SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
Form 8-K
----------
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 12, 1998
MORGAN STANLEY CAPITAL I INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 333-62911 13-3291626
--------------- ------------------------ ----------------------
(State or Other (Commission File Number) (I.R.S. Employer
Jurisdiction Identification Number)
Incorporation)
----------
1585 Broadway
2nd Floor
New York, New York 10036
-----------------------------
(principal executive offices)
(212) 761-4000
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS
On November 12, 1998, a single series of certificates, entitled Morgan
Stanley Capital I Inc. Commercial Mortgage Pass-Through Certificates, Series
1998-HF2 (the "Certificates"), was issued pursuant to a pooling and servicing
agreement dated as of November 1, 1998 (the "Pooling and Servicing Agreement"),
attached hereto as Exhibit 4.1, among Morgan Stanley Capital I Inc. (the
"Depositor") as depositor, GMAC Commercial Mortgage Corporation, as master
servicer and as special servicer, LaSalle National Bank, as Trustee and ABN Amro
Bank N.V., as fiscal agent. The Certificates consist of eighteen classes
identified as the "Class A1 Certificates," the "Class A2 Certificates," the
"Class X Certificates," the "Class B Certificates," the "Class C Certificates,"
the "Class D Certificates," the "Class E Certificates," the "Class F
Certificates," the "Class G Certificates," the "Class H Certificates," the
"Class J Certificates," the "Class K Certificates," the "Class L Certificates,"
the "Class M Certificates," the "Class N Certificates," the "Class R-I
Certificates," the "Class R-II Certificates," and the "Class R-III
Certificates," respectively, and were issued in exchange for, and evidence the
entire beneficial ownership interest in, the assets of a trust fund (the "Trust
Fund") consisting primarily of a segregated pool (the "Mortgage Pool") of 262
fixed rate, multifamily and commercial mortgage loans (the "Mortgage Loans")
having, as of the close of business on November 1, 1998 (the "Cut-off Date"), an
aggregate principal balance of $1,058,111,956 after taking into account all
payments of principal due on the Mortgage Loans on or before such date, whether
or not received.
The Class A1 Certificates have an initial Class Principal Balance of
$203,500,000. The Class A2 Certificates have an initial Class Principal Balance
of $547,759,000. The Class X Certificates have an initial Class Notional Amount
of $1,058,111,956. The Class B Certificates have an initial Class Principal
Balance of $52,906,000. The Class C Certificates have an initial Class Principal
Balance of $52,905,000. The Class D Certificates have an initial Class Principal
Balance of $58,196,000. The Class E Certificates have an initial Class Principal
Balance of $21,163,000. The Class F Certificates have an initial Class Principal
Balance of $23,807,000. The Class G Certificates have an initial Class Principal
Balance of $18,517,000. The Class H Certificates have an initial Class Principal
Balance of $10,581,000. The Class J Certificates have an initial Class Principal
Balance of $21,162,000. The Class K Certificates have an initial Class Principal
Balance of $10,582,000. The Class L Certificates have an initial Class Principal
Balance of $15,871,000. The Class M Certificates have an initial Certificate
Principal Amount of $10,581,000. The Class N Certificates have an initial
Certificate Principal Amount of $10,581,956. Capitalized terms used and not
otherwise defined herein shall have the meanings assigned to them in the Pooling
and Servicing Agreement.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired
Not applicable.
(b) Pro Forma Financial Information
Not applicable.
(c) Exhibits.
Exhibit No.
of Item 601 of
Exhibit No. Regulation S-K Description
- ----------- -------------- -----------
4.1 4 Pooling and Servicing Agreement
dated as of November 1, 1998 among
Morgan Stanley Capital I Inc. as
depositor, GMAC Commercial Mortgage
Corporation as master servicer and
as special servicer, LaSalle
National Bank, as trustee, and ABN
Amro Bank N.V., as fiscal agent.
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: March 26, 1999
MORGAN STANLEY CAPITAL I INC.
By: /s/ Andrew Berman
--------------------
Name: Andrew Berman
Title: Vice President
3
================================================================================
MORGAN STANLEY CAPITAL I INC.,
AS DEPOSITOR,
AND
GMAC COMMERCIAL MORTGAGE CORPORATION
AS MASTER SERVICER,
AND
AS SPECIAL SERVICER,
AND
LASALLE NATIONAL BANK,
AS TRUSTEE,
AND
ABN AMRO BANK N.V.,
AS FISCAL AGENT,
POOLING AND SERVICING AGREEMENT
DATED AS OF NOVEMBER 1, 1998
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1998-HF2
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS.........................................................4
Section 1.1. Definitions.................................................4
Section 1.2. Certain Calculations in Respect of the
Mortgage Pool............................................43
Section 1.3. Interpretation.............................................44
ARTICLE II. DECLARATION OF TRUST; ISSUANCES OF CERTIFICATES...................45
Section 2.1. Conveyance of Mortgage Loans...............................45
Section 2.2. Acceptance by Trustee......................................46
Section 2.3. Sellers' Repurchase of Mortgage Loans for
Document Defects and Breaches of
Representations and Warranties...........................47
Section 2.4. Representations and Warranties.............................49
Section 2.5. Conveyance of Interests....................................50
ARTICLE III. THE CERTIFICATES.................................................50
Section 3.1. The Certificates...........................................50
Section 3.2. Registration...............................................51
Section 3.3. Transfer and Exchange of Certificates......................51
Section 3.4. Mutilated, Destroyed, Lost or Stolen
Certificates.............................................57
Section 3.5. Persons Deemed Owners......................................58
Section 3.6. Book-Entry Certificates....................................58
Section 3.7. Notices to Clearing Agency.................................59
Section 3.8. Definitive Certificates....................................59
ARTICLE IV. ADVANCES..........................................................60
Section 4.1. P&I Advances by Master Servicer............................60
Section 4.2. Servicing Advances.........................................61
Section 4.3. Advances by Trustee and Fiscal Agent.......................62
Section 4.4. Evidence of Nonrecoverability..............................63
Section 4.5. Advance Interest...........................................63
Section 4.6. Merger or Consolidation of Fiscal Agent....................63
Section 4.7. Limitation on Liability of the Fiscal Agent
and Others...............................................64
Section 4.8. Indemnification of Fiscal Agent............................64
ARTICLE V. COLLECTION ACCOUNT; DISTRIBUTION ACCOUNT;..........................64
CERTAIN TRUSTEE REPORTS.......................................................65
Section 5.1. Collection Account.........................................65
Section 5.2. Application of Funds in the Collection Account.............67
Section 5.3. Distribution Account.......................................70
Section 5.4. Trustee Reports; Access to Information.....................71
Section 5.5. Trustee Tax Reports........................................74
i
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ARTICLE VI. 74
DISTRIBUTIONS ................................................................75
Section 6.1. Distributions Generally...................................75
Section 6.2. REMIC I...................................................75
Section 6.3. REMIC II..................................................76
Section 6.4. REMIC III.................................................80
Section 6.5. Allocation of Realized Losses and Expense
Losses..................................................85
Section 6.6. Appraisal Reductions......................................86
Section 6.7. Compliance with Withholding Requirements..................86
ARTICLE VII. CONCERNING THE TRUSTEE AND THE FISCAL AGENT......................87
Section 7.1. Duties of Trustee and the Fiscal Agent....................87
Section 7.2. Certain Matters Affecting the Trustee and the
Fiscal Agent............................................88
Section 7.3. Trustee and Fiscal Agent Not Liable for
Certificates or Interests or Mortgage Loans.............90
Section 7.4. Trustee and the Fiscal Agent May Own
Certificates............................................90
Section 7.5. Eligibility Requirements for Trustee and
Fiscal Agent............................................90
Section 7.6. Resignation and Removal of Trustee or Fiscal
Agent...................................................91
Section 7.7. Successor Trustee or Fiscal Agent.........................92
Section 7.8. Merger or Consolidation of Trustee........................93
Section 7.9. Appointment of Co-Trustee, Separate Trustee or
Custodian...............................................93
Section 7.10. Authenticating Agents.....................................94
Section 7.11. Indemnification...........................................95
Section 7.12. Fees and Expenses of Trustee and Fiscal Agent.............96
Section 7.13. Collection of Moneys......................................97
Section 7.14. Notification to Holders...................................97
Section 7.15. Representations and Warranties of Trustee and
Fiscal Agent............................................97
Section 7.16. Fiscal Agent Termination Event............................99
Section 7.17. Procedure Upon Termination Event.........................100
Section 7.18. Impact of Year 2000 Compliance...........................100
ARTICLE VIII. ADMINISTRATION AND SERVICING OF MORTGAGE LOANS.................100
Section 8.1. Servicing Standard; General Powers and Duties............100
Section 8.2. Collection of Mortgage Loan Payments.....................102
Section 8.3. Collection of Taxes, Assessments and Similar
Items; Servicing Accounts and Reserve
Accounts...............................................103
Section 8.4. Sub-Servicing Agreements.................................104
Section 8.5. Maintenance of Insurance Policies; Errors and
Omissions and Fidelity Coverage........................106
Section 8.6. Enforcement of Due-On-Sale Clauses; Assumption
Agreements; Subordinate Financing......................108
Section 8.7. Realization Upon Defaulted Mortgage Loans................110
Section 8.8. Trustee to Cooperate; Release of Mortgage
Files..................................................113
Section 8.9. Documents, Records and Funds in Possession of
Master Servicer or Special Servicer to be
Held for Trustee for the Benefit of
Certificateholders.....................................114
Section 8.10. Servicing Compensation...................................114
ii
<PAGE>
Section 8.11. Master Servicer Reports; Account Statements..............116
Section 8.12. Annual Statement as to Compliance........................117
Section 8.13. Annual Independent Public Accountants' Servicing
Report.................................................117
Section 8.14. Certain Reports Regarding the Mortgage Loans
and the Mortgaged Properties...........................118
Section 8.15. Certain Available Information and Related
Rights of the Master Servicer and the Special
Servicer...............................................121
Section 8.16. Rule 144A Information....................................122
Section 8.17. Inspections; Collection of Financial
Statements.............................................123
Section 8.18. Modifications, Waivers, Amendments,
Extensions and Consents................................124
Section 8.19. Title to REO Property....................................127
Section 8.20. Management of REO Property...............................128
Section 8.21. Additional Obligations of the Master Servicer............130
Section 8.22. Representations, Warranties and Covenants of
the Master Servicer and the Special Servicer...........131
Section 8.23. Merger or Consolidation..................................132
Section 8.24. Resignation of Master Servicer or Special
Servicer...............................................133
Section 8.25. Assignment or Delegation of Duties by Master
Servicer or the Special Servicer.......................133
Section 8.26. Limitation on Liability of Master Servicer,
Special Servicer and Others............................134
Section 8.27. Indemnification; Third-Party Claims......................134
Section 8.28. Tax Reporting............................................136
Section 8.29. Certain Special Servicer Reports.........................136
Section 8.30. Qualification to Service.................................137
Section 8.31. Sale of Defaulted Mortgage Loans and REO
Properties.............................................137
Section 8.32. Operating Adviser; Elections.............................138
Section 8.33. Duties of Operating Adviser..............................139
Section 8.34. Exchange Act Reporting...................................140
Section 8.35. Credit Lease Servicing Provisions........................140
ARTICLE IX. DEFAULT..........................................................142
Section 9.1. Events of Default.........................................142
Section 9.2. Trustee to Act; Appointment of Successor..................144
Section 9.3. Notification to Certificateholders........................145
Section 9.4. Waiver of Events of Default...............................145
ARTICLE X. PURCHASE AND TERMINATION OF THE TRUST.............................145
Section 10.1. Termination of Trust.....................................145
Section 10.2. Procedure Upon Termination of Trust......................147
Section 10.3. Additional Trust Termination Requirements................147
ARTICLE XI. RIGHTS OF CERTIFICATEHOLDERS.....................................148
Section 11.1. Limitation on Rights of Holders..........................148
Section 11.2. Access to List of Holders................................149
Section 11.3. Acts of Holders of Certificates..........................150
iii
<PAGE>
ARTICLE XII. REMIC ADMINISTRATION............................................150
Section 12.1. REMIC Administration....................................150
Section 12.2. Prohibited Transactions and Activities..................155
Section 12.3. Liability with Respect to Certain Taxes and
Loss of REMIC Status..................................156
Section 12.4. Modifications of Mortgage Loans.........................156
ARTICLE XIII. MISCELLANEOUS PROVISIONS.......................................156
Section 13.1. Binding Nature of Agreement.............................156
Section 13.2. Entire Agreement........................................157
Section 13.3. Amendment...............................................157
Section 13.4. GOVERNING LAW...........................................158
Section 13.5. Notices.................................................158
Section 13.6. Severability of Provisions..............................158
Section 13.7. Indulgences; No Waivers.................................158
Section 13.8. Headings Not to Affect Interpretation...................159
Section 13.9. Benefits of Agreement...................................159
Section 13.10. Special Notices to the Rating Agencies..................159
Section 13.11. Counterparts............................................160
Section 13.12. Intention of Parties....................................160
Section 13.13. Recordation of Agreement................................162
iv
<PAGE>
EXHIBITS
Exhibit A-1 Form of Class A-1 Certificate..................................A-1
Exhibit A-2 Form of Class A-2 Certificate..................................A-2
Exhibit A-3 Form of Class B Certificate....................................A-3
Exhibit A-4 Form of Class C Certificate....................................A-4
Exhibit A-5 Form of Class D Certificate....................................A-5
Exhibit A-6 Form of Class E Certificate....................................A-6
Exhibit A-7 Form of Class F Certificate....................................A-7
Exhibit A-8 Form of Class G Certificate....................................A-8
Exhibit A-9 Form of Class H Certificate....................................A-9
Exhibit A-10 Form of Class J Certificate ..................................A-10
Exhibit A-11 Form of Class K Certificate ..................................A-11
Exhibit A-12 Form of Class R-I Certificate ................................A-13
Exhibit A-13 Form of Class R-II Certificate ...............................A-14
Exhibit A-14 Form of Class R-III Certificate ..............................A-15
Exhibit A-15 Form of Class X Certificate ..................................A-16
Exhibit B-1 Form of Initial Certification of Trustee.......................B-1
Exhibit B-2 Form of Final Certification of Trustee.........................B-2
Exhibit C Form of Request for Release......................................C
Exhibit D-1 Form of Transferor Certificate for Transfers of
Definitive Privately Offered Certificates....................D-1-1
Exhibit D-2A Form I of Transferee Certificate for Transfers of Definitive
Privately Offered Certificates..............................D-2A-1
Exhibit D-2B Form II of Transferee Certificate for Transfers of Definitive
Privately Offered Certificates..............................D-2B-1
Exhibit D-3A Form I of Transferee Certificate for Transfers of Interests in
Book-Entry Privately Offered Certificates...................D-3A-1
Exhibit D-3B Form II of Transferee Certificate for Transfers of Interests in
Book-Entry Privately Offered Certificates...................D-3B-1
Exhibit E Form of Transferor Certificate for Transfers of REMIC
Residual Certificate.............................................E
Exhibit F Form of Transfer Affidavit and Agreement for
Transfers of REMIC Residual Certificates.........................F
Exhibit G-1 Form of Monthly Certificateholder Report.......................G-1
Exhibit G-2 Form of Specially Serviced Asset Report........................G-2
Exhibit H-1 Comparative Financial Status Report............................H-1
Exhibit H-2 Delinquent Loan Status Report..................................H-2
Exhibit H-3 Historical Loan Modification Report............................H-3
Exhibit H-4 Historical Loss Estimate Report ...............................H-4
Exhibit H-5 REO Status Report .............................................H-5
Exhibit H-6 Watch List ....................................................H-6
Exhibit H-7 Operating Statement Analysis...................................H-7
Exhibit H-8 NOI Adjustment Worksheet ......................................H-8
Exhibit H-9 CSSA Reports ..................................................H-9
Exhibit H-10 CSSA Reports .................................................H-10
Exhibit H-11 CSSA Reports .................................................H-11
v
<PAGE>
SCHEDULES
Schedule I MSMC Loan Schedule...............................................I
Schedule II Heller Loan Schedule............................................II
Schedule III Credit Lease Loan Schedule ....................................III
Schedule IV Reserve Account Schedule........................................IV
vi
<PAGE>
THIS POOLING AND SERVICING AGREEMENT is dated and effective as of November 1,
1998 (this "AGREEMENT") among MORGAN STANLEY CAPITAL I INC., as depositor (the
"DEPOSITOR"), GMAC COMMERCIAL MORTGAGE CORPORATION as master servicer and as
special servicer (the "MASTER SERVICER" or "SPECIAL SERVICER", as applicable ),
LASALLE NATIONAL BANK, as trustee (the "TRUSTEE") of the trust created hereby
(the "TRUST"), and ABN AMRO BANK N.V., as fiscal agent (only in its capacity as
a party required to make Advances pursuant to Article IV hereof) (the "FISCAL
AGENT").
PRELIMINARY STATEMENT
On the Closing Date, the Depositor will acquire certain Mortgage
Loans from Heller Financial Capital Funding, Inc., as seller ("HELLER" and, in
such capacity, a "SELLER"), and the remaining Mortgage Loans from Morgan Stanley
Mortgage Capital Inc. ("MSMC" and also a "SELLER") and, as of such date, the
Depositor will be the owner of the Mortgage Loans (excluding the right to Excess
Interest in respect of the Hyper-Amortization Loans) and the other property
being conveyed by it to the Trustee for inclusion in the Trust. On the Closing
Date, the Depositor hereby creates the Trust and appoints the Trustee to serve
as trustee of the Trust. On the Closing Date, the Depositor will acquire (i) the
REMIC I Regular Interests and the Class R-I Certificates as consideration for
its transfer to the Trust of the Mortgage Loans and the other property
constituting the Trust described in the definition of "REMIC I"; (ii) the REMIC
II Regular Interests and the Class R-II Certificates as consideration for its
transfer of the REMIC I Regular Interests and the assets comprising the grantor
trust to the Trust; and (iii) the REMIC III Certificates as consideration for
its transfer of the REMIC II Regular Interests to the Trust. The Depositor has
duly authorized the execution and delivery of this Agreement to provide for the
foregoing and the issuance of (a) the REMIC I Regular Interests and the Class
R-I Certificates representing in the aggregate the entire beneficial ownership
of REMIC I, (b) the REMIC II Regular Interests and the Class R-II Certificates
representing in the aggregate the entire beneficial ownership of REMIC II and
(c) the REMIC III Certificates representing in the aggregate the entire
beneficial ownership of REMIC III, with the Class N Certificates representing
both an interest in REMIC III and the entire beneficial ownership of the assets
of the grantor trust. All covenants and agreements made by the Depositor and the
Trustee herein with respect to the Mortgage Loans and the other property
constituting the Trust are for the benefit of the Holders of the Certificates.
The parties hereto are entering into this Agreement, and the Trustee is
accepting the trusts created hereby, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged.
1
<PAGE>
REMIC I
As provided herein, the Trustee will make the election described in
Section 12.1 hereof for the segregated pool of assets consisting of the Mortgage
Loans (excluding the right to Excess Interest in respect of the
Hyper-Amortization Loans) and certain related assets to be treated for federal
income tax purposes as a real estate mortgage investment conduit (a "REMIC" and,
such particular segregated pool of assets, "REMIC I"). The REMIC I Regular
Interests will be designated as the "regular interests" in REMIC I and the Class
R-I Certificates will be designated as the sole class of "residual interests" in
REMIC I.
A separate uncertificated REMIC I Regular Interest will be issued
with respect to each Mortgage Loan. Each REMIC I Regular Interest will represent
the right to receive principal corresponding to the initial Stated Principal
Balance of a related Mortgage Loan and interest thereon at a remittance rate
(the "REMIC I REMITTANCE RATE") equal to the Net Mortgage Rate of the related
Mortgage Loan in effect. For purposes of Treasury regulation Section 1.860G-1
(a)(4)(iii), the "latest possible maturity date" for each REMIC I Regular
Interest shall be the Final Rated Distribution Date. The Class R-I Certificates
will represent the sole class of residual interests in REMIC I for purposes of
the REMIC Provisions and will have no principal balances and no remittance rate,
but will be entitled to receive on each Distribution Date any portion of the
Available Distribution Amount for such Distribution Date not otherwise deemed
distributed on the REMIC I Regular Interests.
REMIC II
As provided herein, the Trustee will make the election described in
Section 12.1 hereof for the segregated pool of assets consisting of the REMIC I
Regular Interests to be treated for federal income tax purposes as a separate
REMIC (such particular pool of assets, "REMIC II"). The REMIC II Regular
Interests will be designated as representing the "regular interests" in REMIC II
and the Class R-II Certificates will be designated as representing the sole
class of "residual interests" in REMIC II for purposes of the REMIC Provisions.
Fourteen separate uncertificated REMIC II Regular Interests will be
issued and are designated as the "regular interests" in REMIC II. The following
table irrevocably sets forth the designation, remittance rate (the "REMIC II
REMITTANCE RATE") and initial Uncertificated Principal Balance for each REMIC II
Regular Interest. For purposes of Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" of each REMIC II
Regular Interest shall be the Final Rated Distribution Date. The Class R-II
Certificates will have no principal balances and no remittance rate, but will be
entitled to receive on each Distribution Date any portion of the REMIC II
Distribution Amount for such Distribution Date not otherwise deemed distributed
on the REMIC II Regular Interests.
REMIC II REGULAR INTERESTS
- --------------------------------------------------------------------------------
REMIC II Initial Uncertificated
Designation Remittance Rate Principal Balance
----------- --------------- -----------------
- --------------------------------------------------------------------------------
A-1 7.1748% $203,500,000
- --------------------------------------------------------------------------------
A-2 7.1748% 547,759,000
- --------------------------------------------------------------------------------
B 7.1748% 52,906,000
- --------------------------------------------------------------------------------
C 7.1748% 52,905,000
- --------------------------------------------------------------------------------
D 7.1748% 58,196,000
- --------------------------------------------------------------------------------
E 7.1748% 21,163,000
- --------------------------------------------------------------------------------
2
<PAGE>
- --------------------------------------------------------------------------------
REMIC II Initial Uncertificated
Designation Remittance Rate Principal Balance
----------- --------------- -----------------
- --------------------------------------------------------------------------------
F 7.1748% 23,807,000
- --------------------------------------------------------------------------------
G 7.1748% 18,517,000
- --------------------------------------------------------------------------------
H 7.1748% 10,581,000
- --------------------------------------------------------------------------------
J 7.1748% 21,162,000
- --------------------------------------------------------------------------------
K 7.1748% 10,582,000
- --------------------------------------------------------------------------------
L 7.1748% 15,871,000
- --------------------------------------------------------------------------------
M 7.1748% 10,581,000
- --------------------------------------------------------------------------------
N 7.1748% 10,581,956
- --------------------------------------------------------------------------------
REMIC III
As provided herein, the Trustee will make the election described in
Section 12.1 for the segregated pool of assets hereof consisting of the REMIC II
Regular Interests to be treated for federal income tax purposes as a separate
REMIC (such particular pool of assets, "REMIC III"). The REMIC III Regular
Certificates (and, in the case of the Class N Certificates, the Class N REMIC
Interest represented by the Class N Certificates) will be designated as
representing the "regular interests" in REMIC III and the Class R-III
Certificates will be designated as representing the sole class of "residual
interests" in REMIC III for purposes of the REMIC Provisions.
Fifteen separate Classes of REMIC III Regular Certificates will be
issued. The following table irrevocably sets forth the designation, the
pass-through rate (the "PASS-THROUGH RATE") and the initial aggregate principal
balance (the "CLASS PRINCIPAL BALANCE") for each Class of REMIC III Regular
Certificates. For purposes of Treasury regulation Section 1.860G-1 (a)(4)(iii),
the "latest possible maturity date" of each Class of REMIC III Regular
Certificates shall be the Final Rated Distribution Date. The Class R-III
Certificates will have no principal balances and no pass-through rate, but will
be entitled to receive on each Distribution Date any portion of the REMIC III
Distribution Amount for such Distribution Date not otherwise deemed distributed
on the REMIC III Regular Certificates.
REMIC III REGULAR CERTIFICATES
- --------------------------------------------------------------------------------
Initial Class
Designation Pass-Through Rate Principal Balance
----------- ----------------- -----------------
- --------------------------------------------------------------------------------
Class A-1 6.01% per annum $203,500,000
- --------------------------------------------------------------------------------
Class A-2 6.48% per annum $547,759,000
- --------------------------------------------------------------------------------
Class X 0.75% per annum(1) $1,058,111,956(2)
- --------------------------------------------------------------------------------
Class B 6.71% per annum(1) $52,906,000
- --------------------------------------------------------------------------------
- ----------
(1) The Pass-Through Rate for the Class X, Class B, Class C, Class D and E
Certificates is variable and, subsequent to the initial Distribution Date,
will be determined as described herein under the definition of
"Pass-Through Rate".
(2) For purposes of the REMIC Provisions, the Class X Certificates shall be
treated as comprised of fourteen component interests, each related to a
separate uncertificated REMIC II Regular Interest. The Initial Class
Balance, which is a notional amount and does not represent an entitlement
to any distribution of principal, is the sum of the notional amounts of
such component interests as of the Closing Date.
3
<PAGE>
- --------------------------------------------------------------------------------
Class C 7.11% per annum(1) $52,905,000
- --------------------------------------------------------------------------------
Class D 7.15% per annum(1) $58,196,000
- --------------------------------------------------------------------------------
Class E 7.15% per annum(1) $21,163,000
- --------------------------------------------------------------------------------
Class F 6.01% per annum $23,807,000
- --------------------------------------------------------------------------------
Class G 6.01% per annum $18,517,000
- --------------------------------------------------------------------------------
Class H 6.01% per annum $10,581,000
- --------------------------------------------------------------------------------
Class J 6.01% per annum $21,162,000
- --------------------------------------------------------------------------------
Class K 6.01% per annum $10,582,000
- --------------------------------------------------------------------------------
Class L 6.01% per annum $15,871,000
- --------------------------------------------------------------------------------
Class M 6.01% per annum $10,581,000
- --------------------------------------------------------------------------------
Class N 6.01% per annum $10,581,956
- --------------------------------------------------------------------------------
ARTICLE I.
DEFINITIONS
SECTION 1.1. DEFINITIONS. Whenever used in this Agreement, including
without limitation in the Preliminary Statement, the following words and
phrases, unless the context otherwise requires, shall have the following
meanings:
"ACCOUNTANT" means a person engaged in the practice of accounting
who is Independent and is a member of the American Institute of Certified Public
Accountants.
"ACCRUED CERTIFICATE INTEREST" means with respect to any Class of
REMIC III Regular Certificates (other than the Class X Certificates) for any
Distribution Date, the product of the Certificate Principal Balance of such
Class as of the close of the preceding Distribution Date (or, in the case of the
first Distribution Date, as of the Closing Date) and one-twelfth of the
applicable Pass-Through Rate; and with respect to the Class X Certificates, the
Class X Accrued Certificate Interest. The Accrued Certificate Interest in
respect of each Class of REMIC III Regular Certificates for each Distribution
Date shall accrue on the basis of a 360-day year consisting of twelve 30-day
months.
"ACT" shall have the meaning set forth in Section 11.3.
"ADDITIONAL MASTER SERVICING COMPENSATION" has the meaning set forth
in Section 8.10(a).
"ADDITIONAL RIGHT": With respect to any Double Net Lease or Triple
Net Lease, any termination or abatement rights of the related Credit Tenant
arising from a Mortgagor's default under such Double Net Lease or Triple Net
Lease in performing certain obligations including, without limitation,
environmental remediation not caused by the Credit Tenant, enforcement of
restrictive covenants affecting other property owned by the Mortgagor,
compliance with laws affecting the related Mortgaged Property or common areas
relating to such Mortgaged Property.
"ADDITIONAL SPECIAL SERVICING COMPENSATION" has the meaning set
forth in Section 8.10(b).
"ADDITIONAL TRUST EXPENSE" means any of the following items: (a)
Special Servicing Fees, Liquidation Fees and Workout Fees; (b) Advance Interest
not paid out of Default Interest or Late Fees; (c) amounts paid by the Trust to
indemnify the Master Servicer, the Special Servicer, the Trustee,
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the Fiscal Agent or any other Person pursuant to the terms of this Agreement;
(d) the items described in clauses (ix) and (xiii) of Section 5.2(b); (e) to the
extent not covered by indemnification by one of the parties hereto or paid by a
source other than the Trust, any federal, state or local taxes imposed on the
Trust or any of its assets or transactions; and (f) to the extent not included
in the calculation of a Realized Loss and not covered by indemnification by one
of the parties hereto or otherwise, any other unanticipated cost, liability, or
expense of the Trust which the Trust has not recovered, and in the judgment of
the Master Servicer (or, in the case of a Specially Serviced Mortgage Loan, the
Special Servicer) will not recover, from the related Mortgagor or Mortgaged
Property or otherwise.
"ADVANCE" means any P&I Advance or Servicing Advance.
"ADVANCE INTEREST" means interest payable pursuant to Section 4.5 to
the Master Servicer, the Special Servicer, the Trustee or the Fiscal Agent on
outstanding Advances made by any such Person out of its own funds.
"ADVANCE RATE" means a per annum rate equal to the Prime Rate as
published in the "Money Rates" section of The Wall Street Journal from time to
time or such other publication as determined by the Trustee in its reasonable
discretion.
"ADVERSE REMIC EVENT" shall have the meaning set forth in Section
12.1(j).
"AFFILIATE" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"AGREEMENT" means this Pooling and Servicing Agreement and all
amendments and supplements hereto.
"APPRAISAL" means an appraisal by a Qualified Appraiser that is
prepared in accordance with 12 C.F.R. 225.64.
"APPRAISAL EVENT" means, with respect to any Mortgage Loan
(including without limitation an REO Mortgage Loan), not later than the earliest
of (i) the date 120 days after the occurrence of any delinquency in payment with
respect to such Mortgage Loan if such delinquency remains uncured, (ii) the date
60 days after receipt of notice that the related Mortgagor has filed a
bankruptcy petition or a receiver is appointed in respect of the related
Mortgaged Property, provided such petition or appointment is still in effect,
(iii) the effective date of any modification to a Money Term of a Mortgage Loan,
other than the extension of the date that a Balloon Payment is due for a period
of less than six months from the initial maturity date, and (iv) the date 30
days following the date the related Mortgaged Property becomes an REO Property.
"APPRAISAL REDUCTION" means, with respect to any Required Appraisal
Loan with respect to which an Appraisal or internal valuation is performed
pursuant to Section 6.6, an amount, calculated as of the first Determination
Date that is at least fifteen days after the date on which the report in respect
of the most recent such Appraisal or internal valuation, as the case may be, is
performed, equal to the excess, if any, of (a) the sum of (i) the Stated
Principal Balance of such Required Appraisal Loan, (ii) to the extent not
previously advanced, all unpaid interest on such Mortgage Loan at a per annum
rate
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equal to the Mortgage Rate, (iii) all unreimbursed Advances and interest on
Advances at the Advance Rate with respect to such Mortgage Loan, and (iv) to the
extent not previously advanced by the Master Servicer, the Trustee or the Fiscal
Agent, all currently due and unpaid real estate taxes and assessments, insurance
premiums and, if applicable, ground rents in respect of the related Mortgaged
Property or REO Property, as the case may be (in each case, net of any amounts
escrowed for such items), over (b) 90% of the Appraised Value (net of any prior
mortgage liens) of the related Mortgaged Property or REO Property as determined
by such Appraisal or internal valuation, as the case may be. Each Appraisal or
internal valuation for a Required Appraisal Loan shall be updated annually. The
Appraisal Reduction for each Required Appraisal Loan will be recalculated based
on subsequent Appraisals, internal valuations or updates. Notwithstanding the
foregoing, if an internal valuation of the Mortgaged Property is performed, the
Appraisal Reduction will equal the greater of (A) the amount calculated above
and (B) 25% of the Stated Principal Balance of the Mortgage Loan. Furthermore,
if an appraisal is not obtained from an MAI appraiser following the earliest of
the dates described in clauses (i)-(iv) in the definition of "Appraisal Event",
then until such an appraisal is obtained the Appraisal Reduction will equal 25%
of the Stated Principal Balance of the Mortgage Loan. Each Appraisal Reduction
will be reduced to zero as of the date the related Mortgage Loan is brought
current under the then-current terms of the Mortgage Loan for at least three
consecutive months, paid in full, liquidated, repurchased or otherwise disposed
of. An appraisal for any Required Appraisal Loan that has not been brought
current for at least three consecutive months (or paid in full, liquidated,
repurchased or otherwise disposed of) will be updated annually, with
corresponding adjustments to the amount of the Appraisal Reduction.
"APPRAISED VALUE" means, with respect to any Mortgaged Property or
REO Property, the appraised value thereof determined by an Appraisal of such
property or, in the case of an internal valuation performed pursuant to Section
6.6, the value of such property determined by such internal valuation.
"ASSET STATUS REPORT " has the meaning set forth in Section 8.29(c).
"ASSIGNMENT OF LEASES" means, with respect to any Mortgage Loan, any
assignment of leases, rents and profits or equivalent instrument, whether
contained in the related Mortgage or executed separately, assigning to the
holder or holders of such Mortgage all of the related Mortgagor's interest in
the leases, rents and profits derived from the ownership, operation, leasing or
disposition of all or a portion of the related Mortgaged Property as security
for repayment of such Mortgage Loan.
"ASSIGNMENT OF MORTGAGE" means an assignment of the Mortgage, notice
of transfer or equivalent instrument, in recordable form, sufficient under the
laws of the jurisdiction wherein the related Mortgaged Property is located to
reflect the transfer of the Mortgage to the Trustee, which assignment, notice of
transfer or equivalent instrument may be in the form of one or more blanket
assignments covering the Mortgage Loans secured by Mortgaged Properties located
in the same jurisdiction, if permitted by law.
"ASSUMED MONTHLY PAYMENT" means, (a) with respect to any Balloon
Mortgage Loan (other than a Balloon Mortgage Loan that has become an REO
Mortgage Loan) for its Stated Maturity Date (provided that such Mortgage Loan
has not been paid in full, and no other Liquidation Event has occurred in
respect thereof, on or before the end of the Collection Period in which such
Stated Maturity Date occurs) and for any subsequent Due Date therefor as of
which such Mortgage Loan remains outstanding and part of the Trust Fund, if no
Monthly Payment (other than the related delinquent Balloon Payment) is otherwise
due for such Due Date, the scheduled monthly payment of principal and/or
interest deemed to be due in respect thereof for such Due Date equal to the
Monthly Payment (other than any related delinquent Balloon Payment) that would
have been due in respect of such Mortgage Loan on such
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Due Date if it had been required to continue to accrue interest in accordance
with its terms, and to pay principal in accordance with the amortization
schedule (if any), in effect immediately prior to, and without regard to the
occurrence of, its most recent scheduled Maturity Date; and (b) with respect to
any REO Mortgage Loan, for any Due Date therefor as of which the related REO
Property remains part of the Trust Fund, the scheduled monthly payment of
principal and/or interest deemed to be due in respect thereof on such Due Date
equal to the Monthly Payment (or, in the case of a Balloon Mortgage Loan
described in clause (a) of this definition, the Assumed Monthly Payment) that
was due in respect of the subject Mortgage Loan for the last Due Date prior to
its becoming an REO Mortgage Loan.
"AUTHENTICATING AGENT" means any authenticating agent appointed by
the Trustee pursuant to Section 7.10.
"AUTHORIZED OFFICER" means any Person that may execute an Officer's
Certificate on behalf of the Depositor.
"AVAILABLE DISTRIBUTION AMOUNT" means (x) with respect to REMIC I
and any Distribution Date, an amount equal to the aggregate of (a) all amounts
on deposit in the Distribution Account as of the commencement of business on
such Distribution Date that represent payments and other collections on or in
respect of the Mortgage Loans and any REO Properties that were received by the
Master Servicer or the Special Servicer through the end of the related
Collection Period (exclusive of any such amounts that were deposited in the
Distribution Account in error, that are payable to the Trustee in respect of
unpaid Trustee Fees, that are Excess Interest or that constitute Prepayment
Premiums) and (b) if and to the extent not already among the amounts described
in clause (a), (i) the aggregate amount of any P&I Advances made by the Master
Servicer, the Trustee or the Fiscal Agent for such Distribution Date pursuant to
Section 4.1 and/or Section 4.3, and (ii) the aggregate of any Compensating
Interest Payments made by the Master Servicer for such Distribution Date
pursuant to Section 8.21(b); (y) with respect to REMIC II and any Distribution
Date, all amounts distributed on the REMIC I Regular Interests; and (z) with
respect to REMIC III and any Distribution Date, all amounts distributed on the
REMIC II Regular Interests.
"BALLOON MORTGAGE LOAN" means any Mortgage Loan that by its original
terms or by virtue of any modification entered into as of the Closing Date
provides for an amortization schedule extending beyond its Maturity Date.
"BALLOON PAYMENT" means, with respect to any Balloon Mortgage Loan
as of any date of determination, the Monthly Payment payable on the Maturity
Date of such Mortgage Loan.
"BANKRUPTCY CODE" means, the federal bankruptcy code, as amended
from time to time (Title II of the United States Code).
"BOOK-ENTRY CERTIFICATES" means certificates evidencing a beneficial
interest in a Class of Certificates, ownership and transfer of which shall be
made through book entries as described in Section 3.6; provided, that after the
occurrence of a condition whereupon book-entry registration and transfer are no
longer authorized and Definitive Certificates are to be issued to the
Certificate Owners, such certificates shall no longer be "Book-Entry
Certificates."
"BREACH" has the meaning set forth in Section 2.3(a).
"BUSINESS DAY" means any day other than (i) a Saturday or a Sunday,
(ii) a legal holiday in New York, New York or in any of the principal cities in
which the Trustee, the Master Servicer or the
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Special Servicer conducts trust or servicing operations with respect to this
Agreement, or (iii) a day on which banking institutions or savings associations
in New York, New York or in any of the principal cities in which the Trustee,
the Master Servicer or the Special Servicer conducts trust or servicing
operations with respect to this Agreement, are authorized or obligated by law or
executive order to be closed.
"CASH LIQUIDATION" means, as to any defaulted Mortgage Loan other
than an REO Mortgage Loan, the receipt of all related Insurance Proceeds,
Condemnation Proceeds, Liquidation Proceeds and other payments or recoveries in
connection with a Final Recovery Determination.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. ss.9601, et
seq.).
"CERTIFICATES" means the Depositor's Series 1998-HF2 Commercial
Mortgage Pass-Through Certificates issued hereunder.
"CERTIFICATE FACTOR" means, with respect to any Class of REMIC III
Regular Certificates, as of any date of determination, a fraction, expressed as
a decimal carried to eight places, the numerator of which is the then-related
Class Principal Balance or Class X Notional Amount, as the case may be, and the
denominator of which is the related initial Class Principal Balance or initial
Class X Notional Amount, as the case may be, as of the Closing Date.
"CERTIFICATE NOTIONAL AMOUNT" means, with respect to any Class X
Certificate as of any date of determination, the then notional principal amount
on which such Certificate accrues interest equal to the product of (a) the
Percentage Interest evidenced by such Certificate, multiplied by (b) the then
Class X Notional Amount. For purposes of the REMIC Provisions, the Class X
Notional Amount may be described as the Sum of the Component Notional Amounts of
the Component Interests at such time.
"CERTIFICATE OWNER" means, with respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Certificate as reflected on the
books of the Clearing Agency or on the books of a Person maintaining an account
with the Clearing Agency directly or as an indirect participant, in accordance
with the rules of the Clearing Agency.
"CERTIFICATE PRINCIPAL BALANCE" means, with respect to any Principal
Balance Certificate, as of any date of determination, the then-outstanding
principal amount of such Certificate equal to the product of (a) the Percentage
Interest evidenced by such Certificate, multiplied by (b) the then Class
Principal Balance of the Class of Certificates to which such Certificate
belongs.
"CERTIFICATE REGISTER" has the meaning provided in Section 3.2.
"CERTIFICATE REGISTRAR" means the registrar appointed pursuant to
Section 3.2.
"CERTIFICATEHOLDER" has the same meaning as "Holder."
"CLASS" means, collectively, all of the Certificates bearing the
same alphabetical or alphanumerical class designation.
"CLASS A-1 CERTIFICATES," "CLASS A-2 CERTIFICATES," "CLASS X
CERTIFICATES," "CLASS B CERTIFICATES," "CLASS C CERTIFICATES," "CLASS D
CERTIFICATES," "CLASS E CERTIFICATES," "CLASS F
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CERTIFICATES," "CLASS G CERTIFICATES," "CLASS H CERTIFICATES," "CLASS J
CERTIFICATES," "CLASS K CERTIFICATES," "CLASS L CERTIFICATES," "CLASS M
CERTIFICATES," "CLASS N CERTIFICATES," "CLASS R-I CERTIFICATES," "CLASS R-II
CERTIFICATES," and "CLASS R-III CERTIFICATES" mean the Certificates designated
as "Class A-1," "Class A-2," "Class X," "Class B," "Class C," "Class D," "Class
E," "Class F," "Class G," "Class H," "Class J," "Class K," "Class L, " "Class
M", "Class N," "Class R-I," "Class R-II," and "Class R-III," respectively, on
the faces thereof, in substantially the forms attached hereto as Exhibits A-1
through A-18 hereof.
"CLASS A CERTIFICATES" means the Class A-1 Certificates and Class
A-2 Certificates, collectively.
"CLASS B CERTIFICATE RATE" means, with respect to any Distribution
Date, one-twelfth of (x) the REMIC II Remittance Rate minus (y) 0.46%.
"CLASS C CERTIFICATE RATE" means, with respect to any Distribution
Date, one-twelfth of (x) the REMIC II Remittance Rate minus (y) 0.06%.
"CLASS D CERTIFICATE RATE" means, with respect to any Distribution
Date, one-twelfth of (x) the REMIC II Remittance Rate minus (y) 0.02%.
"CLASS E CERTIFICATE RATE" means, with respect to any Distribution
Date, one-twelfth of (x) the REMIC II Remittance Rate minus (y) 0.02%.
"CLASS INTEREST SHORTFALL" means, with respect to any Class of
Principal Balance Certificates and any Distribution Date (except the initial
Distribution Date, with respect to which the Class Interest Shortfall for each
such Class will equal zero), the sum of (a) the excess, if any, of (i) all
Distributable Certificate Interest in respect of such Class of Certificates for
the immediately preceding Distribution Date, over (ii) all distributions of
Distributable Certificate Interest made with respect to such Class of
Certificates on the immediately preceding Distribution Date pursuant to Section
6.4, and (b), to the extent permitted by applicable law, interest for the
related Interest Accrual Period accrued at the applicable Pass-Through Rate on
the amount of any such excess described in the immediately preceding clause (a).
With respect to any Class of Principal Balance Certificates, the interest
referred to in clause (b) of the preceding sentence shall accrue on the basis of
a 360-day year consisting of twelve 30-day months.
"CLASS N GRANTOR TRUST INTEREST" means that portion of the rights
represented by the Class N Certificate that evidences beneficial ownership of
the grantor trust assets, as described in Section 12.1(a) hereof.
"CLASS N REMIC INTEREST" means that portion of the rights
represented by the Class N Certificate that evidences a regular interest in
REMIC III, which rights consist of the rights to the distributions described in
Section 6.4 hereof and all other rights of the Holders of the Class N
Certificates other than those comprising the Class N Grantor Trust Interest.
"CLASS PRINCIPAL BALANCE" means the aggregate principal amount of
any Class of Principal Balance Certificates outstanding as of any date of
determination. On each Distribution Date, the Class Principal Balance of each
Class of the Principal Balance Certificates shall be reduced by the amount of
any distributions of principal made thereon on such Distribution Date pursuant
to Section 6.4
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and, if and to the extent appropriate, shall be further reduced on such
Distribution Date as provided in Section 6.5.
"CLASS X ACCRUED CERTIFICATE INTEREST" means, with respect to any
Distribution Date, the product of the Class X Notional Amount as of the close of
business on the preceding Distribution Date and one-twelfth of the Class X
Certificate Rate. For purposes of the REMIC Provisions, Class X Accrued
Certificate Interest, with respect to such Class and any Distribution Date, may
be expressed as the sum of the products of the Component Notional Amount of each
Component Interest on such Distribution Date and one-twelfth of the Component
Interest Rate for such Component Interest. Class X Accrued Certificate Interest
shall be calculated on the basis of a 360-day year consisting of twelve 30-day
months.
"CLASS X CERTIFICATE RATE" means, with respect to any Distribution
Date, the excess of (x) REMIC II Remittance Rate over (y) the weighted average
of the Pass-Through Rates of the Principal Balance Certificates (weighted on the
basis of their respective Certificate Balances on such Distribution Date).
"CLASS X CERTIFICATES" means the Class of Certificates, representing
fourteen Classes of "regular interests" in REMIC III within the meaning of the
REMIC Provisions, that is entitled on each Distribution Date to receive Accrued
Certificate Interest for such Class, and, Prepayment Premiums collected during
the related period to the extent set forth in Section 6.4(c), and is designated
as Class X on the face thereof.
"CLASS X NOTIONAL AMOUNT" means the notional principal amount by
reference to which the amount of interest payable to the Holders of the Class X
Certificates is computed and described, which, as of any date of determination,
is equal to the aggregate Class Principal Balances of the Principal Balance
Certificates on such date. For purposes of the REMIC Provisions, the Class X
Notional Amount may be expressed as the sum of the Component Notional Amounts of
all Component Interests of the Class X Certificates as of the date of
determination. The Class X Notional Amount does not represent a right to receive
distributions in respect of amount of principal from the Trust.
"CLEARING AGENCY" shall mean an organization registered as a
"clearing agency" pursuant to Section 17A of the 1934 Act, which initially shall
be the Depository.
"CLOSING DATE" means November 12, 1998.
"CODE" means the Internal Revenue Code of 1986, as amended, any
successor statutes thereto, and applicable U.S. Department of Treasury
regulations issued pursuant thereto in temporary or final form and proposed
regulations thereunder, to the extent applicable to the Trust or any REMIC Pool
by reason of their proposed effective dates.
"COLLECTION ACCOUNT" has the meaning set forth in Section 5.1(a).
"COLLECTION PERIOD" means, with respect to any Distribution Date,
the period beginning on the day after the Determination Date in the month
preceding the month of such Distribution Date (or, in the case of the first
Distribution Date, on the day after the Cut-off Date) and ending on the
Determination Date in the month in which the Distribution Date occurs.
"COMPARATIVE FINANCIAL STATUS REPORT": A report substantially
containing the content described in Exhibit H-1 attached hereto, prepared in
accordance with Section 8.14(j). For the purposes
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of the Master Servicer's production of any such report that is required to state
information for any period prior to the Cut-off Date, the Master Servicer may
conclusively rely (without independent verification), absent manifest error, on
information provided to it by the related Mortgage Loan Seller.
"COMPENSATING INTEREST PAYMENTS" means, with respect to any
Distribution Date, any payments required to be made by the Master Servicer
pursuant to Section 8.21(b) to cover Prepayment Interest Shortfalls.
"COMPONENT INTEREST" means any of the fourteen component "regular
interests" (within the meaning of the REMIC Provisions) comprising the Class X
Certificates, each of which relates to a separate Class of REMIC II Regular
Interest and bears interest at the Component Interest Rate for such Class on a
notional amount equal to the Uncertificated Principal Balance of the Class of
REMIC II Regular Interests related to such Class (its "Component Notional
Amount"). The Component Interests are designated as Class A-1X, Class A-2X,
Class BX, Class CX, Class DX, Class EX, Class FX, Class GX, Class HX, Class JX,
Class KX, Class LX, Class MX, Class NX which interests relate to REMIC II
Regular Interest A-1, A-2, B, C, D, E, F, G, H, J, K, L, M and N, respectively.
"COMPONENT INTEREST RATE" means, with respect to any Component
Interest, the per annum rate equal to the excess of the REMIC II Remittance Rate
for its related Class of REMIC II Regular Interest over the Pass-Through Rate
for the Class of Certificates bearing the same alphabetical designation as such
Component Interest's related Class of REMIC II Regular Interests.
"COMPONENT NOTIONAL AMOUNT" shall have the meaning set forth in the
definition of "Component Interest".
"CONDEMNATION PROCEEDS" means any awards resulting from the full or
partial condemnation or any eminent domain proceeding or any conveyance in lieu
or in anticipation thereof with respect to a Mortgaged Property or REO Property
by or to any governmental or quasi-governmental authority.
"CONTROLLING CLASS" means the most subordinate Class of Principal
Balance Certificates outstanding at any time of determination (or, if the then
Class Principal Balance of such Class of Certificates is less than 25% of the
initial Class Principal Balance thereof and there is a more senior Class of
Principal Balance Certificates then outstanding, the next most subordinate Class
of Principal Balance Certificates). For purposes of determining the Controlling
Class, the Class A Certificates will be treated as a single Class of
Certificates, the Subordinate Certificates will be subordinate to the Class A
Certificates, and each Class of Subordinate Certificates will be subordinate to
each other Class of Subordinate Certificates, if any, with an earlier
alphabetical Class designation. As of the Closing Date, the Controlling Class
will be the Class N Certificates.
"CONTROLLING PERSON" means, with respect to any Person, any other
Person that constitutes a "controlling person" within the meaning of Section 15
of the Securities Act.
"CORPORATE TRUST OFFICE" means, with respect to the presentment and
surrender of Certificates for the final distribution thereon or the presentment
and surrender of Certificates for any other purpose, the principal corporate
trust office of the Trustee or the New York Presenting Office (if any). The
principal corporate trust office of the Trustee is presently located at 135
South LaSalle Street, Suite 1625, Chicago, IL 60603, Attention: Asset-Backed
Securities Trust Services Group-Morgan
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Stanley Series 1998-HF2, or at such other address as the Trustee may designate
from time to time by notice to the Certificateholders, the Depositor, the Master
Servicer and the Special Servicer.
"CORRECTED MORTGAGE LOAN" means any Mortgage Loan that had been a
Specially Serviced Mortgage Loan, has ceased to be such in accordance with the
definition of "Specially Serviced Mortgage Loan" (other than by reason of a
Liquidation Event occurring in respect of such Mortgage Loan or a related
Mortgaged Property becoming an REO Property) and is not the subject of an
existing Servicing Transfer Event.
"CPR" means an assumed constant rate of prepayment each month (which
is quoted on a per annum basis) relative to the then-outstanding principal
balance of a pool of mortgage loans for the life of such mortgage loans.
"CREDIT LEASE": A lease securing a Credit Lease Loan.
"CREDIT LEASE LOANS" means, a Mortgage Loan secured by a Mortgaged
Property net leased to a tenant, a list of which is attached hereto as Schedule
III.
"CREDIT TENANT": The Tenant under a Credit Lease securing a Credit
Lease Loan.
"CROSS-COLLATERALIZED MORTGAGE LOANS" means any two or more Mortgage
Loans listed on the Mortgage Loan Schedule that are cross-collateralized with
each other.
"CSSA REPORTS": With respect to the Mortgage Loans, data files which
contain the information substantially in the forms of the CSSA standard
reporting package attached as Exhibits H-9, H-10 and H-11.
"CURRENT PRINCIPAL DISTRIBUTION AMOUNT" means with respect to the
Mortgage Loans for any Distribution Date, an amount equal to the aggregate of:
(a) the principal portions of all Monthly Payments (other than
Balloon Payments) and any Assumed Monthly Payments due or deemed due, as the
case may be, in respect of the Mortgage Loans, including without limitation any
REO Mortgage Loans, for their respective Due Dates occurring during the related
Collection Period; and
(b) that portion of all payments (including without limitation
Principal Prepayments and Balloon Payments but excluding any Excess Interest),
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, Repurchase
Proceeds, payments of Substitution Shortfall Amounts, REO Income and other
collections that were received on or in respect of the Mortgage Loans (including
without limitation any REO Mortgage Loans) or received on or in respect of any
related REO Properties, during the related Collection Period and were identified
and applied by the Master Servicer in accordance with Section 1.2 as payments or
other recoveries of principal of such Mortgage Loans, in each case net of any
portion of such amounts that represents (i) a payment or other recovery of the
principal portion of any Monthly Payment (other than a Balloon Payment) due, or
of the principal portion of any Assumed Monthly Payment deemed due, in respect
of any such Mortgage Loan on a Due Date during or prior to the related
Collection Period and not previously paid or recovered or (ii) an early payment
(other than in the form of a Principal Prepayment) of the principal portion of
any Monthly Payment due in respect of any such Mortgage Loan on a Due Date
subsequent to the end of the related Collection Period.
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"CUSTODIAN" means the Trustee or any Person who is appointed by the
Trustee at any time as custodian pursuant to Section 7.9(h) and who is
unaffiliated with the Depositor and each Seller.
"CUT-OFF DATE" means November 1, 1998.
"CUT-OFF DATE PRINCIPAL BALANCE" means, with respect to any Mortgage
Loan included in the Trust Fund as of the Closing Date, the unpaid principal
balance of such Mortgage Loan as of the Cut-off Date, reduced by all payments of
principal due on or before the Cut-off Date, whether or not paid.
"DCR" means Duff & Phelps Credit Rating Co. or its successor in
interest.
"DEBT SERVICE COVERAGE RATIO" means, with respect to any Mortgage
Loan (or group of Cross-Collateralized Mortgage Loans) for any specified period,
the debt service coverage ratio calculated in accordance with Exhibit H.
"DEBT SERVICE REDUCTION AMOUNT" means, with respect to any Mortgage
Loan for any Due Date, the amount of the reduction of the Monthly Payment for
such Due Date with respect to such Mortgage Loan as a result of any proceeding
under bankruptcy law or any similar proceeding (other than a Deficient Valuation
Amount); provided, however, that in the case of an amount that is deferred, but
not forgiven, such reduction shall not constitute a Debt Service Reduction
Amount.
"DEFAULTED MORTGAGE LOAN" means a Mortgage Loan that is at least 60
days delinquent in respect of any Monthly Payment (such delinquency to be
determined without giving effect to any grace period permitted by the related
Mortgage or Mortgage Note) or as to which the Master Servicer has made a
determination that such Mortgage Loan's becoming so delinquent is imminent.
"DEFAULT INTEREST" means, with respect to any Mortgage Loan
(including without limitation an REO Mortgage Loan), any amounts collected
thereon, other than Late Fees, Prepayment Premiums or Excess Interest, that
represent additional interest in excess of interest on the principal balance of
such Mortgage Loan accrued at the related Mortgage Rate.
"DEFAULTING PARTY" has the meaning set forth in Section 9.1(b).
"DEFICIENT VALUATION" means, with respect to any Mortgage Loan, a
valuation by a court of competent jurisdiction of the Mortgaged Property
relating to a Mortgage Loan in an amount less than the then-outstanding
indebtedness under such Mortgage Loan, which valuation results from a proceeding
initiated under the Bankruptcy Code, as amended from time to time, and that
reduces the amount the Mortgagor is required to pay under such Mortgage Loan.
"DEFICIENT VALUATION AMOUNT" means the amount by which the total
amount due with respect to a Mortgage Loan (excluding interest not yet accrued),
including the principal balance of a Mortgage Loan plus any accrued and unpaid
interest thereon and any other amounts recoverable from the Mortgagor with
respect thereto pursuant to the terms thereof, is reduced in connection with a
Deficient Valuation.
"DEFINITIVE CERTIFICATES" means Certificates of any Class issued in
definitive, fully registered, certificated form without interest coupons.
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"DELETED MORTGAGE LOAN" means a Mortgage Loan which is repurchased
from the Trust pursuant to the terms hereof or as to which one or more
Qualifying Substitute Mortgage Loans is or are substituted.
"DELINQUENT LOAN STATUS REPORT": A report substantially containing
the content described in Exhibit H-2 attached hereto, prepared in accordance
with Section 8.14(j).
"DEPOSITOR" means Morgan Stanley Capital I Inc., a Delaware
corporation, and its successors in interest.
"DEPOSITORY" has the meaning set forth in Section 3.6(a).
"DEPOSITORY AGREEMENT" means the Letter of Representations dated
November 12, 1998, by and among the Depositor, the Trustee and the Depository.
"DETERMINATION DATE" means, with respect to any Distribution Date,
the fifth day of the month in which such Distribution Date occurs (or, if such
fifth day is not a Business Day, the Business Day immediately preceding such
fifth day).
"DIRECTLY OPERATE" means, with respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon or any use
of such REO Property in a trade or business conducted by the Trust, in each case
other than through an Independent Contractor; provided, however, that the
Trustee (or the Special Servicer on behalf of the Trustee) shall not be
considered to Directly Operate an REO Property solely because the Trustee (or
the Special Servicer on behalf of the Trustee) establishes rental terms, chooses
tenants, enters into or renews leases, deals with taxes and insurance, or makes
decisions as to repairs, tenant improvements or capital expenditures with
respect to such REO Property or undertakes any ministerial action incidental
thereto.
"DISCOUNT RATE" has the meaning set forth in Section 6.4(c).
"DISQUALIFIED ORGANIZATION" means any of (i) the United States, any
State or any political subdivision thereof, or any agency or instrumentality of
any of the foregoing (other than an instrumentality which is a corporation if
all of its activities are subject to tax and, except for FHLMC, a majority of
its board of directors is not selected by any such governmental unit), (ii) a
foreign government, international organization or any agency or instrumentality
of either of the foregoing, (iii) an organization (except certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from tax
imposed by Chapter 1 of the Code (unless such organization is subject to the tax
imposed by Section 511 of the Code on unrelated business taxable income), (iv)
rural electric and telephone cooperatives described in Section 1381 of the Code
and (v) any other Person so designated by the Trustee based upon an Opinion of
Counsel that the holding of an ownership interest in a Residual Certificate by
such Person may cause any of the REMIC Pools, or any Person having an Ownership
Interest in any Class of Certificates, other than such Person, to incur a
liability for any federal tax imposed under the Code that would not otherwise be
imposed but for the transfer of an Ownership Interest in a Residual Certificate
to such Person. The terms "United States," "State" and "international
organization" shall have the meanings set forth in Section 7701 of the Code or
successor provisions.
"DISTRIBUTABLE CERTIFICATE INTEREST" means, with respect to any
Class of REMIC III Regular Certificates for any Distribution Date, the Accrued
Certificate Interest in respect of such Class of
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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
December, 1998.
"DUE DATE" means: (i) with respect to any Mortgage Loan (other than
an REO Mortgage Loan) on or prior to its Maturity Date, the day of the month set
forth in the related Mortgage Note on which each Monthly Payment thereon is
scheduled to be first due; (ii) with respect to any Balloon Mortgage Loan (other
than an REO Mortgage Loan) after the Maturity Date therefor, the day of the
month set forth in the related Mortgage Note on which each Monthly Payment
(other than, to the extent different, the Balloon Payment) on such Mortgage Loan
had been scheduled to be first due; and (iii) with respect to any REO Mortgage
Loan, the day of the month set forth in the related Mortgage Note on which each
Monthly Payment on such Mortgage Loan prior to its becoming an REO Mortgage Loan
had been scheduled to be first due.
"ELIGIBLE ACCOUNT" means an account that is any of the following:
(i) maintained with a depository institution or trust company whose (A)
commercial paper, short-term unsecured debt obligations or other short-term
deposits are rated by any two of the Rating Agencies at least A-1 in the case of
the Duff, and F-1+ (or its equivalent) in the case of Fitch, if the deposits are
to be held in the account for 30 days or less, or (B) long-term unsecured debt
obligations are rated by any two of the Rating Agencies at least AA- in the case
of Duff, and at least AA (or its equivalent) in the case of Fitch, if the
deposits are to be held in the account more than 30 days (or if not then rated
by Fitch, at least AA- by Standard & Poor's Ratings Service, a division of The
McGraw-Hill Companies, Inc. or Moody's Investors Service Inc.), or (ii) a
segregated trust account or accounts maintained in the trust department of the
Trustee or other financial institution subject to regulations regarding
fiduciary funds on deposit similar to Title 12 of the Code of Federal
Regulations Section 9.10(b), or (iii) an account or accounts of a depository
institution acceptable to each Rating Agency, as evidenced by written
confirmation from such Rating Agency to the effect that use of any such account
as the Certificate Account or the Distribution Account would not result in the
downgrade, qualification or withdrawal of the rating then assigned to any Class
of Certificates by such Rating Agency.
"ELIGIBLE INVESTMENTS" means any one or more of the following
obligations or securities:
(i) direct obligations of, and obligations fully guaranteed as
to timely payment of principal and interest by, the United States of
America, FNMA, FHLMC or any agency or instrumentality of the United States
of America the obligations of which are backed by the full faith and
credit of the United States of America; provided that any obligation of,
or guarantee by, FNMA or FHLMC, other than an unsecured senior debt
obligation of FNMA or FHLMC, shall be an Eligible Investment only if
Rating Agency Confirmation is obtained with respect to such investment;
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(ii) demand, time or similar deposits in, certificates of
deposit of, money market deposit accounts of, or bankers' acceptances
issued by, any depository institution or trust company (including the
Trustee, the Fiscal Agent, the Master Servicer, the Special Servicer or
any Affiliate of the Master Servicer, the Special Servicer, the Fiscal
Agent or the Trustee, acting in its commercial capacity) incorporated or
organized under the laws of the United States of America or any State
thereof and subject to supervision and examination by federal or state
banking authorities, so long as the commercial paper or other short-term
debt obligations of such depository institution or trust company are rated
"D-1+" by DCR and "A-1+" by Fitch or the long-term unsecured debt
obligations of such depository institution or trust company have been
assigned a rating by each Rating Agency at least equal "AAA" or,
alternatively, so long as the ratings on such obligations are otherwise
acceptable to the Rating Agencies;
(iii) repurchase agreements or obligations with respect to any
security described in clause (i) above where such security has a remaining
maturity of one year or less and where such repurchase obligation has been
entered into with a depository institution or trust company (acting as
principal) described in clause (ii) above and where such repurchase
obligation will mature prior to the Business Day preceding the next date
upon which, as described in this Agreement, such amounts are required to
be withdrawn from the Collection Account and which meets the minimum
rating requirement for such entity described above;
(iv) securities (other than stripped bonds or stripped
coupons) bearing interest or sold at a discount issued by any corporation
incorporated under the laws of the United States of America or any state
thereof, which securities are rated "AAA" by each Rating Agency, unless
otherwise specified in writing by the Rating Agency; provided that
securities issued by any particular corporation will not be Eligible
Investments to the extent that investment therein will cause the
then-outstanding principal amount of securities issued by such corporation
and held in the Collection Account to exceed 5% of the sum of the
aggregate Certificate Principal Balance of the Principal Balance
Certificates and the aggregate principal amount of all Eligible
Investments in the Collection Account;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand or
on a specified date not more than one year after the date of issuance
thereof), and (A) rated "D-1+" by DCR and "A-1+" by Fitch;
(vi) [Reserved];
(vii) guaranteed reinvestment agreements maturing within 365
days or less issued by any bank, insurance company or other corporation
whose long-term unsecured debt rating is not less than "AAA" or "AAA" (or
its equivalent rating) by DCR and Fitch (if rated by DCR or, if not rated
by DCR, by Fitch and another nationally recognized statistical rating
organization);
(viii) any money market funds rated "AAAm" or "AAAm-G" (or its
equivalent rating) by Fitch and "AAA" by DCR (if rated by DCR or, if not
rated by DCR, then otherwise acceptable to DCR), and any other demand,
money-market or time deposit, or any other obligation, security or
investment, with respect to which Rating Agency Confirmation has been
obtained; and
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(ix) such other investments bearing interest or sold at a
discount, earning a return "in the nature of interest" within the meaning
of Treasury Regulation Section 1.860G-2(g)(i) (as evidenced by an Opinion
of Counsel delivered to the Trustee by the Master Servicer at the Master
Servicer's expense), as are acceptable to the Rating Agencies (as
evidenced by Rating Agency Confirmation) and treated as "permitted
investments" that are "cash flow investments" under Code Section
860G(a)(5);
provided (A) such investment is held for a temporary period pursuant to Section
1.860G-2(g)(i) of the Treasury Regulations, (B) such investment is payable by
the obligor in U.S. dollars, and (C) that no such instrument shall be an
Eligible Investment (1) if such instrument evidences either (a) a right to
receive only interest payments or only principal payments with respect to the
obligations underlying such instrument or (b) a right to receive both principal
and interest payments derived from obligations underlying such instrument and
the principal and interest payments with respect to such instrument provide a
yield to maturity of greater than 120% of the yield to maturity at par of such
underlying obligations, or (2) if it may be redeemed at a price below the
purchase price or (3) if it is not treated as a "permitted investment" that is a
"cash flow investment" under Code Section 860G(a)(5); and provided, further,
that any such instrument shall have a maturity date no later than the date such
instrument is required to be used to satisfy the obligations under this
Agreement, and, in any event, shall not have a maturity in excess of one year;
any such instrument must have a predetermined fixed dollar of principal due at
maturity that cannot vary or change; if rated, the obligation must not have an
"r" highlighter affixed to its rating; interest on any variable rate instrument
shall be tied to a single interest rate index plus a single fixed spread (if
any) and move proportionally with that index; and provided, further, that no
amount beneficially owned by any REMIC Pool (including any amounts collected by
the Master Servicer but not yet deposited in the Collection Account) may be
invested in investments treated as equity interests for Federal income tax
purposes. No Eligible Investments shall be purchased at a price in excess of
par. For the purpose of this definition, (x) units of investment funds
(including money market funds) shall be deemed to mature daily, and (y) the
"MINIMUM MATURITY-BASED RATING" means, in all cases, "AAA".
"EMERGENCY ADVANCE" means any Servicing Advance that must be made
within five Business Days by the Special Servicer in order to avoid any material
penalty, any material harm to a Mortgaged Property or any other material adverse
consequence to the Trust.
"ENVIRONMENTAL ASSESSMENT" means a "Phase I Assessment" conducted in
accordance with ASTM Standard E 1527-93 or any successor thereto published by
ASTM.
"ENVIRONMENTAL LAWS" means any and all federal, state and local
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions, now or hereafter in effect, relating to the
environment or to emissions, discharges or releases of chemical substances,
including, without limitation, any and all pollutants, contaminants, petroleum
or petroleum products, asbestos or asbestos-containing materials,
polychlorinated biphenyls, urea-formaldehyde insulation, radon, industrial,
toxic or hazardous substances or wastes, into the environment, including,
without limitation, ambient air, surface water, ground water or land, or
otherwise relating to the manufacture, processing, distribution, use, labeling,
registration, treatment, storage, disposal, transport or handling of any of the
foregoing substances or wastes or the clean-up or other remediation thereof.
"EQUIVALENT 30/360 RATE" means with respect to a Mortgage Loan on
which interest is computed on a basis other than a 360-day year consisting of
twelve 30-day months, the per annum rate at which interest would have to accrue
on the Stated Principal Balance of such Mortgage Loan outstanding
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immediately prior to such Distribution Date, assuming such accrual of interest
were to occur on the basis of a 360-day year consisting of twelve 30-day months,
in order to produce the actual Uncertificated Accrued Interest in respect of the
REMIC I Regular Interest corresponding to such Mortgage Loan in respect of such
Distribution Date.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"ESCROW PAYMENT" means any payment received by the Master Servicer
or the Special Servicer for the account of any Mortgagor for application toward
the payment of real estate taxes, assessments, insurance premiums, ground rents
(if applicable) and similar items in respect of the related Mortgaged Property.
"EVENT OF DEFAULT" means one or more of the events described in
Section 9.1(a).
"EXCESS INTEREST" means, with respect to any Hyper-Amortization Loan
and any Distribution Date following its Hyper-Amortization Date, the excess of
the amount of interest accrued on the outstanding principal balance of such
Mortgage Loan during the related Collection Period at the Mortgage Rate in
effect for such Mortgage Loan after the Hyper-Amortization Date (the "Revised
Interest Rate") over the amount of interest that would have accrued on the
outstanding principal balance of such Mortgage Loan during such Collection
Period at the Mortgage Rate in effect for such Mortgage Loan immediately prior
to its Hyper-Amortization Date, and interest on such excess amount at the
Revised Rate from the date accrued to the date such amount is paid by the
related Mortgagor.
"EXCESS INTEREST DISTRIBUTION ACCOUNT" has the meaning set forth in
Section 5.3.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXPENSE LOSS" means a loss realized upon payment by the Trust of an
Additional Trust Expense that was not otherwise subject to a Servicing Advance
or was the subject of a determination that such Servicing Advance, if made,
would be nonrecoverable.
"FDIC" means the Federal Deposit Insurance Corporation or any
successor thereto.
"FINAL PURCHASER" has the meaning set forth in Section 10.1.
"FITCH" means Fitch IBCA, Inc. or its successor in interest.
"FHLMC" means the Federal Home Loan Mortgage Corporation, or any
successor thereto.
"FINAL CERTIFICATION" has the meaning set forth in Section 2.2.
"FINAL RATED DISTRIBUTION DATE" means November 15, 2030.
"FINAL RECOVERY DETERMINATION" means a determination by the Special
Servicer with respect to any defaulted Mortgage Loan or REO Property that, in
the reasonable and good faith judgment of the Special Servicer, there has been a
recovery of all Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds,
and other payments or recoveries that, in the Special Servicer's reasonable and
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good faith judgment, exercised without regard to any obligation of the Master
Servicer or the Special Servicer to make payments from its own funds pursuant to
Section 8.5, will ultimately be recoverable.
"FISCAL AGENT" means ABN AMRO Bank N.V., a banking organization
organized under the laws of the Netherlands, its successor in interest, or any
successor Fiscal Agent appointed as herein provided.
"FISCAL AGENT TERMINATION EVENT" has the meaning set forth in
Section 7.16.
"FNMA" means the Federal National Mortgage Association, or any
successor thereto.
"GLOBAL CERTIFICATE" has the meaning set forth in Section 3.6.
"HAZARDOUS MATERIALS" means any dangerous, toxic or hazardous
pollutants, chemicals, wastes, or substances, including, without limitation,
those so identified pursuant to CERCLA or any other federal, state or local
environmental related laws and regulations, and including, without limitation,
asbestos and asbestos-containing materials, polychlorinated biphenyls ("PCBS"),
radon gas, petroleum and petroleum products, urea formaldehyde and any
substances classified as being "in inventory", "usable work in process" or
similar classification that would, if classified as unusable, be included in the
foregoing definition.
"HELLER" means Heller Financial Capital Funding, Inc. or its
successor in interest.
"HELLER LOANS" means, collectively, those Mortgage Loans sold to the
Depositor pursuant to Mortgage Loan Purchase Agreement II and shown on Schedule
II hereto.
"HISTORICAL LOAN MODIFICATION REPORT": A report substantially
containing the content described in Exhibit H-3 attached hereto, prepared in
accordance with Section 8.14(j).
"HISTORICAL LOSS ESTIMATE REPORT": A report substantially containing
the content described in Exhibit H-4 attached hereto, prepared in accordance
with Section 8.14(j).
"HOLDER" means the Person in whose name a Certificate is registered
on the Certificate Register except that, solely for the purposes of giving any
consent, approval or waiver pursuant to this Agreement, any Certificate
registered in the name of the Master Servicer, the Special Servicer, the
Depositor or any Affiliate of any of them shall be deemed not to be outstanding,
and the Voting Rights to which it is entitled shall not be taken into account in
determining whether the requisite percentage of Voting Rights necessary to
effect any such consent, approval or waiver has been obtained, except as
otherwise provided in Sections 8.32, 9.4 and 13.3. The Trustee shall be entitled
to request and rely upon a certificate of the Master Servicer, the Special
Servicer or the Depositor in determining whether a Certificate is registered in
the name of an Affiliate of such Person. All references herein to "Holders" or
"Certificateholders" shall reflect the rights of Certificate Owners as they may
indirectly exercise such rights through the Clearing Agency and its
Participants, except as otherwise specified herein; provided, however, that the
parties hereto shall be required to recognize as a "Holder" or
"Certificateholder" only the Person in whose name a Certificate is registered in
the Certificate Register.
"HYPER-AMORTIZATION DATE" means as to any Mortgage Loan the date
prior to the stated maturity thereof that the Mortgage Rate and the rate of
principal amortization increases.
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"HYPER-AMORTIZATION LOAN" means any Mortgage Loan that provides for
a Balloon Payment on a stated date prior to its Stated Maturity Date, and
provides for an increased Mortgage Rate and/or rate of principal amortization
following such date if the Mortgage Loan remains outstanding.
"INDEPENDENT" means, when used with respect to any Accountants, a
Person who is "independent" within the meaning of Rule 2-01(b) of the Securities
and Exchange Commission's Regulation S-X. Independent means, when used with
respect to any other Person, a Person who (a) is in fact independent of another
specified Person and any Affiliate of such other Person, (b) does not have any
material direct financial interest in such other Person or any Affiliate of such
other Person and (c) is not connected with such other Person or any Affiliate of
such other Person as an officer, employee, promoter, underwriter, trustee,
partner, director or Person performing similar functions.
"INDEPENDENT CONTRACTOR" means any Person that would be an
"independent contractor" with respect to REMIC I within the meaning of Section
856(d)(3) of the Code if REMIC I were a real estate investment trust (except
that the ownership test set forth in that section shall be considered to be met
by any Person that owns, directly or indirectly, 35 percent or more of any Class
of Certificates, or such other interest in any Class of Certificates as is set
forth in an Opinion of Counsel, which shall be at no expense to the Trustee or
the Trust, delivered to the Trustee), so long as REMIC I does not receive or
derive any income from such Person and provided that the relationship between
such Person and REMIC I is at arm's length, all within the meaning of Treasury
Regulation Section 1.856-4(b)(5), or any other Person upon receipt by the
Trustee of an Opinion of Counsel, which shall be at no expense to the Trustee or
the Trust, to the effect that the taking of any action in respect of any REO
Property by such Person, subject to any conditions therein specified, that is
herein contemplated to be taken by an Independent Contractor will neither cause
such REO Property to cease to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code (determined without regard to the
exception applicable for Section 860D(a) of the Code) nor cause any income
realized in respect of such REO Property to fail to qualify as Rents from Real
Property.
"INITIAL CERTIFICATION" has the meaning set forth in Section 2.2.
"INDIRECT PARTICIPANTS" means entities, such as banks, brokers,
dealers and trust companies, that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly.
"INITIAL POOL BALANCE" means the aggregate Cut-off Date Principal
Balance of the Mortgage Pool.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institutional
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) of
Regulation D of the Securities Act.
"INSURANCE POLICY" means any hazard insurance policy, flood
insurance policy or title insurance policy relating to any Mortgage Loan or
Mortgaged Property or REO Property in effect as of the Closing Date or
thereafter during the term of this Agreement.
"INSURANCE PROCEEDS" means amounts paid by the insurer under any
Insurance Policy.
"INTEREST ACCRUAL PERIOD" means with respect to any REMIC I Regular
Interest, any REMIC II Regular Interest or any Class of REMIC III Regular
Certificates for any Distribution Date, the calendar month immediately preceding
the month in which such Distribution Date occurs.
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"INTEREST ONLY CERTIFICATES" means the Class X Certificates.
"INTERESTED PERSON" means, as of any date of determination, the
Master Servicer, the Special Servicer, the Depositor, the Operating Adviser, any
Certificateholder, any Certificate Owner or any Person known to a Responsible
Officer of the Trustee to be an Affiliate of any of them.
"ISSUE PRICE" means, with respect to each Class of Certificates,
REMIC I Regular Interests and REMIC II Regular Interests, the "issue price" as
defined in the REMIC Provisions.
"LATE COLLECTIONS" means with respect to any Mortgage Loan
(including without limitation any REO Mortgage Loan), all amounts received
thereon during any Collection Period, whether as payments, Insurance Proceeds,
Condemnation Proceeds, Liquidation Proceeds, Repurchase Proceeds, payments of
Substitution Shortfall Amounts, or otherwise, which represent late payments or
collections of the principal and/or interest due or deemed due in respect of
such Mortgage Loan (without regard to any acceleration of amounts due thereunder
by reason of default) on a Due Date in a previous Collection Period and not
previously recovered; provided that "Late Collections" shall in no event include
Penalty Charges.
"LATE FEE" shall mean a fee paid or payable, as the context may
require, by a Mortgagor as provided in the related Mortgage Note or Mortgage in
connection with a late payment made on the related Mortgage Loan by such
Mortgagor.
"LEASE ENHANCEMENT POLICY": A non-cancelable credit lease
enhancement insurance policy that insures against certain losses arising out of
casualty or condemnation of the related Mortgaged Property, the form of which
has been approved by the Rating Agencies.
"LEGENDED DEFINITIVE CERTIFICATE" means a Definitive Certificate
bearing the Securities Legend.
"LIQUIDATION EVENT" means with respect to any Mortgage Loan (other
than an REO Mortgage Loan), any of the following events: (i) such Mortgage Loan
is paid in full; (ii) a Final Recovery Determination is made with respect to
such Mortgage Loan; (iii) such Mortgage Loan is repurchased or replaced by a
Seller pursuant to Section 7 of the related Mortgage Loan Purchase Agreement;
(iv) such Mortgage Loan is purchased by the Majority Certificateholder of the
Controlling Class, the Master Servicer or the Special Servicer, or is otherwise
sold, pursuant to Section 8.31 or otherwise liquidated by judicial action; or
(v) such Mortgage Loan is purchased by any Person entitled to effect an optional
termination of the Trust pursuant to Section 10.1. With respect to any REO
Property (and the related REO Mortgage Loan), any of the following events: (i) a
Final Recovery Determination is made with respect to such REO Property; (ii)
such REO Property is sold pursuant to Section 8.31; or (iii) such REO Property
is purchased by any Person entitled to effect an optional termination of the
Trust pursuant to Section 10.1.
"LIQUIDATION EXPENSES" means all customary, reasonable and necessary
"out of pocket" costs and expenses incurred on behalf of the Trust by the
Special Servicer in connection with the liquidation of any Specially Serviced
Mortgage Loan or REO Property pursuant to Section 8.7 or 8.31 (including,
without limitation, legal fees and expenses, title and escrow expenses,
committee or referee fees and, if applicable, brokerage commissions and
conveyance taxes) that were not covered by a Servicing Advance.
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"LIQUIDATION FEE" means, with respect to each Specially Serviced
Mortgage Loan or REO Property as to which Liquidation Proceeds have been
received (other than any Specially Serviced Mortgage Loan or REO Property
purchased by any Person entitled to effect an optional termination of the Trust
pursuant to Section 10.1), a fee in an amount equal to the product of (x) 1.0%,
and (y) the related Liquidation Proceeds.
"LIQUIDATION PROCEEDS" means proceeds (other than payments by a
Mortgagor, Insurance Proceeds, Condemnation Proceeds, Repurchase Proceeds,
payments of Substitution Shortfall Amounts and REO Income) from the sale or
liquidation of a Mortgage Loan or related REO Property, net of related
Liquidation Expenses.
"LOAN-TO-VALUE RATIO" means, with respect to any Mortgage Loan, as
of any date of determination, the fraction, expressed as a percentage, the
numerator of which is the then-unpaid principal balance of such Mortgage Loan
(or, if part of a group of Cross-Collateralized Mortgage Loans, of such group),
and the denominator of which is the appraised value of the related Mortgaged
Property (or, in the case of a group of Cross-Collateralized Mortgage Loans, of
all the Mortgaged Properties securing such group) as determined by an Appraisal
thereof.
"LOCK-BOX ACCOUNT" means with respect to any Mortgage Loan, any
lock-box, cash management or similar account required under the terms of the
related Mortgage or Mortgage Note.
"LOCK-BOX AGREEMENT" means, with respect to any Mortgage Loan, any
lock-box agreement relating to such Mortgage Loan executed and delivered by the
related Mortgagor pursuant to which a Lock-Box Account is created.
"LOSSES" has the meaning set forth in Section 12.3.
"LOSS REIMBURSEMENT AMOUNT" means, with respect to any REMIC I
Regular Interest, REMIC II Regular Interest or Class of Principal Balance
Certificates for any Distribution Date (except the initial Distribution Date,
with respect to which the Loss Reimbursement Amount for such REMIC I Regular
Interest, REMIC II Regular Interest or Class of Certificates, as the case may
be, will be zero), an amount equal to (a)(i) the Loss Reimbursement Amount with
respect to such REMIC I Regular Interest, REMIC II Regular Interest or Class of
Certificates, as the case may be, for the immediately preceding Distribution
Date, minus (ii) the aggregate of all reimbursements of previously allocated and
unreimbursed Realized Losses and Expense Losses (with interest) made on the
immediately preceding Distribution Date pursuant to Section 6.2, 6.3 or 6.4, as
applicable, with respect to such REMIC I Regular Interest, REMIC II Regular
Interest or Class of Certificates, as the case may be, plus (iii) the aggregate
of all Realized Losses and Expense Losses allocated to such REMIC I Regular
Interest, REMIC II Regular Interest or Class of Certificates, as the case may
be, on the immediately preceding Distribution Date pursuant to Section 6.5, plus
(b) one month's interest (calculated on the basis of a 360-day year consisting
of twelve 30-day months) on the amount described in clause (a) at the REMIC I
Remittance Rate, REMIC II Remittance Rate or Pass-Through Rate, as applicable,
in respect of such REMIC I Regular Interest, REMIC II Regular Interest or Class
of Certificates, as the case may be, for the current Distribution Date.
"MAI" means member of the appraisal institute.
"MAINTENANCE RIGHT": With respect to any Double Net Lease, any
termination and abatement rights of the related Credit Tenant arising from a
Mortgagor's default under such Double Net
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Lease in performing obligations such as required maintenance, repairs and
replacements for the related Mortgaged Property.
"MAJORITY CERTIFICATEHOLDER" means, with respect to any particular
Class or Classes of Certificates, any Certificateholder entitled to a majority
of the Voting Rights allocated to such Class or Classes, as the case may be.
"MASTER SERVICER" means GMAC Commercial Mortgage Corporation or any
successor master servicer appointed as provided herein.
"MASTER SERVICER REMITTANCE DATE" means, with respect to each
Distribution Date, the Business Day immediately preceding such Distribution
Date.
"MASTER SERVICER REMITTANCE REPORT" means a report prepared by the
Master Servicer and in such media as may be agreed upon by the Master Servicer
and the Trustee containing such information regarding the Mortgage Loans as will
permit the Trustee to calculate the amounts to be distributed to the
Certificateholders pursuant to this Agreement and to furnish the Monthly
Certificateholder Report to Certificateholders required to be delivered
hereunder and containing such additional information as the Master Servicer, the
Trustee and the Depositor may from time to time mutually agree.
"MASTER SERVICING FEE" means, with respect to each Mortgage Loan
(including without limitation each REO Mortgage Loan), the fee designated as
such and payable to the Master Servicer pursuant to Section 8.10(a).
"MASTER SERVICING FEE RATE" means, with respect to each Mortgage
Loan (including without limitation each REO Mortgage Loan), the rate per annum
indicated on the Mortgage Loan Schedule.
"MATERIAL DEFECT" has the meaning set forth in Section 2.3(a).
"MATURITY DATE" means, with respect to any Mortgage Loan as of any
date of determination, the date on which the last payment of principal is due
and payable under the related Mortgage Note, after taking into account all
Principal Prepayments received and any Deficient Valuation, Debt Service
Reduction Amount or modification of the Mortgage Loan occurring prior to such
date of determination, but without giving effect to (i) any acceleration of the
principal of such Mortgage Loan by reason of a default or (ii) any grace period
permitted by the related Mortgage Note.
"MEMORANDUM" means the private placement memorandum dated November
5, 1998, relating to the Privately Offered Certificates.
"MINIMUM MATURITY-BASED RATING" has the meaning provided under the
definition of "Eligible Investments" herein.
"MONEY TERM" means with respect to any Mortgage Loan, the Maturity
Date, Mortgage Rate, principal balance, amortization term or payment frequency
thereof (and shall not include Late Fees or Default Interest provisions).
"MONTHLY CERTIFICATEHOLDER REPORT" means a report prepared pursuant
to Section 5.4 by the Trustee as to each Distribution Date generally in the form
and substance of Exhibit G-1, which
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sets forth, to the extent applicable; (i) the amount, if any, of the
distributions on such Distribution Date to the Holders of each Class of
Principal Balance Certificates applied to (A) reduce the respective Class
Principal Balance thereof and (B) reimburse previously allocated Realized Losses
and/or Expense Losses (with interest); (ii) the amount, if any, of the
distributions to Holders of each Class of REMIC III Regular Certificates
allocable to (A) Distributable Certificate Interest and (B) Prepayment Premiums;
(iii) the number and aggregate Stated Principal Balance of Mortgage Loans in the
Mortgage Pool at the close of business on the related Determination Date; (iv)
the number and aggregate Stated Principal Balance of Mortgage Loans in the
Mortgage Pool that are at the close of business on the related Determination
Date (A) delinquent one month, (B) delinquent two months, (C) delinquent three
or more months or (D) as to which foreclosure proceedings have been commenced;
(v) with respect to any REO Property acquired during the related Collection
Period, the Stated Principal Balance of the related Mortgage Loan as of the date
of acquisition of the REO Property; (vi)(A) the latest appraised value of any
REO Property included in the Trust Fund as of the related Determination Date,
(B) as to any REO Property sold during the related Collection Period, the date
of the related Final Recovery Determination and the amount of the proceeds of
such sale deposited into the Collection Account, and (C) the aggregate amount of
other revenues collected by the Special Servicer with respect to each REO
Property during the related Collection Period and credited to the Collection
Account, in each case identifying such REO Property by the loan number of the
related Mortgage Loan; (vii) the Class Principal Balance or Class X Notional
Amount, as the case may be, and Certificate Factor of each Class of REMIC III
Regular Certificates before and after giving effect to the distributions made on
such Distribution Date; (viii) the aggregate amount of Principal Prepayments
made during the related Collection Period; (ix) the Pass-Through Rate applicable
to each Class of REMIC III Regular Certificates for such Distribution Date; (x)
the aggregate amount of servicing fees retained by or paid to the Master
Servicer and the Special Servicer; (xi) the Net Aggregate Prepayment Interest
Shortfall, if any, for such Distribution Date and the amount of Realized Losses
or Expense Losses, if any, incurred with respect to the Mortgage Loans during
the related Collection Period; (xii) the aggregate amount of Servicing Advances
and P&I Advances outstanding as of the end of the prior calendar month that have
been made by the Master Servicer, the Special Servicer, the Trustee and the
Fiscal Agent, separately stated; and (xiii) the amount of any Appraisal
Reductions effected during the related Collection Period on a loan-by-loan basis
and the total Appraisal Reductions as of such Distribution Date. In the case of
information furnished pursuant to subclauses (i) and (ii) above, the amounts
shall be expressed as a dollar amount per $1,000 of original actual or notional
principal amount of the Certificates for all Certificates of each applicable
Class.
"MONTHLY PAYMENT" means, with respect to any Mortgage Loan, the
scheduled monthly payment of principal and/or interest on such Mortgage Loan,
including any Balloon Payment, which is payable by a Mortgagor from time to time
under the terms of the related Mortgage Note (as such may be modified at any
time following the Closing Date) and applicable law.
"MORTGAGE" means, with respect to any Mortgage Loan, separately and
collectively, as the context may require, each mortgage, deed of trust or other
instrument securing a Mortgage Note and creating a lien on the related Mortgaged
Property.
"MORTGAGE FILE" means, collectively with respect to any Mortgage
Loan, the mortgage documents listed below:
(i) the original Mortgage Note, endorsed by the most recent
endorsee prior to the Trustee or, if none, by the originator,
without recourse, either in blank or to the order of the
Trustee in the following form: "Pay to the order of LaSalle
National Bank, as trustee for the registered holders of
Morgan Stanley Capital I Inc.,
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Commercial Mortgage Pass-Through Certificates, Series
1998-HF2, without recourse";
(ii) the original or a copy of the related recorded Mortgage and,
if applicable, the originals or copies of any intervening
assignments of such Mortgage showing a complete chain of
assignment from the originator of the Mortgage Loan to the
most recent assignee of record thereof prior to the Trustee,
if any, in each case with evidence of recording indicated
thereon;
(iii) an original assignment of the related Mortgage, in recordable
form, executed by the most recent assignee of record thereof
prior to the Trustee or, if none, by the originator, either
in blank or in favor of the Trustee (in such capacity);
(iv) the original or a copy of the related recorded Assignment of
Leases (if such item is a document separate from the related
Mortgage) and, if applicable, the originals or copies of any
intervening assignments of such Assignment of Leases showing
a complete chain of assignment from the originator of the
Mortgage Loan to the most recent assignee of record thereof
prior to the Trustee, if any, in each case with evidence of
recording thereon;
(v) an original assignment of any related Assignment of Leases
(if such item is a document separate from the related
Mortgage), in recordable form, executed by the most recent
assignee of record thereof prior to the Trustee or, if none,
by the originator, either in blank or in favor of the Trustee
(in such capacity), which assignment may be included as part
of the corresponding assignment of Mortgage referred to in
clause (iii) above;
(vi) an original or copy of any related security agreement (if
such item is a document separate from the related Mortgage)
and, if applicable, the originals or copies of any
intervening assignments of such security agreement showing a
complete chain of assignment from the originator of the
Mortgage Loan to the most recent assignee thereof prior to
the Trustee, if any;
(vii) an original assignment of any related security agreement (if
such item is a document separate from the related Mortgage)
executed by the most recent assignee thereof prior to the
Trustee or, if none, by the originator, either in blank or in
favor of the Trustee (in such capacity), which assignment may
be included as part of an omnibus assignment covering other
documents relating to the Mortgage Loan provided that such an
omnibus assignment would be effective under applicable law;
(viii) originals or copies of all assumption, modification, written
assurance and substitution agreements, with evidence of
recording thereon (if appropriate), in those instances where
the terms or provisions of the Mortgage, Mortgage Note or any
related security document have been modified or the Mortgage
Loan has been assumed;
(ix) the original or a copy of the lender's title insurance policy
issued in connection with the origination of the Mortgage
Loan, together with all endorsements or riders (or copies
thereof) that were issued with or subsequent to the issuance
of
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such policy, insuring the priority of the Mortgage as a first
lien on the Mortgaged Property;
(x) the original or a copy of any guaranty of the obligations of
the Mortgagor under the Mortgage Loan, together with (A) if
applicable, the originals or copies of any intervening
assignments of such guaranty showing a complete chain of
assignment from the originator of the Mortgage Loan to the
most recent assignee thereof prior to the Trustee, if any,
and (B) an original assignment of such guaranty executed by
the most recent assignee thereof prior to the Trustee or, if
none, by the originator (which assignment may be included as
part of an omnibus assignment covering other documents
relating to the Mortgage Loan provided that such an omnibus
assignment would be effective under applicable law);
(xi) (A) a recorded acknowledgment copy of any UCC Financing
Statements and continuation statements which were filed in
order to perfect (and maintain the perfection of) any
security interest held by the originator of the Mortgage Loan
(and each assignee of record prior to the Trustee) in and to
the personalty of the Mortgagor at the Mortgaged Property (in
each case with evidence of filing thereon) and which were in
the possession of the related Seller (or its agent) at the
time the subject Mortgage File was delivered to the Trustee
and (B) if any such security interest remains perfected and
the earlier UCC Financing Statements and continuation
statements were in the possession of the Seller, a UCC
Financing Statement executed by the most recent assignee of
record prior to the Trustee or, if none, by the originator,
evidencing the transfer of such security interest, either in
blank or in favor of the Trustee;
(xii) the original or a copy of the power of attorney (with
evidence of recording thereon, if appropriate) granted by the
Mortgagor if the Mortgage, Mortgage Note or other document or
instrument referred to above was signed on behalf of the
Mortgagor;
(xiii) if the Mortgagor has a leasehold interest in the related
Mortgaged Property, the original ground lease or a copy
thereof;
(xiv) the original or a copy of the loan agreement, if applicable;
(xv) the original or a copy of the lockbox agreement, if
applicable; and
(xvi) with respect to any Credit Lease Loan, a copy of the related
Credit Lease, any guaranty, and any Lease Enhancement Policy
or Residual Value Insurance Policy;
provided that whenever the term "Mortgage File" is used to refer to documents
actually received by the Trustee, such term shall not be deemed to include such
documents and instruments required to be included therein unless they are
actually so received.
"MORTGAGE LOAN" means a mortgage loan identified on the Mortgage
Loan Schedule, as amended from time to time, and conveyed, transferred, sold,
assigned to and deposited with the Trustee
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pursuant to Section 2.1 or Section 2.3. As used herein, the term "Mortgage Loan"
includes the related Mortgage Note, Mortgage and other security documents
contained in the related Mortgage File.
"MORTGAGE LOAN PURCHASE AGREEMENT" means either of Mortgage Loan
Purchase Agreement I or Mortgage Loan Purchase Agreement II, as the case may be.
"MORTGAGE LOAN PURCHASE AGREEMENT I" means that certain Mortgage
Loan Purchase Agreement dated as of November 5, 1998, between MSMC and the
Depositor, with respect to the MSMC Loans.
"MORTGAGE LOAN PURCHASE AGREEMENT II" means that certain Mortgage
Loan Purchase Agreement dated as of November 5, 1998, between Heller and the
Depositor, with respect to the Heller Loans.
"MORTGAGE LOAN SCHEDULE" or "LOAN SCHEDULE" means, collectively, the
schedules attached hereto as Schedule I, which identifies each MSMC Loan and
Schedule II, which identifies each Heller Loan, as such schedules may be amended
from time to time pursuant to Section 2.3.
