SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: December 19, 1996
(Date of earliest event reported)
MORTGAGE CAPITAL FUNDING, INC.
(Packager and Servicer)
(Issuer in Respect of
Multifamily/Commercial Mortgage Pass-Through Certificates Series 1996-MC2)
(Exact name of registrant as specified in charter)
Delaware 3-25068; 33-63924 13-3408716
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(State or other juris- (Commission (I.R.S. Employer
diction of organization) File Nos.) Identification No.)
399 Park Avenue, New York, New York 10043
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code (212) 793-5880
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(Former name, former address and former fiscal year, if changed since
last report.)
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Item 2. Acquisition or Disposition of Assets
Description of the Certificates and the Mortgage Pool
On December 19, 1996, a single series of certificates, entitled
Mortgage Capital Funding, Inc., Multifamily/Commercial Mortgage Pass-Through
Certificates, Series 1996-MC2 (the "Certificates"), was issued pursuant to a
pooling and servicing agreement (the "Pooling and Servicing Agreement"),
attached hereto as Exhibit 4.1, dated as of December 1, 1996, among Mortgage
Capital Funding, Inc., as Sponsor (the "Sponsor"), Citicorp Real Estate, Inc.,
as Mortgage Loan Seller ("CREI"), NationsBanc Mortgage Capital Corporation, as
Additional Warranting Party, GMAC Commercial Mortgage Corporation, as Master
Servicer and Special Servicer, LaSalle National Bank, as Trustee and REMIC
Administrator and ABN AMRO Bank N.V., as Fiscal Agent. The Certificates consist
of thirteen classes identified as the "Class X Certificates", the "Class A-1
Certificates", the "Class A-2 Certificates", the "Class A-3 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 R-I Certificates" and the
"Class R-II 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 130 conventional fixed-rate, multifamily and commercial mortgage loans
(the "Mortgage Loans"), having, as of the close of business on December 1, 1996
(the "Cut-off Date"), an aggregate principal balance of $458,055,542 (the
"Initial Pool Balance"), after taking into account all payments of principal due
on the Mortgage Loans on or before such date, whether or not received. The
Sponsor acquired the Trust Fund assets from CREI, an affiliate of the Sponsor,
pursuant to a mortgage loan purchase agreement (the "Mortgage Loan Purchase
Agreement") attached hereto as Exhibit 99.1, dated as of December 11, 1996,
between the Sponsor and CREI. The Sponsor sold the Class A-1, Class A-2, Class
A-3, Class B, Class C, Class D and Class E Certificates to Citibank and
NationsBanc Capital Markets, Inc. ("NCMI"), as underwriters (the
"Underwriters"), pursuant to an underwriting agreement (the "Underwriting
Agreement") dated December 11, 1996, attached hereto as Exhibit 1.1. The Sponsor
sold the Class X, Class F, Class G, Class H, Class R-I and Class R-II
Certificates to Citibank and NCMI, as initial purchasers pursuant to a
certificate purchase agreement (the "Certificate Purchase Agreement"), dated
December 11, 1996, attached hereto as Exhibit 1.2.
The Class A-1 Certificates have an initial stated principal balance (a
"Certificate Balance") of $132,607,079. The Class A-2 Certificates have an
initial Certificate Balance of $24,276,943. The Class A-3 Certificates have an
initial Certificate Balance of $166,045,134. The Class B Certificates have an
initial Certificate Balance of $27,483,332. The Class C Certificates have an
initial Certificate Balance of $22,902,777. The Class D Certificates have an
initial Certificate Balance of $18,322,221. The Class E Certificates have an
initial Certificate Balance of $11,451,388. The Class R-I and Class R-II
Certificates each have an initial Certificate Balance of $0.
Capitalized terms used herein and not otherwise defined shall have the
meanings assigned to them in the Pooling and Servicing Agreement.
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Item 7. Financial Statements and Exhibits
(a) Not applicable
(b) Not applicable
(c) Exhibits
Exhibit No. Description
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1.1 Underwriting Agreement dated December 11, 1996, among
Mortgage Capital Funding, Inc., as Sponsor and
Citibank, N.A. and NationsBanc Capital Markets, Inc.,
as Underwriters.
1.2 Certificate Purchase Agreement dated December 11, 1996,
among Mortgage Capital Funding, Inc., as Sponsor, and
Citibank, N.A. and NationsBanc Capital Markets, Inc.,
as initial purchasers.
4.1 Pooling and Servicing Agreement dated as of December 1,
1996, among Mortgage Capital Funding, Inc., as Sponsor,
Citicorp Real Estate, Inc., as Mortgage Loan Seller,
NationsBanc Mortgage Capital Corporation, as Additional
Warranting Party, GMAC Commercial Mortgage Corporation,
as Master Servicer and Special Servicer, LaSalle
National Bank, as Trustee and REMIC Administrator and
ABN AMRO Bank N.V., as Fiscal Agent.
99.1 Mortgage Loan Purchase Agreement dated as of December
11, 1996, between Mortgage Capital Funding, Inc., as
purchaser, and Citicorp Real Estate, Inc., as seller.
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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.
MORTGAGE CAPITAL FUNDING, INC.
(Registrant)
By: /s/ Richard L. Jarocki, Jr.
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Richard L. Jarocki, Jr.
Vice President
Dated: December 19, 1996
4
Mortgage Capital Funding, Inc.
$403,088,874 (Approximate)
Multifamily/Commercial
Mortgage Pass-Through Certificates, Series 1996-MC2
Class A-1, Class A-2, Class A-3, Class B, Class C, Class D and Class E
Underwriting Agreement
as of December 11, 1996
NationsBanc Capital Markets, Inc.
NationsBank Corporate Center, 11th Floor
100 North Tryon Street
Mail Code: NC1-007-11-07
Charlotte, North Carolina 28255
Citibank, N.A.
399 Park Avenue
New York, New York 10043
Ladies and Gentlemen:
Mortgage Capital Funding, Inc., a Delaware corporation ("MCFI"),
proposes to sell to NationsBanc Capital Markets, Inc. ("NationsBanc") and
Citibank, N.A. ("Citibank"; NationsBanc and Citibank, in such capacity, each an
"Underwriter" and, together, the "Underwriters"), the respective classes of
Multifamily/Commercial Mortgage Pass-Through Certificates, Series 1996-MC2 which
are identified on Schedule I hereto (collectively, the "Registered
Certificates"), in each case, having the initial aggregate stated principal
amount (a "Class Principal Balance") set forth on Schedule I. The Registered
Certificates, together with the Class X, Class F, Class G, Class H, Class R-I
and Class R-II Certificates issued therewith (the "Privately Offered
Certificates" and, collectively with the Registered Certificates, the
"Certificates"), evidence the entire beneficial ownership interest in the assets
of a trust fund (the "Trust Fund") to be formed by MCFI and consisting primarily
of a pool (the "Mortgage Pool") of commercial and multifamily mortgage loans
(the "Mortgage Loans") that will have, as of the close of business on December
1, 1996 (the "Cut-off Date"), after taking into account all payments of
principal due on the Mortgage Loans on or before such date, whether or not
received, an aggregate principal balance of $458,055,542 (subject to a variance
of plus or minus 5.0%). The Mortgage Loans (or the right to have such
transferred to the Trust Fund) will be acquired by MCFI from Citicorp Real
Estate, Inc. ("CREI"), pursuant to a mortgage loan purchase agreement, dated as
of the date hereof (the "Mortgage Loan Purchase Agreement"), between MCFI and
CREI. Certain of the Mortgage Loans will be acquired by CREI from NationsBanc
Mortgage Capital Corporation ("NMCC"; such Mortgage Loans, the "NMCC Mortgage
Loans"), pursuant to a mortgage loan purchase agreement, dated as of the date
hereof (the "NMCC Purchase Agreement"), between CREI and NMCC. Certain of the
Mortgage Loans will be acquired by CREI from PNC Bank, National Association
("PNC"; such Mortgage Loans, together with all other Mortgage Loans other than
the NMCC Mortgage Loans, the "CREI Mortgage Loans"), pursuant to a mortgage loan
purchase agreement, dated as of the date hereof (the "PNC Purchase Agreement"),
between CREI and PNC. Two separate real estate mortgage investment conduit
("REMIC") elections will be made with respect to the Trust Fund for federal
income tax purposes. The Trust Fund is to be created and the Certificates are to
be issued under a pooling and servicing agreement,
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dated as of December 1, 1996 (the "Pooling and Servicing Agreement"), among MCFI
as sponsor, CREI as mortgage loan seller (in such capacity, the "Mortgage Loan
Seller"), NMCC, as an additional warranting party, GMAC Commercial Mortgage
Corporation as master servicer (in such capacity, the "Master Servicer") and as
special servicer (in such capacity, the "Special Servicer"), LaSalle National
Bank as trustee (in such capacity, the "Trustee") and REMIC administrator (in
such capacity, the "REMIC Administrator"), and ABN AMRO Bank N. V. as fiscal
agent (the "Fiscal Agent").
1. Representations, Warranties and Covenants. MCFI represents and
warrants to, and covenants with, each of the Underwriters that:
(a) A registration statement (File No. 33-63924) on Form S-3 and a
registration statement (File No. 33-25068) on Form S-11 have been filed with the
Securities and Exchange Commission (the "Commission"), and each has become
effective under the Securities Act of 1933, as amended (the "Securities Act");
such registration statements include a prospectus which, as supplemented, shall
be, and may include a preliminary prospectus supplement which, as completed, is
proposed to be, used in connection with the sale of the Registered Certificates.
The registration statements, as amended to the date of this Agreement, are
collectively hereinafter referred to as the "Registration Statements"; such
prospectus (which shall be in the form in which it has most recently been filed,
as the same is proposed to be added to or changed), as first supplemented by a
prospectus supplement relating to the Registered Certificates, filed, or
transmitted for filing, with the Commission pursuant to Rule 424(b) under the
Securities Act and used in connection with the sale of the Registered
Certificates, is hereinafter referred to as the "Prospectus"; and such
prospectus supplement is hereinafter referred to as the "Prospectus Supplement".
Any preliminary form of Prospectus which has heretofore been filed pursuant to
Rule 424 hereinafter is called the "Preliminary Prospectus". Any reference
herein to the terms "amend", "amendment" or "supplement" with respect to the
Registration Statements or the Prospectus shall be deemed to refer to and
include the filing of any document under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), deemed to be incorporated by reference therein
after the date hereof. MCFI will file with the Commission (i) within fifteen
days of the issuance of the Certificates a Current Report on Form 8-K (for
purposes of filing the Pooling and Servicing Agreement and other material
contracts) and (ii) in the time period specified in Section 5(e) hereof, a
Current Report on Form 8-K (for purposes of filing certain Computational
Materials and ABS Term Sheets as described in Section 5(e) hereof).
(b) The Registration Statements, as of the respective dates they
became effective, and the Prospectus, as of the date of the Prospectus
Supplement, and any revisions or amendments thereof or supplements thereto filed
prior to the termination of the offering of the Registered Certificates, as of
their respective effective or issue dates, conformed or will conform in all
material respects to the requirements of the Securities Act and the rules and
regulations of the Commission thereunder applicable to the use of such documents
as of such respective dates, and the Registration Statements and the Prospectus,
as revised, amended or supplemented as of the Closing Date (as defined in
Section 3), will conform in all material respects to the requirements of the
Securities Act and the rules and regulations of the Commission thereunder
applicable to the use of such documents as of the Closing Date; and no such
document, as of such respective dates and, in the case of the Prospectus and any
revisions or amendments thereof or supplements thereto filed prior to the
Closing Date, as of the Closing Date, included or will include any untrue
statement of a material fact or omitted or will omit to state a material fact
necessary to make the statements therein in the light of the circumstances under
which they were made, not misleading; provided, however, that MCFI does not make
any representations, warranties or agreements (i) to Citibank as to (A) the
information contained in or omitted from the Prospectus or any revision or
amendment thereof or supplement thereto in reliance upon and in conformity with
information furnished in writing by Citibank to MCFI specifically for use in
connection with the preparation of the Prospectus or any revision or amendment
thereof or supplement thereto or (B) any information in any Computational
Materials and ABS Term Sheets (each as defined in Section 9) provided by
Citibank specifically for use
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in the preparation thereof in connection with the sale of the Registered
Certificates or (ii) to NationsBanc as to (A) the information contained in or
omitted from the Prospectus or any revision or amendment thereof or supplement
thereto in reliance upon and in conformity with information furnished in writing
by NationsBanc specifically for use in connection with the preparation of the
Prospectus or any revision or amendment thereof or supplement thereto or (B) any
information in any Computational Materials and ABS Term Sheets provided by
NationsBanc specifically for use in the preparation thereof in connection with
the sale of the Registered Certificates. There are no contracts or other
documents relating to MCFI of a character required to be described in or to be
filed as exhibits to the Registration Statements, as of the date of the
Prospectus Supplement, which were not described or filed as required.
(c) As of the Closing Date, the Registered Certificates will be duly
authorized, executed and delivered and, assuming authentication in the manner
contemplated in the Pooling and Servicing Agreement, will be validly issued and
outstanding and entitled to the benefits provided by the Pooling and Servicing
Agreement.
(d) KPMG Peat Marwick is an independent public accountant with respect
to MCFI as required by the Securities Act and the rules and regulations
thereunder.
(e) As of the Closing Date, the Pooling and Servicing Agreement will
have been duly authorized, executed and delivered by MCFI and, assuming the
valid authorization, execution and delivery thereof by the other parties
thereto, will constitute a valid and binding agreement of MCFI enforceable in
accordance with its terms, except as the same may be limited by bankruptcy,
insolvency, reorganization or other laws relating to or affecting the
enforcement of creditors' rights and by general principles of equity.
(f) This Agreement has been duly authorized, executed and delivered by
MCFI and, assuming the valid authorization, execution and delivery hereof by
each of the Underwriters, constitutes a valid and binding obligation of MCFI
enforceable in accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, reorganization or other laws relating to or affecting
the enforcement of creditors' rights, by general principles of equity and by
public policy considerations underlying the securities laws, to the extent that
such public policy considerations limit the enforceability of the provisions of
this Agreement that purport to provide indemnification for securities laws
liabilities.
(g) MCFI has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its business as
described in the Prospectus.
(h) MCFI is not aware of (i) any request by the Commission for any
further amendment of the Registration Statements or the Prospectus or for any
additional information, (ii) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statements or the institution
or threatening of any proceeding for that purpose or (iii) any notification with
respect to the suspension of the qualification of the Registered Certificates
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose.
(i) The Registered Certificates and the Pooling and Servicing
Agreement conform in all material respects to the descriptions thereof contained
in the Prospectus.
(j) The issuance and sale of the Registered Certificates to the
Underwriters pursuant to this Agreement, the compliance by MCFI with the other
provisions of this Agreement, the Pooling and Servicing Agreement and the
Registered Certificates and the consummation of the other transactions
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herein or therein contemplated do not, under any statute, regulation or rule of
general applicability or any decision, order, decree or judgment of any judicial
or other governmental body specifically applicable to MCFI, require any consent,
approval, authorization, order, registration or qualification of or with any
court or governmental authority, except (i) such as have been obtained or
effected under the Securities Act (provided that MCFI makes no representations
or warranties as to any consent, approval, authorization, registration or
qualification which may be required under state securities or Blue Sky laws),
(ii) the recordation of the assignments of the Mortgage Loans to the Trustee,
which recordation is to be completed pursuant to the Pooling and Servicing
Agreement on or following the Closing Date, and (iii) such other approvals as
have been obtained.
(k) Neither the execution and delivery of this Agreement and the
Pooling and Servicing Agreement, nor the issuance and delivery of the Registered
Certificates, nor the consummation of any other of the transactions contemplated
herein or therein, nor the fulfillment of the terms of this Agreement and the
Pooling and Servicing Agreement, will conflict with, violate, result in a breach
of or constitute a default under the certificate of incorporation or by-laws of
MCFI, any statute or regulation currently applicable to MCFI, or any order
currently applicable to MCFI of any court, regulatory body, administrative
agency or governmental body having jurisdiction over MCFI, or the terms of any
indenture or other agreement or instrument to which MCFI is a party or by which
it or any of its properties are bound.
(l) There are no actions or proceedings against, or investigations of,
MCFI pending or, to the knowledge of MCFI, threatened, before any court,
administrative agency or other tribunal (i) asserting the invalidity of this
Agreement, the Pooling and Servicing Agreement or the Registered Certificates,
(ii) seeking to prevent the issuance of the Registered Certificates or the
consummation of any of the transactions contemplated by this Agreement or the
Pooling and Servicing Agreement, (iii) that might materially and adversely
affect the performance by MCFI of its obligations under, or the validity or
enforceability of, this Agreement, the Pooling and Servicing Agreement or the
Registered Certificates or (iv) seeking to affect adversely the federal income
tax attributes of the Registered Certificates described in the Prospectus.
(m) MCFI is not, and the issuance and sale of the Registered
Certificates in the manner contemplated by the Prospectus will not cause MCFI to
be, subject to registration or regulation as an investment company or affiliate
of an investment company under the Investment Company Act of 1940, as amended
(the "Investment Company Act").
(n) The transfer of the Mortgage Loans to the Trust Fund and the sale
of the Certificates to the Underwriters, at the Closing Date, will be treated by
MCFI for financial accounting and reporting purposes as a sale of assets and not
as a pledge of assets to secure debt.
2. Purchase and Sale. Subject to the terms and conditions and in
reliance on the representations and warranties herein set forth, MCFI agrees to
sell to each of Citibank and NationsBanc, and Citibank and NationsBanc each
agrees to purchase from MCFI, the portions of the Class Principal Balances of
the respective classes of Registered Certificates set forth on Schedule I
hereto, at the purchase price for each such class as set forth on Schedule I.
3. Delivery and Payment. Delivery of and payment for the Registered
Certificates shall be made in the manner specified below, on the date and at the
time specified in Schedule I hereto, which date and time may be changed by
agreement among the Underwriters and MCFI (such date and time of delivery of and
payment for the Registered Certificates being hereinafter referred to as the
"Closing Date"). Delivery of each Underwriter's allotment of the Registered
Certificates shall be made to the
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related Underwriter against payment by such Underwriter of the purchase price
therefor to or upon the order of MCFI in same-day funds by federal funds wire
(or by such other method as such Underwriter and MCFI may agree). Unless
delivery is made through the facilities of The Depository Trust Company, the
Registered Certificates of each class thereof shall be registered in such names
and in such authorized denominations as the related Underwriter may have
requested not less than three full business days prior to the Closing Date.
MCFI agrees to have the Registered Certificates available for
inspection, checking and packaging in New York, New York, at any time before
3:00 p.m. New York City time on the business day prior to the Closing Date.
4. Offering by Underwriters. It is understood that the Underwriters
propose to offer the Registered Certificates for sale as set forth in the
Prospectus, and each Underwriter covenants and agrees that all offers and sales
by such Underwriter shall be made in compliance with the terms of the No-Action
Letters (as defined in Section 9 below). It is further understood that MCFI, in
reliance upon a no-filing letter from the Attorney General of the State of New
York granted pursuant to Policy Statement 105, has not filed and will not file
an offering statement pursuant to Section 352-c of the General Business Law of
the State of New York with respect to the Registered Certificates. As required
by Policy Statement 105, each Underwriter therefore covenants and agrees with
MCFI that sales of the Registered Certificates made by such Underwriter in and
from the State of New York will be made only to institutional investors within
the meaning of Policy Statement 105.
5. Agreements. MCFI agrees with each of the Underwriters that:
(a) MCFI will not file any amendment to the Registration Statements
prior to the Closing Date, and will not file any supplement to the Prospectus
relating to or affecting the Registered Certificates at any time, except as
contemplated by Section 5(e) or unless MCFI has furnished a copy to each
Underwriter for its review prior to filing, and will not file any such proposed
amendment or supplement to which either Underwriter reasonably objects. Subject
to the foregoing sentence, MCFI will cause the Prospectus to be filed, or
transmitted for filing, with the Commission pursuant to Rule 424(b) under the
Securities Act and will promptly advise each Underwriter when the Prospectus has
been so filed, or transmitted for filing, and, prior to the termination of the
offering of the Registered Certificates, will also promptly advise each
Underwriter (i) when any amendment to the Registration Statements relating to
the Registered Certificates has become effective or any revision of or
supplement to the Prospectus has been so filed or transmitted for filing, (ii)
of any request by the Commission for any amendment of the Registration
Statements or the Prospectus or for any additional information, (iii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statements or the institution or threatening of any proceeding for
that purpose and (iv) of the receipt by MCFI of any notification with respect to
the suspension of the qualification of the Registered Certificates for sale in
any jurisdiction or the institution or threatening of any proceeding for such
purpose. MCFI will use its best efforts to prevent the issuance of any such stop
order and, if issued, to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Registered
Certificates is required to be delivered under the Securities Act, (i) any event
occurs as a result of which the Prospectus, as then amended or supplemented,
would include any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein in light of the
circumstances under which they were made not misleading, or (ii) it shall be
necessary to revise, amend or supplement the Prospectus to comply with the
Securities Act or the rules and regulations of the Commission thereunder, MCFI
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promptly will prepare and file with the Commission, subject to paragraph (a) of
this Section 5, a revision, amendment or supplement which will correct such
statement or omission or effect such compliance.
(c) MCFI will furnish to each Underwriter and counsel for such
Underwriter, without charge, signed (if available) copies of the Registration
Statements (including exhibits thereto) and, so long as delivery of a prospectus
relating to the Registered Certificates is required under the Securities Act, as
many copies of the Prospectus and any revisions or amendments thereof or
supplements thereto as may be reasonably requested.
(d) MCFI will use its best efforts to arrange for the qualification of
the Registered Certificates for sale under the laws of such jurisdictions as the
Underwriters may designate, to maintain such qualifications in effect so long as
required for the distribution of the Registered Certificates and to arrange for
the determination of the legality of the Registered Certificates for purchase by
institutional investors; provided, however, that MCFI shall not be required to
qualify to do business in any jurisdiction where it is not now so qualified or
to take any action which would subject it to general or unlimited service of
process in any jurisdiction where it is not now so subject.
(e) MCFI will cause or, if appropriate, will have caused any
Computational Materials and ABS Term Sheets (each as defined in Section 9) with
respect to the Registered Certificates, which are delivered by the Underwriters
to MCFI pursuant to or as contemplated by Section 9, to be filed with the
Commission on a Current Report on Form 8-K (the "Current Report") pursuant to
Rule 13a-11 under the Exchange Act not later than, in each such case, the
business day immediately following the later of (i) the day on which such
Computational Materials or ABS Term Sheets are delivered to counsel for MCFI by
the Underwriters (it being understood that any such material that is delivered
after 10:30 a.m., New York City time, on a business day shall be deemed to have
been delivered on the next business day) and (ii) the date hereof, and will
promptly advise the Underwriters when each such Current Report has been so
filed. Each such Current Report shall be incorporated by reference in the
Prospectus and the Registration Statements. Notwithstanding the two preceding
sentences, MCFI shall have no obligation to file materials provided by the
Underwriters pursuant to or as contemplated by Section 9 which, in the
reasonable determination of MCFI after making reasonable efforts to consult with
the Underwriters, are not required to be filed pursuant to the No-Action Letters
(as defined in Section 9 below), or which contain erroneous information or
contain any untrue statement of a material fact, or which, when read in
conjunction with the Prospectus, omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; it
being understood, however, that MCFI shall have no obligation to review or pass
upon the accuracy or adequacy of, or to correct, any Computational Materials or
ABS Term Sheets provided by the Underwriters to MCFI pursuant to or as
contemplated by Section 9 hereof.
(f) MCFI will make generally available to Registered
Certificateholders as soon as practicable, but in any event not later than
eighteen months after the filing of the Prospectus pursuant to Rule 424(b) under
the Securities Act, an earnings statement (which need not be audited) with
respect to the Mortgage Pool complying with Section 11(a) of the Securities Act
and the rules and regulations of the Commission thereunder (including at the
option of MCFI, Rule 158) which may be the annual report filed with the
Commission and delivered to Registered Certificateholders pursuant to the
Pooling and Servicing Agreement.
6. Conditions to the Obligations of each Underwriter and MCFI. The
obligation of each Underwriter to purchase, and the obligation of MCFI to sell
to such Underwriter, its allotment of the Registered Certificates shall be
subject to the accuracy of the representations and warranties on the part of
MCFI and such Underwriter contained herein as of the date hereof and as of the
Closing Date, to the
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accuracy of the statements of MCFI and such Underwriter made in any officer's
certificate pursuant to the provisions hereof, to the performance by MCFI and
such Underwriter of their respective obligations hereunder and to the following
additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statements shall have been issued and no proceedings for that purpose shall have
been instituted and be pending or shall have been threatened.
(b) MCFI shall have furnished to such Underwriter:
(i) An executed copy of the Pooling and Servicing Agreement;
(ii) An opinion of Stephen E. Dietz, Esq., counsel to MCFI, dated
the Closing Date, substantially to the effect that:
(A) MCFI is validly existing as a corporation in good
standing under the laws of the State of Delaware, with corporate
power and authority under such laws to own its properties and
assets and conduct its business as described in the Prospectus;
(B) The Registered Certificates have been duly authorized,
executed and delivered and, assuming authentication in the manner
contemplated in the Pooling and Servicing Agreement, are validly
issued and outstanding and entitled to the benefits provided by
the Pooling and Servicing Agreement;
(C) The Pooling and Servicing Agreement has been duly
authorized, executed and delivered by MCFI;
(D) The Pooling and Servicing Agreement constitutes a valid
and legally binding agreement of MCFI and is enforceable against
it in accordance with its terms, except as the same may be
limited by bankruptcy, insolvency, reorganization or other
similar laws relating to or affecting the enforcement of
creditor's rights generally and by general principles of equity;
(E) The Pooling and Servicing Agreement is not required to
be qualified under the Trust Indenture Act of 1939, as amended,
and the Trust Fund is not required to be registered under the
Investment Company Act of 1940, as amended;
(F) The Registration Statements have become effective under
the Securities Act, and, to the best of such counsel's knowledge,
no stop order suspending the effectiveness of either of the
Registration Statements has been issued and no proceedings for
that purpose have been instituted and are pending or have been
threatened under the Securities Act;
(G) Each of the Registration Statements, at the time such
Registration Statement became effective, and the Prospectus, as
of the date of the Prospectus Supplement, and each revision or
amendment thereof or supplement thereto relating to the
Registered Certificates, as of its effective or issue date
(except in each case for accounting, financial and statistical
statements included therein or omitted therefrom, as to which
such counsel expresses no opinion), appeared on their respective
faces to be appropriately responsive in all material respects to
the requirements of the Securities Act
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and the rules and regulations of the Commission thereunder
applicable to such documents as of such respective dates; and the
Prospectus, as revised, amended or supplemented as of the date
hereof (except for accounting, financial and statistical
statements included therein or omitted therefrom, as to which
such counsel expresses no opinion), conforms in all material
respects to the requirements of the Securities Act and the rules
and regulations of the Commission thereunder applicable to use of
the Prospectus (as so revised, amended, or supplemented) as of
the date hereof;
(H) The descriptions in the Prospectus, as of the date
hereof, of the Registered Certificates and the Pooling and
Servicing Agreement are, to the extent that such descriptions
constitute statements of matters of law or legal conclusions with
respect thereto, accurate in all material respects;
(I) Such counsel does not know of any contracts or other
documents relating to MCFI of a character required to be
described in or to be filed as exhibits to the Registration
Statements, as of the date of the Prospectus Supplement, which
were not described or filed as required; and
(J) This Agreement has been duly authorized, executed and
delivered by MCFI.
In giving his opinion, counsel to MCFI, Stephen E. Dietz, Esq., shall
additionally state that, based on conferences and telephone conversations with
representatives of CREI, NMCC, PNC Bank, the Underwriters, Citibank, MCFI, the
Trustee, the REMIC Administrator, the Fiscal Agent, the Master Servicer, the
Special Servicer and their respective counsel, and without having reviewed any
of the mortgage notes, mortgages or other documents relating to the Mortgage
Loans or made any inquiry of any originator of any Mortgage Loan not referenced
above, nothing has come to such counsel's attention that would lead him to
believe that the Prospectus (except for any accounting, financial or statistical
information included therein, for information relating to the Master Servicer,
the Special Servicer, the REMIC Administrator, the Trustee and the Fiscal Agent
contained in or omitted from the Prospectus, and for information with respect to
the NMCC Mortgage Loans contained in or omitted from the Prospectus, all as to
which such counsel has not been requested to comment), at the date of the
Prospectus Supplement or at the Closing Date, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
Such opinion may express its reliance as to factual matters on the
representations and warranties made by, and on certificates or other
documents furnished by officers and/or authorized representatives of, the
parties to this Agreement and the Pooling and Servicing Agreement and on
certificates furnished by public officials. Such opinion may assume the due
authorization, execution and delivery of the instruments and documents
referred to therein by the parties thereto other than MCFI and CREI. Such
opinion may be qualified as an opinion only on the General Corporation Law
of the State of Delaware, the laws of each state in which the writer of the
opinion is admitted to practice law and the federal law of the United
States.
(iii) One or more opinions, dated the Closing Date, of Thacher
Proffitt & Wood, special counsel to MCFI, substantially to the effect that:
(A) The statements in the Prospectus under the headings "ERISA
Considerations", "Material Federal Income Tax Consequences" and
"Certain Federal
<PAGE>
-9-
Income Tax Consequences", to the extent that they constitute matters
of New York or federal law or legal conclusions with respect thereto,
provide a fair and accurate summary of such law and conclusions; and
(B) As described in the Prospectus Supplement and assuming
compliance with the provisions of the Pooling and Servicing Agreement,
(1) REMIC I will qualify as a real estate mortgage investment conduit
(a "REMIC") within the meaning of Sections 860A through 860G (the
"REMIC Provisions") of the Internal Revenue Code of 1986, and the
REMIC I Regular Interests will be "regular interests" and the Class
R-I Certificates will evidence the sole class of "residual interests"
in REMIC I (as both terms are defined in the REMIC Provisions in
effect on the Closing Date), and (2) REMIC II will qualify as a REMIC
within the meaning of the REMIC Provisions, and the Class X, Class
A-1, Class A-2, Class A-3, Class B, Class C, Class D, Class E, Class
F, Class G and Class H Certificates will evidence "regular interests"
and the Class R-II Certificates will evidence the sole class of
"residual interests" in REMIC II.
In giving its opinions, special counsel to MCFI, Thacher Proffitt &
Wood, shall additionally state that, based on conferences and telephone
conversations with representatives of CREI, NMCC, PNC Bank, the Underwriters,
Citibank, MCFI, the Trustee, the Fiscal Agent, the REMIC Administrator, the
Master Servicer, the Special Servicer and their respective counsel, and without
having reviewed any of the mortgage notes, mortgages or other documents relating
to the Mortgage Loans or made any inquiry of any originator of any Mortgage Loan
not referenced above, nothing has come to such special counsel's attention that
would lead it to believe that the Prospectus (other than any accounting,
financial, statistical information included therein, for information relating to
the Master Servicer, the Special Servicer, the REMIC Administrator, the Trustee
and the Fiscal Agent contained in or omitted from the Prospectus, and for
information with respect to the NMCC Mortgage Loans contained in or omitted from
the Prospectus, all as to which such counsel has not been requested to comment),
at the date of the Prospectus Supplement or at the Closing Date, included or
includes an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
Such opinion may express its reliance as to factual matters on the
representations and warranties made by, and on certificates or other
documents furnished by officers and/or authorized representatives of, the
parties to this Agreement and the Pooling and Servicing Agreement and on
certificates furnished by public officials. Such opinion may assume the due
authorization, execution and delivery of the instruments and documents
referred to therein by the parties thereto other than MCFI. Such opinion
may be qualified as an opinion only on the General Corporation Law of the
State of Delaware, the laws of each state in which the writer of the
opinion is admitted to practice law and the federal law of the United
States.
(iv) Such Underwriter shall have received copies of all legal opinion
letters delivered by Thacher Proffitt & Wood to the Rating Agencies in
connection with the issuance of the Registered Certificates, accompanied in
each case by a letter signed by Thacher Proffitt & Wood stating that such
Underwriter may rely on such opinion letter as if it were addressed to such
Underwriter as of the date thereof;
(v) A good standing certificate regarding MCFI from the Secretary of
State of the State of Delaware, dated not earlier than 30 days prior to the
Closing Date;
<PAGE>
-10-
(vi) A certificate of MCFI, dated the Closing Date and signed by an
executive officer or authorized signatory of MCFI, to the effect that the
representations and warranties of MCFI herein are true and correct in all
material respects on and as of the Closing Date with the same effect as if
made on the Closing Date, and MCFI has complied in all material respects
with all agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date; and
(vii) An officer's certificate, dated the Closing Date and signed by
the Secretary or an assistant secretary of MCFI, to the effect that each
individual who, as an officer or representative of MCFI, signed this
Agreement, the Pooling and Servicing Agreement or any other document or
certificate delivered on or before the Closing Date in connection with the
transactions contemplated herein or in the Pooling and Servicing Agreement,
was at the respective times of such signing and delivery, and is as of the
Closing Date, duly elected or appointed, qualified and acting as such
officer or representative, and the signatures of such persons appearing on
such documents and certificates are their genuine signatures. Such
certificate shall be accompanied by true and complete copies (certified as
such by the Secretary or an assistant secretary of MCFI) of the certificate
of incorporation and by-laws of MCFI, as in effect on the Closing Date, and
of the resolutions of MCFI and any required shareholder consent relating to
the transactions contemplated in this Agreement and the Pooling and
Servicing Agreement.
(c) The Underwriters shall have received, with respect to each of the
Mortgage Loan Seller, NMCC, the Master Servicer, the Special Servicer, the
Fiscal Agent, the Trustee and the REMIC Administrator, a favorable opinion of
counsel, dated the Closing Date, addressing the valid existence of such party
under the laws of the jurisdiction of its organization, the due authorization,
execution and delivery of the Pooling and Servicing Agreement by such party and,
subject to the same limitations as set forth in Section 6(b)(ii)(D), the
enforceability of the Pooling and Servicing Agreement against such party. Such
opinion may express its reliance as to factual matters on representations and
warranties made by, and on certificates or other documents furnished by officers
and/or authorized representatives of parties to this Agreement and the Pooling
and Servicing Agreement and on certificates furnished by public officials. Such
opinion may assume the due authorization, execution and delivery of the
instruments and documents referred to therein by the parties thereto other than
the party on behalf of which such opinion is being rendered. Such opinion may be
qualified as an opinion only on the General Corporation Law of the State of
Delaware (if relevant), the laws of each state in which the writer of the
opinion is admitted to practice law and the federal law of the United States.
(d) MCFI and the Underwriters shall have received from KPMG Peat
Marwick, certified public accountants, various comfort letters, dated, as
applicable, [the date of the preliminary Prospectus Supplement or the date of
the Prospectus Supplement], in form and substance reasonably satisfactory to
MCFI and the Underwriters, stating in effect that:
(i) They have performed certain specified procedures as a result of
which they have determined that the information of an accounting, financial
or statistical nature set forth in the Prospectus Supplement under the
caption "Description of the Mortgage Pool" and on Annex A thereto agrees
with the data sheet or computer tape prepared by the Mortgage Loan Seller
and NMCC, unless otherwise noted in such letter; and
(ii) They have compared the data contained in the data sheet or
computer tape referred to in the immediately preceding clause (i) to
information contained in an agreed upon sampling of the Mortgage Loan files
and in such other sources as shall be specified by them, and found such
data and information to be in agreement, unless otherwise noted in such
letter.
<PAGE>
-11-
(e) MCFI and the Underwriters shall have received from KPMG Peat
Marwick, certified public accountants, a letter dated December 11, 1996, in form
and substance reasonably satisfactory to MCFI and the Underwriters, to the
effect that they have performed certain specified procedures, all of which have
been agreed to by MCFI and the Underwriters, as a result of which they confirmed
the information of an accounting, financial or statistical nature included in
the Prospectus Supplement under the caption "Yield and Maturity Considerations".
(f) Such Underwriter shall have delivered to MCFI and to the other
Underwriter an officer's certificate (i) stating that attached thereto are all
of the information, tables, charts and other items that constitute
"Computational Materials" or "ABS Term Sheets" prepared by such Underwriter
which are required to be filed with the Commission pursuant to the terms of the
No-Action Letters and stating that such Underwriter has otherwise complied with
the terms of the No-Action Letters and (ii) representing that (A) other than the
items described in clause (i), no term sheets, collateral information or other
data in written form that would be required to be filed with the Commission
pursuant to the No-Action Letters were furnished by such Underwriter to actual
or potential investors for the Registered Certificates prior to the Closing Date
and (B) to the best knowledge of such officer, the items described in clause (i)
do not include any untrue or misleading statement of a material fact nor, when
taken together with the Prospectus, and in the light of the circumstances in
which the statements in such items were made, omit to state any material fact
required to be stated in such items or necessary to make the statements
contained in such items not misleading.
(g) KPMG Peat Marwick shall have furnished to MCFI and such
Underwriter a letter or letters, each in form and substance satisfactory to
MCFI, relating to the Computational Materials and ABS Terms Sheets of such
Underwriter filed in accordance with Section 5(e) and dated the date of the
related Current Report on Form 8-K and stating in effect that:
(i) using the assumptions and methodology used by such
Underwriter, all of which shall be described by reference in the
letter, they have recalculated the numerical data and dates set forth
in such Computational Materials and ABS Term Sheets of such
Underwriter (or portions thereof) attached to such letter, compared
the results of their calculations to the corresponding items in such
Computational Materials and ABS Term Sheets (or portions thereof) and
found such items to be in agreement with the respective results of
such calculation;
(ii) if such Computational Materials and ABS Term Sheets include
data reflecting the distribution of interest at other than a fixed
rate, or reflecting other characteristics which give rise to the use
of tables in such Computational Materials and ABS Term Sheets, such
letter shall also set forth such other statements as are customarily
set forth by KPMG Peat Marwick in such letter with respect to such
data; and
(iii) they have performed certain specified procedures as a
result of which they have determined that the information of an
accounting, financial or statistical nature set forth in such
Computational Materials and ABS Term Sheets agrees with the data sheet
or computer tape prepared by the Mortgage Loan Seller or NMCC, unless
otherwise indicated in such letter.
(h) MCFI and the Underwriters shall have received an opinion of
counsel, dated the Closing Date, from Cadwalader, Wickersham & Taft, stating
that, based on conferences and telephone conversations with representatives of
CREI, NMCC, PNC Bank, the Underwriters, Citibank, MCFI, the Trustee, the REMIC
Administrator, the Fiscal Agent, the Master Servicer, the Special Servicer and
their respective counsel, and (with limited exception) without having reviewed
any of the mortgage notes, mortgages or other documents relating to the Mortgage
Loans or made any inquiry of any originator of
<PAGE>
-12-
any Mortgage Loan not referenced above, nothing has come to such counsel's
attention that would lead him to believe that the Prospectus (except for any
accounting, financial or statistical information included therein, for
information relating to the Master Servicer, the Special Servicer, the REMIC
Administrator, the Fiscal Agent and the Trustee contained in or omitted from the
Prospectus, and for information with respect to the CREI Mortgage Loans
contained in or omitted from the Prospectus, all as to which such counsel has
not been requested to comment), at the date of the Prospectus Supplement or at
the Closing Date, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(i) Subsequent to the date hereof, there shall not have occurred any
change, or any development involving a prospective change, in or affecting the
business or properties of MCFI which such Underwriter concludes, in the judgment
of such Underwriter after consultation with MCFI, materially impairs the
investment quality of the Registered Certificates so as to make it impractical
or inadvisable to proceed with the public offering or the delivery of the
Registered Certificates as contemplated by the Prospectus.
(j) The Registered Certificates shall have been assigned ratings no
less than those set forth on Schedule I and such ratings shall not have been
rescinded.
7. Indemnification and Contribution. (a) MCFI agrees to indemnify and
hold harmless each Underwriter and each person who controls such Underwriter
within the meaning of either the Securities Act or the Exchange Act against any
and all losses, claims, damages or liabilities, joint or several, to which it or
any of them may become subject under the Securities Act, the Exchange Act, or
other federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statements or in the
Prospectus, or in any revision or amendment thereof or supplement thereto, or in
any other filing incorporated by reference therein, or arise out of or are based
upon the omission or alleged omission (in the case of any Computational
Materials or ABS Term Sheets in respect of which MCFI agrees to indemnify any
Underwriter, as set forth below, when such are read in conjunction with the
Prospectus) to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and agrees to reimburse each such
indemnified party for any legal or other expenses reasonably incurred by it or
him in connection with investigating or defending any such loss, claim, damage,
liability or action; provided that MCFI will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon (i) any such untrue statement or alleged untrue statement or omission
or alleged omission made in the Prospectus or any revision or amendment thereof
or supplement thereto in reliance upon and in conformity with written
information furnished to MCFI by or on behalf of such Underwriter (in whatever
capacity) specifically for use in connection with the preparation thereof, (ii)
any such untrue statement or alleged untrue statement or omission or alleged
omission that is covered by the indemnification provided by NMCC pursuant to the
NMCC Purchase Agreement; (iii) any such untrue statement or alleged untrue
statement made in Computational Materials or ABS Term Sheets of such Underwriter
incorporated therein as a result of any filing pursuant to Section 5(e) (except
to the extent any such untrue statement or alleged untrue statement therein
results (or is alleged to have resulted) directly from an error (a "Collateral
Error") in the information concerning the Mortgage Loans furnished by MCFI to
any Underwriter in writing or by electronic transmission that was used in the
preparation of such Computational Materials or ABS Term Sheets), (iv) any
omission or alleged omission to state in Computational Materials or ABS Term
Sheets of such Underwriter incorporated by reference into the Registration
Statements or Prospectus as a result of any filing pursuant to Section 5(e), a
material fact
<PAGE>
-13-
that, when read in conjunction with the Prospectus, is required to be stated
therein or necessary to make the statements therein not misleading, or (v) any
breach, inaccuracy or untruth of any of the statements, representations,
warranties and/or covenants made by such Underwriter and set forth in Section
6(f) and/or Section 9(b); and provided further that such indemnity with respect
to any Collateral Error shall not inure to the benefit of any Underwriter (or
any person controlling any Underwriter) from whom the person asserting any loss,
claim, damage or liability received any Computational Materials or ABS Term
Sheets that were prepared on the basis of such Collateral Error, if, prior to
the time of confirmation of the sale of Registered Certificates to such person,
MCFI notified such Underwriter in writing of the Collateral Error or provided in
written or electronic form information superseding or correcting such Collateral
Error (in any such case, a "Corrected Collateral Error"), and such Underwriter
failed to notify such person thereof or to deliver such person corrected
Computational Materials and/or ABS Term Sheets, as applicable. This indemnity
agreement will be in addition to any liability which MCFI may otherwise have.
(b) Each Underwriter, severally and not jointly, agrees to indemnify
and hold harmless MCFI and each of its directors, each of its officers who
signed the Registration Statements or any amendments thereof, and each person
who controls MCFI within the meaning of either the Securities Act or the
Exchange Act, to the same extent as the foregoing indemnities from MCFI to the
Underwriters, but only with reference to (i) written information furnished to
MCFI by or on behalf of such Underwriter, specifically for use in connection
with the preparation of the Prospectus or any revision or amendment thereof or
supplement thereto, (ii) any untrue statement or alleged untrue statement or
omission or alleged omission made in Computational Materials or ABS Term Sheets
of such Underwriter incorporated by reference into the Registration Statements
or Prospectus as a result of any filing pursuant to Section 5(e) (except that no
such indemnity shall be available for any losses, claims, damages or
liabilities, or actions in respect thereof resulting from any Collateral Error,
other than a Corrected Collateral Error) and (iii) any breach, inaccuracy or
untruth of any of the statements, representations, warranties and/or covenants
set forth in Section 6(f) and/or Section 9(b). This indemnity agreement will be
in addition to any liability which the Underwriters may otherwise have. MCFI
acknowledges that with respect to Citibank and NationsBanc, the statements set
forth in the first, third and fourth sentences of the final paragraph of the
cover page of the Prospectus Supplement and in the first sentence of the second
paragraph and the first two sentences of the third paragraph under the heading
"Method of Distribution" in the Prospectus Supplement constitute the only
information furnished in writing by or on behalf of Citibank or NationsBanc, as
the case may be, for inclusion in the Prospectus or any revision or amendment
thereof or supplement thereto, and each Underwriter confirms that such
statements attributable thereto are correct.
(c) Promptly after receipt by an indemnified party under this Section
7 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 7, notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve the
indemnifying party from any liability which it may have to any indemnified party
otherwise than under this Section 7; provided, however, that any increase in
such liability as a result of such failure to notify shall not be an expense of
the indemnifying party. In case any such action is brought against any
indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein, and to
the extent that it may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such indemnified party,
to assume the defense thereof, with counsel satisfactory to such indemnified
party; provided that, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying
<PAGE>
-14-
party, the indemnified party or parties shall have the right to select separate
counsel to assert such legal defenses and to otherwise participate in the
defense of such action on behalf of such indemnified party or parties. Upon
receipt of notice from the indemnifying party to such indemnified party of its
election so to assume the defense of such action and approval by the indemnified
party of counsel, the indemnifying party will not be liable to such indemnified
party in connection with the defense thereof unless (i) the indemnified party
shall have employed separate counsel in connection with the assertion of legal
defenses in accordance with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party shall not be liable for the
expenses of more than one separate counsel, approved by the indemnified party or
parties, representing the indemnified party or parties who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party; and except that, if clause (i)
or (iii) is applicable, such liability shall be only in respect of the counsel
referred to in such clause (i) or (iii).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 7 is due
in accordance with its terms but is for any reason held by a court to be
unavailable on grounds of policy or otherwise, MCFI and the related Underwriter
shall each contribute to the aggregate losses, claims, damages and liabilities
(including legal and other expenses reasonably incurred in connection with
investigating or defending same) to which MCFI and such Underwriter may be
subject in such proportion so that such Underwriter is responsible for 0.5%
thereof and MCFI is responsible for the balance; provided that no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 7,
each person who controls an Underwriter within the meaning of either the
Securities Act or the Exchange Act shall have the same rights to contribution as
such Underwriter, and each person who controls MCFI within the meaning of either
the Securities Act or the Exchange Act, each officer of MCFI who shall have
signed the Registration Statements or any amendments thereof and each director
of MCFI shall have the same rights to contribution as MCFI. Any party entitled
to contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under this paragraph
(d), notify such party or parties from whom contribution may be sought, but the
omission to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any other obligation it or
they may have hereunder or otherwise than under this paragraph (d).
(e) The Underwriters further agree as follows:
(i) Citibank will indemnify and hold harmless NationsBanc against
any losses, claims, damages or liabilities to which NationsBanc may
become subject, under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities arise out of or are based upon
any untrue statements or misstatements in Computational Materials or
ABS Term Sheets prepared by Citibank and will reimburse NationsBanc
for any legal or other expenses reasonably incurred by NationsBanc in
connection with investigating or defending any such action or claim as
such expenses are incurred.
(ii) NationsBanc will indemnify and hold harmless Citibank
against any losses, claims, damages or liabilities to which Citibank
may become subject, under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities arise out of or are based
upon any untrue statements or misstatements in Computational Materials
or ABS Term Sheets prepared by NationsBanc and will reimburse Citibank
for any legal or other expenses reasonably incurred
<PAGE>
-15-
by Citibank in connection with investigating or defending any such
action or claim as such expenses are incurred.
(iii) Promptly after receipt by an indemnified party under clause
(i) or (ii) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such clause, notify the
indemnifying party in writing of the commencement thereof; but the
omission to so notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified party otherwise
than under such clause; provided, however, that any increase in such
liability as a result of such failure to notify shall not be an
expense of the indemnifying party. In case any such action shall be
brought against any indemnified party, and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it
shall wish, to assume the defense thereof, with counsel satisfactory
to such indemnified party and, after notice from the indemnifying
party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such
indemnified party under such clause for any legal expenses of other
counsel or any other expenses, in each case subsequently incurred by
such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall,
without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect
of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or
judgment (a) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim and (b)
does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified
party.
(iv) If the indemnification provided in clause (i) or (ii) above,
as the case may be, is unavailable to or insufficient to hold harmless
an indemnified party under such clause in respect of any losses,
claims, damages or liabilities (or actions in respect thereof)
referred to therein, then the indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of
such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect both the
relative benefits received by the indemnifying party on the one hand
and the indemnified party on the other from the offering of the
Registered Certificates, in their respective capacity as Underwriter,
and the relative fault of the indemnifying party on the one hand and
indemnified party on the other in connection with the statements which
resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by Citibank on the one
hand and NationsBanc on the other shall be deemed to be in the same
proportion to the amount of Registered Certificates underwritten by
such party. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of
a material fact relates to information supplied by the indemnifying
party on the one hand or the indemnified party on the other and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
parties hereto agree that it would not be just and equitable if
contribution pursuant to this clause (iv) were determined by pro rata
allocation or by any other method of allocation which does not take
into account the equitable considerations referred to above in this
clause (iv). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this clause (iv) shall be deemed
to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this clause
(iv), neither
<PAGE>
-16-
Citibank nor NationsBanc shall be required to contribute any amount in
excess of the amount by which the total price at which the Registered
Certificates underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
party has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(v) The obligations of Citibank under the foregoing clauses
(i)-(iv) shall be in addition to any liability which Citibank may
otherwise have and shall extend, upon the same terms and conditions,
to each person, if any, who controls NationsBanc within the meaning of
the Securities Act or the Exchange Act and to each director and
officer of NationsBanc, and the obligations of NationsBanc under the
foregoing clauses (i)-(iv) shall be in addition to any liability which
NationsBanc may otherwise have and shall extend, upon the same terms
and conditions, to each person, if any, who controls Citibank within
the meaning of the Securities Act or the Exchange Act and to each
officer and director of Citibank.
8. Fees and Expenses. All costs and expenses in connection with the
transactions herein contemplated shall be allocated and borne as provided in
that certain Agreement Among Underwriters, dated October 30, 1996, between
NationsBanc and Citibank (the "Agreement Among Underwriters").
9. Computational Materials and ABS Term Sheets. (a) Not later than
10:30 a.m., New York City time, on the date hereof, the Underwriters shall
deliver to MCFI five complete copies of all materials provided by the
Underwriters to prospective investors in the Registered Certificates which
constitute either (i) "Computational Materials" within the meaning of the
no-action letter dated May 20, 1994 issued by the Division of Corporation
Finance of the Commission to Kidder, Peabody Acceptance Corporation I, Kidder,
Peabody & Co. Incorporated, and Kidder Structured Asset Corporation and the
no-action letter dated May 27, 1994 issued by the Division of Corporation
Finance of the Commission to the Public Securities Association (together, the
"Kidder Letters") or (ii) "ABS Term Sheets" within the meaning of the no-action
letter dated February 17, 1995 issued by the Division of Corporation Finance of
the Commission to the Public Securities Association (the "PSA Letter" and
together with the Kidder Letters, the "No-Action Letters"), if the filing of
such materials with the Commission is a condition of the relief granted in such
letters and, in the case of any such materials that constitute "Collateral Term
Sheets" within the meaning of the PSA Letter, such Collateral Term Sheets have
not previously been delivered to MCFI as contemplated by Section 9(b)(i) below.
Each delivery of Computational Materials and/or ABS Term Sheets to MCFI pursuant
to this paragraph (a) shall be effected by delivering four copies of such
materials to counsel for MCFI on behalf of MCFI at the address specified in
Section 16 hereof and one copy of such materials to MCFI.
(b) Each Underwriter represents and warrants to and agrees with MCFI,
as of the date hereof and as of the Closing Date, as applicable, that:
(i) if such Underwriter has provided any Collateral Term Sheets
to potential investors in the Registered Certificates prior to the
date hereof and if the filing of such materials with the Commission is
a condition of the relief granted in the PSA Letter, then in each such
case such Underwriter delivered four copies of such materials to
counsel for MCFI on behalf of MCFI at the address specified in Section
16 hereof and one copy of such materials to MCFI no later than 10:30
a.m., New York City time, on the first business day following the date
on which such materials were initially provided to a potential
investor;
<PAGE>
-17-
(ii) the Computational Materials (either in original, aggregated
or consolidated form) and ABS Term Sheets furnished to MCFI pursuant
to Section 9(a) or as contemplated in Section 9(b)(i) constitute all
of the materials relating to the Registered Certificates furnished by
such Underwriter (whether in written, electronic or other format) to
prospective investors in the Registered Certificates prior to the date
hereof, except for any Preliminary Prospectus and any Computational
Materials and ABS Term sheets which are not required to be filed with
the Commission in accordance with the No-Action Letters, and all
Computational Materials and ABS Term Sheets provided by such
Underwriter to potential investors in the Registered Certificates
comply with the requirements of the No-Action Letters;
(iii) on the respective dates any such Computational Materials
and/or ABS Term Sheets with respect to the Registered Certificates
referred to in Section 9(b)(ii) were last furnished by such
Underwriter to each prospective investor, on the date of delivery
thereof to MCFI pursuant to or as contemplated by this Section 9 and
on the Closing Date, such Computational Materials and/or ABS Term
Sheets did not and will not include any untrue statement of a material
fact, or, when read in conjunction with the Prospectus, omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading;
(iv) at the time any Computational Materials or ABS Term Sheets
with respect to the Registered Certificates were furnished to a
prospective investor and on the date hereof, the Underwriters
possessed, and on the date of delivery of such materials to MCFI
pursuant to or as contemplated by this Section 9 and on the Closing
Date, the Underwriters will possess, the capability, knowledge,
expertise, resources and systems of internal control necessary to
ensure that such Computational Materials and/or ABS Term Sheets
conform to the representations and warranties of the Underwriters
contained in subparagraphs (ii) and (iii) above of this paragraph (b);
(v) all Computational Materials and ABS Term Sheets with respect
to the Registered Certificates furnished by such Underwriter to
potential investors contained and will contain a legend, prominently
displayed on the first page thereof, to the effect that MCFI has not
prepared, reviewed or participated in the preparation of such
Computational Materials or ABS Term Sheets, is not responsible for the
accuracy thereof and has not authorized the dissemination thereof;
(vi) all Collateral Term Sheets with respect to the Registered
Certificates furnished by such Underwriter to potential investors
contained and will contain a legend, prominently displayed on the
first page thereof, indicating that the information contained therein
will be superseded by the description of the Mortgage Loans contained
in the Prospectus and, except in the case of the initial Collateral
Term Sheet, that such information supersedes the information in all
prior Collateral Term Sheets; and
(vii) on and after the date hereof, such Underwriter shall not
deliver or authorize the delivery of any Computational Materials, ABS
Term Sheets or other materials relating to the Registered Certificates
(whether in written, electronic or other format) to any potential
investor unless such potential investor has received a Prospectus
prior to or at the same time as the delivery of such Computational
Materials, ABS Term Sheets or other materials.
<PAGE>
-18-
Notwithstanding the foregoing, neither Underwriter makes any
representation or warranty as to whether any Computational Materials or ABS Term
Sheets with respect to the Registered Certificates included or will include any
untrue statement resulting directly from any Collateral Error (except any
Corrected Collateral Error, with respect to materials prepared after the receipt
by the Underwriters from MCFI of notice of such Corrected Collateral Error or
materials superseding or correcting such Corrected Collateral Error).
(c) The Underwriters acknowledge and agree that MCFI has not
authorized and will not authorize the distribution of any Computational
Materials or ABS Term Sheets with respect to the Registered Certificates to any
prospective investor, and agree that any such Computational Materials and/or ABS
Term Sheets furnished to prospective investors shall include a disclaimer in the
form set forth in paragraph (b)(v) above. The Underwriters agree that they will
not represent to potential investors that any Computational Materials and/or ABS
Term Sheets with respect to the Registered Certificates were prepared or
disseminated on behalf of MCFI.
(d) If, at any time when a prospectus relating to the Registered
Certificates is required to be delivered under the Securities Act prior to 90
days from the date hereof, it shall be necessary in the opinion of the
Underwriters or their counsel to amend or supplement the Prospectus as a result
of an untrue statement of a material fact contained in any Computational
Materials or ABS Term Sheets provided by the Underwriters pursuant to or as
contemplated by this Section 9 or the omission to state a material fact
required, when considered in conjunction with the Prospectus, to be stated
therein or necessary to make the statements therein, when read in conjunction
with the Prospectus, not misleading, or if it shall be necessary to amend or
supplement any Current Report to comply with the Securities Act or the rules
thereunder, the Underwriters, at their expense, allocated between them in
accordance with the NCMI Expense Allocation Percentage and the Citibank Expense
Allocation Percentage (as such terms are defined in the Agreement Among
Underwriters), promptly will prepare and furnish to MCFI for filing with the
Commission an amendment or supplement which will correct such statement or
omission or an amendment which will effect such compliance and shall distribute
such amendment or supplement to each prospective investor in the Registered
Certificates that received such information being amended or supplemented. Each
Underwriter represents and warrants to MCFI, as of the date of delivery of such
amendment or supplement to MCFI, that such amendment or supplement will not
include any untrue statement of a material fact or, when read in conjunction
with the Prospectus, omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading. MCFI shall have no
obligation to file such amendment or supplement if MCFI determines that (i) such
amendment or supplement contains any untrue statement of a material fact or,
when read in conjunction with the Prospectus, omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading (it being understood, however, that MCFI shall have no obligation to
review or pass upon the accuracy or adequacy of, or to correct, any such
amendment or supplement provided by the Underwriters to MCFI pursuant to this
paragraph (d)) or (ii) such filing is not required under the Securities Act.
Notwithstanding the foregoing, neither Underwriter makes any representation or
warranty as to whether any such amendment or supplement of Computational
Materials or ABS Term Sheets with respect to the Registered Certificates
included or will include any untrue statement resulting directly from any
Collateral Error (except any Corrected Collateral Error, with respect to
materials prepared after the receipt by the Underwriters from MCFI of notice of
such Corrected Collateral Error or materials superseding or correcting such
Corrected Collateral Error).
(e) If, at any time when a prospectus relating to the Registered
Certificates is required to be delivered under the Securities Act prior to 90
days from the date hereof, it shall be necessary in the opinion of MCFI or its
counsel to amend or supplement the Prospectus as a result of an untrue statement
of a material fact contained in any Computational Materials or ABS Term Sheets
provided by the
<PAGE>
-19-
Underwriters pursuant to or as contemplated by this Section 9 or the omission to
state therein a material fact required, when considered in conjunction with the
Prospectus, to be stated therein or necessary to make the statements therein,
when read in conjunction with the Prospectus, not misleading, or if it shall be
necessary to amend or supplement any Current Report to comply with the
Securities Act or the rules thereunder, MCFI promptly will notify each
Underwriter of the necessity of such amendment or supplement, and the
Underwriters, at their expense (such expense to be allocated between them based
on the relative fault of the Underwriters) (or, if such amendment or supplement
is necessary due to a Collateral Error (except any Corrected Collateral Error,
with respect to materials prepared after the receipt by the Underwriters from
MCFI of notice of such Corrected Collateral Error or materials superseding or
correcting such Corrected Collateral Error), at the expense of MCFI), shall
prepare and furnish to MCFI for filing with the Commission an amendment or
supplement which will correct such statement or omission or an amendment which
will effect such compliance and shall distribute such amendment or supplement to
each prospective investor in the Registered Certificates that received such
information being amended or supplemented. Notwithstanding the foregoing,
neither Underwriter makes any representation or warranty as to whether any such
amendment or supplement of Computational Materials or ABS Term Sheets with
respect to the Registered Certificates included or will include any untrue
statement resulting directly from any Collateral Error (except any Corrected
Collateral Error, with respect to materials prepared after the receipt by the
Underwriters from MCFI of notice of such Corrected Collateral Error or materials
superseding or correcting such Corrected Collateral Error).
(f) The Underwriters (at their own expense) further agree to provide
to MCFI any accountants' letters obtained relating to the Computational
Materials and/or ABS Term Sheets, which accountants' letters shall be addressed
to MCFI or shall state that MCFI may rely thereon; provided that the
Underwriters shall have no obligation to procure such letter.
10. Termination. This Agreement shall be subject to termination by
notice given to MCFI, if the sale of the Registered Certificates provided for
herein is not consummated because of any failure or refusal on the part of MCFI
to comply in all material respects with the terms or to fulfill in all material
respects any of the conditions of this Agreement, or if for any reason MCFI
shall be unable to perform in all material respects its obligations under this
Agreement. This Agreement shall also be subject to termination in the absolute
discretion of either of the Underwriters, by notice given to MCFI prior to
delivery of and payment for the Certificates, if prior to such time (i) trading
in securities generally on the New York Stock Exchange shall have been suspended
or materially limited, (ii) a general moratorium on commercial banking
activities in New York shall have been declared by either federal or New York
State authorities, or (iii) there shall have occurred any material outbreak or
escalation of hostilities or other calamity or crisis the effect of which on the
financial markets of the United States is such as to make it, in the reasonable
judgment of either of the Underwriters after consultation with MCFI,
impracticable to market the Registered Certificates.
11. Default by an Underwriter. If either Underwriter shall fail to
purchase and pay for any of the Registered Certificates agreed to be purchased
by such Underwriter hereunder and such failure to purchase shall constitute a
default in the performance of its obligations under this Agreement, the
remaining Underwriter shall be obligated to take up and pay for the Registered
Certificates that the defaulting Underwriter agreed but failed to purchase;
provided, however, that in the event that the initial principal amount of
Registered Certificates that the defaulting Underwriter agreed but failed to
purchase shall exceed 10% of the aggregate Class Principal Balance of all of the
Registered Certificates set forth in Schedule I hereto, the remaining
Underwriter shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the Registered Certificates, and if such
nondefaulting Underwriter does not purchase all of the Registered Certificates,
this Agreement will terminate without liability to the nondefaulting Underwriter
or MCFI. In the event of a default by any Underwriter as set
<PAGE>
-20-
forth in this Section 11, the Closing Date for the Registered Certificates shall
be postponed for such period, not exceeding seven days, as the nondefaulting
Underwriter shall determine in order that the required changes in the
Registration Statement, the Prospectus or in any other documents or arrangements
may be effected. Nothing contained in this Agreement shall (a) relieve any
defaulting Underwriter of its liability, if any, to MCFI and to any
nondefaulting Underwriter for damages occasioned by its default hereunder or (b)
relieve any Underwriter of such Underwriter's obligations under the Agreement
Among Underwriters, including, without limitation, those set forth in Sections
5(b) and 5(c) thereof.
12. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of
MCFI, the Underwriters and their respective officers, directors, employees and
agents set forth in or made pursuant to this Agreement will remain in full force
and effect, regardless of any investigation made by or on behalf of either
Underwriter, MCFI or any of the officers, directors or controlling persons
referred to in Section 7 hereof, and will survive delivery of and payment for
the Registered Certificates. The provisions of Section 7 hereof shall survive
the termination or cancellation of this Agreement.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors and controlling persons referred to in Section 7 hereof, and
no other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed
in accordance with the substantive laws of the State of New York, applicable to
agreements made and to be performed entirely in said state.
15. Miscellaneous. This Agreement supersedes all prior or
contemporaneous agreements and understandings relating to the subject matter
hereof. Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated except by a writing signed by the party against whom
enforcement of such change, waiver, discharge or termination is sought. This
Agreement may be signed in any number of counterparts, each of which shall be
deemed an original, which taken together shall constitute one and the same
instrument.
16. Notices. All communications hereunder will be in writing and
effective only upon receipt and, if sent to NationsBanc, will be delivered to
NationsBanc Capital Markets, Inc., NationsBank Corporate Center, 100 North Tryon
Street, 11th Floor, Charlotte, North Carolina 28255, Attention: Mr. David A.
Gertner, with a copy to Robert W. Long, Esq., at NationsBank Corporate Center,
100 North Tryon Street, 20th Floor, Charlotte, North Carolina 28255; if sent to
Citibank, will be delivered to Citibank, N.A., 399 Park Avenue, 3rd floor, New
York, New York 10043, Attention: Mr. Richard L. Jarocki. Jr.; if sent to MCFI,
will be delivered to MCFI, at 399 Park Avenue, New York, New York 10043,
Attention: Mr. Richard L. Jarocki, Jr., with a copy to Stephen E. Dietz, Esq. at
425 Park Avenue, New York, New York 10043.
<PAGE>
-21-
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the undersigned a counterpart hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among MCFI and the Underwriters.
Very truly yours,
MORTGAGE CAPITAL FUNDING, INC.
By:/s/ Richard L. Jarocki, Jr.
------------------------------
Name: Richard L. Jarocki, Jr.
Title: Vice President
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
NATIONSBANC CAPITAL MARKETS, INC.
By:
- ---------------------------------
Name:
Title:
CITIBANK, N.A.
By:/s/ Gary L. Greenberg
------------------------------
Name: Gary L. Greenberg
Title: Vice President
<PAGE>
SCHEDULE I
As used in this Agreement, the term "Registration Statements" refers to the
registration statement Nos. 33-25068 and 33-63924 filed by MCFI on Form S-11 and
Form S-3, respectively and declared effective by the Commission.
Title and Description of the Registered Certificates:
- -----------------------------------------------------
Multifamily/Commercial Mortgage Pass-Through Certificates, Series 1996-MC2,
Class A-1, Class A-2, Class A-3, Class B, Class C, Class D and Class E
Certificates.
Underwriting Agreement, dated as of December 11, 1996
Cut-off Date: December 1, 1996
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Portion of Portion of
Class Principal Class Principal
Balance of Class Balance of Class
Class Initial Class to be Purchased to be Purchased Initial Purchase
Designation Principal Balance (1) by Citibank(1) by NationsBanc(1) Pass-Through Rate Price(2) Rating(3)
- ----------- --------------------- ----------------- ----------------- ----------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Class A-1 $132,607,079 $56,429,484 $76,177,595 6.758% 101.000% AAA/Aaa
Class A-2 $ 24,276,943 $10,330,786 $13,946,157 6.909% 101.000% AAA/Aaa
Class A-3 $166,045,134 $70,658,680 $95,386,454 7.008% 101.000% AAA/Aaa
Class B $ 27,483,332 $11,695,230 $15,788,102 7.136% 101.000% AA/Aa2
Class C $ 22,902,777 $9,746,025 $13,156,752 7.224% 101.000% A/A2
Class D $ 18,322,221 $7,796,820 $10,525,401 7.257% 100.000% BBB/Baa2
Class E $ 11,451,388 $4,873,012 $6,578,376 7.628% 99.859% NR/Baa3
- ----------
(1) Subject to a variance of plus or minus 5.0%.
(2) Expressed as a percentage of the Class Principal Balance of the relevant class of Registered Certificates to be purchased. In
addition, as to each class of the Registered Certificates, the Underwriters will pay MCFI accrued interest at the initial
Pass-Through Rate therefor from the Cut-off Date to but not including the Closing Date.
(3) By each of Fitch Investors Service, L.P. and Moody's Investors Service, Inc ("Moody's") (except with respect to the Class E
Certificates, which are rated solely by Moody's).
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Closing Time, Date and Location: 10:00 a.m. New York City time on December 19,
1996 at the offices of Thacher Proffitt & Wood.
- --------------------------------------------------------------------------------
Issuance and delivery of Registered Certificates: Each class of Registered
Certificates will be issued as one or more Certificates registered in the name
of Cede & Co., as nominee of The Depository Trust Company. Beneficial owners
will hold interests in such Certificates through the book-entry facilities of
The Depository Trust Company in minimum denominations of initial principal
balance of $100,000 and integral multiples of $1 in excess thereof.
Mortgage Capital Funding, Inc.
Multifamily/Commercial
Mortgage Pass-Through Certificates, Series 1996-MC2
Class X, Class F, Class G, Class H, Class R-I and Class R-II
Certificate Purchase Agreement
------------------------------
as of December 11, 1996
NationsBanc Capital Markets, Inc.
NationsBank Corporate Center, 11th Floor
100 North Tryon Street
Mail Code: NC1-007-11-07
Charlotte, North Carolina 28255
Citibank, N.A.
399 Park Avenue
New York, New York 10043
Ladies and Gentlemen:
Mortgage Capital Funding, Inc., a Delaware corporation ("MCFI"),
proposes to sell to NationsBanc Capital Markets, Inc. ("NationsBanc") and
Citibank, N.A. ("Citibank"; NationsBanc and Citibank, in such capacity, each a
"Purchaser" and, together, the "Purchasers"), the respective classes of
Multifamily/Commercial Mortgage Pass-Through Certificates, Series 1996-MC2 which
are identified on Schedule I hereto (collectively, the "Privately Offered
Certificates"), in each case, having the initial aggregate stated principal
balance (a "Class Principal Balance") or, in the case of the Class X
Certificates, initial aggregate notional principal amount ( the "Class Notional
Amount") set forth on Schedule I. The Privately Offered Certificates, together
with the Class A-1, Class A-2, Class A-3, Class B, Class C, Class D and Class E
Certificates issued therewith (the "Registered Certificates" and, collectively
with the Privately Offered Certificates, the "Certificates"), evidence the
entire beneficial ownership interest in the assets of a trust fund (the "Trust
Fund") to be formed by MCFI and consisting primarily of a pool (the "Mortgage
Pool") of commercial and multifamily mortgage loans (the "Mortgage Loans") that
will have, as of the close of business on December 1, 1996 (the "Cut-off Date"),
after taking into account all payments of principal due on the Mortgage Loans on
or before such date, whether or not received, an aggregate principal balance of
$458,055,542, subject to a variance of plus or minus 5.0%. The Mortgage Loans
(or the right to have such transferred to the Trust Fund) will be acquired by
MCFI from Citicorp Real Estate, Inc. ("CREI"), pursuant to a mortgage loan
purchase agreement, dated as of the date hereof (the "Mortgage Loan Purchase
Agreement"), between MCFI and CREI. Certain of the Mortgage Loans will be
acquired by CREI from NationsBanc Mortgage Capital Corporation ("NMCC"; such
mortgage loans, the "NMCC Mortgage Loans), pursuant to a mortgage loan purchase
agreement, dated as of the date hereof (the "NMCC Purchase Agreement"), between
CREI and NMCC. Certain of the Mortgage Loans will be acquired by CREI from PNC
Bank, National Association ("PNC"; such Mortgage Loans, together with all other
Mortgage Loans other than the NMCC Mortgage Loans, the "CREI Mortgage Loans"),
pursuant to a mortgage loan purchase agreement, dated as of the date hereof (the
"PNC Purchase Agreement"), between CREI and PNC. Two separate real estate
mortgage investment conduit ("REMIC") elections will be made with respect to the
Trust Fund for federal income tax purposes. The
<PAGE>
- 2-
Trust Fund is to be created and the Certificates are to be issued under a
pooling and servicing agreement, dated as of December 1, 1996 (the "Pooling and
Servicing Agreement"), among MCFI as sponsor, CREI as mortgage loan seller (in
such capacity, the "Mortgage Loan Seller"), NMCC, as an additional warranting
party, GMAC Commercial Mortgage Corporation as master servicer (in such
capacity, the "Master Servicer"), and as special servicer (in such capacity, the
"Special Servicer"), LaSalle National Bank as trustee (in such capacity, the
"Trustee") and REMIC administrator (in such capacity, the "REMIC Administrator")
and ABN AMRO Bank N.V. as fiscal agent (the "Fiscal Agent").
1. Representations, Warranties and Covenants.
(a) MCFI represents and warrants to, and covenants with, each of the
Purchasers that:
(i) As of the Closing Date (as defined in Section 3), the
Privately Offered Certificates will be duly authorized, executed and
delivered and, assuming authentication in the manner contemplated in
the Pooling and Servicing Agreement, will be validly issued and
outstanding and entitled to the benefits provided by the Pooling and
Servicing Agreement.
(ii) As of the Closing Date, the Pooling and Servicing Agreement
will have been duly authorized, executed and delivered by MCFI and,
assuming the valid authorization, execution and delivery thereof by
the other parties thereto, will constitute a valid and binding
agreement of MCFI enforceable in accordance with its terms, except as
the same may be limited by bankruptcy, insolvency, reorganization or
other laws relating to or affecting the enforcement of creditors'
rights and by general principles of equity.
(iii) This Agreement has been duly authorized, executed and
delivered by MCFI and, assuming the valid authorization, execution and
delivery hereof by each of the Purchasers, constitutes a valid and
binding obligation of MCFI enforceable in accordance with its terms,
except as the same may be limited by bankruptcy, insolvency,
reorganization or other laws relating to or affecting the enforcement
of creditors' rights, by general principles of equity and by public
policy considerations underlying the securities laws, to the extent
that such public policy considerations limit the enforceability of the
provisions of this Agreement that purport to provide indemnification
for securities laws liabilities.
(iv) As of the Closing Date, the Privately Offered Certificates
and the Pooling and Servicing Agreement will conform in all material
respects to the descriptions thereof contained in the Private
Placement Memorandum (including the exhibits thereto, the "Private
Placement Memorandum"), dated December 11, 1996, relating to the Class
X, Class F, Class G and Class H Certificates.
(v) As of the Closing Date, the Private Placement Memorandum will
not include any untrue statement of a material fact and (when read
together with the other information referenced therein as being
available for review by prospective investors) will not omit to state
a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided, however, that MCFI does not make any
representations, warranties or agreements as to the information
contained in or omitted from the Private Placement Memorandum in
reliance upon and in conformity with the information furnished in
writing to MCFI by or on behalf of such Purchaser (in whatever
capacity) specifically for use in connection with the preparation of
the Private Placement Memorandum.
<PAGE>
- 3-
(vi) MCFI has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware,
with corporate power and authority to own its properties and conduct
its business as described in the Private Placement Memorandum.
(vii) The issuance and sale of the Privately Offered Certificates
to the Purchasers pursuant to this Agreement, the compliance by MCFI
with the other provisions of this Agreement, the Pooling and Servicing
Agreement and the Privately Offered Certificates and the consummation
of the other transactions herein or therein contemplated do not, under
any statute, regulation or rule of general applicability or any
decision, order, decree or judgment of any judicial or other
governmental body specifically applicable to MCFI, require any
consent, approval, authorization, order, registration or qualification
of or with any court or governmental authority, except (A) such as
have been obtained or effected with respect to the Registered
Certificates under the Securities Act of 1933, as amended (the
"Securities Act") (provided that MCFI makes no representations or
warranties as to any consent, approval, authorization, registration or
qualification which may be required under state securities or Blue Sky
laws), (B) the recordation of the assignments of the Mortgage Loans to
the Trustee, which recordation is to be completed pursuant to the
Pooling and Servicing Agreement on or following the Closing Date and
(C) such other approvals as have been obtained.
(viii) Neither the execution and delivery of this Agreement and
the Pooling and Servicing Agreement, nor the issuance and delivery of
the Privately Offered Certificates, nor the consummation of any other
of the transactions contemplated herein or therein, nor the
fulfillment of the terms of this Agreement and the Pooling and
Servicing Agreement, will conflict with, violate, result in a breach
of or constitute a default under the certificate of incorporation or
by-laws of MCFI, any statute or regulation currently applicable to
MCFI, or any order currently applicable to MCFI of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over MCFI, or the terms of any indenture or other
agreement or instrument to which MCFI is a party or by which it or any
of its properties are bound.
(ix) There are no actions or proceedings against, or
investigations of, MCFI pending, or, to the knowledge of MCFI,
threatened, before any court, administrative agency or other tribunal
(A) asserting the invalidity of this Agreement, the Pooling and
Servicing Agreement or the Privately Offered Certificates, (B) seeking
to prevent the issuance of the Privately Offered Certificates or the
consummation of any of the transactions contemplated by this Agreement
or the Pooling and Servicing Agreement, (C) that might materially and
adversely affect the performance by MCFI of its obligations under, or
the validity or enforceability of, this Agreement, the Pooling and
Servicing Agreement or the Privately Offered Certificates or (D)
seeking to affect adversely the federal income tax attributes of the
Class X, Class F, Class G and Class H Certificates described in the
Private Placement Memorandum.
(x) MCFI is not, and the issuance and sale of the Privately
Offered Certificates in the manner contemplated by the Private
Placement Memorandum and this Agreement will not cause MCFI to be,
subject to registration or regulation as an investment company or
affiliate of an investment company under the Investment Company Act of
1940, as amended (the "Investment Company Act").
(xi) The transfer of the Mortgage Loans to the Trust Fund and the
sale of the Certificates to the Purchasers, at the Closing Date, will
be treated by MCFI for financial accounting and reporting purposes as
a sale of assets and not as a pledge of assets to secure debt.
<PAGE>
- 4-
(xii) Any taxes, fees and other governmental charges (other than
income taxes, franchise taxes and recording and filing fees) that are
due and payable by MCFI as of the Closing Date in connection with the
execution, delivery and performance of this Agreement, the Pooling and
Servicing Agreement and the Privately Offered Certificates, will have
been paid at or prior to the Closing Date.
(xiii) At the Closing Date and at the direction of MCFI, the
Mortgage Loans will have been duly and validly assigned and delivered
by the Mortgage Loan Seller to the Trustee under the Pooling and
Servicing Agreement.
(xiv) Assuming the accuracy of the representations and warranties
and the performance of the covenants contained herein on the part of
the Purchasers, neither MCFI nor anyone acting on its behalf has
offered or sold any Privately Offered Certificate or interest therein
by any form of general solicitation or general advertising. In
addition, MCFI 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 the Privately Offered Certificates.
(b) Each Purchaser represents and warrants to, and agrees with, MCFI
that:
(i) Such Purchaser is acquiring its allotment of the Privately
Offered Certificates for its own account and not with a view to or for
sale or transfer in any manner except as contemplated herein and in
the Private Placement Memorandum.
(ii) Such Purchaser understands that the Privately Offered
Certificates have not and will not be registered under the Securities
Act or registered or qualified under any applicable state securities
laws, neither MCFI nor the Trustee is obligated to register or qualify
the Privately Offered Certificates and the Privately Offered
Certificates may not be resold or transferred unless they are (A)
registered pursuant to the Securities Act and registered and qualified
pursuant to any applicable state securities laws or (B) sold or
transferred in transactions which are exempt from such registration
and qualification and the Trustee or other registrar of the
Certificates (or, in the case of the Class X Certificates, which are
being delivered in book-entry form, the transferor) has received
either (1) certification(s) from the transferor and/or transferee
(substantially in the forms attached to the Pooling and Servicing
Agreement) setting forth the facts surrounding the transfer and
establishing that such transfer is being made in accordance with Rule
144A under the Securities Act or in another transaction that does not
require registration under the Securities Act or (2) an opinion of
counsel satisfactory to the Trustee or other registrar of the
Certificates (or, in the case of the Class X Certificates, which are
being delivered in book-entry form, to the transferor) 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.
(iii) Such Purchaser will not sell or otherwise transfer any
Privately Offered Certificate or interest therein except in compliance
with the provisions of Section 5.02 of the Pooling and Servicing
Agreement.
(iv) Neither such Purchaser nor anyone acting on its behalf has
offered or sold any Privately Offered Certificate or interest therein
by any form of general solicitation or general advertising. In
addition, such Purchaser will not act, nor has it authorized or will
it authorize any person to act, in any manner set forth in the prior
sentence with respect to the Privately Offered Certificates.
<PAGE>
- 5-
(v) Such Purchaser has been furnished with all information
regarding (A) MCFI, (B) the Privately Offered Certificates, (C) the
nature, performance and servicing of the Mortgage Loans, (D) the
Pooling and Servicing Agreement and (E) any credit enhancement
mechanism associated with the Privately Offered Certificates, that it
has requested.
(vi) Such Purchaser is an "accredited investor", as such term is
defined in Rule 501(a) of Regulation D under the Securities Act.
(vii) In connection with its purchase of any Class R-I and R-II
Certificates, such Purchaser understands that it must, and hereby
agrees to, deliver a Transfer Affidavit and Agreement substantially in
the form of Exhibit C-1 to the Pooling and Servicing Agreement.
2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, MCFI agrees
to sell to each of Citibank and NationsBanc, and Citibank and NationsBanc each
agrees to purchase from MCFI, the respective portions of the Class Principal
Balance or Class Notional Amount, as the case may be, of each class of Privately
Offered Certificates set forth on Schedule I hereto, at the purchase price for
each such class as set forth on such Schedule I.
3. Delivery and Payment. Delivery of and payment for the Privately
Offered Certificates shall be made in the manner specified below, on the date
and at the time specified in Schedule I hereto, which date and time may be
changed by agreement among the Purchasers and MCFI (such date and time of
delivery of and payment for the Privately Offered Certificates being hereinafter
referred to as the "Closing Date"). Delivery of each Purchaser's allotment of
the Privately Offered Certificates shall be made to the related Purchaser
against payment by such Purchaser of the purchase price therefor to or upon the
order of MCFI in same-day funds by federal funds wire (or by such other method
as such Purchaser and MCFI may agree). Unless delivery is made through the
facilities of the Depository Trust Company (as will be the case with respect to
the Class X Certificates), the Privately Offered Certificates of each class
thereof shall be registered in such names and in such authorized denominations
as the related Purchaser may have requested not less than three full business
days prior to the Closing Date.
MCFI agrees to have the Privately Offered Certificates available for
inspection, checking and packaging in New York, New York, at any time before
3:00 p.m. New York City time on the business day prior to the Closing Date.
4. Offering by the Purchasers. It is understood that each of the
Purchasers proposes to privately place the Privately Offered Certificates with a
limited number of institutional investors as set forth in the Private Placement
Memorandum.
5. Conditions to the Obligations of each Purchaser and MCFI. The
obligation of each Purchaser to purchase, and the obligation of MCFI to sell to
such Purchaser, its allotment of the Privately Offered Certificates shall be
subject to the accuracy of the representations and warranties on the part of
MCFI and such Purchaser contained herein as of the date hereof and as of the
Closing Date, to the accuracy of the statements of MCFI and such Purchaser made
in any officer's certificate pursuant to the provisions hereof, to the
performance by MCFI and such Purchaser of their respective obligations hereunder
and to the following additional conditions:
(a) MCFI shall have furnished to such Purchaser:
(i) An executed copy of the Pooling and Servicing Agreement;
<PAGE>
- 6-
(ii) An opinion of Stephen E. Dietz, Esq., counsel to MCFI, dated
the Closing Date, substantially to the effect that:
(A) MCFI is validly existing as a corporation in good
standing under the laws of the State of Delaware, with corporate
power and authority under such laws to own its properties and
assets and conduct its business as described in the Private
Placement Memorandum;
(B) The Privately Offered Certificates have been duly
authorized, executed and delivered and, assuming authentication
in the manner contemplated in the Pooling and Servicing
Agreement, are validly issued and outstanding and entitled to the
benefits provided by the Pooling and Servicing Agreement;
(C) The Pooling and Servicing Agreement has been duly
authorized, executed and delivered by MCFI;
(D) The Pooling and Servicing Agreement constitutes a valid
and legally binding agreement of MCFI and is enforceable against
it in accordance with its terms, except as the same may be
limited by bankruptcy, insolvency, reorganization or other
similar laws relating to or affecting the enforcement of
creditor's rights generally and by general principles of equity;
(E) The Pooling and Servicing Agreement is not required to
be qualified under the Trust Indenture Act of 1939, as amended,
and the Trust Fund is not required to be registered under the
Investment Company Act of 1940, as amended;
(F) The descriptions in the Private Placement Memorandum, as
of the date hereof, of the Privately Offered Certificates and the
Pooling and Servicing Agreement are, to the extent that such
descriptions constitute statements of matters of law or legal
conclusions with respect thereto, accurate in all material
respects;
(G) This Agreement has been duly authorized, executed and
delivered by MCFI; and
(H) The issuance, offer and sale of the Privately Offered
Certificates by MCFI to the Purchasers in the manner contemplated
in the Private Placement Memorandum, this Agreement and the
Pooling and Servicing Agreement, assuming the accuracy of your
representations and warranties and the performance of your
covenants contained herein, is a transaction that does not
require registration of the Privately Offered Certificates under
the Securities Act.
Such opinion may express its reliance as to factual matters on
the representations and warranties made by, and on certificates or
other documents furnished by officers and/or authorized
representatives of, the parties to this Agreement and the Pooling and
Servicing Agreement and on certificates furnished by public officials.
Such opinion may assume the due authorization, execution and delivery
of the instruments and documents referred to therein by the parties
thereto other than MCFI. Such opinion may be qualified as an opinion
only on the General Corporation Law of the State of Delaware, the laws
of each state in which the writer of the opinion is admitted to
practice law and the federal law of the United States.
<PAGE>
- 7-
(iii) One or more opinions, dated the Closing Date, of Thacher
Proffitt & Wood, special counsel to MCFI, substantially to the effect that:
(A) The statements in the Private Placement Memorandum under the
headings "ERISA Considerations", and "Certain Federal Income Tax
Consequences", to the extent that they constitute matters of New York
or federal law or legal conclusions with respect thereto that are
relevant to the Privately Offered Certificates, provide a fair and
accurate summary of such law and conclusions; and
(B) As described in the Prospectus Supplement and assuming
compliance with the provisions of the Pooling and Servicing Agreement,
(1) REMIC I will qualify as a real estate mortgage investment conduit
(a "REMIC") within the meaning of Sections 860A through 860G (the
"REMIC Provisions") of the Internal Revenue Code of 1986, and the
REMIC I Regular Interests will be "regular interests" and the Class
R-I Certificates will evidence the sole class of "residual interests"
in REMIC I (as both terms are defined in the REMIC Provisions in
effect on the Closing Date), and (2) REMIC II will qualify as a REMIC
within the meaning of the REMIC Provisions, and the Class X, Class
A-1, Class A-2, Class A-3, Class B, Class C, Class D, Class E, Class
F, Class G and Class H Certificates will evidence "regular interests"
and the Class R-II Certificates will evidence the sole class of
"residual interests" in REMIC II.
Such opinion may express its reliance as to factual matters on the
representations and warranties made by, and on certificates or other
documents furnished by officers and/or authorized representatives of, the
parties to this Agreement and the Pooling and Servicing Agreement and on
certificates furnished by public officials. Such opinion may assume the due
authorization, execution and delivery of the instruments and documents
referred to therein by the parties thereto other than MCFI. Such opinion
may be qualified as an opinion only on the General Corporation Law of the
State of Delaware, the laws of each state in which the writer of the
opinion is admitted to practice law and the federal law of the United
States.
(iv) Such Purchaser shall have received copies of all legal opinion
letters delivered by Thacher Proffitt & Wood to the Rating Agencies in
connection with the issuance of the Privately Offered Certificates,
accompanied in each case by a letter signed by Thacher Proffitt & Wood
stating that such Purchaser may rely on such opinion letter as if it were
addressed to such Purchaser as of the date thereof;
(v) A good standing certificate regarding MCFI from the Secretary of
State of the State of Delaware, dated not earlier than 30 days prior to the
Closing Date;
(vi) A certificate of MCFI, dated the Closing Date and signed by an
executive officer or authorized signatory of MCFI, to the effect that the
representations and warranties of MCFI herein are true and correct in all
material respects on and as of the Closing Date with the same effect as if
made on the Closing Date, and MCFI has complied in all material respects
with all agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date; and
<PAGE>
- 8-
(vii) An officer's certificate, dated the Closing Date and signed by
the Secretary or an assistant secretary of MCFI, to the effect that each
individual who, as an officer or representative of MCFI, signed this
Agreement, the Pooling and Servicing Agreement or any other document or
certificate delivered on or before the Closing Date in connection with the
transactions contemplated herein or in the Pooling and Servicing Agreement,
was at the respective times of such signing and delivery, and is as of the
Closing Date, duly elected or appointed, qualified and acting as such
officer or representative, and the signatures of such persons appearing on
such documents and certificates are their genuine signatures. Such
certificate shall be accompanied by true and complete copies (certified as
such by the Secretary or an assistant secretary of MCFI) of the certificate
of incorporation and by-laws of MCFI, as in effect on the Closing Date, and
of the resolutions of MCFI and any required shareholder consent relating to
the transactions contemplated in this Agreement and the Pooling and
Servicing Agreement.
(b) The Purchasers shall have received, with respect to each of the
Mortgage Loan Seller, NMCC, the Master Servicer, the Special Servicer, the
Fiscal Agent, the Trustee and the REMIC Administrator, a favorable opinion of
counsel, dated the Closing Date, addressing the valid existence of such party
under the laws of the jurisdiction of its organization, the due authorization,
execution and delivery of the Pooling and Servicing Agreement by such party and,
subject to the same limitations as set forth in Section 5(a)(ii)(D), the
enforceability of the Pooling and Servicing Agreement against such party. Such
opinion may express its reliance as to factual matters on representations and
warranties made by, and on certificates or other documents furnished by officers
and/or authorized representatives of parties to this Agreement and the Pooling
and Servicing Agreement and on certificates furnished by public officials. Such
opinion may assume the due authorization, execution and delivery of the
instruments and documents referred to therein by the parties thereto other than
the party on behalf of which such opinion is being rendered. Such opinion may be
qualified as an opinion only on the General Corporation Law of the State of
Delaware (if relevant), the laws of each state in which the writer of the
opinion is admitted to practice law and the federal law of the United States.
(c) MCFI and the Purchasers shall have received from KPMG Peat
Marwick, certified public accountants, a letter, dated the Closing Date, in form
and substance reasonably satisfactory to MCFI and the Purchasers, stating in
effect that they have performed certain specified procedures as a result of
which they have determined that the information of an accounting, financial or
statistical nature set forth in the Private Placement Memorandum agrees with the
data sheet or computer tape prepared by the Mortgage Loan Seller or NMCC, unless
otherwise noted in such letter.
(d) MCFI and the Purchasers shall have received from KPMG Peat
Marwick, certified public accountants, a letter dated the Closing Date, in form
and substance reasonably satisfactory to MCFI and the Purchasers, to the effect
that they have performed certain specified procedures, all of which have been
agreed to by MCFI and the Purchasers, as a result of which they confirmed the
information of an accounting, financial or statistical nature included in the
Private Placement Memorandum under the heading "Special Yield Considerations".
(e) Subsequent to the date hereof, there shall not have occurred any
change, or any development involving a prospective change, in or affecting the
business or properties of MCFI which such Purchaser concludes, in the judgment
of such Purchaser after consultation with MCFI, materially impairs the
investment quality of the Privately Offered Certificates so as to make it
impractical or inadvisable to proceed with the private placement or the delivery
of the Privately Offered Certificates as contemplated by the Private Placement
Memorandum and this Agreement.
<PAGE>
- 9-
(f) The Privately Offered Certificates that have been assigned one or
more ratings shall have been assigned ratings not less than those set forth on
Schedule I, and such ratings shall not have been rescinded.
6. Indemnification and Contribution.
(a) MCFI agrees to indemnify and hold harmless each Purchaser and each
person who controls such Purchaser within the meaning of either the Securities
Act or the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
against any and all losses, claims, damages or liabilities, joint or several, to
which it or any of them may become subject under the Securities Act, the
Exchange Act, or other federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Private
Placement Memorandum, or in any revision or amendment thereof or supplement
thereto, or arise out of or are based upon the omission or alleged omission
(when read together with the other information referenced therein as being
available for review by prospective investors) to state therein a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and agrees to reimburse each such
indemnified party for any legal or other expenses reasonably incurred by it or
him in connection with investigating or defending any such loss, claim, damage,
liability or action; provided that MCFI will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon (i) any such untrue statement or alleged untrue statement or omission
or alleged omission made in the Private Placement Memorandum or any revision or
amendment thereof or supplement thereto in reliance upon and in conformity with
written information furnished to MCFI by or on behalf of such Purchaser (in
whatever capacity) specifically for use in connection with the preparation
thereof or (ii) any such untrue statement or alleged untrue statement or
omission or alleged omission that is covered by the indemnification provided by
NMCC pursuant to the NMCC Purchase Agreement. This indemnity agreement will be
in addition to any liability which MCFI may otherwise have.
(b) Each Purchaser, severally and not jointly, agrees to indemnify and
hold harmless MCFI and each of its officers and directors, and each person who
controls MCFI within the meaning of either the Securities Act or the Exchange
Act, to the same extent as the foregoing indemnities from MCFI to the
Purchasers, but only with reference to written information furnished to MCFI by
or on behalf of such Purchaser (in whatever capacity) specifically for use in
connection with the preparation of the Private Placement Memorandum or any
revision or amendment thereof or supplement thereto. This indemnity agreement
will be in addition to any liability which either Purchaser may otherwise have.
MCFI acknowledges that with respect to Citibank and NationsBanc, the statements
set forth in the first, second and third sentences of the final paragraph of the
cover page of the Private Placement Memorandum and in the second and third
sentences of the first paragraph and the first sentence of the second paragraph
under the heading "Private Placement" in the Private Placement Memorandum,
constitute the only information furnished in writing by or on behalf of Citibank
or NationsBanc, as the case may be, for inclusion in the Private Placement
Memorandum or any revision or amendment thereof or supplement thereto, and each
Purchaser confirms that such statements attributable thereto are correct.
(c) Promptly after receipt by an indemnified party under this Section
6 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 6, notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve the
indemnifying party from any liability which it may have to any indemnified party
otherwise than under this Section 6; provided, however, that any increase in
such liability as a result of such failure to notify
<PAGE>
- 10-
shall not be an expense of the indemnifying party. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel satisfactory to
such indemnified party; provided that, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assert such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel, approved by the indemnified party or parties,
representing the indemnified party or parties who are parties to such action),
(ii) the indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense of
the indemnifying party; and except that, if clause (i) or (iii) is applicable,
such liability shall be only in respect of the counsel referred to in such
clause (i) or (iii).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 6 is due
in accordance with its terms but is for any reason held by a court to be
unavailable on grounds of policy or otherwise, MCFI and the related Purchaser
shall each contribute to the aggregate losses, claims, damages and liabilities
(including legal and other expenses reasonably incurred in connection with
investigating or defending same) to which MCFI and such Purchaser may be subject
in such proportion so that such Purchaser is responsible for 0.5% thereof and
MCFI is responsible for the balance; provided that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 6,
each person who controls a Purchaser within the meaning of either the Securities
Act or the Exchange Act shall have the same rights to contribution as such
Purchaser, and each person who controls MCFI within the meaning of either the
Securities Act or the Exchange Act and each officer and director of MCFI shall
have the same rights to contribution as MCFI. Any party entitled to contribution
will, promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this paragraph (d), notify such
party or parties from whom contribution may be sought, but the omission to so
notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this paragraph (d).
7. Termination. This Agreement shall be subject to termination by
notice given to MCFI, if the sale of the Privately Offered Certificates provided
for herein is not consummated because of any failure or refusal on the part of
MCFI to comply in all material respects with the terms or to fulfill in all
material respects any of the conditions of this Agreement, or if for any reason
MCFI shall be unable to perform in all material respects its obligations under
this Agreement. This Agreement shall also be subject to termination in the
absolute discretion of either of the Purchasers, by notice given to MCFI prior
to delivery of and payment for the Privately Offered Certificates, if prior to
such time (i) trading in securities generally on the New York Stock Exchange
shall have been suspended or materially limited,
<PAGE>
-11-
(ii) a general moratorium on commercial banking activities in New York shall
have been declared by either federal or New York State authorities, or (iii)
there shall have occurred any material outbreak or escalation of hostilities or
other calamity or crisis the effect of which on the financial markets of the
United States is such as to make it, in the reasonable judgment of either of the
Purchasers after consultation with MCFI, impracticable to market the Privately
Offered Certificates.
8. Default by a Purchaser. If either Purchaser shall fail to purchase
and pay for any of the Privately Offered Certificates agreed to be purchased by
such Purchaser hereunder and such failure to purchase shall constitute a default
in the performance of its obligations under this Agreement, the remaining
Purchaser shall be obligated to take up and pay for the Privately Offered
Certificates that the defaulting Purchaser agreed but failed to purchase;
provided, however, that in the event that the initial principal amount or
notional amount, as the case may be, of Privately Offered Certificates that the
defaulting Purchaser agreed but failed to purchase shall exceed 10% of (a) the
aggregate Class Principal Balance of the Class F, Class G and Class H
Certificates set forth in Schedule I hereto or (b) the Class Notional Amount of
the Class X Certificates set forth in Schedule I hereto, as the case may be, the
remaining Purchaser shall have the right to purchase all, but shall not be under
any obligation to purchase any, of the Privately Offered Certificates, and if
such nondefaulting Purchaser does not purchase all of the Privately Offered
Certificates, this Agreement will terminate without liability to the
nondefaulting Purchaser or MCFI. In the event of a default by any Purchaser as
set forth in this Section 8, the Closing Date for the Privately Offered
Certificates shall be postponed for such period, not exceeding seven days, as
the nondefaulting Purchaser shall determine in order that the required changes
in the Private Placement Memorandum or in any other documents or arrangements
may be effected. Nothing contained in this Agreement shall (x) relieve any
defaulting Purchaser of its liability, if any, to MCFI and to any nondefaulting
Purchaser for damages occasioned by its default hereunder or (y) relieve any
Purchaser of such Purchaser's obligations under the Agreement Among
Underwriters, dated as of October 30, 1996, between the Purchasers (the
"Agreement Among Underwriters"), including, without limitation, those set forth
in Sections 5(b) and 5(c) thereof.
9. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of
MCFI, the Purchasers and their respective officers, directors, employees and
agents set forth in or made pursuant to this Agreement will remain in full force
and effect, regardless of any investigation made by or on behalf of either
Purchaser, MCFI or any of the officers, directors or controlling persons
referred to in Section 6 hereof, and will survive delivery of and payment for
the Privately Offered Certificates. The provisions of Section 6 hereof shall
survive the termination or cancellation of this Agreement.
10. Fees and Expenses. All costs and expenses in connection with the
transactions herein contemplated shall be allocated and borne as provided in the
Agreement Among Underwriters.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors and controlling persons referred to in Section 6 hereof, and
no other person will have any right or obligation hereunder.
12. Applicable Law. This Agreement will be governed by and construed
in accordance with the substantive laws of the State of New York, applicable to
agreements made and to be performed entirely in said state.
13. Miscellaneous. This Agreement supersedes all prior or
contemporaneous agreements and understandings relating to the subject matter
hereof. Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated except by a writing signed by the party against whom
<PAGE>
-12-
enforcement of such change, waiver, discharge or termination is sought. This
Agreement may be signed in any number of counterparts, each of which shall be
deemed an original, which taken together shall constitute one and the same
instrument.
14. Notices. All communications hereunder will be in writing and
effective only upon receipt and, if sent to NationsBank, will be delivered to
NationsBanc Capital Markets, Inc., NationsBank Corporate Center, 100 North Tryon
Street, 11th Floor, Charlotte, North Carolina 28255, Attention: Mr. David A.
Gertner, with a copy to Robert W. Long, Esq., at NationsBank Corporate Center,
100 North Tryon Street, 20th Floor, Charlotte, North Carolina 28255; if sent to
Citibank, will be delivered to Citibank, N.A., 399 Park Avenue, 3rd floor, New
York, New York 10043, Attention: Mr. Richard L. Jarocki, Jr.; if sent to MCFI,
will be delivered to MCFI, at 399 Park Avenue, New York, New York 10043,
Attention: Mr. Richard L. Jarocki, Jr., with a copy to Stephen E. Dietz, Esq. at
425 Park Avenue, New York, New York 10043.
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the undersigned a counterpart hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among MCFI and the Purchasers.
Very truly yours,
MORTGAGE CAPITAL FUNDING, INC.
By: /s/ Richard L. Jarocki, Jr.
----------------------------
Name: Richard L. Jarocki, Jr.
Title: Vice President
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
NATIONSBANC CAPITAL MARKETS, INC.
By:
------------------------------
Name:
Title:
CITIBANK, N.A.
By:/s/ Gary L. Greenberg
-------------------------------
Name: Gary L. Greenberg
Title: Vice President
<PAGE>
SCHEDULE I
Title and Description of the Privately Offered Certificates:
- ------------------------------------------------------------
Multifamily/Commercial Mortgage Pass-Through Certificates, Series 1996-MC2,
Class X, Class F, Class G, Class H, Class R-I and Class R-II Certificates.
Certificate Purchase Agreement, dated as of December 11, 1996
Cut-off Date: December 1, 1996
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Portion of Class Portion of Class
Principal Balance Principal Balance
Initial Class (or, in the case of (or, in the case of
Principal Balance Class X, Class Notional Class X, Class Notional
(or, in the case of Amount) of, or Percentage Amount) of, or Percentage Initial
Class Class X, Class Interest in, Class to be Interest in, Class to be Pass-Through Purchase
Designation Notional Amount)(1) Purchased by Citibank (1) Purchased by NationsBanc (1) Rate Price(2) Rating(3)
- ----------- -------------------- ------------------------- ---------------------------- ------------ -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Class X $458,055,542 $194,920,497 $263,135,045 2.095% 11.453% Aaa/AAA
Class F $25,193,054 $10,720,627 $14,472,427 5.750% 75.718% Ba2/NR
Class G $16,031,943 $6,822,217 $9,209,726 5.750% 61.951% B2/NR
Class H $13,741,671 $5,847,617 $7,894,054 5.750% 39.345% NR/NR
Class R-I N/A 100% 0% N/A N/A NR/NR
Class R-II N/A 100% 0% N/A N/A NR/NR
- ----------
(1) Subject to a variance of plus or minus 5.0%.
