EXECUTION COPY

                         PNC MORTGAGE ACCEPTANCE CORP.,
                                    DEPOSITOR


                          MIDLAND LOAN SERVICES, INC.,
                                 MASTER SERVICER


                      GMAC COMMERCIAL MORTGAGE CORPORATION,
                                SPECIAL SERVICER

                       LASALLE BANK NATIONAL ASSOCIATION,
                                     TRUSTEE

                                       and

                               ABN AMRO BANK N.V.,
                                  FISCAL AGENT





                         POOLING AND SERVICING AGREEMENT

                            Dated as of June 1, 2000




                  Commercial Mortgage Pass-Through Certificates

                                 Series 2000-C1


<PAGE>


                                TABLE OF CONTENTS


                                                                            PAGE
                                                                            ----


                                   ARTICLE I.

                                   DEFINITION


Section 1.1.      Defined Terms..............................................5

Section 1.2.      Certain Calculations......................................48

Section 1.3.      Certain Constructions.....................................48


                                 ARTICLE II.

       CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES


Section 2.1.      Conveyance and Assignment of Mortgage Loans...............49

Section 2.2.      Acceptance by the Custodian and the Trustee...............54

Section 2.3.      Seller's Repurchase of Mortgage Loans for Document
                  Defaults and Breaches of Representations and Warranties...55

Section 2.4.      Representations and Warranties of the Depositor...........58

Section 2.5.      Representations, Warranties and Covenants of the
                  Master Servicer and the Special Servicer..................60

Section 2.6.      Execution and Delivery of Certificates; Issuance of
                  REMIC I Regular Interests and REMIC II Regular
                  Interests.................................................62

Section 2.7.      Documents Not Delivered to Custodian......................63


                                  ARTICLE III.

               ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS


Section 3.1.      Master Servicer to Act as Master Servicer; Special
                  Servicer to Act as Special Servicer; Administration of
                  the Mortgage Loans........................................63

Section 3.2.      Sub-Servicing.............................................65

Section 3.3.      Collection of Certain Mortgage Loan Payments..............67

Section 3.4.      Collection of Taxes, Assessments and Similar Items........67

Section 3.5.      Collection Account, Distribution Account, Grantor
                  Trust Collection Account, Grantor Trust Distribution
                  Account and Excess Liquidation Proceeds Account...........68


                                       i
<PAGE>



Section 3.6.      Permitted Withdrawals from the Collection Account and
                  Grantor Trust Collection Account..........................70

Section 3.7.      Investment of Funds in Accounts...........................72

Section 3.8.      Maintenance of Insurance Policies and Errors and
                  Omissions and Fidelity Coverage...........................74

Section 3.9.      Enforcement of Due-On-Sale Clauses; Assumption
                  Agreements................................................77

Section 3.10.     Realization Upon Mortgage Loans...........................79

Section 3.11.     Trustee to Cooperate; Release of Mortgage Files...........81

Section 3.12.     Servicing Compensation....................................82

Section 3.13.     Reports to the Trustee; Collection Account Statements.....84

Section 3.14.     Annual Statement as to Compliance.........................85

Section 3.15.     Annual Independent Public Accountants' Servicing Report...85

Section 3.16.     Access to Certain Documentation...........................86

Section 3.17.     Title and Management of REO Properties....................86

Section 3.18.     Sale of Specially Serviced Mortgage Loans and REO
                  Properties................................................89

Section 3.19.     Inspections...............................................91

Section 3.20.     Available Information and Notices.........................92

Section 3.21.     Reserve Accounts; Letters of Credit.......................94

Section 3.22.     Servicing Advances........................................94

Section 3.23.     Appraisal Reductions......................................96

Section 3.24.     Transfer of Servicing Between Master Servicer and
                  Special Servicer; Record Keeping..........................97

Section 3.25.     Adjustment of Servicing Compensation in Respect of
                  Prepayment Interest Shortfalls............................98

Section 3.26.     Operating Adviser; Elections..............................99

Section 3.27.     Appointment of Special Servicer; Duties of Operating
                  Adviser..................................................100

Section 3.28.     Modifications, Waivers, Amendments, Extensions and
                  Consents, Defeasance.....................................102

Section 3.29.     Interest Reserve Account.................................106


                                   ARTICLE IV.

                       DISTRIBUTIONS TO CERTIFICATEHOLDERS


Section 4.1.      Distributions of REMIC I.................................106

Section 4.2.      Distributions of REMIC II................................107


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<PAGE>



Section 4.3.      Distributions of REMIC III...............................112

Section 4.4.      Statements to Rating Agencies and Certificateholders;
                  Available Information....................................117

Section 4.5.      Remittances; P&I Advances................................121

Section 4.6.      Allocation of Realized Losses and Expense Losses.........122

Section 4.7.      Distributions on the Grantor Trust.......................123

Section 4.8.      Distributions in General.................................123

Section 4.9.      Compliance with Withholding Requirements.................124


                                   ARTICLE V.

                                THE CERTIFICATES


Section 5.1.      The Certificates.........................................125

Section 5.2.      Registration, Transfer and Exchange of Certificates......126

Section 5.3.      Book-Entry Certificates..................................131

Section 5.4.      Mutilated, Destroyed, Lost or Stolen Certificates........133

Section 5.5.      Appointment of Paying Agent..............................134

Section 5.6.      Access to Certificateholders' Names and Addresses........134

Section 5.7.      Actions of Certificateholders............................134

Section 5.8.      Persons Deemed Owners....................................135

Section 5.9.      Certification by Certificate Owners......................135


                                   ARTICLE VI.

           THE DEPOSITOR, THE MASTER SERVICER AND THE SPECIAL SERVICER


Section 6.1.      Liability of the Depositor, the Master Servicer and
                  the Special Servicer.....................................136

Section 6.2.      Merger or Consolidation of the Master Servicer and
                  Special Servicer.........................................136

Section 6.3.      Limitation on Liability of the Depositor, the Master
                  Servicer and Others......................................136

Section 6.4.      Resignation of Master Servicer or Special Servicer.......137

Section 6.5.      Assignment or Delegation of Duties by Master Servicer
                  or the Special Servicer..................................138

Section 6.6.      Rights of the Depositor, the Rating Agencies and the
                  Trustee in Respect of the Master Servicer and the
                  Special Servicer.........................................138



                                      iii
<PAGE>


                                  ARTICLE VII.

                                     DEFAULT


Section 7.1.      Events of Default........................................139

Section 7.2.      Trustee to Act; Appointment of Successor.................141

Section 7.3.      Notification to Certificateholders.......................143

Section 7.4.      Other Remedies of Trustee................................143

Section 7.5.      Waiver of Past Events of Default; Termination............143


                                ARTICLE VIII.

                             CONCERNING THE TRUSTEE


Section 8.1.      Duties of Trustee........................................144

Section 8.2.      Certain Matters Affecting the Trustee....................145

Section 8.3.      Trustee Not Liable for Certificates or Mortgage Loans....147

Section 8.4.      Trustee May Own Certificates.............................148

Section 8.5.      Payment of Trustee Fees and Expenses; Indemnification....148

Section 8.6.      Eligibility Requirements for Trustee.....................150

Section 8.7.      Resignation and Removal of the Trustee...................150

Section 8.8.      Successor Trustee........................................151

Section 8.9.      Merger or Consolidation of Trustee.......................152

Section 8.10.     Appointment of Co-Trustee or Separate Trustee............152

Section 8.11.     Authenticating Agent.....................................154

Section 8.12.     Appointment of Custodians................................154

Section 8.13.     Fiscal Agent Appointed; Concerning the Fiscal Agent......155

Section 8.14.     Representations and Warranties of the Trustee and
                  Fiscal Agent.............................................156


                                   ARTICLE IX.

                                   TERMINATION


Section 9.1.      Termination of Trust Fund................................158

Section 9.2.      Procedure Upon Termination of Trust Fund.................160

Section 9.3.      Additional Trust Fund Termination Requirements...........160



                                       iv
<PAGE>




                                   ARTICLE X.

                       REMIC ADMINISTRATION; GRANTOR TRUST


Section 10.1.     REMIC Election...........................................161

Section 10.2.     REMIC Compliance.........................................162

Section 10.3.     Imposition of Tax on the Trust Fund......................163

Section 10.4.     Prohibited Transactions and Activities...................164

Section 10.5.     Grantor Trust Provisions.................................165


                                   ARTICLE XI.

                            MISCELLANEOUS PROVISIONS


Section 11.1.     Counterparts.............................................165

Section 11.2.     Limitation on Rights of Certificateholders...............165

Section 11.3.     Governing Law............................................166

Section 11.4.     Notices..................................................166

Section 11.5.     Severability of Provisions...............................168

Section 11.6.     Notice to the Depositor, the Operating Adviser and
                  Each Rating Agency.......................................169

Section 11.7.     Amendment................................................169

Section 11.8.     Confirmation of Intent...................................172


                                    EXHIBITS


Exhibit  A-1   Form of Class A-1 Certificate
Exhibit  A-2   Form of Class A-2 Certificate
Exhibit  A-3   Form of Class X Certificate
Exhibit  A-4   Form of Class B Certificate
Exhibit  A-5   Form of Class C Certificate
Exhibit  A-6   Form of Class D Certificate
Exhibit  A-7   Form of Class E Certificate
Exhibit  A-8   Form of Class F Certificate
Exhibit  A-9   Form of Class G Certificate
Exhibit  A-10  Form of Class H Certificate
Exhibit  A-11  Form of Class J Certificate
Exhibit  A-12  Form of Class K Certificate
Exhibit  A-13  Form of Class L Certificate
Exhibit  A-14  Form of Class M Certificate
Exhibit  A-15  Form of Class N Certificate

                                       v
<PAGE>


Exhibit  A-16  Form of Class O Certificate
Exhibit  A-17  Form of Class V Certificate
Exhibit  A-18  Form of Class R-I Certificate
Exhibit  A-19  Form of Class R-II Certificate
Exhibit  A-20  Form of Class R-III Certificate
Exhibit  B-1   Mortgage Loan Schedule
Exhibit  B-2   Form of Initial Custodian Certification
Exhibit  B-3   Form of Final Custodian Certification
Exhibit  C-1   Form of Transferee Affidavit
Exhibit  C-2   Form of Transferor Letter
Exhibit  D-1   Form of Investment Representation Letter
Exhibit  D-2   Form of ERISA Representation Letter
Exhibit  E     Form of Request for Release
Exhibit  F     Form of Custodial Agreement
Exhibit  G     [Intentionally  Omitted]
Exhibit  H     Form of Monthly Distribution Statement
Exhibit  I     Form of Certificate Owner Certification



                                       vi
<PAGE>


     Pooling  and  Servicing  Agreement,  dated  as of June 1,  2000  among  PNC
Mortgage Acceptance Corp., as Depositor,  Midland Loan Services, Inc., as Master
Servicer,  GMAC Commercial Mortgage  Corporation,  as Special Servicer,  LaSalle
Bank National Association, as Trustee, and ABN AMRO Bank N.V., as Fiscal Agent.


                             PRELIMINARY STATEMENT:

     Terms used but not  defined in this  Preliminary  Statement  shall have the
meanings specified in Article I.

     The  Depositor  intends  to sell  pass-through  certificates  to be  issued
hereunder in multiple  classes,  which in the aggregate will evidence the entire
beneficial  ownership  interest in the Trust Fund  consisting  primarily  of the
Mortgage  Loans. On the Closing Date, the Depositor will acquire (i) the REMIC I
Regular  Interests  and the  Class R-I  Certificates  as  consideration  for its
transfer  to the  Trust  Fund  of the  Mortgage  Loans  and the  other  property
constituting  the Trust Fund  (excluding  Deferred  Interest,  the Grantor Trust
Collection Account and the Grantor Trust Distribution  Account) described in the
definition of "REMIC I"; (ii) the REMIC II Regular  Interests and the Class R-II
Certificates as consideration  for its transfer of the REMIC I Regular Interests
to the Trust Fund;  (iii) the REMIC III  Certificates as  consideration  for its
transfer of the REMIC II Regular Interests to the Trust Fund; and (iv) the Class
V Certificates as consideration for its transfer of the Deferred Interest to the
Trust Fund. The Depositor has duly authorized the execution and delivery of this
Agreement to provide for (i) the  foregoing  and the issuance of (a) the REMIC I
Regular  Interests and the Class R-I Certificates  representing in the aggregate
the entire  beneficial  ownership of REMIC I, (b) the REMIC II Regular Interests
and the  Class  R-II  Certificates  representing  in the  aggregate  the  entire
beneficial ownership of REMIC II and (c) the REMIC III Certificates representing
in the  aggregate  the entire  beneficial  ownership  of REMIC III, and (ii) the
creation of the Grantor Trust and the issuance of the Class V Certificates.


                                     REMIC I

     As provided herein, the Trustee will make the election described in Section
10.1 hereof for the segregated  pool of assets  consisting of the Mortgage Loans
and certain  related  assets  (excluding  Deferred  Interest,  the Grantor Trust
Collection Account and the Grantor Trust Distribution Account) to be treated for
federal  income tax  purposes as a real estate  mortgage  investment  conduit (a
"REMIC" and, such particular  segregated pool of assets, "REMIC I"). The REMIC I
Regular  Interests will be designated as the "regular  interests" in REMIC I and
the Class R-I  Certificates  will be  designated  as the sole class of "residual
interests" in REMIC I.

     A  separate  uncertificated  REMIC I Regular  Interest  will be issued with
respect to each Mortgage Loan. Each REMIC I Regular  Interest will represent the
right to receive principal corresponding to the initial Stated Principal Balance
of a related  Mortgage Loan and interest thereon at a remittance rate calculated
as described in the  definition  of "REMIC I Remittance  Rate".  For purposes of
Treasury Regulation Section  1.860G-1(a)(4)(iii),  the "latest possible maturity
date" for each REMIC I Regular  Interest  shall be the Rated Final  Distribution
Date.  The  Class  R-I  Certificates  will  have no  principal  balances  and no
remittance rate, but will be


                                       1
<PAGE>


entitled to receive on each Distribution Date any portion of the Available Funds
for such  Distribution  Date not  otherwise  deemed  distributed  on the REMIC I
Regular Interests.


                                    REMIC II

      As  provided  herein,  the Trustee  will make the  election  described  in
Section 10.1 hereof for the segregated pool of assets  consisting of the REMIC I
Regular  Interests  to be treated for federal  income tax purposes as a separate
REMIC  (such  particular  pool of  assets,  "REMIC  II").  The REMIC II  Regular
Interests will be designated as representing the "regular interests" in REMIC II
and the Class R-II  Certificates  will be  designated as  representing  the sole
class of "residual interests" in REMIC II for purposes of the REMIC Provisions.

      Fifteen separate uncertificated classes of REMIC II Regular Interests will
be issued  and are  designated  as the  "regular  interests"  in REMIC  II.  The
following   table   irrevocably   sets  forth  the   designation   and   initial
Uncertificated Principal Balance for each REMIC II Regular Interest.


                           REMIC II Regular Interests

            --------------------------------------------------------
                                          Initial Uncertificated
                    Designation              Principal Balance
            --------------------------------------------------------
               Class A-1-II Interest          $152,026,000
            --------------------------------------------------------
               Class A-2-II Interest           460,741,000
            --------------------------------------------------------
                Class B-II Interest             34,046,000
            --------------------------------------------------------
                Class C-II Interest             34,047,000
            --------------------------------------------------------
                Class D-II Interest             10,014,000
            --------------------------------------------------------
                Class E-II Interest             26,036,000
            --------------------------------------------------------
                Class F-II Interest             12,016,000
            --------------------------------------------------------
                Class G-II Interest             12,017,000
            --------------------------------------------------------
                Class H-II Interest             18,024,000
            --------------------------------------------------------
                Class J-II Interest              8,011,000
            --------------------------------------------------------
                Class K-II Interest              7,010,000
            --------------------------------------------------------
                Class L-II Interest              8,011,000
            --------------------------------------------------------
                Class M-II Interest              7,010,000
            --------------------------------------------------------
                Class N-II Interest              4,005,000
            --------------------------------------------------------
                Class O-II Interest              8,010,722
            --------------------------------------------------------

                                       2
<PAGE>


      For  purposes  of Treasury  Regulation  Section  1.860G-1(a)(4)(iii),  the
"latest  possible  maturity date" of each REMIC II Regular Interest shall be the
Rated Final Distribution Date. The Class R-II Certificate will have no scheduled
principal  balance and no pass-through  rate, but will be entitled to receive on
each  Distribution Date any portion of the Available Funds for REMIC II for such
Distribution  Date not  otherwise  deemed  distributed  on the REMIC II  Regular
Interests.


                                    REMIC III

      As  provided  herein,  the Trustee  will make the  election  described  in
Section 10.1 for the segregated pool of assets hereof consisting of the REMIC II
Regular  Interests  to be treated for federal  income tax purposes as a separate
REMIC  (such  particular  pool of assets,  "REMIC  III").  The REMIC III Regular
Certificates will be designated as representing the "regular interests" in REMIC
III and the Class R-III Certificates will be designated as representing the sole
class of "residual interests" in REMIC III for purposes of the REMIC Provisions.

      Sixteen separate Classes of REMIC III Regular Certificates will be issued.
The  following  table  irrevocably  sets  forth  the  designation,  the  initial
pass-through  rate and the initial  aggregate  certificate  principal balance or
notional amount for each Class of REMIC III Regular Certificates.


                                       3
<PAGE>



                         REMIC III Regular Certificates


                                                         Initial Aggregate
       Designation           Initial Pass-Through      Certificate Balance or
                                   Rate(1)                Notional Amount

        Class A-1                   7.520%                 $152,026,000
        Class A-2                   7.610                   460,741,000
         Class X                    0.477                   801,024,722 (2)
         Class B                    7.740                    34,046,000
         Class C                    7.740                    34,047,000
         Class D                    7.740                    10,014,000
         Class E                    7.740                    26,036,000
         Class F                    7.740                    12,017,000
         Class G                    6.625                    12,016,000
         Class H                    6.625                    18,024,000
         Class J                    6.625                     8,011,000
         Class K                    6.625                     7,010,000
         Class L                    6.625                     8,011,000
         Class M                    6.625                     7,010,000
         Class N                    6.625                     4,005,000
         Class O                    6.625                     8,010,722


          (1)  On  each Distribution Date after the initial  Distribution  Date,
the Pass-Through Rate for each Class of REMIC III Regular  Certificates  will be
determined as described herein under the definition of "Pass-Through Rate."

          (2)  Notional Amount.

      For  purposes  of Treasury  Regulation  Section  1.860G-1(a)(4)(iii),  the
"latest possible maturity date" of each Class of REMIC III Regular  Certificates
shall be the Rated Final  Distribution  Date. The Class R-III  Certificates will
have no principal  balances and no  pass-through  rate,  but will be entitled to
receive on each  Distribution  Date any portion of the Available Funds for REMIC
III for such Distribution Date not otherwise deemed distributed on the REMIC III
Regular Certificates.

      The Certificate  Balance of any Class of  Certificates  outstanding at any
time represents the maximum amount which holders thereof are entitled to receive
as distributions allocable to principal from the cash flow on the Mortgage Loans
and the other assets in the Trust Fund.

      As of the  Cut-off  Date,  the  Mortgage  Loans have an  aggregate  Stated
Principal Balance equal to approximately $801,024,722.



                                       4
<PAGE>



                                  GRANTOR TRUST

      The  parties  intend  that  the  Deferred  Interest,   the  Grantor  Trust
Collection Account and the Grantor Trust Distribution Account will be treated as
a  grantor  trust  under  Subpart E of Part 1 of  Subchapter  J of the Code (the
"Grantor  Trust"),  and  that  the  Class  V  Certificates  represent  undivided
beneficial interests in specified portions of the Deferred Interest, the Grantor
Trust Collection Account and the Grantor Trust Distribution  Account. The assets
of the Grantor Trust are excluded from the REMICs.

      In consideration of the mutual agreements herein contained, the Depositor,
the Master  Servicer,  the Special  Servicer,  the Trustee and the Fiscal  Agent
agree as follows:


                                   ARTICLE I.
                                   ----------

                                   DEFINITION

          Section 1.1.      Defined Terms.
                            -------------

     Whenever used in this Agreement,  the following  words and phrases,  unless
the  context  otherwise  requires,  shall have the  meanings  specified  in this
Article.

     "1933 Act":  The  Securities Act of 1933, as it may be amended from time to
time.

     "1934 Act": The Securities  Exchange Act of 1934, as it may be amended from
time to time.

     "Accrued  Certificate  Interest":  With  respect  to any Class of REMIC III
Regular  Certificates (other than the Class X Certificates) for any Distribution
Date, the amount of interest for the applicable  Interest Accrual Period accrued
at the applicable Pass-Through Rate on the aggregate Certificate Balance of such
Class of Certificates as of the close of business on the preceding  Distribution
Date (or, in the case of the first  Distribution  Date, as of the Closing Date).
Accrued  Certificate  Interest on the Class X Certificates for each Distribution
Date will equal the Class X Interest Amount. The Accrued Certificate Interest in
respect of each Class of REMIC III Regular  Certificates  for each  Distribution
Date shall accrue on the basis of a 360-day  year  consisting  of twelve  30-day
months.

     "Actual/360  Basis": The accrual of interest calculated on the basis of the
actual  number of days elapsed  during any  calendar  month in a year assumed to
consist of 360 days.

     "Additional  Trust Fund Expense":  Any of the following  items: (a) Special
Servicer Fees,  Disposition  Fees and Workout Fees; (b) Advance Interest Amounts
not paid out of Default  Interest or late  payment  charges as and to the extent
provided herein;  (c) amounts paid by the Trust Fund to indemnify the Depositor,
the Master Servicer,  the Special Servicer, the Trustee, the Fiscal Agent or any
other  Person  pursuant  to the terms of this  Agreement;  (d) to the extent not
covered  by  indemnification  by one of the  parties  hereto or paid by a source
other than the Trust Fund,  any  federal,  state or local  taxes  imposed on the
Trust Fund or any of its assets or transactions; (e) the cost of all Opinions of
Counsel  required or permitted  hereunder to be obtained in connection  with the
servicing of the Mortgage Loans and the administration of the


                                       5
<PAGE>


Trust Fund and not  otherwise  required  hereunder  to be paid by a source other
than the Trust Fund or Advanced as a  Servicing  Advance;  and (f) to the extent
not  included  in  the  calculation  of a  Realized  Loss  and  not  covered  by
indemnification   by  one  of  the  parties  hereto  or  otherwise,   any  other
unanticipated cost, liability, or expense of the Trust Fund which the Trust Fund
has not recovered,  and in the judgment of the Master  Servicer (or, in the case
of a Specially  Serviced  Mortgage Loan, the Special Servicer) will not recover,
from the related Borrower or Mortgaged Property or otherwise.

      "Adjusted REMIC II Remittance  Rate": With respect to each of the REMIC II
Regular  Interests,  for any  Distribution  Date,  a rate per annum equal to the
lesser of (i) the related REMIC II Remittance  Rate for such  Distribution  Date
and (ii) the related "Fixed Cap Rate" specified below:

         REMIC II Regular Interest      Fixed Cap Rate

         Class A-1-II Interests         7.520% per annum
         Class A-2-II Interests         7.610% per annum
         Class B-II Interests           7.740% per annum
         Class C-II Interests           7.740% per annum
         Class D-II Interests           7.740% per annum
         Class E-II Interests           7.740% per annum
         Class F-II Interests           7.740% per annum
         Class G-II Interests           6.625% per annum
         Class H-II Interests           6.625% per annum
         Class J-II Interests           6.625% per annum
         Class K-II Interests           6.625% per annum
         Class L-II Interests           6.625% per annum
         Class M-II Interests           6.625% per annum
         Class N-II Interests           6.625% per annum
         Class O-II Interests           6.625% per annum


      "Advance":  Any P&I Advance or Servicing Advance.

      "Advance Interest Amount": The sum, for all Mortgage Loans as to which any
Advance remains unreimbursed, of all interest at the related Advance Rate on the
amount of each and every P&I Advance and Servicing  Advance for which the Master
Servicer,  the Special Servicer, the Trustee or the Fiscal Agent, as applicable,
has not been paid or  reimbursed  for the  number of days from the date on which
each such  Advance was made or, if  interest  has been  previously  paid on such
Advance,  from the date on which  interest  was last paid,  through  the date of
payment or  reimbursement  of the  related  Advance  (which in no event shall be
later  than  the  Determination  Date  following  the date on  which  funds  are
available to reimburse such Advance with interest  thereon at the Advance Rate);
provided, however, that neither the Master Servicer nor any other party shall be
entitled to interest  accrued on the amount of any P&I Advance  with  respect to
any Mortgage Loan, (1) for the period commencing on the date of such P&I Advance
and  ending on the day on which  the  grace  period  applicable  to the  related
Borrower's  obligation to make the related Monthly  Payment expires  pursuant to
the related  Mortgage  Loan  Documents,  (2) if the related  Monthly  Payment is
received by the Master Servicer on or prior to the Remittance  Date  immediately
following the Due Date for such Monthly Payment or (3) for any


                                       6
<PAGE>


period during which the related  Monthly Payment has been received by the Master
Servicer but is being held by the Master Servicer in suspense.

      "Advance  Rate": A per annum rate equal to the Prime Rate (as published in
The Wall Street Journal,  or, if The Wall Street Journal is no longer published,
such other  publication  determined by the Trustee (with the  concurrence of the
Master Servicer) in its reasonable discretion from time to time).

      "Adverse Grantor Trust Event":  Either (i) any impairment of the status of
the Grantor  Trust as a grantor  trust or (ii) the  imposition of a tax upon the
Grantor Trust or any of its assets or transactions.

      "Adverse REMIC Event":  As defined in Section 10.2(d).

      "Affiliate":  With  respect  to any  specified  Person,  any other  Person
controlling or controlled by or under common control with such specified Person.
For the  purposes of this  definition,  "control"  when used with respect to any
specified  Person means the power to direct the  management and policies of such
Person,  directly  or  indirectly,  whether  through  the  ownership  of  voting
securities,   by  contract  or  otherwise,   and  the  terms  "controlling"  and
"controlled" have meanings correlative to the foregoing.  The Trustee may obtain
and  rely on an  Officer's  Certificate  of the  Master  Servicer,  the  Special
Servicer or the  Depositor  to  determine  whether any Person is an Affiliate of
such party.

      "Agreement":  This Pooling and Servicing  Agreement  and all  amendments
hereof and supplements hereto.

      "Applicable Monthly Payment":  As defined in Section 4.5(a).

      "Applicant":  As defined in Section 5.6(a).

      "Appraisal  Reduction  Event":  With respect to each  Mortgage  Loan,  the
occurrence of the earliest of the following dates: (i) the third  anniversary of
the date on which an extension of the maturity  date of a Mortgage  Loan becomes
effective as a result of a  modification  of such  Mortgage  Loan by the Special
Servicer,  which extension does not change the amount of Monthly Payments on the
Mortgage Loan, (ii) 90 days after an uncured  delinquency occurs in respect of a
Mortgage  Loan,  (iii) 30 days after a receiver has been  appointed or after the
commencement of an involuntary bankruptcy  proceeding,  (iv) immediately after a
borrower declares bankruptcy,  and (v) immediately after a Mortgage Loan becomes
an REO Mortgage Loan. The Special  Servicer shall notify the Master Servicer and
the Master Servicer shall notify the Special Servicer,  as applicable,  promptly
upon receiving notice of the occurrence of any of the foregoing events.

      "Appraisal  Reduction":  For any Mortgage  Loan as to which any  Appraisal
Reduction  Event has  occurred,  an amount equal to (a) the  outstanding  Stated
Principal  Balance  of such  Mortgage  Loan as of the  last  day of the  related
Collection  Period less (b) the excess, if any, of (i) 90% of the sum of (x) the
appraised  or otherwise  estimated  value of the related  Mortgaged  Property or
Properties as  determined  in  accordance  with Section 3.23 (the costs of which
shall be paid by the Master Servicer as an Advance),  plus (y) the amount of all
reserves and escrows that are pledged as collateral for the Mortgage Loan (other
than those for taxes and insurance), but


                                       7
<PAGE>


only to the extent that such amounts are not taken into  account in  determining
the appraised or otherwise estimated value of the Mortgaged Property,  over (ii)
the sum of (A) to the extent not previously advanced by the Master Servicer, the
Trustee or the Fiscal Agent,  all unpaid  interest on the  principal  balance of
such  Mortgage  Loan at a per annum rate  equal to the  Mortgage  Rate,  (B) all
unreimbursed  Advances  and  interest  thereon at the Advance Rate in respect of
such  Mortgage  Loan,  (C) all  currently  due and unpaid real estate  taxes and
assessments  and  insurance  premiums  and  all  other  amounts,  including,  if
applicable,  ground rents,  due and unpaid under the Mortgage Loan (which taxes,
premiums and other  amounts have not been escrowed or the subject of an Advance)
and (D) unpaid compensation owed to the Special Servicer. An Appraisal Reduction
will be eliminated  (i) upon payment in full or liquidation of any Mortgage Loan
for which an Appraisal  Reduction  has been  determined  or (ii) if the Mortgage
Loan is no longer a Specially Serviced Mortgage Loan.

      "Asset  Summary":  With  respect  to each  Mortgaged  Property,  the asset
summary  report  prepared  by the  applicable  Seller  for  use  in the  initial
placement of the Privately Placed Certificates.

      "Assignment of Leases,  Rents and Profits":  With respect to any Mortgaged
Property,  any  assignment  of leases,  rents and  profits or similar  agreement
executed by the Borrower,  assigning to the  mortgagee all of the income,  rents
and profits derived from the ownership, operation, leasing or disposition of all
or a portion of such  Mortgaged  Property,  in the form which was duly executed,
acknowledged  and delivered by the Borrower,  as amended,  modified,  renewed or
extended through the date hereof and from time to time hereafter.

      "Assignment  of Mortgage":  An assignment  of mortgage  without  recourse,
notice of  transfer or  equivalent  instrument,  in  recordable  form,  which is
sufficient  under the laws of the  jurisdiction  in which the related  Mortgaged
Property is located to reflect of record the sale of the related Mortgage, which
assignment,  notice of transfer or equivalent  instrument  may be in the form of
one  or  more  blanket  assignments  covering  Mortgages  encumbering  Mortgaged
Properties located in the same jurisdiction,  if permitted by law and acceptable
for recording;  provided,  however,  that none of the Trustee, the Fiscal Agent,
the Custodian,  the Special Servicer or the Master Servicer shall be responsible
for  determining  whether any assignment is legally  sufficient or in recordable
form.

      "Assumed Monthly  Payment":  (a) With respect to any Balloon Mortgage Loan
(other than a Balloon Mortgage Loan that has become a REO Mortgage Loan) for its
Maturity Date  (provided  that such Mortgage Loan has not been paid in full, and
no other Liquidation Event has occurred in respect thereof, on or before the end
of the  Collection  Period  in which  such  Maturity  Date  occurs)  and for any
subsequent Due Date therefor as of which such Mortgage Loan remains  outstanding
and part of the Trust  Fund,  if no  Monthly  Payment  (other  than the  related
delinquent  Balloon  Payment) is otherwise due for such Due Date,  the scheduled
monthly payment of principal and/or interest deemed to be due in respect thereof
for  such Due  Date  equal  to the  Monthly  Payment  (other  than  any  related
delinquent Balloon Payment) that would have been due in respect of such Mortgage
Loan on such Due Date if it had been required to continue to accrue  interest in
accordance  with  its  terms,  and to  pay  principal  in  accordance  with  the
amortization  schedule  (if any),  in effect  immediately  prior to, and without
regard to the  occurrence of, its most recent  scheduled  Maturity Date; and (b)
with respect to any REO Mortgage Loan, for any Due Date therefor as of which the
related REO  Property  remains  part of the Trust Fund,  the  scheduled  monthly
payment of principal and/or interest deemed to be due in respect thereof on such
Due


                                       8
<PAGE>


Date equal to the Monthly  Payment (or, in the case of a Balloon  Mortgage  Loan
described in clause (a) of this  definition,  the Assumed Monthly  Payment) that
was due in respect of the subject  Mortgage  Loan for the last Due Date prior to
its becoming an REO Mortgage Loan.

     "Authenticating  Agent": Any authenticating  agent appointed by the Trustee
pursuant to Section 8.11.

     "Available  Funds":  Subject to Section 9.2(b), (x) with respect to REMIC I
and each Distribution Date, (a) the Master Servicer  Remittance Amount, plus (b)
if the  Distribution  Date occurs during March of any year, the Interest Reserve
Amounts in the  Interest  Reserve  Account;  less (c) if the  Distribution  Date
occurs during February of any year or January of any non-leap year, the Interest
Reserve  Amounts for the Interest  Reserve Loans to be deposited in the Interest
Reserve Account;

     (y) with respect to REMIC II and any Distribution  Date, all amounts deemed
distributed  on the REMIC I Regular  Interests  out of the  Available  Funds for
REMIC I for such Distribution Date; and

     (z) with respect to REMIC III and any Distribution Date, all amounts deemed
distributed  on the REMIC II Regular  Interests out of the  Available  Funds for
REMIC II for such Distribution Date.

     "Balloon  Loan":  A Mortgage  Loan which  provides for monthly  payments of
principal  based on an  amortization  schedule  longer than its remaining  term,
thereby leaving  substantial  principal  amounts due and payable on its Maturity
Date.

      "Balloon  Payment":  With  respect to each  Balloon  Loan,  the  scheduled
payment of principal  and interest due on the Maturity Date of such Balloon Loan
which,  pursuant to the related Note, is equal to the entire remaining principal
balance of such Balloon Loan, plus accrued interest thereon.

      "Borrower":  With  respect to each  Mortgage  Loan,  any  obligor on any
related Note.

     "Book-Entry  Certificate":  Any  Certificate  registered in the name of the
Securities Depository or its nominee.

     "Business  Day": Any day other than a Saturday,  a Sunday or a day on which
banking institutions in the States of New York, Illinois,  Missouri,  California
or  Pennsylvania  are  authorized  or  obligated  by  law,  executive  order  or
governmental decree to be closed.

     "Cash  Deposit":  An amount  equal to all cash  payments of  principal  and
interest  received by the applicable Seller in respect of the Mortgage Loans two
or more  Business Days prior to the Closing Date which are due after the Cut-off
Date, which amount is to be deposited in the Collection Account by the Depositor
pursuant to Section 2.1.

     "Certificate":  Any Class A-1,  Class A-2, Class X, Class B, Class C, Class
D, Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class
N, Class O, Class V, Class R-I,  Class R-II or Class R-III  Certificate  issued,
authenticated and delivered hereunder.


                                       9
<PAGE>


     "Certificate Balance":  With respect to: (i) all of the Certificates of any
Class of REMIC III Regular  Certificates  (other than the Class X  Certificates)
(a) on or prior to the first Distribution Date, an amount equal to the aggregate
initial  Certificate  Balance of such Class,  as  specified  in the  Preliminary
Statement  hereto,  and (b) as of any  date of  determination  after  the  first
Distribution Date, the Certificate  Balance of such Class of Certificates on the
Distribution  Date  immediately  prior  to  such  date of  determination,  after
application of the  distributions  of principal made thereon,  and allocation of
the Realized Losses and Expense Losses made thereto,  on such prior Distribution
Date; and (ii) any particular REMIC III Regular  Certificate (other than a Class
X Certificate),  (a) on or prior to the first Distribution Date, an amount equal
to the initial  Certificate  Balance  reflected on the face of such Certificate,
and (b) as of any date of determination  after the first  Distribution Date, the
Certificate  Balance of such  Certificate on the  Distribution  Date immediately
prior to such date of  determination,  after application of the distributions of
principal made thereon, and allocation of the Realized Losses and Expense Losses
made thereto,  on such prior Distribution Date. The Class X Certificates have no
Certificate Balance.

     "Certificate Owner": With respect to a Book-Entry  Certificate,  the Person
who is the beneficial owner of such Certificate as reflected on the books of the
Securities Depository or on the books of a Securities Depository  Participant or
on the books of an indirect participating  brokerage firm for which a Securities
Depository Participant acts as agent.

     "Certificate Register" and "Certificate Registrar": The register maintained
and the registrar appointed pursuant to Section 5.2(a).

     "Certificate Purchase Agreement":  means the Certificate Purchase Agreement
dated June 15, 2000 between  Morgan Stanley & Co.  Incorporated  and PNC Capital
Markets, Inc., as the initial purchasers, the Depositor and Midland.

     "Certificateholder":  With respect to any Certificate,  the Person in whose
name such  Certificate  is registered  in the  Certificate  Register;  provided,
however, that, except to the extent provided in the next proviso, solely for the
purpose of giving any consent or taking any action  pursuant to this  Agreement,
any Certificate  beneficially owned by the Depositor,  the Master Servicer,  the
Special Servicer,  the Trustee, a Manager of a Mortgaged Property, a Borrower or
any Person known to a Responsible Officer of the Certificate  Registrar to be an
Affiliate  of the  Depositor,  the Trustee,  the Master  Servicer or the Special
Servicer shall be deemed not to be outstanding and the Voting Rights to which it
is entitled shall not be taken into account in determining whether the requisite
percentage  of Voting  Rights  necessary  to effect any such consent or take any
such  action has been  obtained;  provided,  however,  that (i) for  purposes of
obtaining  any  consent,  approval,  direction  or waiver of  Certificateholders
pursuant to this Agreement,  any Certificates  beneficially  owned by the Master
Servicer or the Special  Servicer or an Affiliate  thereof shall be deemed to be
outstanding,  provided, that, such consent,  approval,  direction or waiver does
not relate to  compensation  of the Master  Servicer or the Special  Servicer or
benefit the Master Servicer or the Special Servicer (in its capacity as such) or
any Affiliate  thereof (other than solely in its capacity as  Certificateholder)
in any material  respect,  in which case such Certificate shall be deemed not to
be outstanding; (ii) for purposes of obtaining the consent of Certificateholders
to any action  proposed to be taken by the Special  Servicer  with  respect to a
Specially  Serviced  Mortgage Loan, any Certificates  beneficially  owned by the
Master Servicer, the Special Servicer or an Affiliate thereof shall be deemed to
be outstanding  notwithstanding  clause (i) above; and (iii) for any election of
the Operating Adviser or the


                                       10
<PAGE>


appointment or removal of a Special Servicer  pursuant to Section  3.27(e),  any
Certificates  beneficially owned by the Master Servicer, the Special Servicer or
an  Affiliate  thereof  shall be  deemed  to be  outstanding.  For  purposes  of
obtaining  the consent of  Certificateholders  to any action  with  respect to a
particular  Mortgage Loan proposed to be taken by the Master Servicer or Special
Servicer,  any Certificates  beneficially owned by the Affiliates of the related
Borrower, the related Manager, or Affiliates of the related Manager shall not be
deemed to be outstanding.

      The Certificate  Registrar  shall be entitled to request and  conclusively
rely upon a certificate  of the  Depositor,  the Master  Servicer or the Special
Servicer in determining  whether a Certificate is registered in the name of such
Person  or is  beneficially  owned by such  Person.  All  references  herein  to
"Certificateholders" or "Holders" shall reflect the rights of Certificate Owners
only insofar as they may indirectly  exercise such rights through the Securities
Depository  and the  Securities  Depository  Participants  (except as  otherwise
specified  herein),  it being  herein  acknowledged  and agreed that the parties
hereto shall be required to recognize as a "Certificateholder"  or "Holder" only
the  Person  in  whose  name a  Certificate  is  registered  in the  Certificate
Register.

      Notwithstanding  the  foregoing,  solely  for  purposes  of  providing  or
distributing any reports,  statements or other information required or permitted
to be provided  to a  Certificateholder  hereunder,  a  Certificateholder  shall
include any Certificate  Owner, or any Person  identified by a Certificate Owner
as a  prospective  transferee  of  a  Certificate  beneficially  owned  by  such
Certificate  Owner but only if the Trustee or another  party  hereto  furnishing
such  report,  statement  or  information  has been  provided  with the name and
address  of the  Certificate  Owner of the  related  Certificate  or the  Person
identified  as  a  prospective   transferee   thereof  by  the  Depositor  or  a
Certificateholder  or  Certificate  Owner.  For purposes of the  foregoing,  the
Depositor,  the Master Servicer,  the Special Servicer,  the Trustee, the Paying
Agent or other  such  Person  may rely,  without  limitation,  on a  participant
listing from the Securities  Depository or statements  that on their face appear
to be statements from a participant in the Securities  Depository to such Person
indicating that such Person beneficially owns Certificates.

      "CIBC":  CIBC Inc., a Delaware corporation.

      "CIBC Loans":  The Mortgage Loans  transferred and assigned by CIBC to the
Depositor pursuant to the CIBC Mortgage Loan Purchase Agreement.

      "CIBC  Mortgage Loan Purchase  Agreement":  The Mortgage Loan Purchase and
Sale Agreement dated as of June 15, 2000, between the Depositor and CIBC.

      "Class":  With respect to Certificates or REMIC II Regular Interests,  all
of the Certificates or REMIC II Regular  Interests bearing the same alphabetical
and numerical class designation.

      "Class  A   Certificates":  The  Class  A-1  Certificates  and  Class  A-2
Certificates, collectively.

      "Class  A-1  Certificate":  Any one of the  Certificates  executed  by the
Trustee  and  authenticated  by the  Trustee  or  the  Authenticating  Agent  in
substantially the form set forth in Exhibit A-1 hereto.


                                       11
<PAGE>


      "Class  A-2  Certificate":  Any one of the  Certificates  executed  by the
Trustee  and  authenticated  by the  Trustee  or  the  Authenticating  Agent  in
substantially the form set forth in Exhibit A-2 hereto.

      "Class B Certificate": Any one of the Certificates executed by the Trustee
and  authenticated by the Trustee or the  Authenticating  Agent in substantially
the form set forth in Exhibit A-4 hereto.

       "Class  C  Certificate":  Any  one of the  Certificates  executed  by the
Trustee  and  authenticated  by the  Trustee  or  the  Authenticating  Agent  in
substantially the form set forth in Exhibit A-5 hereto.

      "Class D Certificate": Any one of the Certificates executed by the Trustee
and  authenticated by the Trustee or the  Authenticating  Agent in substantially
the form set forth in Exhibit A-6 hereto.

      "Class E Certificate": Any one of the Certificates executed by the Trustee
and  authenticated by the Trustee or the  Authenticating  Agent in substantially
the form set forth in Exhibit A-7 hereto.

      "Class F Certificate": Any one of the Certificates executed by the Trustee
and  authenticated by the Trustee or the  Authenticating  Agent in substantially
the form set forth in Exhibit A-8 hereto.

      "Class G Certificate": Any one of the Certificates executed by the Trustee
and  authenticated by the Trustee or the  Authenticating  Agent in substantially
the form set forth in Exhibit A-9 hereto.

      "Class H Certificate": Any one of the Certificates executed by the Trustee
and  authenticated by the Trustee or the  Authenticating  Agent in substantially
the form set forth in Exhibit A-10 hereto.

      "Class Interest Shortfall": With respect to any Class of REMIC III Regular
Certificates and any Distribution  Date (except the initial  Distribution  Date,
with  respect  to which the Class  Interest  Shortfall  for each such Class will
equal zero), the excess, if any, of (i) all Distributable  Certificate  Interest
in  respect  of  such  Class  of  Certificates  for  the  immediately  preceding
Distribution  Date, over (ii) all  distributions  of  Distributable  Certificate
Interest  made with  respect to such Class of  Certificates  on the  immediately
preceding Distribution Date pursuant to Section 4.3.

      "Class J Certificate": Any one of the Certificates executed by the Trustee
and  authenticated by the Trustee or the  Authenticating  Agent in substantially
the form set forth in Exhibit A-11 hereto.

      "Class K Certificate": Any one of the Certificates executed by the Trustee
and  authenticated by the Trustee or the  Authenticating  Agent in substantially
the form set forth in Exhibit A-12 hereto.


                                       12
<PAGE>


      "Class L Certificate": Any one of the Certificates executed by the Trustee
and  authenticated by the Trustee or the  Authenticating  Agent in substantially
the form set forth in Exhibit A-13 hereto.

      "Class M Certificate": Any one of the Certificates executed by the Trustee
and  authenticated by the Trustee or the  Authenticating  Agent in substantially
the form set forth in Exhibit A-14 hereto.

      "Class N Certificate": Any one of the Certificates executed by the Trustee
and  authenticated by the Trustee or the  Authenticating  Agent in substantially
the form set forth in Exhibit A-15 hereto.

      "Class O Certificate": Any one of the Certificates executed by the Trustee
and  authenticated by the Trustee or the  Authenticating  Agent in substantially
the form set forth in Exhibit A-16 hereto.

      "Class R-I  Certificate":  Any  Certificate  executed  by the  Trustee and
authenticated by the Trustee or the  Authenticating  Agent in substantially  the
form set forth in  Exhibit  A-18  hereto.  The Class  R-I  Certificates  have no
Pass-Through Rate, Certificate Balance or Notional Amount.

       "Class R-II Certificate":  Any Certificate  executed and authenticated by
the  Trustee  or  the  Authenticating  Agent  on  behalf  of  the  Depositor  in
substantially  the form  set  forth in  Exhibit  A-19  hereto.  The  Class  R-II
Certificates have no Pass-Through Rate, Certificate Balance or Notional Amount.

      "Class R-III  Certificate":  Any  Certificate  executed by the Trustee and
authenticated by the Trustee or the  Authenticating  Agent in substantially  the
form set forth in Exhibit  A-20  hereto.  The Class R-III  Certificates  have no
Pass-Through Rate, Certificate Balance or Notional Amount.

      "Class  V  Certificates":  Any  one of the  Certificates  executed  by the
Trustee  and   authenticated   by  the  Trustee  or   Authenticating   Agent  in
substantially  the form set forth in Exhibit  A-17  hereto and  entitled  to the
distributions  payable thereto pursuant to Section 4.7. The Class V Certificates
have no Pass-Through Rate,  Certificate  Balance or Notional Amount. The Class V
Certificates  represent a  beneficial  ownership  interest in the Grantor  Trust
Assets.

       "Class  X  Certificate":  Any  one of the  Certificates  executed  by the
Trustee  and  authenticated  by the  Trustee  or  the  Authenticating  Agent  in
substantially the form set forth in Exhibit A-3 hereto.

      "Class X Interest  Amount":  With respect to any Distribution Date and the
related  Interest  Accrual  Period,   interest  equal  to  the  product  of  (i)
one-twelfth  of the  Pass-Through  Rate for the  Class X  Certificates  for such
Distribution  Date and (ii) the Class X Notional  Amount  for such  Distribution
Date.

      "Class X Portion":  When used with respect to the  Uncertificated  Accrued
Interest in respect of any REMIC II Regular Interest for any Distribution  Date,
the portion of such Uncertificated Accrued Interest that is equal to the product
of (a) the entire amount of such Uncertificated Accrued Interest,  multiplied by
(b) a fraction (not less than zero or greater than


                                       13
<PAGE>


one),  the numerator of which is the excess,  if any, of the REMIC II Remittance
Rate in respect of such REMIC II Regular  Interest for such  Distribution  Date,
over the Adjusted  REMIC II Remittance  Rate in respect of such REMIC II Regular
Interest for such  Distribution  Date, and the denominator of which is the REMIC
II  Remittance  Rate in  respect  of such  REMIC II  Regular  Interest  for such
Distribution  Date;  provided  that  if the  aggregate  Class X  Portion  of the
Uncertificated Accrued Interest in respect of all the REMIC II Regular Interests
for any  Distribution  Date,  calculated  without regard to this proviso,  would
exceed an amount equal to the aggregate Accrued Certificate  Interest in respect
of the Class X Certificates for such Distribution Date, then the Class X Portion
of the  Uncertificated  Accrued  Interest  in  respect  of each REMIC II Regular
Interest for such Distribution Date shall be  proportionately  reduced until the
aggregate Class X Portion of the  Uncertificated  Accrued Interest in respect of
all the REMIC II Regular  Interests for such  Distribution  Date is equal to the
aggregate  Accrued  Certificate  Interest in respect of the Class X Certificates
for such  Distribution  Date.  When  used  with  respect  to the  Uncertificated
Distributable  Interest  in  respect of any REMIC II  Regular  Interest  for any
Distribution  Date, the portion of such  Uncertificated  Distributable  Interest
that is equal to (a) the Class X Portion of the Uncertificated  Accrued Interest
in respect of such REMIC II Regular Interest for such Distribution Date, reduced
(to not  less  than  zero)  by (b) the  product  of (i) any  portion  of the Net
Aggregate  Prepayment/Balloon  Payment Interest  Shortfall for such Distribution
Date that is allocable to such REMIC II Regular  Interest in accordance with the
definition  of  "Uncertificated  Distributable  Interest",  multiplied by (ii) a
fraction,  the  numerator  of  which  is equal  to the  Class X  Portion  of the
Uncertificated Accrued Interest in respect of such REMIC II Regular Interest for
such  Distribution  Date,  and the  denominator  of which is equal to the entire
amount of the  Uncertificated  Accrued  Interest  in  respect  of such  REMIC II
Regular  Interest for such  Distribution  Date, and increased by (c) the Class X
Portion of any Uncertificated Distributable Interest in respect of such REMIC II
Regular Interest for the immediately  preceding  Distribution  Date that was not
deemed paid on the immediately  preceding  Distribution Date pursuant to Section
4.2.

      "Closing Date":  June 29, 2000.

      "CMSA":  The  Commercial   Mortgage  Securities   Association,    or   any
association or organization that is a successor thereto.

      "CMSA IRP": The CMSA Investor Reporting  Package,  which shall include six
electronic  files ((1) Loan Set-up File,  (2) Loan  Periodic  Update  File,  (3)
Property  File,  (4)  Bond  Level  File,  (5)  Collateral  Summary  File and (6)
Financial  File) and eight  surveillance  reports ((1) Servicer  Watch List, (2)
Delinquent Loan Status Report, (3) REO Status Report, (4) Comparative  Financial
Status  Report,   (5)  Historical  Loan  Modification   Report,  (6)  Historical
Liquidation  Report,  (7)  Operating  Statement  Analysis  Report  and  (8)  NOI
Adjustment Worksheet).

      "Code":  The Internal  Revenue Code of 1986, as amended from time to time,
any successor  statute  thereto,  and any temporary or final  regulations of the
United States Department of the Treasury promulgated pursuant thereto.

      "Collection  Account":  The segregated  account or accounts  created   and
maintained by the Master Servicer  pursuant to Section 3.5(a),  which shall   be
entitled "LaSalle Bank National Association,  as Trustee, in trust  for  Holders
of  PNC Mortgage Acceptance Corp., Commercial


                                       14
<PAGE>


Mortgage  Pass-Through  Certificates,  Series 2000-C1,  Collection Account," and
which shall be an Eligible Account.

      "Collection  Period":  With  respect  to any  Distribution  Date  and  any
Mortgage Loan, the period beginning on the first day following the Determination
Date in the month  preceding  the month in which such  Distribution  Date occurs
(or, in the case of the  Distribution  Date  occurring in July 2000,  on the day
after the Cut-off Date) and ending on and including  the  Determination  Date in
the month in which such Distribution Date occurs.

      "Commission":  The   Securities   and  Exchange  Commission  of the United
States of America.

      "Compensating  Interest Payments":  With respect to any Distribution Date,
any payments required to be made by the Master Servicer pursuant to Section 3.25
to cover Prepayment/Balloon Payment Interest Shortfalls.

      "Controlling  Class":  The most  subordinate  Class of  Principal  Balance
Certificates outstanding at any time of determination (or, if the then aggregate
Certificate  Balance  of such  Class  of  Certificates  is less  than 25% of the
initial aggregate  Certificate  Balance thereof and there is a more senior Class
of Principal Balance Certificates then outstanding with an aggregate Certificate
Balance  that is at least  equal  to 25% of the  initial  aggregate  Certificate
Balance  thereof,   the  next  most  subordinate   Class  of  Principal  Balance
Certificates). If no Class of Principal Balance Certificates has at least 25% of
its initial  aggregate  Certificate  Balance then  outstanding,  the Controlling
Class will be the most subordinate Class of Principal Balance Certificates still
outstanding.  For purposes of determining the Controlling  Class,  the Class A-1
and Class A-2  Certificates  will be treated as a single Class of  Certificates,
the Subordinate  Certificates will be subordinate to the Class A-1 and Class A-2
Certificates,  and each Class of Subordinate Certificates will be subordinate to
each  other  Class  of  Subordinate  Certificates,   if  any,  with  an  earlier
alphabetical  Class designation.  The existence of an Appraisal  Reduction shall
have no effect on the determination of the Controlling  Class. As of the Closing
Date, the Controlling Class will be the Class O Certificates.

      "Corporate Trust Office": With respect to the presentment and surrender of
Certificates for the final distribution thereon or the presentment and surrender
of Certificates for any other purpose,  the principal  corporate trust office of
the Trustee or the New York Presenting Office (if any). The principal  corporate
trust office of the Trustee is presently  located at 135 South  LaSalle  Street,
Suite 1625, Chicago,  Illinois 60603,  Attention:  Asset-Backed Securities Trust
Services Group - PNC Mortgage  Acceptance Corp. Series 2000-C1, or at such other
address  as the  Trustee  may  designate  from  time to time  by  notice  to the
Certificateholders, the Depositor, the Master Servicer and the Special Servicer.

      "Corrected  Mortgage  Loan":  Any  Mortgage  Loan  which  is no  longer  a
Specially  Serviced  Mortgage  Loan as a result  of the  curing  of any event of
default under such  Specially  Serviced  Mortgage  Loan through a  modification,
restructuring  or workout  negotiated by the Special Servicer and evidenced by a
signed writing.

      "CPR": An assumed  constant rate of prepayment each month (which is quoted
on a per annum basis) relative to the  then-outstanding  principal  balance of a
pool mortgage loans for the life of such mortgage loans.


                                       15
<PAGE>


      "Cross-Collateralized   Group":  A  group  of  Mortgage  Loans  which  are
cross-defaulted or  cross-collateralized  with one another, which are identified
as separate Mortgage Loans on the Mortgage Loan Schedule and treated as separate
Mortgage  Loans for  purposes  of this  Agreement  (except  with  respect to the
definition of "Review Threshold" contained herein).

      "Cross-Collateralized  Loan":  Each  Mortgage  Loan that is  included in a
certain Cross-Collateralized Group.

      "Current Principal  Distribution  Amount":  With respect to  the  Mortgage
Loans for any Distribution Date, an amount equal to the aggregate of:

(a) the principal portions of all Monthly Payments (other than Balloon Payments)
and any  Assumed  Monthly  Payments  due or deemed  due,  as the case may be, in
respect of the Mortgage  Loans,  including  without  limitation any REO Mortgage
Loans, for their  respective Due Dates occurring  during the related  Collection
Period; and

(b)  that  portion  of all  payments  (including  without  limitation  Principal
Prepayments and Balloon Payments), Liquidation Proceeds, Insurance Proceeds, any
payments of Repurchase Price,  payments of Substitution  Shortfall Amounts,  Net
REO Proceeds and other  collections  that were  received on or in respect of the
Mortgage Loans (including without limitation any REO Mortgage Loans) or received
on or in respect of any related REO  Properties,  during the related  Collection
Period and were identified and applied by the Master Servicer in accordance with
Section 1.2 as payments or other  recoveries of principal of such Mortgage Loans
(including, without limitation, any REO Mortgage Loans), in each case net of any
portion of such amounts that  represents  (i) a payment or other recovery of the
principal  portion of any Monthly Payment (other than a Balloon Payment) due, or
of the principal  portion of any Assumed  Monthly Payment deemed due, in respect
of any  such  Mortgage  Loan  on a Due  Date  during  or  prior  to the  related
Collection  Period and not previously paid or recovered or (ii) an early payment
(other than in the form of a Principal  Prepayment) of the principal  portion of
any  Monthly  Payment  due in  respect of any such  Mortgage  Loan on a Due Date
subsequent to the end of the related Collection Period.

      "Custodial  Agreement":  The Custodial  Agreement,  if any, in effect from
time to time between the Custodian  named therein,  the Master  Servicer and the
Trustee,  substantially  in the form of  Exhibit  F  hereto,  as the same may be
amended or modified from time to time in accordance with the terms thereof.

      "Custodian":  Any Custodian appointed pursuant to Section 8.12 and, unless
the  Trustee is  Custodian,  named  pursuant  to any  Custodial  Agreement.  The
Custodian  may (but need  not) be the  Trustee  or the  Master  Servicer  or any
Affiliate of the Trustee or the Master Servicer, but may not be the Depositor.

      "Cut-off Date":  June 1, 2000.

      "Default Interest": With respect to any Mortgage Loan, interest accrued on
such Mortgage Loan at the excess of the Default Rate over the Mortgage  Rate, in
each case excluding any portion thereof that represents Deferred Interest.


                                       16
<PAGE>


      "Default  Rate":  With respect to each Mortgage  Loan,  the annual rate at
which  interest  accrues on such Mortgage Loan following any event of default on
such Mortgage Loan, including a default in the payment of a Monthly Payment or a
Balloon Payment.

      "Deferred  Interest":   With  respect  to  each  Hyper-Amortization  Loan,
interest accrued on such Hyper-Amortization Loan at the related Excess Rate plus
interest  thereon to the  extent  permitted  by  applicable  law at the  related
Revised Interest Rate.

      "Definitive Certificate":  As defined in Section 5.3(a).

      "Deleted  Mortgage  Loan": A Mortgage Loan replaced or to be  replaced  by
a Qualified Substitute Mortgage Loan.

      "Depositor":  PNC Mortgage Acceptance Corp., a  Missouri  corporation  and
its successors and assigns.

      "Determination  Date":  With  respect  to each   Distribution   Date,  the
fifth Business Day prior to such Distribution Date.

      "Directly  Operate":  With respect to any REO Property,  the furnishing or
rendering of services to the tenants thereof that are not  customarily  provided
to tenants in connection  with the rental of space for occupancy only within the
meaning of Treasury  Regulations  Section  1.512(h)-1(c)(5),  the  management or
operation of such REO Property,  the holding of such REO Property  primarily for
sale to  customers  or any use of  such  REO  Property  in a trade  or  business
conducted  by the Trust  Fund  other than  through  an  Independent  Contractor;
provided, however, that the Special Servicer, on behalf of the Trust Fund, shall
not be considered to Directly Operate an REO Property solely because the Special
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 REO
Property.

      "Discount Rate": The rate which, when compounded monthly, is equivalent to
the Treasury Rate when  compounded  semi  annually.  The "Treasury  Rate" is the
yield  calculated  by the linear  interpolation  of the  yields,  as reported in
Federal  Reserve  Statistical  Release H.15  Selected  Interest  Rates under the
heading "U.S. government  securities/Treasury  constant maturities" for the week
ending prior to the date of the relevant Principal Prepayment,  of U.S. Treasury
constant  maturities  with a maturity  date (one  longer and one  shorter)  most
nearly  approximating  the maturity  date (or the  Hyper-Amortization  Date,  if
applicable)  of  the  Mortgage  Loan  prepaid.  If  Release  H.15  is no  longer
published,  the Trustee shall select a comparable  publication  to determine the
Treasury Rate.

      "Disposition Fee": With respect to any Specially Serviced Mortgage Loan or
REO Property  which is sold or transferred  or otherwise  liquidated  (except in
connection with (i) a repurchase  under Section 2.3, (ii) the termination of the
Trust Fund  pursuant to Section  9.1(b) or (iii) the purchase of a Mortgage Loan
by the Operating  Adviser,  the  Depositor,  the Master  Servicer or the Special
Servicer  pursuant to Section 3.18),  including by reason of condemnation of the
related Mortgaged  Property or REO Property,  as applicable,  an amount equal to
the product of (I) the excess,  if any of (a) the  Liquidation  Proceeds of such
Specially  Serviced  Mortgage  Loan  or  REO  Property  over  (b)  any  broker's
commission and related brokerage referral fees, and (II) 1%.


                                       17
<PAGE>


      "Disqualified Non-U.S. Person": With respect to a Class R-I, Class R-II or
Class R-III Certificate,  any Non-U.S.  Person or agent thereof other than (i) a
Non-U.S.  Person that holds the Class R-I, Class R-II or Class R-III Certificate
in connection  with the conduct of a trade or business  within the United States
and has furnished the transferor and the Certificate Registrar with an effective
IRS Form 4224 or a successor form.

      "Disqualified Organization":  Either (a) the United States, a State or any
political  subdivision  thereof,  any  possession of the United  States,  or any
agency or instrumentality of any of the foregoing (other than an instrumentality
that is a corporation if all of its activities are subject to tax and a majority
of its board of directors is not selected by any such governmental  unit), (b) a
foreign government,  International Organization or any agency or instrumentality
of either of the foregoing,  (c) an organization that is exempt from tax imposed
by  Chapter 1 of the Code  (including  the tax  imposed by Code  Section  511 on
unrelated  business taxable income) on any excess inclusions (as defined in Code
Section  860E(c)(1))  with  respect to the Class R-I,  Class R-II or Class R-III
Certificates  (except certain  farmers'  cooperatives  described in Code Section
521),  (d) rural electric and telephone  cooperatives  described in Code Section
1381(a)(2),  or (e) any other Person so designated by the Certificate  Registrar
based upon an Opinion of Counsel to the effect that any  Transfer to such Person
may result in an Adverse  REMIC Event.  The terms "United  States,"  "State" and
"International  Organization"  shall have the meanings set forth in Code Section
7701 or successor provisions.

      "Distributable  Certificate Interest":  With respect to any Class of REMIC
III Regular  Certificates for each  Distribution  Date, the Accrued  Certificate
Interest in respect of such Class of Certificates  for such  Distribution  Date,
reduced (to not less than zero) by that  portion,  if any, of the Net  Aggregate
Prepayment/Balloon  Payment Interest  Shortfall,  if any, for such  Distribution
Date allocated to such Class of Certificates  as set forth below,  and increased
by any Class  Interest  Shortfall in respect of such Class of  Certificates  for
such Distribution  Date. The Net Aggregate  Prepayment/Balloon  Payment Interest
Shortfall,  if any,  for  each  Distribution  Date  shall be  allocated  on such
Distribution   Date  among  the   respective   Classes  of  REMIC  III   Regular
Certificates,  pro rata, in the ratio that the Accrued Certificate Interest with
respect to any such Class of Certificates  for such  Distribution  Date bears to
the total Accrued Certificate  Interest with respect to all Classes of REMIC III
Regular Certificates for such Distribution Date.

      "Distribution  Account":  The segregated  account or accounts  created and
maintained as a separate  trust  account or accounts by the Trustee  pursuant to
Section 3.5(b), which shall be entitled "LaSalle Bank National  Association,  as
Trustee,  in trust for  Holders  of PNC  Mortgage  Acceptance  Corp.  Commercial
Mortgage Pass-Through  Certificates,  Series 2000-C1,  Distribution Account" and
which shall be an Eligible Account.

      "Distribution Date": The 15th day of any month, or if such 15th day is not
a Business Day, the Business Day immediately following such 15th day, commencing
in July 2000.

      "Due Date":  With respect to any Collection  Period and any Mortgage Loan,
the date on which  scheduled  Monthly  Payments  are due on such  Mortgage  Loan
(without  regard to grace  periods),  such date being for all Mortgage Loans the
first day of each month.

      "Eligible  Account":  Either (a) for funds that will be held for more than
30 days,  an account or accounts  maintained  with a depository  institution  or
trust  company the  long-term  unsecured  debt  obligations  of which (or of its
parent holding company) are rated "Aa3" or better


                                       18
<PAGE>


by Moody's (or, if not so rated by Moody's, then otherwise approved by Moody's),
and "AA-" or  better by Fitch  (or,  if not so rated by  Fitch,  then  otherwise
approved  by  Fitch);  (b) for funds  that will be held for 30 days or less,  an
account or accounts  maintained with a depository  institution or trust company,
the short-term  unsecured debt  obligations of which are rated "P1" or better by
Moody's (or, if not so rated by Moody's,  then  otherwise  approved by Moody's),
and  "F-1+" or better by Fitch  (or,  if not so rated by Fitch,  then  otherwise
approved by Fitch); (c) a segregated trust account or accounts maintained with a
federal- or  state-chartered  depository  institution or trust company acting in
its fiduciary  capacity:  (i) having a combined  capital and surplus of at least
$50,000,000,  (ii) subject to  supervision  or examination by a federal or state
authority,  and (iii) for state-chartered  institutions,  subject to regulations
regarding  fiduciary funds on deposit  substantially  similar to 12 CFR 9.10(b);
(d) an  account  or  accounts  maintained  with PNC Bank,  National  Association
("PNC") so long as PNC's (or its parent holding  company's)  long term unsecured
debt  rating  shall be at least "A1" from  Moody's  and "A" from  Fitch;  or (e)
otherwise  subject to a Rating Agency  Confirmation.  Eligible Accounts may bear
interest.

      "Eligible Investor":  (i) A Person,  reasonably believed by the transferor
to be a Qualified  Institutional  Buyer,  that is  purchasing  Privately  Placed
Certificates for its own account or for the account of a Qualified Institutional
Buyer to whom notice is given that the offer,  sale or transfer is being made in
reliance  on Rule 144A  promulgated  under the 1933 Act or (ii) with  respect to
Privately  Placed  Certificates  (other  than the Class V  Certificates  and the
Residual Certificates), an Institutional Accredited Investor.

      "Emergency  Advance":  Any  Servicing  Advance  (whether  or  not  it is a
Servicing  Advance that,  pursuant  hereto,  the Special Servicer is required to
request the Master Servicer to make) that must be made within five Business Days
of the Special Servicer's  becoming aware that it must be made in order to avoid
any material  penalty,  any material  harm to a Mortgaged  Property or any other
material adverse consequence to the Trust Fund.

      "Environmental  Report":  With  respect to each  Mortgaged  Property,  the
report or reports of the environmental site assessment or assessments  performed
in connection with the origination of the related Mortgage Loan.

      "ERISA":  The  Employee  Retirement  Income  Security  Act of 1974,  as it
may be amended from time to time.

      "Escrow Account":  As defined in Section 3.4(b).

      "Escrow Payment":  Any payment made by any Borrower to the Master Servicer
for the account of such  Borrower for  application  toward the payment of taxes,
insurance  premiums,  assessments  and  similar  items in respect of the related
Mortgaged Property.

      "Event of Default":  As defined in Section 7.1.

      "Excess  Liquidation  Proceeds":  The  excess  of (i) the Net  Liquidation
Proceeds  from  the  sale or  liquidation  of a  Mortgage  Loan or  related  REO
Property,  net of (x)  interest  on any  related  Advances  and (y) any  related
Servicing  Advances  over (ii) the amount needed to pay off the Mortgage Loan in
full.


                                       19
<PAGE>


      "Excess Liquidation Proceeds Account":  The segregated account or accounts
created and maintained by the Trustee pursuant to Section 3.5(f), which shall be
entitled "LaSalle Bank National Association, as Trustee, in trust for Holders of
PNC Mortgage Acceptance Corp.,  Commercial Mortgage  Pass-Through  Certificates,
Series  2000-C1,  Excess  Liquidation  Proceeds  Account," and which shall be an
Eligible Account.

      "Excess  Rate": With  respect to each Hyper-Amortization  Loan, the excess
of the related Revised Interest Rate over the related Mortgage Rate.

      "Expense  Loss":  A  loss  realized  upon payment by  the Trust Fund of an
Additional Trust Fund Expense.

      "FDIC":  The Federal  Deposit  Insurance  Corporation,   or  any successor
thereto.

      "FHA":  The Federal Housing Administration.

      "FHLMC":  The Federal Home Loan Mortgage  Corporation,  or  any  successor
thereto.

      "Fitch":  Fitch, Inc., and its successors in interest.

      "Final Purchaser":  As defined in Section 9.1(b).

      "Final  Recovery  Determination":  With respect to any REO Mortgage  Loan,
Specially  Serviced  Mortgage Loan or Mortgage Loan subject to repurchase by the
related  Seller as  contemplated  by Section 2.3, the recovery of all  Insurance
Proceeds,  Liquidation Proceeds, the related Repurchase Price and other payments
or recoveries (including proceeds of the final sale of any related REO Property)
which the  Special  Servicer,  in its  reasonable  judgment  as  evidenced  by a
certificate of a Servicing Officer  delivered to the Trustee,  the Custodian and
the Operating Adviser,  expects to be finally  recoverable.  The Master Servicer
shall maintain records,  prepared by a Servicing Officer, of each Final Recovery
Determination  until the  earlier  of (i) its  termination  as  Master  Servicer
hereunder and the transfer of such records to a successor servicer and (ii) five
years following the termination of the Trust Fund.

      "Fiscal  Agent":  ABN AMRO Bank N.V. in its  capacity as  fiscal  agent of
the  Trustee,  or its  successor in interest,  or any  successor   fiscal  agent
appointed as herein provided.

      "FNMA":  The Federal  National  Mortgage  Association,  or  any  successor
thereto.

      "Grantor Trust":  As defined in Preliminary Statement.

      "Grantor Trust Assets":  As defined in Section 10.5.

      "Grantor Trust  Collection  Account":  The segregated  account or accounts
created and  maintained  as a separate  trust  account or accounts by the Master
Servicer  pursuant to Section  3.5(c),  which shall be  entitled  "LaSalle  Bank
National  Association,  as  Trustee,  in  trust  for  Holders  of  PNC  Mortgage
Acceptance Corp. Commercial Mortgage Pass-Through Certificates,  Series 2000-C1,
Grantor Trust Collection  Account" and which shall be an Eligible  Account.  The
Grantor Trust  Collection  Account shall not be an asset of REMIC I, REMIC II or
REMIC III formed hereunder.


                                       20
<PAGE>


      "Grantor Trust Distribution  Account":  The segregated account or accounts
created and  maintained  as a separate  trust account or accounts by the Trustee
pursuant  to Section  3.5(d),  which shall be entitled  "LaSalle  Bank  National
Association,  as Trustee,  in trust for Holders of PNC Mortgage Acceptance Corp.
Commercial Mortgage  Pass-Through  Certificates,  Series 2000-C1,  Grantor Trust
Distribution Account " and which shall be an Eligible Account. The Grantor Trust
Distribution  Account  shall  not be an asset of REMIC I,  REMIC II or REMIC III
formed hereunder.

      "Hazardous  Materials":  Any  dangerous,  toxic or  hazardous  pollutants,
chemicals,  wastes,  or  substances,  including,  without  limitation,  those so
identified pursuant to the Comprehensive  Environmental  Response,  Compensation
and Liability  Act, 42 U.S.C.  Section 9601 et seq., or any other  environmental
laws now existing, and specifically including, without limitation,  asbestos and
asbestos-containing  materials,  polychlorinated biphenyls, radon gas, petroleum
and petroleum products, urea formaldehyde and any substances classified as being
"in inventory",  "usable work in process" or similar classification which would,
if classified as unusable, be included in the foregoing definition.

      "Holder":  With respect to any Certificate,  a   Certificateholder;   with
respect  to any REMIC I Regular  Interest  or REMIC  II  Regular  Interest,  the
Trustee.

      "Hyper-Amortization  Date": With respect to any  Hyper-Amortization  Loan,
the date specified on the related  Mortgage Note, as of which Deferred  Interest
shall begin to accrue on such Mortgage  Loan,  which date is prior to the Stated
Maturity Date for such Mortgage Loan.

      "Hyper-Amortization  Loan":  A Mortgage Loan that provides for the accrual
of Deferred  Interest  thereon if such  Mortgage  Loan is not paid in full on or
prior to its Hyper-Amortization Date.

      "Indemnified Party":  As defined in Section 8.5(c).

      "Independent":  When used with respect to any specified Person,  any other
Person  who (i) does not have any direct  financial  interest,  or any  material
indirect financial interest,  in any of the Manager,  the Depositor,  the Master
Servicer, the Special Servicer,  Trustee, any Borrower or any Affiliate thereof,
and  (ii) is not  connected  with  any  such  specified  Person  as an  officer,
employee, promoter, underwriter, trustee, partner, director or Person performing
similar functions.