"MORTGAGE NOTE" means the note or other evidence of indebtedness
evidencing the indebtedness of a Mortgagor under a Mortgage Loan, together with
any rider, addendum or amendment thereto.
"MORTGAGE POOL" means, collectively, all of the Mortgage Loans
(including without limitation REO Mortgage Loans and Replacement Mortgage Loans,
but excluding Deleted Mortgage Loans).
"MORTGAGE RATE" means, with respect to any Mortgage Loan (including
without limitation an REO Mortgage Loan), the fixed annualized rate at which
interest is scheduled (in the absence of default) to accrue on such Mortgage
Loan from time to time (in accordance with the terms of the related Mortgage
Note (as such may be modified at any time following the Closing Date) and
applicable law), and without regard to any passage of the Maturity Date or any
acquisition of the related Mortgaged Property as an REO Property, provided that
in the case of a Non-30/360 Mortgage Loan, the Mortgage Rate shall be determined
in accordance with this sentence assuming that interest is scheduled (in the
absence of default) to accrue on such Mortgage Loan at the Equivalent 30/360
Rate.
"MORTGAGED PROPERTY" means, individually and collectively, as the
context may require, the real property interest or interests subject to the lien
of a Mortgage and constituting collateral for a Mortgage Loan. With respect to
any Cross-Collateralized Mortgage Loan, as the context may require, "Mortgaged
Property" may mean, collectively, all the Mortgaged Properties securing such
Cross-Collateralized Mortgage Loan.
"MORTGAGEE" means, which respect to any Mortgage as of any date of
determination, the holder of the related Mortgage Note as of such date.
"MORTGAGOR" means the obligor or obligors on a Mortgage Note.
"MSMC" means Morgan Stanley Mortgage Capital Inc., or any successor
in interest.
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"MSMC LOANS" means, collectively, those Mortgage Loans sold to the
Depositor pursuant to Mortgage Loan Purchase Agreement I and shown on Schedule I
hereto.
"NET AGGREGATE PREPAYMENT INTEREST SHORTFALL" means, with respect to
any Distribution Date, the amount, if any, by which (a) the aggregate of all
Prepayment Interest Shortfalls incurred in connection with the receipt of
Principal Prepayments on the Mortgage Loans during the related Collection
Period, exceeds (b) the sum of (i) the aggregate of all Prepayment Interest
Excesses realized in connection with the receipt of Principal Prepayments on the
Mortgage Loans during the related Collection Period, and (ii) the aggregate
amount deposited by the Master Servicer in the Distribution Account for such
Distribution Date pursuant to Section 8.21(b) in connection with such Prepayment
Interest Shortfalls.
"NET MORTGAGE RATE" means, with respect to any Mortgage Loan
(including without limitation an REO Mortgage Loan), as of any date of
determination, a rate per annum equal to the related Mortgage Rate then in
effect, minus the applicable Master Servicing Fee Rate and Trustee Fee Rate.
"NEW LEASE" means any lease of any REO Property entered into on
behalf of the Trust, including any lease renewed or extended on behalf of the
Trust if the Trust has the right to renegotiate the terms of such lease.
"NEW YORK PRESENTING OFFICE" means any office of an agent of the
Trustee or the Certificate Registrar, located in New York, New York, as the
Trustee or the Certificate Registrar, as the case may be, may designate from
time to time by written notice to the Depositor and the Certificateholders.
"NOI ADJUSTMENT WORKSHEET": A report prepared by the Master Servicer
or the Special Servicer, as the case may be, substantially containing the
content described in Exhibit H-8 attached hereto, presenting the computations
made in accordance with the methodology described in such Exhibit H-8 to
"normalize" the full year net operating income and debt service coverage numbers
used in the other reports required by this Agreement, sent to the Trustee with
each annual operating statement for a Mortgaged Property pursuant to Section
8.14(d).
"NON-30/360 MORTGAGE LOAN" means a Mortgage Loan that accrues
interest other than on the basis of a 360-day year consisting of twelve 30-day
months.
"NONDISQUALIFICATION OPINION" means a written opinion of Independent
nationally recognized outside tax counsel addressed to the Trustee, reasonably
acceptable in form and substance to the Trustee, that a contemplated action will
neither cause (i) any REMIC Pool to fail to qualify as a REMIC at any time that
any Certificates are outstanding nor (ii) a gain on the disposition of a
Qualified Mortgage which would be subject to the 100% tax on "prohibited
transactions," imposed by Section 860F of the Code, nor (iii) any REMIC Pool to
be subject to any tax under the REMIC Provisions, except for any tax on net
income from foreclosure property as provided for herein.
"NONRECOVERABLE ADVANCE" means any Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance.
"NONRECOVERABLE P&I ADVANCE" means any P&I Advance previously made
or proposed to be made in respect of a Mortgage Loan (including, without
limitation, an REO Mortgage Loan) which, in the reasonable and good faith
judgment of the Master Servicer, or, if applicable, the Trustee or Fiscal Agent,
will not be ultimately recoverable (together with Advance Interest thereon) from
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late payments, Insurance Proceeds, Condemnation Proceeds or Liquidation
Proceeds, or any other recovery on or in respect of such Mortgage Loan.
"NONRECOVERABLE SERVICING ADVANCE" means any Servicing Advance
previously made or proposed to be made in respect of a Mortgage Loan or REO
Property which, in the reasonable and good faith judgment of the Master
Servicer, the Special Servicer or, if applicable, the Trustee or the Fiscal
Agent, will not be ultimately recoverable (together with Advance Interest
thereon) from late payments, Insurance Proceeds, Condemnation Proceeds,
Liquidation Proceeds, or any other recovery on or in respect of such Mortgage
Loan or REO Property.
"OFFICER'S CERTIFICATE" means (x) in the case of the Depositor, a
certificate signed by one or more of the Chairman of the Board, any Vice
Chairman, the President, or any Senior Vice President, Vice President or
Assistant Vice President, and by one or more of the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Depositor, or (y) in
the case of the Master Servicer and the Special Servicer, a certificate signed
by any of the officers referred to above or an employee thereof designated as a
Servicing Officer or Special Servicing Officer pursuant to this Agreement, and
(z) in the case of the Trustee, a certificate signed by a Responsible Officer.
"OPERATING ADVISER" shall have the meaning specified in Section
8.32.
"OPERATING STATEMENT ANALYSIS" means, with respect to each Mortgage
Loan and REO Mortgage Property, a report substantially containing the content
described in Exhibit H-7 attached hereto, prepared in accordance with Section
8.14(j).
"OPINION OF COUNSEL" means a written opinion of counsel addressed to
the Trustee, reasonably acceptable in form and substance to the Trustee, and
which may be from in-house or outside counsel to the party required to deliver
such opinion but which must be from Independent outside counsel with respect to
any such opinion of counsel concerning the taxation, or status as a REMIC for
tax purposes, of the Trust or any REMIC Pool.
"OTS" means the Office of Thrift Supervision or any successor
thereto.
"OWNERSHIP INTEREST" means, as to any Certificate, any ownership or
security interest in such Certificate as the Holder thereof and any other
interest therein, whether direct or indirect, legal or beneficial, as owner or
as pledgee.
"P&I ADVANCE" means, as to any Mortgage Loan (including, without
limitation, any REO Mortgage Loan), any advance in respect of delinquent
principal and/or interest made by the Master Servicer pursuant to Section 4.1
(or any similar advance made by the Trustee or the Fiscal Agent pursuant to
Section 4.3).
"P&I ADVANCE DATE" means, with respect to any Distribution Date, the
Business Day preceding such Distribution Date.
"PARTICIPANT" means a broker, dealer, bank, other financial
institution or other Person for whom the Clearing Agency effects book-entry
transfers and pledges of securities deposited with the Clearing Agency.
"PASS-THROUGH ENTITY" means any of (a) a regulated investment
company described in Section 851 of the Code, a real estate investment trust
described in Section 856 of the Code, a common
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trust fund or an organization described in Section 1381(a) of the Code, (b) any
partnership, trust or estate as such terms are defined in the Code or (c) any
Person holding a Residual Certificate as nominee for another Person.
"PASS-THROUGH RATE" means with respect to,
(1) the Class A-1 Certificates, the Class A-2 Certificates, the
Class F Certificates, the Class G Certificates, the Class H
Certificates, the Class J Certificates, the Class K
Certificates the Class L Certificates, the Class M
Certificates and the Class N Certificates, for any
Distribution Date, the respective fixed rates per annum
specified as such in the Preliminary Statement;
(2) the Class X Certificates, for any Distribution Date, the Class
X Certificate Rate.
(3) the Class B Certificates, for any Distribution Date, the Class
B Certificate Rate;
(4) the Class C Certificates, for any Distribution Date, the Class
C Certificate Rate
(5) the Class D Certificates, for any Distribution Date, the Class
D Certificate Rate; and
(6) the Class E Certificates, for any Distribution Date, the Class
E Certificate Rate.
"PENALTY CHARGES" means, with respect to any Mortgage Loan
(including without limitation an REO Mortgage Loan), any amounts collected
thereon that represent Late Fees or Default Interest.
"PERCENTAGE INTEREST" means, (i) with respect to any REMIC III
Regular Certificate, the portion of the relevant Class evidenced by such
Certificate, expressed as a percentage, the numerator of which is the
Certificate Principal Balance or the Certificate Notional Amount, as the case
may be, of such Certificate as of the Closing Date, as specified on the face
thereof, and the denominator of which is the initial Class Principal Balance or
the initial Class X Notional Amount, as the case may be, of the relevant Class
as of the Closing Date; and (ii) with respect to a Residual Certificate, the
percentage interest in distributions to be made with respect to the relevant
Class, as stated on the face of such Certificate.
"PERMITTED TRANSFEREE" means any Transferee other than a
Disqualified Organization.
"PERSON" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"PLAN" has the meaning set forth in Section 3.3(d).
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"POLICY TERMINATION EVENT": With respect to any Lease Enhancement
Policy and Residual Value Policy, any abatement, rescission, cancellation,
termination, contest, legal process, arbitration or disavowal of liability
thereunder by the related insurer.
"PREPAYMENT ASSUMPTION" means a CPR of 0%, applied to each Mortgage
Loan during any period that the related Mortgagor is permitted to make voluntary
Principal Prepayments without a Prepayment Premium (and with respect to each
Hyper-Amortization Loan, treating its Hyper-Amortization Date as its Maturity
Date), calculated on the basis of a yield maintenance formula used for
determining the accrual of original issue discount, market discount and premium,
if any, on the REMIC I Regular Interests, the REMIC II Regular Interests or the
REMIC III Regular Certificates for federal income tax purposes.
"PREPAYMENT INTEREST EXCESS" means, with respect to any Mortgage
Loan that was subject to a Principal Prepayment in full or in part during any
Collection Period, which Principal Prepayment was applied to such Mortgage Loan
following such Mortgage Loan's Due Date in such Collection Period, the amount of
interest at the related Net Mortgage Rate (except to the extent it constitutes
Excess Interest) accrued on the amount of such Principal Prepayment during the
period from and after such Due Date to but not including the date such Principal
Prepayment was applied to such Mortgage Loan, to the extent actually collected
from the related Mortgagor (without regard to any Prepayment Premium that may
have been collected).
"PREPAYMENT INTEREST SHORTFALL" means, with respect to any Mortgage
Loan that was subject to a Principal Prepayment in full or part during any
Collection Period, which Principal Prepayment was applied to such Mortgage Loan
prior to such Mortgage Loan's Due Date in such Collection Period, the amount of
interest that would have accrued at the related Net Mortgage Rate (except to the
extent it constitutes Excess Interest) on the amount of such Principal
Prepayment during the period commencing on the date as of which such Principal
Prepayment was applied to such Mortgage Loan and ending on the day immediately
preceding such Due Date, inclusive, to the extent not collected from the related
Mortgagor (without regard to any Prepayment Premium that may have been
collected).
"PREPAYMENT PREMIUM" means any premium, penalty or fee paid or
payable, as the context requires, by a Mortgagor in connection with a Principal
Prepayment on, or other early collection of principal of, a Mortgage Loan
(including, without limitation, an REO Mortgage Loan).
"PRINCIPAL BALANCE CERTIFICATES" means, collectively, the REMIC III
Regular Certificates other than the Class X Certificates.
"PRINCIPAL DISTRIBUTION AMOUNT" means, for any Distribution Date,
the aggregate of (i) the Current Principal Distribution Amount for such
Distribution Date, and (ii) if such Distribution Date is subsequent to the
initial Distribution Date, the excess, if any, of the Principal Distribution
Amount for the preceding Distribution Date, over the aggregate distributions of
principal made on the Principal Balance Certificates in respect of such
Principal Distribution Amount on the preceding Distribution Date.
"PRINCIPAL PREPAYMENT" means any payment of principal made by the
Mortgagor on a Mortgage Loan that is received in advance of its scheduled Due
Date and that is not accompanied by an amount of interest representing scheduled
interest due on any date or dates in any month or months subsequent to the month
of prepayment.
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"PRIVATELY OFFERED CERTIFICATES" means, unless and until registered
under the Securities Act, the Class X, Class F, Class G, Class H, Class J, Class
K, Class L, Class M, Class N and Residual Certificates.
"PROPOSED PLAN" has the meaning set forth in Section 8.20.
"PROSPECTIVE INVESTOR" means any prospective purchaser of a
Certificate or, in the case of a Book-Entry Certificate, of a beneficial
ownership interest therein.
"PROSPECTUS SUPPLEMENT" the Prospectus Supplement dated November 5,
1998 relating to the Publicly Offered Certificates.
"PUBLICLY OFFERED CERTIFICATES" means the Class A-1, Class A-2,
Class B, Class C, Class D and Class E Certificates.
"PURCHASE PRICE" means, with respect to any Mortgage Loan (other
than an REO Mortgage Loan), a price equal to the outstanding principal balance
of such Mortgage Loan as of the date of purchase, together with (a) all accrued
and unpaid interest on such Mortgage Loan at the related Mortgage Rate to but
not including the Due Date in the Collection Period of purchase, (b) all related
unreimbursed Servicing Advances, and any Advance Interest payable on any Advance
hereunder accrued to the date of purchase on Advances and (c) if such Mortgage
Loan is being repurchased by a Seller pursuant to Section 7 of the related
Mortgage Loan Purchase Agreement, all expenses reasonably incurred or to be
incurred by the Master Servicer, the Special Servicer, the Depositor and the
Trustee in respect of the Breach or Material Defect giving rise to the
repurchase obligation. With respect to any REO Property, Purchase Price means
the amount calculated in accordance with the preceding sentence in respect of
the related REO Mortgage Loan.
"QIB" means a "qualified institutional buyer" within the meaning of
Rule 144A under the Securities Act.
"QUALIFIED APPRAISER" means an Independent licensed MAI-designated
appraiser with at least five years experience in properties of like kind and in
the same area.
"QUALIFIED INSURER" means an insurance company or security or
bonding company duly qualified as such under the laws of the relevant
jurisdiction and duly authorized and licensed in such jurisdiction to transact
the applicable insurance business and to write the insurance provided.
"QUALIFIED MORTGAGE" means a Mortgage Loan that is a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code (but without
regard to the rule in Treasury Regulation Section 1.860G-2(f)(2) that treats a
defective obligation as a qualified mortgage, or any substantially similar
successor provision) and applicable Treasury regulations promulgated pursuant
thereto.
"QUALIFYING SUBSTITUTE MORTGAGE LOAN" means a Mortgage Loan
substituted for a Deleted Mortgage Loan which, on the date of substitution, (i)
has a principal balance, after deduction of the principal portion of the Monthly
Payment due in the month of substitution, not in excess of the Stated Principal
Balance of the Deleted Mortgage Loan; (ii) is accruing interest at a rate of
interest at least equal to that of the Deleted Mortgage Loan; (iii) has a fixed
Mortgage Rate; (iv) is accruing interest on the same basis as the Deleted
Mortgage Loan (for example, on the basis of a 360-day year consisting of twelve
30-day months); (v) has a remaining term to stated maturity not greater than,
and not more than two years less than, that of the Deleted Mortgage Loan; (vi)
has an original Loan-to-Value Ratio not
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higher than that of the Deleted Mortgage Loan and a current Loan-to-Value Ratio
(equal to the principal balance on the date of substitution divided by its
current Appraised Value) not higher than the then-current Loan-to-Value Ratio of
the Deleted Mortgage Loan; (vii) will comply with all of the representations and
warranties relating to Mortgage Loans set forth in the related Mortgage Loan
Purchase Agreement, as of the date of substitution; (viii) has an Environmental
Assessment relating to the related Mortgaged Property in its Servicing File; and
(ix) as to which the Trustee has received a written opinion of Independent
outside tax counsel, reasonably acceptable in form and substance to the Trustee,
at the related Seller's expense, that such Mortgage Loan is a "qualified
replacement mortgage" within the meaning of Section 860G(a)(4) of the Code;
provided that no such Mortgage Loan shall be substituted for a Deleted Mortgage
Loan if it has a Maturity Date after the date three years prior to the Final
Rated Distribution Date, and provided, further, that no such Mortgage Loan shall
be substituted for a Deleted Mortgage Loan unless Rating Agency Confirmation is
obtained; and provided, further that no such Mortgage Loan shall be substituted
for a Deleted Mortgage Loan if it would result in an Adverse REMIC Event in
respect of any REMIC Pool; and provided, further that no such Mortgage Loan
shall be substituted for a Deleted Mortgage Loan unless the Operating Adviser
shall have approved of such substitution based upon an engineering report and
the Environmental Assessment obtained with respect to such Mortgage Loan
(provided, however, that such approval of the Operating Adviser may not be
unreasonably withheld, as determined by the Special Servicer in accordance with
the Servicing Standard). In the event that either one mortgage loan is
substituted for more than one Deleted Mortgage Loan or more than one mortgage
loan is substituted for one or more Deleted Mortgage Loans, then (a) the
principal balance referred to in clause (i) above shall be determined on the
basis of aggregate principal balances and (b) the rates referred to in clauses
(ii) and (iii) above and the remaining term to stated maturity referred to in
clause (v) above shall be determined on a weighted average basis. Whenever a
Qualifying Substitute Mortgage Loan is substituted for a Deleted Mortgage Loan
pursuant to this Agreement, the party effecting such substitution shall certify
that such Mortgage Loan meets all of the requirements of this definition and
shall send such certification to the Trustee.
"RATING AGENCIES" means DCR and Fitch.
"RATING AGENCY CONFIRMATION" means, with respect to any matter,
where required under this Agreement, confirmation in writing by each Rating
Agency that a proposed action, failure to act, or other event specified herein
will not in and of itself result in the withdrawal, downgrade, or in the case of
Fitch, qualification of the then-current rating assigned by such Rating Agency
to any Class of Certificates then rated by such Rating Agency.
"REALIZED LOSS" means (x) with respect to each defaulted Mortgage
Loan as to which a Final Recovery Determination has been made, or with respect
to any REO Mortgage Loan as to which a Final Recovery Determination has been
made as to the related REO Property, an amount (not less than zero) equal to (i)
the unpaid principal balance of such Mortgage Loan (or, in the case of an REO
Property, the related REO Mortgage Loan) as of the commencement of the
Collection Period in which the Final Recovery Determination was made, plus (ii)
all accrued but unpaid interest on such Mortgage Loan (or, in the case of an REO
Property, the related REO Mortgage Loan) at the related Mortgage Rate to but not
including the Due Date in the Collection Period in which the Final Recovery
Determination was made, in any event determined without taking into account the
amounts described in subclause (iv) of this sentence, plus (iii) any related
unreimbursed Servicing Advances as of the commencement of the Collection Period
in which the Final Recovery Determination was made, together with any new
related Servicing Advances made during such Collection Period and all unpaid
Advance Interest on all Advances, minus (iv) all payments and proceeds, if any,
received in respect of such Mortgage Loan or REO Property, as the case may be,
during the Collection Period in which such Final Recovery Determination was made
(net of any related Liquidation Expenses paid therefrom); (y) with respect to
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any Mortgage Loan as to which any portion of the outstanding principal or
accrued interest owed thereunder was forgiven in connection with a bankruptcy or
similar proceeding involving the related Mortgagor or a modification, waiver or
amendment of such Mortgage Loan granted or agreed to by the Master Servicer or
Special Servicer pursuant to Section 8.18, the amount of such principal or
interest so forgiven; and (z) with respect to any Mortgage Loan as to which the
Mortgage Rate thereon has been permanently reduced for any period in connection
with a bankruptcy or similar proceeding involving the related Mortgagor or a
modification, waiver or amendment of such Mortgage Loan granted or agreed to by
the Master Servicer or Special Servicer pursuant to Section 8.18, the amount of
the consequent reduction in the interest portion of each successive Monthly
Payment due thereon. Each such Realized Loss shall be deemed to have been
incurred on the Due Date for each affected Monthly Payment.
"RECORD DATE" means, with respect to any Class of Certificates for
any Distribution Date, the last Business Day of the calendar month immediately
preceding the month in which such Distribution Date occurs.
"REMIC" means a real estate mortgage investment conduit within the
meaning of Section 860D of the Code.
"REMIC I" means the segregated pool of assets included in the Trust
created hereby and to be administered hereunder, consisting of the Mortgage
Loans (excluding the right to Excess Interest in respect of the
Hyper-Amortization Loans), as from time-to-time are subject to this Agreement,
the Mortgage Files relating thereto, all proceeds of and payments under such
Mortgage Loans received after the Closing Date (other than Excess Interest),
such amounts as shall from time to time be held in the Collection Account and
the Distribution Account, the Insurance Policies and any REO Properties acquired
in respect of any Mortgage Loan, for which a REMIC election is to be made
pursuant to Section 12.1(a) hereof.
"REMIC I INTERESTS" means, collectively, the REMIC I Regular
Interests and the Class R-I Certificates.
"REMIC I REGULAR INTEREST" means, with respect to each Mortgage Loan
(including, without limitation, each REO Mortgage Loan), the separate
uncertificated interest in REMIC I issued in respect of such Mortgage Loan
hereunder and designated as a "regular interest" in REMIC I. Each REMIC I
Regular Interest shall represent a right to receive interest at the related
REMIC I Remittance Rate and distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Principal Balance (which shall equal the Cut-off Date Principal Balance of the
related Mortgage Loan). The designation for each REMIC I Regular Interest shall
be the loan number for the related Mortgage Loan set forth in the Mortgage Loan
Schedule as of the Closing Date. If a Replacement Mortgage Loan or Loans are
substituted for any Deleted Mortgage Loan, the REMIC I Regular Interest that
related to the Deleted Mortgage Loan shall thereafter relate to such Replacement
Mortgage Loan(s).
"REMIC I REMITTANCE RATE" means, with respect to any REMIC I Regular
Interest for any Distribution Date, a rate per annum equal to the Net Mortgage
Rate in effect for the related Mortgage Loan (including without limitation an
REO Mortgage Loan). If any Mortgage Loan included in the Trust Fund as of the
Closing Date is replaced by a Replacement Mortgage Loan or Loans, the REMIC I
Remittance Rate for the related REMIC I Regular Interest shall still be
calculated in accordance with the preceding sentence based on the Net Mortgage
Rate for the Deleted Mortgage Loan.
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"REMIC II" means the segregated pool of assets consisting of the
REMIC I Regular Interests and all distributions thereon conveyed to the Trustee
for the benefit of REMIC III and for which a separate REMIC election is to be
made pursuant to Section 12.1(a) hereof.
"REMIC II DISTRIBUTION AMOUNT" has the meaning set forth in Section
6.2(c).
"REMIC II INTERESTS" means, collectively, the REMIC II Regular
Interests and the Class R-II Certificates.
"REMIC II REGULAR INTEREST" means any of the fourteen separate
uncertificated beneficial interests in REMIC II issued hereunder and designated
as a "regular interest" in REMIC II. Each REMIC II Regular Interest shall
represent a right to receive interest at the related REMIC II Remittance Rate in
effect from time to time and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto. The designations for the respective REMIC II Regular Interests
are set forth in the Preliminary Statement hereto.
"REMIC II REMITTANCE RATE" means, with respect to each of REMIC II
Regular Interests A-1, A-2, B, C, D, E, F, G, H, J, K, L, M and N for any
Distribution Date, the Weighted Average REMIC I Remittance Rate.
"REMIC III CERTIFICATE" means any Certificate, other than a Class
R-I or Class R-II Certificate.
"REMIC III DISTRIBUTION AMOUNT" has the meaning set forth in Section
6.3(c).
"REMIC III REGULAR CERTIFICATE" means any REMIC III Certificate,
other than a Class R-III Certificate, and where appropriate with respect to a
Class X Certificate, may refer to the Component Interests thereof, as the case
requires. References to REMIC III Regular Certificates will, with respect to the
Class N Certificate, be considered to refer to that component of the rights
represented by such Class N Certificate that is a "regular interest" in REMIC
III, where appropriate.
"REMIC POOL" means each of the three segregated pools of assets
designated as a REMIC pursuant to Section 12.1(a) hereof.
"REMIC PROVISIONS" means the provisions of the federal income tax
law relating to real estate mortgage investment conduits, which appear at
Sections 860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations and rulings promulgated thereunder, as the foregoing
may be in effect from time to time and taking account, as appropriate, of any
proposed legislation which, as proposed, would have an effective date prior to
enactment thereof and any proposed regulations.
"RENTS FROM REAL PROPERTY" means, with respect to any REO Property,
income of the character described in Section 856(d) of the Code.
"REO ACQUISITION" means the acquisition of any REO Property pursuant
to Section 8.7.
"REO EXTENSION" has the meaning set forth in Section 8.19(a).
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"REO INCOME" means, with respect to any REO Property for any
Collection Period, all income received in connection with such REO Property
during such period.
"REO MORTGAGE LOAN" means a Mortgage Loan as to which the related
Mortgaged Property is an REO Property.
"REO PROPERTY" means a Mortgaged Property acquired by the Trust
through foreclosure, deed-in-lieu of foreclosure, abandonment or reclamation
from bankruptcy in connection with a Defaulted Mortgage Loan or otherwise
treated as foreclosure property under the REMIC Provisions.
"REO SALE DEADLINE" has the meaning set forth in Section 8.19(a).
"REO STATUS REPORT": A report substantially containing the content
described in Exhibit H-5 attached hereto, prepared in accordance with Section
8.14(j).
"REO TAX" has the meaning set forth in Section 8.20(a).
"REPLACEMENT MORTGAGE LOAN" means any Qualifying Substitute Mortgage
Loan that is substituted for one or more Deleted Mortgage Loans.
"REPORT DATE" means the third Business Day before the related
Distribution Date.
"REPURCHASE PROCEEDS" means amounts paid by any Seller under the
related Mortgage Loan Purchase Agreement, in connection with the repurchase of
any Mortgage Loan as contemplated by Section 2.3.
"REQUEST FOR RELEASE" means a request for release of certain
documents relating to the Mortgage Loans, a form of which is attached hereto as
Exhibit C.
"REQUIRED APPRAISAL LOAN" means any Mortgage Loan (including without
limitation any REO Mortgage Loan) as to which an Appraisal Event has occurred
and is continuing.
"RESERVE ACCOUNT" means the account or accounts created and
maintained pursuant to Section 8.3(d).
"RESERVE FUNDS" means, with respect to any Mortgage Loan, any cash
amounts or instruments convertible into cash delivered by the related Mortgagor
to be held in escrow by or on behalf of the Mortgagee representing reserves for
repairs, replacements, capital improvements, environmental testing and
remediation and/or similar type items with respect to the related Mortgaged
Property.
"RESIDUAL VALUE POLICY": A non-cancelable residual value insurance
policy that guarantees the Balloon Payment on a Balloon Loan, the form of which
has been approved by the Rating Agencies.
"RESIDUAL CERTIFICATES" means, with respect to REMIC I, the Class
R-I Certificates, with respect to REMIC II, the Class R-II Certificates and,
with respect to REMIC III, the Class R-III Certificates.
"RESPONSIBLE OFFICER" means, when used with respect to the initial
Trustee, any officer assigned to the Asset-Backed Securities Trust Services
Group of its Corporate Trust Department, and
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when used with respect to any successor Trustee, any Vice President, Assistant
Vice President, corporate trust officer or any assistant corporate trust
officer.
"REVISED INTEREST RATE" has the meaning set forth in the definition
of Excess Interest.
"RULE 144A" means Rule 144A under the Securities Act.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES LEGEND" means the legend to be printed on the
Certificates as set forth in Section 3.3(c).
"SELLER" means MSMC or Heller, as the case may be.
"SENIOR CERTIFICATES" means, collectively, the Class A and Class X
Certificates.
"SERVICING ACCOUNT" means the account or accounts created and
maintained pursuant to Section 8.3(a).
"SERVICING ADVANCES" means all customary, reasonable and necessary
"out of pocket" costs and expenses (including attorneys' fees and expenses and
fees of real estate brokers) incurred by the Master Servicer, the Special
Servicer or, if applicable, the Trustee or the Fiscal Agent in connection with
the servicing and administering of (a) a Mortgage Loan in respect of which a
default, delinquency or other unanticipated event has occurred or as to which a
default is imminent or (b) an REO Property, including, but not limited to, the
cost of (i) compliance with the obligations of the Master Servicer and/or the
Special Servicer set forth in Section 8.3(c) and 8.7(c), (ii) the preservation,
restoration and protection of a Mortgaged Property or REO Property, (iii)
obtaining any Insurance Proceeds, Condemnation Proceeds or Liquidation Proceeds
in respect of any Mortgage Loan or REO Property, (iv) any enforcement or
proceedings with respect to a Mortgaged Property, including without limitation
foreclosures and similar proceedings, (v) the operation, management, maintenance
and liquidation of any REO Property and (vi) any other cost or expense
designated as a Servicing Advance in accordance with this Agreement; provided
that, notwithstanding anything to the contrary, "Servicing Advances" shall not
include allocable overhead of the Master Servicer or the Special Servicer, such
as costs for office space, office equipment, supplies and related expenses,
employee salaries and related expenses and similar internal costs and expenses,
or costs incurred by either such party in connection with its purchase of any
Mortgage Loan or REO Property pursuant to any provision of this Agreement. All
Emergency Advances made by the Special Servicer hereunder shall be considered
"Servicing Advances" for the purposes hereof.
"SERVICING FEES" means, with respect to each Mortgage Loan
(including without limitation each REO Mortgage Loan), the Master Servicing Fee
and, if applicable, the Special Servicing Fee.
"SERVICING FILE" means, collectively as to any Mortgage Loan, any
documents, other than documents required to be part of the related Mortgage
File, in the possession of the Master Servicer or Special Servicer and relating
to the origination and servicing of such Mortgage Loan, including without
limitation a closing binder for such Mortgage Loan and, in each case if and to
the extent available, any appraisal, environmental report, engineering report,
operating statements, rent rolls and copies of major leases.
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"SERVICING OFFICER" means any officer or employee of the Master
Servicer involved in, or responsible for, the administration and servicing of
the Mortgage Loans whose name and specimen signature appear on a list of
servicing officers or employees furnished to the Trustee by the Master Servicer
and signed by an officer of the Master Servicer, as such list may from time to
time be amended.
"SERVICING STANDARD" has the meaning set forth in Section 8.1(a).
"SERVICING TRANSFER EVENT" means, with respect to any Mortgage Loan,
the occurrence of any of the events described in clauses (a) through (h) of the
definition of "Specially Serviced Mortgage Loan".
"SPECIAL SERVICER" means GMAC Commercial Mortgage Corporation or any
successor Special Servicer as herein provided.
"SPECIAL SERVICING FEE" means, with respect to each Specially
Serviced Mortgage Loan and REO Mortgage Loan, the fee designated as such and
payable to the Special Servicer pursuant to Section 8.10(b).
"SPECIAL SERVICING FEE RATE" means, with respect to each Specially
Serviced Mortgage Loan and REO Mortgage Loan, 0.25% per annum.
"SPECIAL SERVICING OFFICER" means any officer or employee of the
Special Servicer involved in, or responsible for, the administration and
servicing of the Specially Serviced Mortgage Loans whose name and specimen
signature appear on a list of servicing officers or employees furnished to the
Trustee and the Master Servicer by the Special Servicer signed by an officer of
the Special Servicer, as such list may from time to time be amended.
"SPECIALLY SERVICED ASSET REPORT" means the report prepared by the
Special Servicer substantially with the information set forth in Exhibit G-2
attached hereto.
"SPECIALLY SERVICED MORTGAGE LOAN" means any Mortgage Loan as to
which any of the following events has occurred:
(a) the related Mortgagor has failed to make when due any Balloon
Payment, which failure has continued unremedied for 30 days; or
(b) the related Mortgagor has failed to make when due any Monthly
Payment (other than a Balloon Payment) or any other payment required under the
related Mortgage Note or the related Mortgage, which failure continues
unremedied for 60 days; or
(c) the Master Servicer has determined, in its good faith and
reasonable judgment, that a default in the making of a Monthly Payment or any
other payment required under the related Mortgage Note or the related Mortgage
is likely to occur within 30 days and is likely to remain unremedied for at
least 60 days or, in the case of a Balloon Payment, for at least 30 days; or
(d) there shall have occurred a default under the related loan
documents, other than as described in clause (a) or (b) above, that (in the
Master Servicer's good faith and reasonable judgment) materially impairs the
value of the related Mortgaged Property as security for the Mortgage Loan or
otherwise materially and adversely affects the interests of Certificateholders,
which default has continued
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unremedied for the applicable grace period under the terms of the Mortgage Loan
(or, if no grace period is specified, 60 days); or
(e) a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises in an involuntary case under any present or
future federal or state bankruptcy, insolvency or similar law or the appointment
of a conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against the
related Mortgagor and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days; or
(f) the related Mortgagor shall have consented to the appointment of
a conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
such Mortgagor or of relating to all or substantially all of its property; or
(g) the related Mortgagor shall have admitted in writing its
inability to pay its debts generally as they become due, filed a petition to
take advantage of any applicable insolvency or reorganization statute, made an
assignment for the benefit of its creditors, or voluntarily suspended payment of
its obligations; or
(h) the Master Servicer shall have received notice of the
commencement of foreclosure or similar proceedings with respect to the related
Mortgaged Property;
provided that a Mortgage Loan will cease to be a Specially Serviced Mortgage
Loan when a Liquidation Event has occurred in respect of such Mortgage Loan, or
at such time as such of the following as are applicable occur with respect to
the circumstances identified above that caused the Mortgage Loan to be
characterized as a Specially Serviced Mortgage Loan (and provided that no other
Servicing Transfer Event then exists):
(w) with respect to the circumstances described in clauses (a) and
(b) above, the related Mortgagor has made three consecutive
full and timely Monthly Payments under the terms of such
Mortgage Loan (as such terms may be changed or modified in
connection with a bankruptcy or similar proceeding involving
the related Mortgagor or by reason of a modification, waiver
or amendment granted or agreed to by the Special Servicer
pursuant to Section 8.18);
(x) with respect to the circumstances described in clauses (c),
(e), (f) and (g) above, such circumstances cease to exist in
the good faith and reasonable judgment of the Special
Servicer;
(y) with respect to the circumstances described in clause (d)
above, such default is cured; and
(z) with respect to the circumstances described in clause (h)
above, such proceedings are terminated.
"STARTUP DAY" means, with respect to each of REMIC I, REMIC II and
REMIC III, the day designated as such in Section 12.1 (b).
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"STATED MATURITY DATE" means, with respect to any Mortgage Loan, the
Due Date on which the last payment of principal is due and payable under the
terms of the related Mortgage Note as in effect on the Closing Date, without
regard to any change in or modification of such terms in connection with a
bankruptcy or similar proceeding involving the related Mortgagor or a
modification, waiver or amendment of such Mortgage Loan granted or agreed to by
the Master Servicer or Special Servicer pursuant to Section 8.18.
"STATED PRINCIPAL BALANCE" means, as of any date of determination,
with respect to any Mortgage Loan (including without limitation any REO Mortgage
Loan), an amount equal to (a) the unpaid principal balance of such Mortgage Loan
as of the Cut-off Date (or, in the case of a Replacement Mortgage Loan, as of
the related date of substitution), after application of all payments due on or
before such date, whether or not received, reduced on a cumulative basis on each
subsequent Distribution Date (to not less than zero) by (b) the sum of (i) all
payments (or P&I Advances in lieu thereof) of, and all other collections
allocated as provided in Section 1.2 to, principal of or with respect to such
Mortgage Loan that are (or, if they had not been applied to cover any Additional
Trust Expense, would have been) distributed to Certificateholders on such
Distribution Date, and (ii) the principal portion of any Realized Loss incurred
in respect of such Mortgage Loan during the related Collection Period, provided
that, notwithstanding the foregoing, if a Liquidation Event occurs in respect of
such Mortgage Loan (or any related REO Property), then the "Stated Principal
Balance" of such Mortgage Loan shall be zero commencing as of the Distribution
Date in the Collection Period next following the Collection Period in which such
Liquidation Event occurred.
"SUBORDINATE CERTIFICATES" means, collectively, the Class B, Class
C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class
M and Class N Certificates.
"SUB-SERVICER" means any Person with which the Master Servicer or
the Special Servicer has entered into a Sub-Servicing Agreement.
"SUB-SERVICING AGREEMENT" means the written contract between the
Master Servicer or the Special Servicer and any Sub-Servicer relating to
servicing and administration of Mortgage Loans as provided in Section 8.4.
"SUBSTITUTION SHORTFALL AMOUNT" means, in connection with the
substitution of one or more Replacement Mortgage Loans for one or more Deleted
Mortgage Loans, the amount, if any, by which the Purchase Price or aggregate
Purchase Price, as the case may be, for such Deleted Mortgage Loan(s) exceeds
the initial Stated Principal Balance or aggregate Stated Principal Balance, as
the case may be, of such Replacement Mortgage Loan(s).
"TAX MATTERS PERSON" means the person designated as the "tax matters
person" of any REMIC Pool pursuant to Treasury Regulation Section 1.860F-4(d)
and temporary Treasury Regulations Section 301.6231(a)(7)-1T (or relevant
successor provision), which initially shall be the person having the largest
Percentage Interest in the Residual Certificates of the related REMIC Pool.
"TAX RETURNS" means the federal income tax return on Internal
Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income
Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of each of REMIC I, REMIC II and REMIC III due to its
classification as a REMIC under the REMIC Provisions pursuant to its election
filed in accordance with Section 5.5 hereof, the federal income tax information
return on Internal Revenue Service Form 1041 U.S. Income Tax Return for Estate
and Trusts, to be filed on behalf of the grantor trust, and any and all
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other information, reports or returns that may be required to be furnished to
the Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal or
state law.
"TERMINATION PRICE" shall have the meaning set forth in Section
10.1(b) herein.
"TRANSFER" means any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment of any Ownership Interest in a
Certificate.
"TRANSFEREE" means any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.
"TRUST" means the trust created pursuant to this Agreement, the
assets which consist of all the assets of REMIC I, REMIC II and REMIC III.
"TRUST FUND" means, collectively, all of the assets of the Trust.
"TRUSTEE" means LaSalle National Bank, as Trustee, or its
successor-in-interest, or if any successor trustee or any co-trustee shall be
appointed as herein provided, then Trustee shall also mean such successor
trustee (subject to Section 7.7 hereof) and such co-trustee (subject to Section
7.9 hereof), as the case may be.
"TRUSTEE FEE" means, with respect to each Mortgage Loan (including
without limitation each REO Mortgage Loan), the fee designated as such and
payable to the Trustee pursuant to Section 7.12.
"TRUSTEE FEE RATE" means .0031% per annum.
"UCC FINANCING STATEMENT" means a financing statement executed and
filed pursuant to the Uniform Commercial Code, as in effect in the relevant
jurisdiction, or, in the case of Louisiana, the comparable provisions of
Louisiana law.
"UNCERTIFICATED ACCRUED INTEREST" shall mean, with respect to any
class of uncertificated REMIC I Regular Interests or REMIC II Regular Interests
for any Distribution Date, the product of the Uncertificated Principal Balance
of such class as of the close of the preceding Distribution Date (or, in the
case of the first Distribution Date, as of the Closing Date) and one-twelfth of
the applicable REMIC I Remittance Rate or REMIC II Remittance Rate. The
Uncertificated Accrued Interest in respect of each class of REMIC I Regular
Interests and REMIC II Regular Interest shall accrue on the basis of a 360-day
year consisting of twelve 30-day months.
"UNCERTIFICATED DISTRIBUTABLE INTEREST" means, with respect to any
REMIC I Regular Interest or REMIC II Regular Interest for any Distribution Date,
an amount equal to: (a) the Uncertificated Accrued Interest in respect of such
REMIC I Regular Interest or REMIC II Regular Interest, as the case may be, for
such Distribution Date; reduced (to not less than zero) by (b) the portion of
any Net Aggregate Prepayment Interest Shortfall for such Distribution Date
allocated to such REMIC I Regular Interest or REMIC II Regular Interest, as the
case may be, as set forth below; and increased by (c) any Uncertificated
Distributable Interest in respect of such REMIC I Regular Interest or REMIC II
Regular Interest, as the case may be, for the immediately preceding Distribution
Date that was not deemed paid on the immediately preceding Distribution Date
pursuant to Section 6.2 or 6.3, as applicable, together with one month's
interest (calculated on the basis of a 360-day year consisting of
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twelve 30-day months) on such unpaid Uncertificated Distributable Interest at
the REMIC I Remittance Rate or the REMIC II Remittance Rate, as the case may be,
applicable to such REMIC I Regular Interest or REMIC II Regular Interest, as the
case may be, for the current Distribution Date. The Net Aggregate Prepayment
Interest Shortfall for any Distribution Date shall be allocated: (i) among the
respective REMIC I Regular Interests, pro rata in accordance with the respective
amounts of Uncertificated Accrued Interest with respect thereto for such
Distribution Date; and (ii) among the respective REMIC II Regular Interests, pro
rata in accordance with the respective amounts of Uncertificated Accrued
Interest with respect thereto for such Distribution Date.
"UNCERTIFICATED PRINCIPAL BALANCE" means the principal amount of any
REMIC I Regular Interest or REMIC II Regular Interest outstanding as of any date
of determination. As of the Closing Date, the Uncertificated Principal Balance
of each REMIC I Regular Interest shall equal the Cut-off Date Principal Balance
of the related Mortgage Loan. On each Distribution Date, the Uncertificated
Principal Balance of each REMIC I Regular Interest shall be reduced by all
distributions of principal deemed to have been made thereon on such Distribution
Date pursuant to Section 6.2 and, if and to the extent appropriate, shall be
further reduced on such Distribution Date as provided in Section 6.5. As of the
Closing Date, the Uncertificated Principal Balance of each REMIC II Regular
Interest shall equal the amount set forth in the Preliminary Statement hereto as
its initial Uncertificated Principal Balance. On each Distribution Date, the
Uncertificated Principal Balance of each REMIC II Regular Interest shall be
reduced by all distributions of principal deemed to have been made thereon on
such Distribution Date pursuant to Section 6.3 and, if and to the extent
appropriate, shall be further reduced on such Distribution Date as provided in
Section 6.5.
"UNDERWRITABLE CASH FLOW" means, with respect to any Mortgaged
Property or REO Property, for any twelve month period (or such shorter period
calculated on an annualized basis), the underwritable cash flow amount
calculated in accordance with Exhibit H hereto.
"UNDERWRITERS" means Morgan Stanley & Co. Incorporated or its
successor in interest, Bear, Stearns & Co. Inc. or its successor in interest and
Prudential Securities Incorporated or its successor in interest.
"UNINSURED CAUSE" means any cause of damage to property subject to a
Mortgage such that the complete restoration of such property is not fully
reimbursable by the hazard insurance policies or flood insurance policies
required to be maintained pursuant to Section 8.5.
"UNITED STATES PERSON" means a citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision thereof, an
estate whose income from sources without the United States is includable in
gross income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States or a
trust subject to the control of a United States person and the primary
supervision of a United States court.
"UNLEGENDED DEFINITIVE CERTIFICATE" means a Definitive Certificate
that does not bear the Securities Legend.
"USPAP" means the Uniform Standards of Professional Appraisal
Practices.
"VOTING RIGHTS" means the voting rights to which the
Certificateholders are entitled hereunder. At all times during the term of this
Agreement, 97% of the Voting Rights shall be allocated among the Holders of the
various outstanding Classes of Principal Balance Certificates in proportion to
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the respective Class Principal Balances of their Certificates, 2% of the Voting
Rights shall be allocated to the Holders of the Interest Only Certificates, and
the remaining Voting Rights shall be allocated equally among the Holders of the
respective Classes of the Residual Certificates. Voting Rights allocated to a
Class of Certificateholders shall be allocated among such Certificateholders in
proportion to the Percentage Interests evidenced by their respective
Certificates.
"WATCH LIST": A report substantially containing the content
described in Exhibit H-6 attached hereto, prepared in accordance with Section
8.14(j).
"WEIGHTED AVERAGE REMIC I REMITTANCE RATE" means, with respect to
each Distribution Date, the weighted average of the REMIC I Remittance Rates for
the REMIC I Regular Interests, weighted on the basis of the Uncertificated
Principal Balances of the REMIC I Regular Interest related to each Mortgage Loan
at the beginning of the related Collection Period (disregarding any REMIC I
Regular Interest with respect to which a Principal Prepayment in full was
received during the Collection Period on the Mortgage Loan to which such REMIC I
Regular Interest relates).
"WORKOUT FEE" means, with respect to each Corrected Mortgage Loan,
the fee designated as such and payable to the Special Servicer pursuant to
Section 8.10(b).
"WORKOUT FEE RATE" means, with respect to each Corrected Mortgage
Loan as to which a Workout Fee is payable, 1.0% per annum.
SECTION 1.2. CERTAIN CALCULATIONS IN RESPECT OF THE MORTGAGE POOL.
(a) All amounts collected in respect of any group of related
Cross-Collateralized Mortgage Loans (other than REO Mortgage Loans) in the form
of payments from Mortgagors, Insurance Proceeds, Condemnation Proceeds and
Liquidation Proceeds, shall be applied by the Master Servicer among such
Mortgage Loans in accordance with the express provisions of the related loan
documents and, in the absence of such express provisions, on a pro rata basis in
accordance with the respective amounts then "due and owing" as to each such
Mortgage Loan. All amounts collected in respect of any Mortgage Loan (whether or
not such Mortgage Loan is a Cross-Collateralized Mortgage Loan) other than an
REO Mortgage Loan, in the form of payments from Mortgagors, Condemnation
Proceeds, Insurance Proceeds, Liquidation Proceeds, Repurchase Proceeds or
payments of Substitution Shortfall Amounts shall be applied to amounts due and
owing under the related Mortgage Note and Mortgage (including, without
limitation, for principal and accrued and unpaid interest) in accordance with
the express provisions of the related Mortgage Note and Mortgage and, in the
absence of, or to the extent not covered by, such express provisions, shall be
applied for purposes of this Agreement: first, as a recovery of any related
unreimbursed Servicing Advances and, if applicable, unpaid Liquidation Expenses;
second, as a recovery of accrued and unpaid interest at the related Mortgage
Rate on such Mortgage Loan to but not including, as appropriate, the date of
receipt or, in the case of a full Monthly Payment from any Mortgagor, the
related Due Date, third, as a recovery of principal of such Mortgage Loan then
due and owing, including, without limitation, by reason of acceleration of the
Mortgage Loan following a default thereunder (or, if a Liquidation Event has
occurred in respect of such Mortgage Loan, as a recovery of principal to the
extent of its entire remaining unpaid principal balance); fourth, as a recovery
of amounts to be currently applied to the payment of, or escrowed for the future
payment of, real estate taxes, assessments, insurance premiums, ground rents (if
applicable) and similar items; fifth, as a recovery of Reserve Funds to the
extent then required to be held in escrow; sixth, as a recovery of any
Prepayment Premium then due and owing under such Mortgage Loan; seventh, as a
recovery of any Penalty Charges then due and owing under such Mortgage Loan;
eighth, as a recovery of any assumption fees and modification fees then due and
owing under such Mortgage Loan; ninth, as a recovery of any other
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amounts then due and owing under such Mortgage Loan; and tenth, as a recovery of
any remaining principal of such Mortgage Loan to the extent of its entire
remaining unpaid principal balance.
(b) Collections in respect of each REO Property (exclusive of
amounts to be applied to the payment of the costs of operating, managing,
maintaining and disposing of such REO Property) shall be treated: first, as a
recovery of any related unreimbursed Servicing Advances; second, as a recovery
of accrued and unpaid interest on the related REO Mortgage Loan at the related
Mortgage Rate to but not including the Due Date in the Collection Period of
receipt; third, as a recovery of principal of the related REO Mortgage Loan to
the extent of its entire unpaid principal balance; and fourth, as a recovery of
any other amounts deemed to be due and owing in respect of the related REO
Mortgage Loan.
(c) The foregoing applications of amounts received in respect of any
Mortgage Loan or REO Property shall be determined by the Master Servicer.
SECTION 1.3. INTERPRETATION.
(a) As used herein and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in Section
1.1 shall have the respective meanings given to them under United States
generally accepted accounting principles or regulatory accounting principles, as
applicable.
(b) The words "hereof", "herein" and "hereunder", and words of
similar import when used in this Agreement, shall refer to this agreement as a
whole and not to any particular provision of this Agreement, and references to
Sections, Schedules and Exhibits contained in this Agreement are references to
Sections, Schedules and Exhibits in or to this Agreement unless otherwise
specified.
(c) Whenever a term is defined herein, the definition ascribed to
such term shall be equally applicable to both the singular and plural forms of
such term and to masculine, feminine and neuter genders of such term.
(d) This Agreement is the result of arm's-length negotiations
between the parties and has been reviewed by each party hereto and its counsel.
Each party agrees that any ambiguity in this Agreement shall not be interpreted
against the party drafting the particular clause which is in question.
ARTICLE II.
DECLARATION OF TRUST;
ISSUANCES OF CERTIFICATES
SECTION 2.1. CONVEYANCE OF MORTGAGE LOANS.
(a) The Depositor, concurrently with the execution and delivery
hereof, does hereby assign to the Trustee without recourse for the benefit of
the Certificateholders all the right, title and interest of the Depositor,
including any security interest therein for the benefit of the Depositor, in, to
and under (i) the Mortgage Loans identified on the Mortgage Loan Schedule, (ii)
Sections 2, 3, 6, 7 and 9 of each Mortgage Loan Purchase Agreement and (iii) all
other assets included or to be included in REMIC I (as described in Section
12.1(a) hereof and the definition of REMIC I) or in the grantor trust (as
described in Section 12.1(a) hereof). Such assignment includes all interest and
principal received or receivable on or with respect to the Mortgage Loans (other
than payments of principal and interest due
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and payable on the Mortgage Loans on or before the Cut-off Date). The transfer
of the Mortgage Loans and the related rights and property accomplished hereby is
absolute and, notwithstanding Section 13.12, is intended by the parties to
constitute a sale.
(b) In connection with the Depositor's assignment pursuant to
Section 2.1(a) above, the Depositor shall direct, and hereby represents and
warrants that it has directed, each Seller pursuant to the applicable Mortgage
Loan Purchase Agreement to deliver to and deposit with, or cause to be delivered
to and deposited with, the Trustee or a Custodian appointed thereby (with a copy
to the Master Servicer), on or before the Closing Date, the Mortgage File for
each Mortgage Loan so assigned. If a Seller cannot so deliver, or cause to be
delivered, as to any of its Mortgage Loans, the original or a copy of any of the
documents and/or instruments referred to in clauses (ii), (iv), (viii), (xi)(A)
and (xii) of the definition of "Mortgage File", with (if appropriate) evidence
of recording or filing, as the case may be, thereon, solely because of a delay
caused by the public recording or filing office where such document or
instrument has been delivered for recordation or filing, the delivery
requirements of this Section 2.1(b) shall be deemed to have been satisfied as to
such missing item, and such missing item shall be deemed to have been included
in the related Mortgage File, provided that such Seller has delivered to the
Trustee on or before the Closing Date a copy of such document or instrument
(without evidence of recording or filing thereon, but certified (which
certificate may relate to multiple documents and/or instruments) by such Seller
to be a true and complete copy of the original thereof submitted for recording
or filing, as the case may be), and the Seller shall deliver to or at the
direction of the Trustee, promptly following the receipt thereof, the original
of such missing document or instrument (or a copy thereof) with (if appropriate)
evidence of recording or filing, as the case may be, thereon. If a Seller cannot
so deliver, or cause to be delivered, as to any of its Mortgage Loans, the
original or a copy of the related lender's title insurance policy referred to in
clause (ix) of the definition of "Mortgage File" solely because such policy has
not yet been issued, the delivery requirements of this Section 2.1(b) shall be
deemed to be satisfied as to such missing item, and such missing item shall be
deemed to have been included in the related Mortgage File, provided that such
Seller has delivered to the Trustee on or before the Closing Date a commitment
for title insurance "marked-up" at the closing of such Mortgage Loan, and such
Seller shall deliver to or at the direction of the Trustee, promptly following
the receipt thereof, the original related lender's title insurance policy (or a
copy thereof). In addition, notwithstanding anything to the contrary contained
herein, if there exists with respect to any group of related
Cross-Collateralized Mortgage Loans only one original of any document referred
to in the definition of "Mortgage File" covering all the Mortgage Loans in such
group, then the inclusion of the original of such document in the Mortgage File
for any of the Mortgage Loans in such group shall be deemed an inclusion of such
original in the Mortgage File for each such Mortgage Loan. None of the Trustee,
any Custodian, the Master Servicer or the Special Servicer shall be liable for
any failure by any Seller or the Depositor to comply with the document delivery
requirements of the Mortgage Loan Purchase Agreements and this Section 2.1(b).
Notwithstanding the foregoing, the failure to deliver the originals
or copies of any of the documents or instruments referred to in clauses (ii),
(iv), (viii), (ix), (xi)(A), (xii) and (ix) of the definition of "Mortgage File"
by the date 120 days after the Closing Date shall constitute a Material Defect
in respect of the related Mortgage Loan under Section 2.3 hereof.
If any of the endorsements referred to in clause (i) of the
definition of "Mortgage File", or any of the assignments referred to in clauses
(iii), (v), (vii), (x)(B) and (xi)(B) of the definition of "Mortgage File", are
delivered to the Trustee in blank, the Trustee shall be responsible for
completing the related endorsement or assignment in the name of the Trustee (in
such capacity).
(c) The Trustee shall, as to each Mortgage Loan, at the expense of
the related Seller, promptly (and in any event within 45 days following the
receipt thereof) record or file, as the case may
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be, in the appropriate public office for real property records or UCC Financing
Statements, as appropriate, each assignment to the Trustee referred to in
clauses (iii), (v), (vii), (x)(B) and (xi)(B) of the definition of "Mortgage
File". Each such assignment shall reflect that it should be returned by the
public recording office to the Trustee following recording or filing (at which
time it shall deliver a copy thereof to the Master Servicer); provided that in
those instances where the public recording office retains the original
assignment of Mortgage, assignment of Assignment of Leases, or assignment of
security agreement the Trustee shall request the Seller to obtain therefrom for
the Trustee at the expense of the related Seller a certified copy of the
recorded original. If any such document or instrument is lost or returned
unrecorded or unfiled, as the case may be, because of a defect therein, the
Trustee shall direct the Seller promptly to prepare and file or record or cause
to be prepared and filed or recorded, a substitute therefor or cure such defect,
as the case may be, at the expense of the related Seller.
(d) All documents and records in the possession of the Depositor or
the Sellers that relate to the Mortgage Loans and that are not required to be a
part of a Mortgage File in accordance with the definition thereof shall be
delivered to the Master Servicer on or before the Closing Date and shall be held
by the Master Servicer on behalf of the Trustee in trust for the benefit of the
Certificateholders.
(e) In connection with the Depositor's assignment pursuant to
Section 2.1(a) above, the Depositor shall deliver to the Trustee and the Master
Servicer on or before the Closing Date a copy of a fully executed counterpart of
each Mortgage Loan Purchase Agreement, as in full force and effect on the
Closing Date.
SECTION 2.2. ACCEPTANCE BY TRUSTEE. The Trustee will hold (i) the
documents constituting a part of the Mortgage Files delivered to it, (ii) the
other REMIC I assets, (iii) the REMIC II assets and (iv) the REMIC III assets,
in each case, in trust for the use and benefit of all present and future
Certificateholders, and will hold the grantor trust assets for the use and
benefit of present and future Class N Certificateholders.
Upon execution and delivery of this Agreement in respect of the
Initial Certification, and within 75 days after the execution and delivery of
this Agreement in respect of the Final Certification, the Trustee shall examine
the Mortgage Files in its possession, and shall deliver to the Depositor, the
Master Servicer, the Special Servicer and each Seller a certification (the
"INITIAL CERTIFICATION" and the "FINAL CERTIFICATION", respectively, in the
respective forms set forth as Exhibit B-1 and Exhibit B-2 hereto) stating, (i)
in the case of the Initial Certification, as to each Mortgage Loan listed in the
Mortgage Loan Schedule, except as may be specified in the schedule of exceptions
to Mortgage File delivery attached thereto, that (A) all documents specified in
clause (i) of the definition of "Mortgage File" are in its possession, (B) such
documents have been reviewed by it and have not been materially mutilated,
damaged, defaced, torn or otherwise physically altered, and such documents
relate to such Mortgage Loan, (C) based on its examination and only as to the
foregoing documents, the loan number and the name of the Mortgagor set forth in
the Mortgage Loan Schedule respecting such Mortgage Loan accurately reflects the
information contained in such documents, and (D) each Mortgage Note has been
endorsed as provided in clause (i) of the definition of "Mortgage File"; and
(ii) in the case of the Final Certification, as to each Mortgage Loan listed in
the Mortgage Loan Schedule, except as may be certified in the schedule of
exceptions to Mortgage File delivery attached thereto, that (W) all documents
specified in clauses (i), (ii), (iii), (ix), (xii) (to the extent it relates to
the foregoing) and (xiii) are in its possession, (X) all documents delivered to
it or a Custodian as part of the related Mortgage File have been reviewed by it
or such Custodian and have not been materially mutilated, damaged, defaced, torn
or otherwise physically altered, and such documents relate to such Mortgage
Loan, (Y) based on its examination and only as to the foregoing documents, the
loan number, the street address of the Mortgaged Property and the name of the
Mortgagor set forth in the Mortgage Loan Schedule respecting such Mortgage Loan
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accurately reflects the information contained in the documents in the Mortgage
File and (Z) each Mortgage Note has been endorsed and each Mortgage has been
assigned as provided in clauses (i) and (iii), respectively, of the definition
of "Mortgage File." The Trustee shall deliver to the Master Servicer, the
Special Servicer, each Seller (as to its respective Mortgage Loans only), the
Operating Adviser and the Majority Certificateholder of the Controlling Class, a
copy of such Final Certification. Within 180 days after the Cut-off Date, the
Trustee shall provide a confirmation to the Master Servicer, the Special
Servicer and each Seller of receipt or non-receipt of recorded Assignments of
Mortgage. In giving the certifications required above, the Trustee shall be
under no obligation or duty to inspect, review or examine any such documents,
instruments, securities or other papers to determine whether they or the
signatures thereon are valid, legal, genuine, enforceable, in recordable form or
appropriate for their represented purposes, or that they are other than what
they purport to be on their face, or to determine whether any Mortgage File
should include any assumption agreement, modification agreement, consolidation
agreement, extension agreement, Assignment of Lease, ground lease, UCC Financing
Statement, guaranty, written assurance or substitution agreement.
The Trustee or its authorized agents shall retain possession and
custody of each Mortgage File in accordance with and subject to the terms and
conditions set forth herein.
SECTION 2.3. SELLERS' REPURCHASE OF MORTGAGE LOANS FOR DOCUMENT
DEFECTS AND BREACHES OF REPRESENTATIONS AND WARRANTIES.
(a) If any party hereto discovers that any document constituting a
part of a Mortgage File has a Material Defect, or discovers or receives notice
of a breach of any representation, warranty or covenant relating to any Mortgage
Loan set forth in the related Mortgage Loan Purchase Agreement, as the case may
be, that may give rise to a repurchase obligation on the part of the related
Seller (a "BREACH"), such party shall give prompt written notice to the other
parties hereto. Promptly upon becoming aware of any such Material Defect or
Breach, the Trustee shall request that the related Seller within the time period
provided for in the related Mortgage Loan Purchase Agreement cure such Material
Defect or Breach, as the case may be, in all material respects or repurchase the
affected Mortgage Loan for a cash amount equal to the applicable Purchase Price,
all in accordance with the related Mortgage Loan Purchase Agreement; provided,
however, that, in lieu of effecting any such repurchase, a Seller will be
permitted to deliver a Qualifying Substitute Mortgage Loan and to pay a cash
amount equal to the applicable Substitution Shortfall Amount, subject to the
terms and conditions of the related Mortgage Loan Purchase Agreement and this
Agreement.
A document in the Mortgage File shall be deemed to have a "MATERIAL
DEFECT" if (a) any document required to be included in the Mortgage File is not
in the Trustee's possession within the time required to be delivered, (b) such
document has been mutilated, damaged, defaced, torn or otherwise physically
altered in any material respect at the time of its delivery to the Trustee, (c)
the information set forth in the Mortgage Loan Schedule respecting such Mortgage
Loan differs from the information contained in the documents in the Mortgage
File in a material and adverse manner, or (d) a Mortgage Note has not been
endorsed or a Mortgage has not been assigned, or an assignment of Mortgage has
not been delivered as provided in Section 2.1 hereof.
As to any Qualifying Substitute Mortgage Loan, the Trustee shall
direct the related Seller to deliver to the Trustee for such Qualifying
Substitute Mortgage Loan (with a copy to the Master Servicer), the related
Mortgage File with the related Mortgage Note endorsed as required by clause (i)
of the definition of "Mortgage File." No substitution may be made in any
calendar month after the Determination Date for such month. Monthly Payments due
with respect to Qualifying Substitute Mortgage Loans after the related date of
substitution, and Monthly Payments due with respect to Deleted
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Mortgage Loans after the Cut-off Date and on or prior to the related date of
substitution, shall be part of the Trust Fund. Monthly Payments due with respect
to Qualifying Substitute Mortgage Loans on or prior to the related date of
substitution, and Monthly Payments due with respect to Deleted Mortgage Loans
after the related date of substitution, shall not be part of the Trust Fund and
will be remitted by the Master Servicer to the related Seller promptly following
receipt.
In any month in which a Seller substitutes one or more Qualifying
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer will determine the applicable Substitution Shortfall Amount. The
Trustee shall direct such Seller, to deposit cash equal to such amount into the
Collection Account concurrently with the delivery of the Mortgage File for the
Qualifying Substitute Mortgage Loan, without any reimbursement thereof. The
Seller shall give written notice to the Trustee and the Master Servicer of such
deposit promptly following the occurrence thereof.
If the affected Mortgage Loan is to be repurchased, the Trustee
shall designate the Collection Account as the account to which funds in the
amount of the Purchase Price are to be wired. Any such purchase of a Mortgage
Loan shall be on a whole loan, servicing released basis.
The Trustee shall direct the related Seller to amend the Mortgage
Loan Schedule to reflect the removal of each Deleted Mortgage Loan and, if
applicable the substitution of the Qualifying Substitute Mortgage Loan; and,
upon such amendment, the Trustee shall deliver or cause the delivery of such
amended Mortgage Loan Schedule to the other parties hereto. Upon any such
substitution, the Qualifying Substitute Mortgage Loan shall be subject to the
terms of this Agreement in all respects.
(b) In connection with any repurchase of or substitution for a
Mortgage Loan contemplated by this Section 2.3, the Trustee, the Master Servicer
and the Special Servicer shall each promptly tender to the related Seller, upon
delivery to each of them of a receipt executed by such Seller, all portions of
the Mortgage File and other documents pertaining to such Mortgage Loan possessed
by it, and each document that constitutes a part of the Mortgage File shall be
endorsed or assigned to the extent necessary or appropriate to the related
Seller, or its designee in the same manner, and pursuant to appropriate forms of
assignment, substantially similar to the manner and forms pursuant to which
documents were previously assigned to the Trustee, but in any event, without
recourse, representation or warranty; provided that such tender by the Trustee
shall be conditioned upon its receipt from the Master Servicer of a Request for
Release.
(c) The Mortgage Loan Purchase Agreements provide the sole remedies
available to the Certificateholders, or the Trustee on behalf of the
Certificateholders, respecting any Material Defect or Breach.
SECTION 2.4. REPRESENTATIONS AND WARRANTIES. The Depositor hereby
represents and warrants to the Master Servicer, the Special Servicer, the Fiscal
Agent and the Trustee as of the Closing Date that:
(i) The Depositor is a corporation duly organized, validly
existing and in good standing under the laws governing its creation and
existence and has full corporate power and authority to own its property,
to carry on its business as presently conducted, to enter into and perform
its obligations under this Agreement, and to create the trust pursuant
hereto;
(ii) The execution and delivery by the Depositor of this
Agreement have been duly authorized by all necessary corporate action on
the part of the Depositor; neither the execution and delivery of this
Agreement, nor the consummation of the transactions herein
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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 Closing Date;
(iv) This Agreement has been duly executed and delivered by
the Depositor and, assuming due authorization, execution and delivery by
the other parties hereto, constitutes a valid and binding obligation of
the Depositor enforceable against it in accordance with its terms;
(v) There are no actions, suits or proceedings pending or, to
the best of the Depositor's knowledge, threatened or likely to be asserted
against or affecting the Depositor, before or by any court, administrative
agency, arbitrator or governmental body (A) with respect to any of the
transactions contemplated by this Agreement or (B) with respect to any
other matter that in the judgment of the Depositor will be determined
adversely to the Depositor and will, if determined adversely to the
Depositor, materially and adversely affect it or its business, assets,
operations or condition, financial or otherwise, or adversely affect its
ability to perform its obligations under this Agreement; and
(vi) Immediately prior to the consummation of the transactions
contemplated in this Agreement, the Depositor had good title to and was
the sole owner of each Mortgage Loan free and clear of any and all adverse
claims, charges or security interests.
SECTION 2.5. CONVEYANCE OF INTERESTS. Concurrently with the
execution and delivery of this Agreement, the Depositor does hereby transfer,
assign, set over, deposit with and otherwise convey to the Trustee, without
recourse, in trust, all the right, title and interest of the Depositor in and to
(i) the REMIC I Regular Interests in exchange for the REMIC II Interests, (ii)
the REMIC II Regular Interests in exchange for the REMIC III Certificates, and
(iii) the assets of the grantor trust in exchange for the 100% beneficial
ownership interest therein represented by the Class N Certificates.
ARTICLE III.
THE CERTIFICATES
SECTION 3.1. THE CERTIFICATES.
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(a) The Certificates shall be in substantially the forms set forth
in Exhibits A-1 through A-16 hereto, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Agreement or as may in the reasonable judgment of the Trustee or the
Depositor be necessary, appropriate or convenient to comply, or facilitate
compliance, with applicable laws, and may have such letters, numbers or other
marks of identification and such legends or endorsements placed thereon as may
be required to comply with the rules of any securities exchange on which any of
the Certificates may be listed, or as may, consistently herewith, be determined
by the officers executing such Certificates, as evidenced by their execution
thereof.
The Definitive Certificates shall be printed, typewritten,
lithographed or engraved or produced by any combination of these methods or may
be produced in any other manner permitted by the rules of any securities
exchange on which any of the Certificates may be listed, all as determined by
the officers executing such Certificates, as evidenced by their execution
thereof.
(b) The Certificates will be issued in minimum denominations of (i)
$25,000 initial Certificate Principal Balance, in the case of the Class A-1 and
Class A-2 Certificates, (ii) $50,000 initial Certificate Principal Balance, in
the case of the Class B Certificates, and (iii) $100,000 initial Certificate
Principal Balance or Certificate Notional Amount, as applicable, in the case of
the remaining Classes of Certificates, and in each case in integral multiples of
$1 in excess thereof. The Residual Certificates will be issued in minimum
Percentage Interests of not less than 10%.
(c) Each Certificate shall, on original issue, be authenticated by
the Trustee or the Authenticating Agent upon the order of the Depositor. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certification of
authentication substantially in the form provided for herein, executed by an
authorized officer of the Trustee or the Authenticating Agent, if any, by manual
signature, and such certification upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. At any time and from time to time after the execution
and delivery of this Agreement, the Depositor may deliver Certificates to the
Trustee for authentication, and the Trustee or the Authenticating Agent shall
authenticate and deliver such Certificates as in this Agreement provided and not
otherwise. In the event that additional Certificates need to be prepared at any
time subsequent to the Closing Date, the Depositor shall prepare, or cause to be
prepared, and deliver, or cause to be delivered, at the Depositor's expense, any
such additional Certificates. With respect to the REMIC III Regular
Certificates, on the Closing Date the Trustee or the Authenticating Agent upon
the order of the Depositor shall authenticate Book-Entry Certificates that are
issued to a Clearing Agency or its nominee as provided in Section 3.6 against
payment of the purchase price thereof.
SECTION 3.2. REGISTRATION. The Trustee initially shall be the
registrar (the "CERTIFICATE REGISTRAR") in respect of the Certificates who shall
maintain books for the registration and for the transfer of Certificates (the
"CERTIFICATE REGISTER"). The Certificate Registrar may resign or be discharged
or removed by the Trustee or the Certificateholders, and a new successor may be
appointed, in accordance with the procedures and requirements set forth in
Sections 7.6 and 7.7 hereof with respect to the resignation, discharge or
removal of the Trustee and the appointment of a successor Trustee. The
Certificate Registrar may appoint, by a written instrument delivered to the
Holders and the Trustee, any trust company to act as co-registrar under such
conditions as the Certificate Registrar may prescribe; provided that the
Certificate Registrar shall not be relieved of any of its duties or
responsibilities hereunder by reason of such appointment.
SECTION 3.3. TRANSFER AND EXCHANGE OF CERTIFICATES.
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(a) A Certificate may be transferred by the Holder thereof only upon
presentation and surrender of such Certificate at the Corporate Trust Office (or
the New York Presenting Office, if any) duly endorsed or accompanied by a
written instrument of transfer duly executed by such Holder or such Holder's
duly authorized attorney in such form as shall be satisfactory to the
Certificate Registrar. Upon the transfer of any Certificate in accordance with
the preceding sentence, and subject to the restrictions set forth in the other
subsections of this Section 3.3, the Trustee shall execute, and the Trustee or
any Authenticating Agent shall authenticate and deliver to the transferee, one
or more new Certificates of the same Class, in authorized denominations, and
evidencing, in the aggregate, the same aggregate Certificate Principal Balance,
Certificate Notional Amount or Percentage Interest, as the case may be, as the
Certificate being transferred. No service charge shall be made to a
Certificateholder for any registration of transfer of Certificates, but the
Certificate Registrar may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any registration
or transfer of Certificates. The Trustee may decline to accept any request for a
registration of transfer of any Certificate during the period beginning five
calendar days prior to any Distribution Date.
(b) A Certificate may be exchanged by the Holder thereof for any
number of new Certificates of the same Class, in authorized denominations,
representing in the aggregate the same aggregate Certificate Principal Balance,
Certificate Notional Amount or Percentage Interest, as the case may be, as the
Certificate surrendered, upon surrender of the Certificate to be exchanged at
the Corporate Trust Office (or New York Presenting Office, if any) duly endorsed
or accompanied by a written instrument of exchange duly executed by such Holder
or such Holder's duly authorized attorney in such form as is satisfactory to the
Certificate Registrar. Certificates delivered upon any such exchange will
evidence the same obligations, and will be entitled to the same rights and
privileges, as the Certificates surrendered. No service charge shall be made to
a Certificateholder for any exchange of Certificates, but the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any exchange of
Certificates. Whenever any Certificates are so surrendered for exchange, the
Trustee shall execute and the Trustee or the Authenticating Agent shall
authenticate, date and deliver the Certificates that the Certificateholder
making the exchange is entitled to receive.
(c) All Definitive Certificates that are Privately Offered
Certificates shall initially be Legended Definitive Certificates. By acceptance
of a Legended Definitive Certificate, whether upon original issuance or
subsequent transfer, each Holder of such a Certificate acknowledges the
restrictions on the transfer of such Certificate set forth in the Securities
Legend and agrees that it will transfer such a Certificate only as provided
herein.
The Securities Legend shall appear on the face of the Legended
Definitive Certificates as follows:
THE CERTIFICATES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED OR
QUALIFIED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A)(1) TO A BUYER THAT THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN
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EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A BUYER WHOM THE
SELLER REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED INVESTOR"
WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) or (7) OF REGULATION
D OF THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION.
A transferee shall only be able to take delivery of an Unlegended
Definitive Certificate that is a Privately Offered Certificate if and after the
Depositor submits to the Trustee an Opinion of Counsel of the Depositor stating
that the Securities Legend is not required on such Definitive Certificate by
applicable law. Upon the Depositor submitting such Opinion of Counsel to the
Trustee, the Holder of such Certificate may submit such Certificate to the
Trustee to exchange such Certificate for an Unlegended Definitive Certificate
and the Trustee shall satisfy such request notwithstanding anything else herein
to the contrary, and delivery permitted herein of a Legended Definitive
Certificate may be made in the form of an Unlegended Definitive Certificate.
Except as described below in Sections 3.3(d), 3.3(e) and 3.3(f), no
restrictions to transfer shall apply to the transfer or registration of transfer
of an Unlegended Definitive Certificate to a transferee that takes delivery in
the form of an Unlegended Definitive Certificate.
(d) (i) No transfer of the Senior Certificate shall be made unless
in accordance with the prohibited transaction rules of ERISA and Section 4975 of
the Code and the terms of the Exemption as described in the Prospectus
Supplement under "ERISA Considerations". No Plan as to which the Initial
Purchaser, the Depositor, the Master Servicer, the Special Servicer, the Fiscal
Agent, the Operating Adviser or the Trustee is a party in interest or
disqualified person, and no QIB acting on behalf of or with "plan assets" of any
such Plan, may acquire such Certificates unless pursuant to a statutory
exemption or any of the administrative exemptions issued by the U.S. Department
of Labor, such that the acquisition and holding of Senior Certificates by, on
behalf of or with "plan assets" of such Plan would not constitute or result in a
non-exempt prohibited transaction under ERISA or Section 4975 of the Code by
reason of the application of one or more of the statutory or administrative
exemptions from the prohibited transaction rules described in the Memorandum.
(ii) No transfer of a Subordiante Certificate shall be made unless
the acquiror (i) is not a Plan and is not using "plan assets" of any Plan to
acquire such Certificates, or (ii) is an insurance company investing solely
assets of our general account and such purchase and holding of such Certificates
will not result in a non-exempt prohibited transaction under ERISA or Section
4975 of the Code.
(e) No transfer, sale, pledge or other disposition of any
Privately-Offered Certificate or interest therein shall be made unless that
transfer, sale, pledge or other disposition is exempt from the registration
and/or qualification requirements of the Securities Act and any applicable state
securities laws, or is otherwise made in accordance with the Securities Act and
such state securities laws. If a transfer of any Privately-Offered Certificate
held as a Definitive Certificate is to be made without registration under the
Securities Act (other than in connection with the initial issuance of the
Certificates or a transfer of such Privately-Offered Certificate by the
Depositor or one of its Affiliates), then the Certificate Registrar shall refuse
to register such transfer unless it receives (and upon receipt, may conclusively
rely upon) either: (i) a certificate from the Certificateholder desiring to
effect such transfer substantially in the form attached as Exhibit D-1 hereto
and a certificate from such Certificateholder's
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prospective Transferee substantially in the form attached either as Exhibit D-2A
hereto or as Exhibit D-2B hereto; or (ii) an Opinion of Counsel satisfactory to
the Trustee to the effect that such transfer shall be made without registration
under the Securities Act, together with the written certification(s) as to the
facts surrounding such transfer from the Certificateholder desiring to effect
such transfer and/or such Certificateholder's prospective Transferee on which
such Opinion of Counsel is based (such Opinion of Counsel shall not be an
expense of the Trust or of the Depositor, the Master Servicer, the Special
Servicer, the Trustee or the Certificate Registrar in their respective
capacities as such). If a transfer of any interest in a Privately-Offered
Certificate that constitutes a Book-Entry Certificate is to be made without
registration under the Securities Act (other than in connection with the initial
issuance of the Certificates or a transfer of any interest in such
Privately-Offered Certificate by the Depositor or any of its Affiliates), then
the Certificate Owner desiring to effect such transfer shall be required to
obtain either (i) a certificate from such Certificate Owner's prospective
Transferee substantially in the form attached as Exhibit D-3A hereto or as
Exhibit D-3B hereto, or (ii) an Opinion of Counsel to the effect that such
transfer may be made without registration under the Securities Act. None of the
Depositor, the Trustee, the Master Servicer or the Certificate Registrar is
obligated to register or qualify any Class of Privately-Offered Certificates
under the Securities Act or any other securities law or to take any action not
otherwise required under this Agreement to permit the transfer of any
qualification. Any Certificateholder or Certificate Owner desiring to effect a
transfer of Privately-Offered Certificates or interests therein shall, and does
hereby agree to, indemnify the Depositor, the Underwriter, the Trustee, the
Master Servicer, the Special Servicer and the Certificate Registrar against any
liability that may result if the transfer is not exempt from such registration
or qualification or is not made in accordance with such federal and state laws.
(f) (i) No Residual Certificate may be held or beneficially owned by
a Disqualified Organization. The Residual Certificates shall not be held
or beneficially owned by a non-United States Person. Prior to the
registration of any transfer, sale, pledge or other disposition of a
Residual Certificate, the proposed transferee shall provide to the Trustee
a Transfer Affidavit and Agreement in substantially the form set forth in
Exhibit F, to the effect that such transferee (1) agrees to be bound by
the terms of this Agreement and any restrictions set forth on the face of
such Residual Certificate, as the case may be, and (2) is not a
Disqualified Organization or a non-United States Person and will not hold
such Residual Certificate on behalf of a Disqualified Organization or
non-United States Person, and will promptly notify the Trustee of any
change or impending change in its status as such. The transferor of the
Residual Certificate shall also provide the Trustee with a Transferor
Certificate substantially in the form of Exhibit E.
(ii) In addition, any transfer, sale, pledge or other
disposition of any such Certificate to a Pass-Through Entity shall not be
registered unless the proposed transferee shall have agreed in writing, in
such form as the Trustee may require, to provide to the Trustee such
information as the Trustee may reasonably require concerning any record
interest holder or principal of such Pass-Through Entity who is or was a
Disqualified Organization. Any Holder of a Residual Certificate, by its
acceptance thereof, shall be deemed for all purposes to have consented to
the provisions of this Section 3.3(f).
(iii) The restrictions described in this Section 3.3(f) shall
not apply to a transfer of any such Certificate if the Trustee has
received an Opinion of Counsel to the effect that the restrictions
described in this Section 3.3(f) are not necessary to avoid the imposition
of tax on a REMIC or the disqualification of any REMIC as a REMIC under
the Code.
(iv) (A) If any Disqualified Organization shall become a
Holder of a Residual Certificate, then the last-preceding non-Disqualified
Organization shall be restored, to
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the extent permitted by law, to all rights and obligations as Holder
thereof retroactive to the date of registration of such transfer of such
Residual Certificate. If a non-United States Person shall become a holder
of a Residual Certificate, then the last-preceding United States Person
shall be restored, to the extent permitted by law, to all rights and
obligations as Holder thereof retroactive to the date of registration of
such transfer of such Residual Certificate. If a transfer of a Residual
Certificate is disregarded pursuant to the provisions of Treasury
Regulations Section 1.860E-1 or Section 1.860G-3, then the last-preceding
Permitted Transferee shall be restored, to the extent permitted by law, to
all rights and obligations as Holder thereof retroactive to the date of
registration of such transfer of such Residual Certificate. The Trustee
shall be under no liability to any Person for any registration of transfer
of a Residual Certificate that is in fact not permitted by this Section
3.3(f) or for making any payments due on such Certificate to the holder
thereof or for taking any other action with respect to such holder under
the provisions of this Agreement.
(B) If any purported transferee shall become a Holder of a
Residual Certificate in violation of the restrictions in this Section
3.3(f) and to the extent that the retroactive restoration of the rights of
the Holder of such Residual Certificate as described in clause (iv)(A)
above shall be invalid, illegal or unenforceable, then the Trustee shall
have the right, without notice to the holder or any prior holder of such
Residual Certificate, to sell such Residual Certificate to a purchaser
selected by the Trustee on such terms as the Trustee may choose. Such
purported transferee shall promptly endorse and deliver each Residual
Certificate in accordance with the instructions of the Trustee. Such
purchaser may be the Trustee itself or any Affiliate of the Trustee. The
proceeds of such sale, net of the commissions (which may include
commissions payable to the Trustee or its Affiliates), expenses and taxes
due, if any, will be remitted by the Trustee to such purported transferee.
The terms and conditions of any sale under this clause (iv)(B) shall be
determined in the sole discretion of the Trustee, and the Trustee shall
not be liable to any Person having an ownership interest in a Residual
Certificate as a result of its exercise of such discretion.
(v) Trustee shall make available all information necessary to
compute any tax imposed (A) as a result of the transfer of an ownership
interest in a Residual Certificate to any Person who is a Disqualified
Organization, including the information regarding "excess inclusions" of
such Residual Certificates required to be provided to the Internal Revenue
Service and certain Persons as described in Treasury Regulations Sections
1.860D-1(b)(5) and 1.860E-2(a)(5), and (B) as a result of any regulated
investment company, real estate investment trust, common trust fund,
partnership, trust, estate or organization described in Section 1381 of
the Code that holds an ownership interest in a Residual Certificate having
as among its record holders at any time any Person who is a Disqualified
Organization. Reasonable compensation for providing such information may
be required by the Trustee from such Person.
(g) Each investor purchasing Privately Offered Certificates
from either Underwriter will be deemed to have represented and agreed as
follows (terms used herein that are defined in Rule 144A or in Regulation
D under the Securities Act ("REGULATION D") are used herein as defined
therein):
(i) The investor understands that the Certificates have not
been registered under the Securities Act, and that if in the future it
decides to offer, resell, pledge or otherwise transfer such Certificates
within two years after the later of the original issuance of such
Certificates or the last date on which such Certificates are held by an
affiliate of the Depositor, it will do so only (i) to the Depositor, (ii)
to a person that the seller reasonably believes is a QIB in a transaction
meeting the requirements of Rule 144A, (iii) pursuant to an exemption from
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registration under the Securities Act provided by Rule 144 thereunder (if
available), or (iv) in certificated form to an Institutional Accredited
Investor that delivers to the Trustee a letter in the form of Exhibit D
hereto and such certifications, legal opinions and other information as it
may reasonably require to confirm that the proposed transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act, and in each case in
accordance with any applicable securities laws of any state of the United
States or any other applicable jurisdiction.
(ii) The investor understands that the Certificates, except
for the Residual Certificates, will be issued only in the form of
Book-Entry Certificates, which will be held by the Custodian. Purchasers
of such Certificates will acquire beneficial interests in the Book-Entry
Certificates, which interests will be held directly or indirectly through
Participants.
(iii) The investor understands that Certificates will bear a
Securities Legend unless the Depositor determines otherwise consistent
with applicable law.
The Senior Certificates will also bear the following additional
legend:
NOTWITHSTANDING THE ABOVE, IF THE TRANSFEREE OF THIS CERTIFICATE IS
AN EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF SUCH
PLAN OR IS USING THE ASSETS OF ANY SUCH PLAN TO ACQUIRE OR HOLD THIS
CERTIFICATE, SUCH PLAN OR SUCH PERSON MUST BE AN ACCREDITED
INVESTOR.
The Subordinate Certificates will also bear the following legend:
NOTWITHSTANDING THE ABOVE, THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED
OR OTHERWISE TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT
OR OTHER PLAN SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE"), OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE,
EXCEPT FOR AN INSURANCE COMPANY INVESTING SOLELY ASSETS OF ITS
GENERAL ACCOUNT, WHICH SHALL BE DEEMED TO HAVE REPRESENTED AND
WARRANTED THAT THE PURCHASE AND OWNERSHIP OF THE CERTIFICATE WILL
NOT RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA OR
SECTION 4975 OF THE CODE.
The Residual Certificates, will also bear the following additional
legend:
THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED
TO "DISQUALIFIED ORGANIZATIONS" WITHIN THE MEANING OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED.
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(iv) The investor is either (i) a QIB purchasing for its own
account or for the account of another QIB and it and such other Person are
aware that the sale to it is being made in reliance on Rule 144A or (ii)
an Institutional Accredited Investor and is purchasing the Certificates
for its own account or for an account with respect to which it exercises
sole investment discretion.
(v) If the investor is a QIB, the investor understands that
the Certificates offered in reliance on Rule 144A will be represented by
the Book-Entry Certificates. Before any interest in the Book-Entry
Certificates may be offered, sold, pledged or otherwise transferred to an
Institutional Accredited Investor, the transferee will be required to
provide the Trustee with a Purchaser's Letter in the form attached hereto
as Exhibit D as to compliance with the transfer restrictions referred to
above.
(vi) The investor will deliver to each Institutional
Accredited Investor to whom it transfers Certificates notice of any
restrictions on transfer of such Certificates.
(vii) If the investor is acquiring Senior Certificates, it
understands that, in accordance with the prohibited transaction rules of
ERISA and Section 4975 of the Code and the terms of the Exemptions (as
such term is defined and described under the heading "ERISA
CONSIDERATIONS" in the Prospectus Supplement), no Plan as to which either
Underwriter, the Depositor, the Master Servicer, the Special Servicer, the
Fiscal Agent, the Operating Adviser or the Trustee is a party in interest
or disqualified person, and no qualified institutional buyer acting on
behalf of or with "plan assets" of any such Plan, may acquire such
Certificates unless pursuant to a statutory exemption or any of the
administrative exemptions issued by the U.S. Department of Labor, such
that the acquisition and holding of Senior Certificates by, on behalf of
or with "plan assets" of such Plan would not constitute or result in a
non-exempt prohibited transaction under ERISA or Section 4975 of the Code
by reason of the application of one or more of the statutory or
administrative exemptions from the prohibited transaction rules described
herein.
(viii) If the investor is acquiring Subordinate or Residual
Certificates, (i) it is not a Plan and is not using "plan assets" of any
Plan to acquire such Certificates and (ii) if it is an insurance company,
it is investing solely assets of its general account, and it shall be
deemed to have represented and warranted that the purchase and holding of
such Certificates will not constitute or result in a non-exempt prohibited
transaction under ERISA or Section 4975 of the Code.
(ix) If the investor is acquiring any Privately Offered
Certificate as a fiduciary or agent for one or more investor accounts, it
represents that it has sole investment discretion with respect to such
account and that it has full power to make the acknowledgments,
representations and agreements contained herein on behalf of each such
account.
(x) The investor acknowledges that the Depositor, the
Underwriters, the Trustee, the Fiscal Agent and others will rely on the
truth and accuracy of the foregoing acknowledgments, representations and
agreements, and agrees that if any of the foregoing representations and
agreements deemed to have been made by it by its purchase are no longer
accurate, it shall promptly notify the Depositor and the Underwriters.
(xi) Each original purchaser of the Certificates will be
required to sign a Purchaser's Letter in the form attached as Exhibit D
hereto.
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(xii) The Trustee shall have no liability to the Trust arising
from a transfer of any Certificate in reliance upon a certification,
ruling or Opinion of Counsel described in this Section 3.3; provided,
however, that the Trustee shall not register the transfer of a Residual
Certificate if it has actual knowledge that the proposed transferee does
not meet the qualifications of a permitted Holder of a Residual
Certificate as set forth in this Section 3.3.
SECTION 3.4. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If
(a) any mutilated Certificate is surrendered to the Trustee, or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate and (b) except in the case of a mutilated Certificate so
surrendered, there is delivered to the Trustee such security or indemnity as may
be required by it to save it harmless, then, in the absence of notice to the
Trustee that such Certificate has been acquired by a bona fide purchaser, the
Trustee shall execute, authenticate and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
like tenor and interest in the Trust. In connection with the issuance of any new
Certificate under this Section 3.4, the Trustee may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee) connected therewith. Any replacement Certificate issued pursuant to
this Section 3.4 shall constitute complete and indefeasible evidence of
ownership in the Trust, as if originally issued. whether or not the lost, stolen
or destroyed Certificate shall be found at any time.
SECTION 3.5. PERSONS DEEMED OWNERS. Prior to presentation of a
Certificate for registration of transfer, the Depositor, the Master Servicer,
the Special Servicer, the Fiscal Agent, the Trustee, the Operating Adviser and
any agent of the Depositor, the Master Servicer, the Special Servicer, the
Fiscal Agent, the Trustee or the Operating Adviser may treat the Person in whose
name any Certificate is registered as the owner of such Certificate for the
purpose of receiving distributions as provided in this Agreement and for all
other purposes whatsoever, and neither the Master Servicer, the Special
Servicer, the Trustee, the Fiscal Agent, the Operating Adviser nor any agent of
the Master Servicer, the Special Servicer the Fiscal Agent, the Trustee or the
Operating Adviser shall be affected by any notice to the contrary.
SECTION 3.6. BOOK-ENTRY CERTIFICATES.
(a) Notwithstanding the foregoing, each Class of REMIC III Regular
Certificates, upon original issuance, shall be issued in the form of one or more
physical certificates (collectively, as to any Class of Book-Entry Certificates,
a "GLOBAL CERTIFICATE") representing such Class, to be delivered to the Trustee,
as custodian for The Depository Trust Company (the "DEPOSITORY"), the initial
Clearing Agency, by, or on behalf of, the Depositor. The Global Certificates
shall initially be registered on the Certificate Register in the name of Cede &
Co., the nominee of the Depository, as the initial Clearing Agency, and no
Certificate Owner will receive a Definitive Certificate representing such
Certificate Owner's interest in the Book-Entry Certificates, except as provided
in Section 3.8. Unless and until Definitive Certificates have been issued to the
Certificate Owners pursuant to Section 3.8:
(i) the provisions of this Section 3.6 shall be in full force
and effect with respect to each such Class;
(ii) the Depositor, the Master Servicer, the Certificate
Registrar and the Trustee may deal with the Clearing Agency for all
purposes (including the making of distributions on the Certificates) as
the authorized representative of the Certificate Owners;
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(iii) to the extent that the provisions of this Section 3.6
conflict with any other provisions of this Agreement, the provisions of
this Section 3.6 shall control with respect to each such Class; and
(iv) the rights of the Certificate Owners of each such Class
shall be exercised only through the Clearing Agency and the applicable
Participants and shall be limited to those established by law and
agreements between such Certificate Owners and the Clearing Agency, the
Participants and/or the Indirect Participants. Pursuant to the Depository
Agreement, unless and until Certificates are issued in respect of such
Classes pursuant to Section 3.8, the initial Clearing Agency will make
book-entry transfers among the Participants and receive and transmit
distributions of principal and interest on the related Certificates to
such Participants.
(b) For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of, Holders of the
Certificates evidencing a specified percentage of the aggregate unpaid principal
(and, in the case of the Class X Certificates, notional) amount of Certificates,
such direction or consent may be given in respect of such Classes by the
Clearing Agency at the direction of Certificate Owners owning Certificates
evidencing the requisite percentage of principal (and, in the case of the Class
X Certificates, notional) amount of Certificates. The Clearing Agency may take
conflicting actions with respect to the Certificates to the extent that such
actions are taken on behalf of the Certificate Owners.
SECTION 3.7. NOTICES TO CLEARING AGENCY. Whenever a notice or other
communication to the Certificateholders is required under this Agreement, unless
and until Definitive Certificates shall have been issued to the related
Certificateholders pursuant to Section 3.8, the Trustee shall give all such
notices and communications specified herein to be given to Holders of the
Book-Entry Certificates to the Clearing Agency which shall give such notices and
communications to the related Participants in accordance with its applicable
rules, regulations and procedures.
SECTION 3.8. DEFINITIVE CERTIFICATES.
(a) Definitive Certificates will be issued to the owners of
beneficial interests in a Class of Book-Entry Certificates or their nominees if
(i) the Depository notifies the Depositor and the Trustee in writing that the
Depository is unwilling or unable to continue as Clearing Agency for the
Book-Entry Certificates and a qualifying successor Clearing Agency is not
appointed by the Depositor within 90 days thereof, (ii) the Depositor, at its
option, elects to terminate the book-entry system through the Clearing Agency or
(iii) an Event of Default shall have occurred and is continuing and Holders of
Book-Entry Certificates entitled to at least 51% of the Voting Rights thereof
advise the Depository and the Trustee that the continuation of the book-entry
system through the Depository (or a successor thereto) is no longer in the best
interest of Certificateholders. Upon notice of the occurrence of either of the
events described in the preceding sentence, the Trustee shall notify all
Certificate Owners, through the Clearing Agency, of the occurrence of the event
and of the availability of Definitive Certificates to such Certificate Owners
requesting the same. Upon surrender to the Trustee of the Book-Entry
Certificates by the Clearing Agency, accompanied by registration instructions
from the Clearing Agency for registration, the Trustee shall execute,
authenticate and deliver the Definitive Certificates. None of the Depositor, the
Fiscal Agent or the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates, all references
herein to obligations imposed upon or to be performed by the Clearing Agency
shall be deemed to be imposed upon and performed by the Trustee, to the extent
applicable with respect to such Definitive Certificates, and the Trustee shall
recognize the Holders of Definitive Certificates as Certificateholders
hereunder.
