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: July 1, 1997
(Date of earliest event reported)
MORTGAGE CAPITAL FUNDING, INC.
(Sponsor)
(Issuer in Respect of
Multifamily/Commercial Mortgage Pass-Through Certificates Series 1997-MC1)
(Exact name of registrant as specified in charter)
Delaware 333-24489 13-3408716
(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) 559-6899
(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 June 20, 1997, a single series of certificates, entitled Mortgage
Capital Funding, Inc., Multifamily/Commercial Mortgage Pass-Through
Certificates, Series 1997-MC1 (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 June 1, 1997, 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, CRIIMI MAE Services Limited Partnership, 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 fifteen 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 J Certificates", the
"Class K 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 158
conventional, fixed-rate, multifamily and commercial, balloon mortgage loans
(the "Mortgage Loans"), having, as of the close of business on June 1, 1997 (the
"Cut-off Date"), an aggregate principal balance of $658,541,674 (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, dated as of June 11, 1997, 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, N.A. and NationsBanc
Capital Markets, Inc. ("NCMI"), as underwriters (the "Underwriters"), pursuant
to an underwriting agreement (the "Underwriting Agreement") dated June 11, 1997,
a copy of which is attached hereto as Exhibit 1.1.
The Class A-1 Certificates have an initial stated principal balance (a
"Certificate Balance") of $108,659,000. The Class A-2 Certificates have an
initial Certificate Balance of $26,341,000. The Class A-3 Certificates have an
initial Certificate Balance of $325,979,171. The Class B Certificates have an
initial Certificate Balance of $39,512,500. The Class C Certificates have an
initial Certificate Balance of $36,219,792. The Class D Certificates have an
initial Certificate Balance of $32,927,083. The Class E Certificates have an
initial Certificate Balance of $13,170,833.
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
1.1 Underwriting Agreement dated June 11, 1997, among
Mortgage Capital Funding, Inc., as Sponsor and Citibank,
N.A. and NationsBanc Capital Markets, Inc., as
Underwriters.
4.1 Pooling and Servicing Agreement dated
as of June 1, 1997, among Mortgage
Capital Funding, Inc., as Sponsor,
Citicorp Real Estate, Inc., as Mortgage
Loan Seller, NationsBanc Mortgage
Capital Corporation, as Additional
Warranting Party, CRIIMI MAE Services
Limited Partnership, as Master Servicer
and Special Servicer, LaSalle National
Bank, as Trustee and REMIC
Administrator and ABN AMRO Bank N.V.,
as Fiscal Agent.
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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/ Anne Galbraith
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Anne Galbraith
Vice President
Dated: July 1, 1997
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Mortgage Capital Funding, Inc.
$582,809,379 (Approximate)
Multifamily/Commercial
Mortgage Pass-Through Certificates, Series 1997-MC1
Class A-1, Class A-2, Class A-3, Class B, Class C, Class D and Class E
Underwriting Agreement
as of June 11, 1997
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"), pursuant to this Underwriting
Agreement (this "Agreement"), the respective classes of Multifamily/Commercial
Mortgage Pass-Through Certificates, Series 1997-MC1 which are identified on
Schedule I hereto (collectively, the "Registered Certificates"), in each case,
having the initial aggregate stated principal amount (the initial "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 June 1, 1997 (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
$658,541,674 (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"; and such
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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"; and 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, dated as of June 1, 1997, (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, CRIIMI MAE
Services Limited Partnership as master servicer (in such capacity, the "Master
Servicer") and 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. 333-24489) on Form S-3, 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
(15) 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).
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(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 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; 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 or on behalf of Citibank
or CREI 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 or on behalf of Citibank specifically for use 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 or on
behalf of NationsBanc or NMCC 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 or on behalf of 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
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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) 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").
(j) 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
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the "Closing Date"). Delivery of each Underwriter's allotment of the Registered
Certificates shall be made to the 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 (3) 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.
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(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
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, has caused any Computational
Materials and ABS Term Sheets (each as defined in Section 9) with respect to the
Registered Certificates, which are or have been 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, if such
filing is subsequent to the date hereof, MCFI 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,
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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 of the Securities Act) 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 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 and, upon the due
authorization, execution and delivery by the other parties thereto,
will constitute a valid, legal and binding
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agreement of MCFI, enforceable against MCFI in accordance with its
terms, except as enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws
relating to or affecting the enforcement of creditors' rights
generally and by general principles of equity, whether enforcement
is sought in a proceeding in equity or at law;
(D) 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;
(E) 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 any 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;
(F) 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 has not been
requested to comment), appeared on their respective faces to be
appropriately responsive in all material respects to the
requirements of the Securities Act 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 has not been requested to comment), 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;
(G) 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;
(H) 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, which
were not described or filed as required; and
(I) This Agreement has been duly authorized, executed and
delivered by MCFI.
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In giving his opinion, counsel to MCFI, Stephen E. Dietz, Esq.,
shall additionally state that, based on his review (or review by
attorneys under his supervision) of, the statements contained in the
Registration Statements or the Prospectus mentioned in Paragraph (F)
above and conferences and telephone conversations with representatives
of CREI, NMCC, PNC Bank, the Underwriters, 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;
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 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 rely
on the opinion of Sidley & Austin referred to in Section 6(b)(iii) below
that relates to the sections of the Prospectus Supplement under the
headings "Certain Federal Income Tax Consequences" and "ERISA
Considerations" and of the accompanying prospectus under the headings
"Material Federal Income Tax Consequences" and "ERISA Considerations".
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 the State of New York and the federal law of the United States.
(iii) One or more opinions, dated the Closing Date, of Sidley &
Austin, 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 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
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as 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, Sidley & Austin,
shall additionally state that, based on conferences and telephone
conversations with representatives of CREI, NMCC, PNC Bank, the
Underwriters, MCFI, the Trustee, the Fiscal Agent, the REMIC
Administrator, 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 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 or statistical information included therein;
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 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 the State of New York and the federal law
of the United States.
(iv) Such Underwriter shall have received copies of all legal
opinion letters delivered by Sidley & Austin to the Rating Agencies in
connection with the issuance of the Registered Certificates, accompanied
in each case by a letter signed by Sidley & Austin stating that such
Underwriter may rely on such opinion letter as if it were addressed to
such Underwriter as of the date thereof;
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(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
(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)(C), 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, the date of the
Prospectus Supplement or other date acceptable to MCFI and
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<PAGE>
the Underwriters, 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(s);
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.
(e) MCFI and the Underwriters shall have received from KPMG Peat
Marwick, certified public accountants, a letter dated June 11, 1997, 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
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<PAGE>
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, 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 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; 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 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.
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<PAGE>
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 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 or covered by the indemnification provided by CREI pursuant to the
Mortgage Loan Purchase Agreement, (iii) any such untrue statement or alleged
untrue statement made in Computational Materials or ABS Term Sheets of either
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 either Underwriter incorporated by reference into the
Registration Statements or Prospectus as a result of any filing pursuant to
Section 5(e), a material fact 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
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<PAGE>
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 reasonably 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
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<PAGE>
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 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 reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time period 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 thereby in connection with investigating or
defending any such action or claim as such expenses are incurred.
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<PAGE>
(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 thereby 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 clause (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 clause (i) or clause (ii) above 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; 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. 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
the indemnified party.
(iv) If the indemnification provided in clause (i) or clause (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
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in respect thereof) in such proportion as is appropriate to reflect both
the relative benefits received by Citibank on the one hand and NationsBanc
on the other, in each case as Underwriter, from the offering of the
Registered Certificates, and the relative fault of Citibank on the one
hand and NationsBanc 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 each 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 Citibank on the one hand or NationsBanc 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 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 sold, 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 clauses (i), (iii) and (iv)
above 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 clauses (ii), (iii) and (iv) above
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 May 21, 1997 (the "Agreement
Among Underwriters"), between the 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 (5) complete
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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 (4) 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 (4) 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;
(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
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<PAGE>
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.
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
-20-
<PAGE>
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 Underwriters pursuant to or as
contemplated by this Section 9 or the omission to state therein
-21-
<PAGE>
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
-22-
<PAGE>
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 forth in this
Section 11, the Closing Date for the Registered Certificates shall be postponed
for such period, not exceeding seven (7) 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.
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 (other than the Agreement Among Underwriters). 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
-23-
<PAGE>
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.; and 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; or, in each
such case, to such other address as may be forwarded by any such party to the
other parties hereto in writing.
-24-
<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 Underwriters.
Very truly yours,
MORTGAGE CAPITAL FUNDING, INC.
By: /s/ Anne Galbraith
----------------------
Name: Anne Galbraith
Title: Vice President
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
NATIONSBANC CAPITAL MARKETS, INC.
By: /s/ David A. Gertner
---------------------------------
Name: David A. Gertner
Title: Vice President
CITIBANK, N.A.
By: /s/ Anne Galbraith
---------------------------------
Name: Anne Galbraith
Title: Authorized Signatory
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<PAGE>
SCHEDULE I
As used in this Agreement, the term "Registration Statements" refers to the
registration statement Nos. 33-25068, 33-63924 and 333-24489 filed by MCFI on
Form S-11, Form S-3 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 1997-MC1,
Class A-1, Class A-2, Class A-3, Class B, Class C, Class D and Class E
Certificates.
Underwriting Agreement, dated as of June 11, 1997
Cut-off Date: June 1, 1997
<TABLE>
<CAPTION>
Portion of Class Portion of Class
Principal Balance of Principal Balance of
Initial Class Class to be Class to be
Class Principal Purchased by Purchased by Initial Purchase
Designation Balance (1) Citibank(1) NationsBanc(1) Pass-Through Rate Price(2) Rating(3)
- ----------- ------------- -------------------- -------------------- ----------------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
Class A-1 $108,659,000 $49,617,720 $59,041,280 7.154% 101.000% Aaa/AAA/AAA
Class A-2 $26,341,000 $12,028,275 $14,312,725 7.223% 101.000% Aaa/AAA/AAA
Class A-3 $325,979,171 $148,854,151 $177,125,020 7.288% 101.000% Aaa/AAA/AAA
Class B $39,512,500 $18,042,869 $21,469,631 7.334% 101.000% Aa2/AA/AA
Class C $36,219,792 $16,539,297 $19,680,495 7.413% 101.000% A2/A/A
Class D $32,927,083 $15,035,724 $17,891,359 7.531% 101.000% Baa2/BBB/NR
Class E $13,170,833 $6,014,290 $7,156,543 7.915% 101.000% Baa3/NR/NR
</TABLE>
- ------------------------
(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 Moody's Investors Service, Inc. ("Moody's"), Fitch Investors
Service, L.P. and Duff & Phelps Credit Rating Co. (except with respect to
the Class E Certificates, which are rated solely by Moody's).
Closing Time, Date and Location: 10:00 a.m. New York City time on June 20, 1997
at the offices of Sidley & Austin, 875 Third Avenue, New York, New York 10022.
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 (or in the case of Class A-3, in minimum denominations of
initial principal balance of $25,000) and integral multiples of $1 in excess
thereof.
S-1
EXECUTION COPY
MORTGAGE CAPITAL FUNDING, INC.,
Sponsor,
CITICORP REAL ESTATE, INC.,
Mortgage Loan Seller,
NATIONSBANC MORTGAGE CAPITAL CORPORATION,
Additional Warranting Party,
CRIIMI MAE SERVICES LIMITED PARTNERSHIP,
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 June 1, 1997
---------------------------------
$658,541,673.58
Multifamily/Commercial Mortgage Pass-Through Certificates
Series 1997-MC1
<PAGE>
TABLE OF CONTENTS
-----------------
Section Page
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ARTICLE I
DEFINITIONS; CERTAIN CALCULATIONS IN RESPECT OF
THE MORTGAGE POOL AND THE CERTIFICATES
1.01. Defined Terms ...................................................... 4
1.02. Certain Calculations in Respect of the Mortgage Pool ............... 45
1.03. Cross-Collateralized Mortgage Loans ................................ 46
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES;ORIGINAL ISSUANCE OF CERT
2.01. Conveyance of Mortgage Loans ....................................... 48
2.02. Acceptance of REMIC I by Trustee ................................... 51
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 ..... 53
2.04. Representations and Warranties of the Sponsor ...................... 54
2.05. Representations and Warranties of the Mortgage Loan Seller
and the Additional ................................................ 55
2.06. Representations and Warranties of the Master Servicer and
the Special Servicer ............................................... 64
2.07. Representations and Warranties of the Trustee ...................... 66
2.08. Representations and Warranties of the Fiscal Agent ................. 67
2.09. Issuance of the Class R-I Certificates; Creation of the
REMIC I Regular Interests .......................................... 68
2.10. Conveyance of REMIC I Regular Interests; Acceptance of
REMIC II by the Trustee ............................................ 68
2.11. Issuance of the REMIC II Certificates .............................. 69
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
3.01. Administration of the Mortgage Loans ............................... 70
3.02. Collection of Mortgage Loan Payments ............................... 71
3.03. Collection of Taxes, Assessments and Similar
Items; Servicing Accounts; Reserve Accounts ........................ 71
3.04. Certificate Account and Distribution Account ....................... 73
i
<PAGE>
Section Page
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3.05. Permitted Withdrawals From the Certificate Account
and the Distribution Account ....................................... 75
3.06. Investment of Funds in the Certificate Account and
the REO Account ................................................... 79
3.07. Maintenance of Insurance Policies; Errors and Omissions and
Fidelity Coverage .................................................. 81
3.08. Enforcement of Due-On-Sale Clauses; Assumption
Agreements; Subordinate Financing .................................. 83
3.09. Realization Upon Defaulted Mortgage Loans .......................... 85
3.10. Trustee to Cooperate; Release of Mortgage Files .................... 88
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 ......... 89
3.12. Inspections; Collection of Financial Statements .................... 94
3.13. Annual Statement as to Compliance .................................. 95
3.14. Reports by Independent Public Accountants .......................... 96
3.15. Access to Certain Information ...................................... 96
3.16. Title to REO Property; REO Account ................................. 97
3.17. Management of REO Property ......................................... 98
3.18. Sale of Mortgage Loans and REO Properties .......................... 101
3.19. Additional Obligations of the Master Servicer and
the Special Servicer ............................................... 104
3.20. Modifications, Waivers, Amendments and Consents .................... 107
3.21. Transfer of Servicing Between Master Servicer and
Special Servicer; Record Keeping ................................... 109
3.22. Sub-Servicing Agreements ........................................... 111
3.23. Designation of Special Servicer by the
Majority Certificateholder of the Controlling Class ................ 113
3.24. Extension Adviser; Elections ....................................... 114
3.25. Limitation on Liability of Extension Adviser ....................... 115
3.26. Duties of Extension Adviser ........................................ 115
3.27. Special Servicer to Cooperate with the Extension Adviser ........... 116
3.28. Confidentiality .................................................... 116
3.29. No Solicitation of Prepayments ..................................... 117
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS AND RELATED MATTERS
4.01. Distributions on the Certificates .................................. 118
4.02. Statements to Certificateholders; Certain Reports by the Master
Servicer and the Special Servicer .................................. 124
4.03. P&I Advances ....................................................... 132
4.04. Allocation of Realized Losses and Additional Trust Fund Expenses to
the Sequential Pay Certificates .................................... 134
ii
<PAGE>
Section Page
- ------- ----
4.05. Deemed Distributions on, and Allocations of Realized
Losses and Additional Trust Fund Expenses to, the
REMIC I Regular Interests .......................................... 134
ARTICLE V
THE CERTIFICATES
5.01. The Certificates ................................................... 136
5.02. Registration of Transfer and Exchange of Certificates .............. 136
5.03 Book-Entry Certificates ............................................ 143
5.04. Mutilated, Destroyed, Lost or Stolen Certificates .................. 144
5.05. Persons Deemed Owners .............................................. 144
5.06 Certification by Certificate Owners ................................ 144
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 ....................... 146
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 146
6.03. Limitation on Liability of the Sponsor, the Master
Servicer, the Special Servicer, the REMIC Administrator and Others . 147
6.04. Master Servicer, Special Servicer and REMIC Administrator Not
to Resign .......................................................... 147
6.05. Rights of the Sponsor and the Trustee in Respect of the
Master Servicer, the Special Servicer and the REMIC Administrator .. 148
ARTICLE VII
DEFAULT
7.01. Events of Default .................................................. 150
7.02. Trustee to Act; Appointment of Successor ........................... 153
7.03. Notification to Certificateholders ................................. 154
7.04. Waiver of Events of Default ........................................ 154
7.05. Additional Remedies of Trustee Upon Event of Default ............... 155
iii
<PAGE>
Section Page
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ARTICLE VIII
CONCERNING THE TRUSTEE
8.01. Duties of Trustee .................................................. 156
8.02. Certain Matters Affecting the Trustee and the Fiscal Agent ......... 157
8.03. Trustee Not Liable for Validity or Sufficiency of
Certificates or Mortgage Loans ..................................... 158
8.04. Trustee and Fiscal Agent May Own Certificates ...................... 159
8.05. Fees of Trustee; Indemnification of Trustee and the Fiscal Agent ... 159
8.06. Eligibility Requirements for Trustee ............................... 159
8.07. Resignation and Removal of the Trustee ............................. 160
8.08. Successor Trustee .................................................. 161
8.09. Merger or Consolidation of Trustee or Fiscal Agent ................. 162
8.10. Appointment of Co-Trustee or Separate Trustee ...................... 162
8.11. Appointment of Custodians .......................................... 163
8.12. Access to Certain Information ...................................... 163
8.13. The Fiscal Agent ................................................... 165
8.14. Filings with the Securities and Exchange Commission ................ 165
ARTICLE IX
TERMINATION
9.01. Termination Upon Repurchase or Liquidation of All Mortgage Loans ... 167
9.02. Additional Termination Requirements ................................ 169
ARTICLE X
ADDITIONAL REMIC PROVISIONS
10.01. REMIC Administration ............................................... 170
10.02. Sponsor, Master Servicer, Special Servicer, Trustee and Fiscal
Agent to Cooperate with REMIC Administrator ........................ 173
10.03. Fees of the REMIC Administrator .................................... 173
10.04. Use of Agents ...................................................... 173
iv
<PAGE>
Section Page
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ARTICLE XI
MISCELLANEOUS PROVISIONS
11.01. Amendment .......................................................... 174
11.02. Recordation of Agreement; Counterparts ............................. 175
11.03. Limitation on Rights of Certificateholders ......................... 176
11.04. Governing Law ...................................................... 176
11.05. Notices ............................................................ 177
11.06. Severability of Provisions ......................................... 177
11.07. Successors and Assigns; Beneficiaries .............................. 177
11.08. Article and Section Headings ....................................... 178
11.09. Notices to the Rating Agencies ..................................... 178
v
<PAGE>
EXHIBIT A-1 Form of Class X Certificate
EXHIBIT A-2 Form of Class [A-1][A-2][A-3] Certificate
EXHIBIT A-3 Form of Class [B][C][D][E] Certificate
EXHIBIT A-4 Form of Class [F][G][H][J][K] Certificate
EXHIBIT A-5 Form of Class [R-I][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
Transfers of Definitive Certificates [For QIBs]
EXHIBIT B-4 Form II of Transferee Certificate Pursuant to Section 5.02(b) for
Transfers of Definitive Certificates [For Institutional
Accredited Investors]
EXHIBIT B-5 Form I of Transferee Certificate Pursuant to Section 5.02(b) for
Transfers of Interests in Book-Entry Certificates [For QIBs]
EXHIBIT B-6 Form II of Transferee Certificate Pursuant to Section 5.02(b) for
Transfers of Interests in Book-Entry Certificates [For
Institutional Accredited Investors]
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
SCHEDULE I Mortgage Loan Schedule
SCHEDULE II Sub-Servicing Agreements in Effect as of the Closing Date
vi
<PAGE>
This Pooling and Servicing Agreement (this "Agreement"), is dated
and effective as of June 1, 1997, among MORTGAGE CAPITAL FUNDING, INC., as
Sponsor, CITICORP REAL ESTATE, INC., as Mortgage Loan Seller, NATIONSBANC
MORTGAGE CAPITAL CORPORATION, as Additional Warranting Party, CRIIMI MAE
SERVICES LIMITED PARTNERSHIP, 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-Major Variable(1) $108,648,134.1000
A-1-Minor 7.154% per annum $ 10,865.9000
A-2-Major Variable(1) $26,338,365.9000
A-2-Minor 7.223% per annum $ 2,634.1000
A-3-Major Variable(1) $325,946,573.0829
A-3-Minor 7.288% per annum $ 32,597.9171
B-Major Variable(1) $39,508,548.7500
B-Minor 7.334% per annum $ 3,951.2500
C-Major Variable(1) $36,216,170.0208
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C-Minor 7.413% per annum $ 3,621.9792
D-Major Variable(1) $32,923,790.2917
D-Minor 7.531% per annum $ 3,292.7083
E-Major Variable(1) $13,169,515.9167
E-Minor 7.915% per annum $ 1,317.0833
F-Major Variable(1) $39,508,548.7500
F-Minor 7.452% per annum $ 3,951.2500
G-Major Variable(1) $ 6,584,757.4584
G-Minor 6.000% per annum $ 658.5416
H-Major Variable(1) $13,169,515.9167
H-Minor 6.000% per annum $ 1,317.0833
J-Major Variable(1) $ 9,877,137.1875
J-Minor 6.000% per annum $ 987.8125
K-Major Variable(1) $ 6,584,762.0379
K-Minor 6.000% per annum $ 658.5421
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(1) Calculated in accordance with the definition of "REMIC I Remittance
Rate".