(2) Expressed as a percentage of the initial Class Principal Balance or Class Notional Amount, as the case may be, of the relevant
class of Certificates to be purchased. In addition, as to each class of Privately Offered Certificates, the Purchasers will pay
to MCFI accrued interest at the initial Pass- Through Rate therefor from the Cut-off Date to but not including the Closing
Date.
(3) By Moody's Investors Service, Inc. (Moody's) and/or Fitch Investors Service, L.P. ("Fitch"), respectively, as indicated; the
Class H, Class R-I and Class R-II Certificates will not be rated by either Moody's or Fitch.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Closing Time, Date and Location: 10:00 a.m. New York City time on December 19,
1996 at the offices of Thacher Proffitt & Wood.
Issuance and delivery of Privately Offered Certificates: The Privately Offered
Certificates will be issued in fully registered, certificated form (in the case
of the Class F, Class G, Class H, Class R-I and Class R-II Certificates) and in
book entry form (in the case of the Class X Certificates) in minimum
denominations of initial principal balance or notional amount, as the case may
be, of $100,000 (or, in the case of the Class X Certificates, such amount as may
be agreed to) and integral multiples of $1 in excess thereof and, in the case of
the Class R-I and Class R-II Certificates, not less than 5% percentage interest
in the relevant class.
================================================================================
MORTGAGE CAPITAL FUNDING, INC.,
Sponsor,
CITICORP REAL ESTATE, INC.,
Mortgage Loan Seller,
NATIONSBANC MORTGAGE CAPITAL CORPORATION,
Additional Warranting Party,
GMAC COMMERCIAL MORTGAGE CORPORATION,
Master Servicer and Special Servicer,
LASALLE NATIONAL BANK,
Trustee and REMIC Administrator,
and
ABN AMRO BANK N.V.,
Fiscal Agent
---------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of December 1, 1996
---------------------------------
$458,055,542
Multifamily/Commercial Mortgage Pass-Through Certificates
Series 1996-MC2
================================================================================
<PAGE>
TABLE OF CONTENTS
Section Page
------- ----
ARTICLE I
DEFINITIONS; CERTAIN CALCULATIONS IN RESPECT OF
THE MORTGAGE POOL AND THE CERTIFICATES
1.01. Defined Terms............................................ 4
ABN AMRO................................................. 4
Accrued Certificate Interest............................. 4
Acquisition Date......................................... 4
Additional Information................................... 4
Additional Trust Fund Expense............................ 4
Additional Warranting Party.............................. 4
Administrative Fee Rate.................................. 4
Advance.................................................. 5
Advance Interest......................................... 5
Adverse REMIC Event...................................... 5
Affiliate................................................ 5
Agreement................................................ 5
Applicable State Law..................................... 5
Appraisal................................................ 5
Appraisal Reduction Amount............................... 5
Appraised Value.......................................... 6
Assignment of Leases..................................... 6
Assumed Scheduled Payment................................ 6
Available Distribution Amount............................ 7
Balloon Mortgage Loan.................................... 7
Balloon Payment.......................................... 7
Balloon Payment Interest Excess.......................... 7
Balloon Payment Interest Shortfall....................... 8
Bankruptcy Code.......................................... 8
Book-Entry Certificate................................... 8
Business Day............................................. 8
CERCLA................................................... 8
Certificate.............................................. 8
Certificate Account...................................... 8
Certificate Factor....................................... 8
Certificate Notional Amount.............................. 8
Certificate Owner........................................ 9
Certificate Principal Balance............................ 9
Certificate Register" and "Certificate Registrar ........ 9
Certificateholder" or "Holder ........................... 9
i
<PAGE>
Section Page
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Certificateholder Reports ............................... 9
Class ................................................... 9
Class A Certificate ..................................... 9
Class A-1 Certificate ................................... 10
Class A-2 Certificate ................................... 10
Class A-3 Certificate ................................... 10
Class B Certificate ..................................... 10
Class C Certificate ..................................... 10
Class D Certificate ..................................... 10
Class E Certificate ..................................... 10
Class F Certificate ..................................... 10
Class G Certificate ..................................... 10
Class H Certificate ..................................... 10
Class Notional Amount ................................... 10
Class Prepayment Percentage ............................. 11
Class Principal Balance ................................. 11
Class R-I Certificate ................................... 11
Class R-II Certificate .................................. 11
Class X Certificate ..................................... 11
Closing Date" or "Issue Date ............................ 11
Code .................................................... 11
Collection Period ....................................... 11
Commission .............................................. 11
Component ............................................... 11
Component Notional Amount ............................... 12
Confidential Information ................................ 12
Controlling Class ....................................... 12
Corporate Trust Office .................................. 12
Corrected Mortgage Loan ................................. 12
CREI .................................................... 12
CREI Mortgage Loan ...................................... 13
Cross-Collateralized Mortgage Loans ..................... 13
Current Principal Distribution Amount ................... 13
Custodian ............................................... 14
Cut-off Date ............................................ 14
Cut-off Date Balance .................................... 14
Debt Service Coverage Ratio ............................. 14
Defaulted Mortgage Loan ................................. 14
Default Interest ........................................ 14
Definitive Certificate .................................. 14
Delinquent Loan Status Report ........................... 14
Depository .............................................. 15
Depository Participant .................................. 15
Determination Date ...................................... 15
ii
<PAGE>
Section Page
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Directly Operate ........................................ 15
Disqualified Organization ............................... 15
Distributable Certificate Interest ...................... 16
Distribution Account .................................... 16
Distribution Date ....................................... 16
Distribution Date Statement ............................. 16
Document Defect ......................................... 16
Due Date ................................................ 16
Effective Net Mortgage Rate ............................. 17
Eligible Account ........................................ 17
Emergency Advance ....................................... 17
ERISA ................................................... 17
Escrow Payment .......................................... 17
Event of Default ........................................ 18
Exchange Act ............................................ 18
Exemption-Favored Party ................................. 18
Extension Adviser ....................................... 18
FDIC .................................................... 18
FHLMC ................................................... 18
Final Distribution Date ................................. 18
Final Recovery Determination ............................ 18
Fiscal Agent ............................................ 18
Fitch ................................................... 18
FNMA .................................................... 19
GMAC-CM ................................................. 19
Ground Lease ............................................ 19
Hazardous Materials ..................................... 19
Health Care Loans ....................................... 19
Historical Loan Modification Report ..................... 19
Historical Loss Report .................................. 19
HUD-Approved Servicer ................................... 19
Independent ............................................. 20
Independent Contractor .................................. 20
Initial Class Principal Balance ......................... 20
Initial Class Notional Amount ........................... 21
Insurance Policy ........................................ 21
Insurance Proceeds ...................................... 21
Interested Person ....................................... 21
Interest Accrual Period ................................. 21
Interest Only Certificate ............................... 21
Investment Account ...................................... 21
IRS ..................................................... 21
Issue Price ............................................. 21
Late Collections ........................................ 21
iii
<PAGE>
Section Page
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Liquidation Event ....................................... 22
Liquidation Expenses .................................... 22
Liquidation Fee ......................................... 22
Liquidation Fee Rate .................................... 22
Liquidation Proceeds .................................... 23
Loan-to-Value Ratio ..................................... 23
Majority Certificateholder .............................. 23
Master Servicer ......................................... 23
Master Servicer Remittance Amount ....................... 23
Master Servicer Remittance Date ......................... 24
Master Servicing Fee .................................... 24
Master Servicing Fee Rate ............................... 24
Modified Mortgage Loan .................................. 24
Monthly Payment ......................................... 24
Moody's ................................................. 24
Mortgage ................................................ 25
Mortgage File ........................................... 25
Mortgage Loan ........................................... 27
Mortgage Loan Schedule .................................. 27
Mortgage Loan Seller .................................... 28
Mortgage Note ........................................... 28
Mortgage Pool ........................................... 28
Mortgage Rate ........................................... 28
Mortgaged Property ...................................... 28
Mortgagor ............................................... 28
Net Aggregate Prepayment Interest Shortfall ............. 29
Net Investment Earnings ................................. 29
Net Investment Loss ..................................... 29
Net Mortgage Rate ....................................... 29
Net Operating Income .................................... 29
Net Penalty Charges ..................................... 29
NMCC .................................................... 29
NMCC Mortgage Loan ...................................... 29
NMCC Mortgage Loan Purchase Agreement ................... 29
Nonrecoverable Advance .................................. 30
Nonrecoverable P&I Advance .............................. 30
Nonrecoverable Servicing Advance ........................ 30
Non-Registered Certificate .............................. 30
Non-United States Person ................................ 30
Officer's Certificate ................................... 30
Operating Statement Analysis ............................ 30
Opinion of Counsel ...................................... 30
OTS ..................................................... 30
Ownership Interest ...................................... 30
iv
<PAGE>
Section Page
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Pass-Through Rate ....................................... 31
Payment Priority ........................................ 31
Penalty Charges ......................................... 32
Percentage Interest ..................................... 32
Permitted Investments ................................... 32
Permitted Transferee .................................... 33
Person .................................................. 33
Phase I Environmental Assessment ........................ 33
P&I Advance ............................................. 33
Plan .................................................... 33
Prepayment Assumption ................................... 33
Prepayment Interest Excess .............................. 33
Prepayment Interest Shortfall ........................... 33
Prepayment Premium ...................................... 34
Primary Servicing Fee ................................... 34
Primary Servicing Fee Rate .............................. 34
Primary Servicing Office ................................ 34
Principal Distribution Amount ........................... 34
Principal Prepayment .................................... 34
Prospectus Supplement ................................... 34
Purchase Price .......................................... 34
Qualified Appraiser ..................................... 35
Qualified Insurer ....................................... 35
Rating Agency ........................................... 35
Realized Loss ........................................... 35
Record Date ............................................. 36
Registered Certificates ................................. 36
Reimbursement Rate ...................................... 36
REMIC ................................................... 36
REMIC Administrator ..................................... 36
REMIC I ................................................. 36
REMIC I Regular Interest ................................ 36
REMIC I Remittance Rate ................................. 37
REMIC II ................................................ 37
REMIC II Certificate .................................... 37
REMIC II Regular Certificate ............................ 37
REMIC Provisions ........................................ 37
Rents from Real Property ................................ 37
REO Account ............................................. 37
REO Acquisition ......................................... 37
REO Disposition ......................................... 37
REO Extension ........................................... 37
REO Loan ................................................ 37
REO Property ............................................ 38
v
<PAGE>
Section Page
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REO Revenues ............................................ 38
REO Status Report ....................................... 38
REO Tax ................................................. 38
Representing Party ...................................... 38
Request for Release ..................................... 38
Required Appraisal Loan ................................. 38
Required Claims-Paying Ratings .......................... 38
Reserve Account ......................................... 39
Reserve Funds ........................................... 39
Residual Certificate .................................... 39
Responsible Officer ..................................... 39
Responsible Party ....................................... 39
S&P ..................................................... 39
Scheduled Payment ....................................... 39
Securities Act .......................................... 39
Security Agreement ...................................... 40
Senior Certificate ...................................... 40
Senior Principal Distribution Cross-Over Date ........... 40
Sequential Pay Certificate .............................. 40
Servicing Account ....................................... 40
Servicing Advances ...................................... 40
Servicing Fees .......................................... 40
Servicing File .......................................... 41
Servicing Officer ....................................... 41
Servicing Return Date ................................... 41
Servicing Standard ...................................... 41
Servicing Transfer Event ................................ 41
Single Certificate ...................................... 41
Special Servicer ........................................ 42
Special Servicer Loan Status Report ..................... 42
Special Servicing Fee ................................... 42
Special Servicing Fee Rate .............................. 42
Specially Serviced Mortgage Loan ........................ 42
Sponsor ................................................. 44
Standby Fee ............................................. 44
Standby Fee Rate ........................................ 44
Startup Day ............................................. 44
Stated Maturity Date .................................... 44
Stated Principal Balance ................................ 44
Subordinated Certificate ................................ 44
Sub-Servicer ............................................ 44
Sub-Servicing Agreement ................................. 45
Tax Matters Person ...................................... 45
Tax Returns ............................................. 45
vi
<PAGE>
Section Page
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Transfer ................................................ 45
Transferee .............................................. 45
Transferor .............................................. 45
Trust Fund .............................................. 45
Trustee ................................................. 45
Trustee Fee ............................................. 45
Trustee Fee Rate ........................................ 46
UCC ..................................................... 46
UCC Financing Statement ................................. 46
Uncertificated Accrued Interest ......................... 46
Uncertificated Distributable Interest ................... 46
Uncertificated Principal Balance ........................ 46
Uninsured Cause ......................................... 46
United States Person .................................... 46
USPAP ................................................... 47
Voting Rights ........................................... 47
Weighted Average Effective Net Mortgage Rate ............ 47
Workout Fee ............................................. 47
Workout Fee Rate ........................................ 47
1.02. Certain Calculations in Respect of the Mortgage Pool .... 47
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES;
ORIGINAL ISSUANCE OF CERTIFICATES
2.01. Conveyance of Mortgage Loans ............................ 50
2.02. Acceptance of REMIC I by Trustee ........................ 54
2.03. Mortgage Loan Seller's and Additional Warranting Party's
Repurchase of Mortgage Loans for Document Defects and
Certain Breaches of Representations and Warranties ...... 56
2.04. Representations and Warranties of the Sponsor ........... 57
2.05. Representations and Warranties of the Mortgage Loan
Seller and the Additional Warranting Party .............. 58
2.06. Representations and Warranties of the Master Servicer ... 66
2.07. Representations and Warranties of the Special Servicer .. 68
2.08. Representations and Warranties of the Trustee ........... 69
2.09. Representations and Warranties of the Fiscal Agent ...... 71
2.10. Issuance of the Class R-I Certificates; Creation of the
REMIC I Regular Interests ............................... 72
2.11. Conveyance of REMIC I Regular Interests; Acceptance of
REMIC II by the Trustee ................................. 72
2.12. Issuance of the REMIC II Certificates ................... 73
vii
<PAGE>
Section Page
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ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
3.01. Administration of the Mortgage Loans .................... 74
3.02. Collection of Mortgage Loan Payments .................... 75
3.03. Collection of Taxes, Assessments and Similar Items;
Servicing Accounts; Reserve Accounts .................... 75
3.04. Certificate Account and Distribution Account ............ 77
3.05. Permitted Withdrawals From the Certificate Account and
the Distribution Account ................................ 80
3.06. Investment of Funds in the Certificate Account and the
REO Account ............................................. 84
3.07. Maintenance of Insurance Policies; Errors and Omissions
and Fidelity Coverage ................................... 86
3.08. Enforcement of Due-On-Sale Clauses; Assumption
Agreements; Subordinate Financing ....................... 88
3.09. Realization Upon Defaulted Mortgage Loans ............... 90
3.10. Trustee to Cooperate; Release of Mortgage Files ......... 93
3.11. Servicing Compensation; Interest on Servicing Advances;
Payment of Certain Expenses; Obligations of the Trustee
and the Fiscal Agent Regarding Back-up Servicing Advances 94
3.12. Inspections; Collection of Financial Statements ......... 98
3.13. Annual Statement as to Compliance ....................... 100
3.14. Reports by Independent Public Accountants ............... 101
3.15. Access to Certain Information ........................... 101
3.16. Title to REO Property; REO Account ...................... 102
3.17. Management of REO Property .............................. 103
3.18. Sale of Mortgage Loans and REO Properties ............... 106
3.19. Additional Obligations of the Master Servicer and the
Special Servicer ........................................ 110
3.20. Modifications, Waivers, Amendments and Consents ......... 112
3.21. Transfer of Servicing Between Master Servicer and
Special Servicer; Record Keeping ........................ 115
3.22. Sub-Servicing Agreements ................................ 116
3.23. Designation of Special Servicer by the Majority
Certificateholder of the Controlling Class .............. 119
3.24. Extension Adviser; Elections ............................ 120
3.25. Limitation on Liability of Extension Adviser ............ 121
3.26. Duties of Extension Adviser ............................. 121
3.27. Special Servicer to Cooperate with the Extension Adviser 122
3.28. Confidentiality ......................................... 122
3.29. No Solicitation of Prepayments .......................... 123
viii
<PAGE>
Section Page
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ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS AND RELATED MATTERS
4.01. Distributions on the Certificates ....................... 124
4.02. Statements to Certificateholders; Certain Reports by the
Master Servicer and the Special Servicer ................ 130
4.03. P&I Advances ............................................ 138
4.04. Allocation of Realized Losses and Additional Trust Fund
Expenses to the Sequential Pay Certificates ............. 140
4.05. Deemed Distributions on, and Allocations of Realized
Losses and Additional Trust Fund Expenses to, the REMIC I
Regular Interests ....................................... 141
ARTICLE V
THE CERTIFICATES
5.01. The Certificates ........................................ 144
5.02. Registration of Transfer and Exchange of Certificates ... 144
5.03. Book-Entry Certificates ................................. 151
5.04. Mutilated, Destroyed, Lost or Stolen Certificates ....... 152
5.05. Persons Deemed Owners ................................... 153
5.06. Certification by Certificate Owners ..................... 153
ARTICLE VI
THE SPONSOR, THE MORTGAGE LOAN SELLER,
THE ADDITIONAL WARRANTING PARTY, THE MASTER SERVICER,
THE SPECIAL SERVICER AND THE REMIC ADMINISTRATOR
6.01. Liability of the Sponsor, the Mortgage Loan Seller, the
Additional Warranting Party, the Master Servicer, the
Special Servicer and the REMIC Administrator............. 154
6.02. Merger, Consolidation or Conversion of the Sponsor, the
Mortgage Loan Seller, the Additional Warranting Party,
the Master Servicer, the Special Servicer or the REMIC
Administrator...................... ..................... 154
6.03. Limitation on Liability of the Sponsor, the Master
Servicer, the Special Servicer, the REMIC Administrator
and Others............. ................................. 155
6.04. Master Servicer, Special Servicer and REMIC
Administrator Not to Resign.............................. 156
ix
<PAGE>
Section Page
------- ----
6.05. Rights of the Sponsor and the Trustee in Respect of
the Master Servicer, the Special Servicer and the REMIC
Administrator......... .................................. 156
ARTICLE VII
DEFAULT
7.01. Events of Default........................................ 158
7.02. Trustee to Act; Appointment of Successor................. 161
7.03. Notification to Certificateholders....................... 162
7.04. Waiver of Events of Default.............................. 163
7.05. Additional Remedies of Trustee Upon Event of Default..... 163
ARTICLE VIII
CONCERNING THE TRUSTEE
8.01. Duties of Trustee........................................ 164
8.02. Certain Matters Affecting the Trustee and the Fiscal
Agent ................................................... 165
8.03. Trustee Not Liable for Validity or Sufficiency of
Certificates or Mortgage Loans........................... 167
8.04. Trustee and Fiscal Agent May Own Certificates............ 167
8.05. Fees of Trustee; Indemnification of Trustee and the
Fiscal Agent ............................................ 167
8.06. Eligibility Requirements for Trustee..................... 168
8.07. Resignation and Removal of the Trustee................... 169
8.08. Successor Trustee........................................ 170
8.09. Merger or Consolidation of Trustee or Fiscal Agent....... 170
8.10. Appointment of Co-Trustee or Separate Trustee............ 171
8.11. Appointment of Custodians................................ 172
8.12. Access to Certain Information............................ 172
8.13. The Fiscal Agent......................................... 174
8.14. Filings with the Securities and Exchange Commission...... 175
ARTICLE IX
TERMINATION
9.01. Termination Upon Repurchase or Liquidation of All
Mortgage Loans .......................................... 176
9.02. Additional Termination Requirements...................... 178
x
<PAGE>
Section Page
------- ----
ARTICLE X
ADDITIONAL REMIC PROVISIONS
10.01. REMIC Administration..................................... 180
10.02. Sponsor, Master Servicer, Special Servicer, Trustee and
Fiscal Agent to Cooperate with REMIC Administrator....... 183
10.03. Fees of the REMIC Administrator.......................... 183
10.04. Use of Agents............................................ 184
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.01. Amendment................................................ 185
11.02. Recordation of Agreement; Counterparts................... 186
11.03. Limitation on Rights of Certificateholders............... 187
11.04. Governing Law............................................ 188
11.05. Notices.................................................. 188
11.06. Severability of Provisions............................... 189
11.07. Successors and Assigns; Beneficiaries.................... 189
11.08. Article and Section Headings............................. 189
11.09. Notices to the Rating Agencies........................... 189
EXHIBIT A-1 Form of Class X Certificate
EXHIBIT A-2 Form of Class A-1 Certificate
EXHIBIT A-3 Form of Class A-2 Certificate
EXHIBIT A-4 Form of Class A-3 Certificate
EXHIBIT A-5 Form of Class B Certificate
EXHIBIT A-6 Form of Class C Certificate
EXHIBIT A-7 Form of Class D Certificate
EXHIBIT A-8 Form of Class E Certificate
EXHIBIT A-9 Form of Class F Certificate
EXHIBIT A-10 Form of Class G Certificate
EXHIBIT A-11 Form of Class H Certificate
EXHIBIT A-12 Form of Class R-I Certificate
EXHIBIT A-13 Form of Class R-II Certificate
EXHIBIT B-1 Form I of Transferor Certificate Pursuant to Section 5.02(b)
EXHIBIT B-2 Form II of Transferor Certificate Pursuant to Section 5.02(b)
EXHIBIT B-3 Form I of Transferee Certificate Pursuant to Section 5.02(b)
[For QIBs]
EXHIBIT B-4 Form II of Transferee Certificate Pursuant to Section 5.02(b)
[For Institutional Accredited Investors]
xi
<PAGE>
EXHIBIT B-5 Form I of Transferee Certificate for Transfers of Interests in
Book-Entry Certificates
EXHIBIT B-6 Form II of Transferee Certificate for Transfers of Interests in
Book-Entry Certificates
EXHIBIT C-1 Form of Transfer Affidavit and Agreement Pursuant to Section
5.02(d)(i)(B)
EXHIBIT C-2 Form of Transferor Certificate Pursuant to Section 5.02(d)(i)(D)
EXHIBIT D Request for Release
EXHIBIT E Form of REO Status Report
EXHIBIT F-1 Form of Transferee Certificate in Connection with ERISA
(Definitive Certificates)
EXHIBIT F-2 Form of Transferee Certificate in Connection with ERISA
(Book-Entry Certificates)
SCHEDULE I Mortgage Loan Schedule
SCHEDULE II Sub-Servicing Agreements in Effect as of the Closing Date
xii
<PAGE>
This Pooling and Servicing Agreement (this "Agreement"), is dated and
effective as of December 1, 1996, among MORTGAGE CAPITAL FUNDING, INC., as
Sponsor, CITICORP REAL ESTATE, INC., as Mortgage Loan Seller, NATIONSBANC
MORTGAGE CAPITAL CORPORATION, as Additional Warranting Party, GMAC COMMERCIAL
MORTGAGE CORPORATION, as Master Servicer and as Special Servicer, LASALLE
NATIONAL BANK, as Trustee and as REMIC Administrator, and ABN AMRO BANK N.V., as
Fiscal Agent.
PRELIMINARY STATEMENT:
The Sponsor intends to sell mortgage pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple classes
(each, a "Class"), which in the aggregate will evidence the entire beneficial
ownership interest in the trust fund (the "Trust Fund") to be created hereunder.
As provided herein, the REMIC Administrator will elect to treat the
segregated pool of assets consisting of the Mortgage Loans (as defined herein)
and certain other related assets subject to this Agreement as a real estate
mortgage investment conduit (a "REMIC") for federal income tax purposes, and
such segregated pool of assets will be designated as "REMIC I". The Class R-I
Certificates will represent the sole class of "residual interests" in REMIC I
for purposes of the REMIC Provisions (as defined herein) under federal income
tax law. The following table irrevocably sets forth the designation, the
remittance rate (the "REMIC I Remittance Rate"), and the initial stated
principal amount (the initial "Uncertificated Principal Balance") for each of
the "regular interests" in REMIC I (the "REMIC I Regular Interests"). Determined
solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each REMIC I
Regular Interest is the first Distribution Date that is at least two years after
the end of the remaining amortization schedule of the Mortgage Loan that has, as
of the Closing Date (as defined herein), the longest remaining amortization
schedule, irrespective of its scheduled maturity. None of the REMIC I Regular
Interests will be certificated.
REMIC I Initial Uncertificated
Designation Remittance Rate Principal Balance
----------- --------------- ----------------------
A-1 Variable(1) $132,607,079
A-2 Variable(1) $ 24,276,943
A-3 Variable(1) $166,045,134
B Variable(1) $ 27,483,332
C Variable(1) $ 22,902,777
D Variable(1) $ 18,322,221
E Variable(1) $ 11,451,388
F Variable(1) $ 25,193,054
G Variable(1) $ 16,031,943
H Variable(1) $ 13,741,671
- ----------
(1) Calculated in accordance with the definition of "REMIC I Remittance Rate".
<PAGE>
-2-
As provided herein, the REMIC Administrator will elect to treat the
segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC II". The Class R-II Certificates will represent the sole
class of "residual interests" in REMIC II for purposes of the REMIC Provisions
under federal income tax law. The following table irrevocably sets forth the
designation, the pass-through rate (the "Pass-Through Rate"), and the initial
aggregate stated principal amount (the initial "Class Principal Balance") for
each of the Classes of Certificates or Components (as defined herein) thereof
constituting "regular interests" in REMIC II. Determined solely for purposes of
satisfying Treasury regulation section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for each Class of Certificates or Component thereof constituting
"regular interests" in REMIC II is the first Distribution Date that is at least
two years after the end of the remaining amortization schedule of the Mortgage
Loan that has, as of the Closing Date, the longest remaining amortization
schedule, irrespective of its scheduled maturity.
Initial Class
Designation Pass-Through Rate Principal Balance
- ----------- ----------------- -----------------
Component X-A1(1) Variable(2) N/A(3)
Component X-A2(1) Variable(2) N/A(3)
Component X-A3(1) Variable(2) N/A(3)
Component X-B(1) Variable(2) N/A(3)
Component X-C(1) Variable(2) N/A(3)
Component X-D(1) Variable(2) N/A(3)
Component X-E(1) Variable(2) N/A(3)
Component X-F(1) Variable(2) N/A(3)
Component X-G(1) Variable(2) N/A(3)
Component X-H(1) Variable(2) N/A(3)
Class A-1 6.758% per annum $132,607,079
Class A-2 6.909% per annum $24,276,943
Class A-3 7.008% per annum $166,045,134
Class B 7.136% per annum $27,483,332
Class C 7.224% per annum $22,902,777
Class D 7.257% per annum $18,322,221
Class E 7.628% per annum $11,451,388
Class F 5.750% per annum $25,193,054
Class G 5.750% per annum $16,031,943
Class H 5.750% per annum $13,741,671
- ----------
(1) Constitutes a separate "regular interest" in REMIC II evidenced by the
Class X Certificates.
(2) Calculated in accordance with the definition of "Pass-Through Rate".
(3) No Component of the Class X Certificates will have a Class Principal
Balance; rather, each will accrue interest as provided herein on a notional
amount (a "Component Notional Amount") equal to: (a) in the case of
Component X-A1, the Uncertificated Principal Balance of REMIC I Regular
Interest A-1 outstanding from time to time; (b) in the case of Component
X-A2, the Uncertificated Principal Balance of REMIC I Regular Interest A-2
outstanding from time to time; (c) in the case of Component X-A3, the
Uncertificated Principal Balance of REMIC I Regular Interest A-3
outstanding from time to time; (d) in the case of Component X-B, the
Uncertificated Principal Balance of REMIC I Regular Interest B outstanding
from time to time; (e) in the case of Component X-C, the Uncertificated
Principal Balance of REMIC I Regular Interest C outstanding from time to
time; (f) in the case of Component X-D, the Uncertificated Principal
Balance of REMIC I Regular Interest D outstanding from time to time; (g) in
the case of Component X-E, the Uncertificated Principal Balance of REMIC I
Regular Interest E outstanding from time to time; (h) in the case of
Component X-F, the Uncertificated Principal Balance of REMIC I Regular
Interest F outstanding from time to time; (i) in the case of Component X-G,
the Uncertificated Principal Balance of REMIC I Regular Interest G
outstanding from time
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to time; and (j) in the case of Component X-H, the Uncertificated Principal
Balance of REMIC I Regular Interest H outstanding from time to time.
The aggregate of the initial Stated Principal Balances of the Mortgage
Loans, the aggregate of the initial Uncertificated Principal Balances of the
REMIC I Regular Interests, and the aggregate of the initial Class Principal
Balances of the respective Classes of REMIC II Regular Certificates will, in
each such case, be $458,055,542.
In consideration of the mutual agreements herein contained, the
Sponsor, the Mortgage Loan Seller, the Additional Warranting Party, the Master
Servicer, the Special Servicer, the Trustee, the REMIC Administrator and the
Fiscal Agent agree as follows:
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ARTICLE I
DEFINITIONS; CERTAIN CALCULATIONS IN RESPECT OF
THE MORTGAGE POOL AND THE CERTIFICATES
SECTION 1.01. Defined Terms.
Whenever used in this Agreement, including in the Preliminary
Statement, the following words and phrases, unless the context otherwise
requires, shall have the meanings specified in this Article.
"ABN AMRO": ABN AMRO Bank N.V. or its successor in interest.
"Accrued Certificate Interest": With respect to any Class of REMIC II
Regular Certificates (other than the Class X Certificates), for any Distribution
Date, one month's interest (calculated on the basis of a 360-day year consisting
of twelve 30-day months) at the Pass-Through Rate applicable to such Class of
Certificates for such Distribution Date, accrued on the related Class Principal
Balance of such Class of Certificates outstanding immediately prior to such
Distribution Date. With respect to the Class X Certificates, for any
Distribution Date, the aggregate Accrued Certificate Interest in respect of the
various Components of such Class of Certificates for such Distribution Date.
With respect to any Component of the Class X Certificates, for any Distribution
Date, one month's interest (calculated on the basis of a 360-day year consisting
of twelve 30-day months) at the Pass-Through Rate applicable to such Component
for such Distribution Date, accrued on the Component Notional Amount of such
Component outstanding immediately prior to such Distribution Date. The Accrued
Certificate Interest in respect of any Class of REMIC II Regular Certificates or
Component thereof for any Distribution Date shall be deemed to have accrued
during the applicable Interest Accrual Period.
"Acquisition Date": With respect to any REO Property, the first day on
which such REO Property is considered to be acquired by the Trust Fund within
the meaning of Treasury Regulation Section 1.856-6(b)(1), which is the first day
on which the Trust Fund is treated as the owner of such REO Property for federal
income tax purposes.
"Additional Information": As defined in Section 4.02(a).
"Additional Trust Fund Expense": Any expense incurred or shortfall
experienced with respect to the Trust Fund and not otherwise included in the
calculation of a Realized Loss, that would result in the REMIC II Regular
Certificateholders' receiving less than the full amount of principal and/or
interest to which they are entitled on any Distribution Date.
"Additional Warranting Party": NMCC.
"Administrative Fee Rate": With respect to each Mortgage Loan and REO
Loan, the sum of the related Master Servicing Fee Rate and the Trustee Rate.
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"Advance": Any P&I Advance or Servicing Advance.
"Advance Interest": Interest accrued on any Advance at the
Reimbursement Rate and payable to the Master Servicer, the Special Servicer, the
Trustee or the Fiscal Agent, as the case may be, all in accordance with Section
3.11(f) or Section 4.03(d), as applicable.
"Adverse REMIC Event": With respect to each of REMIC I and REMIC II,
either (i) the endangerment of the status of such REMIC as a REMIC or (ii),
except as permitted by Section 3.17(a), the imposition of a tax upon such REMIC
or any of its assets or transactions (including, without limitation, the tax on
prohibited transactions as defined in Section 860F(a)(2) of the Code and the tax
on certain contributions set forth in Section 860G(d) of the Code).
"Affiliate": With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agreement": This Pooling and Servicing Agreement, together with all
amendments hereof and supplements hereto.
"Applicable State Law": For purposes of Article X, the Applicable
State Law shall be (a) the laws of the state of New York, (b) the laws of the
states in which the Corporate Trust Office of the Trustee and the Primary
Servicing Offices of the Master Servicer and the Special Servicer are located,
(c) the laws of the states in which any portion of the Trust Fund is maintained,
(d) such other state or local law whose applicability shall have been brought to
the attention of the REMIC Administrator by either (i) an Opinion of Counsel
delivered to it, or (ii) written notice from the appropriate taxing authority as
to the applicability of such state law, and (e) such other state or local law as
to which the REMIC Administrator has actual knowledge of applicability.
"Appraisal": With respect to any Mortgaged Property or REO Property as
to which an appraisal is required or permitted to be performed pursuant to the
terms of this Agreement, either: (i) a narrative appraisal complying with USPAP
conducted by a Qualified Appraiser in the case of Mortgage Loans and REO Loans
with a Stated Principal Balance as of the date of such appraisal of greater than
$1,000,000; or (ii) a limited appraisal and a summary report of the "market
value" of the Mortgaged Property, as defined in 12 CFR ss.225.62(g), conducted
by a Qualified Appraiser in the case of Mortgage Loans and REO Loans with a
Stated Principal Balance as of the date of such appraisal of $1,000,000 or less.
"Appraisal Reduction Amount": With respect to any Required Appraisal
Loan, an amount (as calculated on the Determination Date immediately succeeding
the date on which the most recent Appraisal that meets the requirements of
Section 3.19(b) in respect of such
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Required Appraisal Loan, was obtained by the Master Servicer or the Special
Servicer, as the case may be) 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 by or on behalf of the Master Servicer, the Trustee or
the Fiscal Agent, all accrued and unpaid interest on such Required Appraisal
Loan through the most recent Due Date prior to such Determination Date at a per
annum rate equal to the related Net Mortgage Rate, (iii) all accrued but unpaid
Master Servicing Fees and Special Servicing Fees in respect of such Required
Appraisal Loan, (iv) all related unreimbursed Advances made by or on behalf of
the Master Servicer, the Special Servicer, the Trustee or the Fiscal Agent in
respect of such Required Appraisal Loan, together with all unpaid Advance
Interest accrued on such Advances, and (v) all currently due but unpaid real
estate taxes and assessments, insurance premiums and, if applicable, ground
rents in respect of the related Mortgaged Property or REO Property, net of any
Escrow Payments or other reserves held by the Master Servicer or the Special
Servicer with respect to any such item, over (b) 90% of an amount equal to (i)
the Appraised Value of the related Mortgaged Property or REO Property, as
applicable, as determined by the Appraisal referred to in the parenthetical
above, net of (ii) the amount of any liens on such property (to the extent not
accounted for in clause (a)(v) of this definition) that are prior to the lien of
the Required Appraisal Loan; provided that, if an Appraisal is required to be
obtained pursuant to Section 3.19(b) but has not been obtained within the 30-day
period contemplated by such Section, then until the date such Appraisal is
obtained the "Appraisal Reduction Amount" for the subject Mortgage Loan or REO
Loan will be deemed to equal 30% of the amount calculated pursuant to clause (a)
of this definition (after receipt of such Appraisal, the Appraisal Reduction
Amount, if any, for such Mortgage Loan or REO Loan will be calculated without
regard to this proviso).
"Appraised Value": As of any date of determination, the appraised
value of a Mortgaged Property based upon the most recent Appraisal obtained
pursuant to this Agreement.
"Assignment of Leases": With respect to any Mortgaged Property, any
assignment of leases, rents and profits or similar document or instrument
executed by the Mortgagor, assigning to the mortgagee all of the income, rents
and profits derived from the ownership, operation, leasing or disposition of all
or a portion of such Mortgaged Property, in the form which was duly executed,
acknowledged and delivered, as amended, modified, renewed or extended through
the date hereof and from time to time hereafter.
"Assumed Scheduled Payment": With respect to any Balloon 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 Scheduled Payment (other
than the related delinquent Balloon Payment) is due on such Due Date, the
scheduled monthly payment of principal and/or interest deemed to be due in
respect thereof on such Due Date equal to the Scheduled Payment that would have
been due in respect of such Mortgage Loan on such Due Date if it had been
required to continue to accrue interest in accordance with its terms, and to pay
principal in accordance with the amortization schedule
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(if any), in effect immediately prior to, and without regard to the occurrence
of, its most recent scheduled maturity date (as such may have been extended 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
3.20). With respect to any REO 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 Scheduled Payment (or, in the case of a Balloon Mortgage
Loan described in the preceding sentence of this definition, the Assumed
Scheduled Payment) that was due in respect of the related Mortgage Loan on the
last Due Date prior to its becoming an REO Loan.
"Available Distribution Amount": With respect to any Distribution
Date, an amount equal to (a) the balance on deposit in the Distribution Account
as of 11:30 a.m. (New York City time) on such Distribution Date (or such later
time on such date as of which distributions are made on the Certificates),
including, without limitation, if and to the extent on deposit therein as of
such time, the Master Servicer Remittance Amount for the related Master Servicer
Remittance Date, any P&I Advances made by the Master Servicer, the Trustee or
the Fiscal Agent to cover uncollected Scheduled Payments due and/or Assumed
Scheduled Payments deemed due during the related Collection Period, and any
payments made by the Master Servicer to cover Balloon Payment Interest
Shortfalls and/or Prepayment Interest Shortfalls incurred during the related
Collection Period, net of (b) any portion of the amounts described in clause (a)
of this definition that represents one or more of the following: (i) any amounts
payable or reimbursable to any Person from the Distribution Account pursuant to
any of clauses (ii) through (vi) of Section 3.05(b), (ii) Prepayment Premiums,
(iii) any amounts deposited in the Distribution Account in error, and (iv)
except in the case of the Final Distribution Date, any of the amounts described
in clauses (b)(i) and (b)(ii) of the definition of "Master Servicer Remittance
Amount".
"Balloon Mortgage Loan": 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 Stated Maturity Date and as to
which, in accordance with such terms, the Scheduled Payment due on its Stated
Maturity Date is larger than the Scheduled Payment due on the Due Date next
preceding its Stated Maturity Date.
"Balloon Payment": With respect to any Balloon Mortgage Loan as of any
date of determination, the Scheduled Payment payable on the Stated Maturity Date
of such Mortgage Loan.
"Balloon Payment Interest Excess": With respect to any Balloon
Mortgage Loan as to which the Stated Maturity Date occurs after the first day
of, but on or before the Determination Date in, any calendar month, the amount
of interest (net of related Servicing Fees) accrued on such Mortgage Loan from
the beginning of such month to, but not including, such Stated Maturity Date, to
the extent such interest is actually paid by the related Mortgagor
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in connection with the payment of the related Balloon Payment during the
Collection Period in which such Stated Maturity Date occurs.
"Balloon Payment Interest Shortfall": With respect to any Balloon
Mortgage Loan as to which the Stated Maturity Date occurs after the
Determination Date in any calendar month, the amount of interest (net of related
Master Servicing Fees) that would have accrued on such Mortgage Loan from such
Stated Maturity Date through the end of such calendar month, to the extent not
paid by the related Mortgagor.
"Bankruptcy Code": The federal Bankruptcy Code, as amended from time
to time (Title 11 of the United States Code).
"Book-Entry Certificate": Any Certificate registered in the name of
the Depository or its nominee.
"Business Day": Any day other than a Saturday, a Sunday or a day on
which banking institutions in New York, New York and the cities in which the
Primary Servicing Offices of the Master Servicer and Special Servicer and the
Corporate Trust Office of the Trustee are located, are authorized or obligated
by law or executive order to remain closed.
"CERCLA": The Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.
"Certificate": Any one of the Sponsor's Multifamily/Commercial
Mortgage Pass- Through Certificates, Series 1996-MC2, as executed by the Trustee
and authenticated and delivered hereunder by the Certificate Registrar.
"Certificate Account": The segregated account or accounts created and
maintained by the Master Servicer pursuant to Section 3.04(a) on behalf of the
Trustee in trust for Certificateholders, which shall be entitled "[Name of
Master Servicer], as Master Servicer, in trust for the registered holders of
Mortgage Capital Funding, Inc., Multifamily/Commercial Mortgage Pass-Through
Certificates, Series 1996-MC2".
"Certificate Factor": With respect to any Class of REMIC II Regular
Certificates, as of any date of determination, a fraction, expressed as a
decimal carried to eight places, the numerator of which is the then related
Class Principal Balance or Class Notional Amount, as the case may be, and the
denominator of which is the related Initial Class Principal Balance or Initial
Class Notional Amount, as the case may be.
"Certificate Notional Amount": 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 Notional Amount of the Class X Certificates.
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"Certificate Owner": With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Certificate as reflected on the books
of the Depository or on the books of a Depository Participant or on the books of
an indirect participating brokerage firm for which a Depository Participant acts
as agent.
"Certificate Principal Balance": With respect to any Sequential Pay
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" and "Certificate Registrar": The register
maintained and the registrar appointed pursuant to Section 5.02.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in 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 Sponsor, the Mortgage
Loan Seller, the Additional Warranting Party, the Master Servicer, the Special
Servicer, the REMIC Administrator, the Trustee or the Fiscal Agent 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 7.04 and 11.01, except in connection with the Controlling Class
exercising its rights under Section 3.23 or unless such Persons collectively own
an entire Class of Certificates and only the Holders of such Class of
Certificates are entitled to grant such consent, approval or waiver. The Trustee
shall be entitled to request and rely upon a certificate of the Sponsor, the
Mortgage Loan Seller, the Additional Warranting Party, the Master Servicer, the
Special Servicer or, if other than the Trustee, the REMIC Administrator, as the
case may be, 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 Depository and the Depository
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.
"Certificateholder Reports": As defined in Section 4.02(a).
"Class": Collectively, all of the Certificates bearing the same
alphabetical and, if applicable, numerical class designation.
"Class A Certificate": Any one of the Class A-1, Class A-2 or Class
A-3 Certificates.
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"Class A-1 Certificate": Any one of the Certificates with a "Class
A-1" designation on the face thereof, substantially in the form of Exhibit A-2
attached hereto, and evidencing a "regular interest" in REMIC II for purposes of
the REMIC Provisions.
"Class A-2 Certificate": Any one of the Certificates with a "Class
A-2" designation on the face thereof, substantially in the form of Exhibit A-3
attached hereto, and evidencing a "regular interest" in REMIC II for purposes of
the REMIC Provisions.
"Class A-3 Certificate": Any one of the Certificates with a "Class
A-3" designation on the face thereof, substantially in the form of Exhibit A-4
attached hereto and evidencing a "regular interest" in REMIC II for purposes of
the REMIC Provisions.
"Class B Certificate": Any one of the Certificates with a "Class B"
designation on the face thereof, substantially in the form of Exhibit A-5
attached hereto, and evidencing a "regular interest" in REMIC II for purposes of
the REMIC Provisions.
"Class C Certificate": Any one of the Certificates with a "Class C"
designation on the face thereof, substantially in the form of Exhibit A-6
attached hereto, and evidencing a "regular interest" in REMIC II for purposes of
the REMIC Provisions.
"Class D Certificate": Any one of the Certificates with a "Class D"
designation on the face thereof, substantially in the form of Exhibit A-7
attached hereto, and evidencing a "regular interest" in REMIC II for purposes of
the REMIC Provisions.
"Class E Certificate": Any one of the Certificates with a "Class E"
designation on the face thereof, substantially in the form of Exhibit A-8
attached hereto, and evidencing a "regular interest" in REMIC II for purposes of
the REMIC Provisions.
"Class F Certificate": Any one of the Certificates with a "Class F"
designation on the face thereof, substantially in the form of Exhibit A-9
attached hereto, and evidencing a "regular interest" in REMIC II for purposes of
the REMIC Provisions.
"Class G Certificate": Any one of the Certificates with a "Class G"
designation on the face thereof, substantially in the form of Exhibit A-10
attached hereto, and evidencing a "regular interest" in REMIC II for purposes of
the REMIC Provisions.
"Class H Certificate": Any one of the Certificates with a "Class H"
designation on the face thereof, substantially in the form of Exhibit A-11
attached hereto, and evidencing a "regular interest" in REMIC II for purposes of
the REMIC Provisions.
"Class Notional Amount": The aggregate notional principal amount on
which the Class X Certificates collectively accrue interest equal to the
aggregate of the Component Notional Amounts of the respective Components of the
Class X Certificates outstanding from time to time.
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"Class Prepayment Percentage": With respect to each Class of
Sequential Pay Certificates entitled to distributions of principal on any
Distribution Date, a fraction, expressed as a percentage, the numerator of which
is the portion of the total Principal Distribution Amount (if any) to be
distributed to the Holders of such Class of Certificates on such Distribution
Date, and the denominator of which is the total Principal Distribution Amount to
be distributed on such Distribution Date.
"Class Principal Balance": The aggregate principal amount of any Class
of Sequential Pay Certificates outstanding as of any date of determination. On
each Distribution Date, the Class Principal Balance of each Class of the
Sequential Pay Certificates shall be reduced by the amount of any distributions
of principal made thereon on such Distribution Date pursuant to Section 4.01(a)
and, if and to the extent appropriate, shall be further reduced on such
Distribution Date as provided in Section 4.04.
"Class R-I Certificate": Any one of the Certificates with a "Class
R-I" designation on the face thereof, substantially in the form of Exhibit A-12
attached hereto, and evidencing the sole class of "residual interests" in REMIC
I for purposes of the REMIC Provisions.
"Class R-II Certificate": Any one of the Certificates with a "Class
R-II" designation on the face thereof, substantially in the form of Exhibit A-13
attached hereto, and evidencing the sole class of "residual interests" in REMIC
II for purposes of the REMIC Provisions.
"Class X Certificate": Any one of the Certificates with a "Class X"
designation on the face thereof, substantially in the form of Exhibit A-1, and
evidencing 10 separate "regular interests" in REMIC II for purposes of the REMIC
Provisions.
"Closing Date" or "Issue Date": December 19, 1996.
"Code": The Internal Revenue Code of 1986, as amended.
"Collection Period": With respect to any Distribution Date, the period
commencing immediately following the Determination Date in the month preceding
the month in which such Distribution Date occurs (or, in the case of the initial
Distribution Date, commencing immediately following the Cut-off Date) and ending
on and including the related Determination Date.
"Commission": The Securities and Exchange Commission.
"Component": With respect to the Class X Certificates, any of the 10
components of the beneficial ownership interest evidenced by the Class X
Certificates in the Trust Fund, designated as "Component X-A1", "Component
X-A2", "Component X-A3", "Component X-B", "Component X-C", "Component X-D",
"Component X-E", "Component X-F", "Component
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X-G" and "Component X-H", respectively. Each such Component constitutes a
separate "regular interest" in REMIC II.
"Component Notional Amount": The notional principal amount on which
any Component of the Class X Certificates accrues interest equal to: (a) in the
case of Component X-A1, the Uncertificated Principal Balance of REMIC I Regular
Interest A-1 outstanding from time to time; (b) in the case of Component X-A2,
the Uncertificated Principal Balance of REMIC I Regular Interest A-2 outstanding
from time to time; (c) in the case of Component X- A3, the Uncertificated
Principal Balance of REMIC I Regular Interest A-3 outstanding from time to time;
(d) in the case of Component X-B, the Uncertificated Principal Balance of REMIC
I Regular Interest B outstanding from time to time; (e) in the case of Component
X-C, the Uncertificated Principal Balance of REMIC I Regular Interest C
outstanding from time to time; (f) in the case of Component X-D, the
Uncertificated Principal Balance of REMIC I Regular Interest D outstanding from
time to time; (g) in the case of Component X-E, the Uncertificated Principal
Balance of REMIC I Regular Interest E outstanding from time to time; (h) in the
case of Component X-F, the Uncertificated Principal Balance of REMIC I Regular
Interest F outstanding from time to time; (i) in the case of Component X-G, the
Uncertificated Principal Balance of REMIC I Regular Interest G outstanding from
time to time; and (j) in the case of Component X-H, the Uncertificated Principal
Balance of REMIC I Regular Interest H outstanding from time to time.
"Confidential Information": As defined in Section 3.28.
"Controlling Class": As of any date of determination, the outstanding
Class of Sequential Pay Certificates with the lowest Payment Priority (the Class
A Certificates being treated as a single Class for this purpose) that has a then
outstanding Class Principal Balance at least equal to 25% of the Initial Class
Principal Balance thereof (or, if no Class of Sequential Pay Certificates has a
Class Principal Balance at least equal to 25% of the Initial Class Principal
Balance thereof, then the "Controlling Class" shall be the outstanding Class of
Sequential Pay Certificates with the then largest remaining Class Principal
Balance).
"Corporate Trust Office": The principal corporate trust office of the
Trustee at which at any particular time its corporate trust business with
respect to this Agreement shall be administered, which office at the date of the
execution of this Agreement is located at 135 South LaSalle Street, Suite 1740,
Chicago, Illinois 60674-4107, Attention: Asset-Backed Securities Trust Services
- - MCFI 1996-MC2.
"Corrected Mortgage Loan": Any Mortgage Loan that had been a Specially
Serviced Mortgage Loan but 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).
"CREI": Citicorp Real Estate, Inc. or its successor in interest.
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"CREI Mortgage Loan": Any of the Mortgage Loans, other than NMCC
Mortgage Loans. CREI Mortgage Loans are identified as such on the Mortgage Loan
Schedule under the heading "Loan Seller".
"Cross-Collateralized Mortgage Loans": Any two or more Mortgage Loans
listed on the Mortgage Loan Schedule that are cross-collateralized and
cross-defaulted with each other.
"Current Principal Distribution Amount": With respect to any
Distribution Date, an amount (calculated in accordance with Section 1.02) equal
to the aggregate of:
(a) the principal portions of all Scheduled Payments (other than
Balloon Payments) and any Assumed Scheduled Payments due or deemed due, as
the case may be, in respect of the Mortgage Loans and any REO Loans for
their respective Due Dates occurring during the related Collection Period;
(b) all Principal Prepayments received on the Mortgage Loans during
the related Collection Period;
(c) with respect to any Balloon Mortgage Loan as to which the related
Stated Maturity Date occurred during or prior to the related Collection
Period, any payment of principal (exclusive of any Principal Prepayment and
any amount described in subclause (d) below) that was made by or on behalf
of the related Mortgagor during the related Collection Period, net of any
portion of such payment that represents a recovery of the principal portion
of any Scheduled Payment (other than a Balloon Payment) due, or the
principal portion of any Assumed Scheduled Payment deemed due, in respect
of such Balloon Mortgage Loan on a Due Date during or prior to the related
Collection Period and not previously recovered;
(d) all Liquidation Proceeds and Insurance Proceeds received on or in
respect of the Mortgage Loans during the related Collection Period that
were identified and applied by the Master Servicer as recoveries of
principal thereof, in each case net of any portion of such amounts that
represents a recovery of the principal portion of any Scheduled Payment
(other than a Balloon Payment) due, or of the principal portion of any
Assumed Scheduled 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 recovered; and
(e) all Liquidation Proceeds, Insurance Proceeds and REO Revenues
received on or in respect of any REO Properties during the related
Collection Period that were identified and applied by the Master Servicer
as recoveries of principal of the related REO Loans, in each case net of
any portion of such amounts that represents a recovery of the principal
portion of any Scheduled Payment (other than a Balloon Payment) due, or of
the principal portion of any Assumed Scheduled Payment deemed due, in
respect
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of any such REO Loan or the related Mortgage Loan on a Due Date during or
prior to the related Collection Period and not previously recovered.
"Custodian": A Person who is at any time appointed by the Trustee
pursuant to Section 8.11 as a document custodian for the Mortgage Files, which
Person shall not be the Sponsor, the Mortgage Loan Seller or an Affiliate of
either of them.
"Cut-off Date": December 1, 1996.
"Cut-off Date Balance": With respect to any Mortgage Loan, the
outstanding principal balance of such Mortgage Loan as of the Cut-off Date, net
of all unpaid payments of principal due in respect thereof on or before such
date.
"Debt Service Coverage Ratio": With respect to any Mortgage Loan, as
of any date of determination, and calculated without regard to any
cross-collateralization feature of such Mortgage Loan, the ratio of (x) the Net
Operating Income (before payment of any debt service on such Mortgage Loan)
generated by the related Mortgaged Property during the most recently ended
period of not more than twelve months or less than three months for which
financial statements (whether or not audited) have been received by or on behalf
of the Mortgage Loan Seller (prior to the Closing Date) or the Master Servicer
or Special Servicer (following the Closing Date) (such Net Operating Income to
be annualized if the relevant period is less than twelve months), to (y) the
product of the amount of the Monthly Payment in effect for such Mortgage Loan as
of such date of determination, multiplied by 12.
"Defaulted Mortgage Loan": Any Specially Serviced Mortgage Loan as to
which a material default has occurred or a default in respect of any payment
thereon is reasonably foreseeable, and which the Special Servicer has
determined, in its reasonable and good faith judgment, will become the subject
of a foreclosure sale or similar proceedings (the basis for which determination
shall be set forth in an Officer's Certificate to be delivered to the Master
Servicer and the Trustee).
"Default Interest": With respect to any Mortgage Loan (or related REO
Loan), any amounts collected thereon, other than late payment charges and
Prepayment Premiums, that represent penalty interest in excess of interest on
the principal balance of such Mortgage Loan (or REO Loan) accrued at the related
Mortgage Rate.
"Definitive Certificate": As defined in Section 5.03(a).
"Delinquent Loan Status Report": A report or reports setting forth,
among other things, those Mortgage Loans which, as of the close of business on
the last day of the most recently ended calendar month were (i) delinquent 30-59
days, (ii) delinquent 60-89 days, (iii) delinquent 90 days or more, (iv) current
but specially serviced, (v) in foreclosure but as to which the related Mortgaged
Property had not become REO Property, or (vi) related to a Mortgaged
<PAGE>
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Property which had become REO Property, together with such additional
information in respect of each such Mortgage Loan as is contemplated on page B-6
of the Prospectus Supplement.
"Depository": The Depository Trust Company, or any successor
Depository hereafter named. The nominee of the initial Depository for purposes
of registering those Certificates that are to be Book-Entry Certificates, is
Cede & Co. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(3) of the Uniform Commercial Code of the State of New
York and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act.
"Depository Participant": A broker, dealer, bank or other financial
institution or other Person for whom from time to time the Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Determination Date": With respect to any Distribution Date, the 10th
day of the month in which such Distribution Date occurs, or if such 10th day is
not a Business Day, the Business Day immediately preceding.
"Directly Operate": 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 (other than the sale of an REO Property pursuant to Section 3.18(d)),
the performance of any construction work thereon or any use of such REO Property
in a trade or business conducted by REMIC I 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, or funds,
repairs or capital expenditures with respect to such REO Property (including,
without limitation, construction activity to effect repairs or in conjunction
with leasing activity).
"Disqualified Organization": Any of the following: (i) the United
States or a possession thereof, 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)
any organization (except 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), (iv) rural electric and telephone
cooperatives described in Section 1381 of the Code or (v) any other Person so
designated by the REMIC Administrator based upon an Opinion of Counsel that the
holding of an Ownership Interest in a Residual Certificate by such Person may
cause the Trust Fund or any Person having an Ownership Interest in any Class of
Certificates, other than such Person, to incur a liability for any federal tax
imposed under the Code that would not otherwise be imposed
<PAGE>
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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": With respect to any Class of
REMIC II Regular Certificates or Component thereof, for any Distribution Date,
the Accrued Certificate Interest in respect of such Class of Certificates or
Component, as the case may be, for such Distribution Date, reduced (to not less
than zero) by that portion, if any, of the Net Aggregate Prepayment Interest
Shortfall for such Distribution Date allocated to such Class of Certificates or
Component as set forth below. The Net Aggregate Prepayment Interest Shortfall,
if any, for each Distribution Date shall be allocated to the respective Classes
of REMIC II Regular Certificates on such Distribution Date as follows: first, to
the respective Classes of REMIC II Regular Certificates (other than the Senior
Certificates), sequentially in reverse alphabetical order of Class designation,
in each case up to the amount of any Accrued Certificate Interest in respect of
such Class of Certificates for such Distribution Date; and thereafter, among the
respective Classes of Senior Certificates, up to, and pro rata in accordance
with, the respective amounts of Accrued Certificate Interest for each such Class
of Senior Certificates for such Distribution Date. That portion, if any, of the
Net Aggregate Prepayment Interest Shortfall for any Distribution Date so
allocated to the Class X Certificates shall be allocated among the respective
Components of the Class X Certificates, up to, and pro rata in accordance with,
the respective amounts of Accrued Certificate Interest for each such Component
for such Distribution Date.
"Distribution Account": The segregated account or accounts created and
maintained by the Trustee pursuant to Section 3.04(b) in trust for the
Certificateholders, which shall be entitled "[Name of Trustee], as Trustee, in
trust for the registered holders of Mortgage Capital Funding, Inc.,
Multifamily/Commercial Mortgage Pass-Through Certificates, Series 1996-MC2".
"Distribution Date": The 20th day of any month, or if such 20th day is
not a Business Day, the Business Day immediately following, commencing in
January 1997.
"Distribution Date Statement": As defined in Section 4.02(a).
"Document Defect": As defined in Section 2.02(e).
"Due Date": With respect to (i) any Mortgage Loan on or prior to its
Stated Maturity Date, the day of the month set forth in the related Mortgage
Note on which each Monthly Payment on such Mortgage Loan is scheduled to be
first due; (ii) any Mortgage Loan after its Stated Maturity Date, the day of the
month set forth in the related Mortgage Note on which each Monthly Payment on
such Mortgage Loan had been scheduled to be first due; and (iii) any REO Loan,
the day of the month set forth in the related Mortgage Note on which each
Monthly Payment on the related Mortgage Loan had been scheduled to be first due.
<PAGE>
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"Effective Net Mortgage Rate": With respect to any Mortgage Loan or
REO Loan, for any Distribution Date, (a) if the Mortgage Note for such Mortgage
Loan or REO Loan provides that interest accrues on such Mortgage Loan or REO
Loan, as the case may be, on the basis of a 360-day year consisting of twelve
30-day months (a"30/360 basis"), the related Net Mortgage Rate in effect for
such Mortgage Loan as of the commencement of the related Collection Period, and
(b) if the Mortgage Note for such Mortgage Loan or REO Loan provides that
interest accrues on such Mortgage Loan or REO Loan, as the case may be, other
than on a 30/360 basis, the annualized rate at which interest would have to
accrue thereon on a 30/360 basis during the one-month period preceding such
Mortgage Loan's or REO Loan's Due Date in the related Collection Period in order
to produce the actual amount of interest accrued (or, if such Mortgage Loan or
REO Loan is prepaid or otherwise liquidated during such one-month period, that
otherwise would have accrued) in respect of such Mortgage Loan at its Mortgage
Rate (net of the Administrative Fee Rate) during such one-month period.
"Eligible Account": Any of (i) an account maintained with a federal or
state chartered depository institution or trust company, including, without
limitation, the Trustee (if it meets the following rating criteria), the
long-term unsecured debt obligations of which (or of such institution's parent
holding company) are rated "Aa2" or better by Moody's and "AA" or better by
Fitch if the deposits are to be held in the account for more than 30 days, or
the short-term unsecured debt obligations of which (or of such institution's
parent holding company) are rated "P-1" or better by Moody's and "F-1+" by Fitch
if the deposits are to be held in the account for 30 days or less, in each case,
at any time funds are on deposit therein, (ii) a segregated trust account or
accounts maintained with the trust department of a federally chartered
depository institution or trust company, including, without limitation, the
Trustee, acting in its fiduciary capacity, (iii) a segregated trust account or
accounts maintained with the trust department of a state chartered depository
institution or trust company, including, without limitation, the Trustee, acting
in its fiduciary capacity and subject to regulations regarding fiduciary funds
on deposit therein substantially similar to 12 CFR ss. 9.10(b), (iv) an account
maintained with Bankers Trust Company provided that, at any time that funds are
on deposit therein, the long-term or short-term unsecured debt obligations of
Bankers Trust Company are rated at least "A2" or "P-1", as the case may be, by
Moody's and "A" or "F-1+", as the case may be, by Fitch, or (v) any other
account which would not result in the downgrade, qualification or withdrawal of
the rating then assigned by any Rating Agency to any Class of Certificates (as
confirmed in writing by each Rating Agency).
"Emergency Advance": Any Servicing Advance that must be made within 10
days of the Special Servicer's becoming aware that it must be made in order to
avoid any material penalty, any material harm to a Mortgaged Property or any
other material adverse consequence to the Trust Fund.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Payment": 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
<PAGE>
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taxes, assessments, insurance premiums and similar items in respect of the
related Mortgaged Property.
"Event of Default": One or more of the events described in Section
7.01(a).
"Exchange Act": The Securities Exchange Act of 1934, as amended.
"Exemption-Favored Party": Any of (i) Citicorp or NationsBank
Corporation ("NationsBank"), (ii) any Person directly or indirectly, through one
or more intermediaries, controlling, controlled by or under common control with
Citicorp or NationsBank and (iii) any member of a syndicate or selling group of
which Citicorp or NationsBank or a person described in clause (ii) is a manager
or co-manager with respect to a Class of Certificates.
"Extension Adviser": As defined in Section 3.24.
"FDIC": Federal Deposit Insurance Corporation or any successor.
"FHLMC": Federal Home Loan Mortgage Corporation or any successor.
"Final Distribution Date": The final Distribution Date on which any
distributions are to be made on the Certificates as contemplated by Section
9.01.
"Final Recovery Determination": A determination by the Special
Servicer with respect to any defaulted Mortgage Loan or REO Property and,
accordingly, the related REO Loan (other than a Mortgage Loan or REO Property,
as the case may be, purchased by the Mortgage Loan Seller or the Additional
Warranting Party or an Affiliate of either pursuant to Section 2.03, by the
Majority Certificateholder of the Controlling Class pursuant to Section 3.18(b),
by the Master Servicer or the Special Servicer pursuant to Section 3.18(c) or by
the Master Servicer or the Majority Certificateholder of the Controlling Class
pursuant to Section 9.01) that there has been a recovery of all Insurance
Proceeds, Liquidation Proceeds and other payments or recoveries (including,
without limitation, by reason of a sale of such Mortgage Loan or REO Property
pursuant to Section 3.18(d) hereof) that the Special Servicer has determined, in
accordance with the Servicing Standard, exercised without regard to any
obligation of the Master Servicer or Special Servicer to make payments from its
own funds pursuant to Section 3.07(b), will be ultimately recoverable.
"Fiscal Agent": ABN AMRO, in its capacity as Fiscal Agent hereunder,
or any successor Fiscal Agent as herein provided.
"Fitch": Fitch Investors Service, L.P. or its successor in interest.
If neither such rating agency nor any successor remains in existence, "Fitch"
shall be deemed to refer to such other nationally recognized statistical rating
agency or other comparable Person designated by the Sponsor, notice of which
designation shall be given to the Trustee, the Fiscal Agent, the Master
Servicer, the Special Servicer and the REMIC Administrator, and specific ratings
of
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Fitch Investors Service, L.P. herein referenced shall be deemed to refer to the
equivalent ratings of the party so designated.
"FNMA": Federal National Mortgage Association or any successor.
"GMAC-CM": GMAC Commercial Mortgage Corporation or its successor in
interest.
"Ground Lease": The ground lease pursuant to which any Mortgagor holds
a leasehold interest in the related Mortgaged Property.
"Hazardous Materials": Any dangerous, toxic or hazardous pollutants,
chemicals, wastes, or substances, including, without limitation, those so
identified pursuant to CERCLA or any other federal, state or local environmental
related laws and regulations, and specifically including, without limitation,
asbestos and asbestos-containing materials, polychlorinated biphenyls ("PCBs"),
radon gas, petroleum and petroleum products, urea formaldehyde and any
substances classified as being "in inventory", "usable work in process" or
similar classification which would, if classified as unusable, be included in
the foregoing definition.
"Health Care Loans": Those Mortgage Loans identified on the Mortgage
Loan Schedule as loan numbers 400005, 962355, 951325, 962354 and 400004 and, as
of the date hereof, secured by Mortgages on Mortgaged Properties operated as
health care-related facilities.
"Historical Loan Modification Report": A report or reports setting
forth, among other things, those Mortgage Loans which, as of the close of
business on the Determination Date immediately preceding the preparation of such
report or reports, have been modified pursuant to this Agreement (i) during the
Collection Period ending on such Determination Date and (ii) since the Cut-off
Date, showing the original and the revised terms thereof, together with such
additional information in respect of each such Mortgage Loan as is contemplated
on page B-11 of the Prospectus Supplement.
"Historical Loss Report": A report or reports setting forth, among
other things, as of the close of business on the Determination Date immediately
preceding the preparation of such report or reports, (i) the amount of
Liquidation Proceeds and Liquidation Expenses, both during the Collection Period
ending on such Determination Date and historically, and (ii) the amount of
Realized Losses occurring during such Collection Period and historically, set
forth on a Mortgage Loan-by-Mortgage Loan and REO Property-by-REO Property
basis, together with such additional information in respect of each Defaulted
Mortgage Loan and REO Property as to which a Final Recovery Determination has
been made as is contemplated on page B-12 of the Prospectus Supplement.
"HUD-Approved Servicer": A servicer approved by the Secretary of
Housing and Urban Development pursuant to Section 207 of the National Housing
Act.
<PAGE>
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"Independent": When used with respect to any specified Person, any
such Person who (i) is in fact independent of the Sponsor, the Mortgage Loan
Seller, the Additional Warranting Party, the Master Servicer, the Special
Servicer, the Trustee, the Fiscal Agent, the REMIC Administrator and any and all
Affiliates thereof, (ii) does not have any direct financial interest in or any
material indirect financial interest in any of the Sponsor, the Mortgage Loan
Seller, the Additional Warranting Party, the Master Servicer, the Special
Servicer, the Trustee, the Fiscal Agent, the REMIC Administrator or any
Affiliate thereof, and (iii) is not connected with the Sponsor, the Mortgage
Loan Seller, the Additional Warranting Party, the Master Servicer, the Special
Servicer, the Trustee, the Fiscal Agent, the REMIC Administrator or any
Affiliate thereof as an officer, employee, promoter, underwriter, trustee,
partner, director or Person performing similar functions; provided, however,
that a Person shall not fail to be Independent of the Sponsor, the Mortgage Loan
Seller, the Additional Warranting Party, the Master Servicer, the Special
Servicer, the Trustee, the Fiscal Agent, the REMIC Administrator or any
Affiliate thereof merely because such Person is the beneficial owner of 1% or
less of any class of securities issued by the Sponsor, the Mortgage Loan Seller,
the Additional Warranting Party, the Master Servicer, the Special Servicer, the
Trustee, the Fiscal Agent, the REMIC Administrator or any Affiliate thereof, as
the case may be.
"Independent Contractor": 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 (i)
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 not be an expense of the Trustee,
the REMIC Administrator or the Trust Fund, delivered to the Trustee and the
REMIC Administrator), 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 (ii) any other Person upon receipt by the Trustee and
the REMIC Administrator of an Opinion of Counsel, which shall be at no expense
to the Trustee, the REMIC Administrator or the Trust Fund, to the effect that
the taking of any action in respect of any REO Property by such Person, subject
to any conditions therein specified, that is otherwise herein contemplated to be
taken by an Independent Contractor will not cause such REO Property to cease to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code, or cause any income realized in respect of such REO Property to fail
to qualify as Rents from Real Property.
"Initial Class Principal Balance": With respect to any Class of
Sequential Pay Certificates, the initial Class Principal Balance thereof as of
the Closing Date, in each case as set forth below:
Initial Class
Class Principal Balance
----- -----------------
Class A-1 $132,607,079
<PAGE>
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Class A-2 $ 24,276,943
Class A-3 $166,045,134
Class B $ 27,483,332
Class C $ 22,902,777
Class D $ 18,322,221
Class E $ 11,451,388
Class F $ 25,193,054
Class G $ 16,031,943
Class H $ 13,741,671
"Initial Class Notional Amount": With respect to the Class X
Certificates, the initial Class Notional Amount thereof as of the Closing Date
equal to $458,055,542.
"Insurance Policy": With respect to any Mortgage Loan or REO Property,
any hazard insurance policy, flood insurance policy, title policy or other
insurance policy that is maintained from time to time in respect of such
Mortgage Loan or the related Mortgaged Property or in respect of such REO
Property.
"Insurance Proceeds": Proceeds paid under any Insurance Policy, to the
extent such proceeds are not applied to the restoration of the related Mortgaged
Property or REO Property or released to the Mortgagor, in either case, in
accordance with the Servicing Standard.
"Interested Person": The Sponsor, the Mortgage Loan Seller, the
Additional Warranting Party, the Master Servicer, the Special Servicer, any
Holder of a Certificate, or any Affiliate of any such Person.
"Interest Accrual Period": With respect to each REMIC I Regular
Interest, each Class of REMIC II Regular Certificates and each Component of the
Class X Certificates, for any Distribution Date, the calendar month immediately
preceding the month in which such Distribution Date occurs.
"Interest Only Certificate": Any Class X Certificate.
"Investment Account": As defined in Section 3.06(a).
"IRS": The Internal Revenue Service or any successor.
"Issue Price": With respect to each Class of Certificates, the "issue
price" as defined in the Code and Treasury regulations promulgated thereunder.
"Late Collections": With respect to any Mortgage Loan, all amounts
received thereon during any Collection Period, whether as payments, Insurance
Proceeds, Liquidation Proceeds or otherwise, which represent late collections of
the principal and/or interest portions of a Scheduled Payment (other than a
Balloon Payment) or an Assumed Scheduled Payment in
<PAGE>
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respect of such Mortgage Loan due or deemed due, as the case may be, for a Due
Date in a previous Collection Period, or for a Due Date coinciding with or
preceding the Cut-off Date, and not previously received or recovered. With
respect to any REO Loan, all amounts received in connection with the related REO
Property during any Collection Period, whether as Insurance Proceeds,
Liquidation Proceeds, REO Revenues or otherwise, which represent late
collections of the principal and/or interest portions of a Scheduled Payment
(other than a Balloon Payment) or an Assumed Scheduled Payment in respect of the
related Mortgage Loan or of an Assumed Scheduled Payment in respect of such REO
Loan due or deemed due, as the case may be, for a Due Date in a previous
Collection Period and not previously received or recovered. The term "Late
Collections" shall specifically exclude any Default Interest and late payment
charges.
"Liquidation Event": With respect to any 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 by the Mortgage Loan Seller or the Additional Warranting
Party or any Affiliate of either of them pursuant to Section 2.03; or (iv) such
Mortgage Loan is purchased by the Majority Certificateholder of the Controlling
Class pursuant to Section 3.18(b), by the Master Servicer or the Special
Servicer pursuant to Section 3.18(c), or by the Master Servicer or the Majority
Certificateholder of the Controlling Class pursuant to Section 9.01. With
respect to any REO Property (and the related REO Loan), any of the following
events: (x) a Final Recovery Determination is made with respect to such REO
Property; or (y) such REO Property is purchased by the Master Servicer or the
Majority Certificateholder of the Controlling Class pursuant to Section 9.01.
"Liquidation Expenses": All customary, reasonable and necessary "out
of pocket" costs and expenses due and owing (but not otherwise covered by
Servicing Advances) in connection with the liquidation of any Specially Serviced
Mortgage Loan or REO Property pursuant to Section 3.09 or 3.18 (including,
without limitation, legal fees and expenses, committee or referee fees and, if
applicable, brokerage commissions and conveyance taxes).
"Liquidation Fee": With respect to each Specially Serviced Mortgage
Loan or REO Property (other than any Specially Serviced Mortgage Loan or REO
Property repurchased by the Mortgage Loan Seller or the Additional Warranting
Party or any Affiliate of either of them pursuant to Section 2.03 within 120
days of the Mortgage Loan Seller's or the Additional Warranting Party's, as the
case may be, notice or discovery of the breach or Document Defect giving rise to
such repurchase obligation, by the Majority Certificateholder of the Controlling
Class, the Master Servicer or the Special Servicer pursuant to Section 3.18 or
by the Master Servicer or the Majority Certificateholder of the Controlling
Class pursuant to Section 9.01), the fee designated as such and payable to the
Special Servicer pursuant to the fourth paragraph of Section 3.11(c).
"Liquidation Fee Rate": With respect to each Specially Serviced
Mortgage Loan or REO Property as to which a Liquidation Fee is payable, 1.0%.
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"Liquidation Proceeds": All cash amounts (other than Insurance
Proceeds and REO Revenues) received by the Master Servicer or the Special
Servicer in connection with: (i) the taking of all or a part of a Mortgaged
Property by exercise of the power of eminent domain or condemnation; (ii) the
liquidation of a Mortgaged Property or other collateral constituting, or that
constituted, security for a defaulted Mortgage Loan, through trustee's sale,
foreclosure sale, REO Disposition or otherwise, exclusive of any portion thereof
required to be released to the related Mortgagor in accordance with applicable
law and the terms and conditions of the related Mortgage Note and Mortgage;
(iii) the realization upon any deficiency judgment obtained against a Mortgagor
or any guarantor; (iv) the purchase of a Defaulted Mortgage Loan by the Majority
Certificateholder of the Controlling Class pursuant to Section 3.18(b) or by the
Master Servicer or the Special Servicer pursuant to Section 3.18(c) or any other
sale thereof pursuant to Section 3.18(d); (v) the repurchase of a Mortgage Loan
by the Mortgage Loan Seller or the Additional Warranting Party or any Affiliate
of either of them pursuant to Section 2.03; or (vi) the purchase of a Mortgage
Loan or REO Property by the Master Servicer or the Majority Certificateholder of
the Controlling Class pursuant to Section 9.01.
"Loan-to-Value Ratio": With respect to any Mortgage Loan, as of any
date of determination, and calculated without regard to any
cross-collateralization feature of such Mortgage Loan a fraction, expressed as a
percentage, the numerator of which is the then current principal amount of such
Mortgage Loan, and the denominator of which is the Appraised Value of the
related Mortgaged Property.
"Majority Certificateholder": With respect to any specified Class or
Classes of Certificates, as of any date of determination, any Holder or
particular group of Holders of Certificates of such Class or Classes, as the
case may be, entitled to a majority of the Voting Rights allocated to such Class
or Classes, as the case may be.
"Master Servicer": GMAC-CM, or any successor master servicer appointed
as herein provided.
"Master Servicer Remittance Amount": With respect to any Master
Servicer Remittance Date, an amount equal to (a) all amounts on deposit in the
Certificate Account as of the commencement of business on such Master Servicer
Remittance Date, net of (b) any portion of the amounts described in clause (a)
of this definition that represents one or more of the following: (i) collected
Monthly Payments that are due on a Due Date following the end of the related
Collection Period, (ii) any payments of principal (including, without
limitation, Principal Prepayments) and interest, Liquidation Proceeds and
Insurance Proceeds received after the end of the related Collection Period,
(iii) any Prepayment Premiums received after the end of the related Collection
Period, (iv) any amounts payable or reimbursable to any Person from the
Certificate Account pursuant to any of clauses (ii) through (xvi) of Section
3.05(a), and (v) any amounts deposited in the Certificate Account in error;
provided that, with respect to the Master Servicer Remittance Date occurring in
the same calendar month as the Final Distribution Date, the Master Servicer
Remittance Amount will be calculated without regard to clauses (b)(i), (b)(ii)
and (b)(iii) of this definition.
<PAGE>
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"Master Servicer Remittance Date": The Business Day immediately
preceding each Distribution Date.
"Master Servicing Fee": With respect to each Mortgage Loan and REO
Loan, the fee payable to the Master Servicer pursuant to Section 3.11(a) and
from which the Standby Fee and any Primary Servicing Fees are payable.
"Master Servicing Fee Rate": With respect to each Mortgage Loan (and
any related REO Loan), the rate per annum that is 0.007% less than the
Administrative Fee Rate specified for such Mortgage Loan in the Mortgage Loan
Schedule.
"Modified Mortgage Loan": Any Mortgage Loan as to which any Servicing
Transfer Event has occurred and which has been modified by the Special Servicer
pursuant to Section 3.20 in a manner that:
(A) affects the amount or timing of any payment of principal or
interest due thereon (other than, or in addition to, bringing current
Monthly Payments with respect to such Mortgage Loan);
(B) except as expressly contemplated by the related Mortgage, results
in a release of the lien of the Mortgage on any material portion of the
related Mortgaged Property without a corresponding Principal Prepayment in
an amount not less than the fair market value (as is), as determined by an
Appraisal delivered to the Special Servicer (at the expense of the related
Mortgagor and upon which the Special Servicer may conclusively rely), of
the property to be released; or
(C) in the good faith and reasonable judgment of the Special Servicer,
otherwise materially impairs the security for such Mortgage Loan or reduces
the likelihood of timely payment of amounts due thereon.
"Monthly Payment": With respect to any Mortgage Loan, for any Due Date
as of which such Mortgage Loan is outstanding, the scheduled monthly payment of
principal and/or interest on such Mortgage Loan that is actually payable by the
related Mortgagor from time to time under the terms of the related Mortgage Note
(as such terms may be changed or modified 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 3.20).
"Moody's": Moody's Investors Service, Inc. or its successor in
interest. If neither such rating agency nor any successor remains in existence,
"Moody's" shall be deemed to refer to such other nationally recognized
statistical rating agency or other comparable Person designated by the Sponsor,
notice of which designation shall be given to the Trustee, the Fiscal Agent, the
Master Servicer, the Special Servicer and the REMIC Administrator, and specific
<PAGE>
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ratings of Moody's Investors Service, Inc. herein referenced shall be deemed to
refer to the equivalent ratings of the party so designated.
"Mortgage": With respect to any Mortgage Loan, separately and
collectively, as the context may require, each mortgage, deed of trust and/or
other similar document or instrument securing the related Mortgage Note and
creating a lien on the related Mortgaged Property.
"Mortgage File": With respect to any Mortgage Loan, subject to Section
2.01(b), collectively the following documents:
(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 Mortgage Capital Funding,
Inc., Multifamily/Commercial Mortgage Pass-Through Certificates,
Series 1996-MC2, without recourse";
(ii) the original or a copy of the Mortgage and, if applicable, the
originals or copies of any intervening assignments thereof
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 Mortgage, in recordable form,
executed by the most recent assignee of record thereof prior to
the Trustee or, if none, by the originator, in favor of the
Trustee (in such capacity);
(iv) the original or a copy of the related Assignment of Leases (if
such item is a document separate from the Mortgage) and, if
applicable, the originals or copies of any intervening
assignments thereof 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 Mortgage), in
recordable form, executed by the most recent assignee of record
thereof prior to the Trustee or, if none, by the originator, 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 Mortgage) and, if
applicable, the originals or
<PAGE>
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copies of any intervening assignments thereof 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;
(vii) an original assignment of any related Security Agreement (if
such item is a document separate from the Mortgage) executed by
the most recent assignee of record thereof prior to the Trustee
or, if none, by the originator, 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;
(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 as of the date of the origination of the Mortgage Loan,
together with all endorsements or riders (or copies thereof) that
were issued with or subsequent to the issuance of such policy,
insuring the priority of the Mortgage as a first lien on the
Mortgaged Property;
(x) the original of any guaranty of the obligations of the Mortgagor
under the Mortgage Loan which was in the possession of the
Mortgage Loan Seller or the Additional Warranting Party, as
applicable, at the time the Mortgage Files were delivered to the
Trustee;
(xi) (A) file or certified copies of any UCC Financing Statements and
continuation statements which were filed in order to perfect (and
maintain the perfection of) any security interest held by the
originator of the Mortgage Loan (and each assignee of record
prior to the Trustee) in and to the personalty of the Mortgagor
at the Mortgaged Property (in each case with evidence of filing
thereon) and which were in the possession of the Mortgage Loan
Seller or the Additional Warranting Party, as applicable, at the
time the Mortgage Files were delivered to the Trustee and (B) if
any such security interest is perfected and the related UCC-1,
UCC-2 or UCC-3 financing statements were in the possession of the
Mortgage Loan Seller or the Additional Warranting Party, as
applicable, a UCC-2 or UCC-3 financing statement, as applicable,
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 to the Trustee (or a certified copy of
such assignment as sent for filing);
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(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 copy of any intercreditor agreement relating to
such Mortgage Loan; and
(xv) any additional documents required to be added to the Mortgage
File pursuant to this Agreement;
provided that whenever the term "Mortgage File" is used to refer to documents
actually received by the Trustee or a Custodian appointed thereby, 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": Each of the mortgage loans transferred and assigned
to the Trustee pursuant to Section 2.01 and from time to time held in the Trust
Fund. 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 Schedule": The list of Mortgage Loans transferred on
the Closing Date to the Trustee as part of the Trust Fund, which list is
attached hereto as Schedule I and may be amended from time to time in accordance
with Section 2.02(e). The Mortgage Loan Schedule shall set forth, among other
things, the following information with respect to each Mortgage Loan:
(i) the loan number;
(ii) the street address (including city, state and zip code) of the
related Mortgaged Property;
(iii) the Mortgage Rate in effect as of the Cut-off Date;
(iv) the original principal balance;
(v) the Cut-off Date Balance;
(vi) the (A) remaining term to stated maturity and (B) Stated Maturity
Date;
(vii) the Due Date;
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(viii) the amount of the Monthly Payment due on the first Due Date
following the Cut-off Date;
(ix) the Administrative Fee Rate (inclusive of the Primary Servicing
Fee Rate);
(x) the Primary Servicing Fee Rate;
(xi) whether the Mortgagor's interest in the related Mortgaged
Property is a leasehold estate; and
(xii) whether it is a CREI Mortgage Loan or an NMCC Mortgage Loan.
The Mortgage Loan Schedule shall also set forth the aggregate Cut-off Date
Balance for all of the Mortgage Loans. Such list may be in the form of more than
one list, collectively setting forth all of the information required.
"Mortgage Loan Seller": CREI.
"Mortgage Note": The original executed note evidencing the
indebtedness of a Mortgagor under a Mortgage Loan, together with any rider,
addendum or amendment thereto.
"Mortgage Pool": Collectively, all of the Mortgage Loans and any
successor REO Loans.
"Mortgage Rate": With respect to (i) any Mortgage Loan on or prior to
its Stated Maturity Date, the annualized rate at which interest is scheduled (in
the absence of a 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, (ii) any Mortgage
Loan after its Stated Maturity Date, the annualized rate described in clause (i)
above determined without regard to the passage of such Stated Maturity Date, and
(iii) any REO Loan, the annualized rate described in clause (i) or (ii) above,
as applicable, determined as if the related Mortgage Loan had remained
outstanding.
"Mortgaged Property": Individually and collectively, as the context
may require, each real property (together with all improvements and fixtures
thereon) 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.
"Mortgagor": The obligor or obligors on a Mortgage Note, including
without limitation, any Person that has acquired the related Mortgaged Property
and assumed the obligations of the original obligor under the Mortgage Note.
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"Net Aggregate Prepayment Interest Shortfall": 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 aggregate amount deposited by the Master Servicer in the
Distribution Account for such Distribution Date pursuant to Section 3.19(f) in
connection with such Prepayment Interest Shortfalls.
"Net Investment Earnings": With respect to any Investment Account for
any Collection Period, the amount, if any, by which the aggregate of all
interest and other income realized during such Collection Period on funds held
in such Investment Account, exceeds the aggregate of all losses and investment
costs, if any, incurred during such Collection Period in connection with the
investment of such funds in accordance with Section 3.06.
"Net Investment Loss": With respect to any Investment Account for any
Collection Period, the amount by which the aggregate of all losses and
investment costs, if any, incurred during such Collection Period in connection
with the investment of funds held in such Investment Account in accordance with
Section 3.06, exceeds the aggregate of all interest and other income realized
during such Collection Period on such funds.
"Net Mortgage Rate": With respect to any Mortgage Loan or REO Loan, as
of any date of determination, a rate per annum equal to the related Mortgage
Rate then in effect, minus the related Administrative Fee Rate.
"Net Operating Income": With respect to any Mortgaged Property, the
total operating revenues derived from such Mortgaged Property, minus the total
fixed and variable operating expenses incurred in respect of such Mortgaged
Property (subject to adjustments for, among other things, (i) non-cash items
such as depreciation and amortization, (ii) capital expenditures and (iii) debt
service on loans secured by the Mortgaged Property).
"Net Penalty Charges": With respect to any Mortgage Loan or REO Loan,
any Penalty Charges actually collected thereon (determined in accordance with
the allocation of amounts collected as specified in Section 1.02), net of (if
such Penalty Charges are allocable to the period that such Mortgage Loan was a
Specially Serviced Mortgage Loan) any Advance Interest accrued on Advances made
in respect of such Mortgage Loan that are reimbursable from such Penalty Charges
in accordance with Section 3.05(a)(viii).
"NMCC": NationsBanc Mortgage Capital Corporation or its successor in
interest.
"NMCC Mortgage Loan": Any of the Mortgage Loans acquired by CREI from
NMCC pursuant to the NMCC Mortgage Loan Purchase Agreement. The NMCC Mortgage
Loans are identified as such on the Mortgage Loan Schedule under the heading
"Loan Seller".
"NMCC Mortgage Loan Purchase Agreement": The Mortgage Loan Purchase
Agreement, dated as of December 11, 1996, between CREI and NMCC.
<PAGE>
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"Nonrecoverable Advance": Any Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance.
"Nonrecoverable P&I Advance": Any P&I Advance made or proposed to be
made in respect of a Mortgage Loan or REO Loan which, in the reasonable and good
faith judgment of the Master Servicer or, if applicable, the Trustee or the
Fiscal Agent, will not be recoverable (together with Advance Interest accrued
thereon), or which in fact was not ultimately recovered, from late collections,
Insurance Proceeds, Liquidation Proceeds or any other recovery on or in respect
of such Mortgage Loan or REO Property (without giving effect to potential
recoveries on deficiency judgments or recoveries from guarantors).
"Nonrecoverable Servicing Advance": Any Servicing Advance 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 recoverable
(together with Advance Interest accrued thereon), or which in fact was not
ultimately recovered, from late collections, Insurance Proceeds, Liquidation
Proceeds or any other recovery on or in respect of such Mortgage Loan or REO
Property (without giving effect to potential recoveries on deficiency judgments
or recoveries from guarantors).
"Non-Registered Certificate": Unless and until registered under the
Securities Act, any Class X, Class F, Class G, Class H, or Residual Certificate.
"Non-United States Person": Any person other than a United States
Person.
"Officer's Certificate": A certificate signed by a Servicing Officer
of the Master Servicer or the Special Servicer or a Responsible Officer of the
Trustee or the Fiscal Agent, as the case may be.
"Operating Statement Analysis": As defined in Section 4.02(b).
"Opinion of Counsel": A written opinion of counsel (who must, in
connection with any opinion rendered pursuant hereto with respect to tax matters
or a resignation under Section 6.04, be Independent counsel, but who otherwise
may be salaried counsel for the Sponsor, the Mortgage Loan Seller, the
Additional Warranting Party, the Trustee, the Fiscal Agent, the REMIC
Administrator, the Master Servicer or the Special Servicer), which written
opinion is acceptable and delivered to the addressee(s).
"OTS": The Office of Thrift Supervision or any successor thereto.
"Ownership Interest": 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.
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"Pass-Through Rate": With respect to any Class of Sequential Pay
Certificates, for any Distribution Date, the fixed rate per annum specified as
such in respect of such Class of Certificates in the Preliminary Statement. With
respect to Component X-A1, for any Distribution Date, the excess, if any, of the
REMIC I Remittance Rate in respect of REMIC I Regular Interest A-1 for such
Distribution Date, over the fixed Pass-Through Rate for the Class A-1
Certificates. With respect to Component X-A2, for any Distribution Date, the
excess, if any, of the REMIC I Remittance Rate in respect of REMIC I Regular
Interest A-2 for such Distribution Date, over the fixed Pass-Through Rate for
the Class A-2 Certificates. With respect to Component X-A3, for any Distribution
Date, the excess, if any, of the REMIC I Remittance Rate in respect of REMIC I
Regular Interest A-3 for such Distribution Date, over the fixed Pass-Through
Rate for the Class A-3 Certificates. With respect to Component X-B, for any
Distribution Date, the excess, if any, of the REMIC I Remittance Rate in respect
of REMIC I Regular Interest B for such Distribution Date, over the fixed
Pass-Through Rate for the Class B Certificates. With respect to Component X-C,
for any Distribution Date, the excess, if any, of the REMIC I Remittance Rate in
respect of REMIC I Regular Interest C for such Distribution Date, over the fixed
Pass-Through Rate for the Class C Certificates. With respect to Component X-D,
for any Distribution Date, the excess, if any, of the REMIC I Remittance Rate in
respect of REMIC I Regular Interest D for such Distribution Date, over the fixed
Pass-Through Rate for the Class D Certificates. With respect to Component X-E,
for any Distribution Date, the excess, if any, of the REMIC I Remittance Rate in
respect of REMIC I Regular Interest E for such Distribution Date, over the fixed
Pass-Through Rate for the Class E Certificates. With respect to Component X-F,
for any Distribution Date, the excess, if any, of the REMIC I Remittance Rate in
respect of REMIC I Regular Interest F for such Distribution Date, over the fixed
Pass-Through Rate for the Class F Certificates. With respect to Component X-G,
for any Distribution Date, the excess, if any, of the REMIC I Remittance Rate in
respect of REMIC I Regular Interest G for such Distribution Date, over the fixed
Pass-Through Rate for the Class G Certificates. With respect to Component X-H,
for any Distribution Date, the excess, if any, of the REMIC I Remittance Rate in
respect of REMIC I Regular Interest H for such Distribution Date, over the fixed
Pass-Through Rate for the Class H Certificates. With respect to the Class X
Certificates, for any Distribution Date, the weighted average of the respective
Pass-Through Rates in respect of the Components of such Class of Certificates
for such Distribution Date, weighted on the basis of the respective Component
Notional Amounts of such Components outstanding immediately prior to such
Distribution Date.
"Payment Priority": With respect to any Class of Certificates, the
priority of the Holders thereof in respect of the Holders of the other Classes
of Certificates to receive distributions out of the Available Distribution
Amount for any Distribution Date. The Payment Priority of the respective Classes
of Certificates shall be, in descending order, as follows: first, the respective
Classes of Senior Certificates, pro rata; second, the Class B Certificates;
third, the Class C Certificates; fourth, the Class D Certificates; fifth, the
Class E Certificates; sixth, the Class F Certificates; seventh, the Class G
Certificates; eighth, the Class H Certificates; and last, the respective Classes
of Residual Certificates.
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"Penalty Charges": Any and all Default Interest and late payment
charges paid or payable, as the context requires, in connection with a default
under a Mortgage Loan or any successor REO Loan.
"Percentage Interest": With respect to any REMIC II 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 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 Initial Class Notional Amount,
as the case may be, of the relevant Class. 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 Investments": Any one or more of the following obligations:
(i) direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States or any
agency or instrumentality thereof, provided such obligations are backed by
the full faith and credit of the United States;
(ii) repurchase obligations with respect to any security described in
clause (i) above, provided that the long-term unsecured debt obligations of
the party agreeing to repurchase such obligations are rated "AAA" by Fitch
and "Aaa" by Moody's;
(iii) certificates of deposit, time deposits, demand deposits and
bankers' acceptances of any bank or trust company organized under the laws
of the United States or any state, provided that (a) the long-term
unsecured debt obligations of such bank or trust company (or, in the case
of the principal depository institution in a depository institution holding
company, the long-term unsecured debt obligations of the depository
institution holding company) are rated "AAA" by Fitch and "Aaa" by Moody's
or (b) the short-term unsecured debt obligations of such bank, trust
company or depository institution holding company are rated "F-1+" or
better by Fitch and "P-1" or better by Moody's or (c) if both such
long-term and short-term unsecured debt obligations have been rated by
either Rating Agency, then each must be rated as specified in the
immediately preceding clauses (a) and (b) with respect to such Rating
Agency;
(iv) commercial paper (having original maturities of not more than 365
days) of any corporation incorporated under the laws of the United States
or any state thereof rated "F-1+" or better by Fitch and "P-1" or better by
Moody's; and
(v) any other obligation or security which would not result in the
downgrade, qualification or withdrawal of the rating then assigned by any
Rating Agency to any Class of Certificates, evidence of which shall be
confirmed in writing by each Rating Agency to the Trustee;
<PAGE>
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provided that no investment described hereunder shall evidence either the right
to receive (a) only interest with respect to such investment or (b) a yield to
maturity greater than 120% of the yield to maturity at par of the underlying
obligations; and provided, further, that no investment described hereunder may
be purchased at a price greater than par if such investment may be prepaid or
called at a price less than its purchase price prior to stated maturity; and
provided, further, that no investment described hereunder may be sold prior to
stated maturity if such sale would result in a loss of principal on the
instrument or a tax on "prohibited transactions" under Section 860F of the Code;
and provided, further, that each investment described hereunder shall, by its
terms, have a predetermined fixed amount of principal due at maturity (that
cannot vary or change) and either a fixed interest rate or variable interest
rate tied to a single interest rate index plus a single fixed spread; and
provided, further, that each investment described hereunder shall be a "cash
flow investment", as defined in the REMIC Provisions.
"Permitted Transferee ": Any Transferee of a Residual Certificate
other than a Disqualified Organization.
"Person": Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or any agency or political subdivision thereof.
"Phase I Environmental Assessment": A "Phase I assessment" as
described in and meeting the criteria of Chapter 5 of the FNMA Multifamily
Guide, Part II, as amended from time to time.
"P&I Advance": As to any Mortgage Loan or REO Loan, any advance made
by the Master Servicer, the Trustee or the Fiscal Agent pursuant to Section
4.03.
"Plan": As defined in Section 5.02(c).
"Prepayment Assumption": The assumption that no Mortgage Loan is
prepaid prior to its Stated Maturity Date, such assumption to be used for
determining the accrual of original issue discount, market discount and premium,
if any, on the Mortgage Loans, the REMIC I Regular Interests and the
Certificates for federal income tax purposes.
"Prepayment Interest Excess": With respect to any Mortgage Loan that
was subject to a Principal Prepayment in full or in part made on or prior to the
Determination Date in any calendar month but after the first day of such month,
any payment of interest (exclusive of Prepayment Premiums and net of related
Servicing Fees) actually collected from the related Mortgagor and intended to
cover the period from the commencement of such month to the date of prepayment.
"Prepayment Interest Shortfall": With respect to any Mortgage Loan
that was subject to a Principal Prepayment in full or in part made after the
Determination Date in any calendar month, the amount of interest, to the extent
not collected from the related Mortgagor
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(without regard to any Prepayment Premium that may have been collected), that
would have accrued at a per annum rate equal to the sum of the Net Mortgage Rate
for such Mortgage Loan plus the Trustee Fee Rate, on the amount of such
Principal Prepayment during the period commencing on the date as of which such
Principal Prepayment was applied to such Mortgage Loan and ending on the last
day of such calendar month, inclusive.
"Prepayment Premium": 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 or any successor
REO Loan.
"Primary Servicing Fee": With respect to each Mortgage Loan that is
subject to a Sub-Servicing Agreement as of the Closing Date, the monthly fee
payable to the Sub-Servicer by the Master Servicer from the Master Servicing
Fee.
"Primary Servicing Fee Rate": With respect to each Mortgage Loan that
is subject to a Sub-Servicing Agreement as of the Closing Date, the rate per
annum specified as such in the Mortgage Loan Schedule.
"Primary Servicing Office": With respect to each of the Master
Servicer and the Special Servicer, the office thereof primarily responsible for
performing its respective duties under this Agreement, initially located in
Pennsylvania and California, respectively.
"Principal Distribution Amount": With respect to any Distribution
Date, the aggregate of the Current Principal Distribution Amount for such
Distribution Date and, 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 Sequential Pay Certificates on the preceding Distribution Date.
"Principal Prepayment": Any payment of principal made by the Mortgagor
on a Mortgage Loan which is received in advance of its scheduled Due Date and
which is not accompanied by an amount of interest representing scheduled
interest due on any date or dates in any month or months subsequent to the month
of prepayment.
"Prospectus Supplement": That certain prospectus supplement dated
December 11, 1996, relating to the Registered Certificates.
"Purchase Price": With respect to any Mortgage Loan, a price equal to
the unpaid principal balance of the Mortgage Loan as of the date of purchase,
together with (a) all accrued and unpaid interest on the 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 (c) if paid in
connection with any repurchase of such Mortgage Loan by the Mortgage Loan Seller
or the Additional Warranting Party or any Affiliate of either of them pursuant
to Section 2.03, all accrued and unpaid Advance Interest in respect of related
<PAGE>
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Advances. With respect to any REO Property, a price equal to the unpaid
principal balance of the related REO Loan as of the date of purchase, together
with (a) all accrued and unpaid interest on such REO 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 (c) if paid in
connection with any repurchase of such REO Property by the Mortgage Loan Seller
or the Additional Warranty Party or any Affiliate of either of them pursuant to
Section 2.03, all accrued and unpaid Advance Interest in respect of related
Advances. The Purchase Price of any Mortgage Loan or REO Property is intended to
include, without limitation, principal and interest previously advanced with
respect thereto and not previously reimbursed.
"Qualified Appraiser": In connection with the appraisal of any
Mortgaged Property or REO Property, an Independent MAI-designated appraiser with
at least five years of experience in respect of the relevant geographic location
and property type.
"Qualified Insurer": An insurance company or security or bonding
company qualified to write the related Insurance Policy in the relevant
jurisdiction.
"Rating Agency": Each of Fitch and Moody's.
"Realized Loss": With respect to each defaulted Mortgage Loan as to
which a Final Recovery Determination has been made, or with respect to any REO
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 REO Loan, as the case may be, 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 REO
Loan, as the case may be (without taking into account the amounts described in
subclause (iv) of this sentence), at the related Mortgage Rate to but not
including the Due Date in the Collection Period in which the Final Recovery
Determination was made, 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, minus (iv) all payments and proceeds, if any,
received in respect of such Mortgage Loan or REO Loan, 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).
With respect to any Mortgage Loan as to which any portion of the
outstanding principal or accrued interest owed thereunder was forgiven in
connection with a bankruptcy or similar proceeding involving the related
Mortgagor or a modification, waiver or amendment of such Mortgage Loan granted
or agreed to by the Master Servicer or Special Servicer pursuant to Section
3.20, the amount of such principal or interest so forgiven.
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
<PAGE>
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granted or agreed to by the Master Servicer or Special Servicer pursuant to
Section 3.20, 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": With respect to each Class of Certificates, for any
Distribution Date, the last Business Day of the calendar month immediately
preceding the month in which such Distribution Date occurs.
"Registered Certificates": The Class A-1, Class A-2, Class A-3, Class
B, Class C, Class D and Class E Certificates.
"Reimbursement Rate": The rate per annum applicable to the accrual of
Advance Interest, which rate per annum shall be equal to the "prime rate" as
published in the "Money Rates" section of The Wall Street Journal, as such
"prime rate" may change from time to time.
"REMIC": A "real estate mortgage investment conduit" as defined in
Section 860D of the Code.
"REMIC Administrator": LaSalle National Bank, its successor in
interest, or any successor REMIC administrator appointed as herein provided.
"REMIC I": The segregated pool of assets subject hereto, constituting
the primary trust created hereby and to be administered hereunder, with respect
to which a REMIC election is to be made, consisting of: (i) the Mortgage Loans
as from time to time are subject to this Agreement and all payments under and
proceeds of such Mortgage Loans received or receivable after the Cut-off Date
(other than payments of principal, interest and other amounts due and payable on
the Mortgage Loans on or before the Cut-off Date), together with all documents
delivered or caused to be delivered hereunder with respect to such Mortgage
Loans by the Mortgage Loan Seller and the Additional Warranting Party; (ii) any
REO Property acquired in respect of a Mortgage Loan and all payments and
proceeds of such REO Property; and (iii) such funds or assets as from time to
time are deposited in the Distribution Account, the Certificate Account and the
REO Account (if established).
"REMIC I Regular Interest": Any of the 10 separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
"regular interest" in REMIC I. Each REMIC I Regular Interest shall accrue
interest at the related REMIC I Remittance Rate 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 I Regular Interests are set forth in the
Preliminary Statement hereto.
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"REMIC I Remittance Rate": With respect to any REMIC I Regular
Interest, for any Distribution Date, the Weighted Average Effective Net Mortgage
Rate for such Distribution Date.
"REMIC II": The segregated pool of assets consisting of all of the
REMIC I Regular Interests, with respect to which a separate REMIC election is to
be made.
"REMIC II Certificate": Any Certificate, other than a Class R-I
Certificate.
