KRT ORIGINATION CORP.,
Depositor
GE CAPITAL ASSET MANAGEMENT CORPORATION,
Servicer and Special Servicer
and
STATE STREET BANK AND TRUST COMPANY,
Trustee
TRUST AND SERVICING AGREEMENT
Dated as of June 18, 1996
----------------------------
KRT ORIGINATION CORP.
Commercial Mortgage Pass-Through Certificates
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . .2
Section 1.2 Calculations. . . . . . . . . . . . . . . . . . 21
Section 1.3 Interpretation. . . . . . . . . . . . . . . . . 21
ARTICLE II
DECLARATION OF TRUST FUND;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.1 Creation and Declaration of Trust Fund; Conveyance
of Mortgage
Loan; Conveyance of Other Collateral . . . . . . . . 21
Section 2.2 Acceptance by Trustee . . . . . . . . . . . . . 24
Section 2.3 Representations and Warranties of the Servicer,
the Depositor and the
Borrowers. . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE III
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOAN
Section 3.1 Servicer to Act as Servicer . . . . . . . . . . 29
Section 3.2 Sub-Servicing Agreements. . . . . . . . . . . . 30
Section 3.3 Collection of Certain Mortgage Loan Payments;
Distribution Account;
Certificate Account; Default Interest Amount . . . . 31
Section 3.4 Escrow Account; Collection of Impositions, etc. 35
Section 3.5 Maintenance of Insurance and Errors and Omissions
and Fidelity Coverage . . . . . . . . . . . . . 36
Section 3.6 "Due-on-Sale" Clauses; Releases; Assumptions. . 37
Section 3.7 Realization Upon Mortgaged Properties; Extension
of Balloon Payments
on Mortgage Loan; Modification, Amendment or Waiver of
Mortgage Loan. . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 3.8 Trustee to Cooperate; Release of Items in Mortgage
File. . . . . . . . . . . . . . . . . . . . . . 41
Section 3.9 Title and Management of Foreclosed Property . . 42
Section 3.10 Sale of Foreclosed Properties . . . . . . . . . 43
Section 3.11 Servicing Compensation. . . . . . . . . . . . . 44
Section 3.12 Reports to the Trustee; Distribution and Other
Account Statements. . . . . . . . . . . . . . . 45
Section 3.13 Annual Statement as to Compliance . . . . . . . 46
Section 3.14 Annual Independent Public Accountants' Servicing
Report. . . . . . . . . . . . . . . . . . . . . 46
Section 3.15 Access to Certain Documentation Regarding the
Mortgage Loan . . . . . . . . . . . . . . . . . 47
Section 3.16 Inspections . . . . . . . . . . . . . . . . . . 47
Section 3.17 Advances. . . . . . . . . . . . . . . . . . . . 48
Section 3.18 Reports of Foreclosures of Mortgaged Property . 49
Section 3.19 Realization on Mortgage Collateral Security . . 49
ARTICLE IV
PAYMENTS AND STATEMENTS TO THE CERTIFICATEHOLDERS
Section 4.1 Distributions . . . . . . . . . . . . . . . . . 50
Section 4.2 Statements to Certificateholders. . . . . . . . 52
Section 4.3 Rule 144A Information . . . . . . . . . . . . . 55
Section 4.4 Additional Information. . . . . . . . . . . . . 55
ARTICLE V
THE CERTIFICATES
Section 5.1 The Certificates. . . . . . . . . . . . . . . . 56
Section 5.2 Registration of Transfer and Exchange of
Certificates. . . . . . . . . . . . . . . . . . 57
Section 5.3 Mutilated, Destroyed, Lost or Stolen Certificates62
Section 5.4 Person Deemed Owners. . . . . . . . . . . . . . 63
Section 5.5 Maintenance of Office or Agency . . . . . . . . 63
Section 5.6 Appointment of Paying Agent . . . . . . . . . . 63
Section 5.7 Book-Entry Certificates . . . . . . . . . . . . 63
Section 5.8 Notices to Clearing Agency. . . . . . . . . . . 65
Section 5.9 Definitive Certificates . . . . . . . . . . . . 65
Section 5.10 Lists of Certificateholders . . . . . . . . . . 65
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.1 Respective Liabilities of the Depositor and the
Servicer. . . . . . . . . . . . . . . . . . . . 66
Section 6.2 Merger or Consolidation of the Servicer or the
Depositor . . . . . . . . . . . . . . . . . . . 66
Section 6.3 Limitation on Liability of the Depositor, the
Servicer and Others . . . . . . . . . . . . . . 66
Section 6.4 Servicer Not to Resign; Eligibility Requirement
for Servicer. . . . . . . . . . . . . . . . . . 68
Section 6.5 Rights of the Trustee and the Depositor in Respect
of the Servicer . . . . . . . . . . . . . . . . 69
ARTICLE VII
DEFAULT
Section 7.1 Events of Default . . . . . . . . . . . . . . . 70
Section 7.2 Remedies of Trustee . . . . . . . . . . . . . . 72
Section 7.3 Directions by Certificateholders and Duties of
Trustee During
Event of Default . . . . . . . . . . . . . . . . . . 72
Section 7.4 Action upon Certain Failures of the Servicer and
upon Event of Default . . . . . . . . . . . . . 73
Section 7.5 Trustee to Act; Appointment of Successor. . . . 73
Section 7.6 Notification to Certificateholders. . . . . . . 74
Section 7.7 Waiver of Past Events of Default. . . . . . . . 74
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.1 Duties of Trustee . . . . . . . . . . . . . . . 74
Section 8.2 Certain Matters Affecting the Trustee . . . . . 76
Section 8.3 Trustee Not Required to Make Investigation. . . 77
Section 8.4 Trustee Not Liable for Certificates or Mortgage
Loan. . . . . . . . . . . . . . . . . . . . . . 77
Section 8.5 Trustee May Own Certificates. . . . . . . . . . 78
Section 8.6 Trustee's Fees and Expenses . . . . . . . . . . 79
Section 8.7 Eligibility Requirements for Trustee. . . . . . 79
Section 8.8 Resignation and Removal of Trustee. . . . . . . 80
Section 8.9 Successor Trustee . . . . . . . . . . . . . . . 81
Section 8.10 Merger or Consolidation of Trustee. . . . . . . 81
Section 8.11 Appointment of Co-Trustee, Separate Trustee or
Mortgage Custodian. . . . . . . . . . . . . . . 81
Section 8.12 Authenticating Agents . . . . . . . . . . . . . 83
Section 8.13 Compliance with Withholding Requirements. . . . 84
Section 8.14 Massachusetts Filings . . . . . . . . . . . . . 84
ARTICLE IX
TERMINATION
Section 9.1 Termination . . . . . . . . . . . . . . . . . . 84
Section 9.2 Additional Termination Requirements . . . . . . 86
Section 9.3 Trusts Irrevocable. . . . . . . . . . . . . . . 87
ARTICLE X
REMIC ADMINISTRATION
Section 10.1 REMIC Administration. . . . . . . . . . . . . . 87
Section 10.2 Foreclosed Property . . . . . . . . . . . . . . 91
Section 10.3 Modifications of Mortgage Loan. . . . . . . . . 92
Section 10.4 Prohibited Transactions and Activities. . . . . 92
Section 10.5 Indemnification with Respect to Certain Taxes and
Loss of REMIC Status. . . . . . . . . . . . . . 93
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.1 Amendment . . . . . . . . . . . . . . . . . . . 94
Section 11.2 Recordation of Agreement. . . . . . . . . . . . 95
Section 11.3 Limitation on Rights of Certificateholders. . . 95
Section 11.4 Actions of Certificateholders . . . . . . . . . 96
Section 11.5 Governing Law . . . . . . . . . . . . . . . . . 97
Section 11.6 Notices . . . . . . . . . . . . . . . . . . . . 97
Section 11.7 Notices to the Rating Agency. . . . . . . . . . 97
Section 11.8 Severability. . . . . . . . . . . . . . . . . . 97
Section 11.9 Xxxxxx Act. . . . . . . . . . . . . . . . . . . 97
Section 11.9a Notice Under Escrow Agreement . . . . . . . . . 98
Section 11.10 Counterparts. . . . . . . . . . . . . . . . . . 99
EXHIBITS
Exhibit A - Form of Class A Certificate
Exhibit B - Form of Class B Certificate
Exhibit C - Form of Class C Certificate
Exhibit D - Form of Class D Certificate
Exhibit R - Form of Class R Certificate
Exhibit E - Form of Securities Legend
Exhibit F - Form of Rule 144A Transfer Certificate
Exhibit G - Form of Regulation S Certificate
Exhibit H - Form of Rule 144A Exchange Certificate
Exhibit I - Form of Transferee's Letter for
Institutional Accredited Investors
Exhibit J-1(a) - Form of R Certificateholder Affidavit (US
Holder)
Exhibit J-1(b) - Form of R Certificateholder Affidavit
(Foreign Holder)
Exhibit J-2(a) - Form of R Certificateholder Transferee's
Letter (US Holder)
Exhibit J-2(b) - Form of R Certificateholder Transferee's
Letter (Foreign Holder)
Exhibit K - Form of Trust Receipt
Exhibit L - Form of Document Request
Exhibit M - Form of Mortgage Custodian Final
Certificate
Exhibit N - Form of Mortgage Custodian Initial
Certificate
Exhibit O - Form of Information Request
Exhibit P - Form of ERISA Transfer Affidavit
Exhibit Q - Form of ERISA Legend
Exhibit R - Form of Ownership Evidence
Schedule 1 - Mortgage Loan Schedule
THIS TRUST AND SERVICING AGREEMENT (this "Agreement"), is
dated as of June 18, 1996, and is among KRT ORIGINATION CORP., a
Delaware corporation, as depositor (the "Depositor"), GE CAPITAL
ASSET MANAGEMENT CORPORATION, a Delaware corporation, as servicer
(the "Servicer"), and STATE STREET BANK AND TRUST COMPANY, a
banking corporation organized under the laws of the Commonwealth of
Massachusetts, as trustee (the "Trustee").
PRELIMINARY STATEMENT
On the Closing Date, the Depositor will convey the
Mortgage Loan and the other assets constituting the Trust Fund to
the trust created by this Agreement in exchange for the
Certificates which will evidence the entire beneficial ownership
interest in (i) a segregated pool of assets of the Trust Fund, for
which a REMIC election will be made and (ii) the right to receive
Default Interest, to the extent collected from the Borrowers, on
the Mortgage Notes. The Trustee, on behalf of the trust created by
this Agreement, will elect to treat the segregated pool of assets,
consisting of (a) the Mortgage Loan (excluding any Default
Interest), (b) the amount from time to time in the Distribution
Account and the Certificate Account, (c) any property which secures
the Mortgage Loan and which is acquired by foreclosure, deed-in-
lieu of foreclosure or otherwise and (d) certain other rights set
forth herein, as a REMIC (the "Trust REMIC") for federal income tax
purposes. The Trust REMIC will issue four classes of "regular
interests," each in the principal amount and bearing interest at
the rate, set forth below for the corresponding Class of
Certificates (but excluding any right to Default Interest). The
Class R Certificates will be designated the "residual interest" in
the Trust REMIC. Holders of each Class of Certificates (other than
the Class R Certificates) will also be entitled to receive, to the
extent collected from the Borrowers, Default Interest on the
corresponding Class of Mortgage Note. Capitalized terms not
otherwise defined in this Preliminary Statement shall have the
respective meanings set forth below.
The Class A, Class B, Class C and Class D Certificates
have been offered for sale pursuant to the Offering Memorandum,
dated June 13, 1996.
The following sets forth the Class designation, the
original Certificate Balance and the Certificate Rate for each
Class of Certificates:
Original Default
Class Certificate Certificate Interest
Designation Balance Rate Rate
Class A $123,700,000 7.76% 3.0%
Class B 20,600,000 7.98% 3.0%
Class C 28,900,000 8.28% 3.0%
Class D 8,500,000 8.92% 3.0%
Class R N/A(1) 0.00% 0.00%
---------------
(1) Other than the right to receive on each Distribution Date
interest earned on the funds on deposit in the Distribution
Account, the Class R Certificates will be entitled only to any
amounts remaining in the Trust REMIC after all distributions
have been made on the Class A, Class B, Class C and Class D
Certificates.
In consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Whenever used herein, the
following words and phrases, unless the context otherwise requires,
shall have the meanings specified in this Article:
Accepted Servicing Practices: As defined in Section 3.1.
Account: As defined in the Mortgage and the Cash
Collateral Agreement.
Accredited Investor: A Person which is an institution
and is an "accredited investor" as defined in Rule 501(a)(1), (2),
(3) or (7) of Regulation D under the Securities Act.
Acquisition Date: The date upon which, under the Code
(and in particular the REMIC Provisions and Section 856(e) of the
Code), the Trust REMIC is deemed to have acquired a Mortgaged
Property.
Advance: An Interest Advance, a Servicing Advance or a
Mortgage Recording Tax Advance. Each reference to the payment or
reimbursement of an Advance shall be deemed to include, whether or
not specifically referred to, payment or reimbursement of interest
thereon at the Advance Rate to, but not including, the date of
payment or reimbursement. Such interest thereon shall in all
events be paid first prior to repayment of the Advance.
Advance Interest Amount: Interest at the Advance Rate on
the aggregate amount of Interest Advances, Servicing Advances,
Mortgage Recording Tax Advances, Servicing Compensation, Trustee
Fees and other reimbursable amounts for which the Servicer or the
Trustee has not been timely paid or reimbursed for the number of
days from the date on which such Advance was made or Servicing
Compensation, Trustee Fees or reimbursement was due, less the
amount of interest previously paid thereon to, but not including,
the date of payment or reimbursement of the related Advance,
Servicing Compensation or other amount.
Advance Rate: For any period, a rate per annum equal to
the Prime Rate (as most recently published in The Wall Street
Journal on or before the related Record Date) plus 100 basis
points, compounded monthly.
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, relation to individuals or otherwise and
the terms "controlling" and "controlled" have meanings correlative
to the foregoing.
Aggregate Certificate Balance: The aggregate of the
Certificate Balances of the Certificates at any time of
determination.
Agreement: This Trust and Servicing Agreement and all
amendments and supplements hereto.
ALTA: American Land Title Association, or any successor
thereto.
Allocated Loan Amount: As defined in the Mortgage.
A Note: As defined in the Mortgage.
Appraiser: An Independent appraiser who is a member of
the Appraisal Institute with a national practice and which has at
least five years experience with real estate of the same property
type and in the geographic area of the property to be appraised.
Assignment of Leases: The Assignment of Leases, Rents
and Security Deposits, dated as of June 18, 1996, from the
Borrowers, as assignors, to the Depositor, as assignee, with
respect to the Mortgaged Property, including any leases, rents or
other property pledged pursuant thereto.
Authenticating Agent: Any authenticating agent appointed
pursuant to Section 8.12, which initially shall be the Trustee.
Balloon Payment: The outstanding principal amount of a
Mortgage Note as of the Scheduled Maturity Date.
Bankruptcy Code: Title 11 of the United States Code, 11
U.S.C. Section 101 et seq.
B Note: As defined in the Mortgage.
Book-Entry Certificates: Certificates evidencing a
beneficial interest in a Class of Certificates, ownership and
transfer of which shall be made through book entries by a Clearing
Agency as described in Section 5.7.
Borrowers: KRT Property Holdings, Inc., a Maryland
corporation; Hillcrest Plaza Limited Partnership, a Maryland
limited partnership; KR Suburban, L.P., a New Jersey limited
partnership; Fox Run, Limited Partnership, an Alabama limited
partnership; XX XxxXxxxxx Associates, L.P., a Pennsylvania limited
partnership; KR Best Associates, L.P., a Pennsylvania limited
partnership; KR 69th Street, L.P., a Pennsylvania limited
partnership; KR Trust One, Inc., a Maryland corporation; KR
Manchester, Inc. a Connecticut corporation; KR Street Associates,
L.P., a Pennsylvania limited partnership; KR Orange, Inc., a
Connecticut corporation; KR Collegetown, Inc., a New Jersey
corporation; KR Hillcrest Mall, Inc., a New Jersey corporation; and
XX Xxxxxxx, L.P., a Pennsylvania limited partnership.
Business Day: Any day other than (i) a Saturday or a
Sunday or (ii) a day on which commercial banks in the State of New
York, the Commonwealth of Massachusetts or the Commonwealth of
Pennsylvania are authorized or obligated by law, governmental
decree or executive order to be closed.
Capital and TI Reserve Account: As defined in the Cash
Collateral Agreement.
Cash Collateral Agreement: The Cash Collateral Account,
Security, Pledge and Assignment Agreement dated as of June 18,
1996, among the Borrowers, the Depositor and the Collateral Agent.
Certificate: Any one of the KRT Origination Corp.
Commercial Mortgage Pass-Through Certificates, Class A, Class B,
Class C, Class D or Class R, executed by the Trustee and
authenticated by the Authenticating Agent in substantially the form
set forth in Exhibit A, B, C, D or R hereto, respectively;
provided, however, that with respect to any Book-Entry Certificate,
Certificate means such Book-Entry Certificate and, when appropriate
within the context of any Section of this Agreement, any interest
in a Book-Entry Certificate in the authorized denomination as
provided herein of any Person as shown on the records of the
Clearing Agency.
Certificate Account: The separate Eligible Account
established by and maintained with the Paying Agent on behalf of
the Trustee for the benefit of the Certificateholders, pursuant to
Section 3.3(f), which account shall be entitled "Certificate
Account c/o State Street Bank and Trust Company, as trustee, in trust
for the Holders of KRT Organization Corp. Commercial Mortgage
Pass-Through Certificates." Funds in the Certificate Account shall
be held in trust for the Certificateholders for the uses and
purposes set forth in this Agreement.
Certificate Balance: As to any Class of the Certificates
and as of any date of determination, the original Certificate
Balance of such Class as set forth in the Preliminary Statement
hereof less the sum of all distributions of principal distributed
to Holders of such Class on all Distribution Dates occurring prior
to such date of determination.
Certificate Owner: With respect to a Book-Entry
Certificate, the Person who is the beneficial owner of such
Book-Entry Certificate, as may be reflected on the books of the
Clearing Agency, or on the books of a Person maintaining an account
with such Clearing Agency (directly or as an indirect participant),
in accordance with the rules of such Clearing Agency, and, with
respect to any Definitive Certificate, the Certificateholder. Each
of the Trustee and the Servicer shall have the right to require, as
a condition to acknowledging the status of any Person as a
Certificate Owner under this Agreement, that such Person provide
evidence at its expense of its qualification as a Certificate Owner
hereunder.
Certificate Rates: As to any Class of Certificates, for
each Interest Accrual Period, the rate per annum shown as the
Certificate Rate for such Class of Certificates in the Preliminary
Statement hereto.
Certificate Register and Certificate Registrar: The
register maintained pursuant to and the registrar provided for in
Section 5.2.
Certificateholder or Holder: The Person in whose name a
Certificate is registered in the Certificate Register.
Class: Certificates bearing one of the Class
designations set forth in the Preliminary Statement to this
Agreement the form of which is identical except for variations in
Percentage Interest.
Clearing Agency: An organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act. The
initial Clearing Agency shall be The Depository Trust Company.
Clearing Agency Participant: A broker, dealer, bank,
other financial institution or other Person for whom from time to
time a Clearing Agency effects book-entry transfers and pledges of
securities deposited with the Clearing Agency.
Closing Date: June 18, 1996.
C Note: As defined in the Mortgage.
Code: The Internal Revenue Code of 1986, as amended, any
successor statutes thereto, and applicable U.S. Department of
Treasury regulations issued pursuant thereto in temporary or final
form and proposed regulations thereunder, to the extent that, by
reason of their proposed effective date, such proposed regulations
would apply to the Trust Fund or the Trust REMIC.
Collateral Agent: State Street Bank and Trust Company,
a banking corporation organized under the laws of the Commonwealth
of Massachusetts, as collateral agent under the Cash Collateral
Agreement and any successor thereto.
Collection Period: With respect to a Distribution Date,
the related Interest Accrual Period.
Condemnation Proceeds: Any awards resulting from the
full or partial condemnation or any eminent domain proceeding or
any conveyance in lieu or in anticipation thereof with respect to
a Mortgaged Property by or to any governmental or
quasi-governmental authority, other than amounts to be applied to
the restoration, preservation or repair of such Mortgaged Property
or released to a Borrower or to a Tenant in accordance with the
terms of the Mortgage, provided that whenever the Trustee is
required to make an election under Section 6 of the Mortgage, the
Trustee may consult with the Servicer and may conclusively rely on
the Servicer's determination.
Corporate Trust Office: The principal office of the
Trustee in Boston, Massachusetts at which at any particular time
its corporate trust business shall be principally administered,
which office at the date of the execution of this instrument is
located at Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
Attention: Corporate Trust.
Curtailment: As to any Collection Period, an amount
equal to the aggregate of all Condemnation Proceeds, Insurance
Proceeds and Foreclosure Proceeds received in respect of the
Mortgaged Property during such Collection Period to the extent
applied or to be applied to reduce principal in accordance with the
terms of the Mortgage Loan and the Cash Collateral Agreement.
D Note: As defined in the Mortgage.
Debt Service Coverage Ratio: With respect to the
Mortgaged Properties and the Mortgage Loan for any period, the
ratio (a) of Net Operating Income for the Mortgaged Properties
during such period to (b) the amount of interest and principal
payments due and payable in accordance with the Mortgage Loan
during such period (based on a debt service constant on the
Mortgage Notes of the greater of 10.09% per annum and the actual
average debt service constant on the Mortgage Notes for a twelve-
month period during the previous four calendar quarters).
Default Interest: Interest accruing on any Mortgage Note
at a rate in excess of the usual rate of interest thereon as a
result of a Mortgage Event of Default.
Default Interest Account: The separate Eligible Account
established by and maintained with the Paying Agent on behalf of
the Trustee for the benefit of the Certificateholders, pursuant to
Section 3.3(k), which account shall be entitled "Default Interest
Account c/o State Street Bank and Trust Company, as Trustee, in trust
for the Holders of KRT Origination Corp. Commercial Mortgage Pass-
Through Certificates." Funds in the Default Interest Account shall
be held in trust for each class of Certificateholders for the uses
and purposes set forth in this Agreement and shall not be property
of, or otherwise subject to, the Trust REMIC.
Defaulted Mortgage Loan: The Mortgage Loan if it is in
default in respect of any required payment of principal or
interest.
Definitive Certificates: Certificate of any Class issued
in definitive, fully registered, certificated form without interest
coupons in minimum denominations of $250,000 and integral multiples
of $1,000 in excess of such minimum amount with respect to the
Class A, Class B, Class C and Class D Certificates and in the
denomination of 100% Percentage Interest with respect to the Class
R Certificates.
Depositor: KRT Origination Corp., a Delaware
corporation, or any successor thereto.
Depository Agreement: With respect to any Class of Book-
Entry Certificates, the agreement among the Depositor, the
Servicer, the Paying Agent, the Certificate Registrar, the
Authenticating Agent and the Clearing Agency.
Directly Operate: With respect to any Foreclosed
Property, the furnishing or rendering of services to the tenants
thereof, the management or operation of such Foreclosed Property,
the holding of such Foreclosed Property primarily for sale, the
performance of any construction work thereon, or any use of such
Foreclosed Property in a trade or business conducted by the Trust
Fund or the Trust REMIC, in each case other than through an
Independent Contractor; provided, however, that the Trust Fund or
the Trust REMIC (or the Servicer on behalf of the Trust Fund or the
Trust REMIC) shall not be considered to Directly Operate a
Foreclosed Property solely because the Trust Fund or the Trust
REMIC (or the Servicer on behalf of the Trust Fund) establishes
rental terms, chooses tenants, enters into or renews leases, deals
with taxes and insurance, or makes decisions as to repairs or
capital expenditures with respect to such Foreclosed Property or
undertakes any ministerial action incidental thereto.
Disqualified Organization: Either (i) the United States,
(ii) any state or political subdivision thereof, (iii) any foreign
government, (iv) any international organization, (v) any agency or
instrumentality of any of the foregoing, (vi) any tax-exempt
organization (other than a cooperative 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, (vii) any organization described in
Section 1381(a)(2)(C) of the Code, or (viii) any other entity
designated as a Disqualified Organization by relevant legislation
amending the REMIC Provisions and in effect at or proposed to be
effective as of the time of the determination. In addition, a
corporation will not be treated as an instrumentality of the United
States or of any state or political subdivision thereof if all of
its activities are subject to tax and a majority of its board of
directors is not selected by such governmental unit. The terms
"United States" and "international organization" shall have the
meanings set forth in Section 7701 of the Code.
Distribution Account: The separate Eligible Account
established and maintained by the Servicer at the Servicer's
expense on behalf of the Trustee for the benefit of the
Certificateholders pursuant to Section 3.3(b), entitled
"Distribution Account c/o State Street Bank and Trust Company, as
trustee, in trust for the Holders of KRT Origination Corp.
Commercial Mortgage Pass-Through Certificates." Funds in the
Distribution Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this
Agreement.
Distribution Date: The 20th day of each calendar month,
beginning in July 1996 or, if such 20th day is not a Business Day,
the next succeeding Business Day.
Due Date: With respect to each Distribution Date, the
date on which the Monthly Interest Payment is due on the Mortgage
Notes, which shall be the fourth Business Day prior to the date on
which such Distribution Date occurs.
Effective Gross Income: The rents and other income
derived from any Mortgaged Property (including base and percentage
rents, CAM reimbursements and other recoveries of expenses).
Eligible Account: An account, including an account
maintained with the Trustee or Paying Agent if otherwise meeting
this definition, that is either: (a) maintained with a depository
institution or trust company the long-term unsecured debt
obligations of which (or, in the case of a depository institution
or trust company that is the principal subsidiary of a holding
company, the long-term unsecured debt obligations of which) have
been rated by the Rating Agency in one of its two highest rating
categories or the short-term deposits or commercial paper of which
are rated by the Rating Agency in its highest rating category at
the time of any deposit therein; (b) a trust account or accounts
maintained with a federal or state chartered depository institution
or trust company with trust powers acting in its fiduciary
capacity, which in the case of any state chartered depository
institution or trust company is subject to regulations or has
established internal guidelines regarding fiduciary funds on
deposit substantially similar to 12 CFR 9.10(b); or (c) such other
account reasonably acceptable to the Servicer and the Trustee as
will not result in the withdrawal, qualification or downgrading of
the then current ratings of the Rating Agency assigned to the
Certificates. The title of each Eligible Account maintained
pursuant to this Agreement shall include "KRT Origination Corp.
Commercial Mortgage Pass-Through Certificates" and shall clearly
indicate that funds held therein are held in trust pursuant hereto.
Environmental Law: Any present or future federal, state
or local law, statute, regulation or ordinance, and any judicial or
administrative order or judgment thereunder, pertaining to health,
industrial hygiene, hazardous substances or the environment,
including, but not limited to, each of the following, as enacted as
of the date hereof or as hereafter amended: the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. Section 9601-9657 et seq; the Resource Conservation and Recovery
Act of 1976, 42 U.S.C. Section 6901-6991i et seq; the Toxic Substance
Control Act, 15 U.S.C. Section 2601-2629 et seq; the Water Pollution
Control Act (also known as the Clean Water Act), 33 U.S.C. 1251
et seq.; the Clean Air Act, 42 U.S.C. 7401 et seq.; and the
Hazardous Materials Transportation Act, 49 U.S.C. 1801 et seq.
Environmental Report: The environmental audit report or
reports with respect to each Mortgaged Property prepared and
delivered to the Depositor in connection with the Mortgage.
ERISA: The Employee Retirement Income Security Act of
1974, as amended.
ERISA Plans: As defined in Section 5.2(h).
Escrow Account: An account established and maintained by
the Servicer as provided in Section 3.4 hereof.
Escrow Agreement: The Escrow Agreement, dated as of June
18, 1996, among the Depositor, as mortgagee, the Borrowers, as
mortgagor, and Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP, as
escrow agent.
Event of Default: As defined in Section 7.1.
Exchange Act: The Securities Exchange Act of 1934, as
amended.
FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.
FHA: The Federal Housing Administration, or any
successor thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, or
any successor thereto.
Final Distribution Date: The Distribution Date on which
the final distribution in respect of the Certificates will be made
pursuant to Section 9.1.
Final Certificate Distribution Date: June 20, 2006.
FNMA: The Federal National Mortgage Association, or any
successor thereto.
Foreclosed Property: Any Mortgaged Property acquired by
the Trust Fund or the Trust REMIC by foreclosure or acceptance of
a deed in lieu of foreclosure or other legal process in connection
with a default, or with respect to which the Acquisition Date has
occurred.
Foreclosure Proceeds: Proceeds, net of any related,
reasonable out-of-pocket expenses incurred by the Servicer,
received in respect of any Foreclosed Property (including, without
limitation, proceeds from the rental of such Foreclosed Property)
prior to the final liquidation of such Foreclosed Property.
Foreign Holder Letter: As defined in Section 5.2(h).
Holder or Certificateholder: The Person in whose name a
Certificate is registered in the Certificate Register.
Impositions: As defined in the Mortgage.
Independent: When used with respect to any specified
Person means such a Person who (a) does not have any direct
financial interest or any material indirect financial interest in
the Depositor, the Borrowers, the Servicer or any Sub-Servicer or
in any of their respective Affiliates in excess of 5% of the
outstanding capital shares of or equity interest in any such
Person, and (b) is not connected with the Depositor, the Borrowers,
the Servicer or any Sub-Servicer as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing
similar functions.
Independent Contractor: Either (i) any Person (other
than the Servicer or Special Servicer) that would be an
"independent contractor" with respect to the Trust Fund or the
Trust REMIC within the meaning of Section 856(d)(3) of the Code if
the Trust Fund or the Trust REMIC were a real estate investment
trust (except that the ownership test set forth in that Section
shall be considered to be met by any Person that owns, directly or
indirectly, 35% or more of any Class of Regular Certificates, or
such other interest in any Class of Certificates as is set forth in
an Opinion of Counsel, which shall be at no expense to the Trustee
or the Trust Fund or the Trust REMIC, delivered to the Servicer,
the Special Servicer and the Trustee); provided that the Trust Fund
or the Trust REMIC does not receive or derive any income from such
Person and the relationship between such Person and the Trust Fund
or the Trust REMIC is at arm's length, all within the meaning of
Treasury Regulation Section 1.856-4(b)(5), or (ii) any other Person
(including the Servicer) if the Servicer, the Special Servicer and
the Trustee have received an Opinion of Counsel, which shall be at
no expense to the Trustee or the Trust Fund or the Trust REMIC, to
the effect that the taking of any action in respect of any
Foreclosed 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 Foreclosed
Property to cease to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code (determined without
regard to the exception applicable for purposes of Section 860D(a)
of the Code), or cause any income realized in respect of such
Foreclosed Property to fail to qualify as Rents from Real Property.
Information Request: A request delivered pursuant to
Section 4.1, substantially in the form of Exhibit O, attached
hereto, by a Beneficial Owner of a Certificate, a Certificateholder
or a prospective purchaser of a Certificate or a beneficial
interest therein.
Institutional Accredited Investor: An Accredited
Investor that is not a QIB.
Insurance Proceeds: Proceeds paid to the Trustee, the
Servicer, or the Special Servicer for the benefit of the Trust Fund
by any insurer pursuant to (a) any hazard policy or other insurance
policy covering a Mortgaged Property, other than amounts to be
applied to the restoration, preservation or repair of such
Mortgaged Property in accordance with the terms of the Mortgage and
(b) any insurance policy required to be maintained by the Servicer
or the Special Servicer pursuant to Section 3.6(c), in each case,
net of any expenses incurred by the Trustee, the Servicer or the
Special Servicer in obtaining such proceeds.
Insured Expenses: Expenses covered by any insurance
policy.
Interest Accrual Period: With respect to each
Distribution Date, the period (other than with respect to the
initial Distribution Date in July 1996) commencing on (and
including) the 20th day of the calendar month preceding the month
of such Distribution Date and ending on (but excluding) the 20th
day of the calendar month of such Distribution Date. The Interest
Accrual Period with respect to the initial Distribution Date will
commence on the Closing Date and end on (but exclude) the 20th day
of July 1996.
Interest Advance: With respect to each Distribution
Date, an amount equal to the Monthly Interest Payment due on the
Mortgage Loan (reduced by the Servicing Fee allocable to such
Monthly Interest Payment) which was delinquent as of the close of
business on the related Due Date and not collected prior to the
related Servicer Advance Date.
Interest Shortfall: On any Distribution Date for any
Class of Certificates, (i) any shortfall in the amount of interest
required to be paid at the applicable Certificate Rate in respect
of such Certificates on such Distribution Date for any reason,
including such a shortfall resulting from a failure of the Servicer
or the Trustee to make an Interest Advance with respect to the
Mortgage Notes in the event of a delinquency in all or any portion
of the Monthly Interest Payment due on the Mortgage Loan on the
immediately preceding Due Date for any reason, including a
determination that such Interest Advance, if made, would be a
Nonrecoverable Advance, plus (ii) the cumulative amount of each
such shortfall as determined on any prior Distribution Date, plus
(iii) interest on the amount of each such shortfall from the date
the amount of such shortfall was due until (but not including) the
day such shortfall was paid in full at a rate per annum equal to
the Certificate Rate applicable to such Class of Certificates,
compounded monthly, less (iv) the aggregate amount of payments of
Interest Shortfall made prior to such time of determination with
respect to such Class of Certificates.
Interested Person: As of any date of determination, the
Servicer, the Special Servicer, any Holder of a Certificate, or, in
each such case, any of their respective Affiliates.
Internal Revenue Service: The Internal Revenue Service,
or any successor thereto.
Lease: A lease between the owner of any Mortgaged
Property, as landlord, and the respective Tenant thereunder, as
tenant, relative to all or a portion of a Mortgaged Property.
Legended Definitive Certificate: A Definitive
Certificate bearing the Securities Legend which initially shall be
all Definitive Certificates.
Liquidated Mortgaged Property: Any Mortgaged Property
(including any Foreclosed Property) which has been sold or
otherwise disposed of and as to which the Servicer has determined
that all amounts which it expects to recover from or on account of
such liquidated Mortgaged Property have been recovered.
Liquidation Expenses: Reasonable out-of-pocket expenses
(other than Insured Expenses to the extent recovered from the
insurer and retained by the Servicer or the Special Servicer for
its own account) incurred by the Servicer or Special Servicer on
behalf of the Trust Fund in connection with the liquidation of the
Defaulted Mortgage Loan or any Mortgaged Property (including any
Foreclosed Property), such expenses including, without limitation,
reasonable legal fees and expenses, appraisal fees, brokerage fees,
trustee and co-trustee, if any, fees and expenses in connection
with the maintenance and preservation of such Mortgaged Property or
the Mortgage Loan, any unreimbursed amount expended by the Servicer
or Special Servicer pursuant to Section 3.5(a) or 3.9 (to the
extent such amount is reimbursable under such Sections) and any
unreimbursed expenditures for real property taxes, insurance
premiums or for property restoration or preservation relating to
such Mortgaged Property. Liquidation Expenses shall not include
any expenses which have been previously reimbursed to the Servicer
or Special Servicer or which were netted against income from any
Foreclosed Property and were considered in the calculation of the
amount of Foreclosure Proceeds pursuant to the definition thereof.
Liquidation Proceeds: Cash received by the Trust Fund
(or the Servicer or Special Servicer on its behalf) (i) in
connection with the liquidation of any Mortgaged Property
(including any Foreclosed Property), whether through judicial
foreclosure, sale or otherwise, other than amounts required to be
paid to the Borrower that owned such Mortgaged Property pursuant to
law or the terms of the Mortgage, and (ii) in connection with the
sale of the Defaulted Mortgage Loan.
Loan Documents: The Mortgage Notes, the Mortgage, the
Assignment of Leases, the Cash Collateral Agreement, and all other
agreements, instruments, certificates and documents delivered by or
on behalf of the Borrowers or their Affiliates to evidence or
secure the Mortgage Loan or otherwise in satisfaction of the
requirements of the Mortgage or the other documents listed above.
Monetary Default: Any Mortgage Event of Default caused
by a failure of the Borrowers to make any payment under the
Mortgage Loan when due which has not been cured within the relevant
grace period.
Monthly Interest Payment: Each payment of interest due
on the Mortgage Loan on each Due Date in accordance with the terms
of the related Mortgage Note but not including any Default
Interest.
Mortgage: The Indenture of Mortgage, Deed of Trust,
Security Agreement, Financing Statement, Fixture Filing and
Assignment of Leases, Rents and Security Deposits dated as of June
18, 1996 from the Borrowers as grantor, to Xxxxxx X. Fish, Esq. and
Xxxxxx X. Xxxxxx, Esq., as trustee for the benefit of the
Depositor, as beneficiary, with respect to all of the Mortgaged
Properties.
Mortgagee: As of any date, the holder of the Mortgage
Notes as of such date.
Mortgage Collateral Assignment: Each instrument or
instruments either assigning or otherwise transferring the
Depositor's right, title and interest in and to the Mortgage and/or
any Mortgage Collateral Security to the Trustee.
Mortgage Collateral Security: Any right, interest,
document, instrument or property given as security for or in
guaranty of the Mortgage Notes (including, without limitation, the
Mortgage, the Assignment of Leases, the Cash Collateral Agreement,
all accounts maintained under the Cash Collateral Account and the
cash and investments credited thereto and the rights of the
Originator under the Required Insurance Policies and Title
Insurance Policies), together with any supplement or amendment
thereto and as amended from time to time hereafter.
Mortgage Custodian: A Person appointed by the Trustee at
any time as its agent as mortgage custodian pursuant to Section
8.11(h) hereof which is unaffiliated with the Depositor, which
initially shall be the Trustee.
Mortgage Custodian Final Certificate: The Certificate of
the Mortgage Custodian in the form of Exhibit M hereto.
Mortgage Custodian Initial Certificate: The Certificate
of the Mortgage Custodian in the form of Exhibit N hereto.
Mortgage Event of Default: An "Event of Default" as
defined in the Mortgage.
Mortgage File: The mortgage documents listed in Section
2.1 pertaining to the Mortgage Loan and any additional documents
required to be added to such Mortgage File pursuant to this
Agreement. When used with respect to receipt and retention by the
Mortgage Custodian or the Trustee, the term Mortgage File shall
mean only those documents actually delivered to the Mortgage
Custodian, or the Trustee.
Mortgage Loan: The loan made by the Depositor to the
Borrowers secured by the Mortgage and evidenced by the A Note, the
B Note, the C Note and the D Note.
Mortgage Loan Principal Balance: At any time of
determination, the original aggregate principal balance of the
Mortgage Notes on the Closing Date (being $181,700,000), as
thereafter adjusted in accordance with the provisions hereof and of
the Mortgage Notes and the Mortgage, less any payments of principal
thereon. Notwithstanding the acquisition of any Mortgaged Property
as Foreclosed Property and the cancellation in whole or in part of
the Mortgage Loan, the Mortgage Loan shall be deemed to remain
outstanding for purposes of all calculations hereunder regarding
payments deemed to be due on the Mortgage Loan until such time as
the Foreclosed Property is sold and shall be reduced at such time
only by the portion of Net Liquidation Proceeds applied as a
recovery of principal on the Mortgage Loan.
Mortgage Notes or Notes: The A Note, the B Note, the C
Note and the D Note executed by the Borrowers in the original
principal amounts of $123,700,000, $20,600,000, $28,900,000 and
$8,500,000, respectively
Mortgage Rate: As to any Mortgage Note during any
Interest Accrual Period, the per annum rate at which interest
accrues on such Mortgage Note in accordance with the terms thereof,
as listed on Schedule 1, but not including any Default Interest.
Mortgage Recording Tax Advance: Any Advance made by the
Servicer for Mortgage Recording Taxes pursuant to Section 3.17(g).
Mortgage Recording Taxes: The mortgage recording taxes
required to be paid by the Borrowers pursuant to the terms of the
Escrow Agreement.
Mortgaged Property: Each of the individual Properties
(as defined in the Mortgage) encumbered by the Mortgage as security
for the Mortgage Notes.
Net Liquidation Proceeds: The amount derived by
subtracting from the Liquidation Proceeds of any Liquidated
Mortgaged Property the related Liquidation Expenses.
Net Operating Income: With respect to the Mortgaged
Property for any period, all Operating Income for such period less
all Operating Expenses for such period. The Depositor agrees that
the Net Operating Income for all the Mortgaged Properties for
calendar year 1995 was $30,052,840.
New Lease: Any lease of Foreclosed Property entered into
by the Trustee (or the Servicer or Special Servicer on its behalf)
on behalf of the Trust Fund, including any lease renewed, modified
or extended by the Servicer on behalf of the Trust Fund if the
Trust Fund has the right to renegotiate the terms of such lease.
Nondisqualification Opinion: An opinion of outside
counsel reasonably satisfactory to the Trustee or the Servicer,
which counsel shall be knowledgeable of the issues occurring in the
practice of securitization, that a contemplated action will neither
cause the Trust REMIC to fail to qualify as a REMIC at any time
that any Regular Interests are outstanding nor cause a "prohibited
transaction" or "prohibited contribution" tax to be imposed on the
Trust REMIC.
Nonrecoverable Advance: Any portion of an Advance
previously made or proposed to be made which has not been
previously reimbursed to the Servicer or the Trustee and which,
based on a good faith determination of the Servicer or the Trustee,
as the case may be, taking into account amounts that may be
collected or realized on a Mortgaged Property prior to final
liquidation, including Foreclosure Proceeds and Net Liquidation
Proceeds, will not or, in the case of a proposed advance, would not
be ultimately recoverable from amounts to be deposited into the
Distribution Account. The determination by the Servicer or the
Trustee, as the case may be, that it has made a Nonrecoverable
Advance or that any proposed advance, if made, would constitute a
Nonrecoverable Advance, shall be evidenced by a certificate of a
Servicing Officer or Responsible Officer of the Trustee, delivered,
with respect to an Interest Advance, on the Servicer Advance Date
and, with respect to any other Advance, on the date such other
Advance would otherwise be made, to the Trustee (in the case of an
Advance by the Servicer) (and upon which the Trustee may
conclusively rely) and to the Depositor (in every case) detailing
the reasons for such determination, with copies of appraisals for
each Mortgaged Property performed within the last 12 months
prepared in accordance with MAI standards (which may be prepared by
the Servicer) and any engineers' reports, environmental surveys or
other information, selected by the Person making the
nonrecoverability determination in its good faith business
judgment, relevant thereto which were utilized by the Servicer or
the Trustee, as the case may be, in making its determination.
Offering Memorandum: The Offering Memorandum, dated June
13, 1996, relating to the Class A, Class B, Class C and Class D
Certificates, as amended and supplemented.
Officer's Certificate: With respect to the Depositor, a
certificate signed by any of the Chairman of the Board, the Vice
Chairman of the Board, the President, a Vice President, the
Treasurer, the Secretary, the Assistant Treasurer or an Assistant
Secretary of the Depositor and delivered to the Trustee. With
respect to the Servicer, a certificate signed by a Servicing
Officer and delivered to the Trustee.
Operating Expenses: As defined in the Mortgage.
Operating Income: As defined in the Mortgage.
Opinion of Counsel: A written opinion of counsel
reasonably acceptable to the Trustee and to any other party hereto
to whom such opinion is to be delivered pursuant to the applicable
terms of this Agreement, who may be counsel for the Servicer, the
Depositor, the Borrowers, the Mortgage Custodian or the Depositor,
as the case may be, except that any opinion of counsel relating to
the qualification of the Trust REMIC as a REMIC or compliance with
the REMIC Provisions must be an opinion of outside counsel
knowledgeable of the issues occurring in the practice of
securitization.
Ownership Evidence: A certificate (upon which the
Trustee may conclusively rely) in the form attached hereto as
Exhibit R.
Paying Agent: The paying agent appointed pursuant to
Section 5.6(a), which initially shall be the Trustee. If no such
paying agent has been appointed or if such paying agent has been so
appointed but the Trustee shall have terminated such appointment,
then the Trustee shall be the Paying Agent.
Percentage Interest: As to any Class A, Class B, Class
C or Class D Certificate, the percentage interest evidenced thereby
in distributions required to be made with respect to the related
Class. With respect to any Class A, Class B, Class C or Class D
Certificate, the percentage interest is derived by dividing the
denomination of such Certificate by the aggregate denominations of
all Certificates of the same Class as such Certificate.
Permitted Encumbrances: As defined in the Mortgage.
Permitted Investments: At any time, any one or more of
the following obligations and securities, including those issued by
the Servicer or the Trustee as long as the rating level described
in the applicable sub-paragraph, if any, is complied with:
(a) direct debt obligations of, and debt obligations
fully guaranteed as to timely payment of principal and interest by,
the United States, FNMA, FHLMC, or any agency or instrumentality
thereof, provided such obligations are backed by the full faith and
credit of the United States;
(b) general obligations of or debt obligations
guaranteed by any state of the United States, or the District of
Columbia, in each case receiving the highest long-term debt rating
of the Rating Agency, or such lower rating as will not result in
the downgrading or withdrawal of the ratings then assigned to the
Class A, Class B, Class C or Class D Certificates by the Rating
Agency as evidenced by a letter confirming such result by the
Rating Agency;
(c) commercial or finance company paper or demand notes
that constitute vehicles for commercial paper which are then rated
in the highest unsecured commercial or finance company paper rating
category of the Rating Agency (whether or not published by the
Rating Agency) or if such commercial or finance company paper is
not then rated by the Rating Agency, which is then rated in the
highest unsecured commercial or finance company paper rating
category by at least two other nationally recognized rating
agencies, or such lower category as will not result in the
downgrading or withdrawal of the ratings then assigned to the Class
A, Class B, Class C or Class D Certificates by the Rating Agency as
evidenced by a letter confirming such result by the Rating Agency;
(d) certificates of deposit, demand or time deposits,
federal funds or bankers' acceptances issued by any depository
institution or trust company incorporated under the laws of the
United States or of any state thereof and subject to supervision
and examination by federal or state banking authorities, provided
that the short-term unsecured debt obligations of such depository
institution or trust company (or in the case of the principal
depository institution or trust company in a holding company
system, the short-term unsecured debt obligations of such holding
company) are rated F-1+ by the Rating Agency (whether or not
published by the Rating Agency) or, if not then rated by the Rating
Agency, are rated in the highest short-term rating category by at
least two other nationally recognized rating agencies, or such
lower or other rating category as will not result in the
downgrading or withdrawal of the ratings then assigned to the Class
A, Class B, Class C or Class D Certificates by the Rating Agency as
evidenced by a letter confirming such result by the Rating Agency;
(e) guaranteed reinvestment agreements issued by any
bank, insurance company or other corporation and providing for a
return in the nature of interest; provided that the short-term
unsecured debt obligations of such corporation (or in the case of
the principal depository institution or trust company in a holding
company system, the short-term unsecured debt obligations of such
holding company) are rated F-1+ by the Rating Agency (whether or
not published by the Rating Agency) or, if not then rated by the
Rating Agency, are rated in the highest short-term rating category
by at least two other nationally recognized rating agencies, or
such lower or other rating category as will not result in the
downgrading or withdrawal of the ratings then assigned to the Class
A, Class B, Class C or Class D Certificates by the Rating Agency as
evidenced by a letter confirming such result by the Rating Agency;
(f) repurchase obligations with respect to any security
described in clauses (a) and (b) of this definition and providing
for a return in the nature of interest, in each case entered into
with a depository institution or trust company (acting as
principal) described in clause (d) above or, on an overnight basis,
with the Trustee;
(g) securities (other than stripped bonds or stripped
coupons) bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States or any
state thereof, which are rated AA by the Rating Agency (whether or
not published by the Rating Agency) or, if not then rated by the
Rating Agency, are rated in the highest long-term rating category
by at least two other nationally recognized rating agencies, or in
such lower rating category as will not result in the downgrading or
withdrawal of the ratings then assigned to the Class A, Class B,
Class C or Class D Certificates by the Rating Agency as evidenced
by a letter confirming such result by the Rating Agency;
(h) such other investments bearing interest or sold at
a discount, or earning a return "in the nature of interest" within
the meaning of Treasury Regulations 1.860G-2(g) (1), (as
evidenced by an Opinion of Counsel delivered to the Trustee by the
Servicer at its own expense), as are acceptable to the Rating
Agency, and otherwise treated as a "permitted investment" under
Section 860(G)(a)(5) of the Code, as will not result in the
downgrading or withdrawal of the ratings then assigned to the Class
A, Class B, Class C or Class D Certificates by the Rating Agency as
evidenced by a letter confirming such result by the Rating Agency;
and
(i) money market funds investing in such obligations and
securities set forth in clause (a) above, which funds maintain a
constant net asset value and which are rated AAA by the Rating
Agency (whether or not published by the Rating Agency) or, if not
then rated by the Rating Agency, are rated in the highest long-term
rating category by at least two other nationally recognized rating
agencies, or in such lower rating category as will not result in
the downgrading or withdrawal of the ratings then assigned to the
Class A, Class B, Class C or Class D Certificates by the Rating
Agency as evidenced by a letter confirming such result by the
Rating Agency.
Unless otherwise specified herein, (i) any such Permitted
Investment must be available for withdrawal without penalty and
must mature no later than the Business Day immediately preceding
the next Distribution Date, (ii) no such instrument set forth above
shall constitute a Permitted Investment if such instrument
evidences either (a) a right to receive only interest payments with
respect to the obligations underlying such instrument, or (b) a
right to receive both principal and interest payments derived from
obligations underlying such instrument and the principal and
interest payments with respect to such instrument provide for a
yield to maturity of greater than 120% of the yield to maturity at
par of such underlying obligations; provided that if any such
instrument or security is redeemable by the issuer thereof, it
shall not be redeemable at less than par and if redeemable by any
party, such redemption must be without penalty or discount; and
(iii) no Permitted Investment shall be purchased at a price in
excess of the face amount thereof.
Person: Any individual, corporation, partnership, joint
venture, bank, joint-stock company, limited liability company,
trust, unincorporated organization or a government or any agency or
political subdivision thereof.
Placement Agent: Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated.
Principal Prepayment: Any payment of principal by the
Borrowers or other recovery of principal on the Mortgage Loan which
is received or recovered in advance of the Scheduled Maturity Date
and is applied to reduce the Mortgage Loan Principal Balance in
advance of the Scheduled Maturity Date, excluding Net Liquidation
Proceeds and Curtailments.
QIB: A "qualified institutional buyer" as defined in
Rule 144A.
Rating Agency: Fitch Investors Service, L.P., or any
successor thereto.
Record Date: As to each Distribution Date, the last day
of the related Interest Accrual Period.
Regular Certificate: A Certificate other than a Class R
Certificate.
Regular Interest: An interest in the Trust REMIC
entitling the holder thereof to a specified amount of principal and
interest at a fixed rate thereon, as further described in Article
X hereof.
Regular Servicing Period: Any Interest Accrual Period
other than a Special Servicing Period.
Regulation D: Regulation D under the Securities Act.
Regulation S: Regulation S under the Securities Act.
Regulation S Certificate: A certificate substantially in
the form of Exhibit G hereto.
Release Prepayments: As to any Mortgage Note, any
Principal Prepayments made by the Borrowers pursuant to paragraphs
5 or 6 of such Mortgage Note.
REMIC: A "real estate mortgage investment conduit"
within the meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax
law relating to real estate mortgage investment conduits, which
appear at Section 860A through 860G of Subchapter M of Chapter 1 of
the Code, and related provisions, and regulations and rulings
promulgated thereunder, as the foregoing may be in effect from time
to time and including any proposed legislation or regulation which,
as proposed, would have an effective date prior to enactment
thereof, to the extent not contradictory to existing legislation
and regulations.
Rents from Real Property: As to any Foreclosed Property,
gross income of the character described in Section 856(d) of the
Code.
REO Disposition Fee: An amount equal to 0.25% of (a) the
Liquidation Proceeds of any Foreclosed Property or (b) the proceeds
of any sale of the Mortgage Loan after a Mortgage Event of Default
and acceleration of the Mortgage Notes.
Required Insurance Policy: Any insurance policy which is
required to be maintained from time to time under the Mortgage in
respect of any of the Mortgaged Properties.
Residual Certificate: Any Class R Certificate.
Responsible Officer: When used with respect to (i) the
initial Trustee, any officer of the Trustee assigned to the
Trustee's Corporate Trust Department, (ii) any successor trustee,
the Depositor, the Servicer or the Mortgage Custodian, any officer
of such Person assigned by it to its corporate trust department or
similar group administering its responsibilities with respect to
this Agreement or, with respect to any particular matter, any such
person or any other officer of the Depositor, the Servicer, the
Trustee or the Mortgage Custodian assigned by it to administer such
matter.
Rule 144A: Rule 144A under the Securities Act.
Rule 144A Certificate: A certificate substantially in
the form of Exhibit F hereto.
Rule 144A Information: The Offering Memorandum; copies
of the statements and reports distributed to Certificateholders in
respect of the next preceding Distribution Date pursuant to Section
4.2(a) and (c) hereof; and such other documents as the Borrowers
may, at the time of the Trustee's or the Servicer's receipt of a
request for information pursuant to Section 4.3, have most recently
furnished to the Trustee and the Servicer under a statement that
such documents are furnished for the purpose of responding to
requests for Rule 144A Information.
Scheduled Maturity Date: June 20, 2003 (or, if such date
is not a Business Day, the next succeeding Business Day).
Securities Act: The Securities Act of 1933, as amended,
and the rules, regulations and published interpretations of the
Securities and Exchange Commission promulgated thereunder from time
to time.
Securities Legend: The legend set forth in Exhibit E
hereto.
Servicer: GE Capital Asset Management Corporation, a
Delaware corporation, or its successor in interest, or any
successor Servicer appointed as herein provided. Servicer also
includes the Special Servicer except to the extent the context
otherwise requires.
Servicer Advance Date: With respect to each Distribution
Date, the Business Day immediately preceding such Distribution
Date.
Servicer Remittance Report: A report prepared by the
Servicer and the Special Servicer in such media as may be agreed
upon by the Servicer, the Special Servicer and the Trustee
containing such information regarding the Mortgage Loan as will
permit the Trustee to calculate the amounts to be distributed
pursuant to Section 4.1 and to furnish statements to
Certificateholders pursuant to Section 4.2(i)-(xi) and containing
such additional information as the Servicer and the Trustee may
from time to time agree.