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 constituting "regular interests" in REMIC II
(the "REMIC II Regular Certificates"). Determined solely for purposes of
satisfying Treasury regulation section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for each Class of REMIC II Regular Certificates 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
----------- ----------------- -----------------
Class X Variable (1) N/A(2)
Class A-1 7.154% per annum $ 108,659,000.00
Class A-2 7.223% per annum $ 26,341,000.00
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Class A-3 7.288% per annum $ 325,979,171.00
Class B 7.334% per annum $ 39,512,500.00
Class C 7.413% per annum $ 36,219,792.00
Class D 7.531% per annum $ 32,927,083.00
Class E 7.915% per annum $ 13,170,833.00
Class F 7.452% per annum $ 39,512,500.00
Class G 6.000% per annum $ 6,585,416.00
Class H 6.000% per annum $ 13,170,833.00
Class J 6.000% per annum $ 9,878,125.00
Class K 6.000% per annum $ 6,585,420.58
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(1) Calculated in accordance with the definition of "Pass-Through Rate".
(2) The Class X Certificates will not have a Class Principal Balance;
rather, such Class of Certificates will accrue interest as provided
herein on an aggregate notional amount (a "Class Notional Amount") that
is, as of any date of determination, equal to the then aggregate
Uncertificated Principal Balance of REMIC I Regular Interest A-1-Major,
REMIC I Regular Interest A-2-Major, REMIC I Regular Interest A-3-Major,
REMIC I Regular Interest B-Major, REMIC I Regular Interest C-Major,
REMIC I Regular Interest D-Major, REMIC I Regular Interest E-Major,
REMIC I Regular Interest F-Major, REMIC I Regular Interest G-Major,
REMIC I Regular Interest H-Major, REMIC I Regular Interest J-Major and
REMIC I Regular Interest K-Major.
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, 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 or Class
Notional Amount, as the case may be, of such Class of Certificates outstanding
immediately prior to such Distribution Date. The Accrued Certificate Interest in
respect of any Class of REMIC II Regular Certificates 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 Fee
Rate.
"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
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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 the 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 Mortgage Loan documents are held and/or
any REO Properties are located, (d) such other state and 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 to be performed pursuant to the
terms of this Agreement, a narrative appraisal complying with USPAP (or, 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, a limited appraisal and a summary
report) that indicates the "market value" of the subject property, as defined in
12 C.F.R. ss.225.62(g), and is conducted by a Qualified Appraiser.
"Appraisal Reduction Amount": With respect to any Required
Appraisal Loan, an amount (calculated as of the Determination Date immediately
following the later of (a) the date on which the most recent Appraisal that
meets the requirements of Section 3.19(b) in respect of such Required Appraisal
Loan, was obtained by the Master Servicer or the Special Servicer, as the case
may be, and (b) the earliest of the relevant dates in respect of such Required
Appraisal Loan specified in the first sentence of Section 3.19(b) hereof) equal
to the excess, if any, of (x) 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 sum of
the related Net Mortgage Rate and the Trustee Fee 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
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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 (y) 90% of an amount equal to (i) the
Appraised Value of the related Mortgaged Property or REO Property, as
applicable, as determined by the most recent relevant Appraisal acceptable for
purposes of Section 3.19(b) hereof, net of (ii) the amount of any liens on such
property (other than in respect of items described in clause (a)(v) above) that
are prior to the lien of the Required Appraisal Loan. Notwithstanding the
foregoing, 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 Required Appraisal Loan will be deemed to equal 30% of
the Stated Principal Balance of such Required Appraisal Loan; provided that upon
receipt of an Appraisal acceptable for purposes of Section 3.19(b) hereof, the
Appraisal Reduction Amount for such Required Appraisal Loan will be recalculated
in accordance with the preceding sentence.
"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 Monthly 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 Monthly Payment (other
than a delinquent Balloon Payment) is due for such Due Date, the scheduled
monthly payment of principal and/or interest deemed to be due in respect thereof
on such Due Date equal to the amount that would have been due in respect of such
Mortgage Loan on such Due Date if it had been required to continue to accrue
interest in accordance with its terms, and to pay principal in accordance with
the amortization schedule (if any), in effect immediately prior to, and without
regard to the occurrence of, its most recent scheduled maturity date (as such
terms and amortization schedule may have been modified, and such maturity date
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 Monthly Payment (or, in the case
of a Balloon Mortgage Loan described in the preceding sentence of this
definition, the Assumed Monthly Payment) that was due in respect of the related
Mortgage Loan on the last Due Date prior to its becoming an REO Loan.
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"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 Monthly Payments due and/or Assumed
Monthly 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) 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) Prepayment Premiums, (iv) 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), and (v) any amounts deposited in the Distribution
Account in error; provided that the Available Distribution Amount for the Final
Distribution Date, shall be calculated without regard to clauses (b)(i) and
(b)(ii) of this definition.
"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 Monthly Payment due on its
Stated Maturity Date is larger than the Monthly 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 Monthly 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 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.
"Bank": As defined in Section 2.07.
"Bankruptcy Code": The federal Bankruptcy Code, as amended from
time to time (Title 11 of the United States Code).
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"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 1997-MC1, 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 1997-MC1".
"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, the hypothetical or notional principal amount on which such
Certificate accrues interest, which, as of any date of determination, is 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.
"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.
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"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register; provided 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 in connection with the election,
removal or replacement of an Extension Adviser pursuant to Section 3.24, 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 Certificate Registrar 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.
"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-2 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-2 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-3
attached hereto, and evidencing a "regular interest" in REMIC II for purposes of
the REMIC Provisions.
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"Class C Certificate": Any one of the Certificates with a "Class
C" 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 D Certificate": Any one of the Certificates with a "Class
D" 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 E Certificate": Any one of the Certificates with a "Class
E" 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 F Certificate": Any one of the Certificates with a "Class
F" 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 G Certificate": Any one of the Certificates with a "Class
G" 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 H Certificate": Any one of the Certificates with a "Class
H" 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 J Certificate": Any one of the Certificates with a "Class
J" 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 K Certificate": Any one of the Certificates with a "Class
K" 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 Notional Amount": The aggregate hypothetical or notional
principal amount on which the Class X Certificates collectively accrue interest
equal to the aggregate of the Uncertificated Principal Balances of the Major
REMIC I Regular Interests outstanding from time to time (rounded to the nearest
whole dollar during the period up to and including the initial Distribution
Date).
"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.
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"Class Principal Balance": The aggregate principal amount of any
Class of Sequential Pay Certificates outstanding as of any date of
determination. As of the Closing Date, the Class Principal Balance of each such
Class of Certificates shall equal the Initial Class Principal Balance thereof.
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-5 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-5 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 a "regular interest" in REMIC II for purposes of the REMIC
Provisions.
"Closing Date": June 20, 1997.
"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.
"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 outstanding 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 adminis tered, which office at the date of
the execution of this Agreement is located at 135 South LaSalle Street, Suite
1740, Chicago, Illinois 60674-4107.
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"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).
"Corresponding Major REMIC I Regular Interest": With respect to
any Class of Sequential Pay Certificates, the Major REMIC I Regular Interest
that has, without regard to the reference to "Major", the same alphabetical
(and, if applicable, numerical) designation as the Class designation for such
Class Sequential Pay Certificates.
"Corresponding Minor REMIC I Regular Interest": With respect to
any Class of Sequential Pay Certificates, the Minor REMIC I Regular Interest
that has, without regard to the reference to "Minor", the same alphabetical
(and, if applicable, numerical) designation as the Class designation for such
Class of Sequential Pay Certificates.
"CREI": Citicorp Real Estate, Inc. or its successor in interest.
"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".
"CREI Mortgage Loan Purchase Agreement": The Mortgage Loan
Purchase Agreement, dated as of June 11, 1997, between the Sponsor and CREI.
"Cross-Collateralized Mortgage Loan": Any Mortgage Loan that
pursuant to Section 1.03 is deemed to be, or by its terms actually is,
cross-collateralized and cross-defaulted with one or more other Mortgage Loans.
"Current Principal Distribution Amount": With respect to any
Distribution Date, an amount (calculated in accordance with Section 1.02) equal
to the aggregate of, without duplication:
(a) the principal portions of all Monthly Payments (other than
Balloon Payments) and any Assumed Monthly Payments due or deemed due, as
the case may be, in respect of the Mortgage Loans 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 Monthly Payment (other than a
Balloon Payment) due, or the principal portion of any
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Assumed Monthly 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 Monthly Payment
(other than a Balloon Payment) due, or of the principal portion of any
Assumed Monthly Payment deemed due, in respect of any such Mortgage Loan
on a Due Date during or prior to the related Collection Period and not
previously 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 Monthly Payment (other than a Balloon
Payment) due, or of the principal portion of any Assumed Monthly Payment
deemed due, in respect of any such REO Loan or the predecessor 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, the Additional
Warranting Party or an Affiliate of any of them.
"Cut-off Date": June 1, 1997.
"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.
"DCR": Duff & Phelps Credit Rating Co. or its successor in
interest. If neither such rating agency nor any successor remains in existence,
"DCR" 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 Duff & Phelps Credit Rating Co. referenced herein shall be deemed to refer to
the equivalent ratings of the party so designated.
"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
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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 Property which had become REO Property, substantially in the form, and
including such additional information in respect of each such Mortgage Loan, as
is contemplated on page B-5 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 Special Servicer (or any
Sub-Servicer on behalf of the Special Servicer) shall not be considered to
Directly Operate an REO Property solely because the
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Special Servicer (or any Sub-Servicer on behalf of the Special Servicer)
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 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, for any Distribution Date, the Accrued
Certificate Interest in respect of such Class of Certificates for such
Distribution Date, reduced (to not less than zero) by that portion, if any, of
the Net Aggregate Prepayment Interest Shortfall for such Distribution Date
allocated to such Class of Certificates 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 the particular 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.
"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 1997-MC1".
"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
July 1997.
"Distribution Date Statement": As defined in Section 4.02(a).
"Document Defect": As defined in Section 2.02(e).
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"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.
"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 most recently ended calendar month
in order to produce the actual amount of interest accrued (or, if such Mortgage
Loan or REO Loan is prepaid, in whole or in part, or otherwise liquidated during
such calendar month, that otherwise would have accrued) in respect of such
Mortgage Loan at its Mortgage Rate (net of the Administrative Fee Rate) during
such calendar month.
"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 are rated no less than "Aa2" by
Moody's, "AA" by Fitch and, if rated thereby, "A" by DCR (if the deposits are to
be held in the account for more than 30 days), or the short-term unsecured debt
obligations of which are rated no less than "P-1" by Moody's, "F-1+" by Fitch
and, if rated thereby, "D-1" by DCR (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
corporate 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 corporate 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 C.F.R. ss. 9.10(b), or (iv) 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.
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"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 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 Fitch Investors Service, L.P. herein referenced shall be deemed to refer to
the equivalent ratings of the party so designated.
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"FNMA": Federal National Mortgage Association or any successor.
"Ground Lease": The ground lease pursuant to which any Mortgagor
holds a leasehold interest in the related Mortgaged Property.
"Group": As defined in Section 1.03.
"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 by loan numbers N128, N129, N130, N131, N132, N133, N134,
N135, N136, N137, N138 and N139 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
Cutoff Date, showing the original and the revised terms thereof, substantially
in the form, and including 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 received, and Liquidation Expenses incurred, 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, substantially in the form, and including 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.
"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
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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 Notional Amount": With respect to the Class X
Certificates, the initial Class Notional Amount thereof as of the Closing Date
equal to $658,475,819.
"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 $108,659,000.00
Class A-2 $26,341,000.00
Class A-3 $325,979,171.00
Class B $39,512,500.00
Class C $36,219,792.00
Class D $32,927,083.00
Class E $13,170,833.00
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Class F $39,512,500.00
Class G $6,585,416.00
Class H $13,170,833.00
Class J $9,878,125.00
Class K $6,585,420.58
"Initial Pool Balance": The aggregate Cut-off Date Balance of all
the Mortgage Loans included in the Trust Fund as of the Closing Date.
"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, as the case may be.
"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.
"Interest Accrual Period": With respect to each REMIC I Regular
Interest and each Class of REMIC II Regular Certificates, for any Distribution
Date, the calendar month immediately preceding the month in which such
Distribution Date occurs.
"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 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 Monthly Payment
(other than a Balloon Payment) or an Assumed Monthly Payment in 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
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of a Monthly Payment (other than a Balloon Payment) or an Assumed Monthly
Payment in respect of the related Mortgage Loan or of an Assumed Monthly 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 Penalty 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 (x) 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, (y) by the Majority
Certificateholder of the Controlling Class, the Master Servicer or the Special
Servicer pursuant to Section 3.18 or (z) 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%.
"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
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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.
"Major REMIC I Regular Interests": Collectively, REMIC I Regular
Interest A-1- Major, REMIC I Regular Interest A-2-Major, REMIC I Regular
Interest A-3-Major, REMIC I Regular Interest B-Major, REMIC I Regular Interest
C-Major, REMIC I Regular Interest D-Major, REMIC I Regular Interest E-Major,
REMIC I Regular Interest F-Major, REMIC I Regular Interest G-Major, REMIC I
Regular Interest H-Major, REMIC I Regular Interest J-Major and REMIC I Regular
Interest K-Major.
"Master Servicer": CRIIMI MAE Services Limited Partnership, its
successor in interest, 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 that occurs
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.
"Master Servicer Remittance Date": The Business Day immediately
preceding each Distribution Date.
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"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 0.5 basis points (0.005%)
less than the Administrative Fee Rate specified for such Mortgage Loan in the
Mortgage Loan Schedule.
"Minor REMIC I Regular Interests": Collectively, REMIC I Regular
Interest A-1- Minor, REMIC I Regular Interest A-2-Minor, REMIC I Regular
Interest A-3-Minor, REMIC I Regular Interest B-Minor, REMIC I Regular Interest
C-Minor, REMIC I Regular Interest D-Minor, REMIC I Regular Interest E-Minor,
REMIC I Regular Interest F-Minor, REMIC I Regular Interest G-Minor, REMIC I
Regular Interest H-Minor, REMIC I Regular Interest J-Minor and REMIC I Regular
Interest K-Minor.
"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, including, without
limitation, a Balloon Payment, 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) and applicable law.