"REMIC II Regular Certificate": Any REMIC II Certificate, other than a
Class R-II Certificate.
"REMIC Provisions": 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 proposed, temporary and final Treasury regulations and any rulings
promulgated thereunder, as the foregoing may be in effect from time to time.
"Rents from Real Property": With respect to any REO Property, gross
income of the character described in Section 856(d) of the Code.
"REO Account": A segregated custodial account or accounts created and
maintained by the Special Servicer pursuant to Section 3.16 on behalf of the
Trustee in trust for the Certificateholders, which shall be entitled "[Name of
Special Servicer], as Special Servicer, in trust for registered holders of
Mortgage Capital Funding, Inc., Multifamily/Commercial Mortgage Pass-Through
Certificates, Series 1996-MC2".
"REO Acquisition": The acquisition of any REO Property pursuant to
Section 3.09.
"REO Disposition": The sale or other disposition of the REO Property
pursuant to Section 3.18(d).
"REO Extension": As defined in Section 3.16(a).
"REO Loan": The mortgage loan deemed for purposes hereof to be
outstanding with respect to any and all REO Property acquired in respect of any
Mortgage Loan. Each REO Loan shall be deemed to provide for monthly payments of
principal and/or interest equal to its Assumed Scheduled Payment and otherwise
to have the same terms and conditions as the related Mortgage Loan. Each REO
Loan shall be deemed to have an initial unpaid principal balance and Stated
Principal Balance equal to the unpaid principal balance and Stated Principal
Balance, respectively, of the related Mortgage Loan as of the date of the
related REO Acquisition. All Scheduled Payments (other than a Balloon Payment),
Assumed Scheduled Payments (in the case of a Balloon Mortgage Loan delinquent in
respect of its Balloon Payment) and other amounts
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due and owing, or deemed to be due and owing, in respect of the related Mortgage
Loan as of the date of the related REO Acquisition, shall be deemed to continue
to be due and owing in respect of an REO Loan. All amounts payable or
reimbursable to the Master Servicer, Special Servicer, Trustee and/or the Fiscal
Agent in respect of the related Mortgage Loan as of the date of the related REO
Acquisition, including, without limitation, any unpaid Servicing Fees and any
unreimbursed Advances, together with any Advance Interest accrued and payable to
the Master Servicer, Special Servicer, Trustee and/or the Fiscal Agent in
respect of such Advances, shall continue to be payable or reimbursable to the
Master Servicer, Special Servicer, Trustee and/or Fiscal Agent, as the case may
be, in respect of an REO Loan.
"REO Property": A Mortgaged Property acquired by the Special Servicer
for the benefit of the Certificateholders pursuant to Section 3.09 through
foreclosure, acceptance of a deed-in-lieu of foreclosure or otherwise in
accordance with applicable law in connection with the default or imminent
default of a Mortgage Loan.
"REO Revenues": All income and rents derived from the ownership,
operation or leasing of any REO Property.
"REO Status Report": A report or reports substantially in the form of
Exhibit E attached hereto setting forth, among other things, with respect to
each REO Property that was included in the Trust Fund as of the close of
business on the Determination Date immediately preceding the preparation of such
report or reports, (i) the Acquisition Date of such REO Property, (ii) the
amount of income collected with respect to any REO Property (net of related
expenses) and other amounts, if any, received on such REO Property during the
Collection Period ending on such Determination Date and (iii) the value of the
REO Property based on the most recent Appraisal or other valuation thereof
available to the Master Servicer as of such Determination Date (including any
valuation prepared internally by the Special Servicer).
"REO Tax": As defined in Section 3.17(a).
"Representing Party": As defined in Section 2.05(c).
"Request for Release": A request for release signed by a Servicing
Officer of, as applicable, the Master Servicer or Special Servicer in the form
of Exhibit D attached hereto.
"Required Appraisal Loan": As defined in Section 3.19(b).
"Required Claims-Paying Ratings": With respect to any insurance
carrier, claims-paying ability ratings at least equal to the following minimum
ratings assigned to such carrier by at least two of the following parties and,
in any event, by each Rating Agency that assigned a rating to the claims-paying
ability of such insurance carrier: Moody's ("A2" or better), Fitch ("A" or
better), S&P ("A" or better) and A.M. Best ("A:IX" or better); unless each of
the Rating Agencies has confirmed in writing that an insurance company with
lower or fewer claims-paying ability ratings shall not result, in and of itself,
in a downgrading, withdrawal or
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qualification of the then current rating assigned by such Rating Agency to any
Class of Certificates.
"Reserve Account": The account or accounts created and maintained
pursuant to Section 3.03(d).
"Reserve Funds": With respect to any Mortgage Loan, any amounts
delivered by the related Mortgagor to be held in escrow by or on behalf of the
mortgagee representing reserves for principal and interest payments, repairs,
replacements, capital improvements (including, without limitation, tenant
improvements and leasing commissions), and/or environmental testing and
remediation with respect to the related Mortgaged Property.
"Residual Certificate": Any Class R-I or Class R-II Certificate.
"Responsible Officer": When used with respect to the Trustee, any vice
president, any assistant vice president, any assistant secretary, any assistant
treasurer and any other trust officer or assistant trust officer in the
Corporate Trust Department of the Trustee, or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers to whom a particular matter is referred by the Trustee
because of such officer's knowledge of and familiarity with the particular
subject. When used with respect to the Fiscal Agent, any officer or assistant
officer thereof.
"Responsible Party": With respect to any Document Defect or alleged
Document Defect or any breach or alleged breach of a representation or warranty
set forth in Section 2.05(c), either: (i) the Mortgage Loan Seller, if such
Document Defect or alleged Document Defect relates to a CREI Mortgage Loan or if
such breach or alleged breach is of a representation or warranty as to which the
Mortgage Loan Seller is the Representing Party; or (ii) the Additional
Warranting Party if such Document Defect or alleged Document Defect relates to
an NMCC Mortgage Loan or if such breach or alleged breach is of a representation
or warranty as to which the Responsible Party is the Representing Party.
"S&P": Standard & Poor's Ratings Services, a Division of the
McGraw-Hill Companies, Inc.
"Scheduled Payment": With respect to any Mortgage Loan, for any Due
Date following the Cut-off Date as of which it is outstanding, the scheduled
monthly payment of principal and/or interest on such Mortgage Loan that is
payable by the related Mortgagor on such Due Date under the terms of the related
Mortgage Note (as such terms may be changed or modified as a result of a
bankruptcy, insolvency 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 3.20).
"Securities Act": The Securities Act of 1933, as amended.
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"Security Agreement": With respect to any Mortgage Loan, any security
agreement, chattel mortgage or similar document or instrument, whether contained
in the related Mortgage or executed separately, creating in favor of the holder
of such Mortgage a security interest in the personal property constituting
security for repayment of such Mortgage Loan.
"Senior Certificate": Any Class A-1, Class A-2, Class A-3 or Class X
Certificate.
"Senior Principal Distribution Cross-Over Date": The first
Distribution Date as of which the aggregate Class Principal Balance of the Class
A-1, Class A-2 and Class A-3 Certificates outstanding immediately prior to such
Distribution Date exceeds the sum of (a) the aggregate Stated Principal Balance
of the Mortgage Pool that will be outstanding immediately following such
Distribution Date, plus (b) the lesser of (i) the Principal Distribution Amount
for such Distribution Date and (ii) the portion of the Available Distribution
Amount for such Distribution Date that will remain after the distributions of
interest to be made on the Senior Certificates on such Distribution Date have
been so made.
"Sequential Pay Certificate": Any Class A, Class B, Class C, Class D,
Class E, Class F, Class G or Class H Certificate.
"Servicing Account": The account or accounts created and maintained
pursuant to Section 3.03(a).
"Servicing Advances": All customary, reasonable and necessary "out of
pocket" costs and expenses incurred or to be incurred, as the context requires,
by the Master Servicer or the Special Servicer (or, if applicable, the Trustee
or Fiscal Agent) in connection with the servicing of a Mortgage Loan after a
default, delinquency or other unanticipated event, or in connection with the
administration of any REO Property, including, but not limited to, the cost of
(a) compliance with the obligations of the Master Servicer and/or the Special
Servicer set forth in Sections 3.03(c) and 3.09, (b) the preservation,
insurance, restoration, protection and management of a Mortgaged Property, (c)
obtaining any Liquidation Proceeds or Insurance Proceeds in respect of any
Mortgage Loan or REO Property, (d) any enforcement or judicial proceedings with
respect to a Mortgaged Property, including, without limitation, foreclosures,
and (e) the operation, management, maintenance and liquidation of any REO
Property; provided that notwithstanding anything to the contrary, "Servicing
Advances" shall not include allocable overhead of the Master Servicer 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": With respect to each Mortgage Loan and REO Loan, the
Master Servicing Fee and the Special Servicing Fee.
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"Servicing File": Any documents (other than documents required to be
part of the related Mortgage File), including, without limitation, the related
environmental site assessment report(s) referred to in Section 2.05(c)(xiv), in
the possession of the Master Servicer or the Special Servicer and relating to
the origination and servicing of any Mortgage Loan.
"Servicing Officer": Any officer or authorized signatory of the Master
Servicer or the Special Servicer involved in, or responsible for, the
administration and servicing of Mortgage Loans, whose name and specimen
signature appear on a list of such officers and authorized signatories furnished
by such party to the Trustee and the Sponsor on the Closing Date, as such list
may be amended from time to time thereafter.
"Servicing Return Date": With respect to any Corrected Mortgage Loan,
the date that servicing thereof is returned by the Special Servicer to the
Master Servicer pursuant to Section 3.21(a).
"Servicing Standard": With respect to each of the Master Servicer and
the Special Servicer, to service and administer the Mortgage Loans and any REO
Properties in the same manner in which, and with the same care, skill, prudence
and diligence with which, the Master Servicer or Special Servicer, as the case
may be, generally services and administers comparable mortgage loans or assets,
as applicable, for third parties or held in its own portfolio, whichever
servicing procedure is of a higher standard, and in any event, with a view to
the timely collection of all scheduled payments of principal and interest under
the Mortgage Loans or, if a Mortgage Loan comes into and continues in default
and if, in the good faith and reasonable judgment of the Special Servicer, no
satisfactory arrangements can be made for the collection of the delinquent
payments, the maximization of the recovery on such Mortgage Loan to the
Certificateholders (as a collective whole) on a present value basis (the
relevant discounting of anticipated collections that will be distributable to
Certificateholders to be performed at the related Net Mortgage Rate), but
without regard to: (i) any relationship that the Master Servicer or the Special
Servicer, as the case may be, or any Affiliate thereof may have with the related
Mortgagor; (ii) the ownership of any Certificate by the Master Servicer or the
Special Servicer, as the case may be, or by any Affiliate thereof; (iii) the
Master Servicer's obligation to make Advances; (iv) the Special Servicer's
obligation to make (or to direct the Master Servicer to make) Servicing
Advances; and (v) 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
compensation for its services or reimbursement of costs hereunder or with
respect to any particular transaction.
"Servicing Transfer Event": 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".
"Single Certificate": For purposes of Section 4.02(a), a hypothetical
Certificate of any Class of REMIC II Regular Certificates evidencing a $1,000
denomination or, in the case of a Class X Certificate, a 100% Percentage
Interest in the related Class.
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"Special Servicer": GMAC-CM, or any successor special servicer
appointed as herein provided.
"Special Servicer Loan Status Report": A report or reports setting
forth, among other things, as of the close of business on the Determination Date
immediately preceding the preparation of such report or reports, (i) the
aggregate unpaid principal balance of all Specially Serviced Mortgage Loans and
(ii) a loan-by-loan listing of all Specially Serviced Mortgage Loans indicating
their status, date and reason for transfer to the Special Servicer and such
additional information as is contemplated on pages B-9 and B-10 of the
Prospectus Supplement.
"Special Servicing Fee": With respect to each Specially Serviced
Mortgage Loan and each REO Loan, the fee designated as such and payable to the
Special Servicer pursuant to the first paragraph of Section 3.11(c).
"Special Servicing Fee Rate": With respect to each Specially Serviced
Mortgage Loan and each REO Loan, 0.25% per annum.
"Specially Serviced Mortgage Loan": 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 and in accordance with the Servicing
Standard, that a default in the making of a Monthly Payment or
any other payment required under the related Mortgage Note or the
related Mortgage is likely to occur within 30 days and is likely
to remain unremedied for at least 60 days or, in the case of a
Balloon Payment, for at least 30 days; or
(d) there shall have occurred a default, other than as described in
clause (a) or (b) above, that materially impairs the value of the
related Mortgaged Property as security for the Mortgage Loan or
otherwise materially and adversely affects the interests of
Certificateholders, which default has continued unremedied for
the applicable grace period under the terms of the Mortgage Loan
(or, if no grace period is specified, 60 days); or
(e) a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises in an involuntary case under
any present or
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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, marshalling 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, marshalling of assets and liabilities or
similar proceedings of or relating to such Mortgagor or of or
relating to all or substantially all of its property; or
(g) the related Mortgagor shall have admitted in writing its
inability to pay its debts generally as they become due, filed a
petition to take advantage of any applicable 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,
when the related Mortgaged Property becomes REO Property, 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 3.20);
(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;
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(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.
"Sponsor": Mortgage Capital Funding, Inc., or its successor in
interest.
"Standby Fee": With respect to each Mortgage Loan and each REO Loan,
the fee designated as such and payable to the Special Servicer pursuant to the
second paragraph of Section 3.11(c).
"Standby Fee Rate": With respect to each Mortgage Loan and each REO
Loan, 0.005% per annum.
"Startup Day": With respect to each of REMIC I and REMIC II, the day
designated as such in Section 10.01(c).
"Stated Maturity Date": 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 3.20.
"Stated Principal Balance": With respect to any Mortgage Loan (and any
related REO Loan), the Cut-off Date Balance of such Mortgage Loan, as reduced on
each Distribution Date (to not less than zero) by (i) all payments (or P&I
Advances in lieu thereof) of, and all other collections allocated as provided in
Section 1.02 to, principal of or with respect to such Mortgage Loan (or related
REO Loan) that are (or, if they had not been applied to cover any Additional
Trust Fund 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 (or related REO Loan) during the related
Collection Period. Notwithstanding the foregoing, if a Liquidation Event occurs
in respect of any Mortgage Loan or REO Property, then the "Stated Principal
Balance" of such Mortgage Loan or of the related REO Loan, as the case may be,
shall be zero commencing as of the Distribution Date in the Collection Period
next following the Collection Period in which such Liquidation Event occurred.
"Subordinated Certificate": Any Class B, Class C, Class D, Class E,
Class F, Class G, Class H or Residual Certificate.
"Sub-Servicer": Any Person with which the Master Servicer or the
Special Servicer has entered into a Sub-Servicing Agreement.
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"Sub-Servicing Agreement": The written contract between the Master
Servicer or the Special Servicer, on the one hand, and any Sub-Servicer, on the
other hand, relating to servicing and administration of Mortgage Loans as
provided in Section 3.22.
"Tax Matters Person": With respect to each of REMIC I and REMIC II,
the Person designated as the "tax matters person" of such REMIC in the manner
provided under Treasury regulation section 1.860F-4(d) and temporary Treasury
regulation section 301.6231(a)(7)-1T. The "Tax Matters Person" for each of REMIC
I and REMIC II is the Holder of Certificates evidencing the largest Percentage
Interest in the related Class of Residual Certificates.
"Tax Returns": 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 and REMIC II due to its classification
as a REMIC under the REMIC Provisions, together with any and all other
information, reports or returns that may be required to be furnished to the
Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal or
Applicable State Law.
"Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment of any Ownership Interest in a
Certificate.
"Transferee": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
"Transferor": Any Person who is disposing by Transfer any Ownership
Interest in a Certificate.
"Trust Fund": Collectively, all of the assets of REMIC I and REMIC II.
"Trustee": LaSalle National Bank, in its capacity as Trustee
hereunder, its successor in interest, or any successor trustee appointed as
herein provided.
"Trustee Fee": The fee payable to the Trustee on each Distribution
Date for its services as Trustee hereunder, in an aggregate amount equal to one
month's interest at the Trustee Fee Rate in respect of each Mortgage Loan and
REO Loan, calculated on the same basis as is applicable to the accrual of
interest on such Mortgage (i.e., on the basis of, as applicable, a 360-day year
consisting of twelve 30-day months or the actual number of days elapsed in a
360-day year) and accrued on the Stated Principal Balance of such Mortgage Loan
or REO Loan, as the case may be, immediately prior to such Distribution Date for
the period ending immediately before the Due Date for such Mortgage Loan or REO
Loan, as the case may be, during the related Collection Period and commencing on
and including the prior Due Date.
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"Trustee Fee Rate": A rate of 0.007% per annum.
"UCC": The Uniform Commercial Code in effect in the applicable
jurisdiction.
"UCC Financing Statement": A financing statement executed and filed
pursuant to the Uniform Commercial Code, as in effect in the relevant
jurisdiction.
"Uncertificated Accrued Interest": With respect to any REMIC I Regular
Interest, for any Distribution Date, one month's interest (calculated on the
basis of a 360-day year consisting of twelve 30-day months) at the REMIC I
Remittance Rate applicable to such REMIC I Regular Interest for such
Distribution Date, accrued on the Uncertificated Principal Balance of such REMIC
I Regular Interest outstanding immediately prior to such Distribution Date.
"Uncertificated Distributable Interest": With respect to any REMIC I
Regular Interest, for any Distribution Date, the Uncertificated Accrued Interest
in respect of such REMIC I Regular Interest for such Distribution Date, reduced
(to not less than zero) by such REMIC I Regular Interest's allocable share
(calculated in accordance with Section 4.05(e) hereof) of any Net Aggregate
Prepayment Interest Shortfall for such Distribution Date.
"Uncertificated Principal Balance": The principal amount of any REMIC
I 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 amount specified as its initial Uncertificated
Principal Balance in the Preliminary Statement hereto. 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 4.05(a) and, if and to the
extent appropriate, shall be further reduced on such Distribution Date as
provided in Section 4.05(d).
"Uninsured Cause": 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 3.07.
"United States Person": 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 includible in gross income for
United States federal income tax purposes regardless of its connection with the
conduct of a trade or business within the United States or a trust if (A) for
taxable years beginning after December 31, 1996 (or for taxable years ending
after August 20, 1996, if the trustee has made an applicable election), a court
within the United States is able to exercise primary supervision over the
administration of such trust, and one or more United States fiduciaries have the
authority to control all substantial decisions of such trust, or (B) for all
other taxable years, such trust is subject to U.S. federal income tax regardless
of the source of its income.
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"USPAP": The Uniform Standards of Professional Appraisal Practices.
"Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. At all times during the term
of this Agreement, 94.0% of the Voting Rights shall be allocated among the
Holders of the various outstanding Classes of Sequential Pay Certificates in
proportion to the respective Class Principal Balances of their Certificates, and
6.0% of the Voting Rights shall be allocated to the Holders of the Class X
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.
"Weighted Average Effective Net Mortgage Rate": With respect to any
Distribution Date, the weighted average of the respective Effective Net Mortgage
Rates for the Mortgage Loans and REO Loans, weighted on the basis of the
respective Stated Principal Balances of the Mortgage Loans and REO Loans
outstanding immediately prior to such Distribution Date.
"Workout Fee": With respect to each Corrected Mortgage Loan, the fee
designated as such and payable to the Special Servicer pursuant to the third
paragraph of Section 3.11(c).
"Workout Fee Rate": With respect to each Corrected Mortgage Loan as to
which a Workout Fee is payable, 1.0%.
SECTION 1.02. Certain Calculations in Respect of the Mortgage Pool.
(a) All amounts collected in respect of any group of related
Cross-Collateralized Mortgage Loans in the form of payments from Mortgagors,
Insurance 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)
in the form of payments from Mortgagors, Liquidation Proceeds or Insurance
Proceeds shall be applied for purposes of this Agreement (including, without
limitation, for purposes of determining distributions on the Certificates
pursuant to Article IV and additional compensation payable to the Master
Servicer, the Special Servicer and any Sub-Servicers) as follows: 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
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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 other amounts
(including, without limitation, Penalty Charges, assumption fees and
modification fees) then due and owing under such Mortgage Loan other than
remaining unpaid principal; and eighth, as an early recovery of any remaining
principal of such Mortgage Loan to the extent of its entire remaining unpaid
principal balance; provided that, notwithstanding the foregoing, in the case of
each Health Care Loan, for so long as it is not a Specially Serviced Mortgage
Loan, all amounts collected in respect thereof shall be applied for purposes of
this Agreement (including, without limitation, for purposes of determining
distributions on the Certificates pursuant to Article IV and additional
compensation payable to the Master Servicer, the Special Servicer and any
Sub-Servicers) in accordance with the express provisions of the related Mortgage
Note and Mortgage. The Master Servicer shall, to the fullest extent permitted by
applicable law and the related Mortgage Loan documents, apply all payments on
and proceeds of each Mortgage Loan to amounts actually due and owing from the
related Mortgagor in a manner consistent with the foregoing and shall maintain
accurate records of how all such payments and proceeds are actually applied and
are applied for purposes of this Agreement.
(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 applied for purposes of this
Agreement (including, without limitation for purposes of determining
distributions on the Certificates pursuant to Article IV and additional
compensation payable to the Master Servicer, the Special Servicer and any
Sub-Servicers) as follows: first, as a recovery of any related unreimbursed
Servicing Advances; second, as a recovery of accrued and unpaid interest on the
related REO 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 Loan to the extent of its entire unpaid principal balance; fourth,
as a recovery of any Prepayment Premium then due and owing under such REO Loan;
and, fifth, as a recovery of any other amounts (including, without limitation,
Penalty Charges) deemed to be due and owing in respect of the related REO Loan.
(c) Insofar as amounts received in respect of any Mortgage Loan or REO
Property and allocable to fees and charges owing in respect of such Mortgage
Loan or the related REO Loan, as the case may be, that constitute additional
servicing compensation payable to the Master Servicer and/or Special Servicer
pursuant to Section 3.11, are insufficient to cover the full amount of such fees
and charges, such amounts shall be allocated between such of those fees and
charges as are payable to the Master Servicer, on the one hand, and such of
those fees and charges as are payable to the Special Servicer, on the other, pro
rata in accordance with their respective entitlements, and such payments so made
shall constitute the sole amount that will be paid to the Master Servicer and
the Special Servicer with respect thereto.
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(d) The foregoing applications of amounts received in respect of any
Mortgage Loan or REO Property shall be determined by the Master Servicer and
reflected in the reports to be delivered thereby pursuant to Section 4.02(b).
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans.
(a) The Mortgage Loan Seller, concurrently with the execution and
delivery hereof, and at the direction and on behalf of the Sponsor, does hereby
assign, transfer, sell and otherwise convey to the Trustee without recourse for
the benefit of the Certificateholders all the right, title and interest of the
Mortgage Loan Seller in, to and under the Mortgage Loans identified on the
Mortgage Loan Schedule and all other assets included or to be included in REMIC
I. Such assignment includes (i) the Mortgage Loans as from time to time are
subject to this Agreement and all payments under and proceeds of such Mortgage
Loans received or receivable after the Cut-off Date (other than payments of
principal, interest and other amounts due and payable on the Mortgage Loans on
or before the Cut-off Date), together with all documents delivered or caused to
be delivered hereunder with respect to such Mortgage Loans by the Mortgage Loan
Seller and the Additional Warranting Party; (ii) any REO Property acquired in
respect of a Mortgage Loan; and (iii) such funds or assets as from time to time
are deposited in the Distribution Account, the Certificate Account and the REO
Account (if established).
It is intended that the conveyance of the Mortgage Loans and the
related rights and property by the Mortgage Loan Seller to the Trustee, at the
direction of the Sponsor, as provided in this Section be, and be construed as, a
sale of the Mortgage Loans by the Mortgage Loan Seller, at the direction of the
Sponsor, to the Trustee for the benefit of the Certificateholders. It is,
further, not intended that such conveyance be deemed a pledge of the Mortgage
Loans by the Mortgage Loan Seller or the Sponsor to the Trustee to secure a debt
or other obligation of the Mortgage Loan Seller or the Sponsor. However, in the
event that the Mortgage Loans are held to be property of the Mortgage Loan
Seller or the Sponsor, or if for any reason this Agreement is held or deemed to
create a security interest in the Mortgage Loans, then it is intended that, (a)
this Agreement shall also be deemed to be a security agreement within the
meaning of Articles 8 and 9 of the New York Uniform Commercial Code and the
Uniform Commercial Code of any other applicable jurisdiction; (b) the conveyance
provided for in this Section shall be deemed to be a grant by the Mortgage Loan
Seller and the Sponsor to the Trustee, for the benefit of the
Certificateholders, of a security interest in all of their respective right
(including the power to convey title thereto), title and interest, whether now
owned or hereafter acquired, in and to (1) the Mortgage Notes, the Mortgages,
any related insurance policies and all other documents in the related Mortgage
Files, (2) all amounts payable to the holders of the Mortgage Loans in
accordance with the terms thereof and (3) all proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash, instruments, securities or
other property, including without limitation all amounts from time to time held
or invested in the Certificate Account, the Distribution Account or the REO
Account, whether in the form of cash, instruments, securities or other property;
(c) the possession by the Trustee or its agent
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of the Mortgage Notes and such other items of property as constitute
instruments, money, negotiable documents or chattel paper shall be deemed to be
"possession by the secured party" or possession by a purchaser or a Person
designated by such secured party, for purposes of perfecting the security
interest pursuant to the New York Uniform Commercial Code and the Uniform
Commercial Code of any other applicable jurisdiction (including, without
limitation, Section 9-305, 8-313 or 8-321 thereof); and (d) notifications to,
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. The Sponsor, the Mortgage Loan Seller and the Trustee shall, to
the extent consistent with this Agreement, take such actions as may be necessary
to ensure that, if this Agreement were deemed to create a security interest in
the Mortgage Loans, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of this Agreement. At the Sponsor's direction, the
Trustee shall execute and deliver, and the Master Servicer shall (at its
expense) file, all filings necessary to maintain the effectiveness of any
original filings necessary under the Uniform Commercial Code as in effect in any
jurisdiction to perfect and maintain the Trustee's security interest in or lien
on the Trust Fund, including without limitation (A) continuation statements and
(B) such other statements as may be occasioned by any transfer of any interest
of the Trustee, the Master Servicer, the Special Servicer or the Sponsor in the
Trust Fund. 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.
(b) In connection with the Mortgage Loan Seller's assignment pursuant
to subsection (a) above, the Mortgage Loan Seller shall deliver to and deposit
with, or cause to be delivered to and deposited with, the Trustee or a Custodian
appointed thereby, on or before the Closing Date, the Mortgage File for each
CREI Mortgage Loan so assigned by the Mortgage Loan Seller hereunder. In
addition, the Additional Warranting Party shall, at the direction and on behalf
of the Mortgage Loan Seller, deliver to and deposit with, or cause to be
delivered to and deposited with, the Trustee or a Custodian appointed thereby,
on or before the Closing Date, the Mortgage File for each NMCC Mortgage Loan so
assigned by the Mortgage Loan Seller hereunder. If the Mortgage Loan Seller or
Additional Warranting Party, as applicable, is unable to deliver any original
Mortgage Note, such party may deliver a copy of such Mortgage Note, together
with a lost note affidavit, and shall thereby be deemed to have satisfied the
document delivery requirements of this Section 2.01(b). If the Mortgage Loan
Seller or Additional Warranting Party, as applicable, cannot so deliver, or
cause to be delivered, as to any Mortgage Loan, 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 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, as the case may be, the
delivery requirements of this Section 2.01(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 a copy of such
document or instrument (without evidence of recording or filing thereon, but
certified (which certificate may relate to
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multiple documents and/or instruments) by the Mortgage Loan Seller or the
Additional Warranting Party, as applicable, to be a true and complete copy of
the original thereof submitted for recording or filing, as the case may be) is
delivered to the Trustee or a Custodian appointed thereby on or before the
Closing Date, and either the original of such missing document or instrument, or
a copy thereof, with evidence of recording or filing, as the case may be,
thereon, is delivered to the Trustee or such Custodian within 180 days of the
Closing Date (or within such longer period after the Closing Date as the Trustee
may consent to, which consent shall not be unreasonably withheld so long as the
Mortgage Loan Seller or the Additional Warranting Party, as applicable, has
provided the Trustee with evidence of such submission for recording or filing,
as the case may be, or has certified to the Trustee as to the occurrence of such
submission for recording or filing, as the case may be, and is, as certified to
the Trustee no less often than monthly, in good faith attempting to obtain from
the appropriate recording or filing office such original or copy). If the
Mortgage Loan Seller or the Additional Warranting Party, as applicable, cannot
or does not so deliver, or cause to be delivered, as to any Mortgage Loan, the
original of any of the documents and/or instruments referred to in clauses
(iii), (v), and (xi)(B) of the definition of "Mortgage File", because such
document or instrument has been delivered for recordation or filing, as the case
may be, the delivery requirements of this Section 2.01(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 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 the Mortgage Loan Seller or the Additional Warranting Party, as
applicable, to be a true and complete copy of the original thereof submitted for
recording or filing, as the case may be) is delivered to the Trustee or a
Custodian appointed thereby on or before the Closing Date, and either the
original of such missing document or instrument, or a copy thereof, with
evidence of recording or filing, as the case may be, thereon, is delivered to
the Trustee or such Custodian within 180 days of the Closing Date (or within
such longer period after the Closing Date as the Trustee may consent to, which
consent shall not be unreasonably withheld so long as the Mortgage Loan Seller
or the Additional Warranting Party, as applicable, has provided the Trustee with
evidence of such submission for recording or filing, as the case may be, or has
certified to the Trustee as to the occurrence of such submission for recording
or filing, as the case may be, and is, as certified to the Trustee no less often
than monthly, in good faith attempting to obtain from the appropriate recording
or filing office such original or copy). If the Mortgage Loan Seller or the
Additional Warranting Party, as applicable, cannot so deliver, or cause to be
delivered, as to any Mortgage Loan, 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 2.01(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 the Mortgage Loan Seller or the Additional
Warranting Party, as applicable, shall have delivered to the Trustee or a
Custodian appointed thereby, on or before the Closing Date, a commitment for
title insurance "marked-up" at the closing of such Mortgage Loan, and the
Mortgage Loan Seller or the Additional Warranting Party, as applicable, shall
deliver to the Trustee or such Custodian, promptly following the receipt
thereof, the original related lender's title insurance policy (or a copy
thereof). In addition, notwithstanding anything to the contrary
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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 Sponsor, the Master Servicer or the Special Servicer shall in
any way be liable for any failure by the Mortgage Loan Seller or the Additional
Warranting Party, as applicable, to comply with the delivery requirements of
this Section 2.01(b).
If any of the endorsements referred to in clause (i) of the definition
of "Mortgage File", any of the assignments of Mortgage referred to in clause
(iii) of the definition of "Mortgage File", any of the assignments of Assignment
of Leases referred to in clause (v) of the definition of "Mortgage File", or any
of the assignments of Security Agreement referred to in clause (vii) of the
definition of "Mortgage File" are delivered to the Trustee in blank, the Trustee
shall (without being obligated to record or file such) be responsible for
completing the related endorsement or assignment in the name of the Trustee (in
such capacity).
(c) The Mortgage Loan Seller shall, as to each CREI Mortgage Loan, and
the Additional Warranting Party shall, as to each NMCC Mortgage Loan, in each
such case at its own expense, promptly (and in any event within 45 days of the
Closing Date) submit or cause to be submitted for recording or filing, as the
case may be, in the appropriate public office for real property records or UCC
Financing Statements, as appropriate, each assignment referred to in clauses
(iii) and (v) of the definition of "Mortgage File" and each UCC-1, UCC-2 and
UCC-3, if any, referred to in clause (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, and each such UCC-1,
UCC-2 and UCC-3 shall reflect that the file copy thereof should be returned to
the Trustee following filing. At such time as such assignments, UCC-1s, UCC-2s
and UCC-3s have been returned to the Trustee, the Trustee shall promptly forward
a copy of each thereof to the Master Servicer. If any such document or
instrument is lost or returned unrecorded or unfiled, as the case may be,
because of a defect therein, the Mortgage Loan Seller, in the case of a CREI
Mortgage Loan, and the Additional Warranting Party, in the case of an NMCC
Mortgage Loan, shall promptly prepare or cause the preparation of a substitute
therefor or cure or cause the curing of such defect, as the case may be, and
thereafter the Mortgage Loan Seller, in the case of a CREI Mortgage Loan,and the
Additional Warranting Party, in the case of an NMCC Mortgage Loan, shall in each
such case at its own expense, submit the substitute or corrected documents or
cause such to be submitted for recording or filing, as appropriate.
(d) All documents and records in the Mortgage Loan Seller's or the
Additional Warranting Party's possession (or, in either case, under its control)
relating to the Mortgage Loans that are not required to be a part of a Mortgage
File in accordance with the definition thereof, together with all Escrow
Payments and Reserve Funds in the possession of the Mortgage Loan Seller or the
Additional Warranting Party (or, in either case, under its control) with respect
to the Mortgage Loans, shall be delivered or caused to be delivered by each of
the Mortgage
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Loan Seller and the Additional Warranting Party to the Master Servicer, within
10 days of the Closing Date, and shall be retained by the Master Servicer on
behalf of the Trustee in trust for the benefit of the Certificateholders.
SECTION 2.02. Acceptance of REMIC I by Trustee.
(a) The Trustee, by the execution and delivery of this Agreement,
acknowledges receipt by it or a Custodian on its behalf, subject to the
provisions of Section 2.01 and the further review provided for in this Section
2.02, of, with respect to each Mortgage Loan, an original Mortgage Note endorsed
to the Trustee, an original or a copy of the Mortgage (with evidence of
recording thereon), and an original assignment of such Mortgage executed in
favor of the Trustee (in such capacity) and of all other assets included in
REMIC I, in good faith and without notice of any adverse claim, and declares
that it or a Custodian on its behalf holds and will hold the documents delivered
or caused to be delivered by the Mortgage Loan Seller and the Additional
Warranting Party in respect of the Mortgage Loans, and that it holds and will
hold such other assets included in REMIC I, in trust for the exclusive use and
benefit of all present and future Certificateholders.
(b) Within 60 days of the Closing Date (or, in the case of any
Mortgage Loan as to which a Servicing Transfer Event has occurred during such
60-day period of which event the Trustee has notice, within the shorter of 60
days of the Closing Date and five Business Days of the Trustee's receiving such
notice), the Trustee or a Custodian on its behalf shall review each of the
documents delivered or caused to be delivered by the Mortgage Loan Seller or the
Additional Warranting Party with respect to each Mortgage Loan pursuant to
Section 2.01(b); and, promptly following such review, the Trustee shall, subject
to Section 2.02(d), certify in writing to each of the Sponsor, the Master
Servicer, the Special Servicer, the Mortgage Loan Seller and the Additional
Warranting Party that as to each Mortgage Loan listed in the Mortgage Loan
Schedule (other than any Mortgage Loan paid in full), and except as specifically
identified in any exception report annexed to such certification, (i) all
documents specified in clauses (i) - (iii), (ix) and, if the Mortgage Loan
Schedule specifies that the related Mortgagor has a leasehold interest in the
related Mortgaged Property, (xiii) of the definition of "Mortgage File" are in
its possession or the possession of a Custodian on its behalf, or the Mortgage
Loan Seller or the Additional Warranting Party, as applicable, has otherwise
satisfied the delivery requirements in respect of such documents in accordance
with Section 2.01(b), (ii) all documents received by it or any Custodian in
respect of such Mortgage Loan have been reviewed by it or by a Custodian on its
behalf and appear regular on their face and relate to such Mortgage Loan, and
(iii) based on such examination and only as to the foregoing documents, the
information set forth in the Mortgage Loan Schedule with respect to the items
specified in clauses (i), (ii), (iv) and (vi)(B) of the definition of "Mortgage
Loan Schedule" is correct.
(c) The Trustee or a Custodian on its behalf shall review each of the
documents relating to the Mortgage Loans received thereby subsequent to the
Closing Date; and, on or about the first anniversary of the Closing Date, the
Trustee shall, subject to Section 2.02(d), certify in writing to each of the
Sponsor, the Master Servicer, the Special Servicer, the
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Mortgage Loan Seller and the Additional Warranting Party that as to each
Mortgage Loan listed on the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full or otherwise liquidated), and except as specifically identified in
any exception report annexed to such certification, (i) all documents specified
in clauses (i), (ii), (ix) and, if the Mortgage Loan Schedule specifies that the
related Mortgagor has a leasehold interest in the related Property, (xiii) of
the definition of "Mortgage File" are in its possession or the possession of a
Custodian on its behalf, or the Mortgage Loan Seller or the Additional
Warranting Party, as applicable, has otherwise satisfied the delivery
requirements in respect of such documents in accordance with Section 2.01(b),
(ii) it or a Custodian on its behalf has received either the original or copy of
each of the assignments specified in clauses (iii) and (v) of the definition of
"Mortgage File" that were delivered by the Mortgage Loan Seller or the
Additional Warranting Party, with evidence of recording thereon, (iii) all
documents received by it or any Custodian in respect of such Mortgage Loan have
been reviewed by it or by such Custodian on its behalf and appear regular on
their face and relate to such Mortgage Loan, and (iv) based on the examinations
referred to in subsection (b) above and this subsection (c) and only as to the
foregoing documents, the information set forth in the Mortgage Loan Schedule
with respect to the items specified in clauses (i), (ii), (iv) and (vi)(B) of
the definition of "Mortgage Loan Schedule", is correct.
(d) It is herein acknowledged that, notwithstanding any other
provision hereof, neither the Trustee nor any Custodian is under any duty or
obligation (i) to determine whether any of the documents specified in clauses
(iv) - (viii), (x) - (xii) and (xiv)-(xv) of the definition of "Mortgage File"
exist or are required to be delivered by the Mortgage Loan Seller or the
Additional Warranting Party, as applicable, in respect of any Mortgage Loan or
(ii) to inspect, review or examine any of the documents, instruments,
certificates or other papers relating to the Mortgage Loans delivered to it to
determine that the same are genuine, enforceable, in recordable form or
appropriate for the represented purpose, or that they are other than what they
purport to be on their face.
(e) If, in the process of reviewing the documents delivered or caused
to be delivered by the Mortgage Loan Seller and the Additional Warranting Party
pursuant to Section 2.01(b), the Trustee or any Custodian discovers that any
document required to have been delivered pursuant to Section 2.01(b) has not
been so delivered, or discovers that any of the documents that were delivered
has not been properly executed, contains information that does not conform in
any material respect with the corresponding information set forth in the
Mortgage Loan Schedule, or is defective on its face (each, including, without
limitation, that a document is missing, a "Document Defect"), or if, at any
other time, the Trustee or any other party hereto discovers a Document Defect in
respect of any Mortgage Loan, the party discovering such Document Defect shall
promptly so notify each of the other parties hereto. If and when such party is
notified of or discovers any error in the Mortgage Loan Schedule, the Mortgage
Loan Seller, if a CREI Mortgage Loan is affected, or the Additional Warranting
Party, if an NMCC Mortgage Loan is affected, shall promptly correct such error
and distribute a new, corrected Mortgage Loan Schedule to each of the other
parties hereto. Such new, corrected Mortgage Loan Schedule shall be deemed to
amend and replace the existing Mortgage Loan Schedule.
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SECTION 2.03. Mortgage Loan Seller's and Additional Warranting Party's
Repurchase of Mortgage Loans for Document Defects and Certain Breaches of
Representations and Warranties.
(a) Within 120 days of the earlier of discovery or receipt of notice
by the Responsible Party, of a Document Defect in respect of any Mortgage Loan
or a breach of any representation or warranty set forth in Section 2.05(c) in
respect of any Mortgage Loan, which Document Defect or breach, as the case may
be, materially and adversely affects the value of such Mortgage Loan or the
interests of the Certificateholders therein, the Responsible Party shall cure
such Document Defect or breach, as the case may be, in all material respects or
repurchase (or, if the Responsible Party is the Mortgage Loan Seller, cause an
Affiliate to purchase) the affected Mortgage Loan at the applicable Purchase
Price by deposit of such Purchase Price into the Certificate Account and
delivery to the Trustee of a written certification that such deposit has been
made. Notwithstanding the immediately preceding sentence, within 90 days of the
earlier of discovery or receipt of notice by the Responsible Party that there is
a breach of the representation and warranty set forth in Section 2.05(c)(xxxi)
(i.e., that any Mortgage Loan does not constitute a "qualified mortgage" within
the meaning of Section 860G(a)(3) of the Code), the Responsible Party shall
repurchase such Mortgage Loan at the applicable Purchase Price by deposit of
such Purchase Price into the Certificate Account and delivery to the Trustee of
a written certification that such deposit has been made.
(b) In connection with any repurchase of a Mortgage Loan contemplated
by this Section 2.03, the Trustee, the Master Servicer and the Special Servicer
shall each tender or cause to be tendered to the Responsible Party, upon
delivery to each of the Trustee, the Master Servicer and the Special Servicer of
a receipt executed by the Responsible Party, all portions of the Mortgage File
and other documents and funds pertaining to such Mortgage Loan possessed by it
(or any Custodian or Sub-Servicer on its behalf), and each document that
constitutes a part of the Mortgage File that was endorsed or assigned to the
Trustee shall be endorsed or assigned, as the case may be, to or at the
direction of the Responsible Party, in the same manner. The form, sufficiency
and expense of all such instruments and certificates shall be the responsibility
of the Responsible Party.
(c) This Section 2.03 provides the sole remedies available to the
Certificateholders, or to the Trustee on behalf of the Certificateholders,
respecting any Document Defect or any breach of any representation or warranty
set forth in Section 2.05(c) hereof. If the Responsible Party defaults on its
obligations to repurchase any Mortgage Loan in accordance with Section 2.03(a)
hereof, or disputes its obligation to repurchase any Mortgage Loan in accordance
with any such provision, the Trustee shall promptly notify the
Certificateholders and, subject to Sections 8.01 and 8.02 and its right to
reimbursement pursuant to Section 8.05(b), shall take such action as may be
appropriate to enforce such payment or performance, including, without
limitation, the institution and prosecution of appropriate proceedings. If it is
judicially determined or subsequently agreed that the Responsible Party, is
required to repurchase such Mortgage Loan under Section 2.03(a) or 2.03(b)
hereof, the Responsible Party shall reimburse the Trustee for all necessary and
reasonable costs and expenses incurred in connection with such
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enforcement, and otherwise the Trustee's right of reimbursement shall be limited
to amounts on deposit in the Distribution Account from time to time in
accordance with Section 8.05(b) and to such other sources of security and
indemnity as shall have been offered to the Trustee by the Certificateholders.
SECTION 2.04. Representations and Warranties of the Sponsor.
(a) The Sponsor hereby represents and warrants to each of the other
parties to this Agreement and for the benefit of the Certificateholders, as of
the Closing Date, that:
(i) The Sponsor is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware.
(ii) The execution and delivery of this Agreement by the Sponsor, and
the performance and compliance with the terms of this Agreement by the
Sponsor, will not violate the Sponsor's certificate of incorporation or
bylaws or constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or result in the breach
of, any material agreement or other instrument to which it is a party or
which is applicable to it or any of its assets.
(iii) The Sponsor has the full power and authority to enter into and
consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement, and
has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by each of the other parties hereto, constitutes a valid, legal
and binding obligation of the Sponsor, enforceable against the Sponsor 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) The Sponsor 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, any order or decree
of any court or arbiter, or any order, regulation or demand of any federal,
state or local governmental or regulatory authority, which violation, in
the Sponsor's good faith and reasonable judgment, is likely to affect
materially and adversely either the ability of the Sponsor to perform its
obligations under this Agreement or the financial condition of the Sponsor.
(vi) The transfer of the Mortgage Loans to the Trustee as contemplated
herein requires no regulatory approval, other than any such approvals as
have been obtained,
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and is not subject to any bulk transfer or similar law in effect in any
applicable jurisdiction.
(vii) No litigation is pending or, to the best of the Sponsor's
knowledge, threatened against the Sponsor which would prohibit the Sponsor
from entering into this Agreement or, in the Sponsor's good faith and
reasonable judgment, is likely to materially and adversely affect either
the ability of the Sponsor to perform its obligations under this Agreement
or the financial condition of the Sponsor.
(b) Upon discovery by any of the parties hereto of a breach of any of
the foregoing representations and warranties which materially and adversely
affects the interests of the Certificateholders or any party hereto, the party
discovering such breach shall give prompt written notice to each of the other
parties hereto.
SECTION 2.05. Representations and Warranties of the Mortgage Loan
Seller and the Additional Warranting Party.
(a) The Mortgage Loan Seller hereby represents and warrants to the
other parties hereto and for the benefit of the Certificateholders, as of the
Closing Date, that:
(i) The Mortgage Loan Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
(ii) The execution and delivery of this Agreement by the Mortgage Loan
Seller, and the performance and compliance with the terms of this Agreement
by the Mortgage Loan Seller, will not violate the Mortgage Loan Seller's
certificate of incorporation and by-laws or constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a
default) under, or result in the breach of, any material agreement or other
instrument to which it is a party or which is applicable to it or any of
its assets.
(iii) The Mortgage Loan Seller has the full power and authority to
enter into and consummate all transactions contemplated by this Agreement,
has duly authorized the execution, delivery and performance of this
Agreement, and has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by each of the other parties hereto, constitutes a valid, legal
and binding obligation of the Mortgage Loan Seller, enforceable against the
Mortgage Loan Seller 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.
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(v) The Mortgage Loan Seller 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, any
order or decree of any court or arbiter, or any order, regulation or demand
of any federal, state or local governmental or regulatory authority, which
violation, in the Mortgage Loan Seller's good faith and reasonable
judgment, is likely to affect materially and adversely either the ability
of the Mortgage Loan Seller to perform its obligations under this Agreement
or the financial condition of the Mortgage Loan Seller.
(vi) No litigation is pending or, to the best of the Mortgage Loan
Seller's knowledge, threatened against the Mortgage Loan Seller which would
prohibit the Mortgage Loan Seller from entering into this Agreement or, in
the Mortgage Loan Seller's good faith and reasonable judgment, is likely to
materially and adversely affect either the ability of the Mortgage Loan
Seller to perform its obligations under this Agreement or the financial
condition of the Mortgage Loan Seller.
(b) The Additional Warranting Party hereby represents and warrants to
the other parties hereto and for the benefit of the Certificateholders, as of
the Closing Date, that:
(i) The Additional Warranting Party is a corporation duly organized,
validly existing and in good standing under the laws of the State of Texas.
(ii) The execution and delivery of this Agreement by the Additional
Warranting Party, and the performance and compliance with the terms of this
Agreement by the Additional Warranting Party, will not violate the
Additional Warranting Party's certificate of incorporation and by-laws or
constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, or result in the breach of, any
material agreement or other instrument to which it is a party or which is
applicable to it or any of its assets.
(iii) The Additional Warranting Party has the full power and authority
to enter into and consummate all transactions contemplated by this
Agreement, has duly authorized the execution, delivery and performance of
this Agreement, and has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by each of the other parties hereto, constitutes a valid, legal
and binding obligation of the Additional Warranting Party, enforceable
against the Additional Warranting Party 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.
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(v) The Additional Warranting Party 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, any order or decree of any court or arbiter, or any order, regulation
or demand of any federal, state or local governmental or regulatory
authority, which violation, in the Additional Warranting Party's good faith
and reasonable judgment, is likely to affect materially and adversely
either the ability of the Additional Warranting Party to perform its
obligations under this Agreement or the financial condition of the
Additional Warranting Party.
(vi) No litigation is pending or, to the best of the Additional
Warranting Party's knowledge, threatened against the Additional Warranting
Party which would prohibit the Additional Warranting Party from entering
into this Agreement or, in the Additional Warranting Party's good faith and
reasonable judgment, is likely to materially and adversely affect either
the ability of the Additional Warranting Party to perform its obligations
under this Agreement or the financial condition of the Additional
Warranting Party.
(c) The Mortgage Loan Seller hereby represents and warrants (and,
accordingly, is the "Representing Party" with respect to each such
representation and warranty so made) with respect to (but solely with respect
to) each CREI Mortgage Loan, and the Additional Warranting Party hereby
represents and warrants (and, accordingly, is the "Representing Party" with
respect to each such representation and warranty so made) with respect to (but
solely with respect to) each NMCC Mortgage Loan, to the other parties hereto and
for the benefit of the Certificateholders, as of the date hereinbelow specified
or, if no such date is specified, as of the Closing Date, that:
(i) Immediately prior to the transfer thereof by the Representing
Party to the Mortgage Loan Seller (in the case of the Additional Warranting
Party) or the Trustee (in the case of the Mortgage Loan Seller), the
Representing Party had good and marketable title to, and was the sole owner
and holder of, such Mortgage Loan, free and clear of any and all liens,
encumbrances and other interests on, in or to such Mortgage Loan (other
than, in certain cases, the right of a sub-servicer to primary service such
Mortgage Loan).
(ii) The Representing Party had full right and authority to sell,
assign and transfer such Mortgage Loan to the Mortgage Loan Seller (in the
case of the Additional Warranting Party) or the Trustee (in the case of the
Mortgage Loan Seller).
(iii) The information pertaining to such Mortgage Loan set forth in
the Mortgage Loan Schedule was true and correct in all material respects as
of the Cut-off Date.
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(iv) Such Mortgage Loan was not, as of the Cut-off Date, 30 days or
more delinquent in respect of any Monthly Payment of principal and/or
interest required thereunder, without giving effect to any applicable grace
period.
(v) Each Mortgage securing such Mortgage Loan constitutes a valid
first lien upon the related Mortgaged Property, including all buildings
located thereon and all fixtures attached thereto, subject only to (and
such Mortgaged Property is free and clear of all encumbrances and liens
having priority over the lien of such Mortgage, except for) (A) the lien of
current real property taxes and assessments not yet due and payable, (B)
covenants, conditions and restrictions, rights of way, easements and other
matters of public record, and (C) exceptions and exclusions specifically
referred to in the lender's title insurance policy issued or, as evidenced
by a "marked-up" commitment, to be issued in respect of such Mortgage Loan
(the exceptions set forth in the foregoing clauses (A), (B) and (C)
collectively, "Permitted Encumbrances"). Such Permitted Encumbrances do not
materially interfere with the security intended to be provided by the
related Mortgage(s), the current use of the related Mortgaged Property, or
the current ability of such Mortgaged Property to generate net operating
income sufficient to service the Mortgage Loan.
(vi) The lien of each related Mortgage is insured by an ALTA lender's
title insurance policy, or its equivalent as adopted in the applicable
jurisdiction, issued by a nationally recognized title insurance company,
insuring the originator of the related Mortgage Loan, its successors and
assigns, as to the first priority lien of the Mortgage in the original
principal amount of the related Mortgage Loan after all advances of
principal, subject only to Permitted Encumbrances (or, if a title insurance
policy has not yet been issued in respect of any Mortgage Loan, a policy
meeting the foregoing description is evidenced by a commitment for title
insurance "marked-up" at the closing of such loan).
(vii) The Representing Party has not waived any material default,
breach, violation or event of acceleration existing under the related
Mortgage or Mortgage Note.
(viii) There is no valid offset, defense or counterclaim to such
Mortgage Loan.
(ix) The Representing Party has not received actual notice (A) that
there is any proceeding pending or threatened for the total or partial
condemnation of the related Mortgaged Property or (B) that there is any
material damage at the related Mortgaged Property that materially and
adversely affects the value of such Mortgaged Property.
(x) At origination, such Mortgage Loan complied in all material
respects with all requirements of federal, state and local laws, including,
without limitation, laws pertaining to usury, relating to the origination
of such Mortgage Loan.
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(xi) The proceeds of such Mortgage Loan have been fully disbursed and
there is no requirement for future advances thereunder.
(xii) The Mortgage Note and Mortgage(s) for such Mortgage Loan and all
other documents and instruments evidencing, guaranteeing, insuring or
otherwise securing such Mortgage Loan are each the legal, valid and binding
obligation of the maker thereof (subject to any non-recourse provisions
contained in any of the foregoing agreements and any applicable state
anti-deficiency legislation), enforceable in accordance with their
respective terms, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, receivership, moratorium or other laws relating
to or affecting the rights of creditors generally and by general principles
of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
(xiii) The related Mortgaged Property is: (A) if a commercial
property, insured by a fire and extended perils insurance policy, issued by
an insurer meeting the requirements of such Mortgage Loan in an amount not
less than the greater of (a) the replacement cost and (b) the amount
necessary to avoid the operation of any co-insurance provisions with
respect to such Mortgaged Property, including (except if such Mortgaged
Property is operated as a mobile home park), at least twelve months rental
insurance in an amount equal to the gross rentals for such period and broad
form boiler and machinery insurance; such insurance policy provides that it
shall not be cancelled, endorsed, altered or reissued to effect a change in
coverage unless such insurer shall have first given the Master Servicer
thirty days prior written notice and no notice has been received as of the
date hereof; all premiums required to be paid on such policy have been
paid; the related Mortgage obligates the Mortgagor to maintain all such
insurance and, at the Mortgagor's failure to do so, authorizes the
mortgagee to purchase such insurance at the Mortgagor's cost and expense
and to seek reimbursement from such Mortgagor; and (B) if a multifamily
property, insured by a fire and extended perils insurance policy, issued by
an insurer meeting the requirements of such Mortgage Loan including rent
loss and such other hazards, casualties, liabilities and contingencies the
Master Servicer shall require and in such amounts and for such periods as
the Master Servicer shall require; at least thirty days prior to the
expiration date of such policy, the related Mortgage requires the Mortgagor
to deliver to the Master Servicer a renewal policy in form satisfactory to
the Master Servicer; all premiums required to be paid on such policy have
been paid; the Mortgage obligates the related Mortgagor to maintain all
such insurance and, at such Mortgagor's failure to do so, authorizes the
mortgagee to purchase such insurance at the Mortgagor's cost and expense
and to seek reimbursement from such Mortgagor.
(xiv) In connection with or subsequent to the origination of such
Mortgage Loan, one or more environmental site assessments (or an update of
a previously conducted assessment) were performed with respect to the
related Mortgaged Property, and the Representing Party, having made no
independent inquiry other than reviewing the resulting report(s) and/or
employing an environmental consultant to perform the
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assessment(s) referenced herein, has no knowledge of any material and
adverse environmental condition or circumstance affecting such Mortgaged
Property that was not disclosed in the related report(s).
(xv) Such Mortgage Loan is not cross-collateralized with a mortgage
loan outside the Mortgage Pool.
(xvi) The terms of the Mortgage Note and Mortgage(s) for such Mortgage
Loan have not been impaired, waived, altered or modified in any material
respect, except as specifically set forth in the related Mortgage File.
(xvii) There are no delinquent taxes, ground rents, water charges,
sewer rents, insurance premiums, assessments, including assessments payable
in future installments, or other similar outstanding charges affecting the
related Mortgaged Property.
(xviii) The interest of the related Mortgagor in each related
Mortgaged Property consists of a fee simple and/or leasehold estate in real
property.
(xix) Such Mortgage Loan is a whole loan and not a participation
interest.
(xx) The assignment of the related Mortgage to the Trustee constitutes
the legal, valid and binding assignment of such Mortgage from the relevant
assignor to the Trustee, and the assignment of the related Assignment of
Leases, if any, or of any other agreement executed in connection with such
Mortgage Loan to the Trustee constitutes the legal, valid and binding
assignment thereof from the relevant assignor to the Trustee.
(xxi) All escrow deposits (including capital improvements and
environmental remediation reserves) relating to such Mortgage Loan that
were required to be delivered to the mortgagee under the terms of the
related loan documents, have been received and, to the extent of any
remaining balances thereof, are in the possession, or under the control of
the Representing Party or its agents (which shall include the Master
Servicer).
(xxii) As of the date of origination of such Mortgage Loan and as of
the Closing Date, the related Mortgaged Property was and is free and clear
of any mechanics' and materialmen's liens or liens in the nature thereof
which create a lien prior to that created by the related Mortgage(s).
(xxiii) No improvement that was included for the purpose of
determining the appraised value of the related Mortgaged Property at the
time of origination of such Mortgage Loan lies outside the boundaries and
building restriction lines of such property to any material extent, and no
improvements on adjoining properties materially encroach upon such
Mortgaged Property to any material extent, and no improvement located on or
forming part of such Mortgaged Property is in material violation of any
applicable
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zoning laws or ordinances (except to the extent that they may constitute
legal non-conforming uses).
(xxiv) To the extent required under applicable law as of the Closing
Date, the originator of such Mortgage Loan was authorized to do business in
the jurisdiction in which the related Mortgaged Property is located at all
times when it held the Mortgage Loan.
(xxv) There is no material default, breach or event of acceleration
existing under the related Mortgage or Mortgage Note, and the Representing
Party has not received actual notice of any event (other than payments due
but not yet delinquent) that, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute such a
material default, breach or event of acceleration; provided, however, that
this representation and warranty does not cover any default, breach or
event of acceleration that specifically pertains to any matter otherwise
covered by any other representation and warranty made by the Representing
Party in any of paragraphs (iv), (xiv), (xvii), (xxi), (xxiii) and (xxix)
of this Section 2.05(c).
(xxvi) If such Mortgage Loan is secured in whole or in part by the
interest of a Mortgagor under a Ground Lease and by the related fee
interest, such fee interest is subordinate to the related Mortgage and the
related Mortgage does not by its terms provide that it will be subordinated
to the lien of any mortgage or any other lien upon such fee interest.
(xxvii) Such Mortgage Loan does not contain any equity participation
by the lender, provide for any contingent or additional interest in the
form of participation in the cash flow of the related Mortgaged Property or
provide for the negative amortization of interest.
(xxviii) No holder of such Mortgage Loan has, to the Representing
Party's knowledge, advanced funds or induced, solicited or knowingly
received any advance of funds from a party other than the owner of the
related Mortgaged Property, directly or indirectly, for the payment of any
amount required by the Mortgage Loan.
(xxix) To the Representing Party's knowledge, based on due diligence
customarily performed in the origination of comparable mortgage loans, as
of the date of origination of such Mortgage Loan, (A) the related Mortgagor
was in possession of all material licenses, permits and authorizations
required by applicable laws for the ownership and operation of the related
Mortgaged Property as it was then operated and (B) all such licenses,
permits and authorizations were valid and in full force and effect.
(xxx) The related Mortgage(s) or Mortgage Note, together with
applicable state law, contains customary and enforceable provisions
(subject to the exceptions set forth in clauses (c)(v) and (c)(xii) above)
such as to render the rights and remedies of the
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holders thereof adequate for the practical realization against the related
Mortgaged Property of the principal benefits of the security intended to be
provided thereby.
(xxxi) Such Mortgage Loan is a "qualified mortgage" within the meaning
of Section 860G(a)(3) of the Code.
(xxxii) If such Mortgage Loan is secured by a mortgage lien on the
applicable Mortgagor's leasehold interest in the related Mortgaged
Property, then either (A) the related ground lessor has subordinated its
interest in the related Mortgaged Property to the interest of the holder of
the Mortgage Loan or (B) the related ground lessor has granted the holder
of the Mortgage Loan the right to cure any default or breach by the lessee.
(xxxiii) No fraud with respect to such Mortgage Loan has taken place
on the part of the Representing Party in connection with the origination of
such Mortgage Loan.
(xxxiv) If such Mortgage Loan is one of the Health Care Loans
identified on the Mortgage Loan Schedule by loan numbers 400005, 962355,
951325 or 962354, then the related Mortgage Loan documents provide that an
escrow in the amount of three Monthly Payments be maintained and that such
escrow be replenished if ever drawn upon. Such funds have been delivered to
the Master Servicer or a Sub-Servicer.
(xxxv) Except in the case of the Health Care Loans during any period
that they do not in any such case constitute a Specially Serviced Mortgage
Loan or an REO Loan, the terms of such Mortgage Loan and/or the terms of
this Agreement and any Sub-Servicing Agreement to which such Mortgage Loan
is subject, provide that payments on and proceeds of such Mortgage Loan
will be applied for purposes of calculating distributions on the
Certificates and additional compensation payable to the Master Servicer,
the Special Servicer and any related Sub-Servicer, to principal and
interest at the related Mortgage Rate due and owing at the time such
payments or proceeds are received, prior to being applied to any Penalty
Charges, assumption fees and modification fees then due and owing.
(xxxvi) If such Mortgage Loan is, as of the Closing Date, subject to a
Sub-Servicing Agreement, such Sub-Servicing Agreement provides that the
related Sub-Servicer is not to receive any sub-servicing compensation with
respect to such Mortgage Loan during any period that such Mortgage Loan is
a Specially Serviced Mortgage Loan or an REO Loan (except for any
"Termination Strip" payable to a Sub-Servicer in connection with a
termination thereof without cause as contemplated by Section 3.22(d)
hereof).
(xxxvii) The servicing and collection practices used with respect to
such Mortgage Loan have been in all material respects legal and prudent and
have met
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customary standards utilized by prudent institutional multifamily and
commercial mortgage loan servicers.
The Mortgage Loan Seller hereby represents and warrants (and,
accordingly, is the "Representing Party" with respect to such representation and
warranty so made) with respect to each NMCC Mortgage Loan, to the other parties
hereto and for the benefit of the Certificateholders, as of the Closing Date,
that: assuming the truth and accuracy of the representations and warranties made
by the Additional Warranting Party with respect to each NMCC Mortgage Loan
pursuant to paragraphs (i) and (ii) of this Section 2.05(c), immediately prior
to the transfer of such NMCC Mortgage Loan by the Mortgage Loan Seller to the
Trustee, the Mortgage Loan Seller had good and marketable title to, and was the
sole owner and holder of, such NMCC Mortgage Loan, free and clear of any and all
liens, encumbrances and other interests on, in or to such NMCC Mortgage Loan
(other than, in certain cases, the right of a sub-servicer to primary service
such NMCC Mortgage Loan), and the Mortgage Loan Seller had full right and
authority to sell, assign and transfer such NMCC Mortgage Loan to the Trustee.
(d) It is understood and agreed that the representations and
warranties set forth in this Section 2.05 shall survive delivery of the
respective Mortgage Files to the Trustee or a Custodian on its behalf and shall
inure to the benefit of the Certificateholders notwithstanding any restrictive
or qualified endorsement or assignment. Upon discovery by any of the parties
hereto of a breach of any of the representations and warranties set forth in
subsection (a) or (b) above which materially and adversely affects the interests
of the Certificateholders or any party hereto or a breach of any of the
representations and warranties set forth in subsection (c) above which
materially and adversely affects the value of any Mortgage Loan or the interests
therein of the Certificateholders, the party discovering such breach shall give
prompt written notice to each of the other parties hereto. It is further
understood and agreed that the Mortgage Loan Seller makes no representations or
warranties with regard to the NMCC Mortgage Loans (except as set forth in the
last sentence of Section 2.05(c) above) and that the Mortgage Loan Seller has no
obligation to cure any breach of any representation or warranty made by the
Additional Warranting Party with respect to an NMCC Mortgage Loan nor to
repurchase any NMCC Mortgage Loan (except in connection with any breach of the
representation and warranty made by the Mortgage Loan Seller in the last
sentence of Section 2.05(c) above). It is also further understood and agreed
that the Additional Warranting Party makes no representations or warranties with
regard to the CREI Mortgage Loans and that the Additional Warranting Party has
no obligation to cure any breach of any representation or warranty made by the
Mortgage Loan Seller with respect to a CREI Mortgage Loan nor to repurchase any
CREI Mortgage Loan.
SECTION 2.06. Representations and Warranties of the Master Servicer.
(a) The Master Servicer hereby represents and warrants to the other
parties hereto and for the benefit of the Certificateholders, as of the Closing
Date, that:
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(i) The Master Servicer is a corporation duly organized, validly
existing and in good standing under the laws of the State of California and
the Master Servicer 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 the Master
Servicer, and the performance and compliance with the terms of this
Agreement by the Master Servicer, will not violate the Master Servicer'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) The Master Servicer has the full power and authority to enter
into and consummate all transactions contemplated by this Agreement, has
duly authorized the execution, delivery and performance of this Agreement,
and has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by each of the other parties hereto, constitutes a valid, legal
and binding obligation of the Master Servicer, enforceable against the
Master Servicer 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) The Master Servicer 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, any
order or decree of any court or arbiter, or any order, regulation or demand
of any federal, state or local governmental or regulatory authority, which
violation, in the Master Servicer's good faith and reasonable judgment, is
likely to affect materially and adversely either the ability of the Master
Servicer to perform its obligations under this Agreement or the financial
condition of the Master Servicer.
(vi) No litigation is pending or, to the best of the Master Servicer's
knowledge, threatened against the Master Servicer which would prohibit the
Master Servicer from entering into this Agreement or, in the Master
Servicer's good faith and reasonable judgment, is likely to materially and
adversely affect either the ability of the Master Servicer to perform its
obligations under this Agreement or the financial condition of the Master
Servicer.
(vii) Each officer, director or employee of the Master Servicer that
has responsibilities concerning the servicing and administration of the
Mortgage Loans is covered by errors and omissions insurance in the amounts
and with the coverage required
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by Section 3.07(c). Neither the Master Servicer nor any of its officers,
directors or employees that is involved in the servicing or administration
of the Mortgage Loans has been refused such coverage or insurance.
(b) Upon discovery by any of the parties hereto of a breach of any of
the foregoing representations and warranties which materially and adversely
affects the interests of the Certificateholders or any party hereto, the party
discovering such breach shall give prompt written notice to each of the other
parties hereto.
(c) 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
2.06(a), subject to such appropriate modifications to the representation and
warranty set forth in Section 2.06(a)(i) to accurately reflect such successor's
jurisdiction of organization and whether it is a corporation, partnership, bank,
association or other type of organization.
SECTION 2.07. Representations and Warranties of the Special Servicer.
(a) The Special Servicer hereby represents and warrants to the other
parties hereto and for the benefit of the Certificateholders, as of the Closing
Date, that:
(i) The Special Servicer is a corporation duly organized, validly
existing and in good standing under the laws of the State of California,
and the Special Servicer 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 the Special
Servicer, and the performance and compliance with the terms of this
Agreement by the Special Servicer, will not violate the Special Servicer'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) The Special Servicer has the full power and authority to enter
into and consummate all transactions contemplated by this Agreement, has
duly authorized the execution, delivery and performance of this Agreement,
and has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by each of the other parties hereto, constitutes a valid, legal
and binding obligation of the Special Servicer, enforceable against the
Special Servicer 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.
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(v) The Special Servicer 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, any
order or decree of any court or arbiter, or any order, regulation or demand
of any federal, state or local governmental or regulatory authority, which
violation, in the Special Servicer's good faith and reasonable judgment, is
likely to affect materially and adversely either the ability of the Special
Servicer to perform its obligations under this Agreement or the financial
condition of the Special Servicer.
(vi) No litigation is pending or, to the best of the Special
Servicer's knowledge, threatened against the Special Servicer which would
prohibit the Special Servicer from entering into this Agreement or, in the
Special Servicer's good faith and reasonable judgment, is likely to
materially and adversely affect either the ability of the Special Servicer
to perform its obligations under this Agreement or the financial condition
of the Special Servicer.
(vii) Each officer, director or employee of the Special Servicer that
has or, following the occurrence of a Servicing Transfer Event, would have
responsibilities concerning the servicing and administration of the
Mortgage Loans is covered by errors and omissions insurance in the amounts
and with the coverage required by Section 3.07(c). Neither the Special
Servicer nor any of its officers, directors or employees that is or,
following the occurrence of a Servicing Transfer Event, would be involved
in the servicing or administration of the Mortgage Loans has been refused
such coverage or insurance.
(b) Upon discovery by any of the parties hereto of a breach of any of
the foregoing representations and warranties which materially and adversely
affects the interests of the Certificateholders or any party hereto, the party
discovering such breach shall give prompt written notice to each of the other
parties hereto.
(c) Any successor Special Servicer shall be deemed to have made, as of
the date of its succession, each of the representations set forth in Section
2.07(a), subject to such appropriate modifications to the representation and
warranty set forth in Section 2.07(a)(i) to accurately reflect such successor's
jurisdiction of organization and whether it is a corporation, partnership, bank,
association or other type of organization.
SECTION 2.08. Representations and Warranties of the Trustee and the
REMIC Administrator.
(a) LaSalle National Bank, both in its capacity as Trustee and in its
capacity as REMIC Administrator (the "Bank"), hereby represents and warrants to
the other parties hereto and for the benefit of the Certificateholders, as of
the Closing Date, that:
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(i) The Bank is a national bank duly organized, validly existing and
in good standing under the laws of the United States and is, shall be or,
if necessary, shall appoint a co-trustee that is, in compliance with the
laws of each State in which any Mortgaged Property is located to the extent
necessary to ensure the enforceability of each Mortgage Loan and to perform
its obligations under this Agreement.
(ii) The execution and delivery of this Agreement by the Bank, and the
performance and compliance with the terms of this Agreement by the Bank, do
not violate the Bank'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) The Bank has the full power and authority to enter into and
consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement, and
has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by each of the other parties hereto, constitutes a valid, legal
and binding obligation of the Bank, enforceable against the Bank 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) The Bank 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, any order or decree
of any court or arbiter, or any order, regulation or demand of any federal,
state or local governmental or regulatory authority, which violation, in
the Bank's good faith and reasonable judgment, is likely to affect
materially and adversely either the ability of the Bank to perform its
obligations under this Agreement or the financial condition of the Bank.
(vi) No litigation is pending or, to the best of the Bank's knowledge,
threatened against the Bank which would prohibit the Bank from entering
into this Agreement or, in the Bank's good faith and reasonable judgment,
is likely to materially and adversely affect either the ability of the Bank
to perform its obligations under this Agreement or the financial condition
of the Bank.
(b) Upon discovery by any of the parties hereto of a breach of any of
the foregoing representations and warranties which materially and adversely
affects the interests of the Certificateholders or any party hereto, the party
discovering such breach shall give prompt written notice to each of the other
parties hereto.
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(c) Any successor Trustee or REMIC Administrator shall be deemed to
have made, as of the date of its succession, each of the representations set
forth in Section 2.08(a), subject to such appropriate modifications to the
representation and warranty set forth in Section 2.08(a)(i) to accurately
reflect such successor's jurisdiction of organization and whether it is a
corporation, partnership, bank, association or other type of organization. In
any such case, the term "Trustee and REMIC Administrator" shall be deemed to
mean the Trustee or the REMIC Administrator, as appropriate.
SECTION 2.09. Representations and Warranties of the Fiscal Agent.
(a) The Fiscal Agent hereby represents and warrants to each of the
other parties hereto and for the benefit of the Certificateholders, as of the
Closing Date, that:
(i) The Fiscal Agent is a foreign banking corporation duly organized,
validly existing and in good standing under the laws governing its
creation.
(ii) The execution and delivery of this Agreement by the Fiscal Agent,
and the performance and compliance with the terms of this Agreement by the
Fiscal Agent, will not violate the Fiscal Agent'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 a material breach
of, any material agreement or other instrument to which it is a party or
which is applicable to it or any of its assets.
(iii) The Fiscal Agent has the full power and authority to enter into
and consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement, and
has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by each of the other parties hereto, constitutes a valid, legal
and binding obligation of the Fiscal Agent, enforceable against the Fiscal
Agent 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) The Fiscal Agent 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, any
order or decree of any court or arbiter, or any order, regulation or demand
of any federal, state or local governmental or regulatory authority, which
violation, in the Fiscal Agent's good faith and reasonable judgment, is
likely to affect materially and adversely
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either the ability of the Fiscal Agent to perform its obligations under
this Agreement or the financial condition of the Fiscal Agent.
(vi) No litigation is pending or, to the best of the Fiscal Agent's
knowledge, threatened against the Fiscal Agent that, if determined
adversely to the Fiscal Agent, would prohibit the Fiscal Agent from
entering into this Agreement or that, in the Fiscal Agent's good faith and
reasonable judgment, is likely to materially and adversely affect either
the ability of the Fiscal Agent to perform its obligations under this
Agreement or the financial condition of the Fiscal Agent.
(b) Upon discovery by any party hereto of any breach of any of the
foregoing representations and warranties, which materially and adversely affects
the interests of the Certificateholders or any party hereto, the party
discovering such breach shall given prompt written notice to the other parties
hereto.
(c) Any successor Fiscal Agent shall be deemed to have made, as of the
date of its succession, each of the representations and warranties set forth in
Section 2.09(a), subject to such appropriate modifications to the representation
and warranty set forth in Section 2.09(a)(i) to accurately reflect such
successor's jurisdiction of organization and whether it is a corporation,
partnership, bank, association or other type of organization.
SECTION 2.10. Issuance of the Class R-I Certificates; Creation of the
REMIC I Regular Interests.
Concurrently with the assignment to the Trustee of the assets included
in REMIC I, and in exchange therefor, at the direction of the Sponsor, the REMIC
I Regular Interests have been issued hereunder and the Trustee has executed,
authenticated and delivered to or upon the order of the Sponsor, the Class R-I
Certificates in authorized denominations. The interests evidenced by the Class
R-I Certificates, together with the REMIC I Regular Interests, constitute the
entire beneficial ownership of REMIC I. The rights of the Class R-I
Certificateholders and REMIC II to receive distributions from the proceeds of
REMIC I in respect of the Class R-I Certificates and the REMIC I Regular
Interests, respectively, and all ownership interests of the Class R-I
Certificateholders and REMIC II in and to such distributions, shall be as set
forth in this Agreement.
SECTION 2.11. Conveyance of REMIC I Regular Interests; Acceptance of
REMIC II by the Trustee.
The Sponsor, as of the Closing Date, and concurrently with the
execution and delivery hereof, does hereby assign without recourse all the
right, title and interest of the Sponsor in and to the REMIC I Regular Interests
to the Trustee for the benefit of the Holders of the REMIC II Certificates. The
Trustee acknowledges the assignment to it of the REMIC I
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Regular Interests and declares that it holds and will hold the same in trust for
the exclusive use and benefit of all present and future Holders of the REMIC II
Certificates.
SECTION 2.12. Issuance of the REMIC II Certificates.
Concurrently with the assignment to the Trustee of the REMIC I Regular
Interests, and in exchange therefor, at the direction of the Sponsor, the
Trustee has executed, authenticated and delivered to or upon the order of the
Sponsor, the REMIC II Certificates in authorized denominations evidencing the
entire beneficial ownership of REMIC II. The rights of the respective Classes of
Holders of the REMIC II Certificates to receive distributions from the proceeds
of REMIC II in respect of their REMIC II Certificates, and all ownership
interests of the respective Classes of Holders of the REMIC II Certificates in
and to such distributions, shall be as set forth in this Agreement.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
SECTION 3.01. Administration of the Mortgage Loans.
(a) Each of the Master Servicer and the Special Servicer shall service
and administer the Mortgage Loans that it is obligated to service and administer
pursuant to this Agreement on behalf of the Trustee, and in the best interests
and for the benefit of the Certificateholders, in accordance with any and all
applicable laws and the terms of this Agreement, the Insurance Policies and the
respective Mortgage Loans and, to the extent consistent with the foregoing, in
accordance with the Servicing Standard. Without limiting the foregoing, and
subject to Section 3.21, (i) the Master Servicer shall service and administer
all Mortgage Loans as to which no Servicing Transfer Event has occurred and all
Corrected Mortgage Loans, and (ii) the Special Servicer shall service and
administer (x) each Mortgage Loan (other than a Corrected Mortgage Loan) as to
which a Servicing Transfer Event has occurred, and (y) each REO Property;
provided, however, that the Master Servicer shall continue to collect
information and prepare all reports to the Trustee required hereunder with
respect to any Specially Serviced Mortgage Loans and REO Properties (and the
related REO Loans), and further to render such incidental services with respect
to any Specially Serviced Mortgage Loans and REO Properties as are specifically
provided for herein.
(b) Subject to Section 3.01(a), the Master Servicer and the Special
Servicer each shall have full power and authority, acting alone, to do or cause
to be done any and all things in connection with such servicing and
administration which it may deem necessary or desirable. Without limiting the
generality of the foregoing, each of the Master Servicer and the Special
Servicer, in its own name, with respect to each of the Mortgage Loans it is
obligated to service hereunder, is hereby authorized and empowered by the
Trustee to execute and deliver, on behalf of the Certificateholders and the
Trustee or any of them: (i) any and all financing statements, continuation
statements and other documents or instruments necessary to maintain the lien
created by any Mortgage or other security document in the related Mortgage File
on the related Mortgaged Property and related collateral; (ii) in accordance
with the Servicing Standard and subject to Sections 3.08 and 3.20, any and all
modifications, waivers, amendments or consents to or with respect to any
documents contained in the related Mortgage File; and (iii) any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments. Subject to Section 3.10, the
Trustee shall, at the written request of a Servicing Officer of the Master
Servicer or the Special Servicer, furnish, or cause to be so furnished, to the
Master Servicer and the Special Servicer, as the case may be, any limited powers
of attorney and other documents necessary or appropriate to enable them to carry
out their servicing and administrative duties hereunder; provided, however, that
the Trustee shall not be held liable for any misuse of any such power of
attorney by the Master Servicer or the Special Servicer.
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(c) The relationship of each of the Master Servicer and Special
Servicer to the Trustee under this Agreement is intended by the parties to be
that of an independent contractor and not that of a joint venturer, partner or
agent.
(d) In the event that any two or more Mortgage Loans are
cross-collateralized with each other, the Master Servicer or Special Servicer,
as applicable, in accordance with the terms of this Agreement, shall service and
administer such 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 that is cross-collateralized with it shall also
become a Specially Serviced Mortgage Loan. Similarly, no Cross-Collateralized
Mortgage Loan shall subsequently become a Corrected Mortgage Loan, unless and
until all Servicing Transfer Events in respect of each other Mortgage Loan that
is cross-collateralized with it, are remediated or otherwise addressed as
contemplated in the definition of "Specially Serviced Mortgage Loan".
SECTION 3.02. Collection of Mortgage Loan Payments.
Each of the Master Servicer and the Special Servicer shall make
reasonable efforts to collect all payments called for under the terms and
provisions of the Mortgage Loans it is obligated to service hereunder, and
shall, to the extent such procedures shall be consistent with this Agreement
(including without limitation, the Servicing Standard), follow such collection
procedures as it would follow were it the owner of such Mortgage Loans;
provided, however, that nothing herein contained shall be construed as an
express or implied guarantee by the Master Servicer or the Special Servicer of
the collectability of the Mortgage Loans. Consistent with the foregoing, the
Master Servicer or the Special Servicer each may waive any Penalty Charges in
connection with any specific delinquent payment on a Mortgage Loan it is
obligated to service hereunder.
Ninety (90) days prior to the maturity date of each Balloon Mortgage
Loan, the Master Servicer shall send a notice to the related Mortgagor of such
maturity date (with a copy to be sent to the Special Servicer) and shall request
confirmation that the Balloon Payment will be paid by such date.
SECTION 3.03. Collection of Taxes, Assessments and Similar Items;
Servicing Accounts; Reserve Accounts.
(a) Each of the Master Servicer and the Special Servicer shall, as to
those Mortgage Loans it is obligated to service hereunder, establish and
maintain one or more accounts (the "Servicing Accounts"), into which all Escrow
Payments shall be deposited and retained. Subject to any terms of the related
Mortgage Loan documents that specify the nature of the account in which Escrow
Payments shall be held, each Servicing Account shall be an Eligible Account.
Withdrawals of amounts so collected in respect of any Mortgage Loan (and
interest earned thereon) from a Servicing Account may be made only: (i) to
effect payment of real estate taxes, assessments, insurance premiums, ground
rents (if applicable) and comparable items
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in respect of the related Mortgaged Property; (ii) to reimburse the Master
Servicer, the Special Servicer, the Trustee or the Fiscal Agent, as applicable,
for any unreimbursed Servicing Advances made thereby to cover any of the items
described in the immediately preceding clause (i); (iii) to refund to the
related Mortgagor any sums as may be determined to be overages; (iv) to 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) to clear
and terminate the Servicing Account at the termination of this Agreement in
accordance with Section 9.01. The Master Servicer and Special Servicer shall
each pay or cause to be paid to the Mortgagors interest, if any, earned on the
investment of funds in Servicing Accounts maintained thereby, if required by law
or the terms of the related Mortgage Loan. If the Master Servicer or Special
Servicer shall deposit in a Servicing Account any amount not required to be
deposited therein, it may at any time withdraw such amount from such Servicing
Account, any provision herein to the contrary notwithstanding.
(b) Each of the Master Servicer and the Special Servicer shall, as to
those Mortgage Loans it is obligated to service hereunder, (i) maintain accurate
records with respect to the 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 shall
effect payment thereof prior to the applicable penalty or termination date. For
purposes of effecting any such payment for which it is responsible, the Master
Servicer or the Special Servicer, as the case may be, shall apply Escrow
Payments as allowed under the terms of the related Mortgage Loan or, if such
Mortgage Loan does not require the related Mortgagor to escrow for the payment
of real estate taxes, assessments, insurance premiums, ground rents (if
applicable) and similar items, each of the Master Servicer and the Special
Servicer shall, as to those Mortgage Loans it is obligated to service hereunder
and subject to the Servicing Standard, enforce the requirement of the related
Mortgage that the Mortgagor make payments in respect of such items at the time
they first become due.
(c) In accordance with the Servicing Standard, each of the Master
Servicer and the Special Servicer shall, as to those Mortgage Loans it is
obligated to service hereunder, advance with respect to the 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, (ii)
ground rents (if applicable), and (iii) premiums on Insurance Policies, in each
instance if and to the extent 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, and provided that the
particular advance would not, if made, constitute a Nonrecoverable Servicing
Advance. All such advances shall be reimbursable in the first instance from
related collections from the Mortgagors and further as provided in Section
3.05(a). No costs incurred by the Master Servicer or the Special Servicer in
effecting the payment of real estate taxes, assessments and similar items and,
if applicable, ground rents on or in respect of such Mortgaged Properties shall,
for purposes hereof, including, without limitation, calculating
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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) Each of the Master Servicer and the Special Servicer shall, as to
those Mortgage Loans it is obligated to service hereunder, 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 otherwise cover, or (if
appropriate) to reimburse the related Mortgagor in connection with, the specific
items for which such Reserve Funds were escrowed, all in accordance with the
Servicing Standard and the terms of the related Mortgage Note, Mortgage and any
agreement with the related Mortgagor governing such Reserve Funds. Subject to
the terms of the related Mortgage Note and Mortgage, all Reserve Accounts shall
be Eligible Accounts.
SECTION 3.04. Certificate Account and Distribution Account.
(a) The Master Servicer shall establish and maintain one or more
accounts (collectively, the "Certificate Account"), held on behalf of the
Trustee in trust for the benefit of the Certificateholders. The Certificate
Account shall be an Eligible Account. The Master Servicer shall deposit or cause
to be deposited in the Certificate Account, within two Business Days of receipt
(in the case of payments by Mortgagors or other collections on or in respect of
the Mortgage Loans) or as otherwise required hereunder, the following payments
and collections received or made by or on behalf of it subsequent to the Cut-off
Date (other than in respect of principal, interest and any other amounts due and
payable on the Mortgage Loans on or before the Cut-off Date, which payments
shall be delivered promptly to the Mortgage Loan Seller or its designee, with
negotiable instruments endorsed as necessary and appropriate without recourse):
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest at the respective Mortgage
Rates on the Mortgage Loans and all Prepayment Premiums;
(iii) to the extent allocable to the period that any Mortgage Loan is
a Specially Serviced Mortgage Loan, all payments on account of Penalty
Charges on such Mortgage;
(iv) all Insurance Proceeds and Liquidation Proceeds (net of all
related Liquidation Expenses paid therefrom) received in respect of any
Mortgage Loan (other than Liquidation Proceeds that are received in
connection with a purchase by the Master Servicer or a Majority
Certificateholder of the Controlling Class of all of the Mortgage Loans and
any REO Properties in the Trust Fund and that are required to be deposited
in the Distribution Account pursuant to Section 9.01);
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(v) any amounts required to be deposited by the Master Servicer
pursuant to Section 3.06 in connection with losses incurred with respect to
Permitted Investments of funds held in the Certificate Account;
(vi) any amounts required to be deposited by the Master Servicer or
the Special Servicer pursuant to Section 3.07(b) in connection with losses
resulting from a deductible clause in a blanket or master single interest
policy; and
(vii) any amounts required to be transferred from the REO Account
pursuant to Section 3.16(c).
The foregoing requirements for deposit in the Certificate Account
shall be exclusive. Without limiting the generality of the foregoing, (A) actual
payments from Mortgagors in the nature of Escrow Payments, and amounts that the
Master Servicer and the Special Servicer are entitled to retain as additional
servicing compensation pursuant to Section 3.11(b) and Section 3.11(d),
respectively, need not be deposited by the Master Servicer in the Certificate
Account and (B) with respect to any amount representing a sub-servicing fee
(including, without limitation, a Primary Servicing Fee, if applicable) that
otherwise would be required to be deposited by the Master Servicer in the
Certificate Account and that, once so deposited would have been permitted to be
withdrawn immediately from the Certificate Account pursuant to Section 3.05 as
part of the payment of the Master Servicing Fee, such amount shall be deemed to
have been deposited to and withdrawn from the Certificate Account for such
purpose to the extent that such sum has been retained by the Sub-Servicer
pursuant to the related Sub-Servicing Agreement. If the Master Servicer shall
deposit in the Certificate Account any amount not required to be deposited
therein, it may at any time withdraw such amount from the Certificate Account,
any provision herein to the contrary notwithstanding. The Master Servicer shall
promptly deliver to the Special Servicer as additional servicing compensation in
accordance with Section 3.11(d), assumption fees, modification fees, Net Penalty
Charges and other transaction fees received by the Master Servicer with respect
to Specially Serviced Mortgage Loans. The Certificate Account shall be
maintained as a segregated account, separate and apart from trust funds created
for mortgage pass-through certificates of other series serviced and the other
accounts of the Master Servicer.
Upon receipt of any of the amounts described in clauses (i) through
(iv) above with respect to any Mortgage Loan, the Special Servicer shall
promptly, but in no event later than two Business Days after receipt, remit such
amounts to the Master Servicer for deposit into the Certificate Account in
accordance with the second preceding paragraph, 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. Any such amounts received by the Special Servicer with
respect to an REO Property shall be deposited by the Special Servicer into the
REO Account and remitted to the Master Servicer for deposit into the Certificate
Account pursuant to Section 3.16(c). 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 two Business
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Days 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.
(b) The Trustee shall establish and maintain one or more trust
accounts (collectively, the "Distribution Account") to be held in trust for the
benefit of the Certificateholders. The Distribution Account shall be an Eligible
Account. On each Master Servicer Remittance Date, the Master Servicer shall
deliver to the Trustee, for deposit in the Distribution Account, an aggregate
amount of immediately available funds equal to the Master Servicer Remittance
Amount for such Master Servicer Remittance Date. If, at 1:00 p.m., New York City
time, on any Master Servicer Remittance Date, the Trustee has not received the
Master Servicer Remittance Amount, the Trustee shall provide notice to the
Master Servicer in the same manner as required by Section 4.03(a) hereof with
respect to P&I Advances.
In addition, the Master Servicer shall, as and when required
hereunder, deliver to the Trustee for deposit in the Distribution Account:
(i) any P&I Advances required to be made by the Master Servicer in
accordance with Section 4.03(a);
(ii) any amounts required to be deposited by the Master Servicer
pursuant to Section 3.19(e) in connection with Balloon Payment Interest
Shortfalls or pursuant to Section 3.19(f) in connection with Prepayment
Interest Shortfalls; and
(iii) any Liquidation Proceeds paid by the Master Servicer or a
Majority Certificateholder of the Controlling Class in connection with the
purchase of all of the Mortgage Loans and any REO Properties pursuant to
Section 9.01, exclusive of the portion of such Liquidation Proceeds
required to be deposited in the Certificate Account pursuant to Section
9.01.
The Trustee shall, upon receipt, deposit in the Distribution Account
any and all amounts received or advanced by the Trustee or the Fiscal Agent that
are required by the terms of this Agreement to be deposited therein.
(c) Funds in the Certificate Account may be invested in Permitted
Investments in accordance with the provisions of Section 3.06. The Master
Servicer shall give notice to the other parties hereto of the location of the
Certificate Account as of the Closing Date and of the new location of the
Certificate Account prior to any change thereof. The Trustee shall give notice
to the other parties hereto of the location of the Distribution Account as of
the Closing Date and of the new location of the Distribution Account prior to
any change thereof.
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SECTION 3.05. Permitted Withdrawals From the Certificate Account and
the Distribution Account.
(a) The Master Servicer may, from time to time, make withdrawals from
the Certificate Account for any of the following purposes (the order set forth
below not constituting an order of priority for such withdrawals):
(i) to remit to the Trustee for deposit in the Distribution Account
the Master Servicer Remittance Amount for and, to the extent permitted or
required by Section 4.03(a), any P&I Advances to be made on each Master
Servicer Remittance Date;
(ii) to reimburse the Fiscal Agent, the Trustee or the Master
Servicer, as applicable, in that order, for unreimbursed P&I Advances made
thereby in respect of any Mortgage Loan or REO Loan, the Fiscal Agent's,
the Trustee's and the Master Servicer's respective rights to reimbursement
pursuant to this clause (ii) with respect to any P&I Advance being limited
to amounts that represent Late Collections of interest and principal (net
of related Master Servicing Fees, Workout Fees and/or Liquidation Fees
payable therefrom) received in respect of the particular Mortgage Loan or
REO Loan as to which such P&I Advance was made;
(iii) to pay to the Master Servicer earned and unpaid Master Servicing
Fees in respect of each Mortgage Loan and REO Loan, the Master Servicer's
right to payment pursuant to this clause (iii) with respect to any Mortgage
Loan or REO Loan being limited to amounts received on or in respect of such
Mortgage Loan (whether in the form of payments, Liquidation Proceeds or
Insurance Proceeds) or such REO Loan (whether in the form of REO Revenues,
Liquidation Proceeds or Insurance Proceeds) that are allocable as a
recovery of interest thereon;
(iv) to pay to the Special Servicer, out of general collections on the
Mortgage Loans and any REO Properties, earned and unpaid Special Servicing
Fees in respect of each Specially Serviced Mortgage Loan and REO Loan;
(v) 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, the third and fourth paragraphs of Section 3.11(c);
(vi) to reimburse the Fiscal Agent, the Trustee, the Special Servicer
or the Master Servicer, as applicable, in that order, for any unreimbursed
Servicing Advances made thereby with respect to any Mortgage Loan or REO
Property, the Fiscal Agent's, the Trustee's, the Special Servicer's and the
Master Servicer's respective rights to reimbursement pursuant to this
clause (vi) with respect to any
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Servicing Advance being limited to (A) payments made by the related
Mortgagor that are allocable to cover the item in respect of which such
Servicing Advance was made, and (B) Liquidation Proceeds (net of
Liquidation Fees payable therefrom), Insurance Proceeds and, if applicable,
REO Revenues received in respect of the particular Mortgage Loan or REO
Property as to which such Servicing Advance was made;
(vii) to reimburse the Fiscal Agent, the Trustee, the Special Servicer
or the Master Servicer, as applicable, in that order, out of general
collections on the Mortgage Loans and any REO Properties, for any
unreimbursed Advances made thereby with respect to any Mortgage Loan, REO
Loan or REO Property that have been determined to be Nonrecoverable
Advances;
(viii) to pay the Fiscal Agent, the Trustee, the Special Servicer or
the Master Servicer, as applicable, in that order, any Advance Interest due
and owing thereto, the Fiscal Agent's, the Trustee's, the Special
Servicer's and the Master Servicer's respective rights to payment pursuant
to this clause (viii) being limited to Penalty Charges collected in respect
of the Mortgage Loan or REO Loan as to which the related Advances were made
(but only to the extent allocable to the period when such Mortgage Loan was
a Specially Serviced Mortgage Loan or an REO Loan);
(ix) at or following such time as the Master Servicer reimburses
itself, the Special Servicer, the Trustee or the Fiscal Agent, as
applicable, for any unreimbursed Advance pursuant to clause (ii), (vi) or
(vii) above or Section 3.03, and insofar as payment has not already been
made pursuant to clause (viii) above, to pay the Fiscal Agent, the Trustee,
the Special Servicer or the Master Servicer, as the case may be, and in
that order, out of general collections on the Mortgage Loans and any REO
Properties, any related Advance Interest accrued and payable thereon;
(x) to pay the Master Servicer, as additional servicing compensation
in accordance with Sections 3.06(b) and 3.11(b), any Net Investment
Earnings in respect of amounts held in the Certificate Account for any
Collection Period;
(xi) to pay the Master Servicer, as additional servicing compensation
in accordance with Section 3.11(b), any Prepayment Interest Excesses,
Balloon Payment Interest Excesses and, to the extent not allocable to
Specially Serviced Mortgage Loans or REO Loans, Penalty Charges collected
on the Mortgage Loans, and to pay the Special Servicer, as additional
servicing compensation, any Net Penalty Charges collected on and allocable
to the Specially Serviced Mortgage Loans and REO Loans;
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(xii) to reimburse, out of general collections on the Mortgage Loans
and any REO Properties, the Master Servicer, the Special Servicer, the
REMIC Administrator, the Sponsor, or any of their respective directors,
officers, employees and agents any amounts reimbursable to any such Person
pursuant to Section 6.03, or to pay directly to any third party any amount
which if paid by any such Person would be reimbursable thereto pursuant to
Section 6.03;
(xiii) to pay, out of general collections on the Mortgage Loans and
any REO Properties, for (A) the reasonable costs of the advice of counsel
contemplated by Section 3.17(a), (B) the reasonable costs of the Opinions
of Counsel contemplated by Sections 3.09(b)(ii) and 3.16(a), (C) the
reasonable costs of Appraisals obtained pursuant to Section 3.11(g) or
4.03(c), (D) the reasonable costs of obtaining any REO Extension sought by
the Special Servicer as contemplated by Section 3.16(a), and (E) the cost
of recording this Agreement in accordance with Section 11.02(a);
(xiv) to pay itself, the Special Servicer, the Majority
Certificateholder of the Controlling Class, the Mortgage Loan Seller, the
Additional Warranting Party or any other Person, as the case may be, with
respect to each Mortgage Loan, if any, previously purchased by such Person
pursuant to this Agreement, all amounts received thereon subsequent to the
date of purchase;
(xv) to pay the Trustee, the Fiscal Agent or any of their respective
directors, officers, employees and agents, as the case may be, any amounts
payable or reimbursable to any such Person pursuant to Section 8.05(b);
(xvi) to pay any costs and expenses contemplated in the last sentence
of Section 7.02 and the last sentence of Section 8.08(a); and
(xvii) to clear and terminate the Certificate Account at the
termination of this Agreement pursuant to Section 9.01.
If amounts on deposit in the Certificate Account at any particular
time (after withdrawing any portion of such amounts deposited in the Certificate
Account in error) are insufficient to satisfy all payments, reimbursements and
remittances to be made therefrom as set forth in clauses (ii) through (xvi)
above, then the corresponding withdrawals from the Certificate Account shall be
made in the following priority and subject to the following rules: (A) if the
payment, reimbursement or remittance is to be made from a specific source of
funds, then such payment, reimbursement or remittance shall be made from that
specific source of funds on a pro rata basis with any and all other payments,
reimbursements and remittances to be made from such specific source of funds;
provided that where, as in clauses (ii), (vi) and (vii), an order of priority is
set forth to govern the application of funds withdrawn from the Certificate
Account pursuant to such clauses, payments, reimbursements or remittances
pursuant to any such clause shall be made in such order of priority to the
extent of available funds; and (B) if the payment,
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reimbursement or remittance can be made from any funds on deposit in the
Certificate Account, then (following any withdrawals made from the Certificate
Account in accordance with the immediately preceding clause (A) above) such
payment, reimbursement or remittance shall be made from such general funds
remaining on a pro rata basis with any and all other payments, reimbursements or
remittances to be made from such general funds; provided that where, as in
clauses (viii) and (ix), an order of priority is set forth to govern the
application of funds withdrawn from the Certificate Account pursuant to such
clauses, payments, reimbursements or remittances pursuant to any such clause
shall be made in such order of priority to the extent of available funds.
The Master Servicer shall keep and maintain separate accounting
records, on a loan-by-loan and property-by-property basis when appropriate, in
connection with any withdrawal from the Certificate Account pursuant to clauses
(ii) through (xiv) above.
The Master Servicer shall pay to the Special Servicer (or to third
party contractors at the direction of the Special Servicer) from the Certificate
Account amounts permitted to be paid to it (or to such third party contractors)
therefrom promptly upon receipt of a certificate of a Servicing Officer of the
Special Servicer describing the item and amount to which the Special Servicer
(or such third party contractors) 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 Special Servicer shall keep and maintain separate
accounting for each Specially Serviced Mortgage Loan and REO Property, on a
loan-by-loan and property-by-property basis, for the purpose of justifying any
request for withdrawal from the Certificate Account.
(b) The Trustee may, from time to time, make withdrawals from the
Distribution Account for any of the following purposes:
(i) to make distributions to Certificateholders on each Distribution
Date pursuant to Section 4.01;
(ii) to pay the Trustee accrued and unpaid Trustee Fees pursuant to
Section 8.05(a);
(iii) to pay the Trustee, the Fiscal Agent or any of their respective
directors, officers, employees and agents, as the case may be, any amounts
payable or reimbursable to any such Person pursuant to Section 8.05(b);
(iv) as contemplated by Section 11.01(g), to pay for the reasonable
costs of the Opinions of Counsel sought by the Trustee as contemplated by
Section 11.01(a) or 11.01(c) in connection with any amendment to this
Agreement requested by the Trustee which amendment is in furtherance of the
rights and interests of Certificateholders;
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(v) to pay for the reasonable costs of the Opinions of Counsel sought
by the Trustee as contemplated by Section 11.02(a);
(vi) to (A) pay any and all federal, state and local taxes imposed on
REMIC I or REMIC II or on the assets or transactions of either such REMIC,
together with all incidental costs and expenses, and any and all reasonable
expenses relating to tax audits, if and to the extent that either (1) none
of the Trustee, the Master Servicer, the Special Servicer, the Fiscal Agent
or the REMIC Administrator is liable therefor pursuant to Section 10.01(d)
and/or Section 10.01(h) or (2) any such Person that may be so liable has
failed to timely make the required payment, and (B) reimburse the REMIC
Administrator for reasonable expenses incurred by and reimbursable to it by
the Trust Fund pursuant to Section 10.01(d) and/or Section 10.01(g); and
(vii) to clear and terminate the Distribution Account at the
termination of this Agreement pursuant to Section 9.01.
SECTION 3.06. Investment of Funds in the Certificate Account and the
REO Account.
(a) The Master Servicer may direct any depository institution
maintaining the Certificate Account, and the Special Servicer may direct any
depository institution maintaining the REO Account, to invest, or if it is such
depository institution, may itself invest, the funds held therein (each such
account, for purposes of this Section 3.06, an "Investment Account") in one or
more Permitted Investments bearing interest or sold at a discount, and maturing,
unless payable on demand, no later than the Business Day immediately preceding
the next succeeding date on which such funds are required to be withdrawn from
such account pursuant to this Agreement. All such Permitted Investments shall be
held to maturity, unless payable on demand, in which case such investments may
be sold at any time. Any investment of funds in an Investment Account shall be
made in the name of the Trustee for the benefit of the Certificateholders (in
its capacity as such). The Master Servicer (with respect to Permitted
Investments of amounts in the Certificate Account) and the Special Servicer
(with respect to Permitted Investments of amounts in the REO Account), on behalf
of the Trustee for the benefit of the Certificateholders, shall (and the Trustee
hereby designates the Master Servicer and the Special Servicer, as applicable,
as the Person that shall) maintain continuous possession of any Permitted
Investment that is either (i) a "certificated security", as such term is defined
in the UCC, or (ii) other property in which a secured party may perfect its
security interest by possession under the UCC or any other applicable law.
Possession of any such Permitted Investment by the Master Servicer or the
Special Servicer shall constitute possession by a person designated by the
Trustee for purposes of Section 8-313 of the UCC and possession by the Trustee,
as secured party, for purposes of Section 9-305 of the UCC and any other
applicable law. If amounts on deposit in an Investment Account are at any time
invested in a Permitted Investment payable on demand, the Master Servicer (in
the case of the Certificate Account) or the Special Servicer (in the case of the
REO Account) shall:
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(x) consistent with any notice required to be given thereunder, demand
that payment thereon be made on the last day such Permitted Investment may
otherwise mature hereunder in an amount equal to the lesser of (1) all
amounts then payable thereunder and (2) the amount required to be withdrawn
on such date; and
(y) demand payment of all amounts due thereunder promptly upon
determination by the Master Servicer or the Special Servicer, as the case
may be, that such Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in the Investment
Account.
