<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: December 30, 1998
(Date of earliest event reported)
MORTGAGE CAPITAL FUNDING, INC.
------------------------------
(Sponsor)
(Issuer in Respect of
Multifamily/Commercial Mortgage Pass-Through Certificates, Series 1998-MC3)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
Delaware 333-24489 13-3408716
------------------------ ----------- ------------------
(STATE OR OTHER JURIS- (COMMISSION (I.R.S. EMPLOYER
DICTION OF ORGANIZATION) FILE NO.) IDENTIFICATION NO.)
399 Park Avenue, New York, New York 10043
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's Telephone Number, including area code (212) 559-6899
--------------
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
Description of the Certificates and the Mortgage Pool.
On December 30, 1998, a single series of certificates, entitled
Mortgage Capital Funding, Inc., Multifamily/Commercial Mortgage Pass-Through
Certificates, Series 1998-MC3 (the "Certificates"), was issued pursuant to a
pooling and servicing agreement (the "Pooling and Servicing Agreement"), dated
as of December 1, 1998, among Mortgage Capital Funding, Inc. as Sponsor (the
"Sponsor"), Citicorp Real Estate, Inc. ("CREI") and Salomon Brothers Realty
Corp ("SBRC") as Mortgage Loan Sellers (SBRC and CREI together in such
capacity, the "Mortgage Loan Sellers"), AMRESCO Services, L.P. as Master
Servicer, Allied Capital Corporation as Special Servicer, LaSalle National Bank
as Trustee (in such capacity, the "Trustee") and REMIC Administrator and ABN
AMRO Bank, N.V. as Fiscal Agent. The Certificates consist of 16 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",
"Class J Certificates", the "Class K Certificates", the "Class L Certificates",
the "Class R-I Certificates", the "Class R-II Certificates" and the "Class
R-III Certificates", respectively. The Certificates were issued in exchange
for, and to 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 232 multifamily and commercial mortgage loans (the
"Mortgage Loans"), having, as of the close of business on December 1, 1998 (the
"Cut-off Date"), an aggregate principal balance of $908,161,006, (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 Mortgage Loans from the Mortgage Loan Sellers which are affiliates
of the Sponsor, pursuant to certain mortgage loan purchase agreements between
the Sponsor and each of the Mortgage Loan Sellers. The Sponsor caused the
Mortgage Loans to be transferred by the Mortgage Loan Sellers to the Trustee
for the benefit of the holders of the Certificates. The Sponsor sold the Class
X, Class A-1, Class A-2, Class B, Class C, Class D and Class E Certificates to
Salomon Smith Barney Inc., as underwriter (the "Underwriter"), pursuant to an
underwriting agreement, dated December 30, 1998 (the "Underwriting Agreement"),
among the Sponsor, Citicorp and the Underwriter. A form of the Pooling and
Servicing Agreement is attached hereto as Exhibit 99.1, and a form of
Underwriting Agreement is attached hereto as Exhibit 99.2.
The Class A-1 Certificates have an initial state principal balance (a
Certificate Balance") of $214,494,000. The Class A-2 Certificates have an
initial Certificate Balance of $416,677,000. The Class B Certificates have an
initial Certificate Balance of $40,867,000. the Class C Certificates have an
initial Certificate Balance of $43,138,000. The Class D Certificates have an
initial Certificate Balance of $61,301,000. The Class E Certificates have an
initial Certificate Balance of $29,515,000. The Class X Certificates have an
initial notional amount of $908,161,005.
Capitalized terms used herein and not otherwise defined shall have the
meanings assigned to them in the Pooling and Servicing Agreement.
2
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ITEM 7. Financial Statements and Exhibits
(a) Not applicable
(b) Not applicable
(c) Exhibits
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
99.1 Pooling and Servicing Agreement
99.2 Underwriting Agreement
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MORTGAGE CAPITAL FUNDING, INC.
(Registrant)
By: /s/ Mark Horinbein
---------------------------
Name: Mark Horinbein
Title: Authorized Signatory
Dated: January 13, 1999
4
<PAGE>
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MORTGAGE CAPITAL FUNDING, INC.,
Sponsor,
SALOMON BROTHERS REALTY CORP.,
and
CITICORP REAL ESTATE, INC.,
Mortgage Loan Sellers,
AMRESCO SERVICES, L.P.,
Master Servicer,
ALLIED CAPITAL CORPORATION,
Special Servicer,
LASALLE NATIONAL BANK,
Trustee and REMIC Administrator
and
ABN AMRO BANK N.V.,
Fiscal Agent
---------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of December 1, 1998
----------------------------------------
$908,161,005
Multifamily/Commercial Mortgage Pass-Through Certificates
Series 1998-MC3
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
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<TABLE>
<CAPTION>
Section Page
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<S> <C>
ARTICLE I
DEFINITIONS; CERTAIN CALCULATIONS IN RESPECT OF
THE MORTGAGE POOL AND THE CERTIFICATES
1.01. Defined Terms............................................................................................5
1.02. Certain Calculations in Respect of the Mortgage Pool....................................................54
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES;
ORIGINAL ISSUANCE OF CERTIFICATES
2.01. Conveyance of Mortgage Loans............................................................................56
2.02. Acceptance of REMIC I by Trustee........................................................................60
2.03. Mortgage Loan Sellers' Repurchase of Mortgage Loans for Document Defects and Certain
Breaches of Representations and Warranties.............................................................62
2.04. Representations and Warranties of the Sponsor...........................................................63
2.05. Representations and Warranties of the Mortgage Loan Sellers.............................................65
2.06. Representations and Warranties of the Master Servicer...................................................78
2.07. Representations and Warranties of the Special Servicer..................................................80
2.08. Representations and Warranties of the Trustee and the REMIC Administrator...............................82
2.09. Representations and Warranties of the Fiscal Agent......................................................84
2.10. Issuance of the Class R-I Certificates; Creation of the REMIC I Regular Interests.......................86
2.11. Conveyance of REMIC I Regular Interests; Acceptance of REMIC II by the Trustee..........................86
2.12. Issuance of the Class R-II Certificates; Creation of the REMIC II Regular Interests.....................86
2.13. Conveyance of REMIC II Regular Interests; Acceptance of REMIC III by the Trustee........................87
2.14. Issuance of the REMIC III Certificates..................................................................87
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
3.01. Administration of the Mortgage Loans....................................................................88
3.02. Collection of Mortgage Loan Payments....................................................................89
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3.03. Collection of Taxes, Assessments and Similar Items; Servicing Accounts; Reserve Accounts................90
3.04. Collection Account, Distribution Account and Interest Reserve Account...................................92
3.05. Permitted Withdrawals From the Collection Account, the Distribution Account and the
Interest Reserve Account...............................................................................95
3.06. Investment of Funds in the Collection Account, the Interest Reserve Account, the REO
Account, the Servicing Accounts and the Reserve Accounts...............................................99
3.07. Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage..........................101
3.08. Enforcement of Due-On-Sale Clauses; Assumption Agreements; Subordinate Financing.......................104
3.09. Realization Upon Defaulted Mortgage Loans..............................................................106
3.10. Trustee to Cooperate; Release of Mortgage Files........................................................110
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...................111
3.12. Inspections; Collection of Financial Statements........................................................117
3.13. Annual Statement as to Compliance......................................................................118
3.14. Reports by Independent Public Accountants..............................................................119
3.15. Access to Certain Information..........................................................................120
3.16. Title to REO Property; REO Account.....................................................................120
3.17. Management of REO Property.............................................................................121
3.18. Sale of Defaulted Mortgage Loans and REO Properties....................................................124
3.19. Additional Obligations of the Master Servicer and the Special Servicer.................................127
3.20. Modifications, Waivers, Amendments and Consents........................................................131
3.21. Transfer of Servicing Between Master Servicer and Special Servicer; Record Keeping.....................136
3.22. Sub-Servicing Agreements...............................................................................137
3.23. Designation of Special Servicer by the Majority Certificateholder of the Controlling Class.............140
3.24. Confidentiality........................................................................................141
3.25. No Solicitation of Prepayments.........................................................................141
3.26. Automatic Resignation of Master Servicer and Special Servicer in Connection with an
Adverse Rating Event..................................................................................142
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS AND RELATED MATTERS
4.01. Distributions on the Certificates......................................................................144
4.02. Statements to Certificateholders; Certain Reports by the Master Servicer and the Special
Servicer..............................................................................................152
4.03. P&I Advances...........................................................................................160
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4.04. Allocation of Realized Losses and Additional Trust Fund Expenses to the Principal Balance
Certificates..........................................................................................162
4.05. Deemed Distributions on, and Allocations of Realized Losses and Additional Trust Fund
Expenses to, the REMIC I Regular Interests and REMIC II Regular Interests.............................163
ARTICLE V
THE CERTIFICATES
5.01. The Certificates.......................................................................................165
5.02. Registration of Transfer and Exchange of Certificates..................................................166
5.03. Book-Entry Certificates................................................................................172
5.04. Mutilated, Destroyed, Lost or Stolen Certificates......................................................173
5.05. Persons Deemed Owners..................................................................................174
5.06. Certification by Certificate Owners....................................................................174
ARTICLE VI
THE SPONSOR, THE MORTGAGE LOAN SELLERS,
THE MASTER SERVICER,
THE SPECIAL SERVICER AND THE REMIC ADMINISTRATOR
6.01. Liability of the Sponsor, the Mortgage Loan Sellers, the Master Servicer, the Special
Servicer and the REMIC Administrator..................................................................175
6.02. Merger, Consolidation or Conversion of the Sponsor, the Mortgage Loan Sellers, the Master
Servicer, the Special Servicer or the REMIC Administrator.............................................175
6.03. Limitation on Liability of the Sponsor, the Master Servicer, the Special Servicer, the REMIC
Administrator and Others..............................................................................176
6.04. Master Servicer, Special Servicer and REMIC Administrator Not to Resign................................177
6.05. Rights of the Sponsor and the Trustee in Respect of the Master Servicer, the Special Servicer
and the REMIC Administrator...........................................................................177
ARTICLE VII
DEFAULT
7.01. Events of Default......................................................................................179
7.02. Trustee to Act; Appointment of Successor...............................................................182
7.03. Notification to Certificateholders.....................................................................184
7.04. Waiver of Events of Default............................................................................184
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Section Page
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7.05. Additional Remedies of Trustee Upon Event of Default...................................................184
ARTICLE VIII
CONCERNING THE TRUSTEE
8.01. Duties of the Trustee..................................................................................186
8.02. Certain Matters Affecting the Trustee and the Fiscal Agent.............................................187
8.03. Trustee Not Liable for Validity or Sufficiency of Certificates or Mortgage Loans.......................188
8.04. Trustee and Fiscal Agent May Own Certificates..........................................................189
8.05. Fees of the Trustee; Indemnification of Trustee and the Fiscal Agent...................................189
8.06. Eligibility Requirements for the Trustee...............................................................190
8.07. Resignation and Removal of the Trustee.................................................................190
8.08. Successor Trustee......................................................................................191
8.09. Merger or Consolidation of the Trustee or the Fiscal Agent.............................................192
8.10. Appointment of Co-Trustee or Separate Trustee..........................................................192
8.11. Appointment of Custodians..............................................................................193
8.12. Access to Certain Information..........................................................................194
8.13. The Fiscal Agent.......................................................................................195
8.14. Filings with the Securities and Exchange Commission....................................................196
ARTICLE IX
TERMINATION
9.01. Termination Upon Repurchase or Liquidation of All Mortgage Loans.......................................197
9.02. Additional Termination Requirements....................................................................199
ARTICLE X
ADDITIONAL REMIC PROVISIONS
10.01. REMIC Administration...................................................................................201
10.02. Sponsor, Master Servicer, Special Servicer, Trustee and Fiscal Agent to Cooperate with
REMIC Administrator...................................................................................204
10.03. Fees of the REMIC Administrator........................................................................205
10.04. Use of Agents..........................................................................................205
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ARTICLE XI
MISCELLANEOUS PROVISIONS
11.01. Amendment..............................................................................................206
11.02. Recordation of Agreement; Counterparts.................................................................207
11.03. Limitation on Rights of Certificateholders.............................................................208
11.04. Governing Law..........................................................................................209
11.05. Notices................................................................................................209
11.06. Severability of Provisions.............................................................................210
11.07. Successors and Assigns; Beneficiaries..................................................................210
11.08. Article and Section Headings...........................................................................210
11.09. Notices to the Rating Agencies.........................................................................210
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<TABLE>
<CAPTION>
SCHEDULES AND EXHIBITS
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<S> <C>
SCHEDULE I Mortgage Loan Schedule
SCHEDULE II Sub-Servicing Agreements in Effect as of the Closing Date
SCHEDULE III Schedule of Exceptions to Mortgage File Delivery
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] [L] Certificate
EXHIBIT A-5 Form of Class [R-I] [R-II] [R-III] Certificate
EXHIBIT B-1 Form of Transferor Certificate Pursuant to Section 5.02(b)
EXHIBIT B-2 Form I of Transferee Certificate Pursuant to Section 5.02(b)
for Transfers of Non-Registered Certificates [For QIBs]
EXHIBIT B-3 Form II of Transferee Certificate Pursuant to Section 5.02(b) for
Transfers of Non-Registered 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 Form of Transferee Certificate in Connection with ERISA
EXHIBIT E Request for Release EXHIBIT F Form of Distribution Date Statement
EXHIBIT G-1 Form of Delinquent Loan Status Report
EXHIBIT G-2 Form of Historical Loan Modification Report
EXHIBIT G-3 Form of Historical Loss Report
EXHIBIT G-4 Form of REO Status Report
EXHIBIT G-5 Form of Special Servicer Loan Status Report
EXHIBIT G-6 Form of Operating Statement Analysis Report
EXHIBIT G-7 Form of Comparative Financial Status Report
EXHIBIT G-8 Form of Watchlist
EXHIBIT H-1 CSSA Standard Reporting Set-Up Layout
EXHIBIT H-2 CSSA Loan Periodic Update File
EXHIBIT H-3 CSSA Standard Property Data File
</TABLE>
<PAGE>
This Pooling and Servicing Agreement (this "Agreement"), is
dated and effective as of December 1, 1998, among MORTGAGE CAPITAL FUNDING,
INC., as Sponsor, SALOMON BROTHERS REALTY CORP. and CITICORP REAL ESTATE, INC.,
as Mortgage Loan Sellers, AMRESCO SERVICES, L.P., as Master Servicer, ALLIED
CAPITAL CORPORATION, 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. Each of the REMIC I Regular Interests will relate to a
specific Mortgage Loan. Each such REMIC I Regular Interest will have: (i) a
REMIC I Remittance Rate equal to or calculated based upon the Net Mortgage Rate
as of the Closing Date of the related Mortgage Loan; and (ii) an initial
Uncertificated Principal Balance equal to the Cut-off Date Balance of the
related Mortgage Loan. The Legal Final Distribution Date for each REMIC I
Regular Interest is the first Distribution Date following the related Mortgage
Loan's Stated Maturity Date. None of the REMIC I Regular Interests will be
certificated.
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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 sets forth the
designation, the REMIC II Remittance Rate and the initial Uncertificated
Principal Balance for each of the REMIC II Regular Interests. The Legal Final
Distribution Date for each REMIC II Regular Interest is the first Distribution
Date following the Stated Maturity Date of the Mortgage Loan that has, as of
the Closing Date, the latest Stated Maturity Date. None of the REMIC II Regular
Interests will be certificated.
Initial
REMIC II Uncertificated
Designation Remittance Rate Principal Balance
----------- --------------- -----------------
A-1 Variable (1) $ 214,494,000
A-2 Variable (1) $ 416,677,000
B Variable (1) $ 40,867,000
C Variable (1) $ 43,138,000
D Variable (1) $ 61,301,000
E Variable (1) $ 29,515,000
F Variable (1) $ 20,433,000
G Variable (1) $ 20,434,000
H Variable (1) $ 6,811,000
J Variable (1) $ 22,704,000
K Variable (1) $ 9,082,000
L Variable (1) $ 22,705,005
-----------------
(1) Calculated in accordance with the definition of "REMIC II
Remittance Rate".
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<PAGE>
As provided herein, the REMIC Administrator will elect to treat the
segregated pool of assets consisting of the REMIC II Regular Interests as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC III". The Class R-III Certificates will represent the
sole class of "residual interests" in REMIC III 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 III Regular Certificates. The Legal
Final Distribution Date for each Class of REMIC III Regular Certificates is the
first Distribution Date following the Stated Maturity Date of the Mortgage Loan
that has, as of the Closing Date, the latest Stated Maturity Date.
Initial Class
Designation Pass-Through Rate Principal Balance
- ----------- ----------------- -----------------
Class A-1 6.001% per annum (1) $ 214,494,000
Class A-2 6.337% per annum (1) $ 416,677,000
Class X Variable (2) (3)
Class B 6.540% per annum (1) $ 40,867,000
Class C 6.788% per annum (1) $ 43,138,000
Class D Variable (2) $ 61,301,000
Class E Variable (2) $ 29,515,000
Class F Variable (2) $ 20,433,000
Class G 5.500% per annum (1) $ 20,434,000
Class H 5.500% per annum (1) $ 6,811,000
Class J 5.500% per annum (1) $ 22,704,000
Class K 5.500% per annum (1) $ 9,082,000
Class L 5.500% per annum (1) $ 22,705,005
- ----------------
(1) Subject to reduction if the Weighted Average REMIC II Remittance Rate for
the Corresponding REMIC II Regular Interest for any Distribution Date is
less than the specified rate per annum. Specifically calculated in
accordance with the definition of "Pass-Through Rate".
(2) Calculated in accordance with the definition of "Pass-Through Rate".
(3) 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 all the REMIC II
Regular Interests.
In consideration of the mutual agreements herein contained, the
Sponsor, the Mortgage Loan Sellers, the Master Servicer, the Special Servicer,
the Trustee, the REMIC Administrator and the Fiscal Agent agree as follows:
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<PAGE>
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.
"30/360 Basis": The accrual of interest calculated on the
basis of a 360-day year consisting of twelve 30-day months.
"30/360 Mortgage Loan": A Mortgage Loan that accrues interest
on a 30/360 Basis.
"ABN AMRO": ABN AMRO Bank N.V. or its successor in interest.
"Accrued Certificate Interest": With respect to any Class of
REMIC III Regular Certificates, for any Distribution Date, one month's interest
(calculated on a 30/360 Basis) 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 III Regular
Certificates for any Distribution Date shall be deemed to have accrued during
the related 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.
"Actual/360 Basis": The accrual of interest calculated on the
basis of the actual number of days elapsed during any calendar month in a year
assumed to consist of 360 days.
"Actual/360 Mortgage Loan": A Mortgage Loan that accrues
interest on an Actual/360 Basis.
"Additional Interest": With respect to any ARD Loan after its
Anticipated Repayment Date, all interest accrued thereon at the Additional
Interest Rate.
"Additional Interest Rate": With respect to any ARD 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.
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<PAGE>
"Additional Trust Fund Expense": Any expense (including,
without limitation, Special Servicing Fees, Workout Fees, Liquidation Fees and,
to the extent not paid out of Default Charges, Advance Interest) 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 III
Regular Certificateholders' receiving less than the full amount of principal
and/or Distributable Certificate Interest to which they are entitled on any
Distribution Date.
"Additional Yield Amount": As defined in Section 4.01(a).
"Adjusted REMIC II Remittance Rate": With respect to REMIC II
Regular Interests D, E and F, for any Distribution Date, a rate per annum equal
to, in the case of each such REMIC II Regular Interest, the REMIC II Remittance
Rate in respect of such REMIC II Regular Interest for such Distribution Date;
and, with respect to each other REMIC II Regular Interest, for any Distribution
Date, a rate per annum equal to the lesser of (i) the REMIC II Remittance Rate
in respect of such REMIC II Regular Interest for such Distribution Date and
(ii) the rate per annum specified below with respect to such REMIC II Regular
Interest:
REMIC II Regular Interest Fixed Cap Rate
- ------------------------- --------------
A-1 6.001% per annum
A-2 6.337% per annum
B 6.540% per annum
C 6.788% per annum
G 5.500% per annum
H 5.500% per annum
J 5.500% per annum
K 5.500% per annum
L 5.500% per annum
"Administrative Fee Rate": With respect to each Mortgage Loan
(and any successor REO Loan), the sum of the 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.
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<PAGE>
"Adverse Rating Event": One or more of the events described
in Section 3.26(a).
"Adverse REMIC Event": With respect to each of REMIC I, REMIC
II and REMIC III, 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.
"Anticipated Repayment Date": With respect to any ARD 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) was obtained in respect of such
Required Appraisal Loan 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
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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 an ARD 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
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 obligations secured by 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 60-day period following any loan's becoming a Required Appraisal
Loan (or during the 12-month period prior thereto), then until the date such
Appraisal is obtained the "Appraisal Reduction Amount" for the subject Required
Appraisal Loan will be deemed to equal 25% 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.
"ARD 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 Scheduled P&I Payment) equal to
the excess (if any) of certain Net Cash Flow from the related Mortgaged
Property over the sum of the Scheduled P&I Payment and certain permitted
property expenses.
"Assignment of Leases": With respect to any Mortgaged
Property, any assignment of leases, rents and profits, or similar document or
instrument executed by the related Borrower, 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 P&I 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
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Stated Maturity Date occurs) and for each successive Due Date therefor as of
which such Mortgage Loan remains outstanding and part of the Trust Fund, if no
Scheduled P&I Payment (other than a delinquent Balloon Payment) is due for such
Due Date, the scheduled monthly payment of principal and/or interest deemed to
be due in respect thereof on such Due Date equal to the amount that would have
been due in respect of such Mortgage Loan on such Due Date if it had been
required to continue to accrue interest in accordance with its terms, and to
pay principal in accordance with the amortization schedule (if any), in effect
immediately prior to, and without regard to the occurrence of, its most recent
scheduled maturity date (as such terms and amortization schedule may have been
modified, and such maturity date may have been extended, in connection with a
bankruptcy, insolvency or similar proceeding involving the related Borrower 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, with
respect to any REO Loan, for each Due Date that the related REO Property
remains part of the Trust Fund, the scheduled monthly payment of principal
and/or interest deemed to be due in respect thereof on such Due Date equal to
the Scheduled P&I Payment that was due (or, in the case of a Balloon Mortgage
Loan described in the preceding clause of this definition, the Assumed P&I
Payment that was deemed due) on the last Due Date prior to its becoming an REO
Loan.
"Available Distribution Amount": With respect to any
Distribution Date, an amount equal to (a) the balance on deposit in the
Distribution Account as of 11:30 a.m. (New York City time) on such Distribution
Date (or such later time on such date as of which distributions are made on the
Certificates), including, without limitation, if and to the extent on deposit
therein as of such time, the Master Servicer Remittance Amount for the related
Master Servicer Remittance Date, any P&I Advances made by the Master Servicer,
the Trustee or the Fiscal Agent to cover uncollected Scheduled P&I Payments due
and/or Assumed P&I Payments deemed due during the related Collection Period,
any payments made by the Master Servicer to cover Prepayment Interest
Shortfalls incurred during the related Collection Period and, if such
Distribution Date occurs during March of any year, the aggregate of all amounts
in respect of the Interest Reserve Loans transferred from the Interest Reserve
Account to the Distribution Account for distribution on such Distribution 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
Scheduled P&I 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 Scheduled P&I Payment
due on its Stated Maturity Date is at least two times larger than the Scheduled
P&I Payment due on the Due Date next preceding its Stated Maturity Date.
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"Balloon Payment": With respect to any Balloon Mortgage Loan
as of any date of determination, the Scheduled P&I Payment payable on the
Stated Maturity Date of such Mortgage Loan.
"Bank": As defined in Section 2.08.
"Base Prospectus": That certain prospectus dated December 16,
1998, relating to trust funds established by the Sponsor and publicly offered
mortgage pass-through certificates evidencing interests therein.
"Bloomberg": As defined in Section 4.02(a).
"Book-Entry Certificate": Any Certificate registered in the
name of the Depository or its nominee.
"Borrower": 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.
"Business Day": Any day other than a Saturday, a Sunday or a
day on which banking institutions in New York, New York and the cities in which
the Primary Servicing Offices of the Master Servicer and Special Servicer and
the Corporate Trust Office of the Trustee are located, are authorized or
obligated by law or executive order to remain closed.
"CERCLA": The Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
"Certificate": Any one of the Sponsor's
Multifamily/Commercial Mortgage Pass- Through Certificates, Series 1998-MC3 as
executed by the Trustee and authenticated and delivered hereunder by the
Certificate Registrar.
"Certificate Factor": With respect to any Class of REMIC III
Regular Certificates, as of any date of determination, a fraction, expressed as
a decimal carried to eight places, the numerator of which is the then related
Class Principal Balance or Class Notional Amount, as the case may be, and the
denominator of which is the related Initial Class Principal Balance or Initial
Class Notional Amount, as the case may be.
"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
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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
Principal Balance Certificate, as of any date of determination, the
then-outstanding principal amount of such Certificate equal to the product of
(a) the Percentage Interest evidenced by such Certificate, multiplied by (b)
the then Class Principal Balance of the Class of Certificates to which such
Certificate belongs.
"Certificate Register" and "Certificate Registrar": The
register maintained and the registrar appointed pursuant to Section 5.02.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register; 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, CREI, SBRC,
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, CREI, SBRC, 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 III
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 III
for purposes of the REMIC Provisions.
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"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 III 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 III for
purposes of the REMIC Provisions.
"Class D Certificate": Any one of the Certificates with a
"Class D" designation on the face thereof, substantially in the form of Exhibit
A-3 attached hereto, and evidencing a "regular interest" in REMIC III 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 III 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 III 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 III 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 III 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 III 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 III for
purposes of the REMIC Provisions.
"Class L Certificate": Any one of the Certificates with a
"Class L" designation on the face thereof, substantially in the form of Exhibit
A-4 attached hereto, and evidencing a "regular interest" in REMIC III for
purposes of the REMIC Provisions.
"Class Notional Amount": The aggregate hypothetical or
notional amount on which the Class X Certificates collectively accrue interest
equal to the aggregate of the Uncertificated Principal Balances of all the
REMIC II Regular Interests outstanding from time to time.
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"Class Principal Balance": The aggregate principal amount of
any Class of Principal Balance 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
Principal Balance 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.
"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 R-III Certificate": Any one of the Certificates with a
"Class R-III" 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 III 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 attached hereto, and evidencing a "regular interest" in REMIC III for
purposes of the REMIC Provisions.
"Class X Portion": With respect to the Uncertificated Accrued
Interest in respect of any REMIC II Regular Interest for any Distribution Date,
that portion thereof that is equal to the product of (i) the entire amount of
such Uncertificated Accrued Interest, multiplied by (ii) a fraction (not less
than zero or greater than one), the numerator of which is the excess, if any,
of the REMIC II Remittance Rate in respect of such REMIC II Regular Interest
for such Distribution Date, over the Adjusted REMIC II Remittance Rate in
respect of such REMIC II Regular Interest for such Distribution Date, and the
denominator of which is the REMIC II Remittance Rate in respect of such REMIC
II Regular Interest for such Distribution Date; and, with respect to the
Uncertificated Distributable Interest in respect of any REMIC II Regular
Interest for any Distribution Date, that portion thereof that is equal to the
Class X Portion of the Uncertificated Accrued Interest in respect of such REMIC
II Regular Interest for such Distribution Date, reduced (to not less than zero)
by that portion, if any, of the Net Aggregate Prepayment Interest Shortfall, if
any, for such Distribution Date allocated to the Class X Certificates that was,
in turn, deemed allocated to such REMIC II Regular Interest in accordance with
the last sentence of the definition of "Uncertificated Distributable Interest".
"Closing Date": December 30, 1998.
"Code": The Internal Revenue Code of 1986, as amended, and
Treasury Regulations promulgated thereunder, including proposed regulations to
the extent that, by reason of their
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proposed effective date, they could, as of the date of any determination or
opinion as to the tax consequences of any action or proposed action or
transaction, be applied to the Trust Fund, the Certificates and the
Certificateholders.
"Collection 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
" AMRESCO Services, L.P. [or the name of any successor Master Servicer], as
Master Servicer, in trust for the registered holders of Mortgage Capital
Funding, Inc., Multifamily/Commercial Mortgage Pass-Through Certificates,
Series 1998-MC3".
"Collection Period": With respect to any Distribution Date,
the period that begins immediately following the Determination Date in the
calendar month prior to 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.
"Comparative Financial Status Report": A report containing
substantially the information set forth in Exhibit G-7 hereto, setting forth,
among other things, the occupancy and Debt Service Coverage Ratio for each
Mortgage Loan or related Mortgaged Property, as applicable, as of the date of
the latest financial information (covering no less than twelve (12) months)
available immediately preceding the preparation of such report and the revenue
and Net Cash Flow for each of the following three (3) periods (to the extent
such information is in the Master Servicer's or the Special Servicer's
possession): (i) the most current available year-to-date, (ii) each of the
previous two (2) full fiscal years stated separately; and (iii) the "base year"
(representing the original analysis of information used as of the Cut-off
Date).
"Confidential Information": As defined in Section 3.24.
"Controlling Class": As of any date of determination, the
outstanding Class of Principal Balance 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 its Initial Class Principal Balance thereof (or, if no Class of
Principal Balance Certificates has a then-outstanding Class Principal Balance
at least equal to 25% of its Initial Class Principal Balance thereof, then the
"Controlling Class" shall be the outstanding Class of Principal Balance
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, Suite 1625, 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
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Mortgage Loan" (other than by reason of a Liquidation Event occurring in
respect of such Mortgage Loan or a related Mortgaged Property becoming an REO
Property).
"Corresponding REMIC II Regular Interest": With respect to
any Class of Principal Balance Certificates, the REMIC II Regular Interest that
has an alphabetical and, if applicable, numerical designation that is the same
as the alphabetical and, if applicable, numerical Class designation for such
Class of Principal Balance Certificates.
"Corresponding Class of Principal Balance Certificates": With
respect to any REMIC II Regular Interest, the Class of Principal Balance
Certificates that has an alphabetical and, if applicable, numerical Class
designation that is the same as the alphabetical and, if applicable, numerical
designation for such REMIC II Regular Interest.
"CREI": Citicorp Real Estate, Inc. or its successor in
interest.
"CREI Mortgage Loan": Any of the Mortgage Loans which are the
subject of the CREI Mortgage Loan Purchase Agreement and as to which "CREI" is
identified on the Mortgage Loan Schedule under the heading "Loan Contributor".
"CREI Mortgage Loan Purchase Agreement": That certain
mortgage loan purchase agreement dated as of December 23, 1998 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.
"CSSA Reports": With respect to the Mortgage Pool, the CSSA
Standard Reporting Set-Up Layout substantially in the form attached hereto as
Exhibit H-1, the CSSA Loan Periodic Update File substantially in the form
attached hereto as Exhibit H-2 and the CSSA Standard Property Data File
substantially in the form attached hereto as Exhibit H-3.
"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, CREI, SBRC or an Affiliate of any
of them.
"Cut-off Date": December 1, 1998.
"Cut-off Date Balance": With respect to any Mortgage Loan,
the unpaid principal balance of such Mortgage Loan as of the Cut-off Date,
after application of all payments of principal due in respect of such Mortgage
Loan on or before such date, whether or not received.
"Debt Service Coverage Ratio": With respect to any Mortgage
Loan, other than a Cross-Collateralized Mortgage Loan, as of any date of
determination, 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 (3) months for which financial statements (whether or not audited)
have been
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received by or on behalf of the Mortgage Loan Sellers (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 Scheduled P&I Payment
in effect for such Mortgage Loan as of such date of determination, multiplied
by 12; and, with respect to any Cross-Collateralized Mortgage Loan, as of any
date of determination, the ratio of (x) the aggregate Net Operating Income
(before payment of any debt service on such Cross-Collateralized Mortgage Loan
and the Mortgage Loans with which it is cross- collateralized) generated by the
related Mortgaged Properties for such Cross-Collateralized Mortgage Loan and
the Mortgage Loans with which it is cross-collateralized during the most
recently ended period of not more than twelve months or less than three (3)
months for which financial statements (whether or not audited) have been
received by or on behalf of the Mortgage Loan Sellers (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 aggregate of the amount of the Scheduled P&I
Payments in effect for such Cross-Collateralized Mortgage Loan and the Mortgage
Loans with which it is cross-collateralized as of such date of determination,
multiplied by 12.
"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 or
otherwise arising out of the failure by the related Borrower to make the
Scheduled P&I Payment on the related Due Date even though such failure is not
an event of default under the related Mortgage Note or Mortgage.
"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).
"Defaulting Party": As defined in Section 7.01(b).
"Defeasance Collateral": With respect to any Defeasance Loan,
direct noncallable government obligations of the United States of America, as
are permitted under the terms of a Mortgage Note or related Mortgage Loan
documents, but only if such obligations or assets constitute "government
securities" under the defeasance rule of the REMIC Provisions.
"Defeasance Loan": Any Mortgage Loan which grants the holder
or the Borrower a Defeasance Option.
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"Defeasance Option": With respect to any Defeasance Loan, the
right of a Borrower, pursuant to the terms of the related Mortgage Note or the
Mortgage, to obtain a release (or the right of the holder of such Mortgage Loan
to condition the release) of the related Mortgaged Property from the lien of
the related Mortgage upon the pledge to the Trustee of Defeasance Collateral.
"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
of, and including such additional information in respect of each such Mortgage
Loan as set forth on, Exhibit G-1 attached hereto.
"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 11th day of the calendar month in which such Distribution Date occurs, or
if such 11th day is not a Business Day, the immediately preceding Business Day.
"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 the Trust 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
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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 III Regular Certificates, for any Distribution Date, the Accrued
Certificate Interest in respect of such Class of Certificates for such
Distribution Date, reduced (to not less than zero) by that portion, if any, of
the Net Aggregate Prepayment Interest Shortfall for such Distribution Date
allocated to such Class of Certificates as provided below. The Net Aggregate
Prepayment Interest Shortfall, if any, for each Distribution Date shall be
allocated to the respective Classes of REMIC III Regular Certificates on such
Distribution Date as follows: first, to the respective Classes of REMIC III
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 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 "LaSalle National Bank [or the
name of any successor Trustee], as Trustee, in trust for the registered holders
of Mortgage Capital Funding, Inc., Multifamily/Commercial Mortgage Pass-Through
Certificates, Series 1998-MC3".
"Distribution Date": The 18th day of any month, or if any
such 18th day is not a Business Day, the next succeeding Business Day. The
first Distribution Date will be January 19, 1999.
"Distribution Date Statement": As defined in Section 4.02(a).
"Document Defect": As defined in Section 2.02(e).
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"Due Date": With respect to (i) any Mortgage Loan on or prior
to its Stated Maturity Date, the day of the month set forth in the related
Mortgage Note on which each Scheduled P&I 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
Scheduled P&I 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 Scheduled P&I 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 or the Fiscal Agent (if it meets the following
rating criteria), the long-term unsecured debt obligations of which are rated
no less than "Aa3" by Moody's and "AA" by S&P, if the deposits are to be held
in the account for more than thirty (30) days, or the short-term unsecured debt
obligations of which are rated no less than "P-1" by Moody's and "A-1+" by S&P,
if the deposits are to be held in the account for thirty (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), (iv) any other account which would not result in the
downgrade or withdrawal of the rating then assigned by either Rating Agency to
any Class of Certificates (as confirmed in writing by each Rating Agency), or
(v) any account held at NationsBank, N.A. for so long as such bank's long-term
unsecured debt ratings for deposits held for more than thirty (30) days
assigned by the Rating Agencies are no lower than the current such ratings.
"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 ten (10) days
of the Special Servicer's becoming aware that it must be made in order to avoid
any material penalty, any material harm to a Mortgaged Property or any other
material adverse consequence to the Trust Fund.
"ERISA": The Employee Retirement Income Security Act of 1974,
as amended.
"Escrow Payment": Any payment received by the Master Servicer
or the Special Servicer for the account of any Borrower for application toward
the payment of real estate taxes, assessments, insurance premiums and similar
items in respect of the related Mortgaged Property.
"Event of Default": One or more of the events described in
Section 7.01(a).
"Exchange Act": The Securities Exchange Act of 1934, as
amended.
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"Excluded Class": Any Class of Principal Balance Certificates
other than the Class A-1 Certificates, Class A-2 Certificates, Class B
Certificates, Class C Certificates, Class D Certificates and Class E
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 CREI or SBRC or an Affiliate of
either of them 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, or otherwise acquired by the Sole Certificateholder pursuant to Section
9.01) that there has been a recovery of all Insurance Proceeds, Liquidation
Proceeds and other payments or recoveries (including, without limitation, by
reason of a sale of such Mortgage Loan or REO Property pursuant to Section
3.18(d) hereof) that the Special Servicer has determined, in accordance with
the Servicing Standard, exercised without regard to any obligation of the
Master Servicer or Special Servicer to make payments from its own funds
pursuant to Section 3.07(b), will be ultimately recoverable.
"Fiscal Agent": ABN AMRO, in its capacity as Fiscal Agent
hereunder, or any successor Fiscal Agent as herein provided.
"Freddie Mac": The Federal Home Loan Mortgage Corporation or
any successor.
"Ground Lease": The ground lease pursuant to which any
Borrower 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.
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"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 of, and including such additional information in
respect of each such Mortgage Loan as set forth on, Exhibit G-2 attached
hereto.
"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
aggregate amount of Liquidation Proceeds received, and Liquidation Expenses
incurred, both during the Collection Period ending on such Determination Date
and historically, and (ii) the amount of Realized Losses occurring during such
Collection Period and historically, set forth on a Mortgage Loan-by-Mortgage
Loan and REO Property-by-REO Property basis, substantially in the form of, and
including such additional information in respect of each Mortgage Loan and REO
Property as to which a Final Recovery Determination has been made as set forth
on, Exhibit G-3 attached hereto.
"HUD-Approved Servicer": A servicer that is a mortgagee
approved by the Secretary of Housing and Urban Development pursuant to Sections
203 and 211 of the National Housing Act.
"Independent": When used with respect to any specified
Person, any such Person who (i) is in fact independent of the Sponsor, CREI,
SBRC, the Master Servicer, the Special Servicer, the Trustee, the REMIC
Administrator, the Fiscal Agent 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, CREI, SBRC, the Master Servicer, the Special
Servicer, the Trustee, the REMIC Administrator, the Fiscal Agent or any
Affiliate thereof, and (iii) is not connected with the Sponsor, CREI, SBRC, the
Master Servicer, the Special Servicer, the Trustee, the REMIC Administrator,
the Fiscal Agent 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, CREI, SBRC, the Master Servicer, the Special Servicer, the Trustee,
the REMIC Administrator, the Fiscal Agent 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, CREI, SBRC, the Master Servicer, the Special
Servicer, the Trustee, the REMIC Administrator, the Fiscal Agent 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),
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or (ii) any other Person upon receipt by the Trustee and the REMIC
Administrator of an Opinion of Counsel, which shall be at no expense to the
Trustee, the REMIC Administrator or the Trust, 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 $908,161,005.
"Initial Class Principal Balance": With respect to any Class
of Principal Balance 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 $214,494,000
Class A-2 $416,677,000
Class B $40,867,000
Class C $43,138,000
Class D $61,301,000
Class E $29,515,000
Class F $20,433,000
Class G $20,434,000
Class H $6,811,000
Class J $22,704,000
Class K $9,082,000
Class L $22,705,005
"Initial Pool Balance": The aggregate Cut-off Date Balance of
all the Mortgage Loans included in the Trust Fund as of the Closing Date.
"Institutional Accredited Investor": An "accredited investor"
as defined in any of paragraphs (1), (2), (3) and (7) of Rule 501(a) under the
Securities Act or any entity in which all of the equity owners come within such
paragraphs.
"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 Borrower, in
either case, in accordance with the Servicing Standard.
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"Interest Accrual Basis": The basis on which interest accrues
in respect of any Mortgage Loan, any REMIC I Regular Interest, any REMIC II
Regular Interest or any Class of REMIC III Regular Certificates, in each case
consisting of one of the following: (i) a 30/360 Basis; or (ii) an Actual/360
Basis.
"Interest Accrual Period": With respect to any REMIC I
Regular Interest, any REMIC II Regular Interest or any Class of REMIC III
Regular Certificates, for any Distribution Date, the calendar month immediately
preceding the month in which such Distribution Date occurs.
"Interest Only Certificate": Any Class X Certificate.
"Interest Reserve Account": The segregated account created
and maintained by the Master Servicer pursuant to Section 3.04(c) on behalf of
the Trustee in trust for Certificateholders, which shall be entitled "AMRESCO
Services, L.P. [or the name of any successor Master Servicer], as Master
Servicer, in trust for the registered holders of Mortgage Capital Funding,
Inc., Multifamily/Commercial Mortgage Pass-Through Certificates, Series
1998-MC3".
"Interest Reserve Amount": With respect to each Interest
Reserve Loan and each Master Servicer Remittance Date that occurs during
February of each year and during January of each year that is not a leap year,
an amount equal to one-day's interest at the related Net Mortgage Rate accrued
on the related Stated Principal Balance as of the Due Date in the month in
which such Master Servicer Remittance Date occurs (but prior to the application
of any amounts due on such Due Date), to the extent that a Scheduled P&I
Payment is remitted to the Trustee in respect thereof for such Due Date on such
Master Servicer Remittance Date or a P&I Advance is made in respect thereof for
such Due Date on such Master Servicer Remittance Date.
"Interest Reserve Loan": Any Actual/360 Mortgage Loan.
"Interested Person": The Sponsor, CREI, SBRC, 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.
"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 all or any portion of a Scheduled P&I Payment or an Assumed P&I
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
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Insurance Proceeds, Liquidation Proceeds, REO Revenues or otherwise, which
represent late collections of all or any portion of a Scheduled P&I Payment or
an Assumed P&I Payment in respect of the related Mortgage Loan or of an Assumed
P&I 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.
"Legal Final Distribution Date": With respect to any REMIC I
Regular Interest, any REMIC II Regular Interest or any Class of REMIC III
Regular Certificates, the "latest possible maturity date" thereof, calculated
solely for purposes of satisfying Treasury regulation section
1.860G-1(a)(4)(iii).
"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 CREI or SBRC or any Affiliate of either of them
pursuant to Section 2.03; (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; or (v) such Mortgage Loan is acquired by the Sole
Certificateholder in exchange for Certificates 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; (y) such REO Property is purchased by the Master Servicer or the
Majority Certificateholder of the Controlling Class pursuant to Section 9.01;
or (z) such REO Property is acquired by the Sole Certificateholder in exchange
for Certificates pursuant to Section 9.01.
"Liquidation Expenses": All customary, reasonable and
necessary "out of pocket" costs and expenses due and owing (but not otherwise
covered by Servicing Advances) in connection with the liquidation of any
Specially Serviced Mortgage Loan or REO Property pursuant to Section 3.09 or
3.18 (including, without limitation, legal fees and expenses, committee or
referee fees and, if applicable, brokerage commissions and conveyance taxes).
"Liquidation Fee": With respect to each Specially Serviced
Mortgage Loan or REO Property (other than any Specially Serviced Mortgage Loan
or REO Property purchased or otherwise acquired (x) by CREI or SBRC or any
Affiliate of either of them pursuant to Section 2.03 within the time period
permitted by such section following CREI's or SBRC's, as the case may be,
notice or discovery of the breach, Document Defect or other event 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, the Majority Certificateholder of
the Controlling Class or the Sole Certificateholder pursuant to Section 9.01),
the fee designated as such and payable to the Special Servicer pursuant to the
third paragraph of Section 3.11(c).
"Liquidation Fee Rate": With respect to each Specially
Serviced Mortgage Loan or REO Property as to which a Liquidation Fee is
payable, 1.0%.
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"Liquidation Proceeds": All cash amounts (other than
Insurance Proceeds and REO Revenues) received by the Master Servicer or the
Special Servicer in connection with: (i) the taking of all or a part of a
Mortgaged Property by exercise of the power of eminent domain or condemnation;
(ii) the liquidation of a Mortgaged Property or other collateral constituting,
or that constituted, security for a defaulted Mortgage Loan, through trustee's
sale, foreclosure sale, REO Disposition or otherwise, exclusive of any portion
thereof required to be released to the related Borrower 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
Borrower 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 CREI or SBRC or an Affiliate of either of them
pursuant to Section 2.03; (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; or (vii) the acquisition of any Mortgage Loan
or REO Property by the Sole Certificateholder in exchange for Certificates
pursuant to Section 9.01.
"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": AMRESCO Services, L.P., in its capacity as
master servicer, 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 Collection 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 Scheduled P&I 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 Collection Account
pursuant to any of clauses (ii) through (xvi) of Section 3.05(a), (v) if such
Master Servicer Remittance Date occurs during February of any year or during
January of any year that is not a leap year, the Interest Reserve Amounts with
respect to the Interest Reserve Loans required pursuant to Section 3.04(c) to
be withdrawn from the Collection Account and deposited into the Interest
Reserve Account on such Master Servicer Remittance Date, and (vi) any amounts
deposited in the Collection 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.
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"Master Servicer Remittance Date": The Business Day
immediately preceding each Distribution Date.
"Master Servicing Fee": With respect to each Mortgage Loan
and REO Loan, the fee payable to the Master Servicer pursuant to Section
3.11(a) and from which 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 specified as such in the
Mortgage Loan Schedule, which rate includes the Primary Servicing Fee Rate.
"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 Scheduled P&I 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 Borrower 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.
"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 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.
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"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 1998-MC3, 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, that is
complete and 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), that is complete and 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 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), that is complete, 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
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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 in respect 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 Borrower under the Mortgage Loan which was in
the possession of CREI or SBRC, as applicable, at
the time the Mortgage Files were delivered to the
Trustee;
(xi) (A) file or certified copies of any UCC Financing
Statements and continuation statements which were
filed in order to perfect (and maintain the
perfection of) any security interest held by the
originator of the Mortgage Loan (and each
assignee of record prior to the Trustee) in and
to the personalty of the Borrower at the
Mortgaged Property (in each case with evidence of
filing thereon) and which were in the possession
of CREI or SBRC, 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 CREI or
SBRC, as applicable, a UCC-2 or UCC-3 financing
statement, as applicable, that is complete and in
form suitable for filing, executed by the most
recent assignee of record prior to the Trustee
or, if none, by the originator, evidencing the
transfer of such security interest to the Trustee
(or a certified copy of such assignment as sent
for filing);
(xii) the original or a copy of the power of attorney
(with evidence of recording thereon, if appropriate)
granted by the Borrower if the Mortgage, Mortgage
Note or other document or instrument referred to
above was signed on behalf of the Borrower;
(xiii) if the Borrower has a leasehold interest in the
related Mortgaged Property, the original Ground
Lease or a copy thereof;
(xiv) the original or copy of any loan agreement and
intercreditor agreement relating to such Mortgage
Loan;
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(xv) the original or copy of any operating lease
relating to the related Mortgaged Property;
(xvi) the original or copy of any Indemnity/Deed of
Trust; and
(xvii) 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 Purchase Agreements": Together, the CREI Mortgage Loan
Purchase Agreement and the SBRC Mortgage Loan Purchase Agreement.
"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;
(vi) the (A) remaining term to stated maturity or, in
the case of an ARD Loan, the Anticipated
Repayment Date and (B) Stated Maturity Date;
(vii) the Due Date;
(viii) the amount of the Scheduled P&I Payment due on
the first Due Date following the Cut-off Date;
(ix) the Master Servicing Fee Rate (inclusive of the
Primary Servicing Fee Rate);
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(x) the Primary Servicing Fee Rate;
(xi) whether the Borrower's interest in the related
Mortgaged Property is a leasehold estate;
(xii) the related Mortgage Loan Seller;
(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;
(xiv) whether the Mortgage Loan is an ARD Loan; and
(xv) whether the Mortgage Loan is a Defeasance 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 Sellers": Together, CREI and SBRC.
"Mortgage Note": The original executed note evidencing the
indebtedness of a Borrower under a Mortgage Loan, together with any rider,
addendum or amendment thereto.
"Mortgage Pool": Collectively, all of the Mortgage Loans and
any successor REO Loans.
"Mortgage Rate": With respect to (i) any Mortgage Loan on or
prior to its Stated Maturity Date, the annualized rate at which interest is
scheduled (in the absence of a default) to accrue on such Mortgage Loan from
time to time in accordance with the terms of the related Mortgage Note (as such
may be modified at any time following the Closing Date) and applicable law,
(ii) any Mortgage Loan after its Stated Maturity Date, the annualized rate
described in clause (i) above determined without regard to the passage of such
Stated Maturity Date, and (iii) any REO Loan, the annualized rate described in
clause (i) or (ii) above, as applicable, determined as if the related Mortgage
Loan had remained outstanding.
"Mortgaged Property": Individually and collectively, as the
context may require, each real property (together with all improvements and
fixtures thereon) subject to the lien of a Mortgage and constituting collateral
for a Mortgage Loan. With respect to any Cross-Collateralized Mortgage Loan, as
the context may require, "Mortgaged Property" may mean, collectively, all the
Mortgaged Properties securing such Cross-Collateralized Mortgage Loan.
"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
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Collection Period, exceeds (b) the sum of (i) 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 and (ii) the aggregate of all Prepayment
Interest Excesses collected in connection with the receipt of Principal
Prepayments on the Mortgage Loans during the related Collection Period.
"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 any Advance Interest accrued on Advances made in respect of such
Mortgage Loan.
"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 sum of the related Administrative Fee
Rate and any related Additional Interest Rate.
"Net Operating Income": With respect to any Mortgaged
Property, the total operating revenues derived from such Mortgaged Property,
minus the total fixed and variable operating expenses incurred in respect of
such Mortgaged Property (subject to adjustments for, among other things, (i)
non-cash items such as depreciation and amortization, (ii) capital expenditures
and (iii) debt service on loans secured by the Mortgaged Property).
"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 payments, Insurance Proceeds, Liquidation
Proceeds or any other recovery on or in respect of such Mortgage Loan or the
related REO Property (without giving effect to potential recoveries on
deficiency judgments or recoveries from guarantors).
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"Nonrecoverable Servicing Advance": Any Servicing Advance
made or proposed to be made in respect of a Mortgage Loan or an 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 payments,
Insurance Proceeds, Liquidation Proceeds or any other recovery on or in respect
of such Mortgage Loan or such 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,
Class L 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, as the case may be, or
a Responsible Officer of the Trustee or the Fiscal Agent, as the case may be.
"Operating Statement Analysis": As defined in Section
4.02(b).
"Opinion of Counsel": A written opinion of counsel (who must,
in connection with any opinion rendered pursuant hereto with respect to tax
matters or a resignation under Section 6.04, be Independent counsel, but who
otherwise may be salaried counsel for the Sponsor, CREI, SBRC, the Trustee, the
REMIC Administrator, the Fiscal Agent, 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 the Class X
Certificates, for any Distribution Date, a rate per annum equal to the excess,
if any, of the Weighted Average REMIC II Remittance Rate for such Distribution
Date, over the Weighted Average Adjusted REMIC II Remittance Rate for such
Distribution Date; with respect to the Class D, Class E and Class F
Certificates, for any Distribution Date, a rate per annum equal to, in the case
of each such Class, the REMIC II Remittance Rate in respect of the
Corresponding REMIC II Regular Interest for such Class of Certificates for such
Distribution Date; and, with respect to each other Class of Principal Balance
Certificates, for any Distribution Date, a rate per annum equal to the lesser
of (i) the REMIC II Remittance Rate in respect of the Corresponding REMIC II
Regular Interest for such Class of Certificates for such Distribution Date and
(ii) the rate per annum specified below with respect to such Class of
Certificates:
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Class of Principal Balance
Certificates Fixed Cap Rate
- ------------ --------------
Class A-1 6.001% per annum
Class A-2 6.337% per annum
Class B 6.540% per annum
Class C 6.788% per annum
Class G 5.500% per annum
Class H 5.500% per annum
Class J 5.500% per annum
Class K 5.500% per annum
Class L 5.500% per annum
"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, from most senior to most
subordinate, 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;
eleventh, the Class L Certificates; and last, the respective Classes of
Residual Certificates.