"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
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Servicer, the Special Servicer and the REMIC Administrator, and specific 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 1.03 and 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 1997-MC1, 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 copies of any
intervening assignments thereof showing a complete chain
of
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<PAGE>
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);
(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;
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<PAGE>
(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;
(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;
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<PAGE>
(xi) whether the Mortgagor's interest in the related Mortgaged
Property is a leasehold estate;
(xii) whether it is a CREI Mortgage Loan or an NMCC Mortgage Loan; and
(xiii) whether the Mortgage Loan is a Cross-Collateralized Mortgage
Loan and, if so, a reference to the other Mortgage Loans that,
together with such Mortgage Loan, constitute a Group.
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; provided that, in the case of the Mortgage Loan identified
on the Mortgage Loan Schedule by loan number C001 (Rihga Royal Hotel Ground
Lease), the related Mortgaged Property consists of a parcel of land subject to a
ground lease between the related Mortgagor and the owner of a hotel situated on
the parcel, but neither the hotel nor any other improvements or personal
property located thereon represent security for such Mortgage Loan; and
provided, further, that, in the case of the Mortgage Loan identified on the
Mortgage Loan Schedule by loan number C063 (Webster Hall Apartments), the
related Mortgaged Property consists of the top 11 floors of a 12 floor mixed use
commercial and residential complex (such top 11 floors being utilized for rental
apartments) and a portion of an adjacent parking garage, but does not consist of
the land or any other portion of the complex. 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.
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<PAGE>
"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.
"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 remitted by the Master Servicer for
deposit 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, but only 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".
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<PAGE>
"NMCC Mortgage Loan Purchase Agreement": The Mortgage Loan
Purchase Agreement, dated as of June 11, 1997, between CREI and NMCC.
"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, as determined by the
Master Servicer or, if applicable, the Trustee or the Fiscal Agent, in its
reasonable and good faith judgment, 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, as
determined by the Master Servicer, the Special Servicer or, if applicable, the
Trustee or the Fiscal Agent, in its reasonable and good faith judgment, 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, Class J, Class K 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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<PAGE>
"Partnership": As defined in Section 2.06.
"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
hereto. With respect to the Class X Certificates, for any Distribution Date, the
excess, if any, of (a) the REMIC I Remittance Rate applicable to each Major
REMIC I Regular Interest (i.e., the Weighted Average Effective Net Mortgage
Rate) for such Distribution Date, over (b) the weighted average of the
respective fixed REMIC I Remittance Rates applicable to the Minor REMIC I
Regular Interests, weighted on the basis of the respective Uncertificated
Principal Balances of such Minor REMIC I Regular Interests 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 Certifi cates; 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; ninth, the
Class J Certificates; tenth, the Class K Certificates; and last, the respective
Classes of Residual Certificates.
"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 Moody's, "AAA" by Fitch and, if rated thereby, "AAA"
by DCR (or, if not rated by DCR, otherwise acceptable thereto as
confirmed in writing);
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(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 are
rated "Aaa" by Moody's, "AAA" by Fitch and, if rated thereby, "AAA" by
DCR (or, if not rated by DCR, otherwise acceptable thereto as confirmed
in writing) or (b) the short-term unsecured debt obligations of such
bank or trust company are rated no less than "P-1" by Moody's, "F-1+" by
Fitch and, if rated thereby, "D-1+" by DCR (or, if not rated by DCR,
otherwise acceptable thereto as confirmed in writing) or (c) if both
such long-term and short-term unsecured debt obligations have been rated
by any 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 no less than "P-1" by Moody's,
"F-1+" by Fitch and, if rated thereby, "D-1+" by DCR (or, if not rated
by DCR, otherwise acceptable thereto as confirmed in writing); 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;
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 either a Disqualified Organization or a Non-United States Person.
"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.
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"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 and Trustee 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 (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
Maryland, 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
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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 (without regard to
any Prepayment Premium that may have been collected) 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
June 11, 1997, to the prospectus dated May 29, 1997, 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 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 DCR, 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
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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 (other than any Default Interest)
so forgiven.
With respect to any Mortgage Loan as to which the Mortgage Rate
thereon has been permanently reduced and not recaptured for any period in
connection with a bankruptcy or similar proceeding involving the related
Mortgagor or a modification, waiver or amendment of such Mortgage Loan granted
or agreed to by the Master Servicer or Special Servicer pursuant to Section
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 Distribu tion 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. If The Wall Street Journal
ceases to publish such "prime rate", then the Trustee, in its sole discretion,
shall select an equivalent publication that publishes such "prime rate"; and if
such "prime rate" is no longer generally published or is limited, regulated or
administered by a governmental or quasi-governmental body, then the Trustee
shall select a comparable interest rate index. In either case, such selection
shall be made by the Trustee in its sole discretion and the Trustee shall notify
the Master Servicer and the Special Servicer in writing of its selection.
"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
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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, Escrow Payments and Reserve Funds 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 24 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.
"REMIC I Remittance Rate": With respect to any Major REMIC I
Regular Interest, for any Distribution Date, the Weighted Average Effective Net
Mortgage Rate for such Distribution Date. With respect to any Minor REMIC I
Regular Interest, for any Distribution Date, the fixed rate per annum specified
as such in respect of such Minor REMIC I Regular Interest in the Preliminary
Statement hereto.
"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
published rulings, notices and announcements 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 1997-MC1".
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"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 each 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 Monthly Payment and otherwise to
have the same terms and conditions as the predecessor 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 predecessor Mortgage Loan as of the date of the
related REO Acquisition. In addition, all Monthly Payments (other than any
Balloon Payment), Assumed Monthly Payments (in the case of a Balloon Mortgage
Loan delinquent in respect of its Balloon Payment) and other amounts due and
owing, or deemed to be due and owing, in respect of the predecessor 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 on behalf of the Trustee 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, rents, profits and proceeds 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).
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"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), DCR ("A" or
better), Fitch ("A" or better), Standard & Poor's Ratings Services, a Division
of the McGraw-Hill Companies, Inc. ("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 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
officer assigned to the Asset-Backed Securities Trust Services Group, any vice
president, any assistant vice president, any assistant secretary, any assistant
treasurer, 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 or any Certificate Registrar (other than the Trustee), 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.
"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, Class H, Class J or Class K 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.
"Servicing File": Any documents (other than documents required to
be part of the related Mortgage File), including, without limitation, the
related environmental site assessment
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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 for which such Person is responsible hereunder: (a) in accordance
with the higher standard of (i) 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 other third parties, and (ii) the
same manner in which, and with the same care, skill, prudence and diligence with
which, the Master Servicer or the Special Servicer, as the case may be,
generally services comparable mortgage loans or assets, as applicable, owned by
it; (b) with a view to the timely collection of all Monthly Payments of
principal and interest under the Mortgage Loans or, if a Mortgage Loan comes
into and continues in default and if, in the good faith and reasonable judgment
of the Special Servicer, no satisfactory arrangements can be made for the
collection of the delinquent payments, the maximization of the recovery on such
Mortgage Loan to the Certificateholders (as a collective whole) on a present
value basis (the relevant discounting of anticipated collections that will be
distributable to Certificateholders to be performed at the related Net Mortgage
Rate); and (c) 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 any 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.
"Special Servicer": CRIIMI MAE Services Limited Partnership, its
successor in interest, or any successor special servicer appointed as herein
provided.
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"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, substantially in the form, and including such additional
information, as is contemplated on page 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, or the Master Servicer
determines, in its good faith and reasonable judgment, will
continue, 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 has continued, or the Master Servicer
determines, in its good faith and reasonable judgment, will
continue, unremedied for 60 days; or
(c) the Master Servicer has determined, in its good faith and
reasonable judgment, that a default in the making of a Monthly
Payment (including, without limitation, a Balloon 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 may, in the Master Servicer's good
faith and reasonable judgment, materially impair the value of
the related Mortgaged Property as security for the Mortgage Loan
or otherwise materially and adversely affect the interests of
Certificateholders, which default has continued unremedied for
the applicable cure period under the terms of the Mortgage Loan
(or, if no cure period is specified, 60 days); or
(e) a decree or order of a court or agency or supervisory authority
having juris diction in the premises in an involuntary case
under any present or future federal or state bankruptcy,
insolvency or similar law or the appointment of
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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 has become an 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;
(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.
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"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 successor REO Loan), a principal amount initially equal to the Cut-off
Date Balance of such Mortgage Loan, that is 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 successor 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 successor 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, Class J, Class K or Residual Certificate.
"Sub-Servicer": Any Person with which the Master Servicer or the
Special Servicer has entered into a Sub-Servicing Agreement.
"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.
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"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 during each calendar month 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 most recently ended calendar
month.
"Trustee Fee Rate": A rate of 0.005% per annum.
"UCC": The Uniform Commercial Code in effect in the applicable
jurisdiction.
"UCC-1", "UCC-2" and "UCC-3": UCC financing statements on Form
UCC-1, Form UCC-2 and Form UCC-3, respectively.
"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
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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 the product of (i) the Net Aggregate
Prepayment Interest Shortfall, if any, for such Distribution Date, multiplied by
(ii) a fraction, the numerator of which is the Uncertificated Accrued Interest
in respect of such REMIC I Regular Interest for such Distribution Date, and the
denominator of which is the aggregate Uncertificated Accrued Interest in respect
of all the REMIC I Regular Interest 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.
"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.
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"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
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 of the Mortgage Loans constituting such Group. All amounts collected in
respect of or allocable to any particular individual 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 remaining unpaid principal balance); fourth, as a recovery
of amounts to be currently applied to the payment of, or escrowed for the future
payment of, real estate taxes, assessments, insurance premiums, ground rents (if
applicable) and similar items; fifth, as a recovery of Reserve Funds to the
extent then required to be held in escrow; sixth, as a recovery of any
Prepayment Premium then due and owing under such Mortgage Loan; seventh, as a
recovery of any Penalty Charges then due and owing under such Mortgage Loan;
eighth, as a recovery of any assumption fees and modification fees then due and
owing under such Mortgage Loan; ninth, as a recovery of any other amounts then
due and owing under such Mortgage Loan other than remaining unpaid principal;
and tenth, 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 the Health Care Loan identified on
the Mortgage Loan Schedule identified by loan number N129 (Clark Nursing &
Convalescent Ctr.), 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
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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.
(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).
SECTION 1.03. Cross-Collateralized Mortgage Loans.
Notwithstanding anything herein to the contrary, it is hereby
acknowledged that certain groups of Mortgage Loans identified on the Mortgage
Loan Schedule as being cross- collateralized with each other are, in the case of
each such particular group of Mortgage Loans (each, a "Group"), evidenced by a
single mortgage note and secured by mortgages, deeds of trust and/or deeds to
secure debt on all the Mortgaged Properties identified on the Mortgage Loan
Schedule as corresponding to such Group. It is hereby further acknowledged that
each such Mortgage Loan represents a portion of the entire indebtedness
evidenced by the related mortgage note that has been allocated to the Mortgaged
Property identified on the Mortgage Loan Schedule as corresponding to such
Mortgage Loan. Each of the Mortgage Loans constituting each such Group shall be
deemed to be a separate Mortgage Loan that is (i) evidenced by a mortgage note
identical to the mortgage note that evidences such Group (but in a principal
amount equal to the principal balance of such Mortgage Loan) and (ii)
cross-defaulted and cross-collateralized with each other Mortgage Loan in
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such Group. In addition, it is hereby acknowledged that certain other groups of
Mortgage Loans identified on the Mortgage Loan Schedule as being
cross-collateralized with each other are, in the case of each such particular
group of Mortgage Loans (each, also a "Group"), by their terms, cross- defaulted
and cross-collateralized with each other. For purposes of reference only in this
Agreement, and without in any way limiting the servicing rights and powers of
the Master Servicer and/or the Special Servicer, with respect to any
Cross-Collateralized Mortgage Loan (or successor REO Loan), the Mortgaged
Property (or REO Property) that relates or corresponds thereto shall be the
property identified in the Mortgage Loan Schedule as corresponding thereto. The
provisions of this Agreement, including, without limitation, each of the defined
terms set forth in Section 1.01, shall be interpreted in a manner consistent
with this Section 1.03; provided that, if there exists with respect to any of
the above specified Groups 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 constituting such Group shall be deemed an inclusion of
such original in the Mortgage File for each such Mortgage Loan (the Mortgage
Loan Seller, in the case of the CREI Mortgage Loans, and the Additional
Warranting Party, in the case of the NMCC Mortgage Loans, will notify the
Trustee as to which Mortgage Files will contain copies based on this proviso).
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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) Each of the Sponsor and, at the direction of the Sponsor
given pursuant to the CREI Mortgage Loan Purchase Agreement, the Mortgage Loan
Seller, concurrently with its execution and delivery hereof, 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
Sponsor and the Mortgage Loan Seller, respectively, 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 Sponsor and the Mortgage Loan Seller to the
Trustee, as provided in this Section be, and be construed as, an absolute
transfer of the Mortgage Loans by the Sponsor and the Mortgage Loan Seller 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
Sponsor or the Mortgage Loan Seller to the Trustee to secure a debt or other
obligation of the Sponsor or the Mortgage Loan Seller, as the case may be.
However, in the event that the Mortgage Loans are held to be property of the
Sponsor or the Mortgage Loan Seller, 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, (i) 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; (ii) the conveyance provided for in this Section shall be deemed
to be a grant by the Sponsor and the Mortgage Loan Seller 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 (A) the Mortgage
Notes, the Mortgages, any related insurance policies and all other documents in
the related Mortgage Files, (B) all amounts payable to the holders of the
Mortgage Loans in accordance with the terms thereof and (C) 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; (iii) the possession by the Trustee or its agent 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
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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 (with a copy to the Master Servicer), 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 (with a copy to the Master Servicer), 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 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
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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 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).
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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 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
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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) through (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 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
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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) through (viii), (x) through (xii) and (xiv) through (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.
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
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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
Certificate holders, 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 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.
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(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, 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
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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.
(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.
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(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.
(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).
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(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.
(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, except
as described below, 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, (C) the right of tenants (whether under ground leases or space
leases) at the Mortgage Property to remain following a foreclosure or
similar proceeding (provided that such tenants are performing under such
leases), and (D) 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), (C) and (D)
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. One CREI
Mortgage Loan is secured by a first lien (subject to the Permitted
Encumbrances) on a fee interest in a parcel of land that is subject to a
ground lease between the related Mortgagor and the owner of a hotel
situated on the parcel, but neither the hotel nor any other improvements
or personal property located thereon represent security for such
Mortgage Loan. One CREI Mortgage Loan is secured by a first lien
(subject to the Permitted Encumbrances) on a fee interest in the top 11
floors of a 12 floor mixed use commercial and residential complex (such
top eleven floors being utilized for rental apartments) and a fee
interest in a portion of an adjacent parking garage, but not by any
interest in the land or any other portion of the complex.
(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).
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(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.
(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
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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
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
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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 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.
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(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 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) in the case of one Mortgage Loan identified
on the Mortgage Loan Schedule by loan number C075 (Fox Hill Apartments),
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,
then the related Mortgage Loan documents provide that an escrow in the
amount of three Monthly Payments (or, in the case of the Health Care
Loans identified on the Mortgage Loan Schedule by loan numbers N129
(Clark Nursing & Convalescent Ctr.), N130 (Ocean View Nursing/Rehab),
N131 (Broward Nursing/Rehab), N136 (Tamarac Nursing/Rehab) and N138
(Plantation Nursing/Rehab), in the amount of one Monthly Payment) 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) Unless such Mortgage Loan is the Health Care Loan
identified on the Mortgage Loan Schedule by loan number N129 (Clark
Nursing & Convalescent Ctr.), 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. If such Mortgage Loan is the Health Care Loan identified on the
Mortgage Loan Schedule by loan number N129 (Clark Nursing & Convalescent
Ctr.), the representation and warranty set forth in the prior sentence
is true and correct only with respect to the period during which it
constitutes a Specially Serviced Mortgage Loan or an REO Loan.
(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
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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 customary standards utilized by prudent
institutional multifamily and commercial mortgage loan servicers.
(xxxviii) Unless the related Mortgaged Property is owner
occupied, the Mortgage File for such Mortgage Loan contains an
Assignment of Leases either as a separate instrument or incorporated
into the related Mortgage, which creates, in favor of the holder, a
valid, perfected and enforceable lien of the same priority as the
related Mortgage, in the property and rights described therein; provided
that the enforceability of such lien is subject to applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws
affecting the enforcement of creditors' rights generally, and by the
application of the rules of equity. The Representing Party has the full
right to assign to the Trustee such Assignment of Leases and the lien
created thereby as described in the immediately preceding sentence. No
Person other than the Mortgagor owns any interest in any payments due
under the related leases.
(xxxix) If the related Mortgaged Property securing such Mortgage
Loan is encumbered by secured subordinated debt, then either (A) the
subordinate debt constitutes a "cash flow" mortgage loan (that is,
payments are required to be made thereon only to the extent that certain
net cash flow from the related Mortgaged Property (calculated in
accordance with the related loan documents) is sufficient after payments
on such Mortgage Loan have been made and certain expenses have been
paid) or (B) the holder of the subordinate debt has agreed not to
foreclose on the related Mortgaged Property so long as such Mortgage
Loan is outstanding and the Special Servicer on behalf of the Trust Fund
is not pursuing a foreclosure action.
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
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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 and the Special Servicer.
(a) CRIIMI MAE Services Limited Partnership, both in its capacity
as Master Servicer and in its capacity as Special Servicer (the "Partnership"),
hereby represents and warrants to the other parties hereto and for the benefit
of the Certificateholders, as of the Closing Date, that:
(i) The Partnership is duly organized, validly existing and in
good standing as a limited partnership under the laws of the State of
Maryland, and the Partnership 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
Partnership, and the performance and compliance with the terms of this
Agreement by the Partnership, will not violate the Partnership'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 Partnership (and its general partner on its behalf)
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 Partnership, enforceable against the
Partnership in accordance with the terms hereof, subject to (A)
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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 Partnership 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 Partnership's good faith and
reasonable judgment, is likely to affect materially and adversely either
the ability of the Partnership to perform its obligations under this
Agreement or the financial condition of the Partnership.