(b) Whether or not the Master Servicer directs the investment of funds
in the Certificate Account, interest and investment income realized on funds
deposited therein, to the extent of the Net Investment Earnings, if any, for
such Investment Account for each Collection Period, shall be for the sole and
exclusive benefit of the Master Servicer and shall be subject to its withdrawal
in accordance with Section 3.05(a). Whether or not the Special Servicer directs
the investment of funds in the REO Account, interest and investment income
realized on funds deposited therein, to the extent of the Net Investment
Earnings, if any, for such Investment Account for each Collection Period, shall
be for the sole and exclusive benefit of the Special Servicer and shall be
subject to its withdrawal in accordance with Section 3.16(b). If any loss shall
be incurred in respect of any Permitted Investment on deposit in any Investment
Account, the Master Servicer (in the case of the Certificate Account) and the
Special Servicer (in the case of the REO Account) shall promptly deposit therein
from its own funds, without right of reimbursement, no later than the end of the
Collection Period during which such loss was incurred, the amount of the Net
Investment Loss, if any, for such Collection Period. The Trustee shall have no
liability whatsoever with respect to any such losses, except to the extent that
it is the obligor on any such Permitted Investment.
(c) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment, or
if a default occurs in any other performance required under any Permitted
Investment and the Master Servicer or the Special Servicer, as applicable, has
not taken such action, the Trustee may and, subject to Section 8.02, upon the
request of Holders of Certificates entitled to not less than 25% of the Voting
Rights allocated to any Class, shall take such action as may be appropriate to
enforce such payment or performance, including, without limitation, the
institution and prosecution of appropriate proceedings.
(d) Notwithstanding the investment of funds held in any Investment
Account, for purposes of the calculations hereunder, including, without
limitation, the calculation of the Available Distribution Amount and the Master
Servicer Remittance Amount, the amounts so invested (but not any interest earned
thereon) shall be deemed to remain on deposit in such Investment Account.
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SECTION 3.07. Maintenance of Insurance Policies; Errors and Omissions
and Fidelity Coverage.
(a) Each of the Master Servicer and the Special Servicer shall, as to
those Mortgage Loans it is obligated to service hereunder, cause to be
maintained for each such Mortgage Loan all insurance coverage as is required
under the related Mortgage (subject to applicable law); 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 Special Servicer or
the Master Servicer, as appropriate, shall impose such insurance requirements as
are consistent with the Servicing Standard. The Special Servicer shall also
cause to be maintained for each REO Property, in each case with an insurer that
possesses the Required Claims-Paying Ratings at the time such policy is
purchased, no less insurance coverage than was previously required of the
Mortgagor under the related Mortgage and, if the related Mortgage did not so
require, hazard insurance, public liability insurance and business interruption
or rent loss insurance in such amounts as are consistent with the Servicing
Standard, and the Special Servicer shall be reimbursed for the premium costs
thereof as a Servicing Advance pursuant to and to the extent permitted under
Section 3.05(a). All such insurance policies shall contain a "standard"
mortgagee clause, with loss payable to the Master Servicer (in the case of
insurance maintained in respect of the Mortgaged Properties) or the Special
Servicer (in the case of insurance maintained in respect of REO Properties) on
behalf of the Trustee, shall be issued by an insurer authorized under applicable
law to issue such insurance, and, unless prohibited by the related Mortgage, may
contain a deductible clause (not in excess of a customary amount). Any amounts
collected by the Master Servicer or 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 the Servicing Standard) shall be
deposited in the Certificate Account, subject to withdrawal pursuant to Section
3.05(a), in the case of amounts received in respect of a Mortgage Loan, or in
the REO Account, subject to withdrawal pursuant to Section 3.16(c), in the case
of amounts received in respect of an REO Property. Any cost incurred by the
Master Servicer or the Special Servicer, as applicable, in maintaining any such
insurance shall not, for purposes hereof, including, without limitation,
calculating monthly distributions to Certificateholders, be added to the unpaid
principal balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit.
(b) (i) If the Master Servicer or the Special Servicer shall obtain
and maintain a blanket policy insuring against hazard losses on any or all of
the Mortgaged Properties and/or REO Properties it is required to service and
administer hereunder, then, to the extent such policy (i) is obtained from a
Qualified Insurer that possesses the Required Claims-Paying Ratings, and (ii)
provides protection equivalent to the individual policies otherwise required,
the Master Servicer or the Special Servicer, as the case may be, shall
conclusively be deemed to have satisfied its obligation to cause hazard
insurance to be maintained on the related Mortgaged Properties, and the premium
costs thereof shall be, if and to the extent they are specifically attributable
to a specific Mortgaged Property during any period that the related Mortgagor
has failed to maintain the hazard insurance required under the related Mortgage
Loan in respect of
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such Mortgaged Property, a Servicing Advance reimbursable pursuant to and to the
extent permitted under Section 3.05(a); provided that, to the extent that such
premium costs are attributable to properties other than Mortgaged Properties
and/or REO Properties or are attributable to Mortgaged Properties as to which
the hazard insurance required under the related Mortgage Loan is being
maintained, they shall be borne by the Master Servicer or Special Servicer, as
the case may be, without right of reimbursement. Such a blanket policy may
contain a deductible clause (not in excess of a customary amount), in which case
the Master Servicer or the Special Servicer, as appropriate, shall, if there
shall not have been maintained on the related Mortgaged Property or REO Property
a hazard insurance policy complying with the requirements of Section 3.07(a),
and there shall have been one or more losses which would have been covered by
such property specific policy (taking into account any deductible clause that
would have been permitted therein), promptly deposit into the Certificate
Account from its own funds the amount of such losses up to the difference
between the amount of the deductible clause in such blanket policy and the
amount of any deductible clause that would have been permitted under such
property specific policy. The Master Servicer and the Special Servicer each
agree to prepare and present, on behalf of itself, the Trustee and the
Certificateholders, claims under any such blanket policy maintained by it in a
timely fashion in accordance with the terms of such policy.
(ii) If the Master Servicer or the Special Servicer cause any
Mortgaged Property or REO Property that it is required to service and administer
to be covered by a master single interest insurance policy naming the Master
Servicer or the Special Servicer, as applicable, on behalf of the Trustee as the
loss payee, then to the extent such policy (i) is obtained from a Qualified
Insurer that possesses the Required Claims-Paying Ratings and (ii) provides
protection equivalent to the individual policies otherwise required, the Master
Servicer or the Special Servicer, as applicable, shall conclusively be deemed to
have satisfied its obligation to cause such insurance to be maintained on the
related Mortgage Properties and REO Properties. If the Master Servicer or the
Special Servicer shall cause any Mortgaged Property as to which the related
Mortgagor has failed to maintain the required insurance coverage or any REO
Property to be covered by such master single interest insurance policy, then the
incremental costs of such insurance applicable to such Mortgaged Property or REO
Property (i.e., other than any minimum or standby premium payable for such
policy whether or not any Mortgaged Property or REO Property is covered thereby)
paid by the Master Servicer or the Special Servicer, as applicable, shall
constitute a Servicing Advance. The Master Servicer shall, consistent with the
Servicing Standard and the terms of the related Mortgage Loan documents, pursue
the related Mortgagor for the amount of such incremental costs. All other costs
associated with any such master single interest insurance policy (including,
without limitation, any minimum or standby premium payable for such policy)
shall be borne by the Master Servicer or Special Servicer, as the case may be,
without right of reimbursement. Such master single interest insurance policy may
contain a deductible clause (not in excess of a customary amount), in which case
the Master Servicer or the Special Servicer, as applicable shall, in the event
that 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 there shall have been one or more losses which would have been
covered by such policy had it been maintained, deposit into the Certificate
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Account from its own funds (without right of reimbursement) the amount not
otherwise payable under the master single interest policy because of such
deductible clause, to the extent that any such deductible exceeds the deductible
limitation that pertained to the related Mortgage Loan, or, in the absence of
any such deductible limitation, the deductible limitation which is consistent
with the Servicing Standard.
(c) Each of the Master Servicer and the Special Servicer shall at all
times during the term of this Agreement keep in force with recognized insurers
that possess the Required Claims-Paying Ratings a fidelity bond in such form and
amount as would permit it to be a qualified FNMA or FHLMC seller-servicer of
multifamily mortgage loans. Each of the Master Servicer and the Special Servicer
shall be deemed to have complied with the foregoing provision if an Affiliate
thereof has such fidelity bond coverage and, by the terms of such fidelity bond,
the coverage afforded thereunder extends to the Master Servicer or the Special
Servicer, as the case may be. Such fidelity bond shall provide that it may not
be canceled without 30 days' prior written notice to the Trustee.
In addition, each of the Master Servicer and the Special Servicer
shall at all times during the term of this Agreement keep in force with
recognized insurers that possess the Required Claims-Paying Ratings a policy or
policies of insurance covering loss occasioned by the errors and omissions of
its officers, employees and agents in connection with its obligation to service
the Mortgage Loans for which it is responsible hereunder, which policy or
policies shall be in such form and amount as would permit it to be a qualified
FNMA or FHLMC seller-servicer of multifamily mortgage loans. Any such errors and
omissions policy, if required, shall provide that it may not be canceled without
30 days' prior written notice to the Trustee.
It is understood and agreed that the Rating Agencies have affirmed in
writing that the use of certain specified insurance carriers by the Master
Servicer, the Special Servicer and/or Sub-Servicers will not, in and of itself,
cause a downgrade, qualification or change in the rating assigned to any Class
of Certificates, notwithstanding that such insurance carriers do not possess the
Required Claims-Paying Ratings as of the Closing Date. It is further understood
and agreed that if the claims-paying ratings of any such insurance carrier are
downgraded below the level assigned as of the Closing Date, such insurance
carrier promptly shall be replaced by a Qualified Insurer that possesses the
Required Claims-Paying Ratings.
(d) All insurance coverage required to be maintained under this
Section 3.07 shall be obtained from Qualified Insurers.
SECTION 3.08. Enforcement of Due-On-Sale Clauses; Assumption
Agreements; Subordinate Financing.
(a) As to each Mortgage Loan which contains a provision in the nature
of a "due-on-sale" clause, which by its terms:
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(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, each of
the Master Servicer and the Special Servicer shall, on behalf of the Trustee as
the mortgagee of record, as to those Mortgage Loans it is obligated to service
hereunder, exercise (or 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, but subject to Section 3.20(a)(iii). In the event
that the Master Servicer or 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 Master
Servicer or the Special Servicer, as the case may be, if consistent with the
Servicing Standard, may enter into a substitution of liability agreement,
pursuant to which the original Mortgagor and any original guarantors are
released from liability, and the transferee and any new guarantors are
substituted therefor and become liable under the Mortgage Note and any related
guaranties and, in connection therewith, may require from the related Mortgagor
a reasonable and customary fee for the additional services performed by it,
together with reimbursement for any related costs and expenses incurred by it
(but only to the extent that charging such fee will not be a "significant
modification" of the Mortgage Loan, or result in the receipt by REMIC I or REMIC
II of net income from a "prohibited transaction", under the REMIC Provisions).
The Master Servicer or the Special Servicer, as the case may be, shall promptly
notify the Trustee in writing of any such agreement and forward the original
thereof to the Trustee for inclusion in the related Mortgage File.
(b) As to each Mortgage Loan which contains a provision in the nature
of a "due-on-encumbrance" clause, which by its terms:
(i) provides that such Mortgage Loan shall (or may at the mortgagee's
option) become due and payable upon the creation of any additional lien or
other encumbrance on the related Mortgaged Property; or
(ii) requires the consent of the mortgagee to the creation of any such
additional lien or other encumbrance on the related Mortgaged Property;
then, for so long as such Mortgage Loan is included in the Trust Fund, each of
the Master Servicer and the Special Servicer shall on behalf of the Trustee as
the mortgagee of record, as to those Mortgage Loans it is obligated to service
hereunder, exercise (or 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, but subject to
Section
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3.20(a)(iii); provided that neither the Master Servicer nor the Special Servicer
shall waive any right it has, or grant any consent it is otherwise entitled to
withhold, under any related "due-on-encumbrance" clause until it has received
written confirmation from each Rating Agency that such action would not result
in the downgrade, qualification or withdrawal of the rating then assigned by any
Rating Agency to any Class of Certificates.
(c) Nothing in this Section 3.08 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.
SECTION 3.09. Realization Upon Defaulted Mortgage Loans.
(a) The Special Servicer shall, subject to subsections (b) through (d)
of this Section 3.09, exercise reasonable efforts, consistent with the Servicing
Standard, to foreclose upon or otherwise comparably convert (which may include
an REO Acquisition) the ownership of properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments, and which are
not released from the Trust Fund pursuant to any other provision hereof, if the
Special Servicer determines, consistent with the Servicing Standard, that such
action would be in the best economic interest of the Trust Fund. The Special
Servicer shall advance all 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 3.05(a), and further subject to its
being entitled to pay out of the related Liquidation Proceeds any Liquidation
Expenses incurred in respect of any Mortgage Loan, which Liquidation Expenses
were outstanding at the time such proceeds are received. When applicable state
law permits the Special Servicer to select between judicial and non-judicial
foreclosure in respect of any Mortgaged Property, the Special Servicer shall
make such selection in a manner consistent with the Servicing Standard. Nothing
contained in this Section 3.09 shall be construed so as to require the Special
Servicer, on behalf of the Trust Fund, to make an offer 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
reasonable and good faith judgment taking into account the factors described in
Section 3.18(e) and the results of any Appraisal obtained pursuant to the
following sentence or otherwise, all such offers to be made in a manner
consistent with the Servicing Standard. If and when the Special Servicer or the
Master 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 making an offer at foreclosure or otherwise, the Special
Servicer or the Master Servicer, as the case may be, is authorized to have an
Appraisal completed with respect to such property (the cost of which Appraisal
shall constitute a Servicing Advance).
(b) The Special Servicer shall not acquire any personal property
pursuant to this Section 3.09 (with the exception of cash or cash equivalents
pledged as collateral for a Mortgage Loan) unless either:
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(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 reasonable cost of which may be withdrawn from the Certificate Account
pursuant to Section 3.05(a)) to the effect that the holding of such
personal property by the Trust Fund will not cause either of REMIC I or
REMIC II to fail to qualify as a REMIC at any time that any Certificate is
outstanding or, subject to Section 3.17, cause the imposition of a tax on
the Trust Fund under the REMIC Provisions.
(c) Notwithstanding the foregoing provisions of this Section 3.09,
neither the Special Servicer nor the Master Servicer shall, on behalf of the
Trustee, initiate foreclosure proceedings, obtain title to a Mortgaged Property
in lieu of foreclosure or otherwise, have a receiver of rents appointed with
respect to any Mortgaged Property, or take any other action with respect to any
Mortgaged Property, if, as a result of any such action, the Trustee, on behalf
of the Certificateholders, would be 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 determined in accordance with the
Servicing Standard, based on a Phase I Environmental Assessment (and any
additional environmental testing that the Special Servicer deems necessary and
prudent) of such Mortgaged Property performed by an Independent Person who
regularly conducts Phase I Environmental Assessments and such additional
environmental testing, that:
(i) the Mortgaged Property is in compliance with applicable
environmental laws and regulations or, if not, that taking such actions as
are necessary to bring the Mortgaged Property in compliance therewith and
proceeding against the Mortgaged Property is reasonably likely to produce a
greater recovery to Certificateholders on a present value basis (the
relevant discounting of anticipated collections that will be distributable
to Certificateholders to be performed at the related Net Mortgage Rate),
taking into consideration any associated liabilities, than not taking such
actions and not proceeding against such Mortgaged Property; 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 investigation, testing, monitoring, containment, clean-up or
remediation could be required under any applicable environmental laws
and/or regulations or, if such circumstances or conditions are present for
which any such action could be required, that taking such actions with
respect to such Mortgaged Property and proceeding against the Mortgaged
Property is reasonably likely to produce a greater recovery to
Certificateholders on a present value basis (the relevant discounting of
anticipated collections that will be distributable to Certificateholders to
be performed at the related Net Mortgage Rate), taking into consideration
any associated liabilities, than not taking such actions and not proceeding
against such Mortgaged Property.
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The cost of such Phase I Environmental Assessment and any such
additional environmental testing, 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, shall be advanced by the Master Servicer at the
direction of the Special Servicer given in accordance with the Servicing
Standard; provided, however, that the Master Servicer shall not be obligated in
connection therewith to advance any funds which, if so advanced, would
constitute a Nonrecoverable Servicing Advance. Amounts so advanced shall be
subject to reimbursement as Servicing Advances in accordance with Section
3.05(a).
(d) If the environmental testing contemplated by Section 3.09(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, the Special Servicer shall take
such action as is in accordance with the Servicing Standard (other than
proceeding against the Mortgaged Property, but including the sale of the
affected Mortgage Loan) and, at such time as it deems appropriate, may, on
behalf of the Trustee, release all or a portion of such Mortgaged Property from
the lien of the related Mortgage; provided that prior to the release of all or a
portion of the related Mortgaged Property from the lien of the related Mortgage,
(i) the Special Servicer shall have notified the Trustee in writing of its
intention to so release all or a portion of such Mortgaged Property, (ii) the
Trustee shall have notified the Certificateholders in writing of the Special
Servicer's intention to so release all or a portion of such Mortgaged Property
and (iii) the Holders of Certificates entitled to a majority of the Voting
Rights shall not have objected to such release within 30 days of the Trustee's
distributing such notice.
(e) The Special Servicer shall provide written reports to the Trustee
and the Master Servicer monthly 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 or that any remedial,
corrective or other further action contemplated by either such clause is
required, in each case until the earliest to occur of (i) satisfaction of both
such conditions and completion of all such remedial, corrective or other further
action, (ii) repurchase of the related Mortgage Loan by the Mortgage Loan Seller
and (iii) release of the lien of the related Mortgage on such Mortgaged
Property. The Master Servicer shall forward copies of all such reports to the
Certificateholders and the Rating Agencies promptly following the receipt
thereof.
(f) The Special Servicer shall file the information returns with
respect to the receipt of any mortgage interest received in a trade or business,
the reports of foreclosures and abandonments and reports relating to any
cancellation of indebtedness income with respect to any Mortgaged Property
required by Sections 6050H, 6050J and 6050P of the Code and deliver to the
Trustee an Officer's Certificate stating that such reports have been filed. Such
reports shall be in form and substance sufficient to meet the reporting
requirements imposed by such Sections 6050H, 6050J and 6050P of the Code.
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(g) The Special Servicer shall have the right to determine, in
accordance with the Servicing Standard, the advisability of the maintenance of
an action to obtain a deficiency judgment if the state in which the Mortgaged
Property is located and the terms of the Mortgage Loan permit such an action.
The Special Servicer shall advance the costs incurred in any such deficiency
action, subject to its being entitled to reimbursement therefor as a Servicing
Advance as provided in Section 3.05(a).
(h) The Special Servicer shall maintain accurate records, certified by
a Servicing Officer, of each Final Recovery Determination in respect of 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 and the Master Servicer no later than the tenth Business Day following
such Final Recovery Determination.
SECTION 3.10. 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 Special Servicer of a notification that payment in full
shall be escrowed in a manner customary for such purposes, the Master Servicer
or Special Servicer, as the case may be, shall immediately notify the Trustee
and request delivery of the related Mortgage File by delivering thereto a
Request for Release in the form of Exhibit D attached hereto signed by a
Servicing Officer of the Master Servicer or Special Servicer, as applicable. Any
such Request for Release shall include a statement to the effect that all
amounts received or to be received in connection with such payment which are
required to be deposited in the Certificate Account pursuant to Section 3.04(a)
have been or will be so deposited. Upon receipt of such notice and request
conforming in all material respects to the provisions hereof, the Trustee shall
promptly release, or cause any related Custodian to release, the related
Mortgage File to the Master Servicer or Special Servicer, as applicable. No
expenses incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Certificate Account.
(b) If from time to time, and as appropriate for servicing or
foreclosure of any Mortgage Loan, the Master Servicer or the Special Servicer
shall otherwise require any Mortgage File (or any portion thereof), then, upon
request of the Master Servicer or the Special Servicer and receipt therefrom of
a Request for Release in the form of Exhibit D attached hereto signed by a
Servicing Officer thereof, the Trustee shall release, or cause any related
Custodian to release, such Mortgage File (or portion thereof) to the Master
Servicer or the Special Servicer, as the case may be. Upon return of such
Mortgage File (or portion thereof) to the Trustee or the related Custodian, or
the delivery to the Trustee of a certificate of a Servicing Officer of the
Special Servicer stating that such Mortgage Loan was liquidated and that all
amounts received or to be received in connection with such liquidation which are
required to be deposited into the Certificate Account pursuant to Section
3.04(a) have been or will be so deposited, or that such Mortgage Loan has become
an REO Property, the Request for Release shall be released by the Trustee to the
Master Servicer or the Special Servicer, as applicable.
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(c) The Trustee, if requested, shall promptly execute and deliver to
the Special Servicer any court pleadings, requests for trustee's sale or other
documents furnished by the Special Servicer and certified by it as being
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 or for any other purpose necessary or
advisable in the reasonable, good faith judgment of the Special Servicer;
provided, however, that the Special Servicer shall be responsible for the
preparation of all such documents and pleadings; and 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 Mortgage, except
for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
SECTION 3.11. Servicing Compensation; Interest on Servicing Advances;
Payment of Certain Expenses; Obligations of the Trustee and the Fiscal Agent
Regarding Back-up Servicing Advances.
(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 REO Loan. As to each such Mortgage Loan and REO Loan, the Master
Servicing Fee shall accrue at the applicable Master Servicing Fee Rate on the
basis of the same principal amount and for the same period respecting which the
related interest payment due on such Mortgage Loan or deemed to be due on such
REO Loan is computed. The Master Servicing Fee with respect to any Mortgage Loan
or REO Loan shall cease to accrue if a Liquidation Event occurs in respect
thereof. Earned but unpaid Master Servicing Fees shall be payable monthly, on a
loan-by-loan basis, from payments of interest on each Mortgage Loan and REO
Revenues allocable as interest on each REO Loan. The Master Servicer shall be
entitled to recover unpaid Master Servicing Fees in respect of any Mortgage Loan
or REO Loan out of Insurance Proceeds or Liquidation Proceeds, to the extent
permitted by Section 3.05(a). The 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 or except as provided in Section 3.22(d). The Master Servicer shall,
monthly, pay the Special Servicer its Standby Fee and any Sub-Servicer retained
by the Master Servicer such Sub-Servicer's sub-servicing fee (including, without
limitation, any Primary Servicing Fee, if applicable), out of the Master
Servicer's Master Servicing Fee.
(b) Additional servicing compensation in the form of Penalty Charges,
assumption fees, modification fees, charges for beneficiary statements or
demands, amounts collected for checks returned for insufficient funds and any
similar fees (excluding Prepayment Premiums), in each case to the extent
actually paid by a Mortgagor with respect to a Mortgage
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Loan that is not a Specially Serviced Mortgage Loan, may be retained by the
Master Servicer (or by the related Sub-Servicer if so provided by the applicable
Sub-Servicing Agreement) and are not required to be deposited in the Certificate
Account. The Master Servicer shall also be entitled to additional servicing
compensation in the form of (i) any Prepayment Interest Excesses and Balloon
Payment Interest Excesses collected on the Mortgage Loans; (ii) interest or
other income earned on deposits in the Certificate Account, in accordance with
Section 3.06(b) (but only to the extent of the Net Investment Earnings, if any,
with respect to the Certificate Account for each Collection Period), and (iii)
to the extent not required to be paid to any Mortgagor under applicable law or
under the related Mortgage, any interest or other income earned on deposits in
the Servicing Accounts maintained thereby. The Master Servicer shall be required
to pay out of its own funds all expenses incurred by it in connection with its
servicing activities hereunder (including, without limitation, payment of any
amounts due and owing to any Sub-Servicer retained by it and the premiums for
any blanket policy insuring against hazard losses pursuant to Section 3.07(b)),
if and to the extent such expenses are not payable directly out of the
Certificate Account, and the Master Servicer shall not be entitled to
reimbursement therefor except as expressly provided in this Agreement.
(c) 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 Loan. As to each Specially
Serviced Mortgage Loan and REO Loan, the Special Servicing Fee shall accrue from
time to time at the Special Servicing Fee Rate on the basis of the same
principal amount and for the same period respecting which any related interest
payment due on such Mortgage Loan or deemed to be due on such REO Loan is
computed. The Special Servicing Fee with respect to any Specially Serviced
Mortgage Loan or REO Loan shall cease to accrue as of the date a Liquidation
Event occurs in respect thereof or it becomes a Corrected Mortgage Loan. Earned
but unpaid Special Servicing Fees shall be payable monthly out of general
collections on the Mortgage Loans and any REO Properties on deposit in the
Certificate Account pursuant to Section 3.05(a).
As further compensation for its activities hereunder, the Special
Servicer shall be entitled to receive the Standby Fee with respect to each
Mortgage Loan and each REO Loan. As to each Mortgage Loan and each REO Loan, the
Standby Fee shall accrue from time to time at the Standby Fee Rate on the basis
of the same principal amount and for the same period respecting which any
related interest payment due on such Mortgage Loan or deemed to be due on such
REO Loan is computed. Standby Fees shall be payable monthly by the Master
Servicer out of its Master Servicing Fees with respect to each Mortgage Loan and
each REO Loan.
As further compensation for its activities hereunder, the Special
Servicer shall be entitled to receive the Workout Fee with respect to each
Corrected Mortgage Loan, unless the basis on which such Mortgage Loan became a
Corrected Mortgage Loan was the remediation of a circumstance or condition
relating to the Mortgage Loan Seller's or the Additional Warranting Party's
obligation to repurchase such Mortgage Loan pursuant to Section 2.03, in which
case, if such Mortgage Loan is repurchased within the 120-day period described
in Section 2.03(a), no Workout Fee will be payable from or based upon the
receipt of, any
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Purchase Price paid by the Mortgage Loan Seller or the Additional Warranting
Party in satisfaction of such repurchase obligation. Furthermore, no Workout
Fees will be payable from or based upon the receipt of any Liquidation Proceeds
paid by any Majority Certificateholder of the Controlling Class or the Master
Servicer in connection with the purchase of all the Mortgage Loans and any REO
Properties in the Trust Fund pursuant to Section 9.01 hereof. As to each
Corrected Mortgage Loan, subject to the exceptions provided for in the two
preceding sentences, the Workout Fee shall be payable from, and shall be
calculated by application of the Workout Fee Rate to, each collection of
interest (other than Default 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 clause (ii) of the first paragraph of Section 6.04, 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 Mortgage 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 from the related Mortgagor or any Liquidation
Proceeds (other than in connection with the purchase of any such Specially
Serviced Mortgage Loan or REO Property by the Special Servicer pursuant to
Section 3.18, by the Master Servicer or the Majority Certificateholder of the
Controlling Class pursuant to Section 3.18 or Section 9.01 or by the Mortgage
Loan Seller or the Additional Warranting Party pursuant to Section 2.03 within
120 days of its discovery or notice of the breach or Document Defect that gave
rise to the repurchase obligation, and other than in connection with the
condemnation or other governmental taking of a Mortgaged Property or REO
Property). As to each such Specially Serviced Mortgage Loan or REO Property, the
Liquidation Fee shall be payable from, and shall be calculated by application of
the Liquidation Fee Rate to, such full or discounted payoff and/or such
Liquidation Proceeds; provided that no Liquidation Fee will be payable with
respect to any such Specially Serviced Mortgage Loan that becomes a Corrected
Mortgage Loan; and provided, further, that (without limiting the Special
Servicer's right to any Workout Fee that is properly payable therefrom), 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 or in connection with a condemnation or other governmental taking
of a Mortgaged Property or REO Property.
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Notwithstanding anything to the contrary herein, a Liquidation Fee and
a Workout Fee relating to the same Mortgage Loan shall not be paid from the same
proceeds on or with respect to such Mortgage Loan.
The Special Servicer's right to receive the Special Servicing Fee, the
Standby Fee, the Workout Fee and/or the Liquidation Fee may not be transferred
in whole or in part except in connection with the transfer of all of the Special
Servicer's responsibilities and obligations under this Agreement.
(d) Additional servicing compensation in the form of assumption fees
and modification fees received on or with respect to Specially Serviced Mortgage
Loans shall be promptly paid to the Special Servicer by the Master Servicer and
shall not be required to be deposited in the Certificate Account pursuant to
Section 3.04(a). Additional servicing compensation in the form of late payment
charges, assumption fees and modification fees that the Master Servicer (or the
related Sub-Servicer if so provided by the applicable Sub-Servicing Agreement)
is entitled to and that are collected by the Special Servicer, shall be paid
promptly to the Master Servicer by the Special Servicer. The Special Servicer
shall also be entitled to additional servicing compensation in the form of: (i)
interest or other income earned on deposits in the REO Account, if established,
in accordance with Section 3.06(b) (but only to the extent of the Net Investment
Earnings, if any, with respect to the REO Account for each Collection Period);
(ii) to the extent not required to be paid to any Mortgagor under applicable
law, any interest or other income earned on deposits in the Servicing Accounts
maintained thereby; and (iii) Net Penalty Charges collected on and allocable to
Specially Serviced Mortgage Loans and REO Loans. The Special Servicer shall be
required to pay out of its own funds all overhead, general and administrative
expenses incurred by it in connection with its servicing activities hereunder
(including, without limitation, payment of any amounts 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 3.07(b)), if and to the
extent such expenses are not payable directly out of the Certificate Account or
the REO Account, and the Special Servicer shall not be entitled to reimbursement
except as expressly provided in this Agreement.
(e) If the Master Servicer or Special Servicer is required under this
Agreement to make a Servicing Advance, but neither does so within 15 days after
such Servicing Advance is required to be made, the Trustee shall, if it has
actual knowledge of such failure on the part of the Master Servicer or Special
Servicer, as the case may be, give notice of such failure, as applicable, to the
Master Servicer and the Special Servicer. If such Servicing Advance is not made
by the Master Servicer or the Special Servicer within one Business Day after
such notice then (subject to Section 3.11(g) below), the Trustee shall make such
Servicing Advance. If the Trustee fails to make any Servicing Advance required
to be made under this Section 3.11(e), then (subject to Section 3.11(g) below)
the Fiscal Agent shall make such Advance within one Business Day of such failure
on the part of the Trustee and, thereby, the Trustee shall be deemed not to be
in default under this Agreement. Any failure by the Master Servicer or the
Special Servicer to make a Servicing Advance it is required to make hereunder
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shall constitute an Event of Default by the Master Servicer or the Special
Servicer, as the case may be, subject to and as provided in Section 7.01(a)(iv).
(f) As and to the extent permitted by Section 3.05(a), the Master
Servicer, the Special Servicer, the Trustee and the Fiscal Agent shall each be
entitled to receive interest at the Reimbursement Rate in effect from time to
time, accrued on the amount of each Servicing Advance made thereby (out of its
own funds) for so long as such Servicing Advance is outstanding, and such
interest will be paid: first, out of any Penalty Charges collected on or in
respect of the related Mortgage Loan during, and allocable to, the period, if
any, that it was a Specially Serviced Mortgage Loan or an REO Loan; and second,
once such Servicing Advance is reimbursed, out of general collections on the
Mortgage Loans and any REO Properties on deposit in the Certificate Account. As
and to the extent provided in Sections 3.03(a) and 3.05(a), the Master Servicer
shall reimburse itself, the Special Servicer, the Trustee or the Fiscal Agent,
as appropriate, for any Servicing Advance made thereby as soon as practicable
after funds available for such purpose are deposited in the Certificate Account
or a Servicing Account.
(g) Notwithstanding anything to the contrary set forth herein, none of
the Master Servicer, the Special Servicer, the Trustee or the Fiscal Agent shall
be required to make any Servicing Advance (including, without limitation, an
Emergency Advance) that it determines in its reasonable, good faith judgment
would constitute a Nonrecoverable Servicing Advance. In addition, Nonrecoverable
Servicing Advances shall be reimbursable pursuant to Section 3.05(a)(vii) out of
general collections on the Mortgage Pool on deposit in the Certificate 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
Servicing Advance or that any proposed Servicing Advance, if made, would
constitute a Nonrecoverable Servicing Advance, shall be evidenced by an
Officer's Certificate delivered promptly to the Trustee (or, if applicable,
retained thereby), the Fiscal Agent (or, if applicable, retained thereby), the
Sponsor and the Rating Agencies, 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 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, including, without limitation, engineers' reports,
environmental surveys, inspection reports, rent rolls, income and expense
statements or similar reports, that the Master Servicer or the Special Servicer
may have obtained and that supports such determination. If such an Appraisal
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 a Servicing Advance, obtain an Appraisal
for such purpose at the expense of the Trust Fund. The Trustee and the Fiscal
Agent shall 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 Servicing 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 Servicing Advance.
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SECTION 3.12. Inspections; Collection of Financial Statements.
(a) The Master Servicer shall inspect or cause the inspection of each
Mortgaged Property at least once every two years (or, if the related Mortgage
Loan has a then current balance greater than $2,000,000, at least once every
year), provided that at least 50% of the Mortgaged Properties (by both number
and aggregate Stated Principal Balances of the related Mortgage Loans) will be
inspected each year, commencing in 1997, by the Master Servicer (or an entity
employed by the Master Servicer for such purpose) or, in accordance with the
second succeeding sentence, by the Special Servicer. The Master Servicer shall
be responsible for such inspections only in respect of (i) Mortgage Loans that
are not Specially Serviced Mortgage Loans and (ii) Corrected Mortgage Loans. The
Special Servicer, subject to statutory limitations or limitations set forth in
the related Mortgage Loan documents, shall perform or cause to be performed a
physical inspection of a Mortgaged Property as soon as practicable after the
servicing of the related Mortgage Loan is transferred thereto pursuant to
Section 3.21(a). The Master Servicer and the Special Servicer shall each prepare
or cause to be prepared a written report of each such inspection performed or
caused to be performed thereby detailing the condition of the Mortgaged Property
and specifying the existence of (i) any vacancy in the Mortgaged Property that
is, in the reasonable judgment of the Master Servicer or Special Servicer (or
their respective designees), as the case may be, material and is evident from
such inspection, (ii) any abandonment of the Mortgaged Property, (iii) any
change in the condition or value of the Mortgaged Property that is, in the
reasonable judgment of the Master Servicer or Special Servicer (or their
respective designees), as the case may be, material and is evident from such
inspection, (iv) any waste on or deferred maintenance in respect of the
Mortgaged Property that is evident from such inspection or (v) any capital
improvements made that are evident from such inspection. The Master Servicer and
Special Servicer shall each deliver to the Trustee and each other a copy of each
such written report prepared or caused to be prepared by it within 45 days of
such report's preparation. The Trustee shall make available to
Certificateholders, Certificate Owners and prospective Certificateholders and
Certificate Owners (which prospective Certificateholders and Certificate Owners
have been certified to it as such by a Certificateholder or a Certificate
Owner), in accordance with Section 8.12(b), all such copies so delivered to it.
In the absence of actual knowledge that the Master Servicer or the Special
Servicer is in default under this Section 3.12(a), the Trustee shall have no
obligation to confirm that inspections of the Mortgaged Properties are being
performed in accordance with this Section 3.12(a). The preceding sentence
notwithstanding, in the event the Trustee has received, as of December 31 of any
calendar year, inspection reports with respect to less than 50% of the Mortgaged
Properties as set forth in the first sentence of this Section 3.12(a), the
Trustee shall notify the Master Servicer of such fact in writing on or before
January 31 of the immediately succeeding calendar year. The notice provided by
the Trustee to the Master Servicer of the deficiency in the number of inspection
reports provided to the Trustee, shall constitute notice "requiring the same to
be remedied" within the meaning of Section 7.01(a)(v) hereof and shall so state
on its face. If the Master Servicer does not provide satisfactory evidence
(which shall include the presentation of the required reports) of the
performance of the number of inspections required pursuant to the first sentence
of this section 3.12(a) within 30
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days of such notice, the Master Servicer shall be deemed to have failed duly to
observe and perform in all material respects its covenants and agreements set
forth in this Section 3.12(a).
(b) The Special Servicer, in the case of the Specially Serviced
Mortgage Loans, and the Master Servicer, in the case of all other Mortgage
Loans, shall make reasonable efforts to collect promptly from each Mortgagor
annual and quarterly operating statements and rent rolls of the related
Mortgaged Property, and financial statements of such Mortgagor, whether or not
delivery of such items is required pursuant to the terms of the related
Mortgage. The Special Servicer, in the case of the Specially Serviced Mortgage
Loans, and the Master Servicer, in the case of all other Mortgage Loans, shall
promptly: (i) review all such items as may be collected; (ii) prepare written
reports based on such reviews identifying the revenues, expenses, Net Operating
Income and Debt Service Coverage Ratios for the related Mortgage Loans and any
extraordinary increases or decreases in expenses or revenues associated with the
related Mortgaged Properties; and (iii) deliver copies of the collected items,
and of the written reports prepared in respect thereof, to the Trustee, the
Rating Agencies and each other, in each case within 45 days of its receipt or
preparation, as applicable. The Trustee shall make available to
Certificateholders, Certificate Owners and prospective Certificateholders and
Certificate Owners (which prospective Certificateholders and Certificate Owners
have been certified to it as such by a Certificateholder or a Certificate
Owner), in accordance with Section 8.12(b), all such copies so delivered to it.
In the absence of actual knowledge that the Master Servicer or the Special
Servicer is in default under this Section 3.12(b), the Trustee shall have no
obligation to confirm that the Master Servicer or the Special Servicer has or is
attempting to collect any of the items described above in this Section 3.12(b).
SECTION 3.13. Annual Statement as to Compliance.
Each of the Master Servicer and the Special Servicer will deliver to
the Trustee, with a copy to the Sponsor, on or before March 15 of each year,
beginning March 15, 1997, an Officer's Certificate stating that (i) a review of
the activities of the Master Servicer or the Special Servicer, as the case may
be, during the preceding calendar year, and of its performance under this
Agreement during such calendar year, has been made under the signing officer's
supervision, (ii) 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 in all
material respects fulfilled all of its obligations under this Agreement
throughout such calendar year, or, if there has been a material default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof, and (iii) the Master Servicer or the
Special Servicer, as the case may be, has received no notice regarding the
qualification or status as a REMIC of, or otherwise asserting a tax (other than
ad valorem real property taxes or other similar taxes on REO Property) on the
income or assets of, any portion of the Trust Fund from the Internal Revenue
Service or from any other governmental agency or body or, if it has received any
such notice, specifying the details thereof. The signing officer shall have no
personal liability with respect to the content of any such statement, and the
Master Servicer or the Special Servicer, as the case may be, shall be deemed to
have made such statement and shall assume any liability resulting therefrom.
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SECTION 3.14. Reports by Independent Public Accountants.
On or before April 15 of each year, beginning April 15, 1997 (or, as
to any such year, such earlier date as is contemplated by the last sentence of
this paragraph), the Master Servicer at its expense shall cause a firm of
independent public accountants (which may also render other services to the
Master Servicer) and that is a member of the American Institute of Certified
Public Accountants to furnish a statement to the Trustee and to the Sponsor 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. If the Sponsor notifies the
Trustee and the Master Servicer on or before March 1 of any year that such
statement is required to be filed with the Commission as part of the Form 10-K
for the Trust Fund covering the prior calendar year, the Master Servicer shall
deliver such statement by March 15 of such year.
The Special Servicer will deliver an annual accountants' report only
if, and in such form as may be, requested by the Rating Agencies.
The Master Servicer and the Special Servicer, to the extent
applicable, will reasonably cooperate with the Sponsor in conforming any reports
delivered pursuant to this Section 3.14 to requirements imposed by the
Commission on the Sponsor in connection with the Commission's issuance of a
no-action letter relating to the Sponsor's reporting requirements in respect of
the Trust Fund pursuant to the Exchange Act.
SECTION 3.15. Access to Certain Information.
Each of the Master Servicer and the Special Servicer shall provide or
cause to be provided to the other such party, the Sponsor, the Trustee and the
Rating Agencies, 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 any documentation regarding the Mortgage Loans and
the Trust Fund within its control which may be required by this Agreement or by
applicable law. Such access shall be afforded without charge but only upon
reasonable
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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.
SECTION 3.16. Title to REO Property; REO Account.
(a) If title to any REO Property is acquired, the deed or certificate
of sale shall be issued to the Trustee on behalf of the Certificateholders. The
Special Servicer shall sell any REO Property for cash within two years after
ownership of such REO Property is acquired for purposes of Section 860G(a)(8) of
the Code, unless the Special Servicer either (i) is granted an extension of time
(an "REO Extension") by the Internal Revenue Service to sell such REO Property
or (ii) obtains for the Trustee and the REMIC Administrator an Opinion of
Counsel, addressed to the Trustee and the REMIC Administrator, to the effect
that the holding by the Trust Fund of such REO Property subsequent to the second
anniversary of such acquisition will not result in the imposition of taxes on
"prohibited transactions" of REMIC I or REMIC II as defined in Section 860F of
the Code or cause REMIC I or REMIC II 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 sell such REO Property within
such period longer than two years as is permitted by such REO Extension or such
Opinion of Counsel, as the case may be. Any reasonable 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 Certificate Account
pursuant to Section 3.05(a). Any REO Extension shall be requested by the Special
Servicer no later than 60 days before the day on which the two-year grace period
would otherwise expire.
(b) The Special Servicer shall segregate and hold all funds collected
and received in connection with any REO Property separate and apart from its own
funds and general assets. If an REO Acquisition shall occur, the Special
Servicer shall establish and maintain, in each case at a depository institution
designated by the Master Servicer, one or more accounts (collectively, the "REO
Account"), to be held on behalf of the Trustee in trust for the benefit of the
Certificateholders, for the retention of revenues and other proceeds derived
from each REO Property. The REO Account shall be an Eligible Account and may
consist of one account for all the REO Properties. The Special Servicer shall
deposit, or cause to be deposited, in the REO Account, within two Business Days
of receipt, all REO Revenues, Liquidation Proceeds (net of all Liquidation
Expenses paid therefrom) and Insurance Proceeds received in respect of an REO
Property. The Special Servicer is authorized to pay out of related Liquidation
Proceeds any Liquidation Expenses incurred in respect of an REO Property and
outstanding at the time such proceeds are received. Funds in the REO Account may
be invested in Permitted Investments in accordance with Section 3.06. The
Special Servicer shall be entitled to make withdrawals from the REO Account to
pay itself, as additional servicing compensation in accordance with Section
3.11(d), interest and investment income earned in respect of amounts held in the
REO Account as provided in Section 3.06(b) (but only to the extent of the Net
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Investment Earnings with respect to the REO Account for any Collection Period).
The Special Servicer shall give notice to the other parties hereto of the
location of the REO Account when first established and of the new location of
the REO Account prior to any change thereof.
(c) The Special Servicer shall withdraw from the REO Account funds
necessary for the proper operation, management, maintenance and disposition of
any REO Property, but only to the extent of amounts on deposit in the REO
Account relating to such REO Property. Within one Business Day following the end
of each Collection Period, the Special Servicer shall withdraw from the REO
Account and deposit into the Certificate Account or deliver to the Master
Servicer (which shall deposit such amounts into the Certificate Account) the
aggregate of all amounts received in respect of each REO Property during such
Collection Period, net of any withdrawals made out of such amounts pursuant to
the preceding sentence; provided that the Special Servicer may retain in the REO
Account such portion of proceeds and collections as may be necessary to maintain
a reserve of sufficient funds for the proper operation, management, maintenance
and disposition of the related REO Property (including without limitation the
creation of a reasonable reserve for repairs, replacements and necessary capital
improvements and other related expenses), such reserve not to exceed an amount
sufficient to cover such items to be incurred during the following twelve-month
period.
(d) The Special Servicer shall keep and maintain separate records, on
a property-by-property basis, for the purpose of accounting for all deposits to,
and withdrawals from, the REO Account pursuant to Section 3.16(b) or (c).
SECTION 3.17. 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 Fund. If
the Special Servicer determines from such review 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"), such Mortgaged Property may be
Directly Operated by the Special Servicer as REO Property;
(ii) Directly Operating such Mortgaged Property as an REO Property
could result in income from such property that would be subject to an REO
Tax, but that a lease of such property to another party to operate such
property, or the performance of some services by an Independent Contractor
with respect to such property, or another method of operating such 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
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feasible) acquire such Mortgaged Property as REO Property and so lease or
operate such REO Property; or
(iii) It is reasonable to believe that Directly Operating such
property as REO Property could result in income subject to an REO Tax and
that no commercially feasible means exists to operate such property as REO
Property without the Trust Fund incurring or possibly incurring an REO Tax
on income from such property, the Special Servicer shall deliver to the
REMIC Administrator, in writing, a proposed plan (the "Proposed Plan") to
manage such 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 REMIC Administrator shall consult with
the Special Servicer and shall advise the Special Servicer of the REMIC
Administrator's federal income tax reporting position with respect to the
various sources of income that the Trust Fund would derive under the
Proposed Plan. In addition, the REMIC Administrator shall (to the maximum
extent possible) advise the Special Servicer of the estimated amount of
taxes that the Trust Fund 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 REMIC Administrator, 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 property in a manner that would not result in the imposition of an REO
Tax on the income derived from such property.
The Special Servicer's decision as to how each REO Property shall be
managed and operated shall be based on the good faith and reasonable judgment of
the Special Servicer as to which means would be in the best interest of the
Certificateholders by maximizing (to the extent commercially feasible) the net
after-tax REO Revenues received by the Trust Fund with respect to such property
without materially impairing its marketability and, to the extent consistent
with the foregoing, in the same manner as would prudent mortgage loan servicers
and asset managers operating acquired mortgaged property comparable to such REO
Property. Both the Special Servicer and the REMIC Administrator may consult with
counsel knowledgeable in such matters at (to the extent reasonable) the expense
of the Trust Fund in connection with determinations required under this Section
3.17(a). Neither the Special Servicer nor the REMIC Administrator shall be
liable to the Certificateholders, the Trust Fund, 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 3.17(a) or, to the extent it relates to federal income tax
consequences for the Trust Fund, Section 3.17(b) below. Nothing in this Section
3.17(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 3.18.
(b) If title to any REO Property is acquired, the Special Servicer
shall manage, conserve, protect and operate such REO Property for the benefit of
the
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Certificateholders solely for the purpose of its prompt disposition and sale in
a manner that does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or,
except as contemplated by Section 3.17(a), result in the receipt by either of
REMIC I or REMIC II of any "income from non-permitted assets" within the meaning
of Section 860F(a)(2)(B) of the Code or in an Adverse REMIC Event in respect of
any such REMIC. Except as provided in Section 3.17(a), 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, contract or agreement
to which the Special Servicer or the Trust Fund may become a party or 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 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 consistent with the
Servicing Standard and, consistent therewith, shall withdraw from the REO
Account, to the extent of amounts on deposit therein with respect to any REO
Property, funds necessary for the proper operation, management, maintenance and
disposition 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, lease, sell,
protect, manage, operate and restore such REO Property.
To the extent that amounts on deposit in the REO Account in respect of any REO
Property are insufficient for the purposes set forth in clauses (i) through (iv)
above with respect to such REO Property, the Special Servicer shall make
Servicing Advances in such amounts as are necessary for such purposes unless (as
evidenced by an Officer's Certificate delivered to the Trustee) the Special
Servicer would not make such Servicing Advances if the Special Servicer owned
such REO Property or the Special Servicer determines, in accordance with the
Servicing Standard, that such payment would be a Nonrecoverable Servicing
Advance; provided, however, that the Special Servicer may make any such
Servicing Advance without regard to recoverability if it is a necessary fee or
expense incurred in connection with the defense or prosecution of legal
proceedings.
(c) The Special Servicer may (and, except as otherwise permitted by
Section 3.17(a), shall if it would avoid an Adverse REMIC Event) contract with
any Independent Contractor for the operation and management of any REO Property,
provided that:
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(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 expenses
of the Trust Fund) shall be reasonable and customary in consideration of
the nature and locality of the REO Property;
(iii) any such contract shall be consistent with the provisions of
Treasury Regulation ss.1.856-4(b)(5) and, to the extent consistent
therewith, shall be administered to require that the Independent
Contractor, in a timely manner, (A) to the extent of available revenue from
the REO Property, pay all costs and expenses incurred in connection with
the operation and management of such REO Property, including, without
limitation, those listed in Section 3.17(b) above, and (B) remit all
related revenues collected (net of its fees and such costs and expenses) to
the Special Servicer upon receipt;
(iv) none of the provisions of this Section 3.17(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;
(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; and
(vi) the appointment of such Independent Contractor will not result in
a qualification, downgrading or withdrawal of any of the ratings then
assigned to the Certificates by such Rating Agency (as evidenced in writing
or otherwise by such Rating Agency).
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 3.18. Sale of Mortgage Loans and REO Properties.
(a) The parties hereto may sell or purchase, or permit the sale or
purchase of, a Mortgage Loan or REO Property only on the terms and subject to
the conditions set forth in this Section 3.18 or as otherwise expressly provided
in or contemplated by Sections 2.03 and 9.01.
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(b) If the Special Servicer has determined, in its good faith and
reasonable judgment, that any Defaulted Mortgage Loan will become the subject of
a foreclosure sale or similar proceeding, the Special Servicer shall promptly so
notify in writing the Trustee and the Master Servicer, and the Trustee shall,
within 10 days after receipt of such notice, notify all the Certificateholders
of the Controlling Class. The Majority Certificateholder of the Controlling
Class may at its option purchase from the Trust Fund, at a price equal to the
applicable Purchase Price, any such Defaulted Mortgage Loan. The Purchase Price
for any Mortgage Loan purchased under this paragraph (b) shall be deposited into
the Certificate Account, and the Trustee, upon receipt of an Officer's
Certificate from the Master Servicer to the effect that such deposit has been
made, shall release or cause to be released to the Certificateholder(s)
effecting such purchase (or any designee thereof) the related Mortgage File, and
shall execute and deliver such instruments of transfer or assignment, in each
case without recourse, as shall be provided to it and are reasonably necessary
to vest in the Certificateholder(s) effecting such purchase (or any designee
thereof) ownership of such Mortgage Loan. In connection with any such purchase,
the Special Servicer shall deliver the related Servicing File to the
Certificateholder(s) effecting such purchase (or any designee thereof).
(c) If the Majority Certificateholder of the Controlling Class has not
purchased any Defaulted Mortgage Loan within 15 days of its having received
notice in respect thereof pursuant to Section 3.18(b) above, either the Special
Servicer or, subject to the Special Servicer's prior rights in such regard, the
Master Servicer may at its option purchase such Mortgage Loan from the Trust
Fund, at a price equal to the Purchase Price. The Purchase Price for any such
Mortgage Loan purchased under this paragraph (c) shall be deposited into the
Certificate Account, and the Trustee, upon receipt of an Officer's Certificate
from the Master Servicer to the effect that such deposit has been made, shall
release or cause to be released to the Master Servicer or the Special Servicer,
as applicable, the related Mortgage File, and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as shall
be provided to it and are reasonably necessary to vest in the Master Servicer or
the Special Servicer, as applicable, the ownership of such Mortgage Loan. In
connection with any such purchase by the Master Servicer, the Special Servicer
shall deliver the related Servicing File to the Master Servicer.
(d) The Special Servicer may offer to sell any Defaulted Mortgage Loan
not otherwise purchased pursuant to Section 3.18(b) or Section 3.18(c) above, if
and when the Special Servicer determines, consistent with the Servicing
Standard, that such a sale would be in the best economic interests of the Trust
Fund. Such offer shall be made in a commercially reasonable manner (which, for
purposes hereof, includes an offer to sell without representation or warranty
other than customary warranties of title, loan status, condition and similar
customary matters, if liability for breach thereof is limited to recourse
against the Trust Fund) for a period of not less than 30 days. Unless the
Special Servicer determines that acceptance of any offer would not be in the
best economic interests of the Trust Fund, the Special Servicer shall accept the
highest cash offer received from any Person that constitutes a fair price for
such Mortgage Loan. In the absence of any offer determined as provided below to
be fair, the Special Servicer
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shall proceed with respect to such Defaulted Mortgage Loan in accordance with
Section 3.09 and, otherwise, in accordance with the Servicing Standard.
The Special Servicer shall use its best efforts to solicit offers for
each REO Property in such manner as will be reasonably likely to realize a fair
price within the time period provided for by Section 3.16(a). The Special
Servicer shall accept the first (and, if multiple offers are received
contemporaneously, highest) cash offer received from any Person that constitutes
a fair price for such REO Property. If the Special Servicer reasonably believes
that it will be unable to realize a fair price for any REO Property within the
time constraints imposed by Section 3.16(a), the Special Servicer shall dispose
of such REO Property upon such terms and conditions as the Special Servicer
shall deem necessary and desirable to maximize the recovery thereon under the
circumstances and, in connection therewith, shall accept the highest outstanding
cash offer, regardless of from whom received.
The Special Servicer shall give the Trustee and the Master Servicer
not less than five Business Days' prior written notice of its intention to sell
any Defaulted Mortgage Loan or REO Property pursuant to this Section 3.18(d). No
Interested Person shall be obligated to submit an offer to purchase any such
Mortgage Loan or REO Property, and notwithstanding anything to the contrary
herein, neither the Trustee nor the Fiscal Agent, each in its respective
individual capacity, nor any of their respective Affiliates may make an offer
for or purchase any Defaulted Mortgage Loan or any REO Property pursuant hereto.
(e) Whether any cash offer constitutes a fair price for any Defaulted
Mortgage Loan or REO Property, as the case may be, for purposes of Section
3.18(d), shall be determined by the Special Servicer or, if such cash offer is
from an Interested Person, by the Trustee. In determining whether any offer
received from an Interested Person represents a fair price for any such Mortgage
Loan or REO Property, the Trustee shall be supplied with and shall rely on the
most recent Appraisal or updated Appraisal conducted in accordance with this
Agreement within the preceding 12-month period or, in the absence of any such
Appraisal, on a narrative appraisal prepared by a Qualified Appraiser, retained
by the Special Servicer. Such appraiser shall be selected by the Special
Servicer if the Special Servicer is not making an offer with respect to a
Defaulted Mortgage Loan or REO Property and shall be selected by the Trustee if
the Special Servicer is making such an offer. The cost of any such narrative
appraisal shall constitute a Servicing Advance. When any Interested Person is
among those making an offer with respect to a Defaulted Mortgage Loan or REO
Property, the Special Servicer shall require that all offers be submitted in
writing and be accompanied by a refundable deposit of cash in an amount equal to
5% of the offered amount. In determining whether any offer from a Person other
than an Interested Person constitutes a fair price for any such Mortgage Loan or
REO Property, the Special Servicer shall take into account (in addition to the
results of any Appraisal, updated Appraisal or narrative Appraisal that it may
have obtained pursuant to this Agreement within the prior 12 months), and in
determining whether any offer from an Interested Person constitutes a fair price
for any such Mortgage Loan or REO Property, any appraiser or other expert in
real estate matters shall be instructed to take into account, as applicable,
among other factors, the period and amount of any delinquency on the affected
Mortgage Loan, the
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occupancy level and physical condition of the Mortgaged Property or REO
Property, the state of the local economy and the obligation to dispose of any
REO Property within the time period specified in Section 3.16(a).
Notwithstanding the other provisions of this Section 3.18, no cash offer from
any Interested Person or any Affiliate thereof in an amount less than the
related Purchase Price shall constitute a fair price for any Defaulted Mortgage
Loan or REO Property unless such offer is the highest cash offer received and at
least two additional offers (not including the offer of the Interested Person or
any Affiliate) have been received from Independent third parties. The Purchase
Price for any Defaulted Mortgage Loan or REO Property shall in all cases be
deemed a fair price.
(f) Subject to Sections 3.18(a) through 3.18(e) above, the Special
Servicer shall act on behalf of the Trustee in negotiating and taking any other
action necessary or appropriate in connection with the sale of any Defaulted
Mortgage Loan or REO Property, and the collection of all amounts payable in
connection therewith. In connection therewith, the Special Servicer may charge
prospective offerors, and may retain, fees that approximate the Special
Servicer's actual costs in the preparation and delivery of information
pertaining to such sales or evaluating offers without obligation to deposit such
amounts into the Certificate Account. Any sale of a Defaulted Mortgage Loan or
any REO Property shall be final and without recourse to the Trustee or the Trust
Fund (except such recourse imposed by those representations and warranties
typically given in such transactions, any prorations applied thereto and any
customary closing matters), and if such sale is consummated in accordance with
the terms of this Agreement, none of the Special Servicer, the Master Servicer
or the Trustee shall have any liability to any Certificateholder with respect to
the purchase price therefor accepted by the Special Servicer or the Trustee.
(g) Any sale of a Defaulted Mortgage Loan or any REO Property shall be
for cash only (unless, as evidenced by an Opinion of Counsel, changes in the
REMIC Provisions made subsequent to the Startup Day allow a sale for other
consideration).
(h) Notwithstanding any of the foregoing paragraphs of this Section
3.18, the Special Servicer shall not be obligated to accept the highest cash
offer if the Special Servicer determines, in accordance with the Servicing
Standard, that rejection of such offer would be in the best interests of the
Certificateholders, and the Special Servicer may accept a lower cash offer (from
any Person other than itself or an Affiliate) if it determines, in accordance
with the Servicing Standard, that acceptance of such offer would be in the best
interests of the Certificateholders (for example, if the prospective buyer
making the lower offer is more likely to perform its obligations or the terms
offered by the prospective buyer making the lower offer are more favorable).
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SECTION 3.19. Additional Obligations of the Master Servicer and the
Special Servicer.
(a) The Master Servicer shall maintain at its Primary Servicing Office
and shall, upon reasonable advance written notice, make available during normal
business hours for review by each Rating Agency and by any Certificateholder or
Certificate Owner or any Person identified to the Master Servicer as a
prospective transferee of a Certificate or an interest therein, copies of the
Servicing Files. Copies of all or any portion of any Servicing File are to be
made available by the Master Servicer upon request; however, the Master Servicer
shall be permitted to require payment of a sum sufficient to cover the
reasonable out-of-pocket costs and expenses of providing such service. The
Special Servicer shall, as to each Specially Serviced Mortgage Loan and REO
Property, promptly deliver to the Master Servicer a copy of each document or
instrument added to the related Servicing File, and the Master Servicer shall in
no way be in default under this Section 3.19(a) solely by reason of the Special
Servicer's failure to do so.
In connection with providing access to or copies of the items
described in the preceding paragraph, the Master Servicer may require (a) in the
case of Certificate Owners, a written confirmation executed by the requesting
Person, in form reasonably satisfactory to the Master Servicer, 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 a prospective purchaser, confirmation executed by the requesting
Person 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. All Certificateholders, by the acceptance of their
Certificates, shall be deemed to have agreed to keep such information
confidential. The Master Servicer shall not be liable for the dissemination of
information in accordance with this Section 3.19(a).
(b) Within 30 days (or within such longer period as the Master
Servicer or the Special Servicer, as applicable, is (as certified thereby to the
Trustee in writing) diligently and in good faith proceeding to obtain the
Appraisal referred to below) after the earliest of (i) the date on which any
Mortgage Loan becomes a Modified Mortgage Loan, (ii) the 90th day following the
occurrence of any uncured delinquency in Monthly Payments with respect to any
Mortgage Loan, (iii) the date on which a receiver is appointed in respect of the
Mortgaged Property securing any Mortgage Loan, (iv) the date on which the
Mortgagor under any Mortgage Loan becomes the subject of bankruptcy or
insolvency proceedings, and (v) the date on which the Mortgaged Property
securing any Mortgage Loan becomes an REO Property (each such Mortgage Loan and
any related REO Loan, a "Required Appraisal Loan"), the Master Servicer or
Special Servicer, as applicable, shall obtain an Appraisal of the related
Mortgaged Property; unless an Appraisal thereof had previously been obtained
within the prior twelve months. The cost of such Appraisal shall be a Servicing
Advance.
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With respect to each Required Appraisal Loan (unless such loan has
become a Corrected Mortgage Loan and has remained current for twelve consecutive
Monthly Payments, and no other Servicing Transfer Event has occurred with
respect thereto during such twelve months), the Special Servicer shall, within
30 days of each anniversary of such loan's becoming a Required Appraisal Loan,
order an update of the prior Appraisal (the cost of which will be a Servicing
Advance). Based upon such Appraisal, the Special Servicer shall redetermine and
report to the Trustee the Appraisal Reduction Amount, if any, with respect to
such loan.
(c) 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.
(d) No more frequently than once per calendar month, the Special
Servicer may require the Master Servicer, and the Master Servicer shall be
obligated, 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 Reimbursement Rate from the date 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 3.19(d), 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 Advance, and accordingly, the Master Servicer shall be entitled to
reimbursement for such Advance, together with Advance Interest thereon, 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 at least five
Business Days prior to the date on which failure to make such Servicing Advance
would (with notice from the Trustee regardless of whether such notice is
actually received) constitute an Event of Default pursuant to Section
7.01(a)(iv); provided, however, that the Special Servicer shall have an
obligation to make any Emergency Advance. The Master Servicer shall have the
obligation to make any such Servicing Advance (other than an Emergency Advance)
that it is requested by the Special Servicer to make within ten 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 Servicing Advance) other than an Emergency Advance. The Master
Servicer shall be entitled to reimbursement for any Servicing Advance made by it
at the
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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 3.19(d), the
Master Servicer shall not be required to reimburse the Special Servicer for, or
make at the Special Servicer's direction, any Servicing Advance if the Master
Servicer determines in its reasonable, good faith judgment that the Servicing
Advance which the Special Servicer is directing the Master Servicer to reimburse
it for or make hereunder, although not characterized by the Special Servicer as
a Nonrecoverable Servicing Advance, is or would be, if made, a Nonrecoverable
Servicing Advance. The Master Servicer shall notify the Special Servicer, the
Trustee and the Fiscal Agent in writing of such determination. Such notice shall
not obligate the Special Servicer to make such Servicing Advance.
(e) The Master Servicer shall deliver to the Trustee for deposit in
the Distribution Account on each Master Servicer Remittance Date, without any
right of reimbursement therefor, an amount equal to the aggregate of all Balloon
Payment Interest Shortfalls incurred in connection with Balloon Payments
received in respect of the Mortgage Pool during the most recently ended
Collection Period.
(f) The Master Servicer shall deliver to the Trustee for deposit in
the Distribution Account on each Master Servicer Remittance Date, without any
right of reimbursement therefor, an amount equal to the lesser of (i) the
aggregate of all Prepayment Interest Shortfalls incurred in connection with
Principal Prepayments received in respect of the Mortgage Pool during the most
recently ended Collection Period, and (ii) that portion of its Master Servicing
Fees that is, in the case of each Mortgage Loan and REO Loan, calculated at
0.125% per annum, together with the total amount of other master servicing
compensation, in any event received by the Master Servicer during such
Collection Period.
SECTION 3.20. Modifications, Waivers, Amendments and Consents.
(a) The Master Servicer and the Special Servicer each may, consistent
with the Servicing Standard, agree to any modification, waiver or amendment of
any term of, forgive or defer the payment of interest on and principal of,
permit the release, addition or substitution of collateral securing, and/or
permit the release of the Mortgagor on or any guarantor of any Mortgage Loan it
is required to service and administer hereunder, without the consent of the
Trustee or, except as contemplated by clause (ii) below, any Certificateholder,
subject, however, to each of the following limitations, conditions and
restrictions:
(i) other than as expressly provided in Sections 3.02 (with respect to
Penalty Charges) and 3.08 (with respect to due-on-sale and
due-on-encumbrance clauses), the Master Servicer shall not agree to any
modification, waiver or amendment of any term of, or take any of the other
acts referenced in this Section 3.20(a) with respect to, any Mortgage Loan
it is required to service and administer hereunder that would affect the
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amount or timing of any related payment of principal, interest or other
amount payable thereunder or, in the Master Servicer's good faith and
reasonable judgment, materially impair the security for such Mortgage Loan
or reduce the likelihood of timely payment of amounts due thereon; the
Special Servicer may, however, agree to any modification, waiver or
amendment of any term of, or take any of the other acts referenced in this
Section 3.20(a) with respect to, a Specially Serviced Mortgage Loan that
would have any such effect, but only if a material default on such Mortgage
Loan has occurred or, in the Special Servicer's reasonable and good faith
judgment, a default in respect of payment on such Mortgage Loan is
reasonably foreseeable, and such modification, waiver, amendment or other
action is reasonably likely to produce a greater recovery to
Certificateholders on a present value basis (the relevant discounting of
anticipated collections that will be distributable to Certificateholders to
be performed at the related Net Mortgage Rate), than would liquidation;
(ii) the Special Servicer may not, in connection with any particular
extension, extend the date on which any Balloon Payment is scheduled to be
due on any Specially Serviced Mortgage Loan for more than one year beyond
the later of (A) such Mortgage Loan's Stated Maturity Date and (B) the date
to which the Special Servicer has previously extended the maturity date in
accordance with this Section 3.20; and, in addition, the Special Servicer
may not extend the date on which any Balloon Payment is scheduled to be due
on any Specially Serviced Mortgage Loan beyond the third anniversary of
such Mortgage Loan's Stated Maturity Date if (X) any person or entity has
been selected and is serving as Extension Adviser and (Y) such Extension
Adviser has objected to such extension pursuant to Section 3.26;
(iii) neither the Master Servicer nor the Special Servicer shall make
or permit any modification, waiver or amendment of any term of, or take any
of the other acts referenced in this Section 3.20(a) with respect to, any
Mortgage Loan that would (A) cause REMIC I or REMIC II to fail to qualify
as a REMIC under the Code or result in the imposition of any tax on
"prohibited transactions" or "contributions" after the Startup Day of
either such REMIC under the REMIC Provisions or (B) cause any Mortgage Loan
to cease to be a "qualified mortgage" within the meaning of Section
860G(a)(3) of the Code (neither the Master Servicer nor the Special
Servicer shall be liable for decisions made under this subsection which
were made in good faith and, unless it would constitute bad faith or
negligence to do so, each of the Master Servicer and the Special Servicer
may rely on Opinions of Counsel in making such decisions);
(iv) neither the Master Servicer nor the Special Servicer shall permit
any Mortgagor to add or substitute any collateral for an outstanding
Mortgage Loan, which additional or substitute collateral constitutes real
property, unless the Master Servicer or the Special Servicer, as the case
may be, shall have first determined in accordance with the Servicing
Standard, based upon a Phase I Environmental Assessment (and such
additional environmental testing as the Master Servicer or Special
Servicer, as the case may be, deems necessary and appropriate) prepared by
an Independent Person who
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regularly conducts Phase I Environmental Assessments (and such additional
environmental testing), at the expense of the Mortgagor, that such
additional or substitute collateral is in compliance with applicable
environmental laws and regulations and that there are no circumstances or
conditions present with respect to such new collateral relating to the use,
management or disposal of any Hazardous Materials for which investigation,
testing, monitoring, containment, clean-up or remediation would be required
under any then applicable environmental laws and/or regulations; and
(v) neither the Master Servicer nor the Special Servicer shall release
or substitute any collateral securing an outstanding Mortgage Loan except
as provided in Section 3.09(d) and except in the case of a release where
(A) the use of the collateral to be released will not, in the Master
Servicer's or Special Servicer's, as the case may be, good faith and
reasonable judgment, materially and adversely affect the Net Operating
Income being generated by or the use of the related Mortgaged Property, (B)
there is a corresponding principal paydown of such Mortgage Loan in an
amount at least equal to, or a delivery of substitute collateral with an
appraised value at least equal to, the appraised value of the collateral to
be released, (C) the remaining Mortgaged Property and any substitute
collateral is, in the Master Servicer's or Special Servicer's, as the case
may be, good faith and reasonable judgment, adequate security for the
remaining Mortgage Loan and (D) such release and/or substitution would not
result in the downgrade, qualification or withdrawal of the rating then
assigned by any Rating Agency to any Class of Certificates (as confirmed in
writing by each Rating Agency);
provided that (x) the limitations, conditions and restrictions set forth in
clauses (i) through (v) above shall not apply to any modification of any term of
any Mortgage Loan that is required under the terms of such Mortgage Loan in
effect on the Closing Date or that is solely within the control of the related
Mortgagor, and (y) notwithstanding clauses (i) through (v) above, neither the
Master Servicer nor the Special Servicer shall be required to oppose the
confirmation of a plan in any bankruptcy or similar proceeding involving a
Mortgagor if in their reasonable and good faith judgment such opposition would
not ultimately prevent the confirmation of such plan or one substantially
similar.
(b) The Special Servicer shall have no liability to the Trust Fund,
the Certificateholders or any other Person if its analysis and determination
that the modification, waiver, amendment or other action contemplated by Section
3.20(a) is reasonably likely to produce a greater recovery to Certificateholders
on a present value basis than would liquidation, should prove to be wrong or
incorrect, so long as the analysis and determination were made on a reasonable
basis in good faith by the Special Servicer and the Special Servicer was not
negligent in ascertaining the pertinent facts.
(c) Any payment of interest, which is deferred pursuant to Section
3.20(a), shall not, for purposes hereof, including, without limitation,
calculating monthly distributions to Certificateholders, be added to the unpaid
principal balance of the related Mortgage Loan,
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notwithstanding that the terms of such Mortgage Loan so permit or that such
interest may actually be capitalized.
(d) The Master Servicer and the Special Servicer each may, as a
condition to its granting any request by a Mortgagor for consent, modification,
waiver or indulgence or any other matter or thing, the granting of which is
within the Master Servicer's or Special Servicer's, as the case may be,
discretion pursuant to the terms of the instruments evidencing or securing the
related Mortgage Loan and is permitted by the terms of this Agreement, require
that such Mortgagor pay to it, as additional servicing compensation, a
reasonable and customary fee (not to exceed 1.0% of the unpaid principal balance
of the related Mortgage Loan) for the additional services performed in
connection with such request, together with any related costs and expenses
incurred by it.
(e) All modifications, waivers, amendments and other actions entered
into or taken in respect of the Mortgage Loans pursuant to this Section 3.20
shall be in writing. Each of the Master Servicer and the Special Servicer shall
notify the other such party, the Extension Adviser and the Trustee, in writing,
of any modification, waiver, amendment or other action entered into or taken in
respect of any Mortgage Loan pursuant to this Section 3.20 and the date thereof,
and shall deliver to the Trustee or the related Custodian for deposit in the
related Mortgage File (with a copy to the other such party), an original
counterpart of the agreement relating to such modification, waiver, amendment or
other action, promptly (and in any event within 10 Business Days) following the
execution thereof. In addition, following the execution of any modification,
waiver or amendment agreed to by the Special Servicer pursuant to Section
3.20(a) above, the Special Servicer shall deliver to the Master Servicer and the
Trustee an Officer's Certificate setting forth in reasonable detail the basis of
the determination made by it pursuant to clause (i) of Section 3.20(a).
SECTION 3.21. Transfer of Servicing Between Master Servicer and
Special Servicer; Record Keeping.
(a) Upon determining that a Servicing Transfer Event has occurred with
respect to any Mortgage Loan, the Master Servicer shall promptly give notice
thereof, and deliver the related Servicing File, to the Special Servicer and
shall use its best efforts to provide the Special Servicer with all information,
documents (or copies thereof) and records (including records stored
electronically on computer tapes, magnetic discs and the like) relating to the
Mortgage Loan and reasonably requested by the Special Servicer to enable it to
assume its functions hereunder with respect thereto without acting through a
Sub-Servicer. The Master Servicer shall use its best efforts to comply with the
preceding sentence within five Business Days of the occurrence of each related
Servicing Transfer Event.
Upon determining that a Specially Serviced Mortgage Loan has become a
Corrected Mortgage Loan, 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
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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 shall resume.
Notwithstanding other provisions in this Agreement to the contrary,
the Master Servicer shall remain responsible for the 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 (including billing and
collection) with and notices to Mortgagors and similar matters relating to each
Specially Serviced Mortgage Loan and the related Mortgaged Property.
(b) In servicing any Specially Serviced Mortgage Loans, the Special
Servicer shall provide to the Trustee originals of documents included within the
definition of "Mortgage File" for inclusion in the related Mortgage File (with a
copy of each such original to the Master Servicer), and copies of any additional
related Mortgage Loan information, including correspondence with the related
Mortgagor.
(c) 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, consents and documents required to be given
or delivered by the Master Servicer to the Special Servicer or vice versa shall
be deemed to be given or delivered, as the case may be, without the necessity of
any action on such Person's part.
SECTION 3.22. Sub-Servicing Agreements.
(a) The Master Servicer and, with the consent of the Sponsor, the
Special Servicer, may enter into Sub-Servicing Agreements to provide for the
performance by third parties of any or all of its obligations hereunder,
provided that, in each case, the Sub-Servicing Agreement: (i) is not
inconsistent with this Agreement; (ii) expressly or effectively provides that if
the Master Servicer or Special Servicer, as the case may be, shall for any
reason no longer act in such capacity hereunder (including, without limitation,
by reason of an Event of Default), the Trustee or its designee may thereupon
either assume all of the rights and, except to the extent they arose prior to
the date of assumption, obligations of the Master Servicer or Special Servicer,
as the case may be, under such agreement or, subject to the provisions of
Section 3.22(d), terminate such rights and obligations, in either case without
payment of any fee except as set forth in Section 3.22(d); (iii) in the case of
a Sub-Servicing Agreement entered into by the Master Servicer, expressly or
effectively provides that such agreement shall be suspended with respect to any
Mortgage Loan serviced thereunder at the time such Mortgage Loan becomes a
Specially Serviced Mortgage Loan (but only until such time as such Mortgage Loan
becomes a Corrected Mortgage Loan) and, except as set forth in Section 3.22(d),
the Sub-Servicer shall not receive or accrue an entitlement to any sub-servicing
compensation in respect of a Specially Serviced Mortgage Loan or an REO Loan;
and (iv) in the case of a Sub-Servicing Agreement
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entered into by the Special Servicer, relates only to Specially Serviced
Mortgage Loans or REO Properties and expressly or effectively provides that such
agreement shall terminate with respect to any such Mortgage Loan that becomes a
Corrected Mortgage Loan. References in this Agreement to actions taken or to be
taken by the Master Servicer or the Special Servicer, as the case may be,
include actions taken or to be taken by a Sub-Servicer on behalf of the Master
Servicer or the Special Servicer, as the case may be; and, in connection
therewith, all amounts advanced by any Sub-Servicer to satisfy the obligations
of the Master Servicer or the Special Servicer, as the case may be, hereunder to
make 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 and, accordingly,
such Advances shall be recoverable by such Sub-Servicer in the same manner and
out of the same funds as if such Sub-Servicer were the Master Servicer or the
Special Servicer, as the case may be, and, for so long as they are outstanding,
such Advances shall accrue interest in accordance with Section 3.11(f) and/or
Section 4.03(d), such interest to be allocable between the Master Servicer or
the Special Servicer, as the case may be, and such Sub-Servicer as they may
agree. For purposes of this Agreement, the Master Servicer and the Special
Servicer each shall be deemed to have received any payment when a Sub-Servicer
retained by it receives such payment. The Master Servicer and the Special
Servicer each shall notify the Special Servicer, the Trustee and the Sponsor in
writing promptly of the appointment by it of any Sub-Servicer, and shall deliver
to the Trustee copies of all Sub-Servicing Agreements, and any amendments
thereto and modifications thereof, entered into by it promptly upon its
execution and delivery of such documents.
(b) Each Sub-Servicer (i) shall be authorized to transact business in
the state or states in which the Mortgaged Properties for the Mortgage Loans it
is to service are situated, if and to the extent required by applicable law, and
(ii) shall be an approved conventional seller/servicer of multifamily mortgage
loans for FHLMC or FNMA or a HUD-Approved Servicer.
(c) 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) each monitor the performance and enforce
the obligations of its Sub-Servicers under the related Sub-Servicing Agreements.
Such enforcement, including, without limitation, the legal prosecution of
claims, termination of Sub-Servicing Agreements in accordance with their
respective terms and the terms of this Agreement, 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, in its good faith business judgment, would require were it the owner of the
Mortgage Loans.
(d) With respect to the Sub-Servicing Agreements in effect as of the
Closing Date that are listed on Schedule II hereto, GMAC-CM hereby agrees that
it shall not, as Master Servicer or as Special Servicer, terminate any
Sub-Servicer thereunder without cause. In the event of the resignation, removal
or other termination of GMAC-CM or any successor Master Servicer hereunder for
any reason, the Trustee or other successor Master Servicer shall elect, with
respect to any Sub-Servicing Agreement existing at the time of such termination
(i) to
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assume the rights and obligations of the Master Servicer under such
Sub-Servicing Agreement and continue the sub-servicing arrangements thereunder
on the same terms (including without limitation the obligation to pay the same
sub-servicing fee), (ii) to enter into a new Sub-Servicing Agreement with such
Sub-Servicer and on such terms as such Master Servicer and such Sub-Servicer
shall mutually agree (it being understood that such Sub-Servicer is under no
obligation to accept any such new Sub-Servicing Agreement or to enter into or
continue negotiations with such Master Servicer) or (iii) to terminate such
Sub-Servicing Agreement without cause, provided that no Sub-Servicer may be
terminated without cause unless it receives Sub-Servicer Termination
Compensation. For purposes hereof, a Sub-Servicer shall receive "Sub-Servicer
Termination Compensation" if, at the election of the Trustee or other successor
Master Servicer, either of the following shall occur: (i) such successor Master
Servicer shall pay to such Sub-Servicer a fee (a "Sub-Servicer Termination Fee")
in an amount equal to two times the product of (A) the Primary Servicing Fee
Rate in effect under such Sub-Servicing Agreement at the time of such
Sub-Servicer's termination and (B) the then-current outstanding principal
balance of the Mortgage Loans serviced by such Sub-Servicer or (ii) the Trustee
or other successor Master Servicer (if such successor Master Servicer is a
Person other than the Trustee) shall agree to pay such Sub-Servicer an
interest-only strip out of its related Master Servicing Fees equal to the
"Termination Strip" (equal to the applicable Primary Servicing Fee Rate minus
0.04%) for each Mortgage Loan serviced by such Sub-Servicer at the time of such
Sub-Servicer's termination. Any subsequent successor Master Servicer (or the
Trustee, if it shall subsequently act in such capacity) shall be obligated to
pay any such Termination Strip agreed to by the Trustee or a predecessor Master
Servicer. Nothing in the foregoing provisions of this Section 3.22(d) shall
limit the ability of the successor Master Servicer to terminate a Sub-Servicer
at any time for cause; provided, however, that the parties hereto understand and
agree that the refusal or failure of a Sub-Servicer to enter into or continue
negotiations with a successor Master Servicer concerning a new Sub-Servicing
Agreement shall not constitute cause for termination. It shall be the corporate
obligation (not reimbursable by the Trust Fund or any of the other parties to
this Agreement) of the Person, who as successor Master Servicer, terminates any
Sub-Servicer without cause, and of its successors and assigns in such capacity
(to the extent contemplated by the second preceding sentence), to pay
Sub-Servicer Termination Compensation to such terminated Sub-Servicer.
(e) 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 its best efforts to effect the orderly and efficient transfer of
the Sub-Servicing Agreement to the assuming party.
(f) Notwithstanding any Sub-Servicing Agreement, the Master Servicer
and the Special Servicer shall each remain obligated and liable to the Trustee
and the Certificateholders for the performance of its obligations and duties
under this Agreement in accordance with the provisions hereof to the same extent
and under the same terms and
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conditions as if it alone were servicing and administering the Mortgage Loans
for which it is responsible.
SECTION 3.23. Designation of Special Servicer by the Majority
Certificateholder of the Controlling Class.
The Majority Certificateholder of the Controlling Class may at any
time and from time to time replace any existing Special Servicer or any Special
Servicer that has resigned or otherwise ceased to serve as Special Servicer.
Such Majority Certificateholder shall so designate a Person to so serve by the
delivery to the Trustee of a written notice stating such designation, subject to
the approval of the Trustee, which approval shall not be unreasonably withheld.
The Trustee shall, promptly after receiving any such notice, so notify the
Rating Agencies. If the Trustee approves the designated Person (based upon the
servicing qualifications and financial condition of such designated Person) as a
replacement Special Servicer, which approval shall not be unreasonably withheld,
the designated Person shall become the Special Servicer as of the date the
Trustee shall have received: (i) written confirmation from the Rating Agencies
stating that if the designated Person were to serve as Special Servicer
hereunder, none of the then-current ratings of the respective Classes of the
Certificates would be qualified, downgraded or withdrawn; (ii) a written
acceptance of all obligations of the Special Servicer under this Agreement,
executed by the designated Person; and (iii) an Opinion of Counsel (at the
expense of the Person designated to become the Special Servicer or the Majority
Certificateholder that made the designation) to the effect that the designation
of such Person to serve as Special Servicer is in compliance with this Section
3.23, that upon the execution and delivery of the written acceptance referred to
in the immediately preceding clause (ii), the designated Person shall be bound
by the terms of this Agreement and that this Agreement shall be enforceable
against the designated Person in accordance with its terms. The existing Special
Servicer shall be deemed to have resigned simultaneously with such designated
Person's becoming the Special Servicer hereunder; provided, however, that (i)
the terminated 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,
(ii) if it was terminated without cause, it shall be entitled to a portion of
certain Workout Fees thereafter received on the Corrected Mortgage Loans (but
only if and to the extent permitted by Section 3.11(c)), and (iii) it and its
directors, officers, employees and agents shall continue to be entitled to the
benefits of Section 6.03, notwithstanding any such resignation. Such terminated
Special Servicer shall cooperate with the Trustee and the replacement Special
Servicer in effecting the termination of its 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 credited by the terminated Special
Servicer to the REO Account or delivered to the Master Servicer or that are
thereafter received by the terminated Special Servicer with respect to Specially
Serviced Mortgage Loans and REO Properties.
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SECTION 3.24. Extension Adviser; Elections.
(a) The Holder or Holders of Certificates representing more than 50%
by Certificate Principal Balance of all the Registered Certificates (exclusive,
if applicable, of the Controlling Class and any Class of Registered Certificates
subordinate to the Controlling Class) shall be entitled to elect an extension
adviser having the rights and powers specified in Section 3.26(a) (the
"Extension Adviser") and/or to replace an existing Extension Adviser, all as
provided in this Section 3.24. Upon (i) the receipt by the Trustee of written
requests for an election of an Extension Adviser from the Holder or Holders of
Certificates representing more than 50% by Certificate Principal Balance of all
the Registered Certificates (exclusive, if applicable, of the Controlling Class
and any Class of Registered Certificates subordinate to the Controlling Class)
or (ii) the resignation or removal of the Person acting as Extension Adviser, an
election of an Extension Adviser shall be held commencing as soon as practicable
thereafter. The Extension Adviser shall be elected for the purpose of objecting
to the Special Servicer's extending the maturity of any Specially Serviced
Mortgage Loan beyond the third anniversary of its Stated Maturity Date.
(b) After any such receipt, resignation or removal contemplated by
Section 3.24(a), the Trustee shall call a meeting of the Holders of all
Registered Certificates (exclusive of the Controlling Class, if applicable, and
any Class of Registered Certificates subordinate to the Controlling Class).
Notice of the meeting of such Holders shall be mailed or delivered to each such
Holder 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 the Certificates representing a majority of the Voting
Rights allocated to the applicable Class or Classes, present themselves or
represented by proxy, shall constitute a quorum for the nomination of an
Extension Adviser, as the case may be. At the meeting, each such Holder shall be
entitled to nominate one Person to act as Extension Adviser. The Trustee shall
cause the election of the Extension Adviser to be held as soon thereafter as
convenient and in such manner as the Trustee shall reasonably determine.
(c) Each Holder of Registered Certificates (exclusive of the
Controlling Class, if applicable, and any Class of Registered Certificates
subordinate to the Controlling Class) shall be entitled to vote in each election
of the Extension Adviser. Immediately upon receipt by the Trustee of written
votes (which have not been rescinded) from the Holders of Certificates
representing more than 50% by Certificate Principal Balance of all the
Registered Certificates (exclusive of the Controlling Class, if applicable, and
any Class of Registered Certificates subordinate to the Controlling Class) which
are cast for a single Person, such Person shall be, upon such Person's
acceptance, the Extension Adviser. Prior to the initial election of an Extension
Adviser, the Master Servicer shall act as the Extension Adviser. Notwithstanding
anything to the contrary herein, during any period that there is no Extension
Adviser, the Special Servicer shall not have any right or obligation to consult
with or to seek and/or obtain approval from an Extension Adviser prior to
acting, and provisions of this Agreement relating thereto or requiring such
shall be of no effect.
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(d) The Extension Adviser may be removed at any time by the written
vote, copies of which must be delivered to the Trustee, of the Holders of
Certificates representing more than 50% by Certificate Principal Balance of all
the Registered Certificates (exclusive of the Controlling Class, if applicable,
and any Class of Registered Certificates subordinate to the Controlling Class).
(e) The Trustee shall act as judge of each election of an Extension
Adviser and, absent manifest error, the determination of the results of any such
election by the Trustee shall be conclusive. Notwithstanding any other
provisions of this Section 3.24, the Trustee may make such reasonable
regulations as it may deem advisable for any such election.
SECTION 3.25. Limitation on Liability of Extension Adviser.
The Extension Adviser may act solely as a representative of the
interests of the Certificateholders entitled to vote in the election thereof.
The Extension Adviser shall not have any liability to the Trust Fund or the
Certificateholders for any action taken, or for refraining from the taking of
any action, in good faith pursuant to this Agreement, or for errors in judgment.
By its acceptance of a Certificate, each Certificateholder confirms its
understanding that the Extension Adviser may take actions that favor the
interests of one or more Classes of the Certificates over other Classes of the
Certificates and that the Extension Adviser may have special relationships and
interests that conflict with those of Holders of some Classes of the
Certificates and agrees to take no action against the Extension Adviser or any
of its officers, directors, employees, principals or agents as a result of such
a special relationship or conflict.
SECTION 3.26. Duties of Extension Adviser.
If there is an Extension Adviser, the Special Servicer may not extend
the maturity of any Specially Serviced Mortgage Loan beyond the third
anniversary of its Stated Maturity Date, unless: (i) the Special Servicer has
notified the Extension Adviser of its intention to take such action and has
supplied the Extension Adviser with such information as the Extension Adviser
may reasonably request to allow the Extension Adviser to make an informed
decision; and (ii) the Extension Adviser has not objected to such extension in
writing within ten days of receiving from the Special Servicer written notice
thereof and sufficient information to make an informed decision (provided that
if such written objection to such extension has not been received by the Special
Servicer within such ten-day period, then the Extension Adviser's approval will
be deemed to have been given). In addition, the Extension Adviser shall be
entitled to confirm to its reasonable satisfaction that all conditions precedent
to the granting of any such extension set forth in this Agreement have been
satisfied.
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SECTION 3.27. Special Servicer to Cooperate with the Extension
Adviser.
(a) The Special Servicer shall, with respect to any proposed extension
of the maturity of any Specially Serviced Mortgage Loan beyond the third
anniversary of its Stated Maturity Date, prepare and deliver to the Extension
Adviser a summary of such proposed action and an analysis of whether such action
is reasonably likely to produce a greater recovery to Certificateholders on a
present value basis (the relevant discounting to be performed at the related
Mortgage Rate) than liquidation of such Mortgage Loan. Such analysis shall
specify the basis on which the Special Servicer has made such determination,
including the status of any existing material default or the grounds for
concluding that a payment default is reasonably foreseeable.
(b) All correspondence and communications with or from the Extension
Adviser may be conducted with or from the officers or employees of the Extension
Adviser whose names appear on a list of officers or employees furnished to the
Special Servicer by the Extension Adviser, as such list may from time to time be
amended.
(c) Any and all reports provided by the Special Servicer to the
Extension Adviser shall also be delivered to the Trustee.
SECTION 3.28 Confidentiality.
The Master Servicer and the Special Servicer shall each keep
confidential and shall not disclose to any Person other than each other, the
Sponsor, the Trustee and the Rating Agencies, without the related Sub-Servicer's
prior written consent, any information which it obtains in its capacity as
Master Servicer or Special Servicer with regard to the Sub-Servicer (other than
the name of the Sub-Servicer) or the Mortgage Loans or any related Mortgagor
including, without limitation, credit information with respect to any such
Mortgagor (collectively, "Confidential Information"), except (i) to the extent
that it is appropriate for the Master Servicer to do so in working with legal
counsel, auditors, taxing authorities or other governmental authorities, (ii) to
the extent required by this Agreement or any Sub-Servicing Agreement, (iii) to
the extent such information is otherwise publicly available, (iv) to the extent
such disclosure is required by law or (v) to the extent such information is
required to be delivered to third parties (including, without limitation,
property inspectors, tax service companies, insurance carriers, and data systems
vendors) in connection with the performance of the Master Servicer's or the
Special Servicer's obligations hereunder. For purposes of this paragraph, the
terms "Master Servicer" and "Special Servicer" shall mean the divisions or
departments of such corporate entities involved in providing services hereunder
and their respective officers, directors and employees, and shall not include
any other divisions or departments, or any Affiliates, of the Master Servicer or
Special Servicer (including without limitation any investor in any of the
Certificates and any such division, department or Affiliate engaged in the
origination of, or investment in, commercial or multifamily mortgage loans), all
of which shall be regarded as Persons not entitled to Confidential Information.
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SECTION 3.29 No Solicitation of Prepayments.
Neither the Master Servicer nor the Special Servicer shall solicit or
permit any Affiliate to solicit, either directly or indirectly, prepayments from
any Mortgagors under the Mortgage Loans; provided however, that the foregoing
restriction shall not be interpreted to prohibit such solicitation by a division
or department of, or an Affiliate of, the Master Servicer or the Special
Servicer if such solicitation occurs incidentally in the normal course of
business and such solicitation is not conducted, in whole or in part, (i) by a
Person engaged at any time in activities relating to the servicing of Mortgage
Loans or (ii) based upon or otherwise with the benefit of any information
obtained by or through the Master Servicer or Special Servicer or from
documentation relating to the Certificates, including without limitation any
listing of the Mortgage Loans or related Mortgagors or Mortgaged Properties.
Each Sub-Servicing Agreement shall contain a provision identical to the
foregoing with respect to the related Sub-Servicer.
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ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS AND RELATED MATTERS
SECTION 4.01. Distributions on the Certificates.
(a) On each Distribution Date, the Trustee shall apply amounts on
deposit in the Distribution Account, in each case to the extent of the remaining
portion of the Available Distribution Amount, in the following order of
priority:
(i) to distributions of interest to the Holders of the Class A-1
Certificates, the Holders of the Class A-2 Certificates, the Holders of the
Class A-3 Certificates and the Holders of the Class X Certificates, pro
rata in accordance with the respective amounts of Distributable Certificate
Interest payable in respect of such Classes of Certificates described in
this clause (i), in an amount equal to all Distributable Certificate
Interest in respect of each such Class of Certificates for such
Distribution Date and, to the extent not previously paid, for all prior
Distribution Dates;
(ii) to distributions of principal, first to the Holders of the Class
A-1 Certificates, second to the Holders of the Class A-2 Certificates, and
third to the Holders of the Class A-3 Certificates, in each case, in an
amount (not to exceed the Class Principal Balance of such Class of
Certificates outstanding immediately prior to such Distribution Date) equal
to the entire remaining Principal Distribution Amount for such Distribution
Date;
(iii) to distributions to the Holders of the Class A-1 Certificates,
the Holders of the Class A-2 Certificates and the Holders of the Class A-3
Certificates, pro rata in accordance with the respective amounts of
previously allocated Realized Losses and Additional Trust Fund Expenses
reimbursable in respect of such Classes of Certificates described in this
clause (iii), in an amount equal to, and in reimbursement of, all Realized
Losses and Additional Trust Fund Expenses, if any, that were previously
allocated to each such Class of Certificates and that remain unreimbursed
immediately prior to such Distribution Date;
(iv) to distributions of interest to the Holders of the Class B
Certificates in an amount equal to all Distributable Certificate Interest
in respect of such Class of Certificates for such Distribution Date and, to
the extent not previously paid, for all prior Distribution Dates;
(v) if the Class Principal Balances of the Class A-1, Class A-2 and
Class A-3 Certificates have been reduced to zero, to distributions of
principal to the Holders of the Class B Certificates, in an amount (not to
exceed the Class Principal Balance of the Class B Certificates outstanding
immediately prior to such Distribution Date) equal to the entire remaining
Principal Distribution Amount for such Distribution Date;
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(vi) to distributions to the Holders of the Class B Certificates, in
an amount equal to, and in reimbursement of, all Realized Losses and
Additional Trust Fund Expenses, if any, that were previously allocated to
the Class B Certificates and that remain unreimbursed immediately prior to
such Distribution Date;
(vii) to distributions of interest to the Holders of the Class C
Certificates, in an amount equal to all Distributable Certificate Interest
in respect of such Class of Certificates for such Distribution Date and, to
the extent not previously paid, for all prior Distribution Dates;
(viii) if the Class Principal Balances of the Class A-1, Class A-2,
Class A-3 and Class B Certificates have been reduced to zero, to
distributions of principal to the Holders of the Class C Certificates, in
an amount (not to exceed the Class Principal Balance of the Class C
Certificates outstanding immediately prior to such Distribution Date) equal
to the entire remaining Principal Distribution Amount for such Distribution
Date;
(ix) to distributions to the Holders of the Class C Certificates, in
an amount equal to, and in reimbursement of, all Realized Losses and
Additional Trust Fund Expenses, if any, that were previously allocated to
the Class C Certificates and that remain unreimbursed immediately prior to
such Distribution Date;
(x) to distributions of interest to the Holders of the Class D
Certificates, in an amount equal to all Distributable Certificate Interest
in respect of such Class of Certificates for such Distribution Date and, to
the extent not previously paid, for all prior Distribution Dates;
(xi) if the Class Principal Balances of the Class A-1, Class A-2,
Class A-3, Class B and Class C Certificates have been reduced to zero, to
distributions of principal to the Holders of the Class D Certificates, in
an amount (not to exceed the Class Principal Balance of the Class D
Certificates outstanding immediately prior to such Distribution Date) equal
to the entire remaining Principal Distribution Amount for such Distribution
Date;
(xii) to distributions to the Holders of the Class D Certificates, in
an amount equal to, and in reimbursement of, all Realized Losses and
Additional Trust Fund Expenses, if any, that were previously allocated to
the Class D Certificates and that remain unreimbursed immediately prior to
such Distribution Date;
(xiii) to distributions of interest to the Holders of the Class E
Certificates, in an amount equal to all Distributable Certificate Interest
in respect of such Class of Certificates for such Distribution Date and, to
the extent not previously paid, for all prior Distribution Dates;
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(xiv) if the Class Principal Balances of the Class A-1, Class A-2,
Class A-3, Class B, Class C and Class D Certificates have been reduced to
zero, to distributions of principal to the Holders of the Class E
Certificates, in an amount (not to exceed the Class Principal Balance of
the Class E Certificates outstanding immediately prior to such Distribution
Date) equal to the entire remaining Principal Distribution Amount for such
Distribution Date;
(xv) to distributions to the Holders of the Class E Certificates, in
an amount equal to, and in reimbursement of, all Realized Losses and
Additional Trust Fund Expenses, if any, that were previously allocated to
the Class E Certificates and that remain unreimbursed immediately prior to
such Distribution Date;
(xvi) to distributions of interest to the Holders of the Class F
Certificates, in an amount equal to all Distributable Certificate Interest
in respect of such Class of Certificates for such Distribution Date and, to
the extent not previously paid, for all prior Distribution Dates;
(xvii) if the Class Principal Balances of the Class A-1, Class A-2,
Class A-3, Class B, Class C, Class D and Class E Certificates have been
reduced to zero, to distributions of principal to the Holders of the Class
F Certificates, in an amount (not to exceed the Class Principal Balance of
the Class F Certificates outstanding immediately prior to such Distribution
Date) equal to the entire remaining Principal Distribution Amount for such
Distribution Date;
(xviii) to distributions to the Holders of the Class F Certificates,
in an amount equal to, and in reimbursement of, all Realized Losses and
Additional Trust Fund Expenses, if any, that were previously allocated to
the Class F Certificates and that remain unreimbursed immediately prior to
such Distribution Date;
(xix) to distributions of interest to the Holders of the Class G
Certificates, in an amount equal to all Distributable Certificate Interest
in respect of such Class of Certificates for such Distribution Date and, to
the extent not previously paid, for all prior Distribution Dates;
(xx) if the Class Principal Balances of the Class A-1, Class A-2,
Class A-3, Class B, Class C, Class D, Class E and Class F Certificates have
been reduced to zero, to distributions of principal to the Holders of the
Class G Certificates, in an amount (not to exceed the Class Principal
Balance of the Class G Certificates outstanding immediately prior to such
Distribution Date) equal to the entire remaining Principal Distribution
Amount for such Distribution Date;
(xxi) to distributions to the Holders of the Class G Certificates, in
an amount equal to, and in reimbursement of, all Realized Losses and
Additional Trust Fund
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Expenses, if any, that were previously allocated to the Class G
Certificates and that remain unreimbursed immediately prior to such
Distribution Date;
(xxii) to distributions of interest to the Holders of the Class H
Certificates, in an amount equal to all Distributable Certificate Interest
in respect of such Class of Certificates for such Distribution Date and, to
the extent not previously paid, for all prior Distribution Dates;
(xxiii) if the Class Principal Balances of the Class A-1, Class A-2,
Class A-3, Class B, Class C, Class D, Class E, Class F and Class G
Certificates have been reduced to zero, to distributions of principal to
the Holders of the Class H Certificates, in an amount (not to exceed the
Class Principal Balance of the Class H Certificates outstanding immediately
prior to such Distribution Date) equal to the entire remaining Principal
Distribution Amount for such Distribution Date;
(xxiv) to distributions to the Holders of the Class H Certificates, in
an amount equal to, and in reimbursement of, all Realized Losses and
Additional Trust Fund Expenses, if any, that were previously allocated to
the Class H Certificates and that remain unreimbursed immediately prior to
such Distribution Date; and
(xxv) to distributions to the Holders of the Class R-I Certificates,
in an amount equal to the balance, if any, of the Available Distribution
Amount for such Distribution Date remaining after the distributions to be
made on such Distribution Date pursuant to clauses (i) through (xxiv)
above;
provided that, on each Distribution Date coinciding with or following the Senior
Principal Distribution Cross-Over Date, and in any event on the Final
Distribution Date, 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 Balances of
such Classes of Certificates, and without regard to the Principal Distribution
Amount for such date; and provided, further, that, on the Final Distribution
Date, the payments of principal to be made pursuant to any of clauses (v),
(viii), (xi), (xiv), (xvii), (xx) and (xxiii) above with respect to any Class of
Sequential Pay Certificates, will be so made to the Holders thereof, up to an
amount equal to the entire then outstanding Class Principal Balance of such
Class of Certificates, and without regard to the Principal Distribution Amount
for such date. References to "remaining Principal Distribution Amount" in clause
(ii) above, in connection with payments of principal to be made to the Holders
of any Class of Class A Certificates, shall be to the Principal Distribution
Amount for such Distribution Date, net of any distributions of principal made in
respect thereof to the Holders of each other Class of Class A Certificates, if
any, that pursuant to clause (ii) above has an earlier right to payment with
respect thereto. References to "remaining Principal Distribution Amount" in any
of clauses (v), (viii), (xi), (xiv), (xvii), (xx) and (xxiii) above, in
connection with the payments of principal to be made to the Holders of any Class
of Sequential Pay Certificates, shall be to the Principal Distribution Amount
for such
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Distribution Date, net of any payments of principal made in respect thereof to
the Holders of each other Class of Sequential Pay Certificates that has a higher
Payment Priority.
Any Prepayment Premium (whether described in the related Mortgage Loan
documents as a fixed prepayment premium or a yield maintenance amount) actually
collected with respect to a Mortgage Loan or REO Loan during any particular
Collection Period will be distributed on the related Distribution Date as
follows: (1) if the aggregate Certificate Principal Balance of the Class A,
Class B and Class C Certificates has not been reduced to zero prior to such
Distribution Date, (a) 80% of each such Prepayment Premium will be distributed
to the Holders of the Class X Certificates and (b) 20% of each such Prepayment
Premium will be distributed to the holders of the Class or Classes of the Class
A, Class B and Class C Certificates entitled to receive distributions of
principal on such Distribution Date (pro rata based on the respective related
Class Prepayment Percentages if there is more than one such Class entitled to
distributions of principal); and (2) if the aggregate Certificate Principal
Balance of the Class A, Class B and Class C Certificates has been reduced to
zero prior to such Distribution Date, 100% of each such Prepayment Premium will
be distributed to the holders of the Class X Certificates.