      "Independent  Contractor":   Either  (i)  any  Person  that  would  be  an
"independent  contractor"  with  respect to the Trust Fund within the meaning of
Section  856(d)(3)  of the Code if the Trust Fund were a real estate  investment
trust  (except  that the  ownership  tests  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  or 35% or more of the  aggregate  value  of all  Classes  of
Certificates),  provided  that the Trust  Fund does not  receive  or derive  any
income from such Person and the  relationship  between such Person and the Trust
Fund is at arm's length, all within the meaning of Treasury  Regulations Section
1.856-4(b)(5) (except that the Special Servicer shall not be considered to be an
Independent Contractor under the definition in this clause (i) unless an Opinion
of Counsel  (obtained at the expense of the Special  Servicer)  addressed to the
Special Servicer and the Trustee has been delivered to the Trustee to the effect
that the Special Servicer meets the requirements of such definition) or (ii) any
other Person (including the Special Servicer) if the


                                       21
<PAGE>


Special Servicer,  on behalf of itself and the Trustee,  has received an Opinion
of  Counsel  (obtained  at the  expense  of the  party  seeking  to be deemed an
Independent  Contractor)  to the effect that the taking of any action in respect
of any REO Property by such Person, subject to any conditions therein specified,
that is otherwise herein  contemplated to be taken by an Independent  Contractor
will not cause such REO Property to cease to qualify as  "foreclosure  property"
within the meaning of Section 860G(a)(8) of the Code (determined  without regard
to the  exception  applicable  for  purposes of Section  860D(a) of the Code) or
cause any income  realized  with respect of such REO Property to fail to qualify
as Rents from Real  Property  (provided  that such  income  would  otherwise  so
qualify).

      "Initial Sub-Servicer": With respect to each Mortgage Loan that is subject
to a  sub-servicing  agreement with the Master  Servicer as of the Closing Date,
the sub-servicer under any such sub-servicing agreement.

      "Institutional Accredited Investor": An entity meeting the requirements of
Rule 501(a)(1),  (2), (3) or (7) of Regulation D promulgated  under the 1933 Act
(and any entity in which all the equity owners meet such requirements) and which
is not otherwise a Qualified Institutional Buyer.

      "Insurance  Proceeds":  Proceeds of any fire and hazard insurance  policy,
title policy or other  insurance  policy  relating to a Mortgage Loan and/or the
Mortgaged Property securing any Mortgage Loan (including any amounts paid by the
Master Servicer or the Special Servicer  pursuant to Section 3.8), to the extent
such proceeds are not to be applied to the restoration of the related  Mortgaged
Property or released to the Borrower in accordance with the express requirements
of the  related  Mortgage  or Note or other  documents  included  in the related
Mortgage File or in accordance with the Servicing Standard.

      "Interest  Accrual Period":  With  respect  to any Distribution  Date, the
calendar month preceding the month in which such Distribution Date occurs.

      "Interest Reserve Account": The segregated account or accounts created and
maintained as a separate  trust  account or accounts by the Trustee  pursuant to
Section 3.29,  which shall be entitled  "LaSalle Bank National  Association,  as
Trustee,  in trust for  Holders  of PNC  Mortgage  Acceptance  Corp.  Commercial
Mortgage Pass-Through  Certificates,  Series 2000-C1,  Interest Reserve Account"
and which shall be an Eligible Account.

      "Interest Reserve Amount": As defined in Section 3.29(a).

      "Interest  Reserve Loan":  A Mortgage Loan  that  bears interest  computed
on an Actual/360 Basis.

      "Interested Person": As of any date of determination,  the Depositor,  the
Master Servicer, the Special Servicer, the Trustee, any Borrower, any Manager of
a Mortgaged Property, any Independent Contractor engaged by the Special Servicer
pursuant to Section 3.17,  or any Person known to a  Responsible  Officer of the
Trustee to be an Affiliate of any of them.

      "Investment Account":  As defined in Section 3.7(a).

      "Investment Representation Letter":  As defined in Section 5.2(c)(i).


                                       22
<PAGE>


      "IRS":  The Internal Revenue Service.

      "Liquidation  Event": With respect to any Mortgage Loan (other than an REO
Mortgage Loan), any of the following  events:  (i) such Mortgage Loan is paid in
full; (ii) a Final Recovery  Determination is made with respect to such Mortgage
Loan;  (iii) such Mortgage Loan is repurchased or replaced by a Seller  pursuant
to the  related  Mortgage  Loan  Purchase  Agreement  and  Section  2.3 of  this
Agreement; (iv) such Mortgage Loan is sold pursuant to Section 3.18; or (v) such
Mortgage  Loan is  purchased  by any  Person  entitled  to  effect  an  optional
termination  of the Trust Fund pursuant to Section  9.1(b).  With respect to any
REO Property (and the related REO Mortgage Loan),  any of the following  events:
(i) a Final  Recovery  Determination  is made with respect to such REO Property;
(ii) such REO  Property  is sold  pursuant  to Section  3.18;  or (iii) such REO
Property is purchased by any Person  entitled to effect an optional  termination
of the Trust Fund pursuant to Section 9.1(b).

      "Liquidation Expenses":  Expenses incurred by the Special Servicer and the
Trustee in connection  with the liquidation of any Specially  Serviced  Mortgage
Loan or property  acquired in respect thereof  (including,  without  limitation,
legal  fees and  expenses,  committee  or  referee  fees,  and,  if  applicable,
brokerage commissions, conveyance taxes and Disposition Fees).

      "Liquidation  Proceeds":  All cash amounts (other than Insurance Proceeds)
including all partial and/or unscheduled collections received in connection with
(i) the  taking of a  Mortgaged  Property  by  exercise  of the power of eminent
domain or  condemnation,  (ii) the full or partial  liquidation  of a  Mortgaged
Property or other collateral that constituted  security for a Specially Serviced
Mortgage Loan through a trustee's sale, foreclosure sale or otherwise, (iii) the
sale of a Specially Serviced Mortgage Loan or an REO Property in accordance with
Section 3.18,  (iv) the sale of all of the Mortgage Loans and any REO Properties
in  accordance  with  Section  9.1 or (v) the  realization  upon any  deficiency
judgment obtained against a Borrower or guarantor of any Mortgage Loan.

      "Loan  Agreement":  With respect to any Mortgage Loan, the loan agreement,
if any, between the Originator and the Borrower, pursuant to which such Mortgage
Loan was made.

      "Loan Number": With respect to any Mortgage Loan, the loan number by which
such  Mortgage  Loan was  identified  on the books  and  records  of the  Master
Servicer  or any  Sub-Servicer  for the  Master  Servicer,  as set  forth in the
Mortgage Loan Schedule.

      "Loan Service  Transaction  Fees":  With respect to any Mortgage Loan, any
fees  payable  by or on behalf of a  Borrower  other  than (i) fees  payable  in
connection  with or related to an  assumption,  modification  or  extension or a
consent to any of the foregoing or (ii) any fees  received in connection  with a
default.

      "Loan-to-Value  Ratio":  With respect to any Mortgage Loan, as of any date
of  determination,  the fraction,  expressed as a  percentage,  the numerator of
which is the then-unpaid principal balance of such Mortgage Loan (or, if part of
a  Cross-Collateralized  Group, of such group),  and the denominator of which is
the  appraised  value of the related  Mortgaged  Property  (or, in the case of a
Cross-Collateralized Group, of all the Mortgaged Properties securing such group)
as determined by an Updated Appraisal thereof.

      "MAI":  Member of the Appraisal Institute.


                                       23
<PAGE>


      "Majority  Certificateholder":  With  respect to any  particular  Class or
Classes of  Certificates,  any  Certificateholder  entitled to a majority of the
Voting Rights allocated to such Class or Classes, as the case may be.

      "Management Agreement":  With respect to any Mortgage Loan, the Management
Agreement,  if any, by and between the Manager and the related Borrower,  or any
successor Management Agreement between such parties.

      "Manager":  With  respect  to any Mortgage Loan, any property  manager for
the related Mortgaged Property.

      "Master  Servicer":  Midland  or  any successor master servicer  appointed
as herein provided.

      "Master  Servicer  Fee":  With respect to each  Mortgage  Loan and for any
Distribution  Date, an amount per calendar month equal to the product of (i) the
related Master Servicer Fee Rate and (ii) the Stated  Principal  Balance of such
Mortgage  Loan as of the Due Date in the calendar  month  preceding the calendar
month in which such  Distribution  Date  occurs  (or, in the case of the initial
Distribution Date, as of the Cut-off Date).

      "Master  Servicer Fee Rate":  With respect to each Mortgage  Loan, the per
annum rate set forth in the Mortgage Loan Schedule as the  "Administrative  Cost
Rate" less the Trustee Fee Rate and the Standby Special  Servicer Fee Rate, such
rate to be  calculated  on the same basis as the  related  Mortgage  Rate (e.g.,
"Actual/360" or "30/360").

      "Master  Servicer  Mortgage File":  With respect to any Mortgage Loan, all
documents related to such Mortgage Loan that are not required to be delivered to
the Trustee  pursuant to Section 2.1 or to be  maintained as part of the Trustee
Mortgage File, including, without limitation:

          (a)  a copy  of  the   Management  Agreement,  if any, for the related
Mortgaged Property;

          (b)  a copy of any cash management or lock box agreement;

          (c)  a copy of any intercreditor agreement;

          (d)  a  copy of the environmental insurance  policy  with  respect  to
the related Mortgaged Property, if any;

          (e)  any and all  amendments,  modifications  and supplements  to, and
waivers related to, any of the foregoing;

          (f)  copies  of  the   related   appraisals,   surveys,  environmental
insurance agreements, environmental reports and other similar documents;

          (g)  any other written agreements related to such Mortgage Loan; and

          (h)  a copy of the Asset Summary for the Mortgaged  Property  related
to such Mortgage Loan;

together with copies of all documents  that are required to be maintained as a
part of the Trustee  Mortgage  File. The Master  Servicer  Mortgage File shall
not be deemed to contain any


                                       24
<PAGE>


confidential  or  proprietary  information  or memoranda  prepared by the Master
Servicer for its internal use.

      "Master Servicer Remittance  Amount":  For each Distribution Date, (a) all
amounts on deposit in the Collection  Account as of the close of business on the
related Determination Date, exclusive of any portion thereof that represents one
or more of the following:

          (i)   Monthly Payments  collected, but  due  on a Due  Date  occurring
in a Collection Period subsequent to the related Collection Period;

          (ii)  Prepayment Premiums;

          (iii) amounts that are payable or  reimbursable  to any  Person  other
than a Certificateholder pursuant to clauses (ii) through (ix) of Section 3.6(a)
(including  amounts payable to the Master Servicer,  the Special  Servicer,  the
Trustee or the Fiscal Agent as compensation or in  reimbursement  of outstanding
Advances and amounts payable in respect of Additional Trust Fund Expenses);

          (iv)  Deferred Interest;

          (v)   Excess Liquidation Proceeds; and

          (vi)  amounts deposited in the Collection Account in error,

plus (b) to the extent not already  included in clause (a), any P&I Advances and
Compensating Interest Payments made with respect to such Distribution Date;

      "Maturity  Date":  With  respect  to any  Mortgage  Loan as of any date of
determination, the date on which the last payment of principal is then scheduled
to be due and payable under the related Mortgage Note.

      "Midland":  Midland  Loan  Services, Inc., a Delaware corporation,  or its
successor in interest.

      "Midland Loans":  means the MLS Loans and the Owner Trust Loans.

      "Midland  Mortgage  Loan Purchase  Agreement":  The Mortgage Loan Purchase
and Sale Agreement, dated as of June 15, 2000, between Depositor and Midland.

      "Midland  Owner Trusts":  The Midland Owner Trust III created  pursuant to
that certain Trust Agreement relating to the Midland  Commercial  Mortgage Owner
Trust III,  dated as of December 23, 1999 and the Midland Owner Trust IV created
pursuant to that  certain  Trust  Agreement  relating to the Midland  Commercial
Mortgage  Owner  Trust IV,  dated as of March 24,  2000,  each of which is among
Midland, as depositor,  Wilmington Trust Company, as owner trustee, LaSalle Bank
National Association, as custodian, and Midland, as paying agent.

      "Midland  Owner Trust  Certificate  Purchase  Agreement":  The Owner Trust
Certificate Purchase Agreement, dated as of June 15, 2000, among MSDWMC, Midland
and the owners of the certificates  representing  interests in the Midland Owner
Trusts.

      "Minimum Master Servicer Fee Rate":  A rate of 0.02%per annum.

      "MLS Loans":  The Mortgage Loans transferred and assigned to the Depositor
pursuant to the Midland Mortgage Loan Purchase Agreement.


                                       25
<PAGE>


      "Money  Term":  With respect to any  Mortgage  Loan,  the  Maturity  Date,
Mortgage Rate, principal balance, amortization term or payment frequency thereof
(and shall not include  provisions  relating to late fees,  Deferred Interest or
Default Interest).

      "Monthly  Payment":  With respect to any Mortgage Loan (other than any REO
Mortgage  Loan) and any Due Date,  the  scheduled  monthly  payment of principal
and/or interest,  excluding any Balloon  Payment,  Default Interest and Deferred
Interest on such Mortgage Loan which is payable by the related  Borrower on such
Due Date under the related Note (taking into account any waiver, modification or
amendment of the terms of such Mortgage  Loan,  whether  agreed to by the Master
Servicer  or Special  Servicer or in  connection  with a  bankruptcy  or similar
proceeding involving the related Borrower).

      "Moody's":   Moody's  Investors   Service,  Inc.  and  its  successors  in
interest.

      "Mortgage":  The mortgage,  deed  of  trust or other instrument creating a
first lien on a Mortgaged Property securing the related Note.

      "Mortgage  File":  With  respect  to   any   Mortgage  Loan,  the  Trustee
Mortgage File and the Master Servicer Mortgage File.

      "Mortgage  Loan":  Each of the mortgage loans  transferred and assigned to
the  Trustee  pursuant  to  Section  2.1 and from time to time held in the Trust
Fund,  such mortgage loans  originally so  transferred,  assigned and held being
identified on the Mortgage Loan Schedule as of the Cut-off Date. Such term shall
include  any REO  Mortgage  Loan,  any  Qualified  Substitute  Mortgage  Loan or
defeased Mortgage Loan.

      "Mortgage  Loan  Documents":  Any  and  all   documents  contained  in the
Trustee Mortgage File and the Master Servicer Mortgage File.

      "Mortgage  Loan Purchase  Agreement":  With respect to the MLS Loans,  the
Midland Mortgage Loan Purchase Agreement. With respect to the Owner Trust Loans,
the Midland Owner Trust Certificate Purchase Agreement.  With respect to the RFC
Loans, the RFC Mortgage Loan Purchase Agreement. With respect to the CIBC Loans,
the CIBC Mortgage  Loan Purchase  Agreement.  The term  "Mortgage  Loan Purchase
Agreements" shall mean all of such agreements.

      "Mortgage  Loan  Schedule":  As of any date,  the list of  Mortgage  Loans
included in the Trust Fund on such date,  such list as of the Closing Date being
attached hereto as Exhibit B-1.

      "Mortgage  Pool":  Collectively,  all of  the  Mortgage  Loans  (including
without  limitation  REO   Mortgage  Loans  and  Qualified  Substitute  Mortgage
Loans, but excluding Deleted Mortgage Loans).

       "Mortgage  Rate":  With respect to each Mortgage Loan, the annual rate at
which  interest  accrues on such  Mortgage Loan (in the absence of a default and
without  giving  effect  to any  Revised  Interest  Rate)  from  time to time in
accordance with the terms of the related  Mortgage Note (as such may be modified
at any time  following  the Closing Date) and  applicable  law,  which  Mortgage
Rates, as of the Closing Date, are as set forth in the Mortgage Loan Schedule.


                                       26
<PAGE>


      "Mortgaged  Property":  The underlying  property securing a Mortgage Loan,
including any REO Property,  consisting of a fee simple or leasehold estate in a
parcel of land improved by a commercial or multifamily  property,  together with
any personal property,  fixtures, leases and other property or rights pertaining
thereto.

     "MSDWMC":  Morgan  Stanley Dean Witter  Mortgage  Capital  Inc., a New York
corporation.

     "Net Aggregate Prepayment/Balloon Payment Interest Shortfall": With respect
to any Distribution  Date, the amount, if any, by which (a) the aggregate of all
Prepayment/Balloon  Payment Interest  Shortfalls incurred in connection with the
receipt of  Principal  Prepayments  or Balloon  Payments on the  Mortgage  Loans
during the related Collection  Period,  exceeds (b) the sum of (i) the aggregate
of all Prepayment/Balloon  Payment Interest Excesses realized in connection with
the receipt of Principal  Prepayments or Balloon  Payments on the Mortgage Loans
during the related Collection Period, and (ii) the Compensating Interest Payment
deposited  by  the  Master  Servicer  in  the  Distribution   Account  for  such
Distribution   Date   pursuant  to  Section   3.25  in   connection   with  such
Prepayment/Balloon Payment Interest Shortfalls.

     "Net  Collections":  With respect to any Corrected Mortgage Loan, an amount
equal to all payments on account of interest and principal on such Mortgage Loan
and all Prepayment Premiums.

     "Net Liquidation  Proceeds":  The excess of Liquidation  Proceeds  received
with  respect  to any  Mortgage  Loan over the  amount of  Liquidation  Expenses
incurred with respect thereto.

     "Net Mortgage  Rate":  With respect to any Mortgage Loan, the Mortgage Rate
for such Mortgage Loan minus the Master  Servicer Fee Rate, the Standby  Special
Servicer Fee Rate and the Trustee Fee Rate.

     "Net REO  Proceeds":  With respect to each REO Property,  REO Proceeds with
respect to such REO Property net of any insurance premiums,  taxes,  assessments
and other costs and expenses  permitted to be paid therefrom pursuant to Section
3.17(b).

     "New Lease":  Any lease of REO Property entered into on behalf of the Trust
Fund, including any lease renewed or extended on behalf of the Trust Fund if the
Trust Fund has the right to renegotiate the terms of such lease.

     "New York Presenting Office":  Any office of an agent of the Trustee or the
Certificate  Registrar,  located in New York,  New York,  as the  Trustee or the
Certificate  Registrar,  as the case may be, may designate  from time to time by
written notice to the Depositor and the Certificateholders.

     "Noneconomic  Residual  Interest":  means  a  Residual  Interest  that is a
"noneconomic  residual  interest"  within  the  meaning of  Treasury  Regulation
Section 1.860E-1(c).

     "Nonrecoverable  Advance": Any portion of an Advance proposed to be made or
previously  made  which  has  not  been  previously  reimbursed  to the  Special
Servicer,  the Master Servicer,  the Trustee or the Fiscal Agent, as applicable,
and which the Special Servicer,  the Master Servicer,  the Trustee or the Fiscal
Agent has determined (based on, among other things,


                                       27
<PAGE>


an Updated  Appraisal) in its good faith  business  judgment will not or, in the
case of a proposed Advance,  would not, be ultimately recoverable by the Special
Servicer,  the Master Servicer,  the Trustee or the Fiscal Agent, as applicable,
from  late  payments,   Insurance  Proceeds,   Liquidation  Proceeds  and  other
collections on or in respect of the related Mortgage Loan or Mortgaged Property.
To the extent that any Borrower is not obligated under the related Mortgage Loan
Documents to pay or reimburse any portion of any Advances  that are  outstanding
with respect to the related  Mortgage Loan as a result of a modification of such
Mortgage Loan by the Special  Servicer which forgives unpaid Monthly Payments or
other amounts which the Special  Servicer,  the Master Servicer,  the Trustee or
the Fiscal Agent had previously advanced,  and the Special Servicer,  the Master
Servicer,  the Trustee or the Fiscal  Agent  determines  that no other source of
payment or  reimbursement  for such  advances is available to it, such  Advances
shall be deemed to be nonrecoverable; provided, however, that in connection with
the  foregoing the Special  Servicer,  the Master  Servicer,  the Trustee or the
Fiscal Agent,  shall provide an Officer's  Certificate as described  below.  The
determination by the Special Servicer,  the Master Servicer,  the Trustee or the
Fiscal Agent, as applicable,  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,  Responsible  Officer or
Vice  President or equivalent  or senior  officer of the Special  Servicer,  the
Master  Servicer,  Trustee or Fiscal  Agent,  as  appropriate,  delivered to the
Master  Servicer,  the Trustee,  the Fiscal  Agent,  the Special  Servicer,  the
Operating  Adviser and the Depositor  setting forth such  determination  and the
procedures and considerations of the Special Servicer,  the Master Servicer, the
Trustee  or  the  Fiscal  Agent,  as  applicable,  forming  the  basis  of  such
determination, which shall include a copy of the Updated Appraisal and any other
information or reports  obtained by the Special  Servicer,  the Master Servicer,
the Trustee or the Fiscal Agent,  such as property  operating  statements,  rent
rolls,  property inspection reports and engineering  reports,  which may support
such determinations. Notwithstanding the above, the Trustee and the Fiscal Agent
shall be entitled to rely upon any determination by the Master Servicer that any
Advance  previously  made  is a  Nonrecoverable  Advance  or that  any  proposed
Advance,  if made,  would  constitute  a  Nonrecoverable  Advance and the Master
Servicer  shall be  entitled  to rely  upon  any  determination  by the  Special
Servicer that any Emergency Advance previously made is a Nonrecoverable  Advance
or  that  any  proposed   Emergency   Advance,   if  made,  would  constitute  a
Nonrecoverable Advance.

     "Non-U.S.  Person":  A person  that is not (i) a citizen or resident of the
United  States;  (ii) a  corporation,  partnership,  or other entity  created or
organized in or under the laws of the United States or any political subdivision
thereof; (iii) an estate whose income is subject to United States federal income
tax regardless of its sources; or (iv) a trust whose income is subject to United
States  federal  income tax  regardless  of its  sources and as to which a court
within the  United  States is able to  exercise  primary  jurisdiction  over the
administration  of the trust and one or more U.S.  Persons have the authority to
control all substantial decisions of the trust.

     "Note":  With respect to any Mortgage Loan as of any date of determination,
the note or other  evidence of  indebtedness  and/or  agreements  evidencing the
indebtedness  of the related  Borrower or obligor under such  Mortgage  Loan, in
each  case,  including  any  amendments  or  modifications,  or any  renewal  or
substitution notes, as of such date.

     "Notional Amount": With respect to: (i) all of the Class X Certificates (a)
on or prior to the first  Distribution  Date,  an amount equal to the  aggregate
initial Uncertificated  Principal Balance of the REMIC II Regular Interests,  as
specified in the Preliminary Statement hereto, and


                                       28
<PAGE>


(b) as of any date of  determination  after the  first  Distribution  Date,  the
aggregate  Uncertificated Principal Balance of the REMIC II Regular Interests on
the Distribution  Date immediately  prior to such date of  determination,  after
application  of the  distributions  deemed made thereon,  and  allocation of the
Realized  Losses  and  Expense  Losses  deemed  made  thereto,   on  such  prior
Distribution  Date  and  (ii)  any  Class  X  Certificate,  the  product  of the
Percentage  Interest  evidenced by such  Certificate and the Notional Amount for
all of the Class X Certificates as of such date of determination.

     "Officer's Certificate": A certificate signed by the Chairman of the Board,
the Vice Chairman of the Board, the Chief Executive  Officer,  the President,  a
Vice President (however denominated),  the Treasurer,  the Secretary, one of the
Assistant Treasurers or Assistant Secretaries or any other officer of the Master
Servicer or Special Servicer  customarily  performing functions similar to those
performed  by any of the above  designated  officers  and also with respect to a
particular  matter, any other officer to whom such matter is referred because of
such officer's  knowledge of and familiarity  with the particular  subject,  and
delivered  to the  Depositor,  the Trustee,  the Special  Servicer or the Master
Servicer, as the case may be.

     "Operating Adviser": As defined in Section 3.26.

     "Opinion  of  Counsel":  A written  opinion of  counsel,  who may,  without
limitation,  be counsel for the  Depositor,  the Special  Servicer or the Master
Servicer, as the case may be, acceptable to the Trustee, except that any opinion
of counsel relating to (a)  qualification of REMIC I, REMIC II or REMIC III as a
REMIC or the  imposition  of tax  under the REMIC  Provisions  on any  income or
property  of any REMIC,  (b)  compliance  with the REMIC  Provisions  (including
application of the definition of "Independent Contractor"), (c) qualification of
the  Grantor  Trust as a  grantor  trust,  or (d) a  resignation  of the  Master
Servicer or the Special Servicer  pursuant to Section 6.4, must be an opinion of
counsel who is Independent of the Depositor, the Special Servicer and the Master
Servicer.

     "Optional  Termination  Notice  Date":  Any date as of which the  aggregate
Stated Principal Balance of the Mortgage Loans (including,  without  limitation,
any REO  Mortgage  Loans)  is less  than 1% of the  aggregate  Stated  Principal
Balance of the Mortgage Loans as of the Cut-off Date.

     "Originator":  With  respect to a Mortgage  Loan,  the  originator  of such
Mortgage Loan.

     "Ownership  Interest":  As to any  Certificate,  any  ownership or security
interest  in such  Certificate  as the  Holder  thereof  and any other  interest
therein,  whether  direct  or  indirect,  legal  or  beneficial,  as owner or as
pledgee.

     "Owner Trust Loans":  The Mortgage Loans transferred and assigned to MSDWMC
pursuant  to the Midland  Owner  Trust  Certificate  Purchase  Agreement,  which
Mortgage Loans were  subsequently  transferred  and assigned to the Depositor by
MSDWMC on the Closing  Date  pursuant to the  Mortgage  Loan  Purchase  and Sale
Agreement dated June 15, 2000 between MSDWMC and the Depositor  relating to such
Mortgage Loans.

     "P&I  Advance":  As to any  Mortgage  Loan,  any advance made by the Master
Servicer,  the Trustee,  or the Fiscal Agent pursuant to Section  4.5(b)(iii) or
4.5(d).

                                       29

<PAGE>


     "Pass-Through   Rate"  or  "Pass-Through   Rates":   With  respect  to  any
Distribution  Date and any of the Class A-1,  Class A-2, Class B, Class C, Class
D, Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class
N and Class O  Certificates,  a per annum  rate equal to the  Adjusted  REMIC II
Remittance Rate for the related REMIC II Regular  Interest.  With respect to the
Class X Certificates and any Distribution  Date, the excess,  if any, of (i) the
weighted   average  of  the  respective  REMIC  II  Remittance  Rates  for  such
Distribution Date in respect of all of the REMIC II Regular Interests, over (ii)
the weighted  average of the respective  Adjusted REMIC II Remittance  Rates for
such  Distribution Date in respect of all of the REMIC II Regular Interests (for
purposes  of the  foregoing,  the  relevant  weighting  shall  be  based  on the
Uncertificated  Principal Balance of each REMIC II Regular Interest  immediately
prior to the  subject  Distribution  Date).  The  Class V  Certificates  and the
Residual Certificates do not have Pass-Through Rates.

     "Paying Agent": The paying agent appointed pursuant to Section 5.5.

     "Percentage   Interest":   (i)  With  respect  to  any  REMIC  III  Regular
Certificate,  the portion of the relevant Class  evidenced by such  Certificate,
expressed as a percentage,  the numerator of which is the Certificate Balance or
the Notional  Amount,  as the case may be, of such Certificate as of the Closing
Date,  as specified on the face  thereof,  and the  denominator  of which is the
initial aggregate  Certificate Balance or the initial aggregate Notional Amount,
as the case may be, of the relevant  Class as of the Closing Date; and (ii) with
respect  to  the  Class  V  Certificates  and  the  Residual  Certificates,  the
percentage  interest in  distributions  to be made with  respect to the relevant
Class, as stated on the face of such Certificate.

     "Permitted  Investments":  Any one or more of the following  obligations or
securities  payable on demand or having a  scheduled  maturity  on or before the
Business  Day  preceding  the date on which such funds are required to be drawn,
regardless of whether issued by the Depositor,  the Master Servicer, the Special
Servicer, the Trustee or any of their respective  Affiliates,  and having at all
times the required ratings,  if any,  provided for in this definition  (provided
that no Permitted Investment,  if downgraded,  shall be required to be sold at a
loss,  except if the remaining term to maturity at the time of such  downgrading
is  greater  than 30  days),  unless  Rating  Agency  Confirmation  (the cost of
obtaining any such Rating Agency Confirmation shall be paid by the party seeking
such confirmation) is received with respect to a lower rating:

               (i) direct  obligations of, or obligations  guaranteed as to full
and timely payment of principal and interest by, the United States or any agency
or  instrumentality  thereof,  provided that such  obligations are backed by the
full  faith and  credit of the  United  States of  America,  including,  without
limitation, U.S. Treasury Obligations,  Farmers Home Administration certificates
of  beneficial   interest,   General   Services   Administration   participation
certificates  and  Small  Business   Administration   guaranteed   participation
certificates or guaranteed pool certificates;

               (ii) direct  obligations of FHLMC (debt  obligations  only), FNMA
(debt obligations only), the Federal Farm Credit System (consolidated systemwide
bonds  and  notes  only),  the  Federal  Home  Loan  Banks   (consolidated  debt
obligations  only),  the Student Loan Marketing  Association  (debt  obligations
only),  the  Financing  Corp.  (consolidated  debt  obligations  only),  and the
Resolution Funding Corp. (debt obligations only);

               (iii) Federal funds, time deposits in, or certificates of deposit
of, or bankers' acceptances, or repurchase obligations, all having maturities of
not more than 365 days,


                                       30
<PAGE>


issued by, any bank or trust  company,  savings and loan  association or savings
bank,  depository  institution  or  trust  company  having  a  short  term  debt
obligation rating that is in the highest short-term unsecured rating category of
each Rating Agency;

               (iv)  commercial  paper  having  a  maturity  of 365 days or less
(including   (A)   both    non-interest-bearing    discount    obligations   and
interest-bearing  obligations  payable on demand or on a specified date not more
than one year  after the date of  issuance  thereof  and (B)  demand  notes that
constitute  vehicles for  investment in commercial  paper) that is rated by each
Rating Agency in its highest short-term unsecured rating category;

               (v) shares of taxable  money  market  funds or mutual  funds that
seek to maintain a constant  net asset value and have been rated AAA by Fitch or
Aaa by Moody's;

               (vi) if each of the Rating  Agencies  has issued a Rating  Agency
Confirmation  to the Trustee with  respect to the holding of such demand,  money
market or time deposit,  demand obligation or any other obligation,  security or
investment, any other demand, money market or time deposit, demand obligation or
any other  obligation,  security or  investment,  as may be  acceptable  to each
Rating  Agency as a permitted  investment  of funds  backing  securities  having
ratings  equivalent  to its  initial  rating  of the  Class  A-1 and  Class  A-2
Certificates; and

               (vii)  such  other   obligations   for  which  a  Rating   Agency
Confirmation has been obtained;

provided,  however,  that (a) except with respect to units of money market funds
pursuant to clause (v) above,  each such  obligation  or  security  shall have a
fixed dollar  amount of principal  due at maturity  which cannot vary or change;
and (b) except with respect to units of money  market  funds  pursuant to clause
(v) above,  if any such  obligation or security  provides for a variable rate of
interest,  interest shall be tied to a single  interest rate index plus a single
fixed spread (if any) and move  proportionately  with that index;  and provided,
further,  however,  that such  instrument  continues  to qualify as a "cash flow
investment"  pursuant to Code Section 860G(a)(6) earning a passive return in the
nature of  interest  and that no  instrument  or  security  shall be a Permitted
Investment if (i) such instrument or security  evidences a right to receive only
interest  payments,  (ii) the right to receive  principal and interest  payments
derived from the underlying investment provides a yield to maturity in excess of
120% of the yield to maturity  at par of such  underlying  investment  as of the
date of its  acquisition;  or (iii) may be purchased at a price greater than par
if such  investment  may be prepaid or called at a price less than its  purchase
price prior to stated maturity.

     "Permitted  Transferee":  With respect to a Class R-I,  Class R-II or Class
R-III Certificate, any Person or agent thereof that is a Qualified Institutional
Buyer  other  than (a) a  Disqualified  Organization  or (b) a Person  that is a
Disqualified Non-U.S. Person.

     "Person":   Any  individual,   corporation,   limited  liability   company,
partnership,  joint venture,  association,  joint-stock company,  trust, estate,
unincorporated organization or government or any agency or political subdivision
thereof.

     "Phase I Environmental Assessment": A "Phase I environmental assessment" as
described  in and  meeting  the  criteria  of the  American  Society  of Testing
Materials  Standard E 1527-94 or any successor thereto published by the American
Society of Testing Materials.


                                       31
<PAGE>


     "Placement Agents": Morgan Stanley & Co. Incorporated, PNC Capital Markets,
Inc. and CIBC World Markets Corp. or any of their successors in interest.

     "Plan": As defined in Section 5.2(i).

     "Prepayment  Assumption":  A CPR of 0% (except that each Hyper-Amortization
Loan is assumed to pay on its Hyper-Amortization Date), applied to each Mortgage
Loan during any period that the related  Borrower is permitted to make voluntary
Principal  Prepayments  without a Prepayment  Premium,  used for determining the
accrual of original issue discount,  market discount and premium, if any, on the
REMIC I Regular  Interests,  the  REMIC II  Regular  Interests  or the REMIC III
Regular Certificates for federal income tax purposes.

     "Prepayment/Balloon   Payment  Interest   Excess":   With  respect  to  any
Distribution  Date and any Mortgage  Loan as to which a Principal  Prepayment or
Balloon Payment was made by the related  Borrower during the related  Collection
Period but following the Due Date occurring in such  Collection  Period in which
the related Principal Prepayment or Balloon Payment had been made, the amount of
interest  accrued  and  received  from the  related  Borrower  (less the  Master
Servicer Fee) for the period following such Due Date.

     "Prepayment/Balloon  Payment  Interest  Shortfall":  With  respect  to  any
Distribution  Date and any Mortgage  Loan as to which a Principal  Prepayment or
Balloon Payment was made by the related  Borrower during the related  Collection
Period but prior to the Due Date occurring in such Collection Period, the amount
by which (i) one month's  interest  (other than  Default  Interest  and Deferred
Interest and net of the Master Servicer Fee) on the Stated Principal  Balance of
such Mortgage Loan outstanding  immediately  following the Distribution  Date in
such  Collection  Period  exceeds (ii) the amount of interest (net of the Master
Servicer  Fee)  received  from the related  Borrower in respect of such Mortgage
Loan during such Collection  Period  (without regard to any Prepayment  Premium,
Default Interest or Deferred Interest that may have been collected).

     "Prepayment Premium": Payments received on a Mortgage Loan as the result of
a  Principal  Prepayment  thereon,  not  otherwise  due  thereon  in  respect of
principal or interest, which are intended to be a disincentive to prepayment.

     "Primary  Servicing  Fees":  The monthly fee payable by the Master Servicer
from the Master  Servicer Fee to each Initial  Sub-Servicer,  which  monthly fee
accrues at the rate per annum specified as such in the  sub-servicing  agreement
with such Initial Sub-Servicer.

     "Principal   Balance   Certificates":   All  of  the  REMIC   III   Regular
Certificates, excluding the Class X Certificates.

     "Principal  Distribution  Amount": For any Distribution Date, the aggregate
of (i) the Current Principal Distribution Amount for such Distribution Date, and
(ii) if such Distribution Date is subsequent to the initial  Distribution  Date,
the  excess,  if any, of the  Principal  Distribution  Amount for the  preceding
Distribution  Date,  over the aggregate  distributions  of principal made on the
Principal Balance Certificates in respect of such Principal  Distribution Amount
on the preceding Distribution Date.


                                       32
<PAGE>


     "Principal  Prepayment":  With respect to any Mortgage Loan, any payment of
principal  made by the  related  Borrower  which is  received  in advance of its
scheduled  Due Date and  which  is not  accompanied  by an  amount  of  interest
representing  the full amount of scheduled  interest due on any date or dates in
any month or months subsequent to the month of prepayment.

     "Privately  Placed  Certificates":  The Class X  Certificates,  the Class F
Certificates,  the Class G Certificates,  the Class H Certificates,  the Class J
Certificates,  the Class K Certificates,  the Class L Certificates,  the Class M
Certificates,  the Class N Certificates,  the Class O Certificates,  the Class V
Certificates,  the Class R-I  Certificates,  the Class R-II Certificates and the
Class R-III Certificates.

     "Prospectus  Supplement":  The Prospectus  Supplement  dated June 15, 2000,
relating to the Publicly Offered Certificates.

     "Publicly Offered Certificates":  The Class A-1 Certificates, the Class A-2
Certificates,  the Class B Certificates,  the Class C Certificates,  the Class D
Certificates and the Class E Certificates.

     "Qualified Institutional Buyer": A qualified institutional buyer within the
meaning of Rule 144A.

     "Qualified  Insurer":  An insurance  company or security or bonding company
qualified to write the related  insurance  policy in the relevant  jurisdiction,
which shall have a claims paying ability  rating (or in the case of Moody's,  an
insurance financial strength rating) (or the obligations of which are guaranteed
or backed by a company  having such claims  paying  ability  rating or insurance
financial  strength rating, as applicable) of "A" or better by Fitch (or A-IX or
better  by A.M.  Best  Company,  if not  rated by  Fitch)  and "A2" or better by
Moody's,  unless in the case where such insurance company or security or bonding
company is not so rated by such Rating Agency,  Rating Agency  Confirmation  has
been  obtained  from such Rating  Agency with respect to the lower claims paying
ability rating or insurance financial strength rating.

     "Qualified Mortgage": A Mortgage Loan that is a "qualified mortgage" within
the meaning of Section 860G(a)(3) of the Code (but without regard to the rule in
Treasury Regulation Section 1.860G-2(f)(2) that treats a defective obligation as
a qualified mortgage), or any substantially similar successor provision.

     "Qualified Environmental Consultant":  An Independent Person, with at least
five years of relevant experience,  who regularly conducts  environmental audits
for purchasers of commercial  properties located in the same general area as the
Mortgaged Property.

     "Qualified  Substitute  Mortgage  Loan": A mortgage loan  substituted for a
Deleted Mortgage Loan pursuant to the terms of this Agreement which must, on the
date of such  substitution:  (i) have an outstanding  principal  balance,  after
application  of all  scheduled  payments of principal and interest due during or
prior to the  month of  substitution,  not in  excess  of the  Stated  Principal
Balance of the Deleted  Mortgage  Loan as of the Due Date in the calendar  month
during which the  substitution  occurs;  (ii) have a Mortgage Rate not less than
the Mortgage Rate of the Deleted  Mortgage Loan; (iii) have the same Due Date as
the Deleted Mortgage Loan; (iv) accrue interest on the same basis as the Deleted
Mortgage Loan (for example,  on the basis of a 360-day year consisting of twelve
30-day months); (v) have a


                                       33
<PAGE>


remaining term to stated  maturity not greater than, and not more than two years
less than, the remaining term to stated  maturity of the Deleted  Mortgage Loan;
(vi) have an  original  Loan-to-Value  Ratio not higher than that of the Deleted
Mortgage Loan and a current Loan-to-Value Ratio not higher than the then-current
Loan-to-Value Ratio of the Deleted Mortgage Loan; (vii) comply as of the date of
substitution  with all of the  representations  and  warranties set forth in the
applicable Mortgage Loan Purchase Agreement, (viii) have a Phase I Environmental
Assessment  from a Qualified  Environmental  Consultant  relating to the related
Mortgaged  Property in its Master Servicer  Mortgage File; (ix) have an original
debt service  coverage  ratio not lower than the original debt service  coverage
ratio of the Deleted  Mortgage  Loan and have a current  debt  service  coverage
ratio not lower than the then-current debt service coverage ratio of the Deleted
Mortgage Loan; and (x) be determined by an Opinion of Counsel (at the expense of
the  applicable  Seller) to be a  "qualified  replacement  mortgage"  within the
meaning of Section  860G(a)(4) of the Code;  provided that no such mortgage loan
may have a maturity  date after the date three  years  prior to the Rated  Final
Distribution  Date; and provided,  further,  that no such mortgage loan shall be
substituted  for a Deleted  Mortgage Loan unless the Trustee has received Rating
Agency Confirmation (the cost, if any, of obtaining such confirmation to be paid
by the  applicable  Seller) with  respect to such  substitution;  and  provided,
further that no such mortgage loan shall be substituted  for a Deleted  Mortgage
Loan if it would  result in an Adverse  REMIC Event in respect of REMIC I, REMIC
II, or REMIC III or an Adverse Grantor Trust Event;  and provided,  further that
no such mortgage loan shall be  substituted  for a Deleted  Mortgage Loan unless
the Operating Adviser shall have approved of such substitution based upon, among
other  considerations,  an  engineering  report  and  the  Environmental  Report
obtained  with  respect to such  Mortgage  Loan  (provided,  however,  that such
approval  of  the  Operating  Adviser  may  not  be  unreasonably  withheld,  as
determined  by the  Special  Servicer).  In the event that one or more  mortgage
loans are substituted for one or more Deleted  Mortgage Loans,  then the amounts
described in clause (i) shall be determined on the basis of aggregate  principal
balances and the rates  described in clause (ii) above and the remaining term to
stated  maturity  referred  to in clause  (v)  above  shall be  determined  on a
weighted  average  basis.  Whenever  a  Qualified  Substitute  Mortgage  Loan is
substituted for a Deleted  Mortgage Loan pursuant to this Agreement,  the Seller
effecting such  substitution  shall certify that such Mortgage Loan meets all of
the  requirements  of this definition and shall send such  certification  to the
Trustee.

     "Rated Final Distribution Date": The Distribution Date in March, 2033.

     "Rating  Agency":  Each of  Moody's  and  Fitch.  References  herein to the
highest  long-term  senior  unsecured debt rating category of each Rating Agency
shall  mean  "Aaa" with  respect  to  Moody's  and "AAA" with  respect to Fitch.
References  herein  to the  highest  short-term  senior  unsecured  debt  rating
category  of each  Rating  Agency  shall mean "P1" with  respect to Moody's  and
"F-1+" with respect to Fitch.

     "Rating Agency  Confirmation":  With respect to any matter,  where required
under this Agreement,  a written  confirmation from the applicable Rating Agency
that a proposed action, failure to act, or other event specified herein will not
in and of itself  result  in such  Rating  Agency's  withdrawal,  downgrade,  or
qualification of the  then-current  rating assigned to any Class of Certificates
then  rated  by such  Rating  Agency  (the  placing  by  Moody's  of a Class  of
Certificates   on  "negative   credit   watch"  status  shall  be  considered  a
"qualification" by Moody's of a rating).


                                       34
<PAGE>


     "Real  Property":  Land or improvements  thereon such as buildings or other
inherently permanent structures  (including items that are structural components
of such  buildings or  structures),  in each such case as such terms are used in
the REMIC Provisions.

     "Realized  Loss":  (x) With respect to each  defaulted  Mortgage Loan as to
which a Final Recovery  Determination  has been made, or with respect to any REO
Mortgage Loan as to which a Final Recovery Determination has been made as to the
related  REO  Property,  an amount  (not less than zero) equal to (i) the unpaid
principal balance of such Mortgage Loan (or, in the case of an REO Property, the
related REO Mortgage Loan) as of the  commencement  of the Collection  Period in
which the Final  Recovery  Determination  was made,  plus (ii) all  accrued  but
unpaid  interest on such Mortgage Loan (or, in the case of an REO Property,  the
related REO Mortgage Loan) at the related Mortgage Rate to but not including the
Due Date in the Collection Period in which the Final Recovery  Determination was
made, in any event determined  without taking into account the amounts described
in  subclause  (iv)  of this  sentence,  plus  (iii)  any  related  unreimbursed
Servicing  Advances as of the commencement of the Collection Period in which the
Final Recovery  Determination was made,  together with any new related Servicing
Advances made during such Collection Period,  minus (iv) all related Liquidation
Proceeds  (net of any related  Liquidation  Expenses paid  therefrom);  (y) with
respect  to any  Mortgage  Loan  as to  which  any  portion  of the  outstanding
principal or accrued  interest owed thereunder was forgiven in connection with a
bankruptcy  or  similar   proceeding   involving  the  related   Borrower  or  a
modification,  waiver or amendment of such Mortgage Loan granted or agreed to by
the Master Servicer or Special Servicer  pursuant to Section 3.28, the amount of
such principal or interest (other than Default Interest or Deferred Interest) so
forgiven;  and (z) with  respect to any  Mortgage  Loan as to which the Mortgage
Rate thereon has been  permanently  reduced for any period in connection  with a
bankruptcy  or  similar   proceeding   involving  the  related   Borrower  or  a
modification,  waiver or amendment of such Mortgage Loan granted or agreed to by
the Master Servicer or Special Servicer  pursuant to Section 3.28, the amount of
the  consequent  reduction in the interest  portion of each  successive  Monthly
Payment due thereon  (provided,  that each such Realized Loss shall be deemed to
have been incurred on the Due Date for each affected Monthly Payment).

     "Record Date":  With respect to each  Distribution  Date, the last Business
Day of the month preceding the month in which such Distribution Date occurs.

     "Regulation D": Regulation D under the 1933 Act.

     "Related Class of  Certificates"  and "Related REMIC II Regular  Interest":
For any Class of REMIC II Regular  Interest,  the related Class of  Certificates
set forth below and for any Class of Certificates (other than the Class V, Class
X, Class R-I,  Class R-II or Class R-III  Certificates),  the  related  Class of
REMIC II Regular Interests set forth below:


                                       35
<PAGE>





                                                     Related REMIC II
          Related Class of Certificates              Regular Interest

                    Class A-1                      Class A-1-II Interest
                    Class A-2                      Class A-2-II Interest
                    Class B                        Class B-II Interest
                    Class C                        Class C-II Interest
                    Class D                        Class D-II Interest
                    Class E                        Class E-II Interest
                    Class F                        Class F-II Interest
                    Class G                        Class G-II Interest
                    Class H                        Class H-II Interest
                    Class J                        Class J-II Interest
                    Class K                        Class K-II Interest
                    Class L                        Class L-II Interest
                    Class M                        Class M-II Interest
                    Class N                        Class N-II Interest
                    Class O                        Class O-II Interest

     "REMIC": A "real estate mortgage  investment conduit" within the meaning of
Section 860D of the Code.

     "REMIC I": The segregated pool of assets included in the Trust Fund created
hereby and to be  administered  hereunder,  consisting of the Mortgage Loans, as
from time to time are subject to this  Agreement,  the Mortgage  Files  relating
thereto,  all  proceeds of and payments  under such  Mortgage  Loans  (excluding
Deferred  Interest)  received  after the Cut-off  Date,  such amounts in respect
thereof  as  shall  from  time  to  be  held  in  the  Collection  Account,  the
Distribution  Account,  the Interest  Reserve  Account,  the Excess  Liquidation
Proceeds Account and the REO Account, and any REO Properties acquired in respect
of any  Mortgage  Loan,  for which a REMIC  election  is to be made  pursuant to
Section 10.1 hereof. Pursuant to Treasury Regulation Section 1.860D-1(b)(2)(ii),
the Transferable Servicing Interest is not an interest in REMIC I.

     "REMIC I Interests":  Collectively,  the REMIC I Regular  Interests and the
Class R-I Certificates.

     "REMIC I Regular Interest":  With respect to each Mortgage Loan (including,
without  limitation,   each  REO  Mortgage  Loan,  but  excluding  any  Deferred
Interest),  the separate uncertificated interest in REMIC I issued in respect of
such Mortgage Loan hereunder and designated as a "regular  interest" in REMIC I.
Each REMIC I Regular Interest shall represent a right to receive interest at the
related REMIC I Remittance Rate and  distributions of principal,  subject to the
terms  and  conditions  hereof,  in an  aggregate  amount  equal to its  initial
Uncertificated Principal Balance (which shall equal the initial Stated Principal
Balance of the related  Mortgage Loan as of the Cut-off Date).  The  designation
for each  REMIC I Regular  Interest  shall be the Loan  Number  for the  related
Mortgage Loan. If a Qualified  Substitute Mortgage Loan or Loans are substituted
for any Deleted  Mortgage Loan, the REMIC I Regular Interest that related to the
Deleted  Mortgage  Loan shall  thereafter  relate to such  Qualified  Substitute
Mortgage Loan(s).


                                       36
<PAGE>


     "REMIC I Remittance Rate": With respect to any REMIC I Regular Interest for
any  Distribution  Date, a rate per annum equal to the Net Mortgage Rate for the
related  Mortgage Loan  (including  without  limitation  an REO Mortgage  Loan);
provided,  that for purposes of calculating  the REMIC I Remittance Rate for any
REMIC I Regular  Interest,  the Net Mortgage Rate for the related  Mortgage Loan
will be determined without regard to any post-Closing Date modification,  waiver
or amendment of the terms of such Mortgage Loan; and provided further,  that for
purposes of  calculating  the REMIC I Remittance  Rate, if the related  Mortgage
Loan is an Interest Reserve Loan, the Net Mortgage Rate of such Interest Reserve
Loan will be adjusted to an annual rate equal to: (a) a fraction, expressed as a
percentage, the numerator of which is, subject to adjustment as described below,
12 times the  amount  of  interest  that  accrued  (or,  in the  absence  of any
applicable voluntary or involuntary prepayment, would have accrued) with respect
to such Interest Reserve Loan on an Actual/360 Basis during the related Interest
Accrual Period, based on its Stated Principal Balance immediately preceding such
Distribution  Date and its Net Mortgage  Rate as in effect on the Cut-off  Date,
and the  denominator  of which is the Stated  Principal  Balance of the Interest
Reserve Loan immediately prior to such Distribution  Date.  Notwithstanding  the
foregoing, if such Distribution Date occurs during January (except during a leap
year) or February,  then, in the case of any particular  Interest  Reserve Loan,
the numerator of the fraction described in clause (a) above will be decreased by
any Interest  Reserve Amount with respect to that Interest  Reserve Loan that is
transferred  from the Collection  Account to the Interest Reserve Account during
that month. Furthermore, if such Distribution Date occurs during March, then, in
the case of any particular  Interest Reserve Loan, the numerator of the fraction
described in clause (a) above will be increased by any Interest  Reserve Amounts
with  respect  to such  Interest  Reserve  Loan  that are  transferred  from the
Interest Reserve Account to the  Distribution  Account during that month. If any
Mortgage Loan included in the Trust Fund as of the Closing Date is replaced by a
Qualified Substitute Mortgage Loan or Loans, the REMIC I Remittance Rate for the
related REMIC I Regular  Interest  shall still be calculated in accordance  with
the preceding  sentence based on the Net Mortgage Rate for the Deleted  Mortgage
Loan.

     "REMIC II": The segregated pool of assets consisting of the REMIC I Regular
Interests and all distributions  thereon conveyed to the Trustee for the benefit
of REMIC II and for which a separate  REMIC  election is to be made  pursuant to
Section 10.1 hereof.

     "REMIC II Interests":  Collectively, the REMIC II Regular Interests and the
Class R-II Certificates.

     "REMIC II Regular Interest": Any of the uncertificated beneficial interests
in REMIC II issued hereunder and designated as a "regular interest" in REMIC II.
Each REMIC II Regular  Interest shall  represent a right to receive  interest at
the related  REMIC II  Remittance  Rate in effect from time to time and shall be
entitled to  distributions  of  principal,  subject to the terms and  conditions
hereof,  in an aggregate  amount equal to its initial  Uncertificated  Principal
Balance as set forth in the Preliminary  Statement hereto.  The designations for
the  respective  REMIC II  Regular  Interests  are set forth in the  Preliminary
Statement hereto.

     "REMIC II Remittance Rate": With respect to each REMIC II Regular Interest,
a rate per annum equal to the Weighted Average REMIC I Remittance Rate.

     "REMIC III Certificate":  Any Certificate,  other than a Class R-I or Class
R-II Certificate.


                                       37
<PAGE>


     "REMIC III Regular  Certificate":  Any REMIC III Certificate,  other than a
Class R-III Certificate.

     "REMIC Pool":  Each of the three segregated pools of assets designated as a
REMIC pursuant to Section 10.1 hereof.

     "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  (including  any  proposed  regulations  that,  by  virtue  of their
proposed effective date could apply to the REMIC Pools) and rulings  promulgated
thereunder, as the foregoing may be in effect from time to time.

     "Remittance Date": The Business Day preceding each Distribution Date.

     "Rents from Real Property":  With respect to any REO Property, gross income
of the character described in Section 856(d) of the Code, which income,  subject
to the terms and  conditions  of that  Section of the Code in its present  form,
does not include:

          (a) except as provided in Section  856(d)(4)  or (6) of the Code,  any
amount  received or accrued,  directly or  indirectly,  with respect to such REO
Property, if the determination of such amount depends in whole or in part on the
income of profits  derived by any Person from such property  (unless such amount
is a fixed  percentage  or  percentages  of  receipts  or  sales  and  otherwise
constitutes Rents from Real Property);

          (b) any amount received or accrued,  directly or indirectly,  from any
Person if the Trust Fund owns directly or indirectly  (including by attribution)
a 10% or greater interest in such Person  determined in accordance with Sections
856(d)(2)(B) and (d)(5) of the Code;

          (c) any amount  received or  accrued,  directly  or  indirectly,  with
respect to such REO Property if any Person Directly Operates such REO Property;

          (d) any amount charged for services that are not customarily furnished
in  connection  with the rental of property to tenants in buildings of a similar
class in the same  geographic  market as such REO Property within the meaning of
Treasury  Regulation  Section  1.856-4(b)(1)  (whether  or not such  charges are
separately stated); and

          (e) rent  attributable  to  personal  property  unless  such  personal
property is leased under, or in connection  with, the lease of such REO Property
and, for any taxable year of the Trust Fund, such rent is no greater than 15% of
the total rent received or accrued under, or in connection with, the lease.

     "REO Account": As defined in Section 3.17(b).

     "REO Grace Period": As defined in Section 3.17(a).

     "REO Mortgage  Loan":  Any Mortgage Loan as to which the related  Mortgaged
Property has become an REO Property.

     "REO Proceeds":  With respect to any REO Property, all revenues received by
the Special  Servicer with respect to such REO Property  that do not  constitute
Liquidation Proceeds.


                                       38
<PAGE>


     "REO  Property":  A Mortgaged  Property title to which has been acquired by
the Master  Servicer on behalf of the Trust Fund  through  foreclosure,  deed in
lieu of foreclosure or otherwise.

     "Repurchase Price": With respect to any Mortgage Loan to be repurchased, or
any Deleted  Mortgage  Loan to be replaced  by the  substitution  of one or more
Qualified  Substitute  Mortgage Loans,  pursuant to Section 2.3 or any Specially
Serviced  Mortgage  Loan, or the REO Mortgage Loan relating to any REO Property,
to be sold or repurchased pursuant to Section 3.18, an amount, calculated by the
Master Servicer equal to:

          (a) the unpaid  principal  balance of such  Mortgage  Loan (or, in the
case of any REO Property,  the related REO Mortgage Loan) (after  application of
all principal  payments  (including  prepayments)  collected and other principal
amounts  recovered  on such  Mortgage  Loan)  as of the date of  receipt  of the
Repurchase  Price or the date of  substitution,  as the case may be,  hereunder;
plus

          (b) unpaid  interest  accrued on such  Mortgage  Loan or REO  Mortgage
Loan, as  applicable,  at the related  Mortgage Rate (after  application  of all
interest payments  collected and other amounts recovered (and applied to accrued
interest)  on such  Mortgage  Loan) to, but not  including,  the Due Date in the
Collection Period during which the applicable  purchase or substitution  occurs,
excluding any Deferred Interest accrued on such Mortgage Loan; plus

          (c) any  unreimbursed  Servicing  Advances,  all  accrued  and  unpaid
interest on Advances  (including  P&I Advances) at the Advance Rate,  any unpaid
Servicing  Compensation (other than Master Servicer Fees and the Standby Special
Servicer  Fee), a fee payable to the Special  Servicer in the amount of 0.25% of
the unpaid  principal  balance of such  Mortgage  Loan or REO Mortgage Loan (but
only if the Mortgage  Loan is being  repurchased  pursuant to Section  2.3),  as
applicable,  and any unpaid or unreimbursed expenses of the Trust Fund allocable
to such Mortgage Loan or REO Mortgage  Loan,  as  applicable,  as of the date of
receipt of the Repurchase Price or the date of substitution, as the case may be,
hereunder; plus

          (d) in the event that such  Mortgage  Loan or REO  Mortgage  Loan,  as
applicable,  is required to be repurchased or replaced  pursuant to Section 2.3,
expenses  reasonably  incurred  or to be incurred  by the Master  Servicer,  the
Special  Servicer or the Trustee in respect of the breach or defect  giving rise
to the repurchase or replacement obligation,  including any expenses arising out
of the enforcement of the repurchase or replacement obligation.

     "Request for Release": A request for release signed by a Servicing Officer,
substantially in the form of Exhibit E hereto.

     "Required  Appraisal Loan": Any Mortgage Loan (including without limitation
any REO Mortgage Loan) as to which an Appraisal Reduction Event has occurred and
is continuing.

     "Reserve  Accounts":  With respect to any Mortgage Loan,  reserve or escrow
accounts,  if any,  established  pursuant to the related Mortgage Loan Documents
and any Escrow Account. Each Reserve Account shall be an Eligible Account except
to the  extent  precluded  by  applicable  law and  the  related  Mortgage  Loan
Documents.  Any Reserve Account shall be  beneficially  owned for federal income
tax purposes by the Person who is entitled to receive the reinvestment income or
gain thereon in accordance with the related  Mortgage Loan Documents and Section
3.7.


                                       39
<PAGE>


     "Residual Certificate": A Class R-I, Class R-II or Class R-III Certificate.

     "Responsible  Officer":  Any officer of the  Asset-Backed  Securities Trust
Services  Group of the  Trustee  (and,  in the  event  that the  Trustee  is the
Certificate  Registrar  or the  Paying  Agent,  an  officer  of the  Certificate
Registrar or the Paying Agent,  as applicable)  assigned to the Corporate  Trust
Office with direct  responsibility  for the administration of this Agreement and
also,  with respect to a particular  matter,  any other  officer or any employee
with  responsibilities  similar  to  those  of an  officer  of the  Asset-Backed
Securities  Trust  Services Group of the Trustee to whom such matter is referred
because of such officer's or employee's  knowledge of and  familiarity  with the
particular subject, and, in the case of any certification  required to be signed
by a Responsible  Officer,  such an officer or employee  whose name and specimen
signature appears on a list of corporate trust officers and employees  furnished
to the Master  Servicer  by the  Trustee,  as such list may from time to time be
amended.

     "Review  Threshold":  A Mortgage  Loan  having one of the then ten  largest
current  outstanding  principal  balances of all Mortgage  Loans in the Mortgage
Pool. For this purpose, all  Cross-Collateralized  Loans in a Cross-Collaterized
Group and groups of Mortgage Loans with the same or affiliated Borrowers will be
aggregated and treated as one.

     "Revised   Interest   Rate":   Any   increased   Mortgage   Rate   after  a
Hyper-Amortization Date.

     "RFC": Residential Funding Corporation, a Delaware corporation.

     "RFC Loans":  The  Mortgage  Loans  transferred  and assigned by RFC to the
Depositor pursuant to the RFC Mortgage Loan Purchase Agreement.

     "RFC Mortgage Loan Purchase Agreement": The Mortgage Loan Purchase and Sale
Agreement dated as of June 15, 2000 between the Depositor and RFC.

     "Rule 144A": Rule 144A, under the 1933 Act.

     "Scheduled  Final  Distribution   Date":  With  respect  to  any  Class  of
Certificates,  the Distribution Date on which the aggregate  Certificate Balance
or aggregate  Notional Amount, as the case may be, of such Class of Certificates
would be reduced to zero based on the Prepayment  Assumption.  Such Distribution
Date shall in each case be as follows:


                                       40
<PAGE>



                                                    Scheduled
             Class Designation               Final Distribution Date

                 Class A-1                          June 2008
                 Class A-2                        February 2010
                 Class X                            March 2020
                 Class B                            March 2010
                 Class C                            March 2010
                 Class D                            March 2010
                 Class E                            April 2010
                 Class F                            April 2010
                 Class G                            April 2010
                 Class H                            April 2010
                 Class J                             May 2010
                 Class K                            April 2012
                 Class L                           October 2013
                 Class M                           January 2015
                 Class N                             May 2016
                 Class O                            March 2020

The Class V, Class R-I,  Class R-II and Class R-III  Certificates  do not have a
Scheduled Final Distribution Date.

     "Securities  Depository":  The Depository  Trust Company,  or any successor
Securities  Depository  hereafter named.  The nominee of the initial  Securities
Depository,  for  purposes  of  registering  those  Certificates  that are to be
Book-Entry  Certificates,  is Cede & Co. The Securities  Depository shall at all
times be a "clearing  corporation" as defined in Section 8-102(3) of the Uniform
Commercial  Code of the  State of New York and a  "clearing  agency"  registered
pursuant to the provisions of Section 17A of the 1934 Act.

     "Securities  Depository  Participant":  A  broker,  dealer,  bank or  other
financial  institution or other Person for whom from time to time the Securities
Depository effects book-entry transfers and pledges of securities deposited with
the Securities Depository.

     "Seller":  With respect to the Midland Loans,  Midland; with respect to the
RFC Loans, RFC; and with respect to the CIBC Loans, CIBC.

     "Senior Certificates": The Class A-1, Class A-2 and Class X Certificates.

     "Servicer  Remittance  Report": A report prepared by the Master Servicer in
such media and in CMSA IRP  format  (but  excluding  the Bond Level File and the
Collateral  Summary  File) as may be agreed upon by the Master  Servicer and the
Trustee containing such information  regarding the Mortgage Loans as will permit
the Trustee to calculate the amounts to be  distributed  pursuant to Section 4.3
and to furnish  statements  to  Certificateholders  pursuant  to Section 4.4 and
containing  such  additional  information as the Master Servicer and the Trustee
may from time to time agree.

     "Servicing  Advance":  As to any  Mortgage  Loan,  any advance  made by the
Master  Servicer,  the  Trustee  or the  Fiscal  Agent in  respect  of costs and
expenses incurred pursuant to


                                       41
<PAGE>


Section 3.9,  Section 3.10,  Section 3.17,  Section 3.23 and Section 3.28 or any
expenses incurred to protect and preserve the security for such Mortgage Loan or
taxes and assessments or insurance  premiums,  pursuant to Section 3.4,  Section
3.8 or  Section  3.22,  as  applicable,  or any other  item  designated  as such
hereunder.

     "Servicing  Compensation":  With respect to each Mortgage  Loan, the Master
Servicer  Fee, the Standby  Special  Servicer  Fee and the Special  Servicer Fee
which  shall  be due  to the  Master  Servicer  and  the  Special  Servicer,  as
applicable,  and such other  compensation  of the Master  Servicer  and  Special
Servicer specified in Section 3.12 (including,  without limitation,  Disposition
Fees and Workout Fees), as adjusted pursuant to Section 3.25.

     "Servicing Officer":  Any officer or employee of the Master Servicer or the
Special  Servicer  involved  in, or  responsible  for,  the  administration  and
servicing of the Mortgage  Loans or this  Agreement and also,  with respect to a
particular  matter, any other officer to whom such matter is referred because of
such officer's knowledge of and familiarity with the particular subject, and, in
the case of any certification required to be signed by a Servicing Officer, such
an officer  whose name and  specimen  signature  appears on a list of  servicing
officers  furnished  to  the  Trustee  by the  Master  Servicer  or the  Special
Servicer, as applicable, as such list may from time to time be amended.

     "Servicing Standard":  The standards for the conduct of the Master Servicer
and the Special  Servicer in the  performance  of their  respective  obligations
under this Agreement as set forth in Section 3.1(a).

     "Similar Law": As defined in Section 5.2(i).

     "Single  Purpose  Entity":  Any  Person,  other than an  individual,  whose
organizational  documents provide that: (1) such Person is formed solely for the
purpose of owning and holding  United States  Treasury  obligations  required or
permitted to be pledged in lieu of prepayment in accordance  with the defeasance
provisions of one or more Mortgage Loan as provided in Section 3.28(f); (2) such
Person (a) does not engage in any business  unrelated  to such  property and the
financing thereof;  (b) does not have any assets other than those related to its
interest  in the  United  States  Treasury  obligations  pledged  as  defeasance
collateral;  (c)  maintains its own books,  records and  accounts,  in each case
which are separate  and apart from the books,  records and accounts of any other
person;  (d)  conducts  business in its own name and uses  separate  stationary,
invoices and checks;  (e) does not guarantee or assume the debts or  obligations
of any other  person;  (f) does not  commingle its assets or funds with those of
any other  person;  (g) transacts  business  with  affiliates on an arm's length
basis pursuant to written agreements;  and (h) holds itself out as being a legal
entity,  separate and apart from any other Person; (3) such documents may not be
amended with respect to the Single  Purpose Entity  requirements  while it holds
any of the  defeasance  collateral;  and (4) any  dissolution  or  winding up or
insolvency filing for such entity requires the unanimous consent of all partners
or members, as applicable.

     "Special  Servicer":  GMAC Commercial  Mortgage  Corporation,  a California
corporation,  or its successor in interest,  or any successor  special  servicer
appointed as herein provided.

     "Special  Servicer Fee":  With respect to any Specially  Serviced  Mortgage
Loan or REO Mortgage Loan and for any Distribution  Date, an amount per calendar
month  equal to the product of (i) the  Special  Servicer  Fee Rate and (ii) the
Stated Principal Balance of such


                                       42
<PAGE>


Specially Serviced Mortgage Loan or REO Mortgage Loan, as applicable,  as of the
Due Date in the  month  preceding  the  month in which  such  Distribution  Date
occurs.

     "Special  Servicer Fee Rate": A rate equal to .25% per annum,  such rate to
be calculated on the same basis as the related Mortgage Rate (e.g.  "Actual/360"
or "30/360").

     "Specially  Serviced Mortgage Loan":  Subject to Section 3.24, any Mortgage
Loan with respect to which:

          (a) the related Borrower is 60 or more days delinquent (without giving
effect to any grace period  permitted  by the related  Note) in the payment of a
Monthly Payment or other obligation  (regardless of whether, in respect thereof,
P&I Advances have been reimbursed);

          (b) such Borrower has expressed to the Master Servicer an inability to
pay or a hardship in paying such Mortgage Loan in accordance with its terms;

          (c) the Master  Servicer or the Special  Servicer has received  notice
that such  Borrower  has become the  subject of any  bankruptcy,  insolvency  or
similar  proceeding,  admitted in writing the inability to pay its debts as they
come due or made an assignment for the benefit of creditors;

          (d) the  Master  Servicer  has  received  notice of a  foreclosure  or
threatened foreclosure of any lien on the related Mortgaged Property;

          (e) a default,  of which the Master  Servicer or the Special  Servicer
has notice  (other than a failure by such Borrower to pay principal or interest)
and which in the sole judgment of the Master  Servicer or the Special  Servicer,
as  applicable,   materially   and  adversely   affects  the  interests  of  the
Certificateholders,  has  occurred and remained  unremedied  for the  applicable
grace  period  specified  in such  Mortgage  Loan  (or,  if no grace  period  is
specified,  60 days);  provided,  however,  that a default requiring a Servicing
Advance shall be deemed to materially and adversely  affect the interests of the
Certificateholders for purposes of this definition;

          (f) such Borrower has failed to make a Balloon Payment as and when due
(except where either (i) the Master  Servicer and the Special  Servicer agree in
writing  that such  Mortgage  Loan is  likely to be paid in full  within 30 days
after such default or (ii) on or before the date of such default,  such Borrower
has delivered to the Master  Servicer a firm commitment to refinance the related
Mortgage Loan within sixty days of such default); or

          (g) the Master  Servicer  proposes  to commence  foreclosure  or other
workout arrangements.

     A Mortgage Loan will cease to be a Specially Serviced Mortgage Loan:

          (i) with respect to the circumstances  described in clause (a) and (f)
above,  when the related  Borrower has brought such  Mortgage Loan current (with
respect to the  circumstances  described in clause (f),  pursuant to any workout
implemented by the Special  Servicer) and thereafter made three consecutive full
and timely Monthly Payments;

          (ii) with  respect to the  circumstances  described in clauses (b) and
(d)  above,  when  such  circumstances  cease to exist  in the  good  faith  and
reasonable   judgment  of  the  Special  Servicer,   and  with  respect  to  the
circumstances described in clauses (c) and (g), when such circumstances cease to
exist; or


                                       43
<PAGE>


          (iii) with respect to the circumstances described in clause (e) above,
when such default is cured;

provided,  however, in each case that at the time no circumstance  identified in
clauses  (a) through (g) above  exists  that would  cause the  Mortgage  Loan to
continue to be characterized as a Specially Serviced Mortgage Loan.

     "Standby  Special Servicer Fee": With respect to each Mortgage Loan and for
any Distribution  Date, an amount per calendar month equal to the product of (i)
the Standby Special Servicer Fee Rate and (ii) the Stated  Principal  Balance of
such  Mortgage  Loan as of the Due  Date in the  calendar  month  preceding  the
calendar  month in which such  Distribution  Date  occurs (or in the case of the
initial Distribution Date, as of the Cut-off Date).

     "Standby Special Servicer Fee Rate": A rate equal to 0.005% per annum, such
rate to be  calculated  on the same basis as the  related  Mortgage  Rate (e.g.,
"Actual/360" or "30/360").

     "Startup Day": The day designated as such pursuant to Section 10.1(c).

     "Stated Maturity Date":  With respect to any Mortgage Loan, the Due Date on
which the last payment of  principal  is due and payable  under the terms of the
related  Mortgage Note as in effect on the Closing Date,  without  regard to any
change in or  modification  of such terms in  connection  with a  bankruptcy  or
similar proceeding  involving the related Borrower or a modification,  waiver or
amendment of such Mortgage  Loan granted or agreed to by the Master  Servicer or
Special Servicer pursuant to Section 3.28.

     "Stated Principal Balance":  As of any date of determination,  with respect
to any Mortgage Loan  (including  without  limitation any REO Mortgage Loan), an
amount equal to (a) the unpaid principal balance of such Mortgage Loan as of the
Cut-off Date (or, in the case of a Qualified Substitute Mortgage Loan, as of the
related  date of  substitution),  after  application  of all  payments due on or
before such date, whether or not received,  reduced on a permanent basis on each
subsequent  Distribution  Date (to not less than zero) by (b) the sum of (i) all
payments  (or P&I  Advances  in lieu  thereof)  of,  and all  other  collections
allocated  as provided in Section 1.2 to,  principal  of or with respect to such
Mortgage Loan that are (or, if they had not been applied to cover any Additional
Trust Fund Expense,  would have been) distributed to  Certificateholders on such
Distribution  Date, and (ii) the principal portion of any Realized Loss incurred
in respect of such Mortgage Loan during the related Collection Period;  provided
that, notwithstanding the foregoing, if a Liquidation Event occurs in respect of
such Mortgage  Loan (or any related REO  Property),  then the "Stated  Principal
Balance" of such Mortgage Loan shall be zero  commencing as of the  Distribution
Date in the Collection Period next following the Collection Period in which such
Liquidation Event occurred.

     "Subordinate Certificates":  Any one or more of the Class B, Class C, Class
D, Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class
N and Class O Certificates.

     "Sub-Servicer":  Any person  with which the Master  Servicer or the Special
Servicer has entered into a  Sub-Servicing  Agreement,  which shall  include any
Initial Sub-Servicer.

     "Sub-Servicing Agreement": The written contract between the Master Servicer
or  the  Special  Servicer  and  any  Sub-Servicer  relating  to  servicing  and
administration of Mortgage


                                       44
<PAGE>


Loans as  provided  in  Section  3.2,  which  shall  include  any  sub-servicing
agreement with an Initial Sub-Servicer.

     "Substitution Shortfall Amount": In connection with the substitution of one
or more Qualified  Substitute  Mortgage  Loans for one or more Deleted  Mortgage
Loans, the amount, if any, by which the Repurchase Price or aggregate Repurchase
Price, as the case may be, for such Deleted  Mortgage  Loan(s) as of the date of
substitution  exceeds the Stated Principal Balance or aggregate Stated Principal
Balance, as the case may be, of such Qualified Substitute Mortgage Loan(s) as of
the date of substitution.