(vi) No litigation is pending or, to the best of the
Partnership's knowledge, threatened against the Partnership which would
prohibit the Partnership from entering into this Agreement or, in the
Partnership's good faith and reasonable judgment, is likely to
materially and adversely affect either the ability of the Partnership to
perform its obligations under this Agreement or the financial condition
of the Partnership.
(vii) Each officer, director or employee of the Partnership or
its general partner 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 by
Section 3.07(c). Neither the Partnership nor any of its or its general
partner's officers, directors or employees that is involved in the
servicing or administration of the Mortgage Loans has been refused such
coverage or insurance.
(b) The representations and warranties of the Partnership set
forth in Section 2.06(a) shall survive the execution and delivery of this
Agreement and inure to the benefit of the Persons for whose benefit they were
made for so long as the Trust Fund remains in existence. Upon discovery by any
of the parties hereto of a breach of any of such 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) Each successor Master Servicer and Special Servicer (if any
and regardless of whether the Master Servicer and the Special Servicer are
different Persons) 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, and without regard to the references to general
partner if such successor is not a partnership. In any such case, the term
"Partnership" shall be deemed to mean such successor Master Servicer or Special
Servicer, as appropriate.
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SECTION 2.07. 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:
(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.
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(b) The representations and warranties of the Bank set forth in
Section 2.07(a) shall survive the execution and delivery of this Agreement and
shall inure to the benefit of the Persons for whose benefit they were made for
so long as the Trust Fund remains in existence. Upon discovery by any of the
parties hereto of a breach of any of such 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) Each successor Trustee or REMIC Administrator (if any and
regardless of whether the Trustee and the REMIC Administrator are different
Persons) 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. In any such case, the term "Bank" shall be deemed to mean such
successor Trustee or the REMIC Administrator, as appropriate.
SECTION 2.08. 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
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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 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) The representations and warranties of the Fiscal Agent set
forth in Section 2.08(a) shall survive the execution and delivery of this
Agreement and shall inure to the benefit of the Persons for whose benefit they
were made for so long as the Trust Fund remains in existence. Upon discovery by
any party hereto of any breach of any of such 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 2.08(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.
SECTION 2.09. 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 2.10. 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 Regular Interests and
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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 2.11. 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.
(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.
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(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 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
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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 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
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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 (collec tively, 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 received in
respect of the Mortgage Loans;
(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 Loan;
(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);
(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
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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
special servicing compensation in accordance with Section 3.11(d), assumption
fees, modification fees, Net Penalty Charges, charges for beneficiary statements
or demands, charges for checks returned for insufficient funds and similar fees
(excluding Prepayment Premiums) 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 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.
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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.
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
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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 second and third 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 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
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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 on such Advance;
(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 the period that any Mortgage Loan is a Specially Serviced
Mortgage Loan or REO Loan, any Penalty Charges collected on the Mortgage
Loans, and to pay the Special Servicer, as additional servicing
compensation in accordance with Section 3.11(d), any Net Penalty Charges
collected on any Mortgage Loan to the extent any allocable to the period
that such Mortgage Loan is a Specially Serviced Mortgage Loan or REO
Loan;
(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) and Section 8.13(a);
(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
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(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, 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 (the order set forth
below not constituting an order of priority for such withdrawals):
(i) to make distributions to Certificateholders on each
Distribution Date pursuant to Section 4.01;
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(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;
(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
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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:
(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.
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(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.
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
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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 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
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
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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 (or, in the case of the initial Master Servicer and Special Servicer, its
general partner's) officers, employees and agents under its control 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:
(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,
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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); provided that,
notwithstanding anything to the contrary contained herein, neither the Master
Servicer nor the Special Servicer shall consent (insofar as it is within the
control thereof under the related loan documents to withhold such consent) to
the transfer of any Mortgaged Property which secures a Group of
Cross-Collateralized Mortgage Loans unless all of the Mortgaged Properties
securing such Group of Cross-Collateralized Mortgage Loans are transferred
simultaneously by the respective Mortgagor. 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 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; and provided further that
such confirmation will be required from DCR only with respect
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to a Mortgage Loan having a Stated Principal Balance at the time such
confirmation is to be requested in excess of 2% of the then aggregate Stated
Principal Balance of the Mortgage Pool.
(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. In connection
with the foregoing, in the event of a default under any Mortgage Loan or Group
of Cross- Collateralized Mortgage Loans that are secured by real properties
located in multiple states, and such states include the State of California or
another state with a statute, rule or regulation comparable to the State of
California's "one action" rule, then the Special Servicer shall consult
Independent counsel regarding the order and manner in which the Special Servicer
should foreclose upon or comparably proceed against such properties. 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.
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
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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.
(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,
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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, the Master Servicer and the Rating Agencies 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.
(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
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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 number of days
respecting which the related interest payment due on such Mortgage Loan or
deemed to be due on such REO Loan is computed under the terms of the related
Mortgage Note (as such terms may be changed or modified at any time following
the Closing Date) and applicable law. 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 out of its Master Servicing
Fee, pay to any Sub-Servicer retained by the Master Servicer such Sub-Servicer's
sub-servicing fee (including, without limitation, any Primary Servicing Fee, if
applicable), to the extent such Sub-Servicer is entitled thereto under the
applicable Sub-Servicing Agreement.
(b) The Master Servicer shall be entitled to receive as
additional servicing compensation:
(i) 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 Loan that is not a Specially
Serviced Mortgage Loan (except that the Master Servicer shall in turn
pay the foregoing amounts to the related Sub-Servicer to the extent such
Sub-Servicer is entitled thereto under the applicable Sub-Servicing
Agreement);
(ii) any Prepayment Interest Excesses and Balloon Payment
Interest Excesses collected on the Mortgage Loans;
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(iii) 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
(iv) 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 by
the Master Servicer.
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 number of days respecting which any related
interest payment due on such Mortgage Loan or deemed to be due on such REO Loan
is computed under the terms of the related Mortgage Note (as such terms may be
modified at any time following the Closing Date) and applicable law. 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 number of days 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 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
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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.
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.
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(d) The Special Servicer shall be entitled to receive as
additional special servicing compensation:
(i) (A) to the extent allocable to the period when any Mortgage
Loan is a Specially Serviced Mortgage Loan or an REO Loan, any Net
Penalty Charges collected on such Mortgage Loan and (B) 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 received on or with respect to Specially Serviced Mortgage
Loans or REO Loans;
(ii) 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); and
(iii) 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 by the Special Servicer.
To the extent the amounts described in clause (i)(B) of the
preceding paragraph are collected by the Master Servicer, the Master Servicer
shall promptly pay such amounts to the Special Servicer and shall not be
required to deposit such amounts in the Certificate Account pursuant to Section
3.04(a). Additional servicing compensation to which the Master Servicer (or, if
so provided by the applicable Sub-Servicing Agreement, any Sub-Servicer retained
thereby) is entitled pursuant to Section 3.11(b) in the form of 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) collected by the Special Servicer on Mortgage
Loans that are not Specially Serviced Mortgage Loans or REO Loans, shall be paid
promptly to the Master Servicer by the Special Servicer.
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
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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 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,
at any time coinciding with or following the reimbursement of such Servicing
Advance, 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) Commencing in 1998, 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 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 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 REO Properties, and the Master Servicer, in the case of all
other Mortgage Loans, shall make
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reasonable efforts to collect or otherwise obtain promptly (from the related
Mortgagor in the case of a Mortgage Loan) annual and quarterly operating
statements and rent rolls of the related Mortgaged Property or REO Property (and
financial statements of the related Mortgagor in the case of a Mortgage Loan),
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 REO Properties, 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 REO Loans and any extraordinary increases or
decreases in expenses or revenues associated with the related Mortgaged
Properties and REO Properties; and (iii) deliver copies of the collected items,
and of the written reports prepared in respect thereof, to the Trustee, the
Rating Agencies (except that quarterly operating statements and rent rolls need
not be delivered to DCR) 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, 1998, 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, 1998 (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, and that it has maintained an effective internal control system
over, the servicing of securitized 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; provided that, with respect to matters
relating to the direct servicing of the Mortgage Loans by the Master Servicer
and matters relating to handling and accounting for payments and other
collections on the Mortgage Loans (whether received directly from Mortgagors or
from Sub-Servicers), the letter of representation referred to in clause (i)
above shall specifically relate to, and the examination referred to in clause
(ii) above shall specifically cover, the Mortgage Loans and this Agreement, and
the report delivered by the subject accounting firm shall include a statement to
such effect. In rendering its report such firm may rely, as to matters relating
to the direct servicing of securitized 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
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the Trust Fund within its control which may be required by this Agreement or by
applicable law. Such access shall be afforded without charge but only upon
reasonable prior written request and during normal business hours at the offices
of the Master Servicer or the Special Servicer, as the case may be, designated
by it.
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 Investment Earnings with respect to the REO
Account for any Collection Period). The
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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
feasible) acquire such Mortgaged Property as REO Property and so lease
or operate such REO Property; or
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(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 Trust Fund'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 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
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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:
(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
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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.
(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, and that the sale of such Mortgage
Loan under the circumstances described in this Section 3.18(b) or in Section
3.18(c) is in accordance with the Servicing Standard, 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
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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 described in the first sentence of
Section 3.18(b) 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 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 (determined pursuant to Section 3.18(e) below) for such REO
Property. If the Special Servicer reasonably believes that it will be unable to
realize a fair price (determined pursuant to Section 3.18(e) below) 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
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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 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 offers of Interested Persons or
any Affiliates thereof) have been received from Independent third parties
reflecting prices less than the related Purchase Price. 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
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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
(other than price) offered by the prospective buyer making the lower offer are
more favorable).
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).
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(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, until it ceases to be such in accordance with the
following paragraph, 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.
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, in which case it will cease to
be a Required Appraisal Loan), 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) and
the Rating Agencies 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
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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 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 aggregate Master
Servicing Fee for the related Collection Period that is, in the case of each and
every Mortgage Loan and REO Loan, calculated at 0.075% per annum, together with
the total amount of additional master servicing compensation to which the Master
Servicer is entitled under Section 3.11(b) and that was received during such
Collection Period.
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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 (including,
without limitation, Default Interest) on and principal of, forgive late payment
charges and Prepayment Premiums on, 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 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 (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), 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 then 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) or in
Section 3.08 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
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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 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 (1) the limitations, conditions and restrictions set forth in
clauses (i) through (v) above shall not apply to (x) any of the acts referenced
in this Section 3.20(a) in respect of any Mortgage Loan that is required under
the terms of such Mortgage Loan in effect on the Closing Date or (y) the release
of the lien with respect to approximately 1600 square feet of unimproved land
from the Mortgaged Property relating to the Mortgage Loan identified on the
Mortgage Loan Schedule by loan number N091 (Parkside Commons), which release has
been agreed to by NMCC, as mortgagee, but not fully documented as of the Closing
Date, and (2) 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.
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(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. Each
such determination shall be evidenced by an Officer's Certificate to such effect
to be delivered by the Special Servicer to the Trustee.
(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, 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
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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 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.
Also notwithstanding anything herein to the contrary, in
connection with the transfer to the Special Servicer of the servicing of a
Cross-Collateralized Mortgage Loan as a result of a Servicing Transfer Event or
the re-assumption of servicing responsibilities by the Master Servicer with
respect to any such Mortgage Loan upon its becoming a Corrected Mortgage Loan,
the Master Servicer and the Special Servicer shall each transfer to the other,
as and when applicable, the servicing of all other Cross-Collateralized Mortgage
Loans constituting part of the same Group; provided that no Cross-Collateralized
Mortgage Loan may become a Corrected Mortgage Loan at any time that a continuing
Servicing Transfer Event exists with respect to another Cross- Collateralized
Mortgage Loan in the same Group.
(b) In servicing any Specially Serviced Mortgage Loans, the
Special Servicer shall provide to the Trustee originals of documents
contemplated by the definition of "Mortgage File" and generated while such
Mortgage Loan is a Specially Serviced Mortgage Loan, 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 generated while such
Mortgage Loan is a Specially Serviced Mortgage Loan.
(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.
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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), any successor to the Master Servicer or the
Special Servicer, as the case may be, hereunder (including the Trustee if the
Trustee has become such successor pursuant to Section 7.02) 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 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; provided that the foregoing requirements shall not apply in the case
of the Sub-Servicing Agreements in effect as of the Closing Date that are listed
on Schedule II hereto or in the case of the Sub-Servicers thereunder.
(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
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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, the initial Master
Servicer in its partnership capacity hereby agrees that it shall not, in its
capacity as Master Servicer, terminate any Sub-Servicer thereunder without
cause. In the event of the resignation, removal or other termination of the
initial Master Servicer (or any successor Master Servicer) hereunder for any
reason, the successor to the initial Master Servicer (or to such successor
Master Servicer) shall elect, with respect to any Sub-Servicing Agreement
existing at the time of such termination (i) to assume the rights and
obligations of the predecessor 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 the new 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 the new 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 any successor Master Servicer elects to terminate
such Sub-Servicer without cause, in which case 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) such successor Master Servicer shall agree to pay
such Sub-Servicer an interest-only strip out of its related Master Servicing
Fees equal to the "Termination Strip" (calculated at a per annum rate 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 shall be obligated to pay any such
Termination Strip agreed to by a predecessor Master Servicer. Nothing in the
foregoing provisions of this Section 3.22(d) shall limit the ability of the
initial or a 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
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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. References in this Section 3.22(d) to Master Servicer,
successor Master Servicer or subsequent successor Master Servicer shall mean the
Trustee, if it is then Master Servicer, successor Master Servicer or subsequent
Master Servicer pursuant to the operation of Section 7.02.
(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 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 each Rating Agency stating that if the designated Person were
to serve as Special Servicer hereunder, none of the then-current ratings
assigned by such Rating Agency to the respective Classes of the Certificates
would be qualified, downgraded or withdrawn as a result thereof; (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,
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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.
SECTION 3.24. Extension Adviser; Elections.
(a) The Holders of Certificates representing more than 50% by
aggregate 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 Holders of
Certificates representing more than 50% by aggregate 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 aggregate Certificate Principal Balance of all the
Registered Certificates (exclusive of the Controlling Class, if applicable, and
any Class of Registered Certificates subordinate to the
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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.
(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 or an interest therein, each
Certificateholder and Certificate Owner 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 each such
Certificateholder and Certificate Owner 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 or required to be provided by
the Special Servicer to the Extension Adviser shall also be delivered to the
Trustee and the Rating Agencies.
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;
(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,
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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;
(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;
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(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 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
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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;
(xxv) to distributions of interest to the Holders of the Class J
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;
(xxvi) 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, Class G and
Class H Certificates have been reduced to zero, to distributions of
principal to the Holders of the Class J Certificates, in an amount (not
to exceed the Class Principal Balance of the Class J Certificates
outstanding immediately prior to such Distribution Date) equal to the
entire remaining Principal Distribution Amount for such Distribution
Date;
(xxvii) to distributions to the Holders of the Class J
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 J Certificates and that remain
unreimbursed immediately prior to such Distribution Date;
(xxviii) to distributions of interest to the Holders of the
Class K 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;
(xxix) 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, Class G,
Class H and Class J Certificates have been reduced to zero, to
distributions of principal to the Holders of the Class K Certificates,
in an amount (not to exceed the Class Principal Balance of the Class K
Certificates outstanding immediately prior to such Distribution Date)
equal to the entire remaining Principal Distribution Amount for such
Distribution Date;
(xxx) to distributions to the Holders of the Class K
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 K Certificates and that remain
unreimbursed immediately prior to such Distribution Date; and
(xxxi) 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
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remaining after the distributions to be made on such Distribution Date
pursuant to clauses (i) through (xxx) 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, subject to available funds, 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), (xxiii), (xxvi) and (xxix) above
with respect to any Class of Sequential Pay Certificates, will be so made to the
Holders thereof, subject to available funds, 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), (xxiii), (xxvi) and (xxix)
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 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 Registered
Certificates has not been reduced to zero prior to such Distribution Date, (a)
80% of such Prepayment Premium will be distributed to the Holders of the Class X
Certificates and (b) 20% of such Prepayment Premium will be distributed to the
Holders of the Class or Classes of the Registered 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 Registered Certificates has been reduced to
zero prior to such Distribution Date, 100% of 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).
(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
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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 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:
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(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.
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"), substantially in the form
contemplated on pages B-1 through B-9 of the Prospectus Supplement, as to the
distributions made on such Distribution Date setting forth:
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(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 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, aggregate unpaid principal
balance and specific identification (by loan number) 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), property type and address of any REO Property
included in the Trust Fund as of the end of the Collection Period for
such Distribution Date and the unpaid principal balance and Assumed
Monthly Payment of the related REO Loan;
(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;
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(xiii) the Principal Distribution Amount for such Distribution
Date, separately identifying the respective components of such amount;
(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 Class Principal Balance or Class Notional Amount, as
the case may be, 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;
(xvi) the aggregate of all Realized Losses and Additional Trust
Fund Expenses that remain unallocated following 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
pages B-1 through B-9 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. Except
with respect to the Certificate Factor (required to be reported by clause (xvii)
above), financial information reported by the Trustee to the Certificateholders
pursuant to this Section 4.02 shall be expressed as a dollar amount rounded to
the nearest whole cent. 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
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the Distribution Date Statement, the "Certificateholder Reports") that has been
received or prepared by the Trustee since the prior Distribution Date. Delivery
of such reports shall be in a written format and, in the case of the Rating
Agencies (upon request and to the extent reasonably possible), through an
electronic medium. The form of any Certificateholder Report may change over
time.
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 expenses, actual revenues and
actual Net Operating Income for the respective Mortgaged Properties and a Debt
Service Coverage Ratio calculated on the basis thereof). To the extent
reasonably possible, delivery of such report to any particular Rating Agency
shall be, upon request, through an electronic medium.
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
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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.
