawal or downgrading of
the then-current ratings assigned to the Certificates, or (vi) to make any other
provisions with respect to matters or questions arising under the Pooling
Agreement, which shall not be inconsistent with the provisions of the Pooling
Agreement and will not result in a downgrade, qualification or withdrawal of the
then current rating or ratings then assigned to any outstanding Class of
Certificates, as confirmed by each Rating Agency in writing.
Further, the Depositor, the Master Servicer, the Special Servicer and the
Trustee, at any time and from time to time, without the consent of the
Certificateholders, may amend the Pooling Agreement to modify, eliminate or add
to any of its provisions to such extent as shall be necessary to maintain the
qualification of the Trust REMIC as two separate REMICs or of the Grantor Trust
as a grantor trust, or to prevent the imposition of any additional material
state or local taxes, at all times that any Certificates are outstanding;
provided, however, that such action, as evidenced by an Opinion of Counsel
(obtained at the expense of the Trust Fund), is necessary or helpful to maintain
such qualification or to prevent the imposition of any such taxes, and would not
adversely affect in any material respect the interest of any Certificateholder.
The Pooling Agreement or any Custodial Agreement may also be amended from
time to time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee with the consent of the Holders of Certificates evidencing not less than
66-2/3% of the Percentage Interests of each Class of Certificates affected by
the amendment for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Pooling Agreement or any
Custodial Agreement or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such amendment shall:
(i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be
distributed on any Certificate without the consent of all the
Holders of all Certificates representing all Percentage
Interests of the Class or Classes affected thereby;
(ii) change the percentages of Voting Rights of Holders of
Certificates which are required to consent to any action or
inaction under the Pooling Agreement, without the consent of all
the Holders of all Certificates representing all Percentage
Interests of the Class or Classes affected thereby;
(iii) alter the Servicing Standard or the obligations of the Master
Servicer, the Special Servicer or the Trustee to make a P&I
Advance or Property Advance without the consent of the Holders
of all Certificates representing all of the Percentage Interests
of the Class or Classes affected thereby; or
(iv) amend any section of the Pooling Agreement which relates to the
amendment thereof, without the consent of all the Holders of all
Certificates representing all Percentage Interests of the Class
or Classes affected thereby.
The Depositor may effect an early termination of the Trust Fund, upon not
less than 30 days' prior notice given to the Trustee and Master Servicer any
time on or after the Early Termination Notice Date (defined as any date as of
which the aggregate Stated Principal Balance of the Mortgage Loans is less than
1.0% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
Cut-Off Date) specifying the Anticipated Termination Date, by purchasing on such
date all, but not less than all, of the Mortgage Loans then included in the
Trust Fund, and all property acquired in respect of any Mortgage Loan, at a
purchase price, payable in cash, equal to not less than the greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of each Mortgage Loan,
included in the Trust Fund as of the last day of the month
preceding such Distribution Date;
(B) the fair market value of all other property included in the Trust
Fund as of the last day of the month preceding such Distribution
Date, as determined by an Independent appraiser acceptable to the
Master Servicer as of the date not more than 30 days prior to the
last day of the month preceding such Distribution Date;
(C) all unpaid interest accrued on such principal balance of each
such Mortgage Loan (including for this purpose any Mortgage Loan
as to which title to the related Mortgaged Property has been
acquired) at the Mortgage Rate (plus the Excess Rate, to the
extent applicable) to the last day of the Interest Accrual Period
preceding such Distribution Date;
(D) the aggregate amount of unreimbursed Property Advances, and
unpaid Servicing Fees, Special Servicing Compensation, Trustee
Fees and Trust Fund expenses, in each case to the extent
permitted under the Pooling Agreement with interest on all
unreimbursed Advances at the Advance Rate; and
(ii) the aggregate fair market value of the Mortgage Loans, and all other
property acquired in respect of any Mortgage Loan in the Trust Fund,
on the last day of the month preceding such Distribution Date, as
determined by an Independent appraiser acceptable to the Master
Servicer as of a date not more than 30 days prior to the last day of
the month preceding such Distribution Date, together with one month's
interest thereon at the related Mortgage Rates.
The Master Servicer or, if the Master Servicer does not, any Holder of a
Class LR Certificate representing greater than a 50% Percentage Interest in such
Class, may also effect such termination as provided above if it first notifies
the Depositor, or the Depositor and the Master Servicer, respectively, through
the Trustee of its intention to do so in writing at least 30 days prior to the
Early Termination Notice Date and neither the Depositor nor the Master Servicer
as the case may be, terminates the Trust Fund as described above within such
30-day period. All costs and expenses incurred by any and all parties to this
Agreement or by the Trust Fund in connection with the purchase of the Mortgage
Loans and other assets of the Trust Fund pursuant to Section 9.01(c) of the
Pooling Agreement shall be borne by the party exercising its purchase rights
hereunder. The Trustee shall be entitled to rely conclusively on any
determination made by an Independent appraiser pursuant to Section 9.01(c) of
the Pooling Agreement.
The respective obligations and responsibilities of the Master Servicer, the
Special Servicer, the Depositor and the Trustee created by the Pooling Agreement
with respect to the Certificates (other than the obligation to make certain
payments and to send certain notices to Certificateholders as set forth in the
Pooling Agreement) shall terminate immediately following the occurrence of the
last action required to be taken by the Trustee pursuant to Article IX of the
Pooling Agreement on the Termination Date; provided, however, that in no event
shall the trust created thereby continue beyond the expiration of twenty-one
years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late ambassador of the United States to the United Kingdom, living
on the date of the Pooling Agreement.
Unless the Certificate of Authentication on this Certificate has been
executed by the Trustee or on its behalf by the Authenticating Agent, by manual
signature, this Certificate shall not be entitled to any benefit under the
Pooling Agreement or be valid for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Class X Certificate to be
duly executed.
Dated: October ___, 1998
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Trustee
By: ____________________________________
Authorized Officer
Certificate of Authentication
-----------------------------
This is one of the Class X Certificates referred to in the Pooling
Agreement.
Dated: October ___, 1998
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Authenticating Agent
By: ____________________________________
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned ("Assignor(s)") hereby sell(s),
assign(s) and transfer(s) unto ____________________________________________
(please print or typewrite name(s) and address(es), including postal zip code(s)
of assignee(s)) ("Assignee(s)") the entire Percentage Interest represented by
the within Class X Certificate and hereby authorize(s) the registration of
transfer of such interest to Assignee(s) on the Certificate Register of the
Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Class X
Certificate of the entire Percentage Interest represented by the within Class X
Certificates to the above-named Assignee(s) and to deliver such Class X
Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Date: _________________ _________________________________________
Signature by or on behalf of
Assignor(s)
-----------------------------------------
Taxpayer Identification Number
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee(s) should include the following for purposes of
distribution:____________________________________
Address of the Assignee(s) for the purpose of receiving notices and
distributions:____________________________
Distributions, if being made by wire transfer in immediately available
funds to ____________________ for the account of ____________________ account
number ____________________________.
This information is provided by ____________________________ the
Assignee(s) named above, or ________________________________________________ as
its (their) agent.
By: ________________________________________
[Please print or type name(s)]
----------------------------------------
Title:
----------------------------------------
Taxpayer Identification Number
<PAGE>
EXHIBIT A-4
Morgan Stanley Capital I Inc.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-XL2, CLASS B
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE CERTIFICATE
REGISTRAR FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE
DEPOSITOR, THE MASTER SERVICER, THE TRUSTEE, THE UNDERWRITER OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THE CERTIFICATES NOR THE UNDERLYING MORTGAGE
LOANS ARE INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
PRINCIPAL PAYMENTS ON THIS CERTIFICATE ARE PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL AMOUNT OF THIS
CERTIFICATE AT ANY TIME MAY BE LESS THAN THE INITIAL CERTIFICATE PRINCIPAL
AMOUNT SET FORTH BELOW.
THIS CLASS B CERTIFICATE IS SUBORDINATE TO CERTAIN OTHER CLASSES OF CERTIFICATES
TO THE EXTENT SET FORTH IN THE POOLING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE OR ANY INTEREST HEREIN SHOULD NOT BE PURCHASED BY A TRANSFEREE
THAT IS (A) AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, INCLUDING
AN INDIVIDUAL RETIREMENT ACCOUNT OR A KEOGH PLAN, WHICH IS SUBJECT TO TITLE I OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A
GOVERNMENTAL PLAN (AS DEFINED IN SECTION 3(32) OF ERISA) THAT IS SUBJECT TO ANY
FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") WHICH IS, TO A MATERIAL EXTENT,
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE (EACH, A "PLAN"), OR
(B) A COLLECTIVE INVESTMENT FUND IN WHICH SUCH PLANS ARE INVESTED, AN INSURANCE
COMPANY USING ASSETS OF SEPARATE ACCOUNTS OR GENERAL ACCOUNTS WHICH INCLUDE
ASSETS OF PLANS (OR WHICH ARE DEEMED PURSUANT TO ERISA OR SIMILAR LAW TO INCLUDE
ASSETS OF PLANS) OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR USING THE
ASSETS OF ANY SUCH PLAN, OTHER THAN AN INSURANCE COMPANY USING THE ASSETS OF ITS
GENERAL ACCOUNT UNDER CIRCUMSTANCES WHEREBY SUCH PURCHASE AND THE SUBSEQUENT
HOLDING OF SUCH CERTIFICATE BY SUCH INSURANCE COMPANY WOULD BE EXEMPT FROM THE
PROHIBITED TRANSACTION PROVISIONS OF ERISA AND SECTION 4975 OF THE CODE UNDER
PROHIBITED TRANSACTION CLASS EXEMPTION 95-60. EACH PROSPECTIVE TRANSFEREE OF
THIS CERTIFICATE WILL BE REQUIRED TO DELIVER TO THE DEPOSITOR, THE CERTIFICATE
REGISTRAR AND THE TRUSTEE, (I) A REPRESENTATION LETTER, SUBSTANTIALLY IN THE
FORM OF EXHIBIT D-2 TO THE POOLING AGREEMENT REFERRED TO HEREIN, STATING THAT
SUCH PROSPECTIVE TRANSFEREE IS NOT A PERSON REFERRED TO IN CLAUSE (A) OR (B)
ABOVE, OR (II) AN OPINION OF COUNSEL WHICH ESTABLISHES TO THE SATISFACTION OF
THE DEPOSITOR, THE CERTIFICATE REGISTRAR AND THE TRUSTEE THAT THE PURCHASE AND
HOLDING OF THIS CERTIFICATE WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND
BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO TITLE I OF ERISA, SECTION 4975
OF THE CODE OR SIMILAR LAW, WILL NOT CONSTITUTE OR RESULT IN A PROHIBITED
TRANSACTION WITHIN THE MEANING OF ERISA OR SECTION 4975 OF THE CODE OR A
MATERIALLY SIMILAR CHARACTERIZATION UNDER SIMILAR LAW, AND WILL NOT SUBJECT THE
MASTER SERVICER, THE SPECIAL SERVICER, THE DEPOSITOR, THE TRUSTEE OR THE
CERTIFICATE REGISTRAR TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR
LIABILITIES UNDER ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW) IN ADDITION TO
THOSE SET FORTH IN THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE
AN EXPENSE OF THE TRUSTEE, THE TRUST FUND, THE MASTER SERVICER, THE SPECIAL
SERVICER, THE CERTIFICATE REGISTRAR OR THE DEPOSITOR. EACH TRANSFEREE OF A
BENEFICIAL INTEREST HEREIN SHALL BE DEEMED TO REPRESENT THAT IT IS NOT A PERSON
REFERRED TO IN CLAUSE (A) OR (B) ABOVE.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A PRO RATA
UNDIVIDED BENEFICIAL INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G(a)(1) AND 860D OF THE CODE, AND CERTAIN OTHER ASSETS.
<PAGE>
Morgan Stanley Capital I Inc.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-XL2, CLASS B
<TABLE>
<CAPTION>
<S> <C>
Pass-Through Rate: As determined in accordance with the
Pooling Agreement.
First Distribution Date: Cut-Off Date: October 1, 1998
November 4, 1998
Aggregate Initial Scheduled Final
Certificate Principal Amount of the Distribution Date: October 3, 2034]
Class B Certificates:
CUSIP: Initial Certificate Principal
Amount of this Certificate:
ISIN: $
</TABLE>
Common Code:
No.:
This certifies that CEDE & CO. is the registered owner of a beneficial
ownership interest in a Trust Fund, including the distributions to be made with
respect to the Class B Certificates. The Trust Fund, described more fully below,
consists primarily of a pool of Mortgage Loans secured by first liens on
commercial properties and held in trust by the Trustee and serviced by the
Master Servicer. The Trust Fund was created, and the Mortgage Loans are to be
serviced, pursuant to the Pooling Agreement (as defined below). The Holder of
this Certificate, by virtue of the acceptance hereof, assents to the terms,
provisions and conditions of the Pooling Agreement and is bound thereby. Also
issued under the Pooling Agreement are the Class A-1, Class A-2, Class X, Class
C, Class D, Class E, Class F, Class Q, Class R, and Class LR Certificates
(together with the Class B Certificates, the "Certificates"; the Holders of
Certificates issued under the Pooling Agreement are collectively referred to
herein as "Certificateholders").
This Certificate is issued pursuant to, and in accordance with, the terms
of a Pooling and Servicing Agreement, dated as of October 1, 1998 (the "Pooling
Agreement"), by and among Morgan Stanley Capital I Inc., as Depositor, Midland
Loan Services, Inc., as Master Servicer, Midland Loan Services, Inc., as Special
Servicer and Norwest Bank Minnesota, National Association, as Trustee. To the
extent not defined herein, capitalized terms used herein shall have the meanings
assigned thereto in the Pooling Agreement.
This Certificate represents a pro rata undivided beneficial interest in a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined, respectively, in Sections 860G(a)(1) and 860D of the Internal
Revenue Code of l986, as amended, and certain other assets.
The Trustee makes no representation or warranty as to any of the statements
contained herein or the validity or sufficiency of the Certificates or the
Mortgage Loans and has executed this Certificate in its limited capacity as
Trustee under the Pooling Agreement.
Pursuant to the terms of the Pooling Agreement, the Trustee, or the Paying
Agent on behalf of the Trustee, will distribute (other than the final
distribution on any Certificate), on the third Business Day of each month,
commencing in November 1998 (each such date, a "Distribution Date"), to the
Person in whose name this Certificate is registered as of the related Record
Date, an amount equal to such Person's pro rata share (based on the Percentage
Interest represented by this Certificate) of that portion of the aggregate
amount of principal and interest then distributable, if any, allocable to the
Class B Certificates for such Distribution Date, all as more fully described in
the Pooling Agreement. Holders of this Certificate may be entitled to Prepayment
Premiums, as provided in the Pooling Agreement.
Interest accrued on this Certificate during an Interest Accrual Period,
plus the aggregate unpaid Interest Shortfall with respect to this Certificate,
if any, will be payable on the related Distribution Date to the extent provided
in the Pooling Agreement. The "Interest Accrual Period" with respect to any
Distribution Date and with respect to each Class of Certificates is the calendar
month preceding the month in which such Distribution Date occurs. Each Interest
Accrual Period with respect to each Class of Certificates is assumed to consist
of 30 days.
All distributions (other than the final distribution on any Certificate)
will be made by the Paying Agent to the persons in whose names the Certificates
are registered at the close of business on each Record Date, which will be the
close of business on the last day of the month immediately preceding the month
in which such Distribution Date occurs, or if such day is not a Business Day,
the immediately preceding Business Day. Such distributions shall be made on each
Distribution Date other than the Termination Date to each Certificateholder of
record on the related Record Date (a) by wire transfer of immediately available
funds to the account of such Certificateholder at a bank or other entity located
in the United States and having appropriate facilities therefor, if such
Certificateholder provides the Trustee with wiring instructions no less than
five Business Days prior to the related Record Date, or otherwise (b) by check
mailed to such Certificateholder. The final distribution on each Certificate
shall be made in like manner, but only upon presentment and surrender of such
Certificate at the office of the Trustee or its agent (which may be the Paying
Agent or the Certificate Registrar acting as such agent) that is specified in
the notice to Certificateholders of such final distribution.
Any funds not distributed on the Termination Date because of the failure of
any Certificateholders to tender their Certificates shall be set aside and held
in trust for the account of the appropriate non-tendering Certificateholders,
whereupon the Trust Fund shall terminate. If any Certificates as to which notice
of the Termination Date has been given pursuant to Section 9.01 of the Pooling
Agreement shall not have been surrendered for cancellation within six months
after the time specified in such notice, the Trustee shall mail a second notice
to the remaining Certificateholders, at their last addresses shown in the
Certificate Register, to surrender their Certificates for cancellation in order
to receive, from such funds held, the final distribution with respect thereto.
If within one year after the second notice any Certificate shall not have been
surrendered for cancellation, the Trustee may, directly or through an agent,
take appropriate steps to contact the remaining Certificateholders concerning
surrender of their Certificates. The costs and expenses of maintaining such
funds and of contacting Certificateholders shall be paid out of the assets which
remain held. If within two years after the second notice any Certificates shall
not have been surrendered for cancellation, the Paying Agent shall pay to the
Class R Certificateholders all amounts distributable to the Holders thereof. No
interest shall accrue or be payable to any Certificateholder on any amount held
as a result of such Certificateholder's failure to surrender its Certificate(s)
for final payment thereof in accordance with Section 9.01 of the Pooling
Agreement.
This Certificate is limited in right of payment to, among other things,
certain collections and recoveries in respect of the Mortgage Loans, as more
specifically set forth herein and in the Pooling Agreement.
As provided in the Pooling Agreement, the Trust Fund includes (i) such
Mortgage Loans as from time to time are subject to the Pooling Agreement,
together with the Mortgage Files relating thereto; (ii) all scheduled or
unscheduled payments on or collections in respect of the Mortgage Loans due
after the Cut-Off Date; (iii) any REO Property; (iv) all revenues received in
respect of any REO Property; (v) the Master Servicer's, the Special Servicer's
and the Trustee's rights under the insurance policies with respect to the
Mortgage Loans required to be maintained pursuant to the Pooling Agreement and
any proceeds thereof; (vi) any Assignments of Leases, Rents and Profits and any
security agreements; (vii) any indemnities or guaranties given as additional
security for any Mortgage Loans; (viii) the Trustee's rights in all assets
deposited in the Lock-Box Accounts, Cash Collateral Accounts, Escrow Accounts,
Interest Reserve Accounts, Reserve Accounts (to the extent such assets in such
accounts are not assets of the respective Borrowers), (ix) the Collection
Account, the Lower-Tier Distribution Account, the Upper-Tier Distribution
Account, the Deferred Interest Distribution Account, the Class Q Distribution
Account, and any REO Account including reinvestment income thereon; (x) any
environmental indemnity agreements relating to the Mortgaged Properties; (xi)
the rights and remedies under the Loan Sale Agreement; and (xii) the proceeds of
any of the foregoing.
This Certificate does not purport to summarize the Pooling Agreement, and
reference is made to the Pooling Agreement for the interests, rights, benefits,
obligations and duties evidenced hereby, and the limitations thereon, and the
rights, duties and immunities of the Trustee.
As provided in the Pooling Agreement and subject to certain limitations set
forth therein, this Certificate is transferable or exchangeable only upon
surrender of this Certificate to the Certificate Registrar at the Corporate
Trust Office together with an assignment and transfer (executed by the Holder or
his duly authorized attorney), subject to the applicable requirements in Article
V of the Pooling Agreement. Upon surrender for registration of transfer of this
Certificate, subject to the applicable requirements of Article V of the Pooling
Agreement, the Trustee shall execute and the Authenticating Agent shall duly
authenticate in the name of the designated transferee or transferees, one or
more new Certificates in Denominations of a like aggregate Denomination of this
Certificate. Such Certificates shall be delivered by the Certificate Registrar
in accordance with Section 5.02(e) of the Pooling Agreement.
Prior to due presentation of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar, any Paying Agent and any agent of any of them may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and none of the Depositor, the Master Servicer, the Special
Servicer, the Trustee, the Certificate Registrar, any Paying Agent or any agent
of any of them shall be affected by any notice or knowledge to the contrary.
No fee or service shall be imposed by the Certificate Registrar for its
services in respect of any registration of transfer or exchange referred to in
Section 5.02 of the Pooling Agreement. The Certificate Registrar may require
payment by each transferor of a sum sufficient to cover any tax, expense or
other governmental charge payable in connection with any such transfer.
The Pooling Agreement or any Custodial Agreement may be amended from time
to time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee, without the consent of any of the Certificateholders; (i) to cure any
ambiguity; (ii) to correct or supplement any provisions in the Pooling Agreement
or any Custodial Agreement that may be defective or inconsistent with any other
provisions in such agreement; (iii) to amend any provision thereof to the extent
necessary or desirable to maintain the status of each of the Upper-Tier REMIC,
and Lower-Tier REMIC as a REMIC, or to prevent the imposition of any material
state or local taxes; (iv) to amend or supplement any provisions in either of
such agreements to the extent necessary or desirable to maintain the rating or
ratings assigned to each of the Classes of Certificates by each Rating Agency;
(v) to amend or supplement any provisions in either of such agreements that
shall not adversely affect in any material respect the interests of any
Certificateholder not consenting thereto, as evidenced in writing by an Opinion
of Counsel, at the expense of the party requesting such amendment, or as
evidenced by confirmation in writing from each Rating Agency that such amendment
or supplement will not result in a qualification, withdrawal or downgrading of
the then-current ratings assigned to the Certificates, or (vi) to make any other
provisions with respect to matters or questions arising under the Pooling
Agreement, which shall not be inconsistent with the provisions of the Pooling
Agreement and will not result in a downgrade, qualification or withdrawal of the
then current rating or ratings then assigned to any outstanding Class of
Certificates, as confirmed by each Rating Agency in writing.
Further, the Depositor, the Master Servicer, the Special Servicer and the
Trustee, at any time and from time to time, without the consent of the
Certificateholders, may amend the Pooling Agreement to modify, eliminate or add
to any of its provisions to such extent as shall be necessary to maintain the
qualification of the Trust REMIC as two separate REMICs or of the Grantor Trust
as a grantor trust, or to prevent the imposition of any additional material
state or local taxes, at all times that any Certificates are outstanding;
provided, however, that such action, as evidenced by an Opinion of Counsel
(obtained at the expense of the Trust Fund), is necessary or helpful to maintain
such qualification or to prevent the imposition of any such taxes, and would not
adversely affect in any material respect the interest of any Certificateholder.
The Pooling Agreement or any Custodial Agreement may also be amended from
time to time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee with the consent of the Holders of Certificates evidencing not less than
66-2/3% of the Percentage Interests of each Class of Certificates affected by
the amendment for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Pooling Agreement or any
Custodial Agreement or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such amendment shall:
(i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be
distributed on any Certificate without the consent of all the
Holders of all Certificates representing all Percentage
Interests of the Class or Classes affected thereby;
(ii) change the percentages of Voting Rights of Holders of
Certificates which are required to consent to any action or
inaction under the Pooling Agreement, without the consent of all
the Holders of all Certificates representing all Percentage
Interests of the Class or Classes affected thereby;
(iii) alter the Servicing Standard or the obligations of the Master
Servicer, the Special Servicer or the Trustee to make a P&I
Advance or Property Advance without the consent of the Holders
of all Certificates representing all of the Percentage Interests
of the Class or Classes affected thereby; or
(iv) amend any section of the Pooling Agreement which relates to the
amendment thereof, without the consent of all the Holders of all
Certificates representing all Percentage Interests of the Class
or Classes affected thereby.
The Depositor may effect an early termination of the Trust Fund, upon not
less than 30 days' prior notice given to the Trustee and Master Servicer any
time on or after the Early Termination Notice Date (defined as any date as of
which the aggregate Stated Principal Balance of the Mortgage Loans is less than
1.0% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
Cut-Off Date) specifying the Anticipated Termination Date, by purchasing on such
date all, but not less than all, of the Mortgage Loans then included in the
Trust Fund, and all property acquired in respect of any Mortgage Loan, at a
purchase price, payable in cash, equal to not less than the greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of each Mortgage Loan,
included in the Trust Fund as of the last day of the month
preceding such Distribution Date;
(B) the fair market value of all other property included in the Trust
Fund as of the last day of the month preceding such Distribution
Date, as determined by an Independent appraiser acceptable to the
Master Servicer as of the date not more than 30 days prior to the
last day of the month preceding such Distribution Date;
(C) all unpaid interest accrued on such principal balance of each
such Mortgage Loan (including for this purpose any Mortgage Loan
as to which title to the related Mortgaged Property has been
acquired) at the Mortgage Rate (plus the Excess Rate, to the
extent applicable) to the last day of the Interest Accrual Period
preceding such Distribution Date;
(D) the aggregate amount of unreimbursed Property Advances, and
unpaid Servicing Fees, Special Servicing Compensation, Trustee
Fees and Trust Fund expenses, in each case to the extent
permitted under the Pooling Agreement with interest on all
unreimbursed Advances at the Advance Rate; and
(ii) the aggregate fair market value of the Mortgage Loans, and all other
property acquired in respect of any Mortgage Loan in the Trust Fund,
on the last day of the month preceding such Distribution Date, as
determined by an Independent appraiser acceptable to the Master
Servicer as of a date not more than 30 days prior to the last day of
the month preceding such Distribution Date, together with one month's
interest thereon at the related Mortgage Rates.
The Master Servicer or, if the Master Servicer does not, any Holder of a
Class LR Certificate representing greater than a 50% Percentage Interest in such
Class, may also effect such termination as provided above if it first notifies
the Depositor, or the Depositor and the Master Servicer, respectively, through
the Trustee of its intention to do so in writing at least 30 days prior to the
Early Termination Notice Date and neither the Depositor nor the Master Servicer
as the case may be, terminates the Trust Fund as described above within such
30-day period. All costs and expenses incurred by any and all parties to this
Agreement or by the Trust Fund in connection with the purchase of the Mortgage
Loans and other assets of the Trust Fund pursuant to Section 9.01(c) of the
Pooling Agreement shall be borne by the party exercising its purchase rights
hereunder. The Trustee shall be entitled to rely conclusively on any
determination made by an Independent appraiser pursuant to Section 9.01(c) of
the Pooling Agreement.
The respective obligations and responsibilities of the Master Servicer, the
Special Servicer, the Depositor and the Trustee created by the Pooling Agreement
with respect to the Certificates (other than the obligation to make certain
payments and to send certain notices to Certificateholders as set forth in the
Pooling Agreement) shall terminate immediately following the occurrence of the
last action required to be taken by the Trustee pursuant to Article IX of the
Pooling Agreement on the Termination Date; provided, however, that in no event
shall the trust created thereby continue beyond the expiration of twenty-one
years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late ambassador of the United States to the United Kingdom, living
on the date of the Pooling Agreement.
Unless the Certificate of Authentication on this Certificate has been
executed by the Trustee or on its behalf by the Authenticating Agent, by manual
signature, this Certificate shall not be entitled to any benefit under the
Pooling Agreement or be valid for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Class B Certificate to be
duly executed.
Dated: October ___, 1998
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Trustee
By:_________________________________________
Authorized Officer
Certificate of Authentication
-----------------------------
This is one of the Class B Certificates referred to in the Pooling
Agreement.
Dated: October ___, 1998
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Authenticating Agent
By:_________________________________________
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned ("Assignor(s)") hereby sell(s),
assign(s) and transfer(s) unto _________________________________________
_______________________________________________________________________ (please
print or typewrite name(s) and address(es), including postal zip code(s) of
assignee(s)) ("Assignee(s)") the entire Percentage Interest represented by the
within Class B Certificate and hereby authorize(s) the registration of transfer
of such interest to Assignee(s) on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Class B
Certificate of the entire Percentage Interest represented by the within Class B
Certificates to the above-named Assignee(s) and to deliver such Class B
Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Date: _________________ ___________________________________________
Signature by or on behalf of
Assignor(s)
-------------------------------------------
Taxpayer Identification Number
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee(s) should include the following for purposes of
distribution:____________________________________
Address of the Assignee(s) for the purpose of receiving notices and
distributions:____________________________
Distributions, if being made by wire transfer in immediately available
funds to ___________________________ for the account of
_____________________________ account number __________________________.
This information is provided by __________________________ the Assignee(s)
named above, or ________________________________________________ as its (their)
agent.
By: ____________________________________________
--------------------------------------------
[Please print or type name(s)]
--------------------------------------------
Title:
--------------------------------------------
Taxpayer Identification Number
<PAGE>
EXHIBIT A-5
Morgan Stanley Capital I Inc.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-XL2, CLASS C
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE CERTIFICATE
REGISTRAR FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE
DEPOSITOR, THE MASTER SERVICER, THE TRUSTEE, THE UNDERWRITER OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THE CERTIFICATES NOR THE UNDERLYING MORTGAGE
LOANS ARE INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
PRINCIPAL PAYMENTS ON THIS CERTIFICATE ARE PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL AMOUNT OF THIS
CERTIFICATE AT ANY TIME MAY BE LESS THAN THE INITIAL CERTIFICATE PRINCIPAL
AMOUNT SET FORTH BELOW.
THIS CLASS C CERTIFICATE IS SUBORDINATE TO CERTAIN OTHER CLASSES OF CERTIFICATES
TO THE EXTENT SET FORTH IN THE POOLING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE OR ANY INTEREST HEREIN SHOULD NOT BE PURCHASED BY A TRANSFEREE
THAT IS (A) AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, INCLUDING
AN INDIVIDUAL RETIREMENT ACCOUNT OR A KEOGH PLAN, WHICH IS SUBJECT TO TITLE I OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A
GOVERNMENTAL PLAN (AS DEFINED IN SECTION 3(32) OF ERISA) THAT IS SUBJECT TO ANY
FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") WHICH IS, TO A MATERIAL EXTENT,
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE (EACH, A "PLAN"), OR
(B) A COLLECTIVE INVESTMENT FUND IN WHICH SUCH PLANS ARE INVESTED, AN INSURANCE
COMPANY USING ASSETS OF SEPARATE ACCOUNTS OR GENERAL ACCOUNTS WHICH INCLUDE
ASSETS OF PLANS (OR WHICH ARE DEEMED PURSUANT TO ERISA OR SIMILAR LAW TO INCLUDE
ASSETS OF PLANS) OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR USING THE
ASSETS OF ANY SUCH PLAN, OTHER THAN AN INSURANCE COMPANY USING THE ASSETS OF ITS
GENERAL ACCOUNT UNDER CIRCUMSTANCES WHEREBY SUCH PURCHASE AND THE SUBSEQUENT
HOLDING OF SUCH CERTIFICATE BY SUCH INSURANCE COMPANY WOULD BE EXEMPT FROM THE
PROHIBITED TRANSACTION PROVISIONS OF ERISA AND SECTION 4975 OF THE CODE UNDER
PROHIBITED TRANSACTION CLASS EXEMPTION 95-60. EACH PROSPECTIVE TRANSFEREE OF
THIS CERTIFICATE WILL BE REQUIRED TO DELIVER TO THE DEPOSITOR, THE CERTIFICATE
REGISTRAR AND THE TRUSTEE, (I) A REPRESENTATION LETTER, SUBSTANTIALLY IN THE
FORM OF EXHIBIT D-2 TO THE POOLING AGREEMENT REFERRED TO HEREIN, STATING THAT
SUCH PROSPECTIVE TRANSFEREE IS NOT A PERSON REFERRED TO IN CLAUSE (A) OR (B)
ABOVE, OR (II) AN OPINION OF COUNSEL WHICH ESTABLISHES TO THE SATISFACTION OF
THE DEPOSITOR, THE CERTIFICATE REGISTRAR AND THE TRUSTEE THAT THE PURCHASE AND
HOLDING OF THIS CERTIFICATE WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND
BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO TITLE I OF ERISA, SECTION 4975
OF THE CODE OR SIMILAR LAW, WILL NOT CONSTITUTE OR RESULT IN A PROHIBITED
TRANSACTION WITHIN THE MEANING OF ERISA OR SECTION 4975 OF THE CODE OR A
MATERIALLY SIMILAR CHARACTERIZATION UNDER SIMILAR LAW, AND WILL NOT SUBJECT THE
MASTER SERVICER, THE SPECIAL SERVICER, THE DEPOSITOR, THE TRUSTEE OR THE
CERTIFICATE REGISTRAR TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR
LIABILITIES UNDER ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW) IN ADDITION TO
THOSE SET FORTH IN THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE
AN EXPENSE OF THE TRUSTEE, THE TRUST FUND, THE MASTER SERVICER, THE SPECIAL
SERVICER, THE CERTIFICATE REGISTRAR OR THE DEPOSITOR. EACH TRANSFEREE OF A
BENEFICIAL INTEREST HEREIN SHALL BE DEEMED TO REPRESENT THAT IT IS NOT A PERSON
REFERRED TO IN CLAUSE (A) OR (B) ABOVE.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A PRO RATA
UNDIVIDED BENEFICIAL INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G(a)(1) AND 860D OF THE CODE, AND CERTAIN OTHER ASSETS.
<PAGE>
Morgan Stanley Capital I Inc.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-XL2, CLASS C
Pass-Through Rate: As determined in accordance with the
Pooling Agreement.
<TABLE>
<CAPTION>
<S> <C>
First Distribution Date: Cut-Off Date: October 1, 1998
November 4, 1998
Aggregate Initial Scheduled Final
Certificate Principal Amount of the Distribution Date: October 3, 2034
Class C Certificates:
CUSIP: Initial Certificate Principal
Amount of this Certificate:
ISIN: $
</TABLE>
Common Code:
No.:
This certifies that CEDE & CO. is the registered owner of a beneficial
ownership interest in a Trust Fund, including the distributions to be made with
respect to the Class C Certificates. The Trust Fund, described more fully below,
consists primarily of a pool of Mortgage Loans secured by first liens on
commercial properties and held in trust by the Trustee and serviced by the
Master Servicer. The Trust Fund was created, and the Mortgage Loans are to be
serviced, pursuant to the Pooling Agreement (as defined below). The Holder of
this Certificate, by virtue of the acceptance hereof, assents to the terms,
provisions and conditions of the Pooling Agreement and is bound thereby. Also
issued under the Pooling Agreement are the Class A-1, Class A-2, Class X, Class
B, Class D, Class E, Class F, Class Q, Class R, and Class LR Certificates
(together with the Class C Certificates, the "Certificates"; the Holders of
Certificates issued under the Pooling Agreement are collectively referred to
herein as "Certificateholders").
This Certificate is issued pursuant to, and in accordance with, the terms
of a Pooling and Servicing Agreement, dated as of October 1, 1998 (the "Pooling
Agreement"), by and among Morgan Stanley Capital I Inc., as Depositor, Midland
Loan Services, Inc., as Master Servicer, Midland Loan Services, Inc., as Special
Servicer and Norwest Bank Minnesota, National Association, as Trustee. To the
extent not defined herein, capitalized terms used herein shall have the meanings
assigned thereto in the Pooling Agreement.
This Certificate represents a pro rata undivided beneficial interest in a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined, respectively, in Sections 860G(a)(1) and 860D of the Internal
Revenue Code of l986, as amended, and certain other assets.
The Trustee makes no representation or warranty as to any of the statements
contained herein or the validity or sufficiency of the Certificates or the
Mortgage Loans and has executed this Certificate in its limited capacity as
Trustee under the Pooling Agreement.
Pursuant to the terms of the Pooling Agreement, the Trustee, or the Paying
Agent on behalf of the Trustee, will distribute (other than the final
distribution on any Certificate), on the third Business Day of each month,
commencing in November 1998 (each such date, a "Distribution Date"), to the
Person in whose name this Certificate is registered as of the related Record
Date, an amount equal to such Person's pro rata share (based on the Percentage
Interest represented by this Certificate) of that portion of the aggregate
amount of principal and interest then distributable, if any, allocable to the
Class C Certificates for such Distribution Date, all as more fully described in
the Pooling Agreement. Holders of this Certificate may be entitled to Prepayment
Premiums, as provided in the Pooling Agreement.