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(b) Distributions of principal and interest on the Definitive
Certificates shall be made by the Trustee directly to holders of Definitive
Certificates in accordance with the procedures set forth in this Agreement.
ARTICLE IV.
ADVANCES
SECTION 4.1. P&I ADVANCES BY MASTER SERVICER.
(a) On each P&I Advance Date, the Master Servicer shall, subject to
Section 4.4, either (i) deposit into the Distribution Account (or, to the extent
made to cover unpaid Servicing Fees, in the Collection Account) from its own
funds an amount equal to the aggregate amount of P&I Advances, if any, to be
made in respect of the related Distribution Date, (ii) apply amounts held in the
Collection Account for future distribution to Certificateholders in subsequent
months in discharge of any such obligation to make P&I Advances, or (iii) make
P&I Advances in the form of any combination of (i) and (ii) aggregating the
total amount of P&I Advances to be made, provided that, if Late Collections of
the delinquent principal and interest payments for which P&I Advances are to be
made for the related Distribution Date, are on deposit in the Collection Account
and available to make such P&I Advances, the Master Servicer shall utilize such
Late Collections to make such P&I Advances pursuant to clause (ii) above. Any
amounts held in the Collection Account for future distribution and so used to
make P&I Advances shall be appropriately reflected in the Master Servicer's
records and advanced by the Master Servicer by deposit in the Collection Account
on or before the next succeeding Determination Date (to the extent not
previously replaced through the deposit of Late Collections of the delinquent
principal and interest in respect of which such P&I Advances were made). If, as
of 3:00 p.m., New York City time, on any P&I Advance Date, the Master Servicer
shall not have made any P&I Advance required to be made on such date pursuant to
this Section 4.01(a) (and shall not have delivered to the Trustee the requisite
Officer's Certificate and documentation related to a determination of
nonrecoverability of a P&I Advance), then the Trustee shall provide notice of
such failure to a Servicing Officer of the Master Servicer by facsimile
transmission sent to telecopy no. (312) 845-8617 (or such alternative number
provided by the Master Servicer to the Trustee in writing) and by telephone at
telephone no. (312) 845-8585 (or such alternative number provided by the Master
Servicer to the Trustee in writing) as soon as possible, but in any event before
5:00 p.m., New York City time, on such day.
(b) The aggregate amount of P&I Advances to be made by the Master
Servicer in respect of the Mortgage Loans (including without limitation Balloon
Mortgage Loans delinquent as to their respective Balloon Payments and REO
Mortgage Loans) for any Distribution Date shall equal, subject to Section 4.4
below, the aggregate of all Monthly Payments (other than Balloon Payments) and
any Assumed Monthly Payments, in each case net of any related Master Servicing
Fee and Workout Fee, that were due or deemed due, as the case may be, in respect
thereof on their respective Due Dates during the related Collection Period and
that were not paid by or on behalf of the related Mortgagors or otherwise
collected as of the close of business on the last day of the related Collection
Period (or otherwise offset as provided in Section 4.1(a) by amounts held in the
Collection Account for future distribution to Certificateholders); provided
that, if an Appraisal Reduction has occurred (and for so long as it exists) with
respect to any Required Appraisal Loan, then, in the event of subsequent
delinquencies thereon, the amount of the P&I Advance in respect of such Required
Appraisal Loan for the related Distribution Date shall be reduced to an amount
equal to the product of (i) the amount of the P&I Advance for such Required
Appraisal Loan for such Distribution Date without regard to this proviso,
multiplied by (ii) a fraction, expressed as a percentage, the numerator of which
is equal to the Stated Principal Balance of such Required Appraisal Loan
immediately prior to such Distribution Date, net of the related Appraisal
Reduction, if any, and the denominator of which is equal to the Stated
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Principal Balance of such Required Appraisal Loan immediately prior to such
Distribution Date. The amount to be advanced by the Master Servicer, Trustee or
Fiscal Agent in respect of any Mortgage Loan on any Distribution Date will be
reduced by the greater of the reduction in respect of any Appraisal Reduction
and the reduction described in the preceding sentence.
SECTION 4.2. SERVICING ADVANCES.
(a) The Master Servicer, the Special Servicer, the Trustee and the
Fiscal Agent shall each make Servicing Advances to the extent provided in this
Agreement, except to the extent that the Master Servicer, the Special Servicer,
the Trustee or the Fiscal Agent determines, as applicable, in accordance with
Section 4.4 below, that any such Servicing Advance would be a Nonrecoverable
Advance. Such determination shall be conclusive and binding on the Trustee and
the Certificateholders.
(b) No more frequently than once per calendar month, the Special
Servicer may require the Master Servicer, and the Master Servicer shall be
obligated, subject to the second following paragraph, to reimburse the Special
Servicer for any Servicing Advances made by but not previously reimbursed to the
Special Servicer, and to pay the Special Servicer interest thereon at the
Advance Rate from the date the advance was made to, but not including, the date
of reimbursement. Such reimbursement and any accompanying payment of interest
shall be made within ten (10) days of the request therefor by wire transfer of
immediately available funds to an account designated by the Special Servicer.
Upon the Master Servicer's reimbursement to the Special Servicer of any
Servicing Advance and payment to the Special Servicer of interest thereon, all
in accordance with this Section 4.2(b), the Master Servicer shall for all
purposes of this Agreement be deemed to have made such Servicing Advance at the
same time as the Special Servicer originally made such Servicing Advance, and
accordingly, the Master Servicer shall be entitled to reimbursement for such
Servicing Advance, together with interest thereon at the Advance Rate, at the
same time, in the same manner and to the same extent as the Master Servicer
would otherwise have been entitled if it had actually made such Servicing
Advance.
Notwithstanding anything to the contrary contained in this
Agreement, if the Special Servicer is required under this Agreement to make any
Servicing Advance but does not desire to do so, the Special Servicer may, in its
sole discretion, request that the Master Servicer make such Servicing Advance,
such request to be made in writing and in a timely manner that does not
materially and adversely affect the interests of any Certificateholder and to be
accompanied by such additional information regarding the circumstances
surrounding such Servicing Advance as the Master Servicer may reasonably
request. Subject to the following paragraph, the Master Servicer shall have the
obligation to make any such Servicing Advance that it is requested by the
Special Servicer to make within ten (10) days of the Master Servicer's receipt
of such request. The Special Servicer shall be relieved of any obligations with
respect to a Servicing Advance that it requests the Master Servicer to make
(regardless of whether or not the Master Servicer shall make such Advance). The
Master Servicer shall be entitled to reimbursement for any Servicing Advance
made by it at the direction of the Special Servicer, together with Advance
Interest thereon, at the same time, in the same manner and to the same extent as
the Master Servicer is entitled with respect to any other Servicing Advance made
thereby.
Notwithstanding the foregoing provisions of this Section 4.2(b), the
Master Servicer shall not be required to make at the Special Servicer's
direction, or to reimburse the Special Servicer for, any Servicing Advance if
the Master Servicer determines (in its good faith and reasonable judgment) that
the Servicing Advance which the Special Servicer is requesting the Master
Servicer to make or to reimburse to the Special Servicer hereunder, although not
characterized by the Special Servicer as a
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Nonrecoverable Servicing Advance, is or would be, if made, a Nonrecoverable
Servicing Advance. The Master Servicer shall notify the Special Servicer in
writing of such determination. Such notice shall not obligate the Special
Servicer to make any such proposed Servicing Advance. The Special Servicer shall
promptly provide the Master Servicer with any information that comes into its
possession that constitutes evidence that any future Advances made with respect
to any Mortgage Loan or REO Property would be Nonrecoverable Advances. The
Special Servicer shall have the option (but not the obligation) to make a
Servicing Advance with respect to any Specially Serviced Mortgage Loan
notwithstanding that such Advance would constitute a Nonrecoverable Advance, if
the Special Servicer believes, in accordance with the Servicing Standard, that
funding such Advance would likely increase Liquidation Proceeds over the amount
that otherwise would have been realized. The Master Servicer may rely
conclusively on any determination by the Special Servicer that any Servicing
Advance is or would be a nonrecoverable advance and shall have no obligation to
make a separate determination of recoverability.
SECTION 4.3. ADVANCES BY TRUSTEE AND FISCAL AGENT.
(a) To the extent that the Master Servicer fails to make a P&I
Advance by 11:00 a.m. on the Business Day following the related P&I Advance Date
(other than a P&I Advance that the Master Servicer determines is a
Nonrecoverable Advance), the Trustee shall make such P&I Advance unless the
Trustee determines that such P&I Advance, if made, would be a Nonrecoverable
Advance. To the extent that the Trustee is required hereunder to make P&I
Advances, it shall deposit the amount thereof in the Distribution Account (or,
to the extent made to cover unpaid Servicing Fees, in the Collection Account) on
the relevant Distribution Date.
(b) To the extent that the Trustee fails to make a P&I Advance
required to be made by the Trustee hereunder by 12:00 p.m., New York City time,
on any Distribution Date (other than a P&I Advance that the Trustee determines
is or would be a Nonrecoverable Advance), the Fiscal Agent will advance such P&I
Advance unless the Fiscal Agent determines that any such P&I Advance, if made,
would be a Nonrecoverable Advance. To the extent that the Fiscal Agent is
required hereunder to make P&I Advances, it shall deposit the amount thereof in
the Distribution Account (or, to the extent made to cover unpaid Servicing Fees,
in the Collection Account) on such Distribution Date.
(c) To the extent that the Master Servicer or Special Servicer fails
to make a Servicing Advance by the fifteenth day after such Servicing Advance is
required to be made (other than a Servicing Advance that the Master Servicer or
Special Servicer determines is or would be a Nonrecoverable Advance), if the
Trustee has actual knowledge of such failure, the Trustee will be required to
give the defaulting party notice of such failure and, if such failure continues
for three (3) more Business Days, the Trustee shall make such Servicing Advance
unless the Trustee determines that such Servicing Advance, if made, would be a
Nonrecoverable Advance.
(d) To the extent that the Trustee fails to make a Servicing Advance
required to be made by the Trustee hereunder by the later of (i) the date such
Servicing Advance is required to be made and (ii) five Business Days after the
date the Trustee knows or should know, pursuant to subsection (c) above, that
such Servicing Advance has not been made by the Master Servicer (other than a
Servicing Advance that the Trustee determines is or would be a Nonrecoverable
Advance), the Fiscal Agent will advance such Servicing Advance, unless the
Fiscal Agent determines that such Servicing Advance, if made, would be a
Nonrecoverable Advance.
The initial Trustee's failure to make any Advance required to be
made by it hereunder shall not constitute a default by the initial Trustee
hereunder if the initial Fiscal Agent makes such Advance.
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SECTION 4.4. EVIDENCE OF NONRECOVERABILITY. Notwithstanding anything
herein to the contrary, no Advance shall be required to be made hereunder if
such Advance would, if made, constitute a Nonrecoverable Advance. In addition,
Nonrecoverable Advances shall be reimbursable pursuant to Section 5.2 out of
general collections on the Mortgage Loans and REO Properties on deposit in the
Collection Account. The determination by the Master Servicer, the Special
Servicer or, if applicable, the Trustee or the Fiscal Agent, that it has made a
Nonrecoverable Advance or that any proposed Advance, if made, would constitute a
Nonrecoverable Advance, shall be evidenced by an Officer's Certificate delivered
promptly (and, in any event, in the case of a proposed P&I Advance to be made by
the Master Servicer, no less than one Business Day prior to the related P&I
Advance Date) to the Trustee (or, if applicable, retained thereby) and the
Depositor, setting forth the basis for such determination, together with (if
such determination is prior to the liquidation of the related Mortgage Loan or
REO Property) a copy of an Appraisal or internal evaluation of the related
Mortgaged Property or REO Property, as the case may be, which shall have been
performed within the twelve months preceding such determination, and further
accompanied by any other information that the Master Servicer or the Special
Servicer may have obtained and that supports such determination. If such an
Appraisal or internal evaluation shall not have been required and performed
pursuant to the terms of this Agreement, the Master Servicer or the Special
Servicer, as the case may be, may, subject to its reasonable and good faith
determination that such Appraisal will demonstrate the nonrecoverability of the
related Advance, obtain an Appraisal for such purpose at the expense of the
Trust payable out of the Collection Account. The Trustee and the Fiscal Agent
shall each be entitled to rely on any determination of nonrecoverability that
may have been made by the Master Servicer or the Special Servicer with respect
to a particular Advance, and the Master Servicer shall be entitled to rely on
any determination of nonrecoverability that may have been made by the Special
Servicer with respect to a particular Advance and shall have no obligation to
make a separate determination of recoverability.
SECTION 4.5. ADVANCE INTEREST. The Master Servicer, the Special
Servicer, the Trustee and the Fiscal Agent shall each be entitled to receive
interest at the Advance Rate in effect from time to time, accrued on the amount
of each Advance made thereby (out of its own funds) for so long as such Advance
is outstanding, payable: first, out of Penalty Charges received on the Mortgage
Loan (including, without limitation, an REO Mortgage Loan as to which such P&I
Advance was made) or, if such amounts are insufficient, out of general
collections on the Mortgage Loans and REO Properties in the Collection Account.
SECTION 4.6. MERGER OR CONSOLIDATION OF FISCAL AGENT. Any Person
into which the Fiscal Agent may be merged or consolidated, or any Person
resulting from any merger, conversion, other change in form or consolidation to
which the Fiscal Agent shall be a party, or any Person succeeding to the
business of the Fiscal Agent, shall be the successor of the Fiscal Agent
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided that (i) the successor to the Fiscal Agent or
resulting Person shall have a net worth of not less than $100,000,000, (ii) such
successor or resulting Person shall be satisfactory to the Trustee, (iii) such
successor or resulting Person shall execute and deliver to the Trustee an
agreement, in form and substance satisfactory to the Trustee, which contains an
assumption by such Person of the due and punctual performance and observance of
each covenant and condition to be performed or observed by the Fiscal Agent
under this Agreement from and after the date of such agreement, (iv) the Rating
Agencies shall be given prior written notice of the identity of the proposed
successor or resulting Person and the Rating Agencies shall have provided Rating
Agency Confirmation, and (v) the Fiscal Agent shall deliver to the Trustee an
Officer's Certificate and an Opinion of Counsel acceptable to the Trustee (which
opinion shall be at the expense of the Fiscal Agent) stating that all conditions
precedent to such action under this Section 4.6 have been completed and such
action is permitted by and complies with the terms of this Section 4.6.
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SECTION 4.7. LIMITATION ON LIABILITY OF THE FISCAL AGENT AND OTHERS.
Neither the Fiscal Agent nor any of the directors, officers, employees, agents
or Controlling Persons of the Fiscal Agent shall be under any liability to the
Certificateholders, the Depositor, or the Trustee for any action taken or for
refraining from the taking of any action in good faith, using reasonable
business judgment, pursuant to this Agreement; provided that this provision
shall not protect the Fiscal Agent or any such person against any liability
which would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in its performance of duties under this Agreement. The Fiscal Agent
and any director, officer, employee or agent of the Fiscal Agent may rely in
good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Fiscal
Agent shall not be under any obligation to appear in, prosecute or defend any
legal action which is not incidental to its obligations under this Agreement.
The provisions of this Section 4.7 shall survive the resignation or removal of
the Fiscal Agent and the termination of this Agreement.
SECTION 4.8. INDEMNIFICATION OF FISCAL AGENT. The Fiscal Agent and
each of its directors, officers, employees and agents shall be indemnified and
held harmless by the Trust out of the Collection Account against any and all
claims, losses, penalties, fines, forfeitures, legal fees and related costs,
judgments and any other costs, liabilities, fees and expenses incurred in
connection with any legal action relating to this Agreement, other than any
loss, liability or expense incurred by reason of a breach on the part of the
Fiscal Agent of any of its representations, warranties or covenants contained
herein or the Fiscal Agent's willful misfeasance, bad faith or negligence in the
performance of duties hereunder. The Fiscal Agent shall immediately notify the
Master Servicer and the Trustee if a claim is made by a third party with respect
to this Section 4.8 entitling the Fiscal Agent, its directors, officers,
employees or agents to indemnification hereunder, whereupon the Master Servicer
shall assume the defense of any such claim (with counsel reasonably satisfactory
to the Fiscal Agent) and pay out of the Collection Account all expenses in
connection therewith, including reasonable counsel fees, and promptly pay,
discharge and satisfy out of the Collection Account any judgment or decree which
may be entered against it or them in respect of such claim. Any failure to so
notify the Master Servicer shall not affect any rights the Fiscal Agent, its
directors, officers, employees or agents may have to indemnification under this
Section 4.8, unless the Master Servicer's defense of such claim is materially
prejudiced thereby. The indemnification provided herein shall survive the
resignation or removal of the Fiscal Agent and the termination of this
Agreement.
ARTICLE V.
COLLECTION ACCOUNT; DISTRIBUTION ACCOUNT;
CERTAIN TRUSTEE REPORTS
SECTION 5.1. COLLECTION ACCOUNT.
(a) The Master Servicer shall open, on or prior to the Closing Date,
and shall thereafter maintain a segregated account (the "COLLECTION ACCOUNT")
solely with respect to this Agreement, entitled "GMAC Commercial Mortgage
Corporation, as Master Servicer for LaSalle National Bank, as Trustee for the
Holders of Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2, Collection Account." The Collection Account shall
be an Eligible Account.
(b) On or prior to the date the Master Servicer shall first deposit
funds in the Collection Account, the Master Servicer shall give to the Trustee
prior written notice of the name and address of the depository institution at
which the Collection Account is maintained and the account
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number of the Collection Account. The Master Servicer shall take such actions as
are necessary to cause the depository institution holding the Collection Account
to hold such account in the name of the Master Servicer as provided in Section
5.1(a), subject to the Master Servicer's right to direct payments and
investments and its rights of withdrawal under this Agreement.
(c) The Master Servicer shall deposit into the Collection Account
two Business Days following receipt (or, in the case of unscheduled remittances
of principal or interest, two Business Days following identification of the
proper application of such amounts), the following amounts received or paid by
it, other than in respect of interest and principal on the Mortgage Loans due on
or before the Cut-off Date which shall be remitted to the applicable Seller
(provided that the Master Servicer may retain amounts otherwise payable to the
Master Servicer as provided in Section 5.2(b) rather than deposit them into the
Collection Account):
(i) Principal: all payments on account of principal,
including, without limitation, the principal component of Monthly
Payments, any late payments in respect thereof and any Principal
Prepayments, on the Mortgage Loans;
(ii) Interest: all payments on account of interest, including,
without limitation, the interest component of Monthly Payments, any late
payments in respect thereof and any Default Interest, on the Mortgage
Loans but excluding any Excess Interest (which, if and as received by the
Master Servicer or Special Servicer, shall be remitted by the Master
Servicer or the Special Servicer to the Trustee for deposit to the Excess
Interest Distribution Account, net of fees, expenses or taxes of the Trust
Fund not properly charged to the Collection Account);
(iii) Liquidation Proceeds: all Liquidation Proceeds with
respect to the Mortgage Loans, including, without limitation, REO Mortgage
Loans;
(iv) Insurance Proceeds and Condemnation Proceeds: all
Insurance Proceeds and Condemnation Proceeds with respect to any Mortgaged
Property or REO Property (other than any such proceeds to be applied to
the restoration or repair of such property or released to the related
Mortgagor in accordance with applicable law, the terms of the related
Mortgage Loan or the Servicing Standard, in which case such proceeds shall
be deposited by the Master Servicer into an escrow account or released to
the related Mortgagor, as the case may be, and not deposited in the
Collection Account);
(v) Assumption Fees, Modification Fees, Late Fees and
Prepayment Premiums: all assumption fees, modification fees, Late Fees and
Prepayment Premiums with respect to the Mortgage Loans;
(vi) REO Income: all REO Income (net of any expenses and fees
paid therefrom by the related property manager) in respect of any REO
Properties;
(vii) Investment Losses: any amounts required to be deposited
by the Master Servicer pursuant to Section 5.1(e) in connection with
losses realized on Eligible Investments with respect to funds held in the
Collection Account;
(viii) P&I Advances: that portion of each P&I Advance that
represents the Master Servicing Fee and, if applicable, the Special
Servicing Fee;
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(ix) Repurchase Proceeds and Substitution Shortfall Amounts:
All Repurchase Proceeds and payments of Substitution Shortfall Amounts
with respect to the Mortgage Loans, including, without limitation, the REO
Mortgage Loans; and
(x) Other: all other amounts required to be deposited in the
Collection Account pursuant to this Agreement.
If the Master Servicer deposits in the Collection Account any amount
not required to be deposited therein, it may at any time withdraw such amount
from the Collection Account, any provision herein to the contrary
notwithstanding.
(d) Upon its receipt of any of the amounts described in clauses (i)
through (vi) of Section 5.1(c) with respect to any Mortgage Loan or REO
Property, the Special Servicer shall promptly, but in no event later than the
Business Day after receipt, remit such amounts to the Master Servicer for
deposit into the Collection Account in accordance with Section 5.1(c), unless
the Special Servicer determines, consistent with the Servicing Standard, that a
particular item should not be deposited because of a restrictive endorsement or
other appropriate reason. With respect to any such amounts paid by check to the
order of the Special Servicer, the Special Servicer shall endorse such check to
the order of the Master Servicer and shall deliver promptly, but in no event
later than the Business Day after receipt, any such check to the Master Servicer
by overnight courier, unless the Special Servicer determines, consistent with
the Servicing Standard, that a particular item cannot be so endorsed and
delivered because of a restrictive endorsement or other appropriate reason. The
Master Servicer shall promptly inform the Special Servicer of the name, account
number, location and other necessary information concerning the Collection
Account in order to permit the Special Servicer to make deposits therein.
(e) Funds in the Collection Account may be invested and, if
invested, shall be invested by, and at the risk of, the Master Servicer in
Eligible Investments selected by the Master Servicer which shall mature, unless
payable on demand, not later than the Business Day immediately preceding the
next Master Servicer Remittance Date, and any such Eligible Investment shall not
be sold or disposed of prior to its maturity unless payable on demand. All such
Eligible Investments shall be made in the name of "GMAC Commercial Mortgage
Corporation, in trust for LaSalle National Bank, as Trustee for the Holders of
the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2." None of the Depositor, the Mortgagors, the
Trustee or the Fiscal Agent shall be liable for any loss incurred on such
Eligible Investments.
An amount equal to all income and gain realized from any such
investment (to the extent not needed to offset losses from other investments)
shall be paid to the Master Servicer as additional servicing compensation and
shall be subject to its withdrawal at any time from time to time. The amount of
any losses incurred in respect of any such investments shall be for the account
of the Master Servicer which shall deposit the amount of such loss (to the
extent not offset by income from other investments) in the Collection Account
out of its own funds no later than the next succeeding Master Servicer
Remittance Date.
Except as expressly provided otherwise in this Agreement, if any
default occurs in the making of a payment due under any Eligible Investment, or
if a default occurs in any other performance required under any Eligible
Investment, the Trustee may take such action as may be appropriate to enforce
such payment or performance, including the institution and prosecution of
appropriate proceedings.
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(f) Certain of the Mortgage Loans may provide for payment by the
Mortgagor to the Master Servicer of amounts to be used for payment of Escrow
Payments for the account of the Mortgagor. The Master Servicer shall deal with
these amounts in accordance with the Servicing Standard, applicable law and the
terms of the related Mortgage Loans.
SECTION 5.2. APPLICATION OF FUNDS IN THE COLLECTION ACCOUNT.
(a) Monthly, on each Master Servicer Remittance Date, the Master
Servicer shall withdraw from the Collection Account and deliver to the Trustee
for deposit in the Distribution Account all amounts then on deposit in the
Collection Account that represent payments and other collections on or in
respect of the Mortgage Loans and any REO Properties that were received by the
Master Servicer or the Special Servicer through the end of the related
Collection Period, exclusive of any such payments and other collections that:
(i) constitute Monthly Payments due on a Due Date following the end of the
related Collection Period; (ii) are payable or reimbursable to any Person from
the Collection Account pursuant to clauses (i) through (xvi), inclusive, of
Section 5.2(b); and/or (iii) were deposited in the Collection Account in error.
The Trustee shall notify the Master Servicer (in a manner consistent with the
last sentence of Section 4.1(a)) if any such remittance is not received by 3:00
p.m., New York City time, on any Master Servicer Remittance Date. If the Master
Servicer does not deposit such amounts into the Distribution Account by 3:00
p.m., New York City time on the Master Servicer Remittance Date, then the Master
Servicer will pay interest to the Trustee on such late payment at the prime rate
from the Master Servicer Remittance Date to the date (and not including) that
such payment is received by the Trustee. In addition, on each P&I Advance Date,
the Master Servicer is authorized (or, to the extent provided in Section 4.1,
required) to apply certain amounts held in the Collection Account for future
distribution to Certificateholders in subsequent months and certain Late
Collections, all as more particularly specified in Section 4.1, to make required
P&I Advances on such date.
(b) The Master Servicer may, from time to time, also make
withdrawals from the Collection Account for any of the following purposes:
(i) Servicing Fees: to pay to itself unpaid Master Servicing
Fees and to the Special Servicer unpaid Special Servicing Fees, in each
case earned thereby in respect of each Mortgage Loan, including, without
limitation, each REO Mortgage Loan, the Master Servicer's and the Special
Servicer's respective rights to payment pursuant to this clause (i) being
limited to amounts received, in each case in respect of such Mortgage Loan
that is allocable as a recovery of interest thereon or advanced as a P&I
Advance with respect to such Mortgage Loan;
(ii) Workout Fees and Liquidation Fees: to pay to the Special
Servicer earned and unpaid Workout Fees and Liquidation Fees to which it
is entitled pursuant to, and from the sources contemplated by, Section
8.10(b);
(iii) P&I Advances: to reimburse each of the Fiscal Agent, the
Trustee and the Master Servicer, in that order, for unreimbursed P&I
Advances made by each such Person, the Fiscal Agent's, Trustee's and
Master Servicer's respective rights to be reimbursed pursuant to this
clause (iii) being limited to amounts received that represent Late
Collections of interest on and principal of the particular Mortgage Loans,
including, without limitation, REO Mortgage Loans, with respect to which
such P&I Advances were made (in each case net of related Workout Fees);
(iv) Servicing Advances: to reimburse each of the Fiscal
Agent, the Trustee, the Master Servicer and the Special Servicer, in that
order, for unreimbursed Servicing Advances
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made by each such Person, the Fiscal Agent's, the Trustee's, the Master
Servicer's and the Special Servicer's respective rights to be reimbursed
pursuant to this clause (iv) being limited to amounts received that
represent Late Collections of interest on and principal of the particular
Mortgage Loans, including, without limitation, REO Mortgage Loans, with
respect to which such Servicing Advances were made with respect to any
Mortgage Loan or REO Property;
(v) Nonrecoverable Advances: to reimburse the Fiscal Agent,
the Trustee, the Master Servicer and the Special Servicer, in that order,
out of general collections on the Mortgage Loans and REO Properties, for
Nonrecoverable Advances made by each such Person;
(vi) Advance Interest: to pay the Fiscal Agent, the Trustee,
the Master Servicer and the Special Servicer, in that order, any unpaid
Advance Interest due and payable thereto, the Fiscal Agent's, the
Trustee's, the Master Servicer's and the Special Servicer's respective
rights to payment pursuant to this clause (vi) being limited to Penalty
Charges collected in respect of the Mortgage Loans, including without
limitation any REO Mortgage Loan, as to which the related Advance was
made;
(vii) More Advance Interest: at or following such time as it
reimburses itself, the Special Servicer, the Trustee or the Fiscal Agent,
as applicable, for any unreimbursed Advance pursuant to clause (iii), (iv)
or (v) above or pursuant to Section 8.3, and insofar as payment has not
already been made pursuant to clause (vi) above, to pay itself, the
Special Servicer, the Trustee or the Fiscal Agent, as the case may be, out
of general collections on the Mortgage Loans and REO Properties, any
related Advance Interest accrued and payable on such Advance;
(viii) Additional Master Servicing and Special Servicing
Compensation: to pay to each of itself and the Special Servicer all
amounts deposited in the Collection Account from time to time that
constitute Additional Master Servicing Compensation and Additional Special
Servicing Compensation, respectively;
(ix) Certain Environmental Costs: to pay out of general
collections on the Mortgage Loans and REO Properties, any costs and
expenses incurred by the Trust pursuant to Section 8.7(c);
(x) Operation, Management and Maintenance of REO Property: to
pay expenses related to the proper operation, management and maintenance
of any REO Property pursuant to Section 8.20, but only out of amounts
(whether in the form of REO Income, Liquidation Proceeds, Condemnation
Proceeds or Insurance Proceeds) relating to such REO Property;
(xi) REO Extensions: to pay, out of general collections on the
Mortgage Loans and REO Properties, the cost of obtaining any REO Extension
contemplated by Section 8.19(a) in respect of any REO Property;
(xii) General Reimbursements and Indemnities: to pay itself,
the Special Servicer, the Trustee, the Fiscal Agent, or any of their
respective directors, officers, employees and agents, as the case may be,
out of general collections on the Mortgage Loans and REO Properties, pro
rata based on their respective entitlements, any amounts payable to any
such Person pursuant to any of Sections 4.8, 7.11, 8.15, 8.26 and 8.27;
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(xiii) Legal Advice: to pay, out of general collections on the
Mortgage Loans and REO Properties, for (A) the cost of the Opinions of
Counsel contemplated by Sections 8.7(b)(ii), 8.19(a) and 13.13, (B) the
cost of any other Opinion of Counsel contemplated by this Agreement which
is specifically identified as an expense of the Trust and (C) the cost of
the advice of counsel contemplated by Section 8.20(a);
(xiv) Deleted Mortgage Loans: to any Seller or other
appropriate Person, with respect to each Mortgage Loan or REO Property, if
any, previously purchased or replaced by such Person pursuant to or as
contemplated by this Agreement, all amounts received on such Deleted
Mortgage Loan subsequent to the date of purchase;
(xv) Taxes: to pay any and all federal, state and local taxes
imposed on REMIC I, REMIC II or REMIC III or on the assets or transactions
of any such REMIC Pool, together with all incidental costs and expenses,
and any and all reasonable expenses relating to tax audits, if and to the
extent that either (A) none of the Trustee, the Fiscal Agent, the Master
Servicer or the Special Servicer is liable therefor pursuant to Section
12.1(k), or (B) any such Person that may be so liable (including any
Holder of a Class R-I, Class R-II or Class R-III Certificate) has failed
to make the required payment;
(xvi) Other Expenses of Trust: to pay to the Person entitled
thereto any amounts specified herein to be expenses of the Trust, the
payment of which is not more specifically provided for in any prior clause
of this Section 5.2(b);
(xvii) Correction of Errors: to withdraw funds deposited in
the Collection Account in error;
(xviii) Credit Lease Servicing Advances: to reimburse to the
Master Servicer amounts in accordance with Section 8.35(c); and
(xix) Clear and Terminate: to clear and terminate the
Collection Account with a termination of the Trust pursuant to Section
10.1.
The Master Servicer shall pay to or at the direction of each of the
Depositor, the Special Servicer, the Trustee and the Fiscal Agent from the
Collection Account amounts permitted to be paid therefrom to such Person (or to
third parties in respect of matters that are such Person's responsibility or
under such Person's control) promptly upon receipt of a certificate of, as
applicable, an Authorized Officer of the Depositor, a Special Servicing Officer
of the Special Servicer or a Responsible Officer of the Trustee or the Fiscal
Agent, describing the item and amount to which the Depositor, the Special
Servicer, the Trustee or the Fiscal Agent (or such third party), as the case may
be, is entitled. The Master Servicer may rely conclusively on any such
certificate and shall have no duty to re-calculate the amounts stated therein.
The Master Servicer shall keep and maintain a separate accounting
for each Mortgage Loan for the purpose of justifying any withdrawal from the
Collection Account.
SECTION 5.3. DISTRIBUTION ACCOUNT.
(a) The Trustee shall establish, on or prior to the Closing Date,
and thereafter maintain in the name of the Trustee, a segregated account (the
"DISTRIBUTION ACCOUNT") solely with respect to this Agreement, to be held in
trust for the benefit of the Holders of interests in the Trust until
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disbursed pursuant to the terms of this Agreement, entitled: "LaSalle National
Bank, as trustee, in trust for the benefit of the Holders of Morgan Stanley
Capital I Inc., Commercial Mortgage Pass-Through Certificates, Series 1998-HF2,
Distribution Account." The Distribution Account shall be an Eligible Account.
(b) The Trustee shall deposit into the Distribution Account on the
Business Day received all moneys remitted by the Master Servicer pursuant to
Section 5.2(a) of this Agreement, together with (i) all P&I Advances and
Compensating Interest Payments made by the Master Servicer and (ii) any
reimbursements or indemnifications of the Trust made by any party hereto or any
other Person. Funds in the Distribution Account shall not be invested. The
Distribution Account shall be held separate and apart from and shall not be
commingled with any other monies of or held in trust by the Trustee, including,
without limitation, other monies of the Trustee held under this Agreement.
(c) The Trustee shall make withdrawals from the Distribution Account
only for the following purposes:
(i) to withdraw amounts deposited in the Distribution Account
in error and pay such amounts to the Persons entitled thereto;
(ii) to pay itself unpaid Trustee Fees and any other amounts
owed to it pursuant to Section 7.12 hereof;
(iii) to make distributions to the Certificateholders pursuant
to Section 6.4; and
(iv) to clear and terminate the Distribution Account in
connection with a termination of the Trust pursuant to Section 10.1.
SECTION 5.3.1. EXCESS INTEREST DISTRIBUTION ACCOUNT.
(a) The Trustee shall establish, on or prior to the Closing Date,
and thereafter maintain in the name of the Trustee, a segregated account (the
"Excess Interest Distribution Account") solely with respect to this Agreement,
to be held in trust for the benefit of the Holders of beneficial interests in
the grantor trust described in Section 12.1(a) hereof, until disbursed pursuant
to the terms of this Agreement, entitled "LaSalle National Bank, as trustee, in
trust for the benefit of the Holders of Morgan Stanley Capital I Inc.,
Commercial Mortgage Pass-Through Certificates, Series 1998-HF2, Class N, Excess
Interest Distribution Account." The Excess Interest Distribution Account shall
be an Eligible Account.
(b) The Trustee shall deposit into the Excess Interest Distribution
Account on the Business Day received all moneys received by it from the Master
Servicer or Special Servicer as Excess Interest. The Trustee shall hold
uninvested any funds in the Excess Interest Distribution Account, and shall hold
the Excess Interest Distribution Account separate and apart from, and shall not
commingle any monies thereof with, any other monies of or held in trust by the
Trustee, including, without limitation, other monies of the Trustee held under
this Agreement.
(c) The Trustee shall make withdrawals from the Excess Interest
Distribution Account only for the following purposes:
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(i) to withdraw amounts deposited in the Excess Interest
Distribution Account in error and to pay such amounts to the Persons
entitled thereto;
(ii) to make distributions to the Class N Certificateholders
pursuant to Section 6.4.1, and
(iii) to clear and terminate the Excess Interest Distribution
Account in connection with a termination of the Trust pursuant to Section
10.1.
SECTION 5.4. TRUSTEE REPORTS; ACCESS TO INFORMATION.
(a) Based on (and to the extent of the information contained in) the
Master Servicer Remittance Report and the report pursuant to Section 8.14(a)
provided to the Trustee by the Master Servicer (no later than the Report Date),
on each Distribution Date, the Trustee shall deliver or cause to be sent by
first class mail (or such other medium as the Depositor shall reasonably
request, the incremental cost of which shall be paid in advance by the recipient
thereof), to each Certificateholder, the Rating Agencies, the Master Servicer,
the Special Servicer, the Underwriters, the Depositor, Heller and the Operating
Adviser (or if no Operating Adviser has been elected, then the Majority
Certificateholder of the Controlling Class), and, upon request and written
certification as to its beneficial ownership interest in the Book-Entry
Certificates, to any Certificate Owner: (i) a Monthly Certificateholder Report
(substantially in the form of Exhibit G-1); and (ii) a report containing
information regarding the Mortgage Loans as of the end of the related Collection
Period, which report will contain substantially the categories of information
regarding the Mortgage Loans set forth in Appendix I and Appendix II to the
Prospectus Supplement and will be presented in a tabular format substantially
similar to the format utilized in such Appendix I and Appendix II. The report
referred to in clause (ii) of the preceding sentence shall be updated from time
to time within a reasonable period after the requisite information is available.
The Trustee shall be entitled, in the absence of manifest error, to conclusively
rely on any such information provided to it by the Master Servicer or the
Special Servicer and shall have no obligation to verify any such information.
(b) The Trustee shall provide or cause to be provided to the
Depositor, the Master Servicer and the Special Servicer, and to the OTS, the
FDIC, and any other federal or state banking or insurance regulatory authority
that may exercise authority over any Certificateholder, access to the Mortgage
Files and any other documentation regarding the Mortgage Loans and the Trust
Fund within its control that may be required by this Agreement or by applicable
law. Such access shall be afforded without charge but only upon reasonable prior
written request and during normal business hours at the offices of the Trustee
designated by it.
(c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall send to each Person who at any time during the
calendar year was a Certificateholder of record, a report summarizing the items
specified in clauses (i), (ii) and (x) of the definition of Monthly
Certificateholder Report and provided to Certificateholders pursuant to this
Section 5.4, aggregated for such calendar year or the applicable portion thereof
during which such Person was a Certificateholder, together with such other
customary information as the Trustee deems may be necessary or desirable for
such Certificateholders to prepare their federal income tax returns.
(d) The Trustee shall make available to Persons with an account
number on the Trustee's ASAP (Automatic Statements Accessed by Phone) System (or
a similar system), the reports described in Section 5.4(a) and a summary report
of Certificate Factors via automated facsimile. The Trustee shall make
available, upon request, to Certificateholders, Certificate Owners identified to
the
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Trustee in accordance with subsection (g) below, the Depositor, the
Underwriters, the Master Servicer, the Rating Agencies and the Special Servicer
account numbers on the Trustee's ASAP System (or a similar system). In addition,
if the Depositor so directs the Trustee and on terms acceptable to the Trustee,
the Trustee shall make available through its electronic bulletin board system,
on a confidential basis, such information related to the Mortgage Loans as the
Depositor may reasonably request. A directory has been set up on the bulletin
board in which an electronic file is stored containing monthly servicer data.
All files shall be password protected. Passwords to each file shall be released
by the Trustee, upon request, to Certificateholders, Certificate Owners
identified to the Trustee in accordance with subsection (g) below, the
Depositor, the Underwriters, the Master Servicer, the Rating Agencies and the
Special Servicer. The Trustee also maintains a site on the World Wide Web at
WWW.LNBABS.COM at which certain of the above information will be available.
(e) The Trustee shall make available at its Corporate Trust Office,
during normal business hours, upon reasonable advance written notice for review
by any Certificateholder, any Certificate Owner, any Prospective Investor, the
Underwriters, each Rating Agency, the Operating Adviser (or if no Operating
Adviser has been elected, the Majority Certificateholder of the Controlling
Class) and the Depositor, originals or copies of, among other things, the
following items: (i) this Agreement, the Mortgage Loan Purchase Agreements and
any amendments thereto, to the extent such items are in the Trustee's
possession, (ii) all Monthly Certificateholder Reports and reports pursuant to
Section 5.4(a)(ii) delivered by the Trustee to Certificateholders since the
Closing Date and all Operating Statement Analyses, reports pursuant to Section
8.14(a), and Master Servicer Remittance Reports received by the Trustee from the
Master Servicer since the Closing Date, (iii) all Officer's Certificates
delivered to the Trustee since the Closing Date pursuant to Section 8.12, (iv)
all accountants' reports delivered to the Trustee since the Closing Date
pursuant to Section 8.13, (v) the most recent property inspection reports in the
possession of the Trustee in respect of each Mortgaged Property and REO
Property, (vi) the most recent Mortgaged Property/REO Property annual operating
statement and rent roll, if any, collected or otherwise obtained by or on behalf
of the Master Servicer or the Special Servicer and delivered to the Trustee,
(vii) any and all modifications, waivers and amendments of the terms of a
Mortgage Loan entered into by the Master Servicer and/or the Special Servicer
and delivered to the Trustee, (viii) any and all Officer's Certificates (and
attachments thereto) delivered to or retained by the Trustee to support any of
its, the Fiscal Agent's, the Special Servicer's or the Master Servicer's
determination that any Advance was not or, if made, would not be, recoverable,
(ix) any reports delivered by the Special Servicer to the Trustee pursuant to
Section 8.7(e), and (x) copies of the Prospectus Supplement and the Memorandum,
as such may have been amended or supplemented from time to time and delivered to
the Trustee. Copies (or computer diskettes or other digital or electronic copies
of such information if reasonably available in lieu of paper copies) of any and
all of the foregoing items shall be made available by the Trustee upon request;
provided, however, that the Trustee shall be permitted to require payment by the
requesting party (other than the Depositor, the Underwriters or either Rating
Agency) of a sum sufficient to cover the reasonable expenses actually incurred
by the Trustee of providing access or copies (including electronic or digital
copies) of any such information requested in accordance with the preceding
sentence.
(f) The Trustee shall afford the Underwriters, the Rating Agencies,
the Depositor, the Fiscal Agent, the Master Servicer, the Special Servicer, the
Operating Adviser, any Certificateholder, any Certificate Owner and any
Prospective Investor, upon reasonable notice and during normal business hours,
reasonable access to all relevant, non-attorney-client-privileged records and
documentation, including without limitation information delivered by the Master
Servicer or the Special Servicer to the Trustee pursuant to Section 8.16,
regarding the Mortgage Loans, any REO Properties and all other relevant matters
relating to this Agreement, and access to Responsible Officers of the Trustee.
Copies (or computer diskettes or other digital or electronic copies of such
information if reasonably available in
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lieu of paper copies) of any and all of the foregoing items shall be made
available by the Trustee upon request; provided, however, that the Trustee shall
be permitted to require payment by the requesting party (other than the
Depositor, the Master Servicer, the Special Servicer, the Underwriters or either
Rating Agency) of a sum sufficient to cover the reasonable expenses actually
incurred by the Trustee of providing access or copies (including electronic or
digital copies) of any such information requested in accordance with the
preceding sentence.
(g) In connection with providing access to or copies of the items
described in subsections (d), (e) and (f) of this Section 5.4, the Trustee may
require (a) in the case of Certificate Owners, a written confirmation executed
by the requesting Person, in form reasonably satisfactory to the Trustee,
generally to the effect that such Person is a beneficial holder of Certificates,
is requesting the information solely for use in evaluating such Person's
investment in the Certificates and will otherwise keep such information
confidential and (b) in the case of Prospective Investors, a written
confirmation executed by the requesting Person, in form reasonably satisfactory
to the Trustee, generally to the effect that such Person is a prospective
purchaser of a Certificate or a beneficial ownership interest therein, is
requesting the information solely for use in evaluating a possible investment in
Certificates and will otherwise keep such information confidential. All
Certificateholders, by the acceptance of their Certificates, shall be deemed to
have agreed to keep such information confidential. Notwithstanding the foregoing
provisions of this Section 5.4(g), the Trustee shall have no responsibility for
the accuracy, completeness or sufficiency for any purpose of any information so
made available or furnished by it pursuant to subsections (d), (e) and (f) of
this Section 5.4.
(h) On each Distribution Date, except as described below, the
Trustee shall deliver or shall cause to be delivered by first class mail to each
Certificateholder, each prospective investor in a Certificate (upon request),
Certificate Owner (if known), the Depositor, each Underwriter and each Rating
Agency a copy of the Comparative Financial Status Report, the Delinquent Loan
Status Report, the Historical Loss Estimate Report, the Historical Loan
Modification Report, the REO Status Report and a Watch List (indicating those
Mortgage Loans that the Master Servicer has determined are in jeopardy of
becoming Specially Serviced Mortgage Loans) provided by the Master Servicer to
the Trustee pursuant to Section 8.14(c) and 8.14(e) on the Master Servicer
Remittance Date. The information that pertains to Specially Serviced Mortgage
Loans and REO Properties reflected in such reports shall be based solely upon
the reports delivered by the Special Servicer to the Master Servicer at least
two Business Days prior to the related Master Servicer Remittance Date. Absent
manifest error, (i) none of the Master Servicer, the Special Servicer or the
Trustee shall be responsible for the accuracy or completeness of any information
supplied to it by a Mortgagor or third party that is included in any reports,
statements, materials or information prepared or provided by the Master
Servicer, the Special Servicer or the Trustee, as applicable, (ii) the Trustee
shall not be responsible for the accuracy or completeness of any information
supplied to it by the Master Servicer or Special Servicer that is included in
any reports, statements, materials or information prepared or provided by the
Master Servicer or Special Servicer, as applicable, and (iii) the Trustee shall
be entitled to conclusively rely upon the Master Servicer's reports and the
Special Servicer's reports without any duty or obligation to recompute, verify
or re-evaluate any of the amounts or other information stated therein.
The information contained in the reports in the preceding paragraph
of this Section 5.4(h) shall be made available to the Trustee and the Rating
Agencies electronically by the Master Servicer in the form of the standard CSSA
loan file and CSSA property file, and the Trustee will in lieu of mailing such
reports as described in such preceding paragraph make such reports available
electronically in such form to Certificateholders using the media mutually
agreed upon by the Trustee, each Underwriter and the Depositor; provided,
however, that the Trustee will continue to provide
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Certificateholders with a written copy of such reports upon request in the
manner described in such preceding paragraph.
The Trustee shall deliver a copy of each Operating Statement
Analysis report and NOI Adjustment Worksheet that it receives from the Master
Servicer and Special Servicer to the Depositor, each Underwriter and each Rating
Agency promptly after its receipt thereof. Upon request, the Trustee shall make
such reports available to the Certificateholders and the Special Servicer. Upon
request, the Trustee shall also make available to any potential investor in the
Certificates any NOI Adjustment Worksheet for a Mortgaged Property or REO
Property in the possession of the Trustee.
SECTION 5.5. TRUSTEE TAX REPORTS. The Trustee shall perform all
reporting and other tax compliance duties that are the responsibility of each
REMIC Pool and of the grantor trust under the Code, the REMIC Provisions, or
other compliance guidance issued by the Internal Revenue Service or any state or
local taxing authority. Consistent with this Agreement, the Trustee shall
provide (i) to the Internal Revenue Service or other Persons (including, but not
limited to, any Person that has transferred a Residual Certificate to a
Disqualified Organization or to an agent that has acquired a Residual
Certificate on behalf of a Disqualified Organization) such information as is
necessary for the application of any tax relating to the transfer of a Residual
Certificate to any Disqualified Organization and (ii) to the Certificateholders
such information or reports as are required by the Code or REMIC Provisions. The
Master Servicer shall on a timely basis provide the Trustee with such
information concerning the Mortgage Loans as is necessary for the preparation of
the tax or information returns or receipts of each REMIC Pool as the Trustee may
reasonably request from time to time. The Special Servicer is required to
provide to the Master Servicer all information in its possession with respect to
the Specially Serviced Mortgage Loans and REO Properties in order for the Master
Servicer to comply with its obligations under this Section 5.5. The Trustee
shall be entitled, in the absence of manifest error, to conclusively rely on any
such information provided to it by the Master Servicer or the Special Servicer
and shall have no obligation to verify any such information.
ARTICLE VI.
DISTRIBUTIONS
SECTION 6.1. DISTRIBUTIONS GENERALLY.
(a) All distributions made with respect to each Class on each
Distribution Date shall be allocated pro rata among the outstanding Certificates
in such Class based on their respective Percentage Interests. Except as
otherwise provided below, all such distributions with respect to each Class on
each Distribution Date shall be made to the Certificateholders of the respective
Class of record at the close of business on the related Record Date and shall be
made by wire transfer of immediately available funds to the account of any such
Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder shall have provided the Trustee with wiring
instructions on or before the related Record Date (which wiring instructions may
be in the form of a standing order applicable to all subsequent Distribution
Dates) or otherwise by check mailed to the address of such Certificateholder as
it appears in the Certificate Register. The final distribution on each
Certificate (determined without regard to any possible future reimbursement of
any Realized Loss or Expense Loss previously allocated to such Certificate) will
be made in like manner, but only upon presentation and surrender of such
Certificate at the offices of the Certificate Registrar or such other location
specified in the notice to Certificateholders of such final distribution. Any
distribution that is to be made with respect to a Certificate in reimbursement
of a Realized Loss or Expense Loss previously allocated thereto, which
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reimbursement is to occur after the date on which such Certificate is
surrendered as contemplated by the preceding sentence, will be made by check
mailed to the address of the Certificateholder that surrendered such Certificate
at such address as last appeared in the Certificate Registrar or to any other
address of which the Trustee was subsequently notified in writing.
(b) Each distribution with respect to a Book-Entry Certificate shall
be paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of its
Participants in accordance with its normal procedures. Each Participant shall be
responsible for disbursing such distribution to the Certificate Owners that it
represents and to each Indirect Participant for which it acts as agent. Each
Participant and Indirect Participant shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the
Certificate Registrar, the Depositor, the Master Servicer or the Special
Servicer shall have any responsibility therefor except as otherwise provided by
this Agreement or applicable law.
(c) The rights of the Certificateholders to receive distributions
from the proceeds of the Trust Fund in respect of their Certificates, and all
rights and interests of the Certificateholders in and to such distributions,
shall be as set forth in this Agreement. Neither the Holders of any Class of
Certificates nor any party hereto shall in any way be responsible or liable to
the Holders of any other Class of Certificates in respect of amounts properly
previously distributed on the Certificates. Distributions in reimbursement of
Realized Losses and Expense Losses previously allocated to a Class of
Certificates shall not constitute distributions of principal and shall not
result in a reduction of the related Class Principal Balance.
SECTION 6.2. REMIC I.
(a) On each Distribution Date, the Trustee shall be deemed to apply
the Available Distribution Amount (excluding any amounts attributable to
Prepayment Premiums) as is attributable to each Mortgage Loan for such date for
the following purposes and in the following order of priority:
(i) to pay interest to REMIC II in respect of each REMIC I
Regular Interest, up to an amount equal to, and pro rata in accordance
with, all Uncertificated Distributable Interest (excluding amounts
attributable to Prepayment Premiums) for each such REMIC I Regular
Interest for such Distribution Date;
(ii) to pay principal to REMIC II in respect of each REMIC I
Regular Interest, up to an amount equal to, and pro rata in accordance
with, the excess, if any, of the Uncertificated Principal Balance of such
REMIC I Regular Interest outstanding immediately prior to such
Distribution Date, over the Stated Principal Balance of the related
Mortgage Loan (including without limitation an REO Mortgage Loan or, if
applicable, a Qualifying Substitute Mortgage Loan) that will be
outstanding immediately following such Distribution Date;
(iii) to reimburse REMIC II for any Realized Losses and
Expense Losses previously deemed allocated to the various REMIC I Regular
Interests (with interest), up to an amount equal to, and pro rata in
accordance with, the Loss Reimbursement Amount for each such REMIC I
Regular Interest for such Distribution Date; and
(iv) to the Holders of the Class R-I Certificates that
portion, if any, of the Available Distribution Amount (excluding amounts
attributable to Prepayment Premiums) for such date that has not otherwise
been deemed paid to REMIC II in respect of the REMIC I Regular Interests
pursuant to this Section 6.2(a).
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(b) On each Distribution Date, the Trustee shall be deemed to apply
each Prepayment Premium then on deposit in the Distribution Account and received
during or prior to the related Collection Period, to pay additional interest to
REMIC II in respect of the REMIC I Regular Interest that relates to the Mortgage
Loan (including without limitation an REO Mortgage Loan or, if applicable, a
Replacement Mortgage Loan) as to which such Prepayment Premium was received.
(c) All amounts (other than additional interest in the form of
Prepayment Premiums) deemed paid to REMIC II in respect of the REMIC I Regular
Interests pursuant to this Section 6.2 on any Distribution Date is herein
referred to as the "REMIC II DISTRIBUTION AMOUNT" for such date.
SECTION 6.3. REMIC II.
(a) It is the intention of the parties hereto that the distributions
set forth below result in the Certificate Principal Balances of each Class of
REMIC II Regular Interests and its corresponding Class of Certificates being
equal. On each Distribution Date, the Trustee shall be deemed to apply the REMIC
II Distribution Amount for such date for the following purposes and in the
following order of priority:
(i) to distributions of interest to REMIC III in respect of
REMIC II Regular Interest A-1 and REMIC II Regular Interest A-2, up to an
amount equal to (and pro rata in accordance with) all Uncertificated
Distributable Interest on such REMIC II Regular Interests for such
Distribution Date;
(ii) to distributions of principal in respect of first, REMIC
II Regular Interest A-1, and second, REMIC II Regular Interest A-2, in
each case up to an amount equal to the lesser of (1) the then outstanding
Uncertificated Principal Balance of such Class and (2) the remaining
portion, if any, of such REMIC II Distribution Amount;
(iii) to reimburse REMIC III for any Realized Losses and
Expense Losses previously deemed allocated to REMIC II Regular Interest
A-1 and REMIC II Regular Interest A-2 (with interest), up to an amount
equal to (and pro rata in accordance with) the Loss Reimbursement Amount
in respect of such REMIC II Regular Interest for such Distribution Date;
(iv) to distributions of interest to REMIC III in respect of
REMIC II Regular Interest B, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
(v) to distributions of principal in respect of REMIC II
Regular Interest B, until the Uncertificated Principal Balance thereof is
reduced to zero;
(vi) to reimburse REMIC III for any Realized Losses and
Expense Losses previously deemed allocated to REMIC II Regular Interest B
(with interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such REMIC II Regular Interest for such Distribution Date;
(vii) to distributions of interest to REMIC III in respect of
REMIC II Regular Interest C, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
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(viii) to distributions of principal in respect of REMIC II
Regular Interest C, until the Uncertificated Principal Balance thereof is
reduced to zero;
(ix) to reimburse REMIC III for any Realized Losses and
Expense Losses previously deemed allocated to REMIC II Regular Interest C
(with interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such REMIC II Regular Interest for such Distribution Date;
(x) to distributions of interest to REMIC III in respect of
REMIC II Regular Interest D, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
(xi) to distributions of principal in respect of REMIC II
Regular Interest D, until the Uncertificated Principal Balance thereof is
reduced to zero;
(xii) to reimburse REMIC III for any Realized Losses and
Expense Losses previously deemed allocated to REMIC II Regular Interest D
(with interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such REMIC II Regular Interest for such Distribution Date;
(xiii) to distributions of interest to REMIC III in respect of
REMIC II Regular Interest E, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
(xiv) to distributions of principal in respect of REMIC II
Regular Interest E, until the Uncertificated Principal Balance thereof is
reduced to zero;
(xv) to reimburse REMIC III for any Realized Losses and
Expense Losses previously deemed allocated to REMIC II Regular Interest E
(with interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such REMIC II Regular Interest for such Distribution Date;
(xvi) to distributions of interest to REMIC III in respect of
REMIC II Regular Interest F, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
(xvii) to distributions of principal in respect of REMIC II
Regular Interest F, until the Uncertificated Principal Balance thereof is
reduced to zero;
(xviii) to reimburse REMIC III for any Realized Losses and
Expense Losses previously deemed allocated to REMIC II Regular Interest F
(with interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such REMIC II Regular Interest for such Distribution Date;
(xix) to distributions of interest to REMIC III in respect of
REMIC II Regular Interest G, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
(xx) to distributions of principal in respect of REMIC II
Regular Interest G, until the Uncertificated Principal Balance thereof is
reduced to zero;
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(xxi) to reimburse REMIC III for any Realized Losses and
Expense Losses previously deemed allocated to REMIC II Regular Interest G
(with interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such REMIC II Regular Interest for such Distribution Date;
(xxii) to distributions of interest to REMIC III in respect of
REMIC II Regular Interest H, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
(xxiii) to distributions of principal in respect of REMIC II
Regular Interest H, until the Uncertificated Principal Balance thereof is
reduced to zero;
(xxiv) to reimburse REMIC III for any Realized Losses and
Expense Losses previously deemed allocated to REMIC II Regular Interest H
(with interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such REMIC II Regular Interest for such Distribution Date;
(xxv) to distributions of interest to REMIC III in respect of
REMIC II Regular Interest J, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
(xxvi) to distributions of principal in respect of REMIC II
Regular Interest J, until the Uncertificated Principal Balance thereof is
reduced to zero;
(xxvii) to reimburse REMIC III for any Realized Losses and
Expense Losses previously deemed allocated to REMIC II Regular Interest J
(with interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such REMIC II Regular Interest for such Distribution Date;
(xxviii) to distributions of interest to REMIC III in respect
of REMIC II Regular Interest K, up to an amount equal to all
Uncertificated Distributable Interest on such REMIC II Regular Interest
for such Distribution Date;
(xxix) to distributions of principal in respect of REMIC II
Regular Interest K, until the Uncertificated Principal Balance thereof is
reduced to zero;
(xxx) to reimburse REMIC III for any Realized Losses and
Expense Losses previously deemed allocated to REMIC II Regular Interest K
(with interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such REMIC II Regular Interest for such Distribution Date; and
(xxxi) to distributions of interest to REMIC III in respect of
REMIC II Regular Interest L, up to an amount equal to all Uncertificated
Distributable Interest on such REMIC II Regular Interest for such
Distribution Date;
(xxxii) to distributions of principal in respect of REMIC II
Regular Interest L, until the Uncertificated Principal Balance thereof is
reduced to zero;
(xxxiii) to reimburse REMIC III for any Realized Losses and
Expense Losses previously deemed allocated to REMIC II Regular Interest L
(with interest), up to an amount
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equal to the Loss Reimbursement Amount in respect of such REMIC II Regular
Interest for such Distribution Date;
(xxxiv) to distributions of interest to REMIC III in respect
of REMIC II Regular Interest M, up to an amount equal to all
Uncertificated Distributable Interest on such REMIC II Regular Interest
for such Distribution Date;
(xxxv) to distributions of principal in respect of REMIC II
Regular Interest M, until the Uncertificated Principal Balance thereof is
reduced to zero;
(xxxvi) to reimburse REMIC III for any Realized Losses and
Expense Losses previously deemed allocated to REMIC II Regular Interest M
(with interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such REMIC II Regular Interest for such Distribution Date;
(xxxvii) to distributions of interest to REMIC III in respect
of REMIC II Regular Interest N, up to an amount equal to all
Uncertificated Distributable Interest on such REMIC II Regular Interest
for such Distribution Date;
(xxxviii) to distributions of principal in respect of REMIC II
Regular Interest N, until the Uncertificated Principal Balance thereof is
reduced to zero;
(xxxix) to reimburse REMIC III for any Realized Losses and
Expense Losses previously deemed allocated to REMIC II Regular Interest N
(with interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such REMIC II Regular Interest for such Distribution Date;
(b) On each Distribution Date, the Trustee shall be deemed to apply
all Prepayment Premiums then on deposit in the Distribution Account and received
during or prior to the related Collection Period, to pay additional interest to
REMIC III in respect of the REMIC II Regular Interests.
(c) All amounts (other than additional interest in the form of
Prepayment Premiums) deemed paid to REMIC III in respect of the REMIC II Regular
Interests pursuant to this Section 6.3 on any Distribution Date is herein
referred to as the "REMIC III DISTRIBUTION AMOUNT" for such date.
SECTION 6.4. REMIC III.
(a) On each Distribution Date, following the deemed payments to
REMIC III in respect of the REMIC II Regular Interests on such date pursuant to
Section 6.3, the Trustee shall withdraw from the Distribution Account the REMIC
III Distribution Amount for such Distribution Date and shall apply such amount
for the following purposes and in the following order of priority:
(i) to pay interest to the Holders of the respective Classes
of Senior Certificates, in an amount equal to, and pro rata in
accordance with, all Distributable Certificate Interest in respect
of each such Class of Certificates for such Distribution Date,
(ii) to pay principal from the Principal Distribution Amount
for such Distribution Date, first to the Holders of the Class A-1
Certificates and, second to the Holders of the Class A-2
Certificates in each case, up to an amount equal to the lesser of
(1) the
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then-outstanding Class Principal Balance of such Class and (2) the
remaining portion, if any, of such Principal Distribution Amount;
(iii) to reimburse the Holders of the respective Classes of
Class A Certificates for any Realized Losses and Expense Losses previously
deemed allocated to such Classes of Certificates (with interest), up to an
amount equal to, and pro rata as among such Classes in accordance with,
the respective Loss Reimbursement Amounts in respect of such Classes of
Certificates for such Distribution Date; and
(iv) to make payments on the Subordinate and Residual
Certificates as provided below;
provided that, on each Distribution Date after the aggregate of the Class
Principal Balances of the Subordinate Certificates has been reduced to zero, and
in any event on the final Distribution Date in connection with a termination of
the Trust described in Article X hereof, the payments of principal to be made
pursuant to clause (ii) above, will be so made to the Holders of the respective
Classes of Class A Certificates, up to an amount equal to, and pro rata as among
such Classes in accordance with, the respective then outstanding Class Principal
Balance of such Certificates for such Distribution Date and without regard to
the Principal Distribution Amounts for such date;
(b) On each Distribution Date, following the foregoing series of
payments on the Senior Certificates, the Trustee shall apply the remaining
portion, if any, of the REMIC III Distribution Amount for such date for the
following purposes and in the following order of priority:
(i) to pay interest to the Holders of the Class B
Certificates, up to an amount equal to all Distributable Certificate
Interest in respect of such Class of Certificates for such Distribution
Date;
(ii) if the Class Principal Balances of the Class A
Certificates have been reduced to zero, to pay principal to the Holders of
the Class B Certificates, up to an amount equal to the lesser of (A) the
then-outstanding Class Principal Balance of such Class of Certificates and
(B) the remaining Principal Distribution Amount for such Distribution
Date;
(iii) to reimburse the Holders of the Class B Certificates for
Realized Losses and Expense Losses, if any, previously deemed allocated to
such Class of Certificates (with interest), up to an amount equal to the
Loss Reimbursement Amount in respect of such Class of Certificates for
such Distribution Date;
(iv) to pay interest to the Holders of the Class C
Certificates, up to an amount equal to all Distributable Certificate
Interest in respect of such Class of Certificates for such Distribution
Date;
(v) if the Class Principal Balances of the Class A and Class B
Certificates have been reduced to zero, to pay principal to the Holders of
the Class C Certificates, up to an amount equal to the lesser of (A) the
then-outstanding Class Principal Balance of such Class of Certificates and
(B) the remaining Principal Distribution Amount for such Distribution
Date;
(vi) to reimburse the Holders of the Class C Certificates for
any Realized Losses and Expenses Losses previously deemed allocated to
such Class of Certificates (with
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interest), up to an amount equal to the Loss Reimbursement Amount in
respect of such Class of Certificates for such Distribution Date;
(vii) to pay interest to the Holders of the Class D
Certificates, up to an amount equal to all Distributable Certificate
Interest in respect of such Class of Certificates for such Distribution
Date;
(viii) if the Class Principal Balances of the Class A, Class B
and Class C Certificates have been reduced to zero, to pay principal to
the Holders of the Class D Certificates, up to an amount equal to the
lesser of (A) the then-outstanding Class Principal Balance of such Class
of Certificates and (B) the remaining Principal Distribution Amount for
such Distribution Date;
(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;
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(xvi) to pay interest to the Holders of the Class G
Certificates, up to an amount equal to all Distributable Certificate
Interest in respect of such Class of Certificates for such Distribution
Date;
(xvii) if the Class Principal Balances of the Class A, Class
B, Class C, Class D, Class E and Class F Certificates have been reduced to
zero, to pay principal to the Holders of the Class G Certificates, up to
an amount equal to the lesser of (A) the then-outstanding Class Principal
Balance of such Class of Certificates and (B) the remaining Principal
Distribution Amount for such Distribution Date;
(xviii) to reimburse the Holders of the Class G Certificates
for any Realized Losses and Expense Losses previously deemed allocated to
such Class of Certificates (with interest), up to an amount equal to the
Loss Reimbursement Amount in respect of such Class of Certificates for
such Distribution Date;
(xix) to pay interest to the Holders of the Class H
Certificates, up to an amount equal to all Distributable Certificate
Interest in respect of such Class of Certificates for such Distribution
Date;
(xx) if the Class Principal Balances of the Class A, Class B,
Class C, Class D, Class E, Class F and Class G Certificates have been
reduced to zero, to pay principal to the Holders of the Class H
Certificates, up to an amount equal to the lesser of (A) the
then-outstanding Class Principal Balance of such Class of Certificates and
(B) the remaining Principal Distribution Amount for such Distribution
Date;
(xxi) to reimburse the Holders of the Class H Certificates for
any Realized Losses and Expense Losses previously deemed allocated to such
Class of Certificates (with interest), up to an amount equal to the Loss
Reimbursement Amount in respect of such Class of Certificates for such
Distribution Date;
(xxii) to pay interest to the Holders of the Class J
Certificates, up to an amount equal to all Distributable Certificate
Interest in respect of such Class of Certificates for such Distribution
Date;
(xxiii) if the Class Principal Balances of the Class A, Class
B, Class C, Class D, Class E, Class F, Class G and Class H Certificates
have been reduced to zero, to pay principal to the Holders of the Class J
Certificates, up to an amount equal to the lesser of (A) the
then-outstanding Class Principal Balance of such Class of Certificates and
(B) the remaining Principal Distribution Amount for such Distribution
Date;
(xxiv) to reimburse the Holders of the Class J Certificates
for any Realized Losses and Expense Losses previously deemed allocated to
such Class of Certificates (with interest), up to an amount equal to the
Loss Reimbursement Amount in respect of such Class of Certificates for
such Distribution Date;
(xxv) to pay interest to the Holders of the Class K
Certificates, up to an amount equal to all Distributable Certificate
Interest in respect of such Class of Certificate for such Distribution
Date;
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(xxvi) if the Class Principal Balances of the Class A, Class
B, Class C, Class D, Class E, Class F, Class G, Class H and Class J
Certificates have been reduced to zero, to pay principal to the Holders of
the Class K Certificates, up to an amount equal to the lesser of (A) the
then-outstanding Class Principal Balance of such Class of Certificates and
(B) the remaining Principal Distribution Amount for such Distribution
Date;
(xxvii) to reimburse the Holders of the Class K Certificates
for any Realized Losses and Expense Losses previously deemed allocated to
such Class of Certificates (with interest), up to an amount equal to the
Loss Reimbursement Amount in respect of such Class of Certificates for
such Distribution Date;
(xxviii) to pay interest to the Holders of the Class L
Certificates, up to an amount equal to all Distributable Certificate
Interest in respect of such Class of Certificate for such Distribution
Date;
(xxix) if the Class Principal Balances of the Class A, Class
B, Class C, Class D, Class E, Class F, Class G, Class H, Class J and Class
K Certificates have been reduced to zero, to pay principal to the Holders
of the Class L Certificates, up to an amount equal to the lesser of (A)
the then outstanding Class Principal Balance of such Class of Certificates
and (B) the remaining Principal Distribution Amount for such Distribution
Date;
(xxx) to reimburse the Holders of the Class L Certificates for
any Realized Losses and Expense Losses previously deemed allocated to such
Class of Certificates (with interest), up to an amount equal to the Loss
Reimbursement Amount in respect of such Class of Certificates for such
Distribution Date; and
(xxxi) to pay interest to the Holders of the class M
Certificates up to an amount equal to all Distributable Certificate
Interest in respect of such Class of Certificate for such Distribution
Date;
(xxxii) if the Class Principal Balances of the Class A, Class
B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K
and Class L Certificates have been reduced to zero, to pay principal to
the Holders to the Class M Certificates, up to an amount equal to the
lesser of (A) the then outstanding Class Principal Balance of such class
of Certificates and (B) the remaining Principal Distribution Amount for
such Distribution Date;
(xxxiii) to reimburse the holders of the Class M Certificates
for any Realized Losses previously deemed allocated to such Class of
Certificates (with interest), up to an amount equal to the Loss
Reimbursement Amount in respect of such Class of Certificates for such
Distribution Date;
(xxxiv) to pay interest to the Holders of the Class N
Certificates up to an amount equal to all Distributable Certificate
Interest in respect of such Class of Certificate for such Distribution
Date;
(xxxv) if the Class Principal Balances of the Class A, Class
B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K,
Class L and Class M Certificates have been reduced to zero, to pay
principal to the Holders to the Class N Certificates, up to an amount
equal to the lesser of (A) the then outstanding Class Principal Balance of
such class of Certificates and (B) the remaining Principal Distribution
Amount for such Distribution Date;
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(xxxvi) to reimburse the holders of the Class N Certificates
for any Realized Losses previously deemed allocated to such Class of
Certificates (with interest), up to an amount equal to the Loss
Reimbursement Amount in respect of such Class of Certificates for such
Distribution Date;
(xxxvii) to pay to the Holders of the Class R-III Certificates
the balance, if any, of the REMIC III Distribution Amount for such
Distribution Date.
(c) On each Distribution Date, the Trustee shall withdraw any
amounts then on deposit in the Distribution Account that represent Prepayment
Premiums collected in respect of Mortgage Loans during or prior to the related
Collection Period and shall distribute such amounts, in each case, subject to
available funds, as additional interest, to the Holders of the respective
Classes of Principal Balance Certificates (other than the Class F, G, H, J, K,
L, M, and N Certificates) then entitled to distributions of principal from the
Principal Distribution Amount for such Distribution Date an aggregate amount
(allocable among such Classes, if more than one, as described below) equal to
the lesser of (i) such Prepayment Premium and (ii) such Prepayment Premium
multiplied by a fraction, the numerator of which is equal to the excess, if any,
of the Pass-Through Rate applicable to the most senior of such Classes of
Certificates then outstanding (or, in the case of the Class A Certificates, the
one with the earlier payment priority), over the relevant Discount Rate (as
defined below), and the denominator of which is equal to the excess, if any, of
the Mortgage Rate for the prepaid Mortgage Loan, over the relevant Discount
Rate. If there is more than one Class of Principal Balance Certificates entitled
to distributions of principal from the Principal Distribution Amount for such
Distribution Date, the aggregate amount described in the preceding sentence
shall be allocated among such Classes on a pro rata basis in accordance with the
relative amounts of such distributions of principal. Any portion of such
Prepayment Premium that is not so distributed to the Holders of such Principal
Balance Certificates will be distributed to the Holders of the Class X
Certificates.
For purposes of the foregoing, the "DISCOUNT RATE" is the rate
which, when compounded monthly, is equivalent to the Treasury Rate when
compounded semi-annually. The "TREASURY RATE" is the yield calculated by the
linear interpolation of the yields, as reported in Federal Reserve Statistical
Release H.15--Selected Interest Rates under the heading "U.S. government
securities/Treasury constant maturities" for the week ending prior to the date
of the relevant principal prepayment, of U.S. Treasury constant maturities with
a maturity date (one longer and one shorter) most nearly approximating the
maturity date (or the Hyper-Amortization Date, if applicable) of the Mortgage
Loan prepaid. If Release H.15 is no longer published, the Trustee shall select a
comparable publication to determine the Treasury Rate.
(d) All of the foregoing distributions to be made from the
Distribution Account on any Distribution Date with respect to the REMIC III
Certificates shall be deemed made from the payments deemed made to REMIC III in
respect of the REMIC II Regular Interests on such Distribution Date pursuant to
Section 6.3.
SECTION 6.4.1. GRANTOR TRUST.
(a) On each Distribution Date, the Trustee shall withdraw from the
Excess Interest Distribution Account the amount on deposit therein, and shall
pay such amount to the Holders of the Class N Certificates in respect of their
beneficial ownership interest in the assets of the grantor trust, pro rata in
accordance with their respective Percentage Interests. Such distributions shall
be made in addition to any amounts distributable to such Holders pursuant to
Section 6.4 hereof in respect of their
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interests in the REMIC regular interest evidenced by such Class N Certificates,
and without regard to whether the REMIC regular interest component of the Class
N Certificates is then outstanding.
SECTION 6.5. ALLOCATION OF REALIZED LOSSES AND EXPENSE LOSSES.
(a) On each Distribution Date, following the deemed distributions to
be made in respect of the REMIC I Regular Interests pursuant to Section 6.2, the
Uncertificated Principal Balance of each REMIC I Regular Interest (after taking
account of such deemed distributions) shall be reduced to equal the Stated
Principal Balance of the related Mortgage Loan (including without limitation an
REO Mortgage Loan or, if applicable, a Replacement Mortgage Loan) that will be
outstanding immediately following such Distribution Date. Such reductions shall
be deemed to be an allocation of Realized Losses and Expense Losses.
(b) On each Distribution Date, following the payments deemed to be
made to REMIC III in respect of the REMIC II Regular Interests on such date
pursuant to Section 6.3, the Trustee shall also determine the amount, if any, by
which (i) the then-aggregate Uncertificated Principal Balance of REMIC II
Regular Interests A, B, C, D, E, F, G, H, J, L, M and N exceeds (ii) the
aggregate Stated Principal Balance of the Mortgage Pool that will be outstanding
immediately following such Distribution Date. If such excess does exist, then
the respective Uncertificated Principal Balances of such REMIC II Regular
Interests shall be reduced sequentially, in reverse alphabetical order of letter
designation, in each case, until the first to occur of such excess being reduced
to zero or the Uncertificated Principal Balance of the particular REMIC II
Regular Interest being reduced to zero. Such reductions in the Uncertificated
Principal Balances of such REMIC II Regular Interests shall be deemed to be
allocations of Realized Losses and Expense Losses.
(c) On each Distribution Date, following the distributions to be
made to the Certificateholders on such date pursuant to Section 6.4, the Trustee
shall determine the amount, if any, by which (i) the then-aggregate Certificate
Principal Balance of the Principal Balance Certificates, exceeds (ii) the
aggregate Stated Principal Balance of the Mortgage Pool that will be outstanding
immediately following such Distribution Date. If such excess does exist, then
the Class Principal Balances of the Class N, Class M, Class L, Class K, Class J,
Class H, Class G, Class F, Class E, Class D, Class C and Class B Certificates
shall be reduced sequentially, in that order, in each case, until the first to
occur of such excess being reduced to zero or the related Class Principal
Balance being reduced to zero. If, after the foregoing reductions, the amount
described in clause (i) of the second preceding sentence still exceeds the
amount described in clause (ii) of the second preceding sentence, then the
respective Class Principal Balances of the Class A-1 and Class A-2 Certificates
shall be reduced, pro rata in accordance with the relative sizes of the
then-outstanding Class Principal Balances of such Classes of Certificates, until
the first to occur of such excess being reduced to zero or each such Class
Principal Balance being reduced to zero. Such reductions in the Class Principal
Balances of the respective Classes of Principal Certificates shall be deemed to
be allocations of Realized Losses and Expense Losses.
SECTION 6.6. APPRAISAL REDUCTIONS. Not later than the earliest of
the dates set forth in the definition of "Appraisal Event" in respect of any
Mortgage Loan, or within such longer period as the Special Servicer is
diligently and in good faith proceeding to obtain an appraisal, the Special
Servicer shall obtain (A) an Appraisal of the related Mortgaged Property or REO
Property, as applicable, if the Stated Principal Balance of such Required
Appraisal Loan exceeds $1,000,000 or (B) at the option of the Special Servicer,
if the Stated Principal Balance of such Required Appraisal Loan is less than or
equal to $1,000,000, either an internal valuation prepared by the Special
Servicer or an Appraisal; provided that if the Special Servicer had completed or
obtained an Appraisal or internal valuation within the immediately preceding 12
months, the Special Servicer may rely on such Appraisal or internal valuation
and shall
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have no duty to prepare a new Appraisal or internal valuation, unless such
reliance would not be in accordance with the Servicing Standard. Such Appraisal
or internal valuation shall be updated at least annually to the extent such
Mortgage Loan remains a Required Appraisal Loan. The cost of any such Appraisal
if not an internal valuation performed by the Special Servicer shall be an
expense of the Trust and may be paid from REO Income, treated as an Additional
Trust Expense or advanced by the Special Servicer (or, at the direction of the
Special Servicer, by the Master Servicer) in which event it shall be treated as
a Servicing Advance, subject to Section 4.4 hereof. The Special Servicer, based
on the Appraisal or internal valuation, shall calculate any Appraisal Reduction.
The Special Servicer shall calculate or recalculate the Appraisal Reduction for
any Mortgage Loan based on updated Appraisals or internal valuations. Any
Appraisal or internal valuation obtained by the Special Servicer pursuant to
this Section 6.6 shall be delivered by the Special Servicer to the Master
Servicer, and the Master Servicer shall deliver such Appraisal or internal
valuation to the Trustee, and the Trustee shall deliver such Appraisal or
internal valuation to the Holders of the Privately Offered Certificates within
15 days of receipt by the Trustee of such Appraisal or internal valuation from
the Master Servicer.
SECTION 6.7. COMPLIANCE WITH WITHHOLDING REQUIREMENTS.
Notwithstanding any other provision of this Agreement to the contrary, the
Trustee shall comply with all federal withholding requirements with respect to
payments to Certificateholders of interest, original issue discount, or other
amounts that the Trustee reasonably believes are subject to such requirements
under the Code. The consent of Certificateholders shall not be required for any
such withholding. In the event the Trustee withholds any amount from payments
made to any Certificateholder pursuant to federal withholding requirements, the
Trustee shall indicate to such Certificateholder the amount withheld.
ARTICLE VII.
CONCERNING THE TRUSTEE AND THE FISCAL AGENT
SECTION 7.1. DUTIES OF TRUSTEE AND THE FISCAL AGENT.
(a) The Fiscal Agent and, prior to the occurrence of an Event of
Default and after the curing or waiver of all Events of Default that may have
occurred, the Trustee undertake to perform only those duties as are specifically
set forth in this Agreement and no implied covenants or obligations shall be
read into this Agreement against the Trustee or the Fiscal Agent. Any permissive
right of the Trustee or Fiscal Agent, as applicable, provided for in this
Agreement shall not be construed as a duty of the Trustee or the Fiscal Agent.
Subject to Section 7.1(c)(vi), if an Event of Default occurs and is continuing,
then, the Trustee shall exercise such of the rights and powers vested in it by
this Agreement and use the same degree of care and skill in their exercise as a
prudent Person would exercise or use under the circumstances in the conduct of
such Person's own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they on
their face conform to the requirements of this Agreement (to the extent such
requirements are set forth herein); provided that the Trustee shall not be
responsible for the accuracy or content of any such resolution, certificate,
statement, opinion, report, document, order or other instrument furnished by the
Master Servicer or any other Person to the Trustee pursuant to this Agreement.
If any such instrument is found on its face not to conform to the requirements
of this Agreement, the Trustee shall take such action as it deems appropriate to
have the instrument corrected, and if the instrument is not corrected to the
Trustee's reasonable satisfaction, the Trustee will provide notice thereof to
the Certificateholders.
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(c) No provision of this Agreement shall be construed to relieve the
Trustee or the Fiscal Agent or any of their respective directors, officers,
employees, agents or Controlling Persons from liability for their own negligent
action, their own negligent failure to act or their own willful misconduct;
provided that:
(i) Neither the Trustee nor the Fiscal Agent nor any of their
respective directors, officers, employees, agents or Controlling Persons
shall be personally liable with respect to any action taken, suffered or
omitted to be taken by it (A) in its reasonable business judgment in
accordance with this Agreement or (B) at the direction of Holders of
Certificates entitled to not less than a majority of the Voting Rights;
(ii) No provision of this Agreement shall require either the
Trustee or the Fiscal Agent to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall
have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured to it;
(iii) None of the Trustee, the Fiscal Agent or any of their
respective directors, officers, employees, agents or Controlling Persons
shall be responsible for any act or omission of the Master Servicer, the
Special Servicer, the Depositor or any Seller, including, without
limitation, actions taken pursuant to this Agreement, except to the extent
the Trustee or Fiscal Agent is acting as Master Servicer or Special
Servicer;
(iv) The execution by the Trustee of any forms or plans of
liquidation in connection with the REMIC Pools shall not constitute a
representation by the Trustee or the Fiscal Agent as to the adequacy of
such form or plan of liquidation;
(v) The Trustee and the Fiscal Agent shall not be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties as Trustee or Fiscal Agent, as applicable, in
accordance with this Agreement. In such event, all legal expense and costs
of such action shall be expenses and costs of the Trust and the Trustee
and the Fiscal Agent shall be entitled to be reimbursed therefor from the
Collection Account pursuant to Section 5.2(b); and
(vi) Neither the Trustee nor the Fiscal Agent shall be charged
with knowledge of any failure by the Master Servicer or the Special
Servicer to comply with their respective obligations under this Agreement
or any act, failure, or breach of any Person upon the occurrence of which
the Trustee may be required to act, except to the extent the Trustee or
Fiscal Agent is acting as Master Servicer or Special Servicer, or unless a
Responsible Officer of the Trustee obtains actual knowledge of such
failure. The Trustee shall be deemed to have actual knowledge of the
failure of the Master Servicer or Special Servicer to deliver to the
Trustee any report, certificate or other document required to be delivered
to the Trustee but not so delivered when required pursuant to this
Agreement.
SECTION 7.2. CERTAIN MATTERS AFFECTING THE TRUSTEE AND THE FISCAL
AGENT.
(a) Except as otherwise provided in Section 7.1:
(i) The Trustee or the Fiscal Agent may request, and may rely
and shall be protected in acting or refraining from acting upon any
resolution, Officer's Certificate, certificate
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of auditors or any other certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(ii) The Trustee or the Fiscal Agent may consult with counsel
and the advice of such counsel and any Opinion of Counsel shall be full
and complete authorization and protection in respect of any action taken
or suffered or omitted by it hereunder in good faith and in accordance
with such advice or Opinion of Counsel;
(iii) Neither the Trustee nor the Fiscal Agent nor any of
their respective directors, officers, employees, agents or Controlling
Persons shall be personally liable for any action taken, suffered or
omitted by the Trustee or the Fiscal Agent in its reasonable business
judgment and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(iv) The Trustee and the Fiscal Agent (in their respective
capacities as such) shall be under no obligation to exercise any of the
powers vested in it by this Agreement or to institute, conduct or defend
any litigation hereunder or relating hereto or make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document (provided the same appears regular on its
face), unless requested in writing to do so by Holders of Certificates
entitled to at least 25% of the Voting Rights; provided that, if the
payment within a reasonable time to the Trustee or the Fiscal Agent of the
costs, expenses or liabilities likely to be incurred by it in connection
with the foregoing is, in the opinion of the Trustee or the Fiscal Agent
not reasonably assured to the Trustee or the Fiscal Agent by the security
afforded to it by the terms of this Agreement, the Trustee or the Fiscal
Agent may require reasonable indemnity against such expense or liability
or payment of such estimated expenses as a condition to proceeding. The
Trustee's and the Fiscal Agent's reasonable expenses shall be paid by the
Certificateholders making such request;
(v) The Trustee and the Fiscal Agent may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents or attorneys, which agents or attorneys shall have
any or all of the rights, powers, duties and obligations of the Trustee or
the Fiscal Agent conferred on them by such appointment; provided that the
Trustee shall continue to be responsible for its duties and obligations
hereunder and shall not be liable for the actions or omissions of the
Master Servicer, the Special Servicer or the Depositor;
(vi) The Trustee and the Fiscal Agent shall in no event be
required to obtain a deficiency judgment against a Mortgagor;
(vii) Neither the Trustee nor the Fiscal Agent shall be
required to expend its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder (unless
otherwise expressly required herein to do so) if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such liability is not assured to it;
(viii) Neither the Trustee nor the Fiscal Agent shall be
liable for any loss on any investment of funds pursuant to this Agreement;
provided, however, that this provision shall not operate to forgive the
Trustee or Fiscal Agent, in their respective individual capacities, for a
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liability that either of them may have for any investment loss and
incurred on such investment; and
(ix) unless otherwise specifically required by law, the
Trustee and the Fiscal Agent shall not be required to post any surety or
bond of any kind in connection with the execution or performance of its
duties hereunder.
(b) Following the Closing Date, the Trustee shall not accept any
contribution of assets to the Trust not specifically contemplated by this
Agreement unless the Trustee shall have received a Nondisqualification Opinion
at the expense of the Person desiring to contribute such assets with respect to
such contribution.
(c) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
the proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of this Agreement.
(d) The Trustee shall timely pay, from its own funds, the amount of
any and all federal, state and local taxes imposed on the Trust, its assets, any
REMIC Pool or transactions including, without limitation, (A) "prohibited
transaction" taxes as defined in Section 860F of the Code, if, when and as the
same shall be due and payable, (B) any tax on contributions to a REMIC after the
Closing Date imposed by Section 860G(d) of the Code and (C) any tax on "net
income from foreclosure property" as defined in Section 860G(c) of the Code, but
only if such taxes arise out of a breach by the Trustee of its obligations
hereunder, which breach constitutes negligence or willful misconduct of the
Trustee.
SECTION 7.3. TRUSTEE AND FISCAL AGENT NOT LIABLE FOR CERTIFICATES OR
INTERESTS OR MORTGAGE LOANS. The Trustee and the Fiscal Agent make no
representations as to the validity or sufficiency of this Agreement (other than
the certificate of authentication on the Certificates) or of any Mortgage Loan,
Assignment of Mortgage or related document. The Trustee and the Fiscal Agent
shall not be accountable for the use or application by the Depositor or the
Master Servicer or the Special Servicer of any of the Certificates or any of the
proceeds of such Certificates, or for the use or application by the Depositor or
the Master Servicer or the Special Servicer of funds paid in consideration of
the assignment of the Mortgage Loans to the Trust or deposited into the
Distribution Account or any other fund or account maintained with respect to the
Certificates or any account maintained pursuant to this Agreement or for
investment of any such amounts. Neither the Trustee nor the Fiscal Agent shall
at any time have any responsibility or liability for or with respect to the
legality, validity or enforceability of the Mortgages or the Mortgage Loans, or
the perfection and priority of the Mortgages or, except as provided in Section
2.1(c), the maintenance of any such perfection and priority, or for or with
respect to the efficacy of the Trust or its ability to generate the payments to
be distributed to Certificateholders under this Agreement, including, without
limitation, the existence, condition and ownership of any Mortgaged Property;
the existence and enforceability of any hazard insurance thereon; the validity
of the assignment of the Mortgage Loans to the Trust or of any intervening
assignment; the completeness of the Mortgage Loans; the performance or
enforcement of the Mortgage Loans (other than if the Trustee shall assume the
duties of the Master Servicer or the Special Servicer); any investment of monies
by the Master Servicer or the Special Servicer or any loss resulting therefrom;
the failure of the Master Servicer or any Sub-Servicer or the Special Servicer
to act or perform any duties required of it on behalf of the Trustee hereunder;
or any action by the Trustee taken at the instruction of the Master Servicer or
the Special Servicer.
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SECTION 7.4. TRUSTEE AND THE FISCAL AGENT MAY OWN CERTIFICATES. The
Trustee and the Fiscal Agent and any agent of the Trustee and the Fiscal Agent
in its individual or any other capacity may become the owner or pledgee of
Certificates with the same rights it would have if it were not the Trustee and
the Fiscal Agent or such agent.
SECTION 7.5. ELIGIBILITY REQUIREMENTS FOR TRUSTEE AND FISCAL AGENT.
The Trustee hereunder shall at all times be (i) an institution insured by the
FDIC, (ii) a corporation, authorized to exercise corporate trust powers, having
a combined capital and surplus of not less than $100,000,000 and subject to
supervision or examination by federal or state authority, and (iii) an
institution whose long-term senior unsecured debt is, for so long as a Fiscal
Agent is acting hereunder, rated not less than "BBB" by DCR and "BBB" by Fitch;
provided that either the Trustee or the Fiscal Agent shall at all times be an
institution whose long-term senior unsecured debt is rated not less than "AA" by
DCR and "AA" by Fitch or otherwise acceptable to the Rating Agencies. If such
corporation, national bank or national banking association publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then, for the purposes of this
Section, the combined capital and surplus of such corporation, national bank or
national banking association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee or Fiscal Agent shall cease to be eligible in
accordance with provisions of this Section, the Trustee or Fiscal Agent shall
resign immediately in the manner and with the effect specified in Section 7.6.
SECTION 7.6. RESIGNATION AND REMOVAL OF TRUSTEE OR FISCAL AGENT.
(a) The Trustee or the Fiscal Agent may at any time resign and be
discharged from the trusts hereby created by giving written notice thereof to
the Depositor, the Master Servicer and the Rating Agencies; provided that such
resignation shall not be effective until its successor shall have accepted the
appointment and Rating Agency Confirmation shall have been obtained with respect
to such appointment. Upon receiving such notice of resignation, the Depositor
will promptly appoint a successor trustee or fiscal agent, as the case may be,
except in the case of the initial Trustee or Fiscal Agent, in which case both
shall be so replaced concurrently, by written instrument, one copy of which
instrument shall be delivered to the resigning Trustee or the Fiscal Agent, one
copy to the successor trustee and one copy to each of the Master Servicer and
the Rating Agencies. If no successor trustee or fiscal agent shall have been so
appointed and shall have accepted appointment within 30 days after the giving of
such notice of resignation, the resigning Trustee or the Fiscal Agent may
petition any court of competent jurisdiction for the appointment of a successor
trustee or fiscal agent.
(b) If at any time (i) the Trustee shall cease to be eligible in
accordance with the provisions of Section 7.5 and shall fail to resign after
written request therefor by the Depositor, (ii) the Trustee shall become
incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver
of the Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, (iii) a tax is
imposed or threatened with respect to the Trust or any REMIC Pool by any state
in which the Trustee or the Trust held by the Trustee is located; provided,
however, that, if the Trustee agrees to indemnify the Trust for such taxes, it
shall not be removed pursuant to this clause (iii), or (iv) the continuation of
the Trustee as such would result in a downgrade, qualification or withdrawal of
the rating by the Rating Agencies of any Class of Certificates with a rating as
evidenced in writing by the Rating Agencies, then the Depositor may remove such
Trustee and appoint a successor trustee by written instrument, one copy of which
instrument shall be delivered to the Trustee so removed, one copy to the
successor trustee and one copy to each of the Master Servicer and the Rating
Agencies. In the case of removal under clauses (i), (ii), (iii) and (iv) above,
the Trustee shall bear all such costs of transfer. Such
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succession shall take effect after a successor trustee has been appointed. In
the case of the removal of the initial Trustee, the Depositor shall also remove
the Fiscal Agent. In this case, the procedures and liability for costs of such
removal shall be the same as they are stated in subsection (c) with respect to
the Fiscal Agent.
(c) If at any time (i) the Fiscal Agent shall cease to be eligible
in accordance with the provisions of Section 7.5 and shall fail to resign after
written request therefor by the Depositor, or (ii) a Fiscal Agent Termination
Event has occurred, then the Depositor shall send a written notice of
termination to the Fiscal Agent (which notice shall specify the reason for such
termination) and remove such Fiscal Agent and appoint a successor Fiscal Agent
by written instrument, one copy of which instrument shall be delivered to the
Fiscal Agent so removed, one copy to the successor Fiscal Agent, and one copy to
each of the Trustee, the Master Servicer and the Rating Agencies. In all such
cases, the Fiscal Agent shall bear all costs of transfer to a successor Fiscal
Agent, such succession only to take effect after a successor Fiscal Agent has
been appointed. In the case of the initial Fiscal Agent, the Depositor may, but
is not required to, also remove the Trustee. In this case, the procedures and
liability for costs of such removal shall be the same as they are stated in
subsection (b) with respect to the Trustee.
(d) The Holders of Certificates entitled to at least 51% of the
Voting Rights may without cause upon 30 days' written notice to the Trustee or
the Fiscal Agent and to the Depositor remove the Trustee or the Fiscal Agent by
such written instrument, signed by such Holders or their attorney-in-fact duly
authorized, one copy of which instrument shall be delivered to the Depositor and
one copy to the Trustee or the Fiscal Agent so removed; the Depositor shall
thereupon use its best efforts to appoint a successor Trustee or Fiscal Agent in
accordance with this Section. The Certificateholders effecting such transfer
shall be responsible for the reasonable out-of-pocket costs of such removal,
including fees and any related expenses, such as those incurred in transferring
the Mortgage Files to the successor Trustee.
(e) Any resignation or removal of the Trustee or the Fiscal Agent
and appointment of a successor trustee or fiscal agent pursuant to any of the
provisions of this Section shall become effective upon acceptance of appointment
by the successor trustee and fiscal agent as provided in Section 7.7. Upon any
succession of the Trustee or the Fiscal Agent under this Agreement, the
predecessor Trustee or Fiscal Agent shall be entitled to the payment of
compensation and reimbursement agreed to under this Agreement for services
rendered and expenses incurred (including without limitation unreimbursed
Advances made thereby, with any related unpaid Advance Interest accrued on such
Advances) at such times and from such sources as if the predecessor Trustee or
Fiscal Agent had not resigned or been removed. The Trustee and the Fiscal Agent
shall not be liable for any action or omission of any successor Trustee or
Fiscal Agent.
SECTION 7.7. SUCCESSOR TRUSTEE OR FISCAL AGENT.