"Percentage Interest": With respect to any REMIC III Regular
Certificate, the portion of the relevant Class evidenced by such Certificate,
expressed as a percentage, the numerator of which is the Certificate Principal
Balance or Certificate Notional Amount, as the case may be, of such Certificate
as of the Closing Date, as specified on the face thereof, and the denominator
of which is the Initial Class Principal Balance or Initial Class Notional
Amount, as the case may be, of the relevant Class. With respect to a Residual
Certificate, the percentage interest in distributions to be made with respect
to the relevant Class, as stated on the face of such Certificate.
"Permitted Investments": Any one or more of the following
obligations:
(i) direct obligations of, or obligations fully guaranteed as
to timely payment of principal and interest by, the United States or
any agency or instrumentality thereof, provided such obligations are
backed by the full faith and credit of the United States;
(ii) repurchase obligations with respect to any security
described in clause (i) above, provided that the party agreeing to
repurchase such obligations is a financial institution meeting the
requirements set forth in clause (iii) below;
(iii) demand and time deposits in, or certificates of deposit
of, or bankers' acceptances issued by, any bank or trust company,
savings and loan association or savings
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bank, the short term obligations of which are rated in the highest
short term rating category by each Rating Agency (or, if not rated by
either Rating Agency, otherwise acceptable to such Rating Agency, as
applicable, as confirmed in writing that such investment would not
result in the downgrade or withdrawal of the rating then assigned by
either Rating Agency to any Class of Certificates);
(iv) commercial paper 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 "A-1+" by S&P; and
(v) any other obligation or security which would not result
in the downgrade 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 no investment described hereunder may have an
"r" highlighter or other comparable qualifier attached to its rating; 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), an original maturity of not more than 365 days and
either a fixed interest rate or variable interest rate tied to a single
interest rate index plus a single fixed spread; and provided, further, that
each investment described hereunder shall be a "cash flow investment", as
defined in the REMIC Provisions.
"Permitted Transferee": Any Transferee of a Residual
Certificate other than either a Disqualified Organization or a Non-United
States Person.
"Person": Any individual, corporation, partnership, joint
venture, association, joint- stock company, trust, unincorporated organization,
limited liability company or government or any agency or political subdivision
thereof.
"Phase I Environmental Assessment": A "Phase I assessment" as
described in and meeting the criteria of Chapter 5 of the 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).
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"Prepayment Assumption": The assumption that each ARD Loan is
paid in full on its Anticipated Repayment Date and that no Mortgage Loan is
otherwise prepaid prior to its Stated Maturity Date, such assumption to be used
for determining the accrual of original issue discount, market discount and
premium, if any, on the Mortgage Loans, the REMIC I Regular Interests, the
REMIC II 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, after the
related Due Date in any Collection Period, any payment of interest (net of
related Master Servicing Fees and exclusive of Prepayment Premiums, Default
Interest and, in the case of an ARD Loan after its Anticipated Repayment Date,
Additional Interest) actually collected from the related Borrower and intended
to cover the period from the related Due Date in such Collection Period 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, prior to
the related Due Date in any Collection Period, the amount of uncollected
interest (determined without regard to any Prepayment Premium that may have
been collected that would have accrued at a per annum rate equal to the sum of
the Net Mortgage Rate for such Mortgage Loan plus the Trustee Fee Rate, on the
amount of such Principal Prepayment during the period commencing on the date as
of which such Principal Prepayment was applied to such Mortgage Loan and ending
on the day prior to the related Due Date in such Collection Period, inclusive.
"Prepayment Premium": Any premium, penalty, charge or fee
(including, without limitation, a yield maintenance payment) paid or payable,
as the context requires, by a Borrower in connection with a Principal
Prepayment on, or other early collection of principal of, a Mortgage Loan or
any successor REO Loan.
"Primary Servicing Fee": With respect to each Mortgage Loan
that is subject to a Sub-Servicing Agreement as of the Closing Date, the
monthly fee payable to the Sub-Servicer by the Master Servicer from the Master
Servicing Fee.
"Primary Servicing Fee Rate": With respect to each Mortgage
Loan that is subject to a Sub-Servicing Agreement as of the Closing Date, the
rate per annum specified as such in the Mortgage Loan Schedule.
"Primary Servicing Office": With respect to the Master
Servicer, the office thereof primarily responsible for performing its
respective duties under this Agreement, initially located in Atlanta, Georgia
and, with respect to the Special Servicer, the office thereof primarily
responsible for performing its respective duties under this Agreement,
initially located in Washington, D.C.
"Principal Balance Certificate": Any Class A, Class B, Class
C, Class D, Class E, Class F, Class G, Class H, Class J, Class K or Class L
Certificate.
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"Principal Distribution Amount": With respect to any
Distribution Date, an amount (calculated in accordance with Section 1.02) equal
to the aggregate (without duplication) of:
(a) all payments of principal (other than Principal
Prepayments) received on the Mortgage Loans during the related
Collection Period, in each case net of any portion of the particular
payment that represents a late collection of principal for which a P&I
Advance was previously made for a prior Distribution Date or that
represents the principal portion of a Scheduled P&I Payment due on or
before the Cut-off Date or on a Due Date subsequent to the end of the
related Collection Period;
(b) the principal portion of all Scheduled P&I Payments due
in respect of the Mortgage Loans for their respective Due Dates
occurring during the related Collection Period, that were received
prior to the end of the related Collection Period;
(c) all Principal Prepayments received on the Mortgage Loans
during the related Collection Period;
(d) all other collections (including Liquidation Proceeds,
Insurance Proceeds and REO Revenues) that were received on or in
respect of the Mortgage Loans and any REO Properties during the
related Collection Period and that were identified and applied by the
Master Servicer as recoveries of principal of such Mortgage Loans or
the related REO Loans, as the case may be, in each case net of any
portion of the particular collection that represents a late collection
of principal due on or before the Cut-off Date or for which a P&I
Advance was previously made for a prior Distribution Date; and
(e) the principal portion of all P&I Advances made in respect
of the Mortgage Loans and REO Loans for such Distribution Date.
"Principal Prepayment": Any payment of principal made by the
Borrower 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.
"Proposed Plan": As defined in Section 3.17(a).
"Prospectus Supplement": That certain prospectus supplement
dated December 23, 1998, relating to the Registered Certificates, that is a
supplement to the Base Prospectus.
"PTCE": As defined in Section 5.02(c).
"PTE": As defined in Section 5.02(c).
"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
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unpaid interest (excluding, in the case of an ARD 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 CREI or SBRC or any
Affiliate of either of them pursuant to Section 2.03, all accrued and unpaid
Advance Interest in respect of related Advances and (without duplication of the
amounts described in the immediately preceding clause (b)) all other
unreimbursed costs and expenses incurred by the Trust in connection with such
repurchase. 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 an ARD 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 CREI or SBRC or
any Affiliate of either them pursuant to Section 2.03, all accrued and unpaid
Advance Interest in respect of related Advances and (without duplication of the
amounts described in the immediately preceding clause (b)) all other
unreimbursed costs and expenses incurred by the Trust in connection with such
repurchase. The Purchase Price of any Mortgage Loan or REO Property is intended
to include, without limitation, principal and interest previously advanced with
respect thereto and not previously reimbursed.
"Qualified Appraiser": In connection with the appraisal of
any Mortgaged Property or REO Property, an Independent appraiser, who is a
member in good standing of the Appraisal Institute, with at least five years of
experience in respect of the relevant geographic location and property type.
"Qualified Institutional Buyer": A "qualified institutional
buyer" within the meaning of Rule 144A under the Securities Act.
"Qualified Insurer": An insurance company or security or
bonding company qualified to write the related Insurance Policy in the relevant
jurisdiction.
"Rated Final Distribution Date": The Distribution Date in
November 2031.
"Rating Agency": Each of Moody's and S&P.
"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
Default Interest and, in the case of an ARD Loan after its Anticipated
Repayment Date, Additional Interest) on such Mortgage Loan or any REO Loan, as
the case may be (without taking into account the amounts described in subclause
(iv) of this sentence), 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,
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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, insolvency or similar proceeding involving the
related Borrower 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 or Additional 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, insolvency or similar proceeding involving the
related Borrower 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 successive Scheduled P&I Payment due thereon. Each such
Realized Loss shall be deemed to have been incurred on the Due Date for each
affected Scheduled P&I 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": Collectively, 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.
"Release Date": As defined in Section 3.20(g).
"REMIC": A "real estate mortgage investment conduit" as
defined in Section 860D of the Code.
"REMIC Administrator": LaSalle National Bank, in its capacity
as REMIC administrator hereunder, its successor in interest, or any successor
REMIC administrator appointed as herein provided.
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"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 (inclusive of Additional Interest collected in respect of the
ARD Loans after their respective Anticipated Repayment Dates and exclusive of
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 Sellers; (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 Collection Account, the Interest
Reserve Account and the REO Account (if established).
"REMIC I Regular Interest": Any of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a "regular interest" in REMIC I. Each REMIC I Regular Interest
shall accrue interest at the related REMIC I Remittance Rate in effect from
time to time and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance.
"REMIC I Remittance Rate": With respect to any Distribution
Date: (a) in the case of any REMIC I Regular Interest that corresponds to a
Mortgage Loan (or any successor REO Loan) that, as of the Closing Date,
provided for the accrual of interest on a 30/360 Basis, a per annum rate equal
to the Net Mortgage Rate in effect for such Mortgage Loan as of the Closing
Date; and (b) in the case of any REMIC I Regular Interest that corresponds to a
Mortgage Loan (or any successor REO Loan) that, as of the Closing Date,
provided for the accrual of interest on an Actual/360 Basis, a per annum rate
equal to a fraction (expressed as a percentage), the numerator of which is
(subject to adjustment as provided below) the product of twelve (12) times the
aggregate amount of interest that would have accrued during the related
Interest Accrual Period on the Uncertificated Principal Balance of such REMIC I
Regular Interest outstanding immediately prior to such Distribution Date if
such interest were calculated on an Actual/360 Basis at the Net Mortgage Rate
in effect for the related Mortgage Loan as of the Closing Date, and the
denominator of which is the Uncertificated Principal Balance of such REMIC I
Regular Interest outstanding immediately prior to such Distribution Date;
provided that, in the case of a REMIC I Regular Interest that corresponds to an
Interest Reserve Loan, if the subject Distribution Date occurs during February
of any year or during January of any year other than a leap year, the amount of
the numerator for the fraction described in clause (b) above shall be reduced
by the related Interest Reserve Amount to be deposited in the Interest Reserve
Account on the related Master Servicer Remittance Date and, if the subject
Distribution Date occurs during March of any year, the amount of the numerator
for the fraction described in clause (b) above shall be increased by any
related Interest Reserve Amounts transferred from the Interest Reserve Account
to the Distribution Account for distribution on such Distribution Date in
March; and provided, further, that, in the case of a REMIC I Regular Interest
that corresponds to a Mortgage Loan with a Stated Maturity Date that occurs
other than on the first day of the relevant calendar month, the REMIC I
Remittance Rate in respect of such REMIC I Regular Interest for the
Distribution Date that relates to the Collection Period in which such Stated
Maturity Date occurs shall equal the product of (x) the REMIC I Remittance Rate
that would otherwise have
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been in effect for such REMIC I Regular Interest with respect to such
Distribution Date without regard to this proviso, multiplied by (y) a fraction
(expressed as a percentage), the numerator of which shall be the number of days
in the applicable calendar month up to but not including such Stated Maturity
Date, and the denominator of which shall be 30.
"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 Regular Interest": Any of the 12 separate
non-certificated beneficial ownership interests in REMIC II issued hereunder
and designated as a "regular interest" in REMIC II. Each REMIC II Regular
Interest shall accrue interest at the REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto. The designations for the respective REMIC II Regular Interests are set
forth in the Preliminary Statement hereto.
"REMIC II Remittance Rate": With respect to each REMIC II
Regular Interest, for any Distribution Date, the Weighted Average REMIC I
Remittance Rate for such Distribution Date.
"REMIC III": The segregated pool of assets consisting of all
of the REMIC II Regular Interests, with respect to which a separate REMIC
election is to be made.
"REMIC III Certificate": Any Certificate, other than a Class
R-I or Class R-II Certificate.
"REMIC III Regular Certificate": Any REMIC III Certificate,
other than a Class R- III 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(b) on
behalf of the Trustee in trust for the Certificateholders, which shall be
entitled "Allied Capital Corporation [or the name of any successor Special
Servicer], as Special Servicer, in trust for registered holders of Mortgage
Capital Funding, Inc., Multifamily/Commercial Mortgage Pass-Through
Certificates, Series 1998-MC3".
"REO Acquisition": The acquisition of any REO Property
pursuant to Section 3.09.
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"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 the 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 P&I 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 Scheduled P&I Payments (other than
any Balloon Payment, except to the extent it constitutes part of any related
Assumed P&I Payments), Assumed P&I 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, the Special Servicer, the Trustee and/or
the Fiscal Agent in respect of such Advances, shall continue to be payable or
reimbursable to the Master Servicer, the Special Servicer, the Trustee and/or
the 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 Trust 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 G-4 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 REO Revenues collected with respect to such 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 such REO Property based on the most recent Appraisal or
other valuation thereof available to the Master Servicer as of such
Determination Date (including any valuation prepared internally by the Special
Servicer).
"REO Tax": As defined in Section 3.17(a).
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"Representing Party": As defined in Section 2.05(c).
"Request for Release": A request for release signed by a
Servicing Officer of, as applicable, the Master Servicer or Special Servicer in
the form of Exhibit E attached hereto.
"Required Appraisal Loan": As defined in Section 3.19(b).
"Required Claims-Paying Ratings": With respect to any
insurance carrier, a claims-paying ability (or equivalent) rating of "A2" or
better from Moody's and a claims-paying ability (or equivalent) rating of "A"
or better from S&P; unless, in the case of either Rating Agency, such Rating
Agency 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 or withdrawal 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 Borrower 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, Class R-II or Class
R-III Certificate.
"Responsible Officer": When used with respect to the Trustee,
any officer assigned to the Asset-Backed Securities Trust Services Group, any
vice president, any assistant vice president, any assistant secretary, any
assistant treasurer, or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers to
whom a particular matter is referred by the Trustee because of such officer's
knowledge of and familiarity with the particular subject. When used with
respect to the Fiscal Agent or any Certificate Registrar (other than the
Trustee), any officer or assistant officer thereof.
"Responsible Party": With respect to any Document Defect or
alleged Document Defect or any breach or alleged breach of a representation or
warranty set forth in Section 2.05(c), either: (i) CREI, 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 CREI is
the Representing Party; or (ii) SBRC, if such Document Defect or alleged
Document Defect relates to a SBRC Mortgage Loan or if such breach or alleged
breach is of a representation or warranty as to which SBRC is the Representing
Party.
"S&P": Standard & Poor's Ratings Services, a division of the
McGraw-Hill Companies, Inc. or its successor in interest. If neither such
rating agency nor any successor remains in existence, "S&P" 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
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given to the Trustee, the Fiscal Agent, the Master Servicer, the Special
Servicer and the REMIC Administrator, and specific ratings of Standard & Poor's
Ratings Services, a division of the McGraw- Hill Companies, Inc. herein
referenced shall be deemed to refer to the equivalent ratings of the party so
designated.
"SBRC": Salomon Brothers Realty Corp. or its successor in
interest.
"SBRC Mortgage Loan": Any of the Mortgage Loans which are the
subject of the SBRC Mortgage Loan Purchase Agreement and as to which "SBRC" is
identified on the Mortgage Loan Schedule under the heading "Loan Contributor".
"SBRC Mortgage Loan Purchase Agreement": That certain
mortgage loan purchase agreement dated December 23, 1998 between SBRC and the
Sponsor.
"Scheduled P&I 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 an ARD 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
(in the absence of default) actually payable by the related Borrower 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 Borrower 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 Scheduled P&I
Payment due in respect of any ARD Loan after its Anticipated Repayment Date
shall not include Additional Interest.
"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 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 of the Class Principal Balances of
the Class A-1 and Class A-2 Certificates outstanding immediately prior to such
Distribution Date equals or 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 all Distributable Certificate Interest to be made on the
Senior Certificates on such Distribution Date have been so made.
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"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 the 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 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
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 similar mortgage loans or assets, as
applicable, for other third parties (giving due consideration to customary and
usual standards of practice of prudent
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institutional commercial mortgage lenders) or generally services and
administers similar mortgage loans or assets, as applicable, held in its own
portfolio, whichever servicing procedure is of a higher standard; (b) with a
view to the timely collection of all Scheduled P&I Payments under the Mortgage
Loans or, if a Mortgage Loan comes into and continues in default and if, in the
good faith and reasonable judgment of the Special Servicer, no satisfactory
arrangements can be made for the collection of the delinquent payments, the
maximization of the recovery on such Mortgage Loan to the Certificateholders
(as a collective whole) on a present value basis (the relevant discounting of
anticipated collections that will be distributable to Certificateholders to be
performed at the related Net Mortgage Rate); and (c) without regard to: (i) any
relationship that the Master Servicer or the Special Servicer, as the case may
be, or any Affiliate thereof may have with any related Borrower or any other
party to this Agreement; (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; (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 generally or with respect to any particular transaction; (vi) the
management and/or servicing of mortgage loan portfolios for other third
parties; and (vii) any indemnity or repurchase obligation on the part of the
Master Servicer or the Special Servicer, as the case may be, or any of their
respective Affiliates with respect to the Mortgage Loans.
"Servicing Transfer Event": With respect to any Mortgage
Loan, the occurrence of any of the events described in clauses (a) through (h)
of the definition of "Specially Serviced Mortgage Loan".
"Single Certificate": For purposes of Section 4.02(a), a
hypothetical Certificate of any Class of REMIC III Regular Certificates
evidencing a $1,000 denomination or, in the case of a Class X Certificate, a
100% Percentage Interest in the related Class.
"Sole Certificateholder": Any Holder of 100% of the
Certificates.
"Special Servicer": Allied Capital Corporation, in its
capacity as special servicer, 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 and the date and reason for transfer to
the Special Servicer, substantially in the form of Exhibit G-5 attached hereto.
"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).
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"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 failure of the related Borrower to make when due any
Balloon Payment, which failure continues, or the Master
Servicer determines in its good faith and reasonable judgment
will continue, unremedied for thirty (30) days;
(b) the failure of the related Borrower to make when due any
Scheduled P&I Payment (other than a Balloon Payment) or any
other payment required under the related Mortgage Note or the
related Mortgage, which failure continues, or the Master
Servicer determines in its good faith and reasonable judgment
will continue, unremedied for sixty (60) days;
(c) the determination by the Master Servicer in its good faith
and reasonable judgment that a default in the making of a
Scheduled P&I Payment (including a Balloon Payment) or any
other payment required under the related Mortgage Note or the
related Mortgage is likely to occur within thirty (30) days
and is likely to remain unremedied for at least sixty (60)
days or, in the case of a Balloon Payment, for at least
thirty (30) days;
(d) any default under the related loan documents, other than a
payment default, that may, in the Master Servicer's good
faith and reasonable judgment, materially impair the value of
the related Mortgaged Property as security for the Mortgage
Loan or otherwise materially and adversely affect the
interests of Certificateholders, which default continues
unremedied for the applicable cure period under the terms of
the Mortgage Loan (or, if no cure period is specified, sixty
(60) days);
(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
Borrower and such decree or order shall have remained in
force undischarged or unstayed for a period of sixty (60)
days;
(f) the related Borrower 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 Borrower or of
or relating to all or substantially all of its property;
(g) the related Borrower 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
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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 or Properties;
provided that, a Mortgage Loan will cease to be a Specially Serviced Mortgage
Loan, when a Liquidation Event has occurred with respect to 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 Borrower has made three
consecutive full and timely Scheduled P&I 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 Borrower or by reason of a
modification, waiver or amendment granted or agreed to by the
Master Servicer or 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.
"Startup Day": With respect to each of REMIC I, REMIC II and
REMIC III, 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 Borrower 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 an ARD 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,
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that is permanently reduced on each Distribution Date (to not less than zero)
by (i) that portion, if any, of the Principal Distribution Amount for such
Distribution Date that is attributable to such Mortgage Loan (or such successor
REO Loan), and (ii) the principal portion of any Realized Loss incurred in
respect of such Mortgage Loan (or such successor REO Loan) during the related
Collection Period. Notwithstanding the foregoing, if a Liquidation Event occurs
in respect of any Mortgage Loan or REO Property, then the "Stated Principal
Balance" of such Mortgage Loan or of the related REO Loan, as the case may be,
shall be zero commencing as of the Distribution Date in the Collection Period
next following the Collection Period in which such Liquidation Event occurred.
"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, REMIC
II and REMIC III, 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, REMIC II and REMIC III 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, REMIC II and REMIC III due to its
classification as a REMIC under the REMIC Provisions, together with any and all
other information, reports or returns that may be required to be furnished to
the Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal law or
Applicable State Law.
"Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment of any Ownership Interest in a
Certificate.
"Transferee": Any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.
"Transferor": Any Person who is disposing by Transfer any
Ownership Interest in a Certificate.
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"Trust": The common law trust created hereby.
"Trust Fund": Collectively, all of the assets of REMIC I,
REMIC II and REMIC III.
"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 Interest Accrual Basis as is
applicable to the accrual of interest on such Mortgage Loan and accrued during
the related Interest Accrual Period on the Stated Principal Balance of such
Mortgage Loan or REO Loan, as the case may be, outstanding immediately prior to
such Distribution Date.
"Trustee Fee Rate": A rate of 0.0038% 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 a 30/360 Basis) 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; and, with respect to any REMIC II Regular
Interest, for any Distribution Date, one month's interest (calculated on a
30/360 Basis) at the REMIC II Remittance Rate applicable to such REMIC II
Regular Interest for such Distribution Date, accrued on the Uncertificated
Principal Balance of such REMIC II Regular Interest outstanding immediately
prior to such Distribution Date. The Uncertificated Accrued Interest in respect
of any REMIC I Regular Interest or REMIC II Regular Interest for any
Distribution Date shall be deemed to have accrued during the related 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 that portion, if any, of the Net
Aggregate Prepayment Interest Shortfall, if any, for such Distribution Date
that is attributable to the Mortgage Loan that corresponds to such REMIC I
Regular Interest; and, with respect to any REMIC II Regular Interest for any
Distribution Date, the Uncertificated Accrued Interest in respect of such REMIC
II Regular Interest 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 REMIC II Regular Interest as provided
below. The portion, if
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any, of the Net Aggregate Prepayment Interest Shortfall for any Distribution
Date that is allocated to any Class of Principal Balance Certificates in
accordance with the definition of "Distributable Certificate Interest" shall be
deemed to have first been allocated to the Corresponding REMIC II Regular
Interest. In addition, the portion, if any, of the Net Aggregate Prepayment
Interest Shortfall for any Distribution Date that is allocated to the Class X
Certificates in accordance with the definition of "Distributable Certificate
Interest" shall be deemed to have first been allocated to all the REMIC II
Regular Interests up to an amount equal to, and on a pro rata basis in
accordance with, the Class X Portion of the Uncertificated Accrued Certificate
Interest in respect of each such REMIC II Regular Interest for such
Distribution Date.
"Uncertificated Principal Balance": The principal amount of
any REMIC I Regular Interest or REMIC II Regular Interest outstanding as of any
date of determination. As of the Closing Date, the Uncertificated Principal
Balance of each REMIC I Regular Interest shall equal the Cut-off Date Balance
of the related Mortgage Loan, and the Uncertificated Principal Balance of each
REMIC II 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 II
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). 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(e)
and, if and to the extent appropriate, shall be further permanently reduced on
such Distribution Date as provided in Section 4.05(g).
"Underwriter": Salomon Smith Barney Inc.
"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.
"Voting Rights": The voting rights evidenced by the
Certificates. 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 Principal Balance Certificates in proportion to the respective Class
Principal Balances of their Certificates, 5.0% of the Voting Rights shall be
allocated to the Holders of the Class X Certificates, and 1/3 of 1.0% of the
Voting Rights shall be allocated to the Holders of each Class of Residual
Certificates. Voting Rights allocated to a Class of Certificateholders shall
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be allocated among such Certificateholders in proportion to the Percentage
Interests evidenced by their respective Certificates.
"Watchlist": A report containing substantially the
information set forth in Exhibit G-8 attached hereto, including, among other
things, any Mortgage Loan that, as of the Determination Date immediately
preceding the preparation of such report, had a Debt Service Coverage Ratio of
less than 1.0x or, in the Master Servicer's good faith and reasonable judgment,
was otherwise in jeopardy of becoming a Specially Serviced Mortgage Loan.
"Weighted Average Adjusted REMIC II Remittance Rate": With
respect to any Distribution Date, the weighted average of the respective
Adjusted REMIC II Remittance Rates applicable to the REMIC II Regular Interests
for such Distribution Date, weighted on the basis of the respective
Uncertificated Principal Balances of such REMIC II Regular Interests
outstanding immediately prior to such Distribution Date.
"Weighted Average REMIC I Remittance Rate": With respect to
any Distribution Date, the weighted average of the respective REMIC I
Remittance Rates applicable to the REMIC I Regular Interests for such
Distribution Date, weighted on the basis of the respective Uncertificated
Principal Balances of such REMIC I Regular Interests outstanding immediately
prior to such Distribution Date.
"Weighted Average REMIC II Remittance Rate": With respect to
any Distribution Date, the weighted average of the respective REMIC II
Remittance Rates applicable to the REMIC II Regular Interests for such
Distribution Date, weighted on the basis of the respective Uncertificated
Principal Balances of such REMIC II Regular Interests 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
second 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%.
"Year 2000 Ready": With respect to any Person, the possession
(by licensing or otherwise) by such Person of computer systems, including
hardware and software, that are able to correctly interpret and process data
involving dates subsequent to December 31, 1999.
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 Borrowers,
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
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particular individual Mortgage Loan (whether or not such Mortgage Loan is a
Cross-Collateralized Mortgage Loan) in the form of payments from Borrowers,
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 an ARD
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 Scheduled P&I Payment from any
Borrower, 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 and, in the case of an ARD Loan after its Anticipated
Repayment Date, accrued and unpaid Additional Interest; 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 an ARD
Loan after its Anticipated Repayment Date, as a recovery of accrued and unpaid
Additional Interest on such ARD 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 Borrower
in a manner consistent with the foregoing and shall maintain accurate records
of how all such payments and proceeds are actually applied and are applied for
purposes of this Agreement.
(b) Collections in respect of each REO Property (exclusive of
amounts to be applied to the payment of the costs of operating, managing,
maintaining and disposing of such REO Property) shall be applied for purposes
of this Agreement (including, without limitation for purposes of determining
distributions on the Certificates pursuant to Article IV and additional
compensation payable to the Master Servicer, the Special Servicer and any
Sub-Servicers) as follows: first, as a recovery of any related unreimbursed
Servicing Advances and, if applicable, unpaid Liquidation Expenses; second, as
a recovery of accrued and unpaid interest (excluding, in the case of an REO
Loan that relates to an ARD 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, but excluding, in the case of
an ARD Loan after its Anticipated Repayment Date, accrued and unpaid Additional
Interest) deemed to be due and owing in respect of the related REO
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Loan; and, sixth, in the case of an REO Loan that relates to an ARD 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 on, as well
as allocations of Realized Losses and Additional Trust Fund Expenses to, the
Certificates pursuant to this Agreement, Additional Interest on an ARD 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 ARD 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 Mortgage Loan Purchase Agreements, the Mortgage Loan
Sellers, concurrently with their 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 Sellers, 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 Sellers; (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 Collection Account,
the Interest Reserve 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 Sellers 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 Sellers 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 Sellers to the Trustee to secure a debt or other
obligation of the Sponsor or the Mortgage Loan Sellers, as the case may be.
However, in the event that the Mortgage Loans (or any sub-group thereof) are
held to be property of the Sponsor or either of the Mortgage Loan Sellers, 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
Sellers to the Trustee, for the benefit of the Certificateholders, of a
security interest in all of their respective right (including the power to
convey title thereto), title and interest, whether now owned or hereafter
acquired, in and to (A) the Mortgage Notes, the Mortgages, any related
insurance policies and all other documents in the related Mortgage Files, (B)
all amounts payable to the holders of the Mortgage Loans in
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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 Collection Account, the Distribution Account, the
Interest Reserve 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
Sellers 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 each Mortgage Loan Seller's assignment
pursuant to subsection (b) above, (i) CREI shall deliver to and deposit with,
or cause to be delivered to and deposited with, the Trustee or a Custodian
appointed thereby on or before the Closing Date, with a copy to the Master
Servicer and the Special Servicer within a reasonable period (but in no event
more than sixty (60) days) following the Closing Date, the Mortgage File for
each CREI Mortgage Loan and (ii) SBRC shall deliver to and deposit with, or
cause to be delivered to and deposited with, the Trustee or a Custodian
appointed thereby, on or before the Closing Date, with a copy to the Master
Servicer and the Special Servicer within a reasonable period (but in no event
more than sixty (60) days) following the Closing Date, the Mortgage File for
each SBRC Mortgage Loan. If either Mortgage Loan Seller is unable to deliver or
cause the delivery of any original Mortgage Note required to be delivered
hereby, 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 either Mortgage Loan Seller
cannot so deliver, or cause to be delivered, as to any of its Mortgage Loans,
the original or a copy of any of the documents and/or instruments referred to
in clauses (ii), (iv), (viii), (xi)(A) and (xii) of the definition of "Mortgage
File" required to be delivered hereby, 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
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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
related Mortgage Loan Seller 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 related Mortgage Loan
Seller has provided the Trustee with evidence of such submission for recording
or filing, as the case may be, or has certified in writing to the Trustee as to
the occurrence of such submission for recording or filing, as the case may be,
and is, as certified in writing 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 either Mortgage Loan Seller cannot or does not so
deliver, or cause to be delivered, as to any of its Mortgage Loans, 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" required to be
delivered hereby, 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 related Mortgage Loan
Seller 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 related Mortgage Loan
Seller has provided the Trustee with evidence of such submission for recording
or filing, as the case may be, or has certified in writing to the Trustee as to
the occurrence of such submission for recording or filing, as the case may be,
and is, as certified in writing 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 either Mortgage Loan Seller cannot so deliver, or
cause to be delivered, as to any of its Mortgage Loans, the original or a copy
of the related lender's title insurance policy referred to in clause (ix) of
the definition of "Mortgage File" required to be delivered hereby, solely
because such policy has not yet been issued, the delivery requirements of this
Section 2.01(c) shall be deemed to be satisfied as to such missing item, and
such missing item shall be deemed to have been included in the related Mortgage
File, provided that the related Mortgage Loan Seller 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 related Mortgage Loan Seller 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
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"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 either Mortgage Loan Seller 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 be responsible for completing the related endorsement
or assignment in the name of the Trustee (in such capacity), and the Trustee
shall be entitled to charge the related Mortgage Loan Seller for any reasonable
expense incurred by it in so doing.
(d) To the extent not previously delivered for recording by
the related Mortgage Loan Seller, the Trustee, at the expense of the related
Mortgage Loan Seller, shall, as to each of its Mortgage Loans, promptly (and in
any event within 90 days of the Closing Date or the date received by it,
whichever is later) 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-2 and
UCC-3, if any, referred to in clause (xi)(B) of the definition of "Mortgage
File", that is delivered to it. Each such assignment shall reflect that it
should be returned by the public recording office to the Trustee or its
designee following recording, and each such UCC-2 and UCC-3 shall reflect that
the file copy thereof should be returned to the Trustee or its designee
following filing. At such time as such assignments, 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 and the Special Servicer. If any such document
or instrument is lost or returned unrecorded or unfiled, as the case may be,
because of a defect therein, CREI, in the case of a CREI Mortgage Loan, and
SBRC, in the case of a SBRC 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 shall promptly thereafter deliver the
substitute or corrected document to the Trustee. The Trustee shall thereupon
submit the substitute or corrected document, or cause such to be submitted, for
recording or filing, as appropriate, at the expense of the related Mortgage
Loan Seller.
(e) All documents and records in the possession of or under
the control of either Mortgage Loan Seller and relating to its 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 or under the control of either Mortgage Loan Seller with respect to
its Mortgage Loans, shall be delivered or caused to be delivered by such
Mortgage Loan Seller to the Master Servicer (with copies of such documents to
the Special Servicer), within ten (10) days of the Closing Date. All such
documents and funds shall be retained by the Master Servicer on behalf of the
Trustee in trust for the benefit of the Certificateholders.
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(f) CREI shall, as to each CREI Mortgage Loan that is secured
(in whole or in part) by the interest of the related Borrower under a Ground
Lease, and SBRC shall, as to each SBRC Mortgage Loan that is secured (in whole
or in part) by the interest of the related Borrower under a Ground Lease, in
each case at its own expense, promptly (and in any event within forty-five (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 Master Servicer on behalf of 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
(i) any exceptions noted on the Schedule of Exceptions to Mortgage File
Delivery attached hereto as Schedule III, (ii) the provisions of Section 2.01
and (iii) 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 (in such capacity), 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 which have been delivered to the Trustee, 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
Mortgage Loan Sellers 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 ninety (90) days of the Closing Date (or, in the
case of any Mortgage Loan as to which a Servicing Transfer Event has occurred
during such 90-day period of which event the Trustee has notice, within the
shorter of ninety (90) days of the Closing Date and five (5) 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 Sellers 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 and the Mortgage Loan Sellers that as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full), and except as specifically identified in any exception
report annexed to such certification, (i) all documents specified in clauses
(i) through (iii), (ix) and, if the Mortgage Loan Schedule specifies that the
related Borrower 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 related Mortgage Loan Seller
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 (iv) and (vi)(B) of the definition of
"Mortgage Loan Schedule" is correct.
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(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 every 90 days until the earlier
of (i) the second anniversary of the Closing Date and (ii) the date on which
all exceptions are addressed, the Trustee shall, subject to Section 2.02(d),
certify in writing to each of the Sponsor, the Master Servicer, the Special
Servicer and the Mortgage Loan Sellers 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
Borrower 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 related Mortgage Loan Seller 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 related
Mortgage Loan Seller, 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 (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 (xvi) of the
definition of "Mortgage File" exist (except to the extent that the Trustee
certifies as to its possession of any such document) or are required to be
delivered by the related Mortgage Loan Seller 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.
In performing the reviews contemplated by subsections (a),
(b) and (c) above, the Trustee may conclusively rely on the related Mortgage
Loan Seller as to the purported genuineness of any such document and any
signature thereon. It is understood that the scope of the Trustee's review of
the Mortgage Files is limited to the matters specifically set forth in
subsections (a), (b) and (c) above.
(e) If, in the process of reviewing the documents delivered
or caused to be delivered by the Mortgage Loan Sellers 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
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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, CREI, if a CREI Mortgage Loan is affected,
or SBRC, if a SBRC 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 Sellers' Repurchase of Mortgage
Loans for Document Defects and Certain Breaches
of Representations and Warranties.
(a) Within ninety (90) 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
CREI, cause an Affiliate to purchase) the affected Mortgage Loan at the
applicable Purchase Price by deposit of such Purchase Price into the Collection
Account and delivery to the Trustee of a written certification that such
deposit has been made; provided that, if the Responsible Party certifies to the
Trustee that (i) such Document Defect or breach is not reasonably susceptible
of correction or cure within such 90-day period and is susceptible of
correction or cure within an additional 90-day period, (ii) such Document
Defect or breach does not cause the related Mortgage Loan to fail to be a
"qualified mortgage" or a "qualified replacement mortgage" within the meaning
of Section 860G of the Code, and (iii) the Responsible Party is diligently
prosecuting the correction of such Document Defect or breach , then such
Responsible Party shall have an additional period of ninety (90) days within
which to correct or cure such Document Defect or breach, or, if ultimately
unable to do so, to effect such repurchase. Notwithstanding the immediately
preceding sentence, within ninety (90) days of the earlier of discovery or
receipt of notice by any party hereto 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 Collection 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
pursuant to 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 all Escrow Payments and Reserve Funds
pertaining to such Mortgage Loan possessed by it (or any Custodian or
Sub-Servicer on its behalf), and each document that constitutes a part of the
Mortgage File that was endorsed or assigned to the Trustee shall be endorsed or
assigned, as the case may be, to or at the direction of the Responsible Party,
in the same manner. The form, sufficiency and expense of all such instruments
and certificates shall be the responsibility of the Responsible Party.
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(c) This Section 2.03 provides the sole remedies available to
the Certificateholders, or to the Trustee on behalf of the Certificateholders,
respecting any Document Defect or any breach of any representation or warranty
set forth in Section 2.05(c) hereof. If the Responsible Party defaults on its
obligations to repurchase any Mortgage Loan in accordance with Section 2.03(a)
hereof, or disputes its obligation to repurchase any Mortgage Loan in
accordance with any such provision, the Trustee shall promptly notify the
Certificateholders and, subject to Sections 8.01 and 8.02 and its right to
reimbursement pursuant to Section 8.05(b), shall take such action as may be
appropriate to enforce such payment or performance, including, without
limitation, the institution and prosecution of appropriate proceedings. If it
is judicially determined or subsequently agreed that the Responsible Party is
required to repurchase such Mortgage Loan under Section 2.03(a) 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 (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,
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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.
(viii) No consent, approval, authorization or order of any
state or federal court or governmental agency or body is required for
the consummation by the Sponsor of the transactions contemplated
herein, except for those consents, approvals, authorizations or orders
that previously have been obtained.
(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 Sellers.
(a) CREI hereby represents and warrants to the other parties
hereto and for the benefit of the Certificateholders, as of the Closing Date,
that:
(i) CREI 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 CREI,
and the performance and compliance with the terms of this Agreement by
CREI, will not violate CREI's certificate of incorporation and by-laws
or constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or result in the
breach of, any material agreement or other instrument to which it is a
party or which is applicable to it or any of its assets.
(iii) CREI 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 CREI, enforceable against CREI 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) CREI 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 CREI's good faith and reasonable
judgment, is likely to affect materially and adversely either the
ability of CREI to perform its obligations under this Agreement or the
financial condition of CREI.
(vi) No litigation is pending or, to the best of CREI's
knowledge, threatened against CREI which would prohibit CREI from
entering into this Agreement or, in CREI's good faith and reasonable
judgment, is likely to materially and adversely affect either the
ability of CREI to perform its obligations under this Agreement or the
financial condition of CREI.
(vii) No consent, approval, authorization or order of any
state or federal court or governmental agency or body is required for
the consummation by CREI of the transactions contemplated herein,
except for those consents, approvals, authorizations or orders that
previously have been obtained.
(b) SBRC hereby represents and warrants to the other parties
hereto and for the benefit of the Certificateholders, as of the Closing Date,
that:
(i) SBRC is a corporation organized, validly existing and in
good standing under the laws of the State of New York.
(ii) The execution and delivery of this Agreement by SBRC,
and the performance and compliance with the terms of this Agreement by
SBRC, will not violate SBRC's organizational documents or constitute a
default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, or result in the breach of, any
material agreement or other instrument to which it is a party or which
is applicable to it or any of its assets.
(iii) SBRC 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 SBRC,
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enforceable against SBRC 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) SBRC 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 SBRC's good faith and reasonable
judgment, is likely to affect materially and adversely either the
ability of SBRC to perform its obligations under this Agreement or the
financial condition of SBRC.
(vi) No litigation is pending or, to the best of SBRC's
knowledge, threatened against SBRC which would prohibit SBRC from
entering into this Agreement or, in SBRC's good faith and reasonable
judgment, is likely to materially and adversely affect either the
ability of SBRC to perform its obligations under this Agreement or the
financial condition of SBRC.
(vii) No consent, approval, authorization or order of any
state or federal court or governmental agency or body is required for
the consummation by SBRC of the transactions contemplated herein,
except for those consents, approvals, authorizations or orders that
previously have been obtained.
(c) CREI hereby represents and warrants (and, accordingly, is
the "Representing Party" in respect of each such representation and warranty so
made) with respect to (but solely with respect to) each CREI Mortgage Loan, and
SBRC hereby represents and warrants (and, accordingly, is the "Representing
Party" in respect of each such representation and warranty so made) with
respect to (but solely with respect to) each SBRC Mortgage Loan, in each case
to the other parties hereto and for the benefit of the Certificateholders, as
of the date hereinbelow specified or, if no such date is specified, as of the
Closing Date, that:
(i) Immediately prior to the transfer thereof by the
Representing Party to the Trustee, the Representing Party 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 the Master Servicer
or a Sub-Servicer to master service or primary service such Mortgage
Loan).
(ii) The Representing Party had full right and authority to
sell, assign and transfer such Mortgage Loan to the Trustee.
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(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, more than
thirty (30) days delinquent in respect of any Scheduled P&I Payment
required thereunder, without giving effect to any applicable grace
period, except in the case of the Mortgage Loan identified on the
Mortgage Loan Schedule by control number C019, as to which the
November 1998 payment was collected in early December 1998.
(v) Each Mortgage securing such Mortgage Loan constitutes a
valid first lien upon the Borrower's interest in 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, and other matters to which like
properties are commonly subject, which do not materially and adversely
affect the current use of the Mortgaged Property, the security
interest of the lender or the value of the Mortgaged Property, (C) the
rights of tenants (whether under ground leases or space 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) in the case of the Mortgage Loans identified on the Mortgage Loan
Schedule by control numbers C091, C092 , S112-S118 and S148, purchase
options for all or a part of the related Mortgaged Property, and (F)
if such Mortgage Loan is cross-collateralized with any other Mortgage
Loan, the lien of the Mortgage for such other Mortgage Loan (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 or value of
the related Mortgaged Property, or the current ability of such
Mortgaged Property to generate Net Cash Flow 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 such Mortgage Loan, its
successors and assigns, as to the first priority lien of the Mortgage
in the original principal amount of such Mortgage Loan after all
advances of principal, subject only to Permitted Encumbrances (or, if
a title insurance policy has not yet been issued in respect of any
Mortgage Loan, a policy meeting the foregoing description is evidenced
by a commitment for title insurance "marked-up" at the closing of such
Mortgage Loan). Such title policy (or, if it has yet to be issued, the
coverage to be provided thereby) is in full force and effect, all
premiums thereon have been paid and, to the Representing Party's
knowledge as of the Closing Date, no material claims have been made
thereunder and no claims have been paid thereunder (and the
Representing Party has not received notice of any material
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claims having been made or paid thereunder). No holder of the related
Mortgage has done, by act or omission, anything that would materially
impair the coverage under such title policy. Immediately following the
transfer and assignment of the related Mortgage Loan to the Trustee,
such title policy (or, if it has yet to be issued, the coverage to be
provided thereby) will inure to the benefit of the Trustee without the
consent of or notice to the insurer.
(vii) The Representing Party has not waived any material
default, breach, violation or event of acceleration existing under the
related Mortgage or Mortgage Note, except that certain post-closing
conditions or requirements may not have yet been completed.
(viii) There is no valid offset, defense or counterclaim to
such Mortgage Loan.
(ix) The Representing Party has not received actual notice
that (A) there is any proceeding pending or threatened for
condemnation affecting all or a material portion of the related
Mortgaged Property, except in the case of the Mortgage Loan identified
on the Mortgage Loan Schedule by control number S060 or (B) there is
any material damage at the related Mortgaged Property that materially
and adversely affects the value of such Mortgaged Property (except in
such case where an escrow of funds exists, or an effective insurance
policy provides coverage, sufficient to effect the necessary repairs
and maintenance).
(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 and Mortgage Note for such Mortgage Loan
and all other documents to which the related Borrower is a party and
which evidence or secure such and Mortgage Loan, are each the legal,
valid and binding obligations of the related Borrower (subject to any
non-recourse provisions 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, redemption, fraudulent conveyance, receivership,
moratorium or other laws relating to or affecting the rights of
creditors generally and by general principles of equity, and except
that certain provisions of such Mortgage Loan documents are or may be
unenforceable in whole or in part under applicable state or federal
laws, but the inclusion of such provision does not render any of the
Mortgage Loan documents invalid as a whole, and such Mortgage Loan
documents taken as a whole are enforceable to the extent necessary and
customary for the practical realization of the rights and benefits
afforded thereby.
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(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; no such insurance policy
provides that it may be canceled, endorsed, altered or reissued to
effect a change in coverage unless such insurer shall have first given
the mortgagee under such Mortgage Loan thirty (30) 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 related Borrower to maintain all such
insurance and, at the related Borrower's failure to do so, authorizes
the mortgagee under such Mortgage Loan to purchase such insurance at
the related Borrower's cost and expense and to seek reimbursement from
such Borrower; 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 (30) days prior to the
expiration date of such policy (or such other time period required by
law), the related Mortgage requires the Borrower 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
Borrower to maintain all such insurance and, upon the related
Borrower's failure to do so, authorizes the mortgagee to purchase such
insurance at the related Borrower's cost and expense and to seek
reimbursement from such Borrower. In addition, all insurance coverage
required under the related Mortgage is in full force and effect with
respect to the related Mortgaged Property, and if the related
Mortgaged Property is located in a federally designated special flood
hazard area, the related Borrower is required to maintain flood
insurance in respect thereof (exclusive of any parking lot or unused
or undeveloped portion thereof).
(xiv) One or more environmental site assessments (or an
update of a previously conducted assessment) were performed with
respect to the related Mortgaged Property within the 24-month period
prior to the Closing Date (except in the case of the ten (10) Mortgage
Loans identified on the Mortgage Loan Schedule by control numbers
S013, S015, S016, S017, S020, S021, S022, S041, S050 and S054, as to
which such assessments or updates were performed as of an earlier
date), and the Representing Party 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.
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(xvi) The terms of the Mortgage Note and Mortgage for such
Mortgage Loan have not been impaired, waived, altered or modified in
any material respect, except as specifically set forth in the related
Mortgage File.
(xvii) There are no delinquent taxes, ground rents, water
charges, sewer rents, or other similar outstanding charges affecting
the related Mortgaged Property that are not otherwise covered by an
escrow of funds sufficient to pay such charges.
(xviii) The interest of the Borrower in the related Mortgaged
Property consists of a fee simple and/or leasehold estate or 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 lender 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) 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 (except to the extent that it may constitute a legal
non-conforming use or structure or title insurance was provided with
respect thereto), except in the case of the Mortgage Loans identified
on the Mortgage Loan Schedule by control number S039 and S059; 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
it may constitute a legal non-conforming use or structure).
(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.
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(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 30 days' 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, except in the case of the Mortgage Loan identified on
the Mortgage Loan Schedule by control number S048; provided, however,
that this representation and warranty does not cover any default,
breach or event of acceleration that specifically pertains to any
matter otherwise covered by any other representation and warranty made
by the Representing Party in any of paragraphs (iv), (ix), (x),
(xiii), (xiv), (xvii), (xxi), (xxiii), (xxix), (xl) and (xlii) of this
Section 2.05(c); and provided, further, that certain post-closing
conditions or requirements may not have yet been completed.
(xxvi) If such Mortgage Loan is secured in whole or in part
by the interest of a Borrower under a Ground Lease and by the related
fee interest, such fee interest is encumbered by the related Mortgage,
and the related Mortgage does not by its terms provide that it will be
subordinated to the lien of any mortgage or any other lien upon such
fee interest.
(xxvii) Such Mortgage Loan does not contain any equity
participation by the lender, provide for any contingent or additional
interest in the form of participation in the cash flow of the related
Mortgaged Property or provide for the negative amortization of
interest.
(xxviii) No holder of such Mortgage Loan has, to the
Representing Party's knowledge, advanced funds or induced, solicited
or knowingly received any advance of funds from a party other than the
owner of the related Mortgaged Property, directly or indirectly, for
the payment of any amount required by the Mortgage Loan, except for
interest accruing from the date of origination of such Mortgage Loan
or the date of disbursement of the Mortgage Loan proceeds, whichever
is later, to the date which preceded by thirty (30) days the first Due
Date under the related Mortgage Note.
(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)(i) the related Borrower was in possession of all material
licenses, permits and authorizations required by applicable laws for
the ownership of the related Mortgaged Property as it was then
operated and (ii) with respect to each Mortgaged Property improved by
a hotel or health care facility, the related Borrower was in
possession of all material licenses, permits and authorizations
required by applicable law 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, except in the case of the Mortgage Loan identified on the
Mortgage Loan Schedule by control number C091.
(xxx) The related Mortgage or Mortgage Note, together with
applicable state law, contains customary and enforceable provisions
(subject to the exceptions set forth in clause (c)(xii) above) such as
to render the rights and remedies of the holders thereof adequate for
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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) 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.
(xxxiii) 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 an ARD 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.
(xxxiv) The origination, servicing and collection practices
used with respect to such Mortgage Loan have been in all material
respects legal and have met generally accepted servicing standards for
similar commercial and multifamily mortgage loans.
(xxxv) Any related Assignment of Leases (either as a separate
instrument or incorporated into the related Mortgage) creates in favor
of the holder, a valid, perfected and (subject to the exceptions set
forth in clause (c)(xii) above) 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
general principles 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 Borrower owns any interest in any payments due
under the related leases. The related Mortgage or such Assignment of
Leases provides for the appointment of a receiver for rents or allows
the lender to enter into possession to collect rent or provides for
rents to be paid directly to the mortgagee in the event of a default.
(xxxvi) 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
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such Mortgage Loan is outstanding and the Special Servicer on behalf
of the Trust is not pursuing a foreclosure action.
(xxxvii) If such Mortgage Loan is secured by a mortgage lien
on the applicable Borrower's leasehold interest in any real property
under a Ground Lease (but not by a mortgage lien on the fee interest
in such real property), 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 becomes the owner of such leasehold interest) that
extends not less than 10 years beyond the stated maturity of the
related Mortgage Loan, except in the case of the Mortgage Loan
identified on the Mortgage Loan Schedule by control number S005 (and,
to the extent cross- collateralized therewith, the Mortgage Loan
portfolio identified by control number S002).
(xxxviii) The related Mortgage and/or Mortgage Note provides
that the related Borrower shall be fully and personally liable for all
liabilities, costs, losses, damages, expenses or claims suffered or
incurred by the lender by reason of or in connection with and to the
extent of any material fraud or intentional and material
misrepresentation by the related Borrower in connection with such
Mortgage Loan.
(xxxix) If such Mortgage Loan is an ARD Loan, it commenced
amortizing on its initial scheduled Due Date (except in the case of
the ARD Loan identified on the Mortgage Loan Schedule by control
number S009, which provides for payments of interest only until the
Anticipated Repayment Date), and it provides that: (i) its Mortgage
Rate will increase by at least two (2) percentage points in connection
with the passage of its Anticipated Repayment Date; (ii) its
Anticipated Repayment Date is approximately six (6) to ten (10) years
following the origination of such Mortgage Loan; (iii) no later than
the related Anticipated Repayment Date, the related Borrower is
required (if it has not previously done so) to enter into a "lockbox
agreement" whereby all revenue from the related Mortgaged Property
shall be deposited directly into a designated account controlled by
the Master Servicer; (iv) 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 Scheduled P&I Payment payable therefrom, be net of
budgeted and discretionary (servicer approved) capital expenditures;
and (v) 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.
(xl) At origination of such Mortgage Loan, the related
Borrower was not, to the best of the Representing Party's actual
knowledge, a debtor in any state or federal bankruptcy or insolvency
proceeding.
(xli) If such Mortgage Loan is secured by the interest of the
related Borrower under a Ground Lease, then, except in the case of
the Mortgage Loan identified on the Mortgage Loan Schedule by control
number C003, as of the origination of such Mortgage Loan, such
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Ground Lease was in full force and effect and, to the Representing
Party's actual knowledge, no material default existed under such
Ground Lease.
(xlii) The Representing Party has no actual knowledge of any
pending litigation or other legal proceedings involving the related
Borrower 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 Cash Flow sufficient to service the Mortgage Loan.