Interest accrued on this Certificate during an Interest Accrual Period,
plus the aggregate unpaid Interest Shortfall with respect to this Certificate,
if any, will be payable on the related Distribution Date to the extent provided
in the Pooling Agreement. The "Interest Accrual Period" with respect to any
Distribution Date and with respect to each Class of Certificates is the calendar
month preceding the month in which such Distribution Date occurs. Each Interest
Accrual Period with respect to each Class of Certificates is assumed to consist
of 30 days.
All distributions (other than the final distribution on any Certificate)
will be made by the Paying Agent to the persons in whose names the Certificates
are registered at the close of business on each Record Date, which will be the
close of business on the last day of the month immediately preceding the month
in which such Distribution Date occurs, or if such day is not a Business Day,
the immediately preceding Business Day. Such distributions shall be made on each
Distribution Date other than the Termination Date to each Certificateholder of
record on the related Record Date (a) by wire transfer of immediately available
funds to the account of such Certificateholder at a bank or other entity located
in the United States and having appropriate facilities therefor, if such
Certificateholder provides the Trustee with wiring instructions no less than
five Business Days prior to the related Record Date, or otherwise (b) by check
mailed to such Certificateholder. The final distribution on each Certificate
shall be made in like manner, but only upon presentment and surrender of such
Certificate at the office of the Trustee or its agent (which may be the Paying
Agent or the Certificate Registrar acting as such agent) that is specified in
the notice to Certificateholders of such final distribution.
Any funds not distributed on the Termination Date because of the failure of
any Certificateholders to tender their Certificates shall be set aside and held
in trust for the account of the appropriate non-tendering Certificateholders,
whereupon the Trust Fund shall terminate. If any Certificates as to which notice
of the Termination Date has been given pursuant to Section 9.01 of the Pooling
Agreement shall not have been surrendered for cancellation within six months
after the time specified in such notice, the Trustee shall mail a second notice
to the remaining Certificateholders, at their last addresses shown in the
Certificate Register, to surrender their Certificates for cancellation in order
to receive, from such funds held, the final distribution with respect thereto.
If within one year after the second notice any Certificate shall not have been
surrendered for cancellation, the Trustee may, directly or through an agent,
take appropriate steps to contact the remaining Certificateholders concerning
surrender of their Certificates. The costs and expenses of maintaining such
funds and of contacting Certificateholders shall be paid out of the assets which
remain held. If within two years after the second notice any Certificates shall
not have been surrendered for cancellation, the Paying Agent shall pay to the
Class R Certificateholders all amounts distributable to the Holders thereof. No
interest shall accrue or be payable to any Certificateholder on any amount held
as a result of such Certificateholder's failure to surrender its Certificate(s)
for final payment thereof in accordance with Section 9.01 of the Pooling
Agreement.
This Certificate is limited in right of payment to, among other things,
certain collections and recoveries in respect of the Mortgage Loans, as more
specifically set forth herein and in the Pooling Agreement.
As provided in the Pooling Agreement, the Trust Fund includes (i) such
Mortgage Loans as from time to time are subject to the Pooling Agreement,
together with the Mortgage Files relating thereto; (ii) all scheduled or
unscheduled payments on or collections in respect of the Mortgage Loans due
after the Cut-Off Date; (iii) any REO Property; (iv) all revenues received in
respect of any REO Property; (v) the Master Servicer's, the Special Servicer's
and the Trustee's rights under the insurance policies with respect to the
Mortgage Loans required to be maintained pursuant to the Pooling Agreement and
any proceeds thereof; (vi) any Assignments of Leases, Rents and Profits and any
security agreements; (vii) any indemnities or guaranties given as additional
security for any Mortgage Loans; (viii) the Trustee's rights in all assets
deposited in the Lock-Box Accounts, Cash Collateral Accounts, Escrow Accounts,
Interest Reserve Accounts, Reserve Accounts (to the extent such assets in such
accounts are not assets of the respective Borrowers), (ix) the Collection
Account, the Lower-Tier Distribution Account, the Upper-Tier Distribution
Account, the Deferred Interest Distribution Account, the Class Q Distribution
Account, and any REO Account including reinvestment income thereon; (x) any
environmental indemnity agreements relating to the Mortgaged Properties; (xi)
the rights and remedies under the Loan Sale Agreement; and (xii) the proceeds of
any of the foregoing.
This Certificate does not purport to summarize the Pooling Agreement, and
reference is made to the Pooling Agreement for the interests, rights, benefits,
obligations and duties evidenced hereby, and the limitations thereon, and the
rights, duties and immunities of the Trustee.
As provided in the Pooling Agreement and subject to certain limitations set
forth therein, this Certificate is transferable or exchangeable only upon
surrender of this Certificate to the Certificate Registrar at the Corporate
Trust Office together with an assignment and transfer (executed by the Holder or
his duly authorized attorney), subject to the applicable requirements in Article
V of the Pooling Agreement. Upon surrender for registration of transfer of this
Certificate, subject to the applicable requirements of Article V of the Pooling
Agreement, the Trustee shall execute and the Authenticating Agent shall duly
authenticate in the name of the designated transferee or transferees, one or
more new Certificates in Denominations of a like aggregate Denomination of this
Certificate. Such Certificates shall be delivered by the Certificate Registrar
in accordance with Section 5.02(e) of the Pooling Agreement.
Prior to due presentation of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar, any Paying Agent and any agent of any of them may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and none of the Depositor, the Master Servicer, the Special
Servicer, the Trustee, the Certificate Registrar, any Paying Agent or any agent
of any of them shall be affected by any notice or knowledge to the contrary.
No fee or service shall be imposed by the Certificate Registrar for its
services in respect of any registration of transfer or exchange referred to in
Section 5.02 of the Pooling Agreement. The Certificate Registrar may require
payment by each transferor of a sum sufficient to cover any tax, expense or
other governmental charge payable in connection with any such transfer.
The Pooling Agreement or any Custodial Agreement may be amended from time
to time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee, without the consent of any of the Certificateholders; (i) to cure any
ambiguity; (ii) to correct or supplement any provisions in the Pooling Agreement
or any Custodial Agreement that may be defective or inconsistent with any other
provisions in such agreement; (iii) to amend any provision thereof to the extent
necessary or desirable to maintain the status of each of the Upper-Tier REMIC,
and Lower-Tier REMIC as a REMIC, or to prevent the imposition of any material
state or local taxes; (iv) to amend or supplement any provisions in either of
such agreements to the extent necessary or desirable to maintain the rating or
ratings assigned to each of the Classes of Certificates by each Rating Agency;
(v) to amend or supplement any provisions in either of such agreements that
shall not adversely affect in any material respect the interests of any
Certificateholder not consenting thereto, as evidenced in writing by an Opinion
of Counsel, at the expense of the party requesting such amendment, or as
evidenced by confirmation in writing from each Rating Agency that such amendment
or supplement will not result in a qualification, withdrawal or downgrading of
the then-current ratings assigned to the Certificates, or (vi) to make any other
provisions with respect to matters or questions arising under the Pooling
Agreement, which shall not be inconsistent with the provisions of the Pooling
Agreement and will not result in a downgrade, qualification or withdrawal of the
then current rating or ratings then assigned to any outstanding Class of
Certificates, as confirmed by each Rating Agency in writing.
Further, the Depositor, the Master Servicer, the Special Servicer and the
Trustee, at any time and from time to time, without the consent of the
Certificateholders, may amend the Pooling Agreement to modify, eliminate or add
to any of its provisions to such extent as shall be necessary to maintain the
qualification of the Trust REMIC as two separate REMICs or of the Grantor Trust
as a grantor trust, or to prevent the imposition of any additional material
state or local taxes, at all times that any Certificates are outstanding;
provided, however, that such action, as evidenced by an Opinion of Counsel
(obtained at the expense of the Trust Fund), is necessary or helpful to maintain
such qualification or to prevent the imposition of any such taxes, and would not
adversely affect in any material respect the interest of any Certificateholder.
The Pooling Agreement or any Custodial Agreement may also be amended from
time to time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee with the consent of the Holders of Certificates evidencing not less than
66-2/3% of the Percentage Interests of each Class of Certificates affected by
the amendment for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Pooling Agreement or any
Custodial Agreement or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such amendment shall:
(i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be
distributed on any Certificate without the consent of all the
Holders of all Certificates representing all Percentage
Interests of the Class or Classes affected thereby;
(ii) change the percentages of Voting Rights of Holders of
Certificates which are required to consent to any action or
inaction under the Pooling Agreement, without the consent of all
the Holders of all Certificates representing all Percentage
Interests of the Class or Classes affected thereby;
(iii) alter the Servicing Standard or the obligations of the Master
Servicer, the Special Servicer or the Trustee to make a P&I
Advance or Property Advance without the consent of the Holders
of all Certificates representing all of the Percentage Interests
of the Class or Classes affected thereby; or
(iv) amend any section of the Pooling Agreement which relates to the
amendment thereof, without the consent of all the Holders of all
Certificates representing all Percentage Interests of the Class
or Classes affected thereby.
The Depositor may effect an early termination of the Trust Fund, upon not
less than 30 days' prior notice given to the Trustee and Master Servicer any
time on or after the Early Termination Notice Date (defined as any date as of
which the aggregate Stated Principal Balance of the Mortgage Loans is less than
1.0% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
Cut-Off Date) specifying the Anticipated Termination Date, by purchasing on such
date all, but not less than all, of the Mortgage Loans then included in the
Trust Fund, and all property acquired in respect of any Mortgage Loan, at a
purchase price, payable in cash, equal to not less than the greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of each Mortgage Loan,
included in the Trust Fund as of the last day of the month
preceding such Distribution Date;
(B) the fair market value of all other property included in the
Trust Fund as of the last day of the month preceding such
Distribution Date, as determined by an Independent appraiser
acceptable to the Master Servicer as of the date not more than
30 days prior to the last day of the month preceding such
Distribution Date;
(C) all unpaid interest accrued on such principal balance of each
such Mortgage Loan (including for this purpose any Mortgage Loan
as to which title to the related Mortgaged Property has been
acquired) at the Mortgage Rate (plus the Excess Rate, to the
extent applicable) to the last day of the Interest Accrual
Period preceding such Distribution Date;
(D) the aggregate amount of unreimbursed Property Advances, and
unpaid Servicing Fees, Special Servicing Compensation, Trustee
Fees and Trust Fund expenses, in each case to the extent
permitted under the Pooling Agreement with interest on all
unreimbursed Advances at the Advance Rate; and
(ii) the aggregate fair market value of the Mortgage Loans, and all other
property acquired in respect of any Mortgage Loan in the Trust Fund,
on the last day of the month preceding such Distribution Date, as
determined by an Independent appraiser acceptable to the Master
Servicer as of a date not more than 30 days prior to the last day of
the month preceding such Distribution Date, together with one month's
interest thereon at the related Mortgage Rates.
The Master Servicer or, if the Master Servicer does not, any Holder of a
Class LR Certificate representing greater than a 50% Percentage Interest in such
Class, may also effect such termination as provided above if it first notifies
the Depositor, or the Depositor and the Master Servicer, respectively, through
the Trustee of its intention to do so in writing at least 30 days prior to the
Early Termination Notice Date and neither the Depositor nor the Master Servicer
as the case may be, terminates the Trust Fund as described above within such
30-day period. All costs and expenses incurred by any and all parties to this
Agreement or by the Trust Fund in connection with the purchase of the Mortgage
Loans and other assets of the Trust Fund pursuant to Section 9.01(c) of the
Pooling Agreement shall be borne by the party exercising its purchase rights
hereunder. The Trustee shall be entitled to rely conclusively on any
determination made by an Independent appraiser pursuant to Section 9.01(c) of
the Pooling Agreement.
The respective obligations and responsibilities of the Master Servicer, the
Special Servicer, the Depositor and the Trustee created by the Pooling Agreement
with respect to the Certificates (other than the obligation to make certain
payments and to send certain notices to Certificateholders as set forth in the
Pooling Agreement) shall terminate immediately following the occurrence of the
last action required to be taken by the Trustee pursuant to Article IX of the
Pooling Agreement on the Termination Date; provided, however, that in no event
shall the trust created thereby continue beyond the expiration of twenty-one
years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late ambassador of the United States to the United Kingdom, living
on the date of the Pooling Agreement.
Unless the Certificate of Authentication on this Certificate has been
executed by the Trustee or on its behalf by the Authenticating Agent, by manual
signature, this Certificate shall not be entitled to any benefit under the
Pooling Agreement or be valid for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Class C Certificate to be
duly executed.
Dated: October ___, 1998
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Trustee
By:__________________________________________
Authorized Officer
Certificate of Authentication
-----------------------------
This is one of the Class C Certificates referred to in the Pooling
Agreement.
Dated: October ___, 1998
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Authenticating Agent
By:__________________________________________
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned ("Assignor(s)") hereby sell(s),
assign(s) and transfer(s) unto _________________________________________
_______________________________________________________________________ (please
print or typewrite name(s) and address(es), including postal zip code(s) of
assignee(s)) ("Assignee(s)") the entire Percentage Interest represented by the
within Class C Certificate and hereby authorize(s) the registration of transfer
of such interest to Assignee(s) on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Class C
Certificate of the entire Percentage Interest represented by the within Class C
Certificates to the above-named Assignee(s) and to deliver such Class C
Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Date: _________________ _____________________________________________
Signature by or on behalf of
Assignor(s)
---------------------------------------------
Taxpayer Identification Number
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee(s) should include the following for purposes of
distribution:____________________________________
Address of the Assignee(s) for the purpose of receiving notices and
distributions:____________________________
Distributions, if being made by wire transfer in immediately available
funds to ___________________________ for the account of
_____________________________ account number __________________________.
This information is provided by __________________________ the Assignee(s)
named above, or ________________________________________________ as its (their)
agent.
By: _________________________________________
-----------------------------------------
[Please print or type name(s)]
-----------------------------------------
Title:
-----------------------------------------
Taxpayer Identification Number
<PAGE>
EXHIBIT A-6
Morgan Stanley Capital I Inc.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-XL2, CLASS D
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE CERTIFICATE
REGISTRAR FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE
DEPOSITOR, THE MASTER SERVICER, THE TRUSTEE, THE UNDERWRITER OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THE CERTIFICATES NOR THE UNDERLYING MORTGAGE
LOANS ARE INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
PRINCIPAL PAYMENTS ON THIS CERTIFICATE ARE PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL AMOUNT OF THIS
CERTIFICATE AT ANY TIME MAY BE LESS THAN THE INITIAL CERTIFICATE PRINCIPAL
AMOUNT SET FORTH BELOW.
THIS CLASS D CERTIFICATE IS SUBORDINATE TO CERTAIN OTHER CLASSES OF CERTIFICATES
TO THE EXTENT SET FORTH IN THE POOLING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE OR ANY INTEREST HEREIN SHOULD NOT BE PURCHASED BY A TRANSFEREE
THAT IS (A) AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, INCLUDING
AN INDIVIDUAL RETIREMENT ACCOUNT OR A KEOGH PLAN, WHICH IS SUBJECT TO TITLE I OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A
GOVERNMENTAL PLAN (AS DEFINED IN SECTION 3(32) OF ERISA) THAT IS SUBJECT TO ANY
FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") WHICH IS, TO A MATERIAL EXTENT,
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE (EACH, A "PLAN"), OR
(B) A COLLECTIVE INVESTMENT FUND IN WHICH SUCH PLANS ARE INVESTED, AN INSURANCE
COMPANY USING ASSETS OF SEPARATE ACCOUNTS OR GENERAL ACCOUNTS WHICH INCLUDE
ASSETS OF PLANS (OR WHICH ARE DEEMED PURSUANT TO ERISA OR SIMILAR LAW TO INCLUDE
ASSETS OF PLANS) OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR USING THE
ASSETS OF ANY SUCH PLAN, OTHER THAN AN INSURANCE COMPANY USING THE ASSETS OF ITS
GENERAL ACCOUNT UNDER CIRCUMSTANCES WHEREBY SUCH PURCHASE AND THE SUBSEQUENT
HOLDING OF SUCH CERTIFICATE BY SUCH INSURANCE COMPANY WOULD BE EXEMPT FROM THE
PROHIBITED TRANSACTION PROVISIONS OF ERISA AND SECTION 4975 OF THE CODE UNDER
PROHIBITED TRANSACTION CLASS EXEMPTION 95-60. EACH PROSPECTIVE TRANSFEREE OF
THIS CERTIFICATE WILL BE REQUIRED TO DELIVER TO THE DEPOSITOR, THE CERTIFICATE
REGISTRAR AND THE TRUSTEE, (I) A REPRESENTATION LETTER, SUBSTANTIALLY IN THE
FORM OF EXHIBIT D-2 TO THE POOLING AGREEMENT REFERRED TO HEREIN, STATING THAT
SUCH PROSPECTIVE TRANSFEREE IS NOT A PERSON REFERRED TO IN CLAUSE (A) OR (B)
ABOVE, OR (II) AN OPINION OF COUNSEL WHICH ESTABLISHES TO THE SATISFACTION OF
THE DEPOSITOR, THE CERTIFICATE REGISTRAR AND THE TRUSTEE THAT THE PURCHASE AND
HOLDING OF THIS CERTIFICATE WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND
BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO TITLE I OF ERISA, SECTION 4975
OF THE CODE OR SIMILAR LAW, WILL NOT CONSTITUTE OR RESULT IN A PROHIBITED
TRANSACTION WITHIN THE MEANING OF ERISA OR SECTION 4975 OF THE CODE OR A
MATERIALLY SIMILAR CHARACTERIZATION UNDER SIMILAR LAW, AND WILL NOT SUBJECT THE
MASTER SERVICER, THE SPECIAL SERVICER, THE DEPOSITOR, THE TRUSTEE OR THE
CERTIFICATE REGISTRAR TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR
LIABILITIES UNDER ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW) IN ADDITION TO
THOSE SET FORTH IN THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE
AN EXPENSE OF THE TRUSTEE, THE TRUST FUND, THE MASTER SERVICER, THE SPECIAL
SERVICER, THE CERTIFICATE REGISTRAR OR THE DEPOSITOR. EACH TRANSFEREE OF A
BENEFICIAL INTEREST HEREIN SHALL BE DEEMED TO REPRESENT THAT IT IS NOT A PERSON
REFERRED TO IN CLAUSE (A) OR (B) ABOVE.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A PRO RATA
UNDIVIDED BENEFICIAL INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G(a)(1) AND 860D OF THE CODE, AND CERTAIN OTHER ASSETS.
<PAGE>
Morgan Stanley Capital I Inc.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-XL2, CLASS D
Pass-Through Rate: As determined in accordance with the
Pooling Agreement.
<TABLE>
<CAPTION>
<S> <C>
First Distribution Date: Cut-Off Date: October 1, 1998
November 4, 1998
Aggregate Initial Scheduled Final
Certificate Principal Amount of the Distribution Date: October 3, 2034
Class D Certificates:
CUSIP: Initial Certificate Principal
Amount of this Certificate:
ISIN: $
</TABLE>
Common Code:
No.:
This certifies that CEDE & CO. is the registered owner of a beneficial
ownership interest in a Trust Fund, including the distributions to be made with
respect to the Class D Certificates. The Trust Fund, described more fully below,
consists primarily of a pool of Mortgage Loans secured by first liens on
commercial properties and held in trust by the Trustee and serviced by the
Master Servicer. The Trust Fund was created, and the Mortgage Loans are to be
serviced, pursuant to the Pooling Agreement (as defined below). The Holder of
this Certificate, by virtue of the acceptance hereof, assents to the terms,
provisions and conditions of the Pooling Agreement and is bound thereby. Also
issued under the Pooling Agreement are the Class A-1, Class A-2, Class X, Class
B, Class C, Class E, Class F, Class Q, Class R, and Class LR Certificates
(together with the Class D Certificates, the "Certificates"; the Holders of
Certificates issued under the Pooling Agreement are collectively referred to
herein as "Certificateholders").
This Certificate is issued pursuant to, and in accordance with, the terms
of a Pooling and Servicing Agreement, dated as of October 1, 1998 (the "Pooling
Agreement"), by and among Morgan Stanley Capital I Inc., as Depositor, Midland
Loan Services, Inc., as Master Servicer, Midland Loan Services, Inc., as Special
Servicer and Norwest Bank Minnesota, National Association, as Trustee. To the
extent not defined herein, capitalized terms used herein shall have the meanings
assigned thereto in the Pooling Agreement.
This Certificate represents a pro rata undivided beneficial interest in a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined, respectively, in Sections 860G(a)(1) and 860D of the Internal
Revenue Code of l986, as amended, and certain other assets.
The Trustee makes no representation or warranty as to any of the statements
contained herein or the validity or sufficiency of the Certificates or the
Mortgage Loans and has executed this Certificate in its limited capacity as
Trustee under the Pooling Agreement.
Pursuant to the terms of the Pooling Agreement, the Trustee, or the Paying
Agent on behalf of the Trustee, will distribute (other than the final
distribution on any Certificate), on the third Business Day of each month,
commencing in November 1998 (each such date, a "Distribution Date"), to the
Person in whose name this Certificate is registered as of the related Record
Date, an amount equal to such Person's pro rata share (based on the Percentage
Interest represented by this Certificate) of that portion of the aggregate
amount of principal and interest then distributable, if any, allocable to the
Class D Certificates for such Distribution Date, all as more fully described in
the Pooling Agreement. Holders of this Certificate may be entitled to Prepayment
Premiums, as provided in the Pooling Agreement.
Interest accrued on this Certificate during an Interest Accrual Period,
plus the aggregate unpaid Interest Shortfall with respect to this Certificate,
if any, will be payable on the related Distribution Date to the extent provided
in the Pooling Agreement. The "Interest Accrual Period" with respect to any
Distribution Date and with respect to each Class of Certificates is the calendar
month preceding the month in which such Distribution Date occurs. Each Interest
Accrual Period with respect to each Class of Certificates is assumed to consist
of 30 days.
All distributions (other than the final distribution on any Certificate)
will be made by the Paying Agent to the persons in whose names the Certificates
are registered at the close of business on each Record Date, which will be the
close of business on the last day of the month immediately preceding the month
in which such Distribution Date occurs, or if such day is not a Business Day,
the immediately preceding Business Day. Such distributions shall be made on each
Distribution Date other than the Termination Date to each Certificateholder of
record on the related Record Date (a) by wire transfer of immediately available
funds to the account of such Certificateholder at a bank or other entity located
in the United States and having appropriate facilities therefor, if such
Certificateholder provides the Trustee with wiring instructions no less than
five Business Days prior to the related Record Date, or otherwise (b) by check
mailed to such Certificateholder. The final distribution on each Certificate
shall be made in like manner, but only upon presentment and surrender of such
Certificate at the office of the Trustee or its agent (which may be the Paying
Agent or the Certificate Registrar acting as such agent) that is specified in
the notice to Certificateholders of such final distribution.
Any funds not distributed on the Termination Date because of the failure of
any Certificateholders to tender their Certificates shall be set aside and held
in trust for the account of the appropriate non-tendering Certificateholders,
whereupon the Trust Fund shall terminate. If any Certificates as to which notice
of the Termination Date has been given pursuant to Section 9.01 of the Pooling
Agreement shall not have been surrendered for cancellation within six months
after the time specified in such notice, the Trustee shall mail a second notice
to the remaining Certificateholders, at their last addresses shown in the
Certificate Register, to surrender their Certificates for cancellation in order
to receive, from such funds held, the final distribution with respect thereto.
If within one year after the second notice any Certificate shall not have been
surrendered for cancellation, the Trustee may, directly or through an agent,
take appropriate steps to contact the remaining Certificateholders concerning
surrender of their Certificates. The costs and expenses of maintaining such
funds and of contacting Certificateholders shall be paid out of the assets which
remain held. If within two years after the second notice any Certificates shall
not have been surrendered for cancellation, the Paying Agent shall pay to the
Class R Certificateholders all amounts distributable to the Holders thereof. No
interest shall accrue or be payable to any Certificateholder on any amount held
as a result of such Certificateholder's failure to surrender its Certificate(s)
for final payment thereof in accordance with Section 9.01 of the Pooling
Agreement.
This Certificate is limited in right of payment to, among other things,
certain collections and recoveries in respect of the Mortgage Loans, as more
specifically set forth herein and in the Pooling Agreement.
As provided in the Pooling Agreement, the Trust Fund includes (i) such
Mortgage Loans as from time to time are subject to the Pooling Agreement,
together with the Mortgage Files relating thereto; (ii) all scheduled or
unscheduled payments on or collections in respect of the Mortgage Loans due
after the Cut-Off Date; (iii) any REO Property; (iv) all revenues received in
respect of any REO Property; (v) the Master Servicer's, the Special Servicer's
and the Trustee's rights under the insurance policies with respect to the
Mortgage Loans required to be maintained pursuant to the Pooling Agreement and
any proceeds thereof; (vi) any Assignments of Leases, Rents and Profits and any
security agreements; (vii) any indemnities or guaranties given as additional
security for any Mortgage Loans; (viii) the Trustee's rights in all assets
deposited in the Lock-Box Accounts, Cash Collateral Accounts, Escrow Accounts,
Interest Reserve Accounts, Reserve Accounts (to the extent such assets in such
accounts are not assets of the respective Borrowers), (ix) the Collection
Account, the Lower-Tier Distribution Account, the Upper-Tier Distribution
Account, the Deferred Interest Distribution Account, the Class Q Distribution
Account, and any REO Account including reinvestment income thereon; (x) any
environmental indemnity agreements relating to the Mortgaged Properties; (xi)
the rights and remedies under the Loan Sale Agreement; and (xii) the proceeds of
any of the foregoing.
This Certificate does not purport to summarize the Pooling Agreement, and
reference is made to the Pooling Agreement for the interests, rights, benefits,
obligations and duties evidenced hereby, and the limitations thereon, and the
rights, duties and immunities of the Trustee.
As provided in the Pooling Agreement and subject to certain limitations set
forth therein, this Certificate is transferable or exchangeable only upon
surrender of this Certificate to the Certificate Registrar at the Corporate
Trust Office together with an assignment and transfer (executed by the Holder or
his duly authorized attorney), subject to the applicable requirements in Article
V of the Pooling Agreement. Upon surrender for registration of transfer of this
Certificate, subject to the applicable requirements of Article V of the Pooling
Agreement, the Trustee shall execute and the Authenticating Agent shall duly
authenticate in the name of the designated transferee or transferees, one or
more new Certificates in Denominations of a like aggregate Denomination of this
Certificate. Such Certificates shall be delivered by the Certificate Registrar
in accordance with Section 5.02(e) of the Pooling Agreement.
Prior to due presentation of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar, any Paying Agent and any agent of any of them may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and none of the Depositor, the Master Servicer, the Special
Servicer, the Trustee, the Certificate Registrar, any Paying Agent or any agent
of any of them shall be affected by any notice or knowledge to the contrary.
No fee or service shall be imposed by the Certificate Registrar for its
services in respect of any registration of transfer or exchange referred to in
Section 5.02 of the Pooling Agreement. The Certificate Registrar may require
payment by each transferor of a sum sufficient to cover any tax, expense or
other governmental charge payable in connection with any such transfer.
The Pooling Agreement or any Custodial Agreement may be amended from time
to time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee, without the consent of any of the Certificateholders; (i) to cure any
ambiguity; (ii) to correct or supplement any provisions in the Pooling Agreement
or any Custodial Agreement that may be defective or inconsistent with any other
provisions in such agreement; (iii) to amend any provision thereof to the extent
necessary or desirable to maintain the status of each of the Upper-Tier REMIC,
and Lower-Tier REMIC as a REMIC, or to prevent the imposition of any material
state or local taxes; (iv) to amend or supplement any provisions in either of
such agreements to the extent necessary or desirable to maintain the rating or
ratings assigned to each of the Classes of Certificates by each Rating Agency;
(v) to amend or supplement any provisions in either of such agreements that
shall not adversely affect in any material respect the interests of any
Certificateholder not consenting thereto, as evidenced in writing by an Opinion
of Counsel, at the expense of the party requesting such amendment, or as
evidenced by confirmation in writing from each Rating Agency that such amendment
or supplement will not result in a qualification, withdrawal or downgrading of
the then-current ratings assigned to the Certificates, or (vi) to make any other
provisions with respect to matters or questions arising under the Pooling
Agreement, which shall not be inconsistent with the provisions of the Pooling
Agreement and will not result in a downgrade, qualification or withdrawal of the
then current rating or ratings then assigned to any outstanding Class of
Certificates, as confirmed by each Rating Agency in writing.
Further, the Depositor, the Master Servicer, the Special Servicer and the
Trustee, at any time and from time to time, without the consent of the
Certificateholders, may amend the Pooling Agreement to modify, eliminate or add
to any of its provisions to such extent as shall be necessary to maintain the
qualification of the Trust REMIC as two separate REMICs or of the Grantor Trust
as a grantor trust, or to prevent the imposition of any additional material
state or local taxes, at all times that any Certificates are outstanding;
provided, however, that such action, as evidenced by an Opinion of Counsel
(obtained at the expense of the Trust Fund), is necessary or helpful to maintain
such qualification or to prevent the imposition of any such taxes, and would not
adversely affect in any material respect the interest of any Certificateholder.
The Pooling Agreement or any Custodial Agreement may also be amended from
time to time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee with the consent of the Holders of Certificates evidencing not less than
66-2/3% of the Percentage Interests of each Class of Certificates affected by
the amendment for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Pooling Agreement or any
Custodial Agreement or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such amendment shall:
(i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be
distributed on any Certificate without the consent of all the
Holders of all Certificates representing all Percentage
Interests of the Class or Classes affected thereby;
(ii) change the percentages of Voting Rights of Holders of
Certificates which are required to consent to any action or
inaction under the Pooling Agreement, without the consent of all
the Holders of all Certificates representing all Percentage
Interests of the Class or Classes affected thereby;
(iii) alter the Servicing Standard or the obligations of the Master
Servicer, the Special Servicer or the Trustee to make a P&I
Advance or Property Advance without the consent of the Holders
of all Certificates representing all of the Percentage Interests
of the Class or Classes affected thereby; or
(iv) amend any section of the Pooling Agreement which relates to the
amendment thereof, without the consent of all the Holders of all
Certificates representing all Percentage Interests of the Class
or Classes affected thereby.
The Depositor may effect an early termination of the Trust Fund, upon not
less than 30 days' prior notice given to the Trustee and Master Servicer any
time on or after the Early Termination Notice Date (defined as any date as of
which the aggregate Stated Principal Balance of the Mortgage Loans is less than
1.0% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
Cut-Off Date) specifying the Anticipated Termination Date, by purchasing on such
date all, but not less than all, of the Mortgage Loans then included in the
Trust Fund, and all property acquired in respect of any Mortgage Loan, at a
purchase price, payable in cash, equal to not less than the greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of each Mortgage Loan,
included in the Trust Fund as of the last day of the month
preceding such Distribution Date;
(B) the fair market value of all other property included in the Trust
Fund as of the last day of the month preceding such Distribution
Date, as determined by an Independent appraiser acceptable to the
Master Servicer as of the date not more than 30 days prior to the
last day of the month preceding such Distribution Date;
(C) all unpaid interest accrued on such principal balance of each
such Mortgage Loan (including for this purpose any Mortgage Loan
as to which title to the related Mortgaged Property has been
acquired) at the Mortgage Rate (plus the Excess Rate, to the
extent applicable) to the last day of the Interest Accrual Period
preceding such Distribution Date;
(D) the aggregate amount of unreimbursed Property Advances, and
unpaid Servicing Fees, Special Servicing Compensation, Trustee
Fees and Trust Fund expenses, in each case to the extent
permitted under the Pooling Agreement with interest on all
unreimbursed Advances at the Advance Rate; and
(ii) the aggregate fair market value of the Mortgage Loans, and all other
property acquired in respect of any Mortgage Loan in the Trust Fund,
on the last day of the month preceding such Distribution Date, as
determined by an Independent appraiser acceptable to the Master
Servicer as of a date not more than 30 days prior to the last day of
the month preceding such Distribution Date, together with one month's
interest thereon at the related Mortgage Rates.
The Master Servicer or, if the Master Servicer does not, any Holder of a
Class LR Certificate representing greater than a 50% Percentage Interest in such
Class, may also effect such termination as provided above if it first notifies
the Depositor, or the Depositor and the Master Servicer, respectively, through
the Trustee of its intention to do so in writing at least 30 days prior to the
Early Termination Notice Date and neither the Depositor nor the Master Servicer
as the case may be, terminates the Trust Fund as described above within such
30-day period. All costs and expenses incurred by any and all parties to this
Agreement or by the Trust Fund in connection with the purchase of the Mortgage
Loans and other assets of the Trust Fund pursuant to Section 9.01(c) of the
Pooling Agreement shall be borne by the party exercising its purchase rights
hereunder. The Trustee shall be entitled to rely conclusively on any
determination made by an Independent appraiser pursuant to Section 9.01(c) of
the Pooling Agreement.
The respective obligations and responsibilities of the Master Servicer, the
Special Servicer, the Depositor and the Trustee created by the Pooling Agreement
with respect to the Certificates (other than the obligation to make certain
payments and to send certain notices to Certificateholders as set forth in the
Pooling Agreement) shall terminate immediately following the occurrence of the
last action required to be taken by the Trustee pursuant to Article IX of the
Pooling Agreement on the Termination Date; provided, however, that in no event
shall the trust created thereby continue beyond the expiration of twenty-one
years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late ambassador of the United States to the United Kingdom, living
on the date of the Pooling Agreement.
Unless the Certificate of Authentication on this Certificate has been
executed by the Trustee or on its behalf by the Authenticating Agent, by manual
signature, this Certificate shall not be entitled to any benefit under the
Pooling Agreement or be valid for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Class D Certificate to be
duly executed.
Dated: October ___, 1998
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Trustee
By:__________________________________________
Authorized Officer
Certificate of Authentication
-----------------------------
This is one of the Class D Certificates referred to in the Pooling
Agreement.
Dated: October ___, 1998
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Authenticating Agent
By:__________________________________________
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned ("Assignor(s)") hereby sell(s),
assign(s) and transfer(s) unto _________________________________________
_______________________________________________________________________ (please
print or typewrite name(s) and address(es), including postal zip code(s) of
assignee(s)) ("Assignee(s)") the entire Percentage Interest represented by the
within Class D Certificate and hereby authorize(s) the registration of transfer
of such interest to Assignee(s) on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Class D
Certificate of the entire Percentage Interest represented by the within Class D
Certificates to the above-named Assignee(s) and to deliver such Class D
Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Date: _________________ ______________________________________________
Signature by or on behalf of
Assignor(s)
----------------------------------------------
Taxpayer Identification Number
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee(s) should include the following for purposes of
distribution:____________________________________
Address of the Assignee(s) for the purpose of receiving notices and
distributions:____________________________
Distributions, if being made by wire transfer in immediately available
funds to ___________________________ for the account of
_____________________________ account number __________________________.
This information is provided by __________________________ the Assignee(s)
named above, or ________________________________________________ as its (their)
agent.
By: ____________________________________________
--------------------------------------------
[Please print or type name(s)]
--------------------------------------------
Title:
--------------------------------------------
Taxpayer Identification Number
<PAGE>
EXHIBIT A-7
Morgan Stanley Capital I Inc.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-XL2, CLASS E
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE CERTIFICATE
REGISTRAR FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE
DEPOSITOR, THE MASTER SERVICER, THE TRUSTEE, THE UNDERWRITER OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THE CERTIFICATES NOR THE UNDERLYING MORTGAGE
LOANS ARE INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
PRINCIPAL PAYMENTS ON THIS CERTIFICATE ARE PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL AMOUNT OF THIS
CERTIFICATE AT ANY TIME MAY BE LESS THAN THE INITIAL CERTIFICATE PRINCIPAL
AMOUNT SET FORTH BELOW.