All of the foregoing distributions to be made from the Distribution
Account on any Distribution Date with respect to the REMIC II Certificates shall
be deemed made from the payments deemed made to REMIC II in respect of the REMIC
I Regular Interests on such Distribution Date pursuant to Sections 4.05(a) and
4.05(b). All distributions of interest and additional interest (in the form of
Prepayment Premiums) made in respect of the Class X Certificates on any
Distribution Date pursuant to this Section 4.01(a), shall be deemed to have been
made in respect of Component X-A1, Component X-A2, Component X-A3, Component
X-B, Component X-C, Component X-D, Component X-E, Component X-F, Component X-G
and Component X-H, pro rata in accordance with the respective amounts of
Distributable Certificate Interest in respect of such Components for such
Distribution Date.
(b) 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 written
wiring instructions no less than five Business Days prior to 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 Additional Trust
Fund Expense previously allocated to such Certificate) will be made in like
manner, but only upon presentation and surrender of such Certificate at the
Corporate Trust Office 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
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of a Realized Loss or Additional Trust Fund Expense previously allocated
thereto, which reimbursement is to occur after the date on which such
Certificate is surrendered as contemplated by the preceding sentence, will be
made by check mailed to the address of the Certificateholder that surrendered
such Certificate as such address last appeared in the Certificate Registrar or
to any other address of which the Trustee was subsequently notified in writing.
(c) 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
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the Fiscal
Agent, the Certificate Registrar, the Sponsor, the Master Servicer, the Special
Servicer or the REMIC Administrator shall have any responsibility therefor
except as otherwise provided by this Agreement or applicable law.
(d) 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 Additional Trust Fund Expenses 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.
(e) Except as otherwise provided in Section 9.01, whenever the Trustee
expects that the final distribution with respect to any Class of Certificates
(determined without regard to any possible future reimbursement of any Realized
Loss or Additional Trust Fund Expense previously allocated to such Class of
Certificates) will be made on the next Distribution Date, the Trustee shall, as
soon as practicable in the month in which such Distribution Date occurs, mail to
each Holder of such Class of Certificates as of the date of mailing a notice to
the effect that:
(i) the Trustee expects that the final distribution with respect to
such Class of Certificates will be made on such Distribution Date but only
upon presentation and surrender of such Certificates at the Corporate Trust
Office or such other location therein specified, and
(ii) no interest shall accrue on such Certificates from and after such
Distribution Date.
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Any funds not distributed to any Holder or Holders of Certificates of such Class
on such Distribution Date because of the failure of such Holder or Holders to
tender their Certificates shall, on such date, be set aside and held uninvested
in trust and credited to the account or accounts of the appropriate
non-tendering Holder or Holders. If any Certificates as to which notice has been
given pursuant to this Section 4.01(e) shall not have been surrendered for
cancellation within six months after the time specified in such notice, the
Trustee shall mail a second notice to the remaining non-tendering
Certificateholders to surrender their Certificates for cancellation in order to
receive the final distribution with respect thereto. If within one year after
the second notice all such Certificates shall not have been surrendered for
cancellation, the Trustee, directly or through an agent, shall take such steps
to contact the remaining non- tendering Certificateholders concerning the
surrender of their Certificates as it shall deem appropriate. The costs and
expenses of holding such funds in trust and of contacting such
Certificateholders following the first anniversary of the delivery of such
second notice to the non-tendering Certificateholders shall be paid out of such
funds. No interest shall accrue or be payable to any Certificateholder on any
amount held in trust hereunder by the Trustee as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment
thereof in accordance with this Section 4.01(e). If all of the Certificates
shall not have been surrendered for cancellation by the second anniversary of
the delivery of the second notice, the Trustee shall distribute to the Class
R-II Certificateholders all unclaimed funds and other assets which remain
subject hereto.
(f) Notwithstanding any other provision of this Agreement, the Trustee
shall comply with all federal withholding requirements respecting payments to
Certificateholders of interest or original issue discount that the Trustee
reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
Trustee does withhold any amount from interest or original issue discount
payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall indicate the amount withheld to such
Certificateholders.
SECTION 4.02. Statements to Certificateholders; Certain Reports by the
Master Servicer and the Special Servicer.
(a) On each Distribution Date, the Trustee shall forward by mail to
each Holder (and, if it shall have certified to the Trustee as to its Ownership
Interest in a Class of Book-Entry Certificates, each Certificate Owner) of the
REMIC II Regular Certificates and to the Rating Agencies a statement (a
"Distribution Date Statement") as to the distributions made on such Distribution
Date setting forth:
(i) the amount of the distribution, if any, on such Distribution Date
to the Holders of each Class of REMIC II Regular Certificates in reduction
of the Class Principal Balance thereof;
(ii) the amount of the distribution, if any, on such Distribution Date
to the Holders of each Class of REMIC II Regular Certificates allocable to
Distributable
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Certificate Interest and the amount of the distribution, if any, on such
Distribution Date to the Holders of each Class of REMIC II Regular
Certificates allocable to Prepayment Premiums;
(iii) the Available Distribution Amount for such Distribution Date;
(iv) the aggregate amount of P&I Advances made in respect of the
immediately preceding Distribution Date;
(v) the aggregate Stated Principal Balance of the Mortgage Pool
outstanding immediately before and immediately after such Distribution
Date;
(vi) the number, aggregate principal balance, weighted average
remaining term to maturity and weighted average Mortgage Rate of the
Mortgage Pool as of the end of the Collection Period for the immediately
preceding Distribution Date;
(vii) as of the close of business on the last day of the most recently
ended calendar month, the number and aggregate unpaid principal balance of
Mortgage Loans (A) delinquent 30-59 days, (B) delinquent 60-89 days, (C)
delinquent 90 or more days, and (D) as to which foreclosure proceedings
have been commenced;
(viii) the book value (within the meaning of 12 C.F.R. ss.571.13 or
comparable provision) of any REO Property included in the Trust Fund as of
the end of the Collection Period for such Distribution Date;
(ix) the Accrued Certificate Interest and Distributable Certificate
Interest in respect of each Class of REMIC II Regular Certificates for such
Distribution Date;
(x) the aggregate amount of Distributable Certificate Interest payable
in respect of each Class of REMIC II Regular Certificates on such
Distribution Date, including, without limitation, any Distributable
Certificate Interest remaining unpaid from prior Distribution Dates;
(xi) any unpaid Distributable Certificate Interest in respect of each
Class of REMIC II Regular Certificates after giving effect to the
distributions made on such Distribution Date;
(xii) the Pass-Through Rate for each Class of REMIC II Regular
Certificates for such Distribution Date;
(xiii) the Principal Distribution Amount for such Distribution Date,
separately identifying the respective components of such amount;
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(xiv) the aggregate of all Realized Losses incurred during the related
Collection Period and, aggregated by type, all Additional Trust Fund
Expenses incurred during the related Collection Period;
(xv) the aggregate of all Realized Losses and Additional Trust Fund
Expenses that remain unallocated immediately following such Distribution
Date;
(xvi) the Class Principal Balance of each Class of REMIC II Regular
Certificates outstanding immediately before and immediately after such
Distribution Date, separately identifying any reduction therein due to the
allocation of Realized Losses and Additional Trust Fund Expenses on such
Distribution Date;
(xvii) the Certificate Factor for each Class of REMIC II Regular
Certificates immediately following such Distribution Date;
(xviii) the aggregate amount of servicing compensation paid to the
Master Servicer, the Special Servicer, and their respective Sub-Servicers,
collectively and separately, during the related Collection Period (and
separately identifying the portion of such compensation paid to each such
Person that constitutes Penalty Charges, assumption fees and modification
fees);
(xix) a brief description of any material waiver, modification or
amendment of any Mortgage Loan entered into by the Master Servicer or
Special Servicer pursuant to Section 3.20 during the related Collection
Period; and
(xx) such additional information, if any, as is contemplated on page
B-8 of the Prospectus Supplement.
In the case of information furnished pursuant to clauses (i) and (ii)
above, the amounts shall be expressed as a dollar amount in the aggregate for
all Certificates of each applicable Class and per Single Certificate. Absent
actual knowledge of an error therein, the Trustee shall have no obligation to
recompute, recalculate or verify any information provided to it by the Master
Servicer or Special Servicer. The calculations by the Trustee contemplated by
this Section 4.02 shall, in the absence of manifest error, be presumptively
deemed to be correct for all purposes hereunder.
In addition, the Trustee shall so deliver or cause to be delivered to
such Certificateholders and Certificate Owners and to the Rating Agencies, at
the same time that the Distribution Date Statement is delivered thereto, each
(i) Delinquent Loan Status Report, (ii) REO Status Report, (iii) Historical Loan
Modification Report, (iv) Special Servicer Loan Status Report, (v) Historical
Loss Report and (vi) Operating Statement Analysis (such six reports,
collectively with the Distribution Date Statement, the "Certificateholder
Reports") that has been received or prepared by the Trustee since the prior
Distribution Date. The form of any Certificateholder Report may change over
time.
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On each Distribution Date, the Trustee shall also deliver or cause to
be delivered to such Certificateholders and Certificate Owners and to the Rating
Agencies, a report (based on information received from the Master Servicer and
Special Servicer) containing, as and to the extent received from the Master
Servicer and Special Servicer, information regarding the Mortgage Pool as of the
close of business on the related Determination Date, which report shall contain
substantially the categories of information regarding the Mortgage Loans set
forth in Annex A to the Prospectus Supplement (calculated, where applicable, on
the basis of the most recent relevant information provided by the Mortgagors to
the Master Servicer or the Special Servicer and by the Master Servicer or the
Special Servicer, as the case may be, to the Trustee) and such information shall
be presented in a loan-by-loan and tabular format substantially similar to the
formats utilized in Annex A to the Prospectus Supplement (provided that no
information will be provided as to any repair and replacement or other cash
reserve and the only financial information to be reported on an ongoing basis
will be the actual expense, actual revenues and actual Net Operating Income for
the respective Mortgaged Properties and a Debt Service Coverage Ratio calculated
on the basis thereof).
On each Distribution Date, the Trustee shall forward or make available
electronically to the Sponsor, to the Master Servicer, to the Special Servicer,
to the Holders of the Residual Certificates and, in the case of reports
regarding a Class of Book-Entry Certificates, to The Trepp Group (at 477 Madison
Avenue, 15th Floor, New York, New York 10022, or such other address as The Trepp
Group may hereafter designate) or any other party that the Depository may
designate, a copy of the reports forwarded to the Holders of the REMIC II
Regular Certificates on such Distribution Date and a statement setting forth the
amounts, if any, actually distributed with respect to each Class of Residual
Certificates on such Distribution Date.
Within a reasonable period of time after the end of each calendar
year, the Trustee shall furnish to each Person who at any time during the
calendar year was a Holder of a REMIC II Regular Certificate a statement
containing the information as to the applicable Class set forth in clauses (i)
and (ii) above of the description of Distribution Date Statement, aggregated for
such calendar year or applicable portion thereof during which such Person was a
Certificateholder, together with such other information as the Trustee
determines to be necessary to enable Certificateholders to prepare their tax
returns for such calendar year. Such obligation of the Trustee shall be deemed
to have been satisfied to the extent that substantially comparable information
shall be provided by the Trustee pursuant to any requirements of the Code as
from time to time are in force.
Upon filing with the IRS, the REMIC Administrator shall furnish to the
Holders of the Class R-I and Class R-II Certificates the Form 1066 and shall
furnish their respective Schedules Q thereto at the times required by the Code
or the IRS, and shall provide from time to time such information and
computations with respect to the entries on such forms as any Holder of the
Class R-I and Class R-II Certificates may reasonably request.
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Upon the authorization of the Sponsor, the Trustee shall deliver all
the reports delivered or made available pursuant to this Section 4.02(a) to the
Certificateholders and Certificate Owners to Bloomberg Financial Markets, L.P.
("Bloomberg") using a format and media mutually acceptable to the Trustee and
Bloomberg or shall otherwise make such reports available via its own electronic
bulletin board.
(b) At or before 11:00 a.m. (New York City time) on the third Business
Day prior to the related Distribution Date, the Master Servicer shall deliver or
cause to be delivered to the Trustee and the Special Servicer, in writing and on
a computer-readable medium, in form reasonably acceptable to the Trustee,
including, without limitation, on a loan-by-loan basis, the following reports:
(1) a Delinquent Loan Status Report, (2) an REO Status Report, (3) a Historical
Loan Modification Report, (4) a Historical Loss Report, (5) the Special Servicer
Loan Status Report most recently received by the Master Servicer and (6) a
single report setting forth the information specified in clauses (i) through
(xv) below (the items specified in clause (xiii) below to be reported once per
calendar quarter, and the amounts and allocations of payments, collections, fees
and expenses with respect to Specially Serviced Mortgage Loans and REO
Properties to be based upon the report to be delivered by the Special Servicer
to the Master Servicer on the second Business Day after such Determination Date,
in the form required by Section 4.02(c) below):
(i) the aggregate amount that is to be transferred from the
Certificate Account to the Distribution Account on the related Master
Servicer Remittance Date that is allocable to principal on or in respect of
the Mortgage Loans and any REO Loans, separately identifying the aggregate
amount of any Principal Prepayments included therein, and (if different)
the Principal Distribution Amount for the immediately succeeding
Distribution Date;
(ii) the aggregate amount that is to be transferred from the
Certificate Account to the Distribution Account on the related Master
Servicer Remittance Date that is allocable to (A) interest on or in respect
of the Mortgage Loans and any REO Loans and (B) Prepayment Premiums;
(iii) the aggregate amount of any P&I Advances (specifying the
principal and interest portions thereof separately) to be made pursuant to
Section 4.03 of this Agreement that were made in respect of the immediately
preceding Distribution Date;
(iv) the amount of the Master Servicing Fees, Special Servicing Fees,
Workout Fees, Liquidation Fees and other servicing compensation with
respect to the Mortgage Pool for the Collection Period ending on such
Determination Date, specifying the items and amounts of such other
servicing compensation payable to the Master Servicer, the Special Servicer
and any Sub-Servicers retained by each;
(v) the number and aggregate unpaid principal balance as of the close
of business on the last day of the most recently ended calendar month of
Mortgage Loans in the
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Mortgage Pool (A) remaining outstanding, (B) delinquent 30-59 days, (C)
delinquent 60- 89 days, (D) delinquent 90 days or more but not in
foreclosure and (E) in foreclosure; and the number and aggregate unpaid
principal balance as of the close of business on such Determination Date of
Mortgage Loans in the Mortgage Pool (X) as to which the related Mortgaged
Property has become REO Property during the Collection Period ending on
such Determination Date, (Y) as to which the related Mortgaged Property was
REO Property as of the end of such Collection Period and (Z) the terms of
which have been modified during such Collection Period pursuant to this
Agreement;
(vi) the loan number and the unpaid principal balance as of the close
of business on such Determination Date of each Specially Serviced Mortgage
Loan and each other Defaulted Mortgage Loan;
(vii) with respect to any REO Property that was included in the Trust
Fund as of the close of business on such Determination Date, the loan
number of the related Mortgage Loan, the book value of such REO Property
and the amount of REO Revenues and other amounts, if any, received on such
REO Property during the related Collection Period and the portion thereof
included in the Available Distribution Amount for the immediately
succeeding Distribution Date;
(viii) with respect to any Mortgage Loan as to which the related
Mortgaged Property became an REO Property during the Collection Period
ending on such Determination Date, the loan number of such Mortgage Loan
and the Stated Principal Balance of such Mortgage Loan as of the related
Acquisition Date;
(ix) with respect to any Mortgage Loan or REO Property as to which a
Final Recovery Determination was made by the Master Servicer during the
Collection Period ending on such Determination Date, the loan number of
such Mortgage Loan or, in the case of an REO Property, of the related
Mortgage Loan, the amount of Liquidation Proceeds and/or other amounts, if
any, received thereon during such Collection Period and the portion thereof
included in the Available Distribution Amount for the immediately
succeeding Distribution Date, and any resulting Realized Loss;
(x) the aggregate Stated Principal Balance of the Mortgage Pool
outstanding immediately before and immediately after such Distribution
Date;
(xi) the aggregate amount of Realized Losses on the Mortgage Pool for
the Collection Period ending on such Determination Date (and the portions
allocable to principal and interest);
(xii) the aggregate amount of the Additional Trust Fund Expenses
(broken down by type) withdrawn from the Certificate Account during the
Collection Period ending on such Determination Date;
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(xiii) to the extent provided by the related Mortgagors, information
with respect to occupancy rates for all Mortgaged Properties, sales per
square foot with respect to all retail Mortgaged Properties, and capital
expenditures and capital reserve balances with respect to all Mortgaged
Properties, in each case in the format of the Mortgage Loan Schedule;
(xiv) such other information on a Mortgage Loan-by-Mortgage Loan or
REO Property-by-REO Property basis as the Trustee or the Sponsor shall
reasonably request in writing (including, without limitation, information
with respect to any modifications of any Mortgage Loan, any Mortgage Loans
in default or foreclosure, the operation and disposition of REO Property
and the assumption of any Mortgage Loan); and
(xv) such additional information as is contemplated on page B-8 of the
Prospectus Supplement.
On the date on which the reports described above are delivered to the
Trustee, the Master Servicer shall also deliver or cause to be delivered to the
Trustee a report, in writing and in a computer-readable medium, in form
reasonably acceptable to the Trustee, containing the information with respect to
the Mortgage Pool necessary for the Trustee to prepare with respect to the
Mortgage Pool the additional schedules and tables required to be made available
by the Trustee pursuant to Section 4.02(a) in substantially the same formats set
forth in Annex A to the Prospectus Supplement, in each case reflecting the
changes in the Mortgage Pool during the related Collection Period.
Not later than the first day of the calendar month following each
Master Servicer Remittance Date, the Master Servicer shall forward to the
Trustee a statement, setting forth the status of the Certificate Account as of
the close of business on such Master Servicer Remittance Date, stating that all
distributions required by this Agreement to be made by the Master Servicer have
been made (or, in the case of any required distribution that has not been made
by the Master Servicer, specifying the nature and status thereof) and showing,
for the period from the preceding Master Servicer Remittance Date (or, in the
case of the first Master Servicer Remittance Date, from the Cut-Off Date) to
such Master Servicer Remittance Date, the aggregate of deposits into and
withdrawals from the Certificate Account for each category of deposit specified
in Section 3.04(a) and each category of withdrawal specified in Section 3.05(a).
The Master Servicer shall also deliver to the Trustee, upon reasonable request
of the Trustee, any and all additional information relating to the Mortgage
Loans (which information shall be based upon reports delivered to the Master
Servicer by the Special Servicer with respect to Specially Serviced Mortgage
Loans and REO Properties).
The Master Servicer shall use its reasonable efforts to obtain from
the related Mortgagor and, within 30 days of receipt, deliver to the Trustee,
the Sponsor and the Rating Agencies, copies of all of the quarterly and annual
operating statements and rent rolls for each Mortgaged Property, regardless of
whether the related Mortgage Loan documents require the Mortgagor to provide
such information. The Special Servicer shall, pursuant to 4.02(c) below,
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deliver to the Master Servicer (and, within 30 days of receipt, the Master
Servicer shall deliver to the Trustee, the Sponsor and the Rating Agencies) any
such operating statements and rent rolls collected by the Special Servicer with
respect to Specially Serviced Mortgage Loans and REO Property.
Within 130 days following the end of each calendar quarter, commencing
with the calendar quarter ended December 31, 1996, the Master Servicer shall
deliver to the Trustee, with respect to each Mortgaged Property and REO
Property, a report (an "Operating Statement Analysis") containing revenue,
expense and net operating income information normalized using the methodology
described in Annex A of the Prospectus Supplement as of the end of such calendar
quarter. The requirement that the Master Servicer deliver each Operating
Statement Analysis is subject to the Master Servicer having received directly or
through the Special Servicer the related operating statements and rent rolls
from the related Mortgagor.
The Master Servicer, on each Determination Date, shall forward (for
delivery on such Determination Date) to the Special Servicer all information
collected by the Master Servicer which the Special Servicer is required to
include in the Special Servicer Loan Status Report. Further, the Master Servicer
shall cooperate with the Special Servicer and provide the Special Servicer with
the information in the possession of the Master Servicer reasonably requested by
the Special Servicer, in writing, to the extent required to allow the Special
Servicer to perform its obligations under this Agreement with respect to those
Mortgage Loans serviced by the Master Servicer.
The Master Servicer shall use its reasonable efforts to notify the
Rating Agencies in a timely manner of any change in the identity of either of
the two largest tenants of any retail Mortgaged Property and any casualty at or
condemnation proceeding with respect to any Mortgaged Property, subject to its
becoming aware of such change or event.
(c) On the second Business Day after each Determination Date, the
Special Servicer shall forward to the Master Servicer (A) the Special Servicer
Loan Status Report and (B) all information the Master Servicer will be required
to include in the other reports that the Master Servicer is obligated to deliver
to the Trustee pursuant to Section 4.02(b), to the extent such information
relates to any Specially Serviced Mortgage Loan or any REO Property. The Special
Servicer shall also deliver to the Master Servicer and the Trustee, upon the
reasonable written request of either of them, any and all additional information
in the possession of the Special Servicer relating to the Specially Serviced
Mortgage Loans and the REO Properties.
The Special Servicer shall use its reasonable efforts to obtain (from
the related Mortgagor in the case of Specially Serviced Mortgage Loans) and,
within ten days of receipt, review and deliver to the Master Servicer with
respect to each Specially Serviced Mortgage Loan and REO Property, copies of all
quarterly and annual operating statements and quarterly and annual rent rolls
for the related Mortgaged Property or such REO Property, as the case may be.
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The Special Servicer shall cooperate with the Master Servicer and
provide the Master Servicer with the information in the possession of the
Special Servicer reasonably requested by the Master Servicer, in writing, to the
extent required to allow the Master Servicer to perform its obligations under
this Agreement with respect to the Specially Serviced Mortgage Loans and REO
Properties. Additional information regarding the Specially Serviced Mortgage
Loans, including, without limitation, any financial or occupancy information
(including lease summaries) provided to the Special Servicer by the Mortgagors
or otherwise obtained, shall be delivered to the Master Servicer, within ten
days of receipt.
SECTION 4.03. P&I Advances.
(a) On or before 1:00 p.m., New York City time, on each Master
Servicer Remittance Date, the Master Servicer shall either (i) deposit into the
Distribution Account from its own funds an amount equal to the aggregate amount
of P&I Advances, if any, to be made in respect of the related Distribution Date,
(ii) apply amounts held in the Certificate 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 any of the delinquent principal and/or interest in
respect of which it is to make P&I Advances on any Master Servicer Remittance
Date are then on deposit in the Certificate Account, the Master Servicer shall
use such Late Collections (net of any Master Servicing Fees and Workout Fees
payable therefrom) to make such P&I Advances. Any amounts held in the
Certificate Account for future distribution and so used to make P&I Advances
(other than the Late Collections of the delinquent principal and/or interest
contemplated by the proviso to the preceding sentence) shall be appropriately
reflected in the Master Servicer's records and replaced by the Master Servicer
by deposit in the Certificate 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/or interest in respect of which
such P&I Advances were made). If, as of 1:00 p.m., New York City time, on any
Master Servicer Remittance Date, the Master Servicer shall not have made any P&I
Advance required to be made on such date pursuant to this Section 4.03(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. (215)
682-3478 (or such alternative number provided by the Master Servicer to the
Trustee in writing) and by telephone at telephone no. (215) 682- 1790 (or such
alternative number provided by the Master Servicer to the Trustee in writing) as
soon as possible, but in any event before 3:00 p.m., New York City time, on such
Master Servicer Remittance Date. If after such notice the Trustee does not
receive the full amount of such P&I Advances by the close of business (New York
City time) on such Master Servicer Remittance Date, then (i) unless the Trustee
determines that such Advance would be a Nonrecoverable P&I Advance if made, the
Trustee shall make the portion of such P&I Advances that was required to be, but
was not, made by the Master Servicer on such Master Servicer Remittance Date and
(ii) such failure shall constitute an Event of Default on the part of the Master
Servicer. If the Trustee is required in accordance with this Section 4.03(a) to
make any
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P&I Advance or portion thereof, but fails to do so by 11:30 a.m., New York City
time, on the related Distribution Date, then, unless the Fiscal Agent determines
that such Advance would be a Nonrecoverable P&I Advance if made, the Fiscal
Agent shall make such P&I Advance or other advance not later than 11:30 a.m.,
New York City time, on such Distribution Date and, thereby, the Trustee shall
not be in default under this Agreement. The Trustee and the Fiscal Agent shall
each be entitled to reimbursement of the amount of any P&I Advance made thereby
from the funds in the Certificate Account.
(b) The aggregate amount of P&I Advances to be made in respect of the
Mortgage Loans (including, without limitation, Balloon Mortgage Loans delinquent
as to their respective Balloon Payments) and any REO Loans for any Distribution
Date shall equal, subject to subsection (c) below, the aggregate of all
Scheduled Payments (other than Balloon Payments) and any Assumed Scheduled
Payments, in each case net of related Master Servicing Fees and Workout Fees
payable hereunder, that were due or deemed due, as the case may be, in respect
thereof on their respective Due Dates during the related Collection Period and
that were not paid by or on behalf of the related Mortgagors or otherwise
collected as of the close of business on the last day of the related Collection
Period; provided that, if an Appraisal Reduction Amount exists with respect to
any Required Appraisal Loan, then, in the event of subsequent delinquencies
thereon, the interest portion of the P&I Advance in respect of such Required
Appraisal Loan for the related Distribution Date shall be reduced (it being
herein acknowledged that there shall be no reduction in the principal portion of
such P&I Advance) to equal the product of (i) the amount of the interest portion
of such 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 Amount, if any, and the denominator of which is
equal to the Stated Principal Balance of such Required Appraisal Loan
immediately prior to such Distribution Date.
(c) Notwithstanding anything herein to the contrary, no P&I Advance
shall be required to be made hereunder if such P&I Advance would, if made,
constitute a Nonrecoverable P&I Advance. In addition, Nonrecoverable P&I
Advances shall be reimbursable pursuant to Section 3.05(a)(vii) out of general
collections on the Mortgage Pool on deposit in the Certificate Account. The
determination by the Master Servicer or, if applicable, the Trustee or the
Fiscal Agent, that it has made a Nonrecoverable P&I Advance or that any proposed
P&I Advance, if made, would constitute a Nonrecoverable P&I Advance, shall be
evidenced by an Officer's Certificate delivered promptly (and, in any event, in
the case of a proposed P&I Advance by the Master Servicer, no less than 5
Business Days prior to the related Master Servicer Remittance Date) to the
Trustee (or, if applicable, retained thereby), the Fiscal Agent (or, if
applicable, retained thereby), the Sponsor and the Rating Agencies, 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 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
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that the Master Servicer or the Special Servicer may have obtained and that
supports such determination. Each of the Trustee or Fiscal Agent, as applicable,
shall deliver such Officer's Certificate as soon as practicable after its
determination that such P&I Advance would be nonrecoverable. If such an
Appraisal 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 Fund. The Trustee and the
Fiscal Agent shall 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 P&I 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 P&I Advance.
(d) As and to the extent permitted by Section 3.05(a), the Master
Servicer, the Trustee and the Fiscal Agent shall each be entitled to receive
interest at the Reimbursement Rate in effect from time to time, accrued on the
amount of each P&I Advance made thereby (out of its own funds) for so long as
such P&I Advance is outstanding (or, in the case of Advance Interest payable to
the Master Servicer, if earlier, until the Late Collection of the delinquent
principal and/or interest in respect of which such P&I Advance was made has been
received by the Master Servicer or any of its Sub-Servicers), and such interest
will be paid: first, out of any Penalty Charges collected on or in respect of
the related Mortgage Loan during, and allocable to, the period, if any, that it
was a Specially Serviced Mortgage Loan or an REO Loan; and second, once such P&I
Advance is reimbursed, out of general collections on the Mortgage Loans and any
REO Properties on deposit in the Certificate Account. As and to the extent
provided by Section 3.05(a), the Master Servicer shall reimburse itself, the
Trustee or the Fiscal Agent, as appropriate, for any P&I Advance made thereby as
soon as practicable after funds available for such purpose are deposited in the
Certificate Account.
SECTION 4.04. Allocation of Realized Losses and Additional Trust Fund
Expenses to the Sequential Pay Certificates.
On each Distribution Date, following the distributions to be made to
the Certificateholders on such date pursuant to Section 4.01(a), the Trustee
shall determine the amount, if any, by which (i) the then aggregate Certificate
Principal Balance of the Sequential Pay 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 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, Class A-2 and Class A-3 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
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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 the Sequential Pay Certificates shall be deemed to be
allocations of Realized Losses and Additional Trust Fund Expenses.
SECTION 4.05. Deemed Distributions on, and Allocations of Realized
Losses and Additional Trust Fund Expenses to, the REMIC I Regular Interests.
(a) All distributions of Distributable Certificate Interest, principal
and reimbursements of previously allocated Realized Losses and Additional Trust
Fund Expenses made in respect of each Class of Sequential Pay Certificates on
each Distribution Date pursuant to Section 4.01(a) shall be deemed to have first
been distributed from REMIC I to REMIC II in respect of the REMIC I Regular
Interest with the same alphabetical and/or numerical designation as such Class
of Certificates; all distributions of Distributable Certificate Interest made in
respect of the Class X Certificates on each Distribution Date pursuant to
Section 4.01(a), and allocable to Component X-A1, shall be deemed to have first
been distributed from REMIC I to REMIC II in respect of REMIC I Regular Interest
A-1; all distributions of Distributable Certificate Interest made in respect of
the Class X Certificates on each Distribution Date pursuant to Section 4.01(a),
and allocable to Component X-A2, shall be deemed to have first been distributed
from REMIC I to REMIC II in respect of REMIC I Regular Interest A-2; all
distributions of Distributable Certificate Interest made in respect of the Class
X Certificates on each Distribution Date pursuant to Section 4.01(a), and
allocable to Component X-A3, shall be deemed to have first been distributed from
REMIC I to REMIC II in respect of REMIC I Regular Interest A-3; all
distributions of Distributable Certificate Interest made in respect of the Class
X Certificates on each Distribution Date pursuant to Section 4.01(a), and
allocable to Component X-B, shall be deemed to have first been distributed from
REMIC I to REMIC II in respect of REMIC I Regular Interest B; all distributions
of Distributable Certificate Interest made in respect of the Class X
Certificates on each Distribution Date pursuant to Section 4.01(a), and
allocable to Component X-C, shall be deemed to have first been distributed from
REMIC I to REMIC II in respect of REMIC I Regular Interest C; all distributions
of Distributable Certificate Interest made in respect of the Class X
Certificates on each Distribution Date pursuant to Section 4.01(a), and
allocable to Component X-D, shall be deemed to have first been distributed from
REMIC I to REMIC II in respect of REMIC I Regular Interest D; all distributions
made in respect of the Class X Certificates on each Distribution Date pursuant
to Section 4.01(a), and allocable to Component X-E, shall be deemed to have
first been distributed from REMIC I to REMIC II in respect of REMIC I Regular
Interest E; all distributions of Distributable Certificate Interest made in
respect of the Class X Certificates on each Distribution Date pursuant to
Section 4.01(a), and allocable to Component X-F, shall be deemed to have first
been distributed from REMIC I to REMIC II in respect of REMIC I Regular Interest
F; all distributions of Distributable Certificate Interest made in respect of
the Class X Certificates on each Distribution Date pursuant to Section 4.01(a),
and allocable to Component X-G, shall be deemed to have first been distributed
from REMIC I to REMIC II in respect of REMIC I Regular Interest G; and all
distributions of Distributable Certificate Interest made in respect of the Class
X Certificates on
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each Distribution Date pursuant to Section 4.01(a), and allocable to Component
X-H, shall be deemed to have first been distributed from REMIC I to REMIC II in
respect of REMIC I Regular Interest H. In each such case, if such distribution
on any such Class of Certificates was a distribution of interest, of principal
or in reimbursement of any previously allocated Realized Losses and Additional
Trust Fund Expenses in respect of such Class of Certificates, then the
corresponding distribution deemed to be made on a REMIC I Regular Interest
pursuant to the preceding sentence shall be deemed to also be a distribution of
interest, of principal or in reimbursement of any previously allocated Realized
Losses and Additional Trust Fund Expenses, as the case may be, in respect of
such REMIC I Regular Interest.
(b) All distributions of Prepayment Premiums made in respect of the
respective Classes of REMIC II Certificates on each Distribution Date pursuant
to Section 4.01(a) shall be deemed to have first been distributed from REMIC I
to REMIC II in respect of the various REMIC I Regular Interests, pro rata based
upon the respective amounts of Uncertificated Distributable Interest in respect
of each such REMIC I Regular Interest for such Distribution Date.
(c) The actual distributions made by the Trustee on each Distribution
Date in respect of the REMIC II Certificates pursuant to Section 4.01(a), shall
be deemed to have been so made from the amounts deemed distributed in respect of
the REMIC I Regular Interests on such Distribution Date pursuant to this Section
4.05. Notwithstanding the deemed distributions on the REMIC I Regular Interests
described in this Section 4.05, actual distributions of funds from the
Distribution Account shall be made only in accordance with Section 4.01.
(d) Each Realized Loss and Additional Trust Fund Expense, if any, to
be allocated to each Class of Sequential Pay Certificates on any Distribution
Date shall be deemed to have first been allocated to the REMIC I Regular
Interest with the same alphabetical and/or numerical designation as such Class
of Certificates, with a corresponding reduction in the Uncertificated Principal
Balance of such REMIC I Regular Interest.
(e) Any portion of the Net Aggregate Prepayment Interest Shortfall, if
any, for any Distribution Date that is allocated in accordance with the
definition of "Distributable Certificate Interest" to: (i) the Class A-1
Certificates and/or Component X-A1 shall be deemed to have first been allocated
to REMIC I Regular Interest A-1; (ii) the Class A-2 Certificates and/or
Component X-A2 shall be deemed to have first been allocated to REMIC I Regular
Interest A-2; (iii) the Class A-3 Certificates and/or Component X-A3 shall be
deemed to have first been allocated to REMIC I Regular Interest A-3; (iv) the
Class B Certificates and/or Component X-B shall be deemed to have first been
allocated to REMIC I Regular Interest B; (v) the Class C Certificates and/or
Component X-C shall be deemed to have first been allocated to REMIC I Regular
Interest C; (vi) the Class D Certificates and/or Component X-D shall be deemed
to have first been allocated to REMIC I Regular Interest D; (vii) the Class E
Certificates and/or Component X-E shall be deemed to have first been allocated
to REMIC I Regular Interest E; (viii) the Class F Certificates and/or Component
X-F shall be deemed to have first been
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allocated to REMIC I Regular Interest F; (ix) the Class G Certificates and/or
Component X-G shall be deemed to have first been allocated to REMIC I Regular
Interest G; and (x) the Class H Certificates and/or Component X-H shall be
deemed to have first been allocated to REMIC I Regular Interest H. Any such
allocation of a portion of the Net Aggregate Prepayment Interest Shortfall, if
any, for any Distribution Date to any REMIC I Regular Interest will result in a
corresponding reduction in the Uncertificated Distributable Interest in respect
of such REMIC I Regular Interest for such Distribution Date.
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ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
(a) The Certificates will be substantially in the respective forms
annexed hereto as Exhibits A-1, A-2, A-3, A-4, A-5, A-6, A-7, A-8, A-9, A-10,
A-11, A-12 and A-13. The Certificates will be issuable in registered form only;
provided, however, that in accordance with Section 5.03 beneficial ownership
interests in the Registered Certificates and the Class X Certificates shall
initially be held and transferred through the book-entry facilities of the
Depository. The Certificates will be issuable in denominations corresponding to
initial Certificate Principal Balances or Certificate Notional Amounts, as the
case may be, as of the Closing Date of not less than $100,000 (or, with respect
to the Class X Certificate, $1,000,000 and any whole dollar denomination in
excess thereof; provided, however, that a single Certificate of each Class
thereof may be issued in a different denomination. Each Class of Residual
Certificates will be issuable only in a denomination representing the entire
Class.
(b) The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee in its capacity as trustee hereunder by an
authorized officer. Certificates bearing the manual or facsimile signatures of
individuals who were at any time the authorized officers of the Trustee shall be
entitled to all benefits under this Agreement, subject to the following
sentence, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such Certificates. No Certificate
shall be entitled to any benefit under this Agreement, or be valid for any
purpose, however, unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein executed by the
Certificate Registrar by manual signature, and such certificate of
authentication upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication;
provided that the Certificates issued on the Closing Date shall, in any event,
be dated the Closing Date.
SECTION 5.02. Registration of Transfer and Exchange of Certificates.
(a) At all times during the term of this Agreement, there shall be
maintained at the office of the Certificate Registrar a Certificate Register in
which, subject to such reasonable regulations as the Certificate Registrar may
prescribe, the Certificate Registrar shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.
The Trustee is hereby initially appointed (and hereby agrees to act in
accordance with the terms hereof) as Certificate Registrar for the purpose of
registering Certificates and transfers and exchanges of Certificates as herein
provided. For so long as the Trustee acts as Certificate Registrar, its
Corporate Trust Office shall constitute the office of the
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Certificate Registrar maintained for such purposes. The Trustee may appoint, by
a written instrument delivered to the Sponsor, the Master Servicer, the Special
Servicer and the REMIC Administrator, any other bank or trust company to act as
Certificate Registrar under such conditions as the predecessor Certificate
Registrar may prescribe, provided that the Trustee shall not be relieved of any
of its duties or responsibilities hereunder as Certificate Registrar by reason
of such appointment. If the Trustee resigns or is removed in accordance with the
terms hereof, the successor trustee shall immediately succeed to its
predecessor's duties as Certificate Registrar. The Sponsor, the Master Servicer,
the Special Servicer and the REMIC Administrator shall have the right to inspect
the Certificate Register or to obtain a copy thereof at all reasonable times,
and to rely conclusively upon a certificate of the Certificate Registrar as to
the information set forth in the Certificate Register.
If three or more Certificateholders (hereinafter referred to as
"applicants") apply in writing to the Trustee, and such application states that
the applicants desire to communicate with other Certificateholders 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, afford such applicants access during normal business hours to
the most recent list of Certificateholders held by the Trustee. If the Trustee
is no longer the Certificate Registrar and such a list is as of a date more than
90 days prior to the date of receipt of such applicants' request, the Trustee
shall promptly request from the Certificate Registrar a current list as provided
above, and shall afford such applicants access to such list promptly upon
receipt.
Every Certificateholder, by receiving and holding such list, agrees
with the Certificate Registrar and the Trustee that neither 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.
(b) No transfer of any Non-Registered Certificate shall be made unless
that transfer is made pursuant to an effective registration statement under the
Securities Act, and effective registration or qualification under applicable
state securities laws, or is made in a transaction which does not require such
registration or qualification. In the event a transfer of any Non-Registered
Certificate (other than in connection with the initial issuance thereof or the
initial transfer thereof by the Sponsor or any Affiliate of the Sponsor and
other than a NonRegistered Certificate which constitutes a Book-Entry
Certificate) is to be made without registration under the Securities Act, the
Certificate Registrar shall refuse to register such transfer unless it receives
the following: (i) a certificate from the Certificateholder desiring to effect
such transfer substantially in the form attached as Exhibit B-1 hereto; or (ii)
a certificate from the Certificateholder desiring to effect such transfer
substantially in the form attached as Exhibit B-2 hereto and a certificate from
such Certificateholder's prospective transferee substantially in the form
attached either as Exhibit B-3 or Exhibit B-4 hereto; or (iii) an opinion of
counsel satisfactory to the Certificate Registrar to the effect that such
transfer may be made without registration under the Securities Act, together
with the written certification(s) as to the
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facts surrounding such transfer from the Certificateholder desiring to effect
such transfer and/or such Certificateholder's prospective transferee on which
such opinion of counsel is based. If a transfer of any interest in any
Non-Registered Certificate that constitutes a Book-Entry Certificate (such as a
Class X Certificate) is to be made without registration under the Securities Act
(other than in connection with the initial issuance thereof or a transfer of any
interest therein by the Sponsor 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 B-5 hereto or as Exhibit B-6 hereto; or (ii) an
opinion of counsel to the effect that such transfer may be made without
registration under the Securities Act (which opinion of counsel shall not be an
expense of the Trust Fund or of the Sponsor, the Mortgage Loan Seller, the
Master Servicer, the Special Servicer, the Trustee, the Fiscal Agent, the REMIC
Administrator or the Certificate Registrar in their respective capacities as
such). None of the Sponsor, the Trustee or the Certificate Registrar is
obligated to register or qualify any Class of Non-Registered Certificates under
the Securities Act or any other securities law or to take any action not
otherwise required under this Agreement to permit the transfer of any
Non-Registered Certificate without registration or qualification. Any Holder or
Certificate Owner of a Non-Registered Certificate desiring to effect such a
transfer shall, and does hereby agree to, indemnify the Sponsor, the Trustee,
the Fiscal Agent, the REMIC Administrator and the Certificate Registrar against
any liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.
(c) No transfer of any Certificate or any interest therein shall be
made under any circumstances (i) to any employee benefit plan or other
retirement arrangement, including individual retirement accounts and annuities,
Keogh plans and collective investment funds and separate accounts in which such
plans, accounts or arrangements are invested, that is subject to ERISA or the
Code (each, a "Plan"), or (ii) to any Person who is directly or indirectly
purchasing such Certificate or interest therein on behalf of, as named fiduciary
of or as trustee of a Plan, or with "plan assets" within the meaning of the
Department of Labor regulation promulgated at 29 C.F.R. ss.2510.3-101, unless:
(x) in the case of a Senior Certificate or interest therein being acquired by or
on behalf of a Plan in reliance on Prohibited Transaction Exemption ("PTE")
90-88 or PTE 93-31, such Plan, if acquiring a Class A Certificate, shall be
deemed to have certified that it meets the conditions set forth PTE 90-88 or PTE
93-31, including those set forth in (x)(1) and (x)(2) below, and such Plan, if
acquiring a Class X Certificate, shall certify in writing to the Certificate
Owner that is transferring such Class X Certificate or, if Definitive
Certificates have been issued in respect of the Class X Certificates, to the
Certificate Registrar, that such Plan meets the conditions set forth PTE 90-88
or PTE 93-31, including that the Plan (1) is an accredited investor as defined
in Rule 501(a)(1) of Regulation D of the Securities Act, (2) is not sponsored
(within the meaning of Section 3(16)(B) of ERISA) by the Trustee, the Fiscal
Agent, the Sponsor, the Mortgage Loan Seller, the Additional Warranting Party,
any Exemption-Favored Party, the Master Servicer, the Special Servicer, the
REMIC Administrator, any Sub-Servicer or any Mortgagor with respect to Mortgage
Loans constituting more than 5% of the aggregate unamortized principal balance
of the Mortgage Loans determined on the date of the initial issuance of the
Certificates, or by any Affiliate of any such Person, and (3) agrees
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that it will obtain from each of its Transferees (A) a written representation
that such Transferee, if a Plan, satisfies the requirements of the immediately
preceding clauses (x)(1) and (x)(2), together with a written agreement that such
Transferee will obtain from each of its Transferees that are Plans a similar
written representation regarding satisfaction of the requirements of the
immediately preceding clauses (x)(1) and (x)(2) and a written agreement
substantially the same as that described in this clause (x)(3); or (y) in the
case of a Class A, Class X, Class B, Class C, Class D or Class E Certificate
that constitutes a Book-Entry Certificate, each Person who is directly or
indirectly purchasing such Certificate or interest therein shall be deemed to
have certified that the purchase, holding and transfer of such Certificate or
interest therein is exempt from the prohibited transaction provisions of Section
406 of ERISA and Section 4975 of the Code under Sections I and III of Prohibited
Transaction Class Exemption ("PTCE") 95-60; or (z) in the case of a Subordinated
Certificate that is held as a Definitive Certificate, the prospective Transferee
provides the Certificate Registrar with either: (1) a certification of facts and
an opinion of counsel, obtained at the expense of such potential transferee,
which establish to the satisfaction of the Certificate Registrar that such
transfer will not result in a violation of Section 406 of ERISA or Section 4975
of the Code, will not result in the imposition of an excise tax under Section
4975 of the Code and will not subject the Trustee, Master Servicer or Special
Servicer to any obligation in addition to those undertaken in this Agreement, or
(2) a certification that the purchase, holding and transfer of such Certificate
or interest therein is exempt from the prohibited transaction provisions of
Section 406 of ERISA and Section 4975 of the Code under Sections I and III of
PTCE 95-60. Each Person who acquires any Certificate or interest therein (unless
it shall have delivered the opinion of counsel and/or one of the certifications
referred to in the preceding sentence) shall be deemed to have certified that:
(i) it is neither a Plan nor any Person who is directly or indirectly purchasing
such Certificate or interest therein on behalf of, as named fiduciary of, as
trustee of, or with assets of a Plan, or (ii) alternatively, in the case of a
Book-Entry Certificate or interest therein, that the purchase, holding and
transfer of such Certificate or interest therein is exempt from the prohibited
transaction provisions of Section 406 of ERISA and Section 4975 of the Code
under PTE 90-88, PTE 93-31 or Sections I and III of PTCE 95-60.
(d) (i) Each Person who has or who acquires any Ownership Interest in
a Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably authorized the Trustee under clause (ii)(A) below to deliver
payments to a Person other than such Person and to have irrevocably authorized
the Trustee under clause (ii)(B) below to negotiate the terms of any mandatory
sale and to execute all instruments of Transfer and to do all other things
necessary in connection with any such sale. The rights of each Person acquiring
any Ownership Interest in a Residual Certificate are expressly subject to the
following provisions:
(A) Each Person holding or acquiring any Ownership Interest
in a Residual Certificate shall be a Permitted Transferee and a
United States Person and shall promptly notify the Master
Servicer, the Trustee and the REMIC Administrator of any change
or impending change in its status as a Permitted Transferee or
United States Person.
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(B) In connection with any proposed Transfer of any
Ownership Interest in a Residual Certificate (other than in
connection with the initial issuance thereof or the transfer
thereof among the Sponsor and its Affiliates), the Certificate
Registrar shall require delivery to it, and shall not register
the Transfer of any Residual Certificate until its receipt of, an
affidavit and agreement substantially in the form attached hereto
as Exhibit C-1 (a "Transfer Affidavit and Agreement") from the
proposed Transferee, in form and substance satisfactory to the
Certificate Registrar, representing and warranting, among other
things, that such Transferee is a Permitted Transferee, that it
is not acquiring its Ownership Interest in the Residual
Certificate that is the subject of the proposed Transfer as a
nominee, trustee or agent for any Person that is not a Permitted
Transferee, that for so long as it retains its Ownership Interest
in a Residual Certificate it will endeavor to remain a Permitted
Transferee, that it is a United States Person and that it has
reviewed the provisions of this Section 5.02(d) and agrees to be
bound by them.
(C) Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee under clause (B) above, if the
Certificate Registrar has actual knowledge that the proposed
Transferee is not both a Permitted Transferee and a United States
Person, no Transfer of an Ownership Interest in a Residual
Certificate to such proposed Transferee shall be effected.
(D) Except in connection with the initial issuance of the
Residual Certificates or any transfer thereof among the Sponsor
and its Affiliates, each Person holding or acquiring any
Ownership Interest in a Residual Certificate shall agree (1) to
require a Transfer Affidavit and Agreement from any prospective
Transferee to whom such Person attempts to transfer its Ownership
Interest in such Residual Certificate and (2) not to transfer its
Ownership Interest in such Residual Certificate unless it
provides to the Certificate Registrar a certificate substantially
in the form attached hereto as Exhibit C-2 stating that, among
other things, it has no actual knowledge that such prospective
Transferee is not a Permitted Transferee and a United States
Person.
(E) Each Person holding or acquiring an Ownership Interest
in a Residual Certificate, by purchasing an Ownership Interest in
such Certificate, agrees to give the Trustee and the REMIC
Administrator written notice that it is a "pass-through interest
holder" within the meaning of temporary Treasury regulation
Section 1.67-3T(a)(2)(i)(A) immediately upon acquiring an
Ownership Interest in a Residual Certificate, if it is, or is
holding an Ownership Interest in a Residual Certificate on behalf
of, a "pass-through interest holder".
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(ii) (A) If any purported Transferee shall become a Holder of a
Residual Certificate in violation of the provisions of this Section
5.02(d), then the last preceding Holder of such Residual Certificate
that was in compliance with the provisions of this Section 5.02(d)
shall be restored, to the extent permitted by law, to all rights as
Holder thereof retroactive to the date of registration of such
Transfer of such Residual Certificate. None of the Trustee, the Master
Servicer, the Special Servicer, the REMIC Administrator or the
Certificate Registrar shall be under any liability to any Person for
any registration of Transfer of a Residual Certificate that is in fact
not permitted by this Section 5.02(d) 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 5.02(d) and to the extent that the retroactive
restoration of the rights of the Holder of such Residual
Certificate as described in clause (ii)(A) above shall be
invalid, illegal or unenforceable, then the Trustee shall have
the right, but not the obligation, 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 such Residual Certificate in
accordance with the instructions of the Trustee. Such purchaser
may be the Trustee itself or any Affiliate of the Trustee. The
proceeds of such sale, net of the commissions (which may include
commissions payable to the Trustee or its Affiliates), expenses
and taxes due, if any, will be remitted by the Trustee to such
purported Transferee. The terms and conditions of any sale under
this clause (ii)(B) shall be determined in the sole discretion of
the Trustee, and the Trustee shall not be liable to any Person
having an Ownership Interest in a Residual Certificate as a
result of its exercise of such discretion. In establishing such
terms and conditions, however, the Trustee may consult with a
representative of the REMIC Administrator, and the REMIC
Administrator shall make available such representative upon
reasonable advance notice.
(iii) The REMIC Administrator shall make available to the
Internal Revenue Service and those Persons specified by the REMIC
Provisions all information necessary to compute any tax imposed (A) as
a result of the Transfer of an Ownership Interest in a Residual
Certificate to any Person who is not a Permitted Transferee or a
United States Person, including the information described in Treasury
regulations sections 1.860D-1(b)(5) and 1.860E-2(a)(5) with respect to
the "excess inclusions" of such Residual Certificate and (B) as a
result of any regulated investment company, real estate investment
trust, common trust fund, partnership, trust, estate or organization
described in Section 1381 of the Code that holds an Ownership Interest
in a Residual Certificate having as among its record holders at any
time any Person which is not a Permitted Transferee.
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The Person holding such Ownership Interest shall be responsible for
the reasonable compensation of the REMIC Administrator for providing
such information.
(iv) The provisions of this Section 5.02(d) set forth prior to
this subsection (iv) may be modified, added to or eliminated, provided
that there shall have been delivered to the Trustee and the REMIC
Administrator the following:
(A) written notification from each Rating Agency to the
effect that the modification of, addition to or elimination of
such provisions will not cause such Rating Agency to downgrade
its then-current rating of any Class of Certificates; and
(B) an Opinion of Counsel, in form and substance
satisfactory to the Trustee and the REMIC Administrator, to the
effect that such modification of, addition to or elimination of
such provisions will not cause either REMIC I or REMIC II to (x)
cease to qualify as a REMIC or (y) be subject to an entity-level
tax caused by the Transfer of any Residual Certificate to a
Person which is not a Permitted Transferee and a United States
Person, or cause a Person other than the prospective Transferee
to be subject to a REMIC-related tax caused by the Transfer of a
Residual Certificate to a Person which is not a Permitted
Transferee and a United States Person. Such Opinion of Counsel
shall not be at the expense of the Trust Fund, the Trustee or the
REMIC Administrator.
(e) Subject to the preceding subsections, upon surrender for
registration of transfer of any Certificate at the offices of the Certificate
Registrar maintained for such purpose, the Trustee shall execute and the
Certificate Registrar shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of authorized
denominations of the same Class of a like aggregate Percentage Interest.
(f) At the option of any Holder, its Certificates may be exchanged for
other Certificates of authorized denominations of the same Class of a like
aggregate Percentage Interest, upon surrender of the Certificates to be
exchanged at the offices of the Certificate Registrar maintained for such
purpose. Whenever any Certificates are so surrendered for exchange, the Trustee
shall execute and the Certificate Registrar shall authenticate and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive.
(g) Every Certificate presented or surrendered for transfer or
exchange shall (if so required by the Certificate Registrar) be duly endorsed
by, or be accompanied by a written instrument of transfer in the form
satisfactory to the Certificate Registrar duly executed by, the Holder thereof
or his attorney duly authorized in writing.
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(h) No service charge shall be imposed for any transfer or exchange of
Certificates, but the Trustee or the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
(i) Subsequent to the initial issuance of the Certificates, the
Trustee shall be responsible for the preparation of physical Certificates in
connection with any transfer or exchange; provided that the correct form of
Certificate of each Class shall be provided by the Sponsor to the Trustee on
diskette on or about the Closing Date. All Certificates surrendered for transfer
and exchange shall be physically canceled by the Certificate Registrar, and the
Certificate Registrar shall hold or destroy such canceled Certificates in
accordance with its standard procedures.
(j) The Certificate Registrar shall be required to provide the Sponsor
and the REMIC Administrator with an updated copy of the Certificate Register on
or about January 1 of each year, commencing January 1, 1998, and shall be
required to provide the Sponsor, the Master Servicer, the Special Servicer or
the REMIC Administrator with an updated copy of the Certificate Register at
other times promptly upon written request therefor.
SECTION 5.03 Book-Entry Certificates.
(a) The Registered Certificates and the Class X Certificates shall, in
the case of each Class thereof, initially be issued as one or more Certificates
registered in the name of the Depository or its nominee and, except as provided
in subsection (c) below, transfer of such Certificates may not be registered by
the Certificate Registrar unless such transfer is to a successor Depository that
agrees to hold such Certificates for the respective Certificate Owners with
Ownership Interests therein. Such Certificate Owners shall hold and transfer
their respective Ownership Interests in and to such Certificates through the
book-entry facilities of the Depository and, except as provided in subsection
(c) below, shall not be entitled to definitive, fully registered Certificates
("Definitive Certificates") in respect of such Ownership Interests. All
transfers by Certificate Owners of their respective Ownership Interests in the
Book-Entry Certificates shall be made in accordance with the procedures
established by the Depository Participant or brokerage firm representing each
such Certificate Owner. Each Depository Participant shall only transfer the
Ownership Interests in the Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in accordance with
the Depository's normal procedures. Neither the Certificate Registrar nor the
Trustee shall have any responsibility to monitor or restrict the transfer of
Ownership Interests in Certificates through the book-entry facilities of the
Depository.
(b) The Sponsor, the Mortgage Loan Seller, the Trustee, the Fiscal
Agent, the Master Servicer, the Special Servicer, the REMIC Administrator and
the Certificate Registrar may for all purposes, including the making of payments
due on the Book-Entry Certificates, deal with the Depository as the authorized
representative of the Certificate Owners with respect to such Certificates for
the purposes of exercising the rights of Certificateholders
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hereunder. The rights of Certificate Owners with respect to the Book-Entry
Certificates shall be limited to those established by law and agreements between
such Certificate Owners and the Depository Participants and brokerage firms
representing such Certificate Owners. Multiple requests and directions from, and
votes of, the Depository as Holder of the Book-Entry Certificates with respect
to any particular matter shall not be deemed inconsistent if they are made with
respect to different Certificate Owners. The Trustee may establish a reasonable
record date in connection with solicitations of consents from or voting by
Certificateholders and shall give notice to the Depository of such record date.
If any party hereto requests from the Depository a list of the Depository
Participants in respect of any Class or Classes of the Book- Entry Certificates,
the cost thereof shall be borne by the party on whose behalf such request is
made (but in no event shall any such cost be borne by the Trustee).
(c) If (i)(A) the Sponsor advises the Trustee and the Certificate
Registrar in writing that the Depository is no longer willing or able to
properly discharge its responsibilities with respect to any Class of the
Book-Entry Certificates, and (B) the Sponsor is unable to locate a qualified
successor, or (ii) the Sponsor at its option advises the Trustee and the
Certificate Registrar in writing that it elects to terminate the book-entry
system through the Depository with respect to any Class of the Book-Entry
Certificates, the Certificate Registrar shall notify all affected Certificate
Owners, through the Depository, of the occurrence of any such event and of the
availability of Definitive Certificates to such Certificate Owners requesting
the same. Upon surrender to the Certificate Registrar of any Class of the
Book-Entry Certificates by the Depository, accompanied by registration
instructions for registration of transfer, the Trustee shall execute, and the
Certificate Registrar shall authenticate and deliver, the appropriate Definitive
Certificates to the Certificate Owners identified in such instructions. None of
the Sponsor, the Mortgage Loan Seller, the Master Servicer, the Special
Servicer, the Trustee, the Fiscal Agent, the REMIC Administrator or the
Certificate Registrar 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 for purposes of
evidencing ownership of any Class of Registered Certificates, the registered
holders of such Definitive Certificates shall be recognized as
Certificateholders hereunder and, accordingly, shall be entitled directly to
receive payments on, to exercise Voting Rights with respect to, and to transfer
and exchange such Definitive Certificates.
SECTION 5.04. Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Certificate
Registrar, or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate, and (ii) there is delivered
to the Trustee and the Certificate Registrar such security or indemnity as may
reasonably be required by them to save each of them harmless, then, in the
absence of actual notice to the Trustee or the Certificate Registrar that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute and the Certificate Registrar shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of the same Class and like Percentage Interest.
Upon the issuance of any new Certificate under this Section, the Trustee and the
Certificate Registrar may
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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 and the Certificate Registrar) connected
therewith. Any replacement Certificate issued pursuant to this Section shall
constitute complete and indefeasible evidence of ownership in the applicable
REMIC created hereunder, as if originally issued, whether or not the lost,
stolen or destroyed Certificate shall be found at any time.
SECTION 5.05. Persons Deemed Owners.
Prior to due presentment for registration of transfer, the Sponsor,
the Mortgage Loan Seller, the Master Servicer, the Special Servicer, the
Trustee, the Fiscal Agent, the REMIC Administrator, the Certificate Registrar
and any agents of any of them may treat the person in whose name any Certificate
is registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 4.01 and for all other purposes whatsoever,
and none of the Sponsor, the Mortgage Loan Seller, the Master Servicer, the
Special Servicer, the Trustee, the Fiscal Agent, the REMIC Administrator, the
Certificate Registrar or any agent of any of them shall be affected by notice to
the contrary.
SECTION 5.06 Certification by Certificate Owners.
(a) Each Certificate Owner is hereby deemed by virtue of its
acquisition of an Ownership Interest in the Book-Entry Certificates to agree to
comply with the transfer requirements of Sections 5.02(b) and 5.02(c).
(b) To the extent that under the terms of this Agreement, it is
necessary to determine whether any Person is a Certificate Owner, the Trustee
shall make such determination based on a certificate of such Person which shall
specify, in reasonable detail satisfactory to the Trustee, the Class and
Certificate Principal Balance or Certificate Notional Amount, as the case may
be, of the Book-Entry Certificate beneficially owned, the value of such Person's
interest in such Certificate and any intermediaries through which such Person's
Ownership Interest in such Book-Entry Certificate is held; provided, however,
that the Trustee shall not knowingly recognize such Person as a Certificate
Owner if such Person, to the knowledge of a Responsible Officer of the Trustee,
acquired its Ownership Interest in a Book-Entry Certificate in violation of
Section 5.02(b) and/or Section 5.02(c), or if such Person's certification that
it is a Certificate Owner is in direct conflict with information obtained by the
Trustee from the Depository, Depository Participants, and/or indirect
participating brokerage firms for which a Depository Participant acts as agent,
with respect to the identity of a Certificate Owner. The Trustee shall exercise
its reasonable discretion in making any determination under this Section 5.06(b)
and shall afford any Person providing information with respect to its beneficial
ownership of any Certificates an opportunity to resolve any discrepancies
between the information provided and any other information available to the
Trustee.
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ARTICLE VI
THE SPONSOR, THE MORTGAGE LOAN SELLER,
THE ADDITIONAL WARRANTING PARTY, THE MASTER SERVICER,
THE SPECIAL SERVICER AND THE REMIC ADMINISTRATOR
SECTION 6.01. Liability of the Sponsor, the Mortgage Loan Seller, the
Additional Warranting Party, the Master Servicer, the Special Servicer and the
REMIC Administrator.
The Sponsor, the Mortgage Loan Seller, the Additional Warranting
Party, the Master Servicer, the Special Servicer and the REMIC Administrator
shall be liable in accordance herewith only to the extent of the respective
obligations specifically imposed upon and undertaken by the Sponsor, the
Mortgage Loan Seller, the Additional Warranting Party, the Master Servicer, the
Special Servicer and the REMIC Administrator herein.
SECTION 6.02. Merger, Consolidation or Conversion of the Sponsor, the
Mortgage Loan Seller, the Additional Warranting Party, the Master Servicer, the
Special Servicer or the REMIC Administrator.
Subject to the following paragraph, the Sponsor, the Mortgage Loan
Seller, the Additional Warranting Party, the Master Servicer, the Special
Servicer and the REMIC Administrator each will keep in full effect its
existence, rights and franchises as a corporation or other business organization
under the laws of the jurisdiction of its organization, and each will obtain and
preserve its qualification to do business as a foreign corporation or otherwise
in each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, the Certificates or
any of the Mortgage Loans and to perform its respective duties under this
Agreement.
The Sponsor, the Mortgage Loan Seller, the Additional Warranting
Party, the Master Servicer, the Special Servicer and the REMIC Administrator
each may be merged or consolidated with or into any Person, or transfer all or
substantially all of its assets (which, as to the Master Servicer and the
Special Servicer, may be limited to all or substantially all of its assets
relating to the business of mortgage loan servicing) to any Person, in which
case any Person resulting from any merger or consolidation to which the Sponsor,
the Mortgage Loan Seller, the Additional Warranting Party, the Master Servicer,
the Special Servicer or the REMIC Administrator shall be a party, or any Person
succeeding to the business of the Sponsor, the Mortgage Loan Seller, the
Additional Warranting Party, the Master Servicer, the Special Servicer or the
REMIC Administrator, shall be the successor of the Sponsor, the Mortgage Loan
Seller, the Additional Warranting Party, the Master Servicer, the Special
Servicer or the REMIC Administrator, 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, anything herein to the contrary notwithstanding; provided,
however, that no successor or surviving Person shall succeed to the
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rights of the Master Servicer, the Special Servicer, the Mortgage Loan Seller or
the Additional Warranting Party unless such succession will not result in any
withdrawal, downgrade or qualification of the rating then assigned by either
Rating Agency to any Class of Certificates (as confirmed in writing).
SECTION 6.03. Limitation on Liability of the Sponsor, the Master
Servicer, the Special Servicer, the REMIC Administrator and Others.
None of the Sponsor, the Master Servicer, the Special Servicer, the
REMIC Administrator or any director, officer, employee or agent of any of the
foregoing shall be under any liability to the Trust Fund or the
Certificateholders for any action taken, or not taken, in good faith pursuant to
this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Sponsor, the Master Servicer, the Special
Servicer, the REMIC Administrator or any such other Person against any breach of
a representation or warranty made herein, or against any expense or liability
specifically required to be borne thereby pursuant to the terms hereof, or
against any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or negligence in the performance of obligations or duties
hereunder, or by reason of reckless disregard of such obligations and duties.
The Sponsor, the Master Servicer, the Special Servicer, the REMIC Administrator
and any director, officer, employee or agent of any of the foregoing may rely in
good faith on any document of any kind which, prima facie, is properly executed
and submitted by any Person respecting any matters arising hereunder. The
Sponsor, the Master Servicer, the Special Servicer, the REMIC Administrator and
any director, officer, employee or agent of any of the foregoing shall be
indemnified and held harmless by the Trust Fund against any loss, liability or
expense incurred in connection with any legal action relating to this Agreement,
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, including, without limitation, Section 10.01(h); (ii) which
constitutes a Servicing Advance (and is otherwise specifically reimbursable
hereunder); (iii) which would otherwise constitute a Servicing Advance but for
its failure to be customary, reasonable and necessary; (iv) which is
specifically excluded from the definition of "Servicing Advance" by the terms of
the proviso thereto; or (v) which was incurred in connection with claims against
such party resulting from (A) any breach of a representation or warranty made
herein by such party, (B) willful misfeasance, bad faith or negligence in the
performance of obligations or duties hereunder by such party, or from reckless
disregard of such obligations or duties, or (C) any violation by such party of
any state or federal securities law. None of the Sponsor, the Master Servicer,
the Special Servicer or the REMIC Administrator shall be under any obligation to
appear in, prosecute or defend any legal action unless such action is related to
its respective duties under this Agreement and, except in the case of a legal
action contemplated by Section 3.22, in its opinion does not involve it in any
ultimate expense or liability; provided, however, that the Sponsor, the Master
Servicer, the Special Servicer or the REMIC Administrator may in its discretion
undertake any such action which it may deem necessary or desirable with respect
to the enforcement and/or protection of the rights and duties of the parties
hereto and the interests of the Certificateholders hereunder. In such event, the
legal expenses and costs of such action, and any liability resulting therefrom,
shall be expenses,
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costs and liabilities of the Trust Fund, and the Sponsor, the Master Servicer,
the Special Servicer and the REMIC Administrator each shall be entitled to the
direct payment of such expenses or to be reimbursed therefor from the
Certificate Account as provided in Section 3.05(a).
SECTION 6.04. Master Servicer, Special Servicer and REMIC
Administrator Not to Resign.
None of the Master Servicer, the Special Servicer or the REMIC
Administrator shall be permitted to resign from the obligations and duties
hereby imposed on it, except (i) upon the appointment of, and the acceptance of
such appointment by, a successor thereto which is reasonably acceptable to the
Trustee and the receipt by the Trustee of written confirmation from each Rating
Agency that such resignation and appointment will not result in the downgrade,
qualification or withdrawal of the rating then assigned by either Rating Agency
to any Class of Certificates, or (ii) upon determination that such obligations
and 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 of the Master Servicer, Special Servicer or REMIC
Administrator, as the case may be, so causing such a conflict being of a type
and nature carried on by the Master Servicer, Special Servicer or REMIC
Administrator, as the case may be, at the date of this Agreement. Any such
determination of the nature described in clause (ii) of the preceding sentence
permitting the resignation of the Master Servicer, the Special Servicer or the
REMIC Administrator, as the case may be, shall be evidenced by an Opinion of
Counsel to such effect which shall be rendered by Independent counsel and
addressed and delivered to the Trustee and the Rating Agencies. No such
resignation for either reason shall become effective until the Trustee or other
successor shall have assumed the responsibilities and obligations of the
resigning party hereunder.
Consistent with the foregoing, none of the Master Servicer, the
Special Servicer or the REMIC Administrator shall be permitted, except as
expressly provided herein, to assign or transfer any of its rights, benefits or
privileges hereunder to any other Person, or delegate to or subcontract with, or
authorize or appoint any other Person to perform any of the duties, covenants or
obligations to be performed by it hereunder. If, pursuant to any provision
hereof, the duties of the Master Servicer, the Special Servicer or the REMIC
Administrator are transferred to a successor thereto, then, subject to Section
3.22, the entire amount of compensation payable to the Master Servicer, the
Special Servicer or the REMIC Administrator, as the case may be, pursuant hereto
shall thereafter be payable to such successor.
SECTION 6.05. Rights of the Sponsor and the Trustee in Respect of the
Master Servicer, the Special Servicer and the REMIC Administrator.
The Master Servicer, the Special Servicer and the REMIC Administrator
each shall afford the Sponsor and the Trustee, upon reasonable notice, during
normal business hours access to all records maintained by the Master Servicer,
the Special Servicer or the REMIC Administrator, as the case may be, in respect
of its rights and obligations hereunder and access
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to such of its officers as are responsible for such obligations. Upon reasonable
request, the Master Servicer, the Special Servicer and the REMIC Administrator
each shall furnish the Sponsor and the Trustee with its most recent financial
statements and such other information as it possesses, and which it is not
prohibited by law or, to the extent applicable, binding obligations to third
parties with respect to confidentiality from disclosing, regarding its business,
affairs, property and condition, financial or otherwise. The Sponsor may, but is
not obligated to, enforce the obligations of the Master Servicer, the Special
Servicer and the REMIC Administrator hereunder and may, but is not obligated to,
perform, or cause a designee to perform, any defaulted obligation of the Master
Servicer, the Special Servicer or the REMIC Administrator hereunder or, in
connection with a default thereby, exercise the rights of the Master Servicer,
the Special Servicer or the REMIC Administrator hereunder; provided, however,
that none of the Master Servicer, the Special Servicer or the REMIC
Administrator shall be relieved of any of its obligations hereunder by virtue of
such performance by the Sponsor or its designee. The Sponsor shall not have any
responsibility or liability for any action or failure to act by the Master
Servicer, the Special Servicer or the REMIC Administrator and is not obligated
to supervise the performance of the Master Servicer, the Special Servicer or the
REMIC Administrator under this Agreement or otherwise.
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ARTICLE VII
DEFAULT
SECTION 7.01. Events of Default.
(a) "Event of Default", wherever used herein, unless the context
otherwise requires, means any one of the following events:
(i) any failure by the Master Servicer to deposit into the Certificate
Account any amount required to be so deposited under this Agreement which
continues unremedied for two Business Days following the date on which such
deposit was first required to be made, or any failure by the Master
Servicer to deposit into, or to remit to the Trustee for deposit into, the
Distribution Account on any Master Servicer Remittance Date, the full
amount of any Master Servicer Remittance Amount required to be so deposited
or remitted under this Agreement on such date; or
(ii) any failure by the Special Servicer to deposit into, or to remit
to the Master Servicer for deposit into, the Certificate Account or the REO
Account any amount required to be so deposited or remitted under this
Agreement which continues unremedied for two Business Days following the
date on which such deposit or remittance was first required to be made; or
(iii) any failure by the Master Servicer to remit to the Trustee for
deposit into the Distribution Account, on any Master Servicer Remittance
Date, the full amount of P&I Advances required to be made on such date; or
(iv) 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 which continues unremedied for a period of one Business Day
following the date on which notice shall have been given to the Master
Servicer or the Special Servicer, as the case may be, by the Trustee as
provided in Section 3.11(e); or
(v) 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 thereof 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 any other party hereto, or to the Master Servicer or the Special
Servicer, as the case may be, with a copy to each other party hereto, by
the Holders of Certificates entitled to at least 25% of the Voting Rights;
or
(vi) any failure on the part of the REMIC Administrator duly to
observe or perform in any material respect any of the covenants or
agreements thereof contained in
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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 REMIC Administrator by any other
party hereto, or to the REMIC Administrator, with a copy to each other
party hereto, by the Holders of Certificates entitled to at least 25% of
the Voting Rights; or
(vii) any breach on the part of the Master Servicer, the Special
Servicer or the REMIC Administrator of any representation or warranty
thereof 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, the Special Servicer or the REMIC Administrator, as the
case may be, by any other party hereto, or to the Master Servicer, the
Special Servicer or the REMIC Administrator, as the case may be, with a
copy to each other party hereto, by the Holders of Certificates entitled to
at least 25% of the Voting Rights; or
(viii) 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,
marshalling 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, the Special Servicer or the REMIC Administrator and
such decree or order shall have remained in force undischarged or unstayed
for a period of 60 days; or
(ix) the Master Servicer, the Special Servicer or the REMIC
Administrator shall consent to the appointment of a conservator, receiver,
liquidator, trustee or similar official in any bankruptcy, insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to it or of or relating to all or substantially
all of its property; or
(x) the Master Servicer, the Special Servicer or the REMIC
Administrator 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
(xi) 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 a downgrade, qualification or withdrawal
of any rating then assigned by such Rating Agency to any Class of
Certificates.
Each Event of Default listed above as items (iv) - (xi) shall
constitute an Event of Default only with respect to the relevant party; provided
that if a single entity acts or any two or more
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Affiliates act as Master Servicer, Special Servicer and REMIC Administrator, or
in any two or more of the foregoing capacities, an Event of Default in one
capacity will constitute an Event of Default in each capacity.
(b) If any Event of Default with respect to the Master Servicer or the
Special Servicer (in either case, for purposes of this Section 7.01(b), the
"Defaulting Party") shall occur and be continuing, then, and in each and every
such case, so long as the Event of Default shall not have been remedied, the
Sponsor or the Trustee may, and at the written direction of the Holders of
Certificates entitled to at least 51% of the Voting Rights or if the relevant
Event of Default is the one described in clause (xi) of subsection (a) above,
the Trustee shall, terminate, by notice in writing to the Defaulting Party (with
a copy of such notice to each other party hereto), all of the rights and
obligations (accruing from and after such notice) of the Defaulting Party under
this Agreement and in and to the Mortgage Loans and the proceeds thereof. 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 agree that, if it is terminated pursuant to this Section 7.01(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 reasonably requested thereby to enable the Trustee 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 for administration by it of all
cash amounts which shall at the time be or should have been credited by the
Master Servicer to the Certificate Account, the Distribution Account, any
Servicing Account or any Reserve Account (if it is the Defaulting Party) or by
the Special Servicer to the REO Account, the Certificate Account, any Servicing
Account or any Reserve Account (if it is the Defaulting Party) or thereafter be
received with respect to the Mortgage Loans and any REO Properties (provided,
however, that the Master Servicer and the Special Servicer each shall, if
terminated pursuant to this Section 7.01(b), continue to be obligated for or
entitled to receive all amounts accrued or owing by or to it under this
Agreement on or prior to the date of such termination, whether in respect of
Advances or otherwise, and it and its directors, officers, employees and agents
shall continue to be entitled to the benefits of Section 6.03 notwithstanding
any such termination).
(c) If any Event of Default with respect to the REMIC Administrator
shall occur and be continuing, then, and in each and every such case, so long as
the Event of Default shall not have been remedied, the Sponsor or the Trustee
may, and at the written direction of the Holders
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of Certificates entitled to at least 51% of the Voting Rights, the Trustee (or,
if the Trustee is also the REMIC Administrator, the Master Servicer) shall,
terminate, by notice in writing to the REMIC Administrator (with a copy to each
of the other parties hereto), all of the rights and obligations of the REMIC
Administrator under this Agreement. From and after the receipt by the REMIC
Administrator of such written notice (or if the Trustee is also the REMIC
Administrator, from and after such time as another successor appointed as
contemplated by Section 7.02 accepts such appointment), all authority and power
of the REMIC Administrator under this Agreement shall pass to and be vested in
the Trustee (or such other successor) pursuant to and under this Section, and,
without limitation, the Trustee (or such other successor) is hereby authorized
and empowered to execute and deliver, on behalf of and at the expense of the
REMIC Administrator, 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. The REMIC
Administrator agrees promptly (and in any event no later than ten Business Days
subsequent to its receipt of the notice of the termination) to provide the
Trustee (or, if the Trustee is also the REMIC Administrator, such other
successor appointed as contemplated by Section 7.02) with all documents and
records requested thereby to enable the Trustee (or such other successor) to
assume the REMIC Administrator's functions hereunder, and to cooperate with the
Trustee (or such other successor) in effecting the termination of the REMIC
Administrator's responsibilities and rights hereunder (provided, however, that
the REMIC Administrator shall continue to be obligated for or entitled to
receive all amounts accrued or owing by or to it under this Agreement on or
prior to the date of such termination, and it and its directors, officers,
employees and agents shall continue to be entitled to the benefits of Section
6.03 notwithstanding any such termination).
SECTION 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer, the Special Servicer or the
REMIC Administrator resigns pursuant to clause (ii) of the first sentence of
Section 6.04 or receives a notice of termination pursuant to Section 7.01, the
Trustee shall be the successor in all respects to the Master Servicer, the
Special Servicer or (unless it has also been acting as such) the REMIC
Administrator, as the case may be, in its capacity as such under this Agreement
and the transactions set forth or provided for herein and shall be subject to
all the responsibilities, duties and liabilities relating thereto and arising
thereafter placed on the Master Servicer, the Special Servicer or the REMIC
Administrator, as the case may be, by the terms and provisions hereof,
including, without limitation, if the Master Servicer is the resigning or
terminated party, 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, the Special Servicer's or the REMIC Administrator's, as
the case may be, failure to cooperate or to provide information or monies
required by Section 7.01 shall not be considered a default by the Trustee
hereunder. Neither the Trustee nor any other successor shall be liable for any
of the representations and warranties of the resigning or terminated party or
for any losses incurred by the resigning or terminated party pursuant to Section
3.06 hereunder nor shall the Trustee nor any other successor be required to
purchase any Mortgage Loan hereunder. As compensation therefor, the Trustee
shall be entitled to all fees and other compensation which the resigning or
terminated party would
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have been entitled to for future services rendered if the resigning or
terminated party 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 or either Rating Agency so request in writing to the Trustee or if the
REMIC Administrator is the resigning or terminated party and the Trustee had
been acting in such capacity, promptly appoint, or petition a court of competent
jurisdiction to appoint, any established and qualified institution as the
successor to the Master Servicer, the Special Servicer or the REMIC
Administrator, as the case may be, hereunder in the assumption of all or any
part of the responsibilities, duties or liabilities of the Master Servicer, the
Special Servicer or the REMIC Administrator, as the case may be, hereunder;
provided that such appointment does not result in the downgrading, qualification
or withdrawal of any rating then assigned by either Rating Agency to any Class
of Certificates (as evidenced by written confirmation thereof from each Rating
Agency). No appointment of a successor to the Master Servicer, the Special
Servicer or the REMIC Administrator hereunder shall be effective until the
assumption of the successor to such party of all its responsibilities, duties
and liabilities hereunder. Pending appointment of a successor to the Master
Servicer, the Special Servicer or the REMIC Administrator hereunder, the Trustee
shall act in such capacity as hereinabove provided. 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 or in
respect of the 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 Sponsor, the Trustee,
such successor and each other party hereto shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
Any costs and expenses associated with the transfer of the foregoing functions
under this Agreement (other than the set-up costs of the successor) shall be
borne by the predecessor Master Servicer, Special Servicer or REMIC
Administrator, as applicable, and, if not paid by such predecessor Master
Servicer, Special Servicer or REMIC Administrator within thirty days of its
receipt of an invoice therefor, shall be an expense of the Trust Fund; provided
that such predecessor Master Servicer, Special Servicer or REMIC Administrator
shall reimburse the Trust Fund for any such expense so incurred by the Trust
Fund; and provided, further, that the Trustee shall decide whether and to what
extent it is in the best interest of the Certificateholders to pursue any remedy
against any party obligated to make such reimbursement.
SECTION 7.03. Notification to Certificateholders.
(a) Upon any resignation of the Master Servicer, the Special Servicer
or the REMIC Administrator pursuant to Section 6.04, any termination of the
Master Servicer, the Special Servicer or the REMIC Administrator pursuant to
Section 7.01 or any appointment of a successor to the Master Servicer, the
Special Servicer or the REMIC Administrator pursuant to Section 6.04 or Section
7.02, the Trustee shall give prompt written notice thereof to Certificateholders
at their respective addresses appearing in the Certificate Register.
(b) Not later than the later of (i) 60 days after the occurrence of
any event which constitutes or, with notice or lapse of time or both, would
constitute an Event of Default
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and (ii) five days after the Trustee has actual knowledge, or would be deemed in
accordance with Section 8.02(vii) to have notice of the occurrence of such an
event, the Trustee shall transmit by mail to the other non-defaulting parties
hereto and all Certificateholders notice of such occurrence, unless such default
shall have been cured.
SECTION 7.04. Waiver of Events of Default.
The Holders entitled to at least 51% of the Voting Rights allocated to
each of the Classes of Certificates affected by any Event of Default hereunder
may waive such Event of Default, except that prior to any waiver of an Event of
Default arising from a failure to make P&I Advances, the Trustee shall be
reimbursed all amounts which it has advanced. 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. 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 7.04, Certificates registered in the name of the Sponsor or any
Affiliate of the Sponsor (provided that neither the Sponsor nor any Affiliate
thereof is the party in respect of which such Event of Default exists) 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.
SECTION 7.05. Additional Remedies of Trustee Upon Event of Default.
During the continuance of any Event of Default, so long as such Event
of Default shall not have been remedied, the Trustee, in addition to the rights
specified in Section 7.01, shall have the right, in its own name and as trustee
of an express trust, to take all actions now or hereafter existing at law, in
equity or by statute to enforce its rights and remedies and to protect the
interests, and enforce the rights and remedies, of the Certificateholders
(including the institution and prosecution of all judicial, administrative and
other proceedings and the filings of proofs of claim and debt in connection
therewith). Except as otherwise expressly provided in this Agreement, no remedy
provided for by this Agreement shall be exclusive of any other remedy, and each
and every remedy shall be cumulative and in addition to any other remedy, and no
delay or omission to exercise any right or remedy shall impair any such right or
remedy or shall be deemed to be a waiver of any Event of Default.
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ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default
hereunder and after the curing or waiver of all such Events of Default and
defaults which may have occurred, undertakes to perform such duties and only
such duties as are specifically set forth in this Agreement; provided that it is
herein acknowledged and agreed that the Trustee is at all times acting in a
fiduciary capacity with respect to the Certificateholders. If an Event of
Default hereunder occurs and is continuing, the Trustee shall exercise such of
the rights and powers vested in it by this Agreement and applicable law, and use
the same degree of care and skill in their exercise as a prudent man or the
Trustee would exercise or use under the circumstances in the conduct of his or
its own affairs (whichever standard would be higher). Any permissive right of
the Trustee contained in this Agreement shall not be construed as a duty.
(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 (other than the Mortgage Files, the review of which
is specifically governed by the terms of Article II), shall examine them to
determine whether they conform in form to the requirements of this Agreement. If
any such instrument is found not to so conform to the requirements of this
Agreement in a material manner, the Trustee shall take such action as it deems
appropriate to have the instrument corrected. The Trustee shall not be
responsible for, but may assume and rely upon, the accuracy and content of any
resolution, certificate, statement, opinion, report, document, order or other
instrument furnished by the Sponsor, the Master Servicer, the Special Servicer
or the REMIC Administrator and accepted by the Trustee in good faith, pursuant
to this Agreement.
(c) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided, however, that:
(i) The duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall not
be liable except for the performance of such duties and obligations as are
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee and, in
the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions furnished
to the Trustee and conforming to the requirements of this Agreement;
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(ii) The Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(iii) The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Holders of Certificates entitled to at
least 25% (or, as to any particular matter, any higher percentage as may be
specifically provided for hereunder) of the Voting Rights relating to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Agreement.
SECTION 8.02. Certain Matters Affecting the Trustee and the Fiscal
Agent.
Except as otherwise provided in Section 8.01:
(i) The Trustee may rely upon and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other
paper or document reasonably believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(ii) The Trustee may consult with counsel and the written advice of
such counsel or 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 therewith;
(iii) The Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Agreement or to make any
investigation of matters arising hereunder or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request, order
or direction of any of the Certificateholders, pursuant to the provisions
of this Agreement, unless such Certificateholders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby; the Trustee shall not
be required 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; nothing
contained herein shall, however, relieve the Trustee of the obligation,
upon the occurrence of an Event of Default hereunder which has not been
cured, to exercise such of the rights and powers vested in it by this
Agreement and to use
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the same degree of care and skill in their exercise as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs;
(iv) The Trustee shall not be personally liable for any action
reasonably taken, suffered or omitted by it in good faith and believed by
it to be authorized or within the discretion or rights or powers conferred
upon it by this Agreement;
(v) Prior to the occurrence of an Event of Default hereunder, and
after the curing of all such Events of Default which may have occurred, the
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other
paper or document, unless requested in writing to do so by Holders of
Certificates entitled to at least 25% of the Voting Rights; provided,
however, that if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making of
such investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of this
Agreement, the Trustee may require reasonable indemnity against such
expense or liability as a condition to taking any such action;
(vi) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys-in-fact, provided that the use of any such agent or
attorney-in-fact shall not relieve the Trustee from any of its obligations
hereunder, and the Trustee shall remain responsible for all acts and
omissions of any such agent or attorney-in-fact;
(vii) For all purposes under this Agreement, the Trustee shall not be
deemed to have notice of any Event of Default hereunder unless a
Responsible Officer of the Trustee has actual knowledge thereof or unless
written notice of any event which is in fact such a default is received by
the Trustee at the Corporate Trust Office, and such notice references the
Certificates or this Agreement; and
(viii) Neither the Trustee nor the Fiscal Agent shall be responsible
for any act or omission of the Master Servicer, the Special Servicer or the
REMIC Administrator (unless the Trustee is acting as Master Servicer,
Special Servicer or REMIC Administrator, as the case may be) or for any act
or omission of the Sponsor or the Mortgage Loan Seller.
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SECTION 8.03. Trustee Not Liable for Validity or Sufficiency of
Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates, other than the
representations and warranties of, and the other statements attributed to, the
Trustee and/or the Fiscal Agent in Article II and the certificate of
authentication executed by the Trustee as Certificate Registrar set forth on
each outstanding Certificate, shall be taken as the statements of the Sponsor,
the Mortgage Loan Seller, the Master Servicer, the Special Servicer or the REMIC
Administrator, as the case may be, and the Trustee and the Fiscal Agent assume
no responsibility for their correctness. Neither the Trustee nor the Fiscal
Agent make any representations as to the validity or sufficiency of this
Agreement (other than as specifically set forth in Sections 2.08 and 2.09) or of
any Certificate (other than as to the signature of the Trustee set forth
thereon) or of any Mortgage Loan or related document. Neither the Trustee nor
the Fiscal Agent shall be accountable for the use or application by the Sponsor
of any of the Certificates issued to it or of the proceeds of such Certificates,
or for the use or application of any funds paid to the Sponsor or the Mortgage
Loan Seller in respect of the assignment of the Mortgage Loans to the Trust
Fund, or any funds deposited in or withdrawn from the Certificate Account or any
other account by or on behalf of the Sponsor, the Master Servicer, the Special
Servicer or the REMIC Administrator. Neither the Trustee nor the Fiscal Agent
shall be responsible for the accuracy or content of any resolution, certificate,
statement, opinion, report, document, order or other instrument furnished by the
Sponsor, the Master Servicer, the Special Servicer or the REMIC Administrator
and accepted by the Trustee or the Fiscal Agent, as the case may be, in good
faith, pursuant to this Agreement.
SECTION 8.04. Trustee and Fiscal Agent May Own Certificates.
Each 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 Trustee or Fiscal Agent, as the case may be.
SECTION 8.05. Fees of Trustee; Indemnification of Trustee and the
Fiscal Agent.
(a) The Trustee shall pay to itself on each Distribution Date,
pursuant to Section 3.05(b)(ii), from amounts on deposit in the Distribution
Account, an amount equal to the Trustee Fee for such Distribution Date and, to
the extent not previously received, for each prior Distribution Date.
(b) The Trustee, the Fiscal Agent and any director, officer, employee
or agent of the Trustee or the Fiscal Agent shall be entitled to be indemnified
and held harmless by the Trust Fund (to the extent of amounts on deposit in the
Certificate Account and the Distribution Account from time to time) against any
loss, liability or expense (including, without limitation, costs and expenses of
litigation, and of investigation, counsel fees, damages, judgments and amounts
paid in settlement) arising out of, or incurred in connection with, any
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legal actions relating to the exercise and performance of any of the powers and
duties of the Trustee or the Fiscal Agent hereunder; provided that none of the
Trustee, the Fiscal Agent or any of the other above specified Persons shall be
entitled to indemnification pursuant to this Section 8.05(b) for (i) allocable
overhead, (ii) expenses or disbursements incurred or made by or on behalf of the
Trustee or the Fiscal Agent in the normal course of the Trustee's or the Fiscal
Agent's performing its routine duties in accordance with any of the provisions
hereof, (iii) any expense or liability specifically required to be borne thereby
pursuant to the terms hereof, or (iv) any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or negligence in the performance of the
Trustee's or the Fiscal Agent's obligations and duties hereunder, or by reason
of reckless disregard of such obligations or duties, or as may arise from a
breach of any representation, warranty or covenant of the Trustee or the Fiscal
Agent made herein. The provisions of this Section 8.05(b) shall survive any
resignation or removal of the Trustee and appointment of a successor trustee.
SECTION 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation, a trust
company, a bank or a banking association: (i) organized and doing business under
the laws of the United States of America or any State thereof or the District of
Columbia; (ii) authorized under such laws to exercise trust powers; (iii) having
a combined capital and surplus of at least $50,000,000; (iv) subject to
supervision or examination by federal or state authority; and (v) whose
long-term senior unsecured debt is rated either (A) if a fiscal agent is then
currently in place, not less than (1) if ABN AMRO is the Fiscal Agent, (a)
"Baa2" by Moody's and (b) "A-" by Fitch or another nationally recognized
statistical rating organization (other than Moody's), or (2) if ABN AMRO and
LaSalle National Bank are then no longer the Fiscal Agent and Trustee,
respectively, (a) "Baa2" by Moody's and (b) "A-" by Fitch, or (B) if a fiscal
agent is not then in place, "Aa2" by Moody's and "AA" by Fitch (or, in the case
of each of clause (v)(A) and (v)(B) above, such other lower rating by any Rating
Agency as would not, as evidenced in writing by such Rating Agency, adversely
affect any of the ratings then assigned thereby to the Certificates). If such
corporation, trust company, bank or 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 8.06, the combined capital and surplus of such corporation, trust
company, bank or banking association shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published. No
Person shall become a successor trustee hereunder if the succession of such
Person would result in a qualification, downgrading or withdrawal of any of the
ratings then assigned by the Rating Agencies to the Certificates. In case at any
time the Trustee shall cease to be eligible in accordance with the provisions of
this Section, the Trustee shall resign immediately in the manner and with the
effect specified in Section 8.07. The corporation, trust company, bank or
banking association serving as Trustee may have normal banking and trust
relationships with the Sponsor, the Mortgage Loan Seller, the Additional
Warranting Party, the Master Servicer, the Special Servicer, the REMIC
Administrator and their respective Affiliates.
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SECTION 8.07. Resignation and Removal of the Trustee.
(a) The Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice thereof to the Sponsor, the
Mortgage Loan Seller, the Additional Warranting Party, the Master Servicer, the
Special Servicer, the REMIC Administrator and to all Certificateholders. Upon
receiving such notice of resignation, the Sponsor shall promptly appoint a
successor trustee acceptable to the Master Servicer by written instrument, in
duplicate, which instrument shall be delivered to the resigning Trustee and to
the successor trustee. A copy of such instrument shall be delivered to the
Mortgage Loan Seller, the Additional Warranting Party, the Master Servicer, the
Special Servicer, the REMIC Administrator and the Certificateholders by the
Sponsor. If no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Sponsor or the Master Servicer, or if at any
time the Trustee shall become incapable of acting, or shall be adjudged bankrupt
or insolvent, or a receiver of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Sponsor may remove the Trustee and appoint a successor
trustee acceptable to the Master Servicer by written instrument, in duplicate,
which instrument shall be delivered to the Trustee so removed and to the
successor trustee. A copy of such instrument shall be delivered to the Mortgage
Loan Seller, the Additional Warranting Party, the Master Servicer, the Special
Servicer, the REMIC Administrator and the Certificateholders by the Sponsor.
(c) The Holders of Certificates entitled to at least 33 1/3% of the
Voting Rights may at any time remove the Trustee and appoint a successor trustee
by written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered to the Master Servicer, one complete set to the Trustee so
removed and one complete set to the successor so appointed; provided that the
Master Servicer, the Sponsor and the remaining Certificateholders shall have
been notified; and provided further that other Holders of the Certificates
entitled to a greater percentage of the Voting Rights shall not have objected to
such removal in writing to the Master Servicer and the Sponsor within 30 days of
their receipt of notice thereof. A copy of such instrument shall be delivered to
the Sponsor, the Mortgage Loan Seller, the Additional Warranting Party, the
Special Servicer, the REMIC Administrator and the remaining Certificateholders
by the Master Servicer.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07 shall
not become effective until acceptance of appointment by the successor trustee as
provided in Section 8.08; and no such resignation or removal of the Trustee
and/or appointment of a successor trustee shall be permitted, unless, as
confirmed in writing by each Rating Agency, such resignation or removal
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and appointment would not result in the qualification, downgrading or withdrawal
of the rating assigned by either Rating Agency to any Class of Certificates.
SECTION 8.08. Successor Trustee.
(a) Any successor trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Sponsor, the Mortgage Loan Seller, the
Additional Warranting Party, the Master Servicer, the Special Servicer, the
REMIC Administrator and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as trustee herein. The predecessor trustee
shall deliver to the successor trustee all Mortgage Files and related documents
and statements held by it hereunder (other than any Mortgage Files and related
documents and statements at the time held on its behalf by a Custodian, which
Custodian shall become the agent of the successor trustee), and the Sponsor, the
Mortgage Loan Seller, the Additional Warranting Party (at the direction of and
on behalf of the Mortgage Loan Seller), the Master Servicer, the Special
Servicer, the REMIC Administrator and the predecessor trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
to more fully and certainly vest and confirm in the successor trustee all such
rights, powers, duties and obligations, and to enable the successor trustee to
perform its obligations hereunder. If such predecessor trustee was removed as
Trustee under this Agreement without cause, the cost of any such execution,
delivery or action shall be at the expense of the Trust Fund.
(b) No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06.
(c) Upon acceptance of appointment by a successor trustee as provided
in this Section 8.08, the Master Servicer shall mail notice of the succession of
such trustee hereunder to the Sponsor and the Certificateholders. If the Master
Servicer fails to mail such notice within 10 days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Master Servicer.
SECTION 8.09. Merger or Consolidation of Trustee or Fiscal Agent.
Any entity into which the Trustee or the Fiscal Agent may be merged or
converted or with which it may be consolidated or any entity resulting from any
merger, conversion or consolidation to which the Trustee or the Fiscal Agent
shall be a party, or any entity succeeding to the corporate trust business of
the Trustee or to the business of the Fiscal Agent, shall be the successor of
the Trustee or the Fiscal Agent, 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, anything herein to the contrary notwithstanding; provided that
the Trustee shall continue to be
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eligible under the provisions of Section 8.06. The successor to the Trustee or
the Fiscal Agent, as the case may be, shall promptly notify in writing each of
the other parties hereto, the Certificateholders and the Rating Agencies of any
such merger, conversion, consolidation or succession to business.
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Fund or property securing the same may at the time be located, the
Master Servicer and the Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust Fund, and
to vest in such Person or Persons, in such capacity, such title to the Trust
Fund, or any part thereof, and, subject to the other provisions of this Section
8.10, such powers, duties, obligations, rights and trusts as the Master Servicer
and the Trustee may consider necessary or desirable. If the Master Servicer
shall not have joined in such appointment within 15 days after the receipt by it
of a request to do so, or in case an Event of Default in respect of the Master
Servicer shall have occurred and be continuing, the Trustee alone shall have the
power to make such appointment. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 8.06 hereunder and no notice to Holders of Certificates of the
appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 8.08 hereof.
(b) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, 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, the Special Servicer or the REMIC
Administrator hereunder), the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust Fund or any portion
thereof in any such jurisdiction) shall be exercised and performed by such
separate trustee or co-trustee at the direction of the Trustee.
(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 or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. 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.
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(d) Any separate trustee or co-trustee may, at any time, constitute
the Trustee, its agent or attorney-in-fact, with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
(e) The appointment of a co-trustee or separate trustee under this
Section 8.10 shall not relieve the Trustee of its duties, responsibilities or
liabilities hereunder.
SECTION 8.11. Appointment of Custodians.
The Trustee may, with the consent of the Master Servicer, appoint one
or more Custodians to hold all or a portion of the Mortgage Files as agent for
the Trustee. Each Custodian shall be a depository institution subject to
supervision by federal or state authority, shall have combined capital and
surplus (or shall have its performance guaranteed by an Affiliate with a
combined capital and surplus) of at least $10,000,000, shall be qualified to do
business in the jurisdiction in which it holds any Mortgage File and shall not
be the Sponsor, the Mortgage Loan Seller, the Additional Warranting Party or any
Affiliate of any of them. Each Custodian shall be subject to the same
obligations and standard of care as would be imposed on the Trustee hereunder in
connection with the retention of Mortgage Files directly by the Trustee. The
appointment of one or more Custodians shall not relieve the Trustee from any of
its duties, liabilities or obligations hereunder, and the Trustee shall remain
responsible for all acts and omissions of any Custodian.
SECTION 8.12. Access to Certain Information.
(a) The Trustee shall provide or cause to be provided to the Sponsor,
the Master Servicer, the Special Servicer and the Rating Agencies, and to the
OTS, the FDIC, and any other federal or state banking or insurance regulatory
authority that may exercise authority over any Certificateholder, access to the
Mortgage Files and any other documentation regarding the Mortgage Loans and the
Trust Fund within its control which may be required by this Agreement or by
applicable law. Such access shall 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.
(b) Promptly following the first sale of any Non-Registered
Certificate to an Independent third party, the Sponsor shall provide to the
Trustee 10 copies of any private placement memorandum or other disclosure
document used by the Sponsor or its Affiliate in connection with the offer and
sale of the Class of Certificates to which such Non-Registered Certificate
belongs. In addition, if any such private placement memorandum or disclosure
document is revised, amended or supplemented at any time following the delivery
thereof to the Trustee, the Sponsor promptly shall inform the Trustee of such
event and shall deliver to the Trustee 10 copies of the private placement
memorandum or disclosure document, as revised,
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amended or supplemented. The Trustee shall maintain at its Corporate Trust
Office and shall on behalf of the Sponsor, upon reasonable advance written
notice, make available during normal business hours for review by each Rating
Agency and by any Certificateholder or any Certificate Owner or any Person
identified to the Trustee by a Certificateholder or a Certificate Owner as a
prospective transferee of a Certificate or interest therein, originals or copies
of the following items: (i) in the case of a Holder or prospective transferee of
a Non-Registered Certificate, any private placement memorandum or other
disclosure document relating to the Class of Certificates to which such
Non-Registered Certificate belongs, in the form most recently provided to the
Trustee; and (ii) in all cases, (A) this Agreement and the Sub-Servicing
Agreements, and any amendments hereto or thereto, (B) all statements and reports
required to be delivered to Holders of the relevant Class of Certificates
pursuant to Section 4.02(a) since the Closing Date, (C) all reports delivered to
the Trustee since the Closing Date pursuant to Section 4.02(b) and Section
4.02(c), (D) all Officer's Certificates delivered to the Trustee since the
Closing Date pursuant to Section 3.13, (E) all accountants' reports delivered to
the Trustee since the Closing Date pursuant to Section 3.14, (F) the most recent
inspection report prepared by the Master Servicer or Special Servicer, as the
case may be, and delivered to the Trustee in respect of each Mortgaged Property
pursuant to Section 3.12(a), (G) all Mortgagor financial statements and
Mortgaged Property operating statements and rent rolls delivered to the Trustee
by the Master Servicer or the Special Servicer pursuant to Section 3.12(b) or
4.02(b), (H) any and all notices and reports delivered to the Trustee with
respect to any Mortgaged Property securing a defaulted Mortgage Loan as to which
the environmental testing contemplated by Section 3.09(c) revealed that either
of the conditions set forth in clauses (i) and (ii) of the first sentence
thereof was not satisfied or that any remedial, corrective or other further
action contemplated in such clauses is required (but only for so long as such
Mortgaged Property or the related Mortgage Loan is part of the Trust Fund), and
(I) all documents constituting the Mortgage Files, including, without
limitation, any and all modifications, waivers and amendments of the terms of a
Mortgage Loan entered into by the Master Servicer or the Special Servicer and
delivered to the Trustee pursuant to Section 3.20 (but, in each case, only for
so long as the related Mortgage Loan is part of the Trust Fund). Copies of any
and all of the foregoing items are to be available from the Trustee upon
request; however, the Trustee shall be permitted to require payment of a sum
sufficient to cover the reasonable costs and expenses of providing such service.
In connection with providing access to or copies of the items
described in the preceding paragraph, 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 a
prospective purchaser, 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 an 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
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8.12(b), 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 this Section 8.12(b).
SECTION 8.13. The Fiscal Agent.
(a) To the extent that the Trustee is required, pursuant to the terms
of this Agreement, to make any Advance which has not been deemed a
Nonrecoverable Advance, whether as successor Master Servicer or otherwise, and
has failed to do so in accordance with the terms hereof, the Fiscal Agent shall
make such Advance when and as required by the terms of this Agreement on behalf
the Trustee as if the Fiscal Agent were the Trustee hereunder. To the extent
that the Fiscal Agent makes an Advance pursuant to this Section 8.13 or
otherwise pursuant to this Agreement, the obligations of the Trustee under this
Agreement in respect of such Advance shall be satisfied. Notwithstanding
anything contained in this Agreement to the contrary, the Fiscal Agent shall be
entitled to all limitations on liability, rights of reimbursement and
indemnities that the Trustee is entitled to hereunder as if it were the Trustee.
