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: November 25, 1997
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(Date of earliest event reported)
MORTGAGE CAPITAL FUNDING, INC.
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(Sponsor)
(Issuer in Respect of
Multifamily/Commercial Mortgage Pass-Through Certificates Series 1997-MC2)
(Exact name of registrant as specified in charter)
Delaware 333-24489 13-3408716
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(State or other juris- (Commission (I.R.S. Employer
diction of organization) File Nos.) Identification No.)
399 Park Avenue, New York, New York 10043
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code (212) 793-5880
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(Former name, former address and former fiscal year, if changed since last
report.)
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Item 2. Acquisition or Disposition of Assets
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Description of the Certificates and the Mortgage Pool
On November 25, 1997, a single series of certificates, entitled Mortgage
Capital Funding, Inc., Multifamily/Commercial Mortgage Pass-Through
Certificates, Series 1997-MC2 (the "Certificates"), was issued pursuant to a
pooling and servicing agreement (the "Pooling and Servicing Agreement"),
attached hereto as Exhibit 4.1, dated as of November 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, Midland Loan Services, L.P., as Master Servicer,
CRIIMI MAE Services Limited Partnership, as Special Servicer, LaSalle National
Bank, as Trustee and REMIC Administrator, and ABN AMRO Bank N.V., as Fiscal
Agent. The Certificates consist of fourteen classes identified as the "Class X
Certificates", the "Class A-1 Certificates", the "Class A-2 Certificates", the
"Class B Certificates", the "Class C Certificates", the "Class D Certificates",
the "Class E Certificates", the "Class F Certificates", the "Class G
Certificates", the "Class H Certificates", the "Class J Certificates", the
"Class K Certificates", 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 181
conventional, fixed-rate, multifamily and commercial, mortgage loans (the
"Mortgage Loans"), having, as of the close of business on November 1, 1997 (the
"Cut-off Date"), an aggregate principal balance of $870,577,289 (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 November 20, 1997, between
the Sponsor and CREI. The Sponsor sold the Class X, Class A-1, Class A-2, Class
B, Class C, Class D and Class E Certificates to Citibank, N.A. and NationsBanc
Montgomery Securities, Inc. ("NMSI"), as underwriters (the "Underwriters"),
pursuant to an underwriting agreement (the "Underwriting Agreement") dated
November 20, 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 $143,471,137. The Class A-2 Certificates have an
initial Certificate Balance of $465,932,965. The Class B Certificates have an
initial Certificate Balance of $52,234,637. The Class C Certificates have an
initial Certificate Balance of $43,528,864. The Class D Certificates have an
initial Certificate Balance of $39,175,978. The Class E Certificates have an
initial Certificate Balance of $26,117,318.
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
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(a) Not applicable
(b) Not applicable
(c) Exhibits
Exhibit No. Description
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1.1 Underwriting Agreement dated November 20, 1997, among
Mortgage Capital Funding, Inc., as Sponsor, and
Citibank, N.A. and NationsBanc Montgomery Securities,
Inc., as Underwriters.
4.1 Pooling and Servicing Agreement dated as of November 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, Midland Loan Services, L.P., as Master
Servicer, CRIIMI MAE Services Limited Partnership, as
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: November 25, 1997
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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:_______________
Anne Galbraith
Vice President
Dated: November 25, 1997
5
Mortgage Capital Funding, Inc.
$770,469,899 (Approximate)
Multifamily/Commercial
Mortgage Pass-Through Certificates, Series 1997-MC2
Class X, Class A-1, Class A-2, Class B, Class C, Class D and Class E
Underwriting Agreement
as of November 20, 1997
NationsBanc Montgomery Securities, 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 Montgomery Securities, 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-MC2 which are identified on
Schedule I hereto (collectively, the "Registered Certificates"), each having the
initial aggregate stated principal amount (the initial "Class Principal
Balance") or, in the case of the Class X Certificates, initial aggregate
notional principal amount (the initial "Class Notional Amount") set forth on
Schedule I. The Registered Certificates, together with the Class F, Class G,
Class H, Class J, Class K, 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 to be created by MCFI (such
trust, the "Trust"; and such assets collectively, the "Trust Fund"). The Trust
Fund consists 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 November 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,
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an aggregate principal balance of $870,577,289 (subject to a variance of plus or
minus 5.0%). The Mortgage Loans (or the right to have such transferred to the
Trust) 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
"CREI/MCFI 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 Mortgage Loans, the " Direct NMCC Mortgage
Loans"), pursuant to a mortgage loan purchase agreement dated as of the date
hereof (the "NMCC/CREI Mortgage Loan Purchase Agreement"), between CREI and
NMCC. Additionally, certain of the Mortgage Loans will be acquired by CREI from
Midland Commercial Financing Corp. ("Midland Commercial"; and such Mortgage
Loans, the "Midland/NMCC Mortgage Loans"; and, collectively with the Direct NMCC
Mortgage Loans, the "NMCC Mortgage Loans"), pursuant to a mortgage loan purchase
agreement, dated as of the date hereof (the "Midland/CREI Mortgage Loan Purchase
Agreement"), between Midland Commercial and CREI. The Midland/NMCC Mortgage
Loans were acquired by Midland Commercial from NMCC, pursuant to a mortgage loan
purchase agreement, dated as of the date hereof, between Midland Commercial and
NMCC. The Mortgage Loans other than the NMCC Mortgage Loans are collectively
referred to herein as the "CREI Mortgage Loans". Certain of the CREI Mortgage
Loans will be acquired by CREI from PNC Bank, National Association ("PNC Bank"),
pursuant to a mortgage loan purchase agreement, dated as of the date hereof,
between CREI and PNC Bank. 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 is to be created and the Certificates are to be
issued under a pooling and servicing agreement, dated as of November 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, Midland Loan Services, L.P. as master servicer (the
"Master Servicer"), CRIIMI MAE Services Limited Partnership as special servicer
(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 has been
filed with the Securities and Exchange Commission (the "Commission"), and became
effective under the Securities Act of 1933, as amended (the "Securities Act");
such registration statement includes 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.
Such registration statement, as amended to the date of this Agreement, is
hereinafter referred to as the "Registration Statement"; 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
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reference herein to the terms "amend", "amendment" or "supplement" with respect
to the Registration Statement 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).
(b) The Registration Statement, as of the date it 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 Statement 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, NMCC or Midland Commercial 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 Statement, as of the date of the Prospectus Supplement, which
were not described or filed as required.
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(c) As of the Closing Date, the Registered Certificates will be duly
authorized by MCFI, and, when the Registered Certificates have been duly
executed and authenticated in the manner contemplated in the Pooling and
Servicing Agreement and have been delivered to and paid for by the Underwriters
pursuant to this Agreement, the Registered Certificates will be validly issued
and outstanding and entitled to the benefits provided by the Pooling and
Servicing Agreement.
(d) KPMG Peat Marwick is an independent public accountant with respect
to MCFI as required by the Securities Act and the rules and regulations
thereunder.
(e) As of the Closing Date, the Pooling and Servicing Agreement will
have been duly authorized, executed and delivered by MCFI and, assuming the
valid authorization, execution and delivery thereof by the other parties
thereto, will constitute a valid and binding agreement of MCFI enforceable in
accordance with its terms, except as the same may be limited by bankruptcy,
insolvency, reorganization or other laws relating to or affecting the
enforcement of creditors' rights and by general principles of equity.
(f) This Agreement has been duly authorized, executed and delivered by
MCFI and, assuming the valid authorization, execution and delivery hereof by
each of the Underwriters, constitutes a valid and binding obligation of MCFI
enforceable in accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, reorganization or other laws relating to or affecting
the enforcement of creditors' rights, by general principles of equity and by
public policy considerations underlying the securities laws, to the extent that
such public policy considerations limit the enforceability of the provisions of
this Agreement that purport to provide indemnification for securities laws
liabilities.
(g) MCFI has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its business as
described in the Prospectus.
(h) MCFI is not aware of (i) any request by the Commission for any
further amendment of the Registration Statement or the Prospectus or for any
additional information, (ii) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement 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 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.
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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 respective portions of the Class Principal
Balance or Class Notional Amount, as the case may be, of each class of
Registered Certificates set forth on Schedule I hereto, at the purchase price
for each such class as set forth on such Schedule I.
3. Delivery and Payment. Delivery of and payment for the Registered
Certificates shall be made in the manner, on the date and at the time specified
in Schedule I hereto, which date and time may be changed by agreement among the
Underwriters and MCFI (such date and time of delivery of and payment for the
Registered Certificates being hereinafter referred to as the "Closing Date").
Delivery of each Underwriter's allotment of the Registered Certificates shall be
made to the 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 Statement
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
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Certificates, will also promptly advise each Underwriter (i) when any amendment
to the Registration Statement 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 Statement 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 Statement or the institution or
threatening of any proceeding for that purpose and (iv) of the receipt by MCFI
of any notification with respect to the suspension of the qualification of the
Registered Certificates for sale in any jurisdiction or the institution or
threatening of any proceeding for such purpose. MCFI will use its best efforts
to prevent the issuance of any such stop order and, if issued, to obtain as soon
as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Registered
Certificates is required to be delivered under the Securities Act, (i) any event
occurs as a result of which the Prospectus, as then amended or supplemented,
would include any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or (ii) it shall be
necessary to revise, amend or supplement the Prospectus to comply with the
Securities Act or the rules and regulations of the Commission thereunder, MCFI
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
Statement (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
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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 Statement. Notwithstanding the two
preceding sentences, MCFI shall have no obligation to file materials provided by
the Underwriters pursuant to or as contemplated by Section 9 which, in the
reasonable determination of MCFI after making reasonable efforts to consult with
the Underwriters, are not required to be filed pursuant to the No-Action Letters
(as defined in Section 9 below), or which contain erroneous information or
contain any untrue statement of a material fact, or which, when read in
conjunction with the Prospectus, omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; it
being understood, however, that MCFI shall have no obligation to review or pass
upon the accuracy or adequacy of, or to correct, any Computational Materials or
ABS Term Sheets provided by the Underwriters to MCFI pursuant to or as
contemplated by Section 9 hereof.
(f) MCFI will make generally available to Registered Certificateholders
as soon as practicable, but in any event not later than eighteen months after
the filing of the Prospectus pursuant to Rule 424(b) under the Securities Act,
an earnings statement (which need not be audited) with respect to the Mortgage
Pool complying with Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder (including at the option of MCFI, Rule
158 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 delivered 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
Statement 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;
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(B) The Registered Certificates have been duly
authorized by MCFI and, when the Registered Certificates have
been duly executed and authenticated in the manner
contemplated in the Pooling and Servicing Agreement and have
been delivered to and paid for by the Underwriters pursuant to
this Agreement, the Registered Certificates will be 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 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 is not required to be
registered under the Investment Company Act of 1940, as
amended;
(E) The Registration Statement has become effective
under the Securities Act, and, to the best of such counsel's
knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted and are pending or have been
threatened under the Securities Act;
(F) The Registration Statement, at the time the
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
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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
Statement, as of the date of the Prospectus Supplement, which
were not described or filed as required; and
(I) This Agreement has been duly authorized, executed
and delivered by MCFI.
In giving his opinion, counsel to MCFI, Stephen E. Dietz,
Esq., shall additionally state that, based on his review (or review by
attorneys under his supervision) of the statements contained in the
Registration Statement 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.
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(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 describe certain matters of New York
or federal law or legal conclusions with respect thereto,
provide a fair and accurate summary of such matters and
conclusions; and
(B) As described in the Prospectus Supplement and
assuming compliance with the provisions of the Pooling and
Servicing Agreement, (1) REMIC I will qualify as a 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
B, Class C, Class D, Class E, Class F, Class G, Class H, Class
J and Class K 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
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by the parties thereto. Such opinion may be qualified as an opinion
only on 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;
(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
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<PAGE>
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 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 November ___, 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.
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<PAGE>
(g) KPMG Peat Marwick shall have furnished to MCFI and such Underwriter
a letter or letters, each in form and substance satisfactory to MCFI, relating
to the Computational Materials and ABS Terms Sheets of such Underwriter filed in
accordance with Section 5(e) and dated the date of the related Current Report on
Form 8-K and stating in effect that:
(i) using the assumptions and methodology used by such
Underwriter, all of which shall be described by reference in the
letter, they have recalculated the numerical data and dates set forth
in such Computational Materials and ABS Term Sheets of such Underwriter
(or portions thereof) attached to such letter, compared the results of
their calculations to the corresponding items in such Computational
Materials and ABS Term Sheets (or portions thereof) and found such
items to be in agreement with the respective results of such
calculation;
(ii) if such Computational Materials and ABS Term Sheets
include data reflecting the distribution of interest at other than a
fixed rate, or reflecting other characteristics which give rise to the
use of tables in such Computational Materials and ABS Term Sheets, such
letter shall also set forth such other statements as are customarily
set forth by KPMG Peat Marwick in such letter with respect to such
data; and
(iii) they have performed certain specified procedures as a
result of which they have determined that the information of an
accounting, financial or statistical nature set forth in such
Computational Materials and ABS Term Sheets agrees with the data sheet
or computer tape prepared by the Mortgage Loan Seller or NMCC, unless
otherwise indicated in such letter.
(h) MCFI and the Underwriters shall have received an opinion of
counsel, dated the Closing Date, from Cadwalader, Wickersham & Taft, stating
that, based on conferences and telephone conversations with representatives of
CREI, NMCC, PNC Bank, the Underwriters, 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,
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<PAGE>
materially impairs the investment quality of the Registered Certificates so as
to make it impractical or inadvisable to proceed with the public offering or the
delivery of the Registered Certificates as contemplated by the Prospectus.
(j) The Registered Certificates shall have been assigned ratings no
less than those set forth on Schedule I and such ratings shall not have been
rescinded.
7. Indemnification and Contribution. (a) MCFI agrees to indemnify and
hold harmless each Underwriter and each person who controls such Underwriter
within the meaning of either the Securities Act or the Exchange Act against any
and all losses, claims, damages or liabilities, joint or several, to which it or
any of them may become subject under the Securities Act, the Exchange Act, or
other federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement 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,
in accordance with the terms thereof, covered by the indemnification provided by
NMCC pursuant to the NMCC/CREI Mortgage Loan Purchase Agreement or the
NMCC/Midland Mortgage Loan Purchase Agreement or covered by the indemnification
provided by CREI pursuant to the CREI/MCFI 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 by
reference into the Registration Statement or Prospectus 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 Statement 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)
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<PAGE>
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"), including, without
limitation, as part of the Prospectus, and such Underwriter failed to notify
such person thereof or to deliver to such person corrected Computational
Materials and/or ABS Term Sheets, as applicable, or the Prospectus correcting
such Collateral Error, if 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 Statement 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 Statement 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
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<PAGE>
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 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 Statement 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).
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<PAGE>
(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.
(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)
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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 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.
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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 November 6, 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 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
-19-
<PAGE>
investors in the Registered Certificates comply with the requirements
of the No-Action Letters;
(iii) on the respective dates any such Computational Materials
and/or ABS Term Sheets with respect to the Registered Certificates
referred to in Section 9(b)(ii) were last furnished by such Underwriter
to each prospective investor, on the date of delivery thereof to MCFI
pursuant to or as contemplated by this Section 9 and on the Closing
Date, such Computational Materials and/or ABS Term Sheets did not and
will not include any untrue statement of a material fact, or, when read
in conjunction with the Prospectus, omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading;
(iv) at the time any Computational Materials or ABS Term
Sheets with respect to the Registered Certificates were furnished to a
prospective investor and on the date hereof, the Underwriters
possessed, and on the date of delivery of such materials to MCFI
pursuant to or as contemplated by this Section 9 and on the Closing
Date, the Underwriters will possess, the capability, knowledge,
expertise, resources and systems of internal control necessary to
ensure that such Computational Materials and/or ABS Term Sheets conform
to the representations and warranties of the Underwriters contained in
subparagraphs (ii) and (iii) above of this paragraph (b);
(v) all Computational Materials and ABS Term Sheets with
respect to the Registered Certificates furnished by such Underwriter to
potential investors contained and will contain a legend, prominently
displayed on the first page thereof, to the effect that MCFI has not
prepared, reviewed or participated in the preparation of such
Computational Materials or ABS Term Sheets, is not responsible for the
accuracy thereof and has not authorized the dissemination thereof;
(vi) all Collateral Term Sheets with respect to the Registered
Certificates furnished by such Underwriter to potential investors
contained and will contain a legend, prominently displayed on the first
page thereof, indicating that the information contained therein will be
superseded by the description of the Mortgage Loans contained in the
Prospectus and, except in the case of the initial Collateral Term
Sheet, that such information supersedes the information in all prior
Collateral Term Sheets; and
(vii) on and after the date hereof, such Underwriter shall not
deliver or authorize the delivery of any Computational Materials, ABS
Term Sheets or other materials relating to the Registered Certificates
(whether in written, electronic or other format) to any potential
investor unless such potential investor has received a Prospectus prior
to or at the same time as the delivery of such Computational Materials,
ABS Term Sheets or other materials.
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
-20-
<PAGE>
(except any Corrected Collateral Error, with respect to materials prepared after
the receipt by the Underwriters from MCFI of notice of such Corrected Collateral
Error or materials superseding or correcting such Corrected Collateral Error).
(c) The Underwriters acknowledge and agree that MCFI has not authorized
and will not authorize the distribution of any Computational Materials or ABS
Term Sheets with respect to the Registered Certificates to any prospective
investor, and agree that any such Computational Materials and/or ABS Term Sheets
furnished to prospective investors shall include a disclaimer in the form set
forth in paragraph (b)(v) above. The Underwriters agree that they will not
represent to potential investors that any Computational Materials and/or ABS
Term Sheets with respect to the Registered Certificates were prepared or
disseminated on behalf of MCFI.
(d) If, at any time when a prospectus relating to the Registered
Certificates is required to be delivered under the Securities Act prior to 90
days from the date hereof, it shall be necessary in the opinion of the
Underwriters or their counsel to amend or supplement the Prospectus as a result
of an untrue statement of a material fact contained in any Computational
Materials or ABS Term Sheets provided by the Underwriters pursuant to or as
contemplated by this Section 9 or the omission to state a material fact
required, when considered in conjunction with the Prospectus, to be stated
therein or necessary to make the statements therein, when read in conjunction
with the Prospectus, not misleading, or if it shall be necessary to amend or
supplement any Current Report to comply with the Securities Act or the rules
thereunder, the Underwriters, at their expense, allocated between them in
accordance with the NMSI 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).
-21-
<PAGE>
(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 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.
-22-
<PAGE>
11. Default by an Underwriter. If either Underwriter shall fail to
purchase and pay for any of the Registered Certificates agreed to be purchased
by such Underwriter hereunder and such failure to purchase shall constitute a
default in the performance of its obligations under this Agreement, the
remaining Underwriter shall be obligated to take up and pay for the Registered
Certificates that the defaulting Underwriter agreed but failed to purchase;
provided, however, that in the event that the initial principal amount or
notional amount, as the case may be, of Registered Certificates that the
defaulting Underwriter agreed but failed to purchase shall exceed 10% of (a) the
aggregate Class Principal Balance of the Class A-1, Class A-2, Class B, Class C,
Class D and Class E Certificates set forth in Schedule I hereto or (b) the Class
Notional Amount of the Class X Certificates set forth in Schedule I hereto, as
the case may be, the remaining 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 negotiated, 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.
-23-
<PAGE>
16. Notices. All communications hereunder will be in writing and
effective only upon receipt and, if sent to NationsBanc, will be delivered to
NationsBanc Montgomery Securities, Inc., NationsBank Corporate Center, 100 North
Tryon Street, 11th Floor, Charlotte, North Carolina 28255, Attention: Mr. David
A. Gertner, with a copy to Robert W. Long, Esq., at NationsBank Corporate
Center, 100 North Tryon Street, 20th Floor, Charlotte, North Carolina 28255; if
sent to Citibank, will be delivered to Citibank, N.A., 399 Park Avenue, 3rd
floor, New York, New York 10043, Attention: Mr. Richard L. Jarocki. Jr.; 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:
Name:
Title:
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
NATIONSBANC MONTGOMERY SECURITIES, INC.
By:
Name:
Title:
CITIBANK, N.A.
By:
Name:
Title:
-25-
<PAGE>
SCHEDULE I
As used in this Agreement, the term "Registration Statement" refers to the
registration statement No. 333-24489 filed by MCFI on Form S-3 and declared
effective by the Commission.
Title and Description of the Registered Certificates:
Multifamily/Commercial Mortgage Pass-Through Certificates, Series 1997-MC2,
Class X, Class A-1, Class A-2, Class B, Class C, Class D and Class E
Certificates.
Underwriting Agreement, dated as of November 20, 1997
Cut-off Date: November 1, 1997
<TABLE>
<CAPTION>
Portion of Class Portion of Class
Principal Balance Principal Balance
(or, in the case of (or, in the case of
Initial Class Principal Class X, Class Class X, Class
Balance (or, in the case of Notional Amount) of Notional Amount) of
Class Class X, Class Class to be Purchased Class to be Purchased Initial Purchase
Designation Notional Amount)(1) by Citibank(1) by NationsBanc(1) Pass-Through Rate Price(2) Rating(3)
- ----------- --------------------------- -------------- ----------------- ----------------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Class A-1 $143,471,137 $76,550,288 $66,920,849 6.525% 100.500% Aaa/AAA
Class A-2 $465,932,965 $248,602,634 $217,330,331 6.664% 100.500 % Aaa/AAA
Class X $870,490,231 $464,457,723 $406,032,508 1.369% TBD Aaa/AAA
Class B $ 52,234,637 $27,870,250 $24,364,387 6.734% 100.500% Aa2/AA
Class C $ 43,528,864 $23,225,208 $20,303,656 6.881% 100.500% A2/A
Class D $ 39,175,978 $20,902,688 $18,273,290 7.117% 100.500% Baa2/BBB
Class E $ 26,117,318 $13,935,125 $12,182,193 7.214% 99.731% Baa3/NR
</TABLE>
- ------------------------
(1) Subject to a variance of plus or minus 5.0%.
(2) Expressed as a percentage of the Class Principal Balance or Class
Notional Amount, as the case may be, 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. and Fitch Investors Service,
L.P. (except with respect to the Class E Certificates, which are rated
by Moody's only).
Closing Time, Date and Location: 10:00 a.m. New York City time on November 25,
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 or notional amount, as the case may be, of $100,000 (or $10,000, in the
case of the Class A-1 and Class A-2 Certificates, or $1,000,000, in the case of
the Class X Certificates) and integral multiples of $1 in excess thereof.
EXECUTION COPY
MORTGAGE CAPITAL FUNDING, INC.,
Sponsor,
CITICORP REAL ESTATE, INC.,
Mortgage Loan Seller,
NATIONSBANC MORTGAGE CAPITAL CORPORATION,
Additional Warranting Party,
MIDLAND LOAN SERVICES, L.P.,
Master Servicer,
CRIIMI MAE SERVICES LIMITED PARTNERSHIP,
Special Servicer,
LASALLE NATIONAL BANK,
Trustee and REMIC Administrator,
and
ABN AMRO BANK N.V.,
Fiscal Agent
---------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of November 1, 1997
---------------------------------
$870,577,289
Multifamily/Commercial Mortgage Pass-Through Certificates
Series 1997-MC2
<PAGE>
TABLE OF CONTENTS
-----------------
Section Page
ARTICLE I
DEFINITIONS; CERTAIN CALCULATIONS IN RESPECT OF
THE MORTGAGE POOL AND THE CERTIFICATES
1.01. Defined Terms.........................................................4
1.02. Certain Calculations in Respect of the Mortgage Pool.................49
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES;
ORIGINAL ISSUANCE OF CERTIFICATES
2.01. Conveyance of Mortgage Loans.........................................51
2.02. Acceptance of REMIC I by Trustee.....................................55
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.......................................57
2.04. Representations and Warranties of the Sponsor........................58
2.05. Representations and Warranties of the Mortgage Loan Seller and the
Additional Warranting Party..........................................59
2.06. Representations and Warranties of the Master Servicer................70
2.07. Representations and Warranties of the Special Servicer...............72
2.08. Representations and Warranties of the Trustee........................74
2.09. Representations and Warranties of the Fiscal Agent...................75
2.10. Issuance of the Class R-I Certificates; Creation of the REMIC I
Regular Interests....................................................77
2.11. Conveyance of REMIC I Regular Interests; Acceptance of REMIC II
by the Trustee.......................................................77
2.12. Issuance of the REMIC II Certificates................................77
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
3.01. Administration of the Mortgage Loans.................................78
3.02. Collection of Mortgage Loan Payments.................................79
3.03. Collection of Taxes, Assessments and Similar Items; Servicing
Accounts; Reserve Accounts...........................................80
i
<PAGE>
Section Page
3.04. Certificate Account and Distribution Account.........................81
3.05. Permitted Withdrawals From the Certificate Account and the
Distribution Account.................................................84
3.06. Investment of Funds in the Certificate Account and the REO
Account..............................................................88
3.07. Maintenance of Insurance Policies; Errors and Omissions and
Fidelity Coverage....................................................90
3.08. Enforcement of Due-On-Sale Clauses; Assumption Agreements;
Subordinate Financing................................................93
3.09. Realization Upon Defaulted Mortgage Loans............................95
3.10. Trustee to Cooperate; Release of Mortgage Files......................99
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..........................100
3.12. Inspections; Collection of Financial Statements.....................105
3.13. Annual Statement as to Compliance...................................108
3.14. Reports by Independent Public Accountants...........................108
3.15. Access to Certain Information.......................................109
3.16. Title to REO Property; REO Account..................................109
3.17. Management of REO Property..........................................111
3.18. Sale of Mortgage Loans and REO Properties...........................114
3.19. Additional Obligations of the Master Servicer and the Special
Servicer............................................................117
3.20. Modifications, Waivers, Amendments and Consents.....................121
3.21. Transfer of Servicing Between Master Servicer and Special
Servicer; Record Keeping............................................124
3.22. Sub-Servicing Agreements............................................125
3.23. Designation of Special Servicer by the Majority Certificateholder
of the Controlling Class............................................128
3.24. Confidentiality.....................................................129
3.25. No Solicitation of Prepayments......................................130
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS AND RELATED MATTERS
4.01. Distributions on the Certificates...................................131
4.02. Statements to Certificateholders; Certain Reports by the Master
Servicer and the Special Servicer...................................140
4.03. P&I Advances........................................................148
4.04. Allocation of Realized Losses and Additional Trust Fund Expenses
to the Sequential Pay Certificates..................................150
4.05. Deemed Distributions on, and Allocations of Realized Losses and
Additional Trust Fund Expenses to, the REMIC I Regular Interests....151
ii
<PAGE>
Section Page
ARTICLE V
THE CERTIFICATES
5.01. The Certificates....................................................153
5.02. Registration of Transfer and Exchange of Certificates...............153
5.03. Book-Entry Certificates.............................................160
5.04. Mutilated, Destroyed, Lost or Stolen Certificates...................161
5.05. Persons Deemed Owners...............................................161
5.06. Certification by Certificate Owners.................................162
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................................163
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.....................163
6.03. Limitation on Liability of the Sponsor, the Master Servicer,
the Special Servicer, the REMIC Administrator and Others............164
6.04. Master Servicer, Special Servicer and REMIC Administrator Not
to Resign...........................................................165
6.05. Rights of the Sponsor and the Trustee in Respect of the Master
Servicer, the Special Servicer and the REMIC Administrator..........166
ARTICLE VII
DEFAULT
7.01. Events of Default...................................................167
7.02. Trustee to Act; Appointment of Successor............................170
7.03. Notification to Certificateholders..................................172
7.04. Waiver of Events of Default.........................................172
7.05. Additional Remedies of Trustee Upon Event of Default................172
iii
<PAGE>
Section Page
ARTICLE VIII
CONCERNING THE TRUSTEE
8.01. Duties of Trustee...................................................174
8.02. Certain Matters Affecting the Trustee and the Fiscal Agent..........175
8.03. Trustee Not Liable for Validity or Sufficiency of Certificates
or Mortgage Loans...................................................176
8.04. Trustee and Fiscal Agent May Own Certificates.......................177
8.05. Fees of Trustee; Indemnification of Trustee and the Fiscal Agent....177
8.06. Eligibility Requirements for Trustee................................178
8.07. Resignation and Removal of the Trustee..............................178
8.08. Successor Trustee...................................................179
8.09. Merger or Consolidation of Trustee or Fiscal Agent..................180
8.10. Appointment of Co-Trustee or Separate Trustee.......................180
8.11. Appointment of Custodians...........................................181
8.12. Access to Certain Information.......................................182
8.13. The Fiscal Agent....................................................183
8.14. Filings with the Securities and Exchange Commission.................184
ARTICLE IX
TERMINATION
9.01. Termination Upon Repurchase or Liquidation of All Mortgage
Loans...............................................................186
9.02. Additional Termination Requirements.................................188
ARTICLE X
ADDITIONAL REMIC PROVISIONS
10.01. REMIC Administration................................................189
10.02. Sponsor, Master Servicer, Special Servicer, Trustee and Fiscal
Agent to Cooperate with REMIC Administrator.........................192
10.03. Fees of the REMIC Administrator.....................................192
10.04. Use of Agents.......................................................193
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.01. Amendment...........................................................194
11.02. Recordation of Agreement; Counterparts..............................195
11.03. Limitation on Rights of Certificateholders..........................196
iv
<PAGE>
Section Page
11.04. Governing Law.......................................................197
11.05. Notices.............................................................197
11.06. Severability of Provisions..........................................198
11.07. Successors and Assigns; Beneficiaries...............................198
11.08. Article and Section Headings........................................198
11.09. Notices to the Rating Agencies......................................198
v
<PAGE>
EXHIBIT A-1 Form of Class X Certificate
EXHIBIT A-2 Form of Class [A-1][A-2]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
SCHEDULE III Schedule of Modified Mortgage Loans
SCHEDULE IV Schedule of Mortgage Loans Permitting Releases of Material
Portions of Mortgaged Properties Prior to Payment in Full
SCHEDULE V Schedule of Mortgage Loans Permitting Future Subordinate Liens on
Mortgaged Properties
SCHEDULE VI Schedule of Exceptions to Mortgage File Delivery
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This Pooling and Servicing Agreement (this "Agreement"), is
dated and effective as of November 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,
MIDLAND LOAN SERVICES, L.P., as Master Servicer, CRIIMI MAE SERVICES LIMITED
PARTNERSHIP, 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 Certificates, to be issued
hereunder in multiple Classes, which in the aggregate will evidence the entire
beneficial ownership interest in the Trust to be created hereunder.
