SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 22, 1997
MORGAN STANLEY CAPITAL I INC.
(Exact name of registrant as specified in its charter)
DELAWARE 333-26667
(State or Other Jurisdiction Incorporation) (Commission File Number)
13-3291626
(I.R.S. Employer Identification Number)
---------------------------
1585 Broadway
2nd Floor
New York, New York 10036
(principal executive offices)
(212) 761-4000
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
On December 30, 1997, a single series of certificates, entitled Aetna
Mortgage Trust Multiclass Pass-Through Certificates, Series 1997-ALIC (the
"Certificates"), was issued pursuant to a pooling and servicing agreement dated
as of December 1, 1997 (the "Pooling and Servicing Agreement"), attached hereto
as Exhibit 4.1, among Morgan Stanley Capital I Inc. (the "Depositor") as
depositor, Midland Loan Services, L.P., as master servicer, Aetna Life Insurance
Company, as special servicer and State Street Bank and Trust Company, as
Trustee. The Certificates consist of seventeen classes identified as the "Class
A-1A Certificates", the "Class A-1B Certificates", the "Class A-2 Certificates",
the "Class IO Certificates", the "Class B Certificates", the "Class C
Certificates", the "Class D Certificates", the "Class E Certificates", the
"Class F Certificates", the "Class G Certificates", the "Class H Certificates",
the Class J Certificates", the "Class K Certificates", the "Class L
Certificates", the "Class V Certificates", the "Class W Certificates", and the
"Class R Certificate", respectively, and were issued in exchange for, and
evidence the entire beneficial ownership interest in, the assets of a trust fund
(the "Trust Fund") consisting primarily of a segregated pool (the "Mortgage
Pool") of 40 fixed rate, multifamily and commercial mortgage loans (the
"Mortgage Loans") having, as of the close of business on December 1, 1997 (the
"Cut-off Date"), an aggregate principal balance of $802,696,189, after taking
into account all payments of principal due on the Mortgage Loans on or before
such date, whether or not received.
<PAGE>
The Class A-1A Certificates have an initial Class Principal Balance of
$169,000,000. The Class A-1B Certificates have an initial Class Principal
Balance of $190,984,000. The Class A-2 Certificates have an initial Class
Principal Balance of $97,552,000. The Class IO Certificates have an initial
Class Notional Amount of $802,696,189. The Class B Certificates have an initial
Class Principal Balance of $64,216,000. The Class C Certificates have an initial
Class Principal Balance of $68,229,000. The Class D Certificates have an initial
Class Principal Balance of $48,162,000. The Class E Certificates have an initial
Class Principal Balance of $20,067,000. Capitalized terms used and not otherwise
defined herein shall have the meanings assigned to them in the Pooling and
Servicing Agreement.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
(a) Financial Statements of Business Acquired
Not applicable.
(b) Pro Forma Financial Information
Not applicable.
(c) Exhibits.
Exhibit No.
of Item 601 of
Exhibit No. Regulation S-K Description
- ----------- -------------- -----------
4.1 4 Pooling and Servicing Agreement
dated as of December 1, 1997 among
Morgan Stanley Capital I Inc. as
depositor, Midland Loan Services, L.P.,
as master servicer, Aetna Life Insurance
Company, as special servicer and State
Street Bank and Trust Company, as
Trustee.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: January 2, 1998
MORGAN STANLEY & CO. INCORPORATED
By: /s/ Russell Rahbany
----------------------
Name: Russell Rahbany
Title: Vice President
3
================================================================================
MORGAN STANLEY CAPITAL I INC.,
as Depositor,
and
MIDLAND LOAN SERVICES, L.P.,
as Master Servicer,
and
AETNA LIFE INSURANCE COMPANY,
as Special Servicer and Seller
and
STATE STREET BANK AND TRUST COMPANY,
as Trustee
-------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of December 1, 1997
-------------------------------
AETNA COMMERCIAL MORTGAGE TRUST MULTICLASS PASS-THROUGH CERTIFICATES
Series 1997-ALIC
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
PRELIMINARY STATEMENT........................................................ 1
ARTICLE I
DEFINITIONS
Section 1.1 Definitions................................................... 5
Section 1.2 Certain Calculations in Respect of the REMIC Mortgage Pool.... 46
Section 1.3 Disqualification.............................................. 47
Section 1.4 Interpretation................................................ 47
ARTICLE II
DECLARATION OF TRUST;
ISSUANCES OF CERTIFICATES
Section 2.1 Conveyance of Mortgage Loans.................................. 48
Section 2.2 Acceptance by Trustee......................................... 49
Section 2.3 Seller's Repurchase of Mortgage Loans for Document Defects
and Breaches of Representations and Warranties................ 50
Section 2.4 Representations and Warranties................................ 52
Section 2.5 Conveyance of Interests....................................... 53
Section 2.6 Grantor Trust................................................. 53
ARTICLE III
THE CERTIFICATES
Section 3.1 The Certificates.............................................. 53
Section 3.2 Registration.................................................. 54
Section 3.3 Transfer and Exchange of Certificates......................... 54
Section 3.4 Mutilated, Destroyed, Lost or Stolen Certificates............. 60
Section 3.5 Persons Deemed Owners......................................... 60
Section 3.6 Book-Entry Certificates....................................... 60
Section 3.7 Notices to Clearing Agency.................................... 61
Section 3.8 Definitive Certificates....................................... 61
ARTICLE IV
ADVANCES
Section 4.1 P&I Advances by Master Servicer............................... 62
Section 4.2 Servicing Advances............................................ 63
Section 4.3 Advances by Trustee........................................... 63
Section 4.4 Evidence of Nonrecoverability................................. 64
Section 4.5 Advance Interest.............................................. 64
Section 4.6 Seller and Special Servicer Advances.......................... 64
-i-
<PAGE>
Page
----
ARTICLE V
COLLECTION ACCOUNT; DISTRIBUTION ACCOUNT;
CERTAIN TRUSTEE REPORTS
Section 5.1 Collection Account............................................ 65
Section 5.2 Application of Funds in the Collection Account................ 68
Section 5.3 Distribution Account.......................................... 70
Section 5.4 Trustee Reports; Access to Information........................ 71
Section 5.5 Trustee Tax Reports........................................... 73
ARTICLE VI
DISTRIBUTIONS
Section 6.1 Distributions Generally....................................... 74
Section 6.2 REMIC I....................................................... 75
Section 6.3 REMIC II...................................................... 76
Section 6.4 REMIC III..................................................... 79
Section 6.5 Allocation of Realized Losses and Expense Losses.............. 85
Section 6.6 Appraisal Reductions. ........................................ 85
Section 6.7 Compliance with Withholding Requirements...................... 86
ARTICLE VII
CONCERNING THE TRUSTEE
Section 7.1 Duties of Trustee............................................. 86
Section 7.2 Certain Matters Affecting the Trustee......................... 87
Section 7.3 Trustee Not Liable for Certificates or Interests or
Mortgage Loans................................................ 89
Section 7.4 Trustee May Own Certificates.................................. 89
Section 7.5 Eligibility Requirements for Trustee.......................... 89
Section 7.6 Resignation and Removal of Trustee............................ 90
Section 7.7 Successor Trustee............................................. 91
Section 7.8 Merger or Consolidation of Trustee............................ 91
Section 7.9 Appointment of Co-Trustee, Separate Trustee or Custodian...... 91
Section 7.10 Authenticating Agents......................................... 93
Section 7.11 Indemnification of Trustee.................................... 94
Section 7.12 Fees and Expenses of Trustee.................................. 95
Section 7.13 Collection of Moneys.......................................... 95
Section 7.14 Notification to Holders....................................... 95
Section 7.15 Representations and Warranties of the Trustee................. 95
ARTICLE VIII
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 8.1 Servicing Standard; General Powers and Duties................. 96
Section 8.2 Collection of Mortgage Loan Payments.......................... 99
-ii-
<PAGE>
Page
----
Section 8.3 Collection of Taxes, Assessments and Similar Items;
Servicing Accounts and Reserve Accounts..................... 100
Section 8.4 Sub-Servicing Agreements..................................... 101
Section 8.5 Maintenance of Insurance Policies; Errors and Omissions and
Fidelity Coverage............................................ 102
Section 8.6 Enforcement of Due-On-Sale Clauses; Assumption Agreements;
Subordinate Financing........................................ 104
Section 8.7 Realization Upon Defaulted Mortgage Loans.................... 105
Section 8.8 Trustee to Cooperate; Release of Mortgage Files.............. 108
Section 8.9 Documents, Records and Funds in Possession of Master
Servicer or Special Servicer to be Held for the Trustee
for the Benefit of the Certificateholders.................... 109
Section 8.10 Servicing Compensation....................................... 109
Section 8.11 Master Servicer Reports; Account Statements.................. 112
Section 8.12 Annual Statement as to Compliance............................ 113
Section 8.13 Annual Independent Public Accountants' Servicing Report...... 113
Section 8.14 Certain Reports Regarding the Mortgage Loans and the
Mortgaged Properties ........................................ 114
Section 8.15 Certain Available Information and Related Rights of the
Master Servicer and the Special Servicer..................... 115
Section 8.16 Rule 144A Information........................................ 116
Section 8.17 Inspections; Collection of Financial Statements.............. 117
Section 8.18 Modifications, Waivers, Amendments and Consents.............. 118
Section 8.19 Title to REO Property........................................ 121
Section 8.20 Management of REO Property................................... 122
Section 8.21 Additional Obligations of the Master Servicer................ 125
Section 8.22 Representations, Warranties and Covenants of the Master
Servicer and the Special Servicer............................ 125
Section 8.23 Merger or Consolidation...................................... 128
Section 8.24 Resignation of Master Servicer or Special Servicer........... 129
Section 8.25 Assignment or Delegation of Duties by Master Servicer or the
Special Servicer............................................. 129
Section 8.26 Limitation on Liability of Master Servicer, Special Servicer
and Others................................................... 130
Section 8.27 Indemnification; Third-Party Claims.......................... 131
Section 8.28 Tax Reporting................................................ 132
Section 8.29 Certain Special Servicer Reports............................. 132
Section 8.30 Qualification to Service..................................... 133
Section 8.31 Sale of Defaulted Mortgage Loans and REO Properties.......... 133
Section 8.32 Operating Adviser; Elections................................. 136
Section 8.33 Duties of Operating Adviser.................................. 136
Section 8.34 Exchange Act Reporting....................................... 137
ARTICLE IX
DEFAULT
Section 9.1 Events of Default............................................ 138
Section 9.2 Trustee to Act; Appointment of Successor..................... 140
Section 9.3 Notification to Certificateholders........................... 141
Section 9.4 Waiver of Events of Default.................................. 141
-iii-
<PAGE>
Page
----
ARTICLE X
PURCHASE AND
TERMINATION OF THE TRUST
Section 10.1 Termination of Trust......................................... 142
Section 10.2 Procedure Upon Termination of Trust.......................... 143
Section 10.3 Additional Trust Termination Requirements.................... 144
ARTICLE XI
RIGHTS OF CERTIFICATEHOLDERS
Section 11.1 Limitation on Rights of Holders.............................. 145
Section 11.2 Access to List of Holders.................................... 145
Section 11.3 Acts of Holders of Certificates.............................. 146
ARTICLE XII
REMIC ADMINISTRATION
Section 12.1 REMIC Administration......................................... 147
Section 12.2 Prohibited Transactions and Activities....................... 152
Section 12.3 Liability with Respect to Certain Taxes and Loss of REMIC
Status....................................................... 152
Section 12.4 Modifications of Mortgage Loans.............................. 153
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.1 Binding Nature of Agreement.................................. 153
Section 13.2 Entire Agreement............................................. 153
Section 13.3 Amendment.................................................... 153
Section 13.4 GOVERNING LAW................................................ 154
Section 13.5 Notices...................................................... 154
Section 13.6 Severability of Provisions................................... 155
Section 13.7 Indulgences; No Waivers...................................... 155
Section 13.8 Headings Not to Affect Interpretation........................ 155
Section 13.9 Benefits of Agreement........................................ 155
Section 13.10 Special Notices to the Rating Agencies....................... 155
Section 13.11 Counterparts................................................. 156
Section 13.12 Intention of Parties......................................... 157
Section 13.13 Recordation of Agreement..................................... 158
Section 13.14 Massachusetts Filings........................................ 158
-iv-
<PAGE>
EXHIBITS
Exhibit A-1 Form of Class A-1A Certificate.............................. A-1
Exhibit A-2 Form of Class A-1B Certificate.............................. A-2
Exhibit A-3 Form of Class A-2 Certificate............................... A-3
Exhibit A-4 Form of Class B Certificate................................. A-4
Exhibit A-5 Form of Class C Certificate................................. A-5
Exhibit A-6 Form of Class D Certificate................................. A-6
Exhibit A-7 Form of Class E Certificate................................. A-7
Exhibit A-8 Form of Class F Certificate................................. A-8
Exhibit A-9 Form of Class G Certificate................................. A-9
Exhibit A-10 Form of Class H Certificate.................................A-10
Exhibit A-11 Form of Class J Certificate.................................A-11
Exhibit A-12 Form of Class K Certificate.................................A-12
Exhibit A-13 Form of Class L Certificate.................................A-13
Exhibit A-14 Form of Class IO Certificate................................A-14
Exhibit A-15 Form of Class R Certificate.................................A-15
Exhibit A-16 Form of Class V Certificate.................................A-16
Exhibit A-17 Form of Class W Certificate.................................A-17
Exhibit A-18 Form of Class R-I Certificate...............................A-18
Exhibit A-19 Form of Class R-II Certificate..............................A-19
Exhibit A-20 Form of Class R-III Certificate.............................A-20
Exhibit B-1 Form of Initial Certification of Trustee.................... B-1
Exhibit B-2 Form of Final Certification of Trustee...................... B-2
Exhibit C Form of Request for Release................................... C
Exhibit D-1 Form of Transferor Certificate for Transfers of Definitive
Certificates................................................ D-1
Exhibit D-2A Form I of Transferee Certificate for Transfers of
Definitive Non-Registered Certificates......................D-2A
Exhibit D-2B Form II of Transferee Certificate for Transfers of
Definitive Non-Registered Certificates......................D-2B
Exhibit D-3A Form I of Transferee Certificate for Transfers of
Book-Entry Non-Registered Certificates.....................D-3A
Exhibit D-3B Form II of Transferee Certificate for Transfers of
Book-Entry Non-Registered Certificates.....................D-3B
Exhibit E-1A Form of Transfer Affidavit and Agreement for Transfers of
Residual Certificates.......................................E-1A
Exhibit E-1B Form of Transferor Certificate for Transfers of Residual
Certificates................................................E-1B
Exhibit F-1 Form of Monthly Certificateholder Report.................... F-1
Exhibit F-2 Form of Special Servicer Monthly Report..................... F-2
Exhibit F-3 Form of Specially Serviced Asset Report..................... F-3
Exhibit G Operating Statement Analysis................................ G-1
SCHEDULES
Schedule I REMIC Mortgage Loan Schedule................................. I
Schedule II Non-REMIC Asset Schedule..................................... II
Schedule III Non-REMIC Fees Schedule...................................... III
-v-
<PAGE>
THIS POOLING AND SERVICING AGREEMENT is dated and effective as of December
1, 1997 among MORGAN STANLEY CAPITAL I INC., as depositor (the "Depositor"),
MIDLAND LOAN SERVICES, L.P., as master servicer (the "Master Servicer"), AETNA
LIFE INSURANCE COMPANY, as special servicer (in such capacity, the "Special
Servicer") and seller of the Mortgage Loans (in such capacity, the "Seller") and
STATE STREET BANK AND TRUST COMPANY, as trustee (the "Trustee") of the trust
created hereby (the "Trust").
PRELIMINARY STATEMENT
On the Closing Date, the Depositor will acquire the Mortgage Loans from
Aetna Life Insurance Company, as seller ("Aetna" and, in such capacity, the
"Seller"); and, as of such date, the Depositor will be the owner of the Mortgage
Loans and the other property being conveyed by it to the Trustee for inclusion
in the Trust. On the Closing Date, the Depositor will acquire (i) the REMIC I
Regular Interests and the Class R-I Interests as consideration for its transfer
to the Trust of the REMIC Mortgage Loans and the other property constituting the
Trust (other than the Non-REMIC Assets and the Non-REMIC Fees); (ii) the REMIC
II Regular Interests and the Class R-II Interests as consideration for its
transfer of the REMIC I Regular Interests to the Trust; and (iii) the REMIC III
Regular Interests and the Class R-III Interests as consideration for its
transfer of the REMIC II Regular Interests to the Trust (as well as the REMIC
III Regular Certificates and the Class R Certificate, which Class R Certificate
shall represent the Class R-I Interests, the Class R-II Interests and the Class
R-III Interests (collectively, the "Residual Interests")) and (iv) the Class V
and the Class W Certificates in exchange for the transfer of the Non-REMIC
Assets and the Non-REMIC Fees to the Trust. The Depositor has duly authorized
the execution and delivery of this Agreement to provide for the foregoing and
the issuance of (a) the REMIC I Regular Interests and the Class R-I Interests
representing in the aggregate the entire beneficial ownership of REMIC I, (b)
the REMIC II Regular Interests and the Class R-II Interests representing in the
aggregate the entire beneficial ownership of REMIC II, (c) the REMIC III Regular
Interests and the Class R-III Interests representing in the aggregate the entire
beneficial ownership of REMIC III, (d) the REMIC III Regular Certificates and
the Class R Certificate, (e) the Class V Certificates representing in the
aggregate the entire beneficial ownership of the Non-REMIC Assets and (f) the
Class W Certificates representing in the aggregate the entire beneficial
ownership of the Non-REMIC Fees. All covenants and agreements made by the
Depositor and the Trustee herein with respect to the Mortgage Loans and the
other property constituting the Trust are for the benefit of the Holders of the
Certificates. The parties hereto are entering into this Agreement, and the
Trustee is accepting the trusts created hereby, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged.
<PAGE>
REMIC I
As provided herein, the Trustee will make an election for the segregated
pool of assets described in Section 12.1 hereof consisting of the REMIC Mortgage
Loans and certain related assets to be treated for federal income tax purposes
as a real estate mortgage investment conduit (a "REMIC" and, such particular
segregated pool of assets, "REMIC I"). The REMIC I Regular Interests will be
designated as the "regular interests" in REMIC I and the Class R-I Interests
will be designated as the sole class of "residual interests" in REMIC I.
On the Startup Day, one separate uncertificated REMIC I Regular Interest
will be issued with respect to each REMIC Mortgage Loan, so that there will be a
total of forty REMIC I Regular Interests issued. Each REMIC I Regular Interest
will have: (i) a remittance rate (a "REMIC I Remittance Rate") equal to the Net
Mortgage Rate of the related REMIC Mortgage Loan in effect as of the Closing
Date; (ii) a initial principal amount (an "Uncertificated Principal Balance")
equal to the Stated Principal Balance of the related REMIC Mortgage Loan as of
the CutOff Date; and (iii) a Latest Possible Maturity Date set to the first
Distribution Date that follows the Stated Maturity Date of the related REMIC
Mortgage Loan. The Class R-I Interests will constitute the sole class of
residual interests in REMIC I for purposes of the REMIC Provisions and will have
no principal balances and no remittance rate, but will be entitled to receive on
each Distribution Date any portion of the Available Distribution Amount for such
Distribution Date not otherwise deemed distributed on the REMIC I Regular
Interests.
REMIC II
As provided herein, the Trustee will make an election for the segregated
pool of assets described in Section 12.1 hereof consisting of the REMIC I
Regular Interests to be treated for federal income tax purposes as a REMIC (such
particular pool of assets "REMIC II"). The REMIC II Regular Interests will be
designated as the "regular interests" in REMIC II and the Class R-II Interests
will be designated as the sole class of "residual interests" in REMIC II for
purposes of the REMIC Provisions.
Thirteen separate uncertificated REMIC II Regular Interests will be issued
on the Startup Day. The following table irrevocably sets forth the designation,
remittance rate (the "REMIC II Remittance Rate") and initial Uncertificated
Principal Balance for each REMIC II Regular Interest. The Latest Possible
Maturity Date of each REMIC II Regular Interest shall be the first Distribution
Date that follows the Stated Maturity Date for the REMIC Mortgage Loan that has,
as of the Closing Date, the latest Stated Maturity Date. The Class R-II
Interests will have no principal balances and no remittance rate, but will be
entitled to receive on each Distribution Date any portion of the REMIC II
Distribution Amount for such Distribution Date not otherwise deemed distributed
on the REMIC II Regular Interests.
-2-
<PAGE>
REMIC II Regular Interests
Designation REMIC II Initial Uncertificated
- ----------- Remittance Rate Principal Balance
--------------- -----------------
A-1A 9.276% per annum $169,000,000
A-1B 9.276% per annum $190,984,000
A-2 9.276% per annum $ 97,552,000
B 9.276% per annum $ 64,216,000
C 9.276% per annum $ 68,229,000
D 9.276% per annum $ 48,162,000
E 9.276% per annum $ 20,067,000
F 9.276% per annum $ 44,148,000
G 9.276% per annum $ 8,027,000
H 9.276% per annum $ 14,047,000
J 9.276% per annum $ 26,088,000
K 9.276% per annum $ 20,067,000
L 9.276% per annum $ 32,109,189
- ----------
REMIC III
As provided herein, the Trustee will make an election for the segregated
pool of assets described in Section 12.1 hereof consisting of the REMIC II
Regular Interests to be treated for federal income tax purposes as a REMIC (such
particular pool of assets "REMIC III"). The REMIC III Regular Certificates will
be designated as the "regular interests" in REMIC III and the Class R-III
Interests will be designated as the sole class of "residual interests" in REMIC
III for purposes of the REMIC Provisions.
Fourteen separate Classes of REMIC III Regular Certificates will be issued
on the Startup Day. The following table irrevocably sets forth the designation,
the pass-through rate (the "Pass-Through Rate") and the initial aggregate
principal balance (the "Class Principal Balance") for each Class of REMIC III
Regular Certificates. The Latest Possible Maturity Date of each Class of REMIC
III Regular Certificates shall be the first Distribution Date that follows the
Stated Maturity Date for the REMIC Mortgage Loan that has, as of the Closing
Date, the latest Stated Maturity Date. The Class R-III Interests will have no
principal balances and no pass-through rate, but will be entitled to receive on
each Distribution Date any portion of the REMIC III Distribution Amount for such
Distribution Date not otherwise deemed distributed on the REMIC III Regular
Interests.
-3-
<PAGE>
REMIC III Regular Certificates(1)
Pass-Through Initial Class Principal Balance
Designation Rate or Notional Amount
- --------------- --------------- -------------------------------
Class IO Variable (2) $802,696,189(3)
Class A-1A 6.30% per annum $169,000,000
Class A-1B 6.44% per annum $190,984,000
Class A-2 5.99% per annum $ 97,552,000
Class B 6.71% per annum $ 64,216,000
Class C 6.84% per annum $ 68,229,000
Class D 7.23% per annum $ 48,162,000
Class E 7.55% per annum $ 20,067,000
Class F 6.30% per annum $ 44,148,000
Class G 6.30% per annum $ 8,027,000
Class H 6.30% per annum $ 14,047,000
Class J 6.30% per annum $ 26,088,000
Class K 6.30% per annum $ 20,067,000
Class L 6.30% per annum $ 32,109,189
- ----------
(1) Neither the Class V Certificates nor the Class W Certificates represent
beneficial interests in any of REMIC I, REMIC II or REMIC III or the REMIC
Mortgage Loans, and neither of such Classes of Certificates will be
entitled to receive distributions from the Available Distribution Amount.
(2) Calculated in accordance with the definition of "Pass-Through Rate".
(3) The Class IO Certificates do not have a Class Principal Balance and will
accrue interest (in an amount described in the definition of "Class IO
Accrued Certificate Interest") at the Class IO Pass-Through Rate on an
aggregate notional amount (a "Class Notional Amount") that is equal to the
sum of the Uncertificated Principal Balances of REMIC II Regular Interests
outstanding from time to time.
-4-
<PAGE>
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Whenever used in this Agreement, including without
limitation in the Preliminary Statement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
"Accountant" means a person engaged in the practice of accounting who is
Independent and is a member of the American Institute of Certified Public
Accountants.
"Accrued Certificate Interest" means, with respect to each Class of REMIC
III Regular Certificates (other than the Class IO Certificates) for any
Distribution Date, interest for the related Interest Accrual Period accrued at
the applicable Pass-Through Rate on the Class Principal Balance of such Class of
Certificates outstanding immediately prior to such Distribution Date (and, with
respect to the Class IO Certificates and any Distribution Date, the Class IO
Accrued Certificate Interest). The Accrued Certificate Interest in respect of
each Class of REMIC III Regular Certificates for each Distribution Date shall
accrue on the basis of a 360-day year consisting of twelve 30-day months.
"Acquisition Date" means the date upon which, under the Code (and in
particular the REMIC Provisions and Section 856(e) of the Code), the Trust or
REMIC I is deemed to have acquired an REO Property.
"Additional Master Servicing Compensation" has the meaning set forth in
Section 8.10(a).
"Additional Special Servicing Compensation" has the meaning set forth in
Section 8.10(b).
"Additional Trust Expense" means any of the following items: (i) Special
Servicer Fees, Workout Fees and Liquidation Fees (to the extent not collected
from the related Mortgagor), (ii) Advance Interest that cannot be reimbursed
from collections on the related REMIC Mortgage Loan or REO Property, (iii)
amounts paid to indemnify the Master Servicer, Special Servicer or Trustee (or
any other Person) pursuant to the terms of this Agreement, (iv) to the extent
not otherwise paid, any federal, state, or local taxes imposed on the Trust or
its assets and paid from amounts on deposit in the Collection Account or
Distribution Account, (v) the amount of any Advance that is not recovered from
the proceeds of a REMIC Mortgage Loan upon a Final Recovery Determination and
(vi) to the extent not included in the calculation of a Realized Loss and not
covered by indemnification by one of the parties hereto or otherwise, any other
unanticipated cost, liability, or expense (or portion thereof) of the Trust
(including costs of collecting such amounts or other Additional Trust Expenses)
which the Trust has not recovered, and in the judgment of the Master Servicer
(or Special Servicer, in the case of a Specially Serviced Mortgage Loan) will
not, recover from the related Mortgagor or Mortgaged Property or otherwise.
Notwithstanding anything to the contrary, "Additional Trust Expenses" shall not
include allocable overhead of the Master Servicer or Special Servicer, such as
costs for office space, office equipment, supplies and related expenses,
employee salaries and related expenses, and similar internal costs and expenses.
"Advance" means either a P&I Advance or a Servicing Advance.
-5-
<PAGE>
"Advance Interest" means interest payable pursuant to Section 4.5 to the
Master Servicer, or the Trustee on outstanding Advances made by any such Person
out of its own funds.
"Advance Report" means the report delivered by the Master Servicer to the
Trustee on the Advance Report Date in a form or format mutually agreed upon
between such parties setting forth the amount of actual Advances to be made by
the Master Servicer in respect of the related Distribution Date.
"Advance Report Date" means the Business Day prior to each Distribution
Date.
"Advance Rate" means a per annum rate equal to the Prime Rate as published
in the "Money Rates" section of The Wall Street Journal from time to time or
such other publication as determined by the Trustee in its reasonable
discretion.
"Adverse REMIC Event" means, with respect to any REMIC Pool, (i) the loss
or endangerment of the status of such REMIC Pool as a REMIC or (ii) except as
expressly permitted by Section 8.20(a), the imposition of a tax upon the income
of such REMIC Pool or any of its assets or transactions (including without
limitation the tax on prohibited transactions as defined in Code Section
860F(a)(2) or the tax on prohibited contributions set forth in Section 860G(d)
of the Code).
"Aetna" means Aetna Life Insurance Company or its successors in interest.
"Affiliate" means, with respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Aggregate Stated Principal Balance" means, at the time of any
determination and as the context may require, the aggregate of the Stated
Principal Balances for all REMIC Mortgage Loans (including without limitation
REO Mortgage Loans).
"Agreement" means this Pooling and Servicing Agreement and all amendments,
modifications and supplements hereto.
"Annual Report" means the report, if any, to be provided by the Master
Servicer to the Trustee pursuant to Section 8.14(b).
"Applicable State Law" means (a) the tax laws of the State of New York; and
(b) the tax laws of The Commonwealth of Massachusetts, and (c) 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.
"Appraisal" means an appraisal by a Qualified Appraiser that is conducted
in accordance with USPAP.
-6-
<PAGE>
"Appraisal Event" means, with respect to any REMIC Mortgage Loan (including
without limitation an REO Mortgage Loan), the earliest of (i) the date 90 days
after the occurrence of any delinquency in payment with respect to such REMIC
Mortgage Loan if such delinquency remains uncured, (ii) the date the related
Mortgagor files a bankruptcy petition or a receiver is appointed in respect of
the related Mortgaged Property, provided such petition or appointment is still
in effect, (iii) the effective date of any modification to a Money Term of a
REMIC Mortgage Loan, other than the extension of the date that a Balloon Payment
is due for a period of less than six months, and (iv) the date the related
Mortgaged Property becomes an REO Property.
"Appraisal Reduction" means, with respect to any Required Appraisal Loan
with respect to which an Appraisal or internal valuation is performed pursuant
to Section 6.6, an amount, calculated as of the first Determination Date that is
at least fifteen days after the date on which the report in respect of the most
recent such Appraisal or internal valuation, as the case may be, is obtained,
equal to the excess, if any, of (a) the sum of (i) the Stated Principal Balance
of such Required Appraisal Loan, (ii) to the extent not previously advanced, all
unpaid interest on such REMIC Mortgage Loan at the Mortgage Rate, (iii) all
unreimbursed Advances and interest on Advances at the Advance Rate with respect
to such REMIC Mortgage Loan, and (iv) to the extent funds on deposit in any
applicable Servicing Accounts are not sufficient therefor, all currently due and
unpaid real estate taxes and assessments, insurance premiums and, if applicable,
ground rents in respect of the related Mortgaged Property or REO Property, as
the case may be, over (b) 90% of the Appraised Value (net of any prior mortgage
liens) of the related Mortgaged Property or REO Property as determined by such
Appraisal or internal valuation, as the case may be; provided that, if an
internal valuation of the Mortgaged Property is performed, the Appraisal
Reduction will (unless and until an Appraisal, if any, is performed) equal the
greater of (x) the amount calculated above and (y) 25% of the Stated Principal
Balance of the Required Appraisal Loan. Each Appraisal or internal valuation for
a Required Appraisal Loan shall be updated annually. The Appraisal Reduction for
each Required Appraisal Loan will be recalculated based on subsequent
Appraisals, internal valuations or updates. Each Appraisal Reduction will be
reduced to zero as of the date the related REMIC Mortgage Loan is brought
current under the then current terms of the REMIC Mortgage Loan for at least
three consecutive months, paid in full, liquidated, repurchased or otherwise
disposed of.
"Appraised Value" means, with respect to any Mortgaged Property or REO
Property, the appraised value thereof determined by an Appraisal of such
property or, in the case of an internal valuation performed pursuant to Section
6.6, the value of such property determined by such internal valuation.
"Assignment of Leases" means, with respect to any Mortgage Loan, any
assignment of leases, rents and profits or equivalent instrument, whether
contained in the related Mortgage or executed separately, assigning to the
holder or holders of such Mortgage all of the related Mortgagor's interest in
the leases, rents and profits derived from the ownership, operation, leasing or
disposition of all or a portion of the related Mortgaged Property as security
for repayment of such Mortgage Loan.
"Assignment of Mortgage" means an assignment of the Mortgage, notice of
transfer or equivalent instrument, in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the transfer of the Mortgage to the Trustee, which assignment, notice of
transfer or equivalent instrument may be in the form of one or more
-7-
<PAGE>
blanket assignments covering the Mortgage Loans secured by Mortgaged Properties
located in the same jurisdiction, if permitted by law.
"Assumed Monthly Payment" means: (a) with respect to any Balloon Mortgage
Loan (other than a Balloon Mortgage Loan that has become an REO Mortgage Loan)
for its Stated Maturity Date (provided that such Mortgage Loan has not been paid
in full, and no other Liquidation Event has occurred in respect thereof, on or
before the end of the Collection Period in which such Stated Maturity Date
occurs) and for any subsequent Due Date therefor on which such Mortgage Loan
remains outstanding and part of the Trust Fund, if no Monthly Payment (other
than the related delinquent Balloon Payment) is due for such Due Date, the
scheduled monthly payment of principal and/or interest deemed to be due in
respect thereof for such Due Date equal to the Monthly Payment (other than any
related delinquent Balloon Payment) that would have been due in respect of such
Mortgage Loan on such Due Date if it had been required to continue to accrue
interest in accordance with its terms, and to pay principal in accordance with
the amortization schedule (if any), in effect immediately prior to, and without
regard to the occurrence of, its most recent scheduled Maturity Date; and (b)
with respect to any REO Mortgage Loan, for any Due Date therefor as of which the
related REO Property remains part of the Trust Fund, the scheduled monthly
payment of principal and/or interest deemed to be due in respect thereof on such
Due Date equal to the Monthly Payment (or, in the case of a Balloon Mortgage
Loan described in clause (a) of this definition, the Assumed Monthly Payment)
that was due in respect of the subject Mortgage Loan for the last Due Date prior
to its becoming an REO Mortgage Loan.
"Authenticating Agent" means any authenticating agent appointed by the
Trustee pursuant to Section 7.10.
"Authorized Officer" means any Person that may execute an Officer's
Certificate on behalf of the Depositor.
"Available Distribution Amount" means, (x) with respect to REMIC I and any
Distribution Date, an amount equal to the aggregate of (a) all amounts on
deposit in the Distribution Account and held by the Trustee in the REMIC
Distribution Subaccount as of the commencement of business on such Distribution
Date that represent payments and other collections on or in respect of the REMIC
Mortgage Loans and any related REO Properties that were received by the Master
Servicer or the Special Servicer through the end of the related Collection
Period (exclusive of any such amounts that were deposited in the Distribution
Account in error, that constitute any portion of Master Servicing Fees payable
to the Trustee in respect of unpaid Trustee Fees or that constitute Prepayment
Premiums and excluding any amounts held in the Non-REMIC Trust Distribution
Subaccount as described in Section 5.3 hereof) and (b) if and to the extent not
already among the amounts described in clause (a), (i) the aggregate amount of
any P&I Advances (and Advance Interest thereon) made by the Master Servicer or
the Trustee for such Distribution Date pursuant to Section 4.1 and/or Section
4.3, and (ii) the aggregate of any Compensating Interest Payments made by the
Master Servicer for such Distribution Date pursuant to Sections 8.21(c) and
8.21(d); and (y) with respect to REMIC II and any Distribution Date, all amounts
distributed on the REMIC I Regular Interests; and (z) with respect to REMIC III
and any Distribution Date, all amounts distributed on the REMIC II Regular
Interests.
"Balloon Mortgage Loan" means (i) any REMIC Mortgage Loan that by its
original terms or by virtue of any modification entered into as of the Closing
Date provides for an amortization schedule extending beyond its Maturity Date or
(ii) any Callable Mortgage Loan.
-8-
<PAGE>
"Balloon Payment" means, with respect to any Balloon Mortgage Loan as of
any date of determination, the Monthly Payment payable on the Maturity Date of
such Balloon Mortgage Loan.
"Balloon Payment Interest Excess" means, with respect to any Distribution
Date as to which a Balloon Payment was made by the related Mortgagor after the
next preceding Due Date for a Monthly Payment (not including a Balloon Payment)
(and as to which the Stated Maturity Date does not coincide with such Due Date),
an amount equal to the amount by which (x) the amount of interest received from
the related Mortgagor in respect of such REMIC Mortgage Loan included with such
Balloon Payment exceeds (y) 30 full days of interest at the related Net Mortgage
Rate on the Stated Principal Balance of such REMIC Mortgage Loan in respect of
which interest would have been due in the absence of such Balloon Payment on
such Due Date.
"Balloon Payment Interest Shortfall" means, with respect to any
Distribution Date as to which a Balloon Payment was made by the related
Mortgagor after the second preceding Due Date but prior to the next preceding
Due Date for a Monthly Payment (not including a Balloon Payment), (and as to
which the Stated Maturity Date does not coincide with such Due Date) an amount
equal to the amount by which (x) 30 full days of interest at the related Net
Mortgage Rate on the Stated Principal Balance of such REMIC Mortgage Loan in
respect of which interest would have been due in the absence of such Balloon
Payment on such Due Date exceeds (y) the amount of interest received from the
related Mortgagor in respect of such REMIC Mortgage Loan included with such
Balloon Payment.
"Bankruptcy Code" means, the federal bankruptcy code, as amended from time
to time (Title 11 of the United States Code).
"Benefit Plan Opinion" means an Opinion of Counsel satisfactory to the
Trustee to the effect that any proposed transfer will not (i) cause the assets
of the Trust to be regarded as plan assets for purposes of the Plan Asset
Regulations or (ii) give rise to any fiduciary duty on the part of the
Depositor, the Master Servicer, the Special Servicer or the Trustee.
"Book-Entry Certificates" means certificates evidencing a beneficial
interest in a Class of Certificates, ownership and transfer of which shall be
made through book entries as described in Section 3.6; provided, that after the
occurrence of a condition whereupon book-entry registration and transfer are no
longer authorized and Definitive Certificates are to be issued to the
Certificate Owners, such certificates shall no longer be "Book-Entry
Certificates."
"Breach" has the meaning set forth in Section 2.3(a).
"Business Day" means any day other than (i) a Saturday or a Sunday, (ii) a
legal holiday in New York, New York or in any of the principal cities in which
the Trustee, the Master Servicer or the Special Servicer conducts trust or
servicing operations with respect to this Agreement, or (iii) a day on which
banking institutions or savings associations in New York, New York or in any of
the principal cities in which the Trustee, the Master Servicer or the Special
Servicer conducts trust or servicing operations with respect to this Agreement,
are authorized or obligated by law or executive order to be closed.
"Call Date" means the first date as of which any Callable Mortgage Loan can
be required to be paid in full under the related Call Option.
-9-
<PAGE>
"Call Option" means, with respect to any Mortgage Loan, any provision
thereunder that permits the related Mortgagee, at its option, to require the
related Mortgagor to pay such Mortgage Loan in full prior to the applicable
Stated Maturity Date, notwithstanding that no default has occurred under such
Mortgage Loan.
"Callable Mortgage Loan" means any REMIC Mortgage Loan that, as of the
Closing Date, contains a Call Option.
"Cash Liquidation" means, as to any defaulted Mortgage Loan other than an
REO Mortgage Loan, the receipt of all related Insurance Proceeds, Condemnation
Proceeds, Liquidation Proceeds and other payments or recoveries in connection
with a Final Recovery Determination.
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended (42 U.S.C. ss. 9601, et seq.).
"Certificates" means the Depositor's Series 1997-ALIC Aetna Commercial
Mortgage Trust Multiclass Pass-Through Certificates issued hereunder.
"Certificate Factor" means, with respect to any Class of REMIC III Regular
Certificates, as of any date of determination, a fraction, expressed as a
decimal carried to eight places, the numerator of which is the then related
Class Principal Balance or Class Notional Amount, as the case may be, and the
denominator of which is the related initial Class Principal Balance or initial
Class Notional Amount, as the case may be, as of the Closing Date.
"Certificate Notional Amount" means, with respect to any Class IO
Certificate, as of any date of determination, the notional principal amount on
which such Certificate accrues interest, equal to the product of (a) the
Percentage Interest evidenced by such Certificate, multiplied by (b) the Class
IO Notional Amount on such date.
"Certificate Owner" means, with respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Certificate as reflected on the books
of the Clearing Agency or on the books of a Person maintaining an account with
the Clearing Agency directly or as an indirect participant, in accordance with
the rules of the Clearing Agency.
"Certificate Principal Balance" means, with respect to any Principal
Balance Certificate, as of any date of determination, the then outstanding
principal amount of such Certificate equal to the product of (a) the Percentage
Interest evidenced by such Certificate, multiplied by (b) the then Class
Principal Balance of the Class of Certificates to which such Certificate
belongs.
"Certificate Register" has the meaning provided in Section 3.2.
"Certificate Registrar" means the registrar appointed pursuant to Section
3.2.
"Certificateholder" has the same meaning as "Holder."
"Class" means, collectively, all of the Certificates bearing the same
alphabetical and, if applicable, numerical class designation.
-10-
<PAGE>
"Class A-1A Certificates," "Class A-1B Certificates," "Class A-2
Certificates," "Class IO Certificates," "Class B Certificates," "Class C
Certificates," "Class D Certificates," "Class E Certificates," "Class F
Certificates," "Class G Certificates," "Class H Certificates," "Class J
Certificates," "Class K Certificates" and "Class L Certificates," mean the
Certificates designated as "Class A-1A," "Class A-1B," "Class A-2," "Class IO,"
"Class B," "Class C," "Class D," "Class E," "Class F," "Class G," "Class H,"
"Class J," "Class K," and "Class L" respectively, on the faces thereof, in
substantially the forms attached hereto as Exhibits A-1 through A-14 hereof.
Such Classes of Certificates, together with the Class R Certificate may be
referred to herein as the "REMIC Certificates".
"Class A Certificates" means the Class A-1A Certificates, the Class A-1B
Certificates and the Class A-2 Certificates, collectively.
"Class Interest Shortfall" means, with respect to any Class of REMIC III
Regular Certificates and any Distribution Date (except the initial Distribution
Date, with respect to which the Class Interest Shortfall for each such Class
will equal zero), the sum of (a) the excess, if any, of (i) all Distributable
Certificate Interest in respect of such Class of Certificates for the
immediately preceding Distribution Date, over (ii) all distributions of
Distributable Certificate Interest made with respect to such Class of
Certificates on the immediately preceding Distribution Date pursuant to Section
6.4, and (b), to the extent permitted by applicable law, other than in the case
of the Class IO Certificates, interest for the related Interest Accrual Period
accrued at the Class IO Pass-Through Rate on the amount of any such excess
described in the immediately preceding clause (a). With respect to any Class of
REMIC III Regular Certificates, the interest referred to in clause (b) of the
preceding sentence shall accrue on the basis of a 360-day year consisting of
twelve 30-day months.
"Class IO Accrued Certificate Interest" means, with respect to any
Distribution Date, the excess (if any) of (i) the product of the REMIC II
Remittance Rate and the aggregate REMIC II Regular Interest Uncertificated
Principal Balances, in each case as of the relevant date of determination, over
(ii) the sum of the products of the Pass-Through Rate of each Class of Principal
Balance Certificates and each Class's respective Class Principal Balance as of
the relevant date of determination. The Class IO Accrued Certificate Interest
shall be calculated on the basis of a 360-day year consisting of twelve 30-day
months.
"Class IO Certificate Rate" means, with respect to any date of
determination, the excess of (x) the REMIC II Remittance Rate over (y) the
weighted average of the Pass-Through Rates of the Principal Balance Certificates
(weighted on the basis of the respective Certificate Principal Balances of such
Certificates).
"Class Notional Amount" means the aggregate notional principal amount with
respect to which Class IO Accrued Certificate Interest is determined from time
to time which, as of any date of determination, is equal to the sum of the
Uncertificated Principal Balances of the REMIC II Regular Interests.
"Class Principal Balance" means the aggregate principal amount of any Class
of Principal Balance Certificates outstanding as of any date of determination.
On each Distribution Date, the Class Principal Balance of each Class of the
Principal Balance Certificates shall be reduced by the amount of any
distributions of principal made thereon on such Distribution Date pursuant to
Section 6.4 and, if and to the extent appropriate, shall be further reduced on
such Distribution Date as provided in Section 6.5.
-11-
<PAGE>
"Class R Certificate" means the Class R Certificate designated as "Class R"
on the face thereof, in substantially the form attached hereto as Exhibit A-15
hereof, collectively representing the Class R-I, Class R-II and Class R-III
Interests.
"Class R-I Interests" means the sole class of "residual interests" in REMIC
I.
"Class R-II Interests" means the sole class of "residual interests" in
REMIC II.
"Class R-III Interests" means the sole class of "residual interests" in
REMIC III.
"Class V Certificates" means the Class V Certificates designated as "Class
V" on the face thereof, in substantially the form attached hereto as Exhibit
A-16 hereof, which evidence beneficial ownership of the Non-REMIC Assets and
proceeds thereof held in the Grantor Trust.
"Class W Certificates" means the Class W Certificates designated as "Class
W" on the face thereof, in substantially the form attached hereto as Exhibit
A-17 hereof, which evidence beneficial ownership of the Non-REMIC Fees and
proceeds thereof held in the Grantor Trust.
"Clearing Agency" shall mean an organization registered as a "clearing
agency" pursuant to Section 17A of the 1934 Act, which initially shall be the
Depository.
"Closing Date" means December 30, 1997.
"Code" means the Internal Revenue Code of 1986, as amended, any successor
statutes thereto, and applicable U.S. Department of Treasury regulations issued
pursuant thereto in temporary or final form and proposed regulations thereunder,
to the extent that, by reason of their proposed effective date, such proposed
regulations would apply to the Trust.
"Collection Account" has the meaning set forth in Section 5.1(a).
"Collection Period" means, with respect to the initial Distribution Date,
the period beginning on the day after the Cut-off Date and ending on the
Determination Date in the month in which such Distribution Date occurs and with
respect to any subsequent Distribution Date, the period beginning on the day
after the Determination Date in the calendar month preceding the month in which
such Distribution Date occurs and ending on the Determination Date in the
calendar month in which such Distribution Date occurs.
"Compensating Interest Payments" means, with respect to any Distribution
Date, any payments required to be made by the Master Servicer pursuant to
Section 8.21(d) to cover Prepayment Interest Shortfalls or Section 8.21(c) to
cover Balloon Payment Interest Shortfalls.
"Condemnation Proceeds" means any awards resulting from the full or partial
condemnation or any eminent domain proceeding or any conveyance in lieu or in
anticipation thereof with respect to a Mortgaged Property or REO Property by or
to any governmental or quasi-governmental authority.
"Controlling Class" means the most subordinate Class of Principal Balance
Certificates outstanding at any time of determination (or, if the then Class
Principal Balance of such Class of Certificates is less than 25% of the initial
Class Principal Balance thereof and there is a
-12-
<PAGE>
more senior Class of Principal Balance Certificates then outstanding, the next
most subordinate Class of Principal Balance Certificates). For purposes of
determining the Controlling Class, the Subordinate Certificates will be
subordinate to the Class A Certificates, and each Class of Subordinate
Certificates will be subordinate to each other Class of Subordinate
Certificates, if any, with an earlier alphabetical Class designation. As of the
Closing Date, the Controlling Class will be the Class L Certificates.
"Controlling Person" means, with respect to any Person, any other Person
that constitutes a controlling person within the meaning of Section 15 of the
Securities Act.
"Corporate Trust Office" means, with respect to the presentment and
surrender of Certificates for the final distribution thereon or the presentment
and surrender of Certificates for any other purpose, the principal corporate
trust office of the Trustee or the New York Presenting Office (if any). The
principal corporate trust office of the Trustee for such purpose is presently
located at 2 International Plaza - 4th Floor, Boston, MA 02110, Attention:
Corporate Trust Department, Bond Operations. For all other purposes, the
principal corporate trust office of the Trustee is at 2 International Place -
5th Floor, Boston, MA 02110, Attention: Corporate Trust Department, Ref. Aetna
Commercial Mortgage Trust Series Multiclass Pass-Through Certificates,
1997-ALIC, or at such other address as the Trustee may designate from time to
time by notice to the Certificateholders, the Depositor, the Master Servicer and
the Special Servicer.
"Corrected Mortgage Loan" has the meaning set forth in the definition of
"Specially Serviced Mortgage Loan" herein.
"Cross-Collateralized Mortgage Loans" means any two or more REMIC Mortgage
Loans listed on the Mortgage Loan Schedule as being cross-collateralized with
each other.
"Current Principal Distribution Amount" means for any Distribution Date, an
amount equal to the aggregate of:
(a) the principal portions of all Monthly Payments (other than Balloon
Payments) and any Assumed Monthly Payments due or deemed due, as the case may
be, in respect of the REMIC Mortgage Loans, including without limitation any REO
Mortgage Loans, for their respective Due Dates occurring during the related
Collection Period; and
(b) that portion of all payments (including without limitation Principal
Prepayments and Balloon Payments), Liquidation Proceeds, Condemnation Proceeds,
Insurance Proceeds, Repurchase Proceeds, payments of Substitution Shortfall
Amounts, REO Income and other collections that were received on or in respect of
the REMIC Mortgage Loans (including without limitation any REO Mortgage Loans)
(or received on or in respect of any related REO Properties) during the related
Collection Period and were identified and applied by the Master Servicer in
accordance with Section 1.2 as payments or other recoveries of principal of such
REMIC Mortgage Loans, in each case net of any portion of such amounts that
represents (i) a payment or other recovery of the principal portion of any
Monthly Payment (other than a Balloon Payment) due, or of the principal portion
of any Assumed Monthly Payment deemed due, in respect of any such REMIC Mortgage
Loan on a Due Date during or prior to the related Collection Period and not
previously paid or recovered or (ii) an early payment (other than in the form of
a Principal Prepayment) of the principal portion of any Monthly Payment due in
respect of any such REMIC Mortgage Loan on a Due Date subsequent to the end of
the related Collection Period.
-13-
<PAGE>
"Custodian" means the Trustee or any Person who is appointed by the Trustee
at any time as custodian pursuant to Section 7.9(h) and who is unaffiliated with
the Depositor and each Seller.
"Cut-off Date" means December 1, 1997.
"Cut-off Date Principal Balance" means, with respect to any REMIC Mortgage
Loan included in the Trust Fund as of the Closing Date, the unpaid principal
balance of such REMIC Mortgage Loan as of the Cut-off Date, reduced by all
payments of principal due on or before the Cut-off Date, whether or not paid.
"CSSA" means the Commercial Real Estate Secondary Market and Securitization
Association, or any successor organization.
"Debt Service Coverage Ratio" means, with respect to any REMIC Mortgage
Loan (or group of Cross-Collateralized Mortgage Loans) for any specified period,
the debt service coverage ratio calculated in accordance with Exhibit G.
"Debt Service Reduction Amount" means, with respect to any REMIC Mortgage
Loan for any Due Date, the amount of the reduction of the Monthly Payment for
such Due Date with respect to such REMIC Mortgage Loan as a result of any
proceeding under bankruptcy law or any similar proceeding (other than a
Deficient Valuation Amount); provided, however, that in the case of an amount
that is deferred, but not forgiven, such reduction shall not constitute a Debt
Service Reduction Amount.
"Defaulted Mortgage Loan" means a Mortgage Loan that is at least 60 days
delinquent in respect of any Monthly Payment (such delinquency to be determined
without giving effect to any grace period permitted by the related Mortgage or
Mortgage Note) and that has or, in the good faith and reasonable judgment of the
Special Servicer, will become the subject of foreclosure or similar proceedings.
"Default Interest" means, with respect to any REMIC Mortgage Loan
(including without limitation an REO Mortgage Loan), any amounts collected
thereon, other than Late Fees and Prepayment Premiums, that represent additional
interest in excess of interest on the principal balance of such REMIC Mortgage
Loan accrued at the related Mortgage Rate.
"Deficient Valuation" means, with respect to any Mortgage Loan, a valuation
by a court of competent jurisdiction of the Mortgaged Property relating to a
Mortgage Loan in an amount less than the then outstanding indebtedness under
such Mortgage Loan, which valuation results from a proceeding initiated under
the United States Bankruptcy Code, as amended from time to time, and that
reduces the amount the Mortgagor is required to pay under such Mortgage Loan.
"Deficient Valuation Amount" means the amount by which the total amount due
with respect to a Mortgage Loan (excluding interest not yet accrued), including
the principal balance of a Mortgage Loan plus any accrued and unpaid interest
thereon and any other amounts recoverable from the Mortgagor with respect
thereto pursuant to the terms thereof, is reduced in connection with a Deficient
Valuation.
-14-
<PAGE>
"Definitive Certificates" means Certificates of any Class issued in
definitive, fully registered, certificated form without interest coupons.
"Deleted Mortgage Loan" means a Mortgage Loan which is repurchased from the
Trust pursuant to the terms hereof or as to which one or more Qualifying
Substitute Mortgage Loans are substituted.
"Depositor" means Morgan Stanley Capital I Inc., a Delaware corporation,
and its successors in interest.
"Depository" has the meaning set forth in Section 3.6(a).
"Depository Agreement" means the Letter of Representations dated December
30, 1997, by and among the Depositor, the Trustee and the Depository.
"Determination Date" means, with respect to any Distribution Date, the
fifth Business Day prior to such Distribution Date.
"Directly Operate" means, with respect to any REO Property, the furnishing
or rendering of services to the tenants thereof, the management or operation of
such REO Property, the holding of such REO Property primarily for sale to
customers, the performance of any construction work thereon or any use of such
REO Property in a trade or business conducted by the Trust, in each case other
than through an Independent Contractor; provided, however, that the Trustee (or
the Special Servicer on behalf of the Trustee) shall not be considered to
Directly Operate an REO Property solely because the Trustee (or the Special
Servicer on behalf of the Trustee) establishes rental terms, chooses tenants,
enters into or renews leases, deals with taxes and insurance, or makes decisions
as to repairs, tenant improvements or capital expenditures with respect to such
REO Property or undertakes any ministerial action incidental thereto.
"Discount Rate" has the meaning set forth in Section 6.4.
"Disqualified Organization" means any of (i) the United States, any State
or any political subdivision thereof, or any agency or instrumentality of any of
the foregoing (other than an instrumentality which is a corporation if all of
its activities are subject to tax and, except for FHLMC, a majority of its board
of directors is not selected by any such governmental unit), (ii) a foreign
government, international organization or any agency or instrumentality of
either of the foregoing, (iii) an organization (except certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from tax
imposed by Chapter 1 of the Code (unless such organization is subject to the tax
imposed by Section 511 of the Code on unrelated business taxable income), (iv)
rural electric and telephone cooperatives described in Section 1381 of the Code
and (v) any other Person so designated by the Trustee based upon an Opinion of
Counsel that the holding of an ownership interest in a Residual Certificate by
such Person may cause any of the REMIC Pools, or any Person having an Ownership
Interest in any Class of Certificates, other than such Person, to incur a
liability for any federal tax imposed under the Code that would not otherwise be
imposed but for the transfer of an ownership interest in a Residual Certificate
to such Person. The terms "United States," "State" and "international
organization" shall have the meanings set forth in Section 7701 of the Code or
successor provisions.
-15-
<PAGE>
"Distributable Certificate Interest" means, with respect to any Class of
REMIC III Regular Certificates for any Distribution Date, the Accrued
Certificate Interest in respect of such Class of Certificates for such
Distribution Date, reduced (to not less than zero) by that portion, if any, of
the Net Aggregate Prepayment Interest Shortfall, if any, for such Distribution
Date allocated to such Class of Certificates as set forth below, and increased
by any Class Interest Shortfall in respect of such Class of Certificates for
such Distribution Date. The Net Aggregate Prepayment Interest Shortfall, if any,
for each Distribution Date shall be allocated on such Distribution Date among
the respective Classes of REMIC III Regular Certificates, pro rata, in
accordance with the respective amounts of Accrued Certificate Interest for such
Classes of Certificates for such Distribution Date.
"Distribution Account" has the meaning set forth in Section 5.3.
"Distribution Date" means the 15th day of each month or, if any such 15th
day is not a Business Day, the next succeeding Business Day, commencing in
January, 1998.
"Document Defect" has the meaning set forth in Section 2.3(a).
"Due Date" means: (i) with respect to any Mortgage Loan (other than an REO
Mortgage Loan or Mortgage Loan described in clause (ii) below) on or prior to
its Maturity Date, the day of the month set forth in the related Mortgage Note
on which each Monthly Payment thereon is scheduled to be first due; (ii) with
respect to any Balloon Mortgage Loan (other than an REO Mortgage Loan) after the
Maturity Date therefor, the day of the month set forth in the related Mortgage
Note on which each Monthly Payment (other than, to the extent different, the
Balloon Payment) on such Mortgage Loan had been scheduled to be first due; and
(iii) with respect to any REO Mortgage Loan, the day of the month set forth in
the related Mortgage Note on which each Monthly Payment on such Mortgage Loan
prior to its becoming an REO Mortgage Loan had been scheduled to be first due.
"Eligible Account" means (i) an account or accounts maintained with a
depository institution or trust company, which may be the Trustee, with a
long-term unsecured debt obligations or other credit rating of at least "AA" by
Fitch and "Aa3" by Moody's and whose short-term unsecured debt obligations are
rated "F-1+" by Fitch and "Prime-1" by Moody's at the time of any deposit
therein (or if such depository institution or trust company is not rated by
Fitch, the equivalent ratings assigned by Moody's and at least one other
nationally recognized statistical rating agencies), provided that funds held in
any account that constitutes an Eligible Account solely pursuant to this clause
(i) shall, if the long-term unsecured debt obligations of the depository cease
to satisfy the ratings criteria described above, be moved within 30 days of such
failure to a new account with a depository whose long-term unsecured debt
obligations satisfy such ratings criteria or to an account described in the
immediately following clause (ii) or clause (iii); or (ii) a segregated trust
account or accounts maintained with the corporate trust department of a
federally or state chartered depository institution or trust company acting in
its fiduciary capacity, which may be the Trustee, provided that any such
institution is subject to regulations regarding fiduciary funds on deposit
substantially similar to 12 C.F.R. Section 9.10(b); or (iii) any other account
acceptable to the Rating Agencies as an Eligible Account (as evidenced by a
Rating Agency Confirmation). Eligible Accounts may bear interest.
"Eligible Investments" means any one or more of the following obligations
or securities:
-16-
<PAGE>
(i) direct obligations of, and obligations fully guaranteed as to
timely payment of principal and interest by, the United States of America,
FNMA, FHLMC or any agency or instrumentality of the United States of
America the obligations of which are backed by the full faith and credit of
the United States of America; provided that any obligation of, or guarantee
by, FNMA or FHLMC, other than an unsecured senior debt obligation of FNMA
or FHLMC, shall be an Eligible Investment only if Rating Agency
Confirmation is obtained with respect to such investment;
(ii) demand and time deposits in, certificates of deposit of, or
bankers' acceptances issued by, any depository institution or trust company
(including the Trustee, the Master Servicer, the Special Servicer or any
Affiliate of the Master Servicer, the Special Servicer or the Trustee,
acting in its commercial capacity) incorporated or organized under the laws
of the United States of America or any State thereof and subject to
supervision and examination by federal or state banking authorities, so
long as the commercial paper or other short-term debt obligations of such
depository institution or trust company are rated "F-1+" by Fitch and
"Prime-1" by Moody's and the long-term unsecured debt obligations of such
depository institution or trust company have been assigned a rating by
Moody's at least equal to the applicable Minimum Maturity-Based Rating or,
alternatively, so long as the ratings on such obligations are otherwise
acceptable to the Rating Agencies;
(iii) repurchase agreements or obligations with respect to any
security described in clause (i) above where such security has a remaining
maturity of one year or less and where such repurchase obligation has been
entered into with a depository institution or trust company (acting as
principal) described in clause (ii) above and where such repurchase
obligation will mature prior to the Business Day preceding the next date
upon which, as described in this Agreement, such amounts are required to be
withdrawn from the Collection Account and which meets the minimum rating
requirement for such entity described above;
(iv) securities (other than stripped bonds or stripped coupons)
bearing interest or sold at a discount issued by any corporation
incorporated under the laws of the United States of America or any state
thereof, which securities are rated "AAA" by Fitch and "Aaa" by Moody's,
unless otherwise specified in writing by the Rating Agency; provided that
securities issued by any particular corporation will not be Eligible
Investments to the extent that investment therein will cause the then
outstanding principal amount of securities issued by such corporation and
held in the Collection Account to exceed 10% of the sum of the aggregate
Certificate Principal Balance of the Principal Balance Certificates and the
aggregate principal amount of all Eligible Investments in the Collection
Account;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations (A) payable on demand or on a
specified date not more than one year after the date of issuance thereof),
rated "F-1+" by Fitch and "Prime-1" by Moody's and issued by an entity
whose long-term unsecured debt has been assigned a rating by Moody's at
least equal to the applicable Minimum Maturity-Based Rating or,
alternatively, (B) with respect to which Rating Agency Confirmation has
been obtained;
(vi) units of investment funds (including money market funds) rated in
the highest applicable long-term rating category by each of the Rating
Agencies;
(vii) guaranteed reinvestment agreements maturing within 365 days or
less issued by any bank, insurance company or other corporation whose
long-term unsecured debt rating is not less than "Aaa" or "AAA" (or its
equivalent rating) by Moody's and Fitch;
-17-
<PAGE>
(viii) any money market funds rated "Aaa" or "AAA" (or its equivalent
rating) by Moody's and Fitch, and any other demand, money-market or time
deposit, or any other obligation, security or investment, with respect to
which Rating Agency Confirmation has been obtained; and
(ix) such other investments bearing interest or sold at a discount,
and treated as "cash flow investments" under Code Section 860G(a)(5)
earning a return "in the nature of interest" within the meaning of Treasury
Regulation Section 1.860G-2(g)(1) (as evidenced by an Opinion of Counsel
delivered to the Trustee by the Master Servicer at the Master Servicer's
expense), as are acceptable to the Rating Agencies (as evidenced by Rating
Agency Confirmation);
provided (A) such investment is held for a temporary period pursuant to
Section 1.860G-2(g)(1) of the Treasury Regulations, (B) such investment is
payable by the obligor in U.S. dollars, and (C) that no such instrument
shall be an Eligible Investment (1) if such instrument evidences either (a)
a right to receive only interest payments or only principal payments with
respect to the obligations underlying such instrument or (b) a right to
receive both principal and interest payments derived from obligations
underlying such instrument and the principal and interest payments with
respect to such instrument provide a yield to maturity of greater than 120%
of the yield to maturity at par of such underlying obligations, or (2) if
it may be redeemed at a price below the purchase price; or (3) if it is not
treated as a "permitted investment" that is a "cash flow investment" under
Code Section 860G(a)(5) and applicable Treasury regulations; and provided,
further, that interest on any variable rate instrument shall be tied to a
single interest rate index plus a single fixed spread (if any) and move
proportionally with that index; and provided, further, that no amount
beneficially owned by any REMIC Pool (including any amounts collected by
the Master Servicer on deposit or not yet deposited in the Collection
Account) may be invested in investments treated as equity interests for
Federal income tax purposes. No Eligible Investments shall be purchased at
a price in excess of par. For the purpose of this definition, (x) units of
investment funds (including money market funds) shall be deemed to mature
daily, and (y) the "Minimum Maturity-Based Rating" means: (i) if the
subject investment matures within one month, "A2"; (ii) if the subject
investment matures more than one month later but within three months, "A1";
(iii) if the subject investment matures more than three months later but
within six months, "Aa3"; and (iv) if the subject investment matures more
than six months later, "Aaa".
With respect to any rating referred to in this definition of Eligible
Investments, if the type of investment to which such rating is applicable
is not rated by Fitch, then the equivalent rating assigned by Moody's and
at least one other nationally recognized statistical rating agencies shall
satisfy the requirement rating requirement for such investment, and, if
such investment is not rated by Fitch or Moody's, then the equivalent
rating assigned by at least two other nationally recognized statistical
rating agencies shall satisfy such requirement.
"Environmental Assessment" means a "Phase I Assessment" conducted in
accordance with ASTM Standard E 1527-97 or any successor thereto published by
ASTM.
"Environmental Laws" means any and all federal, state and local statutes,
laws, regulations, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or other governmental
restrictions, now or hereafter in effect, relating to the environment or to
emissions, discharges or releases of chemical substances, including, without
limitation, any and all pollutants, contaminants, petroleum or petroleum
products, asbestos or asbestos-containing materials, polychlorinated biphenyls,
urea-formaldehyde insulation, radon, industrial, toxic or hazardous substances
or wastes, into the environment, including, without
-18-
<PAGE>
limitation, ambient air, surface water, ground water or land, or otherwise
relating to the manufacture, processing, distribution, use, labeling,
registration, treatment, storage, disposal, transport or handling of any of the
foregoing substances or wastes or the clean-up or other remediation thereof.
"Equivalent 30/360 Rate" means, when used with respect to the REMIC I
Remittance Rate applicable to any Non-30/360 REMIC I Regular Interest for any
Distribution Date, the per annum rate at which interest would have to accrue
during the applicable Interest Accrual Period on the Uncertificated Principal
Balance of such REMIC I Regular Interest outstanding immediately prior to such
Distribution Date, assuming such accrual of interest were to occur on the basis
of a 360-day year consisting of twelve 30-day months, in order to produce the
actual Uncertificated Accrued Interest in respect of such REMIC I Regular
Interest for such Distribution Date.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Payment" means any payment received by the Master Servicer or the
Special Servicer for the account of any Mortgagor for application toward the
payment of real estate taxes, assessments, insurance premiums, ground rents (if
applicable) and similar items in respect of the related Mortgaged Property.
"Event of Default" means one or more of the events described in Section
9.1(a).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expense Loss" means a loss realized upon payment by the Trust of an
Additional Trust Expense.
"FDIC" means the Federal Deposit Insurance Corporation or any successor
thereto.
"FHLMC" means the Federal Home Loan Mortgage Corporation, or any successor
thereto.
"Final Certification" has the meaning set forth in Section 2.2.
"Final Rated Distribution Date" means the Distribution Date in January
2028.
"Final Recovery Determination" means a determination by the Special
Servicer with respect to any Defaulted Mortgage Loan or REO Property (other than
a Mortgage Loan or REO Property, as the case may be, that was purchased or
replaced by the Seller pursuant to Section 6 of the Mortgage Loan Purchase
Agreement, by an Interested Person pursuant to Section 8.31, or by any party
entitled to effect an optional termination of the Trust pursuant to Section
10.1) that, in the reasonable and good faith judgment of the Special Servicer,
there has been a recovery of all Insurance Proceeds, Condemnation Proceeds,
Liquidation Proceeds, and other payments or recoveries that, in the Special
Servicer's reasonable and good faith judgment, exercised without regard to any
obligation of the Master Servicer or the Special Servicer to make payments from
its own funds pursuant to Section 8.5, will ultimately be recoverable.
"Fitch" means Fitch IBCA, Inc. or its successor in interest.
-19-
<PAGE>
"FNMA" means the Federal National Mortgage Association, or any successor
thereto.
"Global Certificate" has the meaning set forth in Section 3.6.
"Grantor Trust" means the part of the Trust Fund, the assets of which are
the Non-REMIC Fees and the Non-REMIC Assets, and any amounts on deposit from
time to time in the Non-REMIC Trust Collection Subaccount and the Non-REMIC
Trust Distribution Subaccount. All such assets and amounts in the Grantor Trust
shall be beneficially owned by and available for distribution to the holders of
the Class V Certificates or the Class W Certificates in accordance with Sections
6.4(e) and 6.4(f), respectively.
"Ground Lease" means the ground lease pursuant to which any Mortgagor holds
a leasehold interest in the related Mortgaged Property.
"Group 1 Loan" means any REMIC Mortgage Loan (including without limitation
any REO Mortgage Loan) in Loan Group 1.
"Group 2 Loan" means any REMIC Mortgage Loan (including without limitation
any REO Mortgage Loan) in Loan Group 2.
"Hazardous Materials" means any dangerous, toxic or hazardous pollutants,
chemicals, wastes, or substances, including, without limitation, those so
identified pursuant to CERCLA or any other federal, state or local environmental
related laws and regulations, and specifically including, without limitation,
asbestos and asbestos-containing materials, polychlorinated biphenyls ("PCBs"),
radon gas, petroleum and petroleum products, urea formaldehyde and any
substances classified as being "in inventory", "usable work in process" or
similar classification which would, if classified as unusable, be included in
the foregoing definition.
"Holder" means the Person in whose name a Certificate is registered on the
Certificate Register except that, solely for the purposes of giving any consent,
approval or waiver pursuant to this Agreement, any Certificate registered in the
name of the Master Servicer, the Special Servicer, the Depositor or any
Affiliate of any of them shall be deemed not to be outstanding, and the Voting
Rights to which it is entitled shall not be taken into account in determining
whether the requisite percentage of Voting Rights necessary to effect any such
consent, approval or waiver has been obtained, except as otherwise provided in
Sections 8.32, 9.4 and 13.3. The Trustee shall be entitled to request and rely
upon a certificate of the Master Servicer, the Special Servicer or the Depositor
in determining whether a Certificate is registered in the name of an Affiliate
of such Person. All references herein to "Holders" or "Certificateholders" shall
reflect the rights of Certificate Owners as they may indirectly exercise such
rights through the Clearing Agency and its Participants, except as otherwise
specified herein; provided, however, that the parties hereto shall be required
to recognize as a "Holder" or "Certificateholder" only the Person in whose name
a Certificate is registered in the Certificate Register.
"Independent" means, when used with respect to any Accountants, a Person
who is "independent" within the meaning of Rule 2-01(b) of the Securities and
Exchange Commission's Regulation S-X. Independent means, when used with respect
to any other Person, a Person who (a) is in fact independent of another
specified Person and any Affiliate of such other Person, (b) does not have any
material direct financial interest in such other Person or any Affiliate of such
other
-20-
<PAGE>
Person and (c) is not connected with such other Person or any Affiliate of such
other Person as an officer, employee, promoter, underwriter, trustee, partner,
director or Person performing similar functions.
"Independent Contractor" means any Person that would be an "independent
contractor" with respect to REMIC I within the meaning of Section 856(d)(3) of
the Code if REMIC I were a real estate investment trust (except that the
ownership test set forth in that section shall be considered to be met by any
Person that owns, directly or indirectly, 35 percent or more of any Class of
Certificates, or such other interest in any Class of Certificates as is set
forth in an Opinion of Counsel, which shall be at no expense to the Trustee or
the Trust, delivered to the Trustee), so long as REMIC I does not receive or
derive any income from such Person and provided that the relationship between
such Person and REMIC I is at arm's length, all within the meaning of Treasury
Regulation Section 1.856-4(b)(5), or any other Person upon receipt by the
Trustee of an Opinion of Counsel, which shall be at no expense to the Trustee or
the Trust, to the effect that the taking of any action in respect of any REO
Property by such Person, subject to any conditions therein specified, that is
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, or cause any income realized in
respect of such REO Property to fail to qualify as Rents from Real Property.
"Indirect Participants" means entities, such as banks, brokers, dealers and
trust companies, that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly.
"Initial Certification" has the meaning set forth in Section 2.2.
"Initial Pool Balance" means the aggregate Cut-off Date Principal Balance
of the REMIC Mortgage Pool.
"Institutional Accredited Investor" means an institutional accredited
investor within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D
of the Securities Act.
"Insurance Policy" means any hazard insurance policy, flood insurance
policy or title insurance policy relating to any Mortgage Loan or Mortgaged
Property or REO Property in effect as of the Closing Date or thereafter during
the term of this Agreement.
"Insurance Proceeds" means amounts paid by the insurer under any Insurance
Policy.
"Interest Accrual Period" means with respect to any REMIC I Regular
Interest, any REMIC II Regular Interest or any Class of REMIC III Regular
Certificates for any Distribution Date, the calendar month immediately preceding
the month in which such Distribution Date occurs.
"Interested Person" means, as of any date of determination, the Master
Servicer, the Special Servicer, the Depositor, the Operating Adviser, any
Certificateholder, or any Person known to a Responsible Officer of the Trustee
to be an Affiliate of any of them.
"Issue Price" means, with respect to each Class of Certificates, REMIC I
Regular Interests and REMIC II Regular Interests, the "issue price" as defined
in the REMIC Provisions.
-21-
<PAGE>
"Late Collections" means with respect to any REMIC Mortgage Loan (including
without limitation any REO Mortgage Loan), all amounts received thereon during
any Collection Period, whether as payments, Insurance Proceeds, Condemnation
Proceeds, Liquidation Proceeds, Repurchase Proceeds, payments of Substitution
Shortfall Amounts, or otherwise, which represent late payments or collections of
the principal and/or interest portions of Monthly Payments (other than the
Balloon Payments) and/or Assumed Monthly Payments due or deemed due in respect
of such REMIC Mortgage Loan (without regard to any acceleration of amounts due
thereunder by reason of default) on a Due Date in a previous Collection Period
and not previously recovered; provided that "Late Collections" shall in no event
include Penalty Charges.
"Late Fee" shall mean a fee paid or payable, as the context may require, by
a Mortgagor as provided in the related Mortgage Note or Mortgage in connection
with a late payment made on the related REMIC Mortgage Loan by such Mortgagor.
"Latest Possible Maturity Date " shall have the meaning given to such term
in Treasury Regulation Section 1.860G-1(a)(4)(iii) and, with respect to any
REMIC I Regular Interest, REMIC II Regular Interest or REMIC III Certificate,
shall mean the date specified in the preamble to this Agreement.
"Liquidation Event" means with respect to any Mortgage Loan (other than an
REO Mortgage Loan), any of the following events: (i) such Mortgage Loan is paid
in full; (ii) a Final Recovery Determination is made with respect to such
Mortgage Loan; (iii) such Mortgage Loan is repurchased or replaced by the Seller
pursuant to Section 6 of the Mortgage Loan Purchase Agreement; (iv) such
Mortgage Loan is purchased by an Interested Person, or is otherwise sold,
pursuant to Section 8.31; or (v) such Mortgage Loan is purchased by any Person
entitled to effect an optional termination of the Trust pursuant to Section
10.1. Liquidation Event means, with respect to any REO Property (and the related
REO Mortgage Loan), any of the following events: (i) a Final Recovery
Determination is made with respect to such REO Property; (ii) such REO Property
is sold pursuant to Section 8.31; or (iii) such REO Property is purchased by any
Person entitled to effect an optional termination of the Trust pursuant to
Section 10.1.
"Liquidation Expenses" means all customary, reasonable and necessary "out
of pocket" costs and expenses incurred on behalf of the Trust by the Special
Servicer in connection with the liquidation of any Specially Serviced Mortgage
Loan or REO Property pursuant to Section 8.7 or 8.31 (including, without
limitation, legal fees and expenses, title and escrow expenses, committee or
referee fees and, if applicable, brokerage commissions and conveyance taxes)
that were not covered by a Servicing Advance.
"Liquidation Fee" means, with respect to each Specially Serviced Mortgage
Loan or REO Property as to which Liquidation Proceeds have been received (other
than any Specially Serviced Mortgage Loan or REO Property purchased by an
Interested Person pursuant to Section 8.31 or by any Person entitled to effect
an optional termination of the Trust pursuant to Section 10.1) the fee
designated as such and payable to the Special Servicer pursuant to Section
8.10(b).
"Liquidation Fee Rate" means, with respect to each Specially Serviced
Mortgaged Loan or REO Property as to which a Liquidation Fee is payable, 1.0%.
"Liquidation Proceeds" means proceeds (other than scheduled payments by a
Mortgagor (including Balloon Payments), Insurance Proceeds, Condemnation
Proceeds, Repurchase
-22-
<PAGE>
Proceeds, payments of Substitution Shortfall Amounts and REO Income) from the
sale or liquidation of a Mortgage Loan or related REO Property, net of related
Liquidation Expenses.
"Loan-to-Value Ratio" means, with respect to any REMIC Mortgage Loan, as of
any date of determination, the fraction, expressed as a percentage, the
numerator of which is the then unpaid principal balance of such REMIC Mortgage
Loan (or, if part of a group of Cross-Collateralized Mortgage Loans, of such
group), and the denominator of which is the appraised value of the related
Mortgaged Property (or, in the case of a group of Cross-Collateralized Mortgage
Loans, of all the Mortgaged Properties securing such group and, if secured by a
second lien or a parity lien, taking into account the first or parity lien) as
determined by an Appraisal thereof.
"Loan Group 1" means, collectively, all of the REMIC Mortgage Loans
(including, without limitation, any such REMIC Mortgage Loans that have become
REO Mortgage Loans) other than the Poughkeepsie Galleria Loan.
"Loan Group 2" means the Poughkeepsie Galleria Loan (including, without
limitation, if such REMIC Mortgage Loan becomes an REO Mortgage Loan).
"Lock-Box Account" means with respect to any Mortgage Loan, any lock-box,
cash management or similar account required under the terms of the related
Mortgage or Mortgage Note maintained by the Master Servicer in accordance with
the Servicing Standard; and such account shall not be included in the Trust.
"Lock-Box Agreement" means, with respect to any Mortgage Loan, any lock-box
agreement relating to such Mortgage Loan executed and delivered by the related
Mortgagor pursuant to which a Lock-Box Account is created.
"Losses" has the meaning set forth in Section 12.3.
"Loss Reimbursement Amount" means, with respect to any REMIC I Regular
Interest, REMIC II Regular Interest or Class of Principal Balance Certificates
for any Distribution Date (except the initial Distribution Date, with respect to
which the Loss Reimbursement Amount for such REMIC I Regular Interest, REMIC II
Regular Interest or Class of Principal Balance Certificates, as the case may be,
will be zero), an amount equal to (a)(i) the Loss Reimbursement Amount with
respect to such REMIC I Regular Interest, REMIC II Regular Interest or Class of
Principal Balance Certificates, as the case may be, for the immediately
preceding Distribution Date, minus (ii) the aggregate of all reimbursements of
previously allocated and unreimbursed Realized Losses and Expense Losses (with
interest) made on the immediately preceding Distribution Date pursuant to
Section 6.2, 6.3 or 6.4, as applicable, with respect to such REMIC I Regular
Interest, REMIC II Regular Interest or Class of Principal Balance Certificates,
as the case may be, plus (iii) the aggregate of all Realized Losses and Expense
Losses allocated to such REMIC I Regular Interest, REMIC II Regular Interest or
Class of Principal Balance Certificates, as the case may be, on the immediately
preceding Distribution Date pursuant to Section 6.5, plus (b) one month's
interest (calculated on the basis of a 360-day year consisting of twelve 30-day
months or, if the related Uncertificated Accrued Interest or Accrued Certificate
Interest, as applicable, in respect of such REMIC I Regular Interest, REMIC II
Regular Interest or Class of Principal Balance Certificates, as the case may be,
accrues on a different basis, on such alternative basis) on the amount described
in clause (a) at the REMIC I Remittance Rate, REMIC II Remittance Rate or
Pass-Through Rate, as
-23-
<PAGE>
applicable, in respect of such REMIC I Regular Interest, REMIC II Regular
Interest or Class of Principal Balance Certificates, as the case may be, for the
current Distribution Date.
"MAI" means member of the appraisal institute.
"Majority Certificateholder" means, with respect to any particular Class or
Classes of Certificates, any Certificateholder entitled to a majority of the
Voting Rights allocated to such Class or Classes, as the case may be.
"Master Servicer" means Midland Loan Services, L.P. or any successor master
servicer appointed as provided herein.
"Master Servicer Remittance Date" means, with respect to each Distribution
Date, the Business Day immediately preceding such Distribution Date.
"Master Servicer Remittance Report" means a report prepared by the Master
Servicer and in such media as may be agreed upon by the Master Servicer and the
Trustee containing such information regarding the Mortgage Loans as will permit
the Trustee to calculate the amounts to be distributed to the Certificateholders
pursuant to this Agreement and to furnish the Monthly Certificateholder Report
to Certificateholders required to be delivered hereunder and containing such
additional information as the Master Servicer, the Trustee and the Depositor may
from time to time mutually agree.
"Master Servicing Fee" means, with respect to each REMIC Mortgage Loan
(including without limitation each REO Mortgage Loan), the fee designated as
such and payable to the Master Servicer pursuant to Section 8.10(a). Subject to
Section 8.10(a) and 9.2, the payment of the Master Servicing Fee shall be
subject to and net of any payment made in respect of the Retained Servicing
Interest.
"Master Servicing Fee Rate" means, with respect to each REMIC Mortgage Loan
(including without limitation each REO Mortgage Loan), the rate per annum equal
to 0.054%
"Maturity Date" means, with respect to any Mortgage Loan as of any date of
determination, the date on which the last payment of principal is due and
payable under the related Mortgage Note, after taking into account all Principal
Prepayments received and any Deficient Valuation, Debt Service Reduction Amount
or modification of the Mortgage Loan occurring prior to such date of
determination, further taking account of the exercise of any applicable Call
Option, but without giving effect to (i) any acceleration of the principal of
such Mortgage Loan by reason of a default or (ii) any grace period permitted by
the related Mortgage Note. In clarification of the foregoing, if the Call Option
is exercised with respect to any Callable Mortgage Loan in accordance with
Section 8.21(e), the Maturity Date for such Mortgage Loan shall thereupon be the
Call Date.
"Memorandum" means the private placement memorandum dated December 22,
1997, relating to the Class F, Class G, Class H, Class J, Class K and Class L
Certificates.
"Minimum Master Servicing Fee Rate" has the meaning set forth in Section
8.10(a).
-24-
<PAGE>
"Minimum Maturity Based Rating" has the meaning set forth in the definition
of "Eligible Investments" herein.
"Money Term" means with respect to any REMIC Mortgage Loan, the Maturity
Date, Mortgage Rate, principal balance, amortization term or payment frequency
thereof (and shall not include Late Fees or Default Interest provisions).
"Monthly Certificateholder Report" means a report prepared pursuant to
Section 5.4 by the Trustee as to each Distribution Date generally in the form
and substance of Exhibit F-1, which sets forth, to the extent applicable: (i)
the amount, if any, of the distributions on such Distribution Date to the
Holders of each Class of Principal Balance Certificates applied to (A) reduce
the respective Class Principal Balance thereof and (B) reimburse previously
allocated Realized Losses and/or Expense Losses (with interest); (ii) the
amount, if any, of the distributions to Holders of each Class of REMIC III
Regular Certificates allocable to (a) Distributable Certificate Interest and (b)
Prepayment Premiums; (iii) the number and aggregate Stated Principal Balance of
REMIC Mortgage Loans in the REMIC Mortgage Pool at the close of business on such
Distribution Date; (iv) the number and aggregate Stated Principal Balance of
REMIC Mortgage Loans in the REMIC Mortgage Pool that are at the close of
business on the related Determination Date (A) delinquent one month, (B)
delinquent two months, (C) delinquent three or more months or (D) as to which
foreclosure proceedings have been commenced; (v) with respect to any REO
Property acquired during the related Collection Period, the Stated Principal
Balance of the related REMIC Mortgage Loan as of the date of acquisition of the
REO Property; (vi) (A) the Stated Principal Balance of any REO Property included
in the Trust Fund as of the related Determination Date, (B) as to any REO
Property sold during the related Collection Period, the date of the related
Final Recovery Determination and the amount of the proceeds of such sale
deposited into the Collection Account, and (C) the aggregate amount of other
revenues collected by the Special Servicer with respect to each REO Property
during the related Collection Period and credited to the Collection Account, in
each case identifying such REO Property by the loan number of the related REMIC
Mortgage Loan; (vii) the Class Principal Balance or Class Notional Amount, as
the case may be, and Certificate Factor of each Class of REMIC III Regular
Certificates before and after giving effect to the distributions made on such
Distribution Date; (viii) the aggregate amount of Principal Prepayments made
during the related Collection Period; (ix) the Pass-Through Rate applicable to
each Class of REMIC III Regular Certificates for such Distribution Date; (x) the
aggregate amount of servicing compensation retained by or paid to the Master
Servicer and the Special Servicer; (xi) the Net Aggregate Prepayment Interest
Shortfall, if any, for such Distribution Date and the amount of Realized Losses
or Expense Losses, if any, incurred with respect to the REMIC Mortgage Loans
during the related Collection Period; (xii) the aggregate amount of Servicing
Advances and P&I Advances outstanding as of the end of the prior calendar month
that have been made by the Master Servicer and the Trustee, separately stated;
and (xiii) the amount of any Appraisal Reductions effected during the related
Collection Period on a loan-by-loan basis and the total Appraisal Reductions as
of such Distribution Date. In the case of information furnished pursuant to
subclauses (i) and (ii) above, the amounts shall be expressed as a dollar amount
per $1,000 of original actual or notional principal amount of the Certificates
for all Certificates of each applicable Class.
"Monthly Payment" means, with respect to any Mortgage Loan, the scheduled
monthly payment of principal and/or interest on such Mortgage Loan (in the
absence of any default), including any Balloon Payment, which is payable by a
Mortgagor from time to time under the terms
-25-
<PAGE>
of the related Mortgage Note (as such may be modified at any time following the
Closing Date) and applicable law.
"Moody's" means Moody's Investors Service, Inc. or any successor in
interest.
"Mortgage" means, with respect to any Mortgage Loan, separately and
collectively, as the context may require, each mortgage, deed of trust or other
instrument securing a Mortgage Note and creating a lien on the related Mortgaged
Property.
"Mortgage File" means, collectively with respect to any Mortgage Loan, the
mortgage documents listed below:
(i) the original Mortgage Note (or in the case of the Pinellas Center
Loan, a lost note affidavit), endorsed by the most recent endorsee
prior to the Trustee or, if none, by the originator, without recourse,
either in blank or to the order of the Trustee in the following form:
"Pay to the order of State Street Bank and Trust Company, as trustee
for the registered holders of Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificates, Series 1997 - ALIC, without
recourse";
(ii) the original or a copy of the related Mortgage and, if applicable, the
originals or copies of any intervening assignments of such Mortgage
showing a complete chain of assignment from the originator of the
Mortgage Loan to the most recent assignee of record thereof prior to
the Trustee, if any, in each case with evidence of recording indicated
thereon;
(iii) an original assignment of the related Mortgage, in recordable form,
executed by the most recent assignee of record thereof prior to the
Trustee or, if none, by the originator, either in blank or in favor of
the Trustee (in such capacity);
(iv) the original or a copy of the related Assignment of Leases (if such
item is a document separate from the related Mortgage) and, if
applicable, the originals or copies of any intervening assignments of
such Assignment of Leases showing a complete chain of assignment from
the originator of the Mortgage Loan to the most recent assignee of
record thereof prior to the Trustee, if any, in each case with
evidence of recording thereon;
(v) an original assignment of any related Assignment of Leases (if such
item is a document separate from the related Mortgage), in recordable
form, executed by the most recent assignee of record thereof prior to
the Trustee or, if none, by the originator, either in blank or in
favor of the Trustee (in such capacity), which assignment may be
included as part of the corresponding assignment of Mortgage referred
to in clause (iii) above;
(vi) an original or copy of any related security agreement (if such item is
a document separate from the related Mortgage) and, if applicable, the
originals or copies of any intervening assignments of such security
agreement showing a complete chain of assignment from the originator
of the Mortgage Loan to the most recent assignee thereof prior to the
Trustee, if any;
-26-
<PAGE>
(vii) an original assignment of any related security agreement (if such
item is a document separate from the related Mortgage) executed by the
most recent assignee thereof prior to the Trustee or, if none, by the
originator, either in blank or in favor of the Trustee (in such
capacity), which assignment may be included as part of an omnibus
assignment covering other documents relating to the Mortgage Loan
provided that such an omnibus assignment would be effective under
applicable law;
(viii) originals or copies of all assumption, modification, written assurance
and substitution agreements, with evidence of recording thereon (if
appropriate), in those instances where the terms or provisions of the
Mortgage, Mortgage Note or any related security document have been
modified or the Mortgage Loan has been assumed;
(ix) the original or a copy of the lender's title insurance policy issued
in connection with the origination of the Mortgage Loan, together with
all endorsements or riders (or copies thereof) that were issued with
or subsequent to the issuance of such policy, insuring the priority of
the Mortgage as a first lien on the Mortgaged Property or, with
respect to those Mortgaged Properties related to the Mortgage Loans
set forth on Schedule G to Exhibit C of the Mortgage Loan Purchase
Agreement, a second lien on the Mortgaged Property, as the case may
be;
(x) the original or a copy of any guaranty of the obligations of the
Mortgagor under the Mortgage Loan, together with (A) if applicable,
the originals or copies of any intervening assignments of such
guaranty showing a complete chain of assignment from the originator of
the Mortgage Loan to the most recent assignee thereof prior to the
Trustee, if any, and (B) an original assignment of such guaranty
executed by the most recent assignee thereof prior to the Trustee or,
if none, by the originator (which assignment may be included as part
of an omnibus assignment covering other documents relating to the
Mortgage Loan provided that such an omnibus assignment would be
effective under applicable law);
(xi) (A) file or certified copies of any UCC financing statements and
continuation statements which were filed in order to perfect (and
maintain the perfection of) any security interest held by the
originator of the Mortgage Loan (and each assignee of record prior to
the Trustee) in and to the personalty of the Mortgagor at the
Mortgaged Property (in each case with evidence of filing thereon) and
which were in the possession of the related Seller (or its agent) at
the time the subject Mortgage File was delivered to the Trustee and
(B) if any such security interest is perfected and the earlier UCC
financing statements and continuation statements were in the
possession of the Seller, a UCC financing statement executed by the
most recent assignee of record prior to the Trustee or, if none, by
the originator, evidencing the transfer of such security interest,
either in blank or in favor of the Trustee;
(xii) the original or a copy of the power of attorney (with evidence of
recording thereon, if appropriate) granted by the Mortgagor if the
Mortgage, Mortgage
-27-
<PAGE>
Note or other document or instrument referred to above was signed on
behalf of the Mortgagor; and
(xiii) if the Mortgagor has a leasehold interest in the related Mortgaged
Property, the original ground lease or a copy thereof;
provided that whenever the term "Mortgage File" is used to refer to documents
actually received by the Trustee, such term shall not be deemed to include such
documents and instruments required to be included therein unless they are
actually so received.
"Mortgage Loan" means a mortgage loan identified on the Mortgage Loan
Schedule, as such schedule may be amended from time to time, and conveyed,
transferred, sold, assigned to and deposited with the Trustee pursuant to
Section 2.1 or Section 2.3. As used herein, the term "Mortgage Loan" includes
the related Mortgage Note, Mortgage and other security documents contained in
the related Mortgage File.
"Mortgage Loan Due Period" means, with respect to each Mortgage Loan
(including without limitation each REO Mortgage Loan), the period beginning on
any related Due Date and ending on the day immediately preceding the next
related Due Date, inclusive.
"Mortgage Loan Purchase Agreement" means that certain Mortgage Loan
Purchase Agreement dated as of December 22, 1997, between Aetna and the
Depositor.
"Mortgage Loan Schedule" or "Loan Schedule" means the schedule attached
hereto as Schedule I, which identifies each REMIC Mortgage Loan and the schedule
attached hereto as Schedule II, which identifies each Non-REMIC Asset, and the
schedule attached hereto as Schedule III, which identifies each Non-REMIC Fee,
as any such schedule may be amended from time to time pursuant to Section 2.3.
"Mortgage Note" means the note or other evidence of indebtedness evidencing
the indebtedness of a Mortgagor under a Mortgage Loan (or, in the case of the
Non-REMIC Assets, evidencing such other obligations of a Mortgagor described in
such note), together with any rider, addendum or amendment thereto.
"Mortgage Rate" means, with respect to any Mortgage Loan (including without
limitation an REO Mortgage Loan), the per annum rate at which interest is
scheduled (in the absence of default) to accrue on such Mortgage Loan (in
accordance with the terms of the related Mortgage Note (as such may be modified
at any time following the Closing Date) and applicable law, and without regard
to any passage of the Maturity Date or any acquisition of the related Mortgaged
Property as an REO Property.
"Mortgaged Property" means, individually and collectively, as the context
may require, the real property interest or interests subject to the lien of a
Mortgage and constituting collateral for a Mortgage Loan. With respect to any
Cross-Collateralized Mortgage Loan, as the context may require, "Mortgaged
Property" may mean, collectively, all the Mortgaged Properties securing such
Cross-Collateralized Mortgage Loan.
"Mortgagee" means, which respect to any Mortgage as of any date of
determination, the holder of the related Mortgage Note as of such date.
-28-
<PAGE>
"Mortgagor" means the obligor or obligors on a Mortgage Note.
"Net Aggregate Prepayment Interest Shortfall" means, with respect to any
Distribution Date, the amount, if any, by which (a) the aggregate of all
Prepayment Interest Shortfalls incurred in connection with the receipt of
Principal Prepayments on the REMIC Mortgage Loans during the related Collection
Period, exceeds (b) the sum of (i) the aggregate of all Prepayment Interest
Excesses realized in connection with the receipt of Principal Prepayments on the
REMIC Mortgage Loans during the related Collection Period, and (ii) the
aggregate amount deposited by the Master Servicer in the Distribution Account
for such Distribution Date pursuant to Section 8.21(d) in connection with such
Prepayment Interest Shortfalls.
"Net Mortgage Rate" means, with respect to any REMIC Mortgage Loan
(including without limitation an REO Mortgage Loan), as of any date of
determination, a rate per annum equal to the related Mortgage Rate then in
effect, minus the applicable Master Servicing Fee Rate.
"New Lease" means any lease of any REO Property entered into on behalf of
the Trust, including any lease renewed or extended on behalf of the Trust if the
Trust has the right to renegotiate the terms of such lease.
"New York Presenting Office" means any office of an agent of the Trustee or
the Certificate Registrar, located in New York, New York, as the Trustee or the
Certificate Registrar, as the case may be, may designate from time to time by
written notice to the Depositor and the Certificateholders, and initially means
State Street Bank and Trust Company, N.A., 61 Broadway - 15th Floor, New York,
New York 10006.
"Non-30/360 REMIC I Regular Interest" means a REMIC I Regular Interest that
accrues interest other than on the basis of a 360-day year consisting of twelve
30-day months.
"Nondisqualification Opinion" means a written opinion of Independent
nationally recognized outside tax counsel addressed to the Trustee, reasonably
acceptable in form and substance to the Trustee, that a contemplated action will
neither cause (i) any REMIC Pool to fail to qualify as a REMIC at any time that
any Certificates are outstanding nor (ii) a "prohibited transaction", or
"prohibited contribution", or (iii) any REMIC Pool to be subject to any other
tax under the REMIC Provisions, except for the tax on "net income from
foreclosure property" as expressly permitted herein.
"Nonrecoverable Advance" means any Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance.
"Nonrecoverable P&I Advance" means any P&I Advance previously made or
proposed to be made in respect of a REMIC Mortgage Loan (including, without
limitation, an REO Mortgage Loan) which, in the reasonable and good faith
judgment of the Master Servicer or, if applicable, the Trustee, will not be
ultimately recoverable (together with Advance Interest thereon) from late
payments, Insurance Proceeds, Condemnation Proceeds or Liquidation Proceeds, or
any other recovery on or in respect of such REMIC Mortgage Loan. The
determination by the Master Servicer or, if applicable, the Trustee that it has
made a Nonrecoverable P&I Advance or that any proposed P&I Advance, if made,
would constitute a Nonrecoverable P&I Advance, shall be evidenced by an
Officer's Certificate delivered to the Depositor and delivered to or retained by
the
-29-
<PAGE>
Trustee, detailing a reasonable basis for such determination. The Trustee shall
be entitled to rely conclusively upon any such Officer's Certificate of the
Master Servicer.
"Nonrecoverable Servicing Advance" means any Servicing Advance previously
made or proposed to be made in respect of a REMIC Mortgage Loan or REO Property
which, in the reasonable and good faith judgment of the Master Servicer or, if
applicable, the Trustee, will not be ultimately recoverable (together with
Advance Interest thereon) from late payments, Insurance Proceeds, Condemnation
Proceeds, Liquidation Proceeds, or any other recovery on or in respect of such
REMIC Mortgage Loan or REO Property. The determination by the Master Servicer
or, if applicable, the Trustee that it has made a Nonrecoverable Servicing
Advance or that any proposed Servicing Advance, if made, would constitute a
Nonrecoverable Servicing Advance, shall be evidenced by an Officer's Certificate
delivered to the Depositor and delivered to or retained by the Trustee,
detailing the basis for such determination. The Trustee shall be entitled to
rely conclusively upon any such Officer's Certificate of the Master Servicer.
