<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) August 20, 1999
Salomon Brothers Mortgage Securities VII, Inc.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
<TABLE>
<S> <C> <C>
Delaware 333-72647-07 13-3439681
- ---------------------------------------------------------------------------------------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
388 Greenwich Street, New York, New York 10013
- ---------------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code (212) 783-5635
Seven World Trade Center, New York, New York, 10048
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
================================================================================
<PAGE>
Item 5. Other Events.
On August 20, 1999, a single series of certificates, entitled Salomon
Brothers Mortgage Securities VII, Inc., Commercial Mortgage Pass-Through Series
1999-C1 (the "Certificates"), was issued pursuant to a pooling and servicing
agreement (the "Pooling and Servicing Agreement"), dated as of August 1, 1999,
among Salomon Brothers Mortgage Securities VII, Inc. as depositor (the
"Depositor"), Salomon Brothers Realty Corp. ("SBRC") and Llama Capital Mortgage
Company Limited Partnership ("Llama") as mortgage loan sellers (SBRC and Llama
together in such capacity, the "Mortgage Loan Sellers"), GMAC Commercial
Mortgage Corporation as masters servicer (the "Master Servicer"), BNY Asset
Solutions LLC as special servicer (the "Special Servicer"), and The Chase
Manhattan Bank as trustee (the "Trustee"). The Certificates will consist of 18
classes identified as the "Class X Certificates", the "Class A-1 Certificates",
the "Class A-2 Certificates", the "Class B Certificates", the "Class C
Certificates", the "Class D Certificates", the "Class E Certificates", the
"Class F Certificates", the "Class G Certificates", the "Class H Certificates",
the "Class J Certificates", the "Class K Certificates", the "Class L
Certificates", the "Class M Certificates", the "Class R-I Certificates", the
"Class R-II Certificates", the "Class R-III Certificates" and the "Class Y
Certificates", respectively. The Certificates were issued in exchange for, and
to evidence the entire beneficial ownership interest in, the assets of a trust
fund (the "Trust Fund"), consisting primarily of a segregated pool (the
"Mortgage Pool") of 213 multifamily and commercial mortgage loans (the "Mortgage
Loans"), having, as of the close of business on August 1, 1999 (the "Cut-off
Date"), an aggregate principal balance of $734,852,899, (the "Initial Pool
Balance"), after taking into account all payments of principal due on the
Mortgage Loans on or before such date, whether or not received. The Depositor
acquired the Mortgage Loans from the Mortgage Loan Sellers, pursuant to certain
mortgage loan purchase agreements between the Depositor and each of the Mortgage
Loan Sellers. SBRC is an affiliate of the Depositor. The Depositor transferred
the Mortgage Loans to the Trustee for the benefit of the holders of the
Certificates. The Depositor sold the Class X, Class A-1, Class A-2, Class B,
Class C, Class D, Class E and Class F Certificates to Salomon Smith Barney Inc.
("SSBI") and Bank of America Securities LLC ("BAS") as underwriters (SSBI and
BAS together in such capacity, the "Underwriters"), pursuant to an underwriting
agreement dated as of August 5, 1999 (the "Underwriting Agreement"), among the
Sponsor and the Underwriters. A form of the Pooling and Servicing Agreement is
attached hereto as Exhibit 99.1, and a form of Underwriting Agreement is
attached hereto as Exhibit 99.2.
The Class A-1 Certificates have an initial aggregate principal balance
(a "Certificate Balance") of $167,874,000. The Class A-2 Certificates have an
initial Certificate Balance of $355,708,000. The Class B Certificates have an
initial Certificate Balance of $38,580,000. The Class C Certificates have an
initial Certificate Balance of $38,580,000. The Class D Certificates have an
initial Certificate Balance of $11,023,000. The Class E Certificates have an
initial Certificate Balance of $27,557,000. The Class F Certificates have an
initial Certificate Balance of $11,022,000. The Class X Certificates have an
initial notional amount of $734,852,898.
Capitalized terms used herein and not otherwise defined shall have the
meanings assigned to them in the Pooling and Servicing Agreement.
-2-
<PAGE>
Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired:
Not applicable.
(b) Pro forma financial information:
Not applicable.
(c) Exhibits:
<TABLE>
<CAPTION>
Exhibit No. Description
<S> <C>
99.1 Pooling and Servicing Agreement
99.2 Underwriting Agreement
</TABLE>
-3-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: August 30, 1999
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.
By: /s/ Angela Hutzel
___________________________________
Name: Angela Hutzel
Title: Assistant Vice President
-4-
<PAGE>
EXHIBIT INDEX
The following exhibits are filed herewith:
<TABLE>
<CAPTION>
Exhibit No.
- ------------
<S> <C>
99.1 Pooling and Servicing Agreement
99.2 Underwriting Agreement
</TABLE>
-5-
<PAGE>
EXECUTION COPY
================================================================================
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
as Depositor,
SALOMON BROTHERS REALTY CORP.
and
LLAMA CAPITAL MORTGAGE COMPANY LIMITED PARTNERSHIP
as Mortgage Loan Sellers,
GMAC COMMERCIAL MORTGAGE CORPORATION
as Master Servicer,
BNY ASSET SOLUTIONS LLC
as Special Servicer,
THE CHASE MANHATTAN BANK
as Trustee
---------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of August 1, 1999
----------------------------------------
$734,852,898
Commercial Mortgage Pass-Through Certificates
Series 1999-C1
================================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C> <C>
ARTICLE I
DEFINITIONS; CERTAIN CALCULATIONS IN RESPECT OF
THE MORTGAGE POOL AND THE CERTIFICATES
1.01. Defined Terms............................................................................................4
1.02. Certain Calculations in Respect of the Mortgage Pool....................................................57
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES;
ORIGINAL ISSUANCE OF CERTIFICATES
2.01. Conveyance of Mortgage Loans............................................................................60
2.02. Acceptance of REMIC I by Trustee........................................................................64
2.03. Mortgage Loan Sellers' Repurchase of Mortgage Loans for Document Defects
and Certain Breaches of Representations and Warranties...............................................66
2.04. Representations and Warranties of the Depositor.........................................................68
2.05. Representations and Warranties of the Mortgage Loan Sellers.............................................69
2.06. Representations and Warranties of the Master Servicer...................................................84
2.07. Representations and Warranties of the Special Servicer..................................................86
2.08. Representations and Warranties of the Trustee...........................................................87
2.09. Acceptance of the Grantor Trusts by Trustee; Issuance of the
Class Y Certificates and the Class R-I Certificates..................................................89
2.10. Creation of the REMIC I Regular Interests and REMIC I Residual Interest.................................90
2.11. Conveyance of REMIC I Regular Interests; Acceptance of
REMIC II by the Trustee..............................................................................90
2.12. Issuance of the Class R-II Certificates; Creation of
the REMIC II Regular Interests.......................................................................90
2.13. Conveyance of REMIC II Regular Interests; Acceptance of
REMIC III by the Trustee.............................................................................91
2.14. Issuance of the REMIC III Certificates..................................................................91
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C> <C>
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
3.01. Administration of the Mortgage Loans....................................................................92
3.02. Collection of Mortgage Loan Payments....................................................................93
3.03. Collection of Taxes, Assessments and Similar Items;
Servicing Accounts; Reserve Accounts.................................................................94
3.04. Collection Account, Distribution Account and Interest Reserve Account...................................95
3.05. Permitted Withdrawals From the Collection Account,
the Distribution Account and the Interest Reserve Account............................................99
3.06. Investment of Funds in the Collection Account, the REO Account,
the Servicing Accounts and the Reserve Accounts.....................................................103
3.07. Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage..........................105
3.08. Enforcement of Due-On-Sale Clauses; Assumption Agreements;
Subordinate Financing...............................................................................108
3.09. Realization Upon Defaulted Mortgage Loans..............................................................111
3.10. Trustee to Cooperate; Release of Mortgage Files........................................................114
3.11. Servicing Compensation; Interest on Servicing Advances;
Payment of Certain Expenses; Obligations of the Trustee
Regarding Back-up Servicing Advances................................................................115
3.12. Inspections; Collection of Financial Statements........................................................121
3.13. Annual Statement as to Compliance......................................................................122
3.14. Reports by Independent Public Accountants..............................................................123
3.15. Access to Certain Information..........................................................................124
3.16. Title to REO Property; REO Account.....................................................................124
3.17. Management of REO Property.............................................................................125
3.18. Sale of Defaulted Mortgage Loans and REO Properties....................................................128
3.19. Additional Obligations of the Master Servicer,
the Special Servicer and the Depositor..............................................................132
3.20. Modifications, Waivers, Amendments and Consents........................................................136
3.21. Transfer of Servicing Between Master Servicer and
Special Servicer; Record Keeping....................................................................141
3.22. Sub-Servicing Agreements...............................................................................142
3.23. Controlling Class Representative.......................................................................145
3.24. Certain Rights and Powers of the Controlling Class Representative......................................146
3.25. Designation of Special Servicer by the Majority Certificateholder
of the Controlling Class............................................................................149
3.26. No Solicitation of Prepayments.........................................................................150
</TABLE>
-ii-
<PAGE>
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C> <C>
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS AND RELATED MATTERS