As provided herein, the REMIC Administrator will elect to
treat the segregated pool of assets consisting of the Mortgage Loans and certain
other related assets subject to this Agreement as 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 under federal income tax law.
The following table irrevocably sets forth the designation, the REMIC I
Remittance Rate, and the initial Uncertificated Principal Balance for each of
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, the longest remaining
amortization schedule, irrespective of its scheduled maturity. None of the REMIC
I Regular Interests will be certificated.
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REMIC I Initial Uncertificated
Designation Remittance Rate Principal Balance
----------- --------------- -----------------
A-1-Major Variable(1) $143,456,789.89
A-1-Minor 6.525% per annum $14,347.11
A-2-Major Variable(1) $465,886,371.70
A-2-Minor 6.664% per annum $46,593.30
B-Major Variable(1) $52,229,413.54
B-Minor 6.734% per annum $5,223.46
C-Major Variable(1) $43,524,511.11
C-Minor 6.881% per annum $4,352.89
D-Major Variable(1) $39,172,060.40
D-Minor 7.117% per annum $3,917.60
E-Major Variable(1) $26,114,706.27
E-Minor 7.214% per annum $2,611.73
F-Major Variable(1) $43,524,511.11
F-Minor 7.214% per annum $4,352.89
G-Major Variable(1) $8,704,901.42
G-Minor 6.000% per annum $870.58
H-Major Variable(1) $19,586,030.20
H-Minor 6.000% per annum $1,958.80
J-Major Variable(1) $10,881,127.78
J-Minor 6.000% per annum $1,088.22
K-Major Variable(1) $17,409,807.85
K-Minor 6.000% per annum $1,741.15
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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, and the initial Class Principal
Balance for each of the Classes of 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.
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Initial Class
Designation Pass-Through Rate Principal Balance
- ----------- ----------------- -----------------
Class A-1 6.525% per annum $143,471,137
Class A-2 6.664% per annum $465,932,965
Class X Variable (1) N/A(2)
Class B 6.734% per annum $52,234,637
Class C 6.881% per annum $43,528,864
Class D 7.117% per annum $39,175,978
Class E 7.214% per annum $26,117,318
Class F 7.214% per annum $43,528,864
Class G 6.000% per annum $8,705,772
Class H 6.000% per annum $19,587,989
Class J 6.000% per annum $10,882,216
Class K 6.000% per annum $17,411,549
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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 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 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
within the meaning of Treasury Regulation Section 1.856-6(b)(1), which is the
first day on which the Trust is treated as the owner of such REO Property for
federal income tax purposes.
"Additional Information": As defined in Section 4.02(a).
"Additional Interest": With respect to any Hyper-Amortization
Loan after its Anticipated Repayment Date, all interest accrued thereon at the
Excess Interest Rate, the payment of which interest shall, under the terms of
such Mortgage Loan, be deferred until all interest accrued at the Mortgage Rate
(net of the Excess Interest Rate) and outstanding principal has been paid ,
together with all interest, if any, accrued at the related Mortgage Rate on such
deferred interest.
"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.
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"Adjusted Net Mortgage Rate": With respect to any Mortgage
Loan or REO Loan, for any Distribution Date, (a) if the related Mortgage Note
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"), a per annum rate equal to the related Net Mortgage Rate in
effect for such Mortgage Loan as of the commencement of the related Collection
Period (or, in the case of a Hyper-Amortization Loan or successor REO Loan after
its Anticipated Repayment Date, if such rate is less, the related Net Mortgage
Rate in effect for such Mortgage Loan or REO Loan immediately prior to its
Anticipated Repayment Date), and (b) if the related Mortgage Note 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, as the case may be, 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 or REO Loan, as the case may be, at
the related Net Mortgage Rate in effect for such Mortgage Loan during such
calendar month (or, in the case of a Hyper-Amortization Loan or successor REO
Loan after its Anticipated Repayment Date, if such rate is less, the related Net
Mortgage Rate in effect for such Mortgage Loan or REO Loan immediately prior to
its Anticipated Repayment Date).
"Administrative Fee Rate": With respect to each Mortgage Loan
and REO Loan, as specified in the Mortgage Loan Schedule, 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 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.
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"Annuity Factor": As defined in Section 4.01(a).
"Anticipated Repayment Date": With respect to any
Hyper-Amortization Loan, the date specified on the related Mortgage Note, as of
which Additional Interest shall begin to accrue on such Mortgage Loan, which
date is prior to the Stated Maturity Date for such Mortgage Loan.
"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 (excluding, in the case of a Hyper-Amortization Loan after
its Anticipated Repayment Date, Additional 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 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
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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
(x)(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 Final Distribution Date": As defined in
Section 4.01(a).
"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 (exclusive, in the case of a Hyper-Amortization Loan
after its Anticipated Repayment Date, of Additional 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 that was due (or, in the case of a Balloon
Mortgage Loan described in the preceding sentence of this definition, the
Assumed Monthly
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Payment that was deemed due) in respect of the related Mortgage Loan on the last
Due Date prior to its becoming an REO Loan.
"Available Distribution Amount": With respect to any
Distribution Date, an amount equal to (a) the balance on deposit in the
Distribution Account as of 11:30 a.m. (New York City time) on such Distribution
Date (or such later time on such date as of which distributions are made on the
Certificates), including, without limitation, if and to the extent on deposit
therein as of such time, the Master Servicer Remittance Amount for the related
Master Servicer Remittance Date, any P&I Advances made by the Master Servicer,
the Trustee or the Fiscal Agent to cover uncollected 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 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 at least two times 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.
"Bank": As defined in Section 2.08.
"Bankruptcy Code": The federal Bankruptcy Code, as amended
from time to time (Title 11 of the United States Code).
"Base Prospectus": That certain prospectus dated November 20,
1997, relating to trust funds established by the Sponsor and publicly offered
mortgage pass-through certificates evidencing interests therein.
"Book-Entry Certificate": Any Certificate registered in the
name of the Depository or its nominee.
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"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.
"Caroline Apts. Loan": As defined in Section 2.05(c)(xlii).
"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-MC2 as executed by
the Trustee and authenticated and delivered hereunder by the Certificate
Registrar.
"Certificate Account": The segregated account or accounts
created and maintained by the Master Servicer pursuant to Section 3.04(a) on
behalf of the Trustee in trust for Certificateholders, which shall be entitled
"[Name of Master Servicer], as Master Servicer, in trust for the registered
holders of Mortgage Capital Funding, Inc., Multifamily/Commercial Mortgage
Pass-Through Certificates, Series 1997-MC2.
"Certificate Factor": With respect to any Class of REMIC II
Regular Certificates, as of any date of determination, a fraction, expressed as
a decimal carried to eight places, the numerator of which is the then related
Class Principal Balance or Class Notional Amount, as the case may be, and the
denominator of which is the related Initial Class Principal Balance or Initial
Class Notional Amount, as the case may be.
"Certificate Notional Amount": With respect to any Class X
Certificate, 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 any of them 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 or except in connection with the
Controlling Class exercising its rights under Section 3.23, or unless such
Persons collectively own an entire Class of Certificates and only the Holders of
such Class of Certificates are entitled to grant such consent, approval or
waiver. The 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 or Class A-2
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 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.
"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.
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"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 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 permanently 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
permanently reduced on such Distribution Date as provided in Section 4.04.
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"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": November 25, 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
calendar 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 Determination Date in the
calendar month in which such Distribution Date occurs.
"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 administered, which office at the date of the
execution of this Agreement is located at 135 South LaSalle Street, Chicago,
Illinois 60603.
"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).
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"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 of 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.
"CPR": As defined in the Base Prospectus.
"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/MCFI Mortgage Loan Purchase Agreement": The Mortgage
Loan Purchase Agreement, dated as of November 20, 1997, between CREI and the
Sponsor.
"Cross-Collateralized Mortgage Loan": Any Mortgage Loan that
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 Assumed Monthly
Payment deemed due, in respect of such
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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": November 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.
"Debaliviere Loan": As defined in Section 2.05(c)(xlii).
"Debt Service Coverage Ratio": With respect to any Mortgage
Loan, as of any date of determination, and calculated without regard to any
cross-collateralization feature of such Mortgage Loan, the ratio of (x) the Net
Operating Income (before payment of any debt service on such Mortgage Loan)
generated by the related Mortgaged Property during the most recently ended
period of not more than twelve months or less than three months for which
financial statements (whether or not audited) have been received by or on behalf
of the Mortgage Loan Seller (prior to the Closing Date) or the Master Servicer
or Special Servicer (following the Closing Date) (such Net Operating Income to
be annualized if the relevant period is less than twelve months), to (y) the
product of the amount of the Monthly Payment in effect for such Mortgage Loan as
of such date of determination, multiplied by 12.
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"Default 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.
"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 interest (exclusive, if
applicable, of Additional Interest) in excess of interest accrued on the
principal balance of such Mortgage Loan (or REO Loan) at the related Mortgage
Rate, such excess interest arising out of a default under such Mortgage Loan.
"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).
"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-6 of the Prospectus Supplement.
"Depository": The Depository Trust Company, or any successor
Depository hereafter named. The nominee of the initial Depository for purposes
of registering those Certificates that are to be Book-Entry Certificates, is
Cede & Co. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(3) of the Uniform Commercial Code of the State of New
York and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act.
"Depository Participant": A broker, dealer, bank or other
financial institution or other Person for whom from time to time the Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
"Determination Date": With respect to any Distribution Date,
the 10th day of the month in which such Distribution Date occurs, or if such
10th day is not a Business Day, the Business Day immediately preceding.
"Deville Court Apts. Loan": As defined in Section 2.05(c)(ix).
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"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 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 Freddie Mac, 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 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 an amount
equal to the lesser of any remaining unallocated portion of such Net Aggregate
Prepayment Interest Shortfall and any Accrued Certificate Interest in respect of
the particular Class of Certificates for such Distribution Date; and thereafter,
if and to the extent that any portion of such Net Aggregate Prepayment Interest
Shortfall remains unallocated, among the respective Classes of Senior
Certificates, up to, and pro rata in accordance
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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- MC2".
"Distribution Date": The 20th day of any month, or if such
20th day is not a Business Day, the Business Day immediately following,
commencing in December 1997.
"Distribution Date Statement": As defined in Section 4.02(a).
"Document Defect": As defined in Section 2.02(e).
"Due Date": With respect to (i) any Mortgage Loan on or prior
to its Stated Maturity Date, the day of the month set forth in the related
Mortgage Note on which each Monthly Payment on such Mortgage Loan is scheduled
to be first due; (ii) any Mortgage Loan after its Stated Maturity Date, the day
of the month set forth in the related Mortgage Note on which each Monthly
Payment on such Mortgage Loan had been scheduled to be first due; and (iii) any
REO Loan, the day of the month set forth in the related Mortgage Note on which
each Monthly Payment on the related Mortgage Loan had been scheduled to be first
due.
"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 and "AA" by Fitch (if the deposits are to be held in the account for
more than 30 days), or the short-term unsecured debt obligations of which are
rated no less than "P-1" by Moody's and "F-1+" by Fitch (if the deposits are to
be held in the account for 30 days or less), in each case, at any time funds are
on deposit therein, (ii) a segregated trust account or accounts maintained with
the 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 either Rating Agency to any Class of
Certificates (as confirmed in writing by each Rating Agency).
"Emergency Advance": Any Servicing Advance, whether or not it
is a Servicing Advance that, pursuant hereto, the Special Servicer is required
to request the Master Servicer to make, that must be made within 10 days of the
Special Servicer's becoming aware that it must be
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made in order to avoid any material penalty, any material harm to a Mortgaged
Property or any other material adverse consequence to the Trust Fund.
"ERISA": The Employee Retirement Income Security Act of 1974,
as amended.
"Escrow Payment": Any payment received by the Master Servicer
or the Special Servicer for the account of any Mortgagor for application toward
the payment of real estate 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).
"Excess Interest Rate": With respect to any Hyper-
Amortization Loan after its Anticipated Repayment Date, the incremental increase
in the Mortgage Rate for such Mortgage Loan resulting from the passage of such
Anticipated Repayment Date.
"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.
"Fannie Mae": The Federal National Mortgage Association or
any successor.
"FDIC": The Federal Deposit Insurance 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.
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"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.
"Freddie Mac": The Federal Home Loan Mortgage Corporation or
any successor.
"Ground Lease": The ground lease pursuant to which any
Mortgagor holds a leasehold interest in the related Mortgaged Property.
"Group": A group of Mortgage Loans that are cross-
collateralized and cross-defaulted with each other.
"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 control numbers N185, N186 and N187 and, as of the
date hereof, secured by Mortgages on Mortgaged Properties operated as health
care-related facilities.
"Historical Loan Modification Report": A report or reports
setting forth, among other things, those Mortgage Loans which, as of the close
of business on the Determination Date immediately preceding the preparation of
such report or reports, have been modified pursuant to this Agreement (i) during
the Collection Period ending on such Determination Date and (ii) since the
Cut-off Date, showing the original and the revised terms thereof, substantially
in the form, and including such additional information in respect of each such
Mortgage Loan, as is contemplated on page B-12 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,
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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-13 of the
Prospectus Supplement.
"HUD-Approved Servicer": A servicer that is a mortgagee
approved by the Secretary of Housing and Urban Development pursuant to Sections
207 and 211 of the National Housing Act.
"Hyper-Amortization Loan": A Mortgage Loan that provides for,
if such Mortgage Loan is not paid in full prior to or on its Anticipated
Repayment Date, (i) the accrual of Additional Interest thereon and (ii) the
application (in reduction of the outstanding principal of such Mortgage Loan) of
an amount (in addition to the principal portion of the required Monthly Payment)
equal to the excess (if any) of certain net cash flow from the related Mortgaged
Property over the related Monthly Payment.
"Independent": When used with respect to any specified Person,
any such Person who (i) is in fact independent of the Sponsor, the Mortgage Loan
Seller, the Additional Warranting Party, the Master Servicer, the Special
Servicer, the Trustee, the Fiscal Agent, the REMIC Administrator and any and all
Affiliates thereof, (ii) does not have any direct financial interest in or any
material indirect financial interest in any of the Sponsor, the Mortgage Loan
Seller, the Additional Warranting Party, the Master Servicer, the Special
Servicer, the Trustee, the Fiscal Agent, the REMIC Administrator or any
Affiliate thereof, and (iii) is not connected with the Sponsor, the Mortgage
Loan Seller, the Additional Warranting Party, the Master Servicer, the Special
Servicer, the Trustee, the Fiscal Agent, the REMIC Administrator or any
Affiliate thereof as an officer, employee, promoter, underwriter, trustee,
partner, director or Person performing similar functions; provided, however,
that a Person shall not fail to be Independent of the Sponsor, the Mortgage Loan
Seller, the Additional Warranting Party, the Master Servicer, the Special
Servicer, the Trustee, the Fiscal Agent, the REMIC Administrator or any
Affiliate thereof merely because such Person is the beneficial owner of 1% or
less of any class of securities issued by the Sponsor, the Mortgage Loan Seller,
the Additional Warranting Party, the Master Servicer, the Special Servicer, the
Trustee, the Fiscal Agent, the REMIC Administrator or any Affiliate thereof, as
the case may be.
"Independent Contractor": Any Person that would be an
"independent contractor" with respect to REMIC I within the meaning of Section
856(d)(3) of the Code if REMIC I were a real estate investment trust (except
that the ownership test set forth in that section shall be considered to be met
by (i) any Person that owns, directly or indirectly, 35 percent or more of any
Class of Certificates, or such other interest in any Class of Certificates as is
set forth in an Opinion of Counsel, which shall not be an expense of the
Trustee, the REMIC Administrator or the Trust, 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
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of an Opinion of Counsel, which shall be at no expense to the Trustee, the REMIC
Administrator or the Trust, to the effect that the taking of any action in
respect of any REO Property by such Person, subject to any conditions therein
specified, that is otherwise herein contemplated to be taken by an Independent
Contractor will not cause such REO Property to cease to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code, or cause any
income realized in respect of such REO Property to fail to qualify as Rents from
Real Property.
"Initial Class Notional Amount": With respect to the Class X
Certificates, the initial Class Notional Amount thereof as of the Closing Date
equal to $870,490,231.
"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 $143,471,137
Class A-2 $465,932,965
Class B $52,234,637
Class C $43,528,864
Class D $39,175,978
Class E $26,117,318
Class F $43,528,864
Class G $8,705,772
Class H $19,587,989
Class J $10,882,216
Class K $17,411,549
"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.
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"Interest Only Certificate": Any Class X Certificate.
"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.
"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.
"Joliet Loan": As defined in Section 2.05(c)(v).
"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 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 Default
Charges.
"Lauder Ridge Loan": As defined in Section 2.05(c)(xlii).
"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.
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"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 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.
"Lost Coupon Amount": As defined in Section 4.01(a).
"Major REMIC I Regular Interests": Collectively, REMIC I
Regular Interest A-1- Major, REMIC I Regular Interest A-2-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.
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"Majority Certificateholder": With respect to any specified
Class or Classes of Certificates, as of any date of determination, any Holder or
particular group of Holders of Certificates of such Class or Classes, as the
case may be, entitled to a majority of the Voting Rights allocated to such Class
or Classes, as the case may be.
"Master Servicer": Midland Loan Services, L.P., 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 (including, without limitation,
Additional 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.
"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% per annum) less than the Administrative Fee Rate specified for such
Mortgage Loan in the Mortgage Loan Schedule.
"Midland Commercial": Midland Commercial Financing Corp. or
its successor in interest.
"Midland/CREI Mortgage Loan Purchase Agreement": The Mortgage
Loan Purchase Agreement, dated as of November 20, 1997, between Midland
Commercial and CREI.
"Midland/NMCC Mortgage Loan": Any of the NMCC Mortgage Loans
acquired by CREI from Midland Commercial pursuant to the Midland/CREI Mortgage
Loan Purchase Agreement, which Mortgage Loans were in turn acquired by Midland
Commercial from NMCC pursuant to the NMCC/Midland Mortgage Loan Purchase
Agreement.
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"Minor REMIC I Regular Interests": Collectively, REMIC I
Regular Interest A-1- Minor, REMIC I Regular Interest A-2-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 (or, in the case of a Hyper-Amortization Loan after its Anticipated
Repayment Date, the minimum required 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; provided that the Monthly Payment due in
respect of any Hyper-Amortization Loan after its Anticipated Repayment Date
shall not include Additional Interest.
"Moody's": Moody's Investors Service, Inc. or its successor
in interest. If neither such rating agency nor any successor remains in
existence, "Moody's" shall be deemed to refer to such other nationally
recognized statistical rating agency or other comparable Person designated by
the Sponsor, notice of which designation shall be given to the Trustee, the
Fiscal Agent, the Master Servicer, the Special Servicer and the REMIC
Administrator, and specific ratings of
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Moody's Investors Service, Inc. herein referenced shall be deemed to refer to
the equivalent ratings of the party so designated.
"Mortgage": With respect to any Mortgage Loan, separately and
collectively, as the context may require, each mortgage, deed of trust and/or
other similar document or instrument securing the related Mortgage Note and
creating a lien on the related Mortgaged Property.
"Mortgage File": With respect to any Mortgage Loan, subject
to Section 2.01(c), 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-MC2,
without recourse";
(ii) the original or a copy of the Mortgage and, if
applicable, the originals or copies of any
intervening assignments thereof showing a complete
chain of assignment from the originator of the
Mortgage Loan to the most recent assignee of record
thereof prior to the Trustee, if any, in each case
with evidence of recording indicated thereon;
(iii) an original assignment of the Mortgage, in recordable
form, executed by the most recent assignee of record
thereof prior to the Trustee or, if none, by the
originator, in favor of the Trustee (in such
capacity);
(iv) the original or a copy of any related Assignment of
Leases (if any 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 any 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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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 maintainthe perfection
of) any security interest held by the originator of
the Mortgage Loan (and each assignee of record prior
to the Trustee) in and to the personalty of the
Mortgagor at the Mortgaged Property (in each case
with evidence of filing thereon) and which were in
the possession of the Mortgage Loan Seller or the
Additional Warranting Party, as applicable, at the
time the Mortgage Files were delivered to the Trustee
and (B) if any such security interest is perfected
and the related UCC-1, UCC-2 or UCC-3 financing
statements were in the possession of the Mortgage
Loan Seller or the Additional Warranting Party, as
applicable, a UCC-2 or UCC-3 financing statement, as
applicable, executed by the most recent assignee of
record prior to the Trustee or, if none, by the
originator, evidencing the transfer of such security
interest to the Trustee (or a certified copy of such
assignment as sent for filing);
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(xii) the original or a copy of the power of attorney (with
evidence of recording thereon, if appropriate)
granted by the Mortgagor if the Mortgage, Mortgage
Note or other document or instrument referred to
above was signed on behalf of the Mortgagor;
(xiii) if the Mortgagor has a leasehold interest in the
related Mortgaged Property, the original Ground Lease
or a copy thereof;
(xiv) the original or copy of any intercreditor agreement
relating to such Mortgage Loan;
(xv) the original or copy of any operating lease relating
to the related Mortgaged Property; and
(xvi) 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 and control 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;
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(vi) the (A) remaining term to stated maturity and (B)
Stated Maturity Date or, in the case of a
Hyper-Amortization Loan, the Anticipated Repayment
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;
(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;
(xiii) whether the Mortgage Loan is a Cross-Collateralized
Mortgage Loan and, if so, a reference to the other
Mortgage Loans that are cross-collateralized with
such Mortgage Loan; and
(xiv) whether the Mortgage Loan is a Hyper-Amortization
Mortgage Loan.
The Mortgage Loan Schedule shall also set forth the aggregate Cut-off Date
Balance for all of the Mortgage Loans. Such list may be in the form of more than
one list, collectively setting forth all of the information required.
"Mortgage Loan Seller": CREI.
"Mortgage Note": The original executed note evidencing the
indebtedness of a Mortgagor under a Mortgage Loan, together with any rider,
addendum or amendment thereto.
"Mortgage Pool": Collectively, all of the Mortgage Loans and
any successor REO Loans.
"Mortgage Rate": With respect to (i) any Mortgage Loan on or
prior to its Stated Maturity Date, the annualized rate at which interest is
scheduled (in the absence of a default) to accrue on such Mortgage Loan from
time to time in accordance with the terms of the related Mortgage Note (as such
may be modified at any time following the Closing Date) and applicable law, (ii)
any Mortgage Loan after its Stated Maturity Date, the annualized rate described
in clause (i) above determined without regard to the passage of such Stated
Maturity Date, and (iii) any REO Loan, the annualized rate described in clause
(i) or (ii) above, as applicable, determined as if the related Mortgage Loan had
remained outstanding.
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"Mortgaged Property": Individually and collectively, as the
context may require, each real property (together with all improvements and
fixtures thereon) subject to the lien of a Mortgage and constituting collateral
for a Mortgage Loan. With respect to any Cross- Collateralized Mortgage Loan, as
the context may require, "Mortgaged Property" may mean, collectively, all the
Mortgaged Properties securing such Cross-Collateralized Mortgage Loan.
"Mortgagor": The obligor or obligors on a Mortgage Note,
including without limitation, any Person that has acquired the related Mortgaged
Property and assumed the obligations of the original obligor under the Mortgage
Note.
"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(e) in connection with such Prepayment Interest Shortfalls.
"Net Default Charges": With respect to any Mortgage Loan or
REO Loan, any Default 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 Default 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 Default Charges in accordance with Section 3.05(a)(viii).
"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,
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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).
"NMCC": NationsBanc Mortgage Capital Corporation or its
successor in interest.
"NMCC Mortgage Loan": Any of the Midland/NMCC Mortgage Loans
or any of the Mortgage Loans acquired by CREI from NMCC pursuant to the
NMCC/CREI Mortgage Loan Purchase Agreement. The NMCC Mortgage Loans are
identified as such on the Mortgage Loan Schedule under the heading "Loan
Seller".
"NMCC/CREI Mortgage Loan Purchase Agreement": The Mortgage
Loan Purchase Agreement, dated as of November 20, 1997, between NMCC and CREI.
"NMCC/Midland Mortgage Loan Purchase Agreement": The Mortgage
Loan Purchase Agreement, dated as of November 20, 1997, between NMCC and Midland
Commercial.
"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 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.
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"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.
"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 Adjusted Net Mortgage Rate)
for such Distribution Date, over (b) the weighted average of the fixed REMIC I
Remittance Rates applicable to all 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 Certificates; fourth, the Class D
Certificates; fifth, the Class E Certificates; sixth, the Class F Certificates;
seventh, the Class G Certificates; eighth, the Class H Certificates; ninth, the
Class J Certificates; tenth, the Class K Certificates; and last, the respective
Classes of Residual Certificates.
"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.
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"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 and "AAA" by Fitch);
(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 and "AAA" by Fitch or (b) the short-term unsecured
debt obligations of such bank or trust company are rated no less than
"P-1" by Moody's and "F-1+" by Fitch or (c) if both such long-term and
short-term unsecured debt obligations have been rated by either Rating
Agency, then each must be rated as specified in the immediately
preceding clauses (a) and (b) with respect to such Rating Agency;
(iv) commercial paper (having original maturities of not more
than 365 days) of any corporation incorporated under the laws of the
United States or any state thereof rated no less than "P-1" by Moody's
and "F-1+" by Fitch; and
(v) any other obligation or security which would not result in
the downgrade, qualification or withdrawal of the rating then assigned
by either 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.
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"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 Fannie Mae Multifamily
Guide, Part II, as amended from time to time.
"P&I Advance": As to any Mortgage Loan or REO Loan, any
advance made by the Master Servicer, the Trustee or the Fiscal Agent pursuant to
Section 4.03.
"Plan": As defined in Section 5.02(c).
"Prepayment Assumption": The assumption that no Mortgage Loan
(other than a Hyper-Amortization Loan) is prepaid prior to its Stated Maturity
Date and that no Hyper- Amortization Loan is prepaid prior to, but each is paid
in its entirety on, its Anticipated Repayment 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 (net of related Servicing Fees and exclusive
of Prepayment Premiums and, in the case of a Hyper-Amortization Loan after its
Anticipated Repayment Date, Additional Interest) 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 uncollected interest
(determined without regard to any Prepayment Premium that may have been
collected and exclusive of, in the case of a Hyper-Amortization Loan after its
Anticipated Repayment Date, Additional Interest) 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.
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"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 the Master
Servicer, the office thereof primarily responsible for performing its respective
duties under this Agreement, initially located in Missouri and, with respect to
the Special Servicer, the office thereof primarily responsible for performing
its respective duties under this Agreement, initially located in Maryland.
"Principal Distribution Amount": With respect to any
Distribution Date, the aggregate of the Current Principal Distribution Amount
for such Distribution Date and, if such Distribution Date is subsequent to the
initial Distribution Date, the excess, if any, of the Principal Distribution
Amount for the preceding Distribution Date, over the aggregate distributions of
principal made on the Sequential Pay Certificates on the preceding Distribution
Date.
"Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest (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 November 20, 1997, relating to the Registered Certificates, that is a
supplement to the Base Prospectus.
"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 (excluding, in the
case of a Hyper-Amortization Loan after its Anticipated Repayment Date,
Additional 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 (excluding, in the case of a Hyper-Amortization Loan after
its Anticipated Repayment Date, Additional 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
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Loan or REO Property is intended to include, without limitation, principal and
interest previously advanced with respect thereto and not previously reimbursed.