The Trustee shall make available via the Trustee's ASAP
(Automated Statements Accessed by Phone) System (or comparable system), to
Persons with an account number thereon, the Certificateholder Reports and a
summary report of Certificate Factors via automated facsimile. The Trustee shall
make available, upon request, to Certificateholders, Certificate Owners
identified to the Trustee in accordance with Section 5.06(b), the Sponsor,
Citibank, N.A., NationsBanc Capital Markets, Inc., the Master Servicer and the
Special Servicer account numbers on the Trustee's ASAP System.
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") (for so long as Bloomberg exists) using a format and media
mutually acceptable to the Trustee and Bloomberg or shall otherwise make such
reports available, on a confidential basis, via its own electronic bulletin
board. All files on such bulletin board shall be password protected. Passwords
to each file shall be released by the Trustee, upon request, to
Certificateholders, Certificate Owners identified to the Trustee in accordance
with Section 5.06(b), the Sponsor, the Rating Agencies, Citibank, N.A.,
NationsBanc Capital Markets, Inc., the Master Servicer and the Special Servicer.
(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;
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(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 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;
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(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;
(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-9
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 and the Rating Agencies 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 CutOff 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
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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).
Within 130 days following the end of each calendar quarter,
commencing with the calendar quarter ended June 30, 1997, 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 or otherwise.
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 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.
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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. 301-468-3142
(or such alternative number provided by the Master Servicer to the Trustee in
writing) and by telephone at telephone no. 301- 816-2300 (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 P&I Advance or portion thereof, but fails to do so by 10:00 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.
(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 Monthly Payments (other than Balloon Payments) and any Assumed Monthly
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
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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) 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 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
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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,
at any time coinciding with or following the reimbursement of such P&I Advance,
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,
and in no event shall interest accrue in accordance with this Section 4.03(d) on
any P&I Advance as to which the corresponding Late Collection had been received
as of the related date on which such P&I Advance was made.
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 K, Class J, Class H, Class G, Class F,
Class E, Class D, Class C and Class B Certificates shall be reduced
sequentially, in that order, in each case, until such excess or the related
Class Principal Balance is reduced to zero (whichever occurs first). 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 such excess or each such Class
Principal Balance is reduced to zero (whichever occurs first). 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 made
in respect of the respective Classes of REMIC II Regular 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 respective REMIC I
Regular Interests, pro rata in accordance with, and in an amount equal to, the
aggregate Uncertificated Distributable Interest in respect of each REMIC I
Regular Interest for such Distribution Date and, to the extent not previously
deemed paid pursuant to this sentence, for all prior Distribution Dates. In
addition, distributions of 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 Corresponding Major REMIC I Regular Interest and the
Corresponding Minor REMIC I Regular Interest, pro rata based on their respective
Uncertificated Principal Balances outstanding immediately prior to such
Distribution Date. In each such case, if such distribution on any such Class of
Certificates was a distribution of interest, of
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principal or in reimbursement of any previously allocated Realized Losses and
Additional Trust Fund Expenses in respect of any such Class of Certificates,
then the corresponding distribution deemed to be made on a REMIC I Regular
Interest pursuant to the preceding two sentences 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 Regular 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 respective REMIC I Regular Interests,
pro rata based upon the amount of principal deemed distributed in respect of
each such REMIC I Regular Interest for such Distribution Date pursuant to
Section 4.05(a) above.
(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,
allocated to each Class of Sequential Pay Certificates on any Distribution Date
shall be deemed to have first been allocated to the Corresponding Major REMIC I
Regular Interest and the Corresponding Minor REMIC I Regular Interest (pro rata
based on their respective Uncertificated Principal Balances outstanding
immediately following the deemed distributions on such Distribution Date
pursuant to Section 4.05(a)), with a corresponding reduction in the
Uncertificated Principal Balance of each such REMIC I Regular Interest.
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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 and A-5; provided that any
of the Certificates may be issued with appropriate insertions, omissions,
substitutions and variations, and may have imprinted or otherwise reproduced
thereon such legend or legends, not inconsistent with the provisions of this
Agreement, as may be required to comply with any law or with rules or
regulations pursuant thereto, or with the rules of any securities market in
which the Certificates are admitted to trading, or to conform to general usage.
The 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 and Class F Certificates shall initially
be held and transferred through the book-entry facilities of the Depository. The
REMIC II Regular 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 A-3 Certificates, $25,000 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
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Trust Office shall constitute the office of the 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
of the Certificates or a transfer of such Non-Registered Certificate 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
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 or Class F Certificate) is to
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be made without registration under the Securities Act (other than in connection
with the initial issuance of the Certificates or a transfer of any interest in
such Non-Registered Certificate 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
NonRegistered Certificates under the Securities Act or any other securities law
or to take any action not otherwise required under this Agreement to permit the
transfer of any Non-Registered Certificate or interest therein without
registration or qualification. Any Holder or Certificate Owner of a
NonRegistered 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 Non-Registered 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 Class X 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 shall certify in
writing to the Certificate Owner that desires to effect the transfer 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 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 any Non-Registered Certificate or interest therein that is being
acquired with "plan assets", the prospective Transferee provides the Certificate
Registrar (or, in the case of a NonRegistered Certificate that constitutes a
Book-Entry Certificate, the Certificate Owner that desires to effect the
transfer) with a certification to the effect that the purchase, continued
holding and
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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 under Section 401(c) of ERISA; or (z) in the case of any Non-Registered
Certificate that is held as a Definitive Certificate, the prospective Transferee
provides the Certificate Registrar with a certification of facts and an opinion
of counsel, 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. Each Person
who acquires any Certificate (including, without limitation, a Registered
Certificate) or interest therein shall (in all cases, in the case of a
Registered Certificate, and only if such Person shall not have delivered the
opinion of counsel and/or one of the certifications referred to in the preceding
sentence, in the case of a Non-Registered Certificate) 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, continued 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, Sections I and III of PTCE 95-60 or Section 4.01(c) of ERISA.
(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.
(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
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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".
(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.
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(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, to cause the
transfer of such Residual Certificate to a Permitted Transferee selected
by the Trustee on such terms as the Trustee may choose, 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.
Such Permitted Transferee shall promptly endorse and deliver such
Residual Certificate in accordance with the instructions of the Trustee.
Such Permitted Transferee may be the Trustee itself or any Affiliate of
the Trustee.
(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. 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.
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(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.
(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.
(k) If a Person is acquiring any Non-Registered Certificate or
interest therein as a fiduciary or agent for one or more accounts, such Person
shall be required to deliver to the Certificate Registrar (or, in the case of a
Book-Entry Certificate, to the Certificate Owner that is transferring such
interest) a certification to the effect that, and such other evidence as may be
reasonably required by the Trustee (or such Certificate Owner) to confirm that,
it has (i) sole investment discretion with respect to each such account and (ii)
full power to make the acknowledgments, representations, warranties,
certification and agreements with respect to each such account as set forth in
subsections (b), (c) and (d), as applicable, of this Section 5.02.
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SECTION 5.03 Book-Entry Certificates.
(a) The Registered Certificates, the Class F 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 fully
registered, physical 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
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
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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 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 applicable 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
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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 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 any Rating
Agency to any Class of Certificates (as confirmed in writing).
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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 negligent 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 negligent
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, 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
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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 and every Rating Agency to the effect that such
resignation and appointment will not result in the downgrade, qualification or
withdrawal of any rating then assigned by such 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 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
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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 failure 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 failure 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 this Agreement, which failure 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
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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 any
Rating Agency that the continuation of the Master Servicer or the
Special Servicer in such capacity would result (or the continuation of
the Master Servicer or the Special Servicer in such capacity has
resulted) 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) through (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 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 (other than an event described
in clause (xi)) will constitute an Event of Default in each such capacity.
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(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 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
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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 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 is not approved by each and every Rating Agency as an
acceptable master servicer or special servicer, as the case may be, of
commercial mortgage loans, or if the Holders of Certificates entitled to at
least 51% of the Voting Rights 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
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assigned by any 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 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 66-2/3% 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.
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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;
(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
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(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 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
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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.
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 2.07 and 2.08) 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
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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, in its individual or any other capacity, the
Fiscal Agent and any agent of the Trustee or the Fiscal Agent may become the
owner or pledgee of Certificates with the same rights it would have if it were
not the Trustee, the Fiscal Agent or such 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 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 negligent 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 (or that of its fiscal agent) is rated not
less than "Aa2" by Moody's and "AA" by each of DCR and Fitch (or such lower
ratings as would not, as confirmed in writing by each Rating Agency, result
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in a qualification, downgrade or withdrawal of any of the then-current ratings
assigned by such Rating Agency 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.
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
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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 and
appointment would not result in the qualification, downgrading or withdrawal of
the rating assigned by any 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.
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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 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
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the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(d) Any separate trustee 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; provided that if the Custodian is an Affiliate of the Trustee
such consent of the Master Servicer need not be obtained and the Trustee shall
instead notify the Master Servicer of such appointment. 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
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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, 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), (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 immediately preceding paragraph of this Section 8.12(b), the
Trustee may require, unless the Sponsor directs otherwise, (i) 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 and will keep such information
confidential and (ii) in the case of any prospective purchaser of a Certificate
or, in the case of a Book-Entry Certificate, of a beneficial ownership interest
therein, a written confirmation executed by the requesting Person, in form
reasonably satisfactory to the Trustee, generally to the effect that such Person
is a prospective purchaser of a Certificate or a beneficial ownership interest
therein, is requesting the information solely for use in evaluating a possible
investment in Certificates and will otherwise keep such information
confidential. All Certificateholders, by acceptance of their Certificates, shall
be deemed to have agreed to keep such information confidential, except to the
extent that the Sponsor grants
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written permission to the contrary. Notwithstanding the preceding sentences of
this paragraph, the Trustee shall have no responsibility for the accuracy,
completeness or sufficiency of any information so made available or furnished by
it in the manner described in the immediately preceding paragraph.
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 confirmation
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.
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
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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 a
Qualified 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 Pool Balance. 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,
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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 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
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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 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 X, Class A-1, Class A-2, Class A-3, Class B, Class C, Class D, Class
E, Class F, Class G, Class H, Class J and Class K 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).
(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.
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(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 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
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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 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
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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 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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<PAGE>
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 without such Certificateholder's written consent; 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 then assigned to any Class
of Certificates by any 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 written
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 written consent of the
Holders of all Certificates of such Class, or (iii) modify the provisions of
this Section 11.01 without the written consent of the Holders of all
Certificates then outstanding. Notwithstanding any 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 Additional Warranting Party, the Master Servicer, the
Special Servicer or any of their respective Affiliates shall be entitled to the
same Voting
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<PAGE>
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; provided
that such consents shall be in writing.
(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.
(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.
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<PAGE>
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.
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.
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<PAGE>
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 and the
Special Servicer, CRIIMI MAE Services Limited Partnership, 11200 Rockville Pike,
Rockville, Maryland 20852, Attention: Brian Hanson, telecopy number (301)
468-3147 (with a copy to the attention of David Iannarone, Esq. at such address)
(5) in the case of the Trustee, LaSalle National Bank, 135 South LaSalle Street,
Suite 1740, Chicago, Illinois 60674-4107, Attention: ABS Group - MCFI - Series
1997-MC1, telecopy number: 312-904-2084; (6) 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 1997-MC1,
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: Commercial MBS Monitoring Department, telecopy number
(212) 553-0300; (B) Fitch Investors Service, L.P., One State Street Plaza, New
York, New York 10004, Attention: Commercial Mortgage Surveillance, telecopy
number: (212) 635-0295; and (C) Duff & Phelps Credit Rating Co., 55 East Monroe
Street, Chicago, Illinois 60604, Attention: Structured Finance-Commercial Real
Estate Monitoring, telecopy number: (312) 263-2852; 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.
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.
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<PAGE>
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:
(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.
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<PAGE>
(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).
(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).
(f) To the extent reasonably possible, all information and
reports delivered or made available to the Rating Agencies by any of the
Trustee, the Master Servicer or the Special Servicer pursuant to this Section
11.09, shall be so delivered or otherwise made available through an electronic
medium.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their names to
be signed hereto by their respective officers or representatives thereunto duly
authorized, in each case as of the day and year first above written.
MORTGAGE CAPITAL FUNDING, INC.,
Sponsor
By: /s/ Richard L. Jarocki, Jr.
-------------------------------
Name: Richard L. Jarocki, Jr.
Title: President
CITICORP REAL ESTATE, INC.,
Mortgage Loan Seller
By: /s/ Anne Galbraith
-------------------------------
Name: Anne Galbraith
Title: Authorized Signatory
NATIONSBANC MORTGAGE CAPITAL CORPORATION,
Additional Warranting Party
By: /s/ David A. Gertner
-------------------------------
Name: David A. Gertner
Title: Vice President
CRIIMI MAE SERVICES LIMITED PARTNERSHIP,
Master Servicer and Special Servicer
By: CRIIMI MAE Management, Inc.
its general partner
By: /s/ Brian Hanson
-------------------------------
Name: Brian Hanson
Title: Group Vice President
LASALLE NATIONAL BANK,
Trustee and REMIC Administrator
By: /s/ Amy Bulger
-------------------------------
Name: Amy Bulger
Title: Trust Officer
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<PAGE>
ABN AMRO BANK N.V.,
Fiscal Agent
By: /s/ Robert C. Smolka
-------------------------------
Name: Robert C. Smolka
Title: Group Vice President
By: /s/ Mary C. Casey
-------------------------------
Name: Mary C. Casey
Title: Vice President
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<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 17th day of June 1997, before me, a notary public in and for said
State, personally appeared Richard L. Jarocki known to me to be a Vice President
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.
/s/ Robert E. Sinclair
------------------------------
Notary Public
[Notarial Seal] Robert E. Sinclair
Notary Public State of New York
No. 41-5004356
Qualified in Queens County
Commision Expires November 16, 1998
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<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 17th day of June, 1997, before me, a notary public in and for said
State, personally appeared Anne Galbraith known to me to be an Authorized
Signatory 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.
/s/ Robert E. Sinclair
------------------------------
Notary Public
Robert E. Sinclair
[Notarial Seal] Notary Public State of New York
No. 41-5004356
Qualified in Queens County
Commision Expires November 16, 1998
- 183 -
<PAGE>
STATE OF NORTH CAROLINA )
) ss.:
COUNTY OF MECKLENBERG )
On the 17th day of June 1997, before me, a notary public in and for said
State, personally appeared David A. Gertner known to me to be a Vice President
of CRIIMI MAE MANAGEMENT, INC., the general partner of CRIIMI MAE SERVICES
LIMITED PARTNERSHIP, one of the entities that executed the within instrument,
and also known to me to be the person who executed it as an officer of the
general partner 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.
/s/ Linda M. Hunter
------------------------------
Notary Public
[Notarial Seal]
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<PAGE>
STATE OF MARYLAND )
) ss.:
COUNTY OF MONTGOMERY )
On the 17th day of June 1997, before me, a notary public in and for said
State, personally appeared Brian Hanson known to me to be a Group Vice President
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.
/s/ Julia Briggs White
------------------------------
Notary Public
Julia Briggs White, Notary Public
[Notarial Seal] Montgomery County
State of Maryland
My Commision Expires July 19, 1999
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<PAGE>
STATE OF ILLINOIS )
) ss.:
COUNTY OF COOK )
On the 17th day of June 1997, before me, a notary public in and
for said State, personally appeared Amy Bugler known to me to be a Trust
Officer 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.
/s/ Sandra Alvarez
------------------------------
Notary Public
Sandra Alvarez
Notary Public State of Illinois
[Notarial Seal] My Commission Expires: August 20, 2000
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<PAGE>
STATE OF ILLINOIS )
) ss.:
COUNTY OF COOK )
On the 17th day of June 1997, before me, a notary public in and
for said State, personally appeared Robert C. Smolka known to me to be a
Group Vice President of ABN AMRO BANK N.V., and Mary C. Casey known to me to be
a Vice President 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.
/s/ Sandra Alvarez
------------------------------
Notary Public
Sandra Alvarez
Notary Public State of Illinois
My Commission Expires: August 20, 2000
[Notarial Seal]
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<PAGE>
EXHIBIT A-1
FORM OF CLASS X CERTIFICATE
CLASS X MULTIFAMILY/COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1997-MC1
This is one of a series of multifamily/commercial mortgage pass-through
certificates (collectively, the "Certificates"), issued in multiple classes
(each, a "Class"), which series of Certificates evidences the entire beneficial
ownership interest in a trust fund (the "Trust Fund") consisting primarily of a
pool (the "Mortgage Pool") of multifamily and commercial 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
Certificate as of the Issue Date:
$____________
Date of Pooling and Servicing Class Notional Amount all the Class X
Agreement: June 1, 1997 Certificates as of the Issue Date:
$------------
Mortgage Pool as of the Cut-off Date, after
Issue Date: June __, 1997 deducting payments of principal due on or
before such date (the "Initial Pool
Balance"): $658,541,673.58
First Distribution Date: Trustee and REMIC Administrator:
July 21, 1997 LaSalle National Bank
CRIIMI MAE Services Limited Citicorp Real Estate, Inc.
Partnership
Special Servicer: Fiscal Agent:
CRIIMI MAE Services Limited ABN AMRO Bank N.V.ty:
Partnership
Additional Warranting Par
NationsBanc Mortgage
Capital Corporation
Certificate No. X-___ CUSIP No. _____________
A-1-1
<PAGE>
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 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., CRIIMI MAE SERVICES LIMITED PARTNERSHIP 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
A-1-2
<PAGE>
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 JUNE ___, 1997.