"Non-Registered Certificate" means unless and until registered under the
Securities Act, any Class F, Class G, Class H, Class J, Class K, Class L, Class
V, Class W or Residual Certificate.
"Non-REMIC Asset" means an interest in a mortgage loan included in the
Trust Fund that is not included in the REMIC Mortgage Pool comprising the REMIC
I assets. The Non- REMIC Assets are listed on Schedule II to this Agreement.
"Non-REMIC Fee" means any fee or other asset listed on Schedule III hereto.
"Non-REMIC Trust Collection Subaccount" has the meaning set forth in
Section 5.1.
"Non-REMIC Trust Distribution Subaccount" has the meaning set forth in
Section 5.3.
"Non-REMIC Trust Fund Interests" means the interests representing
beneficial ownership of either the Non-REMIC Assets or the Non-REMIC Fees and
the proceeds thereof included in the Trust Fund but excluded from the REMICs,
which interests are represented by the Class V Certificates and the Class W
Certificates, respectively.
"Officer's Certificate" means (x) in the case of the Depositor, a
certificate signed by one or more of the Chairman of the Board, any Vice
Chairman, the President, or any Senior Vice President, Vice President or
Assistant Vice President, and by one or more of the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Depositor, or (y) in
the case of the Master Servicer and the Special Servicer, a certificate signed
by any of the officers referred to above or an employee thereof designated as a
Servicing Officer or Special Servicing Officer pursuant to this Agreement, or
(z) in the case of the Trustee, a certificate signed by a Responsible Officer.
"Operating Adviser" shall have the meaning specified in Section 8.32.
"Operating Adviser Votes" shall mean the votes cast at a duly called
meeting by the Holders of the Controlling Class to elect an Operating Adviser.
-30-
<PAGE>
"Opinion of Counsel" means a written opinion of counsel (which counsel must
be Independent outside counsel to the party required to deliver such opinion
with respect to any such opinion of counsel concerning the taxation, or status
as a REMIC for tax purposes, of the Trust or any REMIC Pool, but which counsel
may be in-house or outside counsel with respect to any such opinion of counsel
concerning other matters) addressed to the Trustee, reasonably acceptable in
form and substance to the Trustee.
"OTS" means the Office of Thrift Supervision or any successor thereto.
"Ownership Interest" means, as to any Certificate, any ownership or
security interest in such Certificate as the Holder thereof and any other
interest therein, whether direct or indirect, legal or beneficial, as owner or
as pledgee.
"P&I Advance" means, as to any REMIC Mortgage Loan (including, without
limitation, any REO Mortgage Loan), any advance in respect of principal and/or
interest delinquent as of the close of business on the day preceding the Advance
Report Date made by the Master Servicer pursuant to Section 4.1 (or any similar
advance made by the Trustee pursuant to Section 4.3).
"P&I Advance Date" means, with respect to any Distribution Date, the
Business Day preceding such Distribution Date.
"Participant" means a broker, dealer, bank, other financial institution or
other Person for whom the Clearing Agency effects book-entry transfers and
pledges of securities deposited with the Clearing Agency.
"Pass-Through Entity" means any of (a) a regulated investment company
described in Section 851 of the Code, a real estate investment trust described
in Section 856 of the Code, a common trust fund or an organization described in
Section 1381(a) of the Code, (b) any partnership, trust or estate as such terms
are defined in the Code or (c) any Person holding a Residual Certificate as
nominee for another Person.
"Pass-Through Rate": means with respect to:
(1) the Class A-1A Certificates, the Class A-1B Certificates, the Class
A-2 Certificates, the Class B Certificates, the Class C Certificates,
the Class D Certificates, the Class E Certificates, the Class F
Certificates, the Class G Certificates, the Class H Certificates, the
Class J Certificates, the Class K Certificates and the Class L
Certificates, for any Distribution Date, the respective fixed rates
per annum specified as such in the Preliminary Statement; and
(2) the Class IO Certificates, for any Distribution Date, the Class IO
Certificate Rate.
"Penalty Charges" means, with respect to any REMIC Mortgage Loan (including
without limitation an REO Mortgage Loan), any amounts collected thereon that
represent Late Fees or Default Interest.
-31-
<PAGE>
"Percentage Interest" means, with respect to any REMIC III Regular
Certificate, the portion of the relevant Class evidenced by such Certificate,
expressed as a percentage, the numerator of which is the Certificate Principal
Balance or the Certificate Notional Amount, as the case may be, of such
Certificate as of the Closing Date, as specified on the face thereof, and the
denominator of which is the initial Class Principal Balance or the initial Class
Notional Amount, as the case may be, of the relevant Class as of the Closing
Date. Percentage Interest means, with respect to a Residual Certificate, the
percentage interest in distributions to be made with respect to the relevant
Class, as stated on the face of such Certificate.
"Permitted Transferee" means any Transferee other than a Disqualified
Organization.
"Person" means any individual, corporation, partnership, limited liability
company joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Plan" has the meaning set forth in Section 3.3(d).
"Plan Asset Regulations" means the Department of Labor regulations set
forth in 29 C.F.R. ss. 2510.3-101.
"Prepayment Interest Excess" means, with respect to any REMIC Mortgage Loan
(other than the Glen Pointe Centre West Loan) that was subject to a Principal
Prepayment in full or in part during any calendar month, which Principal
Prepayment was applied to such REMIC Mortgage Loan following such REMIC Mortgage
Loan's Due Date but prior to the Determination Date in such calendar month, the
amount of interest (net of related Master Servicing Fees) accrued on the amount
of such Principal Prepayment during the period from and after such Due Date to
but not including the date such Principal Prepayment was applied to such REMIC
Mortgage Loan, to the extent actually collected from the related Mortgagor
(without regard to any Prepayment Premium that may have been collected). With
respect to the Glen Pointe Centre West Loan, "Prepayment Interest Excess" means,
with respect to any Distribution Date as to which a Principal Prepayment was
made by the related Mortgagor after the next preceding Due Date but prior to the
Master Servicer Remittance Date, an amount equal to the amount by which (1) the
amount of interest received from the related Mortgagor in respect of such REMIC
Mortgage Loan included with such Principal Prepayment exceeds (2) 30 full days
of interest at the related Net Mortgage Rate on the Stated Principal Balance of
such REMIC Mortgage Loan in respect of which interest would have been due in the
absence of such Principal Prepayment on the next preceding Due Date.
"Prepayment Interest Shortfall" means, with respect to any REMIC Mortgage
Loan (other than the Glen Pointe Centre West Loan) that was subject to a
Principal Prepayment in full or in part during any calendar month, which
Principal Prepayment was applied to such REMIC Mortgage Loan prior to such REMIC
Mortgage Loan's Due Date but after the Determination Date in such calendar
month, the amount of interest that would have accrued at the related Net
Mortgage Rate on the amount of such Principal Prepayment during the period
commencing on the date as of which such Principal Prepayment was applied to such
REMIC Mortgage Loan and ending on the day immediately preceding such Due Date,
inclusive, to the extent not collected from the related Mortgagor (without
regard to any Prepayment Premium that may have been collected). With respect to
the Glen Pointe Centre West Loan, "Prepayment Interest Shortfall" means, with
respect to any Distribution Date as to which a Principal Prepayment was made by
the related Mortgagor after the
-32-
<PAGE>
second preceding Due Date but prior to the next preceding Due Date, an amount
equal to the amount by which (1) 30 full days of interest at the related Net
Mortgage Rate on the Stated Principal Balance of such REMIC Mortgage Loan in
respect of which interest would have been due in the absence of such Principal
Prepayment on the next preceding Due Date exceeds (2) the amount of interest
received from the related Mortgagor in respect of such REMIC Mortgage Loan
included with such Principal Prepayment.
"Prepayment Premium" means any premium, penalty or fee paid or payable, as
the context requires, by a Mortgagor in connection with a Principal Prepayment
on, or other early collection of principal of, a REMIC Mortgage Loan (including,
without limitation, an REO Mortgage Loan).
"Primary Servicing Office" means, with respect to each of the Master
Servicer and the Special Servicer, the office thereof primarily responsible for
performing its respective duties under this Agreement; initially located in
Kansas City, Missouri, in the case of the Master Servicer, and Connecticut, in
the case of the Special Servicer.
"Principal Balance Certificates" means, collectively, the REMIC III Regular
Certificates other than the Class IO Certificates.
"Principal Distribution Amount" means, for any Distribution Date, the
aggregate of (i) the Current Principal Distribution Amount for such Distribution
Date, and (ii) if such Distribution Date is subsequent to the initial
Distribution Date, the excess, if any, of the Principal Distribution Amount for
the preceding Distribution Date, over the aggregate distributions of principal
made on the Principal Balance Certificates in respect of such Principal
Distribution Amount on the preceding Distribution Date.
"Principal Prepayment" means any payment of principal made by the Mortgagor
on a REMIC Mortgage Loan which is received in advance of its scheduled Due Date
and which is not accompanied by an amount of interest representing scheduled
interest due on any date or dates in any month or months subsequent to the month
of prepayment.
"Proposed Plan" has the meaning set forth in Section 8.20.
"Prospective Investor" means any prospective purchaser of a Certificate or,
in the case of a Book-Entry Certificate, of a beneficial ownership interest
therein.
"Prospectus" means the prospectus dated December 11, 1997, as supplemented
by the prospectus supplement dated December 22, 1997 (the "Prospectus
Supplement"), relating to the offering of the Registered Certificates.
"Prospectus Supplement" has the meaning set forth in the definition of
Prospectus.
"Purchase Price" means, with respect to any Mortgage Loan (other than an
REO Mortgage Loan), a price equal to the outstanding principal balance of such
Mortgage Loan as of the date of purchase, together with (a) all accrued and
unpaid interest on such Mortgage Loan at the related Mortgage Rate in effect
from time to time to but not including the Due Date in the Collection Period of
purchase, (b) all related unreimbursed Servicing Advances with Advance Interest
thereon, and (c) if such Mortgage Loan is being purchased by the Seller pursuant
to Section 6 of the
-33-
<PAGE>
Mortgage Loan Purchase Agreement, all expenses reasonably incurred or to be
incurred by the Master Servicer (unless the Seller is acting as Master
Servicer), the Depositor and the Trustee in respect of the Breach or Document
Defect giving rise to the repurchase obligation. With respect to any REO
Property, "Purchase Price" means the amount calculated in accordance with the
preceding sentence in respect of the related REO Mortgage Loan.
"QIB" means a qualified institutional buyer within the meaning of Rule 144A
under the Securities Act.
"Qualified Appraiser" means an Independent licensed MAI-designated
appraiser.
"Qualified Insurer" means an insurance company or security or bonding
company duly qualified as such under the laws of the relevant jurisdiction and
duly authorized and licensed in such jurisdiction to transact the applicable
insurance business and to write the insurance provided.
"Qualified Mortgage" means a REMIC Mortgage Loan that is a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code (but without
regard to the rule in Treasury Regulation Section 1.860G-2(f)(2) that treats a
defective obligation as a qualified mortgage, or any substantially similar
successor provision) and applicable Treasury Regulations promulgated pursuant
thereto.
"Qualifying Substitute Mortgage Loan" means a Mortgage Loan substituted for
a Deleted Mortgage Loan that is a REMIC Mortgage Loan and which, on the date of
substitution, (i) has a principal balance, after deduction of the principal
portion of the Monthly Payment due in the month of substitution, not in excess
of the Stated Principal Balance of the Deleted Mortgage Loan; (ii) is accruing
interest at a rate of interest at least equal to that of the Deleted Mortgage
Loan; (iii) has a fixed Mortgage Rate; (iv) is accruing interest on the same
basis (for example, a 360-day year consisting of twelve 30-day months) as the
Deleted Mortgage Loan; (v) has a remaining term to stated maturity not greater
than, and not more than two years less than, that of the Deleted Mortgage Loan;
(vi) has an original Loan-to-Value Ratio not higher than that of the Deleted
Mortgage Loan and a current Loan-to-Value Ratio (equal to the principal balance
on the date of substitution divided by its current Appraised Value) not higher
than the then current Loan-to-Value Ratio of the Deleted Mortgage Loan; (vii)
will comply with all of the representations and warranties relating to the
Mortgage Loans set forth in the Mortgage Loan Purchase Agreement, as of the date
of substitution; (viii) has an Environmental Assessment relating to the related
Mortgaged Property in its mortgage file; and (ix) as to which the Trustee has
received an Opinion of Counsel, at the Seller's expense, that such Replacement
Mortgage Loan is a "qualified replacement mortgage" within the meaning of
Section 860G(a)(4) of the Code; provided that no Replacement Mortgage Loan may
have a Maturity Date after the date three years prior to the Final Rated
Distribution Date, and provided, further, that no such Replacement Mortgage Loan
shall be substituted for a Deleted Mortgage Loan unless Rating Agency
Confirmation is obtained. In the event that either one mortgage loan is
substituted for more than one Deleted Mortgage Loan or more than one mortgage
loan is substituted for one or more Deleted Mortgage Loans, then (a) the
principal balance referred to in clause (i) above shall be determined on the
basis of aggregate principal balances and (b) the rates referred to in clauses
(ii) and (iii) above and the remaining term to stated maturity referred to in
clause (v) above shall be determined on a weighted average basis. Whenever a
Qualifying Substitute Mortgage Loan is substituted for a Deleted Mortgage Loan
pursuant to this Agreement, the party effecting such substitution shall certify
that such Replacement Mortgage Loan meets all of the requirements of this
definition and shall send such certification to the Trustee.
-34-
<PAGE>
"Rating Agencies" means Fitch and Moody's.
"Rating Agency Confirmation" means, with respect to any matter, where
required under this Agreement, confirmation in writing by each Rating Agency
that a proposed action, failure to act, or other event specified herein will not
in and of itself result in the withdrawal, downgrade, or qualification of the
rating assigned by such Rating Agency to any Class of Certificates then rated by
such Rating Agency.
"Realized Loss" means, with respect to any Distribution Date the amount, if
any, by which the aggregate of the Certificate Principal Balances of the
Principal Balance Certificates, after giving effect to distributions made on
such Distribution Date, exceeds the Aggregate Stated Principal Balance of the
REMIC Mortgage Loans as of the Due Date occurring in the month in which such
Distribution Date occurs.
"Record Date" means, with respect to any Class of Certificates for any
Distribution Date, the last Business Day of the calendar month immediately
preceding the month in which such Distribution Date occurs.
"Registered Certificates" means, collectively, the Class IO, Class A-1A,
Class A- 1B, Class A-2, Class B, Class C, Class D and Class E Certificates.
"REMIC" means a real estate mortgage investment conduit within the meaning
of Section 860D of the Code.
"REMIC I" means the segregated pool of assets consisting of the REMIC
Mortgage Loans (and excluding the Non-REMIC Assets and the Non-REMIC Fees), such
amounts as shall from time to time be held in the Collection Account and the
Distribution Account in respect thereof, the Insurance Policies and any REO
Properties, for which a REMIC election is to be made pursuant to Section 12.1(a)
hereof.
"REMIC I Interests" means, collectively, the REMIC I Regular Interests and
the Class R-I Interests.
"REMIC I Regular Interest" means, with respect to each REMIC Mortgage Loan
as of the Closing Date, the separate uncertificated beneficial ownership
interest in REMIC I issued in respect of such REMIC Mortgage Loan hereunder and
designated as a "regular interest" in REMIC I. Each REMIC I Regular Interest
shall accrue interest at the related REMIC I Remittance Rate and shall be
entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Principal
Balance (which shall equal the Cutoff Date Principal Balance of the related
REMIC Mortgage Loan). The designation for each REMIC I Regular Interest shall be
the loan number for the related REMIC Mortgage Loan set forth in the Mortgage
Loan Schedule as of the Closing Date. If a Replacement Mortgage Loan or Loans
are substituted for any Deleted Mortgage Loan, the REMIC I Regular Interest that
related to the Deleted Mortgage Loan shall thereafter relate to such Replacement
Mortgage Loan(s) but the terms thereof shall not be adjusted by reason of such
substitution.
"REMIC I Remittance Rate" means, with respect to any REMIC I Regular
Interest for any Distribution Date, a rate per annum equal to the Net Mortgage
Rate in effect for the related REMIC Mortgage Loan as of the Closing Date. If
any REMIC Mortgage Loan included in the Trust
-35-
<PAGE>
Fund and included in the REMIC I assets as of the Closing Date is replaced by a
Replacement Mortgage Loan or Loans, the REMIC I Remittance Rate for the related
REMIC I Regular Interest shall still be calculated in accordance with the
preceding sentence based on the Net Mortgage Rate for the Deleted Mortgage Loan.
Notwithstanding the foregoing, with respect to the Timberlands Office Park - B
Loan, the Timberlands Office Park - C Loan, the Timberlands Office Park - H
Loan, the Sonesta Beach Hotel Loan and the Pentucket Shopping Center Loan (each
REMIC Mortgage Loan that as of the Closing Date provides for accrual of interest
at a rate per annum that exceeds the rate per annum at which interest is payable
by the related Mortgagor) the REMIC I Remittance Rate shall be the rate per
annum at which interest is payable on the related Mortgage Loan minus the Master
Servicing Fee Rate.
"REMIC II" means the segregated pool of assets consisting of the REMIC I
Regular Interests and all distributions thereon conveyed to the Trustee for the
benefit of REMIC III and for which a REMIC election is to be made pursuant to
Section 12.1(a) hereof.
"REMIC II Distribution Amount" has the meaning set forth in Section 6.2(d).
"REMIC II Interests" means, collectively, the REMIC II Regular Interests
and the Class R-II Interests.
"REMIC II Regular Interest" means any of the thirteen separate
uncertificated beneficial interests in REMIC II issued hereunder and designated
as a "regular interest" in REMIC II. Each REMIC II Regular Interest shall
represent a right to receive interest at the related REMIC II Remittance Rate in
effect from time to time and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto. The designations for the respective REMIC II Regular Interests
are set forth in the Preliminary Statement hereto.
"REMIC II Remittance Rate" means, with respect to each REMIC II Regular
Interest, for any Distribution Date, the weighted average of the REMIC I
Remittance Rates (or, in the case of Non-30/360 REMIC I Regular Interests, the
Equivalent 30/360 Rates) for the REMIC I Regular Interests for such Distribution
Date (weighted on the basis of the respective Uncertificated Principal Balances
of such REMIC I Regular Interests immediately prior to such Distribution Date).
"REMIC III" means the segregated pool of assets consisting of all of the
REMIC II Regular Interests, with respect to which a separate REMIC election is
to be made pursuant to Section 12.1(a) hereof.
"REMIC III Certificate" means any Certificate other than the Class V
Certificates or the Class W Certificates.
"REMIC III Distribution Amount" has the meaning set forth in Section
6.3(c).
"REMIC Collection Subaccount" has the meaning set forth in Section 5.1.
"REMIC Distribution Subaccount" has the meaning set forth in Section 5.3.
"REMIC Mortgage Loan" means any Mortgage Loan included in the segregated
REMIC Mortgage Pool comprising REMIC I and identified on Schedule I hereto.
-36-
<PAGE>
"REMIC III Regular Certificate" means any REMIC III Certificate, other than
the Class R Certificate.
"REMIC Mortgage Pool" means, collectively, all of the REMIC Mortgage Loans
(including without limitation REO Mortgage Loans and Replacement Mortgage Loans,
but excluding Deleted Mortgage Loans).
"REMIC Pool" means each of the three segregated pools of assets designated
as a REMIC pursuant to Section 12.1(a) hereof and with respect to which a REMIC
election will be made.
"REMIC Provisions" means the provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Sections
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations and rulings promulgated thereunder, as the foregoing
may be in effect from time to time and taking account, as appropriate, of any
proposed legislation which, as proposed, would have an effective date prior to
enactment thereof and any proposed regulations.
"Remittance Rate" means, with respect to any REMIC I Regular Interest, the
REMIC I Remittance Rate and, with respect to any REMIC II Regular Interest, the
REMIC II Remittance Rate, in either case for such Class of REMIC Regular
Interests.
"Rents from Real Property" means, with respect to any REO Property, income
of the character described in Section 856(d) of the Code.
"REO Account" has the meaning set forth in Section 8.20(b).
"REO Acquisition" means the acquisition of any REO Property pursuant to
Section 8.7.
"REO Disposition" means the sale or other disposition of any REO Property
pursuant to Section 8.31.
"REO Extension" has the meaning set forth in Section 8.19(a).
"REO Income" means, with respect to any REO Property for any Collection
Period, all income received in connection with such REO Property during such
period.
"REO Mortgage Loan" means a REMIC Mortgage Loan as to which the related
Mortgaged Property is an REO Property. Each REO Mortgage Loan shall be deemed to
provide for monthly payments of principal and/or interest equal to its Assumed
Monthly Payment and otherwise to have the same terms and conditions as its
predecessor REMIC Mortgage Loan. Each REO Mortgage Loan shall be deemed to have
an initial unpaid principal balance and Stated Principal Balance equal to the
unpaid principal balance and Stated Principal Balance, respectively, of its
predecessor REMIC Mortgage Loan as of the date on which the related REO Property
was acquired on behalf of the Trust. All Monthly Payments (other than a Balloon
Payment), Assumed Monthly Payments (in the case of a Balloon Mortgage Loan
delinquent in respect of its Balloon Payment) and other amounts due and owing,
or deemed to be due and owing in respect of an REO Mortgage Loan as of the date
on which the related REO Property was acquired on behalf of the Trust, shall be
-37-
<PAGE>
deemed to continue to be due and owing in respect of an REO Mortgage Loan. All
amounts payable or reimbursable to the Master Servicer, the Special Servicer or
any other Person in respect of the predecessor REMIC Mortgage Loan as of the
date on which the related REO Property was acquired on behalf of the Trust,
shall be deemed to continue to be payable or reimbursable to the Master
Servicer, the Special Servicer or such other Person, as the case may be, in
respect of an REO Mortgage Loan. Collections in respect of any REO Mortgage Loan
(exclusive of amounts to be applied to the payment of, or to be reimbursed to
the Master Servicer or Special Servicer for the payment of, the costs of
operating, managing, maintaining and disposing of any REO Property) shall be
treated: first, as a recovery of accrued and unpaid interest on such REO
Mortgage Loan at the Mortgage Rate to but not including the Due Date in the
Collection Period of receipt; second, as a recovery of principal of such REO
Mortgage Loan to the extent of its entire unpaid principal balance; and third,
in accordance with the normal servicing practices of the Master Servicer, as a
recovery of any other amounts due and owing in respect of such REO Mortgage
Loan.
"REO Property" means a Mortgaged Property acquired by the Trust through
foreclosure, deed-in-lieu of foreclosure, abandonment or reclamation from
bankruptcy or otherwise in connection with a Defaulted Mortgage Loan and that is
treated as foreclosure property under the REMIC Provisions.
"REO Sale Deadline" has the meaning set forth in Section 8.19(a).
"REO Tax" has the meaning set forth in Section 8.20(a).
"Replacement Mortgage Loan" means any Qualifying Substitute Mortgage Loan
that is substituted for one or more Deleted Mortgage Loans.
"Report Date" means not later than noon New York time on the third Business
Day before the related Distribution Date.
"Repurchase Proceeds" means amounts paid by the Seller under the Mortgage
Loan Purchase Agreement, in connection with the repurchase of any Mortgage Loan
as contemplated by Section 2.3.
"Request for Release" means a request for release of certain documents
relating to the Mortgage Loans, a form of which is attached hereto as Exhibit C.
"Required Appraisal Loan" means any REMIC Mortgage Loan (including without
limitation any REO Mortgage Loan) as to which an Appraisal Event has occurred
and is continuing.
"Required Insurance Policy" means with respect to any Mortgaged Property,
any insurance policy that is required to be maintained from time to time under
this Agreement in respect of such Mortgaged Property.
"Reserve Account" means the account or accounts created and maintained
pursuant to Section 8.3(d).
"Reserve Funds" means, with respect to any Mortgage Loan, any cash amounts
or instruments convertible into cash delivered by the related Mortgagor to be
held in escrow by or on behalf of the Mortgagee representing reserves for
repairs, replacements, capital improvements,
-38-
<PAGE>
environmental testing and remediation and/or similar type items with respect to
the related Mortgaged Property.
"Residual Certificates" means, if and when the holder of the Class R
Certificate exchanges such Certificate for Class R-I Certificates, Class R-II
Certificates and Class R-III Certificates pursuant to Section 12.1 (q) hereof,
with respect to REMIC I, the Class R-I Certificates, with respect to REMIC II,
the Class R-II Certificates and, with respect to REMIC III, the Class R-III
Certificates; and, until such time, Residual Certificates means the Class R
Certificate.
"Residual Interests" shall mean the Class R-I Interest, the Class R-II
Interest and the Class R-III Interest, collectively.
"Responsible Officer" means, when used with respect to the initial Trustee,
any officer assigned to its Corporate Trust Department and when used with
respect to any successor Trustee, any Vice President, Assistant Vice President,
corporate trust officer or any assistant corporate trust officer.
"Retained Servicing Interest" has the meaning set forth in Section 8.10(a).
"Reverse Sequential Order" means sequentially to the Class L, Class K,
Class J, Class H, Class G, Class F, Class E, Class D, Class C, Class B and Class
A Certificates.
"Rule 144A" means Rule 144A under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" means Aetna.
"Senior Certificates" means, collectively, the Class A and Class IO
Certificates.
"Servicing Account" means the account or accounts created and maintained
pursuant to Section 8.3(a).
"Servicing Advances" means all customary, reasonable and necessary "out of
pocket" costs and expenses (including attorneys' fees and expenses and fees of
real estate brokers) incurred by the Master Servicer or, if applicable, the
Trustee in connection with the servicing and administering of (a) a REMIC
Mortgage Loan in respect of which a default, delinquency or other unanticipated
event has occurred or as to which a default is imminent (including, without
limitation, Liquidation Expenses) or (b) an REO Property, including, but not
limited to, the cost of (i) compliance with the obligations of the Master
Servicer set forth in Section 8.3(c), (ii) the preservation, restoration and
protection of a Mortgaged Property or REO Property, (iii) obtaining any
Insurance Proceeds, Condemnation Proceeds or Liquidation Proceeds in respect of
any REMIC Mortgage Loan or REO Property, (iv) any enforcement or judicial
proceedings with respect to a Mortgaged Property, including without limitation
foreclosures and similar proceedings, and (v) the operation, management,
maintenance and liquidation of any REO Property; provided that, notwithstanding
anything to the contrary, "Servicing Advances" shall not include allocable
overhead of the Master Servicer, the Trustee or the Special Servicer, such as
costs for office space, office equipment, supplies and related expenses,
employee salaries and related expenses and similar internal
-39-
<PAGE>
costs and expenses, or costs incurred by either such party in connection with
its purchase of any Mortgage Loan or REO Property pursuant to any provision of
this Agreement.
"Servicing Fees" means, with respect to each REMIC Mortgage Loan (including
without limitation each REO Mortgage Loan), the Master Servicing Fee and, if
applicable, the Special Servicing Fee.
"Servicing File" means, collectively as to any Mortgage Loan, any
documents, other than documents required to be part of the related Mortgage
File, in the possession of the Master Servicer or Special Servicer and relating
to the origination and servicing of such Mortgage Loan, including without
limitation a closing binder for such Mortgage Loan and, in each case if and to
the extent available, any appraisal, environmental report, engineering report,
operating statements, rent rolls and copies of major leases.
"Servicing Officer" means any officer or employee of the Master Servicer
involved in, or responsible for, the administration and servicing of the
Mortgage Loans whose name and specimen signature appear on a list of servicing
officers or employees furnished to the Trustee by the Master Servicer and signed
by an officer of the Master Servicer, as such list may from time to time be
amended by the Master Servicer.
"Servicing Return Date" means, with respect to any Corrected Mortgage Loan,
the date that servicing thereof is returned by the Special Servicer to the
Master Servicer pursuant to Section 8.1(c). "Servicing Standard" has the meaning
set forth in Section 8.1(a).
"Servicing Transfer Event" means, with respect to any REMIC Mortgage Loan,
the occurrence of any of the events described in clauses (a) through (h) of the
definition of "Specially Serviced Mortgage Loan".
"Special Servicer" means Aetna or any successor Special Servicer as herein
provided.
"Special Servicer Monthly Reports" mean the reports substantially in the
form of Exhibit F-2 attached hereto.
"Special Servicing Fee" means, with respect to each Specially Serviced
Mortgage Loan and REO Mortgage Loan, the fee designated as such and payable to
the Special Servicer pursuant to Section 8.10(b).
"Special Servicing Fee Rate" means, with respect to each Specially Serviced
Mortgage Loan and REO Mortgage Loan, 0.25% per annum.
"Special Servicing Officer" means any officer or employee of the Special
Servicer involved in, or responsible for, the administration and servicing of
the Specially Serviced Mortgage Loans whose name and specimen signature appear
on a list of servicing officers or employees furnished to the Trustee and the
Master Servicer by the Special Servicer signed by an officer of the Special
Servicer, as such list may from time to time be amended.
-40-
<PAGE>
"Specially Serviced Asset Report" means the report prepared by the Special
Servicer substantially with the information set forth in Exhibit F-3 attached
hereto.
"Specially Serviced Mortgage Loan" means any REMIC Mortgage Loan as to
which any of the following events has occurred:
(a) the related Mortgagor has failed to make when due any Balloon Payment,
which failure has continued unremedied for 30 days; or
(b) the related Mortgagor has failed to make when due any Monthly Payment
(other than a Balloon Payment) or any other payment required under the related
Mortgage Note or the related Mortgage, which failure continues unremedied for 60
days; or
(c) the Master Servicer (in consultation with the Special Servicer) has
determined, in its good faith and reasonable judgment, that a default in the
making of a Monthly Payment or any other payment required under the related
Mortgage Note or the related Mortgage is likely to occur within 30 days and is
likely to remain unremedied for at least 60 days or, in the case of a Balloon
Payment, for at least 30 days; or
(d) there shall have occurred a default, other than as described in clause
(a) or (b) above, that (in the Master Servicer's good faith and reasonable
judgment) (in consultation with the Special Servicer) materially impairs the
value of the related Mortgaged Property as security for the REMIC Mortgage Loan
or otherwise materially and adversely affects the interests of
Certificateholders, which default has continued unremedied for the applicable
grace period under the terms of the REMIC Mortgage Loan (or, if no grace period
is specified, 60 days); or
(e) commencement of any involuntary case against the related Mortgagor
under any present or future federal or state bankruptcy, insolvency or similar
laws, or the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding up or liquidation of the related
Mortgagor's affairs; or
(f) the related Mortgagor shall have consented to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
such Mortgagor or of or relating to all or substantially all of its property; or
(g) the related Mortgagor shall have admitted in writing its inability to
pay its debts generally as they become due, filed a petition to take advantage
of any applicable bankruptcy, insolvency or reorganization statute, made an
assignment for the benefit of its creditors, or voluntarily suspended payment of
its obligations (provided that the filing of the "Plan of Reorganization"
proposed on or prior to the Closing Date with respect to the Sonesta Beach Hotel
Loan shall not by itself cause such Mortgage Loan to become a Specially Serviced
Mortgage Loan); or
(h) the Master Servicer shall have received notice of the commencement of
foreclosure or similar proceedings with respect to the related Mortgaged
Property;
-41-
<PAGE>
provided that a REMIC Mortgage Loan will cease to be a Specially Serviced
Mortgage Loan (each such Loan, a "Corrected Mortgage Loan") at such time as such
of the following as are applicable occur with respect to the circumstances
identified above that caused the REMIC Mortgage Loan to be characterized as a
Specially Serviced Mortgage Loan (and provided that no other Servicing Transfer
Event then exists):
(w) with respect to the circumstances described in clauses (a) and (b)
above, the related Mortgagor has made three consecutive full and
timely Monthly Payments under the terms of such REMIC Mortgage Loan
(as such terms may be changed or modified in connection with a
bankruptcy or similar proceeding involving the related Mortgagor or by
reason of a modification, waiver or amendment granted or agreed to by
the Special Servicer pursuant to Section 8.18);
(x) with respect to the circumstances described in clauses (c), (e), (f)
and (g) above, such circumstances cease to exist in the good faith and
reasonable judgment of the Special Servicer;
(y) with respect to the circumstances described in clause (d) above, such
default is cured as a result of a modification to a Money Term of such
REMIC Mortgage Loan; and
(z) with respect to the circumstances described in clause (h) above, such
proceedings are terminated.
"Startup Day" means, with respect to each of REMIC I, REMIC II and REMIC
III, the day designated as such in Section 12.1(b).
"Stated Maturity Date" means, with respect to any Mortgage Loan, the Due
Date on which the last payment of principal is due and payable under the terms
of the related Mortgage Note as in effect on the Closing Date, without regard to
any change in or modification of such terms in connection with a bankruptcy or
similar proceeding involving the related Mortgagor or a modification, waiver or
amendment of such Mortgage Loan granted or agreed to by the Master Servicer or
Special Servicer pursuant to Section 8.18, and without regard to the exercise of
any Call Option under such Mortgage Loan.
"Stated Principal Balance" means, with respect to any REMIC Mortgage Loan
(including without limitation any REO Mortgage Loan), an amount equal to (a) the
unpaid principal balance of such REMIC Mortgage Loan as of the Cut-off Date (or,
in the case of a Replacement Mortgage Loan, as of the related date of
substitution), after application of all payments due on or before such date,
whether or not received, reduced on a cumulative basis on each subsequent
Distribution Date (to not less than zero) by (b) the sum of (i) all payments (or
P&I Advances in lieu thereof) of, and all other collections allocated as
provided in Section 1.2 to, principal of or with respect to such REMIC Mortgage
Loan that are (or, if they had not been applied to cover any Additional Trust
Expense, would have been) distributed to Certificateholders on such Distribution
Date, and (ii) the principal portion of any Realized Loss incurred in respect of
such REMIC Mortgage Loan during the related Collection Period; provided that,
notwithstanding the foregoing, if a Liquidation Event occurs in respect of such
REMIC Mortgage Loan (or any related REO Property), then the "Stated Principal
Balance" of such REMIC Mortgage Loan shall be zero commencing as of the
Distribution Date in the Collection Period next following the Collection Period
in which such Liquidation Event occurred.
-42-
<PAGE>
"Subordinate Certificates" means, collectively, the Class B, Class C, Class
D, Class E, Class F, Class G, Class H, Class J, Class K and Class L
Certificates.
"Sub-Servicer" means any Person with which the Master Servicer or the
Special Servicer has entered into a Sub-Servicing Agreement.
"Sub-Servicing Agreement" means the written contract between the Master
Servicer or the Special Servicer and any Sub-Servicer relating to servicing and
administration of Mortgage Loans as provided in Section 8.4, as amended,
supplemented or otherwise modified from time to time.
"Substitution Shortfall Amount" means, in connection with the substitution
of one or more Replacement Mortgage Loans for one or more Deleted Mortgage
Loans, the amount, if any, by which the Purchase Price or aggregate Purchase
Price, as the case may be, for such Deleted Mortgage Loan(s) exceeds the Stated
Principal Balance or aggregate Stated Principal Balance, as the case may be, of
such Replacement Mortgage Loan(s).
"Tax Matters Person" means the person designated as the "tax matters
person" of any REMIC Pool pursuant to Treasury Regulation Section 1.860F-4(d)
and temporary Treasury Regulations Section 301.6231(a)(7)-1T (or relevant
successor provision), which shall be the person having the largest Percentage
Interest in the Residual Certificates of the related REMIC Pool.
"Tax Returns" means the federal income tax return on Internal Revenue
Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax
Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of each of REMIC I, REMIC II and REMIC III due to its
classification as a REMIC under the REMIC Provisions, together with any and all
other information, reports or returns that may be required to be furnished to
the Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal or
Applicable State Law.
"Termination Price" shall have the meaning set forth in Section 10.1(b)
herein.
"30/360 REMIC I Regular Interest" means a REMIC I Regular Interest that
accrues interest on the basis of a 360-day year consisting of twelve 30-day
months,
"Transfer" means any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment of any Ownership Interest in a
Certificate.
"Transferee" means any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
"Transferor" means any Person who is disposing by Transfer any Ownership
Interest in a Certificate.
"Treasury Rate" has the meaning set forth in Section 6.4 herein.
"Trust" means the trust created pursuant to this Agreement, the assets of
which consist of the Mortgage Loans, such amounts as shall from time to time be
held in the Collection
-43-
<PAGE>
Account and the Distribution Account, the Insurance Policies, any REO Properties
and other rights and property referred to in Section 2.1(a) hereof.
"Trust Fund" means, collectively, all of the assets of the Trust.
"Trustee" means State Street Bank and Trust Company, as Trustee, or its
successor-in-interest, or if any successor trustee or any co-trustee shall be
appointed as herein provided, then Trustee shall also mean such successor
trustee (subject to Section 7.7 hereof) and such co-trustee (subject to Section
7.9 hereof), as the case may be.
"Trustee Fee" means, as to each REMIC Mortgage Loan (including without
limitation each REO Mortgage Loan), the monthly fee payable to the Trustee that
is calculated in the same manner as the Master Servicing Fee for such REMIC
Mortgage Loan but at the Trustee Fee Rate. The Trustee Fee for each REMIC
Mortgage Loan shall be payable to the Trustee by the Master Servicer out of the
Master Servicing Fee for such REMIC Mortgage Loan as provided herein.
"Trustee Fee Rate" means 0.004% per annum.
"UCC Financing Statement" means a financing statement executed and filed
pursuant to the Uniform Commercial Code, as in effect in the relevant
jurisdiction, or, in the case of Louisiana, the comparable provisions of
Louisiana law.
"Uncertificated Accrued Interest" means: (i) with respect to any REMIC I
Regular Interest, for any Distribution Date, interest for the related Interest
Accrual Period (calculated on the basis of a 360-day year consisting of twelve
30-day months or, if the related REMIC Mortgage Loan accrues interest on a
different basis, on such alternative basis) accrued at the applicable REMIC I
Remittance Rate on the Uncertificated Principal Balance of such REMIC I Regular
Interest immediately prior to such Distribution Date; and (ii) with respect to
any REMIC II Regular Interest, for any Distribution Date, interest for the
related Interest Accrual Period (calculated on the basis of a 360-day year
consisting of twelve 30-day months) accrued at the applicable REMIC II
Remittance Rate on the Uncertificated Principal Balance of such REMIC II Regular
Interest immediately prior to such Distribution Date.
"Uncertificated Distributable Interest" means, with respect to any REMIC I
Regular Interest or REMIC II Regular Interest for any Distribution Date, an
amount equal to: (a) the Uncertificated Accrued Interest in respect of such
REMIC I Regular Interest or REMIC II Regular Interest, as the case may be, for
such Distribution Date; reduced (to not less than zero) by (b) the portion of
any Net Aggregate Prepayment Interest Shortfall for such Distribution Date
allocated to such REMIC I Regular Interest or REMIC II Regular Interest, as the
case may be, as set forth below; and increased by (c) any Uncertificated
Distributable Interest in respect of such REMIC I Regular Interest or REMIC II
Regular Interest, as the case may be, for the immediately preceding Distribution
Date that was not deemed paid on the immediately preceding Distribution Date
pursuant to Section 6.2 or 6.3, as applicable, together with one month's
interest (calculated on the basis of a 360-day year consisting of twelve 30-day
months or, if Uncertificated Accrued Interest in respect of such REMIC I Regular
Interest accrues on an alternative basis, calculated on such alternative basis)
on such unpaid Uncertificated Distributable Interest at the REMIC I Remittance
Rate or the REMIC II Remittance Rate, as the case may be, applicable to such
REMIC I Regular Interest or REMIC II Regular Interest, as the case may be, for
the current Distribution Date. The
-44-
<PAGE>
Net Aggregate Prepayment Interest Shortfall for any Distribution Date shall be
allocated: (i) among the respective REMIC I Regular Interests, pro rata in
accordance with the respective amounts of Uncertificated Accrued Interest with
respect thereto for such Distribution Date; and (ii) among the respective REMIC
II Regular Interests, pro rata in accordance with the respective amounts of
Uncertificated Accrued Interest with respect thereto for such Distribution Date.
"Uncertificated Principal Balance" means the principal amount of any REMIC
I Regular Interest or REMIC II Regular Interest outstanding as of any date of
determination. As of the Closing Date, the Uncertificated Principal Balance of
each REMIC I Regular Interest shall equal the Cut-off Date Principal Balance of
the related REMIC Mortgage Loan. On each Distribution Date, the Uncertificated
Principal Balance of each REMIC I Regular Interest shall be reduced by all
distributions of principal deemed to have been made thereon on such Distribution
Date pursuant to Section 6.2 and, if and to the extent appropriate, shall be
further reduced on such Distribution Date as provided in Section 6.5. The
Uncertificated Principal Balance of a REMIC I Interest shall not take into
account initially, and shall not be increased on account of, any additional
interest that accrues but is not payable currently and under the terms of the
related Mortgage Note are deemed added to the principal balance of such Mortgage
Loan. As of the Closing Date, the Uncertificated Principal Balance of each REMIC
II Regular Interest shall equal the amount set forth in the Preliminary
Statement hereto as its initial Uncertificated Principal Balance. On each
Distribution Date, the Uncertificated Principal Balance of each REMIC II Regular
Interest shall be reduced by all distributions of principal deemed to have been
made thereon on such Distribution Date pursuant to Section 6.3 and, if and to
the extent appropriate, shall be further reduced on such Distribution Date as
provided in Section 6.5.
"Underwritten Cash Flow" means, with respect to any Mortgaged Property or
REO Property, for any twelve month period (or such shorter period calculated on
an annualized basis), the underwritable cash flow amount calculated in
accordance with Exhibit G hereto.
"Underwriter" means Morgan Stanley & Co. Incorporated or its successor in
interest.
"Uninsured Cause" means any cause of damage to property subject to a
Mortgage such that the complete restoration of such property is not fully
reimbursable by the hazard insurance policies or flood insurance policies
required to be maintained pursuant to Section 8.5.
"United States Person" means a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof (or, in the case
of a partnership, any other entity designated as a "domestic partnership" under
Treasury regulations), or an estate or trust whose income from sources without
the United States is includible in gross income for United States federal income
tax purposes regardless of its connection with the conduct of a trade or
business within the United States or a trust subject to the control of a United
States person and the primary supervision of a United States court (or, to the
extent provided in applicable Treasury regulations, certain trusts in existence
as of August 20, 1996 that elect to be treated as United States Persons).
"USPAP" means the Uniform Standards of Professional Appraisal Practices.
"Voting Rights" means the voting rights to which the Certificateholders are
entitled hereunder. At all times during the term of this Agreement, 93% of the
Voting Rights shall be
-45-
<PAGE>
allocated among the Holders of the various outstanding Classes of Principal
Balance Certificates in proportion to the respective Class Principal Balances of
their Certificates, 6% of the Voting Rights shall be allocated to the Holders of
the Class IO Certificates, and the remaining Voting Rights shall be allocated
equally among the Holders of the respective Class (or, if applicable, Classes)
of the Residual Certificates. Voting Rights allocated to a Class of
Certificateholders shall be allocated among such Certificateholders in
proportion to the Percentage Interests evidenced by their respective
Certificates. The Class V and the Class W Certificates shall have no Voting
Rights.
"Workout Fee" means, with respect to each Corrected Mortgage Loan, the fee
designated as such and payable to the Special Servicer pursuant to Section
8.10(b).
"Workout Fee Rate" means, with respect to each Corrected Mortgage Loan as
to which a Workout Fee is payable, 0.75%.
Section 1.2 Certain Calculations in Respect of the REMIC Mortgage Pool.
(a) All amounts collected in respect of any group of related
Cross-Collateralized Mortgage Loans (other than REO Mortgage Loans) in the form
of payments from Mortgagors, Insurance Proceeds, Condemnation Proceeds and
Liquidation Proceeds, shall be applied by the Master Servicer among such REMIC
Mortgage Loans in accordance with the express provisions of the related loan
documents and, in the absence of such express provisions, on a pro rata basis in
accordance with the respective amounts then "due and owing" as to each such
REMIC Mortgage Loan. All amounts collected in respect of any REMIC Mortgage Loan
(whether or not such REMIC Mortgage Loan is a Cross-Collateralized Mortgage
Loan) other than an REO Mortgage Loan, in the form of payments from Mortgagors,
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, Repurchase
Proceeds or payments of Substitution Shortfall Amounts shall be applied to
amounts due and owing under the related Mortgage Note and Mortgage (including,
without limitation, for principal and accrued and unpaid interest) in accordance
with the express provisions of the related Mortgage Note and Mortgage and, in
the absence of, or to the extent not covered by, such express provisions, shall
be applied for purposes of this Agreement: first, as a recovery of any related
unreimbursed Servicing Advances and, if applicable, unpaid Liquidation Expenses;
second, as a recovery of accrued and unpaid interest at the related Mortgage
Rate on such REMIC Mortgage Loan to but not including, as appropriate, the date
of receipt or, in the case of a full Monthly Payment from any Mortgagor, the
related Due Date; third, as a recovery of principal of such REMIC Mortgage Loan
then due and owing, including, without limitation, by reason of acceleration of
the REMIC Mortgage Loan following a default thereunder or exercise of a Call
Option (or, if a Liquidation Event has occurred in respect of such REMIC
Mortgage Loan, as a recovery of principal to the extent of its entire remaining
unpaid principal balance); fourth, as a recovery of amounts to be currently
applied to the payment of, or escrowed for the future payment of, real estate
taxes, assessments, insurance premiums, ground rents (if applicable) and similar
items; fifth, as a recovery of Reserve Funds to the extent then required to be
held in escrow; sixth, as a recovery of any Prepayment Premium then due and
owing under such REMIC Mortgage Loan; seventh, as a recovery of any Penalty
Charges then due and owing under such REMIC Mortgage Loan; eighth, as a recovery
of any assumption fees and modification fees then due and owing under such REMIC
Mortgage Loan; ninth, as a recovery of any other amounts then due and owing
under such REMIC Mortgage Loan; and tenth, as a recovery of any remaining
principal of such REMIC Mortgage Loan to the extent of its entire remaining
unpaid principal balance.
-46-
<PAGE>
(b) Collections in respect of each REO Property (exclusive of amounts to be
applied to the payment of the costs of operating, managing, maintaining and
disposing of such REO Property) shall be treated: first, as a recovery of any
related unreimbursed Servicing Advances; second, as a recovery of accrued and
unpaid interest on the related REO Mortgage Loan at the related Mortgage Rate to
but not including the Due Date in the Collection Period of receipt; third, as a
recovery of principal of the related REO Mortgage Loan to the extent of its
entire unpaid principal balance; and fourth, as a recovery of any other amounts
deemed to be due and owing in respect of the related REO Mortgage Loan.
(c) The foregoing applications of amounts received in respect of any REMIC
Mortgage Loan or REO Property shall be determined by the Master Servicer in its
reasonable and good faith judgment.
Section 1.3 Disqualification
Notwithstanding any other provision of this Agreement, the disqualification
of any party to this Agreement in one particular capacity (e.g., the Seller as
Special Servicer) shall not disqualify such party or any affiliate of such party
from acting in any other capacity hereunder (e.g., CMBS Holdings, L.L.C. as
Operating Advisor). Any reference herein to an entity which has multiple
capacities shall be to such entity in such specific capacity unless the context
otherwise require.
Section 1.4 Interpretation.
(a) As used herein and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in Section
1.1 shall have the respective meanings given to them under generally accepted
accounting principles or regulatory accounting principles, as applicable.
(b) The words "hereof", "herein" and "hereunder", and words of similar
import, when used in this Agreement, shall refer to this agreement as a whole
and not to any particular provision of this Agreement, and references to
Sections, Schedules and Exhibits contained in this Agreement are references to
Sections, Schedules and Exhibits in or to this Agreement unless otherwise
specified.
(c) Whenever a term is defined herein, the definition ascribed to such term
shall be equally applicable to both the singular and plural forms of such term
and to masculine, feminine and neuter genders of such term.
(d) This Agreement is the result of arm's-length negotiations between the
parties and has been reviewed by each party hereto and its counsel. Each party
agrees that any ambiguity in this Agreement shall not be interpreted against the
party drafting the particular clause which is in question.
-47-
<PAGE>
ARTICLE II
DECLARATION OF TRUST;
ISSUANCES OF CERTIFICATES
Section 2.1 Conveyance of Mortgage Loans.
(a) The Depositor, concurrently with the execution and delivery hereof,
does hereby assign to the Trustee without recourse for the benefit of the
Certificateholders (as their interests may appear) all the right, title and
interest of the Depositor, including any security interest therein for the
benefit of the Depositor, in, to and under (i) the Mortgage Loans identified on
the Mortgage Loan Schedules, (ii) Sections 2, 4 and 6 of the Mortgage Loan
Purchase Agreement, and (iii) all other assets included or to be included in the
Trust Fund or REMIC I. Such assignment includes all interest and principal
received or receivable on or with respect to the Mortgage Loans (other than
payments of principal and interest due and payable on the Mortgage Loans on or
before the Cut-off Date (or, in the case of the Glen Pointe Centre West Loan, on
or before December 10, 1997)). The transfer of the Mortgage Loans and the
related rights and property accomplished hereby is absolute and, notwithstanding
anything contained in Section 13.12, is intended by the parties to constitute a
sale.
(b) In connection with the Depositor's assignment pursuant to Section
2.1(a) above, the Depositor shall direct, and hereby represents and warrants
that it has directed, the Seller pursuant to the Mortgage Loan Purchase
Agreement to deliver to and deposit with, or cause to be delivered to and
deposited with, the Trustee or a Custodian appointed thereby (with a copy to the
Master Servicer), on or before the Closing Date, the Mortgage File for each
Mortgage Loan so assigned. If the Seller cannot so deliver, or cause to be
delivered, the original or a copy of any of the documents and/or instruments
referred to in clauses (ii), (iv), (viii), (xi)(A) and (xii) of the definition
of "Mortgage File", with (if appropriate) evidence of recording or filing, as
the case may be, thereon, solely because of a delay caused by the public
recording or filing office where such document or instrument has been delivered
for recordation or filing, the delivery requirements of this Section 2.1(b)
shall be deemed to have been satisfied as to such missing item, and such missing
item shall be deemed to have been included in the related Mortgage File,
provided that such Seller has delivered to the Trustee on or before the Closing
Date a copy of such document or instrument (without evidence of recording or
filing thereon, but certified (which certificate may relate to multiple
documents and/or instruments) by such Seller to be a true and complete copy of
the original thereof submitted for recording or filing, as the case may be), and
the Seller shall deliver to or at the direction of the Trustee, promptly
following the receipt thereof, the original of such missing document or
instrument (or a copy thereof) with (if appropriate) evidence of recording or
filing, as the case may be, thereon. In addition, notwithstanding anything to
the contrary contained herein, if there exists with respect to any group of
related Cross-Collateralized Mortgage Loans only one original of any document
referred to in the definition of "Mortgage File" covering all the Mortgage Loans
in such group, then the inclusion of the original of such document in the
Mortgage File for any of the Mortgage Loans in such group shall be deemed an
inclusion of such original in the Mortgage File for each such Mortgage Loan.
None of the Trustee, any Custodian, the Master Servicer or the Special Servicer
shall be liable for any failure by the Seller or the Depositor to comply with
the document delivery requirements of the Mortgage Loan Purchase Agreement and
this Section 2.1(b).
-48-
<PAGE>
If any of the endorsements referred to in clause (i) of the definition of
"Mortgage File", or any of the assignments referred to in clauses (iii), (v),
(vii), (x) and (xi)(B) of the definition of "Mortgage File", are delivered to
the Trustee in blank, the Trustee shall, at the expense of the Seller, be
responsible for completing the related endorsement or assignment in the name of
the Trustee (in such capacity).
(c) The Trustee shall, as to each Mortgage Loan, at the expense of the
Seller, promptly (and in any event within 45 days following the receipt thereof)
deliver to a designee of the Seller for purposes of its being recorded or filed,
as the case may be, in the appropriate public office for real property records
or UCC financing statements, as appropriate, each assignment to the Trustee
referred to in clauses (iii), (v), (vii) and (xi)(B) of the definition of
"Mortgage File". Each such assignment shall reflect that it should be returned
by the public recording office to the Trustee following recording or filing (at
which time the Trustee, at the expense of the Seller, shall deliver a copy
thereof to the Master Servicer); provided that in those instances where the
public recording office retains the original Assignment of Mortgage or
assignment of Assignment of Leases, the Trustee shall request such designee to
obtain therefrom for the Trustee and the Master Servicer at the expense of the
Seller a certified copy of the recorded original. If any such document or
instrument is lost or returned unrecorded or unfiled, as the case may be,
because of a defect therein, the Trustee shall direct the Seller pursuant to the
applicable Mortgage Loan Purchase Agreement promptly to prepare or cause to be
prepared a substitute therefor or cure such defect, as the case may be, and
thereafter the Trustee shall upon receipt thereof deliver the same to a designee
of the Seller for purposes of its being recorded or filed, as appropriate.
(d) All documents and records in the possession of the Depositor or the
Seller that relate to the Mortgage Loans and that are not required to be a part
of a Mortgage File in accordance with the definition thereof shall be delivered
to the Master Servicer on or before the Closing Date and shall be held by the
Master Servicer on behalf of the Trustee in trust for the benefit of the
Certificateholders.
(e) In connection with the Depositor's assignment pursuant to Section
2.1(a) above, the Depositor shall deliver to the Trustee on or before the
Closing Date a copy of a fully executed counterpart of the Mortgage Loan
Purchase Agreement, as in full force and effect on the Closing Date.
(f) Notwithstanding any other provision of this Agreement or the Mortgage
Loan Purchase Agreement, the Seller, the Depositor and the Trustee agree that
for federal income tax purposes, the Seller shall be treated as exchanging all
property included in REMIC I for all REMIC I Interests, and in turn exchanging
all REMIC I Regular Interests for all REMIC II Interests, and in turn exchanging
all REMIC II Regular Interests for all REMIC III Interests, and in turn selling
for cash the Class A-1A, A-1B, A-2, B, C and D Certificates, all pursuant to
Treasury Regulation Section 1.860F-2.
Section 2.2 Acceptance by Trustee. The Trustee will hold (i) the documents
constituting a part of the Mortgage Files delivered to it, (ii) the REMIC I
assets, (iii) the REMIC I Regular Interests, (iv) the REMIC II Regular
Interests, (v) the Non-REMIC Assets, and (vi) the Non-REMIC Fees, in each case
as delivered to it, in trust for the use and benefit of all present and future
Certificateholders (as their interests may appear) as provided in this
Agreement.
-49-
<PAGE>
Upon execution and delivery of this Agreement in respect of the Initial
Certification, and within 45 days after the execution and delivery of this
Agreement in respect of the Final Certification, the Trustee shall examine the
Mortgage Files in its possession, and shall deliver to the Depositor, the Master
Servicer, the Special Servicer and the Seller a certification (the "Initial
Certification" and the "Final Certification", respectively, in the respective
forms set forth as Exhibit B-1 and Exhibit B-2 hereto), (i) in the case of the
Initial Certification, as to each Mortgage Loan listed in the Mortgage Loan
Schedule, except as may be specified in the schedule of exceptions to Mortgage
File delivery attached thereto, to the effect that (A) all documents specified
in clause (i) of the definition of "Mortgage File" are in its possession, (B)
such documents have been reviewed by it and have not been materially mutilated,
damaged, defaced, torn or otherwise physically altered, and such documents
relate to such Mortgage Loan, (C) based on its examination and only as to the
foregoing documents, the loan number and the name of the Mortgagor set forth in
the Mortgage Loan Schedule respecting such Mortgage Loan accurately reflects the
information contained in such documents, and (D) each Mortgage Note has been
endorsed as provided in clause (i) of the definition of Mortgage File; and (ii)
in the case of the Final Certification, as to each Mortgage Loan listed in the
Mortgage Loan Schedule, except as may be specified in the schedule of exceptions
to Mortgage File delivery attached thereto, to the effect that (W) all documents
specified in clauses (i), (ii), (iii), (ix), (xi), (xii) (to the extent it
relates to the foregoing) and (xiii) (in the case of the Mortgage Loans secured
by the Koll Center Loan, the UCLA Loan, the Charles Hotel Loan, the Crown Plaza
Loan and the Crystal Square Loan) of the definition of "Mortgage File" are in
its possession, (X) all documents delivered to it or a Custodian as part of the
related Mortgage File have been reviewed by it or such Custodian and have not
been materially mutilated, damaged, defaced, torn or otherwise physically
altered, and such documents relate to such Mortgage Loan, (Y) based on its
examination and only as to the foregoing documents, the loan number, the street
address of the Mortgaged Property and the name of the Mortgagor set forth in the
Mortgage Loan Schedule respecting such Mortgage Loan accurately reflects the
information contained in the documents in the Mortgage File and (Z) each
Mortgage Note has been endorsed and each Mortgage has been assigned as provided
in clauses (i) and (iii) of the definition of "Mortgage File." The Trustee shall
deliver to the Depositor, the Master Servicer, the Special Servicer and the
Seller, a copy of such Final Certification. Within 180 days after the Cut-off
Date, the Trustee shall provide a confirmation to the Master Servicer, the
Special Servicer and the Seller of receipt or non-receipt of recorded
Assignments of Mortgage. In giving the certifications required above, the
Trustee shall be under no obligation or duty to inspect, review or examine any
such documents, instruments, securities or other papers to determine whether
they or the signatures thereon are valid, legal, genuine, enforceable, in
recordable form or appropriate for their represented purposes, or that they are
other than what they purport to be on their face, or to determine whether any
Mortgage File should include any assumption agreement, modification agreement,
consolidation agreement, extension agreement, Assignment of Lease, ground lease,
UCC financing statement, guaranty, written assurance or substitution agreement.
The Trustee or its authorized agents shall retain possession and custody of
each Mortgage File in accordance with and subject to the terms and conditions
set forth herein.
Section 2.3 Seller's Repurchase of Mortgage Loans for Document Defects and
Breaches of Representations and Warranties.
(a) If any party hereto discovers that any document constituting a part of
a Mortgage File has not been properly executed, is missing, contains information
that does not conform in any respect with the corresponding information set
forth in the Mortgage Loan Schedule,
-50-
<PAGE>
or does not appear to be regular on its face (each, a "Document Defect"), or
discovers or receives notice of a breach of any representation, warranty or
covenant relating to any Mortgage Loan set forth in the Mortgage Loan Purchase
Agreement that may give rise to a repurchase obligation on the part of the
Seller (a "Breach"), such party shall give prompt written notice to the other
parties hereto. Promptly upon becoming aware of any such Document Defect or
Breach, the Trustee shall request that the Seller, within the time period
provided for in the Mortgage Loan Purchase Agreement, cure such Document Defect
or Breach, as the case may be, in all material respects or repurchase the
affected Mortgage Loan for a cash amount equal to the applicable Purchase Price,
all in accordance with the Mortgage Loan Purchase Agreement; provided, however,
that, in lieu of effecting any such repurchase, the Seller will be permitted in
the case of a REMIC Mortgage Loan to deliver a Qualifying Substitute Mortgage
Loan and to pay a cash amount equal to the applicable Substitution Shortfall
Amount, subject to the terms and conditions of the Mortgage Loan Purchase
Agreement, and this Agreement.
As to any Qualifying Substitute Mortgage Loan or Loans, the Trustee shall
direct the Seller to deliver to the Trustee for such Qualifying Substitute
Mortgage Loan or Loans (with a copy to the Master Servicer), the related
Mortgage File(s) with the related Mortgage Note(s) endorsed as required by
clause (i) of the definition of "Mortgage File". No substitution may be made in
any calendar month after the Determination Date for such month. Monthly Payments
due with respect to Qualifying Substitute Mortgage Loans after the related date
of substitution, and Monthly Payments due with respect to Deleted Mortgage Loans
after the Cut-off Date and on or prior to the related date of substitution,
shall be part of the Trust Fund. Monthly Payments due with respect to Qualifying
Substitute Mortgage Loans on or prior to the related date of substitution, and
Monthly Payments due with respect to Deleted Mortgage Loans after the related
date of substitution, shall not be part of the Trust Fund and will be remitted
by the Master Servicer to the Seller promptly following receipt.
In any month in which the Seller substitutes one or more Qualifying
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer will determine the applicable Substitution Shortfall Amount. The
Trustee shall direct the Seller to deposit cash equal to such amount into the
Collection Account concurrently with the delivery of the Mortgage File(s) for
the Qualifying Substitute Mortgage Loan(s), without any reimbursement thereof.
The Master Servicer shall give written notice to the Trustee of such deposit
promptly following the occurrence thereof.
If the affected Mortgage Loan is to be repurchased, the Trustee shall
designate the Collection Account as the account to which funds in the amount of
the Purchase Price are to be wired. Any such purchase of a Mortgage Loan shall
be on a whole loan, servicing released basis.
The Trustee shall direct the Seller to amend the Mortgage Loan Schedule to
reflect the removal of each Deleted Mortgage Loan and, if applicable the
substitution of the Qualifying Substitute Mortgage Loan(s) and to correct any
immaterial inaccuracies therein which are brought to the Seller's attention by
the Trustee; and, upon such amendment, the Trustee shall deliver or cause the
delivery of such amended Mortgage Loan Schedule to the other parties hereto.
Upon any such substitution, the Qualifying Substitute Mortgage Loan(s) shall be
subject to the terms of this Agreement in all respects.
(b) In connection with any repurchase of or substitution for a Mortgage
Loan contemplated by this Section 2.3, the Trustee, the Master Servicer and the
Special Servicer shall each promptly tender to the Seller, upon delivery to each
of them of a receipt executed by the Seller, all
-51-
<PAGE>
portions of the Mortgage File and other documents pertaining to such Mortgage
Loan possessed by it, and each document that constitutes a part of the Mortgage
File shall be endorsed or assigned to the extent necessary or appropriate to the
Seller, or its designee in the same manner, and pursuant to appropriate forms of
assignment, substantially similar to the manner and forms pursuant to which
documents were previously assigned to the Trustee, but in any event, without
recourse, representation or warranty; provided that such tender by the Trustee
shall be conditioned upon its receipt from the Master Servicer of a Request for
Release.
(c) The Mortgage Loan Purchase Agreement provides the sole remedies
available to the Certificateholders, or the Trustee on behalf of the
Certificateholders, respecting any Document Defect or Breach.
Section 2.4 Representations and Warranties.
The Depositor hereby represents and warrants to the Master Servicer, the
Special Servicer and the Trustee as of the Closing Date that:
(i) The Depositor is a corporation duly organized, validly existing
and in good standing under the laws governing its creation and existence
and has full corporate power and authority to own its property, to carry on
its business as presently conducted, to enter into and perform its
obligations under this Agreement, and to create the trust pursuant hereto;
(ii) The execution and delivery by the Depositor of this Agreement
have been duly authorized by all necessary corporate action on the part of
the Depositor; neither the execution and delivery of this Agreement, nor
the consummation of the transactions herein contemplated, nor compliance
with the provisions hereof, will conflict with or result in a breach of, or
constitute a default under, (A) any of the provisions of any law,
governmental rule, regulation, judgment, decree or order binding on the
Depositor or its properties; (B) the certificate of incorporation or bylaws
of the Depositor; or (C) the terms of any indenture or other agreement or
instrument to which the Depositor is a party or by which it is bound;
neither the Depositor nor any of its Affiliates is a party to, bound by, or
in breach of or violation of any indenture or other agreement or
instrument, or subject to or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it, which materially and
adversely affects or to the best knowledge of the Depositor may in the
future materially and adversely affect (X) the ability of the Depositor to
perform its obligations under this Agreement or (Y) the business,
operations, financial condition, properties or assets of the Depositor;
(iii) The execution, delivery and performance by the Depositor of this
Agreement and the consummation of the transactions contemplated hereby do
not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any
state, federal or other governmental authority or agency, except such as
has been obtained, given, effected or taken prior to the date hereof;
(iv) This Agreement has been duly executed and delivered by the
Depositor and, assuming due authorization, execution and delivery by the
other parties hereto, constitutes a valid and binding obligation of the
Depositor enforceable against it in accordance with its terms;
-52-
<PAGE>
(v) There are no actions, suits or proceedings pending or, to the best
of the Depositor's knowledge, threatened or likely to be asserted against
or affecting the Depositor, before or by any court, administrative agency,
arbitrator or governmental body (A) with respect to any of the transactions
contemplated by this Agreement or (B) with respect to any other matter
which in the judgment of the Depositor will be determined adversely to the
Depositor and will, if determined adversely to the Depositor, materially
and adversely affect it or its business, assets, operations or condition,
financial or otherwise, or adversely affect its ability to perform its
obligations under this Agreement; and
(vi) Immediately prior to the consummation of the transactions
contemplated in this Agreement, the Depositor had good title to and was the
sole owner of each Mortgage Loan free and clear of any and all adverse
claims, charges or security interests.
Section 2.5 Conveyance of Interests. Concurrently with the execution and
delivery of this Agreement and the conveyance of the REMIC I assets, the
Non-REMIC Assets, and the Non-REMIC Fees to the Trust Fund in exchange for the
REMIC I Interests and the Non-REMIC Trust Fund Interests, the Depositor does
hereby transfer, assign, set over, deposit with and otherwise convey to the
Trustee, without recourse, in trust, all the right, title and interest of the
Depositor in and to (i) the REMIC I Regular Interests in exchange for the REMIC
II Interests and (ii) the REMIC II Regular Interests in exchange for the REMIC
III Certificates.
Section 2.6 Grantor Trust. There is hereby established a trust which shall
be part of the Trust Fund and which shall hold the Non-REMIC Assets and the
Non-REMIC Fees (collectively, the "Grantor Trust Assets"). All amounts received
in respect of the Grantor Trust Assets shall be deposited in the Non-REMIC Trust
Collection Subaccount and held by the Master Servicer or the Trustee, as the
case may be, in the Non-REMIC Trust Collection Subaccount and the Non-REMIC
Trust Distribution Subaccount and amounts on deposit in the Non-REMIC Trust
Distribution Subaccount shall be distributed from the Non-REMIC Trust
Distribution Subaccount to the Holders of the Class V and Class W Certificates
on each Distribution Date in accordance with Section 6.4(e) and 6.4(f),
respectively, hereof. Funds on deposit in the Non-REMIC Trust Collection
Subaccount shall be invested by the Master Servicer in Eligible Investments
pursuant to Section 5.1(e). All tax reporting obligations with respect to the
Grantor Trust shall be performed by the Trustee.
ARTICLE III
THE CERTIFICATES
Section 3.1 The Certificates.
(a) The Certificates shall be in substantially the forms set forth in
Exhibits A-1 through A-17 hereto, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Agreement or as may in the reasonable judgment of the Trustee or the Depositor
be necessary, appropriate or convenient to comply, or facilitate compliance,
with applicable laws, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities
-53-
<PAGE>
exchange on which any of the Certificates may be listed, or as may, consistently
herewith, be determined by the officers executing such Certificates, as
evidenced by their execution thereof.
The Definitive Certificates shall be printed, typewritten, lithographed or
engraved or produced by any combination of these methods or may be produced in
any other manner permitted by the rules of any securities exchange on which any
of the Certificates may be listed, all as determined by the officers executing
such Certificates, as evidenced by their execution thereof.
(b) The REMIC III Regular Certificates will be issued in minimum
denominations of $50,000 (or, in the case of the Class A Certificates, $5,000)
in initial Certificate Principal Balance or Certificate Notional Amount, as
applicable, and in integral multiples of $1 in excess thereof. The Residual
Certificates and Class W and Class V Certificates will be issued in minimum
Percentage Interests of not less than 10%. The Residual Certificates, the Class
V Certificates and the Class W Certificates will be issued without any
Certificate Principal Balance or Certificate Notional Amount and without any
Pass-Through Rate.
(c) Each Certificate shall, on original issue, be authenticated by the
Trustee or the Authenticating Agent upon the order of the Depositor. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein, executed by an
authorized officer of the Trustee or the Authenticating Agent, if any, by manual
signature, and such certification upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. At any time and from time to time after the execution
and delivery of this Agreement, the Depositor may deliver Certificates to the
Trustee for authentication, and the Trustee or the Authenticating Agent shall
authenticate and deliver such Certificates as in this Agreement provided and not
otherwise. In the event that additional Certificates need to be prepared at any
time subsequent to the Closing Date, the Depositor shall prepare, or cause to be
prepared, and deliver, or cause to be delivered, at the Depositor's expense, any
such additional Certificates. With respect to the REMIC III Regular
Certificates, on the Closing Date the Trustee or the Authenticating Agent upon
the order of the Depositor shall authenticate Book-Entry Certificates that are
issued to a Clearing Agency or its nominee as provided in Section 3.6 against
payment of the purchase price thereof.
Section 3.2 Registration. The Trustee initially shall be the registrar in
respect of the Certificates who shall maintain books for the registration and
for the transfer of Certificates (the "Certificate Register"). The Certificate
Registrar may resign or be discharged or removed by the Trustee or the
Certificateholders, and a new successor may be appointed, in accordance with the
procedures and requirements set forth in Sections 7.6 and 7.7 hereof with
respect to the resignation, discharge or removal of the Trustee and the
appointment of a successor Trustee. The Certificate Registrar may appoint, by a
written instrument delivered to the Holders and the Trustee, any trust company
to act as co-registrar under such conditions as the Certificate Registrar may
prescribe; provided that the Certificate Registrar shall not be relieved of any
of its duties or responsibilities hereunder by reason of such appointment.
Section 3.3 Transfer and Exchange of Certificates.
(a) A Certificate may be transferred by the Holder thereof, subject to the
restrictions set forth below, only upon presentation and surrender of such
Certificate at the Corporate
-54-
<PAGE>
Trust Office (or the New York Presenting Office, if any) duly endorsed or
accompanied by a written instrument of transfer duly executed by such Holder or
such Holder's duly authorized attorney in such form as shall be satisfactory to
the Certificate Registrar. Upon the transfer of any Certificate in accordance
with the preceding sentence, the Trustee shall execute, and the Trustee or any
Authenticating Agent shall authenticate and deliver to the transferee, one or
more new Certificates of the same Class, in authorized denominations, evidencing
in the aggregate the same aggregate Certificate Principal Balance, Certificate
Notional Amount or Percentage Interest, as the case may be, as the Certificate
being transferred. No service charge shall be made to a Certificateholder for
any registration of transfer of Certificates, but the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any registration or transfer of Certificates.
The Trustee may decline to accept any request for a registration of transfer of
any Certificate during the period beginning five calendar days prior to any
Distribution Date.
(b) A Certificate may be exchanged by the Holder thereof for any number of
new Certificates of the same Class, in authorized denominations, representing in
the aggregate the same aggregate Certificate Principal Balance, Certificate
Notional Amount or Percentage Interest, as the case may be, as the Certificate
surrendered, upon surrender of the Certificate to be exchanged at the Corporate
Trust Office (or New York Presenting Office, if any) duly endorsed or
accompanied by a written instrument of exchange duly executed by such Holder or
such Holder's duly authorized attorney in such form as is satisfactory to the
Certificate Registrar. Certificates delivered upon any such exchange will
evidence the same obligations, and will be entitled to the same rights and
privileges, as the Certificates surrendered. No service charge shall be made to
a Certificateholder for any exchange of Certificates, but the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any exchange of
Certificates. Whenever any Certificates are so surrendered for exchange, the
Trustee shall execute and the Trustee or the Authenticating Agent shall
authenticate, date and deliver the Certificates which the Certificateholder
making the exchange is entitled to receive.
(c) No transfer, sale, pledge or other disposition of any Non-Registered
Certificate or interest therein shall be made unless that transfer, sale, pledge
or other disposition is exempt from the registration and/or qualification
requirements of the Securities Act and any applicable state securities laws, or
is otherwise made in accordance with the Securities Act and such state
securities laws. If a transfer of any Non-Registered Certificate held as a
Definitive Certificate is to be made without registration under the Securities
Act (other than in connection with the initial issuance of the Certificates or a
transfer of such Non-Registered Certificate by the Depositor or one of its
Affiliates), then the Certificate Registrar shall refuse to register such
transfer unless it receives (and upon receipt, may conclusively rely upon)
either: (i) a certificate from the Certificateholder desiring to effect such
transfer substantially in the form attached as Exhibit D-1 hereto and a
certificate from such Certificateholder's prospective Transferee substantially
in the form attached either as Exhibit D-2A hereto or as Exhibit D-2B hereto; or
(ii) an Opinion of Counsel satisfactory to the Trustee to the effect that such
transfer may be made without registration under the Securities Act (which
Opinion of Counsel shall not be an expense of the Trust Fund or of the
Depositor, the Master Servicer, the Special Servicer, the Trustee or the
Certificate Registrar in their respective capacities as such), together with the
written certification(s) as to the facts surrounding such transfer from the
Certificateholder desiring to effect such transfer and/or such
Certificateholder's prospective Transferee on which such Opinion of Counsel is
based. If a transfer of any interest in a NonRegistered Certificate that
constitutes a Book-Entry Certificate is to be made without registration under
the Securities Act (other than in connection with the initial issuance of the
Certificates or a
-55-
<PAGE>
transfer of any interest in such Non-Registered Certificate by the Depositor or
any of its Affiliates), then the Certificate Owner desiring to effect such
transfer shall be required to obtain either (i) a certificate from such
Certificate Owner's prospective Transferee substantially in the form attached as
Exhibit D-3A hereto or as Exhibit D-3B hereto, or (ii) an Opinion of Counsel to
the effect that such transfer may be made without registration under the
Securities Act. None of the Depositor, the Trustee or the Certificate Registrar
is obligated to register or qualify any Class of Non-Registered Certificates
under the Securities Act or any other securities law or to take any action not
otherwise required under this Agreement to permit the transfer of any
Non-Registered Certificate or interest therein without registration or
qualification. Any Certificateholder or Certificate Owner desiring to effect a
transfer of Non-Registered Certificates or interests therein shall, and does
hereby agree to, indemnify, the Depositor, the Underwriter, the Trustee, the
Master Servicer, the Special Servicer and the Certificate Registrar against any
liability that may result if the transfer is not exempt from such registration
or qualification or is not made in accordance with such federal and state laws.
(d) No transfer of a Class V, Class W, Subordinate or Residual Certificate
or any interest therein shall be made (A) to any employee benefit plan or other
retirement arrangement, including individual retirement accounts and annuities,
Keogh plans and collective investment funds and separate accounts in which such
plans, accounts or arrangements are invested, including, without limitation,
insurance company general accounts, that is subject to ERISA or the Code (each,
a "Plan"), or (B) to any Person who is directly or indirectly purchasing such
Certificate or interest therein on behalf of, as named fiduciary of, as trustee
of, or with assets of a Plan, unless: (i) in the case of a Subordinate
Certificate that constitutes a Book-Entry Certificate, the purchase and holding
of such Certificate or interest therein is exempt from the prohibited
transaction provisions of Section 406 of ERISA and Section 4975 of the Code
under Sections I and III of Prohibited Transaction Class Exemption 95-60; or
(ii) in the case of a Subordinate or Residual Certificate held as a Definitive
Certificate, the prospective Transferee provides the Certificate Registrar with
a certification of facts and an Opinion of Counsel which establish to the
satisfaction of the Trustee that such transfer will not result in a violation of
Section 406 of ERISA or Section 4975 of the Code or result in the imposition of
an excise tax under Section 4975 of the Code or subject the Depositor, the
Trustee, the Master Servicer or the Special Servicer to any obligation in
addition to those undertaken in this Agreement. Each Person who acquires any
Subordinate or Residual Certificate or interest therein (unless it shall have
acquired such Certificate or interest therein from the Depositor or an Affiliate
thereof or unless it shall have delivered to the Certificate Registrar the
certification of facts and Opinion of Counsel referred to in clause (ii) of the
preceding sentence) shall be required to deliver to the Certificate Registrar
(or, in the case of an interest in a Subordinate Certificate that constitutes a
Book-Entry Certificate, to the Certificate Owner that is transferring such
interest) a certification to the effect that: (i) it is neither a Plan nor any
Person who is directly or indirectly purchasing such Certificate or interest
therein on behalf of, as named fiduciary of, as trustee of, or with assets of a
Plan; or (ii) that the purchase and holding of such Certificate or interest
therein by such person is exempt from the prohibited transaction provisions of
Section 406 of ERISA and Section 4975 of the Code under Sections I and III of
Prohibited Transaction Class Exemption 95-60.
(e) (i) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably authorized the Trustee under clause (ii)(A) below to deliver
payments to a Person other than such Person and to have irrevocably authorized
the Trustee under clause (ii)(B) below to negotiate the terms of any mandatory
sale and to execute all instruments of Transfer and to do all other things
necessary in connection with
-56-
<PAGE>
any such sale. The rights of each Person acquiring any Ownership Interest in a
Residual Certificate are expressly subject to the following provisions:
(A) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and a United States
Person and shall promptly notify the Trustee of any change or impending
change in its status as a Permitted Transferee.
(B) In connection with any proposed Transfer of any Ownership Interest
in a Residual Certificate, the Trustee shall require delivery to it, and no
Transfer of any Residual Certificate shall be registered until the Trustee
receives, an affidavit and agreement substantially in the form attached
hereto as Exhibit E-1 (a "Transfer Affidavit and Agreement") from the
proposed Transferee, in form and substance satisfactory to the Trustee,
representing and warranting, among other things, that such Transferee is a
Permitted Transferee, that it is not acquiring its Ownership Interest in
the Residual Certificate that is the subject of the proposed Transfer as a
nominee, trustee or agent for any Person that is not a Permitted
Transferee, that for so long as it retains its Ownership Interest in a
Residual Certificate, it will endeavor to remain a Permitted Transferee,
that it is a United States Person, and that it has reviewed the provisions
of this Section 3.3(e) and agrees to be bound by them.
(C) Notwithstanding the delivery of a Transfer Affidavit and Agreement
by a proposed Transferee under clause (B) above, if the Trustee has actual
knowledge that the proposed Transferee is not a Permitted Transferee or is
not a United States Person, no Transfer of an Ownership Interest in a
Residual Certificate to such proposed Transferee shall be effected.
(D) Each Person holding or acquiring an Ownership Interest in a
Residual Certificate shall agree (1) to require a Transfer Affidavit and
Agreement from any prospective Transferee to whom such Person attempts to
transfer its Ownership Interest in such Residual Certificate and (2) not to
transfer its Ownership Interest in such Residual Certificate unless it
provides to the Trustee a certificate substantially in the form attached
hereto as Exhibit E-2 stating that, among other things, it has no actual
knowledge that such prospective Transferee is not a Permitted Transferee or
is not a United States Person.
(E) Each Person holding or acquiring an Ownership Interest in a
Residual Certificate that is a "pass-through interest holder" within the
meaning of temporary Treasury regulation Section 1.67-3T(a)(2)(i)(A) or is
holding an Ownership Interest in a Residual Certificate on behalf of a
"pass-through interest holder", by purchasing an Ownership Interest in such
Certificate, agrees to give the Trustee written notice of its status as
such immediately upon holding acquiring such Ownership Interest in a
Residual Certificate.
-57-
<PAGE>
(ii) (A) If any purported Transferee shall become a Holder of a Residual
Certificate in violation of the provisions of this Section 3.3(e) or if any
Holder of a Residual Certificate shall lose its status as a Permitted Transferee
or a United States Person, then the last preceding Holder of such Residual
Certificate that was in compliance with the provisions of this Section 3.3(e)
shall be restored, to the extent permitted by law, to all rights as Holder
thereof retroactive to the date of registration of such Transfer of such
Residual Certificate. None of the Trustee, the Master Servicer, the Special
Servicer or the Certificate Registrar shall be under any liability to any Person
for any registration of Transfer of a Residual Certificate that is in fact not
permitted by this Section 3.3(e) or for making any payments due on such
Certificate to the Holder thereof or for taking any other action with respect to
such Holder under the provisions of this Agreement.
(B) If any purported Transferee shall become a Holder of a Residual
Certificate in violation of the restrictions in this Section 3.3(e), or if
any Holder of a Residual Certificate shall lose its status as a Permitted
Transferee or a United States Person, and to the extent that the
retroactive restoration of the rights of the prior Holder of such Residual
Certificate as described in clause (ii)(A) above shall be invalid, illegal
or unenforceable, then the Trustee shall have the right, without notice to
the Holder or any prior Holder of such Residual Certificate, but not the
obligation, to sell such Residual Certificate to a purchaser selected by
the Trustee on such terms as the Trustee may choose. Such noncomplying
Holder shall promptly endorse and deliver such Residual Certificate in
accordance with the instructions of the Trustee. Such purchaser may be the
Trustee itself or any Affiliate of the Trustee. The proceeds of such sale,
net of the commissions (which may include commissions payable to the
Trustee or its Affiliates), expenses and taxes due, if any, will be
remitted by the Trustee to such noncomplying Holder. The terms and
conditions of any sale under this clause (ii)(B) shall be determined in the
sole discretion of the Trustee, and the Trustee shall not be liable to any
Person having an Ownership Interest in a Residual Certificate as a result
of its exercise of such discretion.
(iii) The Trustee shall make available to the Internal Revenue Service and
those Persons specified by the REMIC Provisions, all information necessary to
compute any tax imposed (A) as a result of the Transfer of an Ownership Interest
in a Residual Certificate to any Person who is not a Permitted Transferee,
including the information described in Treasury regulations sections
1.860D-1(b)(5) and 1.860E-2(a)(5) with respect to the "excess inclusions" of
such Residual Certificate and (B) as a result of any regulated investment
company, real estate investment trust, common trust fund, partnership, trust,
estate or organization described in Section 1381 of the Code that holds an
Ownership Interest in a Residual Certificate having as among its record holders
at any time any Person which is not a Permitted Transferee. The Person holding
such Ownership Interest shall be responsible for the reasonable compensation of
the Trustee for providing such information.
(iv) The provisions of this Section 3.3(e) set forth prior to this
subsection (iv) may be modified, added to or eliminated, provided that there
shall have been delivered to the Trustee and the Depositor the following:
(A) written notification from each Rating Agency to the effect that
the modification of, addition to or elimination of such provisions will not
cause such Rating Agency to qualify, downgrade or withdraw its then current
rating of any Class of Certificates; and
-58-
<PAGE>
(B) an Opinion of Counsel, in form and substance satisfactory to the
Trustee and the Depositor, to the effect that such modification of,
addition to or elimination of such provisions will not cause any of REMIC
I, REMIC II or REMIC III to (x) cease to qualify as a REMIC or (y) be
subject to an entity-level tax caused by the Transfer of any Residual
Certificate to a Person which is not a Permitted Transferee, or cause a
Person other than the prospective Transferee to be subject to a tax caused
by the Transfer of a Residual Certificate to a Person which is not a
Permitted Transferee.
(f) The Trustee shall have no liability to the Trust arising from a
transfer of any Certificate in reliance upon a certification, ruling or Opinion
of Counsel described in this Section 3.3; provided, however, that the Trustee
shall not register the transfer of a Residual Certificate if it has actual
knowledge that the proposed transferee does not meet the qualifications of a
permitted Holder of a Residual Certificate as set forth in Section 3.3(e).
Neither the Trustee nor the Certificate Registrar shall have any obligation or
duty to monitor, determine or inquire as to compliance with any restriction on
transfer or exchange of Certificates or any interest therein imposed under this
Article III or under applicable law other than to require delivery of the
certifications and/or opinions described in this Article III; provided, however,
that the Trustee shall not register the transfer of a Residual Certificate if it
has actual knowledge that the proposed transferee does not meet the
qualifications of a permitted Holder of a Residual Certificate as set forth in
Section 3.3(e). The Trustee and the Certificate Registrar shall have no
liability for transfers (including without limitation transfers made through the
book-entry facilities of the Depository or between or among Participants or
Certificate Owners) made in violation of applicable restrictions, provided that
the Trustee and Certificate Registrar have satisfied their respective duties
expressly set forth in Sections 3.3(c), 3.3(d) and 3.3(e).
(g) All Certificates surrendered for transfer and exchange shall be
physically canceled by the Certificate Registrar, and the Certificate Registrar
shall hold such canceled Certificates in accordance with its standard
procedures.
(h) The Certificate Registrar shall provide notice to the Master Servicer,
the Special Servicer and the Depositor of each transfer of a Certificate and,
upon written request, provide each such Person with an updated copy of the
Certificate Register within a reasonable period of time following receipt of
such request.
(i) Unless and until it is exchanged in whole for the individual
Certificates represented thereby, a Global Certificate representing all of the
Certificates of a Class may not be transferred, except as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Clearing Agency or a nominee of such successor
Clearing Agency, and no such transfer to any such other Person may be
registered; provided that this subsection (i) shall not prohibit any transfer of
a Certificate of a Class that is issued in exchange for a Global Certificate of
the same Class pursuant to Section 3.8 below. Nothing in this subsection (i)
shall prohibit or render ineffective any transfer of a beneficial interest in a
Global Certificate effected in accordance with the other provisions of this
Section 3.3.
-59-
<PAGE>
Section 3.4 Mutilated, Destroyed, Lost or Stolen Certificates. If (a) any
mutilated Certificate is surrendered to the Trustee, or the Trustee receives
evidence to its satisfaction of the destruction, loss or theft of any
Certificate and (b) except in the case of a mutilated Certificate so
surrendered, there is delivered to the Trustee such security or indemnity as may
be required by it to save it harmless, then, in the absence of notice to the
Trustee that such Certificate has been acquired by a bona fide purchaser, the
Trustee shall execute, authenticate and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
like tenor and interest in the Trust. In connection with the issuance of any new
Certificate under this Section 3.4, the Trustee may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee) connected therewith. Any replacement Certificate issued pursuant to
this Section 3.4 shall constitute complete and indefeasible evidence of
ownership in the Trust, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.
Section 3.5 Persons Deemed Owners. Prior to presentation of a Certificate
for registration of transfer, the Depositor, the Master Servicer, the Special
Servicer, the Trustee, the Operating Adviser and any agent of the Depositor, the
Master Servicer, the Special Servicer, the Trustee or the Operating Adviser may
treat the Person in whose name any Certificate is registered as the owner of
such Certificate for the purpose of receiving distributions as provided in this
Agreement and for all other purposes whatsoever, and neither the Master
Servicer, the Special Servicer, the Trustee, the Operating Adviser nor any agent
of the Master Servicer, the Special Servicer, the Trustee or the Operating
Adviser shall be affected by any notice to the contrary.
Section 3.6 Book-Entry Certificates.
(a) Notwithstanding the foregoing, each Class of REMIC III Regular
Certificates, upon original issuance, shall be issued in the form of one or more
physical certificates (collectively, as to any Class of Book-Entry Certificates,
a "Global Certificate") representing such Class, to be delivered to the Trustee,
as custodian for The Depository Trust Company (the "Depository"), the initial
Clearing Agency, by, or on behalf of, the Depositor. The Global Certificates
shall initially be registered on the Certificate Register in the name of Cede &
Co., the nominee of the Depository, as the initial Clearing Agency, and no
Certificate Owner will receive a Definitive Certificate representing such
Certificate Owners's interest in the Book-Entry Certificates, except as provided
in Section 3.8. Unless and until Definitive Certificates have been issued to the
Certificate Owners pursuant to Section 3.8:
(i) the provisions of this Section 3.6 shall be in full force and
effect with respect to each such Class;
(ii) the Depositor, the Master Servicer, the Certificate Registrar and
the Trustee may deal with the Clearing Agency for all purposes (including
the making of distributions on the Certificates) as the authorized
representative of the Certificate Owners;
(iii) to the extent that the provisions of this Section 3.6 conflict
with any other provisions of this Agreement, the provisions of this Section
3.6 shall control with respect to each such Class; and
-60-
<PAGE>
(iv) the rights of the Certificate Owners of each such Class shall be
exercised only through the Clearing Agency and the applicable Participants
and shall be limited to those established by law and agreements between
such Certificate Owners and the Clearing Agency, the Participants and/or
the Indirect Participants. Pursuant to the Depository Agreement, unless and
until Certificates are issued pursuant to Section 3.8, the initial Clearing
Agency will make book-entry transfers among the Participants and receive
and transmit distributions of principal and interest on the related
Certificates to such Participants.
(b) For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Holders of the Certificates
evidencing a specified percentage of the aggregate unpaid principal amount of
Certificates, such direction or consent may be given by the Clearing Agency at
the direction of Certificate Owners owning Certificates evidencing the requisite
percentage of principal amount of Certificates. The Clearing Agency may take
conflicting actions with respect to the Certificates to the extent that such
actions are taken on behalf of the Certificate Owners.
Section 3.7 Notices to Clearing Agency. Whenever notice or other
communication to the Certificateholders is required under this Agreement, unless
and until Definitive Certificates shall have been issued to the related
Certificateholders pursuant to Section 3.8, the Trustee shall give all such
notices and communications specified herein to be given to Holders of the
Book-Entry Certificates to the Clearing Agency which shall give such notices and
communications to the related Participants in accordance with its applicable
rules, regulations and procedures.
Section 3.8 Definitive Certificates.
(a) Definitive Certificates will be issued to the owners of beneficial
interests in a Class of Book-Entry Certificates or their nominees if (i) the
Depository notifies the Depositor and the Trustee in writing that the Depository
is unwilling or unable to continue as Clearing Agency for the Book-Entry
Certificates and a qualifying successor Clearing Agency is not appointed by the
Depositor within 90 days thereof, or (ii) the Depositor, at its option, elects
to terminate the book-entry system through the Clearing Agency. Upon notice of
the occurrence of either of the events described in the preceding sentence, the
Trustee shall notify all Certificate Owners, through the Clearing Agency, of the
occurrence of the event and of the availability of Definitive Certificates to
such Certificate Owners requesting the same. Upon surrender to the Trustee of
the Book-Entry Certificates by the Clearing Agency, accompanied by registration
instructions from the Clearing Agency for registration, the Trustee shall
execute, authenticate and deliver the Definitive Certificates. Neither the
Depositor nor the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates, all references
herein to obligations imposed upon or to be performed by the Clearing Agency
shall be deemed to be imposed upon and performed by the Trustee, to the extent
applicable with respect to such Definitive Certificates, and the Trustee shall
recognize the Holders of Definitive Certificates as Certificateholders
hereunder.
(b) Distributions of principal and interest on the Definitive Certificates
shall be made by the Trustee directly to holders of Definitive Certificates in
accordance with the procedures set forth in this Agreement.
-61-
<PAGE>
ARTICLE IV
ADVANCES
Section 4.1 P&I Advances by Master Servicer.
(a) On or before 12:00 p.m., New York City time, on each P&I Advance Date,
the Master Servicer shall either (i) deposit into the Distribution Account from
its own funds an amount equal to the aggregate amount of P&I Advances, if any,
to be made in respect of the related Distribution Date, (ii) apply amounts held
in the Collection Account for future distribution to Certificateholders in
subsequent months in discharge of any such obligation to make P&I Advances, or
(iii) make P&I Advances in the form of any combination of (i) and (ii)
aggregating the total amount of P&I Advances to be made; provided that, if Late
Collections (net of related Workout Fees) of the delinquent principal and
interest payments for which P&I Advances are to be made for the related
Distribution Date, are on deposit in the Collection Account and available to
make such Advances, the Master Servicer shall utilize such Late Collections to
make such Advances pursuant to clause (ii) above. Any amounts held in the
Collection Account for future distribution and so used to make P&I Advances
shall be appropriately reflected in the Master Servicer's records and replaced
by the Master Servicer by deposit in the Collection Account on or before the
next succeeding Determination Date (to the extent not previously replaced
through the deposit of Late Collections of the delinquent principal and interest
in respect of which such P&I Advances were made). If, as of 3:00 p.m., New York
City time, on any P&I Advance Date, the Master Servicer shall not have made any
P&I Advance required to be made on such date pursuant to this Section 4.1(a)
(and shall not have delivered to the Trustee the requisite Officer's Certificate
and documentation related to a determination of nonrecoverability of a P&I
Advance), then the Trustee shall provide notice of such failure to a Servicing
Officer of the Master Servicer by facsimile transmission sent to telecopy no.
(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.
(b) The aggregate amount of P&I Advances to be made by the Master Servicer
in respect of the REMIC Mortgage Loans (including without limitation Balloon
Mortgage Loans delinquent as to their respective Balloon Payments and REO
Mortgage Loans) for any Distribution Date shall equal, subject to Section 4.4
below, the aggregate of all Monthly Payments (other than Balloon Payments) and
any Assumed Monthly Payments, in each case net of related Workout Fees payable
hereunder, that were due or deemed due, as the case may be, in respect thereof
on their respective Due Dates during the related Collection Period and that were
not paid by or on behalf of the related Mortgagors or otherwise collected as of
the close of business on the last day of the related Collection Period; provided
that, if an Appraisal Reduction exists with respect to any Required Appraisal
Loan, then, in the event of subsequent delinquencies thereon, the P&I Advance in
respect of such Required Appraisal Loan for the related Distribution Date shall
be reduced to equal the product of (i) the amount of the P&I Advance for such
Required Appraisal Loan for such Distribution Date without regard to this
proviso, multiplied by (ii) a fraction, expressed as a decimal, the numerator of
which is equal to the Stated Principal Balance of such Required Appraisal Loan
immediately prior to such Distribution Date, net of the related Appraisal
Reduction, if any, and the denominator of which is equal to the Stated Principal
Balance of such Required Appraisal Loan immediately prior to such Distribution
Date.
-62-
<PAGE>
(c) If all Holders of Certificates evidencing an interest in the
Controlling Class so elect, such Holders shall have the option, by sending
notice to the Master Servicer on or prior to the Report Date, of limiting the
number or amount of any P&I Advances made in respect of such Certificates if the
results of not making such Advance or Advances will limit or reduce, if at all,
only the Available Distribution Amount with respect to the Certificates held by
such Holders and will not reduce the REMIC III Distribution Amount with respect
to any other Class (other than the Class R Certificates). Any such notice
provided by the Holder of such Certificates shall include a calculation
confirmed in writing by the Trustee (which may be conclusively relied upon by
the Master Servicer) and may be modified or withdrawn at any time (in which case
the Master Servicer will recommence making applicable P&I Advances), and once
withdrawn or modified, may be given or modified again.
Section 4.2 Servicing Advances.
(a) The Master Servicer and the Trustee shall each make Servicing Advances
to the extent provided in this Agreement, except to the extent that the Master
Servicer or the Trustee determines, as applicable, in accordance with Section
4.4 below, that any such Advance would be a Nonrecoverable Advance. Such
determination shall be conclusive and binding on the Trustee and the
Certificateholders.
Subject to the following paragraph, the Master Servicer shall have the
obligation to make any such Servicing Advance that it is requested by the
Special Servicer to make within ten (10) days of the Master Servicer's receipt
of such request.
(b) The Master Servicer shall not be required to make at the Special
Servicer's direction, any Servicing Advance if the Master Servicer determines
(in its good faith and reasonable judgment) that the Servicing Advance which the
Special Servicer is directing the Master Servicer to make although not
characterized by the Special Servicer as a Nonrecoverable Servicing Advance, is
or would be, if made, a Nonrecoverable Servicing Advance as determined by the
Master Servicer. The Master Servicer shall notify the Special Servicer and the
Trustee in writing of such determination. The Special Servicer shall promptly
provide the Master Servicer with any information that comes into its possession
that constitutes evidence that any future Advances made with respect to any
REMIC Mortgage Loan or REO Property would be Nonrecoverable Advances.
Section 4.3 Advances by Trustee.
(a) To the extent that the Master Servicer fails to make a P&I Advance by
10:00 a.m. on the Business Day following the related P&I Advance Date (other
than a P&I Advance that the Master Servicer determines is a Nonrecoverable
Advance), the Trustee shall make such P&I Advance unless the Trustee determines
that such P&I Advance, if made, would be a Nonrecoverable Advance. To the extent
that the Trustee is required hereunder to make P&I Advances, it shall deposit
the amount thereof in the Distribution Account on the relevant Distribution
Date.