4.01. Distributions on the Certificates......................................................................151
4.02. Statements to Certificateholders; Certain Reports by
the Master Servicer and the Special Servicer........................................................159
4.03. P&I Advances...........................................................................................167
4.04. Allocation of Realized Losses and Additional Trust Fund Expenses
to the Principal Balance Certificates...............................................................169
4.05. Deemed Distributions on, and Allocations of Realized Losses
and Additional Trust Fund Expenses to, the REMIC I Regular Interests
and REMIC II Regular Interests; Deemed Distributions on
the Loan REMIC Interests............................................................................169
ARTICLE V
THE CERTIFICATES
5.01. The Certificates.......................................................................................172
5.02. Registration of Transfer and Exchange of Certificates..................................................172
5.03. Book-Entry Certificates................................................................................178
5.04. Mutilated, Destroyed, Lost or Stolen Certificates......................................................180
5.05. Persons Deemed Owners..................................................................................180
5.06. Certification by Certificate Owners....................................................................180
ARTICLE VI
THE DEPOSITOR, THE MORTGAGE LOAN SELLERS,
THE MASTER SERVICER AND THE SPECIAL SERVICER
6.01. Liability of the Depositor, the Mortgage Loan Sellers, the Master Servicer
and the Special Servicer............................................................................182
6.02. Merger, Consolidation or Conversion of the Depositor,
the Mortgage Loan Sellers, the Master Servicer or the Special Servicer..............................182
6.03. Limitation on Liability of the Depositor, the Master Servicer,
the Special Servicer and Others.....................................................................183
6.04. Master Servicer and Special Servicer Not to Resign.....................................................184
6.05. Rights of the Depositor and the Trustee in Respect of the
Master Servicer and the Special Servicer............................................................185
</TABLE>
-iii-
<PAGE>
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C> <C>
ARTICLE VII
DEFAULT
7.01. Events of Default......................................................................................186
7.02. Trustee to Act; Appointment of Successor...............................................................189
7.03. Notification to Certificateholders.....................................................................190
7.04. Waiver of Events of Default............................................................................190
7.05. Additional Remedies of Trustee Upon Event of Default...................................................191
ARTICLE VIII
CONCERNING THE TRUSTEE
8.01. Duties of the Trustee..................................................................................192
8.02. Certain Matters Affecting the Trustee..................................................................193
8.03. Trustee Not Liable for Validity or Sufficiency of Certificates or Mortgage Loans.......................195
8.04. Trustee May Own Certificates...........................................................................195
8.05. Fees of the Trustee; Indemnification of Trustee........................................................195
8.06. Eligibility Requirements for the Trustee...............................................................196
8.07. Resignation and Removal of the Trustee.................................................................196
8.08. Successor Trustee......................................................................................197
8.09. Merger or Consolidation of the Trustee.................................................................198
8.10. Appointment of Co-Trustee or Separate Trustee..........................................................198
8.11. Appointment of Custodians..............................................................................199
8.12. Access to Certain Information..........................................................................200
8.13. Filings with the Securities and Exchange Commission....................................................201
ARTICLE IX
TERMINATION
9.01. Termination Upon Repurchase or Liquidation of All Mortgage Loans.......................................204
9.02. Additional Termination Requirements....................................................................206
</TABLE>
-iv-
<PAGE>
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C> <C>
ARTICLE X
ADDITIONAL REMIC PROVISIONS
10.01. REMIC Administration...................................................................................208
10.02. Depositor, Master Servicer, Special Servicer and Trustee to
Cooperate with Tax Administrator....................................................................212
10.03. Appointment of Tax Administrators......................................................................212
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.01. Amendment..............................................................................................214
11.02. Recordation of Agreement; Counterparts.................................................................215
11.03. Limitation on Rights of Certificateholders.............................................................216
11.04. Governing Law..........................................................................................216
11.05. Notices................................................................................................217
11.06. Severability of Provisions.............................................................................217
11.07. Successors and Assigns; Beneficiaries..................................................................217
11.08. Article and Section Headings...........................................................................218
11.09. Notices to the Rating Agencies.........................................................................218
11.10. Notices to Controlling Class Representative............................................................219
</TABLE>
-v-
<PAGE>
<TABLE>
<CAPTION>
SCHEDULES AND EXHIBITS
- -----------------------
<S> <C>
SCHEDULE I Mortgage Loan Schedule
SCHEDULE II Sub-Servicing Agreements in Effect as of the Closing Date
SCHEDULE III Schedule of Exceptions to Mortgage File Delivery
EXHIBIT A-1 Form of Class X Certificate
EXHIBIT A-2 Form of Class [A-1] [A-2] Certificate
EXHIBIT A-3 Form of Class [B] [C] [D] [E] Certificate
EXHIBIT A-4 Form of Class [F] [G] [H] [J] [K] [L] [M] Certificate
EXHIBIT A-5 Form of Class [R-I] [R-II] [R-III] Certificate
EXHIBIT A-6 Form of Class Y Certificate
EXHIBIT B-1 Form of Transferor Certificate Pursuant to Section 5.02(b)
EXHIBIT B-2 Form I of Transferee Certificate Pursuant to Section 5.02(b)
for Transfers of Non-Registered Certificates [For QIBs]
EXHIBIT B-3 Form II of Transferee Certificate Pursuant to Section 5.02(b) for
Transfers of Non-Registered Certificates [For Institutional Accredited
Investors]
EXHIBIT C-1 Form of Transfer Affidavit and Agreement Pursuant to Section 5.02(d)(i)(B)
EXHIBIT C-2 Form of Transferor Certificate Pursuant to Section 5.02(d)(i)(D)
EXHIBIT D Form of Transferee Certificate in Connection with ERISA
EXHIBIT E Request for Release
EXHIBIT F Form of Distribution Date Statement
EXHIBIT G-1 Form of Delinquent Loan Status Report
EXHIBIT G-2 Form of Historical Loan Modification Report
EXHIBIT G-3 Form of Historical Loss Estimate Report
EXHIBIT G-4 Form of REO Status Report
EXHIBIT G-5 Form of Special Servicer Loan Status Report
EXHIBIT G-6 Form of Operating Statement Analysis Report
EXHIBIT G-7 Form of Comparative Financial Status Report
EXHIBIT G-8 Form of Watchlist
EXHIBIT G-9 Form of NOI Adjustment Worksheet
EXHIBIT H-1 CSSA Standard Reporting Set-Up Layout
EXHIBIT H-2 CSSA Loan Periodic Update File
EXHIBIT H-3 CSSA Standard Property Data File
</TABLE>
-vi-
<PAGE>
This Pooling and Servicing Agreement (this "Agreement"), is
dated and effective as of August 1, 1999, among SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC. as Depositor, SALOMON BROTHERS REALTY CORP. and LLAMA
CAPITAL MORTGAGE COMPANY LIMITED PARTNERSHIP as Mortgage Loan Sellers, GMAC
COMMERCIAL MORTGAGE CORPORATION as Master Servicer, BNY ASSET SOLUTIONS LLC as
Special Servicer, and THE CHASE MANHATTAN BANK as Trustee.
PRELIMINARY STATEMENT:
The Depositor intends to sell Certificates, to be issued
hereunder in multiple Classes, which in the aggregate will evidence the entire
beneficial ownership interest in the Trust to be created hereunder.
As provided herein, the Tax Administrator will elect to treat
the segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement as a REMIC for federal income tax
purposes, and such segregated pool of assets will be designated as "REMIC I",
except that the Park View Plaza Mortgage Loan, the 625 Polk Street Mortgage
Loan, the Fourth Avenue Marketplace Mortgage Loan, the GTE Plaza Shopping Center
Mortgage Loan, the Holmead Apartments Mortgage Loan, the Parker Paints (Andresen
Plaza) Mortgage Loan and the 500 Third Street Mortgage Loan are each an asset of
a separate Loan REMIC, whose Loan REMIC Regular Interest is an asset of REMIC I
and, further, except that any Additional Interest collected in respect of the
ARD Loans after their Anticipated Repayment Dates will be an asset of a Grantor
Trust. The REMIC I Residual Interest is the sole "residual interest" in REMIC I
for purposes of the REMIC Provisions under federal income tax law. Each of the
REMIC I Regular Interests will relate to a specific Mortgage Loan or Loan REMIC
Regular Interest that is an asset of REMIC I; and if a REMIC I Regular Interest
relates to a Loan REMIC Regular Interest, then it will also relate to the
Mortgage Loan in the corresponding Loan REMIC. Each such REMIC I Regular
Interest will have: (i) a REMIC I Remittance Rate equal to or calculated based
upon the Net Mortgage Rate as of the Closing Date of the related Mortgage Loan;
and (ii) an initial Uncertificated Principal Balance equal to the Cut-off Date
Balance of the related Mortgage Loan. The Legal Final Distribution Date for each
REMIC I Regular Interest is the first Distribution Date following the related
Mortgage Loan's Stated Maturity Date. None of the REMIC I Regular Interests will
be certificated. The REMIC I Residual Interest and all of the Loan REMIC
Residual Interests will be assets of a Grantor Trust, whose ownership is
represented by the Class R-I Certificates.
<PAGE>
As provided herein, the Tax Administrator will elect to treat
the segregated pool of assets consisting of the REMIC I Regular Interests as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC II". The Class R-II Certificates will represent the sole
class of "residual interests" in REMIC II for purposes of the REMIC Provisions
under federal income tax law. The following table sets forth the designation,
the REMIC II Remittance Rate and the initial Uncertificated Principal Balance
for each of the REMIC II Regular Interests. The Legal Final Distribution Date
for each REMIC II Regular Interest is the first Distribution Date following the
Stated Maturity Date of the Mortgage Loan that has, as of the Closing Date, the
latest Stated Maturity Date. None of the REMIC II Regular Interests will be
certificated.