(xliii) If such Mortgage Loan had a Cut-off Date Balance
greater than 3.0% of the Initial Pool Balance, the related Borrower
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.
(xliv) Except in cases where the related Mortgage Note or the
related Mortgage provide for (A) a release of a portion of the related
Mortgaged Property, which portion was not considered material for
purposes of underwriting the Mortgage Loan or (B) a release of a
portion of the related Mortgaged Property conditioned upon the
satisfaction of certain underwriting and legal requirements, property
performance requirements and/or the payment of a release price,
neither the related Mortgage Note nor the related Mortgage requires
the lender 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.
(xlv) 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.
(xlvi) With respect to any Mortgage Loan that is a Defeasance
Loan, the related Mortgage Note or Mortgage provides that the
Defeasance Option is not exercisable prior to a date that is at least
two (2) years following the Startup Day for each of REMIC I, REMIC II
and REMIC III and that the Borrower will not be liable for any
shortfalls from the Defeasance Collateral or otherwise become subject
to recourse liability with respect to the Defeasance Loan except to
the extent so liable prior to defeasance, and, further, contains no
provision that would result in a new Borrower on the Defeasance Loan
without the consent of the related lender (unless such new Borrower is
acquiring the Mortgaged Property that was the initial security for the
Defeasance Loan).
(xlvii) If the Mortgage in respect of any Mortgage Loan is a
deed of trust, (A) a trustee, duly qualified under applicable law to
serve as such, is properly designated and serving under such Mortgage,
and (B) except in connection with a trustee's sale after default by
the related Borrower, no fees or expenses are payable to such trustee
by the Representing Party or any subsequent mortgagee.
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(xlviii) The related Mortgage Note is not secured by any
collateral that is not included in the Trust Fund.
(xlix) If such Mortgage Loan is secured by the interest of
the related Borrower as a lessee under a Ground Lease covering all or
any material portion of the related Mortgaged Property, but not by the
related fee interest in such Mortgaged Property or portion thereof:
(A) Except in the case of the Mortgage Loans identified on the
Mortgage Loan Schedule by control numbers C003, C020, S005
(and, to the extent cross-collateralized therewith, the
Mortgage Loan portfolio identified by control number S002)
and S146, either (1) the related ground lessor has
subordinated its interest in the related Mortgaged Property
to the interest of the holder of the Mortgage Loan or (2)
the related ground lessor has granted the holder of the
Mortgage Loan notice of and the right to cure any default
or breach by the ground lessee (provided that the lender
under the Mortgage Loan has provided the ground lessor with
notice of its lien in accordance with the terms of such
Ground Lease). Upon the foreclosure of such Mortgage Loan
or acceptance of a deed in lieu thereof (provided that the
lender under the Mortgage Loan has provided the ground
lessor with notice of its lien in accordance with the terms
of such Ground Lease), the related Ground Lease is
assignable to the lender under such Mortgage Loan and its
assigns without the consent of the ground lessor thereunder
(or such consent, if required, cannot be unreasonably
withheld);
(B) Except in the case of the Mortgage Loan identified on the
Mortgage Loan Schedule by control number C003, such Ground
Lease or a memorandum thereof has been or will be duly
recorded; such Ground Lease, or an estoppel letter or other
agreement received by the lender under such Mortgage Loan
from the ground lessor, permits the interest of the lessee
thereunder to be encumbered by the related Mortgage; and
there has been no material change in the terms of such
Ground Lease since its recordation, with the exception of
written instruments which are a part of the related
Mortgage File;
(C) Such Ground Lease is not subject to any liens or
encumbrances superior to, or of equal priority with, the
related Mortgage, other than the related fee interest and
Permitted Encumbrances;
(D) Except in the case of the Mortgage Loan identified on the
Mortgage Loan Schedule by control number S146, such Ground
Lease, or an estoppel letter or other agreement received by
the lender under such Mortgage Loan from the ground lessor,
requires the ground lessor thereunder to give notice of any
default by the lessee to the lender
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under such Mortgage Loan (provided that such lender has
provided the ground lessor with notice of its lien in
accordance with the provisions of such Ground Lease), and
such Ground Lease, or an estoppel letter or other agreement
received by such lender from the ground lessor, further
provides that (provided that the lender under the Mortgage
Loan has provided the ground lessor with notice of its lien
in accordance with the terms of such Ground Lease) no
notice of termination given under such Ground Lease is
effective against the lender unless a copy has been
delivered to such lender in the manner described in such
Ground Lease;
(E) Except in the case of the Mortgage Loans identified on the
Mortgage Loan Schedule by control numbers C003, S005 (and,
to the extent cross-collateralized therewith, the Mortgage
Loan portfolio identified by control number S002), S034 and
S146, such Ground Lease, or an estoppel letter or other
agreement received by the lender from the ground lessor,
requires the ground lessor to enter into a new lease with
the lender under such Mortgage Loan upon termination of
such Ground Lease for any reason, including rejection of
such Ground Lease in a bankruptcy proceeding (provided that
the lender under the Mortgage Loan has provided the ground
lessor with notice of its lien in accordance with the terms
of such Ground Lease);
(F) Under the terms of such Ground Lease, or an estoppel letter
or other agreement received by the lender under the
Mortgage Loan from the ground lessor, and the related
Mortgage, taken together (provided that the lender under
the Mortgage Loan has provided the ground lessor with
notice of its lien in accordance with the terms of such
Ground Lease), any related insurance proceeds (other than
in respect of a total or substantially total loss or
taking) will be applied either (1) to the repair or
restoration of all or part of the related Mortgaged
Property, with the lender or a trustee appointed by it
having the right to hold and disburse such proceeds as the
repair or restoration progresses (except in such cases
where the Ground Lease contains a provision entitling
another party to hold and disburse such proceeds would not
be viewed as commercially unreasonable by a prudent
commercial mortgage lender), or (2) to the payment of the
outstanding principal balance of such Mortgage Loan
together with any accrued interest thereon; and
(G) Such Ground Lease does not impose any restrictions on
subletting which would be viewed as commercially
unreasonable by a prudent commercial mortgage lender.
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(l) Neither the related Mortgage Note nor the related
Mortgage contain provisions limiting the right or ability of the
Representing Party to assign, transfer and convey such documents.
(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 CREI makes no representations or warranties
with regard to the SBRC Mortgage Loans and that CREI has no obligation to cure
any breach of any representation or warranty made by SBRC with respect to any
SBRC Mortgage Loan, nor to repurchase any SBRC Mortgage Loan. It is further
understood and agreed that SBRC makes no representations or warranties with
regard to the CREI Mortgage Loans and that SBRC has no obligation to cure any
breach of any representation or warranty made by CREI with respect to any 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 Delaware, and the Master Servicer is in material compliance
with the laws of each State in which any Mortgaged Property is located
to the extent necessary to perform its obligations under this
Agreement.
(ii) The execution and delivery of this Agreement by the
Master Servicer, and the performance and compliance with the terms of
this Agreement by the Master Servicer, will not violate the Master
Servicer's organizational documents or constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a
default) under, or result in the breach of, any material agreement or
other instrument to which it is a party or which is applicable to it
or any of its assets, 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,
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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 respective officers or employees that is involved in the
servicing or administration of the Mortgage Loans has been refused
such coverage or insurance.
(viii) No consent, approval, authorization or order of any
state or federal court or governmental agency or body is required for
the consummation by the Master Servicer of the transactions
contemplated herein, expect for those consents, approvals,
authorizations or orders that previously have been obtained.
(ix) The Master Servicer is currently modifying its computer
systems and expects that, by July 31, 1999, it will be "Year 2000
Ready" to a degree that its operations and ability to perform its
obligations under this Agreement will not be materially and adversely
affected by the occurrence of calendar year 2000. The Master Servicer
is also assessing whether its key vendors and subcontractors will be
"Year 2000 Ready".
(x) The Master Servicer has examined each of the
Sub-Servicing Agreements that will be in effect on the Closing Date
with respect to the Mortgage Loans, and each such Sub-
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Servicing Agreement complies with the requirements of Section 3.22(a)
in all material respects.
(xi) The Master Servicing Fee is reasonable in the light of
the obligations and duties of the Master Servicer.
(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 corporation 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 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 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 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.
(viii) No consent, approval, authorization or order of any
state or federal court or governmental agency or body is required for
the consummation by the Special Servicer of the transactions
contemplated herein, expect for those consents, approvals,
authorizations or orders that previously have been obtained.
(ix) The Special Servicer is currently modifying its computer
systems and expects that, by July 31, 1999, it will be "Year 2000
Ready" to a degree that its operations and its ability to perform its
obligations under this Agreement will not be materially and adversely
affected by the occurrence of calendar year 2000. The Special Servicer
is also assessing whether its key vendors and subcontractors will be
"Year 2000 Ready".
(x) The Special Servicer has not retained any Sub-Servicers
as of the Closing Date.
(xi) The Special Servicing Fee, Workout Fee and Liquidation
Fee are reasonable compensation in light of the obligations and duties
of the Special Servicer.
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(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, partnership, bank, association or other type of organization.
SECTION 2.08. Representations and Warranties of the Trustee
and the REMIC Administrator.
(a) LaSalle National Bank, both in its capacity as Trustee
and in its capacity as REMIC Administrator (the "Bank"), hereby represents and
warrants to the other parties hereto and for the benefit of the
Certificateholders, as of the Closing Date, that:
(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.
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(v) The Bank is not in violation of, and its execution and
delivery of this Agreement and its performance and compliance with the
terms of this Agreement will not constitute a violation of, any law,
any order or decree of any court or arbiter, or any order, regulation
or demand of any federal, state or local governmental or regulatory
authority, which violation, in the Bank's good faith and reasonable
judgment, is likely to affect materially and adversely either the
ability of the Bank to perform its obligations under this Agreement or
the financial condition of the Bank.
(vi) No litigation is pending or, to the best of the Bank's
knowledge, threatened against the Bank which would prohibit the Bank
from entering into this Agreement or, in the Bank's good faith and
reasonable judgment, is likely to materially and adversely affect
either the ability of the Bank to perform its obligations under this
Agreement or the financial condition of the Bank.
(vii) No consent, approval, authorization or order of any
state or federal court or governmental agency or body is required for
the consummation by the Bank of the transactions contemplated herein,
expect for those consents, approvals, authorizations or orders that
previously have been obtained.
(viii) The Bank will use reasonable commercial efforts to cure (by
August 1999) any deficiencies with regard to the manipulation or
calculation of dates beyond December 31, 1999 in the internally
maintained computer software systems used by the Bank in the conduct
of its trust business which would materially and adversely affect its
ability to perform its obligations under this Agreement. In addition,
the Bank will use reasonable commercial efforts to obtain reasonable
assurances from each third party vendor of licensed computer software
systems used by the Bank in the conduct of its trust business that
such vendors shall use reasonable commercial efforts to cure any
deficiencies with regards to the manipulation or calculation of dates
beyond December 31, 1999 in such systems which would materially and
adversely affect the ability of the Bank to perform its obligations
under this Agreement.
(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.
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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 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.
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(vii) No consent, approval, authorization or order of any
state or federal court or governmental agency or body is required for
the consummation by the Fiscal Agent of the transactions contemplated
herein, expect for those consents, approvals, authorizations or orders
that previously have been obtained.
(viii) The Fiscal Agent will use reasonable commercial
efforts to cure (by August 1999) any deficiencies with regard to the
manipulation or calculation of dates beyond December 31, 1999 in the
internally maintained computer software systems used by the Fiscal
Agent in the conduct of its business which would materially and
adversely affect its ability to perform its obligations under this
Agreement. In addition, the Fiscal Agent will use reasonable
commercial efforts to obtain reasonable assurances from each third
party vendor of licensed computer software systems used by the Fiscal
Agent in the conduct of its business that such vendors shall use
reasonable commercial efforts to cure any deficiencies with regards to
the manipulation or calculation of dates beyond December 31, 1999 in
such systems which would materially and adversely affect the ability
of the Fiscal Agent to perform its obligations under this Agreement.
(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.
SECTION 2.10. Issuance of the Class R-I Certificates;
Creation of the REMIC I Regular Interests.
Concurrently with the assignment to the Trustee of the assets
included in REMIC I, and in exchange therefor, at the written 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.
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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 III
Certificates and the Class R-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 III Certificates and the Class R-II
Certificates.
SECTION 2.12. Issuance of the Class R-II Certificates;
Creation of the REMIC II Regular Interests.
Concurrently with the assignment to the Trustee of the assets
included in REMIC II, and in exchange therefor, at the written direction of the
Sponsor, the REMIC II 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-II Certificates in authorized denominations. The interests
evidenced by the Class R-II Certificates, together with the REMIC II Regular
Interests, constitute the entire beneficial ownership of REMIC II. The rights
of the Class R-II Certificateholders and REMIC III to receive distributions
from the proceeds of REMIC II in respect of the Class R-II Certificates and the
REMIC II Regular Interests, respectively, and all ownership interests of the
Class R-II Certificateholders and REMIC III in and to such distributions, shall
be as set forth in this Agreement.
SECTION 2.13. Conveyance of REMIC II Regular Interests;
Acceptance of REMIC III 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 II Regular
Interests to the Trustee for the benefit of the Holders of the REMIC III
Certificates. The Trustee acknowledges the assignment to it of the REMIC II
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 III Certificates.
SECTION 2.14. Issuance of the REMIC III Certificates.
Concurrently with the assignment to the Trustee of the REMIC
II Regular Interests, and in exchange therefor, at the written direction of the
Sponsor, the Trustee has executed, authenticated and delivered to or upon the
order of the Sponsor, the REMIC III Certificates in authorized denominations
evidencing the entire beneficial ownership of REMIC III. The rights of the
respective Classes of Holders of the REMIC III Certificates to receive
distributions from the proceeds of REMIC III in respect of their REMIC III
Certificates, and all ownership interests of the respective Classes of Holders
of the REMIC III 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 and other assets of the Trust
that it is obligated to service and administer pursuant to this Agreement on
behalf of the Trustee, and in the best interests and for the benefit of the
Certificateholders, in accordance with any and all applicable laws and the
terms of this Agreement 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 from the Special Servicer and,
based thereon, 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 other services with respect to
any Specially Serviced Mortgage Loans and REO Properties as are specifically
provided for herein; and provided, further, that the Special Servicer shall
render such services with respect to Mortgage Loans (in addition to the
Specially Serviced Mortgage Loans) 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, each of 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 ARD
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.
At least ninety (90) days prior to the maturity date of each
Balloon Mortgage Loan, the Master Servicer shall send a notice to the related
Borrower 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. If any Mortgagor does not respond to such notice, then the Master
Servicer shall take such other steps as are reasonable and appropriate to
ensure that such Balloon Payment will be paid by the date due. If, as of a date
not more than 30 days prior to the maturity date of any Balloon Mortgage Loan,
the Master Servicer makes a good faith determination that the Mortgagor
thereunder
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will default in making its Balloon Payment and such default shall remain
unremedied for at least 30 days, the Master Servicer may transfer servicing of
such Balloon Mortgage Loan to the Special Servicer pursuant to Section 3.21 and
such Balloon Mortgage Loan will then be a Specially Serviced Mortgage Loan.
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 Borrower any
sums as may be determined to be overages; (iv) to pay interest, if required and
as described below, to the related Borrower on balances in the Servicing
Account (or, if and to the extent not payable to the related Borrower, 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
Borrowers 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
Borrower 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 Borrower make payments in
respect of such items at the time they first become due.
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(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 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 Borrower are insufficient
to pay such item when due and the related Borrower 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 Borrowers
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, solely 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; provided,
however, that this provision is in no way intended to affect amounts actually
due and owing from the related Borrower under such Mortgage Loan.
(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 Borrower 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 Borrower governing
such Reserve Funds. Subject to the terms of the related Mortgage Note and
Mortgage, all Reserve Accounts shall be Eligible Accounts and funds therein may
be invested in Permitted Investments in accordance with the provisions of
Section 3.06. Interest and investment income on funds held in any Reserve Fund
will be for the benefit of the Master Servicer subject to its withdrawal, but
only to the extent it is not otherwise required to be paid to the related
Borrower pursuant to applicable law and/or the related loan documents. 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. Collection Account, Distribution Account and
Interest Reserve Account.
(a) The Master Servicer shall establish and maintain one or
more accounts (collectively, the "Collection Account"), held on behalf of the
Trustee in trust for the benefit of the Certificateholders. The Collection
Account shall be an Eligible Account. The Master Servicer shall deposit or
cause to be deposited in the Collection Account, within two (2) Business Days
of receipt (in the case of payments by Borrowers 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
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payments shall, in each case, be delivered promptly to the related Mortgage
Loan Seller or its designee, with negotiable instruments endorsed as necessary
and appropriate without recourse):
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest at the respective
Mortgage Rates on the Mortgage Loans and all Prepayment Premiums
received in respect of the Mortgage Loans;
(iii) 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, or an exchange
by the Sole Certificateholder of all the Certificates for, 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 Collection
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 Borrowers
that are allocable to cover items in respect of which Servicing
Advances have been made.
The foregoing requirements for deposit in the Collection
Account shall be exclusive. Without limiting the generality of the foregoing,
(A) actual payments from Borrowers 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 Collection 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 Collection Account and that, once so deposited, would have been
permitted to be withdrawn immediately from the Collection 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 Collection
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
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the Collection Account any amount not required to be deposited therein, it may
at any time withdraw such amount from the Collection Account, any provision
herein to the contrary notwithstanding. 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 and similar fees (excluding Prepayment Premiums) received by
the Master Servicer with respect to Specially Serviced Mortgage Loans. The
Collection 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 (2) Business Days after receipt,
remit such amounts to the Master Servicer for deposit into the Collection
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. 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 (2) 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. 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 Collection Account pursuant to Section
3.16(c).
(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, subject to Section 3.04(c), 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) all amounts in the Interest Reserve Account to be
transferred pursuant to Section 3.05(c) on the Master Servicer
Remittance Date in March of any year.
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Furthermore, any Liquidation Proceeds paid by the Master
Servicer, a Majority Certificateholder of the Controlling Class or a Sole
Certificateholder in connection with the purchase of, or the exchange of all
the Certificates for, 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 Collection Account pursuant to Section 9.01, shall be
deposited in the Distribution Account.
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) The Master Servicer shall establish and maintain one or
more accounts (collectively, the "Interest Reserve Account") to be held in
trust for the benefit of the Certificateholders. The Interest Reserve Account
shall be an Eligible Account. On each Master Servicer Remittance Date in
February and, during a year that is not a leap year, in January, prior to
transferring the related Master Servicer Remittance Amount to the Distribution
Account on such Master Servicer Remittance Date, the Master Servicer shall
withdraw from the Collection Account (out of general collections on the
Mortgage Loans and any REO Properties), and deposit in the Interest Reserve
Account, an amount equal to the Interest Reserve Amount, if any, in respect of
each Interest Reserve Loan for such Master Servicer Remittance Date; provided
that, if the Master Servicer Remittance Amount for any such Master Servicer
Remittance Date (calculated without regard to deduction for such Interest
Reserve Amounts) is less than the amount required to be transferred to the
Interest Reserve Account on such date pursuant to this Section 3.04(c), then
the Master Servicer shall (i) so notify the Trustee, (ii) deduct the shortfall
from the interest portion of any P&I Advances to be made in respect of the
Interest Reserve Loans on such Master Servicer Remittance Date and (iii)
promptly deposit the amount so deducted in the Interest Reserve Account.
(d) Funds in the Collection Account and the Interest Reserve
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 each of the Collection Account and the
Interest Reserve Account as of the Closing Date and of the new location of each
of the Collection Account and the Interest Reserve 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 Collection
Account, the Distribution Account and the
Interest Reserve Account.
(a) The Master Servicer may, from time to time, make
withdrawals from the Collection 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;
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(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 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, out of general
collections on the Mortgage Loans and any REO Properties, unpaid
Master Servicing Fees in respect of each Mortgage Loan and REO Loan
earned through the most recent Due Date for such Mortgage Loan or REO
Loan preceding the date of the subject withdrawal (or such later date
through which interest was then collected in respect of such Mortgage
Loan or REO Loan);
(iv) to pay to the Special Servicer, out of general
collections on the Mortgage Loans and any REO Properties, unpaid
Special Servicing Fees in respect of each Specially Serviced Mortgage
Loan and REO Loan earned through the most recent Due Date for such
Specially Serviced Mortgage Loan or REO Loan preceding the date of the
subject withdrawal (or such later date through which interest was then
collected in respect of such Specially Serviced Mortgage Loan or REO
Loan);
(v) to pay to the Special Servicer earned and unpaid Workout
Fees and Liquidation Fees to which it is entitled pursuant to, and
from the sources contemplated by, 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 Borrower 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
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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 solely from Default Charges collected in respect of the
Mortgage Loan or REO Loan as to which the related Advances were made;
(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 Collection
Account for any Collection Period;
(xi) to pay the Master Servicer, as additional servicing
compensation in accordance with Section 3.11(b), (A) any Prepayment
Interest Excesses collected on all the Mortgage Loans (but only to the
extent that all such Prepayment Interest Excesses collected during any
Collection Period exceed all Prepayment Interest Shortfalls incurred
with respect to the Mortgage Loans during such Collection Period) and
(B) any Net Default Charges collected on any Mortgage Loan and
allocable to the period that it was not a Specially Serviced Mortgage
Loan or REO Loan; 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, CREI, SBRC 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;
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(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/or Section 8.13(a);
(xvi) to pay (A) 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 (B) the cost of any remedial,
corrective or other further action contemplated by clause (i) and/or
clause (ii) of Section 3.09(c);
(xvii) to transfer Interest Reserve Amounts in respect of the
Interest Reserve Loans to the Interest Reserve Account as and when
required by Section 3.04(c); and
(xviii) to clear and terminate the Collection Account at the
termination of this Agreement pursuant to Section 9.01.
If amounts on deposit in the Collection Account at any
particular time (after withdrawing any portion of such amounts deposited in the
Collection Account in error) are insufficient to satisfy all payments,
reimbursements and remittances to be made therefrom as set forth in clauses
(ii) through (xvii) above, then the corresponding withdrawals from the
Collection Account shall be made in the following priority and subject to the
following rules: (A) if the payment, reimbursement or remittance is to be made
from a specific source of funds, then such payment, reimbursement or remittance
shall be made from that specific source of funds on a pro rata basis with any
and all other payments, reimbursements and remittances to be made from such
specific source of funds, provided that where, as in clauses (ii), (vi) and
(viii), an order of priority is set forth to govern the application of funds
withdrawn from the Collection 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
Collection Account, then (following any withdrawals made from the Collection
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 (vii) and (ix), an order of priority is set forth to govern the
application of funds withdrawn from the Collection 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 Collection Account
pursuant to clauses (ii) through (xvii) above.
The Master Servicer shall pay to the Special Servicer (or to
third party contractors at the direction of the Special Servicer) from the
Collection 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
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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 Collection 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) and/or Section 8.13(a);
(iv) as contemplated by Section 11.01(g), to pay for the
reasonable costs of the Opinions of Counsel sought by the Trustee as
contemplated by Section 11.01(a) or 11.01(c) in connection with any
amendment to this Agreement requested by the Trustee which amendment
is in furtherance of the rights and interests of Certificateholders;
(v) to pay for the reasonable costs of the Opinions of
Counsel sought by the Trustee as contemplated by Section 11.02(a);
(vi) to (A) pay any and all federal, state and local taxes
imposed on REMIC I, REMIC II or REMIC III or on the assets or
transactions of any 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.
(c) On each Master Servicer Remittance Date in March, the
Master Servicer shall withdraw from the Interest Reserve Account and remit to
the Trustee for deposit in the Distribution Account all Interest Reserve
Amounts deposited in the Interest Reserve Account in respect of the Interest
Reserve Loans during January and/or February of the same year in accordance
with Section 3.04(c). In addition, the Master Servicer may from time to time
make withdrawals from the Interest
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Reserve Account to pay itself, as additional servicing compensation in
accordance with Section 3.11(b), interest and investment income earned in
respect of amounts held in the Interest Reserve Account as provided in Section
3.06(b) (but only to the extent of the Net Investment Earnings with respect to
the Interest Reserve Account for any Collection Period).
SECTION 3.06. Investment of Funds in the Collection Account,
the Interest Reserve Account, the REO Account,
the Servicing Accounts and the Reserve Accounts.
(a) The Master Servicer may direct any depository institution
maintaining the Collection Account, the Interest Reserve Account or, subject to
applicable law and the related loan documents, any Servicing Account or Reserve
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 Collection Account, the Interest Reserve Account,
a Servicing Account or a Reserve Account) and the Special Servicer (with
respect to Permitted Investments of amounts in the REO Account) acting on
behalf of the Trustee, shall (and Trustee hereby designates the Master Servicer
and the Special Servicer, as applicable, as the Person that shall) (i) be the
"entitlement holder" of any Permitted Investment that is a "security
entitlement" and (ii) maintain "control" of any Permitted Investment that is
either a "certificated security" or an "uncertificated security". For purposes
of this Section 3.06(a), the terms "entitlement holder", "security
entitlement", "control", "certificated security" and "uncertificated security"
shall have the meanings given such terms in Revised Article 8 (1994 Revision)
of the UCC, and "control" of any Permitted Investment by the Master Servicer or
the Special Servicer shall constitute "control" by a Person designated by, and
acting on behalf of, the Trustee for purposes of Revised Article 8 (1994
Revision) of the UCC. If amounts on deposit in an Investment Account are at any
time invested in a Permitted Investment payable on demand, the Master Servicer
(in the case of the Collection Account, the Interest Reserve Account, a
Servicing Account or a Reserve 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.
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(b) Whether or not the Master Servicer directs the investment
of funds in the Collection Account, the Interest Reserve Account, a Servicing
Account or a Reserve 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 (and, further to the extent
that, in the case of a Servicing Account or a Reserve Account, such interest or
investment income is not otherwise required to be paid to the related Borrower
in accordance with applicable law and/or the related loan documents), 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
Collection Account, the Interest Reserve Account, a Servicing Account or a
Reserve 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.
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
Borrower to maintain (and, if the related Borrower 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, and 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);
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provided that if any Mortgage permits the holder thereof to dictate to the
Borrower 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 (or whose obligations are guaranteed or
backed, in writing, by an entity having) the Required Claims-Paying Ratings at
the time such policy is purchased, no less insurance coverage than was
previously required of the related Borrower under the related Mortgage and, if
the related Mortgage did not so require, hazard insurance, public liability
insurance and business interruption or rent loss insurance in such amounts as
are consistent with the Servicing Standard, and the Special Servicer shall be
reimbursed for the premium costs thereof as a Servicing Advance pursuant to and
to the extent permitted under Section 3.05(a). All such insurance policies
shall contain a "standard" mortgagee clause, with loss payable to the Master
Servicer (in the case of insurance maintained in respect of the Mortgaged
Properties) or the Special Servicer (in the case of insurance maintained in
respect of REO Properties) on behalf of the Trustee, shall be issued by an
insurer authorized under applicable law to issue such insurance, and, unless
prohibited by the related Mortgage, may contain a deductible clause (not in
excess of a customary amount). Any amounts collected by the Master Servicer or
Special Servicer under any such policies (other than amounts to be applied to
the restoration or repair of the related Mortgaged Property or REO Property or
amounts to be released to the related Borrower, in each case in accordance with
the Servicing Standard) shall be deposited in the Collection 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, solely 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; provided, however, that this provision is in
no way intended to affect amounts due and owing from the related Borrower under
such Mortgage Loan.
(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 (or whose obligations are guaranteed or backed,
in writing, by an entity having) the Required Claims-Paying Ratings,
and (ii) provides protection equivalent to the individual policies
otherwise required, the Master Servicer or the Special Servicer, as
the case may be, shall conclusively be deemed to have satisfied its
obligation to cause hazard insurance to be maintained on the 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 Borrower 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
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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 Collection 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 (or whose obligations
are guaranteed or backed, in writing, by an entity having) 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 Borrower
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 of the
related Mortgage Loan documents, pursue the related Borrower 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 Collection Account from its own
funds (without right of reimbursement) the amount not otherwise
payable under the
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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 (or whose obligations are guaranteed or
backed, in writing, by entities having) 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 (or whose obligations are guaranteed or
backed, in writing, by entities having) the Required Claims-Paying Ratings, a
policy or policies of insurance covering loss occasioned by the errors and
omissions of its (and, in the case of the initial Master 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.
(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 Borrower; or
(ii) provides that such Mortgage Loan may not be assumed
without the consent of the mortgagee in connection with any such sale
or other transfer,
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then, for so long as such Mortgage Loan is included in the Trust Fund, each of
the Master Servicer and the Special Servicer shall, on behalf of the Trustee as
the mortgagee of record, as to those Mortgage Loans it is obligated to service
hereunder, exercise (or waive its right to exercise) any right it may have with
respect to such Mortgage Loan (x) to accelerate the payments thereon, or (y) to
withhold its consent to any such sale or other transfer, in a manner consistent
with the Servicing Standard, but subject to Section 3.20(a)(iii); provided
that, notwithstanding anything to the contrary contained herein, the Master
Servicer shall not 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
shall have provided to the Special Servicer, at least two (2) Business Days
prior to the granting of such waiver or consent, written notice of the matter,
and the Special Servicer shall not have objected to the granting of such
consent or waiver within such two (2) Business Day period; and provided,
further, that, notwithstanding anything to the contrary contained herein, if
the then-outstanding principal balance of the subject Mortgage Loan (together
with the then-outstanding aggregate principal balance of all other Mortgage
Loans that are cross-collateralized with the subject Mortgage Loan or that are
made to the same Borrower or to other Borrowers that are, to the Master
Servicer's or Special Servicer's, as applicable, actual knowledge, Affiliates
of the Borrower under the subject Mortgage Loan) is more than 5.0% of the
then-outstanding aggregate principal balance of the Mortgage Pool, 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 until it has obtained written confirmation from each
Rating Agency that such action shall not result in a 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 Mortgaged
Property which secures, or controlling interests in any Borrower under, a Group
of Cross-Collateralized Mortgage Loans unless all of the Mortgaged Properties
securing, or a controlling interest in all the Borrowers (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 Borrower
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 Borrower 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, REMIC II or REMIC III 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:
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(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, the Master Servicer shall not 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 shall have provided to the Special
Servicer, at least two (2) Business Days prior to the granting of such waiver
or consent, written notice of the matter, and the Special Servicer shall not
have objected to the granting of such consent or waiver within such two (2)
Business Day period; 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 obtained written confirmation from each Rating Agency that such action
would not result in the 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 ARD 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
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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 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
Servicer).
(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
Collection Account pursuant to Section
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3.05(a)) to the effect that the holding of such personal property by
the Trust will not cause either of REMIC I, REMIC II or REMIC III 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 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 within the 12-month period
preceding such determination by an Independent Person who regularly conducts
Phase I Environmental Assessments and such additional environmental testing,
that:
(i) the Mortgaged Property is in compliance with applicable
environmental laws and regulations or, if not, that taking such
actions as are necessary to bring the Mortgaged Property in compliance
therewith and proceeding against the Mortgaged Property is reasonably
likely to produce a greater recovery to Certificateholders on a
present value basis (the relevant discounting of anticipated
collections that will be distributable to Certificateholders to be
performed at the related Net Mortgage Rate), taking into consideration
any associated liabilities, than not taking such actions and not
proceeding against such Mortgaged Property; and
(ii) there are no circumstances or conditions present at the
Mortgaged Property relating to the use, management or disposal of
Hazardous Materials for which investigation, testing, monitoring,
containment, clean-up or remediation could be required under any
applicable environmental laws and/or regulations or, if such
circumstances or conditions are present for which any such action
could be required, that taking such actions with respect to such
Mortgaged Property and proceeding against the Mortgaged Property is
reasonably likely to produce a greater recovery to Certificateholders
on a present value basis (the relevant discounting of anticipated
collections that will be distributable to Certificateholders to be
performed at the related Net Mortgage Rate), taking into consideration
any associated liabilities, than not taking such actions and not
proceeding against such Mortgaged Property.
The cost of such Phase I Environmental Assessment and any
such additional environmental testing 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). The cost of any remedial,
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corrective or other further action contemplated by clause (i) and/or clause
(ii) of the preceding paragraph shall be payable directly out of the Collection
Account.
(d) If the environmental testing contemplated by Section
3.09(c) above establishes that either of the conditions set forth in clauses
(i) and (ii) of the first sentence thereof has not been satisfied with respect
to any Mortgaged Property securing a defaulted Mortgage Loan, the Special
Servicer shall take such action as is in accordance with the Servicing Standard
(other than proceeding against the Mortgaged Property, but including the sale
of the affected Mortgage Loan) and, at such time as it deems appropriate, may,
on behalf of the Trustee, release all or a portion of such Mortgaged Property
from the lien of the related Mortgage; provided that prior to the release of
all or a portion of the related Mortgaged Property from the lien of the related
Mortgage, (i) the Special Servicer shall have notified the Trustee and the
Master Servicer 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 related
Mortgage Loan Seller and (iii) release of the lien of the related Mortgage on
such Mortgaged Property. The Trustee shall forward or make available
electronically copies of all such reports to the Certificateholders and the
Rating Agencies promptly following the receipt thereof.
(f) The Special Servicer shall file on a timely basis 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 annually, in January of each year, to the Trustee an Officer's
Certificate stating that all such reports that were required to be filed during
the prior 12 months, 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).
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(h) The Special Servicer shall maintain accurate records,
certified by a Servicing Officer, of each Final Recovery Determination in
respect of any Mortgage Loan or REO Property and the basis thereof. Each Final
Recovery Determination shall be evidenced by an Officer's Certificate delivered
to the Trustee, the Master Servicer and the Rating Agencies no later than the
tenth Business Day following such Final Recovery Determination.
SECTION 3.10. Trustee to Cooperate; Release of Mortgage
Files.
(a) Upon the payment in full of any Mortgage Loan, or the
receipt by the Master Servicer or Special Servicer of a notification that
payment in full shall be escrowed in a manner customary for such purposes, the
Master Servicer or Special Servicer, as the case may be, shall immediately
notify the Trustee and request delivery of the related Mortgage File by
delivering thereto a Request for Release in the form of Exhibit E 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 Collection 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, and shall, if requested, promptly execute and deliver such
documents furnished to it by such person and certified by such person as being
necessary for such purpose. No expenses incurred in connection with any
instrument of satisfaction or deed of reconveyance shall be chargeable to the
Collection 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 E 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, and shall, if requested,
promptly execute and deliver such documents furnished to it by such person and
certified by such person as being necessary for such purpose. 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 Master Servicer or 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
Collection 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 Borrower on the Mortgage Note or Mortgage or to obtain a deficiency
judgment, or to enforce any other remedies or
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rights provided by the Mortgage Note or Mortgage or otherwise available at law
or in equity or for any other purpose necessary or advisable in the reasonable,
good faith judgment of the Special Servicer; provided, however, that the
Special Servicer shall be responsible for the preparation of all such documents
and pleadings; and when submitted to the Trustee for signature, such documents
or pleadings shall be accompanied by a certificate of a Servicing Officer
requesting that such pleadings or documents be executed by the Trustee and
certifying as to the reason such documents or pleadings are required and that
the execution and delivery thereof by the Trustee will not invalidate or
otherwise affect the lien of the Mortgage, except for the termination of such a
lien upon completion of the foreclosure or trustee's sale.
SECTION 3.11. Servicing Compensation; Interest on Servicing
Advances; Payment of Certain Expenses;
Obligations of the Trustee and the Fiscal Agent
Regarding Back-up Servicing Advances.
(a) As compensation for its activities hereunder, the Master
Servicer shall be entitled to receive the Master Servicing Fee with respect to
each and every Mortgage Loan (including, without limitation, each and every
Specially Serviced Mortgage Loan) and REO Loan. As to each Mortgage Loan and
REO Loan, the Master Servicing Fee shall accrue from time to time 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. 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 out of general collections on
the Mortgage Loans and any REO Properties on deposit in the Collection Account
pursuant to 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) all Net Default Charges, assumption fees, modification
fees and any similar fees (excluding Prepayment Premiums), if any,
actually collected in respect of any Mortgage Loan and allocable to
the period that it was not a Specially Serviced Mortgage Loan;
(ii) charges for beneficiary statements or demands and
amounts collected for checks returned for insufficient funds, to the
extent actually paid by a Borrower with respect to any Mortgage Loan;
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(iii) all Prepayment Interest Excesses, if any, collected on
the Mortgage Loans (but only to the extent such Prepayment Interest
Excesses collected during any Collection Period are greater than all
Prepayment Interest Shortfalls incurred in respect of the Mortgage
Loans during such Collection Period); and
(iv) interest or other income earned on deposits in the
Investment Accounts maintained by the Master Servicer, in accordance
with Section 3.06(b) (but only to the extent of the Net Investment
Earnings, if any, with respect to any such Investment Account for each
Collection Period and, in the case of a Servicing Account or Reserve
Account, only to the extent such interest or other income is not
required to be paid to any Borrower under applicable law or under the
related Mortgage Loan documents);
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.
Notwithstanding anything to the contrary contained herein,
any entity acting as Master Servicer shall be entitled to assign to an
Affiliate the right to receive, for so long as (but only for so long as) such
entity continues to act as Master Servicer, any or all of the items
constituting additional servicing compensation contemplated by this Section
3.11(b).
The Master Servicer shall be required to pay out of its own
funds all expenses incurred by it in connection with its servicing activities
hereunder (including, without limitation, payment of any amounts due and owing
to any Sub-Servicer retained by it and the premiums for any blanket policy
insuring against hazard losses pursuant to Section 3.07(b)), if and to the
extent such expenses are not payable directly out of the Collection Account,
and the Master Servicer shall not be entitled to reimbursement therefor except
as expressly provided in this Agreement.
(c) As compensation for its activities hereunder, the Special
Servicer shall be entitled to receive the Special Servicing Fee with respect to
each Specially Serviced Mortgage Loan and each REO Loan. As to each Specially
Serviced Mortgage Loan and REO Loan, the Special Servicing Fee shall accrue
from time to time at the Special Servicing Fee Rate on the basis of the same
principal amount and for the same number of days respecting which any related
interest payment due on such Mortgage Loan or deemed to be due on such REO Loan
is computed under the terms of the related Mortgage Note (as such terms may be
modified at any time following the Closing Date) and applicable law. The
Special Servicing Fee with respect to any Specially Serviced Mortgage Loan or
REO Loan shall cease to accrue as of the date a Liquidation Event occurs in
respect thereof or it becomes a Corrected Mortgage Loan. Earned but unpaid
Special Servicing Fees shall be payable monthly out of general collections on
the Mortgage Loans and any REO Properties on deposit in the Collection Account
pursuant to Section 3.05(a).
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
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circumstance or condition relating to the related Mortgage Loan Seller's
obligation to repurchase such Mortgage Loan pursuant to Section 2.03, in which
case, if such Mortgage Loan is repurchased within the applicable cure period
following the related Mortgage Loan Seller's notice or discovery (whichever
occurred earlier) of the Document Defect or breach giving rise to such
repurchase obligation, no Workout Fee will be payable from or based upon the
receipt of, any Purchase Price paid by the related Mortgage Loan Seller 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, the Master Servicer or
the Sole Certificateholder in connection with the purchase of, or the exchange
of all the Certificates for, 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 preceding two 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 an ARD 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 Borrower 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 CREI or SBRC pursuant to Section 2.03 within the applicable cure
period of its discovery or notice (whichever occurred earlier) of the breach or
Document Defect that gave rise to the repurchase obligation; other than in
connection with the acquisition of any such Specially Serviced Mortgage Loan or
REO Property by the Sole Certificateholder in exchange for Certificates
pursuant to Section 9.01; and other than in connection with the condemnation or
other governmental taking of a Mortgaged Property or REO Property). As to each
such Specially Serviced Mortgage Loan or REO Property, the Liquidation Fee
shall be payable from, and shall be calculated by application of the
Liquidation Fee Rate to, such full or discounted payoff and/or such Liquidation
Proceeds (excluding any portion of such payoff and/or proceeds that represents
accrued but unpaid Additional Interest with respect to an ARD 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 Corrected Mortgage Loan; and provided,
further, that (without limiting the Special Servicer's right to any Workout Fee
that is properly
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payable therefrom), no Liquidation Fee will be payable from, or based upon the
receipt of, Liquidation Proceeds collected as a result of any purchase or other
acquisition 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 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) any
assumption fees, modification fees or 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 Collection 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 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 charges for
beneficiary statements or demands and 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.
Notwithstanding anything to the contrary contained herein,
any entity acting as Special Servicer shall be entitled to assign to an
Affiliate the right to receive, for so long as (but only for so long as) such
entity continues to act as Special Servicer, any or all of the items
constituting additional special servicing compensation contemplated by this
Section 3.11(d).
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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 Collection 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
ten (10) days after such Servicing Advance is required to be made, then the
Trustee, if it has actual knowledge of such failure on the part of the Master
Servicer or Special Servicer, as the case may be, shall give notice of such
failure to the Master Servicer and/or the Special Servicer, as appropriate. If
such Servicing Advance is not made by the Master Servicer or the Special
Servicer within three (3) Business Days 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 (1) 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 or
REO Loan; and second, at any time coinciding with or following the
reimbursement of such Servicing Advance, to the extent that any such Default
Charges then on deposit in the Collection Account are insufficient to cover
such Advance Interest, out of general collections on the Mortgage Loans and any
REO Properties on deposit in the Collection 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 Collection 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
and good faith judgment would constitute a Nonrecoverable Servicing Advance. In
addition, Nonrecoverable Servicing Advances shall be reimbursable pursuant to
Section 3.05(a)(vii) out of general collections on the Mortgage Pool on deposit
in the Collection Account. The
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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 Collection 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 1999, the Master Servicer shall perform or
cause to be performed physical inspections of each Mortgaged Property at least
once every two (2) years (or, if the related Mortgage Loan has a then current
balance greater than $2,000,000, at least once every year), provided that at
least 50% of the Mortgaged Properties (by both number and aggregate Stated
Principal Balances of the related Mortgage Loans) will be inspected each year
by the Master Servicer (or an entity employed by the Master Servicer for such
purpose) or, in accordance with the second succeeding sentence, by the Special
Servicer. The Master Servicer shall be responsible for such inspections only in
respect of (i) Mortgage Loans that are not Specially Serviced Mortgage Loans
and (ii) Corrected Mortgage Loans. The Special Servicer, subject to statutory
limitations or limitations set forth in the related Mortgage Loan documents,
shall perform or cause to be performed
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a physical inspection of a Mortgaged Property (i) as soon as practicable after
the servicing of the related Mortgage Loan is transferred thereto pursuant to
Section 3.21(a) and (ii) each year thereafter until such Mortgage Loan becomes
a Corrected Mortgage Loan. 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 ten (10) days of the preparation thereof, deliver to the Trustee,
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. 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). In the absence of actual
knowledge that the Master Servicer or the Special Servicer is in default under
this Section 3.12(a), the Trustee shall have no obligation to confirm that
inspections of the Mortgaged Properties are being performed in accordance with
this Section 3.12(a). The preceding sentence notwithstanding, in the event the
Trustee has received, as of December 31 of any calendar year, inspection
reports with respect to less than 50% of the Mortgaged Properties as set forth
in the first sentence of this Section 3.12(a), the Trustee shall notify the
Master Servicer of such fact in writing on or before January 31 of the
immediately succeeding calendar year. The notice provided by the Trustee to the
Master Servicer of the deficiency in the number of inspection reports provided
to the Trustee, shall constitute notice "requiring the same to be remedied"
within the meaning of Section 7.01(a)(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 thirty (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 Borrower 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
Borrower 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 deliver copies of the collected items to the Trustee, the Rating
Agencies and each other, in each case
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within 45 days of its receipt thereof. 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).
(c) If, with respect to any Mortgage Loan (other than a
Specially Serviced Mortgage Loan), the Special Servicer has any questions for
the related Borrower based upon the information received by the Special
Servicer pursuant to Section 3.12(a) or 3.12(b), the Master Servicer shall, in
this regard and without otherwise changing or modifying its duties hereunder,
reasonably cooperate with the Special Servicer in assisting the Special
Servicer to contact and solicit information from such Borrower.
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 and each other, on or before
March 15 of each year, beginning March 15, 2000, 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 the preceding 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 March 15 of each year, beginning March 15, 2000,
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, the Trustee and each other to the effect that such firm has examined
such documents and records as it has deemed necessary and appropriate relating
to the Master Servicer's
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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 statement) and that
the assertion of 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.
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 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,
REMIC II or REMIC III as defined in Section 860F of the Code or cause REMIC I,
REMIC II or REMIC III to fail to qualify as a REMIC at any time that any
Certificates are outstanding. If the Special Servicer is granted the REO
Extension contemplated by
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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 extended period 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 Collection 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 (2) 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 Collection Account or
deliver to the Master Servicer (which shall deposit such amounts into the
Collection 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.
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(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"),
then such Mortgaged Property may be Directly Operated by the Special
Servicer as REO Property;
(ii) Directly Operating such Mortgaged Property as an REO
Property could result in income from such 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 reasonable) acquire such Mortgaged Property as REO
Property and so lease or operate such REO Property; or
(iii) It would not be commercially reasonable to operate and
manage such property as REO Property without the Trust incurring or
possibly incurring an REO Tax on income from such property, then 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 reasonably possible, estimates of the amount of income from
each such source. Within a reasonable period of time after receipt of
such plan, the REMIC Administrator shall consult with the Special
Servicer and shall advise the Special Servicer of the Trust'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
reasonably 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 from such REO Property. 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.
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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 or in reasonable and good faith
reliance on the advice of knowledgeable counsel 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 any of REMIC I, REMIC II or REMIC III 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 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.
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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 the preceding sentence
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 Special Servicer of any of
its duties and obligations hereunder with respect to the operation and
management of any such REO Property; and
(v) the Special Servicer shall be obligated with respect
thereto to the same extent as if it alone were performing all duties
and obligations in connection with the operation and management of
such REO Property.
The Special Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Special Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification.
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SECTION 3.18. Sale of Defaulted 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, then the Special
Servicer shall promptly so notify in writing the Trustee and the Master
Servicer, and the Trustee shall, within ten (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 or their 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 Collection
Account, and the Trustee, upon receipt of an Officer's Certificate from the
Master Servicer to the effect that such deposit has been made, shall release or
cause to be released to the Certificateholder(s) effecting such purchase (or
any designee thereof) the related Mortgage File, and shall execute and deliver
such instruments of transfer or assignment, in each case without recourse, as
shall be provided to it and are reasonably necessary to vest in the
Certificateholder(s) effecting such purchase (or any designee thereof)
ownership of such Mortgage Loan. In connection with any such purchase, the
Special Servicer shall deliver the related Servicing File to the
Certificateholder(s) effecting such purchase (or any designee thereof).
(c) If the Majority Certificateholder of the Controlling
Class has not purchased any Defaulted Mortgage Loan described in the first
sentence of Section 3.18(b) within fifteen (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
Collection 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
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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
cash offers for each REO Property in such manner as will be reasonably likely
to realize a fair price for such property 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 (5) Business Days' prior written notice of its
intention to sell any Defaulted Mortgage Loan or REO Property pursuant to this
Section 3.18(d). No Interested Person shall be obligated to submit an offer to
purchase any such Mortgage Loan or REO Property, and notwithstanding anything
to the contrary herein, neither the Trustee nor the Fiscal Agent, each in its
respective individual capacity, nor any of their respective Affiliates may make
an offer for or purchase any Defaulted Mortgage Loan or any REO Property
pursuant hereto.
(e) Whether any cash offer constitutes a fair price for any
Defaulted Mortgage Loan or REO Property, as the case may be, for purposes of
Section 3.18(d), shall be determined by the Special Servicer or, if such cash
offer is from an Interested Person, by the Trustee. In determining whether any
offer received from an Interested Person represents a fair price for any such
Mortgage Loan or REO Property, the Trustee shall be supplied with and shall
rely on the most recent Appraisal or updated Appraisal conducted in accordance
with this Agreement within the preceding 12-month period or, in the absence of
any such Appraisal, on a narrative appraisal prepared by a Qualified Appraiser,
retained by the Special Servicer. Such appraiser shall be selected by the
Special Servicer if 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
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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 twelve (12) months), and in determining whether any
offer from an Interested Person constitutes a fair price for any such Mortgage
Loan or REO Property, any appraiser or other expert in real estate matters
shall be instructed to take into account, as applicable, among other factors,
the period and amount of any delinquency on the affected Mortgage Loan, the
occupancy level and physical condition of the Mortgaged Property or REO
Property, the state of the local economy and the obligation to dispose of any
REO Property within the time period specified in Section 3.16(a).
Notwithstanding the other provisions of this Section 3.18, no cash offer from
any Interested Person or any Affiliate thereof in an amount less than the
related Purchase Price shall constitute a fair price for any Defaulted Mortgage
Loan or REO Property unless such offer is the highest cash offer received and
at least two additional offers (not including the offers of Interested Persons
or any Affiliates thereof) have been received from Independent third parties
reflecting prices less than the related Purchase Price. The Purchase Price for
any Defaulted Mortgage Loan or REO Property shall in all cases be deemed a fair
price.
(f) Subject to Sections 3.18(a) through 3.18(e) above, the
Special Servicer shall act on behalf of the Trustee in negotiating and taking
any other action necessary or appropriate in connection with the sale of any
Defaulted Mortgage Loan or REO Property, and the collection of all amounts
payable in connection therewith. In connection therewith, the Special Servicer
may charge prospective offerors, and may retain, fees that approximate the
Special Servicer's actual costs in the preparation and delivery of information
pertaining to such sales or evaluating offers without obligation to deposit
such amounts into the Collection 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).
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SECTION 3.19. Additional Obligations of the Master Servicer
and the Special Servicer.
(a) The Master Servicer shall maintain at its Primary
Servicing Office and shall, upon reasonable advance written notice, make
available during normal business hours for review by each Rating Agency and by
any Certificateholder or Certificate Owner or any Person identified to the
Master Servicer as a prospective transferee of a Certificate or an interest
therein, copies of the Servicing Files; provided that, if the Master Servicer
reasonably and in good faith determines 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 Master
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 applicable law or the provisions of any related Mortgage Loan
documents; and provided, further, that, except in the case of the Rating
Agencies, the Master Servicer shall be entitled to recover from any Person
reviewing the Servicing Files pursuant to this Section 3.19(a) its reasonable
"out-of-pocket" expenses incurred in connection with making the Servicing Files
available to such Person. 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 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, written
confirmation executed by the requesting Person, in form reasonably satisfactory
to the Master Servicer, 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).
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(b) Within sixty (60) 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 Scheduled P&I Payments
with respect to any Mortgage Loan, (iii) the date on which a receiver is
appointed and continues in such capacity in respect of the Mortgaged Property
securing any Mortgage Loan, (iv) the date on which the Borrower under any
Mortgage Loan becomes the subject of bankruptcy, insolvency or similar
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 the Special
Servicer (whichever is then responsible for servicing such Mortgage Loan) 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 at least
twelve (12) consecutive Scheduled P&I Payments, and no other Servicing Transfer
Event has occurred with respect thereto during the preceding twelve months, in
which case it will cease to be a Required Appraisal Loan), the Special Servicer
shall, within thirty (30) days of each anniversary of such loan 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 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),
the Underwriter 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, subject to the second following paragraph, 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
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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 (5) Business Days prior to the date on which such Servicing
Advance is first required to be made; 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 (subject to the following paragraph) have the obligation to make
any such Servicing Advance that it is requested by the Special Servicer to make
within five (5) 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.
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(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 (reduced (to
not less than zero) by the aggregate of all Prepayment Interest Excesses
collected) 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 0.06% per annum.
(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 Borrower's prepaying its Mortgage Loan, partially
or in its entirety, if the Borrower 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.
(h) Neither the Master Servicer nor the Special Servicer
shall exercise any right on the part of the mortgagee to convert the Mortgage
Loan identified on the Mortgage Loan Schedule by control number S139 to an ARD
Loan.