Servicing Advance: An advance or other reimbursable
expense required or permitted to be made by the Servicer pursuant
to the terms of this Agreement that is identified herein as a
"Servicing Advance," including, without limitation, amounts
identified as Servicing Advances pursuant to Sections 2.3(b),
2.3(c), 3.4(b), 3.5(a), 3.7(b), 3.7(f), 3.7(g), 3.9(a), 3.9(b),
3.9(c), 3.10(d), 3.17(c) and 3.19 hereof. Servicing Advances shall
include Liquidation Expenses to the extent such expenditures were
advanced by the Servicer; provided, however, that the fact that an
expenditure may fall within the definition of both "Servicing
Advance" and "Liquidation Expense" shall not entitle the Servicer
to recover any such amount more than once.
Servicing Compensation: The Servicing Fee payable to the
Servicer hereunder and the Special Servicing Fee and the REO
Disposition Fee payable to the Special Servicer hereunder.
Servicing Fee: As to any Distribution Date, the product
of one-twelfth of the Servicing Fee Rate multiplied by the Mortgage
Loan Principal Balance as of the beginning of the related
Collection Period.
Servicing Fee Rate: 0.02% per annum.
Servicing Officer: Any individual involved in, or
responsible for, the administration and servicing of the Mortgage
Loan whose name and signature appear on a list of servicing
officers furnished to the Trustee signed by an officer of the
Servicer, as such list may from time to time be amended.
Single Certificate: As to any Class of Regular
Certificates, a Certificate of such Class that evidences a
denomination of $1,000. As to the Class R Certificates, a
Certificate evidencing the entire residual interest in the Trust
REMIC.
Sinking Fund Account: As defined in the Cash Collateral
Agreement.
Special Servicer: GE Capital Asset Management
Corporation, a Delaware corporations or its successor in interest,
or any successor Special Servicer appointed as herein provided.
Special Servicing Fee: As to any Interest Accrual Period
that is a Special Servicing Period, the product of one-twelfth of
the Special Servicing Fee Rate multiplied by the Mortgage Loan
Principal Balance as of the beginning of the related Collection
Period.
Special Servicing Fee Rate: A rate equal to 0.25% per
annum.
Special Servicing Period: Any Interest Accrual Period
during which any of the following have occurred:
(i) the Servicer has made an Advance which is not
reimbursed within 15 Business Days;
(ii) the Servicer makes two consecutive Interest
Advances whether or not reimbursed;
(iii) the Servicer has determined in good faith, as
evidenced by an Officer's Certificate delivered to the
Trustee, that a Monetary Default is reasonably foreseeable
within 45 days of the date of such certificate and is not
reasonably likely to be cured within 60 days thereafter
without the performance of extraordinary services by the
Servicer, acting as Special Servicer;
(iv) the Servicer has received notice that a Borrower
has become the subject of any bankruptcy, insolvency or
similar proceeding, admitted in writing its inability to pay
its debts as they come due or made an assignment for the
benefit of creditors;
(v) the Servicer has received notice of a
foreclosure or threatened foreclosure of any lien on a
Mortgaged Property;
(vi) a default under the Mortgage of which the
Servicer has notice (other than a failure by the Borrowers to
pay interest or principal) and which materially and adversely
affects the interests of the Certificateholders has occurred
and remains unremedied for the applicable grace period
specified in the Mortgage Loan (or, if no grace period is
specified, 30 days); provided a default requiring a Servicing
Advance will be deemed to materially and adversely affect the
interest of the Certificateholders; or
(vii) the Servicer proposes to commence foreclosure
or other Workout arrangements with respect to any Mortgaged
Property in connection with a Mortgage Event of Default.
A Special Servicing Period will end:
(a) with respect to the circumstances described in
clause (i) above, when the Borrowers have brought the Mortgage
Loan current (including reimbursement of all costs of the
Trust Fund incurred as a result of such Mortgage Event of
Default, including any expenses of the Servicer or the Special
Servicer directly reimbursable by the Borrowers pursuant to
the terms of the Mortgage) and thereafter have made two
consecutive full and timely Monthly Interest Payments;
(b) with respect to the circumstances described in
clause (ii) above, when all Interest Advances by the Servicer
have been reimbursed and no Interest Advances have been made
for two consecutive months;
(c) with respect to the circumstances described in
clauses (iii) and (iv) above, when such circumstances cease to
exist; and
(d) with respect to the circumstances described in
clause (vi) above, when such default is cured;
provided, however, that at that time no circumstance identified in
clauses (i) through (vi) above exists that would cause the Mortgage
Loan to continue to be characterized as in a Special Servicing
Period.
Sub-Servicer: Any Person with which the Servicer has
entered into a Sub-Servicing Agreement and which satisfies the
requirements set forth therein and herein.
Sub-Servicing Agreement: The written contract between
the Servicer and any Sub-Servicer relating to servicing and/or the
administration of the Mortgage Loan as provided in Section 3.2, in
such form as is approved by the Servicer, provided that the
sub-servicing of the Mortgage Loan pursuant to the terms of such
Sub-Servicing Agreement will not result in the downgrading or
withdrawal of the ratings then assigned to the Class A, Class B,
Class C or Class D Certificates by the Rating Agency as confirmed
in writing by the Rating Agency.
Tax Matters Person: The Person designated as the "tax
matters person" of the Trust REMIC pursuant to Treasury Regulations
Section 1.860F-4(d).
Tenant: The tenant under a Lease relating to a Mortgaged
Property.
Title Insurance Policies: As to each Mortgaged Property,
the ALTA form mortgagee title insurance policy or policies issued
with respect to such Mortgaged Property and insuring the first
priority deed of trust lien in favor of the Depositor pursuant to
the Mortgage, subject only to encumbrances permitted pursuant to
the Mortgage and containing such endorsements and affirmative
assurances as the Depositor shall require.
Trust Fund: The corpus of the trust created by this
Agreement, consisting of the Mortgage Loan, the Mortgage, the
Mortgage Notes, the other Loan Documents including, without
limitation, all payments on or collections in respect of the
Mortgage Loan due on or after the Closing Date, all Net Liquidation
Proceeds and Curtailments received after the Closing Date, the
Distribution Accounts, the Certificate Account, the Default
Interest Account, such amounts, including investments thereof, as
shall from time to time be held in the Distribution Account, the
Certificate Account and the Default Interest Account, all insurance
policies, if any, relating to the Mortgaged Property, all
Foreclosed Property, all rights under the Mortgage Collateral
Assignments and all proceeds of all of the foregoing.
Trustee: State Street Bank and Trust Company, a banking
corporation organized under the laws of the Commonwealth of
Massachusetts, or its successor in interest, or if any successor
trustee is appointed as herein provided, such successor trustee.
Trustee Fee: As to any Distribution Date, the product of
one-twelfth of the Trustee Fee Rate multiplied by the Mortgage Loan
Principal Balance as of the beginning of the related Collection
Period.
Trustee Fee Rate: A rate equal to 0.02% per annum.
Trust REMIC: The segregated pool of assets consisting of
(A) the Mortgage Loan (other than the right to receive Default
Interest), (B) such amounts as shall from time to time be held in
the Distribution Account and the Certificate Account, (C) any
property which secures the Mortgage Loan and which is acquired by
foreclosure, deed-in-lieu of foreclosure or otherwise and (D)
certain other rights set forth herein, for which a REMIC election
has been made pursuant to Section 10.1 hereof.
Uninsured Cause: Any cause of damage to Property (as
defined in the Mortgage) such that the complete restoration of such
Property is not fully reimbursable (but without regard to any
applicable deductible provisions) by any insurance policy required
under the Mortgage to be maintained with respect thereto.
Unlegended Definitive Certificate: A Definitive
Certificate which does not bear the Securities Legend and which can
only be issued if the Depositor determines under applicable law
that the placement of the Securities Legend on such Definitive
Certificate is no longer required.
Unscheduled Payments: All principal payments on the
Mortgage Loan other than the Balloon Payments and Voluntary
Prepayments.
Voluntary Prepayments: As to any Mortgage Note, any
Principal Prepayments made by the Borrowers pursuant to paragraph
5 of such Mortgage Note.
Workout: Any modification of the Mortgage Loan or the
Mortgage Notes entered into between the Servicer and the Borrowers
in accordance with Section 3.8 hereof.
Section 1.2 Calculations. All calculations of interest
hereunder which are made in respect of the Regular Interests and
the Certificates shall be made monthly and calculated on the basis
of a 360-day year consisting of twelve 30-day months and shall be
carried out to seven decimal places, rounded up. All dollar
amounts calculated hereunder shall be rounded to the nearest xxxxx.
Section 1.3 Interpretation. (a) Whenever the Agreement
refers to a Distribution Date and a "related" Collection Period,
Interest Accrual Period or Due Date, such reference shall be to the
Collection Period, Interest Accrual Period or Due Date, as
applicable, immediately preceding such Distribution Date.
(b) As used herein and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting
terms not defined in Section 1.1 shall have the respective meanings
given to them under generally accepted accounting principles or
regulatory accounting principles, as applicable.
(c) The words "hereof," "herein," and "hereunder" and
words of similar import when used in this Agreement shall refer to
this Agreement as a whole and not to any particular provision of
this Agreement, and Article, Section, Schedule and Exhibit
references contained in this Agreement are references to Articles,
Sections, Schedules and Exhibits in or to this Agreement unless
otherwise specified. Definitions in Section 1.1 shall include both
the singular and the plural.
ARTICLE II
DECLARATION OF TRUST FUND;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.1 Creation and Declaration of Trust Fund;
Conveyance of Mortgage Loan; Conveyance of Other Collateral. The
Depositor, concurrently with the execution and delivery of this
Agreement, in exchange for the Certificates, does hereby
irrevocably sell, transfer, assign, set over and otherwise convey
to the Trustee, without recourse, all of the right, title and
interest of the Depositor, whether now owned or hereafter acquired
and wherever located, in and to the documents and interests
described in the following paragraph, to have and to hold, in
trust, and the Trustee declares that it accepts the trust created
hereby and acknowledges that it or the Mortgage Custodian on its
behalf has received, subject to the review provided for in Section
2.2, and shall hold such documents and instruments together with
any other property comprising the Trust Fund delivered to it
hereunder as Trustee, in trust, for the benefit and use of the
Holders of the Certificates which represent the entire beneficial
interest in the Trust Fund, and for the purposes and subject to the
terms and conditions set forth in this Agreement. Concurrently
with such receipt, the Authenticating Agent has caused to be
authenticated and delivered to or upon the order of the Depositor,
Certificates in the authorized denominations evidencing the entire
ownership in the Trust REMIC.
In connection with such sale, transfer and assignment,
the Depositor does hereby deliver to, and deposit with, the
Mortgage Custodian on behalf of the Trustee (with a copy to the
Servicer) the documents or instruments listed in clauses (a)
through (m) below (except that the documents listed in clauses (f),
(g), (h), (i) and (j) shall be delivered only to the Servicer):
(a) the original Mortgage Notes, endorsed by the
Depositor without recourse to the order of the Trustee in
substantially the following form: "Pay to the order of State Street
Bank and Trust Company, as the Trustee for the benefit of the
Holders of KRT Origination Corp. Commercial Mortgage Pass-Through
Certificates, and its successors and assigns, without recourse" and
signed in the name of the Depositor by an authorized officer;
(b) each counterpart of the original Mortgage, with
evidence of the delivery thereof for recording;
(c) each Mortgage Collateral Assignment, duly signed
and, in the case of assignments of the Mortgage and the Assignment
of Leases, in form suitable for recording in the applicable
jurisdictions, with evidence of the delivery thereof for recording;
(d) all Required Insurance Policies together with proof
of payment of premiums relating thereto (which may be in the form
of copies of such policies or certificates of insurance showing
such policies to be in effect on the Closing Date);
(e) the original Title Insurance Policies, or in the
event such original Title Insurance Policies are certified by the
Depositor as unavailable, copies of the marked-up original title
reports and the Depositor's recording instructions, with the
originals to be delivered by the Depositor as soon as available but
in no event later than 90 days after the Closing Date;
(f) a copy of the original surveys referred to in the
above referenced Title Insurance Policies made in connection with
the origination of the Mortgage Loan;
(g) a copy of the original engineer's report with
respect to the improvements on each Mortgaged Property obtained in
connection with the origination of the Mortgage Loan;
(h) copies of the original Environmental Reports of
each Mortgaged Property made in connection with the origination of
the Mortgage Loan;
(i) a copy of each of the management agreements between
Kranzco Realty Trust, as manager, and the Borrowers, as owners,
with respect to the Mortgaged Properties and the Manager's Consent
and Subordination of Management Agreement;
(j) a copy of each Ground Lease (as defined in the
Mortgage);
(k) an original of the Cash Collateral Agreement and
assignments thereof from the Depositor to the Trustee or the
Mortgage Custodian;
(l) an original of the Assignment of Leases, in form
suitable for recording or filing in the applicable jurisdictions,
and assignments thereof, in form suitable for recording or filing
in the applicable jurisdictions, from the Depositor to the Trustee
or the Mortgage Custodian, with evidence of the delivery thereof
for recording; and
(m) copies of the UCC-1 financing statements covering
the Mortgage Collateral Security, showing the Borrowers as debtors,
the Depositor as secured party and the Trustee, as assignee, each
with evidence of filing thereon; provided that if the Depositor
cannot deliver any such financing statements with evidence of
filing thereon because such financing statements have not yet been
returned by the public filing office where such financing
statements have been submitted for filing, then the Depositor shall
deliver or cause to be delivered a photocopy of such financing
statements (certified by the Depositor to be a true and complete
copy) together with an Officer's Certificate stating that such
financing statements have been dispatched to the appropriate public
filing office for filing.
The Depositor shall deliver or cause to be delivered to
the Mortgage Custodian, on behalf of the Trustee, the original
Mortgage and Mortgage Collateral Security, with evidence, if
applicable, of recording indicated thereon upon receipt thereof
from the public recording official, with a copy to the Servicer.
Concurrently with such sale, transfer and assignment, the
Depositor shall, at its expense, deliver each Mortgage Collateral
Assignment to be duly recorded in the name of the Trustee to the
appropriate records depository for the jurisdictions in which the
Mortgaged Properties are located and shall cause the receipt
evidencing submission for recording and each such Mortgage
Collateral Assignment after recordation to be delivered to the
Mortgage Custodian, on behalf of the Trustee. The Trustee shall
hold legal title to the Mortgage Loan as trustee for the benefit of
the Certificateholders.
Concurrently with such sale, transfer and assignment, the
Depositor shall (while delivering a copy thereof to the Mortgage
Custodian and the Servicer), at the expense of the Depositor, cause
each other item of Mortgage Collateral Security required to be
filed or recorded to be duly filed or recorded in the name of the
Mortgage Custodian on behalf of the Trustee in all places necessary
to perfect a valid first priority lien on the rights, interests and
properties that are the subject of the related Mortgage Collateral
Security and shall cause the receipt evidencing submission for
filing or recording and such Mortgage Collateral Security after
filing or recordation to be delivered to the Mortgage Custodian
promptly upon the release thereof. The Mortgage Custodian on
behalf of the Trustee shall be the secured party under the Mortgage
Collateral Security for the benefit of the Certificateholders. The
Servicer shall timely file such continuation statements or other
instruments as may be necessary to maintain the perfection of the
security interests in or granted by the Mortgage Collateral
Security. The cost of filing such confirmation statements and
other instruments shall be borne by the Borrowers.
The ownership of each Mortgage Note, the Mortgage, the
contents of the Mortgage File and any other Mortgage Collateral
Security is vested in the Trustee for the benefit of the
Certificateholders. The Depositor and the Servicer agree to take
no action inconsistent with the Trustee's ownership of the Mortgage
Loan and to promptly indicate to all inquiring parties that the
Mortgage Loan has been sold to and is owned by the Trustee for the
benefit of the Certificateholders and to claim no ownership
interest in the Mortgage Loan.
It is intended that the conveyance of the Depositor's
right, title and interest in and to the Trust Fund pursuant to this
Agreement shall constitute, and shall be construed as, a purchase
and sale and not a loan. However, if such conveyance is deemed to
be a loan, it is intended that: the rights and obligations of the
parties to such loan shall be established pursuant to the terms of
this Agreement; the Depositor hereby grants to the Trustee a first
priority security interest in all of the Depositor's right, title
and interest in, to and under the Trust Fund, whether now existing
or hereafter acquired, and the accounts and funds established by
the Servicer, the Trustee and the Paying Agent pursuant hereto, all
payments of principal of or interest on the Mortgage Loan, all
other payments made in respect of the Mortgage Loan, and all
proceeds thereof for the benefit of the Certificateholders, to
secure payment of the Certificates; and this Agreement shall
constitute a security agreement under applicable law. If such
conveyance is deemed to be a loan and the trust created by this
Agreement terminates prior to the satisfaction of the claims of any
Person holding any Certificates, the security interest created
hereby shall continue in full force and effect and the Trustee
shall be the collateral agent for the benefit of such Person, and
all proceeds shall be distributed as herein provided.
Section 2.2 Acceptance by Trustee. (a) The Mortgage
Custodian on behalf of the Trustee shall, upon actual receipt,
acknowledge receipt by delivery of a Mortgage Custodian Initial
Certificate, subject to the provisions of Section 2.1 hereof and
the review procedures provided for in Section 2.2(b) hereof, of all
or part of the Mortgage File described in Section 2.1 hereof and
declares that the Mortgage Custodian on behalf of the Trustee
holds, and, upon actual receipt, will hold, the documents
constituting all or part of the Mortgage File on behalf of the
Trustee in trust, upon the trusts herein set forth, for the use and
benefit of all present and future Certificateholders. Neither the
Mortgage Custodian nor the Trustee has any actual knowledge of any
adverse claims, liens or encumbrances on any of the assets so
delivered, including without limitation, federal tax liens or liens
arising under ERISA.
(b) The Mortgage Custodian, on behalf of the Trustee,
agrees, for the benefit of Certificateholders, to review the
Mortgage File within 30 days after execution and delivery of this
Agreement (or, with respect to each document that is not delivered
on the Closing Date because of delivery to a public recording
office, within seven days after delivery thereof to the Mortgage
Custodian on behalf of the Trustee) to ascertain that all required
documents have been executed and received and shall, by delivery of
the Mortgage Custodian Final Certificate, acknowledge that it has
received the documents set forth in such certificate (subject to
any exception noted on the exception list attached thereto)
including the Mortgage, the Mortgage Collateral Assignment and the
Assignment of Leases and that such documents have been filed or
recorded and that such documents relate to the Mortgage Loan, and
in so doing the Mortgage Custodian, on behalf of the Trustee, may
rely on the purported due execution and genuineness of any such
document and on the purported genuineness of any signature thereon.
The Mortgage Custodian, on behalf of the Trustee, shall have no
responsibility for reviewing the Mortgage File except as expressly
set forth in this Section 2.2(b) hereof. Subject to Section 8.1
hereof, neither the Trustee nor the Mortgage Custodian shall be
under any duty or obligation to inspect, review or examine any such
documents, instruments or certificates to determine independently
that they are genuine, enforceable or appropriate for the
represented purpose, whether the text of any assignment or
endorsement is in proper or recordable form (except, if applicable,
to determine if the Trustee is the assignee or endorsee or if the
endorsement on the Mortgage Notes conforms to the requirements of
Section 2.1(a) hereof), whether any document has been recorded in
accordance with the requirements of any applicable jurisdiction, or
to determine independently that any document has actually been
filed or recorded or that any document is other than what it
purports to be on its face. Neither the Trustee nor the Mortgage
Custodian, on behalf of the Trustee, shall be under any obligation
to review the Mortgage, this Agreement or any Sub-Servicing
Agreement to determine whether all Required Insurance Policies have
been received or whether any Title Insurance Policy meets the
definition thereof. If the Mortgage Custodian, on behalf of the
Trustee, in its review finds any document constituting a part of
the Mortgage File not to have been executed or received or to be
unrelated to the Mortgage Loan or to be otherwise missing or
defective (that is, mutilated, damaged, defaced, incomplete,
improperly dated, clearly forged or otherwise physically altered)
in any material respect, the Mortgage Custodian, on behalf of the
Trustee, shall notify the Depositor, the Servicer, the Trustee and
the Depositor thereof within the 30-day period (or the seven-day
period, as the case may be) set forth above in this Section 2.2(b)
hereof. In addition, the Mortgage Custodian, on behalf of the
Trustee, shall also notify the Depositor, the Trustee, the Servicer
and the Depositor if, in the examination of the Mortgage File as
specified in this Section 2.2(b) hereof, or through any other
means, a Responsible Officer of the Mortgage Custodian, on behalf
of the Trustee, obtains notice or knowledge (a) of any adverse
claim, lien or encumbrance against the Mortgaged Properties, (b)
that any of the Mortgage Notes is overdue or has been dishonored,
(c) of evidence on the face of any of the Mortgage Notes or the
Mortgage of any security interest or other right or interest
therein, or (d) of any defense against or claim to such Mortgage
Notes by any party.
Section 2.3 Representations and Warranties of the
Servicer, the Depositor and the Borrowers. (a) The Servicer
hereby represents and warrants to the other parties hereto that:
(i) The Servicer is a corporation, duly
organized, validly existing and in good standing, under
the laws of the State of Delaware, with full power and
authority to conduct its business as presently conducted
by it and is qualified to transact business in, and is in
good standing under, the laws of each state in which any
Mortgaged Property is located or is otherwise exempt
under applicable law from such qualification to the
extent necessary to perform its obligations under this
Agreement or is otherwise not required under applicable
law to effect such qualification and no demand for such
qualification has been made upon the Servicer by any such
state.
(ii) The execution and delivery of this
Agreement by the Servicer and its fulfillment of or
compliance with the terms and conditions of this
Agreement does not and shall not, in any manner which
would materially adversely affect its ability to perform
its obligations under this Agreement, conflict with,
result in a breach of, or constitute a default under (i)
any term, condition or provision of the Servicer's
charter or by-laws; (ii) any term or provision of any
material indenture, deed of trust, contract or other
agreement or instrument to which the Servicer is a party
or by which the Servicer is bound; or (iii) any law,
rule, regulation, order, judgment or decree of any court
or governmental authority having jurisdiction over the
Servicer.
(iii) This Agreement has been duly and validly
authorized, executed and delivered by the Servicer and,
assuming the due authorization, execution and delivery by
the other parties hereto, constitutes the legal, valid
and binding obligation of the Servicer, enforceable in
accordance with its terms, except as such enforcement may
be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other similar laws relating
to or affecting the rights of creditors generally, and by
general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at
law).
(iv) No consent, approval, authorization or
order of, or registration or filing with, or notice to,
any court or governmental agency or body is required for
the execution, delivery and performance by the Servicer
of or compliance by the Servicer with this Agreement or
the consummation of the transactions contemplated by this
Agreement.
(v) The Servicer is not in default with
respect to any order or decree of any court or any order,
regulation or demand of any federal, state, municipal or
governmental agency, which default might have
consequences that would materially and adversely affect
the condition (financial or other) or operations of the
Servicer or its properties or might have consequences
that would materially and adversely affect its
performance hereunder.
(vi) There is no action, suit or proceeding
before or by any court or governmental agency or body now
pending or, to the Servicer's knowledge, threatened,
which, if determined adversely to the Servicer, would
result in a material adverse change in the condition,
financial or otherwise, or in the earnings, business
affairs or business prospects of the Servicer, or would
materially and adversely affect the execution, delivery
or enforceability of this Agreement or the ability of the
Servicer to service the Mortgage Loan under and in
accordance with the terms of this Agreement.
(vii) The Servicer has the full corporate power,
authority and legal right to execute and deliver, engage
in the transactions contemplated by, and perform and
observe the terms and conditions of, this Agreement.
(viii) No information, certificate of an officer,
statement furnished in writing or report delivered to the
Depositor, any Affiliate of the Depositor or the Trustee by
the Servicer contains any untrue statement of a material fact.
The representations and warranties of the Servicer set
forth in this Section 2.3(a) shall survive the transfer and
assignment of the Mortgage Loan to the Trustee. Within 60 days of
the earlier of discovery by the Servicer or receipt of notice by
the Servicer of the breach of any representation, warranty or
covenant of the Servicer set forth in this Section 2.3(a), the
Servicer shall cure such breach in all material respects. The
Servicer shall indemnify the Depositor and the Trustee and hold
them harmless against any loss, damages, penalties, fines,
forfeitures, legal fees and related costs, judgments and other
costs and expenses resulting from any claim, demand, defense or
assertion based on or grounded upon, or resulting from, a breach of
the Servicer's representations and warranties contained in this
Section 2.3(a). It is understood and agreed that the enforcement
of the obligation of the Servicer set forth in this Section 2.3(a)
to indemnify the Depositor and the Trustee as provided in this
Section constitutes the sole remedy of the Depositor and the
Trustee respecting a breach by the Servicer of the representations
and warranties in this Section 2.3(a). Such indemnification shall
survive any termination, resignation or removal of the Servicer as
Servicer hereunder, and any termination of this Agreement.
(b) The Depositor hereby represents and warrants to the
Trustee and the Servicer that:
(i) the Depositor is a corporation duly
organized, validly existing and in good standing under
the laws of the State of Delaware and has full corporate
power and authority to originate the Mortgage Loan, to
own its property, to carry on its business as presently
conducted, to enter into and perform its obligations
under this Agreement, and to create the trust pursuant
hereto;
(ii) the origination of the Mortgage Loan and
the execution and delivery by the Depositor of this
Agreement have been duly authorized by all necessary
corporate action on the part of the Depositor; neither
the origination of the Mortgage Loan, the execution and
delivery of this Agreement, nor the consummation of the
transactions herein contemplated, nor compliance with the
provisions hereof, conflicts with or results in a breach
of, or constitutes a default under, (i) any of the
provisions of any law, governmental rule, regulation,
judgment, decree or order binding on the Depositor or its
properties; (ii) the certificate of incorporation or
bylaws of the Depositor; or (iii) the terms of any
indenture or other agreement or instrument to which the
Depositor is a party or by which it is bound; neither the
Depositor nor any of its Affiliates is a party to, bound
by, or in breach of or violation of any indenture or
other agreement or instrument, or subject to or in
violation of any statute, order or regulation of any
court, regulatory body, administrative agency or
governmental body having jurisdiction over it, which
materially adversely affects (A) the ability of the
Depositor to originate the Mortgage Loan or to perform
its obligations under this Agreement or (B) the business,
operations, financial condition, properties or assets of
the Depositor;
(iii) the origination of the Mortgage Loan and
the execution, delivery and performance by the Depositor
of this Agreement and the consummation of the
transactions contemplated hereby do not require the
consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in
respect of, any state, federal or other governmental
authority or agency (other than under state securities or
blue sky laws), except such as has been obtained, given,
effected or taken prior to the date hereof and except to
the extent that the failure to obtain such consent or
approval, give such notice, register with or take such
other action would not materially adversely affect (A)
the ability of the Depositor to originate the Mortgage
Loan or to perform its obligations under this Agreement
or (B) the business, operations, financial condition,
properties or assets of the Depositor;
(iv) this Agreement has been duly executed and
delivered by the Depositor and, assuming due
authorization, execution and delivery by the Trustee and
the Servicer, constitutes a valid and binding obligation
of the Depositor enforceable against it in accordance
with its terms;
(v) there are no legal or governmental
proceedings pending or, to the best of the Depositor's
knowledge, threatened or likely to be asserted against or
affecting the Depositor, before or by any court,
administrative agency, arbitrator or governmental body
(A) with respect to the origination of the Mortgage Loan
by Depositor, (B) with respect to any of the transactions
contemplated by this Agreement or (C) with respect to any
other matter which in the judgment of the Depositor will
be determined adversely to the Depositor and will, if
determined adversely to the Depositor, materially and
adversely affect it or its business, operations,
financial condition, properties or assets, or adversely
affect its ability to perform its obligations under this
Agreement;
(vi) immediately prior to the consummation of
the transactions contemplated in this Agreement, the
Depositor had good title to and was the sole owner of the
Mortgage Loan (and each Mortgage Note) free and clear of
any and all adverse claims, charges or security interests
arising as a result of its ownership of the Mortgage Loan
(including liens arising under the federal tax laws or
ERISA);
(vii) the Depositor has full corporate power and
authority to sell, assign and transfer the Mortgage Loan
and is transferring the Mortgage Loan (and each Mortgage
Note) free and clear of any and all liens, pledges,
charges or security interests of any nature encumbering
the Mortgage Loan, except as permitted hereby; and
(viii) the Mortgage Notes are the only notes
representing the indebtedness secured by the Mortgage.
It is understood and agreed that the representations and
warranties set forth in this Section 2.3(b) shall survive the
transfer and assignment of the Mortgage Loan to the Trustee. Upon
discovery by any Responsible Officer of any of the Depositor, the
Mortgage Custodian, the Servicer or the Trustee of the breach of
any representation or warranty of the Depositor herein which
materially adversely affects the interests of the
Certificateholders in the Mortgage Loan, the Servicer, the
Depositor, the Mortgage Custodian or the Trustee, as the case may
be, shall promptly notify the other parties hereto and the Rating
Agency. If, within 60 days after delivery of such notice to the
Depositor, the Depositor shall not have caused such breach to be
cured in all material respects, the Servicer on behalf of the
Trustee shall prosecute any legal action as may, in its judgment,
be necessary to protect the interest of the Trust Fund in
connection therewith. The Servicer shall be indemnified by funds
on deposit in the Distribution Account for any reasonable costs and
expenses incurred by it relating thereto only to the extent such
costs and expenses (1) are not paid by the Depositor as a result of
such legal action and (2) are not a result of the negligence, bad
faith or willful misconduct of the Servicer. Any such indemnified
cost or expense incurred by the Servicer shall constitute a
Servicing Advance. The Servicer shall not be required to expend
any funds hereunder to the extent such expenditure would be deemed
a Nonrecoverable Advance. Any action by the Servicer against the
Depositor pursuant to this Section 2.3(b) shall constitute the sole
recourse of the Trustee, the Servicer and the Certificateholders
against the Depositor in respect of such breach of any
representation or warranty, except as provided in Section 6.3.
(c) Upon discovery by any Responsible Officer of the
Depositor, the Mortgage Custodian, the Servicer or the Trustee of
a breach of any of the representations, warranties and covenants of
a Borrower in the Mortgage which adversely affects the value of the
Mortgage Loan or the interests of the Certificateholders in the
Mortgage Loan or potentially affects the status of the Trust REMIC
as a REMIC or that could result in a tax being imposed on the Trust
REMIC, the party discovering such breach shall give prompt written
notice to the other parties, the Borrowers and the Rating Agency.
The Servicer on behalf of the Trustee may prosecute any legal
action as may, in its judgment, be necessary to protect the
interest of the Trust Fund in connection therewith, subject to
Section 3.19 hereof. The Servicer shall be indemnified by funds on
deposit in the Distribution Account for any reasonable costs and
expenses incurred by it relating to actions taken by it in the
preceding sentences only to the extent such costs and expenses (i)
are not paid by the Borrowers as a result of such legal action and
(ii) are not a result from the negligence, bad faith or willful
misconduct of the Servicer. Any such cost or expense incurred by
the Servicer shall constitute a Servicing Advance. The Servicer
shall not be required to expend any funds hereunder to the extent
such expenditures would be deemed a Nonrecoverable Advance.
ARTICLE V
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOAN
Section 3.1 Servicer to Act as Servicer. (a) The
Servicer, as an independent contract servicer, shall service and
administer the Mortgage Loan on behalf of the Trustee and in the
best interests of and for the benefit of the Certificateholders (as
determined by the Servicer in its reasonable judgment) in
accordance with the terms of this Agreement and the Mortgage Loan
and, in furtherance of and to the extent consistent with such
terms, giving due consideration to customary and usual standards of
practice of prudent institutional commercial mortgage loan
servicers and with a view to the maximization of timely recovery of
principal and interest on the Mortgage Loan and the preservation of
available remedies with respect to the Mortgage Loan and the
Mortgaged Properties but without regard to:
(i) any relationship (other than that created
by this Agreement) that the Servicer, any Sub-Servicer or
any Affiliate of the Servicer or any Sub-Servicer may
have with either Borrower or any Affiliate of the
Borrowers;
(ii) the ownership of any Certificate by the
Servicer or any Affiliate of the Servicer;
(iii) the Servicer's or any Sub-Servicer's
obligations to make Advances or to incur servicing
expenses with respect to the Mortgage Loan;
(iv) the adequacy of the Servicer's or any
Sub-Servicer's compensation for its services hereunder or
with respect to any particular transaction; or
(v) the Servicer's or any Sub-Servicer's ownership,
servicing or management for others of any other mortgage loans
or mortgages.
The Servicer's or Special Servicer's liability for
actions and omissions in its capacity as Servicer or Special
Servicer, as the case may be, hereunder is limited as provided
herein (including, without limitation, pursuant to Section 6.3
hereof), and nothing herein contained shall be construed as an
express or implied guarantee by the Servicer or Special Servicer of
the collectability of the Mortgage Loan.
Subject to the above-described servicing standards
(hereinafter referred to as "Accepted Servicing Practices") and the
terms of this Agreement (including specifically Article X) and of
the Mortgage Loan, the Servicer shall have full power and
authority, acting alone and/or through one or more Sub-Servicers as
provided in Section 3.2 hereof, 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, the Servicer in its own name or in the
name of any Sub-Servicer is hereby authorized and empowered by the
Trustee when the Servicer deems it appropriate in its best
judgment, to execute and deliver, on behalf of itself, the
Certificateholders and the Trustee or any of them, to the extent
consistent with the provisions of this Agreement (including
specifically Section 3.3(a)) hereof, any and all instruments of
satisfaction or cancellation, or of partial or full release or
discharge, any and all modifications, waivers, amendments, or
consents to or with respect to any documents contained in the
Mortgage File, subordination, nondisturbance, attornment
agreements, and all other comparable instruments, with respect to
the Mortgage Loan. The Servicer shall service and administer the
Mortgage Loan in accordance with applicable state and federal law.
Subject to Section 3.10 hereof, upon the written request of the
Servicer, the Trustee shall execute and deliver to the Servicer and
any Sub-Servicer any powers of attorney and other documents in the
form furnished to it by the Servicer as are necessary or
appropriate to enable the Servicer and any Sub-Servicer to carry
out their servicing and administrative duties hereunder and the
Trustee shall not be held responsible for any acts by either the
Servicer or any Sub-Servicer in their respective uses of any such
powers of attorney given.
(b) Any permissive right of the Servicer enumerated in
this Agreement shall not be construed as a duty. The Servicer
shall not be liable with respect to any action taken, suffered or
omitted to be taken by it in good faith in accordance with this
Agreement or by it at the direction of Certificateholders
evidencing not less than a majority of the Aggregate Certificate
Balance (unless this Agreement provides for a greater majority),
relating to the time, method and place of conducting any proceeding
for any remedy available to the Servicer, or exercising or omitting
to exercise any trust or power conferred upon the Servicer, under
this Agreement.
Section 3.2 Sub-Servicing Agreements. (a) The Servicer
may enter into Sub-Servicing Agreements (provided such agreements
would not result in the withdrawal, qualification or downgrade of
the then current ratings on the Class A, Class B, Class C or Class
D Certificates, as evidenced by a letter to such effect from the
Rating Agency delivered to the Trustee prior to entering into any
Sub-Servicing Agreement and provided such agreements require the
Sub-Servicer to comply with all of the conditions of this Agreement
applicable to the Servicer in respect of the duties delegated) with
Sub-Servicers acceptable to the Borrowers and the Rating Agency for
the servicing and administration of the Mortgage Loan. References
in this Agreement to actions taken or to be taken by the Servicer
in servicing the Mortgage Loan include actions taken or to be taken
by a Sub-Servicer on behalf of the Servicer. Each Sub-Servicer
shall be (i) authorized to transact business in the state or states
in which the Mortgaged Properties it is to service are situated, if
and to the extent required by applicable law to enable the
Sub-Servicer to perform its obligations hereunder and under the
applicable Sub-Servicing Agreement, and (ii) a qualified
institutional commercial mortgage loan servicer. Each
Sub-Servicing Agreement shall be upon such terms and conditions as
are not inconsistent with this Agreement and as the Servicer and
the Sub-Servicer have agreed. For purposes of this Agreement, the
Servicer shall be deemed to have received any payment when the
Sub-Servicer receives such payment. The Servicer shall notify the
Trustee and the Depositor in writing promptly upon the appointment
of any Sub-Servicer and promptly furnish the Trustee with a copy of
the applicable Sub-Servicing Agreement.
(b) As part of its servicing activities hereunder, the
Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each
Sub-Servicer under the related Sub-Servicing Agreement. Such
enforcement against a Sub-Servicer, including, without limitation,
the legal prosecution of claims, termination of Sub-Servicing
Agreements and the pursuit of other appropriate remedies, shall be
in such form and carried out by the Servicer at its own expense to
such an extent and at such time as the Servicer, in its good faith
business judgment, would require were it the owner of the Mortgage
Loan. The Servicer shall pay the costs of such enforcement at its
own expense and shall be reimbursed therefor only (i) from a
general recovery resulting from such enforcement only to the
extent, if any, that such recovery exceeds all amounts due in
respect of the Mortgage Loan, or (ii) from a specific recovery of
costs, expenses or attorneys' fees against the party against whom
such enforcement is directed.
(c) Notwithstanding any Sub-Servicing Agreement, any
of the provisions of this Agreement relating to agreements or
arrangements between the Servicer and a Sub-Servicer or reference
to actions taken through a Sub-Servicer or otherwise, the Servicer
shall remain obligated and liable to the Depositor, the Trustee and
Certificateholders for the servicing and administering of the
Mortgage Loan in accordance with the provisions of Section 3.1
hereof without diminution of such obligation or liability by virtue
of such Sub-Servicing Agreement or arrangements or by virtue of
indemnification from a Sub-Servicer and to the same extent and
under the same terms and conditions as if the Servicer alone were
servicing and administering the Mortgage Loan.
Section 3.3 Collection of Certain Mortgage Loan
Payments; Distribution Account; Certificate Account; Default
Interest Amount. (a) Continuously from the Closing Date until the
principal and interest on the Mortgage Loan are paid in full, the
Servicer shall proceed diligently to collect in accordance with
Section 3.1 all payments called for under the terms and provisions
of the Mortgage Loan, and shall follow such collection procedures
as are consistent with this Agreement, including Accepted Servicing
Practices.
(b) On or before the Closing Date, the Servicer shall
establish a single Distribution Account. The Distribution Account
shall be an Eligible Account held in the name of the Servicer on
behalf of the Trustee for the benefit of the Holders of the
Certificateholders and funds in the Distribution Account shall not
be commingled with any other moneys. The Servicer shall notify the
Trustee, the Paying Agent and the Depositor in writing of the
location and account number of the Distribution Account and shall
not change such location or account number until prior written
notice of the new location or account number has been delivered to
the Trustee, the Paying Agent and the Depositor.
(c) Funds in the Distribution Account shall be invested,
at the risk of the Borrowers and at their written direction, in
Permitted Investments maturing or redeemable by the holder thereof
at par no later than three Business Days prior to the first
Servicer Advance Date after such investment. None of the
Depositor, the Servicer or the Trustee shall be liable for any
losses incurred on such Permitted Investments except to the extent
due to their negligence, willful misconduct or fraud in maintaining
custody of any such Permitted Investments or in determining whether
any investment is a Permitted Investment. The Holders of the Class
R Certificate shall be entitled, in accordance with the terms
hereof, to all interest on amounts on deposit in the Distribution
Account and income from Permitted Investments. Any losses realized
in connection with any such investment shall be for the account of
the Borrowers which shall deposit the amount of such loss (to the
extent not offset by income from other investments) in the
Distribution Account one Business Day after written notice of such
loss from the Servicer.
(d) The Servicer shall deposit into the Distribution
Account, no later than the Servicer Advance Date (with respect to
item (v) below), no later than the Business Day following receipt
of any such amounts (with respect to items (i), (ii), (iii) and
(iv) below), or, in the case of unscheduled remittances of
principal or interest, no later than the Business Day following
identification of the proper application of such amounts (unless
the Servicer determines, consistent with Accepted Servicing
Practices, that a particular item should not be deposited), the
following amounts received or Interest Advances made by it:
V all payments on account of Principal
Prepayments and Balloon Payments, on the Mortgage Loan;
(ii) all payments on account of interest (other
than Default Interest, which shall be treated in the
manner set forth in Section 3.3(k) hereof) on the
Mortgage Loan (net of Servicing Compensation and Trustee
Fees but only to the extent of the amount permitted to be
withdrawn or withheld from the Distribution Account in
accordance with this Agreement);
(iii) all Net Liquidation Proceeds and
Foreclosure Proceeds with respect to the Mortgaged
Properties (net of any unpaid Servicing Compensation and
Trustee Fees but only to the extent of the amount
permitted to be withdrawn or withheld from the
Distribution Account in accordance with this Agreement);
(iv) all other Curtailments and all amounts
paid by the Servicer pursuant to Section 3.5(b);
(v) all Interest Advances; and
(vi) all amounts paid to reimburse the
Servicer, as assignee of the Depositor in its capacity as
beneficiary under the Mortgage.
The foregoing requirements for deposit in the
Distribution Account shall be exclusive, it being understood and
agreed that, without limiting the generality of the foregoing,
amounts received by the Servicer for the account of the Borrowers
for application towards the payment of Impositions, insurance
premiums and similar items, if any, need not be deposited by the
Servicer in the Distribution Account, nor shall any late payment
charges, assumption fees, extension fees, demand fees, modification
fees and similar items, if any, be deposited in the Distribution
Account (such items constituting additional compensation payable to
the Servicer). All funds deposited by the Servicer in the
Distribution Account shall be held in trust until disbursed or
withdrawn in accordance herewith. Except as expressly permitted,
provided or required hereunder, the Servicer shall not sell,
transfer or assign to any Person any interest (including any
security interest) in amounts credited or to be credited to the
Distribution Account or the Default Interest Account, or take any
action towards that end, and shall maintain such amounts free of
all liens, claims and encumbrances of any nature (other than liens
created pursuant to this Agreement).
(e) No later than two Business Days prior to each
Distribution Date, the Servicer shall make withdrawals from the
Distribution Account for the following purposes (the order set
forth below not constituting an order of priority for such
withdrawals):
(i) to withdraw any sums deposited in error in
the Distribution Account and pay such sums to the Persons
entitled thereto;
(ii) to reimburse the Servicer for the Mortgage
Recording Tax Advance plus the Advance Interest Amount;
(iii) to reimburse the Servicer or Special
Servicer, as applicable (as assignee of the Depositor in
its capacity as beneficiary under the Mortgage), for the
reasonable fees and expenses incurred by it pursuant to
Section 18 of the Mortgage, plus interest thereon as the
Advance Rate as if such amount were a Servicing Advance,
from (1) Net Liquidation Proceeds with respect to a
Liquidated Mortgaged Property or Foreclosed Property and
from Foreclosure Proceeds (it being understood, except as
set forth in the proviso to this sentence in the case of
any such reimbursement, that the right of the Servicer to
reimbursement shall be prior to the rights of the
Certificateholders and that the amount reimbursable shall
include interest on the amount advanced at the Advance
Rate) and (2) from distributions pursuant to Paragraph
Section 3(d)(ii) of the Cash Collateral Agreement,
provided that such fees and expenses shall not be
reimbursed from such Section 3(d)(ii) distributions with
respect to any Distribution Date to the extent that such
reimbursement would result in distributions to
Certificateholders being less than the amounts of
interest and principal due on the Certificates on such
Distribution Date;
(iv) to reimburse itself or the Trustee, as the
case may be, from payments made by the Borrowers in
respect of principal or interest due under the Mortgage
Loan, from Net Liquidation Proceeds with respect to a
Liquidated Mortgaged Property, Foreclosed Property or
Defaulted Mortgage Loan and from Foreclosure Proceeds,
for Interest Advances made by it or the Trustee,
respectively, not previously reimbursed, including any
Interest Advance previously made that the Servicer or the
Trustee, as the case may be, has determined to be a
Nonrecoverable Advance, plus the Advance Interest Amount,
provided that Interest Advances (other than those
determined to be Nonrecoverable Advances) and the Advance
Interest Amount shall not be reimbursed with respect to
any Distribution Date out of Monthly Interest Payments or
Interest Advances to the extent that such reimbursement
would result in distributions to Certificateholders being
less than the amounts of interest and principal due on
the Certificates on such Distribution Date (it being
understood, in the case of any such reimbursement, that
the right of the Trustee to reimbursement shall be prior
to the right of the Servicer, and that the right of the
Servicer shall be prior to the rights of the
Certificateholders and that the amount reimbursable shall
include interest on the amount advanced at the Advance
Rate);
(v) to reimburse itself or the Trustee, as the
case may be, from payments made by the Borrowers in
respect of defaulted payments due under the Mortgage Loan
(other than any such payments in respect of principal of
or interest on the Mortgage Loan), from Net Liquidation
Proceeds with respect to a Liquidated Mortgaged Property
or Foreclosed Property and from Foreclosure Proceeds, for
Servicing Advances made by it, the Special Servicer or
the Trustee, as the case may be, and not previously
reimbursed (it being understood, in the case of any such
reimbursement, that the right of the Trustee to
reimbursement shall be prior to the rights of the
Servicer, and the Servicer's right thereto shall be prior
to the rights of the Certificateholders and that the
amount reimbursable shall include interest on the amount
advanced at the Advance Rate);
(vi) to pay and reimburse the Trustee for its
reasonable fees and unanticipated expenses related to its
services hereunder, including but not limited to the
amounts set forth in Section 8.6(b) hereof and Section
10.1(c) and (e) hereof, and the Servicer the amounts
provided for in Section 6.3 hereof, in each case with
interest on the amount advanced at the Advance Rate (it
being understood that the Trustee's and the Servicer's
rights thereto shall be prior to the rights of the
Certificateholders);
(vii) to reimburse or pay itself, the Depositor
and the Trustee, other than from payments in respect of
principal of or interest on the Mortgage Loan unless such
amount would be a Nonrecoverable Advance, for any amounts
specifically reimbursable or payable pursuant to the
terms of this Agreement, including previously
unreimbursed Servicing Advances and for the reasonable
fees and expenses incurred by the Servicer pursuant to
Section 18 of the Mortgage (other than those amounts
provided for elsewhere in this Section 3.3(e) hereof), at
the time specified in connection with such right to
reimbursement or payment and not previously reimbursed or
paid pursuant hereto, together with any interest thereon
at the Advance Rate (it being understood that the
Servicer's, the Depositor's and the Trustee's rights
thereto shall be prior to the rights of the
Certificateholders);
(viii) to pay itself or the Special Servicer, as
applicable, the Servicing Compensation (to the extent
provided under Section 3.11 hereof) and unpaid Advance
Interest Amount; and to pay the Trustee the Trustee Fee,
together with interest on any portion of such amount that
is past due at the Advance Rate from the date such
outstanding amount was due to the date of payment
thereof;
(ix) to pay any and all taxes imposed on the
Trust REMIC by federal or state or local governmental
authorities to the extent such taxes have not been paid
pursuant to Section 10.5 hereof;
(x) to make any other payments for which
withdrawal from the Distribution Account is authorized
pursuant to this Agreement;
(xi) to make payment to the Paying Agent not
later than one Business Day prior to the Distribution
Date for deposit by the Trustee pursuant to
Section 3.3(f) into the Certificate Account of amounts to
be paid to Certificateholders, including any Interest
Advance, in the amounts directed by the Trustee; and
(xii) to clear and terminate the Distribution
Account pursuant to Section 9.1 hereof.
The Servicer shall keep and maintain separate accounting
for the purpose of justifying any withdrawal from the Distribution
Account.
(f) On or before the Closing Date, the Paying Agent,
on behalf of the Trustee for the benefit of the Certificateholders,
shall establish a single Certificate Account. The Certificate
Account shall at all times be an Eligible Account and shall relate
solely to the Certificates, and the Paying Agent, on behalf of the
Trustee, shall have the exclusive right to withdraw funds there-
from. The Paying Agent, on behalf of the Trustee, shall deposit
into the Certificate Account on the Business Day received all
moneys from the Distribution Account pursuant to Section 3.3(e)(x)
above. The Paying Agent shall make withdrawals from the Certifi-
cate Account only for the following purposes (the order set forth
below not constituting an order of priority for such withdrawals):
(i) to withdraw amounts deposited in the Cer-
tificate Account in error and pay such amounts to the
Persons entitled thereto;
(ii) to make distributions to the Certificate-
holders pursuant to Sections 4.1 (a) and (b); and
(iii) to clear and terminate the Certificate
Account pursuant to Section 9.1.
(g) On or before the Closing Date, the Paying Agent,
on behalf of the Trustee for the benefit of the Certificateholders,
shall establish the Default Interest Account, which shall at all
times be an Eligible Account and relate solely to the Class A,
Class B, Class C and Class D Certificates, and the Paying Agent, on
behalf of the Trustee, shall have the exclusive right to withdraw
funds therefrom. The Default Interest Account shall not be
property of the Trust REMIC. The Servicer, on behalf of the
Trustee, shall deposit into the Default Interest Account on the
Business Day received all Default Interest collected on the
Mortgage Notes and shall account separately for Default Interest
collected on each Mortgage Note. The Trustee and the Paying Agent
shall make withdrawals from the Default Interest Account only for
the following purposes (the order set forth below not constituting
an order of priority for such withdrawals):
(i) to withdraw amounts deposited in the
Default Interest Account in error and pay such amounts to
the Persons entitled thereto;
(ii) to make distributions of Default Interest
to the Certificateholders pursuant to Section 4.1(c)
hereof; and
(iii) to clear and terminate the Default
Interest Account pursuant to Section 9.1 hereof.
(h) Neither the Servicer, the Trustee nor the Paying
Agent shall be liable for any failure to withdraw and pay any
amounts pursuant to Section 3.3(e), (f) or (g), as the case may be,
resulting from any determination made by them as to the priority of
any payment in accordance with the terms of such Sections.
Section 3.4 Escrow Account; Collection of Impositions,
etc.. (a) If, under the terms of the Loan Documents, the Servicer
shall be required to establish escrow or impound accounts (other
than the Accounts), the Servicer shall, in addition to the
Distribution Account, establish and maintain one or more sub-
accounts, each of which shall be an Eligible Account and may be
maintained on a ledger entry basis (each, an "Escrow Account") and
shall deposit therein any collections of amounts received by the
Servicer with respect to costs due for the account of the
Borrowers. Subject to the terms of the Mortgage Notes and
Mortgage, and further subject to applicable law, any funds in any
Escrow Account shall be invested, at the risk of the Borrowers and
at their written direction, in Permitted Investments maturing or
redeemable by the holder thereof at par no later than the Business
Day next preceding the day on which payments are required to be
made out of such Escrow Account. None of the Depositor, the
Servicer nor the Trustee shall be liable for any losses incurred on
such Permitted Investments except to the extent due to their
negligence, willful misconduct or fraud in maintaining custody of
any such Permitted Investments or in determining whether any
investment is Permitted Investment. All interest on amounts on
deposit in any Escrow Account and income from such Permitted
Investments shall be the property of the Borrowers and may be
withdrawn therefrom at any time and from time to time in the
discretion of the Borrowers. Any losses realized in connection
with any such investment shall be for the account of the Borrowers
which shall deposit the amount of such loss (to the extent not
offset by income from other investments) in such Escrow Account one
Business Day after receipt of written notice of such loss from the
Servicer. Withdrawals from any Escrow Account may be made (to the
extent amounts have been escrowed for such purpose and to the
extent permitted by the Loan Documents) only (i) to effect timely
payment of such costs in connection with the Mortgage Loan or to
reimburse the Borrowers upon proof of payment of such costs, (ii)
to refund to the Borrowers any sums determined to be overages,
(iii) to pay interest and investment income on Permitted
Investments to the Borrowers to the extent permitted or required
hereunder or required by law or any Mortgage Note or the Mortgage
or (iv) to clear and terminate such Escrow Account on the
termination of this Agreement. Any provision of the Mortgage
regarding the accounts created pursuant thereto shall govern
notwithstanding any inconsistency with any provision of this
Section 3.4.
(b) The Servicer shall maintain accurate records with
respect to each Mortgaged Property reflecting the status of taxes,
assessments and other similar items that are or may become a lien
thereon and the status of insurance premiums payable in respect
thereof (to the extent owing by the Borrowers). The Servicer, on
behalf of the Trustee, shall effect payment of any items of expense
required by the Mortgage to be paid by the Trustee on behalf of the
Borrowers from the sources specified in the Mortgage. If not paid
from amounts on deposit in accounts created pursuant to the
Mortgage or the Cash Collateral Agreement or from amounts on
deposit in an Escrow Account or otherwise paid by the Borrowers,
the Servicer shall, subject to Section 3.1 hereof and Section
3.17(g) hereof, pay or cause to be paid all items referred to in
the preceding two sentences (which amounts shall be Servicing
Advances) when and as the same shall become due and payable, and
shall be reimbursed therefor pursuant to Section 3.3(e)(iv) hereof.
Section 3.5 Maintenance of Insurance and Errors and
Omissions and Fidelity Coverage. (a) The Servicer shall use
reasonable efforts to cause each Borrower to maintain, or cause the
related Tenant pursuant to the terms of its Lease to maintain, for
each Mortgaged Property all insurance required by the terms of the
Mortgage in the amounts set forth therein and with insurers of the
credit quality set forth therein. To the extent that the Borrowers
nevertheless fail to maintain any hazard insurance, including flood
insurance that the Borrowers are required to maintain, or in the
event that any Mortgaged Property is converted into a Foreclosed
Property, the Servicer, on behalf of the Trustee as Mortgagee,
shall maintain for each Mortgaged Property all insurance required
by the terms of the Mortgage in the amounts set forth therein to
the extent such insurance is obtainable, unless the expense
therefor would constitute a Nonrecoverable Advance. Any amounts
collected by the Servicer under any such policies (other than
amounts to be applied to the restoration or repair of the related
Mortgaged Property in accordance with the terms of the Mortgage)
shall be deposited in the Distribution Account, subject to
withdrawal pursuant to Section 3.3(e). The cost of any insurance
provided pursuant to this section shall be a Servicing Advance,
which shall be recoverable by the Servicer or the Trustee as a
Servicing Advance pursuant to Section 3.3(e)(iv). The Servicer may
reasonably rely on the information required in Section 5 of the
Mortgage and may reasonably assume that each Mortgaged Property
contains the average square footage and construction type as
specified. Unless and to the extent the Servicer has reason to
believe such information may be incorrect, the Servicer may use
such information in its assessment of the adequacy of the insurance
provided by the tenants and by the Borrowers using an appropriate
estimator for insurance or other reasonable means of determining
the adequacy of insurance. Any determination made by the Servicer
pursuant to the foregoing two sentences shall be deemed to be made
in accordance with Accepted Servicing Practices and the amount
covered by any policy approved based on such determination shall be
deemed to comply with this Section 3.5(a).