<TABLE>
<CAPTION>
Initial
REMIC II Uncertificated
Designation Remittance Rate Principal Balance
----------- --------------- --------------------
<S> <C> <C>
A-1 Variable(1) $167,874,000
A-2 Variable(1) $355,708,000
B Variable(1) $ 38,580,000
C Variable(1) $ 38,580,000
D Variable(1) $ 11,023,000
E Variable(1) $ 27,557,000
F Variable(1) $ 11,022,000
G Variable(1) $ 14,697,000
H Variable(1) $ 20,209,000
J Variable(1) $ 9,185,000
K Variable(1) $ 16,535,000
L Variable(1) $ 7,348,000
M Variable(1) $ 16,534,898
</TABLE>
- --------------------
(1) Calculated in accordance with the definition of "REMIC II Remittance Rate".
-2-
<PAGE>
As provided herein, the Tax Administrator will elect to treat
the segregated pool of assets consisting of the REMIC II Regular Interests as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC III". The Class R-III Certificates will represent the
sole class of "residual interests" in REMIC III for purposes of the REMIC
Provisions under federal income tax law. The following table irrevocably sets
forth the designation, the Pass-Through Rate and the initial Class Principal
Balance for each of the Classes of REMIC III Regular Certificates. The Legal
Final Distribution Date for each Class of REMIC III Regular Certificates is the
first Distribution Date following the Stated Maturity Date of the Mortgage Loan
that has, as of the Closing Date, the latest Stated Maturity Date.
<TABLE>
<CAPTION>
Initial Class
Designation Pass-Through Rate Principal Balance
- ----------- ----------------- -----------------
<S> <C> <C>
Class A-1 Variable(1) $167,874,000
Class A-2 Variable(1) $355,708,000
Class X Variable(1) (2)
Class B Variable(1) $ 38,580,000
Class C Variable(1) $ 38,580,000
Class D Variable(1) $ 11,023,000
Class E Variable(1) $ 27,557,000
Class F Variable(1) $ 11,022,000
Class G Variable(1) $ 14,697,000
Class H Variable(1) $ 20,209,000
Class J Variable(1) $ 9,185,000
Class K Variable(1) $ 16,535,000
Class L Variable(1) $ 7,348,000
Class M Variable(1) $ 16,534,898
</TABLE>
- ----------------
(1) Calculated in accordance with the definition of "Pass-Through Rate".
(2) The Class X Certificates will not have a Class Principal Balance. Instead,
such Class of Certificates will accrue interest as provided herein on a
Class Notional Amount that is, as of any date of determination, equal to
the then aggregate Uncertificated Principal Balance of all the REMIC II
Regular Interests.
As provided herein, the Trustee shall take all actions
necessary to ensure that the respective portions of the Trust Fund consisting of
(a) the collections of Additional Interest and the Class Y Sub-Account (each as
defined herein) and (b) the REMIC I Residual Interest and the Loan REMIC
Residual Interests (each as defined herein), each maintains its status as a
Grantor Trust.
In consideration of the mutual agreements herein contained,
the Depositor, the Mortgage Loan Sellers, the Master Servicer, the Special
Servicer and the Trustee agree as follows:
-3-
<PAGE>
ARTICLE I
DEFINITIONS; CERTAIN CALCULATIONS IN RESPECT OF
THE MORTGAGE POOL AND THE CERTIFICATES
SECTION 1.01. Defined Terms.
Whenever used in this Agreement, including in the Preliminary
Statement, the following words and phrases, unless the context otherwise
requires, shall have the meanings specified in this Article.
"30/360 Basis": The accrual of interest calculated on the
basis of a 360-day year consisting of twelve 30-day months.
"30/360 Mortgage Loan": A Mortgage Loan that accrues interest
on a 30/360 Basis.
"500 Third Street Mortgage Loan": The Mortgage Loan identified
on the Mortgage Loan Schedule by loan number 6600426.
"500 Third Street REMIC": The segregated pool of assets
subject hereto, with respect to which the 500 Third Street REMIC Declaration has
been made, consisting of the 500 Third Street Mortgage Loan or any REO Property
acquired in respect thereof.
"500 Third Street REMIC Declaration": The REMIC Declaration
dated as of June 21, 1999 with respect to the assets of the 500 Third Street
REMIC.
"500 Third Street REMIC Regular Interest": The uncertificated
"regular interest", within the meaning of Section 860G(a)(1) of the Code, in the
500 Third Street REMIC, issued pursuant to the 500 Third Street REMIC
Declaration. The principal balance of the 500 Third Street REMIC Regular
Interest shall equal the principal balance of the 500 Third Street Mortgage Loan
(or, if applicable, the deemed principal balance of any successor REO Loan)
outstanding from time to time. Payments and other collections of amounts
received on or in respect of the 500 Third Street Mortgage Loan (or any related
REO Property) and allocable to interest (adjusted to the related Loan REMIC
Remittance Rate) on, principal of and/or Prepayment Premiums in respect of such
Mortgage Loan (or any successor REO Loan) shall be deemed paid on the 500 Third
Street REMIC Regular Interest to REMIC I at the time such amounts are so
received. The terms of the 500 Third Street REMIC Regular Interest are otherwise
set forth in the related Loan REMIC Declaration.
"500 Third Street REMIC Residual Interest": The sole
uncertificated "residual interest", within the meaning of Section 860G(a)(2) of
the Code, in the 500 Third Street REMIC, issued pursuant to the 500 Third Street
REMIC Declaration.
"625 Polk Street Mortgage Loan": The Mortgage Loan identified
on the Mortgage Loan Schedule by loan number 6601035.
-4-
<PAGE>
"625 Polk Street REMIC": The segregated pool of assets subject
hereto, with respect to which the 625 Polk Street REMIC Declaration has been
made, consisting of the 625 Polk Street Mortgage Loan or any REO Property
acquired in respect thereof.
"625 Polk Street REMIC Declaration": The REMIC Declaration
dated as of July 27, 1999 with respect to the assets of the 625 Polk Street
REMIC.
"625 Polk Street REMIC Regular Interest": The uncertificated
"regular interest", within the meaning of Section 860G(a)(1) of the Code, in the
625 Polk Street REMIC, issued pursuant to the 625 Polk Street REMIC Declaration.
The principal balance of the 625 Polk Street REMIC Regular Interest shall equal
the principal balance of the 625 Polk Street Mortgage Loan (or, if applicable,
the deemed principal balance of any successor REO Loan) outstanding from time to
time. Payments and other collections of amounts received on or in respect of the
625 Polk Street Mortgage Loan (or any related REO Property) and allocable to
interest (adjusted to the related Loan REMIC Remittance Rate) on, principal of
and/or Prepayment Premiums in respect of such Mortgage Loan (or any successor
REO Loan) shall be deemed paid on the 625 Polk Street REMIC Regular Interest to
REMIC I at the time such amounts are so received. The terms of the 625 Polk
Street REMIC Regular Interest are otherwise set forth in the related Loan REMIC
Declaration.
"625 Polk Street REMIC Residual Interest": The sole
uncertificated "residual interest", within the meaning of Section 860G(a)(2) of
the Code, in the 625 Polk Street REMIC, issued pursuant to the 625 Polk Street
REMIC Declaration.
"Accrued Certificate Interest": With respect to any Class of
REMIC III Regular Certificates, for any Distribution Date, one month's interest
(calculated on a 30/360 Basis) at the Pass-Through Rate applicable to such Class
of Certificates for such Distribution Date, accrued on the related Class
Principal Balance or Class Notional Amount, as the case may be, of such Class of
Certificates outstanding immediately prior to such Distribution Date. The
Accrued Certificate Interest in respect of any Class of REMIC III Regular
Certificates for any Distribution Date shall be deemed to have accrued during
the related Interest Accrual Period.
"Acquisition Date": With respect to any REO Property, the
first day on which such REO Property is considered to be acquired by the Trust
within the meaning of Treasury Regulation Section 1.856-6(b)(1), which is the
first day on which the Trust is treated as the owner of such REO Property for
federal income tax purposes.
"Actual/360 Basis": The accrual of interest calculated on the
basis of the actual number of days elapsed during any calendar month in a year
assumed to consist of 360 days.
"Actual/360 Mortgage Loan": A Mortgage Loan that accrues
interest on an Actual/360 Basis.
"Actual/365 Basis": The accrual of interest calculated on the
basis of the actual number of days elapsed during any calendar month in a normal
calendar year.
-5-
<PAGE>
"Actual/365 Mortgage Loan": A Mortgage Loan that accrues
interest on an Actual/365 Basis.
"Additional Interest": With respect to any ARD Loan after its
Anticipated Repayment Date, all interest accrued thereon at the Additional
Interest Rate.
"Additional Interest Rate": With respect to any ARD Loan after
its Anticipated Repayment Date, the incremental increase in the Mortgage Rate
for such Mortgage Loan resulting from the passage of such Anticipated Repayment
Date.
"Additional Trust Fund Expense": Any expense (including,
without limitation, Special Servicing Fees, Workout Fees, Liquidation Fees and,
to the extent not paid out of Default Charges, Advance Interest) incurred or
shortfall experienced with respect to the Trust Fund and not otherwise included
in the calculation of a Realized Loss, that would result in the REMIC III
Regular Certificateholders' receiving less than the full amount of principal
and/or Distributable Certificate Interest to which they are entitled on any
Distribution Date.
"Additional Yield Amount": As defined in Section 4.01(a).