(b) To the extent that the Master Servicer fails to make a Servicing
Advance by the date such Servicing Advance is required to be made (other than a
Servicing Advance that the Master Servicer determines is a Nonrecoverable
Advance), and a Responsible Officer of the Trustee receives notice thereof the
Trustee shall send notice to the Master Servicer of its failure to make such
Servicing Advance and if within five Business Days the Master Servicer still has
not made such
-63-
<PAGE>
Servicing Advance, then the Trustee shall make such Servicing Advance, unless
the Trustee determines that such Servicing Advance, if made, would be a
Nonrecoverable Advance.
Section 4.4 Evidence of Nonrecoverability. Notwithstanding anything herein
to the contrary, no Advance shall be required to be made hereunder if such
Advance would, if made, constitute a Nonrecoverable Advance. In addition,
Nonrecoverable Advances shall be reimbursable pursuant to Section 5.2 out of
general collections on the REMIC Mortgage Loans and REO Properties on deposit in
the Collection Account. The determination by the Master Servicer or, if
applicable, the Trustee, that it has made a Nonrecoverable Advance or that any
proposed Advance, if made, would constitute a Nonrecoverable Advance, shall be
evidenced by an Officer's Certificate delivered promptly (and, in any event, in
the case of a proposed P&I Advance to be made by the Master Servicer, no less
than one Business Day prior to the related P&I Advance Date) to the Trustee (or,
if applicable, retained thereby) and the Depositor, setting forth the basis for
such determination, together with (if such determination is prior to the
liquidation of the related REMIC Mortgage Loan or REO Property) a copy of an
Appraisal or internal valuation of the related Mortgaged Property or REO
Property, as the case may be, which shall have been performed within the twelve
months preceding such determination, and further accompanied by any other
information that the Master Servicer may have obtained and that supports such
determination. If such an Appraisal or internal valuation shall not have been
required and performed pursuant to the terms of this Agreement, the Master
Servicer may, subject to its reasonable and good faith determination that such
Appraisal will demonstrate the nonrecoverability of the related Advance, obtain
an Appraisal for such purpose at the expense of the Trust payable out of the
Collection Account. The Trustee shall be entitled to rely on any determination
of nonrecoverability that may have been made by the Master Servicer with respect
to a particular Advance.
Section 4.5 Advance Interest. The Master Servicer and the Trustee shall
each be entitled to receive interest at the Advance Rate in effect from time to
time, accrued on the amount of each Advance made thereby (out of its own funds)
for so long as such Advance is outstanding (or, if any P&I Advance is required
to be made in respect of a delinquent Monthly Payment on any REMIC Mortgage Loan
prior to the end of the grace period for such Monthly Payment, for so long as
such P&I Advance is outstanding following the end of such grace period),
payable: first, out of 50% of Default Interest received on the REMIC Mortgage
Loan (including, without limitation, an REO Mortgage Loan as to which such P&I
Advance was made); and, then, once such Advance has been reimbursed, out of
general collections on the REMIC Mortgage Loans and REO Properties.
Section 4.6 Seller and Special Servicer Advances. With respect to the Days
Inn Surfside Loan and the first Distribution Date, the Seller shall be deemed to
have advanced during the first Collection Period $52,918 in respect of such
Mortgage Loan (the "Deemed Seller Advance"). With respect to the Days Inn
Surfside Loan and any Distribution Date, if the amount received by the Master
Servicer on such Mortgage Loan during the related Collection Period is less than
the Monthly Payment with respect to such Mortgage Loan (which amount will
initially be $52,918) (the "Surfside Required Monthly Payment") for such
Distribution Date, the Master Servicer shall notify the Special Servicer of the
amount of such shortfall and the Special Servicer shall within one Business Day
after the receipt of such notice advance the amount of such shortfall to the
Master Servicer for deposit in the Collection Account as a payment in respect of
the Days Inn Surfside Loan, such advance to be included in the Available
Distribution Amount for such Mortgage Loan for such Distribution Date. If during
any Collection Period the amount received by the Master Servicer in respect of
the Days Inn Surfside Loan exceeds the Surfside Required Monthly Payment, the
Master Servicer shall apply the amount of such excess (only to the extent of
such excess) on or
-64-
<PAGE>
prior to the Master Servicer Remittance Date, on a first in, first out basis,
first, to reimburse the Seller for the Deemed Seller Advance made on the first
Distribution Date, up to the full amount thereof (without interest), second, to
reimburse the Special Servicer the amount advanced pursuant to the preceding
sentence up to the aggregate amount of all such advances (without interest), and
third, to the extent of any remaining additional excess, to the Trustee for
distribution to the Class R Certificateholder in respect of the Class R-I
Interest.
ARTICLE V
COLLECTION ACCOUNT; DISTRIBUTION ACCOUNT;
CERTAIN TRUSTEE REPORTS
Section 5.1 Collection Account.
(a) The Master Servicer shall open, on or prior to the Closing Date, and
shall thereafter maintain a segregated account (the "Collection Account") solely
with respect to this Agreement, entitled "Midland Loan Services, L.P., as Master
Servicer for State Street Bank and Trust Company, as Trustee for the Holders of
Aetna Commercial Mortgage Trust Multiclass Pass-Through Certificates, Series
1997-ALIC, Collection Account." The Collection Account shall be an Eligible
Account and shall consist of two separate subaccounts, the REMIC Collection
Subaccount (the "REMIC Collection Subaccount") and the Non-REMIC Trust
Collection Subaccount (the "Non-REMIC Trust Collection Subaccount").
(b) On the Closing Date, the Master Servicer shall give to the Trustee
written notice of the name and address of the depository institution at which
the Collection Account is maintained and the account number of the Collection
Account. The Master Servicer shall take such actions as are necessary to cause
the depository institution holding the Collection Account to hold such account
in the name of the Master Servicer as provided in Section 5.1(a), subject to the
Master Servicer's right to direct payments and investments and its rights of
withdrawal under this Agreement.
(c) The Master Servicer shall deposit into the Collection Account on the
Business Day following receipt (or, in the case of unscheduled remittances of
principal or interest, on the Business Day following identification of the
proper application of such amounts), the following amounts received or paid by
it, other than in respect of interest and principal on the Mortgage Loans due on
or before the Cut-off Date which shall be remitted to the Seller (provided that
the Master Servicer may retain amounts otherwise payable to the Master Servicer
as provided in Section 5.2(b) rather than deposit them into the Collection
Account) and shall deposit such amounts received in respect of the REMIC
Mortgage Loans to the REMIC Collection Subaccount, and such amounts received in
respect of the Non-REMIC Assets and any Non-REMIC Fees to the Non-REMIC Trust
Collection Subaccount:
(i) Principal: all payments on account of principal, including,
without limitation, the principal component of Monthly Payments, any late
payments in respect thereof and any Principal Prepayments, on the Mortgage
Loans;
-65-
<PAGE>
(ii) Interest: all payments on account of interest, including, without
limitation, the interest component of Monthly Payments, any late payments
in respect thereof and any Default Interest, on the Mortgage Loans;
(iii) Liquidation Proceeds: all Liquidation Proceeds with respect to
the Mortgage Loans, including, without limitation, REO Mortgage Loans;
(iv) Insurance Proceeds and Condemnation Proceeds: all Insurance
Proceeds and Condemnation Proceeds with respect to any Mortgaged Property
or REO Property (other than any such proceeds to be applied to the
restoration or repair of such property or released to the related Mortgagor
in accordance with applicable law, the terms of the related Mortgage Loan
or the Servicing Standard, in which case such proceeds shall be deposited
by the Master Servicer into an Escrow Account or released to the related
Mortgagor, as the case may be, and not deposited in the Collection
Account);
(v) Assumption Fees, Modification Fees, Late Fees and Prepayment
Premiums: All assumption fees, modification fees, Late Fees and Prepayment
Premiums with respect to the Mortgage Loans;
(vi) REO Income: all REO Income (net of any expenses and fees paid
therefrom by the related property manager) in respect of any REO
Properties;
(vii) Investment Losses: any amounts required to be deposited by the
Master Servicer pursuant to Section 5.1(e) in connection with losses
realized on Eligible Investments with respect to funds held in the
Collection Account;
(viii) P&I Advances: that portion of each P&I Advance that represents
the Master Servicing Fee;
(ix) Repurchase Proceeds and Substitution Shortfall Amounts: All
Repurchase Proceeds and payments of Substitution Shortfall Amounts with
respect to the Mortgage Loans, including, without limitation, the REO
Mortgage Loans; and
(x) Other: all other amounts required to be deposited in the
Collection Account pursuant to this Agreement.
If the Master Servicer deposits in the Collection Account or either
sub-account thereof any amount not required to be deposited therein, it may at
any time withdraw such amount from the Collection Account, or from such
sub-account for deposit into the other sub-account, any provision herein to the
contrary notwithstanding.
(d) Upon its receipt of any of the amounts described in clauses (i) through
(vi) of Section 5.1(c) with respect to any Mortgage Loan or REO Property, the
Special Servicer shall promptly, but in no event later than the Business Day
after receipt, remit such amounts to the Master Servicer for deposit into the
Collection Account in accordance with such Section 5.1(c), unless the Special
Servicer determines, consistent with the Servicing Standard, that a particular
item should not be deposited because of a restrictive endorsement or other
appropriate reason. With respect to any such amounts paid by check to the order
of the Special Servicer, the Special Servicer shall endorse such check to the
order of the Master Servicer and shall deliver promptly, but in no event later
than
-66-
<PAGE>
the Business Day after receipt, any such check to the Master Servicer by
overnight courier, unless the Special Servicer determines, consistent with the
Servicing Standard, that a particular item cannot be so endorsed and delivered
because of a restrictive endorsement or other appropriate reason. The Master
Servicer shall promptly inform the Special Servicer of the name, account number,
location and other necessary information concerning the Collection Account in
order to permit the Special Servicer to make deposits therein.
(e) Funds in the Collection Account and the REO Account may be invested
and, if invested, shall be invested by, and at the risk of, the Master Servicer
or (in the case of the REO Account) the Special Servicer in Eligible Investments
selected by the Master Servicer or the Special Servicer, as applicable, which
shall mature, unless payable on demand, not later than the Business Day
immediately preceding the next Master Servicer Remittance Date, and any such
Eligible Investment shall not be sold or disposed of prior to its maturity
unless payable on demand. All such Eligible Investments shall be made in the
name of "State Street Bank and Trust Company, as Trustee for the Holders of the
Aetna Commercial Mortgage Trust Multiclass Pass-Through Certificates, Series
1997-ALIC." None of the Depositor, the Mortgagors, the Trustee or the
Certificateholders shall be liable for any loss incurred on such Eligible
Investments.
An amount equal to all income and gain realized from any such investment
(to the extent not needed to offset losses from other investments) shall be paid
to the Master Servicer or the Special Servicer, as applicable, as additional
servicing compensation and shall be subject to its withdrawal at any time from
time to time. The amount of any losses incurred in respect of any such
investments shall be for the account of the Master Servicer or (in the case of
the REO Account) the Special Servicer which shall deposit the amount of such
loss (to the extent not offset by income from other investments) in the
Collection Account or the REO Account, as applicable, out of its own funds no
later than the next succeeding Master Servicer Remittance Date.
Except as expressly provided otherwise in this Agreement, if any default
occurs in the making of a payment due under any Eligible Investment, or if a
default occurs in any other performance required under any Eligible Investment,
the Master Servicer or the Special Servicer, as applicable, may, at its own
expense, take such action as may be appropriate to enforce such payment or
performance, including the institution and prosecution of appropriate
proceedings.
(f) Certain of the Mortgage Loans may provide for payment by the Mortgagor
to the Master Servicer of amounts to be used for payment of Escrow Payments for
the account of the Mortgagor. The Master Servicer shall deal with these amounts
in accordance with the Servicing Standard, applicable law and the terms of the
related Mortgage Loans.
(g) The Master Servicer will be required to allocate all amounts received
in respect of the Mortgage Loans to either the REMIC Mortgage Loans or the
Non-REMIC Assets. Any amounts collected that are payments in respect of the
Non-REMIC Assets set forth on Schedule II hereto shall be deposited into the
Non-REMIC Trust Collection Subaccount and all other payments in respect of the
Mortgage Loans shall be deposited in the REMIC Collection Subaccount.
So long as payments in respect of a REMIC Mortgage Loan in the Trust Fund
are current, payments shall be made in respect of the related Non-REMIC Asset as
its interests may appear, but in the event of a default under any of the
Mortgage Loans in the Trust Fund, the related Non-REMIC Asset will be
subordinated and the Master Servicer shall make no payments in respect of such
Non-REMIC Asset so long as such default is continuing.
-67-
<PAGE>
Section 5.2 Application of Funds in the Collection Account.
(a) Monthly, by noon, New York City time, on each Master Servicer
Remittance Date, the Master Servicer shall withdraw from the Collection Account
and deliver to the Trustee for deposit in the Distribution Account (in the
appropriate subaccount thereof, as described in Section 5.3 hereof) all amounts
then on deposit in the Collection Account that represent payments and other
collections on or in respect of the Mortgage Loans and any REO Properties that
were received by the Master Servicer or the Special Servicer through the end of
the related Collection Period, exclusive of any such payments and other
collections that: (i) constitute Monthly Payments due on a Due Date following
the end of the related Collection Period; (ii) are payable or reimbursable to
any Person from the Collection Account pursuant to clauses (i) through (xvi),
inclusive, of Section 5.2(b). The Trustee shall notify the Master Servicer (in a
manner consistent with the last sentence of Section 4.1(a)) if any such
remittance is not received by 3:00 p.m., New York City time, on any Master
Servicer Remittance Date. In addition, on each P&I Advance Date, the Master
Servicer is authorized (or, to the extent provided in Section 4.1, required) to
apply certain amounts held in the Collection Account for future distribution to
Certificateholders in subsequent months and certain Late Collections, all as
more particularly specified in Section 4.1, to make required P&I Advances on
such date.
(b) The Master Servicer may, from time to time, also make withdrawals from
the Collection Account (and such withdrawals shall be debited to the REMIC
Collection Subaccount to the extent related to the REMIC Mortgage Loans or any
of the REMICs and otherwise shall be debited to the Non-REMIC Trust Collection
Subaccount) for any of the following purposes:
(i) Servicing Fees: to pay to itself unpaid Master Servicing Fees
(exclusive of the portion thereof payable to the Trustee as Trustee Fees,
which shall be remitted to the Trustee for deposit in the Distribution
Account pursuant to the first sentence of Section 5.2(a)), and to the
Special Servicer unpaid Special Servicing Fees, in each case earned thereby
in respect of each Mortgage Loan, including, without limitation, each REO
Mortgage Loan, the Master Servicer's and the Special Servicer's respective
rights to payment pursuant to this clause (i) being limited to amounts
received or advanced on or in respect of such Mortgage Loan that are
allocable as a recovery of interest thereon;
(ii) Workout Fees and Liquidation Fees: to pay to the Special Servicer
earned and unpaid Workout Fees and Liquidation Fees to which it is entitled
pursuant to, and from the sources contemplated by, Section 8.10(b);
(iii) P&I Advances: to reimburse each of the Trustee and the Master
Servicer, in that order, for unreimbursed P&I Advances made by each such
Person, the Trustee's and Master Servicer's respective rights to be
reimbursed pursuant to this clause (iii) being limited to amounts received
that represent Late Collections of interest on and principal of the
particular Mortgage Loans, including, without limitation, REO Mortgage
Loans, with respect to which such P&I Advances were made;
(iv) Servicing Advances: to reimburse each of the Trustee and the
Master Servicer, in that order, for unreimbursed Servicing Advances made by
each such Person, the Trustee's and the Master Servicer's respective rights
to be reimbursed pursuant to this clause (iv) with respect to any Mortgage
Loan or REO Property being limited to, as applicable,
-68-
<PAGE>
related payments, Liquidation Proceeds, Insurance Proceeds, Condemnation
Proceeds, Repurchase Proceeds, payments of Substitution Shortfall Amounts
and REO Income;
(v) Nonrecoverable Advances: to reimburse the Trustee and the Master
Servicer, in that order, out of general collections on the Mortgage Loans
and REO Properties, for Nonrecoverable Advances made by each such Person;
(vi) Advance Interest: to pay the Trustee and the Master Servicer, in
that order, any unpaid Advance Interest due and payable thereto, the
Trustee's and the Master Servicer's respective rights to payment pursuant
to this clause (vi) being limited to 50% of Default Interest collected in
respect of a Mortgage Loan, including without limitation an REO Mortgage
Loan, as to which the related Advance was made;
(vii) More Advance Interest: at or following such time as it
reimburses itself or the Trustee, as applicable, for any unreimbursed
Advance pursuant to clause (iii), (iv) or (v) above or pursuant to Section
8.3, and insofar as payment has not already been made pursuant to clause
(vi) above, to pay the Trustee or itself, in that order, as the case may
be, out of general collections on the Mortgage Loans and REO Properties,
any related Advance Interest accrued and payable on such Advance;
(viii) Additional Master Servicing and Special Servicing Compensation:
to pay to each of itself and the Special Servicer all amounts deposited in
the Collection Account from time to time that constitute Additional Master
Servicing Compensation and Additional Special Servicing Compensation,
respectively;
(ix) Certain Environmental Costs: to pay out of general collections on
the Mortgage Loans and REO Properties, any costs and expenses incurred by
the Trust pursuant to Section 8.7(c);
(x) REO Extensions: to pay, out of general collections on the Mortgage
Loans and REO Properties, the cost of obtaining any REO Extension
contemplated by Section 8.18(a) in respect of any REO Property;
(xi) General Reimbursements and Indemnities: to pay itself, the
Special Servicer, the Trustee, or any of their respective directors,
officers, employees and agents, as the case may be, out of general
collections on the Mortgage Loans and REO Properties, pro rata based on
their respective entitlements, any amounts payable to any such Person
pursuant to any of Sections 7.11, 8.15, 8.26 and 8.27;
(xii) Legal Advice: to pay, out of general collections on the Mortgage
Loans and REO Properties, for (A) the cost of the Opinions of Counsel
contemplated by Sections 8.7(b)(ii), 8.19(a) and 13.13, (B) the cost of any
other Opinion of Counsel contemplated by this Agreement which is
specifically identified as an expense of the Trust and (C) the cost of the
advice of counsel contemplated by Section 8.20(a);
(xiii) Deleted Mortgage Loans: to the Seller or other appropriate
Person, with respect to each Mortgage Loan or REO Property, if any,
previously purchased or replaced by such Person pursuant to or as
contemplated by this Agreement, all amounts received on such Mortgage Loan
subsequent to the date of purchase;
-69-
<PAGE>
(xiv) Taxes: at the written direction of the Trustee, to pay any and
all federal, state and local taxes imposed on REMIC I, REMIC II or REMIC
III or on the assets or transactions of any such REMIC Pool, together with
all incidental costs and expenses, and any and all reasonable expenses
relating to tax audits, if and to the extent that either (A) none of the
Trustee, the Master Servicer or the Special Servicer is liable therefor
pursuant to Section 12.1(k), or (B) any such Person that may be so liable
has failed to make the required payment;
(xv) Other Expenses of Trust: to pay to the Person entitled thereto
any amounts specified herein to be expenses of the Trust, the payment of
which is not more specifically provided for in any prior clause of this
Section 5.2(b);
(xvi) Correction of Errors: to withdraw funds deposited in the
Collection Account in error; and
(xvii) Clear and Terminate: to clear and terminate the Collection
Account in connection with a termination of the Trust pursuant to Section
10.1.
The Master Servicer shall pay to or at the direction of each of the
Depositor, the Special Servicer and the Trustee from the Collection Account
amounts permitted to be paid therefrom to such Person promptly upon receipt of a
certificate of, as applicable, an Authorized Officer of the Depositor, a Special
Servicing Officer of the Special Servicer or a Responsible Officer of the
Trustee, describing the item and amount to which the Depositor, the Special
Servicer or the Trustee (or such third party), as the case may be, is entitled.
The Master Servicer may rely conclusively on any such certificate and shall have
no duty to re-calculate the amounts stated therein.
The Master Servicer shall keep and maintain a separate accounting for each
Mortgage Loan for the purpose of justifying any withdrawal from the Collection
Account.
Section 5.3 Distribution Account.
(a) The Trustee shall establish, on or prior to the Closing Date, and
thereafter maintain in the name of the Trustee, a segregated account (the
"Distribution Account") solely with respect to this Agreement, to be held in
trust for the benefit of the holders of interests in the Trust until disbursed
pursuant to the terms of this Agreement, entitled: "State Street Bank and Trust
Company, as trustee, in trust for the benefit of the Holders of Aetna Commercial
Mortgage Trust Multiclass Pass-Through Certificates, Series 1997-ALIC,
Distribution Account." The Distribution Account shall be an Eligible Account and
shall be comprised of two separate subaccounts, the REMIC Distribution
Subaccount (the "REMIC Distribution Subaccount") and the Non-REMIC Trust
Distribution Subaccount (the "Non-REMIC Trust Distribution Subaccount").
(b) Subject to Section 5.3(d), the Trustee shall deposit into the
Distribution Account on the Business Day received all moneys remitted by the
Master Servicer pursuant to Section 5.2(a) of this Agreement, together with (i)
all P&I Advances and Compensating Interest Payments made by the Master Servicer
and (ii) any reimbursements or indemnifications of the Trust made by any party
hereto or any other Person. Any amounts remitted to the Trustee and identified
to the Trustee as relating to REMIC Mortgage Loans shall be deposited in the
REMIC Distribution Subaccount and any amounts remitted to the Trustee and
identified to the Trustee as relating to the Non-REMIC Assets or Non-REMIC Fees
shall be deposited in the Non-REMIC Trust Distribution
-70-
<PAGE>
Subaccount. Funds in the Distribution Account shall not be invested. The
Distribution Account shall be held separate and apart from and shall not be
commingled with any other monies of or held in trust by the Trustee, including,
without limitation, other monies of the Trustee held under this Agreement.
(c) The Trustee shall make withdrawals from the Distribution Account only
for the following purposes:
(i) to withdraw amounts deposited in the Distribution Account in error
and pay such amounts to the Persons entitled thereto;
(ii) to pay itself unpaid Trustee Fees out of that portion of the
Master Servicing Fees deposited in the Distribution Account;
(iii) to make distributions to the Certificateholders pursuant to
Section 6.4; and
(iv) to clear and terminate the Distribution Account in connection
with a termination of the Trust pursuant to Section 10.1.
Section 5.4 Trustee Reports; Access to Information.
(a) Based on (and to the extent of the information contained in) the Master
Servicer Remittance Report, the Advance Report and the report pursuant to
Section 8.14(a) provided to the Trustee by the Master Servicer (no later than
the Report Date), on each Distribution Date, the Trustee shall deliver or cause
to be delivered by first class mail (or such electronic or other medium as the
Depositor shall reasonably request, the incremental cost of which shall be paid
in advance by the recipient thereof, or otherwise as the Trustee and such
recipient may agree), to each Certificateholder and any other interested party,
the Rating Agencies, the Master Servicer, the Special Servicer, the Underwriter,
the Depositor and the Operating Adviser (and, upon request and written
certification as to its beneficial ownership interest in the Book-Entry
Certificates, to any Certificate Owner): (i) a Monthly Certificateholder Report
(substantially in the form of Exhibit F-1); and (ii) a report containing
information regarding the Mortgage Loans as of the end of the related Collection
Period, which report will contain substantially the categories of information
regarding the Mortgage Loans set forth in Appendix I and Appendix II to the
Prospectus Supplement and will be presented in a tabular format substantially
similar to the respective formats utilized in such Appendix I and Appendix II
(if so requested by the Depositor, such reports referred to in clauses (i) and
(ii) shall be made available in electronic format). The report referred to in
clause (ii) of the preceding sentence shall be updated from time to time within
a reasonable period after the requisite information is available. The Trustee
shall be entitled, in the absence of manifest error, to conclusively rely on any
such information provided to it by the Master Servicer or the Special Servicer
and shall have no obligation to verify any such information.
(b) The Trustee shall provide or cause to be provided to the Depositor, the
Master Servicer and the Special Servicer, and to the OTS, the FDIC, and any
other federal or state banking or insurance regulatory authority that may
exercise authority over any Certificateholder, access to the Mortgage Files and
any other documentation regarding the Mortgage Loans and the Trust Fund within
its control which may be required by this Agreement or by applicable law. Such
access shall
-71-
<PAGE>
be afforded without charge but only upon reasonable prior written request and
during normal business hours at the offices of the Trustee designated by it.
(c) Within a reasonable period of time after the end of each calendar year,
the Trustee shall send to each Person who at any time during the calendar year
was a Certificateholder of record, a report summarizing the items specified in
clauses (i), (ii) and (x) of the definition of Monthly Certificateholder Report
and provided to Certificateholders pursuant to this Section 5.4, aggregated for
such calendar year or the applicable portion thereof during which such Person
was as Certificateholder, together with such other customary information as the
Trustee deems may be necessary or desirable for such Holders to prepare their
federal income tax returns. Such obligation of the Trustee shall be deemed to
have been satisfied to the extent that substantially comparable information has
been provided by the Trustee pursuant to any requirements of the Code as from
time to time are in force.
(d) The Trustee will make available the monthly Reports to
Certificateholders and all associated reporting information via its Corporate
Trust home page on the world wide web and/or via facsimile through its Street
Fax automated fax-back system. The web page is located at
"corporatetrust.statestreet.com." CMBS information is available by clicking the
"Investor Information & Reporting" button, and selecting the appropriate
transaction. Interested parties can register for Street Fax by calling (617)
664-5600 and requesting an account application by following the instructions
provided by the system.
For those who have obtained an account number and PIN on the Trustee's
Street Fax system, the foregoing report may be obtained from the Trustee via
automated facsimile by calling (617) 664-5600 and requesting the report code
associated with Aetna Commercial Mortgage Trust, Series 1997-ALIC. Report codes
can be obtained by calling the same telephone number and requesting a report
listing. In addition, if the Depositor so directs the Trustee and on terms
acceptable to the Trustee, the Trustee will make certain information related to
the mortgage loans available through its Corporate Trust web site and through
its Trade Winds electronic bulletin board. To register for the Trade Winds
bulletin board, certificateholders should call the Trustee at (617) 664-5443.
(e) The Trustee shall make available at its Corporate Trust Office, during
normal business hours, upon reasonable advance written notice for review by any
Certificateholder, any Certificate Owner, any Prospective Investor, the
Underwriter, each Rating Agency, the Operating Adviser and the Depositor,
originals or copies of, among other things, the following items: (i) this
Agreement, the Mortgage Loan Purchase Agreement, and any amendments thereto, to
the extent such items are in the Trustee's possession, (ii) all Monthly
Certificateholder Reports and reports pursuant to Section 5.4(a)(ii) delivered
by the Trustee to Certificateholders since the Closing Date and all Annual
Reports, reports pursuant to Section 8.14(a), and Master Servicer Remittance
Reports received by the Trustee from the Master Servicer since the Closing Date,
(iii) all Officer's Certificates delivered to the Trustee since the Closing Date
pursuant to Section 8.12, (iv) all accountants' reports delivered to the Trustee
since the Closing Date pursuant to Section 8.13, (v) the most recent property
inspection reports in the possession of the Trustee in respect of each Mortgaged
Property and REO Property, (vi) the most recent Mortgaged Property/REO Property
annual operating statement and rent roll, if any, collected or otherwise
obtained by or on behalf of the Master Servicer or the Special Servicer and
delivered to the Trustee, (vii) any and all modifications, waivers and
amendments of the terms of a Mortgage Loan entered into by the Master Servicer
and/or the Special Servicer and delivered to the Trustee, (viii) any and all
Officers' Certificates (and
-72-
<PAGE>
attachments thereto) delivered to or retained by the Trustee to support any of
its, the Special Servicer's or the Master Servicer's determination that any
Advance was not or, if made, would not be, recoverable, (ix) any reports
delivered by the Special Servicer to the Trustee pursuant to Section 8.7(e), and
(x) copies of the Prospectus and the Memorandum, as such may have been amended
or supplemented from time to time and delivered to the Trustee. Copies (or
computer diskettes or other digital or electronic copies of such information if
reasonably available in lieu of paper copies) of any and all of the foregoing
items shall be made available by the Trustee upon request; provided, however,
that the Trustee shall be permitted to require payment by the requesting party
(other than the Depositor, the Underwriter or either Rating Agency) of a sum
sufficient to cover the reasonable expenses actually incurred by the Trustee of
providing access or copies (including electronic or digital copies) of any such
information requested in accordance with the preceding sentence. The Trustee's
obligation to provide or make available any of the foregoing is subject in its
entirety to the Trustee's advance receipt thereof from the Master Servicer or
the Special Servicer, as applicable.
(f) The Trustee shall afford the Underwriter, the Rating Agencies, the
Depositor, the Master Servicer, the Special Servicer, the Operating Adviser, any
Certificateholder, any Certificate Owner, and any Prospective Investor, upon
reasonable written notice and during normal business hours, reasonable access to
all relevant, non-attorney-client-privileged records and documentation,
including without limitation information delivered by the Master Servicer or the
Special Servicer to the Trustee pursuant to Section 8.16, regarding the Mortgage
Loans, any REO Properties and all other relevant matters relating to this
Agreement, and access to Responsible Officers of the Trustee. Copies (or
computer diskettes or other digital or electronic copies of such information if
reasonably available in lieu of paper copies) of any and all of the foregoing
items shall be made available by the Trustee upon reasonable written request;
provided, however, that the Trustee shall be permitted to require payment by the
requesting party (other than the Depositor, the Master Servicer, the Special
Servicer, the Underwriter or either Rating Agency) of a sum sufficient to cover
the reasonable expenses actually incurred by the Trustee of providing access or
copies (including electronic or digital copies) of any such information
requested in accordance with the preceding sentence.
(g) In connection with providing access to or copies of the items described
in subsections (d), (e) and (f) of this Section 5.4, the Trustee may require (a)
in the case of Certificate Owners, a written confirmation executed by the
requesting Person, in form reasonably satisfactory to the Trustee, generally to
the effect that such Person is a beneficial holder of Certificates, is
requesting the information solely for use in evaluating such Person's investment
in the Certificates and will otherwise keep such information confidential and
(b) in the case of Prospective Investors, a written confirmation executed by the
requesting Person, in form reasonably satisfactory to the Trustee, generally to
the effect that such Person is a prospective purchaser of a Certificate or a
beneficial ownership interest therein, is requesting the information solely for
use in evaluating a possible investment in Certificates and will otherwise keep
such information confidential. All Certificateholders, by the acceptance of
their Certificates, shall be deemed to have agreed to keep such information
confidential. Notwithstanding the foregoing provisions of this Section 5.4(g),
the Trustee shall have no responsibility for the accuracy, completeness or
sufficiency for any purpose of any information so made available or furnished by
it pursuant to subsections (d), (e) and (f) of this Section 5.4.
Section 5.5 Trustee Tax Reports. The Trustee shall perform all reporting
and other tax compliance duties that are the responsibility of the Trust and
each REMIC Pool under the Code, the REMIC Provisions, or other compliance
guidance issued by the Internal Revenue Service
-73-
<PAGE>
or by the related state or local taxing authority under any Applicable State
Law. Consistent with this Pooling and Servicing Agreement, the Trustee shall
provide (i) to the Internal Revenue Service or other Persons (including, but not
limited to, any Person that has transferred a Residual Certificate to a
Disqualified Organization or to an agent that has acquired a Residual
Certificate on behalf of a Disqualified Organization) such information as is
necessary for the application of any tax relating to the transfer of a Residual
Certificate to any Disqualified Organization and (ii) to the Certificateholders
such information or reports as are required by the Code or REMIC Provisions. The
Master Servicer shall on a timely basis provide the Trustee with such
information concerning the Mortgage Loans and other Trust assets as is necessary
for the preparation of the tax or information returns or receipts of the Trust
and each REMIC Pool as the Trustee may reasonably request from time to time. The
Special Servicer is required to provide to the Master Servicer all information
in its possession with respect to the Specially Serviced Mortgage Loans and REO
Properties in order for the Master Servicer to comply with its obligations under
this Section 5.5. The Trustee shall be entitled, in the absence of manifest
error, to conclusively rely on any such information provided to it by the Master
Servicer or the Special Servicer and shall have no obligation to verify any such
information.
ARTICLE VI
DISTRIBUTIONS
Section 6.1 Distributions Generally.
(a) All distributions made with respect to each Class on each Distribution
Date shall be allocated pro rata among the outstanding Certificates in such
Class based on their respective Percentage Interests. Except as otherwise
provided below, all such distributions with respect to each Class on each
Distribution Date shall be made to the Certificateholders of the respective
Class of record at the close of business on the related Record Date and shall be
made by wire transfer of immediately available funds to the account of any such
Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder shall have provided the Trustee with wiring
instructions on or before the related Record Date (which wiring instructions may
be in the form of a standing order applicable to all subsequent Distribution
Dates) or otherwise by check mailed to the address of such Certificateholder as
it appears in the Certificate Register. The final distribution on each
Certificate (determined without regard to any possible future reimbursement of
any Realized Loss or Expense Loss previously allocated to such Certificate) will
be made in like manner, but only upon presentation and surrender of such
Certificate at the offices of the Certificate Registrar or such other location
specified in the notice to Certificateholders of such final distribution. Any
distribution that is to be made with respect to a Certificate in reimbursement
of a Realized Loss or Expense Loss previously allocated thereto, which
reimbursement is to occur after the date on which such Certificate is
surrendered as contemplated by the preceding sentence, will be made by check
mailed to the address of the Certificateholder that surrendered such Certificate
at such address as last appeared in the Certificate Registrar or to any other
address of which the Trustee was subsequently notified in writing.
(b) Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of its
Participants in accordance with its normal procedures. Each Participant shall be
responsible for disbursing such distribution to each Indirect Participant for
which it acts as agent. Each Participant and Indirect Participant shall be
responsible for disbursing funds
-74-
<PAGE>
to the Certificate Owners that it represents. None of the Trustee, the
Certificate Registrar, the Depositor, the Master Servicer or the Special
Servicer shall have any responsibility therefor except as otherwise provided by
this Agreement or applicable law.
(c) The rights of the Certificateholders to receive distributions from the
proceeds of the Trust Fund in respect of their Certificates, and all rights and
interests of the Certificateholders in and to such distributions, shall be as
set forth in this Agreement. Neither the Holders of any Class of Certificates
nor any party hereto shall in any way be responsible or liable to the Holders of
any other Class of Certificates in respect of amounts properly previously
distributed on the Certificates. Distributions in reimbursement of Realized
Losses and Expense Losses previously allocated to a Class of Certificates shall
not constitute distributions of principal and shall not result in a reduction of
the related Class Principal Balance.
Section 6.2 REMIC I.
(a) On each Distribution Date, the Trustee shall be deemed to apply the
Available Distribution Amount for such date (from amounts on deposit in the
REMIC Distribution Subaccount on such date) for the following purposes and in
the following order of priority:
(i) to pay interest to REMIC II in respect of the various REMIC I
Regular Interests, up to an amount equal to, and pro rata in accordance
with, all Uncertificated Distributable Interest (excluding amounts
attributable to Prepayment Premiums) for each such REMIC I Regular Interest
for such Distribution Date;
(ii) to pay principal to REMIC II in respect of the various REMIC I
Regular Interests, up to an amount equal to, and pro rata in accordance
with, in the case of each such REMIC I Regular Interest, the excess, if
any, of the Uncertificated Principal Balance of such REMIC I Regular
Interest outstanding immediately prior to such Distribution Date, over the
Stated Principal Balance of the related REMIC Mortgage Loan (including
without limitation an REO Mortgage Loan or, if applicable, a Qualifying
Substitute Mortgage Loan), that will be outstanding immediately following
such Distribution Date;
(iii) to reimburse REMIC II for any Realized Losses and Expense Losses
previously deemed allocated to the various REMIC I Regular Interests (with
interest), up to an amount equal to, and pro rata in accordance with, the
Loss Reimbursement Amount for each such REMIC I Regular Interest for such
Distribution Date; and
(iv) to the Holders of the Residual Certificates representing the
Class R-I Interests that portion, if any, of the Available Distribution
Amount (excluding amounts attributable to Prepayment Premiums) for such
date that has not otherwise been deemed paid to REMIC II in respect of the
REMIC I Regular Interests pursuant to Section 6.2(a).
(b) On each Distribution Date, the Trustee shall be deemed to apply each
Prepayment Premium then on deposit in the Distribution Account and received
during or prior to the related Collection Period in the REMIC Collection
Subaccount, to pay additional interest to REMIC II in respect of the REMIC I
Regular Interest that relates to the REMIC Mortgage Loan (including without
limitation an REO Mortgage Loan or, if applicable, a Qualifying Substitute
Mortgage Loan) as to which such Prepayment Premium was received.
-75-
<PAGE>
(c) All amounts (other than additional interest in the form of Prepayment
Premiums) deemed paid to REMIC II in respect of the REMIC I Regular Interests
pursuant to this Section 6.2 on any Distribution Date is herein referred to as
the "REMIC II Distribution Amount" for such date.
Section 6.3 REMIC II.
(a) It is the intention of the parties hereto that the distributions set
forth below result in the Uncertificated Principal Balances of each Class of
REMIC II Regular Interests and its corresponding Class of Certificates being
equal. On each Distribution Date, the Trustee shall be deemed to apply the REMIC
II Distribution Amount for such date for the following purposes and in the
following order of priority:
(i) to distributions of interest to REMIC III in respect of REMIC II
Regular Interest A-1A, REMIC II Regular Interest A-1B and REMIC II Regular
Interest A-2, pro rata, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interests for such
Distribution Date;
(ii) to distributions of principal to REMIC III: (a) from the
Principal Distribution Amount with respect to Loan Group 1 for such
Distribution Date, first in respect of REMIC II Regular Interest A-1A,
second in respect of REMIC II Regular Interest A-1B and third in respect of
REMIC II Regular Interest A-2, and (b) from the Principal Distribution
Amount with respect to Loan Group 2 for such Distribution Date, first in
respect of REMIC II Regular Interest A-2, second in respect of REMIC II
Regular Interest A-1A and third in respect of REMIC II Regular Interest
A-1B, in each case, until the Uncertificated Principal Balances thereof are
reduced to zero;
(iii) to reimburse REMIC III for any Realized Losses and Expense
Losses previously deemed allocated to REMIC II Regular Interest A-1A, REMIC
II Regular Interest A-1B and REMIC II Regular Interest A-2, pro rata (with
interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such REMIC II Regular Interests for such Distribution Date;
(iv) to distributions of interest to REMIC III in respect of REMIC II
Regular Interest B, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
(v) to distributions of principal to REMIC III in respect of REMIC II
Regular Interest B, until the Uncertificated Principal Balance thereof is
reduced to zero;
(vi) to reimburse REMIC III for any Realized Losses and Expense Losses
previously deemed allocated to REMIC II Regular Interest B (with interest),
up to an amount equal to the Loss Reimbursement Amount in respect of such
REMIC II Regular Interest for such Distribution Date;
(vii) to distributions of interest to REMIC III in respect of REMIC II
Regular Interest C, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
-76-
<PAGE>
(viii) to distributions of principal to REMIC III in respect of REMIC
II Regular Interest C, until the Uncertificated Principal Balance thereof
is reduced to zero;
(ix) to reimburse REMIC III for any Realized Losses and Expense Losses
previously deemed allocated to REMIC II Regular Interest C (with interest),
up to an amount equal to the Loss Reimbursement Amount in respect of such
REMIC II Regular Interest for such Distribution Date;
(x) to distributions of interest to REMIC III in respect of REMIC II
Regular Interest D, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
(xi) to distributions of principal to REMIC III in respect of REMIC II
Regular Interest D, until the Uncertificated Principal Balance thereof is
reduced to zero;
(xii) to reimburse REMIC III for any Realized Losses and Expense
Losses previously deemed allocated to REMIC II Regular Interest D (with
interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such REMIC II Regular Interest for such Distribution Date;
(xiii) to distributions of interest to REMIC III in respect of REMIC
II Regular Interest E, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
(xiv) to distributions of principal to REMIC III in respect of REMIC
II Regular Interest E, until the Uncertificated Principal Balance thereof
is reduced to zero;
(xv) to reimburse REMIC III for any Realized Losses and Expense Losses
previously deemed allocated to REMIC II Regular Interest E (with interest),
up to an amount equal to the Loss Reimbursement Amount in respect of such
REMIC II Regular Interest for such Distribution Date;
(xvi) to distributions of interest to REMIC III in respect of REMIC II
Regular Interest F, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
(xvii) to distributions of principal to REMIC III in respect of REMIC
II Regular Interest F, until the Uncertificated Principal Balance thereof
is reduced to zero;
(xviii) to reimburse REMIC III for any Realized Losses and Expense
Losses previously deemed allocated to REMIC II Regular Interest F (with
interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such REMIC II Regular Interest for such Distribution Date;
(xix) to distributions of interest to REMIC III in respect of REMIC II
Regular Interest G, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
-77-
<PAGE>
(xx) to distributions of principal to REMIC III in respect of REMIC II
Regular Interest G, until the Uncertificated Principal Balance thereof is
reduced to zero;
(xxi) to reimburse REMIC III for any Realized Losses and Expense
Losses previously deemed allocated to REMIC II Regular Interest G (with
interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such REMIC II Regular Interest for such Distribution Date;
(xxii) to distributions of interest to REMIC III in respect of REMIC
II Regular Interest H, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
(xxiii) to distributions of principal to REMIC III in respect of REMIC
II Regular Interest H, until the Uncertificated Principal Balance thereof
is reduced to zero;
(xxiv) to reimburse REMIC III for any Realized Losses and Expense
Losses previously deemed allocated to REMIC II Regular Interest H (with
interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such REMIC II Regular Interest for such Distribution Date;
(xxv) to distributions of interest to REMIC III in respect of REMIC II
Regular Interest J, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
(xxvi) to distributions of principal to REMIC III in respect of REMIC
II Regular Interest J, until the Uncertificated Principal Balance thereof
is reduced to zero;
(xxvii) to reimburse REMIC III for any Realized Losses and Expense
Losses previously deemed allocated to REMIC II Regular Interest J (with
interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such REMIC II Regular Interest for such Distribution Date.
(xxviii) to distributions of interest to REMIC III in respect of REMIC
II Regular Interest K, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
(xxix) to distributions of principal to REMIC III in respect of REMIC
II Regular Interest K, until the Uncertificated Principal Balance thereof
is reduced to zero;
(xxx) to reimburse REMIC III for any Realized Losses and Expense
Losses previously deemed allocated to REMIC II Regular Interest K (with
interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such REMIC II Regular Interest for such Distribution Date.
(xxxi) to distributions of interest to REMIC III in respect of REMIC
II Regular Interest L, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
-78-
<PAGE>
(xxxii) to distributions of principal to REMIC III in respect of REMIC
II Regular Interest L, until the Uncertificated Principal Balance thereof
is reduced to zero; and
(xxxiii) to reimburse REMIC III for any Realized Losses and Expense
Losses previously deemed allocated to REMIC II Regular Interest L (with
interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such REMIC II Regular Interest for such Distribution Date.
(b) On each Distribution Date, the Trustee shall be deemed to apply all
Prepayment Premiums then on deposit in the Distribution Account and received
during or prior to the related Collection Period, to pay additional interest to
REMIC III in respect of the REMIC II Regular Interests.
(c) All amounts (other than additional interest in the form of Prepayment
Premiums) deemed paid to REMIC III in respect of the REMIC II Regular Interests
pursuant to this Section 6.3 on any Distribution Date is herein referred to as
the "REMIC III Distribution Amount" for such date.
Section 6.4 REMIC III.
(a) On each Distribution Date, following the deemed payments to REMIC III
in respect of the REMIC II Regular Interests on such date pursuant to Section
6.3, the Trustee shall withdraw from the REMIC Distribution Subaccount the REMIC
III Distribution Amount for such Distribution Date and shall apply such amount
for the following purposes and in the following order of priority:
(i) to pay interest to the Holders of the respective Classes of Senior
Certificates, pro rata up to an amount equal to Distributable Certificate
Interest in respect of each such Class of Certificates for such
Distribution Date;
(ii) to pay principal (a) from the Principal Distribution Amount with
respect to Loan Group 1 for such Distribution Date, first to the Holders of
the Class A-1A Certificates, second to the holders of the Class A-1B
Certificates and third to the holders of the Class A-2 Certificates, in
each case up to an amount equal to the lesser of (1) the then outstanding
Class Principal Balance of each such Class of Certificates and (2) the
remaining portion, if any, of such Principal Distribution Amount; and (b)
from the Principal Distribution Amount with respect to Loan Group 2 for
such Distribution Date, first to the holders of the Class A-2 Certificates,
second to the holders of the Class A-1A Certificates, third to the holders
of Class A-1B Certificates, in each case, up to an amount equal to the
lesser of (i) the then-outstanding aggregate Certificate Balance of such
Class of Certificates and (ii) the remaining portion of such Principal
Distribution Amount;
(iii) to reimburse the Holders of the Class A Certificates, pro rata,
for any Realized Losses and Expense Losses previously deemed allocated to
such Classes of Certificates (with interest), up to an amount equal to the
Loss Reimbursement Amounts in respect of such Class of Certificates for
such Distribution Date; and
-79-
<PAGE>
(iv) to make payments on the Subordinate and Residual Certificates as
provided below;
provided that, on each Distribution Date after the aggregate of the Class
Principal Balances of the Subordinate Certificates has been reduced to zero, and
in any event on the final Distribution Date in connection with a termination of
the Trust, the payments of principal to be made pursuant to clause (ii) above,
will be so made to the Holders of the respective Classes of Class A
Certificates, up to an amount equal to, and pro rata as among such Classes in
accordance with, the respective outstanding Class Principal Balances of such
Classes of Certificates, and without regard to the Principal Distribution
Amounts for such date.
(b) On each Distribution Date, following the foregoing series of payments
on the Senior Certificates, the Trustee shall apply the remaining portion, if
any, of the REMIC III Distribution Amount for such date for the following
purposes and in the following order of priority:
(i) to pay interest to the Holders of the Class B Certificates, up to
an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
(ii) if the Class Principal Balances of the Class A Certificates have
been reduced to zero, to pay principal to the Holders of the Class B
Certificates, up to an amount equal to the lesser of (A) the then
outstanding Class Principal Balance of such Class of Certificates and (B)
the remaining Principal Distribution Amount for such Distribution Date;
(iii) to reimburse the Holders of the Class B Certificates for
Realized Losses and Expense Losses, if any, previously deemed allocated to
such Class of Certificates (with interest), up to an amount equal to the
Loss Reimbursement Amount in respect of such Class of Certificates for such
Distribution Date;
(iv) to pay interest to the Holders of the Class C Certificates, up to
an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
(v) if the Class Principal Balances of the Class A and Class B
Certificates have been reduced to zero, to pay principal to the Holders of
the Class C Certificates, up to an amount equal to the lesser of (A) the
then outstanding Class Principal Balance of such Class of Certificates and
(B) the remaining Principal Distribution Amount for such Distribution Date;
(vi) to reimburse the Holders of the Class C Certificates for any
Realized Losses and Expenses Losses previously deemed allocated to such
Class of Certificates (with interest), up to an amount equal to the Loss
Reimbursement Amount in respect of such Class of Certificates for such
Distribution Date;
(vii) to pay interest to the Holders of the Class D Certificates, up
to an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
-80-
<PAGE>
(viii) if the Class Principal Balances of the Class A, Class B and
Class C Certificates have been reduced to zero, to pay principal to the
Holders of the Class D Certificates, up to an amount equal to the lesser of
(A) the then outstanding Class Principal Balance of such Class of
Certificates and (B) the remaining Principal Distribution Amount for such
Distribution Date;
(ix) to reimburse the Holders of the Class D Certificates for any
Realized Losses and Expense Losses previously deemed allocated to such
Class of Certificates (with interest), up to an amount equal to the Loss
Reimbursement Amount in respect of such Class of Certificates for such
Distribution Date;
(x) to pay interest to the Holders of the Class E Certificates, up to
an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
(xi) if the Class Principal Balances of the Class A, Class B, Class C
and Class D Certificates have been reduced to zero, to pay principal to the
Holders of the Class E Certificates, up to an amount equal to the lesser of
(A) the then outstanding Class Principal Balance of such Class of
Certificates and (B) the remaining Principal Distribution Amount for such
Distribution Date;
(xii) to reimburse the Holders of the Class E Certificates for any
Realized Losses and Expense Losses previously deemed allocated to such
Class of Certificates (with interest), up to an amount equal to the Loss
Reimbursement Amount in respect of such Class of Certificates for such
Distribution Date;
(xiii) to pay interest to the Holders of the Class F Certificates, up
to an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
(xiv) if the Class Principal Balances of the Class A, Class B, Class
C, Class D and Class E Certificates have been reduced to zero, to pay
principal to the Holders of the Class F Certificates, up to an amount equal
to the lesser of (A) the then outstanding Class Principal Balance of such
Class of Certificates and (B) the remaining Principal Distribution Amount
for such Distribution Date;
(xv) to reimburse the Holders of the Class F Certificates for any
Realized Losses and Expense Losses previously deemed allocated to such
Class of Certificates (with interest), up to an amount equal to the Loss
Reimbursement Amount in respect of such Class of Certificates for such
Distribution Date;
(xvi) to pay interest to the Holders of the Class G Certificates, up
to an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
(xvii) if the Class Principal Balances of the Class A, Class B, Class
C, Class D, Class E and Class F Certificates have been reduced to zero, to
pay principal to the Holders of the Class G Certificates, up to an amount
equal to the lesser of (A) the then
-81-
<PAGE>
outstanding Class Principal Balance of such Class of Certificates and (B)
the remaining Principal Distribution Amount for such Distribution Date;
(xviii) to reimburse the Holders of the Class G Certificates for any
Realized Losses and Expense Losses previously deemed allocated to such
Class of Certificates (with interest), up to an amount equal to the Loss
Reimbursement Amount in respect of such Class of Certificates for such
Distribution Date;
(xix) to pay interest to the Holders of the Class H Certificates, up
to an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
(xx) if the Class Principal Balances of the Class A, Class B, Class C,
Class D, Class E, Class F and Class G Certificates have been reduced to
zero, to pay principal to the Holders of the Class H Certificates, up to an
amount equal to the lesser of (A) the then outstanding Class Principal
Balance of such Class of Certificates and (B) the remaining Principal
Distribution Amount for such Distribution Date;
(xxi) to reimburse the Holders of the Class H Certificates for any
Realized Losses and Expense Losses previously deemed allocated to such
Class of Certificates (with interest), up to an amount equal to the Loss
Reimbursement Amount in respect of such Class of Certificates for such
Distribution Date;
(xxii) to pay interest to the Holders of the Class J Certificates, up
to an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
(xxiii) if the Class Principal Balances of the Class A, Class B, Class
C, Class D, Class E, Class F, Class G and Class H Certificates have been
reduced to zero, to pay principal to the Holders of the Class J
Certificates, up to an amount equal to the lesser of (A) the then
outstanding Class Principal Balance of such Class of Certificates and (B)
the remaining Principal Distribution Amount for such Distribution Date;
(xxiv) to reimburse the Holders of the Class J Certificates for any
Realized Losses and Expense Losses previously deemed allocated to such
Class of Certificates (with interest), up to an amount equal to the Loss
Reimbursement Amount in respect of such Class of Certificates for such
Distribution Date;
(xxv) to pay interest to the Holders of the Class K Certificates, up
to an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
(xxvi) if the Class Principal Balances of the Class A, Class B, Class
C, Class D, Class E, Class F, Class G, Class H and Class J Certificates
have been reduced to zero, to pay principal to the Holders of the Class K
Certificates, up to an amount equal to the lesser of (A) the then
outstanding Class Principal Balance of such Class of Certificates and (B)
the remaining Principal Distribution Amount for such Distribution Date;
-82-
<PAGE>
(xxvii) to reimburse the Holders of the Class K Certificates for any
Realized Losses and Expense Losses previously deemed allocated to such
Class of Certificates (with interest), up to an amount equal to the Loss
Reimbursement Amount in respect of such Class of Certificates for such
Distribution Date;
(xxviii) to pay interest to the Holders of the Class L Certificates,
up to an amount equal to all Distributable Certificate Interest in respect
of such Class of Certificates for such Distribution Date;
(xxix) if the Class Principal Balances of the Class A, Class B, Class
C, Class D, Class E, Class F, Class G, Class H, Class J and Class K
Certificates have been reduced to zero, to pay principal to the Holders of
the Class L Certificates, up to an amount equal to the lesser of (A) the
then outstanding Class Principal Balance of such Class of Certificates and
(B) the remaining Principal Distribution Amount for such Distribution Date;
(xxx) to reimburse the Holders of the Class L Certificates for any
Realized Losses and Expense Losses previously deemed allocated to such
Class of Certificates (with interest), up to an amount equal to the Loss
Reimbursement Amount in respect of such Class of Certificates for such
Distribution Date; and
(xxxi) to pay to the Holders of the Residual Certificates representing
the Class R-III Interests the balance, if any, of the REMIC III
Distribution Amount for such Distribution Date;
(c) On each Distribution Date, the Trustee shall withdraw any amounts then
on deposit in the REMIC Distribution Subaccount that represent Prepayment
Premiums collected in respect of Loan Group 1 during or prior to the related
Collection Period and shall distribute such amounts, in each case, subject to
available funds, as additional interest, as follows: to the Holders of the
respective Class or Classes of Principal Balance Certificates (other than the
Class E, Class F, Class G, Class J, Class K and Class L Certificates) then
entitled to distributions of principal from the Principal Distribution Amount
for such Distribution Date in respect of Loan Group 1 (other than, if
applicable, the Class A-2 Certificates), an aggregate amount (allocable among
such Classes, if more than one, as described below) equal to the amount of the
Prepayment Premium, multiplied by the lesser of (A) a fraction, expressed as a
decimal, 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
Certificates then outstanding (or, in the case of two or more Classes of Class A
Certificates, the one with the earliest payment priority), over the relevant
Discount Rate (as defined below), and the denominator of which is equal to the
excess, if any, of the Mortgage Rate for the prepaid Group 1 Loan, over the
relevant Discount Rate and (B) 0.25. If there is more than one Class of
Principal Balance Certificates (other than the Class A-2 Certificates) entitled
to distributions of principal from the Principal Distribution Amount for Loan
Group 1 for such Distribution Date, the aggregate amount described in the
preceding sentence shall be allocated among such Classes on a pro rata basis in
accordance with the relative sizes of such distributions of principal. Any
portion of such Prepayment Premium that is not so distributed to the Holders of
such Principal Balance Certificates will be distributed to the Holders of the
Class IO Certificates. Notwithstanding the foregoing, in the event that the
Class A-2 Certificates are then entitled to distributions of principal from the
Principal Distribution Amount in respect of Loan Group 1, then any Principal
Prepayment collected with respect to a Group 1 Loan will be allocated between
the Class B Certificates and the Class IO Certificates in accordance with the
formula set forth above.
-83-
<PAGE>
Any Prepayment Premium collected with respect to a Group 2 Loan during any
Collection Period will be distributed on the following Distribution Date (a) to
the Holders of the Class A-2 Certificates, out of such Prepayment Premium, an
amount equal to the present value calculated on a monthly basis (discounted at
the applicable Discount Rate plus 0.75%) of the positive differential, if any,
between (i) the Pass-Through Rate on the Class A-2 Certificates and (ii) the
applicable Discount Rate plus 0.75%, in each case, from the Distribution Date
occurring in the month following such prepayment until the Class Principal
Balance of the Class A-2 Certificates would have been reduced to zero had the
related Principal Prepayment not occurred given the then current Class Principal
Balance of all outstanding Classes of Certificates and assuming that any then
outstanding REMIC Mortgage Loans pay off on their respective Maturity Dates,
multiplied by the Certificate Balance of the Class A-2 Certificates on each such
Distribution Date based on the foregoing assumptions; and (b) to the Holders of
the Class IO Certificates, the remainder of such Prepayment Premium.
For purposes of the foregoing, the "Discount Rate" is the annual rate
which, when compounded monthly, is equivalent to the Treasury Rate when
compounded semi-annually. The "Treasury Rate" is the yield calculated by the
linear interpolation of the yields, as reported in Federal Reserve Statistical
Release H.15--Selected Interest Rates under the heading "U.S. government
securities/Treasury constant maturities" for the week ending prior to the date
of the relevant principal prepayment, of U.S. Treasury constant maturities with
a maturity date (one longer and one shorter) most nearly approximating the
maturity date of the Mortgage Loan prepaid in the case of a prepayment of a
Group 1 Loan, and most nearly approximating the Distribution Date on which the
Class Principal Balance of the Class A-2 Certificates would have been reduced to
zero had the related prepayment not occurred, in the case of a prepayment of a
Group 2 Loan. If Release H.15 is no longer published, the Trustee shall select a
comparable publication to determine the Treasury Rate.
(d) All of the foregoing distributions to be made from the Distribution
Account on any Distribution Date with respect to the REMIC III Certificates
shall be deemed made from the payments deemed made to REMIC III in respect of
the REMIC II Regular Interests on such Distribution Date pursuant to Section
6.3.
(e) On each Distribution Date, the Trustee shall withdraw the amounts, if
any, which were received from the Master Servicer as a distribution from the
Non-REMIC Trust Collection Subaccount during the related Due Period in respect
of the Non-REMIC Assets on deposit in the Non-REMIC Trust Distribution
Subaccount and shall distribute such amounts to the Holders of the Class V
Certificates, pro rata in accordance with their respective Percentage Interests
in the Class V Certificates immediately prior to such distribution. Such amounts
shall be paid to Class V Certificateholders net of any fees and expenses, and
after any withholding on account of taxes, as the Trustee shall determine to be
due in respect of such amounts and such Distribution Date.
(f) On each Distribution Date, the Trustee shall withdraw the amounts, if
any, which were received from the Master Servicer as a distribution from the
Non-REMIC Trust Collection Subaccount during the related Due Period in respect
of the Non-REMIC Fees on deposit in the Non-REMIC Trust Distribution Subaccount
and shall distribute such amounts to the Holders of the Class W Certificates,
pro rata in accordance with their respective Percentage Interests in the Class W
Certificates immediately prior to such distribution. Such amounts shall be paid
to Class W Certificateholders net of any fees and expenses, and after any
withholding on account of taxes, as the Trustee shall determine to be due in
respect of such amounts and such Distribution Date.
-84-
<PAGE>
Section 6.5 Allocation of Realized Losses and Expense Losses.
(a) On each Distribution Date, following the deemed distributions to be
made in respect of the REMIC I Regular Interests pursuant to Section 6.2, the
Uncertificated Principal Balance of each REMIC I Regular Interest (after taking
account of such deemed distributions) shall be reduced to equal the Stated
Principal Balance of the related REMIC Mortgage Loan (including without
limitation an REO Mortgage Loan or, if applicable, a Replacement Mortgage Loan)
that will be outstanding immediately following such Distribution Date. Such
reductions shall be deemed to be an allocation of Realized Losses and Expense
Losses.
(b) On each Distribution Date, following the payments deemed to be made to
REMIC III in respect of the REMIC II Regular Interests on such date pursuant to
Section 6.3, the Trustee shall also determine the amount, if any, by which (i)
the then aggregate Uncertificated Principal Balance of REMIC II Regular
Interests A, B, C, D, E, F, G, H, J, K and L, exceeds (ii) the aggregate Stated
Principal Balance of the REMIC Mortgage Loans that will be outstanding
immediately following such Distribution Date. If such excess does exist, then
the respective Uncertificated Principal Balances of such REMIC II Regular
Interests shall be reduced sequentially, in reverse alphabetical order of letter
designation, in each case, until the first to occur of such excess being reduced
to zero or the Uncertificated Principal Balance of the particular REMIC I
Regular Interest being reduced to zero. Such reductions in the Uncertificated
Principal Balances of such REMIC II Regular Interests shall be deemed to be
allocations of Realized Losses and Expense Losses.
(c) On each Distribution Date, following the distributions to be made to
the Certificateholders on such date pursuant to Section 6.4, the Trustee shall
determine the amount, if any, by which (i) the then aggregate Certificate
Principal Balance of the Principal Balance Certificates, exceeds (ii) the
aggregate Stated Principal Balance of the REMIC Mortgage Loans in the REMIC
Mortgage Pool that will be outstanding immediately following such Distribution
Date. If such excess does exist, then the Class Principal Balances of the Class
L, Class K, Class J, Class H, Class G, Class F, Class E, Class D, Class C, Class
B, and Class A Certificates shall be reduced sequentially, in that order, in
each case, until the first to occur of such excess being reduced to zero or the
related Class Principal Balance being reduced to zero. Such reductions in the
Class Principal Balances of the respective Classes of Principal Certificates
shall be deemed to be allocations of Realized Losses and Expense Losses.
Section 6.6 Appraisal Reductions. Following the occurrence of an Appraisal
Event in respect of any REMIC Mortgage Loan, the Special Servicer shall as soon
as reasonably practicable obtain (A) an Appraisal of the related Mortgaged
Property or REO Property, as applicable, if the Stated Principal Balance of such
Required Appraisal Loan exceeds $500,000 or (B) at the option of the Special
Servicer, if the Stated Principal Balance of such Required Appraisal Loan is
less than or equal to $500,000, either an internal valuation prepared by the
Special Servicer or an Appraisal; provided that if the Special Servicer had
completed or obtained an Appraisal or internal valuation within the immediately
preceding 12 months, the Special Servicer may rely on such Appraisal or internal
valuation and shall have no duty to prepare a new Appraisal or internal
valuation, unless such reliance would not be in accordance with the Servicing
Standard. Such Appraisal or internal valuation shall be conducted in accordance
with USPAP and shall be updated at least annually to the extent such REMIC
Mortgage Loan remains a Required Appraisal Loan. The cost of any such Appraisal,
if not performed by the Special Servicer, shall be an expense of the Trust and
may be paid from REO Income or treated as an Additional Trust Expense. The
Master Servicer,
-85-
<PAGE>
based on the Appraisal or internal valuation provided to it by the Special
Servicer, shall calculate any Appraisal Reduction. The Master Servicer shall
calculate or recalculate the Appraisal Reduction for any REMIC Mortgage Loan
based on updated Appraisals or internal valuations provided to it from time to
time by the Special Servicer.
Section 6.7 Compliance with Withholding Requirements. Notwithstanding any
other provision of this Agreement to the contrary, the Trustee shall comply with
all federal withholding requirements with respect to payments to
Certificateholders of interest, original issue discount, or other amounts that
the Trustee reasonably believes are subject to tax withholding under the Code.
The consent of Certificateholders shall not be required for any such
withholding. In the event the Trustee withholds any amount from payments made to
any Certificateholder pursuant to federal withholding requirements, the Trustee
shall indicate to such Certificateholder the amount withheld.
ARTICLE VII
CONCERNING THE TRUSTEE
Section 7.1 Duties of Trustee.
(a) The Trustee undertakes to perform only those duties as are specifically
set forth in this Agreement and no implied covenants or obligations shall be
read into this Agreement against the Trustee. Any permissive right of the
Trustee provided for in this Agreement shall not be construed as a duty of the
Trustee. Subject to Section 7.1(c)(vi), if an Event of Default occurs and is
continuing, then, the Trustee shall exercise such of the rights and powers
vested in it by this Agreement and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they on
their face conform to the requirements of this Agreement (to the extent such
requirements are set forth herein); provided that the Trustee shall not be
responsible for the accuracy or content of any such resolution, certificate,
statement, opinion, report, document, order or other instrument furnished by the
Master Servicer or any other Person to the Trustee pursuant to this Agreement.
If any such instrument is found on its face not to conform to the requirements
of this Agreement, the Trustee shall take such action as it deems appropriate to
have the instrument corrected, and if the instrument is not corrected to the
Trustee's reasonable satisfaction, the Trustee will provide notice thereof to
the Certificateholders.
(c) No provision of this Agreement shall be construed to relieve the
Trustee or any of its respective directors, officers, employees, agents or
Controlling Persons from liability for their own negligent action, their own
negligent failure to act or their own willful misconduct; provided that:
(i) Neither the Trustee nor any of its respective directors, officers,
employees, agents or Controlling Persons shall be personally liable with
respect to any action taken, suffered or omitted to be taken by it (A) in
its reasonable business judgment in
-86-
<PAGE>
accordance with this Agreement or (B) at the direction of Holders of
Certificates entitled to not less than a majority of the Voting Rights;
(ii) No provision of this Agreement shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it;
(iii) None of the Trustee or any of its respective directors,
officers, employees, agents or Controlling Persons shall be responsible for
any act or omission of the Master Servicer, the Special Servicer, the
Depositor or any Seller, including, without limitation, actions taken
pursuant to this Agreement, except to the extent the Trustee is acting as
Master Servicer or Special Servicer;
(iv) The Trustee shall be under no obligation to appear in, prosecute
or defend any legal action which is not incidental to its duties as
Trustee, in accordance with this Agreement. In such event, all legal
expenses and costs of such action shall be expenses and costs of the Trust
and the Trustee shall be entitled to be reimbursed therefor from the
Collection Account pursuant to Section 5.2(b); and
(v) The Trustee shall not be charged with knowledge of any failure by
the Master Servicer or the Special Servicer to comply with their respective
obligations under this Agreement or any act, failure, or breach of any
Person upon the occurrence of which the Trustee may be required to act,
except to the extent the Trustee is acting as Master Servicer or Special
Servicer, or unless a Responsible Officer of the Trustee obtains actual
knowledge of such failure.
Section 7.2 Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 7.1:
(i) The Trustee may request, and may rely and shall be protected in
acting or refraining from acting upon any resolution, Officer's
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(ii) The Trustee may consult with counsel and the advice of such
counsel and any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such advice or Opinion of
Counsel;
(iii) Neither the Trustee nor any of its respective directors,
officers, employees, agents or Controlling Persons shall be personally
liable for any action taken, suffered or omitted by the Trustee in its
reasonable business judgment and reasonably believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Agreement;
-87-
<PAGE>
(iv) The Trustee (in its capacity as such) shall be under no
obligation to exercise any of the powers vested in it by this Agreement or
to institute, conduct or defend any litigation hereunder or relating hereto
or make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document
(provided the same appears regular on its face), unless requested in
writing to do so by Holders of Certificates entitled to at least 25% of the
Voting Rights; provided that, if the payment within a reasonable time to
the Trustee of the costs, expenses or liabilities likely to be incurred by
it in connection with the foregoing 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 or payment of such estimated expenses as
a condition to proceeding. The Trustee's reasonable expenses shall be paid
by the Certificateholders making such request;
(v) 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, which agents or attorneys shall have any or all of the rights,
powers, duties and obligations of the Trustee conferred on them by such
appointment; provided that the Trustee shall continue to be responsible for
its duties and obligations hereunder and shall not be liable for the
actions or omissions of the Master Servicer, the Special Servicer or the
Depositor;
(vi) The Trustee shall in no event be required to obtain a deficiency
judgment against a Mortgagor;
(vii) The Trustee shall not be required to expend its own funds or
otherwise incur any financial liability in the performance of any of its
duties hereunder (unless otherwise expressly required herein to do so) if
it shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such liability is not assured to it;
(viii) The Trustee shall not be responsible for, or liable for any
loss on, any investment of funds pursuant to this Agreement; provided,
however, that this provision shall not operate to forgive the Trustee, in
its individual capacity, for a liability that it may have for any
investment loss incurred on such investment; and
(ix) unless otherwise specifically required by law, the Trustee shall
not be required to post any surety or bond of any kind in connection with
the execution or performance of its duties hereunder.
(b) Following the Closing Date, the Trustee shall not accept any
contribution of assets to the Trust not specifically contemplated by this
Agreement unless with respect to such contribution the Trustee shall have
received a Nondisqualification Opinion at the expense of the Person desiring to
contribute such assets.
(c) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
the proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of this Agreement.
-88-
<PAGE>
Section 7.3 Trustee Not Liable for Certificates or Interests or Mortgage
Loans. The Trustee makes no representations as to the validity or sufficiency of
this Agreement (other than the certificate of authentication on the
Certificates) or of any Mortgage Loan, Assignment of Mortgage or related
document. The Trustee shall not be accountable for the use or application by the
Depositor or the Master Servicer or the Special Servicer of any of the
Certificates or any of the proceeds of such Certificates, or for the use or
application by the Depositor or the Master Servicer or the Special Servicer of
funds paid in consideration of the assignment of the Mortgage Loans to the Trust
or deposited into the Distribution Account or any other fund or account
maintained with respect to the Certificates or any account maintained pursuant
to this Agreement or for investment of any such amounts. The Trustee shall not
at any time have any responsibility or liability for or with respect to the
legality, validity or enforceability of the Mortgages or the Mortgage Loans, or
the perfection and priority of the Mortgages or, except as provided in Section
2.1(c), the maintenance of any such perfection and priority, or for or with
respect to the efficacy of the Trust or its ability to generate the payments to
be distributed to Certificateholders under this Agreement, including, without
limitation, the existence, condition and ownership of any Mortgaged Property;
the existence and enforceability of any hazard insurance thereon; the validity
of the assignment of the Mortgage Loans to the Trust or of any intervening
assignment; the completeness of the Mortgage Loans; the performance or
enforcement of the Mortgage Loans (other than if the Trustee shall assume the
duties of the Master Servicer or the Special Servicer); any investment of monies
by the Master Servicer or the Special Servicer or any loss resulting therefrom;
the failure of the Master Servicer or any Sub-Servicer or the Special Servicer
to act or perform any duties required of it on behalf of the Trustee hereunder;
or any action by the Trustee taken at the instruction of the Master Servicer or
the Special Servicer.
Section 7.4 Trustee May Own Certificates. The Trustee and any agent of the
Trustee in its individual or any other capacity may become the owner or pledgee
of Certificates with the same rights it would have if it were not the Trustee or
such agent.
Section 7.5 Eligibility Requirements for Trustee. The Trustee hereunder
shall at all times be (i) an institution insured by the FDIC, (ii) a
corporation, authorized to exercise corporate trust powers, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by federal or state authority, and (iii) an institution with a
long-term credit rating such that shall not result in the qualification,
downgrading or withdrawal of the rating or ratings assigned to one or more Class
of the Certificates by either of the Rating Agencies (or, if the Trustee has a
related fiscal agent that becomes obligated under this Agreement to make
Advances in the event the Trustee fails to make any required Advances, then such
fiscal agent shall be an institution with a long-term credit rating such that
shall not result in the qualification, downgrading or withdrawal of the rating
or ratings assigned to one or more Class of the Certificates by either of the
Rating Agencies). If such corporation, national bank or national banking
association publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then,
for the purposes of this Section, the combined capital and surplus of such
corporation, national bank or national banking association shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Trustee shall cease to be
eligible in accordance with provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect specified in Section 7.6.
-89-
<PAGE>
Section 7.6 Resignation and Removal of Trustee.
(a) The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Depositor, the Master
Servicer and the Rating Agencies; provided that such resignation shall not be
effective until its successor shall have accepted the appointment and Rating
Agency Confirmation shall have been obtained with respect to such appointment.
Upon receiving such notice of resignation, the Depositor will promptly appoint a
successor trustee, by written instrument, one copy of which instrument shall be
delivered to the resigning Trustee, one copy to the successor trustee and one
copy to each of the Master Servicer and the Rating Agencies. If no successor
trustee shall have been so appointed and shall have accepted appointment within
30 days after the giving of such notice of resignation, the resigning Trustee
may petition any court of competent jurisdiction for the appointment of a
successor trustee.
(b) If at any time (i) the Trustee shall cease to be eligible in accordance
with the provisions of Section 7.5 and shall fail to resign after written
request therefor by the Depositor, (ii) the Trustee shall become incapable of
acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation, (iii) a tax is imposed or
threatened with respect to the Trust or any REMIC Pool by any state in which the
Trustee or the Trust held by the Trustee is located; provided, however, that, if
the Trustee agrees to indemnify the Trust and hold the Trust harmless on an
after-tax basis for such taxes, it shall not be removed pursuant to this clause
(iii), or (iv) the continuation of the Trustee as such would result in a
downgrade, qualification or withdrawal of the rating by the Rating Agencies of
any Class of Certificates with a rating as evidenced in writing by the Rating
Agencies, then the Depositor may remove such Trustee and appoint a successor
trustee by written instrument, one copy of which instrument shall be delivered
to the Trustee so removed, one copy to the successor trustee and one copy to
each of the Master Servicer and the Rating Agencies. In the case of removal
under clauses (i), (ii), (iii) and (iv) above, the Trustee shall bear all such
costs of transfer. Such succession shall take effect after a successor trustee
has been appointed.
(c) [reserved]
(d) The Holders of Certificates entitled to at least 51% of the Voting
Rights may without cause upon 30 days' written notice to the Trustee and to the
Depositor remove the Trustee by such written instrument, signed by such Holders
or their attorney-in-fact duly authorized, one copy of which instrument shall be
delivered to the Depositor and one copy to the Trustee so removed; the Depositor
shall thereupon use its best efforts to appoint a successor Trustee in
accordance with this Section. The Certificateholders effecting such transfer
shall be responsible for the reasonable out-of-pocket costs of transferring the
Mortgage Files to the successor trustee.
(e) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 7.7. Upon any succession of the Trustee under this Agreement, the
predecessor Trustee shall be entitled to the payment of compensation and
reimbursement agreed to under this Agreement for services rendered and expenses
incurred (including without limitation unreimbursed Advances made thereby, with
any related unpaid Advance Interest accrued on such Advances) at such times and
from such sources as if the predecessor Trustee had not resigned or been
removed. The Trustee shall not be liable for any action or omission of any
successor Trustee. The costs of the transfer of all Mortgage Files, Servicing
Files and other
-90-
<PAGE>
documents held in trust by the Trustee hereunder to any successor trustee shall
be borne by the Trustee resigning or removed pursuant to this Section.
Section 7.7 Successor Trustee.
(a) Any successor Trustee appointed as provided in Section 7.6 shall
execute, acknowledge and deliver to the Depositor and to its predecessor Trustee
an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor Trustee 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 like effect as if originally named as Trustee
herein. The predecessor Trustee shall deliver to the successor Trustee all
Mortgage Files and documents and statements related to the Mortgage Files held
by it hereunder, and shall duly assign, transfer, deliver and pay over to the
successor Trustee the entire Trust, together with all instruments of transfer
and assignment or other documents properly executed necessary to effect such
transfer and such records or copies thereof maintained by the predecessor
Trustee in the administration hereof as may be reasonably requested by the
successor Trustee and shall thereupon be discharged from all duties and
responsibilities under this Agreement. In addition, the Depositor and the
predecessor Trustee shall execute and deliver such other instruments and do such
other things as may reasonably be required to more fully and certainly vest and
confirm in the successor Trustee all such rights, powers, duties and
obligations. Anything herein to the contrary notwithstanding, in no event shall
the combined fees payable to a successor Trustee exceed the Trustee Fee.
(b) No successor Trustee shall accept appointment as provided in this
Section unless at the time of such appointment such successor Trustee shall be
eligible under the provisions of Section 7.5.
(c) Upon acceptance of appointment by a successor Trustee as provided in
this Section, the successor Trustee shall mail notice of the succession of such
Trustee hereunder to all Holders of Certificates at their addresses as shown in
the Certificate Register and to the Rating Agencies (evidence of such mailing to
be provided to the Depositor and the Master Servicer). The expenses of such
mailing shall be borne by the successor Trustee.
Section 7.8 Merger or Consolidation of Trustee. Any Person into which the
Trustee may be merged or converted or with which it may be consolidated, or any
Person resulting from any merger, conversion or consolidation to which such
Trustee shall be a party, or any Persons succeeding to the business of such
Trustee, shall be the successor of such Trustee hereunder, provided that such
Person shall be eligible under the provisions of Section 7.5, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
Section 7.9 Appointment of Co-Trustee, Separate Trustee or Custodian.
(a) Notwithstanding any other provisions hereof, at any time, the Trustee,
the Depositor or, in the case of the Trust, the Certificateholders entitled to
more than 50% of the Voting Rights shall each have the power from time to time
to appoint one or more Persons to act either as co-trustees jointly with the
Trustee or as separate trustees, or as custodians, for the purpose of holding
title to, foreclosing or otherwise taking action with respect to any Mortgage
Loan outside the state where the Trustee has its principal place of business
where such separate trustee or co-
-91-
<PAGE>
trustee is necessary or advisable (or the Trustee is advised by the Master
Servicer or Special Servicer that such separate trustee or co-trustee is
necessary or advisable) under the laws of any state in which a property securing
a Mortgage Loan is located or for the purpose of otherwise conforming to any
legal requirement, restriction or condition in any state in which a property
securing a Mortgage Loan is located or in any state in which any portion of the
Trust is located. The separate trustees, co-trustees, or custodians so appointed
shall be trustees or custodians for the benefit of all the Certificateholders,
shall have such powers, rights and remedies as shall be specified in the
instrument of appointment and shall be deemed to have accepted the provision of
this Agreement; provided that no such appointment shall, or shall be deemed to,
constitute the appointee an agent of the Trustee; provided, further that the
Trustee shall not be liable for the actions of any co-trustee or separate
trustee not appointed by it.
(b) Every separate trustee, co-trustee, and custodian shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all powers, duties, obligations and rights conferred upon the
Trustee in respect of the receipt, custody and payment of moneys shall be
exercised solely by the Trustee;
(ii) all other rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised
or performed by the Trustee and such separate trustee, co-trustee, or
custodian jointly, except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Master Servicer
hereunder) the Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations,
including the holding of title to the Trust or any portion thereof in any
such jurisdiction, shall be exercised and performed by such separate
trustee, co-trustee, or custodian;
(iii) no trustee or custodian hereunder shall be personally liable by
reason of any act or omission of any other trustee or custodian hereunder;
and
(iv) the Trustee or, in the case of the Trust, the Certificateholders
entitled to more than 50% of the Voting Rights outstanding may at any time
accept the resignation of or remove any separate trustee, co-trustee or
custodian, so appointed by it or them, if such resignation or removal does
not violate the other terms of this Agreement.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee, co-trustee or custodian shall refer to this Agreement and the
conditions of this Article VII. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Trustee or
separately, as may be provided therein, subject to all the provisions of this
Agreement, specifically including every provision of this Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Trustee. Every such instrument shall be filed with the Trustee.
(d) Any separate trustee, co-trustee or custodian may, at any time,
constitute the Trustee its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by
-92-
<PAGE>
law, to do any lawful act under or in respect of this Agreement on its behalf
and in its name. If any separate trustee, co-trustee or custodian shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
(e) No separate trustee, co-trustee or custodian hereunder shall be
required to meet the terms of eligibility as a successor trustee under section
7.5 hereof and no notice to Certificateholders of the appointment of any
separate trustee, co-trustee or custodian hereunder shall be required.
(f) The Trustee agrees to instruct the co-trustees, if any, to the extent
necessary to fulfill the Trustee's obligations hereunder.
(g) The Trustee shall pay the reasonable compensation of any co-trustees,
separate trustees or custodians appointed by it pursuant to this Section 7.9 to
the extent, and in accordance with the standards, specified in Section 7.12
hereof.
(h) Subject to the consent of the Depositor, which consent shall not be
unreasonably withheld, the Trustee may appoint at any time a custodian to hold
some or all of the Mortgage Files; provided that Rating Agency Confirmation is
obtained with respect to such appointee. Upon the appointment of a Custodian,
the Trustee and the Custodian shall enter into a custodial agreement.
Section 7.10 Authenticating Agents.
(a) The Trustee may appoint one or more Authenticating Agents which shall
be authorized to act on behalf of the Trustee in executing and authenticating
Certificates. Wherever reference is made in this Agreement to the execution and
authentication of Certificates by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include execution and
authentication on behalf of the Trustee by an Authenticating Agent and a
certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent must be acceptable to the
Depositor and must be a corporation organized and doing business under the laws
of the United States of America or of any state and having a principal office
and place of business in the Borough of Manhattan, the City and State of New
York or in the Commonwealth of Massachusetts, having a combined capital and
surplus of at least $50,000,000, authorized under such laws to do a trust
business and subject to supervision or examination by federal or state
authorities. The Trustee initially shall be the Authenticating Agent hereunder.
(b) Any Person into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which any Authenticating Agent shall be a
party, or any Person succeeding to the corporate agency business of any
Authenticating Agent, shall continue to be the Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
(c) Any Authenticating Agent may at any time resign by giving at least 30
days' advance written notice of resignation to the Trustee and the Depositor.
The Trustee may at any time terminate the agency of any Authenticating Agent by
giving written notice of termination to such Authenticating Agent and the
Depositor. Upon receiving a notice of resignation or upon such a
-93-
<PAGE>
termination, or in case at any time any Authenticating Agent shall cease to be
eligible in accordance with the provisions of Section 7.10(a), the Trustee may
appoint a successor Authenticating Agent, shall give written notice of such
appointment to the Depositor and shall mail notice of such appointment to all
Holders of Certificates. Any successor Authenticating Agent upon acceptance of
its appointment hereunder shall become vested with all the rights, powers,
duties and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent. No such Authenticating Agent shall be
appointed unless eligible under the provisions of Section 7.10(a). No
Authenticating Agent shall have responsibility or liability for any action taken
by it as such at the direction of the Trustee.
Section 7.11 Indemnification of Trustee.
The Trustee and each of its directors, officers, employees, agents and
Controlling Persons shall be entitled to indemnification from the Trust for any
and all claims, losses, penalties, fines, forfeitures, legal fees and related
costs, judgments and any other costs, liabilities, fees and expenses not
expressly required hereby to be borne by the Trustee and incurred without
negligence or willful misconduct on their part, arising out of, or in connection
with this Agreement, the Certificates and the acceptance or administration of
the trusts created hereunder (including, without limitation, any unanticipated
loss, liability or expense incurred in connection with any action or inaction of
the Master Servicer, the Special Servicer or the Depositor hereunder, except to
the extent that the Trustee is acting as Master Servicer or Special Servicer),
including the reasonable costs and expenses of defending themselves against any
claim in connection with the exercise or performance of any of their powers or
duties hereunder and the Trustee and each of its directors, officers, employees,
agents and Controlling Persons shall be entitled to indemnification from the
Trust for any unanticipated loss, liability or expense incurred in connection
with the provision by the Trustee of any report required to be provided by the
Trustee pursuant to this Agreement; provided that, in connection with any
third-party claim or legal action:
(i) with respect to any such claim, the Trustee shall have given the
Depositor and the Holders of the Certificates written notice thereof
promptly after the Trustee shall have knowledge thereof; provided, however
that failure to give such notice to the Depositor and the Holders of
Certificates shall not affect the Trustee's rights to indemnification
herein unless the Depositor's defense of such claim is materially
prejudiced thereby;
(ii) while maintaining control over its own defense, the Trustee shall
cooperate and consult fully with the Depositor in preparing such defense;
and
(iii) notwithstanding anything to the contrary in this Section 7.11,
the Trust shall not be liable for settlement of any such claim by the
Trustee entered into without the prior consent of the Depositor, which
consent shall not be unreasonably withheld.
The provisions of this Section 7.11 shall survive any termination of this
Agreement and the resignation or removal of the Trustee.
-94-
<PAGE>
Section 7.12 Fees and Expenses of Trustee. Monthly, the Trustee shall be
entitled to receive, and the Master Servicer shall be obligated to pay out of
its Master Servicing Fees, the Trustee Fee (which shall not be limited by any
provision of law with respect to the compensation of a trustee of an express
trust), for all services rendered by it in the execution of the trusts hereby
created and in the exercise and performance of any of the powers and duties
hereunder of the Trustee. On or before the Master Servicer Remittance Date in
each month (commencing in January 1998), in satisfaction of such obligation of
the Master Servicer, the Master Servicer shall, pursuant to Section 5.2(a),
remit to the Trustee for deposit in the Distribution Account that portion of its
Master Servicing Fees then on deposit in the Collection Account that are
allocable to cover the Trustee Fees, and the Trustee shall be entitled to
withdraw such portion of the Master Servicing Fees from the Distribution Account
to pay itself its unpaid Trustee Fees. The Trustee shall also be entitled to
recover from the Trust all reasonable unanticipated expenses and disbursements
incurred or made by the Trustee in accordance with any of the provisions of this
Agreement (including the reasonable compensation and the reasonable expenses and
disbursements of its outside counsel and other Persons not regularly in its
employ), not including expenses incurred in the ordinary course of performing
its duties as Trustee hereunder, and except any such expense, disbursement or
advance as may arise from its negligence or bad faith or which is the
responsibility of the Holders of the Certificates hereunder. The provisions of
this Section 7.12 shall survive any termination of this Agreement and the
resignation or removal of the Trustee.
Section 7.13 Collection of Moneys. Except as otherwise expressly provided
in this Agreement, the Trustee may demand payment or delivery of, and shall
receive and collect, all money and other property payable to or receivable by
the Trustee pursuant to this Agreement. The Trustee shall hold all such money
and property received by it as part of the Trust and shall distribute it as
provided in this Agreement. If the Trustee shall not have timely received
amounts to be remitted with respect to the Mortgage Loans from the Master
Servicer, the Trustee shall request the Master Servicer to make such
distribution as promptly as practicable or legally permitted. If the Trustee
shall subsequently receive any such amount, it may withdraw such request.
Section 7.14 Notification to Holders. Upon termination of the Master
Servicer or appointment of a successor to the Master Servicer, the Trustee shall
promptly mail notice thereof by first class mail to the Rating Agencies and the
Certificateholders at their respective addresses appearing on the Certificate
Register.
Section 7.15 Representations and Warranties of the Trustee.
The Trustee hereby represents and warrants as of the Closing Date that:
(a) The Trustee is a Massachusetts trust company, duly organized,
validly existing and in good standing under the laws governing its creation
and existence and has full corporate power and authority to own its
property, to carry on its business as presently conducted, and to enter
into and perform its obligations under this Agreement;
(b) The execution and delivery by the Trustee of this Agreement have
been duly authorized by all necessary corporate action on the part of the
Trustee; neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated in this Agreement, nor
compliance with the provisions of this Agreement, will conflict with or
result in a breach of, or constitute a default under, (A) any of the
provisions of any law, governmental rule, regulation, judgment, decrees or
order binding on the Trustee
-95-
<PAGE>
or its properties that would materially and adversely affect the Trustee's
ability to perform its obligations under this Agreement, (B) the
organizational documents of the Trustee, or (C) the terms of any material
agreement or instrument to which the Trustee is a party or by which it is
bound; the Trustee is not in default with respect to any order or decree of
any court or any order, regulation or demand of any federal, state,
municipal or other governmental agency, which default would materially and
adversely affect its performance under this Agreement;
(c) The execution, delivery and performance by the Trustee of this
Agreement and the consummation of the transactions contemplated by this
Agreement do not require the consent, approval, authorization or order of,
the giving of notice to or the registration with any state, federal or
other governmental authority or agency, except such as has been or will be
obtained, given, effected or taken in order for the Trustee to perform its
obligations under this Agreement;
(d) This Agreement has been duly executed and delivered by the Trustee
and, assuming due authorization, execution and delivery by the other
parties hereto, constitutes a valid and binding obligation of the Trustee,
enforceable against the Trustee in accordance with its terms, subject, as
to enforcement of remedies, (A) to applicable bankruptcy, reorganization,
insolvency, moratorium and other similar laws affecting creditors' rights
generally as from time to time in effect, (B) to general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law) and (C) public policy considerations
underlying the securities laws to the extent that such considerations limit
the enforceability of the provisions of this Agreement that purport to
provide for indemnification for securities law violations; and
(e) No litigation is pending or, to the best of the Trustee's
knowledge, threatened, against the Trustee that, either in one instance or
in the aggregate, would draw into question the validity of this Agreement,
or the outcome of which could reasonably be expected to materially and
adversely affect the execution, delivery and performance by, or the
enforceability against, the Trustee of this Agreement or the ability of the
Trustee to perform under the terms of this Agreement.
ARTICLE VIII
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 8.1 Servicing Standard; General Powers and Duties.
(a) Each of the Master Servicer and the Special Servicer shall service and
administer the Mortgage Loans and other assets of the Trust that it is obligated
to service and administer pursuant to this Agreement on behalf of the Trustee
and in the best interests of and for the benefit of the Certificateholders (as
determined by the Master Servicer or the Special Servicer, as the case may be,
in its good faith and reasonable judgment), in accordance with applicable law,
the terms of this Agreement and the terms of the respective Mortgage Loans and,
to the extent consistent with the foregoing, further as follows: (i) with the
same care, skill and diligence as is normal and usual in its general mortgage
servicing and REO property management activities on behalf of third parties or
on behalf of itself, whichever is higher, with respect to mortgage loans and
-96-
<PAGE>
REO properties that are comparable to those for which it is responsible
hereunder; (ii) with a view to the timely collection of all scheduled payments
of principal and interest under the Mortgage Loans or, if a Mortgage Loan comes
into and continues in default and if, in the good faith and reasonable judgment
of the Special Servicer, no satisfactory arrangements can be made for the
collection of the delinquent payments, the maximization of the recovery on such
Mortgage Loan to the Certificateholders (as a collective whole) on a present
value basis (the relevant discounting of anticipated collections that will be
distributable to Certificateholders to be performed at the related Net Mortgage
Rate); and (iii) without regard to (A) any relationship that the Master Servicer
or the Special Servicer, as the case may be, or any Affiliate thereof may have
with the related Mortgagor, (B) the ownership of any Certificate by the Master
Servicer or the Special Servicer, as the case may be, or by any Affiliate
thereof, (C) the Master Servicer's obligation to make Advances, (D) the Special
Servicer's obligation to direct the Master Servicer to make Servicing Advances,
(E) the right of the Master Servicer (or any Affiliate thereof) or the Special
Servicer (or any Affiliate thereof), as the case may be, to receive
reimbursement of costs, or the sufficiency of any compensation payable to it,
hereunder or with respect to any particular transaction, and (F) without regard
to the existence of any related Mortgagor (the conditions set forth in the
immediately foregoing clauses (i), (ii) and (iii), the "Servicing Standard").
Without limiting the generality of the foregoing, each of the Master Servicer
and the Special Servicer, in its own name, in connection with its servicing and
administrative duties hereunder is hereby authorized and empowered by the
Trustee to exercise efforts consistent with the foregoing standard and to
execute and deliver, on behalf of the Certificateholders and the Trustee or any
of them, any and all financing statements, continuation statements and other
documents or instruments necessary to maintain the lien created by any Mortgage
or other security document in the related Mortgage File on the related Mortgaged
Property and related collateral; subject to Section 8.18, any and all
modifications, waivers, amendments or consents to or with respect to any
documents contained in the related Mortgage File; and any and all instruments of
satisfaction or cancellation, or of full release or discharge, and all other
comparable instruments, with respect to the Mortgage Loans and the Mortgaged
Properties. Each of the Master Servicer and the Special Servicer is also
authorized to approve a request by a Mortgagor under a Mortgage Loan that it is
obligated to service and administer pursuant to this Agreement, for an easement,
consent to alteration or demolition, and for other similar matters, provided
that the Master Servicer or the Special Servicer, as the case may be,
determines, exercising its good faith business judgment in the same manner as it
would if it were the owner of the related Mortgage Loan, that such approval will
not affect the security for, or the timely and full collectability of, the
related Mortgage Loan. Subject to Section 8.8, the Trustee shall furnish, or
cause to be furnished, to the Master Servicer and the Special Servicer any
powers of attorney and other documents necessary or appropriate to enable the
Master Servicer or the Special Servicer, as the case may be, to carry out its
servicing and administrative duties hereunder; provided, however, that the
Trustee shall not be held liable for any negligence with respect to, or misuse
of, any such power of attorney by the Master Servicer or the Special Servicer,
as the case may be.
(b) Except as otherwise expressly set forth herein with respect to specific
duties, the Master Servicer shall be responsible for the servicing and
administration of all the Mortgage Loans other than Specially Serviced Mortgage
Loans and REO Mortgage Loans, and the Special Servicer shall be responsible for
the servicing and administration of Specially Serviced Mortgage Loans and REO
Properties. Subject to Section 8.1(a), the Master Servicer and the Special
Servicer shall each have full power and authority, acting alone or, subject to
Section 8.4, through Sub-Servicers, to do or cause to be done any and all things
in connection with such servicing and administration which it may deem necessary
or desirable.
-97-
<PAGE>
(c) Upon determining that a Servicing Transfer Event has occurred with
respect to any Mortgage Loan and if the Master Servicer is not also the Special
Servicer, the Master Servicer shall promptly give notice thereof, and deliver
the related Servicing File, to the Special Servicer and shall use reasonable
efforts to provide the Special Servicer with all information, documents (or
copies thereof) and records (including records stored electronically on computer
tapes, magnetic discs and the like) relating to the Mortgage Loan and reasonably
requested by the Special Servicer to enable it to assume its functions hereunder
with respect thereto without acting through a Sub-Servicer. The Master Servicer
shall use reasonable efforts to comply with the preceding sentence within five
Business Days of the occurrence of each related Servicing Transfer Event. The
Special Servicer may, as to any delinquent Mortgage Loan, prior to the
occurrence of a Servicing Transfer Event with respect thereto, upon reasonable
request, obtain the foregoing documents and information.
Upon determining that a Specially Serviced Mortgage Loan has become a
Corrected Mortgage Loan and if the Master Servicer is not also the Special
Servicer, the Special Servicer shall promptly give notice thereof, and return
the related Servicing File, to the Master Servicer, the Special Servicer's
obligation to service such Mortgage Loan, and the Special Servicer's right to
receive the Special Servicing Fee with respect to such Mortgage Loan, shall
terminate, and the obligations of the Master Servicer to service and administer
such Mortgage Loan in accordance with this Agreement shall resume.
Subject to Section 8.1(g), but notwithstanding other provisions in this
Agreement to the contrary, the Master Servicer shall remain responsible for the
billing, receiving payments (including amounts collected by the Special
Servicer), accounting, data collection, reporting and other basic Master
Servicer administrative functions with respect to Specially Serviced Mortgage
Loans, provided that the Special Servicer shall administer the REO Accounts,
provide asset management in respect of any REO Property and shall establish
procedures for the Master Servicer as to the application of receipts and
tendered payments and shall have the exclusive responsibility for and authority
over all contacts with and notices to Mortgagors and similar matters relating to
each Specially Serviced Mortgage Loan and the related Mortgaged Property.
(d) The Master Servicer and Special Servicer will each be required to
service and administer each of the respective groups of Cross-Collateralized
Mortgage Loans as a single Mortgage Loan as and when it deems necessary and
appropriate, consistent with the Servicing Standard. If any Cross-Collateralized
Mortgage Loan becomes a Specially Serviced Mortgage Loan, then each other
Mortgage Loan with which it is cross-collateralized shall also become a
Specially Serviced Mortgage Loan pursuant to the terms thereof. Similarly, no
Cross-Collateralized Mortgage Loan may subsequently become a Corrected Mortgage
Loan, unless and until all Servicing Transfer Events in respect of each other
Mortgage Loan with which it is cross-collateralized, are remediated or otherwise
addressed as contemplated above.
(e) Notwithstanding anything in this Agreement to the contrary, in the
event that the Master Servicer and the Special Servicer are the same Person, all
notices, certificates, information and consents required to be given by the
Master Servicer to the Special Servicer or vice versa shall be deemed to be
given without the necessity of any action on such Person's part.
(f) The relationship of each of the Master Servicer and the Special
Servicer to the Trustee and, unless the same Person acts in both capacities, to
each other under this Agreement is intended by the parties to be that of an
independent contractor and not of a joint venturer, partner or agent.