     "Tax Returns":  The federal  income tax return on IRS Form 1066,  U.S. Real
Estate  Mortgage  Investment  Conduit  Income Tax Return,  including  Schedule Q
thereto,  Quarterly Notice to Residual  Interest Holders of REMIC Taxable Income
or Net Loss Allocation, or any successor forms, to be filed on behalf of each of
REMIC I, REMIC II and REMIC III under the REMIC  Provisions,  together  with any
and all  other  information,  reports  or  returns  that may be  required  to be
furnished  to the  Certificateholders  or  filed  with  the  IRS  or  any  other
governmental taxing authority under any applicable provisions of federal,  state
or local tax laws.

     "Termination  Date":  The  Distribution  Date on which  the  Trust  Fund is
terminated pursuant to Section 9.1.

     "Termination Price": As defined in Section 9.1(b).

     "Transfer":  Any direct or indirect transfer or other form of assignment of
any Ownership Interest in a Class R-I, Class R-II or Class R-III Certificate.

     "Transferable  Servicing  Interest":  Subject to  reduction  by the Trustee
pursuant  to  Section  3.12(a),  the amount by which the  Master  Servicer  Fees
otherwise  payable to the Master  Servicer  hereunder  exceed the sum of (i) the
Primary  Servicing  Fees  and (ii)  the  amount  of such  Master  Servicer  Fees
calculated using the Minimum Master Servicer Fee Rate.

     "Transferee Affidavit": As defined in Section 5.2(j)(ii).

     "Transferor Letter": As defined in Section 5.2(j)(ii).

     "Trust Fund": The corpus of the trust created hereby and to be administered
hereunder,  consisting  of:  (i) such  Mortgage  Loans as from  time to time are
subject to this  Agreement,  together with the Mortgage Files relating  thereto;
(ii) all payments on or  collections in respect of such Mortgage Loans due after
the Cut-off Date, or in the case of a Qualified  Substitute Mortgage Loan, after
the date of substitution;  (iii) any REO Property; (iv) all revenues received in
respect of REO Property;  (v) the Master Servicer's,  the Special Servicer's and
the Trustee's rights under the insurance  policies with respect to such Mortgage
Loans  required to be  maintained  pursuant to this  Agreement  and any proceeds
thereof;  (vi) the  Trustee's  right,  title and  interest in and to the Reserve
Accounts,  the Collection  Account,  the Grantor Trust Collection  Account,  the
Distribution  Account,  the Grantor  Trust  Distribution  Account,  the Interest
Reserve Account,  the Excess  Liquidation  Proceeds Account and the REO Account;
(vii) the rights and remedies of Depositor  under each  Mortgage  Loan  Purchase
Agreement  (other than the right to  recovery or payment of certain  transaction
expenses,  including certain estimated expenses,  to the extent provided in each
such Mortgage Loan Purchase Agreement and the right to receive


                                       45
<PAGE>


indemnification  payments under the Indemnification  Certificate required of the
applicable Seller under each such Mortgage Loan Purchase Agreement);  (viii) the
Cash  Deposit;  (ix) the REMIC I  Regular  Interests  and the  REMIC II  Regular
Interests; and (x) the proceeds of any of the foregoing (other than any interest
earned on deposits in any Reserve  Account,  to the extent such interest belongs
to the related Borrower).

     "Trustee":  LaSalle Bank National Association,  in its capacity as trustee,
or its  successor  in interest,  or any  successor  trustee  appointed as herein
provided.

     "Trustee Fee": With respect to each Mortgage Loan and for any  Distribution
Date,  an amount per calendar  month equal to the product of (i) the Trustee Fee
Rate and (ii) the Stated  Principal  Balance of such Mortgage Loan as of the Due
Date  in  the  calendar  month  preceding  the  calendar  month  in  which  such
Distribution Date occurs (or in the case of the initial Distribution Date, as of
the Cut-off Date).  The Trustee Fee shall be paid out of the Collection  Account
by the Master Servicer on or before each Remittance Date.

     "Trustee  Fee Rate":  A rate equal to  0.0028%  per annum,  such rate to be
calculated on the same basis as the related Mortgage Rate (e.g., "Actual/360" or
"30/360").

     "Trustee  Mortgage File":  With respect to any Mortgage Loan, the documents
listed in Section  2.1(i)  through (xvi)  pertaining to such Mortgage  Loan, the
documents  listed in the  third  paragraph  of  Section  2.1 and any  additional
documents  required to be  deposited  with the  Trustee  pursuant to the express
provisions of this Agreement.

     "Uncertificated   Accrued   Interest":   With   respect  to  any  class  of
uncertificated  REMIC I Regular  Interests or REMIC II Regular Interests for any
Distribution Date, the product of the  Uncertificated  Principal Balance of such
class as of the close of the preceding Distribution Date (or, in the case of the
first  Distribution  Date,  as of the Closing Date) and the  applicable  REMIC I
Remittance Rate or REMIC II Remittance Rate. The Uncertificated Accrued Interest
in  respect  of each  class of REMIC I Regular  Interests  and REMIC II  Regular
Interests  shall  accrue  on the basis of a 360-day  year  consisting  of twelve
30-day months.

     "Uncertificated  Distributable  Interest":  With  respect  to any  REMIC  I
Regular  Interest or REMIC II Regular  Interest for any  Distribution  Date,  an
amount  equal to: (a) the  Uncertificated  Accrued  Interest  in respect of such
REMIC I Regular Interest or REMIC II Regular  Interest,  as the case may be, for
such  Distribution  Date;  reduced (to not less than zero) by (b) the portion of
any  Net  Aggregate  Prepayment/Balloon  Payment  Interest  Shortfall  for  such
Distribution Date allocated to such REMIC I Regular Interest or REMIC II Regular
Interest,  as the case may be,  as set forth  below;  and  increased  by (c) any
Uncertificated  Distributable  Interest  in  respect  of such  REMIC  I  Regular
Interest or REMIC II Regular  Interest,  as the case may be, for the immediately
preceding  Distribution  Date  that  was  not  deemed  paid  on the  immediately
preceding  Distribution Date pursuant to Section 4.1 or 4.2, as applicable.  The
Net Aggregate Prepayment/Balloon Payment Interest Shortfall for any Distribution
Date shall be allocated: (i) among the respective REMIC I Regular Interests, pro
rata in  accordance  with  the  respective  amounts  of  Uncertificated  Accrued
Interest with respect  thereto for such  Distribution  Date;  and (ii) among the
respective  REMIC  II  Regular  Interests,  pro  rata  in  accordance  with  the
respective  amounts of Uncertificated  Accrued Interest with respect thereto for
such Distribution Date.


                                       46
<PAGE>


     "Uncertificated  Principal  Balance":  The principal  amount of any REMIC I
Regular  Interest  or REMIC II Regular  Interest  outstanding  as of any date of
determination.  As of the Closing Date, the Uncertificated  Principal Balance of
each REMIC I Regular Interest shall equal the initial Stated  Principal  Balance
of the related  Mortgage Loan. On each  Distribution  Date,  the  Uncertificated
Principal  Balance  of each  REMIC I Regular  Interest  shall be  reduced by all
distributions of principal deemed to have been made thereon on such Distribution
Date  pursuant to Section 4.1 and,  if and to the extent  appropriate,  shall be
further reduced on such  Distribution Date as provided in Section 4.6. As of the
Closing  Date,  the  Uncertificated  Principal  Balance of each REMIC II Regular
Interest shall equal the amount set forth in the Preliminary Statement hereto as
its initial  Uncertificated  Principal  Balance.  On each Distribution Date, the
Uncertificated  Principal  Balance of each REMIC II  Regular  Interest  shall be
reduced by all  distributions  of principal  deemed to have been made thereon on
such  Distribution  Date  pursuant  to  Section  4.2 and,  if and to the  extent
appropriate,  shall be further reduced on such  Distribution Date as provided in
Section 4.6.

     "Underwriting  Agreement" The  Underwriting  Agreement  dated June 15, 2000
among the Depositor,  Midland,  Morgan Stanley & Co.  Incorporated,  PNC Capital
Markets, Inc. and CIBC World Markets Corp., as underwriters.

     "Unscheduled  Payments":  With respect to a Mortgage  Loan and a Collection
Period,  all  Liquidation  Proceeds and  Insurance  Proceeds  payable under such
Mortgage Loan,  the Repurchase  Price of such Mortgage Loan if it is repurchased
pursuant to Section 2.3 and the price  specified in Section 9.1 if such Mortgage
Loan is purchased  pursuant thereto,  draws on any letters of credit issued with
respect to such  Mortgage Loan and any other  payments  under or with respect to
such  Mortgage Loan not scheduled to be made,  including  Principal  Prepayments
(but excluding Prepayment Premiums) received during such Collection Period.

     "Updated  Appraisal":  With  respect  to any  Mortgage  Loan as to which an
appraisal  is  required  to be  obtained  hereunder,  (i) a  fair  market  value
appraisal of the related Mortgaged  Property or REO Property from an independent
appraiser who is a member of the Appraisal  Institute,  which appraisal shall be
conducted in accordance with MAI standards by an appraiser with at least 5 years
experience  in the  related  property  type and in the  jurisdiction  where  the
property  is  located  or  (ii)  if the  Mortgage  Loan  has a then  outstanding
principal  balance equal to or less than $1,000,000,  at the Special  Servicer's
option,  an internal  property  valuation  performed by the Special  Servicer in
accordance with the servicing  standard set forth herein, in each case conducted
subsequent to any appraisal performed on or prior to the Cut-off Date.

     "Voting  Rights":  The voting  rights to which the  Certificateholders  are
entitled hereunder.  At all times during the term of this Agreement,  98% of the
Voting  Rights shall be allocated  among the Holders of the various  outstanding
Classes of  Principal  Balance  Certificates  in  proportion  to the  respective
aggregate Certificate Balances of their Certificates and 2% of the Voting Rights
shall be allocated  to the Holders of the Class X  Certificates.  Voting  Rights
allocated  to a Class  of  Certificateholders  shall  be  allocated  among  such
Certificateholders  in  proportion  to the  Percentage  Interests  in such Class
evidenced by their respective Certificates.

     "Weighted   Average  REMIC  I  Remittance   Rate":  With  respect  to  each
Distribution  Date, the weighted average of the REMIC I Remittance Rates for the
REMIC  I  Regular   Interests,   weighted   on  the  basis  of  the   respective
Uncertificated Principal Balances of the REMIC I


                                       47
<PAGE>


Regular Interests as of the close of business on the preceding Distribution Date
(or, in the case of the first Distribution Date, as of the Closing Date).

     "Workout Fee": As defined in Section 3.12(b).

          Section 1.2. Certain Calculations.
                       --------------------

     Unless otherwise specified herein, the following provisions shall apply:

          (a) All calculations of interest  (excluding  interest on the Mortgage
Loans,  which  shall  be  calculated  pursuant  to  the  related  Mortgage  Loan
Documents)  provided  for  herein  shall be made on the basis of a 360-day  year
consisting of twelve 30-day months.

          (b) The  portion  of any  Insurance  Proceeds,  Liquidation  Proceeds,
Repurchase Price,  Substitution Shortfall Amounts or Net REO Proceeds in respect
of a Mortgage Loan  allocable to principal and  Prepayment  Premiums shall equal
the total amount of such proceeds minus (a) first,  any portion  thereof payable
to the Master Servicer as Master Servicer Fees, the Special  Servicer as Standby
Special Servicer Fees or the Trustee as Trustee Fees; to the Trustee, the Fiscal
Agent,  Master  Servicer  or Special  Servicer  as  reimbursement  of  Servicing
Advances;  and to the Trustee,  the Master  Servicer or the Special  Servicer as
reimbursement  of  Liquidation  Expenses  pursuant  to the  provisions  of  this
Agreement  and (b) second,  any portion  thereof equal to interest on the unpaid
principal  balance of such  Mortgage  Loan at the related Net Mortgage Rate from
the Due Date as to which  interest  was last paid by the related  Borrower up to
but not including the Due Date in the  Collection  Period in which such proceeds
are received. Allocation of such amount between principal and Prepayment Premium
shall be made first to principal and second to Prepayment Premium.

          (c) Any  Mortgage  Loan  payment is deemed to be  received on the date
such  payment  is  actually  received  by the  Master  Servicer  or the  Special
Servicer;  provided,  however, that for purposes of calculating distributions on
the  Certificates,  partial  Principal  Prepayments with respect to any Mortgage
Loan are deemed to be received on the date they are applied in  accordance  with
Section 3.1(b) to reduce the outstanding principal balance of such Mortgage Loan
on which interest accrues.

          Section 1.3. Certain Constructions.
                       ---------------------

               (a) 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  United  States
generally accepted accounting principles or regulatory accounting principles, as
applicable.

               (b) 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 references to
Sections,  Schedules and Exhibits  contained in this Agreement are references to
Sections,  Schedules  and  Exhibits  in or to this  Agreement  unless  otherwise
specified.

               (c) Whenever a term is defined herein, the definition ascribed to
such term shall be equally  applicable  to both the singular and plural forms of
such term and to masculine, feminine and neuter genders of such term.


                                       48
<PAGE>


               (d) This  Agreement  is the result of  arm's-length  negotiations
between the parties and has been  reviewed by each party hereto and its counsel.
Each party agrees that any ambiguity in this Agreement  shall not be interpreted
against the party drafting the particular  clause which is in question solely by
reason of their having drafted such provision.

                                  ARTICLE II.
                                  -----------

                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF CERTIFICATES


          Section  2.1.   Conveyance  and  Assignment  of  Mortgage  Loans.
                          -------------------------------------------------

     The Depositor,  concurrently  with the execution and delivery hereof,  does
hereby establish a trust,  appoint the Trustee to serve as trustee of such trust
and sell, transfer, assign, set over and otherwise convey to the Trustee without
recourse  (except  to the  extent  herein  provided)  all the  right,  title and
interest of the Depositor in and to the Mortgage Loans,  including all rights to
payments  in  respect  thereof,  except as set  forth  below,  and any  security
interest  thereunder  (whether in real or personal property and whether tangible
or intangible) in favor of the Depositor, and all Reserve Accounts and all other
assets  included  or to be  included  in the Trust  Fund for the  benefit of the
Certificateholders. Such transfer and assignment includes all scheduled payments
of interest and  principal  due after the Cut-off Date (whether or not received)
and all  payments of interest  and  principal  received by the  Depositor or the
Master Servicer on or with respect to the Mortgage Loans after the Cut-off Date,
other than any such payments of interest or principal which were due on or prior
to the Cut-off  Date. In  connection  with such  transfer and  assignment of all
interest and principal due with respect to the Mortgage  Loans after the Cut-off
Date, the Depositor  shall make a cash deposit to the Collection  Account on the
Closing Date in an amount equal to the Cash Deposit. The Depositor, concurrently
with the execution and delivery hereof, does also hereby sell, transfer, assign,
set over and otherwise  convey to the Trustee  without  recourse  (except to the
extent provided  herein) all the right,  title and interest of the Depositor in,
to and under the  Mortgage  Loan  Purchase  Agreements  (other than the right to
recovery or payment of certain transaction expenses, including certain estimated
expenses,  to the extent provided in each such Mortgage Loan Purchase  Agreement
and  the  right  to  receive   certain   indemnification   payments   under  the
indemnification  certificate  required of the applicable  Seller under each such
Mortgage  Loan  Purchase  Agreement).  The  Depositor  shall  cause the  Reserve
Accounts  to be  transferred  to and held in the name of the Master  Servicer on
behalf of the Trustee.

     In  connection  with the transfer and  assignment  of its right,  title and
interest in the  Mortgage  Loans,  the  Depositor  does  hereby  deliver to, and
deposit with, the Custodian on behalf of the Trustee,  with a copy to the Master
Servicer,  the  following  documents  or  instruments  with respect to each such
Mortgage Loan:

          (i) the  original of the  related  Note,  endorsed  by the  applicable
Seller in blank in the following  form:  "Pay to the order of  ________________,
without  recourse"  which the Trustee or its designee is  authorized to complete
and which Note and all  endorsements  thereof  shall  show a  complete  chain of
endorsement  from the Originator to the applicable  Seller,  or in the case of a
missing Note, a lost note affidavit and indemnity in favor of the Depositor, the
Trustee and its successors and assigns;


                                       49
<PAGE>


          (ii) (A) the related  original  recorded  Mortgage,  or a copy thereof
reflecting  recordation,  or a  copy  thereof  certified  by the  related  title
insurance company, public recording office, closing agent or Seller to be in the
form in which  submitted  for  recording,  together  with each related  original
recorded  Assignment of Mortgage which,  together with other such Assignments of
Mortgage,  shows a complete chain of assignment of the related Mortgage from the
applicable  Originator to the applicable  Seller,  or a copy thereof  reflecting
recordation, or a copy thereof certified by the related title insurance company,
public  recording  office,  closing  agent or  Seller to be in the form in which
submitted  for  recording  and (B) the related  original  Assignment of Mortgage
executed by the applicable  Seller in blank which the Trustee or its designee is
authorized  to complete  (and but for the  insertion of the name of the assignee
and  any  related  recording  information  which  is not  yet  available  to the
applicable  Seller,  is in suitable form for recordation in the  jurisdiction in
which the related Mortgaged Property is located);

          (iii) if the related security agreement is separate from the Mortgage,
the original security  agreement or a counterpart  thereof,  and if the security
agreement is not assigned under the Assignments of Mortgage  described in clause
(ii) above,  the related original  assignment of such security  agreement to the
applicable  Seller or a counterpart  thereof and an original  assignment of such
security  agreement executed by the applicable Seller in blank which the Trustee
or its designee is authorized to complete;

          (iv)  (A)  the  acknowledgement  copy  of each  Form  UCC-1  financing
statement  (file  stamped  to  show  the  filing  or  recording  thereof  in the
applicable  public filing or recording  office),  if any, filed or recorded with
respect to  personal  property or  fixtures  constituting  a part of the related
Mortgaged  Property,  or a copy  thereof  in the form  submitted  for  filing or
recording,  together  with a copy of each Form UCC-2 or UCC-3  assignment  (file
stamped to show the filing or recording  thereof in the applicable public filing
or recording  office),  if any, filed or recorded with respect to such financing
statement which, together with other such assignments, shows a complete chain of
assignment of such financing  statement  from the  applicable  Originator to the
applicable  Seller,  or a copy  thereof  in the form  submitted  for  filing  or
recording,  and (B) each Form UCC-2 or UCC-3  assignment  of any such  financing
statement  executed by the  applicable  Seller in blank which the Trustee or its
designee is authorized to complete (and but for the insertion of the name of the
assignee  and any  related  filing  or  recording  information  which is not yet
available to the applicable  Seller, is in suitable form for filing or recording
in the filing or recording office in which such financing statement was filed or
recorded);

          (v) the related  original of the Loan Agreement , if any,  relating to
such Mortgage Loan or a counterpart thereof;

          (vi) the related  original  lender's  title  insurance  policy (or the
original pro forma or specimen title insurance policy or a marked-up  commitment
for lender's title insurance policy, together with a lender's instruction letter
to, and written  acceptance  thereof by, the related  title  insurance  company,
pertaining  to the related  Mortgage and used for the purpose of closing),  or a
copy thereof,  together with any endorsements or riders thereto that were issued
with or subsequent to the issuance of such policy;

          (vii) if any  related  Assignment  of  Leases,  Rents and  Profits  is
separate  from the  Mortgage,  (A) the original  recorded  Assignment of Leases,
Rents and Profits, or a copy thereof reflecting  recordation,  or a copy thereof
certified by the related title insurance company,


                                       50
<PAGE>


public  recording  office,  closing  agent or  Seller to be in the form in which
submitted  for  recording,   together  with  each  related   original   recorded
reassignment  of such  instrument,  if any,  which,  together  with  other  such
reassignments,  shows a complete chain of assignment of such instrument from the
applicable  Originator to the applicable  Seller,  or a copy thereof  reflecting
recordation, or a copy thereof certified by the related title insurance company,
public  recording  office,  closing  agent or  Seller to be in the form in which
submitted  for  recording  and (B) the  related  original  reassignment  of such
instrument  executed by the applicable  Seller in blank which the Trustee or its
designee is authorized to complete (and but for the insertion of the name of the
assignee and any related recording information which is not yet available to the
applicable  Seller,  is in suitable form for recordation in the  jurisdiction in
which the related  Mortgaged  Property is located) (any of which  reassignments,
however,  may be included in a related  Assignment of Mortgage and need not be a
separate instrument);

          (viii)  the  original  or a copy of  each  environmental  warranty  or
indemnity agreement, if any, with respect to such Mortgage Loan;

          (ix) if any related  assignment  of  contracts  is  separate  from the
Mortgage,  the original  assignment of contracts or a copy  thereof,  and if the
assignment  of  contracts  is not  assigned  under the  Assignments  of Mortgage
described in clause (ii) above, the original  reassignment of such instrument to
the  applicable  Seller or a copy thereof and an original  reassignment  of such
instrument  executed by the applicable  Seller in blank which the Trustee or its
designee is authorized to complete;

          (x) with respect to the related Reserve Accounts, if any, the original
of any separate  agreement with respect thereto between the related Borrower and
the  Originator or a copy thereof,  and if such  agreement is not assigned under
the  Assignments  of  Mortgage  described  in clause (ii)  above,  the  original
assignment of such agreement to the  applicable  Seller or a copy thereof and an
original assignment of such agreement executed by the applicable Seller in blank
which the Trustee or its designee is authorized to complete;

          (xi) the  original  of any  other  written  agreement,  instrument  or
document securing such Mortgage Loan, including,  without limitation,  originals
of any guaranties  with respect to such Mortgage Loan or the original  letter of
credit,  if any,  with respect  thereto,  together  with any and all  amendments
thereto,  including,  without limitation, an amendment which entitles the Master
Servicer  to draw upon such  letter of credit on behalf of the  Trustee  for the
benefit of the Certificateholders,  and the original of each instrument or other
item of personal  property  given as security for a Mortgage Loan  possession of
which by a secured  party is necessary to a secured  party's  valid,  perfected,
first  priority  security  interest  therein,  together with all  assignments or
endorsements  thereof  necessary  to entitle  the Master  Servicer  to enforce a
valid,  perfected,  first priority  security  interest  therein on behalf of the
Trustee for the benefit of the Certificateholders;

          (xii) with respect to the related  Reserve  Accounts,  if any, (A) the
acknowledgement  copy of each Form UCC-1  financing  statement  (file stamped to
show the filing thereof in the applicable  public filing office),  if any, filed
with  respect to the  security  interest of the  applicable  Originator  in such
Reserve Accounts and all funds contained therein,  or a copy thereof in the form
submitted  for  filing,  together  with a copy  of  each  Form  UCC-2  or  UCC-3
assignment  (file stamped to show the filing  thereof in the  applicable  public
filing office),  if any, filed with respect to such financing  statement,  which
assignment, together with all other


                                       51
<PAGE>


such  assignments,  shows a  complete  chain  of  assignment  of such  financing
statement from the applicable  Originator to the  applicable  Seller,  or a copy
thereof  in the form  submitted  for  filing,  and (B) each Form  UCC-2 or UCC-3
assignment of any such financing  statement executed by the applicable Seller in
blank which the Trustee or its designee is  authorized  to complete (and but for
the  insertion of the name of the assignee  and any related  filing  information
which is not yet  available  to the  applicable  Seller is in suitable  form for
filing in the filing office in which such financing statement was filed);

          (xiii) the  original or a copy of each  assumption,  consolidation  or
substitution  agreement,  if any,  with  evidence of  recording  thereon,  where
appropriate (or a copy thereof certified by the related title insurance company,
public  recording  office,  closing  agent or  Seller to be in the form in which
executed or submitted for recording);

          (xiv) a copy of each ground lease,  as amended,  if any, of all or any
portion of the related Mortgaged Property;

          (xv) if any  document or  instrument  described  above is signed by an
attorney in fact or similar  agent on behalf of the related  Borrower or another
party, the original of the applicable power of attorney or a copy thereof; and

          (xvi) originals or copies of any and all amendments, modifications and
supplements to, and waivers related to, any of the foregoing;

provided, however, that if there exists with respect to any Cross-Collateralized
Group only one original of any document described in clauses (i) - (xvi) of this
paragraph   which   pertains   to  all   of   the   Mortgage   Loans   in   such
Cross-Collateralized  Group,  the  inclusion of the original of such document in
the Trustee  Mortgage File for any of such Mortgage Loans and the inclusion of a
copy of such  original  in each of the  Trustee  Mortgage  Files  for the  other
Mortgage Loans in such Cross-Collateralized  Group shall be deemed the inclusion
of such original in the Trustee Mortgage File for each such Mortgage Loan.

     On or promptly  following the Closing Date, the Master  Servicer  shall, at
the expense of the applicable  Seller, to the extent possession thereof has been
delivered to it, complete any Assignment of Mortgage delivered in blank pursuant
to clause (ii)(B) above, any assignment of security agreement delivered in blank
pursuant to clause (iii) above, any Form UCC-2 or UCC-3 assignment  delivered in
blank  pursuant  to clause  (iv)(B)  or  (xii)(B)  above,  any  reassignment  of
Assignment of Leases,  Rents and Profits  delivered in blank  pursuant to clause
(vii)(B) above, any  reassignment of assignment of contracts  delivered in blank
pursuant to clause (ix) above and any assignment of an agreement with respect to
a Reserve Account delivered in blank pursuant to clause (x) above, in each case,
by  inserting   "LaSalle   Bank  National   Association,   as  trustee  for  the
Certificateholders  of  PNC  Mortgage  Acceptance  Corp.,   Commercial  Mortgage
Pass-Through Certificates, Series 2000-C1" as assignee and shall, at the expense
of the applicable Seller, to the extent possession thereof has been delivered to
it, deliver (1) for recordation,  (a) each Assignment of Mortgage referred to in
clause  (ii)(B) above which has not yet been submitted for  recordation  and (b)
each  reassignment  of  Assignment of Leases,  Rents and Profits  referred to in
clause  (vii)(B) above (if not otherwise  included in the related  Assignment of
Mortgage) which has not yet been submitted for  recordation;  and (2) for filing
or recordation, each Form UCC-2 or UCC-3 financing statement assignment referred
to in clause  (iv)(B) or  (xii)(B)  above which has not yet been  submitted  for
filing or recordation. On or promptly following the Closing Date (but


                                       52
<PAGE>


in no event more than 60 days after the Closing Date), the Trustee or Custodian,
as applicable, shall, to the extent possession thereof has been delivered to it,
complete  the  endorsement  of each Note by  inserting  "LaSalle  Bank  National
Association,  as trustee for the  Certificateholders  of PNC Mortgage Acceptance
Corp.,  Commercial  Mortgage  Pass-Through  Certificates,   Series  2000-C1"  as
endorsee.  The Master Servicer shall, upon receipt,  promptly submit (or cause a
third party contractor to promptly submit) for recording or filing,  as the case
may be, in the appropriate public recording or filing office, each such document
(other than the Notes)  delivered to the Master Servicer for such purpose at the
expense of the applicable  Seller.  In the event that any such document which is
required  to be  recorded  or  filed is not  delivered  by or on  behalf  of the
applicable  Seller in proper  form for  recording  or filing in the  appropriate
public  recording or filing office or is lost or returned  unrecorded or unfiled
because of an actual or purported defect therein,  the Master Servicer shall use
its best  efforts  to  promptly  prepare  (or cause the  applicable  Seller or a
qualified third party contractor to promptly prepare) a substitute  document for
signature  by the  Depositor  or  the  applicable  Seller,  as  applicable,  and
thereafter  the Master  Servicer  (or such third  party)  shall  cause each such
document to be duly recorded or filed at the expense of the  applicable  Seller.
The Master  Servicer  shall,  promptly upon receipt of the original of each such
recorded  or  filed   document,   deliver  such   original  to  the   Custodian.
Notwithstanding anything to the contrary contained in this Section 2.1, in those
instances where the public recording  office retains the original  Assignment of
Mortgage  or  reassignment  of  Assignment  of  Leases,  Rents and  Profits,  if
applicable, after any such document has been recorded, the obligations hereunder
of the  Depositor  shall be deemed to have been  satisfied  upon delivery to the
Custodian of a copy of such Assignment of Mortgage or reassignment of Assignment
of Leases,  Rents and Profits  certified by the public  recording office to be a
true and complete copy of the recorded  original  thereof.  If any Seller cannot
deliver on the Closing Date either an original of any recorded  document,  or an
acknowledgement copy of any filed document,  described in clause (ii)(A), (iv)A,
(vii)(A),  (xii)(A) or (xiii) of the second  paragraph  of this Section 2.1 or a
copy of any such recorded or filed document  showing that such document has been
file stamped or otherwise  marked as having been duly recorded or filed with the
appropriate public recording or filing office, in any case by reason of the fact
that the original document or acknowledgement  copy has not been returned by the
appropriate  recording or filing  office,  such Seller shall (to the extent that
such Seller is so  obligated  under the terms of the  applicable  Mortgage  Loan
Purchase  Agreement)  notify the  Depositor,  the Trustee,  the  Custodian,  the
Special  Servicer,  the Operating  Adviser and the Master Servicer in writing of
such fact and deliver such document to the Custodian  (with a copy to the Master
Servicer)  promptly  upon  such  Seller's  receipt  thereof.  If a pro  forma or
specimen  title  insurance  policy or a marked-up  commitment for lender's title
insurance policy,  together with a lender's  instruction  letter to, and written
acceptance there of by, the related title insurance  company,  pertaining to the
related Mortgage and used for the purpose of closing,  has been delivered to the
Custodian in lieu of an original  title  insurance  policy as provided in clause
(vi) of the second  paragraph of this Section 2.1, the  applicable  Seller shall
(to the  extent  that  such  Seller  is so  obligated  under  the  terms  of the
applicable  Mortgage Loan Purchase  Agreement)  deliver to the Custodian (with a
copy to the Master Servicer) the original title insurance policy,  together with
any  endorsements  or riders  thereto that are issued with or  subsequent to the
issuance of such policy, promptly upon such Seller's receipt thereof.

     All  original  documents  relating  to the  Mortgage  Loans  to the  extent
delivered to the Master Servicer by the applicable Seller or the Depositor which
are not delivered to the Trustee or Custodian on its behalf shall be held by the
Master Servicer in trust, upon the conditions


                                       53
<PAGE>


herein set forth, for the benefit of the  Certificateholders.  In the event that
any such original  document or a copy thereof is required  pursuant to the terms
of this Section to be a part of a Trustee  Mortgage File, such document shall be
delivered promptly to the Custodian.

          Section 2.2.   Acceptance by the Custodian and the Trustee.
                         -------------------------------------------

     By its  execution  and  delivery  of this  Agreement,  subject to the other
provisions of this Section 2.2, the Trustee acknowledges the assignment to it of
the Mortgage  Loans in good faith without  notice of adverse claims and declares
that it, either directly or through the Custodian, on its behalf, holds and will
hold such  documents  and all others  delivered to it  constituting  the Trustee
Mortgage File (to the extent the  documents  constituting  the Trustee  Mortgage
File are  actually  delivered  to it or the  Custodian)  for any  Mortgage  Loan
assigned to the  Trustee  hereunder  in trust,  upon the  conditions  herein set
forth,  for the use and benefit of all  present  and future  Certificateholders.
Subject to Section 3.21,  the Trustee or the Custodian  shall hold any letter of
credit  included in the Mortgage  Files in a custodial  capacity  only and shall
have no obligation to maintain,  extend the term of, enforce or otherwise pursue
any rights  under such letter of credit.  Upon  execution  and  delivery of this
Agreement, the Trustee or the Custodian shall examine the Trustee Mortgage Files
in the  possession of either of them,  and shall deliver to the  Depositor,  the
Master Servicer,  the Special Servicer,  the Operating  Adviser,  the applicable
Seller and the Placement  Agents a  certification  in the form of Exhibit B-2 to
the  effect  that:  (A) all  documents  pursuant  to  clause  (i) of the  second
paragraph of Section 2.1 are in the  possession of one of them for each Mortgage
Loan listed on the Mortgage Loan Schedule, (B) such documents have been reviewed
by it and  have  not  been  materially  mutilated,  damaged,  defaced,  torn  or
otherwise  physically  altered,  and such documents relate to such Mortgage Loan
(including whether the original principal balance for each Note conforms to that
listed on the Mortgage Loan  Schedule for the related  Mortgage  Loan),  and (C)
each Note has been endorsed as provided in clause (i) of the second paragraph of
Section 2.1, which certification shall be subject to any exceptions noted on any
exception  report prepared by the Trustee or the Custodian,  as applicable,  and
included with such certification. The Trustee or the Custodian shall review each
Trustee Mortgage File within 60 days after the later of (a) the Trustee's or the
Custodian's  receipt of such Trustee Mortgage File or (b) execution and delivery
of this Agreement,  to ascertain that all documents  referred to in clauses (i),
(ii),  (iv), (vi) and (vii),  and, to the extent such items are delivered to the
Trustee or the Custodian, clauses (viii), (xi) and (xiv) of the second paragraph
of Section 2.1 above to be included in a Trustee  Mortgage File  (including such
documents as are to be recorded or filed in a public  recording or filing office
as provided  in the third  paragraph  of Section 2.1 above) have been  received,
have been  executed,  have been  endorsed or  assigned  to the extent  required,
appear on their face to be what they  purport to be,  purport to be  recorded or
filed (as  applicable) and have not been torn,  mutilated or otherwise  defaced,
and that such documents  relate to the Mortgage Loans identified in the Mortgage
Loan  Schedule.  In so doing,  the  Trustee  and the  Custodian  may rely on the
purported  due  execution  and  genuineness  of  any  such  document  and on the
purported  genuineness of any signature  thereon.  If, at the conclusion of such
review, any document or documents constituting a part of a Trustee Mortgage File
have not been  executed or received,  have not been  endorsed or assigned to the
extent required, have not been recorded or filed (if applicable),  are unrelated
to the Mortgage Loans identified in the Mortgage Loan Schedule,  appear on their
face not to be what they purport to be or have been torn, mutilated or otherwise
defaced, the Trustee or the Custodian,  as applicable,  shall promptly so notify
the Depositor,  the Operating  Adviser,  the Placement Agents and the applicable
Seller (with a copy to the Master Servicer and the Special


                                       54
<PAGE>


Servicer) by providing a written  report,  substantially  in the form of Exhibit
B-3  attached  hereto,  setting  forth,  for each  affected  Mortgage  Loan,  in
sufficient  detail,  the nature of the  defective  or missing  document.  If any
exceptions  are noted on such report or if the filing or recording  has not been
completed,  every 90 days thereafter until the earliest of (i) the date on which
such exceptions are eliminated and such recording and filing has been completed,
(ii) the date on which all the  affected  Mortgage  Loans are  removed  from the
Trust and (iii) the second  anniversary  date of the Startup Day, the Trustee or
the  Custodian,  as  applicable,   shall  provide  an  updated  written  report,
substantially in the form of Exhibit B-3 attached hereto, to the Depositor,  the
Operating  Adviser,  the Placement Agents and the applicable Seller (with a copy
to the Master Servicer and the Special Servicer);  provided, however, that after
the  second  anniversary  of  the  Startup  Day  any of  such  Persons  (or  any
Certificateholder)  may request an updated  report.  Neither the Trustee nor the
Custodian  shall be  responsible  for any loss,  cost,  damage or expense to the
Trust Fund  resulting  from any failure to receive any document  constituting  a
portion of a Trustee  Mortgage  File noted on such a report.  Neither the Master
Servicer  nor the Special  Servicer  shall be  responsible  for any loss,  cost,
damage or expense to the Trust Fund  resulting  from any  failure to receive any
document  constituting a portion of a Trustee  Mortgage  File,  subject to their
respective obligations under Section 2.3(e) below.

     In reviewing any Trustee Mortgage File pursuant to the preceding  paragraph
or Section 2.1, the Trustee and the  Custodian  will have no  responsibility  to
determine whether any document or opinion is legal, valid,  effective,  genuine,
binding or enforceable or sufficient or appropriate for the intended  purpose or
that they are other than what they purport to be on their face, whether the text
of any  assignment or endorsement  is in proper or recordable  form (except,  if
applicable,  to  determine  whether  the Trustee is the  assignee or  endorsee),
whether any document has been recorded in accordance  with the  requirements  of
any applicable  jurisdiction,  whether a blanket  assignment is permitted in any
applicable  jurisdiction,  or  whether  any Person  executing  any  document  or
rendering any opinion is authorized to do so or whether any signature thereon is
genuine.

     The  Trustee  shall hold that  portion of the Trust Fund  delivered  to the
Trustee consisting of "instruments" (as such term is defined in Section 9-105 of
the Uniform  Commercial  Code as in effect in  Illinois  on the date  hereof) in
Illinois and,  except (i) as set forth in Section 3.11,  (ii) for the purpose of
performing  its  obligations  pursuant  to Section  2.1,  or (iii) as  otherwise
specifically provided in this Agreement,  shall not remove such instruments from
Illinois unless it receives an Opinion of Counsel (obtained and delivered at the
expense of the Person  requesting the removal of such instruments from Illinois)
that in the event the  transfer of the  Mortgage  Loans to the Trustee is deemed
not to be a sale, after such removal,  the Trustee will possess a first priority
perfected security interest in such instruments.

          Section  2.3.  Seller's  Repurchase of Mortgage Loans for  Document
                         ----------------------------------------------------
Defaults and Breaches of Representations and Warranties.
-------------------------------------------------------

          (a)  Upon  discovery  by the  Depositor,  the  Custodian,  the  Master
Servicer,  the Special Servicer or the Trustee of a breach of any representation
or warranty of Midland under the Midland Mortgage Loan Purchase Agreement or the
Midland Owner Trust Certificate  Purchase Agreement,  RFC under the RFC Mortgage
Loan Purchase  Agreement or CIBC under the CIBC Mortgage Loan Purchase Agreement
with respect to any Mortgage  Loan or that any document  required to be included
in the Trustee Mortgage File with respect to a Mortgage Loan


                                       55
<PAGE>


is missing,  does not conform to the  requirements  of the second  paragraph  of
Section  2.1,  or  appears  not to be what it  purports  to be or has been torn,
mutilated  or otherwise  defaced,  and if such breach or defect  materially  and
adversely affects the value of the Mortgage Loan or the interests of the Trustee
or the  Certificateholders,  such Person shall give prompt notice thereof to the
applicable  Seller,  the Operating  Adviser,  the Master  Servicer,  the Special
Servicer,  the Trustee,  the Placement Agents and the Rating Agencies,  and such
Seller shall (to the extent such Seller is so  obligated  under the terms of the
applicable  Mortgage  Loan  Purchase  Agreement)  either (i) cure such breach or
defect,  (ii) substitute a Qualified  Substitute Mortgage Loan for such Mortgage
Loan and deposit a cash amount equal to the  applicable  Substitution  Shortfall
Amount  into the  Collection  Account,  subject  to the terms of the  applicable
Mortgage Loan Purchase  Agreement and this Agreement,  or (iii)  repurchase such
Mortgage Loan at the Repurchase Price, in any event, within 90 days (or, if such
breach or defect  would  cause the  Mortgage  Loan to be other than a  Qualified
Mortgage, 60 days) after the discovery of such breach or defect (or after notice
thereof is received by the Seller,  if permitted by the terms of the  applicable
Mortgage Loan Purchase Agreement),  as the same may be extended, all pursuant to
and as more  particularly  described in the  applicable  Mortgage  Loan Purchase
Agreement;  provided,  that none of the  Depositor,  the  Custodian,  the Master
Servicer,  the Special Servicer and the Trustee has an obligation to conduct any
investigation  with respect to such matters (except,  in the case of the Trustee
Mortgage  Files,  to the extent provided in Sections 2.1 and 2.2). Each Mortgage
Loan  Purchase  Agreement  provides  that the absence of certain  Mortgage  Loan
Documents  from a Trustee  Mortgage  File as described  therein is  conclusively
presumed to materially and adversely affect the interests of the Trustee and the
Certificateholders in the related Mortgage Loan. If a Seller is unable to cure a
breach  of any such  representation  or  warranty  or  document  defect  and is,
therefore,   required  to  either  repurchase  the  affected  Mortgage  Loan  or
substitute a Qualified  Substitute Mortgage Loan or Loans for such Mortgage Loan
under the terms of the  applicable  Mortgage Loan Purchase  Agreement,  and such
Mortgage Loan is a Cross-Collateralized  Loan, then for purposes of this Section
2.3, such Seller shall repurchase, or substitute a Qualified Substitute Mortgage
Loan  or  Loans  for,  all  of the  Cross-Collateralized  Loans  in the  related
Cross-Collateralized  Group to the extent  required  to do so under the terms of
the applicable Mortgage Loan Purchase Agreement.

          (b) Upon receipt by the Master Servicer from the applicable  Seller of
the Repurchase Price for a repurchased  Mortgage Loan, the Master Servicer shall
deposit such amount in the  Collection  Account,  and the  Trustee,  pursuant to
Section  3.11,  shall,  upon  receipt of a  certificate  of a Servicing  Officer
certifying as to the receipt by the Master Servicer of the Repurchase  Price and
the deposit of the Repurchase Price into the Collection Account pursuant to this
Section 2.3(b):  (i) notify each Rating Agency and the Operating Adviser of such
repurchase,  (ii) release or cause to be released to the  applicable  Seller the
related Mortgage File (provided that each of the Custodian,  the Master Servicer
and the Special  Servicer shall be responsible for releasing any portion of such
Mortgage  File in its  possession)  and (iii) at the  expense of the  applicable
Seller, execute and deliver such instruments of transfer or assignment,  in each
case without recourse,  representation  or warranty,  as shall be provided to it
and as shall  be  necessary  to vest in the  applicable  Seller  the  legal  and
beneficial  ownership of any Mortgage Loan  released  pursuant  hereto,  and the
Trustee, the Custodian,  the Special Servicer and the Master Servicer shall have
no further  responsibility  with  regard to such  Mortgage  File or the  related
Mortgage Loan.

          (c) In  connection  with any  substitution  by a Seller of one or more
Qualified  Substitute  Mortgage  Loans for one or more  Deleted  Mortgage  Loans
pursuant to Section


                                       56
<PAGE>


2.3(a)(ii),  the Master  Servicer  will  determine the  applicable  Substitution
Shortfall Amount. Upon receipt by the Master Servicer from the applicable Seller
of the Mortgage File(s) (including a Trustee Mortgage File or Files which comply
with Section 2.1) for the related Qualified  Substitute  Mortgage Loan(s) and an
amount  equal  to the  applicable  Substitution  Shortfall  Amount,  the  Master
Servicer  shall  deliver  such Trustee  Mortgage  File(s) to the  Custodian  and
deposit such amount in the  Collection  Account,  and the  Trustee,  pursuant to
Section  3.11,  shall,  upon  receipt of a  certificate  of a Servicing  Officer
certifying as to the receipt of the applicable  Substitution  Shortfall  Amount,
the delivery of such Trustee  Mortgage  File(s) to the Custodian and the deposit
of the  Substitution  Shortfall  Amount into the Collection  Account pursuant to
this Section 2.3(c):  (i) notify each Rating Agency and the Operating Adviser of
such substitution, (ii) release or cause to be released to the applicable Seller
the Mortgage File(s) of the Deleted Mortgage Loan(s) (provided, that each of the
Custodian, the Master Servicer and the Special Servicer shall be responsible for
releasing any portion of such Mortgage  File(s) in its  possession) and (iii) at
the expense of the applicable  Seller,  execute and deliver such  instruments of
transfer  or  assignment,  in each  case  without  recourse,  representation  or
warranty,  as shall be provided to it and as shall be  necessary  to vest in the
applicable  Seller the legal and beneficial  ownership of each Deleted  Mortgage
Loan released  pursuant  hereto,  and the Trustee,  the  Custodian,  the Special
Servicer  and the Master  Servicer  shall have no  further  responsibility  with
regard to such Deleted Mortgage Loan(s) or the Mortgage File(s) related thereto.
No substitution may be made in any calendar month after the  Determination  Date
for such  month.  Monthly  Payments  due with  respect to  Qualified  Substitute
Mortgage Loans after the related date of substitution shall be part of the Trust
Fund. Monthly Payments due with respect to Qualified  Substitute  Mortgage Loans
on or prior to the related date of  substitution  shall not be part of the Trust
Fund and will be  remitted  by the  Master  Servicer  to the  applicable  Seller
promptly following receipt.

          (d) In the event that the  applicable  Seller  incurs  any  expense in
connection  with curing a breach of a  representation  or  warranty  pursuant to
Section 2.3(a) which also constitutes a default under the related Mortgage Loan,
the applicable  Seller shall have a right,  and the  applicable  Seller shall be
subrogated  to the rights of the  Trustee,  as successor  to the  mortgagee,  to
recover  the  amount  of such  expenses  from the  related  Borrower;  provided,
however,  that the  Seller's  rights  pursuant to this  Section  2.3(d) shall be
junior,  subject  and  subordinate  to the  rights of the Trust  Fund to recover
amounts  owed by the related  Borrower  under the terms of such  Mortgage  Loan,
including,  without  limitation,  the rights to recover  unreimbursed  Advances,
accrued  and unpaid  interest  on  Advances  at the  Advance  Rate and unpaid or
unreimbursed  expenses of the Trust Fund  allocable to such Mortgage  Loan.  The
Master Servicer or Special Servicer, as applicable, shall use reasonable efforts
in  recovering,  or assisting the  applicable  Seller in  recovering,  from such
Borrower the amount of any such expenses.

          (e) The Master Servicer or the Special Servicer, as applicable,  shall
use its best efforts,  consistent  with the Servicing  Standard,  to enforce the
obligations  of each Seller to cure,  substitute  for or repurchase any Mortgage
Loan which is  discovered  to be a  "Defective  Mortgage  Loan" (as such term is
defined in the applicable  Mortgage Loan Purchase  Agreement) under the terms of
the applicable Mortgage Loan Purchase Agreement and to otherwise  administer the
applicable  Mortgage Loan Purchase  Agreement in accordance  with its respective
terms.


                                       57
<PAGE>


          Section  2.4.   Representations and Warranties of the Depositor.
                          -----------------------------------------------

          (a) The  Depositor  hereby  represents  and warrants as of the Closing
Date that:

               (i)  The  Depositor  is  a  corporation  duly  organized  validly
existing and in good standing under the laws of the State of Missouri;

               (ii) The Depositor  has taken all  necessary  action to authorize
the  execution,  delivery and  performance  of this Agreement by it, and has the
power and authority to execute,  deliver and perform this  Agreement and all the
transactions  contemplated hereby,  including, but not limited to, the power and
authority  to sell,  assign and  transfer  its right,  title and interest in the
Mortgage Loans in accordance with this Agreement;

               (iii)  This  Agreement  has  been  duly and  validly  authorized,
executed and  delivered  by the  Depositor  and assuming the due  authorization,
execution  and  delivery  of this  Agreement  by each other party  hereto,  this
Agreement and all of the  obligations of the Depositor  hereunder are the legal,
valid and binding  obligations of the Depositor,  enforceable in accordance with
the  terms of this  Agreement,  except as such  enforcement  may be  limited  by
bankruptcy, insolvency, reorganization, liquidation, receivership, moratorium or
other laws relating to or affecting  creditors' rights generally,  or by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law);

               (iv)  The  execution  and  delivery  of  this  Agreement  and the
performance of its obligations hereunder by the Depositor will not conflict with
any  provision  of its  articles  of  incorporation  or  bylaws,  or any  law or
regulation  to which the  Depositor is subject,  or conflict  with,  result in a
breach of or constitute a default under (or an event which, with notice or lapse
of time or both, would constitute a default under) any of the terms,  conditions
or  provisions  of any agreement or instrument to which the Depositor is a party
or by which it is bound, or any state or federal statute, or any order or decree
applicable to the Depositor, or result in the creation or imposition of any lien
on any of the Depositor's  assets or property which,  with respect to any of the
above events, would materially and adversely affect the ability of the Depositor
to carry out its  obligations  under this  Agreement.  The  Depositor  is not in
default in any  material  respect  with  respect to any  agreement  to which the
Depositor is a party.

               (v)  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 Depositor
of, or compliance by the Depositor with,  this  Agreement,  except (A) for those
consents,  approvals,  authorizations,  orders,  registrations  or filings  that
previously  have been  obtained,  (B) such as may be required under the blue sky
laws of any  jurisdiction  in  connection  with  the  purchase  and  sale of the
Certificates by the Placement Agents, and (C) any recordation of the assignments
of Mortgage Loan Documents to the Trustee  pursuant to Article II, which has not
yet been completed;

               (vi) The articles of incorporation of the Depositor provides that
the Depositor is permitted to engage in only the following activities:

                    (A) To acquire, own, hold, sell, transfer,  assign,  pledge,
finance,  refinance  and  otherwise  deal with (i) loans secured by (x) first or
second mortgages,  deeds of trust or similar liens on multi-family  residential,
commercial or mixed commercial and multi-family residential properties,  and (y)
related assets, and (ii) any participation interest in,


                                       58
<PAGE>


security (in bond or pass-through form) or funding agreement based on, backed or
collateralized  by, directly or indirectly,  any of the foregoing (the loans and
related  assets  described  in clause  (A)(i) and the  participation  interests,
securities and funding  agreements  described in clause  (A)(ii),  collectively,
"Mortgage Loan Assets");

                    (B) To  establish  and fund one or more trusts (the  "Series
Trusts")  and to  authorize  such Series  Trusts to engage in one or more of the
activities   described  in  immediately   preceding  clause  (A)  and  to  issue
certificates  (the  "Securities") in one or more classes pursuant to pooling and
servicing  agreements  (each,  a "Pooling and Servicing  Agreement"),  with each
class having the characteristics  specified in the related Pooling and Servicing
Agreement, representing ownership interests in the Mortgage Loan Assets;

                    (C) To acquire, own, hold, invest in, offer, sell, transfer,
assign,  pledge,  finance and deal in and with any Securities issued by a Series
Trust established by the Depositor pursuant to immediately preceding clause (B);
and

                    (D) To  engage  in any  other  acts  and  activities  and to
exercise  any powers  permitted to  corporations  under the laws of the State of
Missouri  which  are  incidental  to,  or  connected  with  the  foregoing,  and
necessary, suitable or convenient to accomplish any of the foregoing; and

               (vii) There is no action,  suit or proceeding  pending or, to the
best knowledge of the Depositor,  threatened  against the Depositor in any court
or by or before any other  governmental  agency or  instrumentality  which would
materially  and  adversely  affect the ability of the Depositor to carry out its
obligations under this Agreement.

          (b) The Depositor hereby  represents and warrants with respect to each
Mortgage Loan as of the Closing Date that:

               (i)  Immediately  prior to the  transfer  and  assignment  to the
Trustee,  the  related  Note and the  related  Mortgage  were not  subject to an
assignment or pledge created by it or  attributable  to its  ownership;  and the
Depositor  had full right to transfer and sell its right,  title and interest in
such  Mortgage  Loan to the  Trustee  free and clear of any  encumbrance,  lien,
pledge,  charge,  claim or security  interest  encumbering  such  Mortgage  Loan
created by it or attributable to its ownership;

               (ii) Each related  Assignment of Mortgage  constitutes the legal,
valid and binding  assignment of the related Mortgage from the related Seller to
the Trustee,  and each related  reassignment of Assignment of Leases,  Rents and
Profits  in favor of the  Trustee  constitutes  the  legal,  valid  and  binding
assignment  of the related  Assignment  of Leases,  Rents and  Profits  from the
related Seller to the Trustee; and

               (iii) No claims have been made by the Depositor under the related
lender's  title  insurance  policy,  and the  Depositor  has not done, by act or
omission,  anything  which  would  impair the  coverage of such  lender's  title
insurance policy.

          (c)  It  is  understood  and  agreed  that  the   representations  and
warranties  set  forth  in  this  Section  2.4  shall  survive  delivery  of the
respective  Trustee  Mortgage Files to the Trustee until the termination of this
Agreement,  and  shall  inure  to the  benefit  of the  Certificateholders,  the
Trustee, the Master Servicer and the Special Servicer.


                                       59
<PAGE>


          (d) In the event that any litigation is commenced  which alleges facts
which, in the judgment of the Depositor, could constitute a breach of any of the
Depositor's  representations  and warranties relating to the Mortgage Loans, the
Depositor hereby reserves the right to conduct the defense of such litigation at
its expense,  except to the extent such action would  materially  and  adversely
affect the interests of the Certificateholders.

          Section 2.5.  Representations, Warranties and Covenants of the Master
                        -------------------------------------------------------
Servicer and the Special Servicer.
---------------------------------

          (a) The Master Servicer hereby represents, warrants and covenants that
as of the Closing Date:

               (i) The Master Servicer is a corporation, duly organized, validly
existing  and in good  standing  under the laws of the State of Delaware and has
all licenses  necessary to carry on its business as now being conducted,  and is
in  compliance  with the laws of each state in which any  Mortgaged  Property is
located,  to the extent necessary to ensure the  enforceability of each Mortgage
Loan in accordance with the terms of this Agreement;

               (ii) The Master Servicer has the full corporate power,  authority
and legal  right to  execute  and  deliver  this  Agreement  and to  perform  in
accordance herewith;  the execution and delivery of this Agreement by the Master
Servicer and its  performance and compliance with the terms of this Agreement do
not violate the Master  Servicer's  certificate of  incorporation  or by-laws or
constitute a default (or an event which,  with notice or lapse of time, or both,
would  constitute a default)  under,  or result in the breach of, any  contract,
agreement or other  instrument to which the Master  Servicer is a party or which
may be applicable to the Master Servicer or any of its assets,  which default or
breach would have  consequences  that would  materially and adversely affect the
financial condition or operations of the Master Servicer or its properties taken
as a whole or impair the  ability  of the Trust Fund to realize on the  Mortgage
Loans;

               (iii)  This  Agreement  has  been  duly and  validly  authorized,
executed and delivered by the Master Servicer and,  assuming due  authorization,
execution and delivery by the other parties hereto,  constitutes a legal,  valid
and  binding  obligation  of the  Master  Servicer,  enforceable  against  it in
accordance with the terms of this Agreement,  except as such  enforcement may be
limited by bankruptcy, insolvency,  reorganization,  liquidation,  receivership,
moratorium or other laws relating to or affecting  creditors'  rights generally,
or by general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law);

               (iv)  The  Master  Servicer  is  not in  violation  of,  and  the
execution  and  delivery  of  this  Agreement  by the  Master  Servicer  and its
performance  and compliance with the terms of this Agreement will not constitute
a violation with respect to, any state or federal  statute,  any order or decree
of any court or any order or  regulation  of any  federal,  state,  municipal or
governmental agency having jurisdiction, or result in the creation or imposition
of any  lien,  charge  or  encumbrance  which,  in any such  event,  would  have
consequences that would materially and adversely affect the financial  condition
or  operations  of the Master  Servicer  or its  properties  taken as a whole or
impair the ability of the Trust Fund to realize on the Mortgage Loans;


                                       60
<PAGE>


               (v) There are no actions, suits or proceedings pending or, to the
knowledge of the Master Servicer, threatened, against the Master Servicer which,
either in any one  instance or in the  aggregate,  would  result in any material
adverse change in the business,  operations or financial condition of the Master
Servicer  or would  materially  impair the  ability of the  Master  Servicer  to
perform under the terms of this  Agreement or draw into question the validity of
this  Agreement or the  Mortgage  Loans or of any action taken or to be taken in
connection with the obligations of the Master Servicer contemplated herein;

               (vi)  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 Master
Servicer of, or compliance by the Master  Servicer  with,  this Agreement or, if
required,  such approval has been obtained prior to the Closing Date,  except to
the extent that the failure of the Master  Servicer to be qualified as a foreign
corporation  or  licensed  in one  or  more  states  is not  necessary  for  the
enforcement of the Mortgage Loans;

               (vii) The  Master  Servicer  has   examined  each  Sub-Servicing
Agreement, will examine each future Sub-Servicing Agreement and will be familiar
with the terms  thereof.  Any  Sub-Servicing  Agreements  will  comply  with the
provisions of Section 3.2; and

               (viii) Each  officer or employee of the Master Servicer that has
responsibilities  concerning the servicing and  administration of Mortgage Loans
is  covered  by errors  and  omissions  insurance  in the  amounts  and with the
coverage  required  by Section  3.8.  The Master  Servicer  has a fidelity  bond
meeting the requirements of Section 3.8.

          (b) The  Special Servicer  hereby represents,  warrants  and covenants
that as of the Closing Date:

               (i) The  Special Servicer  is duly  organized,  validly  existing
and in good standing as a corporation under the laws of the State of California,
and the Special  Servicer is in compliance  with the laws of each State in which
any  Mortgaged  Property  is  located  to the extent  necessary  to perform  its
obligations under this Agreement;

               (ii) The  execution and delivery of this Agreement by the Special
Servicer, and the performance and compliance with the terms of this Agreement by
the Special  Servicer,  will not violate the Special  Servicer's  organizational
documents or  constitute  a default (or an event which,  with notice or lapse of
time, or both,  would  constitute a default)  under, or result in the breach of,
any material  agreement or other  instrument  to which it is a party or which is
applicable to it or any of its assets,  which default, in the Special Servicer's
good faith and reasonable judgment, is likely to materially and adversely affect
either the ability of the Special Servicer to perform its obligations under this
Agreement or the financial condition of the Special Servicer;

               (iii) The Special  Servicer  has the full power and  authority to
enter into and consummate all transactions  contemplated by this Agreement,  has
duly authorized the execution,  delivery and performance of this Agreement,  and
has duly executed and delivered this Agreement;

               (iv) This Agreement, assuming  due  authorization,  execution and
delivery by each of the other parties  hereto,  constitutes  a valid,  legal and
binding  obligation  of the Special  Servicer,  enforceable  against the Special
Servicer in accordance with the terms


                                       61
<PAGE>


hereof,  subject  to  (A)  applicable  bankruptcy,  insolvency,  reorganization,
moratorium  and other  laws  affecting  the  enforcement  of  creditors'  rights
generally,  and (B) general  principles  of equity,  regardless  of whether such
enforcement is considered in a proceeding in equity or at law;

               (v) The   Special  Servicer is    not   in  violation of, and its
execution and delivery of this Agreement and its performance and compliance with
the terms of this  Agreement  will not  constitute a violation  of, any law, any
order or decree of any court or arbiter,  or any order,  regulation or demand of
any  federal,  state  or  local  governmental  or  regulatory  authority,  which
violation,  in the Special  Servicer's good faith and reasonable  judgement,  is
likely to affect  materially  and  adversely  either the  ability of the Special
Servicer  to perform  its  obligations  under this  Agreement  or the  financial
condition of the Special Servicer;

               (vi)  No litigation is pending  or,  to the  best of the  Special
Servicer's  knowledge,  threatened  against the Special  Servicer the outcome of
which,  in the Special  Servicer's  good faith and  reasonable  judgment,  could
reasonably be expected to prohibit the Special  Servicer from entering into this
Agreement or materially and adversely affect the ability of the Special Servicer
to perform its obligations under this Agreement.

               (vii) 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 Special
Servicer of, or compliance by the Special  Servicer with,  this Agreement or, if
required,  such approval has been obtained prior to the Closing Date,  except to
the extent that the failure of the Special Servicer to be qualified as a foreign
corporation  or  licensed  in one  or  more  states  is not  necessary  for  the
enforcement of the Specially Serviced Mortgage Loans; and

               (viii) Each officer or employee of the Special Servicer  that has
or will have  responsibilities  concerning the servicing and  administration  of
Mortgage  Loans is covered by errors and omissions  insurance in the amounts and
with the coverage  required by Section 3.8. The Special  Servicer has a fidelity
bond meeting the requirements of Section 3.8.

          (c)  It  is  understood  and  agreed  that  the  representations   and
warranties  set forth in this  Section  shall  survive  delivery  of the Trustee
Mortgage  Files to the Trustee or the  Custodian on behalf of the Trustee  until
the  termination  of this  Agreement,  and  shall  inure to the  benefit  of the
Certificateholders,  the  Trustee  and  the  Depositor.  Upon  discovery  by the
Depositor, the Master Servicer, the Special Servicer or a Responsible Officer of
the Trustee (or upon written  notice  thereof from any  Certificateholder)  of a
breach of any of the  representations  and  warranties set forth in this Section
which materially and adversely affects the interests of the  Certificateholders,
the Master Servicer,  the Special Servicer or the Trustee, the party discovering
such breach shall give prompt  written notice to the other parties hereto and to
the Rating Agencies.

          Section 2.6. Execution and Delivery of Certificates; Issuance of REMIC
                       ---------------------------------------------------------
I Regular Interests and REMIC II Regular Interests.
--------------------------------------------------

      The Trustee  acknowledges  the  assignment to it of the Mortgage Loans and
the  delivery to it, or a  Custodian  appointed  by it, of the Trustee  Mortgage
Files,   subject  to  the  provisions  of  Section  2.1  and  Section  2.2  and,
concurrently  with such delivery,  (i)  acknowledges  the issuance of and hereby
declares that it holds the REMIC I Regular Interests on behalf of REMIC II and


                                       62
<PAGE>


the Holders of the Class R-II  Certificates;  (ii)  acknowledges the issuance of
and hereby  declares  that it holds the REMIC II Regular  Interests on behalf of
REMIC III and the  Holders of the REMIC III Regular  Certificates  and the Class
R-III Certificates;  (iii) acknowledges the issuance of the Class V Certificates
and hereby  declares  that it holds the  Grantor  Trust  Assets on behalf of the
holders  of the Class V  Certificates;  and (iv) has caused to be  executed  and
caused to be authenticated  and delivered to or upon the order of the Depositor,
or as directed by the terms of this  Agreement,  Class A-1,  Class A-2, Class X,
Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K,
Class L, Class M,  Class N,  Class O,  Class V, Class R-I,  Class R-II and Class
R-III Certificates in authorized  denominations,  in each case registered in the
names  set  forth  in such  order of the  Depositor  or as so  directed  in this
Agreement and duly authenticated by the Authenticating Agent, which Certificates
(described in the preceding clause (iv)) evidence  ownership of the entire Trust
Fund  and the  Depositor  acknowledges  receipt  of the  Certificates  from  the
Trustee.

          Section 2.7.   Documents Not Delivered to Custodian.
                         ------------------------------------

      All original  documents  relating to the Mortgage  Loans which are part of
the Master Servicer  Mortgage File are and shall be held by the Master Servicer,
in trust for the benefit of the Trustee on behalf of the Certificateholders. The
legal  ownership of all records and documents with respect to each Mortgage Loan
prepared  by or which  come into the  possession  of the Master  Servicer  shall
immediately   vest  in  the   Trustee,   in  trust  for  the   benefit   of  the
Certificateholders.

                                  ARTICLE III.
                                  ------------

                          ADMINISTRATION AND SERVICING
                              OF THE MORTGAGE LOANS

          Section 3.1.   Master Servicer to Act as Master Servicer; Special
                         --------------------------------------------------
Servicer to Act as Special Servicer; Administration of the Mortgage Loans.
-------------------------------------------------------------------------

          (a)  The  Master  Servicer  and  the  Special  Servicer,  each  as  an
independent  contractor,  shall service and administer the Mortgage Loans (or in
the case of the Special Servicer,  the Specially Serviced Mortgage Loans and the
REO Mortgage Loans) on behalf of the Trust Fund solely in the best interests of,
and for the  benefit  of,  all of the  Certificateholders  and the  Trustee  (as
trustee for the Certificateholders) (as determined by the Master Servicer or the
Special  Servicer,  as the  case  may  be,  in its  good  faith  and  reasonable
judgement) in accordance  with  applicable  law, the terms of this Agreement and
the terms of the respective Mortgage Loans. In furtherance of, and to the extent
consistent  with,  the  foregoing,  and except to the extent that this Agreement
provides for a contrary  specific course of action,  each of the Master Servicer
and the Special  Servicer shall service and administer each Mortgage Loan (x) in
the same manner in which, and with the same care, skill,  prudence and diligence
with  which,  it  services  and  administers  similar  mortgage  loans for other
third-party  portfolios,   giving  due  consideration  to  customary  and  usual
standards  of  practice  of  prudent  institutional   commercial  mortgage  loan
servicers used with respect to loans comparable to the Mortgage Loans, or (y) in
the same manner in which, and with the same care, skill,  prudence and diligence
with which,  it services and administers  similar  mortgage loans which it owns,
whichever  standard  of care is  higher,  and  taking  into  account  its  other
obligations hereunder, but without regard to:


                                       63
<PAGE>


               (i)  any  other  relationship  that the  Master  Servicer  or the
Special Servicer, as the case may be, may have with the related Borrower;

               (ii)  the ownership  of  any  Certificate by the Master  Servicer
or the Special Servicer, as the case may be, or any Affiliate thereof;

               (iii) the Master  Servicer's, the Trustee's or the Fiscal Agent's
obligation to make P&I Advances or the Master  Servicer's,  the Trustee's or the
Fiscal Agent's  obligation to make Servicing Advances (or the Special Servicer's
obligation  to make  Emergency  Advances) or to incur  servicing  expenses  with
respect to such Mortgage Loan;

               (iv)  the  Master Servicer's or  the  Special   Servicer's  right
to  receive  compensation  for its  services  hereunder  or with  respect to any
particular transaction;

               (v)  the ownership or servicing or  management  for others by the
Master Servicer, the Special Servicer or any Sub-Servicer, of any other mortgage
loans or property; or

               (vi) any obligation of the Master Servicer, the Special  Servicer
(if ever applicable),  any Sub-Servicer (if ever applicable) or any Affiliate of
the Master  Servicer,  the Special Servicer or any Sub-Servicer to repurchase or
replace a Mortgage  Loan as a Seller if  required  by a Mortgage  Loan  Purchase
Agreement.

      The  standards  set forth above with  respect to the conduct of the Master
Servicer  and the  Special  Servicer  in the  performance  of  their  respective
obligations  under  this  Agreement  is  herein  referred  to as the  "Servicing
Standard."

      The Master Servicer's or the Special Servicer's  liability for actions and
omissions in its capacity as Master  Servicer or Special  Servicer,  as the case
may be, hereunder is limited as provided herein (including,  without limitation,
pursuant to Section 6.3). To the extent consistent with the foregoing  Servicing
Standard and subject to any express limitations set forth in this Agreement, the
Master Servicer and the Special Servicer shall use reasonable efforts to seek to
maximize  the timely and  complete  recovery of  principal  and  interest on the
Notes; provided, however, that nothing herein contained shall be construed as an
express or implied  guarantee by the Master Servicer or the Special  Servicer of
the  collectability of the Mortgage Loans.  Subject only to the  above-described
Servicing  Standard  and the  terms  of  this  Agreement  and of the  respective
Mortgage  Loans,  the Master  Servicer and the Special  Servicer shall have full
power and authority,  acting alone or through Sub-Servicers  (subject to Section
3.2),  to do or cause to be done any and all  things  in  connection  with  such
servicing and administration which they may deem necessary or desirable. Without
limiting the  generality of the foregoing,  the Master  Servicer and the Special
Servicer shall,  and each is hereby  authorized and empowered by the Trustee to,
with respect to each Mortgage Loan and the related Mortgaged Property,  prepare,
execute and deliver, on behalf of the  Certificateholders and the Trustee or any
of them,  any and all financing  statements,  continuation  statements and other
documents or instruments necessary to maintain the lien on the related Mortgaged
Property and related  collateral;  subject to Section 3.9 and Section 3.28,  any
modifications,  waivers,  consents  or  amendments  to or  with  respect  to any
Mortgage Loan or any documents  contained in the related  Mortgage File; and any
and all  instruments  of  satisfaction  or  cancellation,  or of partial or full
release or discharge, and all other comparable instruments.  The Master Servicer
and the Special  Servicer  shall service and  administer  the Mortgage  Loans in
accordance  with  applicable  state and  federal  law and shall  provide  to the
Borrowers  any  reports  required to be  provided  to them  thereby.  Subject to
Section  3.11,  the Trustee  shall,  upon the receipt of a written  request of a
Servicing  Officer,  execute and deliver to the Master  Servicer and the Special
Servicer any powers of attorney and other


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<PAGE>


documents  prepared by the Master Servicer or the Special Servicer and necessary
or  appropriate  (as  certified  in such  written  request) to enable the Master
Servicer   and  the  Special   Servicer  to  carry  out  their   servicing   and
administrative duties hereunder;  provided,  however, that the Trustee shall not
be liable for any actions of the Master  Servicer or Special  Servicer under any
such  powers  of  attorney.  Notwithstanding  anything  contained  herein to the
contrary, neither the Master Servicer nor the Special Servicer shall without the
Trustee's  written consent:  (i) initiate any action,  suit or proceeding solely
under the Trustee's  name without  indicating  the Master  Servicer's or Special
Servicer's, as applicable,  representative capacity or (ii) take any action with
the intent to cause, and which actually does cause, the Trustee to be registered
to do business in any state.

     (b) Unless  otherwise  provided in the related  Note,  the Master  Servicer
shall apply any partial  Principal  Prepayment  received on a Mortgage Loan on a
date other than a Due Date to the principal  balance of such Mortgage Loan as of
the Due Date immediately following the date of receipt of such partial Principal
Prepayment.

          Section 3.2.   Sub-Servicing.
                         -------------

     (a)  The  Master   Servicer  or  the  Special   Servicer   may  enter  into
Sub-Servicing  Agreements  with  third  parties  with  respect  to  any  of  its
respective obligations hereunder,  provided that (1) any such agreement shall be
consistent  with  the  provisions  of this  Agreement  and  (2) no  Sub-Servicer
retained  by the  Master  Servicer  or the  Special  Servicer  shall  grant  any
modification,  waiver or amendment to any Mortgage  Loan without the approval of
the  Master  Servicer  or  the  Special  Servicer,   as  applicable.   Any  such
Sub-Servicing  Agreement may permit the  Sub-Servicer  to delegate its duties to
agents or subcontractors so long as the related  agreements or arrangements with
such agents or subcontractors are consistent with the provisions of this Section
3.2(a).

      Any  Sub-Servicing  Agreement  entered into by the Master  Servicer or the
Special  Servicer,  shall  provide that it may be assumed or  terminated  by the
Trustee or  successor  Master  Servicer or Special  Servicer if the Trustee or a
successor  Master  Servicer  or Special  Servicer  has assumed the duties of the
Master  Servicer  or the  Special  Servicer,  as  applicable,  without  cost  or
obligation  to the  assuming or  terminating  party or the Trust Fund,  upon the
assumption by the Trustee or a successor  Master Servicer or Special Servicer of
the obligations of the Master Servicer or the Special  Servicer,  as applicable,
pursuant to Section 7.2; provided, however, that the Trustee or successor Master
Servicer  may not  terminate  any  Sub-Servicing  Agreement  entered into by the
Master Servicer as of the Closing Date with respect to any of the Mortgage Loans
unless the related Initial  Sub-Servicer is in default under such  Sub-Servicing
Agreement,  which  Sub-Servicing  Agreement  must  provide  that (i) the Initial
Sub-Servicer  is in default if an Event of  Default  with  respect to the Master
Servicer occurs hereunder as a result of the failure of the Initial Sub-Servicer
to perform any obligation required of it under such Sub-Servicing  Agreement and
(ii) the related  Initial  Sub-Servicer  is  required  to perform its  servicing
obligations in a manner consistent with the Servicing Standard.

      Any  Sub-Servicing  Agreement,  and any  other  transactions  or  services
relating to the Mortgage Loans involving a  Sub-Servicer,  shall be deemed to be
between the Master  Servicer or the Special  Servicer,  as applicable,  and such
Sub-Servicer  alone,  and the  Trustee and the  Certificateholders  shall not be
deemed parties thereto and shall have no claims, rights,

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<PAGE>


obligations,  duties or liabilities with respect to the Sub-Servicer,  including
the Depositor acting in such capacity, except as set forth in Section 3.2(c).

     (b) The  Master  Servicer  and the  Special  Servicer  shall  each  pay the
respective fees (including any applicable  termination fees or penalties) of any
Sub-Servicer retained by it thereunder from its own funds in accordance with the
applicable Sub-Servicing Agreement.