"Adjusted REMIC II Remittance Rate": With respect to REMIC II
Regular Interests B, C, D, E, F and G, for any Distribution Date, a rate per
annum equal to, in the case of each such REMIC II Regular Interest, the REMIC II
Remittance Rate in respect of such REMIC II Regular Interest for such
Distribution Date; and, with respect to each other REMIC II Regular Interest,
for any Distribution Date, a rate per annum equal to the lesser of (i) the REMIC
II Remittance Rate in respect of such REMIC II Regular Interest for such
Distribution Date and (ii) the "Fixed Cap Rate" specified below with respect to
such REMIC II Regular Interest:
<TABLE>
<CAPTION>
REMIC II Regular Interest Fixed Cap Rate
- ------------------------- --------------
<S> <C>
A-1 7.075% per annum
A-2 7.150% per annum
H 7.000% per annum
J 7.000% per annum
K 7.000% per annum
L 7.000% per annum
M 7.000% per annum
</TABLE>
"Administrative Fee Rate": With respect to each Mortgage Loan
(and any successor REO Loan), the sum of the Master Servicing Fee Rate and the
Trustee Fee Rate.
"Advance": Any P&I Advance or Servicing Advance.
"Advance Interest": Interest accrued on any Advance at the
Reimbursement Rate and payable to the Master Servicer, the Special Servicer or
the Trustee, as the case may be, all in accordance with Section 3.11(f) or
Section 4.03(d), as applicable.
-6-
<PAGE>
"Adverse Grantor Trust Event": Either (i) any impairment of
the status of either Grantor Trust Pool as a Grantor Trust or (ii) the
imposition of a tax upon either Grantor Trust Pool or any of its assets or
transactions.
"Adverse REMIC Event": With respect to each REMIC Pool, either
(i) the endangerment of the status of such REMIC Pool as a REMIC or (ii) except
as permitted by Section 3.17(a), the imposition of a tax upon such REMIC or any
of its assets or transactions (including, without limitation, the tax on
prohibited transactions as defined in Section 860F(a)(2) of the Code and the tax
on certain contributions set forth in Section 860G(d) of the Code).
"Affiliate": With respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have the meanings correlative to the foregoing.
"Agreement": This Pooling and Servicing Agreement, together
with all amendments hereof and supplements hereto.
"Anticipated Repayment Date" or "ARD": With respect to any ARD
Loan, the date specified on the related Mortgage Note, as of which Additional
Interest shall begin to accrue on such Mortgage Loan, which date is prior to the
Stated Maturity Date for such Mortgage Loan.
"Applicable State Law": For purposes of Article X, the
Applicable State Law shall be (a) the laws of the State of New York, (b) the
laws of the states in which the Corporate Trust Office of the Trustee and the
Primary Servicing Offices of the Master Servicer and the Special Servicer are
located, (c) the laws of the states in which any Mortgage Loan documents are
held and/or any REO Properties are located, (d) such other state and local law
whose applicability shall have been brought to the attention of the Tax
Administrator by either (i) an Opinion of Counsel delivered to it or (ii)
written notice from the appropriate taxing authority as to the applicability of
such state law, and (e) such other state or local law as to which the Tax
Administrator has actual knowledge of applicability.
"Appraisal": With respect to any Mortgaged Property or REO
Property as to which an appraisal is required to be performed pursuant to the
terms of this Agreement, a narrative appraisal complying with USPAP (or, in the
case of Mortgage Loans and REO Loans with a Stated Principal Balance as of the
date of such appraisal of $1,000,000 or less, a limited appraisal and a summary
report) that (i) indicates the "market value" of the subject property, as
defined in 12 C.F.R. 'SS'225.62(g), taking account of any reserves in respect of
the subject property for maintenance and capital improvements, and (ii) is
conducted by a Qualified Appraiser.
-7-
<PAGE>
"Appraisal Reduction Amount": With respect to any Required
Appraisal Loan, an amount (calculated as of the Determination Date immediately
following the later of (a) the date on which the most recent Appraisal that
meets the requirements of Section 3.19(b) was obtained in respect of such
Required Appraisal Loan by the Master Servicer or the Special Servicer, as the
case may be, and (b) the earliest of the relevant dates in respect of such
Required Appraisal Loan specified in the first sentence of Section 3.19(b)
hereof) equal to the excess, if any, of (x) the sum of (i) the Stated Principal
Balance of such Required Appraisal Loan, (ii) to the extent not previously
advanced by or on behalf of the Master Servicer or the Trustee, all accrued and
unpaid interest (excluding, in the case of an ARD Loan after its Anticipated
Repayment Date, Additional Interest) on such Required Appraisal Loan through the
most recent Due Date prior to such Determination Date at a per annum rate equal
to the sum of the related Net Mortgage Rate and the Trustee Fee Rate, (iii) all
accrued but unpaid Master Servicing Fees and Special Servicing Fees in respect
of such Required Appraisal Loan, (iv) all related unreimbursed Advances made by
or on behalf of the Master Servicer, the Special Servicer or the Trustee in
respect of such Required Appraisal Loan, together with all unpaid Advance
Interest accrued on such Advances, and (v) all currently due but unpaid real
estate taxes and assessments, insurance premiums and, if applicable, ground
rents in respect of the related Mortgaged Property or REO Property (net of any
Escrow Payments or other reserves held by the Master Servicer or the Special
Servicer with respect to any such item), over (y) 90% of an amount equal to (i)
the Appraised Value of the related Mortgaged Property or REO Property, as
applicable, as determined by the most recent relevant Appraisal acceptable for
purposes of Section 3.19(b) hereof, net of (ii) the amount of any obligations
secured by liens on such property (other than in respect of items described in
clause (x)(v) above) that are prior to the lien of the Required Appraisal Loan.
Notwithstanding the foregoing, if an Appraisal is required to be obtained
pursuant to Section 3.19(b) but has not been obtained within the 60-day period
following any loan's becoming a Required Appraisal Loan (or during the 12-month
period prior thereto), then until the date such Appraisal is obtained the
"Appraisal Reduction Amount" for the subject Required Appraisal Loan will be
deemed to equal 25% of the Stated Principal Balance of such Required Appraisal
Loan; provided that upon receipt of an Appraisal acceptable for purposes of
Section 3.19(b) hereof, the Appraisal Reduction Amount for such Required
Appraisal Loan will be recalculated in accordance with the preceding sentence.
"Appraised Value": As of any date of determination, the
appraised value of a Mortgaged Property based upon the most recent Appraisal
obtained pursuant to this Agreement.
"ARD Loan": A Mortgage Loan that provides for, if such
Mortgage Loan is not paid in full on or prior to its Anticipated Repayment Date,
(i) the accrual of Additional Interest thereon and (ii) the application (in
reduction of the outstanding principal of such Mortgage Loan) of an amount (in
addition to the principal portion of the Scheduled P&I Payment) equal to the
excess (if any) of certain net cash flow from the related Mortgaged Property
over the sum of the Scheduled P&I Payment and certain permitted property
expenses.
"Asset Status Report": As defined in Section 3.24(a).
-8-
<PAGE>
"Assignment of Leases": With respect to any Mortgaged
Property, any assignment of leases, rents and profits, or similar document or
instrument executed by the related Borrower, assigning to the mortgagee all of
the income, rents and profits derived from the ownership, operation, leasing or
disposition of all or a portion of such Mortgaged Property, in the form which
was duly executed, acknowledged and delivered, as amended, modified, renewed or
extended through the date hereof and from time to time hereafter.
"Assumed P&I Payment": With respect to any Balloon Mortgage
Loan for its Stated Maturity Date (provided that such Mortgage Loan has not been
paid in full, and no other Liquidation Event has occurred in respect thereof, on
or before the end of the Collection Period in which such Stated Maturity Date
occurs) and for each successive Due Date therefor as of which such Mortgage Loan
remains outstanding and part of the Trust Fund (if no Scheduled P&I Payment,
other than a delinquent Balloon Payment, is due for such Due Date), the
scheduled monthly payment of principal and/or interest deemed to be due in
respect thereof on such Due Date equal to the amount that would have been due in
respect of such Mortgage Loan on such Due Date if it had been required to
continue to accrue interest in accordance with its terms, and to pay principal
in accordance with the amortization schedule (if any), in effect immediately
prior to, and without regard to the occurrence of, its most recent scheduled
maturity date (as such terms and amortization schedule may have been modified,
and such maturity date may have been extended, in connection with a bankruptcy,
insolvency or similar proceeding involving the related Borrower or a
modification, waiver or amendment of such Mortgage Loan granted or agreed to by
the Master Servicer or Special Servicer pursuant to Section 3.20); and, with
respect to any REO Loan, for each Due Date that the related REO Property remains
part of the Trust Fund, the scheduled monthly payment of principal and/or
interest deemed to be due in respect thereof on such Due Date equal to the
Scheduled P&I Payment that was due (or, in the case of a Balloon Mortgage Loan
described in the preceding clause of this definition, the Assumed P&I Payment
that was deemed due) on the last Due Date prior to its becoming an REO Loan.