(a) Any successor Trustee or Fiscal Agent appointed as provided in
Section 7.6 shall execute, acknowledge and deliver to the Depositor and to its
predecessor Trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor Trustee or Fiscal Agent
shall become effective and such successor Trustee or Fiscal Agent, without any
further act, deed or conveyance, shall become fully vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as Trustee or Fiscal Agent herein. The predecessor Trustee
shall deliver to the successor Trustee all Mortgage Files and documents and
statements related to the Mortgage Files held by it hereunder, and shall duly
assign, transfer, deliver and pay over to the successor Trustee the entire
Trust, together with all instruments of transfer and
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assignment or other documents properly executed necessary to effect such
transfer and such records or copies thereof maintained by the predecessor
Trustee or Fiscal Agent in the administration hereof as may be reasonably
requested by the successor Trustee or Fiscal Agent and shall thereupon be
discharged from all duties and responsibilities under this Agreement. In
addition, the Depositor and the predecessor Trustee or the Fiscal Agent shall
execute and deliver such other instruments and do such other things as may
reasonably be required to more fully and certainly vest and confirm in the
successor Trustee or the successor Fiscal Agent all such rights, powers, duties
and obligations. Anything herein to the contrary notwithstanding, in no event
shall the combined fees payable to a successor Trustee and successor Fiscal
Agent exceed the Trustee Fee.
(b) No successor Trustee shall accept appointment as provided in
this Section unless at the time of such appointment such successor Trustee shall
be eligible under the provisions of Section 7.5.
(c) Upon acceptance of appointment by a successor Trustee or Fiscal
Agent as provided in this Section, the successor Trustee or Fiscal Agent shall
mail notice of the succession of such Trustee or Fiscal Agent hereunder to all
Holders of Certificates at their addresses as shown in the Certificate Register
and to the Rating Agencies (evidence of such mailing to be provided to the
Depositor and the Master Servicer). The expenses of such mailing shall be borne
by the successor Trustee or Fiscal Agent.
SECTION 7.8. MERGER OR CONSOLIDATION OF TRUSTEE. Any Person into
which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which such Trustee shall be a party, or any Persons succeeding
to the business of such Trustee or Fiscal Agent, shall be the successor of such
Trustee or Fiscal Agent hereunder, provided that such Person shall be eligible
under the provisions of Section 7.5, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
SECTION 7.9. APPOINTMENT OF CO-TRUSTEE, SEPARATE TRUSTEE OR
CUSTODIAN.
(a) Notwithstanding any other provisions hereof, at any time, the
Trustee, the Depositor or, in the case of the Trust, the Certificateholders
entitled to more than 50% of the Voting Rights shall each have the power from
time to time to appoint one or more Persons to act either as co-trustees jointly
with the Trustee or as separate trustees, or as custodians, for the purpose of
holding title to, foreclosing or otherwise taking action with respect to any
Mortgage Loan outside the state where the Trustee has its principal place of
business where such separate trustee or co-trustee is necessary or advisable (or
the Trustee is advised by the Master Servicer or Special Servicer that such
separate trustee or co-trustee is necessary or advisable) under the laws of any
state in which a property securing a Mortgage Loan is located or for the purpose
of otherwise conforming to any legal requirement, restriction or condition in
any state in which a property securing a Mortgage Loan is located or in any
state in which any portion of the Trust is located. The separate trustees,
co-trustees, or custodians so appointed shall be trustees or custodians for the
benefit of all the Certificateholders, shall have such powers, rights and
remedies as shall be specified in the instrument of appointment and shall be
deemed to have accepted the provisions of this Agreement; provided that no such
appointment shall, or shall be deemed to, constitute the appointee an agent of
the Trustee; provided, further that the Trustee shall not be relieved of
liability for the actions or omissions of any co-trustee or separate trustee
appointed by it and shall not be liable for the actions of any co-trustee or
separate trustee not appointed by it.
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(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 law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate
trustee, co-trustee or custodian shall die, become incapable of acting, resign
or be removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Trustee, to the extent permitted by law, without
the appointment of a new or successor trustee.
(e) No separate trustee, co-trustee or custodian hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
7.5 hereof and no notice to Certificateholders of the appointment of any
separate trustee, co-trustee or custodian hereunder shall be required.
(f) The Trustee agrees to instruct the co-trustees, if any, to the
extent necessary to fulfill the Trustee's obligations hereunder.
(g) The Trustee shall pay the reasonable compensation of the
co-trustees, separate trustees or custodians appointed pursuant to this Section
7.9 and shall be reimbursed in accordance with the standards, specified in
Section 7.12 hereof.
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(h) Subject to the consent of the Depositor, which consent shall not
be unreasonably withheld, the Trustee may appoint at any time a custodian to
hold some or all of the Mortgage Files; provided that Rating Agency Confirmation
from Fitch is obtained with respect to such appointee. Upon the appointment of a
Custodian, the Trustee and the Custodian shall enter into a custodial agreement.
SECTION 7.10. AUTHENTICATING AGENTS.
(a) The Trustee may appoint one or more Authenticating Agents which
shall be authorized to act on behalf of the Trustee in executing and
authenticating Certificates. Wherever reference is made in this Agreement to the
execution and authentication of Certificates by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
execution and authentication on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent must be acceptable to the
Depositor and must be a corporation organized and doing business under the laws
of the United States of America or of any state and having a principal office
and place of business in the Borough of Manhattan, the City and State of New
York or in the State of Illinois, having a combined capital and surplus of at
least $50,000,000, authorized under such laws to do a trust business and subject
to supervision or examination by federal or state authorities. The Trustee
initially shall be Authenticating Agent hereunder. No such appointment shall
relieve the Trustee of liability or responsibility for the duties to be carried
out by the Authenticating Agent.
(b) Any Person into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which any Authenticating Agent shall be a
party, or any Person succeeding to the corporate agency business of any
Authenticating Agent, shall continue to be the Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
(c) Any Authenticating Agent may at any time resign by giving at
least 30 days' advance written notice of resignation to the Trustee and the
Depositor. The Trustee may at any time terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and the Depositor. Upon receiving a notice of resignation
or upon such a termination, or in case at any time any Authenticating Agent
shall cease to be eligible in accordance with the provisions of Section 7.10(a),
the Trustee may appoint a successor Authenticating Agent, shall give written
notice of such appointment to the Depositor and shall mail notice of such
appointment to all Holders of Certificates. Any successor Authenticating Agent
upon acceptance of its appointment hereunder shall become vested with all the
rights, powers, duties and responsibilities of its predecessor hereunder, with
like effect as if originally named as Authenticating Agent. No such
Authenticating Agent shall be appointed unless eligible under the provisions of
Section 7.10(a). No Authenticating Agent shall have responsibility or liability
for any action taken by it as such at the direction of the Trustee.
SECTION 7.11. INDEMNIFICATION.
(a) The Trustee and each of its directors, officers, employees,
agents and Controlling Persons shall be entitled to indemnification from the
Trust for any and all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments and any other costs, liabilities, fees and expenses
incurred in connection with any legal action not expressly required hereby to be
borne by the Trustee and incurred without negligence or willful misconduct on
their part, arising out of, or in connection with this Agreement, the
Certificates and the acceptance or administration of the trusts created
hereunder (including, without limitation, any unanticipated loss, liability or
expense incurred in connection with
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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:
(i) with respect to any such claim, the Trustee shall have
given the Depositor and the Holders of the Certificates written notice
thereof promptly after the Trustee shall have knowledge thereof; provided,
however, that failure to give such notice to the Depositor and the Holders
of Certificates shall not affect the Trustee's rights to indemnification
herein unless the Master Servicer's defense of such claim is materially
prejudiced thereby;
(ii) while maintaining control over its own defense, the
Trustee shall cooperate and consult fully with the Master Servicer in
preparing such defense; and
(iii) notwithstanding anything to the contrary in this Section
7.11, the Trust shall not be liable for settlement of any such claim by
the Trustee entered into without the prior consent of the Master Servicer,
which consent shall not be unreasonably withheld.
(b) The Trustee agrees to indemnify the Special Servicer and the
Master Servicer, and any director, officer, employee or agent thereof, and hold
them harmless against any and all claims, losses, penalties, fines, forfeitures,
legal fees and related costs, judgments and any other costs, liabilities, fees
and expenses that either of them may sustain arising from or as a result of the
willful misfeasance, bad faith or negligence in the performance of any of the
Trustee's duties hereunder or by reason of reckless disregard of the Trustee's
obligations and duties hereunder, including a breach of such obligations a
substantial motive of which is to obtain an economic advantage from being
released from such obligations, (unless such claim, loss, penalty, fine,
forfeiture, legal fees and related costs results from the willful misfeasance,
bad faith or negligence of such indemnified party) and if in any such situation
the Trustee is replaced, the parties hereto agree that the amount of such
claims, losses, penalties, fines, forfeitures, legal fees and related costs,
judgments and other costs, liabilities, fees and expenses shall at least equal
the incremental costs, if any, of retaining a successor Trustee. Each of the
Special Servicer and the Master Servicer shall immediately notify the Trustee if
a claim is made by a third party with respect to this Agreement, the
Certificates or any asset of the Trust Fund entitling the Special Servicer or
the Master Servicer to indemnification hereunder, whereupon the Trustee shall
assume the defense of any such claim (with counsel reasonably satisfactory to
the Special Servicer and the Master Servicer and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree that may be entered against it or them in respect of such
claim. Any failure to so notify the Trustee shall not affect any rights the
Special Servicer or the Master Servicer may have to indemnification under this
Agreement or otherwise, unless the Trustee's defense of such claim is materially
prejudiced thereby and the Trustee delivers a certification explaining the
prejudice. The indemnification provided herein shall survive the termination of
this Agreement and the resignation or termination of the Master Servicer, the
Special Servicer, the Trustee and the Fiscal Agent.
The provisions of this Section 7.11 shall survive any termination of this
Agreement and the resignation or removal of the Trustee.
SECTION 7.12. FEES AND EXPENSES OF TRUSTEE AND FISCAL AGENT.
Monthly, the Trustee shall be entitled to receive the Trustee Fee (which shall
not be limited by any provision of law with
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respect to the compensation of a trustee of an express trust), for all services
rendered by it in the execution of the trusts hereby created and in the exercise
and performance of any of the powers and duties hereunder of the Trustee. On or
before the Master Servicer Remittance Date in each month (commencing in April
1998), the Master Servicer shall, pursuant to Section 5.2(a), remit to the
Trustee for deposit in the Distribution Account that portion of funds then on
deposit in the Collection Account that are allocable to cover the Trustee Fees,
and the Trustee shall be entitled to withdraw such portion from the Distribution
Account to pay itself its unpaid Trustee Fees. The Trustee and the Fiscal Agent
shall also be entitled to recover from the Trust all reasonable unanticipated
expenses and disbursements incurred or made by the Trustee and the Fiscal Agent
in accordance with any of the provisions of this Agreement (including the
reasonable compensation and the reasonable expenses and disbursements of its
outside counsel and other Persons not regularly in its employ), not including
expenses incurred in the ordinary course of performing its duties as Trustee and
Fiscal Agent hereunder, and except any such expense, disbursement or advance as
may arise from its negligence or bad faith or which is the responsibility of the
Holders of the Certificates hereunder. The provisions of this Section 7.12 shall
survive any termination of this Agreement and the resignation or removal of the
Trustee and Fiscal Agent.
SECTION 7.13. COLLECTION OF MONEYS. Except as otherwise expressly
provided in this Agreement, the Trustee may demand payment or delivery of, and
shall receive and collect, all money and other property payable to or receivable
by the Trustee pursuant to this Agreement. The Trustee shall hold all such money
and property received by it as part of the Trust and shall distribute it as
provided in this Agreement. If the Trustee shall not have timely received
amounts to be remitted with respect to the Mortgage Loans from the Master
Servicer, the Trustee shall request the Master Servicer to make such
distribution as promptly as practicable or legally permitted. If the Trustee
shall subsequently receive any such amount, it may withdraw such request.
SECTION 7.14. NOTIFICATION TO HOLDERS. Upon termination of the
Master Servicer or appointment of a successor to the Master Servicer, the
Trustee shall promptly mail notice thereof by first class mail to the Rating
Agencies and the Certificateholders at their respective addresses appearing on
the Certificate Register.
SECTION 7.15. REPRESENTATIONS AND WARRANTIES OF TRUSTEE AND FISCAL
AGENT.
(a) The Trustee hereby represents and warrants as of the Closing
Date that:
(i) The Trustee is a national banking association, duly
organized, validly existing and in good standing under the laws governing
its creation and existence and has full corporate power and authority to
own its property, to carry on its business as presently conducted, and to
enter into and perform its obligations under this Agreement;
(ii) The execution and delivery by the Trustee of this
Agreement have been duly authorized by all necessary corporate action on
the part of the Trustee; neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated in this
Agreement, nor compliance with the provisions of this Agreement, will
conflict with or result in a breach of, or constitute a default under, (A)
any of the provisions of any law, governmental rule, regulation, judgment,
decrees or order binding on the Trustee or its properties that would
materially and adversely affect the Trustee's ability to perform its
obligations under this Agreement, (B) the organizational documents of the
Trustee, or (C) the terms of any material agreement or instrument to which
the Trustee is a party or by which it is bound; the Trustee is not in
default with respect to any order or decree of any court or any order,
regulation or demand
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of any federal, state, municipal or other governmental agency, which
default would materially and adversely affect its performance under this
Agreement;
(iii) The execution, delivery and performance by the Trustee
of this Agreement and the consummation of the transactions contemplated by
this Agreement do not require the consent, approval, authorization or
order of, the giving of notice to or the registration with any state,
federal or other governmental authority or agency, except such as has been
or will be obtained, given, effected or taken in order for the Trustee to
perform its obligations under this Agreement;
(iv) This Agreement has been duly executed and delivered by
the Trustee and, assuming due authorization, execution and delivery by the
other parties hereto, constitutes a valid and binding obligation of the
Trustee, enforceable against the Trustee in accordance with its terms,
subject, as to enforcement of remedies, (A) to applicable bankruptcy,
reorganization, insolvency, moratorium and other similar laws affecting
creditors' rights generally as from time to time in effect, (B) to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and (C) to public policy
considerations underlying the securities laws to the extent that such
considerations limit the enforceability of the provisions of this
Agreement that purport to provide for indemnification for securities law
violations; and
(v) No litigation is pending or, to the best of the Trustee's
knowledge, threatened, against the Trustee that, either in one instance or
in the aggregate, would draw into question the validity of this Agreement,
or the outcome of which could reasonably be expected to materially and
adversely affect the execution, delivery and performance by, or the
enforceability against, the Trustee of this Agreement or the ability of
the Trustee to perform under the terms of this Agreement.
(vi) The Trustee is currently modifying its system with the
intention of being Year 2000 ready by August 31, 1999.
(b) The Fiscal Agent hereby represents and warrants as of the
Closing Date that:
(i) The Fiscal Agent is a foreign bank corporation duly
organized, validly existing and in good standing under the laws governing
its creation and existence and has full corporate power and authority to
own its property, to carry on its business as presently conducted, and to
enter into and perform its obligations under this Agreement;
(ii) The execution and delivery by the Fiscal Agent of this
Agreement have been duly authorized by all necessary corporate action on
the part of the Fiscal Agent; neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated in this
Agreement, nor compliance with the provisions of this Agreement, will
conflict with or result in a breach of, or constitute a default under, (i)
any of the provisions of any law, governmental rule, regulation, judgment,
decrees or order binding on the Fiscal Agent or its properties that would
materially and adversely affect the Fiscal Agent's ability to perform its
obligations under this Agreement, (ii) the organizational documents of the
Fiscal Agent, or (iii) the terms of any material agreement or instrument
to which the Fiscal Agent is a party or by which it is bound; the Fiscal
Agent is not in default with respect to any order or decree of any court
or any order, regulation or demand of any federal, state, municipal or
other governmental agency, which default would materially and adversely
affect its performance under this Agreement;
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(iii) The execution, delivery and performance by the Fiscal
Agent of this Agreement and the consummation of the transactions
contemplated by this Agreement do not require the consent, approval,
authorization or order of, the giving of notice to, or the registration
with, any state, federal or other governmental authority or agency, except
such as has been obtained, given, effected or taken prior to the date
hereof;
(iv) This Agreement has been duly executed and delivered by
the Fiscal Agent and, assuming due authorization, execution and delivery
by the other parties hereto, constitutes a valid and binding obligation of
the Fiscal Agent, enforceable against the Fiscal Agent in accordance with
its terms, subject, as to enforcement of remedies, (A) to applicable
bankruptcy, reorganization, insolvency, moratorium and other similar laws
affecting creditors' rights generally as from time to time in effect, (B)
to general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law) and (C) to public
policy considerations underlying the securities laws to the extent that
such considerations limit the enforceability of the provisions of this
Agreement that purport to provide for indemnification for securities law
violations; and
(v) No litigation is pending or, to the best of the Fiscal
Agent's knowledge, threatened, against the Fiscal Agent, the outcome of
which could reasonably be expected to materially and adversely affect the
execution, delivery and performance by, or the enforceability against, the
Fiscal Agent of this Agreement or the ability of the Fiscal Agent to
perform under the terms of this Agreement.
SECTION 7.16. FISCAL AGENT TERMINATION EVENT. "FISCAL AGENT
TERMINATION EVENT," wherever used herein, means any one of the following events:
(i) Any failure by the Fiscal Agent to remit to the Trustee
when due any required Advances; or
(ii) A decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case under
any present or future federal or state bankruptcy, insolvency or similar
law for the appointment of a conservator, receiver, liquidator, trustee or
similar official in any bankruptcy, insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against
the Fiscal Agent and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days; or
(iii) The Fiscal Agent shall consent to the appointment of a
conservator, receiver, liquidator, trustee or similar official in any
bankruptcy, insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings or relating to the Fiscal Agent or of
or relating to all or substantially all of its property; or
(iv) The Fiscal Agent shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take
advantage of any applicable bankruptcy, insolvency or reorganization
statute, make an assignment for the benefit of its creditors, voluntarily
suspend payment of its obligations, or take any corporate action in
furtherance of the foregoing; or
(v) Either Rating Agency shall indicate its intent to reduce,
qualify (which shall not include a "negative" credit watch) or withdraw
the outstanding rating of any Class of
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Certificates because the prospective financial condition or capacity to
make Advances of the Fiscal Agent is insufficient to maintain such rating;
or
(vi) The long-term unsecured debt of the Fiscal Agent is rated
below "AA" by either Rating Agency.
SECTION 7.17. PROCEDURE UPON TERMINATION EVENT.
(a) On the date specified in a written notice of termination given
to the Fiscal Agent pursuant to Section 7.6(c), all authority, power and rights
of the Fiscal Agent under this Agreement, whether with respect to the Mortgage
Loans or otherwise, shall terminate and either a successor Fiscal Agent shall be
appointed by the Trustee, with the consent of the Depositor, or the Trustee
shall take such other action as shall prevent the downgrading of the
then-current ratings of the certificates; provided that in no event shall the
termination of the Fiscal Agent be effective until Rating Agency Confirmation
shall have been obtained with respect to the appointment of a successor fiscal
agent or such other action. The Fiscal Agent agrees to cooperate with the
Trustee in effecting the termination of the Fiscal Agent's responsibilities and
rights hereunder as Fiscal Agent.
(b) Notwithstanding the termination of its activities as Fiscal
Agent, the terminated Fiscal Agent shall continue to be entitled to
reimbursement of its Advances (with Advance Interest thereon) to the extent
provided in Section 5.2 but only to the extent such reimbursement relates to the
period up to and including the date on which the Fiscal Agent's termination is
effective. The Fiscal Agent shall be reimbursed for all amounts owed to it
hereunder on or prior to the effective date of its termination from amounts on
deposit in the Collection Account.
SECTION 7.18. IMPACT OF YEAR 2000 COMPLIANCE.
(a) Any type of difficulties or problems that may be encountered by
the Trustee or Fiscal Agent related in any way to the manipulation of dates in
1999, 2000 or later, or otherwise related to such party not being Year 2000
ready, shall not in any way relieve such party of its obligations or liabilities
under this Agreement.
ARTICLE VIII.
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 8.1. SERVICING STANDARD; GENERAL POWERS AND DUTIES.
(a) Each of the Master Servicer and the Special Servicer shall
service and administer the Mortgage Loans that it is obligated to service
pursuant to this Agreement on behalf of the Trustee and in the best interests of
and for the sole benefit of the Certificateholders (as determined by the Master
Servicer or the Special Servicer, as the case may be, in its good faith and
reasonable judgment), in accordance with applicable law, the terms of this
Agreement and the terms of the respective Mortgage Loans and, to the extent
consistent with the foregoing, further as follows: (i) with the same skill, care
and diligence as is normal and usual in its general mortgage servicing and REO
property management activities on behalf of third parties or on behalf of
itself, whichever is higher, with respect to mortgage loans and REO properties
that are comparable to the Mortgage Loans; (ii) with a view to the timely
collection of all scheduled payments of principal and interest under the
Mortgage Loans or, if a Mortgage Loan comes into and continues in default and
if, in the good faith and reasonable judgment of the Special
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Servicer, no satisfactory arrangements can be made for the collection of the
delinquent payments, the maximization of the recovery on such Mortgage Loan to
the Certificateholders (as a collective whole) on a present value basis (the
relevant discounting of anticipated collections that will be distributed to
Certificateholders to be performed at the related Net Mortgage Rate); and (iii)
without regard to (A) any relationship that the Master Servicer or the Special
Servicer, as the case may be, or any Affiliate thereof may have with the related
borrower, (B) the ownership of any Certificate by the Master Servicer or the
Special Servicer, as the case may be, or by any Affiliate thereof, (C) the
Master Servicer's obligation to make Advances, (D) the Special Servicer's
obligation to make (or to direct the Master Servicer to make) Servicing Advances
and (E) the right of the Master Servicer (or any Affiliate thereof) or the
Special Servicer (or any Affiliate thereof), as the case may be, to receive
reimbursement of costs, or the sufficiency of any compensation payable to it,
hereunder or with respect to any particular transaction (the "SERVICING
STANDARD"). Without limiting the generality of the foregoing, each of the Master
Servicer and the Special Servicer, in its own name, in connection with its
servicing and administrative duties hereunder is hereby authorized and empowered
by the Trustee to exercise all efforts consistent with the foregoing standard
and to execute and deliver, on behalf of the Certificateholders and the Trustee
or any of them, any and all financing statements, continuation statements and
other documents or instruments necessary to maintain the lien created by any
Mortgage or other security document in the related Mortgage File on the related
Mortgaged Property and related collateral; subject to Section 8.18, any and all
modifications, waivers, amendments or consents to or with respect to any
documents contained in the related Mortgage File; and any and all instruments of
satisfaction or cancellation, or of full release or discharge, and all other
comparable instruments, with respect to the Mortgage Loans and the Mortgaged
Properties. Subject to Section 8.18, each of the Master Servicer and the Special
Servicer is also authorized to approve a request by a Mortgagor under a Mortgage
Loan that it is obligated to service and administer pursuant to this Agreement,
for an easement, consent to alteration or demolition, and for other similar
matters, provided that the Master Servicer or the Special Servicer, as the case
may be, determines, exercising its good faith business judgment in the same
manner as it would if it were the owner of the related Mortgage Loan, that such
approval will not affect the security for, or the timely and full collectability
of, the related Mortgage Loan. Subject to Section 8.8, the Trustee shall
furnish, or cause to be furnished, to the Master Servicer and the Special
Servicer any powers of attorney and other documents necessary or appropriate to
enable the Master Servicer or the Special Servicer, as the case may be, to carry
out its servicing and administrative duties hereunder; provided, however, that
the Trustee shall not be held liable for any negligence with respect to, or
misuse of, any such power of attorney by the Master Servicer or the Special
Servicer, as the case may be.
(b) Except as otherwise expressly set forth herein with respect to
specific duties, the Master Servicer shall be responsible for the servicing and
administration of all the Mortgage Loans other than Specially Serviced Mortgage
Loans and REO Mortgage Loans, and the Special Servicer shall be responsible for
the servicing and administration of Specially Serviced Mortgage Loans, REO
Mortgage Loans and REO Properties. Subject to Section 8.1(a), the Master
Servicer and the Special Servicer shall each have full power and authority,
acting alone or, subject to Section 8.4, through Sub-Servicers, to do or cause
to be done any and all things in connection with such servicing and
administration that it may deem necessary or desirable.
(c) Upon determining that a Servicing Transfer Event has occurred
with respect to any Mortgage Loan and if the Master Servicer is not also the
Special Servicer, the Master Servicer shall promptly give notice thereof, and
deliver the related Servicing File, to the Special Servicer and shall use
reasonable efforts to provide the Special Servicer with all information,
documents (or copies thereof) and records (including records stored
electronically on computer tapes, magnetic discs and the like) relating to the
Mortgage Loan and reasonably requested by the Special Servicer to enable it to
assume its functions hereunder with respect thereto without acting through a
Sub-Servicer. The Master Servicer
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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 and upon giving such notice,
and returning such Servicing File, to the Master Servicer, the Special
Servicer's obligation to service such Mortgage Loan, and the Special Servicer's
right to receive the Special Servicing Fee with respect to such Mortgage Loan,
shall terminate, and the obligations of the Master Servicer to service and
administer such Mortgage Loan in accordance with this Agreement shall resume.
Notwithstanding other provisions in this Agreement to the contrary,
the Master Servicer shall remain responsible for the billing and collection,
accounting, data collection, reporting and other basic Master Servicer
administrative functions with respect to Specially Serviced Mortgage Loans,
provided that the Special Servicer shall establish procedures for the Master
Servicer as to the application of receipts and tendered payments and shall have
the exclusive responsibility for and authority over all contacts with and
notices to Mortgagors and similar matters relating to each Specially Serviced
Mortgage Loan and the related Mortgaged Property.
(d) The Master Servicer and Special Servicer will each be required
to service and administer each of the respective groups of Cross-Collateralized
Mortgage Loans as a single Mortgage Loan as and when it deems necessary and
appropriate, consistent with the Servicing Standard. If any Cross-Collateralized
Mortgage Loan becomes a Specially Serviced Mortgage Loan, then each other
Mortgage Loan with which it is cross-collateralized shall also become a
Specially Serviced Mortgage Loan. Similarly, no Cross-Collateralized Mortgage
Loan may subsequently become a Corrected Mortgage Loan, unless and until all
Servicing Transfer Events in respect of each other Mortgage Loan with which it
is cross-collateralized, are remediated or otherwise addressed as contemplated
above.
(e) Notwithstanding anything in this Agreement to the contrary, in
the event that the Master Servicer and the Special Servicer are the same Person,
all notices, certificates, information and consents required to be given by the
Master Servicer to the Special Servicer or vice versa shall be deemed to be
given without the necessity of any action on such Person's part.
(f) The relationship of each of the Master Servicer and the Special
Servicer to the Trustee and, unless the same Person acts in both capacities, to
each other under this Agreement is intended by the parties to be that of an
independent contractor and not of a joint venturer, partner or agent. Unless the
same person acts in both capacities, the Master Servicer shall have no
responsibility for the performance of the Special Servicer of its duties under
this Agreement, and the Special Servicer shall have no responsibility for the
performance of the Master Servicer under this Agreement.
SECTION 8.2. COLLECTION OF MORTGAGE LOAN PAYMENTS.
(a) The Master Servicer (or the Special Servicer with respect to the
Specially Serviced Mortgage Loans) shall, in accordance with the Servicing
Standard, make reasonable efforts to collect all payments called for under the
terms and provisions of the Mortgage Loans, and shall follow procedures which
are consistent with the Servicing Standard; provided, however, that nothing
herein contained shall be construed as an express or implied guarantee by the
Master Servicer or the Special Servicer of the collectability of the Mortgage
Loans. Consistent with the foregoing, the Master Servicer may in its
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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 any Lock-Box Agreement or
similar agreement is required by the terms of the related Mortgage, the Master
Servicer shall establish and maintain one or more accounts ("LOCK-BOX ACCOUNTS")
to be held outside the Trust and maintained by the Master Servicer in accordance
with the terms of the related Mortgage. Subject to the terms of the related
Mortgage, any Lock-Box Agreement or similar agreement, Lock-Box Accounts shall
be Eligible Accounts. The Master Servicer shall apply the funds deposited in
such accounts in accordance with the terms of the related Mortgage, any Lock-Box
Agreement and/or any similar agreement and in accordance with the Servicing
Standard.
(c) The Master Servicer and the Special Servicer shall not take any
enforcement action other than requests for payment with respect to payment of
Excess Interest or principal in excess of the principal component of the Monthly
Payment prior to the final maturity date. The Master Servicer will also be
permitted to forgive the payment of Excess Interest under the circumstances set
forth in Section 8.18.
SECTION 8.3. COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR ITEMS;
SERVICING ACCOUNTS AND RESERVE ACCOUNTS.
(a) The Master Servicer shall establish and maintain one or more
accounts (the "SERVICING ACCOUNTS") into which all Escrow Payments shall be
deposited and retained. Subject to the terms of the related Mortgage Note and
Mortgage, Servicing Accounts shall be Eligible Accounts. Withdrawals of amounts
so collected in respect of any Mortgage Loan (and interest earned thereon) from
a Servicing Account may be made only to: (i) effect payment of real estate
taxes, assessments, insurance premiums, ground rents (if applicable) and
comparable items in respect of the related Mortgaged Property; (ii) reimburse
the Master Servicer, the Special Servicer, the Trustee or the Fiscal Agent, as
applicable, for any unreimbursed Servicing Advances and unreimbursed Advance
Interest made thereby to cover any of the items described in the immediately
preceding clause (i); (iii) refund to the related Mortgagor any sums as may be
determined to be overages; (iv) pay interest, if required and as described
below, to the related Mortgagor on balances in the Servicing Account (or, if and
to the extent not payable to the related Mortgagor, to pay such interest to the
Master Servicer); or (v) clear and terminate the Servicing Account at the
termination of this Agreement in accordance with Section 10.1. As part of its
servicing duties, the Master Servicer shall pay or cause to be paid to the
Mortgagors interest on funds in Servicing Accounts maintained thereby, to the
extent required by law or the terms of the related Mortgage Loan, and otherwise
may retain such amounts.
(b) The Master Servicer shall (i) maintain accurate records with
respect to each related Mortgaged Property reflecting the status of real estate
taxes, assessments and other similar items that are or may become a lien thereon
and the status of insurance premiums and any ground rents payable in respect
thereof and (ii) use reasonable efforts to obtain, from time to time, all bills
for the payment of such items (including renewal premiums); and the Master
Servicer shall effect payment thereof (in the case of Specially Serviced
Mortgage Loans, at the direction of the Special Servicer) prior to the
applicable penalty or termination date, employing for such purpose Escrow
Payments as allowed under the terms of the related Mortgage Loan. To the extent
that a Mortgage Loan does not require a Mortgagor to escrow for the payment of
real estate taxes, assessments, insurance premiums, ground rents (if applicable)
and similar items, the Master Servicer (or the Special Servicer with respect to
the Specially Serviced Mortgaged Loans) shall use efforts consistent with the
Servicing Standard to cause
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the related Mortgagor to comply with the requirements ofthe 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 a timely basis. All such advances shall be reimbursable in the
first instance from related collections from the Mortgagors, and further as
provided in Section 5.2. No costs incurred by the Master Servicer or the Special
Servicer in effecting the payment of real estate taxes, assessments, ground
rents (if applicable) and other similar items on or in respect of the Mortgaged
Properties shall, for purposes hereof, including, without limitation,
calculating monthly distributions to Certificateholders, be added to the unpaid
principal balances of the related Mortgage Loans, notwithstanding that the terms
of such Mortgage Loans so permit.
(d) The Master Servicer shall establish and maintain, as applicable,
one or more accounts (the "RESERVE ACCOUNTS"), into which all Reserve Funds, if
any, shall be deposited and retained. Withdrawals of amounts so deposited may be
made to pay for, or to reimburse the related Mortgagor in connection with, the
related repairs, environmental remediation, replacements, capital improvements
and/or similar items at the related Mortgaged Property if such repairs,
environmental remediation, replacements, capital improvements and/or similar
items have been completed, and such withdrawals are made, in accordance with the
Servicing Standard and the terms of the related Mortgage Note, Mortgage and any
agreement with the related Mortgagor governing such Reserve Funds. Subject to
the terms of the related Mortgage Note and Mortgage, all Reserve Accounts shall
be Eligible Accounts. Within six months of the Closing Date, the Master Servicer
shall deliver a report to the Depositor setting forth the status of each of the
Reserve Accounts for each of the Reserve Accounts listed on Schedule IV and the
actions taken in respect of the purposes for which the Reserve Accounts were
established and any recommendations in respect thereof.
SECTION 8.4. SUB-SERVICING AGREEMENTS.
(a) The Master Servicer and the Special Servicer may each enter into
Sub-Servicing Agreements for the servicing and administration of all or a part
of the Mortgage Loans for which it is responsible hereunder, provided that, in
each case, the Sub-Servicing Agreement: (i) is consistent with this Agreement
and shall provide that the Sub-Servicer shall maintain errors and omissions
insurance and fidelity bond coverage as required of the Master Servicer or the
Special Servicer under Section 8.5 hereof, (ii) provides that if the Master
Servicer or the Special Servicer, as the case may be, shall for any reason no
longer be the Master Servicer or Special Servicer, as applicable, hereunder
(including, without limitation, by reason of an Event of Default and its
termination hereunder), the Trustee or its designee may either thereupon assume
all of the rights and, except to the extent they arose prior to the date of
assumption, obligations of the Master Servicer or the Special Servicer, as the
case may be, under such agreement or, alternatively, may terminate such
agreement without payment of any termination fee or penalty out of the Trust;
(iii) in the case of a Sub-Servicing Agreement entered into by the Master
Servicer, expressly or effectively provides that (if the Master Servicer and the
Special Servicer are not the same Person) such 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
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Corrected Mortgage Loan); (iv) in the case of a Sub-Servicing Agreement entered
into by the Special Servicer, relates only to Specially Serviced Mortgage Loans
or REO Properties and expressly or effectively provides that (if the Master
Servicer and the Special Servicer are not the same Person) such agreement shall
terminate with respect to any such Mortgage Loan that becomes a Corrected
Mortgage Loan; (v) provides that the Trustee for the benefit of the
Certificateholders shall be a third party beneficiary under such Sub-Servicing
Agreement, but that (except to the extent the Trustee or its designee assumes
the obligations of the Master Servicer or the Special Servicer, as the case may
be, thereunder as contemplated by the immediately preceding clause (ii)) none of
the Trust Fund, the Trustee, any successor Master Servicer or Special Servicer
(unless and to the extent that the successor Master Servicer or the Special
Servicer is a party to such Sub-Servicing Agreement), as the case may be, or any
Certificateholder shall have any duties under such Sub-Servicing Agreement or
any liabilities arising therefrom; (vi) permits any purchaser of a Mortgage Loan
pursuant to this Agreement to terminate such Sub-Servicing Agreement with
respect to such purchased Mortgage Loan at its option and without penalty and
(vii) does not permit the Sub-Servicer any direct rights of indemnification that
may be satisfied out of assets of the Trust Fund. References in this Agreement
to actions taken or to be taken by the Master Servicer or the Special Servicer,
as the case may be, include actions taken or to be taken by a Sub-Servicer on
behalf of the Master Servicer or the Special Servicer, as the case may be; and,
in connection therewith, all amounts advanced by any Sub-Servicer to satisfy the
obligations of the Master Servicer or the Special Servicer, as the case may be,
hereunder to make Servicing Advances and P&I Advances shall be deemed to have
been advanced by the Master Servicer or the Special Servicer, as the case may
be, out of its own funds. For purposes of this Agreement, the Master Servicer
and the Special Servicer each shall be deemed to have received any payment when
the Sub-Servicer receives such payment. Annually, in connection with the
delivery of the Officer's Certificate contemplated in Section 8.12, the Master
Servicer and the Special Servicer each shall identify to the other, the Trustee
and the Depositor any Sub-Servicers then retained thereby.
(b) Each Sub-Servicer shall be authorized to transact business in
the state or states in which the Mortgaged Properties securing the Mortgage
Loans it is to service are situated, if and to the extent required by applicable
law.
(c) As part of its servicing activities hereunder, the Master
Servicer and the Special Servicer, for the benefit of the Trustee and the
Certificateholders, shall (at no expense to the Trustee, the Certificateholders
or the Trust Fund) monitor the performance and enforce the obligations of each
Sub-Servicer retained by it under the related Sub-Servicing Agreement. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Sub-Servicing Agreements in accordance with their respective
terms and the pursuit of other appropriate remedies, shall be in such form and
carried out to such an extent and at such time as the Master Servicer or the
Special Servicer, as the case may be, would require were it the owner of the
Mortgage Loans. Subject to the terms of the applicable Sub-Servicing Agreement,
the Master Servicer and the Special Servicer each shall have the right to remove
a Sub-Servicer retained by it at any time it considers such removal to be in the
best interests of Certificateholders.
(d) In the event the Trustee or its designee assumes the rights and
obligations of the Master Servicer or the Special Servicer under any
Sub-Servicing Agreement, the Master Servicer or the Special Servicer, as the
case may be, at its expense shall, upon request of the Trustee, deliver to the
assuming party all documents and records relating to such Sub-Servicing
Agreement and the Mortgage Loans then being serviced thereunder and an
accounting of amounts collected and held on behalf of it thereunder, and
otherwise use reasonable efforts to effect the orderly and efficient transfer of
the Sub-Servicing Agreement to the assuming party.
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(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.
(f) Notwithstanding anything to the contrary contained herein,
neither the Master Servicer nor the Special Servicer shall have the right to
delegate to any Sub-Servicer any right granted to the Master Servicer or the
Special Servicer, as applicable, hereunder to modify or foreclose upon any
Mortgage Loan.
SECTION 8.5. MAINTENANCE OF INSURANCE POLICIES; ERRORS AND OMISSIONS
AND FIDELITY COVERAGE.
(a) The Master Servicer shall use reasonable efforts to cause each
Mortgagor to maintain in respect of the related Mortgaged Property all insurance
coverage (other than earthquake insurance) as is required under the related
Mortgage; provided that if any Mortgage permits the holder thereof to dictate to
the Mortgagor the insurance coverage to be maintained on such Mortgaged
Property, the Master Servicer, or the Special Servicer in the case of Specially
Serviced Mortgage Loans, shall impose such insurance requirements as are
consistent with the Servicing Standard. If a Mortgagor fails to maintain such
insurance, the Master Servicer or the Special Servicer in the case of Specially
Serviced Mortgage Loans, shall (to the extent available at commercially
reasonable rates) obtain such insurance (which may be through a master or single
interest policy), and the cost (including any deductible relating to such
insurance) of such insurance (or in the case of a master or single interest
policy, the incremental cost (including any deductible relating to such
insurance) of such insurance relating to the specific Mortgaged Property), shall
be a Servicing Advance (subject to the limitations set forth in Section 4.2(a))
recoverable by the Master Servicer, or the Special Servicer in the case of
Specially Serviced Mortgage Loans, pursuant to Section 5.2. If at any time a
Mortgaged Property is located in an area identified in the Flood Hazard Boundary
Map or Flood Insurance Rate Map issued by the Federal Emergency Management
Agency as having special flood hazards or it becomes located in such area by
virtue of remapping conducted by such agency (and flood insurance has been made
available), then upon the Master Servicer or the Special Servicer becoming aware
of such fact (using efforts consistent with the Servicing Standard), the Master
Servicer, or the Special Servicer in the case of Specially Serviced Mortgage
Loans, shall, if and to the extent that the Mortgage Loan requires the Mortgagor
or permits the Mortgagee to require the Mortgagor to do so, use efforts
consistent with the Servicing Standard to cause the related Mortgagor to
maintain a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration in an amount representing
coverage of not less than the least of (i) the unpaid principal balance of the
related Mortgage Loan, (ii) the full insurable value of such Mortgaged Property,
(iii) the maximum amount of insurance coverage available under the National
Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the
National Flood Insurance Reform Act of 1994, as amended, and (iv) 100% of the
replacement cost of the improvements on such Mortgaged Property. If (i) the
Mortgagor is required by the terms of the Mortgage Loan to maintain such
insurance (or becomes obligated by virtue of the related Mortgaged Property
becoming located in such area by virtue of such remapping) or (ii) the terms of
the Mortgage Loan permit the mortgagee to require the Mortgagor to obtain such
insurance, the Master Servicer shall promptly notify the Mortgagor of its
obligation to obtain such insurance. If the Mortgagor fails to obtain such flood
insurance within 120 days of such notification, the Master Servicer, or the
Special Servicer in the case of Specially Serviced Mortgage Loans, shall obtain
such insurance (to the extent available at commercially reasonable rates), and
the cost of such insurance shall be a Servicing Advance recoverable by the
Master Servicer, or the Special Servicer in the case of Specially Serviced
Mortgage Loans, pursuant to Section 5.2.
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The Special Servicer shall cause to be maintained for each REO
Property no less insurance coverage than was previously required of the
Mortgagor under the related Mortgage. All such insurance policies shall contain
a "standard" mortgagee clause or shall identify the Trustee as the named
insured, as applicable, with any loss payable to the Master Servicer (in the
case of Mortgaged Properties) or the Special Servicer (in the case of REO
Properties) on behalf of the Trustee. Any amounts collected by the Master
Servicer or the Special Servicer under any such policies (other than amounts to
be applied to the restoration or repair of the related Mortgaged Property or REO
Property or amounts to be released to the related Mortgagor, in each case in
accordance with applicable law, the terms of the related Mortgage Loan documents
and the Servicing Standard) shall be deposited in the Collection Account,
subject to withdrawal pursuant to Section 5.2. Any cost incurred by the Master
Servicer or the Special Servicer in maintaining any such insurance shall not,
for purposes hereof, including, without limitation, calculating monthly
distributions to Certificateholders, be added to the outstanding principal
balance of the related Mortgage Loan, notwithstanding that the terms of such
Mortgage Loan so permit.
(b) (i) If the Master Servicer or the Special Servicer, as
applicable, causes any Mortgaged Property or REO Property to be covered by a
blanket insurance policy, which provides protection equivalent to the individual
policies otherwise required, the Master Servicer or Special Servicer will
conclusively be deemed to have satisfied its respective obligations to cause
hazard insurance to be maintained on such Mortgaged Properties or REO
Properties. Such policy may contain a deductible clause, in which case the
Master Servicer or the Special Servicer, as applicable, will in the event that
(i) there shall not have been maintained on the related Mortgaged Property or
REO Property a policy otherwise complying with the provisions of Section
3.07(a), and (ii) a loss occurs that would have been covered by such a policy
had it been maintained, immediately deposit into the Certificate Account (or
into the Servicing Account if insurance proceeds are to be applied to the repair
or restoration of the applicable Mortgaged Property or disbursed to the related
Mortgagor) from its own funds the amount not otherwise payable under such policy
because of such deductible, to the extent that any such deductible exceeds the
deductible limitation that pertained to the related Mortgage Loan, or, in the
absence of any such deductible limitation, the deductible limitation which is
consistent with the Servicing Standard. The Master Servicer and the Special
Servicer each agrees to prepare and present, on behalf of itself, the Trustee
and Certificateholders, claims under any such blanket insurance policy
maintained by it in a timely fashion in accordance with the terms of such
policy. The incremental cost of such insurance allocable to any Mortgaged
Property or REO Property, if not borne by the Mortgagor, will be paid by the
Master Servicer as a Servicing Advance.
(ii) If the Master Servicer or the Special Servicer, as applicable,
causes any Mortgaged Property or REO Property to be covered by a master force
placed insurance policy, which provides protection equivalent to the individual
policies otherwise required, the Master Servicer or Special Servicer shall
conclusively be deemed to have satisfied its respective obligations to cause
hazard insurance to be maintained on such Mortgaged Properties and/or REO
Properties. Such policy may contain a deductible clause, in which case the
Master Servicers or the Special Servicer, as applicable, shall in the event that
(i) there shall not have been maintained on the related Mortgaged Property or
REO Property a policy otherwise complying with the provisions of Section
3.07(a), and (ii) there shall have been one or more losses which would have been
covered by such a policy had it been maintained, immediately deposit into the
Certificate Account (or into the Servicing Account if insurance proceeds are to
be applied to the repair or restoration of the applicable Mortgaged Property or
disbursed to the related Mortgagor) from its own funds the amount not otherwise
payable under such policy because of such deductible to the extent that any such
deductible exceeds the deductible limitation that pertained to the related
Mortgage Loan, or, in the absence of any such deductible limitation, the
deductible limitation which is consistent with the Servicing Standard. The
Master Servicer and the Special Servicer each agrees to prepare and present, on
behalf of itself, the Trustee and Certificateholders, claims under any
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such master force placed insurance policy maintained by it in a timely fashion
in accordance with the terms of such policy. The incremental cost of such
insurance allocable to any Mortgaged Property or REO Property, if not borne by
the Mortgagor, will be paid by the Master Servicer as a Servicing Advance.
(c) Each of the Master Servicer and the Special Servicer shall
obtain and maintain at its own expense and keep in full force and effect
throughout the term of this Agreement a blanket fidelity bond and an errors and
omissions insurance policy covering its officers and employees and other persons
acting on behalf of it in connection with its activities under this Agreement.
The amount of coverage shall be at least equal to the coverage that would be
required by FNMA or FHLMC, whichever is greater, with respect to the Master
Servicer or Special Servicer, as the case may be, if the Master Servicer or
Special Servicer, as the case may be, were servicing and administering the
Mortgage Loans and/or REO Properties for which it is responsible hereunder for
FNMA or FHLMC. Coverage of the Master Servicer or the Special Servicer under a
policy or bond obtained by an Affiliate of such Person and providing the
coverage required by this Section 8.5(c) shall satisfy the requirements of this
Section 8.5(c).
(d) All insurance coverage required to be maintained by the Master
Servicer or the Special Servicer under this Section 8.5 shall be obtained from
Qualified Insurers (A) whose claims-paying ability is rated (or the obligations
of which are guaranteed or backed by a company having such claims paying ability
or rating) at least investment grade (or, in the case of a blanket hazard policy
obtained in accordance with Section 8.5(b), rated in one of the two highest
ratings categories) by any Rating Agency or (B) who are (as evidenced by the
receipt of Rating Agency Confirmation) otherwise acceptable to each Rating
Agency.
SECTION 8.6. ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION
AGREEMENTS; SUBORDINATE FINANCING.
(a) If any Mortgage Loan contains a provision in the nature of a
"due-on-sale" clause, which by its terms:
(i) provides that such Mortgage Loan shall (or may at the
mortgagee's option) become due and payable upon the sale or other transfer
of an interest in the related Mortgaged Property; or
(ii) provides that such Mortgage Loan may not be assumed
without the consent of the mortgagee in connection with any such sale or
other transfer,
then, for so long as such Mortgage Loan is included in the Trust Fund, the
Special Servicer, on behalf of the Trustee as the mortgagee of record, shall
exercise (or, subject to Section 8.18(a), waive its right to exercise) any right
it may have with respect to such Mortgage Loan (x) to accelerate the payments
thereon, or (y) to withhold its consent to any such sale or other transfer, in a
manner consistent with the Servicing Standard; provided, however, that if the
Mortgaged Property to be sold or transferred relates to a Mortgage Loan that
constitutes 2% or more of the Stated Principal Balance of all the Mortgage Loans
(taking into account for the purposes of such calculation, (a) in the case of
any such Mortgage Loan that is a Cross-Collateralized Mortgage Loan, any
Mortgage Loan with which it is cross-collateralized and (b) in the case of any
such Mortgage Loan with respect to which the related Mortgagor or its affiliate
is a Mortgagor with respect to one or more other Mortgage Loans, such other
Mortgage Loan or Mortgage Loans), then any such sale or transfer shall require
Rating Agency Confirmation. In the event that the Special Servicer intends or is
required, in accordance with the preceding sentence, the Mortgage Loan documents
or applicable law, to permit the transfer of any Mortgaged Property, the Special
Servicer, if
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consistent with the Servicing Standard, may enter into a substitution of
liability agreement, pursuant to which the original Mortgagor and any original
guarantors are released from liability, and the transferee and any new
guarantors are substituted therefor and become liable under the Mortgage Note
and any related guaranties. In connection with any such transfer and
substitution, the Special Servicer may require from the related Mortgagor a
reasonable and customary fee for the additional services performed by it,
together with reimbursement for any related costs and expenses incurred by it
(but only to the extent that charging such fee will not be a significant
modification of the Mortgage Loan for purposes of the REMIC Provisions or result
in an Adverse REMIC Event in respect of any REMIC Pool). The Special Servicer
shall promptly notify the Trustee and the Master Servicer of any such agreement
and forward the original thereof to the Trustee for inclusion in the related
Mortgage File (with a copy to the Master Servicer and the Rating Agencies). In
connection with the Rating Agency Confirmation, the Master Servicer shall
prepare and deliver to the Rating Agencies a memorandum outlining its analysis
and recommendation in accordance with the Servicing Standard, together with
copies of all relevant documentation. The Master Servicer shall also prepare and
provide the Rating Agencies with such memorandum and documentation for all
transfer, assumption and encumbrance consents granted for Mortgage Loans that
constitute less than 2% of the Stated Principal Balance of all of the Mortgage
Loans (taking into account clauses (a) and (b) above), but for which the Master
Servicer's decision will be sufficient and a No Downgrade Confirmation will not
be required.
(b) If any Mortgage Loan contains a provision in the nature of a
"due-on-encumbrance" clause, which by its terms:
(i) provides that such Mortgage Loan shall (or may at the
mortgagee's option) become due and payable upon the creation of any
additional lien or other encumbrance on the related Mortgaged Property; or
(ii) requires the consent of the mortgagee to the creation of
any such additional lien or other encumbrance on the related Mortgaged
Property,
then, for so long as such Mortgage Loan is included in the Trust Fund, the
Special Servicer, on behalf of the Trustee as the mortgagee of record, shall
exercise (or, subject to Section 8.18(a)(ii), waive its right to exercise) any
right it may have with respect to such Mortgage Loan (x) to accelerate the
payments thereon, or (y) to withhold its consent to the creation of any such
additional lien or other encumbrance, in a manner consistent with the Servicing
Standard; provided, however, that any such waiver shall require Rating Agency
Confirmation, provided that such Confirmation shall be required of DCR only if
the Mortgage Loan represents 2% or more of the Stated Principal Balance of all
Mortgage Loans (taking into account clauses (a) and (b) of Section 8.6(a)).
(c) Nothing in this Section 8.6 shall constitute a waiver of the
Trustee's right, as the mortgagee of record, to receive notice of any assumption
of a Mortgage Loan, any sale or other transfer of the related Mortgaged Property
or the creation of any additional lien or other encumbrance with respect to such
Mortgaged Property.
(d) Except as otherwise permitted by Section 8.18, neither the
Master Servicer nor the Special Servicer shall agree to modify, waive or amend
any term of any Mortgage Loan in connection with the taking of, or the failure
to take, any action pursuant to this Section 8.6.
(e) In the event that a Mortgagor elects to obtain a release of the
related Mortgaged Property from the lien of the related Mortgage by pledging
defeasance collateral in accordance with the terms of the Mortgage Note, then
the Master Servicer shall, in accordance with the terms of such
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Mortgage Note, obtain reasonable assurance that the Certificates will not be
subject to a downgrade, withdrawal or qualification by the Rating Agencies as a
result of such defeasance and that any related expenses will be paid for by the
Mortgagor. In addition, to the extent permitted by the Mortgage Loan documents
or applicable law, the Master Servicer shall require an Opinion of Counsel
(which shall be at the expense of the Mortgagor) to the effect that such
defeasance will not cause an Adverse REMIC Event.
(f) Notwithstanding the provisions of Section 8.6(e), if a
defeasance is effected such that (i) the Mortgagor provides U.S. government
securities as defeasance collateral in an amount sufficient to generate cash for
loan payments as and when due under the Mortgage Note, (ii) an independent
accounting firm certifies that such defeasance collateral is sufficient to pay
the Mortgage Note in accordance with its terms, (iii) the loan is assumed (and
the collateral owned) by an entity meeting single purpose bankruptcy-remote
criteria (if the Mortgagor no longer complies), and (iv) counsel provides an
Opinion of Counsel that the Trustee has a perfected security interest in the
defeasance collateral, then no such assurance from DCR shall be required. The
Master Servicer shall not be required to establish and maintain on behalf of the
Mortgagor a single purpose bankruptcy-remote entity. The out-of-pocket expenses
incurred by the Master Servicer with respect to a defeasance pursuant to this
Section 8.6(f) if not required to be paid by the Mortgagor shall constitute a
Servicing Advance.
SECTION 8.7. REALIZATION UPON DEFAULTED MORTGAGE LOANS.
(a) The Master Servicer shall notify the Special Servicer of the
occurrence of a Servicing Transfer Event in respect of any Mortgage Loan and,
subject to Section 8.18, the Special Servicer shall monitor such Mortgage Loan,
evaluate whether the causes of any default thereunder can be corrected over a
reasonable period without significant impairment of the value of the related
Mortgaged Property, initiate corrective action in cooperation with the Mortgagor
if, in the Special Servicer's reasonable and good faith judgment, cure is
likely, and take such other actions as are consistent with the Servicing
Standard. If, in the Special Servicer's reasonable and good faith judgment, such
corrective action has been unsuccessful, no satisfactory arrangement can be made
for collection of delinquent payments and no other alternative consistent with
the Servicing Standard can be negotiated, and the defaulted Mortgage Loan has
not been released from the Trust Fund pursuant to any provision hereof, then the
Special Servicer shall, subject to subsections (b) through (d) of this Section
8.7, exercise reasonable efforts, consistent with the Servicing Standard, to
foreclose upon or otherwise comparably convert (which may include an REO
Acquisition) the ownership of property securing such Mortgage Loan. The
foregoing is subject to the provision that, in any case in which a Mortgaged
Property shall have suffered damage from an Uninsured Cause, the Master Servicer
and the Special Servicer shall each have the right but not the obligation to
expend its own funds as a Servicing Advance toward the restoration of such
property if it shall determine in its reasonable discretion (i) that such
restoration will increase, on a net present value basis, the net proceeds of
liquidation of such Mortgaged Property to Certificateholders after reimbursement
to itself for such Advances (together with Advance Interest), and (ii) that such
Advances (together with Advance Interest) will be recoverable by the Master
Servicer or Special Servicer, as the case may be, out of the proceeds of
liquidation of such Mortgaged Property, as contemplated in Section 5.2. The
Special Servicer (or, at the direction of the Special Servicer, the Master
Servicer) shall be responsible for all other costs and expenses incurred by it
in any such proceedings, subject to its being entitled to reimbursement therefor
as a Servicing Advance as provided in Section 4.2 or Section 5.2, and further
subject to its being entitled to pay out of the related Liquidation Proceeds any
Liquidation Expenses incurred in respect of any Mortgage Loan, which Liquidation
Expenses were outstanding at the time such proceeds are received. When
applicable state law permits the Special Servicer to select between judicial and
non-judicial foreclosure in respect of any Mortgaged Property, the Special
Servicer shall make such selection in a manner consistent with the Servicing
Standard. Nothing
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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, among other things, the physical condition of the
Mortgaged Property, the state of the local economy, the Trust's obligation to
dispose of any REO Property within the period specified in Section 8.19, and the
results of any Appraisal obtained pursuant to this Agreement, all such bids to
be made in a manner consistent with the Servicing Standard. If and when the
Master Servicer or the Special Servicer deems it necessary and prudent for
purposes of establishing the fair market value of any Mortgaged Property
securing a defaulted Mortgage Loan, whether for purposes of bidding at
foreclosure or otherwise, the Special Servicer is authorized to have an
Appraisal performed with respect to such property (the cost of which Appraisal
shall be covered by, and be reimbursable as, a Servicing Advance).
(b) The Special Servicer shall not acquire any personal property
pursuant to this Section 8.7 (with the exception of cash or cash equivalents
pledged as collateral for a Mortgage Loan) unless either:
(i) such personal property is incident to real property
(within the meaning of Section 856(e)(1) of the Code) so acquired by the
Special Servicer; or
(ii) the Special Servicer shall have obtained an Opinion of
Counsel (the cost of which may be withdrawn from the Collection Account
pursuant to Section 5.2) to the effect that the holding of such personal
property by the Trust Fund will not cause the imposition of a tax on the
Trust Fund or any REMIC Pool under the REMIC Provisions or cause any of
REMIC I, REMIC II or REMIC III to fail to qualify as a REMIC at any time
that any Certificate is outstanding.
(c) Notwithstanding the foregoing provisions of this Section 8.7,
neither the Master Servicer nor the Special Servicer shall, on behalf of the
Trustee, complete foreclosure proceedings, obtain title to a Mortgaged Property
in lieu of foreclosure or otherwise, have a receiver of rents appointed with
respect to any Mortgaged Property, or take any other action with respect to any
Mortgaged Property, if, as a result of any such action, the Trustee, on behalf
of the Certificateholders, would be considered to hold title to, to be a
"mortgagee-in-possession" of, or to be an "owner" or "operator" of such
Mortgaged Property within the meaning of CERCLA or any comparable law, unless
(as evidenced by an Officer's Certificate to such effect delivered to the
Trustee) the Special Servicer has previously received an Environmental
Assessment in respect of such Mortgaged Property prepared by a Person who
regularly conducts Environmental Assessments and the Special Servicer, based
solely (as to environmental matters and related costs) on the information set
forth in such Environmental Assessment, determines that:
(i) the Mortgaged Property is in compliance with applicable
Environmental Laws or, if not, that acquiring such Mortgaged Property and
taking such actions as are necessary to bring the Mortgaged Property in
compliance therewith is reasonably likely to produce a greater recovery to
Certificateholders on a present value basis than not acquiring such
Mortgaged Property and not taking such actions; and
(ii) there are no circumstances or conditions present at the
Mortgaged Property relating to the use, management or disposal of
Hazardous Materials for which investigations, testing, monitoring,
containment, clean-up or remediation could be required under any
applicable environmental laws and regulations or, if such circumstances or
conditions are present for which any such action could be required, that
acquiring such Mortgaged Property and
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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.
(f) The Special Servicer shall report to the Internal Revenue
Service and the related Mortgagor, in the manner required by applicable law, the
information required to be reported regarding any Mortgaged Property which is
abandoned or foreclosed. The Special Servicer shall deliver a copy of any such
report to the Trustee and the Master Servicer.
(g) The Special Servicer shall have the right to determine, in
accordance with the Servicing Standard, the advisability of the maintenance of
an action to obtain a deficiency judgment if the laws of the state in which the
Mortgaged Property is located and the terms of the Mortgage Loan permit such an
action.
(h) The Special Servicer shall maintain accurate records, prepared
by a Servicing Officer, of each Final Recovery Determination in respect of a
defaulted Mortgage Loan or REO Property and the basis thereof. Each Final
Recovery Determination shall be evidenced by an Officer's Certificate delivered
to the Trustee and the Master Servicer no later than 10 Business Days following
such Final Recovery Determination.
SECTION 8.8. TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES.
(a) Upon the payment in full of any Mortgage Loan, or the receipt by
the Master Servicer or the Special Servicer of a notification that payment in
full shall be escrowed in a manner customary for such purposes, the Master
Servicer or the Special Servicer, as the case may be, will
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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 that are
required to be deposited in the Collection Account pursuant to Section 5.1 have
been or will be so deposited. Within five Business Days (or within such shorter
period as release can reasonably be accomplished if the Master Servicer or the
Special Servicer notifies the Trustee of an exigency) of receipt of such notice
and request, the Trustee shall release, or cause any related Custodian to
release, the related Mortgage File to the Master Servicer or the Special
Servicer, whichever requested it. No expenses incurred in connection with any
instrument of satisfaction or deed of reconveyance shall be chargeable to the
Collection Account.
(b) From time to time as is appropriate for servicing or foreclosure
of any Mortgage Loan, the Master Servicer or the Special Servicer may deliver to
the Trustee a Request for Release signed by a Servicing Officer thereof. Upon
receipt of the foregoing, the Trustee shall deliver or cause the related
Custodian to deliver, the Mortgage File or any document therein to the Master
Servicer or the Special Servicer, as the case may be. Upon return of such
Mortgage File or such document to the Trustee or the related Custodian, or the
delivery to the Trustee of a certificate of a Servicing Officer stating that
such Mortgage Loan was liquidated and that all amounts received or to be
received in connection with such liquidation that are required to be deposited
into the Collection Account pursuant to Section 5.1 have been or will be so
deposited, or that such Mortgage Loan has become an REO Mortgage Loan, the
Request for Release shall be released by the Trustee to the Master Servicer or
the Special Servicer, as applicable.
(c) Within five Business Days (or within such shorter period as
delivery can reasonably be accomplished if the Special Servicer notifies the
Trustee of an exigency) of receipt thereof, the Trustee shall execute and
deliver to the Special Servicer any court pleadings, requests for trustee's sale
or other documents necessary to the foreclosure or trustee's sale in respect of
a Mortgaged Property or to any legal action brought to obtain judgment against
any Mortgagor on the Mortgage Note or Mortgage or to obtain a deficiency
judgment, or to enforce any other remedies or rights provided by the Mortgage
Note or Mortgage or otherwise available at law or in equity. The Special
Servicer shall be responsible for the preparation of all such documents and
pleadings. When submitted to the Trustee for signature, such documents or
pleadings shall be accompanied by a certificate of a Servicing Officer
requesting that such pleadings or documents be executed by the Trustee and
certifying as to the reason such documents or pleadings are required and that
the execution and delivery thereof by the Trustee will not invalidate or
otherwise affect the lien of the related Mortgage, except for the termination of
such a lien upon completion of the foreclosure or trustee's sale.
SECTION 8.9. DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF MASTER
SERVICER OR SPECIAL SERVICER TO BE HELD FOR TRUSTEE FOR THE BENEFIT OF
CERTIFICATEHOLDERS.
Notwithstanding any other provisions of this Agreement, the Master
Servicer and the Special Servicer shall each transmit to the Trustee, to the
extent required by this Agreement, all documents and instruments coming into the
possession of the Master Servicer or the Special Servicer, as the case may be,
from time to time and shall account fully to the Trustee for any funds received
or otherwise collected thereby, including Liquidation Proceeds, Condemnation
Proceeds or Insurance Proceeds in respect of any Mortgage Loan or REO Property.
All Mortgage Loan documents and funds collected or held by, or under the control
of, the Master Servicer or the Special Servicer in respect of any Mortgage Loans
and/or REO Properties, whether from the collection of principal and interest
payments or from Liquidation Proceeds, Condemnation Proceeds or Insurance
Proceeds or otherwise, including any funds on deposit in the Collection Account,
shall be held by the Master Servicer or the Special Servicer,
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as the case may be, for and on behalf of the Trustee and the Certificateholders
and shall be and remain the sole and exclusive property of the Trustee, subject
to the applicable provisions of this Agreement. The Master Servicer and the
Special Servicer each agrees that it shall not create, incur or subject any
Mortgage Loan documents or any funds that are deposited in the Collection
Account or any Lock-Box Account, Reserve Account or Servicing Account, or any
funds that otherwise are or may become due or payable to the Trustee, to any
claim, lien, security interest, judgment, levy, writ of attachment or other
encumbrance, or assert by legal action or otherwise any claim or right of setoff
against any Mortgage Loan documents or any funds collected on, or in connection
with, a Mortgage Loan or REO Property, except, however, that the Master Servicer
and the Special Servicer each shall be entitled to receive from any such funds
any amounts that are properly due and payable to the Master Servicer or the
Special Servicer, as the case may be, under this Agreement.
SECTION 8.10. SERVICING COMPENSATION.
(a) As compensation for its activities hereunder, the Master
Servicer shall be entitled to receive the Master Servicing Fee with respect to
each Mortgage Loan, including without limitation each Specially Serviced
Mortgage Loan and each REO Mortgage Loan. As to each Mortgage Loan, including
without limitation each Specially Serviced Mortgage Loan and each REO Mortgage
Loan, the Master Servicing Fee shall accrue on the related Stated Principal
Balance of such Mortgage Loan outstanding from time to time at the applicable
Master Servicing Fee Rate and shall be computed for the same period respecting
which any related interest payment due or deemed due on such Mortgage Loan is
computed. The Master Servicing Fee with respect to any Mortgage Loan or REO
Mortgage Loan shall cease to accrue if a Liquidation Event occurs in respect
thereof. The Master Servicing Fee shall be payable monthly, on a loan-by-loan
basis, from payments of interest on each Mortgage Loan, REO Income allocable as
interest on each REO Mortgage Loan and the interest portion of P&I Advances on
each Mortgage Loan, including without limitation each REO Mortgage Loan. The
Master Servicer shall be entitled to recover unpaid Master Servicing Fees in
respect of any Mortgage Loan, including without limitation each REO Mortgage
Loan, out of that portion of related Insurance Proceeds, Condemnation Proceeds,
Liquidation Proceeds, Repurchase Proceeds or payments of Substitution Shortfall
Amounts allocable as recoveries of interest, to the extent permitted by Section
5.2. The Master Servicer's right to receive the Master Servicing Fee may not be
transferred in whole or in part except in connection with the transfer of all of
the Master Servicer's responsibilities and obligations under this Agreement.
The Master Servicer shall be entitled to additional master servicing
compensation ("ADDITIONAL MASTER SERVICING COMPENSATION") in the form of:
(i) 50% of any modification fees and assumption fees and 100%
of any available similar or ancillary fees not otherwise addressed herein
and Penalty Charges collected on Mortgage Loans other than Specially
Serviced Mortgage Loans and REO Mortgage Loans, but only to the extent
actually paid by the related Mortgagor and to the extent that all amounts
then due and payable with respect to the related Mortgage Loan (including
Advance Interest) have been paid and, with respect to Penalty Charges
only, are not needed to pay Advance Interest with respect to any other
Mortgage Loan;
(ii) any Prepayment Interest Excesses collected on the
Mortgage Loans, including without limitation Specially Serviced Mortgage
Loans and REO Mortgage Loans, but only to the extent that the aggregate of
all such Prepayment Interest Excesses collected during each Collection
Period exceeds the Prepayment Interest Shortfalls incurred during such
Collection Period;
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(iii) any interest and other income earned on the investment
of funds in the Collection Account, but only to the extent not applied to
offset losses on other investments of funds in the Collection Account, and
(iv) any interest and other income earned on the investment of
funds in the Servicing Accounts maintained by the Master Servicer, but
only to the extent not required to be paid to Mortgagors under applicable
law or the terms of the respective Mortgage Loan documents.
(b) As compensation for its activities hereunder, the Special
Servicer shall be entitled to receive the Special Servicing Fee with respect to
each Specially Serviced Mortgage Loan and each REO Mortgage Loan. As to each
Specially Serviced Mortgage Loan and each REO Mortgage Loan, the Special
Servicing Fee shall accrue on the related Stated Principal Balance of such
Mortgage Loan outstanding from time to time at the Special Servicing Fee Rate
and shall be computed for the same period respecting which any related interest
payment due on such Specially Serviced Mortgage Loan or deemed to be due on such
REO Mortgage Loan is computed. The Special Servicing Fee with respect to each
Specially Serviced Mortgage Loan and each REO Mortgage Loan shall cease to
accrue if a Liquidation Event occurs in respect thereof. As to each Specially
Serviced Mortgage Loan and each REO Mortgage Loan, earned but unpaid Special
Servicing Fees shall be payable monthly out of [the same sources and at the same
time (but separate from) Master Servicing Fees payable to the Master Servicer in
respect of such Specially Serviced Mortgage Loans or REO Mortgage Loans].
As further compensation for its activities hereunder, the Special
Servicer shall be entitled to receive the Workout Fee with respect to each
Corrected Mortgage Loan. As to each Corrected Mortgage Loan, the Workout Fee
shall be payable from, and shall be calculated by application of the Workout Fee
Rate to, each collection of interest and principal received on such Mortgage
Loan for so long as it remains a Corrected Mortgage Loan. The Workout Fee with
respect to any Corrected Mortgage Loan will cease to be payable if a Servicing
Transfer Event occurs with respect thereto or if the related Mortgaged Property
becomes an REO Property, provided that a new Workout Fee will become payable if
and when such Mortgage Loan again becomes a Corrected Mortgage Loan. If the
Special Servicer is terminated other than for cause or resigns in accordance
with Section 8.24, it shall retain the right to receive any and all Workout Fees
payable in respect of Mortgage Loans that became Corrected Mortgage Loans during
the period that it acted as Special Servicer and were still such at the time of
such termination or resignation (and the successor Special Servicer shall not be
entitled to any portion of such Workout Fees), in each case until the Workout
Fee for any such loan ceases to be payable in accordance with the preceding
sentence.
As further compensation for its activities hereunder, the Special
Servicer shall also be entitled to receive a Liquidation Fee with respect to
each Specially Serviced Mortgage Loan or REO Property as to which it receives
any full or discounted payoff or any Liquidation Proceeds (other than in
connection with the purchase of any such Specially Serviced Mortgage Loan or REO
Property by any Person entitled to effect an optional termination of the Trust
pursuant to Section 10.01). The Liquidation Fee with respect to any such
Specially Serviced Mortgage Loan will not be payable if such Mortgage Loan
becomes a Corrected Mortgage Loan. Notwithstanding anything herein to the
contrary, no Liquidation Fee will be payable from, or based upon the receipt of,
Liquidation Proceeds collected as a result of any purchase of a Specially
Serviced Mortgage Loan or REO Property described in the parenthetical to the
first sentence of this paragraph.
The Special Servicer shall be entitled to additional special
servicing compensation ("ADDITIONAL SPECIAL SERVICING COMPENSATION") in the form
of 100% of any modification fees,
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assumption fees, ancillary fees not otherwise addressed herein and, to the
extent not otherwise applied to pay Advance Interest as provided herein, Penalty
Charges, collected on Specially Serviced Mortgage Loans and REO Mortgage Loans
and 50% of any modification fees and assumption fees collected on Mortgage Loans
other than Specially Serviced Mortgage Loans and REO Mortgage Loans.
(c) The Master Servicer and the Special Servicer shall each be
required to pay out of its own funds all overhead and general and administrative
expenses incurred by it in connection with its servicing activities hereunder
(including, without limitation, payment of any amount due and owing to any
Sub-Servicers retained by it and the premiums for any blanket policy obtained by
it insuring against hazard losses pursuant to Section 8.5(b)), if and to the
extent such expenses are not payable directly out of the Collection Account, and
neither the Master Servicer nor the Special Servicer, as the case may be, shall
be entitled to reimbursement except as expressly provided in this Agreement. In
the event that Rating Agency Confirmation is required in connection with any
exercise of rights by the Master Servicer or the Special Servicer, as
applicable, under any Mortgage Loan, the Master Servicer or Special Servicer, as
the case may be, shall use its reasonable efforts to cause the related Borrower
to pay any fee required by the applicable Rating Agency for such confirmation,
and if the Borrower does not pay such fee, then it shall be paid by the Master
Servicer as a Servicing Advance.
SECTION 8.11. MASTER SERVICER REPORTS; ACCOUNT STATEMENTS.
(a) The Master Servicer shall deliver to the Trustee, no later than
2:00 p.m. Eastern time on the Report Date, the Master Servicer Remittance Report
with respect to the related Distribution Date. The Special Servicer shall
provide all information relating to Specially Serviced Mortgage Loans and REO
Properties to permit the Master Servicer to satisfy its duties in this Section
8.11 on or before the date that is one Business Day after the Determination
Date.
(b) The Master Servicer shall deliver to the Trustee within 45 days
following each Master Servicer Remittance Date a statement setting forth the
status of the Collection Account as of the close of business on such Master
Servicer Remittance Date showing, for the period covered by such statement, the
aggregate of deposits of each type provided in Section 5.1 in, and the aggregate
of withdrawals of each type provided in Section 5.2 from, the Collection
Account.
SECTION 8.12. ANNUAL STATEMENT AS TO COMPLIANCE. The Master Servicer
and the Special Servicer shall each deliver to the Depositor, the Operating
Adviser (or if no Operating Adviser has been elected, the Majority
Certificateholder of the Controlling Class), the Rating Agencies and the Trustee
(and, in the case of the Special Servicer, to the Master Servicer) on or before
April 30 of each year, an Officer's Certificate stating, as to the signer
thereof, that (a) a review of the activities of the Master Servicer or the
Special Servicer, as the case may be, during the preceding calendar year or
portion thereof and of the performance of the Master Servicer or the Special
Servicer, as the case may be, under this Agreement has been made under such
officer's supervision and (b) to the best of such officer's knowledge, based on
such review, the Master Servicer or the Special Servicer, as the case may be,
has fulfilled in all material respects all its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and the
nature and status thereof. The Master Servicer and the Special Servicer shall
each forward to the Rating Agencies a copy of each such statement delivered by
it to the Depositor and the Trustee.
SECTION 8.13. ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING
REPORT. On or before April 30 of each year beginning April 30, 2000, the Master
Servicer at its expense shall cause a firm of Accountants to furnish a statement
to the Depositor, the Operating Adviser (or if no Operating
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Adviser has been elected, the Majority Certificateholder of the Controlling
Class) and the Trustee to the effect that (i) it has obtained a letter of
representation regarding certain matters from the management of the Master
Servicer, which includes an assertion that the Master Servicer has complied with
certain minimum mortgage loan servicing standards (to the extent applicable to
commercial and multifamily mortgage loans), identified in the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage Bankers
Association of America, with respect to the servicing of commercial and
multifamily mortgage loans during the most recently completed calendar year and
(ii) on the basis of an examination conducted by such firm in accordance with
standards established by the American Institute of Certified Public Accountants,
such representation is fairly stated in all material respects, subject to such
exceptions and other qualifications that may be appropriate. In rendering its
report such firm may rely, as to matters relating to the direct servicing of
commercial and multifamily mortgage loans by Sub-Servicers, upon comparable
reports of firms of independent certified public accountants rendered on the
basis of examinations conducted in accordance with the same standards (rendered
within one year of such report) with respect to those Sub-Servicers.
The Special Servicer will deliver to the Depositor, the Operating
Adviser (or if no Operating Adviser has been elected, the Majority
Certificateholder of the Controlling Class), the Trustee and the Master Servicer
an annual accountants' report only if, and in such form as may be, requested by
the Rating Agencies in the form set forth above.
The Master Servicer and the Special Servicer, to the extent
applicable, shall each, with 90 days' prior written notice, use reasonable
efforts to cause the applicable Accountants to cooperate with the Depositor in
conforming any reports delivered pursuant to this Section 8.13 to requirements
imposed by the Securities and Exchange Commission on the Depositor in connection
with the Securities and Exchange Commission's issuance of a no-action letter
relating to the Depositor's reporting requirements in respect of the Trust Fund
pursuant to the Exchange Act.
The Master Servicer and the Special Servicer shall each forward to
the Rating Agencies a copy of each statement delivered by it to the Depositor
and the Trustee pursuant to this Section 8.13.
SECTION 8.14. CERTAIN REPORTS REGARDING THE MORTGAGE LOANS AND THE
MORTGAGED PROPERTIES.
(a) On or before the Report Date in each month, the Master Servicer
shall deliver to the Trustee a report containing information regarding the
Mortgage Loans as of the end of the related Collection Period, which report will
contain substantially the categories of information regarding the Mortgage Loans
set forth in Appendix II to the Memorandum, will be delivered in a format
mutually acceptable to the Master Servicer and the Trustee and will be updated
within a reasonable period after the requisite underlying information is
available. The Master Servicer may maintain a site on the World Wide Web at
which the Master Servicer may make property level information will be available.
The Master Servicer will notify the Trustee, the Depositor and the Rating
Agencies if it elects to post information on such site.
(b) [reserved.]
(c) No later than 1:00 p.m. New York time on the Master Servicer
Remittance Date, the Master Servicer shall deliver or cause to be delivered to
the Trustee the following reports with respect to the Mortgage Loans (and, if
applicable, the related REO Properties), providing the required information as
of the Due Date: (i) a Comparative Financial Status Report, (ii) a Delinquent
Loan Status Report; (iii) an Historical Loss Estimate Report; (iv) an Historical
Loan Modification Report; (v) an REO
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Status Report; and (vi) CSSA Reports. Such reports shall be presented in writing
and on a computer readable medium reasonably acceptable to the Trustee. The
information that pertains to Specially Serviced Mortgage Loans and REO
Properties reflected in such reports shall be based solely upon the reports
delivered by the Special Servicer to the Master Servicer pursuant to Section
8.29. In the absence of manifest error, the Master Servicer shall be entitled to
conclusively rely upon, without investigation or inquiry, the information and
reports delivered to it by the Special Servicer and any Borrower, and the
Trustee shall be entitled to conclusively rely upon the Master Servicer's
reports and the Special Servicer's reports without any duty or obligation to
recompute, verify or recalculate any of the amounts and other information stated
therein. Any of such reports, the NOI Adjustment Worksheet and the reports
described in sub-section (a). (d), (f) and (g) of this Section 8.14 may include
any disclaimers that the Master Servicer deems appropriate.
(d) The Master Servicer shall deliver or cause to be delivered to
the Trustee the following materials, in each case to the extent that such
materials or the information on which they are based have been received by the
Master Servicer:
(i) At least annually by June 30th, with respect to each
Mortgage Loan (other than Credit Lease Loans) and REO Mortgage Loan, an
Operating Statement Analysis for the related Mortgaged Property or REO
Property as of the end of the preceding calendar year, together with
copies of the operating statements and rent rolls (but only to the extent
the related Mortgagor is required by the Mortgage to deliver, or otherwise
agrees to provide such information and, with respect to operating
statements and rent rolls for Specially Serviced Mortgage Loans and REO
Properties, only to the extent delivered by the Special Servicer) for the
related Mortgaged Property or REO Property as of the end of the preceding
fiscal year. The Master Servicer shall use its reasonable efforts to
obtain such annual operating statements and rent rolls with respect to
each of the Mortgage Loans other than Credit Lease Loans, Specially
Serviced Mortgage Loans or REO Mortgage Loans, which efforts shall include
(if such reports are required by the terms of the Mortgage Loans) a letter
sent to the related Mortgagor each quarter (followed up with telephone
calls) requesting such annual operating statements and rent rolls until
they are received to the extent such action is consistent with applicable
law and the terms of the Mortgage Loans. In the absence of manifest error,
the Master Servicer and the Special Servicer shall be entitled to rely
conclusively on all information provided by the Borrower and shall have no
liability arising directly or indirectly from the inaccuracy or
incompleteness of any information provided by the Borrower and shall have
no duty to verify the information provided by the Borrower, subject to its
compliance with the Servicing Standard.
(ii) Within thirty days after receipt by the Master Servicer
(or twenty days after receipt from the Special Servicer in the case of a
Specially Serviced Mortgage Loan or REO Property) of any annual operating
statements with respect to any Mortgaged Property (other than a Mortgaged
Property securing a Credit Lease Loan) or REO Property, an NOI Adjustment
Worksheet for such Mortgaged Property (with the annual operating
statements attached thereto as an exhibit).
The Master Servicer shall maintain one Operating Statement Analysis
report for each Mortgaged Property (other than a Mortgaged Property securing a
Credit Lease Loan) and REO Property (to the extent prepared by and received from
the Special Servicer in the case of any REO Property or any Mortgaged Property
constituting security for a Specially Serviced Mortgage Loan). The Operating
Statement Analysis report for each Mortgaged Property (other than any such
Mortgaged Property which is REO Property or constitutes security for a Specially
Serviced Mortgage Loan or a Credit Lease Loan) is to be updated by the Master
Servicer and such updated report delivered to the Trustee on the Master
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Servicer Remittance Date which is no earlier than thirty days after receipt by
the Master Servicer of updated operating statements for such Mortgaged Property.
The Master Servicer will use the "normalized" column from the NOI Adjustment
Worksheet to update the Operating Statement Analysis report and will use any
operating statements received with respect to any Mortgaged Property (other than
any such Mortgaged Property which is REO Property or constitutes security for a
Specially Serviced Mortgage Loan or a Credit Lease Loan) to update the Operating
Statement Analysis report for such Mortgaged Property, such updates to be
completed and copies thereof sent to the Trustee within thirty days after
receipt of the necessary information.
(e) No later than 1:00 p.m. New York time on the Master Servicer
Remittance Date, beginning in December 1998, the Master Servicer shall prepare
and deliver to the Trustee and the Special Servicer, a Watch List of all
Mortgage Loans that the Master Servicer has determined are in jeopardy of
becoming Specially Serviced Mortgage Loans. For this purpose, Mortgage Loans
that are in jeopardy of becoming Specially Serviced Mortgage Loans shall
include, without limitation: (i) Mortgage Loans having a current Debt Service
Coverage Ratio that is 80% or less of the trailing twelve-month Debt Service
Coverage Ratio as of the Cut-off Date or having a current trailing twelve-month
Debt Service Coverage Ratio that is less than 1.00x, (ii) Mortgage Loans as to
which any required inspection of the related Mortgaged Property conducted by the
Master Servicer indicates a problem that the Master Servicer determines can
reasonably be expected to materially adversely affect the cash flow generated by
such Mortgaged Property, (iii) Mortgage Loans which have come to the Master
Servicer's attention in the performance of its duties under this Agreement
(without any expansion of such duties by reason hereof) that (A) any tenant
occupying 25% or more of the space in the related Mortgaged Property has vacated
(without being replaced by a comparable tenant and lease) or been the subject of
bankruptcy or similar proceedings or (B) relate to a borrower or an affiliate
that is the subject of a bankruptcy or similar proceeding, (iv) Mortgage Loans
that are at least one full Collection Period delinquent in payment, and (v)
Mortgage Loans that are within 60 days of maturity. Any such Watch List may
include any disclaimers the Master Servicer deems appropriate.
The Special Servicer shall report to the Master Servicer any of the
foregoing events promptly upon the Special Servicer having knowledge of such
event. In addition, in connection with their servicing of the Mortgage Loans,
the Master Servicer and the Special Servicer shall provide to each other and to
the Trustee written notice of any event that comes to their knowledge with
respect to a Mortgage Loan or REO Property that the Master Servicer or the
Special Servicer, respectively, determines, in accordance with Servicing
Standards, would have a material adverse effect on such Mortgage Loan or REO
Property, which notice shall include an explanation as to the reason for such
material adverse effect.
(f) One Business Day after the Determination Date, the Special
Servicer shall deliver, or cause to be delivered, to the Master Servicer and,
upon the request of any of the Trustee, the Depositor or either Rating Agency,
to such requesting party, the following reports with respect to the Specially
Serviced Mortgage Loans (and, if applicable, the related REO Properties),
providing the required information as of the Due Date: (i) a Delinquent Loan
Status Report; (ii) an Historical Loss Estimate Report; (iii) an Historical Loan
Modification Report; (iv) an REO Status Report; (v) Comparative Financial Status
Reports with respect to all Specially Serviced Mortgage Loans; (vi) a Watch
List; and (vii) CSSA Reports, as defined. Such reports shall be presented in
writing and on a computer readable magnetic medium.
(g) The Special Servicer shall deliver or cause to be delivered to
the Master Servicer and, upon the request of any of the Trustee, the Depositor
or any Rating Agency, to such requesting
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party, the following materials, in each case to the extent that such materials
or the information on which they are based have been received by the Special
Servicer:
(i) Annually, on or before June 10 of each year, commencing
with June 10, 1998, with respect to each Specially Serviced Mortgage Loan
and REO Mortgage Loan, an Operating Statement Analysis for the related
Mortgaged Property or REO Property as of the end of the preceding calendar
year, together with copies of the operating statements and rent rolls for
the related Mortgaged Property or REO Property as of the end of the
preceding calendar year. The Special Servicer shall use its best
reasonable efforts in accordance with the Servicing Standard to obtain
such annual operating statements and rent rolls with respect to each
Mortgaged Property constituting security for a Specially Serviced Mortgage
Loan and each REO Property, which efforts shall include a letter sent to
the related Mortgagor or other appropriate party each quarter (followed up
with telephone calls) requesting such annual operating statements and rent
rolls until they are received.
(ii) Within 10 days of receipt by the Special Servicer of any
annual operating statements with respect to any Mortgaged Property
relating to a Specially Serviced Mortgage Loan, or at least six months of
operating information with respect to any REO Property, an NOI Adjustment
Worksheet for such Mortgaged Property or REO Property (with the annual
operating statements attached thereto as an exhibit).
The Special Servicer shall maintain one Operating Statement Analysis
report for each Mortgaged Property securing a Specially Serviced Mortgage Loan
and REO Property. The Operating Statement Analysis report for each Mortgaged
Property which constitutes security for a Specially Serviced Mortgage Loan or is
an REO Property is to be updated by the Special Servicer and such updated report
delivered to the Master Servicer within ten days after receipt by the Special
Servicer of updated operating statements for each such Mortgaged Property. The
Special Servicer will use the "normalized" column from the NOI Adjustment
Worksheet to update the Operating Statement Analysis report and will use any
operating statements received with respect to any Mortgaged Property which
constitutes security for a Specially Serviced Mortgage Loan or is an REO
Property to update the Operating Statement Analysis report for such Mortgaged
Property, such updates to be completed and copies thereof sent to the Master
Servicer within ten days after receipt of the necessary information.
(h) The Trustee shall be entitled to rely conclusively on and shall
not be responsible for the content or accuracy of any information provided to it
by the Master Servicer or the Special Servicer pursuant to this Agreement.
(i) The Trustee shall send copies of the reports received by it
pursuant to Sections 8.14(a) and (b) to the Depositor, Heller, the Holders of
the Privately Offered Certificates and each Rating Agency.
(j) All reports prepared by the Master Servicer and Special Servicer
pursuant to this Section 8.14 shall be prepared, to the extent applicable, in
the format recommended by CCSA.
SECTION 8.15. CERTAIN AVAILABLE INFORMATION AND RELATED RIGHTS OF
THE MASTER SERVICER AND THE SPECIAL SERVICER.
(a) Subject to the restrictions described below (and except to the
extent not permitted by law or under any of the Mortgage Loan documents), the
Master Servicer and the Special Servicer shall each also afford the Rating
Agencies, the Depositor, the Trustee, the Fiscal Agent, the Special Servicer,
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the Underwriters, and the Operating Adviser, and the Majority Certificateholder
of the Controlling Class upon reasonable notice and during normal business
hours, reasonable access to any and all additional relevant, non-proprietary and
non-attorney-client-privileged records and documentation in its possession or
under its control regarding the Mortgage Loans, REO Properties and all accounts,
insurance policies and other relevant matters relating to this Agreement, and
access to Servicing Officers of the Master Servicer or Special Servicing
Officers of the Special Servicer, as the case may be, responsible for its
obligations hereunder. Copies (or computer diskettes or other digital or
electronic copies of such information if reasonably available in lieu of paper
copies) of any and all of the foregoing items shall be made available by the
Master Servicer or the Special Servicer, as the case may be, upon request;
provided, however, that the Master Servicer and the Special Servicer shall each
be permitted to require payment by the requesting party (other than the
Depositor, the Trustee, the Underwriters or either Rating Agency) of a sum
sufficient to cover the reasonable expenses actually incurred by the Master
Servicer or the Special Servicer, as the case may be, of providing access or
copies (including electronic or digital copies) of any such information
requested in accordance with the preceding sentence.
(b) Nothing herein shall be deemed to require the Master Servicer or
Special Servicer to confirm, represent or warrant the accuracy of (or to be
liable or responsible for) any other Person's information or report, included in
any communication from the other (unless the Master Servicer and the Special
Servicer are the same Person) or from a Mortgagor. Neither the Master Servicer
nor the Special Servicer shall have any liability to the Depositor, the Trustee,
any Certificateholder, any Certificate Owner, the Underwriters, either Rating
Agency or any other Person to whom it delivers information pursuant to this
Section 8.15 or any other provision of this Agreement for federal, state or
other applicable securities law violations relating to the disclosure of such
information. In the event any Person brings any claims relating to or arising
from the foregoing against the Master Servicer, the Special Servicer, the
Trustee or the Fiscal Agent, the Trust (from amounts held in the Collection
Account from time to time) shall hold harmless and indemnify the Master
Servicer, the Special Servicer, the Trustee or the Fiscal Agent, as the case may
be, from any loss or expense (including attorneys' fees) relating to or arising
from such claims.
(c) The Master Servicer and the Special Servicer shall each produce
the reports required of it under this Agreement; provided, however, that neither
the Master Servicer nor the Special Servicer shall be required to produce any ad
hoc non-standard written reports with respect to the Mortgage Loans. In the
event the Master Servicer or the Special Servicer elects to provide such
reports, it may require the Person requesting such report to pay a reasonable
fee to cover the costs of the preparation thereof. Requests for any such report
shall be made, and any such report shall be disseminated, through the Trustee.
(d) In connection with providing access to or copies of the items
described in the subsections (a), (b) and/or (c) of this Section 8.15 or in
Section 8.16, the Master Servicer, the Special Servicer and the Trustee may each
require: (a) in the case of Certificate Owners, a written confirmation executed
by the requesting Person, in form reasonably satisfactory to the Master
Servicer, the Special Servicer or the Trustee, as the case may be, generally to
the effect that such Person is a beneficial holder of Certificates, is
requesting the information solely for use in evaluating such Person's investment
in the Certificates and will otherwise keep such information confidential; and
(b) in the case of Prospective Investors, a written confirmation executed by the
requesting Person, in form reasonably satisfactory to the Master Servicer, the
Special Servicer or the Trustee, as the case may be, generally to the effect
that such Person is a prospective purchaser of a Certificate or an interest
therein, is requesting the information solely for use in evaluating a possible
investment in Certificates and will otherwise keep such information
confidential.
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(e) The Master Servicer and the Special Servicer shall each provide
or cause to be provided to the OTS, the FDIC and any other federal or state
banking or insurance regulatory authority that may exercise authority over any
Certificateholder or Certificate Owner, access to any and all records and other
documentation regarding the Mortgage Loans and the Trust Fund within its control
that may be required by this Agreement or by applicable law. Such access shall
be afforded without charge but only upon reasonable prior written request and
during normal business hours at the offices of the Master Servicer or the
Special Servicer, as the case may be, designated by it.
(f) The Master Servicer and the Special Servicer shall each
cooperate in providing the Rating Agencies with such other pertinent information
relating to the Mortgage Loans as is or should be in their respective possession
as the Rating Agencies may reasonably request. Any Holder of a Privately Offered
Certificate may, upon request to the Trustee (which may be in the form of a
standing request for as long as such Holder remains a Holder of any such
Certificates), obtain a copy of any report or other information (to the extent
the Trustee has such report or other information in its possession) delivered to
the Rating Agencies under this Agreement.
SECTION 8.16. RULE 144A INFORMATION. For so long as any of the
Certificates are "restricted securities" within the meaning of Rule 144A under
the Securities Act, each of the Master Servicer and the Special Servicer agrees
to provide to the Trustee, which in turn shall provide to any Holder,
Certificate Owner or Prospective Investor of such Certificates, upon the request
of such Holder, Certificate Owner or Prospective Investor, subject to the other
provisions of this Section 8.16 and the provisions of subsections (b), (c) and
(d) of Section 8.15, any information prepared by or otherwise in the possession
or under the control of the Master Servicer or the Special Servicer, as the case
may be, that has not already been delivered to the Trustee and that is required
to be provided to such Holder, Certificate Owner or Prospective Investor to
satisfy the condition set forth in Rule 144A(d)(4) under the Securities Act,
including, without limitation, copies of the reports and information described
in subsection (a) of Section 8.15.
Any recipient of information provided pursuant to this Section 8.16
shall agree that such information shall not be disclosed or used for any purpose
other than the evaluation of an investment in the Certificates. Unless the
Master Servicer or the Special Servicer chooses to deliver the information
directly, the Trustee shall be responsible for the physical delivery of the
information requested pursuant to this Section 8.16. As a condition to the
Master Servicer or the Special Servicer making any report or information
available upon request to any Person other than one of the other parties hereto,
the Master Servicer or the Special Servicer, as the case may be, may require
that the recipient of such information acknowledge that the Master Servicer or
the Special Servicer, as the case may be, may contemporaneously provide such
information to the Depositor, the Trustee, the Underwriters and/or the
Certificateholders and Certificate Owners. The Master Servicer and the Special
Servicer will each be permitted to require payment of a sum by the requesting
party (other than the Rating Agencies, the Depositor, the Trustee or the
Underwriters) sufficient to cover the reasonable costs and expenses of making
such information available.
SECTION 8.17. INSPECTIONS; COLLECTION OF FINANCIAL STATEMENTS.
(a) The Master Servicer shall perform (or cause to be performed) a
physical inspection of each Mortgaged Property (other than (i) Mortgaged
Properties constituting REO Properties or collateral for Specially Serviced
Mortgaged Loans and (ii) Mortgaged Properties securing Credit Lease Loans) at
such times and in such manner as are consistent with the Servicing Standard, but
in any event at least once every two years (or, if the related Mortgage Loan has
a current balance of more than $2,000,000, at least once every year) provided
that the Master Servicer will have no obligation to inspect
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a Mortgaged Property inspected by the Special Servicer during such period. The
Master Servicer shall promptly prepare (or cause to be prepared) a written
report of each such inspection detailing the condition of the Mortgaged Property
and specifying the existence of (i) any vacancy in the Mortgaged Property
evident from such inspection that the Master Servicer deems material, (ii) any
sale, transfer or abandonment of the Mortgaged Property evident from such
inspection, (iii) any adverse change in the condition or value of the Mortgaged
Property evident from such inspection that the Master Servicer deems material,
or (iv) any waste committed on the Mortgaged Property evident from such
inspection. The Master Servicer shall upon request deliver to the Trustee, the
Special Servicer and the Depositor a copy of each such written report of the
related inspection, and the Trustee shall deliver to the Holders of the
Privately Offered Certificates a copy of each such written report within 15 days
of receipt of such report from the Master Servicer. Inspections of Mortgaged
Properties securing Credit Lease Loans shall be performed in accordance with
Section 8.35(f).