     (c) If the Trustee or any  successor  Master  Servicer or Special  Servicer
assumes the  obligations  of the Master  Servicer or the  Special  Servicer,  as
applicable, in accordance with Section 7.2, the Trustee or such successor Master
Servicer or Special  Servicer,  to the extent necessary to permit the Trustee or
such successor  Master Servicer or Special  Servicer to carry out the provisions
of Section  7.2,  shall,  without act or deed on the part of the Trustee or such
successor Master Servicer or Special Servicer,  succeed to all of the rights and
obligations of the Master Servicer or Special  Servicer under any  Sub-Servicing
Agreement  entered into by the Master Servicer or Special  Servicer  pursuant to
Section 3.2(a),  subject to the right of termination by the Trustee, if any, set
forth in Section  3.2(a).  In such event,  the Trustee or such successor  Master
Servicer or Special  Servicer  shall be deemed to have assumed all of the Master
Servicer's or Special  Servicer's  interest  therein (but not any liabilities or
obligations  in respect of acts or omissions  of the Master  Servicer or Special
Servicer  prior to such  deemed  assumption)  and to have  replaced  the  Master
Servicer  or  the  Special  Servicer,   as  applicable,   as  a  party  to  such
Sub-Servicing  Agreement to the same extent as if such  Sub-Servicing  Agreement
had been assigned to the Trustee or such successor Master Servicer,  except that
the Master Servicer or the Special Servicer shall not thereby be relieved of any
liability or obligations under such  Sub-Servicing  Agreement that accrued prior
to the assumption of duties  hereunder by the Trustee or such  successor  Master
Servicer or Special Servicer.

      In the event that the Trustee or any successor  Master Servicer or Special
Servicer assumes the servicing obligations of the Master Servicer or the Special
Servicer,  as the case may be,  upon  request of the  Trustee or such  successor
Master Servicer or Special Servicer,  as the case may be, the Master Servicer or
Special  Servicer  shall,  at its own  expense,  deliver to the  Trustee or such
successor Master Servicer or Special Servicer (as the case may be) all documents
and records relating to any Sub-Servicing  Agreement and the Mortgage Loans then
being serviced thereunder and an accounting of amounts collected and held by it,
if any, and the Master  Servicer  will  otherwise use its best efforts to effect
the orderly and efficient transfer of any Sub-Servicing Agreement to the Trustee
or such successor Master Servicer.

     (d) Notwithstanding any Sub-Servicing  Agreement,  any of the provisions of
this  Agreement  relating  to  agreements  or  arrangements  between  the Master
Servicer  or Special  Servicer  and any Person  acting as  Sub-Servicer  (or its
agents or  subcontractors)  or any reference to actions taken through any Person
acting  as  Sub-Servicer  or  otherwise,  the  Master  Servicer  or the  Special
Servicer,  as applicable,  shall remain  obligated and liable to the Trustee and
Certificateholders  for the servicing and administering of the Mortgage Loans in
accordance  with the  provisions of this  Agreement  without  diminution of such
obligation  or  liability  by  virtue  of  such   Sub-Servicing   Agreements  or
arrangements  or by virtue of  indemnification  from the Depositor or any Person
acting as Sub-Servicer (or its agents or  subcontractors) to the same extent and
under  the same  terms and  conditions  as if the  Master  Servicer  or  Special
Servicer,  as applicable,  were servicing and  administering  the Mortgage Loans
alone.  The Master  Servicer or the Special  Servicer,  as applicable,  shall be
entitled  to  enter  into an  agreement  with  any  Sub-Servicer  providing  for
indemnification of the Master Servicer or the Special Servicer, as


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<PAGE>


applicable, by such Sub-Servicer,  and nothing contained in this Agreement shall
be deemed to limit or modify such  indemnification,  but no such  agreement  for
indemnification shall be deemed to limit or modify this Agreement.

          Section 3.3.   Collection of Certain Mortgage Loan Payments.
                         --------------------------------------------

      The Master  Servicer  (or the Special  Servicer  with respect to Specially
Serviced  Mortgage Loans) shall make reasonable  efforts to collect all payments
called for under the terms and  provisions  of the Mortgage  Loans when the same
shall be due and payable,  and shall follow such  collection  procedures  as are
consistent with the Servicing  Standard,  including using its reasonable efforts
in accordance with the Servicing  Standard to collect income statements and rent
rolls from the  related  Borrowers  as required  by the  related  Mortgage  Loan
Documents  and providing (in the case of the Master  Servicer  only)  reasonable
advance  notice to such  Borrowers of Balloon  Payments due with respect to such
Mortgage  Loans.  Consistent  with the  foregoing,  the Master  Servicer  or the
Special  Servicer,  as applicable,  may in its discretion waive any late payment
charge,  Default  Interest or penalty  fees in  connection  with any  delinquent
Monthly Payment or Balloon Payment with respect to any Mortgage Loan.

          Section 3.4.   Collection of Taxes, Assessments and Similar Items.
                         --------------------------------------------------

     (a) With respect to each Mortgage Loan (other than REO Mortgage Loans), the
Master  Servicer  shall maintain  accurate  records with respect to each related
Mortgaged Property reflecting the status of taxes, assessments and other similar
items  that are or may become a lien on such  related  Mortgaged  Property,  the
status of insurance  premiums  payable  with respect  thereto and the amounts of
Escrow Payments,  if any,  required in respect  thereof.  From time to time, the
Master  Servicer  shall  (i)  obtain  all bills for the  payment  of such  items
(including  renewal  premiums),  and (ii) effect  payment of all such bills with
respect  to each such  Mortgaged  Property  prior to the  applicable  penalty or
termination  date, in each case  employing for such purpose  Escrow  Payments as
allowed under the terms of such Mortgage  Loan. If a Borrower  fails to make any
such Escrow  Payment on a timely  basis or  collections  from such  Borrower are
insufficient  to pay any such item before the applicable  penalty or termination
date, the Master  Servicer shall (in accordance with Section 3.8 with respect to
the  payment of  insurance  premiums)  advance  the amount  necessary  to effect
payment of any such item, unless the Master Servicer, in its good faith business
judgment,  determines that such Advance would be a Nonrecoverable  Advance. With
respect to any Mortgage Loan as to which the related Borrower is not required to
make Escrow Payments, if such Borrower fails to effect payment of any such bill,
then, the Master  Servicer shall (in accordance with Section 3.8 with respect to
the  payment of  insurance  premiums)  advance  the amount  necessary  to effect
payment of any such bill on or before  the  applicable  penalty  or  termination
date; provided, that, with respect to the payment of taxes and assessments,  the
Master  Servicer  shall make such advance  within five  Business  Days after the
Master Servicer has received  confirmation that such item has not been paid. The
Master Servicer shall be entitled to reimbursement of Servicing Advances that it
makes  pursuant to the preceding  two  sentences,  with interest  thereon at the
Advance  Rate,  from  amounts  received  on or in respect of the  Mortgage  Loan
respecting  which such Servicing  Advance was made or if such Servicing  Advance
has become a Nonrecoverable  Advance,  to the extent permitted by Section 3.6 of
this  Agreement.  No costs  incurred  by the Master  Servicer in  effecting  the
payment of taxes and assessments on the Mortgaged Properties shall, for the


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<PAGE>


purpose of  calculating  distributions  to  Certificateholders,  be added to the
amount owing under the related Mortgage Loans, notwithstanding that the terms of
such Mortgage Loans so permit.

     (b) The Master  Servicer shall  segregate and hold all funds  collected and
received pursuant to any Mortgage Loan constituting Escrow Payments separate and
apart  from any of its own funds and  general  assets  and shall  establish  and
maintain one or more segregated  custodial  accounts which are Eligible Accounts
(each,  an "Escrow  Account") into which all Escrow  Payments shall be deposited
within two Business Days after receipt.  The Master  Servicer shall also deposit
into  each  Escrow  Account  any  amounts   representing   losses  on  Permitted
Investments  in which  amounts  on  deposit  in such  Escrow  Account  have been
invested  pursuant to Section  3.7(b) and any Insurance  Proceeds,  Condemnation
Proceeds  or  Liquidation  Proceeds  which are  required  to be  applied  to the
restoration or repair of the related Mortgaged  Property pursuant to the related
Mortgage Loan. Escrow Accounts shall be entitled,  "Midland Loan Services, Inc.,
as Master Servicer, in trust for LaSalle Bank National Association as Trustee in
trust  for  Holders  of  PNC  Mortgage  Acceptance  Corp.   Commercial  Mortgage
Pass-Through  Certificates,  Series 2000-C1, and Various Borrowers." Withdrawals
from an Escrow Account may be made by the Master Servicer only:

                (i) to  effect timely payments of items  with  respect to  which
Escrow Payments are required pursuant to the related Mortgage;

                (ii) to  transfer funds to the Collection Account  to  reimburse
the Master  Servicer,  the Trustee or the Fiscal Agent,  as applicable,  for any
Advance relating to Escrow Payments, but only from amounts received with respect
to the related Mortgage Loan which represent late collections of Escrow Payments
thereunder;

                (iii) for  application  to  the  restoration  or  repair  of the
related Mortgaged  Property in accordance with the related Mortgage Loan and the
Servicing Standard;

                (iv)  to  clear  and  terminate  such  Escrow  Account  upon the
termination of this Agreement;

                (v) to pay from time to time to the Master Servicer any interest
or investment  income earned on funds deposited in such Escrow Account  pursuant
to Section  3.7(b) to the extent (a) permitted by law and (b) not required to be
paid to the related  Borrower under the terms of the related Mortgage Loan or by
law, or to pay such interest or income to the related Borrower if such income is
required  to be paid to the  related  Borrower  under law or by the terms of the
related Mortgage Loan; and

                (vi) to remove any funds deposited in such Escrow  Account  that
were not required to be deposited therein.

          Section 3.5.   Collection  Account,  Distribution  Account,  Grantor
                         ------------------------------------------------------
Trust Collection Account, Grantor Trust Distribution Account and Excess
-----------------------------------------------------------------------
Liquidation Proceeds Account.
----------------------------

     (a) The Master Servicer shall establish and maintain the Collection Account
in the Trustee's name, for the benefit of the Certificateholders. The Collection
Account shall be established and maintained as an Eligible  Account.  The Master
Servicer shall deposit or cause to be deposited in the Collection Account within
two Business  Days  following  receipt the  following  payments and  collections
received or made by it on or with respect to the Mortgage Loans:

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<PAGE>


                (i)  all payments on account of principal on the Mortgage Loans,
including the principal component of Unscheduled Payments on the Mortgage Loans;

                (ii) all  payments on account of interest  and Default  Interest
on the Mortgage Loans (excluding Deferred Interest), the interest portion of all
Unscheduled  Payments,  all  Prepayment  Premiums and all payments on account of
late payment charges on the Mortgage Loans;

                (iii) any amounts required to be deposited pursuant  to  Section
3.7(b) in connection with losses realized on Permitted  Investments with respect
to  funds  held in the  Collection  Account  and  pursuant  to  Section  3.25 in
connection with Prepayment/Balloon Payment Interest Shortfalls;

                (iv)  (x) all Net REO  Proceeds transferred from an REO  Account
pursuant to Section  3.17(b) and (y) all Insurance  Proceeds and Net Liquidation
Proceeds not required to be applied to the  restoration or repair of the related
Mortgaged Property;

                (v)   any amounts   received  from   Borrowers  which  represent
recoveries of Servicing Advances; and

                (vi) any other  amounts   required   by the  provisions  of this
Agreement to be deposited into the Collection  Account by the Master Servicer or
the Special Servicer, including, without limitation, proceeds of any purchase or
repurchase of a Mortgage  Loan pursuant to Section 2.3,  Section 3.18 or Section
9.1.

      In the event that the Master Servicer  deposits in the Collection  Account
any amount not required to be deposited therein,  the Master Servicer may at any
time withdraw such amount from the Collection  Account,  any provision herein to
the contrary notwithstanding.

     (b) The Trustee shall  establish and maintain the  Distribution  Account in
the name of the Trustee, in trust for the benefit of the Certificateholders. The
Distribution Account shall be established and maintained as an Eligible Account.
The Trustee will notify each Rating  Agency of any change in the location of the
Distribution Account.

     (c) Prior to the Remittance Date relating to the Collection Period, if any,
in which any Deferred Interest is received,  the Master Servicer shall establish
and maintain the Grantor Trust Collection Account in the name of the Trustee, in
trust for the benefit of the Class V Certificateholders  as set forth in Section
10.5. The Grantor Trust  Collection  Account shall be established and maintained
as an Eligible Account.  The Master Servicer shall transfer to the Grantor Trust
Collection  Account any Deferred  Interest  within two Business  Days after such
amounts are deposited in the Collection Account.

     (d) Prior to the Remittance Date relating to the Collection Period, if any,
in which Deferred Interest is received, the Trustee shall establish and maintain
the Grantor Trust Distribution  Account in the name of the Trustee, in trust for
the benefit of the Class V Certificateholders as set forth in Section 10.05. The
Grantor Trust  Distribution  Account shall be  established  and maintained as an
Eligible  Account.  On or before the  Remittance  Date related to the applicable
Distribution Date, the Master Servicer shall remit to the Trustee for deposit in
the Grantor Trust Distribution  Account an amount equal to the Deferred Interest
received during the related Collection Period.

     (e) Following the distribution of Deferred  Interest to  Certificateholders
on the first  Distribution  Date after  which  there are no longer any  Mortgage
Loans outstanding which

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<PAGE>


pursuant to their terms could pay Deferred Interest, the Master Servicer and the
Trustee, respectively,  shall terminate the Grantor Trust Collection Account and
the Grantor Trust Distribution Account.

     (f) If any Excess  Liquidation  Proceeds are  received,  the Trustee  shall
establish and maintain the Excess  Liquidation  Proceeds  Account in the name of
the Trustee,  in trust for the benefit of the  Certificateholders.  On or before
the  Remittance  Date related to the  applicable  Distribution  Date, the Master
Servicer shall remit to the Trustee from the Collection  Account and for deposit
into the  Excess  Liquidation  Proceeds  Account  an amount  equal to the Excess
Liquidation  Proceeds received during the related  Collection Period. The Excess
Liquidation  Proceeds Account shall be established and maintained as an Eligible
Account.

     (g) Funds in the Collection Account, the Distribution  Account, the Grantor
Trust  Collection  Account and the  Grantor  Trust  Distribution  Account may be
invested in Permitted  Investments in accordance  with the provisions of Section
3.7.  The  Master  Servicer  shall  give  written  notice to the  Trustee of the
location  and account  number of the  Collection  Account and the Grantor  Trust
Collection  Account  and shall  notify the  Trustee  and each  Rating  Agency in
writing prior to any subsequent change thereof.

          Section 3.6.   Permitted  Withdrawals  from  the  Collection  Account
                         -------------------------------------------------------
and Grantor Trust Collection Account.
--------------------------------

     (a) The Master Servicer may make  withdrawals  from the Collection  Account
(and the Grantor Trust Collection  Account,  with respect to Deferred  Interest)
only as described below (the order set forth below not  constituting an order of
priority for such withdrawals):

                (i)  to  remit  the  applicable  amounts  to  the  Trustee,  for
deposit in the Distribution  Account, the Grantor Trust Distribution Account and
the Excess Liquidation  Proceeds Account pursuant to Section 4.5, Section 3.5(d)
and Section 3.5(f), respectively;

                (ii) to pay  or  reimburse the Fiscal Agent,  the  Trustee,  the
Master Servicer or the Special Servicer, in that order of priority for Advances;
provided,  however, the right of the Master Servicer,  the Special Servicer, the
Trustee or the Fiscal Agent to reimbursement  pursuant to this clause (ii) being
limited  to  either  (x) any  collections  on or in  respect  of the  particular
Mortgage  Loan or REO Property  respecting  which each such Advance was made, or
(y) any other amounts in the Collection  Account in the event that such Advances
have  been  deemed  to be  Nonrecoverable  Advances  or are not  recovered  from
recoveries in respect of the related Mortgage Loan or REO Property after a Final
Recovery Determination;

                (iii) to  pay  to  the  Fiscal  Agent,  the  Trustee, the Master
Servicer  or  the  Special  Servicer,  in  that  order  of  priority,  any  then
outstanding  Advance  Interest  Amount  first out of Default  Interest  and late
payment charges actually  collected during such Collection  Period in respect of
the related Mortgage Loan and, to the extent such amounts are  insufficient,  in
connection with or at any time following the  reimbursement of such Advance from
any other amounts in the Collection Account;

                (iv) to pay  on  or  before  each  Remittance Date to the Master
Servicer,  Special Servicer and Trustee,  as applicable,  as  compensation,  the
unpaid Master Servicer Fee,  Special  Servicer Fee, Standby Special Servicer Fee
and Trustee Fee, respectively (in the case of the Master Servicer, reduced up to
the amount of any Prepayment/Balloon Payment Interest Shortfalls with respect to
such  Distribution  Date, in accordance  with Section 3.25),  to be paid, in the
case of the Master Servicer Fee, from interest  received on the related Mortgage
Loans, and to

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<PAGE>


pay to the Master Servicer or the Special Servicer,  as applicable,  any other
amounts constituting Servicing Compensation;

                (v) to pay on or before each Distribution Date to the Depositor,
the applicable  Seller or the purchaser of any Specially  Serviced Mortgage Loan
or REO Property, as the case may be, with respect to each Mortgage Loan, Deleted
Mortgage Loan or REO Property that has previously been repurchased,  replaced or
purchased  by it pursuant  to Section  2.3,  Section  3.18 or Section  9.1,  all
amounts received thereon during the related  Collection Period and subsequent to
the effective date of such purchase or repurchase.

                (vi) to the extent  reimbursement or payment is not provided for
pursuant to any other  clause of this  Section  3.6(a),  to reimburse or pay the
Master Servicer,  the Special  Servicer,  the Trustee,  the Depositor and/or the
Fiscal Agent for unpaid items  incurred by or on behalf of such Person  pursuant
to, as applicable,  Section 3.7(c),  Section 6.3, Section 7.4, Section 8.5(d) or
Section 11.7, or any other  provision of this  Agreement  pursuant to which such
Person is entitled to reimbursement or payment from the Trust Fund, in each case
only to the extent  reimbursable under such Section,  it being acknowledged that
this  clause  (vi)  shall  not be deemed to  modify  the  substance  of any such
Section,  including the  provisions of such Section that set forth the extent to
which  one  of the  foregoing  Persons  is or is  not  entitled  to  payment  or
reimbursement;

                (vii) to deposit in one or more separate, non-interest   bearing
accounts any amount reasonably  determined by the Trustee to be necessary to pay
any  applicable  federal,  state or local taxes imposed on REMIC I, REMIC II and
REMIC  III or the  Grantor  Trust  under  the  circumstances  and to the  extent
described in Section 10.3 and Section 10.5, respectively;

                (viii) to withdraw  any  amount  deposited  into  the Collection
Account and the Grantor  Trust  Collection  Account  that was not required to be
deposited therein; and

                (ix) to clear  and  terminate  the  Collection  Account  and the
Grantor Trust Collection Account pursuant to Section 9.1.

      The Master  Servicer  shall keep and maintain  separate  accounting,  on a
Mortgage  Loan-by-Mortgage  Loan  basis,  for  the  purpose  of  justifying  any
withdrawal  from the  Collection  Account or Grantor  Trust  Collection  Account
pursuant to subclauses (ii) - (viii) above.

     (b) The Master  Servicer shall pay to the Trustee,  the Fiscal Agent or the
Special Servicer from the Collection Account (to the extent permitted by clauses
(i)-(viii) above) amounts permitted to be paid to the Trustee,  the Fiscal Agent
or the Special Servicer  therefrom,  promptly upon receipt of a certificate of a
Responsible  Officer  of the  Trustee,  an  officer  of the  Fiscal  Agent  or a
Servicing  Officer of the Special Servicer,  as applicable,  describing the item
and amount to which the  Trustee,  the Fiscal  Agent or the Special  Servicer is
entitled.  The  foregoing  sentence does not apply to the payment of the Trustee
Fee. The Master Servicer may rely conclusively on any such certificate and shall
have no duty to recalculate the amounts stated therein.

     (c) The  Trustee  shall,  from  time to  time,  make  withdrawals  from the
Distribution  Account for each of the  following  purposes  (the order set forth
below not constituting an order of priority for such withdrawals):

                (i)  to  make  distributions  to  Certificateholders   on   each
Distribution Date pursuant to Article IV;

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<PAGE>


                (ii)  to  transfer Interest  Reserve  Amounts  to  the  Interest
Reserve Account pursuant to Section 3.29;

                (iii) to pay itself or any of its directors, officers, employees
and agents,  as the case may be, any amounts payable or reimbursable to any such
Person pursuant to Section 3.6(a),  including the Trustee's Fee, but only to the
extent not previously paid by the Master Servicer pursuant to Section 3.6(b);

                (iv)  to  withdraw  any  amount  deposited into the Distribution
Account that was not required to be deposited therein; and

                (v) to  clear  and  terminate  the  Distribution  Account at the
termination of this Agreement pursuant to Section 9.1.

     (d) The  Trustee,  the Fiscal  Agent,  the Special  Servicer and the Master
Servicer shall in all cases have a right prior to the  Certificateholders to any
funds  on  deposit  in  the  Collection  Account  from  time  to  time  for  the
reimbursement  or  payment of unpaid or  unreimbursed  Trustee  Fees,  Servicing
Compensation  (subject to the  limitation  set forth in Section  3.6(a)(iv)  for
Master Servicer Fees),  Advances (subject to the limitation set forth in Section
3.6(a)(ii)) and their respective  expenses  (including Advance Interest Amounts)
hereunder to the extent such expenses, fees, compensation and Advances are to be
reimbursed or paid from amounts on deposit in the Collection Account pursuant to
this Agreement.

     (e) The Trustee shall, upon receipt,  deposit in the Distribution  Account,
the  Grantor  Trust  Distribution  Account  or the Excess  Liquidation  Proceeds
Account,  as  applicable,  any  and  all  amounts  received  by the  Trustee  in
accordance with Section  3.6(a)(i).  If, as of 3:00 p.m., New York City time, on
any Remittance  Date or on such other date as any amount  referred to in Section
3.6(a)(i) is required to be delivered  hereunder,  the Master Servicer shall not
have  delivered  to the  Trustee for deposit in the  Distribution  Account,  the
Grantor Trust Distribution  Account or the Excess  Liquidation  Proceeds Account
the amounts required to be deposited therein pursuant to Section 3.6(a)(i), then
the Trustee shall,  to the extent that a Responsible  Officer of the Trustee has
such  knowledge,  provide  notice of such  failure  to the  Master  Servicer  by
facsimile  transmission sent to telecopy no. (816) 435-2326 (or such alternative
number  provided  by the  Master  Servicer  to the  Trustee in  writing)  and by
telephone at telephone no. (816) 435-5000 (or such  alternative  number provided
by the Master  Servicer to the Trustee in writing) as soon as  possible,  but in
any event before 5:00 p.m., New York City time, on such day.

          Section 3.7.   Investment of Funds in Accounts.
                         -------------------------------

     (a) The Master Servicer with respect to the Collection Account, the Grantor
Trust  Collection  Account and any Reserve  Accounts,  the Special Servicer with
respect to any REO  Account  and the Trustee  with  respect to the  Distribution
Account, the Excess Liquidation Proceeds Account, the Grantor Trust Distribution
Account and the Interest  Reserve Account may direct any depository  institution
maintaining  such  account  (subject,  in  the  case  of  Reserve  Accounts,  to
applicable laws and the related Mortgage Loan Documents)  (each, for purposes of
this  Section  3.7,  an  "Investment  Account")  to  invest  the  funds  in such
Investment  Account in one or more Permitted  Investments  that bear interest or
are sold at a discount, and that mature, unless payable on demand, no later than
the  Business  Day  preceding  the date on which such funds are  required  to be
withdrawn from such Investment  Account  pursuant to this  Agreement;  provided,
however,  that all investments in the Distribution Account and the Grantor Trust
Distribution


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<PAGE>


Account,  shall be payable on demand or shall  mature no later than the Business
Day prior to the next  Distribution  Date. Any direction by the Master Servicer,
the Special Servicer or the Trustee,  as applicable,  to invest funds on deposit
in an  Investment  Account  shall  be in  writing  and  shall  certify  that the
requested  investment is a Permitted Investment which matures at or prior to the
time  required  hereby  or is  payable  on  demand.  In the case of any  Reserve
Account,  the Master  Servicer shall act upon the written request of the related
Borrower or Manager to the extent the Master Servicer is required to do so under
the  terms  of the  related  Mortgage  Loan,  provided  that in the  absence  of
appropriate  written  instructions  from such  Borrower  or Manager  meeting the
requirements  of this Section 3.7, the Master  Servicer shall have no obligation
to, but will be entitled  to,  direct the  investment  of funds in such  Reserve
Accounts.  All such  Permitted  Investments  shall be held to  maturity,  unless
payable on demand.  Any  investment of funds in an  Investment  Account shall be
made in the name of the  Trustee  (in its  capacity as such) or in the name of a
nominee of the Trustee. The Trustee shall have sole control (except with respect
to  investment  direction  which  shall be in the  sole  control  of the  Person
specified above (subject,  in the case of Reserve Accounts, to the rights of the
related  Borrower or Manager under the related  Mortgage  Loan  Documents) as an
independent  contractor  to the Trust  Fund) over each such  investment  and any
certificate  or  other  instrument  evidencing  any  such  investment  shall  be
delivered  directly to the Trustee or its nominee (which shall  initially be the
Master Servicer),  together with any document of transfer,  if any, necessary to
transfer  title to such  investment  to the Trustee or its nominee.  The Trustee
shall  have no  responsibility  or  liability  with  respect  to the  investment
directions  of  the  Master  Servicer  or the  Special  Servicer  or any  losses
resulting  therefrom,  whether from Permitted  Investments or otherwise.  In the
event amounts on deposit in an Investment  Account are at any time invested in a
Permitted  Investment payable on demand, the Trustee, the Master Servicer or the
Special Servicer, as applicable, shall:

                (i)  consistent with any notice required to be given thereunder,
demand that payment  thereon be made on the last day such  Permitted  Investment
may  otherwise  mature  hereunder  in an amount  equal to the  lesser of (1) all
amounts then payable  thereunder and (2) the amount  required to be withdrawn on
such date; and

                (ii) demand payment of all amounts due thereunder  promptly upon
determination by the Trustee,  the Master Servicer or the Special  Servicer,  as
applicable,  that such  Permitted  Investment  would not  constitute a Permitted
Investment in respect of funds  thereafter on deposit in the related  Investment
Account.

     (b) All income and gain (net of losses as contemplated below) realized from
investment of funds deposited in (i) the Collection  Account,  the Grantor Trust
Collection  Account and any Reserve Account as to which the related  Borrower is
not  entitled  to  interest  thereon,  shall be for the  benefit  of the  Master
Servicer,  (ii)  the  Distribution  Account,  the  Excess  Liquidation  Proceeds
Account, the Grantor Trust Distribution Account and the Interest Reserve Account
shall be for the benefit of the  Trustee and (iii) any REO Account  shall be for
the  benefit of the  Special  Servicer.  Such  income and gain (net of losses as
contemplated  below) may be  withdrawn  by Trustee,  the Master  Servicer or the
Special Servicer, as applicable, from time to time. The amount of any net losses
incurred in respect of any such  investments  in the  Collection  Account or the
Grantor Trust Collection Account shall be for the account of the Master Servicer
which shall  deposit the amount of such loss (to the extent not offset by income
from other  investments) in the Collection  Account or Grantor Trust  Collection
Account, as applicable, out of its own funds before the related Remittance Date.
The amount of any net losses incurred in respect of any such  investments in the
Distribution Account, the Excess Liquidation Proceeds Account, the Grantor Trust
Distribution Account and the Interest Reserve Account shall be for


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<PAGE>


the account of the Trustee  which shall  deposit the amount of such loss (to the
extent not offset by income from other investments) in the Distribution Account,
the Excess Liquidation  Proceeds Account, the Grantor Trust Distribution Account
or the Interest Reserve Account, as applicable,  out of its own funds before the
related  Distribution  Date. The amount of any net losses incurred in respect of
any such  investments in the REO Account shall be for the account of the Special
Servicer  which shall  deposit the amount of such loss (to the extent not offset
by income from other investments) in the REO Account out of its own funds before
the related Determination Date. The Master Servicer shall also deposit into each
Reserve Account any amounts representing net losses on Permitted  Investments in
which such Reserve  Accounts  have been  invested  before the date on which such
funds are required to be withdrawn from such account,  except to the extent that
amounts are invested for the benefit of the Borrower under applicable law or the
terms of the related Mortgage Loan. The income and gain realized from investment
of funds deposited in any Reserve Account shall be paid from time to time to the
related  Borrower to the extent  required  under the Mortgage Loan or applicable
law.

     (c)  Except as  otherwise  expressly  provided  in this  Agreement,  if any
default occurs in the making of a payment due under any Permitted Investment, or
if a default  occurs  in any  other  performance  required  under any  Permitted
Investment,  the Trustee  may,  and upon the request of Holders of  Certificates
representing a majority of the aggregate Voting Rights of any Class shall,  take
such  action as may be  appropriate  to enforce  such  payment  or  performance,
including the  institution and  prosecution of appropriate  proceedings.  In the
event the Trustee  takes any such action,  the Trust Fund shall pay or reimburse
the  Trustee  for  all  reasonable  out-of-pocket  expenses,  disbursements  and
advances incurred or made by the Trustee in connection  therewith.  In the event
that the Trustee  does not take any such  action,  the Master  Servicer may take
such action at its own cost and expense.

          Section 3.8.   Maintenance of Insurance  Policies and Errors and
                         -------------------------------------------------
Omissions and Fidelity Coverage.
-------------------------------

     (a) The Master Servicer on behalf of the Trustee,  as mortgagee,  shall use
its reasonable  efforts in accordance  with the Servicing  Standard to cause the
related Borrower to maintain, to the extent required or permitted to be required
by each Mortgage Loan (other than REO Mortgage Loans),  and if the Borrower does
not so  maintain,  shall  itself  maintain  (subject to the  provisions  of this
Agreement  concerning  Nonrecoverable  Advances)  to the extent  the  Trustee as
mortgagee has an insurable  interest and to the extent available at commercially
reasonable  rates, (A) fire and hazard  insurance from a Qualified  Insurer with
extended  coverage on the related  Mortgaged  Property in an amount  which is at
least equal to the lesser of (i) 100% of the then "full replacement cost" of the
improvements  and  equipment  (excluding  foundations,  footings and  excavation
costs),  without deduction for physical  depreciation,  and (ii) the outstanding
principal  balance  of the  related  Mortgage  Loan or such  other  amount as is
necessary to prevent any  reduction in such policy by reason of the  application
of  co-insurance  and to prevent the Trustee as mortgagee  thereunder from being
deemed to be a  co-insurer,  in each case with a  replacement  cost  rider,  (B)
insurance from a Qualified Insurer providing  coverage against 18 months of rent
interruptions  and (C) such  other  insurance  as  provided  under  the  subject
Mortgage Loan (including public liability  insurance) from a Qualified  Insurer.
The Special  Servicer  shall  cause to be  maintained  with  respect to each REO
Property (to the extent  available at  commercially  reasonable  rates) fire and
hazard insurance from a Qualified  Insurer,  with no less insurance  coverage on
such REO Property than is consistent  with the Servicing  Standard.  Any amounts
collected by the Master Servicer or the Special Servicer,  as applicable,  under
any

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<PAGE>


such policies  (other than amounts to be applied to the restoration or repair of
the related  Mortgaged  Property  or amounts to be  released to the  Borrower in
accordance  with the terms of the related  Mortgage) shall be deposited into the
Collection  Account pursuant to Section 3.5,  subject to withdrawal  pursuant to
Section 3.6. Any cost incurred by the Master  Servicer in  maintaining  any such
insurance   shall  not,  for  the  purpose  of  calculating   distributions   to
Certificateholders,  be added to the unpaid  principal  balance  of the  related
Mortgage Loan,  notwithstanding  that the terms of such Mortgage Loan so permit.
It is understood  and agreed that no earthquake  or other  additional  insurance
other than flood insurance is to be required of any Borrower or to be maintained
by the Master Servicer or the Special  Servicer other than pursuant to the terms
of the related  Mortgage Loan Documents and pursuant to such applicable laws and
regulations  as  shall  at any  time  be in  force  and as  shall  require  such
additional  insurance.  If the  Mortgaged  Property  is located  in a  federally
designated  special  flood  hazard  area,  the Master  Servicer  (or the Special
Servicer  in the  case of REO  Property)  will  use its  reasonable  efforts  in
accordance  with  the  Servicing  Standard  to cause  the  related  Borrower  to
maintain,  or will itself obtain (the cost of which will be a Servicing Advance,
subject to the provisions of this Agreement concerning Nonrecoverable Advances),
flood  insurance  in respect  thereof to the extent  available  at  commercially
reasonable  rates,  to the  extent  required  under the  related  Mortgage  Loan
Documents. Such flood insurance shall be in an amount equal to the lesser of (i)
the unpaid  principal  balance of the related Mortgage Loan and (ii) the maximum
amount of such insurance required by the terms of the related Mortgage and as is
available for the related  property under the national flood  insurance  program
(assuming  that the area in which such property is located is  participating  in
such program).  Costs to the Master Servicer of maintaining  insurance  policies
pursuant to this Section 3.8 shall be paid by the Master Servicer as a Servicing
Advance and shall be  reimbursable  to the Master  Servicer with interest at the
Advance  Rate,  and  costs to the  Special  Servicer  of  maintaining  insurance
policies pursuant to this Section 3.8 shall be paid and reimbursed in accordance
with Section 3.17(b).

      The Master  Servicer,  with  respect to  Mortgage  Loans,  and the Special
Servicer,  with  respect to REO  Properties,  agree to prepare and  present,  on
behalf of itself,  the Trustee  and the  Certificateholders,  claims  under each
related insurance policy, including without limitation,  environmental insurance
policies,  maintained  pursuant to this  Section  3.8(a) in a timely  fashion in
accordance  with the terms of such policy and to take such  reasonable  steps as
are necessary to receive payment or to permit recovery thereunder.

      The Master  Servicer  (or with  respect to any REO  Property,  the Special
Servicer)  shall require that all insurance  policies  required  hereunder shall
name the Trustee or the Master  Servicer (or with  respect to any REO  Property,
the Special Servicer),  on behalf of the Trustee as the mortgagee, as loss payee
and that all such  insurance  policies  require that 30 days' notice be given to
the Master  Servicer  before  termination to the extent  required by the related
Mortgage Loan Documents.

     (b) (i) If the Master Servicer or Special Servicer, as applicable,  obtains
and  maintains a blanket  insurance  policy with a Qualified  Insurer at its own
expense insuring against fire and hazard losses,  18-month rent interruptions or
other  required  insurance  on all of the  Mortgage  Loans and  provides no less
coverage in scope and amount for such  Mortgaged  Property or REO Property  than
the insurance  required to be maintained  pursuant to Section  3.8(a),  it shall
conclusively  be  deemed  to  have  satisfied  its  obligations  concerning  the
maintenance of such  insurance  coverage set forth in Section  3.8(a),  it being
understood and agreed that such policy may contain a deductible clause, in which
case the Master Servicer or

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<PAGE>


Special  Servicer,  as applicable,  shall, in the event that (x) there shall not
have been maintained on one or more of the related Mortgaged Properties a policy
otherwise  complying with the provisions of Section 3.8(a),  and (y) there shall
have been one or more losses  which would have been covered by such a policy had
it been maintained, immediately deposit into the Collection Account from its own
funds the amount not otherwise  payable under the blanket policy because of such
deductible clause to the extent that any such deductible  exceeds the deductible
limitation  that  pertained to the related  Mortgage Loan, or, in the absence of
such deductible  limitation,  the deductible limitation for an individual policy
which  is  consistent  with  the  Servicing  Standard.  In  connection  with its
activities as Master Servicer or Special Servicer hereunder, as applicable,  the
Master Servicer and the Special Servicer each agrees to prepare and present,  on
behalf of itself,  the Trustee  and  Certificateholders,  claims  under any such
blanket  policy which it maintains in a timely  fashion in  accordance  with the
terms of such  policy  and to take such  reasonable  steps as are  necessary  to
receive payment or permit recovery thereunder.

                (ii) If  the  Master  Servicer  or  the  Special  Servicer,   as
applicable,  causes any  Mortgaged  Property or REO  Property to be covered by a
master  force  placed  insurance  policy,  which policy is issued by a Qualified
Insurer  and  provides no less  coverage in scope and amount for such  Mortgaged
Property or REO Property than the insurance  required to be maintained  pursuant
to Section 3.8(a), the Master Servicer or Special Servicer shall conclusively be
deemed to have  satisfied  its  obligations  to maintain  insurance  pursuant to
Section 3.8(a).  Such policy may contain a deductible  clause, in which case the
Master Servicer or Special Servicer, as applicable, shall, in the event that (x)
there shall not have been  maintained on the related  Mortgaged  Property or REO
Property a policy otherwise complying with the provisions of Section 3.8(a), and
(y) there  shall have been one or more losses  which would have been  covered by
such a policy had it been  maintained,  immediately  deposit into the Collection
Account from its own funds the amount not  otherwise  payable  under such policy
because of such  deductible to the extent that any such  deductible  exceeds the
deductible  limitation  that pertained to the related  Mortgage Loan, or, in the
absence of any such  deductible  limitation,  the  deductible  limitation for an
individual policy which is consistent with the Servicing Standard.

     (c) Each of the Master  Servicer and the Special  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 its officers and  employees 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 FNMA or FHLMC,  whichever is greater,
with respect to the Master Servicer or Special Servicer,  as the case may be, if
the Master Servicer or Special Servicer,  as the case may be, were servicing and
administering  the  Mortgage  Loans  and/or  REO  Properties  for  which  it  is
responsible  hereunder for FNMA or FHLMC. Coverage of the Master Servicer or the
Special Servicer as an additional  insured under a policy or bond obtained by an
Affiliate of such Person shall satisfy the  requirements of this Section 3.8(c).
All fidelity bonds and policies of errors and omissions insurance obtained under
this Section 3.8(c) shall be issued by a Qualified Insurer.  Notwithstanding the
foregoing,  so long as the long-term  unsecured  debt  obligations of the Master
Servicer or Special Servicer, as applicable,  or its respective corporate parent
have been  rated "A" or  better by Fitch or "A2" or better by  Moody's  (or such
lower rating for which Rating Agency Confirmation has been obtained), the Master
Servicer  or Special  Servicer,  as  applicable,  shall be  entitled  to provide
self-insurance   or  obtain  from  its  respective   corporate  parent  adequate
insurance, as applicable, with respect to its obligation hereunder to maintain a
fidelity bond or an errors and omissions insurance policy.


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<PAGE>


     Section 3.9.   Enforcement of Due-On-Sale Clauses; Assumption Agreements.
                    ---------------------------------------------------------

     (a)  If  any  Mortgage  Loan  contains  a  provision  in  the  nature  of a
"due-on-sale" clause, which, by its terms:

                (i) provides  that  such  Mortgage  Loan  shall  (or  may at the
related  mortgagee's  option)  become  due and  payable  upon  the sale or other
transfer of an interest in the related Mortgaged Property, or

                (ii) provides that such Mortgage Loan may not be assumed without
the consent of the related  mortgagee in connection  with any such sale or other
transfer,

then,  for so long as such  Mortgage  Loan is included  in the Trust  Fund,  the
Master  Servicer (or the Special  Servicer  with  respect to Specially  Serviced
Mortgage Loans) on behalf of the Trust Fund,  shall exercise (or waive its right
to  exercise)  (subject  to  Sections  3.27 and  3.28) the  trustee's  rights as
mortgagee  under such provision in accordance  with the Servicing  Standard.  In
making such  determination,  the Master  Servicer (or the Special  Servicer with
respect to Specially  Serviced Mortgage Loans) shall,  among other things,  take
into account, subject to the Servicing Standard and the Mortgage Loan Documents,
any increase in taxes (based on a fully  assessed  number  calculated off of the
proposed  purchase  price) as a result of the transfer.  The Master Servicer (or
the Special  Servicer with respect to Specially  Serviced  Mortgage Loans) shall
compute a debt  service  coverage  ratio for the  Mortgage  Loan  using  leasing
commissions,  tenant  improvement costs and capital  expenditures  deducted from
cash flow in amounts  equal to the  originator's  capital  expenditures,  tenant
improvement  costs and leasing  commission  items at origination as reflected in
the Asset  Summary  for the  related  Mortgage  Loan and taxes  based on a fully
assessed number  calculated off of the proposed purchase price and shall provide
copies of the  results  of such  calculation  to each  Rating  Agency  showing a
comparison  of the  recalculated  debt  service  coverage  ratio versus the debt
service  coverage ratio at origination.  Notwithstanding  the foregoing,  if the
Mortgage  Loan is within  the Review  Threshold,  the  Master  Servicer  (or the
Special Servicer with respect to Specially  Serviced  Mortgage Loans) shall have
first obtained Rating Agency  Confirmation.  The Master Servicer (or the Special
Servicer with respect to Specially Serviced Mortgage Loans) shall not consent to
such sale,  transfer or assumption without (a) requiring the Borrower to pay the
cost of obtaining any required Rating Agency  Confirmation or (b) satisfying the
costs of obtaining  such Rating Agency  Confirmation  by other means but, in any
event, at no cost to the Trust Fund; provided,  however,  that in no event shall
the proposed "other means" result in any liability to the Trust Fund,  including
an  indemnification  of the Master  Servicer or the Special  Servicer  which may
result in legal  expenses  to the Trust  Fund.  The  Master  Servicer  shall not
consent to any sale,  transfer or assumption  without  obtaining the approval of
the Special  Servicer.  Subject to the  foregoing,  the Master  Servicer (or the
Special  Servicer  with  respect  to  Specially   Serviced  Mortgage  Loans)  is
authorized to take or enter into an assumption agreement from or with the Person
to whom  such  Mortgaged  Property  has been or is about to be  conveyed,  or to
release the original related Borrower from liability upon such Mortgage Loan and
substitute the new Borrower as obligor thereon.  To the extent permitted by law,
the Master Servicer (or the Special Servicer with respect to Specially  Serviced
Mortgage Loans) shall enter into an assumption or substitution agreement only if
the credit status of the  prospective new Borrower is in compliance with (x) the
Master Servicer's (or the Special  Servicer's with respect to Specially Serviced
Mortgage Loans) regular commercial  mortgage  origination or servicing standards
and criteria,  (y) the terms of the related  Mortgage Loan and (z) the Servicing
Standard. The Master Servicer (or the Special Servicer with respect to Specially
Serviced Mortgage Loans) shall notify the Trustee that any

                                       77
<PAGE>


such  assumption or  substitution  agreement has been completed by forwarding to
the Trustee the original of such agreement, which document shall be added to the
related Mortgage File and shall, for all purposes,  be considered a part of such
Mortgage  File  to the  same  extent  as all  other  documents  and  instruments
constituting  a part thereof and the Trustee shall notify the Operating  Adviser
and  each  Rating  Agency  of each  assumption.  In  connection  with  any  such
assumption or substitution  agreement,  the Mortgage Rate,  principal amount and
other  material  payment  terms  (including  any   cross-collateralization   and
cross-default provisions) of such Mortgage Loan pursuant to the related Note and
Mortgage  shall not be  changed,  other  than in  connection  with a default  or
reasonably  foreseeable  default with respect to the Mortgage  Loan.  Assumption
fees collected by the Master Servicer or the Special  Servicer for entering into
an assumption or substitution  agreement will be retained by the Master Servicer
and/or the Special Servicer as additional  servicing  compensation to the extent
provided in Section 3.12.  Notwithstanding  the foregoing,  the Special Servicer
may consent to the  assumption of a Mortgage Loan by a prospective  new Borrower
in a bankruptcy proceeding involving the related Mortgaged Property.

     (b)  If  any  Mortgage  Loan  contains  a  provision  in  the  nature  of a
"due-on-encumbrance" clause, which, by its terms:

                (i) provides  that  such  Mortgage  Loan  shall  (or  may at the
related mortgagee's option) become due and payable upon the creation of any lien
or other encumbrance on such Mortgaged Property, or

                (ii) requires   the   consent  of the related  mortgagee  to the
creation of any such lien or other encumbrance on such Mortgaged Property,

then,  for so long as such  Mortgage  Loan is included  in the Trust  Fund,  the
Master  Servicer (or the Special  Servicer  with  respect to Specially  Serviced
Mortgage Loans), on behalf of the Trust Fund, shall exercise (or waive its right
to exercise) (subject to Sections 3.27 and 3.28) the Trustee's rights under such
provision  to (x)  accelerate  the payments due on such  Mortgage  Loan,  or (y)
withhold its consent to the creation of any such lien or other  encumbrance,  as
applicable, except, in each case, to the extent that the Master Servicer (or the
Special  Servicer with respect to Specially  Serviced  Mortgage Loans) acting in
accordance with the Servicing  Standard,  determines that such enforcement would
not be in the best  interests  of the Trust  Fund;  provided  that,  the  Master
Servicer (or the Special  Servicer with respect to Specially  Serviced  Mortgage
Loans) will not consent to the creation of any such lien or  encumbrance  unless
it shall have first obtained Rating Agency  Confirmation (the Master Servicer or
the Special Servicer,  as applicable,  shall use its reasonable  efforts to have
the cost, if any, of obtaining such confirmation  paid by the Borrower;  if such
cost is not paid by the Borrower,  the Master Servicer shall advance such amount
as a Servicing Advance, unless such Advance would be a Nonrecoverable  Advance).
The Master Servicer shall not consent to the creation of any lien or encumbrance
without  obtaining  the approval of the Special  Servicer.  Notwithstanding  the
foregoing,    the   Special    Servicer   may   forbear   from   enforcing   any
due-on-encumbrance provision in connection with any junior or senior lien on the
Mortgaged  Property  imposed  in  connection  with  any  bankruptcy   proceeding
involving the Mortgaged Property.

(c)  Nothing in this  Section  3.9 shall  constitute  a waiver of the  Trustee's
right,  as the  mortgagee of record,  to receive  notice of any  assumption of a
Mortgage Loan, any sale or other transfer of the related  Mortgaged  Property or
the creation of any lien or other  encumbrance  with  respect to such  Mortgaged
Property.

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<PAGE>


     (d) With  respect  to a request  to the  Special  Servicer  from the Master
Servicer  for  approval  for the  assumption  or waiver of a  due-on-encumbrance
clause of a Mortgage  Loan that would not  require  Rating  Agency  review,  the
Special  Servicer shall notify the Master  Servicer of its decision  within five
Business Days of receiving notice (and all supporting  documentation  reasonably
required by the Special  Servicer for its analysis) from the Master  Servicer of
the  Master  Servicer's  decision  to  approve  the  assumption  or  waiver of a
due-on-encumbrance  clause of a Mortgage Loan; which approval shall be deemed to
have been given if the Special  Servicer does not notify the Master  Servicer of
its decision during such five Business Day period.

          Section 3.10.     Realization Upon Mortgage Loans.
                            -------------------------------

     (a) With  respect to any  Specially  Serviced  Mortgage  Loan,  the Special
Servicer shall determine, in accordance with the Servicing Standard,  whether to
grant a  modification,  waiver  or  amendment  of the  terms  of such  Specially
Serviced Mortgage Loan,  (subject to the limitations  contained in Section 3.28)
commence  foreclosure  proceedings  or attempt to sell such  Specially  Serviced
Mortgage Loan with  reference to which course of action is reasonably  likely to
produce a greater  recovery  on a net present  value basis with  respect to such
Specially Serviced Mortgage Loan.

     (b) In connection  with any  foreclosure or other  acquisition,  the Master
Servicer  shall,  at the  direction of the Special  Servicer,  pay the costs and
expenses in any such proceedings as an Advance.

                  If the Special  Servicer elects to proceed with a non-judicial
foreclosure in accordance with the laws of the state where the related Mortgaged
Property is  located,  the  Special  Servicer  shall not be required to pursue a
deficiency  judgment  against the related  Borrower or any other liable party if
the  laws of  such  state  do not  permit  such a  deficiency  judgment  after a
non-judicial  foreclosure  or  if  the  Special  Servicer  determines,   in  its
reasonable  judgment,  that the likely  recovery  if a  deficiency  judgment  is
obtained  will not be  sufficient  to warrant  the cost,  time,  expense  and/or
exposure of pursuing such a deficiency judgment.

                  In the event that title to any Mortgaged  Property is acquired
in  foreclosure  or by deed in lieu of  foreclosure,  the deed or certificate of
sale shall be issued to the Trustee,  or to its nominee (which shall not include
the Master Servicer or the Special Servicer) or a separate trustee or co-trustee
on behalf of the Trustee,  as the holder of the REMIC I Regular Interests and as
Trustee for the  Certificateholders.  Notwithstanding  any such  acquisition  of
title and  cancellation  of the related  Mortgage Loan, such Mortgage Loan shall
(except for purposes of Section 9.1) be considered to be a Mortgage Loan held in
the Trust Fund until such time as the related REO Property  shall be sold by the
Trust Fund and the Stated  Principal  Balance of each REO Mortgage Loan shall be
reduced by any Net REO Proceeds  allocated  to  principal.  Consistent  with the
foregoing,  for purposes of all calculations hereunder, so long as such Mortgage
Loan shall be considered to be an outstanding Mortgage Loan:

                (i) it  shall  be   assumed  that,  notwithstanding   that   the
indebtedness evidenced by the related Note shall have been discharged, such Note
and, for purposes of  determining  the Stated  Principal  Balance  thereof,  the
related  amortization  schedule in effect at the time of any such acquisition of
title, remain in effect; and

                (ii)  Net REO  Proceeds  received  in  any month shall be deemed
to be treated:  first, as a recovery of any related and  unreimbursed  Servicing
Advances and, if

                                       79
<PAGE>


applicable,  unpaid Liquidation  Expenses;  second, as a recovery of accrued and
unpaid interest on the related REO Mortgage Loan to, but not including,  the Due
Date in the Collection Period of receipt, exclusive,  however, of any portion of
such accrued and unpaid interest that  constitutes  Default  Interest or, in the
case of an REO Mortgage Loan that relates to a Hyper-Amortization Loan after its
Hyper-Amortization  Date,  that  constitutes  Deferred  Interest;  third,  as  a
recovery of  principal  of the related  REO  Mortgage  Loan to the extent of its
entire unpaid principal balance; fourth, as a recovery of any Prepayment Premium
deemed to be due and owing in respect of the related REO Mortgage  Loan;  fifth,
as a recovery of any other amounts  deemed to be due and owing in respect of the
related REO Mortgage  Loan (other than, in the case of an REO Mortgage Loan that
relates to a Hyper-Amortization Loan after its Hyper-Amortization  Date, accrued
and unpaid  Deferred  Interest);  and sixth, in the case of an REO Mortgage Loan
that relates to a Hyper-Amortization Loan after its Hyper-Amortization Date, any
accrued and unpaid Deferred Interest.

     (c)  Notwithstanding  any provision to the contrary,  the Special  Servicer
shall not  acquire  for the  benefit  of the Trust  Fund any  personal  property
pursuant to this Section 3.10 unless either:

                (i) such personal property is incident to real property  (within
the  meaning  of  Section  856(e)(1)  of the Code) so  acquired  by the  Special
Servicer for the benefit of the Trust Fund; or

                (ii) the Special  Servicer  shall have  requested  and  received
an Opinion of Counsel (the cost of such opinion shall be advanced as a Servicing
Advance,  unless such Advance would be a  Nonrecoverable  Advance) to the effect
that the  holding  of such  personal  property  by REMIC I will  not  cause  the
imposition of a tax on REMIC I, REMIC II or REMIC III under the REMIC Provisions
or cause  REMIC I,  REMIC II or REMIC III to fail to  qualify  as a REMIC at any
time that any Certificate is outstanding.

     (d)  Notwithstanding  any provision to the contrary in this Agreement,  the
Special  Servicer  shall not, on behalf of the Trust Fund,  obtain  title to any
direct or indirect partnership interest or other equity interest in any Borrower
pledged  pursuant to any pledge agreement unless the Special Servicer shall have
requested  and received an Opinion of Counsel (the cost of such opinion shall be
advanced as a Servicing  Advance,  unless such Advance would be a Nonrecoverable
Advance)  to the effect  that the holding of such  partnership  or other  equity
interest  by the Trust Fund will not cause the  imposition  of a tax on REMIC I,
REMIC II or REMIC III under the REMIC  Provisions  or cause REMIC I, REMIC II or
REMIC  III to fail to  qualify  as a REMIC at any time that any  Certificate  is
outstanding.

     (e)  Notwithstanding  any  provision  to the  contrary  contained  in  this
Agreement,  the Special Servicer shall not, on behalf of the Trust Fund,  obtain
title to a  Mortgaged  Property  as a  result  of or in lieu of  foreclosure  or
otherwise obtain title to any direct or indirect  partnership  interest or other
equity  interest in any  Borrower  pledged  pursuant to a pledge  agreement  and
thereby be the beneficial owner of a Mortgaged Property, and shall not otherwise
acquire  possession  of, or take any other action with respect to, any Mortgaged
Property if, as a result of any such action, the Trustee,  for the Trust Fund or
the  Certificateholders,  would  be  considered  to  hold  title  to,  to  be  a
"mortgagee-in-possession"  of,  or  to be  an  "owner"  or  "operator"  of  such
Mortgaged  Property  within  the  meaning  of  the  Comprehensive  Environmental
Response,  Compensation and Liability Act of 1980, as amended from time to time,
or any comparable law, unless the Special Servicer has previously  determined in
accordance   with  the  Servicing   Standard,   based  on  an  updated  Phase  I
Environmental

                                       80
<PAGE>


Assessment  report prepared (not more than 12 months prior to the taking of such
action) by a Qualified Environmental Consultant, that:

                        (A) such  Mortgaged  Property  is  in  compliance   with
applicable  environmental  laws or, if not, after  consultation with a Qualified
Environmental Consultant,  that it would be in the best economic interest of the
Trust  Fund to take  such  actions  as are  necessary  to bring  such  Mortgaged
Property in compliance therewith, and

                        (B) there are no circumstances present at such Mortgaged
Property relating to the use,  management or disposal of any Hazardous Materials
for  which  investigation,   testing,  monitoring,   containment,   clean-up  or
remediation could be required under any currently  effective  federal,  state or
local law or regulation,  or that, if any such  Hazardous  Materials are present
for which such action could be  required,  after  consultation  with a Qualified
Environmental Consultant, it would be in the best economic interest of the Trust
Fund to take such actions with respect to such Mortgaged Property.

      In the event that the Phase I Environmental  Assessment  first obtained or
updated by the Special Servicer with respect to a Mortgaged  Property  indicates
that  such  Mortgaged   Property  may  not  be  in  compliance  with  applicable
environmental  laws or that  Hazardous  Materials  may be  present  but does not
definitively  establish such fact, the Special Servicer shall cause such further
environmental  tests as the Special  Servicer  shall deem prudent to protect the
interests of  Certificateholders  to be  conducted by a Qualified  Environmental
Consultant.  Any such tests  shall be deemed  part of the Phase I  Environmental
Assessment  obtained by the Special  Servicer for purposes of this Section 3.10.
The Master  Servicer shall at the direction of the Special  Servicer pay for the
cost of  preparation  of such Phase I  Environmental  Assessments as well as the
cost of any remedial, corrective or other further action contemplated by clauses
(A) and/or (B) of this  Section  3.10(e) as a  Servicing  Advance,  unless  such
Advance would be a Nonrecoverable Advance.

     (f) The  Special  Servicer  shall  report  to the  IRS  and to the  related
Borrower,  in the manner required by applicable law, the information required to
be reported  regarding any Mortgaged  Property which is abandoned or foreclosed.
The Special Servicer shall deliver a copy of any such report to the Trustee.

          Section 3.11.  Trustee to Cooperate; Release of Mortgage Files.
                         -----------------------------------------------

      Upon the  payment  in full of any  Mortgage  Loan,  or the  receipt by the
Master  Servicer of a  notification  that payment in full has been escrowed in a
manner customary for such purposes, the Master Servicer shall immediately notify
the Trustee and the  Custodian by a  certification  (which  certification  shall
include a statement to the effect that all amounts received or to be received in
connection  with  such  payment  which  are  required  to be  deposited  in  the
Collection Account pursuant to Section 3.5(a) have been or will be so deposited)
of a Servicing Officer and shall request delivery to it of the Mortgage File. No
expenses  incurred in connection  with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Trust Fund.

      From time to time upon  request  of the  Master  Servicer  or the  Special
Servicer,  and  delivery  to the  Trustee  and the  Custodian  of a Request  for
Release,  the Trustee shall promptly cause the Custodian to release the Mortgage
File (or any  portion  thereof)  designated  in such  Request for Release to the
Master Servicer or the Special Servicer, as applicable. Upon receipt of (a) such
Mortgage File (or portion  thereof) by the Custodian from the Master Servicer or
the

                                       81
<PAGE>


Special  Servicer,  as  applicable,  or (b) in the  event  of a  liquidation  or
conversion of the related Mortgage Loan into an REO Property, a certificate of a
Servicing  Officer  stating that such Mortgage Loan was  liquidated and that all
amounts received or to be received in connection with such liquidation which are
required to be deposited into the  Collection  Account or  Distribution  Account
have been so  deposited,  or that such Mortgage Loan has become an REO Property,
the Custodian shall return the Request for Release to the Master Servicer or the
Special Servicer, as applicable.

      Upon  written  certification  of a Servicing  Officer,  the Trustee  shall
execute and deliver to the Special  Servicer any court  pleadings,  requests for
trustee's sale or other documents  prepared by the Special Servicer,  its agents
or attorneys,  necessary to the  foreclosure or trustee's sale in respect of the
Mortgaged Property or to any legal action brought to obtain judgment against any
Borrower on the related Note or Mortgage or to obtain a deficiency judgment,  or
to enforce  any other  remedies  or rights  provided by such Note or Mortgage or
otherwise available at law or in equity. Each such certification shall include a
request  that such  pleadings  or  documents  be  executed  by the Trustee and a
statement as to the reason such documents or pleadings are required and that the
execution and delivery  thereof by the Trustee will not  invalidate or otherwise
affect the lien of the related  Mortgage,  except for the  termination of such a
lien upon completion of the foreclosure or trustee's sale.

          Section 3.12.  Servicing Compensation.
                         ----------------------

     (a) As compensation for its activities hereunder, the Master Servicer shall
be  entitled to the Master  Servicer  Fee,  which  shall be payable  solely from
receipts on the related  Mortgage  Loans,  and may be withheld  from payments on
account  of  interest  prior to  deposit in the  Collection  Account,  or may be
withdrawn from certain  amounts on deposit in the  Collection  Account as and to
the extent set forth in Section 3.6(a)(iv).  The Master Servicer's rights to the
Master  Servicer  Fee may not be  transferred  in  whole  or in part  except  in
connection  with the transfer of all of the Master  Servicer's  responsibilities
and obligations under this Agreement.  In addition, the Master Servicer shall be
entitled  to   receive,   as   additional   servicing   compensation,   (i)  any
Prepayment/Balloon   Payment  Interest  Excess  (to  the  extent  not  otherwise
allocable to offset Prepayment/Balloon Payment Interest Shortfalls in accordance
with  Section  3.25),  (ii) to the extent  permitted by  applicable  law and the
related Notes and  Mortgages,  any late payment  charges or late fees or Default
Interest (to the extent not used to offset Advance  Interest Amounts as provided
herein),  NSF check  charges  (including  with  respect  to  Specially  Serviced
Mortgage  Loans),  demand  fees,  Loan  Service  Transaction  Fees,  beneficiary
statement  charges,  or similar items (but not including any Default Interest or
Prepayment  Premiums),  in each case to the extent  received with respect to any
Mortgage Loan that is not a Specially  Serviced  Mortgage Loan and (iii) 66-2/3%
of any extension  fees,  modification  fees,  consent fees and  assumption  fees
collected on any Mortgage Loan that is not a Specially  Serviced  Mortgage Loan.
The  Master  Servicer  shall  also be  entitled  pursuant  to, and to the extent
provided in,  Section  3.7(b) to withdraw  from the  Collection  Account and the
Grantor Trust  Collection  Account and to receive from the Reserve  Accounts (to
the extent not  required  to be paid to the  related  Borrower  pursuant  to the
related  Mortgage Loan Documents or applicable law) any interest or other income
earned on deposits therein.

                  Notwithstanding  anything herein to the contrary,  Midland may
at its  option  assign or pledge to any third  party or retain  for  itself  the
Transferable  Servicing Interest;  provided,  however,  that in the event of any
resignation or termination of the Master Servicer, all

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<PAGE>


or any  portion of the  Transferable  Servicing  Interest  may be reduced by the
Trustee  to the  extent  reasonably  necessary  (in the sole  discretion  of the
Trustee) for the Trustee to obtain a qualified  successor Master Servicer (which
successor may include the Trustee) that meets the requirements of Section 6.4(b)
and who requires market rate servicing  compensation that accrues at a per annum
rate in excess of the Minimum  Master  Servicer  Fee Rate.  The Master  Servicer
shall pay the Transferable  Servicing Interest to the holder of the Transferable
Servicing  Interest (i.e.,  Midland or any such third party) at such time and to
the extent the Master  Servicer  is  entitled  to receive  payment of its Master
Servicer Fees  hereunder,  notwithstanding  any  resignation  or  termination of
Midland hereunder (subject to reduction pursuant to the preceding sentence).

                  Except as otherwise provided herein, the Master Servicer shall
pay all expenses  incurred by it in  connection  with its  servicing  activities
hereunder.  The Master  Servicer  shall  promptly  pay, when due, out of its own
funds,  all  surveillance  fees  of  Moody's  relating  to  the  rating  of  the
Certificates  (the  surveillance fees of Fitch having been paid in advance prior
to the Startup Day).

     (b) As  compensation  for its activities  hereunder,  the Special  Servicer
shall be entitled  to the  Standby  Special  Servicer  Fee with  respect to each
Mortgage  Loan and the  Special  Servicer  Fee with  respect  to each  Specially
Serviced  Mortgage  Loan,  which shall be payable from amounts on deposit in the
Collection  Account as set forth in Section  3.6(a)(iv).  The Special Servicer's
rights to the Standby Special  Servicer Fee and the Special Servicer Fee may not
be transferred in whole or in part except in connection with the transfer of all
of the Special Servicer's responsibilities and obligations under this Agreement.
The  Special  Servicer  shall also be  entitled  pursuant  to, and to the extent
provided  in,  Section  3.7(b) to withdraw  from any REO Account any interest or
other income earned on deposits therein.

                  In  addition,  the  Special  Servicer  shall  be  entitled  to
receive,  as  additional  Servicing  Compensation,  to the extent  permitted  by
applicable law and the related Notes and Mortgages,  any late payment charges or
late fees or Default Interest (to the extent not used to offset Advance Interest
Amounts as provided  herein),  demand fees,  assumption fees, loan  modification
fees,  extension fees, consent fees, Loan Service Transaction Fees,  beneficiary
statement charges, or similar items (but not including any Prepayment Premiums),
in each case to the  extent  received  with  respect to any  Specially  Serviced
Mortgage  Loan.  The Special  Servicer  shall also be  entitled  to receive,  as
additional Servicing Compensation, to the extent permitted by applicable law and
the related Notes and  Mortgages,  33-1/3% of any extension  fees,  modification
fees, consent fees and assumption fees to the extent collected on Mortgage Loans
that are not Specially Serviced Mortgage Loans.

                  Furthermore,   the  Special  Servicer  shall  be  entitled  to
receive, as additional Servicing Compensation, a workout fee (the "Workout Fee")
equal to the product of 1.0% and the amount of Net  Collections  received by the
Master Servicer or the Special Servicer with respect to each Corrected  Mortgage
Loan. If any Corrected Mortgage Loan again becomes a Specially Serviced Mortgage
Loan,  any right to the Workout Fee with respect to such Mortgage Loan earned in
connection with the initial modification, restructuring or workout thereof shall
terminate,  and the Special  Servicer shall be entitled to a new Workout Fee for
such Mortgage Loan upon resolution or workout of the subsequent event of default
under such Mortgage  Loan. If the Special  Servicer is terminated for any reason
hereunder  it shall  retain the right to receive  any  Workout  Fees  payable in
respect of any Mortgage Loans which became  Corrected  Mortgage Loans during the
period that it acted as Special  Servicer  (and the successor  Special  Servicer
shall

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<PAGE>


not be  entitled to any portion of such  Workout  Fees),  in each case until the
Workout Fees for any such Mortgage Loan ceases to be payable in accordance  with
this paragraph.

                  Except as  otherwise  provided  herein,  the Special  Servicer
shall  pay  all  expenses  incurred  by  it in  connection  with  its  servicing
activities hereunder.

     (c) In addition to other Special Servicer compensation provided for in this
Agreement,  and not in lieu thereof,  the Special  Servicer shall be entitled to
the  Disposition  Fee payable out of certain  Liquidation  Proceeds prior to the
deposit of the related Net Liquidation  Proceeds in the Collection Account and a
fee of 0.25% of the unpaid  balance of any Mortgage  Loan or REO  Mortgage  Loan
repurchased  from the Trust Fund  pursuant to Section 2.3, as provided in clause
(c) of the definition of Repurchase Price.

     (d) If the Master Servicer,  the Special Servicer or the Trustee receives a
request or inquiry from a Borrower,  any  Certificateholder  or any other Person
the response to which would, in the Master Servicer's, the Special Servicer's or
the  Trustee's  good  faith  business   judgment,   require  the  assistance  of
Independent  legal  counsel  or other  consultant  to the Master  Servicer,  the
Special  Servicer or the  Trustee,  the cost of which would not be an expense of
the Trust Fund hereunder,  then the Master Servicer, the Special 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  or such other Person, as applicable,  makes  arrangements for
the  payment of the Master  Servicer's,  the  Special  Servicer's  or  Trustee's
expenses  associated with such counsel or other consultant  (including,  without
limitation,  posting an advance  payment for such expenses)  satisfactory to the
Master Servicer, the Special Servicer or the Trustee, as the case may be, in its
sole discretion.  Unless such  arrangements have been made, the Master Servicer,
the Special 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.

          Section 3.13.  Reports to the Trustee; Collection Account Statements.
                         -----------------------------------------------------

     (a) The Master  Servicer shall deliver to the Paying Agent (in  electronic,
downloadable format reasonably  acceptable to the Master Servicer and the Paying
Agent), with a copy to the Trustee, the Fiscal Agent and each Rating Agency, (i)
no later  than 3:00  p.m.  on the  third  Business  Day  preceding  the  related
Distribution  Date (A) the  Servicer  Remittance  Report  with  respect  to such
Determination Date (which shall include,  without limitation,  the amount of the
Master Servicer  Remittance Amount for the related  Distribution Date) and (B) a
written  statement of required P&I Advances for the related  Determination  Date
together with the  certificate and  documentation  required by the definition of
Nonrecoverable  Advance related to any  determination  that any such P&I Advance
would constitute a Nonrecoverable  Advance made as of such  Determination  Date.
The Master Servicer shall not be required to prepare and deliver any of the CMSA
IRP  reports  and files  that it is  required  to deliver  (other  than the Loan
Periodic Update File) before the third Distribution Date after the Startup Day.

     (b) For so long as the Master  Servicer makes deposits into and withdrawals
from the Collection Account, not later than fifteen days after each Distribution
Date, the Master  Servicer shall forward to the Trustee a statement  prepared by
the Master Servicer setting forth the status of the Collection Account as of the
close of business on the last  Business  Day of the  related  Collection  Period
showing  the  aggregate  amount  of  deposits  into  and  withdrawals  from  the
Collection  Account for each  category of deposit  specified  in Section 3.5 and
each category of withdrawal specified in Section 3.6 for such Collection Period.

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<PAGE>


     (c) 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
Master Servicer or the Special Servicer pursuant to this Agreement.

          Section 3.14.  Annual Statement as to Compliance.
                         ---------------------------------

      The Master Servicer and the Special Servicer shall deliver to the Trustee,
the Rating Agencies,  the Depositor and, upon request,  the Operating Adviser on
or before March 15 of each year,  beginning  with March 15,  2001,  an Officer's
Certificate  stating,  as to each  signatory  thereof,  (i) that a review of the
activities of the Master Servicer or the Special Servicer, as applicable, during
the preceding calendar year (or such shorter period from the Closing Date to the
end of the related  calendar year) and of its  performance  under this Agreement
has been made under such officer's  supervision,  (ii) that, to the best of such
officer's  knowledge,  based on such  review,  it has  fulfilled in all material
respects all of its  obligations  under this Agreement  throughout such year (or
such shorter period),  or, if there has been a default in the fulfillment of any
such obligation,  specifying each such default known to such officer, the nature
and status  thereof and what action it  proposes to take with  respect  thereto,
(iii) that,  to the best of such  officer's  knowledge,  each  Sub-Servicer  has
fulfilled  its  obligations  under its  Sub-Servicing  Agreement in all material
respects,  or, if there has been a material  default in the  fulfillment of such
obligations,  specifying  each such default known to such officer and the nature
and status  thereof,  and (iv)  whether  it has  received  any notice  regarding
qualification, or challenging the status, of REMIC I, REMIC II or REMIC III as a
REMIC from the IRS or any other governmental agency or body; provided, that each
of the Master  Servicer and the Special  Servicer shall not be required to cause
the delivery of such Officer's  Certificate  until April 15 in any given year so
long as it has received written confirmation from the Depositor that a Report on
Form 10-K is not  required  to be filed in  respect  of the  Trust  Fund for the
preceding calendar year.

          Section 3.15.  Annual Independent Public Accountants' Servicing
                         ------------------------------------------------
Report.
-------

      On or before noon  (Eastern  time) on March 31 of each  calendar  year (or
March 30 if a leap  year),  beginning  with 2001,  the Master  Servicer  and the
Special  Servicer at their expense shall cause a nationally  recognized  firm of
Independent public accountants (who may also render other services to the Master
Servicer or the Special Servicer,  as applicable) to furnish to the Trustee, the
Depositor (in  electronic  format),  each Rating  Agency and, upon request,  the
Operating  Adviser a statement to the effect that such firm has examined certain
documents and records relating to the servicing of the Mortgage Loans under this
Agreement or the servicing of mortgage loans similar to the Mortgage Loans under
substantially  similar  agreements for the preceding  calendar year and that the
assertion  of  management  of  the  Master  Servicer  or  Special  Servicer,  as
applicable,  that it maintained an effective  internal  control  system over the
servicing of such  mortgage  loans is fairly  stated in all  material  respects,
based upon established criteria,  which statement meets the standards applicable
to accountant's reports intended for general distribution; provided that each of
the Master Servicer and the Special  Servicer shall not be required to cause the
delivery  of such  statement  until April 15 in any given year so long as it has
received written  confirmation  from the Depositor that a Report on Form 10-K is
not required to be filed in respect of the Trust Fund for the preceding calendar
year.

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<PAGE>



          Section 3.16.  Access to Certain Documentation.
                         -------------------------------

     (a) The Master  Servicer  and the  Special  Servicer  shall  provide to any
Certificateholders  that  are  federally  insured  financial  institutions,  the
Federal  Reserve  Board,  the FDIC and the OTS and the  supervisory  agents  and
examiners of such boards and such  corporations,  and any other  governmental or
regulatory body to the jurisdiction of which any  Certificateholder  is subject,
access to the documentation  regarding the Mortgage Loans required by applicable
regulations of the Federal Reserve Board,  FDIC, OTS or any such governmental or
regulatory  body,  such access being afforded only upon  reasonable  request and
during  normal  business  hours at the  offices  of the Master  Servicer  or the
Special Servicer, as applicable.

     (b) Nothing in this Section 3.16 shall  detract from the  obligation of the
Master  Servicer or the Special  Servicer to observe any  applicable  law or any
provisions of the Mortgage Loan Documents prohibiting  disclosure of information
with  respect to the  Borrowers or the  Mortgage  Loans,  and the failure of the
Master  Servicer or the Special  Servicer,  as applicable,  to provide access as
provided  in  this  Section  3.16  as a  result  of such  obligation  shall  not
constitute a breach of this Section 3.16.