"Available Distribution Amount": With respect to any
Distribution Date, an amount equal to (a) the balance on deposit in the
Distribution Account as of 11:30 a.m. (New York City time) on such Distribution
Date (or such later time on such date as of which distributions are made on the
Certificates), including, without limitation, if and to the extent on deposit
therein as of such time, the Master Servicer Remittance Amount for the related
Master Servicer Remittance Date, any P&I Advances made by the Master Servicer or
the Trustee to cover uncollected Scheduled P&I Payments due and/or Assumed P&I
Payments deemed due during the related Collection Period, any payments made by
the Master Servicer to cover Prepayment Interest Shortfalls incurred during the
related Collection Period and, if such Distribution Date occurs during March of
any year, the aggregate of all amounts in respect of the Interest Reserve Loans
transferred from the Interest Reserve Account to the Distribution Account for
distribution on such Distribution Date, net of (b) any portion of the amounts
described in clause (a) of this definition that represents one or more of the
following: (i) collected Scheduled P&I Payments that are due on a Due Date
following the end of the related Collection Period, (ii) any payments of
principal (including, without limitation, Principal Prepayments) and interest,
Liquidation Proceeds and Insurance Proceeds received after the end of the
related Collection Period, (iii) Prepayment Premiums, (iv) Additional Interest,
(v) if such Distribution Date occurs during February of any year or during
January of any year that is not a leap year, the Interest Reserve Amounts with
respect to the Interest Reserve Loans required pursuant to Section 3.04(c)
-9-
<PAGE>
to be withdrawn from the Distribution Account and deposited into the Interest
Reserve Account on such Distribution Date, (vi) any amounts payable or
reimbursable to any Person from the Distribution Account pursuant to any of
clauses (ii) through (vi) of Section 3.05(b), and (vii) any amounts deposited in
the Distribution Account in error; provided that the Available Distribution
Amount for the Final Distribution Date shall be calculated without regard to
clauses (b)(i), (b)(ii) and (b)(v) of this definition.
"Balloon Mortgage Loan": Any Mortgage Loan that by its
original terms or by virtue of any modification entered into as of the Closing
Date provides for an amortization schedule extending beyond its Stated Maturity
Date and as to which, in accordance with such terms, the Scheduled P&I Payment
due on its Stated Maturity Date is at least two times larger than the Scheduled
P&I Payment due on the Due Date next preceding its Stated Maturity Date.
"Balloon Payment": With respect to any Balloon Mortgage Loan
as of any date of determination, the Scheduled P&I Payment payable on the Stated
Maturity Date of such Mortgage Loan.
"Bank": As defined in Section 2.08.
"Base Prospectus": That certain prospectus dated July 28,
1999, relating to trust funds established by the Depositor and publicly offered
mortgage pass-through certificates evidencing interests therein.
"Bloomberg": As defined in Section 4.02(a).
"Book-Entry Certificate": Any Certificate registered in the
name of the Depository or its nominee.
"Borrower": The obligor or obligors on a Mortgage Note,
including without limitation, any Person that has acquired the related Mortgaged
Property and assumed the obligations of the original obligor under the Mortgage
Note.
"Business Day": Any day other than a Saturday, a Sunday or a
day on which banking institutions in New York, New York, Houston, Texas, Dallas,
Texas, and the cities in which the Primary Servicing Offices of the Master
Servicer and Special Servicer and the Corporate Trust Office of the Trustee are
located, are authorized or obligated by law or executive order to remain closed.
"CERCLA": The Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
"Certificate": Any one of the Depositor's Commercial Mortgage
Pass-Through Certificates, Series 1999-C1, as executed by the Trustee and
authenticated and delivered hereunder by the Certificate Registrar.
-10-
<PAGE>
"Certificate Factor": With respect to any Class of REMIC III
Regular Certificates, as of any date of determination, a fraction, expressed as
a decimal carried to eight places, the numerator of which is the then related
Class Principal Balance or Class Notional Amount, as the case may be, and the
denominator of which is the related Initial Class Principal Balance or Initial
Class Notional Amount, as the case may be.
"Certificate Notional Amount": With respect to any Class X
Certificate, the hypothetical or notional principal amount on which such
Certificate accrues interest, which, as of any date of determination, is equal
to the product of (a) the Percentage Interest evidenced by such Certificate,
multiplied by (b) the then Class Notional Amount of the Class X Certificates.
"Certificate Owner": With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Certificate as reflected on the
books of the Depository or on the books of a Depository Participant or on the
books of an indirect participating brokerage firm for which a Depository
Participant acts as agent.
"Certificate Principal Balance": With respect to any Principal
Balance Certificate, as of any date of determination, the then-outstanding
principal amount of such Certificate equal to the product of (a) the Percentage
Interest evidenced by such Certificate, multiplied by (b) the then Class
Principal Balance of the Class of Certificates to which such Certificate
belongs.
"Certificate Register" and "Certificate Registrar": The
register maintained and the registrar appointed pursuant to Section 5.02.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register; provided that solely for
the purposes of giving any consent, approval or waiver pursuant to this
Agreement, any Certificate registered in the name of the Depositor, Llama, SBRC,
the Master Servicer, the Special Servicer, the Tax Administrator or the Trustee
or any Affiliate of any of them shall be deemed not to be outstanding, and the
Voting Rights to which any of them is entitled shall not be taken into account
in determining whether the requisite percentage of Voting Rights necessary to
effect any such consent, approval or waiver has been obtained, except as
otherwise provided in Sections 7.04 and 11.01 or except in connection with
Certificateholders of the Controlling Class exercising their rights under
Section 3.23 or Section 3.25, or unless such Persons collectively own an entire
Class of Certificates and only the Holders of such Class of Certificates are
entitled to grant such consent, approval or waiver. The Certificate Registrar
shall be entitled to request and rely upon a certificate of the Depositor,
Llama, SBRC, the Master Servicer, the Special Servicer or, if other than the
Trustee, the Tax Administrator, as the case may be, in determining whether a
Certificate is registered in the name of an Affiliate of such Person. All
references herein to "Holders" or "Certificateholders" shall reflect the rights
of Certificate Owners as they may indirectly exercise such rights through the
Depository and the Depository Participants, except as otherwise specified
herein; provided, however, that the parties hereto shall be required to
recognize as a "Holder" or "Certificateholder" only the Person in whose name a
Certificate is registered in the Certificate Register.
"Certificateholder Reports": As defined in Section 4.02(a).
-11-
<PAGE>
"Class": Collectively, all of the Certificates bearing the
same alphabetical and, if applicable, numerical class designation.
"Class A Certificate": Any one of the Class A-1 or Class A-2
Certificates.
"Class A-1 Certificate": Any one of the Certificates with a
"Class A-1" designation on the face thereof, substantially in the form of
Exhibit A-2 attached hereto, and evidencing a portion of a class of "regular
interests" in REMIC III for purposes of the REMIC Provisions.
"Class A-2 Certificate": Any one of the Certificates with a
"Class A-2" designation on the face thereof, substantially in the form of
Exhibit A-2 attached hereto, and evidencing a portion of a class of "regular
interests" in REMIC III for purposes of the REMIC Provisions.
"Class B Certificate": Any one of the Certificates with a
"Class B" designation on the face thereof, substantially in the form of Exhibit
A-3 attached hereto, and evidencing a portion of a class of "regular interests"
in REMIC III for purposes of the REMIC Provisions.
"Class C Certificate": Any one of the Certificates with a
"Class C" designation on the face thereof, substantially in the form of Exhibit
A-3 attached hereto, and evidencing a portion of a class of "regular interests"
in REMIC III for purposes of the REMIC Provisions.
"Class D Certificate": Any one of the Certificates with a
"Class D" designation on the face thereof, substantially in the form of Exhibit
A-3 attached hereto, and evidencing a portion of a class of "regular interests"
in REMIC III for purposes of the REMIC Provisions.
"Class E Certificate": Any one of the Certificates with a
"Class E" designation on the face thereof, substantially in the form of Exhibit
A-3 attached hereto, and evidencing a portion of a class of "regular interests"
in REMIC III for purposes of the REMIC Provisions.
"Class F Certificate": Any one of the Certificates with a
"Class F" designation on the face thereof, substantially in the form of Exhibit
A-3 attached hereto, and evidencing a portion of a class of "regular interests"
in REMIC III for purposes of the REMIC Provisions.
"Class G Certificate": Any one of the Certificates with a
"Class G" designation on the face thereof, substantially in the form of Exhibit
A-4 attached hereto, and evidencing a portion of a class of "regular interests"
in REMIC III for purposes of the REMIC Provisions.
"Class H Certificate": Any one of the Certificates with a
"Class H" designation on the face thereof, substantially in the form of Exhibit
A-4 attached hereto, and evidencing a portion of a class of "regular interests"
in REMIC III for purposes of the REMIC Provisions.
"Class J Certificate": Any one of the Certificates with a
"Class J" designation on the face thereof, substantially in the form of Exhibit
A-4 attached hereto, and evidencing a portion of a class of "regular interests"
in REMIC III for purposes of the REMIC Provisions.
-12-
<PAGE>
"Class K Certificate": Any one of the Certificates with a
"Class K" designation on the face thereof, substantially in the form of Exhibit
A-4 attached hereto, and evidencing a portion of a class of "regular interests"
in REMIC III for purposes of the REMIC Provisions.
"Class L Certificate": Any one of the Certificates with a
"Class L" designation on the face thereof, substantially in the form of Exhibit
A-4 attached hereto, and evidencing a portion of a class of "regular interests"
in REMIC III for purposes of the REMIC Provisions.
"Class M Certificate": Any one of the Certificates with a
"Class M" designation on the face thereof, substantially in the form of Exhibit
A-4 attached hereto, and evidencing a portion of a class of "regular interests"
in REMIC III for purposes of the REMIC Provisions.
"Class Notional Amount": The aggregate hypothetical or
notional amount on which the Class X Certificates collectively accrue interest
equal to the aggregate of the Uncertificated Principal Balances of all the REMIC
II Regular Interests outstanding from time to time.