THIS CLASS E CERTIFICATE IS SUBORDINATE TO CERTAIN OTHER CLASSES OF CERTIFICATES
TO THE EXTENT SET FORTH IN THE POOLING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE OR ANY INTEREST HEREIN SHOULD NOT BE PURCHASED BY A TRANSFEREE
THAT IS (A) AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, INCLUDING
AN INDIVIDUAL RETIREMENT ACCOUNT OR A KEOGH PLAN, WHICH IS SUBJECT TO TITLE I OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A
GOVERNMENTAL PLAN (AS DEFINED IN SECTION 3(32) OF ERISA) THAT IS SUBJECT TO ANY
FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") WHICH IS, TO A MATERIAL EXTENT,
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE (EACH, A "PLAN"), OR
(B) A COLLECTIVE INVESTMENT FUND IN WHICH SUCH PLANS ARE INVESTED, AN INSURANCE
COMPANY USING ASSETS OF SEPARATE ACCOUNTS OR GENERAL ACCOUNTS WHICH INCLUDE
ASSETS OF PLANS (OR WHICH ARE DEEMED PURSUANT TO ERISA OR SIMILAR LAW TO INCLUDE
ASSETS OF PLANS) OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR USING THE
ASSETS OF ANY SUCH PLAN, OTHER THAN AN INSURANCE COMPANY USING THE ASSETS OF ITS
GENERAL ACCOUNT UNDER CIRCUMSTANCES WHEREBY SUCH PURCHASE AND THE SUBSEQUENT
HOLDING OF SUCH CERTIFICATE BY SUCH INSURANCE COMPANY WOULD BE EXEMPT FROM THE
PROHIBITED TRANSACTION PROVISIONS OF ERISA AND SECTION 4975 OF THE CODE UNDER
PROHIBITED TRANSACTION CLASS EXEMPTION 95-60. EACH PROSPECTIVE TRANSFEREE OF
THIS CERTIFICATE WILL BE REQUIRED TO DELIVER TO THE DEPOSITOR, THE CERTIFICATE
REGISTRAR AND THE TRUSTEE, (I) A REPRESENTATION LETTER, SUBSTANTIALLY IN THE
FORM OF EXHIBIT D-2 TO THE POOLING AGREEMENT REFERRED TO HEREIN, STATING THAT
SUCH PROSPECTIVE TRANSFEREE IS NOT A PERSON REFERRED TO IN CLAUSE (A) OR (B)
ABOVE, OR (II) AN OPINION OF COUNSEL WHICH ESTABLISHES TO THE SATISFACTION OF
THE DEPOSITOR, THE CERTIFICATE REGISTRAR AND THE TRUSTEE THAT THE PURCHASE AND
HOLDING OF THIS CERTIFICATE WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND
BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO TITLE I OF ERISA, SECTION 4975
OF THE CODE OR SIMILAR LAW, WILL NOT CONSTITUTE OR RESULT IN A PROHIBITED
TRANSACTION WITHIN THE MEANING OF ERISA OR SECTION 4975 OF THE CODE OR A
MATERIALLY SIMILAR CHARACTERIZATION UNDER SIMILAR LAW, AND WILL NOT SUBJECT THE
MASTER SERVICER, THE SPECIAL SERVICER, THE DEPOSITOR, THE TRUSTEE OR THE
CERTIFICATE REGISTRAR TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR
LIABILITIES UNDER ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW) IN ADDITION TO
THOSE SET FORTH IN THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE
AN EXPENSE OF THE TRUSTEE, THE TRUST FUND, THE MASTER SERVICER, THE SPECIAL
SERVICER, THE CERTIFICATE REGISTRAR OR THE DEPOSITOR. EACH TRANSFEREE OF A
BENEFICIAL INTEREST HEREIN SHALL BE DEEMED TO REPRESENT THAT IT IS NOT A PERSON
REFERRED TO IN CLAUSE (A) OR (B) ABOVE.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A PRO RATA
UNDIVIDED BENEFICIAL INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G(a)(1) AND 860D OF THE CODE, AND CERTAIN OTHER ASSETS.
<PAGE>
Morgan Stanley Capital I Inc.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-XL2, CLASS E
Pass-Through Rate: As determined in accordance with the
Pooling Agreement.
<TABLE>
<CAPTION>
<S> <C>
First Distribution Date: Cut-Off Date: October 1, 1998
November 4, 1998
Aggregate Initial Scheduled Final
Certificate Principal Amount of the Distribution Date: October 3, 2034
Class E Certificates:
CUSIP: Initial Certificate Principal
Amount of this Certificate:
ISIN: $
</TABLE>
Common Code:
No.:
This certifies that CEDE & CO. is the registered owner of a beneficial
ownership interest in a Trust Fund, including the distributions to be made with
respect to the Class E Certificates. The Trust Fund, described more fully below,
consists primarily of a pool of Mortgage Loans secured by first liens on
commercial properties and held in trust by the Trustee and serviced by the
Master Servicer. The Trust Fund was created, and the Mortgage Loans are to be
serviced, pursuant to the Pooling Agreement (as defined below). The Holder of
this Certificate, by virtue of the acceptance hereof, assents to the terms,
provisions and conditions of the Pooling Agreement and is bound thereby. Also
issued under the Pooling Agreement are the Class A-1, Class A-2, Class X, Class
B, Class C, Class D, Class F, Class Q, Class R, and Class LR Certificates
(together with the Class E Certificates, the "Certificates"; the Holders of
Certificates issued under the Pooling Agreement are collectively referred to
herein as "Certificateholders").
This Certificate is issued pursuant to, and in accordance with, the terms
of a Pooling and Servicing Agreement, dated as of October 1, 1998 (the "Pooling
Agreement"), by and among Morgan Stanley Capital I Inc., as Depositor, Midland
Loan Services, Inc., as Master Servicer, Midland Loan Services, Inc., as Special
Servicer and Norwest Bank Minnesota, National Association, as Trustee. To the
extent not defined herein, capitalized terms used herein shall have the meanings
assigned thereto in the Pooling Agreement.
This Certificate represents a pro rata undivided beneficial interest in a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined, respectively, in Sections 860G(a)(1) and 860D of the Internal
Revenue Code of l986, as amended, and certain other assets.
The Trustee makes no representation or warranty as to any of the statements
contained herein or the validity or sufficiency of the Certificates or the
Mortgage Loans and has executed this Certificate in its limited capacity as
Trustee under the Pooling Agreement.
Pursuant to the terms of the Pooling Agreement, the Trustee, or the Paying
Agent on behalf of the Trustee, will distribute (other than the final
distribution on any Certificate), on the third Business Day of each month,
commencing in November 1998 (each such date, a "Distribution Date"), to the
Person in whose name this Certificate is registered as of the related Record
Date, an amount equal to such Person's pro rata share (based on the Percentage
Interest represented by this Certificate) of that portion of the aggregate
amount of principal and interest then distributable, if any, allocable to the
Class E Certificates for such Distribution Date, all as more fully described in
the Pooling Agreement. Holders of this Certificate may be entitled to Prepayment
Premiums, as provided in the Pooling Agreement.
Interest accrued on this Certificate during an Interest Accrual Period,
plus the aggregate unpaid Interest Shortfall with respect to this Certificate,
if any, will be payable on the related Distribution Date to the extent provided
in the Pooling Agreement. The "Interest Accrual Period" with respect to any
Distribution Date and with respect to each Class of Certificates is the calendar
month preceding the month in which such Distribution Date occurs. Each Interest
Accrual Period with respect to each Class of Certificates is assumed to consist
of 30 days.
All distributions (other than the final distribution on any Certificate)
will be made by the Paying Agent to the persons in whose names the Certificates
are registered at the close of business on each Record Date, which will be the
close of business on the last day of the month immediately preceding the month
in which such Distribution Date occurs, or if such day is not a Business Day,
the immediately preceding Business Day. Such distributions shall be made on each
Distribution Date other than the Termination Date to each Certificateholder of
record on the related Record Date (a) by wire transfer of immediately available
funds to the account of such Certificateholder at a bank or other entity located
in the United States and having appropriate facilities therefor, if such
Certificateholder provides the Trustee with wiring instructions no less than
five Business Days prior to the related Record Date, or otherwise (b) by check
mailed to such Certificateholder. The final distribution on each Certificate
shall be made in like manner, but only upon presentment and surrender of such
Certificate at the office of the Trustee or its agent (which may be the Paying
Agent or the Certificate Registrar acting as such agent) that is specified in
the notice to Certificateholders of such final distribution.
Any funds not distributed on the Termination Date because of the failure of
any Certificateholders to tender their Certificates shall be set aside and held
in trust for the account of the appropriate non-tendering Certificateholders,
whereupon the Trust Fund shall terminate. If any Certificates as to which notice
of the Termination Date has been given pursuant to Section 9.01 of the Pooling
Agreement shall not have been surrendered for cancellation within six months
after the time specified in such notice, the Trustee shall mail a second notice
to the remaining Certificateholders, at their last addresses shown in the
Certificate Register, to surrender their Certificates for cancellation in order
to receive, from such funds held, the final distribution with respect thereto.
If within one year after the second notice any Certificate shall not have been
surrendered for cancellation, the Trustee may, directly or through an agent,
take appropriate steps to contact the remaining Certificateholders concerning
surrender of their Certificates. The costs and expenses of maintaining such
funds and of contacting Certificateholders shall be paid out of the assets which
remain held. If within two years after the second notice any Certificates shall
not have been surrendered for cancellation, the Paying Agent shall pay to the
Class R Certificateholders all amounts distributable to the Holders thereof. No
interest shall accrue or be payable to any Certificateholder on any amount held
as a result of such Certificateholder's failure to surrender its Certificate(s)
for final payment thereof in accordance with Section 9.01 of the Pooling
Agreement.
This Certificate is limited in right of payment to, among other things,
certain collections and recoveries in respect of the Mortgage Loans, as more
specifically set forth herein and in the Pooling Agreement.
As provided in the Pooling Agreement, the Trust Fund includes (i) such
Mortgage Loans as from time to time are subject to the Pooling Agreement,
together with the Mortgage Files relating thereto; (ii) all scheduled or
unscheduled payments on or collections in respect of the Mortgage Loans due
after the Cut-Off Date; (iii) any REO Property; (iv) all revenues received in
respect of any REO Property; (v) the Master Servicer's, the Special Servicer's
and the Trustee's rights under the insurance policies with respect to the
Mortgage Loans required to be maintained pursuant to the Pooling Agreement and
any proceeds thereof; (vi) any Assignments of Leases, Rents and Profits and any
security agreements; (vii) any indemnities or guaranties given as additional
security for any Mortgage Loans; (viii) the Trustee's rights in all assets
deposited in the Lock-Box Accounts, Cash Collateral Accounts, Escrow Accounts,
Interest Reserve Accounts, Reserve Accounts (to the extent such assets in such
accounts are not assets of the respective Borrowers), (ix) the Collection
Account, the Lower-Tier Distribution Account, the Upper-Tier Distribution
Account, the Deferred Interest Distribution Account, the Class Q Distribution
Account, and any REO Account including reinvestment income thereon; (x) any
environmental indemnity agreements relating to the Mortgaged Properties; (xi)
the rights and remedies under the Loan Sale Agreement; and (xii) the proceeds of
any of the foregoing.
This Certificate does not purport to summarize the Pooling Agreement, and
reference is made to the Pooling Agreement for the interests, rights, benefits,
obligations and duties evidenced hereby, and the limitations thereon, and the
rights, duties and immunities of the Trustee.
As provided in the Pooling Agreement and subject to certain limitations set
forth therein, this Certificate is transferable or exchangeable only upon
surrender of this Certificate to the Certificate Registrar at the Corporate
Trust Office together with an assignment and transfer (executed by the Holder or
his duly authorized attorney), subject to the applicable requirements in Article
V of the Pooling Agreement. Upon surrender for registration of transfer of this
Certificate, subject to the applicable requirements of Article V of the Pooling
Agreement, the Trustee shall execute and the Authenticating Agent shall duly
authenticate in the name of the designated transferee or transferees, one or
more new Certificates in Denominations of a like aggregate Denomination of this
Certificate. Such Certificates shall be delivered by the Certificate Registrar
in accordance with Section 5.02(e) of the Pooling Agreement.
Prior to due presentation of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar, any Paying Agent and any agent of any of them may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and none of the Depositor, the Master Servicer, the Special
Servicer, the Trustee, the Certificate Registrar, any Paying Agent or any agent
of any of them shall be affected by any notice or knowledge to the contrary.
No fee or service shall be imposed by the Certificate Registrar for its
services in respect of any registration of transfer or exchange referred to in
Section 5.02 of the Pooling Agreement. The Certificate Registrar may require
payment by each transferor of a sum sufficient to cover any tax, expense or
other governmental charge payable in connection with any such transfer.
The Pooling Agreement or any Custodial Agreement may be amended from time
to time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee, without the consent of any of the Certificateholders; (i) to cure any
ambiguity; (ii) to correct or supplement any provisions in the Pooling Agreement
or any Custodial Agreement that may be defective or inconsistent with any other
provisions in such agreement; (iii) to amend any provision thereof to the extent
necessary or desirable to maintain the status of each of the Upper-Tier REMIC,
and Lower-Tier REMIC as a REMIC, or to prevent the imposition of any material
state or local taxes; (iv) to amend or supplement any provisions in either of
such agreements to the extent necessary or desirable to maintain the rating or
ratings assigned to each of the Classes of Certificates by each Rating Agency;
(v) to amend or supplement any provisions in either of such agreements that
shall not adversely affect in any material respect the interests of any
Certificateholder not consenting thereto, as evidenced in writing by an Opinion
of Counsel, at the expense of the party requesting such amendment, or as
evidenced by confirmation in writing from each Rating Agency that such amendment
or supplement will not result in a qualification, withdrawal or downgrading of
the then-current ratings assigned to the Certificates, or (vi) to make any other
provisions with respect to matters or questions arising under the Pooling
Agreement, which shall not be inconsistent with the provisions of the Pooling
Agreement and will not result in a downgrade, qualification or withdrawal of the
then current rating or ratings then assigned to any outstanding Class of
Certificates, as confirmed by each Rating Agency in writing.
Further, the Depositor, the Master Servicer, the Special Servicer and the
Trustee, at any time and from time to time, without the consent of the
Certificateholders, may amend the Pooling Agreement to modify, eliminate or add
to any of its provisions to such extent as shall be necessary to maintain the
qualification of the Trust REMIC as two separate REMICs or of the Grantor Trust
as a grantor trust, or to prevent the imposition of any additional material
state or local taxes, at all times that any Certificates are outstanding;
provided, however, that such action, as evidenced by an Opinion of Counsel
(obtained at the expense of the Trust Fund), is necessary or helpful to maintain
such qualification or to prevent the imposition of any such taxes, and would not
adversely affect in any material respect the interest of any Certificateholder.
The Pooling Agreement or any Custodial Agreement may also be amended from
time to time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee with the consent of the Holders of Certificates evidencing not less than
66-2/3% of the Percentage Interests of each Class of Certificates affected by
the amendment for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Pooling Agreement or any
Custodial Agreement or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such amendment shall:
(i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be
distributed on any Certificate without the consent of all the
Holders of all Certificates representing all Percentage
Interests of the Class or Classes affected thereby;
(ii) change the percentages of Voting Rights of Holders of
Certificates which are required to consent to any action or
inaction under the Pooling Agreement, without the consent of all
the Holders of all Certificates representing all Percentage
Interests of the Class or Classes affected thereby;
(iii) alter the Servicing Standard or the obligations of the Master
Servicer, the Special Servicer or the Trustee to make a P&I
Advance or Property Advance without the consent of the Holders
of all Certificates representing all of the Percentage Interests
of the Class or Classes affected thereby; or
(iv) amend any section of the Pooling Agreement which relates to the
amendment thereof, without the consent of all the Holders of all
Certificates representing all Percentage Interests of the Class
or Classes affected thereby.
The Depositor may effect an early termination of the Trust Fund, upon not
less than 30 days' prior notice given to the Trustee and Master Servicer any
time on or after the Early Termination Notice Date (defined as any date as of
which the aggregate Stated Principal Balance of the Mortgage Loans is less than
1.0% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
Cut-Off Date) specifying the Anticipated Termination Date, by purchasing on such
date all, but not less than all, of the Mortgage Loans then included in the
Trust Fund, and all property acquired in respect of any Mortgage Loan, at a
purchase price, payable in cash, equal to not less than the greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of each Mortgage Loan,
included in the Trust Fund as of the last day of the month
preceding such Distribution Date;
(B) the fair market value of all other property included in the Trust
Fund as of the last day of the month preceding such Distribution
Date, as determined by an Independent appraiser acceptable to the
Master Servicer as of the date not more than 30 days prior to the
last day of the month preceding such Distribution Date;
(C) all unpaid interest accrued on such principal balance of each
such Mortgage Loan (including for this purpose any Mortgage Loan
as to which title to the related Mortgaged Property has been
acquired) at the Mortgage Rate (plus the Excess Rate, to the
extent applicable) to the last day of the Interest Accrual Period
preceding such Distribution Date;
(D) the aggregate amount of unreimbursed Property Advances, and
unpaid Servicing Fees, Special Servicing Compensation, Trustee
Fees and Trust Fund expenses, in each case to the extent
permitted under the Pooling Agreement with interest on all
unreimbursed Advances at the Advance Rate; and
(ii) the aggregate fair market value of the Mortgage Loans, and all other
property acquired in respect of any Mortgage Loan in the Trust Fund,
on the last day of the month preceding such Distribution Date, as
determined by an Independent appraiser acceptable to the Master
Servicer as of a date not more than 30 days prior to the last day of
the month preceding such Distribution Date, together with one month's
interest thereon at the related Mortgage Rates.
The Master Servicer or, if the Master Servicer does not, any Holder of a
Class LR Certificate representing greater than a 50% Percentage Interest in such
Class, may also effect such termination as provided above if it first notifies
the Depositor, or the Depositor and the Master Servicer, respectively, through
the Trustee of its intention to do so in writing at least 30 days prior to the
Early Termination Notice Date and neither the Depositor nor the Master Servicer
as the case may be, terminates the Trust Fund as described above within such
30-day period. All costs and expenses incurred by any and all parties to this
Agreement or by the Trust Fund in connection with the purchase of the Mortgage
Loans and other assets of the Trust Fund pursuant to Section 9.01(c) of the
Pooling Agreement shall be borne by the party exercising its purchase rights
hereunder. The Trustee shall be entitled to rely conclusively on any
determination made by an Independent appraiser pursuant to Section 9.01(c) of
the Pooling Agreement.
The respective obligations and responsibilities of the Master Servicer, the
Special Servicer, the Depositor and the Trustee created by the Pooling Agreement
with respect to the Certificates (other than the obligation to make certain
payments and to send certain notices to Certificateholders as set forth in the
Pooling Agreement) shall terminate immediately following the occurrence of the
last action required to be taken by the Trustee pursuant to Article IX of the
Pooling Agreement on the Termination Date; provided, however, that in no event
shall the trust created thereby continue beyond the expiration of twenty-one
years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late ambassador of the United States to the United Kingdom, living
on the date of the Pooling Agreement.
Unless the Certificate of Authentication on this Certificate has been
executed by the Trustee or on its behalf by the Authenticating Agent, by manual
signature, this Certificate shall not be entitled to any benefit under the
Pooling Agreement or be valid for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Class E Certificate to be
duly executed.
Dated: October ___, 1998
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Trustee
By:__________________________________________
Authorized Officer
Certificate of Authentication
-----------------------------
This is one of the Class E Certificates referred to in the Pooling
Agreement.
Dated: October ___, 1998
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Authenticating Agent
By:__________________________________________
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned ("Assignor(s)") hereby sell(s),
assign(s) and transfer(s) unto _________________________________________
_______________________________________________________________________ (please
print or typewrite name(s) and address(es), including postal zip code(s) of
assignee(s)) ("Assignee(s)") the entire Percentage Interest represented by the
within Class E Certificate and hereby authorize(s) the registration of transfer
of such interest to Assignee(s) on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Class E
Certificate of the entire Percentage Interest represented by the within Class E
Certificates to the above-named Assignee(s) and to deliver such Class E
Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Date: _________________ _____________________________________________
Signature by or on behalf of
Assignor(s)
---------------------------------------------
Taxpayer Identification Number
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee(s) should include the following for purposes of
distribution:____________________________________
Address of the Assignee(s) for the purpose of receiving notices and
distributions:____________________________
Distributions, if being made by wire transfer in immediately available
funds to ___________________________ for the account of
_____________________________ account number __________________________.
This information is provided by __________________________ the Assignee(s)
named above, or ________________________________________________ as its (their)
agent.
By: __________________________________________
------------------------------------------
[Please print or type name(s)]
------------------------------------------
Title:
------------------------------------------
Taxpayer Identification Number
<PAGE>
EXHIBIT A-8
Morgan Stanley Capital I Inc.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-XL2, CLASS F
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE CERTIFICATE
REGISTRAR FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE
DEPOSITOR, THE MASTER SERVICER, THE TRUSTEE, THE UNDERWRITER OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THE CERTIFICATES NOR THE UNDERLYING MORTGAGE
LOANS ARE INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
PRINCIPAL PAYMENTS ON THIS CERTIFICATE ARE PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL AMOUNT OF THIS
CERTIFICATE AT ANY TIME MAY BE LESS THAN THE INITIAL CERTIFICATE PRINCIPAL
AMOUNT SET FORTH BELOW.
THIS CLASS F CERTIFICATE IS SUBORDINATE TO CERTAIN OTHER CLASSES OF CERTIFICATES
TO THE EXTENT SET FORTH IN THE POOLING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW. THE
HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY
BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A)(1) PURSUANT TO
RULE 144A UNDER THE SECURITIES ACT TO AN INSTITUTIONAL INVESTOR THAT THE HOLDER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER, WITHIN THE MEANING OF
RULE 144A (A "QIB"), WHOM THE HOLDER HAS INFORMED THAT THE REOFFER, RESALE,
PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2) TO AN
INSTITUTIONAL INVESTOR THAT IS, OR ALL THE EQUITY OWNERS OF WHICH ARE,
INSTITUTIONAL "ACCREDITED INVESTORS" AS SUCH TERM IS DEFINED IN RULE
501(A)(1),(2),(3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT PURSUANT TO AN
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 (IF AVAILABLE) OR (3) BY AN
INITIAL INVESTOR THAT IS A QIB, TO AN INSTITUTIONAL ACCREDITED INVESTOR AND (B)
IN ACCORDANCE WITH ANY OTHER APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES.
THIS CERTIFICATE OR ANY INTEREST HEREIN SHOULD NOT BE PURCHASED BY A TRANSFEREE
THAT IS (A) AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, INCLUDING
AN INDIVIDUAL RETIREMENT ACCOUNT OR A KEOGH PLAN, WHICH IS SUBJECT TO TITLE I OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A
GOVERNMENTAL PLAN (AS DEFINED IN SECTION 3(32) OF ERISA) THAT IS SUBJECT TO ANY
FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") WHICH IS, TO A MATERIAL EXTENT,
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE (EACH, A "PLAN"), OR
(B) A COLLECTIVE INVESTMENT FUND IN WHICH SUCH PLANS ARE INVESTED, AN INSURANCE
COMPANY USING ASSETS OF SEPARATE ACCOUNTS OR GENERAL ACCOUNTS WHICH INCLUDE
ASSETS OF PLANS (OR WHICH ARE DEEMED PURSUANT TO ERISA OR SIMILAR LAW TO INCLUDE
ASSETS OF PLANS) OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR USING THE
ASSETS OF ANY SUCH PLAN, OTHER THAN AN INSURANCE COMPANY USING THE ASSETS OF ITS
GENERAL ACCOUNT UNDER CIRCUMSTANCES WHEREBY SUCH PURCHASE AND THE SUBSEQUENT
HOLDING OF SUCH CERTIFICATE BY SUCH INSURANCE COMPANY WOULD BE EXEMPT FROM THE
PROHIBITED TRANSACTION PROVISIONS OF ERISA AND SECTION 4975 OF THE CODE UNDER
PROHIBITED TRANSACTION CLASS EXEMPTION 95-60. EACH PROSPECTIVE TRANSFEREE OF
THIS CERTIFICATE WILL BE REQUIRED TO DELIVER TO THE DEPOSITOR, THE CERTIFICATE
REGISTRAR AND THE TRUSTEE, (I) A REPRESENTATION LETTER, SUBSTANTIALLY IN THE
FORM OF EXHIBIT D-2 TO THE POOLING AGREEMENT REFERRED TO HEREIN, STATING THAT
SUCH PROSPECTIVE TRANSFEREE IS NOT A PERSON REFERRED TO IN CLAUSE (A) OR (B)
ABOVE, OR (II) AN OPINION OF COUNSEL WHICH ESTABLISHES TO THE SATISFACTION OF
THE DEPOSITOR, THE CERTIFICATE REGISTRAR AND THE TRUSTEE THAT THE PURCHASE AND
HOLDING OF THIS CERTIFICATE WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND
BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO TITLE I OF ERISA, SECTION 4975
OF THE CODE OR SIMILAR LAW, WILL NOT CONSTITUTE OR RESULT IN A PROHIBITED
TRANSACTION WITHIN THE MEANING OF ERISA OR SECTION 4975 OF THE CODE OR A
MATERIALLY SIMILAR CHARACTERIZATION UNDER SIMILAR LAW, AND WILL NOT SUBJECT THE
MASTER SERVICER, THE SPECIAL SERVICER, THE DEPOSITOR, THE TRUSTEE OR THE
CERTIFICATE REGISTRAR TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR
LIABILITIES UNDER ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW) IN ADDITION TO
THOSE SET FORTH IN THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE
AN EXPENSE OF THE TRUSTEE, THE TRUST FUND, THE MASTER SERVICER, THE SPECIAL
SERVICER, THE CERTIFICATE REGISTRAR OR THE DEPOSITOR. EACH TRANSFEREE OF A
BENEFICIAL INTEREST HEREIN SHALL BE DEEMED TO REPRESENT THAT IT IS NOT A PERSON
REFERRED TO IN CLAUSE (A) OR (B) ABOVE.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A PRO RATA
UNDIVIDED BENEFICIAL INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G(a)(1) AND 860D OF THE CODE, AND CERTAIN OTHER ASSETS.
<PAGE>
Morgan Stanley Capital I Inc.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-XL2, CLASS F
Pass-Through Rate: As determined in accordance with the
Pooling Agreement.
<TABLE>
<CAPTION>
<S> <C>
First Distribution Date: Cut-Off Date: October 1, 1998
November 4, 1998
Aggregate Initial Scheduled Final
Certificate Principal Amount of the Distribution Date: October 3, 2034
Class F Certificates:
CUSIP: Initial Certificate Principal
Amount of this Certificate:
ISIN: $
</TABLE>
Common Code:
No.:
This certifies that CEDE & CO. is the registered owner of a beneficial
ownership interest in a Trust Fund, including the distributions to be made with
respect to the Class F Certificates. The Trust Fund, described more fully below,
consists primarily of a pool of Mortgage Loans secured by first liens on
commercial properties and held in trust by the Trustee and serviced by the
Master Servicer. The Trust Fund was created, and the Mortgage Loans are to be
serviced, pursuant to the Pooling Agreement (as defined below). The Holder of
this Certificate, by virtue of the acceptance hereof, assents to the terms,
provisions and conditions of the Pooling Agreement and is bound thereby. Also
issued under the Pooling Agreement are the Class A-1, Class A-2, Class X, Class
B, Class C, Class D, Class E, Class Q, Class R, and Class LR Certificates
(together with the Class F Certificates, the "Certificates"; the Holders of
Certificates issued under the Pooling Agreement are collectively referred to
herein as "Certificateholders").
This Certificate is issued pursuant to, and in accordance with, the terms
of a Pooling and Servicing Agreement, dated as of October 1, 1998 (the "Pooling
Agreement"), by and among Morgan Stanley Capital I Inc., as Depositor, Midland
Loan Services, Inc., as Master Servicer, Midland Loan Services, Inc., as Special
Servicer and Norwest Bank Minnesota, National Association, as Trustee. To the
extent not defined herein, capitalized terms used herein shall have the meanings
assigned thereto in the Pooling Agreement.
This Certificate represents a pro rata undivided beneficial interest in a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined, respectively, in Sections 860G(a)(1) and 860D of the Internal
Revenue Code of l986, as amended, and certain other assets.
The Trustee makes no representation or warranty as to any of the statements
contained herein or the validity or sufficiency of the Certificates or the
Mortgage Loans and has executed this Certificate in its limited capacity as
Trustee under the Pooling Agreement.
Pursuant to the terms of the Pooling Agreement, the Trustee, or the Paying
Agent on behalf of the Trustee, will distribute (other than the final
distribution on any Certificate), on the third Business Day of each month,
commencing in November 1998 (each such date, a "Distribution Date"), to the
Person in whose name this Certificate is registered as of the related Record
Date, an amount equal to such Person's pro rata share (based on the Percentage
Interest represented by this Certificate) of that portion of the aggregate
amount of principal and interest then distributable, if any, allocable to the
Class F Certificates for such Distribution Date, all as more fully described in
the Pooling Agreement.
Interest accrued on this Certificate during an Interest Accrual Period,
plus the aggregate unpaid Interest Shortfall with respect to this Certificate,
if any, will be payable on the related Distribution Date to the extent provided
in the Pooling Agreement. The "Interest Accrual Period" with respect to any
Distribution Date and with respect to each Class of Certificates is the calendar
month preceding the month in which such Distribution Date occurs. Each Interest
Accrual Period with respect to each Class of Certificates is assumed to consist
of 30 days.
All distributions (other than the final distribution on any Certificate)
will be made by the Paying Agent to the persons in whose names the Certificates
are registered at the close of business on each Record Date, which will be the
close of business on the last day of the month immediately preceding the month
in which such Distribution Date occurs, or if such day is not a Business Day,
the immediately preceding Business Day. Such distributions shall be made on each
Distribution Date other than the Termination Date to each Certificateholder of
record on the related Record Date (a) by wire transfer of immediately available
funds to the account of such Certificateholder at a bank or other entity located
in the United States and having appropriate facilities therefor, if such
Certificateholder provides the Trustee with wiring instructions no less than
five Business Days prior to the related Record Date, or otherwise (b) by check
mailed to such Certificateholder. The final distribution on each Certificate
shall be made in like manner, but only upon presentment and surrender of such
Certificate at the office of the Trustee or its agent (which may be the Paying
Agent or the Certificate Registrar acting as such agent) that is specified in
the notice to Certificateholders of such final distribution.
Any funds not distributed on the Termination Date because of the failure of
any Certificateholders to tender their Certificates shall be set aside and held
in trust for the account of the appropriate non-tendering Certificateholders,
whereupon the Trust Fund shall terminate. If any Certificates as to which notice
of the Termination Date has been given pursuant to Section 9.01 of the Pooling
Agreement shall not have been surrendered for cancellation within six months
after the time specified in such notice, the Trustee shall mail a second notice
to the remaining Certificateholders, at their last addresses shown in the
Certificate Register, to surrender their Certificates for cancellation in order
to receive, from such funds held, the final distribution with respect thereto.
If within one year after the second notice any Certificate shall not have been
surrendered for cancellation, the Trustee may, directly or through an agent,
take appropriate steps to contact the remaining Certificateholders concerning
surrender of their Certificates. The costs and expenses of maintaining such
funds and of contacting Certificateholders shall be paid out of the assets which
remain held. If within two years after the second notice any Certificates shall
not have been surrendered for cancellation, the Paying Agent shall pay to the
Class R Certificateholders all amounts distributable to the Holders thereof. No
interest shall accrue or be payable to any Certificateholder on any amount held
as a result of such Certificateholder's failure to surrender its Certificate(s)
for final payment thereof in accordance with Section 9.01 of the Pooling
Agreement.
This Certificate is limited in right of payment to, among other things,
certain collections and recoveries in respect of the Mortgage Loans, as more
specifically set forth herein and in the Pooling Agreement.
As provided in the Pooling Agreement, the Trust Fund includes (i) such
Mortgage Loans as from time to time are subject to the Pooling Agreement,
together with the Mortgage Files relating thereto; (ii) all scheduled or
unscheduled payments on or collections in respect of the Mortgage Loans due
after the Cut-Off Date; (iii) any REO Property; (iv) all revenues received in
respect of any REO Property; (v) the Master Servicer's, the Special Servicer's
and the Trustee's rights under the insurance policies with respect to the
Mortgage Loans required to be maintained pursuant to the Pooling Agreement and
any proceeds thereof; (vi) any Assignments of Leases, Rents and Profits and any
security agreements; (vii) any indemnities or guaranties given as additional
security for any Mortgage Loans; (viii) the Trustee's rights in all assets
deposited in the Lock-Box Accounts, Cash Collateral Accounts, Escrow Accounts,
Interest Reserve Accounts, Reserve Accounts (to the extent such assets in such
accounts are not assets of the respective Borrowers), (ix) the Collection
Account, the Lower-Tier Distribution Account, the Upper-Tier Distribution
Account, the Deferred Interest Distribution Account, the Class Q Distribution
Account, and any REO Account including reinvestment income thereon; (x) any
environmental indemnity agreements relating to the Mortgaged Properties; (xi)
the rights and remedies under the Loan Sale Agreement; and (xii) the proceeds of
any of the foregoing.
This Certificate does not purport to summarize the Pooling Agreement, and
reference is made to the Pooling Agreement for the interests, rights, benefits,
obligations and duties evidenced hereby, and the limitations thereon, and the
rights, duties and immunities of the Trustee.
As provided in the Pooling Agreement and subject to certain limitations set
forth therein, this Certificate is transferable or exchangeable only upon
surrender of this Certificate to the Certificate Registrar at the Corporate
Trust Office together with an assignment and transfer (executed by the Holder or
his duly authorized attorney), subject to the applicable requirements in Article
V of the Pooling Agreement. Upon surrender for registration of transfer of this
Certificate, subject to the applicable requirements of Article V of the Pooling
Agreement, the Trustee shall execute and the Authenticating Agent shall duly
authenticate in the name of the designated transferee or transferees, one or
more new Certificates in Denominations of a like aggregate Denomination of this
Certificate. Such Certificates shall be delivered by the Certificate Registrar
in accordance with Section 5.02(e) of the Pooling Agreement.
Prior to due presentation of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar, any Paying Agent and any agent of any of them may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and none of the Depositor, the Master Servicer, the Special
Servicer, the Trustee, the Certificate Registrar, any Paying Agent or any agent
of any of them shall be affected by any notice or knowledge to the contrary.
No fee or service shall be imposed by the Certificate Registrar for its
services in respect of any registration of transfer or exchange referred to in
Section 5.02 of the Pooling Agreement other than for transfers to Institutional
Accredited Investors, as also provided therein. In connection with any transfer
to a transferee that is not a QIB, the transferor shall reimburse the Trust Fund
for any costs (including the cost of the Certificate Registrar's counsel's
review of the documents and any legal opinions, submitted by the transferor or
transferee to the Certificate Registrar as provided herein) incurred by the
Certificate Registrar in connection with such transfer. The Certificate
Registrar may require payment by each transferor of a sum sufficient to cover
any tax, expense or other governmental charge payable in connection with any
such transfer.