          Section 3.17.  Title and Management of REO Properties.
                         --------------------------------------

     (a) In the event that title to any  Mortgaged  Property is acquired for the
benefit of  Certificateholders in foreclosure or by deed in lieu of foreclosure,
the deed or  certificate  of sale shall be taken in the name of the Trustee,  or
its  nominee  (which  shall not  include  the  Master  Servicer  or the  Special
Servicer), or a separate trustee or co-trustee, on behalf of the Trust Fund. The
Special  Servicer shall maintain  accurate  records with respect to each related
REO Property reflecting the status of taxes, assessments and other similar items
that are or may become a lien on such REO  Property  and the status of insurance
premiums payable with respect thereto.  The Special  Servicer,  on behalf of the
Trust Fund,  shall dispose of any REO Property  within three taxable years after
the close of the taxable year in which the Trust Fund acquires ownership of such
REO Property (the "REO Grace Period") for purposes of Section  860G(a)(8) of the
Code, unless (i) the Special Servicer,  on behalf of REMIC I, has timely applied
for and  received an  extension  of such REO Grace  Period  pursuant to Sections
856(e)(3)  and  860G(a)(8)(A)  of the Code,  in which case the Special  Servicer
shall sell such REO Property by the end of the  applicable  extension  period or
(ii) the Special Servicer seeks and subsequently  receives an Opinion of Counsel
(the cost of such opinion  shall be advanced as a Servicing  Advance,  unless it
would be a  Nonrecoverable  Advance),  addressed to the Special Servicer and the
Trustee,  to the effect that the holding by the Trust Fund of such REO  Property
for an additional  specified  period will not cause such REO Property to fail 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) at any time that any Certificate is outstanding, in
which case the Special  Servicer shall sell such REO Property by the end of such
additional  period,  subject  to any  conditions  set forth in such  Opinion  of
Counsel. The Special Servicer, on behalf of the Trust Fund, shall dispose of any
REO Property held by the Trust Fund prior to the last day of the period  (taking
into  account  extensions)  within  which such REO  Property  is  required to be
disposed of pursuant to the provisions of the immediately  preceding sentence in
a manner  provided  under  Section  3.18.  The Special  Servicer  shall  manage,
conserve,  protect  and operate  each REO  Property  for the  Certificateholders
solely for the purpose of its  disposition  and sale in a manner  which does not
cause such REO Property to fail to qualify as "foreclosure  property" within the
meaning of Section 860G(a)(8) of the Code (determined without regard to

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the exception applicable for purposes of Section 860D(a)) of the Code or, except
as  contemplated  by Section  3.17(d),  result in the  receipt by REMIC I of any
"income from non-permitted  assets" within the meaning of Section  860F(a)(2)(B)
of the Code,  in an Adverse REMIC Event in respect of any of the REMICs or in an
Adverse Grantor Trust Event.

     (b) The Special 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  with any REO Property as are consistent with Servicing
Standard, all on such terms and for such period as the Special Servicer deems to
be in the best interests of  Certificateholders,  and, in connection  therewith,
the Special  Servicer  shall agree to the  payment of  management  fees that are
consistent with general market  standards.  The Special Servicer shall segregate
and hold all revenues  received by it with respect to any REO Property  separate
and apart from its own funds and general assets and shall establish and maintain
with respect to any REO Property a segregated  custodial  account (each, an "REO
Account"),  each of which  shall be an  Eligible  Account  and shall be entitled
"LaSalle  Bank  National  Association,  as Trustee,  in trust for Holders of PNC
Mortgage Acceptance Corp., Commercial Mortgage Pass-Through Certificates, Series
2000-C1, REO Account." The Special Servicer shall be entitled to any interest or
investment  income  earned on funds  deposited  in an REO  Account to the extent
provided in Section  3.7(b).  The Special  Servicer shall deposit or cause to be
deposited in the related REO Account  within two Business Days after receipt all
REO Proceeds received by it with respect to any REO Property, and shall withdraw
therefrom funds necessary for the proper  operation,  management and maintenance
of such REO Property, including:

                (i)   all  insurance  premiums  and ground  rents,  if any,  due
and payable in respect of such REO Property;

                (ii) all real estate taxes and  assessments  in respect  of such
REO  Property  and  such  other  Mortgaged  Properties  that may  result  in the
imposition of a lien thereon; and

                (iii) all costs  and  expenses  necessary to protect,  maintain,
manage, operate, repair and restore such REO Property.

      To the extent that such REO Proceeds are insufficient for the purposes set
forth in clauses (i) through  (iii)  above,  the Master  Servicer  shall make an
Advance  equal to the  amount  of such  shortfall  unless  the  Master  Servicer
determines,   in  its  good  faith  judgment,  that  such  Advance  would  be  a
Nonrecoverable  Advance.  The Master Servicer shall be entitled to reimbursement
of such  Advances  (with  interest  at the  Advance  Rate) made  pursuant to the
preceding sentence, to the extent permitted pursuant to Section 3.6. The Special
Servicer shall remit to the Master Servicer from each REO Account for deposit in
the Collection  Account on a monthly basis prior to the related  Remittance Date
the Net REO Proceeds received or collected from the related REO Property, except
that in determining  the amount of such Net REO Proceeds,  the Special  Servicer
may retain in such REO Account reasonable reserves for repairs, replacements and
necessary capital improvements and other related expenses.

      Notwithstanding  the  foregoing,  the Special  Servicer  shall not (unless
permitted pursuant to subsection (d) below):

                (i) permit the Trust  Fund to enter  into,  renew or  extend any
New Lease if the New Lease, by its terms, will give rise to any income that does
not constitute Rents from Real Property;

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                (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,  perform or permit any  construction on any REO
Property,  other than the repair or  maintenance  thereof or 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 related Mortgage Loan became imminent,  all within the meaning of Section
856(e)(4)(B) of the Code; or

                (iv) Directly  Operate  or  allow  any  Person  (other  than  an
Independent  Contractor) to Directly  Operate any REO Property on, any date more
than 90 days after its date of acquisition by the Trust Fund;

unless,  in any such case,  the Special  Servicer has  requested and received an
Opinion of Counsel  addressed to the Special  Servicer and the Trustee (the cost
of such  opinion  shall be advanced as a Servicing  Advance  unless such Advance
would be a Nonrecoverable Advance) to the effect that such action will not cause
such REO  Property  to fail 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) at any time
that it is held by the Trust Fund,  in which case the Special  Servicer may take
such actions as are specified in such Opinion of Counsel.

      The Special  Servicer  shall be required to contract  with an  Independent
Contractor for the operation and  management of any REO Property  within 90 days
of the Trust Fund's acquisition  thereof (unless the Special Servicer shall have
provided  the  Trustee  with an  Opinion  of  Counsel  that  the  operation  and
management  of such REO Property  other than through an  Independent  Contractor
shall not cause such REO Property to fail to qualify as  "foreclosure  property"
within the meaning of Code Section  860G(a)(8))  (the cost of such opinion shall
be advanced as a Servicing Advance unless such Advance would be a Nonrecoverable
Advance), provided that:

                (i)   the terms and conditions of any such contract shall not be
inconsistent herewith and shall reflect an arm's length agreement;

                (ii) the fees of such Independent  Contractor  (which  shall  be
an expense of the Trust Fund) shall be reasonable  and customary in light of the
nature  and  locality  of the REO  Property,  the  services  rendered  and other
relevant factors;

                (iii) 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 REO Property,
and (B) remit all related revenues collected (net of its fees and such costs and
expenses) to the Special Servicer upon receipt;

                (iv)  none of the provisions of this  Section  3.17(b)  relating
to any such contract or to actions taken through any such Independent Contractor
shall be deemed  to  relieve  the  Special  Servicer  of any of its  duties  and
obligations to the Trust Fund or the Trustee on behalf of the Certificateholders
with respect to the operation and management of any such REO Property; and

                (v) the Special Servicer shall be obligated with respect thereto
to the same extent as if it alone were  performing all duties and obligations in
connection with the operation and management of such REO Property.

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<PAGE>


      The Special  Servicer  shall be entitled to enter into any agreement  with
any Independent  Contractor performing services for it related to its duties and
obligations  hereunder  for  indemnification  of the  Special  Servicer  by such
Independent  Contractor,  and nothing in this Agreement shall be deemed to limit
or modify such indemnification.

     (c) When and as necessary, the Special Servicer shall send to the Trustee a
statement  prepared  by the  Special  Servicer  setting  forth the amount of net
income or net loss, as  determined  for federal  income tax purposes,  resulting
from the operation and  management of a trade or business on, the  furnishing or
rendering  of a  non-customary  service to the tenants of, or the receipt of any
other amount not  constituting  Rents from Real  Property in respect of, any REO
Property in accordance with Section 3.17(b).

     (d)  Promptly  following  any  acquisition  by  the  Trust  Fund  of an REO
Property,  the  Special  Servicer  shall  obtain (i) an update of any  appraisal
performed  pursuant to Section 3.23 which is more than 12 months old, or (ii) to
the extent that an appraisal has not been obtained pursuant to such Section,  an
appraisal of such REO Property by an  Independent  appraiser  familiar  with the
area in which such REO Property is located in order to determine the fair market
value of such REO Property and shall notify the Depositor and the Trustee of the
results of such  appraisal.  Any such appraisal shall be conducted in accordance
with MAI  standards  by an  appraiser  with at least 5 years  experience  in the
relevant  property type and in the jurisdiction in which the Mortgaged  Property
is located and the cost thereof shall be reimbursable as a Servicing Advance.

          Section 3.18.  Sale of Specially Serviced Mortgage Loans and
                         ---------------------------------------------
REO Properties.
---------------


     (a) With respect to any  Specially  Serviced  Mortgage Loan or REO Property
which the Special  Servicer has  determined to sell in  accordance  with Section
3.10 or  otherwise,  the Special  Servicer  shall deliver to the Trustee and the
Operating  Adviser  an  Officer's  Certificate  to the effect  that the  Special
Servicer has  determined to sell such  Specially  Serviced  Mortgage Loan or REO
Property in accordance  with this Section 3.18.  The Special  Servicer will give
the Trustee  and the  Operating  Adviser  not less than 10 Business  Days' prior
written notice of its intention to sell any Specially  Serviced Mortgage Loan or
REO Property.  The Operating Adviser may, at its option, within 10 Business Days
after  receipt of such notice,  purchase (or designate an Affiliate to purchase)
any such Specially  Serviced Mortgage Loan or REO Property out of the Trust Fund
at a cash price equal to the applicable  Repurchase  Price. The Repurchase Price
for any Specially  Serviced  Mortgage Loan or REO Property  purchased under this
Section 3.18(a) shall be deposited into the Collection Account, and the Trustee,
upon receipt of an Officer's  Certificate from the Master Servicer to the effect
that such  deposit has been made,  shall  release or cause to be released to the
Operating  Adviser (or the designated  Affiliate  thereof) the related  Mortgage
File, and shall execute and deliver such  instruments of transfer or assignment,
in each case without  recourse,  representation or warranty as shall be provided
to it and are  reasonably  necessary to vest in the  ownership of such  Mortgage
Loan or REO Property. In connection with any such purchase, the Special Servicer
shall deliver the related servicing file to the Certificateholder effecting such
purchase.

     (b) If the Operating  Adviser (or a designated  Affiliate  thereof) has not
purchased any Specially  Serviced Mortgage Loan or REO Property described in the
first sentence of Section 3.18(a) within 10 Business Days of its having received
notice in respect thereof  pursuant to Section 3.18(a) above or has specifically
waived in writing its right to

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<PAGE>


purchase such Specially Serviced Mortgage Loan or REO Property,  then either the
Special  Servicer or the Master  Servicer,  in that  order,  may, at its option,
within 10 Business Days after the earlier of the  expiration of such 10 Business
Day period or receipt of the Operating  Adviser's  written waiver of such right,
purchase (or designate an Affiliate  thereof to purchase)  such Mortgage Loan or
REO  Property  out of the Trust  Fund at a cash  price  equal to the  Repurchase
Price. The Repurchase Price for any such Mortgage Loan or REO Property purchased
under this Section 3.18(b) shall be deposited into the Collection  Account,  and
the Trustee,  upon receipt of an Officer's  Certificate from the Master Servicer
to the effect  that such  deposit  has been made,  shall  release or cause to be
released  to the Master  Servicer  or the Special  Servicer  (or the  designated
Affiliate thereof), as applicable,  the related Mortgage File, and shall execute
and deliver such  instruments of transfer or  assignments,  in each case without
recourse,  representation  or  warranty  as  shall  be  provided  to it and  are
reasonably  necessary to vest in the Master Servicer or the Special Servicer (or
the designated Affiliate thereof), as applicable, the ownership of such Mortgage
Loan or REO  Property.  In  connection  with any  such  purchase  by the  Master
Servicer,  the Special Servicer shall deliver the related  servicing file to the
Master Servicer.

     (c) The Special  Servicer  may offer to sell to any Person  (including  the
Depositor,  the Master Servicer, the Special Servicer and the Operating Adviser)
any Specially  Serviced  Mortgage  Loan or REO Property not otherwise  purchased
pursuant  to  Section  3.18(a)  or  3.18(b)  if and  when the  Special  Servicer
determines, consistent with the Servicing Standard, that such a sale would be in
the best economic interests of the  Certificateholders  (as a collective whole).
The Special  Servicer  shall notify the  Operating  Adviser at least 10 Business
Days  before  offering  to sell  any  Specially  Serviced  Mortgage  Loan or REO
Property  pursuant  to this  Section  3.18(c).  Such  offer  shall  be made in a
commercially reasonable manner (which, for purposes hereof, includes an offer to
sell without representation or warranty other than customary warranties of title
and condition,  if liability for breach  thereof is limited to recourse  against
the Trust  Fund),  but  shall,  in any  event,  so offer to sell such  Specially
Serviced  Mortgage Loan or REO Property no later than the time determined by the
Special  Servicer  to be  sufficient  to  result  in the sale of such  Specially
Serviced  Mortgage Loan or REO Property  within the period  specified in Section
3.17(a).  The Special Servicer shall give the Trustee not less than ten Business
Days prior  written  notice of its  intention  to sell such  Specially  Serviced
Mortgage Loan or REO Property,  in which case the Special  Servicer shall accept
any offer received from any Person that is determined by the Special Servicer to
be a fair cash price, as determined in accordance with Section 3.18(b), for such
Specially  Serviced  Mortgage  Loan or REO  Property  if the offeror is a Person
other than the Special Servicer or an Affiliate thereof,  or is determined to be
such a price  by the  Trustee  if the  offeror  is the  Special  Servicer  or an
Affiliate thereof; provided,  however, that any offer by an Interested Person in
the  amount of the  Repurchase  Price  shall be deemed to be a fair cash  price.
Notwithstanding  anything  to the  contrary  herein,  neither the Trustee in its
individual capacity nor any of its Affiliates,  may make an offer to purchase or
purchase any  Specially  Serviced  Mortgage  Loan or any REO  Property  pursuant
hereto.

      In addition, in the event that the Special Servicer receives more than one
fair offer with respect to any Specially Serviced Mortgage Loan or REO Property,
the Special Servicer may accept an offer that is not the highest fair cash offer
if it determines,  in accordance with the Servicing Standard, that acceptance of
such  offer  would  be in the  best  interests  of the  Certificateholders  (for
example,  if the prospective buyer making the lower cash offer is more likely to
perform its  obligations,  or the terms offered by the prospective  buyer making
the lower cash offer are more favorable). In the event that the Special Servicer
determines  with  respect to any REO  Property  that the offers  being made with
respect thereto are not in the best interests of

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<PAGE>


the  Certificateholders  and that the end of the REO Grace Period referred to in
Section  3.17(a) with respect to such REO Property is  approaching,  the Special
Servicer  shall  seek an  extension  of such  REO  Grace  Period  in the  manner
described in Section 3.17(a); provided, however, that the Special Servicer shall
use its best efforts in accordance with the Servicing Standard,  to sell any REO
Property no later than the day prior to the Determination Date immediately prior
to the Rated Final Distribution Date.

     (d) In determining  whether any offer received  represents a fair price for
any Specially  Serviced Mortgage Loan or any REO Property,  the Special Servicer
or the  Trustee  shall be entitled  to engage and may  conclusively  rely on the
opinion of an  Independent  appraiser  or other  expert in real  estate  matters
retained by the  Special  Servicer  or the  Trustee,  the cost of which shall be
advanced  as a  Servicing  Advance,  unless such  Servicing  Advance  would be a
Nonrecoverable  Advance.  In  determining  whether any offer  constitutes a fair
price for any Specially Serviced Mortgage Loan or any REO Property,  the Special
Servicer or the Trustee  (or, if  applicable,  such  appraiser)  shall take into
account,  and any  appraiser  or other  expert in real estate  matters  shall be
instructed to take into account, the appraisal obtained pursuant to Section 3.23
and,  as  applicable,  among  other  factors,  the  period  and  amount  of  any
delinquency on such Specially  Serviced  Mortgage Loan, the physical  (including
environmental) condition of the related Mortgaged Property or such REO Property,
the state of the local economy and the Trust Fund's obligation to dispose of any
REO Property within the time period specified in Section 3.17(a).

     (e) Subject to the provisions of Section 3.17,  the Special  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 Specially  Serviced
Mortgage Loan or REO Property,  including the collection of all amounts  payable
in connection  therewith.  Any sale of a Specially Serviced Mortgage Loan or any
REO Property shall be without recourse to, or representation or warranty by, the
Trustee, the Depositor,  the Master Servicer,  the Special Servicer or the Trust
Fund (except that any contract of sale and assignment  and conveyance  documents
may contain  customary  warranties of title and  condition,  so long as the only
recourse  for  breach  thereof  is to the  Trust  Fund),  and,  if such  sale is
consummated in accordance  with the duties of the Special  Servicer,  the Master
Servicer, the Depositor and the Trustee pursuant to the terms of this Agreement,
no such Person who so  performed  shall have any  liability to the Trust Fund or
any  Certificateholder  with respect to the purchase price therefor  accepted by
the Special Servicer or the Trustee.

     (f) Net  Liquidation  Proceeds  related to any such sale shall be promptly,
and in any event within one Business Day following receipt thereof, deposited in
the Collection Account in accordance with Section 3.5(a)(iv).

          Section 3.19.  Inspections.
                         -----------

      Commencing  in 2001,  the Master  Servicer  (or, with respect to Specially
Serviced Mortgage Loans and REO Properties,  the Special Servicer) shall inspect
or cause to be inspected each Mortgaged  Property at least once every two years;
provided,  however if the related Mortgage Loan (i) has a then current principal
balance of at least $2,000,000,  (ii) has a then current principal balance of at
least 2% of the then outstanding  principal balance of all Mortgage Loans in the
Trust Fund or (iii) is a Specially  Serviced  Mortgage  Loan,  then in each such
case the related Mortgaged  Property will be inspected at least once every year.
Promptly after a Mortgage Loan becomes a Specially  Serviced  Mortgage Loan (and
in any event within 60 days

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<PAGE>


thereafter),  the Special Servicer shall inspect the related Mortgaged Property.
The annual  inspections  will be done at the expense of the servicer  performing
the  inspection.  The  inspection  done at the time a  Mortgage  Loan  becomes a
Specially  Serviced  Mortgage  Loan will be an  expense of the Trust  Fund.  The
Master  Servicer  and the  Special  Servicer  shall each  prepare or cause to be
prepared as soon as reasonably possible a written report of each such inspection
and shall deliver a copy of such report  (which may be in electronic  format) to
the Trustee,  each Rating Agency and the Operating  Adviser within 15 days after
the preparation  thereof;  provided,  however,  that the Master Servicer is only
required to deliver such reports to the Operating Adviser upon request.

          Section 3.20.  Available Information and Notices.
                         ---------------------------------

      The Master Servicer shall promptly furnish to each Rating Agency and, upon
request,  the Operating Adviser (in written or electronic  format) quarterly and
annual  reports of each Borrower  with respect to the net  operating  income and
occupancy  rates  required to be delivered by the related  Borrower and actually
received by the Master Servicer with respect to non-Specially  Serviced Mortgage
Loans,  to the extent that delivery of such items is consistent  with applicable
law and the related Mortgage Loan Documents.  Upon request,  the Master Servicer
shall  promptly  furnish to each  Rating  Agency and the  Operating  Adviser (in
written or  electronic  format) all rent rolls and sales reports with respect to
non-Specially  Serviced  Mortgage Loans, to the extent they are delivered by the
related  Borrower to the Master Servicer and to the extent that delivery of such
items is consistent with applicable law and the related Mortgage Loan Documents.
The Master  Servicer shall promptly  notify each Rating Agency and the Operating
Adviser of any material uninsured damage to a Mortgaged Property that relates to
a non-Specially Serviced Mortgage Loan.

      The Special  Servicer shall promptly furnish to each Rating Agency and the
Operating Adviser (in written or electronic format) quarterly and annual reports
of each Borrower with respect to the net  operating  income and occupancy  rates
required to be  delivered by the related  Borrower and actually  received by the
Special  Servicer  with respect to Specially  Serviced  Mortgage  Loans,  to the
extent that delivery of such items is  consistent  with  applicable  law and the
related  Mortgage Loan  Documents.  Upon  request,  the Special  Servicer  shall
promptly furnish to each Rating Agency and the Operating  Adviser (in written or
electronic  format) all rent rolls and sales  reports  with respect to Specially
Serviced  Mortgage  Loans,  to the  extent  they are  delivered  by the  related
Borrower to the Special  Servicer and to the extent that  delivery of such items
is consistent with applicable law and the related  Mortgage Loan Documents.  The
Special  Servicer  shall  promptly  notify each Rating  Agency and the Operating
Adviser of any material uninsured damage to a Mortgaged Property that relates to
a Specially Serviced Mortgage Loan.

      The Master  Servicer and the Special  Servicer shall  promptly  furnish to
each  Rating  Agency  and  the  Operating  Adviser  any  Officers'  Certificates
delivered by the Master Servicer or the Special Servicer, as applicable,  to the
Trustee; provided, however, that the Master Servicer shall furnish its Officers'
Certificates to the Operating Adviser only upon request.

      None of the Trustee, the Fiscal Agent, the Master Servicer and the Special
Servicer  shall  be  responsible   for  the  accuracy  or  completeness  of  any
information  supplied to it by a Borrower or a third party for  inclusion in any
such notice or in any other report or information furnished or

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<PAGE>


provided by the Master Servicer,  the Special Servicer or the Trustee hereunder,
and the Master Servicer,  the Special Servicer, the Fiscal Agent and the Trustee
shall be  indemnified  and held  harmless  by the Trust Fund  against  any loss,
liability or expense  incurred in connection  with any legal action  relating to
any statement or omission or alleged  statement or omission  therein,  including
any liability  related to the inclusion of such  information in any report filed
with the  Commission.  Such  indemnification  shall survive the  resignation  or
termination of the foregoing parties and the termination of this Agreement.

      In  addition to the other  reports  and  information  made  available  and
distributed  to the Depositor,  the Placement  Agents,  the Trustee,  the Rating
Agencies,  the  Operating  Adviser or the  Certificateholders  pursuant to other
provisions  of this  Agreement,  the Master  Servicer  and the Special  Servicer
shall, in accordance  with such reasonable  rules and procedures as it may adopt
(which may include the requirement that an agreement governing the availability,
use and disclosure of such  information,  and which may provide  indemnification
(at the expense of the requesting  party) to the Master  Servicer or the Special
Servicer as applicable, for any liability or damage that may arise therefrom, be
executed  to the  extent  the  Master  Servicer  or  the  Special  Servicer,  as
applicable,  deems  such  action  to be  necessary  or  appropriate),  also make
available  any  information  relating  to  the  Mortgage  Loans,  the  Mortgaged
Properties or the Borrowers for review by the  Depositor,  the Rating  Agencies,
the Placement Agents, the Trustee and the Operating Adviser. The Master Servicer
and the Special  Servicer,  as the case may be, will also make such  information
available  to any Person that the Trustee at the request of the Master  Servicer
or Special Servicer  certifies is a  Certificateholder  or Certificate  Owner or
potential  Certificateholder  or  Certificate  Owner.  The  Trustee may base the
certification on any information from the Certificateholder or Certificate Owner
or the potential  Certificateholder  or  Certificate  Owner that the Trustee may
require in its sole discretion.  The Trustee may require such  Certificateholder
or Certificate Owner or potential  Certificateholder or Certificate Owner to pay
any expenses incurred by the Trustee in making such certification.

      The Trustee shall also make available at its offices primarily responsible
for  administration  of the Trust Fund, during normal business hours, for review
by  the   Depositor,   the  Rating   Agencies,   the  Operating   Adviser,   any
Certificateholder, the Placement Agents, any Person identified to the Trustee by
a  Certificateholder  or a Certificate  Owner as a  prospective  transferee of a
Certificate or a beneficial  interest  therein and any other Persons to whom the
Trustee  believes such disclosure is appropriate,  the following items: (i) this
Agreement, (ii) all monthly statements to Certificateholders delivered since the
Closing  Date  pursuant to Section  4.4(a),  (iii) all annual  statements  as to
compliance  delivered to the Trustee and the Depositor pursuant to Section 3.14,
(iv) all annual  Independent  accountants'  reports delivered to the Trustee and
the Depositor  pursuant to Section 3.15, (v) the reports prepared by the Trustee
pursuant  to Section  2.2 and (vi) any  reports or  information  relating to the
Mortgage Loans, the Mortgaged  Properties or the Borrowers which the Trustee has
received  from the Master  Servicer or the Special  Servicer.  The Trustee shall
make available at its offices during normal  business  hours,  for review by the
Depositor,  the Placement Agents, the Master Servicer, the Special Servicer, the
Rating Agencies,  the Operating Adviser,  any  Certificateholder  or Certificate
Owner,  any  Person  identified  to  the  Trustee  by  a  Certificateholder   or
Certificate  Owner as a prospective  transferee of a Certificate or a beneficial
interest  therein  and any  other  Persons  to whom the  Trustee  believes  such
disclosure is  appropriate,  the following  items:  (i) the  inspection  reports
prepared  by or on behalf of the Master  Servicer or the  Special  Servicer,  as
applicable,  in connection with the property inspections conducted by the Master
Servicer or the Special

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<PAGE>


Servicer,   as  applicable,   pursuant  to  Section  3.19,   (ii)  any  and  all
modifications,  waivers and  amendments  of the terms of a Mortgage Loan entered
into by the  Master  Servicer  or the  Special  Servicer  and  (iii) any and all
Officer's  Certificates  and other  evidence  delivered  to the  Trustee and the
Depositor to support the Master Servicer's  determination  that any Advance was,
or if made would be, a Nonrecoverable Advance, in each case except to the extent
doing so is  prohibited  by  applicable  laws or by any  documents  related to a
Mortgage Loan.  Copies of any and all of the foregoing  items shall be available
from the Master Servicer,  the Special  Servicer or the Trustee,  as applicable,
upon request  (subject to the exception in the preceding  sentence).  The Master
Servicer,  the Special  Servicer  and the Trustee  shall be permitted to require
payment  (other than from any Rating  Agency) of a sum  sufficient  to cover the
reasonable costs and expenses incurred by it in providing copies of or access to
any information requested in accordance with the previous sentence.

      The Master Servicer shall, on behalf of the Trust Fund, prepare,  sign and
file  with  the  Commission  any and all  reports,  statements  and  information
respecting the Trust Fund which the Master Servicer or the Depositor  determines
(i) are required to be filed with the  Commission  pursuant to Sections 13(a) or
15(d) of the 1934 Act or (ii) the filing of which is otherwise  desirable,  each
such report,  statement and  information to be filed on or prior to the required
filing date for such  report,  statement  or  information.  Notwithstanding  the
foregoing, the Depositor shall file with the Commission,  within fifteen days of
the Closing Date, a Current Report on Form 8-K together with this Agreement.

     Section 3.21.  Reserve Accounts; Letters of Credit.
                    -----------------------------------

      The Master  Servicer shall  administer  each Reserve Account in accordance
with the related Mortgage Loan Documents.

      The Master Servicer shall  maintain,  administer and enforce any letter of
credit included in the Mortgage Files in accordance with its terms and the terms
of the other related Mortgage Loan Documents.  The Master Servicer shall monitor
the  dates on which  any  letter of credit  included  in the  Mortgage  Files is
required to be renewed and shall notify the Special  Servicer and the  Operating
Adviser of such dates.  The Trustee shall  cooperate with the Master Servicer in
connection with such administration of any letter of credit.

          Section 3.22.  Servicing Advances.
                         ------------------

     (a) The Master Servicer (or, to the extent provided in Section 3.22(e), the
Special Servicer,  or, to the extent provided in Section 3.22(b), the Trustee or
the  Fiscal  Agent)  shall  make any  Servicing  Advances  as and to the  extent
otherwise  required  pursuant to the terms  hereof.  For purpose of  calculating
distributions  to  the  Certificateholders,  Servicing  Advances  shall  not  be
considered   to  increase  the   principal   balance  of  any   Mortgage   Loan,
notwithstanding that the terms of such Mortgage Loan so provide.

     (b) The Master Servicer shall notify the Trustee,  the Fiscal Agent and the
Rating  Agencies in writing  promptly upon, and in any event within one Business
Day  after,  becoming  aware  that it will be  financially  unable  to make  any
Servicing  Advance  required  to be made  pursuant to the terms  hereof,  and in
connection  therewith,  shall  set  forth  in such  notice  the  amount  of such
Servicing  Advance,  the Person to whom it should be paid, and the circumstances
and purpose of such Servicing Advance,  and shall set forth therein  information
and instructions

                                       94
<PAGE>


for the payment of such  Servicing  Advance,  and, on the date specified in such
notice  for the  payment  of such  Servicing  Advance,  or,  if no such  date is
specified  or such date has  already  occurred,  then  within one  Business  Day
following  such  notice,  the  Trustee  shall pay the  amount of such  Servicing
Advance in accordance  with such  information and  instructions.  If the Trustee
fails to make any Servicing Advance required to be made under this Section 3.22,
the  Fiscal  Agent  shall  make such  Advance  on the same day the  Trustee  was
required to make such Servicing Advance and,  thereby,  the Trustee shall not be
in default under this Agreement.

     (c)  Notwithstanding  anything  herein to the contrary,  none of the Master
Servicer,  the Special  Servicer  (which  only makes  Emergency  Advances),  the
Trustee or the Fiscal Agent shall be obligated to make a Servicing Advance as to
any Mortgage Loan or REO Property if the Master Servicer,  the Special Servicer,
the Trustee or the Fiscal Agent as  applicable,  determines  that such Servicing
Advance, if made, would be a Nonrecoverable  Advance.  The Master Servicer shall
be entitled to rely, conclusively,  on any determination by the Special Servicer
that a  Servicing  Advance,  if made,  would be a  Nonrecoverable  Advance.  The
Trustee and the Fiscal  Agent shall be  entitled to rely,  conclusively,  on any
determination  by the Master  Servicer  or  Special  Servicer  that a  Servicing
Advance, if made, would be a Nonrecoverable  Advance. The Trustee and the Fiscal
Agent, in determining  whether or not a Servicing Advance previously made is, or
a proposed Servicing Advance, if made, would be, a Nonrecoverable  Advance shall
make such determination in their good faith judgment.

     (d) The Master  Servicer,  the Special  Servicer,  the  Trustee  and/or the
Fiscal  Agent,  as  applicable,  shall be entitled  to, and the Master  Servicer
hereby  covenants and agrees to promptly seek and effect,  the  reimbursement of
Servicing  Advances to the extent  permitted  pursuant to Section  3.6(a)(ii) of
this Agreement,  together with any related Advance Interest Amount in respect of
such Servicing Advances (pursuant to Section 3.6(a)(iii)).

     (e) No more frequently than once per calendar month,  the Special  Servicer
may require the Master Servicer, and the Master Servicer shall be obligated,  to
reimburse the Special  Servicer for any  Emergency  Advances made by the Special
Servicer,  but not previously  reimbursed  (whether  pursuant to Section 3.6(a),
this  Section  3.22(e) or  otherwise)  to the Special  Servicer,  and to pay the
Special Servicer interest thereon at the Advance Rate from the date made to, but
not  including,   the  date  of  reimbursement.   Such   reimbursement  and  any
accompanying  payment of  interest  shall be made within ten days of the request
therefore  by  wire  transfer  of  immediately  available  funds  to an  account
designated by the Special Servicer. Upon the Master Servicer's  reimbursement to
the  Special  Servicer  of any  Emergency  Advance  and  payment to the  Special
Servicer of interest thereon,  all in accordance with this Section 3.22(e),  the
Master  Servicer shall for all purposes of this Agreement be deemed to have made
such Emergency Advance at the same time as the Special Servicer  originally made
such  Advance,  and  accordingly,  the  Master  Servicer  shall be  entitled  to
reimbursement  for such  Advance,  together  with  interest at the Advance  Rate
thereon,  at the same time,  in the same  manner  and to the same  extent as the
Master  Servicer would otherwise have been entitled if it had actually made such
Emergency Advance.

      Notwithstanding  anything to the contrary contained in this Agreement,  if
the Special Servicer (i) is required under any other provision of this Agreement
to direct the Master  Servicer to make a Servicing  Advance or (ii) is otherwise
aware a  reasonable  period in advance  that it is  reasonably  likely  that the
Special  Servicer  will  incur a cost  or  expense  that  will,  when  incurred,
constitute  a  Servicing  Advance,  the Special  Servicer  shall (in the case of
clause  (i)  preceding),  and shall use  reasonable  efforts  to (in the case of
clause (ii) preceding), request that the Master

                                       95
<PAGE>


Servicer make such Servicing Advance,  such request to be made in writing and in
a timely manner that does not  materially  and adversely  affect the interest of
any Certificateholder and at least five Business Days prior to the date on which
failure to make such  Servicing  Advance  would  (with  notice  from the Trustee
regardless of whether such notice is actually  received)  constitute an Event of
Default  pursuant  to  Section  7.1(xi);  provided,  however,  that the  Special
Servicer  shall have an  obligation to make any  Emergency  Advance.  The Master
Servicer shall have the obligation to make any such Servicing Advance that it is
requested  by the Special  Servicer to make  within  five  Business  Days of the
Master Servicer's  receipt of such request and such information and documents as
are reasonably necessary for the Master Servicer to make such Servicing Advance.
The Master Servicer shall be entitled to reimbursement for any Servicing Advance
made by it at the direction of the Special  Servicer,  together with interest at
the Advance Rate  thereon,  at the same time, in the same manner and to the same
extent as the Master  Servicer is entitled  with respect to any other  Servicing
Advance made thereby.

      Notwithstanding  the foregoing  provisions of this Section  3.22(e) or any
other provision of this Agreement to the contrary, the Master Servicer shall not
be  required  to  reimburse  the  Special  Servicer  for, or make at the Special
Servicer's direction, any Servicing Advance if the Master Servicer determines in
its reasonable, good faith judgment that the Servicing Advance which the Special
Servicer is directing  the Master  Servicer to  reimburse  it for or  hereunder,
although not characterized by the Special Servicer as a Nonrecoverable  Advance,
is or would be, if made, a  Nonrecoverable  Advance.  The Master  Servicer shall
notify the Special  Servicer  and the Trustee in writing of such  determination.
Such  notice  shall not  obligate  the Special  Servicer to make such  Servicing
Advance.

          Section 3.23.  Appraisal Reductions.
                         --------------------

     (a) Within 60 days (or such longer  period as the  Special  Servicer is (as
certified  thereby  to the  Trustee  in  writing)  diligently  and in good faith
proceeding to obtain such Updated Appraisal) after the Special Servicer receives
notice or is  otherwise  aware of an  Appraisal  Reduction  Event,  the  Special
Servicer  shall be  required  to  obtain an  Updated  Appraisal  of the  related
Mortgaged  Property or REO Property;  provided that if the Special  Servicer had
completed or obtained an Updated  Appraisal within the immediately  preceding 12
months,  the Special Servicer may rely on such Updated  Appraisal and shall have
no duty to prepare a new Updated Appraisal, unless such reliance would not be in
accordance with the Servicing  Standard.  The cost of any such Updated Appraisal
if not an internal valuation  performed by the Special Servicer shall be paid by
the Master  Servicer as a Servicing  Advance,  unless  such  Advance  would be a
Nonrecoverable  Advance.  If no Updated  Appraisal has been  obtained  within 12
months prior to the first  Distribution Date on or after an Appraisal  Reduction
Event has occurred,  the Special Servicer will be required to estimate the value
of the related  Mortgaged  Property or REO  Property  (the  "Special  Servicer's
Appraisal  Reduction  Estimate")  and such estimate will be used for purposes of
determining the Appraisal Reduction.

     (b) The  Special  Servicer,  based  on the  Updated  Appraisal  or  Special
Servicer's   Appraisal  Reduction   Estimate,   shall  calculate  any  Appraisal
Reduction. If the Appraisal Reduction is calculated using the Special Servicer's
Appraisal  Reduction  Estimate,  then on the first  Distribution  Date occurring
after the  delivery  of the Updated  Appraisal,  the  Special  Servicer  will be
required  to adjust the  Appraisal  Reduction  to take into  account the Updated
Appraisal  (regardless of whether the Updated  Appraisal is higher or lower than
the Special Servicer's Appraisal Reduction  Estimate).  The Master Servicer will
verify the accuracy

                                       96
<PAGE>


of the  mathematical  computation  of the  Appraisal  Reduction  by the  Special
Servicer  and that the  amounts  used  therein  are  consistent  with the Master
Servicer's records.

     (c) Annual updates of such Updated  Appraisal  will be obtained  during the
continuance  of an Appraisal  Reduction  Event.  The cost of such annual updates
shall  be  paid  as  a  Servicing  Advance,  unless  such  Advance  would  be  a
Nonrecoverable  Advance.  In  addition,  the  Operating  Adviser may at any time
request the Special  Servicer to obtain an Updated  Appraisal  at the  Operating
Adviser's  expense.  Each time an Updated  Appraisal is obtained,  the Appraisal
Reduction  will be  adjusted  by the  Special  Servicer  based  on such  Updated
Appraisal.  Any Updated  Appraisal  obtained by the Special Servicer pursuant to
this section shall be delivered by the Special  Servicer to the Master Servicer,
the Trustee and the Operating  Adviser  within 15 days of receipt by the Special
Servicer of such Updated  Appraisal  and the Trustee  shall deliver such Updated
Appraisal to the Holders of the Privately  Placed  Certificates  (other than the
Class V, Class R-I, Class R-II and Class R-III  Certificates)  within 15 days of
receipt by the Trustee of such Updated Appraisal from the Special  Servicer.  An
appraisal  reduction  will be eliminated (i) upon payment in full or liquidation
of any Mortgage  Loan for which an Appraisal  Reduction  has been  determined or
(ii) if the Mortgage Loan is no longer a Specially Serviced Mortgage Loan.

          Section 3.24.  Transfer of Servicing Between Master Servicer and
                         -------------------------------------------------
Special Servicer; Record Keeping.
--------------------------------

     (a) Upon determining that any Mortgage Loan has become a Specially Serviced
Mortgage  Loan,  the Master  Servicer  shall  immediately  give notice  thereof,
together with a copy of the related Mortgage File, to the Special Servicer (with
a copy of the notice and, upon its written request and at its expense, a copy of
the related  Mortgage  File,  to the  Operating  Adviser) and shall use its best
efforts to provide the Special  Servicer with all  information,  documents  (but
excluding the original  documents  constituting  such Mortgage File) and records
(including records stored  electronically on computer tapes,  magnetic discs and
the like) relating to such Mortgage Loan and reasonably requested by the Special
Servicer  to enable it to assume  its  duties  hereunder  with  respect  thereto
without acting through a  Sub-Servicer.  The Master  Servicer shall use its best
efforts to comply with the preceding  sentence  within five Business Days of the
date such  Mortgage  Loan became a Specially  Serviced  Mortgage Loan and in any
event  shall  continue  to act as  Master  Servicer  and  administrator  of such
Mortgage  Loan until the Special  Servicer has  commenced  the servicing of such
Mortgage Loan, which shall occur upon the receipt by the Special Servicer of the
information,  documents and records  referred to in the preceding  sentence.  No
later than 10 Business Days before the Master  Servicer is required to deliver a
copy of the Mortgage  File to the Special  Servicer,  it shall review the Master
Servicer Mortgage File and request from the Trustee any material  documents that
it is aware are missing from the Master Servicer  Mortgage File. With respect to
each Mortgage Loan that becomes a Specially  Serviced  Mortgage Loan, the Master
Servicer shall  instruct the related  Borrower to continue to remit all payments
in respect of such Mortgage Loan to the Master Servicer.

      Upon  determining  that a Mortgage Loan is no longer a Specially  Serviced
Mortgage Loan, the Special Servicer shall immediately give notice thereof to the
Master Servicer and upon giving such notice, the Special  Servicer's  obligation
to service such Mortgage Loan shall  terminate and the obligations of the Master
Servicer to service and administer such Mortgage Loan as a Mortgage Loan that is
not a Specially Serviced Mortgage Loan shall resume.

     (b) In servicing any Specially Serviced Mortgage Loan, the Special Servicer
shall  provide  to the  Trustee  originals  of  documents  included  within  the
definition of "Mortgage

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<PAGE>


File" for inclusion in the related  Mortgage File (to the extent such  documents
are in the  possession  of the Special  Servicer)  and copies of any  additional
related Mortgage Loan  information,  including  correspondence  with the related
Borrower,  and the Special Servicer shall provide copies of the foregoing to the
Master Servicer, including, without limitation,  electronic data and/or files in
CMSA IRP format.

     (c) Not later than the Business Day preceding each date on which the Master
Servicer is required to furnish a report under Section 3.13 to the Trustee,  the
Special  Servicer  shall  deliver  to the Master  Servicer  a written  statement
describing,  on a  Mortgage  Loan-by-Mortgage  Loan  basis,  the  amount  of all
payments on account of interest  received on each  Specially  Serviced  Mortgage
Loan;  the amount of all payments on account of principal,  including  Principal
Prepayments and Balloon Payments,  on each Specially Serviced Mortgage Loan; the
amount of Insurance  Proceeds and Liquidation  Proceeds received with respect to
each Specially Serviced Mortgage Loan; and the amount of net income or net loss,
as determined  for  management  of a trade or business on, or the  furnishing or
rendering of a  non-customary  service to the tenants of, each REO Property that
previously  secured  a  Specially  Serviced  Mortgage  Loan,  in  each  case  in
accordance with Section 3.17.

     (d)  Notwithstanding  the provisions of the preceding  subsection  (c), the
Master  Servicer shall maintain  ongoing payment records with respect to each of
the Specially  Serviced  Mortgage  Loans and shall provide the Special  Servicer
with any information  reasonably required by the Special Servicer to perform its
duties  under this  Agreement.  The Special  Servicer  shall  provide the Master
Servicer  with any  information  reasonably  required by the Master  Servicer to
perform its duties under this Agreement.

     (e) No later than 30 days after a transfer of  servicing  described  in the
first  paragraph of Section  3.24(a) for a Mortgage Loan,  the Special  Servicer
shall  orally   advise   Moody's   with   respect  to  the  Special   Servicer's
recommendations  on how such Specially  Serviced Mortgage Loan might be returned
to performing  status and returned to the Master Servicer for regular  servicing
or otherwise realized upon.

     (f) In the event that the Special  Servicer is required  under the terms of
this Agreement to service,  or perform any of its duties  hereunder with respect
to, a Mortgage Loan that is not a Specially  Serviced  Mortgage Loan, the Master
Servicer  shall  provide  the  Special  Servicer  with  a copy  of any  document
contained in the Master Servicer Mortgage File that is necessary for the Special
Servicer  to  perform  any of its duties  hereunder.  Upon  request,  the Master
Servicer shall provide the Special Servicer,  at the Special Servicer's expense,
with a copy of any document  contained in the Master Servicer Mortgage File that
is not  currently  necessary  for the  Special  Servicer  to perform  its duties
hereunder.

          Section 3.25.  Adjustment  of  Servicing   Compensation   in  Respect
                         ------------------------------------------------------
of Prepayment Interest Shortfalls.
----------------------------------

      The Master  Servicer  shall  deliver  to the  Trustee  for  deposit in the
Distribution Account on each Remittance Date, without any right of reimbursement
therefor,  an amount  equal to the  lesser  of (i) the  excess,  if any,  of all
Prepayment/Balloon  Payment  Interest  Shortfalls  over  all  Prepayment/Balloon
Payment Interest Excesses, in each case resulting from Principal Prepayments and
Balloon  Payments  received  in respect  of the  Mortgage  Pool  during the most
recently  ended  Collection  Period,  and (ii) an amount equal to the  aggregate
Stated Principal Balance of the Mortgage Loans for which the Master Servicer has
received its Master  Servicer Fee for such  Distribution  Date multiplied by the
Minimum Master Servicer Fee Rate.

                                       98


<PAGE>



          Section 3.26.  Operating Adviser; Elections.
                         ----------------------------

     (a)  So  long  as G2  Opportunity  Fund  LP  and  its  affiliates  are  the
Certificate  Owner of  Certificates  representing  at least 50% of the aggregate
Certificate  Balance of the  Controlling  Class,  they shall be  entitled to (i)
appoint an operating adviser (the "Operating Adviser") with the powers set forth
in Section  3.27,  (ii)  remove the then  current  Operating  Adviser  and (iii)
appoint successor Operating Advisers.

     (b) If G2  Opportunity  Fund  LP and  its  affiliates  no  longer  are  the
Certificate  Owner of  Certificates  representing  at least 50% of the aggregate
Certificate  Balance of the Controlling  Class, then the Holders of Certificates
representing  more  than  50%  of  the  aggregate  Certificate  Balance  of  the
Controlling  Class shall be entitled to (i) elect the  Operating  Adviser,  (ii)
remove the then current Operating Adviser and (iii) appoint successor  Operating
Advisers,  all in accordance  with the following  procedures.  If the Holders of
Certificates  representing more than 50% of the aggregate Certificate Balance of
the  Controlling  Class cannot agree on the election of the  Operating  Adviser,
then GMAC  Commercial  Mortgage  Corporation  shall be appointed  the  Operating
Adviser.

                (i) At the request of the Holders of  Certificates  representing
at least 50% of the aggregate  Certificate Balance of the Controlling Class, the
Trustee shall call a meeting of the Holders of the Controlling Class for purpose
of  electing an  Operating  Adviser.  Notice of the  meeting  shall be mailed or
delivered by the Trustee to each Holder of Certificates of the Controlling Class
not less than 10 nor more than 60 days prior to the  meeting.  The notice  shall
state  the place and the time of the  meeting,  which may be held by  telephone.
Holders of  Certificates  representing  a majority of the aggregate  Certificate
Balance of the  Controlling  Class,  present in person or  represented by proxy,
shall  constitute a quorum for the  nomination of an Operating  Adviser.  At the
meeting,  each  Holder  shall be  entitled  to  nominate  one  Person  to act as
Operating Adviser. The Trustee shall cause the election of the Operating Adviser
to be held as soon thereafter as is reasonably practicable.

                (ii) Each Holder of Certificates of the Controlling  Class shall
be entitled to vote in each  election of the  Operating  Adviser.  The voting in
each election of the Operating  Adviser shall be in writing mailed,  telecopied,
delivered or sent by courier and actually received by the Trustee on or prior to
the date of such  election.  Immediately  upon  receipt by the  Trustee of votes
(which have not been rescinded)  from the Holders of  Certificates  representing
more than 50% of the  aggregate  Certificate  Balance of the  Controlling  Class
which are cast for a single  Person,  such Person  shall be, upon such  Person's
acceptance,  the  Operating  Adviser.  The  Trustee  shall  act as judge of each
election and,  absent manifest error,  the  determination  of the results of any
election  by  the  Trustee  shall  be  conclusive.   Notwithstanding  any  other
provisions  of  this  Section  3.26,  the  Trustee  may  make  such   reasonable
regulations as it may deem advisable for any election.

                (iii) The Operating  Adviser  may be  removed at any time by the
written vote,  copies of which must be delivered to the Trustee,  of the Holders
of the  Certificates  representing  more than 50% of the  aggregate  Certificate
Balance of the Controlling Class.

                (iv) For purposes of electing or removing an  Operating Adviser,
Certificates of the Controlling Class held by the Depositor, the Master Servicer
or the Special  Servicer or by any  Affiliate of any of them shall be taken into
account  with the same  force  and  effect  as if any  other  Person  held  such
Certificates.


                                       99
<PAGE>


     (c) If at any time the Trustee  determines that the  Controlling  Class has
changed, the Trustee will notify the Certificateholders, the Master Servicer and
the Special Servicer of the new Controlling Class.

          Section 3.27.  Appointment  of  Special  Servicer;  Duties  of
                         -----------------------------------------------
Operating Adviser.
-----------------

     (a) GMAC Commercial Mortgage Corporation is hereby appointed as the initial
Special Servicer hereunder.

     (b) The Operating  Adviser shall be entitled to advise the Special Servicer
with respect to the following  actions of the Special  Servicer,  and subject to
Section  3.27(c),  the  Operating  Adviser  may  object to any of the  following
actions in writing  within 10 Business Days of having been notified  thereof and
having been  provided with all  reasonably  requested  information  with respect
thereto  (provided  that if such written  objection has not been received by the
Special  Servicer  within  such 10  Business  Day  period,  then  the  Operating
Adviser's approval shall be deemed to have been given):

                (i)  any  foreclosure  upon or  comparable   conversion   (which
may include  acquisitions  of an REO  Property) of the  ownership of  properties
securing such of the Specially Serviced Mortgage Loans as come into and continue
in default;

                (ii) any amendment, waiver or modification  of  a Money Term  or
any other material non-monetary term of a Specially Serviced Mortgage Loan;

                (iii) any proposed sale of a  defaulted  Mortgage  Loan  or  REO
Property  (other  than in  connection  with the  termination  of the Trust  Fund
pursuant to Section 9.1) for less than the Repurchase Price;

                (iv)  any acceptance of a discounted payoff;

                (v) any  determination  to bring an REO Property into compliance
with applicable  environmental laws or to otherwise address hazardous  materials
located at an REO Property;

                (vi)  any release of collateral  (other than in accordance  with
the terms of, or upon satisfaction of, a Mortgage Loan);

                (vii) any acceptance of substitute or additional collateral  for
a Mortgage Loan;

               (viii) any waiver of  a  "due-on-sale"  or   "due-on-encumbrance"
clause;

                (ix)  any  acceptance  of an  assumption  agreement  releasing a
Borrower from liability under a Mortgage Loan; and

                (x)   Any release of a letter of credit or debt service reserve;

provided,  that  with  respect  to items  (viii)  and (ix)  that do not  involve
Specially  Serviced  Mortgage Loans, the 10 Business Day period referenced above
shall be five  Business  Days if the  Mortgage  Loan is not  within  the  Review
Threshold;  provided  further  that,  in the  event  that the  Special  Servicer
determines  that  immediate  action is  necessary to protect the interest of the
Certificateholders  (as a collective  whole),  the Special Servicer may take any
such action without waiting for the Operating Adviser's response.

                                      100

<PAGE>


      In addition,  subject to Section 3.27(c), the Operating Adviser may advise
the Special  Servicer to take, or to refrain from taking,  such other actions as
Operating Adviser may deem advisable.

     (c) Notwithstanding  anything herein to the contrary, no advice,  direction
or approval rights from or by the Operating Adviser,  as contemplated by Section
3.27(b),  may (and the Special Servicer and the Master Servicer shall ignore and
act without  regard to any such advice,  direction  or approval  rights that the
Special Servicer or the Master Servicer, as applicable,  has determined,  in its
reasonable,  good  faith  judgment,  would)  (A)  require  or cause the  Special
Servicer or the Master Servicer,  as applicable,  to violate applicable law, the
terms of any  Mortgage  Loan,  any  provision  of this  Agreement  or the  REMIC
Provisions,  including, without limitation, the Special Servicer's or the Master
Servicer's,  as applicable,  obligation to act in accordance  with the Servicing
Standard, (B) result in an Adverse REMIC Event with respect to any REMIC Pool or
an Adverse Grantor Trust Event with respect to the Grantor Trust, (C) expose the
Trust Fund,  the  Depositor,  the Master  Servicer,  the Special  Servicer,  the
Trustee  or  the  Fiscal  Agent,  or  their  respective  Affiliates,   officers,
directors,  employees,  agents  or  partners,  to any  material  claim,  suit or
liability,  or (D)  materially  expand  the scope of the  Master  Servicer's  or
Special  Servicer's  responsibilities  under this  Agreement.  Furthermore,  the
Special  Servicer shall not be obligated to obtain the approval of the Operating
Adviser for any actions to be taken by the Special  Servicer with respect to any
particular  Mortgage Loan if (i) the Special  Servicer  has, in accordance  with
Section  3.27(b),  notified  the  Operating  Adviser in  writing of the  various
actions that the Special Servicer  proposes to take with respect to the work-out
or  liquidation  of such Mortgage Loan and (ii) for 60 days  following the first
such notice, the Operating Adviser has objected to all of those proposed actions
and has failed to suggest any  alternative  actions  that the  Special  Servicer
considers to be consistent with the Servicing Standard.

     (d) The Operating Adviser and its officers, directors, employees and owners
shall have no liability to the  Certificateholders  for any action taken, or for
refraining from the taking of any action.  Each  Certificateholder  acknowledges
and agrees, by its acceptance of its  Certificates,  that, the Operating Adviser
may have special relationships and interests that conflict with those of holders
of one or more  Classes of  Certificates,  that the  Operating  Adviser  may act
solely in the  interests  of the  holders  of the  Controlling  Class,  that the
Operating  Adviser  does not have any  duties  to the  holders  of any  Class of
Certificates  other than the Controlling  Class,  that the Operating Adviser may
take actions that favor the  interests of the holders of the  Controlling  Class
over  the  interests  of the  holders  of one or more  other  Classes,  that the
Operating Adviser shall not be deemed to have been negligent or reckless,  or to
have acted in bad faith or engaged in willful misconduct by reason of its having
acted solely in the interests of the Controlling  Class,  and that the Operating
Adviser  shall  have  no  liability  whatsoever  for  having  so  acted,  and no
Certificateholder  may take any action whatsoever  against the Operating Adviser
for having so acted.

     (e) The  Operating  Adviser,  if any,  may direct the Trustee to remove the
Special  Servicer  at any  time  effective  upon  the  appointment  and  written
acceptance of such appointment by a successor to the Special Servicer  appointed
by the Operating Adviser.  The existing Special Servicer shall be deemed to have
resigned  simultaneously  with such  designated  successor  becoming the Special
Servicer hereunder;  provided,  however, that (i) the resigning Special Servicer
shall  continue to be  entitled  to receive  all amounts  accrued or owing to it
under this  Agreement  on or prior to the  effective  date of such  resignation,
whether in respect of

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Servicing Compensation or otherwise, including, without limitation, Workout Fees
payable in respect of  Mortgage  Loans which  became  Corrected  Mortgage  Loans
during the period it acted as Special  Servicer as and to the extent provided in
Section 3.12(b), and (ii) it and its directors,  officers,  employees and agents
shall  continue  to be  entitled  to the  benefits  of  Sections  6.1  and  6.3,
notwithstanding  any such  resignation.  Such resigning  Special  Servicer shall
cooperate with the Trustee and the replacement Special Servicer in effecting the
termination  of the resigning  Special  Servicer's  responsibilities  and rights
hereunder,  including, without limitation, the transfer within two Business Days
to the replacement Special Servicer for administration by it of all cash amounts
that shall at the time be or should  have been  deposited  in any REO Account or
delivered by the Special  Servicer to the Master Servicer or that are thereafter
received with respect to Specially Serviced Mortgage Loans and REO Properties.

     (f) Notwithstanding the foregoing,  the removal of the Special Servicer and
the appointment of a successor Special Servicer shall not be effective until (i)
the   successor   Special   Servicer   has   assumed  in  writing   all  of  the
responsibilities,  duties and  liabilities  of the  Special  Servicer  hereunder
pursuant to an agreement  satisfactory  to the Trustee,  and (ii) Rating  Agency
Confirmation is obtained with respect to such  appointment (the cost, if any, of
obtaining such confirmation to be paid by the Operating Adviser or the successor
Special Servicer).

          Section 3.28.  Modifications,   Waivers,   Amendments, Extensions
                         --------------------------------------------------
and  Consents, Defeasance.
-------------------------

     (a) The Master  Servicer,  in accordance  with the  Servicing  Standard and
subject to the terms of this Agreement, shall have the following powers:

                (i)  Other  than  stated  herein,  the  Master   Servicer,    in
accordance  with the  Servicing  Standard,  may (A)  agree to any  modification,
waiver,  amendment or consent of or relating to any non-Money Term of a Mortgage
Loan that is not a Specially Serviced Mortgage Loan; provided,  however, without
the consent of the Special Servicer,  the Master Servicer may not modify,  waive
or amend  (x) any event of  default  provision  of any  Mortgage  Loan,  (y) any
obligation of the Borrower  under the Mortgage Loan to pay any  assumption  fee,
modification fee or any other fees or expenses, all or part of which the Special
Servicer  may be  entitled  to as  Servicing  Compensation  or (z) any term of a
Mortgage Loan  regarding the release or  substitution  of the related  Mortgaged
Property or any other  collateral  (which  consent  shall be deemed to have been
given if not denied in writing  within 5 days of Master  Servicer's  delivery of
its request for such  consent) or (B) modify or amend the terms of any  Mortgage
Loan in order to (I) cure any  ambiguity  therein or (II) correct or  supplement
any  provisions  therein  which may be  inconsistent  with any other  provisions
therein or correct any error,  provided that in the case of either clause (A) or
(B) such  modification  or amendment  would not cause an Adverse  REMIC Event or
Adverse  Grantor  Trust  Event to occur.  Other than as set forth  above in this
Section  3.28(a)(i),  the Master Servicer shall not agree to any modification or
amendment of a Mortgage Loan or any waiver or consent.

                (ii) The Master  Servicer shall notify the Trustee,  the Special
Servicer,  the Operating  Adviser and the Rating  Agencies of any  modification,
waiver or amendment of any term of any Mortgage Loan  permitted by it under this
Section and the date  thereof,  and shall  deliver to the Trustee for deposit in
the related Mortgage File, an original  counterpart of the agreement relating to
such modification, waiver or amendment, promptly following the execution thereof
except to the  extent  such  documents  have been  submitted  to the  applicable
recording  office,  in which event the Master  Servicer shall  promptly  deliver
copies of such

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<PAGE>


documents to the Trustee.  The Trustee shall deliver copies of such documents to
the Holders of the Privately  Placed  Certificates  within 15 days of receipt by
the Trustee thereof.

     (b) The Special  Servicer,  in accordance  with the Servicing  Standard and
subject to the terms of this Agreement, shall have the following powers:

                (i) The Special Servicer may enter into a  modification,  waiver
or amendment  (including,  without  limitation,  the  substitution or release of
collateral or the pledge of additional  collateral)  of the terms of a Specially
Serviced Mortgage Loan,  including any modification,  waiver or amendment to (A)
reduce the amounts owing under any Specially Serviced Mortgage Loan by forgiving
principal,  accrued interest or any Prepayment Premium, (B) reduce the amount of
the Monthly Payment on any Specially Serviced Mortgage Loan, including by way of
a reduction in the related Mortgage Rate, (C) forebear in the enforcement of any
right  granted  under any Note or  Mortgage  relating  to a  Specially  Serviced
Mortgage Loan, (D) extend the Maturity Date of any Specially  Serviced  Mortgage
Loan and/or (E) accept a principal prepayment on any Specially Serviced Mortgage
Loan  during  any  period  during  which  voluntary  Principal  Prepayments  are
prohibited, provided that (1) the related Borrower is in default with respect to
the  Specially  Serviced  Mortgage  Loan  or,  in the  judgment  of the  Special
Servicer,  such  default is  reasonably  foreseeable  and (2) in the  reasonable
judgment of the Special Servicer such  modification  would increase the recovery
on the Mortgage  Loan to  Certificateholders  on a net present  value basis (the
relevant discounting of amounts that will be distributable to Certificateholders
to be performed at the related Net Mortgage Rate).

      In no event shall the Special  Servicer (x) extend the Maturity  Date of a
Specially  Serviced Mortgage Loan beyond the date that is two years prior to the
Rated Final Distribution Date; or (y) if the Specially Serviced Mortgage Loan is
secured by a ground lease,  extend the Maturity Date of such Specially  Serviced
Mortgage Loan beyond a date which is less than 10 years prior to the  expiration
of the term of such ground lease.

      The  determination of the Special  Servicer  contemplated by clause (2) of
the proviso to the first paragraph of this Section 3.28(b)(i) shall be evidenced
by an  Officer's  Certificate  to such effect  delivered  to the Trustee and the
Master  Servicer and  describing in reasonable  detail the basis for the Special
Servicer's  determination.  The Special  Servicer shall append to such Officer's
Certificate  any  information,  including  but not limited to income and expense
statements, rent rolls, property inspection reports and appraisals, that support
such determination.

                (ii) In the event the  Special  Servicer  intends  to  permit  a
Borrower to substitute collateral for all or any portion of a Mortgaged Property
pursuant to Section 3.28(b)(i) or pledge additional  collateral for the Mortgage
Loan pursuant to Section 3.28(b)(i),  if the security interest of the Trust Fund
in such  collateral  would be perfected  by  possession,  or if such  collateral
requires special care or protection, then prior to agreeing to such substitution
or addition of collateral, the Special Servicer shall make arrangements for such
possession,  care or protection,  and prior to agreeing to such  substitution or
addition of collateral (or such arrangement for possession,  care or protection)
shall  obtain the prior  written  consent of the Trustee  with  respect  thereto
(which  consent shall not be  unreasonably  withheld,  delayed or  conditioned);
provided,  however,  that any such  substitution or addition of collateral shall
require Rating Agency  Confirmation  (unless it meets the  requirements  of this
Section 3.28 with respect to defeasance);  provided further,  however,  that the
Trustee  shall  not  be  required  (but  has  the  option)  to  consent  to  any
substitution or addition of collateral or to hold any such collateral

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<PAGE>


which will require the Trustee to undertake any additional duties or obligations
or incur any additional expense.

                (iii) The Special  Servicer will promptly  deliver to the Master
Servicer,  the Operating Adviser,  the Rating Agencies and the Trustee a notice,
specifying  any  such   modifications,   waivers  or  amendments,   such  notice
identifying the affected Specially Serviced Mortgage Loan. Such notice shall set
forth the reasons for such waiver,  modification,  or amendment (including,  but
not limited to, information such as related income and expense statements,  rent
rolls,  occupancy  status,  property  inspections,  and an  internal or external
appraisal  performed in accordance with MAI standards and methodologies (and, if
done externally,  the cost of such appraisal shall be recoverable as a Servicing
Advance subject to the provisions of Section 3.22 hereof)). The Special Servicer
shall also deliver to the Trustee,  for deposit in the related Mortgage File, an
original  counterpart of the agreement relating to such modification,  waiver or
amendment promptly following the execution thereof.

     (c) The Master  Servicer  and the  Special  Servicer,  as  applicable,  may
require, in its discretion, as a condition to granting any request by a Borrower
for any consent,  modification,  waiver or amendment,  that such Borrower pay to
the Master  Servicer or the Special  Servicer,  as applicable,  a reasonable and
customary  modification  fee to the extent permitted by law. The Master Servicer
and the Special Servicer,  as applicable,  may charge the Borrower for any costs
and expenses (including  attorneys' fees) incurred by the Master Servicer or the
Special  Servicer,  as  applicable,   in  connection  with  any  request  for  a
modification,  waiver or  amendment.  No fee  described in this Section shall be
collected by the Master Servicer or the Special  Servicer,  as applicable,  from
the Borrower (or on behalf of the Borrower) in  conjunction  with any consent or
any  modification,  waiver or  amendment  of the  related  Mortgage  Loan if the
collection  of such fee  would  cause  such  consent,  modification,  waiver  or
amendment  to be a  "significant  modification"  of the related  Note within the
meaning of Treasury  Regulation Section  1.860G-2(b).  Subject to the foregoing,
the Master  Servicer  or the Special  Servicer,  as  appropriate,  shall use its
reasonable  efforts,  to  collect  any  modification  fees  and  other  expenses
(including the cost of obtaining any Rating Agency Confirmation)  connected with
a  permitted  modification,  waiver or  amendment  of a  Mortgage  Loan from the
Borrower  and if such amount is not paid by the  Borrower,  such amount shall be
Advanced as a Servicing  Advance,  unless such Advance would be a Nonrecoverable
Advance.  The  inability  of the  Borrower  to pay any costs and  expenses  of a
proposed  modification,  waiver or  amendment  shall not impair the right of the
Special  Servicer,  the Master  Servicer or the Trustee to be  reimbursed by the
Trust Fund for such expenses.

     (d)  Notwithstanding  any other  provision  hereof to the contrary,  if the
terms of a Mortgage Loan require the related  Borrower to obtain the Mortgagee's
consent before changing any franchise with respect to any hotel or motel located
on the related  Mortgaged  Property and the  Mortgage  Loan is within the Review
Threshold,  the Master Servicer or Special  Servicer,  as applicable,  shall not
consent to any such change  unless it shall have first  obtained  Rating  Agency
Confirmation  (the Master Servicer or the Special  Servicer as applicable  shall
use its  reasonable  efforts to cause the Borrower to pay the costs of obtaining
such Rating Agency Confirmation; if such costs are not paid by the Borrower, the
Master  Servicer  shall advance such costs as a Servicing  Advance,  unless such
Advance  would be a  Nonrecoverable  Advance)  and,  in the  case of the  Master
Servicer, consent of the Special Servicer. The Special Servicer shall notify the
Operating Adviser of any change in a franchisor.

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<PAGE>


     (e)  Each of the  following  actions,  to the  extent  the  consent  of the
Mortgagee  under the related  Mortgage  Loan is required or  permitted,  will be
subject to a Rating Agency Confirmation:

                a. a transfer of a direct or indirect  ownership  interest in  a
Borrower (except (i) transfers of less than a controlling interest or 49% in the
aggregate and (ii) transfers solely for estate planning  purposes) and transfers
with respect to a Mortgage Loan within the Review Threshold;

                b. an assumption of a Mortgage Loan  that  is  within the Review
Threshold;

                c.  the  incurrence  of  any  additional  debt  secured  by  the
Mortgaged Property;

                d.  any  material  amendment  to the  Mortgage  Loan  documents,
grant of a material easement or encumbrance, or change in franchise affiliation,
in each case with respect to a Mortgage Loan within the Review Threshold; and

                e. any  change  in property  manager  for a  Mortgaged  Property
secured by a Mortgage Loan representing 5% or more of the then current aggregate
outstanding principal balance of all Mortgage Loans in the pool.

In connection with any of the foregoing  requests,  the Special Servicer (or the
Master Servicer with respect to sales,  transfers or assumptions or the creation
of liens or encumbrances involving  non-Specially Serviced Mortgage Loans) shall
prepare and deliver to each Rating Agency and,  upon  request,  to the Operating
Adviser a memorandum  outlining  its analysis and  recommendation  in accordance
with the Servicing Standard, together with copies of all relevant documentation.
The Special Servicer and the Master Servicer, as applicable,  shall also prepare
and provide each Rating Agency with such  memorandum and  documentation  for all
consents granted by the Special Servicer or the Master Servicer,  as applicable,
for transfers,  assumptions,  additional debt,  material  amendments,  grants of
material easement or encumbrances,  franchise  affiliation  changes and property
manager changes  concerning  Mortgage Loans below the Review Threshold,  but for
which the Special Servicer's or the Master Servicer's,  as applicable,  decision
in accordance with the Servicing Standard will be sufficient and a Rating Agency
Confirmation will not be required.

     (f) With respect to each Mortgage Loan that provides for defeasance, to the
extent  permitted by the terms of such Mortgage Loan, the Master  Servicer shall
require the related Borrower to (i) provide replacement collateral consisting of
U.S. government  securities within the meaning of Treas. Reg.  1.860G-2(a)(8)(i)
in an amount  sufficient to make all scheduled  payments under the Mortgage Note
when due,  (ii)  deliver a  certificate  from an  independent  certified  public
accounting firm certifying that the replacement collateral is sufficient to make
such  payments,  (iii)  designate  a  Single  Purpose  Entity  (which  may  be a
subsidiary of the Depositor or the Master  Servicer  established for the purpose
of assuming all defeased Mortgage Loans) to assume the Mortgage Loan and own the
collateral  and (iv)  provide  an  opinion of  counsel  that the  Trustee  has a
perfected security interest in the new collateral.  If the terms of the Mortgage
Loan permit the Master  Servicer to impose the foregoing  requirements or if the
Master  Servicer  satisfies  such  requirements  on its  own,  a  Rating  Agency
Confirmation  is not required.  In such case, the Master  Servicer shall provide
the Rating Agencies with notice

                                      105
<PAGE>


that the foregoing  requirements have been met. The Master Servicer shall notify
the Operating Adviser of any Mortgage Loans that are defeased.  If however,  the
terms of the  Mortgage  Loan do not permit the Master  Servicer  to impose  such
requirements  and if the Master  Servicer does not satisfy such  requirements on
its own, then the Master Servicer shall obtain a Rating Agency Confirmation with
respect to such  defeasance.  The Master Servicer shall not execute a defeasance
unless (i) the Mortgage Loan requires the Borrower to pay all Rating Agency fees
associated with  defeasance (if Rating Agency  approval is a specific  condition
precedent thereto) and all other reasonable expenses associated with defeasance,
including,  but not limited to,  accountants fees and opinions of counsel,  (ii)
the Borrower is required to provide all opinions of counsel,  including opinions
of counsel that the  defeasance  will not cause an Adverse  REMIC Event and that
the Mortgage Loan Documents are fully enforceable in accordance with their terms
(subject to bankruptcy,  insolvency and similar  standard  exceptions),  and any
applicable Rating Agency Confirmations,  or (iii) other arrangements for payment
of such costs are made at no expense to the Trust Fund; provided,  however, that
in no event shall the proposed  "other  arrangements"  in clause (iii) result in
any  liability  to the Trust Fund  including  an  indemnification  of the Master
Servicer or the Special Servicer which may result in legal expenses to the Trust
Fund.

     (g)  Notwithstanding  anything to the contrary contained in this Agreement,
neither the Master  Servicer nor the Special  Servicer  shall  amend,  modify or
waive  any  provision  of a  Mortgage  Loan in a  manner  that  would  reduce  a
Borrower's obligation to pay the costs associated with obtaining a Rating Agency
Confirmation,  unless it shall  first  have  received  the  consent of the other
servicer.

          Section 3.29.  Interest Reserve Account.
                         ------------------------

     (a) On each  Distribution  Date  relating to any  Interest  Accrual  Period
ending in any February  and on any  Distribution  Date  relating to any Interest
Accrual  Period ending in any January which occurs in a year which is not a leap
year,  the Trustee shall deposit from the amount  remitted to the Trustee by the
Master  Servicer  pursuant  to Section  3.6(a)(i),  in  respect of the  Interest
Reserve Loans,  into the Interest Reserve Account,  an amount equal to one day's
interest on the Stated Principal Balance of the Interest Reserve Loans as of the
Due Date  occurring in the month in which such  Distribution  Date occurs at the
related Net Mortgage  Rate, to the extent a full Monthly  Payment or P&I Advance
is made and  received  in  respect  thereof  (all  amounts so  deposited  in any
consecutive January and February, "Interest Reserve Amounts").

     (b) On each  Distribution  Date  occurring  in  March,  the  Trustee  shall
withdraw  from the  Interest  Reserve  Account an amount  equal to the  Interest
Reserve  Amounts from the preceding  January and  February,  if any, and deposit
such amount into the Distribution Account.