"PV Yield Loss Amount": As defined in Section 4.01(a).
"Qualified Appraiser": In connection with the appraisal of
any Mortgaged Property or REO Property, an Independent MAI-designated appraiser
with at least five years of experience in respect of the relevant geographic
location and property type.
"Qualified Insurer": An insurance company or security or
bonding company qualified to write the related Insurance Policy in the relevant
jurisdiction.
"Rating Agency": Each of Fitch and Moody's.
"Realized Loss": With respect to each defaulted Mortgage Loan
as to which a Final Recovery Determination has been made, or with respect to any
REO Loan as to which a Final Recovery Determination has been made as to the
related REO Property, an amount (not less than zero) equal to (i) the unpaid
principal balance of such Mortgage Loan or REO Loan, as the case may be, as of
the commencement of the Collection Period in which the Final Recovery
Determination was made, plus (ii) all accrued but unpaid interest (excluding, in
the case a Hyper- Amortization Loan after its Anticipated Repayment Date,
Additional Interest) on such Mortgage Loan or REO Loan, as the case may be
(without taking into account the amounts described in subclause (iv) of this
sentence), at the related Mortgage Rate to but not including the Due Date in the
Collection Period in which the Final Recovery Determination was made, plus (iii)
any related unreimbursed Servicing Advances as of the commencement of the
Collection Period in which the Final Recovery Determination was made, together
with any new related Servicing Advances made during such Collection Period,
minus (iv) all payments and proceeds, if any, received in respect of such
Mortgage Loan or REO Loan, as the case may be, during the Collection Period in
which such Final Recovery Determination was made (net of any related Liquidation
Expenses paid therefrom).
With respect to any Mortgage Loan as to which any portion of
the outstanding principal or accrued interest owed thereunder was forgiven in
connection with a bankruptcy or similar proceeding involving the related
Mortgagor or a modification, waiver or amendment of such Mortgage Loan granted
or agreed to by the Master Servicer or Special Servicer pursuant to Section
3.20, the amount of such principal or interest (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, if any, in the interest portion of
each
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successive Monthly Payment due thereon. Each such Realized Loss shall be deemed
to have been incurred on the Due Date for each affected Monthly Payment.
"Record Date": With respect to each Class of Certificates,
for any Distribution Date, the last Business Day of the calendar month
immediately preceding the month in which such Distribution Date occurs.
"Registered Certificates": The Class X, Class A-1, Class A-2,
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.
"Reinvestment Yield": As defined in Section 4.01(a).
"REMIC": A "real estate mortgage investment conduit" as
defined in Section 860D of the Code.
"REMIC Administrator": LaSalle National Bank, its successor
in interest, or any successor REMIC administrator appointed as herein provided.
"REMIC I": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election is to be made, consisting of: (i) the
Mortgage Loans as from time to time are subject to this Agreement and all
payments under and proceeds of such Mortgage Loans received or receivable after
the Cut-off Date (other than payments of principal, interest and other amounts
due and payable on the Mortgage Loans on or before the Cut-off Date), together
with all documents, 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 22 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
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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 Adjusted 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-MC2".
"REO Acquisition": The acquisition of any REO Property
pursuant to Section 3.09.
"REO Disposition": The sale or other disposition of the REO
Property pursuant to Section 3.18(d).
"REO Extension": As defined in Section 3.16(a).
"REO Loan": The mortgage loan deemed for purposes hereof to be
outstanding with respect to 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
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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, the
Special Servicer, the 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).
"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).
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"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), Duff
& Phelps Credit Rating Co. ("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 offi cers 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.
"Security Agreement": With respect to any Mortgage Loan, any
security agreement, chattel mortgage or similar document or instrument, whether
contained in the related
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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 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 and Class A-2 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 and administers 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 (or, in the case of a Hyper-Amortization Loan after its
Anticipated Repayment Date, the related Net Mortgage Rate in effect immediately
prior to such Anticipated Repayment Date)); 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".
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"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.
"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-11 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 under the related
loan documents, other than as described in clause (a)
or (b) above, that may, in the Master
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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 jurisdiction in the premises in an
involuntary case under any present or future federal
or state bankruptcy, insolvency or similar law or the
appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt,
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
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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.
"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, 0.02% 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 and, in the
case of a Hyper-Amortization Loan, without regard to its Anticipated Repayment
Date.
"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 permanently 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
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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-Servicer Termination Compensation": As defined in
Section 3.22(d).
"Sub-Servicer Termination Fee": As defined in
Section 3.22(d).
"Sub-Servicing Agreement": The written contract between the
Master Servicer or the Special Servicer, on the one hand, and any Sub-Servicer,
on the other hand, relating to servicing and administration of Mortgage Loans as
provided in Section 3.22.
"Tax Matters Person": With respect to each of REMIC I and
REMIC II, the Person designated as the "tax matters person" of such REMIC in the
manner provided under Treasury regulation section 1.860F-4(d) and temporary
Treasury regulation section 301.6231(a)(7)-1T. The "Tax Matters Person" for each
of REMIC I and REMIC II is the Holder of Certificates evidencing the largest
Percentage Interest in the related Class of Residual Certificates.
"Tax Returns": The federal income tax return on Internal
Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income
Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of each of REMIC I and REMIC II due to its classification
as a REMIC under the REMIC Provisions, together with any and all other
information, reports or returns that may be required to be furnished to the
Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal or
Applicable State Law.
"Termination Strip": As defined in Section 3.22(d).
"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.
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"Trust": The common law trust created hereby.
"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 Financing Statement": A financing statement executed and
filed pursuant to the Uniform Commercial Code, as in effect in the relevant
jurisdiction.
"UCC-1", "UCC-2" and "UCC-3": UCC financing statements on
Form UCC-1, Form UCC-2 and Form UCC-3, respectively.
"Uncertificated Accrued Interest": With respect to any REMIC I
Regular Interest, for any Distribution Date, one month's interest (calculated on
the basis of a 360-day year consisting of twelve 30-day months) at the REMIC I
Remittance Rate applicable to such REMIC I Regular Interest for such
Distribution Date, accrued on the Uncertificated Principal Balance of such REMIC
I Regular Interest outstanding immediately prior to such Distribution Date. The
Uncertificated Accrued Interest in respect of any REMIC I Regular Interest for
any Distribution Date shall be deemed to have accrued during the applicable
Interest Accrual Period.
"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 Interests for such Distribution Date.
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"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 permanently 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 permanently reduced on such
Distribution Date as provided in Section 4.05(d).
"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, or 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 court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have the authority to control all substantial decisions of the trust,
all within the meaning of Section 7701(a)(30) of the Code.
"USPAP": The Uniform Standards of Professional Appraisal
Practices.
"Van Owen Loan": As defined in Section 2.05(c)(xxxviii).
"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 Certifi cates,
and 6.0% of the Voting Rights shall be allocated to the Holders of the Class X
Certificates. Voting Rights allocated to a Class of Certificateholders shall be
allocated among such Certificateholders in proportion to the Percentage
Interests evidenced by their respective Certificates.
"Weighted Average Adjusted Net Mortgage Rate": With respect to
any Distribution Date, the weighted average of the respective Adjusted Net
Mortgage Rates for all the Mortgage Loans and REO Loans, weighted on the basis
of the respective Stated Principal Balances of such 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%.
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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 (excluding, in the case of
a Hyper-Amortization Loan after its Anticipated Repayment Date, Additional
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 Default 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; tenth, as an early recovery of any remaining
principal of such Mortgage Loan to the extent of its entire remaining unpaid
principal balance; and, eleventh, in the case of a Hyper-Amortization Loan after
its Anticipated Repayment Date, as a recovery of accrued and unpaid Additional
Interest on such Hyper- Amortization Loan, to but not including the date of
receipt. 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
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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
(excluding, in the case of an REO Loan that relates to a Hyper-Amortization Loan
after its Anticipated Repayment Date, Additional 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;
fifth, as a recovery of any other amounts (including, without limitation,
Default Charges) deemed to be due and owing in respect of the related REO Loan;
and, sixth, in the case of an REO Loan that relates to a Hyper-Amortization Loan
after its Anticipated Repayment Date, as a recovery of accrued and unpaid
Additional Interest on such REO Loan to but not including the date of receipt.
(c) For the purposes of calculating distributions pursuant to
this Agreement, Additional Interest on a Hyper-Amortization Loan or a successor
REO Loan shall be deemed not to constitute principal or any portion thereof and
shall not be added to the unpaid principal balance or Stated Principal Balance
of such Hyper-Amortization Loan or successor REO Loan. To the extent any
Additional Interest is not paid on a current basis, it shall be deemed to be
deferred interest.
(d) 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.
(e) The foregoing applications of amounts received in respect
of any Mortgage Loan or REO Property shall be determined by the Master Servicer
and reflected in the reports to be delivered thereby pursuant to Section
4.02(b).
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans.
(a) It is the intention of the parties hereto that a common
law trust be established pursuant to this Agreement. LaSalle National Bank is
hereby appointed, and does hereby agree to act, as Trustee hereunder and, in
such capacity, to hold the Trust Fund in trust for the exclusive use and benefit
of all present and future Certificateholders. It is not intended that this
Agreement create a partnership or a joint-stock association.
(b) 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
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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 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.
(c) In connection with the Mortgage Loan Seller's assignment
pursuant to subsection (b) 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 or cause the delivery of
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(c). 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
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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(c) 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 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 recording or filing, as the case may be, the delivery requirements
of this Section 2.01(c) 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(c) shall be
deemed to be
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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(c).
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).
(d) 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.
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(e) 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.
(f) The Mortgage Loan Seller shall, as to each CREI Mortgage
Loan which is secured by the interest of the related Mortgagor under a Ground
Lease, and the Additional Warranting Party shall, as to each NMCC Mortgage Loan
which is secured by the interest of the related Mortgagor under a Ground Lease,
in each case at its own expense, promptly (and in any event within 45 days of
the Closing Date) notify the related ground lessor of the transfer of such
Mortgage Loan to the Trust pursuant to this Agreement and inform such ground
lessor that any notices of default under the related Ground Lease should
thereafter be forwarded to the Trustee.
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
any exceptions noted on the Schedule of Exceptions to Mortgage File Delivery
attached hereto as Schedule VI, to the provisions of Section 2.01 and to the
further review provided for in this Section 2.02, of, with respect to each
Mortgage Loan, an original Mortgage Note endorsed to the Trustee, an original or
a copy of the Mortgage (with evidence of recording thereon), and an original
assignment of such Mortgage executed in favor of the Trustee (in such capacity)
and of all other assets included in REMIC I, in good faith and without notice of
any adverse claim, and declares that it or a Custodian on its behalf holds and
will hold the documents delivered or caused to be delivered by the Mortgage Loan
Seller and the Additional Warranting Party in respect of the Mortgage Loans, and
that it holds and will hold such other assets included in REMIC I, in trust for
the exclusive use and benefit of all present and future Certificateholders.
(b) Within 60 days of the Closing Date (or, in the case of any
Mortgage Loan as to which a Servicing Transfer Event has occurred during such
60-day period of which event the Trustee has notice, within the shorter of 60
days of the Closing Date and five Business Days of the Trustee's receiving such
notice), the Trustee or a Custodian on its behalf shall review each of the
documents delivered or caused to be delivered by the Mortgage Loan Seller or the
Additional Warranting Party with respect to each Mortgage Loan pursuant to
Section 2.01(c); 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
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(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(c),
(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 (ii),
(iii), (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 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(c), (ii) it or a Custodian on its
behalf has received either the original or copy of each of the assignments
specified in clauses (iii) and (v) of the definition of "Mortgage File" that
were delivered by the Mortgage Loan Seller or the Additional Warranting Party,
with evidence of recording thereon, (iii) all documents received by it or any
Custodian in respect of such Mortgage Loan have been reviewed by it or by such
Custodian on its behalf and appear regular on their face and relate to such
Mortgage Loan, and (iv) based on the examinations referred to in subsection (b)
above and this subsection (c) and only as to the foregoing documents, the
information set forth in the Mortgage Loan Schedule with respect to the items
specified in clauses (ii), (iii), (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.
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(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(c), the Trustee or any Custodian discovers that
any document required to have been delivered pursuant to Section 2.01(c) 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
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
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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.
(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
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(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
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 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 Midland Commercial or CREI, as applicable (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
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Mortgage Loan (other than, in certain cases, the right of a
sub-servicer to primary service such Mortgage Loan).
(ii) The Representing Party had full right and authority to
sell, assign and transfer such Mortgage Loan to Midland Commercial or
CREI, as applicable (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 or at
any time during the twelve-month period prior thereto, 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,
without limitation, 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, space leases or operating leases) at the Mortgaged Property to
remain following a foreclosure or similar proceeding (provided that
such tenants are performing under such leases), (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, (E) if such Mortgage Loan is
cross-collateralized with any other Mortgage Loan, the lien of the
Mortgage for such other Mortgage Loan and (F) with respect to the
Mortgage securing the Mortgage Loan identified on the Mortgage Loan
Schedule as control number N010 and property name Joliet Commons
Shopping Center (the "Joliet Loan"), a materialmen's lien in the amount
of $160,447 as to which funds sufficient to pay such amount have been
escrowed with the related title insurer (the exceptions set forth in
the foregoing clauses (A), (B), (C), (D), (E), and (F) collectively,
"Permitted Encumbrances"). Such Permitted Encumbrances do not
materially interfere with the security intended to be provided by the
related Mortgage(s), the current use of the related Mortgaged Property,
or the current ability of such Mortgaged Property to generate net
operating income sufficient to service the Mortgage Loan.
(vi) The lien of each related Mortgage is insured by an ALTA
lender's title insurance policy, or its equivalent as adopted in the
applicable jurisdiction, issued by a nationally recognized title
insurance company, insuring the originator of the related Mortgage
Loan, its successors and assigns, as to the first priority lien of the
Mortgage in the original principal amount of the related Mortgage Loan
after all advances of principal,
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subject only to Permitted Encumbrances (or, if a title insurance policy
has not yet been issued in respect of any Mortgage Loan, a policy
meeting the foregoing description is evidenced by a commitment for
title insurance "marked-up" at the closing of such loan).
(vii) The Representing Party has not waived any material
default, breach, violation or event of acceleration existing under the
related Mortgage or Mortgage Note.
(viii) There is no valid offset, defense or counterclaim to
such Mortgage Loan.
(ix) The Representing Party has not received actual notice (A)
that there is any proceeding pending or threatened for the total or
partial condemnation of the related Mortgaged Property or (B) except
for certain fire damage at the Mortgaged Property relating to the
Mortgage Loan identified on the Mortgage Loan Schedule by control
number C065 and property name Deville Court Apartments (the "Deville
Court Apts. Loan"), that there is any material damage at the related
Mortgaged Property that materially and adversely affects the value of
such Mortgaged Property. In the case of the Deville Courts Apts. Loan,
repair and restoration costs resulting from the aforementioned fire
damage are covered in material part under an Insurance Policy that is
currently in effect.
(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 (1) the replacement cost and (2)
the amount necessary to avoid the operation of any co-insurance
provisions with respect to such Mortgaged Property, and is also covered
(except if such Mortgaged Property is operated as a mobile home park),
by rental insurance in an amount equal to the gross rentals for at
least a 12-month period (or, in the case of a Mortgaged Property not
having an elevator, for at least a 6-month period) and broad form
boiler and
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machinery insurance; no such insurance policy provides that it may be
cancelled, endorsed, altered or reissued to effect a change in coverage
unless such insurer shall have first given the mortgagee under such
Mortgage Loan 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 under such Mortgage Loan 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 and covering
rent loss and such other hazards, casualties, liabilities and
contingencies the Master Servicer shall require and in such amounts and
for such periods as the Master Servicer shall require; at least thirty
days prior to the expiration date of such policy, the related Mortgage
requires the Mortgagor to deliver to the mortgagee under such Mortgage
Loan 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, upon 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. In addition, if the related
Mortgaged Property is located in a federally designated special flood
hazard area, the related Mortgagor is required to maintain flood
insurance in respect thereof (exclusive of any parking lot or unused or
undeveloped portion thereof).
(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) Except as indicated on the Mortgage Loan Schedule, such
Mortgage Loan is not cross-collateralized with other Mortgage Loans in
the Mortgage Pool. Such Mortgage Loan is not cross-collateralized with
a mortgage loan outside the Mortgage Pool.
(xvi) Except as indicated on Schedule III hereto or as
contained in the related Mortgage File, 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.
(xvii) There are no delinquent taxes, ground rents, insurance
premiums, assessments, including, without limitation, assessments
payable in future installments, or other similar outstanding charges
(and, to the actual knowledge of the Representing Party, at origination
of such Mortgage Loan, there were no delinquent water charges or sewer
rents) affecting the related Mortgaged Property.
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(xviii) The interest of the Mortgagor in the related Mortgaged
Property consists of a fee simple and/or leasehold interest 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 of such escrow deposits, are in the possession, or
under the control of the Representing Party or its agents (which shall
include the Master Servicer).
(xxii) Except in the case of the Joliet Loan (insofar as the
related Mortgaged Property is encumbered by a materialmen's lien in the
amount of $160,447), as of the date of origination of such Mortgage
Loan and as of the Closing Date, the related Mortgaged Property was and
is free and clear of any mechanics' and materialmen's liens or liens in
the nature thereof which create a lien prior to that created by the
related Mortgage(s).
(xxiii) No improvement that was included for the purpose of
determining the appraised value of the related Mortgaged Property at
the time of origination of such Mortgage Loan lies outside the
boundaries and building restriction lines of such property to any
material extent, and no improvements on adjoining properties materially
encroach upon such Mortgaged Property to any material extent, and no
improvement located on or forming part of such Mortgaged Property is in
material violation of any applicable 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 and necessary for the enforceability or collectability of
the Mortgage Loan, 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
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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, except that, as identified on the Mortgage Loan Schedule,
such Mortgage Loan may provide that during the period commencing on a
specified date and continuing until such Mortgage Loan is paid in full,
additional interest will accrue (and may be compounded) on such
Mortgage Loan and shall be payable only after the outstanding principal
of the Mortgage Loan is paid in full.
(xxviii) No holder of such Mortgage Loan has, to the
Representing Party's knowledge, advanced funds or induced, solicited or
knowingly received any advance of funds from a party other than the
owner of the related Mortgaged Property, directly or indirectly, for
the payment of any amount required by the Mortgage Loan.
(xxix) To the Representing Party's knowledge, based on due
diligence customarily performed in the origination of comparable
mortgage loans, as of the date of origination of such Mortgage Loan,
(A) the related Mortgagor was in possession of all material licenses,
permits and authorizations required by applicable laws for the
ownership and operation of the related Mortgaged Property as it was
then operated and (B) all such licenses, permits and authorizations
were valid and in full force and effect.
(xxx) The related Mortgage(s) or Mortgage Note, together with
applicable state law, contains customary and enforceable provisions
(subject to the exceptions set forth in clauses (c)(v) and (c)(xii)
above) such as to render the rights and remedies of the 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, but not a mortgage lien on the related fee interest, 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
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Loan or (B) the related ground lessor has granted the holder of the
Mortgage Loan the right to cure any default or breach by the lessee.
Upon the foreclosure of such Mortgage Loan (or acceptance of a deed in
lieu thereof), the related Ground Lease is assignable to the mortgagee
under the leasehold estate and its assigns without the consent of the
ground lessor thereunder.
(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) The terms of such Mortgage Loan provide or, at
lender's option, permit, and the terms of this Agreement and any
Sub-Servicing Agreement to which such Mortgage Loan is subject provide
for purposes of calculating distributions on the Certificates and
additional compensation payable to the Master Servicer, the Special
Servicer and any related Sub-Servicer, that payments on and proceeds of
such Mortgage Loan will be applied to principal and interest at the
related Mortgage Rate (excluding, in the case of a Hyper-Amortization
Loan after its Anticipated Repayment Date, Additional Interest) due and
owing at the time such payments or proceeds are received, prior to
being applied to any Default Charges, assumption fees and modification
fees then due and owing.
(xxxv) If such Mortgage Loan is, as of the Closing Date,
subject to a Sub- Servicing Agreement, such Sub-Servicing Agreement
provides that the related Sub- Servicer is not to receive any
sub-servicing compensation with respect to such Mortgage Loan during
any period that such Mortgage Loan is a Specially Serviced Mortgage
Loan or an REO Loan (except for any Termination Strip payable to a
Sub-Servicer in connection with a termination thereof without cause as
contemplated by Section 3.22(d) hereof).
(xxxvi) 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.
(xxxvii) 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.
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(xxxviii) Except in the case of the Mortgaged Property
relating to the Mortgage Loan identified on the Mortgage Loan Schedule
as control number N086 and property name Van Owen Marketplace (the "Van
Owen Loan"), 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 is
not pursuing a foreclosure action. The subordinate debt relating to the
Van Owen Loan requires no payments for the first five years of its term
and thereafter requires payment of principal only.
(xxxix) If such Mortgage Loan is secured by a mortgage lien on
the applicable Mortgagor's leasehold interest under a Ground Lease,
such Ground Lease has an original term (or an original term plus one or
more optional renewal terms, which, under all circumstances, may be
exercised, and will be enforceable, by the mortgagee if it takes
possession of such leasehold interest) that extends not less than 10
years beyond the stated maturity of the related Mortgage Loan.
(xl) In the event fraud was committed by the Mortgagor in
connection with the origination thereof, such Mortgage Loan becomes a
recourse obligation of the Mortgagor.
(xli) If such Mortgage Loan is a Hyper-Amortization Loan, it
commenced amortizing on its initial scheduled Due Date and provides
that: (i) its Mortgage Rate will increase by no more than two
percentage points in connection with the passage of its Anticipated
Repayment Date; (ii) its Anticipated Repayment Date is not less than
seven years following the origination of such Mortgage Loan; (iii) any
cash flow from the related Mortgaged Property that is applied to
amortize such Mortgage Loan following its Anticipated Repayment Date
shall, to the extent such net cash flow is in excess of the Monthly
Payment payable therefrom, be net of budgeted and discretionary
(servicer approved) capital expenditures; and (iv) if the property
manager for the related Mortgaged Property can be removed by or at the
direction of the lender on the basis of a debt service coverage test,
the subject debt service coverage ratio shall be calculated without
taking account of any increase in the related Mortgage Rate on such
Mortgage Loan's Anticipated Repayment Date. No Hyper-Amortization Loan
provides that the property manager for the related Mortgaged Property
can be removed by or at the direction of the lender solely because of
the passage of the related Anticipated Repayment Date.
(xlii) Except in the case of those Mortgage Loans identified
on the Mortgage Loan Schedule by (A) control number N035 and property
name Lauder Ridge (the "Lauder Ridge Loan"), (B) control number N019
and property name Debaliviere Place IV (the "Debaliviere Loan") and (C)
control number N055 and property name Caroline Apartments (the
"Caroline
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Apts. Loan"), at origination of such Mortgage Loan, the related
Mortgagor was not, to the best of the Representing Party's actual
knowledge, a debtor in any state or federal bankruptcy or insolvency
proceeding.
(xliii) If such Mortgage Loan is secured by the interest of
the related Mortgagor under a Ground Lease, then, as of the origination
of such Mortgage Loan, such Ground Lease was in full force and effect
and, to the Representing Party's actual knowledge, no material default
existed under such Ground Lease.
(xliv) The Representing Party has no actual knowledge of any
pending litigation or other legal proceedings involving the related
Mortgagor or the related Mortgaged Property that can reasonably be
expected to materially interfere with the security intended to be
provided by the related Mortgage, the current use of the related
Mortgaged Property, or the current ability of the Mortgaged Property to
generate net operating income sufficient to service the Mortgage Loan.
(xlv) Except in the case of the Mortgage Loan identified on
the Mortgage Loan Schedule as control number N186 and property name
Franklin Nursing Home, if such Mortgage Loan had a Cut-off Date Balance
greater than 1% of the Initial Pool Balance, the related Mortgagor has
covenanted in its organizational documents and/or the Mortgage Loan
documents to own no significant asset other than the related Mortgaged
Property, Mortgaged Properties securing other Mortgage Loans and assets
incidental to its ownership and operation of such Mortgaged Property or
Properties.
(xlvi) Except as identified on Schedule IV hereto, neither the
related Mortgage Note nor the related Mortgage requires the mortgagee
to release all or any material portion of the related Mortgaged
Property from the lien of the related Mortgage except upon payment in
full of all amounts due under the related Mortgage Loan.
(xlvii) Except as identified on Schedule V hereto, such
Mortgage Loan does not permit the related Mortgaged Property to be
encumbered subsequent to the Closing Date by any lien junior to or of
equal priority with the lien of the related Mortgage without the prior
written consent of the holder thereof.
The Additional Warranting Party hereby represents and
warrants, as of the Closing Date, to the other parties hereto and for the
benefit of the Certificateholders (and, accordingly, is the "Representing Party"
with respect to such representation and warranty so made) that immediately prior
to the transfer of each Midland/NMCC Mortgage Loan by Midland Commercial to the
Mortgage Loan Seller, Midland Commercial 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), and Midland Commercial had full right and authority to
sell, assign and transfer such Mortgage Loan to the Mortgage Loan Seller.
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The Mortgage Loan Seller hereby represents and warrants, as of
the Closing Date, to the other parties hereto and for the benefit of the
Certificateholders (and, accordingly, is the "Representing Party" with respect
to such representation and warranty so made) that, assuming the truth and
accuracy of the representations and warranties made by the Additional Warranting
Party with respect to the NMCC Mortgage Loans pursuant to paragraphs (i) and
(ii) of this Section 2.05(c) and pursuant to the preceding paragraph,
immediately prior to the transfer of each 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 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), and the Mortgage Loan Seller had full right
and authority to sell, assign and transfer such 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 Persons for whose benefit they were made for so long
as the Trust remains in existence, notwithstanding any restrictive or qualified
endorsement or assignment. Upon discovery by any of the parties hereto of a
breach of any of the representations and warranties set forth in subsection (a)
or (b) above which materially and adversely affects the interests of the
Certificateholders or any party hereto or a breach of any of the representations
and warranties set forth in subsection (c) above which materially and adversely
affects the value of any Mortgage Loan or the interests therein of the
Certificateholders, the party discovering such breach shall give prompt written
notice to each of the other parties hereto. It is further understood and agreed
that the Mortgage Loan Seller makes no representations or warranties with regard
to the NMCC Mortgage Loans (except as set forth in the last sentence of Section
2.05(c) above) and that the Mortgage Loan Seller has no obligation to cure any
breach of any representation or warranty made by the Additional Warranting Party
with respect to an NMCC Mortgage Loan nor to repurchase any NMCC Mortgage Loan
(except in connection with any breach of the representation and warranty made by
the Mortgage Loan Seller in the last sentence of Section 2.05(c) above). It is
also further understood and agreed that the Additional Warranting Party makes no
representations or warranties with regard to the CREI Mortgage Loans and that
the Additional Warranting Party has no obligation to cure any breach of any
representation or warranty made by the Mortgage Loan Seller with respect to a
CREI Mortgage Loan nor to repurchase any CREI Mortgage Loan.
SECTION 2.06. Representations and Warranties of the
Master Servicer.
(a) The Master Servicer hereby represents and warrants to the
other parties hereto and for the benefit of the Certificateholders, as of the
Closing Date, that:
(i) The Master Servicer is duly organized, validly existing
and in good standing as a limited partnership under the laws of the
State of Missouri, and the Master Servicer is in compliance with the
laws of each State in which any Mortgaged Property is located to the
extent necessary to perform its obligations under this Agreement.
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(ii) The execution and delivery of this Agreement by the
Master Servicer, and the performance and compliance with the terms of
this Agreement by the Master Servicer, will not violate the Master
Servicer's organizational documents or constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a
default) under, or result in the breach of, any material agreement or
other instrument to which it is a party or which is applicable to it or
any of its assets, which default, in the Master Servicer's good faith
and reasonable judgment, is likely to materially and adversely affect
either the ability of the Master Servicer to perform its obligations
under this Agreement or the financial condition of the Master Servicer.
(iii) The Master Servicer (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 Master Servicer, enforceable
against the Master Servicer in accordance with the terms hereof,
subject to (A) applicable bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors'
rights generally, and (B) general principles of equity, regardless of
whether such enforcement is considered in a proceeding in equity or at
law.
(v) The Master Servicer is not in violation of, and its
execution and delivery of this Agreement and its performance and
compliance with the terms of this Agreement will not constitute a
violation of, any law, any order or decree of any court or arbiter, or
any order, regulation or demand of any federal, state or local
governmental or regulatory authority, which violation, in the Master
Servicer's good faith and reasonable judgment, is likely to affect
materially and adversely either the ability of the Master Servicer to
perform its obligations under this Agreement or the financial condition
of the Master Servicer.