(b) If any Mortgage Loan becomes a Specially Serviced Mortgage Loan,
then as soon as practicable (and in any event within 90 days thereafter) the
Special Servicer shall perform (or cause to be performed) a physical inspection
of each Mortgaged Property constituting collateral for such Mortgage Loan
(unless such Mortgaged Property had been inspected within the prior three
months), and the Special Servicer shall thereafter inspect such Mortgaged
Property at such times and in such manner as are consistent with the Servicing
Standard (but in any event at least once per calendar year). The cost of such
inspections shall be a Servicing Advance. The Special Servicer shall promptly
prepare (or cause to be prepared) a written report of each such inspection
detailing the condition of the Mortgaged Property and specifying the existence
of (i) any vacancy in the Mortgaged Property evident from such inspection that
the Special Servicer deems material, (ii) any sale, transfer or abandonment of
the Mortgaged Property evident from such inspection, (iii) any adverse change in
the condition or value of the Mortgaged Property evident from such inspection
that the Special Servicer deems material, or (iv) any waste committed on the
Mortgaged Property evident from such inspection. The Special Servicer shall
deliver to the Master Servicer, the Trustee, the Holders of the Privately
Offered Certificates and the Depositor a copy of each such written report within
60 days of the related inspection.
(c) The Master Servicer (or, in the case of Specially Serviced
Mortgage Loans, the Special Servicer) shall make reasonable efforts to collect
promptly from each Mortgagor quarterly and annual operating statements and rent
rolls of the related Mortgaged Property (other than Mortgaged Properties
securing Credit Lease Loans), and financial statements of such Mortgagor, if
delivery of such items is required pursuant to the terms of the related
Mortgage. In addition, the Special Servicer shall use reasonable efforts to
obtain quarterly and annual operating statements and rent rolls with respect to
each REO Property. The Master Servicer and Special Servicer shall, upon request,
each deliver copies of the collected items to the other such party and the
Trustee, and the Trustee shall deliver copies of such items to the Depositor and
Holders of the Privately Offered Certificates upon request.
SECTION 8.18. MODIFICATIONS, WAIVERS, AMENDMENTS, EXTENSIONS AND
CONSENTS.
(a) Subject to the limitations of Section 12.4 hereof, the Special
Servicer and Master Servicer, as applicable, shall have the following powers:
(i) The Special Servicer in accordance with the Servicing
Standard, may agree to any modification, waiver, amendment or consent of
or relating to any non-Money Term of a Mortgage Loan that is not a
Specially Serviced Mortgage Loan so long as such amendment will not result
in an Adverse REMIC Event. The Special Servicer may extend the maturity
date of any Balloon Mortgage Loan that is not a Specially Serviced
Mortgage Loan to a date that is not more than 60 days following the
original Maturity Date and not later than two years prior to
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the Rated Final Distribution Date, if in the Special Servicer's sole
judgment exercised in good faith and in accordance with the Servicing
Standard (and evidenced by an Officer's Certificate), a default in the
payment of the Balloon Payment is reasonably foreseeable and such
extension is reasonably likely to produce a greater recovery on a net
present value basis than liquidation of such Mortgage Loan. The Special
Servicer shall process all such extensions and shall be entitled to (as
additional servicing compensation) 100% of any extension fees collected
from a Mortgagor with respect to any such extension.
The Master Servicer may modify or amend the terms of any
Mortgage Loan without the consent of the Special Servicer in order to (i)
cure any ambiguity therein or (ii) correct or supplement any provisions
therein which may be inconsistent with any other provisions therein or
correct any error, provided that such modification or amendment would not
cause an Adverse REMIC Event to occur. Other than as set forth above in
this Section 8.18(a)(i) the Master Servicer shall not agree to any
modification or amendment of a Mortgage Loan or any waiver or consent
(other than immaterial waivers and consents made in the ordinary course of
business).
(ii) The Special Servicer may require, in its discretion, as a
condition to granting any request by a Mortgagor for any consent,
modification, waiver or amendment, that such Mortgagor pay to the Special
Servicer a reasonable and customary modification fee to the extent
permitted by law (50% of which will be paid to the Master Servicer with
respect to any Mortgage Loan that is not a Specially Serviced Mortgage
Loan). The Special Servicer may charge the Mortgagor for any costs and
expenses (including attorneys' fees) incurred by the Special Servicer in
connection with any request for a modification, waiver or amendment. The
failure or inability of the Mortgagor to pay any such costs and expenses
shall not impair the right of the Special Servicer to cause such costs and
expenses, and interest thereon at the Advance Rate, to be paid or
reimbursed by the Trust as a Servicing Advance (to the extent not paid by
the Mortgagor).
(iii) Each of the Special Servicer and the Master Servicer, as
applicable, shall notify the Trustee of any modification, waiver or
amendment of any term of any Mortgage Loan permitted by it under this
Section and the date thereof, and shall deliver to the Trustee for deposit
in the related Mortgage File, an original counterpart of the agreement
relating to such modification, waiver or amendment, promptly following the
execution thereof except to the extent such documents have been submitted
to the applicable recording office, in which event the Special Servicer or
the Master Servicer, as applicable, shall promptly deliver copies of such
documents to the Trustee. The Trustee shall deliver copies of such
documents to the Holders of the Privately Offered Certificates within 15
days of receipt by the Trustee thereof.
(b) Subject to the limitation of Section 12.4 hereof, the Special
Servicer, in accordance with the Servicing Standard, shall have the following
additional powers:
(i) The Special Servicer may enter into a modification, waiver
or amendment (including, without limitation, the substitution or release
of collateral or the pledge of additional collateral) of the terms of a
Specially Serviced Mortgage Loan, including any modification, waiver or
amendment to (a) reduce the amounts owing under any Specially Serviced
Mortgage Loan by forgiving principal, accrued interest or any Prepayment
Premium, (b) reduce the amount of the Monthly Payment on any Specially
Serviced Mortgage Loan, including by way of a reduction in the related
Mortgage Rate, (c) forebear in the enforcement of any right granted under
any Mortgage Note or Mortgage relating to a Specially Serviced
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Mortgage Loan, (d) extend the Maturity Date of any Specially Serviced
Mortgage Loan and/or (e) accept a principal prepayment on any Specially
Serviced Mortgage Loan during any period during which voluntary Principal
Prepayments are prohibited, provided that (1) the related Mortgagor is in
default with respect to the Specially Serviced Mortgage Loan or, in the
judgment of the Special Servicer, such default is reasonably foreseeable,
(2) in the reasonable judgment of the Special Servicer such modification
would increase the recovery on the Mortgage Loan to Certificateholders on
a net present value basis (the relevant discounting of amounts that will
be distributable to Certificateholders to be performed at the related
Mortgage Rate) and (3) such modification, waiver or amendment would not
cause an Adverse REMIC Event to occur.
In no event shall the Special Servicer (i) extend the Maturity Date
of a Specially Serviced Mortgage Loan beyond a date that is two years prior to
the Final Rated Distribution Date; (ii) extend the Maturity Date of any
Specially Serviced Mortgage Loan at an interest rate below the then-prevailing
interest rate for comparable loans at the time of such modification as
determined by the Special Servicer (such limitation of extensions made at below
market rates shall not limit the ability of the Special Servicer to extend the
Maturity Date of any Specially Serviced Mortgage Loan at an interest rate at or
in excess of the prevailing rate for comparable loans at the time of such
modification); (iii) if the Specially Serviced Mortgage Loan is secured by a
ground lease, extend the Maturity Date of such Specially Serviced Mortgage Loan
beyond a date which is less than 10 years prior to the expiration of the term of
such ground lease; (iv) reduce the Mortgage Rate of a Specially Serviced
Mortgage Loan to a rate below the then-prevailing interest rate for comparable
loans at the time of such modification, as determined by the Special Servicer;
or (v) defer interest due on any Specially Serviced Mortgage Loan in excess of
10% of the Stated Principal Balance of such Specially Serviced Mortgage Loan or
defer the collection of interest on any Specially Serviced Mortgage Loan without
accruing interest on such deferred interest at a rate at least equal to the
Mortgage Rate of such Specially Serviced Mortgage Loan.
Notwithstanding the foregoing, if a Mortgage Loan is a Balloon Loan
that has failed to make the Balloon Payment at its scheduled maturity, and such
Balloon Loan is not a Specially Serviced Mortgage Loan (other than by reason of
failure to make the Balloon Payment) and has not been delinquent in the
preceding 12 months (other than with respect to the Balloon Payment), then in
addition to the other alternatives specified above, the Special Servicer may
make up to three one-year extensions at the existing Mortgage Rate for such
Mortgage Loan; provided that in no event shall any such extension extend beyond
the date that is two years prior to the Final Rated Distribution Date.
The determination of the Special Servicer contemplated by clause (2)
of the proviso to the first paragraph of this Section 8.18(b)(i) and clause (ii)
of the second paragraph of this Section 8.18(b)(i) shall be evidenced by an
Officer's Certificate to such effect delivered to the Trustee and the Master
Servicer and describing in reasonable detail the basis for the Special
Servicer's determination. The Special Servicer shall append to such Officer's
Certificate any information, including but not limited to income and expense
statements, rent rolls, property inspection reports and appraisals, that support
such determination.
(ii) In the event the Special Servicer intends to permit a
Mortgagor to substitute collateral for all or any portion of a Mortgaged
Property pursuant to Section 8.18(b)(i) or pledge additional collateral
for the Mortgage Loan pursuant to Section 8.18(b)(i), if the security
interest of the Trust in such collateral would be perfected by possession,
or if such collateral requires special care or protection, then prior to
agreeing to such substitution or addition of collateral, the Special
Servicer shall make arrangements for such possession, care or protection,
and prior to agreeing to such substitution or addition of collateral (or
such arrangement for possession, care or protection) shall obtain the
prior written consent of the
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Trustee with respect thereto (which consent shall not be unreasonably
withheld, delayed or conditioned); provided, however, that any such
substitution or addition of collateral shall require Rating Agency
Confirmation; provided further, however, that the Trustee shall not be
required (but has the option) to consent to any substitution or addition
of collateral or to hold any such collateral which will require the
Trustee to undertake any additional duties or obligations or incur any
additional expense.
(iii) The Special Servicer will promptly deliver to the Master
Servicer, the Operating Adviser (or if no Operating Adviser has been
elected, the Majority Certificateholder of the Controlling Class), the
Rating Agencies and the Trustee a notice, specifying any such
modifications, waivers or amendments, such notice identifying the affected
Specially Serviced Mortgage Loan. Such notice shall be delivered to the
Trustee and shall set forth the reasons for such waiver, modification, or
amendment (including, but not limited to, information such as related
income and expense statements, rent rolls, occupancy status, property
inspections, and an internal or external appraisal performed in accordance
with MAI standards and methodologies (and, if done externally, the cost of
such appraisal shall be recoverable as a Servicing Advance subject to the
provisions of Section 4.2 hereof)). The Special Servicer shall also
deliver to the Trustee (or the Custodian), for deposit in the related
Mortgage File, an original counterpart of the agreement relating to such
modification, waiver or amendment promptly following the execution
thereof.
(iv) No fee described in this Section shall be collected by
the Special Servicer from the Mortgagor (or on behalf of the Mortgagor) in
conjunction with any consent or any modification, waiver or amendment of
the Mortgage Loan if the collection of such fee would cause such consent,
modification, waiver or amendment to be a "significant modification" of
the Mortgage Note within the meaning of Treasury Regulation ss.
1.860G-2(b). Subject to the foregoing, the Special Servicer shall use its
reasonable efforts, to collect any modification fees and other expenses
connected with a permitted modification of a Mortgage Loan from the
Mortgagor. The inability of the Mortgagor to pay any costs and expenses of
a proposed modification shall not impair the right of the Special
Servicer, the Master Servicer or the Trustee to be reimbursed by the Trust
for such expenses (including any cost and expense associated with the
Opinion of Counsel referred to in this Section).
(v) The Special Servicer shall cooperate with the Master
Servicer (as provided in Section 8.6) in connection with assignments and
assumptions of Mortgage Loans that are not Specially Serviced Mortgage
Loans.
(vi) Notwithstanding anything herein to the contrary, the
Special Servicer shall not be permitted to take or refrain from taking any
action pursuant to instructions from the Operating Adviser that would
cause it to violate any term or provision of this Agreement, including the
REMIC Provisions and the Servicing Standard.
(c) The Master Servicer or Special Servicer shall be permitted, in
its discretion, to waive all or any accrued Excess Interest if, prior to the
related maturity date, the related borrower has requested the right to prepay
the Mortgage Loan in full together with all payments required by the Mortgage
Loan in connection with such prepayment except for all or a portion of accrued
Excess Interest, provided that the Master Servicer or Special Servicer, as
applicable, determines that (i) in the absence of the waiver of such Excess
Interest, there is a reasonable likelihood that the Mortgage Loan will not be
paid in full on the related Maturity Date and (ii) waiver of the right to such
accrued Excess Interest is reasonably likely to produce a greater payment in the
aggregate to Certficateholders on a
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present value basis than a refusal to waive the right to such Excess Interest.
Any such waiver shall not be effective until such prepayment is tendered.
SECTION 8.19. TITLE TO REO PROPERTY.
(a) If title to any REO Property is acquired, the deed or
certificate of sale shall be issued in the name of the Trustee on behalf of the
Certificateholders. The Special Servicer, on behalf of the Trust Fund, shall in
accordance with Section 8.31 attempt to sell any REO Property for cash by the
close of the third taxable year of the REMIC following the taxable year in which
the Trust Fund acquires ownership of such REO Property for purposes of Section
860G(a)(8) of the Code (such date, the "REO SALE DEADLINE"), unless the Special
Servicer either (i) applies for, more than 60 days prior to the REO Sale
Deadline, and is subsequently granted an extension of time (an "REO EXTENSION")
by the Internal Revenue Service to sell such REO Property, or (ii) obtains for
the Trustee an Opinion of Counsel, addressed to the Trustee and the Special
Servicer, to the effect that the holding by the Trust Fund of such REO Property
subsequent to the REO Sale Deadline will not result in the imposition of taxes
on "prohibited transactions" of REMIC I, REMIC II or REMIC III as defined in
Section 860F of the Code or cause REMIC I, REMIC II or REMIC III to fail to
qualify as a REMIC at any time that any Certificates are outstanding. If the
Special Servicer is granted the REO Extension contemplated by clause (i) of the
immediately preceding sentence or obtains the Opinion of Counsel contemplated by
clause (ii) of the immediately preceding sentence, the Special Servicer shall
attempt to sell such REO Property within such period beyond the REO Sale
Deadline as is permitted by such REO Extension or is contemplated by such
Opinion of Counsel, as the case may be. Any expense incurred by the Special
Servicer in connection with its being granted the REO Extension contemplated by
clause (i) of the second preceding sentence or its obtaining the Opinion of
Counsel contemplated by clause (ii) of the second preceding sentence, shall be
an expense of the Trust Fund payable out of the Collection Account pursuant to
Section 5.2.
(b) The Special Servicer shall deposit, or cause to be deposited, in
the Collection Account, or shall deliver to the Master Servicer (which shall
deposit such amounts into the Collection Account), upon receipt, all REO Income
(net of the fees of any property manager and net of any expenses payable
therefrom), Insurance Proceeds, Condemnation Proceeds and Liquidation Proceeds
received in respect of an REO Property, subject to withdrawal by the Master
Servicer pursuant to Section 5.2.
SECTION 8.20. MANAGEMENT OF REO PROPERTY.
(a) Prior to the acquisition of title to any Mortgaged Property
securing a defaulted Mortgage Loan, the Special Servicer shall review the
operation of such Mortgaged Property and determine the nature of the income that
would be derived from such property if it were acquired by the Trust. If the
Special Servicer determines from such review, in its good faith and reasonable
judgment, that:
(i) none of the income from Directly Operating such Mortgaged
Property would be subject to tax as "net income from foreclosure property"
within the meaning of the REMIC Provisions or would be subject to the tax
imposed on "prohibited transactions" under Section 860F of the Code
(either such tax referred to herein as an "REO TAX"), then such Mortgaged
Property may be Directly Operated by the Special Servicer as REO Property;
(ii) Directly Operating such Mortgaged Property as REO
Property could result in income from such Mortgaged Property that would be
subject to an REO Tax, but that a lease of such Mortgaged Property to
another party to operate such Mortgaged Property, or the
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performance of some services by an Independent Contractor with respect to
such Mortgaged Property, or another method of operating such Mortgaged
Property would not result in income subject to an REO Tax, then the
Special Servicer may (provided that, in the good faith and reasonable
judgment of the Special Servicer, it is commercially feasible) acquire
such Mortgaged Property as REO Property and so lease or operate such REO
Property; or
(iii) Directly Operating such Mortgaged Property as REO
Property could result in income subject to an REO Tax and, in the good
faith and reasonable judgment of the Special Servicer, that no
commercially feasible means exists to operate such Mortgaged Property as
REO Property without the Trust incurring or possibly incurring an REO Tax
on income from such Mortgaged Property, then the Special Servicer shall
deliver to the Trustee, in writing, a proposed plan (the "PROPOSED PLAN")
to manage such Mortgaged Property as REO Property. Such plan shall include
potential sources of income, and to the extent commercially feasible,
estimates of the amount of income from each such source. Within a
reasonable period of time after receipt of such plan, the Trustee shall
consult with the Special Servicer and shall advise the Special Servicer of
the Trust's federal income tax reporting position with respect to the
various sources of income that the Trust would derive under the Proposed
Plan. In addition, the Trustee shall (to the maximum extent possible)
advise the Special Servicer of the estimated amount of taxes that the
Trust would be required to pay with respect to each such source of income.
After receiving the information described in the two preceding sentences
from the Trustee, the Special Servicer shall either (A) implement the
Proposed Plan (after acquiring the respective Mortgaged Property as REO
Property) or (B) manage and operate such REO Property in a manner that
would not result in the imposition of an REO Tax on the income derived
from such REO Property.
The Special Servicer's decision as to how each REO Property shall be
managed and operated shall in any event be based on the good faith and
reasonable judgment of the Special Servicer, consistent with the Servicing
Standard, as to which means would (to the extent commercially feasible) maximize
the net after-tax REO Income received by the Trust with respect to such REO
Property without materially and adversely affecting the Special Servicer's
ability to sell such REO Property in accordance with this Agreement. Both the
Special Servicer and the Trustee may consult with counsel knowledgeable in such
matters at the expense of the Trust Fund in connection with determinations
required under this Section 8.20(a). Neither the Special Servicer nor the
Trustee shall be liable to the Certificateholders, the Trust, the other parties
hereto or each other for errors in judgment made in good faith in the reasonable
exercise of their discretion while performing their respective responsibilities
under this Section 8.20(a) or, to the extent it relates to federal income tax
consequences for the Trust, Section 8.20(b) below. Nothing in this Section
8.20(a) is intended to prevent the sale of a Defaulted Mortgage Loan or REO
Property pursuant to the terms and subject to the conditions of Section 8.31.
(b) If title to any REO Property is acquired, the Special Servicer
or an Independent Contractor chosen by the Special Servicer shall manage,
conserve, protect and operate such REO Property for the benefit of the
Certificateholders solely for the purpose of its prompt disposition and sale in
a manner that does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by the Trust of any "income from non-permitted assets"
within the meaning of Section 860F(a)(2)(B) of the Code or result in an Adverse
REMIC Event. Except as otherwise expressly provided herein, the Special Servicer
shall not enter into any lease, contract or other agreement that causes REMIC I
to receive, and (unless required to do so under any lease, contact or agreement
to which the Special Servicer or the Trust may become a party or a successor to
a party due to a foreclosure, deed-in-lieu of foreclosure or other similar
exercise of a creditor's rights or remedies with respect to a Mortgage Loan)
shall not cause or allow REMIC I to
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receive, any "net income from foreclosure property" that is subject to taxation
under the REMIC Provisions. Subject to the foregoing, however, the Special
Servicer shall have full power and authority to do any and all things in
connection therewith as are in the best interests of and for the benefit of the
Certificateholders in accordance with the Servicing Standard (as determined by
the Special Servicer in its good faith and reasonable judgment) and, consistent
therewith, shall direct the Master Servicer to withdraw from the Collection
Account, to the extent of amounts on deposit therein with respect to each REO
Property, and deliver to the Special Servicer (for appropriate application),
funds necessary for the proper operation, management and maintenance of such REO
Property, including, without limitation:
(i) all insurance premiums due and payable in respect of such
REO Property;
(ii) all real estate taxes and assessments in respect of such
REO Property that may result in the imposition of a lien thereon;
(iii) any ground rents in respect of such REO Property; and
(iv) all costs and expenses necessary to maintain such REO
Property.
To the extent that amounts on deposit in the Collection Account in respect of
any REO Property are insufficient for the purposes set forth in clauses (i) -
(iv) above with respect to such REO Property, the Master Servicer (at the
direction of the Special Servicer) shall advance from its own funds such amount
as is necessary for such purposes unless such advances would, if made,
constitute Nonrecoverable Advances; provided, however, that the Master Servicer
(at the direction of the Special Servicer) shall make any such Servicing Advance
if it is a necessary fee or expense incurred in connection with the defense or
prosecution of legal proceedings and such advance shall be deemed to constitute
a recoverable Servicing Advance.
(c) The Special Servicer may contract with any Independent
Contractor for the operation and management of any REO Property, provided that:
(i) The terms and conditions of any such contract may not be
inconsistent herewith and shall reflect an agreement reached at arm's
length;
(ii) the fees of such Independent Contractor (which shall be
an expense of the Trust, payable out of related REO Income) shall be
reasonable and customary in light of the nature and locality of the REO
Property;
(iii) any such contract shall require, or shall be
administered to require, that the Independent Contractor (A) pay all costs
and expenses incurred in connection with the operation and management of
such REO Property, including, without limitation, those listed in
subsection (b) of this Section 8.20 and (B) remit all related REO Income
collected (net of its fees and such costs and expenses) to the Special
Servicer upon receipt;
(iv) none of the provisions of this Section 8.20(c) relating
to any such contract or to actions taken through any such Independent
Contractor shall be deemed to relieve the Special Servicer of any of its
duties and obligations hereunder with respect to the operation and
management of any such REO Property; and
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(v) the Special Servicer shall be obligated with respect
thereto to the same extent as if it alone were performing all duties and
obligations in connection with the operation and management of such REO
Property.
The Special Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Special Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification.
SECTION 8.21. ADDITIONAL OBLIGATIONS OF THE MASTER SERVICER.
(a) The Master Servicer and the Special Servicer shall each deliver
to the other and to the Trustee (for inclusion in the Mortgage File) copies of
all Appraisals, environmental reports and engineering reports (or, in each case,
updates thereof) obtained with respect to any Mortgaged Property or REO
Property.
(b) The Master Servicer shall deliver to the Trustee for deposit in
the Distribution Account on each P&I Advance Date, without any right of
reimbursement therefor, an amount equal to the lesser of (i) the excess, if any,
of all Prepayment Interest Shortfalls over all Prepayment Interest Excesses, in
each case resulting from Principal Prepayments received in respect of the
Mortgage Pool during the most recently ended Collection Period, and (ii) that
portion of the aggregate Master Servicing Fees received by the Master Servicer
during such Collection Period calculated in respect of all of the Mortgage Loans
at a rate of 0.02% per annum.
SECTION 8.22. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
MASTER SERVICER AND THE SPECIAL SERVICER.
(a) GMAC Commercial Mortgage Corporation ("GMACCM") in its
capacity as the Master Servicer and Special Servicer, hereby represents
and warrants to the Trustee, for its own benefit and the benefit of the
Certificateholders, and to the Depositor, as of the Closing Date, that:
(i) GMACCM is a corporation, duly organized, validly existing
and in good standing under the laws of the State of California, and GMACCM
is in compliance with the laws of each State in which any Mortgaged
Property is located to the extent necessary to perform its obligations
under this Agreement.
(ii) The execution and delivery of this Agreement by GMACCM,
and the performance and compliance with the terms of this Agreement by
GMACCM, will not violate GMACCM's organizational documents or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the breach of any material
agreement or other instrument to which it is a party or which is
applicable to it or any of its assets.
(iii) GMACCM has the full power and authority to enter into
and consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement, and
has duly executed and delivered this Agreement.
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(iv) This Agreement, assuming due authorization, execution and
delivery by the other parties hereto, constitutes a valid, legal and
binding obligation of GMACCM, enforceable against GMACCM in accordance
with the terms hereof, subject to (A) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
creditors' rights generally, and (B) general principles of equity,
regardless of whether such enforcement is considered in a proceeding in
equity or at law.
(v) GMACCM is not in violation of, and its execution and
delivery of this Agreement and its performance and compliance with the
terms of this Agreement will not constitute a violation of, any law, order
or decree of any court or arbiter, or any order, regulation or demand of
any federal, state or local governmental or regulatory authority, which
violation, in GMACCM's good faith and reasonable judgment, is likely to
affect materially and adversely either the ability of GMACCM to perform
its obligations under this Agreement or the financial condition of GMACCM.
(vi) No litigation is pending or, to the best of GMACCM's
knowledge, threatened against GMACCM the outcome of which, in GMACCM's
good faith and reasonable judgment, could reasonably be expected to
prohibit GMACCM from entering into this Agreement or materially and
adversely affect the ability of GMACCM to perform its obligations under
this Agreement.
(vii) GMACCM has errors and omissions insurance coverage which
is in full force and effect and complies with the requirements of Section
8.5 hereof.
(viii) No consent, approval, authorization or order,
registration or filing with or notice to any governmental authority or
court is required, under federal or state law, for the execution, delivery
and performance of or compliance by GMACCM with this Agreement, or the
consummation by GMACCM with this Agreement, or the consummation by GMACCM
of any transaction contemplated hereby, other than (1) such consents,
approvals, authorizations, qualifications, registrations, filings, or
notices as have been obtained or made and (2) where the lack of such
consent, approval, authorization, qualification, registration, filing or
notice would not have a material adverse effect on the performance by
GMACCM under this Agreement.
(ix) It is understood that the representations and warranties
set forth in this Section 8.22(a) shall survive the execution and delivery
of this Agreement.
(x) Upon discovery by any of the parties hereto of a breach of
any of the foregoing representations and warranties that materially and
adversely affects the interests of the Certificateholders or any party
hereto, the party discovering such breach shall give prompt written notice
to each of the other parties hereto.
(xi) Any successor Master Servicer shall be deemed to have
made, as of the date of its succession, each of the representations set
forth in Section 8.22(a)(i), subject to such appropriate modifications to
the representation and warranty set forth in Section 8.22(a)(i)(A) to
accurately reflect such successor's jurisdiction of organization and
whether it is a corporation, partnership, bank, association or other type
of organization.
(xii) The GMACCM covenants that by August 31, 1999, any
custom-made software or hardware designated or purchased or licensed by
GMACCM and used by GMACCM in the course of the operation or management of,
or the compiling, reporting or generation of data
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required by this Agreement will not contain any deficiency (x) in the
ability of such software or hardware to identify correctly or perform
calculations or other processing with respect to dates after December 31,
1999 or (y) that would cause such software or hardware to be fit no longer
for that purpose for which it was intended by reason of the changing of
the date from 1999 to 2000.
SECTION 8.23. MERGER OR CONSOLIDATION. Any Person into which the
Master Servicer or the Special Servicer may be merged or consolidated or to
which the Master Servicer or the Special Servicer has transferred all or
substantially all of its assets, or any Person resulting from any merger,
conversion, other change in form or consolidation to which the Master Servicer
or the Special Servicer shall be a party, or any Person succeeding to the
business of the Master Servicer or the Special Servicer, shall be the successor
of the Master Servicer or the Special Servicer, as the case may be, hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; provided, that Rating Agency Confirmation shall have
been obtained with respect to such merger, consolidation, or succession.
SECTION 8.24. RESIGNATION OF MASTER SERVICER OR SPECIAL SERVICER.
(a) Except as otherwise provided in Section 8.24(b) hereof, neither
the Master Servicer nor the Special Servicer shall resign from the obligations
and duties hereby imposed on it, unless there is a determination that its duties
hereunder are no longer permissible under applicable law or are in material
conflict by reason of applicable law with any other activities carried on by it
(the other activities so causing such conflict being of a type and nature
carried on by it at the date of this Agreement). Any such determination
permitting the resignation of the Master Servicer or the Special Servicer shall
be evidenced by an Opinion of Counsel to such effect delivered to the Trustee.
No such resignation shall become effective until a successor servicer designated
by the Trustee, with the consent of the Depositor, shall have assumed the Master
Servicer's or Special Servicer's, as the case may be, responsibilities and
obligations under this Agreement and Rating Agency Confirmation shall have been
obtained. Notice of such resignation shall be given promptly by the Master
Servicer or the Special Servicer, as the case may be, to the Trustee.
(b) The Master Servicer and the Special Servicer may each resign
from the obligations and duties imposed on it, upon 30 days notice to the
Trustee, provided that (i) a successor servicer (x) is available, (y) has assets
of at least $15,000,000 and (z) is willing to assume the obligations,
responsibilities, and covenants to be performed hereunder by the resigning party
on substantially the same terms and conditions, and for not more than equivalent
compensation, to that herein provided; (ii) the resigning party bears all costs
associated with its resignation and the transfer of servicing; and (iii) Rating
Agency Confirmation is obtained with respect to such servicing transfer, as
evidenced by a letter delivered to the Trustee by each Rating Agency.
SECTION 8.25. ASSIGNMENT OR DELEGATION OF DUTIES BY MASTER SERVICER
OR THE SPECIAL SERVICER. The Master Servicer and the Special Servicer shall each
have the right without the prior written consent of the Trustee to assign and
delegate all of its duties hereunder; provided, however, that (i) the Master
Servicer or the Special Servicer, as the case may be, gives the Depositor and
the Trustee notice of such assignment and delegation; (ii) such purchaser or
transferee accepting such assignment and delegation executes and delivers to the
Depositor and the Trustee an agreement accepting such assignment, which contains
an assumption by such Person of the rights, powers, duties, responsibilities,
obligations and liabilities of the Master Servicer or the Special Servicer, as
the case may be, with like effect as if originally named as a party to this
Agreement; (iii) a Rating Agency Confirmation shall have been obtained with
respect to such assignment and delegation; and (iv) the
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assignment and delegation is reasonably satisfactory to the Trustee and the
Depositor. In the case of any such assignment and delegation in accordance with
the requirements of this Section, the Master Servicer or the Special Servicer,
as the case may be, shall be released from its obligations under this Agreement,
except that the Master Servicer or the Special Servicer, as the case may be,
shall remain liable for all liabilities and obligations incurred by it as the
Master Servicer or the Special Servicer, as the case may be, hereunder prior to
the satisfaction of the conditions to such assignment set forth in the preceding
sentence. Notwithstanding the above, each of the Master Servicer and the Special
Servicer may appoint Sub-Servicers in accordance with Section 8.4 hereof,
provided that the Master Servicer or the Special Servicer remains fully liable
for their actions, agents or independent contractors appointed or retained to
perform select duties thereof.
SECTION 8.26. LIMITATION ON LIABILITY OF MASTER SERVICER, SPECIAL
SERVICER AND OTHERS.
(a) None of the Master Servicer, the Special Servicer or any of
their respective directors, officers, employees or agents shall be under any
liability to the holders of the Certificates, the Trust or any other party for
any action taken or for refraining from the taking of any action in good faith
or for errors in reasonable judgment; provided that this provision shall not
protect the Master Servicer, the Special Servicer or any such Person against any
breach of a representation, warranty or covenant contained herein or any
liability that would otherwise be imposed by reason of willful misfeasance, bad
faith or negligence in its performance of duties under this Agreement or by
reason of negligent disregard of obligations and duties hereunder. The Master
Servicer, the Special Servicer and any director, officer, employee or agent of
the Master Servicer or the Special Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. Neither the Master Servicer nor the
Special Servicer shall be under any obligation to appear in, prosecute or defend
any legal action that is not incidental to its duties under this Agreement;
provided that the Master Servicer and the Special Servicer each may in its sole
discretion undertake any such action that it may reasonably deem necessary or
desirable in order to protect the interests of the Certificateholders and the
Trustee in the Mortgage Loans for which it is responsible hereunder or otherwise
under this Agreement. In such event, all legal expenses and costs of such action
shall be expenses and costs of the Trust, and the Master Servicer or the Special
Servicer, as applicable, shall be entitled to be reimbursed therefor as
Servicing Advances as provided by Section 5.2.
(b) In addition, neither the Master Servicer nor the Special
Servicer shall have any liability with respect to, and each shall be entitled to
conclusively rely as to the truth of the statements made and the correctness of
the opinions expressed therein on, any certificates or opinions furnished to the
Master Servicer or the Special Servicer, as the case may be, and conforming to
the requirements of this Agreement. Subject to the Servicing Standard, the
Master and the Special Servicer each shall have the right to rely on information
provided to it by the other (unless the Master Servicer and the Special Servicer
are the same party) and by the Mortgagors, and will have no duty to investigate
or verify the accuracy thereof.
(c) Neither the Master Servicer nor the Special Servicer shall be
obligated to incur any liabilities, costs, charges, fees or other expenses that
relate to or arise from any breach of any representation, warranty or covenant
made by the Depositor, the Fiscal Agent or Trustee in this Agreement.
SECTION 8.27. INDEMNIFICATION; THIRD-PARTY CLAIMS.
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(a) The Master Servicer, the Special Servicer and each of their
respective directors, officers, employees and agents shall be indemnified by the
Trust and held harmless against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments and any other costs,
liabilities, fees and expenses incurred in connection with any legal action
relating to this Agreement, the Certificates or any asset of the Trust Fund,
other than any loss, liability or expense: (i) specifically required to be borne
by such Person pursuant to the terms hereof; (ii) that constitutes a Servicing
Advance (and is otherwise specifically reimbursable hereunder); (iii) that was
incurred in connection with claims against such party resulting from (A) any
breach of a representation, warranty or covenant made herein by such party, or
(B) willful misfeasance, bad faith or negligence in the performance of
obligations or duties hereunder by such party, or from reckless disregard of
such obligations or duties, or (iv) imposed by any taxing authority if such
loss, liability or expense is not specifically reimbursable pursuant to the
terms of this Agreement. Each of the Master Servicer and the Special Servicer
shall promptly notify the Trustee if a claim is made by a third party with
respect to this Agreement, the Certificates or any asset of the Trust Fund
entitling the Master Servicer or the Special Servicer, as the case may be, to
indemnification hereunder, whereupon the Trustee, on behalf of the Trust, shall
assume the defense of any such claim (with counsel reasonably satisfactory to
the Master Servicer or the Special Servicer, as applicable) and pay out of the
Collection Account all expenses in connection therewith, including counsel fees,
and promptly pay, discharge and satisfy out of the Collection Account any
judgment or decree that may be entered against it or them in respect of such
claim. Any failure to so notify the Trustee shall not affect any rights the
Master Servicer or the Special Servicer may have to indemnification under this
Agreement or otherwise, unless the Trust's defense of such claim is prejudiced
thereby and the Trustee delivers a certification explaining the prejudice. The
Trustee or the Master Servicer shall promptly make from the Collection Account
any payments certified by the Master Servicer or the Special Servicer to the
Trustee as required to be made to the Master Servicer or the Special Servicer,
as the case may be, pursuant to this Section 8.27(a). The indemnification
provided herein shall survive the resignation or termination of the Master
Servicer or the Special Servicer.
(b) The Master Servicer agrees to indemnify the Trust, the Trustee,
the Fiscal Agent, the Special Servicer (if different than the Master Servicer),
the Depositor, and any director, officer, employee or agent thereof, and hold
them harmless against any and all claims, losses, penalties, fines, forfeitures,
legal fees and related costs, judgments and any other costs, liabilities, fees
and expenses that any of them may sustain arising from or as a result of the
willful misfeasance, bad faith or negligence in the performance of any of the
Master Servicer's duties hereunder or by reason of reckless disregard of the
Master Servicer's obligations and duties hereunder (unless such claim, loss,
penalty, fine, forfeiture, legal fee and related cost or judgment results from
the willful misfeasance, bad faith or negligence of such indemnified party), and
if in any such situation the Master Servicer is replaced, the parties hereto
agree that the amount of such claims, losses, penalties, fines, forfeitures,
legal fees and related costs, judgments and other costs, liabilities, fees and
expenses shall at least equal the incremental costs, if any, of retaining a
successor Master Servicer. Each of the Trustee, the Depositor, the Special
Servicer (if different than the Master Servicer), and the Fiscal Agent shall
immediately notify the Master Servicer if a claim is made by a third party with
respect to this Agreement, the Certificates or any asset of the Trust Fund
entitling the Trust, the Trustee, the Depositor, the Special Servicer or the
Fiscal Agent, as the case may be, to indemnification hereunder, whereupon the
Master Servicer shall assume the defense of any such claim (with counsel
reasonably satisfactory to the Trustee, the Depositor, the Special Servicer, or
the Fiscal Agent, as applicable) and pay all expenses in connection therewith,
including counsel fees, and promptly pay, discharge and satisfy any judgment or
decree that may be entered against it or them in respect of such claim. Any
failure to so notify the Master Servicer shall not affect any rights the Trust,
the Trustee, the Depositor, Special Servicer, or the Fiscal Agent may have to
indemnification under this Agreement or otherwise, unless the Master Servicer's
defense of such claim is materially prejudiced thereby and the Master Servicer
delivers a certification explaining the prejudice. The indemnification
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provided herein shall survive the termination of this Agreement and the
resignation or termination of the Master Servicer, the Special Servicer, the
Trustee and the Fiscal Agent.
(c) The Special Servicer agrees to indemnify the Trust, the Trustee,
the Fiscal Agent, the Master Servicer (if different than the Special Servicer),
the Depositor, and any director, officer, employee or agent thereof, and hold
them harmless against any and all claims, losses, penalties, fines, forfeitures,
legal fees and related costs, judgments and any other costs, liabilities, fees
and expenses that any of them may sustain arising from or as a result of the
willful misfeasance, bad faith or negligence in the performance of any of the
Special Servicer's duties hereunder or by reason of reckless disregard of the
Special Servicer's obligations and duties hereunder by the Special Servicer
(unless such claim, loss, penalty, fine, forfeiture, legal fee and related cost
or judgment results from the willful misfeasance, bad faith or negligence of
such indemnified party). Each of the Trustee, the Fiscal Agent, the Master
Servicer (if different than the Special Servicer) and the Depositor shall
immediately notify the Special Servicer if a claim is made by a third party with
respect to this Agreement, the Certificates or any asset of the Trust Fund
entitling the Trust or the Trustee, the Fiscal Agent, the Master Servicer or the
Depositor, as the case may be, to indemnification hereunder, whereupon the
Special Servicer shall assume the defense of any such claim (with counsel
reasonably satisfactory to the Trustee, the Fiscal Agent, the Master Servicer or
the Depositor, as applicable) and pay all expenses in connection therewith,
including counsel fees, and promptly pay, discharge and satisfy any judgment or
decree that may be entered against it or them in respect of such claim. Any
failure to so notify the Special Servicer shall not affect any rights the Trust,
the Trustee, the Fiscal Agent, the Master Servicer or the Depositor may have to
indemnification under this Agreement or otherwise, unless the Special Servicer's
defense of such claim is materially prejudiced thereby. The indemnification
provided herein shall survive the termination of this Agreement and the
resignation or termination of the Special Servicer, the Master Servicer, the
Trustee and the Fiscal Agent.
SECTION 8.28. TAX REPORTING. From and after the Closing Date, the
Special Servicer shall comply with the Mortgagor tax reporting requirements
imposed by Sections 6050H, 6050J and 6050P of the Code and any similar tax
reporting obligations under State law with respect to any Specially Serviced
Mortgage Loan. The Special Servicer shall provide to the Master Servicer copies
of any such reports. The Master Servicer shall forward such reports to the
Trustee.
SECTION 8.29. CERTAIN SPECIAL SERVICER REPORTS.
(a) The Special Servicer, in the case of any Specially Serviced
Mortgage Loans will deliver, at such times as are in Section 8.14(f), the
reports set forth in Section 8.14(f) and will include a Specially Serviced Loan
Detail Report which shall contain a narrative description for each Specially
Serviced Mortgage Loan of the current status of such Mortgage Loan any
additional reports as may be reasonably agreed upon by the Operating Adviser and
the Special Servicer for a reasonable fee payable by the Operating Adviser.
(b) The Special Servicer shall maintain accurate records, prepared
by a Servicing Officer, of each Final Recovery Determination with respect to any
Mortgage Loan or REO Property and the basis thereof. Each Final Recovery
Determination shall be evidenced by an Officer's Certificate delivered to the
Trustee, the Master Servicer and the Operating Adviser (or if no Operating
Adviser has been elected, the Majority Certificateholder of the Controlling
Class) no later than the tenth Business Day following such Final Recovery
Determination.
(c) In addition, no later than 30 days after a Servicing Transfer
Event for a Mortgage Loan, the Special Servicer shall deliver to each Rating
Agency and the Operating Adviser (or if no
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Operating Adviser has been elected, the Majority Certificateholder of the
Controlling Class) a report (the "Asset Status Report") with respect to such
Mortgage Loan and the related Mortgaged Property. Such Asset Status Report shall
set forth the following information to the extent reasonably determinable:
(i) summary of the status of such Specially Serviced Mortgage
Loan and any negotiations with the related Mortgagor;
(ii) the most current rent roll and income or operating
statement available for the related Mortgaged Property;
(iii) upon receipt of an Appraisal, the Appraised Value of the
Mortgaged Property together with the assumptions used in the calculation
thereof; and
(iv) such other information as the Special Servicer deems
relevant in light of the Servicing Standard.
(d) The Special Servicer will provide a summary of whether it
intends to foreclose or work out the Mortgage Loan.
SECTION 8.30. QUALIFICATION TO SERVICE. The Master Servicer and the
Special Servicer shall each keep in full force and effect such qualifications to
do business and any necessary licenses as are necessary to perform its duties
under this Agreement.
SECTION 8.31. SALE OF DEFAULTED MORTGAGE LOANS AND REO PROPERTIES.
(a) The Special Servicer may offer to sell for cash to any Person
any REO Property or Defaulted Mortgage Loan. In the case of REO Property, the
Special Servicer shall offer to sell such REO Property no later than the time
determined by the Special Servicer to be sufficient to result in the sale of
such REO Property on or prior to the date specified in Section 8.19(a), and in
any event prior to the Final Rated Distribution Date. The Special Servicer shall
give the Operating Adviser and the Trustee not less than five days' prior
written notice of its intention to sell any such Defaulted Mortgage Loan or REO
Property, and in respect of such sale, the Special Servicer shall offer such
Defaulted Mortgage Loan or REO Property for sale in a fair auction or other
manner as is consistent with the Servicing Standard and shall accept the highest
cash bid received in such auction or other procedure from any Person other than
an Interested Person for any Defaulted Mortgage Loan or REO Property in an
amount, except as otherwise provided in this Section, at least equal to the
Purchase Price therefor.
In the absence of a bid in an amount at least equal to the Purchase
Price (after deducting allocable expenses), the Special Servicer shall accept
the highest cash bid received from any Person other than any Interested Person
or the Trustee in its individual capacity, unless the Special Servicer has
received other bids, the Interested Party's bid is the highest bid, and the
Special Servicer determines that acceptance of such bid is in the best interest
of the Certificateholders.
The Special Servicer shall not be obligated by either of the
foregoing paragraphs or otherwise to accept the highest cash bid if the Special
Servicer determines, in accordance with the Servicing Standard, that rejection
of such bid would be in the best interests of the Certificateholders. In
addition, the Special Servicer may accept a lower bid (including a bid lower
than the Purchase Price) if it determines, in accordance with the Servicing
Standard, that acceptance of such bid would be in the best interests of the
Certificateholders (for example, if the prospective buyer making the lower bid
is more likely to perform its obligations, or the terms offered by the
prospective buyer making the lower bid are
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more favorable). The Special Servicer shall determine no later than six months
prior to the end of the REO Sale Deadline with respect to any REO Property
whether a sale of such REO Property pursuant to any bids being made with respect
thereto is in the best economic interests of the Certificateholders as a whole.
If the Special Servicer so determines in accordance with the Servicing Standard
that such a sale would not be in the best interests of the Certificateholders,
the Special Servicer shall seek an extension of such period in the manner
described in Section 8.19.
(b) Subject to the REMIC Provisions, the Special Servicer shall act
on behalf of the Trust in negotiating and taking any other action necessary or
appropriate in connection with the sale of any Defaulted Mortgage Loan or REO
Property, including the collection of all amounts payable in connection
therewith. Any sale of a Defaulted Mortgage Loan or REO Property shall be
without recourse to, or representation or warranty by, the Trustee, the
Depositor, the Special Servicer, the Master Servicer, or the Trust. None of the
Special Servicer, the Master Servicer, the Depositor, the Fiscal Agent or the
Trustee shall have any liability to the Trust or any Certificateholder with
respect to the price at which a Defaulted Mortgage Loan is sold if the sale is
consummated in accordance with the terms of this Agreement.
(c) The proceeds of any sale after deduction of the expenses of such
sale incurred in connection therewith shall be deposited within one Business Day
in the Collection Account.
(d) Notwithstanding anything herein to the contrary, the Special
Servicer shall not be required to take or refrain from taking any action
pursuant to instructions from (or which require the approval of) the Operating
Adviser that would cause it to violate any term or provision of this Agreement,
the REMIC Provisions or the Servicing Standard.
SECTION 8.32. OPERATING ADVISER; ELECTIONS.
(a) In accordance with Section 8.32(c), the Holders of Certificates
representing more than 50% of the Class Principal Balance of the Controlling
Class shall be entitled to elect an operating adviser (the "OPERATING ADVISER")
with the powers set forth in Section 8.33. An election of an Operating Adviser
may also be held upon the resignation or removal of any Person acting as
Operating Adviser. The initial election of an Operating Adviser may be held at
any time on or after the Closing Date.
(b) At the request of the Holders of Certificates representing at
least 50% of the Class Principal Balance of the Controlling Class, the Trustee
shall call a meeting of the Holders of the Controlling Class for purpose of
electing an Operating Adviser. Notice of the meeting shall be mailed or
delivered by the Trustee to each Holder of Certificates of the Controlling Class
not less than 10 nor more than 60 days prior to the meeting. The notice shall
state the place and the time of the meeting, which may be held by telephone.
Holders of Certificates representing a majority of the Class Principal Balance
of the Controlling Class, present in person or represented by proxy, shall
constitute a quorum for the nomination of an Operating Adviser. At the meeting,
each Holder shall be entitled to nominate one Person to act as Operating
Adviser. The Trustee shall cause the election of the Operating Adviser to be
held as soon thereafter as is reasonably practicable.
(c) Each Holder of Certificates of the Controlling Class shall be
entitled to vote in each election of the Operating Adviser. The voting in each
election of the Operating Adviser shall be in writing mailed, telecopied,
delivered or sent by courier and actually received by the Trustee on or prior to
the date of such election. Immediately upon receipt by the Trustee of votes
(which have not been rescinded) from the Holders of Certificates representing
more than 50% of the Class Principal Balance of
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the Controlling Class which are cast for a single Person, such Person shall be,
upon such Person's acceptance, the Operating Adviser. The Trustee shall act as
judge of each election and, absent manifest error, the determination of the
results of any election by the Trustee shall be conclusive. Notwithstanding any
other provisions of this Section 8.32, the Trustee may make such reasonable
regulations as it may deem advisable for any election.
(d) The Operating Adviser may be removed at any time by the written
vote, copies of which must be delivered to the Trustee, of the Holders of the
Certificates representing more than 50% of the Class Principal Balance of the
Controlling Class.
(e) For purposes of electing or removing an Operating Adviser,
Certificates of the Controlling Class held by the Depositor, the Master Servicer
or the Special Servicer or by any Affiliate of any of them shall be taken into
account with the same force and effect as if any other Person held such
Certificates.
SECTION 8.33. DUTIES OF OPERATING ADVISER.
(a) If an Operating Adviser has been elected and is currently acting
in such capacity, then, prior to the Special Servicer's taking any of the
following actions, the Special Servicer shall notify such Operating Adviser of
its intention to take such action:
(i) any foreclosure upon or comparable conversion (which may
include acquisition of an REO Property) of the ownership of properties
securing such of the Specially Serviced Mortgage Loans as come into and
continue in default;
(ii) any modification of a Money Term of a Mortgage Loan
(other than a modification consisting of the extension of the original
Maturity Date of such Mortgage Loan for two years or less);
(iii) any sale of a Defaulted Mortgage Loan or REO Property
pursuant to Section 8.31;
(iv) any determination to bring a Mortgaged Property or an REO
Property into compliance with Environmental Laws; and
(v) any acceptance of substitute or additional collateral for
a Mortgage Loan.
(b) The Operating Adviser, if any, may direct the Trustee to remove
the Special Servicer at any time effective upon the appointment and written
acceptance of such appointment by a successor to the Special Servicer appointed
by the Operating Adviser; provided that, prior to the effectiveness of any such
appointment the Operating Adviser and the Trustee shall have received: (i)
Rating Agency Confirmation; and (ii) an Opinion of Counsel (which shall not be
an expense of the Trustee or Trust) to the effect that this Agreement shall be
enforceable against the designated successor in accordance with its terms. The
existing Special Servicer shall be deemed to have resigned simultaneously with
such designated successor's becoming the Special Servicer hereunder; provided,
however, that (i) the resigning Special Servicer shall continue to be entitled
to receive all amounts accrued or owing to it under this Agreement on or prior
to the effective date of such resignation, whether in respect of Servicing
Advances or otherwise, and (ii) it and its directors, officers, employees and
agents shall continue to be entitled to the benefits of Sections 8.26 and 8.27,
notwithstanding any such
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resignation. Such resigning Special Servicer shall cooperate with the Trustee
and the replacement Special Servicer in effecting the termination of the
resigning Special Servicer's responsibilities and rights hereunder, including,
without limitation, the transfer within two Business Days to the replacement
Special Servicer for administration by it of all cash amounts that shall at the
time be or should have been deposited in the Collection Account or delivered by
the Special Servicer to the Master Servicer or that are thereafter received with
respect to Specially Serviced Mortgage Loans and REO Properties.
SECTION 8.34. EXCHANGE ACT REPORTING.
The Trustee shall, at the Trustee's expense, prepare for filing,
execute and properly file with the Securities and Exchange Commission, any and
all reports, statements and information, including, without limitation Form
10-K, Form 10-Q and Form 8-K, respecting the Trust Fund and/or the Certificates
required or specifically provided herein to be filed on behalf of the Trust
under the Exchange Act. The Master Servicer and the Special Servicer shall
provide any items required to be delivered by either of them under this
Agreement in a format acceptable to the Trustee for electronic filing via the
EDGAR system (in addition to any other required format). The Trustee shall, at
the Trustee's expense, seek from the Securities and Exchange Commission a
no-action letter or other exemptive relief relating to reduced reporting
requirements in respect of the Trust under the Exchange Act and shall, in
accordance with and to the extent permitted by applicable law, file a Form 15
relating to automatic termination of reporting in respect of the Trust under the
Exchange Act.
SECTION 8.35. CREDIT LEASE SERVICING PROVISIONS.
(a) Notice; Review of Policies. The Depositor shall provide, or
cause to be provided, written notice (with copies to the Master Servicer) to the
provider of each of the Lease Enhancement Policy and the Residual Value Policy
within 30 days after the Closing Date, that (i) the Master Servicer shall be
sent all notices under each Lease Enhancement Policy and Residual Value Policy
and (ii) LaSalle National Bank, as trustee for the registered holders of the
Certificates shall be the loss payee under each Residual Value Policy and shall
be named the insured party under each Lease Enhancement Policy. The Master
Servicer shall review and be familiar with the terms and conditions relating to
enforcing claims and shall monitor the dates by which any claim or action must
be taken (including delivering any notices to the related insurer and performing
any actions required under each policy) under each policy to realize the full
value of such policy for the benefit of the Certificateholders. None of the
Depositor, the Master Servicer or the Special Servicer shall be liable for
making any payments under the Lease Enhancement Policy.
(b) Compliance with Policies. The Master Servicer shall abide by the
terms and conditions precedent to payment of claims under any Lease Enhancement
Policy and Residual Value Policy and take all such action as may be required to
comply with the terms and provisions of such policies in order to maintain, in
full force and effect, such policies, including, but not limited to, notifying
the related insurer in writing as soon as reasonably practicable, and within the
time period required under the applicable policy, after the Master Servicer
first receives written notification or has actual knowledge of (i) the
commencement of a condemnation proceeding, (ii) the occurrence of physical
damage, (iii) termination or rent abatement by the related Credit Tenant, and
(iv) any other event requiring notice to the insurer in order to make a timely
claim under the policy. In addition to complying with all conditions to
coverage, the Master Servicer shall take any and all actions required under the
Lease Enhancement Policy and Residual Value Policy in connection with any claim,
including (a) the timely presentation of a proof of loss containing all required
information, (b) the prosecution of all claims relating to a casualty or
condemnation, which will maximize any recoveries or awards from sources other
than the insurer under the Lease Enhancement Policy, (c) providing reasonable
access to any Mortgaged Property (but only to the extent such access is
available pursuant to the related Mortgage Loan documents, applicable law and
the related Credit Lease), and (d) the providing of any other notices
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required under the policies in a timely fashion and any other actions which will
maximize any recoveries under the policies.
(c) Advances. The Master Servicer shall make a Servicing Advance
with respect to a Mortgaged Property in an amount equal to all such funds as are
necessary for the costs of maintenance or repair of a Mortgaged Property or
other obligation of the related Mortgagor to the extent the failure to complete
such maintenance or repair or other obligation may give rise to a Maintenance
Right or Additional Right of the related Credit Tenant under a Double Net Lease
or Triple Net Lease and provided that the particular Servicing Advance would
not, if made, constitute a Nonrecoverable Advance. All such Advances shall be
reimbursable from collections from the Mortgagor, and if not recovered from the
Mortgagor, such Advance shall be reimbursable from general collections no later
than three months after the date advanced. The foregoing shall in no way limit
the Master Servicer's ability to charge and collect from the Mortgagor or the
related Credit Tenant such costs together with interest thereon including any
lien granted with respect to any advances made by any mortgagee under any
Mortgage. The lien of the Mortgage on the Mortgaged Property shall not be
released by the Trustee, the Servicer or the Special Servicer until the amount
of the Servicing Advance made under this Section 8.35(c) have been recovered,
and shall be considered a Specially Serviced Mortgage Loan.
(d) Policy Termination. In the event that the Master Servicer
receives notice of any Policy Termination Event, the Master Servicer shall
provide written notice of such Policy Termination Event to the Trustee and the
Rating Agencies and redress such Policy Termination Event in accordance with the
Servicing Standard. Any legal fees incurred in connection with a resolution of a
Policy Termination Event shall be paid by the Master Servicer and shall be
reimbursable to it from the Mortgagor or other responsible party, and if not
recoverable, then from the Trust as an Additional Trust Expense.
(e) Rating Report. On the Master Servicer Remittance Date, the
Master Servicer will deliver to the Trustee a report stating with respect to
each Credit Tenant and any guarantor as of a date no earlier than three Business
Days prior to such date: (i) the long-term unsecured ratings for each Credit
Tenant and any guarantor as of the Closing Date as provided by Seller and as of
the date of such report, (ii) the long-term unsecured ratings for such Credit
Tenant or Guarantor included in the report prepared pursuant to this Section for
the immediately preceding Determination Date, and (iii) whether such Credit
Tenant or guarantor has been placed on a credit watch.
(f) Property Inspection. The Master Servicer will inspect or cause
the inspection of each Mortgaged Property securing a Credit Lease Loan once
every three (3) calendar years if the related Credit Tenant (or guarantor) has a
published rating of not less than BBB-, every two (2) years if the related
Credit Tenant (or guarantor) has a published rating between BB+ and BB-, and
annually if the related Credit Tenant has a published rating of less than BB-.
The Master Servicer will inspect or cause to be inspected annually each
Mortgaged Property for which no published rating is publicly available for the
related Tenant and such Mortgaged Property loan represents 5% or more of the
aggregate Cut-off Date Principal Balance of the Mortgage Loans, and will inspect
or cause to be inspected every second year each other Mortgaged Property for
which the related Credit Tenant has no published, publicly available rating. In
the event the published rating for any Credit Tenant or Guarantor is downgraded
by any Rating Agency, "Moody's Investors Service", Inc. or "Standard & Poor's
Rating Service" by one or more rating increment (i.e., AA to A, or BBB- to BB-)
and no inspection has been performed due to a ratings downgrade in the preceding
12 months for the related Mortgaged Property, then in each such instance, the
Master Servicer shall cause all Mortgaged Properties leased to such Credit
Tenant to be inspected as soon as reasonably practical.
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ARTICLE IX.
DEFAULT
SECTION 9.1. EVENTS OF DEFAULT.
(a) "Event of Default", wherever used herein, means any one of the
following events:
(A) any failure by the Master Servicer to make a required
deposit to the Collection Account which continues unremedied for one
Business Day following the date on which such deposit was first required
to be made, or (B) any failure by the Master Servicer to deposit into, or
to remit to the Trustee for deposit into, the Distribution Account any
amount required to be so deposited or remitted, which failure is not
remedied by 11:00 a.m. (New York City time) on the relevant Distribution
Date; or
(ii) any failure by the Special Servicer to deposit into, or
to remit to the Master Servicer for deposit into, the Collection Account
any amount required to be so deposited or remitted under this Agreement
which failure continues unremedied for one Business Day following the date
on which such deposit or remittance was first required to be made; or
(iii) any failure by the Master Servicer or the Special
Servicer to timely make any Servicing Advance required to be made by it
pursuant to this Agreement and could reasonably be expected to have a
material adverse effect on which continues unremedied for a period ending
on the earlier of (A) 15 days following the date such Servicing Advance
was first required to be made, and (B) either, if applicable, (1) in the
case of a Servicing Advance relating to the payment of insurance premiums,
the day on which such insurance coverage terminates if such premiums are
not paid or (2) in the case of a Servicing Advance relating to the payment
of real estate taxes, the date of the commencement of a foreclosure action
with respect to the failure to make such payment; or
(iv) any failure on the part of the Master Servicer or the
Special Servicer duly to observe or perform in any material respect any
other of the covenants or agreements on the part of the Master Servicer or
the Special Servicer contained in this Agreement which continues
unremedied for a period of 30 days after the date on which written notice
of such failure, requiring the same to be remedied, shall have been given
to the Master Servicer or the Special Servicer, as the case may be, by the
Trustee or the Depositor, or to the Master Servicer or the Special
Servicer, as the case may be, the Depositor and the Trustee by the Holders
of Certificates entitled to not less than 25% of the Voting Rights; or
(v) any breach on the part of the Master Servicer or the
Special Servicer of any representation or warranty contained in this
Agreement which materially and adversely affects the interests of any
Class of Certificateholders and which continues unremedied for a period of
30 days after the date on which notice of such breach, requiring the same
to be remedied, shall have been given to the Master Servicer or the
Special Servicer, as the case may be, by the Trustee or the Depositor, or
to the Master Servicer or the Special Servicer, as the case may be, the
Depositor and the Trustee by the Holders of Certificates entitled to not
less than 25% of the Voting Rights; or
(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
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bankruptcy, insolvency or similar law for the appointment of a
conservator, receiver, liquidator, trustee or similar official in any
bankruptcy, insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation
of its affairs, shall have been entered against the Master Servicer or the
Special Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days; or
(vii) the Master Servicer or the Special Servicer shall
consent to the appointment of a conservator, receiver, liquidator, trustee
or similar official in any bankruptcy, insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating
to it or of or relating to all or substantially all of its property;
(viii) the Master Servicer or the Special Servicer shall admit
in writing its inability to pay its debts generally as they become due,
file a petition to take advantage of any applicable bankruptcy, insolvency
or reorganization statute, make an assignment for the benefit of its
creditors, voluntarily suspend payment of its obligations, or take any
corporate action in furtherance of the foregoing; or
(ix) the Trustee shall have received written notice from
either Rating Agency that the continuation of the Master Servicer or the
Special Servicer in such capacity would result in the downgrade,
qualification (which shall not include a "negative" credit watch) or
withdrawal of any rating then assigned by such Rating Agency to any Class
of Certificates.
(b) If any Event of Default with respect to the Master Servicer or
the Special Servicer (in either case for purposes of this Section 9.1(b), the
"DEFAULTING PARTY") shall occur and be continuing, then, and in each and every
such case, so long as such Event of Default shall not have been remedied, the
Depositor or the Trustee may terminate, and at the written direction of the
Holders of Certificates entitled to at least 51% of the Voting Rights, the
Trustee shall terminate, by notice in writing to the Defaulting Party, with a
copy of such notice to the Depositor (if the termination is effected by the
Trustee) or to the Trustee (if the termination is effected by the Depositor),
all of the rights and obligations of the Defaulting Party under this Agreement
and in and to the Mortgage Loans and the proceeds thereof (other than any rights
of the Defaulting Party as Certificateholder and for recovery of amounts due the
Defaulting Party out of the proceeds of the Mortgage Loans). From and after the
receipt by the Defaulting Party of such written notice, all authority and power
of the Defaulting Party under this Agreement, whether with respect to the
Certificates (other than as a Holder of any Certificate) or the Mortgage Loans
or otherwise, shall pass to and be vested in the Trustee pursuant to and under
this Section, and, without limitation, the Trustee is hereby authorized and
empowered to execute and deliver, on behalf of and at the expense of the
Defaulting Party, as attorney-in-fact or otherwise, any and all documents and
other instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer and the Special Servicer
each agrees that if it is terminated pursuant to this Section 9.1(b), it shall
promptly (and in any event no later than ten Business Days subsequent to its
receipt of the notice of termination) provide the Trustee with all documents and
records requested by the Trustee to enable it or a successor servicer to assume
the Master Servicer's or Special Servicer's, as the case may be, functions
hereunder, and shall cooperate with the Trustee in effecting the termination of
the Master Servicer's or Special Servicer's, as the case may be,
responsibilities and rights hereunder, including, without limitation, the
transfer within two Business Days to the Trustee or a successor servicer for
administration by it of all cash amounts that shall at the time be or should
have been credited by the Master Servicer or the Special Servicer, as the case
may be, to the Collection Account, the Distribution Account or any Servicing
Account or thereafter be received with respect to the Mortgage Loans or any REO
Property (provided, however, that the Master Servicer and the
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Special Servicer each shall continue to be entitled to receive all amounts
accrued or owing to it under this Agreement on or prior to the date of such
termination, whether in respect of Advances (together with Advance Interest
thereon) made by it or otherwise, and it and its directors, officers, employees
and agents shall continue to be entitled to the benefits of Sections 8.26 and
8.27 notwithstanding any such termination).
SECTION 9.2. TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR. On and after
the time the Master Servicer or the Special Servicer receives a notice of
termination pursuant to Section 9.1, the Trustee shall be the successor in all
respects to the Master Servicer or the Special Servicer, as the case may be, in
its capacity as such under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities (except for liabilities incurred prior to the Event of Default)
relating thereto and arising thereafter placed on the Master Servicer or the
Special Servicer, as the case may be, by the terms and provisions hereof,
including, without limitation, the Master Servicer's obligation to make P&I
Advances; provided that any failure to perform such duties or responsibilities
caused by the Master Servicer's or the Special Servicer's failure to provide
information or monies required by Section 9.1 shall not be considered a default
by the Trustee hereunder. The Trustee shall not be liable for any of the
representations and warranties of the Master Servicer or the Special Servicer
and the Trustee shall not be required to purchase any Mortgage Loan hereunder.
As compensation therefor, the Trustee shall be entitled to the applicable
Servicing Fees and all funds relating to the Mortgage Loans that the Master
Servicer or the Special Servicer would have been entitled to charge to the
Collection Account if the Master Servicer or the Special Servicer had continued
to act hereunder. Notwithstanding the above, the Trustee may, if it shall be
unwilling to so act, or shall, if it is unable to so act or if the Holders of
Certificates entitled to at least 51% of the Voting Rights so request in writing
to the Trustee or if it is not appropriately rated as an approved master
servicer or special servicer, as the case may be, by each Rating Agency,
promptly appoint, or petition a court of competent jurisdiction for the
appointment of, a mortgage loan servicing institution that has a net worth of
not less than $15,000,000 and is otherwise acceptable to each Rating Agency (as
evidenced by Rating Agency Confirmation), as the successor to the Master
Servicer or the Special Servicer, as the case may be, hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Master Servicer or the Special Servicer. No appointment of a successor to
the Master Servicer or the Special Servicer hereunder shall be effective until
the assumption by the successor to the Master Servicer or the Special Servicer
of all the responsibilities, duties and liabilities of the Master Servicer or
the Special Servicer, as the case may be, hereunder. Pending appointment of a
successor to the Master Servicer or the Special Servicer hereunder, the Trustee
shall act in such capacity as hereinabove provided and shall be entitled to such
compensation as would otherwise have been payable to the Master Servicer or the
Special Servicer, as the case may be. In connection with any such appointment
and assumption described herein, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans or otherwise as
it and such successor shall agree; provided, however, that no such compensation
shall be in excess of that permitted the resigning or terminated party
hereunder. The Depositor, the Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession.
SECTION 9.3. NOTIFICATION TO CERTIFICATEHOLDERS.
(a) Upon any resignation of the Master Servicer or the Special
Servicer pursuant to Section 8.24, any termination of the Master Servicer or the
Special Servicer pursuant to Section 9.1 or any appointment of a successor to
the Master Servicer or the Special Servicer pursuant to Section 9.2, the Trustee
shall give prompt written notice thereof to Certificateholders at their
respective addresses appearing in the Certificate Register.
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(b) Not later than the later of (i) 60 days after the occurrence of
any event which constitutes or, with notice or lapse of time or both, would
constitute an Event of Default and (ii) five days after the Trustee discovers or
is notified of the occurrence of such an event, the Trustee shall transmit by
mail to the Depositor and all Certificateholders notice of such occurrence,
unless such default shall have been cured.
SECTION 9.4. WAIVER OF EVENTS OF DEFAULT. The Holders of
Certificates entitled to at least 66 2/3% of the Voting Rights allocated to the
respective Classes of Certificates affected by any Event of Default hereunder
may waive such Event of Default; provided, however, that an Event of Default
under clause (i) or (ii) of Section 9.1 may be waived only by all of the
Certificateholders. Upon any such waiver of an Event of Default, such Event of
Default shall cease to exist and shall be deemed to have been remedied for every
purpose hereunder; provided, however, that the Trustee shall be entitled to
reimbursement pursuant to Section 7.12 for any costs and expenses incurred as a
result of such Event of Default. No such waiver shall extend to any subsequent
or other Event of Default or impair any right consequent thereon except to the
extent expressly so waived. Notwithstanding any other provisions of this
Agreement, for purposes of waiving any Event of Default pursuant to this Section
9.4, Certificates registered in the name of the Depositor or any Affiliate of
the Depositor shall be entitled to the same Voting Rights with respect to the
matters described above as they would if any other Person held such
Certificates.
ARTICLE X.
PURCHASE AND TERMINATION OF THE TRUST
SECTION 10.1. TERMINATION OF TRUST.
(a) Subject to Section 10.3, the Trust and the respective
obligations and responsibilities of the Depositor, the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent hereunder (other than the
obligation of the Trustee to make payments to Certificateholders on the final
Distribution Date pursuant to Section 6.4 or otherwise as set forth in Section
10.2 and other than the obligations in the nature of information or tax
reporting or tax-related administrative or judicial contests or proceedings)
shall terminate on the earlier of (i) the later of (A) the final payment or
other liquidation of the last Mortgage Loan held by the Trust and (B) the
disposition of the last REO Property held by the Trust and (ii) the sale of all
Mortgage Loans and any REO Properties held by the Trust in accordance with
Section 10.1(b); provided that in no event shall the Trust created hereby
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants of Joseph P. Kennedy, the late Ambassador of the United
States to the Court of St. James, living on the date hereof.
(b) As soon as reasonably practical, the Trustee shall give the
Depositor, the Master Servicer, the Special Servicer, the Majority
Certificateholder of the Controlling Class and the Class R-I Certificateholders
notice of the date when the aggregate Certificate Principal Balance of the
Principal Balances Certificates, after giving effect to distributions of
principal made on the next Distribution Date, will be less than or equal to 1%
of the Initial Pool Balance. The Depositor, the Master Servicer, the Special
Servicer, the majority holders of the Controlling Class and the Holders of Class
R-I Certificates representing a majority Percentage Interest in such Class shall
thereafter be entitled, in that order of priority, to purchase, in whole only,
the Mortgage Loans and any REO Properties then remaining in the 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
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proposed purchase that it wishes to purchase the assets of the Trust, then such
party (or, in the event that more than one of such parties notifies the Trustee
that it wishes to purchase the assets of the Trust, the party with the first
right to purchase the assets of the Trust) may purchase the assets of the Trust
in accordance with this Agreement. The "TERMINATION PRICE" shall equal the
greater of (x) the sum of (i) the aggregate Purchase Price of all the remaining
Mortgage Loans (other than REO Mortgage Loans and Mortgage Loans as to which a
Final Recovery Determination has been made) held by the Trust, plus (ii) the
appraised value of each remaining REO Property, if any, held by the Trust (such
appraisal to be conducted by a Qualified Appraiser selected by the Master
Servicer and approved by the Trustee), minus (iii) solely in the case where the
Master Servicer is effecting such purchase, the aggregate amount of unreimbursed
Advances made by the Master Servicer, together with any Advance Interest accrued
and payable to the Master Servicer in respect of such Advances and any unpaid
Master Servicing Fees remaining outstanding (which items shall be deemed to have
been paid or reimbursed to the Master Servicer in connection with such purchase)
(or, solely in the case where the Special Servicer is effecting such purchase,
the aggregate amount of unreimbursed Servicing Advances made by the Special
Servicer, together with any Advance Interest accrued and payable to the Special
Servicer in respect of such Servicing Advances and any unpaid Special Servicing
Fees remaining outstanding (which items shall be deemed to have been paid or
reimbursed to the Special Servicer in connection with such purchase); (y) the
fair market value of all remaining assets of REMIC I and the grantor trust; and
(z) the amount that would be sufficient to pay the outstanding Certificate
Principal Balance of each Class of Certificates, Distributable Certificate
Interest thereon, and Distributable Certificate Interest on the Class X
Certificates for the final Distribution Date.
In the event that the Depositor, the Master Servicer, the Special
Servicer, the Majority Certificateholder of the Controlling Class or the Holders
of Class R-I Certificates representing a majority Percentage Interest in such
Class purchase all of the remaining Mortgage Loans and REO Properties held by
the Trust in accordance with the preceding paragraph, the party effecting such
purchase (the "FINAL PURCHASER") shall (i) deposit in the Collection Account not
later than the Determination Date relating to the Distribution Date on which the
final distribution on the Certificates is to occur, an amount in immediately
available funds equal to the Termination Price (other than the amount, if any,
of such Termination Price paid in respect of the assets of the grantor trust,
which amount shall be paid to the Trustee for deposit in the Excess Interest
Distribution Account) and (ii) deliver notice to the Trustee of its intention to
effect such purchase. Upon confirmation that such deposit has been made, the
Trustee shall release or cause to be released to the Final Purchaser or its
designee the Mortgage Files for the remaining Mortgage Loans and shall execute
all assignments, endorsements and other instruments furnished to it by the Final
Purchaser as shall be necessary to effectuate transfer of the remaining Mortgage
Loans and REO Properties held by the Trust, in each case without representation
or warranty by the Trustee. All Servicing Files for the remaining Mortgage Loans
and REO Properties shall be delivered to the Final Purchaser or its designee at
the expense of the Final Purchaser.
(c) As a condition to the purchase of the assets of the Trust
pursuant to Section 10.1(b), the Final Purchaser must deliver to the Trustee an
Opinion of Counsel, which shall be at the expense of the Final Purchaser,
stating that such termination will be a "qualified liquidation" under Section
860F(a)(4) of the Code of each of REMIC I, REMIC II and REMIC III. Such purchase
shall be made in accordance with Section 10.3.
SECTION 10.2. PROCEDURE UPON TERMINATION OF TRUST.
(a) Notice of any termination pursuant to the provisions of Section
10.1, specifying the Distribution Date upon which the final distribution shall
be made, shall be given promptly by the Trustee to each Rating Agency and each
Certificateholder by first class mail no later than the later of
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(a) ten days prior to the date of such termination and (b) the date the Trustee
receives notice of such termination. Such notice shall specify (A) the
Distribution Date upon which final distribution on the Certificates will be made
and (B) that the Record Date otherwise applicable to such Distribution Date is
not applicable, distribution being made only upon presentation and surrender of
the Certificates at the office or agency of the Trustee therein specified. The
Trustee shall give such notice to the Depositor and the Certificate Registrar at
the time such notice is given to Certificateholders. Upon any such termination,
the Trustee shall terminate, or request the Master Servicer to terminate, the
Collection Account and the Distribution Account and any other account or fund
maintained with respect to the Certificates, subject to the Trustee's obligation
hereunder to hold all amounts payable to the nontendering Certificateholders in
trust without interest pending such payment.
(b) On the final Distribution Date, the Trustee shall distribute to
each Certificateholder that presents and surrenders its Certificates all amounts
payable on such Certificates on such final Distribution Date in accordance with
Section 6.4 and Section 6.4.1.
(c) In the event that all of the Holders do not surrender their
Certificates for cancellation within three months after the time specified in
the above-mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
one year after the second notice any Certificates shall not have been
surrendered for cancellation, the Trustee may take appropriate steps to contact
the nontendering Certificateholders concerning surrender of their Certificates,
and the cost thereof shall be paid out of the amounts distributable to such
Holders. If within two years after the second notice any such Certificates shall
not have been surrendered for cancellation, the Trustee shall, subject to
applicable state law relating to escheat, hold all amounts distributable to such
Holders for the benefit of such Holders. No interest shall accrue on any amount
held by the Trustee and not distributed to a Certificateholder due to such
Certificateholder's failure to surrender its Certificate(s) for payment of the
final distribution thereon in accordance with this Section. Any money held by
the Trustee pending distribution under this Section 10.2 after 90 days after the
adoption of a plan of complete liquidation shall be deemed for tax purposes to
have been distributed from the REMICs and shall be beneficially owned by the
related Holder.
SECTION 10.3. ADDITIONAL TRUST TERMINATION REQUIREMENTS.
(a) In the event of a purchase of all the remaining Mortgage Loans
and REO Properties held by the Trust in accordance with Section 10.1 or any
other termination of the Trust under this Article X, the Trust and each REMIC
Pool shall be terminated in accordance with the following additional
requirements, unless in the case of a termination under Section 10.1 hereof, the
Final Purchaser delivers to the Trustee an Opinion of Counsel at the expense of
the Final Purchaser (or, in the case of any other termination, the Trustee shall
obtain such Opinion of Counsel at the expense of the Trust Fund) addressed to
the Depositor and the Trustee to the effect that the failure of the Trust to
comply with the requirements of this Section 10.3 will not (i) result in the
imposition of taxes on "prohibited transactions" of any REMIC Pool under the
REMIC Provisions or (ii) cause any REMIC Pool to fail to qualify as a REMIC at
any time that any Certificates are outstanding:
(i) within 89 days prior to the final Distribution Date set
forth in the notice given by the Trustee under Section 10.2, the Trustee
shall adopt a plan of complete liquidation 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;
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(ii) during such 90-day liquidation period and at or after the
adoption of the plans of complete liquidation and at or prior to the final
Distribution Date, the Trustee shall sell all of the remaining Mortgage
Loans and any REO Properties held by the Trust to the Final Purchaser for
cash in an amount equal to the Termination Price, such cash shall be
deposited into the Collection Account, shall be deemed distributed on the
REMIC I Regular Interests in retirement thereof, shall be deemed
distributed on the REMIC II Regular Interests in retirement thereof, and
shall be distributed to the Certificateholders in retirement of the
Certificates;
(iii) at the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited, to the Holders of the related Class of Residual
Certificates all cash on hand in each REMIC Pool after making such final
deemed payment or payments (other than cash retained to meet claims), and
REMIC I, REMIC II and REMIC III shall terminate at that time; and
(iv) in no event may the final payment on the REMIC I
Interests, the REMIC II Interests, the REMIC III Regular Certificates, or
the Class R-III Certificates be made after the 89th day from the date on
which such plans of complete liquidation are adopted. The Trustee shall
specify the first day of the 90-day liquidation period in a statement
attached to the final Tax Return for each REMIC Pool pursuant to Treasury
regulation 1.860F-1.
(b) By their acceptance of Certificates, the Holders thereof hereby
agree to authorize the Trustee to adopt a plan of complete liquidation of REMIC
I, REMIC II and REMIC III in accordance with the foregoing requirements, which
authorization shall be binding upon all successor Certificateholders.
ARTICLE XI.
RIGHTS OF CERTIFICATEHOLDERS
SECTION 11.1. LIMITATION ON RIGHTS OF HOLDERS.
(a) The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or
take any action or proceeding in any court for a partition or winding up of the
Trust, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
(b) Except as otherwise expressly provided herein, no
Certificateholder, solely by virtue of its status as a Certificateholder, shall
have any right to vote or in any manner otherwise control the Master Servicer,
the Special Servicer or the operation and management of the Trust, or the
obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of the Certificates, be construed so as to constitute the
Certificateholders from time to time as partners or members of an association,
nor shall any Certificateholder be under any liability to any third person by
reason of any action taken by the parties to this Agreement pursuant to any
provision hereof.
(c) No Certificateholder, solely by virtue of its status as
Certificateholder, shall have any right by virtue or by availing of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement unless the
Holders of 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
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liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding and no
direction inconsistent with such written request has been given the Trustee
during such 60-day period by such Certificateholders; it being understood and
intended, and being expressly covenanted by each Certificateholder with every
other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatsoever by virtue or by
availing of any provision of this Agreement to affect, disturb or prejudice the
rights of the Holders of any other of such Certificates, or to obtain or seek to
obtain priority over or preference to any other such Holder, or to enforce any
right under this Agreement, except in the manner herein provided and for the
benefit of all Certificateholders. For the protection and enforcement of the
provisions of this Section, each and every Certificateholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.
SECTION 11.2. ACCESS TO LIST OF HOLDERS.
(a) If the Trustee is not acting as Certificate Registrar, the
Certificate Registrar will furnish or cause to be furnished to the Trustee,
within fifteen days after receipt by the Certificate Registrar of a request by
the Trustee in writing, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Certificateholders of each Class as
of the most recent Record Date.
(b) If the Depositor, the Operating Adviser, the Special Servicer,
the Master Servicer or three or more Holders (hereinafter referred to as
"applicants," with a single Person that (together with its Affiliates) is the
Holder of more than one Class of Certificates being viewed as a single
"applicant" for these purposes) apply in writing to the Trustee, and such
application states that the applicants desire to communicate with other Holders
with respect to their rights under this Agreement or under the Certificates and
is accompanied by a copy of the communication which such applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt of
such application, send, at such Person's expense, the written communication
proffered by the applicants to all Certificateholders at their addresses as they
appear in the Certificate Register. The Depositor, the Master Servicer and the
Special Servicer may each obtain, upon request, from the Trustee and the
Certificate Registrar a copy of the Certificate Register.
(c) Every Holder, by receiving and holding a Certificate, agrees
with the Depositor, the Certificate Registrar and the Trustee that neither the
Depositor, the Certificate Registrar nor the Trustee shall be held accountable
by reason of the disclosure of any such information as to the names and
addresses of the Certificateholders hereunder, regardless of the source from
which such information was derived.
SECTION 11.3. ACTS OF HOLDERS OF CERTIFICATES.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Depositor.
Such instrument or instruments (as the action embodies therein and evidenced
thereby) are herein sometimes referred to as an "ACT" of the Holders signing
such instrument 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
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Depositor of any such instrument or instruments received by it, and to promptly
forward copies of the same.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments or deeds, certifying that the individual signing
such instrument or writing acknowledged to such notary public or other officer
the execution thereof. Whenever such execution is by an officer of a corporation
or a member of a partnership on behalf of such corporation or partnership, such
certificate or affidavit shall also constitute sufficient proof of such
officer's or member's authority. The fact and date of the execution of any such
instrument or writing, or the authority of the individual executing the same,
may also be proved in any other manner which the Trustee deems sufficient.
(c) The ownership of Certificates (notwithstanding any notation of
ownership or other writing thereon made by anyone other than the Trustee) shall
be proved by the Certificate Register, and neither the Trustee nor the Depositor
shall be affected by any notice to the contrary.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Certificate shall bind every future
Holder of the same Certificate and the Holder of every Certificate issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Depositor in reliance thereon, whether or not notation of such action is
made upon such Certificate.
ARTICLE XII.
REMIC ADMINISTRATION
The provisions of this Article XII shall apply to each REMIC Pool.
SECTION 12.1. REMIC ADMINISTRATION.
(a) An election will be made by the Trustee on behalf of the Trust
to treat the segregated pool of assets consisting of the Mortgage Loans, such
amounts as shall from time to time be held in the Collection Account and the
Distribution Account, the Insurance Policies and any REO Properties and any
other assets constituting REMIC I (as set forth on the definition of REMIC I) as
a REMIC under the Code. Such election will be made on Form 1066 or other
appropriate federal tax or information return or any appropriate state return
for the taxable year ending on the last day of the calendar year in which the
REMIC I Interests are issued. For purposes of such election, the REMIC I Regular
Interests shall each be designated as a separate class of "regular interests" in
REMIC I and the Class R-I Certificates shall be designated as the sole class of
"residual interests" in REMIC I.
An election will be made by the Trustee on behalf of REMIC II to
treat the segregated pool of assets consisting of the REMIC I Regular Interests
as a REMIC under the Code. Such election will be made on Form 1066 or other
appropriate federal tax or information return or any appropriate state return
for the taxable year ending on the last day of the calendar year in which the
REMIC II Interests are issued. For the purposes of such election, the REMIC II
Regular Interests shall be designated as the "regular interests" in REMIC II and
the Class R-II Certificates shall be designated as the sole class of "residual
interests" in REMIC II.
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An election will be made by the Trustee on behalf of REMIC III to
treat the segregated pool of assets consisting of the REMIC II Regular Interests
as a REMIC under the Code. Such election will be made on Form 1066 or other
appropriate federal tax or information return or any appropriate state return
for the taxable year ending on the last day of the calendar year in which the
REMIC III Certificates are issued. For purposes of such election, the Class A-1,
Class A-2, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class
J, Class L, Class M, Class N Certificates and each Component Interest of the
Class X Certificates shall be designated as the "regular interests" in REMIC III
and the Class R-III Certificates shall be designated as the sole class of
"residual interests" in REMIC III.
The Trustee shall not permit the creation of any "interests" (within
the meaning of Treasury regulation Section 1.860D-1(b)(1)) in any of the REMIC
Pools other than the REMIC I Regular Interests, the REMIC II Regular Interests
and the interests evidenced by the Certificates.
(b) The Closing Date is hereby designated as the "Startup Day" of
each REMIC Pool within the meaning of Section 860G(a)(9) of the Code. The latest
possible maturity date for the REMIC I Interests, the REMIC II Interests and the
REMIC III Certificates shall be the Final Rated Distribution Date.
The assets of the Trust Fund consisting of the right to any Excess
Interest in respect of the Hyper-Amortization Loans and the Excess Interest
Distribution Account shall be held by the Trustee for the benefit of the Holders
of the Class N Certificates, and such Class N Certificates, in the aggregate,
will evidence 100% beneficial ownership of such assets (the "grantor trust
assets") from and after the Closing Date. It is intended that the portion of the
Trust Fund consisting of the grantor trust assets will be treated as a grantor
trust for federal income tax purposes, and each of the parties to this Agreement
agrees that it will not take any action that is inconsistent with establishing
or maintaining such treatment. The Trustee shall hold the grantor trust assets
separate and apart from the assets of REMIC I, REMIC II, and REMIC III.
(c) The Trustee shall pay all routine tax related expenses (not
including any taxes, however denominated, including any additions to tax,
penalties and interest) of each REMIC Pool and the grantor trust, excluding any
professional fees or extraordinary expenses related to audits or any
administrative or judicial proceedings with respect to any REMIC Pool or the
grantor trust that involve the Internal Revenue Service or state tax
authorities.
(d) The Trustee shall cause to be prepared, signed, and timely filed
with the Internal Revenue Service, on behalf of each REMIC Pool, an application
for a taxpayer identification number for each REMIC Pool and the grantor trust
on Internal Revenue Service Form SS-4. The Trustee, upon receipt from the
Internal Revenue Service of the Notice of Taxpayer Identification Number
Assigned, shall promptly forward a copy of such notice to the Depositor and the
Master Servicer. The Trustee shall prepare and file Form 8811 on behalf of each
REMIC Pool within 30 days after the Closing Date and shall designate an
appropriate Person to respond to inquiries by or on behalf of Certificateholders
for original issue discount and related information in accordance with
applicable provisions of the Code.
(e) The Trustee shall prepare, execute and file all of each REMIC
Pool's and the grantor trust's federal and state income or franchise tax and
information returns as such REMIC Pool's and the grantor trust's direct
representative; the expenses of preparing and filing such returns shall be borne
by the Trustee. The Depositor, the Master Servicer and the Special Servicer
shall each provide on a timely basis to the Trustee or its designee such
information with respect to the Trust or any REMIC Pool as is in the
Depositor's, the Master Servicer's or the Special Servicer's, as the case may
be, possession, that the Depositor, the Master Servicer or the Special Servicer,
as the case may be, has
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received or prepared by virtue of its acting in such capacity hereunder and that
is reasonably requested by the Trustee to enable it to perform its obligations
under this subsection, and the Trustee shall be entitled to conclusively rely on
such information in the performance of its obligations hereunder. The Depositor
shall indemnify the Trust, the Trustee and the Fiscal Agent for any liability or
assessment against any of them or any cost or expense (including attorneys'
fees) incurred by any of them resulting from any error in any of such tax or
information returns resulting from bad faith, negligence, or willful malfeasance
of the Depositor in providing any information for which the Depositor is
responsible for preparing. The Master Servicer and the Special Servicer shall
each indemnify the Trust, the Trustee, the Fiscal Agent and the Depositor for
any liability or assessment against the Trust, the Trustee, the Fiscal Agent or
the Depositor, as the case may be, and any expenses incurred in connection with
such liability or assessment (including attorney's fees) resulting from any
error in any of such tax or information returns resulting from errors in the
information provided by the Master Servicer or the Special Servicer, as the case
may be, caused by the negligence, willful misconduct or bad faith of the Master
Servicer or the Special Servicer, as the case may be. The Trustee shall be
liable to the Trust, the Master Servicer, the Special Servicer and the Depositor
for any expense incurred by the Trust, the Master Servicer, the Special Servicer
or the Depositor resulting from any error in any of such tax or information
returns resulting from errors in the preparation of such returns caused by the
negligence, willful misconduct or bad faith of the Trustee. Each indemnified
party shall immediately notify the indemnifying party or parties of the
existence of a claim for indemnification under this Section 12.1(e), and provide
the indemnifying party or parties, at the expense of such indemnifying party or
parties, an opportunity to contest the tax or assessment or expense giving rise
to such claim, provided that the failure to give such notification rights shall
not affect the indemnification rights in favor of the Trust under this Section
12.1(e). Any such indemnification shall survive the resignation or termination
of the Master Servicer, the Special Servicer, the Trustee or the Fiscal Agent
and the termination of this Agreement.
(f) The Trustee shall perform on behalf of each REMIC Pool and the
grantor trust all reporting and other tax compliance duties that are the
responsibility of such REMIC Pool and the grantor trust under the Code, REMIC
Provisions, or other compliance guidance issued by the Internal Revenue Service
or any state or local taxing authority. Among its other duties, the Trustee
shall provide (i) to the Internal Revenue Service or other Persons (including,
but not limited to, any Person that transferred a Residual Certificate to a
Disqualified Organization or to an agent that has acquired a Residual
Certificate on behalf of a Disqualified Organization) such information as is
necessary for the application of any tax relating to the transfer of a Residual
Certificate to any Disqualified Organization and (ii) to the Certificateholders
such information or reports as are required by the Code or REMIC Provisions.
(g) The Trustee shall forward to the Depositor copies of quarterly
and annual Tax Returns and Form 1099 information returns and such other
information within the control of the Trustee as the Depositor may reasonably
request in writing. Moreover, the Trustee shall forward to Certificateholders
such forms and furnish such information within its control as are required by
the Code to be furnished to them, shall prepare and file with the appropriate
state authorities as may to the actual knowledge of a Responsible Officer of the
Trustee be required by applicable law and shall prepare and disseminate to
Certificateholders Forms 1099 (or otherwise furnish information within the
control of the Trustee) to the extent required by applicable law. The Trustee
will make available to any Certificateholder any tax related information
required to be made available to such Certificateholder pursuant to the Code and
any Treasury Regulations thereunder.
(h) The Holder of Certificates representing the greatest Percentage
Interest in each Class of Residual Certificates shall be the Tax Matters Person
for the related REMIC Pool; provided that if Treasury Regulations shall be
modified to require another Person to be designated as Tax Matters Person, then
such Person shall become Tax Matters Person at such time. The duties of the Tax
Matters
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Person for each of the REMIC Pools are hereby delegated to the Trustee, and each
Residual Certificateholder, by acceptance of its Residual Certificate, agrees,
on behalf of itself and all successor holders of such Residual Certificate, to
such delegation to the Trustee as their agent and attorney in fact. If the Code
or applicable Treasury regulations prohibits the Trustee from signing any
applicable Internal Revenue Service, court or other administrative documents or
from otherwise acting as Tax Matters Person (as an agent or otherwise), the
Trustee shall do or cause to be done whatever is necessary for the signing of
such documents and the taking of any other such act, and the Residual
Certificateholders shall reasonably cooperate with the Trustee in connection
therewith. The Trustee shall not be required to expend or risk its own funds or
otherwise incur any other financial liability in the performance of its duties
hereunder or in the exercise of any of its rights or powers (except to the
extent of the ordinary expenses of performing its duties under, or as otherwise
expressly provided in, this Agreement), if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.
(i) The Trustee, the Holders of the Residual Certificates, the
Master Servicer and the Special Servicer shall each exercise reasonable care, to
the extent within its control, and with respect to each of the Trustee, the
Master Servicer and the Special Servicer, within the scope of its express
duties, and shall each act in accordance with this Agreement and the REMIC
Provisions, in order to create and maintain the status of each REMIC Pool as a
REMIC and the grantor trust assets as a grantor trust or, as appropriate, adopt
a plan of complete liquidation in accordance with the REMIC Provisions and
Article X hereof.
(j) The Trustee, the Master Servicer, the Special Servicer, the
Fiscal Agent and the Holders of Residual Certificates shall not take any action
or fail to take any action or cause any REMIC Pool to take any action or fail to
take any action if any of such Persons knows or could, upon the exercise of
reasonable diligence, know, that, under the REMIC Provisions, such action or
failure to act, as the case may be, could (i) endanger the status of any REMIC
Pool as a REMIC or (ii) result in the imposition of a tax upon any REMIC Pool
(including but not limited to the tax on prohibited transactions as defined in
Section 860F(a)(2) of the Code, the tax on contributions to a REMIC set forth in
Section 860G(d) of the Code, or except as provided in Section 8.20(a) hereof,
result in the imposition of a tax on "net income from foreclosure property" as
defined in Section 860G(c) of the Code (any of the foregoing, an "ADVERSE REMIC
EVENT")), unless the Trustee has received an Opinion of Counsel (at the expense
of the party seeking to take such action) to the effect that the contemplated
action will not endanger such status or result in the imposition of such a tax.
Any action required under this Section which would result in an unusual or
unexpected expense shall be undertaken at the expense of the party seeking to
have the Trustee, the Master Servicer, the Special Servicer, the Fiscal Agent or
the Holders of the Residual Certificates undertake such action.
(k) In the event that any tax is imposed on the grantor trust or on
REMIC I, REMIC II or REMIC III, including, without limitation, "prohibited
transactions" taxes as defined in Section 860F(a)(2) of the Code, any tax on
"net income from foreclosure property" as defined in Section 860G(c) of the
Code, any taxes on contributions to REMIC I, REMIC II or REMIC III after the
Startup Day pursuant to Section 860G(d) of the Code, and any other tax imposed
by the Code or any applicable provisions of state or local tax laws (other than
any tax permitted to be incurred by the Special Servicer pursuant to Section
8.20(a)), such tax, together with all incidental costs and expenses (including,
without limitation, penalties and reasonable attorneys' fees), shall be charged
to and paid by: (i) the Trustee, if such tax arises out of or results from a
breach of any of its obligations under this Article XII; (ii) the Special
Servicer, if such tax arises out of or results from a breach by the Special
Servicer of any of its obligations under Article VIII or this Article XII; (iii)
the Master Servicer, if such tax arises out of or results from a breach by the
Master Servicer of any of its obligations under Article VIII or this Article
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XII; or (iv) the Trust in all other instances. Any tax permitted to be incurred
by the Special Servicer pursuant to Section 8.20(a) shall be charged to and paid
by the Master Servicer (at the direction of the Trust) from the net income
generated on the related REO Property. Any such amounts payable by the Trust in
respect of taxes shall be paid by the Master Servicer (at the direction of the
Trustee) out of amounts on deposit in the Collection Account or, if appropriate,
out of collections of Excess Interest.