The Pooling Agreement or any Custodial Agreement may be amended from time
to time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee, without the consent of any of the Certificateholders; (i) to cure any
ambiguity; (ii) to correct or supplement any provisions in the Pooling Agreement
or any Custodial Agreement that may be defective or inconsistent with any other
provisions in such agreement; (iii) to amend any provision thereof to the extent
necessary or desirable to maintain the status of each of the Upper-Tier REMIC,
and Lower-Tier REMIC as a REMIC, or to prevent the imposition of any material
state or local taxes; (iv) to amend or supplement any provisions in either of
such agreements to the extent necessary or desirable to maintain the rating or
ratings assigned to each of the Classes of Certificates by each Rating Agency;
(v) to amend or supplement any provisions in either of such agreements that
shall not adversely affect in any material respect the interests of any
Certificateholder not consenting thereto, as evidenced in writing by an Opinion
of Counsel, at the expense of the party requesting such amendment, or as
evidenced by confirmation in writing from each Rating Agency that such amendment
or supplement will not result in a qualification, withdrawal or downgrading of
the then-current ratings assigned to the Certificates, or (vi) to make any other
provisions with respect to matters or questions arising under the Pooling
Agreement, which shall not be inconsistent with the provisions of the Pooling
Agreement and will not result in a downgrade, qualification or withdrawal of the
then current rating or ratings then assigned to any outstanding Class of
Certificates, as confirmed by each Rating Agency in writing.
Further, the Depositor, the Master Servicer, the Special Servicer and the
Trustee, at any time and from time to time, without the consent of the
Certificateholders, may amend the Pooling Agreement to modify, eliminate or add
to any of its provisions to such extent as shall be necessary to maintain the
qualification of the Trust REMIC as two separate REMICs or of the Grantor Trust
as a grantor trust, or to prevent the imposition of any additional material
state or local taxes, at all times that any Certificates are outstanding;
provided, however, that such action, as evidenced by an Opinion of Counsel
(obtained at the expense of the Trust Fund), is necessary or helpful to maintain
such qualification or to prevent the imposition of any such taxes, and would not
adversely affect in any material respect the interest of any Certificateholder.
The Pooling Agreement or any Custodial Agreement may also be amended from
time to time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee with the consent of the Holders of Certificates evidencing not less than
66-2/3% of the Percentage Interests of each Class of Certificates affected by
the amendment for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Pooling Agreement or any
Custodial Agreement or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such amendment shall:
(i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be
distributed on any Certificate without the consent of all the
Holders of all Certificates representing all Percentage
Interests of the Class or Classes affected thereby;
(ii) change the percentages of Voting Rights of Holders of
Certificates which are required to consent to any action or
inaction under the Pooling Agreement, without the consent of all
the Holders of all Certificates representing all Percentage
Interests of the Class or Classes affected thereby;
(iii) alter the Servicing Standard or the obligations of the Master
Servicer, the Special Servicer or the Trustee to make a P&I
Advance or Property Advance without the consent of the Holders
of all Certificates representing all of the Percentage Interests
of the Class or Classes affected thereby; or
(iv) amend any section of the Pooling Agreement which relates to the
amendment thereof, without the consent of all the Holders of all
Certificates representing all Percentage Interests of the Class
or Classes affected thereby.
The Depositor may effect an early termination of the Trust Fund, upon not
less than 30 days' prior notice given to the Trustee and Master Servicer any
time on or after the Early Termination Notice Date (defined as any date as of
which the aggregate Stated Principal Balance of the Mortgage Loans is less than
1.0% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
Cut-Off Date) specifying the Anticipated Termination Date, by purchasing on such
date all, but not less than all, of the Mortgage Loans then included in the
Trust Fund, and all property acquired in respect of any Mortgage Loan, at a
purchase price, payable in cash, equal to not less than the greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of each Mortgage Loan,
included in the Trust Fund as of the last day of the month
preceding such Distribution Date;
(B) the fair market value of all other property included in the Trust
Fund as of the last day of the month preceding such Distribution
Date, as determined by an Independent appraiser acceptable to the
Master Servicer as of the date not more than 30 days prior to the
last day of the month preceding such Distribution Date;
(C) all unpaid interest accrued on such principal balance of each
such Mortgage Loan (including for this purpose any Mortgage Loan
as to which title to the related Mortgaged Property has been
acquired) at the Mortgage Rate (plus the Excess Rate, to the
extent applicable) to the last day of the Interest Accrual Period
preceding such Distribution Date;
(D) the aggregate amount of unreimbursed Property Advances, and
unpaid Servicing Fees, Special Servicing Compensation, Trustee
Fees and Trust Fund expenses, in each case to the extent
permitted under the Pooling Agreement with interest on all
unreimbursed Advances at the Advance Rate; and
(ii) the aggregate fair market value of the Mortgage Loans, and all other
property acquired in respect of any Mortgage Loan in the Trust Fund,
on the last day of the month preceding such Distribution Date, as
determined by an Independent appraiser acceptable to the Master
Servicer as of a date not more than 30 days prior to the last day of
the month preceding such Distribution Date, together with one month's
interest thereon at the related Mortgage Rates.
The Master Servicer or, if the Master Servicer does not, any Holder of a
Class LR Certificate representing greater than a 50% Percentage Interest in such
Class, may also effect such termination as provided above if it first notifies
the Depositor, or the Depositor and the Master Servicer, respectively, through
the Trustee of its intention to do so in writing at least 30 days prior to the
Early Termination Notice Date and neither the Depositor nor the Master Servicer
as the case may be, terminates the Trust Fund as described above within such
30-day period. All costs and expenses incurred by any and all parties to this
Agreement or by the Trust Fund in connection with the purchase of the Mortgage
Loans and other assets of the Trust Fund pursuant to Section 9.01(c) of the
Pooling Agreement shall be borne by the party exercising its purchase rights
hereunder. The Trustee shall be entitled to rely conclusively on any
determination made by an Independent appraiser pursuant to Section 9.01(c) of
the Pooling Agreement.
The respective obligations and responsibilities of the Master Servicer, the
Special Servicer, the Depositor and the Trustee created by the Pooling Agreement
with respect to the Certificates (other than the obligation to make certain
payments and to send certain notices to Certificateholders as set forth in the
Pooling Agreement) shall terminate immediately following the occurrence of the
last action required to be taken by the Trustee pursuant to Article IX of the
Pooling Agreement on the Termination Date; provided, however, that in no event
shall the trust created thereby continue beyond the expiration of twenty-one
years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late ambassador of the United States to the United Kingdom, living
on the date of the Pooling Agreement.
Unless the Certificate of Authentication on this Certificate has been
executed by the Trustee or on its behalf by the Authenticating Agent, by manual
signature, this Certificate shall not be entitled to any benefit under the
Pooling Agreement or be valid for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Class F Certificate to be
duly executed.
Dated: October ___, 1998
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Trustee
By:__________________________________________
Authorized Officer
Certificate of Authentication
-----------------------------
This is one of the Class F Certificates referred to in the Pooling
Agreement.
Dated: October ___, 1998
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Authenticating Agent
By:__________________________________________
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned ("Assignor(s)") hereby sell(s),
assign(s) and transfer(s) unto _________________________________________
_______________________________________________________________________ (please
print or typewrite name(s) and address(es), including postal zip code(s) of
assignee(s)) ("Assignee(s)") the entire Percentage Interest represented by the
within Class F Certificate and hereby authorize(s) the registration of transfer
of such interest to Assignee(s) on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Class F
Certificate of the entire Percentage Interest represented by the within Class F
Certificates to the above-named Assignee(s) and to deliver such Class F
Certificate to the following address:
Date: _________________ _______________________________________________
Signature by or on behalf of
Assignor(s)
-----------------------------------------------
Taxpayer Identification Number
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee(s) should include the following for purposes of
distribution:____________________________________
Address of the Assignee(s) for the purpose of receiving notices and
distributions:____________________________
Distributions, if being made by wire transfer in immediately available
funds to ___________________________ for the account of
_____________________________ account number __________________________.
This information is provided by __________________________ the Assignee(s)
named above, or ________________________________________________ as its (their)
agent.
By: ____________________________________________
--------------------------------------------
[Please print or type name(s)]
--------------------------------------------
Title:
--------------------------------------------
Taxpayer Identification Number
<PAGE>
EXHIBIT A-9
Morgan Stanley Capital I Inc.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-XL2, CLASS Q
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE
DEPOSITOR, THE MASTER SERVICER, THE TRUSTEE, THE UNDERWRITER OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THE CERTIFICATES NOR THE UNDERLYING MORTGAGE
LOANS ARE INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW. THE
HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY
BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A)(1) PURSUANT TO
RULE 144A UNDER THE SECURITIES ACT TO AN INSTITUTIONAL INVESTOR THAT THE HOLDER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER, WITHIN THE MEANING OF
RULE 144A (A "QIB"), WHOM THE HOLDER HAS INFORMED THAT THE REOFFER, RESALE,
PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2) TO AN
INSTITUTIONAL INVESTOR THAT IS, OR ALL THE EQUITY OWNERS OF WHICH ARE,
INSTITUTIONAL "ACCREDITED INVESTORS" AS SUCH TERM IS DEFINED IN RULE
501(A)(1),(2),(3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT PURSUANT TO AN
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 (IF AVAILABLE) OR (3) BY AN
INITIAL INVESTOR THAT IS A QIB, TO AN INSTITUTIONAL ACCREDITED INVESTOR AND (B)
IN ACCORDANCE WITH ANY OTHER APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES.
THIS CERTIFICATE OR ANY INTEREST HEREIN SHOULD NOT BE PURCHASED BY A TRANSFEREE
THAT IS (A) AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, INCLUDING
AN INDIVIDUAL RETIREMENT ACCOUNT OR A KEOGH PLAN, WHICH IS SUBJECT TO TITLE I OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A
GOVERNMENTAL PLAN (AS DEFINED IN SECTION 3(32) OF ERISA) THAT IS SUBJECT TO ANY
FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") WHICH IS, TO A MATERIAL EXTENT,
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE (EACH, A "PLAN"), OR
(B) A COLLECTIVE INVESTMENT FUND IN WHICH SUCH PLANS ARE INVESTED, AN INSURANCE
COMPANY USING ASSETS OF SEPARATE ACCOUNTS OR GENERAL ACCOUNTS WHICH INCLUDE
ASSETS OF PLANS (OR WHICH ARE DEEMED PURSUANT TO ERISA OR SIMILAR LAW TO INCLUDE
ASSETS OF PLANS) OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR USING THE
ASSETS OF ANY SUCH PLAN. EACH PROSPECTIVE TRANSFEREE OF THIS CERTIFICATE WILL BE
REQUIRED TO DELIVER TO THE DEPOSITOR, THE CERTIFICATE REGISTRAR AND THE TRUSTEE,
(I) A REPRESENTATION LETTER, SUBSTANTIALLY IN THE FORM OF EXHIBIT D-2 TO THE
POOLING AGREEMENT REFERRED TO HEREIN, STATING THAT SUCH PROSPECTIVE TRANSFEREE
IS NOT A PERSON REFERRED TO IN CLAUSE (A) OR (B) ABOVE, OR (II) AN OPINION OF
COUNSEL WHICH ESTABLISHES TO THE SATISFACTION OF THE DEPOSITOR, THE CERTIFICATE
REGISTRAR AND THE TRUSTEE THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE WILL
NOT RESULT IN THE ASSETS OF THE TRUST FUND BEING DEEMED TO BE "PLAN ASSETS" AND
SUBJECT TO TITLE I OF ERISA OR SECTION 4975 OF THE CODE OR SIMILAR LAW, WILL NOT
CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION WITHIN THE MEANING OF ERISA,
SECTION 4975 OF THE CODE OR A MATERIALLY SIMILAR CHARACTERIZATION UNDER SIMILAR
LAW, AND WILL NOT SUBJECT THE MASTER SERVICER, THE SPECIAL SERVICER, THE
DEPOSITOR, THE TRUSTEE OR THE CERTIFICATE REGISTRAR TO ANY OBLIGATION OR
LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES UNDER ERISA, SECTION 4975 OF THE
CODE OR SIMILAR LAW) IN ADDITION TO THOSE SET FORTH IN THE POOLING AGREEMENT,
WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE TRUST FUND,
THE MASTER SERVICER, THE SPECIAL SERVICER, THE CERTIFICATE REGISTRAR OR THE
DEPOSITOR. EACH TRANSFEREE OF A BENEFICIAL INTEREST HEREIN SHALL BE DEEMED TO
REPRESENT THAT IT IS NOT A PERSON REFERRED TO IN CLAUSE (A) OR (B) ABOVE.
<PAGE>
Morgan Stanley Capital I Inc.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-XL2, CLASS Q
Percentage Interest: 100% Cut-Off Date: October 1, 1998
No.:
This certifies that Morgan Stanley Capital I Inc. is the registered owner
of an interest in a Trust Fund, including the distributions to be made with
respect to the Class Q Certificates. The Trust Fund, described more fully below,
consists primarily of a pool of Mortgage Loans secured by first liens on
commercial properties and held in trust by the Trustee and serviced by the
Master Servicer. The Trust Fund was created, and the Mortgage Loans are to be
serviced, pursuant to the Pooling Agreement (as defined below). The Holder of
this Certificate, by virtue of the acceptance hereof, assents to the terms,
provisions and conditions of the Pooling Agreement and is bound thereby. Also
issued under the Pooling Agreement are the Class A-1, Class A-2, Class X, Class
B, Class C, Class D, Class E, Class F, Class R, and Class LR Certificates
(together with the Class Q Certificates, the "Certificates"; the Holders of
Certificates issued under the Pooling Agreement are collectively referred to
herein as "Certificateholders").
This Certificate is issued pursuant to, and in accordance with, the terms
of a Pooling and Servicing Agreement, dated as of October 1, 1998 (the "Pooling
Agreement"), by and among Morgan Stanley Capital I Inc., as Depositor, Midland
Loan Services, Inc., as Master Servicer, Midland Loan Services, Inc., as Special
Servicer and Norwest Bank Minnesota, National Association, as Trustee. To the
extent not defined herein, capitalized terms used herein shall have the meanings
assigned thereto in the Pooling Agreement.
The Trustee makes no representation or warranty as to any of the statements
contained herein or the validity or sufficiency of the Certificates or the
Mortgage Loans and has executed this Certificate in its limited capacity as
Trustee under the Pooling Agreement.
This Certificate represents a pro rata undivided interest in the Default
Interest, subject to an obligation to pay interest on Advances. Pursuant to the
terms of the Pooling Agreement, the Trustee, or the Paying Agent on behalf of
the Trustee, will distribute (other than the final distribution on any
Certificate), on the third Business Day of each month, commencing in November
1998 (each such date, a "Distribution Date"), to the Person in whose name this
Certificate is registered as of the related Record Date, an amount equal to such
Person's pro rata share (based on the Percentage Interest represented by this
Certificate) of that portion of the aggregate amount of Net Default Interest
then distributable, if any, allocable to the Class Q Certificates for such
Distribution Date, all as more fully described in the Pooling Agreement.
All distributions (other than the final distribution on any Certificate)
will be made by the Paying Agent to the persons in whose names the Certificates
are registered at the close of business on each Record Date, which will be the
close of business on the last day of the month immediately preceding the month
in which such Distribution Date occurs, or if such day is not a Business Day,
the immediately preceding Business Day. Such distributions shall be made on each
Distribution Date other than the Termination Date to each Certificateholder of
record on the related Record Date (a) by wire transfer of immediately available
funds to the account of such Certificateholder at a bank or other entity located
in the United States and having appropriate facilities therefor, if such
Certificateholder provides the Trustee with wiring instructions no less than
five Business Days prior to the related Record Date, or otherwise (b) by check
mailed to such Certificateholder. The final distribution on each Certificate
shall be made in like manner, but only upon presentment and surrender of such
Certificate at the office of the Trustee or its agent (which may be the Paying
Agent or the Certificate Registrar acting as such agent) that is specified in
the notice to Certificateholders of such final distribution.
Any funds not distributed on the Termination Date because of the failure of
any Certificateholders to tender their Certificates shall be set aside and held
in trust for the account of the appropriate non-tendering Certificateholders,
whereupon the Trust Fund shall terminate. If any Certificates as to which notice
of the Termination Date has been given pursuant to Section 9.01 of the Pooling
Agreement shall not have been surrendered for cancellation within six months
after the time specified in such notice, the Trustee shall mail a second notice
to the remaining Certificateholders, at their last addresses shown in the
Certificate Register, to surrender their Certificates for cancellation in order
to receive, from such funds held, the final distribution with respect thereto.
If within one year after the second notice any Certificate shall not have been
surrendered for cancellation, the Trustee may, directly or through an agent,
take appropriate steps to contact the remaining Certificateholders concerning
surrender of their Certificates. The costs and expenses of maintaining such
funds and of contacting Certificateholders shall be paid out of the assets which
remain held. If within two years after the second notice any Certificates shall
not have been surrendered for cancellation, the Paying Agent shall pay to the
Class R Certificateholders all amounts distributable to the Holders thereof. No
interest shall accrue or be payable to any Certificateholder on any amount held
as a result of such Certificateholder's failure to surrender its Certificate(s)
for final payment thereof in accordance with Section 9.01 of the Pooling
Agreement.
This Certificate is limited in right of payment to, among other things,
certain collections and recoveries in respect of the Mortgage Loans, as more
specifically set forth herein and in the Pooling Agreement.
As provided in the Pooling Agreement, the Trust Fund includes (i) such
Mortgage Loans as from time to time are subject to the Pooling Agreement,
together with the Mortgage Files relating thereto; (ii) all scheduled or
unscheduled payments on or collections in respect of the Mortgage Loans due
after the Cut-Off Date; (iii) any REO Property; (iv) all revenues received in
respect of any REO Property; (v) the Master Servicer's, the Special Servicer's
and the Trustee's rights under the insurance policies with respect to the
Mortgage Loans required to be maintained pursuant to the Pooling Agreement and
any proceeds thereof; (vi) any Assignments of Leases, Rents and Profits and any
security agreements; (vii) any indemnities or guaranties given as additional
security for any Mortgage Loans; (viii) the Trustee's rights in all assets
deposited in the Lock-Box Accounts, Cash Collateral Accounts, Escrow Accounts,
Interest Reserve Accounts, Reserve Accounts (to the extent such assets in such
accounts are not assets of the respective Borrowers), (ix) the Collection
Account, the Lower-Tier Distribution Account, the Upper-Tier Distribution
Account, the Deferred Interest Distribution Account, the Class Q Distribution
Account, and any REO Account including reinvestment income thereon; (x) any
environmental indemnity agreements relating to the Mortgaged Properties; (xi)
the rights and remedies under the Loan Sale Agreement; and (xii) the proceeds of
any of the foregoing.
This Certificate does not purport to summarize the Pooling Agreement, and
reference is made to the Pooling Agreement for the interests, rights, benefits,
obligations and duties evidenced hereby, and the limitations thereon, and the
rights, duties and immunities of the Trustee.
As provided in the Pooling Agreement and subject to certain limitations set
forth therein, this Certificate is transferable or exchangeable only upon
surrender of this Certificate to the Certificate Registrar at the Corporate
Trust Office together with an assignment and transfer (executed by the Holder or
his duly authorized attorney), subject to the applicable requirements in Article
V of the Pooling Agreement. Upon surrender for registration of transfer of this
Certificate, subject to the applicable requirements of Article V of the Pooling
Agreement, the Trustee shall execute and the Authenticating Agent shall duly
authenticate in the name of the designated transferee or transferees, one or
more new Certificates in Denominations of a like aggregate Denomination of this
Certificate. Such Certificates shall be delivered by the Certificate Registrar
in accordance with Section 5.02(e) of the Pooling Agreement.
Prior to due presentation of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar, any Paying Agent and any agent of any of them may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and none of the Depositor, the Master Servicer, the Special
Servicer, the Trustee, the Certificate Registrar, any Paying Agent or any agent
of any of them shall be affected by any notice or knowledge to the contrary.
No fee or service shall be imposed by the Certificate Registrar for its
services in respect of any registration of transfer or exchange referred to in
Section 5.02 of the Pooling Agreement other than for transfers to Institutional
Accredited Investors, as also provided therein. In connection with any transfer
to a transferee that is not a QIB, the transferor shall reimburse the Trust Fund
for any costs (including the cost of the Certificate Registrar's counsel's
review of the documents and any legal opinions, submitted by the transferor or
transferee to the Certificate Registrar as provided herein) incurred by the
Certificate Registrar in connection with such transfer. The Certificate
Registrar may require payment by each transferor of a sum sufficient to cover
any tax, expense or other governmental charge payable in connection with any
such transfer.
The Pooling Agreement or any Custodial Agreement may be amended from time
to time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee, without the consent of any of the Certificateholders; (i) to cure any
ambiguity; (ii) to correct or supplement any provisions in the Pooling Agreement
or any Custodial Agreement that may be defective or inconsistent with any other
provisions in such agreement; (iii) to amend any provision thereof to the extent
necessary or desirable to maintain the status of each of the Upper-Tier REMIC,
and Lower-Tier REMIC as a REMIC, or to prevent the imposition of any material
state or local taxes; (iv) to amend or supplement any provisions in either of
such agreements to the extent necessary or desirable to maintain the rating or
ratings assigned to each of the Classes of Certificates by each Rating Agency;
(v) to amend or supplement any provisions in either of such agreements that
shall not adversely affect in any material respect the interests of any
Certificateholder not consenting thereto, as evidenced in writing by an Opinion
of Counsel, at the expense of the party requesting such amendment, or as
evidenced by confirmation in writing from each Rating Agency that such amendment
or supplement will not result in a qualification, withdrawal or downgrading of
the then-current ratings assigned to the Certificates, or (vi) to make any other
provisions with respect to matters or questions arising under the Pooling
Agreement, which shall not be inconsistent with the provisions of the Pooling
Agreement and will not result in a downgrade, qualification or withdrawal of the
then current rating or ratings then assigned to any outstanding Class of
Certificates, as confirmed by each Rating Agency in writing.
Further, the Depositor, the Master Servicer, the Special Servicer and the
Trustee, at any time and from time to time, without the consent of the
Certificateholders, may amend the Pooling Agreement to modify, eliminate or add
to any of its provisions to such extent as shall be necessary to maintain the
qualification of the Trust REMIC as two separate REMICs or of the Grantor Trust
as a grantor trust, or to prevent the imposition of any additional material
state or local taxes, at all times that any Certificates are outstanding;
provided, however, that such action, as evidenced by an Opinion of Counsel
(obtained at the expense of the Trust Fund), is necessary or helpful to maintain
such qualification or to prevent the imposition of any such taxes, and would not
adversely affect in any material respect the interest of any Certificateholder.
The Pooling Agreement or any Custodial Agreement may also be amended from
time to time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee with the consent of the Holders of Certificates evidencing not less than
66-2/3% of the Percentage Interests of each Class of Certificates affected by
the amendment for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Pooling Agreement or any
Custodial Agreement or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such amendment shall:
(i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be
distributed on any Certificate without the consent of all the
Holders of all Certificates representing all Percentage
Interests of the Class or Classes affected thereby;
(ii) change the percentages of Voting Rights of Holders of
Certificates which are required to consent to any action or
inaction under the Pooling Agreement, without the consent of all
the Holders of all Certificates representing all Percentage
Interests of the Class or Classes affected thereby;
(iii) alter the Servicing Standard or the obligations of the Master
Servicer, the Special Servicer or the Trustee to make a P&I
Advance or Property Advance without the consent of the Holders
of all Certificates representing all of the Percentage Interests
of the Class or Classes affected thereby; or
(iv) amend any section of the Pooling Agreement which relates to the
amendment thereof, without the consent of all the Holders of all
Certificates representing all Percentage Interests of the Class
or Classes affected thereby.
The Depositor may effect an early termination of the Trust Fund, upon not
less than 30 days' prior notice given to the Trustee and Master Servicer any
time on or after the Early Termination Notice Date (defined as any date as of
which the aggregate Stated Principal Balance of the Mortgage Loans is less than
1.0% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
Cut-Off Date) specifying the Anticipated Termination Date, by purchasing on such
date all, but not less than all, of the Mortgage Loans then included in the
Trust Fund, and all property acquired in respect of any Mortgage Loan, at a
purchase price, payable in cash, equal to not less than the greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of each Mortgage Loan,
included in the Trust Fund as of the last day of the month
preceding such Distribution Date;
(B) the fair market value of all other property included in the Trust
Fund as of the last day of the month preceding such Distribution
Date, as determined by an Independent appraiser acceptable to the
Master Servicer as of the date not more than 30 days prior to the
last day of the month preceding such Distribution Date;
(C) all unpaid interest accrued on such principal balance of each
such Mortgage Loan (including for this purpose any Mortgage Loan
as to which title to the related Mortgaged Property has been
acquired) at the Mortgage Rate (plus the Excess Rate, to the
extent applicable) to the last day of the Interest Accrual Period
preceding such Distribution Date;
(D) the aggregate amount of unreimbursed Property Advances, and
unpaid Servicing Fees, Special Servicing Compensation, Trustee
Fees and Trust Fund expenses, in each case to the extent
permitted under the Pooling Agreement with interest on all
unreimbursed Advances at the Advance Rate; and
(ii) the aggregate fair market value of the Mortgage Loans, and all other
property acquired in respect of any Mortgage Loan in the Trust Fund,
on the last day of the month preceding such Distribution Date, as
determined by an Independent appraiser acceptable to the Master
Servicer as of a date not more than 30 days prior to the last day of
the month preceding such Distribution Date, together with one month's
interest thereon at the related Mortgage Rates.
The Master Servicer or, if the Master Servicer does not, any Holder of a
Class LR Certificate representing greater than a 50% Percentage Interest in such
Class, may also effect such termination as provided above if it first notifies
the Depositor, or the Depositor and the Master Servicer, respectively, through
the Trustee of its intention to do so in writing at least 30 days prior to the
Early Termination Notice Date and neither the Depositor nor the Master Servicer
as the case may be, terminates the Trust Fund as described above within such
30-day period. All costs and expenses incurred by any and all parties to this
Agreement or by the Trust Fund in connection with the purchase of the Mortgage
Loans and other assets of the Trust Fund pursuant to Section 9.01(c) of the
Pooling Agreement shall be borne by the party exercising its purchase rights
hereunder. The Trustee shall be entitled to rely conclusively on any
determination made by an Independent appraiser pursuant to Section 9.01(c) of
the Pooling Agreement.
The respective obligations and responsibilities of the Master Servicer, the
Special Servicer, the Depositor and the Trustee created by the Pooling Agreement
with respect to the Certificates (other than the obligation to make certain
payments and to send certain notices to Certificateholders as set forth in the
Pooling Agreement) shall terminate immediately following the occurrence of the
last action required to be taken by the Trustee pursuant to Article IX of the
Pooling Agreement on the Termination Date; provided, however, that in no event
shall the trust created thereby continue beyond the expiration of twenty-one
years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late ambassador of the United States to the United Kingdom, living
on the date of the Pooling Agreement.
Unless the Certificate of Authentication on this Certificate has been
executed by the Trustee or on its behalf by the Authenticating Agent, by manual
signature, this Certificate shall not be entitled to any benefit under the
Pooling Agreement or be valid for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Class Q Certificate to be
duly executed.
Dated: October ___, 1998
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Trustee
By:__________________________________________
Authorized Officer
Certificate of Authentication
-----------------------------
This is one of the Class Q Certificates referred to in the Pooling
Agreement.
Dated: October ___, 1998
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Authenticating Agent
By:__________________________________________
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned ("Assignor(s)") hereby sell(s),
assign(s) and transfer(s) unto _________________________________________
_______________________________________________________________________ (please
print or typewrite name(s) and address(es), including postal zip code(s) of
assignee(s)) ("Assignee(s)") the entire Percentage Interest represented by the
within Class Q Certificate and hereby authorize(s) the registration of transfer
of such interest to Assignee(s) on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Class Q
Certificate of the entire Percentage Interest represented by the within Class Q
Certificates to the above-named Assignee(s) and to deliver such Class Q
Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Date: _________________ _____________________________________________
Signature by or on behalf of
Assignor(s)
---------------------------------------------
Taxpayer Identification Number
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee(s) should include the following for purposes of
distribution:____________________________________
Address of the Assignee(s) for the purpose of receiving notices and
distributions:____________________________
Distributions, if being made by wire transfer in immediately available
funds to ___________________________ for the account of
_____________________________ account number __________________________.
This information is provided by __________________________ the Assignee(s)
named above, or ________________________________________________ as its (their)
agent.
By: _________________________________________
-----------------------------------------
[Please print or type name(s)]
-----------------------------------------
Title:
-----------------------------------------
Taxpayer Identification Number
<PAGE>
EXHIBIT A-10
Morgan Stanley Capital I Inc.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-XL2, CLASS R
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE
DEPOSITOR, THE MASTER SERVICER, THE TRUSTEE, THE UNDERWRITER OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THE CERTIFICATES NOR THE UNDERLYING MORTGAGE
LOANS ARE INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW. THE
HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY
BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) PURSUANT TO RULE
144A UNDER THE SECURITIES ACT TO AN INSTITUTIONAL INVESTOR THAT THE HOLDER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER, WITHIN THE MEANING OF
RULE 144A (A "QIB"), WHOM THE HOLDER HAS INFORMED THAT THE REOFFER, RESALE,
PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, AND (B) IN
ACCORDANCE WITH ANY OTHER APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES.
THIS CERTIFICATE OR ANY INTEREST HEREIN SHOULD NOT BE PURCHASED BY A TRANSFEREE
THAT IS (A) AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, INCLUDING
AN INDIVIDUAL RETIREMENT ACCOUNT OR A KEOGH PLAN, WHICH IS SUBJECT TO TITLE I OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A
GOVERNMENTAL PLAN (AS DEFINED IN SECTION 3(32) OF ERISA) THAT IS SUBJECT TO ANY
FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") WHICH IS, TO A MATERIAL EXTENT,
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE (EACH, A "PLAN"), OR
(B) a collective investment fund in which such plans are invested, AN INSURANCE
COMPANY THAT IS USING ASSETS OF SEPARATE ACCOUNTS OR GENERAL ACCOUNTS WHICH
INCLUDE ASSETS OF PLANS (OR WHICH ARE DEEMED PURSUANT TO ERISA OR SIMILAR LAW TO
INCLUDE ASSETS OF PLANS) OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR
USING THE ASSETS OF ANY SUCH PLAN. EACH PROSPECTIVE TRANSFEREE OF THIS
CERTIFICATE WILL BE REQUIRED TO DELIVER TO THE DEPOSITOR, THE CERTIFICATE
REGISTRAR AND THE TRUSTEE A REPRESENTATION LETTER, SUBSTANTIALLY IN THE FORM OF
EXHIBIT D-2 TO THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN, STATING
THAT SUCH PROSPECTIVE TRANSFEREE IS NOT A PERSON REFERRED TO IN CLAUSE (A) OR
(B) ABOVE.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL INTEREST"
IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G(a)(2) AND 860D OF THE CODE. A TRANSFEREE OF THIS
CERTIFICATE, BY ACCEPTANCE HEREOF, IS DEEMED TO HAVE ACCEPTED THIS CERTIFICATE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFERABILITY, AS SET FORTH IN SECTION
5.02(1) OF THE POOLING AND SERVICING AGREEMENT, AND SHALL BE REQUIRED TO FURNISH
AN AFFIDAVIT TO THE TRANSFEROR AND THE TRUSTEE TO THE EFFECT THAT, AMONG OTHER
THINGS, (A) IT IS NOT A DISQUALIFIED ORGANIZATION, AS SUCH TERM IS DEFINED IN
CODE SECTION 860E(e)(5), OR AN AGENT (INCLUDING A BROKER, NOMINEE OR OTHER
MIDDLEMAN) FOR SUCH DISQUALIFIED ORGANIZATION AND IS OTHERWISE A PERMITTED
TRANSFEREE (AS DEFINED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN), (B) IT HAS HISTORICALLY PAID ITS DEBTS AS THEY HAVE COME DUE AND
INTENDS TO CONTINUE TO PAY ITS DEBTS AS THEY COME DUE IN THE FUTURE, AND (C) IT
INTENDS TO PAY ANY TAXES ASSOCIATED WITH HOLDING THIS CERTIFICATE AS THEY BECOME
DUE. ANY PURPORTED TRANSFER TO A DISQUALIFIED ORGANIZATION OR OTHER PERSON THAT
IS NOT A PERMITTED TRANSFEREE OR OTHERWISE IN VIOLATION OF THESE RESTRICTIONS
SHALL BE ABSOLUTELY NULL AND VOID AND SHALL VEST NO RIGHTS IN ANY PURPORTED
TRANSFEREE. IF THIS CERTIFICATE REPRESENTS A "NON-ECONOMIC RESIDUAL INTEREST",
AS DEFINED IN TREASURY REGULATIONS SECTION 1.860E-l(c), TRANSFERS OF THIS
CERTIFICATE MAY BE DISREGARDED FOR FEDERAL INCOME TAX PURPOSES. IN ORDER TO
SATISFY A REGULATORY SAFE HARBOR UNDER WHICH SUCH TRANSFERS WILL NOT BE
DISREGARDED, THE TRANSFEROR MAY BE REQUIRED, AMONG OTHER THINGS, TO SATISFY
ITSELF AS TO THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. THE HOLDER OF
THIS CERTIFICATE, BY ACCEPTANCE HEREOF, IS DEEMED TO HAVE AGREED TO CONSENT TO
ACT AS "TAX MATTERS PERSON" OF THE UPPER-TIER REMIC AND TO THE APPOINTMENT OF
THE TRUSTEE AS ATTORNEY-IN-FACT AND AGENT FOR THE TAX MATTERS PERSON OR AS
OTHERWISE PROVIDED IN THE POOLING AND SERVICING AGREEMENT TO PERFORM THE
FUNCTIONS OF A "TAX MATTERS PERSON" FOR PURPOSES OF SUBCHAPTER C OF CHAPTER 63
OF SUBTITLE F OF THE CODE.
<PAGE>
Morgan Stanley Capital I Inc.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-XL2, CLASS R
Percentage Interest: 100%
No.:
This certifies that Morgan Stanley & Co. Incorporated is the registered
owner of an interest in a Trust Fund, including the distributions to be made
with respect to the Class R Certificates. The Trust Fund, described more fully
below, consists primarily of a pool of Mortgage Loans secured by first liens on
commercial properties and held in trust by the Trustee and serviced by the
Master Servicer. The Trust Fund was created, and the Mortgage Loans are to be
serviced, pursuant to the Pooling Agreement (as defined below). The Holder of
this Certificate, by virtue of the acceptance hereof, assents to the terms,
provisions and conditions of the Pooling Agreement and is bound thereby. Also
issued under the Pooling Agreement are the Class A-1, Class A-2, Class X, Class
C, Class D, Class E, Class F, Class Q, and Class LR Certificates (together with
the Class R Certificates, the "Certificates"; the Holders of Certificates issued
under the Pooling Agreement are collectively referred to herein as
"Certificateholders").
This Certificate is issued pursuant to, and in accordance with, the terms
of a Pooling and Servicing Agreement, dated as of October 1, 1998 (the "Pooling
Agreement"), by and among Morgan Stanley Capital I Inc., as Depositor, Midland
Loan Services, Inc., as Master Servicer, Midland Loan Services, Inc., as Special
Servicer and Norwest Bank Minnesota, National Association, as Trustee. To the
extent not defined herein, capitalized terms used herein shall have the meanings
assigned thereto in the Pooling Agreement.
This Certificate represents a "residual interest" in a "real estate
mortgage investment conduit," as those terms are defined, respectively, in
Sections 860G(a)(2) and 860D of the Internal Revenue Code of l986, as amended.
The Trustee makes no representation or warranty as to any of the statements
contained herein or the validity or sufficiency of the Certificates or the
Mortgage Loans and has executed this Certificate in its limited capacity as
Trustee under the Pooling Agreement.