(vi) No litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which
would prohibit the Master Servicer from entering into this Agreement
or, in the Master Servicer's good faith and reasonable judgment, is
likely to materially and adversely affect either the ability of the
Master Servicer to perform its obligations under this Agreement or the
financial condition of the Master Servicer.
(vii) Each officer or employee of the Master Servicer 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). None of the Master Servicer, its general partner or any of
their
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respective officers 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 Master Servicer
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 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 (if any) 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.
SECTION 2.07. Representations and Warranties of the
Special Servicer.
(a) The Special Servicer hereby represents and warrants to the
other parties hereto and for the benefit of the Certificateholders, as of the
Closing Date, that:
(i) The Special Servicer is duly organized, validly existing
and in good standing as a limited partnership under the laws of the
State of Maryland, and the Special Servicer is in compliance with the
laws of each State in which any Mortgaged Property is located to the
extent necessary to perform its obligations under this Agreement.
(ii) The execution and delivery of this Agreement by the
Special Servicer, and the performance and compliance with the terms of
this Agreement by the Special Servicer, will not violate the Special
Servicer's organizational documents or constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a
default) under, or result in the breach of, any material agreement or
other instrument to which it is a party or which is applicable to it or
any of its assets, which default, in the Special Servicer's good faith
and reasonable judgement, is likely to materially and adversely effect
either the ability of the Special Servicer to perform its obligations
under this Agreement or the financial condition of the Special
Servicer.
(iii) The Special Servicer (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.
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(iv) This Agreement, assuming due authorization, execution and
delivery by each of the other parties hereto, constitutes a valid,
legal and binding obligation of the Special Servicer, enforceable
against the Special Servicer in accordance with the terms hereof,
subject to (A) applicable bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors'
rights generally, and (B) general principles of equity, regardless of
whether such enforcement is considered in a proceeding in equity or at
law.
(v) The Special Servicer is not in violation of, and its
execution and delivery of this Agreement and its performance and
compliance with the terms of this Agreement will not constitute a
violation of, any law, any order or decree of any court or arbiter, or
any order, regulation or demand of any federal, state or local
governmental or regulatory authority, which violation, in the Special
Servicer's good faith and reasonable judgment, is likely to affect
materially and adversely either the ability of the Special Servicer to
perform its obligations under this Agreement or the financial condition
of the Special Servicer.
(vi) No litigation is pending or, to the best of the Special
Servicer's knowledge, threatened against the Special Servicer which
would prohibit the Special Servicer from entering into this Agreement
or, in the Special Servicer's good faith and reasonable judgment, is
likely to materially and adversely affect either the ability of the
Special Servicer to perform its obligations under this Agreement or the
financial condition of the Special Servicer.
(vii) Each officer or employee of the Special Servicer 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). None of the Special Servicer, its general partner or any of
their respective officers 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 Special Servicer
set forth in Section 2.07(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 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 Special Servicer (if any) 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,
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partnership, bank, association or other type of organization, and without regard
to the references to general partner if such successor is not a partnership.
SECTION 2.08. Representations and Warranties of the
Trustee and the REMIC Administrator.
(a) LaSalle National Bank, both in its capacity as Trustee and
in its capacity as REMIC Administrator (the "Bank"), hereby represents and
warrants to the other parties hereto and for the benefit of the
Certificateholders, as of the Closing Date, that:
(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, which default, in the
Bank's good faith and reasonable judgement, 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.
(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.
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(vi) No litigation is pending or, to the best of the Bank's
knowledge, threatened against the Bank which would prohibit the Bank
from entering into this Agreement or, in the Bank's good faith and
reasonable judgment, is likely to materially and adversely affect
either the ability of the Bank to perform its obligations under this
Agreement or the financial condition of the Bank.
(b) The representations and warranties of the Bank 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 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 2.08(a), subject to such appropriate
modifications to the representation and warranty set forth in Section 2.08(a)(i)
to accurately reflect such successor's jurisdiction of organization and whether
it is a corporation, partnership, bank, association or other type of
organization. In any such case, the term "Bank" shall be deemed to mean such
successor Trustee or the REMIC Administrator, as appropriate.
SECTION 2.09. Representations and Warranties of the
Fiscal Agent.
(a) The Fiscal Agent hereby represents and warrants to each of
the other parties hereto and for the benefit of the Certificateholders, as of
the Closing Date, that:
(i) The Fiscal Agent is a foreign banking corporation duly
organized, validly existing and in good standing under the laws
governing its creation.
(ii) The execution and delivery of this Agreement by the
Fiscal Agent, and the performance and compliance with the terms of this
Agreement by the Fiscal Agent, will not violate the Fiscal Agent's
organizational documents or constitute a default (or an event which,
with notice or lapse of time, or both, would constitute a default)
under, or result in a material breach of, any material agreement or
other instrument to which it is a party or which is applicable to it or
any of its assets, which default, 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.
(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
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execution, delivery and performance of this Agreement, and has duly
executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by each of the other parties hereto, constitutes a valid,
legal and binding obligation of the Fiscal Agent, enforceable against
the Fiscal Agent in accordance with the terms hereof, subject to (A)
applicable bankruptcy, insolvency, reorganization, moratorium and other
laws affecting the enforcement of creditors' rights generally, and (B)
general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law.
(v) The Fiscal Agent is not in violation of, and its execution
and delivery of this Agreement and its performance and compliance with
the terms of this Agreement will not constitute a violation of, any
law, any order or decree of any court or arbiter, or any order,
regulation or demand of any federal, state or local governmental or
regulatory authority, which violation, in the Fiscal Agent's good faith
and reasonable judgment, is likely to affect materially and adversely
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 2.09(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 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 2.09(a), subject to such appropriate modifications to the
representation and warranty set forth in Section 2.09(a)(i) to accurately
reflect such successor's jurisdiction of organization and whether it is a
corporation, partnership, bank, association or other type of organization.
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SECTION 2.10. Issuance of the Class R-I Certificates;
reation of the REMIC I Regular Interests.
Concurrently with the assignment to the Trustee of the assets
included in REMIC I, and in exchange therefor, at the direction of the Sponsor,
the REMIC I Regular Interests have been issued hereunder and the Trustee has
executed, authenticated and delivered to or upon the order of the Sponsor, the
Class R-I Certificates in authorized denominations. The interests evidenced by
the Class R-I Certificates, together with the REMIC I Regular Interests,
constitute the entire beneficial ownership of REMIC I. The rights of the Class
R-I Certificateholders and REMIC II to receive distributions from the proceeds
of REMIC I in respect of the Class R-I Certificates and the REMIC I Regular
Interests, respectively, and all ownership interests of the Class R-I
Certificateholders and REMIC II in and to such distributions, shall be as set
forth in this Agreement.
SECTION 2.11. Conveyance of REMIC I Regular Interests;
Acceptance of REMIC II by the Trustee.
The Sponsor, as of the Closing Date, and concurrently with the
execution and delivery hereof, does hereby assign without recourse all the
right, title and interest of the Sponsor in and to the REMIC I Regular Interests
to the Trustee for the benefit of the Holders of the REMIC II Certificates. The
Trustee acknowledges the assignment to it of the REMIC I Regular Interests and
declares that it holds and will hold the same in trust for the exclusive use and
benefit of all present and future Holders of the REMIC II Certificates.
SECTION 2.12. Issuance of the REMIC II Certificates.
Concurrently with the assignment to the Trustee of the REMIC I
Regular Interests, and in exchange therefor, at the direction of the Sponsor,
the Trustee has executed, authenticated and delivered to or upon the order of
the Sponsor, the REMIC II Certificates in authorized denominations evidencing
the entire beneficial ownership of REMIC II. The rights of the respective
Classes of Holders of the REMIC II Certificates to receive distributions from
the proceeds of REMIC II in respect of their REMIC II Certificates, and all
ownership interests of the respective Classes of Holders of the REMIC II
Certificates in and to such distributions, shall be as set forth in this
Agreement.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
SECTION 3.01. Administration of the Mortgage Loans.
(a) Each of the Master Servicer and the Special Servicer shall
service and administer the Mortgage Loans that it is obligated to service and
administer pursuant to this Agreement on behalf of the Trustee, and in the best
interests and for the benefit of the Certificateholders, in accordance with any
and all applicable laws and the terms of this Agreement, the Insurance Policies
and the respective Mortgage Loans and, to the extent consistent with the
foregoing, in accordance with the Servicing Standard. Without limiting the
foregoing, and subject to Section 3.21, (i) the Master Servicer shall service
and administer all Mortgage Loans as to which no Servicing Transfer Event has
occurred and all Corrected Mortgage Loans, and (ii) the Special Servicer shall
service and administer (x) each Mortgage Loan (other than a Corrected Mortgage
Loan) as to which a Servicing Transfer Event has occurred, and (y) each REO
Property; provided, however, that the Master Servicer shall continue to collect
information and prepare all reports to the Trustee required hereunder with
respect to any Specially Serviced Mortgage Loans and REO Properties (and the
related REO Loans), and further to render such incidental services with respect
to any Specially Serviced Mortgage Loans and REO Properties as are specifically
provided for herein.
(b) Subject to Section 3.01(a), the Master Servicer and the
Special Servicer each shall have full power and authority, acting alone, to do
or cause to be done any and all things in connection with such servicing and
administration which it may deem necessary or desirable. Without limiting the
generality of the foregoing, each of the Master Servicer and the Special
Servicer, in its own name, with respect to each of the Mortgage Loans it is
obligated to service hereunder, is hereby authorized and empowered by the
Trustee to execute and deliver, on behalf of the Certificateholders and the
Trustee or any of them: (i) any and all financing statements, continuation
statements and other documents or instruments necessary to maintain the lien
created by any Mortgage or other security document in the related Mortgage File
on the related Mortgaged Property and related collateral; (ii) in accordance
with the Servicing Standard and subject to Sections 3.08 and 3.20, any and all
modifications, waivers, amendments or consents to or with respect to any
documents contained in the related Mortgage File; and (iii) any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments. Subject to Section 3.10, the
Trustee shall, at the written request of a Servicing Officer of the Master
Servicer or the Special Servicer, furnish, or cause to be so furnished, to the
Master Servicer and the Special Servicer, as the case may be, any limited powers
of attorney and other documents necessary or appropriate to enable them to carry
out their servicing and administrative duties hereunder; provided, however, that
the Trustee shall not be held liable for any misuse of any such power of
attorney by the Master Servicer or the Special Servicer.
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(c) The relationship of each of the Master Servicer and
Special Servicer to the Trustee under this Agreement is intended by the parties
to be that of an independent contractor and not that of a joint venturer,
partner or agent.
(d) In the event that any two or more Mortgage Loans are
cross-collateralized with each other, the Master Servicer or Special Servicer,
as applicable, in accordance with the terms of this Agreement, shall service and
administer such Mortgage Loans as a single Mortgage Loan as and when it deems
necessary and appropriate, consistent with the Servicing Standard. If any
Cross-Collateralized Mortgage Loan becomes a Specially Serviced Mortgage Loan,
then each other Mortgage Loan that is cross-collateralized with it shall also
become a Specially Serviced Mortgage Loan. Similarly, no Cross-Collateralized
Mortgage Loan shall subsequently become a Corrected Mortgage Loan, unless and
until all Servicing Transfer Events in respect of each other Mortgage Loan that
is cross-collateralized with it, are remediated or otherwise addressed as
contemplated in the definition of "Specially Serviced Mortgage Loan".
SECTION 3.02. Collection of Mortgage Loan Payments.
Each of the Master Servicer and the Special Servicer shall
make reasonable efforts to collect all payments called for under the terms and
provisions of the Mortgage Loans it is obligated to service hereunder, and
shall, to the extent such procedures shall be consistent with this Agreement
(including without limitation, the Servicing Standard), follow such collection
procedures as it would follow were it the owner of such Mortgage Loans;
provided, however, that nothing herein contained shall be construed as an
express or implied guarantee by the Master Servicer or the Special Servicer of
the collectability of the Mortgage Loans; and, provided, further, that neither
the Master Servicer nor the Special Servicer shall, with respect to any Hyper-
Amortization Loan after its Anticipated Repayment Date, take any enforcement
action with respect to the payment of Additional Interest (other than the making
of requests for its collection), unless (i) the taking of an enforcement action
with respect to the payment of other amounts due under such Mortgage Loan is, in
the good faith and reasonable judgment of the Special Servicer, and without
regard to such Additional Interest, also necessary, appropriate and consistent
with the Servicing Standard or (ii) all other amounts due under such Mortgage
Loan have been paid, the payment of such Additional Interest has not been
forgiven in accordance with Section 3.20 and, in the good faith and reasonable
judgment of the Special Servicer, the Liquidation Proceeds expected to be
recovered in connection with such enforcement action will cover the anticipated
costs of such enforcement action and, if applicable, any associated Advance
Interest. Consistent with the foregoing, the Master Servicer or the Special
Servicer each may waive any Default 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.
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SECTION 3.03. Collection of Taxes, Assessments and
Similar Items; Servicing Accounts;
Reserve Accounts.
(a) The Master Servicer shall, as to all the Mortgage Loans,
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 9.01. The Master
Servicer shall 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 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. The Special
Servicer shall promptly deliver all Escrow Payments received by it to the Master
Servicer for deposit in the applicable Servicing Account.
(b) The Master Servicer shall (with the cooperation of the
Special Servicer in the case of Specially Serviced Mortgage Loans), (i) maintain
accurate records with respect to each 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, the Master Servicer 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, the Master
Servicer shall, as to all the Mortgage Loans (but at the direction of the
Special Servicer in the case of Specially Serviced Mortgage Loans), advance with
respect to the related Mortgaged Property all such funds
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as are necessary for the purpose of effecting the payment of (i) real estate
taxes, assessments and other similar items, (ii) ground rents or other 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) The Master Servicer shall, as to all the Mortgage Loans,
establish and maintain, as applicable, one or more accounts (the "Reserve
Accounts"), into which all Reserve Funds, if any, shall be deposited and
retained. Withdrawals of amounts so deposited may be made to pay for or
otherwise cover, or (if appropriate) to reimburse the related Mortgagor in
connection with, the specific items for which such Reserve Funds were escrowed,
all in accordance with the Servicing Standard and the terms of the related
Mortgage Note, Mortgage and any agreement with the related Mortgagor governing
such Reserve Funds. Subject to the terms of the related Mortgage Note and
Mortgage, all Reserve Accounts shall be Eligible Accounts. The Special Servicer
shall promptly deliver all Reserve Funds received by it to the Master Servicer
for deposit in the applicable Reserve Account.
SECTION 3.04. Certificate Account and Distribution
Account.
(a) The Master Servicer shall establish and maintain one or
more accounts (collectively, the "Certificate Account"), held on behalf of the
Trustee in trust for the benefit of the Certificateholders. The Certificate
Account shall be an Eligible Account. The Master Servicer shall deposit or cause
to be deposited in the Certificate Account, within two Business Days of receipt
(in the case of payments by Mortgagors or other collections on or in respect of
the Mortgage Loans) or as otherwise required hereunder, the following payments
and collections received or made by or on behalf of it subsequent to the Cut-off
Date (other than in respect of principal, interest and any other amounts due and
payable on the Mortgage Loans on or before the Cut-off Date, which payments
shall be delivered promptly to the Mortgage Loan Seller or its designee, with
negotiable instruments endorsed as necessary and appropriate without recourse):
(i) all payments on account of principal, including
Principal Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest at the respective
Mortgage Rates on the Mortgage Loans and all Prepayment Premiums
received in respect of the Mortgage Loans;
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(iii) to the extent allocable to the period that any Mortgage
Loan is a Specially Serviced Mortgage Loan, all payments on account of
Default 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;
(vii) any amounts required to be transferred from the REO
Account pursuant to Section 3.16(c); and
(viii) any amounts representing payments made by Mortgagors
that are allocable to cover items in respect of which Servicing
Advances have been made.
The foregoing requirements for deposit in the Certificate
Account shall be exclusive. Without limiting the generality of the foregoing,
(A) actual payments from Mortgagors in the nature of Escrow Payments, and
amounts that the Master Servicer and the Special Servicer are entitled to retain
as additional servicing compensation pursuant to Section 3.11(b) and Section
3.11(d), respectively, need not be deposited by the Master Servicer in the
Certificate Account and (B) with respect to any amount representing a
sub-servicing fee (including, without limitation, a Primary Servicing Fee, if
applicable) that otherwise would be required to be deposited by the Master
Servicer in the Certificate Account and that, once so deposited, would have been
permitted to be withdrawn immediately from the Certificate Account pursuant to
Section 3.05 as part of the payment of the Master Servicing Fee, such amount
shall be deemed to have been deposited to and withdrawn from the Certificate
Account for such purpose to the extent that such sum has been retained by the
Sub-Servicer pursuant to the related Sub-Servicing Agreement. If the Master
Servicer shall deposit in the Certificate Account any amount not required to be
deposited therein, it may at any time withdraw such amount from the Certificate
Account, any provision herein to the contrary notwithstanding. The Master
Servicer shall promptly deliver to the Special Servicer, as additional special
servicing compensation in accordance with Section 3.11(d), assumption fees,
modification fees, Net Default 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
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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.
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 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.
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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 payable from, and limited to, amounts that represent Late
Collections of interest and principal (net of related Master Servicing
Fees, Workout Fees and/or Liquidation Fees payable therefrom) received
in respect of the particular Mortgage Loan or REO Loan as to which such
P&I Advance was made;
(iii) to pay to the Master Servicer earned and unpaid Master
Servicing Fees in respect of each Mortgage Loan and REO Loan, the
Master Servicer's right to payment pursuant to this clause (iii) with
respect to any Mortgage Loan or REO Loan being payable from, and
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;
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(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 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 payable from, and 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 payable from,
and limited to, Default Charges collected in respect of the Mortgage
Loan or REO Loan as to which the related Advances were made (but only
to the extent allocable to the period when such Mortgage Loan was a
Specially Serviced Mortgage Loan or an REO Loan);
(ix) at or following such time as the Master Servicer
reimburses itself, the Special Servicer, the Trustee or the Fiscal
Agent, as applicable, for any unreimbursed Advance pursuant to clause
(ii), (vi) or (vii) above or Section 3.03, and insofar as payment has
not already been made pursuant to clause (viii) above, to pay the
Fiscal Agent, the Trustee, the Special Servicer or the Master Servicer,
as the case may be, and in that order, out of general collections on
the Mortgage Loans and any REO Properties, any related Advance Interest
accrued and payable 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 and, to the extent not allocable to the period that
any Mortgage Loan is a Specially Serviced Mortgage Loan or
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REO Loan, any Default 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 Default Charges collected on
any Mortgage Loan to the extent 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 Section
3.11(h), the last sentence of Section 7.02 and the last sentence of
Section 8.08(a); and
(xvii) to clear and terminate the Certificate Account at the
termination of this Agreement pursuant to Section 9.01.
If amounts on deposit in the Certificate Account at any
particular time (after withdrawing any portion of such amounts deposited in the
Certificate Account in error) are insufficient to satisfy all payments,
reimbursements and remittances to be made therefrom as set forth in clauses (ii)
through (xvi) above, then the corresponding withdrawals from the Certificate
Account shall be made in the following priority and subject to the following
rules: (A) if the payment, reimbursement or remittance is to be made from a
specific source of funds, then such payment, reimbursement or remittance shall
be made from that specific source of funds on a pro rata basis with any and all
other payments, reimbursements and remittances to be made from such
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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;
(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
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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
pursuant to Section 10.01(d) and/or Section 10.01(g); and
(vii) to clear and terminate the Distribution Account at the
termination of this Agreement pursuant to Section 9.01.
SECTION 3.06. Investment of Funds in the Certificate
Account and the REO Account.
(a) The Master Servicer may direct any depository institution
maintaining the Certificate Account, and the Special Servicer may direct any
depository institution maintaining the REO Account, to invest, or if it is such
depository institution, may itself invest, the funds held therein (each such
account, for purposes of this Section 3.06, an "Investment Account") in one or
more Permitted Investments bearing interest or sold at a discount, and maturing,
unless payable on demand, no later than the Business Day immediately preceding
the next succeeding date on which such funds are required to be withdrawn from
such account pursuant to this Agreement. All such Permitted Investments shall be
held to maturity, unless payable on demand, in which case such investments may
be sold at any time. Any investment of funds in an Investment Account shall be
made in the name of the Trustee for the benefit of the Certificateholders (in
its capacity as such). The Master Servicer (with respect to Permitted
Investments of amounts in the Certificate Account) and the Special Servicer
(with respect to Permitted Investments of amounts in the REO Account), on behalf
of the Trustee for the benefit of the Certificateholders, shall (and the Trustee
hereby designates the Master Servicer and the Special Servicer, as applicable,
as the Person that shall) maintain continuous possession of any Permitted
Investment that is either (i) a "certificated security", as such term is defined
in the UCC, or (ii) other property in which a secured party may perfect its
security interest by possession under the UCC or any other applicable law.
Possession of any such Permitted Investment by the Master Servicer or the
Special Servicer shall constitute possession by a person designated by the
Trustee for purposes of Section 8-313 of the UCC and possession by the Trustee,
as secured party, for purposes of Section 9-305 of the UCC and any other
applicable law. If amounts on deposit in an Investment Account are at any time
invested in a Permitted Investment payable on demand, the Master
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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.
(d) Notwithstanding the investment of funds held in any
Investment Account, for purposes of the calculations hereunder, including,
without limitation, the calculation of the Available Distribution Amount and the
Master Servicer Remittance Amount, the amounts so invested (but not any interest
earned thereon) shall be deemed to remain on deposit in such Investment Account.
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SECTION 3.07. Maintenance of Insurance Policies; Errors
and Omissions and Fidelity Coverage.
(a) Each of the Master Servicer and the Special Servicer
shall, as to those Mortgage Loans it is obligated to service hereunder, use its
best efforts in accordance with the Servicing Standard to cause the related
Mortgagor to maintain (and, if the related Mortgagor does not so maintain, the
Master Servicer (even in the case of Specially Serviced Mortgage Loans) shall
itself maintain (subject to the provisions of this Agreement regarding
Nonrecoverable Advances, and further subject to Section 3.11(h) hereof), to the
extent the Trustee, as mortgagee on behalf of the Certificateholders, has an
insurable interest and to the extent available at commercially reasonable rates)
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 Master Servicer or the Special Servicer, as appropriate,
shall impose such insurance requirements as are consistent with the Servicing
Standard. The Special Servicer shall 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 related 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 re leased 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 or Stated 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 (in the case of the Master
Servicer) or REO Properties (in the case of the Special Servicer),
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
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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 Mortgaged Properties or REO Properties, as
applicable, so covered, and the premium costs thereof shall be, if and
to the extent they are specifically attributable either to a specific
Mortgaged Property during any period that the related Mortgagor has
failed to maintain the hazard insurance required under the related
Mortgage Loan in respect of such Mortgaged Property or to a specific
REO 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, as applicable, 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 (without right of reimbursement) 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 shall cause any Mortgaged Property
or the Special Servicer shall cause any REO Property 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 such Mortgaged
Property (in the case of the Master Servicer) or REO Property (in the
case of the Special Servicer). If the Master Servicer shall cause any
Mortgaged Property as to which the related Mortgagor has failed to
maintain the required insurance coverage, or the Special Servicer shall
cause 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
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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, as the case may be, 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 property specific policy
had it been maintained, promptly 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 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 Fannie Mae or Freddie Mac
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 each of the initial Master Servicer and the initial
Special Servicer, its general partner's) officers and employees 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 Fannie Mae or Freddie Mac 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
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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 of a
controlling interest in the related Mortgagor; or
(ii) provides that such Mortgage Loan may not be assumed
without the consent of the mortgagee in connection with any such sale
or other transfer,
then, for so long as such Mortgage Loan is included in the Trust Fund, each of
the Master Servicer and the Special Servicer shall, on behalf of the Trustee as
the mortgagee of record, as to those Mortgage Loans it is obligated to service
hereunder, exercise (or waive its right to exercise) any right it may have with
respect to such Mortgage Loan (x) to accelerate the payments thereon, or (y) to
withhold its consent to any such sale or other transfer, in a manner consistent
with the Servicing Standard, but subject to Section 3.20(a)(iii); provided that,
notwithstanding anything to the contrary contained herein, 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-sale"
clause unless it first (1) shall have provided, at least five Business Days
prior to the granting of such waiver or consent, to any single Holder that
constitutes the Majority Certificateholder of the Controlling Class and, in the
case of the Master Servicer, to the Special Servicer written notice of the
matter and a written explanation of the surrounding circumstances, (2) upon
request made within such five Business Day-period, shall have discussed the
matter with any such single Holder that constitutes the Majority
Certificateholder of the Controlling Class and/or, in the case of the Master
Servicer, with the Special Servicer and (3) if the then-outstanding principal
balance of the subject Mortgage Loan (together with the then-outstanding
aggregate principal balance of all other Mortgage Loans to the same Mortgagor or
to other Mortgagors that are, to the Master Servicer's or Special Servicer's, as
applicable, actual knowledge, Affiliates of the Mortgagor under the subject
Mortgage Loan) is more than 2% of the then-outstanding aggregate principal
balance of the Mortgage Pool, shall have obtained written confirmation from each
Rating Agency that such action shall not result in a qualification, downgrade or
withdrawal of the rating then assigned by such Rating Agency to any Class of
Certificates; and provided, further, that, notwithstanding anything to the
contrary contained herein, 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-sale" clause governing the transfer of any
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Mortgaged Property which secures, or controlling interests in any Mortgagor
under, a Group of Cross-Collateralized Mortgage Loans unless all of the
Mortgaged Properties securing, or a controlling interest in all the Mortgagors
(if more than one) under, such Group of Cross- Collateralized Mortgage Loans are
transferred simultaneously to the same transferee. 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, may, if consistent with the Servicing Standard, 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, notwithstanding anything to the contrary
contained herein, 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 unless it first (1)
shall have provided, at least five Business Days prior to the granting of such
waiver or consent, to any single Holder that constitutes the Majority
Certificateholder of the Controlling Class and, in the case of the Master
Servicer, to the Special Servicer written notice of the matter and a written
explanation of the surrounding circumstances, and (2) upon request made within
such five Business Day-period, shall have discussed the matter with any such
single Holder that constitutes the Majority Certificateholder of the Controlling
Class and/or, in the case of the Master Servicer, with the
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Special Servicer; and provided, further, that, notwithstanding anything to the
contrary contained herein, 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 qualification, downgrade or withdrawal of the rating then assigned by
such Rating Agency to any Class of Certificates.
(c) Nothing in this Section 3.08 shall constitute a waiver of
the Trustee's right, as the mortgagee of record, to receive notice of any
assumption of a Mortgage Loan, any sale or other transfer of the related
Mortgaged Property or the creation of any additional lien or other encumbrance
with respect to such Mortgaged Property.
SECTION 3.09. Realization Upon Defaulted Mortgage Loans.
(a) The Special Servicer shall, subject to subsections (b)
through (d) of this Section 3.09, exercise reasonable efforts, consistent with
the Servicing Standard, to foreclose upon or otherwise comparably convert (which
may include an REO Acquisition) the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments, and
which are not released from the Trust Fund pursuant to any other provision
hereof, if the Special Servicer determines, consistent with the Servicing
Standard, that such action would be in the best economic interest of the Trust;
provided that neither the Master Servicer nor the Special Servicer shall, with
respect to any Hyper-Amortization Loan after its Anticipated Repayment Date,
take any enforcement action with respect to the payment of Additional Interest
(other than the making of requests for its collection) unless (i) the taking of
an enforcement action with respect to the payment of other amounts due under
such Mortgage Loan is, in the good faith and reasonable judgment of the Special
Servicer, and without regard to such Additional Interest, also necessary,
appropriate and consistent with the Servicing Standard or (ii) all other amounts
due under such Mortgage Loan have been paid, the payment of such Additional
Interest has not been forgiven in accordance with Section 3.20 and, in the good
faith and reasonable judgment of the Special Servicer, the Liquidation Proceeds
expected to be recovered in connection with such enforcement action will cover
the anticipated costs of such enforcement action and, if applicable, any
associated Advance Interest. The Special Servicer shall advance or direct the
Master Servicer to advance, as contemplated by Section 3.19(d), all costs and
expenses to be incurred on behalf of the Trust in any such proceedings, subject
to each of the Master Servicer and the Special Servicer being entitled to
reimbursement for any such advance as a Servicing Advance as provided in Section
3.05(a), and further subject to the Special Servicer's being entitled to pay out
of the related Liquidation Proceeds any Liquidation Expenses incurred in respect
of any Mortgage Loan, which Liquidation Expenses were outstanding at the time
such proceeds are received. 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 with Independent counsel regarding the order and
manner in which the Special Servicer should foreclose upon or
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comparably proceed against such properties (the cost of such consultation to be
advanced by the Master Servicer as a Servicing Advance, at the direction of the
Special Servicer, subject to the Master Servicer's being entitled to
reimbursement therefor as a Servicing Advance as provided in Section 3.05(a)).