                                   ARTICLE IV.
                                   -----------

                       DISTRIBUTIONS TO CERTIFICATEHOLDERS

          Section 4.1.   Distributions of REMIC I.
                         ------------------------

     (a) On each  Distribution  Date,  the Trustee  shall be deemed to apply the
Available  Funds as is  attributable to each Mortgage Loan for such date for the
following purposes and in the following order of priority:

                                      106

<PAGE>

                (i)  to pay interest to  REMIC  II  in  respect  of each REMIC I
Regular Interest, up to an amount equal to, and pro rata in accordance with, all
Uncertificated Distributable Interest for each such REMIC I Regular Interest for
such Distribution Date;

                (ii) to pay  principal to REMIC  II  in  respect of each REMIC I
Regular Interest, up to an amount equal to, and pro rata in accordance with, the
excess, if any, of the Uncertificated  Principal Balance of such REMIC I Regular
Interest  outstanding  immediately  prior to such  Distribution  Date,  over the
Stated  Principal  Balance  of the  related  Mortgage  Loan  (including  without
limitation  an REO  Mortgage  Loan or, if  applicable,  a  Qualified  Substitute
Mortgage Loan) that will be outstanding  immediately following such Distribution
Date;

                (iii) to reimburse REMIC II for any Realized Losses and  Expense
Losses previously deemed allocated to the various REMIC I Regular Interests,  up
to an amount equal to, and pro rata in accordance  with, the Realized Losses and
Expense Losses, if any,  previously  allocated to such REMIC I Regular Interests
and for which no reimbursement has previously been paid; and

                (iv) to the Holders of the Class R-I Certificates  that portion,
if any, of the Available  Funds for such date that has not otherwise been deemed
paid to REMIC II in respect of the REMIC I Regular  Interests  pursuant  to this
Section 4.1(a).

     (b) On each  Distribution  Date,  the Trustee shall be deemed to apply each
Prepayment  Premium  then on deposit in the  Distribution  Account and  received
during or prior to the related Collection Period, to pay additional  interest to
REMIC II in respect of the REMIC I Regular Interest that relates to the Mortgage
Loan  (including  without  limitation an REO Mortgage Loan or, if applicable,  a
Qualified  Substitute  Mortgage  Loan) as to which such  Prepayment  Premium was
received.

     (c) On each Distribution Date, after the deemed  distributions  pursuant to
Section  4.1(b) on that date,  the Trustee  shall  apply any Excess  Liquidation
Proceeds  received with respect to a Mortgage Loan then on deposit in the Excess
Liquidation  Proceeds Account,  first, as a deemed  reimbursement of the REMIC I
Regular Interests for, and to the extent of, any unreimbursed Realized Losses or
Expense  Losses  previously  allocated  to them;  second,  to pay any  Servicing
Advances,  Advance  Interest or other  amounts  that could  constitute  Realized
Losses or Expense  Losses in the  future;  and third upon the  reduction  of the
aggregate  Uncertificated Principal Balances of the REMIC I Regular Interests to
zero,  to pay any amounts  remaining  on deposit in such  account to the Special
Servicer as additional Special Servicer compensation.

          Section 4.2.   Distributions of REMIC II.
                         -------------------------

     (a) On each  Distribution  Date,  the  Trustee  shall,  subject  to Section
4.2(b),  be deemed to distribute the Available  Funds for REMIC II to holders of
the REMIC II Regular Interests,  for the following purposes and in the following
order of priority:

                (i) an amount equal to  the  Distributable  Certificate Interest
for the Class A-1 Certificates,  Class A-2 Certificates and Class X Certificates
to Class A-1-II Interest, Class A-2-II Interest, Class B-II Interest, Class C-II
Interest,  Class D-II Interest,  Class E-II Interest, Class F-II Interest, Class
G-II Interest,  Class H-II Interest,  Class J-II Interest,  Class K-II Interest,
Class L-II  Interest,  Class M-II  Interest,  Class N-II Interest and Class O-II
Interest,  divided among such REMIC II Regular Interests in proportion to (A) in
the case of the Class A-1-II  Interest and Class  A-2-II  Interest,  the related
Uncertificated Distributable Interest for such

                                      107
<PAGE>


Distribution Date and (B) in the case of each of the Class B-II Interest,  Class
C-II Interest,  Class D-II Interest,  Class E-II Interest,  Class F-II Interest,
Class G-II  Interest,  Class H-II  Interest,  Class  J-II  Interest,  Class K-II
Interest,  Class L-II  Interest,  Class M-II  Interest,  Class N-II Interest and
Class O-II Interest,  the related Class X Portion of the related  Uncertificated
Distributable Interest for such Distribution Date;

                (ii) to the  Class A-1-II  Interest, the Principal  Distribution
Amount for such Distribution Date, until the Uncertificated Principal Balance of
the Class A-1-II Interest has been reduced to zero;

                (iii) upon  payment  in  full of  the  Uncertificated  Principal
Balance  of the  Class  A-1-II  Interest,  to the  Class  A-2-II  Interest,  the
Principal   Distribution   Amount  for  such   Distribution   Date,   until  the
Uncertificated  Principal  Balance of the Class A-2-II Interest has been reduced
to zero; the Principal Distribution Amount herein will be reduced by any portion
thereof distributed to the holders of the Class A-1-II Interest;

                (iv) to Class A-1-II Interest and Class A-2-II Interest pro rata
on the basis of their respective entitlements to reimbursement described in this
clause (iv), to reimburse any  unreimbursed  Realized  Losses and Expense Losses
previously  allocated  to Class A-1-II  Interest and Class A-2-II  Interest as a
result of the allocation of Realized  Losses and Expense Losses to the Class A-1
and Class A-2 Certificates;

                (v)  to  the  Class  B-II   Interest,    the  remainder  of  the
Uncertificated  Distributable  Interest  for such REMIC II Regular  Interest for
such  Distribution  Date to the extent not  distributed  pursuant  to clause (i)
above;

                (vi) upon  payment   in  full of  the  Uncertificated  Principal
Balances of the Class  A-1-II  Interest and the Class  A-2-II  Interest,  to the
Class B-II Interest,  the Principal  Distribution  Amount for such  Distribution
Date, until the Uncertificated  Principal Balance of the Class B-II Interest has
been reduced to zero; the Principal  Distribution  Amount herein will be reduced
by any portion  thereof  distributed to the holders of the Class A-1-II Interest
and Class A-2-II Interest;

                (vii) to the Class B-II Interest, to reimburse any  unreimbursed
Realized Losses and Expense Losses previously allocated thereto;

                (viii) to  the  Class   C-II  Interest,  the  remainder  of  the
Uncertificated  Distributable  Interest  for such REMIC II Regular  Interest for
such  Distribution  Date to the extent not  distributed  pursuant  to clause (i)
above;

                (ix) upon  payment  in  full  of  the  Uncertificated  Principal
Balance of the Class B-II Interest,  to the Class C-II  Interest,  the Principal
Distribution  Amount  for  such  Distribution  Date,  until  the  Uncertificated
Principal  Balance  of the Class C-II  Interest  has been  reduced to zero;  the
Principal  Distribution  Amount  herein will be reduced by any  portion  thereof
distributed to the holders of the Class A-1-II  Interest,  Class A-2-II Interest
and Class B-II Interest;

                (x)   to the Class C-II  Interest, to reimburse any unreimbursed
Realized Losses and Expense Losses previously allocated thereto;

                (xi)  to  the   Class   D-II   Interest,  the remainder  of  the
Uncertificated  Distributable  Interest  for such REMIC II Regular  Interest for
such  Distribution  Date to the extent not  distributed  pursuant  to clause (i)
above;

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<PAGE>


               (xii) upon  payment  in  full  of  the  Uncertificated  Principal
Balance of the Class C-II Interest,  to the Class D-II  Interest,  the Principal
Distribution  Amount  for  such  Distribution  Date,  until  the  Uncertificated
Principal  Balance  of the Class D-II  Interest  has been  reduced to zero;  the
Principal  Distribution  Amount  herein will be reduced by any  portion  thereof
distributed to the holders of the Class A-1-II Interest,  Class A-2-II Interest,
Class B-II Interest and Class C-II Interest;

               (xiii) to the Class D-II Interest, to reimburse any  unreimbursed
Realized Losses and Expense Losses previously allocated thereto;

                (xiv)  to  the  Class  E-II  Interest,   the  remainder  of  the
Uncertificated  Distributable  Interest  for such REMIC II Regular  Interest for
such  Distribution  Date to the extent not  distributed  pursuant  to clause (i)
above;

                (xv)  upon  payment  in  full  of  the Uncertificated  Principal
Balance of the Class D-II Interest,  to the Class E-II  Interest,  the Principal
Distribution  Amount  for  such  Distribution  Date,  until  the  Uncertificated
Principal  Balance  of the Class E-II  Interest  has been  reduced to zero;  the
Principal  Distribution  Amount  herein will be reduced by any  portion  thereof
distributed  to the holders of the Class A-1-II,  Class A-2-II  Interest,  Class
B-II Interest, Class C-II Interest and Class D-II Interest;

                (xvi) to the Class E-II Interest, to reimburse any  unreimbursed
Realized Losses and Expense Losses previously allocated thereto;

                (xvii)  to  the  Class  F-II  Interest,  the  remainder  of  the
Uncertificated  Distributable  Interest  for such REMIC II Regular  Interest for
such  Distribution  Date to the extent not  distributed  pursuant  to clause (i)
above;

                (xviii)  upon  payment in full of the  Uncertificated  Principal
Balance of the Class E-II Interest,  to the Class F-II  Interest,  the Principal
Distribution  Amount  for  such  Distribution  Date,  until  the  Uncertificated
Principal  Balance  of the Class F-II  Interest  has been  reduced to zero;  the
Principal  Distribution  Amount  herein will be reduced by any  portion  thereof
distributed to the holders of the Class A-1-II Interest,  Class A-2-II Interest,
Class B-II  Interest,  Class C-II  Interest,  Class D-II Interest and Class E-II
Interest;

                (xix) to the Class F-II Interest, to reimburse any  unreimbursed
Realized Losses and Expense Losses previously allocated thereto;

                (xx)  to   the  Class  G-II  Interest,   the  remainder  of  the
Uncertificated  Distributable  Interest  for such REMIC II Regular  Interest for
such  Distribution  Date to the extent not  distributed  pursuant  to clause (i)
above;

                (xxi) upon  payment  in  full  of  the Uncertificated  Principal
Balance of the Class F-II Interest,  to the Class G-II  Interest,  the Principal
Distribution  Amount  for  such  Distribution  Date,  until  the  Uncertificated
Principal  Balance  of the Class G-II  Interest  has been  reduced to zero;  the
Principal  Distribution  Amount  herein will be reduced by any  portion  thereof
distributed to the holders of the Class A-1-II Interest,  Class A-2-II Interest,
Class B-II  Interest,  Class C-II  Interest,  Class  D-II  Interest,  Class E-II
Interest and Class F-II Interest;

               (xxii) to the Class G-II Interest, to reimburse any  unreimbursed
Realized Losses and Expense Losses previously allocated thereto;


                                      109
<PAGE>

                (xxiii) to the Class H-II  Interest,   the   remainder   of  the
Uncertificated  Distributable  Interest  for such REMIC II Regular  Interest for
such  Distribution  Date to the extent not  distributed  pursuant  to clause (i)
above;

                (xxiv) upon  payment  in  full  of  the Uncertificated Principal
Balance of the Class G-II Interest,  to the Class H-II  Interest,  the Principal
Distribution  Amount  for  such  Distribution  Date,  until  the  Uncertificated
Principal  Balance  of the Class H-II  Interest  has been  reduced to zero;  the
Principal  Distribution  Amount  herein will be reduced by any  portion  thereof
distributed to the holders of the Class A-1-II Interest,  Class A-2-II Interest,
Class B-II  Interest,  Class C-II  Interest,  Class  D-II  Interest,  Class E-II
Interest, Class F-II Interest and Class G-II Interest;

                (xxv) to the Class H-II Interest, to reimburse any  unreimbursed
Realized Losses and Expense Losses previously allocated thereto;

               (xxvi) to  the  Class  J-II  Interest,  the   remainder  of   the
Uncertificated  Distributable  Interest  for such REMIC II Regular  Interest for
such  Distribution  Date to the extent not  distributed  pursuant  to clause (i)
above;

                (xxvii)  upon  payment in full of the  Uncertificated  Principal
Balance of the Class H-II Interest,  to the Class J-II  Interest,  the Principal
Distribution  Amount  for  such  Distribution  Date,  until  the  Uncertificated
Principal  Balance  of the Class J-II  Interest  has been  reduced to zero;  the
Principal  Distribution  Amount  herein will be reduced by any  portion  thereof
distributed to the holders of the Class A-1-II Interest,  Class A-2-II Interest,
Class B-II  Interest,  Class C-II  Interest,  Class  D-II  Interest,  Class E-II
Interest, Class F-II Interest, Class G-II Interest and Class H-II Interest;

                (xxviii)  to   the   Class  J-II  Interest,   to  reimburse  any
unreimbursed Realized Losses and Expense Losses previously allocated thereto;

                (xxix)  to  the  Class  K-II  Interest,  the  remainder  of  the
Uncertificated  Distributable  Interest  for such REMIC II Regular  Interest for
such  Distribution  Date to the extent not  distributed  pursuant  to clause (i)
above;

                (xxx) upon  payment  in  full  of  the Uncertificated  Principal
Balance of the Class J-II Interest,  to the Class K-II  Interest,  the Principal
Distribution  Amount  for  such  Distribution  Date,  until  the  Uncertificated
Principal  Balance  of the Class K-II  Interest  has been  reduced to zero;  the
Principal  Distribution  Amount  herein will be reduced by any  portion  thereof
distributed to the holders of the Class A-1-II Interest,  Class A-2-II Interest,
Class B-II  Interest,  Class C-II  Interest,  Class  D-II  Interest,  Class E-II
Interest,  Class F-II  Interest,  Class G-II  Interest,  Class H-II Interest and
Class J-II Interest;

                (xxxi) to the Class K-II Interest, to reimburse any unreimbursed
Realized Losses and Expense Losses previously allocated thereto;

                (xxxii)  to the  Class  L-II  Interest,  the  remainder  of  the
Uncertificated  Distributable  Interest  for such REMIC II Regular  Interest for
such  Distribution  Date to the extent not  distributed  pursuant  to clause (i)
above;

                (xxxiii)  upon payment in full of the  Uncertificated  Principal
Balance of the Class K-II Interest,  to the Class L-II  Interest,  the Principal
Distribution  Amount  for  such  Distribution  Date,  until  the  Uncertificated
Principal  Balance  of the Class L-II  Interest  has been  reduced to zero;  the
Principal  Distribution  Amount  herein will be reduced by any  portion  thereof
distributed to the holders of the Class A-1-II Interest,  Class A-2-II Interest,
Class B-II Interest,

                                      110
<PAGE>


Class C-II  Interest,  Class D-II  Interest,  Class  E-II  Interest,  Class F-II
Interest,  Class G-II  Interest,  Class H-II  Interest,  Class J-II Interest and
Class K-II Interest;

                (xxxiv)  to   the   Class   L-II  Interest,   to  reimburse  any
unreimbursed Realized Losses and Expense Losses previously allocated thereto;

                (xxxv)  to  the  Class  M-II  Interest,  the  remainder  of  the
Uncertificated  Distributable  Interest  for such REMIC II Regular  Interest for
such  Distribution  Date to the extent not  distributed  pursuant  to clause (i)
above;

                (xxxvi)  upon  payment in full of the  Uncertificated  Principal
Balance of the Class L-II Interest,  to the Class M-II  Interest,  the Principal
Distribution  Amount  for  such  Distribution  Date,  until  the  Uncertificated
Principal  Balance  of the Class M-II  Interest  has been  reduced to zero;  the
Principal  Distribution  Amount  herein will be reduced by any  portion  thereof
distributed to the holders of the Class A-1-II Interest,  Class A-2-II Interest,
Class B-II  Interest,  Class C-II  Interest,  Class  D-II  Interest,  Class E-II
Interest,  Class F-II Interest,  Class G-II Interest, Class H-II Interest, Class
J-II Interest, Class K-II Interest and Class L-II Interest;

                (xxxvii) to  the   Class   M-II   Interest,   to  reimburse  any
unreimbursed Realized Losses and Expense Losses previously allocated thereto;

               (xxxviii)  to  the Class  N-II  Interest,  the  remainder  of the
Uncertificated  Distributable  Interest  for such REMIC II Regular  Interest for
such  Distribution  Date to the extent not  distributed  pursuant  to clause (i)
above;

                (xxxix)  upon  payment in full of the  Uncertificated  Principal
Balance of the Class M-II Interest,  to the Class N-II  Interest,  the Principal
Distribution  Amount  for  such  Distribution  Date,  until  the  Uncertificated
Principal  Balance  of the Class N-II  Interest  has been  reduced to zero;  the
Principal  Distribution  Amount  herein will be reduced by any  portion  thereof
distributed to the holders of the Class A-1-II Interest,  Class A-2-II Interest,
Class B-II  Interest,  Class C-II  Interest,  Class  D-II  Interest,  Class E-II
Interest,  Class F-II Interest,  Class G-II Interest, Class H-II Interest, Class
J-II Interest, Class K-II Interest, Class L-II Interest and Class M-II Interest;

                (xl)  to the Class N-II Interest, to reimburse any  unreimbursed
Realized Losses and Expense Losses previously allocated thereto;

                (xli)  to  the  Class  O-II  Interest,   the  remainder  of  the
Uncertificated  Distributable  Interest  for such REMIC II Regular  Interest for
such  Distribution  Date to the extent not  distributed  pursuant  to clause (i)
above;

                (xlii) upon  payment in full  of  the  Uncertificated  Principal
Balance of the Class N-II Interest,  to the Class O-II  Interest,  the Principal
Distribution  Amount  for  such  Distribution  Date,  until  the  Uncertificated
Principal  Balance  of the Class O-II  Interest  has been  reduced to zero;  the
Principal  Distribution  Amount  herein will be reduced by any  portion  thereof
distributed to the holders of the Class A-1-II Interest,  Class A-2-II Interest,
Class B-II  Interest,  Class C-II  Interest,  Class  D-II  Interest,  Class E-II
Interest,  Class F-II Interest,  Class G-II Interest, Class H-II Interest, Class
J-II Interest, Class K-II Interest, Class L-II Interest, Class M-II Interest and
Class N-II Interest;

               (xliii) to the Class O-II Interest, to reimburse any unreimbursed
Realized Losses and Expense Losses previously allocated thereto; and

                (xliv) thereafter, to the Class R-II Certificateholders.

                                      111

<PAGE>


     (b) On each Distribution Date after the aggregate  Uncertificated Principal
Balance of each REMIC II Regular  Interest other than the Class A-1-II  Interest
and the Class A-2-II  Interest has been reduced to zero, and in any event on the
final  Distribution  Date in  connection  with a  termination  of the Trust Fund
described in Article IX hereof, the payments of principal to be made pursuant to
Section 4.2(a)(ii) and (iii) above with respect to the Class A-1-II Interest and
the Class A-2-II Interest,  will be so made to such REMIC II Regular  Interests,
up to an  amount  equal  to,  and pro rata as  between  such  REMIC  II  Regular
Interests  in  accordance  with,  the  respective   then-outstanding   aggregate
Uncertificated Principal Balances of such REMIC II Regular Interests.

     (c) On the final  Distribution Date in connection with a termination of the
Trust Fund described in Article IX hereof,  the distributions of principal to be
made  pursuant to clauses (vi),  (ix),  (xii),  (xv),  (xviii),  (xxi),  (xxiv),
(xxvii), (xxx), (xxxiii),  (xxxvi),  (xxxix) and (xlii) of Section 4.2(a) shall,
in each such case,  subject to the then remaining portion of the Available Funds
for REMIC II for such  date,  be made to the  Holders of the  relevant  Class of
REMIC II Regular  Interests  otherwise  entitled to  distributions  of principal
pursuant to such clause up to an amount  equal to the  aggregate  Uncertificated
Principal  Balance  of such  Class  of REMIC II  Regular  Interests  outstanding
immediately prior to such Distribution Date.

     (d) On each  Distribution  Date,  the Trustee shall be deemed to distribute
any Prepayment Premiums deemed distributed to the REMIC I Regular Interests,  to
the REMIC II Regular  Interest then entitled to  distributions of principal from
the Principal  Distribution  Amount (or, if more than one Class of such REMIC II
Regular  Interests is entitled to  distributions of principal from the Principal
Distribution  Amount,  such Prepayment  Premiums shall be deemed to be allocated
among such Classes on a pro rata basis in accordance  with the relative  amounts
of such deemed distributions of principal).

     (e) On each Distribution Date, any Excess  Liquidation  Proceeds on deposit
in the Excess  Liquidation  Proceeds  Account deemed  distributed on the REMIC I
Regular Interests on such date, will in turn be deemed  distributed to reimburse
the REMIC II Regular Interests (in order of alphabetical Class designation) for,
and to the  extent  of,  any  unreimbursed  Realized  Losses or  Expense  Losses
previously  allocated to them.  Distributions will be deemed made to the holders
of the Class A-1-II  Regular  Interests and Class A-2-II  Regular  Interests pro
rata  as  between   such   Classes   in   accordance   with   their   respective
then-outstanding aggregate Uncertificated Principal Balances.

          Section 4.3.   Distributions of REMIC III.
                         --------------------------

     (a) On  each  Distribution  Date,  the  Trustee  shall  withdraw  from  the
Distribution  Account  the  Available  Funds in  respect  of REMIC  III for such
Distribution Date and shall apply such amount for the following  purposes and in
the following order of priority:

                (i)  to pay interest to the Holders  of the  respective  Classes
of Senior  Certificates,  up to an amount  equal to,  and pro rata as among such
Classes in accordance with, all Distributable Certificate Interest in respect of
each such Class of Certificates for such Distribution Date,

                (ii)  to pay principal from the Principal   Distribution  Amount
for such  Distribution  Date, first to the Holders of the Class A-1 Certificates
and second to the Holders of the Class A-2  Certificates  in each case, up to an
amount equal to the lesser of (1) the then-

                                      112
<PAGE>


outstanding  aggregate Certificate Balance of such Class of Certificates and (2)
the remaining portion, if any, of such Principal Distribution Amount;

                (iii)  to reimburse the  Holders  of  the   respective   Classes
of Class A  Certificates,  up to an amount  equal to, and pro rata as among such
Classes in  accordance  with,  the  respective  amounts of  Realized  Losses and
Expense Losses, if any, previously allocated to such Classes of Certificates and
for which no reimbursement has previously been paid; and

                (iv)  to  make payments  on  the  Subordinate  Certificates   as
provided below;

provided that, on each Distribution Date after the aggregate Certificate Balance
of the  Subordinate  Certificates  has been reduced to zero, and in any event on
the final  Distribution  Date in connection with a termination of the Trust Fund
described in Article IX hereof, the payments of principal to be made pursuant to
clause (ii) above with respect to the Class A  Certificates,  will be so made to
the Holders of the respective  Classes of Class A Certificates,  up to an amount
equal to, and pro rata as among such Classes in accordance  with, the respective
then-outstanding aggregate Certificate Balances of such Certificates;

     (b) On each Distribution Date, following the foregoing distributions on the
Senior  Certificates,  the Trustee shall apply the remaining portion, if any, of
the  Available  Funds in  respect  of REMIC III for such date for the  following
purposes and in the following order of priority:

                (i) to pay interest to the Holders of  the Class B Certificates,
up to an amount equal to all  Distributable  Certificate  Interest in respect of
such Class of Certificates for such Distribution Date;

                (ii) if  the  aggregate  Certificate  Balances  of  the  Class A
Certificates  have been reduced to zero,  to pay principal to the Holders of the
Class  B  Certificates,  up  to an  amount  equal  to  the  lesser  of  (A)  the
then-outstanding aggregate Certificate Balance of such Class of Certificates and
(B) the remaining Principal Distribution Amount for such Distribution Date;

                (iii) to reimburse the Holders of the Class B Certificates up to
an amount equal to all Realized  Losses and Expense Losses,  if any,  previously
allocated  to such  Class of  Certificates  and for which no  reimbursement  has
previously been paid;

                (iv) to pay interest to the Holders of the Class C Certificates,
up to an amount equal to all  Distributable  Certificate  Interest in respect of
such Class of Certificates for such Distribution Date;

                (v)  if  the  aggregate  Certificate  Balances of  the  Class  A
and Class B  Certificates  have been  reduced to zero,  to pay  principal to the
Holders of the Class C Certificates,  up to an amount equal to the lesser of (A)
the then-outstanding aggregate Certificate Balance of such Class of Certificates
and (B) the remaining Principal Distribution Amount for such Distribution Date;

                (vi) to reimburse the Holders of the Class C Certificates  up to
an amount equal to all Realized  Losses and Expense Losses,  if any,  previously
allocated  to such  Class of  Certificates  and for which no  reimbursement  has
previously been paid;


                                      113
<PAGE>


                (vii)  to  pay   interest  to   the  Holders  of  the   Class  D
Certificates, up to an amount equal to all Distributable Certificate Interest in
respect of such Class of Certificates for such Distribution Date;

                (viii) if  the  aggregate  Certificate  Balances of the Class A,
Class B and Class C Certificates  have been reduced to zero, to pay principal to
the Holders of the Class D Certificates,  up to an amount equal to the lesser of
(A)  the  then-outstanding  aggregate  Certificate  Balance  of  such  Class  of
Certificates  and (B) the  remaining  Principal  Distribution  Amount  for  such
Distribution Date;

                (ix) to reimburse the Holders of the Class D Certificates  up to
an amount equal to all Realized  Losses and Expense Losses,  if any,  previously
allocated  to such  Class of  Certificates  and for which no  reimbursement  has
previously been paid;

                (x) to pay interest to the Holders of the Class E  Certificates,
up to an amount equal to all  Distributable  Certificate  Interest in respect of
such Class of Certificates for such Distribution Date;

                (xi) if the aggregate Certificate Balances of the Class A, Class
B, Class C and Class D Certificates  have been reduced to zero, to pay principal
to the Holders of the Class E Certificates,  up to an amount equal to the lesser
of (A) the  then-outstanding  aggregate  Certificate  Balance  of such  Class of
Certificates  and (B) the  remaining  Principal  Distribution  Amount  for  such
Distribution Date;

                (xii) to reimburse the Holders of the Class E Certificates up to
an amount equal to all Realized  Losses and Expense Losses,  if any,  previously
allocated  to such  Class of  Certificates  and for which no  reimbursement  has
previously been paid;

                (xiii) to  pay   interest  to  the  Holders   of  the   Class  F
Certificates, up to an amount equal to all Distributable Certificate Interest in
respect of such Class of Certificates for such Distribution Date;

                (xiv) if  the  aggregate  Certificate  Balances  of the Class A,
Class B, Class C, Class D and Class E Certificates have been reduced to zero, to
pay principal to the Holders of the Class F Certificates,  up to an amount equal
to the lesser of (A) the then-outstanding  aggregate Certificate Balance of such
Class of Certificates and (B) the remaining  Principal  Distribution  Amount for
such Distribution Date;

                (xv) to reimburse the Holders of the Class F Certificates  up to
an amount equal to all Realized  Losses and Expense Losses,  if any,  previously
allocated  to such  Class of  Certificates  and for which no  reimbursement  has
previously been paid;

               (xvi) to pay interest to the Holders of the Class G Certificates,
up to an amount equal to all  Distributable  Certificate  Interest in respect of
such Class of Certificates for such Distribution Date;

              (xvii) if the aggregate Certificate Balances of the Class A, Class
B, Class C, Class D, Class E and Class F Certificates have been reduced to zero,
to pay  principal  to the Holders of the Class G  Certificates,  up to an amount
equal to the lesser of (A) the then-outstanding aggregate Certificate Balance of
such Class of Certificates and (B) the remaining  Principal  Distribution Amount
for such Distribution Date;

                                      114

<PAGE>

                (xviii)  to reimburse the Holders of the Class G Certificates up
to an amount equal to all Realized Losses and Expense Losses, if any, previously
allocated  to such  Class of  Certificates  and for which no  reimbursement  has
previously been paid;

                  (xix)  to   pay   interest  to   the  Holders  of  the Class H
Certificates, up to an amount equal to all Distributable Certificate Interest in
respect of such Class of Certificates for such Distribution Date;

                   (xx) if the  aggregate Certificate  Balances  of the Class A,
Class B, Class C, Class D, Class E, Class F and Class G  Certificates  have been
reduced to zero, to pay principal to the Holders of the Class H Certificates, up
to an  amount  equal  to  the  lesser  of  (A)  the  then-outstanding  aggregate
Certificate  Balance  of such  Class  of  Certificates  and  (B)  the  remaining
Principal Distribution Amount for such Distribution Date;

                (xxi) to reimburse the Holders of the Class H Certificates up to
an amount equal to all Realized  Losses and Expense Losses,  if any,  previously
allocated  to such  Class of  Certificates  and for which no  reimbursement  has
previously been paid;

                (xxii)  to   pay   interest  to   the  Holders  of  the  Class J
Certificates, up to an amount equal to all Distributable Certificate Interest in
respect of such Class of Certificates for such Distribution Date;

                (xxiii) if the aggregate  Certificate  Balances of  the Class A,
Class B, Class C,  Class D,  Class E, Class F, Class G and Class H  Certificates
have been  reduced  to zero,  to pay  principal  to the  Holders  of the Class J
Certificates,  up to an amount  equal to the lesser of (A) the  then-outstanding
aggregate  Certificate  Balance  of  such  Class  of  Certificates  and  (B) the
remaining Principal Distribution Amount for such Distribution Date;

                (xxiv) to  reimburse  the  Holders of the  Class J  Certificates
up to an  amount  equal to all  Realized  Losses  and  Expense  Losses,  if any,
previously   allocated  to  such  Class  of   Certificates   and  for  which  no
reimbursement has previously been paid;

                (xxv)  to  pay  interest   to  the  Holders   of   the  Class  K
Certificates, up to an amount equal to all Distributable Certificate Interest in
respect of such Class of Certificates for such Distribution Date;

                (xxvi) if  the aggregate  Certificate  Balances of  the Class A,
Class B,  Class C,  Class D,  Class E,  Class F,  Class G,  Class H and  Class J
Certificates  have been reduced to zero,  to pay principal to the Holders of the
Class  K  Certificates,  up  to an  amount  equal  to  the  lesser  of  (A)  the
then-outstanding aggregate Certificate Balance of such Class of Certificates and
(B) the remaining Principal Distribution Amount for such Distribution Date;

                (xxvii) to reimburse the Holders of the Class K Certificates  up
to an amount equal to all Realized Losses and Expense Losses, if any, previously
allocated  to such  Class of  Certificates  and for which no  reimbursement  has
previously been paid;

               (xxviii) to    pay  interest  to  the   Holders   of  the Class L
Certificates, up to an amount equal to all Distributable Certificate Interest in
respect of such Class of Certificates for such Distribution Date;

                (xxix) if  the aggregate  Certificate  Balances  of the Class A,
Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J and Class
K Certificates have been reduced to zero, to pay principal to the Holders of the
Class L Certificates, up to an amount equal

                                      115
<PAGE>


to the lesser of (A) the then-outstanding  aggregate Certificate Balance of such
Class of Certificates and (B) the remaining  Principal  Distribution  Amount for
such Distribution Date;

                (xxx) to reimburse the Holders of the Class L Certificates up to
an amount equal to all Realized  Losses and Expense Losses,  if any,  previously
allocated  to such  Class of  Certificates  and for which no  reimbursement  has
previously been paid;

                (xxxi)  to   pay   interest   to  the  Holders   of  the Class M
Certificates, up to an amount equal to all Distributable Certificate Interest in
respect of such Class of Certificates for such Distribution Date;

                (xxxii)  if  the aggregate  Certificate Balances of the Class A,
Class B,  Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K
and Class L  Certificates  have been  reduced to zero,  to pay  principal to the
Holders of the Class M Certificates,  up to an amount equal to the lesser of (A)
the then-outstanding aggregate Certificate Balance of such Class of Certificates
and (B) the remaining Principal Distribution Amount for such Distribution Date;

               (xxxiii) to reimburse  the Holders of  the Class M   Certificates
up to an  amount  equal to all  Realized  Losses  and  Expense  Losses,  if any,
previously   allocated  to  such  Class  of   Certificates   and  for  which  no
reimbursement has previously been paid;

                (xxxiv)   to    pay   interest   to   the Holders of the Class N
Certificates, up to an amount equal to all Distributable Certificate Interest in
respect of such Class of Certificates for such Distribution Date;

                 (xxxv) if  the aggregate  Certificate  Balances of the Class A,
Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K,
Class L and Class M Certificates  have been reduced to zero, to pay principal to
the Holders of the Class N Certificates,  up to an amount equal to the lesser of
(A)  the  then-outstanding  aggregate  Certificate  Balance  of  such  Class  of
Certificates  and (B) the  remaining  Principal  Distribution  Amount  for  such
Distribution Date;

                (xxxvi) to reimburse the Holders of the Class N Certificates  up
to an amount equal to all Realized Losses and Expense Losses, if any, previously
allocated  to such  Class of  Certificates  and for which no  reimbursement  has
previously been paid;

               (xxxvii)  to   pay  interest   to   the   Holders of  the Class O
Certificates, up to an amount equal to all Distributable Certificate Interest in
respect of such Class of Certificates for such Distribution Date;

              (xxxviii) if the aggregate  Certificate  Balances of  the Class A,
Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K,
Class L, Class M and Class N  Certificates  have been  reduced  to zero,  to pay
principal to the Holders of the Class O  Certificates,  up to an amount equal to
the lesser of (A) the  then-outstanding  aggregate  Certificate  Balance of such
Class of Certificates and (B) the remaining  Principal  Distribution  Amount for
such Distribution Date;

                (xxxix) to reimburse  the  Holders  of the Class O  Certificates
up to an  amount  equal to all  Realized  Losses  and  Expense  Losses,  if any,
previously   allocated  to  such  Class  of   Certificates   and  for  which  no
reimbursement has previously been paid; and

                  (xl) to pay to the Holders of the Class R-III Certificates the
balance,  if any,  of the  Available  Funds in  respect  of  REMIC  III for such
Distribution Date; provided that,

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on the final  Distribution  Date in connection  with a termination  of the Trust
Fund described in Article IX hereof,  the  distributions of principal to be made
pursuant to clauses (ii), (v),  (viii),  (xi),  (xiv),  (xvii),  (xx),  (xxiii),
(xxvi), (xxix),  (xxxii),  (xxxv) and (xxxviii) of this Section 4.3(b) shall, in
each such case,  subject to the then remaining portion of the Available Funds in
respect of REMIC III for such date, be made to the Holders of the relevant Class
of  Principal  Balance  Certificates  otherwise  entitled  to  distributions  of
principal  pursuant  to such  clause  up to an  amount  equal  to the  aggregate
Certificate Balance of such Class of Certificates  outstanding immediately prior
to such Distribution Date.

     (c) Any Prepayment Premium collected with respect to a Mortgage Loan during
any  particular   Collection   Period  will  be  distributed  on  the  following
Distribution  Date as  follows:  The  holders  of the Class A, Class B, Class C,
Class D, Class E and Class F  Certificates  then  entitled to  distributions  of
principal on such  Distribution  Date will be entitled to an  aggregate  amount,
allocable among such Classes, if more than one, as described below, equal to the
lesser of (a) such Prepayment Premium and (b) such Prepayment Premium multiplied
by a fraction,  the  numerator  of which is equal to the excess,  if any, of the
Pass-Through  Rate  applicable  to the most senior of such  Classes of Principal
Balance  Certificates  then  outstanding  (or, in the case of the two Classes of
Class A Certificates,  first, the Pass-Through  Rate applicable to the Class A-1
Certificates  and second,  the  Pass-Through  Rate  applicable  to the Class A-2
Certificates)  over the relevant  Discount Rate, and the denominator of which is
equal to the excess,  if any, of the  Mortgage  Rate of the  Mortgage  Loan that
prepaid,  over the relevant  Discount Rate. If there is more than one such Class
of Principal Balance Certificates entitled to distributions of principal on such
Distribution Date, the aggregate amount described in the preceding sentence will
be  allocated  among such  Classes on a pro rata  basis in  accordance  with the
relative amounts of entitlement to such distributions of principal.

      Any portion of any Prepayment  Premium remaining after any such payment to
the holders of such Principal  Balance  Certificates  as described above will be
distributed to the holders of the Class X Certificates.

     (d) On each Distribution Date, amounts on deposit in the Excess Liquidation
Proceeds  Account deemed  distributed on the REMIC II Regular  Interests on such
date,  will in turn be used to reimburse  the holders of the  Principal  Balance
Certificates  (in order of  alphabetical  Class  designation  ) for,  and to the
extent of, unreimbursed  Realized Losses or Expense Losses previously  allocated
to them.  Distributions  will be made to the  holders of the Class A-1 and Class
A-2  Certificates  pro rata as  between  such  Classes  in  accordance  with the
respective then-outstanding aggregate Certificate Balances of such Certificates.

     (e) All of the  foregoing  distributions  to be made from the  Distribution
Account  on any  Distribution  Date  with  respect  to  the  REMIC  III  Regular
Certificates  shall be deemed made from the payments deemed made to REMIC III in
respect of the REMIC II Regular  Interests on such Distribution Date pursuant to
Section 4.2.

          Section 4.4,   Statements  to  Rating  Agencies  and
                         -------------------------------------
Certificateholders; Available Information.
-----------------------------------------

     (a) On each Distribution  Date, the Trustee shall prepare,  forward by mail
(unless the recipient  requests in writing that such delivery be made only in an
electronic   downloadable   format)  and  make  available   electronically   (in
downloadable  format) to each Rating  Agency and each  Holder of a  Certificate,
with copies to the Depositor, the Operating

                                      117
<PAGE>


Adviser,  Paying  Agent,  the  Placement  Agents,  Master  Servicer  and Special
Servicer,  a statement (the "Trustee  Report") as to such  distribution  setting
forth the information  set forth on Exhibit H hereto,  and including among other
things, for each Class, as applicable:

                (i) The Principal  Distribution Amount  and the amount allocable
to principal for such Class included in Available Funds in respect of REMIC III;

                (ii)  Distributable Certificate Interest for such Class  and the
amount of Available  Funds in respect of REMIC III allocable  thereto,  together
with any Class Interest Shortfall allocable to such Class;

                (iii) The amount of any P&I Advances by the Master Servicer, the
Trustee  or  the  Fiscal  Agent  included  in  the  amounts  distributed  to the
Certificateholders;

                (iv) The Certificate Balance of each Class of Certificates after
giving  effect to the  distribution  of  amounts  in  respect  of the  Principal
Distribution Amount on such Distribution Date;

                (v) The aggregate  amount of Realized  Losses and Expense Losses
incurred during the related Collection  Period,  the cumulative  Realized Losses
and Expense Losses  incurred  since the Startup Day and their  allocation to the
Certificate  Balance  of any  Class  of  Certificates,  together  with a list of
Additional Trust Fund Expenses itemized by category of expense;

                (vi)  The Stated  Principal Balance of the Mortgage  Loans as of
the Due Date preceding such Distribution Date;

                (vii)  The  number  and  aggregate principal balance of Mortgage
Loans (A) delinquent 30-59 days, (B) delinquent 60-89 days, (C) delinquent 90 or
more days, and (D) as to which foreclosure  proceedings have been commenced and,
with respect to each  delinquent  Mortgage  Loan,  the amount of the P&I Advance
made on such  Distribution  Date,  the  aggregate  amount of Servicing  Advances
theretofore  made  that  remain  unreimbursed  and the  aggregate  amount of P&I
Advances theretofore made that remain unreimbursed;

                (viii) With  respect   to  any  Mortgage Loan that became an REO
Mortgage Loan during the preceding calendar month, the principal balance of such
Mortgage Loan as of the date it became an REO Mortgage Loan;

                (ix) As to any REO Property sold during the  related  Collection
Period, the date on which a Final Recovery Determination was made and the amount
of the proceeds of such sale  deposited  into the  Collection  Account,  and the
aggregate  amount of REO  Proceeds and Net REO Proceeds (in each case other than
Liquidation  Proceeds) and other revenues collected by the Special Servicer with
respect to each REO Property during the related  Collection  Period and credited
to the Collection Account, in each case identifying such REO Property by name;

                 (x) The outstanding principal balance of each REO Mortgage Loan
as of the  close  of  business  on the  immediately  preceding  Due Date and the
appraised  value  of the  related  REO  Property  per the  most  recent  Updated
Appraisal obtained;

                (xi) The amount of the Master  Servicer  Fee paid to the  Master
Servicer  with  respect  to  such  Distribution  Date,  and  the  amount  of the
additional servicing  compensation described in Section 3.12(a) that was paid to
the Master Servicer with respect to such Distribution Date;

                                      118

<PAGE>


                (xii)  The  amount   of  any   Standby   Special  Servicer  Fee,
Special  Servicer  Fee,  Disposition  Fee or  Workout  Fee  paid to the  Special
Servicer  with  respect  to  such  Distribution  Date,  and  the  amount  of the
additional servicing  compensation described in Section 3.12(b) that was paid to
the Special Servicer with respect to such Distribution Date;

                (xiii)  The  amount  of  (A)   Prepayment  Premiums  distributed
to each Class of Certificates, (B) Deferred Interest received during the related
Collection   Period  and  (C)  Default  Interest  received  during  the  related
Collection Period;

                (xiv) The  Pass-Through  Rate  applicable  to  each Class of the
REMIC III Regular Certificates for such Distribution Date;

                (xv)  The amount of any  Appraisal  Reductions  effected  during
the related Collection Period on a Mortgage  Loan-by-Mortgage Loan basis and the
total Appraisal Reductions as of such Distribution Date;

                (xvi) Any additional  information  regarding the Mortgage Loans,
which the Master  Servicer  or the  Special  Servicer,  in its sole  discretion,
delivers to the Trustee for distribution to the Certificateholders;

                (xvii)  Both current and cumulative prepayments;

               (xviii)  Ratings   from  all   Rating Agencies for all applicable
Classes of Certificates;

                (xix) Any Mortgage Loan as to which bankruptcy  proceedings have
been  commenced  against the related  Borrower,  but only to the extent that the
Trustee has knowledge thereof; and

                (xx)  Any draws  on  letters of credit or debt service reserves,
and the remaining balance thereof.

      With  respect  to any  information  in a Trustee  Report  pertaining  to a
specific  Mortgage  Loan,  such Mortgage Loan shall be identified by the related
Loan Number and property name, if any, set forth on the Mortgage Loan Schedule.

      The  Trustee  shall  also  make  available  in  electronic  format  to the
Depositor,  the Master Servicer,  the Special Servicer,  each Rating Agency, the
Operating  Adviser  and,  upon  request,   any  holder  of  a  Privately  Placed
Certificate,  the CMSA IRP Loan Set-up File,  Loan  Periodic  Update File,  Bond
Level  File,  Collateral  Summary  File  and any  other  items  included  in the
definition  of CMSA IRP if such other  items have been  received  in  electronic
format from the Master Servicer or Special Servicer.

      In the case of  information  furnished  pursuant to subclauses  (i), (ii),
(iv) and (xiii)(A)  above,  the amounts shall be expressed as a dollar amount in
the aggregate for all  Certificates of each applicable  Class and for each Class
of  Certificates  for a denomination  of $1,000 initial  Certificate  Balance or
Notional Amount.

      Within a reasonable  period of time after the end of each  calendar  year,
the Trustee  shall  furnish to each  Person who at any time during the  calendar
year was a Holder of a Certificate  (including  holders of the Class R-I,  Class
R-II  or  Class  R-III  Certificates)  and to each  Rating  Agency  a  statement
containing  the  information  set forth in  subclauses  (i),  (ii) and (xiii)(A)
above,  aggregated for such calendar year or applicable  portion  thereof during
which such Person was a Certificateholder.  Such obligation of the Trustee shall
be deemed to have been satisfied to

                                      119
<PAGE>


the extent that it provided substantially comparable information pursuant to any
requirements of the Code as from time to time in force.

      In  addition  to the reports  required  to be  delivered  pursuant to this
Section  4.4(a),  the Trustee shall make  available upon request to each Holder,
Certificate Owner and proposed  transferee of a Privately Placed  Certificate or
interest therein such additional  information,  if any, required to be delivered
under  Rule  144A(d)(4)  and in its  possession  so as to  permit  the  proposed
transfer to be effected pursuant to Rule 144A.

      For  investors  that have  obtained  an  account  number on the  Trustee's
Automatic  Statements Accessed by Phone ("ASAP") System, the foregoing report or
a summary  report of bond factors may be obtained from the Trustee via automated
facsimile by placing a telephone  call to (714) 282-5518 and following the voice
prompts to request  "statement  number 504." Account  numbers on the ASAP System
may be obtained by calling the same  telephone  number and  following  the voice
prompts for obtaining account numbers.  Separately,  bond factor information may
be  obtained  from the  Trustee by calling  800-246-5761.  In  addition,  if the
Depositor so directs the Trustee,  and on terms  acceptable to the Trustee,  the
Trustee will make available  through its electronic  bulletin board system, on a
confidential  basis,  certain  information  related to the Mortgage  Loans.  The
bulletin board is located at (714)  282-3990.  Investors that have an account on
the bulletin board may retrieve the loan level data file for each transaction in
the  directory.  An account  number may be obtained by typing "new" upon logging
into the bulletin  board.  A directory has been set up on the bulletin  board in
which an electronic file is stored  containing  monthly servicer data. All files
are  compressed  before  being  put into the  directory.  Additionally,  certain
information  regarding the Mortgage  Loans will be made available at the website
maintained by the Trustee at www.lnbabs.com.

     (b) On or within two Business Days  following each  Distribution  Date, the
Trustee shall prepare and furnish to the Placement Agents,  using the format and
media  mutually  agreed  upon by the  Trustee  and  the  Placement  Agents,  the
following  information  regarding  each Mortgage Loan and any other  information
reasonably requested by the Placement Agents and available to the Trustee:

                (i)   the Loan Number and the related property name, if any, set
forth in the Mortgage Loan Schedule;

               (ii)  the Mortgage Rate; and

              (iii)  the principal balance as of such Distribution Date.

     (c) The Trustee shall only be obligated to deliver the statements,  reports
and  information  contemplated  by  Section  4.4(a)  and 4.4(b) to the extent it
receives the necessary  underlying  information  from the Master  Servicer,  the
Special Servicer and the Rating Agencies, as applicable, and shall not be liable
for any  failure to deliver  any  thereof on the  prescribed  due dates,  to the
extent such failure is caused by the Master Servicer's or the Special Servicer's
failure  to deliver  such  underlying  information  in a timely  manner.  Absent
manifest error,  the Trustee (i) may  conclusively  rely on any such information
forwarded  to it by the Master  Servicer,  the Special  Servicer  and the Rating
Agencies,  (ii)  shall  have no  obligation  to verify  the same and (iii)  with
respect  to the  information  provided  by Section  4.4(a)(xviii),  shall not be
liable for the accuracy of, and may include a disclaimer with, such information.
Nothing  herein shall obligate the Trustee,  the Master  Servicer or the Special
Servicer to violate (in the  reasonable  judgment  of the Master  Servicer,  the
Special Servicer or the Trustee, as appropriate)

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<PAGE>


any  applicable  law or  provision  of any Mortgage  Loan  document  prohibiting
disclosure  of  information  with respect to any Borrower and the failure of the
Trustee, the Master Servicer or the Special Servicer to disseminate  information
for such reason shall not be a breach hereof.

          Section 4.5.   Remittances; P&I Advances.
                         -------------------------

     (a) For purposes of this Section 4.5,  "Applicable  Monthly  Payment" shall
mean, for any Mortgage Loan with respect to any month, (A) if such Mortgage Loan
is delinquent as to its Balloon Payment or constitutes an REO Mortgage Loan, the
related  Assumed  Monthly Payment and (B) if such Mortgage Loan is not described
by the preceding clause, the Monthly Payment.

     (b) On the Remittance Date immediately  preceding each  Distribution  Date,
the Master Servicer shall:

                (i) remit to the  Trustee from the  Collection  Account  (A) for
deposit in the Distribution  Account an amount equal to the Prepayment  Premiums
and (B) for deposit in the Excess  Liquidation  Proceeds Account an amount equal
to the  Excess  Liquidation  Proceeds,  to the  extent  received  by the  Master
Servicer in the Collection Period preceding such Remittance Date;

                (ii)  remit  to the  Trustee  from  the  Collection  Account for
deposit  in the  Distribution  Account an amount  equal to the  Master  Servicer
Remittance  Amount for such  Distribution Date (excluding P&I Advances which are
remitted  pursuant to Section  4.5(b)(iii) and  Compensating  Interest  Payments
which are remitted pursuant to Section 3.25);

                (iii) subject to Section  4.5(c),  make an advance (each, a "P&I
Advance"),  by deposit into the Collection Account, and remit such amount to the
Distribution  Account,  in an amount equal to the Applicable Monthly Payment for
each Mortgage Loan (net of the Master  Servicer  Fee), to the extent such amount
was not  received  on such  Mortgage  Loan as of the  close of  business  on the
related  Determination Date;  provided,  however,  that, in the event the Master
Servicer shall fail to remit a P&I Advance  required to be made hereunder on the
Remittance  Date, the Master  Servicer shall pay to the Trustee  interest at the
Advance Rate on the amount of such P&I Advance from and including the Remittance
Date to but not including the day such remittance is actually made; and

                (iv) remit to  the  Trustee  from  the  Grantor Trust Collection
Account for deposit in the Grantor Trust Distribution Account an amount equal to
the Deferred  Interest  received by the Master Servicer in the Collection Period
preceding such Remittance Date.

     (c)  Notwithstanding   Section  4.5(b)(iii),   upon  determination  of  the
Appraisal  Reduction with respect to any Required  Appraisal Loan, the amount of
any  delinquent  interest  required to be advanced with respect to such Required
Appraisal  Loan shall be an amount equal to the product of (A) the amount of the
delinquent  interest  that would be  required  to be advanced in respect of such
Mortgage Loan without regard to the application of this sentence,  multiplied by
(B) a fraction,  the numerator of which is equal to the Stated Principal Balance
of such Mortgage Loan as of the immediately  preceding  Determination  Date less
the Appraisal  Reduction and the  denominator of which is such Stated  Principal
Balance.

     (d) If, as of 3:00 p.m.,  New York City time,  on any  Remittance  Date the
Master  Servicer  shall not (i) have made the P&I Advance  required to have been
made on such  date  pursuant  to  Section  4.5(b)(iii)  or  (ii)  delivered  the
certificate and documentation related to a

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<PAGE>


determination of  nonrecoverability,  the Trustee shall  immediately  notify the
Fiscal Agent by telephone promptly  confirmed in writing,  and the Trustee shall
no later than 10:00 a.m., New York City time, on such  Distribution Date deposit
into the Distribution Account in immediately  available funds an amount equal to
the P&I Advances otherwise required to have been made by the Master Servicer. If
the Trustee fails to make any P&I Advance required to be made under this Section
4.5, the Fiscal Agent shall make such P&I Advance not later than 12:00 p.m., New
York City time, on such Distribution Date and, thereby, the Trustee shall not be
in default under this Agreement.

     (e) Anything to the contrary in this Agreement notwithstanding, none of the
Master  Servicer,  the Trustee or the Fiscal  Agent shall be obligated to make a
P&I Advance on any date on which a P&I Advance is otherwise  required to be made
by this Section 4.5 if the Master Servicer,  the Trustee or the Fiscal Agent, as
applicable,  determines that such Advance will be a Nonrecoverable  Advance. The
Trustee and the Fiscal  Agent shall be  entitled to rely,  conclusively,  on any
determination  by the Master  Servicer that a P&I Advance,  if made,  would be a
Nonrecoverable Advance. The Trustee and the Fiscal Agent, in determining whether
or not a P&I Advance  previously  made is, or a proposed P&I  Advance,  if made,
would be, a Nonrecoverable  Advance shall make such  determination in their good
faith judgment.

     (f) The Master  Servicer,  the Trustee or the Fiscal Agent,  as applicable,
shall be entitled to, and the Master  Servicer  hereby  covenants  and agrees to
promptly seek and effect,  the  reimbursement of P&I Advances made to the extent
permitted  pursuant to Section  3.6(a)(ii) of this  Agreement  together with any
related  Advance  Interest  Amount in respect of such P&I Advances to the extent
permitted pursuant to Section 3.6(a)(iii).

          Section 4.6.   Allocation of Realized Losses and Expense Losses.
                         ------------------------------------------------

     (a) On each  Distribution  Date,  following the deemed  distributions to be
made in respect of the REMIC I Regular  Interests  pursuant to Section  4.1, the
Uncertificated  Principal Balance of each REMIC I Regular Interest (after taking
account  of such  deemed  distributions)  shall be  reduced  to equal the Stated
Principal Balance of the related Mortgage Loan (including  without limitation an
REO Mortgage Loan or, if applicable,  a Qualified Substitute Mortgage Loan) that
will  be  outstanding   immediately   following  such  Distribution  Date.  Such
reductions  shall be deemed to be an allocation  of Realized  Losses and Expense
Losses.

     (b) On each Distribution Date,  Realized Losses and Expense Losses that are
applied to each Class of REMIC III Regular  Certificates  shall be  allocated to
reduce the  Uncertificated  Principal  Balance of the  Related  REMIC II Regular
Interest.

     (c) On each  Distribution  Date,  following the distributions to be made to
the  Certificateholders  on such date pursuant to Section 4.3, the Trustee shall
determine  the  amount,  if any,  by which  (i) the  then-aggregate  Certificate
Balance of the Principal Balance Certificates, exceeds (ii) the aggregate Stated
Principal  Balance of the  Mortgage  Pool that will be  outstanding  immediately
following such Distribution Date. If such excess does exist, then the respective
aggregate  Certificate Balances of the Class O, Class N, Class M, Class L, Class
K,  Class J,  Class H,  Class G,  Class F, Class E, Class D, Class C and Class B
Certificates shall be reduced  sequentially,  in that order, in each case, until
the first to occur of such excess being reduced to zero or the related aggregate
Certificate Balance of such Class being reduced to zero. If, after the foregoing
reductions,  the amount described in clause (i) of the second preceding sentence
still  exceeds  the amount  described  in clause  (ii) of the  second  preceding
sentence,  then the respective  aggregate  Certificate Balances of the Class A-1
and Class A-2 Certificates shall be

                                      122
<PAGE>


reduced,  pro rata in accordance with the relative sizes of the then-outstanding
aggregate Certificate Balances of such Classes of Certificates,  until the first
to occur of such excess being reduced to zero or each such aggregate Certificate
Balance being  reduced to zero.  Such  reductions  in the aggregate  Certificate
Balances of the respective  Classes of Principal Balance  Certificates  shall be
deemed to be  allocations  of  Realized  Losses  and  Expense  Losses  among the
Certificates  of each such Class in  proportion to their  respective  Percentage
Interests in such Class.

          Section 4.7.   Distributions on the Grantor Trust.
                         ----------------------------------

      On each  Distribution  Date,  the Trustee shall withdraw the amount of any
Deferred  Interest  received in the related  Collection  Period from the Grantor
Trust Distribution Account and shall distribute such funds to the holders of the
Class V Certificates.

          Section 4.8.   Distributions in General.
                         ------------------------

     (a) All amounts  distributable to a Class of Certificates  pursuant to this
Article  IV on each  Distribution  Date  shall be  allocated  pro rata among the
outstanding Certificates in each such Class based on their respective Percentage
Interests.  Such  distributions  shall be made on each  Distribution Date (other
than the final  distribution on any  Certificate) to each  Certificateholder  of
record on the  related  Record  Date by check  mailed by first class mail to the
address set forth therefor in the  Certificate  Register or,  provided that such
Certificateholder shall have provided the Paying Agent with wire instructions in
writing on or before the  related  Record  Date (or upon  standing  instructions
given to the Trustee or the Paying Agent on the Closing Date or on or before any
Record  Date,  which  instructions  may be revoked at any time  thereafter  upon
written  notice to the  Trustee  or the Paying  Agent on or before  the  related
Record Date), by wire transfer of immediately  available funds to the account of
such  Certificateholder  at a bank or other entity  located in the United States
and having  appropriate  facilities  therefor.  The final  distribution  on each
Certificate  (determined without regard to any possible future  reimbursement of
any Realized Losses or Expense Losses previously  allocated to such Certificate)
shall be made in like manner,  but only upon  presentment  and surrender of such
Certificate at the Corporate Trust Office of the Trustee or its agent (which may
be the Paying Agent or the Certificate  Registrar  acting as such agent) that is
specified in the notice to  Certificateholders  of such final distribution.  Any
distribution  that is to be made with respect to a Certificate in  reimbursement
of  a  Realized  Loss  or  Expense  Loss  previously  allocated  thereto,  which
reimbursement  is  to  occur  after  the  date  on  which  such  Certificate  is
surrendered as  contemplated  by the preceding  sentence,  will be made by check
mailed to the  Certificateholder  that  surrendered  such Certificate or by wire
transfer if such  Certificateholder  has provided the Trustee with wire transfer
instructions.

     (b) Except as  otherwise  provided in Section 9.1,  the Trustee  shall,  no
later  than the 15th day of the month in the month  preceding  the  Distribution
Date on which the final  distribution  with respect to any Class of Certificates
is expected to be made or such later day as the Trustee  becomes  aware that the
final  distribution  with respect to any Class of Certificates is expected to be
made on the succeeding  Distribution  Date, mail to each Holder of such Class of
Certificates  and to the  Rating  Agencies,  on such day a notice to the  effect
that:

                (i) the  Trustee  reasonably  expects,  based  upon  information
previously  provided to it,  that the final  distribution  with  respect to such
Class of Certificates will be made
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<PAGE>


on such  Distribution  Date,  but only upon  presentation  and surrender of such
Certificates at the office of the Trustee therein specified; and

                (ii) if   such  final  distribution is made on such Distribution
Date,  no  interest  shall  accrue  on such  Certificates  from and  after  such
Distribution Date;

provided,  however,  that the Class R-I, Class R-II and Class R-III Certificates
shall remain outstanding until there is no other Class of Certificates,  REMIC I
Regular Interests or REMIC II Regular Interests outstanding.

Any funds not distributed to any Holder or Holders of Certificates of such Class
on such  Distribution  Date  because of the failure of such Holder or Holders to
tender their  Certificates  shall, on such  Distribution  Date, be set aside and
held in  trust  for the  benefit  of the  appropriate  non-tendering  Holder  or
Holders.  If any Certificates as to which notice has been given pursuant to this
Section  4.8(b)  shall not have been  surrendered  for  cancellation  within six
months after the time specified in such notice,  the Trustee shall mail a second
notice  to  the  remaining  non-tendering  Certificateholders,   at  their  last
addresses shown in the Certificate Register, to surrender their Certificates for
cancellation  in order to receive  from such  funds held the final  distribution
with respect thereto.  If, within one year after the second notice,  any of such
Certificates shall not have been surrendered for cancellation,  the Trustee may,
directly or through an agent,  take  appropriate  steps to contact the remaining
non-tendering Certificateholders concerning surrender of their Certificates. The
costs and expenses of  maintaining  such funds in trust and of  contacting  such
Certificateholders  shall be paid out of such funds.  If, within two years after
the second notice,  any such  Certificates  shall not have been  surrendered for
cancellation,  the Paying Agent shall pay to the Class R-III  Certificateholders
all amounts otherwise  distributable to such non-tendering  Holders. No interest
shall accrue or be payable to any  Certificateholder on any amount held in trust
hereunder or by the Trustee as a result of such  Certificateholder's  failure to
surrender its  Certificate(s)  for final payment thereof in accordance with this
Section 4.8(b).  Any such amounts  transferred to the Trustee may be invested in
Permitted  Investments  and all income and gain realized from investment of such
funds  shall be for the  benefit  of the  Trustee.  In the event the  Trustee is
permitted or required to invest any amounts in Permitted  Investments under this
Agreement,  whether in its capacity as Trustee or in the event of its assumption
of the  duties  of, or  becoming  the  successor  to,  the  Master  Servicer  in
accordance with the terms of this Agreement, it shall invest such amounts in the
following Permitted  Investments and priority,  in each case only for so long as
any such investment shall continue to be a Permitted  Investment:  (1) Permitted
Investments under clause (v) of the definition of Permitted Investments, and (2)
if (1) above is not  available,  Permitted  Investments  under clause (i) of the
definition  of  Permitted  Investments.  The  Trustee  shall  deposit  into  the
applicable  account  funds in the amount of any loss  incurred in respect of any
such Permitted Investment immediately upon realization of such loss.

          Section 4.9.   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.  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  that is a non-U.S.
Person that has furnished or caused to be furnished (i) an effective Form W-8 or
Form W-9 or an acceptable substitute form

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or a successor form and who has informed the Trustee in writing that it 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 Fund or the Depositor, or (ii) an effective Form 4224 or an
acceptable substitute form or a successor form. In the event the Paying Agent or
its 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.  Any  amount so  withheld  shall be  treated  as having  been
distributed to such Certificateholder for all purposes of this Agreement.

                                   ARTICLE V.
                                   ----------

                                THE CERTIFICATES

          Section 5.1.      The Certificates.
                            ----------------

      The  Certificates  consist  of the Class A-1  Certificates,  the Class A-2
Certificates,  the Class X Certificates,  the Class B Certificates,  the Class C
Certificates,  the Class D Certificates,  the Class E Certificates,  the Class F
Certificates,  the Class G Certificates,  the Class H Certificates,  the Class J
Certificates,  the Class K Certificates,  the Class L Certificates,  the Class M
Certificates,  the Class N Certificates,  the Class O Certificates,  the Class V
Certificates,  the Class R-I  Certificates,  the Class R-II Certificates and the
Class R-III Certificates.

      The Class  A-1,  Class  A-2,  Class X, Class B, Class C, Class D, Class E,
Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class O,
Class  V,  Class  R-I,  Class  R-II  and  Class  R-III   Certificates   will  be
substantially  in the forms annexed  hereto as Exhibits A-1, A-2, A-3, A-4, A-5,
A-6, A-7, A-8, A-9, A-10,  A-11,  A-12, A-13, A-14, A-15, A-16, A-17, A-18, A-19
and A-20,  respectively.  The  Certificates  of each Class will be  issuable  in
definitive  physical form only,  registered in the name of the holders  thereof;
provided,  however,  that in accordance  with Section 5.3  beneficial  ownership
interests in the REMIC III Regular  Certificates  shall initially be represented
by  Book-Entry   Certificates  held  and  transferred   through  the  book-entry
facilities of the Securities  Depository.  The Class A Certificates  shall be in
minimum  denominations  of $25,000 and  multiples of $1 in excess  thereof.  The
Class  B,  Class  C,  Class  D and  Class E  Certificates  shall  be in  minimum
denominations  of $50,000 and  multiples of $1 in excess  thereof.  The Class F,
Class G,  Class H,  Class J,  Class K,  Class L,  Class M,  Class N and  Class O
Certificates  shall be in minimum  denominations of $100,000 and multiples of $1
in excess thereof. The Class X Certificates shall be in minimum denominations of
$1,000,000 and multiples of $1 in excess thereof.  The Class V, Class R-I, Class
R-II and  Class  R-III  Certificates  shall be in  minimum  denominations  of 5%
Percentage  Interests and integral multiples of 1% Percentage Interest in excess
thereof and together  aggregating  the entire 100%  Percentage  Interest in each
such Class.

      Any of  the  Certificates  may  be  issued  with  appropriate  insertions,
omissions,  substitutions  and  variations,  and may have imprinted or otherwise
reproduced thereon such legend or legends,  not inconsistent with the provisions
of this  Agreement,  as may be  required to comply with any law or with rules or
regulations  pursuant  thereto,  or with the rules of any  securities  market in
which the Certificates are admitted to trading, or to conform to general usage.


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      Each  Certificate  may be printed or in  typewritten  or similar form, and
each  Certificate  shall,  upon original  issue,  be executed by the Trustee and
authenticated  by the Trustee or the  Authenticating  Agent and delivered to (or
upon the order of) the Depositor.  All Certificates  shall be executed by manual
or  facsimile  signature  on behalf of the Trustee by an  authorized  officer or
signatory.  Certificates  bearing the signature of an individual  who was at any
time the proper  officer or  signatory  of the Trustee  shall bind the  Trustee,
notwithstanding  that such individual has ceased to hold such office or position
prior to the  delivery  of such  Certificates  or did not hold  such  office  or
position at the date of such  Certificates.  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  in the form set
forth in Exhibits A-1 through A-20 executed by the Trustee or the Authenticating
Agent by manual  signature,  and such  certificate  of  authentication  upon any
Certificate  shall be  conclusive  evidence,  and the only  evidence,  that such
Certificate  has  been  duly   authenticated   and  delivered   hereunder.   All
Certificates shall be dated the date of their authentication.

          Section 5.2.      Registration, Transfer and Exchange of Certificates.
                            ---------------------------------------------------

     (a) At all  times  during  the  term  of this  Agreement,  there  shall  be
maintained at the office of the Certificate  Registrar a Certificate Register in
which, subject to such reasonable  regulations as the Certificate  Registrar may
prescribe,  the  Certificate  Registrar  shall provide for the  registration  of
Certificates  and of transfers and exchanges of Certificates as herein provided.
The  Trustee  is  hereby  initially  appointed  (and  hereby  agrees  to  act in
accordance  with the terms hereof) as  Certificate  Registrar for the purpose of
registering  Certificates  and transfers and exchanges of Certificates as herein
provided.  The Trustee may  appoint,  by a written  instrument  delivered to the
other  parties  hereto,  any other bank or trust  company to act as  Certificate
Registrar under such conditions as the Trustee may prescribe,  provided that the
Trustee shall not be relieved of any of its duties or responsibilities hereunder
as Certificate  Registrar by reason of such appointment.  If the Trustee resigns
or is removed in accordance with the terms hereof,  the successor  trustee shall
immediately succeed to its predecessor's  duties as Certificate  Registrar.  The
Depositor,  the Master  Servicer,  the Special  Servicer and any agent of any of
them shall have the right to inspect  the  Certificate  Register  or to obtain a
copy  thereof  at  all  reasonable  times,  and  to  rely  conclusively  upon  a
certificate of the Certificate  Registrar as to the information set forth in the
Certificate Register.  The names and addresses of all Certificateholders and the
names and addresses of the transferees of any  Certificates  shall be registered
in the  Certificate  Register.  A  Definitive  Certificate  is  transferable  or
exchangeable  only upon the  surrender of such  Certificate  to the  Certificate
Registrar at the Corporate Trust Office together with an assignment and transfer
(executed  by the  Holder  or his  duly  authorized  attorney),  subject  to the
requirements  of this Section 5.2. Upon request of the Trustee,  the Certificate
Registrar  shall provide the Trustee with the names,  addresses  and  Percentage
Interests of the Holders.

     (b)  Upon  surrender  for   registration  of  transfer  of  any  Definitive
Certificate,  subject to the requirements of this Section 5.2, the Trustee shall
execute and the Trustee or the  Authenticating  Agent shall duly authenticate in
the  name  of  the  designated  transferee  or  transferees,  one  or  more  new
Certificates  in  authorized  denominations  of  a  like  aggregate  Certificate
Balance,  Notional Amount or Percentage  Interest.  Such  Certificates  shall be
delivered by the Certificate Registrar in accordance with this Section 5.2. Each
Certificate  surrendered  for  registration  of transfer  or  exchange  shall be
cancelled and the Certificate

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Registrar  shall dispose of the cancelled  Certificates  in accordance  with its
standard  procedures.  Each new Certificate  issued pursuant to this Section 5.2
shall be  registered  in the name of any Person as the  transferring  Holder may
request, subject to the provisions of this Section 5.2.

     (c) The  exchange,  transfer  and  registration  of transfer of  Definitive
Certificates  that are  Privately  Placed  Certificates  shall be subject to the
restrictions  set forth  below (in  addition  to the  other  provisions  of this
Section 5.2):

                (i) The Certificate Registrar shall register  the  transfer of a
Definitive  Certificate that is a Privately Placed  Certificate if the requested
transfer  is  being  made to a  transferee  who  has  provided  the  Certificate
Registrar with an Investment  Representation Letter substantially in the form of
Exhibit D-1 hereto (an "Investment  Representation  Letter"), to the effect that
the transfer is being made to a Qualified Institutional Buyer in accordance with
Rule 144A (and in the case of the Residual Certificates,  a Transferee Affidavit
as required by Section 5.2(j)(ii)); or

                (ii) The Certificate Registrar shall  register  the  transfer of
a Definitive  Certificate that is a Privately Placed Certificate (other than the
Class V Certificates and the Residual  Certificates),  if prior to the transfer,
the  transferee  furnishes  to  the  Certificate  Registrar  (1)  an  Investment
Representation  Letter  to the  effect  that the  transfer  is being  made to an
Institutional  Accredited  Investor in accordance  with an applicable  exemption
under the 1933 Act,  (2) an  Opinion of Counsel  acceptable  to the  Certificate
Registrar  that such  transfer  is in  compliance  with the 1933 Act,  and (3) a
written  undertaking by the transferor to reimburse the Trust Fund for any costs
incurred by it in connection with the proposed transfer.

     (d) Subject to the  restrictions on transfer and exchange set forth in this
Section 5.2, the Holder of one or more Certificates may transfer or exchange the
same in  whole  or in part  (with a  Certificate  Balance,  Notional  Amount  or
Percentage  Interest equal to any authorized  denomination) by surrendering such
Certificate at the Corporate Trust Office or at the office of any transfer agent
appointed as provided  under this  Agreement,  together  with an  instrument  of
assignment  and  transfer  (executed  by  the  Holder  or  its  duly  authorized
attorney),  in the case of transfer,  and a written  request for exchange in the
case of  exchange.  Subject to the  restrictions  on transfer  set forth in this
Section  5.2,  following  a  proper  request  for  transfer  or  exchange,   the
Certificate Registrar shall, within a reasonable time period after such request,
execute  and  deliver  at the  Corporate  Trust  Office or at the office of such
transfer  agent, as the case may be, to the transferee (in the case of transfer)
or the Holder (in the case of exchange) or send by first class mail (at the risk
of the transferee in the case of transfer or the Holder in the case of exchange)
to such address as the transferee or the Holder, as applicable,  may request,  a
Definitive  Certificate  or  Certificates,  as the case may require,  for a like
aggregate  Certificate  Balance,  Notional Amount or Percentage  Interest and in
such  authorized  denomination  or  denominations  as  may  be  requested.   The
presentation for transfer or exchange of any Definitive Certificate shall not be
valid unless made at the  Corporate  Trust Office or at the office of a transfer
agent  by  the   registered   Holder  in  person,   or  by  a  duly   authorized
attorney-in-fact.  The  Certificate  Registrar may decline to accept any request
for an exchange or registration of transfer of any Certificate during the period
of 15 days preceding any Distribution Date.

     (e) Any  Certificates  that are Privately  Placed  Certificates may only be
transferred  to  Eligible  Investors  as  described  herein.  In the  event  the
Certificate  Registrar  shall  determine  that  a  Definitive  Certificate,   or
beneficial  interest in a  Book-Entry  Certificate,  that is a Privately  Placed
Certificate  (other than the Residual  Certificates) is being held by or for the
benefit of a Person who is not an  Eligible  Investor,  or that such  holding is
unlawful under the

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<PAGE>


laws of a relevant jurisdiction,  then the Certificate Registrar shall void such
transfer or, if such action is not permitted under applicable law,  require,  to
the extent permitted by applicable law, the  non-Eligible  Investor to sell such
Definitive  Certificate or beneficial interest in such Book-Entry Certificate to
an Eligible Investor within 14 days after notice of such  determination and each
Certificate Owner by its acceptance of a Certificate  authorizes the Certificate
Registrar to take such action and agrees to reimburse  the Trustee for any costs
and expenses  incurred by the Trustee in enforcing this provision.  In the event
that the  Trustee  is  unable  to  recover  its  costs  and  expenses  from such
Certificate  Owner,  the Trustee may be  reimbursed  for such  expenses from the
Trust Fund.  At the  request of the  Trustee,  the  Depositor  shall  assist the
Trustee in requiring any such sale. The Certificate  Registrar shall be under no
duty to investigate to determine if such transferee is an Eligible Investor.

     (f) No fee or service charge shall be imposed by the Certificate  Registrar
for its services in respect of any registration of transfer or exchange referred
to in this Section 5.2 other than for transfers of Privately Placed Certificates
to Institutional  Accredited  Investors,  as provided herein. In connection with
any transfer of Privately  Placed  Certificates to an  Institutional  Accredited
Investor, the transferor shall reimburse the Trust Fund for any costs (including
the cost of the Certificate  Registrar's  counsel's  review of the documents and
any legal opinions  submitted by the transferor or transferee to the Certificate
Registrar  as  provided  herein)  incurred  by  the  Certificate   Registrar  in
connection with such transfer.  The Certificate Registrar may require payment by
each  transferor  of a sum  sufficient  to  cover  any  tax,  expense  or  other
governmental charge payable in connection with any such transfer.