Pursuant to the terms of the Pooling Agreement, the Trustee, or the Paying
Agent on behalf of the Trustee, will distribute (other than the final
distribution on any Certificate), on the third Business Day of each month,
commencing in November 1998 (each such date, a "Distribution Date"), to the
Person in whose name this Certificate is registered as of the related Record
Date, an amount equal to such Person's pro rata share (based on the Percentage
Interest represented by this Certificate) of the aggregate amount, if any,
allocable to the Class R Certificates for such Distribution Date, all as more
fully described in the Pooling Agreement.
All distributions (other than the final distribution on any Certificate)
will be made by the Paying Agent to the persons in whose names the Certificates
are registered at the close of business on each Record Date, which will be the
close of business on the last day of the month immediately preceding the month
in which such Distribution Date occurs, or if such day is not a Business Day,
the immediately preceding Business Day. Such distributions shall be made on each
Distribution Date other than the Termination Date to each Certificateholder of
record on the related Record Date (a) by wire transfer of immediately available
funds to the account of such Certificateholder at a bank or other entity located
in the United States and having appropriate facilities therefor, if such
Certificateholder provides the Trustee with wiring instructions no less than
five Business Days prior to the related Record Date, or otherwise (b) by check
mailed to such Certificateholder. The final distribution on each Certificate
shall be made in like manner, but only upon presentment and surrender of such
Certificate at the office of the Trustee or its agent (which may be the Paying
Agent or the Certificate Registrar acting as such agent) that is specified in
the notice to Certificateholders of such final distribution.
Any funds not distributed on the Termination Date because of the failure of
any Certificateholders to tender their Certificates shall be set aside and held
in trust for the account of the appropriate non-tendering Certificateholders,
whereupon the Trust Fund shall terminate. If any Certificates as to which notice
of the Termination Date has been given pursuant to Section 9.01 of the Pooling
Agreement shall not have been surrendered for cancellation within six months
after the time specified in such notice, the Trustee shall mail a second notice
to the remaining Certificateholders, at their last addresses shown in the
Certificate Register, to surrender their Certificates for cancellation in order
to receive, from such funds held, the final distribution with respect thereto.
If within one year after the second notice any Certificate shall not have been
surrendered for cancellation, the Trustee may, directly or through an agent,
take appropriate steps to contact the remaining Certificateholders concerning
surrender of their Certificates. The costs and expenses of maintaining such
funds and of contacting Certificateholders shall be paid out of the assets which
remain held. If within two years after the second notice any Certificates shall
not have been surrendered for cancellation, the Paying Agent shall pay to the
Class R Certificateholders all amounts distributable to the Holders thereof. No
interest shall accrue or be payable to any Certificateholder on any amount held
as a result of such Certificateholder's failure to surrender its Certificate(s)
for final payment thereof in accordance with Section 9.01 of the Pooling
Agreement.
This Certificate is limited in right of payment to, among other things,
certain collections and recoveries in respect of the Mortgage Loans, as more
specifically set forth herein and in the Pooling Agreement.
As provided in the Pooling Agreement, the Trust Fund includes (i) such
Mortgage Loans as from time to time are subject to the Pooling Agreement,
together with the Mortgage Files relating thereto; (ii) all scheduled or
unscheduled payments on or collections in respect of the Mortgage Loans due
after the Cut-Off Date; (iii) any REO Property; (iv) all revenues received in
respect of any REO Property; (v) the Master Servicer's, the Special Servicer's
and the Trustee's rights under the insurance policies with respect to the
Mortgage Loans required to be maintained pursuant to the Pooling Agreement and
any proceeds thereof; (vi) any Assignments of Leases, Rents and Profits and any
security agreements; (vii) any indemnities or guaranties given as additional
security for any Mortgage Loans; (viii) the Trustee's rights in all assets
deposited in the Lock-Box Accounts, Cash Collateral Accounts, Escrow Accounts,
Interest Reserve Accounts, Reserve Accounts (to the extent such assets in such
accounts are not assets of the respective Borrowers), (ix) the Collection
Account, the Lower-Tier Distribution Account, the Upper-Tier Distribution
Account, the Deferred Interest Distribution Account, the Class Q Distribution
Account, and any REO Account including reinvestment income thereon; (x) any
environmental indemnity agreements relating to the Mortgaged Properties; (xi)
the rights and remedies under the Loan Sale Agreement; and (xii) the proceeds of
any of the foregoing.
This Certificate does not purport to summarize the Pooling Agreement, and
reference is made to the Pooling Agreement for the interests, rights, benefits,
obligations and duties evidenced hereby, and the limitations thereon, and the
rights, duties and immunities of the Trustee.
As provided in the Pooling Agreement and subject to certain limitations set
forth therein, this Certificate is transferable or exchangeable only upon
surrender of this Certificate to the Certificate Registrar at the Corporate
Trust Office together with an assignment and transfer (executed by the Holder or
his duly authorized attorney), subject to the applicable requirements in Article
V of the Pooling Agreement. Upon surrender for registration of transfer of this
Certificate, subject to the applicable requirements of Article V of the Pooling
Agreement, the Trustee shall execute and the Authenticating Agent shall duly
authenticate in the name of the designated transferee or transferees, one or
more new Certificates in Denominations of a like aggregate Denomination of this
Certificate. Such Certificates shall be delivered by the Certificate Registrar
in accordance with Section 5.02(e) of the Pooling Agreement.
Prior to due presentation of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar, any Paying Agent and any agent of any of them may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and none of the Depositor, the Master Servicer, the Special
Servicer, the Trustee, the Certificate Registrar, any Paying Agent or any agent
of any of them shall be affected by any notice or knowledge to the contrary.
No fee or service shall be imposed by the Certificate Registrar for its
services in respect of any registration of transfer or exchange referred to in
Section 5.02 of the Pooling Agreement other than for transfers to Institutional
Accredited Investors, as also provided therein. In connection with any transfer
to a transferee that is not a QIB, the transferor shall reimburse the Trust Fund
for any costs (including the cost of the Certificate Registrar's counsel's
review of the documents and any legal opinions, submitted by the transferor or
transferee to the Certificate Registrar as provided herein) incurred by the
Certificate Registrar in connection with such transfer. The Certificate
Registrar may require payment by each transferor of a sum sufficient to cover
any tax, expense or other governmental charge payable in connection with any
such transfer.
The Pooling Agreement or any Custodial Agreement may be amended from time
to time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee, without the consent of any of the Certificateholders; (i) to cure any
ambiguity; (ii) to correct or supplement any provisions in the Pooling Agreement
or any Custodial Agreement that may be defective or inconsistent with any other
provisions in such agreement; (iii) to amend any provision thereof to the extent
necessary or desirable to maintain the status of each of the Upper-Tier REMIC,
and Lower-Tier REMIC as a REMIC, or to prevent the imposition of any material
state or local taxes; (iv) to amend or supplement any provisions in either of
such agreements to the extent necessary or desirable to maintain the rating or
ratings assigned to each of the Classes of Certificates by each Rating Agency;
(v) to amend or supplement any provisions in either of such agreements that
shall not adversely affect in any material respect the interests of any
Certificateholder not consenting thereto, as evidenced in writing by an Opinion
of Counsel, at the expense of the party requesting such amendment, or as
evidenced by confirmation in writing from each Rating Agency that such amendment
or supplement will not result in a qualification, withdrawal or downgrading of
the then-current ratings assigned to the Certificates, or (vi) to make any other
provisions with respect to matters or questions arising under the Pooling
Agreement, which shall not be inconsistent with the provisions of the Pooling
Agreement and will not result in a downgrade, qualification or withdrawal of the
then current rating or ratings then assigned to any outstanding Class of
Certificates, as confirmed by each Rating Agency in writing.
Further, the Depositor, the Master Servicer, the Special Servicer and the
Trustee, at any time and from time to time, without the consent of the
Certificateholders, may amend the Pooling Agreement to modify, eliminate or add
to any of its provisions to such extent as shall be necessary to maintain the
qualification of the Trust REMIC as two separate REMICs or of the Grantor Trust
as a grantor trust, or to prevent the imposition of any additional material
state or local taxes, at all times that any Certificates are outstanding;
provided, however, that such action, as evidenced by an Opinion of Counsel
(obtained at the expense of the Trust Fund), is necessary or helpful to maintain
such qualification or to prevent the imposition of any such taxes, and would not
adversely affect in any material respect the interest of any Certificateholder.
The Pooling Agreement or any Custodial Agreement may also be amended from
time to time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee with the consent of the Holders of Certificates evidencing not less than
66-2/3% of the Percentage Interests of each Class of Certificates affected by
the amendment for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Pooling Agreement or any
Custodial Agreement or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such amendment shall:
(i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be
distributed on any Certificate without the consent of all the
Holders of all Certificates representing all Percentage
Interests of the Class or Classes affected thereby;
(ii) change the percentages of Voting Rights of Holders of
Certificates which are required to consent to any action or
inaction under the Pooling Agreement, without the consent of all
the Holders of all Certificates representing all Percentage
Interests of the Class or Classes affected thereby;
(iii) alter the Servicing Standard or the obligations of the Master
Servicer, the Special Servicer or the Trustee to make a P&I
Advance or Property Advance without the consent of the Holders
of all Certificates representing all of the Percentage Interests
of the Class or Classes affected thereby; or
(iv) amend any section of the Pooling Agreement which relates to the
amendment thereof, without the consent of all the Holders of all
Certificates representing all Percentage Interests of the Class
or Classes affected thereby.
The Depositor may effect an early termination of the Trust Fund, upon not
less than 30 days' prior notice given to the Trustee and Master Servicer any
time on or after the Early Termination Notice Date (defined as any date as of
which the aggregate Stated Principal Balance of the Mortgage Loans is less than
1.0% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
Cut-Off Date) specifying the Anticipated Termination Date, by purchasing on such
date all, but not less than all, of the Mortgage Loans then included in the
Trust Fund, and all property acquired in respect of any Mortgage Loan, at a
purchase price, payable in cash, equal to not less than the greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of each Mortgage Loan,
included in the Trust Fund as of the last day of the month
preceding such Distribution Date;
(B) the fair market value of all other property included in the Trust
Fund as of the last day of the month preceding such Distribution
Date, as determined by an Independent appraiser acceptable to the
Master Servicer as of the date not more than 30 days prior to the
last day of the month preceding such Distribution Date;
(C) all unpaid interest accrued on such principal balance of each
such Mortgage Loan (including for this purpose any Mortgage Loan
as to which title to the related Mortgaged Property has been
acquired) at the Mortgage Rate (plus the Excess Rate, to the
extent applicable) to the last day of the Interest Accrual Period
preceding such Distribution Date;
(D) the aggregate amount of unreimbursed Property Advances, and
unpaid Servicing Fees, Special Servicing Compensation, Trustee
Fees and Trust Fund expenses, in each case to the extent
permitted under the Pooling Agreement with interest on all
unreimbursed Advances at the Advance Rate; and
(ii) the aggregate fair market value of the Mortgage Loans, and all other
property acquired in respect of any Mortgage Loan in the Trust Fund,
on the last day of the month preceding such Distribution Date, as
determined by an Independent appraiser acceptable to the Master
Servicer as of a date not more than 30 days prior to the last day of
the month preceding such Distribution Date, together with one month's
interest thereon at the related Mortgage Rates.
The Master Servicer or, if the Master Servicer does not, any Holder of a
Class LR Certificate representing greater than a 50% Percentage Interest in such
Class, may also effect such termination as provided above if it first notifies
the Depositor, or the Depositor and the Master Servicer, respectively, through
the Trustee of its intention to do so in writing at least 30 days prior to the
Early Termination Notice Date and neither the Depositor nor the Master Servicer
as the case may be, terminates the Trust Fund as described above within such
30-day period. All costs and expenses incurred by any and all parties to this
Agreement or by the Trust Fund in connection with the purchase of the Mortgage
Loans and other assets of the Trust Fund pursuant to Section 9.01(c) of the
Pooling Agreement shall be borne by the party exercising its purchase rights
hereunder. The Trustee shall be entitled to rely conclusively on any
determination made by an Independent appraiser pursuant to Section 9.01(c) of
the Pooling Agreement.
The respective obligations and responsibilities of the Master Servicer, the
Special Servicer, the Depositor and the Trustee created by the Pooling Agreement
with respect to the Certificates (other than the obligation to make certain
payments and to send certain notices to Certificateholders as set forth in the
Pooling Agreement) shall terminate immediately following the occurrence of the
last action required to be taken by the Trustee pursuant to Article IX of the
Pooling Agreement on the Termination Date; provided, however, that in no event
shall the trust created thereby continue beyond the expiration of twenty-one
years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late ambassador of the United States to the United Kingdom, living
on the date of the Pooling Agreement.
Unless the Certificate of Authentication on this Certificate has been
executed by the Trustee or on its behalf by the Authenticating Agent, by manual
signature, this Certificate shall not be entitled to any benefit under the
Pooling Agreement or be valid for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Class R Certificate to be
duly executed.
Dated: October ___, 1998
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Trustee
By:__________________________________________
Authorized Officer
Certificate of Authentication
-----------------------------
This is one of the Class R Certificates referred to in the Pooling
Agreement.
Dated: October ___, 1998
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Authenticating Agent
By:__________________________________________
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned ("Assignor(s)") hereby sell(s),
assign(s) and transfer(s) unto _________________________________________
_______________________________________________________________________ (please
print or typewrite name(s) and address(es), including postal zip code(s) of
assignee(s)) ("Assignee(s)") the entire Percentage Interest represented by the
within Class R Certificate and hereby authorize(s) the registration of transfer
of such interest to Assignee(s) on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Class R
Certificate of the entire Percentage Interest represented by the within Class R
Certificates to the above-named Assignee(s) and to deliver such Class R
Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Date: _________________ _________________________________________________
Signature by or on behalf of
Assignor(s)
-------------------------------------------------
Taxpayer Identification Number
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee(s) should include the following for purposes of
distribution:____________________________________
Address of the Assignee(s) for the purpose of receiving notices and
distributions:____________________________
Distributions, if being made by wire transfer in immediately available
funds to ___________________________ for the account of
_____________________________ account number __________________________.
This information is provided by __________________________ the Assignee(s)
named above, or ________________________________________________ as its (their)
agent.
By: _______________________________________
---------------------------------------
[Please print or type name(s)]
---------------------------------------
Title:
---------------------------------------
Taxpayer Identification Number
<PAGE>
EXHIBIT A-11
Morgan Stanley Capital I Inc.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-XL2, CLASS LR
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE
DEPOSITOR, THE MASTER SERVICER, THE TRUSTEE, THE UNDERWRITER OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THE CERTIFICATES NOR THE UNDERLYING MORTGAGE
LOANS ARE INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW. THE
HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY
BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) PURSUANT TO RULE
144A UNDER THE SECURITIES ACT TO AN INSTITUTIONAL INVESTOR THAT THE HOLDER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER, WITHIN THE MEANING OF
RULE 144A (A "QIB"), WHOM THE HOLDER HAS INFORMED THAT THE REOFFER, RESALE,
PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, AND (B) IN
ACCORDANCE WITH ANY OTHER APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES.
THIS CERTIFICATE OR ANY INTEREST HEREIN SHOULD NOT BE PURCHASED BY A TRANSFEREE
THAT IS (A) AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, INCLUDING
AN INDIVIDUAL RETIREMENT ACCOUNT OR A KEOGH PLAN, WHICH IS SUBJECT TO TITLE I OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A
GOVERNMENTAL PLAN (AS DEFINED IN SECTION 3(32) OF ERISA) THAT IS SUBJECT TO ANY
FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") WHICH IS, TO A MATERIAL EXTENT,
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE (EACH, A "PLAN"), OR
(B) a collective investment fund in which such plans are invested, AN INSURANCE
COMPANY THAT IS USING ASSETS OF SEPARATE ACCOUNTS OR GENERAL ACCOUNTS WHICH
INCLUDE ASSETS OF PLANS (OR WHICH ARE DEEMED PURSUANT TO ERISA OR SIMILAR LAW TO
INCLUDE ASSETS OF PLANS) OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR
USING THE ASSETS OF ANY SUCH PLAN. EACH PROSPECTIVE TRANSFEREE OF THIS
CERTIFICATE WILL BE REQUIRED TO DELIVER TO THE DEPOSITOR, THE CERTIFICATE
REGISTRAR AND THE TRUSTEE A REPRESENTATION LETTER, SUBSTANTIALLY IN THE FORM OF
EXHIBIT D-2 TO THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN, STATING
THAT SUCH PROSPECTIVE TRANSFEREE IS NOT A PERSON REFERRED TO IN CLAUSE (A) OR
(B) ABOVE.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL INTEREST"
IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G(a)(2) AND 860D OF THE CODE. A TRANSFEREE OF THIS
CERTIFICATE, BY ACCEPTANCE HEREOF, IS DEEMED TO HAVE ACCEPTED THIS CERTIFICATE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFERABILITY, AS SET FORTH IN SECTION
5.02(1) OF THE POOLING AND SERVICING AGREEMENT, AND SHALL BE REQUIRED TO FURNISH
AN AFFIDAVIT TO THE TRANSFEROR AND THE TRUSTEE TO THE EFFECT THAT, AMONG OTHER
THINGS, (A) IT IS NOT A DISQUALIFIED ORGANIZATION, AS SUCH TERM IS DEFINED IN
CODE SECTION 860E(e)(5), OR AN AGENT (INCLUDING A BROKER, NOMINEE OR OTHER
MIDDLEMAN) FOR SUCH DISQUALIFIED ORGANIZATION AND IS OTHERWISE A PERMITTED
TRANSFEREE (AS DEFINED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN), (B) IT HAS HISTORICALLY PAID ITS DEBTS AS THEY HAVE COME DUE AND
INTENDS TO CONTINUE TO PAY ITS DEBTS AS THEY COME DUE IN THE FUTURE, AND (C) IT
INTENDS TO PAY ANY TAXES ASSOCIATED WITH HOLDING THIS CERTIFICATE AS THEY BECOME
DUE. ANY PURPORTED TRANSFER TO A DISQUALIFIED ORGANIZATION OR OTHER PERSON THAT
IS NOT A PERMITTED TRANSFEREE OR OTHERWISE IN VIOLATION OF THESE RESTRICTIONS
SHALL BE ABSOLUTELY NULL AND VOID AND SHALL VEST NO RIGHTS IN ANY PURPORTED
TRANSFEREE. IF THIS CERTIFICATE REPRESENTS A "NON-ECONOMIC RESIDUAL INTEREST",
AS DEFINED IN TREASURY REGULATIONS SECTION 1.860E-l(c), TRANSFERS OF THIS
CERTIFICATE MAY BE DISREGARDED FOR FEDERAL INCOME TAX PURPOSES. IN ORDER TO
SATISFY A REGULATORY SAFE HARBOR UNDER WHICH SUCH TRANSFERS WILL NOT BE
DISREGARDED, THE TRANSFEROR MAY BE REQUIRED, AMONG OTHER THINGS, TO SATISFY
ITSELF AS TO THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. THE HOLDER OF
THIS CERTIFICATE, BY ACCEPTANCE HEREOF, IS DEEMED TO HAVE AGREED TO CONSENT TO
ACT AS "TAX MATTERS PERSON" OF THE LOWER-TIER REMIC AND TO THE APPOINTMENT OF
THE TRUSTEE AS ATTORNEY-IN-FACT AND AGENT FOR THE TAX MATTERS PERSON OR AS
OTHERWISE PROVIDED IN THE POOLING AND SERVICING AGREEMENT TO PERFORM THE
FUNCTIONS OF A "TAX MATTERS PERSON" FOR PURPOSES OF SUBCHAPTER C OF CHAPTER 63
OF SUBTITLE F OF THE CODE.
<PAGE>
Morgan Stanley Capital I Inc.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-XL2, CLASS LR
Percentage Interest: 100%
No.:
This certifies that Morgan Stanley & Co. Incorporated is the registered
owner of an interest in a Trust Fund, including the distributions to be made
with respect to the Class LR Certificates. The Trust Fund, described more fully
below, consists primarily of a pool of Mortgage Loans secured by first liens on
commercial properties and held in trust by the Trustee and serviced by the
Master Servicer. The Trust Fund was created, and the Mortgage Loans are to be
serviced, pursuant to the Pooling Agreement (as defined below). The Holder of
this Certificate, by virtue of the acceptance hereof, assents to the terms,
provisions and conditions of the Pooling Agreement and is bound thereby. Also
issued under the Pooling Agreement are the Class A-1, Class A-2, Class X, Class
C, Class D, Class E, Class F, Class Q, and Class R Certificates (together with
the Class LR Certificates, the "Certificates"; the Holders of Certificates
issued under the Pooling Agreement are collectively referred to herein as
"Certificateholders").
This Certificate is issued pursuant to, and in accordance with, the terms
of a Pooling and Servicing Agreement, dated as of October 1, 1998 (the "Pooling
Agreement"), by and among Morgan Stanley Capital I Inc., as Depositor, Midland
Loan Services, Inc., as Master Servicer, Midland Loan Services, Inc., as Special
Servicer and Norwest Bank Minnesota, National Association, as Trustee. To the
extent not defined herein, capitalized terms used herein shall have the meanings
assigned thereto in the Pooling Agreement.
This Certificate represents a "residual interest" in a "real estate
mortgage investment conduit," as those terms are defined, respectively, in
Sections 860G(a)(2) and 860D of the Internal Revenue Code of l986, as amended.
The Trustee makes no representation or warranty as to any of the statements
contained herein or the validity or sufficiency of the Certificates or the
Mortgage Loans and has executed this Certificate in its limited capacity as
Trustee under the Pooling Agreement.
Pursuant to the terms of the Pooling Agreement, the Trustee, or the Paying
Agent on behalf of the Trustee, will distribute (other than the final
distribution on any Certificate), on the third Business Day of each month,
commencing in November 1998 (each such date, a "Distribution Date"), to the
Person in whose name this Certificate is registered as of the related Record
Date, an amount equal to such Person's pro rata share (based on the Percentage
Interest represented by this Certificate) of the aggregate amount, if any,
allocable to the Class LR Certificates for such Distribution Date, all as more
fully described in the Pooling Agreement.
All distributions (other than the final distribution on any Certificate)
will be made by the Paying Agent to the persons in whose names the Certificates
are registered at the close of business on each Record Date, which will be the
close of business on the last day of the month immediately preceding the month
in which such Distribution Date occurs, or if such day is not a Business Day,
the immediately preceding Business Day. Such distributions shall be made on each
Distribution Date other than the Termination Date to each Certificateholder of
record on the related Record Date (a) by wire transfer of immediately available
funds to the account of such Certificateholder at a bank or other entity located
in the United States and having appropriate facilities therefor, if such
Certificateholder provides the Trustee with wiring instructions no less than
five Business Days prior to the related Record Date, or otherwise (b) by check
mailed to such Certificateholder. The final distribution on each Certificate
shall be made in like manner, but only upon presentment and surrender of such
Certificate at the office of the Trustee or its agent (which may be the Paying
Agent or the Certificate Registrar acting as such agent) that is specified in
the notice to Certificateholders of such final distribution.
Any funds not distributed on the Termination Date because of the failure of
any Certificateholders to tender their Certificates shall be set aside and held
in trust for the account of the appropriate non-tendering Certificateholders,
whereupon the Trust Fund shall terminate. If any Certificates as to which notice
of the Termination Date has been given pursuant to Section 9.01 of the Pooling
Agreement shall not have been surrendered for cancellation within six months
after the time specified in such notice, the Trustee shall mail a second notice
to the remaining Certificateholders, at their last addresses shown in the
Certificate Register, to surrender their Certificates for cancellation in order
to receive, from such funds held, the final distribution with respect thereto.
If within one year after the second notice any Certificate shall not have been
surrendered for cancellation, the Trustee may, directly or through an agent,
take appropriate steps to contact the remaining Certificateholders concerning
surrender of their Certificates. The costs and expenses of maintaining such
funds and of contacting Certificateholders shall be paid out of the assets which
remain held. If within two years after the second notice any Certificates shall
not have been surrendered for cancellation, the Paying Agent shall pay to the
Class R Certificateholders all amounts distributable to the Holders thereof. No
interest shall accrue or be payable to any Certificateholder on any amount held
as a result of such Certificateholder's failure to surrender its Certificate(s)
for final payment thereof in accordance with Section 9.01 of the Pooling
Agreement.
This Certificate is limited in right of payment to, among other things,
certain collections and recoveries in respect of the Mortgage Loans, as more
specifically set forth herein and in the Pooling Agreement.
As provided in the Pooling Agreement, the Trust Fund includes (i) such
Mortgage Loans as from time to time are subject to the Pooling Agreement,
together with the Mortgage Files relating thereto; (ii) all scheduled or
unscheduled payments on or collections in respect of the Mortgage Loans due
after the Cut-Off Date; (iii) any REO Property; (iv) all revenues received in
respect of any REO Property; (v) the Master Servicer's, the Special Servicer's
and the Trustee's rights under the insurance policies with respect to the
Mortgage Loans required to be maintained pursuant to the Pooling Agreement and
any proceeds thereof; (vi) any Assignments of Leases, Rents and Profits and any
security agreements; (vii) any indemnities or guaranties given as additional
security for any Mortgage Loans; (viii) the Trustee's rights in all assets
deposited in the Lock-Box Accounts, Cash Collateral Accounts, Escrow Accounts,
Interest Reserve Accounts, Reserve Accounts (to the extent such assets in such
accounts are not assets of the respective Borrowers), (ix) the Collection
Account, the Lower-Tier Distribution Account, the Upper-Tier Distribution
Account, the Deferred Interest Distribution Account, the Class Q Distribution
Account, and any REO Account including reinvestment income thereon; (x) any
environmental indemnity agreements relating to the Mortgaged Properties; (xi)
the rights and remedies under the Loan Sale Agreement; and (xii) the proceeds of
any of the foregoing.
This Certificate does not purport to summarize the Pooling Agreement, and
reference is made to the Pooling Agreement for the interests, rights, benefits,
obligations and duties evidenced hereby, and the limitations thereon, and the
rights, duties and immunities of the Trustee.
As provided in the Pooling Agreement and subject to certain limitations set
forth therein, this Certificate is transferable or exchangeable only upon
surrender of this Certificate to the Certificate Registrar at the Corporate
Trust Office together with an assignment and transfer (executed by the Holder or
his duly authorized attorney), subject to the applicable requirements in Article
V of the Pooling Agreement. Upon surrender for registration of transfer of this
Certificate, subject to the applicable requirements of Article V of the Pooling
Agreement, the Trustee shall execute and the Authenticating Agent shall duly
authenticate in the name of the designated transferee or transferees, one or
more new Certificates in Denominations of a like aggregate Denomination of this
Certificate. Such Certificates shall be delivered by the Certificate Registrar
in accordance with Section 5.02(e) of the Pooling Agreement.
Prior to due presentation of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar, any Paying Agent and any agent of any of them may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and none of the Depositor, the Master Servicer, the Special
Servicer, the Trustee, the Certificate Registrar, any Paying Agent or any agent
of any of them shall be affected by any notice or knowledge to the contrary.
No fee or service shall be imposed by the Certificate Registrar for its
services in respect of any registration of transfer or exchange referred to in
Section 5.02 of the Pooling Agreement other than for transfers to Institutional
Accredited Investors, as also provided therein. In connection with any transfer
to a transferee that is not a QIB, the transferor shall reimburse the Trust Fund
for any costs (including the cost of the Certificate Registrar's counsel's
review of the documents and any legal opinions, submitted by the transferor or
transferee to the Certificate Registrar as provided herein) incurred by the
Certificate Registrar in connection with such transfer. The Certificate
Registrar may require payment by each transferor of a sum sufficient to cover
any tax, expense or other governmental charge payable in connection with any
such transfer.
The Pooling Agreement or any Custodial Agreement may be amended from time
to time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee, without the consent of any of the Certificateholders; (i) to cure any
ambiguity; (ii) to correct or supplement any provisions in the Pooling Agreement
or any Custodial Agreement that may be defective or inconsistent with any other
provisions in such agreement; (iii) to amend any provision thereof to the extent
necessary or desirable to maintain the status of each of the Upper-Tier REMIC,
and Lower-Tier REMIC as a REMIC, or to prevent the imposition of any material
state or local taxes; (iv) to amend or supplement any provisions in either of
such agreements to the extent necessary or desirable to maintain the rating or
ratings assigned to each of the Classes of Certificates by each Rating Agency;
(v) to amend or supplement any provisions in either of such agreements that
shall not adversely affect in any material respect the interests of any
Certificateholder not consenting thereto, as evidenced in writing by an Opinion
of Counsel, at the expense of the party requesting such amendment, or as
evidenced by confirmation in writing from each Rating Agency that such amendment
or supplement will not result in a qualification, withdrawal or downgrading of
the then-current ratings assigned to the Certificates, or (vi) to make any other
provisions with respect to matters or questions arising under the Pooling
Agreement, which shall not be inconsistent with the provisions of the Pooling
Agreement and will not result in a downgrade, qualification or withdrawal of the
then current rating or ratings then assigned to any outstanding Class of
Certificates, as confirmed by each Rating Agency in writing.
Further, the Depositor, the Master Servicer, the Special Servicer and the
Trustee, at any time and from time to time, without the consent of the
Certificateholders, may amend the Pooling Agreement to modify, eliminate or add
to any of its provisions to such extent as shall be necessary to maintain the
qualification of the Trust REMIC as two separate REMICs or of the Grantor Trust
as a grantor trust, or to prevent the imposition of any additional material
state or local taxes, at all times that any Certificates are outstanding;
provided, however, that such action, as evidenced by an Opinion of Counsel
(obtained at the expense of the Trust Fund), is necessary or helpful to maintain
such qualification or to prevent the imposition of any such taxes, and would not
adversely affect in any material respect the interest of any Certificateholder.
The Pooling Agreement or any Custodial Agreement may also be amended from
time to time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee with the consent of the Holders of Certificates evidencing not less than
66-2/3% of the Percentage Interests of each Class of Certificates affected by
the amendment for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Pooling Agreement or any
Custodial Agreement or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such amendment shall:
(i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be
distributed on any Certificate without the consent of all the
Holders of all Certificates representing all Percentage
Interests of the Class or Classes affected thereby;
(ii) change the percentages of Voting Rights of Holders of
Certificates which are required to consent to any action or
inaction under the Pooling Agreement, without the consent of all
the Holders of all Certificates representing all Percentage
Interests of the Class or Classes affected thereby;
(iii) alter the Servicing Standard or the obligations of the Master
Servicer, the Special Servicer or the Trustee to make a P&I
Advance or Property Advance without the consent of the Holders
of all Certificates representing all of the Percentage Interests
of the Class or Classes affected thereby; or
(iv) amend any section of the Pooling Agreement which relates to the
amendment thereof, without the consent of all the Holders of all
Certificates representing all Percentage Interests of the Class
or Classes affected thereby.
The Depositor may effect an early termination of the Trust Fund, upon not
less than 30 days' prior notice given to the Trustee and Master Servicer any
time on or after the Early Termination Notice Date (defined as any date as of
which the aggregate Stated Principal Balance of the Mortgage Loans is less than
1.0% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
Cut-Off Date) specifying the Anticipated Termination Date, by purchasing on such
date all, but not less than all, of the Mortgage Loans then included in the
Trust Fund, and all property acquired in respect of any Mortgage Loan, at a
purchase price, payable in cash, equal to not less than the greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of each Mortgage Loan,
included in the Trust Fund as of the last day of the month
preceding such Distribution Date;
(B) the fair market value of all other property included in the Trust
Fund as of the last day of the month preceding such Distribution
Date, as determined by an Independent appraiser acceptable to the
Master Servicer as of the date not more than 30 days prior to the
last day of the month preceding such Distribution Date;
(C) all unpaid interest accrued on such principal balance of each
such Mortgage Loan (including for this purpose any Mortgage Loan
as to which title to the related Mortgaged Property has been
acquired) at the Mortgage Rate (plus the Excess Rate, to the
extent applicable) to the last day of the Interest Accrual Period
preceding such Distribution Date;
(D) the aggregate amount of unreimbursed Property Advances, and
unpaid Servicing Fees, Special Servicing Compensation, Trustee
Fees and Trust Fund expenses, in each case to the extent
permitted under the Pooling Agreement with interest on all
unreimbursed Advances at the Advance Rate; and
(ii) the aggregate fair market value of the Mortgage Loans, and all other
property acquired in respect of any Mortgage Loan in the Trust Fund,
on the last day of the month preceding such Distribution Date, as
determined by an Independent appraiser acceptable to the Master
Servicer as of a date not more than 30 days prior to the last day of
the month preceding such Distribution Date, together with one month's
interest thereon at the related Mortgage Rates.
The Master Servicer or, if the Master Servicer does not, any Holder of a
Class LR Certificate representing greater than a 50% Percentage Interest in such
Class, may also effect such termination as provided above if it first notifies
the Depositor, or the Depositor and the Master Servicer, respectively, through
the Trustee of its intention to do so in writing at least 30 days prior to the
Early Termination Notice Date and neither the Depositor nor the Master Servicer
as the case may be, terminates the Trust Fund as described above within such
30-day period. All costs and expenses incurred by any and all parties to this
Agreement or by the Trust Fund in connection with the purchase of the Mortgage
Loans and other assets of the Trust Fund pursuant to Section 9.01(c) of the
Pooling Agreement shall be borne by the party exercising its purchase rights
hereunder. The Trustee shall be entitled to rely conclusively on any
determination made by an Independent appraiser pursuant to Section 9.01(c) of
the Pooling Agreement.
The respective obligations and responsibilities of the Master Servicer, the
Special Servicer, the Depositor and the Trustee created by the Pooling Agreement
with respect to the Certificates (other than the obligation to make certain
payments and to send certain notices to Certificateholders as set forth in the
Pooling Agreement) shall terminate immediately following the occurrence of the
last action required to be taken by the Trustee pursuant to Article IX of the
Pooling Agreement on the Termination Date; provided, however, that in no event
shall the trust created thereby continue beyond the expiration of twenty-one
years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late ambassador of the United States to the United Kingdom, living
on the date of the Pooling Agreement.
Unless the Certificate of Authentication on this Certificate has been
executed by the Trustee or on its behalf by the Authenticating Agent, by manual
signature, this Certificate shall not be entitled to any benefit under the
Pooling Agreement or be valid for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Class LR Certificate to be
duly executed.
Dated: October ___, 1998
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Trustee
By:__________________________________________
Authorized Officer
Certificate of Authentication
-----------------------------
This is one of the Class LR Certificates referred to in the Pooling
Agreement.
Dated: October ___, 1998
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Authenticating Agent
By:__________________________________________
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned ("Assignor(s)") hereby sell(s),
assign(s) and transfer(s) unto _________________________________________
_______________________________________________________________________ (please
print or typewrite name(s) and address(es), including postal zip code(s) of
assignee(s)) ("Assignee(s)") the entire Percentage Interest represented by the
within Class LR Certificate and hereby authorize(s) the registration of transfer
of such interest to Assignee(s) on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Class LR
Certificate of the entire Percentage Interest represented by the within Class LR
Certificates to the above-named Assignee(s) and to deliver such Class LR
Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Date: _________________ ________________________________________________
Signature by or on behalf of
Assignor(s)
------------------------------------------------
Taxpayer Identification Number
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee(s) should include the following for purposes of
distribution:____________________________________
Address of the Assignee(s) for the purpose of receiving notices and
distributions:____________________________
Distributions, if being made by wire transfer in immediately available
funds to ___________________________ for the account of
_____________________________ account number __________________________.
This information is provided by __________________________ the Assignee(s)
named above, or ________________________________________________ as its (their)
agent.