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, 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 be advanced by the Master Servicer as a Servicing
Advance, subject to its being entitled to reimbursement therefor as a Servicing
Advance as provided in Section 3.05(a), such Advance to be made at the direction
of the Special Servicer when the Appraisal is obtained by the Special Service).
(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:
(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 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 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
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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 (or, in the case of a Hyper-Amortization Loan
after its Anticipated Repayment Date, at the related Net Mortgage Rate
immediately prior to the Anticipated Repayment Date)), 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 (or, in the in the case of a
Hyper-Amortization Loan after its Anticipated Repayment Date, at the
related Net Mortgage Rate immediately prior to the Anticipated
Repayment Date)), 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 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
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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 Trustee 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 Master Servicer, at the direction of the Special Servicer, shall advance the
costs incurred in any such deficiency action, subject to its being entitled to
reimbursement therefor as a Servicing Advance as provided in Section 3.05(a).
(h) The Special Servicer shall maintain accurate records,
certified by a Servicing Officer, of each Final Recovery Determination in
respect of any Mortgage Loan or REO Property and the basis thereof. Each Final
Recovery Determination shall be evidenced by an Officer's Certificate delivered
to the Trustee, the Master Servicer and the Rating Agencies no later than the
tenth Business Day following such Final Recovery Determination.
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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 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.
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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 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 changed or modified at any time following
the Closing Date) and applicable law, and without giving effect to any
Additional Interest that may accrue on any Hyper-Amortization Loan after its
Anticipated Repayment Date. 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) Default Charges, assumption fees, modification fees,
charges for beneficiary statements or demands 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;
(ii) amounts collected for checks returned for insufficient
funds, to the extent actually paid by a Mortgagor with respect to any
Mortgage Loan;
(iii) any Prepayment Interest Excesses collected on the
Mortgage Loans;
(iv) 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
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(v) 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;
provided that with respect to the items of additional servicing compensation set
forth in clauses (i) and (ii) above, the Master Servicer shall, in turn, pay the
amounts described therein to the related Sub-Servicer to the extent such
Sub-Servicer is entitled thereto under the applicable Sub- Servicing Agreement.
The Master Servicer shall be required to pay out of its own
funds all expenses in curred 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, and without
giving effect to any Additional Interest that may accrue on any
Hyper-Amortization Loan after its Anticipated Repayment Date. 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 under the terms of the related
Mortgage Note (as such terms may be modified at any time following the Closing
Date) and applicable law, and without giving effect to any Additional Interest
that may accrue on any Hyper-Amortization Loan after its Anticipated Repayment
Date. Standby Fees shall be payable monthly by the Master Servicer on a loan-by-
loan basis out of its Master Servicing Fees received with respect to each
Mortgage Loan and each REO Loan.
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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 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, in the case of a
Hyper-Amortization Loan after its Anticipated Repayment Date, Additional
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 Liquidation Proceeds (excluding any portion of such payoff and/or
proceeds that represents accrued but unpaid Additional Interest with respect to
a Hyper-Amortization Loan after its Anticipated Repayment Date or accrued but
unpaid Default Interest); provided that no Liquidation Fee will be payable with
respect to any such Specially Serviced Mortgage Loan that becomes a
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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.
(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 to the extent
allocable to an REO Loan, any Net Default Charges actually collected on
such Mortgage Loan or REO Loan, as the case may be, and (B) assumption
fees, modification fees, charges for beneficiary statements or demands
and any similar fees (excluding Prepayment Premiums) actually collected
on or with respect to Specially Serviced Mortgage Loans or REO Loans;
and
(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).
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 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, or
in the form of amounts collected for checks returned for insufficient funds with
respect to any Mortgage Loans (including, without limitation, Specially Serviced
Mortgage Loans), shall be paid promptly to the Master Servicer by the Special
Servicer.
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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 Master Servicer is not required to advance such expenses at the direction of
the Special Servicer, 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/or the Special Servicer. If such
Servicing Advance is not made by the Master Servicer or the Special Servicer
within one Business Day after such notice then (subject to Section 3.11(g)
below), the Trustee shall make such Servicing Advance. If the Trustee fails to
make any Servicing Advance required to be made under this Section 3.11(e), then
(subject to Section 3.11(g) below) the Fiscal Agent shall make such Advance
within one Business Day of such failure on the part of the Trustee, whereupon
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).
(f) As and to the extent permitted by Section 3.05(a), the
Master Servicer, the Special Servicer (to the extent it has not already been
reimbursed for any such Servicing Advance by 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
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 Default 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
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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 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. 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.
(h) Notwithstanding anything to the contrary set forth herein,
the Master Servicer shall (at the direction of the Special Servicer if a
Specially Serviced Mortgage Loan or an REO Property is involved) pay directly
out of the Certificate Account any servicing expense that, if paid by the Master
Servicer or the Special Servicer, would constitute a Nonrecoverable Servicing
Advance; provided that the Master Servicer (or the Special Servicer, if a
Specially Serviced Mortgage Loan or an REO Property is involved) has determined
in accordance with the Servicing Standard that making such payment is in the
best interests of the Certificateholders (as a collective whole), as evidenced
by an Officer's Certificate delivered promptly to the Trustee, the Sponsor and
the Rating Agencies, setting forth the basis for such determination and
accompanied by any information that the Master Servicer or the Special Servicer
may have obtained that supports such determination.
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)
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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 as soon as reasonably
possible 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 each
shall, within 10 days of the preparation thereof, deliver to the Trustee, any
single Holder that then constitutes the Majority Certificateholder of the
Controlling Class, the Rating Agencies and each other a copy of (and, upon
request, shall promptly discuss therewith the contents of) each such written
report prepared or caused to be prepared by or on behalf of it. Furthermore, the
Master Servicer shall obtain (and shall deliver to the requesting party and the
Trustee) such additional information with respect to the matters addressed in
such written report as the Special Servicer, and/or any single Holder that then
constitutes the Majority Certificateholder of the Controlling Class, may
reasonably request and shall cooperate with and reasonably assist the Special
Servicer in making direct inquiries with any Mortgagor to the extent any such
direct inquiry by the Special Servicer would not violate the terms of any
applicable Sub-Servicing Agreement; provided that if the Special Servicer or any
such Certificateholder shall desire such an inquiry to be made of a Mortgagor,
and if the subject Mortgage Loan is then being primary serviced by a
Sub-Servicer, then the Master Servicer shall in each instance (regardless of
whether such Mortgage Loan was originated by such Sub-Servicer), unless
otherwise agreed by such Sub-Servicer, first request that such Sub-Servicer make
such inquiry (and the Master Servicer or the Special Servicer may contact such
Mortgagor directly in such instance if such request has been so made to such
Sub-Servicer and the requested information has not thereafter been obtained by
such Sub-Servicer within a reasonable time). 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), copies of all the written reports
delivered to it pursuant to this Section 3.12(a) and, if and to the extent
delivered to it in a written or electronic format, the related additional
information referred to in the preceding sentence. 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
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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)(vi) 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 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; (iii) deliver copies of the
collected items, and of the written reports prepared in respect thereof, to the
Trustee, any single Holder that then constitutes the Majority Certificateholder
of the Controlling Class, the Rating Agencies and each other, in each case
within 45 days of its receipt or preparation, as applicable (it being understood
and agreed that with respect to Mortgage Loans (including, without limitation,
Specially Serviced Mortgage Loans) that are primary serviced by a Sub-Servicer,
such collected items shall be deemed to have been received by the Master
Servicer or the Special Servicer, as the case may be, at the same time they are
received by the applicable Sub-Servicer); and (iv) promptly upon the request of
any Person referred in the immediately preceding clause (iii), to discuss
therewith the contents of the collected items and the written reports referred
to in the immediately preceding clause (iii). Furthermore, the Master Servicer
shall obtain (and shall deliver to the requesting party and the Trustee) such
additional information with respect to the matters addressed in the collected
items and written reports referred to above as the Special Servicer, and/or any
single Holder that then constitutes the Majority Certificateholder of the
Controlling Class, may reasonably request and shall cooperate with and
reasonably assist the Special Servicer in making direct inquiries with any
Mortgagor to the extent any such direct inquiry by the Special Servicer would
not violate the terms of any applicable Sub-Servicing Agreement; provided that
if the Special Servicer or any such Certificateholder shall desire such an
inquiry to be made of a Mortgagor, and if the subject Mortgage Loan is then
being primary serviced by a Sub-Servicer, then the Master Servicer shall in each
instance (regardless of whether such Mortgage Loan was originated by such
Sub-Servicer), unless otherwise agreed by such Sub-Servicer, first request that
such Sub-Servicer make such inquiry (and the Master Servicer or the Special
Servicer may contact such Mortgagor directly in such instance if such request
has been so made to such Sub-Servicer and the requested information
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has not thereafter been obtained by such Sub-Servicer within a reasonable time).
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),
copies of all the written reports delivered to it pursuant to this Section
3.12(b) and, if and to the extent delivered to it in written or electronic
format, the related additional information referred to in the preceding
sentence. 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.
The Master Servicer and the Special Servicer, to the extent
applicable, will reasonably cooperate with the Sponsor in conforming any
Officer's Certificate delivered pursuant to this Section 3.13 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 pursuant to the Exchange Act.
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), each of the Master Servicer and the Special
Servicer, at its expense, shall cause a firm of independent public accountants
that is a member of the American Institute of Certified Public Accountants to
furnish a statement to the Sponsor and the Trustee to the effect that such firm
has examined such
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documents and records as it has deemed necessary and appropriate relating to the
Master Servicer's or the Special Servicer's, as the case may be, servicing of
the Mortgage Loans under this Agreement or the servicing of mortgage loans
similar to the Mortgage Loans under substantially similar agreements for the
preceding calendar year (or during the period from the date of commencement of
the Master Servicer's or the Special Servicer's, as the case may be, duties
hereunder until the end of such preceding calendar year in the case of the first
such certificate) and that the assertion of the management of the Master
Servicer or the Special Servicer, as the case may be, that it maintained an
effective internal control system over servicing of the Mortgage Loans or
similar mortgage loans is fairly stated in all material respects, based upon
established criteria, which statement meets the standards applicable to
accountants' reports intended for general distribution. 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, the Master Servicer and the Special
Servicer on or before March 1 of any year that such statements are required to
be filed with the Commission as part of the Form 10-K for the Trust covering the
prior calendar year, each of the Master Servicer and the Special Servicer shall
deliver such statement in respect of it by March 15 of such year.
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 pursuant to the Exchange Act.
SECTION 3.15. Access to Certain Information.
Each of the Master Servicer and the Special Servicer shall
provide or cause to be provided to the other such party, the Sponsor, the
Trustee and the Rating Agencies, and to the OTS, the FDIC, and any other federal
or state banking or insurance regulatory authority that may exercise authority
over any Certificateholder, access to any documentation regarding the Mortgage
Loans and the other assets of the Trust Fund that are 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 by the end
of the third calendar year following the year in which the Trust acquires
ownership of such REO Property 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
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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 of such REO
Property subsequent to the end of the third calendar year following the year in
which such acquisition occurred, 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 three years following the year that such property was
acquired, 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 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 end of the third calendar year following the year in
which the Trust acquired ownership of the related REO Property.
(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 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 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
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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. 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
(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 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
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REMIC Administrator shall consult with the Special Servicer and shall
advise the Special Servicer of the Trust's federal income tax reporting
position with respect to the various sources of income that the Trust
would derive under the Proposed Plan. In addition, the REMIC
Administrator shall (to the maximum extent possible) advise the Special
Servicer of the estimated amount of taxes that the Trust would be
required to pay with respect to each such source of income. After
receiving the information described in the two preceding sentences from
the 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 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 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, 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, 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
REMIC I to receive, and (unless required to do so under any lease, contract or
agreement to which the Special Servicer or the Trust 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
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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 direct the
Master Servicer to make (and the Master Servicer shall so make) Servicing
Advances in such amounts as are necessary for such purposes unless (as evidenced
in the manner contemplated by Section 3.11(g)) the Special Servicer or the
Master Servicer determines, in its reasonable, good faith judgment, that such
payment would be a Nonrecoverable Servicing Advance.
(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) shall be reasonable and customary in
consideration of the nature and locality of the REO Property;
(iii) any such contract shall be consistent with the
provisions of Treasury Regulation ss.1.856-4(b)(5) and, to the extent
consistent therewith, shall be administered to require that the
Independent Contractor, in a timely manner, (A) to the extent of
available revenue from the REO Property, pay all costs and expenses
incurred in connection with the operation and management of such REO
Property, including, without limitation, those listed in Section
3.17(b) above, and (B) remit all related revenues collected (net of its
fees and such costs and expenses) to the Special Servicer upon receipt;
(iv) none of the provisions of this Section 3.17(c) relating
to any such contract or to actions taken through any such Independent
Contractor shall be deemed to relieve the
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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 provided 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, at a price equal to the applicable Purchase Price, any such Defaulted
Mortgage Loan. The Purchase Price for any Mortgage Loan purchased under this
paragraph (b) shall be deposited into the Certificate Account, and the Trustee,
upon receipt of an Officer's Certificate from the Master Servicer to the effect
that such deposit has been made, shall release or cause to be released to the
Certificateholder(s) effecting such purchase (or any designee thereof) the
related Mortgage File, and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as shall be provided to
it and are reasonably necessary to vest in the Certificateholder(s) effecting
such purchase (or any designee thereof) ownership of such Mortgage Loan. In
connection with any such purchase, the Special Servicer shall deliver the
related Servicing File to the Certificateholder(s) effecting such purchase (or
any designee thereof).
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(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, 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. 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) 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, 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
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an offer to purchase any such Mortgage Loan or REO Property, and notwithstanding
anything to the contrary herein, neither the Trustee nor the Fiscal Agent, each
in its respective individual capacity, nor any of their respective Affiliates
may make an offer for or purchase any Defaulted Mortgage Loan or any REO
Property pursuant hereto.
(e) Whether any cash offer constitutes a fair price for any
Defaulted Mortgage Loan or REO Property, as the case may be, for purposes of
Section 3.18(d), shall be determined by the Special Servicer or, if such cash
offer is from an Interested Person, by the Trustee. In determining whether any
offer received from an Interested Person represents a fair price for any such
Mortgage Loan or REO Property, the Trustee shall be supplied with and shall rely
on the most recent Appraisal or updated Appraisal conducted in accordance with
this Agreement within the preceding 12-month period or, in the absence of any
such Appraisal, on a narrative appraisal prepared by a Qualified Appraiser,
retained by the Special Servicer. Such appraiser shall be selected by the
Special Servicer if neither the Special Servicer nor any Affiliate thereof is
making an offer with respect to a Defaulted Mortgage Loan or REO Property and
shall be selected by the Trustee if the Special Servicer or an Affiliate thereof
is making such an offer. The cost of any such narrative appraisal shall be
advanced by the Master Servicer, at the direction of the Special Servicer, and
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
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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 (except such recourse imposed by those
representations and warranties typically given in such transactions, any
prorations applied thereto and any customary closing matters), and if such sale
is consummated in accordance with the terms of this Agreement, none of the
Special Servicer, the Master Servicer or the Trustee shall have any liability to
any Certificateholder with respect to the purchase price therefor accepted by
the Special Servicer or the Trustee.
(g) Any sale of a Defaulted Mortgage Loan or any REO Property
shall be for cash only (unless, as evidenced by an Opinion of Counsel, changes
in the REMIC Provisions made subsequent to the Startup Day allow a sale for
other consideration).
(h) Notwithstanding any of the foregoing paragraphs of this
Section 3.18, the Special Servicer shall not be obligated to accept the highest
cash offer if the Special Servicer determines, in accordance with the Servicing
Standard, that rejection of such offer would be in the best interests of the
Certificateholders, and the Special Servicer may accept a lower cash offer (from
any Person other than itself or an Affiliate) if it determines, in accordance
with the Servicing Standard, that acceptance of such offer would be in the best
interests of the Certificateholders (for example, if the prospective buyer
making the lower offer is more likely to perform its obligations or the terms
(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; provided that, if the Master Servicer in
its reasonable, good faith determination believes that any item of information
contained in such Servicing Files is of a nature that it should be conveyed to
all Certificateholders at the same time, it shall, as soon as reasonably
possible following its receipt of any such item of information, disclose such
item of information to the Trustee as part of the reports to be delivered to the
Trustee by the Master Servicer pursuant to Section 4.02(b), and until the
Trustee has either disclosed such information to all Certificateholders in a
Distribution Date Statement or has properly filed such information with the
Commission on behalf of the Trust under the Exchange Act, the Master Servicer
shall be entitled to withhold such item of information from any
Certificateholder or Certificate Owner or prospective transferee of a
Certificate or an interest therein; and provided, further, that the Servicer
shall not be required to make particular items of information contained in the
Servicing File for any Mortgage Loan available to any Person if the disclosure
of such particular items of information is expressly prohibited by the
provisions of any related Mortgage Loan documents. Except as set forth in the
provisos to the preceding sentence, copies of all or any portion of any
Servicing File are to be made available by the Master Servicer upon request;
however, the Master
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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, unless
the Sponsor directs otherwise, (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 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
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, except to the extent that the Sponsor grants written permission to
the contrary. The Master Servicer shall not be liable for the dissemination of
information in accordance with this Section 3.19(a).
(b) Within 30 days (or within such longer period as the Master
Servicer or the Special Servicer, as applicable, is (as certified thereby to the
Trustee in writing) diligently and in good faith proceeding to obtain the
Appraisal referred to below) after the earliest of (i) the date on which any
Mortgage Loan becomes a Modified Mortgage Loan, (ii) the 90th day following the
occurrence of any uncured delinquency in Monthly Payments with respect to any
Mortgage Loan, (iii) the date on which a receiver is appointed in respect of the
Mortgaged Property securing any Mortgage Loan, (iv) the date on which the
Mortgagor under any Mortgage Loan becomes the subject of bankruptcy or
insolvency proceedings, and (v) the date on which the Mortgaged Property
securing any Mortgage Loan becomes an REO Property (each such Mortgage Loan and
any related REO Loan, 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 advanced by
the Master Servicer, subject to its being entitled to reimbursement therefor as
a Servicing Advance as provided in Section 3.05(a), such Advance to be made at
the direction of the Special Servicer when the Appraisal is obtained by the
Special Servicer.
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 shall be advanced by the Master
Servicer as a Servicing Advance at the direction of the Special Servicer,
subject to the Master Servicer's right
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to reimbursement as provided in Section 3.05(a)). 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 the Special Servicer, but not previously reimbursed (whether pursuant to
Section 3.05(a), this Section 3.19(d) or otherwise) 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 (i) is required under any other provision of
this Agreement to direct the Master Servicer to make a Servicing Advance or (ii)
is otherwise aware a reasonable period in advance that it is reasonably likely
that the Special Servicer will incur a cost or expense that will, when incurred,
constitute a Servicing Advance, the Special Servicer shall (in the case of
clause (i) preceding), and shall use reasonable efforts to (in the case of
clause (ii) preceding), request that the Master Servicer make such Servicing
Advance, such request to be made in writing and in a timely manner that does not
materially and adversely affect the interests of any Certificateholder and at
least five Business Days prior to the date on which failure to make such
Servicing Advance would (with notice from the Trustee regardless of whether such
notice is actually received) constitute an Event of Default pursuant to Section
7.01(a)(v); provided, however, that the Special Servicer shall have an
obligation to make any Emergency Advance or any other Servicing Advance with
respect to which it would, under the circumstances, be inconsistent with the
Servicing Standard for the Special Servicer to request that the Master Servicer
make such Servicing Advance (in lieu of making such Servicing Advance itself and
seeking reimbursement therefor as provided herein); and provided, further, that
the Special Servicer shall, with respect to Specially Serviced Mortgage Loans
and REO Properties, make any Servicing Advance that it fails to timely request
the Master Servicer to make. The Master Servicer shall have the obligation to
make any such Servicing Advance that it is requested by the Special Servicer to
make within
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five Business Days of the Master Servicer's receipt of such request. Subject to
the foregoing, the Special Servicer shall be relieved of any obligations with
respect to a Servicing Advance that it timely requests the Master Servicer to
make (regardless of whether or not the Master Servicer shall make such Servicing
Advance), other than an Emergency Advance or any other Servicing Advance with
respect to which it would, under the circumstances, be inconsistent with the
Servicing Standard for the Special Servicer to request that the Master Servicer
make such Servicing Advance (in lieu of making such Servicing Advance itself and
seeking reimbursement therefor as provided herein). 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) or any other provision of this Agreement to the contrary, 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 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 0.040% 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.
(f) Except under the same circumstances that it would be
permitted to waive a prepayment lockout provision in the subject Mortgage Loan
pursuant to Section 3.20(a), neither the Master Servicer nor the Special
Servicer shall consent to any Mortgagor's prepaying its Mortgage Loan, partially
or in its entirety, if the Mortgagor would be prohibited from doing so without
such consent.
(g) The Master Servicer shall not exercise any discretionary
right it has with respect to any Mortgage Loan pursuant to the related Mortgage
Note or Mortgage to apply any amounts maintained as an escrow or reserve to the
principal balance of such Mortgage Loan except in the case of a default
thereunder.
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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 and Additional 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 any
Certificateholder, subject, however, to each of the following limitations,
conditions and restrictions:
(i) other than as expressly provided in Section 3.02 (with
respect to Default Charges), Section 3.08 (with respect to due-on-sale
and due-on-encumbrance clauses) and Section 3.20(f) (with respect to
Additional Interest), 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
(or, in the case of a Hyper-Amortization Loan after its Anticipated
Repayment Date, the related Net Mortgage Rate in effect immediately
prior to such Anticipated Repayment Date)), than would liquidation;
(ii) the Special Servicer may not, in connection with any
particular extension, extend the maturity date of any Specially
Serviced Mortgage Loan beyond November 20, 2025;
(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
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or result in the imposition of any tax on "prohibited transactions" or
"contributions" after the Startup Day of either such REMIC under the
REMIC Provisions or (B) cause any Mortgage Loan to cease to be a
"qualified mortgage" within the meaning of Section 860G(a)(3) of the
Code (neither the Master Servicer nor the Special Servicer shall be
liable for decisions made under this subsection which were made in good
faith and, unless it would constitute bad faith or negligence to do so,
each of the Master Servicer and the Special Servicer may rely on
Opinions of Counsel in making such decisions);
(iv) neither the Master Servicer nor the Special Servicer
shall permit any Mortgagor to add or substitute any collateral for an
outstanding Mortgage Loan, which additional or substitute collateral
constitutes real property, unless the Special Servicer shall have first
determined in accordance with the Servicing Standard, based upon a
Phase I Environmental Assessment (and such additional environmental
testing as the Special Servicer 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 any collateral securing an outstanding Mortgage Loan
(including, without limitation, as part of a substitution of
collateral), except in connection with a payment in full or, subject to
the other provisions of this Section 3.20, a discounted payoff of such
Mortgage Loan, or except as provided in Section 3.09(d), or except
where the Rating Agencies have been notified in writing and (A) either
(1) 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,
or (2) 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, (B) 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 (C) if the
collateral that is being released has an Appraised Value in excess of
$3,000,000, Moody's has confirmed in writing that such release and/or
substitution would not result in the downgrade, qualification or
withdrawal of the rating then assigned by Moody's to any Class of
Certificates;
provided that (1) the limitations, conditions and restrictions set forth in
clauses (i) through (v) above shall not apply to any of the acts referenced in
this Section 3.20(a) in respect of any Mortgage Loan that is expressly provided
for, or that the related Mortgagor is permitted to effect
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without the mortgagee's consent, in any event under the terms of such Mortgage
Loan in effect on 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.
(b) The Special Servicer shall have no liability to the Trust,
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 has
complied with the Servicing Standard 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 or Stated 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 (except with
respect to any waiver pursuant to subsection (f) below), 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 the preceding
subsections of this Section 3.20 shall be in writing. Each of the Master
Servicer and the Special Servicer shall notify the other such party 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
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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).
(f) With respect to any Hyper-Amortization Loan after its
Anticipated Repayment Date, the Master Servicer shall be permitted, in its
discretion, to waive (such waiver to be in writing addressed to the related
Mortgagor, with a copy to the Trustee) all or any accrued Additional Interest
if, prior to the related maturity date, the related Mortgagor has requested the
right to prepay the Mortgage Loan in full together with all payments required by
the Mortgage Loan in connection with such prepayment except for all or a portion
of accrued Additional Interest, provided that the Master Servicer's
determination to waive the right to such accrued Additional Interest is
reasonably likely to produce a greater payment 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 in effect immediately prior to the related Anticipated Repayment
Date) than a refusal to waive the right to such Additional Interest. The Master
Servicer will have no liability to the Trust, the Certificateholders or any
other person so long as such determination is based on such criteria.
SECTION 3.21. Transfer of Servicing Between Master
Servicer and Special Servicer; Record
Keeping.
(a) Upon determining that a Servicing Transfer Event has
occurred with respect to any Mortgage Loan, the Master Servicer shall promptly
give notice thereof, and deliver the related Servicing File, to the Special
Servicer and shall use its best efforts to provide the Special Servicer with all
information, documents (or copies thereof) and records (including records stored
electronically on computer tapes, magnetic discs and the like) relating to the
Mortgage Loan and reasonably requested by the Special Servicer to enable it to
assume its functions hereunder with respect thereto without acting through a
Sub-Servicer. The Master Servicer shall use its best efforts to comply with the
preceding sentence within five Business Days of the occurrence of each related
Servicing Transfer Event.
Upon determining that a Specially Serviced Mortgage Loan has
become a Corrected Mortgage Loan, the Special Servicer shall promptly give
notice thereof, and return the related Servicing File, to the Master Servicer
and upon giving such notice, and returning such Servicing File, to the Master
Servicer, the Special Servicer's obligation to service such 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
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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.
SECTION 3.22. Sub-Servicing Agreements.
(a) The Master Servicer and, with the consent of the Sponsor,
the Special Servicer, may each 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
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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; (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; (v) in the case of a Sub-Servicing Agreement entered
into by the Master Servicer, provides that the related Sub-Servicer shall comply
with all reasonable requests for additional information made by the Master
Servicer and, further, provides that the failure of the related Sub- Servicer to
furnish the Master Servicer on timely basis with any required reports,
statements or other information, including without limitation, the reports
referred to in Section 3.12, either (A) shall permit the Master Servicer to make
necessary inquiries of the related Borrower directly or (B) shall (subject to a
cure period not to exceed 60 days) constitute an event of default thereunder for
which the Master Servicer may terminate such Sub-Servicer without payment of any
termination fee (it being understood that notwithstanding anything to the
contrary in this clause (v), the obligations of a Sub-Servicer in respect of the
second sentence of Section 3.12(b) hereof may be limited to the provision of
reports as agreed between the Master Servicer and such Sub- Servicer and
response to reasonable inquiries from the Master Servicer with respect thereto);
and (vi) in the case of a Sub-Servicing Agreement entered into by the Master
Servicer subsequent to the Closing Date, is approved by the Majority
Certificateholder of the Controlling Class and the Special Servicer (such
approval not to be unreasonably withheld); provided that, without in any way
limiting the obligations of the Master Servicer hereunder or its liability or
responsibility for the performance of such obligations, the requirements of
items (i) through (v) of this sentence shall not (for the first six months
following the Closing Date) apply with respect to any Sub- Servicing Agreement
to which the Master Servicer is a party in effect on the Closing Date and
covering one or more CREI Mortgage Loans (it being understood and agreed that
the Master Servicer shall cause each such Sub-Servicing Agreement then still in
effect to satisfy such requirements by the end of such six-month period).
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
other such party, 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
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thereof, entered into by it promptly upon its execution and delivery of such
documents; provided that the foregoing requirements set forth in this sentence
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. Furthermore, the Master Servicer shall not consent to
the amendment or modification of any Sub-Servicing Agreement to which it is a
party without having obtained the prior consent of the Special Servicer and the
Majority Certificateholder of the Controlling Class, which consent shall not be
unreasonably withheld; provided that no such consent of the Special Servicer or
the Majority Certificateholder of the Controlling Class shall be required with
respect to any amendment or modification of a Sub-Servicing Agreement in effect
on the Closing Date and covering one or more CREI Mortgage Loans, if and to the
extent that such modification or amendment is effected during the first 180 days
following the Closing Date in order to correct any inconsistency between such
Sub-Servicing Agreement and this Agreement.
(b) Each Sub-Servicer (i) shall be authorized to transact
business in the state or states in which the Mortgaged Properties for the
Mortgage Loans it is to service are situated, if and to the extent required by
applicable law, and (ii) shall be an approved conventional seller/servicer of
multifamily mortgage loans for Freddie Mac or Fannie Mae 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) 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. Promptly upon becoming aware of a default under any
Sub-Servicing Agreement to which it is a party, the Master Servicer or the
Special Servicer, as the case may be, shall notify the other such party, the
Trustee and the Certificateholders of the Controlling Class.