(l) The Trustee shall, for federal income tax purposes, maintain
books and records with respect to each REMIC Pool on a calendar year and on an
accrual basis. The books and records shall be sufficient concerning the nature
and amount of each REMIC Pool's investments to show that such REMIC Pool has
complied with the REMIC Provisions.
(m) None of the Trustee, the Master Servicer or the Special Servicer
shall enter into any arrangement by which any REMIC Pool will receive a fee or
other compensation for services (other than under the circumstances described
in, and subject to the conditions of, Section 8.20(a)).
(n) In order to enable the Trustee to perform its duties as set
forth herein, the Depositor shall provide, or cause to be provided, to the
Trustee within ten (10) days after the Closing Date all information or data that
the Trustee reasonably determines to be relevant for tax purposes on the
valuations and offering prices of the Certificates, including, without
limitation, the yield, Prepayment Assumption, Issue Prices and projected cash
flows of the Senior Certificates, Subordinate Certificates and Residual
Certificates, as applicable, and the projected cash flows of the Mortgage Loans.
Thereafter, the Depositor shall provide to the Trustee or its designee, promptly
upon request therefor, any such additional information or data within the
Depositor's possession or knowledge that the Trustee may, from time to time,
reasonably request in order to enable the Trustee to perform its duties as set
forth herein. The Trustee is hereby directed to use any and all such information
or data provided by the Depositor in the preparation of all federal and state
income or franchise tax and information returns and reports for each REMIC Pool
and the grantor trust to Certificateholders as required herein. The Depositor
hereby indemnifies the Trustee, the Fiscal Agent and each REMIC Pool for any
losses, liabilities, damages, claims, expenses (including attorneys' fees) or
assessments against the Trustee, the Fiscal Agent and each REMIC Pool arising
from any errors or miscalculations of the Trustee pursuant to this Section that
result from any failure of the Depositor to provide, or to cause to be provided,
accurate information or data to the Trustee (but not resulting from the
methodology employed by the Trustee) on a timely basis and such indemnification
shall survive the termination of this Agreement and the termination or
resignation of the Trustee or Fiscal Agent; provided, however, that to the
extent that any Certificates have been transferred to a Seller under
circumstances in which the fair market value of such Certificates is their issue
price, the Depositor may exclusively rely on the accuracy of a determination of
such fair market value by such Seller in supplying information to the Trustee
pursuant to this Section 12.1(n).
The Trustee agrees that all such information or data so obtained by
it is to be regarded as confidential information and agrees that it shall use
its best reasonable efforts to retain in confidence, and shall ensure that its
officers, employees and representatives retain in confidence, and shall not
disclose, without the prior written consent of the Depositor, any or all of such
information or data, or make any use whatsoever (other than for the purposes
contemplated by this Agreement) of any such information or data without the
prior written consent of the Depositor, unless such information is generally
available to the public (other than as a result of a breach of this Section 12.1
(n)) or is required by law or applicable regulations to be disclosed or is
disclosed (i) to independent auditors and accountants, counsel and other
professional advisers of the Trustee and its parent, or (ii) in connection with
enforcing its rights and obligations under this Agreement.
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(o) At all times as may be required by the Code, the Trustee, the
Master Servicer and the Special Servicer each shall, to the extent within its
control and the scope of its duties more specifically set forth herein, maintain
the assets of each REMIC Pool as "qualified mortgages" as defined in Section
860G(a)(3) of the Code and "permitted investments" as defined in Section
860G(a)(5) of the Code, subject to the "de minimis" exception of Treasury
Regulations Section 1.860D-1(b)(3).
(p) the Holders of the Class R-I, Class R-II and Class R-III
Certificates shall pay when due their pro rata share of any and all federal,
state and local taxes imposed on REMIC I, REMIC II or REMIC III, as applicable,
or their respective assets or transactions, including, without limitation,
"prohibited transaction" taxes, as defined in Section 860F of the Code, any tax
on contributions imposed by Section 860G(d) of the Code, and any tax on "net
income from foreclosure property" as defined in Section 860G(c) of the Code. To
the extent that such taxes are not paid by the Class R-I, Class R-II or Class
R-III Certificateholders, respectively, the Trustee shall pay such remaining
REMIC taxes out of current or future amounts otherwise distributable to the
respective Holder or, if no such amounts are available, out of other amounts
held in the Distribution Account.
SECTION 12.2. PROHIBITED TRANSACTIONS AND ACTIVITIES. None of the
Trustee, the Master Servicer or the Special Servicer shall, to the extent within
its control, permit the sale, disposition or substitution of any of the Mortgage
Loans (except in a disposition pursuant to (i) the foreclosure, default or
imminent default of a Mortgage Loan, (ii) the bankruptcy or insolvency of any
REMIC Pool, (iii) the termination of the REMIC Pools in a "qualified
liquidation" as defined in Section 860F(a)(4) of the Code, or (iv) a repurchase
or substitution by any Seller, as contemplated by Article II hereof), nor
acquire any assets for the Trust, except as provided herein, nor sell or dispose
of any investments in the Collection Account or Distribution Account for gain,
nor accept any contributions to any REMIC Pool (other than a cash contribution
during the 3-month period beginning on the Startup Day), unless it has received
an Opinion of Counsel (at the expense of the Person requesting such action) to
the effect that such sale, disposition, acquisition, substitution, or acceptance
will not (a) affect adversely the status of any REMIC Pool as a REMIC or of the
REMIC I Regular Interests, the REMIC II Regular Interests, the REMIC III Regular
Certificates or the Component Interests of the Class X Certificates, as the case
may be, as the regular interests therein, (b) affect the distribution of
interest or principal on the Certificates, (c) result in the encumbrance of the
assets transferred or assigned to any REMIC Pool (except pursuant to the
provisions of this Agreement) or (d) cause any REMIC Pool to be subject to a tax
on "prohibited transactions" or "prohibited contributions" or other tax pursuant
to the REMIC Provisions.
SECTION 12.3. LIABILITY WITH RESPECT TO CERTAIN TAXES AND LOSS OF
REMIC STATUS. In the event that any REMIC Pool fails to qualify as a REMIC,
loses its status as a REMIC, or incurs state or local taxes, or tax as a result
of a prohibited transaction or prohibited contribution subject to taxation under
the REMIC Provisions due to the negligent performance by the Trustee of its
duties and obligations set forth herein, the Trustee shall be liable to the
REMIC Pools and the Holders of the Residual Certificates for any and all losses,
claims, damages, liabilities or expenses ("LOSSES") resulting from such
negligence and relating to the Residual Certificates; provided, however, that
the Trustee shall not be liable pursuant to this Section 12.3 to the extent that
any such Losses are attributable to the action or inaction of the Master
Servicer, the Special Servicer, the Depositor or the Holders of such Residual
Certificates or to the extent that any such Losses result from any actions or
failures to act taken in reliance on an Opinion of Counsel or misinformation
provided by the Master Servicer, the Special Servicer, the Depositor or such
Holders of the Residual Certificates. The foregoing 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.
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SECTION 12.4. MODIFICATIONS OF MORTGAGE LOANS. Notwithstanding
anything to the contrary in this Agreement, neither the Trustee, the Master
Servicer nor the Special Servicer shall permit any modification of any Money
Term of a Mortgage Loan or a Specially Serviced Mortgage Loan unless the Trustee
and the Master Servicer have received a Nondisqualification Opinion or a ruling
to the same effect as a Nondisqualification Opinion from the Internal Revenue
Service (at the expense of the party making the request that the Master Servicer
or the Special Servicer modify the Mortgage Loan or a Specially Serviced
Mortgage Loan) to the effect that such modification would not be treated as an
exchange pursuant to Section 1001 of the Code (or, if it would be so treated,
would not be treated as a "significant modification" for purposes of Treasury
regulation Section 1.860G-2(b) of the Code).
ARTICLE XIII.
MISCELLANEOUS PROVISIONS
SECTION 13.1. BINDING NATURE OF AGREEMENT. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
SECTION 13.2. ENTIRE AGREEMENT. This Agreement contains the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or written,
of any nature whatsoever with respect to the subject matter hereof. The express
terms hereof control and supersede any course of performance or usage of the
trade inconsistent with any of the terms hereof.
SECTION 13.3. AMENDMENT.
(a) This Agreement may be amended from time to time by the parties
hereto, without notice to or the consent of any of the Holders, (i) to cure any
ambiguity, (ii) to correct or supplement any provision herein which may be
inconsistent with any other provisions herein, (iii) to amend any provision
hereof to the extent necessary or desirable to maintain the status of each REMIC
Pool as a REMIC for the purposes of federal income tax law (or comparable
provisions of state income tax law), (iv) to make any other provisions with
respect to matters or questions ensuing under or with respect to this Agreement
not inconsistent with the provisions hereof, or (v) to modify, add to or
eliminate the provisions of Article III relating to transfers of Residual
Certificates as provided under such Article; provided that (x) no such amendment
shall adversely affect the status of any REMIC Pool as a REMIC and (y) no such
amendment effected pursuant to clause (i), (ii) or (iv) of the preceding
sentence shall adversely affect in any material respect the interests of any
Holder not consenting thereto. Prior to entering into any amendment without the
consent of Holders pursuant to this paragraph, the Trustee may require (at the
expense of the party requesting such amendment, except that if the Trustee
requests such amendment, such amendment shall be at the expense of the
Depositor, if the Depositor consents) a Nondisqualification Opinion and an
Opinion of Counsel to the effect that such amendment is permitted under this
paragraph. The placement of an "original issue discount" legend on, or any
change required to correct any such legend previously placed on, a Certificate
shall not be deemed an amendment to this Agreement.
(b) This Agreement may also be amended from time to time by the
parties hereto with the consent of the Holders of Certificates entitled to not
less than 51% of the Voting Rights allocated to all Classes affected by such
amendment, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders or the rights and obligations of any party
hereto; provided that no such amendment may
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(i) reduce in any manner the amount of, or delay the timing of the distributions
required to be made on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in the
immediately preceding clause (i), without the consent of all the Holders of
Certificates of such Class, or (iii) modify the provisions of this Section 13.3,
without the consent of all the Holders of Certificates. Prior to entering into
any amendment pursuant to this paragraph, the Trustee may require (at the
expense of the party requesting the amendment) a Nondisqualification Opinion and
an Opinion of Counsel to the effect that such amendment is permitted under this
paragraph.
(c) Promptly after the execution of any such amendment, the Trustee
shall furnish written notification of the substance of such amendment to each
Holder and the Rating Agencies.
(d) It shall not be necessary for the consent of Holders under this
Section 13.3 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Holders shall be in the affirmative and in writing and
shall be subject to such reasonable regulations as the Trustee may prescribe.
(e) Notwithstanding any other provision of this Agreement, for
purposes of the giving or withholding of consents pursuant to this Section 13.3,
Certificates registered in the name of the Depositor, the Master Servicer, the
Special Servicer or any of their respective Affiliates shall be entitled to the
same Voting Rights with respect to matters described above as they would if any
other Person held such Certificates.
SECTION 13.4. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS (WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED
IN THE STATE OF NEW YORK, OTHER THAN THE PRINCIPLES SET FORTH IN SECTION 5-1401
OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
SECTION 13.5. NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given when
received by (a) in the case of the Depositor, Morgan Stanley Capital I Inc.,
1585 Broadway, New York, New York 10036, Attention: John Kessler; (b) in the
case of the Trustee and the Fiscal Agent, at the Corporate Trust Office; (c) in
the case of Heller, Heller Financial Capital Funding, Inc., 500 West Monroe,
15th Floor, Chicago, Illinois 60661, Attention: Securitization Manager; (d) in
the case of the Master Servicer, GMAC Commercial Mortgage Corporation, 150 South
Wacker Drive, 28th Floor Chicago, Illinois 60606, facsimile number (312)
845-8617, Attention: Master Servicing,; with a copy to GMAC Commercial Mortgage
Corporation, 650 Dresher Road, P.O. Box 1015, Horsham, Pa. 19044-8015,
Attention: General Counsel, facsimile number (215) 328-3620; (e) in the case of
the Special Servicer, GMAC Commercial Mortgage Corporation, 550 California
Street, San Francisco, California 94101, Attention: CMBS Portfolio Manager,
facsimile number (415) 391-2949 with a copy to GMAC Commercial Mortgage
Corporation, 650 Dresher Road, P.O. Box 1015, Horsham, Pa. 19044, Attention:
General Counsel, facsimile number (215) 328-3620 or as to each party hereto such
other address as may hereafter be furnished by such party to the other parties
hereto in writing. Any notice required or permitted to be given to a Holder
shall be mailed by first class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register. Any notice so mailed within the
time prescribed in this Agreement shall be conclusively presumed to have been
duly given, whether or not the Holder receives such notice.
154
<PAGE>
SECTION 13.6. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
SECTION 13.7. INDULGENCES; NO WAIVERS. Neither the failure nor any
delay on the part of a party to exercise any right, remedy, power or privilege
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or of any other right, remedy, power or privilege,
and no waiver of any right, remedy, power or privilege with respect to any
occurrence shall be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence. No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted such
waiver.
SECTION 13.8. HEADINGS NOT TO AFFECT INTERPRETATION. The headings
contained in this Agreement are for convenience of reference only, and shall not
be used in the interpretation hereof.
SECTION 13.9. BENEFITS OF AGREEMENT. Nothing in this Agreement or in
the Certificates, express or implied, shall give to any Person, other than the
parties to this Agreement and their successors hereunder and the Holders of the
Certificates, any benefit or any legal or equitable right, power, remedy or
claim under this Agreement.
SECTION 13.10. SPECIAL NOTICES TO THE RATING AGENCIES.
(a) The Trustee (or, in the case of the items in clauses (vi) and
(vii), the successor trustee) shall give prompt notice to the Rating Agencies
and, except in the case of clause (viii), the Operating Adviser (or if no
Operating Adviser has been elected, the Majority Certificateholder of the
Controlling Class), of the occurrence of any of the following events of which it
has notice or actual knowledge:
(i) any amendment to this Agreement pursuant to Section 13.3
hereof;
(ii) any repurchase or replacement of any Mortgage Loan by a
Seller;
(iii) waiver of a due-on-sale or due-on-encumbrance clause as
provided in Section 8.6;
(iv) any resignation or removal of the Master Servicer, the
Special Servicer or the Fiscal Agent pursuant to this Agreement;
(v) the appointment of any successor to the Master Servicer,
the Special Servicer or the Fiscal Agent pursuant to this Agreement;
(vi) the resignation or removal of the Trustee pursuant to
Section 7.6;
(vii) the appointment of a successor trustee pursuant to
Section 7.7;
(viii) the election, resignation or removal of an Operating
Adviser pursuant to Section 8.32;
155
<PAGE>
(ix) termination of the Trust pursuant to Article X hereof;
(x) the final distribution to any Class of Certificateholders;
and
(xi) an Event of Default.
(b) All notices to the Rating Agencies shall be in writing and sent
by first class mail, telecopy or overnight courier, as follows:
If to DCR, to:
Duff & Phelps Credit Rating Co.
55 East Monroe Street
Chicago, Illinois 60603
Attention: Structured Finance Commercial Real Estate
Monitoring
Telecopy: (312) 263-2852
If to Fitch, to:
Fitch IBCA, Inc.
One State Street Plaza
New York, N.Y. 10004
Attention: Commercial Mortgage Surveillance
Telecopy: (212) 635-0295
If to any other Rating Agency, at such address as shall be provided
in writing to the Depositor by such Rating Agency.
(c) The Master Servicer and the Special Servicer shall each deliver
to the Trustee, and the Trustee shall deliver to the Rating Agencies and the
Depositor, copies of all reports prepared by the Master Servicer or Special
Servicer, as the case may be, pursuant to this Agreement and required to be
delivered to each other, the Trustee or the Certificateholders, together with
any other information as reasonably requested by the Rating Agencies and the
Depositor.
(d) Any notice or other document required to be delivered or mailed
by the Depositor, the Master Servicer, the Special Servicer or the Trustee shall
be given by such parties, respectively, on a best efforts basis and only as a
matter of courtesy and accommodation to the Rating Agencies, unless otherwise
specifically required herein, and such parties, respectively, shall have no
liability for failure to deliver any such notice or document to the Rating
Agencies.
SECTION 13.11. COUNTERPARTS. This Agreement may be executed in one
or more counterparts, each of which shall be deemed to be an original, and all
of which together shall constitute one and the same instrument.
SECTION 13.12. INTENTION OF PARTIES.
(a) It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans and related property to the Trustee, for the
benefit of the Certificateholders, by the Depositor as provided in Section 2.1
be, and be construed as, an absolute sale of the Mortgage Loans and related
property. It is, further, not the intention of the parties that such conveyance
be deemed a pledge of the
156
<PAGE>
Mortgage Loans and related property by the Depositor to the Trustee to secure a
debt or other obligation of the Depositor. However, in the event that,
notwithstanding the intent of the parties, such conveyance is held not to be an
absolute sale of the Mortgage Loans or any related property, or the Mortgage
Loans or any related property are for any other reason held to be the property
of the Depositor, then:
(i) This Agreement shall be deemed to be a security agreement.
(ii) The conveyance provided for in Section 2.1 shall be
deemed to be a grant by the Depositor to the Trustee, for the benefit of
the Certificateholders, of a security interest in all of the Depositor's
right, title, and interest, whether now owned or hereafter acquired, in
and to:
(A) All accounts, contract rights, general intangibles,
chattel paper, instruments, documents, money, deposit accounts,
certificates of deposit, goods, letters of credit, advises of credit and
uncertificated securities consisting of, arising from or relating to any
of the property described in clauses (1)-(4) below: (1) the Mortgage Loans
(including, without limitation, the Mortgage Notes, the related Mortgages,
the related security agreements, and the related title, hazard and other
insurance policies) identified on the Mortgage Loan Schedule, including
all Replacement Mortgage Loans, together with all payments and other
collections with respect thereto after the Cut-off Date (other than
Monthly Payments of principal and interest due on or before the Cut-off
Date) and the related Mortgage Files; (2) the Distribution Account and the
Collection Account, including, without limitation, all funds and
investments therein and all income from the investment of funds therein
(including any accrued discount realized on liquidation of any investment
purchased at a discount); (3) the REMIC I Regular Interests, the REMIC II
Regular Interests and the Certificates; and (4) the Mortgage Loan Purchase
Agreements;
(B) All accounts, contract rights, general intangibles,
chattel paper, instruments, documents, money, deposit accounts,
certificates of deposit, goods, letters of credit, advises of credit,
uncertificated securities, and other rights arising from or by virtue of
the disposition of, or collections with respect to, or insurance proceeds
payable with respect to, or claims against other Persons with respect to,
all or any part of the collateral described in clause (A) above (including
any accrued discount realized on liquidation of any investment purchased
at a discount); and
(C) All cash and non-cash proceeds of the collateral
described in clauses (A) and (B) above.
(iii) The possession by the Trustee of the Mortgage Notes, the
Mortgages and such other goods, letters of credit, advises of credit,
instruments, money, documents, chattel paper or certificated securities
shall be deemed to be "possession by the secured party," or possession by
a purchaser or a Person designated by him or her, for purposes of
perfecting the security interest pursuant to the Uniform Commercial Code
(including, without limitation, Sections 9-305, 8-313 or 8-321 thereof) as
in force in each relevant jurisdiction.
(iv) Notifications to Persons holding such property, and
acknowledgments, receipts or confirmations from Persons holding such
property, shall be deemed to be notifications to, or acknowledgments,
receipts or confirmations from, financial intermediaries, bailees or
agents (as applicable) of the Trustee for the purpose of perfecting such
security interest under applicable law.
157
<PAGE>
(b) The Depositor and, at the Depositor's direction, the Master
Servicer and the Trustee, at the Depositor's expense, shall, to the extent
consistent with this Agreement, take such reasonable actions as may be necessary
to ensure that, if this Agreement were deemed to create a security interest in
the property described above, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Master Servicer
shall file, at the direction and at the expense of the Depositor, all filings
necessary to maintain the effectiveness of any original filings necessary under
the Uniform Commercial Code as in effect in any relevant jurisdiction to perfect
the Trustee's security interest in such property, including, without limitation,
continuation statements. In connection herewith, the Trustee shall have all of
the rights and remedies of a secured party and creditor under the Uniform
Commercial Code as in force in the relevant jurisdiction.
(c) The Depositor shall not take any action inconsistent with the
Trust's ownership of the Mortgage Loans.
SECTION 13.13. RECORDATION OF AGREEMENT. This Agreement is subject
to recordation in all appropriate public offices for real property records in
all the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere. Such recordation, if any, shall be
effected by the Master Servicer at the expense of the Trust payable out of the
Collection Account, but only upon direction of the Trustee accompanied by an
Opinion of Counsel (the cost of which shall be payable out of the Collection
Account) to the effect that such recordation materially and beneficially affects
the interests of the Certificateholders of the Trust.
158
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
day and year first above written.
MORGAN STANLEY CAPITAL I INC.,
as Depositor
By:
-------------------------------------
Name:
Title:
GMAC COMMERCIAL MORTGAGE CORPORATION
as Master Servicer
By:
---------------------------------
Name:
Title:
GMAC COMMERCIAL MORTGAGE
CORPORATION,
as Special Servicer
By:
-------------------------------------
Name:
Title:
LASALLE NATIONAL BANK,
as Trustee
By:
-------------------------------------
Name:
Title:
ABN AMRO BANK N.V., as Fiscal Agent
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
159
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of November, 1998, before me, a notary public in
and for said State, personally appeared ________________________, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person who executed the within instrument as __________________________ on
behalf of MORGAN STANLEY CAPITAL I INC., and acknowledged to me that such
corporation executed the within instrument pursuant to its by-laws or a
resolution of its Board of Directors.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------------------
Notary Public
160
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of November, 1998, before me, a notary public in
and for said State, personally appeared _______________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person who executed the within instrument as
_____________________________ of GMAC COMMERCIAL MORTGAGE CORPORATION and
acknowledged to me that such corporation executed the within instrument pursuant
to its bylaws or a resolution of its Board of Directors.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------------------
Notary Public
161
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of November, 1998, before me, a notary public in
and for said State, personally appeared _____________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person who executed the within instrument as
_______________________________ on behalf of GMAC COMMERCIAL MORTGAGE
CORPORATION, and acknowledged to me that such corporation executed the within
instrument pursuant to its by-laws or a resolution of its Board of Directors.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------------------
Notary Public
162
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of November, 1998, before me, a notary public in
and for said State, personally appeared __________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person who executed the within instrument as
___________________________________ on behalf of LASALLE NATIONAL BANK, and
acknowledged to me that such nationally chartered bank executed the within
instrument pursuant to its by-laws or a resolution of its Board of Directors.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------------------
Notary Public
163
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of November, 1998, before me, a notary public in
and for said State, personally appeared _______________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be one of the persons who executed the within instrument as
_________________________________ on behalf of ABN AMRO BANK N.V., and
acknowledged to me that such banking corporation executed the within instrument
pursuant to its by-laws or a resolution of its Board of Directors.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------------------
Notary Public
164
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of November, 1998, before me, a notary public in
and for said State, personally appeared ______________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be one of the persons who executed the within instrument as
____________________________ on behalf of ABN AMRO BANK N.V., and acknowledged
to me that such banking corporation executed the within instrument pursuant to
its by-laws or a resolution of its Board of Directors.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------------------
Notary Public
165
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY CAPITAL I INC.,
as Depositor,
and
GMAC COMMERCIAL MORTGAGE CORPORATION,
as Master Servicer,
and
GMAC COMMERCIAL MORTGAGE CORPORATION,
as Special Servicer,
and
LASALLE NATIONAL BANK,
as Trustee,
and
ABN AMRO BANK N.V.,
as Fiscal Agent,
---------------------------------------
EXHIBITS AND SCHEDULES TO
POOLING AND SERVICING AGREEMENT
Dated as of November 1, 1998
---------------------------------------
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1998-HF2
- --------------------------------------------------------------------------------
<PAGE>
EXHIBITS
Exhibit A-1 Form of Class A-1 Certificate..................................A-1
Exhibit A-2 Form of Class A-2 Certificate..................................A-2
Exhibit A-3 Form of Class B Certificate....................................A-3
Exhibit A-4 Form of Class C Certificate....................................A-4
Exhibit A-5 Form of Class D Certificate....................................A-5
Exhibit A-6 Form of Class E Certificate....................................A-6
Exhibit A-7 Form of Class F Certificate....................................A-7
Exhibit A-8 Form of Class G Certificate....................................A-8
Exhibit A-9 Form of Class H Certificate....................................A-9
Exhibit A-10 Form of Class J Certificate ..................................A-10
Exhibit A-11 Form of Class K Certificate ..................................A-11
Exhibit A-12 Form of Class L Certificate ..................................A-12
Exhibit A-13 Form of Class M Certificate ..................................A-13
Exhibit A-14 Form of Class N Certificate ..................................A-14
Exhibit A-15 Form of Class R-I Certificate ................................A-15
Exhibit A-16 Form of Class R-II Certificate ...............................A-16
Exhibit A-17 Form of Class R-III Certificate ..............................A-17
Exhibit A-18 Form of Class X Certificate ..................................A-18
Exhibit B-1 Form of Initial Certification of Trustee.......................B-1
Exhibit B-2 Form of Final Certification of Trustee.........................B-2
Exhibit C Form of Request for Release......................................C
Exhibit D-1 Transfers of Definitive Privately Offered Certificates........D1-1
Exhibit D-2A Form I of Transferee Certificate For Transfers of Definitive
Privately Offered Certificates................................D2-1
Annex 1 Qualified Institutional Buyer Status Under SEC Rule 144A......D2-3
Annex 2 Qualified Institutional Buyer Status Under SEC Rule 144A......D2-6
Exhibit D-2B Form II of Transferee Certificate for Transfers of Definitive
Privately Offered Certificates................................D2-8
Exhibit D-3A Form I of Transferee Certificate for Transfers of Interests
in Book-Entry Privately Offered Certificates..................D3-1
Exhibit D-3B Form II of Transferee Certificate for Transfers of Interests
in Book-Entry Privately Offered Certificates..................D3-3
Annex 1 Qualified Institutional Buyer Status Under SEC Rule 144A......D3-5
Annex 2 Qualified Institutional Buyer Status Under SEC Rule 144A......D3-8
Exhibit E Form of Transferor Certificate for Transfers of REMIC
Residual Certificate.............................................E
Exhibit F Form of Transfer Affidavit and Agreement for Transfers of REMIC
Residual Certificates............................................F
Exhibit G-1 Form of Monthly Certificateholder Report.......................G-1
Exhibit G-2 Form of Specially Serviced Asset Report........................G-2
Exhibit H-1 Comparative Financial Status Report............................H-1
Exhibit H-2 Delinquent Loan Status Report..................................H-2
Exhibit H-3 Historical Loan Modification Report............................H-3
Exhibit H-4 Historical Loss Estimate Report .............................. H-4
Exhibit H-5 REO Status Report ............................................ H-5
Exhibit H-6 Watch List ....................................................H-6
Exhibit H-7 Operating Statement Analysis...................................H-7
Exhibit H-8 NOI Adjustment Worksheet ......................................H-8
Exhibit H-9 CSSA Reports ..................................................H-9
Exhibit H-10 CSSA Reports .................................................H-10
<PAGE>
Exhibit H-11 CSSA Reports .................................................H-11
SCHEDULES
Schedule I MSMC Loan Schedule...............................................I
Schedule II Heller Loan Schedule............................................II
<PAGE>
EXHIBIT A-1
[FORM OF CLASS A-1 CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, ANY UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER SERVICER,
THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL NOT BE
INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
NOTWITHSTANDING THE ABOVE, IF THE TRANSFEREE OF THIS CERTIFICATE IS AN EMPLOYEE
BENEFIT PLAN SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF ANY
SUCH PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE OR HOLD THIS CERTIFICATE,
SUCH PLAN OR SUCH PERSON MUST BE AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF
RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT").
THE PORTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THE CERTIFICATES EVIDENCED
BY THIS CERTIFICATE WILL BE DECREASED BY THE PORTION OF PRINCIPAL DISTRIBUTIONS,
REALIZED LOSSES AND CERTAIN EXPENSE LOSSES ON THE CERTIFICATES ALLOCABLE TO THIS
CLASS A-1 CERTIFICATE. ACCORDINGLY, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE LESS THAN THAT SET FORTH BELOW. ANYONE ACQUIRING THIS
CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE PRINCIPAL BALANCE BY INQUIRY
OF THE TRUSTEE.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
THIS CLASS A-1 CERTIFICATE WAS ISSUED ON NOVEMBER 12, 1998 AND IS NOT TREATED AS
HAVING BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX
PURPOSES. THE ISSUE PRICE OF THIS CERTIFICATE IS __________% OF THE ORIGINAL
PRINCIPAL AMOUNT OF THIS CERTIFICATE. HOWEVER, IT IS POSSIBLE THAT APPLICABLE
LAW AND TREASURY REGULATIONS COULD BE INTERPRETED TO PROVIDE THAT ALL INTEREST
PAYMENT ON THIS CERTIFICATE ARE TO BE TREATED AS PART OF THE STATED REDEMPTION
PRICE AT MATURITY OF THE CERTIFICATE (I.E., PRINCIPAL) AND WOULD NOT CONSTITUTE
QUALIFIED STATED INTEREST, THEREBY CAUSING THIS CERTIFICATE TO HAVE OID. IN SUCH
CASE, THE FOLLOWING INFORMATION WOULD BE APPLICABLE: (I) THE AMOUNT OF OID AS A
PERCENTAGE OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS CERTIFICATE WOULD BE
A-1-1
<PAGE>
APPROXIMATELY _______, (II) THE YIELD TO MATURITY OF THIS CERTIFICATE FOR
PURPOSES OF COMPUTING OID WOULD BE APPROXIMATELY _____ PER ANNUM, COMPOUNDED
MONTHLY, AND (III) THE TOTAL AMOUNT OF OID ALLOCABLE TO THE INITIAL ACCRUAL
PERIOD (NOVEMBER 12, 1998 TO DECEMBER 15, 1998) FOR PURPOSES OF COMPUTING OID ON
THIS CERTIFICATE AS A PERCENTAGE OF THE ORIGINAL AMOUNT OF THIS CERTIFICATE
WOULD BE APPROXIMATELY _____%. THE METHOD USED TO CALCULATE THE YIELD TO
MATURITY AND THE AMOUNT OF OID ALLOCABLE TO THE INITIAL ACCRUAL PERIOD IS THE
EXACT METHOD. THE ACTUAL YIELD TO MATURITY AND OID ON THIS CERTIFICATE MAY
DIFFER FROM THE PROJECTED AMOUNTS. THE PREPAYMENT ASSUMPTION USED IN CALCULATING
THE YIELD TO MATURITY IS 0% CPR AND THE PAYMENT OF THE BALLOON PAYMENT ON THE
HYPERAMORTIZATION LOANS. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT THE ASSUMED RATE OR ANY OTHER RATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
A-1-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
INITIAL PASS-THROUGH RATE: 6.01% CERTIFICATE PRINCIPAL BALANCE OF THIS
CLASS A-1 CERTIFICATE AS OF THE
CLOSING DATE $203,500,000
DATE OF POOLING & SERVICING MASTER SERVICER: GMAC COMMERCIAL
AGREEMENT: AS OF NOVEMBER 1, 1998 MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 INITIAL SPECIAL SERVICER:
GMAC COMMERCIAL MORTGAGE CORPORATION
CLOSING DATE: NOVEMBER 12, 1998 TRUSTEE: LASALLE NATIONAL BANK
FIRST DISTRIBUTION DATE: DECEMBER 15, FISCAL AGENT: ABN AMRO BANK N.V.
1998
AGGREGATE CERTIFICATE PRINCIPAL CUSIP NO.
BALANCE OF THE CLASS A-1 CERTIFICATE
AS OF THE CLOSING DATE: $203,500,000 NO. 1
CLASS A-1 CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of a
pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class A-1 Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of the
pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be held
in the Collection Account, the Distribution Account, the Insurance Policies and
any REO Properties. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Pooling and Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing an interest in the Class of
Certificates specified on the face hereof equal to the quotient expressed as a
percentage obtained by dividing the Certificate Principal Balance of this
Certificate specified on the face hereof by the aggregate initial Certificate
Principal Balance of the Class A-1 Certificates. The Certificates are designated
as the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2 and are issued in sixteen Classes as
A-1-3
<PAGE>
specifically set forth in the Pooling and Servicing Agreement. The Certificates
will evidence in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and Servicing
Agreement and reference is made to the Pooling and Servicing Agreement for
information with respect to the interests, rights, benefits, obligations,
proceeds, and duties evidenced hereby and the rights, duties and obligations of
the Trustee. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Pooling and Servicing Agreement, to which
Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which the
Certificateholder is bound. In the case of any conflict between terms specified
in this Certificate and terms specified in the Pooling and Servicing Agreement,
the terms of the Pooling and Servicing Agreement shall govern.
Distributions of principal of and interest on this Certificate will be
made out of the Available Distribution Amount, to the extent and subject to the
limitations set forth in the Pooling and Servicing Agreement, on the 15th day of
each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (a "Distribution Date") commencing on the first Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"). All sums
distributable on this Certificate are payable in the coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
Interest on this Certificate will accrue (computed as if each year
consisted of 360 days and each month consisted of 30 days) during the Interest
Accrual Period relating to such Distribution Date at a Pass-Through Rate
calculated as specified in the Pooling and Servicing Agreement on the
Certificate Principal Balance of this Certificate immediately prior to each
Distribution Date. Principal and interest allocated to this Certificate on any
Distribution Date will be in an amount due to this Certificate's pro rata share
of the amount to be distributed on the Certificates of this Class as of such
Distribution Date, with a final distribution to be made upon retirement of this
Certificate as set forth in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement or be valid
for any purpose.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses and
interest shortfalls on the Mortgage Loans allocated to any Class of Certificates
will be allocated pro rata among the outstanding Certificates of such Class.
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
in the Pooling and Servicing Agreement. As provided in the Pooling and Servicing
Agreement, withdrawals from the Collection Account shall be made from time to
time for purposes other than distributions to Certificateholders, such purposes
including reimbursement of certain expenses incurred with respect to the
servicing of the Mortgage Loans and administration of the Trust.
All distributions under the Pooling and Servicing Agreement to a nominee
of The Depository Trust Company ("DTC") will be made by or on behalf of the
Trustee by wire transfer in immediately available funds to an account specified
in the request of such Certificateholder. All distributions under the Pooling
and Servicing Agreement to Certificateholders will be made by wire transfer in
immediately available funds to the account specified by the Certificateholder,
at a bank or other entity having appropriate facilities therefor, if such
Certificateholder will have provided the Trustee with wiring instructions no
more than five business days after the related Record Date, or otherwise by
check mailed to such Certificateholder. Notwithstanding the above, the
A-1-4
<PAGE>
final distribution on any Certificate will be made only upon presentation and
surrender of such Certificate at the location that will be specified in a notice
of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of the aggregate Certificate Principal Balance of the Certificates then
outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon the Certificate. The
Pooling and Servicing Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the Corporate Trust Office of the Trustee, duly endorsed by, or
accompanied by an assignment in the form below or other written instrument of
transfer in form satisfactory to the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations will be issued to the designated transferee or transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class A-1
and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations of
$100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates registered
in the name of Cede & Co., as nominee of the DTC. No Certificate Owner will be
entitled to receive a Definitive Certificate representing such interest, except
under the limited circumstances described in the Pooling and Servicing
Agreement. The Residual Certificates will be issued in fully registered,
certificated form in minimum percentage interests of 10% and in multiples of 10%
in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Trustee, the Fiscal Agent, the
Master Servicer, the Special Servicer, the Certificate Registrar nor any such
agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby (other
than the obligation of the Trustee to make payments to the Certificateholders as
set forth in Section 10.2 of the Pooling and Servicing Agreement and other than
the obligations in the nature of information or tax reporting) shall terminate
on the earliest of (i) the later of (A) the final payment or other liquidation
of the last Mortgage Loan remaining in the Trust and (B) the disposition of all
REO Property or (ii) the sale of the property held by the Trust in accordance
with Section 10.1(b) of the Pooling and Servicing Agreement; provided that in no
event shall the Trust continue beyond the expiration of 21 years from the death
of the last survivor of the descendants of Joseph P. Kennedy, the late
Ambassador of the United States to the Court of St. James, living on the date
hereof. The parties
A-1-5
<PAGE>
designated in the Pooling and Servicing Agreement may exercise their option to
purchase the Mortgage Loans and any other property remaining in the Trust and
cause the termination of the Trust in accordance with the requirements set forth
in the Pooling and Servicing Agreement. Upon termination of the Trust and
payment of the Certificates and of all administrative expenses associated with
the Trust, any remaining assets of the Trust shall be distributed to the holders
of the Class R-I Certificates.
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-1-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:___________________________________
AUTHORIZED OFFICER
Dated:
A-1-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS A-1 CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
By:___________________________________
AUTHORIZED SIGNATORY
A-1-8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT ......Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.................
common (State)
Additional abbreviations may also be used though not in the above list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------------------
- ------------------------------------------
-------------------------------------
- --------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- --------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- --------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the within-named
Trust, with full power of substitution in the premises.
Dated:
-------------------------- ---------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of this Certificate in every particular
without alteration or enlargement or any
change whatever.
- --------------------------------
SIGNATURE GUARANTEED
The signature must be guaranteed
by a commercial bank or trust
company or by a member firm of
the New York Stock Exchange or
another national securities
exchange. Notarized or witnessed
signatures are not acceptable.
A-1-9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________ for the account of _____________________ account
number _____________________ or, if mailed by check, to _________________.
Statements should be mailed to ______________. This information is provided by
assignee named above, or ____________________________, as its agent.
A-1-10
<PAGE>
EXHIBIT A-2
[FORM OF CLASS A-2 CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
NOTWITHSTANDING THE ABOVE, IF THE TRANSFEREE OF THIS CERTIFICATE IS AN EMPLOYEE
BENEFIT PLAN SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF ANY
SUCH PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE OR HOLD THIS CERTIFICATE,
SUCH PLAN OR SUCH PERSON MUST BE AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF
RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT").
THE PORTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THE CERTIFICATES EVIDENCED
BY THIS CERTIFICATE WILL BE DECREASED BY THE PORTION OF PRINCIPAL DISTRIBUTIONS,
REALIZED LOSSES AND CERTAIN EXPENSE LOSSES ON THE CERTIFICATES ALLOCABLE TO THIS
CLASS A-2 CERTIFICATE. ACCORDINGLY, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE LESS THAN THAT SET FORTH BELOW. ANYONE ACQUIRING THIS
CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE PRINCIPAL BALANCE BY INQUIRY
OF THE TRUSTEE.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
THIS CLASS A-2 CERTIFICATE WAS ISSUED ON NOVEMBER 12, 1998 AND IS NOT TREATED AS
HAVING BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX
PURPOSES. THE ISSUE PRICE OF THIS CERTIFICATE IS __________% OF THE ORIGINAL
PRINCIPAL AMOUNT OF THIS CERTIFICATE. HOWEVER, IT IS POSSIBLE THAT APPLICABLE
LAW AND TREASURY REGULATIONS COULD BE INTERPRETED TO PROVIDE THAT ALL INTEREST
PAYMENT ON THIS CERTIFICATE ARE TO BE TREATED AS PART OF THE STATED REDEMPTION
PRICE AT MATURITY OF THE CERTIFICATE (I.E., PRINCIPAL) AND WOULD NOT CONSTITUTE
QUALIFIED STATED INTEREST, THEREBY CAUSING THIS CERTIFICATE TO HAVE OID. IN SUCH
CASE, THE FOLLOWING INFORMATION WOULD BE APPLICABLE: (I) THE AMOUNT OF OID AS A
PERCENTAGE OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS CERTIFICATE WOULD BE
APPROXIMATELY _______, (II) THE YIELD TO MATURITY OF THIS CERTIFICATE FOR
PURPOSES OF COMPUTING OID WOULD BE APPROXIMATELY _____ PER ANNUM, COMPOUNDED
MONTHLY, AND (III) THE TOTAL AMOUNT OF OID ALLOCABLE TO THE INITIAL ACCRUAL
PERIOD (NOVEMBER 12, 1998 TO DECEMBER 15, 1998) FOR PURPOSES OF COMPUTING OID ON
THIS CERTIFICATE AS A PERCENTAGE OF THE ORIGINAL AMOUNT OF THIS CERTIFICATE
WOULD BE APPROXIMATELY _____%. THE METHOD USED TO CALCULATE THE YIELD TO
MATURITY AND THE AMOUNT OF OID ALLOCABLE TO THE INITIAL ACCRUAL PERIOD IS THE
EXACT METHOD.
A-2-1
<PAGE>
THE ACTUAL YIELD TO MATURITY AND OID ON THIS CERTIFICATE MAY DIFFER FROM THE
PROJECTED AMOUNTS. THE PREPAYMENT ASSUMPTION USED IN CALCULATING THE YIELD TO
MATURITY IS 0% CPR AND THE PAYMENT OF THE BALLOON PAYMENT ON THE
HYPERAMORTIZATION LOANS. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT THE ASSUMED RATE OR ANY OTHER RATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
A-2-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
INITIAL PASS-THROUGH RATE: 6.48% CERTIFICATE PRINCIPAL BALANCE OF THIS
CLASS A-2 CERTIFICATE AS OF THE
CLOSING DATE $547,759,000
DATE OF POOLING & SERVICING MASTER SERVICER: GMAC COMMERCIAL
AGREEMENT: AS OF MARCH 1, 1998 MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER1, 1998 INITIAL SPECIAL SERVICER: GMAC
COMMERCIAL MORTGAGE CORPORATION
CLOSING DATE: NOVEMBER 12, 1998 TRUSTEE: LASALLE NATIONAL BANK
FIRST DISTRIBUTION DATE: FISCAL AGENT: ABN AMRO BANK N.V.
DECEMBER 15, 1998
AGGREGATE CERTIFICATE PRINCIPAL CUSIP NO.
BALANCE OF THE CLASS A-2 CERTIFICATE
AS OF THE CLOSING DATE: $547,759,000 NO. 1
CLASS A-2 CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of a
pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class A-2 Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of the
pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be held
in the Collection Account, the Distribution Account, the Insurance Policies and
any REO Properties. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Pooling and Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing an interest in the Class of
Certificates specified on the face hereof equal to the quotient expressed as a
percentage obtained by dividing the Certificate Principal Balance of this
Certificate specified on the face hereof by the aggregate initial Certificate
Principal Balance of the Class A-2 Certificates. The Certificates are designated
as the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2 and are issued in sixteen Classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will evidence
in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and Servicing
Agreement and reference is made to the Pooling and Servicing Agreement for
information with respect to the interests, rights, benefits,
A-2-3
<PAGE>
obligations, proceeds, and duties evidenced hereby and the rights, duties and
obligations of the Trustee. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which the
Certificateholder is bound. In the case of any conflict between terms specified
in this Certificate and terms specified in the Pooling and Servicing Agreement,
the terms of the Pooling and Servicing Agreement shall govern.
Distributions of principal of and interest on this Certificate will be
made out of the Available Distribution Amount, to the extent and subject to the
limitations set forth in the Pooling and Servicing Agreement, on the 15th day of
each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (a "Distribution Date") commencing on the first Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"). All sums
distributable on this Certificate are payable in the coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
Interest on this Certificate will accrue (computed as if each year
consisted of 360 days and each month consisted of 30 days) during the Interest
Accrual Period relating to such Distribution Date at a Pass-Through Rate
calculated as specified in the Pooling and Servicing Agreement on the
Certificate Principal Balance of this Certificate immediately prior to each
Distribution Date. Principal and interest allocated to this Certificate on any
Distribution Date will be in an amount due to this Certificate's pro rata share
of the amount to be distributed on the Certificates of this Class as of such
Distribution Date, with a final distribution to be made upon retirement of this
Certificate as set forth in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement or be valid
for any purpose.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses and
interest shortfalls on the Mortgage Loans allocated to any Class of Certificates
will be allocated pro rata among the outstanding Certificates of such Class.
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
in the Pooling and Servicing Agreement. As provided in the Pooling and Servicing
Agreement, withdrawals from the Collection Account shall be made from time to
time for purposes other than distributions to Certificateholders, such purposes
including reimbursement of certain expenses incurred with respect to the
servicing of the Mortgage Loans and administration of the Trust.
All distributions under the Pooling and Servicing Agreement to a nominee
of The Depository Trust Company ("DTC") will be made by or on behalf of the
Trustee by wire transfer in immediately available funds to an account specified
in the request of such Certificateholder. All distributions under the Pooling
and Servicing Agreement to Certificateholders will be made by wire transfer in
immediately available funds to the account specified by the Certificateholder,
at a bank or other entity having appropriate facilities therefor, if such
Certificateholder will have provided the Trustee with wiring instructions no
more than five business days after the related Record Date, or otherwise by
check mailed to such Certificateholder. Notwithstanding the above, the final
distribution on any Certificate will be made only upon presentation and
surrender of such Certificate at the location that will be specified in a notice
of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of the aggregate Certificate Principal Balance of the Certificates then
outstanding, as specified in the Pooling and
A-2-4
<PAGE>
Servicing Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon the Certificate. The Pooling and Servicing Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the Corporate Trust Office of the Trustee, duly endorsed by, or
accompanied by an assignment in the form below or other written instrument of
transfer in form satisfactory to the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations will be issued to the designated transferee or transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class A-1
and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations of
$100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates registered
in the name of Cede & Co., as nominee of the DTC. No Certificate Owner will be
entitled to receive a Definitive Certificate representing such interest, except
under the limited circumstances described in the Pooling and Servicing
Agreement. The Residual Certificates will be issued in fully registered,
certificated form in minimum percentage interests of 10% and in multiples of 10%
in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Trustee, the Fiscal Agent, the
Master Servicer, the Special Servicer, the Certificate Registrar nor any such
agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby (other
than the obligation of the Trustee to make payments to the Certificateholders as
set forth in Section 10.2 of the Pooling and Servicing Agreement and other than
the obligations in the nature of information or tax reporting) shall terminate
on the earliest of (i) the later of (A) the final payment or other liquidation
of the last Mortgage Loan remaining in the Trust and (B) the disposition of all
REO Property or (ii) the sale of the property held by the Trust in accordance
with Section 10.1(b) of the Pooling and Servicing Agreement; provided that in no
event shall the Trust continue beyond the expiration of 21 years from the death
of the last survivor of the descendants of Joseph P. Kennedy, the late
Ambassador of the United States to the Court of St. James, living on the date
hereof. The parties designated in the Pooling and Servicing Agreement may
exercise their option to purchase the Mortgage Loans and any other property
remaining in the Trust and cause the termination of the Trust in accordance with
the requirements set forth in the Pooling and Servicing Agreement. Upon
termination of the Trust and payment of the Certificates and of all
administrative expenses associated with the Trust, any remaining assets of the
Trust shall be distributed to the holders of the Class R-I Certificates.
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
A-2-5
<PAGE>
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-2-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:___________________________________
AUTHORIZED OFFICER
Dated:
A-2-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS A-2 CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
By:___________________________________
AUTHORIZED SIGNATORY
A-2-8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT ......Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.................
common (State)
Additional abbreviations may also be used though not in the above list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------------------
- ------------------------------------------
-------------------------------------
- --------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- --------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- --------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the within-named
Trust, with full power of substitution in the premises.
Dated:
-------------------------- ---------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of this Certificate in every particular
without alteration or enlargement or any
change whatever.
- --------------------------------
SIGNATURE GUARANTEED
The signature must be guaranteed
by a commercial bank or trust
company or by a member firm of
the New York Stock Exchange or
another national securities
exchange. Notarized or witnessed
signatures are not acceptable.
A-2-9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________ for the account of _____________________ account
number _____________________ or, if mailed by check, to _________________.
Statements should be mailed to ______________. This information is provided by
assignee named above, or ____________________________, as its agent.
A-2-10
<PAGE>
EXHIBIT A-3
[FORM OF CLASS B CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
NOTWITHSTANDING THE ABOVE, THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, EXCEPT FOR AN
INSURANCE COMPANY INVESTING SOLELY ASSETS OF ITS GENERAL ACCOUNT, WHICH SHALL BE
DEEMED TO HAVE REPRESENTED AND WARRANTED THAT THE PURCHASE AND OWNERSHIP OF THIS
CERTIFICATE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA
AND SECTION 4975 OF THE CODE.
THIS CLASS B CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN OTHER
CLASSES OF CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THE PORTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THE CERTIFICATES EVIDENCED
BY THIS CERTIFICATE WILL BE DECREASED BY THE PORTION OF PRINCIPAL DISTRIBUTIONS,
REALIZED LOSSES AND CERTAIN EXPENSE LOSSES ON THE CERTIFICATES ALLOCABLE TO THIS
CLASS B CERTIFICATE. ACCORDINGLY, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE LESS THAN THAT SET FORTH BELOW. ANYONE ACQUIRING THIS
CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE PRINCIPAL BALANCE BY INQUIRY
OF THE TRUSTEE.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
THIS CLASS B CERTIFICATE WAS ISSUED ON NOVEMBER 12, 1998 AND IS NOT TREATED AS
HAVING BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX
PURPOSES. THE ISSUE PRICE OF THIS CERTIFICATE IS __________% OF THE ORIGINAL
PRINCIPAL AMOUNT OF THIS CERTIFICATE. HOWEVER, IT IS POSSIBLE THAT APPLICABLE
LAW AND TREASURY REGULATIONS COULD BE INTERPRETED TO PROVIDE THAT ALL INTEREST
PAYMENT ON THIS CERTIFICATE ARE TO BE TREATED AS PART OF THE STATED REDEMPTION
PRICE AT MATURITY OF THE CERTIFICATE (I.E., PRINCIPAL) AND WOULD NOT CONSTITUTE
QUALIFIED STATED INTEREST, THEREBY CAUSING THIS CERTIFICATE TO HAVE OID. IN SUCH
CASE, THE FOLLOWING INFORMATION WOULD BE APPLICABLE: (I) THE AMOUNT OF OID AS A
PERCENTAGE OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS CERTIFICATE WOULD BE
APPROXIMATELY _______, (II) THE YIELD TO MATURITY OF THIS CERTIFICATE FOR
PURPOSES OF COMPUTING OID WOULD BE APPROXIMATELY _____ PER ANNUM, COMPOUNDED
MONTHLY, AND (III) THE TOTAL AMOUNT OF OID ALLOCABLE TO THE INITIAL ACCRUAL
PERIOD (NOVEMBER 12, 1998 TO DECEMBER 15, 1998) FOR PURPOSES
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<PAGE>
OF COMPUTING OID ON THIS CERTIFICATE AS A PERCENTAGE OF THE ORIGINAL AMOUNT OF
THIS CERTIFICATE WOULD BE APPROXIMATELY _____%. THE METHOD USED TO CALCULATE THE
YIELD TO MATURITY AND THE AMOUNT OF OID ALLOCABLE TO THE INITIAL ACCRUAL PERIOD
IS THE EXACT METHOD. THE ACTUAL YIELD TO MATURITY AND OID ON THIS CERTIFICATE
MAY DIFFER FROM THE PROJECTED AMOUNTS. THE PREPAYMENT ASSUMPTION USED IN
CALCULATING THE YIELD TO MATURITY IS 0% CPR AND THE PAYMENT OF THE BALLOON
PAYMENT ON THE HYPERAMORTIZATION LOANS. NO REPRESENTATION IS MADE THAT THE
MORTGAGE LOANS WILL PREPAY AT THE ASSUMED RATE OR ANY OTHER RATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
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<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
INITIAL PASS-THROUGH RATE: 6.71% CERTIFICATE PRINCIPAL BALANCE OF THIS
CLASS B CERTIFICATE AS OF THE CLOSING
DATE $52,906,000
DATE OF POOLING & SERVICING MASTER SERVICER: GMAC COMMERCIAL
AGREEMENT: AS OF NOVEMBER 1, 1998 MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 INITIAL SPECIAL SERVICER: GMAC
COMMERCIAL MORTGAGE CORPORATION
CLOSING DATE: NOVEMBER 12, 1998 TRUSTEE: LASALLE NATIONAL BANK
FIRST DISTRIBUTION DATE: FISCAL AGENT: ABN AMRO BANK N.V.
DECEMBER 15, 1998
AGGREGATE CERTIFICATE PRINCIPAL CUSIP NO.
BALANCE OF THE CLASS B CERTIFICATE AS
OF THE CLOSING DATE: $52,906,000 NO. 1
CLASS B CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of a
pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class B Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of the
pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be held
in the Collection Account, the Distribution Account, the Insurance Policies and
any REO Properties. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Pooling and Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing an interest in the Class of
Certificates specified on the face hereof equal to the quotient expressed as a
percentage obtained by dividing the Certificate Principal Balance of this
Certificate specified on the face hereof by the aggregate initial Certificate
Principal Balance of the Class B Certificates. The Certificates are designated
as the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2 and are issued in sixteen Classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will evidence
in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and Servicing
Agreement and reference is made to the Pooling and Servicing Agreement for
information with respect to the interests, rights, benefits, obligations,
proceeds, and duties evidenced hereby and the rights, duties and obligations of
the Trustee. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Pooling and Servicing
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<PAGE>
Agreement, to which Pooling and Servicing Agreement, as amended from time to
time, the Certificateholder by virtue of the acceptance hereof assents and by
which the Certificateholder is bound. In the case of any conflict between terms
specified in this Certificate and terms specified in the Pooling and Servicing
Agreement, the terms of the Pooling and Servicing Agreement shall govern.
Distributions of principal of and interest on this Certificate will be
made out of the Available Distribution Amount, to the extent and subject to the
limitations set forth in the Pooling and Servicing Agreement, on the 15th day of
each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (a "Distribution Date") commencing on the first Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"). All sums
distributable on this Certificate are payable in the coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
Interest on this Certificate will accrue (computed as if each year
consisted of 360 days and each month consisted of 30 days) during the Interest
Accrual Period relating to such Distribution Date at a Pass-Through Rate
calculated as specified in the Pooling and Servicing Agreement on the
Certificate Principal Balance of this Certificate immediately prior to each
Distribution Date. Principal and interest allocated to this Certificate on any
Distribution Date will be in an amount due to this Certificate's pro rata share
of the amount to be distributed on the Certificates of this Class as of such
Distribution Date, with a final distribution to be made upon retirement of this
Certificate as set forth in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement or be valid
for any purpose.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses and
interest shortfalls on the Mortgage Loans allocated to any Class of Certificates
will be allocated pro rata among the outstanding Certificates of such Class.
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
in the Pooling and Servicing Agreement. As provided in the Pooling and Servicing
Agreement, withdrawals from the Collection Account shall be made from time to
time for purposes other than distributions to Certificateholders, such purposes
including reimbursement of certain expenses incurred with respect to the
servicing of the Mortgage Loans and administration of the Trust.
All distributions under the Pooling and Servicing Agreement to a nominee
of The Depository Trust Company ("DTC") will be made by or on behalf of the
Trustee by wire transfer in immediately available funds to an account specified
in the request of such Certificateholder. All distributions under the Pooling
and Servicing Agreement to Certificateholders will be made by wire transfer in
immediately available funds to the account specified by the Certificateholder,
at a bank or other entity having appropriate facilities therefor, if such
Certificateholder will have provided the Trustee with wiring instructions no
more than five business days after the related Record Date, or otherwise by
check mailed to such Certificateholder. Notwithstanding the above, the final
distribution on any Certificate will be made only upon presentation and
surrender of such Certificate at the location that will be specified in a notice
of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of the aggregate Certificate Principal Balance of the Certificates then
outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in
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<PAGE>
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon the Certificate. The Pooling and Servicing Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the Corporate Trust Office of the Trustee, duly endorsed by, or
accompanied by an assignment in the form below or other written instrument of
transfer in form satisfactory to the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations will be issued to the designated transferee or transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class A-1
and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations of
$100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates registered
in the name of Cede & Co., as nominee of the DTC. No Certificate Owner will be
entitled to receive a Definitive Certificate representing such interest, except
under the limited circumstances described in the Pooling and Servicing
Agreement. The Residual Certificates will be issued in fully registered,
certificated form in minimum percentage interests of 10% and in multiples of 10%
in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Trustee, the Fiscal Agent, the
Master Servicer, the Special Servicer, the Certificate Registrar nor any such
agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby (other
than the obligation of the Trustee to make payments to the Certificateholders as
set forth in Section 10.2 of the Pooling and Servicing Agreement and other than
the obligations in the nature of information or tax reporting) shall terminate
on the earliest of (i) the later of (A) the final payment or other liquidation
of the last Mortgage Loan remaining in the Trust and (B) the disposition of all
REO Property or (ii) the sale of the property held by the Trust in accordance
with Section 10.1(b) of the Pooling and Servicing Agreement; provided that in no
event shall the Trust continue beyond the expiration of 21 years from the death
of the last survivor of the descendants of Joseph P. Kennedy, the late
Ambassador of the United States to the Court of St. James, living on the date
hereof. The parties designated in the Pooling and Servicing Agreement may
exercise their option to purchase the Mortgage Loans and any other property
remaining in the Trust and cause the termination of the Trust in accordance with
the requirements set forth in the Pooling and Servicing Agreement. Upon
termination of the Trust and payment of the Certificates and of all
administrative expenses associated with the Trust, any remaining assets of the
Trust shall be distributed to the holders of the Class R-I Certificates.
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
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<PAGE>
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
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<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:___________________________________
AUTHORIZED OFFICER
Dated:
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<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS B CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
By:___________________________________
AUTHORIZED SIGNATORY
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<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT ......Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.................
common (State)
Additional abbreviations may also be used though not in the above list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------------------
- ------------------------------------------
-------------------------------------
- --------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- --------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- --------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the within-named
Trust, with full power of substitution in the premises.
Dated:
-------------------------- ---------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of this Certificate in every particular
without alteration or enlargement or any
change whatever.
- --------------------------------
SIGNATURE GUARANTEED
The signature must be guaranteed
by a commercial bank or trust
company or by a member firm of
the New York Stock Exchange or
another national securities
exchange. Notarized or witnessed
signatures are not acceptable.
A-3-9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________ for the account of _____________________ account
number _____________________ or, if mailed by check, to _________________.
Statements should be mailed to ______________. This information is provided by
assignee named above, or ____________________________, as its agent.
A-3-10
<PAGE>
EXHIBIT A-4
[FORM OF CLASS C CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
NOTWITHSTANDING THE ABOVE, THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, EXCEPT FOR AN
INSURANCE COMPANY INVESTING SOLELY ASSETS OF ITS GENERAL ACCOUNT, WHICH SHALL BE
DEEMED TO HAVE REPRESENTED AND WARRANTED THAT THE PURCHASE AND OWNERSHIP OF THIS
CERTIFICATE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA
AND SECTION 4975 OF THE CODE.
THIS CLASS C CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN OTHER
CLASSES OF CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THE PORTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THE CERTIFICATES EVIDENCED
BY THIS CERTIFICATE WILL BE DECREASED BY THE PORTION OF PRINCIPAL DISTRIBUTIONS,
REALIZED LOSSES AND CERTAIN EXPENSE LOSSES ON THE CERTIFICATES ALLOCABLE TO THIS
CLASS C CERTIFICATE. ACCORDINGLY, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE LESS THAN THAT SET FORTH BELOW. ANYONE ACQUIRING THIS
CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE PRINCIPAL BALANCE BY INQUIRY
OF THE TRUSTEE.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
THIS CLASS C CERTIFICATE WAS ISSUED ON NOVEMBER 12, 1998 AND IS NOT TREATED AS
HAVING BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX
PURPOSES. THE ISSUE PRICE OF THIS CERTIFICATE IS __________% OF THE ORIGINAL
PRINCIPAL AMOUNT OF THIS CERTIFICATE. HOWEVER, IT IS POSSIBLE THAT APPLICABLE
LAW AND TREASURY REGULATIONS COULD BE INTERPRETED TO PROVIDE THAT ALL INTEREST
PAYMENT ON THIS CERTIFICATE ARE TO BE TREATED AS PART OF THE STATED REDEMPTION
PRICE AT MATURITY OF THE CERTIFICATE (I.E., PRINCIPAL) AND WOULD NOT CONSTITUTE
QUALIFIED STATED INTEREST, THEREBY CAUSING THIS CERTIFICATE TO HAVE OID. IN SUCH
CASE, THE FOLLOWING INFORMATION WOULD BE APPLICABLE: (I) THE AMOUNT OF OID AS A
PERCENTAGE OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS CERTIFICATE WOULD BE
APPROXIMATELY _______, (II) THE YIELD TO MATURITY OF THIS CERTIFICATE FOR
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<PAGE>
PURPOSES OF COMPUTING OID WOULD BE APPROXIMATELY _____ PER ANNUM, COMPOUNDED
MONTHLY, AND (III) THE TOTAL AMOUNT OF OID ALLOCABLE TO THE INITIAL ACCRUAL
PERIOD (NOVEMBER 12, 1998 TO DECEMBER 15, 1998) FOR PURPOSES OF COMPUTING OID ON
THIS CERTIFICATE AS A PERCENTAGE OF THE ORIGINAL AMOUNT OF THIS CERTIFICATE
WOULD BE APPROXIMATELY _____%. THE METHOD USED TO CALCULATE THE YIELD TO
MATURITY AND THE AMOUNT OF OID ALLOCABLE TO THE INITIAL ACCRUAL PERIOD IS THE
EXACT METHOD. THE ACTUAL YIELD TO MATURITY AND OID ON THIS CERTIFICATE MAY
DIFFER FROM THE PROJECTED AMOUNTS. THE PREPAYMENT ASSUMPTION USED IN CALCULATING
THE YIELD TO MATURITY IS 0% CPR AND THE PAYMENT OF THE BALLOON PAYMENT ON THE
HYPERAMORTIZATION LOANS. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT THE ASSUMED RATE OR ANY OTHER RATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
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<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
INITIAL PASS-THROUGH RATE: 7.11% CERTIFICATE PRINCIPAL BALANCE OF THIS
CLASS C CERTIFICATE AS OF THE CLOSING
DATE $52,905,000
DATE OF POOLING & SERVICING MASTER SERVICER: GMAC COMMERCIAL
AGREEMENT: AS OF NOVEMBER 1, 1998 MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 INITIAL SPECIAL SERVICER: GMAC
COMMERCIAL MORTGAGE CORPORATION
CLOSING DATE: NOVEMBER 12, 1998 TRUSTEE: LASALLE NATIONAL BANK
FIRST DISTRIBUTION DATE: FISCAL AGENT: ABN AMRO BANK N.V.
DECEMBER 15, 1998
AGGREGATE CERTIFICATE PRINCIPAL CUSIP NO.
BALANCE OF THE CLASS C CERTIFICATE AS
OF THE CLOSING DATE: $52,905,000 NO. 1
CLASS C CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of a
pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class C Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of the
pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be held
in the Collection Account, the Distribution Account, the Insurance Policies and
any REO Properties. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Pooling and Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing an interest in the Class of
Certificates specified on the face hereof equal to the quotient expressed as a
percentage obtained by dividing the Certificate Principal Balance of this
Certificate specified on the face hereof by the aggregate initial Certificate
Principal Balance of the Class C Certificates. The Certificates are designated
as the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2 and are issued in sixteen Classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will evidence
in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and Servicing
Agreement and reference is made to the Pooling and Servicing Agreement for
information with respect to the interests, rights, benefits,
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<PAGE>
obligations, proceeds, and duties evidenced hereby and the rights, duties and
obligations of the Trustee. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which the
Certificateholder is bound. In the case of any conflict between terms specified
in this Certificate and terms specified in the Pooling and Servicing Agreement,
the terms of the Pooling and Servicing Agreement shall govern.
Distributions of principal of and interest on this Certificate will be
made out of the Available Distribution Amount, to the extent and subject to the
limitations set forth in the Pooling and Servicing Agreement, on the 15th day of
each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (a "Distribution Date") commencing on the first Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"). All sums
distributable on this Certificate are payable in the coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
Interest on this Certificate will accrue (computed as if each year
consisted of 360 days and each month consisted of 30 days) during the Interest
Accrual Period relating to such Distribution Date at a Pass-Through Rate
calculated as specified in the Pooling and Servicing Agreement on the
Certificate Principal Balance of this Certificate immediately prior to each
Distribution Date. Principal and interest allocated to this Certificate on any
Distribution Date will be in an amount due to this Certificate's pro rata share
of the amount to be distributed on the Certificates of this Class as of such
Distribution Date, with a final distribution to be made upon retirement of this
Certificate as set forth in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement or be valid
for any purpose.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses and
interest shortfalls on the Mortgage Loans allocated to any Class of Certificates
will be allocated pro rata among the outstanding Certificates of such Class.
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
in the Pooling and Servicing Agreement. As provided in the Pooling and Servicing
Agreement, withdrawals from the Collection Account shall be made from time to
time for purposes other than distributions to Certificateholders, such purposes
including reimbursement of certain expenses incurred with respect to the
servicing of the Mortgage Loans and administration of the Trust.
All distributions under the Pooling and Servicing Agreement to a nominee
of The Depository Trust Company ("DTC") will be made by or on behalf of the
Trustee by wire transfer in immediately available funds to an account specified
in the request of such Certificateholder. All distributions under the Pooling
and Servicing Agreement to Certificateholders will be made by wire transfer in
immediately available funds to the account specified by the Certificateholder,
at a bank or other entity having appropriate facilities therefor, if such
Certificateholder will have provided the Trustee with wiring instructions no
more than five business days after the related Record Date, or otherwise by
check mailed to such Certificateholder. Notwithstanding the above, the final
distribution on any Certificate will be made only upon presentation and
surrender of such Certificate at the location that will be specified in a notice
of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of
A-4-4
<PAGE>
the aggregate Certificate Principal Balance of the Certificates then
outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon the Certificate. The
Pooling and Servicing Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the Corporate Trust Office of the Trustee, duly endorsed by, or
accompanied by an assignment in the form below or other written instrument of
transfer in form satisfactory to the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations will be issued to the designated transferee or transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class A-1
and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations of
$100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates registered
in the name of Cede & Co., as nominee of the DTC. No Certificate Owner will be
entitled to receive a Definitive Certificate representing such interest, except
under the limited circumstances described in the Pooling and Servicing
Agreement. The Residual Certificates will be issued in fully registered,
certificated form in minimum percentage interests of 10% and in multiples of 10%
in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Trustee, the Fiscal Agent, the
Master Servicer, the Special Servicer, the Certificate Registrar nor any such
agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby (other
than the obligation of the Trustee to make payments to the Certificateholders as
set forth in Section 10.2 of the Pooling and Servicing Agreement and other than
the obligations in the nature of information or tax reporting) shall terminate
on the earliest of (i) the later of (A) the final payment or other liquidation
of the last Mortgage Loan remaining in the Trust and (B) the disposition of all
REO Property or (ii) the sale of the property held by the Trust in accordance
with Section 10.1(b) of the Pooling and Servicing Agreement; provided that in no
event shall the Trust continue beyond the expiration of 21 years from the death
of the last survivor of the descendants of Joseph P. Kennedy, the late
Ambassador of the United States to the Court of St. James, living on the date
hereof. The parties designated in the Pooling and Servicing Agreement may
exercise their option to purchase the Mortgage Loans and any other property
remaining in the Trust and cause the termination of the Trust in accordance with
the requirements set forth in the Pooling and Servicing Agreement. Upon
termination of the Trust and payment of the Certificates and of all
administrative expenses associated with the Trust, any remaining assets of the
Trust shall be distributed to the holders of the Class R-I Certificates.
A-4-5
<PAGE>
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-4-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:___________________________________
AUTHORIZED OFFICER
Dated:
A-4-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS C CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
By:___________________________________
AUTHORIZED SIGNATORY
A-4-8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT ......Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.................
common (State)
Additional abbreviations may also be used though not in the above list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------------------
- ------------------------------------------
-------------------------------------
- --------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- --------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- --------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the within-named
Trust, with full power of substitution in the premises.
Dated:
-------------------------- ---------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of this Certificate in every particular
without alteration or enlargement or any
change whatever.
- --------------------------------
SIGNATURE GUARANTEED
The signature must be guaranteed
by a commercial bank or trust
company or by a member firm of
the New York Stock Exchange or
another national securities
exchange. Notarized or witnessed
signatures are not acceptable.
A-4-9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________ for the account of _____________________ account
number _____________________ or, if mailed by check, to _________________.
Statements should be mailed to ______________. This information is provided by
assignee named above, or ____________________________, as its agent.
A-4-10
<PAGE>
EXHIBIT A-5
[FORM OF CLASS D CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
NOTWITHSTANDING THE ABOVE, THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, EXCEPT FOR AN
INSURANCE COMPANY INVESTING SOLELY ASSETS OF ITS GENERAL ACCOUNT, WHICH SHALL BE
DEEMED TO HAVE REPRESENTED AND WARRANTED THAT THE PURCHASE AND OWNERSHIP OF THIS
CERTIFICATE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA
AND SECTION 4975 OF THE CODE.
THIS CLASS D CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN OTHER
CLASSES OF CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THE PORTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THE CERTIFICATES EVIDENCED
BY THIS CERTIFICATE WILL BE DECREASED BY THE PORTION OF PRINCIPAL DISTRIBUTIONS,
REALIZED LOSSES AND CERTAIN EXPENSE LOSSES ON THE CERTIFICATES ALLOCABLE TO THIS
CLASS D CERTIFICATE. ACCORDINGLY, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE LESS THAN THAT SET FORTH BELOW. ANYONE ACQUIRING THIS
CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE PRINCIPAL BALANCE BY INQUIRY
OF THE TRUSTEE.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
THIS CLASS D CERTIFICATE WAS ISSUED ON NOVEMBER 12, 1998 AND IS NOT TREATED AS
HAVING BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX
PURPOSES. THE ISSUE PRICE OF THIS CERTIFICATE IS __________% OF THE ORIGINAL
PRINCIPAL AMOUNT OF THIS CERTIFICATE. HOWEVER, IT IS POSSIBLE THAT APPLICABLE
LAW AND TREASURY REGULATIONS COULD BE INTERPRETED TO PROVIDE THAT ALL INTEREST
PAYMENT ON THIS CERTIFICATE ARE TO BE TREATED AS PART OF THE STATED REDEMPTION
PRICE AT MATURITY OF THE CERTIFICATE (I.E., PRINCIPAL) AND WOULD NOT CONSTITUTE
QUALIFIED STATED INTEREST, THEREBY CAUSING THIS CERTIFICATE TO HAVE OID. IN SUCH
CASE, THE FOLLOWING INFORMATION WOULD BE APPLICABLE: (I) THE AMOUNT OF OID AS A
PERCENTAGE OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS CERTIFICATE WOULD BE
APPROXIMATELY _______, (II) THE YIELD TO MATURITY OF THIS CERTIFICATE FOR
A-5-1
<PAGE>
PURPOSES OF COMPUTING OID WOULD BE APPROXIMATELY _____ PER ANNUM, COMPOUNDED
MONTHLY, AND (III) THE TOTAL AMOUNT OF OID ALLOCABLE TO THE INITIAL ACCRUAL
PERIOD (NOVEMBER 12, 1998 TO DECEMBER 15, 1998) FOR PURPOSES OF COMPUTING OID ON
THIS CERTIFICATE AS A PERCENTAGE OF THE ORIGINAL AMOUNT OF THIS CERTIFICATE
WOULD BE APPROXIMATELY _____%. THE METHOD USED TO CALCULATE THE YIELD TO
MATURITY AND THE AMOUNT OF OID ALLOCABLE TO THE INITIAL ACCRUAL PERIOD IS THE
EXACT METHOD. THE ACTUAL YIELD TO MATURITY AND OID ON THIS CERTIFICATE MAY
DIFFER FROM THE PROJECTED AMOUNTS. THE PREPAYMENT ASSUMPTION USED IN CALCULATING
THE YIELD TO MATURITY IS 0% CPR AND THE PAYMENT OF THE BALLOON PAYMENT ON THE
HYPERAMORTIZATION LOANS. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT THE ASSUMED RATE OR ANY OTHER RATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
A-5-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
INITIAL PASS-THROUGH RATE: 7.15% CERTIFICATE PRINCIPAL BALANCE OF THIS
CLASS D CERTIFICATE AS OF THE CLOSING
DATE $58,196,000
DATE OF POOLING & SERVICING MASTER SERVICER: GMAC COMMERCIAL
AGREEMENT: AS OF NOVEMBER 1, 1998 MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 INITIAL SPECIAL SERVICER: GMAC
COMMERCIAL MORTGAGE CORPORATION
CLOSING DATE: NOVEMBER 12, 1998 TRUSTEE: LASALLE NATIONAL BANK
FIRST DISTRIBUTION DATE: FISCAL AGENT: ABN AMRO BANK N.V.
DECEMBER 15, 1998
AGGREGATE CERTIFICATE PRINCIPAL CUSIP NO.
BALANCE OF THE CLASS D CERTIFICATE AS
OF THE CLOSING DATE: $58,196,000 NO. 1
CLASS D CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of a
pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class D Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of the
pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be held
in the Collection Account, the Distribution Account, the Insurance Policies and
any REO Properties. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Pooling and Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing an interest in the Class of
Certificates specified on the face hereof equal to the quotient expressed as a
percentage obtained by dividing the Certificate Principal Balance of this
Certificate specified on the face hereof by the aggregate initial Certificate
Principal Balance of the Class D Certificates. The Certificates are designated
as the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2 and are issued in sixteen Classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will evidence
in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and Servicing
Agreement and reference is made to the Pooling and Servicing Agreement for
information with respect to the interests, rights, benefits,
A-5-3
<PAGE>
obligations, proceeds, and duties evidenced hereby and the rights, duties and
obligations of the Trustee. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which the
Certificateholder is bound. In the case of any conflict between terms specified
in this Certificate and terms specified in the Pooling and Servicing Agreement,
the terms of the Pooling and Servicing Agreement shall govern.
Distributions of principal of and interest on this Certificate will be
made out of the Available Distribution Amount, to the extent and subject to the
limitations set forth in the Pooling and Servicing Agreement, on the 15th day of
each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (a "Distribution Date") commencing on the first Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"). All sums
distributable on this Certificate are payable in the coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
Interest on this Certificate will accrue (computed as if each year
consisted of 360 days and each month consisted of 30 days) during the Interest
Accrual Period relating to such Distribution Date at a Pass-Through Rate
calculated as specified in the Pooling and Servicing Agreement on the
Certificate Principal Balance of this Certificate immediately prior to each
Distribution Date. Principal and interest allocated to this Certificate on any
Distribution Date will be in an amount due to this Certificate's pro rata share
of the amount to be distributed on the Certificates of this Class as of such
Distribution Date, with a final distribution to be made upon retirement of this
Certificate as set forth in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement or be valid
for any purpose.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses and
interest shortfalls on the Mortgage Loans allocated to any Class of Certificates
will be allocated pro rata among the outstanding Certificates of such Class.
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
in the Pooling and Servicing Agreement. As provided in the Pooling and Servicing
Agreement, withdrawals from the Collection Account shall be made from time to
time for purposes other than distributions to Certificateholders, such purposes
including reimbursement of certain expenses incurred with respect to the
servicing of the Mortgage Loans and administration of the Trust.
All distributions under the Pooling and Servicing Agreement to a nominee
of The Depository Trust Company ("DTC") will be made by or on behalf of the
Trustee by wire transfer in immediately available funds to an account specified
in the request of such Certificateholder. All distributions under the Pooling
and Servicing Agreement to Certificateholders will be made by wire transfer in
immediately available funds to the account specified by the Certificateholder,
at a bank or other entity having appropriate facilities therefor, if such
Certificateholder will have provided the Trustee with wiring instructions no
more than five business days after the related Record Date, or otherwise by
check mailed to such Certificateholder. Notwithstanding the above, the final
distribution on any Certificate will be made only upon presentation and
surrender of such Certificate at the location that will be specified in a notice
of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of
A-5-4
<PAGE>
the aggregate Certificate Principal Balance of the Certificates then
outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon the Certificate. The
Pooling and Servicing Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the Corporate Trust Office of the Trustee, duly endorsed by, or
accompanied by an assignment in the form below or other written instrument of
transfer in form satisfactory to the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations will be issued to the designated transferee or transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class A-1
and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations of
$100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates registered
in the name of Cede & Co., as nominee of the DTC. No Certificate Owner will be
entitled to receive a Definitive Certificate representing such interest, except
under the limited circumstances described in the Pooling and Servicing
Agreement. The Residual Certificates will be issued in fully registered,
certificated form in minimum percentage interests of 10% and in multiples of 10%
in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Trustee, the Fiscal Agent, the
Master Servicer, the Special Servicer, the Certificate Registrar nor any such
agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby (other
than the obligation of the Trustee to make payments to the Certificateholders as
set forth in Section 10.2 of the Pooling and Servicing Agreement and other than
the obligations in the nature of information or tax reporting) shall terminate
on the earliest of (i) the later of (A) the final payment or other liquidation
of the last Mortgage Loan remaining in the Trust and (B) the disposition of all
REO Property or (ii) the sale of the property held by the Trust in accordance
with Section 10.1(b) of the Pooling and Servicing Agreement; provided that in no
event shall the Trust continue beyond the expiration of 21 years from the death
of the last survivor of the descendants of Joseph P. Kennedy, the late
Ambassador of the United States to the Court of St. James, living on the date
hereof. The parties designated in the Pooling and Servicing Agreement may
exercise their option to purchase the Mortgage Loans and any other property
remaining in the Trust and cause the termination of the Trust in accordance with
the requirements set forth in the Pooling and Servicing Agreement. Upon
termination of the Trust and payment of the Certificates and of all
administrative expenses associated with the Trust, any remaining assets of the
Trust shall be distributed to the holders of the Class R-I Certificates.
A-5-5
<PAGE>
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-5-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:___________________________________
AUTHORIZED OFFICER
Dated:
A-5-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS D CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
By:___________________________________
AUTHORIZED SIGNATORY
A-5-8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT ......Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.................
common (State)
Additional abbreviations may also be used though not in the above list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------------------
- ------------------------------------------
-------------------------------------
- --------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- --------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- --------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the within-named
Trust, with full power of substitution in the premises.
Dated:
-------------------------- ---------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of this Certificate in every particular
without alteration or enlargement or any
change whatever.
- --------------------------------
SIGNATURE GUARANTEED
The signature must be guaranteed
by a commercial bank or trust
company or by a member firm of
the New York Stock Exchange or
another national securities
exchange. Notarized or witnessed
signatures are not acceptable.
A-5-9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________ for the account of _____________________ account
number _____________________ or, if mailed by check, to _________________.
Statements should be mailed to ______________. This information is provided by
assignee named above, or ____________________________, as its agent.
A-5-10
<PAGE>
EXHIBIT A-6
[FORM OF CLASS E CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
NOTWITHSTANDING THE ABOVE, THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, EXCEPT FOR AN
INSURANCE COMPANY INVESTING SOLELY ASSETS OF ITS GENERAL ACCOUNT, WHICH SHALL BE
DEEMED TO HAVE REPRESENTED AND WARRANTED THAT THE PURCHASE AND OWNERSHIP OF THIS
CERTIFICATE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA
AND SECTION 4975 OF THE CODE.
THIS CLASS E CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN OTHER
CLASSES OF CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THE PORTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THE CERTIFICATES EVIDENCED
BY THIS CERTIFICATE WILL BE DECREASED BY THE PORTION OF PRINCIPAL DISTRIBUTIONS,
REALIZED LOSSES AND CERTAIN EXPENSE LOSSES ON THE CERTIFICATES ALLOCABLE TO THIS
CLASS E CERTIFICATE. ACCORDINGLY, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE LESS THAN THAT SET FORTH BELOW. ANYONE ACQUIRING THIS
CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE PRINCIPAL BALANCE BY INQUIRY
OF THE TRUSTEE.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
THIS CLASS E CERTIFICATE WAS ISSUED ON NOVEMBER 12, 1998 AND IS NOT TREATED AS
HAVING BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX
PURPOSES. THE ISSUE PRICE OF THIS CERTIFICATE IS __________% OF THE ORIGINAL
PRINCIPAL AMOUNT OF THIS CERTIFICATE. HOWEVER, IT IS POSSIBLE THAT APPLICABLE
LAW AND TREASURY REGULATIONS COULD BE INTERPRETED TO PROVIDE THAT ALL INTEREST
PAYMENT ON THIS CERTIFICATE ARE TO BE TREATED AS PART OF THE STATED REDEMPTION
PRICE AT MATURITY OF THE CERTIFICATE (I.E., PRINCIPAL) AND WOULD NOT CONSTITUTE
QUALIFIED STATED INTEREST, THEREBY CAUSING THIS CERTIFICATE TO HAVE OID. IN SUCH
CASE, THE FOLLOWING INFORMATION WOULD BE APPLICABLE: (I) THE AMOUNT OF OID AS A
PERCENTAGE OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS CERTIFICATE WOULD BE
APPROXIMATELY _______, (II) THE YIELD TO MATURITY OF THIS CERTIFICATE FOR
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<PAGE>
PURPOSES OF COMPUTING OID WOULD BE APPROXIMATELY _____ PER ANNUM, COMPOUNDED
MONTHLY, AND (III) THE TOTAL AMOUNT OF OID ALLOCABLE TO THE INITIAL ACCRUAL
PERIOD (NOVEMBER 12, 1998 TO DECEMBER 15, 1998) FOR PURPOSES OF COMPUTING OID ON
THIS CERTIFICATE AS A PERCENTAGE OF THE ORIGINAL AMOUNT OF THIS CERTIFICATE
WOULD BE APPROXIMATELY _____%. THE METHOD USED TO CALCULATE THE YIELD TO
MATURITY AND THE AMOUNT OF OID ALLOCABLE TO THE INITIAL ACCRUAL PERIOD IS THE
EXACT METHOD. THE ACTUAL YIELD TO MATURITY AND OID ON THIS CERTIFICATE MAY
DIFFER FROM THE PROJECTED AMOUNTS. THE PREPAYMENT ASSUMPTION USED IN CALCULATING
THE YIELD TO MATURITY IS 0% CPR AND THE PAYMENT OF THE BALLOON PAYMENT ON THE
HYPERAMORTIZATION LOANS. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT THE ASSUMED RATE OR ANY OTHER RATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
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<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
INITIAL PASS-THROUGH RATE: 7.15% CERTIFICATE PRINCIPAL BALANCE OF THIS
CLASS E CERTIFICATE AS OF THE CLOSING
DATE $21,163,000
DATE OF POOLING & SERVICING MASTER SERVICER: GMAC COMMERCIAL
AGREEMENT: AS OF NOVEMBER 1, 1998 MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 INITIAL SPECIAL SERVICER: GMAC
COMMERCIAL MORTGAGE CORPORATION
CLOSING DATE: NOVEMBER 12, 1998 TRUSTEE: LASALLE NATIONAL BANK
FIRST DISTRIBUTION DATE: FISCAL AGENT: ABN AMRO BANK N.V.
DECEMBER 15, 1998
AGGREGATE CERTIFICATE PRINCIPAL CUSIP NO.
BALANCE OF THE CLASS E CERTIFICATE AS
OF THE CLOSING DATE: $21,163,000 NO. 1
CLASS E CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of a
pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class E Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of the
pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be held
in the Collection Account, the Distribution Account, the Insurance Policies and
any REO Properties. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Pooling and Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing an interest in the Class of
Certificates specified on the face hereof equal to the quotient expressed as a
percentage obtained by dividing the Certificate Principal Balance of this
Certificate specified on the face hereof by the aggregate initial Certificate
Principal Balance of the Class E Certificates. The Certificates are designated
as the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2 and are issued in sixteen Classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will evidence
in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and Servicing
Agreement and reference is made to the Pooling and Servicing Agreement for
information with respect to the interests, rights, benefits,
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<PAGE>
obligations, proceeds, and duties evidenced hereby and the rights, duties and
obligations of the Trustee. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which the
Certificateholder is bound. In the case of any conflict between terms specified
in this Certificate and terms specified in the Pooling and Servicing Agreement,
the terms of the Pooling and Servicing Agreement shall govern.
Distributions of principal of and interest on this Certificate will be
made out of the Available Distribution Amount, to the extent and subject to the
limitations set forth in the Pooling and Servicing Agreement, on the 15th day of
each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (a "Distribution Date") commencing on the first Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"). All sums
distributable on this Certificate are payable in the coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
Interest on this Certificate will accrue (computed as if each year
consisted of 360 days and each month consisted of 30 days) during the Interest
Accrual Period relating to such Distribution Date at a Pass-Through Rate
calculated as specified in the Pooling and Servicing Agreement on the
Certificate Principal Balance of this Certificate immediately prior to each
Distribution Date. Principal and interest allocated to this Certificate on any
Distribution Date will be in an amount due to this Certificate's pro rata share
of the amount to be distributed on the Certificates of this Class as of such
Distribution Date, with a final distribution to be made upon retirement of this
Certificate as set forth in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement or be valid
for any purpose.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses and
interest shortfalls on the Mortgage Loans allocated to any Class of Certificates
will be allocated pro rata among the outstanding Certificates of such Class.
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
in the Pooling and Servicing Agreement. As provided in the Pooling and Servicing
Agreement, withdrawals from the Collection Account shall be made from time to
time for purposes other than distributions to Certificateholders, such purposes
including reimbursement of certain expenses incurred with respect to the
servicing of the Mortgage Loans and administration of the Trust.
All distributions under the Pooling and Servicing Agreement to a nominee
of The Depository Trust Company ("DTC") will be made by or on behalf of the
Trustee by wire transfer in immediately available funds to an account specified
in the request of such Certificateholder. All distributions under the Pooling
and Servicing Agreement to Certificateholders will be made by wire transfer in
immediately available funds to the account specified by the Certificateholder,
at a bank or other entity having appropriate facilities therefor, if such
Certificateholder will have provided the Trustee with wiring instructions no
more than five business days after the related Record Date, or otherwise by
check mailed to such Certificateholder. Notwithstanding the above, the final
distribution on any Certificate will be made only upon presentation and
surrender of such Certificate at the location that will be specified in a notice
of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of
A-6-4
<PAGE>
the aggregate Certificate Principal Balance of the Certificates then
outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon the Certificate. The
Pooling and Servicing Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the Corporate Trust Office of the Trustee, duly endorsed by, or
accompanied by an assignment in the form below or other written instrument of
transfer in form satisfactory to the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations will be issued to the designated transferee or transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class A-1
and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations of
$100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates registered
in the name of Cede & Co., as nominee of the DTC. No Certificate Owner will be
entitled to receive a Definitive Certificate representing such interest, except
under the limited circumstances described in the Pooling and Servicing
Agreement. The Residual Certificates will be issued in fully registered,
certificated form in minimum percentage interests of 10% and in multiples of 10%
in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Trustee, the Fiscal Agent, the
Master Servicer, the Special Servicer, the Certificate Registrar nor any such
agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby (other
than the obligation of the Trustee to make payments to the Certificateholders as
set forth in Section 10.2 of the Pooling and Servicing Agreement and other than
the obligations in the nature of information or tax reporting) shall terminate
on the earliest of (i) the later of (A) the final payment or other liquidation
of the last Mortgage Loan remaining in the Trust and (B) the disposition of all
REO Property or (ii) the sale of the property held by the Trust in accordance
with Section 10.1(b) of the Pooling and Servicing Agreement; provided that in no
event shall the Trust continue beyond the expiration of 21 years from the death
of the last survivor of the descendants of Joseph P. Kennedy, the late
Ambassador of the United States to the Court of St. James, living on the date
hereof. The parties designated in the Pooling and Servicing Agreement may
exercise their option to purchase the Mortgage Loans and any other property
remaining in the Trust and cause the termination of the Trust in accordance with
the requirements set forth in the Pooling and Servicing Agreement. Upon
termination of the Trust and payment of the Certificates and of all
administrative expenses associated with the Trust, any remaining assets of the
Trust shall be distributed to the holders of the Class R-I Certificates.
A-6-5
<PAGE>
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-6-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:___________________________________
AUTHORIZED OFFICER
Dated:
A-6-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS E CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
By:___________________________________
AUTHORIZED SIGNATORY
A-6-8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT ......Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.................
common (State)
Additional abbreviations may also be used though not in the above list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------------------
- ------------------------------------------
-------------------------------------
- --------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- --------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- --------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the within-named
Trust, with full power of substitution in the premises.
Dated:
-------------------------- ---------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of this Certificate in every particular
without alteration or enlargement or any
change whatever.
- --------------------------------
SIGNATURE GUARANTEED
The signature must be guaranteed
by a commercial bank or trust
company or by a member firm of
the New York Stock Exchange or
another national securities
exchange. Notarized or witnessed
signatures are not acceptable.
A-6-9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________ for the account of _____________________ account
number _____________________ or, if mailed by check, to _________________.
Statements should be mailed to ______________. This information is provided by
assignee named above, or ____________________________, as its agent.
A-6-10
<PAGE>
EXHIBIT A-7
[FORM OF CLASS F CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A)(1) TO A PERSON THAT THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE SECURITIES ACT AND (B)
IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION.
NOTWITHSTANDING THE ABOVE, THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, EXCEPT FOR AN
INSURANCE COMPANY INVESTING SOLELY ASSETS OF ITS GENERAL ACCOUNT, WHICH SHALL BE
DEEMED TO HAVE REPRESENTED AND WARRANTED THAT THE PURCHASE AND OWNERSHIP OF THIS
CERTIFICATE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA
AND SECTION 4975 OF THE CODE.
THIS CLASS F CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN OTHER
CLASSES OF CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THE PORTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THE CERTIFICATES EVIDENCED
BY THIS CERTIFICATE WILL BE DECREASED BY THE PORTION OF PRINCIPAL DISTRIBUTIONS,
REALIZED LOSSES AND CERTAIN EXPENSE LOSSES ON THE CERTIFICATES ALLOCABLE TO THIS
CLASS F CERTIFICATE. ACCORDINGLY, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE LESS THAN THAT SET FORTH BELOW. ANYONE ACQUIRING THIS
CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE PRINCIPAL BALANCE BY INQUIRY
OF THE TRUSTEE.
THIS CLASS M CERTIFICATE WAS ISSUED ON NOVEMBER 12, 1998 AND IS TREATED AS
HAVING BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX
PURPOSES. THE ISSUE PRICE OF THIS CERTIFICATE IS _______% OF THE ORIGINAL
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<PAGE>
PRINCIPAL AMOUNT OF THIS CERTIFICATE. ASSUMING THAT THIS CERTIFICATE PAYS IN
ACCORDANCE WITH PROJECTED CASH FLOWS BASED ON CERTAIN ASSUMPTIONS USED IN
PRICING THE CERTIFICATES AND THAT NONE OF THE STATED INTEREST IS TREATED AS
"QUALIFIED STATED INTEREST", THE FOLLOWING INFORMATION WOULD BE APPLICABLE: (I)
THE AMOUNT OF OID AS A PERCENTAGE OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS
CERTIFICATE WOULD BE APPROXIMATELY __________, (II) THE YIELD TO MATURITY OF
THIS CERTIFICATE FOR PURPOSES OF COMPUTING OID WOULD BE APPROXIMATELY _____% PER
ANNUM, COMPOUNDED MONTHLY, AND (III) THE TOTAL AMOUNT OF OID ALLOCABLE TO THE
INITIAL ACCRUAL PERIOD (NOVEMBER 12, 1998 TO DECEMBER 15, 1998) FOR PURPOSES OF
COMPUTING OID ON THIS CERTIFICATE AS A PERCENTAGE OF THE ORIGINAL PRINCIPAL
AMOUNT OF THIS CERTIFICATE WOULD BE APPROXIMATELY ____%. THE METHOD USED TO
CALCULATE THE YIELD TO MATURITY AND THE AMOUNT OF OID ALLOCABLE TO THE INITIAL
ACCRUAL PERIOD IS THE EXACT METHOD. THE ACTUAL YIELD TO MATURITY AND OID ON THIS
CERTIFICATE MAY DIFFER FROM THE PROJECTED AMOUNTS. THE PREPAYMENT ASSUMPTION
USED IN CALCULATING THE YIELD TO MATURITY IS 0% CPR AND THE PAYMENT OF THE
BALLOON PAYMENT ON THE HYPERAMORTIZATION DATE IN THE CASE OF THE
HYPERAMORTIZATION LOANS. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT THE ASSUMED RATE OR ANY OTHER RATE.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
A-7-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
INITIAL PASS-THROUGH RATE: 6.01% CERTIFICATE PRINCIPAL BALANCE OF THIS
CLASS F CERTIFICATE AS OF THE CLOSING
DATE $23,807,000
DATE OF POOLING & SERVICING MASTER SERVICER: GMAC COMMERCIAL
AGREEMENT: AS OF NOVEMBER 1, 1998 MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 INITIAL SPECIAL SERVICER: GMAC
COMMERCIAL MORTGAGE CORPORATION
CLOSING DATE: NOVEMBER 12, 1998 TRUSTEE: LASALLE NATIONAL BANK
FIRST DISTRIBUTION DATE: FISCAL AGENT: ABN AMRO BANK N.V.
DECEMBER 15, 1998
AGGREGATE CERTIFICATE PRINCIPAL CUSIP NO.