-98-
<PAGE>
(g) Notwithstanding the foregoing, and in addition to the servicing duties
specifically assigned to the Special Servicer hereunder with respect to
Specially Serviced Mortgage Loans, the Special Servicer shall, with respect to
the Mortgage Loans for which no Servicing Transfer Event has occurred, discharge
all asset management type functions, including the processing of requests for
assumptions, releases of collateral, reviews and approvals of leases, approvals
of subordinate financing and similar functions and administer on behalf of the
Trust Fund all litigation relating to the Mortgage Loans; provided, however,
that the Master Servicer shall remain responsible for certain extensions with
respect to Mortgage Loans that are not Specially Serviced Mortgage Loans as
provided in Section 8.18 hereof, management of escrow accounts, inspections,
collection of annual statements for Mortgage Loans that are not Specially
Serviced Mortgage Loans, and all bookkeeping functions with respect to all
Mortgage Loans, including calculations of debt service coverage ratios if
required hereunder.
In addition, the Special Servicer shall be required to administer in all
respects the Non-REMIC Assets, including all discussions and negotiations with
respect thereto. The accounting for the Mortgage Loans (except for REO Mortgage
Loans, which shall be the responsibility of the Special Servicer) and any
related escrow accounts shall not be the responsibility of the Special Servicer
but shall be the responsibility of the Master Servicer. The Special Servicer's
fee for administering the Non-REMIC Assets shall be payable from amounts on
deposit in the Non-REMIC Trust Collection Subaccount only, and may be withdrawn
therefrom by the Master Servicer for remittance to the Special Servicer prior to
transfer of any amounts on deposit therein to the Trustee for deposit in the
Non-REMIC Trust Distribution Subaccount. In no event shall any portion of the
Special Servicer's fee for administering any Non-REMIC Assets be paid from
amounts recovered in respect of REMIC Mortgage Loans that are properly allocable
to the REMIC Collection Subaccount.
Section 8.2 Collection of Mortgage Loan Payments.
(a) The Master Servicer (or the Special Servicer with respect to the
Specially Serviced Mortgage Loans) shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement,
follow such collection procedures as it would follow were it the owner of such
Mortgage Loans; provided, however, that nothing herein contained shall be
construed as an express or implied guarantee by the Master Servicer or the
Special Servicer of the collectability of the Mortgage Loans. Consistent with
the foregoing, the Master Servicer may in its discretion waive any Penalty
Charge in connection with any delinquent payment on a Mortgage Loan (other than
a Specially Serviced Mortgage Loan) and the Special Servicer may in its
discretion waive any Penalty Charge in connection with any delinquent payment on
a Specially Serviced Mortgage Loan.
(b) With respect to each Mortgage Loan, if required by the terms of the
related Mortgage, any Lock-Box Agreement or similar agreement, the Master
Servicer shall establish and maintain one or more accounts ("Lock-Box Accounts")
to be held outside the Trust and maintained by the Master Servicer in accordance
with the terms of the related Mortgage, any Lock-Box Agreement or similar
agreement. Subject to the terms of the related Mortgage, any Lock-Box Agreement
or similar agreement, Lock-Box Accounts shall be Eligible Accounts. The Master
Servicer shall apply the funds deposited in such accounts in accordance with the
terms of the related Mortgage, any Lock-Box Agreement and/or any similar
agreement and in accordance with the Servicing Standard.
-99-
<PAGE>
Section 8.3 Collection of Taxes, Assessments and Similar Items; Servicing
Accounts and Reserve Accounts.
(a) The Master Servicer shall establish and maintain one or more accounts
(the "Servicing Accounts"), into which all Escrow Payments shall be deposited
and retained. Subject to the terms of the related Mortgage Note and Mortgage,
Servicing Accounts shall be Eligible Accounts. Withdrawals of amounts so
collected in respect of any Mortgage Loan (and interest earned thereon) from a
Servicing Account may be made only to: (i) effect payment of real estate taxes,
assessments, insurance premiums, ground rents (if applicable) and comparable
items in respect of the related Mortgaged Property; (ii) reimburse the Master
Servicer or the Trustee, as applicable, for any unreimbursed Servicing Advances
made thereby to cover any of the items described in the immediately preceding
clause (i); (iii) refund to the related Mortgagor any sums as may be determined
to be overages; (iv) pay interest, if required and as described below, to the
related Mortgagor on balances in the Servicing Account (or, if and to the extent
not payable to the related Mortgagor, to pay such interest to the Master
Servicer); or (v) clear and terminate the Servicing Account at the termination
of this Agreement in accordance with Section 10.1. As part of its servicing
duties, the Master Servicer shall pay or cause to be paid to the Mortgagors
interest on funds in Servicing Accounts maintained thereby, to the extent
required by law or the terms of the related Mortgage Loan.
(b) The Master Servicer (with respect to Mortgage Loans other than REO
Mortgage Loans) and the Special Servicer (with respect to REO Mortgage Loans)
shall (i) maintain accurate records with respect to each related Mortgaged
Property reflecting the status of real estate taxes, assessments and other
similar items that are or may become a lien thereon and the status of insurance
premiums and any ground rents payable in respect thereof, and (ii) use
reasonable efforts to obtain, from time to time, all bills for the payment of
such items (including renewal premiums); and the Master Servicer shall effect
payment thereof (in the case of Specially Serviced Mortgage Loans, at the
direction of the Special Servicer) prior to the applicable penalty or
termination date, employing for such purpose Escrow Payments as allowed under
the terms of the related Mortgage Loan. To the extent that a Mortgage Loan does
not require a Mortgagor to escrow for the payment of real estate taxes,
assessments, insurance premiums, ground rents (if applicable) and similar items,
the Master Servicer (or the Special Servicer with respect to the Specially
Serviced Mortgaged Loans) shall use efforts consistent with the Servicing
Standard to cause the related Mortgagor to comply with the requirements of the
related Mortgage for payments in respect of such items at the time they first
become due.
(c) In accordance with the Servicing Standard, the Master Servicer (at the
direction of the Special Servicer in the case of Specially Serviced Mortgage
Loans) shall, subject to Section 4.4, advance with respect to each related
Mortgaged Property all such funds as are necessary for the purpose of effecting
the payment of (i) real estate taxes, assessments and other similar items that
are or may become a lien thereon, (ii) ground rents (if applicable), and (iii)
premiums on Insurance Policies, in each instance if and to the extent that
Escrow Payments, if any, collected from the related Mortgagor are insufficient
to pay such item when due and the related Mortgagor has failed to pay such item
on or before the applicable penalty or termination date, unless, with respect to
the payment of taxes and assessments, the Master Servicer reasonably anticipates
that such bill will be paid by the Mortgagor by the close of business on or
before the penalty date, but in any event the Master Servicer shall make such
advance within 90 days after such date or five Business Days after the Master
Servicer has received confirmation that such item has not been paid, whichever
is earlier, provided that during such 90-day period the Master Servicer shall
use its reasonable best
-100-
<PAGE>
efforts to confirm whether such bill has been paid. All such advances shall be
reimbursable in the first instance from related collections from the Mortgagors,
and further as provided in Section 5.2. No costs incurred by the Master Servicer
in effecting the payment of real estate taxes, assessments, ground rents (if
applicable) and other similar items on or in respect of the Mortgaged Properties
shall, for purposes of this Agreement (but not for purposes of determining the
contractual balance due from a Mortgagor and secured by the related Mortgage),
including, without limitation, calculating monthly distributions to
Certificateholders, be added to the unpaid principal balances of the related
Mortgage Loans, notwithstanding that the terms of such Mortgage Loans so permit.
(d) The Master Servicer shall establish and maintain, as applicable, one or
more accounts (the "Reserve Accounts"), into which all Reserve Funds, if any,
shall be deposited and retained. Withdrawals of amounts so deposited may be made
to pay for, or to reimburse the related Mortgagor in connection with, the
related repairs, environmental remediation, replacements, capital expenditures
or improvements and/or similar items at the related Mortgaged Property if such
repairs, environmental remediation, replacements, capital expenditures or
improvements and/or similar items have been completed, and such withdrawals are
made, in accordance with the Servicing Standard and the terms of the related
Mortgage Note, Mortgage and any agreement with the related Mortgagor governing
such Reserve Funds. Subject to the terms of the related Mortgage Note and
Mortgage, all Reserve Accounts shall be Eligible Accounts.
Section 8.4 Sub-Servicing Agreements.
(a) The Master Servicer and the Special Servicer may each enter into
Sub-Servicing Agreements for the servicing and administration of all or a part
of the Mortgage Loans for which it is responsible hereunder, provided that, in
each case, the Sub-Servicing Agreement: (i) is not inconsistent with this
Agreement and shall provide that the Sub-Servicer will maintain errors and
omissions insurance and fidelity bond coverage as required of the Master
Servicer or the Special Servicer (whichever retained it) under Section 8.5
hereof; (ii) provides that if the Master Servicer or the Special Servicer, as
the case may be, shall for any reason no longer be the Master Servicer or
Special Servicer, as applicable, hereunder (including, without limitation, by
reason of an Event of Default and its termination hereunder), the Trustee or its
designee may either thereupon assume all of the rights and, except to the extent
they arose prior to the date of assumption, obligations of the Master Servicer
or the Special Servicer, as the case may be, under such agreement or,
alternatively, may terminate such agreement without payment of any termination
fee or penalty out of the Trust; (iii) in the case of a Sub-Servicing Agreement
entered into by the Master Servicer, expressly or effectively provides that (if
the Master Servicer and the Special Servicer are not the same Person) such
agreement shall terminate with respect to any Mortgage Loan serviced thereunder
at the time such Mortgage Loan becomes a Specially Serviced Mortgage Loan
(provided that such agreement may provide that such Mortgage Loan may again be
serviced thereunder if it becomes a Corrected Mortgage Loan); and (iv) in the
case of a Sub-Servicing Agreement entered into by the Special Servicer, relates
only to Specially Serviced Mortgage Loans or REO Properties and expressly or
effectively provides that (if the Master Servicer and the Special Servicer are
not the same Person) such agreement shall terminate with respect to any such
Mortgage Loan that becomes a Corrected Mortgage Loan. References in this
Agreement to actions taken or to be taken by the Master Servicer or the Special
Servicer, as the case may be, include actions taken or to be taken by a
Sub-Servicer on behalf of the Master Servicer or the Special Servicer, as the
case may be; and, in connection therewith, all amounts advanced by any
Sub-Servicer to satisfy the obligations of the Master Servicer hereunder to make
Servicing Advances and P&I Advances shall be deemed to have been advanced by the
Master Servicer out of its own funds. For purposes of this Agreement, the Master
Servicer
-101-
<PAGE>
and the Special Servicer each shall be deemed to have received any payment when
the Sub-Servicer receives such payment. Annually, in connection with the
delivery of the Officer's Certificate contemplated in Section 8.12, the Master
Servicer and the Special Servicer each shall identify to the other, the Trustee
and the Depositor any Sub-Servicers then retained thereby.
(b) Each Sub-Servicer shall be authorized to transact business in the state
or states in which the Mortgaged Properties securing the Mortgage Loans it is to
service are situated, if and to the extent required by applicable law.
(c) As part of its servicing activities hereunder, the Master Servicer and
the Special Servicer, for the benefit of the Trustee and the Certificateholders,
shall (at no expense to the Trustee, the Certificateholders or the Trust Fund)
monitor the performance and enforce the obligations of each Sub-Servicer
retained by it under the related Sub-Servicing Agreement. Such enforcement,
including, without limitation, the legal prosecution of claims, termination of
Sub-Servicing Agreements in accordance with their respective terms and the
pursuit of other appropriate remedies, shall be in such form and carried out to
such an extent and at such time as the Master Servicer or the Special Servicer,
as the case may be, would require were it the owner of the Mortgage Loans.
Subject to the terms of the applicable Sub-Servicing Agreement, the Master
Servicer and the Special Servicer each shall have the right to remove a
Sub-Servicer retained by it at any time it considers such removal to be in the
best interests of Certificateholders.
(d) In the event the Trustee or its designee assumes the rights and
obligations of the Master Servicer or the Special Servicer under any
Sub-Servicing Agreement, the Master Servicer or the Special Servicer, as the
case may be, at its expense shall, upon request of the Trustee, deliver to the
assuming party all documents and records relating to such Sub-Servicing
Agreement and the Mortgage Loans then being serviced thereunder and an
accounting of amounts collected and held on behalf of it thereunder, and
otherwise use reasonable efforts to effect the orderly and efficient transfer of
the Sub-Servicing Agreement to the assuming party.
(e) Notwithstanding any Sub-Servicing Agreement, the Master Servicer and
the Special Servicer each shall remain obligated and liable to the Trustee and
the Certificateholders for the servicing and administration of the Mortgage
Loans in accordance with the provisions of this Agreement to the same extent and
under the same terms and conditions as if it alone were servicing and
administering the Mortgage Loans for which it is responsible.
Section 8.5 Maintenance of Insurance Policies; Errors and Omissions and
Fidelity Coverage.
(a) The Master Servicer shall use reasonable efforts to cause each
Mortgagor to maintain in respect of the related Mortgaged Property all insurance
coverage (other than earthquake insurance) as is required under the related
Mortgage; provided that if any Mortgage permits the holder thereof to dictate to
the Mortgagor the insurance coverage to be maintained on such Mortgaged
Property, the Master Servicer shall impose such insurance requirements as are
consistent with the Servicing Standard. If a Mortgagor fails to maintain such
insurance, the Master Servicer shall (to the extent available at commercially
reasonable rates and to the extent the Trustee, as Mortgagee, has an insurable
interest) obtain such insurance (which may be through a master or single
interest insurance policy), and the cost (including any deductible relating to
such insurance) of such insurance (or in the case of a master or single interest
insurance policy, the incremental cost (including any deductible relating to
such insurance) of such insurance relating to the specific
-102-
<PAGE>
Mortgaged Property), shall be a Servicing Advance recoverable by the Master
Servicer pursuant to Section 5.2. If at any time a Mortgaged Property is located
in an area identified in the Flood Hazard Boundary Map or Flood Insurance Rate
Map issued by the Federal Emergency Management Agency as having special flood
hazards or it becomes located in such area by virtue of remapping conducted by
such agency (and flood insurance has been made available), the Master Servicer
shall, if and to the extent that the Mortgage Loan requires the Mortgagor or
permits the Mortgagee to require the Mortgagor to do so, use efforts consistent
with the Servicing Standard to cause the related Mortgagor to maintain a flood
insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration in an amount representing coverage of not less
than the least of (i) the unpaid principal balance of the related Mortgage Loan,
(ii) the full insurable value of such Mortgaged Property, (iii) the maximum
amount of insurance coverage available under the National Flood Insurance Act or
1968, the Flood Disaster Protection Act of 1973 or the National Flood Insurance
Reform Act of 1994, as amended, and (iv) 100% of the replacement cost of the
improvements on such Mortgaged Property. If (i) the Mortgagor is required by the
terms of the Mortgage Loan to maintain such insurance (or becomes obligated by
virtue of the related Mortgaged Property becoming located in such area by virtue
of such remapping) or (ii) the terms of the Mortgage Loan permit the Mortgagee
to require the Mortgagor to obtain such insurance, the Master Servicer (or, in
the case of a Specially Serviced Mortgage Loan, the Special Servicer) shall
promptly notify the Mortgagor of its obligation to obtain such insurance. If the
Mortgagor fails to obtain such flood insurance within 120 days of such
notification, the Master Servicer (at the direction of the Special Servicer in
the case of a Specially Serviced Mortgage Loan) shall obtain such insurance (to
the extent available at commercially reasonable rates), and the cost of such
insurance shall be a Servicing Advance recoverable by the Master Servicer
pursuant to Section 5.2. The Special Servicer shall also cause to be maintained
for each REO Property no less insurance coverage than was previously required of
the Mortgagor under the related Mortgage. All such insurance policies shall
contain a "standard" mortgagee clause or shall identify the Trustee as the named
insured, as applicable, with any loss payable to the Master Servicer (in the
case of Mortgaged Properties) or the Special Servicer (in the case of REO
Properties) on behalf of the Trustee. Any amounts collected by the Master
Servicer or the Special Servicer under any such policies (other than amounts to
be applied to the restoration or repair of the related Mortgaged Property or REO
Property or amounts to be released to the related Mortgagor, in each case in
accordance with applicable law, the terms of the related Mortgage Loan documents
and the Servicing Standard) shall be deposited in the Collection Account,
subject to withdrawal pursuant to Section 5.2. Any cost incurred by the Master
Servicer in maintaining any such insurance shall not, for purposes hereof (but
not, for purposes of determining the contractual balance due from a Mortgagor
and secured by the related Mortgage), including, without limitation, calculating
monthly distributions to Certificateholders, be added to the outstanding
principal balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit.
(b) If the Master Servicer or the Special Servicer shall obtain and
maintain a blanket policy insuring against hazard losses on all of the Mortgaged
Properties and/or REO Properties for which it is responsible to cause the
maintenance of insurance hereunder, then, to the extent such policy provides
protection equivalent to the individual policies otherwise required, the Master
Servicer or the Special Servicer, as applicable, shall conclusively be deemed to
have satisfied its obligation to cause hazard insurance to be maintained on such
Mortgaged Properties and/or REO Properties. Such policy may contain a deductible
clause (not in excess of a customary amount), in which case the Master Servicer
or the Special Servicer, as applicable, shall, if there shall not have been
maintained on a Mortgaged Property or an REO Property a hazard insurance policy
complying with the requirements of Section 8.5(a), and there shall have been one
or more losses which would
-103-
<PAGE>
have been covered by such individual policy, promptly deposit into the
Collection Account from its own funds the amount of such loss or losses that
would have been covered under the individual policy but are not covered under
the blanket policy because of such deductible clause to the extent such
deductible exceeds the deductible limitation in respect of the related Mortgage
Loan. The Master Servicer agrees to prepare and present, on behalf of itself,
the Trustee and Certificateholders, claims under any such blanket policy
maintained by it in a timely fashion in accordance with the terms of such
policy.
(c) Each of the Master Servicer and the Special Servicer shall obtain and
maintain at its own expense and keep in full force and effect throughout the
term of this Agreement a blanket fidelity bond and an errors and omissions
insurance policy covering its officers and employees acting on behalf of it in
connection with its activities under this Agreement. The amount of coverage
shall be at least equal to the coverage that would be required by FNMA or FHLMC,
whichever is greater, with respect to the Master Servicer or Special Servicer,
as the case may be, if the Master Servicer or Special Servicer, as the case may
be, were servicing and administering the Mortgage Loans and/or REO Properties
for which it is responsible hereunder for FNMA or FHLMC. Coverage of the Master
Servicer or the Special Servicer under a policy or bond obtained by an Affiliate
of such Person and providing the coverage required by this Section 8.5(c) shall
satisfy the requirements of this Section 8.5(c).
(d) All insurance coverage required to be maintained by the Master Servicer
or the Special Servicer under this Section 8.5 shall be obtained from Qualified
Insurers (A) whose claims-paying ability is rated at least investment grade (or,
in the case of a blanket hazard policy obtained in accordance with Section
8.5(b), rated in one of the three highest ratings categories) by each Rating
Agency or, if such claims- paying ability is not rated by Fitch, by each of
Moody's and one other nationally recognized statistical rating organization or
(B) who are (as evidenced by the receipt of Rating Agency Confirmation)
otherwise acceptable to each Rating Agency or (C) whose claims paying ability is
rated at least A:IX by A.M. Best.
Section 8.6 Enforcement of Due-On-Sale Clauses; Assumption Agreements;
Subordinate Financing.
(a) If any Mortgage Loan which contains a provision in the nature of a
"due-on-sale" clause, which by its terms:
(i) provides that such Mortgage Loan shall (or may at the mortgagee's
option) become due and payable upon the sale or other transfer of an
interest in the related Mortgaged Property; or
(ii) provides that such Mortgage Loan may not be assumed without the
consent of the mortgagee in connection with any such sale or other
transfer,
then, for so long as such Mortgage Loan is included in the Trust Fund, the
Special Servicer, on behalf of the Trustee as the mortgagee of record, shall
exercise (or, subject to Section 8.18, waive its right to exercise) any right it
may have with respect to such Mortgage Loan (x) to accelerate the payments
thereon, or (y) to withhold its consent to any such sale or other transfer, in a
manner consistent with the Servicing Standard. In the event that the Special
Servicer intends or is required, in accordance with the preceding sentence, the
Mortgage Loan documents or applicable law, to permit the transfer of any
Mortgaged Property, the Special Servicer, if consistent with the Servicing
-104-
<PAGE>
Standard, may enter into a substitution of liability agreement, pursuant to
which the original Mortgagor and any original guarantors are released from
liability, and the transferee and any new guarantors are substituted therefor
and become liable under the Mortgage Note and any related guaranties and, in
connection therewith, may require from the related Mortgagor a reasonable and
customary fee for the additional services performed by it, together with
reimbursement for any related costs and expenses incurred by it (but only to the
extent that charging such fee will not be a significant modification of the
Mortgage Loan for purposes of the REMIC Provisions or result in an Adverse REMIC
Event in respect of any REMIC Pool). The Special Servicer shall promptly notify
the Trustee of any such agreement and forward the original thereof to the
Trustee for inclusion in the related Mortgage File.
(b) If any Mortgage Loan which contains a provision in the nature of a
"due-on-encumbrance" clause, which by its terms:
(i) provides that such Mortgage Loan shall (or may at the mortgagee's
option) become due and payable upon the creation of any additional lien or
other encumbrance on the related Mortgaged Property; or
(ii) requires the consent of the mortgagee to the creation of any such
additional lien or other encumbrance on the related Mortgaged Property,
then, for so long as such Mortgage Loan is included in the Trust Fund, the
Special Servicer, on behalf of the Trustee as the mortgagee of record, shall
exercise (or, subject to Section 8.18, waive its right to exercise) any right it
may have with respect to such Mortgage Loan (x) to accelerate the payments
thereon, or (y) to withhold its consent to the creation of any such additional
lien or other encumbrance, in a manner consistent with the Servicing Standard.
(c) Nothing in this Section 8.6 shall constitute a waiver of the Trustee's
right, as the mortgagee of record, to receive notice of any assumption of a
Mortgage Loan, any sale or other transfer of the related Mortgaged Property or
the creation of any additional lien or other encumbrance with respect to such
Mortgaged Property.
(d) Except as otherwise permitted by Section 8.18, the Special Servicer
shall not agree to modify, waive or amend any term of any Mortgage Loan in
connection with the taking of, or the failure to take, any action pursuant to
this Section 8.6.
Section 8.7 Realization Upon Defaulted Mortgage Loans.
(a) The Master Servicer shall notify the Special Servicer of the occurrence
of a Servicing Transfer Event in respect of any Mortgage Loan; and, subject to
Section 8.18, the Special Servicer shall monitor such Mortgage Loan, evaluate
whether the causes of any default thereunder can be corrected over a reasonable
period without significant impairment of the value of the related Mortgaged
Property, initiate corrective action in cooperation with the Mortgagor if, in
the Special Servicer's reasonable and good faith judgment, cure is likely, and
take such other actions as are consistent with the Servicing Standard. If, in
the Special Servicer's reasonable and good faith judgment, such corrective
action has been unsuccessful, no satisfactory arrangement can be made for
collection of delinquent payments and no other alternative consistent with the
Servicing Standard can be negotiated, and the defaulted Mortgage Loan has not
been released from the Trust Fund pursuant to any provision hereof, then the
Special Servicer shall, subject to subsections (b) through (d) of this
-105-
<PAGE>
Section 8.7, exercise reasonable efforts, consistent with the Servicing
Standard, to foreclose upon or otherwise comparably convert (which may include
an REO Acquisition) the ownership of property securing such Mortgage Loan. The
foregoing is subject to the provision that, in any case in which a Mortgaged
Property shall have suffered damage from an Uninsured Cause, the Special
Servicer shall have the right but not the obligation to expend its own funds
toward the restoration of such property if it shall determine in its reasonable
discretion (i) that such restoration will increase the net proceeds of
liquidation of such Mortgaged Property to Certificateholders after reimbursement
to itself for such expenses, and (ii) that such expenses will be recoverable as
Servicing Advances by the Master Servicer out of the proceeds of liquidation of
such Mortgaged Property, as contemplated in Section 5.2. At the direction of the
Special Servicer, the Master Servicer shall be responsible for all other costs
and expenses incurred by the Special Servicer in any such proceedings, subject
to the Master Servicer's being entitled to reimbursement therefor as a Servicing
Advance as provided in Section 4.2 or Section 5.2, and further subject to the
Special Servicer's being entitled to pay out of the related Liquidation Proceeds
any Liquidation Expenses incurred in respect of any Mortgage Loan, which
Liquidation Expenses were outstanding at the time such proceeds are received.
When applicable state law permits the Special Servicer to select between
judicial and non-judicial foreclosure in respect of any Mortgaged Property, the
Special Servicer shall make such selection in a manner consistent with the
Servicing Standard. Nothing contained in this Section 8.7 shall be construed so
as to require the Special Servicer, on behalf of the Trust Fund, to make a bid
on any Mortgaged Property at a foreclosure sale or similar proceeding that is in
excess of the fair market value of such property, as determined by the Special
Servicer in its sole judgment taking into account the factors described in
Section 8.31(b) and the results of any Appraisal obtained pursuant to this
Agreement, all such bids to be made in a manner consistent with the Servicing
Standard. If and when the Master Servicer or the Special Servicer deems it
necessary and prudent for purposes of establishing the fair market value of any
Mortgaged Property securing a defaulted Mortgage Loan, whether for purposes of
bidding at foreclosure or otherwise, the Master Servicer or the Special
Servicer, as the case may be, is authorized to have an Appraisal performed with
respect to such property (the cost of which Appraisal shall be covered by, and
be reimbursable as, a Servicing Advance).
(b) The Special Servicer shall not acquire any personal property pursuant
to this Section 8.7 (with the exception of cash or cash equivalents pledged as
collateral for a Mortgage Loan) unless either:
(i) such personal property is incident to real property (within the
meaning of Section 856(e)(1) of the Code) so acquired by the Special
Servicer; or
(ii) the Special Servicer shall have obtained an Opinion of Counsel
(the cost of which may be withdrawn from the Collection Account (from the
appropriate subaccount thereof) pursuant to Section 5.2) to the effect that
the holding of such personal property by the Trust Fund or any REMIC will
not cause the imposition of a tax on the Trust Fund under the REMIC
Provisions or cause any of REMIC I, REMIC II or REMIC III to fail to
qualify as a REMIC at any time that any Certificate is outstanding.
(c) Notwithstanding the foregoing provisions of this Section 8.7, the
Special Servicer shall not, on behalf of the Trustee, initiate foreclosure
proceedings, obtain title to a Mortgaged Property in lieu of foreclosure or
otherwise, have a receiver of rents appointed with respect to any Mortgaged
Property, or take any other action with respect to any Mortgaged Property, if,
as a result of any such action, the Trustee, on behalf of the
Certificateholders, would be
-106-
<PAGE>
considered to hold title to, to be a "mortgagee-in-possession" of, or to be an
"owner" or "operator" of such Mortgaged Property within the meaning of CERCLA or
any comparable law, unless (as evidenced by an Officer's Certificate to such
effect delivered to the Trustee) the Special Servicer has previously received an
Environmental Assessment in respect of such Mortgaged Property prepared by a
Person who regularly conducts Environmental Assessments and the Special
Servicer, based solely (as to environmental matters and related costs) on the
information set forth in such Environmental Assessment, determines that:
(i) the Mortgaged Property is in compliance with applicable
Environmental Laws or, if not, that acquiring such Mortgaged Property and
taking such actions as are necessary to bring the Mortgaged Property in
compliance therewith is reasonably likely to produce a greater recovery to
Certificateholders on a present value basis than not acquiring such
Mortgaged Property and not taking such actions; and
(ii) there are no circumstances or conditions present at the Mortgaged
Property relating to the use, management or disposal of Hazardous Materials
for which investigations, testing, monitoring, containment, clean-up or
remediation could be required under any applicable environmental laws and
regulations or, if such circumstances or conditions are present for which
any such action could be required, that acquiring such Mortgaged Property
and taking such actions with respect to such Mortgaged Property is
reasonably likely to produce a greater recovery to Certificateholders on a
present value basis than not acquiring such Mortgaged Property and not
taking such actions.
The cost of any such Environmental Assessment, as well as the cost of any
remedial, corrective or other further action contemplated by clause (i) and/or
clause (ii) of the preceding paragraph, may be withdrawn from the Collection
Account by the Master Servicer as an expense of the Trust pursuant to Section
5.2; and if any such Environmental Assessment so warrants, the Special Servicer
shall, at the expense of the Trust payable out of the Collection Account
pursuant to Section 5.2, perform such additional environmental testing as is
consistent with the Servicing Standard to determine whether the conditions
described in clauses (i) and (ii) of the preceding paragraph have been
satisfied.
(d) If the environmental testing contemplated by subsection (c) above
establishes that either of the conditions set forth in clauses (i) and (ii) of
the first sentence thereof has not been satisfied with respect to any Mortgaged
Property securing a defaulted Mortgage Loan, then the Special Servicer shall
take such action as it deems to be in the best economic interest of the Trust
Fund (other than proceeding to acquire title to the Mortgaged Property) and is
hereby authorized at such time as it deems appropriate to release all or a
portion of such Mortgaged Property from the lien of the related Mortgage.
(e) The Special Servicer shall provide monthly to the Master Servicer, who
shall, in turn, promptly deliver copies thereof to the Trustee, written reports
regarding any actions taken by the Special Servicer with respect to any
Mortgaged Property securing a defaulted Mortgage Loan as to which the
environmental testing contemplated in subsection (c) above has revealed that
either of the conditions set forth in clauses (i) and (ii) of the first sentence
thereof has not been satisfied, in each case until the earliest to occur of
satisfaction of both such conditions, removal of the related Mortgage Loan from
the Trust Fund and release of the lien of the related Mortgage on such Mortgaged
Property. Within 5 days of its receipt thereof, the Trustee shall deliver a copy
of each such report to the Depositor and each Rating Agency.
-107-
<PAGE>
(f) The Special Servicer shall report to the Internal Revenue Service and
the related Mortgagor, in the manner required by applicable law, the information
required to be reported regarding any Mortgaged Property which is abandoned or
foreclosed. The Special Servicer shall deliver a copy of any such report to the
Trustee.
(g) The Special Servicer shall have the right to determine, in accordance
with the Servicing Standard, the advisability of the maintenance of an action to
obtain a deficiency judgment if the state in which the Mortgaged Property is
located and the terms of the Mortgage Loan permit such an action.
(h) The Special Servicer shall maintain accurate records, prepared by a
Servicing Officer, of each Final Recovery Determination in respect of a
defaulted Mortgage Loan or REO Property and the basis thereof. Each Final
Recovery Determination shall be evidenced by an Officer's Certificate delivered
to the Trustee and the Master Servicer no later than the 10th Business Day
following such Final Recovery Determination.
Section 8.8 Trustee to Cooperate; Release of Mortgage Files.
(a) Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer or the Special Servicer of a notification that payment in full
shall be escrowed in a manner customary for such purposes, the Master Servicer
or the Special Servicer, as the case may be, will immediately notify the Trustee
and request delivery of the related Mortgage File. Any such notice and request
shall be in the form of a Request for Release signed by a Servicing Officer and
shall include a statement to the effect that all amounts received or to be
received in connection with such payment which are required to be deposited in
the Collection Account pursuant to Section 5.1 have been or will be so
deposited. Within five Business Days (or within such shorter period as release
can reasonably be accomplished if the Master Servicer or the Special Servicer
notifies the Trustee of an exigency) of receipt of such notice and request, the
Trustee shall release, or cause any related Custodian to release, the related
Mortgage File to the Master Servicer or the Special Servicer, whichever
requested it. No expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Collection
Account.
(b) From time to time as is appropriate for servicing or foreclosure of any
Mortgage Loan, the Master Servicer or the Special Servicer may deliver to the
Trustee a Request for Release signed by a Servicing Officer thereof. Upon
receipt of the foregoing, the Trustee shall deliver or cause the related
Custodian to deliver, the Mortgage File or any document therein to the Master
Servicer or the Special Servicer, as the case may be. Upon return of such
Mortgage File or such document to the Trustee or the related Custodian, or the
delivery to the Trustee of a certificate of a Servicing Officer stating that
such Mortgage Loan was liquidated and that all amounts received or to be
received in connection with such liquidation which are required to be deposited
into the Collection Account pursuant to Section 5.1 have been or will be so
deposited, or that such Mortgage Loan has become an REO Property, the Request
for Release shall be released by the Trustee to the Master Servicer or the
Special Servicer, as applicable.
(c) Within five Business Days (or within such shorter period as delivery
can reasonably be accomplished if the Special Servicer notifies the Trustee of
an exigency) of receipt thereof, the Trustee shall execute and deliver to the
Special Servicer any court pleadings, requests for trustee's sale or other
documents necessary to the foreclosure or trustee's sale in respect of a
Mortgaged Property or to any legal action brought to obtain judgment against any
Mortgagor on the
-108-
<PAGE>
Mortgage Note or Mortgage or to obtain a deficiency judgment, or to enforce any
other remedies or rights provided by the Mortgage Note or Mortgage or otherwise
available at law or in equity. The Special Servicer shall be responsible for the
preparation of all such documents and pleadings. When submitted to the Trustee
for signature, such documents or pleadings shall be accompanied by a certificate
of a Servicing Officer requesting that such pleadings or documents be executed
by the Trustee and certifying as to the reason such documents or pleadings are
required and that the execution and delivery thereof by the Trustee will not
invalidate or otherwise affect the lien of the related Mortgage, except for the
termination of such a lien upon completion of the foreclosure or trustee's sale.
Section 8.9 Documents, Records and Funds in Possession of Master Servicer
or Special Servicer to be Held for the Trustee for the Benefit of the
Certificateholders. Notwithstanding any other provisions of this Agreement, the
Master Servicer and the Special Servicer shall each transmit to the Trustee, to
the extent required by this Agreement, all documents and instruments coming into
the possession of the Master Servicer or the Special Servicer, as the case may
be, from time to time and shall account fully to the Trustee for any funds
received or otherwise collected thereby, including Liquidation Proceeds,
Condemnation Proceeds or Insurance Proceeds in respect of any Mortgage Loan or
REO Property. All Mortgage Loan documents and funds collected or held by, or
under the control of, the Master Servicer or the Special Servicer in respect of
any Mortgage Loans and/or REO Properties, whether from the collection of
principal and interest payments or from Liquidation Proceeds, Condemnation
Proceeds or Insurance Proceeds or otherwise, including any funds on deposit in
the Collection Account, shall be held by the Master Servicer or the Special
Servicer, as the case may be, for and on behalf of the Trustee and the
Certificateholders and shall be and remain the sole and exclusive property of
the Trustee, subject to the applicable provisions of this Agreement. The Master
Servicer and the Special Servicer each agrees that it shall not create, incur or
subject any Mortgage Loan documents or any funds that are deposited in the
Collection Account or any Lock-Box Account, Reserve Account or Servicing
Account, or any funds that otherwise are or may become due or payable to the
Trustee, to any claim, lien, security interest, judgment, levy, writ of
attachment or other encumbrance, or assert by legal action or otherwise any
claim or right of setoff against any Mortgage Loan documents or any funds
collected on, or in connection with, a Mortgage Loan or REO Property, except,
however, that the Master Servicer and the Special Servicer each shall be
entitled to receive from any such funds any amounts that are properly due and
payable to the Master Servicer or the Special Servicer, as the case may be,
under this Agreement.
Section 8.10 Servicing Compensation.
(a) As compensation for its activities hereunder, the Master Servicer shall
be entitled to receive the Master Servicing Fee with respect to each REMIC
Mortgage Loan, including without limitation each Specially Serviced Mortgage
Loan and each REO Mortgage Loan. As to each REMIC Mortgage Loan, including
without limitation each Specially Serviced Mortgage Loan and each REO Mortgage
Loan, the Master Servicing Fee shall accrue on the related Stated Principal
Balance of such REMIC Mortgage Loan outstanding from time to time at the
applicable Master Servicing Fee Rate and shall be computed for the same period
respecting which any related interest payment due or deemed due on such REMIC
Mortgage Loan is computed. The Master Servicing Fee with respect to any REMIC
Mortgage Loan or REO Loan shall cease to accrue if a Liquidation Event occurs in
respect thereof. The Master Servicing Fee shall be payable monthly, on a
loan-by-loan basis, from payments of interest on each REMIC Mortgage Loan, REO
Income allocable as interest on each REO Mortgage Loan and the interest portion
of P&I Advances on each REMIC
-109-
<PAGE>
Mortgage Loan, including without limitation each REO Mortgage Loan. The Master
Servicer shall be entitled to recover unpaid Master Servicing Fees in respect of
any REMIC Mortgage Loan, including without limitation each REO Mortgage Loan,
out of that portion of related late payments of interest, Insurance Proceeds,
Condemnation Proceeds, Liquidation Proceeds, Repurchase Proceeds or payments of
Substitution Shortfall Amounts allocable as recoveries of interest, to the
extent permitted by Section 5.2.
The Master Servicer may, at its option, assign to any third party or retain
for itself the Retained Servicing Interest. The "Retained Servicing Interest"
shall consist of the amount of the Master Servicing Fees otherwise payable to
the Master Servicer that accrue at a per annum rate of 0.044%, which rate equals
the excess of the Master Servicing Fee Rate over a 0.01% floor (such floor, the
"Minimum Master Servicing Fee Rate"). The holder of the Retained Servicing
Interest (i.e., the Master Servicer or such third party) shall be entitled to
receive payment in respect of the Retained Servicing Interest at such time and
to the extent the Master Servicer is entitled to receive payment of the Master
Servicing Fees (subject to the Retained Servicing Interest) under the terms and
provisions hereof; provided, however, that, except as expressly provided in
Section 9.2, such payment to the holder of the Retained Servicing Interest shall
continue notwithstanding any termination of the Master Servicer, except for a
termination of Midland Loan Services, L.P. as Master Servicer pursuant to
Section 9.1.
The Master Servicer shall be entitled to additional master servicing
compensation ("Additional Master Servicing Compensation") in the form of:
(i) fifty percent (50%) of all Default Interest and extension fees
with respect to any REMIC Mortgage Loan that is not a Specially Serviced
Mortgage Loan (with the remainder of any such charges being deposited in
the Non-REMIC Trust Collection Subaccount) and 100% of all Late Fees;
(ii) any Prepayment Interest Excesses collected on the REMIC Mortgage
Loans, including without limitation Specially Serviced Mortgage Loans and
REO Mortgage Loans, but only to the extent that the aggregate of all such
Prepayment Interest Excesses collected during each Collection Period
exceeds the Prepayment Interest Shortfalls incurred during such Collection
Period;
(iii) any Balloon Payment Interest Excesses collected on the REMIC
Mortgage Loans, including without limitation Specially Serviced Mortgage
Loans and REO Mortgage Loans, but only to the extent that the aggregate of
all such Balloon Payment Interest Excesses collected during each Collection
Period exceeds the Balloon Payment Interest Shortfalls incurred during such
Collection Period;
(iv) any interest and other income earned on the investment of funds
in the Collection Account, but only to the extent not applied to offset
losses on other investments of funds in the Collection Account; and
(v) any interest and other income earned on the investment of funds in
the Servicing Accounts, Reserve Accounts and Lock-Box Accounts maintained
by the Master Servicer, but only to the extent not required to be paid to
Mortgagors under applicable law or the terms of the respective Mortgage
Loan documents.
-110-
<PAGE>
(b) As compensation for its activities hereunder, the Special Servicer
shall be entitled to receive the Special Servicing Fee with respect to each
Specially Serviced Mortgage Loan and each REO Mortgage Loan. As to each
Specially Serviced Mortgage Loan and each REO Mortgage Loan, the Special
Servicing Fee shall accrue on the related Stated Principal Balance of such REMIC
Mortgage Loan outstanding from time to time at the Special Servicing Fee Rate
and shall be computed for the same period respecting which any related interest
payment due on such Specially Serviced Mortgage Loan or deemed to be due on such
REO Mortgage Loan is computed. The Special Servicing Fee with respect to each
Specially Serviced Mortgage Loan and each REO Mortgage Loan shall cease to
accrue if a Liquidation Event occurs in respect thereof. As to each Specially
Serviced Mortgage Loan and each REO Loan, earned but unpaid Special Servicing
Fees shall be payable monthly out of the same sources and at the same time (but
separate from) Master Servicing Fees payable to the Master Servicer in respect
of such Specially Serviced Mortgage Loan or REO Mortgage Loan.
As further compensation for its activities hereunder, the Special Servicer
shall be entitled to receive the Workout Fee with respect to each Corrected
Mortgage Loan. As to each Corrected Mortgage Loan, the Workout Fee shall be
payable from, and shall be calculated by application of the Workout Fee Rate to,
each collection of principal received on such REMIC Mortgage Loan for so long as
it remains a Corrected Mortgage Loan. A Workout Fee will be payable with respect
to each Corrected Mortgage Loan irrespective of how many times such REMIC
Mortgage Loan has been a Corrected Mortgage Loan. If the Special Servicer is
terminated other than for cause or resigns in accordance with Section 8.23, it
shall retain the right to receive any and all Workout Fees payable in respect of
REMIC Mortgage Loans that became Corrected Mortgage Loans during the period that
it acted as Special Servicer and were still such at the time of such termination
or resignation (and the successor Special Servicer shall not be entitled to any
portion of such Workout Fees), in each case until the Workout Fee for any such
REMIC Mortgage Loan ceases to be payable in accordance with the preceding
sentence.
As further compensation for its activities hereunder, the Special Servicer
shall be entitled to receive a Liquidation Fee with respect to each Specially
Serviced Mortgage Loan or REO Property as to which it receives any full or
discounted payoff or any Liquidation Proceeds (other than in connection with the
purchase of any such Specially Serviced Mortgage Loan or REO Property by an
Interested Person pursuant to Section 8.31 or by any Person entitled to effect
an optional termination of the Trust pursuant to Section 10.01). As to each such
Specially Serviced Loan or REO Property, the Liquidation Fee shall be payable
from Liquidation Proceeds, and shall equal the product of (x) the Liquidation
Fee Rate, (y) a fraction, the numerator of which is equal to the Liquidation
Proceeds received in connection with a final disposition of a Specially Serviced
Mortgage Loan or REO Property and the denominator of which is equal to the
unpaid principal balance of the related REMIC Mortgage Loan or REO Mortgage Loan
and accrued and unpaid interest thereon and (z) the related Liquidation
Proceeds. The Liquidation Fee with respect to any such Specially Serviced
Mortgage Loan will not be payable if such REMIC Mortgage Loan becomes a
Corrected Mortgage Loan. Notwithstanding anything herein to the contrary, no
Liquidation Fee will be payable from, or based upon the receipt of, Liquidation
Proceeds collected as a result of any purchase of a Specially Serviced Mortgage
Loan or REO Property described in the parenthetical to the first sentence of
this paragraph; provided, however, that if any such Liquidation Proceeds are
received with respect to any Corrected Mortgage Loan, and the Special Servicer
is properly entitled to a Workout Fee therefrom, such Workout Fee will be
payable based on and from the portion of such Liquidation Proceeds that
constitute principal and the Liquidation Fee otherwise payable shall be
-111-
<PAGE>
reduced to the extent of the Workout Fees paid previously or now payable to the
Special Servicer with respect to such REMIC Mortgage Loan.
The Special Servicer shall be entitled to additional special servicing
compensation ("Additional Special Servicing Compensation") in the form of all
late payment charges collected by it from a Mortgagor with respect to any
Mortgage Loan, and fifty percent (50%) of (i) any assumption fees and
modification fees received by it on or with respect to any Mortgage Loan,
including, but not limited to, any Specially Serviced Mortgage Loan, (ii) any
extension fees received by it on or with respect to any Specially Serviced
Mortgage Loan and (iii) any default interest actually collected on any Specially
Serviced Mortgage Loan; provided, however, that the Special Servicer will be
entitled to such default interest and late payment charges only to the extent
that such default interest and late payment charges are not allocable to pay any
portion of a Workout Fee or Liquidation Fee payable to the Special Servicer with
respect to the related Mortgage Loan or to cover Advance Interest payable to the
Master Servicer or the Trustee with respect to any Advances made in respect of
the related REMIC Mortgage Loan. In addition, the Special Servicer will be
entitled to receive any other fees (including asset management fees) collected
from the related borrower in connection with the Special Servicer's exercise or
waiver of any of the rights of the related mortgagee under any of the loan
documents relating to any Mortgage Loan. The remainder of any such fees or
payments will be deposited by the Special Servicer into the Non-REMIC Trust
Collection Subaccount.
(c) The Master Servicer and the Special Servicer shall each be required to
pay out of its own funds all overhead and general and administrative expenses
incurred by it in connection with its servicing activities hereunder (including,
without limitation, payment of any amount due and owing to any Sub-Servicers
retained by it and the premiums for any blanket policy obtained by it insuring
against hazard losses pursuant to Section 8.5(b)), if and to the extent such
expenses are not payable directly out of the Collection Account, and neither the
Master Servicer nor the Special Servicer, as the case may be, shall be entitled
to reimbursement except as expressly provided in this Agreement.
(d) The Special Servicer's fee for administering the Non-REMIC Assets will
be equal to 0.75% of the amount of any distribution to the holders of the Class
V Certificates and will be payable only out of the Non-REMIC Trust Distribution
Subaccount from amounts collected in respect of the Non-REMIC Assets only.
Section 8.11 Master Servicer Reports; Account Statements.
(a) The Master Servicer shall deliver to the Trustee, no later than the
Report Date, the Master Servicer Remittance Report with respect to the related
Distribution Date. The Master Servicer shall deliver to the Trustee, no later
than the Advance Report Date, the Advance Report with respect to the related
Distribution Date. The Special Servicer shall provide all information relating
to Specially Serviced Mortgage Loans and REO Properties to permit the Master
Servicer to satisfy its duties in this Section 8.11.
(b) The Master Servicer shall deliver to the Trustee within 30 days
following each Master Servicer Remittance Date a statement setting forth the
status of the Collection Account as of the close of business on such Master
Servicer Remittance Date showing, for the period covered by such statement, the
aggregate of deposits of each type provided in Section 5.1 in, and the aggregate
of withdrawals of each type provided in Section 5.2 from, the Collection
Account.
-112-
<PAGE>
(c) All loan and property level reports to be prepared by the Master
Servicer and the Special Servicer hereunder shall be prepared substantially in
accordance with the CSSA 100 standard in effect as of the Closing Date. Any
"watch list" prepared hereunder by the Master Servicer shall include, without
limitation, the following information with respect to the Mortgage Loans: (i)
any Mortgage Loan maturing in the following 12 months, (ii) any Mortgage Loan
the debt service coverage ratio of which has increased or decreased by more than
20% from the prior year, (iii) any Mortgage Loan the debt service coverage ratio
of which is less than 1.10x, (iv) any Mortgage Loan with respect to which the
related Mortgagor has given notice to the Master Servicer of such Mortgagor's
intent to make a prepayment on the Mortgage Loan, (v) any Mortgage Loan with
respect to which the related Mortgaged Property has experienced a significant
event such as a fire, condemnation, or the expiration of significant leases (to
the extent such information has come to the attention of the Master Servicer),
(vi) any Mortgage Loan with respect to which there is to be an assumption of the
Mortgage Loan or transfer of ownership of the related Mortgaged Property (to the
extent such information has come to the attention of the Master Servicer), (vii)
any Mortgage Loan with respect to which there has been a release of collateral,
(viii) any Mortgage Loan with respect to which a request for subordinated debt
on the Mortgaged Property is pending.
Section 8.12 Annual Statement as to Compliance. The Master Servicer and the
Special Servicer shall each deliver to the Depositor, the Operating Adviser and
the Trustee (and, in the case of the Special Servicer, to the Master Servicer)
on or before March 31 of each year after 1998 (or, as to 1999 and, if the
Depositor provides 30 days' prior notice, any subsequent year during which the
Depositor must file with the Securities and Exchange Commission a Report on Form
10-K in respect of the Trust pursuant to the requirements of the Exchange Act,
on or before March 15 of such year), an Officer's Certificate stating, as to the
signer thereof, that (a) a review of the activities of the Master Servicer or
the Special Servicer, as the case may be, during the preceding calendar year or
portion thereof and of the performance of the Master Servicer or the Special
Servicer, as the case may be, under this Agreement has been made under such
officer's supervision and (b) to the best of such officer's knowledge, based on
such review, the Master Servicer or the Special Servicer, as the case may be,
has fulfilled all its obligations under this Agreement in all material respects
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and the
nature and status thereof. The Master Servicer and the Special Servicer shall
each forward to the Rating Agencies a copy of each such statement delivered by
it to the Depositor and the Trustee
Section 8.13 Annual Independent Public Accountants' Servicing Report.
On or before April 15 of each year after 1998 (or, as to 1999 and, if the
Depositor provides 90 days' prior notice, any subsequent year during which the
Depositor must file with the Securities and Exchange Commission a Report on Form
10-K in respect of the Trust pursuant to the requirements of the Exchange Act,
on or before March 15 of such year), the Master Servicer at its expense shall
cause a firm of Accountants to furnish a statement to the Depositor, the
Operating Adviser and the Trustee to the effect that (i) it has obtained a
letter of representation regarding certain matters from the management of the
Master Servicer, which includes an assertion that the Master Servicer has
complied with certain minimum mortgage loan servicing standards (to the extent
applicable to commercial and multifamily mortgage loans), identified in the
Uniform Single Attestation Program for Mortgage Bankers established by the
Mortgage Bankers Association of America, with respect to the servicing of
commercial and multifamily mortgage loans during the most recently completed
calendar year and (ii) on the basis of an examination conducted by such firm in
accordance with standards established by the American Institute of Certified
Public Accountants,
-113-
<PAGE>
such representation is fairly stated in all material respects, subject to such
exceptions and other qualifications that may be appropriate. In rendering its
report such firm may rely, as to matters relating to the direct servicing of
commercial and multifamily mortgage loans by Sub-Servicers, upon comparable
reports of firms of independent certified public accountants rendered on the
basis of examinations conducted in accordance with the same standards (rendered
within one year of such report) with respect to those Sub-Servicers.
The Special Servicer will deliver to the Depositor, the Operating Adviser,
the Trustee and the Master Servicer an annual accountants' report only if, and
in such form as may be, requested by the Rating Agencies.
The Operating Advisor, at its expense, shall be entitled to obtain an
annual audit of the Master Servicer's and the Special Servicer's (if other than
the Seller) servicing of the Mortgage Loans hereunder.
The Master Servicer and the Special Servicer, to the extent applicable,
shall each, with 90 days' prior notice, use reasonable efforts to cause the
applicable Accountants to cooperate with the Depositor in conforming any reports
delivered pursuant to this Section 8.13 to requirements imposed by the
Commission on the Depositor in connection with the Commission's issuance of a
no-action letter relating to the Depositor's reporting requirements in respect
of the Trust Fund pursuant to the Exchange Act.
The Master Servicer and the Special Servicer shall each forward to the
Rating Agencies a copy of each statement delivered by it to the Depositor and
the Trustee pursuant to this Section 8.13.
Section 8.14 Certain Reports Regarding the Mortgage Loans and the Mortgaged
Properties.
(a) On or before the Report Date in each month, the Master Servicer shall
deliver to the Trustee a report containing information regarding the Mortgage
Loans as of the end of the related Collection Period, which report will contain
substantially the categories of information regarding the Mortgage Loans set
forth in Appendix II to the Prospectus Supplement, will be delivered in a format
mutually acceptable to the Master Servicer and the Trustee and will be updated
within a reasonable period after the requisite underlying information is
available.
(b) Not later than the Report Date occurring in June of each year,
beginning in June 1998, the Master Servicer shall, to the extent such
information was not already reported pursuant to Section 8.14(a), deliver to the
Trustee a report (the "Annual Report") for each Mortgage Loan, based on the most
recently available year-end financial statements and the most recently available
rent rolls of each applicable Mortgagor (to the extent provided to the Master
Servicer by or on behalf of each Mortgagor, or, in the case of Specially
Serviced Mortgaged Loans and REO Mortgage Loans, as provided to or obtained by
the Special Servicer and forwarded to the Master Servicer, on or before April 15
of each such year), containing such information and analyses for each Mortgage
Loan as would customarily be included in accordance with the Servicing Standard
including, without limitation, Debt Service Coverage Ratios and income.
(c) The Trustee shall send copies of the reports received by it pursuant to
Sections 8.14(a) and (b) to the Depositor and each Rating Agency.
-114-
<PAGE>
Section 8.15 Certain Available Information and Related Rights of the Master
Servicer and the Special Servicer.
(a) Subject to the restrictions described below, the Master Servicer and
the Special Servicer shall each also afford the Rating Agencies, the Depositor,
the Trustee, the Special Servicer, the Underwriter, the Operating Adviser, any
Certificateholder, any Certificate Owner and any Prospective Investor, upon
reasonable notice and during normal business hours, reasonable access to any and
all additional relevant, non-attorney-client-privileged records and
documentation in its possession or under its control regarding the Mortgage
Loans, REO Properties and all accounts, insurance policies and other relevant
matters relating to this Agreement, and access to Servicing Officers of the
Master Servicer or Special Servicing Officers of the Special Servicer, as the
case may be, responsible for its obligations hereunder. Copies (or computer
diskettes or other digital or electronic copies of such information if
reasonably available in lieu of paper copies) of any and all of the foregoing
items shall be made available by the Master Servicer or the Special Servicer, as
the case may be, upon request; provided, however, that the Master Servicer and
the Special Servicer shall each be permitted to require payment by the
requesting party (other than the Depositor, the Trustee, the Underwriter or
either Rating Agency) of a sum sufficient to cover the reasonable expenses
actually incurred by the Master Servicer or the Special Servicer, as the case
may be, of providing access or copies (including electronic or digital copies)
of any such information requested in accordance with the preceding sentence.
(b) Nothing herein shall be deemed to require the Master Servicer or
Special Servicer to confirm, represent or warrant the accuracy of (or to be
liable or responsible for) any other Person's information or report, included in
any communication from the other (unless the Master Servicer and the Special
Servicer are the same Person) or from a Mortgagor. Neither the Master Servicer
nor the Special Servicer shall have any liability to the Depositor, the Trustee,
any Certificateholder, any Certificate Owner, the Underwriter, either Rating
Agency or any other Person to whom it delivers information pursuant to this
Section 8.15 or any other provision of this Agreement for federal, state or
other applicable securities law violations relating to the disclosure of such
information. In the event any Person brings any claims relating to or arising
from the foregoing against the Master Servicer, the Special Servicer or the
Trustee, the Trust (from amounts held in the Collection Account from time to
time) shall hold harmless and indemnify the Master Servicer, the Special
Servicer or the Trustee, as the case may be, from any loss or expense (including
attorney fees) relating to or arising from such claims.
(c) The Master Servicer and the Special Servicer shall each produce the
reports required of it under this Agreement; provided, however, that neither the
Master Servicer nor the Special Servicer shall be required to produce any ad hoc
non-standard written reports with respect to the Mortgage Loans. In the event
the Master Servicer or the Special Servicer elects to provide such reports, it
may require the Person requesting such report to pay a reasonable fee to cover
the costs of the preparation thereof. Requests for any such report shall be
made, and any such report shall be disseminated, through the Trustee.
(d) In connection with providing access to or copies of the items described
in subsections (a), (b) and/or (c) of this Section 8.15 or in Section 8.16, the
Master Servicer, the Special Servicer and the Trustee may each require: (a) in
the case of Certificate Owners, a written confirmation executed by the
requesting Person, in form reasonably satisfactory to the Master Servicer, the
Special Servicer or the Trustee, as the case may be, generally to the effect
that such Person is a beneficial holder of Certificates, is requesting the
information solely for use in evaluating
-115-
<PAGE>
such Person's investment in the Certificates and will otherwise keep such
information confidential; and (b) in the case of Prospective Investors, a
written confirmation executed by the requesting Person, in form reasonably
satisfactory to the Master Servicer, the Special Servicer or the Trustee, as the
case may be, generally to the effect that such Person is a prospective purchaser
of a Certificate or an interest therein, is requesting the information solely
for use in evaluating a possible investment in Certificates and will otherwise
keep such information confidential.
(e) The Master Servicer and the Special Servicer shall each provide or
cause to be provided to the OTS, the FDIC and any other federal or state banking
or insurance regulatory authority that may exercise authority over any
Certificateholder or Certificate Owner, access to any and all records and other
documentation regarding the Mortgage Loans and the Trust Fund within its control
which may be required by this Agreement or by applicable law. Such access shall
be afforded without charge but only upon reasonable prior written request and
during normal business hours at the offices of the Master Servicer or the
Special Servicer, as the case may be, designated by it.
(f) The Master Servicer and the Special Servicer shall each cooperate in
providing the Rating Agencies with such other pertinent information relating to
the Mortgage Loans as is or should be in their respective possession as the
Rating Agencies may reasonably request.
Section 8.16 Rule 144A Information. For so long as any of the
Non-Registered Certificates are "restricted securities" within the meaning of
Rule 144A under the Securities Act, each of the Master Servicer and the Special
Servicer agrees to provide to the Trustee, which in turn shall provide to any
Holder, Certificate Owner or Prospective Investor of such Certificates, upon the
request of such Holder, Certificate Owner or Prospective Investor subject to the
other provisions of this Section 8.16 and the provisions of subsections (b), (c)
and (d) of Section 8.15, any information relating to the Mortgage Loans prepared
by or otherwise in the possession or under the control of the Master Servicer or
the Special Servicer, as the case may be, that has not already been delivered to
the Trustee and that is required to be provided to such Holder, Certificate
Owner or Prospective Investor to satisfy the condition set forth in Rule
144A(d)(4) under the Securities Act, including, without limitation, copies of
the reports and information described in subsection (a) of Section 8.15.
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.
Any recipient of information provided pursuant to this Section 8.16 shall
agree that such information shall not be disclosed or used for any purpose other
than the evaluation of an investment in the Non-Registered Certificates. By
acceptance of a Certificate, each Holder shall be deemed to have agreed to this
Section. Unless the Master Servicer or the Special Servicer chooses to deliver
the information directly, the Trustee shall be responsible for the physical
delivery of the information requested pursuant to this Section 8.16. As a
condition to the Master Servicer or the Special Servicer making any report or
information available upon request to any Person other than another party
hereto, the Master Servicer or the Special Servicer, as the case may be, may
require that the recipient of such information acknowledge that the Master
Servicer or the Special Servicer, as the case may be, may contemporaneously
provide such information to the Depositor, the Trustee, the Underwriter and/or
the Certificateholders and Certificate Owners. The Trustee, the Master Servicer
and the Special Servicer will each be permitted to require payment of a sum by
the
-116-
<PAGE>
requesting party (other than the Rating Agencies, the Depositor, the Trustee or
the Underwriter) sufficient to cover the reasonable costs and expenses of making
such information available.
Section 8.17 Inspections; Collection of Financial Statements.
(a) The Master Servicer shall perform (or cause to be performed) a physical
inspection of each Mortgaged Property (other than Mortgaged Properties
constituting REO Properties or collateral for Specially Serviced Mortgaged
Loans) at such times and in such manner as are consistent with the Servicing
Standard, but in any event at least once every two years (or, if the related
REMIC Mortgage Loan has a current balance of more than $2,000,000, at least once
every year). The Master Servicer shall promptly prepare (or cause to be
prepared) a written report of each such inspection detailing the condition of
the Mortgaged Property and specifying the existence of (i) any vacancy in the
Mortgaged Property evident from such inspection that the Master Servicer deems
material, (ii) any sale, transfer or abandonment of the Mortgaged Property
evident from such inspection, (iii) any adverse change in the condition or value
of the Mortgaged Property evident from such inspection that the Master Servicer
deems material, or (iv) any waste committed on the Mortgaged Property evident
from such inspection. The Master Servicer shall deliver to the Trustee, the
Special Servicer, the Depositor, the Rating Agencies and the Operating Advisor a
copy of each such written report within 30 days of the related inspection.
(b) The Special Servicer shall perform (or cause to be performed) a
physical inspection of each REO Property and each Mortgaged Property
constituting collateral for a Specially Serviced Mortgage Loan at such times and
in such manner as are consistent with the Servicing Standard, but in any event
at least once per calendar year. If any Mortgage Loan becomes a Specially
Serviced Mortgage Loan, then as soon as practicable (and in any event within 90
days thereafter) the Special Servicer shall perform (or cause to be performed) a
physical inspection of each Mortgaged Property constituting collateral for such
Mortgage Loan. The Special Servicer shall promptly prepare (or cause to be
prepared) a written report of each such inspection detailing the condition of
the Mortgaged Property and specifying the existence of (i) any vacancy in the
Mortgaged Property evident from such inspection that the Special Servicer deems
material, (ii) any sale, transfer or abandonment of the Mortgaged Property
evident from such inspection, (iii) any adverse change in the condition or value
of the Mortgaged Property evident from such inspection that the Special Servicer
deems material, or (iv) any waste committed on the Mortgaged Property evident
from such inspection. The Special Servicer shall deliver to the Master Servicer,
the Trustee, the Depositor, the Rating Agencies and the Operating Advisor, a
copy of each such written report within 60 days of the related inspection.
(c) The Master Servicer (or, in the case of Specially Serviced Mortgage
Loans, the Special Servicer) shall make reasonable efforts to collect promptly
from each Mortgagor quarterly and annual operating statements and rent rolls of
the related Mortgaged Property, and financial statements of such Mortgagor, if
delivery of such items is required pursuant to the terms of the related Mortgage
and the Master Servicer shall provide copies thereof to the Special Servicer and
the Operating Advisor. In addition, the Special Servicer shall use reasonable
efforts to obtain quarterly and annual operating statements and rent rolls with
respect to each REO Property. The Master Servicer and Special Servicer shall
each deliver copies of the collected items to the other such party and to the
Trustee, the Depositor, the Rating Agencies and the Operating Advisor, in each
case within 20 days of its receipt thereof.
-117-
<PAGE>
Section 8.18 Modifications, Waivers, Amendments and Consents.
(a) (i) The Master Servicer may, without the consent of the Special
Servicer, extend the maturity date of any Balloon Mortgage Loan that is not a
Specially Serviced Mortgage Loan to a date that, in the aggregate, with all
previous extensions is not more than 60 days following the original Maturity
Date, if in the Master Servicer's sole judgment exercised in good faith (and
evidenced by an Officer's Certificate), (A) a default in the payment of the
Balloon Payment is reasonably foreseeable and such extension is reasonably
likely to produce a greater recovery on a net present value basis than
liquidation of such Balloon Mortgage Loan and (B) the Master Servicer reasonably
believes that such Balloon Payment will be paid in full by the Mortgagor within
such extension period. The Master Servicer shall process all such extensions and
shall be entitled to (as additional servicing compensation) 50% of any extension
fees collected from a Mortgagor with respect to any such extension (with the
remaining 50% being transferred by the Master Servicer to the Non-REMIC Trust
Collection Subaccount).
(ii) The Master Servicer may require, in its discretion, as a condition to
granting any request by a Mortgagor for any extension of a maturity date, that
such Mortgagor pay to the Master Servicer a reasonable and customary
modification fee to the extent permitted by law. The Master Servicer may charge
the Mortgagor for any costs and expenses (including reasonable attorneys' fees)
incurred by the Master Servicer in connection with any request for an extension
of a maturity date. The failure or inability of the Mortgagor to pay any such
costs and expenses shall not impair the right of the Master Servicer to cause
such costs and expenses, and interest thereon at the Advance Rate, to be paid or
reimbursed as a Servicing Advance (to the extent not paid by the Mortgagor).
(iii) The Master Servicer shall notify the Trustee of any extension of the
maturity date of any Mortgage Loan permitted by it under this Section and the
date thereof, and shall deliver to the Trustee for deposit in the related
Mortgage File, an original counterpart of the agreement relating to such
modification, waiver or amendment, promptly following the execution thereof
except to the extent such documents have been submitted to the applicable
recording office, in which event the Master Servicer shall promptly deliver
copies of such documents to the Trustee.
(b) Subject to the limitations of Section 12.1(j) and 12.2, the Special
Servicer (and, where explicitly stated, the Master Servicer) shall have the
following additional duties and rights:
(i) Subject to the Servicing Standard, and the rights and duties of the
Master Servicer under paragraph (a) above of this Section 8.18, the Special
Servicer may enter into any modification, waiver or amendment (including,
without limitation, the substitution or release of collateral or the pledge of
additional collateral) of the terms of any Mortgage Loan, including without
limitation any modification, waiver or amendment to (a) reduce the amounts owing
under any Mortgage Loan by forgiving principal, accrued interest, any Penalty
Charges and/or any Prepayment Charge, (b) reduce the amount of the Monthly
Payment on any Mortgage Loan, including by way of a reduction in the related
Mortgage Rate, (c) forebear in the enforcement of any right granted under any
Mortgage Note or Mortgage relating to a Mortgage Loan, (d) extend the Maturity
Date of any Mortgage Loan and/or (e) accept a principal prepayment on any
Mortgage Loan during any period during which voluntary Principal Prepayments are
prohibited, provided, in the case of any such modification, waiver or amendment,
that (A) such modification, waiver or amendment would not cause an Adverse REMIC
Event to occur, (B) the related Mortgagor is in default with respect
-118-
<PAGE>
to the Mortgage Loan or, in the reasonable judgment of the Special Servicer,
such default is reasonably foreseeable, and (C) in the case of any Specially
Serviced Mortgage Loan, in the reasonable judgment of the Special Servicer, such
modification, waiver or amendment would increase the recovery on the Specially
Serviced Mortgage Loan to Certificateholders on a net present value basis (the
relevant discounting of amounts that will be distributable to Certificateholders
to be performed at the related Mortgage Rate).
In no event, however, shall the Special Servicer (i) extend the Maturity
Date of a Mortgage Loan beyond a date that is two years prior to the Final Rated
Distribution Date, (ii) extend the Maturity Date of a Mortgage Loan at an
interest rate below the then prevailing interest rate for comparable loans, as
determined by the Special Servicer (such limitation of extensions made at a
below market rate shall not limit the ability of the Special Servicer to extend
the Maturity Date of any Mortgage Loan at an interest rate at or in excess of
the prevailing rate for comparable loans at the time of such modification),
(iii) if the Mortgage Loan is secured by a ground lease, extend the Maturity
Date of such Mortgage Loan beyond a date which is ten (10) years prior to the
expiration of the then-current term of such ground lease, (iv) reduce the
Mortgage Rate of a Mortgage Loan to a rate below the prevailing interest rate
for comparable loans, as determined by the Special Servicer, or (v) defer
interest due on any Mortgage Loan in excess of 25% of the Stated Principal
Balance of such Mortgage Loan or defer the collection of interest on any
Mortgage Loan without accruing interest on such deferred interest at a rate at
least equal to the Mortgage Rate of such Mortgage Loan.
Notwithstanding the foregoing, if a Mortgage Loan is a Balloon Mortgage
Loan that has failed to make the Balloon Payment at its original Maturity Date,
and such Balloon Mortgage Loan is not a Specially Serviced Mortgage Loan (other
than by reason of the failure to make its Balloon Payment) and has not been
delinquent in the preceding twelve months (other than with respect to the
Balloon Payment), then in addition to the other alternatives specified above,
the Special Servicer may make up to five one-year extensions at the existing
Mortgage Rate for such Mortgage Loan. The preceding sentence does not modify the
limitations of clause (i) of the preceding paragraph.
The determination of the Special Servicer contemplated by clause (D) of the
proviso to the first paragraph of this subsection (b)(i), and clause (ii) of the
second paragraph of this subsection (b)(i), shall be evidenced by an Officer's
Certificate setting forth the information required under this subsection (b)(i).
(ii) In the event the Special Servicer intends to permit a Mortgagor to
substitute collateral for all or any portion of a Mortgaged Property pursuant to
this Section 8.18 or pledge additional collateral for the Mortgage Loan pursuant
to this Section 8.18, if the security interest of the Trust in such collateral
would be perfected by possession, or if such collateral requires special care or
protection, then prior to agreeing to such substitution or addition of
collateral, the Special Servicer shall make arrangements for such possession,
care or protection, and prior to agreeing to such substitution or addition of
collateral (or such arrangement for possession, care or protection) shall obtain
the prior written consent of the Trustee with respect thereto (which consent
shall not be unreasonably withheld, delayed or conditioned); provided, however,
that the Trustee shall not be required (but has the option) to consent to any
substitution or addition of collateral or to hold any such collateral that will
require the Trustee to undertake any additional duties or obligations or incur
any additional expense; and provided, further, that the Trustee shall not be
required to consent to
-119-
<PAGE>
any substitution or addition of collateral that would, in the Trustee's
discretion, result in an Adverse REMIC Event.
The Special Servicer shall not permit any Mortgagor to add or substitute
any collateral for an outstanding Mortgage Loan, which collateral constitutes
real property, unless the Special Servicer shall have first determined, in its
reasonable and good faith judgment, based upon an Environmental Assessment (and
such additional environmental testing as the Special Servicer deems necessary
and appropriate) prepared by an Independent Person who regularly conducts
Environmental Assessments (and such additional environmental testing), at the
expense of the Mortgagor, that such additional or substitute collateral is in
compliance with applicable Environmental Laws 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.
The Special Servicer shall not release or substitute any collateral
securing an outstanding Mortgage Loan except as provided in Section 8.7(d) and
except in the case of a release where (A) the use of the collateral to be
released will not, in the Special Servicer's good faith and reasonable judgment,
materially and adversely affect the net cash flow being generated by or the use
of the related Mortgaged Property, (B) there is a corresponding principal
paydown of such Mortgage Loan in an amount at least equal to, or a delivery of
substitute collateral with an appraised value at least equal to, the appraised
value of the collateral to be released, (C) the remaining Mortgaged Property and
any substitute collateral is, in the Special Servicer's good faith and
reasonable judgment, adequate security for the remaining Mortgage Loan and (D)
such release and/or substitution would not result in the downgrade,
qualification or withdrawal of the rating then assigned by any Rating Agency to
any Class of Certificates (as confirmed in writing by each Rating Agency);
(iii) The Special Servicer will promptly deliver to the Master Servicer,
the Operating Adviser and the Trustee a notice, specifying any such
modifications, waivers or amendments, such notice identifying the affected
Mortgage Loan. Such notice shall be delivered to the Trustee and shall set forth
the reasons for such waiver, modification, or amendment (including, but not
limited to, information such as related income and expense statements, rent
rolls, occupancy status, property inspections, and an internal or external
appraisal performed in accordance with MAI standards and methodologies (and, if
done externally, the cost of such appraisal shall be recoverable as a Servicing
Advance subject to the provisions of Section 4.4 hereof)). Notices required by
this Subsection 8.18(b)(iv) shall be delivered to the Operating Advisor at least
5 days prior to the anticipated action, unless an emergency or other exigency
requires more prompt action and, in such case, such notice shall be provided at
the earliest possible date. The Special Servicer shall also deliver to the
Trustee (or the Custodian), for deposit in the related Mortgage File, an
original counterpart of the agreement relating to such modification, waiver or
amendment promptly following the execution thereof.
(iv) No fee described in this Section shall be collected by the Special
Servicer from the Mortgagor (or on behalf of the Mortgagor) in conjunction with
any consent or any modification, waiver or amendment of the Mortgage Loan if the
collection of such fee would cause such consent, modification, waiver or
amendment to be a "significant modification" of the Mortgage Note within the
meaning of Treasury Regulation ss. 1.860G-2(b). Subject to the foregoing, the
Special Servicer shall use its reasonable efforts, in accordance with the
Servicing Standard, to collect any modification fees and other expenses
connected with a permitted modification of a Mortgage Loan from the
-120-
<PAGE>
Mortgagor. The inability of the Mortgagor to pay any costs and expenses of a
proposed modification shall not impair the right of the Special Servicer, the
Master Servicer or the Trustee to be reimbursed by the Trust for such expenses
(including any cost and expense associated with the Opinion of Counsel referred
to in this Section).
(v) Notwithstanding anything herein to the contrary, the Special Servicer
shall not be permitted to take or refrain from taking any action pursuant to
instructions from the Operating Adviser that would cause it to violate any term
or provision of this Agreement, the REMIC Provisions or the Servicing Standard.
(vi) The Special Servicer shall have no liability to the Trust Fund, the
Certificateholders or any other Person if its analysis and determination that a
modification, waiver, amendment or other action permitted by Section 8.18(b) is
reasonably likely to produce an increased recovery to Certificateholders on a
present value basis, should prove to be wrong or incorrect, so long as the
analysis and determination were made on a reasonable basis in good faith by the
Special Servicer and the Special Servicer was not negligent in ascertaining the
pertinent facts.
(c) Any payment of interest, which is deferred pursuant to any
modification, waiver or amendment permitted hereunder, shall not, for purposes
of this Agreement (but not for purposes of determining the contractual balance
due from a Mortgagor and secured by the related Mortgage), including, without
limitation, calculating monthly distributions to Certificateholders, be added to
the unpaid principal balance of the related Mortgage Loan, notwithstanding that
the terms of such Mortgage Loan or such modification, waiver or amendment so
permit.
(d) All modifications, waivers (except for waivers of Penalty Charges) and
amendments of the Mortgage Loans entered into pursuant to this Section 8.18
shall be in writing.
(e) The Master Servicer and the Special Servicer shall waive the
requirement of a partial principal prepayment of the Doubletree Hotel-Fishermans
Wharf Loan as a condition to the approval of any transfer of the Mortgaged
Property securing such Mortgage Loan and shall not accept any such prepayment
unless accompanied by a Prepayment Premium.
Section 8.19 Title to REO Property.
(a) If title to any REO Property is acquired, the deed or certificate of
sale shall be issued in the name of the Trustee on behalf of the
Certificateholders. The Special Servicer, on behalf of the Trust Fund, shall in
accordance with Section 8.31 attempt to sell any REO Property for cash by the
close of the third taxable year following the taxable year in which the Trust
Fund acquires ownership of such REO Property (such date, the "REO Sale
Deadline") for purposes of Section 860G(a)(8) of the Code, unless the Special
Servicer either (i) applies for, more than 60 days prior to the REO Sale
Deadline, and is subsequently granted an extension of time (an "REO Extension")
by the Internal Revenue Service to sell such REO Property, or (ii) obtains for
the Trustee an Opinion of Counsel, addressed to the Trustee and the Special
Servicer, to the effect that the holding by the Trust Fund of such REO Property
subsequent to the REO Sale Deadline will not result in the imposition of taxes
on "prohibited transactions" of REMIC I, REMIC II or REMIC III as defined in
Section 860F of the Code or cause REMIC I, REMIC II or REMIC III to fail to
qualify as a REMIC at any time that any Certificates are outstanding. If the
Special Servicer is granted the REO Extension contemplated by clause (i) of the
immediately preceding sentence or obtains the Opinion of Counsel contemplated by
clause (ii) of the immediately preceding sentence, the Special
-121-
<PAGE>
Servicer shall attempt to sell such REO Property within such period extending
beyond the REO Sale Deadline as is permitted by such REO Extension or is
contemplated by such Opinion of Counsel, as the case may be. Any expense
incurred by the Special Servicer in connection with its being granted the REO
Extension contemplated by clause (i) of the second preceding sentence or its
obtaining the Opinion of Counsel contemplated by clause (ii) of the second
preceding sentence, shall be an expense of the Trust Fund payable out of the
Collection Account pursuant to Section 5.2.
(b) The Special Servicer shall remit to the Master Servicer (which shall
deposit such amounts into the Collection Account), on a monthly basis prior to
the Master Servicer Remittance Date, all REO Income (net of the fees of any
property manager and net of any expenses payable therefrom), Insurance Proceeds,
Condemnation Proceeds and Liquidation Proceeds received in respect of an REO
Property, subject to withdrawal pursuant to Section 5.2.
Section 8.20 Management of REO Property.
(a) Prior to the acquisition of title to any Mortgaged Property securing a
defaulted Mortgage Loan, the Special Servicer shall review the operation of such
Mortgaged Property and determine the nature of the income that would be derived
from such property if it were acquired by the Trust. If the Special Servicer
determines from such review, in its good faith and reasonable judgment, that:
(i) None of the income from Directly Operating such Mortgaged Property
would be subject to tax as "net income from foreclosure property" within
the meaning of the REMIC Provisions or would be subject to the tax imposed
on "prohibited transactions" under Section 860F of the Code (either such
tax referred to herein as an "REO Tax"), then such Mortgaged Property may
be Directly Operated by the Special Servicer as REO Property;
(ii) Directly Operating such Mortgaged Property as an REO Property
could result in income from such Mortgaged Property that would be subject
to an REO Tax, but that a lease of such Mortgaged Property to another party
to operate such Mortgaged Property, or the performance of some services by
an Independent Contractor with respect to such Mortgaged Property, or
another method of operating such Mortgaged Property would not result in
income subject to an REO Tax, then the Special Servicer may (provided that,
in the good faith and reasonable judgment of the Special Servicer, it is
commercially feasible) acquire such Mortgaged Property as REO Property and
so lease or operate such REO Property; or
(iii) Directly Operating such Mortgaged Property as REO Property could
result in income subject to an REO Tax and, in the good faith and
reasonable judgment of the Special Servicer, that no commercially feasible
means exists to operate such Mortgaged Property as REO Property without the
Trust incurring or possibly incurring an REO Tax on income from such
Mortgaged Property, then the Special Servicer shall deliver to the Trustee,
in writing, a proposed plan (the "Proposed Plan") to manage such Mortgaged
Property as REO Property. Such plan shall include potential sources of
income, and to the extent commercially feasible, estimates of the amount of
income from each such source. Within a reasonable period of time after
receipt of such plan, the Trustee shall consult with the Special Servicer
and shall advise the Special Servicer of the Trust's federal income tax
reporting position with respect to the various sources of income that the
Trust would derive
-122-
<PAGE>
under the Proposed Plan. In addition, the Trustee shall (to the maximum
extent possible) advise the Special Servicer of the estimated amount of
taxes that the Trust would be required to pay with respect to each such
source of income. After receiving the information described in the two
preceding sentences from the Trustee, the Special Servicer shall either (A)
implement the Proposed Plan (after acquiring the respective Mortgaged
Property as REO Property) or (B) manage and operate such REO Property in a
manner that would not result in the imposition of an REO Tax on the income
derived from such REO Property.
The Special Servicer's decision as to how each REO Property shall be
managed and operated shall in any event be based on the good faith and
reasonable judgment of the Special Servicer as to which means would (to the
extent commercially feasible) maximize the net after-tax REO Income received by
the Trust with respect to such REO Property without materially and adversely
affecting the Special Servicer's ability to sell such REO Property in accordance
with this Agreement and, to the extent consistent with the foregoing, in
accordance with the same manner that the Special Servicer would operate and
manage such REO Property if it were owned by the Special Servicer. Both the
Special Servicer and the Trustee may consult with counsel knowledgeable in such
matters at the expense of the Trust Fund in connection with determinations
required under this Section 8.20(a). Neither the Special Servicer nor the
Trustee shall be liable to the Certificateholders, the Trust, the other parties
hereto or each other for errors in judgment made in good faith in the reasonable
exercise of their discretion while performing their respective responsibilities
under this Section 8.20(a) or, to the extent it relates to federal income tax
consequences for the Trust, Section 8.20(b) below. Nothing in this Section
8.20(a) is intended to prevent the sale of a Defaulted Mortgage Loan or REO
Property pursuant to the terms and subject to the conditions of Section 8.31.
(b) If title to any REO Property is acquired, the Special Servicer shall
manage, conserve, protect and operate such REO Property for the benefit of the
Certificateholders solely for the purpose of its prompt disposition and sale in
a manner that does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or,
except as permitted by Section 8.20(a), result in the receipt by the Trust of
any "income from non-permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code or any "net income from foreclosure property" which is
subject to taxation under the REMIC Provisions. Subject to the foregoing,
however, the Special Servicer shall have full power and authority to do any and
all things in connection therewith as are in the best interests of and for the
benefit of the Certificateholders (as determined by the Special Servicer in its
good faith and reasonable judgment). 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 one or more segregated accounts (each, an "REO
Account"), each of which shall be an Eligible Account and shall be entitled
"Aetna Life Insurance Company, as Special Servicer for State Street Bank and
Trust Company, as Trustee for the holders of Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificates, Series 1997-ALIC, REO Account." The
Special Servicer shall be entitled to any interest or investment income earned
on funds deposited in an REO Account to the extent provided in Section 5.1(e).
The Special Servicer shall deposit or cause to be deposited in the related REO
Account within one Business Day after receipt all REO Income received by it with
respect to any REO Property, and shall withdraw therefrom, funds necessary for
the proper operation, management and maintenance of such REO Property,
including, without limitation:
(i) all insurance premiums due and payable in respect of such REO
Property;
-123-
<PAGE>
(ii) all real estate taxes and assessments in respect of such REO
Property that may result in the imposition of a lien thereon;
(iii) any ground rents in respect of such REO Property; and
(iv) all costs and expenses necessary to maintain such REO Property.
To the extent that amounts on deposit in the Collection Account in respect of
any REO Property are insufficient for the purposes set forth in clauses (i) -
(iv) above with respect to such REO Property, the Master Servicer (at the
direction of the Special Servicer) shall advance from its own funds such amount
as is necessary for such purposes unless (as evidenced by an Officer's
Certificate delivered by the Master Servicer to the Trustee and the Special
Servicer) or if such advances would, if made, constitute Nonrecoverable
Advances.
(c) The Special Servicer may contract with any Independent Contractor for
the operation and management of any REO Property, provided that:
(i) the terms and conditions of any such contract may not be
inconsistent herewith and shall reflect an agreement reached at arm's
length;
(ii) the fees of such Independent Contractor (which shall be an
expense of the Trust, payable out of related REO Income) shall be
reasonable and customary in light of the nature and locality of the REO
Property;
(iii) any such contract shall require, or shall be administered to
require, that the Independent Contractor (A) pay all costs and expenses
incurred in connection with the operation and management of such REO
Property, including, without limitation, those listed in subsection (b) of
this Section 8.20 and (B) remit all related REO Income collected (net of
its fees and such costs and expenses) to the Special Servicer upon receipt;
(iv) none of the provisions of this Section 8.20(c) relating to any
such contract or to actions taken through any such Independent Contractor
shall be deemed to relieve the Special Servicer of any of its duties and
obligations hereunder with respect to the operation and management of any
such REO Property; and
(v) the Special Servicer shall be obligated with respect thereto to
the same extent as if it alone were performing all duties and obligations
in connection with the operation and management of such REO Property.
The Special Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Special Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification.
-124-
<PAGE>
Section 8.21 Additional Obligations of the Master Servicer.
(a) [intentionally omitted]
(b) The Master Servicer and the Special Servicer shall each deliver to the
other and to the Trustee (for inclusion in the Mortgage File) copies of all
Appraisals, environmental reports and engineering reports (or, in each case,
updates thereof) obtained with respect to any Mortgaged Property or REO
Property.
(c) The Master Servicer shall deliver to the Trustee for deposit in the
Distribution Account on each P&I Advance Date, without any right of
reimbursement therefor, an amount equal to the excess, if any, of all Balloon
Payment Interest Shortfalls over all Balloon Payment Interest Excesses, in each
case resulting from Balloon Payments received in respect of the REMIC Mortgage
Pool during the most recently ended Collection Period.
(d) The Master Servicer shall deliver to the Trustee for deposit in the
Distribution Account on each P&I Advance Date, without any right of
reimbursement therefor, an amount equal to the lesser of (i) the excess, if any,
of all Prepayment Interest Shortfalls over all Prepayment Interest Excesses, in
each case resulting from Principal Prepayments received in respect of the REMIC
Mortgage Pool during the most recently ended Collection Period, and (ii) that
portion of the aggregate Master Servicing Fees received by the Master Servicer
during such Collection Period calculated in respect of all the REMIC Mortgage
Loans (including without limitation REO Mortgage Loans).
(e) With respect to each Callable Mortgage Loan, none of the Trustee, the
Master Servicer or the Special Servicer shall take any action under the related
Call Option that would make such Mortgage Loan due and owing in its entirety as
of the Call Date.
Section 8.22 Representations, Warranties and Covenants of the Master
Servicer and the Special Servicer.
(a) (i) Master Servicer, in its capacity as Master Servicer hereunder,
hereby represents and warrants to the Trustee, for its own benefit and the
benefit of the Certificateholders, to the Special Servicer and to the Depositor,
as of the Closing Date, that:
(A) Master Servicer is duly organized, validly existing and in good
standing as a limited partnership under the laws of the State of Missouri,
and shall be and thereafter remain, in compliance with the laws of each
State in which any Mortgaged Property is located to the extent necessary to
perform its obligations under this Agreement, except where the failure to
so qualify or comply would not materially adversely affect the Master
Servicer's ability to perform its obligations hereunder in accordance with
the terms of this Agreement;
(B) Master Servicer has the full power and authority to execute,
deliver, perform, and to enter into and consummate all transactions and
obligations of the Master Servicer contemplated by, this Agreement. Master
Servicer has duly and validly authorized the execution, delivery and
performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery thereof by the other parties hereto,
evidences the valid and binding obligation of Master Servicer enforceable
against Master Servicer in
-125-
<PAGE>
accordance with its terms subject, as to enforcement of remedies, (A) to
applicable bankruptcy, reorganization, insolvency, moratorium, receivership
and other similar laws affecting creditors' rights generally as from time
to time in effect, (B) to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at
law) and (C) public policy considerations underlying the securities laws to
the extent that such considerations limit the enforceability of the
provisions of the Agreement that purport to provide for indemnification for
securities law violations;
(C) the execution and delivery of this Agreement, the consummation of
the transactions of the Master Servicer contemplated hereby, and the
fulfillment of or compliance with the terms and conditions of this
Agreement on the part of Master Servicer will not (A) result in a breach of
any term or provision of its charter or by-laws or (B) conflict with,
result in a breach, violation or acceleration of, or result in a default
under, the terms of any material agreement or instrument to which it is a
party or by which it may be bound, or any law, governmental rule,
regulation, or judgment, decree or order applicable to it of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over it, the conflict with which, or the breach, violation,
acceleration or default of which, would materially and adversely affect its
ability to perform its obligations under this Agreement;
(D) no litigation is pending or, to Master Servicer's knowledge,
threatened against it, the outcome of which could reasonably be expected to
materially and adversely affect the execution, delivery and performance by,
or the enforceability against, Master Servicer of this Agreement or its
ability to service the Mortgage Loans or to perform any of its other
obligations hereunder in accordance with the terms hereof;
(E) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Master Servicer of, or compliance by Master Servicer with,
this Agreement, or the consummation of the transactions of the Master
Servicer contemplated hereby, other than any such consents, approvals,
authorizations, orders, qualifications, registrations, filings or notices
as have been obtained, made or given or any consent, approval,
authorization, order, qualification, registration, filing or notice which
is not a pre-condition required with respect to performance by the Master
Servicer but is itself a future obligation of the Master Servicer under
this Agreement (such as, by way of illustration, but not in limitation of
the generality of the foregoing, filing a continuation statement under the
Uniform Commercial Code) or where the lack of such consent, approval,
authorization, qualification, registration, filing or notice would not have
a material adverse effect on the performance of Master Servicer under this
Agreement; and
(F) the performance of the services by the Master Servicer
contemplated by this Agreement are in the ordinary course of business of
the Master Servicer.
(ii) It is understood that the representations and warranties set forth in
this Section 8.22 shall survive the execution and delivery of this Agreement.
(iii) Upon discovery by any of the parties hereto of a breach of any of the
foregoing representations and warranties which materially and adversely affects
the interests of the
-126-
<PAGE>
Certificateholders or any party hereto, the party discovering such breach shall
give prompt written notice to each of the other parties hereto.
(iv) Any successor Master Servicer shall be deemed to have made, as of the
date of its succession, each of the representations set forth in Section
8.22(a), subject to such appropriate modifications to the representation and
warranty set forth in Section 8.22(a)(i)(A) to accurately reflect such
successor's jurisdiction of organization and whether it is a corporation,
partnership, bank, association or other type of organization.
(b) (i) Special Servicer, in its capacity as Special Servicer hereunder,
hereby represents and warrants to the Trustee, for its own benefit and the
benefit of the Certificateholders, to the Master Servicer, and to the Depositor,
as of the Closing Date, that:
(A) Special Servicer is duly organized, validly existing and in good
standing as a corporation under the laws of the State of Connecticut, and
shall be and thereafter remain, in compliance with the laws of each State
in which any Mortgaged Property is located to the extent necessary to
perform its obligations under this Agreement, except where the failure to
so qualify or comply would not materially adversely affect the Special
Servicer's ability to perform its obligations hereunder in accordance with
the terms of this Agreement;
(B) Special Servicer has the full power and authority to execute,
deliver, perform, and to enter into and consummate all transactions and
obligations contemplated by, this Agreement. Special Servicer has duly and
validly authorized the execution, delivery and performance of this
Agreement; and this Agreement, assuming the due authorization, execution
and delivery thereof by the other parties hereto, evidences the valid and
binding obligation of Special Servicer enforceable against Special Servicer
in accordance with its terms subject, as to enforcement of remedies, (A) to
applicable bankruptcy, reorganization, insolvency, moratorium, receivership
and other similar laws affecting creditors' rights generally as from time
to time in effect, (B) to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at
law) and (C) public policy considerations underlying the securities laws to
the extent that such considerations limit the enforceability of the
provisions of the Agreement that purport to provide for indemnification for
securities law violations;
(C) the execution and delivery of this Agreement, the consummation of
the transactions contemplated hereby, and the fulfillment of or compliance
with the terms and conditions of this Agreement on the part of Special
Servicer will not (A) result in a breach of any term or provision of its
charter or by-laws or (B) conflict with, result in a breach, violation or
acceleration of, or result in a default under, the terms of any material
agreement or instrument to which it is a party or by which it may be bound,
or any law, governmental rule, regulation, or judgment, decree or order
applicable to it of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it, which would materially and
adversely affect its ability to perform its obligations under this
Agreement;
(D) no litigation is pending or, to Special Servicer's knowledge,
threatened against it, the outcome of which could reasonably be expected to
materially and adversely affect the execution, delivery and performance by,
or the enforceability against,
-127-
<PAGE>
Special Servicer of this Agreement or its ability to service the Mortgage
Loans or to perform any of its other obligations hereunder in accordance
with the terms hereof;
(E) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Special Servicer of, or compliance by Special Servicer with,
this Agreement, or the consummation of the transactions contemplated
hereby, other than any such consents, approvals, authorizations,
qualifications, registrations, filings or notices as have been obtained or
made or where the lack of such consent, approval, authorization,
qualification, registration, filing or notice would not have a material
adverse effect on the performance of Special Servicer under this Agreement;
and
(F) the performance of the services by the Special Servicer
contemplated by this Agreement are in the ordinary course of business of
the Special Servicer.
(ii) It is understood that the representations and warranties set forth in
this Section 8.22 shall survive the execution and delivery of this Agreement.
(iii) Upon discovery by any of the parties hereto of a breach of any of the
foregoing representations and warranties which materially and adversely affects
the interests of the Certificateholders or any party hereto, the party
discovering such breach shall give prompt written notice to each of the other
parties hereto.
(iv) Any successor Special Servicer shall be deemed to have made, as of the
date of its succession, each of the representations set forth in Section
8.22(b), subject to such appropriate modifications to the representation and
warranty set forth in Section 8.22(b)(i)(A) to accurately reflect such
successor's jurisdiction of organization and whether it is a corporation,
partnership, bank, association or other type of organization.
Section 8.23 Merger or Consolidation. Any Person into which the Master
Servicer or the Special Servicer may be merged or consolidated, or any Person
resulting from any merger, conversion, other change in form or consolidation to
which the Master Servicer or the Special Servicer shall be a party, or any
Person succeeding to substantially all of the business of the Master Servicer or
the Special Servicer, shall be the successor of the Master Servicer or the
Special Servicer, as the case may be, hereunder, without the execution or filing
of any paper or any further act on the part of any of the parties hereto;
provided, however, that each Rating Agency provides the Trustee with written
acknowledgment that none of its ratings of the Certificates in effect
immediately prior to such merger, consolidation, or succession will be
qualified, reduced or withdrawn as a result of such merger, consolidation or
succession provided, further, that notwithstanding the foregoing, in the event
(i) the Person resulting from any merger or consolidation involving the Master
Servicer, or any Person succeeding to substantially all of the business of the
Master Servicer, is not the Master Servicer or an Affiliate of the Master
Servicer, (ii) such Person is not acceptable to Aetna, and (iii) the Aetna or an
Affiliate of Aetna is a Holder of one or more Certificates (other than the Class
R Certificates), Aetna shall have the right to terminate the Master Servicer
without cause, provided that (x) a successor master servicer (other than the
Trustee unless the Trustee shall have expressly agreed to so serve and the
Trustee meets the required qualifications set forth in this Section 8.23)
meeting the qualifications of the first sentence of Section 8.24(b) shall have
assumed the duties and obligations of the Master Servicer hereunder, and (y) the
terminated Master Servicer is paid or reimbursed by such successor master
servicer on or prior to the date of
-128-
<PAGE>
termination for any unreimbursed Advances (with Advance Interest thereon) and
any accrued and unpaid Master Servicing Fees.
Section 8.24 Resignation of Master Servicer or Special Servicer.
(a) Except as otherwise provided in Section 8.24(b) hereof, neither the
Master Servicer nor the Special Servicer shall resign from the obligations and
duties hereby imposed on it, unless there is a determination that its duties
hereunder are no longer permissible under applicable law or are in material
conflict by reason of applicable law with any other activities carried on by it
(the other activities so causing such conflict being of a type and nature
carried on by it at the date of this Agreement). Any such determination
permitting the resignation of the Master Servicer or the Special Servicer shall
be evidenced by an Opinion of Counsel to such effect delivered to the Trustee.
No such resignation shall become effective until a successor servicer designated
by the Trustee, with the consent of the Depositor, shall have assumed the Master
Servicer's or Special Servicer's, as the case may be, responsibilities and
obligations under this Agreement and Rating Agency Confirmation shall have been
obtained. Notice of such resignation shall be given promptly by the Master
Servicer or the Special Servicer, as the case may be, to the Trustee.
(b) The Master Servicer and the Special Servicer may each resign from the
obligations and duties imposed on it, upon 30 days notice to the Trustee,
provided that (i) a successor servicer (other than the Trustee unless the
Trustee shall have expressly agreed to so serve and the Trustee meets the
required qualifications set forth in this Section 8.24) (x) is available, (y)
has assets of at least $15,000,000 and (z) is willing to assume the obligations,
responsibilities, and covenants to be performed hereunder by the resigning party
on substantially the same terms and conditions, and for not more than equivalent
compensation, to that herein provided; (ii) the resigning party bears all costs
associated with its resignation and the transfer of servicing; and (iii) Rating
Agency Confirmation is obtained with respect to such servicing transfer, as
evidenced by a letter delivered to the Trustee by each Rating Agency.
Notwithstanding the foregoing, the Master Servicer may not resign without the
approval of the Operating Advisor.
Upon any such resignation by or downgrade of the debt rating of the Special
Servicer, the Special Servicer may for a period not to exceed 120 days seek to
sell its servicing rights and obligations hereunder to another Person and any
such Person shall be the successor Special Servicer so long as the Trustee shall
have received Rating Agency Confirmation in connection with such appointment.