(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
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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 (the "Termination Strip") out of its related Master Servicing Fees for
each Mortgage Loan serviced by such Sub- Servicer at the time of such
Sub-Servicer's termination (such strip to be calculated in the same manner as
the related Master Servicing Fees, but at a per annum rate equal to the
applicable Primary Servicing Fee Rate minus 0.04%). 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
or any of the other parties to this Agreement) of the Person, who as successor
Master Servicer, terminates any Sub-Servicer without cause, and of its
successors and assigns in such capacity (to the extent contemplated by the
second preceding sentence), to pay Sub-Servicer Termination Compensation to such
terminated Sub-Servicer. 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.
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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 at the
expense of the Majority Certificateholder that made the designation) to the
effect that the designation of such Person to serve as Special Servicer is in
compliance with this Section 3.23, that upon the execution and delivery of the
written acceptance referred to in the immediately preceding clause (ii), the
designated Person shall be bound by the terms of this Agreement and that this
Agreement shall be enforceable against the designated Person in accordance with
its terms. The existing Special Servicer shall be deemed to have resigned
simultaneously with such designated Person's becoming the Special Servicer
hereunder; provided, however, that (i) the terminated Special Servicer shall
continue to be entitled to receive all amounts accrued or owing to it under this
Agreement on or prior to the effective date of such resignation, whether in
respect of Servicing Advances or otherwise, (ii) if it was terminated without
cause, it shall be entitled to a portion of certain Workout Fees thereafter
received on the Corrected Mortgage Loans (but only if and to the extent
permitted by Section 3.11(c)), and (iii) it and its directors, officers,
employees and agents shall continue to be entitled to the benefits of Section
6.03, notwithstanding any such resignation. Such terminated Special Servicer
shall cooperate with the Trustee and the replacement Special Servicer in
effecting the termination of its responsibilities and rights hereunder,
including, without limitation, the transfer within two Business Days to the
replacement Special Servicer for administration by it of all cash amounts that
shall at the time be or should have been credited by the terminated Special
Servicer to the REO Account or delivered to the Master Servicer or that are
thereafter received by the terminated Special Servicer with respect to Specially
Serviced Mortgage Loans and REO Properties.
SECTION 3.24. 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
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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.
SECTION 3.25. 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 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 and second to the Holders of the Class A-2
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 and the Holders of the Class A-2 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 and Class
A-2 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
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Expenses, if any, that were previously allocated to the Class B
Certificates and that remain unreimbursed immediately prior to such
Distribution Date;
(vii) to distributions of interest to the Holders of the Class
C Certificates, in an amount equal to all Distributable Certificate
Interest in respect of such Class of Certificates for such Distribution
Date and, to the extent not previously paid, for all prior Distribution
Dates;
(viii) if the Class Principal Balances of the Class A-1, Class
A-2 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 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 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
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Date) equal to the entire remaining Principal Distribution Amount for
such Distribution Date;
(xv) to distributions to the Holders of the Class E
Certificates, in an amount equal to, and in reimbursement of, all
Realized Losses and Additional Trust Fund Expenses, if any, that were
previously allocated to the Class E Certificates and that remain
unreimbursed immediately prior to such Distribution Date;
(xvi) to distributions of interest to the Holders of the Class
F Certificates, in an amount equal to all Distributable Certificate
Interest in respect of such Class of Certificates for such Distribution
Date and, to the extent not previously paid, for all prior Distribution
Dates;
(xvii) if the Class Principal Balances of the Class A-1, Class
A-2, Class 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 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
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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 B, Class C, Class D, Class E, Class F and Class G
Certificates have been reduced to zero, to distributions of principal
to the Holders of the Class H Certificates, in an amount (not to exceed
the Class Principal Balance of the Class H Certificates outstanding
immediately prior to such Distribution Date) equal to the entire
remaining Principal Distribution Amount for such Distribution Date;
(xxiv) to distributions to the Holders of the Class H
Certificates, in an amount equal to, and in reimbursement of, all
Realized Losses and Additional Trust Fund Expenses, if any, that were
previously allocated to the Class H Certificates and that remain
unreimbursed immediately prior to such Distribution Date;
(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 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 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;
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(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 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:
(i) first, to the Holders of the Class X Certificates and the
Holders of the respective Class or Classes of Sequential Pay
Certificates then entitled to distributions of principal on such
Distribution Date, up to an amount equal to the corresponding PV Yield
Loss Amount (as defined below) for each such Class of Certificates, pro
rata in accordance with their respective entitlements; and
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(ii) then, to the extent of any portion of such Prepayment
Premium remaining following the distributions described in the
preceding clause (i), to the Holders of the Class X Certificates.
The "PV Yield Loss Amount" for any Distribution Date shall
mean, with respect to any Class of REMIC II Regular Certificates as to which any
payment of principal is to be applied on such Distribution Date in reduction of
its Class Principal Balance or Class Notional Amount, as the case may be, an
amount equal to the product of the applicable Annuity Factor and the applicable
Lost Coupon Amount.
For purposes of computing the PV Yield Loss Amount for any
Class of REMIC II Regular Certificates for any Distribution Date, the following
definitions shall apply:
The "Annuity Factor" for any Class of REMIC II Regular
Certificates shall be equal to the following:
(1 ~ + ~ T) SUP { -n } } OVER T
where n equals either (i) one-twelfth of the number of months from such
Distribution Date to the Assumed Final Distribution Date for such Class, if the
Assumed Final Distribution Date for such Class is later than such Distribution
Date, or (ii) zero, if the Assumed Final Distribution Date for such Class
coincides with or is earlier than such Distribution Date, and T equals the
Reinvestment Yield.
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The "Assumed Final Distribution Date" for each Class of REMIC
II Regular Certificates is the Distribution Date in the month set forth below
with respect to such Class.
Month of Assumed Final
Class Distribution Date
----- -----------------
Class A-1 January, 2007
Class A-2 September, 2007
Class X November, 2012
Class B October, 2007
Class C October, 2007
Class D November, 2007
Class E November, 2007
Class F November, 2007
Class G November, 2007
Class H November, 2007
Class J November, 2007
Class K November, 2012
The "Lost Coupon Amount" shall mean: (a) with respect to any
Class of Sequential Pay Certificates as to which a payment of principal is to be
applied on such Distribution Date in reduction of its Class Principal Balance,
the product of (x) the amount, if any, by which the Pass- Through Rate for such
Class exceeds the applicable Reinvestment Yield and (y) the aggregate amount of
principal paid to such Class in reduction of its Class Principal Balance on such
Distribution Date; and (b) with respect to the Class X Certificates, the product
of (x) the Pass- Through Rate applicable to such Class for such Distribution
Date and (y) the aggregate amount of the reduction of its Class Notional Amount
on such Distribution Date.
The "Reinvestment Yield" for any Class of REMIC II Regular
Certificates and any Distribution Date shall be a rate determined by the
Trustee, in good faith, equal to the average yield for "This Week" as most
recently reported by the Federal Reserve Board in Federal Reserve Statistical
Release H.15 (519) for U.S. Treasury securities with a maturity coterminous with
the Assumed Final Distribution Date for such Class. If there is no U.S. Treasury
security listed with a maturity coterminous with the Assumed Final Distribution
Date for such Class, then the Reinvestment Yield shall be a rate determined by
the Trustee, in good faith, equal to the interpolated yield to maturity of U.S.
Treasury securities with maturities next longer and shorter than such remaining
term to maturity (such interpolated yield to be rounded to the nearest whole
multiple of 1/100 of 1% per annum, if the interpolated yield is not such a
multiple). In the event the yields of U.S. Treasury securities are no longer
published in Federal Reserve Statistical Release H.15(519), the Trustee shall
select a comparable publication to determine the Reinvestment Yield.
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(b) All distributions made with respect to each Class on each
Distribution Date shall be allocated pro rata among the outstanding Certificates
in such Class based on their respective Percentage Interests. Except as
otherwise provided below, all such distributions with respect to each Class on
each Distribution Date shall be made to the Certificateholders of the respective
Class of record at the close of business on the related Record Date and shall be
made by wire transfer of immediately available funds to the account of any such
Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder shall have provided the Trustee with written
wiring instructions no less than five Business Days prior to the related Record
Date (which wiring instructions may be in the form of a standing order
applicable to all subsequent Distribution Dates), or otherwise by check mailed
to the address of such Certificateholder as it appears in the Certificate
Register. The final distribution on each Certificate (determined without regard
to any possible future reimbursement of any Realized Loss or Additional Trust
Fund Expense previously allocated to such Certificate) will be made in like
manner, but only upon presentation and surrender of such Certificate at the
Corporate Trust Office or such other location specified in the notice to
Certificateholders of such final distribution. Any distribution that is to be
made with respect to a Certificate in reimbursement 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.
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(e) Except as otherwise provided in Section 9.01, whenever the
Trustee expects that the final distribution with respect to any Class of
Certificates (determined without regard to any possible future reimbursement of
any Realized Loss or Additional Trust Fund Expense previously allocated to such
Class of Certificates) will be made on the next Distribution Date, the Trustee
shall, as soon as practicable in the month in which such Distribution Date
occurs, mail to each Holder of such Class of Certificates as of the date of
mailing a notice to the effect that:
(i) the Trustee expects that the final distribution with
respect to such Class of Certificates will be made on such Distribution
Date but only upon presentation and surrender of such Certificates at
the Corporate Trust Office or such other location therein specified,
and
(ii) no interest shall accrue on such Certificates from and
after such Distribution Date.
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.
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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-10 of the Prospectus Supplement, as to the
distributions made on such Distribution Date setting forth:
(i) the amount of the distribution, if any, on such
Distribution Date to the Holders of each Class of REMIC II Regular
Certificates in reduction of the Class Principal Balance thereof;
(ii) the amount of the distribution, if any, on such
Distribution Date to the Holders of each Class of REMIC II Regular
Certificates allocable to Distributable 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;
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(ix) the Accrued Certificate Interest and Distributable
Certificate Interest in respect of each Class of REMIC II Regular
Certificates for such Distribution Date;
(x) the aggregate amount of Distributable Certificate Interest
payable in respect of each Class of REMIC II Regular Certificates on
such Distribution Date, including, without limitation, any
Distributable Certificate Interest remaining unpaid from prior
Distribution Dates;
(xi) any unpaid Distributable Certificate Interest in respect
of each Class of REMIC II Regular Certificates after giving effect to
the distributions made on such Distribution Date;
(xii) the Pass-Through Rate for each Class of REMIC II Regular
Certificates for such Distribution Date;
(xiii) the Principal Distribution Amount for such Distribution
Date, separately identifying the respective components of such amount;
(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 Default 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;
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(xx) any item of information disclosed to the Trustee by the
Master Servicer pursuant to Section 3.19(a) since the preceding
Distribution Date (or, in the case of the initial Distribution Date,
since the Closing Date); and
(xxi) such additional information, if any, as is contemplated
on pages B-1 through B-10 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 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
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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
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 Montgomery Securities, 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
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identified to the Trustee in accordance with Section 5.06(b), the Sponsor, the
Rating Agencies, Citibank, N.A., NationsBanc Montgomery Securities, 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;
(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;
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and the number and aggregate unpaid principal balance as of the close
of business on such Determination Date of Mortgage Loans in the
Mortgage Pool (X) as to which the related Mortgaged Property has become
REO Property during the Collection Period ending on such Determination
Date, (Y) as to which the related Mortgaged Property was REO Property
as of the end of such Collection Period and (Z) the terms of which have
been modified during such Collection Period pursuant to this Agreement;
(vi) the loan number and the unpaid principal balance as of
the close of business on such Determination Date of each Specially
Serviced Mortgage Loan and each other Defaulted Mortgage Loan;
(vii) with respect to any REO Property that was included in
the Trust Fund as of the close of business on such Determination Date,
the loan number of the related Mortgage Loan, the book value of such
REO Property and the amount of REO Revenues and other amounts, if any,
received on such REO Property during the related Collection Period and
the portion thereof included in the Available Distribution Amount for
the immediately succeeding Distribution Date;
(viii) with respect to any Mortgage Loan as to which the
related Mortgaged Property became an REO Property during the Collection
Period ending on such Determination Date, the loan number of such
Mortgage Loan and the Stated Principal Balance of such Mortgage Loan as
of the related Acquisition Date;
(ix) with respect to any Mortgage Loan or REO Property as to
which a Final Recovery Determination was made by the Master Servicer
during the Collection Period ending on such Determination Date, the
loan number of such Mortgage Loan or, in the case of an REO Property,
of the related Mortgage Loan, the amount of Liquidation Proceeds and/or
other amounts, if any, received thereon during such Collection Period
and the portion thereof included in the Available Distribution Amount
for the immediately succeeding Distribution Date, and any resulting
Realized Loss;
(x) the aggregate Stated Principal Balance of the Mortgage
Pool outstanding immediately before and immediately after such
Distribution Date;
(xi) the aggregate amount of Realized Losses on the Mortgage
Pool for the Collection Period ending on such Determination Date (and
the portions allocable to principal and interest);
(xii) the aggregate amount of the Additional Trust Fund
Expenses (broken down by type) withdrawn from the Certificate Account
during the Collection Period ending on such Determination Date;
(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
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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 pages
B-9 and B-10 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 Cut-Off Date) to
such Master Servicer Remittance Date, the aggregate of deposits into and
withdrawals from the Certificate Account for each category of deposit specified
in Section 3.04(a) and each category of withdrawal specified in Section 3.05(a).
The Master Servicer shall also deliver to the Trustee, upon reasonable request
of the Trustee, any and all additional information relating to the Mortgage
Loans (which information shall be based upon reports delivered to the Master
Servicer by the Special Servicer with respect to Specially Serviced Mortgage
Loans and REO Properties).
Within 130 days following the end of each calendar quarter,
commencing with the calendar quarter ended December 31, 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
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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.
To the extent the statements, reports and information (or
portions thereof) to be delivered by the Master Servicer under this Section
4.02(b) are derived from underlying information to be delivered to the Master
Servicer by the Special Servicer, the Master Servicer shall not be liable for
any failure to deliver such statement, report or information (or portion
thereof) on the prescribed dates, to the extent such failure is caused by the
Special Servicer's failure to deliver such underlying information in a timely
manner. Absent actual knowledge to the contrary, the Master Servicer may
conclusively rely on any such information forwarded to it by the Special
Servicer and shall have no obligation to verify the same.
(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. (816)
435-2327 (or such alternative number provided by the Master Servicer to the
Trustee in writing) and by telephone at telephone no. (816) 435-5000 (or such
alternative number provided by the Master Servicer to the Trustee in writing) as
soon as possible, but in any event before 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
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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
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. 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.
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(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 Default 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 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 and Class A-2 Certificates shall be reduced, pro rata in accordance
with the relative sizes of the then outstanding Class Principal Balances of such
Classes of Certificates, until 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.
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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 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
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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 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 Certificates, $10,000 and, with respect to the Class X Certificates,
$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
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hereof) as Certificate Registrar for the purpose of registering Certificates and
transfers and exchanges of Certificates as herein provided. For so long as the
Trustee acts as Certificate Registrar, its Corporate Trust Office shall
constitute the office of the 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. Upon request, the Trustee shall promptly inform, or cause the
Certificate Registrar to inform, the Master Servicer or the Special Servicer, as
applicable, of the identity of all Certificateholders of the Controlling Class.
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 Non-Registered
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
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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 F Certificate) is to be
made without registration under the Securities Act (other than in connection
with the initial issuance of the Certificates or a transfer of any interest in
such 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 or of the Sponsor, the
Mortgage Loan Seller, the Master Servicer, the Special Servicer, the Trustee,
the Fiscal Agent, the REMIC Administrator or the Certificate Registrar in their
respective capacities as such). None of the Sponsor, the Trustee or the
Certificate Registrar is obligated to register or qualify any Class of
Non-Registered Certificates under the Securities Act or any other securities law
or to take any action not otherwise required under this Agreement to permit the
transfer of any Non-Registered Certificate or interest therein without
registration or qualification. Any Holder or Certificate Owner of a
Non-Registered Certificate desiring to effect such a transfer shall, and does
hereby agree to, indemnify the Sponsor, the Trustee, the Fiscal Agent, the REMIC
Administrator and the Certificate Registrar against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.
(c) No transfer of any 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 any NonRegistered Certificate or
interest therein that is being acquired with "plan assets", the prospective
Transferee provides the Certificate Registrar (or, in the case of a
Non-Registered 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 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 (y) 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
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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, 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
NonRegistered 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 Prohibited Transaction Exemption ("PTE") 90-88 or PTE 93-31,
Sections I and III of PTCE 95-60 or Section 401(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 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 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
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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, 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
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which is not a Permitted Transferee. Such Opinion of
Counsel shall not be at the expense of the Trust, the
Trustee or the REMIC Administrator.
(e) Subject to the preceding subsections, upon surrender for
registration of transfer of any Certificate at the offices of the Certificate
Registrar maintained for such purpose, the Trustee shall execute and the
Certificate Registrar shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of authorized
denominations of the same Class of a like aggregate Percentage Interest.
(f) At the option of any Holder, its Certificates may be
exchanged for other Certificates of authorized denominations of the same Class
of a like aggregate Percentage Interest, upon surrender of the Certificates to
be exchanged at the offices of the Certificate Registrar maintained for such
purpose. Whenever any Certificates are so surrendered for exchange, the Trustee
shall execute and the Certificate Registrar shall authenticate and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive.
(g) Every Certificate presented or surrendered for transfer or
exchange shall (if so required by the Certificate Registrar) be duly endorsed
by, or be accompanied by a written instrument of transfer in the form
satisfactory to the Certificate Registrar duly executed by, the Holder thereof
or his attorney duly authorized in writing.
(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
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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.
SECTION 5.03. Book-Entry Certificates.
(a) The Registered Certificates and the Class F 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
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with respect to any Class of the Book-Entry Certificates, and (B) the Sponsor is
unable to locate a qualified successor, or (ii) the Sponsor at its option
advises the Trustee and the Certificate Registrar in writing that it elects to
terminate the book-entry system through the Depository with respect to any Class
of the Book-Entry Certificates, the Certificate Registrar shall notify all
affected Certificate Owners, through the Depository, of the occurrence of any
such event and of the availability of Definitive Certificates to such
Certificate Owners requesting the same. Upon surrender to the Certificate
Registrar of any Class of the Book-Entry Certificates by the Depository,
accompanied by registration instructions for registration of transfer, the
Trustee shall execute, and the Certificate Registrar shall authenticate and
deliver, the appropriate Definitive Certificates to the Certificate Owners
identified in such instructions. None of the Sponsor, the Mortgage Loan Seller,
the Master Servicer, the Special Servicer, the Trustee, the Fiscal Agent, the
REMIC Administrator or the Certificate Registrar shall be liable for any delay
in delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Certificates for purposes of evidencing ownership of any Class of Registered
Certificates, the registered holders of such Definitive Certificates shall be
recognized as Certificateholders hereunder and, accordingly, shall be entitled
directly to receive payments on, to exercise Voting Rights with respect to, and
to transfer and exchange such Definitive Certificates.
SECTION 5.04. Mutilated, Destroyed, Lost or Stolen
Certificates.
If (i) any mutilated Certificate is surrendered to the
Certificate Registrar, or the Certificate Registrar receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate, and (ii)
there is delivered to the Trustee and the Certificate Registrar such security or
indemnity as may reasonably be required by them to save each of them harmless,
then, in the absence of actual notice to the Trustee or the Certificate
Registrar that such Certificate has been acquired by a bona fide purchaser, the
Trustee shall execute and the Certificate Registrar shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of the same Class and like Percentage
Interest. Upon the issuance of any new Certificate under this Section, the
Trustee and the Certificate Registrar may 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
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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 Trustee, the Class and
Certificate Principal Balance or Certificate Notional Amount, as the case may
be, of the Book-Entry Certificate beneficially owned, the value of such Person's
interest in such Certificate and any intermediaries through which such Person's
Ownership Interest in such Book-Entry Certificate is held; provided, however,
that the Trustee shall not knowingly recognize such Person as a Certificate
Owner if such Person, to the knowledge of a Responsible Officer of the Trustee,
acquired its Ownership Interest in a Book-Entry Certificate in violation of
Section 5.02(b) and/or Section 5.02(c), or if such Person's certification that
it is a Certificate Owner is in direct conflict with information obtained by the
Trustee from the Depository, Depository Participants, and/or indirect
participating brokerage firms for which a Depository Participant acts as agent,
with respect to the identity of a Certificate Owner. The Trustee shall exercise
its reasonable discretion in making any determination under this Section 5.06(b)
and shall afford any Person providing information with respect to its beneficial
ownership of any Certificates an opportunity to resolve any discrepancies
between the information provided and any other information available to the
Trustee.
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ARTICLE VI
THE SPONSOR, THE MORTGAGE LOAN SELLER,
THE ADDITIONAL WARRANTING PARTY, THE MASTER SERVICER,
THE SPECIAL SERVICER AND THE REMIC ADMINISTRATOR
SECTION 6.01. Liability of the Sponsor, the Mortgage
Loan Seller, the Additional Warranting
Party, the Master Servicer, the Special
Servicer and the REMIC Administrator.
The Sponsor, the Mortgage Loan Seller, the Additional
Warranting Party, the Master Servicer, the Special Servicer and the REMIC
Administrator shall be liable in accordance herewith only to the extent of the
respective obligations specifically imposed upon and undertaken by the Sponsor,
the Mortgage Loan Seller, the Additional Warranting Party, the Master Servicer,
the Special Servicer and the REMIC Administrator herein.
SECTION 6.02. Merger, Consolidation or Conversion of
the Sponsor, the Mortgage Loan Seller,
the Additional Warranting Party, the
Master Servicer, the Special Servicer
or the REMIC Administrator.
Subject to the following paragraph, the Sponsor, the Mortgage
Loan Seller, the Additional Warranting Party, the Master Servicer, the Special
Servicer and the REMIC Administrator each will keep in full effect its
existence, rights and franchises as a corporation or other business organization
under the laws of the jurisdiction of its organization, and each will obtain and
preserve its qualification to do business as a foreign corporation or otherwise
in each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, the Certificates or
any of the Mortgage Loans and to perform its respective duties under this
Agreement.
The Sponsor, the Mortgage Loan Seller, the Additional
Warranting Party, the Master Servicer, the Special Servicer and the REMIC
Administrator each may be merged or consolidated with or into any Person, or
transfer all or substantially all of its assets (which, as to the Master
Servicer and the Special Servicer, may be limited to all or substantially all of
its assets relating to the business of mortgage loan servicing) to any Person,
in which case any Person resulting from any merger or consolidation to which the
Sponsor, the Mortgage Loan Seller, the Additional Warranting Party, the Master
Servicer, the Special Servicer or the REMIC Administrator shall be a party, or
any Person succeeding to the business of the Sponsor, the Mortgage Loan Seller,
the Additional Warranting Party, the Master Servicer, the Special Servicer or
the REMIC Administrator, shall be the successor of the Sponsor, the Mortgage
Loan Seller, the Additional Warranting Party, the Master Servicer, the Special
Servicer or the REMIC Administrator, as the case may be, hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided,
however, that no successor or surviving Person shall succeed to the
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rights of the Master Servicer, the Special Servicer, the Mortgage Loan Seller or
the Additional Warranting Party unless such succession will not result in any
withdrawal, downgrade or qualification of the rating then assigned by either
Rating Agency to any Class of Certificates (as confirmed in writing).
SECTION 6.03. Limitation on Liability of the Sponsor,
the Master Servicer, the Special Servicer,
the REMIC Administrator and Others.
None of the Sponsor, the Master Servicer (or its general
partner), the Special Servicer (or its general partner) , the REMIC
Administrator or any director, officer, employee or agent of any of the
foregoing shall be under any liability to the Trust 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 (or its general partner), the Special Servicer
(or its general partner), 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 (and its general
partner), the Special Servicer (and its general partner), 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 (and its general partner), the
Special Servicer (and its general partner), the REMIC Administrator and any
director, officer, employee or agent of any of the foregoing shall be
indemnified and held harmless by the Trust 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, 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) incidental
to the performance of obligations and duties hereunder, including, without
limitation, in the case of the Master Servicer or the Special Servicer, the
prosecution of an enforcement action in respect of any specific Mortgage Loan or
Mortgage Loans (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement); or (iii) 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
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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, and the Sponsor, the Master
Servicer, the Special Servicer and the REMIC Administrator each shall be
entitled to the direct payment of such expenses or to be reimbursed therefor
from the Certificate Account as provided in Section 3.05(a).
SECTION 6.04. Master Servicer, Special Servicer and
REMIC Administrator Not to Resign.
None of the Master Servicer, the Special Servicer or the REMIC
Administrator shall be permitted to resign from the obligations and duties
hereby imposed on it, except (i) upon the appointment of, and the acceptance of
such appointment by, a successor thereto which is reasonably acceptable to the
Trustee and the receipt by the Trustee of written confirmation from each 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, be addressed and delivered to the Trustee and the Rating
Agencies and be paid for by the resigning party. 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.
All costs and expenses of the Trustee and the Trust (including, without
limitation, any costs or expenses of any party hereto reimbursable out of the
Trust Fund) in connection with any such resignation (including, without
limitation, any requisite transfer of servicing) shall be paid for, as incurred,
by the resigning party.
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.
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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
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 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 by the Trustee as provided in Section 3.11(e); or
(v) any failure by the Special Servicer to timely make (or
timely direct the Master Servicer to make) any Servicing Advance
required to be made by it or the Master servicer at its direction
pursuant to this Agreement, which failure continues unremedied for a
period of one Business Day following the date on which notice has been
given to the Special Servicer by the Trustee as provided in Section
3.11(e); or
(vi) 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
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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
(vii) 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 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
(viii) 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
(ix) 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
(x) 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
(xi) 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
(xii) the Trustee shall have received written notice from
either Rating Agency that the continuation of the Master Servicer or
the Special Servicer in such capacity would
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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 (xii) 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 (xii)) will constitute an Event of Default in each such capacity.
(b) If any Event of Default with respect to the Master
Servicer or the Special Servicer (in either case, for purposes of this Section
7.01(b), the "Defaulting Party") shall occur and be continuing, then, and in
each and every such case, so long as the Event of Default shall not have been
remedied, the Sponsor or the Trustee may, and at the written direction of the
Holders of Certificates entitled to at least 51% of the Voting Rights or if the
relevant Event of Default is the one described in clause (xii) 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,
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employees and agents shall continue to be entitled to the benefits of Section
6.03 notwithstanding any such termination). All costs and expenses of the
Trustee and the Trust (including, without limitation, any costs and expenses of
any party hereto reimbursable out of the Trust Fund) in connection with the
termination of the Master Servicer or Special Servicer, as applicable, under
this Section 7.01(b) (including, without limitation, the requisite transfer of
servicing) shall be paid for, as incurred, by the Defaulting Party.
(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 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,
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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 assigned by either Rating Agency to any Class
of Certificates (as evidenced by written confirmation thereof from each Rating
Agency). No appointment of a successor to the Master Servicer, the Special
Servicer or the REMIC Administrator hereunder shall be effective until the
assumption of the successor to such party of all its responsibilities, duties
and liabilities hereunder. Pending appointment of a successor to the Master
Servicer, the Special Servicer or the REMIC Administrator hereunder, the Trustee
shall act in such capacity as hereinabove provided. In connection with any such
appointment and assumption described herein, the Trustee may make such
arrangements for the compensation of such successor out of payments on or in
respect of the Mortgage Loans or otherwise as it and such successor shall agree;
provided, however, that no such compensation shall be in excess of that
permitted the resigning or terminated party hereunder. The Sponsor, the Trustee,
such successor and each other party hereto shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
Any costs and expenses associated with the transfer of the foregoing functions
under this Agreement (other than the set-up costs of the successor) shall be
borne by the predecessor Master Servicer, Special Servicer or REMIC
Administrator, as applicable, and, if not paid by such predecessor Master
Servicer, Special Servicer or REMIC Administrator within thirty days of its
receipt of an invoice therefor, shall be an expense of the Trust; provided that
such predecessor Master Servicer, Special Servicer or REMIC Administrator shall
reimburse the Trust for any such expense so incurred by the Trust; 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.
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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.
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
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or omission to exercise any right or remedy shall impair any such right or
remedy or shall be deemed to be a waiver of any Event of Default.
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ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of
Default hereunder and after the curing or waiver of all such Events of Default
and defaults which may have occurred, undertakes to perform such duties and only
such duties as are specifically set forth in this Agreement; provided that it is
herein acknowledged and agreed that the Trustee is at all times acting in a
fiduciary capacity with respect to the Certificateholders. If an Event of
Default hereunder occurs and is continuing, the Trustee shall exercise such of
the rights and powers vested in it by this Agreement and applicable law, and use
the same degree of care and skill in their exercise as a prudent man or the
Trustee would exercise or use under the circumstances in the conduct of his or
its own affairs (whichever standard would be higher). Any permissive right of
the Trustee contained in this Agreement shall not be construed as a duty.