(b) All fees and expenses of the Fiscal Agent (other than
indemnification pursuant to Section 8.05(b) or reimbursement for unreimbursed
Advances and Advance Interest in respect thereof owed to the Fiscal Agent)
incurred by the Fiscal Agent in connection with the transactions contemplated by
this Agreement shall be borne by the Trustee, and neither the Trustee nor the
Fiscal Agent shall be entitled to reimbursement therefor from any of the Trust
Fund, the Sponsor, the Mortgage Loan Seller, the Additional Warranting Party,
the Master Servicer or the Special Servicer.
(c) The obligations of the initial Fiscal Agent set forth in this
Section 8.13 shall exist for so long as the initial Trustee shall act as Trustee
hereunder and the Trustee would not otherwise satisfy the eligibility
requirements of Section 8.06. The obligations of the initial Fiscal Agent set
forth in this Section 8.13 or otherwise pursuant to this Agreement shall cease
to exist to the extent that LaSalle National Bank, or any successor in interest
thereto, is no longer acting as Trustee hereunder. The responsibility for
appointing a successor Fiscal Agent shall belong to the successor Trustee
insofar as such appointment is necessary for such successor Trustee to satisfy
the eligibility requirements of Section 8.06. Any successor Fiscal Agent so
appointed shall be required to execute and deliver to the other parties hereto a
written agreement to assume and perform the duties of the Fiscal Agent set forth
in this Agreement; provided that no such successor shall become Fiscal Agent
hereunder unless the successor Trustee shall have received written assurance
from each Rating Agency that the succession of such proposed successor Fiscal
Agent would not, in and of itself, result in a qualification, downgrading or
withdrawal of the then current ratings on the Certificates.
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SECTION 8.14. Filings with the Securities and Exchange Commission.
The Trustee shall, at the expense of the Sponsor, prepare for filing,
execute and properly file with the Commission, any and all reports, statements
and information, including, without limitation, Distribution Date Statements,
Delinquent Loan Status Reports, REO Status Reports, Historical Loan Modification
Reports, Special Servicer Loan Status Reports, Historical Loss Reports and
Operating Statement Analyses, respecting the Trust Fund and/or the Certificates
required or specifically provided herein to be filed on behalf of the Trust Fund
under the Exchange Act; provided that such items shall have been received by the
Trustee (to the extent not generated by the Trustee) in the format required for
electronic filing via the EDGAR system. The Trustee shall have no responsibility
to file any such items that have not been received in such EDGAR-compatible
format nor shall it have any responsibility to convert any items to such format.
The Sponsor shall promptly file, and exercise its reasonable best efforts to
obtain a favorable response to, no-action requests to, or requests for other
appropriate exemptive relief from, the Commission regarding the usual and
customary exemption from certain reporting requirements granted to issuers of
securities similar to the Certificates.
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ARTICLE IX
TERMINATION
SECTION 9.01. Termination Upon Repurchase or Liquidation of All
Mortgage Loans.
Subject to Section 9.02, the Trust Fund and the respective obligations
and responsibilities under this Agreement of the Sponsor, the Mortgage Loan
Seller, the Additional Warranting Party, the Master Servicer, the Special
Servicer, the Trustee, the Fiscal Agent and the REMIC Administrator (other than
the obligations of the Trustee to provide for and make payments to
Certificateholders as hereafter set forth) shall terminate upon payment (or
provision for payment) to the Certificateholders of all amounts held by or on
behalf of the Trustee and required hereunder to be so paid on the Distribution
Date following the earlier to occur of (i) the purchase by the Master Servicer
or by any Majority Certificateholder of the Controlling Class (other than the
Sponsor or the Mortgage Loan Seller) of all Mortgage Loans and each REO Property
remaining in REMIC I at a price (to be calculated by the Master Servicer and the
Trustee as of the close of business on the third Business Day preceding the date
upon which notice of any such purchase is furnished to Certificateholders
pursuant to the third paragraph of this Section 9.01 and as if the purchase was
to occur on such Business Day) equal to (A) the aggregate Purchase Price of all
the Mortgage Loans included in REMIC I, plus (B) the appraised value of each REO
Property, if any, included in REMIC I (such appraisal to be conducted by an
Independent MAI-designated appraiser selected by the Master Servicer and
approved by the Trustee), minus (C) if such purchase is being made by the Master
Servicer, the aggregate amount of unreimbursed Advances made by the Master
Servicer, together with any Advance Interest 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), and (ii) the final payment or
other liquidation (or any Advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in REMIC I; provided, however, 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.
The Majority Certificateholder of the Controlling Class (other than
the Sponsor or the Mortgage Loan Seller) has the right, and if the Majority
Certificateholder of the Controlling Class fails to exercise such right, the
Master Servicer has the right, to purchase all of the Mortgage Loans and each
REO Property remaining in REMIC I as contemplated by clause (i) of the preceding
paragraph by giving written notice to the other parties hereto no later than 60
days prior to the anticipated date of purchase; provided, however, that the
Master Servicer and any Majority Certificateholder of the Controlling Class
(other than the Sponsor or the Mortgage Loan Seller) each may so elect to
purchase all of the Mortgage Loans and each REO Property remaining in REMIC I
only if the aggregate Stated Principal Balance of the Mortgage Pool at the time
of such election is less than 1.0% of the initial aggregate Stated Principal
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Balance of the Mortgage Pool set forth in the Preliminary Statement. In the
event that the Master Servicer or any Majority Certificateholder of the
Controlling Class (other than the Sponsor or the Mortgage Loan Seller) elects to
purchase all of the Mortgage Loans and each REO Property remaining in REMIC I in
accordance with the preceding sentence, the Master Servicer or such Majority
Certificateholder, as applicable, shall deposit in the Distribution Account not
later than the Master Servicer Remittance 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 above-described purchase price
(exclusive of any portion thereof payable to any Person other than the
Certificateholders pursuant to Section 3.05(a), which portion shall be deposited
in the Certificate Account). In addition, the Master Servicer shall transfer all
amounts required to be transferred to the Distribution Account on such Master
Servicer Remittance Date from the Certificate Account pursuant to the first
paragraph of Section 3.04(b). Upon confirmation that such final deposits have
been made, the Trustee shall release or cause to be released to the 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 purchaser, as shall be necessary to effectuate transfer of the Mortgage
Loans and REO Properties remaining in REMIC I.
Notice of any termination shall be given promptly by the Trustee by
letter to Certificateholders and, if not previously notified pursuant to the
preceding paragraph, to the other parties hereto mailed (a) in the event such
notice is given in connection with a purchase by the Master Servicer or any
Majority Certificateholder of the Controlling Class (other than the Sponsor or
the Mortgage Loan Seller) of all of the Mortgage Loans and each REO Property
remaining in REMIC I, not earlier than the 15th day and not later than the 25th
day of the month next preceding the month of the final distribution on the
Certificates or (b) otherwise during the month of such final distribution on or
before the 5th day of such month, in each case specifying (i) the Distribution
Date upon which the Trust Fund will terminate and final payment on the
Certificates will be made, (ii) the amount of any such final payment and (iii)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Certificates at the offices of the Certificate Registrar or such other location
therein designated.
Upon presentation and surrender of the Certificates by the
Certificateholders on the Final Distribution Date, the Trustee shall distribute
to each Certificateholder so presenting and surrendering its Certificates such
Certificateholder's Percentage Interest of that portion of the Available
Distribution Amount for such date that is allocable to payments on the relevant
Class in accordance with Section 4.01(a).
Any funds not distributed to any Holder or Holders of Certificates of
any Class on the Final Distribution Date because of the failure of such Holder
or Holders to tender their Certificates shall, on such date, be set aside and
held uninvested in trust and credited to the account or accounts of the
appropriate non-tendering Holder or Holders. If any Certificates as to which
notice has been given pursuant to this Section 9.01 shall not have been
surrendered for cancellation within six months after the time specified in such
notice, the Trustee shall mail a
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second notice to the remaining non-tendering Certificateholders to surrender
their Certificates for cancellation in order to receive the final distribution
with respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Trustee,
directly or through an agent, shall take such reasonable steps to contact the
remaining non-tendering Certificateholders concerning the surrender of their
Certificates as it shall deem appropriate. The costs and expenses of holding
such funds in trust and of contacting such Certificateholders following the
first anniversary of the delivery of such second notice to the non-tendering
Certificateholders shall be paid out of such funds. No interest shall accrue or
be payable to any former Holder on any amount held in trust hereunder. If by the
second anniversary of the delivery of such second notice, all of the
Certificates shall not have been surrendered for cancellation, the Class R-I
Certificateholders shall be entitled to all unclaimed funds and other assets
which remain subject thereto.
SECTION 9.02. Additional Termination Requirements.
(a) In the event the Master Servicer or a Majority Certificateholder
of the Controlling Class (other than the Sponsor or the Mortgage Loan Seller)
purchases all of the Mortgage Loans and each REO Property remaining in REMIC I
as provided in Section 9.01, the Trust Fund (and, accordingly, REMIC I and REMIC
II) shall be terminated in accordance with the following additional
requirements, unless the Master Servicer or such Majority Certificateholder, as
applicable, obtains at its own expense and delivers to the Trustee and the REMIC
Administrator an Opinion of Counsel, addressed to the Trustee and the REMIC
Administrator, to the effect that the failure of the Trust Fund to comply with
the requirements of this Section 9.02 will not result in the imposition of taxes
on "prohibited transactions" of REMIC I or REMIC II as defined in Section 860F
of the Code or cause REMIC I or REMIC II to fail to qualify as a REMIC at any
time that any Certificates are outstanding:
(i) the REMIC Administrator shall specify the first day in the 90-day
liquidation period in a statement attached to the final Tax Return for each
of REMIC I and REMIC II pursuant to Treasury regulation Section 1.860F-1;
(ii) during such 90-day liquidation period and at or prior to the time
of making of the final payment on the Certificates, the Trustee shall sell
all of the assets of REMIC I to the Master Servicer or the Majority
Certificateholder of the Controlling Class, as applicable, for cash; and
(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 applicable Class of Residual
Certificates all cash on hand (other than cash retained to meet claims),
and each of REMIC I and REMIC II shall terminate at that time.
(b) By their acceptance of Certificates, the Holders thereof hereby
agree to authorize the REMIC Administrator to adopt a plan of complete
liquidation of each of REMIC
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I and REMIC II in accordance with the terms and conditions of this Agreement,
which authorization shall be binding upon all successor Certificateholders.
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ARTICLE X
ADDITIONAL REMIC PROVISIONS
SECTION 10.01. REMIC Administration.
(a) The REMIC Administrator shall elect to treat each of REMIC I and
REMIC II as a REMIC under the Code and, if necessary, under Applicable State
Law. Each such election will be made on Form 1066 or other appropriate federal
or state Tax Returns for the taxable year ending on the last day of the calendar
year in which the Certificates are issued.
(b) The REMIC I Regular Interests are hereby designated as the
"regular interests" (within the meaning of Section 860G(a)(1) of the Code), and
the Class R-I Certificates are hereby designated as the sole class of "residual
interests" (within the meaning of Section 860G(a)(2) of the Code), in REMIC I.
The Class A-1, Class A-2, Class A-3, Class B, Class C, Class D, Class E, Class
F, Class G and Class H Certificates, together with the respective Components of
the Class X Certificates, are hereby designated as the "regular interests"
(within the meaning of Section 860G(a)(1) of the Code), and the Class R-II
Certificates are hereby designated as the sole class of "residual interests"
(within the meaning of Section 860G(a)(2) of the Code), in REMIC II. None of the
REMIC Administrator, the Master Servicer, the Special Servicer, the Trustee or
the Fiscal Agent shall, to the extent it is within the control of such Person,
create or permit the creation of any other "interests" in either REMIC I or
REMIC II (within the meaning of Treasury regulation Section 1.860D-1(b)(1)).
(c) The Closing Date is hereby designated as the "startup day" of each
of REMIC I and REMIC II within the meaning of Section 860G(a)(9) of the Code.
(d) The REMIC Administrator is hereby designated as agent for the Tax
Matters Person of each of REMIC I and REMIC II and shall: act on behalf of the
Trust Fund in relation to any tax matter or controversy, represent the Trust
Fund in any administrative or judicial proceeding relating to an examination or
audit by any governmental taxing authority, request an administrative adjustment
as to any taxable year of REMIC I or REMIC II, seek private letter rulings from
the IRS in accordance with Section 10.01(g), enter into settlement agreements
with any governmental taxing agency, extend any statute of limitations relating
to any tax item of REMIC I or REMIC II, and otherwise act on behalf of each of
REMIC I and REMIC II in relation to any tax matter or controversy involving such
REMIC. By their acceptance thereof, the Holders of the Residual Certificates
hereby agree to irrevocably appoint the REMIC Administrator as their agent to
perform all of the duties of the Tax Matters Person for REMIC I and REMIC II.
Subject to Section 10.01(h), the legal expenses and costs of any action
described in this subsection (d) and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Fund, and the REMIC Administrator
shall be entitled to be reimbursed therefor out of any amounts on deposit in the
Distribution Account as provided by Section 3.05(b).
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(e) The REMIC Administrator shall prepare and file, and the Trustee
shall sign, all of the Tax Returns in respect of each of REMIC I and REMIC II.
The expenses of preparing and filing such returns shall be borne by the REMIC
Administrator without any right of reimbursement therefor.
(f) The REMIC Administrator shall perform on behalf of each of REMIC I
and REMIC II all reporting and other tax compliance duties that are the
responsibility of each such REMIC under the Code, the REMIC Provisions or other
compliance guidance issued by the IRS or any other taxing authority under
Applicable State Law. Included among such duties, the REMIC Administrator shall
provide to: (i) any Transferor of a Residual Certificate, such information as is
necessary for the application of any tax relating to the transfer of a Residual
Certificate to any Person who is not both a Permitted Transferee and a United
States Person; (ii) the Certificateholders, such information or reports as are
required by the Code or the REMIC Provisions, including, without limitation,
reports relating to interest, original issue discount and market discount or
premium (using the Prepayment Assumption as required); and (iii) the IRS, the
name, title, address and telephone number of the Person who will serve as the
representative of each of REMIC I and REMIC II.
(g) The REMIC Administrator shall perform its duties more specifically
set forth hereunder in a manner consistent with maintaining the status of each
of REMIC I and REMIC II as a REMIC under the REMIC Provisions (and each of the
other parties hereto shall assist it, to the extent reasonably requested by it).
The REMIC Administrator shall not knowingly take (or cause either REMIC I or
REMIC II to take) any action or fail to take (or fail to cause to be taken) any
action within the scope of its duties more specifically set forth hereunder
that, under the REMIC Provisions, if taken or not taken, as the case may be,
could result in an Adverse REMIC Event with respect to either such REMIC, unless
the REMIC Administrator has received an Opinion of Counsel or an IRS private
letter ruling to the effect that the contemplated action will not result in an
Adverse REMIC Event. None of the other parties hereto shall take any action
(whether or not authorized hereunder) as to which the REMIC Administrator has
advised it in writing that it has received an Opinion of Counsel or an IRS
private letter ruling to the effect that an Adverse REMIC Event could occur with
respect to such action. In addition, prior to taking any action with respect to
REMIC I or REMIC II, or causing REMIC I or REMIC II to take any action, that is
not expressly permitted under the terms of this Agreement, each of the other
parties hereto will consult with the REMIC Administrator, in writing, with
respect to whether such action could cause an Adverse REMIC Event to occur. None
of the parties hereto shall take any such action or cause REMIC I or REMIC II to
take any such action as to which the REMIC Administrator has advised it in
writing that an Adverse REMIC Event could occur. The REMIC Administrator may
consult with counsel or seek an IRS private letter ruling to make such written
advice, and the cost of same shall be borne: (i) if such action that is not
expressly permitted by this Agreement would be of a material benefit to or
otherwise in the best interests of the Certificateholders as a whole, by the
Trust Fund and shall be paid by the Trustee at the direction of the REMIC
Administrator out of amounts on deposit in the Distribution Account; and (ii)
otherwise by the party seeking to take the action not permitted by this
Agreement. Without limiting the respective duties and
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obligations of the parties hereto, the parties hereto may act hereunder in
reliance on any IRS private letter ruling so obtained by the REMIC
Administrator.
(h) In the event that any tax is imposed on REMIC I or REMIC II,
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 or REMIC II 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 3.17(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 REMIC
Administrator, if such tax arises out of or results from a breach by the REMIC
Administrator of any of its obligations under this Article X; (ii) the Trustee,
if such tax arises out of or results from a breach by the Trustee of any of its
obligations under this Article X; (iii) the Fiscal Agent, if such tax arises out
of or results from a breach by the Fiscal Agent of any of its obligations under
this Article X; (iv) 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 III
or this Article X; (v) 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 III or this Article X; or (vi) the Trust Fund in all other instances.
Any tax permitted to be incurred by the Special Servicer pursuant to Section
3.17(a) shall be charged to and paid by the Trust Fund. Any such amounts payable
by the Trust Fund in respect of taxes shall be paid by the Trustee at the
direction of the REMIC Administrator out of amounts on deposit in the
Distribution Account.
(i) The REMIC Administrator and, to the extent that records are
maintained thereby in the normal course of its business, each of the other
parties hereto shall, for federal income tax purposes, maintain books and
records with respect to each of REMIC I and REMIC II on a calendar year and on
an accrual basis.
(j) Following the Startup Day therefor, the Trustee shall not accept
any contributions of assets to REMIC I or REMIC II unless it shall have received
an Opinion of Counsel (at the expense of the party seeking to cause such
contribution) to the effect that the inclusion of such assets in such REMIC will
not cause: (i) such REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding; or (ii) the imposition of any tax on such REMIC
under the REMIC Provisions or other applicable provisions of federal, state and
local law or ordinances.
(k) None of the REMIC Administrator, the Master Servicer, the Special
Servicer, the Trustee or the Fiscal Agent shall consent to or, to the extent it
is within the control of such Person, permit: (i) the sale or disposition of any
of the Mortgage Loans (except in connection with (A) a breach of any
representation or warranty of the Mortgage Loan Seller or the Additional
Warranting Party regarding the Mortgage Loans or as otherwise provided for in
Section 2.03, (B) the foreclosure, default or imminent default of a Mortgage
Loan, including but not limited to, the sale or other disposition of a Mortgaged
Property acquired by deed-in-lieu
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of foreclosure, (C) the bankruptcy of REMIC I or REMIC II, or (D) the
termination of the Trust Fund pursuant to Article IX of this Agreement); (ii)
the sale or disposition of any investments in the Certificate Account or the REO
Account for gain; or (iii) the acquisition of any assets for the Trust Fund
(other than a Mortgaged Property acquired through foreclosure, deed-in-lieu of
foreclosure or otherwise in respect of a defaulted Mortgage Loan and other than
Permitted Investments acquired in connection with the investment of funds in the
Certificate Account or the REO Account); in any event unless it has received an
Opinion of Counsel (from and at the expense of the party seeking to cause such
sale, disposition, or acquisition) to the effect that such sale, disposition, or
acquisition will not cause: (x) REMIC I or REMIC II to fail to qualify as a
REMIC at any time that any Certificates are outstanding; or (y) the imposition
of any tax on REMIC I or REMIC II under the REMIC Provisions or other applicable
provisions of federal, state and local law or ordinances.
(l) Except as otherwise permitted by Section 3.17(a), none of the
REMIC Administrator, the Master Servicer, the Special Servicer or the Trustee
shall enter into any arrangement by which REMIC I or REMIC II will receive a fee
or other compensation for services or, to the extent it is within the control of
such Person, permit REMIC I or REMIC II to receive any income from assets other
than "qualified mortgages" as defined in Section 860G(a)(3) of the Code or
"permitted investments" as defined in Section 860G(a)(5) of the Code. At all
times as may be required by the Code, the REMIC Administrator shall make
reasonable efforts to ensure that substantially all of the assets of REMIC I and
REMIC II will consist of "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.
SECTION 10.02. Sponsor, Master Servicer, Special Servicer, Trustee and
Fiscal Agent to Cooperate with REMIC Administrator.
(a) The Sponsor shall provide or cause to be provided to the REMIC
Administrator, within ten (10) days after the Closing Date, all information or
data that the REMIC Administrator reasonably determines to be relevant for tax
purposes as to the valuations and issue prices of the Certificates, including,
without limitation, the price, yield, prepayment assumption and projected cash
flow of the Certificates.
(b) The Master Servicer, the Special Servicer, the Trustee and the
Fiscal Agent shall each furnish such reports, certifications and information,
and access to such books and records maintained thereby, as may relate to the
Certificates or the Trust Fund and as shall be reasonably requested by the REMIC
Administrator in order to enable it to perform its duties hereunder.
SECTION 10.03. Fees of the REMIC Administrator.
In the event the Trustee and the REMIC Administrator are not the same
Person, the Trustee covenants and agrees to pay to the REMIC Administrator from
time to time, and the REMIC Administrator shall be entitled to, reasonable
compensation (as set forth in a written
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agreement between the Trustee and the REMIC Administrator) for all services
rendered by it in the exercise and performance of any of the obligations and
duties of the REMIC Administrator hereunder.
SECTION 10.04. Use of Agents.
The REMIC Administrator may execute any of its obligations and duties
hereunder either directly or by or through agents or attorneys-in-fact consented
to by the Trustee, which consent shall not be unreasonably withheld; provided
that the REMIC Administrator shall not be relieved of its liabilities, duties
and obligations hereunder by reason of the use of any such agent or
attorney-in-fact.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment.
(a) This Agreement may be amended from time to time by the mutual
agreement of the parties hereto, without the consent of any of the
Certificateholders, (i) to cure any ambiguity, (ii) to correct, modify or
supplement any provision herein which may be defective or inconsistent with any
other provision herein, (iii) to add any other provisions with respect to
matters or questions arising hereunder which shall not be inconsistent with the
provisions hereof, (iv) to relax or eliminate any requirement hereunder imposed
by the REMIC Provisions if the REMIC Provisions are amended or clarified such
that any such requirement may be relaxed or eliminated; (v) if such amendment,
as evidenced by an Opinion of Counsel delivered to the Trustee and the REMIC
Administrator, is reasonably necessary to comply with any requirements imposed
by the Code or any successor or amendatory statute or any temporary or final
regulation, revenue ruling, revenue procedure or other written official
announcement or interpretation relating to federal income tax laws or any such
proposed action which, if made effective, would apply retroactively to REMIC I
or REMIC II at least from the effective date of such amendment, or would be
necessary to avoid the occurrence of a prohibited transaction or to reduce the
incidence of any tax that would arise from any actions taken with respect to the
operation of REMIC I or REMIC II; (vi) to modify, add to or eliminate any
provisions of Section 5.02(d)(i), (ii) and (iii) as provided in Section
5.02(d)(iv); or (vii) for any other purpose; provided that such amendment (other
than any amendment for the specific purposes described in clauses (v) and (vi)
above) shall not, as evidenced by an Opinion of Counsel obtained by or delivered
to the Trustee, adversely affect in any material respect the interests of any
Certificateholder; and provided further that such amendment (other than any
amendment for any of the specific purposes described in clauses (i) through (vi)
above) shall not result in a downgrade, qualification or withdrawal of any
rating assigned to any Class of Certificates by either Rating Agency (as
evidenced by written confirmation to such effect from each Rating Agency
obtained by or delivered to the Trustee).
(b) This Agreement may also be amended from time to time by the mutual
agreement of the parties hereto, with the consent of the Holders of Certificates
entitled to at least 51% of the Voting Rights allocated to the affected Classes,
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 of Certificates; provided, however, that no
such amendment shall (i) reduce in any manner the amount of, or delay the timing
of, payments received or advanced on the Mortgage Loans and any REO Properties
which are required to be distributed 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 clause (b)(i) without the consent of the Holders of all
Certificates of such Class, or (iii) modify the provisions of this Section 11.01
without the consent of the Holders of all Certificates then outstanding.
Notwithstanding any
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other provision of this Agreement, for purposes of the giving or withholding of
consents pursuant to this Section 11.01, Certificates registered in the name of
the Sponsor, the Mortgage Loan Seller, 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.
(c) Notwithstanding any contrary provision of this Agreement, neither
the Trustee nor the REMIC Administrator shall consent to any amendment to this
Agreement unless it shall first have obtained or been furnished with an Opinion
of Counsel to the effect that such amendment or the exercise of any power
granted to any party hereto in accordance with such amendment will not result in
the imposition of a tax on REMIC I or REMIC II pursuant to the REMIC Provisions
or cause REMIC I or REMIC II to fail to qualify as a REMIC at any time that any
Certificates are outstanding.
(d) Promptly after the execution of any such amendment, the Trustee
shall furnish a copy of the amendment to each Certificateholder.
(e) It shall not be necessary for the consent of Certificateholders
under this Section 11.01 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 Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
(f) The Trustee may but shall not be obligated to enter into any
amendment pursuant to this Section that affects its rights, duties and
immunities under this Agreement or otherwise.
(g) The cost of any Opinion of Counsel to be delivered pursuant to
Section 11.01(a) or (c) shall be borne by the Person seeking the related
amendment, except that if the Trustee requests any amendment of this Agreement
in furtherance of the rights and interests of Certificateholders, the cost of
any Opinion of Counsel required in connection therewith pursuant to Section
11.01(a) or (c) shall be payable out of the Distribution Account.
SECTION 11.02. Recordation of Agreement; Counterparts.
(a) To the extent permitted by applicable law, 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 to be
effected by the Master Servicer at the expense of the Trust Fund on direction by
the Trustee, but only upon direction accompanied by an Opinion of Counsel (the
reasonable cost of which may be paid out of the Distribution Account) to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders.
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(b) For the purpose of facilitating the recordation of this Agreement
as herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
SECTION 11.03. Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Certificateholder shall not operate
to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
(b) No Certificateholder shall have any right to vote (except as
expressly provided for herein) or in any manner otherwise control the operation
and management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the Certificates,
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third party by reason of any action taken by the parties to
this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue 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 or any Mortgage
Loan, unless, with respect to any suit, action or proceeding upon or under or
with respect to this Agreement, such Holder previously shall have given to the
Trustee a written notice of default hereunder, and of the continuance thereof,
as hereinbefore provided, and (except in the case of a default by the Trustee)
the Holders of Certificates entitled to at least 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 costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatsoever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, which priority or
preference is not otherwise provided for herein, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and enforcement
of the provisions of this Section 11.03(c), each and every Certificateholder and
the Trustee shall be entitled to such relief as can be given either at law or in
equity.
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SECTION 11.04. Governing Law.
This Agreement and the Certificates shall be construed in accordance
with the internal laws of the State of New York applicable to agreements made
and to be performed in said State, and the obligations, rights and remedies of
the parties hereunder shall be determined in accordance with such laws.
SECTION 11.05. Notices.
Any communications provided for or permitted hereunder shall be in
writing and, unless otherwise expressly provided herein, shall be deemed to have
been duly given when delivered to: (1) in the case of the Sponsor, Mortgage
Capital Funding, Inc., 399 Park Avenue, 3rd Floor, New York, New York 10043,
Attention: Mortgage Finance, telecopy number: (212) 793-5602 (with copies to
Stephen E. Dietz, Esq., Associate General Counsel, Citibank, N.A., 425 Park
Avenue, New York, New York 10043, telecopy number: (212) 793-4401); (2) in the
case of the Mortgage Loan Seller, Citicorp Real Estate, Inc., 399 Park Avenue,
New York, New York 10043 Attention: Richard L. Jarocki, Jr. telecopy number:
(212) 793-5602; (3) in the case of the Additional Warranting Party, NationsBanc
Mortgage Capital Corporation, NationsBank Corporate Center, NC1-007-07-01, 100
North Tryon Street, Charlotte, North Carolina 28255, Attention: David Gertner,
telecopy number: (704) 388-9408; (4) in the case of the Master Servicer, GMAC
Commercial Mortgage Corporation, 650 Dresher Road, P.O. Box 10157, Horsham,
Pennsylvania 19044, Attention: Servicing Manager, telecopy number: (215)
682-3478 (with copies to Glen Snyder, General Counsel, at 100 Witmer Road, P.O.
Box 963, Horsham, Pennsylvania 19044, telecopy number (215) 682-1467); (5) in
the case of the Special Servicer, GMAC Commercial Mortgage Corporation, 650
Dresher Road, P.O. Box 10157, Horsham, Pennsylvania 19044, Attention: Servicing
Manager, telecopy number: (215) 682-3478 (with copies to Glen Snyder, General
Counsel, at 100 Witmer Road, P.O. Box 963, Horsham, Pennsylvania 19044, telecopy
number (215) 682-1467); (6) in the case of the Trustee, LaSalle National Bank,
135 South LaSalle Street, Suite 1740, Chicago, Illinois 60674-4107, Attention:
ABS Group - MCFI - Series 1996-MC2, telecopy number: 312-904-2084; (v) in the
case of the REMIC Administrator, LaSalle National Bank, 135 South LaSalle
Street, Suite 1740, Chicago, Illinois 60674-4107, Attention: ABS Group - MCFI -
Series 1996-MC2, telecopy number: 312-904-4105; (7) in the case of the Fiscal
Agent, to the Trustee on behalf of the Fiscal Agent; and (8) in the case of the
Rating Agencies, (A) Moody's Investors Service, Inc., 99 Church Street, New
York, New York 10007, Attention Eric Schwartz, telecopy number (212) 553-1350;
and (B) Fitch Investors Service, L.P., One State Street Plaza, New York, New
York 10004, Attention: Commercial Mortgage Surveillance, telecopy number: (212)
635-0295; or as to each such Person such other address as may hereafter be
furnished by such Person to the parties hereto in writing. Any communication
required or permitted to be delivered to a Certificateholder shall be deemed to
have been duly given when mailed first class, postage prepaid, to the address of
such Holder as shown in the Certificate Register.
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SECTION 11.06. 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 11.07. Successors and Assigns; Beneficiaries.
The provisions of this Agreement shall be binding upon and inure to
the benefit of the respective successors and assigns of the parties hereto, and
all such provisions shall inure to the benefit of the Certificateholders. Except
as specifically contemplated by Sections 6.03 and 8.05, no other person,
including, without limitation, any Mortgagor, shall be entitled to any benefit
or equitable right, remedy or claim under this Agreement.
SECTION 11.08. Article and Section Headings.
The article and section headings herein are for convenience of
reference only, and shall not limit or otherwise affect the meaning hereof.
SECTION 11.09. Notices to the Rating Agencies.
(a) The Trustee shall promptly provide notice to each Rating Agency
with respect to each of the following of which it has actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Event of Default hereunder that has not
been cured;
(iii) the resignation or termination of the Master Servicer, the
Special Servicer or the REMIC Administrator and the appointment of a
successor;
(iv) any change in the location of the Distribution Account;
(v) the final payment to any Class of Certificateholders; and
(vi) the repurchase of any Mortgage Loan by the Mortgage Loan Seller
or the Additional Warranting Party, as applicable, pursuant to Section
2.03.
(b) The Master Servicer shall promptly provide notice to each Rating
Agency with respect to each of the following of which it has actual knowledge:
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(i) the resignation or removal of the Trustee and the appointment of a
successor;
(ii) any change in the location of the Certificate Account;
(iii) any event that would result in the voluntary or involuntary
termination of any insurance of the accounts of the Trustee;
(iv) any material casualty at or condemnation or eminent domain
proceeding in respect of a Mortgaged Property; and
(v) the vacating by an anchor tenant of a retail Mortgaged Property.
(c) Each of the Master Servicer and the Special Servicer, as the case
may be, shall furnish to each Rating Agency such information with respect to the
Mortgage Loans as the Rating Agency shall reasonably request and which the
Master Servicer or the Special Servicer, as the case may be, can reasonably
provide.
(d) Each of the Master Servicer and the Special Servicer shall
promptly furnish to each Rating Agency copies of the following:
(i) each of its annual statements as to compliance described in
Section 3.13; and
(ii) each of its annual independent public accountants' servicing
reports described in Section 3.14, if any.
In addition, upon request, each of the Master Servicer and the Special Servicer
shall promptly furnish to each Rating Agency copies or summaries (in such format
as will be acceptable to the Rating Agency) of any of the written reports
(including, without limitation, reports regarding property inspections)
prepared, and any of the quarterly and annual operating statements, rent rolls
and financial statements collected, by it pursuant to Section 3.12(b) or Section
4.02(b).
(e) The Trustee shall promptly furnish to each Rating Agency on a
monthly basis copies of the statements to the Holders of the REMIC II Regular
Certificates required by the first paragraph of Section 4.02(a).
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers thereunto duly authorized, in each
case as of the day and year first above written.
MORTGAGE CAPITAL FUNDING, INC.,
Sponsor
By:__________________________________
Name:________________________________
Title:_______________________________
CITICORP REAL ESTATE, INC.,
Mortgage Loan Seller
By:__________________________________
Name:________________________________
Title:_______________________________
NATIONSBANC MORTGAGE CAPITAL CORPORATION,
Additional Warranting Party
By:__________________________________
Name:________________________________
Title:_______________________________
GMAC COMMERCIAL MORTGAGE CORPORATION,
Master Servicer and Special Servicer
By:__________________________________
Name:________________________________
Title:_______________________________
<PAGE>
-192-
LASALLE NATIONAL BANK,
Trustee and REMIC Administrator
By:__________________________________
Name:________________________________
Title:_______________________________
ABN AMRO BANK N.V.,
Fiscal Agent
By:__________________________________
Name:________________________________
Title:_______________________________
By:__________________________________
Name:________________________________
Title:_______________________________
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ______ day of December, 1996 before me, a notary public in and
for said State, personally appeared ________________ known to me to be a
___________ of MORTGAGE CAPITAL FUNDING, INC., one of the entities that executed
the within instrument, and also known to me to be the person who executed it on
behalf of such entity, and acknowledged to me that such entity executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
______________________________
Notary Public
[Notarial Seal]
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the _____ day of December, 1996, before me, a notary public in and
for said State, personally appeared ________________ known to me to be an
_______________ of CITICORP REAL ESTATE, INC., one of the entities that executed
the within instrument, and also known to me to be the person who executed it on
behalf of such entity, and acknowledged to me that such entity executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
______________________________
Notary Public
[Notarial Seal]
<PAGE>
STATE OF )
) ss.:
COUNTY OF )
On the ______ day of December, 1996, before me, a notary public in and
for said State, personally appeared ___________________ known to me to be a of
GMAC COMMERCIAL MORTGAGE CORPORATION, one of the entities that executed the
within instrument, and also known to me to be the person who executed it on
behalf of such entity, and acknowledged to me that such entity executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
______________________________
Notary Public
[Notarial Seal]
<PAGE>
STATE OF )
) ss.:
COUNTY OF )
On the ______ day of December, 1996, before me, a notary public in and
for said State, personally appeared ___________________ known to me to be a of
NATIONSBANC MORTGAGE CAPITAL CORPORATION, one of the entities that executed the
within instrument, and also known to me to be the person who executed it on
behalf of such entity, and acknowledged to me that such entity executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
______________________________
Notary Public
[Notarial Seal]
<PAGE>
STATE OF )
) ss.:
COUNTY OF )
On the _____ day of December, 1996, before me, a notary public in and
for said State, personally appeared ________________ known to me to be a
_________________ of LASALLE NATIONAL BANK, one of the entities that executed
the within instrument, and also known to me to be the person who executed it on
behalf of such entity, and acknowledged to me that such entity executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
______________________________
Notary Public
[Notarial Seal]
<PAGE>
STATE OF )
) ss.:
COUNTY OF )
On the _____ day of December, 1996, before me, a notary public in and
for said State, personally appeared ________________ known to me to be a
_________________ of ABN AMRO BANK N.V., and _________________ known to me to be
a ______________ of ABN AMRO BANK N,V, one of the entities that executed the
within instrument, and also known to me to be the persons who executed it on
behalf of such entity, and acknowledged to me that such entity executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
______________________________
Notary Public
[Notarial Seal]
<PAGE>
EXHIBIT A-1
FORM OF CLASS X CERTIFICATE
CLASS X MULTIFAMILY/COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1996-MC2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial "whole" mortgage loans (the "Mortgage Loans"), such pool being formed
and sold by
MORTGAGE CAPITAL FUNDING, INC.
Pass-Through Rate: Variable Certificate Notional Amount of this
Class X Certificate as of the Issue
Date: $458,055,542
Date of Pooling and Servicing Class Notional Amount of all the
Agreement: December 1, 1996 Class X Certificates as of the Issue
Date: $458,055,542
Cut-off Date: December 1, 1996 Aggregate unpaid principal balance of
the Mortgage Pool as of the Cut-off
Date, after deducting payments of
Issue Date: December 19, 1996 principal due on or before such date:
$458,055,542
First Distribution Date: Trustee and REMIC Administrator:
January 21, 1997 LaSalle National Bank
Master Servicer: Mortgage Loan Seller:
GMAC Commercial Mortgage Corporation Citicorp Real Estate, Inc.
Special Servicer: Fiscal Agent:
GMAC Commercial Mortgage Corporation ABN AMRO Bank N.V.
Certificate No. X-1 CUSIP No. 61910D CJ 9
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE SPONSOR,
THE TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
<PAGE>
-2-
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MORTGAGE
CAPITAL FUNDING, INC., CITICORP REAL ESTATE, INC., LASALLE NATIONAL BANK, ABN
AMRO BANK N.V., GMAC COMMERCIAL MORTGAGE CORPORATION OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE HAS NOT BEEN 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 5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, MAY BE MADE EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED
HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE. THE
FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE U.S.
FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS CERTIFICATE.
THE ISSUE DATE OF THIS CERTIFICATE IS DECEMBER 19, 1996. ASSUMING THAT THE
MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF PREPAYMENT USED SOLELY FOR THE
PURPOSES OF APPLYING THE OID RULES TO THE CERTIFICATES EQUAL TO A CPR OF 0% (THE
"PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN
<PAGE>
-3-
$5,280.52 OF OID PER $100,000 OF INITIAL CERTIFICATE NOTIONAL AMOUNT, THE YIELD
TO MATURITY IS 9.041% PER ANNUM AND THE AMOUNT OF OID ATTRIBUTABLE TO THE
INITIAL ACCRUAL PERIOD IS NO MORE THAN $2.90 PER $100,000 OF INITIAL CERTIFICATE
NOTIONAL AMOUNT, COMPUTED UNDER THE EXACT METHOD. NO REPRESENTATION IS MADE THAT
THE MORTGAGE LOANS WILL NOT PREPAY OR THAT, IF THEY DO, THEY WILL PREPAY AT ANY
PARTICULAR RATE.
THIS CERTIFICATE DOES NOT HAVE A CERTIFICATE PRINCIPAL BALANCE AND DOES NOT
ENTITLE THE HOLDER HEREOF TO ANY DISTRIBUTIONS OF PRINCIPAL. THE HOLDER HEREOF
WILL BE ENTITLED TO DISTRIBUTIONS OF INTEREST ACCRUED AS PROVIDED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN ON THE CERTIFICATE NOTIONAL AMOUNT OF
THIS CERTIFICATE, WHICH AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class X Certificate (obtained by dividing
the notional principal amount of this Class X Certificate (its "Certificate
Notional Amount") as of the Issue Date by the aggregate notional principal
balance of all the Class X Certificates (their "Class Notional Amount") as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class X Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Mortgage
Capital Funding, Inc., as Sponsor, Citicorp Real Estate, Inc., as Mortgage Loan
Seller, NationsBanc Mortgage Capital Corporation, as Additional Warranting
Party, GMAC Commercial Mortgage Corporation, as Master Servicer and as Special
Servicer, LaSalle National Bank as Trustee and REMIC Administrator, and ABN AMRO
Bank N.V. as Fiscal Agent. To the extent not defined herein, the capitalized
terms used herein have the respective meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 20th day of each month or, if such 20th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (as to the Class
X Certificates, the "Record Date"), in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of the Class X Certificates on the applicable
Distribution Date pursuant to the Agreement. All distributions made under the
Agreement on any Class X Certificate will be made by the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto at a bank or other entity having appropriate facilities therefor, if
such Certificateholder shall have provided the Trustee with written wiring
instructions no less than five Business Days prior to the Record Date for such
distribution (which wiring instructions may be in the form of a
<PAGE>
-4-
standing order applicable to all subsequent distributions as well), or otherwise
by check mailed to the address of such Certificateholder appearing in the
Certificate Register. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
offices of the Certificate Registrar appointed as provided in the Agreement or
such other location as may be specified in such notice.
The Sponsor's Multifamily/Commercial Mortgage Pass-Through
Certificates, Series 1996-MC2 (the "Certificates") are limited in right of
distribution to certain collections and recoveries respecting the Mortgage
Loans, all as more specifically set forth herein and in the Agreement. As
provided in the Agreement, withdrawals from the Certificate Account, the
Distribution Account and, if established, the REO Account may be made from time
to time for purposes other than, and, in certain cases, prior to, distributions
to Certificateholders, such purposes including the reimbursement of advances
made, or certain expenses incurred, with respect to the Mortgage Loans and the
payment of interest on such advances and expenses.
The Class X Certificates are issuable in fully registered form only
without coupons in minimum denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, Class X
Certificates are exchangeable for new Class X Certificates in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
No transfer of any Class X Certificate shall be made unless that
transfer is made pursuant to an effective registration statement under the
Securities Act, and effective registration or qualification under applicable
state securities laws, or is made in a transaction which does not require such
registration or qualification. In the event a transfer of any Class X
Certificate (other than in connection with the initial issuance thereof or the
initial transfer thereof by the Sponsor or any Affiliate of the Sponsor and
other than a Class X Certificate which constitutes a Book-Entry Certificate) is
to be made without registration under the Securities Act, the Certificate
Registrar shall refuse to register such transfer unless it receives the
following: (i) a certificate from the Certificateholder desiring to effect such
transfer substantially in the form attached as Exhibit B-1 to the Agreement; or
(ii) a certificate from the Certificateholder desiring to effect such transfer
substantially in the form attached as Exhibit B-2 to the Agreement and a
certificate from such Certificateholder's prospective transferee substantially
in the form attached either as Exhibit B-3 or Exhibit B-4 to the Agreement; or
(iii) an opinion of counsel satisfactory to the Certificate Registrar to the
effect that such transfer may 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. If a transfer of any interest in any Class X 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 thereof or a transfer of
any interest therein by the Sponsor 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 B-5 to the Agreement or as Exhibit
B-6 to the Agreement; or (ii) an opinion of
<PAGE>
-5-
counsel to the effect that such transfer may be made without registration under
the Securities Act (which opinion of counsel shall not be an expense of the
Trust Fund or of the Sponsor, the Mortgage Loan Seller, the Master Servicer, the
Special Servicer, the Trustee, the Fiscal Agent, the REMIC Administrator or the
Certificate Registrar in their respective capacities as such). None of the
Sponsor, the Trustee or the Certificate Registrar is obligated to register or
qualify the Class X Certificates under the Securities Act or any other
securities law or to take any action not otherwise required under this Agreement
to permit the transfer of any Class X Certificate without registration or
qualification. Any Holder or Certificate Owner of a Class X Certificate desiring
to effect such a transfer shall, and does hereby agree to, indemnify the
Sponsor, the Trustee, the Fiscal Agent, the REMIC Administrator and the
Certificate Registrar against any liability that may result if the transfer is
not so exempt or is not made in accordance with such federal and state laws.
No transfer of a Class X Certificate or any interest therein shall be
made under any circumstances (i) to any employee benefit plan or other
retirement arrangement, including individual retirement accounts and annuities,
Keogh plans and collective investment funds and separate accounts in which such
plans, accounts or arrangements are invested, that is subject to ERISA or the
Code (each, a "Plan"), or (ii) to any Person who is directly or indirectly
purchasing such Certificate or interest therein on behalf of, as named fiduciary
of, as trustee of, or with "plan assets" of a Plan within the meaning of the
Department of Labor regulation promulgated at 29 C.F.R. ss.2510.3-101, unless:
(x) in the case of a Class X Certificate or interest therein being acquired by
or on behalf of a Plan in reliance on Prohibited Transaction Exemption 90-88 or
93-31, such Plan certifies in writing to the Certificate Owner that is
transferring such Class X Certificate or, if Definitive Certificates have been
issued in respect of the Class X Certificates, to the Certificate Registrar that
such Plan (1) is an accredited investor as defined in Rule 501(a)(1) of
Regulation D of the Securities Act, (2) is not sponsored (within the meaning of
Section 3(16)(B) of ERISA) by the Trustee, the Fiscal Agent, the Sponsor, the
Mortgage Loan Seller, the Additional Warranting Party, any Exemption-Favored
Party, the Master Servicer, the Special Servicer, the REMIC Administrator, any
Sub-Servicer or any Mortgagor with respect to Mortgage Loans constituting more
than 5% of the aggregate unamortized principal balance of the Mortgage Loans
determined on the date of the initial issuance of the Certificates, or by any
Affiliate of any such Person, and (3) agrees that it will obtain from each of
its Transferees (A) a written representation that such Transferee, if a Plan,
satisfies the requirements of the immediately preceding clauses (x)(1) and
(x)(2), together with a written agreement that such Transferee will obtain from
each of its Transferees that are Plans a similar written representation
regarding satisfaction of the requirements of the immediately preceding clauses
(x)(1) and (x)(2) and a written agreement substantially the same as that
described in this clause (x)(3); or (y) for so long as the Class X Certificates
are held as Book- Entry Certificates, the purchase and holding of the Class X
Certificates or interest therein being acquired by a Plan is exempt from the
prohibited transaction provisions of Section 406 of ERISA and Section 4975 of
the Code under Sections I and III of Prohibited Transaction Class Exemption
95-60; in the case of a Class X Certificate that is held as a Definitive
Certificate, the prospective Transferee provides the Certificate Registrar with
either: (1) a certification of facts and an opinion of counsel, obtained at the
expense of such potential transferee, which establish to the satisfaction of the
Certificate Registrar that such transfer will not result in a violation of
<PAGE>
-6-
Section 406 of ERISA or Section 4975 of the Code, will not result in the
imposition of an excise tax under Section 4975 of the Code and will not subject
the Trustee, Master Servicer or Special Servicer to any obligation in addition
to those undertaken in this Agreement, or (2) a certification that the purchase,
holding and transfer of such Certificate or interest therein is exempt from the
prohibited transaction provisions of Section 406 of ERISA and Section 4975 of
the Code under Sections I and III of Prohibited Transaction Class Exemption
95-60. Each Person who acquires any Class X Certificate or interest therein
(unless it shall have delivered the opinion of counsel and/or one of the
certifications referred to in the preceding sentence) shall be deemed to have
certified that: (i) it is neither a Plan nor any Person who is directly or
indirectly purchasing such Certificate or interest therein on behalf of, as
named fiduciary of, as trustee of, or with assets of a Plan, or (ii)
alternatively, that the purchase and holding of such Certificate or interest
therein is exempt from the prohibited transaction provisions of Section 406 of
ERISA and Section 4975 of the Code under Prohibited Transaction Exemption 90-88,
Prohibited Transaction Exemption 93-31 or Sections I and III of Prohibited
Transaction Class Exemption 95-60.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class X Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No service charge will be imposed for any registration of transfer or
exchange of Class X Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
X Certificates.
Notwithstanding the foregoing, for so long as this Certificate is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC, transfers of interests in this Certificate
shall be made through the book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of
transfer, the Sponsor, the Mortgage Loan Seller, the Additional Warranting
Party, the Master Servicer, the Special Servicer, the Trustee, the Fiscal Agent,
the REMIC Administrator, the Certificate Registrar and any agents of any of them
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Sponsor, the Mortgage Loan Seller, the
Additional Warranting Party, the Master Servicer, the Special Servicer, the
Trustee, the Fiscal Agent, the REMIC Administrator, the Certificate Registrar or
any such agent shall be affected by notice to the contrary.
The Trust Fund and the obligations created by the Agreement shall
terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on
<PAGE>
-7-
behalf of the Trustee and required to be distributed to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan or REO Property
remaining in the Trust Fund, and (ii) the purchase by the Master Servicer or by
any Majority Certificateholder of the Controlling Class (other than the Sponsor
or the Mortgage Loan Seller) at a price determined as provided in the Agreement
of all Mortgage Loans and any REO Properties remaining in the Trust Fund. The
Agreement permits, but does not require, any such Majority Certificateholder or
the Master Servicer to purchase from the Trust Fund all Mortgage Loans and any
REO Properties remaining therein. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Pool at the time of
purchase being less than 1% of the initial aggregate Stated Principal Balance of
the Mortgage Pool specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Sponsor, the Mortgage Loan Seller, the Additional Warranting Party, the Master
Servicer, the Special Servicer, the Trustee, the Fiscal Agent, and the REMIC
Administrator thereunder and the rights of the Certificateholders thereunder, at
any time by the Sponsor, the Mortgage Loan Seller, the Additional Warranting
Party, the Master Servicer, the Special Servicer, the Trustee, the Fiscal Agent,
and the REMIC Administrator with the consent of the Holders of Certificates
entitled to at least 51% of the Voting Rights allocated to the affected Classes.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
circumstances, including any amendment necessary to maintain the status of
designated portions of REMIC I or REMIC II as a REMIC, without the consent of
the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it
will look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal
laws of the State of New York applicable to agreements made and to be performed
in said State, and the obligations, rights and remedies of the Holder hereof
shall be determined in accordance with such laws.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class X Certificates referred to in the
within-mentioned Agreement.
Dated:
LaSalle National Bank,
as Certificate Registrar
By:____________________________________
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________
______________________________________________________________
______________________________________________________________
(please print or typewrite name and address
including postal zip code of assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Multifamily/Commercial Mortgage Pass-Through Certificate and hereby authorize(s)
the registration of transfer of such interest to the above named assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Multifamily/Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and delivery of such Multifamily/Commercial Mortgage
Pass-Through Certificate to the following address:_____________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
__________________________________________
Signature by or on behalf of Assignor
__________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to _________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________.
Distributions made by check (such check to be made payable to
____________________) and all applicable statements and notices should be mailed
to ____________________________________________________________________________.
This information is provided by ___________________________, the
assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT A-2
FORM OF CLASS A-1 CERTIFICATE
CLASS A-1 MULTIFAMILY/COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1996-MC2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial "whole" mortgage loans (the "Mortgage Loans"), such pool being formed
and sold by
MORTGAGE CAPITAL FUNDING, INC.
Pass-Through Rate: 6.758% per Certificate Principal Balance of this
annum Class A-1 Certificate as of the Issue
Date: $132,607,079
Date of Pooling and Servicing Class Principal Balance of all the
Agreement: December 1, 1996 Class A-1 Certificates as of the Issue
Date: $132,607,079
Cut-off Date: December 1, 1996 Aggregate unpaid principal balance
of the Mortgage Pool as of the Cut-off
Issue Date: December 19, 1996 Date, after deducting payments of
principal due on or before such date:
First Distribution Date: $458,055,542
January 21, 1997
Master Servicer: Trustee and REMIC Administrator:
GMAC Commercial Mortgage Corporation LaSalle National Bank
Special Servicer: Mortgage Loan Seller:
GMAC Commercial Mortgage Corporation Citicorp Real Estate, Inc.
Fiscal Agent:
ABN AMRO Bank N.V.
Certificate No. A-1-1 CUSIP No. 61910D BU 5
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE SPONSOR,
THE TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
<PAGE>
-2-
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MORTGAGE
CAPITAL FUNDING, INC., CITICORP REAL ESTATE, INC., LASALLE NATIONAL BANK, ABN
AMRO BANK N.V., GMAC COMMERCIAL MORTGAGE CORPORATION OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" (A "REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE CODE.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. IN ADDITION, FOLLOWING THE
DATE ON WHICH THE AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS B, CLASS
C, CLASS D, CLASS E, CLASS F, CLASS G AND CLASS H CERTIFICATES OF THE SAME
SERIES IS REDUCED TO ZERO, THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE
MAY BE REDUCED IN CONNECTION WITH LOSSES ON THE MORTGAGE LOANS AND CERTAIN
UNANTICIPATED EXPENSES. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class A-1 Certificate (obtained by
dividing the principal balance of this Class A-1 Certificate (its "Certificate
Principal Balance") as of the Issue Date by the aggregate principal balance of
all the Class A-1 Certificates (their "Class Principal Balance") as of the Issue
Date) in that certain beneficial ownership interest evidenced by all the Class
A-1 Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Mortgage Capital
Funding, Inc., as Sponsor, Citicorp Real Estate, Inc., as Mortgage Loan Seller,
NationsBanc Mortgage Capital Corporation, as Additional Warranting Party, GMAC
Commercial Mortgage Corporation, as Master Servicer and as Special Servicer,
LaSalle National Bank as Trustee and REMIC Administrator, and ABN AMRO Bank N.V.
as Fiscal Agent. To the extent not defined herein, the capitalized terms used
herein have the respective meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement
<PAGE>
-3-
the Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 20th day of each month or, if such 20th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (as to the Class
A-1 Certificates, the "Record Date"), in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of the Class A-1 Certificates on the applicable
Distribution Date pursuant to the Agreement. All distributions made under the
Agreement on any Class A-1 Certificate will be made by the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto at a bank or other entity having appropriate facilities therefor, if
such Certificateholder shall have provided the Trustee with written wiring
instructions no less than five Business Days prior to the Record Date for such
distribution (which wiring instructions may be in the form of a standing order
applicable to all subsequent distributions as well), or otherwise by check
mailed to the address of such Certificateholder appearing in the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
(determined without regard to any possible future reimbursement of any Realized
Loss or Additional Trust Fund Expense previously allocated to this Certificate)
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
offices of the Certificate Registrar appointed as provided in the Agreement or
such other location as may be specified in such notice. Also notwithstanding the
foregoing, any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Additional Trust Fund Expense previously
allocated to this Certificate, which reimbursement is to occur after the date on
which this Certificate is surrendered as contemplated by the preceding sentence,
will be made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Sponsor's Multifamily/Commercial Mortgage Pass-Through
Certificates, Series 1996-MC2 (the "Certificates") are limited in right of
distribution to certain collections and recoveries respecting the Mortgage
Loans, all as more specifically set forth herein and in the Agreement. As
provided in the Agreement, withdrawals from the Certificate Account, the
Distribution Account and, if established, the REO Account may be made from time
to time for purposes other than, and, in certain cases, prior to, distributions
to Certificateholders, such purposes including the reimbursement of advances
made, or certain expenses incurred, with respect to the Mortgage Loans and the
payment of interest on such advances and expenses.
<PAGE>
-4-
The Class A-1 Certificates are issuable in fully registered form only
without coupons in minimum denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, Class A-1
Certificates are exchangeable for new Class A-1 Certificates in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class A-1 Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No service charge will be imposed for any registration of transfer or
exchange of Class A-1 Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
A-1 Certificates.
Notwithstanding the foregoing, for so long as this Certificate is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC, transfers of interests in this Certificate
shall be made through the book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of
transfer, the Sponsor, the Mortgage Loan Seller, the Additional Warranting
Party, the Master Servicer, the Special Servicer, the Trustee, the Fiscal Agent,
the REMIC Administrator, the Certificate Registrar and any agents of any of them
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Sponsor, the Mortgage Loan Seller, the
Additional Warranting Party, the Master Servicer, the Special Servicer, the
Trustee, the Fiscal Agent, the REMIC Administrator, the Certificate Registrar or
any such agent shall be affected by notice to the contrary.
The Trust Fund and the obligations created by the Agreement shall
terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, and (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Sponsor or the
Mortgage Loan Seller) at a price determined as provided in the Agreement of all
Mortgage Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, any such Majority Certificateholder or the Master
Servicer to purchase from the Trust Fund all Mortgage Loans and any REO
Properties remaining therein. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Pool at the time
<PAGE>
-5-
of purchase being less than 1% of the initial aggregate Stated Principal Balance
of the Mortgage Pool specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Sponsor, the Mortgage Loan Seller, the Additional Warranting Party, the Master
Servicer, the Special Servicer, the Trustee, the Fiscal Agent, and the REMIC
Administrator thereunder and the rights of the Certificateholders thereunder, at
any time by the Sponsor, the Mortgage Loan Seller, the Additional Warranting
Party, the Master Servicer, the Special Servicer, the Trustee, the Fiscal Agent,
and the REMIC Administrator with the consent of the Holders of Certificates
entitled to at least 51% of the Voting Rights allocated to the affected Classes.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
circumstances, including any amendment necessary to maintain the status of REMIC
I or REMIC II as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it
will look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal
laws of the State of New York applicable to agreements made and to be performed
in said State, and the obligations, rights and remedies of the Holder hereof
shall be determined in accordance with such laws.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-1 Certificates referred to in the
within-mentioned Agreement.
Dated:
LaSalle National Bank,
as Certificate Registrar
By:________________________________
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________
______________________________________________________________
______________________________________________________________
(please print or typewrite name and address
including postal zip code of assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Multifamily/Commercial Mortgage Pass-Through Certificate and hereby authorize(s)
the registration of transfer of such interest to the above named assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Multifamily/Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and delivery of such Multifamily/Commercial Mortgage
Pass-Through Certificate to the following address:_____________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
__________________________________________
Signature by or on behalf of Assignor
__________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to _________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________.
Distributions made by check (such check to be made payable to
____________________) and all applicable statements and notices should be mailed
to ____________________________________________________________________________.
This information is provided by ___________________________, the
assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT A-3
FORM OF CLASS A-2 CERTIFICATE
CLASS A-2 MULTIFAMILY/COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1996-MC2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial "whole" mortgage loans (the "Mortgage Loans"), such pool being formed
and sold by
MORTGAGE CAPITAL FUNDING, INC.
Pass-Through Rate: Certificate Principal Balance of this
6.909% per annum Class A-2 Certificate as of the Issue
Date: $24,276,943
Date of Pooling and Servicing Class Principal Balance of all the
Agreement: December 1, 1996 Class A-2 Certificates as of the Issue
Date: $24,276,943
Cut-off Date: December 1, 1996 Aggregate unpaid principal balance of
the Mortgage Pool as of the Cut-off
Issue Date: December 19, 1996 Date, after deducting payments of
principal due on or before such date:
First Distribution Date: $458,055,542
January 21, 1997
Master Servicer: Trustee and REMIC Administrator:
GMAC Commercial Mortgage Corporation LaSalle National Bank
Special Servicer: Mortgage Loan Seller:
GMAC Commercial Mortgage Corporation Citicorp Real Estate, Inc.
Fiscal Agent:
ABN AMRO Bank N.V.
Certificate No. A-2-1 CUSIP No. 61910D BV 3
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE SPONSOR,
THE TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
<PAGE>
-2-
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MORTGAGE
CAPITAL FUNDING, INC., CITICORP REAL ESTATE, INC., LASALLE NATIONAL BANK, ABN
AMRO BANK N.V., GMAC COMMERCIAL MORTGAGE CORPORATION OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" (A "REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE CODE.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. IN ADDITION, FOLLOWING THE
DATE ON WHICH THE AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS B, CLASS
C, CLASS D, CLASS E, CLASS F, CLASS G AND CLASS H CERTIFICATES OF THE SAME
SERIES IS REDUCED TO ZERO, THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE
MAY BE REDUCED IN CONNECTION WITH LOSSES ON THE MORTGAGE LOANS AND CERTAIN
UNANTICIPATED EXPENSES. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class A-2 Certificate (obtained by
dividing the principal balance of this Class A-2 Certificate (its "Certificate
Principal Balance") as of the Issue Date by the aggregate principal balance of
all the Class A-2 Certificates (their "Class Principal Balance") as of the Issue
Date) in that certain beneficial ownership interest evidenced by all the Class
A-2 Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Mortgage Capital
Funding, Inc., as Sponsor, Citicorp Real Estate, Inc., as Mortgage Loan Seller,
NationsBanc Mortgage Capital Corporation, as Additional Warranting Party, GMAC
Commercial Mortgage Corporation, as Master Servicer and as Special Servicer,
LaSalle National Bank as Trustee and REMIC Administrator, and ABN AMRO Bank N.V.
as Fiscal Agent. To the extent not defined herein, the capitalized terms used
herein have the respective meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement
<PAGE>
-3-
the Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 20th day of each month or, if such 20th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (as to the Class
A-2 Certificates, the "Record Date"), in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of the Class A-2 Certificates on the applicable
Distribution Date pursuant to the Agreement. All distributions made under the
Agreement on any Class A-2 Certificate will be made by the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto at a bank or other entity having appropriate facilities therefor, if
such Certificateholder shall have provided the Trustee with written wiring
instructions no less than five Business Days prior to the Record Date for such
distribution (which wiring instructions may be in the form of a standing order
applicable to all subsequent distributions as well), or otherwise by check
mailed to the address of such Certificateholder appearing in the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
(determined without regard to any possible future reimbursement of any Realized
Loss or Additional Trust Fund Expense previously allocated to this Certificate)
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
offices of the Certificate Registrar appointed as provided in the Agreement or
such other location as may be specified in such notice. Also notwithstanding the
foregoing, any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Additional Trust Fund Expense previously
allocated to this Certificate, which reimbursement is to occur after the date on
which this Certificate is surrendered as contemplated by the preceding sentence,
will be made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Sponsor's Multifamily/Commercial Mortgage Pass-Through
Certificates, Series 1996-MC2 (the "Certificates") are limited in right of
distribution to certain collections and recoveries respecting the Mortgage
Loans, all as more specifically set forth herein and in the Agreement. As
provided in the Agreement, withdrawals from the Certificate Account, the
Distribution Account and, if established, the REO Account may be made from time
to time for purposes other than, and, in certain cases, prior to, distributions
to Certificateholders, such purposes including the reimbursement of advances
made, or certain expenses incurred, with respect to the Mortgage Loans and the
payment of interest on such advances and expenses.
<PAGE>
-4-
The Class A-2 Certificates are issuable in fully registered form only
without coupons in minimum denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, Class A-2
Certificates are exchangeable for new Class A-2 Certificates in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class A-2 Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No service charge will be imposed for any registration of transfer or
exchange of Class A-2 Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
A-2 Certificates.
Notwithstanding the foregoing, for so long as this Certificate is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC, transfers of interests in this Certificate
shall be made through the book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of
transfer, the Sponsor, the Mortgage Loan Seller, the Additional Warranting
Party, the Master Servicer, the Special Servicer, the Trustee, the Fiscal Agent,
the REMIC Administrator, the Certificate Registrar and any agents of any of them
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Sponsor, the Mortgage Loan Seller, the
Additional Warranting Party, the Master Servicer, the Special Servicer, the
Trustee, the Fiscal Agent, the REMIC Administrator, the Certificate Registrar or
any such agent shall be affected by notice to the contrary.
The Trust Fund and the obligations created by the Agreement shall
terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund , and (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Sponsor or the
Mortgage Loan Seller) at a price determined as provided in the Agreement of all
Mortgage Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, any such Majority Certificateholder or the Master
Servicer to purchase from the Trust Fund all Mortgage Loans and any REO
Properties remaining therein. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Pool at the time
<PAGE>
-5-
of purchase being less than 1% of the initial aggregate Stated Principal Balance
of the Mortgage Pool specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Sponsor, the Mortgage Loan Seller, the Additional Warranting Party, the Master
Servicer, the Special Servicer, the Trustee, the Fiscal Agent and the REMIC
Administrator thereunder and the rights of the Certificateholders thereunder, at
any time by the Sponsor, the Mortgage Loan Seller, the Additional Warranting
Party, the Master Servicer, the Special Servicer, the Trustee, the Fiscal Agent,
and the REMIC Administrator with the consent of the Holders of Certificates
entitled to at least 51% of the Voting Rights allocated to the affected Classes.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
circumstances, including any amendment necessary to maintain the status of REMIC
I or REMIC II as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it
will look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal
laws of the State of New York applicable to agreements made and to be performed
in said State, and the obligations, rights and remedies of the Holder hereof
shall be determined in accordance with such laws.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-2 Certificates referred to in the
within-mentioned Agreement.
Dated:
LaSalle National Bank,
as Certificate Registrar
By:________________________________
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________
______________________________________________________________
______________________________________________________________
(please print or typewrite name and address
including postal zip code of assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Multifamily/Commercial Mortgage Pass-Through Certificate and hereby authorize(s)
the registration of transfer of such interest to the above named assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Multifamily/Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and delivery of such Multifamily/Commercial Mortgage
Pass-Through Certificate to the following address:_____________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
__________________________________________
Signature by or on behalf of Assignor
__________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to _________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________.
Distributions made by check (such check to be made payable to
____________________) and all applicable statements and notices should be mailed
to ____________________________________________________________________________.
This information is provided by ___________________________, the
assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT A-4
FORM OF CLASS A-3 CERTIFICATE
CLASS A-3 MULTIFAMILY/COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1996-MC2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial "whole" mortgage loans (the "Mortgage Loans"), such pool being formed
and sold by
MORTGAGE CAPITAL FUNDING, INC.
Pass-Through Rate: Certificate Principal Balance of this
7.008% per annum Class A-3 Certificate as of the Issue
Date: $166,045,134
Date of Pooling and Servicing Class Principal Balance of all the
Agreement: December 1, 1996 Class A-3 Certificates as of the Issue
Date $166,045,134
Cut-off Date: December 1, 1996 Aggregate unpaid principal balance of
the Mortgage Pool as of the Cut-off
Issue Date: December 19, 1996 Date, after deducting payments of
principal due on or before such date:
First Distribution Date: $458,055,542
January 21, 1997
Master Servicer: Trustee and REMIC Administrator:
GMAC Commercial Mortgage Corporation LaSalle National Bank
Special Servicer: Mortgage Loan Seller:
GMAC Commercial Mortgage Corporation Citicorp Real Estate, Inc.
Fiscal Agent:
ABN AMRO Bank N.V.
Certificate No. A-3-1 CUSIP No. 61910D BW 1
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE SPONSOR,
THE TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
<PAGE>
-2-
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MORTGAGE
CAPITAL FUNDING, INC., CITICORP REAL ESTATE, INC., LASALLE NATIONAL BANK, ABN
AMRO BANK N.V., GMAC COMMERCIAL MORTGAGE CORPORATION OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. IN ADDITION, FOLLOWING THE
DATE ON WHICH THE AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS B, CLASS
C, CLASS D, CLASS E, CLASS F, CLASS G AND CLASS H CERTIFICATES OF THE SAME
SERIES IS REDUCED TO ZERO, THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE
MAY BE REDUCED IN CONNECTION WITH LOSSES ON THE MORTGAGE LOANS AND CERTAIN
UNANTICIPATED EXPENSES. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class A-3 Certificate (obtained by
dividing the principal balance of this Class A-3 Certificate (its "Certificate
Principal Balance") as of the Issue Date by the aggregate principal balance of
all the Class A-3 Certificates (their "Class Principal Balance") as of the Issue
Date) in that certain beneficial ownership interest evidenced by all the Class
A-3 Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Mortgage Capital
Funding, Inc., as Sponsor, Citicorp Real Estate, Inc., as Mortgage Loan Seller,
NationsBanc Mortgage Capital Corporation, as Additional Warranting Party, GMAC
Commercial Mortgage Corporation, as Master Servicer and as Special Servicer,
LaSalle National Bank, as Trustee and REMIC Administrator, and ABN AMRO Bank
N.V. as Fiscal Agent. To the extent not defined herein, the capitalized terms
used herein have the respective meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement
<PAGE>
-3-
the Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 20th day of each month or, if such 20th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (as to the Class
A-3 Certificates, the "Record Date"), in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of the Class A-3 Certificates on the applicable
Distribution Date pursuant to the Agreement. All distributions made under the
Agreement on any Class A-3 Certificate will be made by the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto at a bank or other entity having appropriate facilities therefor, if
such Certificateholder shall have provided the Trustee with written wiring
instructions no less than five Business Days prior to the Record Date for such
distribution (which wiring instructions may be in the form of a standing order
applicable to all subsequent distributions as well), or otherwise by check
mailed to the address of such Certificateholder appearing in the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
(determined without regard to any possible future reimbursement of any Realized
Loss or Additional Trust Fund Expense previously allocated to this Certificate)
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
offices of the Certificate Registrar appointed as provided in the Agreement or
such other location as may be specified in such notice. Also notwithstanding the
foregoing, any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Additional Trust Fund Expense previously
allocated to this Certificate, which reimbursement is to occur after the date on
which this Certificate is surrendered as contemplated by the preceding sentence,
will be made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Sponsor's Multifamily/Commercial Mortgage Pass-Through
Certificates, Series 1996-MC2 (the "Certificates") are limited in right of
distribution to certain collections and recoveries respecting the Mortgage
Loans, all as more specifically set forth herein and in the Agreement. As
provided in the Agreement, withdrawals from the Certificate Account, the
Distribution Account and, if established, the REO Account may be made from time
to time for purposes other than, and, in certain cases, prior to, distributions
to Certificateholders, such purposes including the reimbursement of advances
made, or certain expenses incurred, with respect to the Mortgage Loans and the
payment of interest on such advances and expenses.
<PAGE>
-4-
The Class A-3 Certificates are issuable in fully registered form only
without coupons in minimum denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, Class A-3
Certificates are exchangeable for new Class A-3 Certificates in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class A-3 Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No service charge will be imposed for any registration of transfer or
exchange of Class A-3 Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
A-3 Certificates.
Notwithstanding the foregoing, for so long as this Certificate is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC, transfers of interests in this Certificate
shall be made through the book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of
transfer, the Sponsor, the Mortgage Loan Seller, the Additional Warranting
Party, the Master Servicer, the Special Servicer, the Trustee, the Fiscal Agent,
the REMIC Administrator, the Certificate Registrar and any agents of any of them
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Sponsor, the Mortgage Loan Seller, the
Additional Warranting Party, the Master Servicer, the Special Servicer, the
Trustee, the Fiscal Agent, the REMIC Administrator, the Certificate Registrar or
any such agent shall be affected by notice to the contrary.
The Trust Fund and the obligations created by the Agreement shall
terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, and (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Sponsor or the
Mortgage Loan Seller) at a price determined as provided in the Agreement of all
Mortgage Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, any such Majority Certificateholder or the Master
Servicer to purchase from the Trust Fund all Mortgage Loans and any REO
Properties remaining therein. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Pool at the time
<PAGE>
-5-
of purchase being less than 1% of the initial aggregate Stated Principal Balance
of the Mortgage Pool specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Sponsor, the Mortgage Loan Seller, the Additional Warranting Party, the Master
Servicer, the Special Servicer, the Trustee, the Fiscal Agent and the REMIC
Administrator thereunder and the rights of the Certificateholders thereunder, at
any time by the Sponsor, the Mortgage Loan Seller, the Additional Warranting
Party, the Master Servicer, the Special Servicer, the Trustee, the Fiscal Agent
and the REMIC Administrator with the consent of the Holders of Certificates
entitled to at least 51% of the Voting Rights allocated to the affected Classes.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
circumstances, including any amendment necessary to maintain the status of REMIC
I or REMIC II as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it
will look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal
laws of the State of New York applicable to agreements made and to be performed
in said State, and the obligations, rights and remedies of the Holder hereof
shall be determined in accordance with such laws.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-3 Certificates referred to in the
within-mentioned Agreement.
Dated:
LaSalle National Bank,
as Certificate Registrar
By:________________________________
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________
______________________________________________________________
______________________________________________________________
(please print or typewrite name and address
including postal zip code of assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Multifamily/Commercial Mortgage Pass-Through Certificate and hereby authorize(s)
the registration of transfer of such interest to the above named assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Multifamily/Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and delivery of such Multifamily/Commercial Mortgage
Pass-Through Certificate to the following address:_____________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
__________________________________________
Signature by or on behalf of Assignor
__________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to _________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________.
Distributions made by check (such check to be made payable to
____________________) and all applicable statements and notices should be mailed
to ____________________________________________________________________________.
This information is provided by ___________________________, the
assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT A-5
FORM OF CLASS B CERTIFICATE
CLASS B MULTIFAMILY/COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1996-MC2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial "whole" mortgage loans (the "Mortgage Loans"), such pool being formed
and sold by
MORTGAGE CAPITAL FUNDING, INC.
Pass-Through Rate: Certificate Principal Balance of this
7.136% per annum Class B Certificate as of the Issue
Date: $27,483,332
Date of Pooling and Servicing Class Principal Balance of all the
Agreement: December 1, 1996 Class B Certificates as of the Issue
Date: $27,483,332
Cut-off Date: December 1, 1996 Aggregate unpaid principal balance of
the Mortgage Pool as of the Cut-off
Issue Date: December 19, 1996 Date, after deducting payments of
principal due on or before such date:
First Distribution Date: $458,055,542
January 21, 1997
Master Servicer: Trustee and REMIC Administrator:
GMAC Commercial Mortgage Corporation LaSalle National Bank
Special Servicer: Mortgage Loan Seller:
GMAC Commercial Mortgage Corporation Citicorp Real Estate, Inc.
Fiscal Agent:
ABN AMRO Bank N.V.
Certificate No. B-1 CUSIP No. 61910D BX 9
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE SPONSOR,
THE TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
<PAGE>
-2-
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MORTGAGE
CAPITAL FUNDING, INC., CITICORP REAL ESTATE, INC., LASALLE NATIONAL BANK, ABN
AMRO BANK N.V., GMAC COMMERCIAL MORTGAGE CORPORATION OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS X, CLASS A-1, CLASS A-2 AND CLASS
A-3 CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT PROVIDED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, MAY BE MADE EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED
HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN FOLLOWING RETIREMENT OF THE
CLASS A-1, CLASS A-2, AND CLASS A-3 CERTIFICATES OF THE SAME SERIES. IN
ADDITION, FOLLOWING THE DATE ON WHICH THE AGGREGATE CERTIFICATE PRINCIPAL
BALANCE OF THE CLASS C, CLASS D, CLASS E, CLASS F, CLASS G AND CLASS H
CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO, THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE REDUCED IN CONNECTION WITH LOSSES ON THE
MORTGAGE LOANS AND CERTAIN UNANTICIPATED EXPENSES.
<PAGE>
-3-
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class B Certificate (obtained by dividing
the principal balance of this Class B Certificate (its "Certificate Principal
Balance") as of the Issue Date by the aggregate principal balance of all the
Class B Certificates (their "Class Principal Balance") as of the Issue Date) in
that certain beneficial ownership interest evidenced by all the Class B
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Mortgage Capital
Funding, Inc., as Sponsor, Citicorp Real Estate, Inc., as Mortgage Loan Seller,
NationsBanc Mortgage Capital Corporation, as Additional Warranting Party, GMAC
Commercial Mortgage Corporation, as Master Servicer and as Special Servicer,
LaSalle National Bank, as Trustee and REMIC Administrator, and ABN AMRO Bank
N.V. as Fiscal Agent. To the extent not defined herein, the capitalized terms
used herein have the respective meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 20th day of each month or, if such 20th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (as to the Class
B Certificates, the "Record Date"), in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of the Class B Certificates on the applicable
Distribution Date pursuant to the Agreement. All distributions made under the
Agreement on any Class B Certificate will be made by the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto at a bank or other entity having appropriate facilities therefor, if
such Certificateholder shall have provided the Trustee with written wiring
instructions no less than five Business Days prior to the Record Date for such
distribution (which wiring instructions may be in the form of a standing order
applicable to all subsequent distributions as well), or otherwise by check
mailed to the address of such Certificateholder appearing in the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
(determined without regard to any possible future reimbursement of any Realized
Loss or Additional Trust Fund Expense previously allocated to this Certificate)
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
offices of the Certificate Registrar appointed as provided in the Agreement or
such other location as may be specified in such notice. Also notwithstanding the
foregoing, any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Additional Trust Fund Expense previously
allocated to this Certificate, which reimbursement is to occur after the date on
which this Certificate is surrendered as contemplated by the preceding sentence,
will be made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
<PAGE>
-4-
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Sponsor's Multifamily/Commercial Mortgage Pass-Through
Certificates, Series 1996-MC2 (the "Certificates") are limited in right of
distribution to certain collections and recoveries respecting the Mortgage
Loans, all as more specifically set forth herein and in the Agreement. As
provided in the Agreement, withdrawals from the Certificate Account, the
Distribution Account and, if established, the REO Account may be made from time
to time for purposes other than, and, in certain cases, prior to, distributions
to Certificateholders, such purposes including the reimbursement of advances
made, or certain expenses incurred, with respect to the Mortgage Loans and the
payment of interest on such advances and expenses.
The Class B Certificates are issuable in fully registered form only
without coupons in minimum denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, Class B
Certificates are exchangeable for new Class B Certificates in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class B Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No transfer of a Class B Certificate or any interest therein shall be
made under any circumstances (i) to any employee benefit plan or other
retirement arrangement, including individual retirement accounts and annuities,
Keogh plans and collective investment funds and separate accounts in which such
plans, accounts or arrangements are invested, that is subject to ERISA or the
Code (each, a "Plan"), or (ii) to any Person who is directly or indirectly
purchasing such Certificate or interest therein on behalf of, as named fiduciary
of, as trustee of, or with "plan assets" of a Plan within the meaning of the
Department of Labor regulation promulgated at 29 C.F.R. ss.2510.3-101, unless:
(x) in the case of a Class B Certificate that constitutes a Book-Entry
Certificate, the purchase and holding of such Certificate or interest therein is
exempt from the prohibited transaction provisions of Section 406 of ERISA and
Section 4975 of the Code under Sections I and III of Prohibited Transaction
Class Exemption 95-60; or (y) in the case of a Class B Certificate that is held
as a Definitive Certificate, the prospective Transferee provides the Certificate
Registrar with either: (1) a certification of facts and an opinion of counsel
which establish to the satisfaction of the Certificate Registrar that such
transfer will not result in a violation of Section 406 of ERISA or Section 4975
of the Code, will not result in the imposition of an excise tax under Section
4975 of the Code or subject the Trustee, Master Servicer or Special Servicer to
any obligation in addition to those undertaken
<PAGE>
-5-
in the Agreement, or (2) a certification that the purchase, holding and transfer
of such Class B Certificate or interest therein is exempt from the prohibited
transaction provisions of Section 406 of ERISA and Section 4975 of the Code
under Sections I and III of Prohibited Transaction Class Exemption 95-60. Each
Person who acquires any Class B Certificate or interest therein (unless it shall
have delivered the opinion of counsel and/or one of the certifications referred
to in the preceding sentence) shall be deemed to have certified that: (i) it is
neither a Plan nor any Person who is directly or indirectly purchasing such
Class B Certificate or interest therein on behalf of, as named fiduciary of, as
trustee of, or with assets of a Plan, or (ii) alternatively, for so long as the
Class B Certificates constitute Book-Entry Certificates, that the purchase and
holding of such Class B Certificate or interest therein is exempt from the
prohibited transaction provisions of Section 406 of ERISA and Section 4975 of
the Code under Sections I and III of Prohibited Transaction Class Exemption
95-60.
No service charge will be imposed for any registration of transfer or
exchange of Class B Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
B Certificates.
Notwithstanding the foregoing, for so long as this Certificate is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC, transfers of interests in this Certificate
shall be made through the book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of
transfer, the Sponsor, the Mortgage Loan Seller, the Additional Warranting
Party, the Master Servicer, the Special Servicer, the Trustee, the Fiscal Agent,
the REMIC Administrator, the Certificate Registrar and any agents of any of them
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Sponsor, the Mortgage Loan Seller, the
Additional Warranting Party, the Master Servicer, the Special Servicer, the
Trustee, the Fiscal Agent, the REMIC Administrator, the Certificate Registrar or
any such agent shall be affected by notice to the contrary.
The Trust Fund and the obligations created by the Agreement shall
terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, and (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Sponsor or the
Mortgage Loan Seller) at a price determined as provided in the Agreement of all
Mortgage Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, any such Majority Certificateholder or the Master
Servicer to purchase from the; Trust Fund all Mortgage Loans and any REO
Properties remaining therein. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Pool at the time
<PAGE>
-6-
of purchase being less than 1% of the initial aggregate Stated Principal Balance
of the Mortgage Pool specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Sponsor, the Mortgage Loan Seller, the Additional Warranting Party, the Master
Servicer, the Special Servicer, the Trustee, the Fiscal Agent and the REMIC
Administrator thereunder and the rights of the Certificateholders thereunder, at
any time by the Sponsor, the Mortgage Loan Seller, the Additional Warranting
Party, the Master Servicer, the Special Servicer, the Trustee, the Fiscal Agent
and the REMIC Administrator with the consent of the Holders of Certificates
entitled to at least 51% of the Voting Rights allocated to the affected Classes.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
circumstances, including any amendment necessary to maintain the status of REMIC
I or REMIC II as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it
will look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal
laws of the State of New York applicable to agreements made and to be performed
in said State, and the obligations, rights and remedies of the Holder hereof
shall be determined in accordance with such laws.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates referred to in the
within-mentioned Agreement.
Dated:
LaSalle National Bank,
as Certificate Registrar
By:________________________________
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________
______________________________________________________________
______________________________________________________________
(please print or typewrite name and address
including postal zip code of assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Multifamily/Commercial Mortgage Pass-Through Certificate and hereby authorize(s)
the registration of transfer of such interest to the above named assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Multifamily/Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and delivery of such Multifamily/Commercial Mortgage
Pass-Through Certificate to the following address:_____________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
__________________________________________
Signature by or on behalf of Assignor
__________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to _________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________.
Distributions made by check (such check to be made payable to
____________________) and all applicable statements and notices should be mailed
to ____________________________________________________________________________.
This information is provided by ___________________________, the
assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT A-6
FORM OF CLASS C CERTIFICATE
CLASS C MULTIFAMILY/COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1996-MC2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial "whole" mortgage loans (the "Mortgage Loans"), such pool being formed
and sold by
MORTGAGE CAPITAL FUNDING, INC.
Pass-Through Rate: Certificate Principal Balance of this
7.224% per annum Class C Certificate as of the Issue
Date: $22,902,777
Date of Pooling and Servicing Class Principal Balance of all the
Agreement: December 1, 1996 Class C Certificates as of the Issue
Date: $22,902,777
Cut-off Date: December 1, 1996 Aggregate unpaid principal balance of
the Mortgage Pool as of the Cut-off
Issue Date: December 19, 1996 Date, after deducting payments of
principal due on or before such date:
First Distribution Date: $458,055,542
January 21, 1997
Master Servicer: Trustee and REMIC Administrator:
GMAC Commercial Mortgage Corporation LaSalle National Bank
Special Servicer: Mortgage Loan Seller:
GMAC Commercial Mortgage Corporation Citicorp Real Estate, Inc.
Fiscal Agent:
ABN AMRO Bank N.V.
Certificate No. C-1 CUSIP No. 61910D BY 7
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE SPONSOR,
THE TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
<PAGE>
-2-
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MORTGAGE
CAPITAL FUNDING, INC., CITICORP REAL ESTATE, INC., LASALLE NATIONAL BANK, ABN
AMRO BANK N.V., GMAC COMMERCIAL MORTGAGE CORPORATION OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS X, CLASS A-1, CLASS A-2, CLASS A-3
AND CLASS B CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT PROVIDED IN
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, MAY BE MADE EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED
HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN FOLLOWING RETIREMENT OF THE
CLASS A-1, CLASS A-2, CLASS A-3 AND CLASS B CERTIFICATES OF THE SAME SERIES. IN
ADDITION, FOLLOWING THE DATE ON WHICH THE AGGREGATE CERTIFICATE PRINCIPAL
BALANCE OF THE CLASS D, CLASS E, CLASS F, CLASS G AND CLASS H CERTIFICATES OF
THE SAME SERIES IS REDUCED TO ZERO, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE REDUCED IN CONNECTION WITH LOSSES ON THE MORTGAGE LOANS AND
CERTAIN UNANTICIPATED EXPENSES.
<PAGE>
-3-
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class C Certificate (obtained by dividing
the principal balance of this Class C Certificate (its "Certificate Principal
Balance") as of the Issue Date by the aggregate principal balance of all the
Class C Certificates (their "Class Principal Balance") as of the Issue Date) in
that certain beneficial ownership interest evidenced by all the Class C
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Mortgage Capital
Funding, Inc., as Sponsor, Citicorp Real Estate, Inc., as Mortgage Loan Seller,
NationsBanc Mortgage Capital Corporation, as Additional Warranting Party, GMAC
Commercial Mortgage Corporation, as Master Servicer and as Special Servicer,
LaSalle National Bank, as Trustee and REMIC Administrator, and ABN AMRO Bank
N.V. as Fiscal Agent. To the extent not defined herein, the capitalized terms
used herein have the respective meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 20th day of each month or, if such 20th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (as to the Class
C Certificates, the "Record Date"), in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of the Class C Certificates on the applicable
Distribution Date pursuant to the Agreement. All distributions made under the
Agreement on any Class C Certificate will be made by the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto at a bank or other entity having appropriate facilities therefor, if
such Certificateholder shall have provided the Trustee with written wiring
instructions no less than five Business Days prior to the Record Date for such
distribution (which wiring instructions may be in the form of a standing order
applicable to all subsequent distributions as well), or otherwise by check
mailed to the address of such Certificateholder appearing in the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
(determined without regard to any possible future reimbursement of any Realized
Loss or Additional Trust Fund Expense previously allocated to this Certificate)
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
offices of the Certificate Registrar appointed as provided in the Agreement or
such other location as may be specified in such notice. Also notwithstanding the
foregoing, any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Additional Trust Fund Expense previously
allocated to this Certificate, which reimbursement is to occur after the date on
which this Certificate is surrendered as contemplated by the preceding sentence,
will be made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
<PAGE>
-4-
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Sponsor's Multifamily/Commercial Mortgage Pass-Through
Certificates, Series 1996-MC2 (the "Certificates") are limited in right of
distribution to certain collections and recoveries respecting the Mortgage
Loans, all as more specifically set forth herein and in the Agreement. As
provided in the Agreement, withdrawals from the Certificate Account, the
Distribution Account and, if established, the REO Account may be made from time
to time for purposes other than, and, in certain cases, prior to, distributions
to Certificateholders, such purposes including the reimbursement of advances
made, or certain expenses incurred, with respect to the Mortgage Loans and the
payment of interest on such advances and expenses.
The Class C Certificates are issuable in fully registered form only
without coupons in minimum denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, Class C
Certificates are exchangeable for new Class C Certificates in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class C Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No transfer of a Class C Certificate or any interest therein shall be
made under any circumstances (i) to any employee benefit plan or other
retirement arrangement, including individual retirement accounts and annuities,
Keogh plans and collective investment funds and separate accounts in which such
plans, accounts or arrangements are invested, that is subject to ERISA or the
Code (each, a "Plan"), or (ii) to any Person who is directly or indirectly
purchasing such Certificate or interest therein on behalf of, as named fiduciary
of, as trustee of, or with "plan assets" of a Plan within the meaning of the
Department of Labor regulation promulgated at 29 C.F.R. ss.2510.3-101, unless:
(x) in the case of a Class C Certificate that constitutes a Book-Entry
Certificate, the purchase and holding of such Certificate or interest therein is
exempt from the prohibited transaction provisions of Section 406 of ERISA and
Section 4975 of the Code under Sections I and III of Prohibited Transaction
Class Exemption 95-60; or (y) in the case of a Class C Certificate that is held
as a Definitive Certificate, the prospective Transferee provides the Certificate
Registrar with either: (1) a certification of facts and an opinion of counsel
which establish to the satisfaction of the Certificate Registrar that such
transfer will not result in a violation of Section 406 of ERISA or Section 4975
of the Code, will not result in the imposition of an excise tax under Section
4975 of the Code or subject the Trustee, Master Servicer or Special Servicer to
any obligation in addition to those undertaken
<PAGE>
-5-
in the Agreement, or (2) a certification that the purchase, holding and transfer
of such Class C Certificate or interest therein is exempt from the prohibited
transaction provisions of Section 406 of ERISA and Section 4975 of the Code
under Sections I and III of Prohibited Transaction Class Exemption 95-60. Each
Person who acquires any Class C Certificate or interest therein (unless it shall
have delivered the opinion of counsel and/or one of the certifications referred
to in the preceding sentence) shall be deemed to have certified that: (i) it is
neither a Plan nor any Person who is directly or indirectly purchasing such
Class C Certificate or interest therein on behalf of, as named fiduciary of, as
trustee of, or with assets of a Plan, or (ii) alternatively, for so long as the
Class C Certificates constitute Book-Entry Certificates, that the purchase and
holding of such Class C Certificate or interest therein is exempt from the
prohibited transaction provisions of Section 406 of ERISA and Section 4975 of
the Code under Sections I and III of Prohibited Transaction Class Exemption
95-60.
No service charge will be imposed for any registration of transfer or
exchange of Class C Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
C Certificates.
Prior to due presentment of this Certificate for registration of
transfer, the Sponsor, the Mortgage Loan Seller, the Additional Warranting
Party, the Master Servicer, the Special Servicer, the Trustee, the Fiscal Agent,
the REMIC Administrator, the Certificate Registrar and any agents of any of them
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Sponsor, the Mortgage Loan Seller, the
Additional Warranty Party, the Master Servicer, the Special Servicer, the
Trustee, the Fiscal Agent, the REMIC Administrator, the Certificate Registrar or
any such agent shall be affected by notice to the contrary.
Notwithstanding the foregoing, for so long as this Certificate is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC, transfers of interests in this Certificate
shall be made through the book-entry facilities of DTC.
The Trust Fund and the obligations created by the Agreement shall
terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, and (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Sponsor or the
Mortgage Loan Seller) at a price determined as provided in the Agreement of all
Mortgage Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, any such Majority Certificateholder or the Master
Servicer to purchase from the Trust Fund all Mortgage Loans and any REO
Properties remaining therein. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Pool at the time
<PAGE>
-6-
of purchase being less than 1% of the initial aggregate Stated Principal Balance
of the Mortgage Pool specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Sponsor, the Mortgage Loan Seller, the Additional Warranting Party, the Master
Servicer, the Special Servicer, the Trustee, the Fiscal Agent and the REMIC
Administrator thereunder and the rights of the Certificateholders thereunder, at
any time by the Sponsor, the Mortgage Loan Seller, the Additional Warranting
Party, the Master Servicer, the Special Servicer, the Trustee, the Fiscal Agent
and the REMIC Administrator with the consent of the Holders of Certificates
entitled to at least 51% of the Voting Rights allocated to the affected Classes.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
circumstances, including any amendment necessary to maintain the status of REMIC
I or REMIC II as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it
will look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal
laws of the State of New York applicable to agreements made and to be performed
in said State, and the obligations, rights and remedies of the Holder hereof
shall be determined in accordance with such laws.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class C Certificates referred to in the
within-mentioned Agreement.
Dated:
LaSalle National Bank,
as Certificate Registrar
By:________________________________
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________
______________________________________________________________
______________________________________________________________
(please print or typewrite name and address
including postal zip code of assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Multifamily/Commercial Mortgage Pass-Through Certificate and hereby authorize(s)
the registration of transfer of such interest to the above named assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Multifamily/Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and delivery of such Multifamily/Commercial Mortgage
Pass-Through Certificate to the following address:_____________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
__________________________________________
Signature by or on behalf of Assignor
__________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to _________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________.
Distributions made by check (such check to be made payable to
____________________) and all applicable statements and notices should be mailed
to ____________________________________________________________________________.
This information is provided by ___________________________, the
assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT A-7
FORM OF CLASS D CERTIFICATE
CLASS D MULTIFAMILY/COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1996-MC2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial "whole" mortgage loans (the "Mortgage Loans"), such pool being formed
and sold by
MORTGAGE CAPITAL FUNDING, INC.
Pass-Through Rate: Certificate Principal Balance of this
7.257% per annum Class D Certificate as of the Issue
Date: $18,322,221
Date of Pooling and Servicing Class Principal Balance of all the
Agreement: December 1, 1996 Class D Certificates as of the Issue
Date: $18,322,221
Cut-off Date: December 1, 1996 Aggregate unpaid principal balance of
the Mortgage Pool as of the Cut-off
Issue Date: December 19, 1996 Date, after deducting payments of
principal due on or before such date:
First Distribution Date: $458,055,542
January 21, 1997
Master Servicer: Trustee and REMIC Administrator:
GMAC Commercial Mortgage Corporation LaSalle National Bank
Special Servicer: Mortgage Loan Seller:
GMAC Commercial Mortgage Corporation Citicorp Real Estate, Inc.
Fiscal Agent:
ABN AMRO Bank N.V.
Certificate No. D-1 CUSIP No. 61910D BZ 4
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE SPONSOR,
THE TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
<PAGE>
-2-
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MORTGAGE
CAPITAL FUNDING, INC., CITICORP REAL ESTATE, INC., LASALLE NATIONAL BANK, ABN
AMRO BANK N.V., GMAC COMMERCIAL MORTGAGE CORPORATION, OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS X, CLASS A-1, CLASS A-2, CLASS A-3,
CLASS B AND CLASS C CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT
PROVIDED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN FOLLOWING RETIREMENT OF THE
CLASS A-1, CLASS A-2, CLASS A-3, CLASS B AND CLASS C CERTIFICATES OF THE SAME
SERIES. IN ADDITION, FOLLOWING THE DATE ON WHICH THE AGGREGATE CERTIFICATE
PRINCIPAL BALANCE OF THE CLASS E, CLASS F, CLASS G AND CLASS H CERTIFICATES OF
THE SAME SERIES IS REDUCED TO ZERO, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE REDUCED IN CONNECTION WITH LOSSES ON THE MORTGAGE LOANS AND
CERTAIN UNANTICIPATED EXPENSES. ACCORDINGLY,
<PAGE>
-3-
THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class D Certificate (obtained by dividing
the principal balance of this Class D Certificate (its "Certificate Principal
Balance") as of the Issue Date by the aggregate principal balance of all the
Class D Certificates (their "Class Principal Balance") as of the Issue Date) in
that certain beneficial ownership interest evidenced by all the Class D
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Mortgage Capital
Funding, Inc., as Sponsor, Citicorp Real Estate, Inc., as Mortgage Loan Seller,
NationsBanc Mortgage Capital Corporation, as Additional Warranting Party, GMAC
Commercial Mortgage Corporation, as Master Servicer and as Special Servicer,
LaSalle National Bank, as Trustee and REMIC Administrator, and ABN AMRO Bank
N.V. as Fiscal Agent. To the extent not defined herein, the capitalized terms
used herein have the respective meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 20th day of each month or, if such 20th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (as to the Class
D Certificates, the "Record Date"), in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of the Class D Certificates on the applicable
Distribution Date pursuant to the Agreement. All distributions made under the
Agreement on any Class D Certificate will be made by the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto at a bank or other entity having appropriate facilities therefor, if
such Certificateholder shall have provided the Trustee with written wiring
instructions no less than five Business Days prior to the Record Date for such
distribution (which wiring instructions may be in the form of a standing order
applicable to all subsequent distributions as well), or otherwise by check
mailed to the address of such Certificateholder appearing in the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
(determined without regard to any possible future reimbursement of any Realized
Loss or Additional Trust Fund Expense previously allocated to this Certificate)
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
offices of the Certificate Registrar appointed as provided in the Agreement or
such other location as may be specified in such notice. Also notwithstanding the
foregoing, any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Additional Trust Fund Expense previously
allocated to this Certificate, which reimbursement is to occur after the date on
which this Certificate is surrendered as contemplated by the preceding sentence,
will be made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
<PAGE>
-4-
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Sponsor's Multifamily/Commercial Mortgage Pass-Through
Certificates, Series 1996-MC2 (the "Certificates") are limited in right of
distribution to certain collections and recoveries respecting the Mortgage
Loans, all as more specifically set forth herein and in the Agreement. As
provided in the Agreement, withdrawals from the Certificate Account, the
Distribution Account and, if established, the REO Account may be made from time
to time for purposes other than, and, in certain cases, prior to, distributions
to Certificateholders, such purposes including the reimbursement of advances
made, or certain expenses incurred, with respect to the Mortgage Loans and the
payment of interest on such advances and expenses.
The Class D Certificates are issuable in fully registered form only
without coupons in minimum denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, Class D
Certificates are exchangeable for new Class D Certificates in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class D Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No transfer of a Class D Certificate or any interest therein shall be
made under any circumstances (i) to any employee benefit plan or other
retirement arrangement, including individual retirement accounts and annuities,
Keogh plans and collective investment funds and separate accounts in which such
plans, accounts or arrangements are invested, that is subject to ERISA or the
Code (each, a "Plan"), or (ii) to any Person who is directly or indirectly
purchasing such Certificate or interest therein on behalf of, as named fiduciary
of, as trustee of, or with "plan assets" of a Plan within the meaning of the
Department of Labor regulation promulgated at 29 C.F.R. ss.2510.3-101, unless:
(x) in the case of a Class D Certificate that constitutes a Book-Entry
Certificate, the purchase and holding of such Certificate or interest therein is
exempt from the prohibited transaction provisions of Section 406 of ERISA and
Section 4975 of the Code under Sections I and III of Prohibited Transaction
Class Exemption 95-60; or (y) in the case of a Class D Certificate that is held
as a Definitive Certificate, the prospective Transferee provides the Certificate
Registrar with either: (1) a certification of facts and an opinion of counsel
which establish to the satisfaction of the Certificate Registrar that such
transfer will not result in a violation of Section 406 of ERISA or Section 4975
of the Code, will not result in the imposition of an excise tax under Section
4975 of the Code or subject the Trustee, Master Servicer or Special Servicer to
any obligation in addition to those undertaken
<PAGE>
-5-
in the Agreement, or (2) a certification that the purchase, holding and transfer
of such Class D Certificate or interest therein is exempt from the prohibited
transaction provisions of Section 406 of ERISA and Section 4975 of the Code
under Sections I and III of Prohibited Transaction Class Exemption 95-60. Each
Person who acquires any Class D Certificate or interest therein (unless it shall
have delivered the opinion of counsel and/or one of the certifications referred
to in the preceding sentence) shall be deemed to have certified that: (i) it is
neither a Plan nor any Person who is directly or indirectly purchasing such
Class D Certificate or interest therein on behalf of, as named fiduciary of, as
trustee of, or with assets of a Plan, or (ii) alternatively, for so long as the
Class D Certificates constitute Book-Entry Certificates, that the purchase and
holding of such Class D Certificate or interest therein is exempt from the
prohibited transaction provisions of Section 406 of ERISA and Section 4975 of
the Code under Sections I and III of Prohibited Transaction Class Exemption
95-60.
No service charge will be imposed for any registration of transfer or
exchange of Class D Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
D Certificates.
Notwithstanding the foregoing, for so long as this Certificate is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC, transfers of interests in this Certificate
shall be made through the book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of
transfer, the Sponsor, the Mortgage Loan Seller, the Additional Warranting
Party, the Master Servicer, the Special Servicer, the Trustee, the Fiscal Agent,
the REMIC Administrator, the Certificate Registrar and any agents of any of them
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Sponsor, the Mortgage Loan Seller, the
Additional Warranting Party, the Master Servicer, the Special Servicer, the
Trustee, the Fiscal Agent, the REMIC Administrator, the Certificate Registrar or
any such agent shall be affected by notice to the contrary.
The Trust Fund and the obligations created by the Agreement shall
terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, and (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Sponsor or the
Mortgage Loan Seller) at a price determined as provided in the Agreement of all
Mortgage Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, any such Majority Certificateholder or the Master
Servicer to purchase from the Trust Fund all Mortgage Loans and any REO
Properties remaining therein. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Pool at the time
<PAGE>
-6-
of purchase being less than 1% of the initial aggregate Stated Principal Balance
of the Mortgage Pool specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Sponsor, the Mortgage Loan Seller, the Additional Warranting Party, the Master
Servicer, the Special Servicer, the Trustee, the Fiscal Agent and the REMIC
Administrator thereunder and the rights of the Certificateholders thereunder, at
any time by the Sponsor, the Mortgage Loan Seller, the Additional Warranting
Party, the Master Servicer, the Special Servicer, the Trustee, the Fiscal Agent
and the REMIC Administrator with the consent of the Holders of Certificates
entitled to at least 51% of the Voting Rights allocated to the affected Classes.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
circumstances, including any amendment necessary to maintain the status of REMIC
I or REMIC II as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it
will look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal
laws of the State of New York applicable to agreements made and to be performed
in said State, and the obligations, rights and remedies of the Holder hereof
shall be determined in accordance with such laws.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class D Certificates referred to in the
within-mentioned Agreement.
Dated:
LaSalle National Bank,
as Certificate Registrar
By:________________________________
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________
______________________________________________________________
______________________________________________________________
(please print or typewrite name and address
including postal zip code of assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Multifamily/Commercial Mortgage Pass-Through Certificate and hereby authorize(s)
the registration of transfer of such interest to the above named assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Multifamily/Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and delivery of such Multifamily/Commercial Mortgage
Pass-Through Certificate to the following address:_____________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
__________________________________________
Signature by or on behalf of Assignor
__________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to _________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________.
Distributions made by check (such check to be made payable to
____________________) and all applicable statements and notices should be mailed
to ____________________________________________________________________________.
This information is provided by ___________________________, the
assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT A-8
FORM OF CLASS E CERTIFICATE
CLASS E MULTIFAMILY/COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1996-MC2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial "whole" mortgage loans (the "Mortgage Loans"), such pool being formed
and sold by
MORTGAGE CAPITAL FUNDING, INC.