Section 8.25 Assignment or Delegation of Duties by Master Servicer or the
Special Servicer. The Master Servicer and the Special Servicer shall each have
the right without the prior written consent of the Trustee to assign and
delegate all of its duties hereunder; provided, however, that (i) the Master
Servicer or the Special Servicer, as the case may be, gives the Depositor and
the Trustee notice of such assignment and delegation; (ii) such purchaser or
transferee accepting such assignment and delegation executes and delivers to the
Depositor and the Trustee an agreement accepting such assignment, which contains
an assumption by such Person of the rights, powers, duties, responsibilities,
obligations and liabilities of the Master Servicer or the Special Servicer, as
the case may be, with like effect as if originally named as a party to this
Agreement; (iii) the purchaser or transferee has assets in excess of
$15,000,000; (iv) each Rating Agency provides written acknowledgment that none
of its ratings of the Certificates in effect immediately prior to such
assignment and delegation will be qualified, withdrawn or downgraded as a result
of such assignment and delegation; and (v) the Depositor consents to such
assignment and delegation, such consent not
-129-
<PAGE>
be unreasonably withheld. In the case of any such assignment and delegation in
accordance with the requirements of this Section, the Master Servicer or the
Special Servicer, as the case may be, shall be released from its obligations
under this Agreement, except that the Master Servicer or the Special Servicer,
as the case may be, shall remain liable for all liabilities and obligations
incurred by it as the Master Servicer or the Special Servicer, as the case may
be, hereunder prior to the satisfaction of the conditions to such assignment set
forth in the preceding sentence. Notwithstanding the above, each of the Master
Servicer and the Special Servicer may each appoint Sub-Servicers in accordance
with Section 8.4 hereof and, provided that the Master Servicer or the Special
Servicer remains fully liable for their actions, agents or independent
contractors appointed or retained to perform select duties thereof.
Section 8.26 Limitation on Liability of Master Servicer, Special Servicer
and Others.
(a) None of the Master Servicer, the Special Servicer or any of their
respective directors, officers, employees or agents shall be under any liability
to the holders of the Certificates, the Trust or any other party hereto for any
action taken or for refraining from the taking of any action in good faith using
reasonable business judgment pursuant to this Agreement; provided that this
provision shall not protect the Master Servicer, the Special Servicer or any
such Person against any breach of a representation or warranty contained herein
or any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or negligence in its performance of duties under this
Agreement or by reason of negligent disregard of obligations and duties
hereunder. The Master Servicer, the Special Servicer and any director, officer,
employee or agent of the Master Servicer or the Special Servicer may rely in
good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. Neither the
Master Servicer nor the Special Servicer shall be under any obligation to appear
in, prosecute or defend any legal action which is not incidental to its duties
under this Agreement; provided that the Master Servicer and the Special Servicer
each may in its sole discretion undertake any such action which it may
reasonably deem necessary or desirable in order to protect the interests of the
Certificateholders and the Trustee in the Mortgage Loans for which it is
responsible hereunder or otherwise under this Agreement and shall undertake any
such action if instructed to do so by the Trustee. In such event, all legal
expenses and costs of such action shall be expenses and costs of the Trust, and
the Master Servicer or the Special Servicer, as applicable, shall be entitled to
be reimbursed therefor as an Additional Trust Expense as provided by Section
5.2.
(b) In addition, neither the Master Servicer nor the Special Servicer shall
have any liability with respect to, and each shall be entitled to conclusively
rely as to the truth of the statements made and the correctness of the opinions
expressed therein on, any certificates or opinions furnished to the Master
Servicer or the Special Servicer, as the case may be, and conforming to the
requirements of this Agreement. Subject to the Servicing Standard, the Master
Servicer and the Special Servicer each shall have the right to rely on
information provided to it by the other and by the Mortgagors, and will have no
duty to investigate or verify the accuracy thereof.
(c) Neither the Master Servicer nor the Special Servicer shall be obligated
to incur any liabilities, costs, charges, fees or other expenses which relate to
or arise from any breach of any representation or warranty made by the Depositor
or the Trustee in this Agreement.
-130-
<PAGE>
Section 8.27 Indemnification; Third-Party Claims.
(a) The Master Servicer, the Special Servicer and each of their respective
directors, officers, employees and agents shall be indemnified by the Trust and
held harmless against any and all claims, losses, penalties, fines, forfeitures,
legal fees and related costs, judgments and any other costs, liabilities, fees
and expenses incurred in connection with any legal action brought against the
Master Servicer, the Special Servicer or any such other Person relating to this
Agreement, the Certificates or any asset of the Trust Fund, other than any loss,
liability or expense: (i) specifically required to be borne by such Person
pursuant to the terms hereof; (ii) which constitutes a Servicing Advance (and is
otherwise specifically reimbursable hereunder); or (iii) which was incurred in
connection with claims against such party resulting from (A) any breach of a
representation, warranty or covenant made herein by such party, (B) willful
misfeasance, bad faith or negligence in the performance of obligations or duties
hereunder by such party, or from negligent disregard of such obligations or
duties, or (C) any violation by such party of any state or federal securities
law. Each of the Master Servicer and the Special Servicer shall promptly notify
the Trustee if a claim is made by a third party with respect to this Agreement,
the Certificates or any asset of the Trust Fund entitling the Master Servicer or
the Special Servicer, as the case may be, to indemnification hereunder. Any
failure to so notify the Trustee shall not affect any rights the Master Servicer
or the Special Servicer may have to indemnification under this Agreement or
otherwise. The Master Servicer shall promptly pay from the Collection Account
any payments certified by the Master Servicer or the Special Servicer to the
Trustee as required to be made to the Master Servicer or the Special Servicer,
as the case may be, pursuant to this Section 8.27(a). The indemnification
provided herein shall survive the resignation or termination of the Master
Servicer or the Special Servicer.
(b) The Master Servicer agrees to indemnify the Trust, the Trustee, the
Special Servicer, the Depositor, and any director, officer, employee or agent
thereof, and hold them harmless against any and all claims, losses, penalties,
fines, forfeitures, legal fees and related costs, judgments, and any other
costs, liabilities, fees and expenses that any of them may sustain arising from
or as a result of the willful misfeasance, bad faith or negligence in the
performance of any of the Master Servicer's duties hereunder or by reason of
negligent disregard of the Master Servicer's obligations and duties hereunder.
Each of the Trustee, the Depositor and the Special Servicer shall immediately
notify the Master Servicer if a claim is made by a third party with respect to
this Agreement, the Certificates or any asset of the Trust Fund entitling the
Trust, the Trustee, the Depositor or the Special Servicer, as the case may be,
to indemnification hereunder. Any failure to so notify the Master Servicer shall
not affect any rights the Trust, the Trustee, the Depositor or the Special
Servicer may have to indemnification under this Agreement or otherwise. The
indemnification provided herein shall survive the termination of this Agreement
and the resignation or termination of the Master Servicer, the Special Servicer
and the Trustee.
(c) The Special Servicer agrees to indemnify the Trust, the Trustee, the
Master Servicer, the Depositor, and any director, officer, employee or agent
thereof, and hold them harmless against any and all claims, losses, penalties,
fines, forfeitures, legal fees and related costs, judgments, and any other
costs, liabilities, fees and expenses that any of them may sustain arising from
or as a result of the willful misfeasance, bad faith or negligence in the
performance of any of the Special Servicer's duties hereunder or by reason of
negligent disregard of the Special Servicer's obligations and duties hereunder
by the Special Servicer. Each of the Trustee, the Master Servicer and the
Depositor shall immediately notify the Special Servicer if a claim is made by a
third party with respect to this Agreement, the Certificates or any asset of the
Trust Fund entitling the Trust or
-131-
<PAGE>
the Trustee, the Master Servicer or the Depositor, as the case may be, to
indemnification hereunder. Any failure to so notify the Special Servicer shall
not affect any rights the Trust or the Trustee, the Master Servicer or the
Depositor may have to indemnification under this Agreement or otherwise. The
indemnification provided herein shall survive the termination of this Agreement
and the resignation or termination of the Special Servicer, the Master Servicer
and the Trustee.
Section 8.28 Tax Reporting. From and after the Closing Date, the Special
Servicer shall comply with the Mortgagor tax reporting requirements imposed by
Sections 6050H, 6050J and 6050P of the Code with respect to any Specially
Serviced Mortgage Loan. The Special Servicer shall provide to the Master
Servicer copies of any such reports. The Master Servicer shall forward such
reports to the Trustee.
Section 8.29 Certain Special Servicer Reports.
(a) The Special Servicer, in the case of any Specially Serviced Mortgage
Loans, shall promptly (and at least on a monthly basis) prepare and deliver the
Specially Serviced Asset Report to the Master Servicer no later than one
Business Day after the first Determination Date occurring no earlier than thirty
days after (A) a Servicing Transfer Event, (B) the completion of a modification
which causes a Mortgage Loan to be a Corrected Mortgage Loan or (C) a Final
Recovery Determination, or at any time the Special Servicer determines, in its
sole discretion exercised in good faith, that a material change has occurred
relating to the Specially Serviced Mortgage Loans covered by the previous
Specially Serviced Asset Report. The Specially Serviced Asset Report shall
contain a narrative description for each Specially Serviced Mortgage Loan of the
current status of such Mortgage Loan including the status of any workout or
foreclosure, the change in such status since the prior Specially Serviced Asset
Report, and other information described in Exhibit F-3.
(b) The Special Servicer shall maintain accurate records, prepared by a
Servicing Officer, of each Final Recovery Determination with respect to any
Mortgage Loan or REO Property and the basis thereof. Each Final Recovery
Determination shall be evidenced by an Officer's Certificate delivered to the
Trustee, the Master Servicer and the Operating Adviser no later than the tenth
Business Day following such Final Recovery Determination.
(c) The Special Servicer, for each Specially Serviced Mortgage Loan, shall
provide to the Master Servicer no later than one Business Day after the
Determination Date in each month, a Special Servicer Monthly Report
substantially in the form of Exhibit F-2 or in such electronic format as is
mutually acceptable to the Master Servicer and the Special Servicer. The Master
Servicer may use such reports or information contained therein to prepare its
reports and may, at its option, forward such Special Servicer Monthly Reports
directly to the Trustee, the Depositor, the Operating Adviser and the Rating
Agencies.
(d) The Special Servicer shall provide to the Master Servicer, upon written
request, any information in its possession with respect to the Specially
Serviced Mortgage Loans and REO Properties which the Master Servicer shall
reasonably require in order for the Master Servicer to comply with its
obligations under this Agreement. The Master Servicer will provide the Special
Servicer, at the request of the Special Servicer, with any information in its
possession with respect to the Mortgage Loans which the Special Servicer shall
reasonably require in order for the Special Servicer to comply with its
obligations under this Agreement.
-132-
<PAGE>
(e) The Special Servicer shall deliver to the Master Servicer, the
Depositor, the Trustee and the Operating Adviser all such other information with
respect to the Specially Serviced Mortgage Loans and REO Properties at such
times and to such extent as the Master Servicer, the Depositor, the Trustee or
the Operating Adviser, as the case may be, may reasonably request; provided,
however, that the Special Servicer shall not be required to produce any ad hoc
non-standard written reports with respect to such Mortgage Loans except if any
Person (other than the Depositor, the Trustee or the Master Servicer) requesting
such report pays a reasonable fee to be determined by the Special Servicer.
Section 8.30 Qualification to Service. The Master Servicer and the Special
Servicer shall each keep in full force and effect such qualifications to do
business and any necessary licenses as are necessary to perform its duties under
this Agreement.
Section 8.31 Sale of Defaulted Mortgage Loans and REO Properties.
(a) The Special Servicer shall use its reasonable best efforts to sell any
REO Property in accordance with the Servicing Standard and Section 8.19. If the
Trustee has not received, with respect to such REO Property, an REO Extension or
the Opinion of Counsel referred to in Section 8.19 and the Special Servicer is
not able to sell such REO Property by the REO Sale Deadline, or if an REO
Extension has been granted and the Special Servicer is unable to sell such REO
Property within the extended time period, the Special Servicer shall by the REO
Sale Deadline or by the end of such extended period, as the case may be, auction
the REO Property to the highest bidder (which may be the Special Servicer) in
accordance with the Servicing Standard or to an Interested Person pursuant to
the terms of Section 8.31(b); provided, however, that no Interested Person shall
be permitted to purchase the REO Property at a price less than the Purchase
Price except as provided in Section 8.31(b); and provided, further that if the
Special Servicer intends to bid on any REO Property, (i) the Special Servicer
shall notify the Trustee of such intent, (ii) the Trustee shall promptly obtain,
at the expense of the Trust an Appraisal of such REO Property and (iii) the
Special Servicer shall not bid less than the fair market value set forth in such
Appraisal. Neither the Seller nor the Depositor may purchase such REO Property
at a price in excess of the fair market value thereof.
(b) The Special Servicer may, subject to the limitations in paragraph (d)
below, offer to sell for cash to any Person, for an amount equal to the Purchase
Price therefor, any REO Property or Defaulted Mortgage Loan. In the case of REO
Property, the Special Servicer shall offer to sell such REO Property no later
than the time determined by the Special Servicer to be sufficient to result in
the sale of such REO Property on or prior to the date specified in Section
8.31(a) and in any event prior to the Final Rated Distribution Date. The Special
Servicer shall give the Operating Adviser, if any, and the Trustee not less than
fifteen days' prior written notice of its intention to sell any such Defaulted
Mortgage Loan or REO Property, and in respect of such sale, the Special Servicer
shall offer such Defaulted Mortgage Loan or REO Property for sale in a fair
auction or other manner as is consistent with the Servicing Standard and shall
accept the highest cash bid received in such auction or other procedure from any
Person for any Defaulted Mortgage Loan or REO Property in an amount, except as
otherwise provided in this Section at least equal to the Purchase Price
therefor.
Subject to the last paragraph of this Section 8.31(b), in the absence of a
bid in an amount at least equal to the Purchase Price (after deducting allocable
expenses), the Special Servicer shall accept the highest bid received from any
Person other than the Master Servicer, the Special
-133-
<PAGE>
Servicer or the Operating Adviser, if any, that the Special Servicer determines
to be a fair price for the Defaulted Mortgage Loan or REO Property.
Notwithstanding anything to the contrary herein, neither the Trustee, in its
individual capacity, nor any of its Affiliates may bid for or purchase any
Defaulted Mortgage Loan or any REO Property. The Special Servicer shall not
accept a bid from the Seller or the Depositor unless such bid is in the good
faith judgment of the Special Servicer, equal to (and not greater than) the then
market value of such REO Property or the fair price of the Defaulted Mortgaged
Loan.
The Special Servicer shall not be obligated by either of the foregoing
paragraphs or otherwise to accept the highest cash bid if the Special Servicer
determines, in accordance with the Servicing Standard, that rejection of such
bid would be in the best interests of the Certificateholders. In addition, the
Special Servicer may accept a lower bid (including a bid lower than the Purchase
Price) of a Person other than an Interested Person if it determines, in
accordance with the Servicing Standard, that acceptance of such bid would be in
the best interests of the Certificateholders (for example, if the prospective
buyer making the lower bid is more likely to perform its obligations, or the
terms offered by the prospective buyer making the lower bid are more favorable),
provided, that if any Defaulted Mortgage Loan or REO Property as to which an
Appraisal Reduction has occurred is to be sold by the Special Servicer, then the
Special Servicer shall not accept any bid for such loan or property that is less
than 90% of the appraised value of the related Mortgaged Property (based on the
appraisal used in determining the related Appraisal Reduction). The Special
Servicer shall determine no later than six months prior to the end of the
three-year period referred in Section 8.31(a) with respect to any REO Property
whether a sale of such REO Property pursuant to any bids being made with respect
thereto is in the best economic interests of the Certificateholders as a whole.
If the Special Servicer so determines in accordance with the Servicing Standard
that such a sale would not be in the best interests of the Certificateholders,
the Special Servicer shall seek an extension of such period in the manner
described in Section 8.31(a).
In determining whether any bid received from an Interested Person or
whether the price to be paid by the Special Servicer or any Affiliate thereof
represents a fair price or market value for any Defaulted Mortgage Loan or any
REO Property, the Special Servicer may rely conclusively on the opinion of the
value of such REO Property by an independent MAI-designated appraiser selected
by the Trustee at the expense of the Trust, obtained by the Trustee in
accordance with Section 8.31(a). In determining whether any bid constitutes a
fair price or market value for any Defaulted Mortgage Loan or any REO Property,
the Special Servicer shall take into account, among other factors, the period
and amount of any delinquency on the affected Defaulted Mortgage Loan, the
physical condition of the related Mortgaged Property or such REO Property, the
state of the local economy and the Trust's obligation to dispose of any REO
Property within the three-year period specified in Section 8.31(a).
Notwithstanding any other provision in this Section 8.31, if the Operating
Advisor or the Special Servicer intends to place its bid for an REO Property or
Defaulted Mortgage Loan that has been offered for sale pursuant to this Section
8.31, it shall place such bid with the Trustee. If the bid provided by the
Operating Advisor or, in the absence of a bid by the Operating Advisor, the
Special Servicer, is at least equal to the Purchase Price, the Trustee is hereby
directed to accept such bid. If the bid provided by the Operating Advisor or, in
the absence of a bid by the Operating Advisor, Special Servicer is below the
Purchase Price, the auction procedure provided for in this Section 8.31(b) must
be followed by the Special Servicer. However, even after auction, the Operating
Advisor or, in the absence of a bid by the Operating Advisor, the Special
Servicer, may be the purchaser of a Defaulted Mortgage Loan or a related REO
Property if there has been at least
-134-
<PAGE>
one other bid from a non-affiliated party pursuant to such auction and the
Trustee has determined that the price at which the Operating Advisor or, in the
absence of a bid by the Operating Advisor, the Special Servicer, has bid is at
least equal to the highest bid received at such auction.
(c) Subject to the REMIC Provisions, the Special Servicer shall act on
behalf of the Trust in negotiating and taking any other action necessary or
appropriate in connection with the sale of any Defaulted Mortgage Loan or REO
Property, including the collection of all amounts payable in connection
therewith. Any sale of a Defaulted Mortgage Loan or REO Property shall be
without recourse to, or representation or warranty by, the Trustee, the
Depositor, the Special Servicer, the Master Servicer, or the Trust.
Notwithstanding the foregoing, nothing herein shall limit the liability of the
Master Servicer, the Special Servicer or the Trustee to the Trust and the
Certificateholders for failure to perform its duties in accordance herewith.
None of the Special Servicer, the Master Servicer, the Depositor or the Trustee
shall have any liability to the Trust or any Certificateholder with respect to
the price at which a Defaulted Mortgage Loan is sold if the sale is consummated
in accordance with the terms of this Agreement.
(d) Notwithstanding anything herein to the contrary, the Special Servicer
shall not be required to take or refrain from taking any action pursuant to
instructions from the Operating Adviser that would cause it to violate any term
or provision of this Agreement, the REMIC Provisions or the Servicing Standard.
(e) Within 30 days of the sale of the REO Property, the Special Servicer
shall provide to the Trustee and the Master Servicer a statement of accounting
for such REO Property, including without limitation, (i) the Acquisition Date
for the REO Property, (ii) the date of disposition of the REO Property, (iii)
the sale price and related selling and other expenses, (iv) accrued interest
(including interest deemed to have accrued) on the Specially Serviced Mortgage
Loan to which the REO Property related, calculated from the Acquisition Date to
the disposition date, (v) final property operating statements, and (vi) such
other information as the Trustee may reasonably request in writing.
(f) The Liquidation Proceeds from the final disposition of the REO Property
shall be deposited in the Collection Account within one Business Day of receipt.
(g) Notwithstanding that any Mortgaged Property may be acquired as part of
the Trust through foreclosure, deed in lieu of foreclosure or otherwise, the
related Mortgage Loan will, for purposes of, among other things, determining
Pass-Through Rates of, distributions on and allocations of Realized Losses and
Expense Losses to the Certificates, as well as the amount of Servicing Fees,
Trustee Fees and Special Servicing Fees payable hereunder, be treated as having
remained outstanding until such REO Property is liquidated. In connection
therewith, operating revenues and other proceeds derived from such REO Property
(exclusive of related operating costs) will be applied by the Master Servicer as
principal, interest and other amounts "due" on such Mortgage Loan.
(h) The Special Servicer may perform any of the actions which it is
obligated or entitled to perform pursuant to this Section 8.31 either directly
or through an agent.
-135-
<PAGE>
Section 8.32 Operating Adviser; Elections.
(a) In accordance with Section 8.32(c), the Holders of Certificates
representing more than 50% of the Class Principal Balance of the then
Controlling Class shall be entitled to elect an operating adviser (the
"Operating Adviser") with the powers set forth in Section 8.33. An election of
an Operating Adviser may also be held upon the resignation or removal of any
Person acting as Operating Adviser. The initial Operating Adviser shall be CMBS
Holdings, L.L.C., as initial Holder of 100% of the Class L Certificates.
(b) In the event that there shall be no Operating Advisor, at the request
of the Holders of Certificates representing at least 50% of the Class Principal
Balance of the then Controlling Class, the Trustee shall call a meeting of the
Holders of the Controlling Class for purpose of electing an Operating Adviser.
Notice of the meeting shall be mailed or delivered by the Trustee to each Holder
of Certificates of the Controlling Class not less than 10 nor more than 60 days
prior to the meeting. The notice shall state the place and the time of the
meeting, which may be held by telephone. Holders of Certificates representing a
majority of the Class Principal Balance of the then Controlling Class, present
in person or represented by proxy, shall constitute a quorum for the nomination
of an Operating Adviser. At the meeting, each Holder shall be entitled to
nominate one Person to act as Operating Adviser. The Trustee shall cause the
election of the Operating Adviser to be held as soon thereafter as is reasonably
practicable.
(c) Each Holder of Certificates of the Controlling Class shall be entitled
to vote in each election of the Operating Adviser. The voting in each election
of the Operating Adviser shall be in writing mailed, telecopied, delivered or
sent by courier and actually received by the Trustee on or prior to the date of
such election. Immediately upon receipt by the Trustee of votes (which have not
been rescinded) from the Holders of Certificates representing more than 50% of
the Class Principal Balance of the then Controlling Class which are cast for a
single Person, such Person shall be, upon such Person's acceptance, the
Operating Adviser. The Trustee shall act as judge of each election and, absent
manifest error, the determination of the results of any election by the Trustee
shall be conclusive. Notwithstanding any other provisions of this Section 8.32,
the Trustee may make such reasonable regulations as it may deem advisable for
any election.
(d) The Operating Adviser may be removed at any time by the written vote,
copies of which must be delivered to the Trustee, of the Holders of the
Certificates representing more than 50% of the Class Principal Balance of the
then Controlling Class.
(e) For purposes of electing or removing an Operating Adviser, Certificates
of the Controlling Class held by the Depositor, the Master Servicer or the
Special Servicer or by any Affiliate of any of them shall be taken into account
with the same force and effect as if any other Person held such Certificates.
Section 8.33 Duties of Operating Adviser.
(a) If an Operating Adviser has been elected and is currently acting in
such capacity, then, prior to the Special Servicer's taking any of the following
actions, the Special Servicer shall notify such Operating Adviser of its
intention to take such action at least 5 Business Days prior to the commencement
of any such action:
-136-
<PAGE>
(i) any foreclosure upon or comparable conversion (which may include
acquisition of an REO Property) of the ownership of properties securing
such of the Specially Serviced Mortgage Loans as come into and continue in
default;
(ii) any modification of a Money Term of a Mortgage Loan (other than a
modification consisting of the extension of the original Maturity Date of
such Mortgage Loan for two years or less);
(iii) any sale of a Defaulted Mortgage Loan or REO Property pursuant
to Section 8.31;
(iv) any determination to bring a Mortgaged Property or an REO
Property into compliance with Environmental Laws; and
(v) any acceptance of substitute or additional collateral for a
Mortgage Loan.
(b) The Operating Adviser, if any, may direct the Trustee to remove the
Special Servicer without cause at any time effective upon the appointment and
written acceptance of such appointment by a successor to the Special Servicer
appointed by the Operating Adviser; provided that, prior to the effectiveness of
any such appointment the Operating Adviser and the Trustee shall have received:
(i) Rating Agency Confirmation from each Rating Agency; and (ii) an Opinion of
Counsel (which shall not be an expense of the Trustee or Trust) to the effect
that the designation of such successor to serve as Special Servicer is in
compliance with this Section 8.33(b) and all other applicable provisions of this
Agreement, that upon the execution and delivery of the written acceptance
referred to above, the designated successor shall be bound by the terms of this
Agreement and that this Agreement shall be enforceable against the designated
successor in accordance with its terms. The existing Special Servicer shall be
deemed to have resigned simultaneously with such designated successor's becoming
the Special Servicer hereunder; provided, however, that (i) the resigning
Special Servicer shall continue to be entitled to receive all amounts accrued or
owing to it under this Agreement on or prior to the effective date of such
resignation, whether in respect of Servicing Advances or otherwise, and (ii) it
and its directors, officers, employees and agents shall continue to be entitled
to the benefits of Sections 8.26 and 8.27, notwithstanding any such resignation.
Such resigning Special Servicer shall cooperate with the Trustee and the
replacement Special Servicer in effecting the termination of the resigning
Special Servicer's responsibilities and rights hereunder, including, without
limitation, the transfer within two Business Days to the replacement Special
Servicer for administration by it of all cash amounts that shall at the time be
or should have been deposited in the Collection Account or delivered by the
Special Servicer to the Master Servicer or that are thereafter received with
respect to Specially Serviced Mortgage Loans and REO Properties.
Section 8.34 Exchange Act Reporting. The Trustee shall, on behalf of and at
the expense of the Trust, prepare, execute and file with the Securities and
Exchange Commission any reports, statements and information (with a copy
delivered to the Depositor, the Master Servicer and the Special Servicer) with
respect to the Trust that are required to be filed pursuant to the Exchange Act.
The Master Servicer and the Special Servicer shall reasonably cooperate with the
Trustee in connection with the Trustee's satisfying such reporting requirements.
The Trustee shall, at the expense of the Trust, seek from the Securities and
Exchange Commission a no-action letter or other exemptive relief relating to
reduced reporting requirements in respect of the Trust under the
-137-
<PAGE>
Exchange Act and shall, in accordance with and to the extent permitted by
applicable law, file a Form 15 relating to the automatic termination of
reporting in respect of the Trust under the Exchange Act.
ARTICLE IX
DEFAULT
Section 9.1 Events of Default.
(a) "Event of Default", wherever used herein, means any one of the
following events:
(i) (A) any failure by the Master Servicer to make a required deposit
to the Collection Account which continues unremedied for one Business Day
following the date on which such deposit was first required to be made, or
(B) any failure by the Master Servicer to deposit into, or to remit to the
Trustee for deposit into, the Distribution Account any amount required to
be so deposited or remitted, which failure is not remedied by 11:00 a.m.
(New York City time) on the relevant Distribution Date; or
(ii) any failure by the Special Servicer to deposit into, or to remit
to the Master Servicer for deposit into, the Collection Account any amount
required to be so deposited or remitted under this Agreement which failure
continues unremedied for one Business Day following the date on which such
deposit or remittance was first required to be made; or
(iii) any failure by the Master Servicer to timely make any Servicing
Advance required to be made by it pursuant to this Agreement which
continues unremedied for a period ending on the earlier of (A) 15 days
following the date such Servicing Advance was first required to be made,
and (B) either, if applicable, (1) in the case of a Servicing Advance
relating to the payment of insurance premiums, the day on which such
insurance coverage terminates if such premiums are not paid or (2) in the
case of a Servicing Advance relating to the payment of real estate taxes,
the date of the commencement of a foreclosure action with respect to the
failure to make such payment; or
(iv) any failure on the part of the Master Servicer or the Special
Servicer duly to observe or perform in any material respect any other of
the covenants or agreements on the part of the Master Servicer or the
Special Servicer contained in this Agreement which continues unremedied for
a period of 30 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to (x) the Master
Servicer or the Special Servicer, as the case may be, by the Trustee, or
(y) to the Master Servicer or the Special Servicer, as the case may be, and
the Depositor and the Trustee by the Holders of Certificates entitled to
not less than 25% of the Voting Rights; or
(v) any breach on the part of the Master Servicer or the Special
Servicer of any representation or warranty contained in this Agreement
which materially and adversely affects the interests of any Class of
Certificateholders and which continues unremedied for a period of 30 days
after the date on which notice of such breach, requiring the same to be
-138-
<PAGE>
remedied, shall have been given to (x) the Master Servicer or the Special
Servicer by the Trustee, or to (y) the Master Servicer or the Special
Servicer, as the case may be, and the Depositor and the Trustee by the
Holders of Certificates entitled to not less than 25% of the Voting Rights;
or
(vi) a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises in an involuntary case under any
present or future federal or state bankruptcy, insolvency or similar law
for the appointment of a conservator, receiver, liquidator, trustee or
similar official in any bankruptcy, insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against
the Master Servicer or the Special Servicer and such decree or order shall
have remained in force undischarged or unstayed for a period of 60 days; or
(vii) the Master Servicer or the Special Servicer shall consent to the
appointment of a conservator, receiver, liquidator, trustee or similar
official in any bankruptcy, insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings of or relating to it or of or
relating to all or substantially all of its property; or
(viii) the Master Servicer or the Special Servicer shall admit in
writing its inability to pay its debts generally as they become due, file a
petition to take advantage of any applicable bankruptcy, insolvency or
reorganization statute, make an assignment for the benefit of its
creditors, voluntarily suspend payment of its obligations, or take any
corporate action in furtherance of the foregoing; or
(ix) the Trustee shall have received written notice from either Rating
Agency that the continuation of the Master Servicer or the Special Servicer
in such capacity would result in the downgrade, qualification or withdrawal
of any rating then assigned by such Rating Agency to any Class of
Certificates.
(b) If any Event of Default with respect to the Master Servicer or the
Special Servicer (in either case for purposes of this Section 9.1(b), the
"Defaulting Party") shall occur and be continuing, then, and in each and every
such case, so long as such Event of Default shall not have been remedied, the
Trustee may terminate, and at the written direction of the Holders of
Certificates entitled to at least 51% of the Voting Rights, the Trustee shall
terminate, by notice in writing to the Defaulting Party, with a copy of such
notice to the Depositor, all of the rights and obligations of the Defaulting
Party under this Agreement and in and to the Mortgage Loans and the proceeds
thereof (other than any rights of the Defaulting Party as Certificateholder).
From and after the receipt by the Defaulting Party of such written notice, all
authority and power of the Defaulting Party under this Agreement, whether with
respect to the Certificates (other than as a Holder of any Certificate) or the
Mortgage Loans or otherwise, shall pass to and be vested in the Trustee pursuant
to and under this Section, and, without limitation, the Trustee is hereby
authorized and empowered to execute and deliver, on behalf of and at the expense
of the Defaulting Party, as attorney-in-fact or otherwise, any and all documents
and other instruments, and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement or assignment of the Mortgage
Loans and related documents, or otherwise. The Master Servicer and the Special
Servicer each agrees that if it is terminated pursuant to this Section 9.1(b),
it shall promptly (and in any event no later than ten Business Days subsequent
to its receipt of the notice of termination) provide the Trustee with all
documents and records requested by the
-139-
<PAGE>
Trustee to enable it or a successor servicer to assume the Master Servicer's or
Special Servicer's, as the case may be, functions hereunder, and shall cooperate
with the Trustee in effecting the termination of the Master Servicer's or
Special Servicer's, as the case may be, responsibilities and rights hereunder,
including, without limitation, the transfer within two Business Days to the
Trustee or a successor servicer for administration by it of all cash amounts
which shall at the time be or should have been credited by the Master Servicer
or the Special Servicer, as the case may be, to the Collection Account, the
Distribution Account or any Servicing Account or thereafter be received with
respect to the Mortgage Loans or any REO Property (provided, however, that
notwithstanding the foregoing, the Master Servicer and the Special Servicer each
shall continue to be entitled to receive all amounts accrued or owing to it
under this Agreement on or prior to the date of such termination, whether in
respect of Advances made by it (in the case of the Master Servicer) or
otherwise, and it and its directors, officers, employees and agents shall
continue to be entitled to the benefits of Sections 8.26 and 8.27
notwithstanding any such termination). Upon any such termination, the Special
Servicer may for a period not to exceed 120 days seek to sell its servicing
rights and obligations hereunder to another Person and such Person shall be the
successor Special Servicer so long as the Trustee receives Rating Agency
Confirmation in connection with such appointment.
Section 9.2 Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer or the Special Servicer receives
a notice of termination pursuant to Section 9.1(b), the Trustee shall be the
successor in all respects to the Master Servicer or the Special Servicer, as the
case may be, in its capacity as such under this Agreement and the transactions
set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto and arising thereafter
placed on the Master Servicer or the Special Servicer, as the case may be, by
the terms and provisions hereof, including, without limitation, the Master
Servicer's obligation to make P&I Advances; provided that any failure to perform
such duties or responsibilities caused by the Master Servicer's or the Special
Servicer's failure to provide information or monies required by Section 9.1
shall not be considered a default by the Trustee hereunder. The Trustee shall
not be liable for any of the representations and warranties of the Master
Servicer or the Special Servicer nor shall the Trustee be required to purchase
any Mortgage Loan hereunder. As compensation therefor, the Trustee shall be
entitled to the applicable Servicing Fees (including the Retained Servicing
Interest to the extent reasonably necessary to provide market rate compensation)
and all funds relating to the Mortgage Loans which the Master Servicer or the
Special Servicer would have been entitled to charge to the Collection Account if
the Master Servicer or the Special Servicer had continued to act hereunder.
Notwithstanding the above, the Trustee may, if it shall be unwilling to so act,
or shall, if it is unable to so act or if the Holders of Certificates entitled
to at least 51% of the Voting Rights so request in writing to the Trustee or if
it is not appropriately rated as a master servicer or special servicer, as the
case may be, by each Rating Agency, promptly appoint a mortgage loan servicing
institution that has a net worth of not less than $15,000,000 and is otherwise
acceptable to each Rating Agency (as evidenced by written confirmation therefrom
to the effect that the appointment of such institution would not result in the
downgrade, qualification or withdrawal of any of its ratings then assigned to
the Certificates), as the successor to the Master Servicer or the Special
Servicer, as the case may be, hereunder in the assumption of all or any part of
the responsibilities, duties or liabilities of the Master Servicer or the
Special Servicer, as the case may be, hereunder. No appointment of a successor
to the Master Servicer or the Special Servicer, as the case may be, hereunder
shall be effective until the assumption by the successor to the Master Servicer
or the Special Servicer, as the case may be, of all the responsibilities, duties
and liabilities of the Master Servicer or the Special Servicer, as the case may
be, hereunder. Pending appointment of a successor to the Master Servicer
-140-
<PAGE>
or the Special Servicer, as the case may be, hereunder, the Trustee shall act in
such capacity as hereinabove provided and shall be entitled to such compensation
as would otherwise have been payable to the Master Servicer or the Special
Servicer, as the case may be. In connection with any such appointment and
assumption described herein, the Trustee may make such arrangements for the
compensation of such successor out of payments on REMIC Mortgage Loans or
otherwise as it and such successor shall agree; provided, however, that no such
compensation shall be in excess of that permitted the original Master Servicer
or Special Servicer, as the case may be, hereunder; provided, further, that the
Retained Servicing Interest may be reduced by the Trustee to the extent that all
or a portion of the Retained Servicing Interest is needed by the Trustee in its
discretion in order to obtain a qualified successor Master Servicer selected by
the Trustee willing to receive servicing compensation accruing at a per annum
rate in excess of the Minimum Master Servicing Fee Rate. The Depositor, the
Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.
Section 9.3 Notification to Certificateholders.
(a) Upon any resignation of the Master Servicer or the Special Servicer
pursuant to Section 8.24, any termination of the Master Servicer or the Special
Servicer pursuant to Section 9.1 or any appointment of a successor to the Master
Servicer or the Special Servicer pursuant to Section 9.2, the Trustee shall give
prompt written notice thereof to Certificateholders at their respective
addresses appearing in the Certificate Register.
(b) Not later than the later of (i) 60 days after the occurrence of any
event which constitutes or, with notice or lapse of time or both, would
constitute an Event of Default and (ii) five days after the Trustee discovers or
is notified of the occurrence of such an event, the Trustee shall transmit by
mail to the Depositor and all Certificateholders notice of such occurrence,
unless such default shall have been cured.
Section 9.4 Waiver of Events of Default.
The Holders of Certificates entitled to at least 662/3% of the Voting
Rights allocated to the respective Classes of Certificates affected by any Event
of Default hereunder may waive such Event of Default; provided, however, that an
Event of Default under clause (i) or (ii) of Section 9.1 may be waived only by
all of the Certificateholders. Upon any such waiver of an Event of Default, such
Event of Default shall cease to exist and shall be deemed to have been remedied
for every purpose hereunder; provided, however, that the Trustee shall be
entitled to reimbursement pursuant to Section 7.12 for any costs and expenses
incurred as a result of such Event of Default. No such waiver shall extend to
any subsequent or other Event of Default or impair any right consequent thereon
except to the extent expressly so waived. Notwithstanding any other provisions
of this Agreement, for purposes of waiving any Event of Default pursuant to this
Section 9.4, Certificates registered in the name of the Depositor or any
Affiliate of the Depositor shall be entitled to the same Voting Rights with
respect to the matters described above as they would if any other Person held
such Certificates.
-141-
<PAGE>
ARTICLE X
PURCHASE AND
TERMINATION OF THE TRUST
Section 10.1 Termination of Trust.
(a) Subject to Section 10.3, the Trust and the respective obligations and
responsibilities of the Depositor, the Trustee, the Master Servicer and the
Special Servicer hereunder (other than the obligation of the Trustee to make
payments to Certificateholders on the final Distribution Date pursuant to
Section 6.4 or otherwise as set forth in Section 10.2 and other than the
obligations in the nature of information or tax reporting or tax-related
administrative or judicial contests or proceedings) shall terminate on the
earlier of (i) the later of (A) the final payment or other liquidation of the
last Mortgage Loan held by the Trust and (B) the disposition of the last REO
Property held by the Trust and (ii) the sale of all Mortgage Loans and any REO
Properties held by the Trust in accordance with Section 10.1(b); provided that
in no event shall the Trust created hereby continue beyond the expiration of 21
years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late Ambassador of the United States to the Court of St. James,
living on the date hereof.
(b) As soon as reasonably practical, the Trustee shall give the Operating
Advisor, the Special Servicer, the Depositor, the Master Servicer and the
Holders of the Residual Certificates representing a majority Percentage Interest
in the Class R-I Interests notice of the date when the aggregate Certificate
Principal Balance of the Principal Balances Certificates, after giving effect to
distributions of principal made on the next Distribution Date, will be less than
or equal to 5% of the Initial Pool Balance. The Operating Advisor, the Special
Servicer, the Depositor, the Master Servicer and the Holders of the Residual
Certificates representing a majority Percentage Interest in the Class R-I
Interests shall thereafter be entitled, in that order of priority, to purchase,
in whole only, the Mortgage Loans and any REO Properties then remaining in the
Trust Fund. If any such party desires to exercise such option, it will notify
the Trustee who will notify any other such party with a prior right to exercise
such option. If any such party that has been so provided notice by the Trustee
notifies the Trustee within ten Business Days after receiving notice of the
proposed purchase that it wishes to purchase the assets of the Trust, then such
party (or, in the event that more than one of such parties notifies the Trustee
that it wishes to purchase the assets of the Trust, the party with the first
right to purchase the assets of the Trust) may purchase the assets of the Trust
in accordance with this Agreement. The "Termination Price" shall equal the
greater of (x) the sum of (i) the aggregate Purchase Price of all the remaining
Mortgage Loans (other than REO Mortgage Loans and Mortgage Loans as to which a
Final Recovery Determination has been made) held by the Trust, plus (ii) the
appraised value of each remaining REO Property, if any, held by the Trust (such
appraisal to be conducted by an Independent MAI-designated appraiser selected by
the Master Servicer and approved by the Trustee), minus (iii) solely in the case
where the Master Servicer is effecting such purchase, the aggregate amount of
unreimbursed Advances made by the Master Servicer, together with any Advance
Interest accrued and payable to the Master Servicer in respect of such Advances
and any unpaid Master Servicing Fees remaining outstanding (which items shall be
deemed to have been paid or reimbursed to the Master Servicer in connection with
such purchase); (y) the fair market value of all remaining assets of the Trust
Fund; and (z) the amount that would be sufficient to pay the outstanding
Certificate Principal Balance of each Class of Certificates, Distributable
Certificate Interest thereon, and Distributable Certificate Interest on the
Class IO Certificates for the final Distribution Date.
-142-
<PAGE>
In the event that the Operating Advisor, the Special Servicer, the
Depositor, the Master Servicer or the Holders of the Residual Certificates
representing a majority Percentage Interest in the Class R-I Interests purchase
all of the remaining Mortgage Loans and REO Properties held by the Trust in
accordance with the preceding paragraph, the party effecting such purchase (the
"Final Purchaser") shall deposit in the Collection Account not later than the
Determination Date relating to the Distribution Date on which the final
distribution on the Certificates is to occur, an amount in immediately available
funds equal to the Termination Price. Upon confirmation that such deposit has
been made, the Trustee shall release or cause to be released to the Final
Purchaser or its designee the Mortgage Files for the remaining Mortgage Loans
and shall execute all assignments, endorsements and other instruments furnished
to it by the Final Purchaser as shall be necessary to effectuate transfer of the
remaining Mortgage Loans and REO Properties held by the Trust, in each case
without representation or warranty by the Trustee. All Servicing Files for the
remaining Mortgage Loans and REO Properties shall be delivered to the Final
Purchaser or its designee.
(c) As a condition to the purchase of the assets of the Trust pursuant to
Section 10.1(b), the Final Purchaser must deliver to the Trustee an Opinion of
Counsel, which shall be at the expense of the Final Purchaser, stating that such
termination will be a "qualified liquidation" under section 860F(a)(4) of the
Code. Such purchase shall be made in accordance with Section 10.3.
Section 10.2 Procedure Upon Termination of Trust.
(a) Notice of any termination pursuant to the provisions of Section 10.1,
specifying the Distribution Date upon which the final distribution shall be
made, shall be given promptly by the Trustee to each Rating Agency and each
Certificateholder by first class mail no later than ten days prior to the date
of such termination. Such notice shall specify (A) the Distribution Date upon
which final distribution on the Certificates will be made and (B) that the
Record Date otherwise applicable to such Distribution Date is not applicable,
distribution being made only upon presentation and surrender of the Certificates
at the office or agency of the Trustee therein specified. The Trustee shall give
such notice to the Depositor and the Certificate Registrar at the time such
notice is given to Certificateholders. Upon any such termination, the Trustee
shall terminate, or request the Master Servicer to terminate, the Collection
Account and the Distribution Account and any other account or fund maintained
with respect to the Certificates, subject to the Trustee's obligation hereunder
to hold all amounts payable to the nontendering Certificateholders in trust
without interest pending such payment.
(b) On the final Distribution Date, the Trustee shall distribute to each
Certificateholder that presents and surrenders its Certificates all amounts
payable on such Certificates on such final Distribution Date in accordance with
Section 6.4.
(c) In the event that all of the Holders do not surrender their
Certificates for cancellation within three months after the time specified in
the above-mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
one year after the second notice any Certificates shall not have been
surrendered for cancellation, the Trustee may take appropriate steps to contact
the nontendering Certificateholders concerning surrender of their Certificates,
and the cost thereof shall be paid out of the amounts distributable to such
Holders. If within two years after the second notice any such Certificates shall
not have been surrendered for cancellation, the Trustee shall, subject to
applicable state law relating to escheat, hold all amounts distributable to such
Holders for the benefit of such Holders. No interest shall accrue on any amount
-143-
<PAGE>
held by the Trustee and not distributed to a Certificateholder due to such
Certificateholder's failure to surrender its Certificate(s) for payment of the
final distribution thereon in accordance with this Section. Any money held by
the Trustee pending distribution under this Section 10.2 after 90 days after the
adoption of a plan of complete liquidation shall be deemed for tax purposes to
have been distributed from the REMICs and shall be beneficially owned by the
related Holder.
Section 10.3 Additional Trust Termination Requirements.
(a) In the event of a purchase of all the remaining Mortgage Loans and REO
Properties held by the Trust in accordance with Section 10.1, the Trust and each
REMIC Pool shall be terminated in accordance with the following additional
requirements, unless, in the case of a termination in accordance with Section
10.1(b), the Final Purchaser delivers to the Trustee an Opinion of Counsel (at
the expense of the Final Purchaser) addressed to the Depositor and the Trustee
to the effect that the failure of the Trust to comply with the requirements of
this Section 10.3 will not (i) result in the imposition of taxes on "prohibited
transactions" of any REMIC Pool under the REMIC Provisions or (ii) cause any
REMIC Pool to fail to qualify as a REMIC at any time that any Certificates are
outstanding:
(i) within 89 days prior to the final Distribution Date set forth in
the notice given by the Trustee under Section 10.2, the Trustee shall adopt
a plan of complete liquidation prepared by the Final Purchaser and meeting
the requirements for a qualified liquidation for each REMIC Pool under
Section 860F of the Code and any regulations thereunder;
(ii) during such 90-day liquidation period and at or after the
adoption of the plans of complete liquidation and at or prior to the final
Distribution Date, the Trustee shall sell all of the remaining Mortgage
Loans and any REO Properties held by the Trust to the Final Purchaser for
cash in an amount equal to the Termination Price, such cash shall be
deposited into the Collection Account, shall be deemed distributed on the
REMIC I Regular Interests in retirement thereof, shall be deemed
distributed on the REMIC II Regular Interests in retirement thereof, and
shall be distributed to the Certificateholders in retirement of the
Certificates;
(iii) at the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited, to the Holders of the related Class of Residual
Certificates all cash on hand in each REMIC Pool after making such final
deemed payment or payments (other than cash retained to meet claims), and
REMIC I, REMIC II and REMIC III shall terminate at that time; and
(iv) in no event may the final payment on the REMIC I Interests, the
REMIC II Interests, the Regular Certificates, or the Residual Certificates
be made after the 89th day from the date on which such plans of complete
liquidation are adopted. The Trustee shall specify the first day of the
90-day liquidation period in a statement attached to the final Tax Return
for each REMIC Pool pursuant to Treasury regulation 1.860F-1.
(b) By their acceptance of Certificates, the Holders thereof hereby agree
to authorize the Trustee to adopt a plan of complete liquidation of REMIC I,
REMIC II and REMIC III, which authorization shall be binding upon all successor
Certificateholders.
-144-
<PAGE>
ARTICLE XI
RIGHTS OF CERTIFICATEHOLDERS
Section 11.1 Limitation on Rights of Holders.
(a) The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust, nor entitle such Certificateholder's
legal representatives or heirs to claim an accounting or take any action or
proceeding in any court for a partition or winding up of the Trust, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
(b) Except as otherwise expressly provided herein, no Certificateholder,
solely by virtue of its status as a Certificateholder, shall have any right to
vote or in any manner otherwise control the Master Servicer, the Special
Servicer or the operation and management of the Trust, or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Certificates, be construed so as to constitute the Certificateholders
from time to time as partners or members of an association, nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
(c) No Certificateholder, solely by virtue of its status as
Certificateholder, shall have any right by virtue or by availing of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement unless the
Holders of Certificates entitled to not less than 25% of the Voting Rights shall
have made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the cost, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for sixty
days after its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or proceeding and
no direction inconsistent with such written request has been given the Trustee
during such sixty-day period by such Certificateholders; it being understood and
intended, and being expressly covenanted by each Certificateholder with every
other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatsoever by virtue or by
availing of any provision of this Agreement to affect, disturb or prejudice the
rights of the Holders of any other of such Certificates, or to obtain or seek to
obtain priority over or preference to any other such Holder, or to enforce any
right under this Agreement, except in the manner herein provided and for the
benefit of all Certificateholders. For the protection and enforcement of the
provisions of this Section, each and every Certificateholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.
Section 11.2 Access to List of Holders.
(a) If the Trustee is not acting as Certificate Registrar, the Certificate
Registrar will furnish or cause to be furnished to the Trustee, within fifteen
days after receipt by the Certificate Registrar of a request by the Trustee in
writing, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Certificateholders of each Class as of the most
recent Record Date.
-145-
<PAGE>
(b) If the Depositor, the Operating Adviser, the Special Servicer, the
Master Servicer or three or more Holders (hereinafter referred to as
"applicants," with a single Person which (together with its Affiliates) is the
Holder of more than one Class of Certificates being viewed as a single
"applicant" for these purposes) apply in writing to the Trustee, and such
application states that the applicants desire to communicate with other Holders
with respect to their rights under this Agreement or under the Certificates and
is accompanied by a copy of the communication which such applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt of
such application, send, at such Person's expense, the written communication
proffered by the applicants to all Certificateholders at their addresses as they
appear in the Certificate Register. The Depositor, the Master Servicer and the
Special Servicer may each obtain, upon request, from the Trustee and the
Certificate Registrar a copy of the Certificate Register.
(c) Every Holder, by receiving and holding a Certificate, agrees with the
Depositor, the Certificate Registrar and the Trustee that neither the Depositor,
the Certificate Registrar nor the Trustee shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Certificateholders hereunder, regardless of the source from which such
information was derived.
Section 11.3 Acts of Holders of Certificates.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Depositor. Such instrument or
instruments (as the action embodies therein and evidenced thereby) are herein
sometimes referred to as an "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agents shall be sufficient for any purpose of this Agreement
and conclusive in favor of the Trustee and the Depositor, if made in the manner
provided in this Section. The Trustee agrees to promptly notify the Depositor of
any such instrument or instruments received by it, and to promptly forward
copies of the same.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by
the certificate of any notary public or other officer authorized by law to take
acknowledgments or deeds, certifying that the individual signing such instrument
or writing acknowledged to such notary public or other officer the execution
thereof. Whenever such execution is by an officer of a corporation or a member
of a partnership on behalf of such corporation or partnership, such certificate
or affidavit shall also constitute sufficient proof of such officer's or
member's authority. The fact and date of the execution of any such instrument or
writing, or the authority of the individual executing the same, may also be
proved in any other manner which the Trustee deems sufficient.
(c) The ownership of Certificates (notwithstanding any notation of
ownership or other writing thereon made by anyone other than the Trustee) shall
be proved by the Certificate Register, and neither the Trustee nor the Depositor
shall be affected by any notice to the contrary.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Certificate shall bind every future Holder
of the same Certificate
-146-
<PAGE>
and the Holder of every Certificate issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof, in respect of anything done,
omitted or suffered to be done by the Trustee or the Depositor in reliance
thereon, whether or not notation of such action is made upon such Certificate.
ARTICLE XII
REMIC ADMINISTRATION
The provisions of this Article XII shall apply to each REMIC Pool.
Section 12.1 REMIC Administration.
(a) An election will be made by the Trustee to treat the segregated pool of
assets consisting of the REMIC Mortgage Loans, such amounts as shall from time
to time be held in the Collection Account and the Distribution Account in
respect thereof (other than any amounts attributable to Non-REMIC Assets or
Non-REMIC Fees), the Insurance Policies (to the extent related to the REMIC
Mortgage Loans) and any REO Properties acquired in connection with servicing a
REMIC Mortgage Loan as a REMIC under the Code. Such election will be made on
Form 1066 or other appropriate federal tax or information return or any
appropriate state return for the taxable year ending on the last day of the
calendar year in which the REMIC I Interests are issued. For purposes of such
election, the forty REMIC I Regular Interests (each of which corresponds to and
represents beneficial ownership of a separate REMIC Mortgage Loan) each is
designated as a separate class of "regular interests" in REMIC I and the Class
R-I Interest is designated as the sole class of "residual interests" in REMIC I.
An election will be made by the Trustee to treat the segregated pool of
assets consisting of the REMIC I Regular Interests as a REMIC under the Code.
Such election will be made on Form 1066 or other appropriate federal tax or
information return or any appropriate state return for the taxable year ending
on the last day of the calendar year in which the REMIC II Interests are issued.
For the purposes of such election, each of the REMIC II Regular Interests
(consisting of the Class A-1A Regular Interests, the Class A-1B Regular
Interests, the Class A-2 Regular Interests, the Class B Regular Interests, the
Class C Regular Interests, the Class D Regular Interests, the Class E Regular
Interests, the Class F Regular Interests, the Class G Regular Interests, the
Class H Regular Interests, the Class J Regular Interests, the Class K Regular
Interests and the Class L Regular Interests) is designated as a separate class
of "regular interests" in REMIC II and the Class R-II Interest is designated as
the sole class of "residual interests" in REMIC II.
An election will be made by the Trustee to treat the segregated pool of
assets consisting of the REMIC II Regular Interests as a REMIC under the Code.
Such election will be made on Form 1066 or other appropriate federal tax or
information return or any appropriate state return for the taxable year ending
on the last day of the calendar year in which the REMIC III Certificates are
issued. For purposes of such election, the Class A-1A, Class A-1B, Class A-2,
Class IO, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class
J, Class K and Class L Certificates are designated as the "regular interests" in
REMIC III and the Class R-III Interest is designated as the sole class of
"residual interests" in REMIC III. The Class R-I Interest, the Class R-II
Interest and the Class R-III Interest initially shall be represented by the
Class R Certificate.
-147-
<PAGE>
The Trustee shall not permit the creation of any "interests" (within the
meaning of Section 860G of the Code) in any of the REMIC Pools other than the
REMIC I Regular Interests, the REMIC II Regular Interests and the interests
evidenced by the REMIC III Certificates and the Class R Certificate.
(b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC Pool within the meaning of Section 860G(a)(9) of the Code.
(c) The Trustee shall pay all routine tax related expenses (not including
any taxes, however denominated, or any additions to tax, penalties or interest)
of each REMIC Pool, excluding any professional fees or extraordinary expenses
related to audits or any administrative or judicial proceedings with respect to
each REMIC Pool that involve the Internal Revenue Service or state tax
authorities under Applicable State Law.
(d) The Trustee shall cause to be prepared, signed, and timely filed with
the Internal Revenue Service, on behalf of each REMIC Pool, an application for a
taxpayer identification number for such REMIC Pool on Internal Revenue Service
Form SS-4. The Trustee, upon receipt from the Internal Revenue Service of the
Notice of Taxpayer Identification Number Assigned, shall promptly forward a copy
of such notice to the Depositor and the Master Servicer. The Trustee shall
prepare and file Form 8811 promptly following the Closing Date on behalf of each
REMIC Pool and shall designate an appropriate Person to respond to inquiries by
or on behalf of Certificateholders for original issue discount and related
information in accordance with applicable provisions of the Code.
(e) The Trustee shall prepare, execute and file all of each REMIC Pool's
federal and state income or franchise tax and information returns under
Applicable State Law as such REMIC Pool's direct representative; the expenses of
preparing and filing such returns shall be borne by the Trustee. The Depositor,
the Master Servicer and the Special Servicer shall each provide on a timely
basis to the Trustee or its designee such information with respect to the Trust
or any REMIC Pool as is in the Depositor's, the Master Servicer's or the Special
Servicer's, as the case may be, possession, which the Depositor, the Master
Servicer or the Special Servicer, as the case may be, has received or prepared
by virtue of its acting in such capacity hereunder and which is reasonably
requested by the Trustee to enable it to perform its obligations under this
subsection, and the Trustee shall be entitled to conclusively rely on such
information in the performance of its obligations hereunder. The Depositor shall
indemnify the Trust and the Trustee for any liability or assessment against
either of them or any cost or expense (including attorneys' fees) incurred by
either of them resulting from any error resulting from bad faith, negligence, or
willful malfeasance of the Depositor in providing any information for which the
Depositor is responsible for preparing. The Master Servicer and the Special
Servicer shall each indemnify the Trust, the Trustee and the Depositor for any
liability or assessment against the Trust, the Trustee or the Depositor, as the
case may be, and any expenses incurred in connection with such liability or
assessment (including attorney's fees) resulting from any error in any of such
tax or information returns resulting from errors in the information provided by
the Master Servicer or the Special Servicer, as the case may be, caused by the
negligence, willful misconduct or bad faith of the Master Servicer or the
Special Servicer, as the case may be. The Trustee shall be liable to the Trust,
the Master Servicer, the Special Servicer and the Depositor for any expense
incurred by the Trust, the Master Servicer, the Special Servicer or the
Depositor resulting from any error in any of such tax or information returns
resulting from errors in the preparation of such returns caused by the
negligence, willful misconduct or bad faith of the Trustee. Each indemnified
party shall immediately notify the indemnifying party
-148-
<PAGE>
or parties of the existence of a claim for indemnification under this Section
12.1(e), and provide the indemnifying party or parties, at the expense of such
indemnifying party or parties, an opportunity to contest the tax or assessment
or expense giving rise to such claim, provided that the failure to give such
notification rights shall not affect the indemnification rights in favor of the
Trust under this Section 12.1(e). Any such indemnification shall survive the
resignation or termination of the Master Servicer, the Special Servicer and the
Trustee or the termination of this Agreement.
(f) The Trustee shall perform on behalf of each REMIC Pool all reporting
and other tax compliance duties that are the responsibility of such REMIC Pool
under the Code, REMIC Provisions, or other compliance guidance issued by the
Internal Revenue Service or any state or local taxing authority under Applicable
State Law. Among its other duties, the Trustee shall provide (i) to the Internal
Revenue Service or other Persons (including, but not limited to, any Person that
transferred a Residual Certificate to a Disqualified Organization or to an agent
that has acquired a Residual Certificate on behalf of a Disqualified
Organization) such information as is necessary for the application of any tax
relating to the transfer of a Residual Certificate to any Disqualified
Organization and (ii) to the Certificateholders such information or reports as
are required by the Code or REMIC Provisions.
(g) The Trustee shall forward to the Depositor copies of quarterly and
annual REMIC tax returns and Form 1099 information returns and such other
information within the control of the Trustee as the Depositor may reasonably
request in writing. Moreover, the Trustee shall forward to Certificateholders
such forms and furnish such information within its control as are required by
the Code to be furnished to them, shall prepare and file with the appropriate
state authorities such forms as may to the actual knowledge of a Responsible
Officer of the Trustee be required by applicable law and shall prepare and
disseminate to Certificateholders Forms 1099 (or otherwise furnish information
within the control of the Trustee) to the extent required by applicable law. The
Trustee will make available to any Certificateholder any tax related information
required to be made available to such Certificateholder pursuant to the Code and
any Treasury Regulations thereunder.
(h) The Holder of Certificates representing the greatest Percentage
Interest in each Class of Residual Certificates shall be the Tax Matters Person
for the related REMIC Pool. The duties of the Tax Matters Person for each of the
REMIC Pools are hereby delegated to the Trustee, and each Residual
Certificateholder, by acceptance of its Residual Certificate, agrees, on behalf
of itself and all successor holders of such Residual Certificate, to such
delegation to the Trustee as their agent and attorney in fact. If the Code or
applicable Treasury regulations prohibits the Trustee from signing any
applicable Internal Revenue Service, court or other administrative documents or
from otherwise acting as Tax Matters Person (as an agent or otherwise), the
Trustee shall do or cause to be done whatever is necessary for the signing of
such documents and the taking of any other such act, and the Residual
Certificateholders shall reasonably cooperate with the Trustee in connection
therewith. The Trustee shall not be required to expend or risk its own funds or
otherwise incur any other financial liability in the performance of its duties
hereunder or in the exercise of any of its rights or powers (except to the
extent of the ordinary expenses of performing its duties under, or as otherwise
expressly provided in, this Agreement), if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.
(i) The Trustee, the Holders of the Residual Certificates, the Master
Servicer and the Special Servicer shall each exercise reasonable care, to the
extent within its control, and with
-149-
<PAGE>
respect to each of the Trustee, the Master Servicer and the Special Servicer,
within the scope of its express duties, and shall each act in accordance with
this Agreement and the REMIC Provisions in order to create and maintain the
status of each REMIC Pool as a REMIC or, as appropriate, adopt a plan of
complete liquidation in accordance with the REMIC Provisions and Article X
hereof.
(j) The Trustee, the Master Servicer, the Special Servicer and the Holders
of Residual Certificates shall not take any action or fail to take any action or
cause any REMIC Pool to take any action or fail to take any action if any of
such Persons knows or could, upon the exercise of reasonable diligence, know,
that, under the REMIC Provisions, such action or failure to act, as the case may
be, could (i) endanger the status of any REMIC Pool as a REMIC or (ii) except as
otherwise provided in Section 8.20(a), result in the imposition of a tax upon
any REMIC Pool (including but not limited to the tax on prohibited transactions
as defined in Section 860F(a)(2) of the Code), unless the Trustee has received
an Opinion of Counsel (at the expense of the party seeking to take such action)
to the effect that the contemplated action will not endanger such status or
result in the imposition of such a tax. Any action required under this section
which would result in an unusual or unexpected expense shall be undertaken at
the expense of the party seeking the Trustee, the Master Servicer, the Special
Servicer or the Holders of the Residual Certificates to undertake such action.
(k) In the event that any tax is imposed on REMIC I, REMIC II or REMIC III,
including, without limitation, "prohibited transactions" taxes as defined in
Section 860F(a)(2) of the Code, any tax on "net income from foreclosure
property" as defined in Section 860G(c) of the Code, any taxes on contributions
to REMIC I, REMIC II or REMIC III after the Startup Day pursuant to Section
860G(d) of the Code, and any other tax imposed by the Code or any applicable
provisions of state or local tax laws (other than any tax permitted to be
incurred by the Special Servicer pursuant to Section 8.20(a)), such tax,
together with all incidental costs and expenses (including, without limitation,
penalties and reasonable attorneys' fees), shall be charged to and paid by: (i)
the Trustee, if such tax arises out of or results from its negligence, willful
misconduct or bad faith in respect of any of its obligations under this
Agreement; (ii) the Special Servicer, if such tax arises out of or results from
the negligence, willful misconduct or bad faith of the Special Servicer with
respect to any of its obligations under this Agreement; (iii) the Master
Servicer, if such tax arises out of or results from the negligence, willful
misconduct or bad faith of the Master Servicer with respect to any of its
obligations under this Agreement; or (iv) the Trust in all other instances. Any
tax permitted to be incurred by the Special Servicer pursuant to Section 8.20(a)
shall be charged to and paid by the Master Servicer (at the direction of the
Trust) from the net income generated on the related REO Property. Any such
amounts payable by the Trust in respect of taxes shall be paid by the Master
Servicer (at the direction of the Trustee) out of amounts on deposit in the
Collection Account.
(l) The Trustee shall, for federal income tax purposes, maintain books and
records with respect to each REMIC Pool on a calendar year and on an accrual
basis. The books and records must be sufficient concerning the nature and amount
of each REMIC Pool's investments to show that such REMIC Pool has complied with
the REMIC Provisions.
(m) None of the Trustee, the Master Servicer or the Special Servicer shall
enter into any arrangement by which any REMIC Pool will receive a fee or other
compensation for services (other than under the circumstances described in, and
subject to the conditions of, Section 8.20(a)).
-150-
<PAGE>
(n) In order to enable the Trustee to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Trustee
within ten (10) days after the Closing Date all information or data that the
Trustee reasonably determines to be relevant for tax purposes on the valuations
and offering prices of the Certificates, including, without limitation, the
yield, prepayment assumption, issue prices and projected cash flows of the
Senior Certificates, Subordinate Certificates and Residual Certificates, as
applicable, and the projected cash flows of the Mortgage Loans. Thereafter, the
Depositor shall provide to the Trustee or its designee, promptly upon request
therefor, any such additional information or data within the Depositor's
possession or knowledge that the Trustee may, from time to time, reasonably
request in order to enable the Trustee to perform its duties as set forth
herein. The Trustee is hereby directed to use any and all such information or
data provided by the Depositor in the preparation of all federal and state
income or franchise tax and information returns and reports for each REMIC Pool
to Certificateholders as required herein. The Depositor hereby indemnifies the
Trustee and each REMIC Pool for any losses, liabilities, damages, claims,
expenses (including attorneys' fees) or assessments against the Trustee and each
REMIC Pool arising from any errors or miscalculations of the Trustee pursuant to
this Section that result from any failure of the Depositor to provide, or to
cause to be provided, accurate information or data to the Trustee (but not
resulting from the methodology employed by the Trustee) on a timely basis and
such indemnification shall survive the termination of this Agreement and the
termination or resignation of the Trustee; provided, however, that to the extent
that any Certificates have been transferred to the Seller under circumstances in
which the fair market value of such Certificates is their issue price, the
Depositor may exclusively rely on the accuracy of a determination of such fair
market value by the Seller in supplying information to the Trustee pursuant to
this Section 12.1(n).
The Trustee agrees that all such information or data so obtained by it is
to be regarded as confidential information and agrees that it shall use its best
reasonable efforts to retain in confidence, and shall ensure that its officers,
employees and representatives retain in confidence, and shall not disclose,
without the prior written consent of the Depositor, any or all of such
information or data, or make any use whatsoever (other than for the purposes
contemplated by this Agreement) of any such information or data without the
prior written consent of the Depositor, unless such information is generally
available to the public (other than as a result of a breach of this Section
12.1(n)) or is required by law or applicable regulations to be disclosed or is
disclosed (i) to independent auditors and accountants, counsel and other
professional advisers of the Trustee and its parent, or (ii) in connection with
enforcing its rights and obligations under this Agreement.
(o) At all times as may be required by the Code, the Trustee, the Master
Servicer and the Special Servicer each shall, to the extent within its control
and the scope of its duties more specifically set forth herein, maintain the
assets of each REMIC Pool as "qualified mortgages" as defined in Section
860G(a)(3) of the Code and "permitted investments" as defined in Section
860G(a)(5) of the Code.
(p) The Holders of the Residual Certificates representing the Class R-I,
Class R-II and Class R-III Interests shall pay when due their pro rata share of
any and all federal, state and local taxes imposed on REMIC I, REMIC II or REMIC
III, as applicable, or their respective assets or transactions, including,
without limitation, "prohibited transaction" taxes, as defined in Section 860F
of the Code, any tax on contributions imposed by Section 860G(d) of the Code,
and any tax on "net income from foreclosure property" as defined in Section
860G(c) of the Code. To the extent that such taxes are not paid by such Holders,
such remaining REMIC taxes shall be paid out of
-151-
<PAGE>
current or future amounts otherwise distributable to the respective Holder or
out of other amounts held in the Collection Account or Distribution Account.
(q) Upon the request of the Holder of the Class R Certificate, the Trustee
shall, in accordance with Section 3.3 hereof, exchange the Class R Certificate
for, and issue to such Holder, three separate classes of certificates designated
as the Class R-I Certificates, the Class R-II Certificates and the Class R-III
Certificates (in the form of the Class R-I Certificate, the Class R-II
Certificate and the Class R-III Certificate attached hereto as Exhibit A-18,
Exhibit A-19 and Exhibit A-20, respectively), representing, respectively, the
Class R-I Interests, the Class R-II Interests and the Class R-III Interests,
with the respective rights that the Holders of the Residual Certificates
representing such interests have pursuant to the Class R Certificate and this
Agreement.
Section 12.2 Prohibited Transactions and Activities. None of the Trustee,
the Master Servicer or the Special Servicer shall, to the extent within its
control, permit the sale, disposition or substitution of any of the Mortgage
Loans (except in a disposition pursuant to (i) the foreclosure, default or
imminent default of a Mortgage Loan, (ii) the bankruptcy or insolvency of any
REMIC Pool, (iii) the termination of any REMIC Pool in a "qualified liquidation"
as defined in Section 860F(a)(4) of the Code, or (iv) a repurchase or
substitution by the Seller, as contemplated by Article II hereof), nor acquire
any assets for the Trust, except as provided in Article II hereof, nor sell or
dispose of any investments in the Collection Account or Distribution Account for
gain, nor accept any contributions to any REMIC Pool (other than a cash
contribution during the 3-month period beginning on the Startup Day), unless it
has received an Opinion of Counsel (at the expense of the Person requesting such
action) to the effect that such sale, disposition, acquisition, substitution, or
acceptance will not (a) affect adversely the status of any REMIC Pool as a REMIC
or of the REMIC I Regular Interests, the REMIC II Regular Interests or the REMIC
III Regular Certificates, as the case may be, as the regular interests therein,
(b) affect the distribution of interest or principal on the Certificates, (c)
result in the encumbrance of the assets transferred or assigned to any REMIC
Pool (except pursuant to the provisions of this Agreement) or (d) cause any
REMIC Pool to be subject to a tax on "prohibited transactions" or "prohibited
contributions" or other tax pursuant to the REMIC Provisions (except for the tax
on "net income from foreclosure property" to the extent permitted in Section
8.20(a)).
Section 12.3 Liability with Respect to Certain Taxes and Loss of REMIC
Status. In the event that any REMIC Pool fails to qualify as a REMIC, loses its
status as a REMIC, or incurs state or local taxes, or tax as a result of a
prohibited transaction or prohibited contribution subject to taxation under the
REMIC Provisions due to the negligent performance by the Trustee of its duties
and obligations set forth herein, the Trustee shall be liable to the REMIC Pools
and the Holders of the Residual Certificates for any and all losses, claims,
damages, liabilities or expenses ("Losses") resulting from such negligence and
relating to the Residual Certificates; provided, however, that the Trustee shall
not be liable pursuant to this Section 12.3 to the extent that any such Losses
are attributable to the action or inaction of the Master Servicer, the Special
Servicer, the Depositor or the Holders of the Residual Certificates or to the
extent that any such Losses result from any actions or failure to act based upon
reliance on an Opinion of Counsel or from misinformation provided by the Master
Servicer, the Special Servicer, the Depositor or the Holders of the Residual
Certificates on which the Trustee has relied. The foregoing shall not be deemed
to limit or restrict the rights and remedies of the Trust or the
Certificateholders under any other provision of this Agreement or now or
hereafter otherwise existing at law or in equity. The Trustee shall be entitled
to intervene in any litigation in connection with the foregoing and to maintain
control over its defense.
-152-
<PAGE>
Section 12.4 Modifications of Mortgage Loans. Notwithstanding anything to
the contrary in this Agreement, neither the Trustee, the Master Servicer nor the
Special Servicer shall permit any modification of any Money Term of a Mortgage
Loan or a Specially Serviced Mortgage Loan unless the Trustee and the Master
Servicer have received a Nondisqualification Opinion or a ruling from the
Internal Revenue Service (at the expense of the party making the request that
the Master Servicer or the Special Servicer modify the Mortgage Loan or a
Specially Serviced Mortgage Loan) to the effect that such modification would not
be treated as an exchange pursuant to Section 1001 of the Code (or, if it would
be so treated, would not be treated as a "significant modification" for purposes
of Treas. Reg. Sec. 1.860G-2(b) of the Code).
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.1 Binding Nature of Agreement. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
Section 13.2 Entire Agreement. This Agreement contains the entire agreement
and understanding between the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements, understandings,
inducements and conditions, express or implied, oral or written, of any nature
whatsoever with respect to the subject matter hereof. The express terms hereof
control and supersede any course of performance or usage of the trade
inconsistent with any of the terms hereof.
Section 13.3 Amendment.
(a) This Agreement may be amended from time to time by the parties hereto,
without notice to or the consent of any of the Holders, (i) to cure any
ambiguity, (ii) to cause the provisions herein to conform to or be consistent
with or in furtherance of the statements made with respect to the Certificates,
the Trust or this Agreement in the Prospectus or the Memorandum, or to correct
or supplement any provision herein which may be inconsistent with any other
provisions herein, (iii) to amend any provision hereof to the extent necessary
or desirable to maintain the status of each REMIC Pool as a REMIC for the
purposes of federal income tax law (or comparable provisions of state income tax
law), (iv) to make any other provisions with respect to matters or questions
arising under or with respect to this Agreement not inconsistent with the
provisions hereof, or (v) to modify, add to or eliminate the provisions of
Article III relating to transfers of Residual Certificates as provided under
such Article; provided that (x) no such amendment shall adversely affect the
status of any REMIC Pool as a REMIC and (y) no such amendment effected pursuant
to clause (i), (ii) or (iv) of this sentence shall adversely affect in any
material respect the interests of any Holder not consenting thereto. Prior to
entering into any amendment without the consent of Holders pursuant to this
paragraph, the Trustee may require (at the expense of the party requesting such
amendment, except that if the Trustee requests such amendment, such amendment
shall be at the expense of the Depositor, if the Depositor consents and the
Trustee and the other parties hereto may conclusively rely upon) a
Nondisqualification Opinion and an Opinion of Counsel to the effect that such
amendment is permitted under this paragraph. The placement of an "original issue
discount" legend on, or any change required to correct any such legend
previously placed on, a Certificate shall not be deemed an amendment to this
Agreement.
-153-
<PAGE>
(b) This Agreement may also be amended from time to time by the parties
hereto with the consent of the Holders of Certificates entitled to not less than
51% of the Voting Rights allocated to all Classes affected by such amendment,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders or the rights and obligations of any party
hereto; provided that no such amendment may (i) reduce in any manner the amount
of, or delay the timing of the distributions required to be made on any
Certificate without the consent of the Holder of such Certificate, (ii)
adversely affect in any material respect the interests of the Holders of any
Class of Certificates in a manner other than as described in the immediately
preceding clause (i), without the consent of all the Holders of Certificates of
such Class, or (iii) modify the provisions of this Section 13.3, without the
consent of all the Holders of Certificates. Prior to entering into any amendment
pursuant to this paragraph, the Trustee may require (at the expense of the party
requesting the amendment) a Nondisqualification Opinion and an Opinion of
Counsel to the effect that such amendment is permitted under this paragraph.
(c) Promptly after the execution of any such amendment, the Trustee shall
furnish written notification of the substance of such amendment to each Holder
and the Rating Agencies.
(d) It shall not be necessary for the consent of Holders under this Section
13.3 to approve the particular form of any proposed amendment, but it shall be
sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents and of evidencing the authorization of the execution
thereof by Holders shall be in the affirmative and in writing and shall be
subject to such reasonable regulations as the Trustee may prescribe.
(e) Notwithstanding any other provision of this Agreement, for purposes of
the giving or withholding of consents pursuant to this Section 13.3,
Certificates registered in the name of the Depositor, the Master Servicer, the
Special Servicer or any of their respective Affiliates shall be entitled to the
same Voting Rights with respect to matters described above as they would if any
other Person held such Certificates.
Section 13.4 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS (WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED
IN THE STATE OF NEW YORK, OTHER THAN THE PRINCIPLES SET FORTH IN SECTION 5-1401
OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
Section 13.5 Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given when received by
(a) in the case of the Depositor, Morgan Stanley Capital I Inc., 1585 Broadway,
New York, New York 10036, Attention: Russell Rahbany; (b) in the case of the
Trustee, at the Corporate Trust Office; (c) in the case of the Master Servicer,
210 West 10th Street, Sixth Floor, Kansas City, Missouri 64105, Attention: Alan
L. Atterbury, with a copy to: Morrison & Hecker, L.L.P., 2600 Grand Avenue,
Kansas City, Missouri 64108, Attention: William A. Hirsch; or (d) in the case of
the Special Servicer or the Seller, Aetna Life Insurance Company, 151 Farmington
Avenue, Hartford, Connecticut 06156, Attention: Timothy A. Holt, facsimile no.
(860) 273-1620; or as to each party hereto such other address as may hereafter
be furnished by such party to the other parties hereto in writing. Any notice
required or permitted to be given to a Holder shall be mailed by first class
mail, postage
-154-
<PAGE>
prepaid, at the address of such Holder as shown in the Certificate Register. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice.
Section 13.6 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
Section 13.7 Indulgences; No Waivers. Neither the failure nor any delay on
the part of a party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence. No waiver shall be effective unless it is
in writing and is signed by the party asserted to have granted such waiver.
Section 13.8 Headings Not to Affect Interpretation. The headings contained
in this Agreement are for convenience of reference only, and shall not be used
in the interpretation hereof.
Section 13.9 Benefits of Agreement. Nothing in this Agreement or in the
Certificates, express or implied, shall give to any Person, other than the
parties to this Agreement and their successors hereunder and the Holders of the
Certificates, any benefit or any legal or equitable right, power, remedy or
claim under this Agreement.
Section 13.10 Special Notices to the Rating Agencies.
(a) The Trustee (or, in the case of the items in clauses (vi) and (vii),
the successor trustee) shall give prompt notice to the Rating Agencies and,
except in the case of clause (viii), the Operating Adviser of the occurrence of
any of the following events of which it has notice:
(i) any amendment to this Agreement pursuant to Section 13.3 hereof;
(ii) any repurchase or replacement of any Mortgage Loan by the Seller;
(iii) waiver of a due-on-sale or due-on-encumbrance clause as provided
in Section 8.6;
(iv) any resignation of the Master Servicer or the Special Servicer
pursuant to this Agreement;
(v) the appointment of any successor to the Master Servicer or the
Special Servicer pursuant to this Agreement;
(vi) the resignation or removal of the Trustee pursuant to Section
7.6;
-155-
<PAGE>
(vii) the appointment of a successor trustee pursuant to Section 7.7;
(viii) the election, resignation or removal of an Operating Adviser
pursuant to Section 8.32; or
(ix) termination of the Trust pursuant to Article X hereof.
(b) All notices to the Rating Agencies shall be in writing and sent by
first class mail, telecopy or overnight courier, as follows:
If to Fitch, to:
Fitch IBCA, Inc.
One State Street Plaza
New York, New York 10004
Attention: Commercial Mortgage Surveillance
Telecopy: (212) 635-0295
If to Moody's, to:
Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
Attention: Commercial Mortgage Surveillance
Telecopy: (212) 553-1350
If to any other Rating Agency, at such address as shall be provided in
writing to the Depositor by such Rating Agency.
(c) The Master Servicer and the Special Servicer shall each deliver to the
Trustee, the Rating Agencies and the Depositor, copies of all reports prepared
by the Master Servicer or Special Servicer, as the case may be, pursuant to this
Agreement and required to be delivered to each other, the Trustee or the
Certificateholders, together with any other information relating to the Mortgage
Loans or this Agreement as reasonably requested by the Rating Agencies and the
Depositor.
(d) Any notice or other document required to be delivered or mailed by the
Depositor, the Master Servicer, the Special Servicer or the Trustee shall be
given by such parties, respectively, on a best efforts basis and only as a
matter of courtesy and accommodation to the Rating Agencies, unless otherwise
specifically required herein, and such parties, respectively, shall have no
liability for failure to deliver any such notice or document to the Rating
Agencies.
Section 13.11 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, and all of which
together shall constitute one and the same instrument.
-156-
<PAGE>
Section 13.12 Intention of Parties.
(a) It is the express intent of the parties hereto that the conveyance of
the Mortgage Loans and related property to the Trustee, for the benefit of the
Certificateholders, by the Depositor as provided in Section 2.1 be, and be
construed as, an absolute sale of the Mortgage Loans and related property. It
is, further, not the intention of the parties that such conveyance be deemed a
pledge of the Mortgage Loans and related property by the Depositor to the
Trustee to secure a debt or other obligation of the Depositor. However, in the
event that, notwithstanding the intent of the parties, such conveyance is held
not to be an absolute sale of the Mortgage Loans or any related property, or the
Mortgage Loans or any related property is for any other reason held to be the
property of the Depositor, then:
(i) This Agreement shall be deemed to be a security agreement.
(ii) The conveyance provided for in Section 2.1 shall be deemed to be
a grant by the Depositor to the Trustee, for the benefit of the
Certificateholders, of a security interest in all of the Depositor's right,
title, and interest, whether now owned or hereafter acquired, in and to:
(A) All accounts, contract rights, general intangibles, chattel
paper, instruments, documents, money, deposit accounts, certificates
of deposit, goods, letters of credit, advices of credit and
uncertificated securities consisting of, arising from or relating to
any of the property described in clauses (1)-(4) below: (1) the
Mortgage Loans (including, without limitation, the Mortgage Notes, the
related Mortgages, the related security agreements, and the related
title, hazard and other insurance policies) identified on the Mortgage
Loan Schedule, including all Replacement Mortgage Loans, together with
all payments and other collections with respect thereto after the
Cut-off Date (other than Monthly Payments of principal and interest
due on or before the Cut-off Date) and the related Mortgage Files; (2)
the Distribution Account and the Collection Account, including,
without limitation, all funds and investments therein and all income
from the investment of funds therein (including any accrued discount
realized on liquidation of any investment purchased at a discount);
(3) the REMIC I Regular Interests and the REMIC II Regular Interests;
and (4) the Mortgage Loan Purchase Agreement;
(B) All accounts, contract rights, general intangibles, chattel
paper, instruments, documents, money, deposit accounts, certificates
of deposit, goods, letters of credit, advices of credit,
uncertificated securities, and other rights arising from or by virtue
of the disposition of, or collections with respect to, or insurance
proceeds payable with respect to, or claims against other Persons with
respect to, all or any part of the collateral described in clause (A)
above (including any accrued discount realized on liquidation of any
investment purchased at a discount); and
(C) All cash and non-cash proceeds of the collateral described in
clauses (A) and (B) above.
(iii) The possession by the Trustee of the Mortgage Notes, the
Mortgages and such other goods, letters of credit, advices of credit,
instruments, money, documents, chattel paper or certificated securities
shall be deemed to be "possession by the secured party," or
-157-
<PAGE>
possession by a purchaser or a person designated by him or her, for
purposes of perfecting the security interest pursuant to the Uniform
Commercial Code (including, without limitation, Sections 9-305, 8-313 or
8-321 thereof) as in force in each relevant jurisdiction.
(iv) Notifications to Persons holding such property, and
acknowledgments, receipts or confirmations from Persons holding such
property, shall be deemed to be notifications to, or acknowledgments,
receipts or confirmations from, financial intermediaries, bailees or agents
(as applicable) of the Trustee for the purpose of perfecting such security
interest under applicable law.
(b) The Depositor and, at the Depositor's direction, the Master Servicer
and the Trustee, shall, to the extent consistent with this Agreement, take such
reasonable actions as may be necessary to ensure that, if this Agreement were
deemed to create a security interest in the property described above, such
security interest would be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term
of the Agreement. The Master Servicer shall file, at the direction of the
Depositor and the expense of the Seller, all filings necessary to maintain the
effectiveness of any original filings necessary under the Uniform Commercial
Code as in effect in any relevant jurisdiction to perfect the Trustee's security
interest in such property, including, without limitation, continuation
statements. In connection herewith, the Trustee shall have all of the rights and
remedies of a secured party and creditor under the Uniform Commercial Code as in
force in the relevant jurisdiction.
(c) The Depositor shall not take any action inconsistent with the Trust's
ownership of the Mortgage Loans.
Section 13.13 Recordation of Agreement. This Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere. Such recordation, if any, shall be
effected by the Master Servicer at the expense of the Trust payable as an
expense of the Trust out of the Collection Account, but only upon direction of
the Trustee accompanied by an Opinion of Counsel (the cost of which shall be
payable out of the Collection Account) to the effect that such recordation
materially and beneficially affects the interests of the Certificateholders of
the Trust.
Section 13.14 Massachusetts Filings. The Trustee shall make any filings
required under Massachusetts General Laws, Chapter 182, Sections 2 and 12, the
costs of which, if any, shall be reimbursed to it pursuant to Section 7.12.
[signature page follows]
-158-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day and
year first above written.
MORGAN STANLEY CAPITAL I INC.,
as Depositor
By: /s/ Russell A. Rahbany
------------------------------------
Name: Russell A. Rahbany
Title: Vice President
MIDLAND LOAN SERVICES, L.P.,
as Master Servicer
By: Midland Data Systems, Inc.,
its general partner
By: /s/ Leon E. Bergman
----------------------------
Name: Leon E. Bergman
Title: Executive Vice President
AETNA LIFE INSURANCE COMPANY,
as Special Servicer and as Seller
By: /s/ William G. Swan
------------------------------------
Name: William G. Swan
Title: Vice President
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By: /s/ James C. Kimball
------------------------------------
Name: James C. Kimball
Title: Vice President
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 29th day of December, 1997, before me, a notary public in and for
said State, personally appeared Russell A. Rahbany, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person who
executed the within instrument as Vice President on behalf of Morgan Stanley
Capital I Inc., and acknowledged to me that such corporation executed the within
instrument pursuant to its by-laws or a resolution of its Board of Directors.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Eileen A. Krakauer
-------------------------------
Notary Public
[NOTARY SEAL]
-----------------------------------
EILEEN KRAKAUER
Notary Public, State of New York
No 31-4637224
Qualified in New York County
Commission Expires April 30, 1998
-----------------------------------
<PAGE>
STATE OF MISSOURI )
) ss.:
COUNTY OF JACKSON )
On this 29th day of December, 1997, before me appeared Leon E. Bergman, to
me personally known, who being by me duly sworn did say that he is the Exec.
Vice President of Midland Data Systems, Inc., a Missouri corporation, the
general partner of MIDLAND LOAN SERVICES, L.P., a Missouri limited partnership,
and that said instrument was signed on behalf of said corporation by authority
of its board of directors as the general partner of said limited partnership,
and said person acknowledged said instrument to be the free act and deed of said
corporation as the general partner of said limited partnership and the free act
and deed of said limited partnership.
WITNESS my hand and seal hereto affixed the day and year first above
written.
/s/ Richard G. Manes
-------------------------------
NOTARY PUBLIC in and for said
County and State
My Commission expires:
(stamp)
(seal)
---------------------------------------
RICHARD G. MANES
Notary Public - Notary Seal
STATE OF MISSOURI
Jacskon County
My Commission Expires Oct. 1, 2001
---------------------------------------
<PAGE>
STATE OF CONNECTICUT)
) ss.:
COUNTY OF HARTFORD )
On this 29th day of December, 1997, before me, a notary public in and for
said State, personally appeared James C. Kimball, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person who
executed the within instrument as Vice President on behalf of Aetna Life
Insurance Company, and acknowledged to me that such corporation executed the
within instrument pursuant to its by-laws or a resolution of its Board of
Directors.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Kathleen E. Kupec
------------------------------
Notary Public
[NOTARY SEAL]
-----------------------------------
KATHLEEN E. KUPEC
Notary Public
[ILLEGIBLE]
-----------------------------------
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 29th day of December, 1997, before me, a notary public in and for
said State, personally appeared William G. Swan, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person who
executed the within instrument as Vice President on behalf of State Street Bank
and Trust Company, and acknowledged to me that such corporation executed the
within instrument pursuant to its by-laws or a resolution of its Board of
Directors.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Eileen A. Krakauer
-------------------------------
Notary Public
[NOTARY SEAL]
-----------------------------------
EILEEN KRAKAUER
Notary Public, State of New York
No 31-4637224
Qualified in New York County
Commission Expires April 30, 1998
-----------------------------------
<PAGE>
EXHIBIT A-1
FORM OF CLASS A-1A CERTIFICATE
CLASS A-1A AETNA COMMERCIAL MORTGAGE TRUST MULTICLASS
PASS-THROUGH CERTIFICATE,
SERIES 1997-ALIC
evidencing a beneficial ownership interest in the REMIC Pool included in a trust
fund (the "Trust Fund") consisting primarily of a pool (the "REMIC Mortgage
Pool") of multifamily and commercial mortgage loans (the "REMIC Mortgage
Loans"), such pool being formed and sold by
MORGAN STANLEY CAPITAL I INC.
Pass-Through Rate: Certificate Principal Balance of this
6.3000% per annum Class A-1A Certificate as of the
Issue Date: $__________
Date of Pooling and Servicing Class Principal Balance of all the Class
Agreement: December 1, 1997 A-1A Certificates as of the Issue Date:
$169,000,000
Cut-off Date: December 1, 1997 Aggregate unpaid principal balance of
Issue Date: December 30, 1997 the REMIC Mortgage Pool as of the
Cut-off Date, after deducting payments
of principal due on or before such date,
whether or not received: $802,696,189
First Distribution Date:
January 15, 1998
Master Servicer: Midland Loan Services, L.P.
Trustee: State Street Bank and Trust
Company
Special Servicer: Aetna Life Insurance Company CUSIP No.: 61745M DZ 3
Certificate No. A-1A-__
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR, THE
TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF 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
A-1-1
<PAGE>
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 MORGAN
STANLEY CAPITAL I INC., MIDLAND LOAN SERVICES, L.P., AETNA LIFE INSURANCE
COMPANY, STATE STREET BANK AND TRUST COMPANY OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. IN ADDITION, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE REDUCED IN CONNECTION
WITH LOSSES ON THE MORTGAGE LOANS AND CERTAIN UNANTICIPATED EXPENSES AS SET
FORTH IN THE AGREEMENT (AS DEFINED HEREIN). ACCORDINGLY, THE OUTSTANDING
CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ABOVE.
This certifies that _______________ is the registered owner of the
Percentage Interest evidenced by this Class A-1A Certificate (obtained by
dividing the principal balance of this Class A- 1A Certificate (its "Certificate
Principal Balance") as of the Issue Date by the aggregate principal balance of
all the Class A-1A Certificates (their "Class Principal Balance") as of the
Issue Date) in that certain beneficial ownership interest, evidenced by all the
Class A-1A Certificates, in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), between Morgan
Stanley Capital I Inc., as Depositor, Midland Loan Services, L.P., as Master
Servicer, Aetna Life Insurance Company, as Seller and Special Servicer and State
Street Bank and Trust Company, as Trustee. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
15th day of each month or, if such 15th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class A-1A Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on any Class A-1A
Certificate will be made by the Trustee by wire transfer in immediately
available funds to the account of the Person entitled thereto at a bank or other
entity having appropriate facilities therefor, if such
A-1-2
<PAGE>
Certificateholder shall have provided the Trustee with wiring instructions on or
prior to the Record Date for such distribution (which wiring instructions may be
in the form of a standing order applicable to all subsequent distributions as
well) or otherwise by check mailed to the address of such Certificateholder
appearing in the Certificate Register. Notwithstanding the above, the final
distribution on this Certificate (determined without regard to any possible
future reimbursement of any Realized Loss or Expense Loss previously allocated
to this Certificate) will be made after due notice by the Trustee of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the offices of the Certificate Registrar appointed as provided in
the Agreement or such other location as may be specified in such notice. Also
notwithstanding the foregoing, any distribution that may be made with respect to
this Certificate in reimbursement of any Realized Loss or Expense Loss
previously allocated to this Certificate, which reimbursement is to occur after
the date on which this Certificate is surrendered as contemplated by the
preceding sentence, will be made by check mailed to the address of the Holder
that surrenders this Certificate as such address last appeared in the
Certificate Register or to any such other address of which the Trustee is
subsequently notified in writing.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Depositor's Aetna Mortgage Trust Multiclass Pass-Through Certificates,
Series 1997-ALIC (the "Certificates") are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than, and, in certain cases,
prior to, distributions to Certificateholders, such purposes including the
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans and the payment of interest on such advances and expenses.
The Class A-1A Certificates are issuable in fully registered form only,
without coupons, in minimum denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
Class A-1A Certificates are exchangeable for new Class A-1A Certificates in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class A-1A Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No service charge will be imposed for any registration of transfer or
exchange of Class A-1A Certificates, but the Trustee or the Certificate
Registrar may require payment of a sum
A-1-3
<PAGE>
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Class A-1A Certificates.
Notwithstanding the foregoing, for so long as this Certificate is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC, transfers of interests in this Certificate
shall be made through the book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar and any agents 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 or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Operating Advisor, the Special Servicer, the Depositor, the Master Servicer or
the Holders of the Residual Certificates representing a majority Percentage
Interest in the Class R-I Interests, at a price determined as provided in the
Agreement, of all Mortgage Loans and any REO Properties remaining in the Trust
Fund. The Agreement permits, but does not require, the Operating Advisor, the
Special Servicer, the Depositor, the Master Servicer or such Holders to purchase
from the Trust Fund all Mortgage Loans and any REO Properties remaining therein
at such time as the aggregate Stated Principal Balance of the REMIC Mortgage
Pool is less than 5% of the aggregate Cut-off Date Principal Balance of the
REMIC Mortgage Pool specified on the face hereof. The exercise of such right
will effect early retirement of the Certificates.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee thereunder
and the rights of the Certificateholders thereunder, at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain circumstances, including any amendment necessary to maintain
the status of REMIC I, REMIC II or REMIC III as a REMIC, without the consent of
the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
A-1-4
<PAGE>
This Certificate shall be construed in accordance with the internal laws of
the State of New York applicable to agreements made and to be performed in said
State, and the obligations, rights and remedies of the Holder hereof shall be
determined in accordance with such laws.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
State Street Bank and Trust Company,
as Trustee
By:______________________________________
Authorized Officer
A-1-5
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-1A Certificates referred to in the
within-mentioned Agreement.
Dated:
State Street Bank and Trust Company,
as Certificate Registrar
By:______________________________________
Authorized Officer
A-1-6
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Aetna Commercial Mortgage Trust Multiclass Pass-Through Certificate and hereby
authorize(s) the registration of transfer of such interest to the above named
assignee on the Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate of a like Percentage Interest and Class to
the above named assignee and delivery of such Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:___________
--------------------------------------
Signature by or on behalf of Assignor
--------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or otherwise,
in immediately available funds, to____________________________________________
for the account of_____________________________________________________________.
Distributions made by check (such check to be made payable to
___________________________) and all applicable statements and notices should be
mailed to _________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________, as its agent.
A-1-7
<PAGE>
EXHIBIT A-2
FORM OF CLASS A-1B CERTIFICATE
CLASS A-1B AETNA COMMERCIAL MORTGAGE TRUST MULTICLASS
PASS-THROUGH CERTIFICATE,
SERIES 1997-ALIC
evidencing a beneficial ownership interest in the REMIC Pool included in a trust
fund (the "Trust Fund") consisting primarily of a pool (the "REMIC Mortgage
Pool") of multifamily and commercial mortgage loans (the "REMIC Mortgage
Loans"), such pool being formed and sold by
MORGAN STANLEY CAPITAL I INC.
Pass-Through Rate: Certificate Principal Balance of this
6.4400% per annum Class A-1B Certificate as of the
Issue Date: $__________
Date of Pooling and Servicing Class Principal Balance of all the Class
Agreement: December 1, 1997 A-1B Certificates as of the Issue Date:
$190,984,000
Cut-off Date: December 1, 1997 Aggregate unpaid principal balance of the
Issue Date: December 30, 1997 REMIC Mortgage Pool as of the Cut-off Date,
after deducting payments of principal due
on or before such date, whether or not
received: $802,696,189
First Distribution Date:
January 15, 1998
Master Servicer: Midland Loan Services, L.P.
Trustee: State Street Bank and Trust
Company
Special Servicer: Aetna Life Insurance Company CUSIP No.: 61745M EA 7
Certificate No. A-1B-__
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR, THE
TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF 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
A-2-1
<PAGE>
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 MORGAN
STANLEY CAPITAL I INC., MIDLAND LOAN SERVICES, L.P., AETNA LIFE INSURANCE
COMPANY, STATE STREET BANK AND TRUST COMPANY OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. IN ADDITION, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE REDUCED IN CONNECTION
WITH LOSSES ON THE MORTGAGE LOANS AND CERTAIN UNANTICIPATED EXPENSES AS SET
FORTH IN THE AGREEMENT (AS DEFINED HEREIN). ACCORDINGLY, THE OUTSTANDING
CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ABOVE.
This certifies that _____________________ is the registered owner of the
Percentage Interest evidenced by this Class A-1B Certificate (obtained by
dividing the principal balance of this Class A-1B Certificate (its "Certificate
Principal Balance") as of the Issue Date by the aggregate principal balance of
all the Class A-1B Certificates (their "Class Principal Balance") as of the
Issue Date) in that certain beneficial ownership interest, evidenced by all the
Class A-1B Certificates, in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), between Morgan
Stanley Capital I Inc., as Depositor, Midland Loan Services, L.P., as Master
Servicer, Aetna Life Insurance Company, as Seller and Special Servicer and State
Street Bank and Trust Company, as Trustee. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
15th day of each month or, if such 15th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class A-1B Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on any Class A-1B
Certificate will be made by the Trustee by wire transfer in immediately
available funds to the account of the Person entitled thereto at a bank or other
entity having appropriate facilities therefor, if such Certificateholder shall
have provided the Trustee with wiring instructions on or prior to the Record
A-2-2
<PAGE>
Date for such distribution (which wiring instructions may be in the form of a
standing order applicable to all subsequent distributions as well) or otherwise
by check mailed to the address of such Certificateholder appearing in the
Certificate Register. Notwithstanding the above, the final distribution on this
Certificate (determined without regard to any possible future reimbursement of
any Realized Loss or Expense Loss previously allocated to this Certificate) will
be made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the offices of the
Certificate Registrar appointed as provided in the Agreement or such other
location as may be specified in such notice. Also notwithstanding the foregoing,
any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Expense Loss previously allocated to this
Certificate, which reimbursement is to occur after the date on which this
Certificate is surrendered as contemplated by the preceding sentence, will be
made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Depositor's Aetna Mortgage Trust Multiclass Pass-Through Certificates,
Series 1997-ALIC (the "Certificates") are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than, and, in certain cases,
prior to, distributions to Certificateholders, such purposes including the
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans and the payment of interest on such advances and expenses.