     (g) Subject to the other  provisions of this Section 5.2,  transfers of the
Class  R-I,  Class  R-II  and  Class  R-III  Certificates  may be  made  only in
accordance with Section  5.2(c)(i),  this Section 5.2(g) and Section 5.2(j). The
Certificate  Registrar shall register the transfer of a Class R-I, Class R-II or
Class R-III  Certificate  if (i) the  transferor  has  advised  the  Certificate
Registrar in writing that the  Certificate is being  transferred to a buyer that
the transferor reasonably believes is a Qualified  Institutional Buyer; and (ii)
prior to transfer  the  transferor  furnishes  to the  Certificate  Registrar an
Investment Representation Letter.

     (h) Neither the Depositor,  the Master Servicer,  the Special Servicer, the
Trustee nor the  Certificate  Registrar  is obligated to register or qualify any
Class  of  Privately  Placed  Certificates  under  the  1933  Act or  any  other
securities law or to take any action not otherwise required under this Agreement
to  permit  the  transfer  of  such   Certificates   without   registration   or
qualification. Any Certificateholder desiring to effect such transfer shall, and
does hereby agree to, indemnify the Depositor,  the Master Servicer, the Special
Servicer, the Trustee, the Fiscal Agent and the Certificate  Registrar,  against
any loss,  liability  or expense  that may result if the  transfer is not exempt
from the registration  requirements of the 1933 Act or is not made in accordance
with such federal and state laws or is not made in accordance  with this Section
5.2.

     (i) No transfer of any  Ownership  Interest  in a  Subordinate  Certificate
shall  be  made  to  (i) an  employee  benefit  plan  subject  to the  fiduciary
responsibility  provisions  of  ERISA,  or  Section  4975  of  the  Code,  or  a
governmental  plan or church  plan  subject to any  federal,  state or local law
("Similar  Law"),  which  is to a  material  extent,  similar  to the  foregoing
provisions  of ERISA or the Code  (collectively,  a "Plan"),  (ii) a  collective
investment fund in which assets of such Plans are invested or (iii) an insurance
company that is using the assets of any insurance  company  separate  account or
general  account in which the assets of any such Plan are invested (or which are
deemed pursuant to ERISA or any Similar Law to include assets of Plans) to

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acquire any such  Subordinate  Certificates,  if such transfer or the subsequent
holding of the applicable Certificate would constitute or result in a prohibited
transaction  within the meaning of Section 406 or 407 of ERISA,  Section 4975 of
the Code,  or any Similar  Law.  Each  prospective  transferee  of a  Definitive
Certificate that is a Subordinate  Certificate  shall deliver to the transferor,
the  Depositor,  the  Certificate  Registrar and the Trustee,  (A) a transfer or
representation letter,  substantially in the form of Exhibit D-2 hereto, stating
that the  prospective  transferee  is not a Person  referred to in (i),  (ii) or
(iii) above, or (B) an Opinion of Counsel which  establishes to the satisfaction
of the transferor, the Depositor, the Trustee and the Certificate Registrar that
the purchase or holding of the  Subordinate  Certificate  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  Master
Servicer,  the Special Servicer,  the Depositor,  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  Trustee,  the  Fiscal  Agent,  the Trust  Fund,  the Master
Servicer, the Special Servicer,  Certificate Registrar or the Depositor. None of
the Depositor,  the Trustee, the Fiscal Agent, the Master Servicer,  the Special
Servicer, and the Certificate Registrar will register a Class R-I, Class R-II or
Class R-III Certificate in any Person's name unless such Person has provided the
letter referred to in clause (A) above or the Opinion of Counsel  referred to in
clause (B) above. Each Transferee of an interest in any Subordinated Certificate
that is a  Book-Entry  Certificate  shall  be  deemed  to have  represented  and
warranted that it is not a Person  referred to in (i), (ii) or (iii) above.  Any
transfer  of a  Subordinate  Certificate  that  would  violate,  or  result in a
prohibited  transaction under, ERISA or Section 4975 of the Code shall be deemed
absolutely null and void ab initio.

     (j) Each Person who has or acquires any Ownership  Interest in a Class R-I,
Class R-II or a Class R-III  Certificate  shall be deemed by the  acceptance  or
acquisition  of such  Ownership  Interest  to have  agreed  to be  bound  by the
following  provisions,  and to have  irrevocably  authorized  the Trustee  under
clause (iii) below to deliver payments to a Person other than such Person and to
have  irrevocably  authorized  the Trustee under clause (iii) below to negotiate
the  terms of any  mandatory  disposition  and to  execute  all  instruments  of
Transfer  and to do all  other  things  necessary  in  connection  with any such
disposition.  The rights of each Person  acquiring any  Ownership  Interest in a
Class R-I Certificate,  Class R-II Certificate or a Class R-III  Certificate are
expressly subject to the following provisions:

                (i) Each Person acquiring or holding any Ownership Interest in a
Class R-I Certificate,  Class R-II Certificate or Class R-III  Certificate shall
be a Permitted  Transferee and shall not acquire or hold such Ownership Interest
as agent  (including as a broker,  nominee or other  middleman) on behalf of any
Person that is not a Permitted Transferee. Any such Person shall promptly notify
the  Certificate  Registrar of any change or impending  change in its status (or
the status of the beneficial  owner of such  Ownership  Interest) as a Permitted
Transferee.  Any  acquisition  described  in the first  sentence of this Section
5.2(j)(i)  by a Person who is not a Permitted  Transferee  or by a Person who is
acting as an agent of a Person who is not a Permitted  Transferee  shall be void
and of no  effect,  and the  immediately  preceding  owner  who was a  Permitted
Transferee  shall be restored to  registered  and  beneficial  ownership  of the
Ownership Interest as fully as possible.

                (ii)  No  Ownership  Interest  in a Class R-I,  Class R-II  or a
Class  R-III  Certificate  may be  transferred,  and no such  Transfer  shall be
registered in the Certificate  Register,  without the consent of the Certificate
Registrar,  and  the  Certificate  Registrar  shall  not  recognize  a  proposed
Transfer, and such proposed Transfer shall not be effective, without such

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consent with respect  thereto.  In connection with any proposed  Transfer of any
Ownership Interest in a Class R-I, Class R-II or a Class R-III Certificate,  the
Certificate  Registrar  shall,  as a  condition  to such  consent,  (x)  require
delivery  to it in form  and  substance  satisfactory  to it,  and the  proposed
transferee  shall  deliver  to the  Certificate  Registrar  and to the  proposed
transferor,  an affidavit in  substantially  the form attached as Exhibit C-1 (a
"Transferee  Affidavit")  (A)  that  such  proposed  transferee  is a  Permitted
Transferee  and (B) stating that (I) the proposed  transferee  historically  has
paid its debts as they have come due and  intends to do so in the  future,  (II)
the proposed transferee understands that, as the holder of an Ownership Interest
in a Class R-I, Class R-II or a Class R-III Certificate,  as applicable,  it may
incur  liabilities in excess of cash flows  generated by the residual  interest,
(III) the proposed  transferee  intends to pay taxes associated with holding the
Ownership  Interest as they become due,  (IV) the proposed  transferee  will not
transfer the Ownership Interest to any Person that does not provide a Transferee
Affidavit or as to which the proposed  transferee has actual knowledge that such
Person is not a Permitted  Transferee  or is acting as an agent  (including as a
broker,  nominee  or  other  middleman)  for a  Person  that is not a  Permitted
Transferee,  and (V) the proposed transferee expressly agrees to be bound by and
to  abide  by the  provisions  of this  Section  5.2(j)  and (y)  other  than in
connection  with the  initial  issuance  of the Class R-I,  Class R-II and Class
R-III   Certificates,   require  a  statement   from  the  proposed   transferor
substantially  in the form  attached as Exhibit C-2 (the  "Transferor  Letter"),
that  the  proposed  transferor  has  no  actual  knowledge  that  the  proposed
transferee is not a Permitted  Transferee and has no actual  knowledge or reason
to know that the  proposed  transferee's  statements  in the  preceding  clauses
(x)(B)(I) or (III) are false. Furthermore, no transfer of any Ownership Interest
in a  Noneconomic  Residual  Interest  shall be made  unless  either (1) (A) the
transferor conducts, at the time of the transfer, a reasonable  investigation of
the  financial  condition  of the  proposed  transferee  and, as a result of the
investigation,  the  transferor  determines  that the  proposed  transferee  had
historically  paid its debts as they came due and found no significant  evidence
that the proposed transferee will not continue to pay its debts as they come due
in the future and (B) the  transferor  determines  that the present value of the
anticipated  tax liabilities  associated  with holding the Noneconomic  Residual
Interest does not exceed the sum of (x) the present  value of any  consideration
given to the proposed  transferee to acquire the Noneconomic  Residual Interest,
(y) the present value of the expected  future  distributions  on the Noneconomic
Residual  Interest  and (z) the  present  value of the  anticipated  tax savings
associated with holding the Noneconomic  Residual Interest as the REMIC to which
the Ownership  Interest relates generates losses or (2) the proposed  transferee
provides the transferor with a certification  of facts and an Opinion of Counsel
which  establishes to the satisfaction of the transferor that such transfer will
not be disregarded for tax purposes.  Notwithstanding the foregoing, if Proposed
Treasury  Regulation  Section  1.860E-1(c)(4)  is  superceded  by changes in the
federal  income tax law, the foregoing  conditions  shall be deemed  modified in
accordance with such changes in the federal income tax law.

                (iii)  If any purported Transferee shall become  a Holder  of  a
Residual  Certificate  in violation of the  provisions of this Section 5.2, then
the last preceding  Holder of such Residual  Certificate  that was in compliance
with the  provisions  of this  Section  5.2  shall be  restored,  to the  extent
permitted  by law, to all rights as Holder  thereof  retroactive  to the date of
registration  of  such  Transfer  of  such  Residual  Certificate.  None  of the
Depositor,  the  Trustee  or the  Certificate  Registrar,  shall  be  under  any
liability  to  any  Person  for  any  registration  of  Transfer  of a  Residual
Certificate  that is in fact not permitted by this Section 5.2 or for making any
payments due on such  Certificate  to the Holder thereof or for taking any other
action with respect to such Holder under the provisions of this Agreement.


                                      130
<PAGE>


                (iv)  Upon notice to the Certificate Registrar  that  there  has
occurred a Transfer  to any Person  that is a  Disqualified  Organization  or an
agent thereof  (including a broker,  nominee,  or middleman) in contravention of
the  foregoing  restrictions,  and in any event not later  than 60 days  after a
request for  information  from the  transferor of such  Ownership  Interest in a
Class R-I, Class R-II or a Class R-III Certificate,  or such agent thereof,  the
Certificate  Registrar  and the  Trustee  agree  to  furnish  to the IRS and the
transferor of such  Ownership  Interest or such agent  thereof such  information
necessary to the  application of Section  860E(e) of the Code as may be required
by the Code,  including,  but not  limited  to, the  present  value of the total
anticipated  excess  inclusions  with  respect to such Class R-I,  Class R-II or
Class R-III Certificate (or portion thereof) for periods after such Transfer. At
the  election of the  Certificate  Registrar  and the Trustee,  the  Certificate
Registrar  and the  Trustee  may  charge  a  reasonable  fee for  computing  and
furnishing such  information to the transferor or to such agent thereof referred
to above; provided, however, that such Persons shall in no event be excused from
furnishing such information.

               (v) The provisions of this Section 5.2(j) set forth prior to this
clause (v) may be modified,  added to or  eliminated,  provided that there shall
have been delivered to the Trustee the following:

                        (A) Rating Agency  Confirmation shall have been obtained
from each Rating  Agency with  respect to the  modification  of,  addition to or
elimination of such provisions; and

                        (B) an  Opinion  of  Counsel,   in  form  and  substance
satisfactory  to the Trustee,  obtained at the expense of the party seeking such
modification  of, addition to or elimination of such provisions (but in no event
at the  expense of the Trustee or the Trust  Fund),  to the effect that doing so
will not (1) cause any REMIC  Pool to cease to  qualify as a REMIC or be subject
to an entity-level  tax caused by the Transfer of any Residual  Certificate to a
Person which is not a Permitted  Transferee or (2) cause a Person other than the
prospective  Transferee  to be  subject  to a  REMIC-related  tax  caused by the
Transfer  of a  Residual  Certificate  to a  Person  that  is  not  a  Permitted
Transferee.

     (k) If a Person is acquiring any Privately Placed Certificate, Subordinated
Certificate  or Residual  Certificate  as a  fiduciary  or agent for one or more
accounts,  such Person shall be required to deliver to the Certificate Registrar
a  certification,  upon which the Certificate  Register may rely (subject to the
requirements of Section  8.1(b)),  to the effect that it has (i) sole investment
discretion  with  respect to each such  account  and (ii) full power to make the
applicable    foregoing    acknowledgments,     representations,     warranties,
certifications  and/or agreements with respect to each such account as set forth
in Subsections (b), (c), (d) and/or (e), as appropriate, of this Section 5.2.

          Section 5.3.   Book-Entry Certificates.
                         -----------------------

     (a) Each Class of REMIC III Regular  Certificates shall initially be issued
as one or more Book-Entry  Certificates registered in the name of the Securities
Depository  or its nominee  and,  except as provided  in  subsection  (c) below,
transfer of such Certificates may not be registered by the Certificate Registrar
unless such transfer is to a successor Securities Depository that agrees to hold
such Certificates for the respective Certificate Owners with Ownership Interests
therein.  Such  Certificate  Owners  shall hold and  transfer  their  respective
Ownership Interest in and to such Certificates through the book-entry facilities
of the Securities  Depository  and,  except as provided in subsection (c) below,
shall not be entitled to definitive, fully

                                      131
<PAGE>


registered Certificates ("Definitive Certificates") in respect of such Ownership
Interests.  Unless the Certificate  Registrar determines otherwise in accordance
with  applicable  law and the rules and  procedures  of, or  applicable  to, the
Securities  Depository  (the  "Depository  Rules"),  transfers  of a  beneficial
interest in a  Book-Entry  Certificate  representing  an interest in a Privately
Placed  Certificate  to (i) an  Institutional  Accredited  Investor will require
delivery in the form of a Definitive  Certificate and the Certificate  Registrar
shall register such transfer only upon compliance with the foregoing  provisions
of Section 5.2 or (ii) a Qualified  Institutional  Buyer may only be effectuated
by  means  of an "SRO  Rule  144A  System"  approved  for  such  purpose  by the
Commission.  All transfers by Certificate  Owners of their respective  Ownership
Interests in the Book-Entry  Certificates  shall be made in accordance  with the
procedures  established  by the Securities  Depository  Participant or brokerage
firm  representing  each such  Certificate  Owner.  Each  Securities  Depository
Participant  shall only  transfer  the  Ownership  Interests  in the  Book-Entry
Certificates of Certificate Owners it represents or of brokerage firms for which
it  acts  as  agent  in  accordance  with  the  Securities  Depository's  normal
procedures.  Neither the  Certificate  Registrar  nor the Trustee shall have any
responsibility  to monitor or restrict the  transfer of  Ownership  Interests in
Book-Entry  Certificates  through the  book-entry  facilities of the  Securities
Depository.

     (b) The Trustee,  the Master  Servicer,  the Special  Servicer,  the Fiscal
Agent and the Certificate  Registrar may for all purposes,  including the making
of  payments  due on the  Book-Entry  Certificates,  deal  with  the  Securities
Depository  as the  authorized  representative  of the  Certificate  Owners with
respect  to such  Certificates  for the  purposes  of  exercising  the rights of
Certificateholders  hereunder.  The rights of Certificate Owners with respect to
the  Book-Entry  Certificates  shall be limited to those  established by law and
agreements  between  such  Certificate  Owners  and  the  Securities  Depository
Participants and brokerage firms representing such Certificate Owners.  Multiple
requests and directions from, and votes of, the Securities  Depository as Holder
of the Book-Entry  Certificates  with respect to any particular matter shall not
be deemed  inconsistent  if they are made with respect to different  Certificate
Owners.  The Trustee may establish a reasonable  record date in connection  with
solicitations  of consents from or voting by  Certificateholders  and shall give
notice to the Securities Depository of such record date.

     (c) If  (i)(A)  the  Depositor  advises  the  Trustee  and the  Certificate
Registrar in writing that the Securities Depository is no longer willing or able
to properly  discharge  its  responsibilities  with  respect to any Class of the
Book-Entry  Certificates,  and (B) the Depositor is unable to locate a qualified
successor,  or (ii) the  Depositor  at its option  advises  the  Trustee and the
Certificate  Registrar  in writing that it elects to  terminate  the  book-entry
system  through  the  Securities  Depository  with  respect  to any Class of the
Book-Entry  Certificates,  the  Certificate  Registrar shall notify all affected
Certificate Owners, through the Securities Depository,  of the occurrence of any
such  event  and  of  the  availability  of  Definitive   Certificates  to  such
Certificate  Owners  requesting  the same.  Upon  surrender  to the  Certificate
Registrar  of  any  Class  of the  Book-Entry  Certificates  by  the  Securities
Depository,   accompanied  by  registration  instructions  from  the  Securities
Depository for  registration  of transfer,  the Trustee shall  execute,  and the
Certificate   Registrar   shall   authenticate   and  deliver,   the  Definitive
Certificates to the Certificate Owners identified in such instructions.  None of
the Depositor,  the Master  Servicer,  the Special  Servicer,  the Trustee,  the
Fiscal  Agent or the  Certificate  Registrar  shall be  liable  for any delay in
delivery  of such  instructions  and may  conclusively  rely  on,  and  shall be
protected  in relying on, such  instructions.  Upon the  issuance of  Definitive
Certificates for purposes of evidencing  ownership of any Class of the REMIC III
Regular Certificates, the registered holders of such

                                      132
<PAGE>


Definitive Certificates shall be recognized as Certificateholders hereunder and,
accordingly,  shall be  entitled  directly to receive  payments  on, to exercise
Voting  Rights with  respect to, and to transfer and  exchange  such  Definitive
Certificates.

     (d) Upon acceptance for exchange or transfer of a beneficial  interest in a
Book-Entry  Certificate for a Definitive  Certificate,  as provided herein,  the
Certificate  Registrar  shall  endorse  on a  schedule  affixed  to the  related
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
Denomination of such Book-Entry  Certificate  equal to the  Denomination of such
Definitive Certificate issued in exchange therefor or upon transfer thereof.

     (e) If a Holder of a Definitive  Certificate wishes at any time to transfer
such  Certificate to a Person who wishes to take delivery thereof in the form of
a  beneficial  interest in the  Book-Entry  Certificate,  such  transfer  may be
effected only in accordance with the rules of the Securities Depository and this
Section  5.3(e).  Upon receipt by the  Certificate  Registrar  at the  Registrar
Office of (i) the Definitive  Certificate  to be transferred  with an assignment
and transfer pursuant to this Section 5.3(e), (ii) written instructions given in
accordance with the rules of the Securities Depository directing the Certificate
Registrar  to credit or cause to be  credited  to another  account a  beneficial
interest  in the  related  Book-Entry  Certificate,  in an  amount  equal to the
denomination of the Definitive Certificate to be so transferred, (iii) a written
order given in accordance with the rules of the Securities Depository containing
information  regarding the account to be credited with such beneficial  interest
and (iv) if the  affected  Certificate  is a  Privately  Placed  Certificate  an
Investment  Representation  Letter from the  transferee  to the effect that such
transferee is a Qualified  Institutional Buyer, the Certificate  Registrar shall
cancel  such  Definitive  Certificate,  execute  and  deliver  a new  Definitive
Certificate  for  the   denomination  of  the  Definitive   Certificate  not  so
transferred, registered in the name of the Holder or the Holder's transferee (as
instructed by the Holder),  and the  Certificate  Registrar  shall  instruct the
Securities  Depository or the custodian  holding such Book-Entry  Certificate on
behalf of the Securities  Depository to increase the denomination of the related
Book-Entry  Certificate by the denomination of the Definitive  Certificate to be
so  transferred,  and to credit or cause to be  credited  to the  account of the
Person  specified in such  instructions  a  corresponding  denomination  of such
Book-Entry Certificate.

          Section 5.4.   Mutilated, Destroyed, Lost or Stolen Certificates.
                         -------------------------------------------------

      If (i)  any  mutilated  Certificate  is  surrendered  to  the  Certificate
Registrar, or the Certificate Registrar receives evidence to its satisfaction of
the destruction,  loss or theft of any Certificate,  and (ii) there is delivered
to the Certificate Registrar such security or indemnity as may be required by it
to save it, the Trustee,  the Fiscal Agent,  the Special Servicer and the Master
Servicer  harmless,  then,  in the absence of actual  knowledge by a Responsible
Officer of the Certificate  Registrar that such Certificate has been acquired by
a bona  fide  purchaser,  the  Trustee  shall  execute  and the  Trustee  or the
Authenticating  Agent shall  authenticate  and the  Certificate  Registrar shall
deliver,  in exchange for or in lieu of any such mutilated,  destroyed,  lost or
stolen  Certificate,  a new  Certificate of the same Class and of like tenor and
Percentage Interest. Upon the issuance of any new Certificate under this Section
5.4, 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
Certificate Registrar) connected therewith. Any replacement Certificate issued

                                      133
<PAGE>


pursuant to this Section 5.4 shall constitute complete and indefeasible evidence
of ownership of the  corresponding  interest in the Trust Fund, as if originally
issued,  whether or not the lost, stolen or destroyed Certificate shall be found
at any time.

          Section 5.5.   Appointment of Paying Agent.
                         ---------------------------

      The  Trustee  may  appoint  a  Paying  Agent  for the  purpose  of  making
distributions  to  Certificateholders  pursuant to Article IV. The Trustee shall
cause such Paying Agent,  if other than the Trustee or the Master  Servicer,  to
execute and deliver to the Master  Servicer  and the  Trustee an  instrument  in
which such Paying  Agent shall  agree with the Master  Servicer  and the Trustee
that  such  Paying  Agent  will  hold  all  sums  held  by  it  for  payment  to
Certificateholders in trust for the benefit of the  Certificateholders  entitled
thereto until such sums have been paid to such Certificateholders or disposed of
as otherwise provided herein. The initial Paying Agent shall be the Trustee. The
Paying Agent shall at all times be an entity having a long-term senior unsecured
debt rating of at least  "Baa2" by Moody's  and "A" by Fitch,  unless and to the
extent  Rating Agency  Confirmation  is obtained (the cost, if any, of obtaining
such  confirmation to be paid by the Trustee;  provided that such appointment is
made by the Trustee in its sole discretion and otherwise by the Trust Fund). The
Trustee shall pay the Paying Agent  reasonable  compensation  from its own funds
and the Trustee  shall  remain  liable for all  actions of any Paying  Agent and
shall not be relieved of any of its obligations hereunder.

          Section 5.6.   Access to Certificateholders' Names and Addresses.
                         -------------------------------------------------

     (a) If any Certificateholder or the Operating Adviser (for purposes of this
Section 5.6, an "Applicant")  applies in writing to the  Certificate  Registrar,
and such application states that the Applicant desires to communicate with other
Certificateholders  with respect to their  rights under this  Agreement or under
the  Certificates and is accompanied by a copy of the  communication  which such
Applicant  proposes to transmit,  then the Certificate  Registrar  shall, at the
expense of such  Applicant,  within ten Business  Days after the receipt of such
application,  transmit such  communication to the  Certificateholders  as of the
most recent Record Date;  provided,  however,  if such communication  relates to
performance by the Master  Servicer,  the Special Servicer or the Trustee of its
duties  hereunder,  the  Certificate  Registrar  shall  furnish  or  cause to be
furnished  to  such  Applicant  a  list  of  the  names  and  addresses  of  the
Certificateholders as of the most recent Record Date.

     (b) Every  Certificateholder,  by  receiving  and holding its  Certificate,
agrees with the Trustee that the Trustee and the Certificate Registrar shall not
be held accountable in any way by reason of the disclosure of any information as
to the names and addresses of the  Certificateholders  hereunder,  regardless of
the source from which such information was derived.

          Section 5.7.   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
an 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, when required,  to the Depositor,  the Special
Servicer or the Master Servicer. Proof of execution of any such instrument or of
a writing

                                      134
<PAGE>


appointing  any such agent shall be sufficient for any purpose of this Agreement
and conclusive in favor of the Trustee, the Depositor,  the Special Servicer and
the Master Servicer, if made in the manner provided in this Section.

     (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,  the Special Servicer or the Master Servicer in reliance
thereon, whether or not notation of such action is made upon such Certificate.

     (d) The Trustee or Certificate  Registrar may require such additional proof
of any matter referred to in this Section 5.7 as it shall deem necessary.

          Section 5.8.   Persons Deemed Owners.
                         ---------------------

      Prior to due presentment for registration of transfer, the Depositor,  the
Master  Servicer,  the Special  Servicer,  the Trustee,  the Fiscal  Agent,  the
Certificate Registrar 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 Article IV and for all other
purposes whatsoever, and none of the Depositor, the Master Servicer, the Special
Servicer,  the Trustee, any Fiscal Agent, the Certificate Registrar or any agent
of any of them shall be affected by notice to the contrary.

          Section 5.9.   Certification by Certificate Owners.
                         -----------------------------------

     (a) Each Certificate Owner is hereby deemed by virtue of its acquisition of
an Ownership Interest in the Book-Entry Certificates to agree to comply with the
transfer requirements of Section 5.2.

     (b) To the extent that under the terms of this  Agreement,  it is necessary
to determine  whether any Person is a Certificate  Owner, the Trustee shall make
such  determination  based on (i) a  certificate  of such Person  which shall be
substantially in the form of paragraph 1 of Exhibit I hereto (or such other form
as shall be  reasonably  acceptable  to the Trustee) and shall specify the Class
and  Certificate  Balance  or  Notional  Amount,  as the  case  may  be,  of the
Book-Entry Certificate beneficially owned and (ii) evidence of ownership of such
Book-Entry  Certificate through the Securities  Depository;  provided,  however,
that the Trustee  shall not  knowingly  recognize  such Person as a  Certificate
Owner if such Person, to the knowledge of a Responsible  Officer of the Trustee,
acquired  its  Ownership  Interest in a Book-Entry  Certificate  in violation of
Section 5.2, or if such Person's certification that it is a Certificate Owner is
in direct conflict with information  obtained by the Trustee from the Securities
Depository,  Securities  Depository  Participants and/or indirect  participating
brokerage firms for which Securities Depository Participants act as agents, with
respect to the identity of a Certificate  Owner.  The Trustee shall exercise its
reasonable  discretion in making any determination under this Section 5.9(b) and
shall afford any Person providing information with respect to its

                                      135
<PAGE>


beneficial ownership of any Book-Entry Certificate an opportunity to resolve any
discrepancies  between  the  information  provided  and  any  other  information
available to the Trustee.

                                   ARTICLE VI.
                                   -----------

           THE DEPOSITOR, THE MASTER SERVICER AND THE SPECIAL SERVICER

          Section 6.1.   Liability of the Depositor, the Master Servicer and
                         ---------------------------------------------------
the Special Servicer.
--------------------

      The Depositor,  the Master Servicer and the Special Servicer each shall be
liable in accordance herewith only to the extent of the obligations specifically
imposed by this Agreement.

          Section 6.2.   Merger or  Consolidation of the Master Servicer and
                         ---------------------------------------------------
Special Servicer.
----------------

      Subject to the third  paragraph of this  Section 6.2, the Master  Servicer
will  keep  in  full  effect  its  existence,  rights  and  good  standing  as a
corporation  under the laws of the State of Delaware and will not jeopardize its
ability  to do  business  in  each  jurisdiction  in  which  one or  more of the
Mortgaged  Properties are located or to protect the validity and  enforceability
of this Agreement,  the Certificates or any of the Mortgage Loans and to perform
its respective duties under this Agreement.

      Subject to the following paragraph, the Special Servicer will keep in full
effect its existence,  rights and good standing as a corporation  under the laws
of the state of its  incorporation  and will not  jeopardize  its  ability to do
business in each  jurisdiction in which one or more of the Mortgaged  Properties
are located or to protect the validity and enforceability of this Agreement, the
Certificates or any of the Specially  Serviced Mortgage Loans and to perform its
respective duties under this Agreement.

      Each of the Master  Servicer  and the  Special  Servicer  may be merged or
consolidated  with or into any Person,  or transfer all or substantially  all of
its assets to any Person,  in which case any Person resulting from any merger or
consolidation  to which it shall be a party,  or any  Person  succeeding  to its
business, shall be the successor of the Master Servicer or the Special Servicer,
as  applicable  hereunder,  and  shall  be  deemed  to have  assumed  all of the
liabilities  of the Master  Servicer  or the  Special  Servicer,  as  applicable
hereunder,  if Rating Agency Confirmation has been obtained with respect to such
merger, consolidation or transfer and succession (the cost, if any, of obtaining
such  confirmation  to be paid by the Master  Servicer or Special  Servicer,  as
applicable).

          Section 6.3.   Limitation on Liability of the Depositor,  the  Master
                         ------------------------------------------------------
Servicer and Others.
-------------------

      Neither the Depositor,  the Master Servicer, the Special Servicer, nor any
of the  owners,  directors,  managers,  officers,  employees  or  agents  of the
Depositor,  the  Master  Servicer  or the  Special  Servicer  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

                                      136
<PAGE>


Agreement,  or for errors in judgment;  provided,  however,  that this provision
shall not protect the Depositor,  the Master  Servicer,  the Special Servicer or
any such Person against any breach of warranties or representations made herein,
or against  any  liability  which  would  otherwise  be imposed by reason of its
respective  willful  misfeasance,  bad faith or negligence in the performance of
its duties or by reason of negligent disregard of its respective  obligations or
duties hereunder.  The Depositor,  the Master Servicer, the Special Servicer and
any owner, director,  manager,  officer, employee or agent of the Depositor, the
Master  Servicer or the Special  Servicer may rely in good faith on any document
of any kind which,  prima  facie,  is properly  executed  and  submitted  by any
appropriate Person with respect to any matters arising hereunder. The Depositor,
the Master  Servicer,  the Special  Servicer and any owner,  director,  officer,
employee or agent of the Depositor,  the Master Servicer or the Special Servicer
shall be  indemnified  and held  harmless  by the Trust Fund  against  any loss,
liability or expense  incurred in connection  with any legal action  relating to
this Agreement or the  Certificates,  other than any loss,  liability or expense
incurred  by  reason  of  its  respective  willful  misfeasance,  bad  faith  or
negligence in the performance of its respective duties or by reason of negligent
disregard  of its  respective  obligations  or  duties  hereunder.  Neither  the
Depositor nor the Master  Servicer nor the Special  Servicer  shall be under any
obligation to appear in, prosecute or defend any legal action unless such action
is related to its respective duties under this Agreement and in its opinion does
not  expose  it to  any  expense  or  liability;  provided,  however,  that  the
Depositor,  the Master  Servicer or the Special  Servicer may in its  discretion
undertake  any action  related to its  obligations  hereunder  which it may deem
necessary or desirable  with respect 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,  the  Master  Servicer  and the  Special  Servicer  shall be
entitled to be reimbursed  therefor from the  Collection  Account as provided in
Section 3.6(a)(vi) of this Agreement.

          Section 6.4.   Resignation of Master Servicer or Special Servicer.
                         --------------------------------------------------

     (a) Except as otherwise provided in Section 6.2, Section 6.4(b) and Section
6.5 hereof,  neither the Master  Servicer nor the Special  Servicer shall resign
from  the  obligations  and  duties  hereby  imposed  on it,  unless  there is a
determination  that  its  duties  hereunder  are  no  longer  permissible  under
applicable law or are in material  conflict by reason of applicable law with any
other activities carried on by it (the other activities so causing such conflict
being of a type and nature carried on by it at the date of this Agreement).  Any
such  determination  permitting the  resignation  of the Master  Servicer or the
Special  Servicer  shall be  evidenced  by an Opinion of Counsel to such  effect
delivered to the Trustee.  No such  resignation  shall become  effective until a
successor servicer designated by the Trustee, with the consent of the Depositor,
shall have assumed the  responsibilities  and obligations of the Master Servicer
or the Special  Servicer,  as the case may be, under this  Agreement  and Rating
Agency  Confirmation  shall have been  obtained  with respect to such  servicing
transfer.  Notice of such  resignation  shall be given  promptly  by the  Master
Servicer or the Special Servicer, as the case may be, to the Trustee.

     (b) The Master  Servicer and the Special  Servicer may each resign from the
obligations  and  duties  imposed  on it,  upon 30 days  notice to the  Trustee,
provided that (i) a successor  servicer (x) is  available,  (y) has assets of at
least   $15,000,000   and   (z)  is   willing   to   assume   the   obligations,
responsibilities, and covenants to be performed hereunder by the resigning party
on substantially the same terms and conditions, and for not more than equivalent

                                      137
<PAGE>


compensation,  to that herein provided; (ii) the resigning party bears all costs
associated with its resignation and the transfer of servicing;  and (iii) Rating
Agency  Confirmation  is obtained with respect to such  servicing  transfer,  as
evidenced by a letter delivered to the Trustee by each Rating Agency.

          Section 6.5.   Assignment or Delegation of Duties by Master Servicer
                  ------------------------------------------------------------
or the Special Servicer.
-----------------------

      In addition to actions  permitted  under Section 6.2, the Master  Servicer
and the Special  Servicer  shall each have the right  without the prior  written
consent  of the  Trustee  to assign and  delegate  all of its duties  hereunder;
provided,  however, that (i) the Master Servicer or the Special Servicer, as the
case may be, gives the Depositor and the Trustee  notice of such  assignment and
delegation;  (ii) such  purchaser or transferee  accepting  such  assignment and
delegation  executes and delivers to the  Depositor and the Trustee an agreement
accepting  such  assignment,  which contains an assumption by such Person of the
rights,  powers,  duties,  responsibilities,  obligations and liabilities of the
Master Servicer or the Special Servicer, as the case may be, with like effect as
if  originally  named  as a party  to this  Agreement;  (iii)  a  Rating  Agency
Confirmation  shall  have been  obtained  with  respect to such  assignment  and
delegation; and (iv) the assignment and delegation is reasonably satisfactory to
the Trustee and the Depositor. In the case of any such assignment and delegation
in accordance with the requirements of this Section,  the Master Servicer or the
Special  Servicer,  as the case may be, shall be released  from its  obligations
under this Agreement,  except that the Master Servicer or the Special  Servicer,
as the case may be,  shall remain  liable for all  liabilities  and  obligations
incurred by it as the Master Servicer or the Special  Servicer,  as the case may
be, hereunder prior to the satisfaction of the conditions to such assignment set
forth in the preceding  sentence.  Notwithstanding the above, each of the Master
Servicer and the Special  Servicer may appoint  Sub-Servicers in accordance with
Section 3.2 hereof  (provided that the Master  Servicer or the Special  Servicer
remains fully liable for their  actions),  or agents or independent  contractors
appointed or retained to perform select duties thereof.

          Section 6.6.   Rights of the  Depositor, the Rating Agencies and the
                         -----------------------------------------------------
Trustee in Respect of the Master Servicer and the Special Servicer.
------------------------------------------------------------------

      Each of the Master  Servicer  and the Special  Servicer  shall  afford the
Depositor,  the Rating Agencies and the Trustee,  upon reasonable notice, during
normal  business hours access to all records  maintained by it in respect of its
rights and obligations hereunder and access to its officers responsible for such
obligations.  Upon  reasonable  request,  each of the  Master  Servicer  and the
Special  Servicer  shall furnish to the Depositor,  the Rating  Agencies and the
Trustee its or its  parent's  most recent  financial  statements  and such other
information in its  possession  (which it is not prohibited by applicable law or
contract  from  disclosing)  regarding  its  business,   affairs,  property  and
condition,  financial or otherwise, as the party requesting such information, in
its  reasonable  judgment,  determines to be relevant to the  performance of the
obligations  hereunder of the Master Servicer or the Special  Servicer.  Neither
the Depositor nor the Trustee shall have any responsibility or liability for any
action or failure to act by the Master  Servicer  or the  Special  Servicer  and
neither  such Person is obligated to  supervise  the  performance  of the Master
Servicer or the Special Servicer under this Agreement or otherwise.

                                      138

<PAGE>


                                  ARTICLE VII.
                                  ------------

                                     DEFAULT

          Section 7.1.   Events of Default.
                         -----------------

     "Event of  Default,"  wherever  used  herein,  with  respect  to the Master
Servicer and the Special  Servicer,  as applicable  (except with respect to item
(viii)  in the case of the  Special  Servicer  and item  (ix) in the case of the
Master Servicer) means any one of the following events:

          (i) any failure by the Master Servicer or the Special  Servicer, as
applicable,  to remit to the Collection Account which continues unremedied for a
period of one  Business Day  following  the date on which such deposit was first
required to be made,  any  failure by the  Special  Servicer to remit to the REO
Account which  continues  unremedied  for a period of one Business Day following
the date on which such  deposit was first  required to be made or any failure by
the Master  Servicer to remit to the Trustee for deposit  into the  Distribution
Account any amount  required  to be so  remitted  by the Master  Servicer or the
Special Servicer, as applicable, pursuant to and in accordance with the terms of
this Agreement; or

          (ii) any  failure on the part of the Master  Servicer  or Special
Servicer, as applicable,  duly to observe or perform in any material respect any
other of the covenants or agreements,  or the breach of any  representations  or
warranties  provided  herein on the part of the Master  Servicer  or the Special
Servicer, which, in either event, materially and adversely affects the interests
of the  Certificateholders,  the Master  Servicer,  the Special  Servicer or the
Trustee with respect to any Mortgage Loan and which, in either event,  continues
unremedied  for a period of 30 days  after the date on which  written  notice of
such failure or breach, requiring the same to be remedied, shall have been given
to the Master Servicer or Special  Servicer by the Depositor or the Trustee,  or
to the Master Servicer or Special Servicer, the Depositor and the Trustee by the
Holders of Certificates  entitled to at least 25% of the aggregate Voting Rights
of any Class affected thereby; provided,  however, that if such breach, covenant
or  agreement  is capable  of being  cured and the  Master  Servicer  or Special
Servicer,  as applicable,  is diligently  pursuing such cure, such 30 day period
shall be extended, once only, for an additional 30 days; or

          (iii) a decree  or order of a court or agency or supervisory authority
having  jurisdiction in the premises in an involuntary case under any present or
future  federal  or  state  bankruptcy,   insolvency  or  similar  law  for  the
appointment  of a  conservator  or receiver  or  liquidator  in any  insolvency,
readjustment  of  debt,   marshalling  of  assets  and  liabilities  or  similar
proceedings,  or for the winding-up or  liquidation  of its affairs,  shall have
been entered against the Master Servicer or Special Servicer, as applicable, and
such decree or order shall have remained in force, undischarged or unstayed, for
a period of 60 days; or

          (iv) the Master Servicer or Special  Servicer,  as applicable,  shall
consent to the  appointment  of a  conservator  or receiver or liquidator in any
insolvency,  readjustment  of debt,  marshalling  of assets and  liabilities  or
similar  proceedings  of  or  relating  to  it  or of  or  relating  to  all  or
substantially all of its property; or

          (v) the Master Servicer or Special  Servicer, as applicable, shall
admit in writing its  inability  to pay its debts  generally as they become due,
file a petition to take advantage of any applicable insolvency or reorganization
statute,  make an assignment  for the benefit of its  creditors,  or voluntarily
suspend payment of its obligations; or


                                      139
<PAGE>


          (vi) the Trustee  shall have  received  written  notice from either
Rating  Agency,  or shall have actual  knowledge  that either  Rating Agency has
publicly  disseminated in writing,  that the continuation of the Master Servicer
or the  Special  Servicer  in  such  capacity  would  result  in the  downgrade,
qualification or withdrawal of any rating then assigned by such Rating Agency to
any Class of Certificates  (including,  without  limitation,  such ratings being
placed on "negative credit watch"); or

          (vii) one or more ratings  assigned by either Rating Agency to the
Certificates  shall have been  downgraded or withdrawn as a result of the Master
Servicer or Special Servicer, as the case may be, acting in such capacity; or

          (viii) the Master Servicer shall fail to make any Advance required to
be made by the Master  Servicer  hereunder  (whether  or not the  Trustee or the
Fiscal Agent makes such Advance), which continues unremedied for a period of one
Business Day following  the date on which such Advance was first  required to be
made; or

          (ix) the Special  Servicer  shall fail to make any Emergency Advance
(or timely direct the Master Servicer to make any Servicing Advance) required to
be made by it or the Master Servicer at its discretion hereunder (whether or not
the  Master  Servicer,  the  Trustee or the Fiscal  Agent  makes such  Emergency
Advance or Servicing  Advance),  which continues  unremedied for a period of one
Business Day following  the date on which such Advance was first  required to be
made;

then,  and in each and every such case, so long as an Event of Default shall not
have been remedied, the Trustee may, and at the written direction of the Holders
of 25% of the aggregate Voting Rights of all Certificates, the Trustee shall, by
notice in writing to the Master  Servicer or the Special  Servicer,  as the case
may be,  terminate  (subject to Section  7.2) all of its  respective  rights and
obligations  under  this  Agreement  and in and to the  Mortgage  Loans  and the
proceeds   thereof,   other  than  any  rights  it  may  have   hereunder  as  a
Certificateholder  and any rights or obligations  that accrued prior to the date
of such termination (including the right to receive all amounts accrued or owing
to it under this  Agreement,  plus  interest at the Advance Rate on such amounts
until  received to the extent  such  amounts  bear  interest as provided in this
Agreement,  with respect to periods prior to the date of such  termination,  and
the right to the benefits of Section 6.3  notwithstanding any such termination);
provided,  however,  that in the  event  the  Master  Servicer  and the  Special
Servicer are the same Person,  the Trustee may, and at the written  direction of
the  Holders of 25% of the  aggregate  Voting  Rights of all  Certificates,  the
Trustee  shall  require  that  any  termination  of the  Master  Servicer  shall
constitute a termination of the Special Servicer and vice versa. On or after the
receipt by the Master Servicer or the Special  Servicer,  as the case may be, of
such  written  notice,  all of its  authority  and power  under this  Agreement,
whether with respect to the  Certificates  or the Mortgage  Loans or  otherwise,
shall pass to and be vested in the Trustee  pursuant  to and under this  Section
(notwithstanding  any failure of the Trustee to satisfy the  criterion set forth
in Section 6.4) and, without  limitation,  the Trustee is hereby  authorized and
empowered  to  execute  and  deliver,  on  behalf of and at the  expense  of the
defaulting  Master  Servicer  or  Special  Servicer,  as the  case  may  be,  as
attorney-in-fact or otherwise, any and all documents and other instruments,  and
to do or accomplish all other acts or things  necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement  or  assignment  of the  Mortgage  Loans and related  documents,  or
otherwise.  Each of the Master Servicer and the Special  Servicer,  on behalf of
itself,  agrees in the  event it is  terminated  pursuant  to this  Section  7.1
promptly  (and in any event no later than ten Business  Days  subsequent to such
notice) to provide, at its own expense,

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<PAGE>


the Trustee or the successor  Master Servicer or Special Servicer (if other than
the  Trustee)  with all  documents  and records  requested by the Trustee or the
successor  Master  Servicer or Special  Servicer  (if other than the Trustee) to
enable the Trustee or the  successor  Master  Servicer or Special  Servicer  (if
other than the Trustee) to assume its functions hereunder, and to cooperate with
the Trustee and the successor to its responsibilities hereunder in effecting the
termination of its  responsibilities  and rights hereunder,  including,  without
limitation, the transfer to the successor Master Servicer or Special Servicer or
the Trustee,  as applicable,  for administration by it of all cash amounts which
shall at the time be or should have been credited by the Master  Servicer or the
Special Servicer to the Collection Account, the Grantor Trust Collection Account
and any REO Account or Reserve  Account or  thereafter  shall be  received  with
respect to the Mortgage  Loans,  and shall promptly  provide the Trustee or such
successor  Master Servicer or Special  Servicer (which may include the Trustee),
as  applicable,  all  documents  and records  reasonably  requested  by it, such
documents  and  records  to be  provided  in such  form as the  Trustee  or such
successor  Master  Servicer  or  Special   Servicer  shall  reasonably   request
(including  electromagnetic  form), to enable it to assume the Master Servicer's
or Special Servicer's function  hereunder.  All reasonable costs and expenses of
the  successor  Master  Servicer  or  successor  Special  Servicer  incurred  in
connection with transferring the Mortgage Files to the successor Master Servicer
(or copies of the Mortgage Files relating to Specially  Serviced  Mortgage Loans
to the successor  Special  Servicer) and amending this Agreement to reflect such
succession as Master  Servicer or successor  Special  Servicer  pursuant to this
Section 7.1 shall be paid by the predecessor Master Servicer or Special Servicer
upon  presentation  of  reasonable  documentation  of such  costs and  expenses;
provided,  however,  that if any such costs and  expenses  remain  unpaid by the
predecessor  Master Servicer or Special  Servicer within a reasonable time after
presentation of such documentation, the Trustee or the successor Master Servicer
or Special  Servicer  (if other than the  Trustee)  may be  reimbursed  from the
Collection Account for such unpaid costs and expenses,  which shall be deemed to
be expenses of the Trust Fund.

          Section 7.2.   Trustee to Act; Appointment of Successor.
                         ----------------------------------------

      On and after the time the Master Servicer or the Special Servicer receives
a notice of  termination  pursuant  to Section  7.1,  the  Trustee  shall be its
successor  in  such  capacity  in all  respects  under  this  Agreement  and the
transactions  set forth or provided for herein and,  except as provided  herein,
shall be subject to all the responsibilities,  duties,  limitations on liability
and liabilities  relating  thereto and arising  thereafter  placed on the Master
Servicer  or Special  Servicer  by the terms and  provisions  hereof;  provided,
however,   that  (i)  the  Trustee  shall  have  no  responsibilities,   duties,
liabilities  or  obligations  with  respect to any act or omission of the Master
Servicer or of the Special Servicer and (ii) any failure to perform, or delay in
performing,  such duties or  responsibilities  caused by the terminated  party's
failure to provide, or delay in providing, records, tapes, disks, information or
monies  shall  not be  considered  a default  by any  successor  hereunder.  The
appointment of a successor  Master Servicer or Special Servicer shall not affect
any  liability  of the  predecessor  Master  Servicer  or Special  Servicer,  as
applicable, which may have arisen prior to its termination as Master Servicer or
Special Servicer. The Trustee shall not be liable for any of the representations
and warranties of the Master  Servicer or of the Special  Servicer  herein or in
any related document or agreement,  for any acts or omissions of the predecessor
Master Servicer or Special Servicer,  as applicable,  or for any losses incurred
in respect of any  Permitted  Investment  by the Master  Servicer or the Special
Servicer, as applicable, pursuant to Section 3.7 hereunder nor shall the Trustee
be required to purchase any


                                      141
<PAGE>


Mortgage Loan  hereunder.  As  compensation  therefor,  the Trustee as successor
Master  Servicer  or  Special  Servicer  shall  be  entitled  to  all  Servicing
Compensation  relating to the  Mortgage  Loans that accrue after the date of the
Trustee's succession to which the Master Servicer or Special Servicer would have
been entitled if the Master  Servicer or Special  Servicer,  as applicable,  had
continued to act  hereunder  (other than Workout Fees payable to the  terminated
Special  Servicer  pursuant to Section  3.12(b) and payment of the  Transferable
Servicing  Interest as and to the extent  provided in Section  3.12(a)).  Unless
otherwise  agreed to in writing by the Master  Servicer and the Trustee,  in the
event any Advances made by the Master Servicer,  the Fiscal Agent or the Trustee
shall at any time be  outstanding,  or any amounts of interest  thereon shall be
accrued and  unpaid,  all  amounts  available  to repay  Advances  and  interest
hereunder shall be applied  entirely to the Advances made by the Trustee and the
Fiscal Agent (and the accrued and unpaid interest thereon),  until such Advances
made by the  Trustee  and the Fiscal  Agent  (and  accrued  and unpaid  interest
thereon)  shall have been  repaid in full.  In addition  to the  foregoing,  any
successor Master Servicer (which,  for the purposes of this sentence,  shall not
include the  Trustee)  shall be required to  allocate  funds  available  for the
payment of unreimbursed  Advances (with interest thereon at the Advance Rate) on
a first in,  first out  basis,  which  results in the  payment  of  unreimbursed
Advances  (with interest  thereon at the Advance Rate) first to the  predecessor
Master  Servicer.  Notwithstanding  the above,  the Trustee  may, if it shall be
unwilling  to so act, or shall,  if it is unable to so act, or if the Holders of
Certificates entitled to a majority of the aggregate Voting Rights so request in
writing  to the  Trustee,  or if neither  the  Trustee  nor the Fiscal  Agent is
approved  as a  master  servicer  or  special  servicer  by each  of the  Rating
Agencies,  promptly  appoint,  or petition a court of competent  jurisdiction to
appoint, any established mortgage loan servicing institution, the appointment of
which is the  subject of a Rating  Agency  Confirmation  (the cost,  if any,  of
obtaining  such  confirmation  to be paid by the terminated  Master  Servicer or
Special  Servicer,  as  applicable),  as the successor to the Master Servicer or
Special  Servicer  hereunder  in  the  assumption  of all  or  any  part  of the
responsibilities,  duties or  liabilities  of the  Master  Servicer  or  Special
Servicer  hereunder.  No  appointment  of a successor to the Master  Servicer or
Special  Servicer  hereunder  shall be effective  until the  assumption  by such
successor of all the Master Servicer's or Special  Servicer's  responsibilities,
duties and liabilities  hereunder.  If the resigning or terminated  party is the
initial  Master  Servicer,  and if on or  before  the  effective  date  of  such
resignation or  termination  the initial  Master  Servicer  procures a qualified
Person that is willing to act as the successor Master Servicer, then the Trustee
shall appoint such Person to act as the  successor  Master  Servicer;  provided,
however,  that (i) such Person is reasonably  acceptable to the Trustee,  (ii) a
Rating Agency  Confirmation is obtained with respect to such appointment,  (iii)
the initial Master  Servicer pays all costs and expenses in connection with such
transfer,  and (iv) such  Person  accepts  such  appointment  on or prior to the
effective date of such  resignation  or  termination.  Pending  appointment of a
successor  to the Master  Servicer  or Special  Servicer  hereunder,  unless the
Trustee shall be prohibited by law from so acting, the Trustee shall act in such
capacity as herein above  provided.  In  connection  with such  appointment  and
assumption  described  herein,  the Trustee may make such  arrangements  for the
compensation  of such successor out of payments on Mortgage Loans as it and such
successor shall agree; provided,  however, that no such compensation shall be in
excess of that  permitted the terminated  party  hereunder.  The Depositor,  the
Trustee,  the Master Servicer or Special  Servicer and such successor shall take
such action, consistent with this Agreement, as shall be necessary to effectuate
any such succession.


                                      142

<PAGE>



          Section 7.3.   Notification to Certificateholders.
                         ----------------------------------

          (a) Upon any  termination  pursuant  to Section  7.1 above or
appointment of a successor to the Master Servicer or the Special  Servicer,  the
Trustee shall give prompt written notice thereof to  Certificateholders at their
respective  addresses  appearing in the Certificate  Register and to each Rating
Agency.

          (b)  Within 5 days  after  the  occurrence  of any Event of  Default
of which a Responsible Officer of the Trustee has actual knowledge,  the Trustee
shall transmit by mail to all Holders of Certificates  and to each Rating Agency
notice of such Event of Default,  unless  such Event of Default  shall have been
cured or waived.

          Section 7.4.   Other 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, 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).
In such  event,  the  legal  fees,  expenses  and costs of such  action  and any
liability  resulting  therefrom shall be expenses,  costs and liabilities of the
Trust Fund, and the Trustee shall be entitled to be reimbursed therefor from the
Collection  Account as  provided  in  Section  3.6(a)(vi).  Except as  otherwise
expressly  provided in this Agreement,  no remedy provided for by this Agreement
shall be  exclusive  of any other  remedy,  and each and every  remedy  shall be
cumulative  and in  addition  to any other  remedy and no delay or  omission  to
exercise  any right or remedy  shall impair any such right or remedy or shall be
deemed to be a waiver of any Event of Default.

          Section 7.5.   Waiver of Past Events of Default; Termination.
                         ---------------------------------------------

      The  Holders  of  Certificates  evidencing  not less than  66-2/3%  of the
aggregate  Voting  Rights of the  Certificates  may, on behalf of all Holders of
Certificates,  waive any default by the Master  Servicer or Special  Servicer in
the  performance of its  obligations  hereunder and its  consequences,  except a
default in making any required  deposits to (including P&I Advances) or payments
from the  Collection  Account,  the  Distribution  Account or REO  Account or in
remitting payments as received,  in each case in accordance with this Agreement.
Upon any such  waiver of a past  default,  and  payment  to the  Trustee  of all
reasonable  costs and expenses  incurred by the Trustee in connection  with such
default  and  prior to its  waivers  (which  costs  shall  be paid by the  party
requesting  such  waiver) 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.


                                      143
<PAGE>



                                  ARTICLE VIII.
                                  -------------

                             CONCERNING THE TRUSTEE

          Section 8.1.   Duties of Trustee.
                         -----------------

     (a) 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,  undertakes to perform
such duties and only such duties as are specifically set forth in this Agreement
and no permissive right of the Trustee shall be construed as a duty.  During the
continuance of an Event of Default of which a Responsible Officer of the Trustee
has actual  knowledge,  the Trustee shall exercise such of the rights and powers
vested  in it by this  Agreement,  and use the same  degree of care and skill in
their   exercise,   as  a  prudent  person  would  exercise  or  use  under  the
circumstances in the conduct of such person's own affairs.

(b) The Trustee,  upon  receipt of any  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
conform on their face to the requirements of this Agreement;  provided, however,
that,  the Trustee shall not be  responsible  for the accuracy or content of any
such resolution,  certificate,  statement,  opinion,  report, document, order or
other instrument  provided to it hereunder by the Master  Servicer,  the Special
Servicer, the Depositor or the Paying Agent. If any such instrument is found not
to  conform  on its face to the  requirements  of this  Agreement  in a material
manner,  the Trustee  shall  report  such  finding to the  presenting  party and
request a correction of such instrument.

(c) No  provision  of this  Agreement  shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful  misconduct;  provided,  however,  that the  foregoing  shall be
subject to Section 8.2; and provided, further, that:

(i)  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 such Events of Default which may have occurred,  the duties and  obligations
of the Trustee  shall be  determined  solely by the express  provisions  of this
Agreement,  the Trustee shall not be liable except for the  performance  of such
duties and  obligations  as are  specifically  set forth in this  Agreement,  no
implied  covenants or obligations  shall be read into this Agreement against the
Trustee and, in the absence of bad faith on the part of the Trustee, the Trustee
may conclusively  rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any resolutions,  certificates, statements,
reports,  opinions,  documents,  orders or other  instruments  furnished  to the
Trustee that conform on their face to the requirements of this Agreement without
responsibility for investigating the contents thereof;

(ii) The Trustee  shall not be  personally  or otherwise  liable for an error of
judgment made in good faith by a Responsible  Officer or  Responsible  Officers,
unless it shall be proven that the Trustee was  negligent  in  ascertaining  the
pertinent facts;

(iii) The Trustee shall not be  personally  or otherwise  liable with respect to
any  action  taken,  suffered  or  omitted  to be taken  by it in good  faith in
accordance with the direction of Holders of Certificates  entitled to a majority
of the aggregate Voting Rights (or such

                                      144
<PAGE>


other  percentage  as is specified  herein) of each  affected  Class,  or of the
aggregate Voting Rights of the  Certificates,  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;

     (iv) Except as provided in the succeeding  sentence,  the Trustee shall not
be charged  with  knowledge  of any failure by the  Depositor to comply with the
obligations of the Depositor  hereunder or any failure of the Master Servicer or
the Special  Servicer to comply with the  obligations of the Master  Servicer or
the Special  Servicer  referred to in clause (i), (ii), (iii) or (ix) of Section
7.1, or of any breach or occurrence referred to in clause (iii) through (vii) of
Section  7.1, as the case may be,  unless a  Responsible  Officer of the Trustee
obtains  actual  knowledge of such failure,  breach or  occurrence.  The Trustee
shall be deemed to have actual  knowledge  of the Master  Servicer's  failure to
comply  with its  obligations  listed in clause  (i)  (except  with  respect  to
remittances  to the  Collection  Account) and (viii) of Section 7.1 (except with
respect to Servicing Advances) or to provide scheduled reports, certificates and
statements when and as required to be delivered to the Trustee  pursuant to this
Agreement; and

     (v) The Trustee and the Fiscal Agent shall not be under any  obligation  to
appear in prosecute or defend any legal action which is not  incidental to their
respective  duties as Trustee and Fiscal Agent in accordance with this Agreement
(and,  if either  does,  all legal  expenses  and costs of such action  shall be
expenses and costs of the Trust Fund, and the Trustee and the Fiscal Agent shall
be entitled to be reimbursed therefor from the Collection  Account,  unless such
legal  action  arises out of the  negligence  or bad faith of the Trustee or the
Fiscal Agent, as the case may be, or any breach of a representation, warranty or
covenant  of the  Trustee or the  Fiscal  Agent,  as the case may be,  contained
herein).

      The Trustee,  in its capacity as Trustee,  shall not be required to expend
or risk its own funds or otherwise incur financial  liability in the performance
of any of its  duties  hereunder,  or in the  exercise  of any of its  rights or
powers,  if in the  Trustee's  opinion the  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 Master Servicer, the Special Servicer or the Depositor
under this  Agreement or 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 Master  Servicer,  the Special  Servicer or the Depositor in accordance with
the terms of this  Agreement.  The  Trustee  shall not be  required  to post any
surety or bond of any kind in connection with its performance of its obligations
under this Agreement.

          Section 8.2.   Certain Matters Affecting the Trustee.
                         -------------------------------------

     (a)   Except as otherwise provided in Section 8.1:

          (i) The Trustee may request and/or rely upon and shall be protected in
acting or refraining  from acting upon any  resolution,  Officer's  Certificate,
certificate  of  auditors  or  any  other  certificate,  statement,  instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other paper
or document  reasonably  believed by it to be genuine and to have been signed or
presented  by the  proper  party  or  parties  and  the  Trustee  shall  have no
responsibility  to  ascertain  or confirm the  genuineness  of any such party or
parties;

          (ii) The Trustee  may consult  with  counsel  and any  memorandum  or

Opinion of Counsel shall be full and complete  authorization  and  protection in
respect of any

                                      145
<PAGE>


action  taken or  suffered  or  omitted  by it  hereunder  in good  faith and in
accordance with such memorandum or Opinion of Counsel;

          (iii) (A) 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 any of the Certificateholders,  pursuant to the provisions
of this  Agreement,  unless such  Certificateholders  shall have  offered to the
Trustee  reasonable  security  or  indemnity  against  the costs,  expenses  and
liabilities  which may be  incurred  therein  or  thereby;  (B) the right of the
Trustee to perform any  discretionary act enumerated in this Agreement shall not
be construed as a duty,  and the Trustee shall not be answerable  for other than
its  negligence  or  willful  misconduct  in the  performance  of any such  act;
provided,  however,  that subject to the foregoing clause (A), nothing contained
herein shall relieve the Trustee of the  obligations,  upon the occurrence of an
Event of Default  (which  has not been  cured or waived) of which a  Responsible
Officer of the Trustee has actual knowledge,  to exercise such of the rights and
powers  vested in it by this  Agreement;  and to use the same degree of care and
skill in their  exercise,  as a prudent  person would  exercise or use under the
circumstances in the conduct of such person's own affairs.

          (iv) The Trustee  shall not be  personally  or  otherwise  liable for
any  action  taken,  suffered  or  omitted  by it in good  faith and  reasonably
believed by it to be  authorized  or within the  discretion  or rights or powers
conferred upon it by this Agreement;

          (v) The Trustee shall not be bound to make any  investigation  into
the  facts  or  matters  stated  in  any  resolution,   certificate,  statement,
instrument,  opinion, report, notice, request,  consent, order, approval bond or
other  paper or  document,  unless  requested  in writing to do so by Holders of
Certificates  entitled to a majority (or such other  percentage  as is specified
herein) of the aggregate Voting Rights of any affected Class; provided, however,
that if the  payment  within a  reasonable  time to the  Trustee  of the  costs,
expenses  or  liabilities  likely  to be  incurred  by it in the  making of such
investigation is, in the opinion of the Trustee,  not reasonably  assured to the
Trustee  by the  security  afforded  to it by the terms of this  Agreement,  the
Trustee may require reasonable  indemnity against such expense or liability as a
condition  to taking  any such  action.  The  reasonable  expense  of every such
investigation shall be paid by the Master Servicer or the Special Servicer if an
Event of Default shall have  occurred and be  continuing  relating to the Master
Servicer  or  the  Special   Servicer,   respectively,   and  otherwise  by  the
Certificateholders requesting the investigation; and

          (vi) The Trustee may  execute any of the trusts or powers  hereunder
or perform  any duties  hereunder  either  directly  or by or through  agents or
attorneys,  provided  that the Trustee  shall not  otherwise  be relieved of its
duties and obligations hereunder.

     (b) 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.

     The Trustee shall have no duty to conduct any affirmative  investigation as
to the occurrence of any condition requiring the repurchase of any Mortgage Loan
by the Depositor  pursuant to this Agreement or the  eligibility of any Mortgage
Loan for purposes of this Agreement.


                                      146

<PAGE>



          Section 8.3.   Trustee Not Liable for Certificates or Mortgage Loans.
                         -----------------------------------------------------

      The recitals  contained herein and in the Certificates  shall not be taken
as the statements of the Trustee,  the Fiscal Agent,  the Master Servicer or the
Special Servicer and the Trustee, the Fiscal Agent, the Special Servicer and the
Master Servicer assume no responsibility for their correctness. The Trustee, the
Fiscal   Agent,   the  Master   Servicer  and  the  Special   Servicer  make  no
representations  or  warranties  as to  the  validity  or  sufficiency  of  this
Agreement,  of  the  Certificates,   or  any  private  placement  memorandum  or
prospectus   used  to  offer  the   Certificates   for  sale  or  the  validity,
enforceability  or  sufficiency  of any Mortgage Loan or related  document.  The
Trustee  and the  Fiscal  Agent  shall  at no time  have any  responsibility  or
liability for or with respect to the legality,  validity and  enforceability  of
any  Mortgage  or any  Mortgage  Loan,  or the  perfection  and  priority of any
Mortgage or the maintenance of any such perfection and priority,  or for or with
respect to the  sufficiency  of the Trust Fund or its  ability to  generate  the
payments to be distributed to Certificateholders  under this Agreement.  Without
limiting the foregoing, neither the Trustee nor the Fiscal Agent shall be liable
or  responsible  for: the  existence,  condition  and ownership of any Mortgaged
Property;  the existence of any hazard or other  insurance  thereon (other than,
with respect to the Trustee  only, if the Trustee shall assume the duties of the
Master  Servicer  pursuant to Section 7.2) or the  enforceability  thereof;  the
existence of any Mortgage  Loan or the contents of the related  Mortgage File on
any computer or other record  thereof  (other than,  with respect to the Trustee
only,  if the  Trustee  shall  assume the duties of the Master  Servicer  or the
Special Servicer pursuant to Section 7.2); the validity of the assignment of any
Mortgage  Loan  to  the  Trust  Fund  or  of  any  intervening  assignment;  the
completeness  of any  Mortgage  File;  the  performance  or  enforcement  of any
Mortgage  Loan (other  than,  with respect to the Trustee  only,  if the Trustee
shall assume the duties of the Master Servicer or the Special Servicer  pursuant
to Section 7.2);  the compliance by the  Depositor,  the Master  Servicer or the
Special Servicer with any warranty or  representation  made under this Agreement
or  in  any  related   document  or  the  accuracy  of  any  such   warranty  or
representation  prior to the Trustee's  receipt of notice or other  discovery of
any non-compliance  therewith or any breach thereof; any investment of monies by
or at the direction of the Master  Servicer or the Special  Servicer or any loss
resulting  therefrom  (other  than,  with  respect to the Trustee  only,  if the
Trustee shall assume the duties of the Master  Servicer or the Special  Servicer
pursuant to Section 7.2), it being understood that the Trustee only shall remain
responsible  for any  Trust  Fund  property  that it may hold in its  individual
capacity; the acts or omissions of any of the Depositor,  the Master Servicer or
the Special  Servicer  (other  than,  with respect to the Trustee  only,  if the
Trustee shall assume the duties of the Master  Servicer or the Special  Servicer
pursuant to Section 7.2) or any Sub-Servicer or any Borrower;  any action of the
Master Servicer or the Special Servicer (other than, with respect to the Trustee
only,  if the  Trustee  shall  assume the duties of the Master  Servicer  or the
Special Servicer pursuant to Section 7.2) or any Sub-Servicer  taken in the name
of the Trustee, except with respect to the Trustee, to the extent such action is
taken at the express written direction of the Trustee; the failure of the Master
Servicer or the Special  Servicer  (other than in each case, with respect to the
Trustee only,  if the Trustee shall assume the duties of the Master  Servicer or
the Special  Servicer  pursuant to Section  7.2) or any  Sub-Servicer  to act or
perform  any duties  required  of it on behalf of the Trust Fund or the  Trustee
hereunder;  or any action by or omission of the Trustee taken at the instruction
of the Master  Servicer or the Special  Servicer  (other than in each case, with
respect to the  Trustee  only,  if the  Trustee  shall  assume the duties of the
Master  Servicer or the  Special  Servicer  pursuant to Section  7.2) unless the
taking of such action is not permitted by the express  terms of this  Agreement;
provided,  however,  that the  foregoing  shall not  relieve  the Trustee or the
Fiscal Agent of its obligation to perform its duties


                                      147
<PAGE>

as specifically  set forth in this  Agreement.  The Trustee and the Fiscal Agent
shall not be accountable for the use or application by the Depositor, the Master
Servicer or the Special  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
Depositor,  the  Master  Servicer  or the  Special  Servicer  in  respect of the
Mortgage Loans or deposited in or withdrawn from the Collection  Account, or the
Distribution  Account by the  Depositor,  the  Master  Servicer  or the  Special
Servicer,  other than in each case,  with respect to the Trustee only, any funds
held by the  Trustee.  The Trustee  (unless  the  Trustee  shall have become the
successor Master Servicer) or the Fiscal Agent shall have no responsibility  for
(A) 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 or to record this  Agreement,  (B) seeing to any
insurance,  (C) seeing to the payment or  discharge of any tax,  assessment,  or
other  governmental  charge or any lien or  encumbrance  of any kind  owing with
respect  to,  assessed  or levied  against  any part of the Trust  Fund,  or (D)
confirming  or  verifying  the  contents of any reports or  certificates  of the
Master Servicer  delivered to the Trustee pursuant to this Agreement believed by
the  Trustee to be genuine and to have been  signed or  presented  by the proper
party or  parties.  In making any  calculation  hereunder  which  includes  as a
component thereof the payment or distribution of interest for a stated period at
a stated rate "to the extent  permitted by  applicable  law," the Trustee  shall
assume that such payment is so  permitted  unless a  Responsible  Officer of the
Trustee has actual knowledge,  or receives an Opinion of Counsel (at the expense
of the Person asserting the  impermissibility)  to the effect, that such payment
is not permitted by applicable law.

          Section 8.4.   Trustee May Own Certificates.
                         ----------------------------

      The Trustee and the Fiscal  Agent in their  individual  capacities  or any
other  capacity  may become the owner or pledgee of  Certificates,  and may deal
with the  Depositor,  the Master  Servicer  and the Special  Servicer in banking
transactions,  with the same  rights  each would have if it were not  Trustee or
Fiscal Agent.

          Section 8.5.   Payment of Trustee Fees and Expenses; Indemnification.
                         -----------------------------------------------------

     (a) The  Master  Servicer  shall  pay from the  Collection  Account  to the
Trustee  or any  successor  Trustee  from time to time,  and the  Trustee or any
successor  Trustee shall be entitled to receive from the  Collection  Account on
each  Remittance  Date 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 the Trustee 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 Trustee shall pay the routine fees and expenses of
the   Certificate   Registrar,   the  Paying   Agent,   the  Custodian  and  the
Authenticating  Agent.  The  Trustee's  rights  to the  Trustee  Fee  may not be
transferred in whole or in part except in connection with the transfer of all of
the Trustee's responsibilities and obligations under this Agreement.

     (b) Except as otherwise provided herein, the Trustee shall pay all expenses
incurred by it in connection with its activities hereunder.  The Master Servicer
and the Special Servicer  covenant and agree to pay or reimburse the Trustee for
the  reasonable  expenses,  disbursements  and advances  incurred or made by the
Trustee in connection with any transfer of the servicing responsibilities of the
Master Servicer or the Special Servicer, as applicable hereunder, pursuant to or
otherwise arising from the resignation or removal of the Master

<PAGE>


Servicer or the Special Servicer,  as applicable,  in accordance with any of the
provisions of this Agreement (and including the reasonable fees and expenses and
disbursements of its counsel and all other persons not regularly in its employ),
except  any  such  expense,  disbursement  or  advance  as may  arise  from  the
negligence or bad faith of the Trustee.

     (c) Each of the Master  Servicer and the Special  Servicer shall  indemnify
the Trustee and the Fiscal Agent and their respective Affiliates and each of the
directors,  officers,  employees and agents of the Trustee, the Fiscal Agent and
their respective  Affiliates  (each, an "Indemnified  Party"),  and hold each of
them harmless against, any and all claims, losses,  damages,  penalties,  fines,
forfeitures,  reasonable legal fees and related costs, judgments,  and any other
costs,  fees and expenses that the  Indemnified  Party may sustain in connection
with this Agreement (including without limitation any liability, cost or expense
arising  from  the  Master  Servicer's  or  Special   Servicer's   negligent  or
intentional  misuse of any power of attorney granted pursuant to Section 3.1(a))
related to each such party's respective willful  misconduct,  bad faith,  and/or
negligence in the performance of its respective duties hereunder or by reason of
negligent   disregard  of  its  respective   obligations  and  duties  hereunder
(including in the case of the Master Servicer or the Special Servicer, any agent
of the Master Servicer or the Special Servicer).

     (d) The Trust Fund shall indemnify each Indemnified Party from, and hold it
harmless against, any and all losses,  liabilities,  damages, claims or expenses
(including  reasonable  attorneys' fees) arising in respect of this Agreement or
the  Certificates,  in each case to the  extent,  and only to the  extent,  such
payments are  "unanticipated  expenses incurred by the REMIC" within the meaning
of  Treasury  Regulation  Section  1.860G-1(b)(3)(ii),   other  than  (i)  those
resulting from the negligence,  bad faith or willful  misconduct of the Trustee,
(ii) those  specifically  required  to be borne  thereby  pursuant  to the terms
hereof, including,  without limitation,  pursuant to Section 10.3(c) and Section
10.5  and  (iii)  those  as  to  which  such  Indemnified   Party  has  received
indemnification  payments  pursuant to Section  8.5(c)  within 30 days after the
request therefor.  The term  "unanticipated  expenses incurred by a REMIC" shall
include  any  fees,  expenses  and  disbursements  of any  separate  trustee  or
co-trustee  appointed  hereunder,  only to the extent  such fees,  expenses  and
disbursements  were not  reasonably  anticipated  as of the Closing Date and the
losses,   liabilities,   damages,   claims  or  expenses  (including  reasonable
attorneys' fees) incurred or advanced by an Indemnified Party in connection with
any litigation  arising out of this Agreement,  including,  without  limitation,
under  Section 2.3,  Section 7.1,  Section 8.11 and Section  10.3.  The right of
reimbursement  of the  Indemnified  Parties  under this Section  8.5(d) shall be
senior  to the  rights of all  Certificateholders.  The  foregoing  shall not be
deemed to preclude an Indemnified Party from being reimbursed for any such loss,
liability or expense otherwise reimbursable pursuant to this Agreement.