Pass-Through Rate: Certificate Principal Balance of this
7.628% per annum Class E Certificate as of the Issue
Date: $11,451,388
Date of Pooling and Servicing Class Principal Balance of all the
Agreement: December 1, 1996 Class E Certificates as of the Issue
Date: $11,451,388
Cut-off Date: December 1, 1996 Aggregate unpaid principal balance of
the Mortgage Pool as of the Cut-off
Issue Date: December 19, 1996 Date, after deducting payments of
principal due on or before such date:
First Distribution Date: $458,055,542
January 21, 1997
Master Servicer: Trustee and REMIC Administrator:
GMAC Commercial Mortgage Corporation LaSalle National Bank
Special Servicer: Mortgage Loan Seller:
GMAC Commercial Mortgage Corporation Citicorp Real Estate, Inc.
Fiscal Agent:
ABN AMRO Bank N.V.
Certificate No. E-1 CUSIP No. 61910D CA 8
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE SPONSOR,
THE TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
<PAGE>
-2-
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MORTGAGE
CAPITAL FUNDING, INC., CITICORP REAL ESTATE, INC., LASALLE NATIONAL BANK, ABN
AMRO BANK N.V., GMAC COMMERCIAL MORTGAGE CORPORATION OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS X, CLASS A-1, CLASS A-2, CLASS A-3,
CLASS B, CLASS C AND CLASS D CERTIFICATES OF THE SAME SERIES, AS AND TO THE
EXTENT PROVIDED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, MAY BE MADE EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED
HEREIN.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN FOLLOWING RETIREMENT OF THE
CLASS A-1, CLASS A-2, CLASS A-3, CLASS B, CLASS C AND CLASS D CERTIFICATES OF
THE SAME SERIES. IN ADDITION, FOLLOWING THE DATE ON WHICH THE AGGREGATE
CERTIFICATE PRINCIPAL BALANCE OF THE CLASS F, CLASS G AND CLASS H CERTIFICATES
OF THE SAME SERIES IS REDUCED TO ZERO, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE REDUCED IN CONNECTION WITH LOSSES ON THE MORTGAGE LOANS AND
CERTAIN UNANTICIPATED EXPENSES. ACCORDINGLY, THE OUTSTANDING CERTIFICATE
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class E Certificate (obtained by dividing
the principal balance of this Class E Certificate (its "Certificate Principal
Balance") as of the Issue Date by the aggregate principal
<PAGE>
-3-
balance of all the Class E Certificates (their "Class Principal Balance") as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class E Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Mortgage
Capital Funding, Inc., as Sponsor, Citicorp Real Estate, Inc., as Mortgage Loan
Seller, NationsBanc Mortgage Capital Corporation, as Additional Warranting
Party, GMAC Commercial Mortgage Corporation, as Master Servicer and as Special
Servicer, LaSalle National Bank, as Trustee and REMIC Administrator, and ABN
AMRO Bank N.V. as Fiscal Agent. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 20th day of each month or, if such 20th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (as to the Class
E Certificates, the "Record Date"), in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of the Class E Certificates on the applicable
Distribution Date pursuant to the Agreement. All distributions made under the
Agreement on any Class E Certificate will be made by the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto at a bank or other entity having appropriate facilities therefor, if
such Certificateholder shall have provided the Trustee with written wiring
instructions no less than five Business Days prior to the Record Date for such
distribution (which wiring instructions may be in the form of a standing order
applicable to all subsequent distributions as well), or otherwise by check
mailed to the address of such Certificateholder appearing in the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
(determined without regard to any possible future reimbursement of any Realized
Loss or Additional Trust Fund Expense previously allocated to this Certificate)
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
offices of the Certificate Registrar appointed as provided in the Agreement or
such other location as may be specified in such notice. Also notwithstanding the
foregoing, any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Additional Trust Fund Expense previously
allocated to this Certificate, which reimbursement is to occur after the date on
which this Certificate is surrendered as contemplated by the preceding sentence,
will be made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
<PAGE>
-4-
The Sponsor's Multifamily/Commercial Mortgage Pass-Through
Certificates, Series 1996-MC2 (the "Certificates") are limited in right of
distribution to certain collections and recoveries respecting the Mortgage
Loans, all as more specifically set forth herein and in the Agreement. As
provided in the Agreement, withdrawals from the Certificate Account, the
Distribution Account and, if established, the REO Account may be made from time
to time for purposes other than, and, in certain cases, prior to, distributions
to Certificateholders, such purposes including the reimbursement of advances
made, or certain expenses incurred, with respect to the Mortgage Loans and the
payment of interest on such advances and expenses.
The Class E Certificates are issuable in fully registered form only
without coupons in minimum denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, Class E
Certificates are exchangeable for new Class E Certificates in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class E Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No transfer of a Class E Certificate or any interest therein shall be
made under any circumstances (i) to any employee benefit plan or other
retirement arrangement, including individual retirement accounts and annuities,
Keogh plans and collective investment funds and separate accounts in which such
plans, accounts or arrangements are invested, that is subject to ERISA or the
Code (each, a "Plan"), or (ii) to any Person who is directly or indirectly
purchasing such Certificate or interest therein on behalf of, as named fiduciary
of, as trustee of, or with "plan assets" of a Plan within the meaning of the
Department of Labor regulation promulgated at 29 C.F.R. ss.2510.3-101, unless:
(x) in the case of a Class E Certificate that constitutes a Book-Entry
Certificate, the purchase and holding of such Certificate or interest therein is
exempt from the prohibited transaction provisions of Section 406 of ERISA and
Section 4975 of the Code under Sections I and III of Prohibited Transaction
Class Exemption 95-60; or (y) in the case of a Class E Certificate that is held
as a Definitive Certificate, the prospective Transferee provides the Certificate
Registrar with either: (1) a certification of facts and an opinion of counsel
which establish to the satisfaction of the Certificate Registrar that such
transfer will not result in a violation of Section 406 of ERISA or Section 4975
of the Code, will not result in the imposition of an excise tax under Section
4975 of the Code or subject the Trustee, Master Servicer or Special Servicer to
any obligation in addition to those undertaken in the Agreement, or (2) a
certification that the purchase, holding and transfer of such Class E
Certificate or interest therein is exempt from the prohibited transaction
provisions of Section 406 of ERISA and Section 4975 of the Code under Sections I
and III of Prohibited Transaction Class Exemption 95-60. Each Person who
acquires any Class E Certificate or interest therein (unless it shall have
delivered the opinion of counsel and/or one of the certifications referred to in
the
<PAGE>
-5-
preceding sentence) shall be deemed to have certified that: (i) it is neither a
Plan nor any Person who is directly or indirectly purchasing such Class E
Certificate or interest therein on behalf of, as named fiduciary of, as trustee
of, or with assets of a Plan, or (ii) alternatively, for so long as the Class E
Certificates constitute Book-Entry Certificates, that the purchase and holding
of such Class E Certificate or interest therein is exempt from the prohibited
transaction provisions of Section 406 of ERISA and Section 4975 of the Code
under Sections I and III of Prohibited Transaction Class Exemption 95-60.
No service charge will be imposed for any registration of transfer or
exchange of Class E Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
E Certificates.
Notwithstanding the foregoing, for so long as this Certificate is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC, transfers of interests in this Certificate
shall be made through the book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of
transfer, the Sponsor, the Mortgage Loan Seller, the Additional Warranting
Party, the Master Servicer, the Special Servicer, the Trustee, the Fiscal Agent,
the REMIC Administrator, the Certificate Registrar and any agents of any of them
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Sponsor, the Mortgage Loan Seller, the
Additional Warranting Party, the Master Servicer, the Special Servicer, the
Trustee, the Fiscal Agent, the REMIC Administrator, the Certificate Registrar or
any such agent shall be affected by notice to the contrary.
The Trust Fund and the obligations created by the Agreement shall
terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, and (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Sponsor or the
Mortgage Loan Seller) at a price determined as provided in the Agreement of all
Mortgage Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, any such Majority Certificateholder or the Master
Servicer to purchase from the Trust Fund all Mortgage Loans and any REO
Properties remaining therein. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Pool at the time of
purchase being less than 1% of the initial aggregate Stated Principal Balance of
the Mortgage Pool specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Sponsor, the Mortgage Loan Seller, the Additional Warranting Party, the Master
Servicer, the Special Servicer, the Trustee,
<PAGE>
-6-
the Fiscal Agent and the REMIC Administrator thereunder and the rights of the
Certificateholders thereunder, at any time by the Sponsor, the Mortgage Loan
Seller, the Additional Warranting Party, the Master Servicer, the Special
Servicer, the Trustee, the Fiscal Agent and the REMIC Administrator with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain circumstances, including any amendment necessary to maintain
the status of REMIC I or REMIC II as a REMIC, without the consent of the Holders
of any of the Certificates.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it
will look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal
laws of the State of New York applicable to agreements made and to be performed
in said State, and the obligations, rights and remedies of the Holder hereof
shall be determined in accordance with such laws.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class E Certificates referred to in the
within-mentioned Agreement.
Dated:
LaSalle National Bank,
as Certificate Registrar
By:________________________________
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________
______________________________________________________________
______________________________________________________________
(please print or typewrite name and address
including postal zip code of assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Multifamily/Commercial Mortgage Pass-Through Certificate and hereby authorize(s)
the registration of transfer of such interest to the above named assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Multifamily/Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and delivery of such Multifamily/Commercial Mortgage
Pass-Through Certificate to the following address:_____________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
__________________________________________
Signature by or on behalf of Assignor
__________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to _________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________.
Distributions made by check (such check to be made payable to
____________________) and all applicable statements and notices should be mailed
to ____________________________________________________________________________.
This information is provided by ___________________________, the
assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT A-9
FORM OF CLASS F CERTIFICATE
CLASS F MULTIFAMILY/COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1996-MC2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial "whole" mortgage loans (the "Mortgage Loans"), such pool being formed
and sold by
MORTGAGE CAPITAL FUNDING, INC.
Pass-Through Rate: Certificate Principal Balance of this
5.750% per annum Class F Certificate as of the Issue
Date: $25,193,054
Date of Pooling and Servicing
Agreement: December 1, 1996 Class Principal Balance of all the
Class F Certificates as of the Issue
Date: $25,193,054
Cut-off Date: December 1, 1996 Aggregate unpaid principal balance of
the Mortgage Pool as of the Cut-off
Issue Date: December 19, 1996 Date, after deducting payments of
principal due on or before such date:
First Distribution Date: $458,055,542
January 21, 1997
Master Servicer: Trustee and REMIC Administrator:
GMAC Commercial Mortgage Corporation LaSalle National Bank
Special Servicer: Mortgage Loan Seller:
GMAC Commercial Mortgage Corporation Citicorp Real Estate, Inc.
Fiscal Agent:
ABN AMRO Bank N.V.
Certificate No. F-1 CUSIP No. 61910D CB 6
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MORTGAGE
CAPITAL FUNDING, INC., CITICORP REAL ESTATE, INC., LASALLE NATIONAL BANK, ABN
AMRO Bank N.V., GMAC COMMERCIAL MORTGAGE CORPORATION, OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED
<PAGE>
-2-
BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS X, CLASS A-1, CLASS A-2, CLASS A-3,
CLASS B, CLASS C, CLASS D AND CLASS E CERTIFICATES OF THE SAME SERIES, AS AND TO
THE EXTENT PROVIDED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN 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 5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, MAY BE MADE EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED
HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE. THE
FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE U.S.
FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS CERTIFICATE.
THE ISSUE DATE OF THIS CERTIFICATE IS DECEMBER 19, 1996. ASSUMING THAT THE
MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF PREPAYMENT USED SOLELY FOR THE
PURPOSES OF APPLYING THE OID RULES TO THE CERTIFICATES EQUAL TO A CPR OF 0% (THE
"PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN
$805.48 OF OID PER $1,000 OF INITIAL CERTIFICATE PRINCIPAL BALANCE, THE YIELD TO
MATURITY IS 9.512% PER ANNUM AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL
ACCRUAL PERIOD IS NO MORE THAN $.04 PER $1,000 OF INITIAL CERTIFICATE PRINCIPAL
BALANCE, COMPUTED UNDER THE EXACT METHOD. NO REPRESENTATION IS MADE THAT THE
MORTGAGE LOANS WILL NOT PREPAY OR THAT, IF THEY DO, THEY WILL REPAY AT ANY
PARTICULAR RATE.
<PAGE>
-3-
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN FOLLOWING RETIREMENT OF THE
CLASS A-1, CLASS A-2, CLASS A-3, CLASS B, CLASS C, CLASS D AND CLASS E
CERTIFICATES OF THE SAME SERIES. IN ADDITION, FOLLOWING THE DATE ON WHICH THE
AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS G AND CLASS H CERTIFICATES
OF THE SAME SERIES IS REDUCED TO ZERO, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE REDUCED IN CONNECTION WITH LOSSES ON THE MORTGAGE LOANS AND
CERTAIN UNANTICIPATED EXPENSES. ACCORDINGLY, THE OUTSTANDING CERTIFICATE
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that ____________ is the registered owner of the
Percentage Interest evidenced by this Class F Certificate (obtained by dividing
the principal balance of this Class F Certificate (its "Certificate Principal
Balance") as of the Issue Date by the aggregate principal balance of all the
Class F Certificates (their "Class Principal Balance") as of the Issue Date) in
that certain beneficial ownership interest evidenced by all the Class F
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Mortgage Capital
Funding, Inc., as Sponsor, Citicorp Real Estate, Inc., as Mortgage Loan Seller,
NationsBanc Mortgage Capital Corporation, as Additional Warranting Party, GMAC
Commercial Mortgage Corporation, as Master Servicer and as Special Servicer,
LaSalle National Bank, as Trustee and REMIC Administrator, and ABN AMRO Bank
N.V. as Fiscal Agent. To the extent not defined herein, the capitalized terms
used herein have the respective meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 20th day of each month or, if such 20th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (as to the Class
F Certificates, the "Record Date"), in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of the Class F Certificates on the applicable
Distribution Date pursuant to the Agreement. All distributions made under the
Agreement on any Class F Certificate will be made by the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto at a bank or other entity having appropriate facilities therefor, if
such Certificateholder shall have provided the Trustee with written wiring
instructions no less than five Business Days prior to the Record Date for such
distribution (which wiring instructions may be in the form of a standing order
applicable to all subsequent distributions as well), or otherwise by check
mailed to the address of such Certificateholder appearing in the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
(determined without regard to any possible future reimbursement of any Realized
Loss or Additional Trust Fund Expense previously allocated to this Certificate)
will be made after due notice by the Trustee of the pendency of such
<PAGE>
-4-
distribution and only upon presentation and surrender of this Certificate at the
offices of the Certificate Registrar appointed as provided in the Agreement or
such other location as may be specified in such notice. Also notwithstanding the
foregoing, any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Additional Trust Fund Expense previously
allocated to this Certificate, which reimbursement is to occur after the date on
which this Certificate is surrendered as contemplated by the preceding sentence,
will be made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Sponsor's Multifamily/Commercial Mortgage Pass-Through
Certificates, Series 1996-MC2 (the "Certificates") are limited in right of
distribution to certain collections and recoveries respecting the Mortgage
Loans, all as more specifically set forth herein and in the Agreement. As
provided in the Agreement, withdrawals from the Certificate Account, the
Distribution Account and, if established, the REO Account may be made from time
to time for purposes other than, and, in certain cases, prior to, distributions
to Certificateholders, such purposes including the reimbursement of advances
made, or certain expenses incurred, with respect to the Mortgage Loans and the
payment of interest on such advances and expenses.
The Class F Certificates are issuable in fully registered form only
without coupons in minimum denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, Class F
Certificates are exchangeable for new Class F Certificates in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class F Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No transfer of any Class F Certificate shall be made unless that
transfer is made pursuant to an effective registration statement under the
Securities Act, and effective registration or qualification under applicable
state securities laws, or is made in a transaction which does not require such
registration or qualification. If such a transfer of any Class F Certificate
(other than in connection with the initial issuance thereof or the initial
transfer thereof by the Sponsor or any Affiliate of the Sponsor) is to be made
without registration under the Securities Act, then the Certificate Registrar
shall refuse to register such transfer until it receives the following: (i)
<PAGE>
-5-
a certificate from the Certificateholder desiring to effect such transfer
substantially in the form attached as Exhibit B-1 to the Agreement; or (ii) a
certificate from the Certificateholder desiring to effect such transfer
substantially in the form of Exhibit B-2 to the Agreement and a certificate from
such Certificateholder's prospective transferee substantially in the form
attached as Exhibit B-3 or Exhibit B-4 to the Agreement; or (iii) an opinion of
counsel satisfactory to the Certificate Registrar to the effect that such
transfer may be made without registration under the Securities Act (which
opinion of counsel shall not be an expense of the Trust Fund or of the Sponsor,
the Mortgage Loan Seller, the Master Servicer, the Special Servicer, the
Trustee, the Fiscal Agent, the REMIC Administrator or the Certificate Registrar
in their respective capacities as such), together with the written
certification(s) as to the facts surrounding such transfer from the
Certificateholder desiring to effect such transfer and/or such
Certificateholder's prospective transferee on which such opinion of counsel is
based. None of the Sponsor, the Trustee or the Certificate Registrar is
obligated to register or qualify the Class F Certificates under the Securities
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of any Class F Certificate without
registration or qualification. Any Class F Certificateholder desiring to effect
such a transfer shall, and by the acceptance of its Class F Certificate agrees
to, indemnify the Sponsor, the Trustee and the Certificate Registrar against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.
No transfer of a Class F Certificate or any interest therein shall be
made to (A) any employee benefit plan or other retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds and separate accounts in which such plans, accounts or
arrangements are invested, that is subject to ERISA or the Code (each, a "Plan")
or (B) any Person who is directly or indirectly purchasing the Class F
Certificate or interest therein on behalf of, as named fiduciary of, as trustee
of, or with assets of a "plan assets" of Plan within the meaning of the
Department of Labor regulation promulgated at 29 C.F.R. ss.2510.3-101, unless
the prospective transferee provides the Certificate Registrar with a
certification of facts and an opinion of counsel which establish to the
satisfaction of the Certificate Registrar that such transfer will not result in
a violation of Section 406 of ERISA or Section 4975 of the Code or cause the
Master Servicer, the Special Servicer or the Trustee to be deemed a fiduciary of
such Plan or result in the imposition of an excise tax under Section 4975 of the
Code. Each Person who acquires any Class F Certificate or interest therein
without delivery of the certification of facts and opinion of counsel referred
to in the preceding sentence shall be deemed to have certified that it is
neither a Plan nor any Person who is directly or indirectly purchasing such
Class F Certificate or interest therein on behalf of, as named fiduciary of, as
trustee of, or with assets of a Plan.
No service charge will be imposed for any registration of transfer or
exchange of Class F Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
F Certificates.
Prior to due presentment of this Certificate for registration of
transfer, the Sponsor, the Mortgage Loan Seller, the Additional Warranting
Party, the Master Servicer, the
<PAGE>
-6-
Special Servicer, the Trustee, the Fiscal Agent, the REMIC Administrator, the
Certificate Registrar and any agents of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Sponsor, the Mortgage Loan Seller, the Additional Warranting
Party, the Master Servicer, the Special Servicer, the Trustee, the Fiscal Agent,
the REMIC Administrator, the Certificate Registrar or any such agent shall be
affected by notice to the contrary.
The Trust Fund and the obligations created by the Agreement shall
terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, and (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Sponsor or the
Mortgage Loan Seller) at a price determined as provided in the Agreement of all
Mortgage Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, any such Majority Certificateholder or the Master
Servicer to purchase from the Trust Fund all Mortgage Loans and any REO
Properties remaining therein. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Pool at the time of
purchase being less than 1% of the initial aggregate Stated Principal Balance of
the Mortgage Pool specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Sponsor, the Mortgage Loan Seller, the Additional Warranting Party, the Master
Servicer, the Special Servicer, the Trustee, the Fiscal Agent and the REMIC
Administrator thereunder and the rights of the Certificateholders thereunder, at
any time by the Sponsor, the Mortgage Loan Seller, the Additional Warranting
Party, the Master Servicer, the Special Servicer, the Trustee, the Fiscal Agent
and the REMIC Administrator with the consent of the Holders of Certificates
entitled to at least 51% of the Voting Rights allocated to the affected Classes.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
circumstances, including any amendment necessary to maintain the status of REMIC
I or REMIC II as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it
will look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
<PAGE>
-7-
This Certificate shall be construed in accordance with the internal
laws of the State of New York applicable to agreements made and to be performed
in said State, and the obligations, rights and remedies of the Holder hereof
shall be determined in accordance with such laws.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class F Certificates referred to in the
within-mentioned Agreement.
Dated:
LaSalle National Bank,
as Certificate Registrar
By:________________________________
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________
______________________________________________________________
______________________________________________________________
(please print or typewrite name and address
including postal zip code of assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Multifamily/Commercial Mortgage Pass-Through Certificate and hereby authorize(s)
the registration of transfer of such interest to the above named assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Multifamily/Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and delivery of such Multifamily/Commercial Mortgage
Pass-Through Certificate to the following address:_____________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
__________________________________________
Signature by or on behalf of Assignor
__________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to _________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________.
Distributions made by check (such check to be made payable to
____________________) and all applicable statements and notices should be mailed
to ____________________________________________________________________________.
This information is provided by ___________________________, the
assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT A-10
FORM OF CLASS G CERTIFICATE
CLASS G MULTIFAMILY/COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1996-MC2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial "whole" mortgage loans (the "Mortgage Loans"), such pool being formed
and sold by
MORTGAGE CAPITAL FUNDING, INC.
Pass-Through Rate: Certificate Principal Balance of this
5.750% per annum Class G Certificate as of the Issue
Date: $16,031,943
Date of the Pooling and Servicing Class Principal Balance of all the
Agreement: December 1, 1996 Class G Certificates as of the Issue
Date: $16,031,943
Cut-off Date: December 1, 1996 Aggregate unpaid principal balance of
the Mortgage Pool as of the Cut-off
Issue Date: December 19, 1996 Date, after deducting payments of
principal due on or before such date:
First Distribution Date: $458,055,542
January 21, 1997
Master Servicer: Trustee and REMIC Administrator:
GMAC Commercial Mortgage Corporation LaSalle National Bank
Special Servicer: Mortgage Loan Seller:
GMAC Commercial Mortgage Corporation Citicorp Real Estate, Inc.
Fiscal Agent:
ABN AMRO Bank N.V.
Certificate No. G-1 CUSIP No. 61910D CC 4
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MORTGAGE
CAPITAL FUNDING, INC., CITICORP REAL ESTATE, INC., LASALLE NATIONAL BANK, ABN
AMRO BANK N.V., GMAC COMMERCIAL MORTGAGE CORPORATION OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED
<PAGE>
-2-
BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS X, CLASS A-1, CLASS A-2, CLASS A-2,
CLASS A-3, CLASS B, CLASS C, CLASS D, CLASS E AND CLASS F CERTIFICATES OF THE
SAME SERIES, AS AND TO THE EXTENT PROVIDED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN 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 5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, MAY BE MADE EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED
HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE. THE
FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE U.S.
FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS CERTIFICATE.
THE ISSUE DATE OF THIS CERTIFICATE IS DECEMBER 19, 1996. ASSUMING THAT THE
MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF PREPAYMENT USED SOLELY FOR THE
PURPOSES OF APPLYING THE OID RULES TO THE CERTIFICATES EQUAL TO A CPR OF 0% (THE
"PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN
$947.94 OF OID PER $1,000 OF INITIAL CERTIFICATE PRINCIPAL BALANCE, THE YIELD TO
MATURITY IS 12.373% PER ANNUM AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL
ACCRUAL PERIOD IS NO MORE THAN $.05 PER $1,000 OF INITIAL CERTIFICATE PRINCIPAL
BALANCE, COMPUTED UNDER THE EXACT METHOD. NO REPRESENTATION IS MADE THAT THE
MORTGAGE ASSETS WILL NOT PREPAY OR THAT, IF THEY DO, THEY WILL PREPAY AT ANY
PARTICULAR RATE.
<PAGE>
-3-
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN FOLLOWING RETIREMENT OF THE
CLASS A-1, CLASS A-2, CLASS A-3, CLASS B, CLASS C, CLASS D, CLASS E AND CLASS F
CERTIFICATES OF THE SAME SERIES. IN ADDITION, FOLLOWING THE DATE ON WHICH THE
AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS H CERTIFICATES OF THE SAME
SERIES IS REDUCED TO ZERO, THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE
MAY BE REDUCED IN CONNECTION WITH LOSSES ON THE MORTGAGE LOANS AND CERTAIN
UNANTICIPATED EXPENSES. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that Adbon & Co. is the registered owner of the
Percentage Interest evidenced by this Class G Certificate (obtained by dividing
the principal balance of this Class G Certificate (its "Certificate Principal
Balance") as of the Issue Date by the aggregate principal balance of all the
Class G Certificates (their "Class Principal Balance") as of the Issue Date) in
that certain beneficial ownership interest evidenced by all the Class G
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Mortgage Capital
Funding, Inc., as Sponsor, Citicorp Real Estate, Inc., as Mortgage Loan Seller,
NationsBanc Mortgage Capital Corporation, as Additional Warranting Party, GMAC
Commercial Mortgage Corporation, as Master Servicer and as Special Servicer,
LaSalle National Bank, as Trustee and REMIC Administrator, and ABN AMRO Bank
N.V. as Fiscal Agent. To the extent not defined herein, the capitalized terms
used herein have the respective meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 20th day of each month or, if such 20th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (as to the Class
G Certificates, the "Record Date"), in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of the Class G Certificates on the applicable
Distribution Date pursuant to the Agreement. All distributions made under the
Agreement on any Class G Certificate will be made by the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto at a bank or other entity having appropriate facilities therefor, if
such Certificateholder shall have provided the Trustee with written wiring
instructions no less than five Business Days prior to the Record Date for such
distribution (which wiring instructions may be in the form of a standing order
applicable to all subsequent distributions as well), or otherwise by check
mailed to the address of such Certificateholder appearing in the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
(determined without regard to any possible future reimbursement of any Realized
Loss or Additional Trust Fund Expense previously
<PAGE>
-4-
allocated to this Certificate) will be made after due notice by the Trustee of
the pendency of such distribution and only upon presentation and surrender of
this Certificate at the offices of the Certificate Registrar appointed as
provided in the Agreement or such other location as may be specified in such
notice. Also notwithstanding the foregoing, any distribution that may be made
with respect to this Certificate in reimbursement of any Realized Loss or
Additional Trust Fund Expense previously allocated to this Certificate, which
reimbursement is to occur after the date on which this Certificate is
surrendered as contemplated by the preceding sentence, will be made by check
mailed to the address of the Holder that surrenders this Certificate as such
address appeared in the Certificate Register or to any such other address of
which the Trustee is subsequently notified in writing.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Sponsor's Multifamily/Commercial Mortgage Pass-Through
Certificates, Series 1996-MC2 (the "Certificates") are limited in right of
distribution to certain collections and recoveries respecting the Mortgage
Loans, all as more specifically set forth herein and in the Agreement. As
provided in the Agreement, withdrawals from the Certificate Account, the
Distribution Account and, if established, the REO Account may be made from time
to time for purposes other than, and, in certain cases, prior to, distributions
to Certificateholders, such purposes including the reimbursement of advances
made, or certain expenses incurred, with respect to the Mortgage Loans and the
payment of interest on such advances and expenses.
The Class G Certificates are issuable in fully registered form only
without coupons in minimum denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, Class G
Certificates are exchangeable for new Class G Certificates in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class G Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No transfer of any Class G Certificate shall be made unless that
transfer is made pursuant to an effective registration statement under the
Securities Act, and effective registration or qualification under applicable
state securities laws, or is made in a transaction which does not require such
registration or qualification. If such a transfer of any Class G Certificate
(other than in connection with the initial issuance thereof or the initial
transfer thereof by the Sponsor or any Affiliate of the Sponsor) is to be made
without registration under the Securities Act, then
<PAGE>
-5-
the Certificate Registrar shall refuse to register such transfer until it
receives the following: (i) a certificate from the Certificateholder desiring to
effect such transfer substantially in the form attached as Exhibit B-1 to the
Agreement; or (ii) a certificate from the Certificateholder desiring to effect
such transfer substantially in the form of Exhibit B-2 to the Agreement and a
certificate from such Certificateholder's prospective transferee substantially
in the form attached as Exhibit B-3 or Exhibit B-4 to the Agreement; or (iii) an
opinion of counsel satisfactory to the Certificate Registrar to the effect that
such transfer may be made without registration under the Securities Act (which
opinion of counsel shall not be an expense of the Trust Fund or of the Sponsor,
the Mortgage Loan Seller, the Master Servicer, the Special Servicer, the
Trustee, the Fiscal Agent, the REMIC Administrator or the Certificate Registrar
in their respective capacities as such), together with the written
certification(s) as to the facts surrounding such transfer from the
Certificateholder desiring to effect such transfer and/or such
Certificateholder's prospective transferee on which such opinion of counsel is
based. None of the Sponsor, the Trustee or the Certificate Registrar is
obligated to register or qualify the Class G Certificates under the Securities
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of any Class G Certificate without
registration or qualification. Any Class G Certificateholder desiring to effect
such a transfer shall, and by the acceptance of its Class G Certificate agrees
to, indemnify the Sponsor, the Trustee and the Certificate Registrar against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.
No transfer of a Class G Certificate or any interest therein shall be
made to (A) any employee benefit plan or other retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds and separate accounts in which such plans, accounts or
arrangements are invested, that is subject to ERISA or the Code (each, a "Plan")
or (B) any Person who is directly or indirectly purchasing the Class G
Certificate or interest therein on behalf of, as named fiduciary of, as trustee
of, or with "plan assets" of Plan within the meaning of the Department of Labor
regulation promulgated at 29 C.F.R. ss.2510.3-101, unless the prospective
transferee provides the Certificate Registrar with a certification of facts and
an opinion of counsel which establish to the satisfaction of the Certificate
Registrar that such transfer will not result in a violation of Section 406 of
ERISA or Section 4975 of the Code or cause the Master Servicer, the Special
Servicer or the Trustee to be deemed a fiduciary of such Plan or result in the
imposition of an excise tax under Section 4975 of the Code. Each Person who
acquires any Class G Certificate or interest therein without delivery of the
certification of facts and opinion of counsel referred to in the preceding
sentence shall be deemed to have certified that it is neither a Plan nor any
Person who is directly or indirectly purchasing such Class G Certificate or
interest therein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan.
No service charge will be imposed for any registration of transfer or
exchange of Class G Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
G Certificates.
<PAGE>
-6-
Prior to due presentment of this Certificate for registration of
transfer, the Sponsor, the Mortgage Loan Seller, the Additional Warranting
Party, the Master Servicer, the Special Servicer, the Trustee, the Fiscal Agent,
the REMIC Administrator, the Certificate Registrar and any agents of any of them
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Sponsor, the Mortgage Loan Seller, the
Additional Warranting Party, the Master Servicer, the Special Servicer, the
Trustee, the Fiscal Agent, the REMIC Administrator, the Certificate Registrar or
any such agent shall be affected by notice to the contrary.
The Trust Fund and the obligations created by the Agreement shall
terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, and (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Sponsor or the
Mortgage Loan Seller) at a price determined as provided in the Agreement of all
Mortgage Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, any such Majority Certificateholder or the Master
Servicer to purchase from the Trust Fund all Mortgage Loans and any REO
Properties remaining therein. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Pool at the time of
purchase being less than 1% of the initial aggregate Stated Principal Balance of
the Mortgage Pool specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Sponsor, the Mortgage Loan Seller, the Additional Warranting Party, the Master
Servicer, the Special Servicer, the Trustee, the Fiscal Agent and the REMIC
Administrator thereunder and the rights of the Certificateholders thereunder, at
any time by the Sponsor, the Mortgage Loan Seller, the Additional Warranting
Party, the Master Servicer, the Special Servicer, the Trustee, the Fiscal Agent
and the REMIC Administrator with the consent of the Holders of Certificates
entitled to at least 51% of the Voting Rights allocated to the affected Classes.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
circumstances, including any amendment necessary to maintain the status of REMIC
I or REMIC II as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it
will look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
<PAGE>
-7-
This Certificate shall be construed in accordance with the internal
laws of the State of New York applicable to agreements made and to be performed
in said State, and the obligations, rights and remedies of the Holder hereof
shall be determined in accordance with such laws.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class G Certificates referred to in the
within-mentioned Agreement.
Dated:
LaSalle National Bank,
as Certificate Registrar
By:________________________________
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________
______________________________________________________________
______________________________________________________________
(please print or typewrite name and address
including postal zip code of assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Multifamily/Commercial Mortgage Pass-Through Certificate and hereby authorize(s)
the registration of transfer of such interest to the above named assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Multifamily/Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and delivery of such Multifamily/Commercial Mortgage
Pass-Through Certificate to the following address:_____________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
__________________________________________
Signature by or on behalf of Assignor
__________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to _________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________.
Distributions made by check (such check to be made payable to
____________________) and all applicable statements and notices should be mailed
to ____________________________________________________________________________.
This information is provided by ___________________________, the
assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT A-11
FORM OF CLASS H CERTIFICATE
CLASS H MULTIFAMILY/COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1996-MC2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial "whole" mortgage loans (the "Mortgage Loans"), such pool being formed
and sold by
MORTGAGE CAPITAL FUNDING, INC.
Pass-Through Rate: Certificate Principal Balance of this
5.750% per annum Class H Certificate as of the Issue
Date: $13,741,671
Date of Pooling and Servicing Class Principal Balance of all the
Agreement: December 1, 1996 Class H Certificates as of the Issue
Date: $13,741,671
Cut-off Date: December 1, 1996 Aggregate unpaid principal balance of
the Mortgage Pool as of the Cut-off
Issue Date: December 19, 1996 Date, after deducting payments of
principal due on or before such date:
First Distribution Date: $458,055,542
January 21, 1997
Master Servicer: Trustee and REMIC Administrator:
GMAC Commercial Mortgage Corporation LaSalle National Bank
Special Servicer: Mortgage Loan Seller:
GMAC Commercial Mortgage Corporation Citicorp Real Estate, Inc.
Fiscal Agent:
ABN AMRO Bank N.V.
Certificate No. H-1 CUSIP No. 61910D CD 2
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MORTGAGE
CAPITAL FUNDING, INC., CITICORP REAL ESTATE, INC., LASALLE NATIONAL BANK, ABN
AMRO BANK N.V., GMAC COMMERCIAL MORTGAGE CORPORATION OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED
<PAGE>
-2-
BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS X, CLASS A-1, CLASS A-2, CLASS A-3,
CLASS B, CLASS C, CLASS D, CLASS E, CLASS F AND CLASS G CERTIFICATES OF THE SAME
SERIES, AS AND TO THE EXTENT PROVIDED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN 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 5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, MAY BE MADE EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED
HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE. THE
FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE U.S.
FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS CERTIFICATE.
THE ISSUE DATE OF THIS CERTIFICATE IS DECEMBER 19, 1996. ASSUMING THAT THE
MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF PREPAYMENT USED SOLELY FOR THE
PURPOSES OF APPLYING THE OID RULES TO THE CERTIFICATES EQUAL TO A CPR OF 0% (THE
"PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN
$1,207.02 OF OID PER $1,000 OF INITIAL CERTIFICATE PRINCIPAL BALANCE, THE YIELD
TO MATURITY IS 19.19% PER ANNUM AND THE AMOUNT OF OID ATTRIBUTABLE TO THE
INITIAL ACCRUAL PERIOD IS NO MORE THAN $.05 PER $1,000 OF INITIAL CERTIFICATE
PRINCIPAL BALANCE, COMPUTED UNDER THE EXACT METHOD. NO REPRESENTATION IS MADE
THAT THE MORTGAGE ASSETS WILL NOT PREPAY OR THAT, IF THEY DO, THEY WILL PREPAY
AT ANY PARTICULAR RATE.
<PAGE>
-3-
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN FOLLOWING RETIREMENT OF THE
CLASS A-1, CLASS A-2, CLASS A-3, CLASS B, CLASS C, CLASS D, CLASS E, CLASS F AND
CLASS G CERTIFICATES OF THE SAME SERIES. IN ADDITION, THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE REDUCED IN CONNECTION WITH LOSSES ON THE
MORTGAGE LOANS AND CERTAIN UNANTICIPATED EXPENSES. ACCORDINGLY, THE OUTSTANDING
CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ABOVE.
This certifies that Adbon & Co. is the registered owner of the
Percentage Interest evidenced by this Class H Certificate (obtained by dividing
the principal balance of this Class H Certificate (its "Certificate Principal
Balance") as of the Issue Date by the aggregate principal balance of all the
Class H Certificates (their "Class Principal Balance") as of the Issue Date) in
that certain beneficial ownership interest evidenced by all the Class H
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Mortgage Capital
Funding, Inc., as Sponsor, Citicorp Real Estate, Inc., as Mortgage Loan Seller,
NationsBanc Mortgage Capital Corporation, as Additional Warranting Party, GMAC
Commercial Mortgage Corporation, as Master Servicer and as Special Servicer,
LaSalle National Bank, as Trustee and REMIC Administrator, and ABN AMRO Bank
N.V. as Fiscal Agent. To the extent not defined herein, the capitalized terms
used herein have the respective meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 20th day of each month or, if such 20th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (as to the Class
H Certificates, the "Record Date"), in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of the Class H Certificates on the applicable
Distribution Date pursuant to the Agreement. All distributions made under the
Agreement on any Class H Certificate will be made by the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto at a bank or other entity having appropriate facilities therefor, if
such Certificateholder shall have provided the Trustee with written wiring
instructions no less than five Business Days prior to the Record Date for such
distribution (which wiring instructions may be in the form of a standing order
applicable to all subsequent distributions as well), or otherwise by check
mailed to the address of such Certificateholder appearing in the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
(determined without regard to any possible future reimbursement of any Realized
Loss or Additional Trust Fund Expense previously allocated to this Certificate)
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
offices of the Certificate Registrar appointed as provided in the Agreement or
such other location as may be
<PAGE>
-4-
specified in such notice. Also notwithstanding the foregoing, any distribution
that may be made with respect to this Certificate in reimbursement of any
Realized Loss or Additional Trust Fund Expense previously allocated to this
Certificate, which reimbursement is to occur after the date on which this
Certificate is surrendered as contemplated by the preceding sentence, will be
made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Sponsor's Multifamily/Commercial Mortgage Pass-Through
Certificates, Series 1996-MC2 (the "Certificates") are limited in right of
distribution to certain collections and recoveries respecting the Mortgage
Loans, all as more specifically set forth herein and in the Agreement. As
provided in the Agreement, withdrawals from the Certificate Account, the
Distribution Account and, if established, the REO Account may be made from time
to time for purposes other than, and, in certain cases, prior to, distributions
to Certificateholders, such purposes including the reimbursement of advances
made, or certain expenses incurred, with respect to the Mortgage Loans and the
payment of interest on such advances and expenses.
The Class H Certificates are issuable in fully registered form only
without coupons in minimum denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, Class H
Certificates are exchangeable for new Class H Certificates in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class H Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No transfer of any Class H Certificate shall be made unless that
transfer is made pursuant to an effective registration statement under the
Securities Act, and effective registration or qualification under applicable
state securities laws, or is made in a transaction which does not require such
registration or qualification. If such a transfer of any Class H Certificate
(other than in connection with the initial issuance thereof or the initial
transfer thereof by the Sponsor or any Affiliate of the Sponsor) is to be made
without registration under the Securities Act, then the Certificate Registrar
shall refuse to register such transfer until it receives the following: (i) a
certificate from the Certificateholder desiring to effect such transfer
substantially in the form attached as Exhibit B-1 to the Agreement; or (ii) a
certificate from the Certificateholder desiring
<PAGE>
-5-
to effect such transfer substantially in the form of Exhibit B-2 to the
Agreement and a certificate from such Certificateholder's prospective transferee
substantially in the form attached as Exhibit B-3 or Exhibit B-4 to the
Agreement; or (iii) an opinion of counsel satisfactory to the Certificate
Registrar to the effect that such transfer may be made without registration
under the Securities Act (which opinion of counsel shall not be an expense of
the Trust Fund or of the Sponsor, the Mortgage Loan Seller, the Master Servicer,
the Special Servicer, the Trustee, the Fiscal Agent, the REMIC Administrator or
the Certificate Registrar in their respective capacities as such), together with
the written certification(s) as to the facts surrounding such transfer from the
Certificateholder desiring to effect such transfer and/or such
Certificateholder's prospective transferee on which such opinion of counsel is
based. None of the Sponsor, the Trustee or the Certificate Registrar is
obligated to register or qualify the Class H Certificates under the Securities
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of any Class H Certificate without
registration or qualification. Any Class H Certificateholder desiring to effect
such a transfer shall, and by the acceptance of its Class H Certificate agrees
to, indemnify the Sponsor, the Trustee and the Certificate Registrar against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.
No transfer of a Class H Certificate or any interest therein shall be
made to (A) any employee benefit plan or other retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds and separate accounts in which such plans, accounts or
arrangements are invested, that is subject to ERISA or the Code (each, a "Plan")
or (B) any Person who is directly or indirectly purchasing the Class H
Certificate or interest therein on behalf of, as named fiduciary of, as trustee
of, or with "plan assets" of Plan within the meaning of the Department of Labor
regulation promulgated at 29 C.F.R. ss.2510.3-101, unless the prospective
transferee provides the Certificate Registrar with a certification of facts and
an opinion of counsel which establish to the satisfaction of the Certificate
Registrar that such transfer will not result in a violation of Section 406 of
ERISA or Section 4975 of the Code or cause the Master Servicer, the Special
Servicer or the Trustee to be deemed a fiduciary of such Plan or result in the
imposition of an excise tax under Section 4975 of the Code. Each Person who
acquires any Class H Certificate or interest therein without delivery of the
certification of facts and opinion of counsel referred to in the preceding
sentence shall be deemed to have certified that it is neither a Plan nor any
Person who is directly or indirectly purchasing such Class H Certificate or
interest therein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan.
No service charge will be imposed for any registration of transfer or
exchange of Class H Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
H Certificates.
Prior to due presentment of this Certificate for registration of
transfer, the Sponsor, the Mortgage Loan Seller, the Master Servicer, the
Special Servicer, the Trustee, the Fiscal Agent, the REMIC Administrator, the
Certificate Registrar and any agents of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof for all
<PAGE>
-6-
purposes, and none of the Sponsor, the Mortgage Loan Seller, the Master
Servicer, the Special Servicer, the Trustee, the Fiscal Agent, the REMIC
Administrator, the Certificate Registrar or any such agent shall be affected by
notice to the contrary.
The Trust Fund and the obligations created by the Agreement shall
terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, and (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Sponsor or the
Mortgage Loan Seller) at a price determined as provided in the Agreement of all
Mortgage Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, any such Majority Certificateholder or the Master
Servicer to purchase from the Trust Fund all Mortgage Loans and any REO
Properties remaining therein. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Pool at the time of
purchase being less than 1% of the initial aggregate Stated Principal Balance of
the Mortgage Pool specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Sponsor, the Mortgage Loan Seller, the Additional Warranting Party, the Master
Servicer, the Special Servicer, the Trustee, the Fiscal Agent and the REMIC
Administrator thereunder and the rights of the Certificateholders thereunder, at
any time by the Sponsor, the Mortgage Loan Seller, the Additional Warranting
Party, the Master Servicer, the Special Servicer, the Trustee, the Fiscal Agent
and the REMIC Administrator with the consent of the Holders of Certificates
entitled to at least 51% of the Voting Rights allocated to the affected Classes.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
circumstances, including any amendment necessary to maintain the status of REMIC
I or REMIC II as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it
will look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal
laws of the State of New York applicable to agreements made and to be performed
in said State, and the obligations, rights and remedies of the Holder hereof
shall be determined in accordance with such laws.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class H Certificates referred to in the
within-mentioned Agreement.
Dated:
LaSalle National Bank,
as Certificate Registrar
By:________________________________
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________
______________________________________________________________
______________________________________________________________
(please print or typewrite name and address
including postal zip code of assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Multifamily/Commercial Mortgage Pass-Through Certificate and hereby authorize(s)
the registration of transfer of such interest to the above named assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Multifamily/Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and delivery of such Multifamily/Commercial Mortgage
Pass-Through Certificate to the following address:_____________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
__________________________________________
Signature by or on behalf of Assignor
__________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to _________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________.
Distributions made by check (such check to be made payable to
____________________) and all applicable statements and notices should be mailed
to ____________________________________________________________________________.
This information is provided by ___________________________, the
assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT A-12
FORM OF CLASS R-I CERTIFICATE
CLASS R-I MULTIFAMILY/COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1996-MC2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial "whole" mortgage loans (the "Mortgage Loans"), such pool being formed
and sold by
MORTGAGE CAPITAL FUNDING, INC.
Date of Pooling and Servicing Percentage Interest evidenced by this
Agreement: December 1, 1996 Certificate in the related Class:
100%
Cut-off Date: December 1, 1996 Aggregate unpaid principal balance of
the Mortgage Pool as of the Cut-off
Issue Date: December 19, 1996 Date, after deducting payments of
principal due on or before such date:
First Distribution Date: $458,055,542
January 21, 1997
Master Servicer: Trustee and REMIC Administrator:
GMAC Commercial Mortgage Corporation LaSalle National Bank
Special Servicer: Mortgage Loan Seller:
GMAC Commercial Mortgage Corporation Citicorp Real Estate, Inc.
Fiscal Agent:
ABN AMRO Bank N.V.
Certificate No. R-I-1
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MORTGAGE
CAPITAL FUNDING, INC., CITICORP REAL ESTATE, INC., GMAC COMMERCIAL MORTGAGE
CORPORATION, LASALLE NATIONAL BANK, ABN AMRO BANK N.V., OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER
PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS X, CLASS A-1, CLASS A-2, CLASS A-3,
CLASS B, CLASS C, CLASS D, CLASS E, CLASS F, CLASS G AND
<PAGE>
-2-
CLASS H CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT PROVIDED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN 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 5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, MAY BE MADE EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED
HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
CONSEQUENTLY, TRANSFER OF THIS CERTIFICATE IS ALSO SUBJECT TO THE ADDITIONAL TAX
RELATED TRANSFER RESTRICTIONS DESCRIBED HEREIN. IF ANY PERSON BECOMES THE
REGISTERED HOLDER OF THIS CERTIFICATE IN VIOLATION OF SUCH TRANSFER
RESTRICTIONS, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER
FOR ANY PURPOSE HEREUNDER OR UNDER THE POOLING AND SERVICING AGREEMENT REFERRED
TO HEREIN, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE.
This certifies that Citicorp Real Estate, Inc. is the registered owner
of the Percentage Interest evidenced by this Class R-I Certificate (as specified
above) in that certain beneficial ownership interest evidenced by all the Class
R-I Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Mortgage Capital
Funding, Inc., as Sponsor, Citicorp Real Estate, Inc., as Mortgage Loan Seller,
NationsBanc Mortgage Capital Corporation, as Additional Warranting Party, GMAC
Commercial Mortgage Corporation, as Master Servicer and as Special Servicer,
LaSalle National Bank, as Trustee and REMIC Administrator and ABN AMRO Bank N.V.
as
<PAGE>
-3-
Fiscal Agent. To the extent not defined herein, the capitalized terms used
herein have the respective meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 20th day of each month or, if such 20th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), commencing
upon 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 (as to the
Class R-I Certificates, the "Record Date"), in an amount equal to the product of
the Percentage Interest evidenced by this Certificate and the amount required to
be distributed to the Holders of the Class R-I Certificates on the applicable
Distribution Date pursuant to the Agreement. All distributions made under the
Agreement on any Class R-I Certificate will be made by the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto at a bank or other entity having appropriate facilities therefor, if
such Certificateholder shall have provided the Trustee with written wiring
instructions no less than five Business Days prior to the Record Date for such
distribution (which wiring instructions may be in the form of a standing order
applicable to all subsequent distributions as well), or otherwise by check
mailed to the address of the Person entitled thereto, as such name and address
appear in the Certificate Register. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee of
the pendency of such distribution and only upon presentation and surrender of
this Certificate at the offices of the Certificate Registrar appointed as
provided in the Agreement or such other location as may be specified in such
notice.
The Sponsor's Multifamily/Commercial Mortgage Pass-Through
Certificates, Series 1996-MC2 (the "Certificates") are limited in right of
distribution to certain collections and recoveries respecting the Mortgage
Loans, all as more specifically set forth herein and in the Agreement. As
provided in the Agreement, withdrawals from the Certificate Account,
Distribution Account and, if established, the REO Account may be made from time
to time for purposes other than, and, in certain cases, prior to, distributions
to Certificateholders, such purposes including the reimbursement of advances
made, or certain expenses incurred, with respect to the Mortgage Loans and the
payment of interest on such advances and expenses.
The Class R-I Certificates are issuable in fully registered form only
without coupons in minimum denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Class R-I Certificates are exchangeable for new
Class R-I Certificates in authorized denominations evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate
<PAGE>
-4-
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class R-I Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No transfer of any Class R-I Certificate shall be made unless that
transfer is made pursuant to an effective registration statement under the
Securities Act, and effective registration or qualification under applicable
state securities laws, or is made in a transaction which does not require such
registration or qualification. If such a transfer of any Class R-I Certificate
(other than in connection with the initial issuance thereof or the initial
transfer thereof by the Sponsor or any Affiliate of the Sponsor) is to be made
without registration under the Securities Act, then the Certificate Registrar
shall refuse to register such transfer unless it receives the following: (i) a
certificate from the Certificateholder desiring to effect such transfer
substantially in the form attached as Exhibit B-1 to the Agreement; or (ii) a
certificate from the Certificateholder desiring to effect such transfer
substantially in the form of Exhibit B-2 to the Agreement and a certificate from
such Certificateholder's prospective transferee substantially in the form
attached as Exhibit B-3 or Exhibit B-4 to the Agreement; or (iii) an opinion of
counsel satisfactory to the Certificate Registrar to the effect that such
transfer may be made without registration under the Securities Act (which
opinion of counsel shall not be an expense of the Trust Fund or of the Sponsor,
the Mortgage Loan Seller, the Master Servicer, the Special Servicer, the
Trustee, the Fiscal Agent, the REMIC Administrator or the Certificate Registrar
in their respective capacities as such), together with the written
certification(s) as to the facts surrounding such transfer from the
Certificateholder desiring to effect such transfer and/or such
Certificateholder's prospective transferee on which such opinion of counsel is
based. None of the Sponsor, the Trustee or the Certificate Registrar is
obligated to register or qualify the Class R-I Certificates under the Securities
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of any Class R-I Certificate without
registration or qualification. Any Class R-I Certificateholder desiring to
effect such a transfer shall, and by the acceptance of its Class R-I Certificate
agrees to, indemnify the Sponsor, the Trustee, the Fiscal Agent, the REMIC
Administrator and the Certificate Registrar against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.
No transfer of a Class R-I Certificate or any interest therein shall
be made to (A) any employee benefit plan or other retirement arrangement,
including individual retirement accounts and annuities, Keogh plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested, that is subject to ERISA or the Code (each, a
"Plan") or (B) any Person who is directly or indirectly purchasing the Class R-I
Certificate or interest therein on behalf of, as named fiduciary of, as trustee
of, or with "plan assets" of Plan within the meaning of the Department of Labor
regulation promulgated at 29 C.F.R. ss.2510.3-101, unless the prospective
transferee provides the Certificate Registrar with a certification of facts and
an opinion of counsel which establish to the satisfaction of the Certificate
Registrar that such transfer will not result in a violation of Section 406 of
ERISA or Section 4975 of the Code or cause the Master Servicer, the Special
Servicer or the Trustee to be deemed a fiduciary of such Plan or result in the
imposition of an excise tax under Section 4975 of the Code.
<PAGE>
-5-
Each Person who has or who acquires any Ownership Interest in this
Certificate shall be deemed by the acceptance or acquisition of such Ownership
Interest to have agreed to be bound by the provisions of Section 5.02(d) of the
Agreement and, if any purported Transferee shall become a Holder of this
Certificate in violation of the provisions of such Section 5.02(d), to have
irrevocably authorized the Trustee under clause (ii)(A) of such Section 5.02(d)
to deliver payments to a Person other than such Person and to have irrevocably
authorized the Trustee under clause (ii)(B) of such Section 5.02(d) to negotiate
the terms of any mandatory sale and to execute all instruments of Transfer and
to do all other things necessary in connection with any such sale. Each Person
holding or acquiring any Ownership Interest in this Certificate must be a
Permitted Transferee and a United States Person and shall promptly notify the
Master Servicer, the Trustee and the REMIC Administrator of any change or
impending change in its status as a Permitted Transferee or United States
Person. In connection with any proposed Transfer of any Ownership Interest in
this Certificate, the Certificate Registrar shall require delivery to it, and
shall not register the Transfer of this Certificate until its receipt of, an
affidavit and agreement substantially in the form attached as Exhibit C-1 to the
Agreement (a "Transfer Affidavit and Agreement") from the proposed Transferee,
in form and substance satisfactory to the Certificate Registrar, representing
and warranting, among other things, that such Transferee is a Permitted
Transferee and a United States Person, that it is not acquiring its Ownership
Interest in this Certificate as a nominee, trustee or agent for any Person that
is not a Permitted Transferee or is not a United States Person, that for so long
as it retains its Ownership Interest in this Certificate, it will endeavor to
remain a Permitted Transferee and a United States Person, and that it has
reviewed the provisions of Section 5.02(d) of the Agreement and agrees to be
bound by them. Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee, if the Certificate Registrar has actual
knowledge that the proposed Transferee is not a Permitted Transferee or is not a
United States Person, the Certificate Registrar shall not register the Transfer
of an Ownership Interest in this Certificate to such proposed Transferee.
Each Person holding or acquiring any Ownership Interest in this
Certificate shall agree (x) to require a Transfer Affidavit and Agreement from
any other Person to whom such Person attempts to transfer its Ownership Interest
herein and (y) not to transfer its Ownership Interest unless it provides to the
Certificate Registrar a certificate substantially in the form attached as
Exhibit C-2 to the Agreement stating that, among other things, it has no actual
knowledge that such other Person is not a Permitted Transferee or is not a
United States Person. Each Person holding or acquiring an Ownership Interest in
this Certificate, by purchasing such Ownership Interest herein, agrees to give
the Trustee and the REMIC Administrator written notice that it is a
"pass-through interest holder" within the meaning of temporary Treasury
regulation Section 1.67-3T(a)(2)(i)(A) immediately upon acquiring such Ownership
Interest, if it is, or is holding such Ownership Interest on behalf of, a
"pass-through interest holder".
The provisions of Section 5.02(d) of the Agreement may be modified,
added to or eliminated, provided that there shall have been delivered to the
Trustee and the REMIC Administrator the following: (a) written notification from
each Rating Agency to the effect that the modification of, addition to or
elimination of such provisions will not cause such Rating Agency to withdraw,
qualify or downgrade its then-current rating of any Class of Certificates;
<PAGE>
-6-
and (b) an opinion of counsel, in form and substance satisfactory to the Trustee
and the REMIC Administrator, to the effect that such modification of, addition
to or elimination of such provisions will not cause either REMIC I or REMIC II
to (x) cease to qualify as a REMIC or (y) be subject to an entity-level tax
caused by the Transfer of any Class R-I Certificate to a Person which is not a
Permitted Transferee or a United States Person, or cause a Person other than the
prospective Transferee to be subject to a REMIC-related tax caused by the
Transfer of a Class R-I Certificate to a Person which is not a Permitted
Transferee or a United States Person.
A "Permitted Transferee" is any Transferee other than (i) the United
States, any State or political subdivision thereof, any possession of the United
States, or any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax and, except for FHLMC, a majority of its board of directors is not selected
by such governmental unit), (ii) a foreign government, any international
organization, or any agency or instrumentality of any of the foregoing, (iii)
any organization (other than certain farmers' cooperatives described in Section
521 of the Code) which is exempt from the tax imposed by Chapter 1 of the Code
(including the tax imposed by Section 511 of the Code on unrelated business
taxable income), (iv) rural electric and telephone cooperatives described in
Section 1381(a)(2)(C) of the Code and (v) any other Person so designated by the
REMIC Administrator based upon an opinion of counsel that the holding of an
Ownership Interest in a Class R-I Certificate by such Person may cause the Trust
Fund or any Person having an Ownership Interest in any Class of Certificates
(other than such Person) to incur a liability for any federal tax imposed under
the Code that would not otherwise be imposed but for the Transfer of an
Ownership Interest in a Class R-I Certificate to such Person. The terms "United
States", "State" and "international organization" shall have the meanings set
forth in Section 7701 of the Code or successor provisions.
A "Non-United States Person" is any Person other than a United States
Person. A "United States Person" is a citizen or resident of the United States,
a corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, 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 if (A) for
taxable years beginning after December 31, 1996 (or for taxable years ending
after August 20, 1996, if the trustee has made an applicable election), a court
within the United States is able to exercise primary supervision over the
administration of such trust, and one or more United States fiduciaries have the
authority to control all substantial decisions of such trust, or (B) for all
other taxable years, such trust is subject to U.S. federal income tax regardless
of the source of its income.
No service charge will be imposed for any registration of transfer or
exchange of Class R-I Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
R-I Certificates.
<PAGE>
-7-
Prior to due presentment of this Certificate for registration of
transfer, the Sponsor, the Mortgage Loan Seller, the Additional Warranting
Party, the Master Servicer, the Special Servicer, the Trustee, the Fiscal Agent,
the REMIC Administrator, the Certificate Registrar and any agents of any of them
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Sponsor, the Mortgage Loan Seller, the
Additional Warranting Party, the Master Servicer, the Special Servicer, the
Trustee, the Fiscal Agent, the REMIC Administrator, the Certificate Registrar or
any such agent shall be affected by notice to the contrary.
The Trust Fund and the obligations created by the Agreement shall
terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, and (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Sponsor or the
Mortgage Loan Seller) at a price determined as provided in the Agreement of all
Mortgage Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, any such Majority Certificateholder or the Master
Servicer to purchase from the Trust Fund all Mortgage Loans and any REO
Properties remaining therein. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Pool at the time of
purchase being less than 1% of the initial aggregate Stated Principal Balance of
the Mortgage Pool specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Sponsor, the Mortgage Loan Seller, the Additional Warranting Party, the Master
Servicer, the Special Servicer, the Trustee, the Fiscal Agent and the REMIC
Administrator thereunder and the rights of the Certificateholders thereunder, at
any time by the Sponsor, the Mortgage Loan Seller, the Additional Warranting
Party, the Master Servicer, the Special Servicer, the Trustee, the Fiscal Agent
and the REMIC Administrator with the consent of the Holders of Certificates
entitled to at least 51% of the Voting Rights allocated to the affected Classes.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
circumstances, including any amendment necessary to maintain the status of REMIC
I or REMIC II as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it
will look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
<PAGE>
-8-
This Certificate shall be construed in accordance with the internal
laws of the State of New York applicable to agreements made and to be performed
in said State, and the obligations, rights and remedies of the Holder hereof
shall be determined in accordance with such laws.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-I Certificates referred to in the
within-mentioned Agreement.
Dated:
LaSalle National Bank,
as Certificate Registrar
By:____________________________
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________
______________________________________________________________
______________________________________________________________
(please print or typewrite name and address
including postal zip code of assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Multifamily/Commercial Mortgage Pass-Through Certificate and hereby authorize(s)
the registration of transfer of such interest to the above named assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Multifamily/Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and delivery of such Multifamily/Commercial Mortgage
Pass-Through Certificate to the following address:_____________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
__________________________________________
Signature by or on behalf of Assignor
__________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to _________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________.
Distributions made by check (such check to be made payable to
____________________) and all applicable statements and notices should be mailed
to ____________________________________________________________________________.
This information is provided by ___________________________, the
assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT A-13
CLASS R-II CERTIFICATE
CLASS R-II MULTIFAMILY/COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1996-MC2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial "whole" mortgage loans (the "Mortgage Loans"), such pool being formed
and sold by
MORTGAGE CAPITAL FUNDING, INC.
Date of Pooling and Servicing Percentage Interest evidenced by this
Agreement: December 1, 1996 Certificate in the related Class:
100%
Cut-off Date: December 1, 1996 Aggregate unpaid principal balance of
the Mortgage Pool as of the Cut-off
Issue Date: December 19, 1996 Date, after deducting payments of
First Distribution Date: principal due on or before such date:
January 21, 1997 $458,055,542
Master Servicer: Trustee and REMIC Administrator:
GMAC Commercial Mortgage Corporation LaSalle National Bank
Special Servicer: Mortgage Loan Seller:
GMAC Commercial Mortgage Corporation Citicorp Real Estate, Inc.
Fiscal Agent:
ABN AMRO Bank N.V.
Certificate No. R-II-1
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MORTGAGE
CAPITAL FUNDING, INC., CITICORP REAL ESTATE, INC., GMAC COMMERCIAL MORTGAGE
CORPORATION, LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER
PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS X, CLASS A-1, CLASS A-2, CLASS A-3,
CLASS B, CLASS C, CLASS D, CLASS E, CLASS F, CLASS G AND
<PAGE>
-2-
CLASS H CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT PROVIDED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN 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 5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, MAY BE MADE EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED
HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
CONSEQUENTLY, TRANSFER OF THIS CERTIFICATE IS ALSO SUBJECT TO THE ADDITIONAL TAX
RELATED TRANSFER RESTRICTIONS DESCRIBED HEREIN. IF ANY PERSON BECOMES THE
REGISTERED HOLDER OF THIS CERTIFICATE IN VIOLATION OF SUCH TRANSFER
RESTRICTIONS, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER
FOR ANY PURPOSE HEREUNDER OR UNDER THE POOLING AND SERVICING AGREEMENT REFERRED
TO HEREIN, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE.
This certifies that Citicorp Real Estate, Inc. is the registered owner
of the Percentage Interest evidenced by this Class R-II Certificate (as
specified above) in that certain beneficial ownership interest evidenced by all
the Class R-II Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Mortgage
Capital Funding, Inc., as Sponsor, Citicorp Real Estate, Inc., as Mortgage Loan
Seller, NationsBanc Mortgage Capital Corporation, as Additional Warranting
Party, GMAC Commercial Mortgage Corporation, as Master Servicer and as Special
Servicer, LaSalle National Bank, as Trustee and REMIC Administrator and ABN AMRO
Bank N.V. as
<PAGE>
-3-
Fiscal Agent. To the extent not defined herein, the capitalized terms used
herein have the respective meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 20th day of each month or, if such 20th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), commencing
upon 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 (as to the
Class R-II Certificates, the "Record Date"), in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of the Class R-II Certificates on the
applicable Distribution Date pursuant to the Agreement. All distributions made
under the Agreement on any Class R-II Certificate will be made by the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto at a bank or other entity having appropriate facilities
therefor, if such Certificateholder shall have provided the Trustee with written
wiring instructions no less than five Business Days prior to the Record Date for
such distribution (which wiring instructions may be in the form of a standing
order applicable to all subsequent distributions as well), or otherwise by check
mailed to the address of the Person entitled thereto, as such name and address
appear in the Certificate Register. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee of
the pendency of such distribution and only upon presentation and surrender of
this Certificate at the offices of the Certificate Registrar appointed as
provided in the Agreement or such other location as may be specified in such
notice.
The Sponsor's Multifamily/Commercial Mortgage Pass-Through
Certificates, Series 1996-MC2 (the "Certificates") are limited in right of
distribution to certain collections and recoveries respecting the Mortgage
Loans, all as more specifically set forth herein and in the Agreement. As
provided in the Agreement, withdrawals from the Certificate Account, the
Distribution Account and, if established, the REO Account may be made from time
to time for purposes other than, and, in certain cases, prior to, distributions
to Certificateholders, such purposes including the reimbursement of advances
made, or certain expenses incurred, with respect to the Mortgage Loans and the
payment of interest on such advances and expenses.
The Class R-II Certificates are issuable in fully registered form only
without coupons in minimum denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Class R-II Certificates are exchangeable for new
Class R-II Certificates in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate
<PAGE>
-4-
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class R-II Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No transfer of any Class R-II Certificate shall be made unless that
transfer is made pursuant to an effective registration statement under the
Securities Act, and effective registration or qualification under applicable
state securities laws, or is made in a transaction which does not require such
registration or qualification. If such a transfer of any Class R-II Certificate
(other than in connection with the initial issuance thereof or the initial
transfer thereof by the Sponsor or any Affiliate of the Sponsor) is to be made
without registration under the Securities Act, then the Certificate Registrar
shall refuse to register such transfer unless it receives the following: (i) a
certificate from the Certificateholder desiring to effect such transfer
substantially in the form attached as Exhibit B-1 to the Agreement; or (ii) a
certificate from the Certificateholder desiring to effect such transfer
substantially in the form of Exhibit B-2 to the Agreement and a certificate from
such Certificateholder's prospective transferee substantially in the form
attached as Exhibit B-3 or Exhibit B-4 to the Agreement; or (iii) an opinion of
counsel satisfactory to the Certificate Registrar to the effect that such
transfer may be made without registration under the Securities Act (which
opinion of counsel shall not be an expense of the Trust Fund or of the Sponsor,
the Mortgage Loan Seller, the Master Servicer, the Special Servicer, the
Trustee, the Fiscal Agent, the REMIC Administrator or the Certificate Registrar
in their respective capacities as such), together with the written
certification(s) as to the facts surrounding such transfer from the
Certificateholder desiring to effect such transfer and/or such
Certificateholder's prospective transferee on which such opinion of counsel is
based. None of the Sponsor, the Trustee or the Certificate Registrar is
obligated to register or qualify the Class R-II Certificates under the
Securities Act or any other securities law or to take any action not otherwise
required under the Agreement to permit the transfer of any Class R-II
Certificate without registration or qualification. Any Class R-II
Certificateholder desiring to effect such a transfer shall, and by the
acceptance of its Class R-II Certificate agrees to, indemnify the Sponsor, the
Trustee, the Fiscal Agent, the REMIC Administrator and the Certificate Registrar
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
No transfer of a Class R-II Certificate or any interest therein shall
be made to (A) any employee benefit plan or other retirement arrangement,
including individual retirement accounts and annuities, Keogh plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested, that is subject to ERISA or the Code (each, a
"Plan") or (B) any Person who is directly or indirectly purchasing the Class
R-II Certificate or interest therein on behalf of, as named fiduciary of, as
trustee of, or with "plan assets" of Plan within the meaning of the Department
of Labor regulation promulgated at 29 C.F.R. ss.2510.3-101, unless the
prospective transferee provides the Certificate Registrar with a certification
of facts and an opinion of counsel which establish to the satisfaction of the
Certificate Registrar that such transfer will not result in a violation of
Section 406 of ERISA or Section 4975 of the Code or cause the Master Servicer,
the Special Servicer or the Trustee to be deemed a fiduciary of such Plan or
result in the imposition of an excise tax under Section 4975 of the Code.
<PAGE>
-5-
Each Person who has or who acquires any Ownership Interest in this
Certificate shall be deemed by the acceptance or acquisition of such Ownership
Interest to have agreed to be bound by the provisions of Section 5.02(d) of the
Agreement and, if any purported Transferee shall become a Holder of this
Certificate in violation of the provisions of such Section 5.02(d), to have
irrevocably authorized the Trustee under clause (ii)(A) of such Section 5.02(d)
to deliver payments to a Person other than such Person and to have irrevocably
authorized the Trustee under clause (ii)(B) of such Section 5.02(d) to negotiate
the terms of any mandatory sale and to execute all instruments of Transfer and
to do all other things necessary in connection with any such sale. Each Person
holding or acquiring any Ownership Interest in this Certificate must be a
Permitted Transferee and a United States Person and shall promptly notify the
Master Servicer, the Trustee and the REMIC Administrator of any change or
impending change in its status as a Permitted Transferee or United States
Person. In connection with any proposed Transfer of any Ownership Interest in
this Certificate, the Certificate Registrar shall require delivery to it, and
shall not register the Transfer of this Certificate until its receipt of, an
affidavit and agreement substantially in the form attached as Exhibit C-1 to the
Agreement (a "Transfer Affidavit and Agreement") from the proposed Transferee,
in form and substance satisfactory to the Certificate Registrar, representing
and warranting, among other things, that such Transferee is a Permitted
Transferee and a United States Person, that it is not acquiring its Ownership
Interest in this Certificate as a nominee, trustee or agent for any Person that
is not a Permitted Transferee or is not a United States Person, that for so long
as it retains its Ownership Interest in this Certificate, it will endeavor to
remain a Permitted Transferee and a United States Person, and that it has
reviewed the provisions of Section 5.02(d) of the Agreement and agrees to be
bound by them. Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee, if the Certificate Registrar has actual
knowledge that the proposed Transferee is not a Permitted Transferee or is not a
United States Person, the Certificate Registrar shall not register the Transfer
of an Ownership Interest in this Certificate to such proposed Transferee.
Each Person holding or acquiring any Ownership Interest in this
Certificate shall agree (x) to require a Transfer Affidavit and Agreement from
any other Person to whom such Person attempts to transfer its Ownership Interest
herein and (y) not to transfer its Ownership Interest unless it provides to the
Certificate Registrar a certificate substantially in the form attached as
Exhibit C-2 to the Agreement stating that, among other things, it has no actual
knowledge that such other Person is not a Permitted Transferee or is not a
United States Person. Each Person holding or acquiring an Ownership Interest in
this Certificate, by purchasing such Ownership Interest herein, agrees to give
the Trustee and the REMIC Administrator written notice that it is a
"pass-through interest holder" within the meaning of temporary Treasury
regulation Section 1.67-3T(a)(2)(i)(A) immediately upon acquiring such Ownership
Interest, if it is, or is holding such Ownership Interest on behalf of, a
"pass-through interest holder".
The provisions of Section 5.02(d) of the Agreement may be modified,
added to or eliminated, provided that there shall have been delivered to the
Trustee and the REMIC Administrator the following: (a) written notification from
each Rating Agency to the effect that the modification of, addition to or
elimination of such provisions will not cause such Rating Agency to withdraw,
qualify or downgrade its then-current rating of any Class of Certificates;
<PAGE>
-6-
and (b) an opinion of counsel, in form and substance satisfactory to the Trustee
and the REMIC Administrator, to the effect that such modification of, addition
to or elimination of such provisions will not cause either REMIC I or REMIC II
to (x) cease to qualify as a REMIC or (y) be subject to an entity-level tax
caused by the Transfer of any Class R-II Certificate to a Person which is not a
Permitted Transferee or a United States Person, or cause a Person other than the
prospective Transferee to be subject to a REMIC-related tax caused by the
Transfer of a Class R-II Certificate to a Person which is not a Permitted
Transferee or a United States Person.
A "Permitted Transferee" is any Transferee other than (i) the United
States, any State or political subdivision thereof, any possession of the United
States, or any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax and, except for FHLMC, a majority of its board of directors is not selected
by such governmental unit), (ii) a foreign government, any international
organization, or any agency or instrumentality of any of the foregoing, (iii)
any organization (other than certain farmers' cooperatives described in Section
521 of the Code) which is exempt from the tax imposed by Chapter 1 of the Code
(including the tax imposed by Section 511 of the Code on unrelated business
taxable income), (iv) rural electric and telephone cooperatives described in
Section 1381(a)(2)(C) of the Code and (v) any other Person so designated by the
REMIC Administrator based upon an opinion of counsel that the holding of an
Ownership Interest in a Class R-II Certificate by such Person may cause the
Trust Fund or any Person having an Ownership Interest in any Class of
Certificates (other than such Person) to incur a liability for any federal tax
imposed under the Code that would not otherwise be imposed but for the Transfer
of an Ownership Interest in a Class R-II Certificate to such Person. The terms
"United States", "State" and "international organization" shall have the
meanings set forth in Section 7701 of the Code or successor provisions.
A "Non-United States Person" is any Person other than a United States
Person. A "United States Person" is a citizen or resident of the United States,
a corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, 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 if (A) for
taxable years beginning after December 31, 1996 (or for taxable years ending
after August 20, 1996, if the trustee has made an applicable election), a court
within the United States is able to exercise primary supervision over the
administration of such trust, and one or more United States fiduciaries have the
authority to control all substantial decisions of such trust, or (B) for all
other taxable years, such trust is subject to U.S. federal income tax regardless
of the source of its income.
No service charge will be imposed for any registration of transfer or
exchange of Class R-II Certificates, but the Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any transfer or
exchange of Class R-II Certificates.
<PAGE>
-7-
Prior to due presentment of this Certificate for registration of
transfer, the Sponsor, the Mortgage Loan Seller, the Additional Warranting
Party, the Master Servicer, the Special Servicer, the Trustee, the Fiscal Agent,
the REMIC Administrator, the Certificate Registrar and any agents of any of them
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Sponsor, the Mortgage Loan Seller, the
Additional Warranting Party, the Master Servicer, the Special Servicer, the
Trustee, the Fiscal Agent, the REMIC Administrator, the Certificate Registrar or
any such agent shall be affected by notice to the contrary.
The Trust Fund and the obligations created by the Agreement shall
terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, and (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Sponsor or the
Mortgage Loan Seller) at a price determined as provided in the Agreement of all
Mortgage Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, any such Majority Certificateholder or the Master
Servicer to purchase from the Trust Fund all Mortgage Loans and any REO
Properties remaining therein. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Pool at the time of
purchase being less than 1% of the initial aggregate Stated Principal Balance of
the Mortgage Pool specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Sponsor, the Mortgage Loan Seller, the Additional Warranting Party, the Master
Servicer, the Special Servicer, the Trustee, the Fiscal Agent and the REMIC
Administrator thereunder and the rights of the Certificateholders thereunder, at
any time by the Sponsor, the Mortgage Loan Seller, the Additional Warranting
Party, the Master Servicer, the Special Servicer, the Trustee, the Fiscal Agent
and the REMIC Administrator with the consent of the Holders of Certificates
entitled to at least 51% of the Voting Rights allocated to the affected Classes.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
circumstances, including any amendment necessary to maintain the status of REMIC
I or REMIC II as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it
will look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
<PAGE>
-8-
This Certificate shall be construed in accordance with the internal
laws of the State of New York applicable to agreements made and to be performed
in said State, and the obligations, rights and remedies of the Holder hereof
shall be determined in accordance with such laws.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-II Certificates referred to in the
within-mentioned Agreement.
Dated:
LaSalle National Bank,
as Certificate Registrar
By:____________________________
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________
______________________________________________________________
______________________________________________________________
(please print or typewrite name and address
including postal zip code of assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Multifamily/Commercial Mortgage Pass-Through Certificate and hereby authorize(s)
the registration of transfer of such interest to the above named assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Multifamily/Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and delivery of such Multifamily/Commercial Mortgage
Pass-Through Certificate to the following address:_____________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
__________________________________________
Signature by or on behalf of Assignor
__________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to _________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________.
Distributions made by check (such check to be made payable to
____________________) and all applicable statements and notices should be mailed
to ____________________________________________________________________________.
This information is provided by ___________________________, the
assignee named above, or ____________________________________, as its agent.
<PAGE>
EXHIBIT B-1
FORM I OF TRANSFEROR CERTIFICATE
PURSUANT TO SECTION 5.02(b)
_____________, 19__
LaSalle National Bank
Asset Backed Securities Trust Services
135 South LaSalle Street, Suite 1740
Chicago, Illinois 60674-4175
Attention: Corporate Trust Department
Re: Mortgage Capital Funding, Inc., Multifamily/Commercial
Mortgage Pass-Through Certificate, Series 1996-MC2,
Class [F] [G] [H] [R-I] [R-II], [having an initial
principal balance as of December __, 1996 (the "Issue
Date") of $__________] [evidencing a ____% percentage
interest in the Class to which it belongs]
Dear Sirs:
This letter is delivered to you in connection with the transfer by
_________________ (the "Transferor") to _________________ (the "Transferee") of
the captioned Certificate (the "Certificate"), pursuant to Section 5.02 of the
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"), dated
as of December 1, 1996, among Mortgage Capital Funding, Inc., as Sponsor,
Citicorp Real Estate, Inc., as Mortgage Loan Seller, NationsBanc Mortgage
Capital Corporation, as Additional Warranting Party, GMAC Commercial Mortgage
Corporation, as Master Servicer and as Special Servicer, LaSalle National Bank,
as Trustee and REMIC Administrator and ABN AMRO Bank N.V. as Fiscal Agent. All
terms used herein and not otherwise defined 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. The Transferor is the lawful owner of the Certificate with the full
right to transfer the 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 the
Certificate, any interest in the 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 the Certificate, any interest in
the Certificate or any other similar security from any person in any
manner, (c) otherwise approached or negotiated with respect to the
Certificate, any interest in the Certificate or any other similar security
with any person in any manner, (d) made any
<PAGE>
-2-
general solicitation with respect to the Certificate, any interest in the
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 the
Certificate, any interest in the Certificate or any other similar security,
which (in the case of any of the acts described in clauses (a) through (e)
hereof) would constitute a distribution under the Securities Act of 1933
(the "Securities Act"), or would render the disposition of the Certificate
a violation of Section 5 of the Securities Act or any state securities
laws, or would require registration or qualification of the Certificate
pursuant to the Securities Act or any state securities laws.
3. The Transferor and any person acting on behalf of the Transferor in
this matter reasonably believe that the Transferee is a "qualified
institutional buyer" (as that term is defined in Rule 144A ("Rule 144A")
under the Securities Act) purchasing for its own account. In determining
whether the Transferee is a "qualified institutional buyer", the Transferor
and any person acting on behalf of the Transferor in this matter has relied
upon the following method(s) of establishing the Transferee's ownership and
discretionary investments of securities (check one or more):
___ (a) The Transferee's most recent publicly available financial
statements, which statements present the information as of a date
within 16 months preceding the date of sale of the Certificate in
the case of a U.S. purchaser and within 18 months preceding such
date of sale for a foreign purchaser; or
___ (b) The most recent publicly available information appearing in
documents filed by the Transferee with the Securities and
Exchange Commission or another United States federal, state, or
local governmental agency or self-regulatory organization, or
with a foreign governmental agency or self-regulatory
organization, which information is as of a date within 16 months
preceding the date of sale of the Certificate in the case of a
U.S. purchaser and within 18 months preceding such date of sale
for a foreign purchaser; or
___ (c) The most recent publicly available information appearing in a
recognized securities manual, which information is as of a date
within 16 months preceding the date of sale of the Certificate in
the case of a U.S. purchaser and within 18 months preceding such
date of sale for a foreign purchaser; or
___ (d) A certification by the chief financial officer, a person
fulfilling an equivalent function, or other executive officer of
the Transferee, specifying the amount of securities owned and
invested on a discretionary basis by the Transferee as of a
specific date on or since the close of the Transferee's most
recent fiscal year, or, in the case of a Transferee that is a
member of a "family of investment companies", as that term is
defined in Rule 144A, a certification by an executive officer of
the
<PAGE>
-3-
investment adviser specifying the amount of securities owned by
the "family of investment companies" as of a specific date on or
since the close of the Transferee's most recent fiscal year.
4. The Transferor and any person acting on behalf of the Transferor
understand that in determining the aggregate amount of securities owned and
invested on a discretionary basis by an entity for purposes of establishing
whether such entity is a "qualified institutional buyer":
(a) the following instruments and interests shall be excluded:
securities of issuers that are affiliated with the Transferee;
securities that are part of an unsold allotment to or
subscription by the Transferee, if the Transferee is a dealer;
securities of issuers that are part of the Transferee's "family
of investment companies", if the Transferee is a registered
investment company; bank deposit notes and certificates of
deposit; loan participations; repurchase agreements; securities
owned but subject to a repurchase agreement; and currency,
interest rate and commodity swaps;
(b) the aggregate value of the securities shall be the cost of
such securities, except where the entity 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
may be valued at market;
(c) securities owned by subsidiaries of the entity that are
consolidated with the entity in its financial statements prepared
in accordance with generally accepted accounting principles may
be included if the investments of such subsidiaries are managed
under the direction of the entity, except that, unless the entity
is a reporting company under Section 13 or 15(d) of the
Securities Exchange Act of 1934, securities owned by such
subsidiaries may not be included if the entity itself is a
majority-owned subsidiary that would be included in the
consolidated financial statements of another enterprise.
5. The Transferor or a person acting on its behalf has taken
reasonable steps to ensure that the Transferee is aware that the Transferor
is relying on the exemption from the provisions of Section 5 of the
Securities Act provided by Rule 144A.
6. The Transferor or a person acting on its behalf has furnished, or
caused to be furnished, to the Transferee all information regarding (a) the
Certificate and distributions
<PAGE>
-4-
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 Certificate, that the Transferee has
requested.
Very truly yours,
_________________________________
(Transferor)
By:______________________________
Name:____________________________
Title:___________________________
<PAGE>
EXHIBIT B-2
FORM II OF TRANSFEROR CERTIFICATE
PURSUANT TO SECTION 5.02(b)
_____________, 19__
LaSalle National Bank
Asset Backed Securities Trust Services
135 South LaSalle Street, Suite 1740
Chicago, Illinois 60674-4175
Attention: Corporate Trust Department
Re: Mortgage Capital Funding, Inc., Multifamily/Commercial
Mortgage Pass-Through Certificate, Series 1996-MC2,
Class [F] [G] [H] [R-I] [R-II], [having an initial
principal balance as of December __, 1996 (the "Issue
Date") of $__________] [evidencing a ____% percentage
interest in the Class to which it belongs]
Dear Sirs:
This letter is delivered to you in connection with the transfer by
_________________ (the "Transferor") to _________________ (the "Transferee") of
the captioned Certificate (the "Certificate"), pursuant to Section 5.02 of the
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"), dated
as of December 1, 1996, among Mortgage Capital Funding, Inc., as Sponsor,
Citicorp Real Estate, Inc., as Mortgage Loan Seller, NationsBanc Mortgage
Capital Corporation, as Additional Warranting Party, GMAC Commercial Mortgage
Corporation, as Master Servicer and as Special Servicer, LaSalle National Bank,
as Trustee and REMIC Administrator and ABN AMRO Bank N.V. as Fiscal Agent. All
terms used herein and not otherwise defined 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. The Transferor is the lawful owner of the Certificate with the full
right to transfer the 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 the
Certificate, any interest in the 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 the Certificate, any interest in
the Certificate or any other similar security from any person in any
manner,
<PAGE>
-2-
(c) otherwise approached or negotiated with respect to the Certificate, any
interest in the Certificate or any other similar security with any person
in any manner, (d) made any general solicitation with respect to the
Certificate, any interest in the 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 the Certificate, any interest in the
Certificate or any other similar security, which (in the case of any of the
acts described in clauses (a) through (e) hereof) would constitute a
distribution under the Securities Act of 1933 (the "Securities Act"), or
would render the disposition of the Certificate a violation of Section 5 of
the Securities Act or any state securities laws, or would require
registration or qualification of the Certificate pursuant to the Securities
Act or any state securities laws.
Very truly yours,
_________________________________
(Transferor)
By:______________________________
Name:____________________________
Title:___________________________
<PAGE>
EXHIBIT B-3
FORM I OF TRANSFEREE CERTIFICATE
PURSUANT TO SECTION 5.02(b)
[FOR QIBs]
_____________, 19__
LaSalle National Bank
Asset Backed Securities Trust Services
135 South LaSalle Street, Suite 1740
Chicago, Illinois 60674-4175
Attention: Corporate Trust Department
Re: Mortgage Capital Funding, Inc., Multifamily/Commercial
Mortgage Pass-Through Certificate, Series 1996-MC2,
Class [F] [G] [H] [R-I] [R-II], having an initial
principal balance as of December __, 1996 (the "Issue
Date") of $__________] [evidencing a ____% percentage
interest in the Class to which it belongs]
Dear Sirs:
This letter is delivered to you in connection with the transfer by
_________________ (the "Transferor") to _________________ (the "Transferee") of
the captioned Certificate (the "Certificate"), pursuant to Section 5.02 of the
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"), dated
as of December 1, 1996, among Mortgage Capital Funding, Inc., as Sponsor,
Citicorp Real Estate, Inc., as Mortgage Loan Seller, NationsBanc Mortgage
Capital Corporation, as Additional Warranting Party, GMAC Commercial Mortgage
Corporation, as Master Servicer and as Special Servicer, LaSalle National Bank,
as Trustee and REMIC Administrator and ABN AMRO Bank N.V. as Fiscal Agent. All
terms used herein and not otherwise defined 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. The Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A ("Rule 144A") under the Securities Act of 1933 (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 Certificate for its own account or for the account of a
qualified institutional buyer, and understands that such Certificate may be
resold, pledged or transferred only (a) to a person reasonably believed to
be a qualified institutional buyer that purchases for its own account or
for the account of a qualified
<PAGE>
-2-
institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (b) pursuant to another
exemption from registration under the Securities Act.
2. The Transferee has been furnished with all information regarding
(a) the Certificate 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
Certificate, that it has requested.
3. If the Transferee proposes that the Certificate be registered in
the name of a nominee, such nominee has completed the Nominee
Acknowledgement below.
Very truly yours,
_________________________________
(Transferee)
By:______________________________
Name:____________________________
Title:___________________________
Nominee Acknowledgment
The undersigned hereby acknowledges and agrees that as to the
Certificate being registered in its name, the sole beneficial owner thereof is
and shall be _____________ _____________________, the Transferee identified
above, for whom the undersigned is acting as nominee.
_________________________________
(Nominee)
By:______________________________
Name:____________________________
Title:___________________________
<PAGE>
ANNEX 1 TO EXHIBIT B-3
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 certificate (the
"Certificate") 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 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 ("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
- ----------
(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.
<PAGE>
-2-
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.
___ Insurance Company. The Transferee is an insurance company whose
primary and predominant business activity is the writing of insurance
or the reinsuring of risks underwritten by insurance companies and
which is subject to supervision by the insurance commissioner or a
similar official or agency of a State, U.S. territory or the District
of Columbia.
___ State or Local Plan. The Transferee is a plan established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees.
___ ERISA Plan. The Transferee is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of
1974.
___ Investment Advisor. The Transferee is an investment advisor registered
under the Investment Advisers Act of 1940.
___ 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.
<PAGE>
-3-
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.
5. The Transferee acknowledges that it is familiar with Rule 144A and
understands that the Transferor and other parties related to the 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 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 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:________________________________
<PAGE>
ANNEX 2 TO EXHIBIT B-3
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 (the
"Certificate") 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 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 ("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, and (ii) as marked below, the Transferee
alone owned and/or invested on a discretionary basis, or the Transferee's Family
of Investment Companies owned, at least $100,000,000 in securities (other than
the excluded securities referred to below) as of the end of the Transferee's
most recent fiscal year. For purposes of determining the amount of securities
owned by the Transferee or the Transferee's Family of Investment Companies, the
cost of such securities was used, unless the Transferee or any member of the
Transferee's Family of Investment Companies, as the case may be, reports its
securities holdings in its financial statements on the basis of their market
value, and no current information with respect to the cost of those securities
has been published, in which case the securities of such entity were valued at
market.
____ The Transferee owned and/or invested on a discretionary basis
$___________________ in securities (other than the excluded
securities referred to below) as of the end of the Transferee's most
recent fiscal year (such amount being calculated in accordance with
Rule 144A).
____ The Transferee is part of a Family of Investment Companies which
owned in the aggregate $______________ in securities (other than the
excluded securities referred to below) as of the end of the
Transferee's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries
<PAGE>
-2-
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.
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 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.
<PAGE>
-3-
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 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:______________________________
<PAGE>
EXHIBIT B-4
FORM II OF TRANSFEREE CERTIFICATE
PURSUANT TO SECTION 5.02(b)
[FOR INSTITUTIONAL ACCREDITED INVESTORS]
_____________, 19__
LaSalle National Bank
Asset Backed Securities Trust Services
135 South LaSalle Street, Suite 1740
Chicago, Illinois 60674-4175
Attention: Corporate Trust Department
Re: Mortgage Capital Funding, Inc., Multifamily/Commercial
Mortgage Pass-Through Certificate, Series 1996-MC2,
Class [F] [G] [H] [R-I] [R-II], having an initial
principal balance as of December __, 1996 (the "Issue
Date") of $__________] [evidencing a ____% percentage
interest in the Class to which it belongs]
Dear Sirs:
This letter is delivered to you in connection with the transfer by
_________________ (the "Transferor") to _________________ (the "Transferee") of
the captioned Certificate (the "Certificate"), pursuant to Section 5.02 of the
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"), dated
as of July 1, 1996, among Mortgage Capital Funding, Inc. as Sponsor, Citicorp
Real Estate, Inc. as Mortgage Loan Seller, NationsBanc Mortgage Capital
Corporation, as Additional Warranting Party, GMAC Commercial Mortgage
Corporation as Master Servicer and as Special Servicer, LaSalle National Bank,
as Trustee and REMIC Administrator and ABN AMRO Bank N.V., as Fiscal Agent. All
terms used herein and not otherwise defined 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. The Transferee is acquiring the 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.
<PAGE>
-2-
2. The Transferee understands that (a) the Certificate has not been
and will not be registered under the Securities Act or registered or qualified
under any applicable state securities laws, (b) neither the Sponsor nor the
Trustee is obligated so to register or qualify the Certificate and (c) neither
the Certificate nor any security issued in exchange therefor or in lieu thereof
may be resold or transferred unless it is (i) registered pursuant to the
Securities Act and registered or qualified pursuant to any applicable state
securities laws or (ii) sold or transferred in a transaction which is exempt
from such registration and qualification and the Certificate Registrar has
received (A) a certificate from the prospective transferor substantially in the
form attached as Exhibit B-1 to the Pooling and Servicing Agreement, or (B) a
certificate from the prospective transferor substantially in the form attached
as Exhibit B-2 to the Pooling and Servicing Agreement and a certificate from the
prospective transferee substantially in the form attached either as Exhibit B-3
or Exhibit B-4 to the Pooling and Servicing Agreement, or (C) an opinion of
counsel satisfactory to the Certificate Registrar that the transfer may be made
without registration under the Securities Act, together with the written
certification(s) as to the facts surrounding the transfer from the prospective
transferor and/or prospective transferee upon which such opinion of counsel is
based.
3. The Transferee understands that it may not sell or otherwise
transfer the Certificate, any security issued in exchange therefor or in lieu
thereof or any interest in the foregoing except in compliance with the
provisions of Section 5.02 of the Pooling and Servicing Agreement, which
provisions it has carefully reviewed, and that the Certificate will bear legends
substantially to the following effect:
THIS CERTIFICATE HAS NOT BEEN 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 5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED
TO HEREIN.
- AND -
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN 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 OR ANY INTEREST HEREIN ON BEHALF OF, AS
NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT, WILL BE REGISTERED EXCEPT IN COMPLIANCE
WITH THE PROCEDURES DESCRIBED HEREIN.
<PAGE>
-3-
4. Neither the Transferee nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred the Certificate,
any interest in the 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 the Certificate or any other
similar security from any person in any manner, (c) otherwise approached or
negotiated with respect to the Certificate, any interest in the 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 the
Certificate under the Securities Act, would render the disposition of the
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 the Certificate, any security issued in exchange therefor or in
lieu thereof or any interest in the foregoing.
5. The Transferee has been furnished with all information regarding
(a) the Sponsor, (b) the Certificates and distributions thereon, (c) the
Mortgage Loans, (d) the Pooling and Servicing Agreement, and (e) all related
matters, that it has requested.
6. The Transferee is an "accredited investor" within the meaning of
paragraph (1), (2), (3) or (7) of Rule 501(a) 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:__________________________
<PAGE>
EXHIBIT B-5
FORM I OF TRANSFEREE CERTIFICATE
PURSUANT TO SECTION 5.02(b)
[FOR QUIBs]
____________, 19__
[TRANSFEROR]
Re: Mortgage Capital Funding, Inc., Multifamily/Commercial
Mortgage Pass-Through Certificate, Series 1996-MC2, Class X,
having an initial Certificate Notional Amount as of December ___,
1996 (the "Closing Date") of $__________
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
_________________ (the "Transferor") to _________________ (the "Transferee")
through our respective Depository Participants of the Transferor's beneficial
ownership interest (currently maintained on the books and records of The
Depository Trust Corporation ("DTC") and the Depository Participants) in the
captioned Certificate ("Certificate"), pursuant to Section 5.02 of the Pooling
and Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of
December 1, 1996, among Mortgage Capital Funding, Inc., as Sponsor, Citicorp
Real Estate, Inc., as Mortgage Loan Seller, NationsBanc Mortgage Capital
Corporation, as Additional Warranting Party, GMAC Commercial Mortgage
Corporation, as Master Servicer and Special Servicer, LaSalle National Bank, as
Trustee and REMIC Administrator, 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 and agrees with you, and
for the benefit of the Sponsor, 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
Transferor's interest in the Certificate is being made in reliance on Rule
144A. The Transferee is acquiring such interest in the Certificate for its
own account or for the account of a Qualified Institutional Buyer.
2. The Transferee understands that (a) the Class of Certificates to
which the Certificate belongs 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 Sponsor, the Trustee or the Certificate
Registrar is obligated so to register or qualify the Class of Certificates
to which the Certificate belongs, and (c) no interest in the Certificate
may
<PAGE>
-2-
be resold or transferred unless (i) such Certificate is registered pursuant
to the Securities Act and registered or qualified pursuant any applicable
state securities laws, (ii) such interest is sold or transferred in a
transaction which is exempt from such registration and qualification and
the Certificate Owner desiring to effect such transfer has received (A) a
certificate from such Certificate Owner's prospective transferee
substantially in the form attached either as Exhibit B-5 or as Exhibit B-6
to the Pooling and Servicing Agreement or (B) an opinion of counsel to the
effect that such transfer may be made without registration under the
Securities Act.
3. The Transferee understands that it may not sell or otherwise
transfer the Certificate or interest therein except in compliance with the
provisions of Section 5.02 of the Pooling and Servicing Agreement, which
provisions it has carefully reviewed, and that the Certificate will bear
the following legends:
THIS CERTIFICATE HAS NOT BEEN 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 5.02 OF THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE 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 OR ANY INTEREST HEREIN ON BEHALF OF, AS
NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT, EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
4. The Transferee has been furnished with all information regarding
(a) the Sponsor, (b) the Certificate and distributions thereon, (c) the
nature, performance and servicing of the Mortgage Loans, (d) the Pooling
and Servicing Agreement, and (e) any credit enhancement mechanism
associated with the Certificate, that it has requested.
Very truly yours,
________________________________
(Transferee)
By:_____________________________
Name:___________________________
Title:__________________________
<PAGE>
-3-
ANNEX 1 TO EXHIBIT B-5
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 Mortgage Capital Funding, Inc. with
respect to the mortgage pass-through certificate being transferred in book-entry
form (the "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 Certificate (the "Transferee").
2. The Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act of 1933, as amended ("Rule 144A")
because (i) the Transferee owned and/or invested on a discretionary basis
$______________________(2) in securities (other than the excluded securities
referred to below) as of the end of the Transferee's most recent fiscal year
(such amount being calculated in accordance with Rule 144A) and (ii) the
Transferee satisfies the criteria in the category marked below.
___ Corporation, etc. The Transferee is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts or
similar business trust, partnership, or any organization described in
Section 501(c)(3) of the Internal Revenue Code of 1986.
___ 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
- ----------
(2) Transferee must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Transferee is a dealer, and, in that case,
Transferee must own and/or invest on a discretionary basis at least $10,000,000
in securities.
<PAGE>
-4-
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
which is subject to supervision by the insurance commissioner or a
similar official or agency of a State, U.S. territory or the District
of Columbia.
___ State or Local Plan. The Transferee is a plan established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees.
___ ERISA Plan. The Transferee is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of
1974.
___ Investment Advisor. The Transferee is an investment advisor registered
under the Investment Advisers Act of 1940, as amended.
___ Other. (Please supply a brief description of the entity and a
cross-reference to the paragraph and subparagraph under subsection
(a)(1) of Rule 144A pursuant to which it qualifies. Note that
registered investment companies should complete Annex 2 rather than
this Annex 1.)_______________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee, (ii) securities
that are part of an unsold allotment to or subscription by the Transferee, if
the Transferee is a dealer, (iii) bank deposit notes and certificates of
deposit, (iv) loan participations, (v) repurchase agreements, (vi) securities
owned but subject to a repurchase agreement and (vii) currency, interest rate
and commodity swaps. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Transferee, the
Transferee did not include any of the securities referred to in this paragraph.
<PAGE>
-5-
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 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 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 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
_____________________________________
(Transferee)
By:__________________________________
Name:________________________________
Title:_______________________________
Date:________________________________
<PAGE>
-6-
ANNEX 2 TO EXHIBIT B-5
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 Mortgage Capital Funding, Inc. with
respect to the mortgage pass-through certificate being transferred in book-entry
form (the "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 Certificate (the "Transferee") or, if the Transferee is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because the Transferee is part
of a Family of Investment Companies (as defined below), is an executive officer
of the investment adviser (the "Adviser").
2. The Transferee is a "qualified institutional buyer" as defined in
Rule 144A because (i) the Transferee is an investment company registered under
the Investment Company Act of 1940, as amended, and (ii) as marked below, the
Transferee alone owned and/or invested on a discretionary basis, or the
Transferee's Family of Investment Companies owned, at least $100,000,000 in
securities (other than the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year. For purposes of determining the
amount of securities owned by the Transferee or the Transferee's Family of
Investment Companies, the cost of such securities was used, unless the
Transferee or any member of the Transferee's Family of Investment Companies, as
the case may be, reports its securities holdings in its financial statements on
the basis of their market value, and no current information with respect to the
cost of those securities has been published, in which case the securities of
such entity were valued at market.
____ The Transferee owned and/or invested on a discretionary basis
$___________________ in securities (other than the excluded
securities referred to below) as of the end of the Transferee's most
recent fiscal year (such amount being calculated in accordance with
Rule 144A).
____ The Transferee is part of a Family of Investment Companies which
owned in the aggregate $______________ in securities (other than the
excluded securities referred to below) as of the end of the
Transferee's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries
<PAGE>
-7-
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.
<PAGE>
-8-
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 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 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:______________________________
<PAGE>
EXHIBIT B-6
FORM II OF TRANSFEREE CERTIFICATE
PURSUANT TO SECTION 5.02(b)
[FOR INSTITUTIONAL ACCREDITED INVESTORS]
____________, 19__
[TRANSFEROR]
Re: Mortgage Capital Funding, Inc., Multifamily/Commercial Mortgage
Pass- Through Certificate, Series 1996-MC2, Class X, having an
initial Certificate Notional Amount as of December ___, 1996 (the
"Closing Date") of $__________
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
_________________ (the "Transferor") to _________________ (the "Transferee")
through our respective Depository Participants of the Transferor's beneficial
ownership interest (currently maintained on the books and records of The
Depository Trust Corporation ("DTC") and the Depository Participants) in the
captioned Certificate ("Certificate"), pursuant to Section 5.02 of the Pooling
and Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of
December 1, 1996, among Mortgage Capital Funding, Inc., as Sponsor, Citicorp
Real Estate, Inc., as Mortgage Loan Seller, NationsBanc Mortgage Capital
Corporation, as Additional Warranting Party, GMAC Commercial Mortgage
Corporation, as Master Servicer and Special Servicer, LaSalle National Bank, as
Trustee and REMIC Administrator, 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 and agrees with you, and
for the benefit of the Sponsor, that:
1. The Transferee is acquiring the Transferor's beneficial ownership
interest in the 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 Class of Certificates to
which the Certificate belongs 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 Sponsor, the Trustee or the Certificate Registrar is
obligated so to register or qualify the Class of Certificates to which the
Certificate belongs, and (c) no interest in the Certificate may be resold or
transferred unless (i) such Certificate is registered pursuant to the Securities
Act and registered or qualified pursuant any applicable state securities laws,
(ii) such interest is sold or transferred in a transaction which is exempt from
such registration and qualification and the Certificate Owner
<PAGE>
-2-
desiring to effect such transfer has received (A) a certificate from such
Certificate Owner's prospective transferee substantially in the form attached
either as Exhibit B-5 or as Exhibit B-6 to the Pooling and Servicing Agreement
or (B) an opinion of counsel to the effect that such transfer may be made
without registration under the Securities Act.
3. The Transferee understands that it may not sell or otherwise
transfer the Certificate or interest therein except in compliance with the
provisions of Section 5.02 of the Pooling and Servicing Agreement, which
provisions it has carefully reviewed, and that the Certificate will bear the
following legends:
THIS CERTIFICATE HAS NOT BEEN 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 5.02 OF THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE 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 OR ANY INTEREST HEREIN ON BEHALF OF, AS
NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT, EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
4. Neither the Transferee nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred the Certificate,
any interest in the 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 the Certificate, any interest in the Certificate or any other
similar security from any person in any manner, (c) otherwise approached or
negotiated with respect to the Certificate, any interest in the Certificate or
any other similar security with any person in any manner, (d) made any general
solicitation with respect to the Certificate, any interest in the 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 the Certificate, any
interest in the 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 Certificate under the Securities Act, would render the
disposition of the Certificate a violation of Section 5 of the Securities Act or
any state securities law or would require registration or qualification of the
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 the Certificate, any interest in the Certificate or any
other similar security.