The Class A-1B Certificates are issuable in fully registered form only,
without coupons, in minimum denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
Class A-1B Certificates are exchangeable for new Class A-1B Certificates in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class A-1B Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No service charge will be imposed for any registration of transfer or
exchange of Class A-1B Certificates, but the Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any transfer or
exchange of Class A-1B Certificates.
A-2-3
<PAGE>
Notwithstanding the foregoing, for so long as this Certificate is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC, transfers of interests in this Certificate
shall be made through the book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar and any agents 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 or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Operating Advisor, the Special Servicer, the Depositor, the Master Servicer or
the Holders of the Residual Certificates representing a majority Percentage
Interest in the Class R-I Interests, at a price determined as provided in the
Agreement, of all Mortgage Loans and any REO Properties remaining in the Trust
Fund. The Agreement permits, but does not require, the Operating Advisor, the
Special Servicer, the Depositor, the Master Servicer or such Holders to purchase
from the Trust Fund all Mortgage Loans and any REO Properties remaining therein
at such time as the aggregate Stated Principal Balance of the REMIC Mortgage
Pool is less than 5% of the aggregate Cut-off Date Principal Balance of the
REMIC Mortgage Pool specified on the face hereof. The exercise of such right
will effect early retirement of the Certificates.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee thereunder
and the rights of the Certificateholders thereunder, at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain circumstances, including any amendment necessary to maintain
the status of REMIC I, REMIC II or REMIC III as a REMIC, without the consent of
the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York applicable to agreements made and to be performed in said
State, and the obligations, rights and remedies of the Holder hereof shall be
determined in accordance with such laws.
A-2-4
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
State Street Bank and Trust Company,
as Trustee
By:_________________________________
Authorized Officer
A-2-5
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-1B Certificates referred to in the
within-mentioned Agreement.
Dated:
State Street Bank and Trust Company,
as Certificate Registrar
By:_________________________________
Authorized Officer
A-2-6
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Aetna Commercial Mortgage Trust Multiclass Pass-Through Certificate and hereby
authorize(s) the registration of transfer of such interest to the above named
assignee on the Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate of a like Percentage Interest and Class to
the above named assignee and delivery of such Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:___________
--------------------------------------
Signature by or on behalf of Assignor
--------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or otherwise,
in immediately available funds, to______________________________________________
for the account of_____________________________________________________________.
Distributions made by check (such check to be made payable to
_______________) and all applicable statements and notices should be mailed to
_______________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________, as its agent.
A-2-7
<PAGE>
EXHIBIT A-3
FORM OF CLASS A-2 CERTIFICATE
CLASS A-2 AETNA COMMERCIAL MORTGAGE TRUST MULTICLASS
PASS-THROUGH CERTIFICATE,
SERIES 1997-ALIC
evidencing a beneficial ownership interest in the REMIC Pool included in a trust
fund (the "Trust Fund") consisting primarily of a pool (the "REMIC Mortgage
Pool") of multifamily and commercial mortgage loans (the "REMIC Mortgage
Loans"), such pool being formed and sold by
MORGAN STANLEY CAPITAL I INC.
Pass-Through Rate: Certificate Principal Balance of this
5.9900% per annum Class A-2 Certificate as of the
Issue Date: $__________
Date of Pooling and Servicing Class Principal Balance of all the Class
Agreement: December 1, 1997 A-2 Certificates as of the Issue Date:
$97,552,000
Cut-off Date: December 1, 1997 Aggregate unpaid principal balance of the
Issue Date: December 30, 1997 REMIC Mortgage Pool as of the Cut-off Date,
after deducting payments of principal due
on or before such date, whether or not
received: $802,696,189
First Distribution Date:
January 15, 1998
Master Servicer: Midland Loan Services, L.P.
Trustee: State Street Bank and Trust
Company
Special Servicer: Aetna Life Insurance Company CUSIP No.: 61745M EB 5
Certificate No. A-2-__
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR, THE
TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF 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
A-3-1
<PAGE>
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 MORGAN
STANLEY CAPITAL I INC., MIDLAND LOAN SERVICES, L.P., AETNA LIFE INSURANCE
COMPANY, STATE STREET BANK AND TRUST COMPANY OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. IN ADDITION, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE REDUCED IN CONNECTION
WITH LOSSES ON THE MORTGAGE LOANS AND CERTAIN UNANTICIPATED EXPENSES AS SET
FORTH IN THE AGREEMENT (AS DEFINED HEREIN). ACCORDINGLY, THE OUTSTANDING
CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ABOVE.
This certifies that __________________ is the registered owner of the
Percentage Interest evidenced by this Class A-2 Certificate (obtained by
dividing the principal balance of this Class A-2 Certificate (its "Certificate
Principal Balance") as of the Issue Date by the aggregate principal balance of
all the Class A-2 Certificates (their "Class Principal Balance") as of the Issue
Date) in that certain beneficial ownership interest, evidenced by all the Class
A-2 Certificates, in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), between Morgan Stanley
Capital I Inc., as Depositor, Midland Loan Services, L.P., as Master Servicer,
Aetna Life Insurance Company, as Seller and Special Servicer and State Street
Bank and Trust Company, as Trustee. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
15th day of each month or, if such 15th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class A-2 Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on any Class A-2
Certificate will be made by the Trustee by wire transfer in immediately
available funds to the account of the Person entitled thereto at a bank or other
entity having appropriate facilities therefor, if such Certificateholder shall
have provided the Trustee with wiring instructions on or prior to the Record
A-3-2
<PAGE>
Date for such distribution (which wiring instructions may be in the form of a
standing order applicable to all subsequent distributions as well) or otherwise
by check mailed to the address of such Certificateholder appearing in the
Certificate Register. Notwithstanding the above, the final distribution on this
Certificate (determined without regard to any possible future reimbursement of
any Realized Loss or Expense Loss previously allocated to this Certificate) will
be made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the offices of the
Certificate Registrar appointed as provided in the Agreement or such other
location as may be specified in such notice. Also notwithstanding the foregoing,
any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Expense Loss previously allocated to this
Certificate, which reimbursement is to occur after the date on which this
Certificate is surrendered as contemplated by the preceding sentence, will be
made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Depositor's Aetna Mortgage Trust Multiclass Pass-Through Certificates,
Series 1997-ALIC (the "Certificates") are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than, and, in certain cases,
prior to, distributions to Certificateholders, such purposes including the
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans and the payment of interest on such advances and expenses.
The Class A-2 Certificates are issuable in fully registered form only,
without coupons, in minimum denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
Class A-2 Certificates are exchangeable for new Class A-2 Certificates in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class A-2 Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No service charge will be imposed for any registration of transfer or
exchange of Class A-2 Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
A-2 Certificates.
A-3-3
<PAGE>
Notwithstanding the foregoing, for so long as this Certificate is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC, transfers of interests in this Certificate
shall be made through the book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar and any agents 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 or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Operating Advisor, the Special Servicer, the Depositor, the Master Servicer or
the Holders of the Residual Certificates representing a majority Percentage
Interest in the Class R-I Interests, at a price determined as provided in the
Agreement, of all Mortgage Loans and any REO Properties remaining in the Trust
Fund. The Agreement permits, but does not require, the Operating Advisor, the
Special Servicer, the Depositor, the Master Servicer or such Holders to purchase
from the Trust Fund all Mortgage Loans and any REO Properties remaining therein
at such time as the aggregate Stated Principal Balance of the REMIC Mortgage
Pool is less than 5% of the aggregate Cut-off Date Principal Balance of the
REMIC Mortgage Pool specified on the face hereof. The exercise of such right
will effect early retirement of the Certificates.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee thereunder
and the rights of the Certificateholders thereunder, at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain circumstances, including any amendment necessary to maintain
the status of REMIC I, REMIC II or REMIC III as a REMIC, without the consent of
the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York applicable to agreements made and to be performed in said
State, and the obligations, rights and remedies of the Holder hereof shall be
determined in accordance with such laws.
A-3-4
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
State Street Bank and Trust Company,
as Trustee
By:_________________________________
Authorized Officer
A-3-5
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-2 Certificates referred to in the
within-mentioned Agreement.
Dated:
State Street Bank and Trust Company,
as Certificate Registrar
By:_________________________________
Authorized Officer
A-3-6
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Aetna Commercial Mortgage Trust Multiclass Pass-Through Certificate and hereby
authorize(s) the registration of transfer of such interest to the above named
assignee on the Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate of a like Percentage Interest and Class to
the above named assignee and delivery of such Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:___________
--------------------------------------
Signature by or on behalf of Assignor
--------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or otherwise,
in immediately available funds, to______________________________________________
for the account of_____________________________________________________________.
Distributions made by check (such check to be made payable to
_______________) and all applicable statements and notices should be mailed to
_______________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________, as its agent.
A-3-7
<PAGE>
EXHIBIT A-4
FORM OF CLASS B CERTIFICATE
CLASS B AETNA COMMERCIAL MORTGAGE TRUST MULTICLASS
PASS-THROUGH CERTIFICATE,
SERIES 1997-ALIC
evidencing a beneficial ownership interest in the REMIC Pool included in a trust
fund (the "Trust Fund") consisting primarily of a pool (the "REMIC Mortgage
Pool") of multifamily and commercial mortgage loans (the "REMIC Mortgage
Loans"), such pool being formed and sold by
MORGAN STANLEY CAPITAL I INC.
Pass-Through Rate: Certificate Principal Balance of this
6.7100% per annum Class B Certificate as of the
Issue Date: $__________
Date of Pooling and Servicing Class Principal Balance of all the Class
Agreement: December 1, 1997 B Certificates as of the Issue Date:
$64,216,000
Cut-off Date: December 1, 1997 Aggregate unpaid principal balance of the
Issue Date: December 30, 1997 REMIC Mortgage Pool as of the Cut-off Date,
after deducting payments of principal due
on or before such date, whether or not
received: $802,696,189
First Distribution Date:
January 15, 1998
Master Servicer: Midland Loan Services, L.P.
Trustee: State Street Bank and Trust
Company
Special Servicer: Aetna Life Insurance Company CUSIP No.: 61745M ED 1
Certificate No. B-__
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR, THE
TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF 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
A-4-1
<PAGE>
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 MORGAN
STANLEY CAPITAL I INC., MIDLAND LOAN SERVICES, L.P., AETNA LIFE INSURANCE
COMPANY, STATE STREET BANK AND TRUST COMPANY OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1A, CLASS A-1B, CLASS A-2 AND
CLASS IO CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT PROVIDED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN FOLLOWING RETIREMENT OF THE
CLASS A-1A, CLASS A-1B AND CLASS A-2 CERTIFICATES OF THE SAME SERIES. IN
ADDITION, THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE REDUCED
IN CONNECTION WITH LOSSES ON THE MORTGAGE LOANS AND CERTAIN UNANTICIPATED
EXPENSES AS SET FORTH IN THE AGREEMENT (AS DEFINED HEREIN). ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ABOVE.
This certifies that ___________________ is the registered owner of the
Percentage Interest evidenced by this Class B Certificate (obtained by dividing
the principal balance of this Class B Certificate (its "Certificate Principal
Balance") as of the Issue Date by the aggregate principal balance of all the
Class B Certificates (their "Class Principal Balance") as of the Issue Date) in
that certain beneficial ownership interest, evidenced by all the Class B
Certificates, in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), between Morgan Stanley
Capital I Inc., as Depositor, Midland Loan Services, L.P., as Master Servicer,
Aetna Life Insurance Company, as Seller and Special Servicer and State Street
Bank and Trust Company, as Trustee. To the extent not defined herein, the
capitalized terms used herein have
A-4-2
<PAGE>
the respective meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
15th day of each month or, if such 15th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class B Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on any Class B Certificate
will be made by the Trustee by wire transfer in immediately available funds to
the account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Trustee with wiring instructions on or prior to the Record Date for such
distribution (which wiring instructions may be in the form of a standing order
applicable to all subsequent distributions as well) or otherwise by check mailed
to the address of such Certificateholder appearing in the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate
(determined without regard to any possible future reimbursement of any Realized
Loss or Expense Loss previously allocated to this Certificate) will be made
after due notice by the Trustee of the pendency of such distribution and only
upon presentation and surrender of this Certificate at the offices of the
Certificate Registrar appointed as provided in the Agreement or such other
location as may be specified in such notice. Also notwithstanding the foregoing,
any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Expense Loss previously allocated to this
Certificate, which reimbursement is to occur after the date on which this
Certificate is surrendered as contemplated by the preceding sentence, will be
made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Depositor's Aetna Mortgage Trust Multiclass Pass-Through Certificates,
Series 1997-ALIC (the "Certificates") are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than, and, in certain cases,
prior to, distributions to Certificateholders, such purposes including the
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans and the payment of interest on such advances and expenses.
The Class B Certificates are issuable in fully registered form only,
without coupons, in minimum denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
Class B Certificates are exchangeable for new Class B
A-4-3
<PAGE>
Certificates in authorized denominations evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class B Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No transfer of a Class B Certificate or any interest therein shall be made
(A) to any employee benefit plan or other retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds and separate accounts in which such plans, accounts or
arrangements are invested, including, without limitation, insurance company
general accounts, that is subject to ERISA or the Code (each, a "Plan"), or (B)
to any Person who is directly or indirectly purchasing such Certificate or
interest therein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, unless: (i) in the case of a Certificate that constitutes a
Book-Entry Certificate, the purchase and holding of such Certificate or interest
therein is exempt from the prohibited transaction provisions of Section 406 of
ERISA and Section 4975 of the Code under Section I and III of Prohibited
Transaction Class Exemption 95-60; or (ii) in the case of a Class B Certificate
that is held as a Definitive Certificate, the prospective Transferee provides
the Certificate Registrar with a certification of facts and an Opinion of
Counsel which establish to the satisfaction of the Trustee that such transfer
will not result in a violation of Section 406 of ERISA or Section 4975 of the
Code or result in the imposition of an excise tax under Section 4975 of the Code
or subject the Depositor, the Trustee, the Master Servicer or the Special
Servicer to any obligation in addition to those undertaken in the Agreement.
Each Person who acquires any Class B Certificate or interest therein (unless it
shall have acquired such Certificate or interest therein from the Depositor or
an Affiliate thereof or unless it shall have delivered to the Certificate
Registrar the certification of facts and Opinion of Counsel referred to in
clause (ii) of the preceding sentence) shall be required to deliver to the
Certificate Registrar (or, in the case of an interest in a Book-Entry
Certificate, to the Certificate Owner that is transferring such interest) a
certification to the effect that: (i) it is neither a Plan nor any Person who is
directly or indirectly purchasing such Class B Certificate or interest therein
on behalf of, as named fiduciary of, as trustee of, or with assets of a Plan; or
(ii) the purchase and holding of such Certificate or interest therein by such
person is exempt from the prohibited transaction provisions of Section 406 of
ERISA and Section 4975 of the Code under Section I and II of Prohibited
Transaction Class Exemption 95-60.
No service charge will be imposed for any registration of transfer or
exchange of Class B Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
B Certificates.
Notwithstanding the foregoing, for so long as this Certificate is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC, transfers of interests in this Certificate
shall be made through the book-entry facilities of DTC.
A-4-4
<PAGE>
Prior to due presentment of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar and any agents 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 or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Operating Advisor, the Special Servicer, the Depositor, the Master Servicer or
the Holders of the Residual Certificates representing a majority Percentage
Interest in the Class R-I Interests, at a price determined as provided in the
Agreement, of all Mortgage Loans and any REO Properties remaining in the Trust
Fund. The Agreement permits, but does not require, the Operating Advisor, the
Special Servicer, the Depositor, the Master Servicer or such Holders to purchase
from the Trust Fund all Mortgage Loans and any REO Properties remaining therein
at such time as the aggregate Stated Principal Balance of the REMIC Mortgage
Pool is less than 5% of the aggregate Cut-off Date Principal Balance of the
REMIC Mortgage Pool specified on the face hereof. The exercise of such right
will effect early retirement of the Certificates.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee thereunder
and the rights of the Certificateholders thereunder, at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain circumstances, including any amendment necessary to maintain
the status of REMIC I, REMIC II or REMIC III as a REMIC, without the consent of
the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York applicable to agreements made and to be performed in said
State, and the obligations, rights and remedies of the Holder hereof shall be
determined in accordance with such laws.
A-4-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
State Street Bank and Trust Company,
as Trustee
By:_________________________________
Authorized Officer
A-4-6
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates referred to in the within-mentioned
Agreement.
Dated:
State Street Bank and Trust Company,
as Certificate Registrar
By:_________________________________
Authorized Officer
A-4-7
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Aetna Commercial Mortgage Trust Multiclass Pass-Through Certificate and hereby
authorize(s) the registration of transfer of such interest to the above named
assignee on the Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate of a like Percentage Interest and Class to
the above named assignee and delivery of such Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:___________
--------------------------------------
Signature by or on behalf of Assignor
--------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or otherwise,
in immediately available funds, to______________________________________________
for the account of_____________________________________________________________.
Distributions made by check (such check to be made payable to
_______________) and all applicable statements and notices should be mailed to
_______________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________, as its agent.
A-4-8
<PAGE>
EXHIBIT A-5
FORM OF CLASS C CERTIFICATE
CLASS C AETNA COMMERCIAL MORTGAGE TRUST MULTICLASS
PASS-THROUGH CERTIFICATE,
SERIES 1997-ALIC
evidencing a beneficial ownership interest in the REMIC Pool included in a trust
fund (the "Trust Fund") consisting primarily of a pool (the "REMIC Mortgage
Pool") of multifamily and commercial mortgage loans (the "REMIC Mortgage
Loans"), such pool being formed and sold by
MORGAN STANLEY CAPITAL I INC.
Pass-Through Rate: Certificate Principal Balance of this
6.8400% per annum Class C Certificate as of the
Issue Date: $__________
Date of Pooling and Servicing Class Principal Balance of all the Class
Agreement: December 1, 1997 C Certificates as of the Issue Date:
$68,229,000
Cut-off Date: December 1, 1997 Aggregate unpaid principal balance of the
Issue Date: December 30, 1997 REMIC Mortgage Pool as of the Cut-off Date,
after deducting payments of principal due
on or before such date, whether or not
received: $802,696,189
First Distribution Date:
January 15, 1998
Master Servicer: Midland Loan Services, L.P.
Trustee: State Street Bank and Trust
Company
Special Servicer: Aetna Life Insurance Company CUSIP No.: 61745M EE 9
Certificate No. C-__
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR, THE
TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF 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
A-5-1
<PAGE>
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 MORGAN
STANLEY CAPITAL I INC., MIDLAND LOAN SERVICES, L.P., AETNA LIFE INSURANCE
COMPANY, STATE STREET BANK AND TRUST COMPANY OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1A, CLASS A-1B, CLASS A-2, CLASS
IO AND CLASS B CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT PROVIDED IN
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN FOLLOWING RETIREMENT OF THE
CLASS A-1A, CLASS A-1B, CLASS A-2 AND CLASS B CERTIFICATES OF THE SAME SERIES.
IN ADDITION, THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE
REDUCED IN CONNECTION WITH LOSSES ON THE MORTGAGE LOANS AND CERTAIN
UNANTICIPATED EXPENSES AS SET FORTH IN THE AGREEMENT (AS DEFINED HEREIN).
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that _____________________ is the registered owner of the
Percentage Interest evidenced by this Class C Certificate (obtained by dividing
the principal balance of this Class C Certificate (its "Certificate Principal
Balance") as of the Issue Date by the aggregate principal balance of all the
Class C Certificates (their "Class Principal Balance") as of the Issue Date) in
that certain beneficial ownership interest, evidenced by all the Class C
Certificates, in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), between Morgan Stanley
Capital I Inc., as Depositor, Midland Loan Services, L.P., as Master Servicer,
Aetna Life Insurance Company, as Seller and Special Servicer and State Street
Bank and
A-5-2
<PAGE>
Trust Company, as Trustee. To the extent not defined herein, the capitalized
terms used herein have the respective meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
15th day of each month or, if such 15th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class C Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on any Class C Certificate
will be made by the Trustee by wire transfer in immediately available funds to
the account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Trustee with wiring instructions on or prior to the Record Date for such
distribution (which wiring instructions may be in the form of a standing order
applicable to all subsequent distributions as well) or otherwise by check mailed
to the address of such Certificateholder appearing in the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate
(determined without regard to any possible future reimbursement of any Realized
Loss or Expense Loss previously allocated to this Certificate) will be made
after due notice by the Trustee of the pendency of such distribution and only
upon presentation and surrender of this Certificate at the offices of the
Certificate Registrar appointed as provided in the Agreement or such other
location as may be specified in such notice. Also notwithstanding the foregoing,
any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Expense Loss previously allocated to this
Certificate, which reimbursement is to occur after the date on which this
Certificate is surrendered as contemplated by the preceding sentence, will be
made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Depositor's Aetna Mortgage Trust Multiclass Pass-Through Certificates,
Series 1997-ALIC (the "Certificates") are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than, and, in certain cases,
prior to, distributions to Certificateholders, such purposes including the
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans and the payment of interest on such advances and expenses.
The Class C Certificates are issuable in fully registered form only,
without coupons, in minimum denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
Class C Certificates are exchangeable for new Class C
A-5-3
<PAGE>
Certificates in authorized denominations evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class C Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No transfer of a Class C Certificate or any interest therein shall be made
(A) to any employee benefit plan or other retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds and separate accounts in which such plans, accounts or
arrangements are invested, including, without limitation, insurance company
general accounts, that is subject to ERISA or the Code (each, a "Plan"), or (B)
to any Person who is directly or indirectly purchasing such Certificate or
interest therein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, unless: (i) in the case of a Certificate that constitutes a
Book-Entry Certificate, the purchase and holding of such Certificate or interest
therein is exempt from the prohibited transaction provisions of Section 406 of
ERISA and Section 4975 of the Code under Section I and III of Prohibited
Transaction Class Exemption 95-60; or (ii) in the case of a Class C Certificate
that is held as a Definitive Certificate, the prospective Transferee provides
the Certificate Registrar with a certification of facts and an Opinion of
Counsel which establish to the satisfaction of the Trustee that such transfer
will not result in a violation of Section 406 of ERISA or Section 4975 of the
Code or result in the imposition of an excise tax under Section 4975 of the Code
or subject the Depositor, the Trustee, the Master Servicer or the Special
Servicer to any obligation in addition to those undertaken in the Agreement.
Each Person who acquires any Class C Certificate or interest therein (unless it
shall have acquired such Certificate or interest therein from the Depositor or
an Affiliate thereof or unless it shall have delivered to the Certificate
Registrar the certification of facts and Opinion of Counsel referred to in
clause (ii) of the preceding sentence) shall be required to deliver to the
Certificate Registrar (or, in the case of an interest in a Book-Entry
Certificate, to the Certificate Owner that is transferring such interest) a
certification to the effect that: (i) it is neither a Plan nor any Person who is
directly or indirectly purchasing such Class C Certificate or interest therein
on behalf of, as named fiduciary of, as trustee of, or with assets of a Plan; or
(ii) the purchase and holding of such Certificate or interest therein by such
person is exempt from the prohibited transaction provisions of Section 406 of
ERISA and Section 4975 of the Code under Section I and II of Prohibited
Transaction Class Exemption 95-60.
No service charge will be imposed for any registration of transfer or
exchange of Class C Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
C Certificates.
Notwithstanding the foregoing, for so long as this Certificate is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC, transfers of interests in this Certificate
shall be made through the book-entry facilities of DTC.
A-5-4
<PAGE>
Prior to due presentment of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar and any agents 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 or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Operating Advisor, the Special Servicer, the Depositor, the Master Servicer or
the Holders of the Residual Certificates representing a majority Percentage
Interest in the Class R-I Interests, at a price determined as provided in the
Agreement, of all Mortgage Loans and any REO Properties remaining in the Trust
Fund. The Agreement permits, but does not require, the Operating Advisor, the
Special Servicer, the Depositor, the Master Servicer or such Holders to purchase
from the Trust Fund all Mortgage Loans and any REO Properties remaining therein
at such time as the aggregate Stated Principal Balance of the REMIC Mortgage
Pool is less than 5% of the aggregate Cut-off Date Principal Balance of the
REMIC Mortgage Pool specified on the face hereof. The exercise of such right
will effect early retirement of the Certificates.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee thereunder
and the rights of the Certificateholders thereunder, at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain circumstances, including any amendment necessary to maintain
the status of REMIC I, REMIC II or REMIC III as a REMIC, without the consent of
the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York applicable to agreements made and to be performed in said
State, and the obligations, rights and remedies of the Holder hereof shall be
determined in accordance with such laws.
A-5-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
State Street Bank and Trust Company,
as Trustee
By:_________________________________
Authorized Officer
A-5-6
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Class C Certificates referred to in the within-mentioned
Agreement.
Dated:
State Street Bank and Trust Company,
as Certificate Registrar
By:_________________________________
Authorized Officer
A-5-7
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Aetna Commercial Mortgage Trust Multiclass Pass-Through Certificate and hereby
authorize(s) the registration of transfer of such interest to the above named
assignee on the Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate of a like Percentage Interest and Class to
the above named assignee and delivery of such Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:___________
--------------------------------------
Signature by or on behalf of Assignor
--------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or otherwise,
in immediately available funds, to______________________________________________
for the account of_____________________________________________________________.
Distributions made by check (such check to be made payable to
_______________) and all applicable statements and notices should be mailed to
_______________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________, as its agent.
A-5-8
<PAGE>
EXHIBIT A-6
FORM OF CLASS D CERTIFICATE
CLASS D AETNA COMMERCIAL MORTGAGE TRUST MULTICLASS
PASS-THROUGH CERTIFICATE,
SERIES 1997-ALIC
evidencing a beneficial ownership interest in the REMIC Pool included in a trust
fund (the "Trust Fund") consisting primarily of a pool (the "REMIC Mortgage
Pool") of multifamily and commercial mortgage loans (the "REMIC Mortgage
Loans"), such pool being formed and sold by
MORGAN STANLEY CAPITAL I INC.
Pass-Through Rate: Certificate Principal Balance of this
7.2300% per annum Class D Certificate as of the
Issue Date: $__________
Date of Pooling and Servicing Class Principal Balance of all the Class
Agreement: December 1, 1997 D Certificates as of the Issue Date:
$48,162,000
Cut-off Date: December 1, 1997 Aggregate unpaid principal balance of the
Issue Date: December 30, 1997 REMIC Mortgage Pool as of the Cut-off Date,
after deducting payments of principal due
on or before such date, whether or not
received: $802,696,189
First Distribution Date:
January 15, 1998
Master Servicer: Midland Loan Services, L.P.
Trustee: State Street Bank and Trust
Company
Special Servicer: Aetna Life Insurance Company CUSIP No.: 61745M EF 6
Certificate No. D-__
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR, THE
TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF 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
A-6-1
<PAGE>
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 MORGAN
STANLEY CAPITAL I INC., MIDLAND LOAN SERVICES, L.P., AETNA LIFE INSURANCE
COMPANY, STATE STREET BANK AND TRUST COMPANY OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1A, CLASS A-1B, CLASS A-2, CLASS
IO, CLASS B AND CLASS C CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT
PROVIDED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN FOLLOWING RETIREMENT OF THE
CLASS A-1A, CLASS A-1B, CLASS A-2, CLASS B AND CLASS C CERTIFICATES OF THE SAME
SERIES. IN ADDITION, THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY
BE REDUCED IN CONNECTION WITH LOSSES ON THE MORTGAGE LOANS AND CERTAIN
UNANTICIPATED EXPENSES AS SET FORTH IN THE AGREEMENT (AS DEFINED HEREIN).
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that ____________________ is the registered owner of the
Percentage Interest evidenced by this Class D Certificate (obtained by dividing
the principal balance of this Class D Certificate (its "Certificate Principal
Balance") as of the Issue Date by the aggregate principal balance of all the
Class D Certificates (their "Class Principal Balance") as of the Issue Date) in
that certain beneficial ownership interest, evidenced by all the Class D
Certificates, in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), between Morgan Stanley
Capital I Inc., as Depositor, Midland Loan Services, L.P., as Master Servicer,
Aetna Life Insurance Company, as Seller and Special Servicer and State Street
Bank and
A-6-2
<PAGE>
Trust Company, as Trustee. To the extent not defined herein, the capitalized
terms used herein have the respective meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
15th day of each month or, if such 15th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class D Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on any Class D Certificate
will be made by the Trustee by wire transfer in immediately available funds to
the account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Trustee with wiring instructions on or prior to the Record Date for such
distribution (which wiring instructions may be in the form of a standing order
applicable to all subsequent distributions as well) or otherwise by check mailed
to the address of such Certificateholder appearing in the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate
(determined without regard to any possible future reimbursement of any Realized
Loss or Expense Loss previously allocated to this Certificate) will be made
after due notice by the Trustee of the pendency of such distribution and only
upon presentation and surrender of this Certificate at the offices of the
Certificate Registrar appointed as provided in the Agreement or such other
location as may be specified in such notice. Also notwithstanding the foregoing,
any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Expense Loss previously allocated to this
Certificate, which reimbursement is to occur after the date on which this
Certificate is surrendered as contemplated by the preceding sentence, will be
made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Depositor's Aetna Mortgage Trust Multiclass Pass-Through Certificates,
Series 1997-ALIC (the "Certificates") are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than, and, in certain cases,
prior to, distributions to Certificateholders, such purposes including the
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans and the payment of interest on such advances and expenses.
The Class D Certificates are issuable in fully registered form only,
without coupons, in minimum denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
Class D Certificates are exchangeable for new Class D
A-6-3
<PAGE>
Certificates in authorized denominations evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class D Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No transfer of a Class D Certificate or any interest therein shall be made
(A) to any employee benefit plan or other retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds and separate accounts in which such plans, accounts or
arrangements are invested, including, without limitation, insurance company
general accounts, that is subject to ERISA or the Code (each, a "Plan"), or (B)
to any Person who is directly or indirectly purchasing such Certificate or
interest therein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, unless: (i) in the case of a Certificate that constitutes a
Book-Entry Certificate, the purchase and holding of such Certificate or interest
therein is exempt from the prohibited transaction provisions of Section 406 of
ERISA and Section 4975 of the Code under Section I and III of Prohibited
Transaction Class Exemption 95-60; or (ii) in the case of a Class D Certificate
that is held as a Definitive Certificate, the prospective Transferee provides
the Certificate Registrar with a certification of facts and an Opinion of
Counsel which establish to the satisfaction of the Trustee that such transfer
will not result in a violation of Section 406 of ERISA or Section 4975 of the
Code or result in the imposition of an excise tax under Section 4975 of the Code
or subject the Depositor, the Trustee, the Master Servicer or the Special
Servicer to any obligation in addition to those undertaken in the Agreement.
Each Person who acquires any Class D Certificate or interest therein (unless it
shall have acquired such Certificate or interest therein from the Depositor or
an Affiliate thereof or unless it shall have delivered to the Certificate
Registrar the certification of facts and Opinion of Counsel referred to in
clause (ii) of the preceding sentence) shall be required to deliver to the
Certificate Registrar (or, in the case of an interest in a Book-Entry
Certificate, to the Certificate Owner that is transferring such interest) a
certification to the effect that: (i) it is neither a Plan nor any Person who is
directly or indirectly purchasing such Class D Certificate or interest therein
on behalf of, as named fiduciary of, as trustee of, or with assets of a Plan; or
(ii) the purchase and holding of such Certificate or interest therein by such
person is exempt from the prohibited transaction provisions of Section 406 of
ERISA and Section 4975 of the Code under Section I and II of Prohibited
Transaction Class Exemption 95-60.
No service charge will be imposed for any registration of transfer or
exchange of Class D Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
D Certificates.
Notwithstanding the foregoing, for so long as this Certificate is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC, transfers of interests in this Certificate
shall be made through the book-entry facilities of DTC.
A-6-4
<PAGE>
Prior to due presentment of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar and any agents 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 or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Operating Advisor, the Special Servicer, the Depositor, the Master Servicer or
the Holders of the Residual Certificates representing a majority Percentage
Interest in the Class R-I Interests, at a price determined as provided in the
Agreement, of all Mortgage Loans and any REO Properties remaining in the Trust
Fund. The Agreement permits, but does not require, the Operating Advisor, the
Special Servicer, the Depositor, the Master Servicer or such Holders to purchase
from the Trust Fund all Mortgage Loans and any REO Properties remaining therein
at such time as the aggregate Stated Principal Balance of the REMIC Mortgage
Pool is less than 5% of the aggregate Cut-off Date Principal Balance of the
REMIC Mortgage Pool specified on the face hereof. The exercise of such right
will effect early retirement of the Certificates.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee thereunder
and the rights of the Certificateholders thereunder, at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain circumstances, including any amendment necessary to maintain
the status of REMIC I, REMIC II or REMIC III as a REMIC, without the consent of
the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York applicable to agreements made and to be performed in said
State, and the obligations, rights and remedies of the Holder hereof shall be
determined in accordance with such laws.
A-6-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
State Street Bank and Trust Company,
as Trustee
By:_________________________________
Authorized Officer
A-6-6
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Class D Certificates referred to in the
within-mentioned Agreement.
Dated:
State Street Bank and Trust Company,
as Certificate Registrar
By:_________________________________
Authorized Officer
A-6-7
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Aetna Commercial Mortgage Trust Multiclass Pass-Through Certificate and hereby
authorize(s) the registration of transfer of such interest to the above named
assignee on the Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate of a like Percentage Interest and Class to
the above named assignee and delivery of such Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:___________
--------------------------------------
Signature by or on behalf of Assignor
--------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or otherwise,
in immediately available funds, to______________________________________________
for the account of_____________________________________________________________.
Distributions made by check (such check to be made payable to
_______________) and all applicable statements and notices should be mailed to
_______________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________, as its agent.
A-6-8
<PAGE>
EXHIBIT A-7
FORM OF CLASS E CERTIFICATE
CLASS E AETNA COMMERCIAL MORTGAGE TRUST MULTICLASS
PASS-THROUGH CERTIFICATE,
SERIES 1997-ALIC
evidencing a beneficial ownership interest in the REMIC Pool included in a trust
fund (the "Trust Fund") consisting primarily of a pool (the "REMIC Mortgage
Pool") of multifamily and commercial mortgage loans (the "REMIC Mortgage
Loans"), such pool being formed and sold by
MORGAN STANLEY CAPITAL I INC.
Pass-Through Rate: Certificate Principal Balance of this
7.5500% per annum Class E Certificate as of the
Issue Date: $__________
Date of Pooling and Servicing Class Principal Balance of all the Class
Agreement: December 1, 1997 E Certificates as of the Issue Date:
$20,067,000
Cut-off Date: December 1, 1997 Aggregate unpaid principal balance of the
Issue Date: December 30, 1997 REMIC Mortgage Pool as of the Cut-off Date,
after deducting payments of principal due
on or before such date, whether or not
received: $802,696,189
First Distribution Date:
January 15, 1998
Master Servicer: Midland Loan Services, L.P.
Trustee: State Street Bank and Trust
Company
Special Servicer: Aetna Life Insurance Company CUSIP No.: 61745M EG 4
Certificate No. E-__
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR, THE
TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF 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
A-7-1
<PAGE>
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 MORGAN
STANLEY CAPITAL I INC., MIDLAND LOAN SERVICES, L.P., AETNA LIFE INSURANCE
COMPANY, STATE STREET BANK AND TRUST COMPANY OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1A, CLASS A-1B, CLASS A-2, CLASS
IO, CLASS B, CLASS C AND CLASS D CERTIFICATES OF THE SAME SERIES, AS AND TO THE
EXTENT PROVIDED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN FOLLOWING RETIREMENT OF THE
CLASS A-1A, CLASS A-1B, CLASS A-2, CLASS B, CLASS C AND CLASS D CERTIFICATES OF
THE SAME SERIES. IN ADDITION, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE REDUCED IN CONNECTION WITH LOSSES ON THE MORTGAGE LOANS AND
CERTAIN UNANTICIPATED EXPENSES AS SET FORTH IN THE AGREEMENT (AS DEFINED
HEREIN). ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that ___________________ is the registered owner of the
Percentage Interest evidenced by this Class E Certificate (obtained by dividing
the principal balance of this Class E Certificate (its "Certificate Principal
Balance") as of the Issue Date by the aggregate principal balance of all the
Class E Certificates (their "Class Principal Balance") as of the Issue Date) in
that certain beneficial ownership interest, evidenced by all the Class E
Certificates, in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), between Morgan Stanley
Capital I Inc., as Depositor, Midland Loan Services, L.P., as Master Servicer,
Aetna Life Insurance Company, as Seller and Special Servicer and State Street
Bank and
A-7-2
<PAGE>
Trust Company, as Trustee. To the extent not defined herein, the capitalized
terms used herein have the respective meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
15th day of each month or, if such 15th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class E Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on any Class E Certificate
will be made by the Trustee by wire transfer in immediately available funds to
the account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Trustee with wiring instructions on or prior to the Record Date for such
distribution (which wiring instructions may be in the form of a standing order
applicable to all subsequent distributions as well) or otherwise by check mailed
to the address of such Certificateholder appearing in the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate
(determined without regard to any possible future reimbursement of any Realized
Loss or Expense Loss previously allocated to this Certificate) will be made
after due notice by the Trustee of the pendency of such distribution and only
upon presentation and surrender of this Certificate at the offices of the
Certificate Registrar appointed as provided in the Agreement or such other
location as may be specified in such notice. Also notwithstanding the foregoing,
any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Expense Loss previously allocated to this
Certificate, which reimbursement is to occur after the date on which this
Certificate is surrendered as contemplated by the preceding sentence, will be
made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Depositor's Aetna Mortgage Trust Multiclass Pass-Through Certificates,
Series 1997-ALIC (the "Certificates") are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than, and, in certain cases,
prior to, distributions to Certificateholders, such purposes including the
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans and the payment of interest on such advances and expenses.
The Class E Certificates are issuable in fully registered form only,
without coupons, in minimum denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
Class E Certificates are exchangeable for new Class E
A-7-3
<PAGE>
Certificates in authorized denominations evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class E Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No transfer of a Class E Certificate or any interest therein shall be made
(A) to any employee benefit plan or other retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds and separate accounts in which such plans, accounts or
arrangements are invested, including, without limitation, insurance company
general accounts, that is subject to ERISA or the Code (each, a "Plan"), or (B)
to any Person who is directly or indirectly purchasing such Certificate or
interest therein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, unless: (i) in the case of a Certificate that constitutes a
Book-Entry Certificate, the purchase and holding of such Certificate or interest
therein is exempt from the prohibited transaction provisions of Section 406 of
ERISA and Section 4975 of the Code under Section I and III of Prohibited
Transaction Class Exemption 95-60; or (ii) in the case of a Class E Certificate
that is held as a Definitive Certificate, the prospective Transferee provides
the Certificate Registrar with a certification of facts and an Opinion of
Counsel which establish to the satisfaction of the Trustee that such transfer
will not result in a violation of Section 406 of ERISA or Section 4975 of the
Code or result in the imposition of an excise tax under Section 4975 of the Code
or subject the Depositor, the Trustee, the Master Servicer or the Special
Servicer to any obligation in addition to those undertaken in the Agreement.
Each Person who acquires any Class E Certificate or interest therein (unless it
shall have acquired such Certificate or interest therein from the Depositor or
an Affiliate thereof or unless it shall have delivered to the Certificate
Registrar the certification of facts and Opinion of Counsel referred to in
clause (ii) of the preceding sentence) shall be required to deliver to the
Certificate Registrar (or, in the case of an interest in a Book-Entry
Certificate, to the Certificate Owner that is transferring such interest) a
certification to the effect that: (i) it is neither a Plan nor any Person who is
directly or indirectly purchasing such Class E Certificate or interest therein
on behalf of, as named fiduciary of, as trustee of, or with assets of a Plan; or
(ii) the purchase and holding of such Certificate or interest therein by such
person is exempt from the prohibited transaction provisions of Section 406 of
ERISA and Section 4975 of the Code under Section I and II of Prohibited
Transaction Class Exemption 95-60.
No service charge will be imposed for any registration of transfer or
exchange of Class E Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
E Certificates.
Notwithstanding the foregoing, for so long as this Certificate is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC, transfers of interests in this Certificate
shall be made through the book-entry facilities of DTC.
A-7-4
<PAGE>
Prior to due presentment of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar and any agents 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 or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Operating Advisor, the Special Servicer, the Depositor, the Master Servicer or
the Holders of the Residual Certificates representing a majority Percentage
Interest in the Class R-I Interests, at a price determined as provided in the
Agreement, of all Mortgage Loans and any REO Properties remaining in the Trust
Fund. The Agreement permits, but does not require, the Operating Advisor, the
Special Servicer, the Depositor, the Master Servicer or such Holders to purchase
from the Trust Fund all Mortgage Loans and any REO Properties remaining therein
at such time as the aggregate Stated Principal Balance of the REMIC Mortgage
Pool is less than 5% of the aggregate Cut-off Date Principal Balance of the
REMIC Mortgage Pool specified on the face hereof. The exercise of such right
will effect early retirement of the Certificates.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee thereunder
and the rights of the Certificateholders thereunder, at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain circumstances, including any amendment necessary to maintain
the status of REMIC I, REMIC II or REMIC III as a REMIC, without the consent of
the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York applicable to agreements made and to be performed in said
State, and the obligations, rights and remedies of the Holder hereof shall be
determined in accordance with such laws.
A-7-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
State Street Bank and Trust Company,
as Trustee
By:_________________________________
Authorized Officer
A-7-6
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Class E Certificates referred to in the within-mentioned
Agreement.
Dated:
State Street Bank and Trust Company,
as Certificate Registrar
By:_________________________________
Authorized Officer
A-7-7
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Aetna Commercial Mortgage Trust Multiclass Pass-Through Certificate and hereby
authorize(s) the registration of transfer of such interest to the above named
assignee on the Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate of a like Percentage Interest and Class to
the above named assignee and delivery of such Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:___________
--------------------------------------
Signature by or on behalf of Assignor
--------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or otherwise,
in immediately available funds, to______________________________________________
for the account of_____________________________________________________________.
Distributions made by check (such check to be made payable to
_______________) and all applicable statements and notices should be mailed to
_______________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________, as its agent.
A-7-8
<PAGE>
EXHIBIT A-8
FORM OF CLASS F CERTIFICATE
CLASS F AETNA COMMERCIAL MORTGAGE TRUST MULTICLASS
PASS-THROUGH CERTIFICATE,
SERIES 1997-ALIC
evidencing a beneficial ownership interest in the REMIC Pool included in a trust
fund (the "Trust Fund") consisting primarily of a pool (the "REMIC Mortgage
Pool") of multifamily and commercial mortgage loans (the "REMIC Mortgage
Loans"), such pool being formed and sold by
MORGAN STANLEY CAPITAL I INC.
Pass-Through Rate: Certificate Principal Balance of this
6.3000% per annum Class F Certificate as of the
Issue Date: $__________
Date of Pooling and Servicing Class Principal Balance of all the Class
Agreement: December 1, 1997 F Certificates as of the Issue Date:
$44,148,000
Cut-off Date: December 1, 1997 Aggregate unpaid principal balance of the
Issue Date: December 30, 1997 REMIC Mortgage Pool as of the Cut-off Date,
after deducting payments of principal due
on or before such date, whether or not
received: $802,696,189
First Distribution Date:
January 15, 1998
Master Servicer: Midland Loan Services, L.P.
Trustee: State Street Bank and Trust
Company
Special Servicer: Aetna Life Insurance Company CUSIP No.: 61745M EH 2
Certificate No. F-__
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR, THE
TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF 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
A-8-1
<PAGE>
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 MORGAN
STANLEY CAPITAL I INC., MIDLAND LOAN SERVICES, L.P., AETNA LIFE INSURANCE
COMPANY, STATE STREET BANK AND TRUST COMPANY OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1A, CLASS A-1B, CLASS A-2, CLASS
IO, CLASS B, CLASS C, CLASS D AND CLASS E CERTIFICATES OF THE SAME SERIES, AS
AND TO THE EXTENT PROVIDED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 3.3 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN FOLLOWING RETIREMENT OF THE
CLASS A-1A, CLASS A-1B, CLASS A-2, CLASS B, CLASS C, CLASS D AND CLASS E
CERTIFICATES OF THE SAME SERIES. IN ADDITION, THE CERTIFICATE PRINCIPAL BALANCE
OF THIS CERTIFICATE MAY BE REDUCED IN CONNECTION WITH LOSSES ON THE MORTGAGE
LOANS AND CERTAIN UNANTICIPATED EXPENSES AS SET FORTH IN THE AGREEMENT (AS
DEFINED HEREIN). ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
A-8-2
<PAGE>
This certifies that ____________________ is the registered owner of the
Percentage Interest evidenced by this Class F Certificate (obtained by dividing
the principal balance of this Class F Certificate (its "Certificate Principal
Balance") as of the Issue Date by the aggregate principal balance of all the
Class F Certificates (their "Class Principal Balance") as of the Issue Date) in
that certain beneficial ownership interest, evidenced by all the Class F
Certificates, in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), between Morgan Stanley
Capital I Inc., as Depositor, Midland Loan Services, L.P., as Master Servicer,
Aetna Life Insurance Company, as Seller and Special Servicer and State Street
Bank and Trust Company, as Trustee. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
15th day of each month or, if such 15th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class F Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on any Class F Certificate
will be made by the Trustee by wire transfer in immediately available funds to
the account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Trustee with wiring instructions on or prior to the Record Date for such
distribution (which wiring instructions may be in the form of a standing order
applicable to all subsequent distributions as well) or otherwise by check mailed
to the address of such Certificateholder appearing in the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate
(determined without regard to any possible future reimbursement of any Realized
Loss or Expense Loss previously allocated to this Certificate) will be made
after due notice by the Trustee of the pendency of such distribution and only
upon presentation and surrender of this Certificate at the offices of the
Certificate Registrar appointed as provided in the Agreement or such other
location as may be specified in such notice. Also notwithstanding the foregoing,
any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Expense Loss previously allocated to this
Certificate, which reimbursement is to occur after the date on which this
Certificate is surrendered as contemplated by the preceding sentence, will be
made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Depositor's Aetna Mortgage Trust Multiclass Pass-Through Certificates,
Series 1997-ALIC (the "Certificates") are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the
A-8-3
<PAGE>
Distribution Account may be made from time to time for purposes other than, and,
in certain cases, prior to, distributions to Certificateholders, such purposes
including the reimbursement of advances made, or certain expenses incurred, with
respect to the Mortgage Loans and the payment of interest on such advances and
expenses.
The Class F Certificates are issuable in fully registered form only,
without coupons, in minimum denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
Class F Certificates are exchangeable for new Class F Certificates in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class F Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No transfer, sale, pledge or other disposition of any Class F Certificate
or interest therein shall be made unless that transfer, sale, pledge or other
disposition is exempt from the registration and/or qualification requirements of
the Securities Act and any applicable state securities laws, or is otherwise
made in accordance with the Securities Act and such state securities laws. If a
transfer of any Class F Certificate held as a Definitive Certificate is to be
made without registration under the Securities Act (other than in connection
with the initial issuance of the Certificates or a transfer of such Class F
Certificate by the Depositor or any of its Affiliates), then the Certificate
Registrar shall refuse to register such transfer unless it receives (and upon
receipt, may conclusively rely upon) either: (i) a certificate from the
Certificateholder desiring to effect such transfer substantially in the form
attached to the Agreement as Exhibit D-1 and a certificate from such
Certificateholder's prospective transferee substantially in the form attached to
the Agreement either as Exhibit D-2A or as Exhibit D-2B; or (ii) an Opinion of
Counsel satisfactory to the Trustee to the effect that such transfer may be made
without registration under the Securities Act (which Opinion of Counsel shall
not be an expense of the Trust Fund or of the Depositor, the Master Servicer,
the Special Servicer, the Trustee or the Certificate Registrar in their
respective capacities as such), together with the written certification(s) as to
the facts surrounding such transfer on which such Opinion of Counsel is based.
If a transfer of any interest in a Class F Certificate that constitutes a
Book-Entry Certificate is to be made without registration under the Securities
Act (other than in connection with the initial issuance of the Certificates or a
transfer of any interest in such Class F Certificate by the Depositor or any of
its Affiliates), then the Certificate Owner desiring to effect such transfer
shall be required to obtain either (i) a certificate from such Certificate
Owner's prospective Transferee substantially in the form attached to the
Agreement as Exhibit D-3A or as Exhibit D-3B, or (ii) an Opinion of Counsel to
the effect that such transfer may be made without registration under the
Securities Act. None of the Depositor, the Trustee or the Certificate Registrar
is obligated to register or qualify any Class F Certificates under the
Securities Act or any other securities law or to take any action not otherwise
required under this Agreement to permit the transfer of any Class F Certificate
or interest therein without registration or qualification. Any Certificateholder
or Certificate Owner desiring to effect a transfer of Class F Certificates or
interests therein shall, and does hereby agree to, indemnify, the Depositor, the
Underwriter, the Trustee, the
A-8-4
<PAGE>
Master Servicer, the Special Servicer and the Certificate Registrar against any
liability that may result if the transfer is not exempt from such registration
or qualification or is not made in accordance with such federal and state laws.
No transfer of a Class F Certificate or any interest therein shall be made
(A) to any employee benefit plan or other retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds and separate accounts in which such plans, accounts or
arrangements are invested, including, without limitation, insurance company
general accounts, that is subject to ERISA or the Code (each, a "Plan"), or (B)
to any Person who is directly or indirectly purchasing such Certificate or
interest therein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, unless: (i) in the case of a Certificate that constitutes a
Book-Entry Certificate, the purchase and holding of such Certificate or interest
therein is exempt from the prohibited transaction provisions of Section 406 of
ERISA and Section 4975 of the Code under Section I and III of Prohibited
Transaction Class Exemption 95-60; or (ii) in the case of a Class F Certificate
that is held as a Definitive Certificate, the prospective Transferee provides
the Certificate Registrar with a certification of facts and an Opinion of
Counsel which establish to the satisfaction of the Trustee that such transfer
will not result in a violation of Section 406 of ERISA or Section 4975 of the
Code or result in the imposition of an excise tax under Section 4975 of the Code
or subject the Depositor, the Trustee, the Master Servicer or the Special
Servicer to any obligation in addition to those undertaken in the Agreement.
Each Person who acquires any Class F Certificate or interest therein (unless it
shall have acquired such Certificate or interest therein from the Depositor or
an Affiliate thereof or unless it shall have delivered to the Certificate
Registrar the certification of facts and Opinion of Counsel referred to in
clause (ii) of the preceding sentence) shall be required to deliver to the
Certificate Registrar (or, in the case of an interest in a Book-Entry
Certificate, to the Certificate Owner that is transferring such interest) a
certification to the effect that: (i) it is neither a Plan nor any Person who is
directly or indirectly purchasing such Class F Certificate or interest therein
on behalf of, as named fiduciary of, as trustee of, or with assets of a Plan; or
(ii) the purchase and holding of such Certificate or interest therein by such
person is exempt from the prohibited transaction provisions of Section 406 of
ERISA and Section 4975 of the Code under Section I and II of Prohibited
Transaction Class Exemption 95-60.
No service charge will be imposed for any registration of transfer or
exchange of Class F Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
F Certificates.
Notwithstanding the foregoing, for so long as this Certificate is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC, transfers of interests in this Certificate
shall be made through the book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar and any agents 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 or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on
A-8-5
<PAGE>
behalf of the Trustee and required to be distributed to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan or REO Property
remaining in the Trust Fund, and (ii) the purchase by the Operating Advisor, the
Special Servicer, the Depositor, the Master Servicer or the Holders of the
Residual Certificates representing a majority Percentage Interest in the Class
R-I Interests, at a price determined as provided in the Agreement, of all
Mortgage Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, the Operating Advisor, the Special Servicer, the
Depositor, the Master Servicer or such Holders to purchase from the Trust Fund
all Mortgage Loans and any REO Properties remaining therein at such time as the
aggregate Stated Principal Balance of the REMIC Mortgage Pool is less than 5% of
the aggregate Cut-off Date Principal Balance of the REMIC Mortgage Pool
specified on the face hereof. The exercise of such right will effect early
retirement of the Certificates.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee thereunder
and the rights of the Certificateholders thereunder, at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain circumstances, including any amendment necessary to maintain
the status of REMIC I, REMIC II or REMIC III as a REMIC, without the consent of
the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York applicable to agreements made and to be performed in said
State, and the obligations, rights and remedies of the Holder hereof shall be
determined in accordance with such laws.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
State Street Bank and Trust Company,
as Trustee
By:_________________________________
Authorized Officer
A-8-6
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Class F Certificates referred to in the within-mentioned
Agreement.
Dated:
State Street Bank and Trust Company,
as Certificate Registrar
By:_________________________________
Authorized Officer
A-8-7
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Aetna Commercial Mortgage Trust Multiclass Pass-Through Certificate and hereby
authorize(s) the registration of transfer of such interest to the above named
assignee on the Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate of a like Percentage Interest and Class to
the above named assignee and delivery of such Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:___________
--------------------------------------
Signature by or on behalf of Assignor
--------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or otherwise,
in immediately available funds, to______________________________________________
for the account of_____________________________________________________________.
Distributions made by check (such check to be made payable to
_______________) and all applicable statements and notices should be mailed to
_______________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________, as its agent.
A-8-8
<PAGE>
EXHIBIT A-9
FORM OF CLASS G CERTIFICATE
CLASS G AETNA COMMERCIAL MORTGAGE TRUST MULTICLASS
PASS-THROUGH CERTIFICATE,
SERIES 1997-ALIC
evidencing a beneficial ownership interest in the REMIC Pool included in a trust
fund (the "Trust Fund") consisting primarily of a pool (the "REMIC Mortgage
Pool") of multifamily and commercial mortgage loans (the "REMIC Mortgage
Loans"), such pool being formed and sold by
MORGAN STANLEY CAPITAL I INC.
Pass-Through Rate: Certificate Principal Balance of this
6.3000% per annum Class G Certificate as of the
Issue Date: $__________
Date of Pooling and Servicing Class Principal Balance of all the Class
Agreement: December 1, 1997 G Certificates as of the Issue Date:
$8,027,000
Cut-off Date: December 1, 1997 Aggregate unpaid principal balance of the
Issue Date: December 30, 1997 REMIC Mortgage Pool as of the Cut-off Date,
after deducting payments of principal due
on or before such date, whether or not
received: $802,696,189
First Distribution Date:
January 15, 1998
Master Servicer: Midland Loan Services, L.P.
Trustee: State Street Bank and Trust
Company
Special Servicer: Aetna Life Insurance Company CUSIP No.: 61745M EJ 8
Certificate No. G-__
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR, THE
TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF 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
A-9-1
<PAGE>
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 MORGAN
STANLEY CAPITAL I INC., MIDLAND LOAN SERVICES, L.P., AETNA LIFE INSURANCE
COMPANY, STATE STREET BANK AND TRUST COMPANY OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1A, CLASS A-1B, CLASS A-2, CLASS
IO, CLASS B, CLASS C, CLASS D, CLASS E AND CLASS F CERTIFICATES OF THE SAME
SERIES, AS AND TO THE EXTENT PROVIDED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 3.3 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN FOLLOWING RETIREMENT OF THE
CLASS A-1A, CLASS A-1B, CLASS A-2, CLASS B, CLASS C, CLASS D, CLASS E AND CLASS
F CERTIFICATES OF THE SAME SERIES. IN ADDITION, THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE REDUCED IN CONNECTION WITH LOSSES ON THE
MORTGAGE LOANS AND CERTAIN UNANTICIPATED EXPENSES AS SET FORTH IN THE AGREEMENT
(AS DEFINED HEREIN). ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
A-9-2
<PAGE>
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that ______________________ is the registered owner of the
Percentage Interest evidenced by this Class G Certificate (obtained by dividing
the principal balance of this Class G Certificate (its "Certificate Principal
Balance") as of the Issue Date by the aggregate principal balance of all the
Class G Certificates (their "Class Principal Balance") as of the Issue Date) in
that certain beneficial ownership interest, evidenced by all the Class G
Certificates, in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), between Morgan Stanley
Capital I Inc., as Depositor, Midland Loan Services, L.P., as Master Servicer,
Aetna Life Insurance Company, as Seller and Special Servicer and State Street
Bank and Trust Company, as Trustee. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
15th day of each month or, if such 15th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class G Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on any Class G Certificate
will be made by the Trustee by wire transfer in immediately available funds to
the account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Trustee with wiring instructions on or prior to the Record Date for such
distribution (which wiring instructions may be in the form of a standing order
applicable to all subsequent distributions as well) or otherwise by check mailed
to the address of such Certificateholder appearing in the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate
(determined without regard to any possible future reimbursement of any Realized
Loss or Expense Loss previously allocated to this Certificate) will be made
after due notice by the Trustee of the pendency of such distribution and only
upon presentation and surrender of this Certificate at the offices of the
Certificate Registrar appointed as provided in the Agreement or such other
location as may be specified in such notice. Also notwithstanding the foregoing,
any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Expense Loss previously allocated to this
Certificate, which reimbursement is to occur after the date on which this
Certificate is surrendered as contemplated by the preceding sentence, will be
made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
A-9-3
<PAGE>
The Depositor's Aetna Mortgage Trust Multiclass Pass-Through Certificates,
Series 1997-ALIC (the "Certificates") are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than, and, in certain cases,
prior to, distributions to Certificateholders, such purposes including the
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans and the payment of interest on such advances and expenses.
The Class G Certificates are issuable in fully registered form only,
without coupons, in minimum denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
Class G Certificates are exchangeable for new Class G Certificates in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class G Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No transfer, sale, pledge or other disposition of any Class G Certificate
or interest therein shall be made unless that transfer, sale, pledge or other
disposition is exempt from the registration and/or qualification requirements of
the Securities Act and any applicable state securities laws, or is otherwise
made in accordance with the Securities Act and such state securities laws. If a
transfer of any Class G Certificate held as a Definitive Certificate is to be
made without registration under the Securities Act (other than in connection
with the initial issuance of the Certificates or a transfer of such Class G
Certificate by the Depositor or any of its Affiliates), then the Certificate
Registrar shall refuse to register such transfer unless it receives (and upon
receipt, may conclusively rely upon) either: (i) a certificate from the
Certificateholder desiring to effect such transfer substantially in the form
attached to the Agreement as Exhibit D-1 and a certificate from such
Certificateholder's prospective transferee substantially in the form attached to
the Agreement either as Exhibit D-2A or as Exhibit D-2B; or (ii) an Opinion of
Counsel satisfactory to the Trustee to the effect that such transfer may be made
without registration under the Securities Act (which Opinion of Counsel shall
not be an expense of the Trust Fund or of the Depositor, the Master Servicer,
the Special Servicer, the Trustee or the Certificate Registrar in their
respective capacities as such), together with the written certification(s) as to
the facts surrounding such transfer on which such Opinion of Counsel is based.
If a transfer of any interest in a Class G Certificate that constitutes a
Book-Entry Certificate is to be made without registration under the Securities
Act (other than in connection with the initial issuance of the Certificates or a
transfer of any interest in such Class G Certificate by the Depositor or any of
its Affiliates), then the Certificate Owner desiring to effect such transfer
shall be required to obtain either (i) a certificate from such Certificate
Owner's prospective Transferee substantially in the form attached to the
Agreement as Exhibit D-3A or as Exhibit D-3B, or (ii) an Opinion of Counsel to
the effect that such transfer may be made without registration under the
Securities Act. None of the Depositor, the Trustee or the Certificate Registrar
is obligated to register or qualify any Class G Certificates under the
Securities Act or any other
A-9-4
<PAGE>
securities law or to take any action not otherwise required under this Agreement
to permit the transfer of any Class G Certificate or interest therein without
registration or qualification. Any Certificateholder or Certificate Owner
desiring to effect a transfer of Class G Certificates or interests therein
shall, and does hereby agree to, indemnify, the Depositor, the Underwriter, the
Trustee, the Master Servicer, the Special Servicer and the Certificate Registrar
against any liability that may result if the transfer is not exempt from such
registration or qualification or is not made in accordance with such federal and
state laws.
No transfer of a Class G Certificate or any interest therein shall be made
(A) to any employee benefit plan or other retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds and separate accounts in which such plans, accounts or
arrangements are invested, including, without limitation, insurance company
general accounts, that is subject to ERISA or the Code (each, a "Plan"), or (B)
to any Person who is directly or indirectly purchasing such Certificate or
interest therein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, unless: (i) in the case of a Certificate that constitutes a
Book-Entry Certificate, the purchase and holding of such Certificate or interest
therein is exempt from the prohibited transaction provisions of Section 406 of
ERISA and Section 4975 of the Code under Section I and III of Prohibited
Transaction Class Exemption 95-60; or (ii) in the case of a Class G Certificate
that is held as a Definitive Certificate, the prospective Transferee provides
the Certificate Registrar with a certification of facts and an Opinion of
Counsel which establish to the satisfaction of the Trustee that such transfer
will not result in a violation of Section 406 of ERISA or Section 4975 of the
Code or result in the imposition of an excise tax under Section 4975 of the Code
or subject the Depositor, the Trustee, the Master Servicer or the Special
Servicer to any obligation in addition to those undertaken in the Agreement.
Each Person who acquires any Class G Certificate or interest therein (unless it
shall have acquired such Certificate or interest therein from the Depositor or
an Affiliate thereof or unless it shall have delivered to the Certificate
Registrar the certification of facts and Opinion of Counsel referred to in
clause (ii) of the preceding sentence) shall be required to deliver to the
Certificate Registrar (or, in the case of an interest in a Book-Entry
Certificate, to the Certificate Owner that is transferring such interest) a
certification to the effect that: (i) it is neither a Plan nor any Person who is
directly or indirectly purchasing such Class G Certificate or interest therein
on behalf of, as named fiduciary of, as trustee of, or with assets of a Plan; or
(ii) the purchase and holding of such Certificate or interest therein by such
person is exempt from the prohibited transaction provisions of Section 406 of
ERISA and Section 4975 of the Code under Section I and II of Prohibited
Transaction Class Exemption 95-60.
No service charge will be imposed for any registration of transfer or
exchange of Class G Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
G Certificates.
Notwithstanding the foregoing, for so long as this Certificate is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC, transfers of interests in this Certificate
shall be made through the book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar and any agents of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof
A-9-5
<PAGE>
for all purposes, and none of the Depositor, the Master Servicer, the Special
Servicer, the Trustee, the Certificate Registrar or any such agent shall be
affected by notice to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Operating Advisor, the Special Servicer, the Depositor, the Master Servicer or
the Holders of the Residual Certificates representing a majority Percentage
Interest in the Class R-I Interests, at a price determined as provided in the
Agreement, of all Mortgage Loans and any REO Properties remaining in the Trust
Fund. The Agreement permits, but does not require, the Operating Advisor, the
Special Servicer, the Depositor, the Master Servicer or such Holders to purchase
from the Trust Fund all Mortgage Loans and any REO Properties remaining therein
at such time as the aggregate Stated Principal Balance of the REMIC Mortgage
Pool is less than 5% of the aggregate Cut-off Date Principal Balance of the
REMIC Mortgage Pool specified on the face hereof. The exercise of such right
will effect early retirement of the Certificates.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee thereunder
and the rights of the Certificateholders thereunder, at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain circumstances, including any amendment necessary to maintain
the status of REMIC I, REMIC II or REMIC III as a REMIC, without the consent of
the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York applicable to agreements made and to be performed in said
State, and the obligations, rights and remedies of the Holder hereof shall be
determined in accordance with such laws.
A-9-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
State Street Bank and Trust Company,
as Trustee
By:_________________________________
Authorized Officer
A-9-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Class G Certificates referred to in the within-mentioned
Agreement.
Dated:
State Street Bank and Trust Company,
as Certificate Registrar
By:_________________________________
Authorized Officer
A-9-8
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Aetna Commercial Mortgage Trust Multiclass Pass-Through Certificate and hereby
authorize(s) the registration of transfer of such interest to the above named
assignee on the Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate of a like Percentage Interest and Class to
the above named assignee and delivery of such Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:___________
--------------------------------------
Signature by or on behalf of Assignor
--------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or otherwise,
in immediately available funds, to______________________________________________
for the account of_____________________________________________________________.
Distributions made by check (such check to be made payable to
_______________) and all applicable statements and notices should be mailed to
_______________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________, as its agent.
A-9-9
<PAGE>
EXHIBIT A-10
FORM OF CLASS H CERTIFICATE
CLASS H AETNA COMMERCIAL MORTGAGE TRUST MULTICLASS
PASS-THROUGH CERTIFICATE,
SERIES 1997-ALIC
evidencing a beneficial ownership interest in the REMIC Pool included in a trust
fund (the "Trust Fund") consisting primarily of a pool (the "REMIC Mortgage
Pool") of multifamily and commercial mortgage loans (the "REMIC Mortgage
Loans"), such pool being formed and sold by
MORGAN STANLEY CAPITAL I INC.
Pass-Through Rate: Certificate Principal Balance of this
6.3000% per annum Class H Certificate as of the
Issue Date: $__________
Date of Pooling and Servicing Class Principal Balance of all the Class
Agreement: December 1, 1997 H Certificates as of the Issue Date:
$14,047,000
Cut-off Date: December 1, 1997 Aggregate unpaid principal balance of the
Issue Date: December 30, 1997 REMIC Mortgage Pool as of the Cut-off Date,
after deducting payments of principal due
on or before such date, whether or not
received: $802,696,189
First Distribution Date:
January 15, 1998
Master Servicer: Midland Loan Services, L.P.
Trustee: State Street Bank and Trust
Company
Special Servicer: Aetna Life Insurance Company CUSIP No.: 61745M EK 5
Certificate No. H-__
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR, THE
TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF 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
A-10-1
<PAGE>
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 MORGAN
STANLEY CAPITAL I INC., MIDLAND LOAN SERVICES, L.P., AETNA LIFE INSURANCE
COMPANY, STATE STREET BANK AND TRUST COMPANY OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1A, CLASS A-1B, CLASS A-2, CLASS
IO, CLASS B, CLASS C, CLASS D, CLASS E, CLASS F AND CLASS G CERTIFICATES OF THE
SAME SERIES, AS AND TO THE EXTENT PROVIDED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 3.3 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN FOLLOWING RETIREMENT OF THE
CLASS A-1A, CLASS A-1B, CLASS A-2, CLASS B, CLASS C, CLASS D, CLASS E, CLASS F
AND CLASS G CERTIFICATES OF THE SAME SERIES. IN ADDITION, THE CERTIFICATE
PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE REDUCED IN CONNECTION WITH LOSSES
ON THE MORTGAGE LOANS AND CERTAIN UNANTICIPATED EXPENSES AS SET FORTH IN THE
AGREEMENT (AS DEFINED HEREIN). ACCORDINGLY, THE OUTSTANDING CERTIFICATE
PRINCIPAL
A-10-2
<PAGE>
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that _______________________ is the registered owner of the
Percentage Interest evidenced by this Class H Certificate (obtained by dividing
the principal balance of this Class H Certificate (its "Certificate Principal
Balance") as of the Issue Date by the aggregate principal balance of all the
Class H Certificates (their "Class Principal Balance") as of the Issue Date) in
that certain beneficial ownership interest, evidenced by all the Class H
Certificates, in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), between Morgan Stanley
Capital I Inc., as Depositor, Midland Loan Services, L.P., as Master Servicer,
Aetna Life Insurance Company, as Seller and Special Servicer and State Street
Bank and Trust Company, as Trustee. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
15th day of each month or, if such 15th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class H Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on any Class H Certificate
will be made by the Trustee by wire transfer in immediately available funds to
the account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Trustee with wiring instructions on or prior to the Record Date for such
distribution (which wiring instructions may be in the form of a standing order
applicable to all subsequent distributions as well) or otherwise by check mailed
to the address of such Certificateholder appearing in the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate
(determined without regard to any possible future reimbursement of any Realized
Loss or Expense Loss previously allocated to this Certificate) will be made
after due notice by the Trustee of the pendency of such distribution and only
upon presentation and surrender of this Certificate at the offices of the
Certificate Registrar appointed as provided in the Agreement or such other
location as may be specified in such notice. Also notwithstanding the foregoing,
any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Expense Loss previously allocated to this
Certificate, which reimbursement is to occur after the date on which this
Certificate is surrendered as contemplated by the preceding sentence, will be
made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
A-10-3
<PAGE>
The Depositor's Aetna Mortgage Trust Multiclass Pass-Through Certificates,
Series 1997-ALIC (the "Certificates") are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than, and, in certain cases,
prior to, distributions to Certificateholders, such purposes including the
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans and the payment of interest on such advances and expenses.
The Class H Certificates are issuable in fully registered form only,
without coupons, in minimum denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
Class H Certificates are exchangeable for new Class H Certificates in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class H Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No transfer, sale, pledge or other disposition of any Class H Certificate
or interest therein shall be made unless that transfer, sale, pledge or other
disposition is exempt from the registration and/or qualification requirements of
the Securities Act and any applicable state securities laws, or is otherwise
made in accordance with the Securities Act and such state securities laws. If a
transfer of any Class H Certificate held as a Definitive Certificate is to be
made without registration under the Securities Act (other than in connection
with the initial issuance of the Certificates or a transfer of such Class H
Certificate by the Depositor or any of its Affiliates), then the Certificate
Registrar shall refuse to register such transfer unless it receives (and upon
receipt, may conclusively rely upon) either: (i) a certificate from the
Certificateholder desiring to effect such transfer substantially in the form
attached to the Agreement as Exhibit D-1 and a certificate from such
Certificateholder's prospective transferee substantially in the form attached to
the Agreement either as Exhibit D-2A or as Exhibit D-2B; or (ii) an Opinion of
Counsel satisfactory to the Trustee to the effect that such transfer may be made
without registration under the Securities Act (which Opinion of Counsel shall
not be an expense of the Trust Fund or of the Depositor, the Master Servicer,
the Special Servicer, the Trustee or the Certificate Registrar in their
respective capacities as such), together with the written certification(s) as to
the facts surrounding such transfer on which such Opinion of Counsel is based.
If a transfer of any interest in a Class H Certificate that constitutes a
Book-Entry Certificate is to be made without registration under the Securities
Act (other than in connection with the initial issuance of the Certificates or a
transfer of any interest in such Class H Certificate by the Depositor or any of
its Affiliates), then the Certificate Owner desiring to effect such transfer
shall be required to obtain either (i) a certificate from such Certificate
Owner's prospective Transferee substantially in the form attached to the
Agreement as Exhibit D-3A or as Exhibit D-3B, or (ii) an Opinion of Counsel to
the effect that such transfer may be made without registration under the
Securities Act. None of the Depositor, the Trustee or the Certificate Registrar
is obligated to register or qualify any Class H Certificates under the
Securities Act or any other
A-10-4
<PAGE>
securities law or to take any action not otherwise required under this Agreement
to permit the transfer of any Class H Certificate or interest therein without
registration or qualification. Any Certificateholder or Certificate Owner
desiring to effect a transfer of Class H Certificates or interests therein
shall, and does hereby agree to, indemnify, the Depositor, the Underwriter, the
Trustee, the Master Servicer, the Special Servicer and the Certificate Registrar
against any liability that may result if the transfer is not exempt from such
registration or qualification or is not made in accordance with such federal and
state laws.
No transfer of a Class H Certificate or any interest therein shall be made
(A) to any employee benefit plan or other retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds and separate accounts in which such plans, accounts or
arrangements are invested, including, without limitation, insurance company
general accounts, that is subject to ERISA or the Code (each, a "Plan"), or (B)
to any Person who is directly or indirectly purchasing such Certificate or
interest therein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, unless: (i) in the case of a Certificate that constitutes a
Book-Entry Certificate, the purchase and holding of such Certificate or interest
therein is exempt from the prohibited transaction provisions of Section 406 of
ERISA and Section 4975 of the Code under Section I and III of Prohibited
Transaction Class Exemption 95-60; or (ii) in the case of a Class H Certificate
that is held as a Definitive Certificate, the prospective Transferee provides
the Certificate Registrar with a certification of facts and an Opinion of
Counsel which establish to the satisfaction of the Trustee that such transfer
will not result in a violation of Section 406 of ERISA or Section 4975 of the
Code or result in the imposition of an excise tax under Section 4975 of the Code
or subject the Depositor, the Trustee, the Master Servicer or the Special
Servicer to any obligation in addition to those undertaken in the Agreement.
Each Person who acquires any Class H Certificate or interest therein (unless it
shall have acquired such Certificate or interest therein from the Depositor or
an Affiliate thereof or unless it shall have delivered to the Certificate
Registrar the certification of facts and Opinion of Counsel referred to in
clause (ii) of the preceding sentence) shall be required to deliver to the
Certificate Registrar (or, in the case of an interest in a Book-Entry
Certificate, to the Certificate Owner that is transferring such interest) a
certification to the effect that: (i) it is neither a Plan nor any Person who is
directly or indirectly purchasing such Class H Certificate or interest therein
on behalf of, as named fiduciary of, as trustee of, or with assets of a Plan; or
(ii) the purchase and holding of such Certificate or interest therein by such
person is exempt from the prohibited transaction provisions of Section 406 of
ERISA and Section 4975 of the Code under Section I and II of Prohibited
Transaction Class Exemption 95-60.
No service charge will be imposed for any registration of transfer or
exchange of Class H Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
H Certificates.
Notwithstanding the foregoing, for so long as this Certificate is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC, transfers of interests in this Certificate
shall be made through the book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar and any agents of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof
A-10-5
<PAGE>
for all purposes, and none of the Depositor, the Master Servicer, the Special
Servicer, the Trustee, the Certificate Registrar or any such agent shall be
affected by notice to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Operating Advisor, the Special Servicer, the Depositor, the Master Servicer or
the Holders of the Residual Certificates representing a majority Percentage
Interest in the Class R-I Interests, at a price determined as provided in the
Agreement, of all Mortgage Loans and any REO Properties remaining in the Trust
Fund. The Agreement permits, but does not require, the Operating Advisor, the
Special Servicer, the Depositor, the Master Servicer or such Holders to purchase
from the Trust Fund all Mortgage Loans and any REO Properties remaining therein
at such time as the aggregate Stated Principal Balance of the REMIC Mortgage
Pool is less than 5% of the aggregate Cut-off Date Principal Balance of the
REMIC Mortgage Pool specified on the face hereof. The exercise of such right
will effect early retirement of the Certificates.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee thereunder
and the rights of the Certificateholders thereunder, at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain circumstances, including any amendment necessary to maintain
the status of REMIC I, REMIC II or REMIC III as a REMIC, without the consent of
the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York applicable to agreements made and to be performed in said
State, and the obligations, rights and remedies of the Holder hereof shall be
determined in accordance with such laws.
A-10-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
State Street Bank and Trust Company,
as Trustee
By:_________________________________
Authorized Officer
A-10-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Class H Certificates referred to in the within-mentioned
Agreement.
Dated:
State Street Bank and Trust Company,
as Certificate Registrar
By:_________________________________
Authorized Officer
A-10-8
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Aetna Commercial Mortgage Trust Multiclass Pass-Through Certificate and hereby
authorize(s) the registration of transfer of such interest to the above named
assignee on the Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate of a like Percentage Interest and Class to
the above named assignee and delivery of such Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:___________
--------------------------------------
Signature by or on behalf of Assignor
--------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or otherwise,
in immediately available funds, to______________________________________________
for the account of_____________________________________________________________.
Distributions made by check (such check to be made payable to
_______________) and all applicable statements and notices should be mailed to
_______________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________, as its agent.
A-10-9
<PAGE>
EXHIBIT A-11
FORM OF CLASS J CERTIFICATE
CLASS J AETNA COMMERCIAL MORTGAGE TRUST MULTICLASS
PASS-THROUGH CERTIFICATE,
SERIES 1997-ALIC
evidencing a beneficial ownership interest in the REMIC Pool included in a trust
fund (the "Trust Fund") consisting primarily of a pool (the "REMIC Mortgage
Pool") of multifamily and commercial mortgage loans (the "REMIC Mortgage
Loans"), such pool being formed and sold by
MORGAN STANLEY CAPITAL I INC.
Pass-Through Rate: Certificate Principal Balance of this
6.3000% per annum Class J Certificate as of the
Issue Date: $__________
Date of Pooling and Servicing Class Principal Balance of all the Class
Agreement: December 1, 1997 J Certificates as of the Issue Date:
$26,088,000
Cut-off Date: December 1, 1997 Aggregate unpaid principal balance of the
Issue Date: December 30, 1997 REMIC Mortgage Pool as of the Cut-off Date,
after deducting payments of principal due
on or before such date, whether or not
received: $802,696,189
First Distribution Date:
January 15, 1998
Master Servicer: Midland Loan Services, L.P.
Trustee: State Street Bank and Trust
Company
Special Servicer: Aetna Life Insurance Company CUSIP No.: 61745M EL 3
Certificate No. J-__
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR, THE
TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF 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
A-11-1
<PAGE>
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 MORGAN
STANLEY CAPITAL I INC., MIDLAND LOAN SERVICES, L.P., AETNA LIFE INSURANCE
COMPANY, STATE STREET BANK AND TRUST COMPANY OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1A, CLASS A-1B, CLASS A-2, CLASS
IO, CLASS B, CLASS C, CLASS D, CLASS E, CLASS F, CLASS G AND CLASS H
CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT PROVIDED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 3.3 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN FOLLOWING RETIREMENT OF THE
CLASS A-1A, CLASS A-1B, CLASS A-2, CLASS B, CLASS C, CLASS D, CLASS E, CLASS F,
CLASS G AND CLASS H CERTIFICATES OF THE SAME SERIES. IN ADDITION, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE REDUCED IN CONNECTION
WITH LOSSES ON THE MORTGAGE LOANS AND CERTAIN UNANTICIPATED EXPENSES AS SET
FORTH IN THE AGREEMENT (AS DEFINED HEREIN). ACCORDINGLY, THE OUTSTANDING
A-11-2
<PAGE>
CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ABOVE.
This certifies that ________________________ is the registered owner of the
Percentage Interest evidenced by this Class J Certificate (obtained by dividing
the principal balance of this Class J Certificate (its "Certificate Principal
Balance") as of the Issue Date by the aggregate principal balance of all the
Class J Certificates (their "Class Principal Balance") as of the Issue Date) in
that certain beneficial ownership interest, evidenced by all the Class J
Certificates, in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), between Morgan Stanley
Capital I Inc., as Depositor, Midland Loan Services, L.P., as Master Servicer,
Aetna Life Insurance Company, as Seller and Special Servicer and State Street
Bank and Trust Company, as Trustee. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
15th day of each month or, if such 15th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class J Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on any Class J Certificate
will be made by the Trustee by wire transfer in immediately available funds to
the account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Trustee with wiring instructions on or prior to the Record Date for such
distribution (which wiring instructions may be in the form of a standing order
applicable to all subsequent distributions as well) or otherwise by check mailed
to the address of such Certificateholder appearing in the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate
(determined without regard to any possible future reimbursement of any Realized
Loss or Expense Loss previously allocated to this Certificate) will be made
after due notice by the Trustee of the pendency of such distribution and only
upon presentation and surrender of this Certificate at the offices of the
Certificate Registrar appointed as provided in the Agreement or such other
location as may be specified in such notice. Also notwithstanding the foregoing,
any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Expense Loss previously allocated to this
Certificate, which reimbursement is to occur after the date on which this
Certificate is surrendered as contemplated by the preceding sentence, will be
made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
A-11-3
<PAGE>
The Depositor's Aetna Mortgage Trust Multiclass Pass-Through Certificates,
Series 1997-ALIC (the "Certificates") are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than, and, in certain cases,
prior to, distributions to Certificateholders, such purposes including the
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans and the payment of interest on such advances and expenses.
The Class J Certificates are issuable in fully registered form only,
without coupons, in minimum denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
Class J Certificates are exchangeable for new Class J Certificates in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class J Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No transfer, sale, pledge or other disposition of any Class J Certificate
or interest therein shall be made unless that transfer, sale, pledge or other
disposition is exempt from the registration and/or qualification requirements of
the Securities Act and any applicable state securities laws, or is otherwise
made in accordance with the Securities Act and such state securities laws. If a
transfer of any Class J Certificate held as a Definitive Certificate is to be
made without registration under the Securities Act (other than in connection
with the initial issuance of the Certificates or a transfer of such Class J
Certificate by the Depositor or any of its Affiliates), then the Certificate
Registrar shall refuse to register such transfer unless it receives (and upon
receipt, may conclusively rely upon) either: (i) a certificate from the
Certificateholder desiring to effect such transfer substantially in the form
attached to the Agreement as Exhibit D-1 and a certificate from such
Certificateholder's prospective transferee substantially in the form attached to
the Agreement either as Exhibit D-2A or as Exhibit D-2B; or (ii) an Opinion of
Counsel satisfactory to the Trustee to the effect that such transfer may be made
without registration under the Securities Act (which Opinion of Counsel shall
not be an expense of the Trust Fund or of the Depositor, the Master Servicer,
the Special Servicer, the Trustee or the Certificate Registrar in their
respective capacities as such), together with the written certification(s) as to
the facts surrounding such transfer on which such Opinion of Counsel is based.
If a transfer of any interest in a Class J Certificate that constitutes a
Book-Entry Certificate is to be made without registration under the Securities
Act (other than in connection with the initial issuance of the Certificates or a
transfer of any interest in such Class J Certificate by the Depositor or any of
its Affiliates), then the Certificate Owner desiring to effect such transfer
shall be required to obtain either (i) a certificate from such Certificate
Owner's prospective Transferee substantially in the form attached to the
Agreement as Exhibit D-3A or as Exhibit D-3B, or (ii) an Opinion of Counsel to
the effect that such transfer may be made without registration under the
Securities Act. None of the Depositor, the Trustee or the Certificate Registrar
is obligated to register or qualify any Class J Certificates under the
Securities Act or any other
A-11-4
<PAGE>
securities law or to take any action not otherwise required under this Agreement
to permit the transfer of any Class J Certificate or interest therein without
registration or qualification. Any Certificateholder or Certificate Owner
desiring to effect a transfer of Class J Certificates or interests therein
shall, and does hereby agree to, indemnify, the Depositor, the Underwriter, the
Trustee, the Master Servicer, the Special Servicer and the Certificate Registrar
against any liability that may result if the transfer is not exempt from such
registration or qualification or is not made in accordance with such federal and
state laws.
No transfer of a Class J Certificate or any interest therein shall be made
(A) to any employee benefit plan or other retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds and separate accounts in which such plans, accounts or
arrangements are invested, including, without limitation, insurance company
general accounts, that is subject to ERISA or the Code (each, a "Plan"), or (B)
to any Person who is directly or indirectly purchasing such Certificate or
interest therein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, unless: (i) in the case of a Certificate that constitutes a
Book-Entry Certificate, the purchase and holding of such Certificate or interest
therein is exempt from the prohibited transaction provisions of Section 406 of
ERISA and Section 4975 of the Code under Section I and III of Prohibited
Transaction Class Exemption 95-60; or (ii) in the case of a Class J Certificate
that is held as a Definitive Certificate, the prospective Transferee provides
the Certificate Registrar with a certification of facts and an Opinion of
Counsel which establish to the satisfaction of the Trustee that such transfer
will not result in a violation of Section 406 of ERISA or Section 4975 of the
Code or result in the imposition of an excise tax under Section 4975 of the Code
or subject the Depositor, the Trustee, the Master Servicer or the Special
Servicer to any obligation in addition to those undertaken in the Agreement.
Each Person who acquires any Class J Certificate or interest therein (unless it
shall have acquired such Certificate or interest therein from the Depositor or
an Affiliate thereof or unless it shall have delivered to the Certificate
Registrar the certification of facts and Opinion of Counsel referred to in
clause (ii) of the preceding sentence) shall be required to deliver to the
Certificate Registrar (or, in the case of an interest in a Book-Entry
Certificate, to the Certificate Owner that is transferring such interest) a
certification to the effect that: (i) it is neither a Plan nor any Person who is
directly or indirectly purchasing such Class J Certificate or interest therein
on behalf of, as named fiduciary of, as trustee of, or with assets of a Plan; or
(ii) the purchase and holding of such Certificate or interest therein by such
person is exempt from the prohibited transaction provisions of Section 406 of
ERISA and Section 4975 of the Code under Section I and II of Prohibited
Transaction Class Exemption 95-60.
No service charge will be imposed for any registration of transfer or
exchange of Class J Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
J Certificates.
Notwithstanding the foregoing, for so long as this Certificate is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC, transfers of interests in this Certificate
shall be made through the book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar and any agents of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof
A-11-5
<PAGE>
for all purposes, and none of the Depositor, the Master Servicer, the Special
Servicer, the Trustee, the Certificate Registrar or any such agent shall be
affected by notice to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Operating Advisor, the Special Servicer, the Depositor, the Master Servicer or
the Holders of the Residual Certificates representing a majority Percentage
Interest in the Class R-I Interests, at a price determined as provided in the
Agreement, of all Mortgage Loans and any REO Properties remaining in the Trust
Fund. The Agreement permits, but does not require, the Operating Advisor, the
Special Servicer, the Depositor, the Master Servicer or such Holders to purchase
from the Trust Fund all Mortgage Loans and any REO Properties remaining therein
at such time as the aggregate Stated Principal Balance of the REMIC Mortgage
Pool is less than 5% of the aggregate Cut-off Date Principal Balance of the
REMIC Mortgage Pool specified on the face hereof. The exercise of such right
will effect early retirement of the Certificates.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee thereunder
and the rights of the Certificateholders thereunder, at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain circumstances, including any amendment necessary to maintain
the status of REMIC I, REMIC II or REMIC III as a REMIC, without the consent of
the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York applicable to agreements made and to be performed in said
State, and the obligations, rights and remedies of the Holder hereof shall be
determined in accordance with such laws.
A-11-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
State Street Bank and Trust Company,
as Trustee
By:_________________________________
Authorized Officer
A-11-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Class J Certificates referred to in the within-mentioned
Agreement.
Dated:
State Street Bank and Trust Company,
as Certificate Registrar
By:_________________________________
Authorized Officer
A-11-8
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Aetna Commercial Mortgage Trust Multiclass Pass-Through Certificate and hereby
authorize(s) the registration of transfer of such interest to the above named
assignee on the Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate of a like Percentage Interest and Class to
the above named assignee and delivery of such Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:___________
--------------------------------------
Signature by or on behalf of Assignor
--------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or otherwise,
in immediately available funds, to______________________________________________
for the account of_____________________________________________________________.
Distributions made by check (such check to be made payable to
_______________) and all applicable statements and notices should be mailed to
_______________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________, as its agent.
A-11-9
<PAGE>
EXHIBIT A-12
FORM OF CLASS K CERTIFICATE
CLASS K AETNA COMMERCIAL MORTGAGE TRUST MULTICLASS
PASS-THROUGH CERTIFICATE,
SERIES 1997-ALIC
evidencing a beneficial ownership interest in the REMIC Pool included in a trust
fund (the "Trust Fund") consisting primarily of a pool (the "REMIC Mortgage
Pool") of multifamily and commercial mortgage loans (the "REMIC Mortgage
Loans"), such pool being formed and sold by
MORGAN STANLEY CAPITAL I INC.
Pass-Through Rate: Certificate Principal Balance of this
6.3000% per annum Class K Certificate as of the
Issue Date: $__________
Date of Pooling and Servicing Class Principal Balance of all the Class
Agreement: December 1, 1997 K Certificates as of the Issue Date:
$20,067,000
Cut-off Date: December 1, 1997 Aggregate unpaid principal balance of the
Issue Date: December 30, 1997 REMIC Mortgage Pool as of the Cut-off Date,
after deducting payments of principal due
on or before such date, whether or not
received: $802,696,189
First Distribution Date:
January 15, 1998
Master Servicer: Midland Loan Services, L.P.
Trustee: State Street Bank and Trust
Company
Special Servicer: Aetna Life Insurance Company CUSIP No.: 61745M EM 1
Certificate No. K-__
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR, THE
TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF 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
A-12-1
<PAGE>
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 MORGAN
STANLEY CAPITAL I INC., MIDLAND LOAN SERVICES, L.P., AETNA LIFE INSURANCE
COMPANY, STATE STREET BANK AND TRUST COMPANY OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1A, CLASS A-1B, CLASS A-2, CLASS
IO, CLASS B, CLASS C, CLASS D, CLASS E, CLASS F, CLASS G, CLASS H AND CLASS J
CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT PROVIDED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 3.3 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN FOLLOWING RETIREMENT OF THE
CLASS A-1A, CLASS A-1B, CLASS A-2, CLASS B, CLASS C, CLASS D, CLASS E, CLASS F,
CLASS G, CLASS H AND CLASS J CERTIFICATES OF THE SAME SERIES. IN ADDITION, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE REDUCED IN CONNECTION
WITH LOSSES ON THE MORTGAGE LOANS AND CERTAIN UNANTICIPATED EXPENSES AS SET
FORTH IN THE AGREEMENT (AS DEFINED HEREIN). ACCORDINGLY, THE OUTSTANDING
A-12-2
<PAGE>
CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ABOVE.
This certifies that _________________________ is the registered owner of
the Percentage Interest evidenced by this Class K Certificate (obtained by
dividing the principal balance of this Class K Certificate (its "Certificate
Principal Balance") as of the Issue Date by the aggregate principal balance of
all the Class K Certificates (their "Class Principal Balance") as of the Issue
Date) in that certain beneficial ownership interest, evidenced by all the Class
K Certificates, in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), between Morgan Stanley
Capital I Inc., as Depositor, Midland Loan Services, L.P., as Master Servicer,
Aetna Life Insurance Company, as Seller and Special Servicer and State Street
Bank and Trust Company, as Trustee. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
15th day of each month or, if such 15th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class K Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on any Class K Certificate
will be made by the Trustee by wire transfer in immediately available funds to
the account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Trustee with wiring instructions on or prior to the Record Date for such
distribution (which wiring instructions may be in the form of a standing order
applicable to all subsequent distributions as well) or otherwise by check mailed
to the address of such Certificateholder appearing in the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate
(determined without regard to any possible future reimbursement of any Realized
Loss or Expense Loss previously allocated to this Certificate) will be made
after due notice by the Trustee of the pendency of such distribution and only
upon presentation and surrender of this Certificate at the offices of the
Certificate Registrar appointed as provided in the Agreement or such other
location as may be specified in such notice. Also notwithstanding the foregoing,
any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Expense Loss previously allocated to this
Certificate, which reimbursement is to occur after the date on which this
Certificate is surrendered as contemplated by the preceding sentence, will be
made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
A-12-3
<PAGE>
The Depositor's Aetna Mortgage Trust Multiclass Pass-Through Certificates,
Series 1997-ALIC (the "Certificates") are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than, and, in certain cases,
prior to, distributions to Certificateholders, such purposes including the
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans and the payment of interest on such advances and expenses.
The Class K Certificates are issuable in fully registered form only,
without coupons, in minimum denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
Class K Certificates are exchangeable for new Class K Certificates in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class K Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No transfer, sale, pledge or other disposition of any Class K Certificate
or interest therein shall be made unless that transfer, sale, pledge or other
disposition is exempt from the registration and/or qualification requirements of
the Securities Act and any applicable state securities laws, or is otherwise
made in accordance with the Securities Act and such state securities laws. If a
transfer of any Class K Certificate held as a Definitive Certificate is to be
made without registration under the Securities Act (other than in connection
with the initial issuance of the Certificates or a transfer of such Class K
Certificate by the Depositor or any of its Affiliates), then the Certificate
Registrar shall refuse to register such transfer unless it receives (and upon
receipt, may conclusively rely upon) either: (i) a certificate from the
Certificateholder desiring to effect such transfer substantially in the form
attached to the Agreement as Exhibit D-1 and a certificate from such
Certificateholder's prospective transferee substantially in the form attached to
the Agreement either as Exhibit D-2A or as Exhibit D-2B; or (ii) an Opinion of
Counsel satisfactory to the Trustee to the effect that such transfer may be made
without registration under the Securities Act (which Opinion of Counsel shall
not be an expense of the Trust Fund or of the Depositor, the Master Servicer,
the Special Servicer, the Trustee or the Certificate Registrar in their
respective capacities as such), together with the written certification(s) as to
the facts surrounding such transfer on which such Opinion of Counsel is based.
If a transfer of any interest in a Class K Certificate that constitutes a
Book-Entry Certificate is to be made without registration under the Securities
Act (other than in connection with the initial issuance of the Certificates or a
transfer of any interest in such Class K Certificate by the Depositor or any of
its Affiliates), then the Certificate Owner desiring to effect such transfer
shall be required to obtain either (i) a certificate from such Certificate
Owner's prospective Transferee substantially in the form attached to the
Agreement as Exhibit D-3A or as Exhibit D-3B, or (ii) an Opinion of Counsel to
the effect that such transfer may be made without registration under the
Securities Act. None of the Depositor, the Trustee or the Certificate Registrar
is obligated to register or qualify any Class K Certificates under the
Securities Act or any other
A-12-4
<PAGE>
securities law or to take any action not otherwise required under this Agreement
to permit the transfer of any Class K Certificate or interest therein without
registration or qualification. Any Certificateholder or Certificate Owner
desiring to effect a transfer of Class K Certificates or interests therein
shall, and does hereby agree to, indemnify, the Depositor, the Underwriter, the
Trustee, the Master Servicer, the Special Servicer and the Certificate Registrar
against any liability that may result if the transfer is not exempt from such
registration or qualification or is not made in accordance with such federal and
state laws.
No transfer of a Class K Certificate or any interest therein shall be made
(A) to any employee benefit plan or other retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds and separate accounts in which such plans, accounts or
arrangements are invested, including, without limitation, insurance company
general accounts, that is subject to ERISA or the Code (each, a "Plan"), or (B)
to any Person who is directly or indirectly purchasing such Certificate or
interest therein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, unless: (i) in the case of a Certificate that constitutes a
Book-Entry Certificate, the purchase and holding of such Certificate or interest
therein is exempt from the prohibited transaction provisions of Section 406 of
ERISA and Section 4975 of the Code under Section I and III of Prohibited
Transaction Class Exemption 95-60; or (ii) in the case of a Class K Certificate
that is held as a Definitive Certificate, the prospective Transferee provides
the Certificate Registrar with a certification of facts and an Opinion of
Counsel which establish to the satisfaction of the Trustee that such transfer
will not result in a violation of Section 406 of ERISA or Section 4975 of the
Code or result in the imposition of an excise tax under Section 4975 of the Code
or subject the Depositor, the Trustee, the Master Servicer or the Special
Servicer to any obligation in addition to those undertaken in the Agreement.
Each Person who acquires any Class K Certificate or interest therein (unless it
shall have acquired such Certificate or interest therein from the Depositor or
an Affiliate thereof or unless it shall have delivered to the Certificate
Registrar the certification of facts and Opinion of Counsel referred to in
clause (ii) of the preceding sentence) shall be required to deliver to the
Certificate Registrar (or, in the case of an interest in a Book-Entry
Certificate, to the Certificate Owner that is transferring such interest) a
certification to the effect that: (i) it is neither a Plan nor any Person who is
directly or indirectly purchasing such Class K Certificate or interest therein
on behalf of, as named fiduciary of, as trustee of, or with assets of a Plan; or
(ii) the purchase and holding of such Certificate or interest therein by such
person is exempt from the prohibited transaction provisions of Section 406 of
ERISA and Section 4975 of the Code under Section I and II of Prohibited
Transaction Class Exemption 95-60.