     (e) Notwithstanding anything herein to the contrary, this Section 8.5 shall
survive the  termination  or maturity of this  Agreement or the  resignation  or
removal of the Trustee and the Fiscal Agent as regards  rights  accrued prior to
such  resignation  or removal and (with respect to any acts or omissions  during
their respective tenures) the resignation,  removal or termination of the Master
Servicer or the Special Servicer.

     (f) This  Section 8.5 shall be expressly  construed to include,  but not be
limited to, such indemnities,  compensation, expenses, disbursements,  advances,
losses,  liabilities,  damages  and the like,  as may  pertain  or relate to any
environmental law or environmental matter.

                                      149

<PAGE>



          Section 8.6.   Eligibility Requirements for Trustee.
                         ------------------------------------

      The  Trustee  hereunder  shall  at all  times  be a bank,  trust  company,
corporation  or  association  organized and doing business under the laws of the
United  States of  America,  any state  thereof,  or the  District  of  Columbia
authorized under such laws to exercise  corporate trust powers and to accept the
trust conferred under this Agreement,  having a combined  capital and surplus of
at least  $100,000,000 and a rating on its unsecured senior long-term debt of at
least "AA" by Fitch or "Aa2" by Moody's  (unless a Fiscal Agent is appointed and
acting  hereunder that has a long-term  senior  unsecured debt rating that is at
least "AA" (without  regard to any plus or minus) by Fitch or "Aa2" by Moody's),
unless a Rating Agency  Confirmation  is obtained with respect to a lower rating
(the cost, if any, of obtaining such confirmation to be paid by the Trustee) and
subject to supervision  or  examination by federal or state  authority and shall
not be an  Affiliate  of the Master  Servicer  or the Special  Servicer  (except
during any period when the Trustee has assumed the duties of the Master Servicer
or the Special Servicer,  as applicable,  pursuant to Section 7.2). In addition,
the  Trustee  shall at all times  meet the  requirements  of Rule  3a-7(a)(4)(i)
promulgated  under  the  Investment  Company  Act  of  1940,  as  amended.  If a
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 purposes of this Section the combined capital and surplus of
such  corporation  shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In the event that the
place of business from which the Trustee  administers  the Trust Fund is a state
or local  jurisdiction that imposes a tax on the Trust Fund or the net income of
a REMIC  (other  than a tax  corresponding  to a tax  imposed  under  the  REMIC
Provisions)  the Trustee  shall  elect,  at its sole  discretion,  either to (i)
resign  immediately in the manner and with the effect  specified in Section 8.7,
(ii) pay such tax and  continue  as Trustee or (iii)  administer  the Trust Fund
from a state and local  jurisdiction that does not impose such a tax. 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 8.7.

          Section 8.7.   Resignation and Removal of the Trustee.
                         --------------------------------------

      The  Trustee  may at any time  resign  and be  discharged  from the trusts
hereby created by giving  written  notice  thereof to the Depositor,  the Master
Servicer,  the Special  Servicer,  the Operating Adviser and each Rating Agency.
Upon such notice of  resignation,  the Fiscal Agent shall also be  automatically
removed and, accordingly, the Master Servicer shall promptly appoint a successor
Trustee,  which  appointment  of successor  Trustee shall be subject to a Rating
Agency  Confirmation,  and a successor  Fiscal  Agent,  which,  if the successor
Trustee is not rated by each Rating  Agency in one of its two highest  long-term
unsecured debt rating categories, the successor Fiscal Agent shall be subject to
a Rating Agency  Confirmation.  The appointment shall be by a written instrument
executed in  triplicate,  which  instrument  shall be delivered to the resigning
Trustee,  with a copy to the removed Fiscal Agent and the successor  Trustee and
successor   Fiscal  Agent.   The  cost,  if  any,  of  obtaining  the  foregoing
confirmations  shall be paid by the  resigning  Trustee and the  removed  Fiscal
Agent.  Notwithstanding the foregoing,  if no successor Trustee and Fiscal Agent
shall have been so appointed and have accepted  appointment within 30 days after
the giving of such notice of  resignation,  the resigning  Trustee and departing
Fiscal  Agent  may  petition  any  court  of  competent   jurisdiction  for  the
appointment of a successor Trustee and successor Fiscal Agent.

                                      150

<PAGE>


      If at any time the Trustee shall cease to be eligible in  accordance  with
the  provisions  of Section 8.6 and shall fail to resign after  written  request
therefor by the Depositor or Master  Servicer,  or if at any time the Trustee or
the Fiscal Agent shall become incapable of acting, or shall be adjudged bankrupt
or  insolvent,  or a  receiver  of the  Trustee  or the  Fiscal  Agent or of its
property shall be appointed,  or any public officer shall take charge or control
of the Trustee or the Fiscal Agent or of its property or affairs for the purpose
of  rehabilitation,  conservation or liquidation or the Master Servicer receives
notice  from  Fitch  that the  Trustee  is no  longer  eligible  and may cause a
downgrade or withdrawal  of the current  ratings  assigned to the  Certificates,
then the  Depositor  or the Master  Servicer  shall  remove the  Trustee and the
Fiscal Agent and shall promptly appoint a successor Trustee and successor Fiscal
Agent by written  instrument,  which shall be  delivered  to the Trustee and the
Fiscal Agent so removed and to the successor Trustee and successor Fiscal Agent.

      The Holders of  Certificates  entitled to a majority of the Voting  Rights
may at any time remove the Trustee and the Fiscal  Agent (and any removal of the
Trustee shall cause the Fiscal Agent to be automatically  removed) and appoint a
successor  Trustee and successor  Fiscal Agent (each meeting the requirements of
Section 8.8) by written instrument or instruments, in seven originals, signed by
such Holders or their  attorneys-in-fact  duly  authorized,  one complete set of
which instruments  shall be delivered to the Depositor,  one complete set to the
Master Servicer,  one complete set to the Special Servicer,  one complete set to
the Trustee so  removed,  one  complete  set to the removed  Fiscal  Agent,  one
complete set to the  successor  Trustee so appointed and one complete set to the
successor  Fiscal Agent so appointed.  Such removal of the Trustee and/or Fiscal
Agent, if without cause,  shall be effective upon the payment to the Trustee and
the  Fiscal  Agent of all  reasonable  costs and  expenses  incurred  by them in
connection  with such removal (which costs shall be paid as an Additional  Trust
Fund Expense).

      In the event of the  resignation  or  removal of the  Trustee,  the Fiscal
Agent shall be entitled to resign,  it being  understood that the initial Fiscal
Agent shall not be obligated to act in such capacity  hereunder at any time that
LaSalle Bank National Association is not the Trustee.

      Any resignation or removal of the Trustee and Fiscal Agent and appointment
of a successor  Trustee and, if such trustee is not rated by each Rating  Agency
in one of  its  two  highest  long-term  unsecured  debt  rating  categories,  a
successor  Fiscal Agent  pursuant to any of the  provisions  of this Section 8.7
shall not become  effective  until  acceptance of  appointment  by the successor
Trustee and, if necessary, Fiscal Agent as provided in Section 8.8.

          Section 8.8.   Successor Trustee.
                         -----------------

      Any successor Trustee and any successor Fiscal Agent appointed as provided
in Section 8.7 shall  execute,  acknowledge  and deliver to the Depositor and to
the  predecessor  Trustee  and  predecessor  Fiscal  Agent,  as the case may be,
instruments accepting their appointment hereunder, and thereupon the resignation
or removal of the predecessor  Trustee and predecessor Fiscal Agent shall become
effective and such  successor  Trustee and successor  Fiscal Agent,  without any
further act, deed or conveyance,  shall become fully vested with all the rights,
powers,  duties and  obligations  of its  predecessor  hereunder,  with the like
effect as if originally  named as Trustee herein,  provided that a Rating Agency
Confirmation has been obtained with respect to the appointment of such successor
Trustee  and  successor  Fiscal  Agent.  The cost,  if any,  of  obtaining  such
confirmation shall be paid by the Trustee that resigned or was removed,


                                      151
<PAGE>


unless the  Trustee  was removed  without  cause by the Holders of  Certificates
entitled to a majority of the Voting  Rights,  in which case such costs shall be
an Additional Trust Fund Expense.  The predecessor  Trustee shall deliver to the
successor  Trustee all Mortgage Files and related  documents and statements held
by it hereunder (at the expense of the Trust Fund if removal of the  predecessor
Trustee was without  cause),  and the  Depositor,  the  predecessor  Trustee and
predecessor  Fiscal Agent 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 and  successor  Fiscal Agent all such
rights, powers, duties and obligations. No successor Trustee or successor Fiscal
Agent shall  accept  appointment  as provided in this  Section 8.8 unless at the
time of such acceptance such successor  Trustee or successor  Fiscal Agent shall
be eligible under the provisions of Section 8.6.

      Upon acceptance of appointment by a successor  Trustee or successor Fiscal
Agent as provided in this Section 8.8, the  successor  Trustee shall mail notice
of the  succession of such Trustee and Fiscal Agent  hereunder to all Holders of
Certificates at their addresses as shown in the Certificate Register.

          Section 8.9.   Merger or Consolidation of Trustee.
                         ----------------------------------

      Any corporation  into which the Trustee may be merged or converted or with
which it may be  consolidated  or any  corporation  resulting  from any  merger,
conversion  or  consolidation  to which  the  Trustee  shall be a party,  or any
corporation  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 corporation shall be eligible under the provisions of Section
8.6 and a Rating Agency Confirmation has been obtained, 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.  Any  Person  into which the
Fiscal Agent may be merged or converted or with which it may be  consolidated or
any corporation or bank resulting from any merger,  conversion or  consolidation
to which the  Fiscal  Agent  shall be a party,  or any  corporation  or  banking
association  succeeding  to all or  substantially  all  of the  corporate  trust
business  of the  Fiscal  Agent  shall  be the  successor  of the  Fiscal  Agent
hereunder,  provided that such  corporation  or bank shall be eligible under the
provisions  of Section  8.6 and a Rating  Agency  Confirmation  has be  obtained
without the  execution  or filing of any paper or any farther act on the part of
any of the parties hereto, anything to the contrary notwithstanding.

          Section 8.10.  Appointment of Co-Trustee or Separate Trustee.
                         ---------------------------------------------

      Notwithstanding  any other provisions hereof, at any time, for the purpose
of meeting any legal  requirements of any  jurisdiction in which any part of the
Trust  Fund or  property  securing  the  same may at the  time be  located,  the
Depositor and the Trustee  acting jointly shall have the power and shall execute
and  deliver all  instruments  to appoint  one or more  Persons  approved by the
Trustee to act (at the expense of the  Trustee) as  co-trustee  or  co-trustees,
jointly with the Trustee,  or separate trustee or separate  trustees,  of all or
any part of the  Trust  Fund,  and to vest in such  Person or  Persons,  in such
capacity, such title to the Trust Fund, or any part thereof, and, subject to the
other provisions of this Section 8.10, such powers, duties, obligations,  rights
and trusts as the Depositor and the Trustee may consider necessary or desirable.
If the  Depositor  shall no longer be in  existence  or shall not have joined in
such  appointment  within 15 days after the receipt by it of a request so to do,
or in case an Event of Default shall have occurred and be


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<PAGE>


continuing,  the Trustee  alone  shall have the power to make such  appointment.
Except as required  by  applicable  law,  the  appointment  of a  co-trustee  or
separate  trustee  shall  not  relieve  the  Trustee  of  its   responsibilities
hereunder. No co-trustee or separate trustee hereunder shall be required to meet
the terms of eligibility as a successor  Trustee under Section 8.6 hereunder and
no notice to Holders of  Certificates  of the  appointment of  co-trustee(s)  or
separate trustee(s) shall be required under Section 8.8.

      In the  case  of any  appointment  of a  co-trustee  or  separate  trustee
pursuant to this  Section  8.10,  all  rights,  powers,  duties and  obligations
conferred  or imposed  upon the Trustee  shall be  conferred or imposed upon and
exercised or performed by the Trustee and such  separate  trustee or  co-trustee
jointly (it being  understood  that such  separate  trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act), except to
the extent that under any law of any jurisdiction in which any particular act or
acts are to be  performed  (whether as Trustee  hereunder or as successor to the
Master Servicer  hereunder),  the Trustee shall be incompetent or unqualified to
perform  such act or acts,  in which  event  such  rights,  powers,  duties  and
obligations  (including  the  holding of title to the Trust Fund or any  portion
thereof in any such  jurisdiction)  shall be  exercised  and  performed  by such
separate trustee or co-trustee solely at the direction of the Trustee.

      No trustee under this  Agreement  shall be personally  liable by reason of
any act or omission of any other trustee under this Agreement. The Depositor and
the Trustee acting  jointly may at any time accept the  resignation of or remove
any separate trustee or co-trustee, except that if the Depositor is no longer in
existence,  or if the  separate  trustee or  co-trustee  is an  employee  of the
Trustee,  the Trustee  acting alone may accept the  resignation of or remove any
separate trustee or co-trustee.

      Any notice,  request or other writing given to the Trustee shall be deemed
to have been given to each of the then  separate  trustees and  co-trustees,  as
effectively  as if  given  to each of  them.  Every  instrument  appointing  any
separate  trustee or co-trustee shall refer to this Agreement and the conditions
of this Article  VIII.  Every such  instrument  shall be filed with the Trustee.
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.  In no
event shall any such separate trustee or co-trustee be entitled to any provision
relating to the conduct of, affecting the liability of, or affording  protection
to such separate  trustee or co-trustee  that imposes a standard of conduct less
stringent  than  that  imposed  on  the  Trustee  hereunder,  affording  greater
protection  than that  afforded to the Trustee  hereunder or providing a greater
limit on liability than that provided to the Trustee hereunder.

      Any  separate  trustee or  co-trustee  may,  at any time,  constitute  the
Trustee its agent or  attorney-in-fact,  with full power and  authority,  to the
extent not  prohibited  by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name.  If any separate  trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts hereunder shall vest in and be exercised
by the Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.


                                      153

<PAGE>



          Section 8.11.  Authenticating Agent.
                         --------------------

      The  Trustee  may  appoint  an  Authenticating  Agent  to  execute  and to
authenticate  Certificates.  The Authenticating  Agent must be acceptable to the
Depositor and the Master Servicer and must be a corporation  organized and doing
business  under the laws of the United States of America or any state,  having a
principal  office and place of  business in a state and city  acceptable  to the
Depositor and the Master  Servicer,  having a combined capital and surplus of at
least $15,000,000, authorized under such laws to do a trust business and subject
to supervision or examination by federal or state authorities. The Trustee shall
pay the Authenticating Agent reasonable  compensation from its own funds and the
Trustee  shall  remain  liable for all actions of any  Authenticating  Agent and
shall not be relieved of any of its  obligations  hereunder.  The Trustee  shall
serve as the initial  Authenticating  Agent and the Trustee  hereby accepts such
appointment.

      Any  corporation  into  which  the  Authenticating  Agent may be merged or
converted or with which it may be  consolidated,  or any  corporation  resulting
from any merger,  conversion or consolidation to which the Authenticating  Agent
shall be party, or any corporation  succeeding to the corporate  agency business
of the  Authenticating  Agent,  shall 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.

      The  Authenticating  Agent  may at any time  resign  by giving at least 30
days' advance written notice of resignation to the Trustee,  the Depositor,  the
Special Servicer and the Master Servicer.  The Trustee may at any time terminate
the agency of the  Authenticating  Agent by giving written notice of termination
to the Authenticating Agent, the Depositor,  the Special Servicer and the Master
Servicer. Upon receiving a notice of resignation or upon such a termination,  or
in case at any time the  Authenticating  Agent  shall  cease to be  eligible  in
accordance with the provisions of this Section 8.11, the Trustee  promptly shall
appoint a  successor  Authenticating  Agent,  which shall be  acceptable  to the
Master Servicer and the Depositor,  and shall mail notice of such appointment to
all  Certificateholders.  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 herein.  No successor  Authenticating
Agent shall be appointed  unless  eligible  under the provisions of this Section
8.11.

      The Authenticating Agent shall have no responsibility or liability for any
action taken by it as such at the  direction of the Trustee.  The Trustee  shall
pay the Authenticating Agent reasonable compensation from its own funds.

          Section 8.12.  Appointment of Custodians.
                         -------------------------

     (a) The  Trustee  shall  serve as the  initial  Custodian.  The Trustee may
appoint  one or more  third  party  Custodians  to hold all or a portion  of the
Mortgage Files as agent for the Trustee, by entering into a Custodial Agreement.
The Trustee agrees to comply with the terms of each  Custodial  Agreement and to
enforce the terms and provisions  thereof  against the Custodian for the benefit
of the  Certificateholders.  Each  Custodial  Agreement  may be amended  only as
provided  in  Section  11.7.  The  Trustee  shall pay the  Custodian  reasonable
compensation from its


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<PAGE>


own funds and the Trustee  shall remain  liable for all actions of any Custodian
and shall not be relieved of any of its obligations hereunder.

     (b) Each Custodian shall be a depository institution subject to supervision
by federal or state  authority,  shall have a combined capital and surplus of at
least  $10,000,000,  shall have a long-term  senior  unsecured debt rating of at
least "Baa2" from Moody's, unless a Rating Agency Confirmation has been obtained
from Moody's (the cost, if any, of obtaining such confirmation to be paid by the
Trustee;  provided  that such  appointment  was made by the  Trustee in its sole
discretion  and  otherwise  by the Trust  Fund),  and shall be  qualified  to do
business in the jurisdiction in which it holds any Mortgage File.

     (c) Each  Custodian  shall maintain a fidelity bond and shall keep in force
during the term of this  Agreement a policy or policies  of  insurance  covering
loss  occasioned  by the errors and  omissions of its officers and  employees in
connection  with its obligations  hereunder.  All fidelity bonds and policies of
errors and  omissions  insurance  obtained  under this Section  8.12(c) shall be
issued by a Qualified  Insurer.  Each Custodian shall be deemed to have complied
with the  requirement  for a  fidelity  bond if one of its  Affiliates  has such
fidelity bond coverage  and, by the terms of such  fidelity  bond,  the coverage
afforded thereunder extends to the Custodian.  Notwithstanding the foregoing, so
long  as the  long-term  unsecured  debt  obligations  of the  Custodian  or its
corporate  parent  have been  rated "A" or better by Fitch and "A2" or better by
Moody's,  the Custodian  shall be entitled to provide  self-insurance  or obtain
from its corporate parent adequate insurance, as applicable, with respect to its
obligation  hereunder  to  maintain a fidelity  bond or an errors and  omissions
insurance policy.

          Section 8.13.  Fiscal Agent Appointed; Concerning the Fiscal Agent.
                         ---------------------------------------------------

     (a) The Trustee  hereby  appoints ABN AMRO Bank N.V. as the initial  Fiscal
Agent  hereunder for the purposes of exercising and  performing the  obligations
and duties imposed upon the Fiscal Agent by Sections 3.22 and 4.5.

     (b) The Fiscal Agent undertakes to perform such duties and only such duties
as are specifically set forth in Sections 3.22 and 4.5.

     (c) No provision of this Agreement shall be construed to relieve the Fiscal
Agent from liability for its own negligent  failure to act, bad faith or its own
willful misfeasance;  provided,  however, that (i) the duties and obligations of
the  Fiscal  Agent  shall be  determined  solely by the  express  provisions  of
Sections  3.22 and 4.5,  the  Fiscal  Agent  shall not be liable  except for the
performance of such duties and obligations,  no implied covenants or obligations
shall be read into this  Agreement  against the Fiscal Agent and, in the absence
of bad faith on the part of the Fiscal Agent,  the Fiscal Agent may conclusively
rely, as to the truth and correctness of the statements or conclusions expressed
therein,  upon any resolutions,  certificates,  statements,  opinions,  reports,
documents,  orders or other  instruments  furnished  to the Fiscal  Agent by any
Person  and  which on their  face do not  contradict  the  requirements  of this
Agreement,  and (ii) the  provisions of clauses (ii) and (iv) of Section  8.1(c)
shall apply to the Fiscal Agent.

     (d) Except as otherwise  provided in Section 8.1(c),  the Fiscal Agent also
shall have the benefit of provisions of clauses (i), (ii), (iii) (other than the
proviso thereto), (iv), (v) (other than the proviso thereto) and (vi) of Section
8.2(a).

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<PAGE>


          Section 8.14.  Representations and Warranties of the Trustee and
                         -------------------------------------------------
Fiscal Agent.
------------

     (a) The Trustee  hereby  represents,  warrants and covenants that as of the
Closing Date:

          (i) The  Trustee is a national  banking  association,  duly organized,
validly  existing and in good  standing  under the laws of the United  States of
America  and,  except to the extent  that the laws of certain  jurisdictions  in
which any part of the Trust Fund may be located  require  that a  co-trustee  or
separate trustee be appointed to act with respect to such property,  the Trustee
has all licenses necessary to carry on its business as now being conducted,  and
is in compliance with the laws of each state in which any Mortgaged  Property is
located,  to the extent necessary to ensure the  enforceability of each Mortgage
Loan in accordance with the terms of this Agreement;

          (ii) The  Trustee has the full  corporate  power,  authority  and
legal right to execute and deliver this  Agreement  and to perform in accordance
herewith;  the execution  and delivery of this  Agreement by the Trustee and its
performance  and compliance  with the terms of this Agreement do not violate the
Trustee's  charter  documents or  constitute a default (or an event which,  with
notice or lapse of time, or both,  would  constitute a default) under, or result
in the breach of,  any  contract,  agreement  or other  instrument  to which the
Trustee  is a party or which  may be  applicable  to the  Trustee  or any of its
assets,  which default or breach would have  consequences  that would materially
and adversely affect the financial condition or operations of the Trustee or its
properties  taken as a whole or impair the  ability of the Trust Fund to realize
on the Mortgage Loans;

          (iii)  This  Agreement  has  been  duly and  validly  authorized,
executed and delivered by the Trustee and, assuming due authorization, execution
and delivery by the other parties hereto, constitutes a legal, valid and binding
obligation of the Trustee,  enforceable  against it in accordance with the terms
of this  Agreement,  except as such  enforcement  may be limited by  bankruptcy,
insolvency, reorganization,  liquidation, receivership, moratorium or other laws
relating to or affecting  creditors' rights generally,  or by general principles
of  equity  (regardless  of  whether  such  enforceability  is  considered  in a
proceeding in equity or at law);

          (iv) The Trustee is not in violation  of, and the execution and
delivery of this  Agreement by the Trustee and its  performance  and  compliance
with the terms of this  Agreement  will not  constitute a violation with respect
to, any state or federal statute,  any order or decree of any court or any order
or regulation of any federal,  state,  municipal or  governmental  agency having
jurisdiction,  or result in the creation or  imposition  of any lien,  charge or
encumbrance  which,  in any such  event,  would  have  consequences  that  would
materially  and adversely  affect the  financial  condition or operations of the
Trustee or its  properties  taken as a whole or impair the  ability of the Trust
Fund to realize on the Mortgage Loans;

          (v) There are no actions,  suits or proceedings  pending or, to the
knowledge of the Trustee,  threatened,  against the Trustee which, either in any
one instance or in the aggregate, would result in any material adverse change in
the  business,  operations  or  financial  condition  of the  Trustee  or  would
materially  impair the ability of the Trustee to perform under the terms of this
Agreement or draw into  question the validity of this  Agreement or the Mortgage
Loans or of any action taken or to be taken in connection  with the  obligations
of the Trustee contemplated herein;

          (vi) 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,

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<PAGE>


delivery and  performance  by the Trustee of, or compliance by the Trustee with,
this  Agreement or, if required,  such  approval has been obtained  prior to the
Closing  Date,  except to the  extent  that the  failure  of the  Trustee  to be
qualified  as a foreign  corporation  or  licensed  in one or more states is not
necessary for the enforcement of the Mortgage Loans; and

          (vii) Except for the release of items in the Mortgage File
contemplated by this Agreement,  including, without limitation, as necessary for
the enforcement of the holder's  rights and remedies under the related  Mortgage
Loan, the Trustee covenants and agrees that it shall maintain each Mortgage File
in the State of Illinois,  and that it shall not move any Mortgage  File outside
the State of Illinois  (other than with respect to the Trustee's  responsibility
to record assignment  documents pursuant to Section 2.1 or as otherwise provided
in this Agreement)  unless it shall first obtain and provide,  at the expense of
the Trust Fund, an Opinion of Counsel to the  Depositor and the Rating  Agencies
to the effect that the Trustee's  first priority  interest in the Notes has been
duly and fully perfected under the applicable laws and regulations of such other
jurisdiction.

     (b) The Fiscal Agent hereby  represents,  warrants and covenants  that as
of the Closing Date:

          (i) The Fiscal Agent is a banking corporation, duly organized, validly
existing  and in good  standing  under the laws of the  Netherlands  and has all
licenses necessary to carry on its business as now being conducted;

          (ii) The Fiscal Agent has the full corporate power, authority and
legal right to execute and deliver this  Agreement  and to perform in accordance
herewith;  the execution and delivery of this  Agreement by the Fiscal Agent and
its  performance  and compliance with the terms of this Agreement do not violate
the Fiscal Agent's charter documents or constitute a default (or an event which,
with notice or lapse of time, or both,  would  constitute a default)  under,  or
result in the breach of, any  contract,  agreement or other  instrument to which
the Fiscal  Agent is a party or which may be  applicable  to the Fiscal Agent or
any of its assets,  which default or breach would have  consequences  that would
materially  and adversely  affect the  financial  condition or operations of the
Fiscal Agent or its properties taken as a whole;

          (iii)  This  Agreement  has  been  duly and  validly  authorized,
executed  and  delivered by the Fiscal  Agent and,  assuming due  authorization,
execution and delivery by the other parties hereto,  constitutes a legal,  valid
and binding obligation of the Fiscal Agent, enforceable against it in accordance
with the terms of this Agreement,  except as such  enforcement may be limited by
bankruptcy, insolvency, reorganization, liquidation, receivership, moratorium or
other laws relating to or affecting  creditors' rights generally,  or by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law);

          (iv) The Fiscal Agent is not in violation  of, and the execution and
delivery  of  this  Agreement  by the  Fiscal  Agent  and  its  performance  and
compliance with the terms of this Agreement will not constitute a violation with
respect  to, any state or federal  statute,  any order or decree of any court or
any order or regulation of any federal,  state, municipal or governmental agency
having jurisdiction, or result in the creation or imposition of any lien, charge
or encumbrance  which,  in any such event,  would have  consequences  that would
materially  and adversely  affect the  financial  condition or operations of the
Fiscal Agent or its properties taken as a whole;


                                      157
<PAGE>


          (v)  There are no actions,  suits or proceedings pending or, to the
knowledge  of the Fiscal  Agent,  threatened,  against the Fiscal  Agent  which,
either in any one  instance or in the  aggregate,  would  result in any material
adverse change in the business,  operations or financial condition of the Fiscal
Agent or would  materially  impair the  ability  of the Fiscal  Agent to perform
under the terms of this  Agreement  or draw into  question  the validity of this
Agreement  or of  any  action  taken  or to be  taken  in  connection  with  the
obligations of the Fiscal Agent contemplated herein; and

          (vi) 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 Fiscal Agent of, or
compliance  by the Fiscal  Agent with,  this  Agreement  or, if  required,  such
approval has been obtained prior to the Closing Date,  except to the extent that
the failure of the Fiscal  Agent to be  qualified  as a foreign  corporation  or
licensed  in one or more  states is not  necessary  for the  enforcement  of the
Mortgage Loans.

     (c) It is understood and agreed that the representations and warranties set
forth in this Section shall survive until the termination of this Agreement, and
shall inure to the benefit of the Master Servicer,  the Special Servicer and the
Depositor.  Upon discovery by the Depositor,  the Master  Servicer,  the Special
Servicer or a Responsible Officer of the Trustee (or upon written notice thereof
from  any  Certificateholder)  of a  breach  of any of the  representations  and
warranties set forth in this Section which materially and adversely  affects the
interests of the  Certificateholders,  the Master Servicer, the Special Servicer
or the Trustee with respect to any Mortgage  Loan,  the party  discovering  such
breach shall give prompt  written  notice to the other parties hereto and to the
Rating Agencies.


                                   ARTICLE IX.
                                   -----------

                                   TERMINATION

          Section 9.1.   Termination of Trust Fund.
                         -------------------------

     (a) Subject to Section 9.3, the Trust Fund and the  respective  obligations
and  responsibilities of the Depositor,  the Trustee,  the Master Servicer,  the
Special  Servicer and the Fiscal Agent  hereunder  (other than the obligation of
the Trustee to make  payments to  Certificateholders  on the final  Distribution
Date  pursuant to Article IV or  otherwise as set forth in Section 9.2 and other
than  the  obligations  in  the  nature  of  information  or  tax  reporting  or
tax-related  administrative or judicial contests or proceedings) shall terminate
on the earlier of (i) the later of (A) the final payment or other liquidation of
the last  Mortgage  Loan held by the Trust Fund and (B) the  disposition  of the
last REO Property held by the Trust Fund and (ii) the sale of all Mortgage Loans
and any REO Properties held by the Trust Fund in accordance with Section 9.1(b);
provided that in no event shall the Trust Fund created  hereby  continue  beyond
the  expiration  of 21  years  from  the  death  of  the  last  survivor  of the
descendants  of Joseph P. Kennedy,  the late  Ambassador of the United States to
the Court of St. James, living on the date hereof.

     (b) As soon as reasonably practical,  the Trustee shall give the Holders of
the  Controlling  Class,  the Master  Servicer,  the  Special  Servicer  and the
Majority Certificateholder of the Class R-I Certificates notice of the date when
the then  current  aggregate  Stated  Principal  Balance of the  Mortgage  Loans
(including,  without limitation,  any REO Mortgage Loan) will be less than 1% of
the initial aggregate Stated Principal Balance of the Mortgage Loans as of the


                                      158
<PAGE>


Cut-off  Date.  The Holders of the  Controlling  Class  representing  a majority
Percentage  Interest in such Class, the Master Servicer,  the Special  Servicer,
and  the  Majority   Certificateholder  of  the  Class  R-I  Certificates  shall
thereafter be entitled,  in that order of priority,  to purchase, in whole only,
the Mortgage Loans and any REO  Properties  then remaining in the Trust Fund. If
any such party desires to exercise  such option,  it will notify the Trustee who
will notify any other such party with a prior right to exercise such option.  If
any such party that has been so  provided  notice by the  Trustee  notifies  the
Trustee within ten Business Days after receiving notice of the proposed purchase
that it wishes to purchase the assets of the Trust Fund, then such party (or, in
the event that more than one of such  parties  notifies  the Trustee  during any
Collection  Period that it wishes to purchase the assets of the Trust Fund,  the
party  with the first  right to  purchase  the  assets  of the  Trust  Fund) may
purchase the assets of the Trust Fund in  accordance  with this  Agreement.  The
"Termination Price" shall equal the sum of (i) the aggregate Repurchase Price of
all the  remaining  Mortgage  Loans (other than REO Mortgage  Loans and Mortgage
Loans as to which a Final  Recovery  Determination  has been  made)  held by the
Trust Fund,  plus (ii) the appraised  value of each  remaining REO Property,  if
any, held by the Trust Fund (such  appraisal to be conducted in accordance  with
MAI standards by an appraiser with at least ten years  experience in the related
property  type and in the  jurisdiction  in which the REO  Property  is  located
selected by the Master Servicer and approved by the Trustee), minus (iii) solely
in the case where the Master Servicer is effecting such purchase,  the aggregate
amount of unreimbursed  Advances made by the Master Servicer,  together with any
Advance Interest Amount accrued and payable to the Master Servicer in respect of
such Advances and any unpaid Master Servicer Fees remaining  outstanding  (which
items shall be deemed to have been paid or reimbursed to the Master  Servicer in
connection  with  such  purchase)  (or,  solely in the case  where  the  Special
Servicer is  effecting  such  purchase,  any unpaid  Special  Servicer  Fees and
Standby Special Servicer Fees remaining outstanding, which items shall be deemed
to have been paid or reimbursed to the Special  Servicer in connection with such
purchase).

      In the event that the  Holders of the  Controlling  Class  representing  a
majority  Percentage  Interest in such Class, the Master  Servicer,  the Special
Servicer,  or the Majority  Certificateholder of Class R-I Certificates purchase
all of the remaining Mortgage Loans and REO Properties held by the Trust Fund in
accordance with the preceding paragraph,  the party effecting such purchase (the
"Final  Purchaser")  shall (i) deposit in the Collection  Account not later than
the  Determination  Date  relating to the  Distribution  Date on which the final
distribution on the Certificates is to occur, an amount in immediately available
funds  equal to the  Termination  Price and (ii)  deliver  notice (at least five
Business Days prior to the Determination  Date relating to the Distribution Date
on which the final  distribution on the Certificates is to occur) to the Trustee
of its intention to effect such purchase.  Upon  confirmation  that such deposit
has been made,  the Trustee  shall  release or cause to be released to the Final
Purchaser or its designee the Mortgage  Files for the remaining  Mortgage  Loans
and shall execute all assignments,  endorsements and other instruments furnished
to it by the Final Purchaser  without  recourse,  representation  or warranty as
shall be necessary to effectuate  transfer of the remaining  Mortgage  Loans and
REO Properties  held by the Trust Fund, in each case without  representation  or
warranty by the Trustee. All Mortgage Files for the remaining Mortgage Loans and
REO Properties shall be delivered to the Final Purchaser or its designee.

     (c) As a condition to the  purchase of the assets of the Trust  pursuant to
Section  9.1(b),  the Final Purchaser shall deliver to the Trustee an Opinion of
Counsel, which shall be at the expense of the Final Purchaser, stating that such
termination will be a "qualified


                                      159
<PAGE>


liquidation"  under Section  860F(a)(4) of the Code. Such purchase shall be made
in accordance with Section 9.3.

          Section 9.2.   Procedure Upon Termination of Trust Fund.
                         ----------------------------------------

     (a) Notice of any  termination  pursuant to the  provisions of Section 9.1,
specifying  the  Distribution  Date upon which the final  distribution  shall be
made,  shall be given  promptly by the  Trustee to each  Rating  Agency and each
Certificateholder by first class mail at least 20 days prior to the date of such
termination.  Such notice  shall  specify (A) the  Distribution  Date upon which
final distribution on the Certificates will be made and (B) that the Record Date
otherwise  applicable to such Distribution Date is not applicable,  distribution
being made only upon  presentation  and  surrender  of the  Certificates  at the
office or agency of the Trustee therein  specified.  The Trustee shall give such
notice to the Depositor and the Certificate Registrar at the time such notice is
given to  Certificateholders.  Upon  any such  termination,  the  Trustee  shall
terminate, or request the Master Servicer to terminate,  the Collection Account,
the Grantor Trust  Collection  Account,  the Distribution  Account,  the Grantor
Trust Distribution Account and any other account or fund maintained with respect
to the Certificates,  subject to the Trustee's  obligation hereunder to hold all
amounts payable to the nontendering Certificateholders in trust without interest
pending such payment.

     (b) On the final  Distribution  Date, the Trustee shall  distribute to each
Certificateholder  that presents and  surrenders  its  Certificates  all amounts
payable on such Certificates on such final  Distribution Date in accordance with
Article IV. Any amounts being held in the Collection Account or Interest Reserve
Account for distribution on a Future  Distribution Date shall be included in the
Available Funds for the Final Distribution Date.

          Section 9.3.   Additional Trust Fund Termination Requirements.
                         ----------------------------------------------

     (a) In the event of a purchase of all the remaining  Mortgage Loans and REO
Properties held by the Trust Fund in accordance with Section 9.1(b) or any other
termination  of the Trust Fund under  this  Article  IX, the Trust Fund and each
REMIC Pool shall be  terminated  in  accordance  with the  following  additional
requirements,  unless in the case of a termination  under Section 9.1(b) hereof,
the Final Purchaser delivers to the Trustee an Opinion of Counsel at the expense
of the Final  Purchaser (or, in the case of any other  termination,  the Trustee
shall obtain such Opinion of Counsel at the expense of the Trust Fund) addressed
to the  Depositor  and the  Trustee to the effect  that the failure of the Trust
Fund to comply with the  requirements of this Section 9.3 will not (i) result in
the imposition of taxes on "prohibited transactions" of any REMIC Pool under the
REMIC  Provisions  or (ii) cause any REMIC Pool to fail to qualify as a REMIC at
any time that any Certificates are outstanding:

          (i) within 89 days prior to the final  Distribution Date set forth in
the notice given by the Trustee  under  Section  9.2, the Trustee  shall adopt a
plan of complete  liquidation prepared by the Final Purchaser (or the Trustee in
the event of a termination  other than  pursuant to Section  9.1(b)) and meeting
the requirements  for a qualified  liquidation for each REMIC Pool under Section
860F of the Code and any regulations thereunder;

          (ii) during such 90-day  liquidation  period and at or after the
adoption  of the plan of  complete  liquidation  and at or  prior  to the  final
Distribution  Date,  the Trustee shall sell all of the remaining  Mortgage Loans
and any REO Properties held by the Trust Fund (which assets shall be sold to the
Final Purchaser for cash in an amount equal to the Termination Price in


                                      160
<PAGE>


the event of a  termination  pursuant  to  Section  9.1(b)),  such cash shall be
deposited into the Collection Account,  shall be deemed distributed on the REMIC
I Regular Interests in retirement  thereof,  shall be deemed  distributed on the
REMIC II Regular  Interests in retirement  thereof,  and shall be distributed to
the Certificateholders in retirement of the Certificates;

          (iii) at the time of the making of the final  payment on the
Certificates, the Trustee shall distribute or credit, or cause to be distributed
or credited,  to the Holders of the related Class of Residual  Certificates  all
cash on hand in each REMIC  Pool  after  making  such  final  deemed  payment or
payments  (other than cash retained to meet  claims),  and REMIC I, REMIC II and
REMIC III shall terminate at that time; and

          (iv) in no event may the final  payment on the REMIC I  Interests,
the REMIC II Interests,  the REMIC III Regular  Certificates,  or the Class R-I,
Class R-II or Class R-III  Certificates be made after the 89th day from the date
on which such plans of complete  liquidation  are  adopted.  The  Trustee  shall
specify the first day of the 90-day  liquidation  period in a statement attached
to the final Tax  Return for each REMIC Pool  pursuant  to  Treasury  Regulation
Section 1.860F-1.

     (b) By their  acceptance of  Certificates,  the Holders  thereof hereby
agree to authorize the Trustee to adopt a plan of complete  liquidation for each
of REMIC I,  REMIC II and REMIC III  prepared  by the  Final  Purchaser  (or the
Trustee in the event of a termination  other than pursuant to Section 9.1(b)) in
accordance with the foregoing requirements, which authorization shall be binding
upon all successor Certificateholders.


                                   ARTICLE X.
                                   ----------

                       REMIC ADMINISTRATION; GRANTOR TRUST

          Section 10.1.  REMIC Election.
                         --------------

     (a) The  parties  intend that each of REMIC I, REMIC II and REMIC III shall
constitute,  and that the  affairs  of each of REMIC I,  REMIC II and  REMIC III
shall be conducted so as to qualify it as, a "real  estate  mortgage  investment
conduit" as defined in, and in accordance  with, the REMIC  Provisions,  and the
provisions  hereof shall be interpreted  consistently  with this  intention.  In
furtherance of such  intention,  the Trustee shall,  to the extent  permitted by
applicable law, act as agent,  and is hereby  appointed to act as agent, of each
of REMIC I,  REMIC II and  REMIC  III and  shall,  on behalf of each of REMIC I,
REMIC II and REMIC III,  make an election to treat each of REMIC I, REMIC II and
REMIC III as a REMIC on Form 1066 for its first taxable year, in accordance with
the REMIC Provisions.

     (b) The  REMIC I  Regular  Interests  are  hereby  designated  as  "regular
interests" in REMIC I within the meaning of Section  860G(a)(1) of the Code, and
the Class R-I Certificates are hereby  designated as the sole class of "residual
interests" in REMIC I within the meaning of Section  860G(a)(2) of the Code. The
REMIC II Regular  Interests shall be designated as "regular  interests" in REMIC
II within  the  meaning of Section  860G(a)(1)  of the Code,  and the Class R-II
Certificates are hereby designated as the sole class of "residual  interests" in
REMIC II within the meaning of Section  860G(a)(2)  of the Code.  The Class A-1,
Class A-2,  Class X, Class B, Class C, Class D, Class E, Class F, Class G, Class
H, Class J, Class K,  Class L,  Class M,  Class N and Class O  Certificates  are
hereby  designated  as  "regular  interests"  in REMIC III within the meaning of
Section 860G(a)(1) of the Code and the Class R-III Certificates are


                                      161
<PAGE>


hereby designated as the sole class of "residual  interests" in REMIC III within
the meaning of Section 860G(a)(2) of the Code.

     (c) The Closing Date is hereby  designated as the "Startup Day" of REMIC I,
REMIC II and REMIC III within the meaning of Section 860G(a)(9) of the Code. The
"latest possible maturity date" of the REMIC I Regular  Interests,  the REMIC II
Regular  Interests and the REMIC III Regular  Certificates  for purposes of Code
Section 860G(a)(1) is the Rated Final Distribution Date.

          Section 10.2.  REMIC Compliance.
                         ----------------

     (a) The Trustee shall cause to be prepared,  signed,  and timely filed with
the Internal Revenue Service, on behalf of each REMIC Pool, an application for a
taxpayer  identification  number for such REMIC Pool on Internal Revenue Service
Form SS-4. The Trustee shall prepare, sign and file, or cause to be prepared and
signed and filed,  all  required  Tax  Returns for each of REMIC I, REMIC II and
REMIC III,  using a calendar year as the taxable year for each of REMIC I, REMIC
II and  REMIC  III,  when and as  required  by the  REMIC  Provisions  and other
applicable federal, state or local income tax laws.

      The Trustee shall, within 30 days of the Closing Date, furnish or cause to
be furnished to the Internal Revenue  Service,  on Form 8811 or as otherwise may
be  required  by the Code,  the name,  title and  address of the Person that the
holders of the  Certificates  may contact for tax information  relating  thereto
(and the Trustee  shall act as the  representative  of each of REMIC I, REMIC II
and REMIC III for this purpose),  together with such  additional  information as
may be required by such Form,  and shall update such  information at the time or
times and in the manner required by the Code (and the Depositor agrees within 10
Business  Days of the  Closing  Date,  to  provide  any  information  reasonably
requested by the Trustee and necessary to make such filing);

     (b) The Trustee  shall  prepare and  forward,  or cause to be prepared  and
forwarded,  to the  Certificateholders  and the  Internal  Revenue  Service  and
applicable  state and local tax authorities all information  reports as and when
required to be  provided to them in  accordance  with the REMIC  Provisions  and
applicable  state and local law. If the filing or  distribution of any documents
of an administrative  nature not addressed in Section 10.1 or Section 10.2(a) is
then  required by the REMIC  Provisions in order to maintain the status of REMIC
I,  REMIC II or REMIC  III as a REMIC or is  otherwise  required  by the Code or
applicable  state or local law,  the  Trustee  shall  prepare,  sign and file or
distribute,  or cause to be  prepared,  signed  and filed or  distributed,  such
documents  with or to such Persons when and as required by the REMIC  Provisions
or the Code or comparable provisions of state and local law.

     (c) The Holder of the largest  Percentage  Interest in the Class R-I, Class
R-II or Class R-III  Certificates  shall be the tax  matters  person of REMIC I,
REMIC II or REMIC III,  respectively,  pursuant to Treasury  Regulation  Section
1.860F-4(d);  provided,  however,  that any amendment to such  Regulation  which
requires  that  another  Person be  designated  the tax matters  person shall be
followed from and after the effective date of such  amendment.  If more than one
Holder should hold an equal Percentage  Interest in the Class R-I, Class R-II or
Class R-III  Certificates  larger than that held by any other Holder,  the first
such  Holder  to have  acquired  such  Class  R-I,  Class  R-II or  Class  R-III
Certificates  shall  be such  tax  matters  person.  The  Trustee  shall  act as
attorney-in-fact  and agent for the tax matters person of each of REMIC I, REMIC
II and REMIC III,  and each  Holder of a  Percentage  Interest in the Class R-I,
Class R-II or Class R-III Certificates, by acceptance thereof, is deemed to have
consented to the Trustee's appointment


                                      162
<PAGE>


in such  capacity  and agrees to execute any  documents  required to give effect
thereto,  and any fees and expenses  incurred by the Trustee in connection  with
any audit or  administrative  or judicial  proceeding shall be paid by the Trust
Fund.

     (d) The Trustee shall not  intentionally  take any action or  intentionally
omit to take any  action  if, in taking or  omitting  to take such  action,  the
Trustee  knows that such action or omission (as the case may be) would cause the
termination  of the  REMIC  status  of  REMIC I,  REMIC  II or REMIC  III or the
imposition  of tax on REMIC I,  REMIC II or REMIC III other than a tax on income
expressly  permitted  or  contemplated  to be  incurred  under the terms of this
Agreement (any of the foregoing,  an "Adverse REMIC Event"). In this regard, the
Trustee shall not permit the creation of any "interests"  (within the meaning of
Treasury Regulation Section 1.860D-1(b)(1)) in any of the REMIC Pools other than
the REMIC I Regular Interests,  the REMIC II Regular Interests and the interests
evidenced by the Certificates.  Notwithstanding  any provision of this paragraph
to the  contrary,  the Trustee shall not be required to take any action that the
Trustee in good faith believes to be  inconsistent  with any other  provision of
this  Agreement,  nor shall the Trustee be deemed in violation of this paragraph
if it takes any action  expressly  required or authorized by any other provision
of this  Agreement,  and the Trustee shall have no  responsibility  or liability
with respect to any act or omission of the  Depositor or the Master  Servicer or
the Special Servicer which causes the Trustee to be unable to comply with any of
Section 10.1(a), Section 10.2(a), Section 10.2(b), or Section 10.2(e).

     None of the Master  Servicer,  the Special Servicer and the Depositor shall
be responsible or liable (except in connection with any act or omission referred
to in the two preceding sentences) for any failure by the Trustee to comply with
the provisions of this Section 10.2.

     (e) The Trustee shall  maintain  such records  relating to each of REMIC I,
REMIC II and REMIC III as may be  necessary to  demonstrate  that each REMIC has
complied  with the  REMIC  provisions  and to  prepare  the  foregoing  returns,
schedules,  statements  or  information,  such records,  for federal  income tax
purposes, to be maintained on a calendar year and on an accrual basis.

     (f) The  Depositor,  the Special  Servicer  and the Master  Servicer  shall
cooperate  in a timely  manner  with the  Trustee  in  supplying  (upon  written
request) any information  within the Depositor's,  the Special Servicer's or the
Master  Servicer's  control (other than any  confidential  information)  that is
reasonably  necessary  to enable the  Trustee to perform  its duties  under this
Section 10.2.

     (g) None of the  Depositor,  Trustee,  Fiscal  Agent,  Special  Servicer or
Master  Servicer  shall enter into any  arrangement by which the Trust Fund will
receive a fee or other  compensation  for  services  other than as  specifically
contemplated  herein.

          Section  10.3. Imposition  of  Tax on  the  Trust  Fund.
                         -----------------------------------

     (a)  Subject  to  Section  10.3(c),  in the event  that any tax,  including
interest,  penalties  or  assessments,  additional  amounts or  additions to tax
(collectively  "Taxes"),  is imposed on REMIC I, REMIC II or REMIC III, such tax
shall be charged against amounts  otherwise  distributable to the Holders of the
Certificates;   provided,  that  any  taxes  imposed  on  any  net  income  from
foreclosure property pursuant to Code Section 860G(d) or any similar tax imposed
by a state or local  jurisdiction  shall instead be treated as an expense of the
related REO Property in  determining  Net REO Proceeds  with respect to such REO
Property (and until such Taxes are paid,  the Master  Servicer from time to time
shall withdraw from the Collection

                                      163
<PAGE>


Account amounts reasonably determined by the Special Servicer to be necessary to
pay such  Taxes,  which  the  Master  Servicer  shall  maintain  in a  separate,
non-interest-bearing  account,  and the  Master  Servicer  shall  deposit in the
Collection  Account the excess  determined  by the Master  Servicer from time to
time of the amount in such account over the amount  necessary to pay such Taxes)
and shall be paid therefrom.  Except as provided in the preceding sentence,  the
Trustee is hereby  authorized  to and shall retain or cause to be retained  from
Available  Funds  sufficient  funds to pay or provide for the payment of, and to
actually  pay, such Taxes as are legally owed by REMIC I, REMIC II and REMIC III
(but such  authorization  shall not prevent the Trustee from contesting,  at the
expense  of the  Trust  Fund,  any  such  tax in  appropriate  proceedings,  and
withholding  payment of such tax, if  permitted  by law,  pending the outcome of
such proceedings).

     (b) The Trustee is hereby  authorized to and shall segregate or cause to be
segregated,  in a separate non-interest bearing account, (i) the net income from
any  "prohibited  transaction"  under Code Section 860F(a) or (ii) the amount of
any contribution to REMIC I, REMIC II or REMIC III after the Startup Day that is
subject to tax under Code Section 860G(d) and use such income or amount,  to the
extent  necessary,  to pay such tax,  such  amounts  to be  segregated  from the
Collection  Account  with respect to any such net income of or  contribution  to
REMIC I and REMIC II and from the Distribution  Account with respect to any such
net income of or contribution to REMIC III (and return the balance  thereof,  if
any, to the Collection Account or the Distribution Account, as the case may be).

     (c) If  any  tax  is  imposed  on any  REMIC  Pool,  including  "prohibited
transactions"  taxes as defined in Section  860F(a)(2)  of the Code,  any tax on
"net  income from  foreclosure  property"  as defined in Section  860G(c) of the
Code,  any taxes on  contributions  to any REMIC  Pool  after  the  Startup  Day
pursuant to Section  860G(d) of the Code,  and any other tax imposed by the Code
or any applicable provisions of state or local tax laws, such tax, together with
all incidental costs and expenses (including penalties and reasonable attorneys'
fees), shall be charged to and paid by: (i) the Trustee,  if such tax arises out
of or results from a breach of any of its obligations  under Article IV, Article
V, Article VIII or this Article X; (ii) the Master Servicer,  if such tax arises
out of or results from a breach by the Master Servicer of any of its obligations
under  Article III or this Article X (which  breach  constitutes  negligence  or
willful misconduct of the Master Servicer);  (iii) the Special Servicer, if such
tax arises out of or results from a breach by the Special Servicer of any of its
obligations  under  Article  III or this  Article  X (which  breach  constitutes
negligence  or willful  misconduct of the Special  Servicer);  or (iv) the Trust
Fund (exclusive of the Grantor Trust), in all other instances.

          Section 10.4.  Prohibited Transactions and Activities.
                         --------------------------------------

     Following  the Startup  Day,  the Trustee  shall not,  except as  expressly
required by any provision of this Agreement,  accept any  contribution of assets
to the Trust Fund unless the Trustee  shall have  received an Opinion of Counsel
(the costs of obtaining such opinion to be borne by the Person  requesting  such
contribution)  to the effect that the inclusion of such assets in the Trust Fund
will not cause  REMIC I,  REMIC II or REMIC III to fail to qualify as a REMIC at
any time that any  Certificates  are outstanding or subject REMIC I, REMIC II or
REMIC III to any tax under the REMIC Provisions or other  applicable  provisions
of federal, state and local law or ordinances.

                                       164

<PAGE>



            Section 10.5.     Grantor Trust Provisions.
                              ------------------------

      There is hereby  established a trust which shall be part of the Trust Fund
and which shall hold the Deferred Interest, the Grantor Trust Collection Account
and the Grantor Trust Distribution  Account (the "Grantor Trust Assets"),  which
assets  shall be  excluded  from REMIC I,  REMIC II and REMIC  III.  The Class V
Certificates  represent  undivided  beneficial  interests  in the Grantor  Trust
Assets,  entitled to the distributions set forth in Section 4.7 hereof, and such
Certificates  in the  aggregate  represent  beneficial  ownership of 100% of the
Grantor  Trust  Assets.  The Trustee  shall treat such assets as a grantor trust
under  Subpart E of Part 1 of  Subchapter J of the Code,  shall account for such
assets  separately  from any other Trust Fund  assets and shall  perform all tax
reporting  obligations  with respect to the Grantor Trust. If any tax is imposed
on the Grantor Trust,  such tax, together with all incidental costs and expenses
(including, without limitation, penalties and reasonable attorneys' fees), shall
be charged to and paid by: (i) the Trustee, if such tax arises out of or results
from a breach by the Trustee of any of its obligations under Article IV, Article
V, Article VIII or this Article X; (ii) the Master Servicer,  if such tax arises
out of or results from a breach by the Master Servicer of any of its obligations
under  Article III or this Article X (which  breach  constitutes  negligence  or
willful misconduct of the Master Servicer);  (iii) the Special Servicer, if such
tax arises out of or results from a breach by the Special Servicer of any of its
obligations  under  Article  III or this  Article  X (which  breach  constitutes
negligence or willful misconduct of the Special  Servicer);  or (iv) the portion
of the Trust Fund constituting the Grantor Trust, in all other instances.


                                  ARTICLE XI.
                                  -----------

                            MISCELLANEOUS PROVISIONS

          Section 11.1.  Counterparts.
                         ------------

      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 11.2.  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 to take any action or
proceeding  in any court for a partition  or winding up of the Trust  Fund,  nor
otherwise  affect the rights,  obligations and liabilities of the parties hereto
or any of them.

      No  Certificateholder  shall have any right to vote  (except as  expressly
provided  for  herein) or in any manner  otherwise  control  the  operation  and
management  of the Trust Fund, or the  obligations  of the parties  hereto,  nor
shall anything herein set forth, or contained in the terms of the  Certificates,
be construed so as to  constitute  the  Certificateholders  from time to time as
partners or members of an association;  nor shall any Certificateholder be under
any  liability  to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.

                                      165

<PAGE>


      No Certificateholder shall have any right to institute any suit, action or
proceeding  in equity or at law upon or under or with respect to this  Agreement
or the  Mortgage  Loans,  unless,  with respect to this  Agreement,  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 representing a majority of the aggregate Voting Rights allocated
to each affected Class of Certificates  shall have made written request upon the
Trustee to institute such action,  suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable  indemnity as it
may require against the costs,  expenses and liabilities to be incurred  therein
or  thereby,  and the  Trustee,  for 30 days after its  receipt of such  notice,
request and offer of indemnity, shall have neglected or refused to institute any
such action,  suit or proceeding.  It is understood and intended,  and expressly
covenanted by each Certificateholder with every other  Certificateholder and the
Trustee, that no one or more Holders of Certificates of any Class shall have any
right in any manner  whatever by virtue of any  provision  of this  Agreement to
affect,  disturb or  prejudice  the  rights of the  Holders of any other of such
Certificates,  or to obtain or seek to obtain priority over or preference to any
other such Holder,  or to enforce any right under this Agreement,  except in the
manner  herein  provided  and for the equal,  ratable and common  benefit of all
Holders of Certificates of such 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 11.3.  Governing Law.
                         -------------

      THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF  NEW  YORK  (WITHOUT  REGARD  TO  CONFLICTS  OF  LAWS   PRINCIPLES)  AND  THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.

          Section 11.4.  Notices.
                         -------

      All demands,  notices and  communications  hereunder  shall be in writing,
shall be deemed to have been given upon  receipt  (or,  in the case of notice by
telecopy, upon confirmation of receipt) as follows:

            If to the Trustee or the Fiscal Agent, to:

                LaSalle Bank National Association
                135 South LaSalle Street, Suite 1625
                Chicago, IL  60603
                Attention: Asset-Backed  Securities  Trust Services Group - PNC
                Mortgage   Acceptance   Corp.  Commercial   Mortgage
                Pass-Through Certificates, Series 2000-C1


                                      166
<PAGE>


            If to the Depositor, to:

                  PNC Mortgage Acceptance Corp.
                  210 West 10th Street
                  6th Floor
                  Kansas City, Missouri 64105
                  Attention:  Chief Executive Officer
                  Telecopy No.:  (816) 435-2326

            With copies to:

                  Morrison & Hecker L.L.P.
                  2600 Grand Avenue
                  Kansas City, Missouri 64108-4606
                  Attention: William A. Hirsch, Esq.
                  Telecopy No.: (816) 474-4208

            If to the Master Servicer, to:

                  Midland Loan Services, Inc.
                  210 West 10th Street
                  6th Floor
                  Kansas City, Missouri 64105
                  Attention: Chief Executive Officer
                  Telecopy No.:  (816) 435-2326

            With copies to:

                  Morrison & Hecker L.L.P.
                  2600 Grand Avenue
                  Kansas City, Missouri 64108-4606
                  Attention: William A. Hirsch, Esq.
                  Telecopy No.: (816) 474-4208

            If to the Special Servicer, to:

                  GMAC Commercial Mortgage Corporation
                  550 California Street, 12th Floor
                  San Francisco, California 94104
                  Attention:  Special Servicing
                  Telecopy No.: (415) 391-2949


                                      167
<PAGE>


            If to the Seller (for the RFC Loans), to:

                  Residential Funding Corporation
                  8400 Normandale Lake Blvd., Suite 600
                  Minneapolis, MN 55437
                  Attn: Robert Conway
                  Telecopy No.: (612) 806-6877

            If to the Seller (for the CIBC Loans), to:

                  CIBC Inc.
                  World Financial Center, 38th Floor
                  New York, NY 10281
                  Attn: Brian Jay Neilinger
                  Telecopy No.:     (212) 571-4714

            If to the Seller (for the Midland Loans) to:

                  Midland Loan Services, Inc.
                  210 West 10th Street
                  Kansas City, Missouri 64105
                  Attention: Chief Executive Officer
                  Telecopy No.:  (816) 435-2326

            With copies to:

                  Morrison & Hecker L.L.P.
                  2600 Grand Avenue
                  Kansas City, Missouri 64108-4606
                  Attention: William A. Hirsch, Esq.
                  Telecopy No.: (816) 474-4208

            If to any Certificateholder, to:

                  the address set forth in the
                  Certificate Register,

or, in the case of the parties to this Agreement,  to such other address as such
party shall specify by written notice to the other parties hereto.

          Section 11.5.  Severability of Provisions.
                         --------------------------

      If any one or more of the  covenants,  agreements,  provisions or terms of
this Agreement  shall be for any reason  whatsoever  held invalid,  then, to the
extent  permitted by applicable law, 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.


                                      168

<PAGE>

          Section 11.6.  Notice to the  Depositor,  the Operating  Adviser and
                         -----------------------------------------------------
Each Rating Agency.
------------------

     (a) The  Trustee  shall use its best  efforts to promptly  provide  written
notice to the  Depositor,  the Operating  Adviser,  each Rating Agency and, upon
request, to any holder of a Privately Placed Certificate with respect to each of
the  following  of  which  a  Responsible  Officer  of the  Trustee  has  actual
knowledge:

          (i)   the occurrence of any Event of Default that has not been cured;

          (ii)  the merger,  consolidation,  resignation  or  termination of the
                Master Servicer, Special Servicer, Trustee or Fiscal Agent; and

          (iii) the final payment to any Class of Certificateholders.

     (b) The Special Servicer,  shall furnish the Operating Adviser,  the Master
Servicer  and each  Rating  Agency  with such  information  with  respect to any
Specially  Serviced Mortgage Loan as the Operating Adviser or such Rating Agency
shall request and which the Special Servicer can obtain to the extent consistent
with applicable law and the related Mortgage Loan Documents.

     The Trustee,  the Master Servicer and the Special Servicer,  as applicable,
shall  furnish to each Rating  Agency with  respect to each  Mortgage  Loan such
information as the Rating Agency shall reasonably request and which the Trustee,
Master  Servicer or Special  Servicer can reasonably  provide in accordance with
applicable law and without  waiving any  attorney-client  privilege  relating to
such  information.  The  Trustee,  Master  Servicer  and  Special  Servicer,  as
applicable,  may include any reasonable  disclaimer they deem  appropriate  with
respect to such information.

     (c)   Notices to each Rating Agency shall be addressed as follows:

                  Moody's Investors Service, Inc.
                  99 Church Street
                  New York, New York 10007
                  Attention:  Commercial MBS Monitoring Department

                  Fitch, Inc.
                  One State Street Plaza
                  New York, New York 10004
                  Attention:  CMBS Surveillance Group
                  Fax:  (212) 635-0294


or in each case to such  other  address as any Rating  Agency  shall  specify by
written notice to the parties hereto.

          Section 11.7.  Amendment.
                         ---------

      This Agreement or any Custodial Agreement may be amended from time to time
by the Depositor, the Master Servicer, the Special Servicer, the Trustee and the
Fiscal Agent, without the consent of any of the Certificateholders,  (i) to cure
any ambiguity,  (ii) to correct,  modify or supplement any provisions  herein or
therein that may be inconsistent with any other provisions


                                      169
<PAGE>


herein  or  therein  or in the  Prospectus  Supplement  (or  in  the  Prospectus
referenced in the Prospectus Supplement) or to correct any error, (iii) to amend
any provision hereof to the extent necessary or desirable to maintain the rating
or ratings assigned to each of the Classes of REMIC III Regular  Certificates by
each Rating Agency,  (iv) to add any other provisions with respect to matters or
questions  arising hereunder which shall not be inconsistent with the provisions
hereof,  (v) to relax or eliminate any requirement  hereunder imposed by (A) the
REMIC Provisions (if the REMIC Provisions are amended or clarified such that any
such  requirement may be relaxed or eliminated) or (B) the 1933 Act or the rules
thereunder (if the 1933 Act or such rules are amended or clarified such that any
such requirement may be relaxed or eliminated),  (vi) as evidenced by an Opinion
of Counsel delivered to the Trustee,  either (X) to comply with any requirements
imposed by the Code or any successor or  amendatory  statute or any temporary or
final  regulation,  revenue ruling,  revenue procedure or other written official
announcement or  interpretation  relating to federal income tax laws or any such
proposed action which, if made effective, would apply retroactively to any REMIC
Pool at least from the  effective  date of such  amendment,  or (Y) to avoid the
occurrence  of a prohibited  transaction  or to reduce the  incidence of any tax
that would arise from any actions  taken with  respect to the  operation  of any
REMIC  Pool,  (vii) as  provided  in Section  5.2(j)(v),  to  modify,  add to or
eliminate any of the provisions of Section  5.2(j)(i),  (ii) or (iii); or (viii)
to make any other provisions with respect to matters or questions  arising under
this Agreement,  which in the case of clauses (iv) (v) and (viii), (A) shall not
be inconsistent  with the provisions of this Agreement,  (B) shall not result in
the downgrading,  withdrawal or  qualification  (if applicable) of the rating or
ratings then assigned to any outstanding Class of Certificates,  as confirmed by
a Rating Agency  Confirmation  (the cost, if any, of obtaining such confirmation
shall be paid by the Person  requesting such amendment  unless such amendment is
in the best  interest  of the  Trust  Fund in which  case it will be paid by the
Trust Fund),  and (C) shall not  adversely  affect in any  material  respect the
interests of any Certificateholder.

      This Agreement or any Custodial Agreement may also be amended from time to
time by the Depositor,  the Master Servicer,  the Special Servicer,  the Trustee
and the Fiscal  Agent with the  consent of the Holders of each of the Classes of
REMIC III Regular  Certificates  representing not less than 51% of the aggregate
Voting Rights allocated to all Classes of Certificates affected by the amendment
for the  purpose  of adding  any  provisions  to or  changing  in any  manner or
eliminating  any of the  provisions  of this  Agreement  or of  modifying in any
manner the rights of the  Certificateholders;  provided,  however,  that no such
amendment shall:

               (i)  reduce in any  manner  the  amount  of, or delay the  timing
of, payments  received on Mortgage Loans which are required to be distributed on
any Certificate without the consent of each affected Certificateholder;

               (ii) change the  percentages of Voting Rights of Holders of
Certificates  which are required to consent to any action or inaction under this
Agreement,  without  the  consent  of  the  Holders  of  all  Certificates  then
outstanding; or

               (iii) alter the obligations of the Master Servicer,  the Special
Servicer,  the Trustee or the Fiscal  Agent to make a P&I  Advance or  Servicing
Advance (including Emergency Advances) without the consent of the Holders of all
Certificates  representing  all of the  Voting  Rights of the  Class or  Classes
affected thereby.

      Further,  the Depositor,  the Master Servicer,  the Special Servicer,  the
Trustee  and the Fiscal  Agent,  at any time and from time to time,  without the
consent of the Certificateholders,


                                      170
<PAGE>


may amend this Agreement or any Custodial Agreement to modify,  eliminate or add
to any of its  provisions  to such extent as shall be  necessary to maintain the
qualification  of the REMIC Pools as three  separate  REMICs,  or to prevent the
imposition of any additional  material  state or local taxes,  at all times that
any  Certificates  are  outstanding;  provided,  however,  that such action,  as
evidenced by an Opinion of Counsel  (obtained at the expense of the Trust Fund),
is  necessary  or helpful  to  maintain  such  qualification  or to prevent  the
imposition  of any such taxes,  and would not  adversely  affect in any material
respect the interest of any Certificateholder.

      In the event that neither the Depositor nor the successor thereto, if any,
is in existence,  any amendment  under this Section 11.7 shall be effective with
the consent in writing of the Trustee,  the Fiscal Agent,  the Master  Servicer,
the  Special  Servicer,  and,  to the  extent  required  by  this  Section,  the
Certificateholders and each Rating Agency.

      Notwithstanding any other provision of this Agreement, for purposes of the
giving or  withholding of consents  pursuant to this Section 11.7,  Certificates
registered  in the name of the  Depositor,  the  Master  Servicer,  the  Special
Servicer  or any of their  respective  Affiliates  shall be entitled to the same
Voting Rights with respect to matters described above as they would if any other
Person held such  Certificates  to the extent  permitted  in the  definition  of
"Certificateholder".

      Promptly after the execution of any  amendment,  the Trustee shall furnish
written   notification   of  the   substance   of   such   amendment   to   each
Certificateholder,  the Operating Adviser and each Rating Agency (with a copy of
such amendment to each Rating Agency).

      It shall not be necessary for the consent of Certificateholders under this
Section 11.7 to approve the particular  form of any proposed  amendment,  but it
shall be sufficient if such consent  shall  approve the substance  thereof.  The
method of obtaining  such consents and of evidencing  the  authorization  of the
execution  thereof by  Certificateholders  shall be  subject to such  reasonable
regulations as the Trustee may prescribe;  provided,  however , that such method
shall always be by affirmation and in writing.

      Notwithstanding  any contrary  provision of this  Agreement,  no amendment
shall be made to this  Agreement or any  Custodial  Agreement  unless the Master
Servicer  and the Trustee  shall have  received  an Opinion of  Counsel,  at the
expense  of the party  requesting  such  amendment  (or,  if such  amendment  is
required by any Rating  Agency to maintain the rating  issued by it or requested
by the  Trustee  for any  purpose  described  in clause (i) or (ii) of the first
sentence of this Section,  then at the expense of the Trust Fund), to the effect
that such  amendment  will not cause an Adverse  REMIC Event with respect to any
REMIC Pool or an Adverse Grantor Trust Event.

      Prior to the execution of any amendment to this Agreement or any Custodial
Agreement,  the Trustee,  the Fiscal Agent,  the Special Servicer and the Master
Servicer shall be entitled to receive and rely  conclusively  upon an Opinion of
Counsel,  at the expense of the party  requesting  such  amendment  (or, if such
amendment is required by any Rating  Agency to maintain the rating  issued by it
or  requested by the Trustee for any purpose  described  in clause (i),  (ii) or
(iv) (which do not modify or otherwise relate solely to the obligations,  duties
or rights of the  Trustee) of the first  sentence of this  Section,  then at the
expense of the Trust Fund)  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.


                                      171

<PAGE>



          Section 11.8.  Confirmation of Intent.
                         ----------------------

      It is the express  intent of the parties hereto that the conveyance of the
Trust Fund  (including  the Mortgage  Loans) by the  Depositor to the Trustee on
behalf of  Certificateholders  as contemplated by this Agreement and the sale by
the Depositor of the Certificates be, and be treated for all purposes as, a sale
by the  Depositor of the  undivided  portion of the  beneficial  interest in the
Trust Fund represented by the Certificates. It is, further, not the intention of
the  parties  that such  conveyance  be deemed a pledge of the Trust Fund by the
Depositor to the Trustee to secure a debt or other  obligation of the Depositor.
However, in the event that, notwithstanding the intent of the parties, the Trust
Fund is held to continue to be property of the Depositor then (a) this Agreement
shall also be deemed to be a security  agreement  under  applicable law; (b) the
transfer of the Trust Fund  provided for herein shall be deemed to be a grant by
the Depositor to the Trustee on behalf of Certificateholders of a first priority
security interest in all of the Depositor's  right, title and interest in and to
the Trust Fund and all amounts  payable to the holders of the Mortgage  Loans in
accordance with the terms thereof and all proceeds of the conversion,  voluntary
or  involuntary,  of the foregoing into cash,  instruments,  securities or other
property,  including,  without limitation, all amounts from time to time held or
invested in the Collection Account,  the Grantor Trust Collection  Account,  the
REO  Accounts,   the  Interest  Reserve  Accounts,  the  Reserve  Accounts,  the
Distribution Account and the Grantor Trust Distribution Account,  whether in the
form of cash,  instruments,  securities or other property; (c) the possession by
the  Trustee  (or the  Custodian  or any other agent on its behalf) of Notes and
such other  items of  property  as  constitute  instruments,  money,  negotiable
documents  or chattel  paper  shall be deemed to be  "possession  by the secured
party" for  purposes of  perfecting  the security  interest  pursuant to Section
9-305  of  the  Missouri  and  Illinois  Uniform   Commercial   Codes;  and  (d)
notifications to Persons holding such property, and acknowledgments, receipts or
confirmations from Persons holding such property,  shall be deemed notifications
to,   or   acknowledgments,    receipts   or   confirmations   from,   financial
intermediaries, bailees or agents (as applicable) of the Trustee for the purpose
of perfecting such security interest under applicable law. Any assignment of the
interest of the Trustee pursuant to any provision hereof shall also be deemed to
be an assignment of any security  interest created hereby.  The Depositor shall,
and upon the request of the Master  Servicer,  the Trustee shall,  to the extent
consistent with this Agreement (and at the expense of the Trust Fund), take such
actions as may be  necessary to ensure that,  if this  Agreement  were deemed to
create a security  interest in the Mortgage Loans,  such security interest would
be deemed to be a perfected security interest of first priority under applicable
law and will be maintained as such throughout the term of this Agreement.  It is
the intent of the  parties  that such a  security  interest  would be  effective
whether any of the Certificates are sold, pledged or assigned.



                            [SIGNATURE PAGE FOLLOWS]


                                      172
<PAGE>


      IN WITNESS  WHEREOF,  the  Depositor,  the Master  Servicer,  the  Special
Servicer,  the Trustee and the Fiscal Agent have caused their names to be signed
to this Pooling and Servicing  Agreement by their respective  officers thereunto
duly authorized as of the day and year first above written.



                                    PNC MORTGAGE ACCEPTANCE
                                    CORP., as Depositor


                                    By:/s/ Douglas D. Danforth, Jr.
                                       ---------------------------------------
                                          Name: Douglas D. Danforth, Jr.
                                          Title: President


                                    MIDLAND LOAN SERVICES, INC.,
                                    as Master Servicer


                                    By:/s/ Lawrence D. Ashley
                                       ---------------------------------------
                                          Name: Lawrence D. Ashley
                                          Title: Senior Vice President


                                    GMAC COMMERCIAL MORTGAGE
                                    CORPORATION,
                                    as Special Servicer


                                    By:/s/ Henry J. Bieber
                                       ---------------------------------------
                                          Name: Henry J. Bieber
                                          Title: Senior Vice President



                                    LASALLE  BANK  NATIONAL  ASSOCIATION,   as
                                     Trustee


                                    By:/s/ Brian D. Ames
                                       ---------------------------------------
                                          Name: Brian D. Ames
                                          Title: Vice President




<PAGE>


                                    ABN AMRO BANK N.V., as Fiscal Agent


                                    By:/s/ Russell M. Goldenberg
                                       ---------------------------------------
                                          Name: Russell M. Goldenberg
                                          Title: Group Senior Vice President


                                    By:/s/ Cynthia Reis
                                       ---------------------------------------
                                          Name: Cynthia Reis
                                          Title: First Vice President