(b) In the event that the Servicer shall obtain and
maintain any policy of insurance pursuant to Section 3.5(a), such
policy may contain a deductible clause, provided that if there is
a loss which would have been covered by a policy complying with
Section 3.5(a) hereof, the Servicer shall deposit in the
Distribution Account the lesser of the amount by which the cost of
repair exceeds available insurance proceeds and the amount not
otherwise payable under the policy obtained and maintained by the
Servicer because of such deductible clause to the extent such
deductible exceeds the deductible under a policy which would have
been maintained pursuant to Section 3.5(a) hereof. Any such
deposit by the Servicer shall be made on the Servicer Advance Date
next preceding the Distribution Date upon which the proceeds
represented by such deposit are required to be distributed to
Certificateholders. In connection with its activities as
administrator and servicer of the Mortgage Loan, the Servicer
agrees to present, on behalf of itself, the Trustee and
Certificateholders, claims under any such policy. If the Servicer
fails to obtain and maintain any insurance required to be obtained
and maintained by it pursuant to Section 3.5(a) hereof, then in the
event of a loss which would have been covered by such insurance,
the Servicer shall restore the Mortgaged Property affected by such
loss at its own cost and expense and the cost of such restoration
shall not constitute a Servicing Advance or otherwise be
recoverable from the Trust to the extent that such cost would have
been recoverable under a policy required to be obtained and
maintained by it pursuant to Section 3.5(a) hereof.
(c) The Servicer shall obtain and maintain at its own
expense, and keep in full force and effect throughout the term of
this Agreement, a blanket fidelity bond and an errors and omissions
insurance policy covering the Servicer's officers and employees and
other persons acting on behalf of the Servicer in connection with
its activities under this Agreement. The amount of coverage shall
be at least equal to the coverage that would be required by a
prudent institutional commercial loan lender of its servicers. In
the event that any such bond or policy ceases to be in effect, the
Servicer shall obtain a comparable replacement bond or policy.
Coverage of the Servicer under a policy or bond obtained by an
Affiliate of the Servicer and providing the coverage required by
this Section shall satisfy the requirements of this Section.
Notwithstanding the foregoing, the Servicer shall be entitled to
provide self-insurance or insurance through its Affiliate with
respect to its obligation to maintain the blanket fidelity bond,
and, so long as the long term unsecured debt obligations of the
Servicer or such Affiliate are rated at least "A" by the Rating
Agency (or such self-insurance by the Servicer or such Affiliate is
otherwise acceptable to the Rating Agency), the Servicer shall be
entitled to provide self-insurance or insurance through its
Affiliate with respect to its obligation to secure an errors and
omissions insurance policy.
Section 3.6 "Due-on-Sale" Clauses; Releases;
Assumptions. (a) To the extent the Mortgage Loan contains
enforceable "due-on-sale" or "due-on-encumbrance" clauses, the
Servicer shall enforce such clauses. The Servicer, on behalf of
the Trustee, shall take the steps to release any Mortgaged Property
from the lien of the Mortgage if conditions to the release of
Mortgaged Property under Section 38(b) of the Mortgage have been
met. To the extent that the Mortgage Loan contains a provision
permitting the sale of the Mortgaged Property and the assumption of
the Mortgage Loan by the purchaser of the Mortgaged Property if the
consent of the Mortgagee is obtained, the Servicer, on behalf of
the Trustee, shall consent to such transfer and assumption if all
of the conditions to such sale and assumption set forth in the
Mortgage Loan are satisfied.
(b) Notwithstanding the foregoing or any other
provision of this Agreement, the Servicer shall not be deemed to be
in default, breach or any other violation of its obligations
hereunder by reason of any conveyance by a Borrower of a Mortgaged
Property or any assumption of the Mortgage Loan by contract or
operation of law which the Servicer in good faith determines it may
be restricted by law from preventing.
Section 3.7 Realization Upon Mortgaged Properties;
Extension of Balloon Payments on Mortgage Loan; Modification,
Amendment or Waiver of Mortgage Loan. (a) The Servicer shall,
consistent with Accepted Servicing Practices, the provisions of
Sections 3.7(c), (d) and (e) and the provisions of the Mortgage,
institute collection procedures and foreclose upon or otherwise
comparably convert the ownership of the Mortgaged Property upon the
occurrence of a Mortgage Event of Default, as permitted under the
Mortgage. In connection with such foreclosure or other conversion,
the Servicer shall employ Accepted Servicing Practices, including
preserving its rights to all available remedies.
Notwithstanding the preceding paragraph, (i) the
Servicer, upon an actual default by the Borrowers in making any of
the Balloon Payments on the Scheduled Maturity Date but prior to
commencement of foreclosure, shall in writing request that the
Trustee notify in writing the Certificateholders of such failure to
pay, (ii) within five Business Days of its receipt of such request,
the Trustee shall so notify the Certificateholders, including
notice that unless within 30 days of the mailing of the Servicer's
request to the Trustee the Trustee has received written instruction
from all of the Holders of Class A, Class B, Class C and Class D
Certificates affected by such failure to pay, instructing the
Servicer (1) to forebear from exercising such remedies and (2) to
extend the due date of the Balloon Payments, the Servicer shall
promptly commence foreclosure, and (iii) if within such 30-day
period the Trustee has received such written instruction from
Holders from each Class of Certificates affected by any extension
of a Balloon Payment and each Class junior in right to payment of
such Class, then in such case the Servicer shall forebear from
exercising such remedies, modify the Mortgage Notes, subject to
Section 3.7(d) hereof, to extend the Balloon Payments to a date
that is not more than one year after the Scheduled Maturity Date
and notify the Rating Agency in writing of such extension and the
date thereof.
During the period that the Trust Fund holds a Foreclosed
Property, Foreclosure Proceeds and any other amounts received with
respect to such Foreclosed Property (including any Liquidation
Proceeds received prior to the time the Mortgaged Property becomes
a Liquidated Mortgaged Property) shall be applied, after payment of
any related expenses (including any taxes owed pursuant to the
REMIC Provisions), first, to reimburse any Advance with respect to
such Mortgaged Property together with Advance Interest thereon,
second, to pay interest currently due or deemed to be due on the
Mortgage Loan Principal Balance and, third, to reduce the Mortgage
Loan Principal Balance.
(b) Notwithstanding the foregoing, the Servicer shall
not acquire for the benefit of the Trust Fund any personal property
pursuant to this Section 3.7(b) or otherwise unless either:
(i) such personal property is incidental to
real property (within the meaning of Section 856(e)(1) of
the Code) so acquired by the Servicer for the benefit of
the Trust Fund; or
(ii) the Servicer shall have requested and
received a Nondisqualification Opinion, at the expense of
the Trust Fund (provided such expense may be expended by
the Servicer subject to reimbursement as a Servicing
Advance pursuant to Section 3.3(e)(iv) hereof) with
respect to the holding of such property.
(c) Notwithstanding the provisions of Sections 3.8(a)
and 3.7(d) hereof, upon the occurrence of a Monetary Default due
solely to the failure by the Borrowers to pay interest (other than
Default Interest) on the Mortgage Loan on any Due Date, and a
determination in good faith by the Servicer (such determination to
be final, conclusive and binding on the Trustee and
Certificateholders) that any Interest Advance necessary to cover
the resultant shortfall would be a Nonrecoverable Advance, the
Servicer shall accelerate the Mortgage Loan and, if the Mortgage
Loan is not immediately paid in full, pursue foreclosure remedies
with respect to the Mortgaged Property in accordance with
applicable law.
(d) In the event that a material Monetary Default with
respect to the Mortgage Loan has occurred, if the Servicer
determines that a modification, waiver or amendment of the terms of
the Mortgage Loan is reasonably likely to produce a greater
recovery on a present value basis than foreclosure or other
liquidation of the Mortgaged Properties, then, the Servicer may,
but is not required to, agree to a modification, waiver or
amendment of any of the terms of the Mortgage Loan; provided,
however, that the Servicer agrees not to permit any modification
with respect to the Mortgage Loan that would (i) change the rate of
interest on the related Mortgage Notes, (ii) extend, except as
otherwise provided in Section 3.7(a) hereof, the maturity date of
such Mortgage Loan, (iii) defer payment of interest due on the
related Mortgage Notes, (iv) forgive any principal or interest
thereof or (v) affect the priority of the Mortgage or any other
Loan Documents, unless the Servicer has notified the Trustee and
directed the Trustee in writing to notify the Certificateholders of
such proposed modification and the Trustee has notified the
Servicer that such modification has been approved by all of the
Holders of each Class of Certificates affected by such modification
and each Class junior in right of payment of such Class; and
provided, that no such modification shall release, or affect the
priority of, the lien of the Mortgage or any Loan Documents on any
Mortgaged Property or substitute a property for a Mortgaged
Property unless the Servicer has obtained a Nondisqualification
Opinion with respect to such modification, which opinion shall be
obtained at the expense of the Trust Fund (provided such expense
may be expended by the Servicer as a Servicing Advance subject to
reimbursement pursuant to Section 3.3(e)(iv) hereof).
Subject in all respects to the provisions of the
preceding paragraph, (1) upon the occurrence of a Mortgage Event of
Default (including non-payment of any amount due under the Mortgage
Loan on the Scheduled Maturity Date) or (2) upon the notification
by the Borrowers to the Servicer within 90 days of the Scheduled
Maturity Date that they will not make the Balloon Payments in full
when due and the determination by the Servicer that default on the
Mortgage Notes is imminent, if the Servicer determines that a
modification, waiver or amendment of the terms of the Mortgage Loan
is reasonably likely to produce a greater recovery on a present
value basis than foreclosure or other liquidation of one, some or
all of the Mortgaged Property, then the Servicer shall in writing
request that the Trustee notify the Holders of the Class A, Class
B, Class C and Class D Certificates to such effect. The Trustee
shall, within five Business Days of receiving such request, so
notify such Certificateholders, which notice shall include
notification that written consent is required by Holders of in
excess of 50% in the case of clause (1) above and 100% in the case
of clause (2) above of the Aggregate Certificate Balance of each
Class of Certificates (other than the Class R Certificates)
affected by such modification, waiver or amendment (and in the case
of clause (2) above, each Class junior in right to payment of such
Class), for the Servicer to effect such proposed waiver,
modification or amendment, and that the Certificateholders who fail
to respond in writing within 40 days of the date of the Servicer's
notice to the Trustee shall be deemed to have declined such
proposed modification, amendment or waiver. The Trustee, having so
notified such Certificateholders in writing and having obtained the
consent thereto of the Holders of in excess of 50% in the case of
clause (1) above and 100% in the case of clause (2) above, of the
Aggregate Certificate Balance of each Class of Certificates (other
than the Class R Certificate) affected by such modification, waiver
or amendment (and, in the case of clause (2) above, each Class
junior in right to payment of such Class), may permit such
modification, waiver or amendment; provided that if any of such
Certificateholders fails to respond in writing within 40 days from
the date the Servicer so notifies the Trustee, such
Certificateholder shall be deemed to have declined to allow such
proposed modification, waiver or amendment. Notwithstanding
anything to the contrary set forth above, (A) the Balloon Payments
may not be extended to a date that is more than one year after the
Scheduled Maturity Date and (B) no modification, waiver or
amendment shall release the lien, or affect the priority of, the
Mortgage or any Loan Documents on any of the Mortgaged Property or
substitute a property for a Mortgaged Property or alter in any
material respect any provision of the Mortgage or any other Loan
Document unless with respect to this clause (B), (i) the Trustee
has obtained, at the expense of the Borrowers, a
Nondisqualification Opinion with respect to such modification,
waiver or amendment or (ii) the consent of all of the
Certificateholders affected by such modification, waiver or
amendment and each Class junior in right to payment of such Class
is obtained. The Servicer shall notify in writing the Rating
Agency promptly upon effecting such modification, waiver or
amendment.
(e) Notwithstanding the provisions of Section 3.7(a)
hereof, the Servicer shall not, on behalf of the Trust Fund, obtain
title to a Mortgaged Property as a result or in lieu of foreclosure
or other legal process in connection with a default, and shall not
otherwise acquire possession of, or take other action with respect
to, any Mortgaged Property, if, as a result of any such action, the
Trustee, on behalf of the Trust Fund, 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 the
Comprehensive Environmental Responsibility Cleanup and Liability
Act of 1980, as amended from time to time, or any applicable
comparable federal, state or local law, or a "discharger" or
"responsible party" thereunder, unless the Servicer has also
previously determined in accordance with Accepted Servicing
Practices, based on a report prepared in accordance with Section
3.7(f) hereof (a copy of which report, which shall include an
estimate of the cost of remediation to the extent that cost of
remediation can be estimated, shall be delivered to the Trustee),
that:
(i) such Mortgaged Property is in compliance
with applicable Environmental Laws or, if not, that
taking such actions as are necessary to bring the
Mortgaged Property in compliance therewith is reasonably
likely to produce a greater recovery on a present value
basis than not taking such actions;
(ii) there are no circumstances present at such
Mortgaged Property relating to the use, management or
disposal of any hazardous substances, hazardous
materials, hazardous wastes, or petroleum-based materials
for which investigation, testing, monitoring,
containment, clean-up or remediation could be required
under any federal, state or local law or regulation, or
that, if any such materials are present for which such
action could be required, taking such actions with
respect to the affected Mortgaged Property is reasonably
likely to produce a greater recovery on a present value
basis than not taking such actions; and
(iii) if the Servicer has so determined and has
so certified to the Trustee, based on satisfaction of the
criteria in clauses (i) and (ii) above, that it would be
in the best economic interest of the Trust Fund to take
any of the actions specified in clauses (i) or (ii)
above, and if the cost of taking such actions would be in
excess of $100,000, the Servicer has notified the
Trustee, setting forth in reasonable detail the reasons
for its determination, which, in turn, shall notify the
Holders of the Class A, Class B, Class C and Class D
Certificates of such proposed action, and the Trustee has
received and delivered to the Servicer written
instructions from all of the Holders of such Certificates
directing it to take such action and the Trustee has not
given the Servicer directions not to take such action
based upon the Trustee's reasonable opinion that there
would be a likelihood of its individual liability
resulting from such action against which the Trustee
would not receive indemnification hereunder, or, if
indemnified, that there would not be sufficient assets
available to fully pay the Trustee's damages, losses,
costs and expenses.
The cost of any such compliance, containment, clean-up or
remediation may be withdrawn from the Distribution Account by the
Servicer as an expense of the Trust Fund to the extent not
otherwise provided for under the Loan Documents. The Servicer,
consistent with Accepted Servicing Practices, shall pursue any
remedies available under the Loan Documents and any recoveries in
connection therewith shall be deposited in the Distribution
Account. The Servicer shall have no obligation hereunder to expend
any of its own funds to pursue any such remedies.
(f) The environmental site assessments contemplated by
Section 3.7(e) hereof shall be prepared by any Independent Person
who regularly conducts environmental site assessments for
purchasers of comparable properties and who has had not less than
five years experience in such matters, as determined by the
Servicer in a manner consistent with Accepted Servicing Practices.
The cost of preparation of any environmental assessment shall be
reasonable for such reports and shall be advanced by the Servicer
as an expense of the Trust Fund, unless the Servicer determines
that such Advance would be a Nonrecoverable Advance and the
Servicer shall be reimbursed therefor as a Servicing Advance
pursuant to Section 3.3(e)(iv) hereof.
(g) If the Servicer determines, pursuant to Section
3.7(e) hereof, that taking such actions as are necessary to bring
any Mortgaged Property with respect to which foreclosure is
contemplated into compliance with applicable Environmental Laws, or
taking such actions with respect to the containment, clean-up,
removal or remediation of hazardous substances, hazardous
materials, hazardous wastes, or petroleum-based materials affecting
any such Mortgaged Property, is not reasonably likely to produce a
greater recovery on a present value basis than not taking such
actions, and the Servicer has not received contrary directions from
Certificateholders or the Trustee as set forth in Section
3.7(e)(iii) directing the Servicer not to take such actions, then
the Servicer shall take such actions consistent with Accepted
Servicing Practices as it deems to be in the best economic
interests of the Trust Fund, including without limitation releasing
the lien of the Mortgage with respect to the affected Mortgaged
Property if it shall have either (i) obtained a Nondisqualification
Opinion or (ii) if such opinion cannot be obtained, the consent
from all of the Holders of Class A, Class B, Class C and Class D
Certificates (in connection with which the Trustee shall forward to
such Certificateholders written notice from the Servicer that the
Nondisqualification Opinion could not be obtained). Any
expenditure made by the Servicer pursuant to this paragraph (g)
shall constitute a Servicing Advance. Neither the Trustee nor the
Servicer shall be obligated to take any action or not take any
action pursuant to this paragraph (g) at the direction of such
Certificateholders unless such Certificateholders agree to
indemnify the Trustee or the Servicer, as the case may be, with
respect to such action or inaction.
Section 3.8 Trustee to Cooperate; Release of Items in
Mortgage File. From time to time and as appropriate for the
servicing or foreclosure of any Mortgaged Property, the Trustee (or
the Mortgage Custodian unless otherwise notified by the Trustee)
shall, upon request of the Servicer and delivery to the Trustee (or
the Mortgage Custodian) of a trust receipt in the form of Exhibit
K hereto, release or cause to be released any items from the
Mortgage File to the Servicer. Upon receipt of written
instructions executed by a Servicing Officer, substantially in the
form of Exhibit L hereto, the Trustee shall execute such documents
furnished to it as are set forth in such instructions as necessary
to the prosecution of any such proceedings. Such trust receipt
shall obligate the Servicer to return such items to the Trustee (or
the Mortgage Custodian) when the need therefor by the Servicer no
longer exists.
Section 3.9 Title and Management of Foreclosed Property.
(a) In the event that title to any Mortgaged Property is acquired
by the Servicer for the benefit of Certificateholders in
foreclosure or by deed-in-lieu of foreclosure or other legal
process in connection with a default, the deed or certificate of
sale shall be taken in the name of the Trustee, or its nominee, on
behalf of the Certificateholders. The Servicer shall consult with
counsel to determine when an Acquisition Date shall be deemed to
occur under the REMIC Provisions with respect to any Mortgaged
Property. The Servicer, on behalf of the Trust Fund, shall sell
any Foreclosed Property as expeditiously as possible, but in all
events within the time period, and subject to the conditions, set
forth in Section 10.2. Subject to Section 10.2, the Servicer shall
manage, conserve, protect and operate each Foreclosed Property for
the Certificateholders solely for the purpose of its prompt
disposition and sale. Any expenditure made by the Servicer
pursuant to this Section 3.9(a) shall constitute a Servicing
Advance.
(b) If the Trust Fund acquires any Foreclosed Property,
the Servicer shall have full power and authority, subject only to
the specific requirements and prohibitions of this Agreement, to do
any and all things in connection therewith as are consistent with
Accepted Servicing Practices and the REMIC Provisions and,
consistent therewith, shall advance from its own funds, which
amounts shall be Servicing Advances, to the extent that Foreclosure
Proceeds are insufficient for such purpose:
(i) all insurance premiums due and payable in
respect of such Foreclosed Property;
(ii) all Impositions in respect of such
Foreclosed Property that could result or have resulted in
the imposition of a lien thereon;
(iii) all ground rental payments, if applicable,
with respect to the Foreclosed Property; and
(iv) all costs and expenses necessary to
maintain, operate (on an interim basis), and sell such
Foreclosed Property;
if, but only if, the Servicer would make such an advance if it
owned such Foreclosed Property, and if such advance would not be a
Nonrecoverable Advance.
(c) The Servicer may, and shall, to the extent required
pursuant to Article X hereof, contract with any Independent
Contractor for the operation and management of any Foreclosed
Property, provided that:
(i) the terms and conditions of any such
contract shall not be inconsistent with this Agreement;
(ii) any such contract shall require, or shall
be administered to require, that the Independent
Contractor (A) pay all costs and expenses incurred in
connection with the operation and management of such
Foreclosed Property and otherwise comply with the
provisions of Section 856 of the Code (and the
regulations thereunder, and in particular Treasury
Regulation Section 1.856-4(b)(5)) and (B) deposit on a
daily basis all amounts payable to the Trust Fund in
accordance with the contract between the Servicer on
behalf of the Trustee and the Independent Contractor in
an Eligible Account;
(iii) none of the provisions of this Section
3.9(c) relating to any such contract or to actions taken
through any such Independent Contractor shall be deemed
to relieve the Servicer of any of its duties and
obligations to the Trustee on behalf of
Certificateholders with respect to the operation and
management of any such Foreclosed Property; and
(iv) the Servicer shall be obligated with
respect thereto to the same extent as if it alone was
performing all duties and obligations in connection with
the operation and management of such Foreclosed Property.
The 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
Servicer by such Independent Contractor, and nothing in this
Agreement shall be deemed to limit or modify such indemnification.
Any expenditure made by the Servicer pursuant to this Section
3.9(c) shall constitute a Servicing Advance.
Section 3.10 Sale of Foreclosed Properties. (a) The
Servicer may offer to sell to any Person any Foreclosed Property if
and when the Servicer determines, consistent with Accepted
Servicing Practices, that such a sale would be in the best economic
interests of the Trust Fund, but shall, in any event, so offer to
sell any Foreclosed Property no later than the time determined by
the Servicer to be sufficient to result in the sale of such
Foreclosed Property on or prior to the date specified in Section
10.2 hereof. The Servicer shall give the Trustee not less than
five days' prior written notice of its intention to sell any
Foreclosed Property, and shall accept the highest cash bid received
from any Person (which Person shall certify in its bid as to
whether it is an Interested Person) for any Foreclosed Property in
an amount at least equal to the sum of:
(i) the Allocated Loan Amount allocated to the
Foreclosed Property;
(ii) all unpaid interest accrued thereon,
including Default Interest; and
(iii) all unpaid Servicing Compensation,
Advances and expenses.
In the absence of any such bid, the Servicer shall accept the
highest cash bid received from any Person other than the Trustee
that is determined to be a fair price for such Foreclosed Property
by the Servicer, if the highest bidder is a Person other than an
Interested Person, or by the Trustee (as set forth in Section
3.10(b) hereof), if the highest bidder is an Interested Person. In
the absence of any cash bid determined to be fair as aforesaid, the
Servicer shall offer the affected Foreclosed Property for sale to
any Person, other than an Interested Person, in a commercially
reasonable manner for a period of not less than 10 or more than 30
days, and shall accept the highest cash bid received therefor in
excess of the highest bid previously submitted. If no such bid is
received, any Interested Person may resubmit its original bid, and
the Servicer shall accept the highest outstanding cash bid,
regardless of from whom received, provided that, if an Interested
Person is the Servicer, a bid by such Interested Person shall be
subject to the provisions of Section 3.10(b) hereof. No Interested
Person shall be obligated to submit a bid to purchase any
Foreclosed Property, and notwithstanding anything to the contrary
herein, neither the Trustee, in its individual capacity, nor any of
its Affiliates may bid for or purchase any Foreclosed Property
pursuant hereto. Neither the Borrowers nor the Depositor shall be
permitted to purchase any Foreclosed Property.
The Servicer shall not be obligated by the foregoing
paragraph or otherwise to accept the highest cash bid if the
Servicer determines, in accordance with Accepted Servicing
Practices, that rejection of such bid would be in the best
interests of the Certificateholders. In addition, the Servicer may
accept a lower bid if it determines, in accordance with Accepted
Servicing Standards, that the prospective buyer making the lower
bid is more likely to perform its obligations, or the terms offered
by the prospective buyer making the lower bid are more favorable.
The Servicer shall in no event sell a Foreclosed Property other
than for cash. In the event that the Servicer determines with
respect to any Foreclosed Property that the bids that are being, or
that are likely to be, made with respect thereto are not or would
not be in the best interests of the Certificateholders and that the
end of the two-year period referred to in Section 10.2(b) hereof
with respect to such Foreclosed Property is approaching, the
Servicer shall seek an extension of such two-year period in the
manner described in Section 10.2(b) hereof.
(b) In determining whether any bid received from an
Interested Person represents a fair price for any Foreclosed
Property, the Trustee shall rely on the opinion of an Appraiser
retained by the Trustee at the expense of the Trust Fund (as a
Liquidation Expense). In determining whether any bid constitutes
a fair price for any Foreclosed Property, the Trustee shall take
into account, and any Appraiser shall be instructed to take into
account, as applicable, among other factors, the period and amount
of any delinquency on the Mortgage Loan, the financial standing of
the tenants of the affected Mortgaged Property, the physical
condition of the affected Mortgaged Property, the state of the
local economy and the Trust Fund's obligation to dispose of any
Foreclosed Property within the time period specified in Section
10.2 hereof.
(c) Subject to the provisions of Sections 3.10 and 10.2
hereof, the Servicer shall act on behalf of the Trust Fund in
negotiating and taking any other action necessary or appropriate in
connection with the sale of any Foreclosed Property, including the
collection of all amounts payable in connection therewith. Any
sale of any Foreclosed Property shall be without recourse to the
Trustee, the Depositor, the Servicer, the Trust Fund, or any other
Person, and if consummated in accordance with the terms of this
Agreement, neither the Servicer, the Depositor nor the Trustee
shall have any liability to any Certificateholder with respect to
the purchase price thereof or accepted by the Servicer or the
Trustee.
(d) Amounts expended by the Servicer pursuant to this
Section 3.10 hereof shall constitute Servicing Advances.
Section 3.11 Servicing Compensation. (a) The Servicer
shall be entitled to retain or, if not retained, to withdraw from
the Distribution Account (as an amount deposited therein in error)
as servicing compensation its Servicing Fee out of each payment on
the Mortgage Loan. To the extent that any Servicing Fee for any
month is not paid by the Servicer Remittance Date, such Servicing
Fee shall constitute an Interest Advance. In addition, the
Servicer shall be entitled to receive, as additional servicing
compensation, to the extent permitted by applicable law and the
Mortgage Notes, any late payment charges (other than Default
Interest), assumption fees, loan modification fees, extension fees,
loan service transaction fees, beneficiary statement charges, or
similar items. The Servicer shall be entitled to direct the Paying
Agent to pay on any Distribution Date the Servicing Fee and any
such other amounts payable to the Servicer by withdrawal from the
Certificate Account (as an amount deposited therein in error) to
the extent that payments have been received with respect to the
Mortgage Loan. The Servicer shall be required to pay all expenses
incurred by it in connection with its servicing activities
hereunder (including, but not limited to, the fees and expenses of
any Sub-Servicer required to be paid by the Servicer pursuant to
the related Sub-Servicing Agreement, bank transfer charges, and, if
applicable, the blanket fidelity bond and errors and omissions
policy required by Section 3.5 hereof) and shall not be entitled to
reimbursement therefor except as specifically provided in this
Agreement.
(b) The Special Servicer shall be entitled with respect
to each Special Servicing Period to the Special Servicing Fee,
which shall be payable from amounts on deposit in the Distribution
Account as set forth in Section 3.3(e)(vii) hereof. To the extent
that any Special Servicing Fee for any month is not paid by the
Servicer Remittance Date, such Special Servicing Fee shall
constitute a Servicing Advance. The Special Servicer shall pay all
expenses incurred by it in connection with its routine servicing
activities hereunder and shall not be entitled to reimbursement
therefor except as specifically permitted by this Agreement.
(c) In addition to other Servicer and Special Servicer
compensation provided for in this Agreement and not in lieu
thereof, the Special Servicer shall be entitled to the REO
Disposition Fee, payable out of the related Liquidation Proceeds or
proceeds of any sale of the Mortgaged Loan after a Mortgaged Event
of Default and acceleration of the Mortgage Notes.
(d) No transfer, sale, pledge or other disposition of
the Servicer's right to receive all or any portion of the Servicing
Compensation or other amounts which the Servicer is entitled to
receive hereunder shall be made, and any such attempted transfer,
sale, pledge or other disposition shall be void, unless such
transfer is made to a successor servicer or a successor Special
Servicer in connection with the assumption by such successor
servicer of the duties hereunder pursuant to Section 7.5 hereof and
all (and not a portion) of the Servicing Compensation are
transferred to such successor servicer.
(e) The Servicer, Special Servicer and Trustee shall
be entitled to reimbursement from the Trust Fund for the costs and
expenses incurred by them in the performance of their duties under
this Agreement which are "unanticipated expenses incurred by the
REMIC" within the meaning of Treasury Regulations Sections 1.860G-
1(b)(3)(iii) and 1.860G-2(c)(2). Such expenses shall include, by
way of example, environmental assessments and appraisals required
as a condition to foreclosure and expenses incurred in soliciting
Certificateholder input upon the occurrence and continuance of a
Mortgage Event of Default.
(f) Subject to the requirements of Section 3.17 hereof,
no provision of this Agreement or of the Certificates shall require
the Servicer, the Special Servicer or the Trustee to expend or risk
its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or thereunder, or in the
exercise of any of its rights or powers, if in the good faith
business judgment of the Servicer, the Special Servicer or the
Trustee, as the case may be, repayment of such funds would not be
ultimately recoverable from late payments, Insurance Proceeds, Net
Liquidation Proceeds and other collections on or in respect of the
Mortgage Loan, or from adequate indemnity against such risk or
liability from other assets comprising the Trust Fund.
Section 3.12 Reports to the Trustee; Distribution and
Other Account Statements. (a) Not later than 20 days after each
Distribution Date, the Servicer shall forward to the Trustee, the
Rating Agency and the Depositor a statement, setting forth the
status of the Distribution Account, the Default Interest Account
and of all Accounts established under the Mortgage and the Cash
Collateral Agreement (to the extent such information is received
from the Collateral Agent) as of the close of business on the
related Distribution Date or Due Date (as applicable) showing, for
the period covered by such statement, the aggregate of deposits
into and withdrawals from the Distribution Account and the Default
Interest Account and the aggregate of deposits into and withdrawals
from such Accounts in accordance with the Mortgage and the Cash
Collateral Agreement (to the extent such information is received
from the Collateral Agent). Copies of such statement shall be
provided by the Trustee to any Certificateholder upon request to
the Trustee, provided the Trustee has received such statement.
(b) The Servicer shall deliver to the Trustee no later
than 11:00 a.m. two Business Days prior to each Distribution Date,
(i) the Servicer Remittance Report with respect to such
Distribution Date and (ii) a written statement of required Interest
Advances for such Distribution Date and total Advances outstanding
as of such Distribution Date. The Trustee shall be entitled to
rely conclusively on and shall not be responsible for the content
or accuracy of any information provided to it by the Servicer or
the Special Servicer pursuant to this Agreement. The Servicer and
the Special Servicer shall have no liability with respect to any
information contained in the Servicer Remittance Report to the
extent such information (A) was not prepared by the Servicer or the
Special Servicer or (B) was prepared by the Servicer based on
information provided by a third party (other than a Sub-Servicer or
other agent of the Servicer), provided that at the time of delivery
the Servicer had no actual knowledge that any such information was
incorrect in any material respect.
(c) The Servicer shall deliver to the Trustee no later
than 11:00 a.m. two Business Days after the occurrence of an Event
of Default (other than an Event of Default described in Section 7.1
(g) hereof) or a Mortgage Event of Default, written notice thereof
including the nature of such Event of Default or Mortgage Event of
Default.
Section 3.13 Annual Statement as to Compliance. The
Servicer will deliver to the Trustee and the Depositor, on or
before April 30 of each year, beginning April 30, 1997, an
Officer's Certificate stating as to each signer thereof, that (a)
a review of the activities of the Servicer during the preceding
calendar year (or during the period from the Closing Date until the
end of the preceding calendar year in the case of the first such
certificate) and of performance under this Agreement has been made
under such officer's supervision; (b) to the best of such officer's
knowledge, based on such review, the Servicer has fulfilled all of
its obligations under this Agreement in all material respects
throughout such period, or if there has been a default in the
fulfillment of any such obligation, specifying each such default
known to such officer and the nature and status thereof; and (c)
whether the Servicer has received any notice regarding
qualification or challenging the status of the Trust REMIC as a
REMIC from the Internal Revenue Service or any other governmental
agency or body. Copies of such statement shall be provided by the
Servicer to the Rating Agency, the Trustee and to any Holder of
Certificates upon request, or by the Trustee at the Servicer's
expense if the Servicer shall fail to provide such copies and a
Responsible Officer of the Trustee is aware of such request and
that the Servicer has not so provided copies, provided the Trustee
has received such statement. If the long-term or short-term
unsecured debt obligations of the Servicer have been rated by the
Rating Agency, such statement shall be accompanied by a statement
of such rating or ratings, or if such obligations are not rated by
the Rating Agency, such statement shall be accompanied by a
statement of all the outstanding ratings of the Servicer's
obligations from any other rating agency.
Section 3.14 Annual Independent Public Accountants'
Servicing Report. On or before April 30 of each year, beginning
April 30, 1997, the Servicer, at its expense, shall cause a firm of
nationally recognized independent public accountants that is a
member of the American Institute of Certified Public Accountants to
furnish a statement to the Trustee, the Depositor and the Rating
Agency to the effect that such firm has examined certain documents
and records relating to the servicing of mortgage loans
substantially similar to the Mortgage Loan for the preceding
calendar year (or during the period from the Closing Date until the
end of the preceding calendar year in the case of the first such
certificate) and that, on the basis of such examination conducted
in all material respects substantially in compliance with generally
accepted auditing standards and the Uniform Single Audit Program
for Mortgage Bankers or the Audit Program for Mortgages serviced
for FHLMC, such firm is of the opinion that such servicing during
such period has been conducted in compliance with agreements
substantially similar to this Agreement except for such exceptions
that, in the opinion of such firm, generally accepted auditing
standards and the Uniform Single Audit Program for Mortgage Bankers
or the Audit Program for Mortgages serviced for FHLMC requires it
to report, in which case such exceptions shall be set forth in such
statement. Copies of such statement shall be provided by the
Trustee to Certificateholders upon written request.
Section 3.15 Access to Certain Documentation Regarding
the Mortgage Loan. Upon reasonable advance notice, the Servicer
will provide reasonable access during its normal business hours at
its offices to the Trustee to all information and documentation in
its possession with respect to the Trust Fund and to each
Certificateholder which is a savings and loan association, bank or
insurance company to certain reports and to information and
documentation (other than information or documentation which is
confidential or proprietary) regarding the Mortgage Loan sufficient
to permit such Certificateholder, the Office of Thrift Supervision,
the FDIC, the supervisory agents and the examiners of any such
entity to comply with applicable regulations of the Office of
Thrift Supervision or other regulatory authorities with respect to
investment in the Certificates. Any such reports, information or
documentation shall also be available to any other
Certificateholders who so request. The failure of the Servicer to
provide access pursuant to this Section 3.15 shall not constitute
a breach by the Servicer hereunder if the Servicer determines in
its reasonable discretion that such access would breach the
Servicer's confidentiality requirements or applicable securities
laws.
The Servicer shall provide any inquiring savings and loan
association, bank or insurance company desiring to purchase a
Certificate with information as to the location of the Mortgaged
Properties and, at the reasonable request of such association, bank
or insurance company, shall, to the extent reasonably available to
the Servicer, furnish to such inquiring entity specific information
sufficient to enable it to determine the extent, if any, to which
the Mortgaged Properties (x) are outside such entity's regular
lending area or normal lending territory (as such terms are defined
in the applicable regulations of such entity's regulatory
authority) and (y) must be included in percentage of assets
limitations or other restricted investment categories to which such
entity may be subject. Any such information shall also be
available to any other Certificateholders who so request. The
requesting parties shall pay the reasonable fees of the Servicer
and out-of-pocket expenses incurred by the Servicer in connection
with any request under this Section 3.15. The Servicer and the
Special Servicer shall have no liability with respect to any such
information to the extent such information (i) was not prepared by
the Servicer or (ii) was prepared by the Servicer based on
information provided by a third party (other than a Sub-Servicer or
other agent of the Servicer), provided that at the time of delivery
the Servicer had no actual knowledge that any such information was
incorrect in any material respect.
Section 3.16 Inspections. The Servicer shall inspect or
cause to be inspected each Mortgaged Property at such times and in
such manner as are consistent with Accepted Servicing Practices.
Section 3.17 Advances. (a) On or before each Servicer
Advance Date, the Servicer shall make any necessary Interest
Advance by depositing in the Distribution Account pursuant to
Section 3.3(d)(v) hereof an amount equal to the amount of the
Interest Advance.
(b) It is understood that the obligation of the
Servicer to make Advances is mandatory and shall continue to apply
following any modification of the Mortgage Loan pursuant to Section
3.7(d) hereof to the extent that the payments due on the Mortgage
Loan, as modified, are not made, and through any court appointed
stay period or similar payment delay resulting from any insolvency
of a Borrower or related bankruptcy, notwithstanding any other
provision of this Agreement, other than the requirement of
recoverability pursuant to the definition of a Nonrecoverable
Advance, and shall continue, subject to such requirement of
recoverability until the earliest of (i) the Final Certificate
Distribution Date, (ii) the payment in full of the Mortgage Loan
upon prepayment or in accordance with the original terms thereof or
as amended or restructured in accordance herewith, in bankruptcy or
otherwise or (iii) the date on which all Mortgaged Properties
become Liquidated Mortgaged Properties; provided, however, that in
no event shall the Servicer be required to advance any
Nonrecoverable Advance.
(c) With respect to the Mortgage Loan (which, for this
purpose, shall not include any Foreclosed Property), the Servicer,
in addition to making Interest Advances, shall advance an amount,
which amount shall be a Servicing Advance, on behalf of the
Borrowers, if (i) the Borrowers have defaulted on an obligation to
pay such amount pursuant to the Mortgage Notes or Mortgage, (ii)
the Servicer has reasonably determined that payment of such amount
is reasonably necessary to protect the Trust Fund's security
interest in the Mortgaged Property and (iii) such amount will not
be a Nonrecoverable Advance. In the event that the Servicer
proposes to make a Servicing Advance pursuant to this Section 3.17
other than for taxes, insurance premiums required by the Mortgage
to be maintained by the Borrowers, or other expenses which, if not
paid, would directly and adversely affect the Mortgagee's security
interest in the Mortgaged Property, the Servicer shall obtain a
Nondisqualification Opinion (the cost of which shall be a Servicing
Advance) with respect to such Servicing Advance, and shall require
the Borrowers to reimburse the amount of such Servicing Advance.
(d) In the event that the Servicer fails to make an
Interest Advance required to be made pursuant to this Agreement on
or before 4:00 p.m., New York time, on the Servicer Advance Date,
such failure shall constitute an Event of Default. Upon such a
failure, the Trustee shall deposit the amount of such Interest
Advance in the Certificate Account no later than 10:00 am on the
Business Day next following such Servicer Advance Date.
Notwithstanding the foregoing, the Servicer has the right, which
shall be available no more than one time in any 12-month period, to
cure such an Event of Default if the Servicer notifies the Trustee
by facsimile transmission by 9:30 a.m. on the related Distribution
Date that it intends to make such Interest Advance by 10:00 a.m. on
such Distribution Date and makes such Interest Advance by such
time, and in the event that the Servicer fails to make such
Interest Advance by 10:00 a.m., the Trustee is required immediately
to make such Interest Advance and to notify the Servicer that its
failure constitutes an Event of Default hereunder. In addition, in
the event that the Servicer fails to make a Servicing Advance
required to be made pursuant to this Agreement, the Trustee shall
make such Servicing Advance promptly upon assuming the duties of
the Servicer in accordance with Section 7.5(a) hereof. The Trustee
shall be entitled to reimbursement for each Advance made by it from
the same sources as those from which the Servicer would have been
entitled to be reimbursed had the Servicer made such Advance (and
with priority over any and all amounts then or thereafter
reimbursable to the Servicer).
(e) In no event shall the Servicer (or, or as described
in clause (d) above, the Trustee) be obligated to make any Advance
with respect to Balloon Payments or to make any Advance which would
constitute a Nonrecoverable Advance; provided, however, at the
option of the Servicer and in the Servicer's sole discretion, the
Servicer may make a Servicing Advance notwithstanding that such
Servicing Advance would constitute a Nonrecoverable Advance, if the
Servicer provides to the Trustee an Officer's Certificate stating
that the Servicer has determined that in its good faith judgment
such Servicing Advance most likely would increase Liquidation
Proceeds over the amount of Liquidation Proceeds that would have
been realized if such expense were not incurred.
(f) Notwithstanding the foregoing obligations of the
Trustee to make any Advance required to have been made by the
Servicer but not so made, the Trustee shall have the same right,
subject to the same standard, as the Servicer to determine that
such Advance, if made, would constitute, or any Advance previously
made constitutes, a Nonrecoverable Advance, and the right to refuse
to make such a Nonrecoverable Advance and to reimbursement of any
such Nonrecoverable Advance (to the extent made) with interest
thereon at the Advance Rate.
(g) The Servicer hereby agrees that upon the failure
of the Borrowers to pay the Mortgage Recording Taxes, or any
portion thereof, the Servicer shall make the Mortgage Recording Tax
Advance within ten Business Days of receipt of notice from the
Trustee that such Mortgage Recording Tax Advance is required.
(h) The rights of the Servicer or the Trustee to be
reimbursed for all Advances and the Advance Interest Amount shall
be an obligation of the Trust Fund reimbursable in accordance with
Sections 3.3(e)(iii), 3.3(e)(iv) and 3.3(e)(v) hereof and shall,
subject to the limitations of this Agreement as to the timing and
source of such reimbursement, be prior to the rights of
Certificateholders to receive distributions on their Certificates.
Section 3.18 Reports of Foreclosures of Mortgaged
Property. Each year beginning in 1996, the Servicer shall prepare
and deliver to the Trustee in a timely manner the reports of
foreclosures and abandonments of any Mortgaged Property required by
Section 6050J, 6050P and 6050 of the Code.
Section 3.19 Realization on Mortgage Collateral
Security. In connection with the enforcement of the rights of the
Trustee, the Servicer and the Mortgage Custodian under the Mortgage
Notes and the Mortgage, the Servicer and the Trustee shall consult
with counsel to determine how best to enforce such rights in a
manner consistent with the REMIC Provisions and shall not, based on
a Nondisqualification Opinion addressed to the Trustee (the cost of
which shall be reimbursed pursuant to Section 3.3(e) hereof), take
any action that could result in the failure of the Trust REMIC to
qualify as a REMIC while any Regular Interests are outstanding,
unless such action has been approved by a vote of 100% of each
Class of Certificates in connection with which the possibility of
disqualification shall be disclosed. Any expenditure made by the
Servicer pursuant to this Section 3.19 shall constitute a Servicing
Advance.
ARTICLE IV
PAYMENTS AND STATEMENTS TO THE CERTIFICATEHOLDERS
Section 4.1 Distributions. (a) On each Distribution
Date, the Paying Agent shall make distributions in the following
order of priority, in each case to the extent of the amount
deposited by the Trustee in the Certificate Account pursuant to
Section 3.3 hereof, other than Voluntary Prepayments, which shall
be distributed in accordance with Sections 4.1(b) hereof:
(i) to the Holders of the Class A, any
outstanding Interest Shortfalls owed to Holders of such
Class;
(ii) to the Holders of the Class A
Certificates, interest accrued on the outstanding Class
A Certificate Balance (not including Default Interest on
the underlying Mortgage Note) during the related Interest
Accrual Period at the Class A Certificate Rate;
(iii) to the Holders of the Class B
Certificates, any outstanding Interest Shortfalls owed to
Holders of such Class;
(iv) to the Holders of the Class B
Certificates, interest accrued on the outstanding Class B
Certificate Balance (not including Default Interest on
the underlying Mortgage Note) during the related Interest
Accrual Period at the Class B Certificate Rate;
(v) to the Holders of the Class C
Certificates, any outstanding Interest Shortfalls owed to
Holders of such Class;
(vi) to the Holders of the Class C
Certificates, interest accrued on the outstanding Class C
Certificate Balance (not including Default Interest on
the underlying Mortgage Note) during the related Interest
Accrual Period at the Class C Certificate Rate;
(vii) to the holders of the Class D
Certificates, any outstanding Interest Shortfalls owed to
holders of such Class;
(viii) to the holders of the Class D
Certificates, interest accrued on the outstanding Class
D Certificate Balance (not including Default Interest on
the underlying Mortgage Note) during the related Interest
Accrual Period at the Class D Certificate Rate;
(ix) to the Holders of the Class R
Certificates, the interest earned on the funds on deposit
in the Distribution Account;
(x) to the Holders of the Class A
Certificates, principal equal to the lesser of (A) the
outstanding Class A Certificate Balance and (B) the sum
of the Balloon Payments, Unscheduled Payments and any
other amounts paid on or with respect to the Mortgage
Loan and available for distribution on such Distribution
Date;
(xi) after the Class A Certificate Balance has
been reduced to zero, to the Holders of the Class B
Certificates, principal equal to the lesser of (A) the
outstanding Class B Certificate Balance and (B) the sum
of the Balloon Payments, Unscheduled Payments and any
other amounts paid on or with respect to the Mortgage
Loan and available for distribution on such Distribution
Date;
(xii) after the Class B Certificate Balance has
been reduced to zero, to the Holders of the Class C
Certificates, principal equal to the lesser of (A) the
outstanding Class C Certificate Balance and (B) the sum
of the Balloon Payments, Unscheduled Payments and any
other amounts paid on or with respect to the Mortgage
Loan and available for distribution on such Distribution
Date; and
(xiii) after the Class C Certificate Balance has
been reduced to zero, to the holders of the Class D
Certificates, principal equal to the lesser of (A) the
outstanding Class D Certificate Balance and (B) the sum
of the Balloon Payments, Unscheduled Payments and any
other amounts paid on or with respect to the Mortgage
Loan and available for distribution on such Distribution
Date; and
(xiv) after the Class D Certificate Balance has
been reduced to zero, to the Holders of the Class R
Certificates, the balance, if any, including any interest
earned on the funds on deposit in the Distribution
Account.
(b) On each Distribution Date, the Paying Agent shall
make distributions of the amount of any Voluntary Prepayment paid
by the Borrowers on the Mortgage Loan and deposited in the
Certificate Account pursuant to Section 3.3(d)(i) hereof during the
related Collection Period, as follows: first, to the Holders of
the Class A Certificates until the Class A Certificate Balance has
been reduced to zero, then to the Holders of the Class B
Certificates until the Class B Certificate Balance has been reduced
to zero, then to the Holders of the Class C Certificates until the
Class C Certificate Balance has been reduced to zero, and then to
the Holders of the Class D Certificates until the Class D
Certificate Balance has been reduced to zero.
(c) On each Distribution Date, the Paying Agent shall
make distributions of the amount of any Default Interest paid by
the Borrowers on the Mortgage Notes and deposited in the Default
Interest Account pursuant to Section 3.3(k) hereof during the
related Collection Period, as follows: any such amount paid on the
A Note shall be distributed to the Holders of the Class A
Certificates; any such amount paid on the B Note shall be
distributed to the Holders of the Class B Certificates; any such
amount paid on the C Note shall be distributed to the Holders of
the Class C Certificates; and any such amount paid on the D Note
shall be distributed to the Holders of the Class D Certificates.
In each case, amounts distributed to Holders of a Class of
Certificates shall include income earned with respect to amounts
deposited in the Default Interest Account with respect to such
Class of Certificates.
(d) Distributions on the Certificates on each
Distribution Date shall be made to each Certificateholder of record
on the related Record Date (other than as provided in Section 9.1
hereof respecting the final distribution), by check mailed to such
Certificateholder at the address appearing in the Certificate
Register, or upon written request by a Certificateholder (other
than a Class R Certificateholder) holding Certificates exceeding
$5,000,000 initial Certificate Balance delivered at least five
Business Days prior to the related Record Date, by wire transfer to
a bank account maintained in the United States, or by such other
means of payment as such Certificateholder and the Paying Agent
shall agree. Distributions on each Class of Certificates shall be
made pro rata among all Holders of Certificates of such Class based
on each such Holder's Percentage Interest.
(e) If the Servicer receives notice of prepayment of
any Mortgage Note from the Borrowers in accordance with the
Mortgage Notes, the Servicer shall notify the Trustee and the
Trustee shall give notice of the intended prepayment of the
affected Certificates to the Holders thereof in accordance with
Section 11.6 hereof not less than 15 days before the Distribution
Date on which such prepayment, if received, will be distributed to
such Holders, specifying the amount of such prepayment.
Section 4.2 Statements to Certificateholders. (a)
Based on information provided to the Trustee by the Servicer and
the Collateral Agent pursuant to this Agreement (and with respect
to the information set forth in clauses (xii), (xiii) and (xiv)
below, to the extent received by the Trustee from the Borrowers),
no later than 9:00 a.m. two Business Days prior to each
Distribution Date, the Trustee shall prepare, or cause to be
prepared, and mail not later than each Distribution Date to the
Depositor, the Rating Agency, the Paying Agent, the Servicer, the
Borrowers, the Placement Agent and each Certificateholder of each
Class of Certificates a statement in respect of such Distribution
Date setting forth to the extent applicable to such Class:
(i) For each Class of Certificates, (A) the
amount of the distribution from the Certificate Account
allocable to principal and (B) separately identifying the
amount of Balloon Payments, Voluntary Prepayments, other
Principal Prepayments, prepayments resulting from events
of casualty or condemnation, Net Liquidation Proceeds or
Curtailments included therein and the amount of Default
Interest;
(ii) For each Class of Certificates, the amount
of the distribution from the Certificate Account
allocable to interest;
(iii) If the distribution to the
Certificateholders of any Class is less than the full
amount that would be distributable to such Holders if
there were sufficient amounts available therefor, the
amount of the shortfall, including Interest Shortfalls
allocable to such Class, and the allocation thereof
between interest and principal;
(iv) The amount of any Interest Advances by the
Servicer or the Trustee included in the amounts
distributed to the Certificateholders, the amount of any
Servicing Advances and Mortgage Recording Tax Advances by
the Servicer or the Trustee, and the aggregate amount of
unreimbursed Advances;
(v) The Class A, Class B, Class C and Class D
Certificate Balances after giving effect to the
distribution of principal on such Distribution Date;
(vi) The Mortgage Loan Principal Balance and
the Allocated Loan Amount as calculated by the Servicer
for each of the Mortgaged Properties as of such
Distribution Date;
(vii) The Class A, Class B, Class C and Class D
Percentage Interests for the following Distribution Date;
(viii) The number and aggregate Allocated Loan
Amount of Mortgaged Properties that have, during the
related Collection Period, been (A) the subject of any
event of default under the Mortgage (each such property
separately identified), and (B) in foreclosure, as of the
close of business on the last day of the immediately
preceding calendar month;
(ix) The amount of the Servicing Compensation
paid to the Servicer with respect to such Distribution
Date, showing separately the Servicing Fee, the Special
Servicing Fee and the REO Disposition Fee, for the most
recent period for which such information is available,
and the amount of the Trustee Fee paid to the Trustee;
(x) The book value of any Foreclosed Property
as of the close of business on the immediately preceding
Due Date;
(xi) The amount of funds in each of the
Accounts held under the Mortgage and the Cash Collateral
Agreement as of the end of the preceding month and the
amount of capital expenditures made during the preceding
month from funds in the Capital and TI Reserve Account;
(xii) The Net Operating Income (as defined in
the Mortgage) for each Mortgaged Property and for all of
the Mortgaged Properties on an aggregate basis during
each calendar quarter, and the Debt Service Coverage
Ratio with respect to the Mortgage Loan (and each Class
of Certificates) as of the last day of each calendar
quarter (in such form and to the extent that such
information has been provided to the Trustee by the
Borrowers) to be delivered on the third Distribution Date
following each such calendar quarter, except that with
respect to the fourth calendar quarter, to be delivered
on the fourth Distribution Date following such calendar
quarter;
(xiii) On the third Distribution Date during each
calendar quarter, a combined rent roll with respect to
the Mortgaged Properties, showing (in such form and to
the extent such information has been provided to the
Trustee by the Borrowers) the approximate percentage of
gross leasable area of each Mortgaged Property (and in
the aggregate) leased as of the last day of the preceding
calendar quarter, the approximate percentage of lease
roll-overs for each Mortgaged Property (and in the
aggregate) for the preceding calendar quarter, a summary
of new lease signings (including approximate square
footage occupied and designation of the tenant's
operations as national, regional or local) and lease
terminations for the preceding calendar quarter, the
current annual rent of each Mortgaged Property, the expi-
ration date of each lease, the various options, if any,
available to the tenant with respect to renewal
(including the amount of the rent in the event of
renewal), whether, to the Borrowers' knowledge, the
Mortgaged Property or any portion thereof has been sublet
and whether the Mortgaged Property or any portion thereof
is leased but vacant; and
(xiv) Notice of any material changes affecting
the operations or finances of any Mortgaged Property (in
such form and to the extent that such information has
been provided to the Trustee by the Borrowers).
Each amount set forth pursuant to clauses (i) and (ii) above shall
also be expressed as a dollar amount per Single Certificate. Each
such report to Certificateholders shall indicate if, and the extent
to which, to the knowledge of a Responsible Officer of the Trustee,
there exists an Event of Default or a Mortgage Event of Default.
The Trustee shall include copies of the Borrowers' quarterly
unaudited and annual audited financial statements with the reports
distributed by the Trustee next following delivery by the Servicer
to the Trustee of such financial statements.