<PAGE>
-3-
5. The Transferee has been furnished with all information regarding
(a) the Sponsor, (b) the Certificate 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.
6. The Transferee is an "accredited investor" as defined in any of
paragraphs (1), (2), (3) and (7) of Rule 501(a) under the Securities Act or an
entity in which all of the equity owners 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
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:_____________________________
<PAGE>
-4-
EXHIBIT C-1
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
PURSUANT TO SECTION 5.02(d)(i)(B)
STATE OF )
) participation.:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says that:
1. He is the [Title of Officer] of [Name of Prospective Transferee]
(the prospective transferee (the "Transferee") of a Mortgage Capital Funding,
Inc., Class R-[I] [II] Multifamily/Commercial Mortgage Pass-Through Certificate,
Series 1996-MC2, evidencing a ____% Percentage Interest in the Class to which it
belongs (the "Residual Certificate")), a ________________________ duly organized
and validly existing under the laws of [the State of ] [the United States], on
behalf of which he makes this affidavit. Capitalized terms used but not defined
herein have the respective meanings assigned thereto in the Pooling and
Servicing Agreement pursuant to which the Residual Certificate was issued (the
"Pooling and Servicing Agreement").
2. The Transferee (i) is [and, as of [date of transfer], will be] a
"Permitted Transferee" and will endeavor to remain a "Permitted Transferee" for
so long as it holds the Residual Certificate, and (ii) is acquiring the Residual
Certificate 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 Certificate to "disqualified organizations" under the
Internal Revenue Code of 1986, as amended, that applies to all transfers of the
Residual Certificate after March 31, 1988; (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,
<PAGE>
-5-
at the time of transfer, such person does not have actual knowledge that the
affidavit is false; and (iv) that the Residual Certificate 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 Certificate if at any time during the taxable year
of the pass-through entity a non-Permitted Transferee is the record holder of an
interest in such entity. (For this purpose, a "pass- through entity" includes a
regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives.)
5. The Transferee is aware that the Certificate Registrar will not
register any transfer of the Residual Certificate 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 5.02(d) of
the Pooling and Servicing Agreement, a description of which provisions is set
forth in the Residual Certificate (in particular, clause (ii)(A) of Section
5.02(d) which authorizes the Trustee to deliver payments on the Residual
Certificate to a person other than the Transferee and clause (ii)(B) of Section
5.02(d) which authorizes the Trustee to negotiate a mandatory sale of the
Residual Certificate, in either case, in the event that the Transferee holds
such Residual Certificate in violation of Section 5.02(d)); and the Transferee
expressly agrees to the bound by and to comply with such provisions.
9. No purpose of the Transferee relating to its purchase or any sale
of the Residual Certificate 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 Certificate as they become due, fully understanding that it may
incur tax liabilities in excess of any cash flows generated by the Residual
Certificate.
<PAGE>
-6-
11. The Transferee will, in connection with any transfer that it makes
of the Residual Certificate, deliver to the Certificate Registrar a
representation letter substantially in the form of Exhibit C-2 to the Agreement
in which it will represent and warrant, among other things, that it is not
transferring the Residual Certificate to impede the assessment or collection of
any tax and that it has at the time of such transfer conducted a reasonable
investigation of the financial condition of the proposed transferee as
contemplated by Treasury regulation section 1.860E-1(c)(4)(i) and has satisfied
the requirements of such provision.
12. The Transferee is a citizen or resident of the United States, a
corporation, a partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States is 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.
<PAGE>
-7-
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 [Title of Officer] and its corporate seal to be hereunto attached, attested
by its [Assistant] Secretary, this ___ day of __________, 199__.
[NAME OF TRANSFEREE]
By:_____________________________
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
______________________________
[Assistant] Secretary
Personally appeared before me the above-named [Name of Officer], known
or proved to me to be the same person who executed the foregoing instrument and
to be the [Title of Officer] of the Transferee, and acknowledged to me that he
executed the same as his 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__.
<PAGE>
EXHIBIT C-2
FORM OF TRANSFEROR CERTIFICATE
PURSUANT TO SECTION 5.02(d)(i)(D)
__________________, 19___
LaSalle National Bank
Asset Backed Securities Trust Services
135 South LaSalle Street, Suite 1740
Chicago, Illinois 60674-4175
Attention: Corporate Trust Department
Re: Mortgage Capital Funding, Inc., Multifamily/Commercial Mortgage
Pass-Through Certificate, Series 1996-MC2, Class R-[I] [II],
evidencing a __% percentage interest in the Class to which it
belongs
Dear Sirs:
This letter is delivered to you in connection with the transfer by
______________ (the "Transferor") to _______________ (the "Transferee") of the
captioned Class R-[I] [II] Certificate (the "Residual Certificate"), pursuant to
Section 5.02 of the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of December 1, 1996, among Mortgage Capital Funding, Inc.,
as Sponsor, Citicorp Real Estate, Inc., as Mortgage Loan Seller, NationsBanc
Mortgage Capital Corporation, as Additional Warranting Party, GMAC Commercial
Mortgage Corporation, as Master Servicer and as Special Servicer, LaSalle
National Bank, as Trustee and REMIC Administrator and ABN AMRO Bank N.V., as
Fiscal Agent. All terms used herein and not otherwise defined shall have the
respective meanings set forth in the Pooling and Servicing Agreement. The
Transferor hereby represents and warrants to you, as Certificate Registrar,
that:
1. No purpose of the Transferor relating to the transfer of the
Residual Certificate 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
<PAGE>
-2-
as Exhibit C-1. 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 Certificate may not be respected for United States income tax
purposes (and the Transferor may continue to be liable for United States income
taxes associated therewith) unless the Transferor has conducted such an
investigation.
Very truly yours,
___________________________________
(Transferor)
By:________________________________
Name:______________________________
Title:_____________________________
<PAGE>
EXHIBIT D
REQUEST FOR RELEASE
____________________, 19___
LaSalle National Bank
Asset Backed Securities Trust Services
135 South LaSalle Street, Suite 1740
Chicago, Illinois 60674-4175
Attention: Corporate Trust Department
In connection with the administration of the Mortgage Files held by or
on behalf of you as Trustee under a certain Pooling and Servicing Agreement
dated as of December 1, 1996 (the "Pooling and Servicing Agreement"), by and
among Mortgage Capital Funding, Inc., as Sponsor, Citicorp Real Estate, Inc., as
Mortgage Loan Seller, NationsBanc Mortgage Capital Corporation, as Additional
Warranting Party, GMAC Commercial Mortgage Corporation, as Master Servicer and
as Special Servicer, and you, as Trustee and REMIC Administrator and ABN AMRO
Bank N.V., as Fiscal Agent the undersigned hereby requests a release of the
Mortgage File (or the portion thereof specified below) held by or on behalf of
you as Trustee with respect to the following described Mortgage Loan for the
reason indicated below.
Mortgagor's Name:
Address:
Loan No.:
If only particular documents in the Mortgage File are requested, please specify
which:
Reason for requesting file (or portion thereof):
______ 1. Mortgage Loan paid in full.
The undersigned hereby certifies that all amounts received in
connection with the Mortgage Loan that are required to be
credited to the Certificate Account pursuant to the Pooling
and Servicing Agreement, have been or will be so credited.
______ 2. The Mortgage Loan is being foreclosed.
______ 3. Other. (Describe)
<PAGE>
-2-
The undersigned acknowledges that the above Mortgage File (or
requested portion thereof) will be held by the undersigned in accordance with
the provisions of the Pooling and Servicing Agreement and will be returned to
you or your designee within ten (10) days of our receipt thereof, unless the
Mortgage Loan has been paid in full, in which case the Mortgage File (or such
portion thereof) will be retained by us permanently, or unless the Mortgage Loan
is being foreclosed, in which case the Mortgage File (or such portion thereof)
will be returned when no longer required by us for such purpose.
Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Pooling and Servicing Agreement.
[GMAC COMMERCIAL MORTGAGE
CORPORATION]
By:______________________________
Name:
Title:
<PAGE>
EXHIBIT E
FORM OF REO STATUS REPORT
Mortgage Capital Funding, Inc.
Multifamily/Commercial Mortgage Pass-Through Certificates
Series 1996-MC2
Payment Date:
<TABLE>
<CAPTION>
====================================================================================================================================
Delinquency and Specially Serviced Statistics:
- -----------------------------------------------------------------------------------------------------------------------------------
One Month Two Months Three + Months Specialty Serviced Foreclosures
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Number in Loan Grp 1 0 0 0 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
Unpaid Principal Balance 0.00 0.00 0.00 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------------------------
Number in Loan Grp 2 0 0 0 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
Unpaid Principal Balance 0.00 0.00 0.00 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------------------------
Number in Mortgage Pool 0 0 0 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
Unpaid Principal Balance 0.00 0.00 0.00 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------------------------
Properties which became REO Properties
during the related Collection Period
- -----------------------------------------------------------------------------------------------------------------------------------
Stated Principal Balance 0.00 0.00 0.00 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------------------------
Unpaid Principal Balance 0.00 0.00 0.00 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------------------------
Mortgage Loans repurchased, liquidated or disposed of during the related Collecton Period
- -----------------------------------------------------------------------------------------------------------------------------------
Loan Number 0 0 0 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
Liquidated Proceeds 0.00 0.00 0.00 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------------------------
Portion in Avail Dis Amnt 0.00 0.00 0.00 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------------------------
REO Properties included in the Trust Fund as of the last day of the Collection Period
- -----------------------------------------------------------------------------------------------------------------------------------
Loan Number 0 0 0 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
Book Value 0.00 0.00 0.00 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------------------------
Income Collected 0.00 0.00 0.00 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------------------------
Portion in Avail Dis Amnt 0.00 0.00 0.00 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------------------------
REO Properties sold or disposed of during the related Collection Period
- -----------------------------------------------------------------------------------------------------------------------------------
Loan Number 0 0 0 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
Liquidation Proceeds 0.00 0.00 0.00 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------------------------
Portion in Avail Dis Amnt 0.00 0.00 0.00 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------------------------
Final Recovery Determination 0.00 0.00 0.00 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------------------------
Principal Prepayments, Prepayment Interest Excesses, and Prepayment Interest Shortfalls
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Loan Group 1 Loan Group 2
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Principal Prepayments 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Loan Group 1 Loan Group 2
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Prepay Interest Excesses 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------------------------
Prepay Interest Shortfalls 0.00 0.00
====================================================================================================================================
</TABLE>
<PAGE>
SCHEDULE I
MORTGAGE LOAN SCHEDULE
<TABLE>
<CAPTION>
Loan Zip Mortgage Original Cut-Off Date
Number Property Address City State Code Rate Balance Balance
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
650927-1 11685 Sunset Hills Road Reston VA 22090 8.930% $19,500,000 $19,422,636
655165-6 1502-1910 Sweetwater Road National City CA 91950 9.150% $15,669,000 $15,648,735
643088-7 6600 Stage Road Bartlett TN 38134 8.800% $9,730,000 $9,713,257
655143-6 33523 Eight Mile Road Livonia MI 48152 9.490% $9,097,409 $9,083,850
650708-2 610 Montgomery Highway Vestavia Hills AL 35216 9.490% $8,880,000 $8,852,786
650890-0 Snowmass Village Pitkin County CO 81615 9.510% $7,200,000 $7,185,506
655144-9 37100-37164 Six Mile Road Livonia MI 48152 10.100% $3,276,328 $3,272,036
650443-8 9852 Chapman Avenue Garden Grove CA 92641 9.210% $2,833,500 $2,796,196
650645-2 10800-10820 Rhode Island Avenue Beltsville MD 20705 9.960% $2,200,000 $2,191,513
655166-9 586 Connecticut Avenue Norwalk CT 06854 8.320% $1,900,000 $1,889,891
650942-0 9666-9710 Mentor Avenue Mentor OH 44060 8.170% $1,275,000 $1,240,869
655131-3 NEC East 4th Street & Eastern Avenue Moore OK 73160 9.170% $1,225,000 $1,225,000
650846-3 10444-10466 Dumfries Road Manassas VA 22110 9.960% $1,100,000 $1,095,757
650940-4 1585-1603 Capital Avenue NE Battle Creek MI 49014 8.860% $1,100,000 $1,094,933
650919-0 3200 Arville Street Las Vegas NV 89102 8.190% $7,200,000 $7,185,961
655148-1 1337-1359 Fox Run Drive Willoughby OH 44094 8.375% $6,525,000 $6,369,980
655174-0 2100 Walnut Street Philadelphia PA 19146 9.020% $4,800,000 $4,782,738
650572-5 575 East Torrey Street New Braunfels TX 78130 8.900% $4,487,500 $4,471,039
650903-5 400 East Broad Street Newnan GA 30263 8.550% $4,250,000 $4,247,452
655151-7 1151 Meadow Lane Waterloo IA 50701 8.740% $3,275,000 $3,269,294
655147-8 33-26 Cooper Place New Haven CT 06050 10.000% $3,180,000 $3,141,078
655178-2 201 S. 13th Street Philadelphia PA 19146 9.170% $3,150,000 $3,138,950
655172-2 380 Daleville Road Willington CT 06279 9.000% $3,000,000 $2,994,628
644110-6 3475 Steve Road Memphis TN 38111 8.820% $2,947,000 $2,938,521
655149-4 8176 South 1300 East Sandy UT 84094 9.000% $2,775,000 $2,695,148
650872-2 564 Cypress Lane Greenville MS 38701 8.990% $2,450,000 $2,445,947
655173-7 2031 South Street Philadelphia PA 19146 9.120% $2,165,000 $2,157,342
650886-1 10621 Monaco Drive Jacksonville FL 32218 9.010% $1,930,000 $1,927,888
655150-4 455 West State Street Trenton NJ 08650 10.000% $1,923,000 $1,902,552
655175-3 429 S. Baltimore St. Dillsburg (Harrisburg)PA 17019 9.220% $1,875,000 $1,871,763
650886-7 2625 Belvedere Drive Jackson MS 39212 8.990% $1,867,000 $1,861,958
650905-1 1466 Birch Bend Road Memphis TN 38116 9.060% $1,850,000 $1,846,983
655177-9 Duck Creek Road Clayton (Dover) DE 19938 9.070% $1,830,000 $1,821,810
650875-1 3373 Regal Plaza Drive Memphis TN 38116 8.680% $1,650,000 $1,645,114
655158-8 541-7 West 180th Street New York NY 10033 8.510% $1,600,000 $1,598,452
650772-3 3491 Graceland Drive Memphis TN 38116 9.300% $1,600,000 $1,593,107
655159-1 1111 Musken Road Abilene TX 79604 8.970% $1,500,000 $1,498,655
655176-6 1216-18 Walnut Street Philadelphia PA 19146 9.170% $1,500,000 $1,494,738
655089-3 1433 Covington Road Piqua (iii) OH 45356 9.530% $720,000 $717,015
655089-3 311 Jefferson Avenue Urbana (iii) OH 43078 9.530% $780,000 $776,766
650773-6 4187 Rainbranch Drive Memphis TN 38116 8.990% $1,379,500 $1,375,668
655179-5 3920 Broadway New York NY 10032 8.500% $1,200,000 $1,198,837
650868-3 1224 29th Street Gulfport MS 39501 9.100% $1,200,000 $1,197,403
655130-0 1117 South Street Wilmington OH 45177 9.140% $1,200,000 $1,195,769
655137-1 6090 Terry Road Jacksonville FL 32216 9.470% $1,190,000 $1,186,029
655138-4 2015 N. McCord Road Lucas County OH 43615 9.470% $1,140,000 $1,136,196
655134-2 145 Newell Street Painesville Twnshp OH 44077 9.420% $1,120,000 $1,116,231
650547-9 7225 Crane Avenue Jacksonville FL 32216 9.140% $850,000 $849,095
655142-3 8800-8888 Kempwood Drive Houston TX 77080 8.800% $775,000 $773,666
655086-4 1500 Monument Road Jacksonville FL 32225 9.520% $735,000 $731,947
655168-5 80 Cottontail Lane Somerset NJ 08873 9.290% $4,300,000 $4,296,346
650996-7 15,19,23 & 27 Midstate Drive Auburn MA 01501 9.510% $3,640,000 $3,634,015
655125-8 5401 Kingston Pike Knoxville TN 37919 9.070% $2,500,000 $2,500,000
655104-1 3085 Reid Road Grand Blanc MI 48439 10.250% $6,600,000 $6,366,623
655105-4 23801 Industrial Park Farmington Hills MI 48024 9.900% $5,964,666 $5,778,934
650907-7 994 Riverview Drive Totowa NJ 07512 9.230% $4,200,000 $4,185,412
<CAPTION>
Remaining
Term to Stated Stated Primary
Loan Maturity Maturity Monthly Admin. Servicing Estate Loan
Number (Months) Date Due Date Payment Fee Rate Fee Rate Interest Seller
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
650927-1 113 5/1/06 1st $155,920.25 0.217% 0.080% Fee Simple CREI
655165-6 118 10/1/06 1st $129,570.12 0.262% 0.125% Fee Simple CREI
643088-7 117 9/1/06 1st $76,893.68 0.217% 0.080% Fee Simple CREI
655143-6 117 9/1/06 1st $76,429.58 0.262% 0.125% Fee Simple CREI
650708-2 115 7/1/06 1st $75,583.46 0.262% 0.125% Fee Simple CREI
650890-0 117 9/1/06 1st $61,853.13 0.262% 0.125% Fee Simple CREI
655144-9 117 9/1/06 1st $28,994.50 0.262% 0.125% Fee Simple CREI
650443-8 175 7/1/11 1st $29,094.29 0.262% 0.125% Fee Simple CREI
650645-2 115 7/31/06 1st $19,929.42 0.262% 0.125% Fee Simple CREI
655166-9 178 10/1/11 1st $18,210.53 0.262% 0.125% Fee Simple CREI
650942-0 81 9/1/03 1st $19,980.58 0.262% 0.125% Fee Simple CREI
655131-3 120 12/1/06 1st $10,423.14 0.262% 0.125% Fee Simple CREI
650846-3 115 7/31/06 1st $9,964.71 0.262% 0.125% Fee Simple CREI
650940-4 117 9/1/06 1st $9,798.16 0.262% 0.125% Fee Simple CREI
650919-0 117 9/1/06 1st $53,787.80 0.262% 0.125% Fee Simple CREI
655148-1 86 2/1/04 1st $49,594.71 0.262% 0.125% Fee Simple CREI
655174-0 116 8/1/06 1st $40,347.19 0.262% 0.125% Fee Simple CREI
650572-5 116 8/1/06 1st $37,352.12 0.262% 0.125% Fee Simple CREI
650903-5 119 11/1/06 1st $32,829.54 0.262% 0.125% Fee Simple CREI
655151-7 117 9/1/06 1st $25,741.05 0.262% 0.125% Fee Simple CREI
655147-8 59 11/1/01 1st $27,906.77 0.262% 0.125% Fee Simple CREI
655178-2 116 8/1/06 1st $26,802.35 0.262% 0.125% Fee Simple CREI
655172-2 118 10/1/06 1st $25,175.89 0.262% 0.125% Fee Simple CREI
644110-6 115 7/1/06 1st $23,331.55 0.262% 0.125% Fee Simple CREI
655149-4 91 7/1/04 1st $23,287.70 0.262% 0.125% Fee Simple CREI
650872-2 117 9/1/06 1st $19,695.63 0.262% 0.125% Fee Simple CREI
655173-7 116 8/1/06 1st $18,346.84 0.262% 0.125% Fee Simple CREI
650886-1 118 10/1/06 1st $15,543.11 0.262% 0.125% Fee Simple CREI
655150-4 62 2/1/02 1st $16,875.70 0.262% 0.125% Fee Simple CREI
655175-3 118 10/1/06 1st $16,018.36 0.262% 0.125% Fee Simple CREI
650886-7 117 9/1/06 1st $15,655.01 0.262% 0.125% Fee Simple CREI
650905-1 117 9/1/06 1st $14,965.46 0.262% 0.125% Fee Simple CREI
655177-9 115 7/1/06 1st $15,445.11 0.262% 0.125% Fee Simple CREI
650875-1 115 7/1/06 1st $12,898.16 0.262% 0.125% Fee Simple CREI
655158-8 119 11/1/06 1st $12,894.42 0.262% 0.125% Fee Simple CREI
650772-3 115 7/1/06 1st $13,757.36 0.262% 0.125% Fee Simple CREI
655159-1 119 11/1/06 1st $12,557.14 0.262% 0.125% Fee Simple CREI
655176-6 116 8/1/06 1st $12,763.02 0.287% 0.150% Fee Simple CREI
655089-3 115 7/1/06 1st $6,305.64 0.262% 0.125% Fee Simple CREI
655089-3 115 7/1/06 1st $6,831.11 0.262% 0.125% Fee Simple CREI
650773-6 115 7/1/06 1st $11,089.84 0.262% 0.125% Fee Simple CREI
655179-5 119 11/1/06 1st $9,662.73 0.262% 0.125% Fee Simple CREI
650868-3 116 8/1/06 1st $9,741.94 0.262% 0.125% Fee Simple CREI
655130-0 116 8/1/06 1st $10,185.65 0.262% 0.125% Fee Simple CREI
655137-1 116 8/1/06 1st $10,372.18 0.262% 0.125% Fee Simple CREI
655138-4 116 8/1/06 1st $9,936.38 0.262% 0.125% Fee Simple CREI
655134-2 116 8/1/06 1st $9,723.19 0.262% 0.125% Fee Simple CREI
650547-9 118 10/1/06 1st $6,925.09 0.262% 0.125% Fee Simple CREI
655142-3 117 9/1/06 1st $6,124.62 0.262% 0.125% Fee Simple CREI
655086-4 115 7/1/06 1st $6,431.89 0.262% 0.125% Fee Simple CREI
655168-5 119 11/1/06 1st $36,943.18 0.262% 0.125% Fee Simple CREI
650996-7 118 10/1/06 1st $31,827.87 0.262% 0.125% Fee Simple CREI
655125-8 120 12/1/06 1st $21,099.88 0.262% 0.125% Fee Simple CREI
655104-1 59 11/1/01 1st $64,788.46 0.262% 0.125% Fee Simple CREI
655105-4 40 4/1/00 1st $54,303.93 0.262% 0.125% Fee Simple CREI
650907-7 116 8/1/06 1st $35,910.09 0.262% 0.125% Fee Simple CREI
</TABLE>
Page 1 of 3
<PAGE>
<TABLE>
<CAPTION>
Loan Zip Mortgage Original Cut-Off Date
Number Property Address City State Code Rate Balance Balance
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
655171-1 3701 Dillon Street Baltimore MD 21224 9.040% $1,450,000 $1,448,715
300003 10440 Portsmouth Road Manassas VA 22110 9.190% $8,419,800 $8,413,092
300009 11711 Parklawn Dr. & 5040 Boiling Rockville MD 20852 9.310% $7,650,000 $7,637,568
Brook Parkway
300022 SWC Mallory Lane and Moores Lane Brentwood TN 37027 9.060% $7,000,000 $6,990,360
300002 MD. Rt. 194 & Glade Blvd. Walkersville MD 21793 9.060% $5,527,400 $5,510,475
962135 GA Highway 9 at Hutchinson Road Cumming GA 30128 8.370% $5,550,000 $5,476,240
100131 11820 Northeast Fourth Plain Road Orchards WA 98682 9.170% $4,400,000 $4,380,094
962151 9801-9965 Pines Blvd. Pembroke Pines FL 33026 8.640% $4,365,000 $4,344,036
300023 436 Broadway Methuen MA 01844 9.510% $3,750,000 $3,744,832
100143 SWC SR 434 & Montgomery Road Altamonte Springs FL 32714 8.930% $3,500,000 $3,494,534
100136 Hwy. 70A and Hwy. 301 Selma NC 27577 9.150% $3,028,850 $3,021,660
951114 East 96th Street & Lantern Road Fishers IN 46038 8.750% $3,000,000 $2,977,108
962128 1721 University Drive Pembroke Pines FL 33024 9.170% $2,780,000 $2,742,200
100125 425 Sigman Road Conyers GA 30207 8.920% $2,752,258 $2,739,134
962156 3024 Peachtree Road Atlanta GA 30305 9.150% $2,700,000 $2,688,701
962153 6700 North University Drive Tamarac FL 33321 8.640% $2,610,000 $2,597,465
951122 US Highway 64 East Plymouth NC 27962 8.670% $2,600,000 $2,577,306
300013 3580-3590 Hwy 17-92 Lake Mary FL 60261 9.240% $2,550,000 $2,544,053
100122 4001 Government Blvd. Mobile AL 36693 9.280% $2,453,000 $2,442,160
300012 912-980 Bragg Road Fredericksburg VA 22407 9.350% $2,429,000 $2,420,553
962152 1230-1324 Military Trail Palm Beach FL 33409 8.640% $2,425,000 $2,413,353
300019 445 State Road 13 Jacksonville FL 32259 8.960% $2,200,000 $2,174,417
300004 13200 SW 8th Street Miami FL 33184 9.630% $2,104,000 $2,098,307
300025 Hwy 421 at Golden Road Wilmington NC 28412 8.940% $1,950,000 $1,948,246
100138 SE Quad. of I-85 & SR 56 Creedmoor NC 27522 8.720% $1,950,000 $1,943,590
100066 1716 17th Street Sarasota FL 34231 8.500% $1,950,000 $1,939,865
100090 2610-2788 SW 137th Ave. at Coral Way Miami FL 33175 9.730% $1,819,400 $1,805,929
300026 150 Andrews Road Fayetteville NC 28311 8.720% $1,800,000 $1,798,347
962136 11411 North Dale Mabry Highway Tampa FL 33618 8.670% $1,800,000 $1,786,085
962129 4800 Biscayne Blvd. Miami FL 33137 8.660% $1,768,000 $1,754,310
100089 2400-2486 SW 137th Ave. at Coral Way Miami FL 33175 9.730% $1,762,400 $1,749,351
100146 US Hwy 17 & Maplehurst Road Jacksonville NC 28540 9.400% $1,739,052 $1,733,073
100121 Hwy. 105 & Hwy. 184 Town of Seven Devils NC 28604 9.110% $1,715,200 $1,707,341
100142 2485 Monument Road Jacksonville FL 32225 8.960% $1,700,000 $1,680,231
300018 Hwy. 49 at Dedeaux Road Gulfport MS 38503 9.190% $1,635,000 $1,631,149
300021 4121 Hillsboro Road Nashville TN 37215 9.670% $1,279,600 $1,277,898
100145 U.S. 13/17 Williamston NC 27892 9.150% $1,175,000 $1,170,724
951126 4319 Ft. Jackson Blvd. Columbia SC 29205 8.290% $1,140,000 $1,124,700
962144 1401 Tahoka Road Brownfield (ii) TX 79316 8.010% $1,150,000 $1,119,894
962150 2100, 2300 & 2500 Winchester Place Spartanburg SC 29301 9.760% $935,000 $927,998
100213 4320 Koval Lane Las Vegas NV 89109 8.700% $22,700,000 22,679,038
100214 2500 East Karen Street Las Vegas NV 89121 8.805% $9,002,000 $8,993,939
100192 3320-3360 Topaz Lane & 3321 Quartz Lane Fullerton CA 92631 8.990% $6,741,000 $6,729,491
100178 3942 Holly Road Corpus Christi TX 78415 9.110% $6,488,000 $6,453,255
100209 1500 Champion Pines Lane Augusta GA 30909 8.470% $6,050,000 $6,050,000
100229 6031 Pineland Drive Dallas TX 75231 8.620% $5,020,000 $5,017,033
100196 2301 Godby Road College Park GA 30349 8.930% $4,700,000 $4,691,829
100118 4141 Jackson Street EXT Alexandria LA 71303 8.050% $4,638,000 $4,606,248
100187 840 17th Street San Diego CA 92101 8.665% $4,560,000 $4,546,455
100185 6700 Northwest 16th Street Oklahoma City OK 73127 9.160% $4,200,000 $4,177,693
100197 9971 Jefferson Highway Baton Rouge LA 70809 8.510% $4,000,000 $3,993,645
100195 2012 West Second St. Long Beach MS 39560 9.040% $3,200,000 $3,192,988
100210 74 Woodbine Street Kernersville NC 27284 8.500% $2,650,000 $2,650,000
100204 2255 Grand Concourse Bronx NY 10453 8.660% $2,375,000 $2,373,608
100170 913 Honeysuckle Rd. Dothan AL 36301 8.240% $2,350,000 $2,337,695
100183 1601 North MacArthur Blvd. Oklahoma City OK 73127 9.160% $2,000,000 $1,989,377
<CAPTION>
Remaining
Term to Stated Stated Primary
Loan Maturity Maturity Monthly Admin. Servicing Estate Loan
Number (Months) Date Due Date Payment Fee Rate Fee Rate Interest Seller
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
655171-1 119 11/1/06 1st $12,208.09 0.287% 0.150% Fee Simple CREI
300003 118 10/1/06 1st $68,901.84 0.262% 0.125% Fee Simple NMCC
300009 118 10/1/06 1st $66,536.04 0.262% 0.125% Fee Simple NMCC
300022 117 9/1/06 1st $56,626.05 0.262% 0.125% Fee Simple NMCC
300002 80 8/1/03 1st $46,613.06 0.262% 0.125% Fee Simple NMCC
962135 112 4/1/06 1st $47,708.52 0.257% 0.120% Fee Simple NMCC
100131 114 6/1/06 1st $37,438.20 0.262% 0.125% Fee Simple NMCC
962151 115 7/1/06 1st $35,560.93 0.262% 0.125% Fee Simple NMCC
300023 118 10/1/06 1st $32,789.70 0.262% 0.125% Leasehold NMCC
100143 118 10/1/06 1st $29,204.28 0.262% 0.125% Fee Simple NMCC
100136 117 9/1/06 1st $25,729.84 0.262% 0.125% Fee Simple NMCC
951114 112 4/1/06 1st $24,664.31 0.257% 0.120% Fee Simple NMCC
962128 111 3/1/06 1st $25,317.13 0.257% 0.120% Fee Simple NMCC
100125 114 6/1/06 1st $22,946.26 0.262% 0.125% Fee Simple NMCC
962156 117 9/1/06 1st $24,553.68 0.307% 0.170% Fee Simple NMCC
962153 115 7/1/06 1st $21,263.24 0.262% 0.125% Fee Simple NMCC
951122 111 3/1/06 1st $21,234.60 0.257% 0.120% Fee Simple NMCC
300013 117 9/1/06 1st $21,820.14 0.262% 0.125% Fee Simple NMCC
100122 114 6/1/06 1st $21,057.85 0.262% 0.125% Fee Simple NMCC
300012 79 7/1/03 1st $20,969.37 0.262% 0.125% Fee Simple NMCC
962152 115 7/1/06 1st $19,756.07 0.262% 0.125% Fee Simple NMCC
300019 116 8/1/06 1st $23,025.22 0.262% 0.125% Fee Simple NMCC
300004 116 8/1/06 1st $18,573.07 0.262% 0.125% Fee Simple NMCC
300025 118 10/1/06 1st $15,644.35 0.262% 0.125% Fee Simple NMCC
100138 116 8/1/06 1st $15,992.07 0.262% 0.125% Fee Simple NMCC
100066 114 6/1/06 1st $15,701.93 0.262% 0.125% Fee Simple NMCC
100090 142 10/1/08 1st $21,460.42 0.262% 0.125% Fee Simple NMCC
300026 118 10/1/06 1st $14,122.06 0.262% 0.125% Fee Simple NMCC
962136 112 4/1/06 1st $14,700.88 0.257% 0.120% Fee Simple NMCC
962129 112 4/1/06 1st $14,427.55 0.257% 0.120% Fee Simple NMCC
100089 142 10/1/08 1st $20,788.09 0.262% 0.125% Fee Simple NMCC
100146 115 7/1/06 1st $15,073.33 0.262% 0.125% Fee Simple NMCC
100121 114 6/1/06 1st $14,523.32 0.262% 0.125% Fee Simple NMCC
100142 116 8/1/06 1st $17,792.21 0.262% 0.125% Fee Simple NMCC
300018 117 9/1/06 1st $13,934.21 0.287% 0.150% Fee Simple NMCC
300021 118 10/1/06 1st $11,331.41 0.262% 0.125% Fee Simple NMCC
100145 115 7/1/06 1st $9,981.53 0.262% 0.125% Fee Simple NMCC
951126 112 4/1/06 1st $9,742.19 0.257% 0.120% Fee Simple NMCC
962144 111 3/1/06 1st $10,933.02 0.257% 0.120% Fee Simple NMCC
962150 78 6/1/03 1st $8,874.78 0.387% 0.250% Fee Simple NMCC
100213 82 10/1/03 1st $177,770.97 0.262% 0.125% Fee Simple NMCC
100214 82 10/1/03 1st $71,172.68 0.262% 0.125% Fee Simple NMCC
100192 116 8/1/06 1st $54,191.00 0.287% 0.150% Fee Simple NMCC
100178 114 6/1/06 1st $54,936.61 0.287% 0.150% Fee Simple NMCC
100209 120 12/1/06 1st $46,390.76 0.287% 0.150% Fee Simple NMCC
100229 83 11/1/03 1st $39,027.19 0.287% 0.150% Fee Simple NMCC
100196 116 8/1/06 1st $37,580.78 0.287% 0.150% Fee Simple NMCC
100118 110 2/1/06 1st $34,193.80 0.337% 0.200% Fee Simple NMCC
100187 79 7/1/03 1st $35,597.07 0.262% 0.125% Leasehold NMCC
100185 114 6/1/06 1st $35,707.56 0.337% 0.200% Fee Simple NMCC
100197 117 9/1/06 1st $30,784.89 0.337% 0.200% Fee Simple NMCC
100195 116 8/1/06 1st $25,840.08 0.337% 0.200% Fee Simple NMCC
100210 120 12/1/06 1st $20,376.21 0.287% 0.150% Fee Simple NMCC
100204 83 11/1/03 1st $18,531.68 0.337% 0.200% Fee Simple NMCC
100170 76 4/1/03 1st $17,638.25 0.337% 0.200% Fee Simple NMCC
100183 114 6/1/06 1st $17,003.60 0.337% 0.200% Fee Simple NMCC
</TABLE>
Page 2 of 3
<PAGE>
<TABLE>
<CAPTION>
Loan Zip Mortgage Original Cut-Off Date
Number Property Address City State Code Rate Balance Balance
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
216807 308 S. Clark Road Cedar Hill TX 75104 9.530% $1,900,000 $1,866,531
100200 2617, 2647, 2667 W. Evans Ave. Denver CO 80219 8.820% $1,700,000 $1,698,438
100211 8725 Calmont Avenue Ft. Worth TX 75041 8.710% $1,560,000 $1,559,095
100212 76, 80 & 90 Park Street Lynn MA 01905 9.230% $1,522,000 $1,519,377
100215 103 Yorkleigh Ave. Jamestown NC 27282 8.780% $1,400,000 $1,399,200
100184 6014 Northwest 23rd Street Oklahoma City OK 73101 9.160% $1,300,000 $1,293,095
100117 4040 Parliament Dr. Alexandria LA 71303 8.050% $1,007,000 $1,000,106
100186 West 161st Street & Ft. Washington Ave. New York NY 10032 9.250% $794,000 $793,379
300001 4520 Arville Street Las Vegas NV 89103 8.520% $3,300,000 $3,273,861
951221 1053 East Whitaker Mill Road Raleigh NC 27604 8.505% $2,250,000 $2,192,440
300005 212 W. Woodlawn Road Charlotte NC 28210 9.690% $10,450,000 $10,397,716
300006 440 Griffith Road Charlotte NC 28210 9.690% $5,200,000 $5,173,983
300017 51 Gulf Breeze Pkwy Gulf Breeze FL 32561 9.920% $5,100,000 $5,080,888
300011 3030 High Point Road Greensboro NC 27403 9.650% $3,350,000 $3,336,945
400005 2055 Rex Road Lake City GA 30260 9.990% $6,000,000 $5,982,074
962355 2401 Cass Road Toledo OH 43614 8.940% $5,600,000 $5,566,003
951325 405 Folse Drive Harahan LA 70123 8.990% $5,500,000 $5,456,914
962354 2040 McCrea Street Alliance OH 44601 9.400% $3,500,000 $3,484,929
400004 550 Flank Road Petersburg VA 23805 9.199% $1,900,000 $1,893,162
<CAPTION>
Remaining
Term to Stated Stated Primary
Loan Maturity Maturity Monthly Admin. Servicing Estate Loan
Number (Months) Date Due Date Payment Fee Rate Fee Rate Interest Seller
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
216807 64 4/1/02 1st $16,639.880.387% 0.250% Fee Simple NMCC
100200 119 11/1/06 1st $14,057.380.287% 0.150% Fee Simple NMCC
100211 119 11/1/06 1st $12,227.990.287% 0.150% Fee Simple NMCC
100212 118 10/1/06 1st $13,013.130.387% 0.250% Fee Simple NMCC
100215 119 11/1/06 1st $11,043.820.287% 0.150% Fee Simple NMCC
100184 114 6/1/06 1st $11,052.340.337% 0.200% Fee Simple NMCC
100117 110 2/1/06 1st $7,424.140.337% 0.200% Fee Simple NMCC
100186 118 10/1/06 1st $6,532.040.337% 0.200% Fee Simple NMCC
300001 112 4/1/06 1st $26,616.990.257% 0.120% Fee Simple NMCC
951221 75 3/1/03 1st $22,163.230.382% 0.245% Fee Simple NMCC
300005 116 8/1/06 1st $98,707.910.262% 0.125% Fee Simple NMCC
300006 116 8/1/06 1st $49,117.810.262% 0.125% Fee Simple NMCC
300017 117 9/1/06 1st $48,946.090.262% 0.125% Fee Simple NMCC
300011 117 9/1/06 1st $31,555.260.312% 0.175% Fee Simple NMCC
400005 79 7/1/03 1st $54,479.750.362% 0.225% Fee Simple NMCC
962355 77 5/1/03 1st $47,265.160.262% 0.125% Fee Simple NMCC
951325 111 3/1/06 1st $46,612.770.317% 0.180% Fee Simple NMCC
962354 78 6/1/03 1st $30,336.440.262% 0.125% Fee Simple NMCC
400004 115 7/1/06 1st $16,204.440.337% 0.200% Fee Simple NMCC
</TABLE>
Footnotes:
(i) Administrative Fee includes the Master Servicing Fee (which
includes the Primary Servicer Fee and the Standby Fee) and the
Trustee Fee.
(ii) The monthly payment steps down to $8,433.02 in the 73rd month of
the Mortgage Loan
(iii) These two Mortgaged Properties secure one Mortgage Loan
evidenced by one Mortgage Note. An original balance was
attributed to each such Mortgaged Property for the purpose of
determining (among other things) a Cut-Off Date LTV Ratio, an U/W
DSCR and a DSCR for each such Mortgaged Property.
Page 3 of 3
<PAGE>
SCHEDULE II
SERVICING CONTRACTS
Citimae Commercial Seller-Servicer Contracts
Seller Servicer Original Contract Date
- --------------- ----------------------
CB Commercial Real Estate Group, Inc. October 12, 1994
Citicorp Mortgage Finance N/A (sub-servicing rights to be
transferred to GMAC)
Collateral Mortgage, Ltd. April 29, 1994
Financial Federal Savings Bank April 27, 1994
GMAC Mortgage Corporation of PA December 16, 1993
Huntington Capital Corp. January 27, 1994
Keycorp Real Estate Capital Markets March 26, 1996
Mellon Mortgage Company November 16, 1995
PNC Bank August 8, 1994
NationsBanc Capital Markets, Inc. Sub-Servicing Agreements
Seller Servicer Contract Date
- --------------- -------------
Bankers Mutual Mortgage, Inc. December 19, 1996
Berkshire Mortgage Finance Corporation December 19, 1996
Midland Loan Services, L.P. December 19, 1996
The Patrician Financial Company December 19, 1996
Washington Mortgage Financial Group December 19, 1996
MORTGAGE LOAN PURCHASE AGREEMENT
This Mortgage Loan Purchase Agreement (this "Agreement"), is dated and
effective as of December 11, 1996, between Citicorp Real Estate, Inc. as seller
(the "Seller") and Mortgage Capital Funding, Inc. as purchaser (the
"Purchaser").
The Seller desires to sell, assign, transfer and otherwise convey to
or at the direction of the Purchaser, and the Purchaser desires to purchase (for
its own benefit or on behalf of the Trust Fund (as defined below)), subject to
the terms and conditions set forth herein, the multifamily and commercial
mortgage loans (the "Mortgage Loans") identified on the schedule annexed hereto
as Exhibit A (the "Mortgage Loan Schedule"), as such schedule may be amended
from time to time pursuant to the terms hereof. Certain of the Mortgage Loans
(the "PNC Mortgage Loans") were purchased by the Seller from PNC Bank, National
Association ("PNC Bank") pursuant to a mortgage loan purchase agreement, dated
the date hereof (the "PNC Mortgage Loan Purchase Agreement"), between PNC Bank
and the Seller. Certain of the Mortgage Loans (the "NMCC Mortgage Loans"; all
Mortgage Loans which are not NMCC Mortgage Loans, the "CREI Mortgage Loans")
were purchased by the Seller from NationsBanc Mortgage Capital Corporation
("NMCC") pursuant to a mortgage loan purchase agreement, dated the date hereof
(the "NMCC Mortgage Loan Purchase Agreement"), between NMCC and the Seller.
The Purchaser intends to create a trust fund (the "Trust Fund"), the
primary assets of which will be the Mortgage Loans, and beneficial ownership of
which will be evidenced by a series of mortgage pass-through certificates (the
"Certificates"). Certain classes of the Certificates will be rated by Fitch
Investors Service, L.P. and/or Moody's Investors Service, Inc., (together, the
"Rating Agencies"). Certain classes of the Certificates (the "Registered
Certificates") will be registered under the Securities Act of 1933, as amended
(the "Securities Act"). The Trust Fund will be created and the Certificates will
be issued pursuant to a pooling and servicing agreement, dated as of December 1,
1996 (the "Pooling and Servicing Agreement"), among the Purchaser as sponsor,
the Seller as mortgage loan seller, NMCC as an additional warranting party, GMAC
Commercial Mortgage Corporation as master servicer (in such capacity, the
"Master Servicer") and as special servicer (in such capacity, the "Special
Servicer"), LaSalle National Bank as trustee (in such capacity, the "Trustee")
and REMIC administrator (in such capacity, the "REMIC Administrator") and ABN
AMRO Bank N.V. as fiscal agent. Capitalized terms used but not otherwise defined
herein have the respective meanings assigned to them in the Pooling and
Servicing Agreement.
The Purchaser intends to sell the Certificates to Citibank, N.A.
("Citibank") and NationsBanc Capital Markets, Inc. ("NationsBanc") pursuant to,
in the case of the Registered Certificates, an underwriting agreement dated the
date hereof (the "Underwriting Agreement") and, in the case of the remaining
Certificates (the "Non-Registered Certificates"), a certificate purchase
agreement dated the date hereof (the "Certificate Purchase Agreement").
<PAGE>
Now, therefore, in consideration of the premises and the mutual
agreements set forth herein, the parties agree as follows:
SECTION 1. Agreement to Purchase.
(a) The Seller agrees to sell, assign, transfer and otherwise convey
to or at the direction of the Purchaser, and the Purchaser agrees to purchase
(for its own benefit or on behalf of the Trust Fund), the Mortgage Loans. The
purchase and sale of the Mortgage Loans shall take place on December 19, 1996 or
such other date as shall be mutually acceptable to the parties hereto (the
"Closing Date"). As of the close of business on December 1, 1996 (the "Cutoff
Date"), the Mortgage Loans will have an aggregate principal balance (the
"Initial Pool Balance"), after application of all payments of principal due
thereon on or before such date, whether or not received, of $458,055,542,
subject to a variance of plus or minus 5%. The purchase price for the Mortgage
Loans shall be equal to 106.59% of the Initial Pool Balance ($488,228,337), plus
accrued interest and shall be paid to the Seller by wire transfer in immediately
available funds on the Closing Date (or by such other method as the Purchaser
and the Seller may agree).
(b) Pursuant to the Pooling and Servicing Agreement, the Purchaser
will assign, or will direct the Seller to assign, to the Trustee, and the
Trustee will succeed to, all of the right, title and interest of the assigning
party in and to the Mortgage Loans.
SECTION 2. Conveyance of Mortgage Loans.
(a) On the Closing Date, subject only to receipt of the purchase price
referred to in Section 1 hereof, the Seller shall transfer, assign, set over and
otherwise convey to the Purchaser or, if so directed, to the Trustee, without
recourse, all the right, title and interest of the Seller in and to the Mortgage
Loans identified on the Mortgage Loan Schedule as of such date. The Mortgage
Loan Schedule, as it may be amended, shall conform to the requirements set forth
in this Agreement and the Pooling and Servicing Agreement.
(b) The Purchaser or the Trustee, as the case may be, shall be
entitled to receive all scheduled payments of principal and interest due on the
Mortgage Loans after the Cut-off Date, and all other recoveries of principal and
interest collected thereon after the Cut-off Date. All scheduled payments of
principal and interest due thereon on or before the Cut-off Date and collected
after the Cut-off Date shall belong to the Seller.
(c) On or before the Closing Date, the Seller shall deliver or cause
to be delivered to the Trustee or to a custodian designated by the Trustee (a
"Custodian") all documents required to be delivered by the Seller under the
Pooling and Servicing Agreement and shall otherwise comply with all conveyance
requirements thereof.
(d) The Seller's records will reflect the transfer of the Mortgage
Loans to the Purchaser or the Trustee, as the case may be, as a sale.
<PAGE>
SECTION 3. Examination of Mortgage Loan Files and Due Diligence
Review.
The Seller shall reasonably cooperate with any examination of the
Mortgage Files and Servicing Files for the Mortgage Loans that may be undertaken
by or on behalf of the Purchaser. The fact that the Purchaser has conducted or
has failed to conduct any partial or complete examination of the Mortgage Files
and/or Servicing Files relating to the Mortgage Loans shall not affect the
Purchaser's or the Trustee's right to pursue any remedy available in equity or
at law for a breach of the Seller's representations and warranties contemplated
by Section 4.
SECTION 4. Representations, Warranties and Covenants of the Seller.
(a) The Seller shall make such representations and warranties
regarding itself and the Mortgage Loans as are required under the Pooling and
Servicing Agreement.
(b) In addition, the Seller hereby represents and warrants to, and
covenants with, the Purchaser, and for the benefit of Citibank, NationsBanc and
NMCC as of the date hereof that:
(i) The Seller is a corporation duly organized validly existing and in
good standing under the laws of the state of Delaware, and is in compliance
with the laws of each State in which any Mortgaged Property is located to
the extent necessary to ensure the enforceability of each Mortgage Loan and
to perform its obligations under this Agreement.
(ii) The execution and delivery of this Agreement by the Seller, and
the performance and compliance with the terms of this Agreement by the
Seller, will not violate the Seller's articles of incorporation and by-laws
or constitute a default (or an event which, with notice or lapse of time,
or both, would constitute a default) under, or result in the breach of, any
material agreement or other instrument to which it is a party or which is
applicable to it or any of its assets.
(iii) The Seller has the full power and authority to enter into and
consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement, and
has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by the Purchaser, constitutes a valid, legal and binding
obligation of the Seller, enforceable against the Seller 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) The Seller 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, any order or decree
of any court or arbiter, or any order, regulation or demand of any federal,
state or local governmental or regulatory
<PAGE>
authority, which violation, in the Seller's good faith and reasonable
judgment, is likely to affect materially and adversely either the ability
of the Seller to perform its obligations under this Agreement or the
financial condition of the Seller
(vi) No litigation is pending or, to the best of the Seller's
knowledge, threatened against the Seller which would prohibit the Seller
from entering into this Agreement or, in the Seller's good faith and
reasonable judgment, is likely to materially and adversely affect either
the ability of the Seller to perform its obligations under this Agreement
or the financial condition of the Seller.
(vii) To the extent of the information included therein in reliance on
the Seller's Information, none of the Prospectus, the Memorandum or,
insofar as they are required to be filed as part of the Registration
Statement pursuant to the No-Action Letters, any Computational Materials or
ABS Term Sheets with respect to the Registered Certificates, contains any
untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading
(in the case of any Computational Materials or ABS Term Sheets, when read
in conjunction with the Prospectus and, in the case of the Memorandum, when
read together with the other information specified therein as being
available for review by investors). (Seller's Information, Prospectus,
Memorandum, Registration Statement, No-Action Letters, Computational
Materials, ABS Term Sheets and Seller's Information are each defined in
Section 8.)
SECTION 5. Repurchases.
The Seller shall repurchase (or cause an affiliate to purchase) any
Mortgage Loan required to be repurchased by it under, and in accordance with,
the Pooling and Servicing Agreement.
SECTION 6. Closing.
The closing of the sale of the Mortgage Loans (the "Closing") shall be
held at the offices of Thacher Proffitt & Wood, Two World Trade Center, New
York, New York 10048 at 10:00 a.m., New York City time, on the Closing Date.
The Closing shall be subject to each of the following conditions:
(i) All of the representations and warranties of the Seller specified
herein and in the Pooling and Servicing Agreement shall be true and correct
as of the Closing Date;
(ii) All documents specified in Section 7 of this Agreement (the
"Closing Documents"), in such forms as are agreed upon and acceptable to
the Purchaser, shall be duly executed and delivered by all signatories as
required pursuant to the respective terms thereof;
<PAGE>
(iii) The Seller shall have delivered and released to the Trustee, the
Master Servicer or a Custodian, as applicable, all documents and funds
required to be so delivered pursuant to the Pooling and Servicing
Agreement;
(iv) The result of any examination of the Mortgage Files and Servicing
Files performed by or on behalf of the Purchaser pursuant to Section 3
hereof shall be satisfactory to the Purchaser in its sole determination;
(v) All other terms and conditions of this Agreement required to be
complied with on or before the Closing Date shall have been complied with,
and the Seller shall have the ability to comply with all terms and
conditions and perform all duties and obligations required to be complied
with or performed after the Closing Date;
(vi) The Seller shall have paid all fees and expenses payable by it to
the Purchaser or otherwise pursuant to this Agreement; and
(vii) Neither the Underwriting Agreement nor the Certificate Purchase
Agreement shall have been terminated in accordance with its terms.
Both parties agree to use their best efforts to perform their
respective obligations hereunder in a manner that will enable the Purchaser to
purchase the Mortgage Loans on the Closing Date.
SECTION 7. Closing Documents.
The Closing Documents shall consist of the following:
(a) This Agreement duly executed and delivered by the Purchaser and
the Seller, and the Pooling and Servicing Agreement duly executed and delivered
by the Purchaser, the Seller and the other parties thereto;
(b) An Officer's Certificate substantially in the form of Exhibit B-1
hereto, executed by the Secretary of the Seller, in his or her individual
capacity, and dated the Closing Date, and upon which the Purchaser and each
underwriter or other initial purchaser of the Certificates (each, a "Certificate
Purchaser") may rely, attaching thereto as exhibits the articles of
incorporation and by-laws of the Seller;
(c) A certificate of good standing with respect to the Seller issued
by the Secretary of State of the State of Delaware, dated not earlier than 45
days prior to the Closing Date;
(d) A certificate of the Seller substantially in the form of Exhibit
B-2 hereto, executed by an executive officer or authorized signatory of the
Seller and dated the Closing Date, and upon which the Purchaser and each
Certificate Purchaser may rely;
<PAGE>
(e) A written opinion of Stephen E. Dietz, Esq., or other counsel for
the Seller, substantially in the form of Exhibit B-3 hereto (with any
modifications required by either Rating Agency, and subject to such reasonable
assumptions and qualifications as may be requested by counsel for the Seller and
acceptable to counsel for the Purchaser), dated the Closing Date and addressed
to the Purchaser, each Certificate Purchaser and each Rating Agency, together
with such other written opinions as may be required by a Rating Agency;
(f) One or more accountant's comfort letters relating to the
information regarding the Mortgage Loans contained in the Offering Documents
that is of a statistical nature; and
(g) Such further certificates, opinions and documents as the Purchaser
may reasonably request.
SECTION 8. Indemnification.
(a) The Seller agrees to indemnify and hold harmless the Purchaser,
Citibank, NationsBanc, NMCC, their respective officers and directors, and each
person, if any, who controls the Purchaser, Citibank, NationsBanc or NMCC within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), against any
and all losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the Securities Act, the Exchange Act or
other federal or state statutory law or regulation, at common law, by
contractual arrangement or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Prospectus or the Memorandum, or in any revision or
amendment thereof or supplement thereto, or in any other filing incorporated by
reference therein, or arise out of or are based upon the omission or alleged
omission (in the case of any Computational Materials or ABS Term Sheets, when
read in conjunction with the Prospectus and, in the case of the Memorandum, when
read together with the other information specified therein as being available
for review by investors) to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; but only if and to the
extent that such untrue statement, alleged untrue statement, omission or alleged
omission was made in reliance upon (i) written or oral information regarding the
CREI Mortgage Loans, the related Mortgaged Properties or the related Mortgagors,
furnished to the Purchaser, Citibank and/or NationsBanc, directly or indirectly,
by the Seller or approved by the Seller and used in connection with the
preparation of the Memorandum, the Prospectus or any Computational Materials or
ABS Term Sheets with respect to the Registered Certificates or (ii) any
representations, warranties, statements or covenants of the Seller contained in
this Agreement or any document or certificate delivered pursuant hereto (the
foregoing items (i) and (ii), the "Seller's Information"). For purposes of the
foregoing, "Registration Statement" shall mean collectively the registration
statement No. 33-25068 filed by MCFI on Form S-11 and declared effective on
October 25, 1988 and the registration statement No. 33-63924 filed by MCFI on
Form S-3 and declared effective on August 24, 1993; "Prospectus" shall mean the
prospectus dated December 11, 1996, as supplemented by the prospectus supplement
dated December 11, 1996, relating to the Registered Certificates; "Memorandum"
shall mean the private placement memorandum dated December
<PAGE>
11, 1996, relating to the Non-Registered Certificates; "Computational Materials"
shall have the meaning assigned thereto in the no-action letter dated May 20,
1994 issued by the Division of Corporation Finance of the Securities and
Exchange Commission (the "Commission") to Kidder, Peabody Acceptance Corporation
I, Kidder, Peabody & Co. Incorporated, and Kidder Structured Asset Corporation
and the no-action letter dated May 27, 1994 issued by the Division of
Corporation Finance of the Commission to the Public Securities Association
(together, the "Kidder Letters"); and "ABS Term Sheets" shall have the meaning
assigned thereto in the no- action letter dated February 17, 1995 issued by the
Division of Corporation Finance of the Commission to the Public Securities
Association (the "PSA Letter" and, together with the Kidder Letters, the
"No-Action Letters"). This indemnity agreement will be in addition to any
liability which the Seller may otherwise have.
(b) Promptly after receipt by any person entitled to indemnification
under this Section 8 (each, an "indemnified party") of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against the Seller (the "indemnifying party") under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the omission to notify the indemnifying party will not relieve it from any
liability that it may have to any indemnified party otherwise than under this
Section 8; provided, however, that any increase in such liability as a result of
such failure to notify shall not be an expense of the indemnifying party. In
case any such action is brought against any indemnified party and it notifies
the indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein, and to the extent that it may elect by
written notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense thereof,
with counsel satisfactory to such indemnified party; provided, however, that if
the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party or parties shall have reasonably
concluded that there may be legal defenses available to it or them and/or other
indemnified parties that are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof, unless (i) the indemnified party shall have
employed separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel, approved by the Purchaser and the indemnifying
party, representing all the indemnified parties under Section 8(a) who are
parties to such action), (ii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party; and except that, if clause (i)
or (iii) is applicable, such liability shall only be in respect of the counsel
referred to in such clause (i) or (iii).
<PAGE>
(c) If the indemnification provided for in this Section 8 is due in
accordance with its terms but is for any reason held by a court to be
unavailable to an indemnified party on grounds of policy or otherwise, then the
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities, in such proportion as is
appropriate to reflect the relative fault of the indemnified and indemnifying
parties in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the indemnified and indemnifying parties
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by such parties.
(d) The Purchaser and the Seller agree that it would not be just and
equitable if contribution pursuant to Section 8(c) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the considerations referred to in Section 8(c) above. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in this Section 8 shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim, except where the indemnified party is required to bear such
expenses pursuant to this Section 8, which expenses the indemnifying party shall
pay as and when incurred, at the request of the indemnified party, to the extent
that the indemnifying party will be ultimately obligated to pay such expenses.
If any expenses so paid by the indemnifying party are subsequently determined to
not be required to be borne by the indemnifying party hereunder, the party that
received such payment shall promptly refund the amount so paid to the party
which made such payment. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The indemnity and contribution agreements contained in this
Section 8 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by any
indemnified party, any of its directors or officers, or any person controlling
the Purchaser and (iii) acceptance of and payment for any of the Certificates.
SECTION 9. Costs.
The parties hereto acknowledge that all costs and expenses in
connection with the transactions contemplated hereunder (including without
limitation, the issuance of the Certificates as contemplated by the Pooling and
Servicing Agreement) shall be paid by the Underwriters in accordance with the
Agreement Among Underwriters dated October 30, 1996, between Citibank and
NationsBanc.
<PAGE>
SECTION 10. Third Party Beneficiaries.
(a) Citibank, NationsBanc and NMCC are intended third party
beneficiaries of the representations, warranties and covenants made by the
Seller in Sections 4 and 8 of this Agreement and, to the extent they affect the
rights of Citibank, NationsBanc and NMCC as third party beneficiaries under such
Sections 4 and 8, the covenants of the Seller made in the other provisions of
this Agreement, in all cases solely with respect to any rights and benefits as
such third party beneficiary relating to the CREI Mortgage Loans. It is
acknowledged that such representations, warranties and covenants of the Seller
may be enforced by Citibank, NationsBanc and NMCC to the same extent as if they
were parties hereto.
(b) Each of the officers, directors, employees, agents, controlling
persons and affiliates of Citibank, NationsBanc and NMCC is an intended third
party beneficiary of the representations, warranties, covenants and indemnities
of the Seller set forth in Sections 4 and 8 of this Agreement and, to the extent
they affect the rights of Citibank, NationsBanc and NMCC as third party
beneficiaries under such Sections 4 and 8, the covenants of the Seller made in
the other provisions of this Agreement. It is acknowledged and agreed that such
representations, warranties, covenants and indemnities may be enforced by or on
behalf of such persons or entities against the Seller to the same extent as if
it was a party hereto.
SECTION 11. Compliance with Pooling and Servicing Agreements.
CREI agrees that it will comply with all of its respective obligations
under the Pooling and Servicing Agreement, including without limitation its
repurchase obligations pursuant to Section 2.03 of the Pooling and Servicing
Agreement.
SECTION 12. Notices.
All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered to or
mailed, by registered mail, postage prepaid, or transmitted by telex or
telegraph and confirmed by a similar mailed writing, if to the Purchaser,
addressed to the Purchaser at 399 Park Avenue, New York, New York 10043,
Attention: Mortgage Finance, or such other address as may hereafter be furnished
to the Seller in writing by the Purchaser; and if to the Seller, addressed to
the Seller at 399 Park Avenue, 3rd Floor, New York, New York 10043, Attention:
Mr. Richard L. Jarocki, Jr., or to such other address as the Seller may
designate in writing to the Purchaser.
SECTION 13. Representations, Warranties and Agreements to Survive
Delivery.
All representations, warranties and agreements contained in this
Agreement, incorporated herein by reference or contained in the certificates of
officers of the Seller submitted pursuant hereto, shall remain operative and in
full force and effect and shall survive delivery of the Mortgage Loans by the
Seller to the Purchaser or, at the direction of the Purchaser, to the Trustee.
SECTION 14. Severability of Provisions.
<PAGE>
Any part, provision, representation, warranty or covenant of this
Agreement that is prohibited or which is held to be void or unenforceable shall
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any part, provision,
representation, warranty or covenant of this Agreement that is prohibited or
unenforceable or is held to be void or unenforceable in any particular
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction. To the extent permitted by applicable law,
the parties hereto waive any provision of law which prohibits or renders void or
unenforceable any provision hereof.
SECTION 15. Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
SECTION 16. GOVERNING LAW.
THIS AGREEMENT AND THE RIGHTS, DUTIES, OBLIGATIONS AND
RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE GOVERNED IN ACCORDANCE WITH THE
INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW YORK. THE PARTIES HERETO INTEND
THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW
SHALL APPLY TO THIS AGREEMENT.
SECTION 17. Further Assurances.
The Seller and the Purchaser agree to execute and deliver such
instruments and take such further actions as the other party may, from time to
time, reasonably request in order to effectuate the purposes and to carry out
the terms of this Agreement.
SECTION 18. Successors and Assigns.
The rights and obligations of the Seller under this Agreement shall
not be assigned by the Seller without the prior written consent of the
Purchaser, except that any person into which the Seller may be merged or
consolidated, or any corporation or other entity resulting from any merger,
conversion or consolidation to which the Seller is a party, or any person
succeeding to all or substantially all of the business of the Seller, shall be
the successor to the Seller hereunder. The Purchaser has the right to assign its
interest under this Agreement, in whole or in part, as may be required to effect
the purposes of the Pooling and Servicing Agreement, and the assignee shall, to
the extent of such assignment, succeed to the rights and obligations hereunder
of the Purchaser. Subject to the foregoing, this Agreement shall bind and inure
to the benefit of and be enforceable by the Seller and the Purchaser, and their
permitted successors and assigns, and the officers, directors and controlling
persons referred to in Section 8.
<PAGE>
SECTION 19. Amendments.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by a duly authorized
officer of the party against whom such waiver or modification is sought to be
enforced; provided, however, that notwithstanding the foregoing and any other
provisions of this Agreement, no term or provision of this Agreement shall be
waived or modified in any manner that would affect the rights hereunder of any
third party beneficiary identified in Section 10 hereof without the consent of
such third party beneficiary.
<PAGE>
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective duly authorized officers as of the
date first above written.
CITICORP REAL ESTATE, INC.
By:
--------------------------
Name:
Title:
MORTGAGE CAPITAL FUNDING, INC.
By:
--------------------------
Name:
Title:
<PAGE>
EXHIBIT A
MORTGAGE LOAN SCHEDULE
<TABLE>
<CAPTION>
Loan Zip Mortgage Original Cut-Off Date
Number Property Address City State Code Rate Balance Balance
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
650927-1 11685 Sunset Hills Road Reston VA 22090 8.930% $19,500,000 $19,422,636
655165-6 1502-1910 Sweetwater Road National City CA 91950 9.150% $15,669,000 $15,648,735
643088-7 6600 Stage Road Bartlett TN 38134 8.800% $9,730,000 $9,713,257
655143-6 33523 Eight Mile Road Livonia MI 48152 9.490% $9,097,409 $9,083,850
650708-2 610 Montgomery Highway Vestavia Hills AL 35216 9.490% $8,880,000 $8,852,786
650890-0 Snowmass Village Pitkin County CO 81615 9.510% $7,200,000 $7,185,506
655144-9 37100-37164 Six Mile Road Livonia MI 48152 10.100% $3,276,328 $3,272,036
650443-8 9852 Chapman Avenue Garden Grove CA 92641 9.210% $2,833,500 $2,796,196
650645-2 10800-10820 Rhode Island Avenue Beltsville MD 20705 9.960% $2,200,000 $2,191,513
655166-9 586 Connecticut Avenue Norwalk CT 06854 8.320% $1,900,000 $1,889,891
650942-0 9666-9710 Mentor Avenue Mentor OH 44060 8.170% $1,275,000 $1,240,869
655131-3 NEC East 4th Street & Eastern Avenue Moore OK 73160 9.170% $1,225,000 $1,225,000
650846-3 10444-10466 Dumfries Road Manassas VA 22110 9.960% $1,100,000 $1,095,757
650940-4 1585-1603 Capital Avenue NE Battle Creek MI 49014 8.860% $1,100,000 $1,094,933
650919-0 3200 Arville Street Las Vegas NV 89102 8.190% $7,200,000 $7,185,961
655148-1 1337-1359 Fox Run Drive Willoughby OH 44094 8.375% $6,525,000 $6,369,980
655174-0 2100 Walnut Street Philadelphia PA 19146 9.020% $4,800,000 $4,782,738
650572-5 575 East Torrey Street New Braunfels TX 78130 8.900% $4,487,500 $4,471,039
650903-5 400 East Broad Street Newnan GA 30263 8.550% $4,250,000 $4,247,452
655151-7 1151 Meadow Lane Waterloo IA 50701 8.740% $3,275,000 $3,269,294
655147-8 33-26 Cooper Place New Haven CT 06050 10.000% $3,180,000 $3,141,078
655178-2 201 S. 13th Street Philadelphia PA 19146 9.170% $3,150,000 $3,138,950
655172-2 380 Daleville Road Willington CT 06279 9.000% $3,000,000 $2,994,628
644110-6 3475 Steve Road Memphis TN 38111 8.820% $2,947,000 $2,938,521
655149-4 8176 South 1300 East Sandy UT 84094 9.000% $2,775,000 $2,695,148
650872-2 564 Cypress Lane Greenville MS 38701 8.990% $2,450,000 $2,445,947
655173-7 2031 South Street Philadelphia PA 19146 9.120% $2,165,000 $2,157,342
650886-1 10621 Monaco Drive Jacksonville FL 32218 9.010% $1,930,000 $1,927,888
655150-4 455 West State Street Trenton NJ 08650 10.000% $1,923,000 $1,902,552
655175-3 429 S. Baltimore St. Dillsburg (Harrisburg)PA 17019 9.220% $1,875,000 $1,871,763
650886-7 2625 Belvedere Drive Jackson MS 39212 8.990% $1,867,000 $1,861,958
650905-1 1466 Birch Bend Road Memphis TN 38116 9.060% $1,850,000 $1,846,983
655177-9 Duck Creek Road Clayton (Dover) DE 19938 9.070% $1,830,000 $1,821,810
650875-1 3373 Regal Plaza Drive Memphis TN 38116 8.680% $1,650,000 $1,645,114
655158-8 541-7 West 180th Street New York NY 10033 8.510% $1,600,000 $1,598,452
650772-3 3491 Graceland Drive Memphis TN 38116 9.300% $1,600,000 $1,593,107
655159-1 1111 Musken Road Abilene TX 79604 8.970% $1,500,000 $1,498,655
655176-6 1216-18 Walnut Street Philadelphia PA 19146 9.170% $1,500,000 $1,494,738
655089-3 1433 Covington Road Piqua (iii) OH 45356 9.530% $720,000 $717,015
655089-3 311 Jefferson Avenue Urbana (iii) OH 43078 9.530% $780,000 $776,766
650773-6 4187 Rainbranch Drive Memphis TN 38116 8.990% $1,379,500 $1,375,668
655179-5 3920 Broadway New York NY 10032 8.500% $1,200,000 $1,198,837
650868-3 1224 29th Street Gulfport MS 39501 9.100% $1,200,000 $1,197,403
655130-0 1117 South Street Wilmington OH 45177 9.140% $1,200,000 $1,195,769
655137-1 6090 Terry Road Jacksonville FL 32216 9.470% $1,190,000 $1,186,029
655138-4 2015 N. McCord Road Lucas County OH 43615 9.470% $1,140,000 $1,136,196
655134-2 145 Newell Street Painesville Twnshp OH 44077 9.420% $1,120,000 $1,116,231
650547-9 7225 Crane Avenue Jacksonville FL 32216 9.140% $850,000 $849,095
655142-3 8800-8888 Kempwood Drive Houston TX 77080 8.800% $775,000 $773,666
655086-4 1500 Monument Road Jacksonville FL 32225 9.520% $735,000 $731,947
655168-5 80 Cottontail Lane Somerset NJ 08873 9.290% $4,300,000 $4,296,346
650996-7 15,19,23 & 27 Midstate Drive Auburn MA 01501 9.510% $3,640,000 $3,634,015
655125-8 5401 Kingston Pike Knoxville TN 37919 9.070% $2,500,000 $2,500,000
655104-1 3085 Reid Road Grand Blanc MI 48439 10.250% $6,600,000 $6,366,623
655105-4 23801 Industrial Park Farmington Hills MI 48024 9.900% $5,964,666 $5,778,934
650907-7 994 Riverview Drive Totowa NJ 07512 9.230% $4,200,000 $4,185,412
<CAPTION>
Remaining
Term to Stated Stated Primary
Loan Maturity Maturity Monthly Admin. Servicing Estate Loan
Number (Months) Date Due Date Payment Fee Rate Fee Rate Interest Seller
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
650927-1 113 5/1/06 1st $155,920.25 0.217% 0.080% Fee Simple CREI
655165-6 118 10/1/06 1st $129,570.12 0.262% 0.125% Fee Simple CREI
643088-7 117 9/1/06 1st $76,893.68 0.217% 0.080% Fee Simple CREI
655143-6 117 9/1/06 1st $76,429.58 0.262% 0.125% Fee Simple CREI
650708-2 115 7/1/06 1st $75,583.46 0.262% 0.125% Fee Simple CREI
650890-0 117 9/1/06 1st $61,853.13 0.262% 0.125% Fee Simple CREI
655144-9 117 9/1/06 1st $28,994.50 0.262% 0.125% Fee Simple CREI
650443-8 175 7/1/11 1st $29,094.29 0.262% 0.125% Fee Simple CREI
650645-2 115 7/31/06 1st $19,929.42 0.262% 0.125% Fee Simple CREI
655166-9 178 10/1/11 1st $18,210.53 0.262% 0.125% Fee Simple CREI
650942-0 81 9/1/03 1st $19,980.58 0.262% 0.125% Fee Simple CREI
655131-3 120 12/1/06 1st $10,423.14 0.262% 0.125% Fee Simple CREI
650846-3 115 7/31/06 1st $9,964.71 0.262% 0.125% Fee Simple CREI
650940-4 117 9/1/06 1st $9,798.16 0.262% 0.125% Fee Simple CREI
650919-0 117 9/1/06 1st $53,787.80 0.262% 0.125% Fee Simple CREI
655148-1 86 2/1/04 1st $49,594.71 0.262% 0.125% Fee Simple CREI
655174-0 116 8/1/06 1st $40,347.19 0.262% 0.125% Fee Simple CREI
650572-5 116 8/1/06 1st $37,352.12 0.262% 0.125% Fee Simple CREI
650903-5 119 11/1/06 1st $32,829.54 0.262% 0.125% Fee Simple CREI
655151-7 117 9/1/06 1st $25,741.05 0.262% 0.125% Fee Simple CREI
655147-8 59 11/1/01 1st $27,906.77 0.262% 0.125% Fee Simple CREI
655178-2 116 8/1/06 1st $26,802.35 0.262% 0.125% Fee Simple CREI
655172-2 118 10/1/06 1st $25,175.89 0.262% 0.125% Fee Simple CREI
644110-6 115 7/1/06 1st $23,331.55 0.262% 0.125% Fee Simple CREI
655149-4 91 7/1/04 1st $23,287.70 0.262% 0.125% Fee Simple CREI
650872-2 117 9/1/06 1st $19,695.63 0.262% 0.125% Fee Simple CREI
655173-7 116 8/1/06 1st $18,346.84 0.262% 0.125% Fee Simple CREI
650886-1 118 10/1/06 1st $15,543.11 0.262% 0.125% Fee Simple CREI
655150-4 62 2/1/02 1st $16,875.70 0.262% 0.125% Fee Simple CREI
655175-3 118 10/1/06 1st $16,018.36 0.262% 0.125% Fee Simple CREI
650886-7 117 9/1/06 1st $15,655.01 0.262% 0.125% Fee Simple CREI
650905-1 117 9/1/06 1st $14,965.46 0.262% 0.125% Fee Simple CREI
655177-9 115 7/1/06 1st $15,445.11 0.262% 0.125% Fee Simple CREI
650875-1 115 7/1/06 1st $12,898.16 0.262% 0.125% Fee Simple CREI
655158-8 119 11/1/06 1st $12,894.42 0.262% 0.125% Fee Simple CREI
650772-3 115 7/1/06 1st $13,757.36 0.262% 0.125% Fee Simple CREI
655159-1 119 11/1/06 1st $12,557.14 0.262% 0.125% Fee Simple CREI
655176-6 116 8/1/06 1st $12,763.02 0.287% 0.150% Fee Simple CREI
655089-3 115 7/1/06 1st $6,305.64 0.262% 0.125% Fee Simple CREI
655089-3 115 7/1/06 1st $6,831.11 0.262% 0.125% Fee Simple CREI
650773-6 115 7/1/06 1st $11,089.84 0.262% 0.125% Fee Simple CREI
655179-5 119 11/1/06 1st $9,662.73 0.262% 0.125% Fee Simple CREI
650868-3 116 8/1/06 1st $9,741.94 0.262% 0.125% Fee Simple CREI
655130-0 116 8/1/06 1st $10,185.65 0.262% 0.125% Fee Simple CREI
655137-1 116 8/1/06 1st $10,372.18 0.262% 0.125% Fee Simple CREI
655138-4 116 8/1/06 1st $9,936.38 0.262% 0.125% Fee Simple CREI
655134-2 116 8/1/06 1st $9,723.19 0.262% 0.125% Fee Simple CREI
650547-9 118 10/1/06 1st $6,925.09 0.262% 0.125% Fee Simple CREI
655142-3 117 9/1/06 1st $6,124.62 0.262% 0.125% Fee Simple CREI
655086-4 115 7/1/06 1st $6,431.89 0.262% 0.125% Fee Simple CREI
655168-5 119 11/1/06 1st $36,943.18 0.262% 0.125% Fee Simple CREI
650996-7 118 10/1/06 1st $31,827.87 0.262% 0.125% Fee Simple CREI
655125-8 120 12/1/06 1st $21,099.88 0.262% 0.125% Fee Simple CREI
655104-1 59 11/1/01 1st $64,788.46 0.262% 0.125% Fee Simple CREI
655105-4 40 4/1/00 1st $54,303.93 0.262% 0.125% Fee Simple CREI
650907-7 116 8/1/06 1st $35,910.09 0.262% 0.125% Fee Simple CREI
</TABLE>
Page 1 of 3
<PAGE>
<TABLE>
<CAPTION>
Loan Zip Mortgage Original Cut-Off Date
Number Property Address City State Code Rate Balance Balance
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
655171-1 3701 Dillon Street Baltimore MD 21224 9.040% $1,450,000 $1,448,715
300003 10440 Portsmouth Road Manassas VA 22110 9.190% $8,419,800 $8,413,092
300009 11711 Parklawn Dr. & 5040 Boiling Rockville MD 20852 9.310% $7,650,000 $7,637,568
Brook Parkway
300022 SWC Mallory Lane and Moores Lane Brentwood TN 37027 9.060% $7,000,000 $6,990,360
300002 MD. Rt. 194 & Glade Blvd. Walkersville MD 21793 9.060% $5,527,400 $5,510,475
962135 GA Highway 9 at Hutchinson Road Cumming GA 30128 8.370% $5,550,000 $5,476,240
100131 11820 Northeast Fourth Plain Road Orchards WA 98682 9.170% $4,400,000 $4,380,094
962151 9801-9965 Pines Blvd. Pembroke Pines FL 33026 8.640% $4,365,000 $4,344,036
300023 436 Broadway Methuen MA 01844 9.510% $3,750,000 $3,744,832
100143 SWC SR 434 & Montgomery Road Altamonte Springs FL 32714 8.930% $3,500,000 $3,494,534
100136 Hwy. 70A and Hwy. 301 Selma NC 27577 9.150% $3,028,850 $3,021,660
951114 East 96th Street & Lantern Road Fishers IN 46038 8.750% $3,000,000 $2,977,108
962128 1721 University Drive Pembroke Pines FL 33024 9.170% $2,780,000 $2,742,200
100125 425 Sigman Road Conyers GA 30207 8.920% $2,752,258 $2,739,134
962156 3024 Peachtree Road Atlanta GA 30305 9.150% $2,700,000 $2,688,701
962153 6700 North University Drive Tamarac FL 33321 8.640% $2,610,000 $2,597,465
951122 US Highway 64 East Plymouth NC 27962 8.670% $2,600,000 $2,577,306
300013 3580-3590 Hwy 17-92 Lake Mary FL 60261 9.240% $2,550,000 $2,544,053
100122 4001 Government Blvd. Mobile AL 36693 9.280% $2,453,000 $2,442,160
300012 912-980 Bragg Road Fredericksburg VA 22407 9.350% $2,429,000 $2,420,553
962152 1230-1324 Military Trail Palm Beach FL 33409 8.640% $2,425,000 $2,413,353
300019 445 State Road 13 Jacksonville FL 32259 8.960% $2,200,000 $2,174,417
300004 13200 SW 8th Street Miami FL 33184 9.630% $2,104,000 $2,098,307
300025 Hwy 421 at Golden Road Wilmington NC 28412 8.940% $1,950,000 $1,948,246
100138 SE Quad. of I-85 & SR 56 Creedmoor NC 27522 8.720% $1,950,000 $1,943,590
100066 1716 17th Street Sarasota FL 34231 8.500% $1,950,000 $1,939,865
100090 2610-2788 SW 137th Ave. at Coral Way Miami FL 33175 9.730% $1,819,400 $1,805,929
300026 150 Andrews Road Fayetteville NC 28311 8.720% $1,800,000 $1,798,347
962136 11411 North Dale Mabry Highway Tampa FL 33618 8.670% $1,800,000 $1,786,085
962129 4800 Biscayne Blvd. Miami FL 33137 8.660% $1,768,000 $1,754,310
100089 2400-2486 SW 137th Ave. at Coral Way Miami FL 33175 9.730% $1,762,400 $1,749,351
100146 US Hwy 17 & Maplehurst Road Jacksonville NC 28540 9.400% $1,739,052 $1,733,073
100121 Hwy. 105 & Hwy. 184 Town of Seven Devils NC 28604 9.110% $1,715,200 $1,707,341
100142 2485 Monument Road Jacksonville FL 32225 8.960% $1,700,000 $1,680,231
300018 Hwy. 49 at Dedeaux Road Gulfport MS 38503 9.190% $1,635,000 $1,631,149
300021 4121 Hillsboro Road Nashville TN 37215 9.670% $1,279,600 $1,277,898
100145 U.S. 13/17 Williamston NC 27892 9.150% $1,175,000 $1,170,724
951126 4319 Ft. Jackson Blvd. Columbia SC 29205 8.290% $1,140,000 $1,124,700
962144 1401 Tahoka Road Brownfield (ii) TX 79316 8.010% $1,150,000 $1,119,894
962150 2100, 2300 & 2500 Winchester Place Spartanburg SC 29301 9.760% $935,000 $927,998
100213 4320 Koval Lane Las Vegas NV 89109 8.700% $22,700,000 22,679,038
100214 2500 East Karen Street Las Vegas NV 89121 8.805% $9,002,000 $8,993,939
100192 3320-3360 Topaz Lane & 3321 Quartz Lane Fullerton CA 92631 8.990% $6,741,000 $6,729,491
100178 3942 Holly Road Corpus Christi TX 78415 9.110% $6,488,000 $6,453,255
100209 1500 Champion Pines Lane Augusta GA 30909 8.470% $6,050,000 $6,050,000
100229 6031 Pineland Drive Dallas TX 75231 8.620% $5,020,000 $5,017,033
100196 2301 Godby Road College Park GA 30349 8.930% $4,700,000 $4,691,829
100118 4141 Jackson Street EXT Alexandria LA 71303 8.050% $4,638,000 $4,606,248
100187 840 17th Street San Diego CA 92101 8.665% $4,560,000 $4,546,455
100185 6700 Northwest 16th Street Oklahoma City OK 73127 9.160% $4,200,000 $4,177,693
100197 9971 Jefferson Highway Baton Rouge LA 70809 8.510% $4,000,000 $3,993,645
100195 2012 West Second St. Long Beach MS 39560 9.040% $3,200,000 $3,192,988
100210 74 Woodbine Street Kernersville NC 27284 8.500% $2,650,000 $2,650,000
100204 2255 Grand Concourse Bronx NY 10453 8.660% $2,375,000 $2,373,608
100170 913 Honeysuckle Rd. Dothan AL 36301 8.240% $2,350,000 $2,337,695
100183 1601 North MacArthur Blvd. Oklahoma City OK 73127 9.160% $2,000,000 $1,989,377
<CAPTION>
Remaining
Term to Stated Stated Primary
Loan Maturity Maturity Monthly Admin. Servicing Estate Loan
Number (Months) Date Due Date Payment Fee Rate Fee Rate Interest Seller
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
655171-1 119 11/1/06 1st $12,208.09 0.287% 0.150% Fee Simple CREI
300003 118 10/1/06 1st $68,901.84 0.262% 0.125% Fee Simple NMCC
300009 118 10/1/06 1st $66,536.04 0.262% 0.125% Fee Simple NMCC
300022 117 9/1/06 1st $56,626.05 0.262% 0.125% Fee Simple NMCC
300002 80 8/1/03 1st $46,613.06 0.262% 0.125% Fee Simple NMCC
962135 112 4/1/06 1st $47,708.52 0.257% 0.120% Fee Simple NMCC
100131 114 6/1/06 1st $37,438.20 0.262% 0.125% Fee Simple NMCC
962151 115 7/1/06 1st $35,560.93 0.262% 0.125% Fee Simple NMCC
300023 118 10/1/06 1st $32,789.70 0.262% 0.125% Leasehold NMCC
100143 118 10/1/06 1st $29,204.28 0.262% 0.125% Fee Simple NMCC
100136 117 9/1/06 1st $25,729.84 0.262% 0.125% Fee Simple NMCC
951114 112 4/1/06 1st $24,664.31 0.257% 0.120% Fee Simple NMCC
962128 111 3/1/06 1st $25,317.13 0.257% 0.120% Fee Simple NMCC
100125 114 6/1/06 1st $22,946.26 0.262% 0.125% Fee Simple NMCC
962156 117 9/1/06 1st $24,553.68 0.307% 0.170% Fee Simple NMCC
962153 115 7/1/06 1st $21,263.24 0.262% 0.125% Fee Simple NMCC
951122 111 3/1/06 1st $21,234.60 0.257% 0.120% Fee Simple NMCC
300013 117 9/1/06 1st $21,820.14 0.262% 0.125% Fee Simple NMCC
100122 114 6/1/06 1st $21,057.85 0.262% 0.125% Fee Simple NMCC
300012 79 7/1/03 1st $20,969.37 0.262% 0.125% Fee Simple NMCC
962152 115 7/1/06 1st $19,756.07 0.262% 0.125% Fee Simple NMCC
300019 116 8/1/06 1st $23,025.22 0.262% 0.125% Fee Simple NMCC
300004 116 8/1/06 1st $18,573.07 0.262% 0.125% Fee Simple NMCC
300025 118 10/1/06 1st $15,644.35 0.262% 0.125% Fee Simple NMCC
100138 116 8/1/06 1st $15,992.07 0.262% 0.125% Fee Simple NMCC
100066 114 6/1/06 1st $15,701.93 0.262% 0.125% Fee Simple NMCC
100090 142 10/1/08 1st $21,460.42 0.262% 0.125% Fee Simple NMCC
300026 118 10/1/06 1st $14,122.06 0.262% 0.125% Fee Simple NMCC
962136 112 4/1/06 1st $14,700.88 0.257% 0.120% Fee Simple NMCC
962129 112 4/1/06 1st $14,427.55 0.257% 0.120% Fee Simple NMCC
100089 142 10/1/08 1st $20,788.09 0.262% 0.125% Fee Simple NMCC
100146 115 7/1/06 1st $15,073.33 0.262% 0.125% Fee Simple NMCC
100121 114 6/1/06 1st $14,523.32 0.262% 0.125% Fee Simple NMCC
100142 116 8/1/06 1st $17,792.21 0.262% 0.125% Fee Simple NMCC
300018 117 9/1/06 1st $13,934.21 0.287% 0.150% Fee Simple NMCC
300021 118 10/1/06 1st $11,331.41 0.262% 0.125% Fee Simple NMCC
100145 115 7/1/06 1st $9,981.53 0.262% 0.125% Fee Simple NMCC
951126 112 4/1/06 1st $9,742.19 0.257% 0.120% Fee Simple NMCC
962144 111 3/1/06 1st $10,933.02 0.257% 0.120% Fee Simple NMCC
962150 78 6/1/03 1st $8,874.78 0.387% 0.250% Fee Simple NMCC
100213 82 10/1/03 1st $177,770.97 0.262% 0.125% Fee Simple NMCC
100214 82 10/1/03 1st $71,172.68 0.262% 0.125% Fee Simple NMCC
100192 116 8/1/06 1st $54,191.00 0.287% 0.150% Fee Simple NMCC
100178 114 6/1/06 1st $54,936.61 0.287% 0.150% Fee Simple NMCC
100209 120 12/1/06 1st $46,390.76 0.287% 0.150% Fee Simple NMCC
100229 83 11/1/03 1st $39,027.19 0.287% 0.150% Fee Simple NMCC
100196 116 8/1/06 1st $37,580.78 0.287% 0.150% Fee Simple NMCC
100118 110 2/1/06 1st $34,193.80 0.337% 0.200% Fee Simple NMCC
100187 79 7/1/03 1st $35,597.07 0.262% 0.125% Leasehold NMCC
100185 114 6/1/06 1st $35,707.56 0.337% 0.200% Fee Simple NMCC
100197 117 9/1/06 1st $30,784.89 0.337% 0.200% Fee Simple NMCC
100195 116 8/1/06 1st $25,840.08 0.337% 0.200% Fee Simple NMCC
100210 120 12/1/06 1st $20,376.21 0.287% 0.150% Fee Simple NMCC
100204 83 11/1/03 1st $18,531.68 0.337% 0.200% Fee Simple NMCC
100170 76 4/1/03 1st $17,638.25 0.337% 0.200% Fee Simple NMCC
100183 114 6/1/06 1st $17,003.60 0.337% 0.200% Fee Simple NMCC
</TABLE>
Page 2 of 3
<PAGE>
<TABLE>
<CAPTION>
Loan Zip Mortgage Original Cut-Off Date
Number Property Address City State Code Rate Balance Balance
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
216807 308 S. Clark Road Cedar Hill TX 75104 9.530% $1,900,000 $1,866,531
100200 2617, 2647, 2667 W. Evans Ave. Denver CO 80219 8.820% $1,700,000 $1,698,438
100211 8725 Calmont Avenue Ft. Worth TX 75041 8.710% $1,560,000 $1,559,095
100212 76, 80 & 90 Park Street Lynn MA 01905 9.230% $1,522,000 $1,519,377
100215 103 Yorkleigh Ave. Jamestown NC 27282 8.780% $1,400,000 $1,399,200
100184 6014 Northwest 23rd Street Oklahoma City OK 73101 9.160% $1,300,000 $1,293,095
100117 4040 Parliament Dr. Alexandria LA 71303 8.050% $1,007,000 $1,000,106
100186 West 161st Street & Ft. Washington Ave. New York NY 10032 9.250% $794,000 $793,379
300001 4520 Arville Street Las Vegas NV 89103 8.520% $3,300,000 $3,273,861
951221 1053 East Whitaker Mill Road Raleigh NC 27604 8.505% $2,250,000 $2,192,440
300005 212 W. Woodlawn Road Charlotte NC 28210 9.690% $10,450,000 $10,397,716
300006 440 Griffith Road Charlotte NC 28210 9.690% $5,200,000 $5,173,983
300017 51 Gulf Breeze Pkwy Gulf Breeze FL 32561 9.920% $5,100,000 $5,080,888
300011 3030 High Point Road Greensboro NC 27403 9.650% $3,350,000 $3,336,945
400005 2055 Rex Road Lake City GA 30260 9.990% $6,000,000 $5,982,074
962355 2401 Cass Road Toledo OH 43614 8.940% $5,600,000 $5,566,003
951325 405 Folse Drive Harahan LA 70123 8.990% $5,500,000 $5,456,914
962354 2040 McCrea Street Alliance OH 44601 9.400% $3,500,000 $3,484,929
400004 550 Flank Road Petersburg VA 23805 9.199% $1,900,000 $1,893,162
<CAPTION>
Remaining
Term to Stated Stated Primary
Loan Maturity Maturity Monthly Admin. Servicing Estate Loan
Number (Months) Date Due Date Payment Fee Rate Fee Rate Interest Seller
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
216807 64 4/1/02 1st $16,639.880.387% 0.250% Fee Simple NMCC
100200 119 11/1/06 1st $14,057.380.287% 0.150% Fee Simple NMCC
100211 119 11/1/06 1st $12,227.990.287% 0.150% Fee Simple NMCC
100212 118 10/1/06 1st $13,013.130.387% 0.250% Fee Simple NMCC
100215 119 11/1/06 1st $11,043.820.287% 0.150% Fee Simple NMCC
100184 114 6/1/06 1st $11,052.340.337% 0.200% Fee Simple NMCC
100117 110 2/1/06 1st $7,424.140.337% 0.200% Fee Simple NMCC
100186 118 10/1/06 1st $6,532.040.337% 0.200% Fee Simple NMCC
300001 112 4/1/06 1st $26,616.990.257% 0.120% Fee Simple NMCC
951221 75 3/1/03 1st $22,163.230.382% 0.245% Fee Simple NMCC
300005 116 8/1/06 1st $98,707.910.262% 0.125% Fee Simple NMCC
300006 116 8/1/06 1st $49,117.810.262% 0.125% Fee Simple NMCC
300017 117 9/1/06 1st $48,946.090.262% 0.125% Fee Simple NMCC
300011 117 9/1/06 1st $31,555.260.312% 0.175% Fee Simple NMCC
400005 79 7/1/03 1st $54,479.750.362% 0.225% Fee Simple NMCC
962355 77 5/1/03 1st $47,265.160.262% 0.125% Fee Simple NMCC
951325 111 3/1/06 1st $46,612.770.317% 0.180% Fee Simple NMCC
962354 78 6/1/03 1st $30,336.440.262% 0.125% Fee Simple NMCC
400004 115 7/1/06 1st $16,204.440.337% 0.200% Fee Simple NMCC
</TABLE>
Footnotes:
(i) Administrative Fee includes the Master Servicing Fee (which
includes the Primary Servicer Fee and the Standby Fee) and the
Trustee Fee.
(ii) The monthly payment steps down to $8,433.02 in the 73rd month of
the Mortgage Loan
(iii) These two Mortgaged Properties secure one Mortgage Loan
evidenced by one Mortgage Note. An original balance was
attributed to each such Mortgaged Property for the purpose of
determining (among other things) a Cut-Off Date LTV Ratio, an U/W
DSCR and a DSCR for each such Mortgaged Property.
Page 3 of 3
<PAGE>
EXHIBIT B-1
FORM OF CERTIFICATE OF AN OFFICER OF
CITICORP REAL ESTATE, INC.
MORTGAGE CAPITAL FUNDING, INC.
Multifamily/Commercial Mortgage Pass-Through Certificates
Series 1996-MC2
Certificate of an Officer of Citicorp Real Estate, Inc.
I, ___________________, a ____________________________ of Citicorp
Real Estate, Inc. ("CREI"), hereby certify as follows:
1. CREI is a corporation duly organized and validly existing under the
laws of the State of Delaware.
2. Attached hereto as Exhibit I are true and correct copies of the
Articles of Incorporation and By-Laws of CREI, which Articles of Incorporation
and By-Laws are on the date hereof, and have been at all times from and
including ______________, 19__, except as amended effective _____________, 19__,
in the case of the Articles of Incorporation, and ____________, 19__, [except as
amended effective _________, 19__,] in the case of the ByLaws, in full force and
effect.
3. To the best of my knowledge, no proceedings looking toward
liquidation or dissolution of CREI are pending or contemplated.
4. Each person listed below is and has been the duly elected and
qualified officer or authorized signatory of CREI and his genuine signature is
set forth opposite his name:
Name Office Signature
- ---- ------ ---------
_________________________ _________________________ ____________________
_________________________ _________________________ ____________________
5. Each person listed above who signed, either manually or by
facsimile signature, (a) the mortgage loan purchase agreement, dated as of
December 11, 1996, between PNC Bank, National Association ("PNC Bank") and CREI,
providing for the purchase by CREI from PNC Bank of certain of the Mortgage
Loans, (b) the mortgage loan purchase agreement, dated as of December 11, 1996,
between NationsBanc Mortgage Capital Corporation ("NMCC") and CREI, providing
for the purchase by CREI from NMCC of certain of the Mortgage Loans, (c) the
mortgage loan purchase agreement, dated as of December 11, 1996, between
Mortgage Capital Funding, Inc. ("MCFI") and CREI, providing for the purchase by
MCFI from CREI of the Mortgage Loans, (d) the Pooling and Servicing Agreement,
dated as of December 1, 1996
<PAGE>
(the "Pooling Agreement"), among MCFI as sponsor, CREI as mortgage loan seller,
NMCC as an additional warranting party, GMAC Commercial Mortgage Corporation as
master servicer and special servicer, LaSalle National Bank as trustee and REMIC
administrator and ABN AMRO Bank N.V. as fiscal agent, (e) the Underwriting
Agreement, dated as of December 11, 1996, among MCFI, Citibank, N.A.
("Citibank") and NationsBanc Capital Markets, Inc. ("NationsBanc"), providing
for the purchase by Citibank and NationsBanc from MCFI of the Class A-1, Class
A-2, Class A-3, Class B, Class C, Class D and Class E Certificates, (f) the
Certificate Purchase Agreement, dated as of December 11, 1996, among MCFI,
Citibank and NationsBanc providing for the purchase by Citibank and NationsBanc
from MCFI of the Class X, Class F, Class G, Class H, Class R-I and Class R-II
Certificates, and (g) any other document delivered prior hereto or on the date
hereof in connection with the transactions contemplated by the foregoing
agreements was, at the respective times of such signing and delivery, duly
authorized or appointed to execute such documents in such capacity, and the
signatures of such persons or facsimiles thereof appearing on such documents are
their genuine signatures.
Capitalized terms used but not otherwise defined herein have the
respective meanings assigned to them in the Pooling Agreement.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this certificate as
of December __, 1996.
By:_________________________________
Name:
Title:
I, _______________________, a _____________________________ of CREI,
hereby certify that ___________________ is duly elected or appointed, as the
case may be, qualified and acting ___________________ of CREI and that the
signature appearing above is such officer's genuine signature.
IN WITNESS WHEREOF, the undersigned has executed this certificate as
of December __, 1996.
By:__________________________________
Name:
Title:
<PAGE>
EXHIBIT B-2
FORM OF CERTIFICATE OF CITICORP REAL ESTATE, INC.
MORTGAGE CAPITAL FUNDING, INC.
Multifamily/Commercial Mortgage Pass-Through Certificates
Series 1996-MC2
Certificate of Citicorp Real Estate, Inc.
In connection with the execution and delivery by Citicorp Real Estate,
Inc. ("CREI") of, and the consummation of the various transactions contemplated
by, (a) the Mortgage Loan Purchase Agreement, dated as of December 11, 1996 (the
"Mortgage Loan Purchase Agreement"), between Mortgage Capital Funding, Inc.
("MCFI") and CREI, providing for the purchase by MCFI from CREI of the Mortgage
Loans, and (b) the Pooling and Servicing Agreement, dated as of December 1, 1996
(the "Pooling Agreement" and, together with the Mortgage Loan Purchase
Agreement, the "Agreements"), among MCFI as sponsor, CREI as mortgage loan
seller, NationsBanc Mortgage Capital Corporation as an additional warranting
party, GMAC Commercial Mortgage Corporation as master servicer and special
servicer, LaSalle National Bank as trustee and REMIC administrator and ABN AMRO
Bank N.V. as fiscal agent, CREI hereby certifies that (i) the representations
and warranties of CREI in the Agreements are true and correct in all material
respects at and as of the date hereof with the same effect as if made on the
date hereof, and (ii) CREI has, in all material respects, complied with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to the date hereof. Capitalized terms used but not
otherwise defined herein have the respective meanings assigned to them in the
Agreements.
Certified this ___ day of December, 1996.
CITICORP REAL ESTATE, INC.
By:
--------------------------
Name:
Title:
<PAGE>
EXHIBIT B-3
FORM OF OPINION OF COUNSEL TO CITICORP REAL ESTATE, INC.
December __, 1996
Mortgage Capital Funding, Inc. Citibank, N.A.
399 Park Avenue 399 Park Avenue
New York, New York 10043 New York, New York 10043
NationsBanc Capital Markets, Inc. Moody's Investors Service, Inc.
NationsBank Corporate Center, 11th Floor 99 Church Street
100 North Tryon Street New York, New York 10007
Mail Code: NC1-007-11-07
Charlotte, North Carolina 28255
Fitch Investors Service, L.P.
One State Street Plaza
New York, New York 10004
Re: Mortgage Capital Funding, Inc.
Multifamily/Commercial Mortgage Pass-Through
Certificates, Series 1996-MC2
--------------------------------------------
Ladies and Gentlemen:
This opinion is being provided to you by the undersigned, as an
Associate General Counsel of Citicorp Real Estate, Inc. ("CREI") pursuant to
Section 7(e) of the Mortgage Loan Purchase Agreement, dated as of December 11,
1996 (the "Purchase Agreement"), between Mortgage Capital Funding, Inc. ("MCFI")
as purchaser and CREI as seller, and the Pooling and Servicing Agreement
referenced therein (together with the Purchase Agreement, the "Agreements")
relating to the sale by CREI of certain mortgage loans and various other related
transactions pursuant to and as contemplated by the Purchase Agreement.
Capitalized terms used but not otherwise defined herein have the meanings set
forth in the Purchase Agreement.
I (or attorneys under my supervision) have examined originals or
copies, certified or otherwise identified to my satisfaction, of such corporate
records of CREI, certificates of public officials, officers of CREI and other
persons and other documents, agreements and
<PAGE>
December __, 1996 Page 2.
instruments and have made such other investigations as I have deemed necessary
or appropriate for purposes of this opinion.
Based upon the foregoing, I am of the opinion that:
1. CREI is a corporation validly existing under the laws of the State of
Delaware, with full power authority under such laws to own its
properties and assets and to conduct its business as contemplated in
the Agreements and to enter into and perform its obligations under the
Agreements.
2. Each Agreement has been duly authorized, executed and delivered by
CREI and, upon due authorization, execution and delivery by the other
parties thereto, will constitute a valid, legal and binding agreement
of CREI, enforceable against CREI in accordance with its terms, except
as enforceability may be limited by bankruptcy, insolvency,
liquidation, receivership, moratorium, reorganization or other similar
laws relating to or affecting the enforcement of creditors rights
generally, (b) general principles of equity and the rights of
creditors of banks in particular, whether enforcement is sought in a
proceeding in equity or at law and (c) public policy considerations
underlying the securities laws, to the extent such public policy
considerations limit the enforceability of the provisions of such
agreement that purport to provide indemnification from securities law
liabilities.
3. Based upon my review of the laws, rules and regulations of the State
of New York and the securities laws, rules and regulations of the
United States which, in my experience, are normally applicable to
transactions of the type provided for by the Agreements, no consent,
approval, authorization or order of any court, governmental agency or
body is required in connection with the execution and delivery by CREI
of the Agreements, except for those consents, approvals,
authorizations or orders that previously have been obtained.
4. Neither the transfer of the Mortgage Loans as provided in the
Agreements, nor the fulfillment of the terms of or the consummation of
any other of the transactions contemplated by the Agreements, will
conflict with or result in a violation of the Articles of
Incorporation or the By-laws of CREI or any agreement or instrument,
order, writ, judgment or decree known to me to which CREI is a party
or is subject.
5. To the best of my knowledge, there are no actions or proceedings
against CREI, pending or overtly threatened in writing before any
court, governmental agency or arbitrator which (i) affect the
enforceability of any of the Agreements or (ii) either individually or
in the aggregate, would result in any material adverse change in the
business, operations, financial condition, properties or assets of
CREI or in any material impairment of any of the right or ability of
CREI to carry on its business substantially as now conducted, or which
would draw into question the validity of any of the Agreements or of
any action to be taken in
<PAGE>
December __, 1996 Page 3.
connection with its obligations contemplated therein, or which would
materially impair its ability to perform under the terms of any of the
Agreements.
The opinions expressed herein are limited to the laws of the State of
New York and the Federal law of the United States.
This opinion is given to you for your sole benefit, and no other
person or entity is entitled to rely hereon without my express written consent.
Very truly yours,
Stephen E. Dietz, Esq.