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 Default Charges and Prepayment Premiums on, permit the release,
addition or substitution of collateral securing, and/or permit the release of
the Borrower 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, would materially impair
the security for such Mortgage Loan or reduce the likelihood of timely
payment of amounts due thereon; however, the Special Servicer may
agree to any modification, waiver or amendment of any term of, extend
the
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maturity 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 (A) as expressly provided in Section
3.02 and Section 3.08 or (B) if a material default on such Mortgage
Loan has occurred or, in the Special Servicer's reasonable and good
faith judgment, a default in respect of payment on such Mortgage Loan
is reasonably foreseeable, and such modification, waiver, amendment or
other action is reasonably likely to produce a greater recovery to
Certificateholders (as a collective whole) on a present value basis
(the relevant discounting of anticipated collections that will be
distributable to Certificateholders to be performed at the related Net
Mortgage Rate), than would liquidation;
(ii) the Special Servicer may not, in connection with any
particular extension, (A) extend the maturity date of any Mortgage
Loan beyond a date that is two (2) years prior to the Rated Final
Distribution Date, (B) in the case of a Mortgage Loan secured solely
by a Mortgage on the applicable Borrower's leasehold interest in all
or any material portion of the related Mortgaged Property (but not by
a Mortgage on the fee interest in such Mortgaged Property or portion
thereof), extend the maturity date of such Mortgage Loan beyond a date
that is ten (10) years prior to the expiration of the related Ground
Lease or (C) in the case of a Mortgage Loan that is a Balloon Mortgage
Loan, extend the maturity date beyond the amortization term thereof
(as determined without regard to the Balloon Payment);
(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, REMIC II or REMIC III to fail to qualify as a REMIC
under the Code or result in the imposition of any tax on "prohibited
transactions" or "contributions" after the Startup Day of any 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 be contrary to the
Servicing Standard 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 Borrower to add or substitute any collateral for an
outstanding Mortgage Loan, which additional or substitute collateral
constitutes real property, unless and until (A) the Master Servicer or
the Special Servicer, as the case may be, shall have obtained written
confirmation from each Rating Agency that such action would not result
in a downgrade or withdrawal of the rating then assigned by such
Rating Agency to any Class of Certificates and (B) 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 within the 12-month period prior
to such determination by an Independent Person who regularly conducts
Phase I Environmental Assessments (and such additional environmental
testing), at the expense of the Borrower, that such additional or
substitute collateral is in compliance with applicable environmental
laws and regulations and that there are no circumstances or conditions
present
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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;
provided that, the Master Servicer shall not agree to any addition or
substitution of any collateral unless it shall have provided to the
Special Servicer, at least two (2) Business Days prior to agreeing to
such addition or substitution, written notice of the matter, and the
Special Servicer shall not have objected to such addition or
substitution within such two (2) Business Day period; 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 provided written confirmation
that such action would not result in a downgrade or withdrawal of the
rating then assigned by such Rating Agency to any Class of
Certificates 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 Cash Flow 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
and (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; provided that, the Master Servicer shall not
agree to any release of collateral (except in connection with an
ordinary condemnation) unless it shall have provided to the Special
Servicer, at least two (2) Business Days prior to agreeing to such
release or substitution, written notice of the matter, and the Special
Servicer shall not have objected to the granting of such release
within such two (2) Business Day period;
provided that (x) the limitations, conditions and restrictions set forth in
clauses (i) through (v) above shall not apply to any act or event (including,
without limitation, a release, substitution or addition of collateral) in
respect of any Mortgage Loan that either occurs automatically, or results from
the exercise of a unilateral option by the Borrower within the meaning of
Treasury Regulations Section 1.1001-3(c)(2)(ii), in any event under the terms
of such Mortgage Loan in effect on the Closing Date, and (y) notwithstanding
clauses (i) through (v) above, neither the Master Servicer nor the Special
Servicer shall be required to oppose the confirmation of a plan in any
bankruptcy or similar proceeding involving a Borrower if in their reasonable
and good faith judgment such opposition would not ultimately prevent the
confirmation of such plan or one substantially similar.
(b) Neither the Master Servicer nor the Special Servicer
shall have any liability to the Trust, the Certificateholders or any other
Person if the Special Servicer's analysis and determination that the
modification, waiver, amendment or other action contemplated by Section 3.20(a)
(with respect to Specially Serviced Mortgage Loans) is reasonably likely to
produce a greater recovery to Certificateholders on a present value basis than
would liquidation, should prove to be
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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, solely 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;
provided, however, that this provision is in no way intended to affect amounts
actually due and owing from the related Borrower under such Mortgage Loan.
(d) The Master Servicer and the Special Servicer each may, as
a condition to its granting any request by a Borrower 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 Borrower 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 ten (10) Business Days) following the execution thereof. In addition,
following the execution of any modification, waiver or amendment agreed to by
the Special Servicer pursuant to Section 3.20(a) above, the Special Servicer
shall deliver to the Master Servicer and the Trustee an Officer's Certificate
setting forth in reasonable detail the basis of the determination made by it
pursuant to clause (i) of Section 3.20(a).
(f) With respect to any ARD 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 Borrower, with a
copy to the Trustee) all or any accrued Additional Interest if, prior to the
related maturity date, the related Borrower has requested the right to prepay
the Mortgage Loan in full together with all other payments required by the
Mortgage Loan in connection with such prepayment except for such 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
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Net Mortgage Rate) than a refusal to waive the right to such accrued 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.
(g) With respect to any Mortgage Loan which permits release
of the related Mortgaged Property through the exercise a Defeasance Option, the
Master Servicer shall, to the extent consistent with and permitted by the
applicable Mortgage Loan documents, permit the exercise of such Defeasance
Option on any Due Date occurring more than two (2) years after the Startup Day
(the "Release Date") only upon the satisfaction of the following conditions:
(i) No event of default shall exist under the related
Mortgage Note;
(ii) The Borrower shall have paid on such Release Date (A)
all interest accrued and unpaid on the principal balance of the
related Mortgage Note to and including the Release Date; (B) all other
sums, excluding scheduled interest or principal payments due under
such Mortgage Note after the Release Date and (C) any costs and
expenses incurred in connection with such release;
(iii) The Borrower shall have delivered Defeasance Collateral
(or cash sufficient for the Master Servicer to acquire Defeasance
Collateral (which the Master Servicer shall do promptly)) providing
payments on or prior to all successive scheduled payment dates from
the Release Date to the related Stated Maturity Date, and in an amount
equal to or greater than the scheduled payments due on such dates
under the Mortgage Loan; provided that, for purposes of the foregoing,
in the case of an ARD Loan, such Mortgage Loan shall be deemed to be a
Balloon Loan that matures on its Anticipated Repayment Date;
(iv) The Borrower shall have delivered a security agreement
granting the Trust a first priority security interest in the
Defeasance Collateral;
(v) The Master Servicer shall have received an Opinion of
Counsel from the related Borrower (which shall be an expense of the
related Borrower) to the effect that the Trust has a first priority
security interest in the Defeasance Collateral and that the assignment
thereof is valid and enforceable;
(vi) The Master Servicer shall have obtained at the related
Borrower's expense a certificate from an Independent certified public
accountant certifying that the Defeasance Collateral complies with the
requirements of the related Mortgage Note;
(vii) If such Mortgage Loan so requires and provides for the
related Borrower to pay the cost thereof, the Master Servicer shall
have obtained an Opinion of Counsel from the related Borrower to the
effect that such release would not cause any of REMIC I, REMIC II or
REMIC III to fail to qualify as a REMIC at any time that any
Certificates are outstanding or cause a tax to be imposed on the Trust
Fund under the REMIC Provisions;
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(viii) The Borrower shall have provided evidence to the
Master Servicer demonstrating that the lien of the related Mortgage is
being released to facilitate the disposition of the Mortgaged Property
or another customary commercial transaction, and not as part of an
arrangement to collateralize the Certificates with obligations that
are not real estate mortgages; and
(ix) The Master Servicer shall have obtained written
confirmation from each Rating Agency that the related Borrower's
exercise of such Defeasance Option would not result in a downgrade or
withdrawal of any rating then assigned by such Rating Agency to any
Class of Certificates.
In connection with the related Borrower's exercise of the
Defeasance Option under any Defeasance Loan, the Master Servicer shall not
consent to a new Person becoming the Borrower on the subject Defeasance Loan
unless either such new Person is acquiring the Mortgaged Property that was the
initial security for the Defeasance Loan or the Defeasance Loan is not, and was
not at any time, a personal liability (without regard to customary exceptions)
of the Borrower.
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 (5) 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 (or a copy thereof to the
extent a copy had been received by the Special Servicer), to the Master
Servicer and upon giving such notice, and returning such Servicing File (or
copy thereof), 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 (based on reports delivered by the Special Servicer) 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)
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with and notices to Borrowers and similar matters relating to each Specially
Serviced Mortgage Loan and the related Mortgaged Property.
Also notwithstanding anything herein to the contrary, in
connection with the transfer to the Special Servicer of the servicing of a
Cross-Collateralized Mortgage Loan as a result of a Servicing Transfer Event or
the re-assumption of servicing responsibilities by the Master Servicer with
respect to any such Mortgage Loan upon its becoming a Corrected Mortgage Loan,
the Master Servicer and the Special Servicer shall each transfer to the other,
as and when applicable, the servicing of all other Cross-Collateralized
Mortgage Loans constituting part of the same Group; provided that no
Cross-Collateralized Mortgage Loan may become a Corrected Mortgage Loan at any
time that a continuing Servicing Transfer Event exists with respect to another
Cross-Collateralized Mortgage Loan in the same Group.
(b) In servicing any Specially Serviced Mortgage Loans, the
Special Servicer shall provide to the Trustee originals of documents
contemplated by the definition of "Mortgage File" and generated while such
Mortgage Loan is a Specially Serviced Mortgage Loan, for inclusion in the
related Mortgage File (with a copy of each such original to the Master
Servicer), and shall provide to the Trustee and the Master Servicer copies of
any additional related Mortgage Loan information, including correspondence with
the related Borrower 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 and does not subject the Trust to any
liability; (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) prohibits the Sub-Servicer
from modifying any Mortgage Loan or commencing any foreclosure or similar
proceedings with respect to any Mortgaged Property without the consent of the
Master Servicer or the Special Servicer; (iv) in the case of a Sub-Servicing
Agreement entered into by the Master Servicer, expressly or effectively
provides (unless the Special
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Servicer agrees otherwise) that such agreement shall be suspended or terminated
with respect to any Mortgage Loan serviced thereunder at the time such Mortgage
Loan becomes a Specially Serviced Mortgage Loan, and also expressly or
effectively provides (unless the Special Servicer agrees otherwise) that the
Sub-Servicer shall not receive or accrue an entitlement to any sub-servicing
compensation in respect of a Specially Serviced Mortgage Loan or an REO Loan;
and (v) in the case of a Sub-Servicing Agreement entered into by the Special
Servicer, relates only to Specially Serviced Mortgage Loans or REO Properties
and expressly or effectively provides that such agreement shall terminate with
respect to any such Mortgage Loan that becomes a Corrected Mortgage Loan.
References in this Agreement to actions taken or to be taken by the Master
Servicer or the Special Servicer, as the case may be, include actions taken or
to be taken by a Sub-Servicer on behalf of the Master Servicer or the Special
Servicer, as the case may be; and, in connection therewith, all amounts
advanced by any Sub-Servicer to satisfy the obligations of the Master Servicer
or the Special Servicer, as the case may be, hereunder to make Advances shall
be deemed to have been advanced by the Master Servicer or the Special Servicer,
as the case may be, out of its own funds and, accordingly, such Advances shall
be recoverable by such Sub-Servicer in the same manner and out of the same
funds as if such Sub-Servicer were the Master Servicer or the Special Servicer,
as the case may be, and, for so long as they are outstanding, such Advances
shall accrue interest in accordance with Section 3.11(f) and/or Section
4.03(d), such interest to be allocable between the Master Servicer or the
Special Servicer, as the case may be, and such Sub-Servicer as they may agree.
For purposes of this Agreement, the Master Servicer and the Special Servicer
each shall be deemed to have received any payment when a Sub-Servicer retained
by it receives such payment. The Master Servicer and the Special Servicer each
shall notify the 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 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.
(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.
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(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, to enter into or
continue negotiations with the new Master Servicer or to resign if such new
Sub-Servicing Agreement is not mutually agreed upon) 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 such successor Master Servicer
shall pay to such Sub-Servicer a fee (a "Sub-Servicer Termination Fee") in an
amount equal to four (4) times the product of (i) the Primary Servicing Fee
Rate in effect under such Sub-Servicing Agreement at the time of such
Sub-Servicer's termination and (ii) the then-current outstanding principal
balance of the Mortgage Loans serviced by such Sub-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
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hereof to the same extent and under the same terms and conditions as if it
alone were servicing and administering the Mortgage Loans for which it is
responsible.
SECTION 3.23. Designation of Special Servicer by the Majority
Certificateholder of the Controlling Class.
The Majority Certificateholder of the Controlling Class may
at any time and from time to time replace any existing Special Servicer or any
Special Servicer that has resigned or otherwise ceased to serve as Special
Servicer. Such Majority Certificateholder shall so designate a Person to so
serve by the delivery to the Trustee of a written notice stating such
designation, subject to the approval of the Trustee, which approval shall not
be unreasonably withheld. The Trustee shall, promptly after receiving any such
notice, so notify the Rating Agencies. If the Trustee approves the designated
Person (based upon the servicing qualifications and financial condition of such
designated Person) as a replacement Special Servicer, which approval shall not
be unreasonably withheld, the designated Person shall become the Special
Servicer as of the date the Trustee shall have received: (i) written
confirmation from each Rating Agency stating that if the designated Person were
to serve as Special Servicer hereunder, none of the then-current ratings
assigned by such Rating Agency to the respective Classes of the Certificates
would be 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 (2) Business Days to the
replacement Special Servicer for administration by it of all cash amounts that
shall at the time be or should have been credited by the terminated Special
Servicer to the REO Account or delivered to the Master Servicer or that are
thereafter received by the terminated Special Servicer with respect to
Specially Serviced Mortgage Loans and REO Properties.
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SECTION 3.24. Confidentiality.
The Master Servicer and the Special Servicer shall each keep
confidential and shall not disclose to any Person other than each other, the
Sponsor, the Trustee and the Rating Agencies, without the related
Sub-Servicer's prior written consent, any information which it obtains in its
capacity as Master Servicer or Special Servicer with regard to the Sub-Servicer
(other than the name of the Sub-Servicer) or the Mortgage Loans or any related
Borrower including, without limitation, credit information with respect to any
such Borrower (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 of 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 proprietary
non-public 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 Borrowers or Mortgaged
Properties. Each Sub-Servicing Agreement shall contain a provision identical to
the foregoing with respect to the related Sub-Servicer.
SECTION 3.26. Automatic Resignation of Master Servicer and
Special Servicer in Connection with an Adverse
Rating Event.
(a) The Master Servicer or the Special Servicer, as the case
may be, shall be required to immediately resign upon the occurrence of any one
or more of the following events (an "Adverse Rating Event"):
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(i) any of the outstanding ratings on any Class of
Certificates is downgraded or withdrawn due to the acts, omissions or
circumstances of or involving the Master Servicer or the Special
Servicer, as the case may be, acting in such capacity;
(ii) either Rating Agency places its ratings of any Class of
Certificates on a "watch" status in contemplation of a ratings
downgrade or withdrawal due to the acts, omissions or circumstances of
or involving the Master Servicer or the Special Servicer, as the case
may be, acting in such capacity, and the Master Servicer or Special,
as applicable, shall not have resolved all such matters to the
satisfaction of such Rating Agency within ninety (90) days thereafter,
except that no such cure period shall continue beyond the end of the
cure period described in Section 3.26(a)(iv);
(iii) the Master Servicer or the Special Servicer, as the
case may be, is no longer "approved" by either Rating Agency to act in
such capacity for pools of mortgage loans similar to the Mortgage Pool
with ratings similar to that of the Certificates and the Master
Servicer or Special Servicer, as applicable, shall not have resolved
all such matters to the satisfaction of such Rating Agency within
ninety (90) days thereafter, except that no such cure period shall
continue beyond the end of the cure period described in Section
3.26(a)(iv); or
(iv) Moody's shall provide written notice to the Trustee
that, unless the Master Servicer or the Special Servicer, as
applicable, resigns, it will place its ratings on one or more Classes
of Certificates on a "watch" status in contemplation of a ratings
downgrade or withdrawal due to the acts, omissions or circumstances of
or involving the Master Servicer or the Special Servicer, as the case
may be, acting in such capacity and the Master Servicer or Special
Servicer, as applicable, shall not have resolved all such matters to
Moody's satisfaction within ninety (90) days.
(b) No resignation pursuant to Section 3.26(a) shall become
effective until the Trustee or other successor shall have assumed the
responsibilities and obligations of the resigning party hereunder in accordance
with Section 7.02; and provided, further, that if the Master Servicer or the
Special Servicer, whichever is the cause for the actual or prospective Adverse
Rating Event, fails to resign, then the Trustee shall terminate such party
hereunder in the manner and with the effect specified in Section 7.01(b) as if
an uncured Event of Default then existed with respect to such party.
(c) The cure periods provided to the Master Servicer and the
Special Servicer pursuant to Section 3.26(a)(ii), (iii) and (iv) may be
extended by the applicable Rating Agency so long as such Rating Agency provides
its consent to such extension in writing to the Trustee.
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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 Expenses, if any,
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that were previously allocated to the Class B Certificates and that
remain unreimbursed immediately prior to such Distribution Date;
(vii) to distributions of interest to the Holders of the
Class C Certificates, in an amount equal to all Distributable
Certificate Interest in respect of such Class of Certificates for such
Distribution Date and, to the extent not previously paid, for all
prior Distribution Dates;
(viii) if the Class Principal Balances of the Class A-1,
Class A-2 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 Date) equal to the entire remaining Principal
Distribution Amount for such Distribution Date;
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(xv) to distributions to the Holders of the Class E
Certificates, in an amount equal to, and in reimbursement of, all
Realized Losses and Additional Trust Fund Expenses, if any, that were
previously allocated to the Class E Certificates and that remain
unreimbursed immediately prior to such Distribution Date;
(xvi) to distributions of interest to the Holders of the
Class F Certificates, in an amount equal to all Distributable
Certificate Interest in respect of such Class of Certificates for such
Distribution Date and, to the extent not previously paid, for all
prior Distribution Dates;
(xvii) if the Class Principal Balances of the Class A-1,
Class A-2, Class 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 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
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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;
(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;
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(xxxi) to distributions of interest to the Holders of the
Class L 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;
(xxxii) 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, Class J and Class K Certificates have been reduced to zero, to
distributions of principal to the Holders of the Class L Certificates,
in an amount (not to exceed the Class Principal Balance of the Class L
Certificates outstanding immediately prior to such Distribution Date)
equal to the entire remaining Principal Distribution Amount for such
Distribution Date;
(xxxiii) to distributions to the Holders of the Class L
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 L Certificates and that remain
unreimbursed immediately prior to such Distribution Date;
(xxxiv) to make distributions to the Holders of the Class
R-III Certificates, in an amount equal to the excess, if any, of (A)
the aggregate distributions deemed made in respect of the REMIC II
Regular Interests on such Distribution Date pursuant to Section
4.05(a), over (B) the aggregate distributions made in respect of the
REMIC III Regular Certificates on such Distribution Date pursuant to
clauses (i) through (xxxiii) above;
(xxxv) to make distributions to the Holders of the Class R-II
Certificates, up to an amount equal to the excess, if any, of (A) the
aggregate distributions deemed made in respect of the REMIC I Regular
Interests on such Distribution Date pursuant to Section 4.05(e), over
(B) the aggregate distributions deemed made in respect of the REMIC II
Regular Interests on such Distribution Date pursuant to Section
4.05(a); and
(xxxvi) 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 (xxxv) 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),
(xxix) and (xxxii) above with respect to any Class of Principal Balance
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
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such date. References to "remaining Principal Distribution Amount" in clause
(ii) above, in connection with distributions of principal to be made to the
Holders of either Class of Class A Certificates on any Distribution Date prior
to the earlier of the Senior Principal Distribution CrossOver Date and the
Final Distribution Date shall be: (x) in the case of the Class A-1
Certificates, to the entire Principal Distribution Amount for such Distribution
Date; and (y) in the case of the Class A-2 Certificates, to the Principal
Distribution Amount for such Distribution Date, net of any distributions of
principal made on such date to the Holders of the Class A-1 Certificates.
References to "remaining Principal Distribution Amount" in any of clauses (v),
(viii), (xi), (xiv), (xvii), (xx), (xxiii), (xxvi), (xxix) and (xxxii) above,
in connection with the distributions of principal to be made to the Holders of
any Class of Principal Balance Certificates on any Distribution Date prior to
the Final Distribution Date, shall be to the Principal Distribution Amount for
such Distribution Date, net of any distributions of principal made on such date
to the Holders of each other Class of Principal Balance 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 respective Class or Classes
of Principal Balance Certificates (other than any Excluded Class
thereof) then entitled to distributions of principal on such
Distribution Date, up to an amount equal to the corresponding
Additional Yield Amount (as defined below) for each such Class of
Certificates, pro rata in accordance with their respective
entitlements if there is more than one such Class of Certificates; and
(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.
If a Prepayment Premium is distributable on any Distribution
Date, then the applicable "Additional Yield Amount" for any Class of Principal
Balance Certificates (other than any Excluded Class thereof) entitled to
distributions of principal on such Distribution Date in reduction of its Class
Principal Balance, shall be an amount equal to the product of (a) such
Prepayment Premium, multiplied by (b) a fraction, which in no event will be
greater than one or less than zero, the numerator of which is equal to the
positive excess, if any, of (i) the Pass-Through Rate for such Class of
Principal Balance Certificates over (ii) the related Discount Rate, and the
denominator of which is equal to the positive excess, if any, of (i) the
Mortgage Rate for the Mortgage Loan or REO Loan, as the case may be, as to
which such Prepayment Premium was collected, over (ii) the related Discount
Rate, multiplied by (c) a fraction, the numerator of which is equal to the
portion of the Principal Distribution Amount allocated to such Class of
Principal Balance Certificates for such Distribution Date, and the denominator
of which is equal to the entire Principal Distribution Amount for such
Distribution Date.
The "Discount Rate" with respect to any prepaid Mortgage Loan
or REO Loan, for the purpose of allocating any Prepayment Premium received
thereon or with respect thereto among
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the respective Classes of Principal Balance Certificates (other than any
Excluded Class thereof) on 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 the constant maturity treasury having a maturity
coterminous with the maturity date or, in the case of an ARD Loan, the
Anticipated Repayment Date of the prepaid Mortgage Loan or REO Loan as of the
related Determination Date. If there is no Discount Rate for instruments having
a maturity coterminous with the remaining term (to maturity or Anticipated
Repayment Date, as applicable) of the applicable Mortgage Loan or REO Loan,
then the Discount Rate will equal the interpolation of the yields of the
constant maturity treasuries with maturities next longer and shorter than such
remaining term (to maturity or Anticipated Repayment Date, as applicable).
(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 (5) Business
Days prior to the related Record Date or, in the case of the initial
Distribution Date, as of 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, in the case of a Principal Balance Certificate,
without regard to any possible future reimbursement of any Realized Losses and
Additional Trust Fund Expenses 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 Principal Balance Certificate in
reimbursement of Realized Losses and Additional Trust Fund Expenses 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 the 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.
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(d) The rights of the Certificateholders to receive
distributions from the proceeds of the Trust Fund in respect of their
Certificates, and all rights and interests of the Certificateholders in and to
such distributions, shall be as set forth in this Agreement. Neither the
Holders of any Class of Certificates nor any party hereto shall in any way be
responsible or liable to the Holders of any other Class of Certificates in
respect of amounts properly previously distributed on the Certificates.
Distributions in reimbursement of Realized Losses and Additional Trust Fund
Expenses previously allocated to a Class of Certificates shall not constitute
distributions of principal and shall not result in a reduction of the related
Class Principal Balance.
(e) Except as otherwise provided in Section 9.01, whenever
the Trustee expects that the final distribution with respect to any Class of
Certificates (determined, in the case of a Class of Principal Balance
Certificates, without regard to any possible future reimbursement of any
Realized Losses and Additional Trust Fund Expenses 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-III Certificateholders all unclaimed funds and other assets which remain
subject hereto.
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(f) Notwithstanding any other provision of this Agreement,
the Trustee shall comply with all federal withholding requirements respecting
payments to Certificateholders of interest or original issue discount that the
Trustee reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
Trustee does withhold any amount from interest or original issue discount
payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall indicate the amount withheld to
such Certificateholders.
SECTION 4.02. Statements to Certificateholders; Certain
Reports by the Master Servicer and the
Special Servicer.
(a) On each Distribution Date, based upon (where applicable)
the information set forth in the report relating to such Distribution Date
prepared by the Master Servicer and delivered to the Trustee pursuant to
Section 4.02(b) hereof, and only to the extent (where applicable) such
information is provided to the Trustee by the Master Servicer, the Trustee
shall forward 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 III Regular Certificates and to the Rating
Agencies a statement (a "Distribution Date Statement"), substantially in the
form attached hereto as Exhibit F and setting forth:
(i) the amount of the distribution, if any, on such
Distribution Date to the Holders of each Class of REMIC III 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 III 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 III 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 such
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)
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delinquent 90 or more days, and (D) as to which foreclosure
proceedings have been commenced;
(viii) the most recent Appraised Value, the property type and
the 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 P&I Payment of the related REO Loan;
(ix) the Accrued Certificate Interest and Distributable
Certificate Interest in respect of each Class of REMIC III Regular
Certificates for such Distribution Date;
(x) the aggregate amount of Distributable Certificate
Interest payable in respect of each Class of REMIC III 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 III Regular Certificates after giving effect to
the distributions made on such Distribution Date;
(xii) the Pass-Through Rate for each Class of REMIC III
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 III 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 III
Regular Certificates immediately following such Distribution Date;
(xviii) the aggregate amount of Servicing Fees paid to the
Master Servicer and the Special Servicer, collectively and separately,
during the Collection Period for the preceding Distribution Date, if
any;
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(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 Collection Period for such Distribution Date;
(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 Exhibit F hereto.
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, (vi) Operating Statement Analysis, (vii)
Comparative Financial Status Report, (viii) Watchlist and (ix) CSSA Report
(such reports described in the immediately preceding clauses (i) - (ix),
collectively with the Distribution Date Statement, the "Certificateholder
Reports"), that has been received or prepared by the Trustee since the prior
Distribution Date (or, in the case of the initial Distribution Date, since the
Closing Date). Delivery of such reports shall be either in a written format, or
by such other means mutually agreed to by the Trustee and any such
Certificateholder or Certificate Owner, 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 Borrowers 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
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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 Cash Flow for the respective Mortgaged Properties and a Debt Service
Coverage Ratio calculated on the basis thereof). To the extent reasonably
possible, delivery of such report to any particular Rating Agency shall be,
upon request, through an electronic medium.
On each Distribution Date, the Trustee shall forward or make
available electronically to the Sponsor, to the Master Servicer, to the Special
Servicer, to the Underwriter, to the Holders of the Residual Certificates and,
in the case of reports regarding a Class of Book-Entry Certificates, to (i) 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), (ii) Intex
Solutions, Inc. (at 35 Highland Circle, Needham, Massachusetts 02194, or such
other address as Intex Solutions, Inc. may hereafter designate), (iii) Charter
Research Corporation (at 262 Washington Street, Boston, Massachusetts 02108, or
such other address as Charter Research Corporation may hereafter designate) and
(iv) any other party that the Depository may designate, a copy of the reports
forwarded to the Holders of the REMIC III 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 III 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, Class R-II and Class R-III
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 R-I, Class R-II and Class R-III Certificates
may reasonably request.
A Certificateholder or Certificate Owner may obtain
Certificateholder Reports by calling the Trustee's ASAP (Automated Statements
Accessed by Phone) facsimile system at (312) 904-2200 and requesting statement
number 378. At the direction of the Sponsor, the Trustee shall make available
any or all of the Certificateholder Reports and may make available certain
other information concerning the Mortgage Loans and the Certificates to
Certificateholders and Certificate Owners through the Trustee's website
(initially at www.lnbabs.com on the internet) with the use of a password.
Account numbers on the Trustee's ASAP System and Fax System and passwords for
the Trustee's website may be obtained by calling (714) 282-3980 ext. 275.
Additionally, the Trustee shall make available to the Master Servicer, the
Special Servicer, the Certificateholders, Certificate
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Owners identified to the Trustee in writing in accordance with Section 5.06(b),
the Sponsor, the Underwriter, each Rating Agency and, at the direction of the
Sponsor, Bloomberg Financial Markets, L.P. ("Bloomberg") (and may in its
discretion and upon receipt of prior written consent of the Sponsor publish on
the internet) by means of electronic access to a datafile in the form of the
CSSA Reports, with the Delinquent Loan Status Report, REO Status Report,
Historical Loan Modification Report, Special Servicer Loan Status Report,
Historical Loss Report and the Operating Statement Analysis attached (provided
such reports have been delivered to the Trustee pursuant to Section 4.02(b) in
an electronic format acceptable to the Trustee) via the Trustee's bulletin
board (accessible by dialing 714-282-3990. The Trustee may disclaim
responsibility for any information therein for which it is not the original
source.
The Master Servicer, upon receipt of prior written consent of
the Sponsor, shall publish on its website on the internet information relating
to the Mortgage Loans (other than Mortgagor names and Mortgagor
principal/sponsor names), provided that any "out-of-pocket" expenses arising
therefrom shall not be an Additional Trust Fund Expense and shall be the sole
responsibility of the Master 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, the Special Servicer and the
Underwriter, in writing and on a computer-readable medium, in form reasonably
acceptable to the recipient, including, without limitation, on a loan-by-loan
basis, the following reports: (1) a Delinquent Loan Status Report, (2) an REO
Status Report, (3) an Historical Loan Modification Report, (4) an Historical
Loss Report, (5) a Comparative Financial Status Report, (6) the CSSA Reports,
(7) a Watchlist, (8) the Special Servicer Loan Status Report most recently
received by the Master Servicer and (9) a single report setting forth (but only
to the extent not covered by any of the other reports in clauses (1) through
(8) of this paragraph) the information specified in clauses (i) through (vii)
below (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 earlier of the second Business Day after the related
Determination Date and the fourth Business Day prior to the subject
Distribution Date, in the form required by Section 4.02(c) below):
(i) the aggregate amount that is to be transferred from the
Collection 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
Collection Account to the Distribution Account on the related Master
Servicer Remittance Date that is allocable to (A) interest on or in
respect of the Mortgage Loans and any REO Loans and (B) Prepayment
Premiums;
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(iii) the aggregate amount of any P&I Advances (specifying
the principal and interest portions thereof separately) to be made
pursuant to Section 4.03 of this Agreement that were made in respect
of the immediately preceding Distribution Date;
(iv) the amount of the Master Servicing Fees, Special
Servicing Fees, Workout Fees and Liquidation Fees with respect to the
Mortgage Pool for the Collection Period ending on the related
Determination Date, in each case payable to the Master Servicer, the
Special Servicer and any Sub-Servicers retained by each;
(v) the aggregate Stated Principal Balance of the Mortgage
Pool outstanding immediately before and immediately after the subject
Distribution Date;
(vi) the aggregate amount of the Additional Trust Fund
Expenses (broken down by type) withdrawn from the Collection Account
during the Collection Period ending on the related Determination Date;
and
(vii) 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).
On the date on which the reports described above are
delivered to the Trustee, the Special Servicer and the Underwriter, the Master
Servicer shall also deliver or cause to be delivered to the Trustee, the
Underwriter 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 Collection Account as of
the close of business on such Master Servicer Remittance Date, stating that all
distributions required by this Agreement to be made by the Master Servicer have
been made (or, in the case of any required distribution that has not been made
by the Master Servicer, specifying the nature and status thereof) and showing,
for the period from the preceding Master Servicer Remittance Date (or, in the
case of the first Master Servicer Remittance Date, from the Cutoff Date) to
such Master Servicer Remittance Date, the aggregate of deposits into and
withdrawals from the Collection 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).
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Within one hundred thirty (130) days following the end of
each calendar quarter, commencing with the calendar quarter ended March 31,
1999, the Master Servicer shall deliver to the Trustee and, if requested, to
the Underwriter, with respect to each Mortgaged Property and REO Property, a
report (an "Operating Statement Analysis") substantially in the form of Exhibit
G-6 containing revenue, expense and Net Cash Flow information normalized using
the methodology described therein as of the end of such calendar quarter,
together with all operating statements and rent rolls in its possession that
relate to such Mortgaged Property or REO Property, as the case may be, and that
have not previously been delivered to the Trustee; provided that (i) the
requirement that the Master Servicer deliver an Operating Statement Analysis
with respect to any Specially Serviced Mortgage Loan or REO Property in the
time period provided above is subject to the Master Servicer having received
directly from the Special Servicer or through a Sub-Servicer the related
operating statements and rent rolls from the related Borrower or otherwise
within one hundred (100) days following the end of such calendar quarter and
(ii) if the related operating statements and rent rolls are not received within
one hundred (100) days following the end of such calendar quarter, then the
subject Operating Statement Analysis shall be delivered by the Master Servicer
to the Trustee within thirty (30) days after the date the Master Servicer has
received the related operating statements and rent rolls.
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 Special
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 (provided
that the related Mortgage Loan has a Cut-off Date Balance greater than 5% of
the aggregate Cut-off Date Balance of the Mortgage Pool) 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 or any Sub-Servicer on behalf of 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 or such
Sub-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 or any Sub-Servicer on behalf of the Special Servicer, and shall have
no obligation to verify the same.
(c) On the earlier of (i) the second Business Day after each
Determination Date and (ii) the fourth Business Day preceding the related
Distribution Date, the Special Servicer shall
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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
Borrowers or otherwise obtained, shall be delivered to the Master Servicer,
within ten (10) days of receipt.
SECTION 4.03. P&I Advances.
(a) On or before 1:00 p.m., New York City time, on each
Master Servicer Remittance Date the Master Servicer shall, subject to Section
3.04(c), either (i) deposit into the Distribution Account from its own funds an
amount equal to the aggregate amount of P&I Advances, if any, to be made in
respect of the related Distribution Date, (ii) apply amounts held in the
Collection Account for future distribution to Certificateholders in subsequent
months in discharge of any such obligation to make P&I Advances, or (iii) make
P&I Advances in the form of any combination of (i) and (ii) aggregating the
total amount of P&I Advances to be made; provided that if Late Collections 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 Collection Account, the Master Servicer shall use such Late Collections
(net of any Workout Fees payable therefrom) to make such P&I Advances. Any
amounts held in the Collection 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 Collection Account on or before the next
succeeding Determination Date (to the extent not previously replaced through
the deposit of Late Collections of the delinquent principal and/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 (i) the requisite
Officer's Certificate and documentation related to a determination of
nonrecoverability of a P&I Advance or (ii) the requisite notice contemplated by
Section 3.04(c)), then the Trustee shall provide notice of such failure to a
Servicing Officer of the Master Servicer by facsimile transmission sent to
telecopy no. (404) 654-2478 (or such alternative number provided by the Master
Servicer to the Trustee in writing) and by telephone at telephone no. (404)
654-2000 (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
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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 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 Scheduled P&I Payments (other than Balloon Payments) and any
Assumed P&I Payments, in each case net of related Workout Fees payable
hereunder, that (i) were due or deemed due, as the case may be, in respect
thereof on their respective Due Dates during the related Collection Period and
(ii) were not paid by or on behalf of the related Borrowers 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 Collection 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 two (2) 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
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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 the 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 with respect to a particular P&I Advance, and the
Master Servicer shall be entitled to rely on any determination of
nonrecoverability that may have been made by the Special Servicer with respect
to a particular P&I Advance.
(d) As and to the extent permitted by Section 3.05(a), the
Master Servicer, the Trustee and the Fiscal Agent shall each be entitled to
receive interest at the Reimbursement Rate in effect from time to time, accrued
on the amount of each P&I Advance made thereby (out of its own funds) for so
long as such P&I Advance is outstanding (or, in the case of Advance Interest
payable to the Master Servicer, if earlier, until the Late Collection of the
delinquent principal and/or interest in respect of which such P&I Advance was
made has been received by the Master Servicer or any of its Sub-Servicers), and
such interest will be paid: first, out of any Default Charges collected on or
in respect of the related Mortgage Loan or REO Loan, as the case may be; and
second, at any time coinciding with or following the reimbursement of such P&I
Advance to the extent that any such Default Charges then on deposit in the
Collection Account are insufficient to cover such Advance Interest, out of
general collections on the Mortgage Loans and any REO Properties on deposit in
the Collection 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 Collection 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 Principal Balance
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 Principal Balance Certificates, exceeds
(ii) the aggregate Stated Principal Balance of the Mortgage Pool that will be
outstanding immediately following such Distribution Date. If such excess does
exist, then the Class Principal Balances of the Class L, Class K, Class J,
Class H, Class G, Class F, Class E, Class D, Class C and Class B Certificates
shall be reduced sequentially, in that order, in each case, until 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
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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 Principal Balance
Certificates shall be deemed to be allocations of Realized Losses and
Additional Trust Fund Expenses.
SECTION 4.05. Deemed Distributions on, and Allocations of
Realized Losses and Additional Trust Fund
Expenses to, the REMIC I Regular
Interests and REMIC II Regular Interests.
(a) All distributions of Distributable Certificate Interest
made in respect of the Class X Certificates on each Distribution Date pursuant
to Section 4.01(a), shall be deemed to have first been distributed from REMIC
II to REMIC III in respect of all the REMIC II Regular Interests, up to an
amount equal to, and pro rata in accordance with, the Class X Portion of the
Uncertificated Distributable Interest for each such REMIC II Regular Interest
for such Distribution Date and, to the extent not previously deemed distributed
pursuant to this sentence, for all prior Distribution Dates, if any. In
addition, all distributions of Distributable Certificate Interest,
distributions of principal and reimbursements of previously allocated Realized
Losses and Additional Trust Fund Expenses made in respect of each Class of
Principal Balance Certificates on each Distribution Date pursuant to Section
4.01(a) shall be deemed to have first been distributed from REMIC II to REMIC
III in respect of the Corresponding REMIC II Regular Interest for such Class of
Principal Balance Certificates. In each such case, if such distribution on any
such Class of REMIC III Regular Certificates was a distribution of interest, of
principal or in reimbursement of any previously allocated Realized Losses and
Additional Trust Fund Expenses in respect of such Class of Certificates, then
the corresponding distribution deemed to be made on a REMIC II Regular Interest
pursuant to either of 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 II Regular Interest.
(b) All distributions of Prepayment Premiums made in respect
of the respective Classes of REMIC III Regular Certificates on each
Distribution Date pursuant to Section 4.01(a) shall be deemed to have first
been distributed from REMIC II to REMIC III in respect of the respective REMIC
II Regular Interests, pro rata based upon the amount of principal deemed
distributed in respect of each such REMIC II 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 III 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 II Regular Interests on such Distribution
Date pursuant to this Section 4.05. Notwithstanding the deemed distributions on
the REMIC II 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) Realized Losses and Additional Trust Fund Expenses, if
any, allocated to any Class of Principal Balance Certificates on any
Distribution Date shall be deemed to have first been
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allocated to the Corresponding REMIC II Regular Interest for such Class of
Principal Balance Certificates, with a corresponding reduction in the
Uncertificated Principal Balance of such REMIC II Regular Interest.
(e) On each Distribution Date, the Available Distribution
Amount for such date shall be deemed to have first been distributed from REMIC
I to REMIC II in respect of the REMIC I Regular Interests, in each case to the
extent of the remaining portion of such funds, for the following purposes and
in the following order of priority:
(i) as deemed distributions of interest in respect of the
REMIC I Regular Interests, up to an amount equal to, and pro rata in
accordance with, all Uncertificated Distributable Interest in respect
of each such REMIC I Regular Interest for such Distribution Date and,
to the extent not previously deemed distributed, for all prior
Distribution Dates;
(ii) as deemed distributions of principal in respect of the
REMIC I Regular Interests, up to an amount equal to, and pro rata in
accordance with, as to each such REMIC I Regular Interest, that
portion, if any, of the Principal Distribution Amount for such
Distribution Date attributable the related Mortgage Loan (or successor
REO Loan); and
(iii) as deemed distributions in respect of the REMIC I
Regular Interests, up to an amount equal to, pro rata in accordance
with, and in reimbursement of, any Realized Losses and Additional
Trust Fund Expenses (with compounded interest at the related REMIC I
Remittance Rate), previously allocated to each such REMIC I Regular
Interest.
(f) All distributions of Prepayment Premiums made in respect
of the respective Classes of REMIC III 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 REMIC I Regular
Interest corresponding to the prepaid Mortgage Loan or REO Loan, as the case
may be, in respect of which such Prepayment Premium was received.
(g) On each Distribution Date, following the deemed
distributions to be made in respect of the REMIC I Regular Interests pursuant
to Section 4.05(e), the Uncertificated Principal Balance of each REMIC I
Regular Interest (after taking account of such deemed distributions) shall, if
and to the extent necessary, be reduced to equal the Stated Principal Balance
of the related Mortgage Loan and/or REO Loan, as the case may be, that will be
outstanding immediately following such Distribution Date. All such reductions
in the Uncertificated Principal Balances of the respective REMIC I Regular
Interests shall be deemed to constitute allocations of Realized Losses and
Additional Trust Fund Expenses.
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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 shall initially be held and transferred through the
book-entry facilities of the Depository. The NonRegistered Certificates will be
issuable in denominations corresponding to initial Certificate Principal
Balances as of the Closing Date of not less than $100,000 and in any whole
dollar denomination in excess thereof; and the Registered 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 $10,000 (or, with respect to the Class X Certificates,
$1,000,000) and in any whole dollar denomination in excess thereof. Each Class
of Residual Certificates will be issuable only in denominations representing
not less than a 10% Percentage Interest in such 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.
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SECTION 5.02. Registration of Transfer and Exchange of
Certificates.
(a) At all times during the term of this Agreement, there
shall be maintained at the office of the Certificate Registrar a Certificate
Register in which, subject to such reasonable regulations as the Certificate
Registrar may prescribe, the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges of Certificates as
herein provided. The Trustee is hereby initially appointed (and hereby agrees
to act in accordance with the terms hereof) as Certificate Registrar for the
purpose of registering Certificates and transfers and exchanges of Certificates
as herein provided. For so long as the Trustee acts as Certificate Registrar,
its Corporate Trust Office shall constitute the office of the 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.
In the event that either (x) three or more Certificateholders
or (y) any Holder of Certificates representing at least 75% of the Voting
Rights (hereinafter referred to, in the case of each of clause (x) and clause
(y), as the "applicant") apply in writing to the Trustee, and such application
states that the applicant desires 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 applicant proposes to
transmit, then the Trustee shall, within five (5) Business Days after the
receipt of such application, afford such applicant 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
applicant's request, the Trustee shall promptly request from the Certificate
Registrar a current list as provided above, and shall afford such applicant
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.
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(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) 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 (except
in the case of the initial sale of any Non-Registered Certificate by the
Underwriter) and a certificate from such Certificateholder's prospective
transferee substantially in the form attached either as Exhibit B-2 or Exhibit
B-3 hereto; or (ii) 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. None of the Sponsor, the Trustee or the
Certificate Registrar is obligated to register or qualify any Class of
NonRegistered Certificates under the Securities Act or any other securities law
or to take any action not otherwise required under this Agreement to permit the
transfer of any Non-Registered Certificate or interest therein without
registration or qualification. Any Holder of a Non-Registered Certificate
desiring to effect such a transfer shall, and does hereby agree to, indemnify
the Sponsor, the Master Servicer, the Special Servicer, the Trustee, the REMIC
Administrator, the Fiscal Agent 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 Non-Registered
Certificate or interest therein that 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 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 (y) 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, Master
Servicer or Special Servicer to any obligation in addition to those undertaken
in this Agreement. It is hereby acknowledged that the form of certification
attached hereto as Exhibit D is an acceptable certification for purposes of the
preceding sentence. Each Person who acquires any Certificate
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(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 two preceding sentences, in the case of a
Non-Registered Certificate) be deemed to have certified that: (i) it is neither
a Plan nor any Person who is directly or indirectly purchasing such Certificate
or interest therein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, or (ii) alternatively, in the case of a Registered
Certificate, 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") 91-23 or Sections I and III of PTCE
95- 60.
(d) (i) Each Person who has or who acquires any Ownership
Interest in a Residual Certificate shall be deemed by the acceptance
or acquisition of such Ownership Interest to have agreed to be bound
by the following provisions and to have irrevocably authorized the
Trustee under clause (ii)(A) below to deliver payments to a Person
other than such Person and to have irrevocably authorized the Trustee
under clause (ii)(B) below to negotiate the terms of any mandatory
sale and to execute all instruments of Transfer and to do all other
things necessary in connection with any such sale. The rights of each
Person acquiring any Ownership Interest in a Residual Certificate are
expressly subject to the following provisions:
(A) Each Person holding or acquiring any Ownership
Interest in a Residual Certificate shall be a Permitted
Transferee and shall promptly notify the Trustee and the
REMIC Administrator of any change or impending change in its
status as a Permitted Transferee.
(B) In connection with any proposed Transfer of any
Ownership Interest in a Residual Certificate (other than in
connection with the initial issuance of the Certificates or
any transfer of a Residual Certificate by the Sponsor), the
Certificate Registrar shall require delivery to it, and shall
not register the Transfer of any Residual Certificate until
its receipt of, an affidavit and agreement substantially in
the form attached hereto as Exhibit C-1 (a "Transfer
Affidavit and Agreement") from the proposed Transferee, in
form and substance satisfactory to the Certificate Registrar,
representing and warranting, among other things, that such
Transferee is a Permitted Transferee, that it is not
acquiring its Ownership Interest in the Residual Certificate
that is the subject of the proposed Transfer as a nominee,
trustee or agent for any Person that is not a Permitted
Transferee, that for so long as it retains its Ownership
Interest in a Residual Certificate it will endeavor to remain
a Permitted Transferee, 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
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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.
(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 such transfer shall
be void ab initio and the last preceding Holder of such
Residual Certificate that was in compliance with the
provisions of this Section 5.02(d) shall be restored, to the
extent permitted by law, to all rights as Holder thereof
retroactive to the date of registration of such Transfer of
such Residual Certificate. None of the Trustee, the Master
Servicer, the Special Servicer, the REMIC Administrator or
the Certificate Registrar shall be under any liability to any
Person for any registration of Transfer of a Residual
Certificate that is in fact not permitted by this Section
5.02(d) or for making any payments due on such Certificate to
the Holder thereof or for taking any other action with
respect to such Holder under the provisions of this
Agreement.
(B) If any purported Transferee shall become a
Holder of a Residual Certificate in violation of the
restrictions in this Section 5.02(d) and to the extent that
the retroactive restoration of the rights of the Holder of
such Residual Certificate as described in clause (ii)(A)
above shall be invalid, illegal or unenforceable, then the
Trustee shall have the right, but not the obligation, 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.
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(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, 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 any of REMIC I,
REMIC II or REMIC III to (x) cease to qualify as a REMIC or
(y) be subject to an entity-level tax caused by the Transfer
of any Residual Certificate to a Person which is not a
Permitted Transferee, or cause a Person other than the
prospective Transferee to be subject to a REMIC-related tax
caused by the Transfer of a Residual Certificate to a Person
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) The Trust has not been registered as an investment
company under the Investment Company Act. Accordingly, no transfer of any Class
F, Class G, Class H, Class J, Class K or Class L Certificate shall be made to
any Person other than an Institutional Accredited Investor or a Qualified
Institutional Buyer, and no transfer of any Residual Certificate shall be made
to any Person other than a Qualified Institutional Buyer. If a transfer of any
such Certificate is to be made, then the Certificate Registrar shall require,
in order to assure compliance with the foregoing, that the prospective
transferee of such Certificate certify in writing that the prospective
transferee is a Qualified Institutional Buyer or, alternatively, except in the
case of a Residual Certificate, an Institutional Accredited Investor.
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(f) 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.
(g) 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.
(h) 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.
(i) 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.
(j) 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.
(k) 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, 1999, 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.
(l) If a Person is acquiring any Non-Registered Certificate
or interest therein as a fiduciary or agent for one or more accounts, such
Person shall be required to deliver to the Certificate Registrar (or, in the
case of a Book-Entry Certificate, to the Certificate Owner that is transferring
such interest) a certification to the effect that, and such other evidence as
may be reasonably required by the Trustee (or such Certificate Owner) to
confirm that, it has (i) sole investment discretion with respect to each such
account and (ii) full power to make the acknowledgments, representations,
warranties, certification and agreements with respect to each such account as
set forth in subsections (b), (c), (d) and (e) as applicable, of this Section
5.02.
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(m) Neither the Trustee nor the Certificate Registrar shall
have any obligation or duty to monitor, determine or inquire as to compliance
with any restriction or transfer imposed under this Section 5.02 or under
applicable law with respect to any transfer of any Certificate, or any interest
therein, other than to require delivery of the certification(s) and/or opinions
of counsel described in this Section 5.02 applicable with respect to changes in
registration of record ownership of Certificates in the Certificate Register.
The Trustee and the Certificate Registrar shall have no liability for
transfers, including transfers made through the book-entry facilities of the
Depository or between or among the Depository Participants or Certificate
Owners made in violation of applicable restrictions.
SECTION 5.03. Book-Entry Certificates.
(a) The Registered 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 Sellers, 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).
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(c) If (i)(A) the Sponsor advises the Trustee and the
Certificate Registrar in writing that the Depository is no longer willing or
able to properly discharge its responsibilities with respect to any Class of
the Book-Entry Certificates, and (B) the Sponsor is unable to locate a
qualified successor, or (ii) the Sponsor at its option advises the Trustee and
the Certificate Registrar in writing that it elects to terminate the book-entry
system through the Depository with respect to any Class of the Book-Entry
Certificates, the Certificate Registrar shall notify all affected Certificate
Owners, through the Depository, of the occurrence of any such event and of the
availability of Definitive Certificates to such Certificate Owners requesting
the same. Upon surrender to the Certificate Registrar of any Class of the
Book-Entry Certificates by the Depository, accompanied by registration
instructions for registration of transfer, the Trustee shall execute, and the
Certificate Registrar shall authenticate and deliver, the appropriate
Definitive Certificates to the Certificate Owners identified in such
instructions. None of the Sponsor, the Mortgage Loan Sellers, 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 Sellers, the Master Servicer, the Special Servicer,
the Trustee, the Fiscal Agent, the REMIC Administrator, the Certificate
Registrar and any agents of any of them may treat the person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions pursuant to Section 4.01 and for all other purposes
whatsoever, and none of the
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Sponsor, the Mortgage Loan Sellers, 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, the 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.
ARTICLE VI
THE SPONSOR, THE MORTGAGE LOAN SELLERS,
THE MASTER SERVICER,
THE SPECIAL SERVICER AND THE REMIC ADMINISTRATOR
SECTION 6.01. Liability of the Sponsor, the Mortgage Loan
Sellers, the Master Servicer, the Special
Servicer and the REMIC Administrator.
The Sponsor, CREI, SBRC, 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, CREI, SBRC, the Master Servicer, the Special
Servicer and the REMIC Administrator herein.
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SECTION 6.02. Merger, Consolidation or Conversion of the
Sponsor, the Mortgage Loan Sellers, the Master
Servicer, the Special Servicer or the REMIC
Administrator.