(b) Each such statement referred to in clause (b) above
shall be mailed by the Trustee not later than each Distribution
Date to any beneficial owner of a Certificate that has previously
delivered to the Trustee of an Information Request executed by such
beneficial owner as well as Ownership Evidence. The Trustee shall
also mail a copy of such statement with respect to the immediately
preceding Distribution Date to any prospective purchaser of a
Certificate or beneficial interest therein that executes an
Information Request and is designated in writing by a
Certificateholder or beneficial owner. In addition to the
foregoing, upon the written request of a Certificateholder to the
Trustee (a) reports and other notices to Certificateholders (other
than holders of Certificated Certificates) under the Trust
Agreement will be delivered by the Trustee to such
Certificateholder at such address as set forth in such written
request, and (b) notices of (i) Events of Default and Mortgage
Events of Default will be delivered within two Business Days of the
occurrence of an Event of Default under Section 7.1(g), or within
two Business Days of receipt by the Trustee of written notice from
the Servicer pursuant to Section 3.12(c) or after a Responsible
Officer of the Trustee obtains actual knowledge of the occurrence
of an Event of Default or Mortgage Event of Default and (ii)
casualties, condemnations and Voluntary Prepayments by facsimile
transmission by the Trustee to such Certificateholder (including
holders of Certificated Certificates) at such facsimile number as
set forth in such written request.
(c) Each Information Request delivered pursuant to this
Section 4.2 shall be substantially in the form of Exhibit O hereto
and shall confirm that (i) the Person executing such Information
Request is either (A) a beneficial owner of a Certificate, (B) a
Holder of a Certificate or (C) a prospective purchaser of a
Certificate or a beneficial interest therein designated by a
beneficial owner or Certificateholder and (ii) the information
obtained as a result of such Information Request is to be used
solely in evaluating the investment by such Person in the
Certificate. The Person executing such Information Request shall
further agree that (i) it shall, and shall cause its directors,
officers and employees, agents, attorneys, accountants, financial
advisors and other representatives to, keep all materials obtained
as a result of such Information Request confidential and to use
reasonable efforts, if such material is not marked "Proprietary" or
"Confidential," and to use special efforts, if such material is so
marked, not, without the prior written consent of the Depositor and
the Borrowers, to disclose any information contained in such
materials in any manner whatsoever, in whole or in part; provided,
however, that the Person executing such an Information Request and
its representatives shall be permitted to disclose any such
information if required by law or any such information that is or
becomes generally available to the public and (ii) a monetary
remedy would not be adequate to compensate the Depositor and the
Borrowers for any violation of the agreement contained in clause
(i) of this sentence, and that the Depositor and the Borrowers
shall, in addition to any other remedies available to them at law
or in equity, be entitled to injunctive relief in connection with
any such violation.
(d) Additional information not otherwise distributed
to the Certificateholders under this Agreement regarding the Trust
Fund, including, without limitation, financial and property
information provided to the Servicer by the Borrowers, (i) shall
also be provided to the Rating Agency and (ii) shall be available
to the Certificateholders from the Servicer upon reasonable request
and upon payment by the Certificateholders of the Servicer's
reasonable fees and expenses in connection with providing such
information, provided that the Servicer shall not be required to
provide such additional information to the extent that it
reasonably believes that the provision thereof would expose it to
liability.
(e) Within 60 days following the end of each calendar
year, the Trustee shall prepare, or cause to be prepared, and mail
to each Person who at any time during the calendar year was a
Certificateholder (i) a statement containing the information set
forth in subclauses (a)(i)(A), (a)(ii), (a)(iii) and (a)(x) above,
for such calendar year or applicable portion thereof during which
such person was a Certificateholder, and (ii) such other customary
information as the Trustee deems necessary or desirable for
Certificateholders to prepare their federal, state and local income
tax returns. 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. Upon prior written request and the prior
payment of the costs and expenses to be incurred in connection
therewith, the Trustee will prepare such other reasonable reports
as may be requested in writing by any Holder of a Regular
Certificate.
Section 4.3 Rule 144A Information. Upon request of any
Holder of a Certificate or of any beneficial interest therein, if
the Trust Fund is at the time of such request not subject to the
reporting requirements of section 13 or 15(d) of the Exchange Act
with respect to the Trust Fund, the Trustee shall promptly furnish
Rule 144A Information to such Holder or to a prospective purchaser
of such Certificate designated by such Holder in order to permit
compliance by such Holder with Rule 144A in connection with the
resale of such Certificate by such Holder. The Trustee may place
a legend on any document included in such Rule 144A Information
stating that the Servicer and the Trustee are not responsible for
the contents of such document or for any error or misstatement made
therein. The Trustee may require payment by the Holder of such
Certificate of a reasonable fee for the furnishing of such Rule
144A Information.
Section 4.4 Additional Information. The specification
of information to be furnished by the Trustee to the
Certificateholders in Section 4.2 (and any other terms or
provisions of this Agreement requiring or calling for delivery or
reporting of information by the Trustee to Certificateholders)
shall not limit the Trustee in furnishing, and the Trustee is
hereby authorized to furnish, to Certificateholders and/or to the
public any other information (collectively, "Additional
Information") with respect to the Mortgage Loan, the Mortgaged
Properties or the Trust Fund as may be provided to it by the
Depositor or the Servicer or Special Servicer or gathered by the
Trustee in any investigation or other manner from time to time,
provided that (i) prior to any Event of Default, any such
Additional Information shall only be furnished with the consent or
at the request of the Depositor (except pursuant to clause (v)
below), (ii) the Trustee shall be entitled to indicate the source
of all information furnished by it, the Trustee may affix thereto
any disclaimer it deems appropriate in its sole discretion and
consistent with the terms of this Agreement, and may affix such
warnings as to the confidential nature and/or the uses of such
information as it may, in its sole discretion, determine, (iii) the
Trustee may notify Certificateholders of the availability of any
such information in any manner as it, in its sole discretion, may
determine, (iv) the Trustee shall be entitled (but not obligated)
to require payment from each recipient of a reasonable fee for, and
its out-of-pocket expenses incurred in connection with, the
collection and furnishing of any such Additional Information and
(v) provided that prior to an Event of Default, the Trustee shall
forward to the Depositor any requests for Additional Information
and shall not forward any such Additional Information without the
consent of the Depositor, the Trustee may, in its sole discretion,
furnish Additional Information to the Rating Agency, in any
instance, and to the Certificateholders and/or the public-at-large,
if it determines that the furnishing of such information would
assist in the valuation of Certificates or is required by
applicable law. Nothing herein shall be construed to impose upon
the Trustee any obligation or duty to furnish or distribute any
Additional Information to any Person in any instance, and the
Trustee shall neither have any liability for furnishing nor for
refraining from furnishing Additional Information in any instance.
The Trustee shall be entitled (but not required) to request and
receive direction from the Depositor as to the manner of delivery
of any such Additional Information, if and to the extent the
Trustee deems necessary or advisable, and to require that any
consent, direction or request given to it pursuant to this Section
4.4 be made in writing.
ARTICLE V
THE CERTIFICATES
Section 5.1 The Certificates. (a) The Preliminary
Statement hereto sets forth the Class designations, Certificate
Rates and original Certificate Balances for each Class of
Certificates. The Certificates shall be designated the "KRT
Origination Corp. Commercial Mortgage Pass-Through Certificates"
and shall in the aggregate evidence the entire beneficial ownership
of (i) the Trust REMIC and (ii) other than with respect to the
Class R Certificates, the right to receive Default Interest, to the
extent collected, on the related Mortgage Note.
(b) Interest on the Class A, Class B, Class C and Class
D Certificates shall accrue during each Interest Accrual Period at
the Class A, Class B, Class C and Class D Certificate Rates,
respectively, on the basis of a 360-day year consisting of twelve
30-day months, and shall be payable on the related Distribution
Date.
(c) The Class A, Class B, Class C and Class D
Certificates shall be issued in definitive, fully registered form
without coupons in substantially the respective forms set forth as
Exhibits A, B, C and D hereto. The Class A, Class B, Class C and
Class D Certificates shall be issuable and transferable in the
minimum denomination of $250,000 of original Certificate Balance
and integral multiples of $1,000 in excess thereof (except that one
Certificate in each such Class may be issued in a different
amount). The Class R Certificates shall be issued in definitive,
fully registered form without coupons in substantially the form set
forth as Exhibit R. The Class R Certificates shall each be
issuable as a single Certificate evidencing the entire residual
interest in the Trust REMIC.
(d) On the Closing Date, the Authenticating Agent or
the Trustee shall execute and deliver with respect to each Class of
Certificates (other than the Class R Certificates) (i) a Book-Entry
Certificate and/or (ii) Definitive Certificates, each having a
Certificate Balance as shall have been indicated to the Trustee by
the Depositor and having an aggregate Certificate Balance equal to
the initial Certificate Balance of such Class of Certificates.
(e) The Certificates shall be executed by manual or
facsimile signatures on behalf of the Authenticating Agent or the
Trustee by an authorized officer or signatory thereof.
Certificates bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures were
affixed, authorized to sign on behalf of the Authenticating Agent
or the Trustee shall bind the Trust Fund, notwithstanding that such
individuals or any of them have ceased to be so authorized after
the execution and delivery of such Certificates or did not hold
such offices or positions prior to the execution and delivery of
such Certificates. Each Certificate shall, on original issue, be
authenticated by the Trustee or the Authenticating Agent upon the
order of the Depositor upon delivery to the Trustee or the Mortgage
Custodian of the Mortgage File described in Section 2.1. No
Certificate shall be entitled to any benefit under this Agreement,
or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the
form provided for herein executed by an authorized officer of the
Trustee or the Authenticating Agent by manual signature, and such
certification upon any Certificate shall be conclusive evidence,
and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. The Certificates executed
by the Authenticating Agent or the Trustee and authenticated and
delivered by the Trustee or the Authenticating Agent to or upon the
order of the Depositor on the Closing Date shall be dated the
Closing Date. All other Certificates that are authenticated after
the Closing Date shall be dated the date of their authentication.
Section 5.2 Registration of Transfer and Exchange of
Certificates. (a) The Certificate Registrar shall cause to be
maintained in accordance with the provisions of Section 5.5 hereof
a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar shall
provide for the registration of the Certificates and of transfers
and exchanges of Certificates as herein provided. The Trustee
shall serve as the initial Certificate Registrar for the purpose of
registering transfers and exchanges of Certificates as herein
provided.
(b) No restrictions to transfer shall apply to the
transfer or registration of transfer of an Unlegended Definitive
Certificate to a transferee that takes delivery in the form of a
Definitive Certificate. By acceptance of a Legended Definitive
Certificate, whether upon original issuance or subsequent transfer,
each Holder of such a Certificate acknowledges the restrictions on
the transfer of such Certificate set forth in the Securities Legend
and agrees that it will transfer such a Certificate only as
provided herein.
The following restrictions shall apply with respect to
the transfer and registration of transfer of a Legended Definitive
Certificate to a transferee that takes delivery in the form of a
Definitive Certificate:
(i) The Certificate Registrar shall register
the transfer of a Legended Definitive Certificate if the
requested transfer is (x) to an affiliate (as defined in
Rule 144(a)(1) under the Securities Act) of the Depositor
or the Placement Agent, such affiliation to be evidenced
by the certificate of the Depositor or the Placement
Agent or (y) being made by a transferor who has provided
the Certificate Registrar with a Rule 144A Certificate in
the form of Exhibit F hereto.
(ii) The Certificate Registrar shall register
the transfer of a Legended Definitive Certificate if the
transferor has provided the Trustee with a Regulation S
Certificate in the form of Exhibit G hereto.
(iii) The Certificate Registrar shall register
the transfer of a Legended Definitive Certificate if (x)
the transferor has advised the Depositor and the Trustee
in writing that the Certificate is being transferred to
an Institutional Accredited Investor; and (y) prior to
transfer the transferor furnishes to the Certificate
Registrar and the Depositor a letter of the transferee
substantially in the form of Exhibit I hereto. In
addition, the Depositor or the Certificate Registrar may
as a condition of the registration of any such transfer
require the transferor to furnish, at the transferor's
expense, an Opinion of Counsel that the proposed transfer
is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements
of the Securities Act and other applicable laws.
A transferee shall only be able to take delivery of an
Unlegended Definitive Certificate if and after the Trustee receives
an Opinion of Counsel, at the expense of the Person requesting
issuance of an Unlegended Definitive Certificate, stating that the
Securities Legend is not required on such Definitive Certificate
under applicable law. Upon receipt of such opinion submitting such
Officer's Certificate to the Trustee, the Holder of such
Certificate may submit such Certificate to the Trustee to exchange
such Certificate for an Unlegended Definitive Certificate and the
Trustee shall satisfy such request notwithstanding anything else
herein to the contrary, and delivery permitted herein of a Legended
Definitive Certificate may be made in the form of an Unlegended
Definitive Certificate.
(c) Transfers of beneficial interests in the Book-Entry
Certificates, or transfers by Holders of Definitive Certificates to
transferees that take delivery in the form of beneficial interests
in the Book-Entry Certificates, may be made only in accordance with
this Section 5.2(c) and in accordance with the rules of the
Clearing Agency.
(i) In the case of a beneficial interest in a
Book-Entry Certificate being transferred to an
Institutional Accredited Investor, such transferee shall
be required to take delivery in the form of a Definitive
Certificate or Certificates and the Trustee shall
register such transfer only upon compliance with the
provisions of Section 5.2(b)(iii) hereof, mutatis
mutandis.
(ii) In the case of a beneficial interest in a
Book-Entry Certificate being transferred to a transferee
that takes delivery in the form of a Definitive
Certificate or Certificates, except as set forth in
clause (i) above, the Trustee shall register such
transfer only upon compliance with the provisions of
Section 5.2(b)(i) or (ii) hereof, mutatis mutandis.
(iii) In the case of a Definitive Certificate
being transferred to a transferee that takes delivery in
the form of a beneficial interest in a Book-Entry
Certificate, the Trustee shall register such transfer if
the transferor has provided the Trustee with a Rule 144A
Certificate in the form of Exhibit F hereto.
(iv) No restrictions under this Agreement shall
apply with respect to the transfer or registration of
transfer of a beneficial interest in a Book-Entry
Certificate to a transferee that takes delivery in the
form of a beneficial interest in such Book-Entry
Certificate.
(d) An exchange of a beneficial interest in a
Book-Entry Certificate for a Definitive Certificate or
Certificates, an exchange of a Definitive Certificate or
Certificates for a beneficial interest in a Book-Entry Certificate
and an exchange of a Definitive Certificate or Certificates for
another Definitive Certificate or Certificates (in each case,
whether or not such exchange is made in anticipation of subsequent
transfer, and in the case of a Book-Entry Certificate, so long as
the Book-Entry Certificate remains outstanding and is held by or on
behalf of the Clearing Agency) may be made only in accordance with
this Section 5.2(d) and in accordance with the rules of the
Clearing Agency.
(i) A Holder of a beneficial interest in a
Book-Entry Certificate may at any time upon not less than
60 days' notice from The Depository Trust Company to the
Certificate Registrar exchange such beneficial interest
for a Definitive Certificate or Certificates of the same
Class and may, at its option, request separate
certificates representing its regular interest in the
Trust REMIC and the right to receive Default Interest.
Upon the occurrence of an Event of Default, the Clearing
Agency may exchange the Book-Entry Certificates for
Definitive Certificates.
(ii) A Holder of a Definitive Certificate may
exchange such Certificate for a beneficial interest in a
Book-Entry Certificate of the same Class if such Holder
furnishes to the Depositor and to the Trustee a
certificate substantially in the form of Exhibit G
hereto.
(iii) A Holder of a Definitive Certificate may
exchange such Certificate for an equal aggregate
principal amount of Definitive Certificates in different
authorized denominations without any certification.
(e) (i) Upon acceptance for exchange or transfer
of a Definitive Certificate for a beneficial interest in
a Book-Entry Certificate of the same Class as provided
herein, the Trustee shall cancel such Definitive
Certificate and shall request the Clearing Agency to
endorse on the schedule affixed to such Book-Entry
Certificate (or on a continuation of such schedule
affixed to such Book-Entry Certificate and made a part
thereof) an appropriate notation evidencing the date of
such exchange or transfer and an increase in the
principal amount of such Book-Entry Certificate equal to
the principal amount of such Definitive Certificate
exchanged or transferred therefor.
(ii) Upon acceptance for exchange or transfer of a
beneficial interest in a Book-Entry Certificate for a
Definitive Certificate of the same Class as provided herein,
the Trustee shall request the Clearing Agency to endorse on
the schedule affixed to such Book-Entry Certificate (or on a
continuation of such schedule affixed to such Book-Entry
Certificate and made a part thereof) an appropriate notation
evidencing the date of such exchange or transfer and a
decrease in the principal amount of such Book-Entry
Certificate equal to the principal amount of such Definitive
Certificate issued in exchange therefor or upon transfer
thereof.
(f) The following provisions shall apply to the
placement of the Securities Legend on any Definitive Certificate
issued in exchange for or upon transfer of another Definitive
Certificate or of a beneficial interest in a Book-Entry Certificate
and to the removal of the Securities Legend from any Legended
Definitive Certificate.
(i) Unless determined otherwise in accordance with
applicable law pursuant to Section 5.2(b) hereof, a Definitive
Certificate issued upon transfer of or exchange for a
beneficial interest in a Book-Entry Certificate shall bear the
Securities Legend.
(ii) Upon the transfer, exchange or replacement of
a Legended Definitive Certificate, or upon specific request of
a Holder of a Legended Definitive Certificate for removal of
the Securities Legend therefrom, the Trustee shall deliver an
Unlegended Definitive Certificate or Certificates if there is
provided to the Depositor and the Trustee evidence reasonably
satisfactory to the Depositor and the Trustee (which may
include an Opinion of Counsel) that neither the Securities
Legend nor the restrictions on transfer set forth therein are
required to ensure compliance with the Securities Act.
(iii) Upon the transfer, exchange or replacement of
an Unlegended Definitive Certificate, the Trustee shall
deliver a Legended or Unlegended Definitive Certificate or
Certificates, as the Holder may request.
(g) Each transferee of a Class B, Class C and Class D
Certificate shall be deemed to have agreed with and represented to
the Depositor and the Trustee that such Person either (i) is not an
employee benefit plan subject to ERISA or a plan or individual
retirement account subject to Section 4975 of the Code and is not
using any assets of any such plan or account to acquire such
Certificate or (ii) if it is such a plan or account or is otherwise
using assets of any such plan or account to acquire such
Certificate, a statutory or administrative exemption applies such
that its purchase and holding of such Certificate will not result
in a non-exempt prohibited transaction under ERISA and the Code.
The proposed transferee of such Class B, Class C or Class D
Certificate shall prior to the transfer deliver to the Servicer,
the Trustee, the Certificate Registrar and the Depositor an
affidavit substantially in the form attached hereto as Exhibit P
and an opinion of counsel which establishes to the satisfaction of
the Depositor, the Servicer, the Trustee and the Certificate
Registrar that the purchase or holding of the Class B, Class C or
Class D Certificate, as the case may be, will not result in the
assets of the Trust Fund being deemed to be "plan assets" and
subject to the fiduciary responsibility provisions of ERISA or the
prohibited transaction provisions of the Code, will not constitute
or result in a prohibited transaction within the meaning of Section
406 or Section 407 of ERISA or Section 4975 of the Code, and will
not subject the depositor, the Servicer, the Trustee or the
Certificate Registrar to any obligation or liability (including
obligations or liabilities under ERISA or Section 4975 of the
Code), which opinion of counsel shall not be an expense of the
Trust Fund, the Servicer, the Trustee, the Certificate Registrar or
the Depositor. Each such Certificate which is a Definitive
Certificate shall bear the legend set forth in Exhibit Q.
(h) Notwithstanding anything to the contrary contained
herein or in this Agreement, no Residual Certificate or any
percentage interest therein (whether or not a Certificate is
physically transferred) may be owned, pledged or transferred,
directly or indirectly, by or to a Disqualified Organization or to
an employee benefit plan subject to ERISA or an individual
retirement account or plan subject to Section 4975 of the Code
(such plans and individual retirement accounts, "ERISA Plans").
Prior to and as a condition of the registration of any transfer,
sale or other disposition of a Residual Certificate or any
percentage interest therein, the proposed transferee shall deliver
to the Certificate Registrar an affidavit upon which it may rely in
the absence of actual knowledge that the affidavit is incorrect, in
substantially the respective forms attached hereto as Exhibit
J-1(a) (for a U.S. Holder) or Exhibit J-1(b) (for a foreign Holder)
representing and warranting that such transferee is neither a
Disqualified Organization nor an ERISA Plan nor an agent or nominee
acting on behalf of a Disqualified Organization or an ERISA Plan
(any such transferee, a "Permitted Transferee"). In addition, the
Certificate Registrar shall require, prior to and as a condition of
any such transfer, the delivery by the proposed transferee of an
Opinion of Counsel, satisfactory in form and substance to the
Certificate Registrar, that such proposed transferee or, if the
proposed transferee is an agent or nominee, the proposed beneficial
owner, is not a Disqualified Organization or an ERISA Plan. Any
such Opinion of Counsel shall be obtained at the expense of the
prospective transferor or transferee and not at the expense of the
Trust Fund, the Depositor, the Borrowers, the Trustee, the Servicer
or the Certificate Registrar. Notwithstanding the registration in
the Certificate Register of any transfer, sale, or other
disposition of a Residual Certificate or any percentage interest
therein to a Disqualified Organization or an agent or nominee
acting on behalf of a Disqualified Organization, such registration
shall be deemed to be of no legal force or effect whatsoever and
such Disqualified Organization or an ERISA Plan (or such agent or
nominee) shall not be deemed to be a Certificateholder for any
purpose hereunder, including, but not limited to, the receipt of
distributions on such Residual Certificate. The Certificate
Registrar shall not be under any liability to any person for any
registration or transfer of a Residual Certificate to a
Disqualified Organization or an ERISA Plan or for any payments due
on such Residual Certificate to the Holder thereof or for taking
any other action with respect to such Holder under the provisions
of the Agreement, so long as the transfer was effected in
accordance with this Section 5.2(h), unless the Certificate
Registrar shall have actual knowledge at the time of such transfer
or the time of such payment or other action that the transferee is
a Disqualified Organization or an ERISA Plan (or an agent or
nominee thereof). The Certificate Registrar shall be entitled to
recover from any Holder of a Residual Certificate or any percentage
interest therein that was a Disqualified Organization or an ERISA
Plan (or an agent or nominee thereof) at the time it became a
Holder or any subsequent time it became a Disqualified Organization
all payments made on such Residual Certificate at and after either
such times (and all costs and expenses, including but not limited
to attorneys' fees, incurred in connection therewith). Any payment
(not including any such costs and expenses) so recovered by the
Certificate Registrar shall be paid and delivered to the last
preceding Holder of such Residual Certificate or interest therein.
Any percentage interest in a Residual Certificate shall be a pro
rata individual interest.
In addition to the foregoing restrictions on transfer of
a Residual Certificate or any percentage interest therein, the
Certificate Registrar shall not register the transfer of a Residual
Certificate unless (a) it has received a transferee letter either
in the form attached as Exhibit J-2(a) or Exhibit J-2(b) hereto and
(b) in the event that the transferee letter is in the form of
Exhibit J-2(b) (a "Foreign Holder Letter"), it has received written
evidence satisfactory to the Certificate Registrar that the
transferor has paid or provided for payment of all taxes (including
all accrued taxes on excess inclusion income) accrued on such
Residual Certificate in accordance with the provisions set forth in
Section 10.1(k) hereof, which written evidence shall include a copy
of the applicable Forms 1066Q (or other applicable form prescribed
by the Internal Revenue Service), to the extent that any such form
has been filed, evidencing the amount of excess inclusion income
for the periods during which the transferor held such Residual
Certificate or any percentage interest therein; (c) it has received
the calculations and certifications described in paragraph (4) of
Exhibit J-2(b) or paragraph (14) of Exhibit J-2(a), and in the
event that the transferee letter is in the form of Exhibit J-2(b),
the requirements set forth in paragraph 3(xi) thereof have been
complied with to the satisfaction of the Certificate Registrar.
Upon satisfaction of the foregoing requirements, the Certificate
Registrar shall register the Residual Certificate in the name of
the transferee for whose benefit the transferee letter is made and
delivered (and not in the name of any nominee thereof).
If any purported transferee shall become a registered
Holder of a Residual Certificate in violation of the provisions of
this Section 5.2(h), then, upon receipt of written notice to the
Certificate Registrar that the registration of transfer of such
Residual Certificate was not in fact permitted by this Section
5.2(h), the last preceding Permitted Transferee shall be restored
to all rights as Holder thereof retroactive to the date of such
registration of transfer of such Residual Certificate. The
Certificate Registrar shall be under no liability to any Person for
any registration of transfer of a Residual Certificate that is in
fact not permitted by this Section 5.2(h), for making any payment
due on such Certificate to the registered Holder thereof or for
taking any other action with respect to such Holder under the
provisions of this Agreement so long as the transfer was registered
upon receipt of the affidavit and the transferee letter described
in this Section 5.2(h).
Each Holder of a Residual Certificate or any interest
therein, by such Holder's acceptance thereof, shall be deemed for
all purposes to have consented to the provisions of this Section.
Each Residual Certificate shall bear a legend describing
the restrictions on transferability set forth in this Section
5.2(h).
(i) The provisions of this Section 5.2(i) shall be
subject in every respect to Sections 5.2(b) through (h) above. The
Holder of a beneficial interest in a Book-Entry Certificate may,
subject to the rules and procedures of the Clearing Agency, cause
the Clearing Agency to notify the Trustee in writing of a request
for transfer or exchange of such beneficial interest for a
Definitive Certificate or Certificates. Every Certificate
presented or surrendered for registration of transfer or exchange
shall (if so required by the Borrowers, the Certificate Registrar
or the Trustee) be duly endorsed by, or be accompanied by a written
instrument of transfer in form satisfactory to the Certificate
Registrar duly executed by, the Holder thereof or its attorney duly
authorized in writing. Upon surrender for registration of transfer
of any Certificate at any office or agency of the Depositor
maintained for such purpose pursuant to Section 5.5 hereof, the
Authenticating Agent or the Trustee shall execute and the Trustee
or the Authenticating Agent shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new
Certificates of a like aggregate Certificate Balance of the same
Class. The Trustee may decline to accept any request for an
exchange or registration of transfer of any Certificate during the
period of five calendar days preceding any Distribution Date. At
the option of the Certificateholders, Certificates may be exchanged
for other Certificates of a like aggregate Certificate Balance of
the same Class upon surrender of the Certificates to be exchanged
at any such office or agency. Whenever any Certificates are so
surrendered for exchange, the Authenticating Agent or the Trustee
shall execute and the Trustee or the Authenticating Agent shall
authenticate, date and deliver the Certificates which the
Certificateholder making the exchange is entitled to receive.
(j) No service charge shall be made to a
Certificateholder for any registration of transfer or exchange of
Certificates, but the Certificate Registrar may require payment of
a sum sufficient to cover any tax or governmental charge that may
be imposed in connection with any registration of transfer or
exchange of Certificates.
(k) All Certificates surrendered for registration of
transfer or exchange shall be cancelled by the Certificate
Registrar or the Trustee in accordance with their standard
procedures.
(l) The Certificate Registrar shall provide to the
Trustee (unless the Trustee is acting as Certificate Registrar) (i)
upon receipt of a written request from the Trustee, notice of each
registration of transfer of a Certificate, (ii) an updated copy of
the Certificate Register at the beginning of each calendar quarter
and (iii) upon receipt of a written request therefor, a list of
Holders of the Certificates.
Section 5.3 Mutilated, Destroyed, Lost or Stolen
Certificates. If (a) any mutilated Certificate is surrendered to
the Trustee or the Certificate Registrar or the Trustee or the
Certificate Registrar receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate, and (b) there is
delivered to the Depositor, the Certificate Registrar and the
Trustee such security or indemnity as may be required by them to
save each of them and the Trust Fund harmless, then, in the absence
of notice to the Certificate Registrar or the Trustee that such
Certificate has been acquired by a bona fide purchaser, the
Authenticating Agent or the Trustee shall execute and the Trustee
or the Authenticating Agent shall authenticate and deliver in
exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like tenor and Percentage
Interest of the same Class. Upon the issuance of any new
Certificate under this Section, the Trustee or 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
Trust Fund, as if originally issued, whether or not the mutilated,
lost, stolen or destroyed Certificate shall be found at any time.
Section 5.4 Person Deemed Owners. Prior to the due
presentation of a Certificate for registration of transfer, the
Servicer, the Depositor, the Trustee, the Certificate Registrar,
the Paying Agent and any agent 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 4.1 hereof, and for all other purposes whatsoever, and
neither the Servicer, the Depositor, the Trustee, the Certificate
Registrar, the Paying Agent nor any agent of any of them shall be
affected by notice to the contrary.
Section 5.5 Maintenance of Office or Agency. The
Depositor shall maintain in The City and State of New York an
office or agency where the Certificates may be surrendered for
registration of transfer or exchange and presented for final
distribution and where notices and demands to or upon the Trust
Fund in respect of the Certificates and this Agreement may be
served. The Depositor initially appoints the office of State
Street Bank and Trust Company, N.A., 00 Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx, as the presenting agent for said purposes. The Certificate
Registrar will give prompt written notice to the Depositor, the
Servicer, the Trustee and the Certificateholders of any change in
the location of such office or agency.
Section 5.6 Appointment of Paying Agent. The Trustee
may appoint a Paying Agent (if the Trustee is not the Paying Agent)
for the purpose of making distributions to Certificateholders
hereunder. The Trustee shall cause such Paying Agent (unless such
Paying Agent is a party to this Agreement) to execute and deliver
to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee that such Paying Agent will hold all sums held by
it for the payment to the Certificateholders in an Eligible Account
in trust for the benefit of the Certificateholders entitled thereto
until such sums shall be paid to the Certificateholders. All funds
remitted by the Trustee or the Servicer to any such Paying Agent
for the purpose of making distributions shall be paid to the
Certificateholders on each Distribution Date and any amounts not so
paid shall be returned on such Distribution Date to the Trustee or
the Servicer, as applicable. The Servicer shall remit to the
Paying Agent on the Business Day prior to each Distribution Date,
by wire transfer in immediately available funds, the funds to be
distributed on such Distribution Date. Any Paying Agent shall be
either a bank or trust company or otherwise authorized under law to
exercise corporate trust powers and shall have a rating of at least
"A" by the Rating Agency unless the Paying Agent is the Trustee.
The Trustee shall serve as the initial Paying Agent hereunder.
Section 5.7 Book-Entry Certificates. (a) The
Book-Entry Certificates upon original issuance (i) shall be
delivered by the Trustee in typewritten form to the initial
Clearing Agency, (ii) shall initially be registered on the
Certificate Register in the name of Cede & Co., the nominee of the
initial Clearing Agency and (ii) shall bear a legend substantially
to the following effect:
"Unless this certificate is presented by an
authorized representative of The Depository Trust
Company, a New York corporation ("DTC"), to the Depositor
or its agent for registration of transfer, exchange or
payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested
by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest
herein."
A Book-Entry Certificate may be deposited with such other
Clearing Agency as the Borrowers may from time to time designate,
and shall bear such legend as may be appropriate; provided that
such successor Clearing Agency maintains a book-entry system that
qualifies to be treated as "registered form" under Section
163(f)(3) of the Code.
(b) If at any time the Clearing Agency for the
Book-Certificates notifies the Depositor or the Trustee that it is
unwilling or unable to continue as Clearing Agency for the Book-
Entry Certificates or if at any time the Clearing Agency shall no
longer be eligible to act as such under this Section 5.7, the
Borrowers shall appoint a successor Clearing Agency with respect to
the Book-Entry Certificates. Any such successor Clearing Agency
must maintain a book-entry system that qualifies under Section
163(f)(3) of the Code. If a successor Clearing Agency for such
Book-Entry Certificate is not appointed by the Borrowers within 90
days after the Borrowers receive such notice or a copy thereof from
the Trustee or becomes aware of such ineligibility or
unwillingness, the Depositor's election pursuant to this Section
5.7 that such Certificates be represented by Book-Entry
Certificates shall no longer be effective and the Trustee and/or
the Authenticating Agent shall execute, authenticate and deliver
Definitive Certificates in any authorized denominations having an
aggregate Certificate Balance equal to the aggregate Certificate
Balance of such Book-Entry Certificates in exchange for such Book-
Entry Certificate.
If the Trustee has instituted or has been directed to
institute any judicial proceeding in a court to enforce the rights
of the Certificateholders under the Certificates, and the Trustee
has been advised by counsel that in connection with such proceeding
it is necessary or appropriate for the Trustee to obtain possession
of the Certificates, the Certificates represented by the Book-Entry
Certificates shall no longer be represented by such Book-Entry
Certificates. In such event, the Trustee and/or the Authenticating
Agent shall execute, authenticate and deliver, in exchange for the
Book-Entry Certificates, Definitive Certificates, in authorized
denominations, in an aggregate principal amount equal to the
principal amount of such Book-Entry Certificates.
(c) The Book-Entry Certificate shall in all respects
be entitled to the same benefits under this Agreement as Definitive
Certificates authenticated and delivered hereunder.
(d) Beneficial interests in the Book-Entry Certificate
will be sold in minimum denominations of $250,000 and integral
multiples of $1,000 above such minimum amount. Owners of a
beneficial interest in the Book-Entry Certificate will be entitled
to receive physical delivery of Definitive Certificates only as
provided herein. The Definitive Certificates will be sold in
minimum denominations of $250,000 and in integral multiples of
$1,000 above such minimum amount.
(e) The Depositor, the Servicer, the Paying Agent, the
Certificate Registrar and the Trustee may deal with the Clearing
Agency and the Clearing Agency Participants for all purposes
(including the making of distributions on the Certificates of each
such Class) as the authorized representatives of the Certificate
Owners;
(f) To the extent that the provisions of this Section
5.7 conflict with any other provisions of this Agreement, the
provisions of this Section 5.7 shall control with respect to each
affected Certificate.
(g) The rights of Certificate Owners of Book-Entry
Certificates shall be exercised only through the Clearing Agency
and the applicable Clearing Agency Participants and shall be
limited to those established by law and agreements between such
Certificate Owners and the Clearing Agency and/or the Clearing
Agency Participants. Pursuant to the Depository Agreement
applicable to each Class of Book-Entry Certificates, except to the
extent that Definitive Certificates of such Class are issued, the
initial Clearing Agency will make book-entry transfers among the
Clearing Agency Participants and receive and transmit distributions
of principal and interest on such Book-Entry Certificates to such
Clearing Agency Participants.
Section 5.8 Notices to Clearing Agency. Whenever notice
or other communication to the Certificate Owners of Book-Entry
Certificates is required under this Agreement, except to the extent
that Definitive Certificates shall have been issued to Certificate
Owners, the Servicer or the Paying Agent shall give all such
notices and communications specified herein to be given to the
Certificate Owners of Book-Entry Certificates to the Clearing
Agency for distribution to the Certificate Owners of such Book-
Entry Certificates.
Section 5.9 Definitive Certificates. If (i) (A) the
Depositor advises the Trustee in writing that the Clearing Agency
is no longer willing or able to discharge properly its
responsibilities under the applicable Depository Agreement or the
Trustee is so advised by the Clearing Agency in writing, and (B)
the Depositor is unable to locate a qualified successor, or (ii)
Certificate Owners of a Class representing beneficial interests
aggregating not less than 50% of the Aggregate Certificate Balance
of such Class advise the Trustee and the applicable Clearing Agency
through the applicable Clearing Agency Participants in writing that
the continuation of a book-entry system through the applicable
Clearing Agency is no longer in the best interests of the
Certificate Owners of such Class, the Trustee shall notify all
Certificate Owners of such Class, through the applicable Clearing
Agency Participants, of the occurrence of any such event and of the
availability of Definitive Certificates to Certificate Owners of
such Class requesting the same. Upon surrender to the Certificate
Registrar of the Certificates of such Class by the applicable
Clearing Agency accompanied by registration instructions from the
applicable Clearing Agency for registration, the Certificate
Registrar shall issue the Definitive Certificates of such Class.
Neither the Depositor, the Borrowers, the Certificate Registrar nor
the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected
in relying on, such instructions. Upon the issuance of Definitive
Certificates of such Class, all references herein to obligations
imposed upon or to be performed by the applicable Clearing Agency
shall be deemed to be imposed upon and performed by the Paying
Agent and the Certificate Registrar, to the extent applicable with
respect to such Definitive Certificates, and the Trustee, the
Paying Agent and the Certificate Registrar shall recognize the
Holders of the Definitive Certificates of such Class as
Certificateholders of such Class hereunder.
Section 5.10 Lists of Certificateholders. At such time,
if any, as Book-Entry Certificates are no longer outstanding, if
three or more Certificateholders or any Certificateholder holding
25% or more of the Aggregate Certificate Balance (i) request in
writing from the Trustee a list of names and addresses of
Certificateholders, (ii) state that such Certificateholders desire
to communicate with other Certificateholders with respect to their
rights hereunder or under the Certificates, and (iii) provide a
copy of the communication which such Certificateholders propose to
transmit (for information purposes and not review), then the
Trustee shall, within 10 Business Days after the receipt of such
request, afford the requesting Certificateholders access during
normal business hours to the list of the Certificateholders held by
the Trustee, if any, as of the most recent Record Date. If such
Record Date list is as of a date more than 90 days prior to the
date of receipt of such Certificateholders' request, the Trustee
shall promptly prepare or cause to be prepared a current list and
promptly afford the requesting Certificateholders access to the new
list upon its receipt by the Trustee. The expense of providing any
such information requested by the requesting Certificateholders
shall be borne by such Certificateholders and shall not be borne by
the Trustee.
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.v Respective Liabilities of the Depositor and
the Servicer. The Depositor and the Servicer shall each be liable
in accordance herewith only to the extent of the obligations
specifically and respectively imposed upon and undertaken by the
Depositor and the Servicer herein. By way of illustration and not
limitation, the Depositor is not liable for the servicing and
administration of the Mortgage Loan, nor is it obligated by Section
7.1 hereof or any other provision of this Agreement to assume any
obligations of the Servicer or to appoint a designee to assume such
obligations, nor is it liable for any other obligation hereunder
that it may, but is not obligated to, assume unless it elects to
assume such obligation in accordance herewith.
Section 6.2 Merger or Consolidation of the Servicer or
the Depositor. The Servicer and the Depositor will each keep in
full effect its existence, rights and franchises as a corporation
under the laws of the jurisdiction of its incorporation, and will
obtain and preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is
required, in each case to the extent necessary to protect the
validity and enforceability of this Agreement, the Certificates and
the Mortgage Loan and to perform its respective duties under this
Agreement.
Any Person into which the Servicer or the Depositor may
be merged or consolidated, or any corporation resulting from any
merger or consolidation to which the Servicer of the Depositor
shall be a party, or any Person succeeding to the business of the
Servicer or the Depositor related to its obligations under this
Agreement, shall be the successor of the Servicer or the Depositor,
as the case may be, hereunder, and shall be deemed to have assumed
all of the liabilities and obligations of the Servicer or the
Depositor, as applicable, 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 the successor or surviving Person to the Servicer
shall be qualified to service mortgage loans in accordance with
Accepted Servicing Practices and otherwise satisfy the requirements
of Section 7.5(b) hereof.
Section 6.3 Limitation on Liability of the Depositor,
the Servicer and Others. (a) None of the Depositor, the Servicer,
the Mortgage Custodian, the Paying Agent, the Authenticating Agent,
the Certificate Registrar nor any of their respective principals,
shareholders, policyholders, directors, officers, employees,
Affiliates or agents shall be under any liability to the Trust Fund
or the Certificateholders or to any other of such Persons for any
action taken or for refraining from the taking of any action in
good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the
Depositor, the Servicer or any such other Person against any breach
of warranties or representations made by it herein or any liability
which would otherwise be imposed by reason of willful misconduct,
bad faith or negligence in the performance of duties or by reason
of reckless disregard of obligations and duties hereunder; and
provided, further, that notwithstanding anything to the contrary in
this Agreement, the Servicer shall have no liability for actions or
omissions that involve the exercise of judgment or discretion on
its part consistent with Accepted Servicing Practices. The
Depositor, the Servicer, the Mortgage Custodian, the Paying Agent,
the Authenticating Agent, the Certificate Registrar and any of
their respective principals, shareholders, policyholders,
directors, officers, employees or agents may rely in good faith on
any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder.
The Depositor and any of its principals, shareholders,
policyholders, directors, officers, employees, Affiliates or agents
shall be indemnified by the Trust Fund and held harmless against
any loss, liability or expense incurred in connection with any
legal action relating to this Agreement, the Mortgage Loan, the
Mortgaged Properties or the Certificates, other than any loss,
liability or expense related to any alleged violation of federal or
state securities laws in connection with the issuance and sale of
the Certificates (except as any such loss, liability or expense
shall be otherwise reimbursable and reimbursed pursuant to this
Agreement) and other than any loss, liability or expense incurred
by reason of the willful misconduct, bad faith or negligence of the
Depositor in the performance of its duties hereunder or by reason
of reckless disregard of its obligations and duties hereunder. The
Servicer, the Mortgage Custodian, the Paying Agent, the Certificate
Registrar and the Authenticating Agent, and any of their respective
principals, shareholders, policyholders, directors, officers,
employees, agents (including any Sub-Servicer) or Affiliates shall
be indemnified by the Trust Fund and held harmless against any
loss, liability or expense incurred in connection with any legal
action relating to this Agreement, the Mortgage Loan, the Mortgaged
Properties or the Certificates (except as any such loss, liability
or expense shall be otherwise reimbursable and reimbursed pursuant
to this Agreement), other than any loss, liability or expense
incurred by reason of willful misconduct, bad faith or negligence
in the performance of their respective duties hereunder or by
reason of reckless disregard of obligations and duties hereunder.
Neither the Depositor nor the Servicer shall be under any
obligation to appear in, prosecute or defend any legal action which
is not incidental to its respective duties under this Agreement and
which in its opinion may involve it in any expense or liability;
provided, however, that the Depositor or the Servicer may in its
discretion undertake any such action which it may deem necessary or
desirable with respect to enforcing or defending litigation
affecting the rights of Certificateholders pursuant to this
Agreement and the rights and duties of the parties hereto and the
interests of the Certificateholders hereunder. In such event, the
legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust
Fund, and the Depositor and the Servicer shall be entitled to be
reimbursed therefor out of amounts attributable to the Mortgage
Loan on deposit in the Distribution Account as provided by Section
3.3(e)(v) hereof. Notwithstanding anything in this Agreement to
the contrary, in no event shall the Depositor, the Servicer, the
Mortgage Custodian, the Paying Agent, the Authenticating Agent, the
Certificate Registrar or any of their respective principals,
shareholders, policyholders, directors, officers, employees,
Affiliates or agents be entitled to any indirect, punitive, special
or consequential damages pursuant to this Section 6.3(a) or
otherwise.
The Servicer shall not be obligated to incur any
liabilities, costs, charges, fees or other expenses which relate to
or arise from a breach of any representation, warranty or covenant
made by any of the Depositor in this Agreement or the Borrowers in
the Mortgage. The Trust Fund shall indemnify and hold harmless the
Servicer from any and all claims, liabilities, costs, charges, fees
or other expenses which relate to or arise from any such breach of
representation, warranty or covenant.
(b) Subject to the provisions of Section 6.3(a) above,
each of the Servicer, the Special Servicer, the Paying Agent, the
Mortgage Custodian, the Certificate Registrar and the
Authenticating Agent (for purposes of this paragraph, each,
severally, an "Indemnifying Person") agrees to indemnify the
Depositor and the Trustee, and hold them harmless against any and
all claims, losses, penalties, fines, forfeitures, legal fees and
related costs, judgments, and any other costs, liabilities, fees
and expenses that the Depositor and/or the Trustee may sustain in
connection with this Agreement related to the willful misconduct,
bad faith and/or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and
duties hereunder by such Indemnifying Person (including, in the
case of the Servicer, the Sub-Servicer). The Depositor and/or the
Trustee shall immediately notify the applicable Indemnifying Person
if a claim is made by a third party with respect to this Agreement
or the Mortgage Loan entitling the Depositor and/or the Trustee to
indemnification hereunder, whereupon the applicable Indemnifying
Person shall assume the defense of any such claim (with counsel
reasonably satisfactory to the Depositor and/or the Trustee) and
pay all expenses in connection therewith, including counsel fees,
and promptly pay, discharge and satisfy any judgment or decree
which may be entered against it or them in respect of such claim,
and upon such assumption of such defense, such Indemnifying Party
shall not be obligated to pay the fees or expenses of any other
counsel retained by the Depositor and/or Trustee. Any failure to
so notify the applicable Indemnifying Person shall not affect any
rights the Depositor and/or Trustee may have to indemnification
under this Agreement or otherwise. Notwithstanding the foregoing,
in the case of indemnification of the Trustee, if the Trustee is
acting as an Indemnifying Person, then such Indemnifying Person
shall not be liable for any indemnity to the Trustee. The
indemnities provided hereunder shall survive the resignation or
termination of each Indemnifying Party or the Trustee and the
termination of this Agreement. Notwithstanding anything in this
Agreement to the contrary, in no event shall an Indemnifying Person
hereunder be liable for any indirect, punitive, special or
consequential damages pursuant to this Section 6.3(b) or otherwise.
(c) Subject to the provisions of Section 6.3(a) above,
each of the Trustee, the Paying Agent, the Mortgage Custodian, the
Certificate Registrar and the Authenticating Agent (for purposes of
this paragraph, each, severally, an "Indemnifying Person") agrees
to indemnify the Servicer and the Special Servicer (together, the
"Servicer Group"), and hold each of them harmless against any and
all claims, losses, penalties, fines, forfeitures, legal fees and
related costs, judgments, and any other costs, liabilities, fees
and expenses that the Servicer Group may sustain in connection with
this Agreement related to the willful misconduct, bad faith and/or
gross negligence in the performance of duties hereunder or by
reason of reckless disregard of obligations and duties hereunder by
such Indemnifying Person. The Servicer shall promptly notify the
applicable Indemnifying Person if a claim is made by a third party
with respect to this Agreement or the Mortgage Loan entitling the
Servicer Group to indemnification hereunder, whereupon the
applicable Indemnifying Person shall assume the defense of any such
claim (with counsel reasonably satisfactory to the Servicer) and
pay all expenses in connection therewith, including counsel fees,
and promptly pay, discharge and satisfy any judgment or decree
which may be entered against it in respect of such claim, and upon
such assumption of such defense, such Indemnifying Party shall not
be obligated to pay the fees or expenses of any other counsel
retained by the Servicer Group. Any failure to so notify the
applicable Indemnifying Person shall not affect any rights the
Servicer Group may have to indemnification under this Agreement or
otherwise. Such indemnification shall survive the termination of
the applicable Indemnifying Person in its capacity as such
hereunder and the termination of this Agreement. Notwithstanding
anything in this Agreement to the contrary, in no event shall an
Indemnifying Person hereunder be liable for any indirect, punitive,
special or consequential damages pursuant to this Section 6.3(c) or
otherwise.
Section 6.4 Servicer Not to Resign; Eligibility
Requirement for Servicer. The Servicer may assign its rights and
delegate its duties and obligations under this Agreement, provided
that: (i) the purchaser or transferee accepting such assignment
and delegation (A) shall be satisfactory to the Trustee, (B) shall
be acceptable to the Rating Agency as evidenced by a letter from
the Rating Agency delivered to the Trustee and (C) shall execute
and deliver to the Trustee an agreement in form and substance
reasonably satisfactory to the Trustee, which contains an
assumption by such Person of the due and punctual performance and
observance of each covenant and condition to be performed or
observed by the Servicer under this Agreement from and after the
date of such agreement; (ii) as evidenced by a letter from the
Rating Agency delivered to the Trustee by the Servicer, the Rating
Agency's ratings of the Class A, Class B, Class C and Class D
Certificates in effect immediately prior to such assignment, sale
or transfer will not be qualified, downgraded or withdrawn as a
result of such assignment, sale or transfer, (iii) the Servicer
shall not be released from its obligations under this Agreement
that arose prior to the effective date of such assignment and
delegation under this paragraph; and (iv) the rate at which the
Servicing Compensation (or any component thereof) is calculated
shall not exceed the rate then in effect. Upon acceptance of such
assignment and delegation, the purchaser or transferee shall be the
successor Servicer hereunder.
Subject to the provisions of the preceding paragraph and
of Section 6.2 hereof, the Servicer shall not resign from its
obligations and duties hereby imposed on it, except (i) upon
determination that its duties hereunder are no longer permissible
under applicable law and (ii) the Servicer shall be deemed to have
resigned 30 days after written notice from the Rating Agency to the
Servicer and the Trustee that the Rating Agency's rating of the
Class A, Class B, Class C and Class D Certificates will be
qualified, downgraded or withdrawn if the Servicer shall not have
resigned within 30 days of delivery of such notice. Any such
determination permitting the resignation of the Servicer pursuant
to clause (i) above shall be evidenced by an Opinion of Counsel
(obtained at the resigning Servicer's expense) delivered to the
Trustee and the Depositor. No resignation by the Servicer under
this Agreement shall become effective until the Trustee, in
accordance with Section 7.5 hereof, or a successor servicer shall
have assumed the Servicer's responsibilities and obligations. The
resignation or deemed resignation of the Servicer hereunder shall
not release the Servicer from any of its obligations that arose
prior to the effective date of such resignation.
Section 6.5 Rights of the Trustee and the Depositor in
Respect of the Servicer. The Servicer shall afford the Depositor
and the Trustee, upon reasonable notice, during normal business
hours access to all records maintained by the Servicer in respect
of its rights and obligations hereunder and under the Mortgage
Loan, and access to officers of the Servicer responsible for such
obligations. The Servicer shall not deny access to the Trustee on
the grounds of ownership or confidentiality or otherwise to any
document or record, including any that might be in electronic form,
which would be reasonably necessary for the Trustee to determine if
an Event of Default or a Mortgage Event of Default has occurred
hereunder, to verify any amount set forth in any statement or
report required to be provided by the Servicer or Trustee under any
provision hereof, to prepare any tax return or otherwise to comply
with its obligations or to exercise its rights hereunder. Upon
request, the Servicer shall furnish the Depositor and the Trustee
with its most recent financial statements. The Trustee shall
enforce the obligations of the Servicer hereunder and may, but is
not obligated to, perform, or cause a designee to perform, any
defaulted obligation of the Servicer hereunder or exercise the
rights of the Servicer hereunder; provided that the Servicer shall
not be relieved of any of its obligations hereunder by virtue of
such performance by the Trustee or its designee. The Trustee shall
not have any responsibility or liability for any action or failure
to act by the Servicer and is not obligated to supervise the
performance of the Servicer under this Agreement or otherwise.
ARTICLE VII
DEFAULT
Section 7.1 Events of Default. In case one or more of
the following shall occur and be continuing, it shall be an "Event
of Default":
(a) any failure by the Servicer in making required
deposits to or payments from the Distribution Account (other than
an Advance referred to in Section 7.1(f) below) in the amount and
manner provided for herein so as to enable the Paying Agent to
distribute or cause to be distributed to the Certificateholders of
any Class any payment required to be made under the terms of the
Certificates and this Agreement;
(b) any failure on the part of the Servicer duly to
observe or perform in any material respect any other of the
covenants or agreements of the Servicer in the Certificates or in
this Agreement, which failure continues unremedied for a period of
30 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the
Servicer by the Trustee or to the Servicer and the Trustee by the
Holders of Certificates of any Class affected thereby evidencing,
as to such Class, Percentage Interests aggregating not less than
25%;
(c) the entry of a decree or order of a court or agency
or supervisory authority having jurisdiction in the premises for
the appointment of a conservator, receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings against the Servicer, or for the
winding-up or liquidation of the Servicer's affairs, and such
decree or order remains unstayed and in effect for a period of 60
days;
(d) the consent by the Servicer to the appointment of
a conservator or receiver or liquidator or liquidating committee in
any insolvency, readjustment of debt, marshalling of assets and
liabilities, voluntary liquidation or similar proceedings of or
relating to the Servicer or of or relating to all or substantially
all of its property;
(e) the admission by the Servicer in writing of its
inability to pay its debts generally as they become due, the filing
by the Servicer of a petition to take advantage of any applicable
insolvency or reorganization statute, the making by the Servicer of
an assignment for the benefit of its creditors or the voluntary
suspension by the Servicer of payment of its obligations;
(f) any failure of the Servicer, subject to Section
3.17(d), to make (i) any Interest Advance to the extent required by
the provisions of this Agreement on any Servicer Advance Date or
(ii) any Servicing Advance when due, which failure remains uncured
five Business Days after notice of such failure to make such
Servicing Advance is delivered to the Servicer by the Trustee; or
(g) the senior unsecured debt ratings of the Trustee
being at any time less than "AA-" by the Rating Agency (whether or
not such rating is published by the Rating Agency) (unless a
replacement trustee having a rating of not less than "AA" or unless
the Trustee or replacement Trustee is otherwise acceptable to the
Rating Agency) or, if not rated (either published or unpublished)
by the Rating Agency, an equivalent rating by any two of Xxxxx'x
Investors Service, Inc., Standard & Poor's Ratings Group or Duff &
Xxxxxx Credit Rating Co.
If an Event of Default described in clauses (a) or (b) above shall
occur, then, and in each and every such case, subject to applicable
law, the Trustee may, and at the direction of the Holders of
Certificates evidencing not less than a majority by Certificate
Balance of the Certificates shall, by notice in writing to the
Servicer, terminate all of the rights and obligations of the
Servicer as servicer of the Mortgage Loan under this Agreement and
in and to the Mortgage Loan and the proceeds thereof, other than
its rights, if any, as a Certificateholder hereunder. If an Event
of Default described in clauses (c), (d) or (e) above shall occur,
the rights and obligations of the Servicer under this Agreement and
in and to the Mortgage Loan and the proceeds thereof, other than
its rights, if any, as a Certificateholder hereunder shall
automatically terminate without the requirement of giving notice or
the passage of time. Except as otherwise provided in Section
3.12(d) with respect to the right of the Servicer to cure an Event
of Default, if an Event of Default described in clause (f) above
shall have occurred or remains incurred as provided in Section
3.12(d), the Trustee shall, by notice in writing to the Servicer,
terminate all of the rights and obligations of the Servicer under
this Agreement and in and to the Mortgage Loan and the proceeds
thereof, other than its rights, if any, as a Certificateholder
hereunder; provided that, in the case of a termination of the
rights and obligations of the Servicer hereunder solely as a result
of the occurrence of an Event of Default described in clause (f)
above relating to an Interest Advance, if (x) the Trustee shall
receive from the Servicer on or prior to the Distribution Date with
respect to which such failure occurred the full amount of such
Interest Advance, together with interest thereon at the Advance
Rate from the Servicer Advance Date to the date of such payment by
the Servicer and (y) the Trustee shall have received written
affirmation from the Rating Agency that reinstatement of the
Servicer will not result in a qualification, downgrading or
withdrawal of the then current rating of any Class of Regular
Certificates, then the rights and obligations of such terminated
Servicer hereunder and in and to the Mortgage Loan and the proceeds
thereof shall be reinstated. If an Event of Default described in
clause (g) above shall have occurred, the Trustee shall resign
immediately in the manner and with the effect specified in Section
8.8.