ASSUMING THAT THE MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF PREPAYMENT USED
SOLELY FOR THE PURPOSES OF APPLYING THE OID RULES TO THE CERTIFICATES EQUAL TO A
"CPR" OF 0% (THE "PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH
NO MORE THAN $________ OF OID PER $_________ OF INITIAL CERTIFICATE NOTIONAL
AMOUNT, THE YIELD TO MATURITY IS ______% PER ANNUM AND THE AMOUNT OF OID
ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE THAN $_______ PER
$________ 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 Certificate (obtained by dividing the notional
principal amount of this Certificate (its "Certificate Notional Amount") as of
the Issue Date by the aggregate notional principal balance of all the
Certificates of the same Class as this Certificate (their "Class Notional
Amount") as of the Issue Date) in that certain beneficial ownership interest in
the Trust Fund evidenced by all the Certificates of the same Class as this
Certificate. The Trust Fund was created and the Certificates were issued
pursuant to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Mortgage Capital Funding, Inc., as Sponsor, and the Mortgage
Loan Seller, Additional Warranting Party, Master Servicer, Special Servicer,
Trustee, REMIC Administrator and Fiscal Agent identified above. 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
A-1-3
<PAGE>
Day of the month immediately preceding the month of such distribution (the
"Record Date"), in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed in
respect of the Class of Certificates to which this Certificate belongs, on the
applicable Distribution Date pursuant to the Agreement. All distributions made
under the Agreement in respect of this 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 (5) 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 in
respect of 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 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 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, the Certificates are
exchangeable for new Certificates of the same Class 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 Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No transfer of this Certificate or any interest herein 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 this Certificate
(other than in connection with the initial issuance of the Certificates or a
transfer of this
A-1-4
<PAGE>
Certificate by the Sponsor or any Affiliate of the Sponsor and other than if
this Certificate 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 (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. If this Certificate constitutes a Book-Entry Certificate, and if any
transfer of an interest herein is to be made without registration under the
Securities Act (other than in connection with the initial issuance of the
Certificates or a transfer of any interest in this Certificate 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 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 of Certificates to which this
Certificate belongs, under the Securities Act or any other securities law or to
take any action not otherwise required under this Agreement to permit the
transfer of this Certificate or any interest herein without registration or
qualification. Any Holder or Certificate Owner of this Certificate desiring to
effect such a transfer shall be required 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 this Certificate or any interest herein 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 this
Certificate or such interest herein 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) if this
Certificate or any interest herein is being acquired by or on behalf of a Plan
in reliance on Prohibited Transaction Exemption ("PTE") 90-88 or PTE 93- 31,
such Plan certifies in writing to the Certificate Registrar (or, if this
Certificate constitutes a Book - Entry Certificate, to the Certificate Owner
that desires to effect the transfer) 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) if this Certificate or any interest herein is being acquired with
"plan assets", the Prospective Transferee provides the Certificate Registrar
(or, if this Certificate constitutes a Book-Entry Certificate, the Certificate
Owner that desires to effect the transfer) with a certification to the effect
that the purchase, continued holding and transfer of this Certificate or such
interest herein 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 under Section 401(c) of ERISA; or
(z) if this Certificate is held as a Definitive Certificate, the prospective
Transferee provides the Certificate Registrar with a certification of facts and
an opinion of counsel, obtained at the expense of such prospective 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, the Master Servicer or the
Special Servicer to any obligation in addition to those undertaken in this
Agreement. Each Person who acquires this Certificate or any interest herein
(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 this Certificate or such interest herein on behalf of, as
named fiduciary of, as trustee of, or with assets of a Plan, or (ii)
alternatively, for so long as this Certificate constitutes a Book-Entry
Certificate, that the purchase, continued holding and transfer of this
Certificate or such interest herein 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, Sections I and III of PTCE 95-60 or Section 401(c) of ERISA.
No service charge will be imposed for any registration of 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.
A-1-5
<PAGE>
Notwithstanding the foregoing, for so long as this Certificate is registered in
the name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC, transfers of interests in this Certificate shall be made
through the book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of transfer, the
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 Pool
Balance 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 here for 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.
A-1-6
<PAGE>
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will look
solely to the Trust Fund (to the extent of its rights therein) for distributions
hereunder.
This Certificate shall be construed in accordance with the internal laws of the
State of New York applicable to agreements made and to be performed in said
State, and the obligations, rights and remedies of the Holder hereof shall be
determined in accordance with such laws.
A-1-7
<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
A-1-8
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
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.
- --------------------------------------------------------------
A-1-9
<PAGE>
EXHIBIT A-2
FORM OF CLASS [A-1][A-2][A-3] CERTIFICATE
CLASS [A-1][A-2][A-3] MULTIFAMILY/COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1997-MC1
This is one of a series of multifamily/commercial mortgage pass-through
certificates (collectively, the "Certificates"), issued in multiple classes
(each, a "Class"), which series of Certificates evidences the entire beneficial
ownership interest in a trust fund (the "Trust Fund") consisting primarily of a
pool (the "Mortgage Pool") of multifamily and commercial mortgage loans (the
"Mortgage Loans"), such pool being formed and sold by
MORTGAGE CAPITAL FUNDING, INC.
Pass-Through Rate: Certificate Principal Balance of this
______% per annum Certificate as of the Issue Date:
$--------------
Date of Pooling and Servicing Class Principal Balance of all the Class
Agreement: June 1, 1997 [A-1] [A-2] [A-3] Certificates as of the
Issue Date: $_______________
Cut-off Date: June 1, 1997 Aggregate unpaid principal balance of the
Mortgage Pool as of the Cut-off Date,
Issue Date: June ___, 1997 after deducting payments of principal due
on or before such date (the "Initial Pool
First Distribution Date: Balance"): $658,541,673.58
July 21, 1997
Master Servicer: Trustee and REMIC Administrator:
CRIIMI MAE Services Limited LaSalle National Bank
Partnership Fiscal Agent:
Special Servicer: ABN AMRO Bank N.V.
CRIIMI MAE Services Limited
Partnership Additional Warranting Party:
NationsBanc Mortgage
Mortgage Loan Seller: Capital Corporation
Citicorp Real Estate, Inc.
Certificate No.[A-1][A-2][A-3]-__ CUSIP No. _______________
A-2-1
<PAGE>
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 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., CRIIMI MAE SERVICES LIMITED PARTNERSHIP OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER
PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
THE 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 Certificate (obtained by dividing the principal
balance of this Certificate (its "Certificate Principal Balance") as of the
Issue Date by the aggregate principal balance of all the Certificates of the
same Class as this Certificate (their "Class Principal Balance") as of the Issue
Date) in that certain beneficial ownership interest in the Trust Fund evidenced
by all the Certificates of the same Class as this Certificate. The Trust Fund
was created and the Certificates were issued pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Mortgage Capital
Funding, Inc., as Sponsor, and the Mortgage Loan Seller, Additional Warranting
Party, Master Servicer, Special Servicer, Trustee, REMIC Administrator and
Fiscal Agent identified above. 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
A-2-2
<PAGE>
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 (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 in respect of the Class of
Certificates to which this Certificate belongs, on the applicable Distribution
Date pursuant to the Agreement. All distributions made under the Agreement on
this 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 (5)
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 in respect of 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 here for or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
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.
A-2-3
<PAGE>
The 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, the Certificates are
exchangeable for new Certificates of the same Class 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 Certificates of the same Class 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 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.
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
A-2-4
<PAGE>
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 Pool Balance
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 here for 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.
A-2-5
<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] [A-2] [A-3] Certificates referred to in the
within-mentioned Agreement.
Dated:_____________
LaSalle National Bank,
as Certificate Registrar
By:____________________
Authorized Officer
A-2-6
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
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.
- --------------------------------------------------------------
A-2-7
<PAGE>
EXHIBIT A-3
FORM OF CLASS [B][C][D][E] CERTIFICATE
CLASS [B][C][D][E] MULTIFAMILY/COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1997-MC1
This is one of a series of multifamily/commercial mortgage pass-through
certificates (collectively, the "Certificates"), issued in multiple classes
(each, a "Class"), which series of Certificates evidences the entire beneficial
ownership interest in a trust fund (the "Trust Fund") consisting primarily of a
pool (the "Mortgage Pool") of multifamily and commercial mortgage loans (the
"Mortgage Loans"), such pool being formed and sold by
MORTGAGE CAPITAL FUNDING, INC.
Pass-Through Rate: Certificate Principal Balance of this
_____% per annum Certificate as of the Issue Date:
$-----------------
Date of Pooling and Servicing Class Principal Balance of all the Class
Agreement: June 1, 1997 [B][C][D][E] Certificates as of the Issue
Date: $-----------------
Cut-off Date: June 1, 1997 Aggregate unpaid principal balance of
the Mortgage Pool as of the Cut-off
Issue Date: June ___, 1997 Date, after deducting payments of
principal due on or before such date (the
First Distribution Date: "Initial Pool Balance"): $658,541,673.58
July 21, 1997
Master Servicer: Trustee and REMIC Administrator:
CRIIMI MAE Services Limited LaSalle National Bank
Partnership
Special Servicer: Mortgage Loan Seller:
CRIIMI MAE Services Limited Citicorp Real Estate, Inc.
Partnership
Fiscal Agent:
ABN AMRO Bank N.V.
Additional Warranting Party:
NationsBanc Mortgage
Capital Corporation
Certificate No. [B][C][D][E] - __ CUSIP No. ____________
A-3-1
<PAGE>
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 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., CRIIMI MAE SERVICES LIMITED PARTNERSHIP 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.
THE CLASS OF CERTIFICATES TO WHICH THIS CERTIFICATE BELONGS IS SUBORDINATE TO
ONE OR MORE OTHER CLASSES OF CERTIFICATES OF THE SAME SERIES, AS AND TO THE
EXTENT PROVIDED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
ANY INVESTMENT IN THIS CERTIFICATE BY 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
GIVE RISE TO A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA AND BE SUBJECT
TO TAX UNDER SECTION 4975 OF THE CODE UNLESS A STATUTORY OR ADMINISTRATIVE
EXEMPTION IS AVAILABLE. ACCORDINGLY, ANY TRANSFEREE OF THIS CERTIFICATE OR ANY
INTEREST HEREIN WILL BE DEEMED TO HAVE MADE CERTAIN REPRESENTATIONS AND
WARRANTIES DESCRIBED HEREIN IN THIS REGARD.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
A-3-2
<PAGE>
(A "REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE CODE.
THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF OF 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 Certificate (obtained by dividing the principal
balance of this Certificate (its "Certificate Principal Balance") as of the
Issue Date by the aggregate principal balance of all the Certificates of the
same Class as this Certificate (their "Class Principal Balance") as of the Issue
Date) in that certain beneficial ownership interest in the Trust Fund evidenced
by all the Certificates of the same Class as this Certificate. The Trust Fund
was created and the Certificates were issued pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Mortgage Capital
Funding, Inc., as Sponsor, and the Mortgage Loan Seller, Additional Warranting
Party, Master Servicer, Special Servicer, Trustee, REMIC Administrator and
Fiscal Agent identified above. 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 (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 in respect of the Class of
Certificates to which this Certificate belongs, on the applicable Distribution
Date pursuant to the Agreement. All distributions made under the Agreement in
respect of this 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 (5) 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 in respect of 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
A-3-3
<PAGE>
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 here for or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
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 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, the Certificates are
exchangeable for new Certificates of the same Class 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 Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
Each Person who acquires this Certificate or any interest herein shall be deemed
to have certified that it is neither a Plan nor any Person who is directly or
indirectly purchasing this Certificate or such interest herein on behalf of, as
named fiduciary of, as trustee of, or with assets of a Plan, or alternatively,
that the purchase, continued holding and transfer of this Certificate or such
interest herein 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 under Section 401(c) of ERISA.
No service charge will be imposed for any registration of transfer or exchange
of Certificates, but the Trustee or the Certificate Registrar may require
payment of a sum sufficient
A-3-4
<PAGE>
to cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of 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 Pool
Balance 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 here for 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
A-3-5
<PAGE>
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.
A-3-6
<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][C][D][E] Certificates referred to in the
within-mentioned Agreement.
Dated:_________________
LaSalle National Bank, as Certificate Registrar
By:__________________________________
Authorized Officer
A-3-7
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
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.
- --------------------------------------------------------------
A-3-8
<PAGE>
EXHIBIT A-4
FORM OF CLASS [F][G][H][J][K] CERTIFICATE
CLASS [F][G][H][J][K] MULTIFAMILY/COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1997-MC1
This is one of a series of multifamily/commercial mortgage pass-through
certificates (collectively, the "Certificates"), issued in multiple classes
(each, a "Class"), which series of Certificates evidences the entire beneficial
ownership interest in a trust fund (the "Trust Fund") consisting primarily of a
pool (the "Mortgage Pool") of multifamily and commercial mortgage loans (the
"Mortgage Loans"), such pool being formed and sold by
MORTGAGE CAPITAL FUNDING, INC.
Pass-Through Rate: Certificate Principal Balance of this
____% per annum Certificate as of the Issue Date:
$------------
Date of Pooling and Servicing Class Principal Balance of all Class
Agreement: June 1, 1997 [F][G][H][J][K] Certificates as of the
Issue Date:
$------------
Cut-off Date: June 1, 1997 Aggregate unpaid principal balance of
the Mortgage Pool as of the Cut-off
Issue Date: June ___, 1997 Date, after deducting payments of
principal due on or before such date
First Distribution Date: (the "Initial Pool Balance"):
July 21, 1997 $658,541,673.58
Master Servicer: Trustee and REMIC Administrator:
CRIIMI MAE Services Limited LaSalle National Bank
Partnership Fiscal Agent:
Special Servicer: ABN AMRO Bank N.V.
CRIIMI MAE Services Limited
Partnership Additional Warranting Party:
NationsBanc Mortgage
Mortgage Loan Seller: Capital Corporation
Citicorp Real Estate, Inc.
Certificate No. [F][G][H][J][K]-___ CUSIP No. ____________
A-4-1
<PAGE>
[CLASS F ONLY: 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 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.o]
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., CRIIMI MAE SERVICES LIMITED PARTNERSHIP, 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.
THE CLASS OF CERTIFICATES TO WHICH THIS CERTIFICATE BELONGS, IS SUBORDINATE TO
THE ONE OR MORE CLASSES OF 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-4-2
<PAGE>
(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 JUNE __, 1997. ASSUMING
THAT THE MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF PREPAYMENT USED SOLELY FOR
THE PURPOSES OF APPLYING THE OID RULES TO THE CERTIFICATES EQUAL TO A "CPR" OF
0% (THE "PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE
THAN $__________ OF OID PER $__________ OF INITIAL CERTIFICATE PRINCIPAL
BALANCE, THE YIELD TO MATURITY IS ____% PER ANNUM AND THE AMOUNT OF OID
ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE THAN $_____ PER $_______
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 PREPAY AT ANY PARTICULAR RATE.]
THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
This certifies that [oClass F only: Cede & Co.o] [oClasses G through K only:
____________] is the registered owner of the Percentage Interest evidenced by
this Certificate (obtained by dividing the principal balance of this Certificate
(its "Certificate Principal Balance") as of the Issue Date by the aggregate
principal balance of all the Certificates of the same Class as this Certificate
(their "Class Principal Balance") as of the Issue Date) in that certain
beneficial ownership interest in the Trust Fund evidenced by all the
Certificates of the same Class as this Certificate. The Trust Fund was created
and the Certificates were issued pursuant to a Pooling and Servicing Agreement,
dated as specified above (the "Agreement"), among Mortgage Capital Funding,
Inc., as Sponsor, and the Mortgage Loan Seller, Additional Warranting Party,
Master Servicer, Special Servicer, Trustee, REMIC Administrator and Fiscal Agent
identified above. 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 (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 in respect of the Class of
Certificates to which this Certificate belongs, on the applicable Distribution
Date pursuant to the Agreement. All distributions made under the Agreement in
respect of this 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 (5) Business Days prior to the Record
A-4-3
<PAGE>
Date for such distribution (which wiring instructions may be in the form of a
standing order applicable to all subsequent distributions as well), or otherwise
by check mailed to the address of such Certificateholder appearing in the
Certificate Register. Notwithstanding the above, the final distribution in
respect of 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 here for or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
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 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, the Certificates are
exchangeable for new Certificates of the same Class 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 Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No transfer of this Certificate or any interest herein 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
A-4-4
<PAGE>
transaction which does not require such registration or qualification. In the
event a transfer of this Certificate (other than in connection with the initial
issuance of the Certificates or a transfer of this Certificate by the Sponsor or
any Affiliate of the Sponsor and other than if this Certificate constitutes a
Book-Entry Certificate) 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 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 on. If this Certificate constitutes a Book- Entry Certificate, and if any
transfer of an interest herein is to be made without registration under the
Securities Act (other than in connection with the initial issuance of the
Certificates or a transfer of any interest in this Certificate 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 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 of Certificates to which this
Certificate belongs, 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 this Certificate or any interest herein without registration or
qualification. Any Holder or Certificate Owner of this Certificate desiring to
effect such a transfer shall be required 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 this Certificate or any interest herein 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 this
Certificate or such interest herein 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: (x) if this
Certificate or any interest herein is being acquired with "plan assets", the
prospective Transferee provides the Certificate Registrar (or, if this
Certificate constitutes a Book-Entry Certificate, the Certificate Owner that
desires to effect the transfer) with a certification to the effect that the
purchase, continued holding and transfer of this
A-4-5
<PAGE>
Certificate or such interest herein 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 under
Section 401(c) of ERISA; or (y) if this Certificate is held as a Definitive
Certificate, the prospective transferee provides the Certificate Registrar with
a certification of facts and an opinion of counsel, obtained at the expense of
such prospective 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 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 this Certificate or any interest herein 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 this Certificate or such
interest herein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, or alternatively, if and for so long as the this Certificates
constitutes a Book-Entry Certificate, that the purchase, continued holding and
transfer of this Certificate or such interest herein 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 or under Section 401(c) of
ERISA.
No service charge will be imposed for any registration of 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.
[oFor Class F only: 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.o]
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
A-4-6
<PAGE>
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 Pool Balance 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 here for 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.
A-4-7
<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][G][H][J][K] Certificates referred to in the
within-mentioned Agreement.
Dated:_____________
LaSalle National Bank,
as Certificate Registrar
By:__________________________________
Authorized Officer
A-4-8
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
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.