By: ________________________________________
----------------------------------------
[Please print or type name(s)]
----------------------------------------
Title:
----------------------------------------
Taxpayer Identification Number
<PAGE>
EXHIBIT B
MORTGAGE LOAN SCHEDULE
<TABLE>
<CAPTION>
Loan Revised Net Servicing Day Count Cut-Off
Number Loan Name Mortgage Rate Default Rate Excess Rate Mortgage Rate Mortgage Rate Fee Rate Convention LTV
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 Grapevine Mills 6.470% 9.470% 2.0% 8.470% 6.442% 0.028% Actual/360 61.7%
2 Edens & Avant Pool I 6.200% 11.200% 2.0% 8.200% 6.172% 0.028% Actual/360 47.1%
3 Mall of New Hampshire 6.955% 11.955% 5.0% 11.955% 6.927% 0.028% Actual/360 65.2%
4 Westside Pavilion 6.440% 9.440% 2.0% 8.440% 6.412% 0.028% Actual/360 62.5%
5 NorthTown Mall 6.680% 11.680% 2.0% 8.680% 6.652% 0.028% Actual/360 58.5%
6 Edens & Avant Pool II 6.200% 11.200% 2.0% 8.200% 6.172% 0.028% Actual/360 48.8%
7 Crystal Park IV 6.510% 11.510% 4.0% 10.510% 6.482% 0.028% Actual/360 62.7%
</TABLE>
Number of
Properties
1
15
1
1
1
21
1
<TABLE>
<CAPTION>
Cut-Off Original Remaining
Original Date Term Term
Loan Principal Principal to to
Number Loan Name Borrower Balance Balance EMD EMD
<S> <C> <C> <C> <C> <C> <C>
1 Grapevine Mills Grapevine Mills Limited Partnership 155,000,000 155,000,000 121 120
2 Edens & Avant Pool I E&A Northeast Limited Partnership 125,000,000 125,000,000 120 120
3 Mall of New Hampshire MNH Mall L.L.C. 105,000,000 105,000,000 126 120
4 Westside Pavilion Macerich Westside Limited Partnership 100,000,000 100,000,000 120 117
5 NorthTown Mall Price Spokane Limited Partnership 84,500,000 84,426,244 120 119
6 Edens & Avant Pool II E&A Southeast Limited Partnership 70,000,000 70,000,000 120 120
7 Crystal Park IV Fourth Crystal Park Associates Limited Partnership 67,100,000 67,039,458 120 119
</TABLE>
Original Remaining Current P&I
Amort Term Amort Term Monthly Payment(1) Monthly Payment(2)
360 360 $847,315.39 $976,649.36
IO IO $654,803.24 NA(3)
360 360 $617,014.76 $695,397.21
360 360 $544,120.37 $628,127.29
360 359 $544,139.35 $544,139.35
IO IO $366,689.81 NA(3)
360 359 $424,559.02 $424,559.02
(1) Current monthly payments are Interest Only for Grapevine Mills, Edens &
Avant Pools I and II, and Mall of New Hampshire, and Westside Pavilion.
(2) Amortization begins on October 1, 2002 for Grapevine Mills, Novermber 1,
1999 for Mall of New Hampshire, and August 1, 2001 for Westside Pavilion.
(3) Interest Only until EMD.
<PAGE>
EXHIBIT C-1
AFFIDAVIT PURSUANT TO SECTION 860E(e)(4) OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
_______________________, being first duly sworn, deposes and says:
1. That he/she is a ___________________ of _____________________ (the
"Purchaser"), a _______________ duly organized and existing under the laws of
the State of _____________, on behalf of which he makes this affidavit.
2. That the Purchaser's Taxpayer Identification Number is ________________.
3. That the Purchaser of the Morgan Stanley Capital I Inc., Commercial
Mortgage Pass-Through Certificates, Series 1998-XL2, Class [R] [LR] (the "Class
[R] [LR] Certificate") is a Permitted Transferee (as defined in Article I of the
Pooling and Servicing Agreement, dated as of October 1, 1998, by and among
Morgan Stanley Capital I Inc., as Depositor, Midland Loan Services, Inc., as
Master Servicer, Midland Loan Services, Inc., as Special Servicer and Norwest
Bank Minnesota, National Association, as Trustee (the "Pooling and Servicing
Agreement"), or is acquiring the Class [R] [LR] Certificate for the account of,
or as agent (including as a broker, nominee, or other middleman) for, a
Permitted Transferee and has received from such person or entity an affidavit
substantially in the form of this affidavit.
4. That the Purchaser historically has paid its debts as they have come due
and intends to pay its debts as they come due in the future and the Purchaser
intends to pay taxes associated with holding the Class [R] [LR] Certificate as
they become due.
5. That the Purchaser understands that it may incur tax liabilities with
respect to the Class [R] [LR] Certificate in excess of any cash flow generated
by the Class [R] [LR] Certificate.
6. That the Purchaser will not transfer the Class [R] [LR] Certificate to
any person or entity from which the Purchaser has not received an affidavit
substantially in the form of this affidavit or as to which the Purchaser has
actual knowledge that the requirements set forth in paragraph 3, paragraph 4 or
paragraph 7 hereof are not satisfied or that the Purchaser has reason to know
does not satisfy the requirements set forth in paragraph 4 hereof.
7. That the Purchaser is not a Disqualified Non-U.S. Person and is not
purchasing the Class [R] [LR] Certificate for the account of, or as an agent
(including as a broker, nominee or other middleman) for, a Disqualified Non-U.S.
Person.
8. That the Purchaser agrees to such amendments of the Pooling and
Servicing Agreement as may be required to further effectuate the restrictions on
transfer of the Class [R] [LR] Certificate to such a "disqualified
organization," an agent thereof, or a person that does not satisfy the
requirements of paragraph 4 and paragraph 7 hereof.
9. That, if a "tax matters person" is required to be designated with
respect to the [Upper-Tier REMIC] [Lower-Tier REMIC], the Purchaser agrees to
act as "tax matters person" and to perform the functions of "tax matters person"
of the [Upper-Tier REMIC] [Lower-Tier REMIC] pursuant to Section 4.04 of the
Pooling and Servicing Agreement, and agrees to the irrevocable designation of
the Trustee as the Purchaser's agent in performing the function of "tax matters
person."
10. The Purchaser agrees to be bound by and to abide by the provisions of
Section 5.02 of the Pooling and Servicing Agreement concerning registration of
the transfer and exchange of the Class [R] [LR] Certificate.
Capitalized terms used but not defined herein have the respective meanings
ascribed to such terms in the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be executed
on its behalf by its ____________________ this ___th day of __________, 199__.
[Purchaser]
By:
----------------------------
Title:
-------------------------
Name:
--------------------------
<PAGE>
The above-named ___________________ personally appeared before me and is
known or proved to me to be the same person who executed the foregoing
instrument and to be the _________________ of the Purchaser, and acknowledged to
me that he/she executed the same as his/her free act and deed and the free act
and deed of the Purchaser.
Subscribed and sworn before me this __th day of _________________, 199_.
NOTARY PUBLIC
COUNTY OF
STATE OF
My commission expires the __th day of
_______________, 199_.
<PAGE>
EXHIBIT C-2
FORM OF TRANSFEROR LETTER
[Date]
[CERTIFICATE REGISTRAR]
Re: Morgan Stanley Capital I Inc., Commercial Mortgage
Pass-Through Certificates, Series 1998-XL2
Ladies and Gentlemen:
[Transferor] has reviewed the attached affidavit of [Transferee], and has
no actual knowledge that such affidavit is not true and has no reason to know
that the information contained in paragraph 4 thereof is not true.
Very truly yours,
------------------
<PAGE>
EXHIBIT D-1
FORM OF INVESTMENT REPRESENTATION LETTER
Norwest Bank Minnesota, National Association, as Trustee
and Certificate Registrar
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479-1026
Attention: Corporate Trust Services (CMBS)--
Morgan Stanley Capital I Inc., Series 1998-XL2
Morgan Stanley Capital I Inc.
1585 Broadway
New York, New York 10036
Attention:________________
Re: Transfer of Morgan Stanley Capital I Inc., Commercial
Mortgage Pass-Through Certificates, Series 1998-XL2,
Class[ ]
Ladies and Gentlemen:
This letter is delivered pursuant to Section 5.02 of the Pooling and
Servicing Agreement, dated as of October 1, 1998 (the "Pooling and Servicing
Agreement"), by and among Morgan Stanley Capital I Inc., as Depositor, Midland
Loan Services, Inc., as Master Servicer, Midland Loan Services, Inc., as Special
Servicer and Norwest Bank Minnesota, National Association, as Trustee, on behalf
of the holders of Morgan Stanley Capital I Inc., Commercial Mortgage
Pass-Through Certificates, Series 1998-XL2 (the "Certificates") in connection
with the transfer by ________________ (the "Seller") to the undersigned (the
"Purchaser") of $_______________ aggregate Certificate Principal Amount of Class
[_] Certificates, in certificated fully registered form, or, if applicable, a
beneficial interest of such aggregate Certificate Principal Amount in a Private
Global Certificate (either such interest, the "Transferred Interest"). Terms
used but not defined herein shall have the meanings ascribed thereto in the
Pooling and Servicing Agreement.
In connection with such transfer, the undersigned hereby represents and
warrants to you as follows:
[[For Institutional Accredited Investors only.]
1. We are an "institutional accredited investor" (an entity meeting the
requirements of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act (as defined below)) and have such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of our investment in the Transferred Interest, and we and any accounts for
which we are acting are each able to bear the economic risk of our or its
investment. We are acquiring the Transferred Interest purchased by us for our
own account or for one or more accounts (each of which is an "institutional
accredited investor") as to each of which we exercise sole investment
discretion. The Purchaser hereby undertakes to reimburse the Trust for any costs
incurred by it in connection with this transfer.]
[[For Qualified Institutional Buyers only.]
1. The Purchaser is a "qualified institutional buyer" within the meaning of
Rule 144A (as defined below) promulgated under the Securities Act (as defined
below). The Purchaser is aware that the transfer is being made in reliance on
Rule 144A, and the Purchaser has had the opportunity to obtain the information
required to be provided pursuant to paragraph (d)(4)(i) of Rule 144A.]
2. The Purchaser's intention is to acquire the Transferred Interest (a) for
investment for the Purchaser's own account or (b) for resale to (i) "qualified
institutional buyers" in transactions under Rule 144A ("Rule 144A") promulgated
under the Securities Act of 1933 (the "Securities Act") or (ii) to
"institutional accredited investors" meeting the requirements of Rule 501(a)(1),
(2), (3) or (7) of Regulation D promulgated under the Securities Act, if the
Purchaser is a "qualified institutional buyer", or pursuant to an exemption from
the registration requirements of the Securities Act provided by Rule 144A under
the Securities Act (if applicable), subject in the case of this clause (ii) and
to (a) the receipt by the Certificate Registrar of a letter substantially in the
form hereof, (b) the receipt by the Certificate Registrar of an opinion of
counsel acceptable to the Certificate Registrar that such reoffer, resale,
pledge or transfer is in compliance with the Securities Act, and (c) a written
undertaking to reimburse the Trust for any costs incurred by it in connection
with the proposed transfer. It understands that the Transferred Interest has not
been registered under the Securities Act, by reason of a specified exemption
from the registration provisions of the Securities Act which may depend upon,
among other things, the bona fide nature of the Purchaser's investment intent
(or intent to resell to only certain investors in certain exempted transactions)
as expressed herein.
3. The Purchaser acknowledges that the Transferred Interest has not been
registered or qualified under the Securities Act or the securities laws of any
State or any other jurisdiction, and that the Transferred Interest cannot be
resold unless it is registered or qualified thereunder or unless an exemption
from such registration or qualification is available.
4. The Purchaser hereby undertakes to be bound by the terms and conditions
of the Pooling and Servicing Agreement in its capacity as an owner of the
Transferred Interest in all respects as if it were a signatory thereto. This
undertaking is made for the benefit of the Trust, the Certificate Registrar and
all Certificateholders present and future.
5. The Purchaser will not sell or otherwise transfer any portion of the
Transferred Interest, except in compliance with Section 5.02 of the Pooling and
Servicing Agreement.
6. Check one of the following:*
_______ The Purchaser is a "U.S. Person" and it has attached hereto an
Internal Revenue Service ("IRS") Form W-9 (or successor form).
_______ The Purchaser is not a "U.S. Person" and under applicable law in
effect on the date hereof, no Taxes will be required to be withheld by the
Certificate Registrar (or its agent) with respect to Distributions to be made on
the Transferred Interest. The Purchaser has attached hereto either (i) a duly
executed IRS Form W-8 (or successor form), which identifies such Purchaser as
the beneficial owner of the Transferred Interest and states that such Purchaser
is not a U.S. Person or (ii) two duly executed copies of IRS Form 4224 (or
successor form), which identify such Purchaser as the beneficial owner of the
Transferred Interest and state that interest and original issue discount on the
Transferred Interest is, or is expected to be, effectively connected with a U.S.
trade or business. The Purchaser agrees to provide to the Certificate Registrar
updated IRS Forms W-8 or IRS Forms 4224, as the case may be, any applicable
successor IRS forms, or such other certifications as the Certificate Registrar
may reasonably request, on or before the date that any such IRS form or
certification expires or becomes obsolete, or promptly after the occurrence of
any event requiring a change in the most recent IRS form of certification
furnished by it to the Certificate Registrar.
For this purpose, "U.S. Person" means a citizen or resident of the United
States for U.S. federal income tax purposes, a corporation, partnership (except
to the extent provided in applicable Treasury regulations) or other entity
created or organized in or under the laws of the United States or any of its
political subdivisions, or an estate the income of which is subject to U.S.
federal income taxation regardless of its source or a trust if a court within
the United States is able to exercise privacy supervision over the
administration of the trust and one or more such U.S. Persons have the authority
to control all substantial decisions of the trust (or, to the extent provided in
applicable Treasury regulations, certain trusts in existence on August 20, 1996
which are eligible to elect to be treated as U.S. Persons.
- ----------
*Each Purchaser must include one of the two alternative certifications.
<PAGE>
Please make all payments due on the Transferred Interests:**
______ (a) by wire transfer to the following account at a bank or entity in
New York, New York, having appropriate facilities therefor:
Account number __________ Institution ___________
______ (b) by mailing a check or draft to the following address:
-------------------------
-------------------------
-------------------------
-------------------------
-------------------------
----------
Very truly yours,
[The Purchaser]
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
- ------------
**Only to be filled out by Purchasers of Individual Certificates. Please select
(a) or (b).
<PAGE>
EXHIBIT D-2
FORM OF ERISA REPRESENTATION LETTER
Norwest Bank Minnesota, National Association, as Trustee
and Certificate Registrar
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479-1026
Attention: Corporate Trust Services (CMBS)--
Morgan Stanley Capital I Inc., Series 1998-XL2
Morgan Stanley Capital I Inc.
1585 Broadway
New York, New York 10036
Attention:________________
Re: Morgan Stanley Capital I Inc., Commercial Mortgage
Pass-Through Certificates, Series 1998-XL2, Class[ ]
Ladies and Gentlemen:
__________________________ (the "Purchaser") intends to purchase from
____________________ (the "Seller") $_____________ initial Certificate Principal
Amount or _____% Percentage Interest of Morgan Stanley Capital I Inc.,
Commercial Mortgage Pass-Through Certificates, Series 1998-XL2, Class [_], CUSIP
No. [____] (the "Certificates"), issued pursuant to the Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement"), dated as of October 1, 1998,
by and among Morgan Stanley Capital I Inc., as Depositor, Midland Loan Services,
Inc., as Master Servicer, Midland Loan Services, Inc., as Special Servicer and
Norwest Bank Minnesota, National Association, as Trustee. All capitalized terms
used herein and not otherwise defined shall have the meaning set forth in the
Pooling and Servicing Agreement.
The Purchaser hereby certifies, represents and warrants to, and covenants
with, the Seller, the Certificate Registrar and the Trustee that:
1. The Purchaser is neither (a) an employee benefit plan or other
retirement arrangement, including an individual retirement account or a Keogh
plan, which is subject to Title I of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), or Section 4975 of the Code, or a governmental
plan (as defined in Section 3(32) of ERISA) that is subject to any Federal,
State or local law (a "Similar Law"), which is to a material extent, similar to
the foregoing provisions of ERISA or the Code (each, a "Plan"), nor (b) a
collective investment fund in which such Plans are invested, an insurance
company using assets of separate accounts or general accounts which include
assets of Plans (or which are deemed pursuant to ERISA or any Similar Law to
include assets of Plans) or other Person acting on behalf of any such Plan or
using the assets of any such Plan, other than (with respect to any transfer of a
Class B, Class C, Class D, or Class F Certificate) an insurance company using
assets of its general account under circumstances whereby such purchase and the
subsequent holding of such Certificate by such insurance company would be exempt
from the prohibited transaction provisions of ERISA and Section 4975 of the Code
under Prohibited Transaction Class Exemption 95-60.
2. The Purchaser understands that if the Purchaser is a Person referred to
in 1(a) or 1(b) above, except in the case of the Class R or Class LR
Certificates, which may not be transferred unless the transferee represents it
is not such a Person, such Purchaser is required to provide to the Seller, the
Trustee and the Certificate Registrar an Opinion of Counsel in form and
substance satisfactory to of the Seller, the Trustee and the Certificate
Registrar that the purchase or holding of the Certificates will not result in
the assets of the Trust Fund being deemed to be "plan assets" and subject to
Title I of ERISA, Section 4975 of the Code or Similar Law, will not constitute
or result in a prohibited transaction within the meaning of ERISA or Section
4975 of the Code or a materially similar characterization under any Similar Law,
and will not subject the Master Servicer, the Special Servicer, the Seller, the
Trustee or the Certificate Registrar to any obligation or liability (including
obligations or liabilities under ERISA, Section 4975 of the Code or Similar Law)
in addition to those set forth in the Pooling and Servicing Agreement, which
Opinion of Counsel shall not be at the expense of the Trust Fund, the Master
Servicer, the Seller, the Trustee or the Certificate Registrar.
<PAGE>
IN WITNESS WHEREOF, the Purchaser hereby executes the ERISA Representation
Letter on ______________ __, 19__.
Very truly yours,
-----------------------------
By:
--------------------------
Name:
------------------------
Title:
-----------------------
<PAGE>
EXHIBIT E
FORM OF REQUEST FOR RELEASE
(for Trustee/Custodian)
Loan Information:
Name of Mortgagor: __________________
Master Servicer Loan No.: __________________
Custodian/Trustee
Name: __________________
Address: __________________
__________________
Custodian/Trustee Mortgage File No.: __________________
[Seller]
Name: __________________
Address: __________________
__________________
Certificates: Morgan Stanley Capital I Inc., Commercial
Mortgage Pass-Through Certificates, Series 1998-XL2
The undersigned Master Servicer hereby acknowledges that it has received
from Norwest Bank Minnesota, National Association, as Trustee for the Holders of
Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through Certificates,
Series 1998-XL2, the documents referred to below (the "Documents"). All
capitalized terms not otherwise defined in this Request for Release shall have
the meanings given them in the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of October 1, 1998, by and among the Trustee,
Morgan Stanley Capital I Inc., as Depositor, Midland Loan Services, Inc., as
Master Servicer and Midland Loan Services, Inc., as Special Servicer.
( ) Promissory Note dated _________, 199__, in the original principal sum
of $_____, made by _______, payable to, or endorsed to the order of, the
Trustee.
( ) Mortgage recorded on ____________ as instrument no. ________ in the
County Recorder's Office of the County of _________, State of ___________ in
book/reel/docket ___________ of official records at page/image ________.
( ) Deed of Trust recorded on __________ as instrument no. ________ in the
County Recorder's Office of the County of ___________, State of _______ in
book/reel/docket ____________ of official records at page/image.
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
_____________ as instrument no. _______ in the County Recorder's Office of the
County of _________, State of _______ in book/reel/docket __________ of official
records at page/image _____________.
( ) Other documents, including any amendments, assignments or other
assumptions of the Note or Mortgage.
( ) ---------------------------
( ) ---------------------------
( ) ---------------------------
( ) ---------------------------
The undersigned Master Servicer hereby acknowledges and agrees as follows:
(1) The Master Servicer shall hold and retain possession of the Documents
in trust for the benefit of the Trustee, solely for the purposes provided in the
Agreement.
(2) The Master Servicer shall not cause or permit the Documents to become
subject to, or encumbered by, any claim, liens, security interest, charges,
writs of attachment or other impositions nor shall the Master Servicer assert or
seek to assert any claims or rights of set-off to or against the Documents or
any proceeds thereof.
(3) The Master Servicer shall return the Documents to the Custodian when
the need therefor no longer exists, unless the Mortgage Loan relating to the
Documents has been liquidated and the proceeds thereof have been remitted to the
Collection Account and except as expressly provided in the Agreement.
(4) The Documents and any proceeds thereof, including any proceeds of
proceeds, coming into the possession or control of the Master Servicer shall at
all times be earmarked for the account of the Trustee, and the Master Servicer
shall keep the Documents and any proceeds separate and distinct from all other
property in the Master Servicer's possession, custody or control.
MIDLAND LOAN SERVICES, INC.
By:
----------------------------
Title:
-------------------------
Date: _______________ __, 19__
<PAGE>
EXHIBIT F
SECURITIES LEGEND
Subject to the Pooling and Servicing Agreement, the Rule 144A Global
Certificates, Residual Certificates and Individual Certificates will bear a
legend (the "Securities Legend") to the following effect, unless the Certificate
Registrar determines otherwise in accordance with applicable law:
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW. THE
HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY
BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A)(1) PURSUANT TO
RULE 144A UNDER THE SECURITIES ACT TO AN INSTITUTIONAL INVESTOR THAT THE HOLDER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER, WITHIN THE MEANING OF
RULE 144A (A "QIB"), WHOM THE HOLDER HAS INFORMED THAT THE REOFFER, RESALE,
PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2) TO AN
INSTITUTIONAL INVESTOR THAT IS, OR ALL THE EQUITY OWNERS OF WHICH ARE,
INSTITUTIONAL "ACCREDITED INVESTORS" AS SUCH TERM IS DEFINED IN RULE
501(A)(1),(2),(3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT PURSUANT TO AN
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 (IF AVAILABLE) OR (3) BY AN
INITIAL INVESTOR THAT IS A QIB, TO AN INSTITUTIONAL ACCREDITED INVESTOR AND (B)
IN ACCORDANCE WITH ANY OTHER APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES.
Notwithstanding anything to the contrary, the Residual Certificates will
not bear clause (A)(2) and clause (A)(3) of the Securities Legend.
<PAGE>
EXHIBIT G
LOAN SALE AGREEMENT
This Loan Sale Agreement, dated as of October 1, 1998 (the "Agreement"), is
between Morgan Stanley Capital I Inc., a Delaware corporation (the "Depositor"),
and Morgan Stanley Mortgage Capital Inc., a New York corporation (the "Mortgage
Loan Seller"). The Mortgage Loan Seller agrees to sell, and the Depositor agrees
to purchase the mortgage loans (the "Mortgage Loans") described and set forth in
the mortgage loan schedule attached as Exhibit A to this Agreement (the
"Mortgage Loan Schedule"). The Mortgage Loans were originated by Secore
Financial Corporation, a Pennsylvania corporation (the "Originator"), and the
Mortgage Loan Seller acquired each of the Mortgage Loans on or prior to the
Closing Date. The Depositor intends to deposit the Mortgage Loans and other
assets into a trust (the "Trust") and cause the creation of a series of
certificates to be known as Morgan Stanley Capital I Inc., Commercial Mortgage
Pass-Through Certificates, Series 1998-XL2 (the "Certificates"), evidencing
beneficial ownership interests in the Mortgage Loans and the other assets, under
a Pooling and Servicing Agreement, to be dated as of October 1, 1998 (the
"Pooling and Servicing Agreement"), among the Depositor, as seller, Midland Loan
Services, Inc., as master servicer (in such capacity, the "Master Servicer"),
Midland Loan Services, Inc., as special servicer (in such capacity, the "Special
Servicer") and Norwest Bank Minnesota, National Association, as trustee (the
"Trustee"). Capitalized terms used but not otherwise defined herein shall have
the respective meanings ascribed to them in the Pooling and Servicing Agreement.
1. Purchase Price; Purchase and Sale. The purchase price (the "Purchase
Price") for the Mortgage Loans shall be an amount equal to 101.1%, multiplied by
the aggregate principal balance of the Mortgage Loans as of October 1, 1998 (the
"Cut-Off Date"), after application of scheduled payments of principal due on or
before the Cut-Off Date whether or not collected. In addition to the Purchase
Price as described above, the Depositor shall pay to the Mortgage Loan Seller,
at closing, accrued interest on the initial principal amount of the related
Mortgage Loans at the weighted average Mortgage Rate of those Mortgage Loans,
net of interest at the related Servicing Fee Rate. The portion of such accrued
interest that accrues at the Servicing Fee Rate is required by the Pooling and
Servicing Agreement to be remitted by the Master Servicer, within one Business
Day after its receipt of such accrued interest, to or at the direction of the
Depositor. The Depositor hereby agrees to direct the Master Servicer to remit
such portion of accrued interest to the Mortgage Loan Seller. The Purchase Price
amount shall be payable by the Depositor to the Mortgage Loan Seller on October
15, 1998 (the "Closing Date") in immediately available federal funds. The
closing for the purchase and sale of the Mortgage Loans shall take place at the
offices of Cadwalader, Wickersham & Taft, New York, New York, at 10:00 a.m. (New
York time), on the Closing Date.
On the Closing Date, the Mortgage Loan Seller shall and does hereby sell,
transfer, assign, set over and convey to the Depositor, and the Depositor shall
and does hereby purchase all the right, title and interest of the Mortgage Loan
Seller in and to the Mortgage Loans, including all interest and principal due on
or with respect to the Mortgage Loans after the Cut-Off Date, together with all
of the Mortgage Loan Seller's right, title and interest in and to the proceeds
of any related title, hazard, primary mortgage or other insurance policies and
any related interest rate cap agreement. The Depositor hereby directs the
Mortgage Loan Seller, and the Mortgage Loan Seller hereby agrees, to deliver to
the Trustee all documents, instruments and agreements required to be delivered
by the Depositor to the Trustee under Section 2.01 of the Pooling and Servicing
Agreement, and meeting all the requirements of such Section 2.01, and such other
documents, instruments and agreements as the Depositor or the Trustee shall
reasonably request.
2. Representations and Warranties.
(a) The Mortgage Loan Seller hereby represents and warrants to the
Depositor as of the date hereof and as of the Closing Date that:
(i) The Mortgage Loan Seller is a New York corporation duly organized,
validly existing and in good standing under the laws of the State of
New York, with full power and authority to own its assets and conduct
its business, is duly qualified as a foreign partnership in good
standing in all jurisdictions in which the ownership or lease of its
property or the conduct of its business requires such qualification,
except where the failure to be so qualified would not have a material
adverse effect on its ability to perform its obligations hereunder,
and the Mortgage Loan Seller has taken all necessary action to
authorize the execution, delivery and performance of this Agreement by
it, and has the power and authority to execute, deliver and perform
under this Agreement and all the transactions contemplated hereby,
including, but not limited to, the power and authority to sell,
assign, transfer, set over and convey the Mortgage Loans in accordance
with this Agreement;
(ii) This Agreement has been duly authorized, executed and delivered by the
Mortgage Loan Seller and assuming its due authorization, execution and
delivery by the Depositor, will constitute a legal, valid and binding
obligation of the Mortgage Loan Seller, enforceable against the
Mortgage Loan Seller in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally, and by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law);
(iii)The execution and delivery of this Agreement by the Mortgage Loan
Seller and the performance of its obligations hereunder will not
conflict with any provision of any law or regulation to which the
Mortgage Loan Seller is subject, or conflict with, result in a breach
of, or constitute a default under, any of the terms, conditions or
provisions of any of the Mortgage Loan Seller's organizational
documents or any agreement or instrument to which the Mortgage Loan
Seller is a party or by which it is bound, or any order or decree
applicable to the Mortgage Loan Seller, or result in the creation or
imposition of any lien on any of the Mortgage Loan Seller's assets or
property, in each case which would materially and adversely affect the
ability of the Mortgage Loan Seller to carry out the transactions
contemplated by this Agreement;
(iv) There is no action, suit, proceeding or investigation pending or, to
the Mortgage Loan Seller's knowledge, threatened against the Mortgage
Loan Seller in any court or by or before any other governmental agency
or instrumentality which would materially and adversely affect the
validity of the Mortgage Loans or the ability of the Mortgage Loan
Seller to carry out the transactions contemplated by this Agreement;
(v) The Mortgage Loan Seller is not in default with respect to any order
or decree of any court or any order, regulation or demand of any
federal, state, municipal or governmental agency, which default might
have consequences that would materially and adversely affect the
condition (financial or other) or operations of the Mortgage Loan
Seller or its properties or might have consequences that would
materially and adversely affect its performance hereunder;
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and performance by the Mortgage Loan Seller of, or compliance by the
Mortgage Loan Seller with, this Agreement or the consummation of the
transactions contemplated hereby, other than those which have been
obtained by the Mortgage Loan Seller; and
(vii)The transfer, assignment and conveyance of the Mortgage Loans by the
Mortgage Loan Seller to the Depositor is not subject to bulk transfer
laws or any similar statutory provisions in effect in any applicable
jurisdiction.
(b) The Mortgage Loan Seller hereby represents and warrants with respect to
each Mortgage Loan that, as of the date specified below or, if no such date is
specified, as of the Closing Date (except as may be specified in the related
representation and warranty or on Schedule 1 hereto):
(i) The information set forth in the mortgage loan schedule attached to
the Loan Sale Agreement as to the Mortgage Loan is complete, true and
correct in all material respects;
(ii) The Mortgage Loan Seller is the sole owner and holder of the Mortgage
Loan and has good and marketable title thereto, has full right, power
and authority to sell and assign such Mortgage Loan free and clear of
any interest or claim of a third party;
(iii)The Mortgage Loan has not been since the date of origination by the
applicable Originator, and currently is not, thirty or more days
delinquent, and the mortgagor is not in default thereunder beyond any
applicable grace period for the payment of any obligation to pay
principal and interest, taxes, insurance premiums and required
reserves;
(iv) The Mortgage Loan Seller has not advanced funds, or knowingly received
any advance of funds from a party other than the mortgagor subject to
the related Mortgage, directly or indirectly, for the payment of any
amount required by the Mortgage Loan;
(v) (A) The Mortgage Loan documents have been duly and properly executed,
and (B) the Mortgage Loan documents are legal, valid and binding
obligations of the mortgagor, and their terms are enforceable against
the mortgagor, subject only to bankruptcy, insolvency, moratorium,
fraudulent transfer, fraudulent conveyance and similar laws affecting
rights of creditors generally and to the application of general
principles of equity and there is no valid defense, counterclaim, or
right of rescission or right of set-off or abatement available to any
mortgagor under the Mortgage Loan documents;
(vi) The lien of each Mortgage is insured by an ALTA lender's title
insurance policy or its equivalent as adopted in the applicable
jurisdiction issued by one or more nationally recognized title
insurance companies, insuring the Originator, its successors and
assigns, as to the first priority lien of the Mortgage in the original
principal amount of the Mortgage Loan after all advances of principal,
subject only to (a) the lien of current real property taxes, ground
rents, water charges, sewer rents and assessments not yet due and
payable, (b) covenants, conditions and restrictions, rights of way,
easements and other matters of public record, none of which,
individually or in the aggregate, in the reasonable judgment of the
Mortgage Loan Seller, materially interferes with the current use of
the related Mortgaged Property or the security intended to be provided
by such Mortgage or with the mortgagor's ability to pay its
obligations when they become due or the value of the related Mortgaged
Property and (c) the exceptions (general and specific) set forth in
such policy, none of which, individually or in the aggregate, in the
reasonable judgment of the Mortgage Loan Seller, materially interferes
with the current use of the related Mortgaged Property or security
intended to be provided by such Mortgage, with the mortgagor's ability
to pay its obligations when they become due or the value of the
related Mortgaged Property (or if a title insurance policy has not yet
been issued in respect of the Mortgage Loan, a policy meeting the
foregoing description is evidenced by a commitment for title insurance
"marked-up" at the closing of the Mortgage Loan) and none of which
relate to matters on the survey of the related Mortgaged Property
which are material. To the actual knowledge of the Mortgage Loan
Seller, no material claims have been made under such title policy;
(vii)As of the date of origination of the Mortgage Loan there were no, and
to the best knowledge of the Mortgage Loan Seller there are no,
mechanics', materialman's or other similar liens or claims which have
been filed for work, labor or materials affecting the Mortgaged
Property which are or may be liens prior to, or equal or coordinate
with, the lien of the Mortgage, unless such lien is insured against
under the related title insurance policy;
(viii) (A) Each building or other improvement located on any Mortgaged
Property is insured by a fire and extended perils insurance policy,
issued by an insurer or reinsured by an insurer meeting the
requirements of the Mortgage Loan documents, in an amount not less
than the replacement cost of the Mortgaged Property; each Mortgaged
Property was also covered by business interruption insurance for a
period of not less than twelve months and comprehensive general
liability insurance in amounts generally required by institutional
lenders for similar properties; all premiums on such insurance
policies required to be paid as of the date hereof have been paid;
such insurance policies require prior notice to the insured of
termination or cancellation, and no such notice has been received; and
(B) the loan documents obligate the mortgagor to maintain all such
insurance and, at the mortgagor's failure to do so, authorize the
mortgagee to maintain such insurance at the mortgagor's cost and
expense and to seek reimbursement therefor from such mortgagor;
(ix) As of the most recent date of inspection of each Mortgaged Property by
the Mortgage Loan Seller, based solely on the Mortgage Loan Seller's
review of the report ("Engineering Report") prepared by the engineer
who inspected the structure, exterior walls, roofing, interior
construction, mechanical and electrical systems and general conditions
of the site, buildings and other improvements with respect to the
Mortgage Loan (which report indicated, where appropriate, a variety of
deferred maintenance item and recommended capital improvements with
respect to such Mortgaged Property, as well as the estimated cost of
such items and improvements) and the most recent visual inspection (as
described in (xviii) below) of the Mortgaged Property, no building or
other improvement on any Mortgaged Property has been affected in any
material manner or suffered any material loss as a result of any fire,
wind, explosion, accident, riot, war, or act of God or the public
enemy, and each Mortgaged Property is free of any material damage that
would affect materially and adversely the value of the Mortgaged
Property as security for the Mortgage Loan and is in good repair. With
respect to each Mortgaged Property, to the extent any individual
deferred maintenance item in excess of $5000 was referred to in the
respective Engineering Report, the Mortgage Loan Seller has either
required the Borrower to escrow an amount equal to 100% of such
deferred maintenance items or has received satisfactory evidence that
such repairs have been completed by the Borrower. The Mortgage Loan
Seller has neither received notice, nor is otherwise aware, of any
proceedings pending for the total condemnation of any Mortgaged
Property or a partial condemnation of any portion material to the
borrower's ability to perform its obligations under its related
Mortgage Loan;
(x) To the Mortgage Loan Seller's best knowledge, after review of
compliance confirmations from applicable municipalities, surveys
and/or title insurance endorsements, none of the improvements included
for the purpose of determining the appraised value of each Mortgaged
Property at the time of the origination of the Mortgage Loan lies
outside of the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties
materially encroach upon the Mortgaged Property except those which are
insured against by the title insurance policy (including endorsements
thereto) issued in connection with the Mortgage Loan and all
improvements on the Mortgaged Property comply with the applicable
zoning laws and/or set-back ordinances in force when improvements were
added;
(xi) The Mortgage Loan does not violate applicable usury laws;
(xii)Since the date of origination of the Mortgage Loan, the terms of the
Mortgage Loan have not been impaired, waived, altered, satisfied,
canceled, subordinated or modified in any respect (except with respect
to modifications the economic terms of which are reflected in the
mortgage loan schedule and which are evidenced by documents in the
Mortgage Loan file delivered to the Trustee) and no portion of the
Mortgaged Property has been released from the lien of the Mortgage in
any manner;
(xiii) All applicable mortgage recording taxes and other filing fees have
been paid in full or deposited with the issuer of the title insurance
policy issued in connection with the Mortgage Loan for payment upon
recordation of the relevant documents;
(xiv)Each assignment of leases and rents, if any, creates a valid
assignment of, or a valid security interest in, certain rights under
the related leases, subject only to a license granted to the relevant
mortgagor to exercise certain rights and to perform certain
obligations of the lessor under such leases, including the right to
operate the related Mortgaged Property, subject only to those
exceptions described in clause (vi) above. To the best of the Mortgage
Loan Seller's knowledge based upon review of the title insurance
policy and tenant estoppels received, no person other than the
relevant mortgagor owns any interest in any payments due under such
leases that is superior to or of equal priority with the mortgagee's
interest therein, subject only to those exceptions described in clause
(vi) above;
(xv) Each Mortgage, upon due recordation, is a valid and enforceable first
lien on the related Mortgaged Property, subject only to those
exceptions described in clause (vi) above. A UCC financing statement
has been filed and/or recorded in all places necessary to perfect a
valid security interest in the personal property granted under the
Mortgage Loan to the extent that such lien can be created under the
UCC by filing; any security agreement, chattel mortgage or equivalent
document related to and delivered in connection with the Mortgage Loan
establishes and creates a valid and enforceable first lien and first
priority security interest on the property described therein (except
as enforceability may be limited by bankruptcy or other laws affecting
creditor's rights generally or by the application of general
principles of equity);
(xvi)The Mortgage Loan Seller has not taken any action, nor has knowledge
that the mortgagor has taken any action, that would cause the
representations and warranties made by the mortgagor in the Mortgage
Loan documents not to be true;
(xvii) The proceeds of the Mortgage Loan have been fully disbursed and
there is no requirement for future advances thereunder and the
Mortgage Loan Seller covenants that it will not make any future
advances under the Mortgage Loan to the mortgagor. Any mortgagor
requirements for on or off-site improvements and as to disbursement of
any escrow funds therefor have been complied with;
(xviii) The Mortgage Loan Seller has inspected or caused to be inspected
each Mortgaged Property within the past twelve months preceding the
date hereof;
(xix)The Mortgage Loan does not have a shared appreciation feature, other
contingent interest feature or negative amortization, except with
those Mortgage Loans that provide for Deferred Interest;
(xx) The Mortgage Loan is a whole loan and contains no equity participation
by the lender and is not convertible into an equity interest in the
borrower;
(xxi)No fraudulent acts were committed by the Mortgage Loan Seller in
connection with the origination process of the Mortgage Loan;
(xxii) All taxes and governmental assessments that prior to the date of
origination of the Mortgage Loan became due and owing in respect of
each Mortgaged Property have been paid, or an escrow of funds in an
amount sufficient to cover such payments has been established or are
insured against by the title insurance policy issued in connection
with the origination of the Mortgage Loan;
(xxiii) To the extent required under applicable law, the Mortgage Loan
Seller was authorized to transact and do business in each jurisdiction
in which a Mortgaged Property is located at all times when it held the
Mortgage Loan;
(xxiv) The Mortgage Loan Seller does not have any knowledge of a material
default, breach, violation or event of acceleration existing under any
of the Mortgage Loan documents and the Mortgage Loan Seller does not
have any knowledge of any event (other than payments due but not yet
delinquent) which, with the passage of time or with notice and the
expiration of any grace or cure period, would and does constitute a
default, breach, violation or event of acceleration; no waiver of the
foregoing exists and no person other than the holder of the Note may
declare any of the foregoing;
(xxv)Each Mortgage contains customary and enforceable provisions such as
to render the rights and remedies of the holder thereof adequate for
the realization against each related Mortgaged Property of the
material benefits of the security, including realization by judicial
or, if applicable, non-judicial foreclosure, and there is no exemption
available to the mortgagor which would materially interfere with such
right to foreclosure;
(xxvi) (A) With respect to each Mortgaged Property, a Phase I environmental
report and, in certain cases, a Phase II environmental report or an
update to such Phase I report was conducted by a licensed qualified
engineer in connection with the origination of the Mortgage Loan (not
longer than twelve months prior to the Closing Date). The Mortgage
Loan Seller has reviewed each such report and update. (B) The Mortgage
Loan Seller, having made no independent inquiry other than reviewing
the environmental reports and updates referenced herein and without
other investigation or inquiry, has no knowledge of any material and
adverse environmental condition or circumstance affecting any
Mortgaged Property that was not disclosed in the related report and/or
update. The Mortgage Loan Seller has not received any actual notice of
a material violation of CERCLA or any applicable federal, state or
local environmental law with respect to any Mortgaged Property that
was not disclosed in the related report and/or update. (C) The
Mortgage Loan Seller has not taken any actions which would cause any
Mortgaged Property not to be in compliance with all federal, state and
local laws pertaining to environmental hazards.