If a Responsible Officer of the Trustee shall obtain
actual knowledge of any Event of Default hereunder, the Trustee
shall immediately notify the Servicer of the occurrence of such
Event of Default. Other than with respect to an Event of Default
described in clause (g) above, on or after the receipt by the
Servicer of such written notice, or on or after the date of such
automatic termination, all authority and power of the Servicer
under this Agreement (including the requirement to make Advances),
whether with respect to the Certificates or the Mortgage Loan
(other than its capacity, if any, as holder of a Certificate) 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 the Servicer and at the Servicer's sole expense, 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 Servicer agrees to provide promptly (and in any
event no later than three Business Days subsequent to such notice)
the Trustee with all documents and records requested by it to
enable it to assume the Servicer functions hereunder, and to
cooperate with the Trustee in effecting the termination of the
Servicer's responsibilities and rights hereunder, including,
without limitation, the transfer within one Business Day to the
Trustee or its duly appointed agent for administration by it of all
cash which shall at the time have been or should have been credited
by the Servicer to the Distribution Accounts and the Certificate
Account or thereafter be received with respect to the Mortgage Loan
(provided, however, that notwithstanding anything to the contrary
in this Section 7.1, the Servicer shall continue to be entitled to
receive all amounts accrued or owing to it under this Agreement on
or prior to the date of such termination, whether in respect of
Interest Advances or Servicing Advances or otherwise, less any sums
owed the Trust Fund in accordance with the terms hereof). Upon the
occurrence of any Event of Default hereunder known to a Responsible
Officer of the Trustee, the Trustee shall give the Rating Agency
written notice of the occurrence thereof. The Trustee shall not be
deemed to have breached any obligations hereunder as a result of a
failure to make or delay in making any distribution as and when
required hereunder caused by the failure of the Servicer to remit
any amounts received by it or to deliver any documents held by it
with respect to the Mortgage Loan. Upon the occurrence of an Event
of Default requiring the appointment of a replacement Servicer
hereunder, all reasonable costs and expenses (including attorneys'
fees and setup costs) incurred by the Trustee or the
Certificateholders in connection with the appointment of a
successor servicer, including, but not limited to, transferring the
Mortgage File to the successor servicer and, if applicable,
amending this Agreement to reflect such succession as Servicer
pursuant to this Section 7.1 shall be paid by the predecessor
servicer upon presentation of reasonable documentation of such
costs and expenses. The agreement set forth in the preceding
sentence shall survive termination of the predecessor servicer's
rights and obligations hereunder. If within a reasonable time
following the reasonable, good faith efforts of the Trustee to
recover such expenses from the predecessor servicer, the
predecessor servicer does not reimburse the Trustee for such
expenses, such expenses shall be reimbursed by the Trust Fund.
Section 7.2 Remedies of Trustee. 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 7.1 hereof, shall have the right, in its own
name 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 filing of proofs of claim and debt in
connection therewith). 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.
Section 7.3 Directions by Certificateholders and Duties
of Trustee During Event of Default. During the continuance of any
Event of Default, Holders of Certificates evidencing not less than
a majority of the Aggregate Certificate Balance may direct 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; provided, however,
that the Trustee shall be under no obligation to pursue any such
remedy, or to exercise any of the trusts or powers vested in it by
this Agreement (including, without limitation, (a) the conducting
or defending of any administrative action or litigation hereunder
or in relation hereto, and (b) the terminating of the Servicer or
any successor servicer from its rights and duties as Servicer
hereunder) at the request, order or direction of any of the
Certificateholders, unless such Certificateholders shall have
offered to the Trustee security or indemnification satisfactory to
the Trustee against the costs, expenses and liabilities which may
be incurred therein or thereby and, provided, further, that the
Trustee shall have the right to decline to follow any such
direction if the Trustee, in accordance with an Opinion of Counsel
(obtained at the expense of the Trust Fund), determines that the
action or proceeding so directed may not lawfully be taken or if
the Trustee in good faith determines that the action or proceeding
so directed would involve it in personal liability or be unjustly
prejudicial to the non-assenting Certificateholders.
The Trustee or any successor Servicer shall, upon gaining
access to the Accounts after termination of the Servicer's rights
and obligations pursuant to Section 7.1 hereof, apply the proceeds
of any Account to pay any portion of the required debt service
payment on the Mortgage Notes if the Servicer has not made a
Interest Advance with respect to such amount as required pursuant
to Section 3.17 hereof.
Section 7.4 Action upon Certain Failures of the Servicer
and upon Event of Default. In the event that a Responsible Officer
of the Trustee shall have actual knowledge of any failure of the
Servicer specified in Section 7.1(b) hereof which would become an
Event of Default upon the Servicer's failure to remedy the same
after notice, the Trustee shall give notice thereof to the
Servicer. For all purposes of this Agreement, in the absence of
actual knowledge by a Responsible Officer of the Trustee, the
Trustee shall not be deemed to have knowledge of any Event of
Default.
Section 7.5 Trustee to Act; Appointment of Successor.
(a) On and after the time (1) the Servicer receives a notice of
termination pursuant to Section 7.1 hereof, (2) the Servicer has
resigned or is deemed to have resigned pursuant to Section 6.4
hereof or (3) the Trustee receives the resignation of the Servicer
evidenced by an Opinion of Counsel pursuant to Section 6.4 hereof,
the Trustee shall immediately be the successor in all respects to
the Servicer in its capacity as Servicer under this Agreement and
the transactions set forth or provided for herein and shall have
all the rights and powers and be subject to all the
responsibilities, duties and liabilities relating thereto placed on
the Servicer hereunder and accruing after the Servicer's
termination or resignation, including the obligation to make
Interest Advances and Servicing Advances, other than (i) those
responsibilities of the Servicer with respect to its
representations and warranties under Section 2.3(a) hereof and (ii)
the Servicer's obligation to deposit amounts in respect of losses
arising prior to the termination or resignation of the Servicer
from investment of funds in any account as required pursuant to the
provisions of this Agreement; provided, however, that (x) the
Trustee, as successor Servicer, shall have the benefit of Sections
6.1, 6.2 and 6.3 hereof and (y) any failure to perform such duties
or responsibilities caused by the Servicer's failure to provide
information required by Section 7.1 hereof shall not be considered
a default by the Trustee hereunder. In its capacity as such
successor, the Trustee shall have the same limitation of liability
herein granted to the Servicer. As compensation therefor, the
Trustee shall be entitled to such compensation as the Servicer
would have been entitled to hereunder if no such notice of
termination or resignation had been given, including, without
limitation, the Servicing Fee.
(b) If pursuant to Section 7.5(a) above the Trustee
becomes successor Servicer, the Trustee shall, as soon as
practicable, but in any case within 90 days of its becoming
successor Servicer, appoint, or petition a court of competent
jurisdiction to appoint, any established commercial mortgage
servicing institution which, as confirmed by the Rating Agency,
will not adversely affect the then current ratings of any Class of
Certificates, and having a combined capital and surplus of not less
than $50,000,000 (or such lower amount as acceptable to the Rating
Agency as evidenced in a writing to the Trustee) and meeting such
other standards for a successor Servicer as are set forth herein,
as the successor to the Servicer hereunder in the assumption of all
or any part of the responsibilities, duties or liabilities of the
Servicer hereunder; provided, however, that until such appointment
and assumption, the Trustee will continue to perform the servicing
obligations pursuant to this Agreement, including the obligation to
make Interest Advances or Servicing Advances. In connection with
such appointment and assumption, the Trustee may make such
arrangements for the compensation of such successor out of payments
on the Mortgage Loan as it and such successor shall agree;
provided, however, that no such compensation shall be in excess of
that permitted the Servicer hereunder. The Trustee shall negotiate
and effect the sale, transfer and assignment of the servicing
rights and responsibilities hereunder to a qualified party. The
Trustee shall deduct all costs and expenses of the sale, transfer
and assignment of the servicing rights and responsibilities
hereunder, and of termination and assumption of servicing by the
Trustee, from any sum received by the Trustee from the successor to
the Servicer in respect of such sale, transfer and assignment.
After such deductions, the remainder of such sum shall be paid by
the Trustee to the Servicer at the time of such sale, transfer and
assignment to the Servicer's successor, net of any amounts due from
the Servicer hereunder. In the event that such funds are not
sufficient to cover such costs and expenses, the Trustee shall be
entitled to be reimbursed for such shortfall under Section 8.6.
The Trustee, the Borrowers and such successor servicer shall take
such action, consistent with this Agreement, as shall be necessary
to effectuate any such succession. Neither the Trustee nor any
successor servicer shall be deemed to be in default of any of its
obligations under this Section 7.5 if such default arises from
failure of the Servicer to timely provide all applicable books,
records and other documents necessary to effectuate the sale,
transfer or assignment of servicing rights to the Trustee or a
successor servicer in accordance with this Section 7.5.
(c) Any successor, including the Trustee, to the
Servicer as servicer hereunder shall during the term of its service
as servicer maintain in force (i) a policy or policies of insurance
covering errors and omissions in the performance of its obligations
as servicer hereunder, and (ii) a fidelity bond in respect of its
officers, employees and agents to the same extent that the Servicer
is required pursuant to Section 3.6(c).
Section 7.6 Notification to Certificateholders. (a)
Upon any termination of the Servicer or appointment of a successor
to the Servicer, in each case as provided herein, the Trustee shall
as soon as practicable give written notice thereof to the Rating
Agency and to the Certificateholders at their respective addresses
appearing in the Certificate Register.
(b) Within 30 days after a Responsible Officer of the
Trustee obtains actual knowledge of the occurrence of any Event of
Default, the Trustee shall transmit by mail to all
Certificateholders and to the Rating Agency notice of such Event of
Default known to a Responsible Officer of the Trustee, unless,
prior thereto, such Event of Default shall have been cured or
waived.
Section 7.7 Waiver of Past Events of Default. The
Holders of Certificates evidencing not less than a majority of the
Aggregate Certificate Balance may, on behalf of all Holders of
Certificates, waive any default or extend the time to cure any
default by the Servicer or the Trustee in the performance of its
obligations hereunder and its consequences, except a default in
making any required deposits to or payments from the Distribution
Account in accordance with this Agreement which has not been cured
in the manner referred to in Section 3.17(d) or Section 7.1(f)
hereof. Upon any such waiver of a past default, such default shall
cease to exist, and any Event of Default arising therefrom shall be
deemed to have been remedied for every purpose of this Agreement.
No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.1 Duties of Trustee. The Trustee, prior to
the occurrence of an Event of Default of which a Responsible
Officer of the Trustee has actual knowledge and after the curing or
waiver of all Events of Default which may have occurred or been
waived, undertakes to perform such duties and only such duties as
are specifically set forth in this Agreement. In case an Event of
Default of which a Responsible Officer of the Trustee has actual
knowledge shall have occurred (which has not been cured or waived),
the Trustee, subject to the provisions of Sections 7.1, 7.3, 7.4
and 7.5 hereof, shall exercise such of the rights and powers vested
in it by this Agreement, and use the same degree of care and skill
in its exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs. Any
permissive right of the Trustee enumerated in this Agreement shall
not be construed as a duty.
The Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or
other instruments furnished to the Trustee which are specifically
required to be furnished pursuant to any provision of this
Agreement, shall examine them to determine whether they are on
their face in the form required by this Agreement. If any such
instrument is found on its face not to 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,
and if the instrument is not corrected to the Trustee's reasonable
satisfaction, the Trustee will provide notice thereof to the
Certificateholders.
Subject to Section 8.3 hereof, 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:
(a) The duties and obligations of the Trustee shall be
determined solely by the express provisions of this Agreement and
the Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Agreement;
(b) 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;
(c) 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 this Agreement or the direction of
Holders of Certificates evidencing not less than a majority of the
Aggregate Certificate Balance (or such greater percentage of the
Aggregate Certificate Balance as may be required by this
Agreement), relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or
exercising or omitting to exercise any trust or power conferred
upon the Trustee, under this Agreement;
(d) The Trustee shall not be personally liable for any
error of judgment made in good faith by any Responsible Officer,
unless it shall be proved that the Trustee or such Responsible
Officer was negligent in ascertaining the pertinent facts;
(e) The Trustee shall not be charged with knowledge of
any failure by the Servicer to comply with the obligations of the
Servicer referred to in Section 7.1 hereof or any other act,
failure, or breach of any Person upon the occurrence of which the
Trustee may be required to act, unless a Responsible Officer of the
Trustee obtains actual knowledge of such failure or the Trustee
receives written notice of such failure from the Servicer, the
Depositor or Holders of Certificates of any Class affected thereby
evidencing, as to such Class, Percentage Interests aggregating not
less than 25%; provided, however, that the Trustee shall be deemed
to have actual knowledge of any failure of it to be provided with
any schedule, report, certification or statement scheduled to be
provided to the Trustee by this Agreement; and
(f) The provisions of Sections 8.1 through 8.4 hereof
shall apply to the Trustee acting in each of its capacities
hereunder, including Trustee, Paying Agent, Certificate Registrar
and delegee of the duties of each Tax Matters Person.
None of the provisions contained in this Agreement shall
require the Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its
duties as Trustee hereunder or, with respect to the Trustee, in the
exercise of any of its rights or powers if there is reasonable
ground for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured
to it, and none of the provisions contained in this Agreement shall
in any event require the Trustee to perform, or be responsible for
the manner of performance of, any of the obligations of the
Servicer under this Agreement, except during such time, if any, as
the Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, the Servicer in
accordance with the terms of this Agreement. Notwithstanding
anything contained herein, the Trustee shall not be responsible and
shall have no liability in connection with duties assumed by the
Paying Agent, the Mortgage Custodian, the Authenticating Agent and
the Certificate Registrar hereunder, unless the Trustee is acting
in any such capacity hereunder.
Section 8.2 Certain Matters Affecting the Trustee. (a)
Except as otherwise provided in Section 8.1 hereof:
(i) The Trustee may request and conclusively 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 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 any
written advice or opinion of counsel shall be full and
complete authorization and protection in respect of any action
taken or suffered or omitted by it hereunder in good faith and
in accordance with such advice or opinion of counsel;
(iii) Neither the Trustee nor any of its directors,
officers, employees, Affiliates or agents shall be personally
liable for any action taken, suffered or omitted by the
Trustee in good faith and reasonably determined by the Trustee
to be authorized or within the discretion or rights or powers
conferred upon the Trustee by this Agreement;
(iv) 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 and shall not be
liable for the actions or omissions of any such agents or
attorneys selected with due care or the actions or omissions
of the Servicer, any Sub-Servicer or the Depositor;
(v) The Trustee shall be under no obligation to
institute, conduct or defend any litigation hereunder or in
relation hereto at the request, order or direction 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; and
(vi) The Trustee shall not be required to provide any
surety or bond of any kind in connection with the execution or
performance of its duties hereunder.
(b) Following the Closing Date, the Trustee shall not
accept any contribution of assets to the Trust Fund not
specifically contemplated by this Agreement (i) unless the Trustee
shall have received a Nondisqualification Opinion at the expense of
the Person desiring to contribute such assets with respect to such
contribution; and (ii) if such assets include real property, unless
the Servicer has delivered to it an Officer's Certificate to the
effect that it has determined in accordance with Accepted Servicing
Practices, based solely upon the Servicer's review of a report
prepared by an Independent Contractor who meets the qualifications
set forth below, that the report concludes that such property is in
compliance with applicable Environmental Laws and that there are no
circumstances present at such property relating to the use,
management or disposal of any hazardous substances, hazardous
materials, hazardous wastes or petroleum-based materials for which
investigation, testing, monitoring, containment, clean-up or
remediation could be required under any federal, state or local law
or regulation. The environmental report to be reviewed by the
Servicer will be prepared at the expense of the Person desiring to
contribute such property. The Independent Contractor who prepares
the report shall be a Person who regularly conducts environmental
site assessments in accordance with then current standards imposed
by institutional commercial mortgage lenders and who has had not
less than five years experience in such matters.
(c) All rights of action under this Agreement or under
any of the Certificates, enforceable by the Trustee, may be
enforced by it without the possession of any of the Certificates,
or the production thereof at the trial or other proceeding relating
thereto, and any such suit, action or proceeding instituted by the
Trustee shall be brought in its name for the benefit of all the
Holders of such Certificates, subject to the provisions of this
Agreement.
Section 8.3 Trustee Not Required to Make Investigation.
Prior to the occurrence of an Event of Default hereunder known to
a Responsible Officer of the Trustee and after the curing or waiver
of all such Events of Default which may have occurred, the Trustee
shall not be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements
herein (except as specifically required by this Agreement) or to
make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond, the Mortgage, the
Mortgage Notes or other paper or document, unless requested in
writing so to do by Holders of Certificates of any Class
evidencing, as to such Class, Percentage Interests aggregating not
less than 25%; 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 such
proceeding. The expense of any such investigation shall be paid by
the Trust Fund.
Section 8.4 Trustee Not Liable for Certificates or
Mortgage Loan. The recitals contained herein and in the
Certificates (other than the authentication on the Certificates if
made by the Trustee) and information contained in any offering
document for the Certificates, except to the extent provided by the
Trustee, shall be taken as the statements of the Depositor or the
Servicer, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as
to the validity or sufficiency of this Agreement or of the
Certificates or of the Mortgage Loan or related documents. The
Trustee shall not be liable for any action or failure of any action
by the Depositor or the Servicer hereunder. The Trustee shall not
at any time have any responsibility or liability for or with
respect to the legality, validity or enforceability of the Mortgage
or the Mortgage Loan, or the perfection and priority of the
Mortgage or the maintenance of any such perfection and priority, or
for or with respect to the efficacy of the Trust Fund or its
ability to generate the payments to be distributed to
Certificateholders under this Agreement, including, without
limitation, the existence, condition and ownership of any Mortgaged
Property; the existence and enforceability of any hazard insurance
thereon; the validity of the assignment of the Mortgage Loan to the
Trust Fund or of any intervening assignment; the completeness of
the Mortgage Loan, the performance or enforcement of the Mortgage
Loan (other than if the Trustee shall assume the duties of the
Servicer pursuant to Section 7.5 hereof); the compliance by the
Depositor, the Borrowers or the Servicer with any warranty or
representation made under this Agreement or in any related document
or the accuracy of any such warranty or representation made under
this Agreement or in any related document prior to the Trustee's
receipt of notice or other discovery of any noncompliance therewith
or any breach thereof; any investment of monies by or at the
direction of the Servicer or any loss resulting therefrom; the
failure of the Servicer or any Sub-Servicer to act or perform any
duties required of it on behalf of the Trustee hereunder; or any
action by the Trustee taken at the instruction of the Servicer
(other than if the Trustee shall assume the duties of the Servicer
pursuant to Section 7.5 hereof); provided, however, that the
foregoing shall not relieve the Trustee of its obligation to
perform its duties under this Agreement. Except with respect to a
claim based on the failure of the Trustee to perform its respective
duties under this Agreement or based on the Trustee's negligence or
willful misconduct, no recourse shall be had for any claim based on
any provision of this Agreement, the Certificates, or the Mortgage
Loan or assignment thereof against the Trustee in its individual
capacity, the Trustee shall not have any personal obligation,
liability or duty whatsoever to any Certificateholder or any other
Person with respect to any such claim, and any such claim shall be
asserted solely against the Trust Fund or any indemnitor who shall
furnish indemnity as provided in this Agreement. The Trustee shall
not have any responsibility for filing any financing or
continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security
interest or lien granted to it hereunder (unless the Trustee shall
have become the successor Servicer) or to prepare or file any
Securities and Exchange Commission filing, if any, for the Trust
Fund or to record this Agreement. The Trustee shall not be
accountable for the use or application by the Depositor or the
Servicer of any of the Certificates or of the proceeds of such
Certificates or for the use or application of any funds paid to the
Servicer in respect of the Mortgage Loan deposited into the
Distribution Accounts or assets on deposit in the Escrow Accounts,
or for investment of any such amounts.
None of the Trustee or any of its respective directors,
officers, employees, Affiliates or agents shall be under any
liability to the Trust Fund or the Certificateholders for any
action taken or for refraining from the taking of any action in
good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the
Trustee or any such person against any liability which would
otherwise be imposed by reason of willful misconduct, bad faith or
negligence in the performance of duties. The Trustee and any
director, officer, employee or agent of the Trustee shall be
indemnified by amounts on deposit in the Distribution Accounts and
the Certificate Account and held harmless against any loss,
liability or expense incurred in connection with or related to the
Trustee's performance of its powers and duties under this Agreement
(including, with respect to the Trustee, performance under Section
8.1 hereof), or any action relating to this Agreement or the
Certificates, other than any loss, liability or expense incurred by
any such Person by reason of willful misconduct, bad faith or
negligence in the performance of duties. The indemnification
provided hereunder shall survive the resignation or removal of the
Trustee and the termination of this Agreement.
Section 8.5 Trustee May Own Certificates. The Trustee
and any agent of the Trustee in its individual or any other
capacity may become the owner or pledgee of the Certificates and
may deal with the Depositor and the Servicer with the same rights
it would have if it were not Trustee or such agent.
Section 8.6 Trustee's Fees and Expenses. (a) The
Servicer shall disburse to the Trustee, and the Trustee or any
successor Trustee shall be entitled to receive from the
Distribution Account as contemplated by Section 3.3(e)(vii) hereof,
the Trustee Fee (which shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust) for
all services rendered by it in the execution of the trusts hereby
created and in the exercise and performance of any of the powers
and duties hereunder of the Trustee. The Servicer shall not be
personally liable for the Trustee Fee.
(b) The Trustee shall each be paid or reimbursed upon
its request for all reasonable expenses, disbursements and advances
(except while acting in the capacity of successor Servicer in which
capacity it shall be entitled to the compensation pursuant to
Section 7.5(a)) incurred or made by the Trustee in accordance with
any of the provisions of this Agreement (including the reasonable
compensation and the expenses and disbursements of its counsel and
of all persons not regularly in its employ) as set forth in Section
3.3(e)(v) except any such expense, disbursement or advance as may
arise from its negligence or bad faith; provided, however, that the
Trustee shall not refuse to perform any of its duties hereunder
solely as a result of the failure of the Trust Fund to pay the
Trustee's fees and expenses. In no event shall the Trustee be
entitled to reimbursement with respect to any such expense,
disbursement or advances from the Trust Fund except to the extent
specifically permitted by the terms of this Agreement including
reimbursement to the Trustee in the capacity of successor Servicer.
(c) The Trustee shall pay the fees and expenses of the
Certificate Registrar, the Paying Agent, the Mortgage Custodian and
the Authenticating Agent. The Trustee shall pay all normal, on-
going expenses incurred by it in connection with its routine
activities hereunder. Neither the Servicer nor the Trustee shall
be entitled to reimbursement therefor except as specifically
provided in this Agreement including, if applicable, reimbursement
to the Trustee in the capacity of successor Servicer.
If the Servicer or the Trustee receives a request or
inquiry from a Borrower or any Certificateholder the response to
which would, in the Servicer's or the Trustee's good faith business
judgment require the assistance of Independent legal counsel to the
Servicer or the Trustee, the cost of which would not be an expense
of the Trust Fund hereunder, then the Servicer or the Trustee, as
the case may be, shall not be required to take any action in
response to such request or inquiry unless such Borrower or such
Certificateholder, as applicable, makes arrangements for the
payment of the Servicer's or the Trustee's expenses associated with
such counsel (including, without limitation, posting an advance
payment for such expenses) satisfactory to the Servicer or the
Trustee, as the case may be, in its sole discretion. Unless such
arrangements have been made, the Servicer or the Trustee, as the
case may be, shall have no liability to any Person for the failure
to respond to such request or inquiry.
(d) The Trust Fund shall indemnify the Trustee from,
and hold it harmless against, any and all losses, liabilities,
damages or claims incurred in connection with any legal action
relating to this Agreement or unanticipated "out-of-pocket" costs
and expenses (other than the expense of any employee's compensation
and any expense allocable to the Trustee's overhead, but including
reasonable attorneys' fees) arising in respect of this Agreement or
the Certificates other than those resulting from the willful
misconduct, bad faith or negligence of the Trustee.
(e) This Section shall survive the termination of this
Agreement or the resignation or removal of the Trustee as regards
rights accrued prior to such resignation or removal.
Section 8.7 Eligibility Requirements for Trustee. The
Trustee hereunder shall not be an Affiliate of the Servicer or any
Borrower (unless the Trustee succeeds to the obligations of the
Servicer pursuant to Article Seven) and shall at all times be a
corporation or association organized and doing business under the
laws of any State or the United States or a nationally chartered
bank, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least
$100,000,000 and subject to supervision or examination by federal
or state authority and which, as confirmed by the Rating Agency,
will not adversely affect the then current rating of any Class of
the Certificates; provided, however, that the senior unsecured debt
of the Trustee shall at all times be rated not less than "AA-" by
the Rating Agency (whether or not such rating is published by the
Rating Agency) (unless a replacement trustee having a rating of not
less than "AA" or unless the Trustee or such replacement Trustee is
otherwise acceptable to the Rating Agency) or, if not rated (either
published or unpublished) by the Rating Agency, an equivalent
rating by any two of Xxxxx'x Investors Service, Inc., Standard &
Poor's Rating Group or Duff & Xxxxxx Rating Co. If such
corporation or association publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this
Section the combined capital and surplus of such corporation or
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 8.8 hereof.
Section 8.8 Resignation and Removal of Trustee. The
Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice of resignation to the
Servicer, the Borrowers and the Depositor. Such notice also shall
be furnished to the Rating Agency and the Certificateholders. Upon
receiving such notice of resignation of the Trustee, the Borrowers
shall, with the written consent of the Servicer, appoint a
successor by written instrument, in quadruplicate, one copy of
which instrument shall be delivered to each of the resigning
Trustee and one copy to the successor trustee. If no successor
trustee shall have been so appointed and have accepted appointment
within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction
for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.7 hereof and shall fail
to resign after written request for the Trustee's resignation, as
the case may be, by the Servicer or the Depositor or as required by
Section 8.7 hereof, 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, with or without cause, the
Servicer may remove the Trustee and appoint a successor trustee by
written instrument, in quadruplicate, one copy of which instrument
shall be delivered to the Trustee so removed and one copy each to
the successor trustee and the successor fiscal agent.
Holders of Certificates evidencing not less than a
majority by Certificate Balance of the Certificates, may at any
time remove the Trustee and appoint a successor trustee by written
instrument or instruments, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which
instrument or instruments shall be delivered to each of the
Depositor and the Servicer, one complete set to the Trustee so
removed and one complete set to the successor trustee.
Any resignation or removal of the Trustee and appointment
of a successor trustee pursuant to any of the provisions of this
Section 8.8 shall become effective upon acceptance of appointment
by the successor trustee as provided in Section 8.9 hereof.
Section 8.9 Successor Trustee. Any successor trustee
appointed as provided in Section 8.8 hereof shall execute,
acknowledge and deliver to the Servicer, the Depositor 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 like effect as if originally named
as trustee herein. The predecessor trustee shall deliver or cause
to be delivered to the successor trustee the Mortgage File and
related documents and statements held by it hereunder, and the
Servicer and the Depositor and the predecessor trustee shall
execute and deliver such instruments and do such other things as
may reasonably be required for more fully and certainly vesting and
confirming in the successor trustee all such rights, powers, duties
and obligations.
No successor trustee agent shall accept appointment as
provided in this Section unless at the time of such acceptance such
successor trustee shall be eligible under the provisions of Section
8.7 hereof.
Upon acceptance of appointment by a successor trustee as
provided in this Section 8.9, the successor trustee shall mail
notice at the successor trustee's expense of the succession of such
trustee hereunder to all Holders of Certificates at their addresses
as shown in the Certificate Register and to the Rating Agency. If
the successor trustee fails to mail such notice within ten days
after acceptance of appointment by the successor trustee, the
Servicer shall cause such notice to be mailed at the expense of the
successor trustee.
Section 8. Merger or Consolidation of Trustee. Any
Person into which the Trustee may be merged or converted or with
which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which the Trustee shall be
a party, or any Person succeeding to all or substantially all of
the corporate trust business of the Trustee, shall be the successor
of the Trustee hereunder, provided that such Person shall be
eligible under the provisions of Section 8.7 hereof, without the
execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 8.11 Appointment of Co-Trustee, Separate Trustee
or Mortgage Custodian. (a) Notwithstanding any other provisions
hereof, at any time, the Trustee, the Depositor or the Holders of
Certificates evidencing a majority of the Aggregate Certificate
Balance shall each have the power from time to time to appoint one
or more Persons to act either as co-trustees jointly with the
Trustee, or as separate trustees, or as custodians, for the purpose
of holding title to, foreclosing or otherwise taking action with
respect to any Mortgaged Property outside the state where the
Trustee has its principal place of business, where such separate
trustee or co-trustee is necessary or advisable (or the Trustee is
advised by the Servicer that such separate trustee or co-trustee is
necessary or advisable) under the laws of any state in which a
property securing the Mortgage Loan is located or for the purpose
of otherwise conforming to any legal requirement, restriction or
condition in any state in which a property securing the Mortgage
Loan is located or in any state in which any portion of the Trust
Fund is located. The Servicer shall advise the Trustee if the
Servicing Officers of the Servicer have actual knowledge that a
separate trustee or co-trustee is necessary or advisable as
aforesaid. The separate trustees, co-trustees, or custodians so
appointed shall be trustees or custodians for the benefit of all
the Certificateholders and shall have such powers, rights and
remedies as shall be specified in the instrument of appointment;
provided, however, that no such appointment shall, or shall be
deemed to, relieve the Trustee of any of its duties hereunder.
(b) Every separate trustee, co-trustee, and custodian
shall, to the extent permitted by law, be appointed and act subject
to the following provisions and conditions:
(i) all powers, duties, obligations and rights
conferred upon the Trustee in respect of the receipt,
custody and payment of moneys shall be exercised solely
by the Trustee;
(ii) all other rights, powers, duties and
obligations conferred or imposed upon the Trustee shall
be conferred or imposed upon and exercised or performed
by the Trustee and such separate trustee, co-trustee, or
custodian jointly, except to the extent that under any
law of any jurisdiction in which any particular act or
acts are to be performed (whether as Trustee hereunder or
as successor to the Servicer hereunder) the Trustee shall
be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and
obligations, including the holding of title to the Trust
Fund or any portion thereof in any such jurisdiction,
shall be exercised and performed by such separate
trustee, co-trustee, or custodian;
(iii) no trustee or custodian hereunder shall be
personally liable by reason of any act or omission of any
other trustee or custodian hereunder; and
(iv) the Trustee or the Holders of Certificates
evidencing a majority of the Aggregate Certificate
Balance may at any time accept the resignation of or
remove any separate trustee, co-trustee or custodian, so
appointed by it or them, if such resignation or removal
does not violate the other terms of this Agreement.
(c) Any notice, request or other writing given to the
Trustee shall be deemed to have been given to each of the then
separate trustees and co-trustees, as effectively as if given to
each of them. Every instrument appointing any separate trustee,
co-trustee or custodian shall refer to this Agreement and the
conditions of this Article 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, co-trustee or custodian may,
at any time, constitute the Trustee its agent or attorney-in-fact
with full power and authority, to the extent not prohibited by law,
to do any lawful act under or in respect of this Agreement on its
behalf and in its name. If any separate trustee, co-trustee or
custodian shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and
trusts shall vest in and be exercised by the Trustee, to the extent
permitted by law, without the appointment of a new or successor
trustee.
(e) No separate trustee, co-trustee or custodian
hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 8.7 hereunder and no notice to
Certificateholders of the appointment shall be required under
Section 8.9 hereof.
(f) The Trustee agrees to instruct the co-trustees, if
any, to the extent necessary to fulfill the Trustee's obligations
hereunder.
(g) The Trustee shall pay the reasonable compensation
of the co-trustees or separate trustees appointed pursuant to this
Section 8.11 hereof (other than expenses, disbursements and
advances made by such co-trustees or separate trustees, which shall
be paid out of the Trust Fund to the extent, and in accordance with
the standards, specified in Section 8.6 hereof).
(h) Subject to the consent of the Servicer, which
consent shall not be unreasonably withheld, the Trustee may appoint
at any time a Mortgage Custodian to act as the agent of the Trustee
for purposes of holding the Mortgage File provided that such
appointment shall not adversely affect the ratings of any
Certificates by the Rating Agency. The Trustee shall serve as the
initial Mortgage Custodian hereunder. Upon the appointment of a
Mortgage Custodian other than the Trustee, the Servicer, the
Trustee and the Mortgage Custodian shall enter into a mortgage
custodian agreement.
(i) The Trustee, the Depositor or the Holders of
Certificates evidencing a majority by Certificate Balance of the
Certificates, may at any time accept the resignation of or remove
any separate trustee or co-trustee so appointed by it or them, if
such removal does not violate the other terms of this Agreement.
(j) The provisions of Sections 8.1, 8.2, 8.3, 8.4 and
8.5 hereof applicable to the Trustee shall apply as well to the
Mortgage Custodian, the Authenticating Agent, the Paying Agent and
the Certificate Registrar.
Section 8.F Authenticating Agents. (a) The Trustee
may appoint one or more Authenticating Agents which shall be
authorized to act on behalf of the Trustee in executing and
authenticating Certificates. Wherever reference is made in this
Agreement to the execution and authentication of Certificates by
the Trustee or the Trustee's certificate of authentication, such
reference shall be deemed to include execution and authentication
on behalf of the Trustee by an Authenticating Agent and a
certificate of authentication executed on behalf of the Trustee by
an Authenticating Agent. Each Authenticating Agent must be
acceptable to the Servicer and must be a corporation or financial
institution organized and doing business under the laws of the
United States of America or of any state and having a principal
office and place of business in the Borough of Manhattan, the City
and State of New York, having a combined capital and surplus of at
least $15,000,000, authorized under such laws to engage in a trust
business and subject to supervision or examination by federal or
state authorities. The Trustee shall serve as the initial
Authenticating Agent hereunder.
(b) Any Person into which any Authenticating Agent may
be merged or converted or with which it may be consolidated, or any
Person resulting from any merger, conversion or consolidation to
which any Authenticating Agent shall be a party, or any Person
succeeding to the corporate agency business of any Authenticating
Agent, shall continue to be the Authenticating Agent without the
execution or filing of any paper or any further act on the part of
the Trustee or the Authenticating Agent, provided that such Person
meets the requirements of Section 8.12(a) hereof.
(c) Any Authenticating Agent may at any time resign by
giving at least 30 days' advance written notice of resignation to
the Trustee, the Servicer and the Borrowers. The Trustee may at
any time terminate the agency of any Authenticating Agent by giving
written notice of termination to such Authenticating Agent, the
Servicer and the Borrowers. Upon receiving a notice of resignation
or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible in accordance with
the provisions of this Section 8.12, the Trustee may appoint a
successor Authenticating Agent, shall give written notice of such
appointment to the Servicer and the Borrowers and shall mail notice
of such appointment to all Holders of Certificates. Any successor
Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers, duties and
responsibilities of its predecessor hereunder, with like effect as
if originally named as Authenticating Agent. No such
Authenticating Agent shall be appointed unless eligible under the
provisions of this Section 8.12. No Authenticating Agent shall
have responsibility or liability for any action taken by it as such
at the direction of the Trustee. Any Authenticating Agent shall be
entitled to reasonable compensation for its services and, if paid
by the Trustee, it shall be a reimbursable expense pursuant to
Section 8.6 hereof.
Section 8.13 Compliance with Withholding Requirements.
Notwithstanding any other provision of this Agreement, the Paying
Agent shall comply with all federal withholding requirements with
respect to payments to Certificateholders of interest or original
issue discount that the Paying Agent reasonably believes are
applicable under the Code. The consent of Certificateholders shall
not be required for any such withholding. Without limiting the
foregoing, the Paying Agent agrees that it will not withhold with
respect to payments of interest or original issue discount in the
case of a Certificateholder which has furnished or caused to be
furnished an effective Form W-8 or an acceptable substitute form or
a successor form and which is not a "10 percent shareholder" within
the meaning of Code Section 871(h)(3)(B) or a "controlled foreign
corporation" described in Code Section 881(c)(3)(C) with respect to
the Trust REMIC, the Trust Fund or the Depositor or otherwise not
eligible for the exemption from withholding for "portfolio
interest" within the meaning of Code Sections 871(h) and 881(c).
In the event the Paying Agent withholds any amount from interest or
original issue discount payments or advances thereof to any
Certificateholder pursuant to federal withholding requirements, the
Paying Agent shall indicate the amount withheld to such
Certificateholder.
Section 8.14 Massachusetts Filings. The Trustee shall
make all filings required under Massachusetts General Laws, Chapter
182, Sections 2 and 12.
ARTICLE IX
TERMINATION
Section 9.1 Termination. (a) Subject to Section 9.2
hereof, the respective obligations and responsibilities of the
Servicer, the Depositor, the Paying Agent and the Trustee created
hereby (other than the obligation of the Paying Agent to make
certain payments to Certificateholders after the Final Distribution
Date and the obligation of the Servicer to disburse money from the
Distribution Account in payment of any sums then due the Trustee)
shall terminate upon the last action required to be taken by the
Paying Agent on the Final Distribution Date pursuant to this
Article IX upon the earlier of (i) the later of (A) the final
payment on the Mortgage Loan or (B) the liquidation of the last
Foreclosed Property remaining in the Trust Fund and the
distribution of the proceeds thereof in accordance with this
Agreement, (ii) the termination of this Agreement pursuant to
Section 9.1(b) below, (iii) the sale of the Mortgage Notes pursuant
to Section 9.1(c) below and (iv) the termination of the Trust Fund
pursuant to Section 9.1(d) below; provided, however, that in no
event shall the trust created hereby continue beyond the expiration
of twenty-one years from the death of the last survivor of the
descendants of Xxxxxx X. Xxxxxxx, the late ambassador of the United
States to the Court of St. Xxxxx, living on the date hereof.
(b) At any time when the Certificate Balance of the
Certificates (other than the R Certificates) is less than or equal
to 10% of the Certificate Balance of the Certificates (other than
the R Certificates) as of the Closing Date, the Depositor may give
written notice to the Trustee that it elects to purchase the
Mortgage Loan, at the price and on the other terms and conditions
set forth in Section 9.1(c) hereof, including the delivery to the
Trustee of the Opinion of Counsel referred to therein. Such
purchase shall be made in accordance with Section 9.2 hereof.
(c) The Servicer may on any Due Date purchase the
Mortgage Loan and any other property, if any, remaining in the
Trust Fund, provided that on the Distribution Date preceding the
date of such purchase, the Mortgage Loan Principal Balance, after
giving effect to distributions of principal made on such
Distribution Date, is not more than 10% of the initial Mortgage
Loan Principal Balance. Upon receipt of the Termination Price set
forth below, the Trustee shall (i) cause to be released to the
Servicer the Mortgage File and (ii) on the Distribution Date
following such Due Date, distribute the Termination Price to the
Certificateholders as a Voluntary Prepayment other than in
connection with a release of Mortgaged Property pursuant to Section
5(c) of each Mortgage Note. The "Termination Price" shall equal
the sum of (1) the greater of (x) 100% of the Mortgage Loan
Principal Balance on the day of such purchase plus accrued interest
to the last day of the Interest Accrual Period during which such
purchase occurs (plus any unreimbursed Servicing Advances and net
of unreimbursed Interest Advances) and (y) the fair market value of
the Mortgage Loan, and (2) the fair market value of any other
property remaining in the Trust Fund, such fair market value, in
the case of the Mortgage Loan, Foreclosed Property or other
property, to be determined by an Appraiser mutually agreed upon by
the Servicer, the Trustee and a majority in Certificate Balance of
the Class R Certificateholders. As a condition to the purchase of
the assets of the Trust Fund pursuant to this Section 9.1(c), the
Servicer must deliver to the Trustee and the Depositor an Opinion
of Counsel, which shall be an expense of the Servicer, stating that
such termination will be a "qualified liquidation" of the Trust
REMIC under Section 860F of the Code. Such purchase shall be made
in accordance with Section 9.2 hereof. Upon consummation of the
sale of the property included in the Trust Fund, the Mortgage
Custodian shall deliver the Mortgage Collateral Security to the
Servicer.
(d) Notice of any termination, specifying the Final
Distribution Date (which shall be a date that would otherwise be a
Distribution Date) upon which the Certificateholders may surrender
their Certificates to the Trustee for payment of the final
distribution and cancellation, shall be given promptly by the
Paying Agent by letter to Certificateholders mailed not earlier
than the 15th day and not later than the 25th day of the month next
preceding the month of such Final Distribution Date specifying (i)
the Final Distribution Date upon which final payment of the
Certificates will be made upon presentation and surrender of
Certificates at the office or agency of the Trustee therein
designated, (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 office or agency of the
Trustee therein specified.
(e) Upon presentation and surrender of the
Certificates, the Paying Agent shall cause to be distributed to the
holders of such Certificates on the Final Distribution Date, the
amounts payable to such Certificateholders in accordance with
Section 4.1 hereof. Upon any such termination, the Paying Agent
shall terminate the Certificate Account and the Default Interest
Account, and shall request the Servicer and the Trustee to
terminate any other account or fund maintained with respect to the
Certificates, subject to the Paying Agent's obligation hereunder to
hold all amounts payable to Certificateholders in trust without
interest pending such payment.
(f) In the event that all of the Certificateholders
shall not surrender their Certificates for final payment and
cancellation on or before the Final Distribution Date, the Paying
Agent shall on such date cause all funds in the Certificate Account
not distributed in final distribution to Certificateholders to be
withdrawn from the Certificate Account and credited to the
remaining Certificateholders by depositing such funds in a separate
escrow account held uninvested for the benefit of such
Certificateholders and the Paying Agent shall give a second written
notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution
with respect thereto. If within one year after the second notice
all the Certificates shall not have been surrendered for
cancellation, the Trustee may take appropriate steps, or may
appoint an agent to take appropriate steps, to contact the
remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds
on deposit in such escrow account. If the remaining
Certificateholders do not surrender their Certificates for
cancellation and receipt of the final distribution with respect
thereto within two years following the Final Distribution Date, the
Paying Agent shall pay the amount of such unclaimed final
distribution to the Borrowers and thereafter such remaining
Certificateholders shall look only to the Borrowers for payment of
such final distribution as general unsecured creditors of the
Borrowers.
Section 9.2 Additional Termination Requirements. (a)
In connection with any termination pursuant to Section 9.1 hereof,
the Trust Fund and the Trust REMIC shall be terminated in
accordance with the following additional requirements, unless the
Servicer has obtained and paid for (at its own expense), and the
Trustee has been supplied with an Opinion of Counsel to the effect
that the failure of the Trust Fund to comply with the requirements
of this Section 9.2 will not (i) result in the imposition of taxes
on "prohibited transactions" on the Trust REMIC as defined in
Section 860F of the Code, or (ii) cause the Trust REMIC to fail to
qualify as a REMIC at any time that any Regular Certificates are
outstanding:
(i) Within 89 days prior to the Final
Distribution Date set forth in the notice given by the
Trustee under Section 9.1 hereof, the Trustee shall adopt
a plan of complete liquidation of the Trust REMIC,
meeting the requirements of a qualified liquidation under
the REMIC Provisions;
(ii) At or after the time of adoption of such
a plan of complete liquidation and at or prior to the
Final Distribution Date, the Servicer on behalf of the
Trustee shall sell or cause to be sold any remaining
assets of the Trust Fund included in the Trust REMIC.
(iii) At the time of the making of the final
payment on the Certificates other than the Class R
Certificates, the Trustee shall distribute or credit, or
cause to be distributed or credited, to the Holders of
the Class R Certificates all cash on hand in the pool of
assets constituting the Trust REMIC after such final
payment of the Certificates, other than cash retained to
meet claims, and the Trust Fund, and the Trust REMIC,
shall terminate at that time; and
(iv) In no event may the final payment on the
Certificates (except to the extent permitted in Section
9.1 hereof with respect to Certificateholders who fail to
surrender their Certificates) be made after the 89th day
from the date on which the plan of complete liquidation
for the Trust REMIC is adopted.
(b) By acceptance of the Class R Certificates, the
Holders thereof hereby authorize the Trustee to adopt such a plan
of complete liquidation in the form proposed by the Holders of the
Class R Certificates upon the written request of the Servicer and
agree to take such other action in connection therewith as may be
reasonably requested by the Servicer or the Trustee, which
authorization shall be binding upon all successor Class R
Certificateholders.
(c) On the final federal income tax return for the
Trust REMIC, the Trustee shall attach a statement specifying the
date of adoption of the plan of liquidation.
Section 9.3 Trusts Irrevocable. Except as expressly
provided herein, all trusts created hereby are irrevocable.
ARTICLE X
REMIC ADMINISTRATION
Section 10.1 REMIC Administration. (a) An election
will be made by the Trustee to treat the segregated pool of assets
consisting of (i) the Mortgage Loan (other than the right to
receive Default Interest), (ii) all amounts held from time to time
in the Distribution Account and the Certificate Account, (iii) any
property which secures the Mortgage Loan and which is acquired by
foreclosure, deed-in-lieu of foreclosure or otherwise and (iv)
certain other rights set forth herein as a REMIC under the Code.
Such election will be made on Form 1066 or other appropriate
federal tax or information return for the taxable year ending on
the last day of the calendar year in which the Certificates are
issued. For purposes of such election, the rights of the Holders
of Class A, Class B, Class C and Class D Certificates (other than
the right to receive Default Interest) shall be designated as the
"regular interests" in the Trust REMIC and the rights of the
Holders of the Class R Certificates shall be designated as the
"residual interest" in the Trust REMIC. The final scheduled
distribution date for the Class A, the Class B, the Class C, the
Class D and the Class R Certificates shall be the Final Certificate
Distribution Date. The portion of the Trust Fund holding the right
to receive Default Interest shall be treated as a grantor trust or
as a mere custodial arrangement for United States Federal income
tax purposes and the Trustee shall file Form 1041 with respect to
such portion of the Trust Fund.
(b) The Closing Date is hereby designated as the
"Startup Day" of the Trust REMIC within the meaning of Section
860G(a)(9) of the Code.
(c) The Trustee shall pay the ordinary and usual
expenses of the Trust REMIC in connection with the preparation,
filing and mailing of tax information reports and returns required
to be filed under the Code (not including fees for filing which are
materially increased or any taxes, however denominated, including
any additions to tax, penalties and interest, or any professional
fees or expenses related to any administrative or judicial
proceedings with respect to the Trust REMIC that involve the
Internal Revenue Service or state tax authorities); provided that,
if, in its reasonable discretion, it deems it necessary, in order
to protect the status of the Trust REMIC or prevent the Trust Fund
or the Certificateholders or any of them from the imposition of
tax, to retain professionals to assist it in any such proceedings
(other than routine proceedings not involving a controversy) then
such fees and expenses may be reimbursed from the Distribution
Account pursuant to Section 3.3(e) hereof and the Class R
Certificateholders shall be required to reimburse the Trust Fund
for such expenses.
(d) The Trustee shall cause to be prepared, signed, and
timely filed with the Internal Revenue Service, on behalf of the
Trust REMIC, an application for a taxpayer identification number
for the Trust REMIC on Internal Revenue Service Form SS-4. The
Trustee, upon receipt from the Internal Revenue Service of the
Notice of Taxpayer Identification Number Assigned, shall promptly
forward a copy of such notice to the Depositor and the Servicer.
The Trustee shall prepare and file Form 8811 on behalf of the Trust
REMIC and shall designate an appropriate Person to respond to
inquiries by or on behalf of Certificateholders for original issue
discount and related information in accordance with applicable
provisions of the Code.
(e) The Trustee shall prepare or cause to be prepared
on behalf of the Trust Fund and the Trust REMIC and sign, and file
all of the Trust Fund's (including, without limitation, the portion
of the Trust Fund applicable to Default Interest, if any) and the
Trust REMIC's federal and state income or franchise tax and
information returns as each of the Trust Fund's and the Trust
REMIC's direct representative. Such returns shall be prepared at
the Trustee's expense, except that if additional state tax returns
are required to be filed in more than three states, the Trustee
shall be entitled, with respect to any such additional filings, to
(i) be paid a reasonable fee and (ii) receive its reasonable costs
and expenses, both as amounts reimbursable by the Depositor. The
Depositor and the Servicer shall provide on a timely basis to the
Trustee or its designee such information with respect to the Trust
Fund or the Trust REMIC as is in its possession, which the
Depositor or the Servicer has received or prepared by virtue of its
role as Depositor or Servicer hereunder and reasonably requested by
the Trustee to enable it to perform its obligations under this
subsection, and the Trustee shall be entitled to conclusively rely
on such information in the performance of its obligations
hereunder. The Trustee shall have no responsibility to file
returns or to take any other action under this Article X with
respect to any tax matters with any state or local jurisdiction
other than the States of New York, Massachusetts or Texas unless
required in writing by another jurisdiction or notified by an
Opinion of Counsel delivered to it by one of the parties hereto.
Subject to Section 6.3(a) hereof, the Servicer shall indemnify the
Trust REMIC for any liability of or assessment against the Trust
REMIC and any expenses incurred in connection with such liability
or assessment (including attorney's fees) resulting from any error
in any of such tax or information returns resulting from errors in
the information provided by the Servicer caused by the negligence,
willful misconduct or bad faith of the Servicer. The Trustee shall
indemnify the Trust REMIC for any liability of or assessment
against the Trust REMIC and any expense incurred in connection with
such liability or assessment (including attorney's fees) resulting
from any error in any of such tax or information returns resulting
from errors in the preparation of such returns caused by the
negligence, wilful misconduct or bad faith of the Trustee. Each
indemnified party shall immediately notify the indemnifying party
or parties of the existence of a claim for indemnification under
this Section 10.1(e), and provide the indemnifying party or
parties, at the expense of such indemnifying party or parties, an
opportunity to contest the tax or assessment or expense giving rise
to such claim, provided that failure to give such notification
shall not affect the indemnification rights in favor of the Trust
REMIC under this Section 10.1(e). Any such indemnification shall
survive the resignation or termination of the Servicer or the
Trustee or the termination of this Agreement.
(f) The Trustee shall forward to the Depositor copies
of quarterly and annual REMIC tax returns and Form 1099 information
returns and such other information within the control of the
Trustee as the Depositor may reasonably request in writing.
Moreover, the Trustee shall forward to each Certificateholder such
forms and furnish such information within its control as are
required by the Code to be furnished to them, shall prepare and
file annual reports and file copies of this Agreement with the
appropriate state authorities as may to the actual knowledge of a
responsible officer of the Trustee be required by applicable law
and shall prepare and disseminate to Certificateholders Forms 1099
(or otherwise furnish information within the control of the
Trustee) to the extent required by applicable law. The Trustee
will make available to any Certificateholder any tax-related
information required to be made available pursuant to the Code and
any Treasury Regulations thereunder.
(g) Subject to subsection (e) of this Section with 10.1
respect to certain reimbursements, the Trustee shall perform on
behalf of the Trust REMIC all reporting and other tax compliance
duties that are the responsibility of the Trust REMIC under the
Code, REMIC Provisions, or other compliance guidance issued by the
Internal Revenue Service or any state taxing authority. Among its
other duties, the Trustee shall provide (i) to the Internal Revenue
Service or other Persons (including, but not limited to, the
transferor of a Residual Certificate, to a Disqualified
Organization or to an agent that has acquired a Residual
Certificate on behalf of a Disqualified Organization) such
information as is necessary for the application of any tax relating
to the transfer of a Residual Certificate to any Disqualified
Organization and (ii) to the Certificateholders such information or
reports as are required by the Code or REMIC Provisions. Each of
the Depositor and the Servicer shall provide on a timely basis (but
in no event later than 15 days after the Trustee's request) to the
Trustee or its designee such information with respect to the Trust
REMIC as is in its possession and reasonably requested in writing
by the Trustee to enable it to perform its obligations under this
subsection.
(h) The Holder of the greatest percentage of Percentage
Interests of the Class R Certificates shall be the Tax Matters
Person for the Trust REMIC. The duties of the Tax Matters Person
for the Trust REMIC are hereby delegated to the Trustee and each
Residual Certificateholder agrees, by acceptance of its Residual
Certificate, on behalf of itself and all successor holders of such
Residual Certificate, to such delegation to the Trustee as their
agent and attorney in fact. The Trustee shall take whatever action
is necessary for the signing of such documents and designation of
a Tax Matters Person, including the designation of such Class R
Certificateholders.
(i) The Trustee, the Holders of the Residual
Certificates and the Servicer shall each exercise reasonable care,
to the extent within its control, and with respect to each of the
Trustee and the Servicer, within the scope of its express duties,
and shall each act in accordance with this Agreement and the REMIC
Provisions in order to create and maintain the status of the Trust
REMIC as a REMIC or, as appropriate, adopt a plan of complete
liquidation.
(j) The Trustee, the Holders of the Residual
Certificates and the Servicer shall not take any action or cause
the Trust REMIC to take any action that, under the REMIC
Provisions, could (i) endanger the status of the Trust REMIC as a
REMIC or (ii) result in the imposition of a tax upon the Trust
REMIC (including but not limited to the tax on prohibited
transactions as defined in Code Section 860F(a)(2) and the tax on
prohibited contributions as defined in Code Section 860G(d)) unless
(A) the Trustee has been supplied with a Nondisqualification
Opinion (at the expense of the party seeking to take such action)
with respect to such action or (B) the Trustee has been supplied
with an opinion (at the expense of the party seeking to take such
action) to the effect that such action will not cause the Trust
REMIC to fail to qualify as a REMIC and the Trustee has calculated
that no material tax will actually be imposed.