"Class Principal Balance": The aggregate principal amount of
any Class of Principal Balance Certificates outstanding as of any date of
determination. As of the Closing Date, the Class Principal Balance of each such
Class of Certificates shall equal the Initial Class Principal Balance thereof.
On each Distribution Date, the Class Principal Balance of each Class of the
Principal Balance Certificates shall be permanently reduced by the amount of any
distributions of principal made thereon on such Distribution Date pursuant to
Section 4.01(a) and, if and to the extent appropriate, shall be further
permanently reduced on such Distribution Date as provided in Section 4.04.
"Class R-I Certificate": Any one of the Certificates with a
"Class R-I" designation on the face thereof, substantially in the form of
Exhibit A-6 attached hereto, and evidencing a beneficial ownership interest in
Grantor Trust R-I.
"Class R-II Certificate": Any one of the Certificates with a
"Class R-II" designation on the face thereof, substantially in the form of
Exhibit A-6 attached hereto, and evidencing the sole class of "residual
interests" in REMIC II for purposes of the REMIC Provisions.
"Class R-III Certificate": Any one of the Certificates with a
"Class R-III" designation on the face thereof, substantially in the form of
Exhibit A-6 attached hereto, and evidencing the sole class of "residual
interests" in REMIC III for purposes of the REMIC Provisions.
"Class X Certificate": Any one of the Certificates with a
"Class X" designation on the face thereof, substantially in the form of Exhibit
A-1 attached hereto, and evidencing a portion of a class of "regular interests"
in REMIC III for purposes of the REMIC Provisions.
"Class X Portion": As the context may require, either: (a)
that portion of the Uncertificated Accrued Interest in respect of any REMIC II
Regular Interest for any Distribution Date that is equal to the product of (i)
the entire amount of such Uncertificated Accrued Interest, multiplied by (ii) a
fraction (not less than zero or greater than one), the numerator of which is the
excess, if any, of the REMIC II Remittance Rate in respect of such REMIC II
Regular Interest for such Distribution Date, over the Adjusted REMIC II
Remittance Rate in respect of such REMIC II
-13-
<PAGE>
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; or (b) that portion of the Uncertificated Distributable
Interest in respect of any REMIC II Regular Interest for any Distribution Date
that is equal to the Class X Portion of the Uncertificated Accrued Interest in
respect of such REMIC II Regular Interest for such Distribution Date, reduced
(to not less than zero) by that portion, if any, of the Net Aggregate Prepayment
Interest Shortfall, if any, for such Distribution Date allocated to the Class X
Certificates that was, in turn, deemed allocated to such REMIC II Regular
Interest in accordance with the last sentence of the definition of
"Uncertificated Distributable Interest".
"Class Y Certificate": Any one of the Certificates with a
"Class Y" designation on the face thereof, substantially in the form of Exhibit
A-5 attached hereto, and evidencing a beneficial ownership interest in Grantor
Trust Y.
"Class Y Sub-Account": A sub-account of the Distribution
Account established pursuant to Section 3.04(b), which sub-account shall
constitute an asset of the Trust Fund and Grantor Trust Y, but not an asset of
any REMIC Pool.
"Closing Date": August 20, 1999.
"Code": The Internal Revenue Code of 1986 and regulations
promulgated thereunder, including proposed regulations to the extent that, by
reason of their proposed effective date, they could, as of the date of any
determination or opinion as to the tax consequences of any action or proposed
action or transaction, be applied to the Trust Fund, the Certificates and the
Certificateholders.
"Collection Account": The segregated account or accounts
created and maintained by the Master Servicer pursuant to Section 3.04(a) on
behalf of the Trustee in trust for Certificateholders, which shall be entitled
"GMAC Commercial Mortgage Corporation [or the name of any successor Master
Servicer], as Master Servicer, in trust for the registered holders of Salomon
Brothers Mortgage Securities VII, Inc., Commercial Mortgage Pass-Through
Certificates, Series 1999-C1".
"Collection Period": With respect to any Distribution Date,
the period that begins immediately following the Determination Date in the
calendar month prior to the month in which such Distribution Date occurs (or, in
the case of the initial Distribution Date, commencing immediately following the
Cut-off Date) and ending on and including the Determination Date in the calendar
month in which such Distribution Date occurs.
"Commission": The Securities and Exchange Commission or any
successor agency.
"Comparative Financial Status Report": A report substantially
in the form of Exhibit G-7 hereto, setting forth, among other things, the
occupancy and Debt Service Coverage Ratio for each Mortgage Loan or related
Mortgaged Property, as applicable, as of the date of the latest financial
information (covering no less than twelve (12) months) available immediately
preceding the preparation of such report and the revenue and net cash flow for
each of the following three (3)
-14-
<PAGE>
periods (to the extent such information is in the Master Servicer's or the
Special Servicer's possession): (i) the most current available year-to-date,
(ii) each of the previous two (2) full fiscal years stated separately; and (iii)
the "base year" (representing the original analysis of information used as of
the Cut-off Date).
"Confidential Information": As defined in Section 3.26.
"Controlling Class": As of any date of determination, the
outstanding Class of Principal Balance Certificates with the lowest Payment
Priority (the Class A Certificates being treated as a single Class for this
purpose) that has a then-outstanding Net Class Principal Balance at least equal
to 25% of its Initial Class Principal Balance thereof (or, if no Class of
Principal Balance Certificates has a then-outstanding Net Class Principal
Balance at least equal to 25% of its Initial Class Principal Balance, then the
"Controlling Class" shall be the outstanding Class of Principal Balance
Certificates with the then largest outstanding Net Class Principal Balance).
"Controlling Class Representative": As defined in Section
3.23(a).
"Corporate Trust Office": The principal corporate trust office
of the Trustee at which at any particular time its corporate trust business with
respect to this Agreement shall be administered, which office at the date of the
execution of this Agreement is located at 450 West 33rd Street, 14th Floor, New
York, New York 10001-2697.
"Corrected Mortgage Loan": Any Mortgage Loan that had been a
Specially Serviced Mortgage Loan but has ceased to be such in accordance with
the definition of "Specially Serviced Mortgage Loan" (other than by reason of a
Liquidation Event occurring in respect of such Mortgage Loan or a related
Mortgaged Property becoming an REO Property).
"Corresponding REMIC II Regular Interest": With respect to any
Class of Principal Balance Certificates, the REMIC II Regular Interest that has
an alphabetical and, if applicable, numerical designation that is the same as
the alphabetical and, if applicable, numerical Class designation for such Class
of Principal Balance Certificates.
"Corresponding Class of Principal Balance Certificates": With
respect to any REMIC II Regular Interest, the Class of Principal Balance
Certificates that has an alphabetical and, if applicable, numerical Class
designation that is the same as the alphabetical and, if applicable, numerical
designation for such REMIC II Regular Interest.
"Cross-Collateralized Mortgage Loan": Any Mortgage Loan that
is cross-collateralized and cross-defaulted with one or more other Mortgage
Loans.
"CSSA Reports": With respect to the Mortgage Pool, the CSSA
Standard Reporting Set-Up Layout substantially in the form attached hereto as
Exhibit H-1, the CSSA Loan Periodic Update File substantially in the form
attached hereto as Exhibit H-2 and the CSSA Standard Property Data File
substantially in the form attached hereto as Exhibit H-3.
-15-
<PAGE>
"Custodian": A Person who is at any time appointed by the
Trustee pursuant to Section 8.11 as a document custodian for the Mortgage Files,
which Person shall not be the Depositor, Llama, SBRC or an Affiliate of any of
them.
"Cut-off Date": August 1, 1999.
"Cut-off Date Balance": With respect to any Mortgage Loan, the
unpaid principal balance of such Mortgage Loan as of the Cut-off Date, after
application of all payments of principal due in respect of such Mortgage Loan on
or before such date, whether or not received.
"Debt Service Coverage Ratio": With respect to any Mortgage
Loan, other than a Cross-Collateralized Mortgage Loan, as of any date of
determination, the ratio of (x) the Net Operating Income (before payment of any
debt service on such Mortgage Loan) generated by the related Mortgaged Property
during the most recently ended period of not more than twelve months or less
than three (3) months for which financial statements (whether or not audited)
have been received by or on behalf of the Mortgage Loan Sellers (prior to the
Closing Date) or the Master Servicer or Special Servicer (following the Closing
Date) (such Net Operating Income to be annualized if the relevant period is less
than twelve months), to (y) the product of the amount of the Scheduled P&I
Payment in effect for such Mortgage Loan as of such date of determination,
multiplied by 12; and, with respect to any Cross-Collateralized Mortgage Loan,
as of any date of determination, the ratio of (x) the aggregate Net Operating
Income (before payment of any debt service on such Cross-Collateralized Mortgage
Loan and the Mortgage Loans with which it is cross-collateralized) generated by
the related Mortgaged Properties for such Cross-Collateralized Mortgage Loan and
the Mortgage Loans with which it is cross-collateralized during the most
recently ended period of not more than twelve months or less than three (3)
months for which financial statements (whether or not audited) have been
received by or on behalf of the Mortgage Loan Sellers (prior to the Closing
Date) or the Master Servicer or Special Servicer (following the Closing Date)
(such Net Operating Income to be annualized if the relevant period is less than
twelve months), to (y) the aggregate of the amount of the Scheduled P&I Payments
in effect for such Cross-Collateralized Mortgage Loan and the Mortgage Loans
with which it is cross-collateralized as of such date of determination,
multiplied by 12.