Subject to the following paragraph, the Sponsor, CREI, SBRC,
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, CREI, SBRC, 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, CREI, SBRC, the Master Servicer, the
Special Servicer or the REMIC Administrator shall be a party, or any Person
succeeding to the business of the Sponsor, CREI, SBRC, the Master Servicer, the
Special Servicer or the REMIC Administrator, shall be the successor of the
Sponsor, CREI, SBRC, the Master Servicer, the Special Servicer or the REMIC
Administrator, as the case may be, hereunder, without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that no
successor or surviving Person shall succeed to the rights of the Master
Servicer or the Special Servicer 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 to the Trustee 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, 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, 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, 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, the
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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 reasonable expense incurred in connection with any legal action
relating to this Agreement, the Certificates or any asset of the Trust, other
than any such 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) that constitutes a Servicing Advance and is otherwise
reimbursable pursuant to this Agreement (provided that this clause (ii) is not
intended to limit the Master Servicer's or Special Servicer's right of recovery
of liabilities and expenses incurred as a result of being the defendant, or
participating in a proceeding to which another indemnified party under this
Section 6.03 is a defendant, in a legal action relating 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 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 Collection 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 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
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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 3.11 and 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 and accrued after the date of transfer shall
thereafter be payable to such successor.
SECTION 6.05. Rights of the Sponsor and the Trustee in
Respect of the Master Servicer, the Special
Servicer and the REMIC Administrator.
The Master Servicer, the Special Servicer and the REMIC
Administrator each shall afford the Sponsor and the Trustee, upon reasonable
notice, during normal business hours access to all records maintained by the
Master Servicer, the Special Servicer or the REMIC Administrator, as the case
may be, in respect of its rights and obligations hereunder and access to such
of its officers as are responsible for such obligations. Upon reasonable
request, the Master Servicer, the Special Servicer and the REMIC Administrator
each shall furnish the Sponsor and the Trustee with its most recent financial
statements (or, with respect to the initial Master Servicer, the financial
statements of AMRESCO, INC.) 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
Collection Account any amount required to be so deposited under this
Agreement which continues unremedied for two (2) 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 Collection
Account or the REO Account any amount required to be so deposited or
remitted under this Agreement which continues unremedied for two (2)
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 to make such Servicing Advance continues
unremedied for a period of three (3) Business Days following the date
on which notice shall have been received by the Master Servicer from
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 to make such Servicing
Advance continues unremedied for a period of three (3) Business Days
following the date on which notice shall have been received by the
Special Servicer from 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 received by the Master Servicer
or the Special Servicer, as the case may be,
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from any other party hereto, or by the Master Servicer or the Special
Servicer, as the case may be, with a copy to each other party hereto,
from 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 thirty (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 thirty (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 sixty
(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.
Each Event of Default listed above as items (vi) through (xi) shall constitute
an Event of Default only with respect to the relevant party; provided that if a
single entity acts or any two or more
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Affiliates act as Master Servicer, Special Servicer and REMIC Administrator, or
in any two or more of the foregoing capacities, an Event of Default in one
capacity will constitute an Event of Default in each 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, 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 (10)
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 (2) 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 Collection 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
Collection Account, any Servicing Account or any Reserve Account (if it is the
Defaulting Party) or thereafter be received with respect to the Mortgage Loans
and any REO Properties (provided, however, that the Master Servicer and the
Special Servicer each shall, if terminated pursuant to this Section 7.01(b),
continue to be obligated for or entitled to receive all amounts accrued or
owing by or to it under this Agreement on or prior to the date of such
termination, whether in respect of Advances or otherwise, and it and its
directors, officers, employees and agents shall continue to be entitled to the
benefits of Section 6.03 notwithstanding any such termination). 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
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Certificates entitled to at least 51% of the Voting Rights, the Trustee (or, if
the Trustee is also the REMIC Administrator, the Sponsor) 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 (10) Business
Days subsequent to its receipt of the notice of the termination) to provide the
Trustee (or, if the Trustee is also the REMIC Administrator, such other
successor appointed as contemplated by Section 7.02) with all documents and
records requested thereby to enable the Trustee (or such other successor) to
assume the REMIC Administrator's functions hereunder, and to cooperate with the
Trustee (or such other successor) in effecting the termination of the REMIC
Administrator's responsibilities and rights hereunder (provided, however, that
the REMIC Administrator shall continue to be obligated for or entitled to
receive all amounts accrued or owing by or to it under this Agreement on or
prior to the date of such termination, and it and its directors, officers,
employees and agents shall continue to be entitled to the benefits of Section
6.03 notwithstanding any such termination).
SECTION 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer, the Special
Servicer or the REMIC Administrator resigns pursuant to clause (ii) of the
first sentence of Section 6.04 or receives a notice of termination pursuant to
Section 7.01, the Trustee shall be the successor in all respects to the Master
Servicer, the Special Servicer or (unless it has also been acting as such) the
REMIC Administrator, as the case may be, in its capacity as such under this
Agreement and the transactions set forth or provided for herein and shall be
subject to all the responsibilities, duties and liabilities relating thereto
and arising thereafter placed on the Master Servicer, the Special Servicer or
the REMIC Administrator, as the case may be, by the terms and provisions
hereof, including, without limitation, if the Master Servicer is the resigning
or terminated party, the Master Servicer's obligation to make P&I Advances;
provided that any failure to perform such duties or responsibilities caused by
the Master Servicer's, the Special Servicer's or the REMIC Administrator's, as
the case may be, failure to cooperate or to provide information or monies
required by Section 7.01 shall not be considered a default by the Trustee
hereunder. Neither the Trustee nor any other successor shall be liable for any
of the representations and warranties of the resigning or terminated party or
for any losses incurred by the resigning or terminated party pursuant to
Section 3.06 hereunder nor shall the Trustee nor any other successor be
required to purchase any Mortgage Loan hereunder. As compensation therefor, the
Trustee shall be entitled to all fees and other compensation which the
resigning or terminated party would have been entitled to for future services
rendered if the resigning or terminated party had continued to act hereunder.
Notwithstanding the above, the Trustee may, if it shall be unwilling to so act,
or shall, if it is unable to so act, or is not approved by each and every
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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 downgrade 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 30 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.
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 (5) 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.
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SECTION 7.04. Waiver of Events of Default.
The Holders entitled to at least 66-2/3% (or, in the case of
an Event of Default described in clauses (i) through (v) of Section 7.01(a),
100%) of the Voting Rights allocated to each of the Classes of Certificates
affected by any Event of Default hereunder may waive such Event of Default,
except that prior to any waiver of an Event of Default arising from a failure
to make P&I Advances, the Trustee shall be reimbursed all amounts which it has
advanced. Upon any such waiver of an Event of Default, such Event of Default
shall cease to exist and shall be deemed to have been remedied for every
purpose hereunder. No such waiver shall extend to any subsequent or other Event
of Default or impair any right consequent thereon except to the extent
expressly so waived. Notwithstanding any other provisions of this Agreement,
for purposes of waiving any Event of Default pursuant to this Section 7.04,
Certificates registered in the name of the Sponsor or any Affiliate of the
Sponsor (provided that neither the Sponsor nor any Affiliate thereof is the
party in respect of which such Event of Default exists) shall be entitled to
the same Voting Rights with respect to the matters described above as they
would if any other Person held such Certificates.
SECTION 7.05. Additional Remedies of Trustee Upon Event of
Default.
During the continuance of any Event of Default, so long as
such Event of Default shall not have been remedied, the Trustee, in addition to
the rights specified in Section 7.01, shall have the right, in its own name and
as trustee of an express trust, to take all actions now or hereafter existing
at law, in equity or by statute to enforce its rights and remedies and to
protect the interests, and enforce the rights and remedies, of the
Certificateholders (including the institution and prosecution of all judicial,
administrative and other proceedings and the filings of proofs of claim and
debt in connection therewith). Except as otherwise expressly provided in this
Agreement, no remedy provided for by this Agreement shall be exclusive of any
other remedy, and each and every remedy shall be cumulative and in addition to
any other remedy, and no delay or omission to exercise any right or remedy
shall impair any such right or remedy or shall be deemed to be a waiver of any
Event of Default.
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ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of the Trustee.
(a) The Trustee, prior to the occurrence of an Event of
Default hereunder and after the curing or waiver of all such Events of Default
and defaults which may have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement; provided that
it is herein acknowledged and agreed that the Trustee is at all times acting in
a fiduciary capacity with respect to the Certificateholders. If an Event of
Default hereunder occurs and is continuing, the Trustee shall exercise such of
the rights and powers vested in it by this Agreement and applicable law, and
use the same degree of care and skill in their exercise as a prudent man or the
Trustee would exercise or use under the circumstances in the conduct of his or
its own affairs (whichever standard would be higher). Any permissive right of
the Trustee contained in this Agreement shall not be construed as a duty.
(b) The Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Trustee which are specifically required to be
furnished pursuant to any provision of this Agreement (other than the Mortgage
Files, the review of which is specifically governed by the terms of Article
II), shall examine them to determine whether they conform in form to the
requirements of this Agreement. If any such instrument is found not to so
conform to the requirements of this Agreement in a material manner, the Trustee
shall take such action as it deems appropriate to have the instrument
corrected. The Trustee shall not be responsible for, but may assume and rely
upon, the accuracy and content of any resolution, certificate, statement,
opinion, report, document, order or other instrument furnished by the Sponsor,
the Master Servicer, the Special Servicer or the REMIC Administrator and
accepted by the Trustee in good faith, pursuant to this Agreement.
(c) No provision of this Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided, however,
that:
(i) The duties and obligations of the Trustee shall be
determined solely by the express provisions of this Agreement, the
Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement
against the Trustee and, in the absence of bad faith on the part of
the Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee and conforming
to the requirements of this Agreement;
(ii) The Trustee shall not be personally liable for an error
of judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee
was negligent in ascertaining the pertinent facts; and
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(iii) The Trustee shall not be personally liable with respect
to any action taken, suffered or omitted to be taken by it in good
faith in accordance with the direction of Holders of Certificates
entitled to at least 25% (or, as to any particular matter, any higher
percentage as may be specifically provided for hereunder) of the
Voting Rights relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee, under this Agreement.
SECTION 8.02. Certain Matters Affecting the Trustee and the
Fiscal Agent.
Except as otherwise provided in Section 8.01:
(i) The Trustee may rely upon and shall be protected in
acting or refraining from acting upon any resolution, Officer's
Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document reasonably believed
by it to be genuine and to have been signed or presented by the proper
party or parties;
(ii) The Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken
or suffered or omitted by it hereunder in good faith and in accordance
therewith;
(iii) The Trustee shall be under no obligation to exercise
any of the trusts or powers vested in it by this Agreement or to make
any investigation of matters arising hereunder or to institute,
conduct or defend any litigation hereunder or in relation hereto at
the request, order or direction of any of the Certificateholders,
pursuant to the provisions of this Agreement, unless such
Certificateholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby; the Trustee shall not be
required to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured to it; nothing contained herein shall, however, relieve the
Trustee of the obligation, upon the occurrence of an Event of Default
hereunder which has not been cured, to exercise such of the rights and
powers vested in it by this Agreement and to use the same degree of
care and skill in their exercise as a prudent man would exercise or
use under the circumstances in the conduct of his own affairs;
(iv) The Trustee shall not be personally liable for any
action reasonably taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement;
(v) Prior to the occurrence of an Event of Default hereunder,
and after the curing of all such Events of Default which may have
occurred, the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
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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 Sellers.
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 Sellers, 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 makes any representations as to the validity or sufficiency of
this Agreement (other than as specifically set forth in Sections 2.08 and 2.09)
or of any Certificate (other than as to the signature of the Trustee set forth
thereon) or of any Mortgage Loan or related document. Neither the Trustee nor
the Fiscal Agent shall be accountable for the use or application by the Sponsor
of any of the Certificates issued to it or of the proceeds of such
Certificates, or for the use or application of any funds paid to the Sponsor or
the Mortgage Loan Sellers in respect of the assignment of the Mortgage Loans to
the Trust, or any funds deposited in or withdrawn from the Collection 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,
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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 the 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 Collection 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, the exercise and performance of any of the powers and duties
of the Trustee or the Fiscal Agent hereunder; provided that none of the
Trustee, the Fiscal Agent or any of the other above specified Persons shall be
entitled to indemnification pursuant to this Section 8.05(b) for (i) allocable
overhead, (ii) expenses or disbursements incurred or made by or on behalf of
the Trustee or the Fiscal Agent in the normal course of the Trustee's or the
Fiscal Agent's performing its routine duties in accordance with any of the
provisions hereof, (iii) any expense or liability specifically required to be
borne thereby pursuant to the terms hereof, or (iv) any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence in
the performance of the Trustee's or the Fiscal Agent's obligations and duties
hereunder, or by reason of negligent disregard of such obligations or duties,
or as may arise from a breach of any representation, warranty or covenant of
the Trustee or the Fiscal Agent made herein. The provisions of this Section
8.05(b) shall survive any resignation or removal of the Trustee and appointment
of a successor trustee.
SECTION 8.06. Eligibility Requirements for the Trustee.
The Trustee hereunder shall at all times meet the
requirements of Section 26(a)(1) of the Investment Company Act and 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
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examination by federal or state authority; and (v) whose long-term senior
unsecured debt is rated not less than "Aa3" by Moody's and "AA" by S&P (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 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.
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 Sellers, the Master
Servicer, the Special Servicer, the REMIC Administrator and their respective
Affiliates; provided that none of (i) the Depositor or any Person involved in
the organization or operation of the Depositor, (ii) CREI, (iii) SBRC or (iv)
any Affiliate of any of them, may be the Trustee hereunder.
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 Sellers, the Master Servicer, the Special Servicer, the REMIC
Administrator and all the Certificateholders. Upon receiving such notice of
resignation, the Sponsor shall promptly appoint a successor trustee reasonably
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
Sellers, 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 thirty (30) days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Sponsor or the Master Servicer, or if at any
time the Trustee shall become incapable of acting, or shall be adjudged
bankrupt or insolvent, or a receiver of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Sponsor may remove the Trustee and appoint a successor
trustee acceptable to the Master Servicer by written instrument, in duplicate,
which instrument shall be delivered to the Trustee so removed and to the
successor trustee. A copy of such instrument shall be delivered to the Mortgage
Loan Sellers, 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
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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
Sellers, 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.
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
Sellers, the Master Servicer, the Special Servicer, the REMIC Administrator and
to its predecessor trustee an instrument accepting such appointment hereunder,
and thereupon the resignation or removal of the predecessor trustee shall
become effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The predecessor trustee shall deliver to the successor
trustee all Mortgage Files and related documents and statements held by it
hereunder (other than any Mortgage Files and related documents and statements
at the time held on its behalf by a Custodian, which Custodian shall become the
agent of the successor trustee), and the Sponsor, the Mortgage Loan Sellers,
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 ten (10) days after
acceptance of appointment by the successor trustee, the successor trustee shall
cause such notice to be mailed at the expense of the Master Servicer.
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SECTION 8.09. Merger or Consolidation of the Trustee or the
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 fifteen (15) days after the receipt by it of a request to do so, or in
case an Event of Default in respect of the Master Servicer shall have occurred
and be continuing, the Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 8.06
hereunder and no notice to Holders of Certificates of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 8.08
hereof.
(b) In the case of any appointment of a co-trustee or
separate trustee pursuant to this Section 8.10 all rights, powers, duties and
obligations conferred or imposed upon the Trustee shall be conferred or imposed
upon and exercised or performed by the Trustee and such separate trustee or
co-trustee jointly, except to the extent that under any law of any jurisdiction
in which any particular act or acts are to be performed (whether as Trustee
hereunder or as successor to the Master Servicer, the Special Servicer or the
REMIC Administrator hereunder), the Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust Fund or any portion
thereof in any such jurisdiction) shall be exercised and performed by such
separate trustee or co-trustee at the direction of the Trustee.
(c) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
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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 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, shall maintain errors and omissions insurance
and a fidelity bond meeting the requirements of Fannie Mae for mortgage loan
document custodians acting on its behalf and shall not be the Sponsor, the
Mortgage Loan Sellers, 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.
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(b) Promptly following the first sale of any Non-Registered
Certificate to an Independent third party, the Sponsor shall provide to the
Trustee ten (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 ten (10) copies of the private placement
memorandum or disclosure document, as revised, amended or supplemented. The
Trustee shall maintain at its Corporate Trust Office and shall on behalf of the
Sponsor, upon reasonable advance written notice, make available during normal
business hours for review by each Rating Agency and by any Certificateholder or
any Certificate Owner or any Person identified to the Trustee by a
Certificateholder or a Certificate Owner as a prospective transferee of a
Certificate or interest therein, originals or copies of the following items:
(i) in the case of a Holder or prospective transferee of a Non-Registered
Certificate, any private placement memorandum or other disclosure document
relating to the Class of Certificates to which such Non-Registered Certificate
belongs, in the form most recently provided to the Trustee; and (ii) in all
cases, (A) this Agreement and the Sub-Servicing Agreements, and any amendments
hereto or thereto, (B) all statements and reports required to be delivered to
Holders of the relevant Class of Certificates pursuant to Section 4.02(a) since
the Closing Date, (C) all reports delivered to the Trustee since the Closing
Date pursuant to Section 4.02(b) and Section 4.02(c), (D) all Officer's
Certificates delivered to the Trustee since the Closing Date pursuant to
Section 3.13, (E) all accountants' reports delivered to the Trustee since the
Closing Date pursuant to Section 3.14, (F) the most recent inspection report
prepared by the Master Servicer or Special Servicer, as the case may be, and
delivered to the Trustee in respect of each Mortgaged Property pursuant to
Section 3.12(a), (G) all Borrower financial statements and Mortgaged Property
operating statements and rent rolls delivered to the Trustee by the Master
Servicer or the Special Servicer since the Closing Date 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
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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 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 Sellers, 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 downgrading or
withdrawal of the then current ratings on the Certificates.
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SECTION 8.14. Filings with the Securities and Exchange
Commission.
The Trustee shall, at the expense of the Sponsor, prepare for
filing, execute and properly file with the Commission, any and all reports,
statements and information, including, without limitation, Distribution Date
Statements, Delinquent Loan Status Reports, REO Status Reports, Historical Loan
Modification Reports, Special Servicer Loan Status Reports, Historical Loss
Reports and Operating Statement Analyses (exclusive of the actual operating and
financial statements), respecting the Trust Fund and/or the Certificates
required by applicable law, specifically provided herein or otherwise
reasonably requested by the Sponsor to be filed on behalf of the Trust under
the Exchange Act; provided that, in the case of any such items not prepared by
the Trustee, such items shall have been received 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 a format suitable
for conversion to 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 not prepared by it that have not been
received in such EDGAR-compatible format nor shall it have any responsibility
to convert any items not prepared by it to such format. The Sponsor shall
promptly file, and exercise its reasonable best efforts to obtain a favorable
response to, no-action requests to, or requests for other appropriate exemptive
relief from, the Commission regarding the usual and customary exemption from
certain reporting requirements granted to issuers of securities similar to the
Certificates, and shall file a Form 15 in respect of the Trust during the first
January following the Closing Date that it is permitted to do so under the
Exchange Act and the regulations promulgated thereunder.
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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 Sellers, 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 the Majority
Certificateholder of the Controlling Class (other than the Sponsor or either
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 fourth 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), (ii) the exchange by any Sole Certificateholder
of all the Certificates for all Mortgage Loans and each REO Property remaining
in REMIC I, and (iii) 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.
Any Majority Certificateholder of the Controlling Class
(other than the Sponsor or either Mortgage Loan Seller) and the Master
Servicer, in that order of priority, shall have 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 sixty (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 either
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
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Sponsor or either Mortgage Loan Seller) elects to purchase all of the Mortgage
Loans and each REO Property remaining in REMIC I in accordance with the
preceding sentence, the Master Servicer or such Majority Certificateholder, as
applicable, shall deposit in the Distribution Account not later than the Master
Servicer Remittance Date relating to the Distribution Date on which the final
distribution on the Certificates is to occur, an amount in immediately
available funds equal to the above-described purchase price (exclusive of any
portion thereof payable to any Person other than the Certificateholders
pursuant to Section 3.05(a), which portion shall be deposited in the Collection
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 Collection 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.
Any Sole Certificateholder shall have the right to exchange
all of the Certificates for all of the Mortgage Loans and each REO Property
remaining in REMIC I as contemplated by clause (ii) of the second preceding
paragraph by giving written notice to all the parties hereto no later than 60
days prior to the anticipated date of exchange. In the event that the Sole
Certificateholder elects to exchange all of the Certificates for all of the
Mortgage Loans and each REO Property remaining in REMIC I in accordance with
the preceding sentence, the Sole Certificateholder, not later than the Master
Servicer Remittance Date relating to the Distribution Date on which the final
distribution on the Certificates is to occur, shall deposit: (i) in the
Distribution Account an amount in immediately available funds equal to all
amounts then due and owing to the Trustee and/or REMIC Administrator hereunder
that may be withdrawn from the Distribution Account pursuant to Section
3.05(b); and (ii) in the Collection Account an amount in immediately available
funds equal to all amounts then due and owing to the Master Servicer, the
Special Servicer, the Trustee and/or the REMIC Administrator hereunder that may
be withdrawn from the Collection Account pursuant to Section 3.05(a). 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 Collection Account pursuant to the first paragraph of Section 3.04(b).
Upon confirmation that such final deposits have been made and following the
surrender of all the Certificates on the Final Distribution Date, the Trustee
shall release or cause to be released to the Sole Certificateholder 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 Sole
Certificateholder, 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 paragraphs, 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 a 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
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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
Certificateholder(s) 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, and any Prepayment Premiums
distributable on, such date that is allocable to payments on the relevant Class
in accordance with Section 4.01.
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 (6) months after the time specified in
such notice, the Trustee shall mail a second notice to the remaining
non-tendering Certificateholders to surrender their Certificates for
cancellation in order to receive the final distribution with respect thereto.
If within one year after the second notice all such Certificates shall not have
been surrendered for cancellation, the Trustee, directly or through an agent,
shall take such reasonable steps to contact the remaining non-tendering
Certificateholders concerning the surrender of their Certificates as it shall
deem appropriate. The costs and expenses of holding such funds in trust and of
contacting such Certificateholders following the first anniversary of the
delivery of such second notice to the non-tendering Certificateholders shall be
paid out of such funds. No interest shall accrue or be payable to any former
Holder on any amount held in trust hereunder. If by the second anniversary of
the delivery of such second notice, all of the Certificates shall not have been
surrendered for cancellation, then (subject to applicable escheat laws) the
Class R-III 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 any Majority
Certificateholder of the Controlling Class (other than the Sponsor or either
Mortgage Loan Seller) purchases, or the Sole Certificateholder exchanges all
the Certificates for, 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,
REMIC II and REMIC III) 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, REMIC II or
REMIC III as defined in Section 860F of the Code or cause REMIC I, REMIC II or
REMIC III to fail to qualify as a REMIC at any time that any Certificates are
outstanding:
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(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, REMIC II and REMIC III 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, the Majority Certificateholder of the Controlling Class or
the Sole Certificateholder, as applicable, for cash and/or
Certificates; 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, REMIC II and REMIC III 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, REMIC II and REMIC III 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, REMIC II and REMIC III 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 REMIC II Regular Interests are hereby designated as the "regular
interests" (within the meaning of Section 860G(a)(1) of the Code), in REMIC II,
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. 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, Class K and Class L Certificates are
hereby designated as the "regular interests" (within the meaning of Section
860G(a)(1) of the Code), and the Class R-III Certificates are hereby designated
as the sole class of "residual interests" (within the meaning of Section
860G(a)(2) of the Code), in REMIC III. 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 any of REMIC I, REMIC II or REMIC III
(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, REMIC II and REMIC III 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, REMIC II and REMIC III 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, REMIC II or REMIC
III, 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, REMIC II
or REMIC III, and otherwise act on behalf of each of REMIC I, REMIC II and
REMIC III 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, REMIC II and REMIC III.
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, REMIC
II and REMIC III. The expenses of preparing and filing such returns, and
performing its duties under Section 10.01(f), 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, REMIC II and REMIC III 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 a Permitted
Transferee; (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, REMIC II and REMIC III.
(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, REMIC II and REMIC III 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 any of REMIC I, REMIC II or REMIC III 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 any 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, REMIC II or REMIC
III, or causing REMIC I, REMIC II or REMIC III 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, REMIC
II or REMIC III 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 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.
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(h) In the event that any tax is imposed on REMIC I, REMIC II
or REMIC III, including, without limitation, "prohibited transactions" taxes as
defined in Section 860F(a)(2) of the Code, any tax on "net income from
foreclosure property" as defined in Section 860G(c) of the Code, any taxes on
contributions to REMIC I, REMIC II or REMIC III after the Startup Day pursuant
to Section 860G(d) of the Code, and any other tax imposed by the Code or any
applicable provisions of state or local tax laws (other than any tax permitted
to be incurred by the Special Servicer pursuant to Section 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 Article IV, Article VIII or 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, REMIC II and REMIC III 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, REMIC II or REMIC III 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 CREI or SBRC regarding the Mortgage
Loans or as otherwise provided for in Section 2.03, (B) the foreclosure,
default or imminent default of a Mortgage Loan, including but not limited to,
the sale or other disposition of a Mortgaged Property acquired by deed-in-lieu
of foreclosure, (C) the bankruptcy of REMIC I, REMIC II or REMIC III, or (D)
the termination of the Trust pursuant to Article IX of this Agreement); (ii)
the sale or disposition of any investments in the Collection Account, the
Interest Reserve 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
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defaulted Mortgage Loan and other than Permitted Investments acquired in
connection with the investment of funds in the Collection Account, the Interest
Reserve 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, REMIC II or REMIC III 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, REMIC II or REMIC III 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, REMIC II or REMIC
III will receive a fee or other compensation for services or, to the extent it
is within the control of such Person, permit REMIC I, REMIC II or REMIC III 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, REMIC II or REMIC III will consist of "qualified
mortgages" as defined in Section 860G(a)(3) of the Code and "permitted
investments" as defined in Section 860G(a)(5) of the Code.
SECTION 10.02. Sponsor, Master Servicer, Special Servicer,
Trustee and Fiscal Agent to Cooperate with
REMIC Administrator.
(a) The Sponsor shall provide or cause to be provided to the
REMIC Administrator, within ten (10) days after the Closing Date, all
information or data that the REMIC Administrator reasonably determines to be
relevant for tax purposes as to the valuations and issue prices of the
Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flow of the Certificates.
(b) The Master Servicer, the Special Servicer, the Trustee
and the Fiscal Agent shall each furnish such reports, certifications and
information, and access to such books and records maintained thereby, as may
relate to the Certificates or the Trust Fund and as shall be reasonably
requested by the REMIC Administrator in order to enable it to perform its
duties hereunder.
SECTION 10.03. Fees of the REMIC Administrator.
In the event the Trustee and the REMIC Administrator are not
the same Person, the Trustee covenants and agrees to pay to the REMIC
Administrator from time to time, and the REMIC Administrator shall be entitled
to, reasonable compensation (as set forth in a written agreement between the
Trustee and the REMIC Administrator) for all services rendered by it in the
exercise and performance of any of the obligations and duties of the REMIC
Administrator hereunder.
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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, REMIC II or REMIC III 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, REMIC II or
REMIC III; (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 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 of this Agreement shall (i) reduce in any
manner the amount of, or delay the timing of, payments on any Certificate
without the written consent of the Holder of such Certificate, (ii) adversely
affect in any material respect the interests of the Holders of any Class of
Certificates in a manner other than as described in clause (b)(i) without the
written consent of the Holders of all Certificates of such Class, or (iii)
modify the provisions of this Section 11.01 without the written consent of the
Holders of all Certificates then-outstanding. Notwithstanding any other
provision of this Agreement, for purposes of the giving or withholding of
consents pursuant to this Section 11.01, Certificates registered in the name of
the Sponsor, CREI, SBRC, the Master Servicer, the Special Servicer or any
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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, REMIC II or REMIC III pursuant to
the REMIC Provisions or cause REMIC I, REMIC II or REMIC III 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.
(b) For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
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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 sixty (60) days after its receipt of such notice, request and
offer of indemnity, shall have neglected or refused to institute any such
action, suit or proceeding. It is understood and intended, and expressly
covenanted by each Certificateholder with every other Certificateholder and the
Trustee, that no one or more Holders of Certificates shall have any right in
any manner whatsoever by virtue of any provision of this Agreement to affect,
disturb or prejudice the rights of the Holders of any other of such
Certificates, or to obtain or seek to obtain priority over or preference to any
other such Holder, which priority or preference is not otherwise provided for
herein, or to enforce any right under this Agreement, except in the manner
herein provided and for the equal, ratable and common benefit of all
Certificateholders. For the protection and enforcement of the provisions of
this Section 11.03(c), each and every Certificateholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.
SECTION 11.04. Governing Law.
This Agreement and the Certificates shall be construed in
accordance with the internal laws of the State of New York applicable to
agreements made and to be performed in said State, and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
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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 CREI, 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 SBRC, Salomon Brothers Realty Corp., Seven World
Trade Center, 29th Floor, New York, New York 10048, Attention: Angela Hutzel,
telecopy number (212) 783-2096; (4) in the case of the Master Servicer, AMRESCO
Services, L.P., 235 Peachtree Street, N.E., Suite 900 Atlanta, Georgia 30303,
Attention: David Sisom and Deputy General Counsel, telecopy number (404)
654-2500, with a copy to Weil, Gotshal & Manges, LLP, 767 Fifth Avenue, New
York, New York 10153-0114, Attention: Paul Cohn, telecopy number (212)
310-8007; (5) in the case of the Special Servicer, Allied Capital Corporation,
1919 Pennsylvania Avenue NW, 3rd Floor, Washington, DC 20006, Attention: John
M. Scheurer, telecopy number (202) 659-2053; (6) in the case of the Trustee and
REMIC Administrator, LaSalle National Bank, 135 South LaSalle Street, Suite
1625, Chicago, Illinois 60603, Attention: ABS Group - MCFI3 Series 1998-MC3,
telecopy number (312) 904-2084; and (7) 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) Standard & Poor's Rating Services, a division of the
McGraw-Hill Companies, Inc. 26 Broadway, 10th Floor, New York, New York 10004,
Attention: CMBS Surveillance Manager, telecopy number: (212) 208- 0053 or (212)
208-8208; or as to each such Person such other address as may hereafter be
furnished by such Person to the parties hereto in writing. Any communication
required or permitted to be delivered to a Certificateholder shall be deemed to
have been duly given when mailed first class, postage prepaid, to the address
of such Holder as shown in the Certificate Register.
SECTION 11.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions
or terms of this Agreement shall be for any reason whatsoever held invalid,
then such covenants, agreements, provisions or terms shall be deemed severable
from the remaining covenants, agreements, provisions or terms of this Agreement
and shall in no way affect the validity or enforceability of the other
provisions of this Agreement or of the Certificates or the rights of the
Holders thereof.
SECTION 11.07. Successors and Assigns; Beneficiaries.
The provisions of this Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the parties
hereto, and all such provisions shall inure to the benefit of the
Certificateholders. Except as specifically contemplated by Sections 3.24, 6.03
and 8.05, no other person, including, without limitation, any Borrower, shall
be entitled to any benefit or equitable right, remedy or claim under this
Agreement.
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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 CREI or SBRC, as
applicable, pursuant to Section 2.03.
(b) The Master Servicer shall promptly provide notice to each
Rating Agency with respect to each of the following of which it has actual
knowledge:
(i) the resignation or removal of the Trustee and the
appointment of a successor;
(ii) any change in the location of the Collection Account or
the Interest Reserve 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.
-200-
<PAGE>
(d) Each of the Master Servicer and the Special Servicer
shall promptly furnish to each Rating Agency copies of the following:
(i) each of its annual statements as to compliance described
in Section 3.13; and
(ii) each of its annual independent public accountants'
servicing reports described in Section 3.14, if any.
In addition, upon request, each of the Master Servicer and the Special Servicer
shall promptly furnish to each Rating Agency copies or summaries (in such
format as will be acceptable to the Rating Agency) of any of the written
reports (including, without limitation, reports regarding property inspections)
prepared, and any of the quarterly and annual operating statements, rent rolls
and financial statements collected, by it pursuant to Section 3.12(b).
(e) The Trustee shall promptly furnish to each Rating Agency
on a monthly basis copies of the statements to the Holders of the REMIC III
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.
-201-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their
names to be signed hereto by their respective officers or representatives
thereunto duly authorized, in each case as of the day and year first above
written.
MORTGAGE CAPITAL FUNDING, INC.,
Sponsor
By: /s/ Richard L. Jarocki, Jr.
----------------------------------
Name: Richard L. Jarocki, Jr.
Title: President
SALOMON BROTHERS REALTY CORP.
Mortgage Loan Seller
By: /s/ Angela M. Hutzel
----------------------------------
Name: Angela M. Hutzel
Title: Authorized Agent
CITICORP REAL ESTATE, INC.,
Mortgage Loan Seller
By: /s/ Mark Horinbein
----------------------------------
Name: Mark Horinbein
Title: Authorized Signatory
AMRESCO SERVICES, L.P.,
Master Servicer
By: AMRESCO Mortgage Capital, Inc.
its general partner
By: /s/ Daniel B. Kirby
----------------------------------
Name: Daniel B. Kirby
Title: Senior Vice President
ALLIED CAPITAL CORPORATION
Special Servicer
By: /s/ John M. Scheurer
----------------------------------
Name: John M. Scheurer
Title: Managing Director
<PAGE>
LASALLE NATIONAL BANK,
Trustee and REMIC Administrator
By: /s/ Michael B. Evans
----------------------------------
Name: Michael B. Evans
Title: First Vice President
ABN AMRO BANK N.V.,
Fiscal Agent
By: /s/ Irene Pazik
----------------------------------
Name: Irene Pazik
Title: Vice President
By: /s/ Robert C. Smolka
----------------------------------
Name: Robert C. Smolka
Title: Group Vice President
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 30th day of December, 1998, before me, a notary public
in and for said State, personally appeared Mark Horinbein, known to me to be a
Authorized Signatory 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/ Rita E. Leahy
------------------------------
Notary Public
[Notarial Seal]
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 30th day of December, 1998, before me, a notary public
in and for said State, personally appeared Richard L. Jarocki, known to me to
be a President 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/ Rita E. Leahy
------------------------------
Notary Public
[Notarial Seal]
<PAGE>
STATE OF ILLINOIS )
) ss.:
COUNTY OF COOK )
On the 21st day of December, 1998, before me, Carissa Jean
Pogne, a notary public in and for said State, personally appeared Michael B.
Evans, known to me to be a Fisrt 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 Pogne
------------------------------
Notary Public
[Notarial Seal]
<PAGE>
STATE OF ILLINOIS )
) ss.:
COUNTY OF COOK )
On the 21st day of December, 1998, before me, Carissa Jean
Pogne, a notary public in and for said State, personally appeared Irene Pazik,
Vice President and Robert C. Smolka, Group Vice President, of ABN AMRO BANK
N.V., one of the entities that executed the within instrument, and also known
to me to be the 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 Pogne
------------------------------
Notary Public
[Notarial Seal]
<PAGE>
STATE OF GEORGIA )
) ss.:
COUNTY OF FULTON )
On the 21st day of December, 1998, before me, a notary public
in and for said State, personally appeared Daniel B. Kirby, known to me to be a
Senior Vice President of AMRESCO Mortgage Capital Inc., the general partner of
AMRESCO SERVICES, L.P., 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/ Elizabeth Pye
------------------------------
Notary Public
[Notarial Seal]
<PAGE>
DISTRICT OF COLUMBIA )
) ss.:
)
On the 22nd day of December, 1998, before me, a notary
public in and for said State, personally appeared John M. Scheurer, known to me
to be a Managing Director of ALLIED 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/ Kristine M. Schlee
------------------------------
Notary Public
[Notarial Seal]
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 21st day of December, 1998, before me, a notary public
in and for said State, personally appeared Angela M. Hutzel, known to me to be
a Authorized Agent of SALOMON BROTHERS REALTY CORP., 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/ Astrid Percy
------------------------------
Notary Public
[Notarial Seal]
<PAGE>
SCHEDULE I
Mortgage Loan Schedule
<PAGE>
<TABLE>
<CAPTION>
Control Loan Property
Number Number Number Property Name Property Address
- ------ ------ ------ ------------- ----------------
<S> <C> <C> <C> <C>
S001 101 515 22nd Street NW 515 22nd Street NW
S002 103 Master Realty Portfolio
S003 103 103A Ramada Inn DFW/West 2155 West Airport Freeway
S004 103 103B Historic Suites of America Hotel 612 Central Avenue
S005 103 103C Ramada Inn Downtown 401 North 1st Street
S006 103 103D Soho VI 700-712 Broadway
S007 103 103E River Market 302-314, 412-416, 309-313, 502, 509, 512
Delaware St. & 500-508 Walnut/15-23
East 5th St.
S008 104 Ocean City Factory Outlets 12741 Ocean Gateway / N/s of route 50
S009 107 Waterford Wedgwood Facility 1330 Campus Parkway
S010 108 Victorville Towne Center 12351-12353 Mariposa Road
S011 109 University Park Towers 2261 Sherman Circle South
S012 111 Woodland Apartments 1201 Centre Road
S013 114 Meadows at Hickory Lake Apartments 2400 Old Concord Road
S014 115 200 Valley Road - Mt. Arlington Corporate Center 200 Valley Road
S015 116 Park Oaks Shopping Ctr. 2407 West Airport Freeway
S016 118 Gardens at Hickory Lake Apartments 2400 Old Concord Road
S017 120 Edmonston Crossing 1010-1020 Rockville Pike
S018 122 Summer Place Apartments 101 Summer Place Drive
S019 124 HTW Portfolio
S020 124 124A Waverly Plaza East Side Emmitt Avenue
S021 124 124B Walmart Center 512-520 North Webster Street
S022 124 124C East Hills Mall 5278 Irvin Road
S023 125 Linens 'N Things Retail Building 1475 - 11th Ave Northwest
S024 126 The Deer Cross Apartments 3000 South First Street
S025 127 Susse Chalet Hotel 371 George Washington Boulevard
S026 129 Woodhaven Apartments 1903-145 Woodhaven Circle
S027 130 Fallfax Commercial Center 7630-7648 Lee Highway & 2822-2830 Fallfax Drive
S028 131 Best Western Adams Inn 29 Hancock Street
S029 132 Bethesda East Office Center 4405 East-West Highway
S030 133 Comfort Inn - Sea Tac 19333 Pacific Hwy. South
S031 134 Times Square Shopping Center 4012, 4016 & 4020 S. Rainbow Blvd. &
6820 W. Flamingo Road
S032 135 Comfort Inn-Marietta 700 Pike Street
S033 136 Hacienda Del Sol 644 Alvarado Avenue
S034 138 Premier Cruise Lines 400 Challenger Road
S035 139 100 Valley Road - Mount Arlington Corporate Center 100 Valley Road
S036 141 Sierra Center Portfolio
S037 141 141A Woodland Court 3921-3953 South 76th Street
S038 141 141B East Towne Plaza 1414-1438 East Brady Street
S039 142 Sherwood Mesa Shopping Center 1107-1161 East Main Street
S040 143 Forest Hills Center 63-27/35 108th Street
S041 144 Talbott Shopping Center 1043-1099 Rockville Pike
S042 145 Sunrise Plaza Shopping Center 31070-31188 Cortez Boulevard
S043 146 Park Central Apartments 5702 50th Street
S044 147 New Kent Crossing Shopping Center 2581 - 2597 New Kent Highway
S045 148 Evergreen Marketplace 30790,30810 & 30901 Stagecoach Boulevard
S046 151 Shoppes of Killian 10834 S.W. 104th Street
S047 152 Days Inn of Orlando 2425 Frontage Road
S048 153 10 Victor Square 10 Victor Square
S049 154 The Cosmopolitan 145 East 48th Street
S050 155 Arbors at Hickory Lake 2400 Old Concord Road
S051 156 Cochran Avenue Apartments 342-346 South Cochran Avenue
S052 159 Garden Ridge Apartments 6517 Melody Lane
S053 160 Clermont Shopping Center 721-791 East State Road 50
S054 161 Alamosa Plaza Commercial Retail & Office Center 2929 & 2949 East Desert Inn Road
S055 163 Hampton Inn-Aiken, SC 100 Tamil Drive
S056 165 Mount Vernon Centre 521-545 Saint Paul Place
S057 166 Federal Express Facility 18115 South Main Street
S058 172 Summit Bank Plaza 213 Summerhill Road
S059 174 Deerwood I Apartments 100 Champions Drive
S060 175 Maple Springs Medical Center 10810 Darnestown Road
S061 176 Winding Creek Apartment 5071 Ooltewah-Ringgold Road
S062 177 Shoney's Inn of Augusta 3023 Washington Road
S063 178 Winona Quality Inn 956 Mankato Avenue
S064 179 Camilla Marketplace 129 U.S Highway 19 North
S065 181 80 Evergreen Avenue 80 Evergreen Avenue
S066 182 Park Street Office Building 115 Park Street, S.E.
S067 183 The Mode Building 802 West Idaho Street
S068 184 Food Lion Grocery Store 300 Henslee Drive (Highway 70 Bypass)
S069 185 East Hill Carriage Square Shopping Center 10211 S.E. 256th Street
S070 187 Colonial Specialties Building 9390 South 300 West
S071 188 Education America Building 300 East Loop 820
S072 189 Westwood Apartments 2 East Regal Street
S073 190 Park Plaza Mall 400 10th Street Southeast
S074 192 Bennett Apartments/Edgepark Apartments Portfolio
S075 192 192A Bennett Apartments 20-30 East Morris Street
S076 192 192B Edgepark Apartments 1016 Amherst Street
S077 193 Town Square Shopping Center 372-450 East 12300 South
S078 194 Roy West Shopping Center 3500 West 4800 South
S079 195 Eastgate Garden Apartments 474 Old State Route 74
S080 196 Willowgrove Apartments/Lin-Nor Apartments Portfolio
S081 196 196A Willowgrove Apartments 223 Elmwood Avenue
S082 196 196B Lin-Nor Apartments 1-19 Linwood Avenue
S083 198 Powder Mill Station Shopping Center 11101 Baltimore Avenue
S084 199 Paradise Plaza Shopping Center 4080 Paradise Road
S085 200 Tropicana Topaz Shopping Center 2554 East Tropicana Avenue
S086 201 Northchase Professional Park Building One 400 Professional Park Drive
S087 202 20 Crooke Avenue 20 Crooke Avenue
S088 204 Nevada Bob's Plaza 7303 East Main Street
S089 206 Watertower Office Building 6198 Butler Pike
S090 207 University of Phoenix 5340 McNutt Road
S091 209 Casa Linda Apartments 5750 North Fresno Street
S092 210 Blockbuster Video Store 870 West Williams Avenue
S093 211 3804-3808 North Wilson Boulevard 3804-3808 North Wilson Boulevard
S094 212 Fort Washington Office Center 260 New York Drive
S095 214 The Amigos Del Sol Apartments 10009 Rushing Drive
S096 215 Lakeside Apartments 112 S. Little Flower Road
S097 216 Deerwood II Apartments 100 Temple Blvd.
S098 218 214 West 30th Street 214 West 30th Street
S099 219 Art-Deco Supermarket 1431-1435 Washington Ave.
S100 222 Sandy Pointe Shopping Center 7800 South and 700 East
S101 224 Island Plaza Shopping Center 848-862 Long Island Ave.
S102 225 909 Park Avenue 909 Park Avenue
S103 226 647 9th Avenue 647 9th Avenue
S104 227 5775 Bridge Street 5775 Bridge Street
S105 229 Oak Shadows Mobile Home Park 1330 Calaveritas Road
S106 231 Shirley 395 Business Center 2575-2615 Shirlington Road
S107 232 Oyster Bay Plaza 4201-4207 Kitsap Way
S108 247 Kennedy Space Center Days Inn 3755 Cheney Highway
S109 251 Best Western Gateway Inn 2585 Seaboard Avenue
S110 252 El Paseo Village 73405-73445 El Paseo Drive
S111 253 Lee Gardens Apartments 16, 18, and 20 Israel Zupnik Drive
S112 254 Hollywood Bldgs. 1,2,3,4A&B, 5A&B 3835-4011 Pembroke Rd.
S113 255 Dixie Business Center 2044, 2046-2048 McKinley Street
S114 256 I-95 Building 2000 S.W.30th Avenue
S115 257 Parkwood Tract 3101 S.W. 25th Street
S116 258 Building V 1899-1911 S.W. 31st Avenue
S117 259 Buildings "S", "T", and "U" 1817-1855 S.W. 31st Avenue
S118 260 Buildings "E", "F", "G" 1975-1985 South Park Road & 1804 SW 31st Avenue
S119 262 Alvin Center 2477-2491 Alvin Avenue
S120 268 Jamestown Square I and II Apartments 1263-1380 Eldorado Street
S121 271 Jackson/Sherwood Apts. & Thackery Ave. Apts. 2683-2760 Jackson Avenue N.W. &
2871-2883 Thackery Avenue
S122 275 Highland Office Building 5 Catamore Boulevard
S123 277 Apple Villa Apartments 1705 State Highway 37
S124 278 Fountaingrove Medical Office Building
(Cancer Center) 3555 Round Barn Circle
S125 279 College Square Apartments 2829-2847 Combs Lane and
3001-3056 Clinchview Drive
S126 280 Racanelli Portfolio I
S127 280 280A 15 Rasons Court 15 Rasons Court
S128 280 280B 33 Ranick Road 33 Ranick Road
S129 280 280C 26 Ranick Road 26 Ranick Road
S130 281 Racanelli Portfolio II
S131 281 281A 290 Spagnoli Road 290 Spagnoli Road
S132 281 281B 90 Nicon Court 90 Nicon Court
S133 281 281C 780 Park Avenue 780 Park Avenue
S134 281 281D 300 Spagnoli Road 300 Spagnoli Road
S135 282 Shrewsbury Commons Shopping Center Forrest Avenue East and Mount Airy Road
S136 283 American Foundation for Biological Research Bldg. 12111 Parklawn Drive
S137 290 59th Avenue and Thunderbird Road 5890 & 5894 West Thunderbird Road
S138 291 Canton-Central Bank Shopping Center 16800 N.W. 67th Avenue
S139 292 Oceanside Caldor/Gold Coast Plaza & Swan Nursery
Commons Portfolio
S140 292 292A Oceanside Caldor/Gold Coast Plaza 3544-3600 Long Beach Road
S141 292 292B Swan Nursery Commons 655 Montauk Highway
S142 293 558 Broadway 558 Broadway
S143 294 183-02 through 183-14 Horace Harding Expressway 183-02 through 183-14 Horace Harding Expressway
S144 295 90 Saint Andrews Place 90 Saint Andrews Place
S145 297 Hunter Office Building 11495 Sunset Hills Road
S146 301 385 Franklin Avenue 385 Franklin Avenue
S147 303 Expressway Building 91-31 Queens Boulevard
S148 499 Kranzco Portfolio
S149 499 499A Douglasville Crossing 5983 Stewart Parkway
S150 499 499B Snellville Oaks 2135 East Main Street
S151 499 499C Tifton Corners 121 S. Virginia Avenue
S152 499 499D Village Oaks 6241-51 N. Davis Highway
S153 499 499E Statler Crossing 851 Statler Boulevard
S154 499 499F Pickaway Crossing 23625 U.S. Route 23
S155 499 499G Vidalia Walmart 2305 Lyons Highway
S156 499 499H Meeting Square 1200 S. Russell Street
S157 499 499I Summerville Center 14 Trion Road
C001 6000202 332 Elwye Center 234 Fraley Boulevard
C002 6000239 380 Flinthills Mall 18th and Industrial Road
C003 6000244 387 67 Mason Street 67 Mason Street
C004 6000245 388 116 Post Road 112-118 Boston Post Road
C005 6110108 874 Bank One Office Building 1001 E. Southmore
C006 6110118 885 1601 N. 39th Street 1601 N. 39th Street
C007 6110122 890 Royal Manor Apts. 1519 50th Street
C008 6201397 3047 Eastpointe Plaza I-79 & U.S. Route 50
C009 6201572 3222 Comfort Inn - Clinton NE side of I-26, NW of SC Highway 56
C010 6202047 3698 Fairfield Inn - Layton 1740 North 1200 West
C011 6202220 4673 Cineplex Odeon Theater 1620 75th Street
C012 6202465 4117 Washington Heights Apartments 168 Washington Street
C013 6202480 4132 Park Villa Apartments 1800 E. 38th Street
C014 6202484 4136 Chesapeake Yachting Center 400 Wagner Lane and Frog Mortar Creek
C015 6202649 4300 Tower Park Bldgs. 100 and 200 131 & 201 Tower Park Dr.
C016 6202658 4706 Richman Gordman 1/2 Price Stores 2590 Hubbell Ave
C017 6202701 4709 Savers Plaza 3517-3553 West Bell Road
C018 6202747 4398 383 Route 46 West 383 Route 46 West
C019 6202752 4403 Brookside Mobile Home Park Porto Road
C020 6202753 4404 Menlo Park Office Center 1000 El Camino Real
C021 6202821 University Plaza/Winding River Plaza Portfolio
C022 6202821 4472 University Plaza 90-116 Flock Road
C023 6202821 4473 Winding River Plaza 309 Main Street
C024 6202836 4487 Lakeover Offices 101 Business Park Drive
C025 6202837 4488 Business Park Offices (200 Business Park) 101 Business Park Drive
C026 6600048 974 Crown Professional Building 3662 Katella Avenue
C027 6600056 987 Southwind Village Center 3195 Players Club Parkway
C028 6600060 992 Hampton Inn-Bossier,LA 1005 Gould Drive
C029 6600061 993 Elmtree Townhouse Apartments Route 11 & Elmtree Drive
C030 6600066 998 Eagleview Apartments 1803 Prairie Road
C031 6600131 1071 Larchmont Village 206-226 N. Larchmont Blvds.
C032 6600135 1078 Health Net Building 20151 Nordhoff Street
C033 6600163 1116 Holiday Inn-Murfreesboro 2227 Old Fort Parkway
C034 6600164 1117 Brookwood Apartments 5310 26th Street West
C035 6600165 1119 Arbor Park Apartments 309 Southwest 16th Avenue
C036 6600175 1129 Sunharbor Manor Nursing Home 255 Warner Avenue
C037 6600180 1135 River Ridge At Hulen 4920 Overton Ridge Blvd.
C038 6600184 1141 Bardin Square Shopping Center 130 Bardin Road
C039 6600186 1142 Country Day Plaza Shopping Center 5512 Bellaire Drive South
C040 6600210 1170 Circle K Mobile Home Park 827 West Valley Highway
C041 6600220 1186 Starlite Plaza 1812 Pulaski Highway
C042 6600224 1197 Comfort Suites - Jacksonville 130 Workshop Lane
C043 6600225 1198 Holiday Inn Express-Lexington 131 Innkeeper Drive
C044 6600232 1205 Sands Harbor Hotel & Marina 125 Riverside Drive
C045 6600262 1242 Amberley Suites Hotel 5885 Oakbrook Parkway
C046 6600264 1245 Granada Suites Hotel 1302 West Peachtree Street
C047 6600266 1246 Inn at the Peachtrees Hotel 330 W. Peachtree Street
C048 6600267 1247 Canal Winchester Medical Center 6441 Winchester Square Blvd
C049 6600270 1250 Westbourne Morrison Limited 5656-5676 Westbourne Ave
C050 6600286 1269 Marengo Village Apartments Briden Dr. and Johnson St.
C051 6600287 1268 Harvard Square Apartments 201-205 W. Harrison Avenue
C052 6600295 1280 Wyndwood Apartments 55 Regina Drive
C053 6600315 1305 York & Parks Retail Building 9709 York Road
C054 6600331 1323 Marina Park Hotel 340 Biscayne Boulevard
C055 6600332 1324 Market Square Office Building 305 Harrison St.
C056 6600337 1329 The Reynolds Building 788 Shrewsbury Avenue
C057 6600350 1338 Metro Mobile Home Park 103 Moonachie Avenue
C058 6600356 1346 San Marcos Crossroads 204-218 San Marcos Boulevard
C059 6600364 1358 Executive Plaza 10001 Lake Forest Blvd.