- --------------------------------------------------------------
A-4-9
<PAGE>
EXHIBIT A-5 FORM OF CLASS [R-I][R-II] CERTIFICATE CLASS [R-I][R-II]
MULTIFAMILY/COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATE, SERIES 1997-MC1 This
is one of a series of multifamily/commercial mortgage pass-through certificates
(collectively, the "Certificates"), issued in multiple classes (each, a
"Class"), which series of Certificates evidences the entire beneficial ownership
interest in a trust fund (the "Trust Fund") consisting primarily of a pool (the
"Mortgage Pool") of multifamily and commercial 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: June 1, 1997 Certificate in the related Class:
100%
Cut-off Date: June 1, 1997 Aggregate unpaid principal balance of the
Mortgage Pool as of the Cut-off Date,
Issue Date: June ___, 1997 after deducting payments of principal due
on or before such date (the "Initial Pool
First Distribution Date: Balance"): $658,541,673.58
July 21, 1997
Master Servicer: Trustee and REMIC Administrator:
CRIIMI MAE Services Limited LaSalle National Bank
Partnership
Special Servicer: Fiscal Agent:
CRIIMI MAE Services Limited ABN AMRO Bank N.V.
Partnership
Mortgage Loan Seller: Additional Warranting Party:
Citicorp Real Estate, Inc. NationsBanc Mortgage
Capital Corporation
Certificate No. [R-I][R-II] - __
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., CRIIMI MAE SERVICES LIMITED PARTNERSHIP, OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THIS
A-5-1
<PAGE>
CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THE CLASS OF CERTIFICATES TO WHICH THIS CERTIFICATE BELONGS, IS SUBORDINATE TO
ONE OR MORE OTHER CLASSES OF 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, THE TRANSFER OF THIS CERTIFICATE IS ALSO SUBJECT TO THE ADDITIONAL
TAX RELATED TRANSFER RESTRICTIONS DESCRIBED HEREIN. IF ANY PERSON BECOMES THE
REGISTERED HOLDER OF THIS CERTIFICATE IN VIOLATION OF SUCH TRANSFER
RESTRICTIONS, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER
FOR ANY PURPOSE HEREUNDER OR UNDER THE POOLING AND SERVICING AGREEMENT REFERRED
TO HEREIN, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE.
This certifies that _____________________ is the registered owner of the
Percentage Interest evidenced by this Certificate (as specified above) in that
certain beneficial ownership interest in the Trust Fund evidenced by all the
Certificates of the same Class as this Certificate. The Trust Fund was created
and the Certificates were issued pursuant to a Pooling and Servicing Agreement,
dated as specified above (the "Agreement"), among Mortgage Capital Funding,
Inc.,
A-5-2
<PAGE>
as Sponsor, and the Mortgage Loan Seller, Additional Warranting Party, Master
Servicer, Special Servicer, Trustee, REMIC Administrator and Fiscal Agent
identified above. 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 (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 in respect of the
Class of Certificates to which this Certificate belongs, on the applicable
Distribution Date pursuant to the Agreement. All distributions made under the
Agreement in respect of this 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 (5) 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 in respect of 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 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 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, the Certificates are exchangeable for new Certificates of the
same Class 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
A-5-3
<PAGE>
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No transfer of this Certificate or any interest herein 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 this Certificate
(other than in connection with the initial issuance of the Certificates or a
transfer of this Certificate 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 of Certificates to which this
Certificate belongs, 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 this Certificate or any interest herein without registration or
qualification. Any Certificateholder desiring to effect such a transfer shall be
required 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 this Certificate or any interest herein shall be made (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 this Certificate or such
interest herein 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: (x) if this Certificate or any
interest herein is being acquired with "plan assets", the prospective Transferee
provides the Certificate Registrar with a certification to the effect that the
purchase, continued holding and transfer of this Certificate or such interest
herein is exempt from the prohibited transaction provisions of Section 406 of
ERISA and Section 4975 of the Code under Sections I and II of Prohibited
Transaction Class Exemption ("PTCE") 95-60 or under Section 401(c) of ERISA; or
(y) 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
A-5-4
<PAGE>
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 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 disposition and to execute all instruments of
transfer and to do all other things necessary in connection with any such
disposition. Each Person holding or acquiring any Ownership Interest in this
Certificate must be a Permitted Transferee 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. 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, 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, that for so long as it retains its
Ownership Interest in this Certificate, it will endeavor to remain a Permitted
Transferee, 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, 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 herein 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. 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; 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
A-5-5
<PAGE>
will not (i) cause either REMIC I or REMIC II to (A) cease to qualify as a REMIC
or (B) be subject to an entity-level tax caused by the Transfer of a Residual
Certificate to a Person which is not a Permitted Transferee or a United States
Person, or (ii) 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.
A "Permitted Transferee" is any Transferee that is not a Disqualified
Organization or a Non-United States Person.
A "Disqualified Organization" is (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 the Federal Home Loan Mortgage Corporation, a majority of whose board of
directors is not selected by such governmental unit), (ii) a foreign government,
any inter national 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 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 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.
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 United States federal income tax
regardless of the source of its income.
No service charge will be imposed for any registration of 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.
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
A-5-6
<PAGE>
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 Pool
Balance 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 here for 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.
A-5-7
<PAGE>
A-5-8
<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] [R-II] Certificates referred to in the
within-mentioned Agreement.
Dated:
LaSalle National Bank,
as Certificate Registrar
By:__________________________________
Authorized Officer
A-5-9
<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.
- --------------------------------------------------------------
A-5-10
<PAGE>
EXHIBIT B-1
FORM I OF TRANSFEROR CERTIFICATE
PURSUANT TO SECTION 5.02(b)
_____________, 19__
LaSalle National Bank
135 South LaSalle Street, Suite 1740
Chicago, Illinois 60674-4107
Attention: Asset-Backed Securities Trust Services-MCFI 1997-MC1
Re: Mortgage Capital Funding, Inc., Multifamily/Commercial Mortgage
Pass-Through Certificates, Series 1997-MC1, Class _______, having an
initial aggregate Certificate [Principal Balance] [Notional Amount] as of
June ___, 1997 (the "Closing Date") of $----------
Dear Sirs:
This letter is delivered to you in connection with the transfer by
__________________ (the "Transferor") to
__________________________________________ (the "Transferee") of the
captioned Certificates (the "Transferred Certificates"), pursuant to
Section 5.02 of the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of June 1, 1997, among Mortgage Capital
Funding, Inc., as Sponsor, Citicorp Real Estate, Inc., as Mortgage Loan
Seller, NationsBanc Mortgage Capital Corporation, as Additional Warranting
Party, CRIIMI MAE Services Limited Partnership, 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 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 Transferred Certificates
with the full right to transfer such Certificates free from any and all
claims and encumbrances whatsoever.
2. Neither the Transferor nor anyone acting on its behalf has (a)
offered, transferred, pledged, sold or otherwise disposed of any
Non-Registered Certificate, any interest in a Non-Registered Certificate or
any other similar security to any person in any manner, (b) solicited any
offer to buy or accept a transfer, pledge or other disposition of any
Non-Registered Certificate, any interest in a Non-Registered Certificate or
any other similar security from any person in any manner, (c) otherwise
approached or negotiated with respect to any Non-Registered Certificate,
any interest in a Non-Registered Certificate or any other similar security
with any person in any manner, (d) made any general solicitation with
respect to any Non-Registered Certificate, any interest in a NonRegistered
Certificate or any other similar security by means of general advertising
or in any other manner, or (e) taken any other action with respect to any
Non-Registered Certificate, any interest in a Non-Registered Certificate or
any other similar security,
B-1-1
<PAGE>
which (in the case of any of the acts described in clauses (a) through (e)
hereof) would constitute a distribution of the Transferred Certificates
under the Securities Act of 1933, as amended (the "Securities Act"), or
would render the disposition of the Transferred Certificates a violation of
Section 5 of the Securities Act or any state securities laws, or would
require registration or qualification of the Transferred Certificates
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 (a "Qualified Institutional Buyer") purchasing for
its own account or for the account of another person that is itself a
Qualified Institutional Buyer. 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 Transferred Certificates in the
case of a U.S. purchaser and within 18 months preceding such date of sale
in the case of 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 Transferred Certificates
in the case of a U.S. purchaser and within 18 months preceding such date of
sale in the case of 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 Transferred Certificates in the
case of a U.S. purchaser and within 18 months preceding such date of sale
in the case of 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 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.
B-1-2
<PAGE>
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; and
(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, as amended, 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.
B-1-3
<PAGE>
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
Transferred Certificates and distributions thereon, (b) the nature,
performance and servicing of the Mortgage Loans, (c) the Pooling and
Servicing Agreement, (d) any credit enhancement mechanism associated with
the Transferred Certificates, and (e) all related matters, that the
Transferee has requested.
Very truly yours,
(Transferee)
By:_____________________
Name:_____________________
Title:_____________________
B-1-4
<PAGE>
EXHIBIT B-2
FORM II OF TRANSFEROR CERTIFICATE
PURSUANT TO SECTION 5.02(b)
_____________, 19__
LaSalle National Bank
135 South LaSalle Street, Suite 1740
Chicago, Illinois 60674-4107
Attention: Asset-Backed Securities Trust Services-MCFI 1997-MC1
Re: Mortgage Capital Funding, Inc., Multifamily/Commercial Mortgage
Pass-Through Certificates, Series 1997-MC1, Class__, having an initial
aggregate Certificate [Principal Balance][Notional Amount] as of June ___,
1997 (the "Closing Date") of $__________
Dear Sirs:
This letter is delivered to you in connection with the transfer by
__________________ (the "Transferor") to
__________________________________________ (the "Transferee") of the captioned
Certificates (the "Transferred Certificates"), pursuant to Section 5.02 of the
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"), dated
as of June 1, 1997, among Mortgage Capital Funding, Inc., as Sponsor, Citicorp
Real Estate, Inc., as Mortgage Loan Seller, NationsBanc Mortgage Capital
Corporation, as Additional Warranting Party, CRIIMI MAE Services Limited
Partnership, 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 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 Transferred Certificates with
the full right to transfer such Certificates free from any and all claims and
encumbrances whatsoever.
2. Neither the Transferor nor anyone acting on its behalf has (a) offered,
transferred, pledged, sold or otherwise disposed of any Non-Registered
Certificate, any interest in a Non-Registered Certificate or any other similar
security to any person in any manner, (b) solicited any offer to buy or accept a
transfer, pledge or other disposition of any Non-Registered Certificate, any
interest in a Non-Registered Certificate or any other similar security from any
person in any manner, (c) otherwise approached or negotiated with respect to any
Non-Registered Certificate, any interest in a Non-Registered Certificate or any
other similar security with any person in any manner, (d) made any general
solicitation with respect to any Non-Registered Certificate, any interest in a
NonRegistered Certificate or any other similar security by means of general
advertising or in
B-2-1
<PAGE>
any other manner, or (e) taken any other action with respect to any
Non-Registered Certificate, any interest in a Non-Registered 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 of the
Transferred Certificates under the Securities Act of 1933, as amended (the
"Securities Act"), or would render the disposition of the Transferred
Certificates a violation of Section 5 of the Securities Act or any state
securities laws, or would require registration or qualification of the
Transferred Certificates pursuant to the Securities Act or any state securities
laws.
Very truly yours,
(Transferor)
By:__________________
Name:_________________
Title:_________________
B-2-2
<PAGE>
EXHIBIT B-3
FORM I OF TRANSFEREE CERTIFICATE
PURSUANT TO SECTION 5.02(b)
FOR TRANSFERS OF DEFINITIVE CERTIFICATES
[FOR QIBs]
_____________, 19__
LaSalle National Bank
135 South LaSalle Street, Suite 1740
Chicago, Illinois 60674-4107
Attention: Asset-Backed Securities Trust Services-MCFI 1997-MC1
Re: Mortgage Capital Funding, Inc., Multifamily/Commercial Mortgage
Pass-Through Certificates, Series 1997-MC1, Class ______, having an initial
aggregate Certificate [Principal Balance] [Notional Amount] as of June ___,
1997 (the "Closing Date") of $__________ Dear Sirs:
This letter is delivered to you in connection with the transfer by
__________________ (the "Transferor") to
__________________________________________ (the "Transferee") of the captioned
Certificates (the "Transferred Certificates"), pursuant to Section 5.02 of the
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"), dated
as of June 1, 1997, among Mortgage Capital Funding, Inc., as Sponsor, Citicorp
Real Estate, Inc., as Mortgage Loan Seller, NationsBanc Mortgage Capital
Corporation, as Additional Warranting Party, CRIIMI MAE Services Limited
Partnership, 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 herein and not otherwise defined shall have the
respective meanings set forth in the Pooling and Servicing Agreement. The
Transferee hereby certifies, represents and warrants to you, as Certificate
Registrar, that:
1. The Transferee is a "qualified institutional buyer" (a "Qualified
Institutional Buyer") as that term is defined in Rule 144A ("Rule 144A") under
the Securities Act of 1933, as amended (the "Securities Act"), and has completed
one of the forms of certification to that effect attached hereto as Annex 1 and
Annex 2. The Transferee is aware that the sale to it is being made in reliance
on Rule 144A. The Transferee is acquiring the Transferred Certificates for its
own account or for the account of another Qualified Institutional Buyer, and
understands that such Transferred Certificates 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
another Qualified 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.
B-3-1
<PAGE>
2. The Transferee has been furnished with all information regarding (a) the
Transferred Certificates and distributions thereon, (b) the nature, performance
and servicing of the Mortgage Loans, (c) the Pooling and Servicing Agreement,
(d) any credit enhancement mechanism associated with the Transferred
Certificates, and (e) all related matters, 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 Acknowledgment below.
Very truly yours,
(Transferee)
By:________________________
Name:_______________________
Title:_______________________
Nominee Acknowledgment
The undersigned hereby acknowledges and agrees that as to the Transferred
Certificates 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:______________________
B-3-2
<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 certificates (the "Transferred
Certificates") described in the Transferee certificate to which this
certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the chief financial officer, a
person fulfilling an equivalent function, or other executive officer of the
entity purchasing the Transferred Certificates (the "Transferee").
2. The Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A ("Rule 144A") under the Securities Act of 1933, as amended,
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 Transferred Certificates in
the case of a U.S. bank, and not more than 18 months preceding such
date of sale in the case of a foreign bank or equivalent institution.
___ Savings and Loan. The Transferee (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is supervised and
examined by a state or federal authority having -------- 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.
B-3-3
<PAGE>
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 Transferred
Certificates in the case of a U.S. savings and loan association, and
not more than 18 months preceding such date of sale in the case of 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.
___ Other. (Please supply a brief description of the entity and a
cross-reference to the paragraph and subparagraph under subsection
(a)(1) of Rule 144A pursuant to which it qualifies. Note that
registered investment companies should complete Annex 2 rather than
this Annex 1.)
=================================================================
-----------------------------------------------------------------
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee, (ii)
securities that are part of an unsold allotment to or subscription by the
Transferee, if the Transferee is a dealer, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase
agreements, (vi) securities owned but subject to a repurchase agreement and
(vii) currency, interest rate and commodity swaps. For purposes of
determining the aggregate amount of securities owned and/or invested on a
discretionary basis by the Transferee, the Transferee did not include any
of the securities referred to in this paragraph.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Transferee, the
Transferee used the cost of such securities to the Transferee, unless the
Transferee reports its securities holdings in its financial statements on
the basis of their market value, and no current information with respect to
the cost of those securities
B-3-4
<PAGE>
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 is familiar with Rule 144A and understands that
the Transferor and other parties related to the Transferred
Certificates are relying and will continue to rely on the statements
made herein because one or more sales to the Transferee may be in
reliance on Rule 144A.
___ ___ Will the Transferee be purchasing the Transferred Certificates
Yes No only for the Transferee's own account?
6. If the answer to the foregoing question is "no," then in each
case where the Transferee is purchasing for an account other than its
own, such account belongs to a third party that is itself a "qualified
institutional buyer" within the meaning of Rule 144A, and the
"qualified institutional buyer" status of such third party has been
established by the Transferee through one or more of the appropriate
methods contemplated by Rule 144A.
7. The Transferee will notify each of the parties to which this
certification is made of any changes in the information and
conclusions herein. Until such notice is given, the Transferee's
purchase of the Transferred Certificates will constitute a
reaffirmation of this certification as of the date of such purchase.
In 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:________________________
B-3-5
<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 certificates (the "Transferred
Certificates") described in the Transferee certificate to which this
certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the chief financial officer,
a person fulfilling an equivalent function, or other executive officer of
the entity purchasing the Transferred Certificates (the "Transferee") or,
if the Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A ("Rule 144A") under the Securities Act of 1933, as
amended, 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 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
B-3-6
<PAGE>
agreements, (v) securities owned but subject to a repurchase agreement and (vi)
currency, interest rate and commodity swaps. For purposes of determining the
aggregate amount of securities owned and/or invested on a discretionary basis by
the Transferee, or owned by the Transferee's Family of Investment Companies, the
securities referred to in this paragraph were excluded.
5. The Transferee is familiar with Rule 144A and understands that the
Transferor and other parties related to the Transferred Certificates are
relying and will continue to rely on the statements made herein because one
or more sales to the Transferee will be in reliance on Rule 144A.
---- ----- Will the Transferee be purchasing the
Yes No Transferred Certificates only for
the Transferee's own account?
6. If the answer to the foregoing question is "no," then in each case
where the Transferee is purchasing for an account other than its own, such
account belongs to a third party that is itself a "qualified institutional
buyer" within the meaning of Rule 144A, and the "qualified institutional
buyer" status of such third party has been established by the Transferee
through one or more of the appropriate methods contemplated by Rule 144A.
7. The undersigned will notify the parties to which this certification
is made of any changes in the information and conclusions herein. Until
such notice, the Transferee's purchase of the Transferred Certificates will
constitute a reaffirmation of this certification by the undersigned as of
the date of such purchase.