No service charge will be imposed for any registration of transfer or
exchange of Class K Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
K Certificates.
Notwithstanding the foregoing, for so long as this Certificate is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC, transfers of interests in this Certificate
shall be made through the book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar and any agents of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof
A-12-5
<PAGE>
for all purposes, and none of the Depositor, the Master Servicer, the Special
Servicer, the Trustee, the Certificate Registrar or any such agent shall be
affected by notice to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Operating Advisor, the Special Servicer, the Depositor, the Master Servicer or
the Holders of the Residual Certificates representing a majority Percentage
Interest in the Class R-I Interests, at a price determined as provided in the
Agreement, of all Mortgage Loans and any REO Properties remaining in the Trust
Fund. The Agreement permits, but does not require, the Operating Advisor, the
Special Servicer, the Depositor, the Master Servicer or such Holders to purchase
from the Trust Fund all Mortgage Loans and any REO Properties remaining therein
at such time as the aggregate Stated Principal Balance of the REMIC Mortgage
Pool is less than 5% of the aggregate Cut-off Date Principal Balance of the
REMIC Mortgage Pool specified on the face hereof. The exercise of such right
will effect early retirement of the Certificates.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee thereunder
and the rights of the Certificateholders thereunder, at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain circumstances, including any amendment necessary to maintain
the status of REMIC I, REMIC II or REMIC III as a REMIC, without the consent of
the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York applicable to agreements made and to be performed in said
State, and the obligations, rights and remedies of the Holder hereof shall be
determined in accordance with such laws.
A-12-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
State Street Bank and Trust Company,
as Trustee
By:_________________________________
Authorized Officer
A-12-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Class K Certificates referred to in the within-mentioned
Agreement.
Dated:
State Street Bank and Trust Company,
as Certificate Registrar
By:_________________________________
Authorized Officer
A-12-8
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Aetna Commercial Mortgage Trust Multiclass Pass-Through Certificate and hereby
authorize(s) the registration of transfer of such interest to the above named
assignee on the Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate of a like Percentage Interest and Class to
the above named assignee and delivery of such Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:___________
--------------------------------------
Signature by or on behalf of Assignor
--------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or otherwise,
in immediately available funds, to______________________________________________
for the account of_____________________________________________________________.
Distributions made by check (such check to be made payable to
_______________) and all applicable statements and notices should be mailed to
_______________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________, as its agent.
A-12-9
<PAGE>
EXHIBIT A-13
FORM OF CLASS L CERTIFICATE
CLASS L AETNA COMMERCIAL MORTGAGE TRUST MULTICLASS
PASS-THROUGH CERTIFICATE,
SERIES 1997-ALIC
evidencing a beneficial ownership interest in the REMIC Pool included in a trust
fund (the "Trust Fund") consisting primarily of a pool (the "REMIC Mortgage
Pool") of multifamily and commercial mortgage loans (the "REMIC Mortgage
Loans"), such pool being formed and sold by
MORGAN STANLEY CAPITAL I INC.
Pass-Through Rate: Certificate Principal Balance of this
6.3000% per annum Class L Certificate as of the
Issue Date: $__________
Date of Pooling and Servicing Class Principal Balance of all the Class
Agreement: December 1, 1997 L Certificates as of the Issue Date:
$32,109,189
Cut-off Date: December 1, 1997 Aggregate unpaid principal balance of the
Issue Date: December 30, 1997 REMIC Mortgage Pool as of the Cut-off Date,
after deducting payments of principal due
on or before such date, whether or not
received: $802,696,189
First Distribution Date:
January 15, 1998
Master Servicer: Midland Loan Services, L.P. Trustee: State Street Bank and
Trust Company
Special Servicer: Aetna Life Insurance Company CUSIP No.: 61745M EN 9
Certificate No. L-__
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR, THE
TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF 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
A-13-1
<PAGE>
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 MORGAN
STANLEY CAPITAL I INC., MIDLAND LOAN SERVICES, L.P., AETNA LIFE INSURANCE
COMPANY, STATE STREET BANK AND TRUST COMPANY OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1A, CLASS A-1B, CLASS A-2, CLASS
IO, CLASS B, CLASS C, CLASS D, CLASS E, CLASS F, CLASS G, CLASS H, CLASS J AND
CLASS K CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT PROVIDED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 3.3 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN FOLLOWING RETIREMENT OF THE
CLASS A-1A, CLASS A-1B, CLASS A-2, CLASS B, CLASS C, CLASS D, CLASS E, CLASS F,
CLASS G, CLASS H, CLASS J AND CLASS K CERTIFICATES OF THE SAME SERIES. IN
ADDITION, THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE REDUCED
IN CONNECTION WITH LOSSES ON THE MORTGAGE LOANS AND CERTAIN UNANTICIPATED
EXPENSES AS SET FORTH IN THE AGREEMENT (AS DEFINED HEREIN). ACCORDINGLY, THE
A-13-2
<PAGE>
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ABOVE.
This certifies that _____________________ is the registered owner of the
Percentage Interest evidenced by this Class L Certificate (obtained by dividing
the principal balance of this Class L Certificate (its "Certificate Principal
Balance") as of the Issue Date by the aggregate principal balance of all the
Class L Certificates (their "Class Principal Balance") as of the Issue Date) in
that certain beneficial ownership interest, evidenced by all the Class L
Certificates, in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), between Morgan Stanley
Capital I Inc., as Depositor, Midland Loan Services, L.P., as Master Servicer,
Aetna Life Insurance Company, as Seller and Special Servicer and State Street
Bank and Trust Company, as Trustee. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
15th day of each month or, if such 15th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class L Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on any Class L Certificate
will be made by the Trustee by wire transfer in immediately available funds to
the account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Trustee with wiring instructions on or prior to the Record Date for such
distribution (which wiring instructions may be in the form of a standing order
applicable to all subsequent distributions as well) or otherwise by check mailed
to the address of such Certificateholder appearing in the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate
(determined without regard to any possible future reimbursement of any Realized
Loss or Expense Loss previously allocated to this Certificate) will be made
after due notice by the Trustee of the pendency of such distribution and only
upon presentation and surrender of this Certificate at the offices of the
Certificate Registrar appointed as provided in the Agreement or such other
location as may be specified in such notice. Also notwithstanding the foregoing,
any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Expense Loss previously allocated to this
Certificate, which reimbursement is to occur after the date on which this
Certificate is surrendered as contemplated by the preceding sentence, will be
made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
A-13-3
<PAGE>
The Depositor's Aetna Mortgage Trust Multiclass Pass-Through Certificates,
Series 1997-ALIC (the "Certificates") are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than, and, in certain cases,
prior to, distributions to Certificateholders, such purposes including the
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans and the payment of interest on such advances and expenses.
The Class L Certificates are issuable in fully registered form only,
without coupons, in minimum denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
Class L Certificates are exchangeable for new Class L Certificates in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class L Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No transfer, sale, pledge or other disposition of any Class L Certificate
or interest therein shall be made unless that transfer, sale, pledge or other
disposition is exempt from the registration and/or qualification requirements of
the Securities Act and any applicable state securities laws, or is otherwise
made in accordance with the Securities Act and such state securities laws. If a
transfer of any Class L Certificate held as a Definitive Certificate is to be
made without registration under the Securities Act (other than in connection
with the initial issuance of the Certificates or a transfer of such Class L
Certificate by the Depositor or any of its Affiliates), then the Certificate
Registrar shall refuse to register such transfer unless it receives (and upon
receipt, may conclusively rely upon) either: (i) a certificate from the
Certificateholder desiring to effect such transfer substantially in the form
attached to the Agreement as Exhibit D-1 and a certificate from such
Certificateholder's prospective transferee substantially in the form attached to
the Agreement either as Exhibit D-2A or as Exhibit D-2B; or (ii) an Opinion of
Counsel satisfactory to the Trustee to the effect that such transfer may be made
without registration under the Securities Act (which Opinion of Counsel shall
not be an expense of the Trust Fund or of the Depositor, the Master Servicer,
the Special Servicer, the Trustee or the Certificate Registrar in their
respective capacities as such), together with the written certification(s) as to
the facts surrounding such transfer on which such Opinion of Counsel is based.
If a transfer of any interest in a Class L Certificate that constitutes a
Book-Entry Certificate is to be made without registration under the Securities
Act (other than in connection with the initial issuance of the Certificates or a
transfer of any interest in such Class L Certificate by the Depositor or any of
its Affiliates), then the Certificate Owner desiring to effect such transfer
shall be required to obtain either (i) a certificate from such Certificate
Owner's prospective Transferee substantially in the form attached to the
Agreement as Exhibit D-3A or as Exhibit D-3B, or (ii) an Opinion of Counsel to
the effect that such transfer may be made without registration under the
Securities Act. None of the Depositor, the Trustee or the Certificate Registrar
is obligated to register or qualify any Class L Certificates under the
Securities Act or any other
A-13-4
<PAGE>
securities law or to take any action not otherwise required under this Agreement
to permit the transfer of any Class L Certificate or interest therein without
registration or qualification. Any Certificateholder or Certificate Owner
desiring to effect a transfer of Class L Certificates or interests therein
shall, and does hereby agree to, indemnify, the Depositor, the Underwriter, the
Trustee, the Master Servicer, the Special Servicer and the Certificate Registrar
against any liability that may result if the transfer is not exempt from such
registration or qualification or is not made in accordance with such federal and
state laws.
No transfer of a Class L Certificate or any interest therein shall be made
(A) to any employee benefit plan or other retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds and separate accounts in which such plans, accounts or
arrangements are invested, including, without limitation, insurance company
general accounts, that is subject to ERISA or the Code (each, a "Plan"), or (B)
to any Person who is directly or indirectly purchasing such Certificate or
interest therein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, unless: (i) in the case of a Certificate that constitutes a
Book-Entry Certificate, the purchase and holding of such Certificate or interest
therein is exempt from the prohibited transaction provisions of Section 406 of
ERISA and Section 4975 of the Code under Section I and III of Prohibited
Transaction Class Exemption 95-60; or (ii) in the case of a Class L Certificate
that is held as a Definitive Certificate, the prospective Transferee provides
the Certificate Registrar with a certification of facts and an Opinion of
Counsel which establish to the satisfaction of the Trustee that such transfer
will not result in a violation of Section 406 of ERISA or Section 4975 of the
Code or result in the imposition of an excise tax under Section 4975 of the Code
or subject the Depositor, the Trustee, the Master Servicer or the Special
Servicer to any obligation in addition to those undertaken in the Agreement.
Each Person who acquires any Class L Certificate or interest therein (unless it
shall have acquired such Certificate or interest therein from the Depositor or
an Affiliate thereof or unless it shall have delivered to the Certificate
Registrar the certification of facts and Opinion of Counsel referred to in
clause (ii) of the preceding sentence) shall be required to deliver to the
Certificate Registrar (or, in the case of an interest in a Book-Entry
Certificate, to the Certificate Owner that is transferring such interest) a
certification to the effect that: (i) it is neither a Plan nor any Person who is
directly or indirectly purchasing such Class L Certificate or interest therein
on behalf of, as named fiduciary of, as trustee of, or with assets of a Plan; or
(ii) the purchase and holding of such Certificate or interest therein by such
person is exempt from the prohibited transaction provisions of Section 406 of
ERISA and Section 4975 of the Code under Section I and II of Prohibited
Transaction Class Exemption 95-60.
No service charge will be imposed for any registration of transfer or
exchange of Class L Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
L Certificates.
Notwithstanding the foregoing, for so long as this Certificate is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC, transfers of interests in this Certificate
shall be made through the book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar and any agents of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof
A-13-5
<PAGE>
for all purposes, and none of the Depositor, the Master Servicer, the Special
Servicer, the Trustee, the Certificate Registrar or any such agent shall be
affected by notice to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Operating Advisor, the Special Servicer, the Depositor, the Master Servicer or
the Holders of the Residual Certificates representing a majority Percentage
Interest in the Class R-I Interests, at a price determined as provided in the
Agreement, of all Mortgage Loans and any REO Properties remaining in the Trust
Fund. The Agreement permits, but does not require, the Operating Advisor, the
Special Servicer, the Depositor, the Master Servicer or such Holders to purchase
from the Trust Fund all Mortgage Loans and any REO Properties remaining therein
at such time as the aggregate Stated Principal Balance of the REMIC Mortgage
Pool is less than 5% of the aggregate Cut-off Date Principal Balance of the
REMIC Mortgage Pool specified on the face hereof. The exercise of such right
will effect early retirement of the Certificates.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee thereunder
and the rights of the Certificateholders thereunder, at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain circumstances, including any amendment necessary to maintain
the status of REMIC I, REMIC II or REMIC III as a REMIC, without the consent of
the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York applicable to agreements made and to be performed in said
State, and the obligations, rights and remedies of the Holder hereof shall be
determined in accordance with such laws.
A-13-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
State Street Bank and Trust Company,
as Trustee
By:_________________________________
Authorized Officer
A-13-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Class L Certificates referred to in the within-mentioned
Agreement.
Dated:
State Street Bank and Trust Company,
as Certificate Registrar
By:_________________________________
Authorized Officer
A-13-8
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Aetna Commercial Mortgage Trust Multiclass Pass-Through Certificate and hereby
authorize(s) the registration of transfer of such interest to the above named
assignee on the Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate of a like Percentage Interest and Class to
the above named assignee and delivery of such Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:___________
--------------------------------------
Signature by or on behalf of Assignor
--------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or otherwise,
in immediately available funds, to______________________________________________
for the account of_____________________________________________________________.
Distributions made by check (such check to be made payable to
_______________) and all applicable statements and notices should be mailed to
_______________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________, as its agent.
A-13-9
<PAGE>
EXHIBIT A-14
FORM OF CLASS IO CERTIFICATE
CLASS IO AETNA COMMERCIAL MORTGAGE TRUST MULTICLASS
PASS-THROUGH CERTIFICATE,
SERIES 1997-ALIC
evidencing a beneficial ownership interest in the REMIC Pool included in a trust
fund (the "Trust Fund") consisting primarily of a pool (the "REMIC Mortgage
Pool") of multifamily and commercial mortgage loans (the "REMIC Mortgage
Loans"), such pool being formed and sold by
MORGAN STANLEY CAPITAL I INC.
Pass-Through Rate: Certificate Notional Amount of this
Variable Class IO Certificate as of the Issue Date:
$_____________
Date of Pooling and Servicing Class Notional Amount of all the Class
Agreement: December 1, 1997 IO Certificates as of the Issue Date:
$802,696,189
Cut-off Date: December 1, 1997 Aggregate unpaid principal balance of the
Issue Date: December 30, 1997 REMIC Mortgage Pool as of the Cut-off Date,
after deducting payments of principal due
on or before such date, whether or not
received: $802,696,189
First Distribution Date:
January 15, 1998
Master Servicer: Midland Loan Services, L.P.
Trustee: State Street Bank and Trust
Company
Special Servicer: Aetna Life Insurance Company CUSIP No.: 61745M EC 3
Certificate No. IO-__
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR, THE
TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF 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
A-14-1
<PAGE>
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 MORGAN
STANLEY CAPITAL I INC., MIDLAND LOAN SERVICES, L.P., AETNA LIFE INSURANCE
COMPANY, STATE STREET BANK AND TRUST COMPANY OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE. THE
FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE U.S.
FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS CERTIFICATE.
THE ISSUE DATE OF THIS CERTIFICATE IS DECEMBER 30, 1997. ASSUMING THAT THE
MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF PREPAYMENT USED SOLELY FOR THE
PURPOSES OF APPLYING THE OID RULES TO THE CERTIFICATES EQUAL TO A CPR (WITHIN
THE MEANING OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN) OF 5%
DURING THE RESPECTIVE PERIODS WHEN VOLUNTARY PREPAYMENTS OF PRINCIPAL THEREON
ARE PERMITTED WITHOUT THE IMPOSITION OF A PREPAYMENT PREMIUM BASED ON A YIELD
MAINTENANCE FORMULA (THE "PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN
ISSUED WITH NO MORE THAN $__________ OF OID PER $100,000 OF INITIAL EFFECTIVE
CERTIFICATE NOTIONAL AMOUNT, THE YIELD TO MATURITY IS _____% PER ANNUM AND THE
AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE THAN $__.__
PER $100,000 OF INITIAL EFFECTIVE CERTIFICATE NOTIONAL AMOUNT, COMPUTED UNDER
THE EXACT METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY
AT A RATE BASED ON THE PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE.
THIS CERTIFICATE DOES NOT HAVE A CERTIFICATE PRINCIPAL BALANCE AND DOES NOT
ENTITLE THE HOLDER HEREOF TO ANY DISTRIBUTIONS OF PRINCIPAL. THE HOLDER HEREOF
WILL BE ENTITLED TO DISTRIBUTIONS OF INTEREST ACCRUED AS PROVIDED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN ON THE CERTIFICATE NOTIONAL AMOUNT OF
THIS CERTIFICATE, WHICH AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that _______________________ is the registered owner of the
Percentage Interest evidenced by this Class IO Certificate (obtained by dividing
the notional amount of this Class IO Certificate (its "Certificate Notional
Amount") as of the Issue Date by the aggregate effective notional amount of all
the Class IO Certificates (the "Class Notional Amount") as of the Issue Date) in
that certain beneficial ownership interest, evidenced by all the Class IO
Certificates, in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), between Morgan Stanley
Capital I Inc., as Depositor, Midland Loan Services, L.P., as Master Servicer,
Aetna Life Insurance Company, as Seller and Special Servicer and State
A-14-2
<PAGE>
Street Bank and Trust Company, as Trustee. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
15th day of each month or, if such 15th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class IO Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on any Class IO
Certificate will be made by the Trustee by wire transfer in immediately
available funds to the account of the Person entitled thereto at a bank or other
entity having appropriate facilities therefor, if such Certificateholder shall
have provided the Trustee with wiring instructions on or prior to the Record
Date for such distribution (which wiring instructions may be in the form of a
standing order applicable to all subsequent distributions as well) or otherwise
by check mailed to the address of such Certificateholder appearing in the
Certificate Register. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
offices of the Certificate Registrar appointed as provided in the Agreement or
such other location as may be specified in such notice.
The Depositor's Aetna Mortgage Trust Multiclass Pass-Through Certificates,
Series 1997-ALIC (the "Certificates") are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than, and, in certain cases,
prior to, distributions to Certificateholders, such purposes including the
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans and the payment of interest on such advances and expenses.
The Class IO Certificates are issuable in fully registered form only,
without coupons, in minimum denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
Class IO Certificates are exchangeable for new Class IO Certificates in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class IO Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
A-14-3
<PAGE>
No service charge will be imposed for any registration of transfer or
exchange of Class IO Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
IO Certificates.
Notwithstanding the foregoing, for so long as this Certificate is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC, transfers of interests in this Certificate
shall be made through the book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar and any agents 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 or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Operating Advisor, the Special Servicer, the Depositor, the Master Servicer or
the Holders of the Residual Certificates representing a majority Percentage
Interest in the Class R-I Interests, at a price determined as provided in the
Agreement, of all Mortgage Loans and any REO Properties remaining in the Trust
Fund. The Agreement permits, but does not require, the Operating Advisor, the
Special Servicer, the Depositor, the Master Servicer or such Holders to purchase
from the Trust Fund all Mortgage Loans and any REO Properties remaining therein
at such time as the aggregate Stated Principal Balance of the REMIC Mortgage
Pool is less than 5% of the aggregate Cut-off Date Principal Balance of the
REMIC Mortgage Pool specified on the face hereof. The exercise of such right
will effect early retirement of the Certificates.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee thereunder
and the rights of the Certificateholders thereunder, at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain circumstances, including any amendment necessary to maintain
the status of REMIC I, REMIC II or REMIC III as a REMIC, without the consent of
the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
A-14-4
<PAGE>
This Certificate shall be construed in accordance with the internal laws of
the State of New York applicable to agreements made and to be performed in said
State, and the obligations, rights and remedies of the Holder hereof shall be
determined in accordance with such laws.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
State Street Bank and Trust Company,
as Trustee
By:_________________________________
Authorized Officer
A-14-5
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Class IO Certificates referred to in the
within-mentioned Agreement.
Dated:
State Street Bank and Trust Company,
as Certificate Registrar
By:_________________________________
Authorized Officer
A-14-6
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Aetna Commercial Mortgage Trust Multiclass Pass-Through Certificate and hereby
authorize(s) the registration of transfer of such interest to the above named
assignee on the Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate of a like Percentage Interest and Class to
the above named assignee and delivery of such Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:___________
--------------------------------------
Signature by or on behalf of Assignor
--------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or otherwise,
in immediately available funds, to______________________________________________
for the account of_____________________________________________________________.
Distributions made by check (such check to be made payable to
_______________) and all applicable statements and notices should be mailed to
_______________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________, as its agent.
A-14-7
<PAGE>
EXHIBIT A-15
FORM OF CLASS R CERTIFICATE
CLASS R AETNA COMMERCIAL MORTGAGE TRUST MULTICLASS
PASS-THROUGH CERTIFICATE,
SERIES 1997-ALIC
evidencing a beneficial ownership interest in the REMIC Pool included in a trust
fund (the "Trust Fund") consisting primarily of a pool (the "REMIC Mortgage
Pool") of multifamily and commercial mortgage loans (the "REMIC Mortgage
Loans"), such pool being formed and sold by
MORGAN STANLEY CAPITAL I INC.
Date of Pooling and Servicing Percentage Interest evidenced by
Agreement: December 1, 1997 this Certificate in the related Class: 100%
Cut-off Date: December 1, 1997 Aggregate unpaid principal balance of the
Issue Date: December 30, 1997 REMIC Mortgage Pool as of the Cut-off Date,
after deducting payments of principal due
on or before such date, whether or not
received: $802,696,189
First Distribution Date:
January 15, 1998
Master Servicer: Midland Loan Services, L.P.
Trustee: State Street Bank and Trust
Company
Special Servicer: Aetna Life Insurance Company
Certificate No. R-__
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MORGAN
STANLEY CAPITAL I INC., MIDLAND LOAN SERVICES, L.P., AETNA LIFE INSURANCE
COMPANY, STATE STREET BANK AND TRUST COMPANY OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1A, CLASS A-1B, CLASS A-2, CLASS
IO, CLASS B, CLASS C, CLASS D, CLASS E, CLASS F, CLASS G, CLASS H, CLASS J,
CLASS K AND CLASS L CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT
PROVIDED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
A-15-1
<PAGE>
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 3.3 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
CONSEQUENTLY, TRANSFER OF THIS CERTIFICATE IS ALSO SUBJECT TO THE ADDITIONAL TAX
RELATED TRANSFER RESTRICTIONS DESCRIBED HEREIN. IF ANY PERSON BECOMES THE
REGISTERED HOLDER OF THIS CERTIFICATE IN VIOLATION OF SUCH TRANSFER
RESTRICTIONS, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER
FOR ANY PURPOSE HEREUNDER OR UNDER THE POOLING AND SERVICING AGREEMENT REFERRED
TO HEREIN, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE.
This certifies that _________________________ is the registered owner of a
100% Percentage Interest evidenced by this Class R Certificate (as specified
above) in that certain beneficial ownership interest in the Residual Interests
in the Trust Fund created pursuant to a Pooling and Servicing Agreement, dated
as specified above (the "Agreement"), between Morgan Stanley Capital I Inc., as
Depositor, Midland Loan Services, L.P., as Master Servicer, Aetna Life Insurance
Company, as Seller and Special Servicer and State Street Bank and Trust Company,
as Trustee. To the extent not defined herein, the capitalized terms used herein
have the respective meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
15th day of each month or, if such 15th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
A-15-2
<PAGE>
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class R Certificate on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on this Class R
Certificate will be made by the Trustee by check mailed to the address of the
Person entitled thereto, as such name and address appear in the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
offices of the Certificate Registrar appointed as provided in the Agreement or
such other location as may be specified in such notice.
The Depositor's Aetna Mortgage Trust Multiclass Pass-Through Certificates,
Series 1997-ALIC (the "Certificates") are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than, and, in certain cases,
prior to, distributions to Certificateholders, such purposes including the
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans and the payment of interest on such advances and expenses.
The Class R Certificate is issuable in fully registered form only without
coupons in minimum denominations representing Percentage Interests specified in
the Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, the Class R Certificate is exchangeable for new Class R-I,
Class R-II and Class R-III Certificates in authorized denominations evidencing
the same aggregate Percentage Interest in the Residual Interests, as requested
by the Holder surrendering the same as set forth in the Agreement.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon a new Class R Certificate in authorized denominations
evidencing the same aggregate Percentage Interest will be issued to the
designated transferee or transferees.
No transfer, sale, pledge or other disposition of this Class R Certificate
or interest therein shall be made unless that transfer, sale, pledge or other
disposition is exempt from the registration and/or qualification requirements of
the Securities Act and any applicable state securities laws, or is otherwise
made in accordance with the Securities Act and such state securities laws. If a
transfer of this Class R Certificate is to be made without registration under
the Securities Act (other than in connection with the initial issuance of the
Certificates or a transfer of such Class R Certificate by the Depositor or any
of its Affiliates), then the Certificate Registrar shall refuse to register such
transfer unless it receives (and upon receipt, may conclusively rely upon)
either: (i) a certificate from the Certificateholder desiring to effect such
transfer substantially in the form attached to the Agreement as Exhibit D-1 and
a certificate from such Certificateholder's prospective transferee substantially
in the form attached to the Agreement either as Exhibit D-2A or as Exhibit D-2B;
or (ii) an Opinion of Counsel satisfactory to the Trustee to the effect that
such transfer may be made without registration under the Securities Act (which
Opinion of Counsel shall not be an expense of the Trust Fund or of the
Depositor, the Master Servicer, the Special Servicer, the Trustee or the
A-15-3
<PAGE>
Certificate Registrar in their respective capacities as such), together with the
written certification(s) as to the facts surrounding such transfer on which such
Opinion of Counsel is based. None of the Depositor, the Trustee or the
Certificate Registrar is obligated to register or qualify this Class R
Certificate under the Securities Act or any other securities law or to take any
action not otherwise required under this Agreement to permit the transfer of
this Class R Certificate or interest therein without registration or
qualification. Any Certificateholder or Certificate Owner desiring to effect a
transfer of this Class R Certificate or interests therein shall, and does hereby
agree to, indemnify, the Depositor, the Underwriter, the Trustee, the Master
Servicer, the Special Servicer and the Certificate Registrar against any
liability that may result if the transfer is not exempt from such registration
or qualification or is not made in accordance with such federal and state laws.
No transfer of this Class R Certificate or any interest therein shall be
made (A) to any employee benefit plan or other retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds and separate accounts in which such plans, accounts or
arrangements are invested, including, without limitation, insurance company
general accounts, that is subject to ERISA or the Code (each, a "Plan"), or (B)
to any Person who is directly or indirectly purchasing such Certificate or
interest therein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, unless: (i) the purchase and holding of such Certificate or
interest therein is exempt from the prohibited transaction provisions of Section
406 of ERISA and Section 4975 of the Code under Section I and III of Prohibited
Transaction Class Exemption 95-60; or (ii) the prospective Transferee provides
the Certificate Registrar with a certification of facts and an Opinion of
Counsel which establish to the satisfaction of the Trustee that such transfer
will not result in a violation of Section 406 of ERISA or Section 4975 of the
Code or result in the imposition of an excise tax under Section 4975 of the Code
or subject the Depositor, the Trustee, the Master Servicer or the Special
Servicer to any obligation in addition to those undertaken in the Agreement.
Each Person who acquires this Class R Certificate or any interest therein
(unless it shall have acquired such Certificate or interest therein from the
Depositor or an Affiliate thereof or unless it shall have delivered to the
Certificate Registrar the certification of facts and Opinion of Counsel referred
to in clause (ii) of the preceding sentence) shall be required to deliver to the
Certificate Registrar a certification to the effect that: (i) it is neither a
Plan nor any Person who is directly or indirectly purchasing such Class R
Certificate or interest therein on behalf of, as named fiduciary of, as trustee
of, or with assets of a Plan; or (ii) the purchase and holding of such
Certificate or interest therein by such person is exempt from the prohibited
transaction provisions of Section 406 of ERISA and Section 4975 of the Code
under Section I and II of Prohibited Transaction Class Exemption 95-60.
Each Person who has or who acquires any Ownership Interest in this
Certificate shall be deemed by the acceptance or acquisition of such Ownership
Interest to have agreed to be bound by the provisions of Section 3.3(e) of the
Agreement and, if any purported Transferee shall become a Holder of this
Certificate in violation of the provisions of such Section 3.3(e), to have
irrevocably authorized the Trustee under clause (ii)(A) of such Section 3.3(e)
to deliver payments to a Person other than such Person and to have irrevocably
authorized the Trustee under clause (ii)(B) of such Section 3.3(e) to negotiate
the terms of any mandatory sale and to execute all instruments of Transfer and
to do all other things necessary in connection with any such sale. Each Person
holding or acquiring any Ownership Interest in this Certificate must be a
Permitted Transferee and a United States Person and shall promptly notify the
Trustee of any change or impending change in its status as a Permitted
Transferee or United States Person. In connection with any proposed Transfer of
any Ownership Interest in this Certificate, the Trustee shall require delivery
to it, and shall not register
A-15-4
<PAGE>
the Transfer of this Certificate until its receipt of, an affidavit and
agreement substantially in the form attached as Exhibit E-1 to the Agreement (a
"Transfer Affidavit and Agreement") from the proposed Transferee, in form and
substance satisfactory to the Trustee, representing and warranting, among other
things, that such Transferee is a Permitted Transferee and a United States
Person, that it is not acquiring its Ownership Interest in this Certificate as a
nominee, trustee or agent for any Person that is not a Permitted Transferee or
is not a United States Person, that for so long as it retains its Ownership
Interest in this Certificate, it will endeavor to remain a Permitted Transferee
and a United States Person, and that it has reviewed the provisions of Section
3.3 of the Agreement and agrees to be bound by them. Notwithstanding the
delivery of a Transfer Affidavit and Agreement by a proposed Transferee, if the
Trustee has actual knowledge that the proposed Transferee is not a Permitted
Transferee or is not a United States Person, the Trustee shall not register the
Transfer of an Ownership Interest in this Certificate to such proposed
Transferee.
Each Person holding or acquiring any Ownership Interest in this Certificate
shall agree (x) to require a Transfer Affidavit and Agreement from any
prospective Transferee to whom such Person attempts to transfer its Ownership
Interest herein and (y) not to transfer its Ownership Interest unless it
provides to the Trustee a certificate substantially in the form attached as
Exhibit E-2 to the Agreement stating that, among other things, it has no actual
knowledge that such prospective Transferee is not a Permitted Transferee or is
not a United States Person. Each Person holding or acquiring an Ownership
Interest in this Certificate, by purchasing such Ownership Interest herein,
agrees to give the Trustee written notice that it is a "pass-through interest
holder" within the meaning of temporary Treasury regulation Section
1.67-3T(a)(2)(i)(A) immediately upon acquiring such Ownership Interest, if it
is, or is holding such Ownership Interest on behalf of, a "pass-through interest
holder".
The provisions of Section 3.3 of the Agreement may be modified, added to or
eliminated, provided that there shall have been delivered to the Trustee the
following: (a) written notification from each Rating Agency to the effect that
the modification of, addition to or elimination of such provisions will not
cause such Rating Agency to withdraw, qualify or downgrade its then-current
rating of any Class of Certificates; and (b) an Opinion of Counsel, in form and
substance satisfactory to the Trustee and the Depositor, to the effect that such
modification of, addition to or elimination of such provisions will not cause
any of REMIC I, REMIC II or REMIC III to (x) cease to qualify as a REMIC or (y)
be subject to an entity-level tax caused by the Transfer of this Class R
Certificate to a Person which is not a Permitted Transferee, or cause a Person
other than the prospective Transferee to be subject to a REMIC-related tax
caused by the Transfer of this Class R Certificate to a Person which is not a
Permitted Transferee.
A "Permitted Transferee" is any Transferee other than (i) the United
States, any State or political subdivision thereof, any possession of the United
States, or any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax and, except for FHLMC, a majority of its board of directors is not selected
by such governmental unit), (ii) a foreign government, any international
organization, or any agency or instrumentality of any of the foregoing, (iii)
any organization (other than certain farmers' cooperatives described in Section
521 of the Code) which is exempt from the tax imposed by Chapter 1 of the Code
(including the tax imposed by Section 511 of the Code on unrelated business
taxable income), (iv) rural electric and telephone cooperatives described in
Section 1381(a)(2)(C) of the Code and (v) any other Person so designated by the
Trustee based upon an Opinion of Counsel that the holding of an Ownership
Interest in this Class R Certificate by such Person may cause the Trust
A-15-5
<PAGE>
Fund or any Person having an Ownership Interest in any Class of Certificates
(other than such Person) to incur a liability for any federal tax imposed under
the Code that would not otherwise be imposed but for the Transfer of an
Ownership Interest in this Class R Certificate to such Person. The terms "United
States", "State" and "international organization" shall have the meanings set
forth in Section 7701 of the Code or successor provisions.
A "United States Person" is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States is includable in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.
No service charge will be imposed for any registration of transfer or
exchange of this Class R Certificate, but the Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any transfer or
exchange of this Class R Certificate.
Prior to due presentment of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar and any agents 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 or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Operating Advisor, the Special Servicer, the Depositor, the Master Servicer or
the Holders of the Residual Certificates representing a majority Percentage
Interest in the Class R-I Interests, at a price determined as provided in the
Agreement, of all Mortgage Loans and any REO Properties remaining in the Trust
Fund. The Agreement permits, but does not require, the Operating Advisor, the
Special Servicer, the Depositor, the Master Servicer or such Holders to purchase
from the Trust Fund all Mortgage Loans and any REO Properties remaining therein
at such time as the aggregate Stated Principal Balance of the REMIC Mortgage
Pool is less than 5% of the aggregate Cut-off Date Principal Balance of the
REMIC Mortgage Pool specified on the face hereof. The exercise of such right
will effect early retirement of the Certificates.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee thereunder
and the rights of the Certificateholders thereunder, at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain circumstances,
A-15-6
<PAGE>
including any amendment necessary to maintain the status of REMIC I, REMIC II or
REMIC III as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York applicable to agreements made and to be performed in said
State, and the obligations, rights and remedies of the Holder hereof shall be
determined in accordance with such laws.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
State Street Bank and Trust Company,
as Trustee
By:_________________________________
Authorized Officer
A-15-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is the Class R Certificate referred to in the within-mentioned
Agreement.
Dated:
State Street Bank and Trust Company,
as Certificate Registrar
By:_________________________________
Authorized Officer
A-15-8
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Aetna Commercial Mortgage Trust Multiclass Pass-Through Certificate and hereby
authorize(s) the registration of transfer of such interest to the above named
assignee on the Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate of a like Percentage Interest and Class to
the above named assignee and delivery of such Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:___________
--------------------------------------
Signature by or on behalf of Assignor
--------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or otherwise,
in immediately available funds, to______________________________________________
for the account of_____________________________________________________________.
Distributions made by check (such check to be made payable to
_______________) and all applicable statements and notices should be mailed to
_______________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________, as its agent.
A-15-9
<PAGE>
EXHIBIT A-16
FORM OF CLASS V CERTIFICATE
CLASS V AETNA COMMERCIAL MORTGAGE TRUST MULTICLASS
PASS-THROUGH CERTIFICATE,
SERIES 1997-ALIC
evidencing a beneficial ownership interest in the Non-REMIC Assets included in a
trust fund (the "Trust Fund"), but not included in the REMIC Mortgage Pool, such
Trust Fund being formed and sold by
MORGAN STANLEY CAPITAL I INC.
Date of Pooling and Servicing Percentage Interest evidenced by this
Agreement: December 1, 1997 Certificate in the related Class: ___%
Cut-off Date: December 1, 1997 Trustee: State Street Bank and Trust
Issue Date: December 30, 1997 Company
First Distribution Date:
January 15, 1998
Master Servicer of
the REMIC Mortgage Pool:
Midland Loan Services, L.P.
Special Servicer of the REMIC Mortgage Pool
and Servicer of the Non-REMIC Assets:
Aetna Life Insurance Company CUSIP No.: 61745M EP 4
Certificate No. V-__
THIS CERTIFICATE REPRESENTS AN INTEREST ONLY IN THE NON-REMIC ASSETS (AS DEFINED
IN THE POOLING AND SERVICING AGREEMENT). THIS CERTIFICATE HAS NO CERTIFICATE
PRINCIPAL BALANCE, CERTIFICATE NOTIONAL AMOUNT OR PASS-THROUGH RATE.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN THE REMIC MORTGAGE POOL AND
DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MORGAN STANLEY CAPITAL I
INC., MIDLAND LOAN SERVICES, L.P., AETNA LIFE INSURANCE COMPANY, STATE STREET
BANK AND TRUST COMPANY OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE NON- REMIC ASSETS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
A-16-1
<PAGE>
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 3.3 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
DISTRIBUTIONS IN RESPECT OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH IN
SECTION 6.4(e) OF THE POOLING AND SERVICING AGREEMENT.
This certifies that ________________________ is the registered owner of the
Percentage Interest evidenced by this Class V Certificate (as specified above)
in that certain beneficial ownership interest evidenced by all the Class V
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), between Morgan Stanley
Capital I Inc., as Depositor, Midland Loan Services, L.P., as Master Servicer,
Aetna Life Insurance Company, as Seller and Special Servicer and State Street
Bank and Trust Company, as Trustee. The Special Servicer will also act as
servicer in respect of the Non-REMIC Assets. To the extent not defined herein,
the capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
15th day of each month or, if such 15th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class V Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on any Class V Certificate
will be made by the Trustee by wire transfer in immediately available funds to
the account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Trustee with wiring instructions on or prior to the Record Date for such
distribution (which wiring instructions may be in the form of a standing order
applicable to all subsequent distributions as well) or otherwise by check mailed
to the address of such Certificateholder appearing in the Certificate Register.
Notwithstanding the above, the final
A-16-2
<PAGE>
distribution on this Certificate will be made after due notice by the Trustee of
the pendency of such distribution and only upon presentation and surrender of
this Certificate at the offices of the Certificate Registrar appointed as
provided in the Agreement or such other location as may be specified in such
notice.
Any distribution to the Holder of this Certificate is binding on such
Holder and all future Holders of this Certificate and any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such distribution is made upon this Certificate.
The Depositor's Aetna Mortgage Trust Multiclass Pass-Through Certificates,
Series 1997-ALIC (the "Certificates") are limited in right of distribution to
certain collections and recoveries specifically set forth herein and in the
Agreement. As provided in the Agreement, withdrawals from the Collection Account
and the Distribution Account may be made from time to time for purposes other
than, and, in certain cases, prior to, distributions to Certificateholders, such
purposes including the payment of servicing fees.
The Class V Certificates are issuable in fully registered form only,
without coupons, in minimum denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Class V Certificates are exchangeable for new
Class V Certificates in authorized denominations evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class V Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No transfer, sale, pledge or other disposition of any Class V Certificate
or interest therein shall be made unless that transfer, sale, pledge or other
disposition is exempt from the registration and/or qualification requirements of
the Securities Act and any applicable state securities laws, or is otherwise
made in accordance with the Securities Act and such state securities laws. If a
transfer of any Class V Certificate is to be made without registration under the
Securities Act (other than in connection with the initial issuance of the
Certificates or a transfer of such Class V Certificate by the Depositor or any
of its Affiliates), then the Certificate Registrar shall refuse to register such
transfer unless it receives (and upon receipt, may conclusively rely upon)
either: (i) a certificate from the Certificateholder desiring to effect such
transfer substantially in the form attached to the Agreement as Exhibit D-1 and
a certificate from such Certificateholder's prospective transferee substantially
in the form attached to the Agreement either as Exhibit D-2A or as Exhibit D-2B;
or (ii) an Opinion of Counsel satisfactory to the Trustee to the effect that
such transfer may be made without registration under the Securities Act (which
Opinion of Counsel shall not be an expense of the Trust Fund or of the
Depositor, the Master Servicer, the Special Servicer, the Trustee or the
Certificate Registrar in their respective capacities as such), together with the
written certification(s) as to the facts surrounding such transfer on which such
Opinion of Counsel is based. None of the Depositor, the Trustee or the
Certificate Registrar is obligated to register or qualify any Class V
Certificates under the Securities Act or any other securities law or to take any
action not
A-16-3
<PAGE>
otherwise required under this Agreement to permit the transfer of any Class V
Certificate or interest therein without registration or qualification. Any
Certificateholder or Certificate Owner desiring to effect a transfer of Class V
Certificates or interests therein shall, and does hereby agree to, indemnify,
the Depositor, the Underwriter, the Trustee, the Master Servicer, the Special
Servicer and the Certificate Registrar against any liability that may result if
the transfer is not exempt from such registration or qualification or is not
made in accordance with such federal and state laws.
No transfer of a Class V Certificate or any interest therein shall be made
(A) to any employee benefit plan or other retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds and separate accounts in which such plans, accounts or
arrangements are invested, including, without limitation, insurance company
general accounts, that is subject to ERISA or the Code (each, a "Plan"), or (B)
to any Person who is directly or indirectly purchasing such Certificate or
interest therein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, unless the prospective Transferee provides the Certificate
Registrar with a certification of facts and an Opinion of Counsel which
establish to the satisfaction of the Trustee that such transfer will not result
in a violation of Section 406 of ERISA or Section 4975 of the Code or result in
the imposition of an excise tax under Section 4975 of the Code or subject the
Depositor, the Trustee, the Master Servicer or the Special Servicer to any
obligation in addition to those undertaken in the Agreement. Each Person who
acquires any Class V Certificate or interest therein (unless it shall have
acquired such Certificate or interest therein from the Depositor or an Affiliate
thereof or unless it shall have delivered to the Certificate Registrar the
certification of facts and Opinion of Counsel referred to in the preceding
sentence) shall be required to deliver to the Certificate Registrar a
certification to the effect that: (i) it is neither a Plan nor any Person who is
directly or indirectly purchasing such Class V Certificate or interest therein
on behalf of, as named fiduciary of, as trustee of, or with assets of a Plan; or
(ii) the purchase and holding of such Certificate or interest therein by such
person is exempt from the prohibited transaction provisions of Section 406 of
ERISA and Section 4975 of the Code under Section I and II of Prohibited
Transaction Class Exemption 95-60.
No service charge will be imposed for any registration of transfer or
exchange of Class V Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
V Certificates.
Prior to due presentment of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar and any agents 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 or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Operating Advisor, the Special Servicer, the Depositor, the Master Servicer or
the Holders of the Residual Certificates representing a majority Percentage
Interest in the Class R-I Interests, at a price determined as provided in the
Agreement, of all Mortgage Loans and any REO Properties remaining
A-16-4
<PAGE>
in the Trust Fund. The Agreement permits, but does not require, the Operating
Advisor, the Special Servicer, the Depositor, the Master Servicer or such
Holders to purchase from the Trust Fund all Mortgage Loans and any REO
Properties remaining therein at such time as the aggregate Stated Principal
Balance of the REMIC Mortgage Pool is less than 5% of the aggregate Cut-off Date
Principal Balance of the REMIC Mortgage Pool specified on the face hereof. The
exercise of such right will effect early retirement of the Certificates.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee thereunder
and the rights of the Certificateholders thereunder, at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. The Agreement also permits the
amendment thereof, in certain circumstances, including any amendment necessary
to maintain the status of REMIC I, REMIC II or REMIC III as a REMIC, without the
consent of the Holders of any of the Certificates. The Class V Certificates have
no Voting Rights.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York applicable to agreements made and to be performed in said
State, and the obligations, rights and remedies of the Holder hereof shall be
determined in accordance with such laws.
A-16-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
State Street Bank and Trust Company,
as Trustee
By:_________________________________
Authorized Officer
A-16-6
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Class V Certificates referred to in the within-mentioned
Agreement.
Dated:
State Street Bank and Trust Company,
as Certificate Registrar
By:_________________________________
Authorized Officer
A-16-7
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Aetna Commercial Mortgage Trust Multiclass Pass-Through Certificate and hereby
authorize(s) the registration of transfer of such interest to the above named
assignee on the Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate of a like Percentage Interest and Class to
the above named assignee and delivery of such Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:___________
--------------------------------------
Signature by or on behalf of Assignor
--------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or otherwise,
in immediately available funds, to______________________________________________
for the account of_____________________________________________________________.
Distributions made by check (such check to be made payable to
_______________) and all applicable statements and notices should be mailed to
_______________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________, as its agent.
A-16-8
<PAGE>
EXHIBIT A-17
FORM OF CLASS W CERTIFICATE
CLASS W AETNA COMMERCIAL MORTGAGE TRUST MULTICLASS
PASS-THROUGH CERTIFICATE,
SERIES 1997-ALIC
evidencing a beneficial ownership interest in the Non-REMIC Fees included in a
trust fund (the "Trust Fund"), but not included in the REMIC Mortgage Pool, such
Trust Fund being formed and sold by
MORGAN STANLEY CAPITAL I INC.
Date of Pooling and Servicing Percentage Interest evidenced by this
Agreement: December 1, 1997 Certificate in the related Class: ___%
Cut-off Date: December 1, 1997 Trustee: State Street Bank and Trust Company
Issue Date: December 30, 1997
First Distribution Date:
January 15, 1998
Master Servicer of
the REMIC Mortgage Pool:
Midland Loan Services, L.P.
Special Servicer of the REMIC Mortgage Pool
and Servicer of the Non-REMIC Assets:
Aetna Life Insurance Company CUSIP No.: 61745M EQ 2
Certificate No. W-__
THIS CERTIFICATE REPRESENTS AN INTEREST ONLY IN THE NON-REMIC FEES (AS DEFINED
IN THE POOLING AND SERVICING AGREEMENT). THIS CERTIFICATE HAS NO CERTIFICATE
PRINCIPAL BALANCE, CERTIFICATE NOTIONAL AMOUNT OR PASS-THROUGH RATE.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN THE REMIC MORTGAGE POOL AND
DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MORGAN STANLEY CAPITAL I
INC., MIDLAND LOAN SERVICES, L.P., AETNA LIFE INSURANCE COMPANY, STATE STREET
BANK AND TRUST COMPANY OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE NON- REMIC FEES ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
A-17-1
<PAGE>
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 3.3 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
DISTRIBUTIONS IN RESPECT OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH IN
SECTION 6.4(f) OF THE POOLING AND SERVICING AGREEMENT.
This certifies that _____________________ is the registered owner of the
Percentage Interest evidenced by this Class W Certificate (as specified above)
in that certain beneficial ownership interest evidenced by all the Class W
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), between Morgan Stanley
Capital I Inc., as Depositor, Midland Loan Services, L.P., as Master Servicer,
Aetna Life Insurance Company, as Seller and Special Servicer and State Street
Bank and Trust Company, as Trustee. The Special Servicer will also act as
servicer in respect of the Non-REMIC Assets. To the extent not defined herein,
the capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
15th day of each month or, if such 15th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class W Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on any Class W Certificate
will be made by the Trustee by wire transfer in immediately available funds to
the account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Trustee with wiring instructions on or prior to the Record Date for such
distribution (which wiring instructions may be in the form of a standing order
applicable to all subsequent distributions as well) or otherwise by check mailed
to the address of such Certificateholder appearing in the Certificate Register.
Notwithstanding the above, the final
A-17-2
<PAGE>
distribution on this Certificate will be made after due notice by the Trustee of
the pendency of such distribution and only upon presentation and surrender of
this Certificate at the offices of the Certificate Registrar appointed as
provided in the Agreement or such other location as may be specified in such
notice.
Any distribution to the Holder of this Certificate is binding on such
Holder and all future Holders of this Certificate and any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such distribution is made upon this Certificate.
The Depositor's Aetna Mortgage Trust Multiclass Pass-Through Certificates,
Series 1997-ALIC (the "Certificates") are limited in right of distribution to
certain collections and recoveries specifically set forth herein and in the
Agreement. As provided in the Agreement, withdrawals from the Collection Account
and the Distribution Account may be made from time to time for purposes other
than, and, in certain cases, prior to, distributions to Certificateholders, such
purposes including the payment of servicing fees.
The Class W Certificates are issuable in fully registered form only,
without coupons, in minimum denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Class W Certificates are exchangeable for new
Class W Certificates in authorized denominations evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class W Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No transfer, sale, pledge or other disposition of any Class W Certificate
or interest therein shall be made unless that transfer, sale, pledge or other
disposition is exempt from the registration and/or qualification requirements of
the Securities Act and any applicable state securities laws, or is otherwise
made in accordance with the Securities Act and such state securities laws. If a
transfer of any Class W Certificate is to be made without registration under the
Securities Act (other than in connection with the initial issuance of the
Certificates or a transfer of such Class W Certificate by the Depositor or any
of its Affiliates), then the Certificate Registrar shall refuse to register such
transfer unless it receives (and upon receipt, may conclusively rely upon)
either: (i) a certificate from the Certificateholder desiring to effect such
transfer substantially in the form attached to the Agreement as Exhibit D-1 and
a certificate from such Certificateholder's prospective transferee substantially
in the form attached to the Agreement either as Exhibit D-2A or as Exhibit D-2B;
or (ii) an Opinion of Counsel satisfactory to the Trustee to the effect that
such transfer may be made without registration under the Securities Act (which
Opinion of Counsel shall not be an expense of the Trust Fund or of the
Depositor, the Master Servicer, the Special Servicer, the Trustee or the
Certificate Registrar in their respective capacities as such), together with the
written certification(s) as to the facts surrounding such transfer on which such
Opinion of Counsel is based. None of the Depositor, the Trustee or the
Certificate Registrar is obligated to register or qualify any Class W
Certificates under the Securities Act or any other securities law or to take any
action not
A-17-3
<PAGE>
otherwise required under this Agreement to permit the transfer of any Class W
Certificate or interest therein without registration or qualification. Any
Certificateholder or Certificate Owner desiring to effect a transfer of Class W
Certificates or interests therein shall, and does hereby agree to, indemnify,
the Depositor, the Underwriter, the Trustee, the Master Servicer, the Special
Servicer and the Certificate Registrar against any liability that may result if
the transfer is not exempt from such registration or qualification or is not
made in accordance with such federal and state laws.
No transfer of a Class W Certificate or any interest therein shall be made
(A) to any employee benefit plan or other retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds and separate accounts in which such plans, accounts or
arrangements are invested, including, without limitation, insurance company
general accounts, that is subject to ERISA or the Code (each, a "Plan"), or (B)
to any Person who is directly or indirectly purchasing such Certificate or
interest therein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, unless the prospective Transferee provides the Certificate
Registrar with a certification of facts and an Opinion of Counsel which
establish to the satisfaction of the Trustee that such transfer will not result
in a violation of Section 406 of ERISA or Section 4975 of the Code or result in
the imposition of an excise tax under Section 4975 of the Code or subject the
Depositor, the Trustee, the Master Servicer or the Special Servicer to any
obligation in addition to those undertaken in the Agreement. Each Person who
acquires any Class W Certificate or interest therein (unless it shall have
acquired such Certificate or interest therein from the Depositor or an Affiliate
thereof or unless it shall have delivered to the Certificate Registrar the
certification of facts and Opinion of Counsel referred to in the preceding
sentence) shall be required to deliver to the Certificate Registrar a
certification to the effect that: (i) it is neither a Plan nor any Person who is
directly or indirectly purchasing such Class W Certificate or interest therein
on behalf of, as named fiduciary of, as trustee of, or with assets of a Plan; or
(ii) the purchase and holding of such Certificate or interest therein by such
person is exempt from the prohibited transaction provisions of Section 406 of
ERISA and Section 4975 of the Code under Section I and II of Prohibited
Transaction Class Exemption 95-60.
No service charge will be imposed for any registration of transfer or
exchange of Class W Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
W Certificates.
Prior to due presentment of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar and any agents 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 or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Operating Advisor, the Special Servicer, the Depositor, the Master Servicer or
the Holders of the Residual Certificates representing a majority Percentage
Interest in the Class R-I Interests, at a price determined as provided in the
Agreement, of all Mortgage Loans and any REO Properties remaining
A-17-4
<PAGE>
in the Trust Fund. The Agreement permits, but does not require, the Operating
Advisor, the Special Servicer, the Depositor, the Master Servicer or such
Holders to purchase from the Trust Fund all Mortgage Loans and any REO
Properties remaining therein at such time as the aggregate Stated Principal
Balance of the REMIC Mortgage Pool is less than 5% of the aggregate Cut-off Date
Principal Balance of the REMIC Mortgage Pool specified on the face hereof. The
exercise of such right will effect early retirement of the Certificates.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee thereunder
and the rights of the Certificateholders thereunder, at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. The Agreement also permits the
amendment thereof, in certain circumstances, including any amendment necessary
to maintain the status of REMIC I, REMIC II or REMIC III as a REMIC, without the
consent of the Holders of any of the Certificates. The Class W Certificates have
no Voting Rights.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York applicable to agreements made and to be performed in said
State, and the obligations, rights and remedies of the Holder hereof shall be
determined in accordance with such laws.
A-17-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
State Street Bank and Trust Company,
as Trustee
By:_________________________________
Authorized Officer
A-17-6
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Class W Certificates referred to in the within-mentioned
Agreement.
Dated:
State Street Bank and Trust Company,
as Certificate Registrar
By:_________________________________
Authorized Officer
A-17-7
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Aetna Commercial Mortgage Trust Multiclass Pass-Through Certificate and hereby
authorize(s) the registration of transfer of such interest to the above named
assignee on the Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate of a like Percentage Interest and Class to
the above named assignee and delivery of such Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:___________
--------------------------------------
Signature by or on behalf of Assignor
--------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or otherwise,
in immediately available funds, to______________________________________________
for the account of_____________________________________________________________.
Distributions made by check (such check to be made payable to
_______________) and all applicable statements and notices should be mailed to
_______________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________, as its agent.
A-17-8
<PAGE>
EXHIBIT A-18
FORM OF CLASS R-I CERTIFICATE
CLASS R-I AETNA COMMERCIAL MORTGAGE TRUST MULTICLASS
PASS-THROUGH CERTIFICATE,
SERIES 1997-ALIC
evidencing a beneficial ownership interest in the REMIC Pool included in a trust
fund (the "Trust Fund") consisting primarily of a pool (the "REMIC Mortgage
Pool") of multifamily and commercial mortgage loans (the "REMIC Mortgage
Loans"), such pool being formed and sold by
MORGAN STANLEY CAPITAL I INC.
Date of Pooling and Servicing Percentage Interest evidenced by
Agreement: December 1, 1997 this Certificate in the related Class: ____%
Cut-off Date: December 1, 1997 Aggregate unpaid principal balance of the
Issue Date: December 30, 1997 REMIC Mortgage Pool as of the Cut-off Date,
after deducting payments of principal due
on or before such date, whether or not
received: $802,696,189
First Distribution Date:
January 15, 1998
Master Servicer: Midland Loan Services, L.P.
Trustee: State Street Bank and Trust
Company
Special Servicer: Aetna Life Insurance Company
Certificate No. R-I-__
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MORGAN
STANLEY CAPITAL I INC., MIDLAND LOAN SERVICES, L.P., AETNA LIFE INSURANCE
COMPANY, STATE STREET BANK AND TRUST COMPANY OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1A, CLASS A-1B, CLASS A-2, CLASS
IO, CLASS B, CLASS C, CLASS D, CLASS E, CLASS F, CLASS G, CLASS H, CLASS J,
CLASS K AND Class L CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT
PROVIDED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
A-18-1
<PAGE>
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 3.3 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
CONSEQUENTLY, TRANSFER OF THIS CERTIFICATE IS ALSO SUBJECT TO THE ADDITIONAL TAX
RELATED TRANSFER RESTRICTIONS DESCRIBED HEREIN. IF ANY PERSON BECOMES THE
REGISTERED HOLDER OF THIS CERTIFICATE IN VIOLATION OF SUCH TRANSFER
RESTRICTIONS, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER
FOR ANY PURPOSE HEREUNDER OR UNDER THE POOLING AND SERVICING AGREEMENT REFERRED
TO HEREIN, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE.
This certifies that _____________________ is the registered owner of the
Percentage Interest evidenced by this Class R-I Certificate (as specified above)
in that certain beneficial ownership interest evidenced by all the Class R-I
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), between Morgan Stanley
Capital I Inc., as Depositor, Midland Loan Services, L.P., as Master Servicer,
Aetna Life Insurance Company, as Seller and Special Servicer and State Street
Bank and Trust Company, as Trustee. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
15th day of each month or, if such 15th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
A-18-2
<PAGE>
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class R-I Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on any Class R-I
Certificate will be made by the Trustee by check mailed to the address of the
Person entitled thereto, as such name and address appear in the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
offices of the Certificate Registrar appointed as provided in the Agreement or
such other location as may be specified in such notice.
The Depositor's Aetna Mortgage Trust Multiclass Pass-Through Certificates,
Series 1997-ALIC (the "Certificates") are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than, and, in certain cases,
prior to, distributions to Certificateholders, such purposes including the
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans and the payment of interest on such advances and expenses.
The Class R-I Certificates are issuable in fully registered form only
without coupons in minimum denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Class R-I Certificates are exchangeable for new
Class R-I Certificates in authorized denominations evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class R-I Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No transfer, sale, pledge or other disposition of any Class R-I Certificate
or interest therein shall be made unless that transfer, sale, pledge or other
disposition is exempt from the registration and/or qualification requirements of
the Securities Act and any applicable state securities laws, or is otherwise
made in accordance with the Securities Act and such state securities laws. If a
transfer of any Class R-I Certificate is to be made without registration under
the Securities Act (other than in connection with the initial issuance of the
Certificates or a transfer of such Class R-I Certificate by the Depositor or any
of its Affiliates), then the Certificate Registrar shall refuse to register such
transfer unless it receives (and upon receipt, may conclusively rely upon)
either: (i) a certificate from the Certificateholder desiring to effect such
transfer substantially in the form attached to the Agreement as Exhibit D-1 and
a certificate from such Certificateholder's prospective transferee substantially
in the form attached to the Agreement either as Exhibit D-2A or as Exhibit D-2B;
or (ii) an Opinion of Counsel satisfactory to the Trustee to the effect that
such transfer may be made without registration under the Securities Act (which
Opinion of Counsel shall not be an expense of the Trust Fund or of the
Depositor, the Master Servicer, the Special Servicer, the Trustee or the
Certificate Registrar in their respective capacities as such), together with the
written
A-18-3
<PAGE>
certification(s) as to the facts surrounding such transfer on which such Opinion
of Counsel is based. None of the Depositor, the Trustee or the Certificate
Registrar is obligated to register or qualify any Class R-I Certificates under
the Securities Act or any other securities law or to take any action not
otherwise required under this Agreement to permit the transfer of any Class R-I
Certificate or interest therein without registration or qualification. Any
Certificateholder or Certificate Owner desiring to effect a transfer of Class
R-I Certificates or interests therein shall, and does hereby agree to,
indemnify, the Depositor, the Underwriter, the Trustee, the Master Servicer, the
Special Servicer and the Certificate Registrar against any liability that may
result if the transfer is not exempt from such registration or qualification or
is not made in accordance with such federal and state laws.
No transfer of a Class R-I Certificate or any interest therein shall be
made (A) to any employee benefit plan or other retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds and separate accounts in which such plans, accounts or
arrangements are invested, including, without limitation, insurance company
general accounts, that is subject to ERISA or the Code (each, a "Plan"), or (B)
to any Person who is directly or indirectly purchasing such Certificate or
interest therein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, unless: (i) the purchase and holding of such Certificate or
interest therein is exempt from the prohibited transaction provisions of Section
406 of ERISA and Section 4975 of the Code under Section I and III of Prohibited
Transaction Class Exemption 95-60; or (ii) the prospective Transferee provides
the Certificate Registrar with a certification of facts and an Opinion of
Counsel which establish to the satisfaction of the Trustee that such transfer
will not result in a violation of Section 406 of ERISA or Section 4975 of the
Code or result in the imposition of an excise tax under Section 4975 of the Code
or subject the Depositor, the Trustee, the Master Servicer or the Special
Servicer to any obligation in addition to those undertaken in the Agreement.
Each Person who acquires any Class R-I Certificate or interest therein (unless
it shall have acquired such Certificate or interest therein from the Depositor
or an Affiliate thereof or unless it shall have delivered to the Certificate
Registrar the certification of facts and Opinion of Counsel referred to in
clause (ii) of the preceding sentence) shall be required to deliver to the
Certificate Registrar a certification to the effect that: (i) it is neither a
Plan nor any Person who is directly or indirectly purchasing such Class R-I
Certificate or interest therein on behalf of, as named fiduciary of, as trustee
of, or with assets of a Plan; or (ii) the purchase and holding of such
Certificate or interest therein by such person is exempt from the prohibited
transaction provisions of Section 406 of ERISA and Section 4975 of the Code
under Section I and II of Prohibited Transaction Class Exemption 95- 60.
Each Person who has or who acquires any Ownership Interest in this
Certificate shall be deemed by the acceptance or acquisition of such Ownership
Interest to have agreed to be bound by the provisions of Section 3.3(e) of the
Agreement and, if any purported Transferee shall become a Holder of this
Certificate in violation of the provisions of such Section 3.3(e), to have
irrevocably authorized the Trustee under clause (ii)(A) of such Section 3.3(e)
to deliver payments to a Person other than such Person and to have irrevocably
authorized the Trustee under clause (ii)(B) of such Section 3.3(e) to negotiate
the terms of any mandatory sale and to execute all instruments of Transfer and
to do all other things necessary in connection with any such sale. Each Person
holding or acquiring any Ownership Interest in this Certificate must be a
Permitted Transferee and a United States Person and shall promptly notify the
Trustee of any change or impending change in its status as a Permitted
Transferee or United States Person. In connection with any proposed Transfer of
any Ownership Interest in this Certificate, the Trustee shall require delivery
to it, and shall not register the Transfer of this Certificate until its receipt
of, an affidavit and agreement substantially in the
A-18-4
<PAGE>
form attached as Exhibit E-1 to the Agreement (a "Transfer Affidavit and
Agreement") from the proposed Transferee, in form and substance satisfactory to
the Trustee, representing and warranting, among other things, that such
Transferee is a Permitted Transferee and a United States Person, that it is not
acquiring its Ownership Interest in this Certificate as a nominee, trustee or
agent for any Person that is not a Permitted Transferee or is not a United
States Person, that for so long as it retains its Ownership Interest in this
Certificate, it will endeavor to remain a Permitted Transferee and a United
States Person, and that it has reviewed the provisions of Section 3.3 of the
Agreement and agrees to be bound by them. Notwithstanding the delivery of a
Transfer Affidavit and Agreement by a proposed Transferee, if the Trustee has
actual knowledge that the proposed Transferee is not a Permitted Transferee or
is not a United States Person, the Trustee shall not register the Transfer of an
Ownership Interest in this Certificate to such proposed Transferee.
Each Person holding or acquiring any Ownership Interest in this Certificate
shall agree (x) to require a Transfer Affidavit and Agreement from any
prospective Transferee to whom such Person attempts to transfer its Ownership
Interest herein and (y) not to transfer its Ownership Interest unless it
provides to the Trustee a certificate substantially in the form attached as
Exhibit E-2 to the Agreement stating that, among other things, it has no actual
knowledge that such prospective Transferee is not a Permitted Transferee or is
not a United States Person. Each Person holding or acquiring an Ownership
Interest in this Certificate, by purchasing such Ownership Interest herein,
agrees to give the Trustee written notice that it is a "pass-through interest
holder" within the meaning of temporary Treasury regulation Section
1.67-3T(a)(2)(i)(A) immediately upon acquiring such Ownership Interest, if it
is, or is holding such Ownership Interest on behalf of, a "pass-through interest
holder".
The provisions of Section 3.3 of the Agreement may be modified, added to or
eliminated, provided that there shall have been delivered to the Trustee the
following: (a) written notification from each Rating Agency to the effect that
the modification of, addition to or elimination of such provisions will not
cause such Rating Agency to withdraw, qualify or downgrade its then-current
rating of any Class of Certificates; and (b) an Opinion of Counsel, in form and
substance satisfactory to the Trustee and the Depositor, to the effect that such
modification of, addition to or elimination of such provisions will not cause
any of REMIC I, REMIC II or REMIC III to (x) cease to qualify as a REMIC or (y)
be subject to an entity-level tax caused by the Transfer of any Class R-I
Certificate to a Person which is not a Permitted Transferee, or cause a Person
other than the prospective Transferee to be subject to a REMIC-related tax
caused by the Transfer of a Class R-I Certificate to a Person which is not a
Permitted Transferee.
A "Permitted Transferee" is any Transferee other than (i) the United
States, any State or political subdivision thereof, any possession of the United
States, or any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax and, except for FHLMC, a majority of its board of directors is not selected
by such governmental unit), (ii) a foreign government, any international
organization, or any agency or instrumentality of any of the foregoing, (iii)
any organization (other than certain farmers' cooperatives described in Section
521 of the Code) which is exempt from the tax imposed by Chapter 1 of the Code
(including the tax imposed by Section 511 of the Code on unrelated business
taxable income), (iv) rural electric and telephone cooperatives described in
Section 1381(a)(2)(C) of the Code and (v) any other Person so designated by the
Trustee based upon an Opinion of Counsel that the holding of an Ownership
Interest in a Class R-I Certificate by such Person may cause the Trust Fund
A-18-5
<PAGE>
or any Person having an Ownership Interest in any Class of Certificates (other
than such Person) to incur a liability for any federal tax imposed under the
Code that would not otherwise be imposed but for the Transfer of an Ownership
Interest in a Class R-I Certificate to such Person. The terms "United States",
"State" and "international organization" shall have the meanings set forth in
Section 7701 of the Code or successor provisions.
A "United States Person" is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States is includable in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.
No service charge will be imposed for any registration of transfer or
exchange of Class R-I Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
R-I Certificates.
Prior to due presentment of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar and any agents 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 or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Operating Advisor, the Special Servicer, the Depositor, the Master Servicer or
the Holders of the Residual Certificates representing a majority Percentage
Interest in the Class R-I Interests, at a price determined as provided in the
Agreement, of all Mortgage Loans and any REO Properties remaining in the Trust
Fund. The Agreement permits, but does not require, the Operating Advisor, the
Special Servicer, the Depositor, the Master Servicer or such Holders to purchase
from the Trust Fund all Mortgage Loans and any REO Properties remaining therein
at such time as the aggregate Stated Principal Balance of the REMIC Mortgage
Pool is less than 5% of the aggregate Cut-off Date Principal Balance of the
REMIC Mortgage Pool specified on the face hereof. The exercise of such right
will effect early retirement of the Certificates.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee thereunder
and the rights of the Certificateholders thereunder, at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain circumstances,
A-18-6
<PAGE>
including any amendment necessary to maintain the status of REMIC I, REMIC II or
REMIC III as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York applicable to agreements made and to be performed in said
State, and the obligations, rights and remedies of the Holder hereof shall be
determined in accordance with such laws.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
State Street Bank and Trust Company,
as Trustee
By:_________________________________
Authorized Officer
A-18-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-I Certificates referred to in the
within-mentioned Agreement.
Dated:
State Street Bank and Trust Company,
as Certificate Registrar
By:_________________________________
Authorized Officer
A-18-8
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Aetna Commercial Mortgage Trust Multiclass Pass-Through Certificate and hereby
authorize(s) the registration of transfer of such interest to the above named
assignee on the Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate of a like Percentage Interest and Class to
the above named assignee and delivery of such Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:___________
--------------------------------------
Signature by or on behalf of Assignor
--------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or otherwise,
in immediately available funds, to______________________________________________
for the account of_____________________________________________________________.
Distributions made by check (such check to be made payable to
_______________) and all applicable statements and notices should be mailed to
_______________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________, as its agent.
A-18-9
<PAGE>
EXHIBIT A-19
FORM OF CLASS R-II CERTIFICATE
CLASS R-II AETNA COMMERCIAL MORTGAGE TRUST MULTICLASS
PASS-THROUGH CERTIFICATE,
SERIES 1997-ALIC
evidencing a beneficial ownership interest in the REMIC Pool included in a trust
fund (the "Trust Fund") consisting primarily of a pool (the "REMIC Mortgage
Pool") of multifamily and commercial mortgage loans (the "REMIC Mortgage
Loans"), such pool being formed and sold by
MORGAN STANLEY CAPITAL I INC.
Date of Pooling and Servicing Percentage Interest evidenced by
Agreement: December 1, 1997 this Certificate in the related Class: ____%
Cut-off Date: December 1, 1997 Aggregate unpaid principal balance of the
Issue Date: December 30, 1997 REMIC Mortgage Pool as of the Cut-off Date,
after deducting payments of principal due
on or before such date, whether or not
received: $802,696,189
First Distribution Date:
January 15, 1998
Master Servicer: Midland Loan Services, L.P.
Trustee: State Street Bank and Trust
Company
Special Servicer: Aetna Life Insurance Company
Certificate No. R-II-__
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MORGAN
STANLEY CAPITAL I INC., MIDLAND LOAN SERVICES, L.P., AETNA LIFE INSURANCE
COMPANY, STATE STREET BANK AND TRUST COMPANY OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1A, CLASS A-1B, CLASS A-2, CLASS
IO, CLASS B, CLASS C, CLASS D, CLASS E, CLASS F, CLASS G, CLASS H, CLASS J,
CLASS K AND Class L CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT
PROVIDED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
A-19-1
<PAGE>
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 3.3 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
CONSEQUENTLY, TRANSFER OF THIS CERTIFICATE IS ALSO SUBJECT TO THE ADDITIONAL TAX
RELATED TRANSFER RESTRICTIONS DESCRIBED HEREIN. IF ANY PERSON BECOMES THE
REGISTERED HOLDER OF THIS CERTIFICATE IN VIOLATION OF SUCH TRANSFER
RESTRICTIONS, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER
FOR ANY PURPOSE HEREUNDER OR UNDER THE POOLING AND SERVICING AGREEMENT REFERRED
TO HEREIN, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE.
This certifies that _________________________ is the registered owner of
the Percentage Interest evidenced by this Class R-II Certificate (as specified
above) in that certain beneficial ownership interest evidenced by all the Class
R-II Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), between Morgan Stanley
Capital I Inc., as Depositor, Midland Loan Services, L.P., as Master Servicer,
Aetna Life Insurance Company, as Seller and Special Servicer and State Street
Bank and Trust Company, as Trustee. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
15th day of each month or, if such 15th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
A-19-2
<PAGE>
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class R-II Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on any Class R-II
Certificate will be made by the Trustee by check mailed to the address of the
Person entitled thereto, as such name and address appear in the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
offices of the Certificate Registrar appointed as provided in the Agreement or
such other location as may be specified in such notice.
The Depositor's Aetna Mortgage Trust Multiclass Pass-Through Certificates,
Series 1997-ALIC (the "Certificates") are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than, and, in certain cases,
prior to, distributions to Certificateholders, such purposes including the
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans and the payment of interest on such advances and expenses.
The Class R-II Certificates are issuable in fully registered form only
without coupons in minimum denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Class R-II Certificates are exchangeable for new
Class R-II Certificates in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class R-II Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No transfer, sale, pledge or other disposition of any Class R-II
Certificate or interest therein shall be made unless that transfer, sale, pledge
or other disposition is exempt from the registration and/or qualification
requirements of the Securities Act and any applicable state securities laws, or
is otherwise made in accordance with the Securities Act and such state
securities laws. If a transfer of any Class R-II Certificate is to be made
without registration under the Securities Act (other than in connection with the
initial issuance of the Certificates or a transfer of such Class R-II
Certificate by the Depositor or any of its Affiliates), then the Certificate
Registrar shall refuse to register such transfer unless it receives (and upon
receipt, may conclusively rely upon) either: (i) a certificate from the
Certificateholder desiring to effect such transfer substantially in the form
attached to the Agreement as Exhibit D-1 and a certificate from such
Certificateholder's prospective transferee substantially in the form attached to
the Agreement either as Exhibit D-2A or as Exhibit D-2B; or (ii) an Opinion of
Counsel satisfactory to the Trustee to the effect that such transfer may be made
without registration under the Securities Act (which Opinion of Counsel shall
not be an expense of the Trust Fund or of the Depositor, the Master Servicer,
the Special Servicer, the Trustee or the Certificate Registrar in their
respective capacities as such), together with the written
A-19-3
<PAGE>
certification(s) as to the facts surrounding such transfer on which such Opinion
of Counsel is based. None of the Depositor, the Trustee or the Certificate
Registrar is obligated to register or qualify any Class R-II Certificates under
the Securities Act or any other securities law or to take any action not
otherwise required under this Agreement to permit the transfer of any Class R-II
Certificate or interest therein without registration or qualification. Any
Certificateholder or Certificate Owner desiring to effect a transfer of Class
R-II Certificates or interests therein shall, and does hereby agree to,
indemnify, the Depositor, the Underwriter, the Trustee, the Master Servicer, the
Special Servicer and the Certificate Registrar against any liability that may
result if the transfer is not exempt from such registration or qualification or
is not made in accordance with such federal and state laws.
No transfer of a Class R-II Certificate or any interest therein shall be
made (A) to any employee benefit plan or other retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds and separate accounts in which such plans, accounts or
arrangements are invested, including, without limitation, insurance company
general accounts, that is subject to ERISA or the Code (each, a "Plan"), or (B)
to any Person who is directly or indirectly purchasing such Certificate or
interest therein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, unless: (i) the purchase and holding of such Certificate or
interest therein is exempt from the prohibited transaction provisions of Section
406 of ERISA and Section 4975 of the Code under Section I and III of Prohibited
Transaction Class Exemption 95-60; or (ii) the prospective Transferee provides
the Certificate Registrar with a certification of facts and an Opinion of
Counsel which establish to the satisfaction of the Trustee that such transfer
will not result in a violation of Section 406 of ERISA or Section 4975 of the
Code or result in the imposition of an excise tax under Section 4975 of the Code
or subject the Depositor, the Trustee, the Master Servicer or the Special
Servicer to any obligation in addition to those undertaken in the Agreement.
Each Person who acquires any Class R-II Certificate or interest therein (unless
it shall have acquired such Certificate or interest therein from the Depositor
or an Affiliate thereof or unless it shall have delivered to the Certificate
Registrar the certification of facts and Opinion of Counsel referred to in
clause (ii) of the preceding sentence) shall be required to deliver to the
Certificate Registrar a certification to the effect that: (i) it is neither a
Plan nor any Person who is directly or indirectly purchasing such Class R-II
Certificate or interest therein on behalf of, as named fiduciary of, as trustee
of, or with assets of a Plan; or (ii) the purchase and holding of such
Certificate or interest therein by such person is exempt from the prohibited
transaction provisions of Section 406 of ERISA and Section 4975 of the Code
under Section I and II of Prohibited Transaction Class Exemption 95- 60.
Each Person who has or who acquires any Ownership Interest in this
Certificate shall be deemed by the acceptance or acquisition of such Ownership
Interest to have agreed to be bound by the provisions of Section 3.3(e) of the
Agreement and, if any purported Transferee shall become a Holder of this
Certificate in violation of the provisions of such Section 3.3(e), to have
irrevocably authorized the Trustee under clause (ii)(A) of such Section 3.3(e)
to deliver payments to a Person other than such Person and to have irrevocably
authorized the Trustee under clause (ii)(B) of such Section 3.3(e) to negotiate
the terms of any mandatory sale and to execute all instruments of Transfer and
to do all other things necessary in connection with any such sale. Each Person
holding or acquiring any Ownership Interest in this Certificate must be a
Permitted Transferee and a United States Person and shall promptly notify the
Trustee of any change or impending change in its status as a Permitted
Transferee or United States Person. In connection with any proposed Transfer of
any Ownership Interest in this Certificate, the Trustee shall require delivery
to it, and shall not register the Transfer of this Certificate until its receipt
of, an affidavit and agreement substantially in the
A-19-4
<PAGE>
form attached as Exhibit E-1 to the Agreement (a "Transfer Affidavit and
Agreement") from the proposed Transferee, in form and substance satisfactory to
the Trustee, representing and warranting, among other things, that such
Transferee is a Permitted Transferee and a United States Person, that it is not
acquiring its Ownership Interest in this Certificate as a nominee, trustee or
agent for any Person that is not a Permitted Transferee or is not a United
States Person, that for so long as it retains its Ownership Interest in this
Certificate, it will endeavor to remain a Permitted Transferee and a United
States Person, and that it has reviewed the provisions of Section 3.3 of the
Agreement and agrees to be bound by them. Notwithstanding the delivery of a
Transfer Affidavit and Agreement by a proposed Transferee, if the Trustee has
actual knowledge that the proposed Transferee is not a Permitted Transferee or
is not a United States Person, the Trustee shall not register the Transfer of an
Ownership Interest in this Certificate to such proposed Transferee.
Each Person holding or acquiring any Ownership Interest in this Certificate
shall agree (x) to require a Transfer Affidavit and Agreement from any
prospective Transferee to whom such Person attempts to transfer its Ownership
Interest herein and (y) not to transfer its Ownership Interest unless it
provides to the Trustee a certificate substantially in the form attached as
Exhibit E-2 to the Agreement stating that, among other things, it has no actual
knowledge that such prospective Transferee is not a Permitted Transferee or is
not a United States Person. Each Person holding or acquiring an Ownership
Interest in this Certificate, by purchasing such Ownership Interest herein,
agrees to give the Trustee written notice that it is a "pass-through interest
holder" within the meaning of temporary Treasury regulation Section
1.67-3T(a)(2)(i)(A) immediately upon acquiring such Ownership Interest, if it
is, or is holding such Ownership Interest on behalf of, a "pass-through interest
holder".
The provisions of Section 3.3 of the Agreement may be modified, added to or
eliminated, provided that there shall have been delivered to the Trustee the
following: (a) written notification from each Rating Agency to the effect that
the modification of, addition to or elimination of such provisions will not
cause such Rating Agency to withdraw, qualify or downgrade its then-current
rating of any Class of Certificates; and (b) an Opinion of Counsel, in form and
substance satisfactory to the Trustee and the Depositor, to the effect that such
modification of, addition to or elimination of such provisions will not cause
any of REMIC I, REMIC II or REMIC III to (x) cease to qualify as a REMIC or (y)
be subject to an entity-level tax caused by the Transfer of any Class R-II
Certificate to a Person which is not a Permitted Transferee, or cause a Person
other than the prospective Transferee to be subject to a REMIC-related tax
caused by the Transfer of a Class R-II Certificate to a Person which is not a
Permitted Transferee.
A "Permitted Transferee" is any Transferee other than (i) the United
States, any State or political subdivision thereof, any possession of the United
States, or any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax and, except for FHLMC, a majority of its board of directors is not selected
by such governmental unit), (ii) a foreign government, any international
organization, or any agency or instrumentality of any of the foregoing, (iii)
any organization (other than certain farmers' cooperatives described in Section
521 of the Code) which is exempt from the tax imposed by Chapter 1 of the Code
(including the tax imposed by Section 511 of the Code on unrelated business
taxable income), (iv) rural electric and telephone cooperatives described in
Section 1381(a)(2)(C) of the Code and (v) any other Person so designated by the
Trustee based upon an Opinion of Counsel that the holding of an Ownership
Interest in a Class R-II Certificate by such Person may cause the Trust
A-19-5
<PAGE>
Fund or any Person having an Ownership Interest in any Class of Certificates
(other than such Person) to incur a liability for any federal tax imposed under
the Code that would not otherwise be imposed but for the Transfer of an
Ownership Interest in a Class R-II Certificate to such Person. The terms "United
States", "State" and "international organization" shall have the meanings set
forth in Section 7701 of the Code or successor provisions.
A "United States Person" is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States is includable in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.
No service charge will be imposed for any registration of transfer or
exchange of Class R-II Certificates, but the Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any transfer or
exchange of Class R-II Certificates.
Prior to due presentment of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar and any agents 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 or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Operating Advisor, the Special Servicer, the Depositor, the Master Servicer or
the Holders of the Residual Certificates representing a majority Percentage
Interest in the Class R-II Interests, at a price determined as provided in the
Agreement, of all Mortgage Loans and any REO Properties remaining in the Trust
Fund. The Agreement permits, but does not require, the Operating Advisor, the
Special Servicer, the Depositor, the Master Servicer or such Holders to purchase
from the Trust Fund all Mortgage Loans and any REO Properties remaining therein
at such time as the aggregate Stated Principal Balance of the REMIC Mortgage
Pool is less than 5% of the aggregate Cut-off Date Principal Balance of the
REMIC Mortgage Pool specified on the face hereof. The exercise of such right
will effect early retirement of the Certificates.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee thereunder
and the rights of the Certificateholders thereunder, at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain circumstances,
A-19-6
<PAGE>
including any amendment necessary to maintain the status of REMIC I, REMIC II or
REMIC III as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York applicable to agreements made and to be performed in said
State, and the obligations, rights and remedies of the Holder hereof shall be
determined in accordance with such laws.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
State Street Bank and Trust Company,
as Trustee
By:_________________________________
Authorized Officer
A-19-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-II Certificates referred to in the
within-mentioned Agreement.
Dated:
State Street Bank and Trust Company,
as Certificate Registrar
By:_________________________________
Authorized Officer
A-19-8
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Aetna Commercial Mortgage Trust Multiclass Pass-Through Certificate and hereby
authorize(s) the registration of transfer of such interest to the above named
assignee on the Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate of a like Percentage Interest and Class to
the above named assignee and delivery of such Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:___________
--------------------------------------
Signature by or on behalf of Assignor
--------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or otherwise,
in immediately available funds, to______________________________________________
for the account of_____________________________________________________________.
Distributions made by check (such check to be made payable to
_______________) and all applicable statements and notices should be mailed to
_______________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________, as its agent.
A-19-9
<PAGE>
EXHIBIT A-20
FORM OF CLASS R-III CERTIFICATE
CLASS R-III AETNA COMMERCIAL MORTGAGE TRUST MULTICLASS
PASS-THROUGH CERTIFICATE,
SERIES 1997-ALIC
evidencing a beneficial ownership interest in the REMIC Pool included in a trust
fund (the "Trust Fund") consisting primarily of a pool (the "REMIC Mortgage
Pool") of multifamily and commercial mortgage loans (the "REMIC Mortgage
Loans"), such pool being formed and sold by
MORGAN STANLEY CAPITAL I INC.
Date of Pooling and Servicing Percentage Interest evidenced by
Agreement: December 1, 1997 this Certificate in the related Class: ____%
Cut-off Date: December 1, 1997 Aggregate unpaid principal balance of the
Issue Date: December 30, 1997 REMIC Mortgage Pool as of the Cut-off Date,
after deducting payments of principal due on
or before such date, whether or not
received: $802,696,189
First Distribution Date:
January 15, 1998
Master Servicer: Midland Loan Services, L.P.
Trustee: State Street Bank and Trust
Company
Special Servicer: Aetna Life Insurance Company
Certificate No. R-III-__
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MORGAN
STANLEY CAPITAL I INC., MIDLAND LOAN SERVICES, L.P., AETNA LIFE INSURANCE
COMPANY, STATE STREET BANK AND TRUST COMPANY OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1A, CLASS A-1B, CLASS A-2, CLASS
IO, CLASS B, CLASS C, CLASS D, CLASS E, CLASS F, CLASS G, CLASS H, CLASS J,
CLASS K AND Class L CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT
PROVIDED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
A-20-1
<PAGE>
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 3.3 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
CONSEQUENTLY, TRANSFER OF THIS CERTIFICATE IS ALSO SUBJECT TO THE ADDITIONAL TAX
RELATED TRANSFER RESTRICTIONS DESCRIBED HEREIN. IF ANY PERSON BECOMES THE
REGISTERED HOLDER OF THIS CERTIFICATE IN VIOLATION OF SUCH TRANSFER
RESTRICTIONS, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER
FOR ANY PURPOSE HEREUNDER OR UNDER THE POOLING AND SERVICING AGREEMENT REFERRED
TO HEREIN, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE.
This certifies that _________________________ is the registered owner of
the Percentage Interest evidenced by this Class R-III Certificate (as specified
above) in that certain beneficial ownership interest evidenced by all the Class
R-III Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), between Morgan Stanley
Capital I Inc., as Depositor, Midland Loan Services, L.P., as Master Servicer,
Aetna Life Insurance Company, as Seller and Special Servicer and State Street
Bank and Trust Company, as Trustee. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
15th day of each month or, if such 15th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
A-20-2
<PAGE>
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class R-III Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on any Class R-III
Certificate will be made by the Trustee by check mailed to the address of the
Person entitled thereto, as such name and address appear in the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
offices of the Certificate Registrar appointed as provided in the Agreement or
such other location as may be specified in such notice.
The Depositor's Aetna Mortgage Trust Multiclass Pass-Through Certificates,
Series 1997-ALIC (the "Certificates") are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than, and, in certain cases,
prior to, distributions to Certificateholders, such purposes including the
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans and the payment of interest on such advances and expenses.
The Class R-III Certificates are issuable in fully registered form only
without coupons in minimum denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Class R-III Certificates are exchangeable for new
Class R-III Certificates in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class R-III Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No transfer, sale, pledge or other disposition of any Class R-III
Certificate or interest therein shall be made unless that transfer, sale, pledge
or other disposition is exempt from the registration and/or qualification
requirements of the Securities Act and any applicable state securities laws, or
is otherwise made in accordance with the Securities Act and such state
securities laws. If a transfer of any Class R-III Certificate is to be made
without registration under the Securities Act (other than in connection with the
initial issuance of the Certificates or a transfer of such Class R-III
Certificate by the Depositor or any of its Affiliates), then the Certificate
Registrar shall refuse to register such transfer unless it receives (and upon
receipt, may conclusively rely upon) either: (i) a certificate from the
Certificateholder desiring to effect such transfer substantially in the form
attached to the Agreement as Exhibit D-1 and a certificate from such
Certificateholder's prospective transferee substantially in the form attached to
the Agreement either as Exhibit D-2A or as Exhibit D-2B; or (ii) an Opinion of
Counsel satisfactory to the Trustee to the effect that such transfer may be made
without registration under the Securities Act (which Opinion of Counsel shall
not be an expense of the Trust Fund or of the Depositor, the Master Servicer,
the Special Servicer, the Trustee or the Certificate Registrar in their
respective capacities as such), together with the written
A-20-3
<PAGE>
certification(s) as to the facts surrounding such transfer on which such Opinion
of Counsel is based. None of the Depositor, the Trustee or the Certificate
Registrar is obligated to register or qualify any Class R-III Certificates under
the Securities Act or any other securities law or to take any action not
otherwise required under this Agreement to permit the transfer of any Class
R-III Certificate or interest therein without registration or qualification. Any
Certificateholder or Certificate Owner desiring to effect a transfer of Class
R-III Certificates or interests therein shall, and does hereby agree to,
indemnify, the Depositor, the Underwriter, the Trustee, the Master Servicer, the
Special Servicer and the Certificate Registrar against any liability that may
result if the transfer is not exempt from such registration or qualification or
is not made in accordance with such federal and state laws.
No transfer of a Class R-III Certificate or any interest therein shall be
made (A) to any employee benefit plan or other retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds and separate accounts in which such plans, accounts or
arrangements are invested, including, without limitation, insurance company
general accounts, that is subject to ERISA or the Code (each, a "Plan"), or (B)
to any Person who is directly or indirectly purchasing such Certificate or
interest therein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, unless: (i) the purchase and holding of such Certificate or
interest therein is exempt from the prohibited transaction provisions of Section
406 of ERISA and Section 4975 of the Code under Section I and III of Prohibited
Transaction Class Exemption 95-60; or (ii) the prospective Transferee provides
the Certificate Registrar with a certification of facts and an Opinion of
Counsel which establish to the satisfaction of the Trustee that such transfer
will not result in a violation of Section 406 of ERISA or Section 4975 of the
Code or result in the imposition of an excise tax under Section 4975 of the Code
or subject the Depositor, the Trustee, the Master Servicer or the Special
Servicer to any obligation in addition to those undertaken in the Agreement.
Each Person who acquires any Class R-III Certificate or interest therein (unless
it shall have acquired such Certificate or interest therein from the Depositor
or an Affiliate thereof or unless it shall have delivered to the Certificate
Registrar the certification of facts and Opinion of Counsel referred to in
clause (ii) of the preceding sentence) shall be required to deliver to the
Certificate Registrar a certification to the effect that: (i) it is neither a
Plan nor any Person who is directly or indirectly purchasing such Class R-III
Certificate or interest therein on behalf of, as named fiduciary of, as trustee
of, or with assets of a Plan; or (ii) the purchase and holding of such
Certificate or interest therein by such person is exempt from the prohibited
transaction provisions of Section 406 of ERISA and Section 4975 of the Code
under Section I and II of Prohibited Transaction Class Exemption 95-60.
Each Person who has or who acquires any Ownership Interest in this
Certificate shall be deemed by the acceptance or acquisition of such Ownership
Interest to have agreed to be bound by the provisions of Section 3.3(e) of the
Agreement and, if any purported Transferee shall become a Holder of this
Certificate in violation of the provisions of such Section 3.3(e), to have
irrevocably authorized the Trustee under clause (ii)(A) of such Section 3.3(e)
to deliver payments to a Person other than such Person and to have irrevocably
authorized the Trustee under clause (ii)(B) of such Section 3.3(e) to negotiate
the terms of any mandatory sale and to execute all instruments of Transfer and
to do all other things necessary in connection with any such sale. Each Person
holding or acquiring any Ownership Interest in this Certificate must be a
Permitted Transferee and a United States Person and shall promptly notify the
Trustee of any change or impending change in its status as a Permitted
Transferee or United States Person. In connection with any proposed Transfer of
any Ownership Interest in this Certificate, the Trustee shall require delivery
to it, and shall not register the Transfer of this Certificate until its receipt
of, an affidavit and agreement substantially in the
A-20-4
<PAGE>
form attached as Exhibit E-1 to the Agreement (a "Transfer Affidavit and
Agreement") from the proposed Transferee, in form and substance satisfactory to
the Trustee, representing and warranting, among other things, that such
Transferee is a Permitted Transferee and a United States Person, that it is not
acquiring its Ownership Interest in this Certificate as a nominee, trustee or
agent for any Person that is not a Permitted Transferee or is not a United
States Person, that for so long as it retains its Ownership Interest in this
Certificate, it will endeavor to remain a Permitted Transferee and a United
States Person, and that it has reviewed the provisions of Section 3.3 of the
Agreement and agrees to be bound by them. Notwithstanding the delivery of a
Transfer Affidavit and Agreement by a proposed Transferee, if the Trustee has
actual knowledge that the proposed Transferee is not a Permitted Transferee or
is not a United States Person, the Trustee shall not register the Transfer of an
Ownership Interest in this Certificate to such proposed Transferee.
Each Person holding or acquiring any Ownership Interest in this Certificate
shall agree (x) to require a Transfer Affidavit and Agreement from any
prospective Transferee to whom such Person attempts to transfer its Ownership
Interest herein and (y) not to transfer its Ownership Interest unless it
provides to the Trustee a certificate substantially in the form attached as
Exhibit E-2 to the Agreement stating that, among other things, it has no actual
knowledge that such prospective Transferee is not a Permitted Transferee or is
not a United States Person. Each Person holding or acquiring an Ownership
Interest in this Certificate, by purchasing such Ownership Interest herein,
agrees to give the Trustee written notice that it is a "pass-through interest
holder" within the meaning of temporary Treasury regulation Section
1.67-3T(a)(2)(i)(A) immediately upon acquiring such Ownership Interest, if it
is, or is holding such Ownership Interest on behalf of, a "pass-through interest
holder".
The provisions of Section 3.3 of the Agreement may be modified, added to or
eliminated, provided that there shall have been delivered to the Trustee the
following: (a) written notification from each Rating Agency to the effect that
the modification of, addition to or elimination of such provisions will not
cause such Rating Agency to withdraw, qualify or downgrade its then-current
rating of any Class of Certificates; and (b) an Opinion of Counsel, in form and
substance satisfactory to the Trustee and the Depositor, to the effect that such
modification of, addition to or elimination of such provisions will not cause
any of REMIC I, REMIC II or REMIC III to (x) cease to qualify as a REMIC or (y)
be subject to an entity-level tax caused by the Transfer of any Class R-III
Certificate to a Person which is not a Permitted Transferee, or cause a Person
other than the prospective Transferee to be subject to a REMIC-related tax
caused by the Transfer of a Class R-III Certificate to a Person which is not a
Permitted Transferee.
A "Permitted Transferee" is any Transferee other than (i) the United
States, any State or political subdivision thereof, any possession of the United
States, or any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax and, except for FHLMC, a majority of its board of directors is not selected
by such governmental unit), (ii) a foreign government, any international
organization, or any agency or instrumentality of any of the foregoing, (iii)
any organization (other than certain farmers' cooperatives described in Section
521 of the Code) which is exempt from the tax imposed by Chapter 1 of the Code
(including the tax imposed by Section 511 of the Code on unrelated business
taxable income), (iv) rural electric and telephone cooperatives described in
Section 1381(a)(2)(C) of the Code and (v) any other Person so designated by the
Trustee based upon an Opinion of Counsel that the holding of an Ownership
Interest in a Class R-III Certificate by such Person may cause the Trust
A-20-5
<PAGE>
Fund or any Person having an Ownership Interest in any Class of Certificates
(other than such Person) to incur a liability for any federal tax imposed under
the Code that would not otherwise be imposed but for the Transfer of an
Ownership Interest in a Class R-III Certificate to such Person. The terms
"United States", "State" and "international organization" shall have the
meanings set forth in Section 7701 of the Code or successor provisions.
A "United States Person" is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States is includable in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.
No service charge will be imposed for any registration of transfer or
exchange of Class R-III Certificates, but the Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any transfer or
exchange of Class R-III Certificates.
Prior to due presentment of this Certificate for registration of transfer,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar and any agents 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 or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Operating Advisor, the Special Servicer, the Depositor, the Master Servicer or
the Holders of the Residual Certificates representing a majority Percentage
Interest in the Class R-III Interests, at a price determined as provided in the
Agreement, of all Mortgage Loans and any REO Properties remaining in the Trust
Fund. The Agreement permits, but does not require, the Operating Advisor, the
Special Servicer, the Depositor, the Master Servicer or such Holders to purchase
from the Trust Fund all Mortgage Loans and any REO Properties remaining therein
at such time as the aggregate Stated Principal Balance of the REMIC Mortgage
Pool is less than 5% of the aggregate Cut-off Date Principal Balance of the
REMIC Mortgage Pool specified on the face hereof. The exercise of such right
will effect early retirement of the Certificates.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee thereunder
and the rights of the Certificateholders thereunder, at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain circumstances,
A-20-6
<PAGE>
including any amendment necessary to maintain the status of REMIC I, REMIC II or
REMIC III as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York applicable to agreements made and to be performed in said
State, and the obligations, rights and remedies of the Holder hereof shall be
determined in accordance with such laws.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
State Street Bank and Trust Company,
as Trustee
By:_________________________________
Authorized Officer
A-20-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-III Certificates referred to in the
within-mentioned Agreement.
Dated:
State Street Bank and Trust Company,
as Certificate Registrar
By:_________________________________
Authorized Officer
A-20-8
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Aetna Commercial Mortgage Trust Multiclass Pass-Through Certificate and hereby
authorize(s) the registration of transfer of such interest to the above named
assignee on the Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate of a like Percentage Interest and Class to
the above named assignee and delivery of such Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:___________
--------------------------------------
Signature by or on behalf of Assignor
--------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or otherwise,
in immediately available funds, to______________________________________________
for the account of_____________________________________________________________.
Distributions made by check (such check to be made payable to
_______________) and all applicable statements and notices should be mailed to
_______________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________, as its agent.
A-20-9
<PAGE>
EXHIBIT B-1
FORM OF INITIAL CERTIFICATION OF TRUSTEE
December, 1997
Morgan Stanley Capital I Inc.