(b) The Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Trustee which are specifically required to be
furnished pursuant to any provision of this Agreement (other than the Mortgage
Files, the review of which is specifically governed by the terms of Article II),
shall examine them to determine whether they conform in form to the requirements
of this Agreement. If any such instrument is found not to so conform to the
requirements of this Agreement in a material manner, the Trustee shall take such
action as it deems appropriate to have the instrument corrected. The Trustee
shall not be responsible for, but may assume and rely upon, the accuracy and
content of any resolution, certificate, statement, opinion, report, document,
order or other instrument furnished by the Sponsor, the Master Servicer, the
Special Servicer or the REMIC Administrator and accepted by the Trustee in good
faith, pursuant to this Agreement.
(c) No provision of this Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided, however, that:
(i) The duties and obligations of the Trustee shall be
determined solely by the express provisions of this Agreement, the
Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement
against the Trustee and, in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee and conforming to
the requirements of this Agreement;
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(ii) The Trustee shall not be personally liable for an error
of judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(iii) The Trustee shall not be personally liable with respect
to any action taken, suffered or omitted to be taken by it in good
faith in accordance with the direction of Holders of Certificates
entitled to at least 25% (or, as to any particular matter, any higher
percentage as may be specifically provided for hereunder) of the Voting
Rights relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee, under this Agreement.
SECTION 8.02. Certain Matters Affecting the Trustee
and the Fiscal Agent.
Except as otherwise provided in Section 8.01:
(i) The Trustee may rely upon and shall be protected in acting
or refraining from acting upon any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document reasonably believed by it to
be genuine and to have been signed or presented by the proper party or
parties;
(ii) The Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken or
suffered or omitted by it hereunder in good faith and in accordance
therewith;
(iii) The Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Agreement or to make any
investigation of matters arising hereunder or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request,
order or direction of any of the Certificateholders, pursuant to the
provisions of this Agreement, unless such Certificateholders shall have
offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or
thereby; the Trustee shall not be required to expend or risk its own
funds or otherwise incur any financial liability in the performance of
any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it; nothing contained herein
shall, however, relieve the Trustee of the obligation, upon the
occurrence of an Event of Default hereunder which has not been cured,
to exercise such of the rights and powers vested in it by this
Agreement and to use 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;
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(iv) The Trustee shall not be personally liable for any action
reasonably taken, suffered or omitted by it in good faith and believed
by it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(v) Prior to the occurrence of an Event of Default hereunder,
and after the curing of all such Events of Default which may have
occurred, the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing to do so
by Holders of Certificates entitled to at least 25% of the Voting
Rights; provided, however, that if the payment within a reasonable time
to the Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the opinion
of the Trustee, not reasonably assured to the Trustee by the security
afforded to it by the terms of this Agreement, the Trustee may require
reasonable indemnity against such expense or liability as a condition
to taking any such action;
(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys-in-fact, provided that the use of any such
agent or attorney-in-fact shall not relieve the Trustee from any of its
obligations hereunder, and the Trustee shall remain responsible for all
acts and omissions of any such agent or attorney-in-fact;
(vii) For all purposes under this Agreement, the Trustee shall
not be deemed to have notice of any Event of Default hereunder unless a
Responsible Officer of the Trustee has actual knowledge thereof or
unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office, and such notice
references the Certificates or this Agreement; and
(viii) Neither the Trustee nor the Fiscal Agent shall be
responsible for any act or omission of the Master Servicer, the Special
Servicer or the REMIC Administrator (unless the Trustee is acting as
Master Servicer, Special Servicer or REMIC Administrator, as the case
may be) or for any act or omission of the Sponsor or the Mortgage Loan
Seller.
SECTION 8.03. Trustee Not Liable for Validity or
Sufficiency of Certificates or Mortgage
Loans.
The recitals contained herein and in the Certificates (other
than the representations and warranties of, and the other statements attributed
to, the Trustee and/or the Fiscal Agent in Article II and the certificate of
authentication executed by the Trustee as Certificate Registrar set forth on
each outstanding Certificate) shall be taken as the statements of the Sponsor,
the Mortgage Loan Seller, the Master Servicer, the Special Servicer or the REMIC
Administrator, as the case may be, and the Trustee and the Fiscal Agent assume
no responsibility for their correctness. Neither the Trustee nor the Fiscal
Agent make any representations as to the validity or sufficiency of this
Agreement (other than as specifically set forth in Sections 2.08 and 2.09)
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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, or
any funds deposited in or withdrawn from the Certificate Account or any other
account by or on behalf of the Sponsor, the Master Servicer, the Special
Servicer or the REMIC Administrator. Neither the Trustee nor the Fiscal Agent
shall be responsible for the accuracy or content of any resolution, certificate,
statement, opinion, report, document, order or other instrument furnished by the
Sponsor, the Master Servicer, the Special Servicer or the REMIC Administrator
and accepted by the Trustee or the Fiscal Agent, as the case may be, in good
faith, pursuant to this Agreement.
SECTION 8.04. Trustee and Fiscal Agent May Own
Certificates.
Each of the Trustee, 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, except as otherwise provided in the
definition of Certificateholder, 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 (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,
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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 Fitch (or, in the case of each Rating
Agency, such lower ratings as would not, as confirmed in writing by such Rating
Agency, result 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.
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(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Sponsor or the Master Servicer, or if at any
time the Trustee shall become incapable of acting, or shall be adjudged bankrupt
or insolvent, or a receiver of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Sponsor may remove the Trustee and appoint a successor
trustee acceptable to the Master Servicer by written instrument, in duplicate,
which instrument shall be delivered to the Trustee so removed and to the
successor trustee. A copy of such instrument shall be delivered to the Mortgage
Loan Seller, the Additional Warranting Party, the Master Servicer, the Special
Servicer, the REMIC Administrator and the Certificateholders by the Sponsor.
(c) The Holders of Certificates entitled to at least 33 1/3%
of the Voting Rights may at any time remove the Trustee and appoint a successor
trustee by written instrument or instruments, in triplicate, signed by such
Holders or their attorneys-in-fact duly authorized, one complete set of which
instruments shall be delivered to the Master Servicer, one complete set to the
Trustee so removed and one complete set to the successor so appointed; provided
that the Master Servicer, the Sponsor and the remaining Certificateholders shall
have been notified; and provided further that other Holders of the Certificates
entitled to a greater percentage of the Voting Rights shall not have objected to
such removal in writing to the Master Servicer and the Sponsor within 30 days of
their receipt of notice thereof. A copy of such instrument shall be delivered to
the Sponsor, the Mortgage Loan Seller, the Additional Warranting Party, the
Special Servicer, the REMIC Administrator and the remaining Certificateholders
by the Master Servicer.
(d) Any resignation or removal of the Trustee and appointment
of a successor trustee pursuant to any of the provisions of this Section 8.07
shall not become effective until acceptance of appointment by the successor
trustee as provided in Section 8.08; and no such resignation or removal of the
Trustee and/or appointment of a successor trustee shall be permitted, unless, as
confirmed in writing by each Rating Agency, such resignation or removal and
appointment would not result in the qualification, downgrading or withdrawal of
the rating assigned by either Rating Agency to any Class of Certificates.
SECTION 8.08. Successor Trustee.
(a) Any successor trustee appointed as provided in Section
8.07 shall execute, acknowledge and deliver to the Sponsor, the Mortgage Loan
Seller, the Additional Warranting Party, the Master Servicer, the Special
Servicer, the REMIC Administrator and to its predecessor trustee an instrument
accepting such appointment hereunder, and thereupon the resignation or removal
of the predecessor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
the like effect as if originally named as trustee herein. The predecessor
trustee shall deliver to the successor trustee all Mortgage Files and related
documents and statements held by it hereunder (other than any Mortgage Files and
related documents and statements at the time held on its behalf by a Custodian,
which Custodian shall
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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.
(b) No successor trustee shall accept appointment as provided
in this Section 8.08 unless at the time of such acceptance such successor
trustee shall be eligible under the provisions of Section 8.06.
(c) Upon acceptance of appointment by a successor trustee as
provided in this Section 8.08, the Master Servicer shall mail notice of the
succession of such trustee hereunder to the Sponsor and the Certificateholders.
If the Master Servicer fails to mail such notice within 10 days after acceptance
of appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Master Servicer.
SECTION 8.09. Merger or Consolidation of Trustee or
Fiscal Agent.
Any entity into which the Trustee or the Fiscal Agent may be
merged or converted or with which it may be consolidated or any entity resulting
from any merger, conversion or consolidation to which the Trustee or the Fiscal
Agent shall be a party, or any entity succeeding to the corporate trust business
of the Trustee or to the business of the Fiscal Agent, shall be the successor of
the Trustee or the Fiscal Agent, as the case may be, hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided that
the Trustee shall continue to be 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
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so, or in case an Event of Default in respect of the Master Servicer shall have
occurred and be continuing, the Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 8.06
hereunder and no notice to Holders of Certificates of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 8.08
hereof.
(b) In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Master Servicer, the Special Servicer or the REMIC
Administrator hereunder), the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust Fund or any portion
thereof in any such jurisdiction) shall be exercised and performed by such
separate trustee or co-trustee at the direction of the Trustee.
(c) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee.
(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
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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, that is within its control which may be required by
this Agreement or by applicable law. Such access shall be afforded without
charge but only upon reasonable prior written request and during normal business
hours at the offices of the Trustee designated by it.
(b) Promptly following the first sale of any Non-Registered
Certificate to an Independent third party, the Sponsor shall provide to the
Trustee 10 copies of any private placement memorandum or other disclosure
document used by the Sponsor or its Affiliate in connection with the offer and
sale of the Class of Certificates to which such Non-Registered Certificate
belongs. In addition, if any such private placement memorandum or disclosure
document is revised, amended or supplemented at any time following the delivery
thereof to the Trustee, the Sponsor promptly shall inform the Trustee of such
event and shall deliver to the Trustee 10 copies of the private placement
memorandum or disclosure document, as revised, 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, together
with any related additional written
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or electronic information, prepared or obtained by, or on behalf of, 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, together with any related additional written or electronic
information, 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 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 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
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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,
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 specifically provided herein to be filed on behalf of
the Trust 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; and provided,
further, that any such items that are required to be delivered by the Master
Servicer or the Special Servicer to the Trustee shall be so delivered in the
format required for electronic filing via the EDGAR system (in addition to any
other required format). 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
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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 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
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Loan Seller) elects to purchase all of the Mortgage Loans and each REO Property
remaining in REMIC I in accordance with the preceding sentence, the Master
Servicer or such Majority Certificateholder, as applicable, shall deposit in the
Distribution Account not later than the Master Servicer Remittance Date relating
to the Distribution Date on which the final distribution on the Certificates is
to occur, an amount in immediately available funds equal to the above-described
purchase price (exclusive of any portion thereof payable to any Person other
than the Certificateholders pursuant to Section 3.05(a), which portion shall be
deposited in the Certificate Account). In addition, the Master Servicer shall
transfer all amounts required to be transferred to the Distribution Account on
such Master Servicer Remittance Date from the Certificate Account pursuant to
the first paragraph of Section 3.04(b). Upon confirmation that such final
deposits have been made, the Trustee shall release or cause to be released to
the purchaser or its designee, the Mortgage Files for the remaining Mortgage
Loans and shall execute all assignments, endorsements and other instruments
furnished to it by the purchaser, as shall be necessary to effectuate transfer
of the Mortgage Loans and REO Properties remaining in REMIC I.
Notice of any termination shall be given promptly by the
Trustee by letter to Certificateholders and, if not previously notified pursuant
to the preceding paragraph, to the other parties hereto mailed (a) in the event
such notice is given in connection with a purchase by the Master Servicer or any
Majority Certificateholder of the Controlling Class (other than the Sponsor or
the Mortgage Loan Seller) of all of the Mortgage Loans and each REO Property
remaining in REMIC I, not earlier than the 15th day and not later than the 25th
day of the month next preceding the month of the final distribution on the
Certificates or (b) otherwise during the month of such final distribution on or
before the 5th day of such month, in each case specifying (i) the Distribution
Date upon which the Trust 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
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Trustee, directly or through an agent, shall take such reasonable steps to
contact the remaining non-tendering Certificateholders concerning the surrender
of their Certificates as it shall deem appropriate. The costs and expenses of
holding such funds in trust and of contacting such Certificateholders following
the first anniversary of the delivery of such second notice to the non-
tendering Certificateholders shall be paid out of such funds. No interest shall
accrue or be payable to any former Holder on any amount held in trust hereunder.
If by the second anniversary of the delivery of such second notice, all of the
Certificates shall not have been surrendered for cancellation, the Class R-I
Certificateholders shall be entitled to all unclaimed funds and other assets
which remain subject thereto.
SECTION 9.02. Additional Termination Requirements.
(a) In the event the Master Servicer or a Majority
Certificateholder of the Controlling Class (other than the Sponsor or the
Mortgage Loan Seller) purchases all of the Mortgage Loans and each REO Property
remaining in REMIC I as provided in Section 9.01, the Trust (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
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 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 in relation to any tax matter or controversy, represent the Trust
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, and the REMIC Administrator shall
be entitled to be reimbursed therefor out of any amounts on deposit in the
Distribution Account as provided by Section 3.05(b).
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(e) The REMIC Administrator shall prepare and file, and the
Trustee shall sign, all of the Tax Returns in respect of each of REMIC I and
REMIC II. The expenses of preparing and filing such returns shall be borne by
the REMIC Administrator without any right of reimbursement therefor.
(f) The REMIC Administrator shall perform on behalf of each of
REMIC I and REMIC II all reporting and other tax compliance duties that are the
responsibility of each such REMIC under the Code, the REMIC Provisions or other
compliance guidance issued by the IRS or any other taxing authority under
Applicable State Law. Included among such duties, the REMIC Administrator shall
provide to: (i) any Transferor of a Residual Certificate, such information as is
necessary for the application of any tax relating to the transfer of a Residual
Certificate to any Person who is not both a Permitted Transferee and a United
States Person; (ii) the Certificateholders, such information or reports as are
required by the Code or the REMIC Provisions, including, without limitation,
reports relating to interest, original issue discount and market discount or
premium (using the Prepayment Assumption as required); and (iii) the IRS, the
name, title, address and telephone number of the Person who will serve as the
representative of each of REMIC I and REMIC II.
(g) The REMIC Administrator shall perform its duties more
specifically set forth hereunder in a manner consistent with maintaining the
status of each of REMIC I and REMIC II as a REMIC under the REMIC Provisions
(and each of the other parties hereto shall assist it, to the extent reasonably
requested by it). The REMIC Administrator shall not knowingly take (or cause
either REMIC I or REMIC II to take) any action or fail to take (or fail to cause
to be taken) any action within the scope of its duties more specifically set
forth hereunder that, under the REMIC Provisions, if taken or not taken, as the
case may be, could result in an Adverse REMIC Event with respect to either such
REMIC, unless the REMIC Administrator has received an Opinion of Counsel or an
IRS private letter ruling to the effect that the contemplated action will not
result in an Adverse REMIC Event. None of the other parties hereto shall take
any action (whether or not authorized hereunder) as to which the REMIC
Administrator has advised it in writing that it has received an Opinion of
Counsel or an IRS private letter ruling to the effect that an Adverse REMIC
Event could occur with respect to such action. In addition, prior to taking any
action with respect to REMIC I or REMIC II, or causing REMIC I or REMIC II to
take any action, that is not expressly permitted under the terms of this
Agreement, each of the other parties hereto will consult with the REMIC
Administrator, in writing, with respect to whether such action could cause an
Adverse REMIC Event to occur. None of the parties hereto shall take any such
action or cause REMIC I or REMIC II to take any such action as to which the
REMIC Administrator has advised it in writing that an Adverse REMIC Event could
occur. The REMIC Administrator may consult with counsel or seek an IRS private
letter ruling to make such written advice, and the cost of same shall be borne:
(i) if such action that is not expressly permitted by this Agreement would be of
a material benefit to or otherwise in the best interests of the
Certificateholders as a whole, by the Trust 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
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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
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 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. Any such amounts payable by the Trust
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
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foreclosure, (C) the bankruptcy of REMIC I or REMIC II, or (D) the termination
of the Trust pursuant to Article IX of this Agreement); (ii) the sale or
disposition of any investments in the Certificate Account or the REO Account for
gain; or (iii) the acquisition of any assets for the Trust Fund (other than a
Mortgaged Property acquired through foreclosure, deed-in-lieu of foreclosure or
otherwise in respect of a defaulted Mortgage Loan and other than Permitted
Investments acquired in connection with the investment of funds in the
Certificate Account or the REO Account); in any event unless it has received an
Opinion of Counsel (from and at the expense of the party seeking to cause such
sale, disposition, or acquisition) to the effect that such sale, disposition, or
acquisition will not cause: (x) REMIC I or REMIC II to fail to qualify as a
REMIC at any time that any Certificates are outstanding; or (y) the imposition
of any tax on REMIC I or REMIC II under the REMIC Provisions or other applicable
provisions of federal, state and local law or ordinances.
(l) Except as otherwise permitted by Section 3.17(a), none of
the REMIC Administrator, the Master Servicer, the Special Servicer or the
Trustee shall enter into any arrangement by which REMIC I or REMIC II will
receive a fee or other compensation for services or, to the extent it is within
the control of such Person, permit REMIC I or REMIC II to receive any income
from assets other than "qualified mortgages" as defined in Section 860G(a)(3) of
the Code or "permitted investments" as defined in Section 860G(a)(5) of the
Code. At all times as may be required by the Code, the REMIC Administrator shall
make reasonable efforts to ensure that substantially all of the assets of REMIC
I and REMIC II will consist of "qualified mortgages" as defined in Section
860G(a)(3) of the Code and "permitted investments" as defined in Section
860G(a)(5) of the Code.
SECTION 10.02. Sponsor, Master Servicer, Special
Servicer, Trustee and Fiscal Agent to
Cooperate with REMIC Administrator.
(a) The Sponsor shall provide or cause to be provided to the
REMIC Administrator, within ten (10) days after the Closing Date, all
information or data that the REMIC Administrator reasonably determines to be
relevant for tax purposes as to the valuations and issue prices of the
Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flow of the Certificates.
(b) The Master Servicer, the Special Servicer, the Trustee and
the Fiscal Agent shall each furnish such reports, certifications and
information, and access to such books and records maintained thereby, as may
relate to the Certificates or the Trust Fund and as shall be reasonably
requested by the REMIC Administrator in order to enable it to perform its duties
hereunder.
SECTION 10.03. Fees of the REMIC Administrator.
In the event the Trustee and the REMIC Administrator are not
the same Person, the Trustee covenants and agrees to pay to the REMIC
Administrator from time to time, and the REMIC Administrator shall be entitled
to, reasonable compensation (as set forth in a written
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agreement between the Trustee and the REMIC Administrator) for all services
rendered by it in the exercise and performance of any of the obligations and
duties of the REMIC Administrator hereunder.
SECTION 10.04. Use of Agents.
The REMIC Administrator may execute any of its obligations and
duties hereunder either directly or by or through agents or attorneys-in-fact
consented to by the Trustee, which consent shall not be unreasonably withheld;
provided that the REMIC Administrator shall not be relieved of its liabilities,
duties and obligations hereunder by reason of the use of any such agent or
attorney-in-fact.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment.
(a) This Agreement may be amended from time to time by the
mutual agreement of the parties hereto, without the consent of any of the
Certificateholders, (i) to cure any ambiguity, (ii) to correct, modify or
supplement any provision herein which may be defective or may be 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 either Rating Agency (as evidenced by written confirmation to
such effect from each Rating Agency obtained by or delivered to the Trustee).
(b) This Agreement may also be amended from time to time by
the mutual agreement of the parties hereto, with the consent of the Holders of
Certificates entitled to at least 51% of the Voting Rights allocated to the
affected Classes, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Holders of Certificates; provided, however, that no
such amendment shall (i) reduce in any manner the amount of, or delay the timing
of, payments received or advanced on the Mortgage Loans and any REO Properties
which are required to be distributed on any Certificate without the 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
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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 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 on direction by the
Trustee, but only upon direction accompanied by an Opinion of Counsel (the
reasonable cost of which may be paid out of the Distribution Account) to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders.
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(b) For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
SECTION 11.03. Limitation on Rights of
Certificateholders.
(a) The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust, 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, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
(b) No Certificateholder shall have any right to vote (except
as expressly provided for herein) or in any manner otherwise control the
operation and management of the Trust Fund, or the obligations of the parties
hereto, nor shall anything herein set forth, or contained in the terms of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third party by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement or any Mortgage
Loan, unless, with respect to any suit, action or proceeding upon or under or
with respect to this Agreement, such Holder previously shall have given to the
Trustee a written notice of default hereunder, and of the continuance thereof,
as hereinbefore provided, and (except in the case of a default by the Trustee)
the Holders of Certificates entitled to at least 25% of the Voting Rights shall
have made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatsoever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, which priority or
preference is not otherwise provided for herein, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and enforcement
of the provisions of this Section 11.03(c), each and every Certificateholder and
the Trustee shall be entitled to such relief as can be given either at law or in
equity.
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SECTION 11.04. Governing Law.
This Agreement and the Certificates shall be construed in
accordance with the internal laws of the State of New York applicable to
agreements made and to be performed in said State, and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
SECTION 11.05. Notices.
Any communications provided for or permitted hereunder shall
be in writing and, unless otherwise expressly provided herein, shall be deemed
to have been duly given when delivered to: (1) in the case of the Sponsor,
Mortgage Capital Funding, Inc., 399 Park Avenue, 3rd Floor, New York, New York
10043, Attention: Mortgage Finance, telecopy number: (212) 793-5602 (with copies
to Stephen E. Dietz, Esq., Associate General Counsel, Citibank, N.A., 425 Park
Avenue, New York, New York 10043, telecopy number: (212) 793-4401); (2) in the
case of the Mortgage Loan Seller, Citicorp Real Estate, Inc., 399 Park Avenue,
New York, New York 10043 Attention: Richard L. Jarocki, Jr., telecopy number:
(212) 793-5602; (3) in the case of the Additional Warranting Party, NationsBanc
Mortgage Capital Corporation, NationsBank Corporate Center, NC1-007-07-01, 100
North Tryon Street, Charlotte, North Carolina 28255, Attention: David Gertner,
telecopy number: (704) 388-9408; (4) in the case of the Master Servicer, Midland
Loan Services, L.P., 210 West 10th Street, 6th Floor, Kansas City, Missouri,
64105, Attention: Alan L. Atterbury, telecopy number (816) 435-2326; (5) in the
case of 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); (6) in the case of the Trustee, LaSalle National Bank, 135 South
LaSalle Street, Suite 1740, Chicago, Illinois 60603, Attention: ABS Group - MCFI
- - Series 1997-MC2, telecopy number: 312-904-2084; (7) in the case of the REMIC
Administrator, LaSalle National Bank, 135 South LaSalle Street, Chicago,
Illinois 60603, Attention: ABS Group - MCFI - Series 1997-MC2, telecopy number:
312-904-4105; (8) in the case of the Fiscal Agent, to the Trustee on behalf of
the Fiscal Agent; and (9) 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; and (B)
Fitch Investors Service, L.P., One State Street Plaza, New York, New York 10004,
Attention: Commercial Mortgage Surveillance, telecopy number: (212) 635-0295; or
as to each such Person such other address as may hereafter be furnished by such
Person to the parties hereto in writing. Any communication required or permitted
to be delivered to a Certificateholder shall be deemed to have been duly given
when mailed first class, postage prepaid, to the address of such Holder as shown
in the Certificate Register.
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SECTION 11.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 11.07. Successors and Assigns; Beneficiaries.
The provisions of this Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the parties
hereto, and all such provisions shall inure to the benefit of the
Certificateholders. Except as specifically contemplated by Sections 3.22, 3.24,
6.03 and 8.05, no other person, including, without limitation, any Mortgagor,
shall be entitled to any benefit or equitable right, remedy or claim under this
Agreement.
SECTION 11.08. Article and Section Headings.
The article and section headings herein are for convenience of
reference only, and shall not limit or otherwise affect the meaning hereof.
SECTION 11.09. Notices to the Rating Agencies.
(a) The Trustee shall promptly provide notice to each Rating
Agency with respect to each of the following of which it has actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Event of Default hereunder that
has not been cured;
(iii) the resignation or termination of the Master Servicer,
the Special Servicer or the REMIC Administrator and the appointment of
a successor;
(iv) any change in the location of the Distribution
Account;
(v) the final payment to any Class of Certificateholders;
and
(vi) the repurchase of any Mortgage Loan by the Mortgage Loan
Seller or the Additional Warranting Party, as applicable, pursuant to
Section 2.03.
(b) The Master Servicer shall promptly provide notice to each
Rating Agency with respect to each of the following of which it has actual
knowledge:
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(i) the resignation or removal of the Trustee and the
appointment of a successor;
(ii) any change in the location of the Certificate
Account;
(iii) any event that would result in the voluntary or
involuntary termination of any insurance of the accounts of the
Trustee;
(iv) any material casualty at or condemnation or eminent
domain proceeding in respect of a Mortgaged Property; and
(v) the vacating by an anchor tenant of a retail Mortgaged
Property.
(c) Each of the Master Servicer and the Special Servicer, as
the case may be, shall furnish to each Rating Agency such information with
respect to the Mortgage Loans as the Rating Agency shall reasonably request and
which the Master Servicer or the Special Servicer, as the case may be, can
reasonably provide.
(d) Each of the Master Servicer and the Special Servicer shall
promptly furnish to each Rating Agency copies of the following:
(i) each of its annual statements as to compliance
described in Section 3.13; and
(ii) each of its annual independent public accountants'
servicing reports described in Section 3.14, if any.
In addition, upon request, each of the Master Servicer and the Special Servicer
shall promptly furnish to each Rating Agency copies or summaries (in such format
as will be acceptable to the Rating Agency) of any of the written reports
(including, without limitation, reports regarding property inspections)
prepared, and any of the quarterly and annual operating statements, rent rolls
and financial statements collected, by it pursuant to Section 3.12(b).
(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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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:__________________________________
Name:/s/ Richard L. Jarocki, JR
Title:President
CITICORP REAL ESTATE, INC.,
Mortgage Loan Seller
By:__________________________________
Name:/s/ Anne Galbraith
Title:Authorized Signatory
NATIONSBANC MORTGAGE CAPITAL CORPORATION,
Additional Warranting Party
By:__________________________________
Name:/s/ David Gertner
Title:Vice President
MIDLAND LOAN SERVICES, L.P.
Master Servicer
By: Midland Data Systems, Inc.
its sole general partner
By:__________________________________
Name:/s/ Leon E. Bergman
Title:Executive Vice President
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<PAGE>
CRIIMI MAE SERVICES LIMITED PARTNERSHIP,
Special Servicer
By: CRIIMI MAE Management, Inc.
its general partner
By:__________________________________
Name:/s/ David B. Iannaron
Title:Vice President/General Counsel
LASALLE NATIONAL BANK,
Trustee and REMIC Administrator
By:__________________________________
Name:/s/ Susan Franklin
Title:Vice President
ABN AMRO BANK N.V.,
Fiscal Agent
By:__________________________________
Name:/s/ Robert C. Smolka
Title:Group Vice President
By:__________________________________
Name:/s/ Kenneth M. Gonski
Title:Vice President
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<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 24th day of November, 1997, before me, a notary
public in and for said State, personally appeared Richard Jarocki, Jr. known to
me to be a 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/ RONALD M. RUDOLPH
_________________________________
Notary Public
[Notarial Seal]
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<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 24th day of November, 1997, before me, a notary public
in and for said State, personally appeared Anne Galbrath known to me to be a
Aughorized 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/ RONALD M. RUDOLPH
________________________________
Notary Public
[Notarial Seal]
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<PAGE>
STATE OF MISSOURI )
) ss.:
COUNTY OF JACKSON )
On the 24th day of November, 1997, before me, a notary
public in and for said State, personally appeared Leon E. Bergman known to
me to be a Exec. V.P. of MIDLAND DATA SYSTEMS, INC., the sole general partner of
MIDLAND LOAN SERVICES, L.P., 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/ Patti K. Wagner
________________________________
Notary Public
[Notarial Seal]
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<PAGE>
STATE OF Maryland )
) ss.:
COUNTY OF Montgomery )
On the 24th day of November, 1997, before me, a notary
public in and for said State, personally appeared David B. Iannarone known to
me to be a 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/ Julia Briggs White
________________________________
Notary Public
[Notarial Seal]
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<PAGE>
STATE OF North Carolina )
) ss.:
COUNTY OF Mecklenburg )
On the 20th day of November, 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 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/ Linda M. Hunter
__________________________________
Notary Public
[Notarial Seal]
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<PAGE>
STATE OF Illinois )
) ss.:
COUNTY OF Cook )
On the 25th day of November, 1997, before me, a notary public in and for
said State, personally appeared Susan Franklin known to me to be a Vice
President 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/ Carissa Jean Pogue
_________________________________
Notary Public
[Notarial Seal]
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<PAGE>
STATE OF ILLINOIS )
) ss.:
COUNTY OF COOK )
On the 20th day of November, 1997, before me, Jeanette Karfis, a notary
public in and for said State, personally appeared Robert C. Smolka, Group Vice
President, and Kenneth M. Gonski, Vice President, resptctively, 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/ Jeanette Karfis
____________________________________
Notary Public
[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-MC2
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 $____________
Agreement: November 1, 1997
Class Notional Amount all the Class X
Cut-off Date: November 1, 1997 Certificates as of the Issue Date:
$ 870,490,231
Issue Date: November __, 1997
Aggregate unpaid principal balance of the
First Distribution Date: Mortgage Pool as of the Cut-off Date, after
December 22, 1997 deducting payments of principal due on or
before such date (the "Initial Pool
Master Servicer: Balance"): $870,577,289
Midland Loan Services, L.P.