"Default Charges": Any and all Default Interest and late
payment charges paid or payable, as the context requires, in connection with a
default under a Mortgage Loan or any successor REO Loan.
"Default Interest": With respect to any Mortgage Loan (or
related REO Loan), any amounts collected thereon, other than late payment
charges and Prepayment Premiums, that represent interest (exclusive, if
applicable, of Additional Interest) in excess of interest accrued on the
principal balance of such Mortgage Loan (or REO Loan) at the related Mortgage
Rate, such excess interest arising out of a default under such Mortgage Loan or
otherwise arising out of the failure by the related Borrower to make the
Scheduled P&I Payment on the related Due Date even though such failure is not an
event of default under the related Mortgage Note or Mortgage.
-16-
<PAGE>
"Defaulted Mortgage Loan": Any Specially Serviced Mortgage
Loan as to which a material default has occurred or a default in respect of any
payment thereon is reasonably foreseeable, and which the Special Servicer has
determined, in its reasonable and good faith judgment, will become the subject
of a foreclosure sale or similar proceedings (the basis for which determination
shall be set forth in an Officer's Certificate to be delivered to the Master
Servicer and the Trustee).
"Defaulting Party": As defined in Section 7.01(b).
"Defeasance Collateral": With respect to any Defeasance Loan,
direct noncallable government obligations of the United States of America, as
are permitted under the terms of a Mortgage Note or related Mortgage Loan
documents, but only if such obligations or assets constitute "government
securities" under the defeasance rule of the REMIC Provisions.
"Defeasance Loan": Any Mortgage Loan which grants the holder
or the Borrower a Defeasance Option.
"Defeasance Option": With respect to any Defeasance Loan, the
right of a Borrower, pursuant to the terms of the related Mortgage Note or the
Mortgage, to obtain a release (or the right of the holder of such Mortgage Loan
to condition the release) of the related Mortgaged Property from the lien of the
related Mortgage upon the pledge to the Trustee of Defeasance Collateral.
"Definitive Certificate": As defined in Section 5.03(a).
"Delinquent Loan Status Report": A report or reports setting
forth, among other things, those Mortgage Loans which, as of the close of
business on the last day of the most recently ended calendar month were (i)
delinquent 30-59 days, (ii) delinquent 60-89 days, (iii) delinquent 90 days or
more, (iv) current but specially serviced, (v) in foreclosure but as to which
the related Mortgaged Property had not become REO Property, or (vi) related to a
Mortgaged Property which had become REO Property, substantially in the form of,
and including such additional information in respect of each such Mortgage Loan
as set forth on, Exhibit G-1 attached hereto.
"Depositor": Salomon Brothers Mortgage Securities VII, Inc.,
or its successor in interest.
"Depository": The Depository Trust Company or any successor
depository hereafter named. The nominee of the initial Depository for purposes
of registering those Certificates that are to be Book-Entry Certificates, is
Cede & Co. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(3) of the Uniform Commercial Code of the State of New
York and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act.
"Depository Participant": A broker, dealer, bank or other
financial institution or other Person for whom from time to time the Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
-17-
<PAGE>
"Determination Date": With respect to any Distribution Date,
the 11th day of the calendar month in which such Distribution Date occurs, or if
such 11th day is not a Business Day, the immediately preceding Business Day.
"Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers (other than the sale of an REO Property pursuant to Section
3.18(d)), the performance of any construction work thereon or any use of such
REO Property in a trade or business conducted by the Trust other than through an
Independent Contractor; provided, however, that the Special Servicer (or any
Sub-Servicer on behalf of the Special Servicer) shall not be considered to
Directly Operate an REO Property solely because the Special Servicer (or any
Sub-Servicer on behalf of the Special Servicer) establishes rental terms,
chooses tenants, enters into or renews leases, deals with taxes and insurance,
or makes decisions as to, or funds, repairs or capital expenditures with respect
to such REO Property (including, without limitation, construction activity to
effect repairs or in conjunction with leasing activity).
"Disqualified Organization": Any of the following: (i) the
United States or a possession thereof, any State or any political subdivision
thereof, or any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax and, except for Freddie Mac, a majority of its board of directors is not
selected by any such governmental unit), (ii) a foreign government,
international organization, or any agency or instrumentality of either of the
foregoing, (iii) any organization (except certain farmers' cooperatives
described in Section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code (unless such organization is subject to the tax imposed by
Section 511 of the Code on unrelated business taxable income), (iv) rural
electric and telephone cooperatives described in Section 1381 of the Code or (v)
any other Person so designated by the Tax Administrator based upon an Opinion of
Counsel that the holding of an Ownership Interest in a Residual Certificate by
such Person may cause the Trust or any Person having an Ownership Interest in
any Class of Certificates, other than such Person, to incur a liability for any
federal tax imposed under the Code that would not otherwise be imposed but for
the Transfer of an Ownership Interest in a Residual Certificate to such Person.
The terms "United States", "State" and "international organization" shall have
the meanings set forth in Section 7701 of the Code or successor provisions.
"Distributable Certificate Interest": With respect to any
Class of REMIC III Regular Certificates, for any Distribution Date, the Accrued
Certificate Interest in respect of such Class of Certificates for such
Distribution Date, reduced (to not less than zero) by that portion, if any, of
the Net Aggregate Prepayment Interest Shortfall for such Distribution Date
allocated to such Class of Certificates as provided below. The Net Aggregate
Prepayment Interest Shortfall, if any, for each Distribution Date shall be
allocated to the respective Classes of REMIC III Regular Certificates on such
Distribution Date as follows: first, to the respective Classes of REMIC III
Regular Certificates (other than the Senior Certificates), sequentially in
reverse alphabetical order of Class designation, in each case up to an amount
equal to the lesser of any remaining unallocated portion of such Net Aggregate
Prepayment Interest Shortfall and any Accrued Certificate Interest in respect of
the particular Class of Certificates for such Distribution Date; and thereafter,
if and to the extent that any portion of such Net Aggregate Prepayment Interest
Shortfall remains unallocated, among the respective Classes of Senior
Certificates, up to, and pro rata in accordance with, the respective
-18-
<PAGE>
amounts of Accrued Certificate Interest for each such Class of Senior
Certificates for such Distribution Date.
"Distribution Account": The segregated account or accounts
created and maintained by the Trustee pursuant to Section 3.04(b) in trust for
the Certificateholders, which shall be entitled "The Chase Manhattan Bank [or
the name of any successor Trustee], as Trustee, in trust for the registered
holders of Salomon Brothers Mortgage Securities VII, Inc., Commercial Mortgage
Pass-Through Certificates, Series 1999-C1".
"Distribution Date": The 18th day of any month, or if any such
18th day is not a Business Day, the next succeeding Business Day. The first
Distribution Date will be September 20, 1999.
"Distribution Date Statement": As defined in Section 4.02(a).
"Document Defect": As defined in Section 2.02(e).
"Due Date": With respect to (i) any Mortgage Loan on or prior
to its Stated Maturity Date, the day of the month set forth in the related
Mortgage Note on which each Scheduled P&I Payment on such Mortgage Loan is
scheduled to be first due; (ii) any Mortgage Loan after its Stated Maturity
Date, the day of the month set forth in the related Mortgage Note on which each
Scheduled P&I Payment on such Mortgage Loan had been scheduled to be first due;
and (iii) any REO Loan, the day of the month set forth in the related Mortgage
Note on which each Scheduled P&I Payment on the related Mortgage Loan had been
scheduled to be first due.
"EDGAR": The Electronic Data Gathering, Analysis, and
Retrieval System of the Commission, the computer system for the receipt,
acceptance, review and dissemination of documents submitted to the Commission in
electronic format.
"Eligible Account": Any of (i) an account maintained with a
federal or state chartered depository institution or trust company, including,
without limitation or the Trustee (if it meets the following rating criteria),
the long-term unsecured debt obligations of which are rated no less than "Aa3"
by Moody's and "AA" by Fitch, if the deposits are to be held in the account for
more than thirty (30) days, or the short-term unsecured debt obligations of
which are rated no less than "P-1" by Moody's and "F-1+" by Fitch, if the
deposits are to be held in the account for thirty (30) days or less, in each
case, at any time funds are on deposit therein, (ii) a segregated trust account
or accounts maintained with the corporate trust department of a federally
chartered depository institution or trust company, including, without
limitation, the Trustee, acting in its fiduciary capacity, (iii) a segregated
trust account or accounts maintained with the corporate trust department of a
state chartered depository institution or trust company, including, without
limitation, the Trustee, acting in its fiduciary capacity and subject to
regulations regarding fiduciary funds on deposit therein substantially similar
to 12 C.F.R. 'SS'9.10(b), (iv) any other account which would not result in the
qualification, downgrade or withdrawal of the rating then assigned by either
Rating Agency to any Class of Certificates (as confirmed in writing by each
Rating Agency), or (v) any account held at The Bank of New York for so long as
such bank's long-term unsecured debt ratings for deposits held for more than
thirty (30) days assigned by the Rating Agencies are no lower than the current
such ratings.
-19-
<PAGE>
"Emergency Advance": Any Servicing Advance (whether or not it
is a Servicing Advance that, pursuant hereto, the Special Servicer is required
to request the Master Servicer to make) that must be made within ten (10) days
of the Special Servicer's becoming aware that it must be made in order to avoid
any material penalty, any material harm to a Mortgaged Property or any other
material adverse consequence to the Trust Fund.