1585 Broadway, 37th Floor
New York, New York 10036
Re: Pooling and Servicing Agreement ("Pooling and Servicing Agreement")
relating to Morgan Stanley Capital I Inc., Aetna Commercial Mortgage
Trust Multiclass Pass-Through Certificates, Series 1997-ALIC
Ladies and Gentlemen:
In accordance with the provisions of Section 2.2 of the Pooling and
Servicing Agreement, the undersigned hereby certifies that, with respect to each
Mortgage Loan listed in the Mortgage Loan Schedule and subject to the exceptions
noted in the schedule of exceptions attached hereto, that: (a) all documents
specified in clause (i) of the definition of "Mortgage File" are in its
possession, (b) such documents have been reviewed by it and have not been
materially mutilated, damaged, defaced, torn or otherwise physically altered,
and such documents relate to such Mortgage Loan, (c) based on its examination
and only as to the foregoing documents, the loan number and the name of the
borrower set forth in the Mortgage Loan Schedule respecting such Mortgage Loan
accurately reflects the information contained in such documents, and (d) each
Mortgage Note has been endorsed as provided in clause (i) of the definition of
"Mortgage File". The Trustee makes no representations as to: (i) the validity,
legality, sufficiency, enforceability or genuineness of any such documents
contained in each Mortgage File or any of the Mortgage Loans identified in the
Mortgage Loan Schedule, or (ii) the collectibility, insurability, effectiveness
or suitability of any such Mortgage Loan.
The Trustee acknowledges receipt of notice that the Depositor has granted
to the Trustee for the benefit of the Certificateholders a security interest in
all of the Depositor's right, title and interest in and to the Mortgage Loans.
Capitalized words and phrases used herein and not otherwise defined herein
shall have the respective meanings assigned to them in the Pooling and Servicing
Agreement. This Certificate is subject in all respects to the terms of said
Pooling and Servicing Agreement.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:____________________________
Name:
Title:
B-1-1
<PAGE>
EXHIBIT B-2
FORM OF FINAL CERTIFICATION OF TRUSTEE
__________, 1997
Morgan Stanley Capital I Inc.
1585 Broadway, 37th Floor
New York, New York 10036
Re: Pooling and Servicing Agreement ("Pooling and Servicing Agreement")
relating to Morgan Stanley Capital I Inc., Aetna Commercial Mortgage
Trust Multiclass Pass-Through Certificates, Series 1997-ALIC
Ladies and Gentlemen:
In accordance with the provisions of Section 2.2 of the Pooling and
Servicing Agreement, the undersigned hereby certifies that, with respect to each
Mortgage Loan listed in the Mortgage Loan Schedule and subject to the exceptions
noted in the schedule of exceptions attached hereto, that: (a) all documents
required to be included in the Mortgage File pursuant to clauses (i), (ii),
(iii), (ix), (xi), (xii) (to the extent it relates to the foregoing) and (xiii)
(in the case of the Mortgage Loans secured by the Koll Center Loan, the UCLA
Loan, the Charles Hotel Loan, the Crown Plaza Loan and the Crystal Square Loan)
of the definition of "Mortgage File" are in its possession, (b) such documents
have been reviewed by it and have not been materially mutilated, damaged,
defaced, torn or otherwise physically altered, and such documents relate to such
Mortgage Loan, (c) based on its examination and only as to the foregoing
documents, the loan number, the street address of the Mortgaged Property and the
name of the borrower set forth in the Mortgage Loan Schedule respecting such
Mortgage Loan accurately reflects the information contained in the documents in
the Mortgage File, and (d) each Mortgage Note has been endorsed and each
Assignment of Mortgage has been delivered as provided in the definition of
"Mortgage File". The Trustee makes no representations as to: (i) the validity,
legality, sufficiency, enforceability or genuineness of any of the documents
contained in each Mortgage File or any of the Mortgage Loans identified in the
Mortgage Loan Schedule, or (ii) the collectibility, insurability, effectiveness
or suitability of any such Mortgage Loan.
The Trustee acknowledges receipt of notice that the Depositor has granted
to the Trustee for the benefit of the Certificateholders a security interest in
all of the Depositor's right, title and interest in and to the Mortgage Loans.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement. This
Certificate is qualified in all respects by the terms of said Pooling and
Servicing Agreement including but not limited to Section 2.2.
B-2-1
<PAGE>
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:_____________________________________
Name:
Title:
B-2-2
<PAGE>
EXHIBIT C
FORM OF REQUEST FOR RELEASE
To: State Street Bank and Trust Company, Trustee
2 International Place, 5th Floor
Boston, Massachusetts 02110
Attn: ___________________________
Re: Morgan Stanley Capital I Inc., Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificates, Series 1997-ALIC
Date:__________
In connection with the administration of the Mortgage Loans held by you as
Trustee under the Pooling and Servicing Agreement dated as of December 1, 1997
by and among Morgan Stanley Capital I Inc., as Depositor, Midland Loan Services,
L.P., as Master Servicer, Aetna Life Insurance Company, as Seller and Special
Servicer and State Street Bank and Trust Company, as Trustee, (the "Pooling and
Servicing Agreement"), the undersigned hereby requests a release of the Mortgage
File held by you as Trustee with respect to the following described Mortgage
Loan for the reason indicated below.
Mortgagor's Name:
Address:
Loan No.:
Reason for requesting file:
_____ 1. Mortgage Loan paid in full.
(The [Master] [Special] Servicer hereby certifies that all amounts
received in connection with the Mortgage Loan have been or will be,
following the [Master] [Special] Servicer's release of the Mortgage
File, credited to the Collection Account or the Distribution Account
pursuant to the Pooling and Servicing Agreement.)
_____ 2. Mortgage Loan repurchased.
(The [Master] [Special] Servicer hereby certifies that the Purchase
Price has been credited to the Distribution Account pursuant to the
Pooling and Servicing Agreement.)
_____ 3. Mortgage Loan substituted.
(The [Master] [Special] Servicer hereby certifies that a Qualifying
Substitute Mortgage Loan has been assigned and delivered to you along
with the related Mortgage File pursuant to the Pooling and Servicing
Agreement.)
_____ 4. The Mortgage Loan is being foreclosed.
C-1
<PAGE>
_____ 5. Other. (Describe)
The undersigned acknowledges that the above Mortgage File will be held by
the undersigned in accordance with the provisions of the Pooling and Servicing
Agreement and will be returned to you, except if the Mortgage Loan has been paid
in full, repurchased or substituted for by a Qualifying Substitute Mortgage Loan
(in which case the Mortgage File will be retained by us permanently), when no
longer required by us for such purpose).
Capitalized terms used herein shall have the meanings ascribed to them in
the Pooling and Servicing Agreement.
[Name of [Master] [Special] Servicer]
By:
Name:
Title:
C-2
<PAGE>
EXHIBIT D-1
FORM OF TRANSFEROR CERTIFICATE FOR
TRANSFERS OF DEFINITIVE PRIVATELY OFFERED CERTIFICATES
[Date]
[CERTIFICATE REGISTRAR]
Re: Morgan Stanley Capital I Inc., Aetna Commercial Mortgage Trust
Multiclass Pass- Through Certificates, Series 1997-ALIC (the
"Certificates")
Dear Sirs:
This letter is delivered to you in connection with the transfer by
_________________ (the "Transferor") to _________________ (the "Transferee") of
[Class ___ Certificates having an initial principal balance as of December __,
1997 (the "Closing Date") of $__________][evidencing a ____% Percentage Interest
in the related Class] (the "Transferred Certificates"). The Transferred
Certificates were issued pursuant to the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement"), dated as of December 1, 1997, among Morgan
Stanley Capital I Inc. as depositor (the "Depositor"), Midland Loan Services,
L.P. as master servicer, Aetna Life Insurance Company as special servicer and
State Street Bank and Trust Company as trustee. All terms used herein and not
otherwise defined shall have the meanings set forth in the Pooling and Servicing
Agreement. The Transferor hereby certifies, represents and warrants to you, as
Certificate Registrar, that:
1. The Transferor is the lawful owner of the Transferred Certificates
with the full right to transfer such Certificates free from any and all
claims and encumbrances whatsoever.
2. Neither the Transferor nor anyone acting on its behalf has (a)
offered, transferred, pledged, sold or otherwise disposed of any
Transferred Certificate, any interest in any Certificate or any other
similar security to any person in any manner, (b) solicited any offer to
buy or accept a transfer, pledge or other disposition of any Transferred
Certificate, any interest in any Transferred Certificate or any other
similar security from any person in any manner, (c) otherwise approached or
negotiated with respect to any Transferred Certificate, any interest in any
Transferred Certificate or any other similar security with any person in
any manner, (d) made any general solicitation by means of general
advertising or in any other manner, or (e) taken any other action, which
(in the case of any of the acts described in clauses (a) through (e)
hereof) would constitute a distribution of any Transferred Certificate
under the Securities Act of 1933, as amended (the "Securities Act"), or
would render the disposition of any Transferred Certificate a violation of
Section 5 of the Securities Act or any state securities laws, or would
require registration or qualification of any Transferred Certificate
pursuant to the Securities Act or any state securities laws.
D-1-1
<PAGE>
Very truly yours,
-----------------------------------------
(Transferor)
By:______________________________________
Name:____________________________________
Title:___________________________________
D-1-2
<PAGE>
EXHIBIT D-2A
FORM I OF TRANSFEREE CERTIFICATE
FOR TRANSFERS OF DEFINITIVE
PRIVATELY OFFERED CERTIFICATES
[Date]
[CERTIFICATE REGISTRAR]
Re: Morgan Stanley Capital I Inc., Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificates, Series 1997-ALIC (the
"Certificates")
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
_________________ (the "Transferor") to _________________ (the "Transferee") of
Class ______ Certificates [having an initial Certificate Principal Balance as of
December __, 1997 (the "Closing Date") of [$__________] [evidencing a ____%
Percentage Interest in the related Class] (the "Transferred Certificates"). The
Certificates, including the Transferred Certificates, were issued pursuant to
the Pooling and Servicing Agreement, dated as of December 1, 1997 (the "Pooling
and Servicing Agreement"), among Morgan Stanley Capital I Inc. as depositor (the
"Depositor"), Midland Loan Services, L.P. as master servicer, Aetna Life
Insurance Company, as special servicer and State Street Bank and Trust Company
as trustee. All capitalized terms used but not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing Agreement.
The Transferee hereby certifies, represents and warrants to you, as Certificate
Registrar, that:
1. The Transferee is a "qualified institutional buyer" (a "Qualified
Institutional Buyer") as that term is defined in Rule 144A ("Rule 144A")
under the Securities Act of 1933, as amended (the "Securities Act") and has
completed one of the forms of certification to that effect attached hereto
as Annex 1 and Annex 2. The Transferee is aware that the sale to it of the
Transferred Certificates is being made in reliance on Rule 144A. The
Transferee is acquiring the Transferred Certificates for its own account or
for the account of a Qualified Institutional Buyer, and understands that
such Transferred Certificates may be resold, pledged or transferred only
(i) to a person reasonably believed to be a Qualified Institutional Buyer
that purchases for its own account or for the account of a Qualified
Institutional Buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to
another exemption from registration under the Securities Act.
2. The Transferee has been furnished with all information regarding
(a) the Transferred Certificates and distributions thereon, (b) the nature,
performance and servicing of the Mortgage Loans, (c) the Pooling and
Servicing Agreement and the Trust Fund created pursuant thereto and (d) all
related matters that it has requested.
D-2A-1
<PAGE>
Very truly yours,
(Transferee)
By:
Name:
Title:
D-2A-2
<PAGE>
ANNEX 1 TO EXHIBIT D-2A
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[for Transferees other than Registered Investment Companies]
The undersigned hereby certifies as follows to [name of Transferor] (the
"Transferor") and [name of Certificate Registrar], as Certificate Registrar,
with respect to the Aetna commercial mortgage trust multiclass pass-through
certificates being transferred (the "Transferred Certificates") as described in
the Transferee Certificate to which this certification relates and to which this
certification is an Annex:
1. As indicated below, the undersigned is the chief financial officer, a
person fulfilling an equivalent function, or other executive officer of the
entity purchasing the Transferred Certificates (the "Transferee").
2. The Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act of 1933, as amended ("Rule 144A")
because (i) the Transferee owned and/or invested on a discretionary basis
$______________________(1) in securities (other than the excluded securities
referred to below) as of the end of the Transferee's most recent fiscal year
(such amount being calculated in accordance with Rule 144A) and (ii) the
Transferee satisfies the criteria in the category marked below.
___ Corporation, etc. The Transferee is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or any
organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986.
___ Bank. The Transferee (a) is a national bank or a banking
institution organized under the laws of any State, U.S. territory
or the District of Columbia, the business of which is
substantially confined to banking and is supervised by the State
or territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its latest
annual financial statements, a copy of which is attached hereto,
as of a date not more than 16 months preceding the date of sale
of the Certificate in the case of a U.S. bank, and not more than
18 months preceding such date of sale for a foreign bank or
equivalent institution.
___ Savings and Loan. The Transferee (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is supervised
and examined by a State or Federal authority having supervision
over any such institutions or is a foreign savings and loan
association or equivalent institution and (b) has an audited net
worth of at least $25,000,000 as demonstrated in its latest
annual financial statements, a copy of which is attached hereto,
as of a date not more than 16 months preceding the date of sale
of the Certificate in the case
- -------------------
1. Transferee must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Transferee is a dealer, and, in that
case, Transferee must own and/or invest on a discretionary basis at least
$10,000,000 in securities.
1
<PAGE>
of a U.S. savings and loan association, and not more than 18
months preceding such date of sale for a foreign savings and loan
association or equivalent institution.
___ Broker-dealer. The Transferee is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934, as amended.
___ Insurance Company. The Transferee is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State, U.S.
territory or the District of Columbia.
___ State or Local Plan. The Transferee is a plan established and
maintained by a State, its political subdivisions, or any agency
or instrumentality of the State or its political subdivisions,
for the benefit of its employees.
___ ERISA Plan. The Transferee is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act
of 1974.
___ Investment Advisor. The Transferee is an investment advisor
registered under the Investment Advisers Act of 1940, as amended.
___ Other. (Please supply a brief description of the entity and a
cross-reference to the paragraph and subparagraph under
subsection (a)(1) of Rule 144A pursuant to which it qualifies.
Note that registered investment companies should complete Annex 2
rather than this Annex 1.)
3. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Transferee, (ii) securities that are part
of an unsold allotment to or subscription by the Transferee, if the Transferee
is a dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned but subject to
a repurchase agreement and (vii) currency, interest rate and commodity swaps.
For purposes of determining the aggregate amount of securities owned and/or
invested on a discretionary basis by the Transferee, the Transferee did not
include any of the securities referred to in this paragraph.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Transferee, the Transferee used
the cost of such securities to the Transferee, unless the Transferee reports its
securities holdings in its financial statements on the basis of their market
value, and no current information with respect to the cost of those securities
has been published, in which case the securities were valued at market. Further,
in determining such aggregate amount, the Transferee may have included
securities owned by subsidiaries of the Transferee, but only if such
subsidiaries are consolidated with the Transferee in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Transferee's direction.
However, such securities were not included if the Transferee is a
majority-owned, consolidated subsidiary of another enterprise and the Transferee
is not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Transferee acknowledges that it is familiar with Rule 144A and
understands that the Transferor and other parties related to the Transferred
Certificates are relying
2
<PAGE>
and will continue to rely on the statements made herein because one or more
sales to the Transferee may be in reliance on Rule 144A.
___ ___ Will the Transferee be purchasing the Transferred Certificates
Yes No only for the Transferee's own account?
6. If the answer to the foregoing question is "no", then in each case where
the Transferee is purchasing for an account other than its own, such account
belongs to a third party that is itself a "qualified institutional buyer" within
the meaning of Rule 144A, and the "qualified institutional buyer" status of such
third party has been established by the Transferee through one or more of the
appropriate methods contemplated by Rule 144A.
7. The Transferee will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Transferee's purchase of the Transferred
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties any updated annual financial statements that become available on or
before the date of such purchase, promptly after they become available.
Print Name of Transferee
By:
Name:
Title:
Date:
3
<PAGE>
ANNEX 2 TO EXHIBIT D-2A
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[for Transferees that are Registered Investment Companies]
The undersigned hereby certifies as follows to [name of Transferor] (the
"Transferor") and [name of Certificate Registrar], as Certificate Registrar,
with respect to the Aetna commercial mortgage trust multiclass pass-through
certificate being transferred (the "Transferred Certificates") as described in
the Transferee Certificate to which this certification relates and to which this
certification is an Annex:
1. As indicated below, the undersigned is the chief financial officer, a
person fulfilling an equivalent function, or other executive officer of the
entity purchasing the Transferred Certificates (the "Transferee") or, if the
Transferee is a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act of 1933, as amended ("Rule 144A") because the
Transferee is part of a Family of Investment Companies (as defined below), is an
executive officer of the investment adviser (the "Adviser").
2. The Transferee is a "qualified institutional buyer" as defined in Rule
144A because (i) the Transferee is an investment company registered under the
Investment Company Act of 1940, as amended, and (ii) as marked below, the
Transferee alone owned and/or invested on a discretionary basis, or the
Transferee's Family of Investment Companies owned, at least $100,000,000 in
securities (other than the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year. For purposes of determining the
amount of securities owned by the Transferee or the Transferee's Family of
Investment Companies, the cost of such securities was used, unless the
Transferee or any member of the Transferee's Family of Investment Companies, as
the case may be, reports its securities holdings in its financial statements on
the basis of their market value, and no current information with respect to the
cost of those securities has been published, in which case the securities of
such entity were valued at market.
____ The Transferee owned and/or invested on a discretionary basis
$___________________ in securities (other than the excluded
securities referred to below) as of the end of the Transferee's
most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
____ The Transferee is part of a Family of Investment Companies which
owned in the aggregate $______________ in securities (other than
the excluded securities referred to below) as of the end of the
Transferee's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two or
more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Transferee or are part of the Transferee's
Family of Investment Companies, (ii) bank deposit notes and certificates of
deposit, (iii) loan participations, (iv) repurchase
1
<PAGE>
agreements, (v) securities owned but subject to a repurchase agreement and (vi)
currency, interest rate and commodity swaps. For purposes of determining the
aggregate amount of securities owned and/or invested on a discretionary basis by
the Transferee, or owned by the Transferee's Family of Investment Companies, the
securities referred to in this paragraph were excluded.
5. The Transferee is familiar with Rule 144A and understands that the
parties to which this certification is being made are relying and will continue
to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A.
____ ____ Will the Transferee be purchasing the Transferred
Yes No Certificates only for the Transferee's own account?
6. If the answer to the foregoing question is "no", then in each case where
the Transferee is purchasing for an account other than its own, such account
belongs to a third party that is itself a "qualified institutional buyer" within
the meaning of Rule 144A, and the "qualified institutional buyer" status of such
third party has been established by the Transferee through one or more of the
appropriate methods contemplated by Rule 144A.
7. The undersigned will notify the parties to which this certification is
made of any changes in the information and conclusions herein. Until such
notice, the Transferee's purchase of the Transferred Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
Print Name of Transferee or Adviser
By:
Name:
Title:
IF AN ADVISER:
Print Name of Transferee
Date:
2
<PAGE>
EXHIBIT D-2B
FORM II OF TRANSFEREE CERTIFICATE
FOR TRANSFERS OF DEFINITIVE
PRIVATELY OFFERED CERTIFICATES
[Date]
[CERTIFICATE REGISTRAR]
Re: Morgan Stanley Capital I Inc., Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificates, Series 1997-ALIC (the
"Certificates")
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
_______________________ (the "Transferor") to _______________________________
(the "Transferee") of Class ___ Certificates [having an initial Certificate
Principal Balance as of December __, 1997 (the "Closing Date") of
$__________][evidencing a ____% Percentage Interest in the related Class] (the
"Transferred Certificates"). The Certificates, including the Transferred
Certificates, were issued pursuant to the Pooling and Servicing Agreement, dated
as of December 1, 1997 (the "Pooling and Servicing Agreement"), among Morgan
Stanley Capital I Inc., as depositor (the "Depositor"), Midland Loan Services,
L.P., as master servicer, Aetna Life Insurance Company, as special servicer and
State Street Bank and Trust Company, as trustee. All capitalized terms used but
not otherwise defined herein shall have the respective meanings set forth in the
Pooling and Servicing Agreement. The Transferee hereby certifies, represents and
warrants to you, as Certificate Registrar, that:
1. The Transferee is acquiring the Transferred Certificates for its own
account for investment and not with a view to or for sale or transfer in
connection with any distribution thereof, in whole or in part, in any manner
which would violate the Securities Act of 1933, as amended (the "Securities
Act"), or any applicable state securities laws.
2. The Transferee understands that (a) the Class of Certificates to which
the Transferred Certificates belong has not been and will not be registered
under the Securities Act or registered or qualified under any applicable state
securities laws, (b) none of the Depositor, the Trustee or the Certificate
Registrar is obligated so to register or qualify the Class of Certificates to
which the Transferred Certificates belong, and (c) no Transferred Certificate
may be resold or transferred unless it is (i) registered pursuant to the
Securities Act and registered or qualified pursuant any applicable state
securities laws or (ii) sold or transferred in transactions which are exempt
from such registration and qualification and the Certificate Registrar has
received either: (A) a certificate from the Certificateholder desiring to effect
such transfer substantially in the form attached as Exhibit D-1 to the Pooling
and Servicing Agreement and a certificate from such Certificateholder's
prospective transferee substantially in the form attached either as Exhibit D-2A
or as Exhibit D-2B to the Pooling and Servicing Agreement; or (B) an opinion of
counsel satisfactory to the Trustee with respect to the availability of such
exemption from registration under the Securities Act, together with copies of
the written certification(s) from the transferor and/or transferee setting forth
the facts surrounding the transfer upon which such opinion is based.
D-2B-1
<PAGE>
3. The Transferee understands that it may not sell or otherwise transfer
any Transferred Certificate except in compliance with the provisions of Section
3.3 of the Pooling and Servicing Agreement, which provisions it has carefully
reviewed, and that each Transferred Certificate will bear the following legends:
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR
QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR THE SECURITIES LAWS OF ANY STATE. ANY
RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE OR
ANY INTEREST HEREIN WITHOUT SUCH REGISTRATION OR
QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES
NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND WHICH IS
IN ACCORDANCE WITH THE PROVISIONS OF SECTION 3.3 OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN
OR OTHER RETIREMENT ARRANGEMENT THAT IS SUBJECT TO THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986 (THE
"CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY
PURCHASING THIS CERTIFICATE ON BEHALF OF, AS NAMED FIDUCIARY
OF, AS TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE
BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, WILL BE
REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
4. Neither the Transferee nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Transferred Certificate,
any interest in any Transferred Certificate or any other similar security to any
person in any manner, (b) solicited any offer to buy or accept a pledge,
disposition or other transfer of any Transferred Certificate, any interest in
any Transferred Certificate or any other similar security from any person in any
manner, (c) otherwise approached or negotiated with respect to any Transferred
Certificate, any interest in any Certificate or any other similar security with
any person in any manner, (d) made any general solicitation with respect to any
Certificate, any interest in any Transferred Certificate or any other similar
security by means of general advertising or in any other manner, or (e) taken
any other action with respect to any Transferred Certificate, any interest in
any Transferred Certificate or any other similar security, which (in the case of
any of the acts described in clauses (a) through (e) above) would constitute a
distribution of the Transferred Certificates under the Securities Act, would
render the disposition of the Transferred Certificates a violation of Section 5
of the Securities Act or any state securities law or would require registration
or qualification of the Transferred Certificates pursuant thereto. The
Transferee will not act, nor has it authorized or will it authorize any person
to act, in any manner set forth in the foregoing sentence with respect to any
Transferred Certificate, any interest in any Transferred Certificate or any
other similar security.
5. The Transferee has been furnished with all information regarding (a) the
Transferred Certificates and distributions thereon, (b) the Pooling and
Servicing Agreement and the Trust Fund created pursuant thereto, (c) the nature,
performance and servicing of the Mortgage Loans, and (d) all related matters,
that it has requested.
6. The Transferee is an "accredited investor" as defined in any of
paragraphs (1), (2), (3) and (7) of Rule 501(a) under the Securities Act or an
entity in which all of the equity owners
D-2B-2
<PAGE>
come within such paragraphs. The Transferee has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of an investment in the Transferred Certificate; the Transferee has sought
such accounting, legal and tax advice as it has considered necessary to make an
informed investment decision; and the Transferee is able to bear the economic
risks of such investment and can afford a complete loss of such investment.
Very truly yours,
(Transferee)
By:
Name:
Title:
D-2B-3
<PAGE>
EXHIBIT D-3A
FORM I OF TRANSFEREE CERTIFICATE
FOR TRANSFERS OF INTERESTS IN
BOOK-ENTRY PRIVATELY OFFERED CERTIFICATES
[Date]
[TRANSFEROR]
Re: Morgan Stanley Capital I Inc., Aetna Commercial Mortgage Trust
Multiclasss Pass- Through Certificates, Series 1997-ALIC (the
"Certificates")
Dear Sirs:
This letter is delivered to you in connection with the transfer by
_____________________ (the "Transferor") to ______________________ (the
"Transferee") of a Certificate (the "Transferred Certificate") having an initial
principal balance as of December ___, 1997 (the "Closing Date") of $__________.
The Certificates were issued pursuant to the Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement"), dated as of December 1, 1997, among
Morgan Stanley Capital I Inc., as depositor (the "Depositor"), Midland Loan
Services, L.P., as master servicer, Aetna Life Insurance Company, as special
servicer and State Bank and Trust Company, as trustee. All terms used herein and
not otherwise defined shall have the meanings set forth in the Pooling and
Servicing Agreement. The Transferee hereby certifies, represents and warrants to
you, and for the benefit of the Depositor and the Trustee, that:
1. The Transferee is acquiring the Transferred Certificate for its own
account for investment and not with a view to or for sale or transfer in
connection with any distribution thereof, in whole or in part, in any manner
which would violate the Securities Act of 1933, as amended (the "Securities
Act"), or any applicable state securities laws.
2. The Transferee understands that (a) the Certificates have not been and
will not be registered under the Securities Act or registered or qualified under
any applicable state securities laws, (b) none of the Depositor, the Trustee or
the Certificate Registrar is obligated so to register or qualify the
Certificates and (c) no interest in the Certificates may be sold or transferred
unless (i) such Certificates are registered pursuant to the Securities Act and
registered or qualified pursuant to any applicable state securities laws or (ii)
such interest is sold or transferred in transactions that are exempt from such
registration and qualification and the Certificate Owner desiring to effect such
transfer has received either (A) a certification from such Certificate Owner's
prospective transferee (substantially in the form attached to the Pooling and
Servicing Agreement) setting forth the facts surrounding the transfer or (B) an
opinion of counsel satisfactory to the Certificate Registrar with respect to the
availability of such exemption, together with copies of the certification(s)
from the transferor and/or transferee setting forth the facts surrounding the
transfer upon which such opinion is based.
D-3A-1
<PAGE>
3. The Transferee understands that it may not sell or otherwise transfer
any portion of its interest in the Transferred Certificate except in compliance
with the provisions of Section 3.3 of the Pooling and Servicing Agreement, which
provisions it has carefully reviewed, and that the Transferred Certificate will
bear legends substantially to the following effect:
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
OR ANY INTEREST HEREIN WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE
ONLY IN A TRANSACTION WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION
AND IN ACCORDANCE WITH THE PROVISIONS OF SECTION 3.3 OF THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
- AND -
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY
PURCHASING THIS CERTIFICATE ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF,
OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
4. Neither the Transferee nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Certificate, any
interest in any Certificate or any other similar security to any person in any
manner, (b) solicited any offer to buy or accept a pledge, disposition or other
transfer of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate or
any other similar security with any person in any manner, (d) made any general
solicitation by means of general advertising or in any other manner, or (e)
taken any other action, that (in the case of any of the acts described in
clauses (a) through (e) above) would constitute a distribution of any
Certificate under the Securities Act, would render the disposition of any
Certificate a violation of Section 5 of the Securities Act or any state
securities law or would require registration or qualification of any Certificate
pursuant thereto. The Transferee will not act, nor has it authorized or will it
authorize any person to act, in any manner set forth in the foregoing sentence
with respect to any Certificate.
5. The Transferee has been furnished with all information regarding (a) the
Transferred Certificates and distributions thereon, (b) the Pooling and
Servicing Agreement and the Trust Fund created pursuant thereto, (c) the nature,
performance and servicing of the Mortgage Loans, and (d) all related matters,
that it has requested.
6. The Transferee is an institutional "accredited investor" as defined in
Rule 501(a) (1), (2), (3) or (7) under the Securities Act or an entity in which
all of the equity owners come within such paragraphs. The Transferee has such
knowledge and experience in financial and
D-3A-2
<PAGE>
business matters as to be capable of evaluating the merits and risks of an
investment in the Certificates; the Transferee has sought such accounting, legal
and tax advice as it has considered necessary to make an informed investment
decision; and the Transferee is able to bear the economic risks of such an
investment and can afford a complete loss of such investment.
Very truly yours,
(Transferee)
By:
Name:
Title:
D-3A-3
<PAGE>
EXHIBIT D-3B
FORM II OF TRANSFEREE CERTIFICATE
FOR TRANSFERS OF INTERESTS IN
BOOK-ENTRY PRIVATELY OFFERED CERTIFICATES
[Date]
[TRANSFEROR]
Re: Morgan Stanley Capital I Inc., Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificate, Series 1997-ALIC, Class (the
"Certificates")
Dear Sirs:
This letter is delivered to you in connection with the transfer by
_____________ ________ (the "Transferor") to ______________________ (the
"Transferee") of a Certificate (the "Transferred Certificate") having an initial
principal balance as of December ___, 1997 (the "Closing Date") of $__________.
The Certificates were issued pursuant to the Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement"), dated as of December 1, 1997, among
Morgan Stanley Capital I Inc., as depositor (the "Depositor"), Midland Loan
Services, L.P., as master servicer, Aetna Life Insurance Company, as special
servicer and State Street Bank and Trust Company, as trustee. All terms used
herein and not otherwise defined shall have the meanings set forth in the
Pooling and Servicing Agreement. The Transferee hereby certifies, represents and
warrants to you, and for the benefit of the Depositor and the Trustee, that:
1. The Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A ("Rule 144A") under the Securities Act of 1933, as
amended (the "Securities Act"), and has completed one of the forms of
certification to that effect attached hereto as Annex 1 and Annex 2. The
Transferee is aware that the sale to it is being made in reliance on Rule
144A. The Transferee is acquiring the Transferred Certificate for its own
account or for the account of a qualified institutional buyer, and
understands that such Certificate or any interest therein may be resold,
pledged or transferred only (i) to a person reasonably believed to be a
qualified institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, or (ii)
pursuant to another exemption from registration under the Securities Act.
2. The Transferee understands that (a) the Class of Certificates to
which the Transferred Certificate belongs have not been and will not be
registered under the Securities Act or registered or qualified under any
applicable state securities laws, (b) none of the Depositor, the Trustee or
the Certificate Registrar is obligated so to register or qualify the
Certificates and (c) no interest in the Certificates may be sold or
transferred unless (i) such Certificates are registered pursuant to the
Securities Act and registered or qualified pursuant to any applicable state
securities laws or (ii) such interest sold or transferred in transactions
which are exempt from such registration and qualification and the
Certificate Owner desiring
D-3B-1
<PAGE>
to effect such transfer has received either (A) a certification from such
Certificate Owner's prospective transferee (substantially in the form
attached to the Pooling and Servicing Agreement) setting forth the facts
surrounding the transfer or (B) an opinion of counsel satisfactory to the
Certificate Registrar with respect to the availability of such exemption,
together with copies of the certification(s) from the transferor and/or
transferee setting forth the facts surrounding the transfer upon which such
opinion is based.
3. The Transferee understands that it may not sell or otherwise
transfer any portion of its interest in the Transferred Certificate except
in compliance with the provisions of Section 3.3 of the Pooling and
Servicing Agreement, which provisions it has carefully reviewed, and that
the Transferred Certificate will bear legends substantially to the
following effect:
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
OR ANY INTEREST THEREIN WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE
ONLY IN A TRANSACTION WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION
AND IN ACCORDANCE WITH THE PROVISIONS OF SECTION 3.3 OF THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
- AND -
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY
PURCHASING THIS CERTIFICATE ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF,
OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
4. The Transferee has been furnished with all information regarding
(a) the Certificates and distributions thereon, (b) the nature, performance
and servicing of the Mortgage Loans, (c) the Pooling and Servicing
Agreement and the Trust Fund created pursuant thereto, and (d) all related
matters that it has requested.
Very truly yours,
___________________________________
(Transferee)
By:
Name:
Title:
D-3B-2
<PAGE>
ANNEX 1 TO EXHIBIT D-3B
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned hereby certifies as follows to [name of Transferor] (the
"Transferor"), and for the benefit of the Depositor and the Trustee, as
Certificate Registrar, with respect to the Aetna commercial mortgage trust
multiclass pass-through certificate being transferred (the "Transferred
Certificate") as described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the chief financial officer, a
person fulfilling an equivalent function, or other executive officer of the
entity purchasing the Transferred Certificate (the "Transferee").
2. The Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act of 1933, as amended ("Rule 144A"),
because (i) the Transferee owned and/or invested on a discretionary basis
$______________________(2) in securities (other than the excluded securities
referred to below) as of the end of the Transferee's most recent fiscal year
(such amount being calculated in accordance with Rule 144A) and (ii) the
Transferee satisfies the criteria in the category marked below.
___ Corporation, etc. The Transferee is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or any
organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended.
___ Bank. The Transferee (a) is a national bank or a banking
institution organized under the laws of any State, U.S. territory
or the District of Columbia, the business of which is
substantially confined to banking and is supervised by the State
or territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its latest
annual financial statements, a copy of which is attached hereto,
as of a date not more than 16 months preceding the date of sale
of the Certificate in the case of a U.S. bank, and not more than
18 months preceding such date of sale for a foreign bank or
equivalent institution.
___ Savings and Loan. The Transferee (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is supervised
and examined by a State or Federal authority having supervision
over any such institutions or is a foreign savings and loan
association or equivalent institution and (b) has an audited net
worth of at least $25,000,000 as demonstrated in its latest
annual financial statements, a copy of which is attached hereto,
as of a
- -----------------
2 Transferee must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Transferee is a dealer, and, in that
case, Transferee must own and/or invest on a discretionary basis at least
$10,000,000 in securities.
1
<PAGE>
date not more than 16 months preceding the date of sale of the
Certificate in the case of a U.S. savings and loan association,
and not more than 18 months preceding such date of sale for a
foreign savings and loan association or equivalent institution.
___ Broker-dealer. The Transferee is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934, as amended.
___ Insurance Company. The Transferee is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State, U.S.
territory or the District of Columbia.
___ State or Local Plan. The Transferee is a plan established and
maintained by a State, its political subdivisions, or any agency
or instrumentality of the State or its political subdivisions,
for the benefit of its employees.
___ ERISA Plan. The Transferee is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act
of 1974, as amended.
___ Investment Advisor. The Transferee is an investment advisor
registered under the Investment Advisers Act of 1940, as amended.
___ Other. (Please supply a brief description of the entity and a
cross-reference to the paragraph and subparagraph under
subsection (a)(1) of Rule 144A pursuant to which it qualifies.
Note that registered investment companies should complete Annex 2
rather than this Annex 1.)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
3. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Transferee, (ii) securities that are part
of an unsold allotment to or subscription by the Transferee, if the Transferee
is a dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned but subject to
a repurchase agreement and (vii) currency, interest rate and commodity swaps.
For purposes of determining the aggregate amount of securities owned and/or
invested on a discretionary basis by the Transferee, the Transferee did not
include any of the securities referred to in this paragraph.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Transferee, the Transferee used
the cost of such securities to the Transferee, unless the Transferee reports its
securities holdings in its financial statements on the basis of their market
value, and no current information with respect to the cost of those securities
has been published, in which case the securities were valued at market. Further,
in determining such aggregate amount, the Transferee may have included
securities owned by subsidiaries of the Transferee, but only if such
subsidiaries are consolidated with the Transferee in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Transferee's direction.
However, such securities were not included if the Transferee is a
majority-owned, consolidated subsidiary of another enterprise and the Transferee
is not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
2
<PAGE>
5. The Transferee acknowledges that it is familiar with Rule 144A and
understands that the Transferor and other parties related to the Transferred
Certificate are relying and will continue to rely on the statements made herein
because one or more sales to the Transferee may be in reliance on Rule 144A.
___ ___ Will the Transferee be purchasing the Transferred Certificate
Yes No only for the Transferee's own account?
6. If the answer to the foregoing question is "no", then in each case where
the Transferee is purchasing for an account other than its own, such account
belongs to a third party that is itself a "qualified institutional buyer" within
the meaning of Rule 144A, and the "qualified institutional buyer" status of such
third party has been established by the Transferee through one or more of the
appropriate methods contemplated by Rule 144A.
7. The Transferee will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Transferee's purchase of the Transferred
Certificate will constitute a reaffirmation of this certification as of the date
of such purchase. In addition, if the Transferee is a bank or savings and loan
as provided above, the Transferee agrees that it will furnish to such parties
any updated annual financial statements that become available on or before the
date of such purchase, promptly after they become available.
_________________________________________
Print Name of Transferee
By:______________________________________
Name:____________________________________
Title:___________________________________
Date:____________________________________
3
<PAGE>
ANNEX 2 TO EXHIBIT D-3B
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That Are Registered Investment Companies]
The undersigned hereby certifies as follows to [name of Transferor] (the
"Transferor"), and for the benefit of the Depositor and the Trustee, with
respect to the Aetna commercial mortgage trust multiclass pass-through
certificate being transferred (the "Transferred Certificate") as described in
the Transferee Certificate to which this certification relates and to which this
certification is an Annex:
1. As indicated below, the undersigned is the chief financial officer, a
person fulfilling an equivalent function, or other executive officer of the
entity purchasing the Transferred Certificate (the "Transferee") or, if the
Transferee is a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act of 1933, as amended ("Rule 144A"), because the
Transferee is part of a Family of Investment Companies (as defined below), is an
executive officer of the investment adviser (the "Adviser").
2. The Transferee is a "qualified institutional buyer" as defined in Rule
144A because (i) the Transferee is an investment company registered under the
Investment Company Act of 1940, as amended, and (ii) as marked below, the
Transferee alone owned and/or invested on a discretionary basis, or the
Transferee's Family of Investment Companies owned, at least $100,000,000 in
securities (other than the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year. For purposes of determining the
amount of securities owned by the Transferee or the Transferee's Family of
Investment Companies, the cost of such securities was used, unless the
Transferee or any member of the Transferee's Family of Investment Companies, as
the case may be, reports its securities holdings in its financial statements on
the basis of their market value, and no current information with respect to the
cost of those securities has been published, in which case the securities of
such entity were valued at market.
____ The Transferee owned and/or invested on a discretionary basis
$___________________ in securities (other than the excluded securities
referred to below) as of the end of the Transferee's most recent fiscal
year (such amount being calculated in accordance with Rule 144A).
____ The Transferee is part of a Family of Investment Companies which owned in
the aggregate $______________ in securities (other than the excluded
securities referred to below) as of the end of the Transferee's most recent
fiscal year (such amount being calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two or
more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Transferee or are part of the Transferee's
Family of Investment Companies, (ii) bank deposit notes and certificates of
deposit, (iii) loan participations, (iv) repurchase
1
<PAGE>
agreements, (v) securities owned but subject to a repurchase agreement and (vi)
currency, interest rate and commodity swaps. For purposes of determining the
aggregate amount of securities owned and/or invested on a discretionary basis by
the Transferee, or owned by the Transferee's Family of Investment Companies, the
securities referred to in this paragraph were excluded.
5. The Transferee is familiar with Rule 144A and understands that the
parties to which this certification is being made are relying and will continue
to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A.
____ ____ Will the Transferee be purchasing the Transferred
Yes No Certificate only for the Transferee's own account?
6. If the answer to the foregoing question is "no", then in each case where
the Transferee is purchasing for an account other than its own, such account
belongs to a third party that is itself a "qualified institutional buyer" within
the meaning of Rule 144A, and the "qualified institutional buyer" status of such
third party has been established by the Transferee through one or more of the
appropriate methods contemplated by Rule 144A.
7. The undersigned will notify the parties to which this certification is
made of any changes in the information and conclusions herein. Until such
notice, the Transferee's purchase of the Transferred Certificate will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
_________________________________________
Print Name of Transferee or Adviser
By:______________________________________
Name:____________________________________
Title:___________________________________
IF AN ADVISER:
_________________________________________
Print Name of Transferee
Date:____________________________________
2
<PAGE>
EXHIBIT E-1A
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
FOR TRANSFERS OF REMIC RESIDUAL CERTIFICATES
STATE OF )
) ss:
COUNTY OF )
____________________, being first duly sworn, deposes and says that:
1. He/She is the ____________________ of ____________________ (the
prospective transferee (the "Transferee") of Morgan Stanley Capital I Inc.,
Aetna Commercial Mortgage Trust Multiclass Pass-Through Certificates, Series
1997-ALIC, Class [R] [R-I] [R-II] [R-III], evidencing a ____% Percentage
Interest in such Class (the "Residual Certificates")), a ________________ duly
organized and validly existing under the laws of ____________________, on behalf
of which he/she makes this affidavit. All capitalized terms used but not
otherwise defined herein shall have the respective meanings set forth in the
Pooling and Servicing Agreement pursuant to which the Residual Certificates were
issued (the "Pooling and Servicing Agreement").
2. The Transferee (i) is, and as of the date of transfer will be, a
"Permitted Transferee" and will endeavor to remain a "Permitted Transferee" for
so long as it holds the Residual Certificates, and (ii) is acquiring the
Residual Certificates for its own account or for the account of another
prospective transferee from which it has received an affidavit in substantially
the same form as this affidavit. A "Permitted Transferee" is any Person other
than a "disqualified organization" or a possession of the United States. (For
this purpose, a "disqualified organization" means the United States, any state
or political subdivision thereof, any agency or instrumentality of any of the
foregoing (other than an instrumentality, all of the activities of which are
subject to tax and, except for the Federal Home Loan Mortgage Corporation, a
majority of whose board of directors is not selected by any such governmental
entity) or any foreign government, international organization or any agency or
instrumentality of such foreign government or organization, any rural electric
or telephone cooperative, or any organization (other than certain farmers'
cooperatives) that is generally exempt from federal income tax unless such
organization is subject to the tax on unrelated business taxable income.
3. The Transferee is aware (i) of the tax that would be imposed on
transfers of the Residual Certificates to "disqualified organizations" under the
Code that applies to all transfers of the Residual Certificates; (ii) that such
tax would be on the transferor or, if such transfer is through an agent (which
Person includes a broker, nominee or middleman) for a non-Permitted Transferee,
on the agent; (iii) that the Person otherwise liable for the tax shall be
relieved of liability for the tax if the transferee furnishes to such Person an
affidavit that the transferee is a Permitted Transferee and, at the time of
transfer, such Person does not have actual knowledge that the affidavit is
false; and (iv) that the Residual Certificates may be a "noneconomic residual
interest" within the meaning of Treasury regulation Section 1.860E-1(c) and that
the transferor of a "noneconomic residual interest" will remain liable for any
taxes due with respect to the income on such residual interest, unless no
significant purpose of the transfer is to enable the transferor to impede the
assessment or collection of tax.
E-1A-1
<PAGE>
4. The Transferee is aware of the tax imposed on a "pass-through entity"
holding the Residual Certificates if at any time during the taxable year of the
pass-through entity a non-Permitted Transferee is the record holder of an
interest in such entity. (For this purpose, a "pass-through entity" includes a
regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives.)
5. The Transferee is aware that the Certificate Registrar will not register
any transfer of the Residual Certificates by the Transferee unless the
Transferee's transferee, or such transferee's agent, delivers to the Certificate
Registrar, among other things, an affidavit and agreement in substantially the
same form as this affidavit and agreement. The Transferee expressly agrees that
it will not consummate any such transfer if it knows or believes that any
representation contained in such affidavit and agreement is false.
6. The Transferee consents to any additional restrictions or arrangements
that shall be deemed necessary upon advice of counsel to constitute a reasonable
arrangement to ensure that the Residual Certificate will only be owned, directly
or indirectly, by a Permitted Transferee.
7. The Transferee's taxpayer identification number is _________________.
8. The Transferee has reviewed the provisions of Section 3.3(e) of the
Pooling and Servicing Agreement, a description of which provisions is set forth
in the Residual Certificates (in particular, clause (ii)(A) of Section 3.3(e)
which authorizes the Trustee to deliver payments on the Residual Certificate to
a Person other than the Transferee and clause (ii)(B) of Section 3.3(e) which
authorizes the Trustee to negotiate a mandatory sale of the Residual
Certificates, in either case, in the event that the Transferee holds such
Residual Certificates in violation of Section 3.3(e)); and the Transferee
expressly agrees to be bound by and to comply with such provisions.
9. No purpose of the Transferee relating to its purchase or any sale of the
Residual Certificates is or will be to impede the assessment or collection of
any tax.
10. The Transferee hereby represents to and for the benefit of the
transferor that the Transferee intends to pay any taxes associated with holding
the Residual Certificates as they become due, fully understanding that it may
incur tax liabilities in excess of any cash flows generated by the Residual
Certificates.
11. The Transferee will, in connection with any transfer that it makes of
the Residual Certificates, deliver to the Certificate Registrar a representation
letter substantially in the form of Exhibit E-2 to the Pooling and Servicing
Agreement in which it will represent and warrant, among other things, that it is
not transferring the Residual Certificates to impede the assessment or
collection of any tax and that it has at the time of such transfer conducted a
reasonable investigation of the financial condition of the proposed transferee
as contemplated by Treasury regulation Section 1.860E-1(c)(4)(i) and has
satisfied the requirements of such provision.
12. The Transferee is a citizen or resident of the United States, a
corporation, a partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States is includible in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.
E-1A-2
<PAGE>
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its ____________________ and its corporate seal to be hereunto attached,
attested by its [Assistant] Secretary, this day of ______________, ____.
[NAME OF TRANSFEREE]
By:______________________________
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
- ----------------------------
[Assistant] Secretary
Personally appeared before me the above-named ____________________, known
or proved to me to be the same person who executed the foregoing instrument and
to be the ____________________ of the Transferee, and acknowledged to me that
he/she executed the same as his/her free act and deed and the free act and deed
of the Transferee.
Subscribed and sworn before me this ___ day of _____________________,
_____.
---------------------------------
NOTARY PUBLIC
COUNTY OF_____________________
STATE OF_______________________
My Commission expires the __________
day of ___________, 19__.
E-1A-3
<PAGE>
EXHIBIT E-1B
FORM OF TRANSFEROR CERTIFICATE FOR TRANSFERS OF
REMIC RESIDUAL CERTIFICATES
_______________, 19__
State Street Bank and Trust Company, as Trustee
2 International Plaza
Boston, Massachusetts 02110
Re: Morgan Stanley Capital I Inc., Aetna Commercial Mortgage Trust
Multiclass Pass-Through Certificates, Series 1997-ALIC (the
"Certificates")
Sirs:
This letter is delivered to you in connection with the transfer by
_________________ (the "Transferor") to _________________ (the "Transferee") of
[Class R] [Class R-I] [Class R-II] [Class R-III] Certificates evidencing a ____%
Percentage Interest in such Class (the "Residual Certificates"). The
Certificates, including the Residual Certificates, were issued pursuant to the
Pooling and Servicing Agreement, dated as of December 1, 1997 (the "Pooling and
Servicing Agreement"), among Morgan Stanley Capital I Inc., as Depositor,
Midland Loan Services, L.P., as Master Servicer, Aetna Life Insurance Company,
as Special Servicer and State Street Bank and Trust Company, as Trustee. All
capitalized terms used but not otherwise defined herein shall have the
respective meanings set forth in the Pooling and Servicing Agreement. The
Transferor hereby certifies, represents and warrants to you, as Certificate
Registrar, that:
1. No purpose of the Transferor relating to the transfer of the Residual
Certificates by the Transferor to the Transferee is or will be to impede the
assessment or collection of any tax.
2. The Transferor understands that the Transferee has delivered to you a
Transfer Affidavit and Agreement in the form attached to the Pooling and
Servicing Agreement. The Transferor does not know or believe that any
representation contained therein is false.
3. The Transferor has at the time of this transfer conducted a reasonable
investigation of the financial condition of the Transferee as contemplated by
Treasury regulation Section 1.860E- 1(c)(4)(i) and, as a result of that
investigation, the Transferor has determined that the Transferee has
historically paid its debts as they became due and has found no significant
evidence to indicate that the Transferee will not continue to pay its debts as
they become due in the future. The Transferor understands that the transfer of
the Residual Certificates may not be respected for United States income tax
purposes (and the Transferor may continue to be liable for United States income
taxes associated therewith) unless the Transferor has conducted such an
investigation.
Very truly yours,
-----------------------------------
(Transferor)
By:________________________________
Name:______________________________
Title:______________________________
E-1B-1
<PAGE>
EXHIBIT F-1
<PAGE>
Commercial Mortgage Pass-Through Certificates
Series 1997-
STATE STREET [LOGO]
Report to Certificateholders for Payment Date:
Payment Summary
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Pass-Through Interest Original Beginning Principal Class Interest Total P&I Ending
Class CUSIP Rate Type Balance Balance Distrib.Amount Distribution Amt Payable Balance
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Totals:
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Distribution per Certificate
----------------------------------------------------------------------
Beginning Ending
Certificate Principal Interest Certificate
Class Factor Distribution(1) Distribution(1) Factor
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
---------------------------------------------------
For additional information or with questions,
please contact
---------------------------------------------------
State Street Corporate Trust
---------------------------------------------------
Bond Analyst:
Account Officer:
Street Connection: (factor and rate by cusip)
(617)664-5500
Street Fax: (617) 664-5600
Web Site: corporatetrust.statestreet.com
---------------------------------------------------
</TABLE>
----------------------------------------------------------------------
Disclaimer Notice: This report has been prepared by or based on information
furnished to State Street Bank and Trust Company ("State Street") by one or more
third parties (e.g., Servicer, Master Servicer, etc.) State Street shall not
have and does not undertake responsibility for the accuracy or completeness of
information provided by such third parties, and makes no representations or
warranties with respect to the accuracy or completeness thereof or the
sufficiency thereof for any particular purpose. State Street has not
independently verified information received from third parties, and shall have
no liability for any inaccuracies therein or caused thereby.
Page 1
<PAGE>
Commercial Mortgage Pass-Through Certificates
Series 1997-
STATE STREET [LOGO]
Report to Certificateholders for Payment Date:
Payment Details
Principal Detail
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Beginning Principal Realized Appraisal Reimbrs Add Trust Ending
Class Balance Distribution Losses Reduction Amts Exp/Realzd Losses Balance
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------
Totals:
-----------------------------------------------------------------------------------
<CAPTION>
Interest Detail
- ------------------------------------------------------------------------------------------------------------------------------------
Accrued Excess Prepaymt Distributable Current Payment to Class
Certificate Interest Certificate Unpaid Unpaid Interest Prepymt Prems/ Ending Balance
Class Interest Shortfalls Interest Interest Interest Dist Amount YMC Unpaid Interest
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Totals:
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2
<PAGE>
Commercial Mortgage Pass-Through Certificates
Series 1997-
STATE STREET [LOGO]
Report to Certificateholders for Payment Date:
Additional Reporting Information
Mortgage Loan Activity for related Payment Date:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Weighted Average Re- Beginning Ending Ending Unpaid Available
# of Mortgage maining Term to Weighted Average Agg Stated Agg Stated Principal Distribution
Loans Outs Maturity Mortgage Rate Principal Balance Principal Balance Balance Amt
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Current Current
Realized Additional Principal
Losses Trust Fund Exp # of Payoffs Prepayments
- ---------------------------------------------------------------------------------- P&I Advance
& Fee Information:
----------------------------
- ---------------------------------------------------------------------------------- Advances:
<CAPTION> - Current P&I
Appraisal Reduction Information: - Outstanding P&I
- ------------------------------------------------------------------------------------------------------ - Servicing
Loan # SPB of Apr Red Loan All Unpd INt & Fees Appraisal Value P&I Advance on Loan - Nonrecoverable P&I
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest on:
- ------------------------------------------------------------------------------------------------------
- P&I Advances
<CAPTION> - Servicing Advances
Aggregate Delinquency information for related Payment Date:
------------------------------------------------------------------------------------- Servicing Compensation
One Month Two Months 3 Months + Foreclosures
- ------------------------------------------------------------------------------------------------------ - to Master Servicer
<S> <C> <C> <C> <C>
# of Loans - to Special Servicer
- ------------------------------------------------------------------------------------------------------ ----------------------------
Agg Prin Balance
- ------------------------------------------------------------------------------------------------------
Loan Prepayment Information:
<CAPTION> ----------------------------
REO Property with Final Recovery Determination: Amount of
- ------------------------------------------------------------------------------------------------------ Loan # Prepayment
Mortgage Basis for Final All Proceeds Portion Proceeds Amount of ----------------------------
Loan # Recovery Determination Received to Certificates Realized Loss
- ------------------------------------------------------------------------------------------------------ ----------------------------
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------ ----------------------------
- ------------------------------------------------------------------------------------------------------ ----------------------------
Total 0.00
<CAPTION> ----------------------------
Liquidated Mortgage Loans: (other than Prepayments in full)
- ------------------------------------------------------------------------------------------------------
Portion of
Loan Nature of Liquidation Proceeds Payable Amount of
# Liquidation Event Proceeds to Certificates Realized Loss
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
</TABLE>
Page 3
<PAGE>
State Street Corporate Trust
Commercial Mortgage Web:corporatetrust.statestreet.com
Pass-Through Certificates
Series 1997- Payment Date:
Underwriter: Report
Distribution of Current Scheduled Principal Balances
- --------------------------------------------------------------------------------
Current
Scheduled -------------------------------------------------------------
Principal Weighted Averages
Balance # of Aggregate % Tot ---------------------------
Mtg Sched Prin Sched Months Mort
Loans Balance Bal DSCR to Mat Rate
- --------------------------------------------------------------------------------
<$1,000,000.00
$1,000,000.00+
$2,000,000.00+
$3,000,000.00+
$4,000,000.00+
$5,000,000.00+
$6,000,000.00+
$7,000,000.00+
$8,000,000.00+
$10,000,000.00+
$15,000,000.00+
$20,000,000.00+
- --------------------------------------------------------------------------------
Total
- --------------------------------------------------------------------------------
Distribution of Current Mortgage Interest Rates
- --------------------------------------------------------------------------------
Current
Scheduled -------------------------------------------------------------
Principal Weighted Averages
Balance # of Aggregate % Tot ---------------------------
Mtg Sched Prin Sched Months Mort
Loans Balance Bal DSCR to Mat Rate
-------------------------------------------------------------------------------
<8.000%
8.000%+
8.250%+
8.500%+
8.750%+
9.000%+
9.250%+
9.500%+
10.000%+
- --------------------------------------------------------------------------------
Total
- --------------------------------------------------------------------------------
Distribution of Remaining Stated Term (Balloon Loans Only)
- --------------------------------------------------------------------------------
Current
Scheduled -------------------------------------------------------------
Principal Weighted Averages
Balance # of Aggregate % Tot ---------------------------
Mtg Sched Prin Sched Months Mort
Loans Balance Bal DSCR to Mat Rate
-------------------------------------------------------------------------------
<13
13-24
25-36
37-48
49-60
61-72
73+
-------------------------------------------------------------------------------
Total
- --------------------------------------------------------------------------------
Distribution of Remaining Stated Term (Fully Amortizing Loans Only)
- --------------------------------------------------------------------------------
Current
Scheduled -------------------------------------------------------------
Principal Weighted Averages
Balance # of Aggregate % Tot ---------------------------
Mtg Sched Prin Sched Months Mort
Loans Balance Bal DSCR to Mat Rate
- --------------------------------------------------------------------------------
<13
13-24
25-36
37-60
61-120
121-180
181-240
241+
- --------------------------------------------------------------------------------
Total
- --------------------------------------------------------------------------------
<PAGE>
State Street Corporate Trust
Commercial Mortgage Web:corporatetrust.statestreet.com
Pass-Through Certificates
Series 1997- Payment Date:
Underwriter: Report
Distribution by State
- --------------------------------------------------------------------------------
-------------------------------------------------------------
Weighted Averages
# of Aggregate % Tot ---------------------------
Mtg Sched Prin Sched Months Mort
States Loans Balance Bal DSCR to Mat Rate
- --------------------------------------------------------------------------------
Texas
Florida
California
Pennsylvania
Maryland
Arizona
Goergia
New Jersey
Illinois
Massachusetts
Other
- --------------------------------------------------------------------------------
Total
- --------------------------------------------------------------------------------
Distribution of Property Type
- --------------------------------------------------------------------------------
-------------------------------------------------------------
Weighted Averages
# of Aggregate % Tot ---------------------------
Property Mtg Sched Prin Sched Months Mort
Types Loans Balance Bal DSCR to Mat Rate
- --------------------------------------------------------------------------------
Multifamily
Retail
Hotel
Office
Industrial
Self-Storage
Health Care
Mobile Home Park
- --------------------------------------------------------------------------------
Total
- --------------------------------------------------------------------------------
Distribution of Seasoning
- --------------------------------------------------------------------------------
-------------------------------------------------------------
Weighted Averages
# of Aggregate % Tot ---------------------------
Seasoning Mtg Sched Prin Sched Months Mort
Months Loans Balance Bal DSCR to Mat Rate
- --------------------------------------------------------------------------------
<13
13-24
25-36
37-48
49-60
61-72
73+
- --------------------------------------------------------------------------------
Total
- --------------------------------------------------------------------------------
Distribution of Most Recent Debt Service Coverage Ratio
- --------------------------------------------------------------------------------
-------------------------------------------------------------
Weighted Averages
# of Aggregate % Tot ---------------------------
Mtg Sched Prin Sched Months Mort
DSCR Loans Balance Bal DSCR to Mat Rate
- --------------------------------------------------------------------------------
0
<1.01
1.01 - 1.109
1.11 - 1.209
1.21 - 1.309
1.31 - 1.409
1.41 - 1.509
1.51 - 2.009
2.01+
- --------------------------------------------------------------------------------
Total
- --------------------------------------------------------------------------------
<PAGE>
State Street Corporate Trust
Commercial Mortgage Web:corporatetrust.statestreet.com
Pass-Through Certificates
Series 1997- Payment Date:
Underwriter: Report
- --------------------------------------------------------------------------------
-------------------------------------------------------------
Weighted Averages
Most # of Aggregate % Tot ---------------------------
Recent Mtg Sched Prin Sched Months Mort
LTV Loans Balance Bal DSCR to Mat Rate
- --------------------------------------------------------------------------------
0
<50.00
50.00+
60.00+
70.00+
80.00+
90.00+
100.00+
- --------------------------------------------------------------------------------
Total
- --------------------------------------------------------------------------------
Distribution of Amortization Type
- --------------------------------------------------------------------------------
-------------------------------------------------------------
Weighted Averages
# of Aggregate % Tot ---------------------------
Amortization Mtg Sched Prin Sched Months Mort
Type Loans Balance Bal DSCR to Mat Rate
- --------------------------------------------------------------------------------
Amoritzing
Balloon
Fully
Amortizing
Other
- --------------------------------------------------------------------------------
Total
- --------------------------------------------------------------------------------
Distribution of Remaining Amortizing Term
- --------------------------------------------------------------------------------
-------------------------------------------------------------
Weighted Averages
Original # of Aggregate % Tot ---------------------------
Amortization Mtg Sched Prin Sched Months Mort
Term Loans Balance Bal DSCR to Mat Rate
- --------------------------------------------------------------------------------
0+
120+
240+
270+
300+
330+
370+
- --------------------------------------------------------------------------------
Total
- --------------------------------------------------------------------------------
Distribution of Original Term to Stated Maturity
- --------------------------------------------------------------------------------
-------------------------------------------------------------
Weighted Averages
Original # of Aggregate % Tot ---------------------------
Term to Mtg Sched Prin Sched Months Mort
Maturity Loans Balance Bal DSCR to Mat Rate
- --------------------------------------------------------------------------------
0+
72+
89+
109+
121+
241+
275+
- --------------------------------------------------------------------------------
Total
- --------------------------------------------------------------------------------
<PAGE>
State Street Corporate Trust
Commercial Mortgage Web:corporatetrust.statestreet.com
Pass-Through Certificates
Series 1997- Payment Date:
Underwriter: Report ID
<TABLE>
<CAPTION>
Loan Level Detail
- ------------------------------------------------------------------------------------------------------------------------------------
Offer Property Transfer Maturity Neg Am Beg Note Sched Prepay/ Prepay Paid Thru Prepmt Loan
Control# Type Date State Date (Y/N) Sched Bal Rate P&I Liquid Date Date Premium Status
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
totals
- --------------------------------------------------------------------------------
If state field is blank loan has properties in multiple states.
- --------------------------------------------------------------------------------
Loan Status:
A= Payment not rec'd. but still in grace period, B= Late payment, but less than
1 mo., 1= 1 mo. delinquent, 2= 2 mo. delinquent, 3= 3 mo. delinquent 4= Assumed
scheduled payment (performing matured balloon), 7= Foreclosure, 9= REO
- --------------------------------------------------------------------------------
<PAGE>
State Street Corporate Trust
Commercial Mortgage Web:corporatetrust.statestreet.com
Pass-Through Certificates
Series 1997- Payment Date:
Underwriter: Report ID
<TABLE>
<CAPTION>
Specially Serviced Loan Summary
- ------------------------------------------------------------------------------------------------------------------------------
Number of Loans as of the Closing Date
Principal Balance as of the Closing Date
Current Number of Loans
Current Outstanding Principal Balance
Current Number of Specially Serviced Loans
Current Outstanding Principal Balance of Specially Serviced Loans
Percent of Specially Serviced Loans (per Current Number of Loans)
Percent of Specially Serviced Loans (per Current Outstanding Balance)
-------------------------------------------------------------------------------------------------------------------------
Curr Bal Curr Bal
as % of as % of
Number of Initial Current Spec Total Pool
Specially Serviced Loan Status Loans Prin Bal Prin Bal Serv Loans Balance
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 = Request for waiver of Prepayment Penalty
2 = Payment Default
3 = Request for Loan Modification or Workout
4 = Loans with Borrower Bankruptcy
5 = Loans in Process of Foreclosure
6 = Loans now REO Property
7 = Loan Paid Off
8 = Loans Returned to Master Servicer
-------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
State Street Corporate Trust
Commercial Mortgage Web:corporatetrust.statestreet.com
Pass-Through Certificates
Series 1997- Payment Date:
Underwriter: Report ID
<TABLE>
<CAPTION>
Specially Serviced Loan Detail
- --------------------------------------------------------------------------------------------------------------------------
Offer Transfer Sched Maturity Prop Spec Serv
Control # Date Prin Bal Date Type State NOI NOI Date DSCR Status Code*
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Legend
- --------
1 = Request for weaiver of Prepayment Penalty
2 = Payment Default
3 = Request for Loan Modification or Workout
4 = Loans with Borrower Bankruptcy
5 = Loans in Process of Foreclosure
6 = Loans now REO Property
7 = Loan Paid Off
8 = Loans Returned to Master Servicer
- ----------------------------------------------
<PAGE>
Exhibit F-2
<PAGE>
CSSA
Commercial Mortgage Pass-Through Certificates, Series 1997-C1
DELINQUENT LOAN STATUS REPORT
as of ___________________
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
S4 S55 S61 S57 S58 S62 or S63 P8 P7 P37 P39 P38
- ------------------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d)
Short Name Sq Ft or Paid Scheduled Total P&I Total Other
Prospectus When Property City State Units Thru Loan Advances Expenses Advances
ID Appropriate Type Date Balance To Date To Date (Taxes &
Escrow)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
90+ DAYS DELINQUENT
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
60 DAYS DELINQUENT
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
30 DAYS DELINQUENT
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Current & at Special Servicer
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
P25 P10 P11 P58 P54 P55 P81 P74
- ------------------------------------------------------------------------------------------------------------------------------------
(c)=a+b+c+d (f) P38/P81
Current Current LTM *** Cap Value
Total Monthly Interest Maturity LTM NOI LTM NOI DCSR Rate using NOI Valuation
Exposure P&I Rate Date Date Assigned & Cap Date
Rate
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
90+ DAYS DELINQUENT
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
60 DAYS DELINQUENT
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
30 DAYS DELINQUENT
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Current & at Special Servicer
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
FCL-Foreclosure
- --------------------------------------------------------------------------------
LTM - Latest 12 Months either Last Annual or Trailing 12 months
- --------------------------------------------------------------------------------
* Workout Strategy should match the CSSA Loan file using abreviated words in
place of a code number such as (FCL - In Foreclosure, MOD - Modification,
DPO - Discount Payoff, NS - Note Sale, BK - Bankrupcy, PP - Payment Plan,
TBD - To Be Determined It is possible to combine the status codes if the
loan is going in more than one direction.(i.e. FCI/Mod, BK/Mod, BK/FCL/DPO)
- --------------------------------------------------------------------------------
** App - Appraisal, BPO - Broker opinion, Int. - Internal Value
- --------------------------------------------------------------------------------
*** How to determine the cap rate is agreed upon by Underwriter and services -
to be provided by a third party.
- --------------------------------------------------------------------------------
<PAGE>
CSSA
Commercial Mortgage Pass-Through Certificates, Series 1997-C1
DELINQUENT LOAN STATUS REPORT
as of ___________________
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
S4 S55 S61 S57 S58 P75 P35 P77
- ----------------------------------------------------------------------------------------------------------------------------------
(g)=(.92xf)-e(h)=(g/e)
- ----------------------------------------------------------------------------------------------------------------------------------
Short Name Appraisal Total
Prospectus When Property City State BPO or Loss using Estimated Appraisal Transfer
ID Appropriate Type Internal 90% Appr. Recovery Reduction Date
Value** or BPO(f) % Realized
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
90+ DAYS DELINQUENT
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
60 DAYS DELINQUENT
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
30 DAYS DELINQUENT
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Current & at Special Servicer
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------------------
P79 P42 P82 P76
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
FCL Expected
Resolution Start FCL Sale Workout Comments
Date Date Date Strategy
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
90+ DAYS DELINQUENT
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
60 DAYS DELINQUENT
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
30 DAYS DELINQUENT
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
Current & at Special Servicer
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
FCL-Foreclosure
- --------------------------------------------------------------------------------
LTM - Latest 12 Months either Last Annual or Trailing 12 months
- --------------------------------------------------------------------------------
<PAGE>
CSSA
Commercial Mortgage Pass-Through Certificates, Series 1997-C1
REO STATUS REPORT
as of ___________________
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
S4 S55 S61 S57 S58 S62 or S63 P8 P7 P37 P39 P38
- ------------------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d)
- ------------------------------------------------------------------------------------------------------------------------------------
Short Name Sq Ft or Paid Scheduled Total P&I Total Other
Prospectus When Property City State Units Thru Loan Advances Expenses Advances
ID Appropriate Type Date Balance To Date To Date (Taxes &
Escrow)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
P25 P11 P58 P54 P81 P74 P75
- -----------------------------------------------------------------------------------------------------------------------------------
(c)=a+b+c+d (k) (j) (f)=(k/i) (g) (h)=(.92)xg(i)-(g/e)
- -----------------------------------------------------------------------------------------------------------------------------------
Current Cap Value Appraisal
Total Monthly Maturity LTM NOI LTM NOI/ Rate Valuation using NOI BPO or Loss using Estimated
Exposure P&I Date Date DCSR Assigned Date & Cap Internal 92% Appr. Recovery
*** Rate Value** or BPO(f) %
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------
P35 P77 P82 P79
- --------------------------------------------------------------
- --------------------------------------------------------------
Total Pending
Appraisal Transfer REO Resolution Comments
Reduction Date Acquisition Date
Realized Date
- --------------------------------------------------------------
<C> <C> <C> <C> <C>
- --------------------------------------------------------------
- --------------------------------------------------------------
- --------------------------------------------------------------
- --------------------------------------------------------------
- --------------------------------------------------------------
- --------------------------------------------------------------
- --------------------------------------------------------------
- --------------------------------------------------------------
- --------------------------------------------------------------
- --------------------------------------------------------------
- --------------------------------------------------------------
- --------------------------------------------------------------
- --------------------------------------------------------------
- --------------------------------------------------------------
- --------------------------------------------------------------
</TABLE>
(l) Use the following codes, App - Appraisal, BPO - Brokers Opinion, Int -
Internal Value
*** How to determine the cap rate is agreed upon by Underwriter and servicers-
to be provided by a third party
<PAGE>
CSSA
Commercial Mortgage Pass-Through Certificates, Series 1997-C1
HISTORICAL LOAN MODIFICATION REPORT
as of ___________________
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
S4 S57 S58 P49 P48 P7* P7* P50* P50*
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Balance
When Balance at the
Mod/ Sent to Effective Date # Mths
Prospectus Extension Effect Special of Old for Rate New
ID City State Flag Date Servicer Rehabilltation Rate Change Rate
===============================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
THIS REPORT IS HISTORICAL
- -------------------------------------------------------------------------------------------------------------------------------
Information is as of modification. Each line should not change in the future. Only new modifications should be added.
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
===============================================================================================================================
Total For All Loans:
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Total For Loans in Current Month:
- -------------------------------------------------------------------------------------------------------------------------------
# of Loans $ Balance
- -------------------------------------------------------------------------------------------------------------------------------
Modifications:
- -------------------------------------------------------------------------------------------------------------------------------
Maturity Date Extentions:
- -------------------------------------------------------------------------------------------------------------------------------
Total:
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
P25* P25* P11* P11* P47
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
(2) Est.
Future
Total # Interest
Mths (1) Loss to
for Realized Trust $
New Old New Change Loss to (Rate
Old P&I P&I Maturity Maturity of Mod Trust $ Reduction) Comment
======================================================================================================================
<C> <C> <C> <C> <C> <C> <C> <C>
THIS REPORT IS HISTORICAL
- ----------------------------------------------------------------------------------------------------------------------
Information is as of modification. Each line should not change in the future. Only new modifications should be added.
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
======================================================================================================================
Total For All Loans:
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Total For Loans in Current Month:
- ----------------------------------------------------------------------------------------------------------------------
# of Loans $ Balance
- ----------------------------------------------------------------------------------------------------------------------
Modifications:
- ----------------------------------------------------------------------------------------------------------------------
Maturity Date Extentions:
- ----------------------------------------------------------------------------------------------------------------------
Total:
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
* The information in these columns is from a particular point in time and
should not change on this report once assigned.
- --------------------------------------------------------------------------------
(1) Actual principal loss taken by bonds.
- --------------------------------------------------------------------------------
(2) Expected future loss due to a rate reduction. This is just an estimate
calculated at the time of the modification.
<PAGE>
CSSA
Commercial Mortgage Pass-Through Certificates
Series 1997-C1
HISTORICAL LOSS ESTIMATE REPORT (REO-SOLD OR DISCOUNTED PAYOFF)
as of ___________________
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
S4 S55 S61 S57 S58 P45/P7 P75 P45
- --------------------------------------------------------------------------------------------------------------------------------
(c)=b/a (a) (b) (d)
- --------------------------------------------------------------------------------------------------------------------------------
Short Name % Latest
Prospectus When Property City State Received Appraisal Effect Net Amt
ID Appropriate Type From or Brokers Date of Sales Received
Sale Opinion Sale Price From Sale
================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
THIS REPORT IS HISTORICAL
- --------------------------------------------------------------------------------------------------------------------------------
All information is from the liquidation date and does not need to be updated.
- --------------------------------------------------------------------------------------------------------------------------------
================================================================================================================================
Total all Loans:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Current Month Only:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
P7 P37 P39+P38
- ----------------------------------------------------------------------------------------------------------------------------------
(e) (f) (g) (h) (i)=d-(f+g+h) (k)=i-e (m)
- ----------------------------------------------------------------------------------------------------------------------------------
Date
Date Minor
Servicing Loss Adj
Scheduled Total P&I Total Fees Actual Losses Passed Minor Adj Passed
Balance Advanced Expenses Expenses Net Proceeds Passed thru thru to Trust thru
==================================================================================================================================
<C> <C> <C> <C> <C> <C> <C> <C> <C>
THIS REPORT IS HISTORICAL
- ----------------------------------------------------------------------------------------------------------------------------------
All information is from the liquidation date and does not need to be updated.
- ----------------------------------------------------------------------------------------------------------------------------------
==================================================================================================================================
Total all Loans:
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Current Month Only:
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
(n)=k+m (o)=n/c
==================================================================================================================================
Total Loss Loss % of
with Schedule
Adjustment Balance
==================================================================================================================================
<C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
==================================================================================================================================
Total all Loans:
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Current Month Only:
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EXHIBIT F-3
<PAGE>
Special Servicer Asset Summary
- --------------------------------------------------------------------------------
Loan Number Property Name
Property Address: Property Type:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Borrower Information
Borrower Name: Borrower Entity Type
Borrower Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Note Information
Note Date: Original Balance:
Maturity Date: Current Balance:
Current Amortization: Current Rate:
Paid Through Date: Current Monthly Payment:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Collateral Information
Date of Operating Statement: Date of Rent Roll:
Months Covered by Statement: Occupancy:
EGI: Tenant 1 (% of Space/Lease Expir. Date):
Expenses Tenant 2 (% of Space/Lease Expir. Date):
NOI Tenant 3 (% of Space/Lease Expir. Date):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Special Servicing Information
Date of Transfer to Special Servicer: Balance Transferred to Special Servicer:
Loan Status:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Report Summary
Site Inspection Date: Site Inspection Firm:
Any Deferred Maintenance Noted: Estimated Cost to Repair:
Site Inspection Comments:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Phase I Date: Phase I Firm:
Phase I Comments:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Appraisal Date: Appraisal Firm:
Appraisal Value:
Appraiser's Comments:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Asset Strategy
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT
- --------------------------------------------------------------------------------
OPERATING STATEMENT ANALYSIS
The primary purpose of applying the methodology detailed below is to arrive at a
servicer adjusted or underwritten cash flow ("UCF") to facilitate a meaningful
comparison of the property's current operating information to the underwriting
that appears in the Prospectus Supplement. The detail below attempts to
highlight certain categories requiring adjustments, but it is not meant to be
exclusive and is expected that the Master Servicer will use its discretion in
making the appropriate adjustment.
Property Summary
Servicer ----------------------------
Loan Number ----------------------------
Morgtagor ----------------------------
Name of Property ----------------------------
Street ----------------------------
City, State, Zip ----------------------------
Date of Rent Roll ---------------
Physical Occupancy Percertage ---------------
Net Rentable Area/Number of Units:
Date of Operating Statements ---------------
Number of Months ---------------
Period From - To ---------------
<TABLE>
<CAPTION>
Currrent Period Annualized $Amt Notes
--------------- ---------- ---- -----
Income*
<S> <C> <C> <C> <C>
Gross Potential --------------- -------------- From current rent roll or operating statement
Reinbursements --------------- -------------- From current operating statement
Vacancy --------------- -------------- Greater of 3% or actual
Other --------------- -------------- From current operating statment(excluding
interest income)
Total Income =============== ==============
Operating Expenses*
Management Fee --------------- -------------- Same percentage assumption as inital underwriting
Administration --------------- -------------- From current operating statement, exclude any
legal or consulting fees not pertainning to the
operation of the property
Utilities --------------- -------------- From current operating statement
Maintenance & Repair --------------- -------------- From current operating statement, remove any
capital expenses
Insurance --------------- -------------- From current operating statement
Real Estate Taxes --------------- -------------- From current operating statement, annual amount
due excluding delinquent taxes or credits from
prior years
Ground Rent --------------- -------------- From current operating statement
Other Expenses --------------- -------------- From current operating statement
Total Operating Expenses =============== ==============
Net Operating Income =============== ==============
Replacement Reserves --------------- -------------- Same dollar per unit or percentage excemption from
oringal underwriting
Tenant Inprovements and Leasing
[illegible] --------------- -------------- Same dollar per unit assumption as orignal
underwriting
Underwritten Cash Flow =============== ==============
Debit Service for Period --------------- --------------
Debit Service for First (if applicable) --------------- --------------
Debit Service Coverage Ratio
(UCF/DebitService)** =============== ==============
</TABLE>
* Analyze and footnote as approprite any significant income or expense
variances
** DSCR is calculated on a rolled up basis for cross collaterallzed Mortgage
Loans
Footnotes
Date of most recent Property Inspection: -----------------
Property Condition Comments:
<PAGE>
SCHEDULE I
Mortgage Loan Schedule
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Loan Note
No. Property Name Address City State Zip Code Date(1)
- -------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C>
1 Poughkeepsie Galleria Rt. 9 & Cottan Hill Road Poughkeepsie NY 12601 9/17/87
2 Charles Hotel University/Bennett Street Cambridge MA 02138 9/1/92
3 Commerce Distribution Center-50 Lindberg Lane & Badini Blvd. Bell CA 90201 3/17/97
4 Commerce Distribution Center-36 4801-19 Eastern Avenue Bell CA 90201 3/17/97
5 Koll Center Irvine II NEC Van Karman & Micheleson Irvine CA 92715 11/1/92
6 Glen Pointe Centre West 500 Fran W. Burr Blvd. Teaneck NJ 07666 12/12/86
7 High Ridge Office Park High Ridge Park Stamford CT 06905 7/1/96
8 Cambridge Park-2 150 Cambridge Park Drive Cambridge MA 02140 11/1/97
9 Court Plaza 25 Main Street Hackensack NJ 07601 2/17/98
10 United Farm Bureau Headquarters 225 South East St. Indianapolis IN 46204 10/26/90
11 Doubletree Hotel-Fishermans Wharf Delmonte Avenue Monterey CA 93940 11/1/97
12 One Post Office Square One Post Office Square Boston MA 02109 8/3/93
13 First Fort Lauderdale Place 100 NE 3rd Avenue Fort Lauderdale FL 33301 12/1/92
14 Timberlands Office Park-C Building C 5445 Corporate Dr. Troy MI 48098 12/1/95
15 Timberlands Office Park-B Building B 5435 Corporate Dr. Troy MI 48098 12/1/95
16 Sonesta Beach Hotel 350 Ocean Drive Key Biscayne FL 33149 12/1/93
17 Financial Center 501 North 20th Street Birmingham AL 35203 1/1/95
18 Hyatt Plaza Office-2 12701 Fairlakes Circle Fairfax VA 22033 11/8/93
19 UCLA Medical Office Building 100 UCLA Medical Plaza Los Aneles CA 90024 2/27/89
20 Mercer Square Condos 250 Mercer Street New York NY 10012 12/15/87
21 Crowne Plaza-Union Station 123 Louisiana Street Indianapolis IN 46204 8/12/88
22 Crystal Square-2 1725 Jefferson Davis Highway Arlington VA 22202 7/1/94
23 Timberlands Office Park-II 1450 West Long Lake Rd. Troy MI 48098 12/1/95
24 One Courthouse Metro 2200 Wilson Boulevard Arlington VA 22201 1/1/94
25 Brentwood Gardens 11677 San Vicente Boulevard Los Angeles CA 90049 11/1/97
26 Commerce Plaza-I 7300 W. 100th Street Overland Park KS 66210 6/29/90
27 Pentucket Shopping Center Route 125 Plaistow NH 03865 1/1/97
28 Executive 2 Apartments 11343 Mountain View Avenue Rancho Cucamonga CA 91730 10/10/88
29 Foxleigh Building 2330 W. Joppa Road Lutherville MD 21093 3/1/95
30 Commerce Plaza-II 7400 W. 110th Street Overland Park KS 66210 6/29/90
31 Pentucket Shopping Center 172 Trade Street Lexington KY 40511 12/1/87
32 Orchard Square Shopping Center Kempsville Rd & Volvo Pkwy Chesapeake VA 23320 3/12/90
33 Days Inn Surfside 15 South Ocean Boulevard Surfside Beach SC 29587 4/1/96
34 Pinellas Center 12555 Enterprise Blvd. Largo FL 33542 7/1/93
35 Thorn Hill Road Thorn Hill Road Marshall Twnshp PA 15005 8/1/96
36 [DELETED]
37 Phillips Place Cooperative East 19th Street Minneapolis MN 55418 1/15/88
38 Clinton Avenue Townhomes 465-499 Clinton Avenue St. Paul MN 55107 12/14/87
39 Enterprise Apartments 4508 Bob Wallace Ave. Huntsville AL 35805 11/27/79
40 Big 5 Sporting Goods 921 E. Southern Ave. Tempe AZ 85282 7/2/74
41 150 Sycamore Street 150 Sycamore Street Glastonbury CT 06033 3/29/74
<CAPTION>
- ------------------------------------------------------------------------------
Loan Mortgage Original
No. Property Name Rate Balance
- ------------------------------------------------------------------------------
<C> <S> <C> <C>
1 Poughkeepsie Galleria 10.375% $112,000,000
2 Charles Hotel 9.000% 60,000,000
3 Commerce Distribution Center-50 8.000% 28,790,000
4 Commerce Distribution Center-36 8.000% 24,850,000
5 Koll Center Irvine II 8.000% 75,000,000
6 Glen Pointe Centre West 9.875% 51,500,000
7 High Ridge Office Park 9.115% 45,000,000
8 Cambridge Park-2 10.020%(2) 39,000,000
9 Court Plaza 10.350% 37,500,000
10 United Farm Bureau Headquarters 10.310% 35,000,000
11 Doubletree Hotel-Fishermans Wharf 7.750% 35,000,000
12 One Post Office Square 8.250% 106,500,000
13 First Fort Lauderdale Place 7.000% 23,500,000
14 Timberlands Office Park-C 9.000% 13,800,000
15 Timberlands Office Park-B 9.000% 9,200,000
16 Sonesta Beach Hotel 11.780%(3) 22,000,000
17 Financial Center 9.500% 29,000,000
18 Hyatt Plaza Office-2 7.949% 39,500,000
19 UCLA Medical Office Building 10.545% 22,000,000
20 Mercer Square Condos 10.625% 19,000,000
21 Crowne Plaza-Union Station 10.710% 16,500,000
22 Crystal Square-2 9.480% 15,000,000
23 Timberlands Office Park-II 9.000% 14,000,000
24 One Courthouse Metro 7.625% 20,000,000
25 Brentwood Gardens 8.000% 17,000,000
26 Commerce Plaza-I 9.820% 12,250,000
27 Pentucket Shopping Center 8.500%(4) 17,500,000
28 Executive 2 Apartments 10.313% 12,750,000
29 Foxleigh Building 9.000% 12,550,000
30 Commerce Plaza-II 9.820% 10,000,000
31 Pentucket Shopping Center 9.830% 8,600,000
32 Orchard Square Shopping Center 9.720% 6,850,000
33 Days Inn Surfside 9.875% 5,800,000
34 Pinellas Center 9.000% 2,500,000
35 Thorn Hill Road 8.500% 4,400,000
36 [DELETED]
37 Phillips Place Cooperative 10.000% 295,000
38 Clinton Avenue Townhomes 10.000% 249,000
39 Enterprise Apartments 10.750% 178,000
40 Big 5 Sporting Goods 8.750% 238,000
41 150 Sycamore Street 8.875% 150,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Aggregate
Loan Cut-off-Date Rem. Maturity Due Monthly Debt Master Serv.
No. Property Name Balance Term(5) Date Date Service Fee
- ----------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C> <C>
1 Poughkeepsie Galleria $97,552,186 178 10/1/12 First $1,047,500 0.054%
2 Charles Hotel $55,997,412 37 1/1/01 First $537,051 0.054%
3 Commerce Distribution Center-50 $28,790,000 54 6/1/02 First $191,933 0.054%
4 Commerce Distribution Center-36 $24,850,000 54 6/1/02 First $165,667 0.054%
5 Koll Center Irvine II $48,474,200 59 11/1/02 First $371,416 0.054%
6 Glen Pointe Centre West $46,024,150 169 1/1/12 Tenth $447,200 0.054%
7 High Ridge Office Park $40,879,963 103 6/30/06 First $380,997 0.054%
8 Cambridge Park-2 $37,684,735 119 11/1/07 First $355,123(2) 0.054%
9 Court Plaza $36,068,628 183 3/1/13 First $342,560 0.054%
10 United Farm Bureau Headquarters $33,643,233 34 10/1/00 First $315,198 0.054%
11 Doubletree Hotel-Fishermans Wharf $26,757,544 119 11/1/07 First $202,329 0.054%
12 One Post Office Square $24,553,024 32 8/1/00 First $232,483 0.054%
13 First Fort Lauderdale Place $23,500,000 16 4/1/99 First $137,083 0.054%
14 Timberlands Office Park-C $13,536,095 97 1/1/06 First $101,521 0.054%
15 Timberlands Office Park-B $9,084,565 97 1/1/06 First $68,134 0.054%
16 Sonesta Beach Hotel $22,431,486 34 10/1/00 First $220,202 0.054%
17 Financial Center $22,000,000 49 1/1/02(7) First $174,167 0.054%
18 Hyatt Plaza Office-2 $22,000,000 70 9/30/03 First $145,732(8) 0.054%
19 UCLA Medical Office Building $20,790,358 87 3/1/05 First $192,802 0.054%
20 Mercer Square Condos $17,460,413 241 1/1/18 First $175,579 0.054%
21 Crowne Plaza-Union Station $15,319,363 188 8/1/13 First $153,530 0.054%
22 Crystal Square-2 $14,152,172 25 1/1/00 First $139,624 0.054%
23 Timberlands Office Park-II $13,910,046 97 1/1/06 First $104,325 0.054%
24 One Courthouse Metro $13,464,972 10 10/1/98 First $99,991 0.054%
25 Brentwood Gardens $13,167,303 120 12/1/07 First $101,734 0.054%
26 Commerce Plaza-I $12,066,542 151 7/1/10 First $105,877 0.054%
27 Pentucket Shopping Center $11,884,801 49 1/1/02 First $84,184 0.054%
28 Executive 2 Apartments $11,641,629 83 11/1/04 First $109,981 0.054%
29 Foxleigh Building $11,300,000 64 3/31/03 First $84,750(9) 0.054%
30 Commerce Plaza-II $9,597,442 151 7/1/10 First $84,212 0.054%
31 Pentucket Shopping Center $7,799,767 24 11/30/99 First $74,393 0.054%
32 Orchard Square Shopping Center $6,633,223 27 3/1/00 First $58,701 0.054%
33 Days Inn Surfside $5,685,529 83 11/1/04 First $52,918(10) 0.054%
34 Pinellas Center $2,618,345 1 1/1/98 First $23,354 0.054%
35 Thorn Hill Road $871,603 20 8/1/99 First $48,693 0.054%
36 [DELETED]
37 Phillips Place Cooperative $153,010 61 1/1/03 First $3,170 0.054%
38 Clinton Avenue Townhomes $127,548 61 2/1/03 First $2,676 0.054%
39 Enterprise Apartments $115,849 107 12/1/06 First $1,690 0.054%
40 Big 5 Sporting Goods $67,756 42(6) 9/1/02 First $1,902 0.054%
41 150 Sycamore Street $41,298 40 4/1/01 First $1,223 0.054%
$803,212,971
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Loan Payment
No. Property Name Rate Change Change
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
1 Poughkeepsie Galleria No No
2 Charles Hotel No No
3 Commerce Distribution Center-50 No No
4 Commerce Distribution Center-36 No No
5 Koll Center Irvine II No No
6 Glen Pointe Centre West No No
7 High Ridge Office Park No No
8 Cambridge Park-2 Yes (Step-down)(2) Yes(2)
9 Court Plaza No No
10 United Farm Bureau Headquarters No No
11 Doubletree Hotel-Fishermans Wharf No No
12 One Post Office Square No No
13 First Fort Lauderdale Place No No
14 Timberlands Office Park-C No No
15 Timberlands Office Park-B No No
16 Sonesta Beach Hotel Yes (Step-up)(3) Yes(3)
17 Financial Center No No
18 Hyatt Plaza Office-2 No No
19 UCLA Medical Office Building No No
20 Mercer Square Condos No No
21 Crowne Plaza-Union Station No No
22 Crystal Square-2 No No
23 Timberlands Office Park-II No No
24 One Courthouse Metro No No
25 Brentwood Gardens No No
26 Commerce Plaza-I No No
27 Pentucket Shopping Center Yes (Step-up)(4) Yes(4)
28 Executive 2 Apartments No No
29 Foxleigh Building No No
30 Commerce Plaza-II No No
31 Pentucket Shopping Center No No
32 Orchard Square Shopping Center No No
33 Days Inn Surfside No No
34 Pinellas Center No No
35 Thorn Hill Road No No
36 [DELETED]
37 Phillips Place Cooperative No No
38 Clinton Avenue Townhomes No No
39 Enterprise Apartments No No
40 Big 5 Sporting Goods No No
41 150 Sycamore Street No No
</TABLE>
<PAGE>
Mortgage Loan Schedule Notes
1 Note Date indicates the most recent date of origination or modification.
2 The Mortgage Rate on the Cambridge Park-2 Loan will decrease to 8.975% on
7/1/98 and then decrease to 7.930% on 2/1/00. The Monthly Debt Service that
the Certificateholders are entitled to for the Cambridge Park-2 Loan will
decrease to $321,985 on 7/1/98 and then decrease to $289,419 on 2/1/00. The
borrower's pay rate remains at 7.930% through the life of the Loan;
however, there is an escrow in place to fund the difference between the
7.930% pay rate and the 10.020% Mortgage Rate until 7/1/98 and the
difference between the 7.930% pay rate and the 8.975% Mortgage Rate until
2/1/00. Certain ratios, including DSCR and Assumed DSCR, are calculated by
taking into account the borrower's pay rate of 7.930% and Monthly Debt
Service of $289,419; however, Loan Constant is calculated by taking into
account the current Mortgage Rate of 10.020% and current Monthly Debt
Service of $355,123.
3 The Mortgage Rate on the Sonesta Beach Hotel Loan will increase to 12.780%
on 4/1/99.
4 The Mortgage Rate to which the Certificateholders will be entitled on the
Pentucket Shopping Center Loan will increase to 9.000% on 8/1/99. The Loan
will begin amortizing on a 30 year schedule at that time.
5 Remaining Term is all calculated based on the first payment date under the
current note.
6 Remaining Term is inconsistant with Maturity Date due to prepayments over
the life of the Loan that have shortened the actual term.
7 The Financial Center Loan has a call option on 1/1/99 but the Master
Servicer will be prohibited from exercising said call option.
8 Due to the action/360 Interest Calculation Methodology, the amount of
monthly interest only payments will vary according to number of days in the
applicable month.
9 The Foxlegih Building Loan will have a principal payment of $53,514 on
April 1, 1999 and annual payments of $175,000 on April 1 of 2000, 2001 and
2002.
10 The Days Inn Surfside Loan pays $70,557 on a monthly basis from March
through November and no payments are made by the borrower from December
through February to meet their contractural obligation of a monthly payment
of $52,918 to which Certificateholders are entitled.
<PAGE>
SCHEDULE 11 TO POOLING AND SERVICING AGREEMENT
----------------------------------------------
NON-REMIC ASSETS
A. First Fort Lauderdale Loan
1. Interest Accrual. Interest accrues at the rate of 9%, but is paid at
the rate of 7%. Deferred interest accrues interest thereon, and is
payable at maturity.
2. Equity Kicker. After payment of loan and deferred interest, additional
amounts are due and payable based on availability of Net Sale Proceeds
or, if no sale, Net Appraisal Value. Holder's claim equals (a) the
first $771,445.77, and (b) 20% of any remaining proceeds or value.
B. Timberland Office Park Loans
1. Interest Accrual. The Timberland B and C Loans accrue interest at the
rate of 10.3% and the Timberland H Loan accrues interest at the rate
of 10.085%. Interest on all three (3) loans is paid at the rate of 9%.
Deferred interest does not accrue interest and is payable solely as
part of the Equity Kicker.
2. Equity Kicker. After payment of all three (3) loans (the documents
provide various formulas for computation of the Equity Kicker in the
event the loans are not paid off together), additional amounts are due
and payable based on availability of Net Sale Proceeds or, if no sale,
Net Appraisal Value (which Net Sales Proceeds or Net Appraisal Value,
as applicable, includes amounts in the Master Reserve Account, the
reserve accounts and the outstanding letter of credit). Holder's claim
equals (a) after payment of the first $1.4 million to borrowers (which
may be in the form of cancellation of any remaining face amount of a
letter of credit held for the benefit of the first mortgagee), 50% of
proceeds or value, up to the amount of the deferred interest (capped
at $4.45 million), and (b) 25% of any remaining proceeds or value.
C. Sonesta Beach Hotel Loan
1. Interest Accrual. Deferred interest: (i) accrued at the rate of 2% for
the period December, 1993 up to November 1, 1997, as well as the
period October 1, 1991 through December 1. 1993; and (ii) accrues at
the rate of 1% for the period from November 1, 1997 through April 1,
1999.
<PAGE>
Deferred interest will be forgiven if loan is otherwise paid in full
on or before its maturity.
D. Financial Center Loan
1. B Note. B Note in amount of $12.2 million, which accrues interest at
the rate of 9.5%. Forgiven upon payment of the Equity Kicker.
2. Equity Kicker. After payment of senior note, additional amounts are
due and payable based on availability of Net Sale Proceeds or, if no
sale, Net Appraisal Value. Holder's claim equals (a) 75% of the first
$4 million in proceeds or value, and (b) 15% of any remaining proceeds
or value.
E. Hyatt Plaza Office - 2 Loan
1. B Note. B Note in amount of $15 million, which accrues interest at the
rate of 2.49%, payable if available from current cash flow. Forgiven
upon payment of the Equity Kicker.
2. Equity Kicker. After payment of senior note, additional amounts are
due and payable based on availability of Net Sale Proceeds or, if no
sale, Net Appraisal Value. Holder's claim equals (a) the first $3
million of proceeds or value, (b) 50% of next $6.7 million, and (c)
75% of any remaining proceeds or value.
3. Right of First Refusal Holder has a right of first refusal on the
purchase of the property
F. One Courthouse Metro Loan
1. B Note. B Note in the amount of $7.95 million, which does not accrue
interest and is payable solely from Equity Kicker.
2. Equity Kicker. After payment of the senior note, additional amounts
are due and payable based on availability of Net Sale Proceeds or, if
no sale, Net Appraisal Value. Holder's claim equals (a) the first
$7.95 million of proceeds or value after payment of the senior note,
and (b) 15% of any remaining proceeds or value.
G. Pentucket Shopping Center Loan
1. Interest Accrual. Interest accrues at the rate of 9%, but through July
1, 1999 is paid at the rate of 8.5%. Deferred interest accrues
interest thereon, and is payable monthly (with interest) as a pro-rata
portion of the principal
<PAGE>
and interest payment upon the commencement of amortization, with the
balance at maturity.
2. Contract Claim. Holder has a non-interest bearing contract claim in
the amount of $474,000, which is payable at maturity of loan.
3. Equity Kicker. After payment of the senior note and the contract
claim, additional amounts are due and payable based on availability of
Net Sale Proceeds or, if no sale. Net Appraisal Value. Holder's claim
equals 25% of any remaining proceeds or value.
H. Foxleigh Building Loan
1. B Note. B Note in the amount of $296,486, which does not accrue
interest and is payable in annual principal payments of $175,000 due
each April. Any such principal payments in excess of the amount of the
B Note are applied to reduce the senior note.
Reference should be made to the applicable loan documents for precise procedures
and directions with regard to calculating the foregoing interests.
<PAGE>
SCHEDULE III TO POOLING AND SERVICING AGREEMENT
NON-REMIC FEES
The right to receive 50% of the related mortgagee's interest in any loan
fees, assumption fees, extension fees, modification fees or default interest
collected under any of the loan documents relating to any Mortgage Loan.