C060 6600374 1368 Days Inn- Hollywood, FL 2601 North 29th Avenue
C061 6600397 4737 Fountainbleau Storage & Apts 4040 Tulane Avenue at South Carrollton Avenue
C062 6600413 4752 Marvin D. Love Office Building 725 Marvin D. Love Freeway
C063 6600416 4755 Jackson Place Apartments Hospital Road
C064 6600422 4765 Best Western Mirage 5005 34th Street North
C065 6600423 4766 Holiday Inn Hotel - Trinidad 9995 County Road 69
C066 6600457 4820 Days Inn - Richmond, IN 540 West Eaton Pike
C067 6600471 4831 Hampton Inn-Grand Rapids 4981 28th Street
C068 6600481 4841 Hampton Inn-Saginaw 2222 Tittabawassee
C069 6600507 4878 Howard Johnson-Cincinnati 5410 Ridge Avenue
C070 6600529 5041 Lakeside Plaza 23120 Alicia Parkway
C071 6600599 5117 Greencrest Mobile Home Park 541 W. 15th Avenue
C072 6600610 5132 Shannon Tower Office Building 4405 Mall Boulevard
C073 6600667 5207 Blue Star Storage 17613 Coit Road
C074 6600683 5234 Westminster Executive Plaza-LAM Portfolio 13950 Milton Ave
C075 6600689 5240 Harbor Gateway Garden 19401 South vermont Ave.
C076 6600690 5254 Nexus Garden Plaza 2112 E. 4th Street
C077 6600701 5269 Ramada Inn-Plant City 2011 Wheeler Street
C078 6600702 5076 Thunderbird Plaza 2701-2721 South Collage Avenue
C079 6600708 5070 2401 Research Building 2401 Research Building
C080 6600709 5082 2301 Research Building 2301 Research Building
C081 6600723 5286 10605 Concord Street 10605 Concord Street
C082 6600725 5288 Country View Apartments 4164 St. Elmo Avenue
C083 6600756 5328 Skyline Village MHP 1700 Swanson Drive
C084 6600787 5367 Quadrant Multi-Use Center 1421 N. Lee Trevino Drive
C085 6600789 5368 Prospect Pointe East 401 Curtis Road
C086 6600796 Distribution Portfolio
C087 6600796 5375 Distribution II 711 Distribution Drive
C088 6600796 5377 Transdistribution - WV 5300 Rosemar Road
C089 6600817 5396 Econolite 3360 La Palma Avenue
C090 6600853 5433 Sun River Professional Plaza 720 South Riverside Drive
C091 6600870 5452 CS Hotels 1746 Ocean Avenue
C092 6600912 376 168 Canal 168-180 Canal Street
C093 6600914 385 300 Rosewood Drive 300 Rosewood Drive
C094 6600915 386 35 Otis Street 35 Otis Street
C095 6600917 403 850 Boylston Street 850 Boylston Street
C096 6600950 5530 Best Western Metro Inn 99 Spring St.
C097 6601050 Day Care Centers Portfolio
C098 6601050 5641 Ashburn Farms II 43323 Rail Stop Terrace
C099 6601050 5642 Fair Lakes II 4750 Rippling Pond Drive
C100 6601050 5646 Centreville Green 13501 Braddock Road
C101 6601050 5647 McNair Farms 2487 McNair Farm Drive
C102 6601050 5648 South Riding 25400 S. Riding Boulevard
C103 6601050 5649 Sully Station I 5801 Stone Creek Drive
C104 6601050 5650 Centre Ridge 6210 Multiplex Drive
C105 6601050 5661 Cascades 20655 Fernbank Court
C106 6601050 5699 Fair Lakes I 4401 Roger Stover Drive
C107 6601060 5667 Courtyard by Marriott-Jackson 6280 Ridgewood Court
C108 6601061 5666 Courtyard by Marriott-Germantown 7750 Wolf River Blvd.
C109 6601062 5668 Hampton Inn & Suites-Jackson 320 Greymont Avenue
C110 6601063 5669 Courtyard by Marriott-Tupelo 1320 North Gloster Street
C111 6601064 5670 Holiday Inn-Muscatine 2915 North Highway 61
C112 6601080 5691 Levinson Plaza 2 Lincoln Highway (Rt.# 27)
C113 6601139 5757 BV Hollywood Storage Facility 6372 Santa Monica Blvd.
C114 6601152 5774 Fairfax Village Shopping Center 3827-3850 Pennsylvania Avenue, SE
C115 6601288 5919 PK Products Industrial Building 2000 Fox Lane
C116 6601371 6013 Sunny Hills Business Park 211-285 E. Imperial Hwy
C117 6601372 6012 Cerritos Professional Center 10900 E. 183rd Street
C118 6601641 5147 Stoffel Seals-GA One Stoffel Road/GA. 100
C119 6601642 4065 Stoffel Seals-NY 400 High Avenue
C120 6602318 7114 Parcfront Apartments 245-275 Union Blvd.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Remaining Term
Control to Maturity/
Number City State Zip Code Mortgage Rate Original Balance Cut-off Date Balance ARD (months)
- ------ ---- ----- -------- ------------- ---------------- -------------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
S001 Washington DC 20037 6.8100% 21,530,000.00 21,067,759.31 109
S002 7.5000% 19,675,000.00 19,437,073.69 109
S003 Euless TX 76040
S004 Kansas City MO 64105
S005 Phoenix AZ 85004
S006 Kansas City MO 64105
S007 Kansas City MO 64105
S008 West Ocean City MD 21842 7.1500% 16,106,693.00 16,048,097.38 117
S009 Wall Township NJ 07719 7.5100% 11,000,000.00 11,000,000.00 58
S010 Victorville CA 92392 7.2800% 10,400,000.00 10,336,405.23 111
S011 Miramar FL 33025 7.5600% 9,750,000.00 9,643,620.79 107
S012 Wilmington DE 19805 7.2000% 7,550,000.00 7,488,704.66 109
S013 Smyrna GA 30082 9.8500% 6,896,980.00 6,712,570.18 36
S014 Mount Arlington NJ 07856 8.2900% 6,865,926.98 6,839,417.78 114
S015 Irving TX 75062 8.6250% 6,000,000.00 5,781,540.28 50
S016 Smyrna GA 30082 9.8500% 5,317,950.00 5,175,759.70 36
S017 Rockville MD 20852 10.0000% 5,010,000.00 4,920,638.94 91
S018 Merritt Island FL 32953 7.2500% 4,900,000.00 4,863,684.28 110
S019 9.1250% 4,765,000.00 4,665,728.58 98
S020 Waverly OH 45690
S021 Taylorville IL 62568
S022 Huntington WV 25705
S023 Issaquah WA 98027 7.5000% 4,750,000.00 4,702,413.99 107
S024 Lufkin TX 75901 7.7500% 4,725,000.00 4,673,606.23 105
S025 Smithfield RI 02917 8.3400% 4,500,000.00 4,438,193.44 109
S026 Rockledge FL 32955 7.5000% 4,400,000.00 4,366,666.33 109
S027 Falls Church VA 22042 7.3750% 4,300,000.00 4,262,709.41 112
S028 Quincy MA 02171 7.8750% 4,200,000.00 4,144,454.87 112
S029 Bethesda MD 20814 7.7000% 4,100,000.00 4,062,369.89 109
S030 Seattle WA 98188 8.0500% 4,000,000.00 3,952,538.15 109
S031 Las Vegas NV 89103 7.7500% 3,900,000.00 3,859,803.63 106
S032 Marietta OH 45750 7.8000% 3,800,000.00 3,743,119.89 111
S033 Davis CA 95616 7.8100% 3,700,000.00 3,641,389.38 106
S034 Cape Canaveral FL 32920 8.0000% 3,500,000.00 3,470,762.26 108
S035 Mount Arlington NJ 07856 8.0600% 3,450,000.00 3,419,043.14 107
S036 8.0000% 3,300,000.00 3,253,041.56 107
S037 Milwaukee WI 53220
S038 Milwaukee WI 53202
S039 Mesa AZ 85204 9.1250% 3,200,000.00 3,136,610.24 99
S040 Forest Hills NY 11375 7.0000% 3,200,000.00 3,179,018.36 111
S041 Rockville MD 20852 9.8750% 3,165,000.00 3,107,236.98 91
S042 Brooksville FL 34602 8.5000% 3,150,000.00 3,088,159.55 101
S043 Lubbock TX 79414 8.1250% 3,100,000.00 3,060,212.14 108
S044 Bottoms Bridge VA 23141 8.6250% 3,070,000.00 3,033,241.12 101
S045 Evergreen CO 80439 8.5500% 3,000,000.00 2,973,616.75 106
S046 Miami FL 33176 9.2500% 2,750,000.00 2,702,060.19 101
S047 Davenport FL 33837 9.1250% 2,750,000.00 2,653,354.37 98
S048 Scotts Valley CA 95066 7.8800% 2,700,000.00 2,667,014.34 108
S049 New York NY 10017 7.2500% 2,670,000.00 2,618,908.38 110
S050 Smyrna GA 30082 9.8500% 2,545,600.00 2,477,536.78 36
S051 Los Angeles CA 90036 7.6100% 2,504,000.00 2,479,448.32 107
S052 Dallas TX 75231 7.1500% 2,500,000.00 2,481,056.32 110
S053 Clermont FL 34711 8.7500% 2,500,000.00 2,470,801.74 101
S054 Las Vegas NV 89121 8.6250% 2,500,000.00 2,443,659.86 98
S055 Aiken SC 29803 8.5000% 2,430,000.00 2,391,179.09 107
S056 Baltimore MD 21202 8.6300% 2,400,000.00 2,348,321.79 106
S057 Carson CA 90746 7.2500% 2,260,000.00 2,239,942.97 112
S058 East Brunswick NJ 08816 8.0000% 2,100,000.00 2,067,710.04 106
S059 Lufkin TX 75901 7.8100% 1,967,000.00 1,945,462.06 105
S060 Gaithersburg MD 20878 7.6250% 1,910,000.00 1,885,766.59 109
S061 Collegedale (Ooltewah) TN 37363 7.6250% 1,900,000.00 1,881,425.18 107
S062 Augusta GA 30907 8.2800% 1,850,000.00 1,815,461.02 109
S063 Winona MN 55987 8.6250% 1,800,000.00 1,758,533.12 106
S064 Camilla GA 31730 7.1250% 1,800,000.00 1,786,733.15 111
S065 Brooklyn NY 11206 8.2100% 1,750,000.00 1,733,551.05 111
S066 Vienna VA 22180 7.2500% 1,740,000.00 1,726,405.67 111
S067 Boise ID 83707 8.8750% 1,650,000.00 1,617,738.64 100
S068 Dickson TN 37055 7.8750% 1,650,000.00 1,629,339.12 106
S069 Kent WA 98032 9.0000% 1,650,000.00 1,626,726.37 105
S070 Sandy UT 84070 7.6250% 1,600,000.00 1,586,849.11 109
S071 Fort Worth TX 76112 8.0600% 2,567,136.25 2,554,697.81 109
S072 Murray UT 84107 7.6250% 1,500,000.00 1,486,155.81 111
S073 Jamestown ND 58401 7.8750% 1,500,000.00 1,486,038.91 107
S074 8.7500% 1,485,000.00 1,463,198.19 105
S075 Buffalo NY 14214
S076 Buffalo NY 14216
S077 Draper UT 84020 8.8750% 1,450,000.00 1,418,577.48 98
S078 Roy UT 84067 9.0000% 1,411,000.00 1,389,689.04 104
S079 Mt. Carmel OH 45244 7.6500% 1,400,000.00 1,386,380.16 107
S080 8.8000% 1,385,000.00 1,364,827.99 105
S081 Buffalo NY 14222
S082 Buffalo NY 14209
S083 Beltsville MD 20705 8.1600% 1,325,000.00 1,309,632.68 108
S084 Las Vegas NV 89109 9.2500% 1,325,000.00 1,303,203.25 102
S085 Las Vegas NV 89121 8.6500% 1,300,000.00 1,280,607.36 105
S086 Goodlettsville TN 37072 7.6250% 1,300,000.00 1,290,317.32 110
S087 Brooklyn NY 11226 8.0200% 1,300,000.00 1,283,035.33 108
S088 Mesa AZ 85207 9.1500% 1,225,000.00 1,205,735.51 103
S089 Blue Bell PA 19422 8.3600% 1,144,000.00 1,129,855.13 108
S090 Santa Teresa NM 88008 7.3750% 1,125,000.00 1,109,072.17 112
S091 Fresno CA 93711 7.2500% 1,100,000.00 1,091,847.49 110
S092 Fallon NV 89406 9.0000% 1,100,000.00 1,078,913.67 100
S093 Arlington VA 22203 7.3750% 1,100,000.00 1,089,352.76 111
S094 Upper Dublin PA 19034 8.3700% 1,100,000.00 1,086,420.83 108
S095 El Paso TX 79901 8.7500% 1,027,500.00 1,007,009.87 100
S096 El Paso TX 79915 9.0000% 1,000,000.00 983,891.85 103
S097 Lufkin TX 75901 7.8100% 983,000.00 972,236.53 105
S098 New York NY 10001 8.6500% 970,000.00 957,550.69 107
S099 Miami Beach FL 33139 9.2500% 825,000.00 809,801.42 100
S100 Sandy UT 84070 8.8750% 790,000.00 773,719.99 99
S101 Deer Park NY 11729 8.8100% 630,000.00 623,381.02 109
S102 Plainfield NJ 07060 8.5900% 582,000.00 573,848.81 106
S103 New York NY 10036 8.5300% 365,000.00 361,741.17 111
S104 Dewitt NY 13057 8.7300% 285,000.00 282,536.38 111
S105 San Andreas CA 95249 6.9800% 2,500,000.00 2,483,202.34 112
S106 Arlington VA 22206 7.2500% 6,407,939.00 6,351,070.00 112
S107 Bremerton WA 98312 7.2500% 3,050,000.00 3,033,061.54 112
S108 Titusville FL 32780 8.2500% 1,700,000.00 1,681,598.35 112
S109 San Jose CA 95131 7.4700% 8,000,000.00 7,931,837.63 112
S110 Palm Desert CA 92260 7.2970% 4,000,000.00 3,969,725.26 113
S111 Monroe NY 10905 7.3100% 1,726,000.00 1,704,680.15 113
S112 Hollywood FL 33009 8.1250% 5,545,200.00 5,492,120.82 106
S113 Hollywood FL 33009 8.1250% 2,206,400.00 2,185,280.08 106
S114 Pembroke Park FL 33009 8.1250% 902,400.00 893,762.43 106
S115 Pembroke Park FL 33009 8.1250% 917,600.00 908,816.70 106
S116 Pembroke Park FL 33009 8.1250% 1,230,400.00 1,218,622.41 106
S117 Pembroke Park FL 33009 8.1250% 1,600,400.00 1,585,080.40 106
S118 Pembroke Park FL 33009 8.1250% 1,548,800.00 1,533,974.68 106
S119 San Jose CA 95121 7.6250% 1,410,000.00 1,399,978.77 113
S120 Boise ID 83704 7.1250% 1,875,000.00 1,865,828.29 113
S121 Canton, Jackson Township OH 44750 7.3000% 1,240,000.00 1,231,873.70 114
S122 East Providence RI 02914 7.5000% 950,000.00 944,002.27 114
S123 Blountville TN 37620 7.2500% 3,700,000.00 3,687,662.57 115
S124 Santa Rosa CA 95403 7.5000% 3,100,000.00 3,084,076.56 115
S125 Morristown TN 37814 7.2500% 1,750,000.00 1,745,202.59 116
S126 7.6250% 3,975,000.00 3,943,313.76 77
S127 Hauppauge NY 11788
S128 Hauppauge NY 11788
S129 Hauppauge NY 11788
S130 7.6250% 12,975,000.00 12,871,571.36 113
S131 Melville NY 11747
S132 Hauppauge NY 11788
S133 Huntington NY 11743
S134 Mellville NY 11747
S135 Shrewsbury Township PA 17361 7.2000% 17,500,000.00 17,416,002.82 113
S136 Rockville MD 20852 7.3750% 1,420,000.00 1,408,311.87 114
S137 Glendale AZ 85306 7.6250% 1,170,000.00 1,162,785.61 114
S138 Miami FL 33015 7.6250% 1,750,000.00 1,739,209.23 114
S139 7.1200% 49,000,000.00 48,831,052.57 115
S140 Oceanside NY 11572
S141 East Patchogue NY 11712
S142 New York NY 10012 7.4270% 2,100,000.00 2,086,559.38 114
S143 Fresh Meadows NY 11365 7.7770% 1,275,000.00 1,267,362.50 114
S144 Yonkers NY 10705 8.5090% 430,000.00 428,200.52 115
S145 Reston VA 22090 7.5000% 1,500,000.00 1,493,728.33 116
S146 Rockaway NJ 07866 7.0600% 3,365,000.00 3,349,729.50 116
S147 Elmhurst NY 11373 6.8530% 7,000,000.00 6,974,653.95 117
S148 7.0000% 65,900,000.00 65,804,538.20 118
S149 Douglasville GA 30135
S150 Snellville GA 30278
S151 Tifton GA 31794
S152 Pensacola FL 32504
S153 Staunton VA 24401
S154 Circleville OH 43113
S155 Vidalia GA 30474
S156 Jefferson City TN 32504
S157 Summerville GA 30747
C001 Dumfries VA 22026 7.4400% 2,250,000.00 2,240,485.51 116
C002 Emporia KS 66801 7.4500% 4,350,000.00 4,341,061.89 117
C003 Greenwich CT 06830 7.4700% 925,000.00 920,220.78 115
C004 Orange CT 06477 7.4300% 4,000,000.00 3,984,169.42 114
C005 Pasadena TX 77502 7.5500% 2,000,000.00 1,989,826.77 115
C006 Tampa FL 33629 7.0300% 3,500,000.00 3,480,325.65 115
C007 Seattle WA 98105 7.0000% 1,400,000.00 1,393,841.45 114
C008 Clarksburg WV 26301 7.5600% 6,200,000.00 6,176,255.00 114
C009 Clinton SC 29325 7.8800% 1,800,000.00 1,789,428.87 114
C010 Layton UT 94041 7.6100% 2,800,000.00 2,785,924.26 115
C011 Downer's Grove IL 60516 7.1800% 2,200,000.00 2,137,644.56 115
C012 Bloomfield NJ 07003 7.2200% 2,800,000.00 2,790,590.82 115
C013 Savannah GA 31401 7.4600% 2,000,000.00 1,989,646.41 115
C014 Essex MD 21220 7.7000% 2,015,000.00 2,002,750.97 114
C015 Waterloo IA 50702 7.3800% 7,500,000.00 7,469,943.83 114
C016 Des Moines IA 50317 7.6200% 1,225,000.00 1,221,940.88 80
C017 Phoenix AZ 85023 7.5000% 3,800,000.00 3,776,009.48 114
C018 Fairfield NJ 07004 7.5600% 1,700,000.00 1,691,369.69 115
C019 Catskill NY 12414 7.2100% 1,375,000.00 1,368,930.46 116
C020 Menlo Park CA 94025 7.1000% 8,140,000.00 8,099,931.65 113
C021 7.4600% 2,625,000.00 2,618,172.09 116
C022 Hamilton Township NJ 08619
C023 Sayerville NJ 08872
C024 Jackson MS 39213 7.4200% 4,300,000.00 4,277,566.16 115
C025 Jackson MS 39213 7.2300% 4,400,000.00 4,376,188.58 115
C026 Los Alamitos CA 90720 7.3000% 1,200,000.00 1,194,790.81 116
C027 Memphis TN 38138 7.4700% 4,000,000.00 3,974,604.15 114
C028 Bossier City LA 71111 7.5500% 5,700,000.00 5,664,351.24 114
C029 Martinsburg WV 25401 7.2100% 2,570,000.00 2,559,257.83 114
C030 Colorado Springs CO 80909 7.1900% 1,900,000.00 1,890,857.15 113
C031 Los Angeles CA 90004 6.9300% 2,550,000.00 2,542,441.70 116
C032 Chatsworth CA 91311 6.9000% 2,400,000.00 2,382,113.85 116
C033 Murfreesboro TN 37129 7.4600% 5,200,000.00 5,166,923.46 114
C034 Bradenton FL 34207 7.3300% 3,920,000.00 3,907,198.36 115
C035 Gainesville FL 32601 7.2200% 4,800,000.00 4,757,165.56 112
C036 Roslyn Heights NY 11577 7.6100% 2,800,000.00 2,781,051.67 116
C037 Fort Worth TX 76132 7.4000% 3,350,000.00 3,334,545.11 114
C038 Arlington TX 76018 7.2000% 1,050,000.00 1,044,961.29 114
C039 Fort Worth TX 76109 7.2000% 760,000.00 756,352.93 114
C040 Kent WA 98032 7.2700% 1,850,000.00 1,837,808.55 114
C041 Edgewood MD 21040 7.6500% 2,000,000.00 1,990,024.85 115
C042 Jacksonville NC 28546 7.4200% 3,800,000.00 3,775,647.09 114
C043 Lexington SC 29072 7.4500% 3,000,000.00 2,980,881.60 114
C044 Pompano Beach FL 33062 7.8900% 4,000,000.00 3,980,981.15 115
C045 Norcross GA 30093 7.3400% 4,800,000.00 4,768,776.17 114
C046 Atlanta GA 30309 7.2900% 5,200,000.00 5,165,858.76 114
C047 Atlanta GA 30308 7.3400% 3,700,000.00 3,675,931.63 114
C048 Canal Winchester OH 43110 7.5100% 1,000,000.00 995,826.77 116
C049 Columbus OH 43213 7.0800% 4,150,000.00 4,135,554.86 117
C050 Marengo IL 60152 7.3900% 2,350,000.00 2,340,605.89 114
C051 Harvard IL 60033 7.3900% 945,000.00 941,222.40 114
C052 East Windsor CT 06088 7.0100% 7,000,000.00 6,964,759.94 113
C053 Cockeysville MD 21030 7.2900% 1,100,000.00 1,094,115.21 115
C054 Miami FL 33132 7.4000% 5,750,000.00 5,719,884.69 115
C055 Leesburg VA 20175 7.5100% 1,450,000.00 1,447,062.08 117
C056 Tinton Falls NJ 07724 7.4800% 4,000,000.00 3,979,373.34 115
C057 Moonachie NJ 07074 7.3800% 4,635,000.00 4,616,425.30 114
C058 San Marcos CA 92069 7.3700% 2,300,000.00 2,287,883.74 115
C059 New Orleans LA 70127 7.4600% 2,943,750.00 2,926,652.71 115
C060 Hollywood FL 33020 7.3400% 6,225,000.00 6,198,178.37 116
C061 New Orleans LA 70119 6.9000% 5,150,000.00 5,118,275.13 116
C062 Dallas TX 75237 7.4900% 1,100,000.00 1,094,338.71 115
C063 Commerce GA 30529 7.2900% 1,800,000.00 1,794,060.02 115
C064 St. Petersburg FL 33714 7.5600% 2,250,000.00 2,238,577.53 115
C065 Trinidad CO 81082 7.4400% 3,700,000.00 3,676,376.50 114
C066 Richmond IN 47374 7.7500% 1,488,000.00 1,478,123.63 116
C067 Grand Rapids MI 49512 7.4500% 5,500,000.00 5,471,472.23 115
C068 Saginaw MI 48604 7.5100% 4,500,000.00 4,471,643.48 114
C069 Cincinnati OH 45213 7.4100% 2,700,000.00 2,685,886.28 115
C070 Mission Viejo CA 92692 7.3500% 2,300,000.00 2,290,108.50 116
C071 Escondido CA 92025 7.0700% 2,400,000.00 2,393,123.29 116
C072 Union City GA 30291 7.5200% 1,150,000.00 1,145,209.88 116
C073 Dallas TX 75252 7.2700% 2,500,000.00 2,491,583.77 117
C074 Westminster CA 92683 7.5400% 2,890,000.00 2,878,875.39 114
C075 Torrance CA 90502 7.5900% 3,120,000.00 3,108,141.80 114
C076 Santa Ana CA 92705 7.5400% 1,912,500.00 1,905,138.14 114
C077 Plant City FL 33566 7.4500% 3,400,000.00 3,385,649.57 116
C078 Fort Collins CO 80525 7.0400% 2,475,000.00 2,455,341.03 113
C079 Fort Collins CO 80526 7.0400% 1,156,500.00 1,147,313.87 113
C080 Fort Collins CO 80536 7.0400% 1,133,000.00 1,124,000.57 113
C081 Kensington MD 20895 7.2400% 3,750,000.00 3,737,308.70 117
C082 Memphis TN 38128 6.9800% 5,000,000.00 4,982,137.07 115
C083 Rock Springs WY 82901 7.6500% 1,285,000.00 1,280,190.43 78
C084 El Paso TX 79936 7.4800% 2,850,000.00 2,835,303.49 115
C085 Savoy IL 61874 6.8400% 4,500,000.00 4,486,371.08 116
C086 7.9000% 7,575,000.00 7,566,904.59 119
C087 Columbus OH 43228
C088 Parkersburg WV 26101
C089 Anaheim CA 92806 7.1800% 5,000,000.00 4,977,806.03 116
C090 St. George UT 84790 7.1100% 4,100,000.00 4,085,803.61 117
C091 Santa Monica CA 90401 6.8700% 6,325,000.00 6,288,362.36 115
C092 Boston MA 02114 7.2300% 4,000,000.00 3,980,946.31 113
C093 Danvers MA 02923 7.1800% 5,000,000.00 4,975,878.99 113
C094 Westborough MA 01581 7.1500% 3,700,000.00 3,682,014.70 113
C095 Brookline MA 02167 7.2300% 14,000,000.00 13,933,312.04 113
C096 Nashville TN 37207 7.9000% 2,000,000.00 1,988,299.55 114
C097 7.1500% 7,800,000.03 7,748,097.29 115
C098 Ashburn VA 20147
C099 Fairfax VA 22033
C100 Centreville VA 22024
C101 Herndon VA 20171
C102 South Riding VA 20152
C103 Centreville VA 20120
C104 Centreville VA 22020
C105 Sterling VA 20165
C106 Fairfax VA 22033
C107 Jackson MS 39211 7.3100% 6,850,000.00 6,813,494.67 115
C108 Germantown TN 38139 7.3100% 5,400,000.00 5,371,222.10 115
C109 Jackson MS 39201 7.3100% 6,100,000.00 6,067,491.62 115
C110 Tupelo MS 38801 7.3100% 4,650,000.00 4,625,218.99 115
C111 Muscatine IA 52761 7.5800% 3,000,000.00 2,981,343.41 114
C112 Edison NJ 08840 6.6300% 4,800,000.00 4,792,403.91 118
C113 Los Angeles (Hollywood) CA 90038 6.3500% 5,200,000.00 5,186,667.91 118
C114 Washington DC 20020 7.3600% 1,688,750.00 1,683,154.65 117
C115 Elgin IL 60123 7.2100% 4,000,000.00 3,991,225.36 118
C116 Fullerton CA 92835 7.3500% 5,500,000.00 5,492,692.09 118
C117 Cerritos CA 90701 7.3000% 5,850,000.00 5,842,129.18 118
C118 Tallapoosa GA 30176 7.8000% 1,500,000.00 1,492,738.12 115
C119 Nyack NY 10960 7.8000% 1,800,000.00 1,791,285.81 115
C120 St. Louis MO 63108 7.0000% 14,000,000.00 13,979,719.79 118
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Control Scheduled Due Scheduled Administrative Sub-Servicing Ownership
Number Maturity Date Date P&I Payment Fee Rate Fee Rate Interest
------ ------------- ---- ----------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
S001 01/01/08 1 164,475.28 0.0638% 0.0800% Fee Simple
S002 01/01/08 1 145,396.51 0.0638% 0.0800%
S003 Fee Simple
S004 Fee Simple
S005 Leasehold
S006 Fee Simple
S007 Fee Simple
S008 09/01/08 1 115,385.00 0.0638% 0.0800% Leasehold
S009 10/01/23 1 68,841.67 0.0638% 0.0800% Fee Simple
S010 03/01/08 1 71,158.08 0.0638% 0.0800% Fee Simple
S011 11/01/07 1 69,303.23 0.0638% 0.0800% Fee Simple
S012 01/01/08 1 51,248.51 0.0638% 0.0800% Fee Simple
S013 12/01/01 1 59,762.85 0.0638% 0.0800% Fee Simple
S014 06/01/08 1 51,774.62 0.0638% 0.0800% Fee Simple
S015 02/01/03 1 48,820.09 0.0638% 0.0800% Fee Simple
S016 12/01/01 1 46,080.44 0.0638% 0.0800% Fee Simple
S017 07/01/06 1 44,486.82 0.0638% 0.0800% Fee Simple
S018 02/01/08 1 33,426.64 0.0638% 0.0800% Fee Simple
S019 02/01/07 1 40,396.37 0.0638% 0.0800%
S020 Fee Simple
S021 Fee Simple
S022 Fee Simple
S023 11/01/07 1 33,212.69 0.0638% 0.0800% Fee Simple
S024 09/01/07 1 34,192.50 0.0638% 0.0800% Fee Simple
S025 01/01/08 1 36,701.23 0.0638% 0.0800% Fee Simple
S026 01/01/08 1 30,765.44 0.0638% 0.0800% Fee Simple
S027 04/01/08 1 31,427.83 0.0638% 0.0800% Fee Simple
S028 04/01/08 1 34,804.45 0.0638% 0.0800% Fee Simple
S029 01/01/08 1 29,934.91 0.0638% 0.0800% Fee Simple
S030 01/01/08 1 31,005.26 0.0638% 0.0800% Fee Simple
S031 10/01/07 1 27,940.08 0.0638% 0.0800% Fee Simple
S032 03/01/08 1 31,313.37 0.0638% 0.0800% Both Fee Simple
and Leasehold
S033 10/01/07 1 28,093.08 0.0638% 0.0800% Fee Simple
S034 12/01/07 1 25,681.76 0.0638% 0.0800% Leasehold
S035 11/01/07 1 25,459.33 0.0638% 0.0800% Fee Simple
S036 11/01/07 1 25,469.94 0.0638% 0.0800%
S037 Fee Simple
S038 Fee Simple
S039 03/01/07 1 27,128.73 0.0638% 0.0800% Fee Simple
S040 03/01/08 1 21,289.68 0.0638% 0.0800% Fee Simple
S041 07/01/06 1 27,817.06 0.0638% 0.0800% Fee Simple
S042 05/01/07 1 25,364.65 0.0638% 0.0800% Fee Simple
S043 12/01/07 1 24,183.57 0.0638% 0.0800% Fee Simple
S044 05/01/07 1 23,878.14 0.0638% 0.0800% Fee Simple
S045 10/01/07 1 23,173.79 0.0638% 0.0800% Fee Simple
S046 05/01/07 1 23,550.50 0.0638% 0.0800% Fee Simple
S047 02/01/07 1 24,963.87 0.0638% 0.0800% Fee Simple
S048 12/01/07 1 20,624.87 0.0638% 0.0800% Fee Simple
S049 02/01/08 1 21,103.04 0.0638% 0.0800% Fee Simple
S050 12/01/01 1 22,057.81 0.0638% 0.0800% Fee Simple
S051 11/01/07 1 17,697.33 0.0638% 0.0800% Fee Simple
S052 02/01/08 1 16,885.17 0.0638% 0.0800% Fee Simple
S053 05/01/07 1 19,667.51 0.0638% 0.0800% Fee Simple
S054 02/01/07 1 20,341.70 0.0638% 0.0800% Fee Simple
S055 11/01/07 1 20,073.90 0.0638% 0.0800% Fee Simple
S056 10/01/07 1 21,025.65 0.0638% 0.0800% Fee Simple
S057 04/01/08 1 16,335.44 0.0638% 0.0800% Fee Simple
S058 10/01/07 1 16,208.14 0.0638% 0.0800% Fee Simple
S059 09/01/07 1 14,173.47 0.0638% 0.0800% Fee Simple
S060 01/01/08 1 14,270.39 0.0638% 0.0800% Fee Simple
S061 11/01/07 1 13,448.08 0.0638% 0.0800% Fee Simple
S062 01/01/08 1 15,798.07 0.0638% 0.0800% Fee Simple
S063 10/01/07 1 15,763.52 0.0638% 0.0800% Fee Simple
S064 03/01/08 1 12,126.93 0.0638% 0.0800% Fee Simple
S065 03/01/08 1 13,751.13 0.0638% 0.0800% Fee Simple
S066 03/01/08 1 12,181.39 0.0638% 0.0800% Fee Simple
S067 04/01/07 1 13,705.78 0.0638% 0.0800% Fee Simple
S068 10/01/07 1 12,241.98 0.0638% 0.0800% Fee Simple
S069 09/01/07 1 13,846.74 0.0638% 0.0800% Fee Simple
S070 01/01/08 1 11,324.70 0.0638% 0.0800% Fee Simple
S071 01/01/08 1 20,043.06 0.0638% 0.0800% Fee Simple
S072 03/01/08 1 11,207.12 0.0638% 0.0800% Fee Simple
S073 11/01/07 1 10,876.04 0.0638% 0.0800% Fee Simple
S074 09/01/07 1 12,208.83 0.0638% 0.0800%
S075 Fee Simple
S076 Fee Simple
S077 02/01/07 1 12,044.47 0.0638% 0.0800% Fee Simple
S078 08/01/07 1 11,841.10 0.0638% 0.0800% Fee Simple
S079 11/01/07 1 9,933.20 0.0638% 0.0800% Fee Simple
S080 09/01/07 1 11,433.78 0.0638% 0.0800%
S081 1 Fee Simple
S082 1 Fee Simple
S083 12/01/07 1 10,367.40 0.0638% 0.0800% Fee Simple
S084 06/01/07 1 11,347.06 0.0638% 0.0800% Fee Simple
S085 09/01/07 1 10,599.69 0.0638% 0.0800% Fee Simple
S086 02/01/08 1 9,201.32 0.0638% 0.0800% Fee Simple
S087 12/01/07 1 10,050.84 0.0638% 0.0800% Fee Simple
S088 07/01/07 1 10,406.28 0.0638% 0.0800% Fee Simple
S089 12/01/07 1 9,104.12 0.0638% 0.0800% Fee Simple
S090 04/01/08 1 8,977.13 0.0638% 0.0800% Fee Simple
S091 02/01/08 1 7,503.94 0.0638% 0.0800% Fee Simple
S092 04/01/07 1 9,231.16 0.0638% 0.0800% Fee Simple
S093 03/01/08 1 8,039.68 0.0638% 0.0800% Fee Simple
S094 12/01/07 1 8,761.34 0.0638% 0.0800% Fee Simple
S095 04/01/07 1 8,447.53 0.0638% 0.0800% Fee Simple
S096 07/01/07 1 8,391.96 0.0638% 0.0800% Fee Simple
S097 09/01/07 1 7,083.13 0.0638% 0.0800% Fee Simple
S098 11/01/07 1 7,909.00 0.0638% 0.0800% Fee Simple
S099 04/01/07 1 7,065.15 0.0638% 0.0800% Fee Simple
S100 03/01/07 1 6,562.16 0.0638% 0.0800% Fee Simple
S101 01/01/08 1 5,205.21 0.0638% 0.0800% Fee Simple
S102 10/01/07 1 4,721.77 0.0638% 0.0800% Fee Simple
S103 03/01/08 1 2,946.46 0.0638% 0.0800% Fee Simple
S104 03/01/08 1 2,339.24 0.0638% 0.0800% Fee Simple
S105 04/01/08 1 16,599.00 0.0638% 0.0800% Fee Simple
S106 04/01/08 1 46,317.02 0.0638% 0.0800% Fee Simple
S107 04/01/08 1 20,806.38 0.0638% 0.0800% Fee Simple
S108 04/01/08 1 14,485.12 0.0638% 0.0800% Fee Simple
S109 04/01/08 1 58,963.27 0.0638% 0.0800% Fee Simple
S110 05/01/08 1 29,033.51 0.0638% 0.0800% Fee Simple
S111 05/01/08 1 13,704.71 0.0638% 0.0800% Fee Simple
S112 10/01/07 1 41,172.95 0.0638% 0.0800% Fee Simple
S113 10/01/07 1 16,382.46 0.0638% 0.0800% Fee Simple
S114 10/01/07 1 6,700.29 0.0638% 0.0800% Fee Simple
S115 10/01/07 1 6,813.15 0.0638% 0.0800% Fee Simple
S116 10/01/07 1 9,135.69 0.0638% 0.0800% Fee Simple
S117 10/01/07 1 11,882.92 0.0638% 0.0800% Leasehold
S118 10/01/07 1 11,499.80 0.0638% 0.0800% Fee Simple
S119 05/01/08 1 10,534.69 0.0638% 0.0800% Fee Simple
S120 05/01/08 1 12,632.22 0.0638% 0.0800% Fee Simple
S121 06/01/08 1 9,002.79 0.0638% 0.0800% Fee Simple
S122 06/01/08 1 7,020.42 0.0638% 0.0800% Fee Simple
S123 07/01/08 1 25,240.52 0.0638% 0.0800% Fee Simple
S124 07/01/08 1 22,908.73 0.0638% 0.0800% Fee Simple
S125 08/01/08 1 11,938.08 0.0638% 0.0800% Fee Simple
S126 05/01/05 1 29,698.86 0.0638% 0.0800%
S127 Fee Simple
S128 Fee Simple
S129 Fee Simple
S130 05/01/08 1 96,941.55 0.0638% 0.0800%
S131 Fee Simple
S132 Fee Simple
S133 Fee Simple
S134 Fee Simple
S135 05/01/28 1 118,787.94 0.0638% 0.0800% Fee Simple
S136 06/01/08 1 10,790.52 0.0638% 0.0800% Fee Simple
S137 06/01/08 1 8,741.55 0.0638% 0.0800% Fee Simple
S138 06/01/08 1 13,074.97 0.0638% 0.0800% Fee Simple
S139 07/01/08 1 329,956.76 0.0638% 0.0800%
S140 Fee Simple
S141 Fee Simple
S142 06/01/08 1 15,419.24 0.0638% 0.0800% Fee Simple
S143 06/01/08 1 9,653.05 0.0638% 0.0800% Fee Simple
S144 07/01/08 1 3,465.09 0.0638% 0.0800% Fee Simple
S145 08/01/08 1 11,084.87 0.0638% 0.0800% Fee Simple
S146 08/01/08 1 23,912.07 0.0638% 0.0800% Leasehold
S147 09/01/08 1 48,820.06 0.0638% 0.0800% Fee Simple
S148 10/01/28 1 438,434.34 0.0638% 0.0800%
S149 Fee Simple
S150 Fee Simple
S151 Fee Simple
S152 Fee Simple
S153 Fee Simple
S154 Fee Simple
S155 Fee Simple
S156 Fee Simple
S157 Fee Simple
C001 08/01/08 1 16,539.59 0.0638% 0.1250% Fee Simple
C002 09/01/08 1 30,267.04 0.0638% 0.1250% Fee Simple
C003 07/01/08 1 6,817.63 0.0638% 0.0800% Leasehold
C004 06/01/08 1 27,777.10 0.0638% 0.0800% Fee Simple
C005 07/01/08 1 14,844.93 0.0638% 0.1250% Fee Simple
C006 07/01/08 1 24,804.29 0.0638% 0.0800% Fee Simple
C007 06/01/08 1 9,314.23 0.0638% 0.1250% Fee Simple
C008 06/01/08 1 43,606.31 0.0638% 0.1250% Fee Simple
C009 06/01/08 1 13,749.91 0.0638% 0.0800% Fee Simple
C010 07/01/08 1 20,892.51 0.0638% 0.0800% Fee Simple
C011 07/01/08 1 25,748.43 0.0638% 0.1250% Fee Simple
C012 07/01/08 1 19,043.99 0.0638% 0.1250% Fee Simple
C013 07/01/08 1 14,727.83 0.0638% 0.0800% Fee Simple
C014 06/01/08 1 15,153.79 0.0638% 0.1250% Fee Simple
C015 06/01/08 1 51,826.20 0.0638% 0.1250% Fee Simple
C016 08/01/05 1 8,666.26 0.0638% 0.0900% Fee Simple
C017 06/01/08 1 28,081.66 0.0638% 0.1250% Fee Simple
C018 07/01/08 1 12,629.27 0.0638% 0.0800% Fee Simple
C019 08/01/08 1 9,903.19 0.0638% 0.0800% Fee Simple
C020 05/01/08 1 54,703.40 0.0638% 0.0800% Leasehold
C021 08/01/08 1 18,282.54 0.0638% 0.1250%
C022 Fee Simple
C023 Fee Simple
C024 07/01/08 1 31,553.20 0.0638% 0.0800% Fee Simple
C025 07/01/08 1 31,746.83 0.0638% 0.0800% Fee Simple
C026 08/01/08 1 8,712.38 0.0638% 0.1250% Fee Simple
C027 06/01/08 1 29,481.64 0.0638% 0.0800% Fee Simple
C028 06/01/08 1 42,308.05 0.0638% 0.0800% Fee Simple
C029 06/01/08 1 17,462.26 0.0638% 0.1250% Fee Simple
C030 05/01/08 1 12,884.12 0.0638% 0.1250% Fee Simple
C031 08/01/08 1 16,845.50 0.0638% 0.0800% Fee Simple
C032 08/01/08 1 18,463.39 0.0638% 0.0800% Fee Simple
C033 06/01/08 1 38,292.35 0.0638% 0.0800% Fee Simple
C034 07/01/08 1 26,954.35 0.0638% 0.0800% Fee Simple
C035 04/01/08 1 34,602.01 0.0638% 0.1000% Fee Simple
C036 08/01/08 1 22,745.31 0.0638% 0.1250% Fee Simple
C037 06/01/08 1 23,194.72 0.0638% 0.1250% Fee Simple
C038 06/01/08 1 7,127.28 0.0638% 0.1250% Fee Simple
C039 06/01/08 1 5,158.79 0.0638% 0.1250% Fee Simple
C040 06/01/08 1 13,395.77 0.0638% 0.1250% Fee Simple
C041 07/01/08 1 14,975.51 0.0638% 0.1250% Fee Simple
C042 06/01/08 1 27,884.22 0.0638% 0.0800% Fee Simple
C043 06/01/08 1 22,072.26 0.0638% 0.0800% Fee Simple
C044 07/01/08 1 30,581.74 0.0638% 0.1250% Fee Simple
C045 06/01/08 1 34,973.54 0.0638% 0.0800% Fee Simple
C046 06/01/08 1 37,720.07 0.0638% 0.0800% Fee Simple
C047 06/01/08 1 26,958.77 0.0638% 0.0800% Fee Simple
C048 08/01/08 1 7,396.42 0.0638% 0.1250% Fee Simple
C049 09/01/08 1 29,543.47 0.0638% 0.0850% Fee Simple
C050 06/01/08 1 16,254.90 0.0638% 0.1250% Fee Simple
C051 06/01/08 1 6,536.54 0.0638% 0.1250% Fee Simple
C052 05/01/08 1 46,618.20 0.0638% 0.0800% Fee Simple
C053 07/01/08 1 7,979.25 0.0638% 0.1250% Fee Simple
C054 07/01/08 1 42,118.69 0.0638% 0.1250% Fee Simple
C055 09/01/08 1 10,148.54 0.0638% 0.1250% Fee Simple
C056 07/01/08 1 29,507.63 0.0638% 0.0800% Fee Simple
C057 06/01/08 1 32,028.59 0.0638% 0.1250% Fee Simple
C058 07/01/08 1 16,802.79 0.0638% 0.0900% Fee Simple
C059 07/01/08 1 21,677.52 0.0638% 0.1250% Fee Simple
C060 08/01/08 1 45,356.31 0.0638% 0.0500% Fee Simple
C061 08/01/08 1 37,969.84 0.0638% 0.1250% Fee Simple
C062 07/01/08 1 8,121.75 0.0638% 0.1250% Fee Simple
C063 07/01/08 1 12,328.05 0.0638% 0.0800% Fee Simple
C064 07/01/08 1 16,715.21 0.0638% 0.1000% Fee Simple
C065 06/01/08 1 27,198.43 0.0638% 0.0800% Fee Simple
C066 08/01/08 1 12,215.72 0.0638% 0.1250% Fee Simple
C067 07/01/08 1 40,465.81 0.0638% 0.0800% Fee Simple
C068 06/01/08 1 33,283.88 0.0638% 0.0800% Fee Simple
C069 07/01/08 1 19,794.97 0.0638% 0.0800% Fee Simple
C070 08/01/08 1 16,773.03 0.0638% 0.1250% Fee Simple
C071 08/01/08 1 16,080.25 0.0638% 0.0800% Fee Simple
C072 08/01/08 1 8,513.36 0.0638% 0.0800% Fee Simple
C073 09/01/08 1 18,102.40 0.0638% 0.1250% Fee Simple
C074 06/01/08 1 20,286.52 0.0638% 0.1250% Fee Simple
C075 06/01/08 1 22,008.09 0.0638% 0.1250% Fee Simple
C076 06/01/08 1 13,424.90 0.0638% 0.1250% Fee Simple
C077 08/01/08 1 25,015.23 0.0638% 0.0800% Fee Simple
C078 05/01/08 1 17,555.99 0.0638% 0.0900% Fee Simple
C079 05/01/08 1 8,203.44 0.0638% 0.0900% Fee Simple
C080 05/01/08 1 8,036.74 0.0638% 0.0900% Fee Simple
C081 09/01/08 1 27,081.10 0.0638% 0.0800% Fee Simple
C082 07/01/08 1 33,197.99 0.0638% 0.0800% Fee Simple
C083 06/01/05 1 9,117.26 0.0638% 0.1250% Fee Simple
C084 07/01/08 1 21,024.19 0.0638% 0.0800% Fee Simple
C085 08/01/08 1 29,456.63 0.0638% 0.1250% Fee Simple
C086 11/01/08 1 57,964.16 0.0638% 0.0800%
C087 Fee Simple
C088 Fee Simple
C089 08/01/08 1 35,915.16 0.0638% 0.1250% Fee Simple
C090 09/01/08 1 29,266.29 0.0638% 0.1250% Fee Simple
C091 07/01/08 1 44,180.62 0.0638% 0.0800% Fee Simple
C092 05/01/08 1 27,232.81 0.0638% 0.0800% Fee Simple
C093 05/01/08 1 33,871.74 0.0638% 0.0800% Fee Simple
C094 05/01/08 1 24,990.05 0.0638% 0.0800% Fee Simple
C095 05/01/08 1 95,314.84 0.0638% 0.0800% Fee Simple
C096 06/01/08 1 15,304.07 0.0638% 0.0800% Fee Simple
C097 07/01/08 1 57,664.17 0.0638% 0.1250%
C098 Fee Simple
C099 Fee Simple
C100 Fee Simple
C101 Fee Simple
C102 Fee Simple
C103 Fee Simple
C104 Fee Simple
C105 Fee Simple
C106 Fee Simple
C107 07/01/08 1 49,777.37 0.0638% 0.0800% Fee Simple
C108 07/01/08 1 39,240.55 0.0638% 0.0800% Fee Simple
C109 07/01/08 1 44,327.29 0.0638% 0.0800% Fee Simple
C110 07/01/08 1 33,790.48 0.0638% 0.0800% Fee Simple
C111 06/01/08 1 22,326.08 0.0638% 0.0800% Fee Simple
C112 10/01/08 1 30,750.80 0.0638% 0.0750% Fee Simple
C113 10/01/08 1 34,624.94 0.0638% 0.1250% Fee Simple
C114 09/01/08 1 12,326.34 0.0638% 0.0800% Fee Simple
C115 10/01/08 1 28,809.27 0.0638% 0.0900% Fee Simple
C116 10/01/08 1 37,893.47 0.0638% 0.0900% Fee Simple
C117 10/01/08 1 40,105.90 0.0638% 0.0900% Fee Simple
C118 07/01/08 1 11,379.22 0.0638% 0.1250% Fee Simple
C119 07/01/08 1 13,655.05 0.0638% 0.1250% Fee Simple
C120 10/01/08 1 93,142.35 0.0638% 0.1250% Fee Simple
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Cross
Control Mortgage Collateralized
Number Seller Mortgage Loan Loan Type Defeasance Flag Servicer
- ------ ------ ------------- --------- --------------- --------
<S> <C> <C> <C> <C> <C>
S001 SBRC Amortizing Balloon No
S002 SBRC Amortizing Balloon No
S003 SBRC
S004 SBRC
S005 SBRC
S006 SBRC
S007 SBRC
S008 SBRC Amortizing Balloon No
S009 SBRC Interest Only ARD No
S010 SBRC Amortizing Balloon No
S011 SBRC Amortizing Balloon No
S012 SBRC Amortizing Balloon No
S013 SBRC Amortizing Balloon No
S014 SBRC Yes (a) Amortizing Balloon No
S015 SBRC Amortizing Balloon No
S016 SBRC Amortizing Balloon No
S017 SBRC Amortizing Balloon No
S018 SBRC Amortizing Balloon No
S019 SBRC Amortizing Balloon No
S020 SBRC
S021 SBRC
S022 SBRC
S023 SBRC Amortizing Balloon No
S024 SBRC Amortizing Balloon No
S025 SBRC Amortizing Balloon No
S026 SBRC Amortizing Balloon No
S027 SBRC Amortizing Balloon No
S028 SBRC Amortizing Balloon No
S029 SBRC Amortizing Balloon No
S030 SBRC Amortizing Balloon No
S031 SBRC Amortizing Balloon No
S032 SBRC Amortizing Balloon No
S033 SBRC Amortizing Balloon No
S034 SBRC Amortizing Balloon No
S035 SBRC Yes (a) Amortizing Balloon No
S036 SBRC Amortizing Balloon No
S037 SBRC
S038 SBRC
S039 SBRC Amortizing Balloon No
S040 SBRC Amortizing Balloon No
S041 SBRC Amortizing Balloon No
S042 SBRC Amortizing Balloon No
S043 SBRC Amortizing Balloon No
S044 SBRC Amortizing Balloon No
S045 SBRC Amortizing Balloon No
S046 SBRC Amortizing Balloon No
S047 SBRC Amortizing Balloon No
S048 SBRC Amortizing Balloon No
S049 SBRC Amortizing Balloon No
S050 SBRC Amortizing Balloon No
S051 SBRC Amortizing Balloon No
S052 SBRC Amortizing Balloon No
S053 SBRC Amortizing Balloon No
S054 SBRC Amortizing Balloon No
S055 SBRC Amortizing Balloon No
S056 SBRC Amortizing Balloon No
S057 SBRC Amortizing Balloon No
S058 SBRC Amortizing Balloon No
S059 SBRC Yes (b) Amortizing Balloon No
S060 SBRC Amortizing Balloon No
S061 SBRC Amortizing Balloon No
S062 SBRC Amortizing Balloon No
S063 SBRC Amortizing Balloon No
S064 SBRC Amortizing Balloon No
S065 SBRC Amortizing Balloon No
S066 SBRC Amortizing Balloon No
S067 SBRC Amortizing Balloon No
S068 SBRC Amortizing Balloon No
S069 SBRC Amortizing Balloon No
S070 SBRC Amortizing Balloon No
S071 SBRC Amortizing Balloon No
S072 SBRC Amortizing Balloon No
S073 SBRC Amortizing Balloon No
S074 SBRC Amortizing Balloon No
S075 SBRC
S076 SBRC
S077 SBRC Amortizing Balloon No
S078 SBRC Amortizing Balloon No
S079 SBRC Amortizing Balloon No
S080 SBRC Amortizing Balloon No
S081 SBRC
S082 SBRC
S083 SBRC Amortizing Balloon No
S084 SBRC Amortizing Balloon No
S085 SBRC Amortizing Balloon No
S086 SBRC Amortizing Balloon No
S087 SBRC Amortizing Balloon No
S088 SBRC Amortizing Balloon No
S089 SBRC Amortizing Balloon No
S090 SBRC Amortizing Balloon No
S091 SBRC Amortizing Balloon No
S092 SBRC Amortizing Balloon No
S093 SBRC Amortizing Balloon No
S094 SBRC Amortizing Balloon No
S095 SBRC Amortizing Balloon No
S096 SBRC Amortizing Balloon No
S097 SBRC Yes (b) Amortizing Balloon No
S098 SBRC Amortizing Balloon No
S099 SBRC Amortizing Balloon No
S100 SBRC Amortizing Balloon No
S101 SBRC Amortizing Balloon No
S102 SBRC Amortizing Balloon No
S103 SBRC Amortizing Balloon No
S104 SBRC Amortizing Balloon No
S105 SBRC Amortizing Balloon No
S106 SBRC Amortizing Balloon No
S107 SBRC Amortizing Balloon No
S108 SBRC Amortizing Balloon No
S109 SBRC Amortizing Balloon No
S110 SBRC Amortizing Balloon No
S111 SBRC Amortizing Balloon No
S112 SBRC Yes (c) Amortizing Balloon No
S113 SBRC Yes (c) Amortizing Balloon No
S114 SBRC Yes (c) Amortizing Balloon No
S115 SBRC Yes (c) Amortizing Balloon No
S116 SBRC Yes (c) Amortizing Balloon No
S117 SBRC Yes (c) Amortizing Balloon No
S118 SBRC Yes (c) Amortizing Balloon No
S119 SBRC Amortizing Balloon No
S120 SBRC Amortizing Balloon No
S121 SBRC Amortizing Balloon No
S122 SBRC Amortizing Balloon No
S123 SBRC Amortizing Balloon No
S124 SBRC Amortizing Balloon No
S125 SBRC Amortizing Balloon No
S126 SBRC Amortizing Balloon No
S127 SBRC
S128 SBRC
S129 SBRC
S130 SBRC Amortizing Balloon No
S131 SBRC
S132 SBRC
S133 SBRC
S134 SBRC
S135 SBRC Amortizing ARD No
S136 SBRC Amortizing Balloon No
S137 SBRC Amortizing Balloon No
S138 SBRC Amortizing Balloon No
S139 SBRC Amortizing Balloon (*) No
S140 SBRC
S141 SBRC
S142 SBRC Amortizing Balloon No
S143 SBRC Amortizing Balloon No
S144 SBRC Amortizing Balloon No
S145 SBRC Amortizing Balloon No
S146 SBRC Amortizing Balloon No
S147 SBRC Amortizing Balloon No
S148 SBRC Amortizing ARD No
S149 SBRC
S150 SBRC
S151 SBRC
S152 SBRC
S153 SBRC
S154 SBRC
S155 SBRC
S156 SBRC
S157 SBRC
C001 CREI Amortizing Balloon No GMAC Commercial Mortgage Corp.