BALANCE OF THE CLASS F CERTIFICATE AS
OF THE CLOSING DATE: $23,807,000 NO. 1
CLASS F CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of a
pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class F Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of the
pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be held
in the Collection Account, the Distribution Account, the Insurance Policies and
any REO Properties. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Pooling and Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing an interest in the Class of
Certificates specified on the face hereof equal to the quotient expressed as a
percentage obtained by dividing the Certificate Principal Balance of this
Certificate specified on the face hereof by the aggregate initial Certificate
Principal Balance of the Class F Certificates. The Certificates are designated
as the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2 and are issued in sixteen Classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will evidence
in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and Servicing
Agreement and reference is made to the Pooling and Servicing Agreement for
information with respect to the interests, rights, benefits,
A-7-3
<PAGE>
obligations, proceeds, and duties evidenced hereby and the rights, duties and
obligations of the Trustee. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which the
Certificateholder is bound. In the case of any conflict between terms specified
in this Certificate and terms specified in the Pooling and Servicing Agreement,
the terms of the Pooling and Servicing Agreement shall govern.
Distributions of principal of and interest on this Certificate will be
made out of the Available Distribution Amount, to the extent and subject to the
limitations set forth in the Pooling and Servicing Agreement, on the 15th day of
each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (a "Distribution Date") commencing on the first Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"). All sums
distributable on this Certificate are payable in the coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
Interest on this Certificate will accrue (computed as if each year
consisted of 360 days and each month consisted of 30 days) during the Interest
Accrual Period relating to such Distribution Date at a Pass-Through Rate
calculated as specified in the Pooling and Servicing Agreement on the
Certificate Principal Balance of this Certificate immediately prior to each
Distribution Date. Principal and interest allocated to this Certificate on any
Distribution Date will be in an amount due to this Certificate's pro rata share
of the amount to be distributed on the Certificates of this Class as of such
Distribution Date, with a final distribution to be made upon retirement of this
Certificate as set forth in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement or be valid
for any purpose.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses and
interest shortfalls on the Mortgage Loans allocated to any Class of Certificates
will be allocated pro rata among the outstanding Certificates of such Class.
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
in the Pooling and Servicing Agreement. As provided in the Pooling and Servicing
Agreement, withdrawals from the Collection Account shall be made from time to
time for purposes other than distributions to Certificateholders, such purposes
including reimbursement of certain expenses incurred with respect to the
servicing of the Mortgage Loans and administration of the Trust.
All distributions under the Pooling and Servicing Agreement to a nominee
of The Depository Trust Company ("DTC") will be made by or on behalf of the
Trustee by wire transfer in immediately available funds to an account specified
in the request of such Certificateholder. All distributions under the Pooling
and Servicing Agreement to Certificateholders will be made by wire transfer in
immediately available funds to the account specified by the Certificateholder,
at a bank or other entity having appropriate facilities therefor, if such
Certificateholder will have provided the Trustee with wiring instructions no
more than five business days after the related Record Date, or otherwise by
check mailed to such Certificateholder. Notwithstanding the above, the final
distribution on any Certificate will be made only upon presentation and
surrender of such Certificate at the location that will be specified in a notice
of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of
A-7-4
<PAGE>
the aggregate Certificate Principal Balance of the Certificates then
outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon the Certificate. The
Pooling and Servicing Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the Corporate Trust Office of the Trustee, duly endorsed by, or
accompanied by an assignment in the form below or other written instrument of
transfer in form satisfactory to the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations will be issued to the designated transferee or transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class A-1
and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations of
$100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates registered
in the name of Cede & Co., as nominee of the DTC. No Certificate Owner will be
entitled to receive a Definitive Certificate representing such interest, except
under the limited circumstances described in the Pooling and Servicing
Agreement. The Residual Certificates will be issued in fully registered,
certificated form in minimum percentage interests of 10% and in multiples of 10%
in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Trustee, the Fiscal Agent, the
Master Servicer, the Special Servicer, the Certificate Registrar nor any such
agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby (other
than the obligation of the Trustee to make payments to the Certificateholders as
set forth in Section 10.2 of the Pooling and Servicing Agreement and other than
the obligations in the nature of information or tax reporting) shall terminate
on the earliest of (i) the later of (A) the final payment or other liquidation
of the last Mortgage Loan remaining in the Trust and (B) the disposition of all
REO Property or (ii) the sale of the property held by the Trust in accordance
with Section 10.1(b) of the Pooling and Servicing Agreement; provided that in no
event shall the Trust continue beyond the expiration of 21 years from the death
of the last survivor of the descendants of Joseph P. Kennedy, the late
Ambassador of the United States to the Court of St. James, living on the date
hereof. The parties designated in the Pooling and Servicing Agreement may
exercise their option to purchase the Mortgage Loans and any other property
remaining in the Trust and cause the termination of the Trust in accordance with
the requirements set forth in the Pooling and Servicing Agreement. Upon
termination of the Trust and payment of the Certificates and of all
administrative expenses associated with the Trust, any remaining assets of the
Trust shall be distributed to the holders of the Class R-I Certificates.
A-7-5
<PAGE>
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-7-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:___________________________________
AUTHORIZED OFFICER
Dated:
A-7-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS F CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
By:___________________________________
AUTHORIZED SIGNATORY
A-7-8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT ......Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.................
common (State)
Additional abbreviations may also be used though not in the above list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------------------
- ------------------------------------------
-------------------------------------
- --------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- --------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- --------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the within-named
Trust, with full power of substitution in the premises.
Dated:
-------------------------- ---------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of this Certificate in every particular
without alteration or enlargement or any
change whatever.
- --------------------------------
SIGNATURE GUARANTEED
The signature must be guaranteed
by a commercial bank or trust
company or by a member firm of
the New York Stock Exchange or
another national securities
exchange. Notarized or witnessed
signatures are not acceptable.
A-7-9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________ for the account of _____________________ account
number _____________________ or, if mailed by check, to _________________.
Statements should be mailed to ______________. This information is provided by
assignee named above, or ____________________________, as its agent.
A-7-10
<PAGE>
EXHIBIT A-8
[FORM OF CLASS G CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A)(1) TO A PERSON THAT THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE SECURITIES ACT AND (B)
IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION.
NOTWITHSTANDING THE ABOVE, THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, EXCEPT FOR AN
INSURANCE COMPANY INVESTING SOLELY ASSETS OF ITS GENERAL ACCOUNT, WHICH SHALL BE
DEEMED TO HAVE REPRESENTED AND WARRANTED THAT THE PURCHASE AND OWNERSHIP OF THIS
CERTIFICATE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA
AND SECTION 4975 OF THE CODE.
THIS CLASS G CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN OTHER
CLASSES OF CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THE PORTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THE CERTIFICATES EVIDENCED
BY THIS CERTIFICATE WILL BE DECREASED BY THE PORTION OF PRINCIPAL DISTRIBUTIONS,
REALIZED LOSSES AND CERTAIN EXPENSE LOSSES ON THE CERTIFICATES ALLOCABLE TO THIS
CLASS G CERTIFICATE. ACCORDINGLY, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE LESS THAN THAT SET FORTH BELOW. ANYONE ACQUIRING THIS
CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE PRINCIPAL BALANCE BY INQUIRY
OF THE TRUSTEE.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
A-8-1
<PAGE>
THIS CLASS G CERTIFICATE WAS ISSUED ON NOVEMBER 12, 1998 AND IS TREATED AS
HAVING BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX
PURPOSES. THE ISSUE PRICE OF THIS CERTIFICATE IS _______% OF THE ORIGINAL
PRINCIPAL AMOUNT OF THIS CERTIFICATE. ASSUMING THAT THIS CERTIFICATE PAYS IN
ACCORDANCE WITH PROJECTED CASH FLOWS BASED ON CERTAIN ASSUMPTIONS USED IN
PRICING THE CERTIFICATES AND THAT NONE OF THE STATED INTEREST IS TREATED AS
"QUALIFIED STATED INTEREST", THE FOLLOWING INFORMATION WOULD BE APPLICABLE: (I)
THE AMOUNT OF OID AS A PERCENTAGE OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS
CERTIFICATE WOULD BE APPROXIMATELY __________, (II) THE YIELD TO MATURITY OF
THIS CERTIFICATE FOR PURPOSES OF COMPUTING OID WOULD BE APPROXIMATELY _____% PER
ANNUM, COMPOUNDED MONTHLY, AND (III) THE TOTAL AMOUNT OF OID ALLOCABLE TO THE
INITIAL ACCRUAL PERIOD (NOVEMBER 12, 1998 TO DECEMBER 15, 1998) FOR PURPOSES OF
COMPUTING OID ON THIS CERTIFICATE AS A PERCENTAGE OF THE ORIGINAL PRINCIPAL
AMOUNT OF THIS CERTIFICATE WOULD BE APPROXIMATELY ____%. THE METHOD USED TO
CALCULATE THE YIELD TO MATURITY AND THE AMOUNT OF OID ALLOCABLE TO THE INITIAL
ACCRUAL PERIOD IS THE EXACT METHOD. THE ACTUAL YIELD TO MATURITY AND OID ON THIS
CERTIFICATE MAY DIFFER FROM THE PROJECTED AMOUNTS. THE PREPAYMENT ASSUMPTION
USED IN CALCULATING THE YIELD TO MATURITY IS 0% CPR AND THE PAYMENT OF THE
BALLOON PAYMENT ON THE HYPERAMORTIZATION DATE IN THE CASE OF THE
HYPERAMORTIZATION LOANS. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT THE ASSUMED RATE OR ANY OTHER RATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
A-8-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
INITIAL PASS-THROUGH RATE: 6.01% CERTIFICATE PRINCIPAL BALANCE OF THIS
CLASS G CERTIFICATE AS OF THE CLOSING
DATE $18,517,000
DATE OF POOLING & SERVICING MASTER SERVICER: GMAC COMMERCIAL
AGREEMENT: AS OF NOVEMBER 1, 1998 MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 INITIAL SPECIAL SERVICER: GMAC
COMMERCIAL MORTGAGE CORPORATION
CLOSING DATE: NOVEMBER 12, 1998 TRUSTEE: LASALLE NATIONAL BANK
FIRST DISTRIBUTION DATE: FISCAL AGENT: ABN AMRO BANK N.V.
DECEMBER 15, 1998
AGGREGATE CERTIFICATE PRINCIPAL CUSIP NO.
BALANCE OF THE CLASS G CERTIFICATE AS
OF THE CLOSING DATE: $18,517,000 NO. 1
CLASS G CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of a
pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class G Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of the
pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be held
in the Collection Account, the Distribution Account, the Insurance Policies and
any REO Properties. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Pooling and Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing an interest in the Class of
Certificates specified on the face hereof equal to the quotient expressed as a
percentage obtained by dividing the Certificate Principal Balance of this
Certificate specified on the face hereof by the aggregate initial Certificate
Principal Balance of the Class G Certificates. The Certificates are designated
as the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2 and are issued in sixteen Classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will evidence
in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and Servicing
Agreement and reference is made to the Pooling and Servicing Agreement for
information with respect to the interests, rights, benefits,
A-8-3
<PAGE>
obligations, proceeds, and duties evidenced hereby and the rights, duties and
obligations of the Trustee. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which the
Certificateholder is bound. In the case of any conflict between terms specified
in this Certificate and terms specified in the Pooling and Servicing Agreement,
the terms of the Pooling and Servicing Agreement shall govern.
Distributions of principal of and interest on this Certificate will be
made out of the Available Distribution Amount, to the extent and subject to the
limitations set forth in the Pooling and Servicing Agreement, on the 15th day of
each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (a "Distribution Date") commencing on the first Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"). All sums
distributable on this Certificate are payable in the coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
Interest on this Certificate will accrue (computed as if each year
consisted of 360 days and each month consisted of 30 days) during the Interest
Accrual Period relating to such Distribution Date at a Pass-Through Rate
calculated as specified in the Pooling and Servicing Agreement on the
Certificate Principal Balance of this Certificate immediately prior to each
Distribution Date. Principal and interest allocated to this Certificate on any
Distribution Date will be in an amount due to this Certificate's pro rata share
of the amount to be distributed on the Certificates of this Class as of such
Distribution Date, with a final distribution to be made upon retirement of this
Certificate as set forth in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement or be valid
for any purpose.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses and
interest shortfalls on the Mortgage Loans allocated to any Class of Certificates
will be allocated pro rata among the outstanding Certificates of such Class.
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
in the Pooling and Servicing Agreement. As provided in the Pooling and Servicing
Agreement, withdrawals from the Collection Account shall be made from time to
time for purposes other than distributions to Certificateholders, such purposes
including reimbursement of certain expenses incurred with respect to the
servicing of the Mortgage Loans and administration of the Trust.
All distributions under the Pooling and Servicing Agreement to a nominee
of The Depository Trust Company ("DTC") will be made by or on behalf of the
Trustee by wire transfer in immediately available funds to an account specified
in the request of such Certificateholder. All distributions under the Pooling
and Servicing Agreement to Certificateholders will be made by wire transfer in
immediately available funds to the account specified by the Certificateholder,
at a bank or other entity having appropriate facilities therefor, if such
Certificateholder will have provided the Trustee with wiring instructions no
more than five business days after the related Record Date, or otherwise by
check mailed to such Certificateholder. Notwithstanding the above, the final
distribution on any Certificate will be made only upon presentation and
surrender of such Certificate at the location that will be specified in a notice
of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of
A-8-4
<PAGE>
the aggregate Certificate Principal Balance of the Certificates then
outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon the Certificate. The
Pooling and Servicing Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the Corporate Trust Office of the Trustee, duly endorsed by, or
accompanied by an assignment in the form below or other written instrument of
transfer in form satisfactory to the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations will be issued to the designated transferee or transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class A-1
and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations of
$100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates registered
in the name of Cede & Co., as nominee of the DTC. No Certificate Owner will be
entitled to receive a Definitive Certificate representing such interest, except
under the limited circumstances described in the Pooling and Servicing
Agreement. The Residual Certificates will be issued in fully registered,
certificated form in minimum percentage interests of 10% and in multiples of 10%
in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Trustee, the Fiscal Agent, the
Master Servicer, the Special Servicer, the Certificate Registrar nor any such
agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby (other
than the obligation of the Trustee to make payments to the Certificateholders as
set forth in Section 10.2 of the Pooling and Servicing Agreement and other than
the obligations in the nature of information or tax reporting) shall terminate
on the earliest of (i) the later of (A) the final payment or other liquidation
of the last Mortgage Loan remaining in the Trust and (B) the disposition of all
REO Property or (ii) the sale of the property held by the Trust in accordance
with Section 10.1(b) of the Pooling and Servicing Agreement; provided that in no
event shall the Trust continue beyond the expiration of 21 years from the death
of the last survivor of the descendants of Joseph P. Kennedy, the late
Ambassador of the United States to the Court of St. James, living on the date
hereof. The parties designated in the Pooling and Servicing Agreement may
exercise their option to purchase the Mortgage Loans and any other property
remaining in the Trust and cause the termination of the Trust in accordance with
the requirements set forth in the Pooling and Servicing Agreement. Upon
termination of the Trust and payment of the Certificates and of all
administrative expenses associated with the Trust, any remaining assets of the
Trust shall be distributed to the holders of the Class R-I Certificates.
A-8-5
<PAGE>
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-8-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:___________________________________
AUTHORIZED OFFICER
Dated:
A-8-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS G CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
By:___________________________________
AUTHORIZED SIGNATORY
A-8-8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT ......Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.................
common (State)
Additional abbreviations may also be used though not in the above list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------------------
- ------------------------------------------
-------------------------------------
- --------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- --------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- --------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the within-named
Trust, with full power of substitution in the premises.
Dated:
-------------------------- ---------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of this Certificate in every particular
without alteration or enlargement or any
change whatever.
- --------------------------------
SIGNATURE GUARANTEED
The signature must be guaranteed
by a commercial bank or trust
company or by a member firm of
the New York Stock Exchange or
another national securities
exchange. Notarized or witnessed
signatures are not acceptable.
A-8-9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________ for the account of _____________________ account
number _____________________ or, if mailed by check, to _________________.
Statements should be mailed to ______________. This information is provided by
assignee named above, or ____________________________, as its agent.
A-8-10
<PAGE>
EXHIBIT A-9
[FORM OF CLASS H CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A)(1) TO A PERSON THAT THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE SECURITIES ACT AND (B)
IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION.
NOTWITHSTANDING THE ABOVE, THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, EXCEPT FOR AN
INSURANCE COMPANY INVESTING SOLELY ASSETS OF ITS GENERAL ACCOUNT, WHICH SHALL BE
DEEMED TO HAVE REPRESENTED AND WARRANTED THAT THE PURCHASE AND OWNERSHIP OF THIS
CERTIFICATE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA
AND SECTION 4975 OF THE CODE.
THIS CLASS H CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN OTHER
CLASSES OF CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THE PORTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THE CERTIFICATES EVIDENCED
BY THIS CERTIFICATE WILL BE DECREASED BY THE PORTION OF PRINCIPAL DISTRIBUTIONS,
REALIZED LOSSES AND CERTAIN EXPENSE LOSSES ON THE CERTIFICATES ALLOCABLE TO THIS
CLASS H CERTIFICATE. ACCORDINGLY, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE LESS THAN THAT SET FORTH BELOW. ANYONE ACQUIRING THIS
CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE PRINCIPAL BALANCE BY INQUIRY
OF THE TRUSTEE.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
A-9-1
<PAGE>
THIS CLASS H CERTIFICATE WAS ISSUED ON NOVEMBER 12, 1998 AND IS TREATED AS
HAVING BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX
PURPOSES. THE ISSUE PRICE OF THIS CERTIFICATE IS _______% OF THE ORIGINAL
PRINCIPAL AMOUNT OF THIS CERTIFICATE. ASSUMING THAT THIS CERTIFICATE PAYS IN
ACCORDANCE WITH PROJECTED CASH FLOWS BASED ON CERTAIN ASSUMPTIONS USED IN
PRICING THE CERTIFICATES AND THAT NONE OF THE STATED INTEREST IS TREATED AS
"QUALIFIED STATED INTEREST", THE FOLLOWING INFORMATION WOULD BE APPLICABLE: (I)
THE AMOUNT OF OID AS A PERCENTAGE OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS
CERTIFICATE WOULD BE APPROXIMATELY __________, (II) THE YIELD TO MATURITY OF
THIS CERTIFICATE FOR PURPOSES OF COMPUTING OID WOULD BE APPROXIMATELY _____% PER
ANNUM, COMPOUNDED MONTHLY, AND (III) THE TOTAL AMOUNT OF OID ALLOCABLE TO THE
INITIAL ACCRUAL PERIOD (NOVEMBER 12, 1998 TO DECEMBER 15, 1998) FOR PURPOSES OF
COMPUTING OID ON THIS CERTIFICATE AS A PERCENTAGE OF THE ORIGINAL PRINCIPAL
AMOUNT OF THIS CERTIFICATE WOULD BE APPROXIMATELY ____%. THE METHOD USED TO
CALCULATE THE YIELD TO MATURITY AND THE AMOUNT OF OID ALLOCABLE TO THE INITIAL
ACCRUAL PERIOD IS THE EXACT METHOD. THE ACTUAL YIELD TO MATURITY AND OID ON THIS
CERTIFICATE MAY DIFFER FROM THE PROJECTED AMOUNTS. THE PREPAYMENT ASSUMPTION
USED IN CALCULATING THE YIELD TO MATURITY IS 0% CPR AND THE PAYMENT OF THE
BALLOON PAYMENT ON THE HYPERAMORTIZATION DATE IN THE CASE OF THE
HYPERAMORTIZATION LOANS. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT THE ASSUMED RATE OR ANY OTHER RATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
A-9-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
INITIAL PASS-THROUGH RATE: 6.01% CERTIFICATE PRINCIPAL BALANCE OF THIS
CLASS H CERTIFICATE AS OF THE CLOSING
DATE $10,581,000
DATE OF POOLING & SERVICING MASTER SERVICER: GMAC COMMERCIAL
AGREEMENT: AS OF NOVEMBER 1, 1998 MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 INITIAL SPECIAL SERVICER: GMAC
COMMERCIAL MORTGAGE CORPORATION
CLOSING DATE: NOVEMBER 12, 1998 TRUSTEE: LASALLE NATIONAL BANK
FIRST DISTRIBUTION DATE: FISCAL AGENT: ABN AMRO BANK N.V.
DECEMBER 15, 1998
AGGREGATE CERTIFICATE PRINCIPAL CUSIP NO.
BALANCE OF THE CLASS H CERTIFICATE AS
OF THE CLOSING DATE: $10,581,000 NO. 1
CLASS H CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of a
pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class H Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of the
pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be held
in the Collection Account, the Distribution Account, the Insurance Policies and
any REO Properties. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Pooling and Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing an interest in the Class of
Certificates specified on the face hereof equal to the quotient expressed as a
percentage obtained by dividing the Certificate Principal Balance of this
Certificate specified on the face hereof by the aggregate initial Certificate
Principal Balance of the Class H Certificates. The Certificates are designated
as the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2 and are issued in sixteen Classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will evidence
in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and Servicing
Agreement and reference is made to the Pooling and Servicing Agreement for
information with respect to the interests, rights, benefits,
A-9-3
<PAGE>
obligations, proceeds, and duties evidenced hereby and the rights, duties and
obligations of the Trustee. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which the
Certificateholder is bound. In the case of any conflict between terms specified
in this Certificate and terms specified in the Pooling and Servicing Agreement,
the terms of the Pooling and Servicing Agreement shall govern.
Distributions of principal of and interest on this Certificate will be
made out of the Available Distribution Amount, to the extent and subject to the
limitations set forth in the Pooling and Servicing Agreement, on the 15th day of
each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (a "Distribution Date") commencing on the first Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"). All sums
distributable on this Certificate are payable in the coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
Interest on this Certificate will accrue (computed as if each year
consisted of 360 days and each month consisted of 30 days) during the Interest
Accrual Period relating to such Distribution Date at a Pass-Through Rate
calculated as specified in the Pooling and Servicing Agreement on the
Certificate Principal Balance of this Certificate immediately prior to each
Distribution Date. Principal and interest allocated to this Certificate on any
Distribution Date will be in an amount due to this Certificate's pro rata share
of the amount to be distributed on the Certificates of this Class as of such
Distribution Date, with a final distribution to be made upon retirement of this
Certificate as set forth in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement or be valid
for any purpose.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses and
interest shortfalls on the Mortgage Loans allocated to any Class of Certificates
will be allocated pro rata among the outstanding Certificates of such Class.
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
in the Pooling and Servicing Agreement. As provided in the Pooling and Servicing
Agreement, withdrawals from the Collection Account shall be made from time to
time for purposes other than distributions to Certificateholders, such purposes
including reimbursement of certain expenses incurred with respect to the
servicing of the Mortgage Loans and administration of the Trust.
All distributions under the Pooling and Servicing Agreement to a nominee
of The Depository Trust Company ("DTC") will be made by or on behalf of the
Trustee by wire transfer in immediately available funds to an account specified
in the request of such Certificateholder. All distributions under the Pooling
and Servicing Agreement to Certificateholders will be made by wire transfer in
immediately available funds to the account specified by the Certificateholder,
at a bank or other entity having appropriate facilities therefor, if such
Certificateholder will have provided the Trustee with wiring instructions no
more than five business days after the related Record Date, or otherwise by
check mailed to such Certificateholder. Notwithstanding the above, the final
distribution on any Certificate will be made only upon presentation and
surrender of such Certificate at the location that will be specified in a notice
of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of
A-9-4
<PAGE>
the aggregate Certificate Principal Balance of the Certificates then
outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon the Certificate. The
Pooling and Servicing Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the Corporate Trust Office of the Trustee, duly endorsed by, or
accompanied by an assignment in the form below or other written instrument of
transfer in form satisfactory to the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations will be issued to the designated transferee or transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class A-1
and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations of
$100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates registered
in the name of Cede & Co., as nominee of the DTC. No Certificate Owner will be
entitled to receive a Definitive Certificate representing such interest, except
under the limited circumstances described in the Pooling and Servicing
Agreement. The Residual Certificates will be issued in fully registered,
certificated form in minimum percentage interests of 10% and in multiples of 10%
in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Trustee, the Fiscal Agent, the
Master Servicer, the Special Servicer, the Certificate Registrar nor any such
agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby (other
than the obligation of the Trustee to make payments to the Certificateholders as
set forth in Section 10.2 of the Pooling and Servicing Agreement and other than
the obligations in the nature of information or tax reporting) shall terminate
on the earliest of (i) the later of (A) the final payment or other liquidation
of the last Mortgage Loan remaining in the Trust and (B) the disposition of all
REO Property or (ii) the sale of the property held by the Trust in accordance
with Section 10.1(b) of the Pooling and Servicing Agreement; provided that in no
event shall the Trust continue beyond the expiration of 21 years from the death
of the last survivor of the descendants of Joseph P. Kennedy, the late
Ambassador of the United States to the Court of St. James, living on the date
hereof. The parties designated in the Pooling and Servicing Agreement may
exercise their option to purchase the Mortgage Loans and any other property
remaining in the Trust and cause the termination of the Trust in accordance with
the requirements set forth in the Pooling and Servicing Agreement. Upon
termination of the Trust and payment of the Certificates and of all
administrative expenses associated with the Trust, any remaining assets of the
Trust shall be distributed to the holders of the Class R-I Certificates.
A-9-5
<PAGE>
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-9-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:___________________________________
AUTHORIZED OFFICER
Dated:
A-9-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS H CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
By:___________________________________
AUTHORIZED SIGNATORY
A-9-8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT ......Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.................
common (State)
Additional abbreviations may also be used though not in the above list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------------------
- ------------------------------------------
-------------------------------------
- --------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- --------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- --------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the within-named
Trust, with full power of substitution in the premises.
Dated:
-------------------------- ---------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of this Certificate in every particular
without alteration or enlargement or any
change whatever.
- --------------------------------
SIGNATURE GUARANTEED
The signature must be guaranteed
by a commercial bank or trust
company or by a member firm of
the New York Stock Exchange or
another national securities
exchange. Notarized or witnessed
signatures are not acceptable.
A-9-9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________ for the account of _____________________ account
number _____________________ or, if mailed by check, to _________________.
Statements should be mailed to ______________. This information is provided by
assignee named above, or ____________________________, as its agent.
A-9-10
<PAGE>
EXHIBIT A-10
[FORM OF CLASS J CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A)(1) TO A PERSON THAT THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE SECURITIES ACT AND (B)
IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION.
NOTWITHSTANDING THE ABOVE, THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, EXCEPT FOR AN
INSURANCE COMPANY INVESTING SOLELY ASSETS OF ITS GENERAL ACCOUNT, WHICH SHALL BE
DEEMED TO HAVE REPRESENTED AND WARRANTED THAT THE PURCHASE AND OWNERSHIP OF THIS
CERTIFICATE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA
AND SECTION 4975 OF THE CODE.
THIS CLASS J CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN OTHER
CLASSES OF CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THE PORTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THE CERTIFICATES EVIDENCED
BY THIS CERTIFICATE WILL BE DECREASED BY THE PORTION OF PRINCIPAL DISTRIBUTIONS,
REALIZED LOSSES AND CERTAIN EXPENSE LOSSES ON THE CERTIFICATES ALLOCABLE TO THIS
CLASS J CERTIFICATE. ACCORDINGLY, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE LESS THAN THAT SET FORTH BELOW. ANYONE ACQUIRING THIS
CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE PRINCIPAL BALANCE BY INQUIRY
OF THE TRUSTEE.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
A-10-1
<PAGE>
THIS CLASS J CERTIFICATE WAS ISSUED ON NOVEMBER 12, 1998 AND IS TREATED AS
HAVING BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX
PURPOSES. THE ISSUE PRICE OF THIS CERTIFICATE IS _______% OF THE ORIGINAL
PRINCIPAL AMOUNT OF THIS CERTIFICATE. ASSUMING THAT THIS CERTIFICATE PAYS IN
ACCORDANCE WITH PROJECTED CASH FLOWS BASED ON CERTAIN ASSUMPTIONS USED IN
PRICING THE CERTIFICATES AND THAT NONE OF THE STATED INTEREST IS TREATED AS
"QUALIFIED STATED INTEREST", THE FOLLOWING INFORMATION WOULD BE APPLICABLE: (I)
THE AMOUNT OF OID AS A PERCENTAGE OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS
CERTIFICATE WOULD BE APPROXIMATELY __________, (II) THE YIELD TO MATURITY OF
THIS CERTIFICATE FOR PURPOSES OF COMPUTING OID WOULD BE APPROXIMATELY _____% PER
ANNUM, COMPOUNDED MONTHLY, AND (III) THE TOTAL AMOUNT OF OID ALLOCABLE TO THE
INITIAL ACCRUAL PERIOD (NOVEMBER 12, 1998 TO DECEMBER 15, 1998) FOR PURPOSES OF
COMPUTING OID ON THIS CERTIFICATE AS A PERCENTAGE OF THE ORIGINAL PRINCIPAL
AMOUNT OF THIS CERTIFICATE WOULD BE APPROXIMATELY ____%. THE METHOD USED TO
CALCULATE THE YIELD TO MATURITY AND THE AMOUNT OF OID ALLOCABLE TO THE INITIAL
ACCRUAL PERIOD IS THE EXACT METHOD. THE ACTUAL YIELD TO MATURITY AND OID ON THIS
CERTIFICATE MAY DIFFER FROM THE PROJECTED AMOUNTS. THE PREPAYMENT ASSUMPTION
USED IN CALCULATING THE YIELD TO MATURITY IS 0% CPR AND THE PAYMENT OF THE
BALLOON PAYMENT ON THE HYPERAMORTIZATION DATE IN THE CASE OF THE
HYPERAMORTIZATION LOANS. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT THE ASSUMED RATE OR ANY OTHER RATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
A-10-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
INITIAL PASS-THROUGH RATE: 6.01% CERTIFICATE PRINCIPAL BALANCE OF THIS
CLASS J CERTIFICATE AS OF THE CLOSING
DATE $21,162,000
DATE OF POOLING & SERVICING MASTER SERVICER: GMAC COMMERCIAL
AGREEMENT: AS OF NOVEMBER 1, 1998 MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 INITIAL SPECIAL SERVICER: GMAC
COMMERCIAL MORTGAGE CORPORATION
CLOSING DATE: NOVEMBER 12, 1998 TRUSTEE: LASALLE NATIONAL BANK
FIRST DISTRIBUTION DATE: FISCAL AGENT: ABN AMRO BANK N.V.
DECEMBER 15, 1998
AGGREGATE CERTIFICATE PRINCIPAL CUSIP NO.
BALANCE OF THE CLASS J CERTIFICATE AS
OF THE CLOSING DATE: $21,162,000 NO. 1
CLASS J CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of a
pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class J Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of the
pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be held
in the Collection Account, the Distribution Account, the Insurance Policies and
any REO Properties. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Pooling and Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing an interest in the Class of
Certificates specified on the face hereof equal to the quotient expressed as a
percentage obtained by dividing the Certificate Principal Balance of this
Certificate specified on the face hereof by the aggregate initial Certificate
Principal Balance of the Class J Certificates. The Certificates are designated
as the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2 and are issued in sixteen Classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will evidence
in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and Servicing
Agreement and reference is made to the Pooling and Servicing Agreement for
information with respect to the interests, rights, benefits,
A-10-3
<PAGE>
obligations, proceeds, and duties evidenced hereby and the rights, duties and
obligations of the Trustee. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which the
Certificateholder is bound.In the case of any conflict between terms specified
in this Certificate and terms specified in the Pooling and Servicing Agreement,
the terms of the Pooling and Servicing Agreement shall govern
Distributions of principal of and interest on this Certificate will be
made out of the Available Distribution Amount, to the extent and subject to the
limitations set forth in the Pooling and Servicing Agreement, on the 15th day of
each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (a "Distribution Date") commencing on the first Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"). All sums
distributable on this Certificate are payable in the coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
Interest on this Certificate will accrue (computed as if each year
consisted of 360 days and each month consisted of 30 days) during the Interest
Accrual Period relating to such Distribution Date at a Pass-Through Rate
calculated as specified in the Pooling and Servicing Agreement on the
Certificate Principal Balance of this Certificate immediately prior to each
Distribution Date. Principal and interest allocated to this Certificate on any
Distribution Date will be in an amount due to this Certificate's pro rata share
of the amount to be distributed on the Certificates of this Class as of such
Distribution Date, with a final distribution to be made upon retirement of this
Certificate as set forth in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement or be valid
for any purpose.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses and
interest shortfalls on the Mortgage Loans allocated to any Class of Certificates
will be allocated pro rata among the outstanding Certificates of such Class.
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
in the Pooling and Servicing Agreement. As provided in the Pooling and Servicing
Agreement, withdrawals from the Collection Account shall be made from time to
time for purposes other than distributions to Certificateholders, such purposes
including reimbursement of certain expenses incurred with respect to the
servicing of the Mortgage Loans and administration of the Trust.
All distributions under the Pooling and Servicing Agreement to a nominee
of The Depository Trust Company ("DTC") will be made by or on behalf of the
Trustee by wire transfer in immediately available funds to an account specified
in the request of such Certificateholder. All distributions under the Pooling
and Servicing Agreement to Certificateholders will be made by wire transfer in
immediately available funds to the account specified by the Certificateholder,
at a bank or other entity having appropriate facilities therefor, if such
Certificateholder will have provided the Trustee with wiring instructions no
more than five business days after the related Record Date, or otherwise by
check mailed to such Certificateholder. Notwithstanding the above, the final
distribution on any Certificate will be made only upon presentation and
surrender of such Certificate at the location that will be specified in a notice
of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of
A-10-4
<PAGE>
the aggregate Certificate Principal Balance of the Certificates then
outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon the Certificate. The
Pooling and Servicing Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the Corporate Trust Office of the Trustee, duly endorsed by, or
accompanied by an assignment in the form below or other written instrument of
transfer in form satisfactory to the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations will be issued to the designated transferee or transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class A-1
and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations of
$100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates registered
in the name of Cede & Co., as nominee of the DTC. No Certificate Owner will be
entitled to receive a Definitive Certificate representing such interest, except
under the limited circumstances described in the Pooling and Servicing
Agreement. The Residual Certificates will be issued in fully registered,
certificated form in minimum percentage interests of 10% and in multiples of 10%
in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Trustee, the Fiscal Agent, the
Master Servicer, the Special Servicer, the Certificate Registrar nor any such
agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby (other
than the obligation of the Trustee to make payments to the Certificateholders as
set forth in Section 10.2 of the Pooling and Servicing Agreement and other than
the obligations in the nature of information or tax reporting) shall terminate
on the earliest of (i) the later of (A) the final payment or other liquidation
of the last Mortgage Loan remaining in the Trust and (B) the disposition of all
REO Property or (ii) the sale of the property held by the Trust in accordance
with Section 10.1(b) of the Pooling and Servicing Agreement; provided that in no
event shall the Trust continue beyond the expiration of 21 years from the death
of the last survivor of the descendants of Joseph P. Kennedy, the late
Ambassador of the United States to the Court of St. James, living on the date
hereof. The parties designated in the Pooling and Servicing Agreement may
exercise their option to purchase the Mortgage Loans and any other property
remaining in the Trust and cause the termination of the Trust in accordance with
the requirements set forth in the Pooling and Servicing Agreement. Upon
termination of the Trust and payment of the Certificates and of all
administrative expenses associated with the Trust, any remaining assets of the
Trust shall be distributed to the holders of the Class R-I Certificates.
A-10-5
<PAGE>
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-10-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:___________________________________
AUTHORIZED OFFICER
Dated:
A-10-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS J CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
By:___________________________________
AUTHORIZED SIGNATORY
A-10-8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT ......Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.................
common (State)
Additional abbreviations may also be used though not in the above list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------------------
- ------------------------------------------
-------------------------------------
- --------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- --------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- --------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the within-named
Trust, with full power of substitution in the premises.
Dated:
-------------------------- ---------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of this Certificate in every particular
without alteration or enlargement or any
change whatever.
- --------------------------------
SIGNATURE GUARANTEED
The signature must be guaranteed
by a commercial bank or trust
company or by a member firm of
the New York Stock Exchange or
another national securities
exchange. Notarized or witnessed
signatures are not acceptable.
A-10-9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________ for the account of _____________________ account
number _____________________ or, if mailed by check, to _________________.
Statements should be mailed to ______________. This information is provided by
assignee named above, or ____________________________, as its agent.
A-10-10
<PAGE>
EXHIBIT A-11
[FORM OF CLASS K CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A)(1) TO A PERSON THAT THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE SECURITIES ACT AND (B)
IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION.
NOTWITHSTANDING THE ABOVE, THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, EXCEPT FOR AN
INSURANCE COMPANY INVESTING SOLELY ASSETS OF ITS GENERAL ACCOUNT, WHICH SHALL BE
DEEMED TO HAVE REPRESENTED AND WARRANTED THAT THE PURCHASE AND OWNERSHIP OF THIS
CERTIFICATE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA
AND SECTION 4975 OF THE CODE.
THIS CLASS K CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN OTHER
CLASSES OF CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THE PORTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THE CERTIFICATES EVIDENCED
BY THIS CERTIFICATE WILL BE DECREASED BY THE PORTION OF PRINCIPAL DISTRIBUTIONS,
REALIZED LOSSES AND CERTAIN EXPENSE LOSSES ON THE CERTIFICATES ALLOCABLE TO THIS
CLASS K CERTIFICATE. ACCORDINGLY, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE LESS THAN THAT SET FORTH BELOW. ANYONE ACQUIRING THIS
CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE PRINCIPAL BALANCE BY INQUIRY
OF THE TRUSTEE.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
A-11-1
<PAGE>
THIS CLASS K CERTIFICATE WAS ISSUED ON NOVEMBER 12, 1998 AND IS TREATED AS
HAVING BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX
PURPOSES. THE ISSUE PRICE OF THIS CERTIFICATE IS _______% OF THE ORIGINAL
PRINCIPAL AMOUNT OF THIS CERTIFICATE. ASSUMING THAT THIS CERTIFICATE PAYS IN
ACCORDANCE WITH PROJECTED CASH FLOWS BASED ON CERTAIN ASSUMPTIONS USED IN
PRICING THE CERTIFICATES AND THAT NONE OF THE STATED INTEREST IS TREATED AS
"QUALIFIED STATED INTEREST", THE FOLLOWING INFORMATION WOULD BE APPLICABLE: (I)
THE AMOUNT OF OID AS A PERCENTAGE OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS
CERTIFICATE WOULD BE APPROXIMATELY __________, (II) THE YIELD TO MATURITY OF
THIS CERTIFICATE FOR PURPOSES OF COMPUTING OID WOULD BE APPROXIMATELY _____% PER
ANNUM, COMPOUNDED MONTHLY, AND (III) THE TOTAL AMOUNT OF OID ALLOCABLE TO THE
INITIAL ACCRUAL PERIOD (NOVEMBER 12, 1998 TO DECEMBER 15, 1998) FOR PURPOSES OF
COMPUTING OID ON THIS CERTIFICATE AS A PERCENTAGE OF THE ORIGINAL PRINCIPAL
AMOUNT OF THIS CERTIFICATE WOULD BE APPROXIMATELY ____%. THE METHOD USED TO
CALCULATE THE YIELD TO MATURITY AND THE AMOUNT OF OID ALLOCABLE TO THE INITIAL
ACCRUAL PERIOD IS THE EXACT METHOD. THE ACTUAL YIELD TO MATURITY AND OID ON THIS
CERTIFICATE MAY DIFFER FROM THE PROJECTED AMOUNTS. THE PREPAYMENT ASSUMPTION
USED IN CALCULATING THE YIELD TO MATURITY IS 0% CPR AND THE PAYMENT OF THE
BALLOON PAYMENT ON THE HYPERAMORTIZATION DATE IN THE CASE OF THE
HYPERAMORTIZATION LOANS. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT THE ASSUMED RATE OR ANY OTHER RATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
A-11-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
INITIAL PASS-THROUGH RATE: 6.01% CERTIFICATE PRINCIPAL BALANCE OF THIS
CLASS K CERTIFICATE AS OF THE CLOSING
DATE $10,582,000
DATE OF POOLING & SERVICING MASTER SERVICER: GMAC COMMERCIAL
AGREEMENT: AS OF NOVEMBER 1, 1998 MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 INITIAL SPECIAL SERVICER: GMAC
COMMERCIAL MORTGAGE CORPORATION
CLOSING DATE: NOVEMBER 12, 1998 TRUSTEE: LASALLE NATIONAL BANK
FIRST DISTRIBUTION DATE: FISCAL AGENT: ABN AMRO BANK N.V.
DECEMBER 15, 1998
AGGREGATE CERTIFICATE PRINCIPAL CUSIP NO.
BALANCE OF THE CLASS K CERTIFICATE AS
OF THE CLOSING DATE: $10,582,000 NO. 1
CLASS K CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of a
pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class K Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of the
pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be held
in the Collection Account, the Distribution Account, the Insurance Policies and
any REO Properties. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Pooling and Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing an interest in the Class of
Certificates specified on the face hereof equal to the quotient expressed as a
percentage obtained by dividing the Certificate Principal Balance of this
Certificate specified on the face hereof by the aggregate initial Certificate
Principal Balance of the Class K Certificates. The Certificates are designated
as the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2 and are issued in sixteen Classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will evidence
in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and Servicing
Agreement and reference is made to the Pooling and Servicing Agreement for
information with respect to the interests, rights, benefits,
A-11-3
<PAGE>
obligations, proceeds, and duties evidenced hereby and the rights, duties and
obligations of the Trustee. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which the
Certificateholder is bound. In the case of any conflict between terms specified
in this Certificate and terms specified in the Pooling and Servicing Agreement,
the terms of the Pooling and Servicing Agreement shall govern.
Distributions of principal of and interest on this Certificate will be
made out of the Available Distribution Amount, to the extent and subject to the
limitations set forth in the Pooling and Servicing Agreement, on the 15th day of
each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (a "Distribution Date") commencing on the first Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"). All sums
distributable on this Certificate are payable in the coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
Interest on this Certificate will accrue (computed as if each year
consisted of 360 days and each month consisted of 30 days) during the Interest
Accrual Period relating to such Distribution Date at a Pass-Through Rate
calculated as specified in the Pooling and Servicing Agreement on the
Certificate Principal Balance of this Certificate immediately prior to each
Distribution Date. Principal and interest allocated to this Certificate on any
Distribution Date will be in an amount due to this Certificate's pro rata share
of the amount to be distributed on the Certificates of this Class as of such
Distribution Date, with a final distribution to be made upon retirement of this
Certificate as set forth in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement or be valid
for any purpose.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses and
interest shortfalls on the Mortgage Loans allocated to any Class of Certificates
will be allocated pro rata among the outstanding Certificates of such Class.
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
in the Pooling and Servicing Agreement. As provided in the Pooling and Servicing
Agreement, withdrawals from the Collection Account shall be made from time to
time for purposes other than distributions to Certificateholders, such purposes
including reimbursement of certain expenses incurred with respect to the
servicing of the Mortgage Loans and administration of the Trust.
All distributions under the Pooling and Servicing Agreement to a nominee
of The Depository Trust Company ("DTC") will be made by or on behalf of the
Trustee by wire transfer in immediately available funds to an account specified
in the request of such Certificateholder. All distributions under the Pooling
and Servicing Agreement to Certificateholders will be made by wire transfer in
immediately available funds to the account specified by the Certificateholder,
at a bank or other entity having appropriate facilities therefor, if such
Certificateholder will have provided the Trustee with wiring instructions no
more than five business days after the related Record Date, or otherwise by
check mailed to such Certificateholder. Notwithstanding the above, the final
distribution on any Certificate will be made only upon presentation and
surrender of such Certificate at the location that will be specified in a notice
of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of
A-11-4
<PAGE>
the aggregate Certificate Principal Balance of the Certificates then
outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon the Certificate. The
Pooling and Servicing Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the Corporate Trust Office of the Trustee, duly endorsed by, or
accompanied by an assignment in the form below or other written instrument of
transfer in form satisfactory to the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations will be issued to the designated transferee or transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class A-1
and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations of
$100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates registered
in the name of Cede & Co., as nominee of the DTC. No Certificate Owner will be
entitled to receive a Definitive Certificate representing such interest, except
under the limited circumstances described in the Pooling and Servicing
Agreement. The Residual Certificates will be issued in fully registered,
certificated form in minimum percentage interests of 10% and in multiples of 10%
in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Trustee, the Fiscal Agent, the
Master Servicer, the Special Servicer, the Certificate Registrar nor any such
agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby (other
than the obligation of the Trustee to make payments to the Certificateholders as
set forth in Section 10.2 of the Pooling and Servicing Agreement and other than
the obligations in the nature of information or tax reporting) shall terminate
on the earliest of (i) the later of (A) the final payment or other liquidation
of the last Mortgage Loan remaining in the Trust and (B) the disposition of all
REO Property or (ii) the sale of the property held by the Trust in accordance
with Section 10.1(b) of the Pooling and Servicing Agreement; provided that in no
event shall the Trust continue beyond the expiration of 21 years from the death
of the last survivor of the descendants of Joseph P. Kennedy, the late
Ambassador of the United States to the Court of St. James, living on the date
hereof. The parties designated in the Pooling and Servicing Agreement may
exercise their option to purchase the Mortgage Loans and any other property
remaining in the Trust and cause the termination of the Trust in accordance with
the requirements set forth in the Pooling and Servicing Agreement. Upon
termination of the Trust and payment of the Certificates and of all
administrative expenses associated with the Trust, any remaining assets of the
Trust shall be distributed to the holders of the Class R-I Certificates.
A-11-5
<PAGE>
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-11-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:___________________________________
AUTHORIZED OFFICER
Dated:
A-11-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS K CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
BY:___________________________________
AUTHORIZED SIGNATORY
A-11-8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT ......Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.................
common (State)
Additional abbreviations may also be used though not in the above list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------------------
- ------------------------------------------
-------------------------------------
- --------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- --------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- --------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the within-named
Trust, with full power of substitution in the premises.
Dated:
-------------------------- ---------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of this Certificate in every particular
without alteration or enlargement or any
change whatever.
- --------------------------------
SIGNATURE GUARANTEED
The signature must be guaranteed
by a commercial bank or trust
company or by a member firm of
the New York Stock Exchange or
another national securities
exchange. Notarized or witnessed
signatures are not acceptable.
A-11-9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________ for the account of _____________________ account
number _____________________ or, if mailed by check, to _________________.
Statements should be mailed to ______________. This information is provided by
assignee named above, or ____________________________, as its agent.
A-11-10
<PAGE>
EXHIBIT A-12
[FORM OF CLASS L CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A)(1) TO A PERSON THAT THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE SECURITIES ACT AND (B)
IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION.
NOTWITHSTANDING THE ABOVE, THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, EXCEPT FOR AN
INSURANCE COMPANY INVESTING SOLELY ASSETS OF ITS GENERAL ACCOUNT, WHICH SHALL BE
DEEMED TO HAVE REPRESENTED AND WARRANTED THAT THE PURCHASE AND OWNERSHIP OF THIS
CERTIFICATE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA
AND SECTION 4975 OF THE CODE.
THIS CLASS L CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN OTHER
CLASSES OF CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THE PORTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THE CERTIFICATES EVIDENCED
BY THIS CERTIFICATE WILL BE DECREASED BY THE PORTION OF PRINCIPAL DISTRIBUTIONS,
REALIZED LOSSES AND CERTAIN EXPENSE LOSSES ON THE CERTIFICATES ALLOCABLE TO THIS
CLASS L CERTIFICATE. ACCORDINGLY, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE LESS THAN THAT SET FORTH BELOW. ANYONE ACQUIRING THIS
CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE PRINCIPAL BALANCE BY INQUIRY
OF THE TRUSTEE.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
A-14-1
<PAGE>
THIS CLASS L CERTIFICATE WAS ISSUED ON NOVEMBER 12, 1998 AND IS TREATED AS
HAVING BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX
PURPOSES. THE ISSUE PRICE OF THIS CERTIFICATE IS _______% OF THE ORIGINAL
PRINCIPAL AMOUNT OF THIS CERTIFICATE. ASSUMING THAT THIS CERTIFICATE PAYS IN
ACCORDANCE WITH PROJECTED CASH FLOWS BASED ON CERTAIN ASSUMPTIONS USED IN
PRICING THE CERTIFICATES AND THAT NONE OF THE STATED INTEREST IS TREATED AS
"QUALIFIED STATED INTEREST", THE FOLLOWING INFORMATION WOULD BE APPLICABLE: (I)
THE AMOUNT OF OID AS A PERCENTAGE OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS
CERTIFICATE WOULD BE APPROXIMATELY __________, (II) THE YIELD TO MATURITY OF
THIS CERTIFICATE FOR PURPOSES OF COMPUTING OID WOULD BE APPROXIMATELY _____% PER
ANNUM, COMPOUNDED MONTHLY, AND (III) THE TOTAL AMOUNT OF OID ALLOCABLE TO THE
INITIAL ACCRUAL PERIOD (NOVEMBER 12, 1998 TO DECEMBER 15, 1998) FOR PURPOSES OF
COMPUTING OID ON THIS CERTIFICATE AS A PERCENTAGE OF THE ORIGINAL PRINCIPAL
AMOUNT OF THIS CERTIFICATE WOULD BE APPROXIMATELY ____%. THE METHOD USED TO
CALCULATE THE YIELD TO MATURITY AND THE AMOUNT OF OID ALLOCABLE TO THE INITIAL
ACCRUAL PERIOD IS THE EXACT METHOD. THE ACTUAL YIELD TO MATURITY AND OID ON THIS
CERTIFICATE MAY DIFFER FROM THE PROJECTED AMOUNTS. THE PREPAYMENT ASSUMPTION
USED IN CALCULATING THE YIELD TO MATURITY IS 0% CPR AND THE PAYMENT OF THE
BALLOON PAYMENT ON THE HYPERAMORTIZATION DATE IN THE CASE OF THE
HYPERAMORTIZATION LOANS. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT THE ASSUMED RATE OR ANY OTHER RATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
A-14-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
INITIAL PASS-THROUGH RATE: 6.01% CERTIFICATE PRINCIPAL BALANCE OF THIS
CLASS L CERTIFICATE AS OF THE CLOSING
DATE $15,871,000
DATE OF POOLING & SERVICING MASTER SERVICER: GMAC COMMERCIAL
AGREEMENT: AS OF NOVEMBER 1, 1998 MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 INITIAL SPECIAL SERVICER: GMAC
COMMERCIAL MORTGAGE CORPORATION
CLOSING DATE: NOVEMBER 12, 1998 TRUSTEE: LASALLE NATIONAL BANK
FIRST DISTRIBUTION DATE: FISCAL AGENT: ABN AMRO BANK N.V.
DECEMBER 15, 1998
AGGREGATE CERTIFICATE PRINCIPAL CUSIP NO.
BALANCE OF THE CLASS L CERTIFICATE AS
OF THE CLOSING DATE: $15,871,000 NO. 1
CLASS L CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of a
pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class L Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of the
pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be held
in the Collection Account, the Distribution Account, the Insurance Policies and
any REO Properties. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Pooling and Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing an interest in the Class of
Certificates specified on the face hereof equal to the quotient expressed as a
percentage obtained by dividing the Certificate Principal Balance of this
Certificate specified on the face hereof by the aggregate initial Certificate
Principal Balance of the Class L Certificates. The Certificates are designated
as the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2 and are issued in sixteen Classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will evidence
in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and Servicing
Agreement and reference is made to the Pooling and Servicing Agreement for
information with respect to the interests, rights, benefits, obligations,
proceeds, and duties evidenced hereby and the rights, duties and obligations of
the Trustee. This
A-14-3
<PAGE>
Certificate is issued under and is subject to the terms, provisions and
conditions of the Pooling and Servicing Agreement, to which Pooling and
Servicing Agreement, as amended from time to time, the Certificateholder by
virtue of the acceptance hereof assents and by which the Certificateholder is
bound. In the case of any conflict between terms specified in this Certificate
and terms specified in the Pooling and Servicing Agreement, the terms of the
Pooling and Servicing Agreement shall govern.
Distributions of principal of and interest on this Certificate will be
made out of the Available Distribution Amount, to the extent and subject to the
limitations set forth in the Pooling and Servicing Agreement, on the 15th day of
each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (a "Distribution Date") commencing on the first Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"). All sums
distributable on this Certificate are payable in the coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
Interest on this Certificate will accrue (computed as if each year
consisted of 360 days and each month consisted of 30 days) during the Interest
Accrual Period relating to such Distribution Date at a Pass-Through Rate
calculated as specified in the Pooling and Servicing Agreement on the
Certificate Principal Balance of this Certificate immediately prior to each
Distribution Date. Principal and interest allocated to this Certificate on any
Distribution Date will be in an amount due to this Certificate's pro rata share
of the amount to be distributed on the Certificates of this Class as of such
Distribution Date, with a final distribution to be made upon retirement of this
Certificate as set forth in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement or be valid
for any purpose.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses and
interest shortfalls on the Mortgage Loans allocated to any Class of Certificates
will be allocated pro rata among the outstanding Certificates of such Class.
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
in the Pooling and Servicing Agreement. As provided in the Pooling and Servicing
Agreement, withdrawals from the Collection Account shall be made from time to
time for purposes other than distributions to Certificateholders, such purposes
including reimbursement of certain expenses incurred with respect to the
servicing of the Mortgage Loans and administration of the Trust.
All distributions under the Pooling and Servicing Agreement to a nominee
of The Depository Trust Company ("DTC") will be made by or on behalf of the
Trustee by wire transfer in immediately available funds to an account specified
in the request of such Certificateholder. All distributions under the Pooling
and Servicing Agreement to Certificateholders will be made by wire transfer in
immediately available funds to the account specified by the Certificateholder,
at a bank or other entity having appropriate facilities therefor, if such
Certificateholder will have provided the Trustee with wiring instructions no
more than five business days after the related Record Date, or otherwise by
check mailed to such Certificateholder. Notwithstanding the above, the final
distribution on any Certificate will be made only upon presentation and
surrender of such Certificate at the location that will be specified in a notice
of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of the aggregate Certificate Principal Balance of the Certificates then
outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such
A-14-4
<PAGE>
Holder and upon all future Holders of this Certificate and of any Certificate
issued upon the transfer hereof or in exchange herefor or in lieu hereof whether
or not notation of such consent is made upon the Certificate. The Pooling and
Servicing Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the Corporate Trust Office of the Trustee, duly endorsed by, or
accompanied by an assignment in the form below or other written instrument of
transfer in form satisfactory to the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations will be issued to the designated transferee or transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class A-1
and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations of
$100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates registered
in the name of Cede & Co., as nominee of the DTC. No Certificate Owner will be
entitled to receive a Definitive Certificate representing such interest, except
under the limited circumstances described in the Pooling and Servicing
Agreement. The Residual Certificates will be issued in fully registered,
certificated form in minimum percentage interests of 10% and in multiples of 10%
in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Trustee, the Fiscal Agent, the
Master Servicer, the Special Servicer, the Certificate Registrar nor any such
agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby (other
than the obligation of the Trustee to make payments to the Certificateholders as
set forth in Section 10.2 of the Pooling and Servicing Agreement and other than
the obligations in the nature of information or tax reporting) shall terminate
on the earliest of (i) the later of (A) the final payment or other liquidation
of the last Mortgage Loan remaining in the Trust and (B) the disposition of all
REO Property or (ii) the sale of the property held by the Trust in accordance
with Section 10.1(b) of the Pooling and Servicing Agreement; provided that in no
event shall the Trust continue beyond the expiration of 21 years from the death
of the last survivor of the descendants of Joseph P. Kennedy, the late
Ambassador of the United States to the Court of St. James, living on the date
hereof. The parties designated in the Pooling and Servicing Agreement may
exercise their option to purchase the Mortgage Loans and any other property
remaining in the Trust and cause the termination of the Trust in accordance with
the requirements set forth in the Pooling and Servicing Agreement. Upon
termination of the Trust and payment of the Certificates and of all
administrative expenses associated with the Trust, any remaining assets of the
Trust shall be distributed to the holders of the Class R-I Certificates.
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
A-14-5
<PAGE>
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-14-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:___________________________________
AUTHORIZED OFFICER
Dated:
A-14-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS L CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
BY:___________________________________
AUTHORIZED SIGNATORY
A-14-8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT ......Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.................
common (State)
Additional abbreviations may also be used though not in the above list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------------------
- ------------------------------------------
-------------------------------------
- --------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- --------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- --------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the within-named
Trust, with full power of substitution in the premises.
Dated:
-------------------------- ---------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of this Certificate in every particular
without alteration or enlargement or any
change whatever.
- --------------------------------
SIGNATURE GUARANTEED
The signature must be guaranteed
by a commercial bank or trust
company or by a member firm of
the New York Stock Exchange or
another national securities
exchange. Notarized or witnessed
signatures are not acceptable.
A-14-9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________ for the account of _____________________ account
number _____________________ or, if mailed by check, to _________________.
Statements should be mailed to ______________. This information is provided by
assignee named above, or ____________________________, as its agent.
A-14-10
<PAGE>
EXHIBIT A-13
[FORM OF CLASS M CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A)(1) TO A PERSON THAT THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE SECURITIES ACT AND (B)
IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION.
NOTWITHSTANDING THE ABOVE, THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, EXCEPT FOR AN
INSURANCE COMPANY INVESTING SOLELY ASSETS OF ITS GENERAL ACCOUNT, WHICH SHALL BE
DEEMED TO HAVE REPRESENTED AND WARRANTED THAT THE PURCHASE AND OWNERSHIP OF THIS
CERTIFICATE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA
AND SECTION 4975 OF THE CODE.
THIS CLASS M CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN OTHER
CLASSES OF CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THE PORTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THE CERTIFICATES EVIDENCED
BY THIS CERTIFICATE WILL BE DECREASED BY THE PORTION OF PRINCIPAL DISTRIBUTIONS,
REALIZED LOSSES AND CERTAIN EXPENSE LOSSES ON THE CERTIFICATES ALLOCABLE TO THIS
CLASS M CERTIFICATE. ACCORDINGLY, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE LESS THAN THAT SET FORTH BELOW. ANYONE ACQUIRING THIS
CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE PRINCIPAL BALANCE BY INQUIRY
OF THE TRUSTEE.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
A-13-1
<PAGE>
THIS CLASS M CERTIFICATE WAS ISSUED ON NOVEMBER 12, 1998 AND IS TREATED AS
HAVING BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX
PURPOSES. THE ISSUE PRICE OF THIS CERTIFICATE IS _______% OF THE ORIGINAL
PRINCIPAL AMOUNT OF THIS CERTIFICATE. ASSUMING THAT THIS CERTIFICATE PAYS IN
ACCORDANCE WITH PROJECTED CASH FLOWS BASED ON CERTAIN ASSUMPTIONS USED IN
PRICING THE CERTIFICATES AND THAT NONE OF THE STATED INTEREST IS TREATED AS
"QUALIFIED STATED INTEREST", THE FOLLOWING INFORMATION WOULD BE APPLICABLE: (I)
THE AMOUNT OF OID AS A PERCENTAGE OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS
CERTIFICATE WOULD BE APPROXIMATELY __________, (II) THE YIELD TO MATURITY OF
THIS CERTIFICATE FOR PURPOSES OF COMPUTING OID WOULD BE APPROXIMATELY _____% PER
ANNUM, COMPOUNDED MONTHLY, AND (III) THE TOTAL AMOUNT OF OID ALLOCABLE TO THE
INITIAL ACCRUAL PERIOD (NOVEMBER 12, 1998 TO DECEMBER 15, 1998) FOR PURPOSES OF
COMPUTING OID ON THIS CERTIFICATE AS A PERCENTAGE OF THE ORIGINAL PRINCIPAL
AMOUNT OF THIS CERTIFICATE WOULD BE APPROXIMATELY ____%. THE METHOD USED TO
CALCULATE THE YIELD TO MATURITY AND THE AMOUNT OF OID ALLOCABLE TO THE INITIAL
ACCRUAL PERIOD IS THE EXACT METHOD. THE ACTUAL YIELD TO MATURITY AND OID ON THIS
CERTIFICATE MAY DIFFER FROM THE PROJECTED AMOUNTS. THE PREPAYMENT ASSUMPTION
USED IN CALCULATING THE YIELD TO MATURITY IS 0% CPR AND THE PAYMENT OF THE
BALLOON PAYMENT ON THE HYPERAMORTIZATION DATE IN THE CASE OF THE
HYPERAMORTIZATION LOANS. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT THE ASSUMED RATE OR ANY OTHER RATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
A-13-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
INITIAL PASS-THROUGH RATE: 6.01% CERTIFICATE PRINCIPAL BALANCE OF THIS
CLASS L CERTIFICATE AS OF THE CLOSING
DATE $10,581,000
DATE OF POOLING & SERVICING MASTER SERVICER: GMAC COMMERCIAL
AGREEMENT: AS OF NOVEMBER 1, 1998 MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 INITIAL SPECIAL SERVICER: GMAC
COMMERCIAL MORTGAGE CORPORATION
CLOSING DATE: NOVEMBER 12, 1998 TRUSTEE: LASALLE NATIONAL BANK
FIRST DISTRIBUTION DATE: FISCAL AGENT: ABN AMRO BANK N.V.
DECEMBER 15, 1998
AGGREGATE CERTIFICATE PRINCIPAL CUSIP NO.
BALANCE OF THE CLASS L CERTIFICATE AS
OF THE CLOSING DATE: $10,581,000 NO. 1
CLASS M CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of a
pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class M Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of the
pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be held
in the Collection Account, the Distribution Account, the Insurance Policies and
any REO Properties. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Pooling and Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing an interest in the Class of
Certificates specified on the face hereof equal to the quotient expressed as a
percentage obtained by dividing the Certificate Principal Balance of this
Certificate specified on the face hereof by the aggregate initial Certificate
Principal Balance of the Class M Certificates. The Certificates are designated
as the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2 and are issued in sixteen Classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will evidence
in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and Servicing
Agreement and reference is made to the Pooling and Servicing Agreement for
information with respect to the interests, rights, benefits, obligations,
proceeds, and duties evidenced hereby and the rights, duties and obligations of
the Trustee. This
A-13-3
<PAGE>
Certificate is issued under and is subject to the terms, provisions and
conditions of the Pooling and Servicing Agreement, to which Pooling and
Servicing Agreement, as amended from time to time, the Certificateholder by
virtue of the acceptance hereof assents and by which the Certificateholder is
bound. In the case of any conflict between terms specified in this Certificate
and terms specified in the Pooling and Servicing Agreement, the terms of the
Pooling and Servicing Agreement shall govern.
Distributions of principal of and interest on this Certificate will be
made out of the Available Distribution Amount, to the extent and subject to the
limitations set forth in the Pooling and Servicing Agreement, on the 15th day of
each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (a "Distribution Date") commencing on the first Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"). All sums
distributable on this Certificate are payable in the coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
Interest on this Certificate will accrue (computed as if each year
consisted of 360 days and each month consisted of 30 days) during the Interest
Accrual Period relating to such Distribution Date at a Pass-Through Rate
calculated as specified in the Pooling and Servicing Agreement on the
Certificate Principal Balance of this Certificate immediately prior to each
Distribution Date. Principal and interest allocated to this Certificate on any
Distribution Date will be in an amount due to this Certificate's pro rata share
of the amount to be distributed on the Certificates of this Class as of such
Distribution Date, with a final distribution to be made upon retirement of this
Certificate as set forth in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement or be valid
for any purpose.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses and
interest shortfalls on the Mortgage Loans allocated to any Class of Certificates
will be allocated pro rata among the outstanding Certificates of such Class.
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
in the Pooling and Servicing Agreement. As provided in the Pooling and Servicing
Agreement, withdrawals from the Collection Account shall be made from time to
time for purposes other than distributions to Certificateholders, such purposes
including reimbursement of certain expenses incurred with respect to the
servicing of the Mortgage Loans and administration of the Trust.
All distributions under the Pooling and Servicing Agreement to a nominee
of The Depository Trust Company ("DTC") will be made by or on behalf of the
Trustee by wire transfer in immediately available funds to an account specified
in the request of such Certificateholder. All distributions under the Pooling
and Servicing Agreement to Certificateholders will be made by wire transfer in
immediately available funds to the account specified by the Certificateholder,
at a bank or other entity having appropriate facilities therefor, if such
Certificateholder will have provided the Trustee with wiring instructions no
more than five business days after the related Record Date, or otherwise by
check mailed to such Certificateholder. Notwithstanding the above, the final
distribution on any Certificate will be made only upon presentation and
surrender of such Certificate at the location that will be specified in a notice
of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of the aggregate Certificate Principal Balance of the Certificates then
outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such
A-13-4
<PAGE>
Holder and upon all future Holders of this Certificate and of any Certificate
issued upon the transfer hereof or in exchange herefor or in lieu hereof whether
or not notation of such consent is made upon the Certificate. The Pooling and
Servicing Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the Corporate Trust Office of the Trustee, duly endorsed by, or
accompanied by an assignment in the form below or other written instrument of
transfer in form satisfactory to the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations will be issued to the designated transferee or transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class A-1
and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations of
$100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates registered
in the name of Cede & Co., as nominee of the DTC. No Certificate Owner will be
entitled to receive a Definitive Certificate representing such interest, except
under the limited circumstances described in the Pooling and Servicing
Agreement. The Residual Certificates will be issued in fully registered,
certificated form in minimum percentage interests of 10% and in multiples of 10%
in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Trustee, the Fiscal Agent, the
Master Servicer, the Special Servicer, the Certificate Registrar nor any such
agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby (other
than the obligation of the Trustee to make payments to the Certificateholders as
set forth in Section 10.2 of the Pooling and Servicing Agreement and other than
the obligations in the nature of information or tax reporting) shall terminate
on the earliest of (i) the later of (A) the final payment or other liquidation
of the last Mortgage Loan remaining in the Trust and (B) the disposition of all
REO Property or (ii) the sale of the property held by the Trust in accordance
with Section 10.1(b) of the Pooling and Servicing Agreement; provided that in no
event shall the Trust continue beyond the expiration of 21 years from the death
of the last survivor of the descendants of Joseph P. Kennedy, the late
Ambassador of the United States to the Court of St. James, living on the date
hereof. The parties designated in the Pooling and Servicing Agreement may
exercise their option to purchase the Mortgage Loans and any other property
remaining in the Trust and cause the termination of the Trust in accordance with
the requirements set forth in the Pooling and Servicing Agreement. Upon
termination of the Trust and payment of the Certificates and of all
administrative expenses associated with the Trust, any remaining assets of the
Trust shall be distributed to the holders of the Class R-I Certificates.
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
A-13-5
<PAGE>
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-13-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:___________________________________
AUTHORIZED OFFICER
Dated:
A-13-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS M CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
BY:___________________________________
AUTHORIZED SIGNATORY
A-13-8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT ......Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.................
common (State)
Additional abbreviations may also be used though not in the above list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------------------
- ------------------------------------------
-------------------------------------
- --------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- --------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- --------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the within-named
Trust, with full power of substitution in the premises.
Dated:
-------------------------- ---------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of this Certificate in every particular
without alteration or enlargement or any
change whatever.
- --------------------------------
SIGNATURE GUARANTEED
The signature must be guaranteed
by a commercial bank or trust
company or by a member firm of
the New York Stock Exchange or
another national securities
exchange. Notarized or witnessed
signatures are not acceptable.
A-13-9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________ for the account of _____________________ account
number _____________________ or, if mailed by check, to _________________.
Statements should be mailed to ______________. This information is provided by
assignee named above, or ____________________________, as its agent.
A-13-10
<PAGE>
EXHIBIT A-14
[FORM OF CLASS N CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A)(1) TO A PERSON THAT THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE SECURITIES ACT AND (B)
IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION.
NOTWITHSTANDING THE ABOVE, THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE THIS CERTIFICATE, EXCEPT FOR AN
INSURANCE COMPANY INVESTING SOLELY ASSETS OF ITS GENERAL ACCOUNT, WHICH SHALL BE
DEEMED TO HAVE REPRESENTED AND WARRANTED THAT THE PURCHASE AND OWNERSHIP OF THIS
CERTIFICATE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA
AND SECTION 4975 OF THE CODE.
THIS CLASS N CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN OTHER
CLASSES OF CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THE PORTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THE CERTIFICATES EVIDENCED
BY THIS CERTIFICATE WILL BE DECREASED BY THE PORTION OF PRINCIPAL DISTRIBUTIONS,
REALIZED LOSSES AND CERTAIN EXPENSE LOSSES ON THE CERTIFICATES ALLOCABLE TO THIS
CLASS N CERTIFICATE. ACCORDINGLY, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE LESS THAN THAT SET FORTH BELOW. ANYONE ACQUIRING THIS
CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE PRINCIPAL BALANCE BY INQUIRY
OF THE TRUSTEE.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
A-14-1
<PAGE>
THIS CLASS N CERTIFICATE WAS ISSUED ON NOVEMBER 12, 1998 AND TO THE EXTENT IT
CONSTITUTES A REMIC REGULAR INTEREST, IT IS TREATED AS HAVING BEEN ISSUED WITH
ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX PURPOSES. THE ISSUE PRICE
OF THIS CERTIFICATE ALLOCATED BY THE DEPOSITOR TO THE REMIC REGULAR INTEREST IS
_______% OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS CERTIFICATE. ASSUMING THAT
THIS CERTIFICATE PAYS IN ACCORDANCE WITH PROJECTED CASH FLOWS BASED ON CERTAIN
ASSUMPTIONS USED IN PRICING THE CERTIFICATES AND THAT NONE OF THE STATED
INTEREST IS TREATED AS "QUALIFIED STATED INTEREST", THE FOLLOWING INFORMATION
WOULD BE APPLICABLE: (I) THE AMOUNT OF OID AS A PERCENTAGE OF THE ORIGINAL
PRINCIPAL AMOUNT OF THIS CERTIFICATE WOULD BE APPROXIMATELY __________, (II) THE
YIELD TO MATURITY OF THIS CERTIFICATE FOR PURPOSES OF COMPUTING OID WOULD BE
APPROXIMATELY _____% PER ANNUM, COMPOUNDED MONTHLY, AND (III) THE TOTAL AMOUNT
OF OID ALLOCABLE TO THE INITIAL ACCRUAL PERIOD (NOVEMBER 12, 1998 TO DECEMBER
15, 1998) FOR PURPOSES OF COMPUTING OID ON THIS CERTIFICATE AS A PERCENTAGE OF
THE ORIGINAL PRINCIPAL AMOUNT OF THIS CERTIFICATE WOULD BE APPROXIMATELY ____%.
THE METHOD USED TO CALCULATE THE YIELD TO MATURITY AND THE AMOUNT OF OID
ALLOCABLE TO THE INITIAL ACCRUAL PERIOD IS THE EXACT METHOD. THE ACTUAL YIELD TO
MATURITY AND OID ON THIS CERTIFICATE MAY DIFFER FROM THE PROJECTED AMOUNTS. THE
PREPAYMENT ASSUMPTION USED IN CALCULATING THE YIELD TO MATURITY IS 0% CPR AND
THE PAYMENT OF THE BALLOON PAYMENT ON THE HYPERAMORTIZATION DATE IN THE CASE OF
THE HYPERAMORTIZATION LOANS. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS
WILL PREPAY AT THE ASSUMED RATE OR ANY OTHER RATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
A-14-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
INITIAL PASS-THROUGH RATE: 6.01% CERTIFICATE PRINCIPAL BALANCE OF THIS
CLASS L CERTIFICATE AS OF THE CLOSING
DATE $10,581,000
DATE OF POOLING & SERVICING MASTER SERVICER: GMAC COMMERCIAL
AGREEMENT: AS OF NOVEMBER 1, 1998 MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 INITIAL SPECIAL SERVICER: GMAC
COMMERCIAL MORTGAGE CORPORATION
CLOSING DATE: NOVEMBER 12, 1998 TRUSTEE: LASALLE NATIONAL BANK
FIRST DISTRIBUTION DATE: FISCAL AGENT: ABN AMRO BANK N.V.
DECEMBER 15, 1998
AGGREGATE CERTIFICATE PRINCIPAL CUSIP NO.
BALANCE OF THE CLASS L CERTIFICATE AS
OF THE CLOSING DATE: $10,581,000 NO. 1
CLASS N CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of a
pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class N Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of the
pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be held
in the Collection Account, the Distribution Account, the Insurance Policies and
any REO Properties. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Pooling and Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing an interest in the Class of
Certificates specified on the face hereof equal to the quotient expressed as a
percentage obtained by dividing the Certificate Principal Balance of this
Certificate specified on the face hereof by the aggregate initial Certificate
Principal Balance of the Class N Certificates. The Certificates are designated
as the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2 and are issued in sixteen Classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will evidence
in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and Servicing
Agreement and reference is made to the Pooling and Servicing Agreement for
information with respect to the interests, rights, benefits, obligations,
proceeds, and duties evidenced hereby and the rights, duties and obligations of
the Trustee. This
A-14-3
<PAGE>
Certificate is issued under and is subject to the terms, provisions and
conditions of the Pooling and Servicing Agreement, to which Pooling and
Servicing Agreement, as amended from time to time, the Certificateholder by
virtue of the acceptance hereof assents and by which the Certificateholder is
bound. In the case of any conflict between terms specified in this Certificate
and terms specified in the Pooling and Servicing Agreement, the terms of the
Pooling and Servicing Agreement shall govern.
Distributions of principal of and interest on this Certificate will be
made out of the Available Distribution Amount, to the extent and subject to the
limitations set forth in the Pooling and Servicing Agreement, on the 15th day of
each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (a "Distribution Date") commencing on the first Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date"). All sums
distributable on this Certificate are payable in the coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
Interest on this Certificate will accrue (computed as if each year
consisted of 360 days and each month consisted of 30 days) during the Interest
Accrual Period relating to such Distribution Date at a Pass-Through Rate
calculated as specified in the Pooling and Servicing Agreement on the
Certificate Principal Balance of this Certificate immediately prior to each
Distribution Date. Principal and interest allocated to this Certificate on any
Distribution Date will be in an amount due to this Certificate's pro rata share
of the amount to be distributed on the Certificates of this Class as of such
Distribution Date, with a final distribution to be made upon retirement of this
Certificate as set forth in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement or be valid
for any purpose.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses and
interest shortfalls on the Mortgage Loans allocated to any Class of Certificates
will be allocated pro rata among the outstanding Certificates of such Class.
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
in the Pooling and Servicing Agreement. As provided in the Pooling and Servicing
Agreement, withdrawals from the Collection Account shall be made from time to
time for purposes other than distributions to Certificateholders, such purposes
including reimbursement of certain expenses incurred with respect to the
servicing of the Mortgage Loans and administration of the Trust.
All distributions under the Pooling and Servicing Agreement to a nominee
of The Depository Trust Company ("DTC") will be made by or on behalf of the
Trustee by wire transfer in immediately available funds to an account specified
in the request of such Certificateholder. All distributions under the Pooling
and Servicing Agreement to Certificateholders will be made by wire transfer in
immediately available funds to the account specified by the Certificateholder,
at a bank or other entity having appropriate facilities therefor, if such
Certificateholder will have provided the Trustee with wiring instructions no
more than five business days after the related Record Date, or otherwise by
check mailed to such Certificateholder. Notwithstanding the above, the final
distribution on any Certificate will be made only upon presentation and
surrender of such Certificate at the location that will be specified in a notice
of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of the aggregate Certificate Principal Balance of the Certificates then
outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such
A-14-4
<PAGE>
Holder and upon all future Holders of this Certificate and of any Certificate
issued upon the transfer hereof or in exchange herefor or in lieu hereof whether
or not notation of such consent is made upon the Certificate. The Pooling and
Servicing Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the Corporate Trust Office of the Trustee, duly endorsed by, or
accompanied by an assignment in the form below or other written instrument of
transfer in form satisfactory to the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations will be issued to the designated transferee or transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class A-1
and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations of
$100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates registered
in the name of Cede & Co., as nominee of the DTC. No Certificate Owner will be
entitled to receive a Definitive Certificate representing such interest, except
under the limited circumstances described in the Pooling and Servicing
Agreement. The Residual Certificates will be issued in fully registered,
certificated form in minimum percentage interests of 10% and in multiples of 10%
in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Trustee, the Fiscal Agent, the
Master Servicer, the Special Servicer, the Certificate Registrar nor any such
agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby (other
than the obligation of the Trustee to make payments to the Certificateholders as
set forth in Section 10.2 of the Pooling and Servicing Agreement and other than
the obligations in the nature of information or tax reporting) shall terminate
on the earliest of (i) the later of (A) the final payment or other liquidation
of the last Mortgage Loan remaining in the Trust and (B) the disposition of all
REO Property or (ii) the sale of the property held by the Trust in accordance
with Section 10.1(b) of the Pooling and Servicing Agreement; provided that in no
event shall the Trust continue beyond the expiration of 21 years from the death
of the last survivor of the descendants of Joseph P. Kennedy, the late
Ambassador of the United States to the Court of St. James, living on the date
hereof. The parties designated in the Pooling and Servicing Agreement may
exercise their option to purchase the Mortgage Loans and any other property
remaining in the Trust and cause the termination of the Trust in accordance with
the requirements set forth in the Pooling and Servicing Agreement. Upon
termination of the Trust and payment of the Certificates and of all
administrative expenses associated with the Trust, any remaining assets of the
Trust shall be distributed to the holders of the Class R-I Certificates.
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
A-14-5
<PAGE>
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-14-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:___________________________________
AUTHORIZED OFFICER
Dated:
A-14-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS N CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
BY:___________________________________
AUTHORIZED SIGNATORY
A-14-8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT ......Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.................
common (State)
Additional abbreviations may also be used though not in the above list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------------------
- ------------------------------------------
-------------------------------------
- --------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- --------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- --------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the within-named
Trust, with full power of substitution in the premises.
Dated:
-------------------------- ---------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of this Certificate in every particular
without alteration or enlargement or any
change whatever.
- --------------------------------
SIGNATURE GUARANTEED
The signature must be guaranteed
by a commercial bank or trust
company or by a member firm of
the New York Stock Exchange or
another national securities
exchange. Notarized or witnessed
signatures are not acceptable.
A-14-9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________ for the account of _____________________ account
number _____________________ or, if mailed by check, to _________________.
Statements should be mailed to ______________. This information is provided by
assignee named above, or ____________________________, as its agent.
A-14-10
<PAGE>
EXHIBIT A-15
[FORM OF CLASS R-I CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A)(1) TO A PERSON THAT THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE SECURITIES ACT AND (B)
IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS THE
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE"). THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A
NON-UNITED STATES PERSON.
THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED TO
"DISQUALIFIED ORGANIZATIONS" WITHIN THE MEANING OF THE CODE.
A SALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS R-I CERTIFICATE MAY BE MADE
ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE TRUSTEE TO
THE EFFECT THAT (1) SUCH TRANSFEREE AGREES TO BE BOUND BY THE TERMS OF THE
POOLING AND SERVICING AGREEMENT AND ALL RESTRICTIONS SET FORTH ON THE FACE
HEREOF, (2) SUCH TRANSFEREE IS NOT (A) THE UNITED STATES, ANY STATE OR POLITICAL
SUBDIVISION THEREOF OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING
(OTHER THAN AN INSTRUMENTALITY WHICH IS A CORPORATION IF ALL OF ITS ACTIVITIES
ARE SUBJECT TO TAX AND, EXCEPT FOR FHLMC, A MAJORITY ITS BOARD OF DIRECTORS IS
NOT SELECTED BY ANY SUCH GOVERNMENTAL UNIT), (B) AN ORGANIZATION (OTHER THAN
CERTAIN FARMERS' COOPERATIVES DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS
EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE (UNLESS SUCH ORGANIZATION
IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE ON UNRELATED BUSINESS
TAXABLE INCOME), (C) A RURAL ELECTRIC OR TELEPHONE COOPERATIVE DESCRIBED IN
SECTION 1381 OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES
(A), (B) OR (C) BEING HEREINAFTER REFERRED TO AS A "DISQUALIFIED ORGANIZATION"),
(D) A PERSON THAT IS NOT A CITIZEN OF OR RESIDENT OF THE UNITED STATES, A
CORPORATION, PARTNERSHIP OR OTHER ENTITY CREATED OR ORGANIZED IN, OR UNDER THE
LAWS OF, THE UNITED STATES OR ANY POLITICAL SUBDIVISION THEREOF, OR AN ESTATE
WHOSE
A-15-1
<PAGE>
INCOME FROM SOURCES WITHOUT THE UNITED STATES IS INCLUDABLE IN GROSS INCOME FOR
UNITED STATES FEDERAL INCOME TAX PURPOSES REGARDLESS OF ITS CONNECTION WITH THE
CONDUCT OF TRADE OR BUSINESS IN THE UNITED STATES OR A TRUST SUBJECT TO THE
CONTROL OF A UNITED STATES FIDUCIARY AND THE PRIMARY SUPERVISION OF A UNITED
STATES COURT (ANY SUCH PERSON BEING HEREINAFTER REFERRED TO AS A "UNITED STATES
PERSON") OR (E) AN AGENT OF A DISQUALIFIED ORGANIZATION OR A NONUNITED STATES
PERSON, AND (3) NO PURPOSE OF SUCH TRANSFER IS TO ENABLE THE TRANSFEROR TO
IMPEDE THE ASSESSMENT OR COLLECTION OF TAX. NOTWITHSTANDING THE REGISTRATION IN
THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS
CLASS R-I CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR A NONUNITED STATES
PERSON OR AN AGENT OF A DISQUALIFIED ORGANIZATION OR A NON-UNITED STATES PERSON,
OR TO ANY OTHER PROHIBITED TRANSFEREE AS PROVIDED IN THE POOLING AND SERVICING
AGREEMENT, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT
WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY
PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS
ON THIS CERTIFICATE. EACH HOLDER OF A CLASS R-I CERTIFICATE BY ACCEPTANCE OF
THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS
PARAGRAPH.
A-15-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
PERCENTAGE INTEREST OF THIS CLASS R-I MASTER SERVICER: GMAC COMMERCIAL
CERTIFICATE: _____% MORTGAGE CORPORATION
DATE OF POOLING & SERVICING INITIAL SPECIAL SERVICER: GMAC
AGREEMENT: AS OF NOVEMBER 1, 1998 COMMERCIAL MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 TRUSTEE: LASALLE NATIONAL BANK
CLOSING DATE: NOVEMBER 12, 1998 FISCAL AGENT: ABN AMRO BANK N.V.
FIRST DISTRIBUTION DATE:
DECEMBER 15, 1998
NO. _________
CLASS R-I CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of a
pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class R-I Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of the
pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be held
in the Collection Account, the Distribution Account, the Insurance Policies and
any REO Properties. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Pooling and Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing the Percentage Interest in the Class
R-I Certificates specified on the face hereof. The Certificates are designated
as the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2 and are issued in sixteen Classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will evidence
in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and Servicing
Agreement and reference is made to the Pooling and Servicing Agreement for
information with respect to the interests, rights, benefits, obligations,
proceeds, and duties evidenced hereby and the rights, duties and obligations of
the Trustee. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Pooling and Servicing Agreement, to which
Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which the
Certificateholder is bound. In the case of any conflict between terms specified
in this Certificate and terms specified in the Pooling and Servicing Agreement,
the terms of the Pooling and Servicing Agreement shall govern.
A-15-3
<PAGE>
The Holder of this Certificate shall be entitled to receive only certain
amounts set forth in the Pooling and Servicing Agreement, including a
distribution upon termination of the Pooling and Servicing Agreement and the
related REMIC created thereby of the amounts which remain on deposit in the
Distribution Account after payment to the Holders of all other Certificates of
all amounts set forth in the Pooling and Servicing Agreement. Distributions on
this Certificate will be made out of the Available Distribution Amount, to the
extent and subject to the limitations set forth in the Pooling and Servicing
Agreement, on the 15th day of each month or, if such 15th day is not a Business
Day, the next succeeding Business Day (a "Distribution Date") commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (the "Record
Date"). All sums distributable on this Certificate are payable in the coin or
currency of the United States of America as at the time of payment is legal
tender for the payment of public and private debts.
Unless the certificate of authentication hereon has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement or be valid
for any purpose.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses and
interest shortfalls on the Mortgage Loans allocated to any Class of Certificates
will be allocated pro rata among the outstanding Certificates of such Class.
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
in the Pooling and Servicing Agreement. As provided in the Pooling and Servicing
Agreement, withdrawals from the Collection Account shall be made from time to
time for purposes other than distributions to Certificateholders, such purposes
including reimbursement of certain expenses incurred with respect to the
servicing of the Mortgage Loans and administration of the Trust.
All distributions under the Pooling and Servicing Agreement to a nominee
of The Depository Trust Company ("DTC") will be made by or on behalf of the
Trustee by wire transfer in immediately available funds to an account specified
in the request of such Certificateholder. All distributions under the Pooling
and Servicing Agreement to Certificateholders will be made by wire transfer in
immediately available funds to the account specified by the Certificateholder,
at a bank or other entity having appropriate facilities therefor, if such
Certificateholder will have provided the Trustee with wiring instructions no
more than five business days after the related Record Date, or otherwise by
check mailed to such Certificateholder. Notwithstanding the above, the final
distribution on any Certificate will be made only upon presentation and
surrender of such Certificate at the location that will be specified in a notice
of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of the aggregate Certificate Principal Balance of the Certificates then
outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon the Certificate. The
Pooling and Servicing Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the Corporate Trust Office of the Trustee, duly endorsed by, or
accompanied by an assignment in the form below or other written instrument of
transfer in form satisfactory to the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon
A-15-4
<PAGE>
one or more new Certificates of the same Class in authorized denominations will
be issued to the designated transferee or transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class A-1
and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations of
$100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates registered
in the name of Cede & Co., as nominee of the DTC. No Certificate Owner will be
entitled to receive a Definitive Certificate representing such interest, except
under the limited circumstances described in the Pooling and Servicing
Agreement. The Residual Certificates will be issued in fully registered,
certificated form in minimum percentage interests of 10% and in multiples of 10%
in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Trustee, the Fiscal Agent, the
Master Servicer, the Special Servicer, the Certificate Registrar nor any such
agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby (other
than the obligation of the Trustee to make payments to the Certificateholders as
set forth in Section 10.2 of the Pooling and Servicing Agreement and other than
the obligations in the nature of information or tax reporting) shall terminate
on the earliest of (i) the later of (A) the final payment or other liquidation
of the last Mortgage Loan remaining in the Trust and (B) the disposition of all
REO Property or (ii) the sale of the property held by the Trust in accordance
with Section 10.1(b) of the Pooling and Servicing Agreement; provided that in no
event shall the Trust continue beyond the expiration of 21 years from the death
of the last survivor of the descendants of Joseph P. Kennedy, the late
Ambassador of the United States to the Court of St. James, living on the date
hereof. The parties designated in the Pooling and Servicing Agreement may
exercise their option to purchase the Mortgage Loans and any other property
remaining in the Trust and cause the termination of the Trust in accordance with
the requirements set forth in the Pooling and Servicing Agreement. Upon
termination of the Trust and payment of the Certificates and of all
administrative expenses associated with the Trust, any remaining assets of the
Trust shall be distributed to the holders of the Class R-I Certificates.
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-15-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:___________________________________
AUTHORIZED OFFICER
Dated:
A-15-6
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS R-I CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
BY:___________________________________
AUTHORIZED SIGNATORY
A-15-7
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT ......Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.................
common (State)
Additional abbreviations may also be used though not in the above list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------------------
- ------------------------------------------
-------------------------------------
- --------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- --------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- --------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the within-named
Trust, with full power of substitution in the premises.
Dated:
-------------------------- ---------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of this Certificate in every particular
without alteration or enlargement or any
change whatever.
- --------------------------------
SIGNATURE GUARANTEED
The signature must be guaranteed
by a commercial bank or trust
company or by a member firm of
the New York Stock Exchange or
another national securities
exchange. Notarized or witnessed
signatures are not acceptable.
A-15-8
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________ for the account of _____________________ account
number _____________________ or, if mailed by check, to _________________.
Statements should be mailed to ______________. This information is provided by
assignee named above, or ____________________________, as its agent.
A-15-9
<PAGE>
EXHIBIT A-16
[FORM OF CLASS R-II CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A)(1) TO A PERSON THAT THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE SECURITIES ACT AND (B)
IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS THE
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE"). THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A
NON-UNITED STATES PERSON.
THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED TO
"DISQUALIFIED ORGANIZATIONS" WITHIN THE MEANING OF THE CODE.
A SALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS R-II CERTIFICATE MAY BE MADE
ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE TRUSTEE TO
THE EFFECT THAT (1) SUCH TRANSFEREE AGREES TO BE BOUND BY THE TERMS OF THE
POOLING AND SERVICING AGREEMENT AND ALL RESTRICTIONS SET FORTH ON THE FACE
HEREOF, (2) SUCH TRANSFEREE IS NOT (A) THE UNITED STATES, ANY STATE OR POLITICAL
SUBDIVISION THEREOF OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING
(OTHER THAN AN INSTRUMENTALITY WHICH IS A CORPORATION IF ALL OF ITS ACTIVITIES
ARE SUBJECT TO TAX AND, EXCEPT FOR FHLMC, A MAJORITY ITS BOARD OF DIRECTORS IS
NOT SELECTED BY ANY SUCH GOVERNMENTAL UNIT), (B) AN ORGANIZATION (OTHER THAN
CERTAIN FARMERS' COOPERATIVES DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS
EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE (UNLESS SUCH ORGANIZATION
IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE ON UNRELATED BUSINESS
TAXABLE INCOME), (C) A RURAL ELECTRIC OR TELEPHONE COOPERATIVE DESCRIBED IN
SECTION 1381 OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES
(A), (B) OR (C) BEING HEREINAFTER REFERRED TO AS A "DISQUALIFIED ORGANIZATION"),
(D) A PERSON THAT IS NOT A CITIZEN OF OR RESIDENT OF THE UNITED STATES, A
CORPORATION, PARTNERSHIP OR OTHER ENTITY CREATED OR ORGANIZED IN, OR UNDER THE
LAWS OF, THE UNITED STATES OR ANY POLITICAL SUBDIVISION THEREOF, OR AN ESTATE
A-16-1
<PAGE>
WHOSE INCOME FROM SOURCES WITHOUT THE UNITED STATES IS INCLUDABLE IN GROSS
INCOME FOR UNITED STATES FEDERAL INCOME TAX PURPOSES REGARDLESS OF ITS
CONNECTION WITH THE CONDUCT OF TRADE OR BUSINESS IN THE UNITED STATES OR A TRUST
SUBJECT TO THE CONTROL OF A UNITED STATES FIDUCIARY AND THE PRIMARY SUPERVISION
OF A UNITED STATES COURT (ANY SUCH PERSON BEING HEREINAFTER REFERRED TO AS A
"UNITED STATES PERSON") OR (E) AN AGENT OF A DISQUALIFIED ORGANIZATION OR A
NONUNITED STATES PERSON, AND (3) NO PURPOSE OF SUCH TRANSFER IS TO ENABLE THE
TRANSFEROR TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX. NOTWITHSTANDING THE
REGISTRATION IN THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER
DISPOSITION OF THIS CLASS R-II CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR A
NONUNITED STATES PERSON OR AN AGENT OF A DISQUALIFIED ORGANIZATION OR A
NON-UNITED STATES PERSON, OR TO ANY OTHER PROHIBITED TRANSFEREE AS PROVIDED IN
THE POOLING AND SERVICING AGREEMENT, SUCH REGISTRATION SHALL BE DEEMED TO BE OF
NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A
CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE
RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF A CLASS R-II
CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED
TO THE PROVISIONS OF THIS PARAGRAPH.
A-16-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
PERCENTAGE INTEREST OF THIS CLASS R-II MASTER SERVICER: GMAC COMMERCIAL
CERTIFICATE: _____% MORTGAGE CORPORATION
DATE OF POOLING & SERVICING INITIAL SPECIAL SERVICER: GMAC
AGREEMENT: AS OF NOVEMBER 1, 1998 COMMERCIAL MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 TRUSTEE: LASALLE NATIONAL BANK
CLOSING DATE: NOVEMBER 12, 1998 FISCAL AGENT: ABN AMRO BANK N.V.
FIRST DISTRIBUTION DATE:
DECEMBER 15, 1998
NO. _________
CLASS R-II CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of a
pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class R-II Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of the
pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be held
in the Collection Account, the Distribution Account, the Insurance Policies and
any REO Properties. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Pooling and Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing the Percentage Interest in the Class
R-II Certificates specified on the face hereof. The Certificates are designated
as the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2 and are issued in sixteen Classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will evidence
in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and Servicing
Agreement and reference is made to the Pooling and Servicing Agreement for
information with respect to the interests, rights, benefits, obligations,
proceeds, and duties evidenced hereby and the rights, duties and obligations of
the Trustee. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Pooling and Servicing Agreement, to which
Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which the
Certificateholder is bound. In the case of any conflict between terms specified
in this Certificate and terms specified in the Pooling and Servicing Agreement,
the terms of the Pooling and Servicing Agreement shall govern.
A-16-3
<PAGE>
The Holder of this Certificate shall be entitled to receive only certain
amounts set forth in the Pooling and Servicing Agreement, including a
distribution upon termination of the Pooling and Servicing Agreement and the
related REMIC created thereby of the amounts which remain on deposit in the
Distribution Account after payment to the Holders of all other Certificates of
all amounts set forth in the Pooling and Servicing Agreement. Distributions on
this Certificate will be made out of the Available Distribution Amount, to the
extent and subject to the limitations set forth in the Pooling and Servicing
Agreement, on the 15th day of each month or, if such 15th day is not a Business
Day, the next succeeding Business Day (a "Distribution Date") commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (the "Record
Date"). All sums distributable on this Certificate are payable in the coin or
currency of the United States of America as at the time of payment is legal
tender for the payment of public and private debts.