(k) The Holders of the Residual Certificates shall pay
when due their pro rata share of any and all federal, state and
local taxes imposed on the Trust REMIC or their assets or
transactions, including, without limitation, (i) "prohibited
transaction" taxes, as defined in Section 860F of the Code, any tax
on contributions imposed by Section 860G(d) of the Code and (ii)
any tax on "net income from foreclosure property" as defined in
Section 860G(c) of the Code (to the extent that such tax on net
income from foreclosure property cannot be paid out of such net
income). To the extent that taxes of the Trust REMIC are not paid
by the Residual Certificateholders, the Trustee shall pay any
remaining Trust REMIC taxes out of current or future amounts
otherwise distributable to the Holders of the respective Residual
Certificates or, if no such amounts are available, out of other
amounts held in the Distribution Account pursuant to Section 3.3
hereof.
(l) The Trustee and, to the extent that records are
maintained by the Servicer in the normal course of its business,
the Servicer shall, for federal income tax purposes, maintain books
and records with respect to the Trust REMIC on a calendar year and
on an accrual basis. Notwithstanding anything to the contrary
contained herein, in the Mortgage Loan or in the Mortgage, all
amounts collected on the Mortgage Loan shall, for federal income
tax purposes, be allocated first to interest due and payable on the
Mortgage Loan (including interest on overdue interest) (other than
additional interest at a penalty rate payable following a default).
The books and records must be sufficient concerning the nature and
amount of the Trust REMIC's investments to show that the Trust
REMIC has complied with the REMIC Provisions.
(m) Neither the Trustee nor the Servicer shall enter
into any arrangement by which the Trust REMIC will receive a fee or
other compensation for services.
(n) In order to enable the Trustee to perform its
duties as set forth herein, the Depositor or the Borrowers shall
provide, or cause to be provided, to the Trustee within ten (10)
days after the Closing Date all information or data that the
Trustee reasonably determines to be relevant for tax purposes on
the valuations and offering prices of the Certificates, including,
without limitation, the yield, prepayment assumption, issue prices
and projected cash flows of the Certificates and the projected cash
flows on the Mortgage Loan. Thereafter, the Depositor or the
Borrowers shall provide to the Trustee, promptly upon written
request therefor, any such additional information or data that the
Trustee may, from time to time, reasonably request in order to
enable the Trustee to perform its duties as set forth herein. The
Trustee is hereby directed to use any and all such information or
data provided by the Depositor or the Borrowers in the preparation
of all federal and state income or franchise tax and information
returns and reports for the Trust REMIC to Certificateholders as
required herein. The Borrowers hereby jointly and severally
indemnify the Trustee and the Trust REMIC for any losses,
liabilities, damages, claims or expenses of or assessments against
the Trustee or the Trust REMIC arising from any errors or
miscalculations of the Trustee pursuant to this Section that result
from any failure of the Depositor or the Borrowers to provide, or
to cause to be provided, accurate information or data to the
Trustee (but not resulting from the methodology employed by the
Trustee, provided such methodology is reasonable) on a timely basis
and such indemnifications shall survive the resignation or
termination of the Servicer or the Trustee or the termination of
this Agreement.
The Trustee agrees that all such information or data so
obtained by it are to be regarded as confidential information and
agrees that it shall use its best reasonable efforts to retain in
confidence, and shall ensure that its officers, employees and
representatives retain in confidence, and shall not disclose,
without the prior written consent of the Depositor or the
Borrowers, as the case may be, any or all of such information or
data, or make any use whatsoever (other than for the purposes
contemplated by this Agreement) of any such information or data
without the prior written consent of the Depositor or the
Borrowers, as the case may be, unless such information is generally
available to the public (other than as a result of a breach of this
Section 10.1(n)) or is required by law or applicable regulations to
be disclosed.
Section 10.2 Foreclosed Property. Pv Notwithstanding
any other provision of this Agreement, the Servicer, acting on
behalf of the Trustee hereunder, shall not rent, lease, or
otherwise earn income on behalf of the Trust Fund and/or the Trust
REMIC with respect to any Foreclosed Property which might cause
such Foreclosed Property to fail to qualify as "foreclosure
property" within the meaning of section 860G(a)(8) of the Code
(without giving effect to the final sentence thereof) or, except as
authorized by this Section, result in the receipt by the Trust
REMIC of any "income from non-permitted assets" within the meaning
of section 860F(a)(2) of the Code or any "net income from
foreclosure property" which is subject to tax under the REMIC
Provisions unless the Trustee and the Servicer have been supplied
with an Opinion of Counsel (at the expense of the Trust REMIC) to
the effect that, under the REMIC Provisions and any relevant
proposed legislation, any income generated for the Trust REMIC by
the Foreclosed Property would not result in the imposition of a tax
upon the Trust REMIC.
If, after consultation with tax counsel, which shall be
outside counsel knowledgeable of the issues occurring in the
practice of securitization and reasonably acceptable to the
Servicer, the Servicer in good faith believes that the aggregate
amount recoverable by Certificateholders (net of all related
expenses including taxes) with respect to a Foreclosed Property if
the Trust REMIC actually incurs a tax as described in the foregoing
paragraph exceeds the aggregate amount that would be recoverable by
Certificateholders if the Foreclosed Property is operated so as to
avoid such taxes, the Servicer may, upon delivery to the Trustee of
an Officer's Certificate specifying the reasons for its
conclusions, operate the Foreclosed Property in a manner that gives
rise to such a tax, provided that such operation does not adversely
affect the continuing status of the Trust REMIC as a REMIC for
federal income tax purposes as evidenced by a Nondisqualification
Opinion, the expense of which shall be paid from Foreclosure
Proceeds from the applicable property.
Without limiting the generality of the foregoing, the
Servicer shall not:
(i) permit the Trust Fund and/or Trust REMIC
to enter into, renew or extend any New Lease with respect
to any Foreclosed Property, if the New Lease by its terms
will give rise to any income that does not constitute
Rents from Real Property;
(ii) permit any amount to be received or
accrued under any New Lease other than amounts that will
constitute Rents from Real Property;
(iii) authorize or permit any construction on
any Foreclosed Property, other than the completion of a
building or other improvement thereon, and then only if
more than 10% of the construction of such building or
other improvement was completed before default on the
Mortgage Loan became imminent, all within the meaning of
Section 856(e)(4)(B) of the Code; or
(iv) Directly Operate, or allow any other
Person to Directly Operate, any Foreclosed Property on
any date more than 90 days after its acquisition date;
unless, in any such case, the Servicer has requested and
received an Opinion of Counsel at the expense of the
Trust REMIC to the effect that such action will not cause
such Foreclosed Property to fail to qualify as
"foreclosure property" within the meaning of Section
860G(a)(8) of the Code (without taking into account the
final sentence of such Section) at any time that it is
part of the Trust REMIC, in which case the Servicer may
take such actions as are specified in such Opinion of
Counsel.
(b) The Servicer, acting on behalf of the Trustee,
shall make reasonable efforts to sell any Foreclosed Property for
its fair market value in accordance with Section 3.11 hereof and
the Servicer shall each month advise the Trustee in writing of the
status of any Mortgaged Property which has been acquired. In any
event, however, the Servicer, acting on behalf of the Trustee,
shall dispose of any Foreclosed Property within two years following
its Acquisition Date unless the Trustee or the Servicer, on its
behalf, has been granted an extension of time (an "Extension") by
the Internal Revenue Service to sell such Foreclosed Property. If
the Trustee or the Servicer, on its behalf, has received such an
Extension, then the Servicer, acting on behalf of the Trustee,
shall continue to attempt to sell the Foreclosed Property for its
fair market value for such period longer than two years as such
Extension permits (the "Extended Period"). If the Trustee or the
Servicer, on its behalf, has not received such an Extension and the
Servicer, acting on behalf of the Trustee, is unable to sell the
Foreclosed Property within the two year period, or if the Trustee
has received such an Extension, and the Servicer, acting on behalf
of the Trustee, is unable to sell the Foreclosed Property within
the Extended Period, the Servicer shall before the end of the
two-year period or Extended Period, as the case may be, auction the
Foreclosed Property to the highest bidder (which may be the
Servicer) in accordance with Accepted Servicing Practices.
(c) Within 30 days of the sale of a Foreclosed
Property, the Servicer shall provide to the Trustee a statement of
accounting for such Foreclosed Property, including without
limitation, (i) the Acquisition Date for such Foreclosed Property,
(ii) the date of disposition of such Foreclosed Property, (iii) the
gross sales price, the related selling and other expenses and the
net sales price, (iv) accrued interest on the Allocated Loan Amount
with respect to such Foreclosed Property at the Mortgage Rates
calculated from the date of acquisition to the disposition date,
and (v) such other information as the Trustee may reasonably
request.
(d) The Trustee shall file in a timely manner all
information and other returns regarding foreclosed or abandoned
properties required by Section 6050J of the Code and the
regulations thereunder, shall forward to the Servicer and the
Depositor a copy of each such report or return, and shall furnish
copies of such returns or reports to the Borrowers or other persons
to whom copies of such returns are required to be furnished
pursuant to the Code and any regulations thereunder.
Section 10.3 Modifications of Mortgage Loan.
Notwithstanding anything to the contrary in this Agreement, neither
the Trustee nor the Servicer shall permit any modification of the
Mortgage Loan (including, but not limited to, the interest rate,
the principal balance, the amortization schedule, the Scheduled
Maturity Date, the collateral securing the Mortgage Loan, the
incurrence of additional fees or similar charges not provided for
in the Mortgage or any other material term ) unless (i) the Trustee
and the Servicer have received a Nondisqualification Opinion or a
ruling from the Internal Revenue Service (at the expense of the
party making the request of the Servicer or the Trustee to modify
the Mortgage Loan) to the same effect as a Nondisqualification
Opinion with respect to such modification or (ii) such modification
meets the requirements set forth in Section 3.7(d) hereof.
Section 10.4 Prohibited Transactions and Activities.
Neither the Servicer nor the Trustee shall permit the sale,
disposition or substitution of the Mortgage Loan or the
substitution of a property for a Mortgaged Property (except in a
disposition pursuant to (i) the bankruptcy or insolvency of the
Trust REMIC, (ii) the termination of the Trust REMIC in a
"qualified liquidation" as defined in Section 860F(a)(4) of the
Code, or (iii) Section 3.10 hereof with respect to a Defaulted
Mortgage Loan) nor acquire any assets for the Trust REMIC (other
than Foreclosed Property), or sell or dispose of any investments in
the Distribution Account or the Certificate Account for gain, nor
accept any contributions to the Trust REMIC (other than a cash
contribution during the three-month period beginning on the Startup
Day), unless it has been supplied with an Opinion of Counsel (at
the expense of the Person requesting the Trustee to take such
action) to the effect that such disposition, acquisition,
substitution, or acceptance will not (a) affect adversely the
status of the Trust REMIC as a REMIC or the status of the portion
of the Trust Fund holding the right to receive Default Interest as
a grantor trust, (b) affect the distribution of interest or
principal on the Certificates, (c) result in the encumbrance of the
assets transferred or assigned to the Trust REMIC (except pursuant
to the provisions of this Agreement) or (d) cause the Trust REMIC
to be subject to a tax on "prohibited transactions" or "prohibited
contributions" pursuant to the REMIC Provisions.
Section 10.5 Indemnification with Respect to Certain
Taxes and Loss of REMIC Status. (a) In the event that the Trust
REMIC fails to qualify as a REMIC, loses its status as a REMIC, or
incurs state, local or foreign taxes, or tax as a result of a
prohibited transaction or prohibited contribution subject to
taxation under the REMIC Provisions due to the gross negligence or
willful misconduct in the performance by the Trustee or the
Certificate Registrar of its duties and obligations specifically
set forth herein, subject to Section 6.3(a) hereof, the Trustee
shall indemnify the Holders of the applicable Residual Certificates
against any and all losses or liabilities, including penalties and
interest (collectively, "Losses"), for which such Holders or any of
them might be liable to any jurisdiction directly resulting from
such gross negligence or willful misconduct, provided that such
Holder has promptly notified the Trustee of any claim which might
be the subject of the indemnification hereunder (provided, however,
that the failure to so notify the Trustee shall not release the
Trustee from any of its obligations hereunder except and only to
the extent that it has been prejudiced thereby), whereupon the
Trustee shall assume the defense of any such claim (with counsel
reasonably satisfactory to such Holder) and pay all expenses in
connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered
against it in respect of such claim, and upon such assumption of
such defense, the Trustee shall not be obligated to pay the fees or
expenses of any other counsel retained by such Holder.
Notwithstanding the foregoing, the Trustee shall not be liable for
any such Losses to the extent attributable to an action or inaction
of the Servicer, the Depositor or the Holders of such Residual
Certificates nor for any such Losses resulting from misinformation
provided by the Servicer, the Depositor or such Holders of Residual
Certificates on which the Trustee has relied. The foregoing shall
not be deemed to limit or restrict the rights and remedies of the
other Holders of the Residual Certificates now or hereafter
existing at law or in equity.
(b) Subject to Section 6.3(a) hereof, in the event that
the Trust REMIC fails to qualify as a REMIC, loses its status as a
REMIC, or incurs state or local taxes, or a tax as a result of a
prohibited transaction or prohibited contribution subject to
taxation under the REMIC Provisions due to the gross negligence or
willful misconduct in the performance by the Servicer of its duties
and obligations set forth herein, the Servicer shall indemnify the
Holders of the applicable Residual Certificates against any and all
Losses for which such Holders or any of them might be liable to any
jurisdiction directly resulting from such gross negligence or
willful misconduct, provided that the Holder has promptly notified
the Servicer of any claim which might be the subject of the
indemnification hereunder (provided, however, that the failure to
so notify the Servicer shall not release the Servicer from any of
its obligations hereunder except and only to the extent that it has
been prejudiced thereby), whereupon the Servicer shall assume the
defense of any such claim (with counsel reasonably satisfactory to
such Holder) and pay all expenses in connection therewith,
including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it in respect of
such claim, and upon such assumption of such defense, the Servicer
shall not be obligated to pay the fees or expenses of any other
counsel retained by such Holder. Notwithstanding the foregoing,
the Servicer shall not be liable for any such Losses attributable
to the action or inaction of the Trustee, the Depositor or the
Holders of such Residual Certificates nor for any such Losses
resulting from misinformation provided by the Trustee, the
Depositor or such Holders of such Residual Certificates on which
the Servicer has reasonably relied. The foregoing shall not be
deemed to limit or restrict the rights and remedies of the other
Holders of such Residual Certificates now or hereafter existing at
law or in equity.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.1 Amendment. (a) This Agreement may be
amended from time to time by the Servicer and the Trustee, without
the consent of the Depositor or any of the Certificateholders, (i)
to cure any ambiguity, (ii) to correct or supplement any provision
herein which may be defective or inconsistent with any other
provisions herein, (iii) to the extent necessary or desirable to
maintain the status of the Trust REMIC as a REMIC, (iv) to maintain
a rating for Class A, Class B, Class C and Class D Certificates
from a nationally recognized statistical rating organization or (v)
to make any other provisions with respect to matters or questions
arising under this Agreement. No such amendment effected pursuant
to clause (i), (ii), (iv) or (v) above shall (x) adversely affect
in any material respect the interests of any Holder not consenting
thereto or (y) adversely affect the status of the Trust REMIC as a
REMIC. Prior to entering into any amendment without the consent of
Holders pursuant to this paragraph, the Trustee may require an
Opinion of Counsel and a Nondisqualification Opinion (in the case
of clauses (i), (ii) and (iii) above, at the expense of the
Borrowers, and otherwise at the expense of the party requesting
such amendment) to the effect that such amendment is permitted
under this paragraph. Any such amendment shall be deemed not to
adversely affect in any material respect any Holder if the Trustee
receives written affirmation from the Rating Agency that such
amendment will not cause the Rating Agency to qualify, downgrade or
withdraw the then current rating assigned to any Class of
Certificates. No such amendment effected pursuant to clause (i),
(ii), (iv) or (v) above shall adversely affect in any material
respect the interests of the Depositor unless the Depositor shall
have consented in writing thereto.
(b) This Agreement may also be amended from time to
time by the Servicer and the Trustee with the consent of the
Holders of Certificates evidencing not less than 50% by Certificate
Balance of the Certificates (other than the Class R Certificates)
for the purpose of adding any provisions or changing in any manner
or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Holders of Certificates;
provided, however, that no such amendment shall (i) reduce in any
manner the amount of, or delay the timing of, payments received on
the Mortgage Loan which are required to be distributed in respect
of any Certificate without the consent of the Holder of such
Certificate; (ii) alter the obligations of the Servicer and the
Trustee to make any Advance or alter the servicing standards set
forth herein; (iii) adversely affect the status of the Trust REMIC
as a REMIC (as evidenced by a Nondisqualification Opinion) without
the consent of 100% of the Certificateholders (including the Class
R Certificateholders); or (iv) reduce the aforesaid percentages of
Certificates the Holders of which are required to consent to any
such amendments and provided further that no such amendment shall
adversely affect in any material respect the interests of the
Depositor unless the Depositor shall have consented in writing
thereto.
As soon as practicable after the execution of any such
amendment, the Servicer shall furnish written notification of the
substance of such amendment to each Certificateholder and the
Rating Agency.
It shall not be necessary for the consent of the
Certificateholders under this Section 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.
Prior to the execution of any amendment to this
Agreement, the Trustee shall be entitled to receive (at the expense
of the party requesting the amendment) and conclusively rely upon
an Opinion of Counsel stating that the execution of such amendment
is authorized or permitted by this Agreement. The Trustee may, but
shall not be obligated to, enter into any such amendment which
affects the Trustee's own rights, duties or immunities under this
Agreement.
Section 11.2 Recordation of Agreement. This Agreement
(or an abstract hereof, if acceptable by the applicable recording
office) 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
Mortgage are situated, and in any other appropriate public
recording office or elsewhere, such recordation to be effected by
the Servicer at the expense of the Trust Fund upon its receipt of
an Opinion of Counsel to the effect that such recordation
materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement
may be executed simultaneously in any number of counterparts, each
of which counterparts shall be deemed to be an original, and such
counterparts shall constitute but one and the same instrument.
Section 11.3 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate
to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an
accounting or take any action or proceeding in any court for a
partition or winding-up of the Trust Fund, nor otherwise affect the
rights, obligations and liabilities of the parties hereto or any of
them.
Except as otherwise expressly provided herein, no
Certificateholder, solely by virtue of its status as a
Certificateholder, shall have any right to vote or in any manner
otherwise control the 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 person by
reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
In addition, unless specifically provided herein, for the
purposes of voting as to any matters arising hereunder or obtaining
any consent, waiver or approval hereunder and the Class R
Certificates shall not be permitted to vote, and the Percentage
Interests thereof shall not be considered to be outstanding.
No Certificateholder, solely by virtue of its status as
a Certificateholder, shall have any right by virtue of or by
availing of any provision of this Agreement to institute any suit,
action or proceeding in equity or at law upon or under or with
respect to this Agreement, unless such Holder previously shall have
given to the Trustee a written notice of default and of the
continuance thereof, as hereinbefore provided, and unless also the
Holders of Certificates of any Class affected thereby evidencing,
as to such Class, Percentage Interests aggregating not less than
25% 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
security or indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee,
for 60 days after its receipt of such notice, request and offer of
security or indemnity, shall have neglected or refused to institute
any such action, suit or proceeding; it being understood and
intended, and being expressly covenanted by each Certificateholder
with every other Certificateholder of the same Class and the
Trustee, that no one or more Holders of Certificates shall have any
right in any manner whatever by virtue of or by availing of any
provision of this Agreement to affect, disturb or prejudice the
rights of the Holders of any other of such Certificates of the same
Class, or to obtain or seek to obtain priority over or preference
to any other such Holder, or to enforce any right under this
Agreement, except in the manner herein provided and for the benefit
of all Certificateholders of the same Class. For the protection
and enforcement of the provisions of this Section, each and every
Certificateholder and the Trustee shall be entitled to such relief
as can be given either at law or in equity.
Section 11.4 Actions of Certificateholders. (a) Any
request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such
Certificateholders in person or by agent duly appointed in writing;
and except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are
delivered to the Trustee and, where required, to the Depositor or
the Servicer. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any
purpose of this Agreement and conclusive in favor of the Trustee,
the Depositor and the Servicer, if made in the manner provided in
this Section 11.4.
(b) The fact and date of the execution by any
Certificateholder of any such instrument or writing may be proved
in any reasonable manner which the Trustee deems sufficient.
(c) Any request, demand, authorization, direction,
notice, consent, waiver or other act by a Certificateholder shall
bind every Holder of every Certificate issued upon the registration
of transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done, or omitted to be done, by the Trustee,
the Depositor or the Servicer in reliance thereon, whether or not
notation of such action is made upon such Certificate.
(d) The Trustee may require additional proof of any
matter referred to in this Section 11.4 as it shall deem reasonably
necessary.
(e) In the event that a Borrower or the Depositor
becomes a Certificateholder, any Certificates held by any such
Persons shall be considered as not issued and outstanding hereunder
in determining the percentage of Certificate Balance required to
make, or for the purpose of making, any request, demand,
authorization, direction, notice, consent, waiver or other act by
the Certificateholders.
Section 11.5 Governing Law. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO THE CHOICE OF LAW RULES THEREOF, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.6 Notices. All demands, notices and
communications to any party hereunder shall be in writing and shall
be deemed to have been duly given when delivered to (i) in the case
of the Depositor, KRT Origination Corp., c/o Kranzco Realty Trust,
000 Xxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention:
Xxxxxx X. Xxxxxxxxx; (ii) in the case of the Servicer, GE Capital
Asset Management Corporation, 0000 Xxxx Xxxx Xxxxx, 00xx Xxxxx,
Xxxxxxx, Xxxxx 00000, Attention: Xxxxxx X. Xxxxx, Xx., Esq.; and
(iii) in the case of the Trustee, the Paying Agent, the
Authenticating Agent and the Certificate Registrar, the Trustee's
Corporate Trust Office; or such other address as may hereafter be
furnished to the Depositor and the Servicer in writing by the
Trustee. Any notice required or permitted to be mailed or
delivered to a Certificateholder shall be given by first class
mail, postage prepaid, to the Certificateholder of record as
recorded on and at the address of such Holder as shown in the
Certificate Register. Any notice mailed to a Certificateholder
within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the addressee
receives such notice.
Section 11.7 Notices to the Rating Agency. The Servicer
shall deliver written notice of the following events to the Rating
Agency at Fitch Investors Service, L.P., Xxx Xxxxx Xxxxxx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Commercial Mortgage
Surveillance, promptly following the occurrence thereof: a material
amendment to this Agreement or any other documents included in the
Trust Fund; any Event of Default; change in or termination of the
Trustee; the results of any inspection (whether structural,
environmental or otherwise) of any of the Mortgaged Properties; and
final payment to Certificateholders. In furtherance and not in
limitation of the foregoing or anything in this Agreement, the
Trustee shall also deliver copies of the following documents to the
Rating Agency at the address set forth above at the time such
documents are required to be delivered pursuant to this Agreement:
monthly reports to Certificateholders pursuant to Section 4.2
hereof; quarterly unaudited financial statements of the Borrowers;
annual audited financial statements of the Borrowers; annual report
of independent accountants pursuant to section 3.14 hereof; notice
of the removal of the Servicer or any successor servicer as
servicer; and annual Servicer compliance report pursuant to Section
3.13 hereof. The Servicer also shall furnish such other
information regarding the Trust Fund as may be reasonably requested
by the Rating Agency to the extent the Servicer has or can obtain
such information without unreasonable effort or expense. All
notices to Rating Agency required hereunder shall be in writing.
Section 11.8 Severability. 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 11.9 Xxxxxx Act. Any provisions required to be
contained in this Agreement by Section 126 and/or Section 130-k of
Article 4-A of the New York Real Property Law in order to have the
benefit of such Section 126 and/or Section 130-k are hereby
incorporated herein, and such provisions shall be in addition to
those conferred or imposed by this Agreement; provided, however,
that to the extent that such Section 126 and/or Section 130-k shall
not have any effect, and if said Section 126 and/or Section 130-k
should at any time be repealed or cease to apply to this Agreement,
or be construed by judicial decision to be inapplicable, said
Section 126 and/or Section 130-k shall cease to have any further
effect upon the provisions of this Agreement. In case of a
conflict between the provisions of this Agreement and any mandatory
provisions of Article 4-A of the New York Real Property Law, such
mandatory provisions of said Article 4-A shall prevail, provided
that if said Article 4-A shall not apply to this Agreement, should
at any time be repealed, or cease to apply to this Agreement, or be
construed by judicial decision to be inapplicable, such mandatory
provisions of such Article 4-A shall cease to have any further
effect upon the provisions of this Agreement.
Section 11.9a Notice Under Escrow Agreement. In the
event that the Trustee shall receive notification from the
Borrowers that Net Operating Income has decreased by greater than
25% as calculated in the Escrow Agreement, the Trustee shall
deliver to the escrow agent under the Escrow Agreement the
certificate provided for in Section 3 of the Escrow Agreement.
Section 11.10 Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall be deemed
to be an original, and all of which together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused their
names to be signed hereto by their respective officers thereunto
duly authorized, all as of the day and year first above written.
KRT ORIGINATION CORP.
as Depositor
By: /s/ Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: President
STATE STREET BANK AND TRUST COMPANY,
as Trustee, Mortgage Custodian,
Certificate Registrar,
Authenticating Agent and Paying Agent
By: /s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Assistant Vice President
GE CAPITAL ASSET MANAGEMENT CORPORATION,
as Servicer and Special Servicer
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: President and Chief
Executive Officer
EXHIBIT A
[UNLESS THIS CERTIFICATE IS PRESENTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY
("DTC"), NEW YORK, NEW YORK, TO THE DEPOSITOR OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
TRANSFERS OF THIS BOOK-ENTRY
CERTIFICATE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN
PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE, AND TRANSFERS OF BENEFICIAL INTERESTS IN THIS
BOOK-ENTRY CERTIFICATE SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE TRUST AGREEMENT
REFERRED TO BELOW.]
THIS CERTIFICATE HAS NOT BEEN AND
WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW. THE HOLDER
HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS
CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS AND, WITHIN THREE YEARS AFTER THE LATER OF THE
ORIGINAL ISSUANCE OF THE CERTIFICATES OR THE LAST DATE ON WHICH
THIS CERTIFICATE IS HELD BY AN AFFILIATE OF THE DEPOSITOR ONLY (1)
TO THE DEPOSITOR, (2) PURSUANT TO RULE 144A UNDER THE SECURITIES
ACT TO A PERSON WHO THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER ("QIB") WITHIN THE MEANING OF RULE 144A,
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB, WHOM
THE HOLDER HAS INFORMED THAT SUCH REOFFER, RESALE, PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A; (3) IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT; (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE); OR
(5) IN CERTIFICATED FORM TO AN INSTITUTIONAL "ACCREDITED INVESTOR"
WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) OF REGULATION
D OF THE SECURITIES ACT WHO IS NOT A QIB PURSUANT TO ANY OTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO (A) IN CERTAIN CIRCUMSTANCES RECEIPT BY THE DEPOSITOR
AND THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN
THE TRUST AGREEMENT REFERRED TO BELOW, AND (B) RECEIPT BY THE
DEPOSITOR AND THE TRUSTEE OF SUCH CERTIFICATES, LEGAL OPINIONS AND
OTHER EVIDENCE ACCEPTABLE TO THE DEPOSITOR AND THE TRUSTEE THAT
SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS.
THIS CERTIFICATE WILL NOT BE ACCEPTED
FOR REGISTRATION OF TRANSFER EXCEPT UPON PRESENTATION OF EVIDENCE
SATISFACTORY TO THE TRUSTEE THAT THE RESTRICTIONS ON TRANSFER SET
FORTH ABOVE HAVE BEEN COMPLIED WITH, ALL AS PROVIDED IN THE TRUST
AGREEMENT.
REGISTERED
SOLELY FOR U.S. FEDERAL INCOME TAX
PURPOSES, THIS CERTIFICATE IS A "REGULAR INTEREST" IN A "REAL
ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED.
FORM OF CLASS A CERTIFICATE
KRT ORIGINATION CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
NUMBER: A-1 ORIGINAL
DENOMINATION: $-------------
DATE OF TRUST AND ORIGINAL CLASS A
SERVICING AGREEMENT: PRINCIPAL BALANCE: $-------------
JUNE 18, 1996
FIRST DISTRIBUTION DATE: CUSIP NUMBER: --------------
JULY 20, 1996
evidencing a percentage interest in all distributions
allocable to the Class A Certificates with respect to a
mortgage loan, secured by a first lien on 27 neighborhood
and community shopping center properties, which mortgage
loan was sold by
KRT ORIGINATION CORP.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN KRT ORIGINATION CORP., THE BORROWERS, THE SERVICER OR
THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE
LOAN ARE GUARANTEED OR INSURED BY KRT ORIGINATION CORP., THE BOR-
ROWERS, THE SERVICER OR THE TRUSTEE OR BY ANY OF THEIR RESPECTIVE
AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
AS PROVIDED IN THE TRUST AGREEMENT, THIS CERTIFICATE IS
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFERABILITY.
This certifies that is the registered owner of a beneficial
interest in certain monthly distributions with respect to the xxxx-
xxxx loan (the "Mortgage Loan") to KRT Property Holdings, Inc.,
Hillcrest Plaza Limited Partnership, KR Suburban, L.P., Fox Run,
Limited Partnership, XX XxxXxxxxx Holdings, Inc., KR Best
Associates, L.P., KR 69th Street, L.P., KR Trust One, Inc., KR
Manchester, Inc., KR Street Associates, L.P., KR Orange, Inc., KR
Collegetown, Inc., KR Hillcrest Mall, Inc. and XX Xxxxxxx, L.P. by
a first lien on 27 neighborhood and community shopping center
properties (each a "Mortgaged Property"), which Mortgage Loan was
sold by KRT Origination Corp. (hereinafter called the "Depositor")
together with certain other property held in trust for the benefit
of Certificateholders (collectively, the "Trust Fund"). The Trust
Fund was created pursuant to a Trust and Servicing Agreement, dated
as specified above (the "Trust Agreement"), among the Depositor, GE
Capital Asset Management Corporation, as servicer (the "Servicer"),
and State Street Bank and Trust Company, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of
which is set forth below. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned to them in
the Trust Agreement.
This Certificate is one of a duly authorized issue of
Certificates, designated as KRT Origination Corp. Commercial Xxxx-
xxxx Pass-Through Certificates, Class A (the "Class A Certifi-
xxxxx"), Class B (the "Class B Certificates"), Class C (the "Class
C Certificates"), Class D (the "Class D Certificates") and the
Class R (the "Class R Certificates" and, collectively with the
Class A, Class B, Class C and Class D Certificates, the "Certifi-
xxxxx"), and is issued under and is subject to the terms, provi-
sions and conditions of the Trust Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound. The Class B, Class C,
Class D and Class R Certificates are subordinated to the Class A
Certificates in right of payment to the extent described in the
Trust Agreement.
The Class A Certificates represent, in the aggregate, an
initial beneficial ownership interest of 68.1% in the Trust REMIC
(as hereinafter defined), and will bear interest at a fixed rate of
7.76% per annum. Pursuant to the terms of the Trust Agreement, the
Trustee or its designated Paying Agent will distribute from funds
in the Certificate Account on the 20th day of each month or, if
such 20th day is not a Business Day, the first Business Day
immediately following (each, a "Distribution Date"), commencing on
July 20, 1996, to the Person in whose name this Certificate is
registered at the close of business on the last day of the
preceding Interest Accrual Period (the "Record Date"), payments of
principal and interest on this Certificate in the amounts and in
the priorities set forth in the Trust Agreement for such Distribu-
tion Date.
Distributions on this Certificate will be made on each
Distribution Date by the Trustee or its designated Paying Agent
either by check mailed to the address of the Holder hereof, as such
name and address shall appear on the Certificate Register, or, upon
written request by a Holder hereof holding in excess of $5,000,000
in initial Certificate Balance on all Classes of Certificates,
delivered at least five Business Days prior to the related Record
Date, by wire transfer in immediately available funds to the
account of such Holder maintained at a bank in the United States,
or by such other means of payment as the Holder hereof and the
Paying Agent shall agree upon. Notwithstanding the above, the
final distribution on this Certificate will be made after due
notice by the Paying Agent of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose and
specified in such notice of final distribution.
The Trust Fund will consist primarily of the Mortgage
Loan secured by the Mortgage on the Borrowers fee or, in certain
cases, leasehold interests in the Mortgaged Properties. Pursuant
to the Trust Agreement, a segregated pool of assets of the Trust
Fund will consist of (i) the Mortgage Loan (other than the right to
Default Interest), (ii) the amounts held from time to time in the
Distribution Account and the Certificate Account established under
the Trust Agreement, (iii) any property which secures the Mortgage
Loan and which is acquired by foreclosure, deed-in-lieu of
foreclosure or otherwise and (iv) certain other rights set forth in
the Trust Agreement. The Depositor intends to cause an election to
be made to treat such segregated pool of assets as a real estate
mortgage investment conduit (a "REMIC"), and upon such election,
such segregated pool of assets will be a REMIC known as the "Trust
REMIC." The Certificates (other than the Class R Certificates)
will be designated as the "regular interests" in the Trust REMIC
and the Class R Certificates will be designated as the "residual
interests" in the Trust REMIC.
The Certificate Registrar will cause to be kept at the
Corporate Trust Office or at the office of its designated agent, a
Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar will
provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of
transfer of any Certificate at any office or agency of the
Certificate Registrar maintained for such purposes, the Certificate
Registrar or a designated Authenticating Agent will, subject to the
limitations set forth in the Trust Agreement, authenticate and
deliver, in the name of the designated transferee or transferees,
a Certificate of a like Class and aggregate Percentage Interest and
dated the date of authentication.
No service charge will be made for any transfer or
exchange of the Certificate, but the Certificate Registrar or its
designated agent may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection
with any transfer or exchange of the Certificate. Prior to the due
presentation of a Certificate for registration of transfer, the
Depositor, the Servicer and the Trustee 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
the Trust Agreement and for all other purposes whatsoever, and
neither the Depositor, the Servicer nor the Trustee will be
affected by notice to the contrary.
The Trust Agreement may be amended from time to time by
the Servicer and the Trustee, without the consent of any of the
Holders of Certificates or the Depositor, (i) to cure any
ambiguity, (ii) to correct or supplement any provision therein
which may be defective or inconsistent with any other provisions
therein, (iii) to the extent necessary or desirable to maintain the
status of the Trust REMIC as a REMIC, (iv) to maintain a rating for
the Class A, Class B, Class C and Class D Certificates from a
nationally recognized statistical rating organization or (v) to
make any other provisions with respect to matters or questions
arising under the Trust Agreement; provided that no such amendment
effected pursuant to clause (i), (ii), (iv) or (v) shall (a)
adversely affect in any material respect the interests of any
Holder not consenting thereto or (b) adversely affect the status of
the Trust REMIC as a REMIC.
The Trust Agreement may also be amended from time to time
by the Servicer and the Trustee with the consent of the Holders of
Certificates evidencing not less than 50% by Certificate Balance of
the Certificates (other than the Class R Certificates) for the
purpose of adding any provisions or changing in any manner or
eliminating any of the provisions of the Trust Agreement or of
modifying in any manner the rights of the Holders of Certificates;
provided, however, that no such amendment shall (i) reduce in any
manner the amount of, or delay the timing of, payments received on
the Mortgage Loan which are required to be distributed in respect
of any Certificate without the consent of the Holder of such Cer-
tificate; (ii) alter the obligations of the Servicer or the Trustee
to make an Advance or alter the servicing standards set forth in
the Trust Agreement; (iii) adversely affect the status of the Trust
REMIC as a REMIC (as evidenced by a Nondisqualification Opinion)
without the consent of 100% of the Certificateholders (including
the Class R Certificateholders); or (iv) reduce the aforesaid per-
centages of Certificates the Holders of which are required to
consent to any such amendments.
The respective obligations and responsibilities of the
Servicer, the Depositor, the Paying Agent and the Trustee created
under the Trust Agreement (other than the obligation of the Paying
Agent to make certain payments to Certificateholders after the
Final Distribution Date and certain obligations of the Servicer to
the Trustee, including the obligation of the Servicer to disburse
money from the Distribution Account in payment of certain sums then
due the Trustee) shall terminate upon the last action required to
be taken by the Paying Agent on the Final Distribution Date
pursuant to Article IX of the Trust Agreement upon the earlier of
(i) the later of (A) the final payment on the Mortgage Loan or (B)
the final liquidation of the last Foreclosed Property remaining in
the Trust Fund and the distribution of the proceeds thereof in
accordance with the Trust Agreement, (ii) the termination of the
Trust Agreement pursuant to Section 9.1(b) thereof, (iii) the sale
of the Mortgage Notes pursuant to Section 9.1(c) of the Trust
Agreement and (iv) the termination of the Trust Fund pursuant to
Section 9.1(d) of the Trust Agreement; provided, however, that in
no event shall the trust created pursuant to the terms of the Trust
Agreement continue beyond the expiration of twenty-one years from
the death of the last survivor of the descendants of Xxxxxx X.
Xxxxxxx, the late ambassador of the United States to the Court of
St. Xxxxx, living on the date hereof.
THIS CERTIFICATE AND THE TRUST AGREEMENT SHALL BE CON-
STRUED IN ACCORDANCE WITH, AND BE GOVERNED BY, THE LAWS OF THE
STATE OF NEW YORK.
Unless the certificate of authentication hereon has been
executed by the Trustee or by its designated Authenticating Agent,
by manual signature, this Certificate shall not be entitled to any
benefit under the Trust Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Class A
Certificate to be duly executed.
STATE STREET BANK AND TRUST COMPANY,
As Trustee
By:------------------------------
Name:
Title:
Dated: -----------------
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS A CERTIFICATES REFERRED TO IN
THE WITHIN-MENTIONED AGREEMENT.
STATE STREET BANK AND TRUST COMPANY,
Authenticating Agent
By:----------------------
Authorized Signatory FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
(PLEASE INSERT SOCIAL SECURITY*
OR
U.S. TAXPAYER IDENTIFICATION
NUMBER OF ASSIGNEE)
(Please Print or Typewrite Name and Address of Assignee)
the within Certificate, and all rights thereunder, and does hereby
irrevocably constitute and appoint,
Attorney
to transfer the within Certificate on the books kept for
registration thereof, with full power and substitution in the
premises.
Dated:
(Signature Guaranteed)
NOTICE: The signature of this assignment must correspond with the name
as it appears upon the face of the within Certificate in every particular,
without alteration or enlargement or any change whatsoever.
(*This information, which is voluntary, is being requested to
ensure that the Assignee will not be subject to backup withholding
under Section 3406 of the Code.)
EXHIBIT B
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY ("DTC"), NEW YORK,
NEW YORK, TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGIS-
TERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC OR SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO.), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
TRANSFERS OF THIS BOOK-ENTRY CERTIFICATE SHALL BE LIMITED
TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE, AND TRANSFERS OF
BENEFICIAL INTERESTS IN THIS BOOK-ENTRY CERTIFICATE SHALL BE LIMIT-
ED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH
IN THE TRUST AGREEMENT REFERRED TO BELOW.]
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAW. THE HOLDER HEREOF, BY
PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE
REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND,
WITHIN THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THE
CERTIFICATES OR THE LAST DATE ON WHICH THIS CERTIFICATE IS HELD BY
AN AFFILIATE OF THE DEPOSITOR ONLY (1) TO THE DEPOSITOR, (2)
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT TO A PERSON WHO THE
HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
("QIB") WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED
THAT SUCH REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A; (3) IN AN OFFSHORE TRANSACTION IN ACCOR-
DANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT; (4)
PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE); OR (5) IN CERTIFICATED
FORM TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D OF THE
SECURITIES ACT WHO IS NOT A QIB PURSUANT TO ANY OTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT
TO (A) IN CERTAIN CIRCUMSTANCES RECEIPT BY THE DEPOSITOR AND THE
TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE TRUST
AGREEMENT REFERRED TO BELOW, AND (B) RECEIPT BY THE DEPOSITOR AND
THE TRUSTEE OF SUCH CERTIFICATES, LEGAL OPINIONS AND OTHER EVIDENCE
ACCEPTABLE TO THE DEPOSITOR AND THE TRUSTEE THAT SUCH REOFFER,
RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT
AND OTHER APPLICABLE LAWS.
THIS CERTIFICATE OR ANY INTEREST HEREIN SHOULD NOT BE
PURCHASED BY A TRANSFEREE THAT IS (A) AN EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT, INCLUDING AN INDIVIDUAL RETIREMENT
ACCOUNT OR A XXXXX PLAN, WHICH IS SUBJECT TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A
GOVERNMENT PLAN SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH IS
TO A MATERIAL EXTENT SIMILAR TO THE FOREGOING PROVISIONS OF ERISA
OR THE CODE (A "SIMILAR LAW") (EACH A "PLAN"), OR (B) AN INSURANCE
COMPANY USING ASSETS OF ANY INSURANCE COMPANY SEPARATE ACCOUNT OR
GENERAL ACCOUNT IN WHICH ASSETS OF SUCH PLAN ARE INVESTED (OR WHICH
ARE DEEMED PURSUANT TO ERISA OR ANY SIMILAR LAW TO INCLUDE ASSETS
OF SUCH PLANS) OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR
USING THE ASSETS OF ANY SUCH PLAN. EACH PROSPECTIVE TRANSFEREE OF
THIS CERTIFICATE WILL BE REQUIRED TO DELIVER TO THE DEPOSITOR, THE
CERTIFICATE REGISTRAR AND THE TRUSTEE, (I) THE ERISA TRANSFER
AFFIDAVIT, SUBSTANTIALLY IN THE FORM ATTACHED TO THE TRUST AND
SERVICING AGREEMENT REFERRED TO HEREIN, STATING THAT SUCH
PROSPECTIVE TRANSFEREE IS NOT A PERSON REFERRED TO IN CLAUSE (A) OR
(B) ABOVE, OR (II) AN OPINION OF COUNSEL WHICH ESTABLISHES TO THE
SATISFACTION OF THE DEPOSITOR, THE SERVICER, THE TRUSTEE AND THE
CERTIFICATE REGISTRAR THAT THE PURCHASE OR HOLDING OF THIS
CERTIFICATE WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND BEING
DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS OF ERISA OR THE PROHIBITED TRANSACTION
PROVISIONS OF THE CODE, WILL NOT CONSTITUTE OR RESULT IN A
PROHIBITED TRANSACTION WITHIN THE MEANING OF SECTION 406 OR SECTION
407 OF ERISA OR SECTION 4975 OF THE CODE, AND WILL NOT SUBJECT THE
DEPOSITOR, THE SERVICER, THE TRUSTEE OR THE CERTIFICATE REGISTRAR
TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR
LIABILITIES UNDER ERISA OR SECTION 4975 OF THE CODE), WHICH OPINION
OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUST FUND, THE SERVICER,
THE TRUSTEE, THE CERTIFICATE REGISTRAR OR THE DEPOSITOR.
THIS CERTIFICATE WILL NOT BE ACCEPTED FOR REGISTRATION OF
TRANSFER EXCEPT UPON PRESENTATION OF EVIDENCE SATISFACTORY TO THE
TRUSTEE THAT THE RESTRICTIONS ON TRANSFER SET FORTH ABOVE HAVE BEEN
COMPLIED WITH, ALL AS PROVIDED IN THE TRUST AGREEMENT.
REGISTERED
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS
CERTIFICATE IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED.
FORM OF CLASS B CERTIFICATE
KRT ORIGINATION CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
NUMBER: B-1 ORIGINAL
DENOMINATION: $------------
DATE OF TRUST AND ORIGINAL CLASS B
SERVICING AGREEMENT: PRINCIPAL BALANCE: $------------
JUNE 18, 1996
FIRST DISTRIBUTION DATE: CUSIP NUMBER: -------------
JULY 20, 1996
evidencing a percentage interest in all distributions
allocable to the Class B Certificates with respect to one
mortgage loan, secured by a first lien on 27 neighborhood
and community shopping center properties, which mortgage
loan was sold by
KRT ORIGINATION CORP.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN KRT ORIGINATION CORP., THE BORROWERS, THE SERVICER OR
THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE
LOAN ARE GUARANTEED OR INSURED BY KRT ORIGINATION CORP., THE
BORROWERS, THE SERVICER OR THE TRUSTEE OR BY ANY OF THEIR
RESPECTIVE AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR
XXXXXXXXXXXXXXX.XX PROVIDED IN THE TRUST AGREEMENT, THIS CERTIFICATE
IS SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFERABILITY.
This certifies that ----------------------------- is the
registered owner of a beneficial interest in certain monthly
distributions with respect to the mortgage loan (the "Mortgage
Loan") to KRT Property Holdings, Inc., Hillcrest Plaza Limited
Partnership, KR Suburban, L.P., Fox Run, Limited Partnership, XX
XxxXxxxxx Holdings, Inc., KR Best Associates, L.P., KR 69th Street,
L.P., KR Trust One, Inc., KR Manchester, Inc., KR Street
Associates, L.P., KR Orange, Inc., KR Collegetown, Inc., KR
Hillcrest Mall, Inc. and XX Xxxxxxx, L.P. (the "Borrowers"),
secured by a first lien on 27 neighborhood and community shopping
center properties (each a "Mortgaged Property"), which Mortgage
Loan was sold by KRT Origination Corp. (hereinafter called the "De-
positor") together with certain other property held in trust for
the benefit of Certificateholders (collectively, the "Trust Fund").
The Trust Fund was created pursuant to a Trust and Servicing
Agreement, dated as specified above (the "Agreement"), among the
Depositor, GE Capital Asset Management Corporation, as servicer
(the "Servicer"), and State Street Bank and Trust Company, as
trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth below. To the extent not defined
herein, the capitalized terms used herein have the meanings
assigned to them in the Trust Agreement.
This Certificate is one of a duly authorized issue of
Certificates, designated as KRT Origination Corp. Commercial Xxxx-
xxxx Pass-Through Certificates, Class A (the "Class A Certifi-
xxxxx"), Class B (the "Class B Certificates"), Class C (the "Class
C Certificates"), Class D (the "Class D Certificates") and Class R
(the "Class R Certificates" and, collectively with the Class A,
Class B, Class C and Class D Certificates, the "Certificates"), and
is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound. The Class B, Class C, Class D and
Class R Certificates are subordinated to the Class A Certificates
in right of payment to the extent described in the Trust Agreement.
The Class B Certificates represent, in the aggregate, an
initial beneficial ownership interest of 11.3% in the Trust REMIC
(as hereinafter defined), and will bear interest at a fixed rate of
7.98% per annum. Pursuant to the terms of the Trust Agreement, the
Trustee or its designated Paying Agent will distribute from funds
in the Certificate Account on the 20th day of each month or, if
such 20th day is not a Business Day, the first Business Day
immediately following (each, a "Distribution Date"), commencing on
July 20, 1996, to the Person in whose name this Certificate is
registered at the close of business on the last day of the
preceding Interest Accrual Period (the "Record Date"), payments of
principal and interest on this Certificate in the amounts and in
the priorities set forth in the Trust Agreement for such Distribu-
tion Date.
Distributions on this Certificate will be made on each
Distribution Date by the Trustee or its designated Paying Agent
either by check mailed to the address of the Holder hereof, as such
name and address shall appear on the Certificate Register, or, upon
written request by a Holder hereof holding in excess of $5,000,000
in initial Certificate Balance on all Classes of Certificates,
delivered at least five Business Days prior to the related Record
Date, by wire transfer in immediately available funds to the
account of such Holder maintained at a bank in the United States,
or by such other means of payment as the Holder hereof and the
Paying Agent shall agree upon. Notwithstanding the above, the
final distribution on this Certificate will be made after due
notice by the Paying Agent of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose and
specified in such notice of final distribution.
The Trust Fund will consist primarily of the Mortgage
Loan secured by the Mortgage on the Borrowers fee or, in certain
cases, leasehold interests in the Mortgaged Properties. Pursuant
to the Trust Agreement, a segregated pool of assets of the Trust
Fund will consist of (i) the Mortgage Loan (other than the right to
Default Interest), (ii) the amounts held from time to time in the
Distribution Account and the Certificate Account established under
the Trust Agreement, (iii) any property which secures the Mortgage
Loan and which is acquired by foreclosure, deed-in-lieu of
foreclosure or otherwise and (iv) certain other rights set forth in
the Trust Agreement. The Depositor intends to cause an election to
be made to treat such segregated pool of assets as a real estate
mortgage investment conduit (a "REMIC"), and upon such election,
such segregated pool of assets will be a REMIC known as the "Trust
REMIC." The Certificates (other than the Class R Certificates)
will be designated as the "regular interests" in the Trust REMIC
and the Class R Certificates will be designated as the "residual
interests" in the Trust REMIC.
The Certificate Registrar will cause to be kept at the
Corporate Trust Office or at the office of its designated agent, a
Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar will
provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of
transfer of any Certificate at any office or agency of the
Certificate Registrar maintained for such purposes, the Certificate
Registrar or a designated Authenticating Agent will, subject to the
limitations set forth in the Trust Agreement, authenticate and
deliver, in the name of the designated transferee or transferees,
a Certificate of a like Class and aggregate Percentage Interest and
dated the date of authentication.
No service charge will be made for any transfer or
exchange of the Certificate, but the Certificate Registrar or its
designated agent may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection
with any transfer or exchange of the Certificate. Prior to the due
presentation of a Certificate for registration of transfer, the
Depositor, the Servicer and the Trustee 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
the Trust Agreement and for all other purposes whatsoever, and
neither the Depositor, the Servicer nor the Trustee will be
affected by notice to the contrary.
The Trust Agreement may be amended from time to time by
the Servicer and the Trustee, without the consent of any of the
Holders of Certificates or the Depositor, (i) to cure any
ambiguity, (ii) to correct or supplement any provision therein
which may be defective or inconsistent with any other provisions
therein, (iii) to the extent necessary or desirable to maintain the
status of the Trust REMIC as a REMIC, (iv) to maintain a rating for
the Class A, Class B, Class C and Class D Certificates from a
nationally recognized statistical rating organization or (v) to
make any other provisions with respect to matters or questions
arising under the Trust Agreement; provided that no such amendment
effected pursuant to clause (i), (ii), (iv) or (v) shall (a)
adversely affect in any material respect the interests of any
Holder not consenting thereto or (b) adversely affect the status of
the Trust REMIC as a REMIC.
The Trust Agreement may also be amended from time to time
by the Servicer and the Trustee with the consent of the Holders of
Certificates evidencing not less than 50% by Certificate Balance of
the Certificates (other than the Class R Certificates) for the
purpose of adding any provisions or changing in any manner or
eliminating any of the provisions of the Trust Agreement or of
modifying in any manner the rights of the Holders of Certificates;
provided, however, that no such amendment shall (i) reduce in any
manner the amount of, or delay the timing of, payments received on
the Mortgage Loan which are required to be distributed in respect
of any Certificate without the consent of the Holder of such Cer-
tificate; (ii) alter the obligations of the Servicer or the Trustee
to make an Advance or alter the servicing standards set forth in
the Trust Agreement; (iii) adversely affect the status of the Trust
REMIC as a REMIC (as evidenced by a Nondisqualification Opinion)
without the consent of 100% of the Certificateholders (including
the Class R Certificateholders); or (iv) reduce the aforesaid per-
centages of Certificates the Holders of which are required to
consent to any such amendments.
The respective obligations and responsibilities of the
Servicer, the Depositor, the Paying Agent and the Trustee created
under the Trust Agreement (other than the obligation of the Paying
Agent to make certain payments to Certificateholders after the
Final Distribution Date and certain obligations of the Servicer to
the Trustee, including the obligation of the Servicer to disburse
money from the Distribution Account in payment of certain sums then
due the Trustee) shall terminate upon the last action required to
be taken by the Paying Agent on the Final Distribution Date
pursuant to Article IX of the Trust Agreement upon the earlier of
(i) the later of (A) the final payment on the Mortgage Loan or (B)
the final liquidation of the last Foreclosed Property remaining in
the Trust Fund and the distribution of the proceeds thereof in
accordance with the Trust Agreement, (ii) the termination of the
Trust Agreement pursuant to Section 9.1(b) thereof, (iii) the sale
of the Mortgage Notes pursuant to Section 9.1(c) of the Trust
Agreement and (iv) the termination of the Trust Fund pursuant to
Section 9.1(d) of the Trust Agreement; provided, however, that in
no event shall the trust created pursuant to the terms of the Trust
Agreement continue beyond the expiration of twenty-one years from
the death of the last survivor of the descendants of Xxxxxx X.
Xxxxxxx, the late ambassador of the United States to the Court of
St. Xxxxx, living on the date hereof.
THIS CERTIFICATE AND THE TRUST AGREEMENT SHALL BE CON-
STRUED IN ACCORDANCE WITH, AND BE GOVERNED BY, THE LAWS OF THE
STATE OF NEW YORK.
Unless the certificate of authentication hereon has been
executed by the Trustee or by its designated Authenticating Agent,
by manual signature, this Certificate shall not be entitled to any
benefit under the Trust Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Class B
Certificate to be duly executed.
STATE STREET BANK AND TRUST COMPANY,
As Trustee
By:------------------------------
Name:
Title:
Dated: -------------------------
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS B CERTIFICATES REFERRED TO IN
THE WITHIN-MENTIONED AGREEMENT.
STATE STREET BANK AND TRUST COMPANY,
As Authenticating Agent
By: ----------------------
Authorized Signatory FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
(PLEASE INSERT SOCIAL SECURITY*
OR
U.S. TAXPAYER IDENTIFICATION
NUMBER OF ASSIGNEE)
(Please Print or Typewrite Name and Address of Assignee)
the within Certificate, and all rights thereunder, and does hereby
irrevocably constitute and appoint,
Attorney
to transfer the within Certificate on the books kept for
registration thereof, with full power and substitution in the
premises.
Dated:
(Signature Guaranteed)
NOTICE: The signature of this assignment must correspond with
the name as it appears upon the face of the within Certificate in every
particular, without alteration or enlargement or any change whatsoever.
(*This information, which is voluntary, is being requested to
ensure that the Assignee will not be subject to backup withholding
under Section 3406 of the Code.)
EXHIBIT C
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY ("DTC"), NEW YORK,
NEW YORK, TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGIS-
TERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC OR SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO.), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
TRANSFERS OF THIS BOOK-ENTRY CERTIFICATE SHALL BE LIMITED
TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE, AND TRANSFERS OF
BENEFICIAL INTERESTS IN THIS BOOK-ENTRY CERTIFICATE SHALL BE LIMIT-
ED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH
IN THE TRUST AGREEMENT REFERRED TO BELOW.]