(xxvii) The Mortgage Loan agreement contains provisions for the
acceleration of the payment of the unpaid principal balance of the
Mortgage Loan if (A) the mortgagor voluntarily transfers or encumbers
all or any portion of any related Mortgaged Property, or (B) any
direct or indirect interest in mortgagor is voluntarily transferred or
assigned, other than, in each case, as permitted under the terms and
conditions of the Mortgage Loan documents and, to the best of the
Mortgage Loan Seller's knowledge, the mortgagor is not a debtor in a
state or federal bankruptcy or insolvency proceeding;
(xxviii) To the best of the Mortgage Loan Seller's knowledge and without
affirmative investigation or inquiry, there is no pending action, suit
or proceeding, arbitration or governmental investigation against the
mortgagor or any Mortgaged Property an adverse outcome of which could
materially affect the mortgagor's performance of its obligations under
the Mortgage Loan documents;
(xxix) The servicing and collection practices used by the Mortgage Loan
Seller and the origination practices of the related Originator, have
been in all respects legal, proper and prudent and have met customary
industry standards except to the extent that, in connection with its
origination, such standards were modified by the applicable Originator
in its reasonable discretion;
(xxx)In connection with the assignment, transfer or conveyance of any
individual Mortgage, the Note and Mortgage contain no provision
limiting the right or ability of the applicable Originator to assign,
transfer and convey the Mortgage to any other person or entity;
(xxxi) If any Mortgaged Property is subject to any leases (other than any
ground lease referred to in (xxxv) below), based upon review of the
title insurance policies, tenant estoppels received and the opinion of
the Borrower's counsel, with respect to material leases the mortgagor
is the owner and holder of the landlord's interest under such leases
and the related Mortgage and Assignment of Leases, Rents and Profits,
if any, provides for the appointment of a receiver for rents or allows
the mortgagee to enter into possession to collect rent or provide for
rents to be paid directly to mortgagee in the event of a default,
subject to the exceptions described in clause (vi) hereof;
(xxxii) If a Mortgage is a deed of trust, a trustee, duly qualified under
applicable law to serve as such, has been properly designated and
currently so serves and is named in the deed of trust, and no fees or
expenses are or will become payable to the trustee under the deed of
trust, except in connection with the sale or release of the Mortgaged
Property following default or payment of the loan;
(xxxiii) Any insurance proceeds in respect of a casualty loss or taking
will be applied either to the repair or restoration of all or part of
the related Mortgaged Property, with the mortgagee or a trustee
appointed by it having the right to hold and disburse such proceeds
(provided that such proceeds exceed the threshold amount described in
the loan documents) as the repair or restoration progresses, or to the
payment of the outstanding principal balance of the Mortgage Loan
together with any accrued interest thereon, except to the extent of
any excess proceeds after restoration;
(xxxiv) Based on the Mortgage Loan Seller's review of the 100-year flood
plain map provided by FEMA, except for the Mortgaged Properties set
forth on Schedule 1, no Mortgaged Property is located in a special
flood hazard area (Zone A) as defined by the Federal Insurance
Administration and, with respect to the Mortgaged Properties set forth
on Schedule 1, flood insurance coverage has been obtained;
(xxxv) With respect to any Mortgage which is secured in whole or in part by
the interest of a borrower as a lessee under a ground lease and based
upon the terms of the ground lease or an estoppel letter from the
ground lessor the following apply to such ground lease:
(A) The ground lease or a memorandum thereof has been duly recorded,
the ground lease permits the interest of the lessee thereunder to
be encumbered by the related Mortgage, does not restrict the use
of the Mortgaged Property by the lessee or its successors and
assigns in a manner that would adversely affect the security
provided by the related Mortgage, and there has not been a
material change in the terms of the ground lease since its
recordation, with the exception of written instruments which are
part of the related Mortgage Loan documents delivered to the
Trustee.
(B) The ground lease is not subject to any liens or encumbrances
superior to, or of equal priority with, the related Mortgage,
other than the related ground lessor's related fee interest and
any permitted encumbrances on such fee interest and any permitted
encumbrance with respect to such ground lease does not include
any mortgage that is prior to the interest of the ground lease
(other than the Mortgage).
(C) The borrower's interest in the ground lease is assignable to the
holder of the Mortgage upon notice to, but without the consent
of, the lessor thereunder and, in the event that it is so
assigned, it is further assignable by the trustee and its
successors and assigns upon notice to, but without a need to
obtain the consent of, such lessor.
(D) As of the origination date of the Mortgage Loan, based solely on
an estoppel received from the ground lessor, the ground lease was
in full force and effect and the Mortgage Loan Seller does not
have any knowledge that any material default has occurred under
the ground lease and that there is any existing condition which,
but for the passage of time or the giving of notice, would result
in a default under the terms of the ground lease. No notice of
default under the ground lease has been received by the Mortgage
Loan Seller.
(E) The ground lease requires the lessor thereunder to give notice of
any default by the lessee to the mortgagee; and the ground lease,
or an estoppel letter received by the mortgagee from the lessor,
further provides that notice of termination given under the
ground lease is not effective against the mortgagee unless a copy
of the notice has been delivered to the mortgagee in the manner
described in such ground lease or estoppel letter.
(F) The mortgagee is permitted a reasonable opportunity (including,
where necessary, sufficient time to gain possession of the
interest of the lessee under the ground lease) to cure any
default under the ground lease which is curable after the receipt
of notice of any default, before the lessor thereunder may
terminate the ground lease.
(G) The ground lease either (i) has a term which extends not less
than 10 years beyond the maturity date of the related Mortgage
Loan or (ii) grants the lessee (which may be exercised by the
mortgagee) the option to extend the term of the lease for a
period (in the aggregate) which exceeds ten years beyond the
maturity date of the related Mortgage Loan.
(H) The ground lease requires the lessor to enter into a new lease
with the mortgagee upon termination of the ground lease for any
reason, including rejection of the ground lease in a bankruptcy
proceeding, provided the mortgagee cures the lessee's defaults to
the extent they are curable.
(I) Under the terms of the ground lease and the related Mortgage,
taken together, any related insurance proceeds will be applied
either to the repair or restoration of all or part of the related
Mortgaged Property, with the mortgagee or a trustee appointed by
it having the right to hold and disburse the proceeds as the
repair or restoration progresses, or to the payment of the
outstanding principal balance of the Mortgage Loan together with
any accrued interest thereon.
(J) Such ground lease does not impose any material restrictions on
subletting.
(K) Either the ground lease or the related Mortgage contains the
borrower's covenant that such ground lease shall not be amended,
canceled, or terminated without the prior written consent of the
mortgagee.
(L) Either the ground lease or an estoppel letter contains a covenant
that the lessor thereunder is not permitted in the absence of an
uncured default under the ground lease, to disturb the
possession, interest or quiet enjoyment of any lessee in the
relevant portion of the Mortgaged Property subject to such ground
lease for any reason, or in any manner, which would materially
adversely affect the security provided by the related Mortgage;
(xxxvi) (A) the Mortgage Loan is directly secured by a Mortgage on a
commercial real property, and (B) the fair market value of such real
property, as evidenced by an appraisal conducted within 12 months of
the origination of the Mortgage Loan, or as determined by the Mortgage
Loan Seller based on market studies and pursuant to its underwriting
standards, was at least equal to 80% of the principal amount of the
Mortgage Loan (I) at origination (or if the Mortgage Loan has been
modified in a manner that constituted a deemed exchange under Section
1001 of the Code at a time when the Mortgage Loan was not in default
or default with respect thereto was not reasonably foreseeable, the
date of the last such modification) or (II) at the Closing Date;
provided that the fair market value of the real property interest must
first be reduced by (1) the amount of any lien on the real property
interest that is senior to the Mortgage Loan (unless such senior lien
also secures a Mortgage Loan, in which event the computation described
in (I) and (II) shall be made on an aggregated basis) and (2) a
proportionate amount of any lien that is in parity with the Mortgage
Loan (unless such other lien secures a Mortgage Loan that is
cross-collateralized with such Mortgage Loan, in which event the
computation described in (I) and (II) shall be made on an aggregate
basis);
(xxxvii) To the best knowledge of the Mortgage Loan Seller based upon
customary due diligence performed by prudent commercial lenders, all
required certificates of occupancy and building permits, as
applicable, have been issued with respect to the Mortgaged Property
and, to the best knowledge of the Mortgage Loan Seller, are valid and
are in full force and effect;
(xxxviii) Any escrow accounts for taxes or other reserves required to be
funded on the date of origination of the Mortgage Loan pursuant to the
Mortgage Loan documents have been funded and all such escrow accounts
required to have been funded as of the Cut-Off Date (taking into
account any applicable notice and grace period) have been funded;
(xxxix) The related Assignment of Mortgage is in recordable form and
constitutes a legal, valid and binding assignment of such Mortgage to
the Depositor, and the related Reassignment of Assignment of Leases,
Rents and Profits, if any, is in recordable form and constitutes a
legal, valid and binding assignment thereof to the Depositor;
(xl) The related Note is not, and has not been since the date of
origination of the Mortgage Loan, secured by any collateral except the
lien of the related Mortgage, any related Assignment of Leases, Rents
and Profits and any related security agreement and escrow agreement,
all of which are being conveyed to the Depositor; the security for the
Mortgage Loan consists only of the related Mortgaged Property or
Properties, any leases (including without limitation any credit
leases) thereof, and any appurtenances, fixtures and other property
located thereon; and such Mortgaged Property or Properties do not
secure any mortgage loan other than the Mortgage Loan being
transferred and assigned to the Depositor hereunder (except for
Mortgage Loans, if any, which are cross-collateralized with other
Mortgage Loans being conveyed to the Depositor or subsequent
transferee hereunder and identified on the Mortgage Loan Schedule);
(xli)To the Mortgage Loan Seller's knowledge, based on due diligence
customarily performed by prudent commercial lenders in the origination
of comparable mortgage loans, as of the date of origination of each
Mortgage Loan, the related Mortgagor was in possession of all material
licenses, permits and franchises required by applicable law for the
ownership and operation of the related Mortgaged Property as it was
then operated;
(xlii) Each Mortgage Loan requires that the borrower comply with all legal
requirements applicable to it and the Mortgaged Property;
(xliii) No Mortgage Loan is a loan in which the originator paid the
borrower a premium in exchange for a higher Mortgage Rate ("Buy-up
Loan");
(xliv) Each Mortgage Loan requires the Borrower to provide the holder of
the Mortgage Loan with quarterly and annual operating statements, rent
rolls and related information, which annual financial statements shall
be audited by an independent certified public accountant upon request;
(xlv)Each Mortgaged Property constitutes one or more complete separate tax
lots or is subject to an endorsement under the related title insurance
policy;
(xlvi) Each Mortgage Loan containing provisions for defeasance of mortgage
collateral either (i) requires the prior written consent of, and
compliance with the conditions set by, the holder of the Mortgage
Loan, or (ii) requires, among other things, written confirmation from
the Rating Agencies that such defeasance will not result in a
qualification, downgrade or withdrawal of the then-current ratings of
the Certificates; and
(xlvii) Except in cases where either (a) a release of a portion of the
Mortgaged Property was contemplated at origination of the Mortgage
Loan and such portion was not considered material for purposes of
underwriting the Mortgage Loan or (b) release is conditioned upon the
satisfaction of certain underwriting and legal requirements and either
written confirmation from each Rating Agency that such release will
not result in the withdrawal, qualification or downgrade of the
Certificates or the payment of a release price or the substitution of
other collateral to the extent required under the Mortgage Loan, the
related Note or Mortgage does not require the holder thereof to
release all or any portion of the Mortgaged Property from the lien of
the related Mortgage except upon payment in full of all amounts due
under such Mortgage Loan.
3. Notice of Breach; Cure and Repurchase. (a) Pursuant to the Pooling and
Servicing Agreement, the Mortgage Loan Seller and the Depositor shall be given
notice of any breach of a representation or warranty made with respect to, or
any defect that materially and adversely affects the value of, a Mortgage Loan
or the interests of the holders of the Certificates therein.
(b) Upon notice pursuant to Section 3(a) herein, the Mortgage Loan Seller
shall cure such breach or defect, as the case may be, in all material respects
or repurchase the affected Mortgage Loan in accordance with the terms set forth
in Section 2.03 of the Pooling and Servicing Agreement. If the affected Mortgage
Loan is to be repurchased, the Mortgage Loan Seller shall remit the Repurchase
Price in immediately available federal funds to the Master Servicer.
(c) Upon any repurchase of a Mortgage Loan contemplated by Section 3(b)
above, the Trustee, the Master Servicer and the Special Servicer shall each
tender to the Mortgage Loan Seller all portions of the Mortgage File and other
documents pertaining to such Mortgage Loan possessed by it, as well as such
funds as pursuant to the Pooling and Servicing Agreement are to be paid to the
Mortgage Loan Seller in connection with such repurchase, and each document that
constitutes a part of the Mortgage File that was endorsed or assigned to the
Trustee shall be endorsed or assigned, as the case may be, to the Mortgage Loan
Seller.
(d) This Section 3 of this Agreement provides the sole remedy available to
the Certificateholders, or the Trustee on behalf of the Certificateholders,
respecting any defect in a Mortgage File or any breach of any representation or
warranty set forth in or required to be made pursuant to Section 2 of this
Agreement.
(e) The Mortgage Loan Seller hereby acknowledges the assignment by the
Depositor to the Trustee, as trustee under the Pooling and Servicing Agreement,
for the benefit of the Certificateholders, of the representations and warranties
contained herein and of the obligation of the Mortgage Loan Seller to repurchase
a Mortgage Loan pursuant to this Section. The Trustee or its designee may
enforce such obligations as provided in Section 8 hereof.
4. Representations, Warranties and Agreements of Depositor.
(a) The Depositor hereby represents and warrants to the Mortgage Loan
Seller, as of the date hereof (or such other date as is specified in the related
representation or warranty), as follows:
(i) The Depositor is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, with full
corporate power and authority to own its assets and conduct its
business, is duly qualified as a foreign corporation in good standing
in all jurisdictions in which the ownership or lease of its property
or the conduct of its business requires such qualification, except
where the failure to be so qualified would not have a material adverse
effect on the ability of the Depositor to perform its obligations
hereunder, and the Depositor has taken all necessary action to
authorize the execution, delivery and performance of this Agreement by
it, and has the power and authority to execute, deliver and perform
this Agreement and all the transactions contemplated hereby;
(ii) This Agreement has been duly authorized, executed and delivered by the
Depositor and constitutes a valid and binding obligation of the
Depositor, enforceable against the Depositor in accordance with its
terms, except as such enforcement may be limited by bankruptcy,
reorganization, insolvency, moratorium and other similar laws
affecting the enforcement of creditors' rights generally and to
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law);
(iii)The execution and delivery of this Agreement by the Depositor and the
performance of its obligations hereunder will not conflict with any
provision of any law or regulation to which the Depositor is subject,
or conflict with, result in a breach of or constitute a default under
any of the terms, conditions or provisions of any of the Depositor's
organizational documents or any agreement or instrument to which the
Depositor is a party or by which it is bound, or any order or decree
applicable to the Depositor, or result in the creation or imposition
of any lien on any of the Depositor's assets or property, in each case
which would materially and adversely affect the ability of the
Depositor to carry out the transactions contemplated by this
Agreement;
(iv) There is no action, suit, proceeding or investigation pending or to
the knowledge of the Depositor, threatened against the Depositor in
any court or by or before any other governmental agency or
instrumentality which would materially and adversely affect the
validity of this Agreement or any action taken in connection with the
obligations of the Depositor contemplated herein, or which would be
likely to impair materially the ability of the Depositor to perform
under the terms of this Agreement;
(v) The Depositor is not in default with respect to any order or decree of
any court or any order, regulation or demand of any federal, state,
municipal or governmental agency, which default might have
consequences that would materially and adversely affect the condition
(financial or other) or operations of the Depositor or its properties
or might have consequences that would materially and adversely affect
its performance hereunder; and
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and performance by the Depositor of or compliance by the Depositor
with this Agreement or the consummation of the transactions
contemplated by this Agreement other than those that have been
obtained by the Depositor.
5. Depositor's Conditions to Closing. The obligations of the Depositor
under this Agreement shall be subject to the satisfaction, on the Closing Date,
or such other date specified herein, of the following conditions:
(a) The obligations of the Mortgage Loan Seller required to be performed by
it at or prior to the Closing Date pursuant to the terms of this Agreement shall
have been duly performed and complied with and all of the representations and
warranties of the Mortgage Loan Seller under this Agreement shall be true and
correct as of the date hereof and as of the Closing Date, and no event shall
have occurred which, with notice or the passage of time, or both, would
constitute a default under this Agreement, and the Depositor shall have received
a certificate to that effect signed by an authorized officer of the Mortgage
Loan Seller.
(b) The Depositor or its designee shall have received all of the following
closing documents, in such forms as are agreed upon and acceptable to the
Depositor and in form and substance satisfactory to the Depositor, the
Underwriter and their respective counsel, duly executed by all signatories other
than the Depositor as required pursuant to the respective terms thereof:
(i) with respect to each Mortgage Loan, the related Mortgage File, which
Mortgage Files shall be delivered to and held by the Trustee on behalf
of the Depositor;
(ii) the final Mortgage Loan Schedule;
(iii)an officer's certificate from the Mortgage Loan Seller dated as of
the Closing Date, in the form attached hereto as Exhibit B;
(iv) an opinion of Mortgage Loan Seller's counsel, subject to customary
exceptions and carve-outs, which state in substance the opinions set
forth on Exhibit C hereto, and, in addition, an opinion delivered on
the date of the Prospectus as to the matters set forth in the last
paragraph of Exhibit C hereto;
(v) such other documents, certificates and opinions as may be necessary to
secure for the Certificates the following ratings from Duff & Phelps
Credit Rating Co. ("DCR") and Standard & Poor's Ratings Service
("S&P", and collectively with DCR, the "Rating Agencies"),
respectively: for each of the Class A-1, Class A-2, a "AAA" and "AAA"
rating; for the Class X Certificates, a "AAAr" and "AAA" rating; for
the Class B Certificates, a "AA" and "AA" rating; for the Class C
Certificates, a "A" and "A" rating; for the Class D Certificates, a
"BBB" and "BBB" rating; for the Class E Certificates, a "BBB-" and
"BBB-" rating; and for the Class F Certificates, a "BB" and a "BB-"
rating; and
(vi) a letter from the independent accounting firm of KPMG Peat Marwick LLP
in form satisfactory to the Depositor, relating to certain information
regarding the Mortgage Loans as set forth in the Prospectus Supplement
and a letter from KPMG Peat Marwick LLP regarding certain information
regarding the Certificates as set forth in the Prospectus Supplement;
(c) The Mortgage Loan Seller hereby agrees to furnish such other
information, documents, certificates, letters or opinions with respect to the
Mortgage Loans or itself as may be reasonably requested by the Depositor in
order for the Depositor to perform any of its obligations or satisfy any of the
conditions on its part to be performed or satisfied pursuant to the Underwriting
Agreement, the Pooling and Servicing Agreement or this Agreement.
6. Accountants' Letters. The parties hereto shall cooperate with KPMG Peat
Marwick LLP in making available all information and taking all steps reasonably
necessary to permit such accountants to deliver the letters required by the
Underwriting Agreement.
7. Notices. All communications hereunder shall be in writing and effective
only upon receipt and, if sent to the Depositor, will be mailed, hand delivered,
couriered or sent by facsimile transmission to it at 1585 Broadway, New York,
New York 10036, attention of Cecilia Tarrant, fax number (212) 761-0524, or, if
sent to the Mortgage Loan Seller, will be mailed, hand delivered, couriered or
sent by facsimile transmission and confirmed to it at 1585 Broadway, New York,
New York 10036, attention of Cecilia Tarrant, fax number (212) 761-0524, in
either case with a copy to Gregory Walker, Esq., fax number (212) 762-8896.
8. Trust as Beneficiary. The representations, warranties and agreements
made by the Mortgage Loan Seller in this Agreement are made for the benefit of,
and, to the extent they are assigned by the Depositor to the Trustee under the
Pooling and Servicing Agreement, may be enforced by or on behalf of, the
Trustee, the Master Servicer or the Special Servicer, as provided in the Pooling
and Servicing Agreement, to the same extent that the Depositor has rights
against the Mortgage Loan Seller under this Agreement in respect of
representations, warranties and agreements made by the Mortgage Loan Seller
herein.
9. Miscellaneous. This Agreement will be governed by and construed in
accordance with the substantive laws of the State of New York, without regard to
conflicts of laws principles. Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated except by a writing signed by the
party against whom enforcement of such change, waiver, discharge or termination
is sought. This Agreement may not be changed or waived in any manner which would
have a material adverse effect on Certificateholders without the prior written
consent of the Trustee. This Agreement may be executed in any number of
counterparts, each of which shall for all purposes be deemed to be an original
and all of which shall together constitute but one and the same instrument. This
Agreement will inure to the benefit of and be binding upon the parties hereto
and their respective successors and assigns, and no other person will have any
right or obligation hereunder, other than as provided herein.
10. Representations, Warranties and Agreements to Survive Delivery. All
representations, warranties and agreements contained in this Agreement, or in
certificates of officers of the Mortgage Loan Seller and the Depositor submitted
pursuant hereto, shall remain operative and in full force and effect and shall
survive transfer and sale of the Mortgage Loans to the Depositor and by the
Depositor to the Trustee notwithstanding any language to the contrary contained
in any endorsement of any Mortgage Loan.
11. Severability. If any provision of this Agreement shall be prohibited or
invalid under applicable law, this Agreement shall be ineffective only to such
extent, without invalidating the remainder of this Agreement.
12. Further Assurances. The Mortgage Loan Seller and the Depositor agree to
execute and deliver such instruments and take such actions as the other party
may, from time to time, reasonably request in order to effectuate the purpose
and to carry out the terms of this Agreement.
[SIGNATURE PAGE FOLLOWS]
<PAGE>
IN WITNESS WHEREOF, the Depositor and the Mortgage Loan Seller have caused
this Agreement to be duly executed by their respective officers as of the day
and year first above written.
MORGAN STANLEY CAPITAL I INC.
By: _________________________________________
Name: __________________________________
Title: __________________________________
MORGAN STANLEY MORTGAGE CAPITAL INC.
By: _________________________________________
Name:____________________________________
Title: __________________________________
<PAGE>
EXHIBIT A
MORTGAGE LOAN SCHEDULE
<TABLE>
<CAPTION>
Loan Revised Net Servicing Day Count Cut-Off
Number Loan Name Mortgage Rate Default Rate Excess Rate Mortgage Rate Mortgage Rate Fee Rate Convention LTV
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 Grapevine Mills 6.470% 9.470% 2.0% 8.470% 6.442% 0.028% Actual/360 61.7%
2 Edens & Avant Pool I 6.200% 11.200% 2.0% 8.200% 6.172% 0.028% Actual/360 47.1%
3 Mall of New Hampshire 6.955% 11.955% 5.0% 11.955% 6.927% 0.028% Actual/360 65.2%
4 Westside Pavilion 6.440% 9.440% 2.0% 8.440% 6.412% 0.028% Actual/360 62.5%
5 NorthTown Mall 6.680% 11.680% 2.0% 8.680% 6.652% 0.028% Actual/360 58.5%
6 Edens & Avant Pool II 6.200% 11.200% 2.0% 8.200% 6.172% 0.028% Actual/360 48.8%
7 Crystal Park IV 6.510% 11.510% 4.0% 10.510% 6.482% 0.028% Actual/360 62.7%
</TABLE>
Number of
Properties
1
15
1
1
1
21
1
<TABLE>
<CAPTION>
Cut-Off Original Remaining
Original Date Term Term
Loan Principal Principal to to
Number Loan Name Borrower Balance Balance EMD EMD
<S> <C> <C> <C> <C> <C> <C>
1 Grapevine Mills Grapevine Mills Limited Partnership 155,000,000 155,000,000 121 120
2 Edens & Avant Pool I E&A Northeast Limited Partnership 125,000,000 125,000,000 120 120
3 Mall of New Hampshire MNH Mall L.L.C. 105,000,000 105,000,000 126 120
4 Westside Pavilion Macerich Westside Limited Partnership 100,000,000 100,000,000 120 117
5 NorthTown Mall Price Spokane Limited Partnership 84,500,000 84,426,244 120 119
6 Edens & Avant Pool II E&A Southeast Limited Partnership 70,000,000 70,000,000 120 120
7 Crystal Park IV Fourth Crystal Park Associates Limited Partnership 67,100,000 67,039,458 120 119
</TABLE>
Original Remaining Current P&I
Amort Term Amort Term Monthly Payment(1) Monthly Payment(2)
360 360 $847,315.39 $976,649.36
IO IO $654,803.24 NA(3)
360 360 $617,014.76 $695,397.21
360 360 $544,120.37 $628,127.29
360 359 $544,139.35 $544,139.35
IO IO $366,689.81 NA(3)
360 359 $424,559.02 $424,559.02
(1) Current monthly payments are Interest Only for Grapevine Mills, Edens &
Avant Pools I and II, and Mall of New Hampshire, and Westside Pavilion.
(2) Amortization begins on October 1, 2002 for Grapevine Mills, Novermber 1,
1999 for Mall of New Hampshire, and August 1, 2001 for Westside Pavilion.
(3) Interest Only until EMD.
<PAGE>
EXHIBIT B
FORM OF OFFICER'S CERTIFICATE
I, ________________, hereby certify that I am a duly elected and acting
____________________ of Morgan Stanley Mortgage Capital Inc. (the "Seller"), in
connection with the sale of certain mortgage loans to Morgan Stanley Capital I
Inc. (the "Depositor") pursuant to that certain Loan Sale Agreement, dated as of
October 1, 1998 (the "Loan Sale Agreement"), between the Depositor and the
Depositor, and hereby certify further as follows:
1. The Seller is a New York corporation duly organized and existing under
the laws of the State of New York.
2. Attached hereto as Exhibit A is a true and correct copy of the
Articles of Incorporation of the Seller.
3. Attached hereto as Exhibit B is a true and correct copy of the By-Laws
of the Seller, as in effect at all times on and after _____________,
____, through the date hereof.
4. The resolutions attached hereto as Exhibit C (the "Resolutions") were
adopted by unanimous consent of the board of directors of the Seller
as of _______________, 1998.
5. There have been no amendments, waivers or modifications of the
Articles of Incorporation other than as provided in Exhibit A, and no
action has been taken by the Seller or its shareholders, directors or
officers in contemplation of the filing of any such amendment or other
documents or in contemplation of the liquidation or dissolution of the
Seller;
6. The Resolutions (a) represent the only resolutions of the board of
directors or shareholders of the Seller relating to the sale of the
mortgage loans referred to in the Mortgage Loan Purchase and Sale
Agreement; (b) have not been amended, modified, rescinded or repealed
by any subsequent action of the Seller's board of directors or
shareholders; and (c) were in full force and effect at all times on
_________________, 1998 and thereafter through the date hereof;
7. Attached hereto as Exhibit D is a certificate of the Secretary of the
State of New York dated ___________________, 1998, with respect to the
good standing of the Seller in such State;
8. The representations and warranties of the Seller in the Loan Sale
Agreement are true and correct in all material respects on and as of
the date hereof.
9. On or prior to the date hereof, the Seller has complied with all
agreements and performed or satisfied all conditions on its part to be
performed or satisfied at or prior to the date hereof.
10. Each person who, as a partner, agent or representative of the Seller,
signed the Loan Sale Agreement or any other document or certificate
delivered on or before the date hereof in connection with the
transactions contemplated by the Loan Sale Agreement was, at the
respective times of such signing and delivery, and is now, duly
elected or appointed, qualified and acting as such partner, agent or
representative, and the signature of such persons appearing on such
documents are their genuine signatures.
[SIGNATURE PAGE FOLLOWS]
<PAGE>
IN WITNESS WHEREOF, I have hereunto signed my name as of ________, 1998.
By: ________________________________________
Name: __________________________________
Title:__________________________________
<PAGE>
EXHIBIT C
FORM OF LEGAL OPINION
1. The Mortgage Loan Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of New York, with full
corporate power and authority to own its assets and conduct its business, is in
good standing in the State of New York, and the Mortgage Loan Seller has taken
all necessary action to authorize the execution, delivery and performance of the
Loan Sale Agreement by it, and has the power and authority to execute, deliver
and perform the Mortgage Loan Purchase and Sale Agreement and all the
transactions contemplated hereby, including, but not limited to, the power and
authority to sell, assign and transfer the Mortgage Loans in accordance with the
Loan Sale Agreement.
2. Assuming the due authorization, execution and delivery of the Loan Sale
Agreement by the Depositor, the Loan Sale Agreement and all of the obligations
of the Mortgage Loan Seller under the Loan Sale Agreement are the legal, valid
and binding obligations of the Mortgage Loan Seller, enforceable against the
Mortgage Loan Seller in accordance with the terms of the Loan Sale Agreement,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally, and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law),
and except to the extent rights to indemnity and contribution may be limited by
applicable law.
3. The execution and delivery of the Loan Sale Agreement by the Mortgage
Loan Seller and the performance of its obligations under the Loan Sale Agreement
will not conflict with any provision of any law or regulation to which the
Mortgage Loan Seller is subject, or conflict with, result in a breach of or
constitute a default under any of the terms, conditions or provisions of any of
the Mortgage Loan Seller's organizational documents or, to our knowledge, any
agreement or instrument to which the Mortgage Loan Seller is a party or by which
it is bound, or any order or decree applicable to the Mortgage Loan Seller, or
result in the creation or imposition of any lien on any of the Mortgage Loan
Seller's assets or property, in each case which would materially and adversely
affect the ability of the Mortgage Loan Seller to carry out the transactions
contemplated by the Loan Sale Agreement.
4. To our knowledge, there is no action, suit, proceeding or investigation
pending or threatened in writing against the Mortgage Loan Seller in any court
or by or before any other governmental agency or instrumentality which would
materially and adversely affect the validity of the Mortgage Loans or the
ability of the Mortgage Loan Seller to carry out the transactions contemplated
by the Loan Sale Agreement.
5. To our knowledge, the Mortgage Loan Seller is not in default with
respect to any order or decree of any court or any order, regulation or demand
of any federal, state, municipal or governmental agency, which default might
have consequences that would materially and adversely affect the condition
(financial or other) or operations of the Mortgage Loan Seller or its properties
or might have consequences that would materially and adversely affect its
performance under the Loan Sale Agreement.
6. No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Mortgage Loan Seller of or compliance by the Mortgage Loan
Seller with the Loan Sale Agreement or the consummation of the transactions
contemplated by the Loan Sale Agreement, other than those which have been
obtained by the Mortgage Loan Seller.
<PAGE>
Schedule 1
Exceptions to Representations and Warranties
GRAPEVINE MILLS
Representation Exception
None.