Unless the certificate of authentication hereon has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement or be valid
for any purpose.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses and
interest shortfalls on the Mortgage Loans allocated to any Class of Certificates
will be allocated pro rata among the outstanding Certificates of such Class.
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
in the Pooling and Servicing Agreement. As provided in the Pooling and Servicing
Agreement, withdrawals from the Collection Account shall be made from time to
time for purposes other than distributions to Certificateholders, such purposes
including reimbursement of certain expenses incurred with respect to the
servicing of the Mortgage Loans and administration of the Trust.
All distributions under the Pooling and Servicing Agreement to a nominee
of The Depository Trust Company ("DTC") will be made by or on behalf of the
Trustee by wire transfer in immediately available funds to an account specified
in the request of such Certificateholder. All distributions under the Pooling
and Servicing Agreement to Certificateholders will be made by wire transfer in
immediately available funds to the account specified by the Certificateholder,
at a bank or other entity having appropriate facilities therefor, if such
Certificateholder will have provided the Trustee with wiring instructions no
more than five business days after the related Record Date, or otherwise by
check mailed to such Certificateholder. Notwithstanding the above, the final
distribution on any Certificate will be made only upon presentation and
surrender of such Certificate at the location that will be specified in a notice
of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of the aggregate Certificate Principal Balance of the Certificates then
outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon the Certificate. The
Pooling and Servicing Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the Corporate Trust Office of the Trustee, duly endorsed by, or
accompanied by an assignment in the form below or other written instrument of
transfer in form satisfactory to the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon
A-16-4
<PAGE>
one or more new Certificates of the same Class in authorized denominations will
be issued to the designated transferee or transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class A-1
and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations of
$100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates registered
in the name of Cede & Co., as nominee of the DTC. No Certificate Owner will be
entitled to receive a Definitive Certificate representing such interest, except
under the limited circumstances described in the Pooling and Servicing
Agreement. The Residual Certificates will be issued in fully registered,
certificated form in minimum percentage interests of 10% and in multiples of 10%
in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Trustee, the Fiscal Agent, the
Master Servicer, the Special Servicer, the Certificate Registrar nor any such
agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby (other
than the obligation of the Trustee to make payments to the Certificateholders as
set forth in Section 10.2 of the Pooling and Servicing Agreement and other than
the obligations in the nature of information or tax reporting) shall terminate
on the earliest of (i) the later of (A) the final payment or other liquidation
of the last Mortgage Loan remaining in the Trust and (B) the disposition of all
REO Property or (ii) the sale of the property held by the Trust in accordance
with Section 10.1(b) of the Pooling and Servicing Agreement; provided that in no
event shall the Trust continue beyond the expiration of 21 years from the death
of the last survivor of the descendants of Joseph P. Kennedy, the late
Ambassador of the United States to the Court of St. James, living on the date
hereof. The parties designated in the Pooling and Servicing Agreement may
exercise their option to purchase the Mortgage Loans and any other property
remaining in the Trust and cause the termination of the Trust in accordance with
the requirements set forth in the Pooling and Servicing Agreement. Upon
termination of the Trust and payment of the Certificates and of all
administrative expenses associated with the Trust, any remaining assets of the
Trust shall be distributed to the holders of the Class R-I Certificates.
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-16-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:___________________________________
AUTHORIZED OFFICER
Dated:
A-16-6
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS R-II CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
BY:___________________________________
AUTHORIZED SIGNATORY
A-16-7
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT ......Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.................
common (State)
Additional abbreviations may also be used though not in the above list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------------------
- ------------------------------------------
-------------------------------------
- --------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- --------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- --------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the within-named
Trust, with full power of substitution in the premises.
Dated:
-------------------------- ---------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of this Certificate in every particular
without alteration or enlargement or any
change whatever.
- --------------------------------
SIGNATURE GUARANTEED
The signature must be guaranteed
by a commercial bank or trust
company or by a member firm of
the New York Stock Exchange or
another national securities
exchange. Notarized or witnessed
signatures are not acceptable.
A-16-8
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________ for the account of _____________________ account
number _____________________ or, if mailed by check, to _________________.
Statements should be mailed to ______________. This information is provided by
assignee named above, or ____________________________, as its agent.
A-16-9
<PAGE>
EXHIBIT A-17
[FORM OF CLASS R-III CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A)(1) TO A PERSON THAT THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE SECURITIES ACT AND (B)
IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS THE
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE"). THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A
NON-UNITED STATES PERSON.
THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED TO
"DISQUALIFIED ORGANIZATIONS" WITHIN THE MEANING OF THE CODE.
A SALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS R-III CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE
TRUSTEE TO THE EFFECT THAT (1) SUCH TRANSFEREE AGREES TO BE BOUND BY THE TERMS
OF THE POOLING AND SERVICING AGREEMENT AND ALL RESTRICTIONS SET FORTH ON THE
FACE HEREOF, (2) SUCH TRANSFEREE IS NOT (A) THE UNITED STATES, ANY STATE OR
POLITICAL SUBDIVISION THEREOF OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE
FOREGOING (OTHER THAN AN INSTRUMENTALITY WHICH IS A CORPORATION IF ALL OF ITS
ACTIVITIES ARE SUBJECT TO TAX AND, EXCEPT FOR FHLMC, A MAJORITY ITS BOARD OF
DIRECTORS IS NOT SELECTED BY ANY SUCH GOVERNMENTAL UNIT), (B) AN ORGANIZATION
(OTHER THAN CERTAIN FARMERS' COOPERATIVES DESCRIBED IN SECTION 521 OF THE CODE)
WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE (UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE ON
UNRELATED BUSINESS TAXABLE INCOME), (C) A RURAL ELECTRIC OR TELEPHONE
COOPERATIVE DESCRIBED IN SECTION 1381 OF THE CODE (ANY SUCH PERSON DESCRIBED IN
THE FOREGOING CLAUSES (A), (B) OR (C) BEING HEREINAFTER REFERRED TO AS A
"DISQUALIFIED ORGANIZATION"), (D) A PERSON THAT IS NOT A CITIZEN OF OR RESIDENT
OF THE UNITED STATES, A CORPORATION, PARTNERSHIP OR OTHER ENTITY CREATED OR
ORGANIZED IN, OR UNDER THE LAWS OF,
A-17-1
<PAGE>
THE UNITED STATES OR ANY POLITICAL SUBDIVISION THEREOF, OR AN ESTATE WHOSE
INCOME FROM SOURCES WITHOUT THE UNITED STATES IS INCLUDABLE IN GROSS INCOME FOR
UNITED STATES FEDERAL INCOME TAX PURPOSES REGARDLESS OF ITS CONNECTION WITH THE
CONDUCT OF TRADE OR BUSINESS IN THE UNITED STATES OR A TRUST SUBJECT TO THE
CONTROL OF A UNITED STATES FIDUCIARY AND THE PRIMARY SUPERVISION OF A UNITED
STATES COURT (ANY SUCH PERSON BEING HEREINAFTER REFERRED TO AS A "UNITED STATES
PERSON") OR (E) AN AGENT OF A DISQUALIFIED ORGANIZATION OR A NONUNITED STATES
PERSON, AND (3) NO PURPOSE OF SUCH TRANSFER IS TO ENABLE THE TRANSFEROR TO
IMPEDE THE ASSESSMENT OR COLLECTION OF TAX. NOTWITHSTANDING THE REGISTRATION IN
THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS
CLASS R-III CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR A NONUNITED STATES
PERSON OR AN AGENT OF A DISQUALIFIED ORGANIZATION OR A NON-UNITED STATES PERSON,
OR TO ANY OTHER PROHIBITED TRANSFEREE AS PROVIDED IN THE POOLING AND SERVICING
AGREEMENT, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT
WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY
PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS
ON THIS CERTIFICATE. EACH HOLDER OF A CLASS R-III CERTIFICATE BY ACCEPTANCE OF
THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS
PARAGRAPH.
A-17-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
PERCENTAGE INTEREST OF THIS CLASS MASTER SERVICER: GMAC COMMERCIAL
R-III CERTIFICATE: _____% MORTGAGE CORPORATION
DATE OF POOLING & SERVICING INITIAL SPECIAL SERVICER: GMAC
AGREEMENT: AS OF NOVEMBER 1, 1998 COMMERCIAL MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 TRUSTEE: LASALLE NATIONAL BANK
CLOSING DATE: NOVEMBER 12, 1998 FISCAL AGENT: ABN AMRO BANK N.V.
FIRST DISTRIBUTION DATE:
DECEMBER 15, 1998
NO. _________
CLASS R-III CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of a
pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class R-III Certificates issued by the
Trust created pursuant to the Pooling and Servicing Agreement, dated as
specified above (the "Pooling and Servicing Agreement"), among Morgan Stanley
Capital I Inc. (hereinafter called the "Depositor", which term includes any
successor entity under the Pooling and Servicing Agreement), the Trustee, the
Master Servicer, the Special Servicer and the Fiscal Agent, a summary of certain
of the pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be held
in the Collection Account, the Distribution Account, the Insurance Policies and
any REO Properties. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Pooling and Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing the Percentage Interest in the Class
R-III Certificates specified on the face hereof. The Certificates are designated
as the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-HF2 and are issued in sixteen Classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will evidence
in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and Servicing
Agreement and reference is made to the Pooling and Servicing Agreement for
information with respect to the interests, rights, benefits, obligations,
proceeds, and duties evidenced hereby and the rights, duties and obligations of
the Trustee. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Pooling and Servicing Agreement, to which
Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which the
Certificateholder is bound. In the case of any conflict between terms specified
in this Certificate and terms specified in the Pooling and Servicing Agreement,
the terms of the Pooling and Servicing Agreement shall govern.
A-17-3
<PAGE>
The Holder of this Certificate shall be entitled to receive only certain
amounts set forth in the Pooling and Servicing Agreement, including a
distribution upon termination of the Pooling and Servicing Agreement and the
related REMIC created thereby of the amounts which remain on deposit in the
Distribution Account after payment to the Holders of all other Certificates of
all amounts set forth in the Pooling and Servicing Agreement. Distributions on
this Certificate will be made out of the Available Distribution Amount, to the
extent and subject to the limitations set forth in the Pooling and Servicing
Agreement, on the 15th day of each month or, if such 15th day is not a Business
Day, the next succeeding Business Day (a "Distribution Date") commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (the "Record
Date"). All sums distributable on this Certificate are payable in the coin or
currency of the United States of America as at the time of payment is legal
tender for the payment of public and private debts.
Unless the certificate of authentication hereon has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement or be valid
for any purpose.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses and
interest shortfalls on the Mortgage Loans allocated to any Class of Certificates
will be allocated pro rata among the outstanding Certificates of such Class.
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
in the Pooling and Servicing Agreement. As provided in the Pooling and Servicing
Agreement, withdrawals from the Collection Account shall be made from time to
time for purposes other than distributions to Certificateholders, such purposes
including reimbursement of certain expenses incurred with respect to the
servicing of the Mortgage Loans and administration of the Trust.
All distributions under the Pooling and Servicing Agreement to a nominee
of The Depository Trust Company ("DTC") will be made by or on behalf of the
Trustee by wire transfer in immediately available funds to an account specified
in the request of such Certificateholder. All distributions under the Pooling
and Servicing Agreement to Certificateholders will be made by wire transfer in
immediately available funds to the account specified by the Certificateholder,
at a bank or other entity having appropriate facilities therefor, if such
Certificateholder will have provided the Trustee with wiring instructions no
more than five business days after the related Record Date, or otherwise by
check mailed to such Certificateholder. Notwithstanding the above, the final
distribution on any Certificate will be made only upon presentation and
surrender of such Certificate at the location that will be specified in a notice
of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of the aggregate Certificate Principal Balance of the Certificates then
outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon the Certificate. The
Pooling and Servicing Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the Corporate Trust Office of the Trustee, duly endorsed by, or
accompanied by an assignment in the form below or other written instrument of
transfer in form satisfactory to the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon
A-17-4
<PAGE>
one or more new Certificates of the same Class in authorized denominations will
be issued to the designated transferee or transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class A-1
and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations of
$100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates registered
in the name of Cede & Co., as nominee of the DTC. No Certificate Owner will be
entitled to receive a Definitive Certificate representing such interest, except
under the limited circumstances described in the Pooling and Servicing
Agreement. The Residual Certificates will be issued in fully registered,
certificated form in minimum percentage interests of 10% and in multiples of 10%
in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Trustee, the Fiscal Agent, the
Master Servicer, the Special Servicer, the Certificate Registrar nor any such
agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby (other
than the obligation of the Trustee to make payments to the Certificateholders as
set forth in Section 10.2 of the Pooling and Servicing Agreement and other than
the obligations in the nature of information or tax reporting) shall terminate
on the earliest of (i) the later of (A) the final payment or other liquidation
of the last Mortgage Loan remaining in the Trust and (B) the disposition of all
REO Property or (ii) the sale of the property held by the Trust in accordance
with Section 10.1(b) of the Pooling and Servicing Agreement; provided that in no
event shall the Trust continue beyond the expiration of 21 years from the death
of the last survivor of the descendants of Joseph P. Kennedy, the late
Ambassador of the United States to the Court of St. James, living on the date
hereof. The parties designated in the Pooling and Servicing Agreement may
exercise their option to purchase the Mortgage Loans and any other property
remaining in the Trust and cause the termination of the Trust in accordance with
the requirements set forth in the Pooling and Servicing Agreement. Upon
termination of the Trust and payment of the Certificates and of all
administrative expenses associated with the Trust, any remaining assets of the
Trust shall be distributed to the holders of the Class R-I Certificates.
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-17-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:__________________________________
AUTHORIZED OFFICER
Dated:
A-17-6
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS R-III CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
BY:___________________________________
AUTHORIZED SIGNATORY
A-17-7
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT ......Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.................
common (State)
Additional abbreviations may also be used though not in the above list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------------------
- ------------------------------------------
-------------------------------------
- --------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- --------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- --------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the within-named
Trust, with full power of substitution in the premises.
Dated:
-------------------------- ---------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of this Certificate in every particular
without alteration or enlargement or any
change whatever.
- --------------------------------
SIGNATURE GUARANTEED
The signature must be guaranteed
by a commercial bank or trust
company or by a member firm of
the New York Stock Exchange or
another national securities
exchange. Notarized or witnessed
signatures are not acceptable.
A-17-8
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________ for the account of _____________________ account
number _____________________ or, if mailed by check, to _________________.
Statements should be mailed to ______________. This information is provided by
assignee named above, or ____________________________, as its agent.
A-17-9
<PAGE>
EXHIBIT A-18
[FORM OF CLASS X CERTIFICATE]
THIS CERTIFICATE DOES NOT CONSTITUTE AN OBLIGATION OF OR AN INTEREST IN THE
DEPOSITOR, EITHER UNDERWRITER, THE TRUSTEE, THE FISCAL AGENT, THE MASTER
SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES, AND WILL
NOT BE INSURED OR GUARANTEED BY ANY SUCH ENTITY OR BY ANY GOVERNMENTAL AGENCY.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A)(1) TO A PERSON THAT THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE SECURITIES ACT AND (B)
IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION.
NOTWITHSTANDING THE ABOVE, IF THE TRANSFEREE OF THIS CERTIFICATE IS AN EMPLOYEE
BENEFIT PLAN SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR ANY PERSON ACTING ON BEHALF OF ANY
SUCH PLAN OR USING THE ASSETS OF SUCH PLAN TO ACQUIRE OR HOLD THIS CERTIFICATE,
SUCH PLAN OR SUCH PERSON MUST BE AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF
RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT").
THE PORTION OF THE CERTIFICATE NOTIONAL AMOUNT OF THE CERTIFICATES EVIDENCED BY
THIS CERTIFICATE WILL BE DECREASED BY THE PORTION OF PRINCIPAL PAYMENTS,
REALIZED LOSSES AND CERTAIN EXPENSE LOSSES ON THE MORTGAGE LOANS ALLOCABLE TO
THE CERTIFICATE NOTIONAL AMOUNT OF THIS CLASS X CERTIFICATE. ACCORDINGLY, THE
CERTIFICATE NOTIONAL AMOUNT OF THIS CERTIFICATE MAY BE LESS THAN THAT SET FORTH
BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT CERTIFICATE
NOTIONAL AMOUNT BY INQUIRY OF THE TRUSTEE.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS AN INVESTMENT
UNIT COMPRISED OF TWELVE COMPONENT INTERESTS, EACH OF WHICH IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
A-18-1
<PAGE>
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
A-18-2
<PAGE>
MORGAN STANLEY CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-HF2
INITIAL PASS-THROUGH RATE: 1.22% INITIAL CERTIFICATE NOTIONAL AMOUNT
OF THIS CLASS X CERTIFICATE:
$1,283,705,560
DATE OF POOLING & SERVICING MASTER SERVICER: GMAC COMMERCIAL
AGREEMENT: AS OF NOVEMBER 1, 1998 MORTGAGE CORPORATION
CUT-OFF DATE: NOVEMBER 1, 1998 INITIAL SPECIAL SERVICER: GMAC
COMMERCIAL MORTGAGE CORPORATION
CLOSING DATE: NOVEMBER 12, 1998 TRUSTEE: LASALLE NATIONAL BANK
FIRST DISTRIBUTION DATE: FISCAL AGENT: ABN AMRO BANK N.V.
DECEMBER 15, 1998
AGGREGATE CERTIFICATE NOTIONAL AMOUNT CUSIP NO.
OF THE CLASS X CERTIFICATES AS OF THE
CLOSING DATE: $1,283,705,560 NO. 1
CLASS X CERTIFICATE
evidencing a beneficial ownership interest in a Trust, consisting primarily of a
pool of commercial and multifamily mortgage loans (the "Mortgage Loans") and
certain other property, formed and sold by
MORGAN STANLEY CAPITAL I INC.
THIS CERTIFIES THAT _________________ is the registered owner of the interest
evidenced by this Certificate in the Class X Certificates issued by the Trust
created pursuant to the Pooling and Servicing Agreement, dated as specified
above (the "Pooling and Servicing Agreement"), among Morgan Stanley Capital I
Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Pooling and Servicing Agreement), the Trustee, the Master
Servicer, the Special Servicer and the Fiscal Agent, a summary of certain of the
pertinent provisions of which is set forth hereafter. The Trust consists
primarily of the Mortgage Loans, such amounts as shall from time to time be held
in the Collection Account, the Distribution Account, the Insurance Policies and
any REO Properties. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Pooling and Servicing Agreement.
The Certificate is one of a duly authorized issue of Certificates
designated as Certificates of the series specified on the face hereof (herein
called the "Certificates") and representing an interest in the Class of
Certificates specified on the face hereof equal to the quotient expressed as a
percentage obtained by dividing the Certificate Notional Amount of this
Certificate specified on the face hereof by the initial aggregate Certificate
Notional Amount of the Class X Certificates. The Certificates are designated as
the Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1996-HF2 and are issued in sixteen Classes as specifically
set forth in the Pooling and Servicing Agreement. The Certificates will evidence
in the aggregate 100% of the beneficial ownership of the Trust.
This Certificate does not purport to summarize the Pooling and Servicing
Agreement and reference is made to the Pooling and Servicing Agreement for
information with respect to the interests, rights, benefits,
A-18-3
<PAGE>
obligations, proceeds, and duties evidenced hereby and the rights, duties and
obligations of the Trustee. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the
Certificateholder by virtue of the acceptance hereof assents and by which the
Certificateholder is bound. In the case of any conflict between terms specified
in this Certificate and terms specified in the Pooling and Servicing Agreement,
the terms of the Pooling and Servicing Agreement shall govern.
Distributions of interest on this Certificate will be made out of the
Available Distribution Amount, to the extent and subject to the limitations set
forth in the Pooling and Servicing Agreement, on the 15th day of each month or,
if such 15th day is not a Business Day, the next succeeding Business Day (a
"Distribution Date") commencing on the first Distribution Date specified above,
to the Person in whose name this Certificate is registered at the close of
business on the last Business Day of the month immediately preceding the month
of such distribution (the "Record Date"). All sums distributable on this
Certificate are payable in the coin or currency of the United States of America
as at the time of payment is legal tender for the payment of public and private
debts.
Interest on this Certificate will accrue (computed as if each year
consisted of 360 days and each month consisted of 30 days) during the Interest
Accrual Period relating to such Distribution Date at a Pass-Through Rate
calculated as specified in the Pooling and Servicing Agreement on the
Certificate Notional Amount of this Certificate immediately prior to each
Distribution Date. Interest allocated to this Certificate on any Distribution
Date will be in an amount due to this Certificate's pro rata share of the amount
to be distributed on the Certificates of this Class as of such Distribution
Date, with a final distribution to be made upon retirement of this Certificate
as set forth in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement or be valid
for any purpose.
Realized Losses and interest shortfalls on the Mortgage Loans shall be
allocated on the applicable Distribution Date to Certificateholders in the
manner set forth in the Pooling and Servicing Agreement. All Realized Losses and
interest shortfalls on the Mortgage Loans allocated to any Class of Certificates
will be allocated pro rata among the outstanding Certificates of such Class.
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
in the Pooling and Servicing Agreement. As provided in the Pooling and Servicing
Agreement, withdrawals from the Collection Account shall be made from time to
time for purposes other than distributions to Certificateholders, such purposes
including reimbursement of certain expenses incurred with respect to the
servicing of the Mortgage Loans and administration of the Trust.
All distributions under the Pooling and Servicing Agreement to a nominee
of The Depository Trust Company ("DTC") will be made by or on behalf of the
Trustee by wire transfer in immediately available funds to an account specified
in the request of such Certificateholder. All distributions under the Pooling
and Servicing Agreement to Certificateholders will be made by wire transfer in
immediately available funds to the account specified by the Certificateholder,
at a bank or other entity having appropriate facilities therefor, if such
Certificateholder will have provided the Trustee with wiring instructions no
more than five business days after the related Record Date, or otherwise by
check mailed to such Certificateholder. Notwithstanding the above, the final
distribution on any Certificate will be made only upon presentation and
surrender of such Certificate at the location that will be specified in a notice
of the pendency of such final distribution.
The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Certificateholders under the Pooling and Servicing Agreement
at any time by the parties thereto with the consent of the Holders of not less
than 51% of
A-18-4
<PAGE>
the aggregate Certificate Principal Balance of the Certificates then
outstanding, as specified in the Pooling and Servicing Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon the Certificate. The
Pooling and Servicing Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the Corporate Trust Office of the Trustee, duly endorsed by, or
accompanied by an assignment in the form below or other written instrument of
transfer in form satisfactory to the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations will be issued to the designated transferee or transferees.
Subject to the terms of the Pooling and Servicing Agreement, the Class A-1
and A-2 Certificates will initially be issued in denominations of $25,000
initial Certificate Principal Balance and in any whole dollar denomination in
excess thereof. The Class B Certificates will initially be issued in
denominations of $50,000 initial Certificate Principal Balance or Certificate
Notional Amount, as applicable and in any whole dollar denomination in excess
thereof. The remaining Certificates will initially be issued in denominations of
$100,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. Each Class of Certificates other than the
Residual Certificates will be represented by one or more Certificates registered
in the name of Cede & Co., as nominee of the DTC. No Certificate Owner will be
entitled to receive a Definitive Certificate representing such interest, except
under the limited circumstances described in the Pooling and Servicing
Agreement. The Residual Certificates will be issued in fully registered,
certificated form in minimum percentage interests of 10% and in multiples of 10%
in excess thereof.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
The Depositor, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer and the Certificate Registrar and any of their agents may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Trustee, the Fiscal Agent, the
Master Servicer, the Special Servicer, the Certificate Registrar nor any such
agents shall be affected by notice to the contrary.
The obligations and responsibilities of the Trustee created hereby (other
than the obligation of the Trustee to make payments to the Certificateholders as
set forth in Section 10.2 of the Pooling and Servicing Agreement and other than
the obligations in the nature of information or tax reporting) shall terminate
on the earliest of (i) the later of (A) the final payment or other liquidation
of the last Mortgage Loan remaining in the Trust and (B) the disposition of all
REO Property or (ii) the sale of the property held by the Trust in accordance
with Section 10.1(b) of the Pooling and Servicing Agreement; provided that in no
event shall the Trust continue beyond the expiration of 21 years from the death
of the last survivor of the descendants of Joseph P. Kennedy, the late
Ambassador of the United States to the Court of St. James, living on the date
hereof. The parties designated in the Pooling and Servicing Agreement may
exercise their option to purchase the Mortgage Loans and any other property
remaining in the Trust and cause the termination of the Trust in accordance with
the requirements set forth in the Pooling and Servicing Agreement. Upon
termination of the Trust and payment of the Certificates and of all
administrative expenses associated with the Trust, any remaining assets of the
Trust shall be distributed to the holders of the Class R-I Certificates.
A-18-5
<PAGE>
The Trustee has executed this Certificate on behalf of the Trust as
Trustee under the Pooling and Servicing Agreement.
THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
A-18-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under this official seal.
LASALLE NATIONAL BANK,
as Trustee
By:___________________________________
AUTHORIZED OFFICER
Dated:
A-18-7
<PAGE>
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS X CERTIFICATES REFERRED TO IN THE
WITHIN-MENTIONED POOLING AND SERVICING AGREEMENT.
LASALLE NATIONAL BANK,
as Authenticating Agent
BY:___________________________________
AUTHORIZED SIGNATORY
A-18-8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenant in common UNIF GIFT MIN ACT ......Custodian
TEN ENT - as tenants by the (Cust)
entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with
rights of survivorship
and not as tenants in Act.................
common (State)
Additional abbreviations may also be used though not in the above list.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------------------
- ------------------------------------------
-------------------------------------
- --------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- --------------------------------------------------------------------------------
the within Certificate and does hereby or irrevocably constitute and appoint
- --------------------------------------------------------------------------------
to transfer the said Certificate in the Certificate Register of the within-named
Trust, with full power of substitution in the premises.
Dated:
-------------------------- ---------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of this Certificate in every particular
without alteration or enlargement or any
change whatever.
- --------------------------------
SIGNATURE GUARANTEED
The signature must be guaranteed
by a commercial bank or trust
company or by a member firm of
the New York Stock Exchange or
another national securities
exchange. Notarized or witnessed
signatures are not acceptable.
A-18-9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________ for the account of _____________________ account
number _____________________ or, if mailed by check, to _________________.
Statements should be mailed to ______________. This information is provided by
assignee named above, or ____________________________, as its agent.
A-18-10
<PAGE>
EXHIBIT B-1
FORM OF INITIAL CERTIFICATION OF TRUSTEE
November __, 1998
Morgan Stanley Capital I Inc.
1585 Broadway, 37th Floor
New York, New York 10036
Re: Pooling and Servicing Agreement ("Pooling and Servicing
Agreement") relating to Morgan Stanley Capital I Inc.,
Commercial Mortgage Pass- Through Certificates, Series
1998-HF2
Ladies and Gentlemen:
In accordance with the provisions of Section 2.2 of the Pooling and
Servicing Agreement, the undersigned hereby certifies that, with respect to each
Mortgage Loan listed in the Mortgage Loan Schedule and subject to the exceptions
noted in the schedule of exceptions attached hereto, that: (a) all documents
specified in clause (i) of the definition of "Mortgage File" are in its
possession, (b) such documents have been reviewed by it and have not been
materially mutilated, damaged, defaced, torn or otherwise physically altered,
and such documents relate to such Mortgage Loan, (c) based on its examination
and only as to the foregoing documents, the loan number and the name of the
Mortgagor set forth in the Mortgage Loan Schedule respecting such Mortgage Loan
accurately reflects the information contained in such documents, and (d) each
Mortgage Note has been endorsed as provided in clause (i) of the definition of
"Mortgage File". The Trustee makes no representations as to: (i) the validity,
legality, sufficiency, enforceability or genuineness of any such documents
contained in each Mortgage File or any of the Mortgage Loans identified in the
Mortgage Loan Schedule, or (ii) the collectibility, insurability, effectiveness
or suitability of any such Mortgage Loan.
The Trustee acknowledges receipt of notice that the Depositor has
granted to the Trustee for the benefit of the Certificateholders a security
interest in all of the Depositor's right, title and interest in and to the
Mortgage Loans.
Capitalized words and phrases used herein and not otherwise defined
herein shall have the respective meanings assigned to them in the Pooling and
Servicing Agreement. This Certificate is subject in all respects to the terms of
said Pooling and Servicing Agreement.
LASALLE NATIONAL BANK, as Trustee
By:___________________________________
Name:
Title:
B-1-1
<PAGE>
EXHIBIT B-2
FORM OF FINAL CERTIFICATION OF TRUSTEE
November __, 1998
Morgan Stanley Capital I Inc.
1585 Broadway, 37th Floor
New York, New York 10036
Re: Pooling and Servicing Agreement ("Pooling and Servicing
Agreement") relating to Morgan Stanley Capital I Inc.,
Commercial Mortgage Pass-Through Certificates, Series 1998-HF2
Ladies and Gentlemen:
In accordance with the provisions of Section 2.2 of the Pooling and
Servicing Agreement, the undersigned hereby certifies that, with respect to each
Mortgage Loan listed in the Mortgage Loan Schedule and subject to the exceptions
noted in the schedule of exceptions attached hereto, that: (a) all documents
required to be included in the Mortgage File pursuant to clauses (i), (ii),
(iii), (ix), (xii) (to the extent it relates to the foregoing) and (xiii) (if a
leasehold interest of the borrower in the related Mortgaged Property is evident
from the related Mortgage or title policy) of the definition of "Mortgage File"
are in its possession, (b) such documents have been reviewed by it and have not
been materially mutilated, damaged, defaced, torn or otherwise physically
altered, and such documents relate to such Mortgage Loan, (c) based on its
examination and only as to the foregoing documents, the loan number, the street
address of the Mortgaged Property and the name of the Mortgagor set forth in the
Mortgage Loan Schedule respecting such Mortgage Loan accurately reflects the
information contained in the documents in the Mortgage File, and (d) each
Mortgage Note has been endorsed and each Mortgage has been assigned as provided
in clauses (i) and (iii) of the definition of "Mortgage File". The Trustee makes
no representations as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any of the documents contained in each Mortgage
File or any of the Trustee Mortgage Loans identified in the Mortgage Loan
Schedule, or (ii) the collectibility, insurability, effectiveness or suitability
of any such Mortgage Loan.
The Trustee acknowledges receipt of notice that the Depositor has
granted to the Trustee for the benefit of the Certificateholders a security
interest in all of the Depositor's right, title and interest in and to the
Mortgage Loans.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement. This
Certificate is qualified in all respects by the terms of said Pooling and
Servicing Agreement including but not limited to Section 2.2.
LASALLE NATIONAL BANK, as Trustee
By:___________________________________
Name:
Title:
B-2-1
<PAGE>
EXHIBIT C
FORM OF REQUEST FOR RELEASE
To: LaSalle National Bank, Trustee
135 South LaSalle Street
Suite 1625
Chicago, Illinois 60674-4107
Attn: Asset-Backed Securities Trust Services Group - Morgan Stanley Series
1998-HF2
Re: Morgan Stanley Capital I Inc., Commercial Morgan Pass-Through
Certificates, Series 1998-HF2
Date: November __, 1998
In connection with the administration of the Mortgage Loans held by you as
Trustee under the Pooling and Servicing Agreement dated as of November 1, 1998,
by and among Morgan Stanley Capital I Inc., as Depositor, GMAC Commercial
Mortgage Corporation, as Master Servicer and Special Servicer, LaSalle National
Bank, as Trustee, and ABN AMRO Bank N.V., as Fiscal Agent (the "Pooling and
Servicing Agreement"), the undersigned hereby requests a release of the Mortgage
File held by you as Trustee with respect to the following described Mortgage
Loan for the reason indicated below.
Mortgagor's Name:
Address:
Loan No.:
Reason for requesting file:
____1. Mortgage Loan paid in full.
(The [Master] [Special] Servicer hereby certifies that all amounts
received in connection with the Mortgage Loan have been or will be,
following the [Master] [Special] Servicer's release of the Trustee
Mortgage File, credited to the Collection Account or the Distribution
Account pursuant to the Pooling and Servicing Agreement.)
____2. Mortgage Loan repurchased.
(The [Master] [Special] Servicer hereby certifies that the Purchase Price
has been credited to the Distribution Account pursuant to the Pooling and
Servicing Agreement.)
____3. Mortgage Loan substituted.
(The [Master] [Special] Servicer hereby certifies that a Qualifying
Substitute Mortgage Loan has been assigned and delivered to you along with
the related Mortgage File pursuant to the Pooling and Servicing
Agreement.)
____4. The Mortgage Loan is being foreclosed.
____5. Other. (Describe)
C-1
<PAGE>
The undersigned acknowledges that the above Mortgage File will be held by
the undersigned in accordance with the provisions of the Pooling and Servicing
Agreement and will be returned to you, except if the Mortgage Loan has been paid
in full, repurchased or substituted for by a Qualifying Substitute Mortgage Loan
(in which case the Mortgage File will be retained by us permanently), when no
longer required by us for such purpose).
Capitalized terms used herein shall have the meanings ascribed to them in
the Pooling and Servicing Agreement.
[Name of [Master] [Special] Servicer]
By:__________________________________
Name:
Title:
C-2
<PAGE>
EXHIBIT D-1
TRANSFERS OF DEFINITIVE PRIVATELY OFFERED CERTIFICATES
[Date]
LaSalle National Bank
135 LaSalle Street
Suite 1625
Chicago, IL 60674-4170
Attention: Asset-Backed Securities Trust Services
Re: Morgan Stanley Capital I Inc., Commercial Mortgage
Pass-Through Certificates, Series 1998-HF2, (the
"Certificates")
Dear Sirs:
This letter is delivered to you in connection with the transfer by
_______________ (the "Transferor") to ________________ (the "Transferee") of a
Certificate (the "Transferred Certificate") having an initial Principal Balance
or Notional Amount as of November 12, 1998 (the "Closing Date") of $__________.
The Certificates were issued pursuant to the Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement"), to be dated as of November 1, 1998,
among Morgan Stanley Capital I Inc. as depositor (the "Depositor"), GMAC
Commercial Mortgage Corporation, as master servicer and as special servicer,
LaSalle National Bank, as trustee and ABN AMRO Bank N.V., as fiscal agent. All
terms used herein and not otherwise defined shall have the meanings set forth in
the Pooling and Servicing Agreement. The Transferor hereby certifies, represents
and warrants to you, as Certificate Registrar, that:
1. The Transferor is the lawful owner of the Transferred Certificate
with the full right to transfer such Certificate free from any and all
claims and encumbrances whatsoever.
2. Neither the Transferor nor anyone acting on its behalf has (a)
offered, transferred, pledged, sold or otherwise disposed of any
Certificate, any interest in any Certificate or any other similar security
to any person in any manner, (b) solicited any offer to buy or accept a
transfer, pledge or other disposition of any Certificate, any interest in
any Certificate or any other similar security from any person in any
manner, (c) otherwise approached or negotiated with respect to any
Certificate, any interest in any Certificate or any other similar security
with any person in any manner, (d) made any general solicitation by means
of general advertising or in any other manner, or (e) taken any other
action, which (in the case of any of the acts described in clauses (a)
through (e) hereof) would constitute a distribution of any Certificate
under the Securities Act of 1933, as amended (the "Securities Act"), or
would render the disposition of any Certificate a violation of Section 5
of the Securities Act or any state securities laws, or would require
registration or qualification of any Certificate pursuant to the
Securities Act or any state securities laws.
Very truly yours,
(Transferor)
By:________________________________________
Name:______________________________________
Title:_____________________________________
D1-1
<PAGE>
EXHIBIT D-2A
FORM I OF TRANSFEREE CERTIFICATE
FOR TRANSFERS OF DEFINITIVE
PRIVATELY OFFERED CERTIFICATES
[Date]
LaSalle National Bank
135 LaSalle Street
Suite 1625
Chicago, IL 60674-4170
Attention: Asset-Backed Securities Trust Services
Re: Morgan Stanley Capital I Inc., Commercial Mortgage
Pass-Through Certificates, Series 1998-HF2 (the
"Certificates")
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
_________________ (the "Transferor") to __________________ (the "Transferee") of
Class __________ Certificates having an initial Principal Balance or Notional
Amount as of November 12, 1998 (the "Closing Date") of $____________ (the
"Transferred Certificates"). The Certificates, including the Transferred
Certificates, were issued pursuant to the Pooling and Servicing Agreement, to be
dated as of November 1, 1998 (the "Pooling and Servicing Agreement"), among
Morgan Stanley Capital I Inc., as depositor (the "Depositor"), GMAC Commercial
Mortgage Corporation, as master servicer and as special servicer, LaSalle
National Bank, as trustee and ABN AMRO Bank N.V., as fiscal agent. All
capitalized terms used but not otherwise defined herein shall have the
respective meanings set forth in the Pooling and Servicing Agreement. The
Transferee hereby certifies, represents and warrants to you, as Certificate
Registrar, that:
1. The Transferee is a "qualified institutional buyer" (a "Qualified
Institutional Buyer") as that term is defined in Rule 144A ("Rule 144A")
under the Securities Act of 1933, as amended (the "Securities Act") and
has completed one of the forms of certification to that effect attached
hereto as Annex 1 and Annex 2. The Transferee is aware that the sale to it
of the Transferred Certificates is being made in reliance on Rule 144A.
The Transferee is acquiring the Transferred Certificates for its own
account or for the account of a Qualified Institutional Buyer, and
understands that such Transferred Certificates may be resold, pledged or
transferred only (i) to a person reasonably believed to be a Qualified
Institutional Buyer that purchases for its own account or for the account
of a Qualified Institutional Buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, or (ii)
pursuant to another exemption from registration under the Securities Act.
D2-1
<PAGE>
2. The Transferee has been furnished with all information regarding
(a) the Transferred Certificates and distributions thereon, (b) the
nature, performance and servicing of the Mortgage Loans, (c) the Pooling
and Servicing Agreement, and (d) any credit enhancement mechanism
associated with the Transferred Certificates, that it has requested.
Very truly yours,
(Transferor)
By:_________________________________________
Name:_______________________________________
Title:______________________________________
D2-2
<PAGE>
ANNEX 1 TO EXHIBIT D-2A
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[for Transferees other than Registered Investment Companies]
The undersigned hereby certifies as follows to [name of Transferor] (the
"Transferor") and [name of Certificate Registrar], as Certificate Registrar,
with respect to the mortgage pass-through certificates being transferred (the
"Transferred Certificates") as described in the Transferee Certificate to which
this certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the chief financial
officer, a person fulfilling an equivalent function, or other executive
officer of the entity purchasing the Transferred Certificates (the
"Transferee").
2. The Transferee is a "qualified institutional buyer" as that term
is defined in Rule 144A under the Securities Act of 1933, as amended
("Rule 144A") because (i) the Transferee owned and/or invested on a
discretionary basis $____________________(1) in securities (other than the
excluded securities referred to below) as of the end of the Transferee's
most recent fiscal year (such amount being calculated in accordance with
Rule 144A) and (ii) the Transferee satisfies the criteria in the category
marked below.
____ Corporation, etc. The Transferee is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts or similar
business trust, partnership, or any organization described in Section 501(c)(3)
of the Internal Revenue Code of 1986.
____ Bank. The Transferee (a) is a national bank or a banking institution
organized under the laws of any State, U.S. territory or the District of
Columbia, the business of which is substantially confined to banking and is
supervised by the State or territorial banking commission or similar official or
is a foreign bank or equivalent institution, and (b) has an audited net worth of
at least $25,000,000 as demonstrated in its latest annual financial statements,
a copy of which is attached hereto, as of a date not more than 16 months
preceding the date of sale of the Certificate in the case of a U.S. bank, and
not more than 18 months preceding such date of sale for a foreign bank or
equivalent institution.
____ Savings and Loan. The Transferee (a) is a savings and loan
association, building and loan association, cooperative bank, homestead
association or similar institution, which is supervised and examined by a State
or Federal authority having supervision over any such institutions or is a
foreign savings and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in its latest annual
financial statements, a copy of which is attached hereto, as of a date not more
than 16 months preceding the date of sale of the Certificate in the case of a
U.S. savings and loan association, and not more than 18 months preceding such
date of sale for a foreign savings and loan association or equivalent
institution.
____ Broker-dealer. The Transferee is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934, as amended.
____ Insurance Company. The Transferee is an insurance company whose
primary and predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and
- ----------
(1) Transferee must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Transferee is a dealer, and, in that
case, Transferee must own and/or invest on a discretionary basis at least
$10,000,000 in securities.
D2-3
<PAGE>
which is subject to supervision by the insurance commissioner or a similar
official or agency of a State, U.S. territory or the District of Columbia.
____ State or Local Plan. The Transferee is a plan established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the benefit of
its employees.
____ ERISA Plan. The Transferee is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of 1974.
____ Investment Adviser. The Transferee is an investment adviser
registered under the Investment Advisers Act of 1940, as amended.
____ Other. (Please supply a brief description of the entity and a
cross-reference to the paragraph and subparagraph under subsection (a)(1) of
Rule 144A pursuant to which it qualifies. Note that registered investment
companies should complete Annex 2 rather than this Annex 1.)
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee, (ii)
securities that are part of an unsold allotment to or subscription by the
Transferee, if the Transferee is a dealer, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase
agreements, (vi) securities owned but subject to a repurchase agreement
and (vii) currency, interest rate and commodity swaps. For purposes of
determining the aggregate amount of securities owned and/or invested on a
discretionary basis by the Transferee, the Transferee did not include any
of the securities referred to in this paragraph.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Transferee, the
Transferee used the cost of such securities to the Transferee, unless the
Transferee reports its securities holdings in its financial statements on
the basis of their market value, and no current information with respect
to the cost of those securities has been published, in which case the
securities were valued at market. Further, in determining such aggregate
amount, the Transferee may have included securities owned by subsidiaries
of the Transferee, but only if such subsidiaries are consolidated with the
Transferee in its financial statements prepared in accordance with
generally accepted accounting principles and if the investments of such
subsidiaries are managed under the Transferee's direction. However, such
securities were not included if the Transferee is a majority-owned,
consolidated subsidiary of another enterprise and the Transferee is not
itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Transferee acknowledges that it is familiar with Rule 144A
and understands that the Transferor and other parties related to the
Transferred Certificates are relying and will continue to rely on the
statements made herein because one or more sales to the Transferee may be
in reliance on Rule 144A.
____ ____ Will the Transferee be purchasing the Transferred 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
D2-4
<PAGE>
addition, if the Transferee is a bank or savings and loan as provided above, the
Transferee agrees that it will furnish to such parties any updated annual
financial statements that become available on or before the date of such
purchase promptly after they become available.
____________________________________________
Print Name of Transferee
By:_________________________________________
Name_____________________________________
Title:___________________________________
Date:____________________________________
D2-5
<PAGE>
ANNEX 2 TO EXHIBIT D-2A
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[for Transferees that are Registered Investment Companies]
The undersigned hereby certifies as follows to [name of Transferor] (the
"Transferor") and [name of Certificate Registrar], as Certificate Registrar,
with respect to the mortgage pass-through certificate being transferred (the
"Transferred Certificates") as described in the Transferee Certificate to which
this certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the chief financial
officer, a person fulfilling an equivalent function, or other executive
officer of the entity purchasing the Transferred Certificates (the
"Transferee") or, if the Transferee is a "qualified institutional buyer"
as that term is defined in Rule 144A under the Securities Act of 1933, as
amended ("Rule 144A") because the Transferee is part of a Family of
Investment Companies (as defined below), is an executive officer of the
investment adviser (the "Adviser").
2. The Transferee is a "qualified institutional buyer" as defined in
Rule 144A because (i) the Transferee is an investment company registered
under the Investment Company Act of 1940, as amended, and (ii) as marked
below, the Transferee alone owned and/or invested on a discretionary
basis, or the Transferee's Family of Investment Companies owned, at least
$100,000,000 in securities (other than the excluded securities referred to
below) as of the end of the Transferee's most recent fiscal year. For
purposes of determining the amount of securities owned by the Transferee
or the Transferee's Family of Investment Companies, the cost of such
securities was used, unless the Transferee of any member of the
Transferee's Family of Investment Companies, as the case may be, reports
its securities holdings in its financial statements on the basis of their
market value, and no current information with respect to the cost of those
securities has been published, in which case the securities of such entity
were valued at market.
The Transferee owned and/or invested on a discretionary basis $__________
in securities (other than the excluded securities referred to below) as of the
end of the Transferee's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
The Transferee is part of a Family of Investment Companies which owned in
the aggregate $____________ in securities (other than the excluded securities
referred to below) as of the end of the Transferee's most recent fiscal year
(such amount being calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because
one investment adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part
of the Transferee's Family of Investment Companies, (ii) bank deposit
notes and certificates of deposit, (iii) loan participations, (iv)
repurchase agreements, (v) securities owned but subject to a repurchase
agreement and (vi) currency, interest rate and commodity swaps. For
purposes of determining the aggregate amount of securities owned and/or
invested on a discretionary basis by the Transferee, or owned by the
Transferee's Family of Investment Companies, the securities referred to in
this paragraph were excluded.
D2-6
<PAGE>
5. The Transferee is familiar with Rule 144A and understands that
the parties to which this certification is being made are relying and will
continue to rely on the statements made herein because one or more sales
to the Transferee will be in reliance on Rule 144A.
____ ____ Will the Transferee be purchasing the Transferred 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 undersigned will notify the parties to which this
certification is made of any changes in the information and conclusions
herein. Until such notice by the undersigned, the Transferee's purchase of
the Transferred Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
____________________________________________
Print Name of Transferee or Adviser
By:_________________________________________
Name_____________________________________
Title:___________________________________
Date:____________________________________
IF AN ADVISER:
____________________________________________
Print Name of Transferee
Date:_______________________________________
D2-7
<PAGE>
FORM II OF TRANSFEREE CERTIFICATE
FOR TRANSFERS OF DEFINITIVE
PRIVATELY OFFERED CERTIFICATES
[Date]
LaSalle National Bank
135 LaSalle Street
Suite 1625
Chicago, IL 60674-4170
Attention: Asset-Backed Securities Trust Services
Re: Morgan Stanley Capital I Inc., Commercial Mortgage
Pass-Through Certificates, Series 1998-HF2 (the
"Certificates")
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
__________________ (the "Transferor") to _____________________ (the
"Transferee") of Class ____ Certificates having an initial Principal Balance or
Notional Amount as of November 12, 1998 (the "Closing Date") of $___________
(the "Transferred Certificates"). The Certificates, including the Transferred
Certificates, were issued pursuant to the Pooling and Servicing Agreement, to be
dated as of November 1, 1998 (the "Pooling and Servicing Agreement") among
Morgan Stanley Capital I Inc., as depositor (the "Depositor"), GMAC Commercial
Mortgage Corporation, as master servicer and as special servicer, LaSalle
National Bank, as trustee and ABN AMRO Bank N.V., as fiscal agent. All
capitalized terms used but not otherwise defined herein shall have the
respective meanings set forth in the Pooling and Servicing Agreement. The
Transferee hereby certifies, represents and warrants to you, as Certificate
Registrar, that:
1. The Transferee is acquiring the Transferred Certificates for its
own account for investment and not with a view to or for sale or transfer
in connection with any distribution thereof, in whole or in part, in any
manner which would violate the Securities Act of 1933, as amended (the
"Securities Act"), or any applicable state securities laws.
2. The Transferee understands that (a) the Class of Certificates to
which the Transferred Certificates belong has not been and will not be
registered under the Securities Act or registered or qualified under any
applicable state securities laws, (b) none of the Depositor, the Trustee
or the Certificate Registrar is obligated to so register or qualify the
Class of Certificates to which the Transferred Certificates belong, and
(c) no Transferred Certificate may be resold or transferred unless it is
(i) registered pursuant to the Securities Act and registered or qualified
pursuant any applicable state securities laws or (ii) sold or transferred
in transactions which are exempt from such registration and qualification
and the Certificate Registrar has received either: (A) a certificate from
the Certificateholder desiring to effect such transfer substantially in
the form attached as Exhibit ___ to the Pooling and Servicing Agreement
and a certificate from such Certificateholder's prospective transferee
substantially in the form attached either as Exhibit ___ or as Exhibit ___
to the Pooling and Servicing Agreement; or (C) an opinion of counsel
satisfactory to the Trustee with respect to the availability of such
exemption from registration under the Securities Act, together with copies
of the written certification(s) from the transferor and/or transferee
setting forth the facts surrounding the transfer upon which such opinion
is based.
D2-8
<PAGE>
3. The Transferee understands that it may not sell or otherwise
transfer any Transferred Certificate except in compliance with the
provisions of Section 3.3 of the Pooling and Servicing Agreement, which
provisions it has carefully reviewed.
4. Transferee understands that each Transferred Certificate will
bear the following legends:
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE
SECURITIES LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE OR ANY INTEREST HEREIN WITHOUT SUCH REGISTRATION OR QUALIFICATION
MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT REQUIRE SUCH REGISTRATION OR
QUALIFICATION AND WHICH IS IN ACCORDANCE WITH THE PROVISIONS OF SECTION 3.3 OF
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH ASSETS
OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, WILL BE
REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
5. Neither the Transferee nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any
Certificate, any interest in any Certificate or any other similar security
to any person in any manner, (b) solicited any offer to buy or accept a
pledge, disposition or other transfer of any Certificate, any interest in
any Certificate or any other similar security from any person in any
manner, (c) otherwise approached or negotiated with respect to any
Certificate, any interest in any Certificate or any other similar security
with any person in any manner, (d) made any general solicitation with
respect to any Certificate, any interest in any Certificate or any other
similar security by means of general advertising or in any other manner,
or (e) taken any other action with respect to any Certificate, any
interest in any Certificate or any other similar security, which (in the
case of any of the acts described in clauses (a) through (e) above) would
constitute a distribution of the Transferred Certificates under the
Securities Act, would render the disposition of the Transferred
Certificates a violation of Section 5 of the Securities Act or any state
securities law or would require registration or qualification of the
Transferred Certificates pursuant thereto. The Transferee will not act,
nor has it authorized or will it authorize any person to act, in any
manner set forth in the foregoing sentence with respect to any
Certificate, any interest in any Certificate or any other similar
security.
6. The Transferee has been furnished with all information regarding
(a) the Depositor, (b) the Transferred Certificates and distributions
thereon, (c) the Pooling and Servicing Agreement and the Trust Fund
created pursuant thereto, (d) the nature, performance and servicing of the
Mortgage Loans, and (e) all related matters, that it has requested.
D2-9
<PAGE>
7. The Transferee is an "accredited investor" as defined in any of
paragraphs (1), (2), (3) and (7) of Rule 501(a) under the Securities Act
or an entity in which all of the equity owners come within such
paragraphs. The Transferee has such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and risks
of an investment in the Transferred Certificate; the Transferee has sought
such accounting, legal and tax advice as it has considered necessary to
make an informed investment decision; and the Transferee is able to bear
the economic risks of such investment and can afford a complete loss of
such investment.
Very truly yours,
____________________________________________
(Transferee)
By:_________________________________________
Name
Title:___________________________________
D2-10
<PAGE>
EXHIBIT D-3A
FORM I OF TRANSFEREE CERTIFICATE
FOR TRANSFERS OF INTERESTS IN
BOOK-ENTRY PRIVATELY OFFERED CERTIFICATES
[Date]
[TRANSFEROR]
Re: Morgan Stanley Capital I Inc., Commercial Mortgage
Pass-Through Certificates, Series 1998-HF2 (the
"Certificates")
Dear Sirs:
This letter is delivered to you in connection with the transfer by
____________________ (the "Transferor") to __________________ (the "Transferee")
of a Certificate (the "Transferred Certificate") having an initial Principal
Balance or Notional Amount as of November 12, 1998 (the "Closing Date") of
$____________. The Certificates were issued pursuant to the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of
November 1, 1998, among Morgan Stanley Capital I Inc., as depositor (the
"Depositor"), GMAC Commercial Mortgage Corporation, as master servicer and as
special servicer, LaSalle National Bank, as trustee and ABN AMRO Bank N.V., as
fiscal agent. All terms used herein and not otherwise defined shall have the
meanings set forth in the Pooling and Servicing Agreement. The Transferee hereby
certifies, represents and warrants to you, and for the benefit of the Depositor
and the Trustee, that:
1. The Transferee is acquiring the Transferred Certificate for its
own account for investment and not with a view to or for sale or transfer
in connection with any distribution thereof, in whole or in part, in any
manner which would violate the Securities Act of 1933, as amended (the
"Securities Act"), or any applicable state securities laws.
2. The Transferee understands that (a) the Certificates have not
been and will not be registered under the Securities Act or registered or
qualified under any applicable state securities laws, (b) none of the
Depositor, the Trustee or the Certificate Registrar is obligated to so
register or qualify the Certificates and (c) no interest in the
Certificates may be sold or transferred unless (i) such Certificates are
registered pursuant to the Securities Act and registered or qualified
pursuant to any applicable state securities laws or (ii) such interest
sold or transferred in transactions which are exempt from such
registration and qualification and the Certificate Owner desiring to
effect such transfer has received either (A) a certification from such
Certificate Owner's prospective transferee (substantially in the form
attached to the Pooling and Servicing Agreement) setting forth the facts
surrounding the transfer or (B) an opinion of counsel satisfactory to the
Certificate Registrar with respect to the availability of such exemption,
together with copies of the certification(s) from the transferor and/or
transferee setting forth the facts surrounding the transfer upon which
such opinion is based.
3. The Transferee understands that it may not sell or otherwise
transfer any portion of its interest in the Transferred Certificate except
in compliance with the provisions of Section 3.3 of the Pooling and
Servicing Agreement, which provisions it has carefully reviewed.
4. Transferee understands that each Transferred Certificate will
bear the following legends:
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE
SECURITIES LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A
TRANSACTION
D3-1
<PAGE>
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 3.3 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO A RETIREMENT PLAN OR OTHER EMPLOYEE
BENEFIT PLAN OR ARRANGEMENT THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY
PURCHASING THIS CERTIFICATE ON BEHALF OF, AS INVESTMENT MANAGER OF, AS NAMED
FIDUCIARY OF, AS TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT, WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
5. Neither the Transferee nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any
Certificate, any interest in any Certificate or any other similar security
to any person in any manner, (b) solicited any offer to buy or accept a
pledge, disposition or other transfer of any Certificate, any interest in
any Certificate or any other similar security from any person in any
manner, (c) otherwise approached or negotiated with respect to any
Certificate, any interest in any Certificate or any other similar security
with any person in any manner, (d) made any general solicitation by means
of general advertising or in any other manner, or (e) taken any other
action, that (in the case of any of the acts described in clauses (a)
through (e) above) would constitute a distribution of any Certificate
under the Securities Act, would render the disposition of an Certificate a
violation of Section 5 of the Securities Act or any state securities law
or would require registration or qualification of any Certificate pursuant
thereto. The Transferee will not act, nor has it authorized or will it
authorize any person to act, in any manner set forth in the foregoing
sentence with respect to any Certificate.
6. The Transferee has been furnished with all information regarding
(a) the Depositor, (b) the Transferred Certificates and distributions
thereon, (c) the Pooling and Servicing Agreement and (d) all related
matters, that it has requested.
7. The Transferee is an institutional "accredited investor" as
defined in Rule 501(a) (1), (2), (3) or (7) under the Securities Act and
has such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of an investment in the
Certificates; the Transferee has sought such accounting, legal and tax
advice as it has considered necessary to make an informed investment
decision; and the Transferee is able to bear the economic risks of such an
investment and can afford a complete loss of such investment.
Very truly yours,
____________________________________________
(Transferee)
By:_________________________________________
Name_____________________________________
Title:___________________________________
D3-2
<PAGE>
EXHIBIT D-3B
FORM II OF TRANSFEREE CERTIFICATE
FOR TRANSFERS OF INTERESTS IN
BOOK-ENTRY PRIVATELY OFFERED CERTIFICATES
[Date]
[TRANSFEROR]
Re: Morgan Stanley Capital I Inc., Commercial Mortgage
Pass-Through Certificates, Series 1998-HF2 (the
"Certificates")
Dear Sirs:
This letter is delivered to you in connection with the transfer by
____________________ (the "Transferor") to _____________________ (the
"Transferee") of a Certificate (the "Transferred Certificate") having an initial
Principal Balance or Notional Amount as of November 12, 1998 (the "Closing
Date") of $________. The Certificates were issued pursuant to the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of
November 1, 1998, among Morgan Stanley Capital I Inc. as depositor (the
"Depositor"), GMAC Commercial Mortgage Corporation, as master servicer and as
special servicer, LaSalle National Bank as trustee and ABN AMRO Bank N.V., as
fiscal agent. All terms used herein and not otherwise defined shall have the
meanings set forth in the Pooling and Servicing Agreement. The Transferee hereby
certifies, represents and warrants to you, and for the benefit of the Depositor
and the Trustee, that:
1. The Transferee is a "qualified institutional buyer" as that term
is defined in Rule 144A ("Rule 144A") under the Securities Act of 1933, as
amended (the "Securities Act"), and has completed one of the forms of
certification to that effect attached hereto as Annex 1 and Annex 2. The
Transferee is aware that the sale to it is being made in reliance on Rule
144A. The Transferee is acquiring the Transferred Certificate for its own
account or for the account of a qualified institutional buyer, and
understands that such Certificate or any interest therein may be resold,
pledged or transferred only (i) to a person reasonably believed to be a
qualified institutional buyer that purchases for its own account or for
the account of a qualified institutional buyer to whom notice is given
that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the
Securities Act.
2. The Transferee understands that (a) the Class of Certificates to
which the Transferred Certificate belongs have not been and will not be
registered under the Securities Act or registered or qualified under any
applicable state securities laws, (b) none of the Depositor, the Trustee
or the Certificate Registrar is obligated so to register or qualify the
Certificates and (c) no interest in the Certificates may be sold or
transferred unless (i) such Certificates are registered pursuant to the
Securities Act and registered or qualified pursuant to any applicable
state securities laws or (ii) such interest sold or transferred in
transactions which are exempt from such registration and qualification and
the Certificate Owner desiring to effect such transfer has received either
(A) a certification from such Certificate Owner's prospective transferee
(substantially in the form attached to the Pooling and Servicing
Agreement) setting forth the facts surrounding the transfer or (B) an
opinion of counsel satisfactory to the Certificate Registrar with respect
to the availability of such exemption, together with copies of the
certification(s) from the transferor and/or transferee setting forth the
facts surrounding the transfer upon which such opinion is based.
3. The Transferee understands that it may not sell or otherwise
transfer any portion of its interest in the Transferred Certificate except
in compliance with the provisions of Section 3.3 of the Pooling and
Servicing Agreement, which provisions it has carefully reviewed.
D3-3
<PAGE>
4. Transferee understands that each Transferred Certificate will
bear the following legends:
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE
SECURITIES LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A
TRANSACTION WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 3.3 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY
PURCHASING THIS CERTIFICATE ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF,
OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
5. The Transferee has been furnished with all information regarding
(a) the Certificates and distributions thereon, (b) the nature,
performance and servicing of the Mortgage Loans, (c) the Pooling and
Servicing Agreement, and (d) any credit enhancement mechanism associated
with the Transferred Certificate, that it has requested.
Very truly yours,
____________________________________________
(Transferee)
By:_________________________________________
Name_____________________________________
Title:___________________________________
D3-4
<PAGE>
ANNEX 1 TO EXHIBIT D-3B
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned hereby certifies as follows to [name of Transferor] (the
"Transferor"), and for the benefit of the Depositor and the Trustee, as
Certificate Registrar, with respect to the commercial mortgage pass-through
certificate being transferred (the "Transferred Certificate") as described in
the Transferee Certificate to which this certification relates and to which this
certification is an Annex:
1. As indicated below, the undersigned is the chief financial
officer, a person fulfilling an equivalent function, or other executive
officer of the entity purchasing the Transferred Certificate (the
"Transferee").
2. The Transferee is a "qualified institutional buyer" as that term
is defined in Rule 144A under the Securities Act of 1933, as amended
("Rule 144A"), because (i) the Transferee owned and/or invested on a
discretionary basis $__________ in securities (other than the excluded
securities referred to below) as of the end of the Transferee's most
recent fiscal year (such amount being calculated in accordance with Rule
144A) and (ii) the Transferee satisfies the criteria in the category
marked below.
____ Corporation, etc. The Transferee is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or any
organization described in Section 501(c)(3) of the Internal Revenue
Code of 1986, as amended.
____ Bank. The Transferee (a) is a national bank or a banking institution
organized under the laws of any State, U.S. territory or the
District of Columbia, the business of which is substantially
confined to banking and is supervised by the State or territorial
banking commission or similar official or is a foreign bank or
equivalent institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto, as of a date not
more than 16 months preceding the date of sale of the Certificate in
the case of a U.S. bank, and not more than 18 months preceding such
date of sale for a foreign bank or equivalent institution.
____ Savings and Loan. The Transferee (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is supervised
and examined by a State or Federal authority having supervision over
any such institutions or is a foreign savings and loan association
or equivalent institution and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto, as of a date not
more than 16 months preceding the date of sale of the Certificate in
the case of a U.S. savings and loan association, and not more than
18 months preceding such date of sale for a foreign savings and loan
association or equivalent institution.
D3-5
<PAGE>
____ Broker-dealer. The Transferee is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934, as amended.
____ Insurance Company. The Transferee is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State, U.S.
territory or the District of Columbia.
____ State or Local Plan. The Transferee is a plan established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees.
____ ERISA Plan. The Transferee is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of
1974, as amended.
____ Investment Adviser. The Transferee is an investment adviser
registered under the Investment Advisers Act of 1940, as amended.
____ Other. (Please supply a brief description of the entity and a
cross-reference to the paragraph and subparagraph under subsection
(a)(1) of Rule 144A pursuant to which it qualifies. Note that
registered investment companies should complete Annex 2 rather than
this Annex 1.)
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee, (ii)
securities that are part of an unsold allotment to or subscription by the
Transferee, if the Transferee is a dealer, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase
agreements, (vi) securities owned but subject to a repurchase agreement
and (vii) currency, interest rate and commodity swaps. For purposes of
determining the aggregate amount of securities owned and/or invested on a
discretionary basis by the Transferee, the Transferee did not include any
of the securities referred to in this paragraph.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Transferee, the
Transferee used the cost of such securities to the Transferee, unless the
Transferee reports its securities holdings in its financial statements on
the basis of their market value, and no current information with respect
to the cost of those securities has been published, in which case the
securities were valued at market. Further, in determining such aggregate
amount, the Transferee may have included securities owned by subsidiaries
of the Transferee, but only if such subsidiaries are consolidated with the
Transferee in its financial statements prepared in accordance with
generally accepted accounting principles and if the investments of such
subsidiaries are managed under the Transferee's direction. However, such
securities were not included if the Transferee is a majority-owned,
consolidated subsidiary of another enterprise and the Transferee is not
itself a reporting company under the Securities Exchange Act of 1934, as
amended.
D3-6
<PAGE>
5. The Transferee acknowledges that it is familiar with Rule 144A
and understands that the Transferor and other parties related to the
Transferred Certificate are relying and will continue to rely on the
statements made herein because one or more sales to the Transferee may be
in reliance on Rule 144A.
____ ____ Will the Transferee be purchasing the Transferred 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:_______________________________________
D3-7
<PAGE>
ANNEX 2 TO EXHIBIT D-3B
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That Are Registered Investment Companies]
The undersigned hereby certifies as follows to [name of Transferor] (the
"Transferor"), and for the benefit of the Depositor and the Trustee, with
respect to the commercial mortgage pass-through certificate being transferred
(the "Transferred Certificate") as described in the Transferee Certificate to
which this certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the chief financial
officer, a person fulfilling an equivalent function, or other executive
officer of the entity purchasing the Transferred Certificate (the
"Transferee") or, if the Transferee is a "qualified institutional buyer"
as that term is defined in Rule 144A under the Securities Act of 1933, as
amended ("Rule 144A"), because the Transferee is part of a Family of
Investment Companies (as defined below), is an executive officer of the
investment adviser (the "Adviser").
2. The Transferee is a "qualified institutional buyer" as defined in
Rule 144A because (i) the Transferee is an investment company registered
under the Investment Company Act of 1940, as amended, and (ii) as marked
below, the Transferee alone owned and/or invested on a discretionary
basis, or the Transferee's Family of Investment Companies owned, at least
$100,000,000 in securities (other than the excluded securities referred to
below) as of the end of the Transferee's most recent fiscal year. For
purposes of determining the amount of securities owned by the Transferee
or the Transferee's Family of Investment Company, the cost of such
securities was used, unless the Transferee or any member of the
Transferee's Family of Investment Companies, as the case may be, reports
its securities holdings in its financial statements on the basis of their
market value, and no current information with respect to the cost of those
securities has been published, in which case the securities of such entity
were valued at market.
____ The Transferee owned and/or invested on a discretionary basis
$___________ in securities (other than the excluded securities
referred to below) as of the end of the Transferee's most recent
fiscal year (such amount being calculated in accordance with Rule
144A).
____ The Transferee is part of a Family of Investment Companies which
owned in the aggregate $_________ in securities (other than the
excluded securities referred to below) as of the end of the
Transferee's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because
one investment adviser is a majority owned subsidiary of the other).
D3-8
<PAGE>
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part
of the Transferee's Family of Investment Companies, (ii) bank deposit
notes and certificates of deposit, (iii) loan participations, (iv)
repurchase agreements, (v) securities owned but subject to a repurchase
agreement and (vi) currency, interest rate and commodity swaps. For
purposes of determining the aggregate amount of securities owned and/or
invested on a discretionary basis by the Transferee, or owned by the
Transferee's Family of Investment Companies, the securities referred to in
this paragraph were excluded.
5. The Transferee is familiar with Rule 144A and understands that
the parties to which this certification is being made are relying and will
continue to rely on the statements made herein because one or more sales
to the Transferee will be in reliance on Rule 144A.
____ ____ Will the Transferee be purchasing the Transferred 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 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:_______________________________________
D3-9
<PAGE>
EXHIBIT E
FORM OF TRANSFEROR CERTIFICATE FOR TRANSFERS OF
REMIC RESIDUAL CERTIFICATES
[Date]
LaSalle National Bank,
as Certificate Registrar
135 South LaSalle Street
Suite 1625
Chicago, Illinois 60674-4107
Attention: Asset-Backed Securities Trust Services Group - Morgan Stanley Series
1998 - HF2
Re: Morgan Stanley Capital I Inc., Commercial Mortgage
Pass-Through Certificates, Series 1998-HF2 (the
"Certificates")
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
_____________________ (the "Transferor") to __________________ (the
"Transferee") of [Class R-I] [Class R-II] [Class R-III] Certificates evidencing
a ____% Percentage Interest in such Class (the "Residual Certificates"). The
Certificates, including the Residual Certificates, were issued pursuant to the
Pooling and Servicing Agreement, dated as of November 1, 1998 (the "Pooling and
Servicing Agreement"), among Morgan Stanley Capital I Inc., as depositor, GMAC
Commercial Mortgage Corporation, as master servicer and as special servicer,
LaSalle National Bank, as trustee, and ABN AMRO Bank N.V., as fiscal agent. All
capitalized terms used but not otherwise defined herein shall have the
respective meanings set forth in the Pooling and Servicing Agreement. The
Transferor hereby certifies, represents and warrants to you, as Certificate
Registrar, that:
1. No purpose of the Transferor relating to the transfer of the
Residual Certificates by the Transferor to the Transferee is or will be to
impede the assessment or collection of any tax.
2. The Transferor understands that the Transferee has delivered to
you a Transfer Affidavit and Agreement in the form attached to the Pooling and
Servicing Agreement as Exhibit F. The Transferor does not know or believe that
any representation contained therein is false.
3. The Transferor has at the time of this transfer conducted a
reasonable investigation of the financial condition of the Transferee as
contemplated by Treasury regulation Section 1.860E-1(c)(4)(i) and, as a result
of that investigation, the Transferor has determined that the Transferee has
historically paid its debts as they became due and has found no significant
evidence to indicate that the Transferee will not continue to pay its debts as
they become due in the future. The Transferor understands that the transfer of
the Residual Certificates may not be respected for United States income tax
purposes (and the Transferor may continue to be liable for United States income
taxes associated therewith) unless the Transferor has conducted such an
investigation.
Very truly yours,
E-1
<PAGE>
________________________________________
(Transferor)
By:_____________________________________
Name:___________________________________
Title:__________________________________
E-2
<PAGE>
EXHIBIT F
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
FOR TRANSFERS OF REMIC RESIDUAL CERTIFICATES
STATE OF )
) ss:
COUNTY OF )
__________________________, being first duly sworn, deposes and says
that:
1. He/She is the ___________________________ of ___________________
(the prospective transferee (the "Transferee") of Morgan Stanley Capital I Inc.,
Commercial Mortgage Pass-Through Certificates, Series 1998-HF2, Class [R-I]
[R-II] [R-III], evidencing a ____% Percentage Interest in such Class (the
"Residual Certificates")), a ___________________ duly organized and validly
existing under the laws of _________________, on behalf of which he/she makes
this affidavit. All capitalized terms used but not otherwise defined herein
shall have the respective meanings set forth in the Pooling and Servicing
Agreement pursuant to which the Residual Certificates were issued (the "Pooling
and Servicing Agreement").
2. The Transferee (i) is, and as of the date of transfer will be, a
"Permitted Transferee" and will endeavor to remain a "Permitted Transferee" for
so long as it holds the Residual Certificates, and (ii) is acquiring the
Residual Certificates for its own account or for the account of another
prospective transferee from which it has received an affidavit in substantially
the same form as this affidavit. A "Permitted Transferee" is any Person other
than a "disqualified organization" or a possession of the United States. (For
this purpose, a "disqualified organization" means the United States, any state
or political subdivision thereof, any agency or instrumentality of any of the
foregoing (other than an instrumentality, all of the activities of which are
subject to tax and, except for the Federal Home Loan Mortgage Corporation, a
majority of whose board of directors is not selected by any such governmental
entity) or any foreign government, international organization or any agency or
instrumentality of such foreign government or organization, any rural electric
or telephone cooperative, or any organization (other than certain farmers'
cooperatives) that is generally exempt from federal income tax unless such
organization is subject to the tax on unrelated business taxable income.)
3. The Transferee is aware (i) of the tax that would be imposed on
transfers of the Residual Certificates to "disqualified organizations" under the
Code that applies to all transfers of the Residual Certificates; (ii) that such
tax would be on the transferor or, if such transfer is through an agent (which
Person includes a broker, nominee or middleman) for a non-Permitted Transferee,
on the agent; (iii) that the Person otherwise liable for the tax shall be
relieved of liability for the tax if the transferee furnishes to such Person an
affidavit that the transferee is a Permitted Transferee and, at the time of
transfer, such Person does not have actual knowledge that the affidavit is
false; and (iv) that the Residual Certificates may be a "noneconomic residual
interest" within the meaning of Treasury regulation Section 1.860E-1(c) and that
the transferor of a "noneconomic residual interest" will remain liable for any
taxes due with respect to the income on such residual interest, unless no
significant purpose of the transfer is to enable the transferor to impede the
assessment or collection of tax.
4. The Transferee is aware of the tax imposed on a "pass-through
entity" holding the Residual Certificates if at any time during the taxable year
of the pass-through entity a non-Permitted Transferee is the record holder of an
interest in such entity. (For this purpose, a "pass-through entity" includes a
regulated
F-1
<PAGE>
investment company, a real estate investment trust or common trust fund, a
partnership, trust or estate, and certain cooperatives.)
5. The Transferee is aware that the Certificate Registrar will not
register any transfer of the Residual Certificates by the Transferee unless the
Transferee's transferee, or such transferee's agent, delivers to the Certificate
Registrar, among other things, an affidavit and agreement in substantially the
same form as this affidavit and agreement. The Transferee expressly agrees that
it will not consummate any such transfer if it knows or believes that any
representation contained in such affidavit and agreement is false.
6. The Transferee consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Residual Certificate will only be
owned, directly or indirectly, by a Permitted Transferee.
7. The Transferee's taxpayer identification number is
_________________.
8. The Transferee has reviewed the provisions of Section 3.3(f) of
the Pooling and Servicing Agreement, a description of which provisions is set
forth in the Residual Certificates (in particular, clause (iv)(A) of Section
3.3(f) which authorizes the Trustee to deliver payments on the Residual
Certificate to a Person other than the Transferee and clause (iv)(B) of Section
3.3(f) which authorizes the Trustee to negotiate a mandatory sale of the
Residual Certificates, in either case, in the event that the Transferee holds
such Residual Certificates in violation of Section 3.3(f)); and the Transferee
expressly agrees to be bound by and to comply with such provisions.
9. No purpose of the Transferee relating to its purchase or any sale
of the Residual Certificates is or will be to impede the assessment or
collection of any tax.
10. The Transferee hereby represents to and for the benefit of the
transferor that the Transferee intends to pay any taxes associated with holding
the Residual Certificates as they become due, fully understanding that it may
incur tax liabilities in excess of any cash flows generated by the Residual
Certificates.
11. The Transferee will, in connection with any transfer that it
makes of the Residual Certificates, deliver to the Certificate Registrar a
representation letter substantially in the form of Exhibit E to the Pooling and
Servicing Agreement in which it will represent and warrant, among other things,
that it is not transferring the Residual Certificates to impede the assessment
or collection of any tax and that it has at the time of such transfer conducted
a reasonable investigation of the financial condition of the proposed transferee
as contemplated by Treasury regulation Section 1.860E-l(c)(4)(i) and has
satisfied the requirements of such provision.
12. The Transferee is a citizen or resident of the United States, a
corporation, a partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States is includable in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its ____________ and its corporate seal to be hereunto attached, attested by its
[Assistant] Secretary, this ___ day of _______________, 199_.
[NAME OF TRANSFEREE]
By:________________________________
F-2
<PAGE>
[Name of Officer]
[Title of Officer]
___________________________
[Corporate Seal]
ATTEST:
___________________________
[Assistant] Secretary
Personally appeared before me the above-named ____________________,
known or proved to me to be the same person who executed the foregoing
instrument and to be the ___________________________ of the Transferee, and
acknowledged to me that he/she executed the same as his/her free act and deed
and the free act and deed of the Transferee
Subscribed and sworn before me this ___ day of __________________,
199_.
____________________________________________
NOTARY PUBLIC
COUNTY OF___________________________________
STATE OF____________________________________
My Commission expires the ______ day
of __________________, 19___.
F-3
<PAGE>
EXHIBIT G-1
FORM OF MONTHLY CERTIFICATEHOLDER REPORT
[AVAILABLE FROM TRUSTEE]
G-1
<PAGE>
EXHIBIT G-2
FORM OF SPECIALLY SERVICED ASSET REPORT
[AVAILABLE FROM TRUSTEE]
G-2
<PAGE>
EXHIBIT H-1
COMPARATIVE FINANCIAL STATUS REPORT
H-1
<PAGE>
EXHIBIT H-2
COMPARATIVE FINANCIAL STATUS REPORT
[AVAILABLE FROM TRUSTEE]
H-2
<PAGE>
EXHIBIT H-3
HISTORICAL LOAN MODIFICATION REPORT
[AVAILABLE FROM TRUSTEE]
H-3
<PAGE>
EXHIBIT H-4
HISTORICAL LOSS ESTIMATE REPORT
[AVAILABLE FROM TRUSTEE]
H-4
<PAGE>
EXHIBIT H-5
REO STATUS REPORT
[AVAILABLE FROM TRUSTEE]
H-5
<PAGE>
EXHIBIT H-6
WATCH LIST
[AVAILABLE FROM TRUSTEE]
H-6
<PAGE>
EXHIBIT H-7
OPERATING STATEMENT ANALYSIS
[AVAILABLE FROM TRUSTEE]
H-7
<PAGE>
EXHIBIT H-8
NOI ADJUSTMENT WORKSHEET
[AVAILABLE FROM TRUSTEE]
H-8
<PAGE>
EXHIBIT H-9
CSSA REPORTS
[AVAILABLE FROM TRUSTEE]
H-9
<PAGE>
EXHIBIT H-10
[AVAILABLE FROM TRUSTEE]
CSSA REPORTS
[AVAILABLE FROM TRUSTEE]
H-10
<PAGE>
EXHIBIT H-11
CSSA REPORTS
Subject to the terms of the Pooling and Servicing Agreement, the
Class A-1 and A-2 Certificates will initially be issued in denominations
of $25,000 initial Certificate Principal Balance and in any whole dollar
denomination in excess thereof. The Class B Certificates will initially be
issued in denominations of $50,000 initial Certificate Principal Balance,
as applicable and in any whole dollar denomination in excess thereof. The
remaining Certificates will initially be issued in denominations of
$100,000 initial Certificate Principal Balance or Certificate Notional
Amount and in any whole dollar denomination in excess thereof. Each Class
of Certificates other than the Residual Certificates will be represented
by one or more Certificates registered in the name of Cede & Co., as
nominee of the DTC. No Certificate Owner will be entitled to receive a
Definitive Certificate representing such interest, except under the
limited circumstances described in the Pooling and Servicing Agreement.
The Residual Certificates will be issued in fully registered, certificated
form in minimum percentage interests of 10% and in multiples of 10% in
excess thereof.
H-11
<PAGE>
SCHEDULE I
MSMC LOANS
MORTGAGE LOAN PURCHASE AGREEMENT
SCHEDULE OF MORTGAGE LOAN
ORIGINAL
LOAN PRINCIPAL
NO.(1) PROPERTY NAME BALANCE
- ------ --------------------------------------------------------- -----------
3 The Regal Business Center (2) $22,000,000
5 Ventana Apartments (3) $17,500,000
43 Villa Monterey Apartments (4) $9,800,000
45 Village at University Place $8,650,000
49 Sherwood Mall $9,000,000
51 Plaza North Shopping $8,000,000
67 Royal Gulf Apartments $6,200,000
73 Comfort Inn - Old Town $5,880,000
76 Rancho Bernardo Town Center $6,200,000
80 Kingstowne I Apartments $5,500,000
106 Pleasant Run Apartments $4,237,500
109 San Angelo Square $4,160,000
112 Preston Highway Shopping Center $4,000,000
124 West Thomas Road $3,600,000
133 1111 Prospect Street (5) $3,500,000
138 Highpark Corp. Center $3,250,000
143 Gladstone Village Center $3,000,000
146 Gallery Center $3,000,000
149 Northwood Apartments $2,950,000
156 College Station Apartments $2,786,000
159 South Shore Apartments $2,700,000
161 Moorpark Terrace Apartments $2,700,000
168 Morrison Apartments $2,500,000
173 Rancho del Oro Business Park $2,500,000
181 Hayden Industrial Park $2,400,000
184 Kimberly Square Shopping Center $2,350,000
192 Jasin Industrial Park (6) $2,320,000
193 Southland Apartments $2,208,000
216 Sepulveda Retail Center $1,800,000
255 Lindys Landing Apts $1,000,000
<PAGE>
FOOTNOTES TO MORTGAGE LOAN SCHEDULE
1. The Original Amortization Term shown is the basis for determining the fixed
monthly principal and interest payment as set forth in the related note. Due
to the actual/360 accrual feature of certain Mortgage Loans, the actual
amortization to a zero balance on these Mortgage Loans will be longer.
2. Loan No. 3 is secured by liens on multiple properties. Property name, city
and state indicated are for the largest of such properties. Detail on the
individual properties securing Loan No. 3 is as follows:
Property Name City State
------------- ---- -----
The Regal Business Center Dallas TX
Tarrant Industrial Fort Worth TX
Properties 1
Tarrant Industrial Grapevine TX
Properties 2
Tarrant Industrial Arlington TX
Properties 3
Tarrant Industrial Grand Prairie TX
Properties 4
Tarrant Industrial Grand Prairie TX
Properties 5
Tarrant Industrial Arlington TX
Properties 6
Tarrant Industrial Arlington TX
Properties 7
3. The monthly payments for Loan No. 5 presently consist of payments of
interest only on the Cut-Off Date Balance. The identified Monthly Payment
for this loan is based on the monthly debt service payments payable upon
commencement of the scheduled initial principal and interest payment date of
3/1/2000.
4. Loan No. 43 consists of two notes originally made on 6/20/1996, a $5.8
million note at a fixed 8.690% interest rate and a floating rate $4 million
note. On 12/1/1997, the floating rate note converted to a 7.500% fixed rate
note. The Mortgage Rate for Loan No. 43 is based on the weighted average of
the two identified note interest rates based on the Cut-Off Date balances of
the respective notes.
5. Loan No. 133 converted from floating to fixed rate on 7/1/1997. The Original
Term to Maturity reflects the term to maturity from the note date, and the
Original Amortization Date reflects the amortization term as of the note
date.
6. Loan No. 192 converted from floating to fixed rate on 11/1/1996. The
Original Term to Maturity reflects the term to maturity from the note date,
and the Original Amortization Term reflects the amortization term as of the
note date.
<PAGE>
SCHEDULE II
HELLER LOANS
MORTGAGE LOAN SCHEDULE
LOAN ORIGINAL
NO.(1) PROPERTY NAME BALANCE
- ------ -------------------------------------------------------- -----------
1 Augusta Exchange $24,000,000
2 Magnolia Vinings Apartments $23,837,210
4 490 Post Street $17,800,000
6 Parkway Plaza-Norman, OK $17,400,000
7 Garden Court Hotel $14,750,000
8 The Courtyard Shopping Center $13,800,000
9 Roosevelt Glen Corporate Center $12,411,950
10 Roosevelt Glen Release Parcel $1,025,000
11 Pier 1 - York $1,538,084
12 Pier 1 - Harrisburg $1,386,797
13 Pier 1 - Slidell $1,361,583
14 Pier 1 - East Maple Shade $1,311,154
15 Pier 1 - Chesapeake $1,302,749
16 Pier 1 - Barboursville $1,109,438
17 Pier 1 - Sandusky $1,101,033
18 Pier 1 - Fargo $1,092,628
19 Pier 1 - Grand Forks $1,042,199
20 Pier 1 - Cherry Hill $1,008,580
21 York Creek Apartments $12,250,000
22 Pier 1 - Franklin $1,311,154
23 Pier 1 - Birmingham $1,252,320
24 Pier 1 - Cary $1,227,106
25 Pier 1 - Sunset Valley $1,217,354
26 Pier 1 - Corpus Christi $1,185,081
27 Pier 1 - West Melbourne $1,176,677
28 Pier 1 - Fayetteville $1,155,665
29 Pier 1 - Kennewick $1,136,000
30 Pier 1 - High Point $1,134,652
31 Pier 1 - Little Rock $949,746
32 Best Western Landmark Hotel $11,750,000
33 La Jolla Village Apartments $11,550,000
34 Country Hills Apartments $11,000,000
35 Wal-Mart-Augusta $10,780,000
36 Village on the Green $10,250,000
<PAGE>
MORTGAGE LOAN PURCHASE AGREEMENT
SCHEDULE OF MORTGAGE LOANS
LOAN ORIGINAL
NO.(1) PROPERTY NAME BALANCE
- ------ -------------------------------------------------------- -----------
37 Shaws Grocery Center $10,000,000
38 Summerwood Apts $10,000,000
39 Bay Pointe Apartments $9,840,000
40 Central Park Apartments $9,310,000
41 Royal Palm MHC $9,100,000
42 Alafaya Square $9,100,000
44 Brookhaven Manor $8,800,000
46 Crossroads Shopping Center $8,600,000
47 Piccadilly Apartments $8,600,000
48 Empire Industrial Park $8,500,000
50 Stanley Village $8,250,000
52 American Hourse Parkway $7,500,000
53 Lincoln Court $7,500,000
54 The Fields $7,100,000
55 Cobb Marketfair $7,000,000
56 Barrows Place $6,937,194
57 Orcas Industrial Park $6,900,000
58 Village View Apartments $6,810,000
59 The Landings Apartments $6,735,000
60 Holiday Inn - Amherst $6,700,000
61 Space Saver Self Storage $6,671,194
62 Mountain View $6,550,000
63 Barrington Terrace $6,500,000
64 230-38 East 44th Street $6,460,280
65 Woodfield East Apartments $6,250,000
66 NEC - Permanent $6,236,000
68 Muses Block $6,200,000
69 Standiford Place $6,225,000
70 Winslow Court $6,150,000
71 Holiday Inn - Airport $6,000,000
72 Charles Daniels Apartments $6,000,000
74 Clarion Hotel $5,850,000
75 Clay Creek Apartments $5,759,756
77 The Trees $5,750,000
78 Terra Cotta Villa $5,700,000
79 Whispering Pines $5,500,000
81 Chelmsford Best Western $5,500,000
82 Brightondale $5,440,000
83 Stoney Brook Apartments $5,450,000
84 Orchard Shopping Center $5,200,000
2
<PAGE>
MORTGAGE LOAN PURCHASE AGREEMENT
SCHEDULE OF MORTGAGE LOANS
LOAN ORIGINAL
NO.(1) PROPERTY NAME BALANCE
- ------ -------------------------------------------------------- -----------
85 Towne Club $5,100,000
86 380 N. Woodward $5,000,000
87 72 Madison Avenue $5,000,000
88 Access Self Storage $4,944,870
89 Stanley Apartments $4,930,000
90 Holiday Inn - Ithaca $4,900,000
91 Best Western - Rockville $4,900,000
92 Merrillville Corporate Center $4,900,000
93 Oak Hills Shopping Center $4,800,000
94 Hill House $4,800,000
95 Park Chateau $4,750,000
96 131 Tremont Apartments $4,717,157
97 New Market Plaza $4,641,000
98 The Aspens on Country Club $4,464,178
99 Westwood Glen $4,450,000
100 South Broadway Car Care Center $4,345,399
101 Mountain View Mobile Estates $4,350,000
102 Bridgecreek Apartments $4,345,000
103 Le Cercle Apartments $4,325,000
104 Geneva Meadows $4,300,000
105 Northern Trust $4,250,000
107 Whispering Pines Community $4,200,000
108 Bankside Apartments $4,182,029
110 Lake Corporate Center $4,100,000
111 Misson Bay Condominiums $4,000,000
113 Mr. D's Self Storage $4,000,000
114 Raycom $3,975,000
115 Camelot $3,975,000
116 County Seat Self Storage $3,950,000
117 Vegas Food Center $3,940,000
118 A-American SSF Portfolio - Irving $3,930,000
119 Regents Park Office I & II $3,900,000
120 Bittersweet Plaza $3,750,000
121 Springs of Escondido $3,750,000
122 Alamitos Business Center $3,600,000
123 Oakton Beach & Tennis Club $3,568,000
125 Old Wilkes Centre $3,500,000
126 Meridian Busn. Campus $3,500,000
127 Beach Distribution Center $3,450,000
128 Coltsgate $3,400,000
3
<PAGE>
MORTGAGE LOAN PURCHASE AGREEMENT
SCHEDULE OF MORTGAGE LOANS
LOAN ORIGINAL
NO.(1) PROPERTY NAME BALANCE
- ------ -------------------------------------------------------- -----------
129 Chateau De Ville $3,400,000
130 Edgewood Sunrise North $3,368,000
131 Atlantic Self Storage $3,350,000
132 Wyndemere Apartments $3,300,000
134 Cedar Village MHC $3,300,000
135 York Manor Apartments $3,300,000
136 850 Warwick Avenue $3,200,000
137 Axon Instruments $3,150,000
139 Campbell Industrial $3,119,000
140 Valley View Place $3,100,000
141 Oak Glen Apartments $3,100,000
142 U Save Park Self Storage $3,049,852
144 Rainbow Forest Apartments $3,000,000
145 Babies R Us $3,000,000
147 Nova Plaza $3,000,000
148 A-American SSF- Irwindale $2,950,000
150 Guard Well SSF $2,916,997
151 Eckerd - Hyde Park $2,900,000
152 Village Square Apartments $2,900,000
153 Fairway Lanai $1,360,000
154 Park Place $1,515,000
155 7410 Northside Drive Building $2,800,000
157 Canterbury Crossings $2,750,000
158 Arborwood Apartments $2,720,000
160 Chula Vista MHP $2,700,000
162 S.S. Mini Storage - Opa Locka $2,675,000
163 Montebello Plaza $2,600,000
164 Cloverleaf Eastates MHC $2,600,000
165 Centerville Storage Inns of America $2,620,000
166 Barclay Place Shopping Center $2,600,000
167 Tarzana Place $2,550,000
169 Commack Colonial $2,500,000
170 Cedar Ridge $2,500,000
171 Capri MHC $2,500,000
172 231 - 237 Second Avenue $2,478,430
174 Walgreen - Covington $2,472,500
175 Miramar Apartments $2,400,000
176 Boulder Business Commons $2,400,000
177 Eckerd - Lynn Haven $2,400,000
178 American Classic Virginia Beach SSF $2,390,000
4
<PAGE>
MORTGAGE LOAN PURCHASE AGREEMENT
SCHEDULE OF MORTGAGE LOANS
LOAN ORIGINAL
NO.(1) PROPERTY NAME BALANCE
- ------ -------------------------------------------------------- -----------
179 Laguna Ridge Business Center $2,362,000
180 American Classic-Hampton-SSF $2,350,000
182 Silver Spur Ranch $2,375,000
183 Thornapple Lake MHP $2,350,000
185 Brookshire Village $2,300,000
186 Calusa Shopping Center $2,300,000
187 Storage Inn SSF $2,264,169
188 Franklin Village MHP $2,248,434
189 Lincoln Tower $2,260,000
190 Timber Ridge $2,240,000
191 Walgreens - Tallahassee $2,250,000
194 Village Green Shopping Center $2,220,000
195 322 Route 46 West $2,200,000
196 Edwards Apartments $2,125,000
197 Deerbrook Plaza $2,100,000
198 Shallowford Apartments $2,093,536
199 Walgreens - Belvidere $2,100,000
200 A-1 Self Storage Facility - El Cajon, CA $2,075,000
201 McGee's Closet $2,070,000
202 American Classic-Portsmouth SSF $2,050,000
203 Hide-Away RV Resort $2,050,000
204 CVS - Lafayette, IN $2,036,000
205 A-American Downtown Los Angeles $2,000,000
206 Alderbury Cove $2,000,000
207 Brookridge Apartments $2,000,000
208 Pheasant Run Apartments $2,000,000
209 Waverly Self Storage $1,991,268
210 Park Ridge Building $1,950,000
211 Lock-Ur-Own SSF $1,950,000
212 Statewide Mini Storage $1,925,000
213 S.S. Mini Storage - Inglewood $1,865,000
214 Parkwood Apartments $1,850,000
215 Teeca Plaza $1,800,000
217 Gaddis Building $1,800,000
218 Copans - Levy Portfolio $1,750,000
219 Holly Apartments $1,725,000
220 Hutchinson Retail $1,700,000
221 Neptune Mobile Village $1,700,000
222 A-American Self Storage - Canoga Park $1,700,000
223 El Dorado West $1,600,000
5
<PAGE>
MORTGAGE LOAN PURCHASE AGREEMENT
SCHEDULE OF MORTGAGE LOANS
LOAN ORIGINAL
NO.(1) PROPERTY NAME BALANCE
- ------ -------------------------------------------------------- -----------
224 Belmar Medical Center $1,650,000
225 Central Self Storage $1,628,409
226 Donovan-Smith MHP $1,607,358
227 Smithtown Professional $1,600,000
228 Casa Grande Apartments $1,600,000
229 Freeway Self Storage $1,600,000
230 Summit Mobile Home Park $1,600,000
231 333 Glen Head Road $1,500,000
232 CVS Cleveland $1,500,000
233 Bradley Self Storage Facility $1,500,000
234 Hillside West Apartments $1,460,000
235 Sierra Vista Plaza $1,450,000
236 Sentry Self Storage $1,400,000
237 Sunnyslope $1,350,000
238 Georgetown Station Apartments $1,325,000
239 Orange Park Shopping Center $1,300,000
240 Appalachian Self Storage $1,300,000
241 LaVerne Business Park $1,300,000
242 Villa Esperanza $1,275,000
243 Landmark Mini-Storage $1,250,000
244 Stirling Design Center $1,200,000
245 Westland I $1,200,000
246 Tatum Ranch Storage Solutions $1,200,000
247 Ocala Springs Shopping Center $1,173,000
248 Pine Oak Plaza $1,160,000
249 Sandia North Apartments $1,160,000
250 SecurCare - Colorado Springs $1,156,477
251 Whitnall Glen $1,150,000
252 4227 Enterprise Avenue $1,136,000
253 Mark IV $1,100,000
254 Outrigger Apartments $1,050,000
256 North 10th Street SSF $1,000,000
257 Leawood Plaza Apartments $1,000,000
258 American Village Apartments $925,000
259 Greddy Industrial Building $815,000
260 Personal Storage 2 $800,000
261 107th St. Warehouse $795,000
262 17222 Armstrong Avenue $532,000
6
<PAGE>
MORTGAGE LOAN PURCHASE AGREEMENT
SCHEDULE OF MORTGAGE LOANS
(1) Loan No. refers to Loan Number as assigned in Appendix II of the
Prospectus Supplement.
(2) The Effective Maturity Date indentifies the Hyper-Amortization Date of the
Mortgage Loans as defined in the Prospectus Supplement.
7