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAW. THE HOLDER HEREOF, BY
PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE
REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND,
WITHIN THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THE
CERTIFICATES OR THE LAST DATE ON WHICH THIS CERTIFICATE IS HELD BY
AN AFFILIATE OF THE DEPOSITOR ONLY (1) TO THE DEPOSITOR, (2)
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT TO A PERSON WHO THE
HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
("QIB") WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED
THAT SUCH REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A; (3) IN AN OFFSHORE TRANSACTION IN ACCOR-
DANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT; (4)
PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE); OR (5) IN CERTIFICATED
FORM TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D OF THE
SECURITIES ACT WHO IS NOT A QIB PURSUANT TO ANY OTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT
TO (A) IN CERTAIN CIRCUMSTANCES RECEIPT BY THE DEPOSITOR AND THE
TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE TRUST
AGREEMENT REFERRED TO BELOW, AND (B) RECEIPT BY THE DEPOSITOR AND
THE TRUSTEE OF SUCH CERTIFICATES, LEGAL OPINIONS AND OTHER EVIDENCE
ACCEPTABLE TO THE DEPOSITOR AND THE TRUSTEE THAT SUCH REOFFER,
RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT
AND OTHER APPLICABLE LAWS.
THIS CERTIFICATE OR ANY INTEREST HEREIN SHOULD NOT BE
PURCHASED BY A TRANSFEREE THAT IS (A) AN EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT, INCLUDING AN INDIVIDUAL RETIREMENT
ACCOUNT OR A XXXXX PLAN, WHICH IS SUBJECT TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A
GOVERNMENT PLAN SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH IS
TO A MATERIAL EXTENT SIMILAR TO THE FOREGOING PROVISIONS OF ERISA
OR THE CODE (A "SIMILAR LAW") (EACH A "PLAN"), OR (B) AN INSURANCE
COMPANY USING ASSETS OF ANY INSURANCE COMPANY SEPARATE ACCOUNT OR
GENERAL ACCOUNT IN WHICH ASSETS OF SUCH PLAN ARE INVESTED (OR WHICH
ARE DEEMED PURSUANT TO ERISA OR ANY SIMILAR LAW TO INCLUDE ASSETS
OF SUCH PLANS) OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR
USING THE ASSETS OF ANY SUCH PLAN. EACH PROSPECTIVE TRANSFEREE OF
THIS CERTIFICATE WILL BE REQUIRED TO DELIVER TO THE DEPOSITOR, THE
CERTIFICATE REGISTRAR AND THE TRUSTEE, (I) THE ERISA TRANSFER
AFFIDAVIT, SUBSTANTIALLY IN THE FORM ATTACHED TO THE TRUST AND
SERVICING AGREEMENT REFERRED TO HEREIN, STATING THAT SUCH
PROSPECTIVE TRANSFEREE IS NOT A PERSON REFERRED TO IN CLAUSE (A) OR
(B) ABOVE, OR (II) AN OPINION OF COUNSEL WHICH ESTABLISHES TO THE
SATISFACTION OF THE DEPOSITOR, THE SERVICER, THE TRUSTEE AND THE
CERTIFICATE REGISTRAR THAT THE PURCHASE OR HOLDING OF THIS
CERTIFICATE WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND BEING
DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS OF ERISA OR THE PROHIBITED TRANSACTION
PROVISIONS OF THE CODE, WILL NOT CONSTITUTE OR RESULT IN A
PROHIBITED TRANSACTION WITHIN THE MEANING OF SECTION 406 OR SECTION
407 OF ERISA OR SECTION 4975 OF THE CODE, AND WILL NOT SUBJECT THE
DEPOSITOR, THE SERVICER, THE TRUSTEE OR THE CERTIFICATE REGISTRAR
TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR
LIABILITIES UNDER ERISA OR SECTION 4975 OF THE CODE), WHICH OPINION
OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUST FUND, THE SERVICER,
THE TRUSTEE, THE CERTIFICATE REGISTRAR OR THE DEPOSITOR.
THIS CERTIFICATE WILL NOT BE ACCEPTED FOR REGISTRATION OF
TRANSFER EXCEPT UPON PRESENTATION OF EVIDENCE SATISFACTORY TO THE
TRUSTEE THAT THE RESTRICTIONS ON TRANSFER SET FORTH ABOVE HAVE BEEN
COMPLIED WITH, ALL AS PROVIDED IN THE TRUST AGREEMENT.
REGISTERED
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS
CERTIFICATE IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED.
FORM OF CLASS C CERTIFICATE
KRT ORIGINATION CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
NUMBER: C-1 ORIGINAL
DENOMINATION: $-------------
DATE OF TRUST AND ORIGINAL CLASS C
SERVICING AGREEMENT: PRINCIPAL BALANCE: $-------------
JUNE 18, 1996
FIRST DISTRIBUTION DATE: CUSIP NUMBER: --------------
JULY 20, 1996
evidencing a percentage interest in all distributions
allocable to the Class C Certificates with respect to one
mortgage loan, secured by a first lien on 27 neighborhood
and community shopping center properties, which mortgage
loan was sold by
KRT ORIGINATION CORP.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN KRT ORIGINATION CORP., THE BORROWERS, THE SERVICER OR
THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE
LOAN ARE GUARANTEED OR INSURED BY KRT ORIGINATION CORP., THE BOR-
ROWERS, THE SERVICER OR THE TRUSTEE OR BY ANY OF THEIR RESPECTIVE
AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
AS PROVIDED IN THE TRUST AGREEMENT, THIS CERTIFICATE IS
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFERABILITY.
This certifies that ----------------------------- is the
registered owner of a beneficial interest in certain monthly
distributions with respect to the mortgage loan (the "Mortgage
Loan") to KRT Property Holdings, Inc., Hillcrest Plaza Limited
Partnership, KR Suburban, L.P., Fox Run, Limited Partnership, XX
XxxXxxxxx Holdings, Inc., KR Best Associates, L.P., KR 69th Street,
L.P., KR Trust One, Inc., KR Manchester, Inc., KR Street
Associates, L.P., KR Orange, Inc., KR Collegetown, Inc., KR
Hillcrest Mall, Inc. and XX Xxxxxxx, L.P. (the "Borrowers"), se-
cured by a first lien on 27 neighborhood and community shopping
center properties (each a "Mortgaged Property"), which Mortgage
Loan was sold by KRT Origination Corp. (hereinafter called the "De-
positor") together with certain other property held in trust for
the benefit of Certificateholders (collectively, the "Trust Fund").
The Trust Fund was created pursuant to a Trust and Servicing
Agreement, dated as specified above (the "Agreement"), among the
Depositor, GE Capital Asset Management Corporation, as servicer
(the "Servicer"), and State Street Bank and Trust Company, as
trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth below. To the extent not defined
herein, the capitalized terms used herein have the meanings
assigned to them in the Trust Agreement.
This Certificate is one of a duly authorized issue of
Certificates, designated as KRT Origination Corp. Commercial Xxxx-
xxxx Pass-Through Certificates, Class A (the "Class A Certifi-
xxxxx"), Class B (the "Class B Certificates"), Class C (the "Class
C Certificates"), Class D (the "Class D Certificates") and Class R
(the "Class R Certificates" and, collectively with the Class A,
Class B, Class C and Class D Certificates, the "Certificates"), and
is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound. The Class C, Class D and Class R
Certificates are subordinated to the Class A and Class B Certif-
icates in right of payment to the extent described in the Trust
Agreement.
The Class C Certificates represent, in the aggregate, an
initial beneficial ownership interest of 15.9% in the Trust REMIC
(as hereinafter defined), and will bear interest at a fixed rate of
8.28% per annum. Pursuant to the terms of the Trust Agreement, the
Trustee or its designated Paying Agent will distribute from funds
in the Certificate Account on the 20th day of each month or, if
such 18th day is not a Business Day, the first Business Day
immediately following (each, a "Distribution Date"), commencing on
July 20, 1996, to the Person in whose name this Certificate is
registered at the close of business on the last day of the
preceding Interest Accrual Period (the "Record Date"), payments of
principal and interest on this Certificate in the amounts and in
the priorities set forth in the Trust Agreement for such Distribu-
tion Date.
Distributions on this Certificate will be made on each
Distribution Date by the Trustee or its designated Paying Agent
either by check mailed to the address of the Holder hereof, as such
name and address shall appear on the Certificate Register, or, upon
written request by a Holder hereof holding in excess of $5,000,000
in initial Certificate Balance on all Classes of Certificates,
delivered at least five Business Days prior to the related Record
Date, by wire transfer in immediately available funds to the
account of such Holder maintained at a bank in the United States,
or by such other means of payment as the Holder hereof and the
Paying Agent shall agree upon. Notwithstanding the above, the
final distribution on this Certificate will be made after due
notice by the Paying Agent of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose and
specified in such notice of final distribution.
The Trust Fund will consist primarily of the Mortgage
Loan secured by the Mortgage on the Borrowers fee or, in certain
cases, leasehold interests in the Mortgaged Properties. Pursuant
to the Trust Agreement, a segregated pool of assets of the Trust
Fund will consist of (i) the Mortgage Loan (other than the right to
Default Interest), (ii) the amounts held from time to time
Distribution Account and the Certificate Account established under
the Trust Agreement, (iii) any property which secures the Mortgage
Loan and which is acquired by foreclosure, deed-in-lieu of
foreclosure or otherwise and (iv) certain other rights set forth in
the Trust Agreement. The Depositor intends to cause an election to
be made to treat such segregated pool of assets as a real estate
mortgage investment conduit (a "REMIC"), and upon such election,
such segregated pool of assets will be a REMIC known as "the Trust
REMIC." The Certificates (other than the Class R Certificates)
will be designated as the "regular interests" in the Trust REMIC
and the Class R Certificates will be designated as the "residual
interests" in the Trust REMIC.
The Certificate Registrar will cause to be kept at the
Corporate Trust Office or at the office of its designated agent, a
Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar will
provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of
transfer of any Certificate at any office or agency of the
Certificate Registrar maintained for such purposes, the Certificate
Registrar or a designated Authenticating Agent will, subject to the
limitations set forth in the Trust Agreement, authenticate and
deliver, in the name of the designated transferee or transferees,
a Certificate of a like Class and aggregate Percentage Interest and
dated the date of authentication.
No service charge will be made for any transfer or
exchange of the Certificate, but the Certificate Registrar or its
designated agent may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection
with any transfer or exchange of the Certificate. Prior to the due
presentation of a Certificate for registration of transfer, the
Depositor, the Servicer and the Trustee 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
the Trust Agreement and for all other purposes whatsoever, and
neither the Depositor, the Servicer nor the Trustee will be
affected by notice to the contrary.
The Trust Agreement may be amended from time to time by
the Servicer and the Trustee, without the consent of any of the
Holders of Certificates or the Depositor, (i) to cure any
ambiguity, (ii) to correct or supplement any provision therein
which may be defective or inconsistent with any other provisions
therein, (iii) to the extent necessary or desirable to maintain the
status of the Trust REMIC as a REMIC, (iv) to maintain a rating for
the Class A, Class B, Class C and Class D Certificates from a
nationally recognized statistical rating organization or (v) to
make any other provisions with respect to matters or questions
arising under the Trust Agreement; provided that no such amendment
effected pursuant to clause (i), (ii), (iv) or (v) shall (a)
adversely affect in any material respect the interests of any
Holder not consenting thereto or (b) adversely affect the status of
the Trust REMIC as a REMIC.
The Trust Agreement may also be amended from time to time
by the Servicer and the Trustee with the consent of the Holders of
Certificates evidencing not less than 50% by Certificate Balance of
the Certificates (other than the Class R Certificates) for the
purpose of adding any provisions or changing in any manner or
eliminating any of the provisions of the Trust Agreement or of
modifying in any manner the rights of the Holders of Certificates;
provided, however, that no such amendment shall (i) reduce in any
manner the amount of, or delay the timing of, payments received on
the Mortgage Loan which are required to be distributed in respect
of any Certificate without the consent of the Holder of such Cer-
tificate; (ii) alter the obligations of the Servicer or the Trustee
to make an Advance or alter the servicing standards set forth in
the Trust Agreement; (iii) adversely affect the status of the Trust
REMIC as a REMIC (as evidenced by a Nondisqualification Opinion)
without the consent of 100% of the Certificateholders (including
the Class R Certificateholders); or (iv) reduce the aforesaid per-
centages of Certificates the Holders of which are required to
consent to any such amendments.
The respective obligations and responsibilities of the
Servicer, the Depositor, the Paying Agent and the Trustee created
under the Trust Agreement (other than the obligation of the Paying
Agent to make certain payments to Certificateholders after the
Final Distribution Date and certain obligations of the Servicer to
the Trustee, including the obligation of the Servicer to disburse
money from the Distribution Account in payment of certain sums then
due the Trustee) shall terminate upon the last action required to
be taken by the Paying Agent on the Final Distribution Date
pursuant to Article IX of the Trust Agreement upon the earlier of
(i) the later of (A) the final payment on the Mortgage Loan or (B)
the final liquidation of the last Foreclosed Property remaining in
the Trust Fund and the distribution of the proceeds thereof in
accordance with the Trust Agreement, (ii) the termination of the
Trust Agreement pursuant to Section 9.1(b) thereof, (iii) the sale
of the Mortgage Notes pursuant to Section 9.1(c) of the Trust
Agreement and (iv) the termination of the Trust Fund pursuant to
Section 9.1(d) of the Trust Agreement; provided, however, that in
no event shall the trust created pursuant to the terms of the Trust
Agreement continue beyond the expiration of twenty-one years from
the death of the last survivor of the descendants of Xxxxxx X.
Xxxxxxx, the late ambassador of the United States to the Court of
St. Xxxxx, living on the date hereof.
THIS CERTIFICATE AND THE TRUST AGREEMENT SHALL BE CON-
STRUED IN ACCORDANCE WITH, AND BE GOVERNED BY, THE LAWS OF THE
STATE OF NEW YORK.
Unless the certificate of authentication hereon has been
executed by the Trustee or by its designated Authenticating Agent,
by manual signature, this Certificate shall not be entitled to any
benefit under the Trust Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Class C
Certificate to be duly executed.
STATE STREET BANK AND TRUST COMPANY,
As Trustee
By: ----------------------
Name:
Title:
Dated: ----------------------
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS C CERTIFICATES REFERRED TO IN
THE WITHIN-MENTIONED AGREEMENT.
STATE STREET BANK AND TRUST COMPANY,
As Authenticating Agent
By: ----------------------
Authorized Signatory FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
(PLEASE INSERT SOCIAL SECURITY*
OR
U.S. TAXPAYER IDENTIFICATION
NUMBER OF ASSIGNEE)
(Please Print or Typewrite Name and Address of Assignee)
the within Certificate, and all rights thereunder, and does hereby
irrevocably constitute and appoint,
Attorney
to transfer the within Certificate on the books kept for
registration thereof, with full power and substitution in the
premises.
Dated:
(Signature Guaranteed)
NOTICE: The signature of this assignment must correspond with the name
as it appears upon the face of the within Certificate in every particular,
without alteration or enlargement or any change whatsoever.
(*This information, which is voluntary, is being requested to
ensure that the Assignee will not be subject to backup withholding
under Section 3406 of the Code.)
EXHIBIT D
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY ("DTC"), NEW YORK,
NEW YORK, TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGIS-
TERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC OR SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO.), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
TRANSFERS OF THIS BOOK-ENTRY CERTIFICATE SHALL BE LIMITED
TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE, AND TRANSFERS OF
BENEFICIAL INTERESTS IN THIS BOOK-ENTRY CERTIFICATE SHALL BE LIMIT-
ED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH
IN THE TRUST AGREEMENT REFERRED TO BELOW.]
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAW. THE HOLDER HEREOF, BY
PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE
REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND,
WITHIN THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THE
CERTIFICATES OR THE LAST DATE ON WHICH THIS CERTIFICATE IS HELD BY
AN AFFILIATE OF THE DEPOSITOR ONLY (1) TO THE DEPOSITOR, (2)
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT TO A PERSON WHO THE
HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
("QIB") WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED
THAT SUCH REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A; (3) IN AN OFFSHORE TRANSACTION IN ACCOR-
DANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT; (4)
PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE); OR (5) IN CERTIFICATED
FORM TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D OF THE
SECURITIES ACT WHO IS NOT A QIB PURSUANT TO ANY OTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT
TO (A) IN CERTAIN CIRCUMSTANCES RECEIPT BY THE DEPOSITOR AND THE
TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE TRUST
AGREEMENT REFERRED TO BELOW, AND (B) RECEIPT BY THE DEPOSITOR AND
THE TRUSTEE OF SUCH CERTIFICATES, LEGAL OPINIONS AND OTHER EVIDENCE
ACCEPTABLE TO THE DEPOSITOR AND THE TRUSTEE THAT SUCH REOFFER,
RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT
AND OTHER APPLICABLE LAWS.
THIS CERTIFICATE OR ANY INTEREST HEREIN SHOULD NOT BE
PURCHASED BY A TRANSFEREE THAT IS (A) AN EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT, INCLUDING AN INDIVIDUAL RETIREMENT
ACCOUNT OR A XXXXX PLAN, WHICH IS SUBJECT TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A
GOVERNMENT PLAN SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH IS
TO A MATERIAL EXTENT SIMILAR TO THE FOREGOING PROVISIONS OF ERISA
OR THE CODE (A "SIMILAR LAW") (EACH A "PLAN"), OR (B) AN INSURANCE
COMPANY USING ASSETS OF ANY INSURANCE COMPANY SEPARATE ACCOUNT OR
GENERAL ACCOUNT IN WHICH ASSETS OF SUCH PLAN ARE INVESTED (OR WHICH
ARE DEEMED PURSUANT TO ERISA OR ANY SIMILAR LAW TO INCLUDE ASSETS
OF SUCH PLANS) OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR
USING THE ASSETS OF ANY SUCH PLAN. EACH PROSPECTIVE TRANSFEREE OF
THIS CERTIFICATE WILL BE REQUIRED TO DELIVER TO THE DEPOSITOR, THE
CERTIFICATE REGISTRAR AND THE TRUSTEE, (I) THE ERISA TRANSFER
AFFIDAVIT, SUBSTANTIALLY IN THE FORM ATTACHED TO THE TRUST AND
SERVICING AGREEMENT REFERRED TO HEREIN, STATING THAT SUCH
PROSPECTIVE TRANSFEREE IS NOT A PERSON REFERRED TO IN CLAUSE (A) OR
(B) ABOVE, OR (II) AN OPINION OF COUNSEL WHICH ESTABLISHES TO THE
SATISFACTION OF THE DEPOSITOR, THE SERVICER, THE TRUSTEE AND THE
CERTIFICATE REGISTRAR THAT THE PURCHASE OR HOLDING OF THIS
CERTIFICATE WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND BEING
DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS OF ERISA OR THE PROHIBITED TRANSACTION
PROVISIONS OF THE CODE, WILL NOT CONSTITUTE OR RESULT IN A
PROHIBITED TRANSACTION WITHIN THE MEANING OF SECTION 406 OR SECTION
407 OF ERISA OR SECTION 4975 OF THE CODE, AND WILL NOT SUBJECT THE
DEPOSITOR, THE SERVICER, THE TRUSTEE OR THE CERTIFICATE REGISTRAR
TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR
LIABILITIES UNDER ERISA OR SECTION 4975 OF THE CODE), WHICH OPINION
OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUST FUND, THE SERVICER,
THE TRUSTEE, THE CERTIFICATE REGISTRAR OR THE DEPOSITOR.
THIS CERTIFICATE WILL NOT BE ACCEPTED FOR REGISTRATION OF
TRANSFER EXCEPT UPON PRESENTATION OF EVIDENCE SATISFACTORY TO THE
TRUSTEE THAT THE RESTRICTIONS ON TRANSFER SET FORTH ABOVE HAVE BEEN
COMPLIED WITH, ALL AS PROVIDED IN THE TRUST AGREEMENT.
REGISTERED
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS
CERTIFICATE IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED.
FORM OF CLASS D CERTIFICATE
KRT ORIGINATION CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
NUMBER: D-1 ORIGINAL
DENOMINATION: $-------------
DATE OF TRUST AND ORIGINAL CLASS D
SERVICING AGREEMENT: PRINCIPAL BALANCE: $-------------
JUNE 18, 1996
FIRST DISTRIBUTION DATE: CUSIP NUMBER: --------------
JULY 20, 1996
evidencing a percentage interest in all distributions
allocable to the Class A Certificates with respect to a
mortgage loan, secured by a first lien on 27 neighborhood
and community shopping center properties, which mortgage
loan was sold by
KRT ORIGINATION CORP.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN KRT ORIGINATION CORP., THE BORROWERS, THE SERVICER OR
THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE
LOAN ARE GUARANTEED OR INSURED BY KRT ORIGINATION CORP., THE BOR-
ROWERS, THE SERVICER OR THE TRUSTEE OR BY ANY OF THEIR RESPECTIVE
AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
AS PROVIDED IN THE TRUST AGREEMENT, THIS CERTIFICATE IS
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFERABILITY.
This certifies that
is the registered owner of a beneficial
interest in certain monthly distributions with respect to the xxxx-
xxxx loan (the "Mortgage Loan") to KRT Property Holdings, Inc.,
Hillcrest Plaza Limited Partnership, KR Suburban, L.P., Fox Run,
Limited Partnership, XX XxxXxxxxx Holdings, Inc., KR Best
Associates, L.P., KR 69th Street, L.P., KR Trust One, Inc., KR
Manchester, Inc., KR Street Associates, L.P., KR Orange, Inc., KR
Collegetown, Inc., KR Hillcrest Mall, Inc. and XX Xxxxxxx, L.P. by
a first lien on 27 neighborhood and community shopping center
properties (each a "Mortgaged Property"), which Mortgage Loan was
sold by KRT Origination Corp. (hereinafter called the "Depositor")
together with certain other property held in trust for the benefit
of Certificateholders (collectively, the "Trust Fund"). The Trust
Fund was created pursuant to a Trust and Servicing Agreement, dated
as specified above (the "Trust Agreement"), among the Depositor, GE
Capital Asset Management Corporation, as servicer (the "Servicer"),
and State Street Bank and Trust Company, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of
which is set forth below. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned to them in
the Trust Agreement.
This Certificate is one of a duly authorized issue of
Certificates, designated as KRT Origination Corp. Commercial Xxxx-
xxxx Pass-Through Certificates, Class A (the "Class A Certifi-
xxxxx"), Class B (the "Class B Certificates"), Class C (the "Class
C Certificates"), Class D (the "Class D Certificates") and Class R
(the "Class R Certificates" and, collectively with the Class A,
Class B, Class C and Class D Certificates, the "Certificates"), and
is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound. The Class D and Class R Certificates
are subordinated to the Class A, Class B and Class C Certificates
in right of payment to the extent described in the Trust Agreement.
The Class D Certificates represent, in the aggregate, an
initial beneficial ownership interest of 4.7% in the Trust Fund,
and will bear interest at a fixed rate of 8.92% per annum. Pursu-
ant to the terms of the Trust Agreement, the Trustee or its
designated Paying Agent will distribute from funds in the
Certificate Account on the 20th day of each month or, if such 20th
day is not a Business Day, the first Business Day immediately
following (each, a "Distribution Date"), commencing on July 20,
1996, to the Person in whose name this Certificate is registered at
the close of business on the last day of the preceding Interest
Accrual Period (the "Record Date"), payments of principal and
interest on this Certificate in the amounts and in the priorities
set forth in the Trust Agreement for such Distribution Date.
Distributions on this Certificate will be made on each
Distribution Date by the Trustee or its designated Paying Agent
either by check mailed to the address of the Holder hereof, as such
name and address shall appear on the Certificate Register, or, upon
written request by a Holder hereof holding in excess of $5,000,000
in initial Certificate Balance on all Classes of Certificates,
delivered at least five Business Days prior to the related Record
Date, by wire transfer in immediately available funds to the
account of such Holder maintained at a bank in the United States,
or by such other means of payment as the Holder hereof and the
Paying Agent shall agree upon. Notwithstanding the above, the
final distribution on this Certificate will be made after due
notice by the Paying Agent of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose and
specified in such notice of final distribution.
The Trust Fund will consist primarily of the Mortgage
Loan secured by the Mortgage on the Borrowers fee or, in certain
cases, leasehold interests in the Mortgaged Properties. Pursuant
to the Trust Agreement, a segregated pool of assets of the Trust
Fund will consist of (i) the Mortgage Loan (other than the right to
Default Interest), (ii) the amounts held from time to time in the
Distribution Account and the Certificate Account established under
the Trust Agreement, (iii) any property which secures the Mortgage
Loan and which is acquired by foreclosure, deed-in-lieu of
foreclosure or otherwise and (iv) certain other rights set forth in
the Trust Agreement. The Depositor intends to cause an election to
be made to treat such segregated pool of assets as a real estate
mortgage investment conduit (a "REMIC"), and upon such election,
such segregated pool of assets will be a REMIC known as the "Trust
REMIC." The Certificates (other than the Class R Certificates)
will be designated as the "regular interests" in REMIC and the
Class R Certificates will be designated as the "residual interests"
in the Trust REMIC.
The Certificate Registrar will cause to be kept at the
Corporate Trust Office or at the office of its designated agent, a
Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar will
provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of
transfer of any Certificate at any office or agency of the
Certificate Registrar maintained for such purposes, the Certificate
Registrar or a designated Authenticating Agent will, subject to the
limitations set forth in the Trust Agreement, authenticate and
deliver, in the name of the designated transferee or transferees,
a Certificate of a like Class and aggregate Percentage Interest and
dated the date of authentication.
No service charge will be made for any transfer or
exchange of the Certificate, but the Certificate Registrar or its
designated agent may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection
with any transfer or exchange of the Certificate. Prior to the due
presentation of a Certificate for registration of transfer, the
Depositor, the Servicer and the Trustee 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
the Trust Agreement and for all other purposes whatsoever, and
neither the Depositor, the Servicer nor the Trustee will be
affected by notice to the contrary.
The Trust Agreement may be amended from time to time by
the Servicer and the Trustee, without the consent of any of the
Holders of Certificates or the Depositor, (i) to cure any
ambiguity, (ii) to correct or supplement any provision therein
which may be defective or inconsistent with any other provisions
therein, (iii) to the extent necessary or desirable to maintain the
status of the Trust REMIC as a REMIC, (iv) to maintain a rating for
the Class A, Class B, Class C and Class D Certificates from a
nationally recognized statistical rating organization or (v) to
make any other provisions with respect to matters or questions
arising under the Trust Agreement; provided that no such amendment
effected pursuant to clause (i), (ii), (iv) or (v) shall (a)
adversely affect in any material respect the interests of any
Holder not consenting thereto or (b) adversely affect the status of
the Trust REMIC as a REMIC.
The Trust Agreement may also be amended from time to time
by the Servicer and the Trustee with the consent of the Holders of
Certificates evidencing not less than 50% by Certificate Balance of
the Certificates (other than the Class R Certificates) for the
purpose of adding any provisions or changing in any manner or
eliminating any of the provisions of the Trust Agreement or of
modifying in any manner the rights of the Holders of Certificates;
provided, however, that no such amendment shall (i) reduce in any
manner the amount of, or delay the timing of, payments received on
the Mortgage Loan which are required to be distributed in respect
of any Certificate without the consent of the Holder of such Cer-
tificate; (ii) alter the obligations of the Servicer or the Trustee
to make an Advance or alter the servicing standards set forth in
the Trust Agreement; (iii) adversely affect the status of the Trust
REMIC as a REMIC (as evidenced by a Nondisqualification Opinion)
without the consent of 100% of the Certificateholders (including
the Class R Certificateholders); or (iv) reduce the aforesaid per-
centages of Certificates the Holders of which are required to
consent to any such amendments.
The respective obligations and responsibilities of the
Servicer, the Depositor, the Paying Agent and the Trustee created
under the Trust Agreement (other than the obligation of the Paying
Agent to make certain payments to Certificateholders after the
Final Distribution Date and certain obligations of the Servicer to
the Trustee, including the obligation of the Servicer to disburse
money from the Distribution Account in payment of certain sums then
due the Trustee) shall terminate upon the last action required to
be taken by the Paying Agent on the Final Distribution Date
pursuant to Article IX of the Trust Agreement upon the earlier of
(i) the later of (A) the final payment on the Mortgage Loan or (B)
the final liquidation of the last Foreclosed Property remaining in
the Trust Fund and the distribution of the proceeds thereof in
accordance with the Trust Agreement, (ii) the termination of the
Trust Agreement pursuant to Section 9.1(b) thereof, (iii) the sale
of the Mortgage Notes pursuant to Section 9.1(c) of the Trust
Agreement and (iv) the termination of the Trust Fund pursuant to
Section 9.1(d) of the Trust Agreement; provided, however, that in
no event shall the trust created pursuant to the terms of the Trust
Agreement continue beyond the expiration of twenty-one years from
the death of the last survivor of the descendants of Xxxxxx X.
Xxxxxxx, the late ambassador of the United States to the Court of
St. Xxxxx, living on the date hereof.
THIS CERTIFICATE AND THE TRUST AGREEMENT SHALL BE CON-
STRUED IN ACCORDANCE WITH, AND BE GOVERNED BY, THE LAWS OF THE
STATE OF NEW YORK.
Unless the certificate of authentication hereon has been
executed by the Trustee or by its designated Authenticating Agent,
by manual signature, this Certificate shall not be entitled to any
benefit under the Trust Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Class D
Certificate to be duly executed.
STATE STREET BANK AND TRUST COMPANY,
As Trustee
By:------------------------------
Name:
Title:
Dated: -----------------
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS D CERTIFICATES REFERRED TO IN
THE WITHIN-MENTIONED AGREEMENT.
STATE STREET BANK AND TRUST COMPANY,
As Authenticating Agent
By: ----------------------
Authorized Signatory FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
(PLEASE INSERT SOCIAL SECURITY*
OR
U.S. TAXPAYER IDENTIFICATION
NUMBER OF ASSIGNEE)
(Please Print or Typewrite Name and Address of Assignee)
the within Certificate, and all rights thereunder, and does hereby
irrevocably constitute and appoint,
Attorney
to transfer the within Certificate on the books kept for
registration thereof, with full power and substitution in the
premises.
Dated:
(Signature Guaranteed)
NOTICE: The signature of this assignment must correspond with the name
as it appears upon the face of the within Certificate in every particular,
without alteration or enlargement or any change whatsoever.
(*This information, which is voluntary, is being requested to
ensure that the Assignee will not be subject to backup withholding
under Section 3406 of the Code.)
EXHIBIT R
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 86OG
AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. NEITHER
THIS CERTIFICATE NOR ANY BENEFICIAL INTEREST IN THIS CERTIFICATE
MAY BE TRANSFERRED, SOLD, PLEDGED, OR OTHERWISE DISPOSED OF UNLESS,
PRIOR TO SUCH DISPOSITION, THE PROPOSED TRANSFEREE DELIVERS TO THE
TRUSTEE, AMONG OTHER THINGS, (1) AN AFFIDAVIT STATING THAT THE
PROPOSED TRANSFEREE IS NOT A DISQUALIFIED ORGANIZATION OR AN ERISA
PLAN, AS SUCH TERMS ARE DEFINED IN THE TRUST AGREEMENT, AND (2) A
TRANSFEREE AGREEMENT IN THE APPROPRIATE FORM, AND SATISFIES THE
REQUIREMENTS SET FORTH THEREIN. NOTWITHSTANDING THE PAYMENT OF ALL
AMOUNTS, IF ANY, REQUIRED TO BE PAID TO THE HOLDER HEREOF, THIS
CERTIFICATE SHALL REMAIN OUTSTANDING UNTIL THE LIQUIDATION OF THE
TRUST FUND AND THE TRUST REMIC IN ACCORDANCE WITH ARTICLE IX OF THE
TRUST AGREEMENT.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR UNDER ANY STATE SECURITIES OR BLUE SKY LAW OF
ANY STATE OF THE UNITED STATES OR ANY FOREIGN SECURITIES LAW. THE
HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES FOR THE
BENEFIT OF THE TRUSTEE AND THE DEPOSITOR THAT THIS CERTIFICATE MAY
BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN
COMPLIANCE WITH THE TERMS OF THE TRUST AGREEMENT AND THE
RESTRICTIONS CONTAINED THEREIN AND HEREIN AND IN COMPLIANCE WITH
THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (1) IN
CERTIFICATED FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN
THE MEANING THEREOF IN RULE 501(a)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT OR PURSUANT TO ANY OTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT, TO (A) THE RECEIPT BY THE CERTIFICATE REGISTRAR OF A
LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE TRUST AGREEMENT OR
(B) THE RECEIPT BY THE REGISTRAR OF SUCH OTHER EVIDENCE ACCEPTABLE
TO THE REGISTRAR THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS
IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR
(2) TO THE DEPOSITOR OR ITS AFFILIATES.
THIS CERTIFICATE WILL NOT BE ACCEPTED FOR REGISTRATION OF
TRANSFER EXCEPT UPON PRESENTATION OF EVIDENCE SATISFACTORY TO THE
CERTIFICATE REGISTRAR THAT THE RESTRICTIONS ON TRANSFER SET FORTH
ABOVE AND HEREIN HAVE BEEN COMPLIED WITH, ALL AS PROVIDED IN THE
TRUST AGREEMENT.
FORM OF CLASS R CERTIFICATE
KRT ORIGINATION CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
CLASS R
NUMBER: R-----------
PERCENTAGE INTEREST: ------%
CERTIFICATE BALANCE: None
CERTIFICATE RATE: None
evidencing a percentage interest in all distributions
allocable to the Class R Certificates with respect to a
mortgage loan, secured by a first lien on 27 neighborhood
community shopping center properties (the "Mortgaged
Property"), which mortgage loan was sold by
KRT ORIGINATION CORP.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN KRT ORIGINATION CORP., THE BORROWERS, THE SERVICER, THE
TRUSTEE OR THE FISCAL AGENT REFERRED TO BELOW OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOAN ARE GUARANTEED OR INSURED BY KRT ORIGINATION CORP.,
THE BORROWERS, THE SERVICER OR THE TRUSTEE OR BY ANY OF THEIR
RESPECTIVE AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
This certifies that ----------------------- is the
registered owner of a ----% interest in the "residual interest" in
the Trust REMIC (as defined in the Trust and Servicing Agreement,
dated as of June 18, 1996 (the "Trust Agreement"), among the
Depositor, GE Capital Asset Management Corporation, as servicer
(the "Servicer"), and State Street Bank and Trust Company, as
trustee (the "Trustee"). The assets of the Trust Fund include,
collectively, a mortgage loan (the "Mortgage Loan") to KRT Property
Holdings, Inc., Hillcrest Plaza Limited Partnership, KR Suburban,
L.P., Fox Run, Limited Partnership, XX XxxXxxxxx Holdings, Inc., KR
Best Associates, L.P., KR 69th Street, L.P., KR Trust One, Inc., KR
Manchester, Inc., KR Street Associates, L.P., KR Orange, Inc., KR
Collegetown, Inc., KR Hillcrest Mall, Inc. and XX Xxxxxxx, L.P.
(the "Borrowers") secured by a first lien on the Mortgaged
Property, which Mortgage Loan was sold by KRT Origination Corp.
(hereinafter called the "Depositor") together with certain other
property held in trust for the benefit of Certificateholders. The
Trust Fund was created pursuant to the Trust Agreement, a summary
of certain of the pertinent provisions of which is set forth below.
To the extent not defined herein, the capitalized terms used herein
have the meanings assigned to them in the Trust Agreement.
This Certificate is one of a duly authorized issue of
Certificates, designated as KRT Origination Corp., Commercial
Mortgage Pass-Through Certificates, Class A (the "Class A
Certificates"), Class B (the "Class B Certificates"), Class C (the
"Class C Certificates"), Class D (the "Class D Certificates"), and
Class R (the "Class R Certificates" and, collectively with the
Class A, Class B, Class C and Class D Certificates, the
"Certificates"), and is issued under and is subject to the terms,
provisions and conditions of the Trust Agreement, to which
Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound. The
Class R Certificates are subordinated to the Class A, Class B,
Class C and Class D Certificates in right of payment to the extent
described in the Trust Agreement.
This Class R Certificate has no Certificate Balance or
Certificate Rate. Pursuant to the terms of the Trust Agreement,
the Trustee or its designated paying agent will distribute from
funds in the Certificate Account on the 20th day of the month or,
if such 20th day is not a Business Day, the first Business Day
immediately following such 20th day (a "Distribution Date"),
interest earned on funds on deposit in the Distribution Account to
the extent and subject to the limitations set forth in the Trust
Agreement, and after the Certificate Balances of the Class A, Class
B, Class C and Class D Certificates have been reduced to zero and
the Holders of the Class A, Class B, Class C and Class D
Certificates have received all amounts payable to them with respect
to the Trust REMIC under the Trust Agreement, to the Person in
whose name this Certificate is registered at the close of business
on the last day of the preceding Interest Accrual Period (the
"Record Date"), an amount equal its pro rata share of the balance,
if any, of the amounts available for distribution in the
Distribution Account on such Distribution Date.
Distributions on this Certificate will be made on each
Distribution Date by the Trustee or its designated Paying Agent
either by check mailed to the address of the Holder hereof, as such
name and address shall appear on the Certificate Register, or by
such other means of payment as the Holder hereof and the Paying
Agent shall agree upon. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by
the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or
agency appointed by the Trustee for that purpose and specified in
such notice of final distribution. Notwithstanding the final
payment of all amounts (if any) payable hereunder, this Certificate
will remain outstanding until liquidation of the Trust REMIC.
The Trust Fund will consist primarily of the Mortgage
Loan secured by the Mortgage on the Borrowers fee or, in certain
cases, leasehold interests in the Mortgaged Properties. Pursuant
to the Trust Agreement, a segregated pool of assets of the Trust
Fund will consist of (i) the Mortgage Loan (other than the right to
Default Interest), (ii) the amounts held from time to time in the
Distribution Account and the Certificate Account established under
the Trust Agreement, (iii) any property which secures the Mortgage
Loan and which is acquired by foreclosure, deed-in-lieu of
foreclosure or otherwise and (iv) certain other rights set forth in
the Trust Agreement. The Depositor intends to cause an election to
be made to treat such segregated pool of assets as a real estate
mortgage investment conduit (a "REMIC"), and upon such election,
such segregated pool of assets will be a REMIC known as the "Trust
REMIC." The Certificates (other than the Class R Certificates)
will be designated as the "regular interests" in REMIC and the
Class R Certificates will be designated as the "residual interests"
in the Trust REMIC.
The Certificate Registrar will cause to be kept at the
Corporate Trust Office or at the office of its designated agent, a
Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar will
provide for the registration of Certificates and of transfers and
exchanges of Certificates. Upon surrender for registration of
transfer of any Certificate at any office or agency of the
Certificate Registrar maintained for such purposes, the Certificate
Registrar or a designated Authenticating Agent will, subject to the
limitations set forth in the Trust Agreement, authenticate and
deliver, in the name of the designated transferee or transferees,
a Certificate of a like Class and aggregate Percentage Interest and
dated the date of authentication.
No Class R Certificate or any percentage interest therein
(whether or not a Certificate is physically transferred) may be
owned, pledged or transferred, directly or indirectly, by or to a
Disqualified Organization or an employee benefit plan subject to
the Employee Retirement Income Security Act of 1974, as amended or
a plan or individual retirement account subject to Section 4975 of
the Internal Revenue Code (such plans and individual retirement
accounts are hereinafter collectively referred to as "ERISA Plan").
Prior to and as a condition of the registration of any transfer,
sale or other disposition of a Class R Certificate or any
percentage interest therein, the proposed transferee shall deliver
to the Certificate Registrar an affidavit in substantially the
respective forms attached to the Trust Agreement as Exhibit X-x(a)
(for a U.S. Holder) or Exhibit X-x(b) (for a foreign Holder)
representing and warranting that such transferee is neither a
Disqualified Organization nor an ERISA Plan nor an agent or nominee
acting on behalf of a Disqualified Organization or an ERISA Plan
(any such transferee, a "Permitted Transferee"). In addition, the
Certificate Registrar may (but shall have no obligation to)
require, prior to and as a condition of any such transfer, the
delivery by the proposed transferee of an opinion of Counsel,
satisfactory in form and substance to the Certificate Registrar,
that such proposed transferee or, if the proposed transferee is an
agent or nominee, the proposed beneficial owner, is not a
Disqualified Organization or an ERISA Plan. Notwithstanding the
registration in the Certificate Register of any transfer, sale, or
other disposition of a Class R Certificate or any percentage
therein to a Disqualified Organization or an ERISA Plan or an agent
or nominee acting on behalf of a Disqualified Organization or an
ERISA Plan, such registration shall be deemed to be of no legal
force or effect whatsoever and such Disqualified Organization or
such ERISA Plan (or such agent or nominee) shall not be deemed to
be a Certificateholder for any purpose hereunder, including, but
not limited to, the receipt of distributions on such Class R
Certificate. The Certificate Registrar shall not be under any
liability to any person for any registration or transfer of a Class
R Certificate to a Disqualified Organization or an ERISA Plan or
for the maturity of any payments due on such Class R Certificate to
the Holder thereof or for taking any other action with respect to
such Holder under the provisions of the Trust Agreement, so long as
the transfer was effected in accordance with Section 5.2(h) of the
Trust Agreement, unless the Certificate Registrar shall have actual
knowledge at the time of such transfer or the time of such payment
or other action that the transferee is a Disqualified Organization
or an ERISA Plan (or an agent or nominee thereof). The Certificate
Registrar shall be entitled to recover from any Holder of a Class
R Certificate or any percentage interest therein that was a
Disqualified Organization or an ERISA Plan (or an agent or nominee
thereof) at the time it became a Holder or any subsequent time it
became a Disqualified organization or an ERISA Plan all payments
made on such Class R Certificate at and after either of such times
(and all costs and expenses, including but not limited to
attorneys' fees, incurred in connection therewith). Any payment
(not including any such costs and expenses) so recovered by the
Certificate Registrar shall be paid and delivered to the last
preceding Holder of such Class R Certificate or interest therein.
Any percentage interest in a Class R Certificate shall be a pro
rata individual interest.
In addition to the foregoing restrictions on transfer of
a Class R Certificate or any percentage interest therein, the
Certificate Registrar will not register the transfer of a Class R
Certificate unless (a) it has received a transferee letter either
in the form attached as Exhibit J-2(a) or Exhibit J-2(b) to the
Trust Agreement and (b) in the event that the transferee letter is
in the form of Exhibit J-2(b) (a "Foreign Holder Letter"), it has
received written evidence satisfactory to the Certificate Registrar
that the transferor has paid or provided for payment of all taxes
(including all accrued taxes on excess inclusion income) accrued on
such Class R Certificate in accordance with the provisions set
forth in Section 10.1(k) of the Trust Agreement, which written
evidence shall include a copy of the applicable Forms 1066Q (or
other applicable form prescribed by the Internal Revenue Service),
to the extent that any such form has been filed, evidencing the
amount of excess inclusion income for the periods during which the
transferor held such Class R Certificate or any percentage interest
therein; (c) it has received the calculations and certifications
described in paragraph (4) of Exhibit J-2(b) or paragraph (14) of
Exhibit J-2(a), and in the event that the transferee letter is in
the form of Exhibit J-2(b), the requirements set forth in paragraph
(3)(xi) thereof have been complied with to the satisfaction of the
Certificate Registrar. Upon satisfaction of the foregoing
requirements, the Certificate Registrar shall register the Class R
Certificate in the name of the transferee on whose benefit the
transferee letter is made and delivered (and not in the name of any
nominee thereof).
If any purported transferee shall become a registered
Holder of a Class R Certificate in violation of the provisions of
Section 5.2(h) of the Trust Agreement, then, upon receipt of
written notice to the Certificate Registrar that the registration
of transfer of such Class R Certificate was not in fact permitted
by Section 5.2(h) of the Trust Agreement, the last preceding
Permitted Transferee shall be restored to all rights as Holder
thereof retroactive to the date of such registration of transfer of
such Class R Certificate. The Certificate Registrar shall be under
no liability to any Person for any registration of transfer of a
Class R Certificate that is in fact not permitted by Section 5.2(h)
of the Trust Agreement, for making any payment due on such
Certificate to the registered Holder thereof or for taking any
other action with respect to such Holder under the provisions of
the Trust Agreement so long as the transfer was registered upon
receipt of the affidavit and the transferee letter described in
Section 5.2(h) of the Trust Agreement.
In addition to the restrictions set forth above with
respect to the Class R Certificates, the Certificate Registrar
shall register the transfer of a Class R Certificate only (A) to
the Depositor or its Affiliates or (B) only if (x) the transferor
has advised the Certificate Registrar in writing that the Class R
Certificate is being transferred to an Institutional Accredited
Investor or a QIB and (y) prior to transfer the transferor
furnishes to the Certificate Registrar a Transferee Letter,
provided that, (a) in lieu thereof, the transferee or proposed
transferor may furnish such other certifications, legal opinions or
other information as are reasonably satisfactory to the Depositor
and the Certificate Registrar to confirm that the proposed transfer
is being made pursuant to an exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act
or (b) if based upon an Opinion of Counsel to the effect that the
delivery of (A)(x) and (y) above are not sufficient to confirm that
the proposed transfer is being made pursuant to an exemption from,
or in a transaction not subject to, the registration requirements
of the Securities Act, the Depositor and the Certificate Registrar
may as a condition of the registration of any such transfer require
the transferor to furnish other certifications, legal opinions or
other information prior to registering the transfer of a Class R
Certificate.
No service charge will be made for any transfer or
exchange of the Certificate, but the Certificate Registrar or its
designated agent may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection
with any transfer or exchange of the Certificate. Prior to the due
presentation of a Certificate for registration of transfer, the
Depositor, the Servicer and the Trustee 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
the Trust Agreement and for all other purposes whatsoever, and
neither the Depositor, the Servicer nor the Trustee will be
affected by notice to the contrary.
The Trust Agreement may be amended from time to time by
the Servicer and the Trustee, without the consent of any of the
Holders of Certificates or the Depositor, (i) to cure any
ambiguity, (ii) to correct or supplement any provision therein
which may be defective or inconsistent with any other provisions
therein, (iii) to the extent necessary or desirable to maintain the
status of the Trust REMIC as a REMIC, (iv) to maintain a rating for
the Class A, Class B, Class C and Class D Certificates from a
nationally recognized statistical rating organization or (v) to
make any other provisions with respect to matters or questions
arising under the Trust Agreement; provided that no such amendment
effected pursuant to clause (i), (ii), (iv) or (v) shall (a)
adversely affect in any material respect the interests of any
Holder not consenting thereto or (b) adversely affect the status of
the Trust REMIC as a REMIC.
The Trust Agreement may also be amended from time to time
by the Servicer and the Trustee with the consent of the Holders of
Certificates evidencing not less than 50% by Certificate Balance of
the Certificates (other than the Class R Certificates) for the
purpose of adding any provisions or changing in any manner or
eliminating any of the provisions of the Trust Agreement or of
modifying in any manner the rights of the Holders of Certificates;
provided, however, that no such amendment shall (i) reduce in any
manner the amount of, or delay the timing of, payments received on
the Mortgage Loan which are required to be distributed in respect
of any Certificate without the consent of the Holder of such Cer-
tificate; (ii) alter the obligations of the Servicer or the Trustee
to make an Advance or alter the servicing standards set forth in
the Trust Agreement; (iii) adversely affect the status of the Trust
REMIC as a REMIC (as evidenced by a Nondisqualification Opinion)
without the consent of 100% of the Certificateholders (including
the Class R Certificateholders); or (iv) reduce the aforesaid per-
centages of Certificates the Holders of which are required to
consent to any such amendments.
The respective obligations and responsibilities of the
Servicer, the Depositor, the Paying Agent and the Trustee created
under the Trust Agreement (other than the obligation of the Paying
Agent to make certain payments to Certificateholders after the
Final Distribution Date and certain obligations of the Servicer to
the Trustee, including the obligation of the Servicer to disburse
money from the Distribution Account in payment of certain sums then
due the Trustee) shall terminate upon the last action required to
be taken by the Paying Agent on the Final Distribution Date
pursuant to Article IX of the Trust Agreement upon the earlier of
(i) the later of (A) the final payment on the Mortgage Loan or (B)
the final liquidation of the last Foreclosed Property remaining in
the Trust Fund and the distribution of the proceeds thereof in
accordance with the Trust Agreement, (ii) the termination of the
Trust Agreement pursuant to Section 9.1(b) thereof, (iii) the sale
of the Mortgage Notes pursuant to Section 9.1(c) of the Trust
Agreement and (iv) the termination of the Trust Fund pursuant to
Section 9.1(d) of the Trust Agreement; provided, however, that in
no event shall the trust created pursuant to the terms of the Trust
Agreement continue beyond the expiration of twenty-one years from
the death of the last survivor of the descendants of Xxxxxx X.
Xxxxxxx, the late ambassador of the United States to the Court of
St. Xxxxx, living on the date hereof.
THIS CERTIFICATE AND THE TRUST AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND BE GOVERNED BY, THE LAWS OF THE
STATE OF NEW YORK.
Unless the certificate of authentication hereon has been
executed by the Authenticating Agent, by manual signature, this
Certificate shall not he entitled to any benefit under the Trust
Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Class R
Certificate to be duly executed.
STATE STREET BANK AND TRUST COMPANY,
As Trustee
By: --------------------------
Name:
Title:
Dated: ---------------
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS R CERTIFICATES REFERRED TO IN
THE WITHIN-MENTIONED AGREEMENT.
STATE STREET BANK AND TRUST COMPANY,
As Authenticating Agent
By: -------------------------
Authorized Signatory
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
(PLEASE INSERT SOCIAL SECURITY*
OR
U.S. TAXPAYER IDENTIFICATION
NUMBER OF ASSIGNEE)
(Please Print or Typewrite Name and Address of Assignee)
the within Certificate, and all rights thereunder, and does hereby
irrevocably constitute and appoint,
Attorney
to transfer the within Certificate on the books kept for
registration thereof, with full power and substitution in the
premises.
Dated:
(Signature Guaranteed)
NOTICE: The signature of this assignment must correspond with the name
as it appears upon the face of the within Certificate in every particular,
without alteration or enlargement or any change whatsoever.
(*This information, which is voluntary, is being requested to
ensure that the Assignee will not be subject to backup withholding
under Section 3406 of the Code.)
EXHIBIT E
FORM OF SECURITIES LEGEND
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAW. THE HOLDER HEREOF, BY
PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE
REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND,
WITHIN THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THE
CERTIFICATES OR THE LAST DATE ON WHICH THIS CERTIFICATE IS HELD BY
AN AFFILIATE OF THE DEPOSITOR ONLY (1) TO THE DEPOSITOR, (2) PURSU-
ANT TO RULE 144A UNDER THE SECURITIES ACT TO A PERSON WHO THE
HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
("QIB") WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED
THAT SUCH REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A; (3) IN AN OFFSHORE TRANSACTION IN ACCOR-
DANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT; (4)
PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE); OR (5) IN CERTIFICATED
FORM TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D OF THE SECURI-
TIES ACT WHO IS NOT A QIB PURSUANT TO ANY OTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO (A) IN
CERTAIN CIRCUMSTANCES RECEIPT BY THE DEPOSITOR AND THE TRUSTEE OF
A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE TRUST AGREEMENT
REFERRED TO BELOW, AND (B) RECEIPT BY THE DEPOSITOR AND THE TRUSTEE
OF SUCH CERTIFICATES, LEGAL OPINION AND OTHER EVIDENCE ACCEPTABLE
TO THE DEPOSITOR AND THE TRUSTEE THAT SUCH REOFFER, RESALE, PLEDGE
OR TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS.
EXHIBIT F
FORM OF RULE 144A TRANSFER CERTIFICATE
State Street Bank and Trust Company,
as Trustee
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Re: KRT Origination Corp. Commercial
Mortgage Pass-Through Certificates
Reference is hereby made to the Trust and Servicing
Agreement dated as of June 18, 1996 (the "Trust Agreement") among
KRT Origination Corp., as Depositor, GE Capital Asset Management
Corporation, as Servicer, and State Street Bank and Trust Company,
as Trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Trust Agreement.
[NOTE: INSERT [A] FOR TRANSFERS OF DEFINITIVE CERTIFICATES TO
TRANSFEREES THAT TAKE DELIVERY IN INTERESTS IN THE BOOK-ENTRY
CERTIFICATES. INSERT [B] FOR TRANSFERS OF DEFINITIVE CERTIFICATES
TO TRANSFEREES THAT TAKE DELIVERY IN DEFINITIVE CERTIFICATES.
INSERT [C] FOR TRANSFERS OF INTERESTS IN THE BOOK-ENTRY CERTIFI-
XXXXX TO TRANSFEREES THAT TAKE DELIVERY IN DEFINITIVE CERTIFI-
XXXXX.)
[A] This letter relates to $ initial Certificate
Balance of Class [A, B, C or D] Certificates which are held in the
form of Definitive Certificates in the name of [insert name of
transferor] (the "Transferor"). The Transferor has requested a
transfer of such Definitive Certificates for a beneficial interest
in the Book-Entry Certificate of such Class (CUSIP No. ---------)
to be held with the Clearing Agency in the name of [insert name of
transferee].
[B] This letter relates to $ initial
Certificate Balance of Class [A, B, C or D] Certificates which are
held in the form of Definitive Certificates registered in the name
of [insert name of transferor] (the "Transferor"). The Transferor
has requested a transfer of such Definitive Certificates for
Definitive Certificates of such Class registered in the name of
[insert name of transferee].
[C] This letter relates to $ initial
Certificate Balance of Class [A, B, C or D] Certificates which are
held in the form of a beneficial interest in the Book-Entry
Certificate of such Class (CUSIP No. ---------) with the Clearing
Agency in the name of [insert name of transferor] (the "Transfer-
or"). The Transferor has requested a transfer of such beneficial
interest in the Book-Entry Certificate for Definitive Certificates
of such Class registered in the name of [insert name of transfer-
ee].