Print Name of Transferee
By:_________________
Name:________________
Title:________________
IF AN ADVISER:
Print Name of Transferee
Date:__________________
B-3-7
<PAGE>
EXHIBIT B-4
FORM II OF TRANSFEREE CERTIFICATE
PURSUANT TO SECTION 5.02(b)
FOR TRANSFERS OF DEFINITIVE CERTIFICATES
[FOR INSTITUTIONAL ACCREDITED INVESTORS]
_____________, 19__
LaSalle National Bank
135 South LaSalle Street, Suite 1740
Chicago, Illinois 60674-4107
Attention: Asset-Backed Securities Trust Services-MCFI 1997-MC1
Re: Mortgage Capital Funding, Inc., Multifamily/Commercial Mortgage
Pass-Through Certificates, Series 1997-MC1, Class ________, having an
initial aggregate Certificate [Principal Balance] [Notional Amount] as of
June ___, 1997 (the "Closing Date") of $__________ Dear Sirs:
This letter is delivered to you in connection with the transfer by
__________________ (the "Transferor") to
__________________________________________ (the "Transferee") of the captioned
Certificates (the "Transferred Certificates"), pursuant to Section 5.02 of the
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"), dated
as of June 1, 1997, among Mortgage Capital Funding, Inc., as Sponsor, Citicorp
Real Estate, Inc., as Mortgage Loan Seller, NationsBanc Mortgage Capital
Corporation, as Additional Warranting Party, CRIIMI MAE Services Limited
Partnership, 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 herein and not otherwise defined shall have the
respective meanings set forth in the Pooling and Servicing Agreement. The
Transferee hereby certifies, represents and warrants to you, as Certificate
Registrar, that:
1. The Transferee is acquiring the Transferred Certificates for its own
account for investment and not with a view to or for sale or transfer in
connection with any distribution thereof, in whole or in part, in any manner
which would violate the Securities Act of 1933, as amended (the "Securities
Act"), or any applicable state securities laws.
2. The Transferee understands that (a) the Transferred Certificates have
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 Transferred
Certificates and (c) neither the Transferred Certificates 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
B-4-1
<PAGE>
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 Transferred Certificates, 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 Transferred Certificates 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.
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, MAY BE MADE
EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
4. Neither the Transferee nor anyone acting on its behalf has (a) offered,
transferred, pledged, sold or otherwise disposed of any Transferred Certificate,
any interest in a Transferred Certificate or any other similar security to any
person in any manner, (b) solicited any offer to buy or accept a transfer,
pledge or other disposition of any Transferred Certificate, any interest in a
Transferred Certificate or any other similar security from any person in any
manner, (c) otherwise approached or negotiated with respect to any Transferred
Certificate, any interest in a Transferred Certificate or any other similar
security with any person in any manner, (d) made any general solicitation by
means of general advertising or in any other manner, or (e) taken any other
action, that (in the case of any of the acts described in clauses (a) through
(e) above) would constitute a
B-4-2
<PAGE>
distribution of the Transferred Certificates under the Securities Act, would
render the disposition of the Transferred Certificates a violation of Section 5
of the Securities Act or any state securities law or would require registration
or qualification of the Transferred Certificates pursuant thereto. The
Transferee will not act, nor has it authorized nor will it authorize any person
to act, in any manner set forth in the foregoing sentence with respect to the
Transferred Certificates, any interest in the Transferred Certificates or any
other similar security.
5. The Transferee has been furnished with all information regarding (a) the
Sponsor, (b) the Transferred Certificates and distributions thereon, (c) nature,
performance and servicing of the Mortgage Loans, (d) the Pooling and Servicing
Agreement, (e) any credit enhancement mechanism associated with the Transferred
Certificates, and (f) 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 or an
entity in which all the equity owners come within such paragraphs 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 Transferred
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:___________________
B-4-3
<PAGE>
EXHIBIT B-5
FORM I OF TRANSFEREE CERTIFICATE
PURSUANT TO SECTION 5.02 (b)
FOR TRANSFERS OF INTERESTS IN BOOK-ENTRY CERTIFICATES
[FOR QIBs]
____________, 19__
[TRANSFEROR]
Re: Mortgage Capital Funding, Inc., Multifamily/Commercial Mortgage
Pass-Through Certificates, Series 1997-MC1, Class __, having an initial
aggregate Certificate [Notional Amount] [Principal Balance] as of June ___,
1997 (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
Certificates (the "Transferred Certificates"), which were issued pursuant to the
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"), dated
as of June 1, 1997, among Mortgage Capital Funding, Inc., as Sponsor, Citicorp
Real Estate, Inc., as Mortgage Loan Seller, NationsBanc Mortgage Capital
Corporation, as Additional Warranting Party, CRIIMI MAE Services Limited
Partnership, 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 Transferred Certificates is being made in reliance on Rule 144A.
The Transferee is acquiring such interest in the Transferred Certificates for
its own account or for the account of another Qualified Institutional Buyer.
2. The Transferee understands that (a) the Transferred Certificates have
not been and will not be registered under the Securities Act or registered or
qualified under any applicable state securities laws, (b) none of the Sponsor,
the Trustee or the Certificate Registrar is obligated so to register or qualify
the Transferred Certificates and (c) no interest in the Transferred Certificates
may be resold or transferred unless (i) such Certificates are registered
pursuant to the Securities
B-5-1
<PAGE>
Act and registered or qualified pursuant any applicable state securities laws,
or (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 Transferred Certificates or any 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 Transferred Certificates 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 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, MAY BE MADE EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
B-5-2
<PAGE>
4. The Transferee has been furnished with all information regarding (a) the
Sponsor, (b) the Transferred Certificates and distributions thereon, (c) the
nature, performance and servicing of the Mortgage Loans, (d) the Pooling and
Servicing Agreement, (e) any credit enhancement mechanism associated with the
Transferred Certificates, and (f) all related matters, that it has requested.
Very truly yours,
(Transferee)
By:____________________
Name:__________________
Title:__________________
B-5-3
<PAGE>
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 certificates being transferred in book-entry form
(the "Transferred Certificates") as described in the Transferee certificate to
which this certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the chief financial officer,
a person fulfilling an equivalent function, or other executive officer of
the entity purchasing the Transferred Certificates (the "Transferee").
2. The Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act of 1933, as amended ("Rule
144A") because (i) the Transferee owned and/or invested on a discretionary
basis $______________________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 Transferred Certificates in
the case of a U.S. bank, and not more than 18 months preceding such
date of sale in the case of a foreign bank or equivalent institution.
___ Savings and Loan. The Transferee (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is supervised and
examined by a state or federal authority having -------- 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.
B-5-4
<PAGE>
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 Transferred
Certificates in the case of a U.S. savings and loan association, and
not more than 18 months preceding such date of sale in the case of a
foreign savings and loan association or equivalent institution.
___ Broker-dealer. The Transferee is a dealer registered pursuant to
Section 15 of the ------------- Securities Exchange Act of 1934, as
amended.
___ Insurance Company. The Transferee is an insurance company whose
primary and predominant business activity is the writing of insurance
or the reinsuring of risks underwritten by insurance companies and
which is subject to supervision by the insurance commissioner or a
similar official or agency of a state, U.S. territory or the District
of Columbia.
___ State or Local Plan. The Transferee is a plan established and
maintained by a state, its political subdivisions, or any agency or
instrumentality of the state or its political subdivisions, for the
benefit of its employees.
___ ERISA Plan. The Transferee is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of
1974.
___ Investment Advisor. The Transferee is an investment advisor
registered under the Investment Advisers Act of 1940, as amended.
___ Other. (Please supply a brief description of the entity and a
cross-reference to the paragraph and subparagraph under subsection
(a)(1) of Rule 144A pursuant to which it qualifies. Note that
registered investment companies should complete Annex 2 rather than
this Annex 1.)
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee, (ii)
securities that are part of an unsold allotment to or subscription by the
Transferee, if the Transferee is a dealer, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase
agreements, (vi) securities owned but subject to a repurchase agreement and
(vii) currency, interest rate and commodity swaps. For purposes of
determining the aggregate amount of securities owned and/or invested on a
discretionary basis by the Transferee, the Transferee did not include any
of the securities referred to in this paragraph.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Transferee, the
Transferee used the cost of such securities to the Transferee, unless the
Transferee reports its securities holdings in its financial statements on
the basis of their market value, and no current information with respect to
the cost of those securities
B-5-5
<PAGE>
has been published, in which case the securities were valued at market. Further,
in determining such aggregate amount, the Transferee may have included
securities owned by subsidiaries of the Transferee, but only if such
subsidiaries are consolidated with the Transferee in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Transferee's direction.
However, such securities were not included if the Transferee is a
majority-owned, consolidated subsidiary of another enterprise and the Transferee
is not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Transferee acknowledges that it is familiar with Rule 144A and
understands that the Transferor and other parties related to the Transferred
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Transferee may be in reliance on Rule 144A.
___ ___ Will the Transferee be purchasing the
Yes No Transferred Certificates only for the
Transferee's own account?
6. If the answer to the foregoing question is "no", then in each case where
the Transferee is purchasing for an account other than its own, such account
belongs to a third party that is itself a "qualified institutional buyer" within
the meaning of Rule 144A, and the "qualified institutional buyer" status of such
third party has been established by the Transferee through one or more of the
appropriate methods contemplated by Rule 144A.
7. The Transferee will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Transferee's purchase of the Transferred
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In 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:___________________
B-5-6
<PAGE>
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 certificates being transferred in book-entry form
(the "Transferred Certificates") as described in the Transferee certificate to
which this certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the chief financial officer,
a person fulfilling an equivalent function, or other executive officer of
the entity purchasing the Transferred Certificates (the "Transferee") or,
if the Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act of 1933, as amended ("Rule
144A"), because the Transferee is part of a Family of Investment Companies
(as defined below), is an executive officer of the investment adviser (the
"Adviser").
2. The Transferee is a "qualified institutional buyer" as defined in
Rule 144A because (i) the Transferee is an investment company registered
under the Investment Company Act of 1940, as amended, and (ii) as marked
below, the Transferee alone owned and/or invested on a discretionary basis,
or the Transferee's Family of Investment Companies owned, at least
$100,000,000 in securities (other than the excluded securities referred to
below) as of the end of the Transferee's most recent fiscal year. For
purposes of determining the amount of securities owned by the Transferee or
the Transferee's Family of Investment Companies, the cost of such
securities was used, unless the Transferee or any member of the
Transferee's Family of Investment Companies, as the case may be, reports
its securities holdings in its financial statements on the basis of their
market value, and no current information with respect to the cost of those
securities has been published, in which case the securities of such entity
were valued at market.
____ The Transferee owned and/or invested on a discretionary basis
$____________ in securities (other than the excluded securities
referred to below) as of the end of the Transferee's most recent
fiscal year (such amount being calculated in accordance with Rule
144A).
____ The Transferee is part of a Family of Investment Companies which
owned in the aggregate $______________ in securities (other than the
excluded securities referred to below) as of the end of the
Transferee's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because
one investment adviser is a majority owned subsidiary of the other).
B-5-7
<PAGE>
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part
of the Transferee's Family of Investment Companies, (ii) bank deposit notes
and certificates of deposit, (iii) loan participations, (iv) repurchase
agreements, (v) securities owned but subject to a repurchase agreement and
(vi) currency, interest rate and commodity swaps. For purposes of
determining the aggregate amount of securities owned and/or invested on a
discretionary basis by the Transferee, or owned by the Transferee's Family
of Investment Companies, the securities referred to in this paragraph were
excluded.
5. The Transferee is familiar with Rule 144A and understands that the
Transferor and other parties related to the Transferred Certificates are
relying and will continue to rely on the statements made herein because one
or more sales to the Transferee will be in reliance on Rule 144A.
____ ____ Will the Transferee be purchasing
Yes No the Transferred Certificates only for
the Transferee's own account?
6. If the answer to the foregoing question is "no", then in each case
where the Transferee is purchasing for an account other than its own, such
account belongs to a third party that is itself a "qualified institutional
buyer" within the meaning of Rule 144A, and the "qualified institutional
buyer" status of such third party has been established by the Transferee
through one or more of the appropriate methods contemplated by Rule 144A.
7. The undersigned will notify the parties to which this certification
is made of any changes in the information and conclusions herein. Until
such notice, the Transferee's purchase of the Transferred Certificates will
constitute a reaffirmation of this certification by the undersigned as of
the date of such purchase.
Print Name of Transferee or Adviser
By:_________________________________
Name:_______________________________
Title:______________________________
IF AN ADVISER:
Print Name of Transferee
Date:_______________________________
B-5-8
<PAGE>
EXHIBIT B-6
FORM II OF TRANSFEREE CERTIFICATE
PURSUANT TO SECTION 5.02(b)
FOR TRANSFERS OF INTERESTS IN BOOK-ENTRY CERTIFICATES
[FOR INSTITUTIONAL ACCREDITED INVESTORS]
____________, 19__
[TRANSFEROR]
Re: Mortgage Capital Funding, Inc., Multifamily/Commercial Mortgage Pass-
Through Certificates, Series 1997-MC1, Class __, having an initial
aggregate Certificate [Notional Amount] [Principal Balance] as of June ___,
1997 (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
Certificates (the "Transferred Certificates"), which were issued pursuant to the
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"), dated
as of June 1, 1997, among Mortgage Capital Funding, Inc., as Sponsor, Citicorp
Real Estate, Inc., as Mortgage Loan Seller, NationsBanc Mortgage Capital
Corporation, as Additional Warranting Party, CRIIMI MAE Services Limited
Partnership, 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 Transferred Certificates
have not been and will not be registered under the Securities Act or
registered or qualified under any applicable state securities laws, (b)
none of the Sponsor, the Trustee or the Certificate Registrar is obligated
so to register or qualify the Transferred Certificates, and (c) no interest
in the Transferred Certificates may be resold or transferred unless (i)
such Certificates are registered pursuant to the Securities Act and
registered or qualified pursuant any applicable state securities laws, or
(ii) such interest is sold or transferred in a transaction which is exempt
from such registration and
B-6-1
<PAGE>
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 Transferred Certificates or any 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
Transferred Certificates 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 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, MAY BE
MADE EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
4. Neither the Transferee nor anyone acting on its behalf has (a)
offered, transferred, pledged, sold or otherwise disposed of any
Transferred Certificate, any interest in a Transferred Certificate or any
other similar security to any person in any manner, (b) solicited any offer
to buy or accept a transfer, pledge or other disposition of any Transferred
Certificate, any interest in a Transferred Certificate or any other similar
security from any person in any manner, (c) otherwise approached or
negotiated with respect to any Transferred Certificate, any interest in a
Transferred Certificate or any other similar security with any person in
any manner, (d) made any general solicitation with respect to any
Transferred Certificate, any interest in a Transferred Certificate or any
other similar security by means of general advertising or in any other
manner, or (e) taken any other action with respect to any Transferred
Certificate, any interest in a Transferred Certificate or any other similar
security, which (in the case of any of the acts described in clauses (a)
through (e) above) would constitute a distribution of the Transferred
Certificates under the Securities Act, would render the disposition of the
Transferred Certificates a violation of Section
B-6-2
<PAGE>
5 of the Securities Act or any state securities law or would require
registration or qualification of the Transferred Certificates pursuant
thereto. The Transferee will not act, nor has it authorized nor will it
authorize any person to act, in any manner set forth in the foregoing
sentence with respect to the Transferred Certificates, any interest in the
Transferred Certificates or any other similar security.
5. The Transferee has been furnished with all information regarding
(a) the Sponsor, (b) the Transferred Certificates and distributions
thereon, (c) the Pooling and Servicing Agreement and the Trust Fund created
pursuant thereto, (d) the nature, performance and servicing of the Mortgage
Loans, (e) any credit enhancement mechanism associated with the Transferred
Certificates, and (f) 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 Transferred 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 investment and can afford a complete loss of such
investment.
Very truly yours,
(Transferee)
By:__________________
Name:________________
Title:_______________
B-6-3
<PAGE>
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/She 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 1997-MC1, 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/she 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, 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 "non-economic residual interest" within the meaning of Treasury
C-1-1
<PAGE>
Regulation ss.1.860E-1(c) and that the transferor of a "non-economic 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 disposition 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 be bound by and to
comply with such provisions.
9. No purpose of the Transferee relating to its purchase or any sale
of the Residual 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.
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
Pooling and Servicing 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
ss.1.860E-1(c)(4)(i) and has satisfied the requirements of such provision.
C-1-2
<PAGE>
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.
C-1-3
<PAGE>
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of
Directors, by its [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/she
executed the same as his/her free act and deed and the free act and deed of the
Transferee
Subscribed and sworn before me this ___ day of ______________, 199__.
-----------------------------------
NOTARY PUBLIC
COUNTY OF ___________
STATE OF _____________
My Commission expires the _________ day of _____________, 19__.
C-1-4
<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 Certificates, Series 1997-MC1, 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 June 1, 1997, among Mortgage Capital
Funding, Inc., as Sponsor, Citicorp Real Estate, Inc., as Mortgage Loan Seller,
NationsBanc Mortgage Capital Corporation, as Additional Warranting Party, CRIIMI
MAE Services Limited Partnership, 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 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
C-2-1
<PAGE>
ss.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:_______________________________
C-2-2
<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 that certain Pooling and Servicing Agreement
dated as of June 1, 1997 (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, CRIIMI MAE Services Limited Partnership, as Master Servicer
and as Special Servicer, 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:_______
- ----------------------------------------------------------------------------
D-1
<PAGE>
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)
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.
CRIIMI MAE SERVICES LIMITED PARTNERSHIP
By:_______________________________________
Name:_____________________________________
Title:_____________________________________
D-2
<PAGE>
EXHIBIT E
FORM OF REO STATUS REPORT
E-1
<PAGE>
SCHEDULE I
MORTGAGE LOAN SCHEDULE
S-I-1
<PAGE>
SCHEDULE II
SUB-SERVICING AGREEMENTS IN EFFECT
AS OF THE CLOSING DATE
S-II-1