EDENS & AVANT POOL I
Representation Exception
None.
MALL OF NEW HAMPSHIRE
Representation Exception
(xxxv) (E) The Small Mall of New Hampshire Ground Lease does not
provide the protections to the mortgagee set forth in this
subsection.
(F)
The Small Mall of New Hampshire Ground Lease does not
provide the protections to the mortgagee set forth in this
subsection.
(G)
The Small Mall of New Hampshire Ground Lease expires, with
no further renewals on December 1, 2029.
(H)
The Small Mall of New Hampshire Ground Lease does not
provide the protections to the mortgagee set forth in this
subsection.
(I)
The Small Mall of New Hampshire Ground Lease does not
provide the protections to the mortgagee set forth in this
subsection.
(J)
The Small Mall of New Hampshire Ground Lease does not
provide the protections to the mortgagee set forth in this
subsection.
WESTSIDE PAVILION
Representation Exception
(viii)
The Westside Pavilion Borrower may obtain the insurance
coverage required to meet the insurance requirements from
insurers having ratings lower than the ratings prescribed
in the insurance requirements section of the mortgage,
provided that a cut-through endorsement in form and
substance approved by mortgagee shall be issued by an
insurer with at least an "AA" rating by S&P provided,
that if, upon the renewal or replacement of any insurance
policy or change to a different carrier, the cost of
maintaining such insurance with an insurer that is rated
"AA" or maintaining a cut-through endorsement with an
insurer that is rated "AA" is commercially unreasonable,
the Westside Pavilion Borrower agrees to maintain such
insurance with insurers that are rated "A" or maintaining
cut-through endorsement with an insurer that is rated
"A".
(xxxiv)
The Westside Pavilion Property is located in a special
flood hazard area. The Westside Pavilion Borrower is
required to maintain flood insurance in an amount equal to
the maximum available National Flood Insurance Program
coverage.
(xxxv)(G)
A portion of the Westside Pavilion Property consisting of
a storage space is leased to Nordstrom and held by the
Borrower pursuant to a ground lease. The ground lease
expires upon the expiration or earlier termination of the
Nordstrom Lease, which is currently scheduled to expire on
December 1, 2033 which extends is not less than 10 years
beyond the maturity date of the Mortgage Loan, subject to
four ten year renewal terms.
(J)
The Westside Pavilion ground lease imposes material
restrictions on subletting.
NORTHTOWN MALL
Representation Exception
None.
EDENS & AVANT POOL II
Representation Exception
(xxxv)(E) Reservoir Square Shopping Center--The ground lease does
not provide specifically the protections to the mortgagee
set forth in this subsection.
Baldwin Square--The ground lease does not provide
specifically the protections to the mortgagee set forth in
this subsection.
(F)
Reservoir Square Shopping Center--The ground lease does
not provide specifically the protections to the mortgagee
set forth in this subsection.
Baldwin Square--The ground lease does not provide
specifically the protections to the mortgagee set forth in
this subsection.
(H)
Reservoir Square Shopping Center--The ground lease
provides that lessor may terminate if the tenant is
judicially declared bankrupt.
Baldwin Square--The ground lease does not specifically
provide the protections to the mortgagee set forth in this
subsection.
(I)
Reservoir Square Shopping Center--The ground lease does
not specifically provide the protections to the mortgagee
set forth in this subsection.
Baldwin Square--The ground lease does not specifically
provide the protections to the mortgagee set forth in this
subsection.
Magee Shopping Center--The ground lease provides that all
insurance shall be paid to the ground lessee (borrower)
and all proceeds should be applied to repair or
restoration of the property. The leasehold mortgage
pledges all insurance proceeds to mortgagee to be either:
(a) retained in payment of the outstanding debt, or (b)
paid directly to Borrower for diligent prosecution of the
repair and restoration of the property. In addition,
mortgagee does not retain the right to disburse the
proceeds as repair and restoration progresses.
CRYSTAL PARK IV
Representation Exception
None.
<PAGE>
EXHIBIT H
FORM OF SUMMARY REPORT
Commercial Mortgage Pass-Through Certificates
Series 1998-CF1
Comparative Financial Status Report
<TABLE>
<CAPTION>
Original Underwriting Information
---------------------------------
Last Ending
Property Scheduled Paid Annual Financial
Prospectus Inspection Principal Thru Debt Info as % Total $
Number City State Date Balance Date Service of Date Occ Revenue NOI DSCR
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
2nd Preceding Annual Operating Information
------------------------------------------
As of Y-E-YYYY Normalized
Financial
Info % Total $
as of Occ Revenue NOI DSCR
Date
<TABLE>
<CAPTION>
Preceding Annual Operating Information Trailing Financial or YTD Information
-------------------------------------- -------------------------------------
As of Y-E-YYYY Normalized Month Reported
Financial FS FS
Info as of % Total $ Start End % Total $
Date Occ Revenue NOI DSCR Date Date Occ Revenue NOI DSCR
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
Net Change
----------
Current & Basis
%
% Total
Occ Rev DSCR
Financial Information:
Current Full Year:
Current Full Yr. received with DSC less than 1:
Prior Full Year:
Prior Full Yr. received with DSC less than 1:
Received Required
Loans Balance Balance
# % $ % % $
<PAGE>
EXHIBIT I
Form of Monthly Distribution Statement
[NORWEST BANKS LOGO]
NORWEST BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
3 NEW YORK PLAZA, 15TH FLOOR
NEW YORK, NY 10004
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1998-XL2
For Additional Information, please contact
Leslie Gaskill
(212) 515-5254
Reports Available on the World Wide Web
@ www.securitieslink.net/cmbs
PAYMENT DATE: 11/4/98
RECORD DATE: 10/30/98
DISTRIBUTION DATE STATEMENT
TABLE OF CONTENTS
STATEMENT SECTIONS PAGE(S)
Certificate Distribution Detail 2
Certificate Factor Detail 3
Reconciliation Detail 4
Other Required Information 5
Ratings Detail 6
Current Mortgage Loan and Property Stratification Tables 7
Mortgage Loan Detail 8
Principal Prepayment Detail 9
Historical Detail 10
Delinquency Loan Detail 11
Specially Serviced Loan Detail 12 - 13
Modified Loan Detail 14
Liquidated Loan Detail 15
UNDERWRITER
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036
Contact: General Information Number
Phone Number: (212) 761-4700
MASTER SERVICER
Midland Loan Services, Inc.
210 West 10th Street
Kansas City, MO 64105
Contact: Brad Hauger
Phone Number: (816) 435-5175
SPECIAL SERVICER
Midland Loan Services, Inc.
210 West 10th Street
Kansas City, MO 64105
Contact: Brad Hauger
Phone Number: (816) 435-5175
This report has been compiled from information provided to Norwest by various
third parties, which may include the Servicer, Master Servicer, Special
Servicer and others. Norwest has not independently confirmed the accuracy of
information received from these third parties and assumes no duty to do so.
Norwest expressly disclaims any responsibility for the accuracy or completeness
of information furnished by third parties.
Copyright 1997, Norwest Bank Minnesota, N.A.
<PAGE>
[NORWEST BANKS LOGO]
NORWEST BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
3 NEW YORK PLAZA, 15TH FLOOR
NEW YORK, NY 10004
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1998-XL2
For Additional Information, please contact
Leslie Gaskill
(212) 515-5254
Reports Available on the World Wide Web
@ www.securitieslink.net/cmbs
PAYMENT DATE: 11/4/98
RECORD DATE: 10/30/98
CERTIFICATE DISTRIBUTION DETAIL
<TABLE>
<CAPTION>
Realized loss/
Additional Current
Pass-Through Original Beginning Principal Interest Prepayment Trust Fund Total Ending Subordination
Class CUSIP Rate Balance Balance Distribution Distribution Penalties Expenses Distribution Balance Level (1)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
A-1 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
A-2 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
B 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
C 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
D 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
E 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
F 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
Q 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
R 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
LR 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
Totals 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
</TABLE>
<TABLE>
<CAPTION>
Original Beginning Ending
Pass-Through Notional Notional Interest Prepayment Total Notional
Class CUSIP Rate Amount Amount Distribution Penalties Distribution Amount
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
X 0.000000% 0.00 0.00 0.00 0. 00 0.00 0.00
</TABLE>
(1) Calculated by taking (A) the sum of the ending certificate balance of all
classes less (B) the sum of (i) the ending certificate balance of the
designated class and (ii) the ending certificate balance of all classes which
are not subordinate to the designated class and dividing the result by (A).
Copyright 1997, Norwest Bank Minnesota, N.A.
<PAGE>
[NORWEST BANKS LOGO]
NORWEST BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
3 NEW YORK PLAZA, 15TH FLOOR
NEW YORK, NY 10004
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1998-XL2
For Additional Information, please contact
Leslie Gaskill
(212) 515-5254
Reports Available on the World Wide Web
@ www.securitieslink.net/cmbs
PAYMENT DATE: 11/4/98
RECORD DATE: 10/30/98
CERTIFICATE FACTOR DETAIL
<TABLE>
<CAPTION>
Realized Loss/
Beginning Principal Interest Prepayment Additional Trust Ending
Class CUSIP Balance Distribution Distribution Penalties Fund Expenses Balance
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
A-1 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
A-2 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
B 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
C 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
D 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
E 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
F 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
Q 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
R 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
LR 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
</TABLE>
Beginning Ending
Notional Interest Prepayment Notional
Class CUSIP Amount Distribution Penalties Amount
- -------------------------------------------------------------------------------
X 0.00000000 0.00000000 0.00000000 0.00000000
Copyright 1997, Norwest Bank Minnesota, N.A.
<PAGE>
[NORWEST BANKS LOGO]
NORWEST BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
3 NEW YORK PLAZA, 15TH FLOOR
NEW YORK, NY 10004
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1998-XL2
For Additional Information, please contact
Leslie Gaskill
(212) 515-5254
Reports Available on the World Wide Web
@ www.securitieslink.net/cmbs
PAYMENT DATE: 11/4/98
RECORD DATE: 10/30/98
RECONCILIATION DETAIL
ADVANCE SUMMARY
P & I Advances Outstanding 0.00
Servicing Advances Outstanding 0.00
Reimbursement for Interest on Advances 0.00
paid from general collections
SERVICING FEE BREAKDOWNS
Current Period Accrued Servicing Fees 0.00
Less Delinquent Servicing Fees 0.00
Less Reductions to Servicing Fees 0.00
Plus Servicing Fees for Delinquent Payments Received 0.00
Plus Adjustments for Prior Servicing Calculation 0.00
Total Servicing Fees Collected 0.00
CERTIFICATE INTEREST RECONCILIATION
<TABLE>
<CAPTION>
Interest Excess Realized Previously Unpaid Distribution Distributable Remaining
Accrual Prepayment Losses/ Interest(including Certificate Certif. Interest Interest Unpaid
Class Amount Interest Shortfall Expense Losses interest thereon) Interest Adjustment Distribution Interest
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
A-1 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
A-2 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
X 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
B 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
C 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
D 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
E 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
F 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Totals 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
</TABLE>
Copyright 1997, Norwest Bank Minnesota, N.A.
<PAGE>
[NORWEST BANKS LOGO]
NORWEST BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
3 NEW YORK PLAZA, 15TH FLOOR
NEW YORK, NY 10004
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1998-XL2
For Additional Information, please contact
Leslie Gaskill
(212) 515-5254
Reports Available on the World Wide Web
@ www.securitieslink.net/cmbs
PAYMENT DATE: 11/4/98
RECORD DATE: 10/30/98
OTHER REQUIRED INFORMATION
Available Funds 0.00
Aggregate Number of Outstanding Loans 0
Aggregate Unpaid Principal Balance of Loans 0.00
Aggregate Stated Principal Balance of Loans 0.00
Aggregate Amount of Servicing Fee 0.00
Aggregate Amount of Special Servicing Fee 0.00
Aggregate Amount of Trustee Fee 0.00
Aggregate Trust Fund Expenses 0.00
Specially Serviced Loans not Delinquent
Number of Outstanding Loans 0
Aggregate Unpaid Principal Balance 0.00
Appraisal Reduction Amount
Appraisal Date Appraisal
Loan Reduction Reduction
Number Amount Effected
- -----------------------------------------------------
- -----------------------------------------------------
Total
- -----------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A.
<PAGE>
[NORWEST BANKS LOGO]
NORWEST BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
3 NEW YORK PLAZA, 15TH FLOOR
NEW YORK, NY 10004
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1998-XL2
For Additional Information, please contact
Leslie Gaskill
(212) 515-5254
Reports Available on the World Wide Web
@ www.securitieslink.net/cmbs
PAYMENT DATE: 11/4/98
RECORD DATE: 10/30/98
RATINGS DETAIL
Original Ratings Current Ratings (1)
-----------------------------------------------------
Class CUSIP DCR Fitch Moody's S&P DCR Fitch Moody's S&P
- -------------------------------------------------------------------------------
A-1
A-2
X
B
C
D
E
F
- -------------------------------------------------------------------------------
NR - Designates that the class was not rated by the above agency at the
time of original issuance.
X - Designates that the above rating agency did not rate any classes in
this transaction at the time of original issuance.
N/A - Data not available this period.
1) For any class not rated at the time of original issuance by any particular
rating agency, no request has been made subsequent to issuance to obtain rating
information, if any, from such rating agency. The current ratings were obtained
directly from the applicable rating agency within 30 days of the payment date
listed above. The ratings may have changed since they were obtained. Because
the ratings may have changed, you may want to obtain current ratings directly
from the rating agencies.
Duff & Phelps Credit Rating Co.
55 East Monroe Street
Chicago, Illinois 60603
(312) 368-3100
Fitch IBCA, Inc.
One State Street Plaza
New York, New York 10004
(212) 908-0500
Moody's Investors Service
99 Church Street
New York, New York 10007
(212) 553-0300
Standard & Poor's Rating Services
26 Broadway
New York, New York 10004
(212) 208-8000
Copyright 1997, Norwest Bank Minnesota, N.A.
<PAGE>
[NORWEST BANKS LOGO]
NORWEST BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
3 NEW YORK PLAZA, 15TH FLOOR
NEW YORK, NY 10004
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1998-XL2
For Additional Information, please contact
Leslie Gaskill
(212) 515-5254
Reports Available on the World Wide Web
@ www.securitieslink.net/cmbs
PAYMENT DATE: 11/4/98
RECORD DATE: 10/30/98
CURRENT MORTGAGE LOAN AND PROPERTY STRATIFICATION TABLES
STATE (3)
% of
# of Scheduled Agg. WAM Weighted
State Props. Balance Bal. (2) WAC Avg DSCR (1)
- --------------------------------------------------------------------
- ----------------------------------------------------------------------
Totals
- ----------------------------------------------------------------------
PROPERTY TYPE (3)
% of
Property # of Scheduled Agg. WAM Weighted
Type Props. Balance Bal. (2) WAC Avg DSCR (1)
- --------------------------------------------------------------------
- -----------------------------------------------------------------------
Totals
- -----------------------------------------------------------------------
(1) Debt Service Coverage Ratios are calculated as described in the prospectus,
values are updated periodically as new NOI figures become available from
borrowers on an asset level. The Trustee makes no representations as to the
accuracy of the data provided by the borrower for this calculation.
(2) WAM is calculated based upon the Effective Maturity Date.
(3) Data in this table was calculated by allocating pro-rata the current loan
information to the properties based upon the Cut-off Date Balance of the
related mortgage loan as disclosed in the offering document.
Copyright 1997, Norwest Bank Minnesota, N.A.
<PAGE>
[NORWEST BANKS LOGO]
NORWEST BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
3 NEW YORK PLAZA, 15TH FLOOR
NEW YORK, NY 10004
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1998-XL2
For Additional Information, please contact
Leslie Gaskill
(212) 515-5254
Reports Available on the World Wide Web
@ www.securitieslink.net/cmbs
PAYMENT DATE: 11/4/98
RECORD DATE: 10/30/98
<TABLE>
<CAPTION>
MORTGAGE LOAN DETAIL
Latest
Effective Beginning Ending Paid Financial Res. Mod.
Loan Loan Interest Principal Gross Origination Maturity Maturity Scheduled Scheduled Thru Statement Strat. Code
Number ODCR Name Payment Payment Coupon Date Date Date Balance Balance Date Date DSCR (2) (3)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Totals
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Collateral Type Code
MF - Multi-Family
RT - Retail
HC - Health Care
IN - Industrial
WH - Warehouse
OF - Office
MU - Mixed Use
LO - Lodging
SS - Self Storage
MH - Mobile Home Park
(2) Resolution Strategy Code
1 - Modification
2 - Foreclosure
3 - Bankruptcy
4 - Extension
5 - Note Sale
6 - DPO
7 - REO
8 - Resolved
9 - Pending Return to Master Servicer
10 - Deed In Lieu Of Foreclosure
(3) Modification Code
1 - Maturity Date Extension
2 - Amortization Change
3 - Principal Write-Off
4 - Combination
Copyright 1997, Norwest Bank Minnesota, N.A.
<PAGE>
[NORWEST BANKS LOGO]
NORWEST BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
3 NEW YORK PLAZA, 15TH FLOOR
NEW YORK, NY 10004
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1998-XL2
For Additional Information, please contact
Leslie Gaskill
(212) 515-5254
Reports Available on the World Wide Web
@ www.securitieslink.net/cmbs
PAYMENT DATE: 11/4/98
RECORD DATE: 10/30/98
PRINCIPAL PREPAYMENT DETAIL
<TABLE>
<CAPTION>
Principal Prepayment Amount Prepayment Penalties
Offering Document ----------------------------------- ------------------------------------------------
Loan Number Cross-Reference Payoff Amount Curtailment Amount Prepaayment Premium Yield Maintenance Premium
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
Totals
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Copyright 1997, Norwest Bank Minnesota, N.A.
<PAGE>
[NORWEST BANKS LOGO]
NORWEST BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
3 NEW YORK PLAZA, 15TH FLOOR
NEW YORK, NY 10004
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1998-XL2
For Additional Information, please contact
Leslie Gaskill
(212) 515-5254
Reports Available on the World Wide Web
@ www.securitieslink.net/cmbs
PAYMENT DATE: 11/4/98
RECORD DATE: 10/30/98
HISTORICAL DETAIL
<TABLE>
<CAPTION>
Delinquencies
- --------------------------------------------------------------------------------------------
Distribution 30-59 Days 60-89 Days 90 Days or more Foreclosure REO Modifications
Date # Balance # Balance # Balance # Balance # Balance # Balance
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------
<CAPTION>
Prepayments Rate and Maturities
- ------------------------------------------------------------------------
Distribution Curtailments Payoff Next Weighted Avg.
Date # Amount # Amount Coupon Remit WAM
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------
</TABLE>
Note: Foreclosure and REO Totals are excluded from the delinquencies aging
categories.
Copyright 1997, Norwest Bank Minnesota, N.A.
<PAGE>
[NORWEST BANKS LOGO]
NORWEST BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
3 NEW YORK PLAZA, 15TH FLOOR
NEW YORK, NY 10004
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1998-XL2
For Additional Information, please contact
Leslie Gaskill
(212) 515-5254
Reports Available on the World Wide Web
@ www.securitieslink.net/cmbs
PAYMENT DATE: 11/4/98
RECORD DATE: 10/30/98
DELINQUENCY LOAN DETAIL
<TABLE>
<CAPTION>
Offering # of Current Outstanding Status of Resolution
Loan Document Months Paid Through P&I P&I Mortgage Strategy Servicing
Number Cross-Reference Delinq. Date Advances Advances** Loan (1) Code(2) Transfer Date
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
Totals
- --------------------------------------------------------------------------------------------------------------------
<CAPTION>
Current Outstanding
Loan Foreclosure Servicing Servicing REO
Number Date Advances Advances Bankruptcy Date Date
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------
Totals
- ---------------------------------------------------------------------
</TABLE>
(1) Status of Mortgage Loan
A - Payment Not Received But Still in
Grace Period
B - Late Payment But Less
Than 1 Month Delinquent
0 - Current
1 - One Month Delinquent
2 - Two Months Delinquent
3 - Three Or More Months Delinquent
4 - Assumed Scheduled Payment
(Performing Matured Balloon)
7 - Foreclosure
9 - REO
(2) Resolution Strategy Code
1 - Modification
2 - Foreclosure
3 - Bankruptcy
4 - Extension
5 - Note Sale
6 - DPO
7 - REO
8 - Resolved
9 - Pending Return
to Master Servicer
10 - Deed In Lieu Of
Foreclosure
** Outstanding P & I Advances include the current period advance
Copyright 1997, Norwest Bank Minnesota, N.A.
<PAGE>
[NORWEST BANKS LOGO]
NORWEST BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
3 NEW YORK PLAZA, 15TH FLOOR
NEW YORK, NY 10004
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1998-XL2
For Additional Information, please contact
Leslie Gaskill
(212) 515-5254
Reports Available on the World Wide Web
@ www.securitieslink.net/cmbs
PAYMENT DATE: 11/4/98
RECORD DATE: 10/30/98
SPECIALLY SERVICED LOAN DETAIL - PART 1
<TABLE>
<CAPTION>
Offering Servicing Resolution Net
Distribution Loan Document Transfer Strategy Scheduled Property Interest Actual Operating
Date Number Cross Reference Date Code (1) Balance Type (2) State Rate Balance Income
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Remaining
Distribution NOI Note Maturity Amortization
Date Date DSCR Date Date Term
- --------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------
</TABLE>
(1) Resolution Strategy Code
1 - Modification
2 - Foreclosure
3 - Bankruptcy
4 - Extension
5 - Note Sale
6 - DPO
7 - REO
8 - Resolved
9 - Pending Return
to Master Servicer
10 - Deed In Lieu Of Foreclosure
(2) Property Type Code
MF - Multi-Family
RT - Retail
HC - Health Care
IN - Industrial
WH - Warehouse
MH - Mobile Home Park
OF - Office
MU - Mixed Use
LO - Lodging
SS - Self Storage
OT - Other
Copyright 1997, Norwest Bank Minnesota, N.A.
<PAGE>
[NORWEST BANKS LOGO]
NORWEST BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
3 NEW YORK PLAZA, 15TH FLOOR
NEW YORK, NY 10004
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1998-XL2
For Additional Information, please contact
Leslie Gaskill
(212) 515-5254
Reports Available on the World Wide Web
@ www.securitieslink.net/cmbs
PAYMENT DATE: 11/4/98
RECORD DATE: 10/30/98
SPECIALLY SERVICED LOAN DETAIL-PART 2
<TABLE>
<CAPTION>
Distribution Loan Document Strategy Inspection Appraisal Appraisal Other REO
Date Number Cross-Reference Code (1) Date Phase 1 Date Date Value Property Revenue Comment
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Resolution Strategy Code
1 - Modification
2 - Foreclosure
3 - Bankruptcy
4 - Extension
5 - Note Sale
6 - DPO
7 - REO
8 - Resolved
9 - Pending Return
to Master Servicer
10 - Deed In Lieu Of Foreclosure
Copyright 1997, Norwest Bank Minnesota, N.A.
<PAGE>
[NORWEST BANKS LOGO]
NORWEST BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
3 NEW YORK PLAZA, 15TH FLOOR
NEW YORK, NY 10004
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1998-XL2
For Additional Information, please contact
Leslie Gaskill
(212) 515-5254
Reports Available on the World Wide Web
@ www.securitieslink.net/cmbs
PAYMENT DATE: 11/4/98
RECORD DATE: 10/30/98
MODIFIED LOAN DETAIL
<TABLE>
<CAPTION>
Offering
Loan Document Pre-Modification
Number Cross Reference Balance Modification Date Modification Description
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
Total
- -----------------------------------------------------------------------------------------------
</TABLE>
Copyright 1997, Norwest Bank Minnesota, N.A.
<PAGE>
[NORWEST BANKS LOGO]
NORWEST BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
3 NEW YORK PLAZA, 15TH FLOOR
NEW YORK, NY 10004
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1998-XL2
For Additional Information, please contact
Leslie Gaskill
(212) 515-5254
Reports Available on the World Wide Web
@ www.securitieslink.net/cmbs
PAYMENT DATE: 11/4/98
RECORD DATE: 10/30/98
LIQUIDATED LOAN DETAIL
<TABLE>
<CAPTION>
Final Recovery Offering Gross Proceeds Aggregate
Loan Determination Document Appraisal Appraisal Actual Gross as a % of Liquidation
Number Date Cross-Reference Date Value Balance Proceeds Actual Balance Expenses*
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Current Total
- -----------------------------------------------------------------------------------------------------------------------------------
Cumulative Total
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Net Net Proceeds Repurchased
Loan Liquidation as a % of Realized by Seller
Number Proceeds Actual Balance Loss (Y/N)
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------
Current Total
- ----------------------------------------------------------------------------
Cumulative Total
- ----------------------------------------------------------------------------
</TABLE>
* Aggregate liquidation expenses also include outstanding P & I advances and
unpaid fees (servicing, trustee, etc.).
Copyright 1997, Norwest Bank Minnesota, N.A.
<PAGE>
EXHIBIT J
[Reserved]
<PAGE>
EXHIBIT K
FORM OF REGULATION S TRANSFER CERTIFICATE
Norwest Bank Minnesota, National Association, as Trustee
and Certificate Registrar
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479-1026
Attention: Corporate Trust Services (CMBS)--
Morgan Stanley Capital I Inc., Series 1998-XL2
Re: Transfer of Morgan Stanley Capital I Inc., Commercial Mortgage
Past-Through Certificates, Series 1998-XL2, Class [ ]
Ladies and Gentlemen:
This certificate is delivered pursuant to Section 5.02 of the Pooling and
Servicing Agreement dated as of October 1, 1998 (the "Pooling and Servicing
Agreement"), by and among Morgan Stanley Capital I Inc., as depositor, Midland
Loan Services, Inc., as servicer (the "Servicer"), Midland Loan Services, Inc.,
as special servicer (the "Special Servicer"), and Norwest Bank Minnesota,
National Association, as trustee (the "Trustee"), on behalf of the holders of
the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, 1998-XL2, Class [ ] (the "Certificates") in connection with the
transfer by the undersigned (the "Transferor") to ____________(the "Transferee")
of $_____________________ Certificate Principal Amount of Certificates, in fully
registered form (each, an "Individual Certificate"), or a beneficial interest of
such aggregate Certificate Principal Amount in the Regulation S Global
Certificate (the "Global Certificate") maintained by The Depository Trust
Company or its successor as Depositary under the Pooling and Servicing Agreement
(such transferred interest, in either form, being the "Transferred Interest").
In connection with such transfer, the Transferor does hereby certify that
such transfer has been effected in accordance with the transfer restrictions set
forth in the Pooling and Servicing Agreement and the Certificates and (i) with
respect to transfers made in accordance with Regulation S ("Regulation S")
promulgated under the Securities Act of 1933, as amended (the "Securities Act"),
the Transferor does hereby certify that:
(1) the offer of the Transferred Interest was not made to a person in the
United States;
[(2) at the time the buy order was originated, the Transferee was outside
the United States or the Transferor and any person acting on its behalf
reasonably believed that the Transferee was outside the United States;]*
[(2) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither the undersigned nor any person
acting on its behalf knows that the transaction was pre-arranged with a buyer in
the United States;]*
(3) no directed selling efforts have been made in contravention of the
requirements of Rule 903(b) or 904(b) of Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.
or (ii) with respect to transfers made in reliance on Rule 144 under the
Securities Act, the Transferor does hereby certify that the Certificates that
are being transferred are not "restricted securities" as defined in Rule 144
under the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Depositor, the Trustee, the Servicer and the
Special Servicer.
--------------------------------
Transferor
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
Dated: _________ __, 199_
- ---------
*Insert one of these two provisions, which come from the definition of "offshore
transaction" in Regulation S.
<PAGE>
EXHIBIT L
FORM OF TRANSFER CERTIFICATE
FOR EXCHANGE OR TRANSFER FROM RULE 144A
GLOBAL CERTIFICATE TO REGULATION S GLOBAL
CERTIFICATE DURING THE RESTRICTED PERIOD
(Exchanges or transfers pursuant to
Section 5.02(c)(ii)(A) of the Pooling and Servicing Agreement)
Norwest Bank Minnesota, National Association, as Trustee
and Certificate Registrar
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479-1026
Attention: Corporate Trust Services (CMBS)--
Morgan Stanley Capital I Inc., Series 1998-XL2
Re: Transfer of Morgan Stanley Capital I Inc., Commercial Mortgage
Pass-Through Certificates, Series 1998-XL2 Class [ ]
Reference is hereby made to the Pooling and Servicing Agreement dated as of
October 1, 1998 (the "Pooling and Servicing Agreement"), by and among Morgan
Stanley Capital I Inc., as depositor (the "Depositor"), Midland Loan Services,
Inc., as servicer (the "Servicer"), Midland Loan Services, Inc., as special
servicer (the "Special Servicer") and Norwest Bank Minnesota, National
Association, as trustee (the "Trustee"). Capitalized terms used but not defined
herein shall have the meanings given to them in the Pooling and Servicing
Agreement.
This letter relates to US $[__________] aggregate Certificate Principal
Amount of Certificates (the "Certificates") which are held in the form of the
Rule 144A Global Certificate (CUSIP No. ) with the Depository in the name of
[insert name of transferor] (the "Transferor"). The Transferor has requested a
transfer of such beneficial interest for an interest in the Regulation S Global
Certificate (CUSIP No. ) to be held with [Euroclear] [CEDEL]* (Common Code )
through the Depositary.
In connection with such request and in respect of such Certificates, the
Transferor does hereby certify that such transfer has been effected in
accordance with the transfer restrictions set forth in the Pooling and Servicing
Agreement and pursuant to and in accordance with Regulation S under the
Securities Act of 1933, as amended (the "Securities Act"), and accordingly the
Transferor does hereby certify that:
(1) the offer of the Certificates was not made to a person in the United
States,
[(2) at the time the buy order was originated, the transferee was outside
the United States or the Transferor and any persons acting on its behalf
reasonably believed that the transferee was outside the United States,]**
[(2) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither the Transferor nor any person
acting on its behalf knows that the transaction was prearranged with a buyer in
the United States,]**
(3) no directed selling efforts have been made in contravention of the
requirements of Rule 903(b) or 904(b) of Regulation S, as applicable, and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Depositor, the Trustee, the Servicer and the
Special Servicer.
[Insert Name of Transferor]
By:
------------------------
Name:
Title:
Dated: _____________, ____
- ----------
**Insert one of these two provisions, which come from the definition of
"offshore transaction" in Regulation S.
<PAGE>
EXHIBIT M
FORM OF TRANSFER CERTIFICATE
FOR EXCHANGE OR TRANSFER FROM RULE 144A
GLOBAL CERTIFICATE TO REGULATION S GLOBAL
CERTIFICATE AFTER THE RESTRICTED PERIOD
(Exchange or transfers pursuant to
Section 5.02(c)(ii)(B) of the Pooling and Servicing Agreement)
Norwest Bank Minnesota, National Association, as Trustee
and Certificate Registrar
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479-1026
Attention: Corporate Trust Services (CMBS)--
Morgan Stanley Capital I Inc., Series 1998-XL2
Re: Transfer of Morgan Stanley Capital I Inc., Commercial Mortgage
Pass-Through Certificates, Series 1998-XL2, Class [ ]
Reference is hereby made to the Pooling and Servicing Agreement dated as of
October 1, 1998 (the "Pooling and Servicing Agreement"), by and among Morgan
Stanley Capital I Inc., as depositor, Midland Loan Services, Inc., as servicer
(the "Servicer"), Midland Loan Services, Inc., as special servicer (the "Special
Servicer") and Norwest Bank Minnesota, National Association, as trustee (the
"Trustee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Pooling and Servicing Agreement.
This letter relates to US $[__________] aggregate Certificate Principal
Amount of Certificates (the "Certificates") which are held in the form of the
Rule 144A Global Certificate (CUSIP No. ) with the Depository in the name of
[insert name of transferor] (the "Transferor"). The Transferor has requested a
transfer of such beneficial interest in the Certificates for an interest in the
Regulation S Global Certificate (Common Code No. ).
In connection with such request, and in respect of such Certificates, the
Transferor does hereby certify that such transfer has been effected in
accordance with the transfer restrictions set forth in the Pooling and Servicing
Agreement and, (i) with respect to transfers made in reliance on Regulation S
under the Securities Act of 1933, as amended (the "Securities Act"), the
Transferor does hereby certify that:
(1) the offer of the Certificates was not made to a person in the United
States,
[(2) at the time the buy order was originated, the transferee was outside
the United States or the Transferor and any person acting on its behalf
reasonably believed that the transferee was outside the United States,]*
[(2) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither the Transferor nor any person
acting on its behalf knows that the transaction was prearranged with a buyer in
the United States,]*
(3) no directed selling efforts have been made in contravention of the
requirements of Rule 903(b) or 904(b) of Regulation S, as applicable, and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act;
or (ii) with respect to transfers made in reliance on Rule 144 under the
Securities Act, the Transferor does hereby certify that the Certificates that
are being transferred are not "restricted securities" as defined in Rule 144
under the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Depositor, the Trustee, the Servicer and the
Special Servicer.
[Insert Name of Transferor]
By:
------------------------
Name:
Title:
Dated: ____ __, ____
- ----------
**Insert one of these two provisions, which come from the definition of
"offshore transaction" in Regulation S.
<PAGE>
EXHIBIT N
FORM OF TRANSFER CERTIFICATE
FOR EXCHANGE OR TRANSFER FROM REGULATION S GLOBAL
CERTIFICATE TO RULE 144A GLOBAL CERTIFICATE
(Exchange or transfers pursuant to
Section 5.02(c)(ii)(C) of the Pooling and Servicing Agreement)
[Certificate Registrar]
Attention: Corporate Trust Administration
Re: Transfer of Morgan Stanley Capital I Inc., Commercial Mortgage
Pass-Through Certificates, Series 1998-XL2, Class [ ]
Reference is hereby made to the Pooling and Servicing Agreement dated as of
October 1, 1998 (the "Pooling and Servicing Agreement"), by and among Morgan
Stanley Capital I Inc., as depositor (the "Depositor"), Midland Loan Services,
Inc., as servicer (the "Servicer"), Midland Loan Services, Inc., as special
servicer (the "Special Servicer") and Norwest Bank Minnesota, National
Association, as trustee (the "Trustee"). Capitalized terms used but not defined
herein shall have the meanings given to them in the Pooling and Servicing
Agreement.
This letter relates to US $[__________] aggregate Certificate Principal
Amount of Certificates (the "Certificates") which are held in the form of the
Regulation S Global Certificate (CUSIP No. __________) with [Euroclear] [CEDEL]*
(Common Code __________) through the Depository in the name of [insert name of
transferor] (the "Transferor"). The Transferor has requested a transfer of such
beneficial interest in the Certificates for an interest in the Regulation 144A
Global Certificate (CUSIP No. __________).
In connection with such request, and in respect of such Certificates, the
Transferor does hereby certify that such Certificates are being transferred in
accordance with (i) the transfer restrictions set forth in the Pooling and
Servicing Agreement and (ii) Rule 144A under the Securities Act to a transferee
that the Transferor reasonably believes is purchasing the Certificates for its
own account with respect to which the transferee exercises sole investment
discretion and the transferee and any such account is a "qualified institutional
buyer" within the meaning of Rule 144A, in each case in a transaction meeting
the requirements of Rule 144A and in accordance with any applicable securities
laws of any state of the United States or an jurisdiction.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Depositor, the Trustee, the Servicer, the Special
Servicer and Morgan Stanley & Co. Incorporated, the Placement Agent of the
offering of the Certificates.
[Insert Name of Transferor]
By:
------------------------
Name:
Title:
Dated: ____ __, 19__
- --------
* Select appropriate depository.