In connection with such request, and in respect of such
Certificates, the Transferor hereby certifies that such
Certificates are being transferred in accordance with (i) the
transfer restrictions set forth in the Trust Agreement and the
Certificates and (ii) Rule 144A under the Securities Act to a
purchaser that the Transferor reasonably believes is a "qualified
institutional buyer" within the meaning of Rule 144A purchasing for
its own account or for the account of a "qualified institutional
buyer," which purchaser is aware that the sale to it is being made
in reliance upon Rule 144A, in a transaction meeting the require-
ments of Rule 144A and in accordance with any applicable securities
laws of any state of the United States or any other applicable
jurisdiction.
This certificate and the statements contained herein are
made for your benefit and the benefit of the Placement Agent and
the Depositor.
[Insert Name of Transferor]
By:-------------------------
Name:
Title:
Dated: ---------------
EXHIBIT G
FORM OF REGULATION S TRANSFER CERTIFICATE
State Street Bank and Trust Company,
as Trustee
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Re: KRT Origination Corp. Commercial
Mortgage Pass-Through Certificates
Reference is hereby made to the Trust and Servicing
Agreement, dated as of June 18, 1996 (the "Trust Agreement") among
KRT Origination Corp., as Depositor, GE Capital Asset Management
Corporation, as Servicer, and State Street Bank and Trust Company,
as Trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Trust Agreement or in Regu-
lation S.
[NOTE: INSERT [A] FOR TRANSFERS OF DEFINITIVE CERTIFICATES TO
TRANSFEREES THAT TAKE DELIVERY IN DEFINITIVE CERTIFICATES. INSERT
[B] FOR TRANSFERS OF INTERESTS IN THE BOOK-ENTRY CERTIFICATES TO
TRANSFEREES THAT TAKE DELIVERY IN DEFINITIVE CERTIFICATES.]
[A] This letter relates to U.S. $ initial
Certificate Balance of Class [A, B, C, D or R] Certificates which
are held in the form of Definitive Certificates registered in the
name of [insert name of transferor] (the "Transferor"). The
Transferor has requested a transfer of such Definitive Certificates
for Definitive Certificates of such class registered in the name of
[insert name of transferee].
[B] This letter relates to U.S. $-------- initial
Certificate Balance of Class [A, B, C or D] Certificates which are
held in the form of a beneficial interest in the Book-Entry
Certificate of such Class (CUSIP No. ---------) with the Clearing
Agency in the name of [insert name of transferor] (the "Transfer-
or"). The Transferor has requested a transfer of such beneficial
interest for Definitive Certificates of such class registered in
the name of [insert name of transferee].
[NOTE: INSERT [C] IN EITHER CASE.]
[C] In connection with such request and in respect of
such Certificates, the Transferor does hereby certify that such
transfer has been effected in accordance with the transfer restric-
tions set forth in the Trust Agreement and the Certificates and
pursuant to and in accordance with Rule 904 of Regulation S under
the Securities Act, and accordingly the Transferor does hereby
certify that:
(1) the offer of the Certificates was not made to a
person in the United States;
[(2) at the time the buy order was originated, the trans-
feree was outside the United States or the Transferor and any
person acting on its behalf reasonably believed that the
transferee was outside the United States,]
[(2) the transaction was executed in, on or through the
facilities of a designated offshore securities market and
neither the Transferor nor any person acting on its behalf
knows that the transaction was pre-arranged with a buyer in
the United States,]1
(3) no directed selling efforts have been made in
contravention of the requirements of 904(b) of Regulation S,
and
(4) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act.
This certificate and the statements contained herein are
made for your benefit and the benefit of the Placement Agent and
the Depositor.
[Insert Name of Transferor]
By:----------------------
Name:
Title:
Dated:---------------------
EXHIBIT H
FORM OF RULE 144A EXCHANGE CERTIFICATE
State Street Bank and Trust Company,
as Trustee
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Re: KRT Origination Corp. Commercial
Mortgage Pass-Through Certificates
Reference is hereby made to the Trust and Servicing
Agreement, dated as of June 18, 1996 (the "Trust Agreement") among
KRT Origination Corp., as Depositor, GE Capital Asset Management
Corporation, as Servicer, and State Street Bank and Trust Company,
as Trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Trust Agreement.
This letter relates to U.S. $ initial
Certificate Balance of Class [A, B, C or D] Certificates which are
held in the form of Definitive Certificates in the name of [insert
name of holder] (the "Holder"). The Holder has requested an
exchange of such Definitive Certificates for a beneficial interest
in the Book-Entry Certificate of such Class (CUSIP No. ---------)
to be held with the Clearing Agency in the name of the Holder.
In connection with such request, and in respect of such
Certificates, the Holder does hereby certify that it is a "qual-
ified institutional buyer" within the meaning of Rule 144A.
This certificate and the statements contained herein are
made for your benefit and the benefit of the Placement Agent and
the Depositor.
[Insert Name of Holders]
By:-----------------------
Name:
Title:
Dated:---------------
EXHIBIT I
FORM OF TRANSFEREE'S LETTER FOR
INSTITUTIONAL ACCREDITED INVESTORS
(Date)
State Street Bank and Trust Company,
as Trustee
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated
World Financial Center, Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
In connection with our proposed purchase of $-------- principal
amount of Commercial Mortgage Pass-Through Certificates (the
"Offered Certificates") of KRT Origination Corp. (the "Depositor"),
we confirm that:
(1) We have received a copy of the Offering Memorandum dated June
18, 1996 relating to the Offered Certificates (the "Memoran-
dum"), and we understand that the Offered Certificates have
not been, and will not be, registered under the Securities Act
of 1933, as amended (the "Securities Act"), and may not be
sold except as permitted in the following sentence. We agree,
on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell any
Offered Certificates within three years of the later of the
date of original issuance of the Offered Certificates or the
last day on which such Offered Certificates are owned by the
Depositor or any affiliate of the Depositor we will do so only
(A) to the Depositor, (B) to "qualified institutional buyers"
(within the meaning of Rule 144A under the Securities Act) in
accordance with Rule 144A under the Securities Act ("QIBs"),
(C) pursuant to an exemption from registration in accordance
with Rule 904 of Regulation S under the Securities Act, (D)
pursuant to the exemption from registration provided by Rule
144 under the Securities Act, or (E) to an institutional "ac-
credited investor" within the meaning of Rule 501(a)(1), (2),
(3) or (7) of Regulation D under the Securities Act that is
not a QIB (an "Institutional Accredited Investor") which,
prior to such transfer, delivers to the Trustee under the
Trust and Servicing Agreement dated as of June 18, 1996 among
the Depositor, GE Capital Asset Management Corporation, as
Servicer, and State Street Bank and Trust Company, as Trustee
(the "Trustee"), a signed letter in the form of this letter;
and we further agree, in the capacities stated above, to
provide to any person purchasing any of the Offered Certifi-
xxxxx from us a notice advising such purchaser that resales of
the Offered Certificates are restricted as stated herein.
(2) We understand that, on any proposed resale of any Offered
Certificates to an Institutional Accredited Investor, we will
be required to furnish to the Trustee and the Depositor such
certifications, legal opinions and other information as either
of them may reasonably require to confirm that the proposed
sale is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of
the Securities Act. We further understand that the Offered
Certificates purchased by us will bear a legend to the fore-
going effect.
(3) We are acquiring the Offered Certificates for investment
purposes and not with a view to, or for offer or sale in
connection with, any distribution in violation of the
Securities Act. We have such knowledge and experience in
financial and business matters as to be capable of evaluating
the merits and risks of our investment in the Offered Certifi-
xxxxx, and we and any account for which we are acting are each
able to bear the economic risk of such investment.
(4) We are acquiring the Offered Certificates purchased by us for
our own account or for one or more accounts (each of which is
an Institutional Accredited Investor or a QIB) as to each of
which we exercise sole investment discretion.
(5) We have received such information as we deem necessary in
order to make our investment decision.
(6) If we are acquiring Class A Offered Certificates, we
understand that in accordance with ERISA and the Code, no Plan
as to which the Placement Agent, any Lender, the Depositor,
the Borrowers, the Servicer or the Trustee is a party in
interest or disqualified person, and no person acting on
behalf of such a Plan may acquire such Offered Certificate
unless the acquisition would constitute an exempt transaction
under a statutory exemption or any of the administrative
exemptions issued by the U.S. Department of Labor.
(7) If we are acquiring Class B, Class C or Class D Offered Cer-
tificates, we are not a Plan, and no Plan Assets have been
used to acquire such Offered Certificates.
Terms used in this letter which are not otherwise defined
herein have the respective meanings assigned thereto in the
Memorandum.
You, the Depositor and the Borrowers are entitled to rely upon
this letter and are irrevocably authorized to produce this letter
or a copy hereof to any interested party in any administrative or
legal proceeding or official inquiry with respect to the matters
covered hereby.
Very truly yours,
[PURCHASER]
By:------------------------
Name:
Title:
Offered Certificates to be purchased:
$---------- original Certificate Balance
of Class --- Offered Certificates.
EXHIBIT J-1(a)
(US Holder)
CLASS R CERTIFICATEHOLDER AFFIDAVIT PURSUANT TO
SECTION 860E(e)
OF THE INTERNAL REVENUE CODE OF 1986
Re: KRT Origination Corp., Commercial Mortgage
Pass-Through Certificates, Class R
STATE OF )
) ss.:
COUNTY OF )
I, ----------------, under penalties of perjury, declare
that, to the best of my knowledge and belief, the following
representations are true, correct, and complete and being first
sworn, depose and say:
1. That I am the ---------------- of
-------------------------- (the "Investor"), whose taxpayer
identification number is ----------------, on behalf of which I
have the authority to make this affidavit.
2. That the Investor is acquiring a Class R Certificate
(a "Residual Certificate") representing ---% of the Class R
Certificates, which Residual Certificate represents the residual
interest in a REMIC established by KRT Origination Corp. (the
"Depositor") to secure its Commercial Mortgage Pass-Through
Certificates, for which a real estate mortgage investment conduit
("REMIC") election has been made under Section 860D of the Internal
Revenue Code of 1986, as amended (the "Code").
3. That no purpose of the acquisition of the Residual
Certificate is to avoid or impede the assessment or collection of
federal income tax.
4. That the Investor is not a "Disqualified
Organization" (as defined below), and that the Investor is not
acquiring the Class R Certificate for the account of, or as agent
or nominee of, or with a view to the transfer of direct or indirect
record or beneficial ownership to, a Disqualified Organization.
For the purposes hereof, a Disqualified Organization is any of the
following: (i) the United States, any State or political
subdivision thereof, any foreign government, any international
organization, or any agency or instrumentality (as defined in
Section 860E(e)(5) of the Code) of any of the foregoing; (ii) any
organization (other than a xxxxxx'x cooperative as defined in
Section 521 of the Code) that is exempt from federal income
taxation (including taxation under the unrelated business taxable
income provisions of the Code); or (iii) any rural telephone or
electrical service cooperative described in Section 1381(A)(2)(C)
of the Code.
5. That the Investor acknowledges that Section 860E(e)
of the Code imposes a substantial tax on the transferor or, in
certain circumstances, on an agent for the transferee, with respect
to any transfer of any interest in any Residual Certificate to a
Disqualified Organization.
6. That the Investor is not a Benefit Plan Investor,
which for purposes hereof means (A) any employee benefit plan (as
defined in Section 3(3) of ERISA), whether or not it is subject to
Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), (B) any plan described in Section 4975(e)(1) of
the Code, (C) any governmental plan, as defined in Section 3(32) of
ERISA, subject to any federal, state or local law which is, to a
material extent, similar to the provisions of ERISA or Section 4975
of the Code or (D) any entity whose underlying assets include plan
assets by reason of a plan's investment in the entity (within the
meaning of Department of Labor Regulation 29 C.F.R. 2510.3-101).
7. That the Investor is a "U.S. Person" as that term is
defined in the Transferee's Letter of even date herewith, and that
the Investor is the beneficial owner of the Residual Certificate,
and is not holding the Residual Certificate as nominee for any
other person.
8. That the Investor acknowledges that as the holder of
the Residual Certificate, to the extent the Class R Certificate
would be treated as a noneconomic residual interest within the
meaning of Treasury regulation Section 1.860E-1(c)(2), the Investor
may incur tax liabilities in excess of cash flows generated by the
Class R Certificate and that the Investor intends to pay taxes
associated with holding the Class R Certificate as they become due.
9. That the following information of the Investor is
true and correct:
Address: -------------------------------------; contact for tax
matters ---------------; phone number ---------------; form of
Organization of Investor ------------------------; and Acquisition
Date ---------------.
IN WITNESS WHEREOF, the Investor has caused this
instrument to be duly executed on its behalf, by its --------------
and its seal to be hereunto attached, this ---- day of
-------------, 19--.
[NAME OF INVESTOR]
By: ------------------------
Name:
Title:
Personally appeared before me --------------, known or
proved to me to be the same person who executed the foregoing
instrument and to be a ------------- of the Investor, and
acknowledged to me that he executed the same as his free act and
deed and as the free act and deed of the Investor.
Subscribed and sworn before me
this --- day of -------, 19--.
--------------------------
Notary Public
My commission expires the --- day
of ---------------, 19--.
EXHIBIT J-1(b)
(Foreign Holder)
CLASS R CERTIFICATEHOLDER AFFIDAVIT PURSUANT TO
SECTION 860E(e)
OF THE INTERNAL REVENUE CODE OF 1986
Re: KRT Origination Corp., Commercial Mortgage
Pass-Through Certificates, Class R
STATE OF )
)
COUNTY OF ) ss.:
)
COUNTRY OF )
I, ----------------------, under penalties of perjury,
declare that, to the best of my knowledge and belief, the following
representations are true, correct, and complete and being first
sworn, depose and say;
1. That I am the ----------------- of -------
------------ (the "Investor"), whose taxpayer identification
number, if any, is --------------, on behalf of which I have the
authority to make this affidavit.
2. That the Investor is acquiring a Class R Certificate
(a "Residual Certificate") representing --% of the Class R
Certificates, which Residual Certificate represents the interests
in the REMIC established by KRT Origination Corp. (the "Depositor")
to secure its Commercial Mortgage Pass-Through Certificates, for
which a real estate mortgage investment conduit ("REMIC") election
has been made under Section 860D of the Internal Revenue Code of
1986, as amended (the "Code").
3. That the Investor is not a "Disqualified
Organization" (as defined below), and that the Investor is not
acquiring the Class R Certificate for the account of, or as agent
or nominee of, or with a view to the transfer of direct or indirect
record or beneficial ownership to, a Disqualified Organization.
For the purposes hereof, a Disqualified Organization is any of the
following: (i) the United States, any State or political
subdivision thereof, any foreign government, any international
organization, or any agency or instrumentality (as defined in
Section 860E(e)(5) of the Code) of any of the foregoing; (ii) any
organization (other than a xxxxxx'x cooperative as defined in
Section 521 of the Code) that is exempt from federal income
taxation (including taxation under the unrelated business taxable
income provisions of the Code); or (iii) any rural telephone or
electrical service cooperative described in Section 1381(a)(2)(C)
of the Code.
4. That the Investor acknowledges that Section 860E(e)
of the Code imposes a substantial tax on the transferor or, in
certain circumstances, on an agent for the transferee, with respect
to any transfer of any interest in any Residual Certificate to a
Disqualified Organization.
5. That the Investor is not a Benefit Plan Investor,
which for purposes hereof means (A) any employee benefit plan (as
defined in Section 3(3) of ERISA), whether or not it is subject to
Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), (B) any plan described in Section 4975(e)(1) of
the Code, (C) any governmental plan, as defined in Section 3(32) of
ERISA, subject to any federal, state or local law which is, to a
material extent, similar to the provisions of ERISA or Section 4975
of the Code or (D) any entity whose underlying assets include plan
assets by reason of a plan's investment in the entity (within the
meaning of Department of Labor Regulation 29 C.F.R. 2510.3-101).
6. That no purpose of the acquisition of the Residual
Certificate by the Investor is to avoid or impede the assessment or
collection of federal income tax.
7. That the Investor is not a "U.S. Person" as that
term is defined in the Transferee's Letter of even date herewith,
and that the Investor is the beneficial owner of the Residual
Certificate, and is not holding the Residual Certificate as nominee
for any other person.
8. That the following information of the Investor is
true and correct:
Address:
-----------------------------------------------------------------
--- ; contact for tax matters ---------; phone number --------;
form of Organization of Investor ------------------; and Acquisi-
tion Date -----------.
IN WITNESS WHEREOF, the Investor has caused this
instrument to be duly executed on its behalf, by its -----------
and its seal to be hereunto attached, this ---- day of
-------------, 19--.
[NAME OF INVESTOR]
By: ---------------------
Name:
Title:
Personally appeared before me -----------------, known or
proved to me to be the same person who executed the foregoing
instrument and to be a ---------------------- of the Investor, and
acknowledged to me that he executed the same as his free act and
deed and as the free act and deed of the Investor.
Subscribed and sworn before me
this --- day of -----------, 19--.
------------------------------
Notary Public
My commission expires the --- day
of ----------, 19--.
EXHIBIT J-2(a)
[US Holder]
TRANSFEREE'S LETTER
-------------, 19--
KRT Origination Corp.
c/o Kranzco Realty Trust
000 Xxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
State Street Bank and Trust Company
as Certificate Registrar
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Ladies and Gentlemen:
We propose to purchase a KRT Origination Corp. Commercial
Mortgage Pass-Through Class R Certificate (a "Residual Certifi-
cate") issued under the Trust and Servicing Agreement, dated as of
June 18, 1996, among KRT Origination Corp., as depositor, GE
Capital Asset Management Corporation, as servicer and State Street
Bank and Trust Company, as trustee (the "Trust and Servicing Agree-
ment"). Capitalized terms used but not defined herein shall have
the meanings set forth in the Trust and Servicing Agreement. We
are delivering this letter pursuant to Section 5.2(h) of the Trust
and Servicing Agreement.
1. We certify that on the date hereof we have
simultaneously herewith delivered to you an affidavit certifying,
among other things, that (A) we are not a Disqualified Organization
and (B) we are not purchasing such Residual Certificate on behalf
of a Disqualified Organization. We understand that any breach by
us of this certification may cause us to be liable for a tax
imposed upon transfers to Disqualified Organizations.
2. We acknowledge that we will be the beneficial owner
of the Residual Certificate and that the Residual Certificate will
be registered in our name and not in the name of a nominee.
3. We certify that no purpose of our purchase of the
Residual Certificate is to avoid or impede the assessment or
collection of tax.
4. We represent that:
(a) We understand that the Residual Certificate
represents for federal income tax purposes a "residual interest" in
a real estate mortgage investment conduit.
(b) We understand that as the holder of the
Residual Certificate we will be required to take into account, in
determining our taxable income, our pro rata percentage interest of
the taxable income of the Trust REMIC in accordance with all
applicable provisions of the Internal Revenue Code of 1986, as
amended (the "Code").
5. We understand that if, notwithstanding the transfer
restrictions, the Residual Certificate is in fact transferred to a
Disqualified Organization, a tax may be imposed on the transferor
of such Residual Certificate. We agree that any breach by us of
these representations shall render such transfer of such Residual
Certificate by us absolutely null and void and shall cause no
rights in the Residual Certificate to vest in the transferee.
6. The sale to us and our purchase of the Residual
Certificate constitutes a sale for tax and all other purposes and
each party thereto has received due and adequate consideration. In
our view, the transaction represents fair value, representing the
results of arms length negotiations and taking into account our
analysis of the tax and other consequences of investment in the
Residual Certificate.
7. We expect that the purchase of the Residual
Certificate, together with the receipt of the price, if any,
therefor will be economically neutral or profitable to us overall,
after all related expenses (including taxes) have been paid and
based on conservative assumptions with respect to discount rates,
prepayments and other factors necessary to evaluate profitability.
8. We are 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 or trust that is subject to U.S. federal
income tax regardless of the source of its income. We are duly
organized and validly existing under the laws of the jurisdiction
of our organization. We are neither bankrupt nor insolvent nor do
we have reason to believe that we will become bankrupt or
insolvent. We have conducted and are conducting our business so as
to comply in all material respects with all applicable statutes and
regulations. The person executing and delivering this letter on
our behalf is duly authorized to do so, the execution and delivery
by us of this letter and the consummation of the transaction on the
terms set forth herein are within our corporate power and upon such
execution and delivery, this letter will constitute our legal,
valid and binding obligation, enforceable against us in accordance
with its terms, subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium and
other laws affecting the right of creditors generally and to
general principles of equity and the discretion of the court
(regardless of whether enforcement of such remedies is considered
in a proceeding in equity or at law).
9. Neither the execution and delivery by us of this
letter, nor the compliance by us with the provisions hereof, nor
the consummation by us of the transactions as set forth herein,
will (A) conflict with or result in a breach of, or constitute a
default or result in the acceleration of any obligation under, our
certificate of incorporation or by-laws or, after giving effect to
the consents or the taking of the actions contemplated by clause
(B) of this subparagraph, any of the provisions of any law, govern-
mental rule, regulation, judgment, decree or order binding on us or
our properties, or any of the provisions of any indenture or
mortgage or any other contract or instrument to which we are a
party or by which we or any of our properties is bound, or (B) re-
quire the consent of or notice to or any filing with, any person,
entity or governmental body, which has not been obtained or made by
us.
10. We anticipate being a profit-making entity on an
ongoing basis.
11. We have filed all required federal and state income
tax returns and have paid all federal and state income taxes due;
we intend to file and pay all such returns and taxes in the future.
We acknowledge that as the holder of the Residual Certificate, to
the extent the Residual Certificate would be treated as a
noneconomic residual interest within the meaning of Treasury
Regulation Section 1.860E-1(c)(2), we may incur tax liabilities in
excess of cash flows generated by the Residual Certificate and that
we intend to pay taxes associated with holding the Residual
Certificate as they become due.
12. We agree that in the event that at some future time
we wish to transfer any Residual Certificate, we will transfer such
Residual Certificate only to a transferee that:
(i) is not a Disqualified Organization and is
not purchasing such Residual Certificate on behalf of a
Disqualified Organization, and
(ii) has delivered to the Certificate Registrar
a transferee letter in the form of Exhibit J-2(a) or J-2(b) to the
Trust and Servicing Agreement, as appropriate, and an affidavit in
the form of Exhibit J-1(a) or J-1(b) to the Trust and Servicing
Agreement, as appropriate, and, if requested by the Certificate
Registrar, an opinion of counsel, in form acceptable to the
Certificate Registrar, that the proposed transfer will not cause
the Residual Certificate to be held by a Disqualified Organization.
13. We are knowledgeable and experienced in financial,
business and tax matters generally and in particular, the
investment risks and tax consequences of REMIC residuals that
provide little or no cash flow, and are capable of evaluating the
merits and risks of an investment in the Residual Certificates; we
are able to bear the economic risks of an investment in the
Residual Certificates.
14. In addition, we acknowledge that the Certificate
Registrar will not register the transfer of a Residual Certificate
to a transferee that is a non-U.S. Person required to deliver a
transferee's letter in the form attached as Exhibit J-2(b) to the
Trust and Servicing Agreement unless we have furnished to the
Servicer on behalf of the Trustee, (i) calculations prepared at our
expense by a Person acceptable to the Servicer demonstrating that
the expected future distributions on the Residual Certificate will
equal at least 30% of the anticipated excess inclusion, as provided
in Treasury Regulation Section 1.860G-3(a) (or any successor provi-
sions, to the extent applicable to the Residual Certificate) and
(ii) a statement certifying that we reasonably expect that the
transferee will receive an amount of distributions from the REMIC
at least equal to 30% of each anticipated excess inclusion and that
such amounts will be distributed at or after the time at which the
excess inclusion accrues and not later than the year following the
year in which such excess inclusion accrues. The calculations
prepared pursuant to clause (i) shall demonstrate that the expected
distributions will equal at least 30% of the anticipated excess
inclusion and that such amounts will be distributed at or after the
time such excess inclusion accrues and not later than the year
following the year in which such excess inclusion accrues.
15. "U.S. Person" shall mean 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 or trust that is
subject to U.S. federal income tax regardless of the source of its
income.
16. We hereby designate the Servicer as our fiduciary to
perform the duties of the tax matters person for the Trust REMIC.
Very truly yours,
[Name of Transferee]
By:--------------------------
Name:
Title:
EXHIBIT J-2(b)
[Foreign Transferee]
TRANSFEREE'S LETTER
--------------, 199-
KRT Origination Corp.
c/o Kranzco Realty Trust
000 Xxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
State Street and Trust Company
as Certificate Registrar
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Ladies and Gentlemen:
We propose to purchase a KRT Origination Corp. Commercial
Mortgage Pass-Through Class R Certificate (a "Residual Certifi-
cate") issued under a Trust and Servicing Agreement, dated as of
June 18, 1996, among KRT Origination Corp., as depositor, GE
Capital Asset Management Corporation, as servicer, and State Street
Bank and Trust Company, as trustee (the "Trust and Servicing Agree-
ment"). Capitalized terms used but not defined herein shall have
the meanings set forth in the Trust and Servicing Agreement. We
are delivering this letter pursuant to Section 5.2(h) of the Trust
and Servicing Agreement.
1. We certify that on the date hereof we have
simultaneously herewith delivered to you an affidavit certifying,
among other things, that (A) we are not a Disqualified Organization
and (B) we are not purchasing such Residual Certificate on behalf
of a Disqualified Organization. We understand that any breach by
us of this certification may cause us to be liable for a tax
imposed upon transfers to Disqualified Organizations.
2. We acknowledge that we have reviewed (a) a copy of
the original Memorandum; (b) applicable U.S. tax law regarding
withholding taxes and, in particular, the taxation of REMIC
residuals held by non-U.S. Persons; and we have reviewed the
historical and projected tax liability on the Residual Certificate
and compared it to the projected cash flow of the Residual
Certificate.
3. We agree that we will not hold the Residual
Certificate at any time in connection with the conduct of a trade
or business in the United States and:
(i) represent that we are either (a) a
corporation that was not created or organized under the laws of the
United States or any jurisdiction therein or (b) a person who is a
U.S. Alien (as defined below) other than a corporation and we agree
to furnish the Withholding Agent with a Form W-8 simultaneously
with the execution of this letter;
(ii) acknowledge that we will be the benefi-
cial owner of the Residual Certificate and that the Residual
Certificate will be registered in our name and not in the name of
a nominee;
(iii) acknowledge that we will be subject to
U.S. income tax under Code Section 871 or 881 on any "excess
inclusion" that accrues with respect to the Residual Certificate
that accrue during the time which we hold, or, in certain circum-
stances, former holders of such Residual Certificate held, such
Residual Certificate;
(iv) acknowledge that we understand that
future losses cannot be used to reduce the residual's accumulated
excess inclusion income, either from one quarter to another or over
the life of the Residual Certificate and, accordingly, the gross
amount of excess inclusion income will be subject to withholding
tax liability;
(v) agree to pay any such taxes (including
previous taxes on excess inclusion income accrued from the date of
acquisition, or such greater amount as may be due if previously
accrued taxes have not been paid as required by the Trust and
Servicing Agreement and this Letter in each year in which (a) we
receive any cash payment with respect to the Residual Certificate
or (b) we dispose of the Residual Certificate, or earlier as
required by law) and we agree to provide satisfactory written
evidence of such payment to the Withholding Agent which shall
include a copy of the applicable Forms 1066Q (or other applicable
form prescribed by the Internal Revenue Service) evidencing the
amount of excess inclusion income for the periods during which the
transferor held the Residual Certificate (as defined below);
(vi) agree that until the evidence described
in clause (v) above has been provided with respect to periods
through the end of the most recent calendar quarter, the
Certificate Registrar will not register a transfer of a Residual
Certificate;
(vii) agree that until the evidence described
in class (v) above has been provided for the period from the end of
the most recent calendar quarter through the date of transfer of
the Residual Certificate, the Withholding Agent may (a) withhold
all (or any portion) of distributions that would otherwise be made
on the Residual Certificate and (b) pay the withheld amount to the
Internal Revenue Service (the "IRS") on behalf of any Residual
Certificateholder, including any former holder;
(viii) agree that the Withholding Agent is
entitled to withhold (and pay to the IRS) any portion of any
payment on the Residual Certificate that the Withholding Agent may
reasonably determine is required to be withheld (such amount may be
based on the Withholding Agent's reasonable understanding of the
law, any reasonable estimate of the facts and any reasonable
assumption as to future events and, if the Withholding Agent
reasonably determines that a more accurate determination of the
amount required to be withheld could be made at some point after
the date on which the related distribution is to be made, the
Withholding Agent may withhold the greatest amount that may
reasonably be expected to be required to be withheld from such
distribution (which, if appropriate, may be 100 percent of the
distribution));
(ix) acknowledge that any amount withheld
pursuant to clauses (vii) and (viii) above has been distributed on
the Residual Certificate pursuant to the terms and conditions of
the Trust and Servicing Agreement;
(x) if any of our equity holders are U.S.
Persons or are engaged in a U.S. trade or business, we have
consulted with our own tax advisors regarding the tax consequences
to them of our acquiring the Residual Certificate; and
(xi) agree that the Residual Certificate may
be transferred only to a person who is not a Disqualified
Organization and is not purchasing any such Residual Certificate on
behalf of a Disqualified Organization or any other entity and only
if we comply with this paragraph (xi). Prior, and as a condition,
to any transfer of the Residual Certificate, we will make a deposit
with (or provide evidence that payment has been made to the IRS)
the Withholding Agent equal in amount to the excess of (a) the
product of the rate of tax imposed by Code Section 871 or 881 (or
any successor provisions) and the sum of the excess inclusion with
respect to the Residual Certificate for all periods from issuance
of the Residual Certificate through the end of the most recent
calendar quarter during which the Residual Certificate was held by
us or another U.S. Alien over (b) the federal income taxes in
respect of such excess inclusion that have been previously withheld
from payments on such Residual Certificate or otherwise paid to the
IRS, to the extent the Withholding Agent has received satisfactory
written evidence that such taxes have been so paid in accordance
with clause (v) above or otherwise. In addition we agree to
provide a bond, letter of credit, pledge, indemnification, or other
security arrangement to, or make a cash deposit with, the
Withholding Agent sufficient to secure payment of the product of
the rate of tax imposed by Code Section 871 or 881 (or successor
provisions) and the excess inclusion income accrued from the end of
the most recent calendar quarter through the date of transfer.
Such bond, letter of credit, indemnification or other security
arrangement or deposit shall be satisfactory in form and substance
to the Withholding Agent and shall permit payment only to the IRS
on our behalf as described below, or, to the extent not necessary
to satisfy the taxes described in clause (iii) above, to us upon
presentation of satisfactory written evidence that such taxes have
been paid. Such bond, letter of credit, indemnification or other
security arrangement or deposit shall be used by the Withholding
Agent to make a payment to the IRS on the earliest of the date on
which such bond, letter of credit, pledge, indemnification, or
other security arrangement expires, the date on which the With-
holding Agent is directed in writing by us to make such payment, or
the date which is the second anniversary of the date of such
transfer. Earnings on any deposit shall be used first to pay any
taxes due on such earnings and otherwise shall be paid to us.
4. In addition, we acknowledge that the Certificate
Registrar will not register the transfer of the Residual
Certificate unless we have furnished to the Servicer, on behalf of
the Trustee, (i) calculations prepared at our expense by a Person
acceptable to the Servicer demonstrating that the expected future
distributions on the Residual Certificate will equal at least 30%
of the anticipated excess inclusion, as provided in Treasury
Regulation Section 1.860G-3(a) (or any successor provisions, to the
extent applicable to the Residual Certificate), and (ii) a state-
ment certifying that we reasonably expect that the transferee will
receive an amount of distributions from the Trust REMIC at least
equal to 30% of each excess inclusion from the Trust REMIC at or
after the time at which each such excess inclusion accrues and not
later than the year following the year in which such excess
inclusion accrues. The calculations prepared pursuant to clause
(i) shall demonstrate that the expected distributions will equal at
least 30% of the anticipated excess inclusion and that such amounts
will be distributed at or after the time such excess inclusion
accrues and not later than the year following the year in which
such excess inclusion accrues.
5. We understand that if, notwithstanding the transfer
restrictions, a Residual Certificate is in fact transferred to a
Disqualified Organization, a tax may be imposed on the transferor
of such Residual Certificate. We agree that any breach by us of
these representations shall render such transfer of such Residual
Certificate by us absolutely null and void and shall cause no
rights in the Residual Certificate to vest in the transferee.
6. The sale to us and our purchase of the Residual
Certificates constitute a sale for tax and all other purposes and
each party thereto has received due and adequate consideration, if
any. In our view, the transaction represents fair value,
representing the results of arms length negotiations and taking
into account our analysis of the tax and other consequences of
investment in the Residual Certificate.
7. We are duly organized and validly existing under the
laws of the jurisdiction of our organization. We are neither
bankrupt nor insolvent nor do we have reason to believe that we
will become bankrupt or insolvent. We have conducted and are
conducting our business so as to comply in all material respects
with all applicable statutes and regulations. The person executing
and delivering this letter on our behalf is duly authorized to do
so, the execution and delivery by us of this letter and the
consummation of the transaction on the terms set forth herein are
within our corporate power and upon such execution and delivery,
this letter will constitute our legal, valid and binding obliga-
tion, enforceable against us in accordance with its terms, subject,
as to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium and other laws affecting the
right of creditors generally and to general principals of equity
and the discretion of the court (regardless of whether enforcement
of such remedies is considered in a proceeding in equity or at
law).
8. Neither the execution and delivery by us of this
letter, nor the compliance by us with the provisions hereof, nor
the consummation by us of the transactions as set forth herein,
will (A) conflict with or result in a breach of, or constitute a
default or result in the acceleration of any obligation under, our
articles or by-laws or, after giving effect to the consents or the
taking of the actions contemplated by clause (B) of this
subparagraph, any of the provisions of any law, governmental rule,
regulation, judgment, decree or order binding on us or our
properties, or any of the provisions of any indenture or mortgage
or any other contract or instrument to which we are a party or by
which we or any of our properties is bound, or (B) require the
consent of or notice to or any filing with, any person, entity or
governmental body, which has not been obtained or made by us.
9. We agree that in the event that at some future time
we wish to transfer any Residual Certificate, we will transfer such
Residual Certificate only to a transferee that:
(i) is not a Disqualified Organization and is
not purchasing such Residual Certificate on behalf of a
Disqualified Organization, and
(ii) has delivered to the Certificate Registrar
a transferee letter in the form of Exhibit I-2(a) or I-2(b) to the
Trust and Servicing Agreement, as appropriate, and an affidavit in
the form of Exhibit I-1(a) or I-1(b) to the Trust and Servicing
Agreement, as appropriate, and, if requested by the Certificate
Registrar, an opinion of counsel (in form acceptable to the
Certificate Registrar) that the proposed transfer will not cause
the Residual Certificate to be held by a Disqualified Organization.
10. We are knowledgeable and experienced in financial,
business and tax matters generally and in particular, the
investment risks and tax consequences of REMIC residuals that
provide little or no cash flow after projected foreign withholding
tax liability, and are capable of evaluating the merits and risks
of an investment in the Residual Certificate; we expect to bear any
economic consequences of transferring the Residual Certificate if
and when we so elect.
11. "U.S. Alien" shall mean any person who is not a
"U.S. Person," except that for purposes of clause 3(xi) above, the
term shall include only such persons who are subject to withholding
under Code Sections 1441 or 1442 on distributions on a residual
interest in a REMIC that are attributable to excess inclusion
income.
"U.S. Person" shall mean 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 or trust that is
subject to U.S. federal income tax regardless of the source of its
income.
"Excess inclusion" shall have the meaning set forth in
Code Section 860E(c), as reasonably determined by the REMIC
administrator, based on the REMIC tax return.
"Withholding Agent" shall mean the Trustee, its paying
agent or any other person who is liable to withhold federal tax
from a distribution on the Residual Certificates under Code
Sections 1441 or 1442.
We hereby designate the Servicer as our fiduciary to act
as the tax matters person for the Trust REMIC.
Very truly yours,
----------------------------------------
[Name of Transferee]
By:-------------------------------------
Name:
Title:
EXHIBIT K
FORM OF TRUST RECEIPT
-------------, 000-
Xxxxx Xxxxxx Xxxx and Trust Company,
Mortgage Custodian
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Re: KRT Origination Corp. Commercial
Mortgage Pass-Through Certificates
Ladies and Gentlemen:
In connection with the administration of the Mortgage
Loan held by you as Mortgage Custodian under the Trust and
Servicing Agreement dated as of June 18, 1996 among KRT Origination
Corp., GE Capital Asset Management Corporation, as Servicer, and
State Street Bank and Trust Company, as Trustee (the "Trust Agree-
ment"), we hereby request a release of the portion of the Mortgage
File held by you as Mortgage Custodian relating to the following
described Mortgaged Property for the reason indicated below.
Mortgaged Property:
Reason for requesting the items:
---------- 1. Required for foreclosure or servicing.
Items requested: --------------------
The undersigned certifies that he is a Servicing Officer
of the Servicer holding the office set forth beneath his signature
and that he is duly authorized to execute this request on behalf of
the Servicer.
GE CAPITAL ASSET MANAGEMENT
CORPORATION, as Servicer
Date:-------------- By:----------------------
Name:
Title:
EXHIBIT L
[Form of Document Request]
--------------, ----
State Street Bank and Trust Company,
Mortgage Custodian
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Re: KRT Origination Corp. Commercial
Mortgage Pass-Through Certificates
Ladies and Gentlemen:
The undersigned Servicing Officer of GE Capital Asset Management
Corporation in its capacity as Servicer (the "Servicer") under the
Trust and Servicing Agreement dated as of June 18, 1996 (the "Trust
Agreement") by and among KRT Origination Corp., as Depositor, the
Servicer, and State Street Bank and Trust Company, as Trustee,
hereby requests the Mortgage Custodian to execute and return to the
Servicer the enclosed document(s) relating to the Mortgage Loan.
The undersigned Servicing Officer of the Servicer hereby certifies
to the Trustee that:
(1) the reason for this request is that the execution and delivery
of said document by the Trustee is necessary to the
foreclosure or Trustee's sale in respect of a Mortgaged
Property, or to legal action brought to obtain judgment
against the Borrowers or the Mortgage Notes or the Mortgage,
or to enforce other remedies or rights provided by the
Mortgage Notes or the Mortgage or otherwise available at law
or in equity, being carried out by the Servicer (or a Sub-
Servicer on its behalf), in accordance with the Trust
Agreement, and
(2) the execution and delivery of said document(s) by the Trustee
will not invalidate or otherwise affect the lien of the
Mortgage, except for the termination of such lien upon
completion of the foreclosure or trustee's sale.
This action is taken pursuant to and in accordance with the Trust
Agreement. The Servicer shall deposit or cause to be deposited
into the Distribution Account all Net Liquidation Proceeds (and
other amounts required to be deposited in the Distribution Account
pursuant to the Trust Agreement) in a timely manner.
Capitalized words and phrases used herein and not otherwise
expressly defined herein shall have the respective meanings
assigned to them in the Trust Agreement.
GE CAPITAL ASSET MANAGEMENT
CORPORATION, as Servicer
By:------------------------------
Name:
Title:
Date: ------------------
EXHIBIT N
FORM OF MORTGAGE CUSTODIAN INITIAL CERTIFICATE
----------, ----
KRT Origination Corp.
c/o Kranzco Realty Trust
000 Xxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Xxxxxxx Lynch, Pierce, Xxxxxx
& Xxxxx Incorporated
World Financial Center
Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
GE Capital Asset
Management Corporation
0000 Xxxx Xxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Re: Trust and Servicing Agreement with respect to
KRT Origination Corp. Commercial Mortgage
Pass-Through Certificates
Ladies and Gentlemen:
In accordance with Section 2.2(a) of the Trust and Servicing
Agreement, dated as of June 18, 1996 (the "Trust Agreement"), among
KRT Origination Corp., as Depositor, GE Capital Asset Management
Corporation, as Servicer, and State Street Bank and Trust Company,
as Trustee and Mortgage Custodian, the undersigned, as Trustee and
Mortgage Custodian, hereby acknowledges, subject to the provisions
of Section 2.1 of the Trust Agreement and the review procedures
provided for in Section 2.2(b) of the Trust Agreement, that, except
as set forth on Annex 1 hereto, it has received the Mortgage File
for the Mortgage Loan and will hold the documents constituting the
Mortgage File in trust, upon the trusts established pursuant to the
Trust Agreement, for the use and benefit of all present and future
Certificateholders. The undersigned has no actual knowledge of any
adverse claims, liens or encumbrances on any of the Mortgage Col-
lateral Security, including without limitation, federal tax liens
or liens arising under ERISA.
Capitalized words and phrases used herein and not otherwise
defined herein shall be the respective meanings assigned to them in
the Trust Agreement. This Certificate is subject in all respects
to the terms of said Trust Agreement.
STATE STREET BANK AND
TRUST COMPANY,
as Trustee and Mortgage
Custodian
By:
Name:
Title:
EXHIBIT M
FORM OF MORTGAGE CUSTODIAN FINAL CERTIFICATE
------------, ----
KRT Origination Corp.
c/o Kranzco Realty Trust
000 Xxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated
World Financial Center
Xxxxx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000
GE Capital Asset
Management Corporation
0000 Xxxx Xxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Re: Trust and Servicing Agreement with respect to
KRT Origination Corp. Commercial Mortgage
Pass-Through Certificates
Ladies and Gentlemen:
In accordance with Section 2.2(b) of the Trust and Servicing
Agreement, dated as of June 18, 1996 (the "Trust Agreement"), by
and among KRT Origination Corp., as Depositor, GE Capital Asset
Management Corporation, as Servicer, and State Street Bank and
Trust Company, as Trustee and Mortgage Custodian, the undersigned,
as Trustee and Mortgage Custodian, hereby certifies that, except as
noted in the exception report attached hereto, it has received the
documents or instruments listed in clauses (a) through (h) below:
(a) the original Mortgage Notes, endorsed by the
Depositor without recourse to the order of the Trustee in
substantially the following form: "Pay to the order of State Street
Bank and Trust Company, as the Trustee for the benefit of the
Holders of KRT Origination Corp. Commercial Mortgage Pass-Through
Certificates, and its successors and assigns, without recourse" and
signed in the name of the Depositor by an authorized officer;
(b) each counterpart of the original Mortgage, with
evidence of the delivery thereof for recording;
(c) each Mortgage Collateral Assignment, duly signed
and, in the case of assignments of the Mortgage and the Assignment
of Leases, in form suitable for recording in the applicable
jurisdictions, with evidence of the delivery thereof for recording;
(d) all Required Insurance Policies together with proof
of payment of premiums relating thereto (which may be in the form
of copies of such policies or certificates of insurance showing
such policies to be in effect on the Closing Date);
(e) the original Title Insurance Policies, or in the
event such original Title Insurance Policies are certified by the
Depositor as unavailable, copies of the marked-up original title
reports and the Depositor's recording instructions, with the
originals to be delivered by the Depositor as soon as available but
in no event later than 90 days after the Closing Date;
(f) an original of the Cash Collateral Agreement and
assignments thereof from the Depositor to the Trustee or the
Mortgage Custodian;
(g) an original of the Assignment of Leases, in form
suitable for recording or filing in the applicable jurisdictions,
and assignments thereof, in form suitable for recording or filing
in the applicable jurisdictions, from the Depositor to the Trustee
or the Mortgage Custodian, with evidence of the delivery thereof
for recording; and
(h) copies of the UCC-1 financing statements covering
the Mortgage Collateral Security, showing the Borrowers as debtors,
the Depositor as secured party and the Trustee as the assignee and
each with evidence of filing thereon; provided that if the
Depositor cannot deliver any such financing statements with
evidence of filing thereon because such financing statements have
not yet been returned by the public filing office where such
financing statements have been submitted for filing, then the
Depositor shall deliver or cause to be delivered a photocopy of
such financing statements (certified by the Depositor to be a true
and complete copy) together with an Officer's Certificate stating
that such financing statements have been dispatched to the
appropriate public filing office for filing.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Trust Agreement. This
Certificate is qualified in all respects by the terms of said Trust
Agreement.
STATE STREET BANK AND
TRUST COMPANY,
as Trustee and Mortgage Custodian
By:
Name:
Title:
EXHIBIT O
FORM OF CERTIFICATE REQUESTING
ON-GOING INFORMATION
State Street Bank and Trust Company,
as Trustee
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Corporate Trust
Re: KRT Origination Corp. Commercial
Mortgage Pass-Through Certificates
Ladies and Gentlemen:
Reference is hereby made to the Trust Agreement dated as of
June 18, 1996 (the "Trust Agreement") among KRT Origination Corp.,
as Depositor, GE Capital Asset Management Corporation, as Servicer,
and State Street Bank and Trust Company, as Trustee. Capitalized
terms used but not defined herein shall have the meaning given to
them in the Trust Agreement.
The undersigned hereby requests, pursuant to the Trust
Agreement, that copies of the materials described in Section 14(b),
(c) and (d) of the Mortgage be delivered to the undersigned at
[address].
The undersigned hereby confirms that (i) it is either (a) a
Holder or a beneficial owner of Certificates or (b) is considering
an investment in the Certificates and (ii) is requesting such
information solely for the purpose of evaluating its investment in
the Certificates.
The undersigned hereby agrees that it shall, and shall cause
its directors, officers and employees, agents, attorneys,
accountants, financial advisors and other representatives, to keep
all materials obtained as a result of this request confidential and
to use reasonable efforts, if such material is not marked
"Proprietary" or "Confidential" and to use special efforts, if such
material is so marked, not, without the prior written consent of
the Depositor and the Borrowers, to disclose any information
contained in such materials in any manner whatsoever, in whole or
in part; provided, however, that the undersigned and or our
representatives shall be permitted to disclose any such information
if required by law or any such information that is or becomes
generally available to the public. The undersigned hereby
acknowledges that a monetary remedy would not be adequate to
compensate the Depositor and the Borrower for any violation of the
agreement contained in the preceding sentence, and that the
Depositor and the Borrowers shall, in addition to any other
remedies available to them at law or in equity, be entitled to
injunctive relief in connection with any such violation.
We understand that this certificate is required in connection
with certain securities laws of the United States. In connection
therewith, if administrative or legal proceedings are commenced or
threatened in connection with this certificate is or would be
relevant, we irrevocably authorize you to produce this certificate
to any interested party in such proceeding. This certificate and the
statements contained herein are made for your benefit and the benefit
of the Depositor, the Borrower and the Placement Agents.
[Name of Holder or beneficial owner
of
Certificates or of Prospective
Investor in Certificates]
By:------------------------------
Name:
Title:
Dated: ----------------
EXHIBIT P
FORM OF ERISA TRANSFER AFFIDAVIT
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being duly sworn, deposes and says as
follows:
1. The undersigned is the ------------------------ of
---------------- (the "Investor"), a [corporation] duly organized
and validly existing under the laws of the State of
----------------, on behalf of which s/he makes this affidavit.
2. The Investor either (i) is acquiring only Class A
Certificates or (ii) if it is acquiring Class B, Class C or Class
D Certificates it (x) is not a Benefit Plan Investor subject to the
Employee Retirement Income Security Act of 1974, as amended
("ERISA") or Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code"), or any federal, state or local law which is,
to a material extent, similar to the provisions of ERISA or Section
4975 of the Code. For purposes of this paragraph, the term
"Benefit Plan Investor" means (A) any employee benefit plan (as
defined in Section 3(3) of ERISA), whether or not it is subject to
Title I of ERISA, (B) any plan described in Section 4975(e)(1) of
the Code, (C) any governmental plan, as defined in Section 3(32) of
ERISA, subject to any federal, state or local law which is, to a
material extent, similar to the provisions of ERISA or Section 4975
of the Code or (D) any entity whose underlying assets include plan
assets by reason of a plan's investment in the entity (within the
meaning of Department of Labor Regulation 29 C.F.R. 2510.3-101).
3. The Investor hereby acknowledges that under the terms of
the Trust and Servicing Agreement, dated as of June 18, 1996, among
KRT Origination Corp., as Depositor, GE Capital Asset Management
Corporation, as Servicer, and State Street Bank and Trust Company,
as Trustee, no transfer of the Class B, Class C and Class D
Certificates shall be permitted to be made to any person unless the
Depositor and the Trustee have received (i) an affidavit from such
transferee to the effect that such transferee is not a Benefit Plan
Investor subject to ERISA or Section 4975 of the Code or (ii) if
such transferee is a Benefit Plan Investor subject to ERISA or
Section 4975 of the Code, an opinion of counsel to the effect that
the purchase and holding of such Certificate by the transferee will
not cause the assets of the Trust to be regarded as assets of a
Benefit Plan Investor; constitute or result in a prohibited
transaction within the meaning of Section 406 or 407 of ERISA or
Section 4975 of the Code; or give rise to a fiduciary duty on the
part of the Depositor, the Servicer or the Trustee.
IN WITNESS WHEREOF, the Investor has caused this instrument to
be executed on its behalf, pursuant to proper authority, by its
duly authorized officer, duly attested, this -------- day of
-------------, ----.
-----------------------------
By:--------------------------
Name:
Title:
ATTEST:
-------------------------
STATE OF )
) ss.:
COUNTY OF )
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
Investor, and acknowledged that he executed the same as his/her
free act and deed and the free act and deed of the Investor.
Subscribed and sworn before me this ----- day of
---------------, ----.
------------------------
NOTARY PUBLIC
My commission expires the
----
day of ------------, 19---.
EXHIBIT R
FORM OF ERISA LEGEND
THIS CERTIFICATE OR ANY INTEREST HEREIN SHOULD NOT BE
PURCHASED BY A TRANSFEREE THAT IS (A) AN EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT, INCLUDING AN INDIVIDUAL AN INDIVIDUAL
RETIREMENT ACCOUNT OR A XXXXX PLAN, WHICH IS SUBJECT TO THE
FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A
GOVERNMENT PLAN SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH IS
TO A MATERIAL EXTENT SIMILAR TO THE FOREGOING PROVISIONS OF ERISA
OR THE CODE (A "SIMILAR LAW") (EACH A "PLAN"), OR (B) AN INSURANCE
COMPANY USING ASSETS OF ANY INSURANCE COMPANY SEPARATE ACCOUNT OR
GENERAL ACCOUNT IN WHICH ASSETS OF SUCH PLAN ARE INVESTED (OR WHICH
ARE DEEMED PURSUANT TO ERISA OR ANY SIMILAR LAW TO INCLUDE ASSETS
OF SUCH PLANS) OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR
USING THE ASSETS OF ANY SUCH PLAN. EACH PROSPECTIVE TRANSFEREE OF
THIS CERTIFICATE WILL BE REQUIRED TO DELIVER TO THE DEPOSITOR, THE
CERTIFICATE REGISTRAR AND THE TRUSTEE, (I) A TRANSFER OR
REPRESENTATION LETTER, SUBSTANTIALLY IN THE FORM OF EXHIBIT Q TO
THE TRUST AND SERVICING AGREEMENT REFERRED TO HEREIN, STATING THAT
SUCH PROSPECTIVE TRANSFEREE IS NOT A PERSON REFERRED TO IN CLAUSE
(A) OR (B) ABOVE, OR (II) AN OPINION OF COUNSEL WHICH ESTABLISHES
TO THE SATISFACTION OF THE DEPOSITOR, THE SERVICER, THE TRUSTEE AND
THE CERTIFICATE REGISTRAR THAT THE PURCHASE OR HOLDING OF THIS
CERTIFICATE WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND BEING
DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS OF ERISA OR THE PROHIBITED TRANSACTION
PROVISIONS OF THE CODE, WILL NOT CONSTITUTE OR RESULT IN A
PROHIBITED TRANSACTION WITHIN THE MEANING OF SECTION 406 OR SECTION
407 OF ERISA OR SECTION 4975 OF THE CODE, AND WILL NOT SUBJECT THE
DEPOSITOR, THE SERVICER, THE TRUSTEE OR THE CERTIFICATE REGISTRAR
TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR
LIABILITIES UNDER ERISA OR SECTION 4975 OF THE CODE), WHICH OPINION
OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUST FUND, THE SERVICER,
THE TRUSTEE, THE CERTIFICATE REGISTRAR OR THE DEPOSITOR.
EXHIBIT R
FORM OF OWNERSHIP EVIDENCE
State Street Bank and Trust Company,
Trustee and Certificate Registrar
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Corporate Trust Department
Re: [Name of Security]
Ladies and Gentlemen:
In consideration for your recognizing the undersigned as the
owner of the securities identified below for the purpose of
enabling the undersigned to exercise rights of a Certificateholder
pursuant to the Trust and Servicing Agreement, dated as of June 18,
1996, among KRT Origination Corp., as Depositor, GE Capital Asset
Management Corporation, as Servicer, and State Street Bank and
Trust Company, as Trustee, the undersigned hereby certifies that it
is the owner ("Owner") of the securities identified below and that
such securities are held by it through its securities account with
the Depository Trust Company ("DTC") Participant/Indirect
Participant identified below. The undersigned further agrees to
notify you in writing of any change in the information provided
herein.
Original Name of Participant
Class Face Amount Nominee Name or Indirect Participant
----- ----------- ------------- -----------------------
Very truly yours,
----------------------------, as Owner
Name:
Title:
Form of Indirect Participant Acknowledgement
The undersigned hereby acknowledges and confirms that it
maintains a securities account for the person identified above as
Owner showing such Owner as being entitled to the securities
identified above. Such securities are held by the undersigned for
such Owner at DTC through the facilities of the Participant
executing the Form of Participant Acknowledgement set forth below.
---------------------------, as indirect participant
By:-----------------------------------
Name:
Title:
Form of Participant Acknowledgement
The undersigned hereby acknowledges and confirms that (check
one)
---- it maintains a securities account for the person
identified above as Owner showing such Owner as being entitled to
the securities identified above.
---- it maintains a securities account for the indirect
participant identified above and shows securities of the series,
class and face amount set forth above as being in such account.
Such securities are held through the book-entry facilities of
the Depository Trust Company.
---------------------------, as DTC participant
By:----------------------------------------
Name:
Title:
Schedule 1
Mortgage Loan Schedule
Original Mortgage Default
Principal Balance Rate Rate
----------------- ------- -------
A Note $123,700,000 7.80% 10.80%
B Note $ 20,600,000 8.02% 11.02%
C Note $ 28,900,000 8.32% 11.32%
D Note $ 8,500,000 8.96% 11.96%