C002 CREI Amortizing Balloon Yes GMAC Commercial Mortgage Corp.
C003 CREI Amortizing Balloon No Citicorp Mtg Finance-Capital Markets Operations
C004 CREI Amortizing Balloon No Citicorp Mtg Finance-Capital Markets Operations
C005 CREI Amortizing Balloon No Mitchell Mortgage Company, LLC
C006 CREI Amortizing Balloon No Citicorp Mtg Finance-Capital Markets Operations
C007 CREI Amortizing Balloon Yes GMAC Commercial Mortgage Corp.
C008 CREI Amortizing Balloon No Huntington Capital Corp.
C009 CREI Amortizing Balloon No Citicorp Mtg Finance-Capital Markets Operations
C010 CREI Amortizing Balloon No KeyCorp Real Estate Capital Markets, Inc.
C011 CREI Fully Amortizing No GMAC Commercial Mortgage Corp.
C012 CREI Amortizing Balloon No Legg Mason Real Estate Services, Inc.
C013 CREI Amortizing Balloon Yes Financial Federal Savings Bank
C014 CREI Amortizing Balloon No GMAC Commercial Mortgage Corp.
C015 CREI Amortizing Balloon No GMAC Commercial Mortgage Corp.
C016 CREI Amortizing Balloon Yes LJ Melody & Company, Inc.
C017 CREI Amortizing Balloon No LJ Melody & Company, Inc.
C018 CREI Amortizing Balloon No Citicorp Mtg Finance-Capital Markets Operations
C019 CREI Amortizing Balloon No Citicorp Mtg Finance-Capital Markets Operations
C020 CREI Amortizing Balloon No Citicorp Mtg Finance-Capital Markets Operations
C021 CREI Amortizing Balloon No
C022 CREI GMAC Commercial Mortgage Corp.
C023 CREI GMAC Commercial Mortgage Corp.
C024 CREI Amortizing Balloon Yes Financial Federal Savings Bank
C025 CREI Amortizing Balloon Yes Financial Federal Savings Bank
C026 CREI Amortizing Balloon No LJ Melody & Company, Inc.
C027 CREI Amortizing Balloon No Financial Federal Savings Bank
C028 CREI Amortizing Balloon No Financial Federal Savings Bank
C029 CREI Amortizing Balloon No GMAC Commercial Mortgage Corp.
C030 CREI Amortizing Balloon No GMAC Commercial Mortgage Corp.
C031 CREI Amortizing Balloon No Citicorp Mtg Finance-Capital Markets Operations
C032 CREI Amortizing Balloon No Citicorp Mtg Finance-Capital Markets Operations
C033 CREI Amortizing Balloon No Financial Federal Savings Bank
C034 CREI Amortizing Balloon Yes Financial Federal Savings Bank
C035 CREI Amortizing Balloon No LJ Melody & Company, Inc.
C036 CREI Amortizing Balloon No KeyCorp Real Estate Capital Markets, Inc.
C037 CREI Amortizing Balloon No LJ Melody & Company, Inc.
C038 CREI Yes (d) Amortizing Balloon No LJ Melody & Company, Inc.
C039 CREI Yes (d) Amortizing Balloon No LJ Melody & Company, Inc.
C040 CREI Amortizing Balloon No LJ Melody & Company, Inc.
C041 CREI Amortizing Balloon No GMAC Commercial Mortgage Corp.
C042 CREI Amortizing Balloon No Citicorp Mtg Finance-Capital Markets Operations
C043 CREI Amortizing Balloon No Citicorp Mtg Finance-Capital Markets Operations
C044 CREI Amortizing Balloon No GMAC Commercial Mortgage Corp.
C045 CREI Amortizing Balloon Yes Citicorp Mtg Finance-Capital Markets Operations
C046 CREI Amortizing Balloon Yes Citicorp Mtg Finance-Capital Markets Operations
C047 CREI Amortizing Balloon Yes Citicorp Mtg Finance-Capital Markets Operations
C048 CREI Amortizing Balloon No Huntington Capital Corp.
C049 CREI Amortizing Balloon Yes Huntington Capital Corp.
C050 CREI Amortizing Balloon No GMAC Commercial Mortgage Corp.
C051 CREI Amortizing Balloon No GMAC Commercial Mortgage Corp.
C052 CREI Amortizing Balloon Yes Citicorp Mtg Finance-Capital Markets Operations
C053 CREI Amortizing Balloon No GMAC Commercial Mortgage Corp.
C054 CREI Amortizing Balloon No GMAC Commercial Mortgage Corp.
C055 CREI Amortizing Balloon Yes GMAC Commercial Mortgage Corp.
C056 CREI Amortizing Balloon No Huntington Capital Corp.
C057 CREI Amortizing Balloon No GMAC Commercial Mortgage Corp.
C058 CREI Amortizing Balloon No LJ Melody & Company, Inc.
C059 CREI Amortizing Balloon Yes LJ Melody & Company, Inc.
C060 CREI Amortizing Balloon Yes Legg Mason Real Estate Services, Inc.
C061 CREI Amortizing Balloon Yes GMAC Commercial Mortgage Corp.
C062 CREI Amortizing Balloon No LJ Melody & Company, Inc.
C063 CREI Amortizing Balloon No Financial Federal Savings Bank
C064 CREI Amortizing Balloon No Collateral Mortgage Limited
C065 CREI Amortizing Balloon No Financial Federal Savings Bank
C066 CREI Amortizing Balloon Yes Huntington Capital Corp.
C067 CREI Amortizing Balloon No Financial Federal Savings Bank
C068 CREI Amortizing Balloon No Financial Federal Savings Bank
C069 CREI Amortizing Balloon No Financial Federal Savings Bank
C070 CREI Amortizing Balloon No Collateral Mortgage Limited
C071 CREI Amortizing Balloon Yes Citicorp Mtg Finance-Capital Markets Operations
C072 CREI Amortizing Balloon No Financial Federal Savings Bank
C073 CREI Amortizing Balloon Yes GMAC Commercial Mortgage Corp.
C074 CREI Amortizing Balloon No LJ Melody & Company, Inc.
C075 CREI Amortizing Balloon No LJ Melody & Company, Inc.
C076 CREI Amortizing Balloon No LJ Melody & Company, Inc.
C077 CREI Amortizing Balloon Yes Financial Federal Savings Bank
C078 CREI Amortizing Balloon No LJ Melody & Company, Inc.
C079 CREI Amortizing Balloon No LJ Melody & Company, Inc.
C080 CREI Amortizing Balloon No LJ Melody & Company, Inc.
C081 CREI Amortizing Balloon No Citicorp Mtg Finance-Capital Markets Operations
C082 CREI Amortizing Balloon No Financial Federal Savings Bank
C083 CREI Amortizing Balloon No GMAC Commercial Mortgage Corp.
C084 CREI Amortizing Balloon No Financial Federal Savings Bank
C085 CREI Amortizing Balloon Yes LJ Melody & Company, Inc.
C086 CREI Amortizing Balloon Yes
C087 CREI Huntington Capital Corp.
C088 CREI Huntington Capital Corp.
C089 CREI Amortizing Balloon Yes GMAC Commercial Mortgage Corp.
C090 CREI Amortizing Balloon Yes GMAC Commercial Mortgage Corp.
C091 CREI Amortizing Balloon Yes Citicorp Mtg Finance-Capital Markets Operations
C092 CREI Amortizing Balloon No Citicorp Mtg Finance-Capital Markets Operations
C093 CREI Amortizing Balloon No Citicorp Mtg Finance-Capital Markets Operations
C094 CREI Amortizing Balloon No Citicorp Mtg Finance-Capital Markets Operations
C095 CREI Amortizing Balloon No Citicorp Mtg Finance-Capital Markets Operations
C096 CREI Amortizing Balloon Yes Citicorp Mtg Finance-Capital Markets Operations
C097 CREI Amortizing Balloon Yes
C098 CREI GMAC Commercial Mortgage Corp.
C099 CREI GMAC Commercial Mortgage Corp.
C100 CREI GMAC Commercial Mortgage Corp.
C101 CREI GMAC Commercial Mortgage Corp.
C102 CREI GMAC Commercial Mortgage Corp.
C103 CREI GMAC Commercial Mortgage Corp.
C104 CREI GMAC Commercial Mortgage Corp.
C105 CREI GMAC Commercial Mortgage Corp.
C106 CREI GMAC Commercial Mortgage Corp.
C107 CREI Amortizing Balloon Yes Financial Federal Savings Bank
C108 CREI Amortizing Balloon Yes Financial Federal Savings Bank
C109 CREI Yes (e) Amortizing Balloon Yes Financial Federal Savings Bank
C110 CREI Yes (e) Amortizing Balloon Yes Financial Federal Savings Bank
C111 CREI Amortizing Balloon No Financial Federal Savings Bank
C112 CREI Amortizing Balloon Yes GMAC Commercial Mortgage Corp.
C113 CREI Amortizing Balloon Yes GMAC Commercial Mortgage Corp.
C114 CREI Amortizing Balloon Yes Citicorp Mtg Finance-Capital Markets Operations
C115 CREI Amortizing Balloon Yes LJ Melody & Company, Inc.
C116 CREI Amortizing Balloon Yes LJ Melody & Company, Inc.
C117 CREI Amortizing Balloon Yes LJ Melody & Company, Inc.
C118 CREI Yes (f) Amortizing Balloon No LJ Melody & Company, Inc.
C119 CREI Yes (f) Amortizing Balloon No LJ Melody & Company, Inc.
C120 CREI Amortizing Balloon Yes GMAC Commercial Mortgage Corp.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Loan Balance Net First Interest
Control at Maturity/ Mortgage Note Payment Accrual
Number ARD Rate Date Date Method
------ --- ---- ---- ---- ------
<S> <C> <C> <C> <C> <C>
S001 14,547,051.44 6.6662% 12/24/97 02/01/98 Actual/360
S002 15,974,771.46 7.3562% 12/19/97 02/01/98 Actual/360
S003
S004
S005
S006
S007
S008 12,718,201.62 7.0062% 08/12/98 10/01/98 30/360
S009 11,000,000.00 7.3662% 09/29/97 11/01/97 30/360
S010 9,140,167.47 7.1362% 02/25/98 04/01/98 Actual/360
S011 8,472,225.00 7.4162% 10/15/97 12/01/97 Actual/360
S012 6,616,985.96 7.0562% 12/10/97 02/01/98 Actual/360
S013 6,518,150.27 9.7062% 11/09/94 01/01/95 30/360
S014 6,058,499.84 8.1462% 06/19/98 07/01/98 30/360
S015 5,346,287.34 8.4812% 01/25/96 03/01/96 30/360
S016 5,025,851.10 9.7062% 11/09/94 01/01/95 30/360
S017 4,449,376.14 9.8562% 06/18/96 08/01/96 30/360
S018 4,299,333.85 7.1062% 01/30/98 03/01/98 Actual/360
S019 3,953,776.63 8.9812% 01/15/97 03/01/97 30/360
S020
S021
S022
S023 4,122,761.74 7.3562% 10/31/97 12/01/97 30/360
S024 4,136,994.03 7.6062% 08/20/97 10/01/97 Actual/360
S025 3,488,240.28 8.1962% 12/23/97 02/01/98 30/360
S026 3,885,829.61 7.3562% 12/12/97 02/01/98 Actual/360
S027 3,480,432.76 7.2312% 03/20/98 05/01/98 Actual/360
S028 2,950,282.56 7.7312% 03/16/98 05/01/98 Actual/360
S029 3,511,506.75 7.5562% 12/30/97 02/01/98 Actual/360
S030 3,234,629.97 7.9062% 12/10/97 02/01/98 30/360
S031 3,403,389.11 7.6062% 09/26/97 11/01/97 30/360
S032 2,663,002.64 7.6562% 02/24/98 04/01/98 Actual/360
S033 2,973,704.84 7.6662% 09/02/97 11/01/97 30/360
S034 3,070,364.65 7.8562% 11/26/97 01/01/98 30/360
S035 3,030,230.26 7.9162% 10/29/97 12/01/97 30/360
S036 2,665,188.15 7.8562% 10/15/97 12/01/97 30/360
S037
S038
S039 2,655,211.47 8.9812% 02/20/97 04/01/97 30/360
S040 2,791,800.91 6.8562% 02/06/98 04/01/98 Actual/360
S041 2,804,653.19 9.7312% 06/18/96 08/01/96 30/360
S042 2,575,773.34 8.3562% 04/01/97 06/01/97 30/360
S043 2,511,580.53 7.9812% 11/26/97 01/01/98 30/360
S044 2,726,591.98 8.4812% 04/29/97 06/01/97 30/360
S045 2,660,626.52 8.4062% 09/12/97 11/01/97 30/360
S046 2,288,250.92 9.1062% 04/24/97 06/01/97 30/360
S047 1,960,234.61 8.9812% 01/16/97 03/01/97 30/360
S048 2,217,339.91 7.7362% 11/12/97 01/01/98 Actual/360
S049 1,797,516.87 7.1062% 01/15/98 03/01/98 30/360
S050 2,405,778.91 9.7062% 11/09/94 01/01/95 30/360
S051 2,178,579.88 7.4662% 10/01/97 12/01/97 30/360
S052 2,187,878.51 7.0062% 01/26/98 03/01/98 Actual/360
S053 2,225,559.79 8.6062% 04/15/97 06/01/97 30/360
S054 2,050,409.24 8.4812% 01/10/97 03/01/97 30/360
S055 1,891,660.75 8.3562% 10/27/97 12/01/97 30/360
S056 1,728,939.22 8.4862% 09/19/97 11/01/97 Actual/360
S057 1,822,297.47 7.1062% 03/02/98 05/01/98 Actual/360
S058 1,696,029.54 7.8562% 09/26/97 11/01/97 30/360
S059 1,718,717.42 7.6662% 08/29/97 10/01/97 30/360
S060 1,527,667.64 7.4812% 12/24/97 02/01/98 30/360
S061 1,653,614.59 7.4812% 10/28/97 12/01/97 30/360
S062 1,286,359.85 8.1362% 12/16/97 02/01/98 30/360
S063 1,264,568.42 8.4812% 09/29/97 11/01/97 30/360
S064 1,549,135.28 6.9812% 02/03/98 04/01/98 30/360
S065 1,420,843.93 8.0662% 02/03/98 04/01/98 30/360
S066 1,473,051.62 7.1062% 02/13/98 04/01/98 Actual/360
S067 1,361,260.72 8.7312% 03/17/97 05/01/97 30/360
S068 1,393,136.68 7.7312% 09/29/97 11/01/97 30/360
S069 1,365,197.25 8.8562% 08/04/97 10/01/97 30/360
S070 1,392,517.38 7.4812% 12/18/97 02/01/98 30/360
S071 2,131,022.12 7.9162% 12/16/97 08/01/98 Actual/360
S072 1,223,486.36 7.4812% 02/24/98 04/01/98 Actual/360
S073 1,312,457.90 7.7312% 10/21/97 12/01/97 30/360
S074 1,221,557.36 8.6062% 08/11/97 10/01/97 30/360
S075
S076
S077 1,196,260.09 8.7312% 01/02/97 03/01/97 30/360
S078 1,167,442.93 8.8562% 07/09/97 09/01/97 30/360
S079 1,219,111.90 7.5062% 10/06/97 12/01/97 30/360
S080 1,140,635.26 8.6562% 08/11/97 10/01/97 30/360
S081
S082
S083 1,096,924.78 8.0162% 11/12/97 01/01/98 Actual/360
S084 1,102,520.73 9.1062% 05/30/97 07/01/97 30/360
S085 1,066,847.07 8.5062% 08/29/97 10/01/97 30/360
S086 1,131,420.16 7.4812% 01/08/98 03/01/98 30/360
S087 1,050,456.52 7.8762% 11/17/97 01/01/98 30/360
S088 1,017,022.54 9.0062% 06/05/97 08/01/97 30/360
S089 932,273.11 8.2162% 11/19/97 01/01/98 30/360
S090 776,416.82 7.2312% 03/13/98 05/01/98 Actual/360
S091 965,156.48 7.1062% 01/28/98 03/01/98 Actual/360
S092 910,131.52 8.8562% 03/27/97 05/01/97 30/360
S093 890,504.86 7.2312% 02/27/98 04/01/98 Actual/360
S094 896,636.25 8.2262% 11/19/97 01/01/98 30/360
S095 845,217.84 8.6062% 03/25/97 05/01/97 30/360
S096 827,393.06 8.8562% 06/18/97 08/01/97 30/360
S097 858,922.21 7.6662% 08/29/97 10/01/97 30/360
S098 796,031.85 8.5062% 10/22/97 12/01/97 30/360
S099 686,475.34 9.1062% 03/17/97 05/01/97 30/360
S100 651,755.30 8.7312% 02/24/97 04/01/97 30/360
S101 518,966.98 8.6662% 12/31/97 02/01/98 30/360
S102 476,936.56 8.4462% 09/29/97 11/01/97 30/360
S103 298,678.97 8.3862% 02/24/98 04/01/98 30/360
S104 234,329.32 8.5862% 02/12/98 04/01/98 30/360
S105 2,144,298.54 6.8362% 03/12/98 05/01/98 30/360
S106 5,166,892.62 7.1062% 03/23/98 05/01/98 Actual/360
S107 2,678,041.14 7.1062% 03/25/98 05/01/98 Actual/360
S108 1,216,116.04 8.1062% 04/06/98 06/01/98 Actual/360
S109 6,493,830.92 7.3262% 03/27/98 05/01/98 Actual/360
S110 3,230,403.15 7.1532% 04/09/98 06/01/98 Actual/360
S111 1,188,639.41 7.1662% 04/13/98 06/01/98 Actual/360
S112 4,876,948.34 7.9812% 09/18/97 11/01/97 30/360
S113 1,940,506.60 7.9812% 09/18/97 11/01/97 30/360
S114 793,653.26 7.9812% 09/18/97 11/01/97 30/360
S115 807,020.77 7.9812% 09/18/97 11/01/97 30/360
S116 1,082,123.28 7.9812% 09/18/97 11/01/97 30/360
S117 1,407,535.38 7.9812% 09/18/97 11/01/97 30/360
S118 1,362,153.89 7.9812% 09/18/97 11/01/97 30/360
S119 1,150,033.20 7.4812% 04/28/98 06/01/98 Actual/360
S120 1,641,183.18 6.9812% 05/01/98 06/01/98 Actual/360
S121 1,001,337.45 7.1562% 05/14/98 07/01/98 Actual/360
S122 771,808.19 7.3562% 05/21/98 07/01/98 Actual/360
S123 3,249,069.34 7.1062% 06/23/98 08/01/98 Actual/360
S124 2,518,911.50 7.3562% 06/24/98 08/01/98 Actual/360
S125 1,536,487.07 7.1062% 07/13/98 09/01/98 Actual/360
S126 3,484,052.73 7.4812% 04/21/98 06/01/98 30/360
S127
S128
S129
S130 10,377,737.30 7.4812% 04/21/98 06/01/98 30/360
S131
S132
S133
S134
S135 15,347,757.00 7.0562% 04/30/98 06/01/98 Actual/360
S136 1,076,066.40 7.2312% 06/01/98 07/01/98 Actual/360
S137 954,098.21 7.4812% 05/19/98 07/01/98 Actual/360
S138 1,427,069.58 7.4812% 05/27/98 07/01/98 Actual/360
S139 42,882,662.65 6.9762% 06/09/98 08/01/98 Actual/360
S140
S141
S142 1,702,358.92 7.2832% 05/29/98 07/01/98 Actual/360
S143 1,044,401.36 7.6332% 05/29/98 07/01/98 Actual/360
S144 359,729.92 8.3652% 06/11/98 08/01/98 Actual/360
S145 1,218,598.57 7.3562% 07/22/98 09/01/98 Actual/360
S146 2,697,250.30 6.9162% 07/15/98 09/01/98 Actual/360
S147 5,573,769.02 6.7092% 08/03/98 10/01/98 Actual/360
S148 57,480,322.19 6.8562% 09/29/98 11/01/98 Actual/360
S149
S150
S151
S152
S153
S154
S155
S156
S157
C001 1,824,603.31 7.2512% 07/27/98 09/01/98 Actual/360
C002 3,838,225.58 7.2612% 08/04/98 10/01/98 Actual/360
C003 750,932.55 7.3262% 06/29/98 08/01/98 Actual/360
C004 3,528,304.74 7.2862% 05/12/98 07/01/98 Actual/360
C005 1,627,543.19 7.3612% 05/30/98 08/01/98 Actual/360
C006 2,803,313.90 6.8862% 06/23/98 08/01/98 Actual/360
C007 1,221,204.03 6.8112% 05/28/98 07/01/98 Actual/360
C008 5,486,813.67 7.3712% 05/21/98 07/01/98 Actual/360
C009 1,478,895.07 7.7362% 05/04/98 07/01/98 Actual/360
C010 2,282,645.58 7.4662% 06/09/98 08/01/98 Actual/360
C011 21,693.78 6.9912% 06/10/98 08/01/98 Actual/360
C012 2,456,843.96 7.0312% 06/10/98 08/01/98 Actual/360
C013 1,623,148.83 7.3162% 06/23/98 08/01/98 Actual/360
C014 1,646,824.22 7.5112% 05/21/98 07/01/98 Actual/360
C015 6,607,163.00 7.1912% 05/18/98 07/01/98 Actual/360
C016 1,139,193.24 7.4662% 07/20/98 09/01/98 Actual/360
C017 3,087,236.29 7.3112% 05/15/98 07/01/98 Actual/360
C018 1,383,825.77 7.4162% 06/18/98 08/01/98 Actual/360
C019 1,107,261.41 7.0662% 07/02/98 09/01/98 Actual/360
C020 7,120,244.03 6.9562% 04/24/98 06/01/98 Actual/360
C021 2,317,132.87 7.2712% 07/01/98 09/01/98 Actual/360
C022
C023
C024 3,485,560.14 7.2762% 06/10/98 08/01/98 Actual/360
C025 3,546,035.68 7.0862% 06/18/98 08/01/98 Actual/360
C026 969,000.56 7.1112% 07/13/98 09/01/98 Actual/360
C027 3,246,793.08 7.3262% 05/07/98 07/01/98 Actual/360
C028 4,637,793.39 7.4062% 05/13/98 07/01/98 Actual/360
C029 2,254,172.48 7.0212% 05/05/98 07/01/98 Actual/360
C030 1,665,893.46 7.0012% 05/01/98 06/01/98 Actual/360
C031 2,220,127.05 6.7862% 07/07/98 09/01/98 Actual/360
C032 1,627,929.04 6.7562% 07/07/98 09/01/98 Actual/360
C033 4,219,561.58 7.3162% 05/05/98 07/01/98 Actual/360
C034 3,449,361.88 7.1862% 06/05/98 08/01/98 Actual/360
C035 3,866,810.49 7.0562% 03/26/98 05/01/98 Actual/360
C036 1,948,447.93 7.4212% 07/14/98 09/01/98 Actual/360
C037 2,901,191.84 7.2112% 05/26/98 07/01/98 30/360
C038 905,223.55 7.0112% 05/26/98 07/01/98 30/360
C039 655,210.00 7.0112% 05/26/98 07/01/98 30/360
C040 1,492,564.78 7.0812% 05/18/98 07/01/98 Actual/360
C041 1,632,402.16 7.4612% 06/05/98 08/01/98 Actual/360
C042 3,079,810.06 7.2762% 05/07/98 07/01/98 Actual/360
C043 2,433,629.42 7.3062% 05/13/98 07/01/98 Actual/360
C044 3,287,933.80 7.7012% 06/09/98 08/01/98 Actual/360
C045 3,880,868.07 7.1962% 05/18/98 07/01/98 Actual/360
C046 4,197,877.62 7.1462% 05/18/98 07/01/98 Actual/360
C047 2,991,502.55 7.1962% 05/18/98 07/01/98 Actual/360
C048 812,642.57 7.3212% 07/14/98 09/01/98 Actual/360
C049 3,327,972.43 6.9312% 08/26/98 10/01/98 Actual/360
C050 2,070,771.83 7.2012% 05/18/98 07/01/98 Actual/360
C051 832,715.45 7.2012% 05/18/98 07/01/98 Actual/360
C052 6,108,511.72 6.8662% 04/30/98 06/01/98 Actual/360
C053 888,138.17 7.1012% 06/02/98 08/01/98 Actual/360
C054 4,658,102.63 7.2112% 06/05/98 08/01/98 Actual/360
C055 1,281,343.49 7.3212% 08/13/98 10/01/98 Actual/360
C056 3,248,255.02 7.3362% 06/12/98 08/01/98 Actual/360
C057 4,083,227.02 7.1912% 05/21/98 07/01/98 Actual/360
C058 1,861,546.97 7.2162% 06/18/98 08/01/98 Actual/360
C059 2,344,172.30 7.2712% 06/18/98 08/01/98 30/360
C060 5,032,815.90 7.2262% 07/08/98 09/01/98 Actual/360
C061 3,778,795.60 6.7112% 07/13/98 09/01/98 Actual/360
C062 893,538.74 7.3012% 06/08/98 08/01/98 Actual/360
C063 1,582,261.58 7.1462% 06/01/98 08/01/98 Actual/360
C064 1,831,534.11 7.3962% 06/16/98 08/01/98 Actual/360
C065 3,000,573.06 7.2962% 05/28/98 07/01/98 Actual/360
C066 1,040,575.35 7.5612% 07/22/98 09/01/98 Actual/360
C067 4,462,315.00 7.3062% 06/04/98 08/01/98 Actual/360
C068 3,657,033.38 7.3662% 05/21/98 07/01/98 Actual/360
C069 2,187,945.47 7.2662% 06/09/98 08/01/98 Actual/360
C070 1,860,078.59 7.1612% 07/02/98 09/01/98 Actual/360
C071 2,097,307.41 6.9262% 07/07/98 09/01/98 Actual/360
C072 934,820.41 7.3762% 07/23/98 09/01/98 Actual/360
C073 2,016,544.47 7.0812% 08/21/98 10/01/98 Actual/360
C074 2,556,281.32 7.3512% 05/11/98 07/01/98 Actual/360
C075 2,763,176.76 7.4012% 05/11/98 07/01/98 Actual/360
C076 1,691,657.31 7.3512% 05/19/98 07/01/98 Actual/360
C077 2,758,008.91 7.3062% 07/09/98 09/01/98 Actual/360
C078 1,983,028.07 6.8862% 04/02/98 06/01/98 Actual/360
C079 926,614.05 6.8862% 04/02/98 06/01/98 Actual/360
C080 907,786.48 6.8862% 04/02/98 06/01/98 Actual/360
C081 3,022,047.56 7.0962% 07/31/98 10/01/98 Actual/360
C082 4,359,617.97 6.8362% 06/15/98 08/01/98 Actual/360
C083 1,195,586.41 7.4612% 05/13/98 07/01/98 Actual/360
C084 2,314,381.05 7.3362% 06/25/98 08/01/98 Actual/360
C085 3,908,411.35 6.6512% 07/14/98 09/01/98 Actual/360
C086 6,225,464.09 7.7562% 10/13/98 12/01/98 Actual/360
C087
C088
C089 4,022,696.00 6.9912% 07/06/98 09/01/98 Actual/360
C090 3,290,928.44 6.9212% 08/13/98 10/01/98 Actual/360
C091 5,040,619.69 6.7262% 06/26/98 08/01/98 Actual/360
C092 3,510,795.08 7.0862% 04/23/98 06/01/98 Actual/360
C093 4,382,789.18 7.0362% 04/23/98 06/01/98 Actual/360
C094 3,240,722.77 7.0062% 04/23/98 06/01/98 Actual/360
C095 12,287,782.11 7.0862% 04/23/98 06/01/98 Actual/360
C096 1,644,173.69 7.7562% 05/29/98 07/01/98 Actual/360
C097 5,957,078.25 6.9612% 06/03/98 08/01/98 Actual/360
C098
C099
C100
C101
C102
C103
C104
C105
C106
C107 5,534,061.76 7.1662% 06/30/98 08/01/98 Actual/360
C108 4,362,618.81 7.1662% 06/30/98 08/01/98 Actual/360
C109 4,928,143.16 7.1662% 06/30/98 08/01/98 Actual/360
C110 3,756,698.37 7.1662% 06/30/98 08/01/98 Actual/360
C111 2,443,130.98 7.4362% 05/19/98 07/01/98 Actual/360
C112 4,145,032.79 6.4912% 09/11/98 11/01/98 Actual/360
C113 4,074,507.68 6.1612% 09/22/98 11/01/98 Actual/360
C114 1,365,906.90 7.2162% 08/12/98 10/01/98 Actual/360
C115 3,221,003.65 7.0562% 09/03/98 11/01/98 Actual/360
C116 4,841,221.69 7.1962% 09/29/98 11/01/98 Actual/360
C117 5,142,704.89 7.1462% 09/29/98 11/01/98 Actual/360
C118 1,229,733.67 7.6112% 05/21/98 08/01/98 Actual/360
C119 1,475,683.04 7.6112% 05/21/98 08/01/98 Actual/360
C120 12,211,297.38 6.8112% 09/28/98 11/01/98 Actual/360
</TABLE>
<PAGE>
SCHEDULE II
SUB-SERVICING AGREEMENTS IN EFFECT
AS OF THE CLOSING DATE
Sub-Servicer Original Contract Date
- ------------ ----------------------
1. GMAC Commercial Mortgage December 30, 1998
2. Financial Federal Savings Bank December 30, 1998
3. Huntington Mortgage Company December 30, 1998
4. Keycorp Real Estate Capital Markets, Inc. December 30, 1998
5. Legg Mason Real Estate Services, Inc. December 30, 1998
6. Collateral Mortgage Ltd. December 30, 1998
7. Mitchell Mortgage Company, LLC December 30, 1998
8. L.J. Melody & Company December 30, 1998
<PAGE>
SCHEDULE III
Schedule of Exceptions to Mortgage File Delivery
[None.]
<PAGE>
EXHIBIT A-1
FORM OF CLASS X CERTIFICATE
CLASS X MULTIFAMILY/COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1998-MC3
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: December 1, 1998
Class Notional Amount of all the
Cut-off Date: December 1, 1998 Class X Certificates as of the
Issue Date:
$__________________
Issue Date: December 30, 1998 Aggregate unpaid principal balance
of the Mortgage Pool as of the
Cut-off Date, after deducting
payments of principal due on or
before such date (the "Initial Pool
Balance"): $908,161,006
First Distribution Date: January 19, 1999
Master Servicer:
AMRESCO Services, L.P.
Special Servicer: Trustee and REMIC Administrator:
Allied Capital Corporation LaSalle National Bank
Mortgage Loan Sellers: Fiscal Agent:
Citicorp Real Estate, Inc. and ABN AMRO Bank N.V.
Salomon Brothers Realty Corp.
Certificate No. X-___ CUSIP No. _____________
A-1-1
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE SPONSOR,
THE TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MORTGAGE
CAPITAL FUNDING, INC., CITICORP REAL ESTATE, INC., SALOMON BROTHERS REALTY
CORP., LASALLE NATIONAL BANK, AMRESCO SERVICES L.P., ALLIED CAPITAL
CORPORATION, ABN AMRO BANK N.V., OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE. THE
FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE U.S.
FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS CERTIFICATE.
THE ISSUE DATE OF THIS CERTIFICATE IS DECEMBER 30, 1998. 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 ARD 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 A CONSTANT YIELD METHOD WITH DAILY COMPOUNDING. NO
REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL NOT PREPAY OR THAT, IF THEY
DO, THEY WILL PREPAY AT ANY PARTICULAR RATE.
THIS CERTIFICATE DOES NOT HAVE A CERTIFICATE PRINCIPAL BALANCE AND
DOES NOT ENTITLE THE HOLDER HEREOF TO ANY DISTRIBUTIONS OF
PRINCIPAL. THE HOLDER HEREOF WILL BE ENTITLED TO DISTRIBUTIONS OF
INTEREST ACCRUED AS PROVIDED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN ON THE CERTIFICATE NOTIONAL AMOUNT
A-1-2
<PAGE>
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 Sellers, 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 18th day of each month or, if such 18th 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 Agreement. As provided in the
Agreement, withdrawals from the Collection 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.
A-1-3
<PAGE>
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 Sellers, the Master Servicer, the
Special Servicer, the Trustee, the REMIC Administrator, the Fiscal Agent, 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 Sellers, the Master Servicer, the
Special Servicer, the Trustee, the REMIC Administrator, the Fiscal Agent, 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, (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Sponsor or the
Mortgage Loan Sellers) at a price determined as provided in the Agreement of
all Mortgage Loans and any REO Properties remaining in the Trust Fund, and
(iii) the exchange by any Sole Certificateholder of all the Certificates for
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 Sellers, the Master Servicer, the Special Servicer,
the Trustee, the REMIC Administrator and the Fiscal Agent thereunder and the
rights of the Certificateholders thereunder, at any time by the Sponsor, the
Mortgage Loan Sellers, the Master Servicer, the Special Servicer, the Trustee,
the REMIC Administrator and the Fiscal Agent 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
A-1-4
<PAGE>
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain circumstances,
including any amendment necessary to maintain the status of REMIC I, REMIC II
or REMIC III as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it
will look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal
laws of the State of New York 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-1-5
<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 X Certificates referred to in the
within-mentioned Agreement.
Dated:
LaSalle National Bank,
as Certificate Registrar
By:
------------------------------------
Authorized Officer
A-1-6
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Multifamily/ Commercial Mortgage Pass-Through Certificate and hereby
authorize(s) the registration of transfer of such interest to the above named
assignee on the Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Multifamily/Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to
the above named assignee and delivery of such Multifamily/Commercial Mortgage
Pass-Through Certificate to the following address:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of Assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to ______________________ for the
account of ____________________________________________________________________
_______________________________________________________________________________
Distributions made by check (such check to be made payable to
_________________) and all applicable statements and notices should be mailed
to _______________________________.
This information is provided by ______________________, the assignee
named above, or ______________________, as its agent.
A-1-7
<PAGE>
EXHIBIT A-2
FORM OF CLASS [A-1][A-2] CERTIFICATE
CLASS [A-1][A-2] MULTIFAMILY/COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1998-MC3
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
______% per annum (subject to reduction this Certificate as of the Issue
as provided in the Pooling and Servicing Date:
Agreement referred to herein) $______________
Date of Pooling and Servicing Class Principal Balance of all the
Agreement: December 1, 1998 Class [A-1] [A-2] Certificates as
of the Issue Date:
Cut-off Date: December 1, 1998 $______________
Issue Date: December 30, 1998 Aggregate unpaid principal balance
of the Mortgage Pool as of the
First Distribution Date: January 19, 1999 Cut-off Date, after deducting
payments of principal due on or
before such date (the "Initial Pool
Balance"): $908,161,006
Master Servicer: Trustee and REMIC Administrator:
AMRESCO Services, L.P. LaSalle National Bank
Special Servicer: Fiscal Agent:
Allied Capital Corporation ABN AMRO Bank N.V.
Mortgage Loan Sellers:
Citicorp Real Estate, Inc. and
Salomon Brothers Realty Corp.
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., SALOMON BROTHERS REALTY
CORP., LASALLE NATIONAL BANK, AMRESCO SERVICES L.P., ALLIED CAPITAL
CORPORATION, ABN AMRO BANK N.V., OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
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 Sellers,
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 18th day of each month or, if such 18th 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-2-2
<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 Collection 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
A-2-3
<PAGE>
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 Sellers, the Master Servicer, the
Special Servicer, the Trustee, the REMIC Administrator, the Fiscal Agent, 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 Sellers, the Master Servicer, the
Special Servicer, the Trustee, the REMIC Administrator, the Fiscal Agent, 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, (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Sponsor or the
Mortgage Loan Sellers) at a price determined as provided in the Agreement of
all Mortgage Loans and any REO Properties remaining in the Trust Fund and (iii)
the exchange by any Sole Certificateholder of all the Certificates for 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 Sellers, the Master Servicer, the Special Servicer,
the Trustee, the REMIC Administrator and the Fiscal Agent thereunder and the
rights of the Certificateholders thereunder, at any time by the Sponsor, the
Mortgage Loan Sellers, the Master Servicer, the Special Servicer, the Trustee,
the REMIC Administrator and the Fiscal Agent with the consent of the Holders of
Certificates entitled to at least 51% of the Voting Rights allocated to the
affected Classes. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof,
in certain circumstances, including any amendment necessary to maintain the
status of REMIC I, REMIC II or REMIC III as a REMIC, without the consent of the
Holders of any of the Certificates.
A-2-4
<PAGE>
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it
will look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal
laws of the State of New York 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 1998-MC3
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
[_____% per annum (subject to reduction as this Certificate as of the Issue
provided in the Pooling and Serving Date:
Agreement referred to herein)] [Variable] $_________________
Date of Pooling and Servicing Class Principal Balance of all the
Agreement: December 1, 1998 Class [B][C][D][E] Certificates as
of the Issue Date:
$_________________
Cut-off Date: December 1, 1998 Aggregate unpaid principal balance
of the Mortgage Pool as of the
Issue Date: December 30, 1998 Cut-off Date, after deducting
payments of principal due on or
First Distribution Date: January 19, 1999 before such date (the "Initial Pool
Balance"): $908,161,006
Master Servicer: Trustee and REMIC Administrator:
AMRESCO Services, L.P. LaSalle National Bank
Special Servicer: Fiscal Agent:
Allied Capital Corporation ABN AMRO Bank N.V.
Mortgage Loan Sellers:
Citicorp Real Estate, Inc. and
Salomon Brothers Realty Corp.
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., SALOMON BROTHERS REALTY
CORP., LASALLE NATIONAL BANK, AMRESCO SERVICES L.P., ALLIED CAPITAL
CORPORATION, ABN AMRO BANK N.V., OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THE CLASS OF CERTIFICATES TO WHICH THIS CERTIFICATE BELONGS IS SUBORDINATE TO
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.
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 SOLELY FOR THE PURPOSES OF APPLYING THE U.S.
FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS CERTIFICATE.
THE ISSUE DATE OF THIS CERTIFICATE IS DECEMBER 30, 1998. 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 ARD LOANS (AS DEFINED IN THE POOLING AND
A-3-2
<PAGE>
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 A CONSTANT YIELD METHOD WITH DAILY COMPOUNDING. 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 Sellers,
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 18th day of each month or, if such 18th 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
A-3-3
<PAGE>
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 Collection Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the
payment of interest on such advances and expenses.
The Certificates are issuable in fully registered form only without
coupons in minimum denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, the
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
Each Person who acquires this Certificate or any interest herein shall
be deemed to have certified that it is neither a Plan nor any Person who is
directly or indirectly purchasing this Certificate or such interest herein on
behalf of, as named fiduciary of, as trustee of, or with assets of a Plan, or
alternatively, that the purchase, continued holding and transfer of this
Certificate or such interest herein is exempt from the prohibited transaction
provisions of Section 406 of ERISA and Section 4975 of the Code under Sections
I and III of Prohibited Transaction Class Exemption 95-60.
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.
A-3-4
<PAGE>
Prior to due presentment of this Certificate for registration of
transfer, the Sponsor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Trustee, the REMIC Administrator, the Fiscal Agent, 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 Sellers, the Master Servicer, the
Special Servicer, the Trustee, the REMIC Administrator, the Fiscal Agent, 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, (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Sponsor or the
Mortgage Loan Sellers) at a price determined as provided in the Agreement of
all Mortgage Loans and any REO Properties remaining in the Trust Fund, and
(iii) the exchange by any Sole Certificateholder of all the Certificates for
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 Sellers, the Master Servicer, the Special Servicer,
the Trustee, the REMIC Administrator and the Fiscal Agent thereunder and the
rights of the Certificateholders thereunder, at any time by the Sponsor, the
Mortgage Loan Sellers, the Master Servicer, the Special Servicer, the Trustee,
the REMIC Administrator and the Fiscal Agent with the consent of the Holders of
Certificates entitled to at least 51% of the Voting Rights allocated to the
affected Classes. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof,
in certain circumstances, including any amendment necessary to maintain the
status of REMIC I, REMIC II or REMIC III as a REMIC, without the consent of the
Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it
will look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal
laws of the State of New York 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-3-5
<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 [B][C][D][E] Certificates referred to in the
within-mentioned Agreement.
Dated:
LaSalle National Bank,
as Certificate Registrar
By:
-------------------------------------
Authorized Officer
A-3-6
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
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-3-7
<PAGE>
EXHIBIT A-4
FORM OF CLASS [F][G][H][J][K][L] CERTIFICATE
CLASS [F][G][H][J][K][L] MULTIFAMILY/COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1998-MC3
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
[____% per annum (subject to reduction as this Certificate as of the Issue
provided in the Pooling and Servicing Date:
Agreement referred to herein)][Variable] $____________
Date of Pooling and Servicing Class Principal Balance of all Class
Agreement: December 1, 1998 [F][G][H][J][K][L] Certificates as
of the Issue Date:
$____________
Cut-off Date: December 1, 1998 Aggregate unpaid principal balance
of the Mortgage Pool as of the
Issue Date: December 30, 1998 Cut-off Date, after deducting
payments of principal due on or
First Distribution Date: January 19, 1999 before such date (the "Initial Pool
Balance"): $908,161,006
Master Servicer: Trustee and REMIC Administrator:
AMRESCO Services, L.P. LaSalle National Bank
Special Servicer: Fiscal Agent:
Allied Capital Corporation ABN AMRO Bank N.V.
Mortgage Loan Sellers:
Citicorp Real Estate, Inc. and
Salomon Brothers Realty Corp.
Certificate No. _____________-___ CUSIP No. ____________
A-4-1
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MORTGAGE
CAPITAL FUNDING, INC., CITICORP REAL ESTATE, INC., SALOMON BROTHERS REALTY
CORP., LASALLE NATIONAL BANK, AMRESCO SERVICES L.P., ALLIED CAPITAL
CORPORATION, ABN AMRO BANK N.V., OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THE CLASS OF CERTIFICATES TO WHICH THIS CERTIFICATE BELONGS, IS SUBORDINATE TO
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, PLEDGE, 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 MAY BE MADE TO (A) 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 (B) ANY PERSON WHO IS DIRECTLY OR
INDIRECTLY PURCHASING THIS CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS
NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT, EXCEPT IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THE TRUST FUND IN WHICH THIS CERTIFICATE EVIDENCES AN INTEREST HAS NOT BEEN
REGISTERED AS AN "INVESTMENT COMPANY" UNDER THE INVESTMENT COMPANY ACT OF 1940,
AS AMENDED (THE "INVESTMENT COMPANY ACT"). ACCORDINGLY, THIS CERTIFICATE MAY
NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT TO (1) A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT (A
"QUALIFIED INSTITUTIONAL BUYER") OR (2) AN ACCREDITED INVESTOR WITHIN THE
MEANING OF PARAGRAPH (1), (2), (3) OR (7) OF RULE 501(A) OF REGULATION D UNDER
THE SECURITIES ACT OR AN ENTITY IN WHICH ALL THE EQUITY OWNERS CONSTITUTE
ENTITIES DESCRIBED IN SUCH PARAGRAPHS (AN "INSTITUTIONAL ACCREDITED INVESTOR").
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
A-4-2
<PAGE>
FOR THE PURPOSES OF APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE
DISCOUNT ("OID") RULES TO THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE
IS DECEMBER 30, 1998. 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 ARD 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 A CONSTANT YIELD METHOD WITH DAILY
COMPOUNDING. 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 Salomon Smith Barney Inc. 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 Sellers,
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 18th day of each month or, if such 18th 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
A-4-3
<PAGE>
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 Collection Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the
payment of interest on such advances and expenses.
The Certificates are issuable in fully registered form only without
coupons in minimum denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, the
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
No transfer of this Certificate or any interest herein shall be made
unless that transfer is made pursuant to an effective registration statement
under the Securities Act, and effective registration or qualification under
applicable state securities laws, or is made in a transaction which does not
require such registration or qualification. In the event a transfer of this
Certificate (other than in connection with the initial issuance of the
Certificates or a transfer of this Certificate by the Sponsor) is to be made
without registration under the Securities Act, then the Certificate Registrar
shall refuse to register such transfer until it receives the following: (i) a
certificate from the Certificateholder desiring to effect such transfer
substantially in the form attached as Exhibit B-1 to the Agreement and a
certificate from such Certificateholder's prospective transferee substantially
in
A-4-4
<PAGE>
the form attached as Exhibit B-2 or Exhibit B-3 to the Agreement; or (ii) 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 Sellers, the Master Servicer, the Special Servicer, the
Trustee, the REMIC Administrator, the Fiscal Agent 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 Holder of this Certificate desiring to effect such a
transfer shall be required to indemnify the Sponsor, the Trustee, the REMIC
Administrator, the Fiscal Agent, the Master Servicer, the Special Servicer 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 III of Prohibited Transaction Class Exemption ("PTCE")
95-60; or (y) 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. It is hereby acknowledged that
the form of certification attached to the Agreement as Exhibit D is acceptable
for the purposes of the preceding sentence. Each Person who acquires this
Certificate or any interest herein without delivery of the certification of
facts and/or opinion of counsel referred to in the preceding two sentences
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.
No service charge will be imposed for any registration of transfer or
exchange of Certificates, but the Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.
A-4-5
<PAGE>
Prior to due presentment of this Certificate for registration of
transfer, the Sponsor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Trustee, the REMIC Administrator, the Fiscal Agent, 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 Sellers, the Master Servicer, the
Special Servicer, the Trustee, the REMIC Administrator, the Fiscal Agent, 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, (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Sponsor or the
Mortgage Loan Sellers) at a price determined as provided in the Agreement of
all Mortgage Loans and any REO Properties remaining in the Trust Fund, and
(iii) the exchange by any sole Certificateholder of all the Certificates for
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 Sellers, the Master Servicer, the Special Servicer,
the Trustee, the REMIC Administrator and the Fiscal Agent thereunder and the
rights of the Certificateholders thereunder, at any time by the Sponsor, the
Mortgage Loan Sellers, the Master Servicer, the Special Servicer, the Trustee,
the REMIC Administrator and the Fiscal Agent with the consent of the Holders of
Certificates entitled to at least 51% of the Voting Rights allocated to the
affected Classes. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof,
in certain circumstances, including any amendment necessary to maintain the
status of REMIC I, REMIC II or REMIC III as a REMIC, without the consent of the
Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it
will look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
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<PAGE>
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 [F][G][H][J][K][L] Certificates referred to
in the within-mentioned Agreement.
Dated:
LaSalle National Bank,
as Certificate Registrar
By:
------------------------------------
Authorized Officer
A-4-8
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Multifamily/ Commercial Mortgage Pass-Through Certificate and hereby
authorize(s) the registration of transfer of such interest to the above named
assignee on the Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Multifamily/Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to
the above named assignee and delivery of such Multifamily/Commercial Mortgage
Pass-Through Certificate to the following address:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of Assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to ____________________________ for
the account of ____________________________.
Distributions made by check (such check to be made payable to
____________________________) and all applicable statements and notices should
be mailed to ____________________________.
This information is provided by ____________________________, the
assignee named above, or ____________________________, as its agent.
A-4-9
<PAGE>
EXHIBIT A-5
FORM OF CLASS [R-I][R-II][R-III] CERTIFICATE
CLASS [R-I][R-II][R-III] MULTIFAMILY/COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1998-MC3
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
Agreement: December 1, 1998 this Certificate in the related
Class: _____% Aggregate unpaid
Cut-off Date: December 1, 1998 principal balance of the
Mortgage Pool as of the Cut-off
Issue Date: December 30, 1998 Date, after deducting payments
of principal due on or before
First Distribution Date: January 19, 1999 such date (the "Initial Pool
Balance"): $908,161,006
Master Servicer: AMRESCO Services, L.P. Trustee and REMIC Administrator:
LaSalle National Bank
Special Servicer: Allied Capital Corporation
Mortgage Loan Sellers: Fiscal Agent:
Citicorp Real Estate, Inc. and ABN AMRO Bank N.A.
Salomon Brothers Realty Corp.
Certificate No. [R-I][R-II][R-III] - __
A-5-1
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MORTGAGE
CAPITAL FUNDING, INC., CITICORP REAL ESTATE, INC., SALOMON BROTHERS REALTY
CORP., LASALLE NATIONAL BANK, AMRESCO SERVICES L.P., ALLIED CAPITAL
CORPORATION, ABN AMRO BANK N.V., OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER
THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THE CLASS OF CERTIFICATES TO WHICH THIS CERTIFICATE BELONGS, IS SUBORDINATE TO
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, PLEDGE, 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 MAY BE MADE TO (A) 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 (B) ANY PERSON WHO IS DIRECTLY OR
INDIRECTLY PURCHASING THIS CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS
NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT, EXCEPT IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THE TRUST FUND IN WHICH THIS CERTIFICATE EVIDENCES AN INTEREST HAS NOT BEEN
REGISTERED AS AN "INVESTMENT COMPANY" UNDER THE INVESTMENT COMPANY ACT OF 1940,
AS AMENDED (THE "INVESTMENT COMPANY ACT"). ACCORDINGLY, THIS CERTIFICATE MAY
NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT TO A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT (A
"QUALIFIED INSTITUTIONAL BUYER").