Trustee and REMIC Administrator:
Special Servicer: LaSalle National Bank
CRIIMI MAE Services Limited
Partnership Fiscal Agent:
ABN AMRO Bank N.V.
Mortgage Loan Seller:
Citicorp Real Estate, Inc. Additional Warranting Party:
NationsBanc Mortgage
Certificate No. X-___ Capital Corporation
CUSIP No. _____________
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., MIDLAND LOAN SERVICES, L.P., 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
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 NOVEMBER ___, 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%
(EXCEPT THAT HYPER-AMORTIZATION LOANS (AS DEFINED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN) ARE ASSUMED TO BE REPAID IN THEIR ENTIRETY ON
THEIR RESPECTIVE ANTICIPATED REPAYMENT DATES (ALSO AS DEFINED IN SUCH POOLING
AND SERVICING AGREEMENT)) (THE FOREGOING, 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.]
A-1-1
<PAGE>
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 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 pursuant to the
Agreement on the applicable Distribution Date in respect of the Class of
Certificates to which this Certificate belongs. 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
A-1-2
<PAGE>
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 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.
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
A-1-3
<PAGE>
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 herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain circumstances, including any amendment necessary to maintain the status
of REMIC I or REMIC II as a REMIC, without the consent of the Holders of any of
the Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York that are applicable to agreements
negotiated, 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-1-4
<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-1-5
<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,_______________________________, as its agent.
A-1-6
<PAGE>
EXHIBIT A-2
FORM OF CLASS [A-1][A-2] CERTIFICATE
CLASS [A-1][A-2] MULTIFAMILY/COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1997-MC2
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: November 1, 1997 [A-1] [A-2] Certificates as of the Issue
Date:
Cut-off Date: November 1, 1997 $_______________
Aggregate unpaid principal balance of the
Issue Date: November ___, 1997 Mortgage Pool as of the Cut-off Date,
after deducting payments of principal due
First Distribution Date: on or before such date (the "Initial Pool
December 22, 1997 Balance"): $870,577,289
Master Servicer: Trustee and REMIC Administrator:
Midland Loan Services, L.P. LaSalle National Bank
Special Servicer: Fiscal Agent:
CRIIMI MAE Services Limited ABN AMRO Bank N.V.
Partnership
Additional Warranting Party:
Mortgage Loan Seller: NationsBanc Mortgage
Citicorp Real Estate, Inc. Capital Corporation
Certificate No.[A-1][A-2]-__ 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., MIDLAND LOAN SERVICES, L.P., 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 Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
A-2-2
<PAGE>
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 pursuant to the
Agreement on the applicable Distribution Date in respect of the Class of
Certificates to which this Certificate belongs. 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 allocated to this Certificate, which reimbursement is to
occur after the date on which this Certificate is surrendered as contemplated by
the preceding sentence, will be made by check mailed to the address of the
Holder that surrenders this Certificate as such address last appeared in the
Certificate Register or to any such other address of which the Trustee is
subsequently notified in writing.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Principal Balance hereof is binding on such Holder
and all future Holders of this Certificate and any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such distribution is made upon this Certificate.
The 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
A-2-3
<PAGE>
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.
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.
A-2-4
<PAGE>
The Agreement permits, with certain exceptions therein
provided, the amendment thereof, and the modification of the rights and
obligations of the Sponsor, the Mortgage Loan Seller, the Additional Warranting
Party, the Master Servicer, the Special Servicer, the Trustee, the Fiscal Agent,
and the REMIC Administrator thereunder and the rights of the Certificateholders
thereunder, at any time by the Sponsor, the Mortgage Loan Seller, the Additional
Warranting Party, the Master Servicer, the Special Servicer, the Trustee, the
Fiscal Agent, and the REMIC Administrator with the consent of the Holders of
Certificates entitled to at least 51% of the Voting Rights allocated to the
affected Classes. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain circumstances, including any amendment necessary to maintain the status
of REMIC I or REMIC II as a REMIC, without the consent of the Holders of any of
the Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York that are applicable to agreements
negotiated, 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] 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-MC2
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: November 1, 1997 [B][C][D][E] Certificates as of the Issue
Date:
$_________________
Cut-off Date: November 1, 1997 Aggregate unpaid principal balance of
the Mortgage Pool as of the Cut-off
Issue Date: November ___, 1997 Date, after deducting payments of
principal due on or before such date (the
First Distribution Date: "Initial Pool Balance"): $870,577,289
December 22, 1997
Master Servicer: Trustee and REMIC Administrator:
Midland Loan Services, L.P. LaSalle National Bank
Special Servicer: Fiscal Agent:
CRIIMI MAE Services Limited ABN AMRO Bank N.V.
Partnership
Additional Warranting Party:
Mortgage Loan Seller: NationsBanc Mortgage
Citicorp Real Estate, Inc. 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., MIDLAND LOAN SERVICES, L.P., 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 BY 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 AN EXCISE 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 "REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G
AND 860D OF THE CODE. [THE FOLLOWING INFORMATION IS PROVIDED
A-3-2
<PAGE>
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 NOVEMBER __, 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% (EXCEPT THAT HYPER- AMORTIZATION LOANS (AS
DEFINED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN) ARE ASSUMED
TO BE REPAID IN THEIR ENTIRETY ON THEIR RESPECTIVE ANTICIPATED REPAYMENT DATES
(ALSO AS DEFINED IN SUCH POOLING AND SERVICING AGREEMENT)) (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 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 pursuant to the
Agreement on the applicable Distribution Date in respect
A-3-3
<PAGE>
of the Class of Certificates to which this Certificate belongs. 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 allocated to this
Certificate, which reimbursement is to occur after the date on which this
Certificate is surrendered as contemplated by the preceding sentence, will be
made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Principal Balance hereof is binding on such Holder
and all future Holders of this Certificate and any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such distribution is made upon this Certificate.
The 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
A-3-4
<PAGE>
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 to cover any tax or other
governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.
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.
A-3-5
<PAGE>
The Agreement permits, with certain exceptions therein
provided, the amendment thereof, and the modification of the rights and
obligations of the Sponsor, the Mortgage Loan Seller, the Additional Warranting
Party, the Master Servicer, the Special Servicer, the Trustee, the Fiscal Agent
and the REMIC Administrator thereunder and the rights of the Certificateholders
thereunder, at any time by the Sponsor, the Mortgage Loan Seller, the Additional
Warranting Party, the Master Servicer, the Special Servicer, the Trustee, the
Fiscal Agent and the REMIC Administrator with the consent of the Holders of
Certificates entitled to at least 51% of the Voting Rights allocated to the
affected Classes. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain circumstances, including any amendment necessary to maintain the status
of REMIC I or REMIC II as a REMIC, without the consent of the Holders of any of
the Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York that are applicable to agreements
negotiated, 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.
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<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-MC2
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: November 1, 1997 [F][G][H][J][K] Certificates as of the
Issue Date:
$____________
Cut-off Date: November 1, 1997 Aggregate unpaid principal balance of
the Mortgage Pool as of the Cut-off
Issue Date: November ___, 1997 Date, after deducting payments of
Principal due on or before such date (the
First Distribution Date: "Initial Pool Balance"): $870,577,289
December 22, 1997
Master Servicer: Trustee and REMIC Administrator:
Midland Loan Services, L.P. LaSalle National Bank
Special Servicer: Fiscal Agent:
CRIIMI MAE Services Limited ABN AMRO Bank N.V.
Partnership
Additional Warranting Party:
Mortgage Loan Seller: NationsBanc Mortgage
Citicorp Real Estate, Inc. Capital Corporation
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.]
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., MIDLAND LOAN SERVICES, L.P., 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.
A-4-2
<PAGE>
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE. [THE
FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE U.S.
FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS CERTIFICATE.
THE ISSUE DATE OF THIS CERTIFICATE IS NOVEMBER __, 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%
(EXCEPT THAT HYPER- AMORTIZATION LOANS (AS DEFINED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN) ARE ASSUMED TO BE REPAID IN THEIR ENTIRETY ON
THEIR RESPECTIVE ANTICIPATED REPAYMENT DATES (ALSO AS DEFINED IN SUCH POOLING
AND SERVICING AGREEMENT)) (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 [Class F only: Cede & Co.] [Classes 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
A-4-3
<PAGE>
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed pursuant to the Agreement
on the applicable Distribution Date in respect of the Class of Certificates to
which this Certificate belongs. 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 allocated to this Certificate, which reimbursement is to
occur after the date on which this Certificate is surrendered as contemplated by
the preceding sentence, will be made by check mailed to the address of the
Holder that surrenders this Certificate as such address last appeared in the
Certificate Register or to any such other address of which the Trustee is
subsequently notified in writing.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Principal Balance hereof is binding on such Holder
and all future Holders of this Certificate and any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such distribution is made upon this Certificate.
The 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
A-4-4
<PAGE>
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 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. 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 or 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" within
A-4-5
<PAGE>
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 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, 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 the Agreement. 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.
[For Class F only: 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
A-4-6
<PAGE>
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 herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain circumstances, including any amendment necessary to maintain the status
of REMIC I or REMIC II as a REMIC, without the consent of the Holders of any of
the Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York that are applicable to agreements
negotiated, 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,_________________________, 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-MC2
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: November 1, 1997 Certificate in the related Class: _____%
Cut-off Date: November 1, 1997 Aggregate unpaid principal balance of the
Mortgage Pool as of the Cut-off Date, after
Issue Date: November ___, 1997 deducting payments of principal due on or
before such date (the "Initial Pool
First Distribution Date: Balance"): $870,577,289
December 22, 1997
Master Servicer: Trustee and REMIC Administrator:
Midland Loan Services, L.P. LaSalle National Bank
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., MIDLAND LOAN SERVICES, L.P., 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.
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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., 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,
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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 pursuant to the
Agreement on the applicable Distribution Date in respect of the Class of
Certificates to which this Certificate belongs. 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 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
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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
Admini strator 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 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" 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
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 the
Agreement.
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
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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 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 (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.
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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 international organization, or any agency or
instrumentality of any of the foregoing, (iii) any organization (other than
certain farmers' cooperatives described in Section 521 of the Code) which is
exempt from the tax imposed by Chapter 1 of the Code (unless such organization
is subject to the tax imposed by Section 511 of the Code on unrelated business
taxable income), (iv) rural electric and telephone cooperatives described in
Section 1381 of the Code and (v) any other Person so designated by the 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, or an
estate whose income from sources without the United States is includable in
gross income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States, or
a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have the authority to control all substantial decisions of the trust,
all within the meaning of Section 7701(a)(30) of the Code.
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 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
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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 herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain circumstances, including any amendment necessary to maintain the status
of REMIC I or REMIC II as a REMIC, without the consent of the Holders of any of
the Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York that are applicable to agreements
negotiated, 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.
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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
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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.
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EXHIBIT B-1
FORM I OF TRANSFEROR CERTIFICATE
PURSUANT TO SECTION 5.02(b)
_____________, 19__
LaSalle National Bank
135 South LaSalle Street
Chicago, Illinois 60603
Attention: Asset-Backed Securities Trust Services-MCFI 1997-MC2
Re: Mortgage Capital Funding, Inc.,
Multifamily/Commercial Mortgage Pass-Through
Certificates, Series 1997-MC2, Class _______,
[having an initial aggregate Certificate Principal
Balance as of November ___, 1997 (the "Closing Date")
of $__________] [representing a ____% percentage
interest in the related Class]
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 November 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, Midland Loan
Services, L.P., as Master Servicer, CRIIMI MAE Services Limited Partnership, as
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 NonRegistered 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 NonRegistered 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 Non-Registered
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, 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
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Securities Act of 1933, as amended (the "Securities Act"), 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.
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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.
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,
___________________________________
(Transferor)
By:________________________________
Name:___________________________
Title:__________________________
B-1-3
<PAGE>
EXHIBIT B-2
FORM II OF TRANSFEROR CERTIFICATE
PURSUANT TO SECTION 5.02(b)
_____________, 19__
LaSalle National Bank
135 South LaSalle Street
Chicago, Illinois 60603
Attention: Asset-Backed Securities Trust Services-MCFI 1997-MC2
Re: Mortgage Capital Funding, Inc.,
Multifamily/Commercial Mortgage Pass-Through
Certificates, Series 1997-MC2, Class__, [having an
initial aggregate Certificate Principal Balance as of
November ___, 1997 (the "Closing Date") of
$__________] [representing a ___% percentage
interest in the related Class]
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 November 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, Midland Loan
Services, L.P., as Master Servicer, CRIIMI MAE Services Limited Partnership, as
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 NonRegistered 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 NonRegistered 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 Non-Registered
Certificate or any other similar security by means of general
advertising or in any other manner, or (e) taken any other action
B-2-1
<PAGE>
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"), 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
Chicago, Illinois 60603
Attention: Asset-Backed Securities Trust Services-MCFI 1997-MC2
Re: Mortgage Capital Funding, Inc.,
Multifamily/Commercial Mortgage Pass-Through
Certificates, Series 1997-MC2, Class ______, [having
an initial aggregate Certificate Principal Balance as
of November ___, 1997 (the "Closing Date") of
$__________] [representing a ____% percentage
interest in the related Class]
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 November 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, Midland Loan
Services, L.P., as Master Servicer, CRIIMI MAE Services Limited Partnership, as
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 Transferred
Certificates 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
supervision
- -----------------
(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>
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
has
B-3-4
<PAGE>
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
Yes No Certificatesonly 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.
___ ___
Yes No Will the Transferee be purchasing 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-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
Chicago, Illinois 60603
Attention: Asset-Backed Securities Trust Services-MCFI 1997-MC2
Re: Mortgage Capital Funding, Inc.,
Multifamily/Commercial Mortgage Pass-Through
Certificates, Series 1997-MC2, Class ________,
[having an initial aggregate Certificate Principal
Balance as of November ___, 1997 (the "Closing Date")
of $__________] [representing a ____% percentage
interest in the related Class]
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 November 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, Midland Loan
Services, L.P., as Master Servicer, CRIIMI MAE Services Limited Partnership, as
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
B-4-1
<PAGE>
(ii) sold or transferred in a transaction which is exempt from such registration
and qualification and the Certificate Registrar has received (A) a certificate
from the prospective transferor substantially in the form attached as Exhibit
B-1 to the Pooling and Servicing Agreement, or (B) a certificate from the
prospective transferor substantially in the form attached as Exhibit B-2 to the
Pooling and Servicing Agreement and a certificate from the prospective
transferee substantially in the form attached either as Exhibit B-3 or Exhibit
B-4 to the Pooling and Servicing Agreement, or (C) an Opinion of Counsel
satisfactory to the Certificate Registrar that the transfer may be made without
registration under the Securities Act, together with the written
certification(s) as to the facts surrounding the transfer from the prospective
transferor and/or prospective transferee upon which such Opinion of Counsel is
based.
3. The Transferee understands that it may not sell or otherwise
transfer the 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.
7. If the Transferee proposes that the Transferred Certificates 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-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-MC2, Class __,
[having an initial aggregate Certificate
Principal Balance as of November ___, 1997
(the "Closing Date") of $__________]
[representing a ___% percentage interest in
the related Class]
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 Company ("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 November 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, Midland Loan
Services, L.P., as Master Servicer, CRIIMI MAE Services Limited Partnership, as
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 Act and
B-5-4
<PAGE>
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-5-5
<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-5-6
<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
$______________________(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
supervision over any such institutions or is a foreign savings
and loan association or equivalent
____________________________
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-5-7
<PAGE>
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
has been published, in which case the securities were valued at market. Further,
in determining such
B-5-8
<PAGE>
aggregate amount, the Transferee may have included securities owned by
subsidiaries of the Transferee, but only if such subsidiaries are consolidated
with the Transferee in its financial statements prepared in accordance with
generally accepted accounting principles and if the investments of such
subsidiaries are managed under the Transferee's direction. However, such
securities were not included if the Transferee is a majority-owned, consolidated
subsidiary of another enterprise and the Transferee is not itself a reporting
company under the Securities Exchange Act of 1934, as amended.
5. The Transferee acknowledges that it is familiar with Rule 144A and
understands that the Transferor and other parties related to the Transferred
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Transferee may be in reliance on Rule 144A.
___ ___ Will the Transferee be purchasing the Transferred
Yes No Certificatesonly 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-5-9
<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).
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)
B-5-10
<PAGE>
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 the Transferred
Yes No Certificates only for the Transferee's own account?
6. If the answer to the foregoing question is "no", then in each case
where the Transferee is purchasing for an account other than its own, such
account belongs to a third party that is itself a "qualified institutional
buyer" within the meaning of Rule 144A, and the "qualified institutional buyer"
status of such third party has been established by the Transferee through one or
more of the appropriate methods contemplated by Rule 144A.
7. The undersigned will notify the parties to which this certification
is made of any changes in the information and conclusions herein. Until such
notice, the Transferee's purchase of the Transferred Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
_____________________________________________
Print Name of Transferee or Adviser
By:__________________________________________
Name:________________________________________
Title:_______________________________________
IF AN ADVISER:
_____________________________________________
Print Name of Transferee
Date:________________________________________
B-5-11
<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-MC2, Class __,
[having an initial aggregate Certificate
Principal Balance as of November ___, 1997
(the "Closing Date") of $__________]
[representing a ___% percentage interest in
the related Class]
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 Company ("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 November 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, Midland Loan
Services, L.P., as Master Servicer, CRIIMI MAE Services Limited Partnership, as
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
qualification and the
B-6-1
<PAGE>
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 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
B-6-2
<PAGE>
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-MC2, evidencing a ____% Percentage Interest in the Class to which it
belongs (the "Residual Certificate")), a_______________ duly organized and
validly existing under the laws of [the State of ____] [the United States], on
behalf of which he/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 "non-United States person".
(For this purpose: (i) a "disqualified organization" means the United States or
a possession thereof, 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); and (ii) 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, or an estate whose income from sources without the United
States is includable in gross income for United States federal income tax
purposes regardless of its connection with the conduct of a trade or business
within the United States, or a trust if a court within the United States is able
to exercise primary supervision over the administration of the trust and one or
more United States persons have the authority to control all substantial
decisions of the trust, all within the meaning of Section 7701(a)(30) of the
Code.)
C-1-1
<PAGE>
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 "disqualified
organization", 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 not a "disqualified organization"
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 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 "disqualified organization" 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.
C-1-2
<PAGE>
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-1-3
<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
135 South LaSalle Street
Chicago, Illinois 60603
Attention: Asset Backed Securities Trust Services - MCFI 1997-MC2
Re: Mortgage Capital Funding, Inc., Multifamily/Commercial
Mortgage Pass-Through Certificates, Series 1997-MC2, Class
R-[I] [II], evidencing a __% percentage interest in the Class
to which it belongs
Dear Sirs:
This letter is delivered to you in connection with the
transfer by _____________ (the "Transferor") to ____________________ (the
"Transferee") of the captioned Class R-[I] [II] Certificate (the "Residual
Certificate"), pursuant to Section 5.02 of the Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement"), dated as of November 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, Midland Loan Services, L.P., as Master Servicer, CRIIMI MAE
Services Limited Partnership, 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 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
C-2-1
<PAGE>
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
135 South LaSalle Street
Chicago, Illinois 60603
Attention: Asset Backed Securities Trust Services - MCFI 1997-MC2
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 November 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, Midland Loan Services, L.P., as Master Servicer,
CRIIMI MAE Services Limited Partnership, 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
CitiMae, Inc. Commercial Seller-Servicer Contracts
Seller Servicer Original Contract Date
- --------------- ----------------------
CB Commercial Real Estate Group, Inc. October 12, 1994
Collateral Mortgage, Ltd. April 29, 1994
Financial Federal Savings Bank April 27, 1994
GMAC Mortgage Corporation of PA December 16, 1993
Huntington Capital Corp. January 27, 1994
Keycorp Real Estate Capital Markets, Inc. March 26, 1996
Legg Mason Mortgage Capital Corporation October 31, 1996
Mellon Mortgage Company November 16, 1995
Mitchell Mortgage Company, LLC August 30, 1997
PNC Bank, National Association June 28, 1996
NationsBanc Mortgage Capital Corporation Sub-Servicing Agreements
Seller Servicer Agreement Date
- --------------- --------------
First Security Bank, N.A. November 25, 1997
L.J. Melody & Company November 25, 1997
Midland Loan Services, L.P. November 25, 1997
The Patrician Financial Company November 25, 1997
Washington Mortgage Financial Group November 25, 1997
Berkshire Mortgage Finance Corporation November 25, 1997
S-II-1
<PAGE>
SCHEDULE III
Schedule of Modified Mortgage Loans
<TABLE>
<CAPTION>
Control Loan
Number Number Property Name Modifications Status
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
<S> <C> <C> <C> <C>
C122 655442-0 25th & Butler Shopping Center Extension of Environmental/Deferred Mortgage modified and executed.
Maintenance Completion Date
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
C049 655444-6 Hunter's Creek Apartments Extension of Deferred Maintenance Mortgage modified and executed.
Completion Date
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
C189 655447-5 Montgomery Pointe Plaza Change basis to 30/360 Note modified and executed.
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
C077 655451-4 Perry Hill Estates Change basis to 30/360 and Extension of Note & Mortgage modified and
Environmental/Deferred Maintenance executed.
Completion Date
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
C102 655452-7 Timberlake Plaza Shopping Center Change basis to 30/360 and Extension of Note & Mortgage modified and
Environmental/Deferred Maintenance executed.
Completion Date
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
C144 655454-3 Eastgate Commerce Center Extension of Deferred Maintenance Mortgage modified and executed.
Completion date Change basis to 30/360
and Extension of
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
C050 655456-9 DeVille Court Apartments Environmental/Deferred Maintenance Note & Mortgage modified and
Completion Date executed.
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
C091 655458-5 Willow Lake Shopping Center Correct Note so that written P&I payment Note modified and executed.
matches numerical P&I payment
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
C058 655462-4 Holly Hill Estates Correct Mortgage to reflect minimum draw Mortgage modified and executed.
from capex reserves of $1000.00
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
C182 655464-0 Wanalda Warehouse Change basis to 30/360 and Extension of Note & Mortgage modified and
Environmental/Deferred Maintenance executed.
Completion Date
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
C169 655374-8 English Inn Prepayment penalty description corrected Note modified and executed.
on Note
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
C160 655374-8 The Commons Office Building Prepayment penalty description corrected Note modified and executed.
on Note
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
C141 655380-3 Crown Plaza Office Building TI reserve language cut off and monthly Mortgage modified and executed.
capital improvement reserve corrected on
Mortgage
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
C153 655341-8 31 Inwood Road Maturity date on Mortgage corrected to Mortgage modified and executed.
match maturity date on Note.
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
C082 655353-1 University Square Shopping Center First payment date and maturity date Note modified and executed.
corrected on Note
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
C183 655355-7 541 Warehouse TI monthly reserve corrected on Mortgage Mortgage modified and executed.
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
C140 655326-9 Westcliff Office building 9 Monthly payment amount for option Note modified and executed.
tranche corrected on Note
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
C161 655389-0 Fisherman's Wharf Ramada Plaza Assumability language changed on Mortgage modified and executed.
Mortgage to allow 3 assumptions with
lender's approval
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
C146 655379-3 Jamacha Center I Lockout end date corrected on Note Note modified and executed.
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
C111 655393-9 Cheyenne Crossing Shopping Center Corrected accrual basis on Note Note modified and executed.
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
C016 655467-9 Hampton Meadows Correct Mortgage to reflect minimum draw Substitute Note executed.
from capex reserves of $1000.00
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
C036 655471-8 Bellevue Garden Apartments Referral to Anticipated Repayment Date Amendment to Mortgage document
changed to reflect correct maturity date executed.
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
N087 50273 Jumbo Sports #30 Revise Mortgage to eliminate cross Mortgage modified and executed.
collateralization with Loans outside the
Mortgage pool
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
N088 50285 Jumbo Sports #36 Revise Mortgage to eliminate cross Mortgage modified and executed.
collateralization with Loans outside the
Mortgage Pool
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
N089 50274 Jumbo Sports #14 Revise Mortgage to eliminate cross Mortgage modified and executed.
collateralization with Loans outside the
Mortgage Pool
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
</TABLE>
S-III-1
<PAGE>
<TABLE>
<CAPTION>
Control Loan
Number Number Property Name Modifications Status
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
<S> <C> <C> <C> <C>
N003 50003 Springs Pointe Apartments Revise Mortgage to eliminate cross Mortgage modified and executed.
collateralization with Loans outside the
Mortgage Pool
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
N006 50004 Westwood Pointe Apartments Revise Mortgage to eliminate cross Mortgage modified and executed.
collateralization with Loans outside the
Mortgage Pool
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
N019 50010 Debaliviere Place IV Revise Mortgage to eliminate cross Mortgage modified and executed.
collateralization with Loans outside the
Mortgage Pool
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
N055 50011 Caroline Apartments Revise Mortgage to eliminate cross Mortgage modified and executed.
collateralization with Loans outside the
Mortgage Pool
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
C010 655342-1 Lakeland Apartments Monthly Capital Improvement Reserve Mortgage modified and executed.
corrected on Mortgage
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
C011 655342-1 Lake Terrace Apartments Monthly Capital Improvement Reserve Mortgage modified and executed.
corrected on Mortgage
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
C012 655342-1 Maryland Park Apartments Monthly Capital Improvement Reserve Mortgage modified and executed.
corrected on Mortgage
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
C013 655342-1 Riverland Apartments Monthly Capital Improvement Reserve Mortgage modified and executed.
corrected on Mortgage
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
C014 655342-1 River Terrace Apartments Monthly Capital Improvement Reserve Mortgage modified and executed.
corrected on Mortgage
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
C015 655342-1 Lake Park Apartments Monthly Capital Improvement Reserve Mortgage modified and executed.
corrected on Mortgage
- ------ -------- -------------------------------- ---------------------------------------- -------------------------------
</TABLE>
S-II-2
<PAGE>
SCHEDULE IV
Schedule of Mortgage Loans Permitting
Releases of Material Portions of Mortgaged
Properties Prior to Payment in Full
<TABLE>
<CAPTION>
Control Loan
Number Number Property Name Release Description
- ------ ------ ------------- -------------------
<S> <C> <C> <C>
C154 655327-2 Westcliff Office - building 3 Minimum 1.30 DSCR
C157 655329-8 Westcliff Office - building 5 Minimum 1.30 DSCR
C158 655330-8 Westcliff Office - building 6 Minimum 1.30 DSCR
C159 655328-5 Westcliff Office - building 4 Minimum 1.30 DSCR
C133 655331-1 Westcliff Office - building 12 Minimum 1.30 DSCR
C140 655326-9 Westcliff Office - building 9 Partially prepayable
C010 655342-1 Lakeland Apartments 125% of unpaid principal balance
C011 655342-1 Lake Terrace Apartments 125% of unpaid principal balance
C012 655342-1 Maryland Park Apartments 125% of unpaid principal balance
C013 655342-1 Riverland Apartments 125% of unpaid principal balance
C014 655342-1 River Terrace Apartments 125% of unpaid principal balance
C015 655342-1 Lake Park Apartments 125% of unpaid principal balance
C153 655341-8 31 Inwood Road Release of undeveloped land upon
separation of tax parcel
C188 655394-2 Lakeview Village Shopping Center Two parcels of Mortgaged Property
releasable upon payment of
specified release price
</TABLE>
S-IV-1
<PAGE>
SCHEDULE V
Schedule of Mortgage Loans Permitting
Future Subordinate Liens on Mortgaged
Properties
<TABLE>
<CAPTION>
Control Loan Description of Future
Number Number Property Name Permitted Liens
- ------ ------ ------------- ---------------
<S> <C> <C> <C>
N185 50157 Voorhees Pediatric Center Permits subordinated debt in an amount not to
exceed $600,000 secured by the Mortgaged
Property
N170 50033 Hampton Inn - Ben Salem Permits debt, secured by automobiles, computer
systems and related software, reservation
systems and telephone systems, the lien of
which would be senior to the lien of the
Mortgage Loan on such assets. The amount of
any such senior debt is limited to $150,000
</TABLE>
S-V-1
<PAGE>
SCHEDULE VI
Schedule of Exceptions to Mortgage File Delivery
S-VI-1