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
A-5-2
<PAGE>
FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL BE DEEMED NOT 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 Salomon Smith Barney Inc. 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 Sellers, 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 18th day of each month or, if such 18th 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 Agreement. As provided in the
Agreement, withdrawals from the Collection 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.
A-5-3
<PAGE>
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
No transfer of this Certificate or any interest herein shall be made
unless that transfer is made pursuant to an effective registration statement
under the Securities Act, and effective registration or qualification under
applicable state securities laws, or is made in a transaction which does not
require such registration or qualification. In the event a transfer of this
Certificate (other than in connection with the initial issuance of the
Certificates or a transfer of this Certificate by the Sponsor) is to be made
without registration under the Securities Act, then the Certificate Registrar
shall refuse to register such transfer until it receives the following: (i) a
certificate from the Certificateholder desiring to effect such transfer
substantially in the form attached as Exhibit B-1 to the Agreement and a
certificate from such Certificateholder's prospective transferee substantially
in the form attached as Exhibit B-2 or Exhibit B-3 to the Agreement; or (ii) 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 Sellers, the Master Servicer, the Special Servicer, the
Trustee, the REMIC Administrator, the Fiscal Agent 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 REMIC Administrator, the
Fiscal Agent, the Master Servicer, the Special Servicer 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 III of Prohibited Transaction Class Exemption ("PTCE")
95-60; or (y) 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
A-5-4
<PAGE>
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. It
is hereby acknowledged that the form of certification attached to the Agreement
as Exhibit D is acceptable for the purposes of the preceding sentence. Each
Person who acquires this Certificate without delivery of the certification of
facts and opinion of counsel referred to in the preceding two sentences shall
be deemed to have certified that it is neither a Plan nor any Person who is
directly or indirectly purchasing this Certificate on behalf of, as named
fiduciary of, as trustee of, or with assets of a Plan.
Each Person who has or who acquires any Ownership Interest in this
Certificate shall be deemed by the acceptance or acquisition of such Ownership
Interest to have agreed to be bound by the provisions of Section 5.02(d) of the
Agreement and, if any purported Transferee shall become a Holder of this
Certificate in violation of the provisions of such Section 5.02(d), to have
irrevocably authorized the Trustee under clause (ii)(A) of such Section 5.02(d)
to deliver payments to a Person other than such Person and to have irrevocably
authorized the Trustee under clause (ii)(B) of such Section 5.02(d) to
negotiate the terms of any mandatory disposition and to execute all instruments
of transfer and to do all other things necessary in connection with any such
disposition. Each Person holding or acquiring any Ownership Interest in this
Certificate must be a Permitted Transferee and shall promptly notify the Master
Servicer, the Trustee and the REMIC Administrator of any change or impending
change in its status as a Permitted Transferee. In connection with any proposed
transfer of any Ownership Interest in this Certificate, the Certificate
Registrar shall require delivery to it, and shall not register the transfer of
this Certificate until its receipt of, an affidavit and agreement substantially
in the form attached as Exhibit C-1 to the Agreement (a "Transfer Affidavit and
Agreement") from the proposed Transferee, in form and substance satisfactory to
the Certificate Registrar, representing and warranting, among other things,
that such Transferee is a Permitted Transferee, that it is not acquiring its
Ownership Interest in this Certificate as a nominee, trustee or agent for any
Person that is not a Permitted Transferee, that for so long as it retains its
Ownership Interest in this Certificate, it will endeavor to remain a Permitted
Transferee, and that it has reviewed the provisions of Section 5.02(d) of the
Agreement and agrees to be bound by them. Notwithstanding the delivery of a
Transfer Affidavit and Agreement by a proposed Transferee, if the Certificate
Registrar has actual knowledge that the proposed Transferee is not a Permitted
Transferee, the Certificate Registrar shall not register the Transfer of an
Ownership Interest in this Certificate to such proposed Transferee.
Each Person holding or acquiring any Ownership Interest in this
Certificate shall agree (x) to require a Transfer Affidavit and Agreement from
any other Person to whom such Person attempts to transfer its Ownership
Interest herein and (y) not to transfer its Ownership Interest herein unless it
provides to the Certificate Registrar a certificate substantially in the form
attached as Exhibit C-2 to the Agreement stating that, among other things, it
has no actual knowledge that such other Person is not a Permitted Transferee.
Each Person holding or acquiring an Ownership Interest in this Certificate, by
purchasing such Ownership Interest herein, agrees to give the Trustee and the
REMIC Administrator written notice that it is a "pass-through interest holder"
within the meaning of temporary Treasury regulation Section 1.67-3T(a)(2)(i)(A)
immediately upon acquiring such Ownership Interest, if it is, or is holding
such Ownership Interest on behalf of, a "pass-through interest holder".
The provisions of Section 5.02(d) of the Agreement may be modified,
added to or eliminated, provided that there shall have been delivered to the
Trustee and the REMIC Administrator the following: (a) written notification
from each Rating Agency to the effect that the modification of, addition to or
elimination of such provisions will not cause such Rating Agency to
A-5-5
<PAGE>
withdraw 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 any of REMIC I, REMIC
II or REMIC III 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.
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 Sellers, the Master Servicer, the
Special Servicer, the Trustee, the REMIC Administrator, the Fiscal Agent, 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
A-5-6
<PAGE>
of the Sponsor, the Mortgage Loan Sellers, the Master Servicer, the Special
Servicer, the Trustee, the REMIC Administrator, the Fiscal Agent, 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, (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Sponsor or the
Mortgage Loan Sellers) at a price determined as provided in the Agreement of
all Mortgage Loans and any REO Properties remaining in the Trust Fund, and
(iii) the exchange by any Sole Certificateholder of all the Certificates for
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 Sellers, the Master Servicer, the Special Servicer,
the Trustee, the REMIC Administrator and the Fiscal Agent thereunder and the
rights of the Certificateholders thereunder, at any time by the Sponsor, the
Mortgage Loan Sellers, the Master Servicer, the Special Servicer, the Trustee,
the REMIC Administrator and the Fiscal Agent with the consent of the Holders of
Certificates entitled to at least 51% of the Voting Rights allocated to the
affected Classes. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof,
in certain circumstances, including any amendment necessary to maintain the
status of REMIC I, REMIC II or REMIC III as a REMIC, without the consent of the
Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it
will look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal
laws of the State of New York 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-5-7
<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 [R-I] [R-II][R-III] Certificates referred to
in the within-mentioned Agreement.
Dated:
LaSalle National Bank,
as Certificate Registrar
By:
-----------------------------------
Authorized Officer
A-5-8
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Multifamily/ Commercial Mortgage Pass-Through Certificate and hereby
authorize(s) the registration of transfer of such interest to the above named
assignee on the Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Multifamily/Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to
the above named assignee and delivery of such Multifamily/Commercial Mortgage
Pass-Through Certificate to the following address:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of Assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to _____________________ for the
account of _____________________.
Distributions made by check (such check to be made payable to
_____________________) and all applicable statements and notices should be
mailed to _____________________.
This information is provided by _____________________, the assignee
named above, or _____________________, as its agent.
A-5-9
<PAGE>
EXHIBIT B-1
FORM OF TRANSFEROR CERTIFICATE
PURSUANT TO SECTION 5.02(b)
[date]
LaSalle National Bank
135 South LaSalle Street, Suite 1625
Chicago, Illinois 60603
Attention: Asset Backed Securities Trust Services -
Mortgage Capital Funding, Inc., Series 1998-MC3
Re: Mortgage Capital Funding, Inc., Multifamily/Commercial
Mortgage Pass-Through Certificates, Series 1998-MC3, Class
___, [o having an initial aggregate Certificate Principal
Balance as of December 30, 1998 (the "Closing Date") of
$908,161,006] [o 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 December 1, 1998, among Mortgage Capital
Funding, Inc., as Sponsor, Citicorp Real Estate, Inc. and Salomon Brothers
Realty Corp., as Mortgage Loan Sellers, AMRESCO Services, L.P., as Master
Servicer, Allied Capital Corporation, 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 Non-Registered
Certificate or any other similar security to any person in any manner,
(b) solicited any offer to buy or accept a transfer, pledge or other
disposition of any Non-Registered Certificate, any interest in a
Non-Registered Certificate or any other similar security from any
person in any manner, (c) otherwise approached or negotiated with
respect to any Non-Registered Certificate, any interest in a
Non-Registered Certificate or any other similar security with any
person in any manner, (d) made any general solicitation with respect
to any Non-Registered Certificate, any interest in a 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
NonRegistered 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
B-1-1
<PAGE>
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.
3. The Transferee is an entity which the Transferor reasonably
believes to be a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act[, or an institutional
"accredited investor" (within the meaning of paragraphs (1), (2), (3)
or (7) of Rule 501(a) under the Securities Act or an entity in which
each equity owner is such an institutional "accredited investor"
(within the meaning of such paragraphs of Rule 501(a) under the
Securities Act)]).
Very truly yours,
-----------------------------------
(Transferor)
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
B-1-2
<PAGE>
EXHIBIT B-2
FORM I OF TRANSFEREE CERTIFICATE
PURSUANT TO SECTION 5.02(b)
FOR TRANSFERS OF NON-REGISTERED CERTIFICATES
[FOR QIBS]
[date]
LaSalle National Bank
135 South LaSalle Street, Suite 1625
Chicago, Illinois 60603
Attention: Asset Backed Securities Trust Services-
Mortgage Capital Funding, Inc., Series 1998-MC3
Re: Mortgage Capital Funding, Inc., Multifamily/Commercial Mortgage
Pass-Through Certificates, Series 1998-MC3, Class ___, [o having
an initial aggregate Certificate Principal Balance as of
December 30, 1998 (the "Closing Date") of $908,161,006]
[o 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 December 1, 1998, among Mortgage Capital
Funding, Inc., as Sponsor, Citicorp Real Estate, Inc. and Salomon Brothers
Realty Corp., as Mortgage Loan Sellers, AMRESCO Services, L.P., as Master
Servicer, Allied Capital Corporation, 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-2-1
<PAGE>
2. 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 and the
Trust created pursuant thereto, (e) any credit enhancement mechanism
associated with the Transferred Certificates, and (f) 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:
-------------------------------
B-2-2
<PAGE>
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-2-3
<PAGE>
ANNEX 1 TO EXHIBIT B-2
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] [each of the Transferee's equity owners]
owned and/or invested on a discretionary basis $______________________1 in
securities (other than the excluded securities referred to below) as of the end
of its 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 or each of its equity owners must own and/or invest on a
discretionary basis at least $100,000,000 in securities unless Transferee or
any such equity owner, as the case may be, is a dealer, and, in that case,
Transferee or such equity owner, as the case may be, must own and/or invest on
a discretionary basis at least $10,000,000 in securities.
B-2-4
<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.
___ QIB Subsidiary. each of the Transferee's equity owners is a
"qualified institutional buyer" within the meaning of Rule 144A.
___ 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. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by any Person, the Transferee
did not include (i) securities of issuers that are affiliated with such Person,
(ii) securities that are part of an unsold allotment to or subscription by such
Person, if such Person 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.
B-2-5
<PAGE>
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by any Person, the Transferee
used the cost of such securities to such Person, unless such Person reports its
securities holdings in its financial statements on the basis of their market
value, and no current information with respect to the cost of those securities
has been published, in which case the securities were valued at market.
Further, in determining such aggregate amount, the Transferee may have included
securities owned by subsidiaries of such Person, but only if such subsidiaries
are consolidated with such Person in its financial statements prepared in
accordance with generally accepted accounting principles and if the investments
of such subsidiaries are managed under such Person's direction. However, such
securities were not included if such Person is a majority-owned, consolidated
subsidiary of another enterprise and such Person 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 Certificates only for the Transferee's own account?
6. If the answer to the foregoing question is "no," then in each case
where the Transferee is purchasing for an account other than its own, such
account belongs to a third party that is itself a "qualified institutional
buyer" within the meaning of Rule 144A, and the "qualified institutional buyer"
status of such third party has been established by the Transferee through one
or more of the appropriate methods contemplated by Rule 144A.
7. The Transferee will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Transferee's purchase of the Transferred
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties any updated annual financial statements that become available on or
before the date of such purchase, promptly after they become available.
8. Capitalized terms used but not defined herein have the respective
meanings assigned thereto in the Pooling and Servicing Agreement pursuant to
which the Transferred Certificates were issued.
----------------------------------------
Print Name of Transferee
By:
-------------------------------------
Name:
--------------------------------
Title:
-------------------------------
Date:
--------------------------------
B-2-6
<PAGE>
ANNEX 2 TO EXHIBIT B-2
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).
B-2-7
<PAGE>
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part of
the Transferee's Family of Investment Companies, (ii) bank deposit notes and
certificates of deposit, (iii) loan participations, (iv) repurchase agreements,
(v) securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps. For purposes of determining the aggregate
amount of securities owned and/or invested on a discretionary basis by the
Transferee, or owned by the Transferee's Family of Investment Companies, the
securities referred to in this paragraph were excluded.
5. The Transferee is familiar with Rule 144A and understands that the
Transferor and other parties related to the Transferred Certificates are
relying and will continue to rely on the statements made herein because one or
more sales to the Transferee will be in reliance on Rule 144A.
___ ___
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.
8. Capitalized terms used but not defined herein have the respective
meanings assigned thereto in the Pooling and Servicing Agreement pursuant to
which the Transferred Certificates were issued.
------------------------------------
Print Name of Transferee or Adviser
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
IF AN ADVISER:
------------------------------------
Print Name of Transferee
Date:
-------------------------------
B-2-8
<PAGE>
EXHIBIT B-3
FORM II OF TRANSFEREE CERTIFICATE
PURSUANT TO SECTION 5.02(b)
FOR TRANSFERS OF NON-REGISTERED CERTIFICATES
[FOR INSTITUTIONAL ACCREDITED INVESTORS]
_____________, 19__
LaSalle National Bank
135 South LaSalle Street
Suite 1625
Chicago, Illinois 60603
Attention: Asset Backed Securities Trust Services -
Mortgage Capital Funding Series 1998-MC3
Re: Mortgage Capital Funding, Inc., Multifamily/Commercial Mortgage
Pass-Through Certificates, Series 1998-MC3, Class ________, having
an initial aggregate Certificate Principal Balance as of December
30, 1998 (the "Closing Date") of $___________________
Dear Sirs:
This letter is delivered to you in connection with the transfer by
_______________________ (the "Transferor") to __________________________ (the
"Transferee") of the captioned Certificates (the "Transferred Certificates"),
pursuant to Section 5.02 of the Pooling and Servicing Agreement (the "Pooling
and Servicing Agreement"), dated as of December 1, 1998, among Mortgage Capital
Funding, Inc., as Sponsor, Citicorp Real Estate, Inc. and Salomon Brothers
Realty Corp., as Mortgage Loan Sellers, AMRESCO Services, L.P., as Master
Servicer, Allied Capital Corporation, 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) the Sponsor, the
Trustee and the Certificate Registrar are not obligated so to register or
qualify the Transferred Certificates and (c) neither the Transferred
Certificates nor any security issued in exchange therefor or in lieu thereof
may be resold or transferred unless it is (i) registered pursuant to the
Securities Act and registered or qualified pursuant to any applicable state
securities laws or (ii) sold or transferred in a transaction which is exempt
from such registration and qualification 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 and a
certificate from the prospective transferee substantially in the form attached
either as Exhibit
B-3-1
<PAGE>
B-2 or Exhibit B-3 to the Pooling and Servicing Agreement or (B) 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, PLEDGE, 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 MAY BE MADE TO
(A) ANY 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 (B) ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY
OF, AS TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT, EXCEPT IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
THE TRUST FUND IN WHICH THIS CERTIFICATE EVIDENCES AN INTEREST HAS NOT
BEEN REGISTERED AS AN "INVESTMENT COMPANY" UNDER THE INVESTMENT
COMPANY ACT OF 1940, AS AMENDED (THE "INVESTMENT COMPANY ACT").
ACCORDINGLY, THIS CERTIFICATE MAY NOT BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT TO (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT (A "QUALIFIED
INSTITUTIONAL BUYER") OR (2) AN ACCREDITED INVESTOR WITHIN THE MEANING
OF PARAGRAPH (1), (2), (3) OR (7) OF RULE 501(a) OF REGULATION D UNDER
THE SECURITIES ACT OR AN ENTITY IN WHICH ALL THE EQUITY OWNERS
CONSTITUTE ENTITIES DESCRIBED IN SUCH PARAGRAPHS (AN "INSTITUTIONAL
ACCREDITED INVESTOR").
B-3-2
<PAGE>
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 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 and the Trust created pursuant thereto, (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:
-----------------------------
Date:
------------------------------
B-3-3
<PAGE>
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-3-4
<PAGE>
EXHIBIT C-1
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
PURSUANT TO SECTION 5.02(d)(i)(b)
STATE OF )
) participation.:
COUNTY OF )
_____________________, being first duly sworn, deposes and says that:
1. He/She is a _________________ of ____________________ (the
prospective transferee (the "Transferee") of a Mortgage Capital Funding, Inc.,
Class R-[I][II][III] Multifamily/Commercial Mortgage Pass-Through Certificate,
Series 1998-MC3, evidencing a 100% 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.)
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,
C-1-1
<PAGE>
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.
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,
C-1-2
<PAGE>
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 ___________________ and its corporate seal to be hereunto attached,
attested by its [Assistant] Secretary, this ___ day of _________, 1998.
----------------------------------------
(Transferee)
By:
-------------------------------------
Name:
Title:
[Corporate Seal]
ATTEST:
- ------------------------------
[Assistant] Secretary
Personally appeared before me the above-named _____________________,
known or proved to me to be the same person who executed the foregoing
instrument and to be the _____________________ of the Transferee, and
acknowledged to me that he/she executed the same as his/her free act and deed
and the free act and deed of the Transferee
Subscribed and sworn before me this ___ day of ______________, 1998.
----------------------------------------
NOTARY PUBLIC
COUNTY OF ___________
STATE OF _____________
My Commission expires the _________
C-1-4
<PAGE>
EXHIBIT C-2
FORM OF TRANSFEROR CERTIFICATE
PURSUANT TO SECTION 5.02(d)(i)(d)
[date]
LaSalle National Bank
135 South LaSalle Street
Suite 1625
Chicago, Illinois 60603
Attention: Mortgage Capital Funding, Inc., Series 1998-MC3
Restricted Transfer Unit
Re: Mortgage Capital Funding, Inc., Multifamily/Commercial Mortgage
Pass-Through Certificates, Series 1998-MC3, Class
R-[I][II][III], 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][III] Certificate (the "Residual
Certificate"), pursuant to Section 5.02 of the Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement"), dated as of December 1, 1998, among
Mortgage Capital Funding, Inc., as Sponsor, Citicorp Real Estate, Inc. and
Salomon Brothers Realty Corp., as Mortgage Loan Sellers, AMRESCO Services,
L.P., as Master Servicer, Allied Capital Corporation 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 Transferor understands that the transfer of
the Residual Certificate may not be respected for United
C-2-1
<PAGE>
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
FORM OF TRANSFEREE CERTIFICATE
IN CONNECTION WITH ERISA
(DEFINITIVE CERTIFICATES)
__________, 1998
LaSalle National Bank
135 South LaSalle Street
Suite 1625
Chicago, Illinois 60603
Attention: Mortgage Capital Funding, Inc., Series 1998-MC3
Restricted Transfer Unit
Re: Mortgage Capital Funding, Inc., Multifamily/Commercial Mortgage
Pass-Through Certificates, Series 1998-MC3, Class ____,
[having an initial aggregate Certificate Principal Balance as
of December 30, 1998 (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") of the captioned
Certificates (the "Transferred Certificates"), which were issued pursuant to
the Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"),
dated as of December 1, 1998, among Mortgage Capital Funding, Inc., as Sponsor,
Citicorp Real Estate, Inc., and Salomon Brothers Realty Corp., as Mortgage Loan
Sellers, AMRESCO Services, L.P., as Master Servicer, Allied Capital
Corporation, 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 you as Certificate Registrar, as follows (check the
applicable paragraph):
___ The Transferee is neither (A) an employee benefit plan or other
retirement arrangement, including an individual retirement account or
annuity, a Keogh plan or a collective investment fund or separate account
in which such plans, accounts or arrangements are invested, that is
subject to ERISA or the Code (each, a "Plan"), nor (B) a Person who is
directly or indirectly purchasing the Transferred Certificates on behalf
of, as named fiduciary of, as trustee of, or with assets of a Plan; or
D-1
<PAGE>
___ The Transferee is using funds from an insurance company general account
to acquire the Transferred Certificates, however, the purchase and
holding of such Certificates by such Person is exempt from the prohibited
transaction provisions of Section 406 of ERISA and Section 4975 of the
Code under Sections I and III of Prohibited Transaction Class Exemption
95-60; or
___ As otherwise set forth in the certification of facts and opinion of
counsel attached hereto as Annex A, the purchase and holding of the
Transferred Certificates by the Transferee 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 Pooling and
Servicing Agreement.
Very truly yours,
---------------------------------------
(Transferee)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
D-2
<PAGE>
EXHIBIT E
REQUEST FOR RELEASE
____________________, 19___
LaSalle National Bank
135 South LaSalle Street
Suite 1625
Chicago, Illinois 60603
Attention: Mortgage Custody Department/Release Area
Mortgage Capital Funding, Inc., Series 1998-MC3
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 December 1, 1998 (the "Pooling and Servicing Agreement"), by and
among Mortgage Capital Funding, Inc., as Sponsor, Citicorp Real Estate, Inc.
and Salomon Brothers Realty Corp., as Mortgage Loan Sellers, AMRESCO Services,
L.P., as Master Servicer, Allied Capital Corporation, as Special Servicer, ABN
AMRO Bank N.A., as Fiscal Agent, and you, as Trustee and REMIC Administrator,
the undersigned hereby requests a release of the Mortgage File (or the portion
thereof specified below) held by or on behalf of you as Trustee with respect to
the following described Mortgage Loan for the reason indicated below.
Mortgagor's Name:
--------------------------------------------------
Address:
-----------------------------------------------------------
Loan No.:
----------------------------------------------------------
If only particular documents in the Mortgage File are requested, please specify
which:
-------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Reason for requesting file (or portion thereof):
_____ 1. Mortgage Loan paid in full. The undersigned hereby certifies
that all amounts received in connection with the Mortgage Loan
that are required to be credited to the Collection 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)
E-1
<PAGE>
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.
[MASTER SERVICER] [SPECIAL SERVICER]
By:
----------------------------------
Name:
-----------------------------
Title:
E-2
<PAGE>
EXHIBIT F
FORM OF DISTRIBUTION DATE STATEMENT
F-1
<PAGE>
EXHIBIT G-1
FORM OF DELINQUENT LOAN STATUS REPORT
G-1-1
<PAGE>
EXHIBIT G-2
FORM OF HISTORICAL LOAN MODIFICATION REPORT
G-2-1
<PAGE>
EXHIBIT G-3
FORM OF HISTORICAL LOSS REPORT
G-3-1
<PAGE>
EXHIBIT G-4
FORM OF REO STATUS REPORT
G-4-1
<PAGE>
EXHIBIT G-5
FORM OF SPECIAL SERVICER LOAN STATUS REPORT
G-5-1
<PAGE>
EXHIBIT G-6
FORM OF OPERATING STATEMENT ANALYSIS REPORT
G-6-1
<PAGE>
EXHIBIT G-7
FORM OF COMPARATIVE FINANCIAL STATUS REPORT
G-7-1
<PAGE>
EXHIBIT G-8
FORM OF WATCHLIST
G-8-1
<PAGE>
EXHIBIT H-1
CSSA SET-UP DATA RECORD LAYOUT
H-1-1
<PAGE>
EXHIBIT H-2
CSSA PERIODIC DATA RECORD LAYOUT
H-2-1
<PAGE>
EXHIBIT H-3
CSSA PROPERTY DATA FILE
H-3-1
<PAGE>
MORTGAGE CAPITAL FUNDING, INC.
$805,992,000 (APPROXIMATE)
MULTIFAMILY/COMMERCIAL
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1998-MC3
CLASS A-1, CLASS A-2, CLASS X, CLASS B, CLASS C, CLASS D AND CLASS E
UNDERWRITING AGREEMENT
as of December 23, 1998
Salomon Smith Barney Inc.
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
Mortgage Capital Funding, Inc., a Delaware corporation ("MCFI"),
proposes to sell to Salomon Smith Barney Inc. (the "Underwriter"), pursuant to
this Underwriting Agreement (this "Agreement"), the classes of
Multifamily/Commercial Mortgage Pass-Through Certificates, Series 1998-MC3 that
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 L, Class R-I, Class R-II
and Class R-III 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 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 multifamily and commercial mortgage loans (the
"Mortgage Loans") that will have, as of the close of business on December 1,
1998 (the "Cut-off Date"), after taking into account all payments of principal
due on the Mortgage Loans on or before such date, whether or not received, an
aggregate principal balance of $908,161,006 (subject to a variance of plus or
minus 5.0%). Certain of the Mortgage Loans (or the right to have such
transferred to the Trust) will be acquired by MCFI from Citicorp Real Estate,
Inc. ("CREI"; and such Mortgage Loans, the "CREI Mortgage Loans"), pursuant to
a mortgage loan purchase agreement, dated as of the date hereof (the "CREI/MCFI
Mortgage Loan Purchase Agreement"), between MCFI and CREI. The remaining
Mortgage Loans will be acquired by MCFI from Salomon Brothers Realty Corp.
("SBRC"; and such remaining Mortgage Loans, the "SBRC Mortgage Loans"),
pursuant to a mortgage loan purchase agreement dated as of the date hereof (the
"SBRC/MCFI Mortgage Loan Purchase Agreement"), between MCFI and SBRC. Three
separate real estate mortgage investment conduit ("REMIC") elections will be
made with respect to the Trust Fund for
<PAGE>
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 the
Cut-off Date (the "Pooling and Servicing Agreement"), among MCFI as sponsor,
CREI and SBRC as mortgage loan sellers (in such capacity, each, a "Mortgage
Loan Seller"), AMRESCO Services, L.P., as master servicer (the "Master
Servicer"), Allied Capital Corporation, 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"). Capitalized terms used
but not defined herein have the meanings assigned thereto in the Pooling and
Servicing Agreement.
1. REPRESENTATIONS, WARRANTIES AND COVENANTS. MCFI represents and
warrants to, and covenants with, the Underwriter 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 has
become 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 that has heretofore been filed
pursuant to Rule 424 hereinafter is called the "Preliminary Prospectus". Any
reference herein to the terms "amend", "amendment" or "supplement" with respect
to the Registration 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
2
<PAGE>
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 to the Underwriter as to (i) 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 the Underwriter, CREI or
SBRC specifically for use in connection with the preparation of the Prospectus
or any revision or amendment thereof or supplement thereto or (ii) any
information in any Computational Materials and ABS Term Sheets (each as defined
in Section 9) provided by the Underwriter to prospective investors 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, that were not described or filed as required.
(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 Underwriter
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) 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 enforcement thereof 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.
(e) This Agreement has been duly authorized, executed and delivered by
MCFI and, assuming the valid authorization, execution and delivery hereof by
the Underwriter, constitutes a valid and binding obligation of MCFI enforceable
in accordance with its terms, except as enforcement hereof 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.
(f) 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.
(g) 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
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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.
(h) 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").
(i) The transfer of the Mortgage Loans to the Trust and the sale of
the Certificates to the Underwriter, at the Closing Date, will be treated by
MCFI for financial accounting and reporting purposes as a sale of assets and
not as a pledge of assets to secure debt.
2. PURCHASE AND SALE. Subject to the terms and conditions and in
reliance on the representations and warranties herein set forth, MCFI agrees to
sell to the Underwriter, and the Underwriter agrees to purchase from MCFI, 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 between
the Underwriter 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 the Registered Certificates shall be made to the Underwriter
against payment by the 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 the 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 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 THE UNDERWRITER. It is understood that the Underwriter
proposes to offer the Registered Certificates for sale as set forth in the
Prospectus. 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, the Underwriter therefore covenants and agrees with MCFI that sales of the
Registered Certificates made by the Underwriter in and from the State of New
York will be made only to institutional investors within the meaning of Policy
Statement 105.
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5. AGREEMENTS. MCFI agrees with the Underwriter 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 the
Underwriter for its review prior to filing, and will not file any such proposed
amendment or supplement to which the 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 the Underwriter when the Prospectus has
been so filed, or transmitted for filing, and, prior to the termination of the
offering of the Registered Certificates, will also promptly advise each
Underwriter (i) when any amendment to the Registration 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 that will correct such
statement or omission or effect such compliance.
(c) MCFI will furnish to the Underwriter and its counsel, 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 Underwriter 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 that would subject it to general or
unlimited service of process in any jurisdiction where it is not now so
subject.
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(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
Underwriter 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 Underwriter and (ii) the date hereof; and, if such filing is
subsequent to the date hereof, MCFI will promptly advise the Underwriter when
each such Current Report has been so filed. If any Collateral Term Sheet (as
defined in Section 9) is provided by the Underwriter to potential investors in
the Registered Certificates, MCFI will cause each such Collateral Term Sheet
that is delivered by the Underwriter to MCFI to be filed with the Commission on
a Current Report pursuant to Rule 13a-11 under the Exchange Act on the business
day immediately following the day on which such Collateral Term Sheet is
delivered to counsel for MCFI by the Underwriter. The parties agree that any
material described in this Section 5(e) that is delivered after 2:00 p.m., New
York City time, on a business day shall be deemed to have been delivered on the
next business day. Each such Current Report shall be incorporated by reference
in the Prospectus and the Registration Statement. Notwithstanding the
foregoing, MCFI shall have no obligation to file materials provided by the
Underwriter pursuant to or as contemplated by Section 9 that, in the reasonable
determination of MCFI after making reasonable efforts to consult with the
Underwriter, are not required to be filed pursuant to the No-Action Letters (as
defined in Section 9), or that contain erroneous information or contain any
untrue statement of a material fact, or that, 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 Underwriter 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) that may be
the annual report filed with the Commission with respect to the Trust.
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITER AND MCFI. The
obligation of the Underwriter to purchase from MCFI, and the obligation of MCFI
to sell to the Underwriter, the Registered Certificates shall be subject to the
accuracy of the representations and warranties on the part of MCFI and the
Underwriter contained herein as of the date hereof and as of the Closing Date,
to the accuracy of the statements of MCFI and the Underwriter made in any
officer's certificate delivered pursuant to the provisions hereof, to the
performance by MCFI and the 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.
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(b) MCFI shall have furnished to the Underwriter:
(i) An executed copy of the Pooling and Servicing
Agreement;
(ii) An opinion of Stephen E. Dietz, Esq., counsel to
MCFI, dated the Closing Date, substantially to the effect that:
(A) MCFI is validly existing as a corporation in
good standing under the laws of the State of Delaware, with
corporate power and authority under such laws to own its
properties and assets and conduct its business as described
in the Prospectus;
(B) The Registered Certificates have been duly
authorized 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 Underwriter 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;
(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
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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) No consent, approval, authorization or order of
any federal or State of New York court or agency or other
governmental body is required for the consummation by MCFI of
the transactions contemplated by the terms of this Agreement,
except such as may be required under the securities or "blue
sky" laws of any state in connection with the purchase and
the offer and sale of the Registered Certificates by the
Underwriter as to which such counsel need not express any
opinion, and except such as have been obtained.
(H) Neither the sale of the Registered Certificates
to the Underwriter pursuant to this Agreement nor the
consummation of any other of the transactions contemplated by
or the fulfillment by MCFI of the terms of this Agreement
will result in a breach of any term or provision of the
certificate of incorporation or by-laws of MCFI or any
federal or State of New York statute or regulation or, to the
best of such counsel's knowledge, will conflict with, result
in a breach, violation or acceleration of or constitute a
default under any agreement of MCFI or any order of any
federal or State of New York court or agency or other
governmental body having jurisdiction over MCFI.
(I) The descriptions in the Prospectus, as of the
date hereof, of the Registered Certificates and the Pooling
and Servicing Agreement are, to the extent that such
descriptions constitute statements of matters of law or legal
conclusions with respect thereto, accurate in all material
respects;
(J) 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, that were not described or filed as required; and
(K) This Agreement has been duly authorized,
executed and delivered by MCFI and Citicorp.
In giving his opinion, Stephen E. Dietz, Esq., counsel to
MCFI, 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
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CREI, SBRC, the Underwriter, 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 contained in
or omitted from the Prospectus, information relating to the
characteristics of the Mortgage Loans and the related borrowers and
mortgaged properties, information incorporated by reference into the
Prospectus, and 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, 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 "Certain 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.
Such opinion may be qualified as an opinion only on the General
Corporation Law of the State of Delaware, the laws of the State of New
York and the federal law of the United States.
(iii) One or more opinions, dated the Closing Date, of Sidley
& Austin, special counsel to MCFI, substantially to the effect that:
(A) The statements in the Prospectus under the
headings "ERISA Considerations", "Certain ERISA
Considerations", "Material Federal Income Tax Consequences"
and "Certain Federal Income Tax Consequences", to the extent
that they describe certain matters of federal law or legal
conclusions with respect thereto, while not discussing all
possible consequences of an investment in the Registered
Certificates to all investors, provide a fair and accurate
summary of such matters and conclusions set forth under such
headings; 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
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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), (2) REMIC II will
qualify as a REMIC within the meaning of the REMIC
Provisions, and the REMIC II Regular Interests will be
"regular interests" and the Class R-II Certificates will
evidence the sole class of "residual interests" in REMIC II
and (3) REMIC III 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, Class K and Class L Certificates will
evidence "regular interests" and the Class R-III Certificates
will evidence the sole class of "residual interests" in REMIC
III.
(C) Assuming compliance with the provisions of the
Pooling and Servicing Agreement, for City and State of New
York income and corporation franchise tax purposes, REMIC I,
REMIC II and REMIC III will each be classified as a REMIC and
not as a corporation, partnership or trust, in conformity
with the federal income tax treatment of REMIC I, REMIC II
and REMIC III. Accordingly, the Trust Fund will be exempt
from all City and State of New York taxation imposed on its
income, franchise or capital stock, and its assets will not
be included in the calculation of any franchise tax
liability.
(D) The Pooling and Servicing Agreement, upon the
due authorization, execution and delivery by the other
parties thereto, will constitute a valid and legally binding
agreement of MCFI and is enforceable against it 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
creditor's rights generally and by general principles of
equity, whether enforcement is sought in a proceeding in
equity or at law;
(E) The Pooling and Servicing Agreement is not
required to be qualified under the Trust Indenture Act of
1939, as amended, and the Trust Fund is not required to be
registered under the Investment Company Act;
(F) The Registration Statement, at the time it
became effective, and the Prospectus, as of the date of the
Prospectus Supplement, and each revision or amendment thereof
or supplement thereto relating to the Registered
Certificates, as of its effective or issue date (except in
each case for accounting, financial and statistical
statements included therein or omitted therefrom, as to which
such counsel expresses no opinion), appeared on their
respective faces to be appropriately responsive in all
material respects to the requirements of the Securities Act
and the rules and regulations of the Commission thereunder
applicable to such documents as of such respective dates; and
the Prospectus, as revised, amended or supplemented as of the
date hereof (except for accounting, financial and statistical
statements included therein or omitted therefrom, as to which
such counsel expresses no opinion), conforms in all material
respects to the requirements of the Securities Act
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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; and
(G) The statements set forth in the Prospectus
Supplement under the headings "Description of the Offered
Certificates" and "Servicing of the Mortgage Loans" and in
the Prospectus under the headings "Description of the
Certificates" and "Description of the Pooling Agreements",
insofar as such statements purport to summarize certain
material provisions of the Registered Certificates and the
Pooling and Servicing Agreement, provide a fair and accurate
summary of such provisions.
In giving its opinions, Sidley & Austin, special counsel to
MCFI, shall additionally state that, based on conferences and
telephone conversations with representatives of CREI, SBRC, the
Underwriter, MCFI, the Trustee, the Fiscal Agent, the REMIC
Administrator, the Master Servicer, the Special Servicer and their
respective counsel (but 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 contained in or
omitted from the Prospectus and information incorporated by reference
into the Prospectus and any information relating to the
characteristics of the Mortgage Loans and the related borrowers and
mortgaged properties, all as to which such counsel has not been
requested to comment), at the date of the Prospectus Supplement or at
the Closing Date, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
Such opinion may express its reliance as to factual matters
on the representations and warranties made by, and on certificates or
other documents furnished by officers and/or authorized
representatives of, the parties to this Agreement and the Pooling and
Servicing Agreement and on certificates furnished by public officials.
Such opinion may assume the due authorization, execution and delivery
of the instruments and documents referred to therein by the parties
thereto. 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) The 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 the Underwriter may rely on such opinion letter as if it were
addressed to the Underwriter as of the date thereof;
(v) Good standing certificates regarding MCFI, the Master
Servicer, the Special Servicer, the Trustee, the REMIC Administrator
and the Fiscal Agent from the Secretary of State (or other appropriate
authority) of the jurisdiction under which each such entity has been
formed, dated not earlier than 30 days prior to the Closing Date;
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(vi) Certificates of MCFI, the Master Servicer, the Special
Servicer, the Trustee, the REMIC Administrator, and the Fiscal Agent,
each dated the Closing Date and signed by an executive officer or
authorized signatory of such party, to the effect that the
representations and warranties of such party herein and/or in the
Pooling and Servicing Agreement, as applicable, 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) Officer's certificates, dated the Closing Date and
signed by the Secretary or an assistant secretary of MCFI, the Master
Servicer, the Special Servicer, the Trustee, the REMIC Administrator
and the Fiscal Agent, to the effect that each individual who, as an
officer or representative of such party, 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 such party) of the certificate of incorporation and
by-laws of such party, as in effect on the Closing Date, and of the
resolutions of such party and any required shareholder consent
relating to the transactions contemplated in this Agreement and the
Pooling and Servicing Agreement.
(c) The Underwriter shall have received, with respect to each of the
Mortgage Loan Sellers, the Master Servicer, the Special Servicer, the Trustee,
the REMIC Administrator and the Fiscal Agent, a favorable opinion of counsel,
dated the Closing Date, addressing the valid existence and good standing of
such party under the laws of the jurisdiction of its organization, the due
authorization, execution and delivery of the Pooling and Servicing Agreement by
such party and, subject to the same limitations as set forth in Section
6(b)(ii)(C), the enforceability of the Pooling and Servicing Agreement against
such party. Such opinion may express its reliance as to factual matters on
representations and warranties made by, and on certificates or other documents
furnished by officers and/or authorized representatives of parties to this
Agreement and the Pooling and Servicing Agreement and on certificates furnished
by public officials. Such opinion may assume the due authorization, execution
and delivery of the instruments and documents referred to therein by the
parties thereto other than the party on behalf of which such opinion is being
rendered. Such opinion may be qualified as an opinion only on the laws of the
jurisdiction in which the party on whose behalf such opinion is being rendered
is organized, the laws of the State of New York and the federal law of the
United States.
(d) MCFI and the Underwriter shall have received from Arthur Andersen,
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 Underwriter, in form and
substance reasonably satisfactory to MCFI and the Underwriter, stating in
effect that:
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(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 each Mortgage Loan Seller, 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 Underwriter shall have received from Arthur Andersen,
certified public accountants, a letter dated on or about the Closing Date, in
form and substance reasonably satisfactory to MCFI and the Underwriter, to the
effect that they have performed certain specified procedures, all of which have
been agreed to by MCFI and the Underwriter, 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) The Underwriter shall have delivered to MCFI 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 the Underwriter that are required to be filed
with the Commission pursuant to the terms of the No-Action Letters and stating
that the Underwriter has otherwise complied with the terms of the No-Action
Letters and (ii) representing that, 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 the Underwriter to actual or potential investors for
the Registered Certificates prior to the Closing Date.
(g) Arthur Andersen shall have furnished to MCFI and the Underwriter a
letter or letters, each in form and substance satisfactory to MCFI, relating to
the Computational Materials and ABS Terms Sheets of the Underwriter filed in
accordance with Section 5(e), 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 the
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 the 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 that give rise to the
use of tables in such Computational Materials and ABS Term Sheets,
such
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letter shall also set forth such other statements as are customarily
set forth by Arthur Andersen 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 each Mortgage Loan Seller, unless
otherwise indicated in such letter.
(h) The Underwriter shall have received an opinion of Andrews & Kurth
L.L.P., counsel to the Underwriter, in form and substance satisfactory to them.
(i) MCFI and the Underwriter shall have received an opinion of
counsel, dated the Closing Date, from Andrews & Kurth L.L.P., stating that,
based on conferences and telephone conversations with representatives of CREI,
SBRC, the Underwriter, MCFI, the Trustee, the REMIC Administrator, the Fiscal
Agent, the Master Servicer, the Special Servicer and their respective counsel,
and further based on a review of certain legal documents relating to each
Mortgage Loan with a Cut-off Date Balance in excess of $45,000,000, mortgage
files related to a sample of other Mortgage Loans described therein and a
compilation of the information in the loan summaries for the Mortgage Loans
(but otherwise 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), 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 contained in or omitted from the
Prospectus and information incorporated by reference into 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.
(j) 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 that the Underwriter concludes, in its opinion
after consultation with MCFI, materially impairs the investment quality of the
Registered Certificates so as to make it impractical or inadvisable to proceed
with the public offering or the delivery of the Registered Certificates as
contemplated by the Prospectus.
(k) 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 or qualified.
7. INDEMNIFICATION AND CONTRIBUTION. (a) MCFI agrees to indemnify and
hold harmless the Underwriter and each person who controls the 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
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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 the 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 the 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 SBRC
pursuant to the SBRC/MCFI 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
is made in any Computational Materials or ABS Term Sheets provided by the
Underwriter to prospective investors in connection with the sale of the
Registered Certificates and incorporated by reference into the Registration
Statement or Prospectus as a result of any filing pursuant to Section 5(e),
(iv) any omission or alleged omission to state in any Computational Materials
or ABS Term Sheets provided by the Underwriter to prospective investors in
connection with the sale of the Registered Certificates and 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 the
Underwriter and set forth in Section 6(f) and/or Section 9(b). This indemnity
agreement will be in addition to any liability that MCFI may otherwise have.
(b) The Underwriter 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 Underwriter, but only with
reference to (i) written information furnished to MCFI by or on behalf of the
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 provided by the Underwriter
to prospective investors in connection with the sale of the Registered
Certificates and 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
(as defined below), other than a Corrected Collateral Error (as defined below))
and (iii) any breach, inaccuracy or untruth of any of the statements,
representations, warranties and/or covenants set forth in Section
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6(f) and/or Section 9(b). This indemnity agreement will be in addition to any
liability that the Underwriter may otherwise have. MCFI acknowledges that the
statements set forth in the second sentence of the final paragraph on the cover
page of the Prospectus Supplement, in the second sentence under the heading
"Risk Factors -- Risks Related to the Offered Certificates -- Risks Associated
with Lack of Liquidity and Changes in Market Value", and in the first two
sentences of the third paragraph, the first sentence of the fourth paragraph
and the first sentence of the sixth paragraph under the heading "Method of
Distribution" in the Prospectus Supplement, constitute the only information
furnished in writing by or on behalf of the Underwriter for inclusion in the
Prospectus or any revision or amendment thereof or supplement thereto, and the
Underwriter confirms that such statements attributable thereto are correct.
As used herein, "Collateral Error" shall mean any error in
the information concerning the Mortgage Loans furnished by either Mortgage Loan
Seller to MCFI or the Underwriter in writing or by electronic transmission that
was used in the preparation of any Computational Materials or ABS Term Sheets;
and "Corrected Collateral Error" shall mean any Collateral Error as to which
the Underwriter, not later than the date hereof, was notified in writing or
provided in written or electronic form information superseding or correcting
such Collateral Error, including, without limitation, as part of the
Prospectus.
(c) Promptly after receipt by an indemnified party under this Section
7 of notice of the commencement of any suit, action, proceeding (including,
without limitation, any governmental or regulatory investigation), claim or
demand, 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 that it may have to any indemnified party otherwise than under
this Section 7; provided, however, that any increase in such liability as a
result of such failure to notify shall not be an expense of the indemnifying
party. In case any such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein, and to the extent that it may
elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified
party; provided that, if the defendants in any such action include both the
indemnified party and the indemnifying party, and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties that are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall
have the right to select separate counsel to assert such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election 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 for legal expenses of other
counsel or other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in connection with the
assertion of legal defenses in accordance with the proviso to the preceding
sentence (it being understood, however, that the indemnifying party shall not
be liable for the expenses of more than one separate counsel (in addition to
any local counsel), approved by the
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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). No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (A)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (B) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of
the indemnified party.
(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 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 the Underwriter may be
subject in such proportion so that the Underwriter is responsible for 0.5%
thereof and MCFI is responsible for the balance; provided, however, that if
such allocation is not permitted by applicable law, then the indemnifying party
shall contribute in such proportion as is appropriate to reflect not only the
relative benefits referred to above but also the relative fault of MCFI on the
one hand and the Underwriter on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. Notwithstanding the foregoing
provisions of this Section 7(d), the Underwriter shall not be required to
contribute any amount in excess of the amount by which the total price at which
the Registered Certificates were sold, exceeds the amount of any damages that
the Underwriter has otherwise been required to pay by reason of such untrue
statement or omission or alleged untrue statement or omission. The relative
fault of MCFI on the one hand and the Underwriter on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by MCFI or by the
Underwriter and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
Notwithstanding the foregoing, however, 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 the Underwriter within the meaning of either the Securities Act or the
Exchange Act shall have the same rights to contribution as the 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
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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).
8. FEES AND EXPENSES. (a) Except as provided in Section 8(b), costs
and expenses incurred in connection with the transactions herein contemplated
shall be borne by the Underwriter and MCFI in proportion to the aggregate
principal amount of the Mortgage Loans contributed by their respective
affiliates pursuant to the SBRC/MCFI Mortgage Loan Purchase Agreement, or the
CREI/MCFI Mortgage Loan Purchase Agreement, as applicable.
(b) If this Agreement shall be terminated by the Underwriter
because of any failure or refusal on the part of MCFI to comply with the terms
or to fulfill any of the conditions of this Agreement or if for any reason MCFI
shall be unable to perform its obligations under this Agreement or any
condition of the Underwriter's obligations cannot be fulfilled, MCFI agrees to
reimburse or cause the reimbursement of the Underwriter for all out-of-pocket
expenses (including the reasonable fees and expenses of its counsel) reasonably
incurred by the Underwriter in connection with this Agreement or the offering
contemplated hereunder.
9. COMPUTATIONAL MATERIALS AND ABS TERM SHEETS. (a) Not later than
10:30 a.m., New York City time, on the date hereof, the Underwriter shall
deliver to MCFI five (5) complete copies of all materials provided by the
Underwriter to prospective investors in the Registered Certificates that
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 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 17 hereof and one copy of
such materials to MCFI. Each delivery of ABS Term Sheets pursuant to this
paragraph (a) shall be effected by delivering such materials to counsel for
MCFI on behalf of MCFI at the address specified in Section 17 hereof in a
format that will permit such materials to be promptly filed electronically with
the Commission.
(b) The Underwriter represents and warrants to and agrees with MCFI,
as of the date hereof and as of the Closing Date, as applicable, that:
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(i) if the 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 the Underwriter delivered such materials in the
format contemplated by Section 9(a) to counsel for MCFI on behalf of
MCFI at the address specified in Section 17 hereof 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 the 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 that
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 the Underwriter to potential investors in the
Registered Certificates comply with the requirements of the No-Action
Letters;
(iii) on the respective dates any such Computational
Materials and/or ABS Term Sheets with respect to the Registered
Certificates referred to in Section 9(b)(ii) were last furnished by
the 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 Underwriter
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 Underwriter 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 Underwriter
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 the 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;
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(vi) all Collateral Term Sheets with respect to the
Registered Certificates furnished by the 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, the 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, the Underwriter makes no representation
or warranty as to whether any Computational Materials or ABS Term Sheets with
respect to the Registered Certificates included or will include any untrue
statement resulting directly from any Collateral Error (except any Corrected
Collateral Error, with respect to materials prepared after the receipt by the
Underwriter from MCFI or either Mortgage Loan Seller of notice of such
Corrected Collateral Error or materials superseding or correcting such
Corrected Collateral Error).
(c) The Underwriter acknowledges and agrees 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 agrees 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 Underwriter agrees that it
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
Underwriter 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 Underwriter 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 Underwriter, at its expense (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 Underwriter from
MCFI or either Mortgage Loan Seller of notice of such Corrected Collateral
Error or materials superseding or correcting such Corrected Collateral Error),
at the expense of MCFI), shall promptly prepare and furnish to MCFI for filing
with the Commission an amendment or supplement that will correct such statement
or omission or an amendment that 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. The Underwriter represents and warrants to MCFI, as of the date
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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 Underwriter
to MCFI pursuant to this paragraph (d)) or (ii) such filing is not required
under the Securities Act. Notwithstanding the foregoing, the Underwriter makes
no 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 Underwriter from MCFI or either
the Mortgage Loan Seller of notice of such Corrected Collateral Error or
materials superseding or correcting such Corrected Collateral Error).
(e) If, at any time when a prospectus relating to the Registered
Certificates is required to be delivered under the Securities Act prior to 90
days from the date hereof, it shall be necessary in the opinion of MCFI or its
counsel to amend or supplement the Prospectus as a result of an untrue
statement of a material fact contained in any Computational Materials or ABS
Term Sheets provided by the Underwriter 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 the Underwriter of the necessity of such amendment or
supplement, and the Underwriter, at its expense (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
Underwriter from MCFI or either the Mortgage Loan Seller of notice of such
Corrected Collateral Error or materials superseding or correcting such
Corrected Collateral Error), at the expense of MCFI), shall promptly prepare
and furnish to MCFI for filing with the Commission an amendment or supplement
that will correct such statement or omission or an amendment that 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. The 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. Notwithstanding the foregoing, the
Underwriter makes no 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
Underwriter from MCFI or either the Mortgage Loan Seller of notice of such
Corrected Collateral Error or materials superseding or correcting such
Corrected Collateral Error).
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(f) The Underwriter (at its 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 Underwriter 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 the Underwriter, 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 the Underwriter after consultation with MCFI,
impracticable to market the Registered Certificates.
11. [RESERVED]
12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other statements of
MCFI, the Underwriter 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 the
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 Sections 7 and 8(b) 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. OBLIGATIONS OF CITICORP. Citicorp agrees, in consideration of and
as an inducement to the Underwriter's purchase of Registered Certificates from
MCFI, to indemnify and hold harmless the Underwriter, and each person who
controls the Underwriter, against any failure by MCFI to perform any of its
obligations under Section 7 of this Agreement, after receipt from the
Underwriter of written notice of any such failure that has not been remedied
within 30 days.
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16. MISCELLANEOUS. This Agreement supersedes all prior or
contemporaneous agreements and understandings relating to the subject matter
hereof (other than the Term Sheet). 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, and that taken
together shall constitute one and the same instrument.
17. NOTICES. All communications hereunder will be in writing and
effective only upon receipt and, if sent to the Underwriter, will be delivered
to Salomon Smith Barney Inc., Seven World Trade Center, New York, New York
10048, Attention: Angela Hutzel; 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; and, if sent to Citicorp, will be delivered to Citicorp,
Citicorp Center, 153 East 53 Street, 6th Floor, New York, New York 10043,
Attention: Gregory C. Ehlke, Vice President; or, in each such case, to such
other address as may be forwarded by any such party to the other parties hereto
in writing.
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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, Citicorp and the Underwriter.
Very truly yours,
MORTGAGE CAPITAL FUNDING, INC.
By: /s/ Mark L. Horinbein
-------------------------------
Name: Mark L. Horinbein
Title: Authorized Signatory
CITICORP
By: /s/ Gregory C. Ehlke
-------------------------------
Name: Gregory C. Ehlke
Title: Vice President
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
SALOMON SMITH BARNEY INC.
By: /s/ Angela M. Hutzel
---------------------------
Name: Angela M. Hutzel
Title: Vice President