"Environmental Insurance Policy": With respect to any
Mortgaged Property or REO Property, any insurance policy covering pollution
conditions and/or other environmental conditions that is maintained from time to
time in respect of such Mortgaged Property or REO Property, as the case may be,
for the benefit of, among others, the Trustee on behalf of the
Certificateholders.
"Environmentally Insured Loans": As defined in Section
3.07(c).
"ERISA": The Employee Retirement Income Security Act of 1974,
as amended.
"Escrow Payment": Any payment received by the Master Servicer
or the Special Servicer for the account of any Borrower for application toward
the payment of real estate taxes, assessments, insurance premiums (including,
without limitation, with respect to any Environmental Insurance Policy) and
similar items in respect of the related Mortgaged Property.
"Event of Default": One or more of the events described in
Section 7.01(a).
"Exchange Act": The Securities Exchange Act of 1934, as
amended.
"Fannie Mae": The Federal National Mortgage Association or any
successor.
"FDIC": The Federal Deposit Insurance Corporation or any
successor.
"Final Distribution Date": The final Distribution Date on
which any distributions are to be made on the Certificates as contemplated by
Section 9.01.
"Final Recovery Determination": A determination by the Special
Servicer with respect to any defaulted Mortgage Loan or REO Property and,
accordingly, the related REO Loan (other than a Mortgage Loan or REO Property,
as the case may be, purchased by Llama or SBRC or an Affiliate of either of them
pursuant to Section 2.03, by the Majority Certificateholder of the Controlling
Class pursuant to Section 3.18(b), by the Master Servicer or the Special
Servicer pursuant to Section 3.18(c) or by the Master Servicer or the Majority
Certificateholder of the Controlling Class pursuant to Section 9.01, or
otherwise acquired by the Sole Certificateholder pursuant to Section 9.01) that
there has been a recovery of all Insurance Proceeds, Liquidation Proceeds and
other payments or recoveries (including, without limitation, by reason of a sale
of such Mortgage Loan or REO Property pursuant to Section 3.18(d) hereof) that
the Special Servicer has determined, in accordance with the Servicing Standard,
exercised without regard to any obligation of the Master Servicer or Special
Servicer to make payments from its own funds pursuant to Section 3.07(b), will
be ultimately recoverable.
-20-
<PAGE>
"Fitch": Fitch IBCA, Inc. or its successor in interest. If
neither such rating agency nor any successor remains in existence, "Fitch" shall
be deemed to refer to such other nationally recognized statistical rating agency
or other comparable Person designated by the Depositor, notice of which
designation shall be given to the Trustee, the Master Servicer, the Special
Servicer and the Tax Administrator, and specific ratings of Fitch IBCA, Inc.
herein referenced shall be deemed to refer to the equivalent ratings of the
party so designated.
"Fourth Avenue Marketplace Mortgage Loan": The Mortgage Loan
identified on the Mortgage Loan Schedule by loan number 6601059.
"Fourth Avenue Marketplace REMIC": The segregated pool of
assets subject hereto, with respect to which the Fourth Avenue Marketplace REMIC
Declaration has been made, consisting of the Fourth Avenue Marketplace Mortgage
Loan or any REO Property acquired in respect thereof.
"Fourth Avenue Marketplace REMIC Declaration": The REMIC
Declaration dated as of July 27, 1999 with respect to the assets of the Fourth
Avenue Marketplace REMIC.
"Fourth Avenue Marketplace REMIC Regular Interest": The
uncertificated "regular interest", within the meaning of Section 860G(a)(1) of
the Code, in the Fourth Avenue Marketplace REMIC, issued pursuant to the Fourth
Avenue Marketplace REMIC Declaration. The principal balance of the Fourth Avenue
Marketplace REMIC Regular Interest shall equal the principal balance of the
Fourth Avenue Marketplace Mortgage Loan (or, if applicable, the deemed principal
balance of any successor REO Loan) outstanding from time to time. Payments and
other collections of amounts received on or in respect of the Fourth Avenue
Marketplace Mortgage Loan (or any related REO Property) and allocable to
interest (adjusted to the related Loan REMIC Remittance Rate) on, principal of
and/or Prepayment Premiums in respect of such Mortgage Loan (or any successor
REO Loan) shall be deemed paid on the Fourth Avenue Marketplace REMIC Regular
Interest to REMIC I at the time such amounts are so received. The terms of the
Fourth Avenue Marketplace REMIC Regular Interest are otherwise set forth in the
related Loan REMIC Declaration.
"Fourth Avenue Marketplace REMIC Residual Interest": The sole
uncertificated "residual interest", within the meaning of Section 860G(a)(2) of
the Code, in the Fourth Avenue Marketplace REMIC, issued pursuant to the Fourth
Avenue Marketplace REMIC Declaration.
"Freddie Mac": The Federal Home Loan Mortgage Corporation or
any successor.
"Grantor Trust": A grantor trust as defined under Subpart E of
Part I of Subchapter J of the Code.
"Grantor Trust Pool": Either of Grantor Trust R-I or Grantor
Trust Y.
"Grantor Trust R-I": The Grantor Trust designated as such in
Section 2.09(a).
"Grantor Trust Y": The Grantor Trust designated as such in
Section 2.09(b).
-21-
<PAGE>
"Ground Lease": The ground lease pursuant to which any
Borrower holds a leasehold interest in the related Mortgaged Property.
"Group": A group of Mortgage Loans that are
cross-collateralized and cross-defaulted with each other.
"GTE Plaza Shopping Center Mortgage Loan": The Mortgage Loan
identified on the Mortgage Loan Schedule by loan number 6601344.
"GTE Plaza Shopping Center REMIC": The segregated pool of
assets subject hereto, with respect to which the GTE Plaza Shopping Center REMIC
Declaration has been made, consisting of the GTE Plaza Shopping Center Mortgage
Loan or any REO Property acquired in respect thereof.
"GTE Plaza Shopping Center REMIC Declaration": The REMIC
Declaration dated as of July 27, 1999 with respect to the assets of the GTE
Plaza Shopping Center REMIC.
"GTE Plaza Shopping Center REMIC Regular Interest": The
uncertificated "regular interest", within the meaning of Section 860G(a)(1) of
the Code, in the GTE Plaza Shopping Center REMIC, issued pursuant to the GTE
Plaza Shopping Center REMIC Declaration. The principal balance of the GTE Plaza
Shopping Center REMIC Regular Interest shall equal the principal balance of the
GTE Plaza Shopping Center Mortgage Loan (or, if applicable, the deemed principal
balance of any successor REO Loan) outstanding from time to time. Payments and
other collections of amounts received on or in respect of the GTE Plaza Shopping
Center Mortgage Loan (or any related REO Property) and allocable to interest
(adjusted to the related Loan REMIC Remittance Rate) on, principal of and/or
Prepayment Premiums in respect of such Mortgage Loan (or any successor REO Loan)
shall be deemed paid on the GTE Plaza Shopping Center REMIC Regular Interest to
REMIC I at the time such amounts are so received. The terms of the GTE Plaza
Shopping Center REMIC Regular Interest are otherwise set forth in the related
Loan REMIC Declaration.
"GTE Plaza Shopping Center REMIC Residual Interest": The sole
uncertificated "residual interest", within the meaning of Section 860G(a)(2) of
the Code, in the GTE Plaza Shopping Center REMIC, issued pursuant to the GTE
Plaza Shopping Center REMIC Declaration.
"Hazardous Materials": Any dangerous, toxic or hazardous
pollutants, chemicals, wastes, or substances, including, without limitation,
those so identified pursuant to CERCLA or any other federal, state or local
environmental related laws and regulations, and specifically including, without
limitation, asbestos and asbestos-containing materials, polychlorinated
biphenyls ("PCBs"), radon gas, petroleum and petroleum products, urea
formaldehyde and any substances classified as being "in inventory", "usable work
in process" or similar classification which would, if classified as unusable, be
included in the foregoing definition.
"Historical Loan Modification Report": A report or reports
setting forth, among other things, those Mortgage Loans which, as of the close
of business on the Determination Date immediately preceding the preparation of
such report or reports, have been modified pursuant to this Agreement (i) during
the Collection Period ending on such Determination Date and (ii) since the
Cut-off Date, showing the original and the revised terms thereof, substantially
in the form of, and
-22-
<PAGE>
including such additional information in respect of each such Mortgage Loan as
set forth on, Exhibit G-2 attached hereto.
"Historical Loss Estimate Report": A report or reports setting
forth, among other things, as of the close of business on the Determination Date
immediately preceding the preparation of such report or reports, (i) the
aggregate amount of Liquidation Proceeds received, and Liquidation Expenses
incurred, both during the Collection Period ending on such Determination Date
and historically, and (ii) the amount of Realized Losses occurring during such
Collection Period and historically, set forth on a Mortgage Loan-by-Mortgage
Loan and REO Property-by-REO Property basis, substantially in the form of, and
including such additional information in respect of each Mortgage Loan and REO
Property as to which a Final Recovery Determination has been made as set forth
on, Exhibit G-3 attached hereto.
"Holmead Apartments Mortgage Loan": The Mortgage Loan
identified on the Mortgage Loan Schedule by loan number 6600839.
"Holmead Apartments REMIC": The segregated pool of assets
subject hereto, with respect to which the Holmead Apartments REMIC Declaration
has been made, consisting of the Holmead Apartments Mortgage Loan or any REO
Property acquired in respect thereof.
"Holmead Apartments REMIC Declaration": The REMIC Declaration
dated as of July 27, 1999 with respect to the assets of the Holmead Apartments
REMIC.
"Holmead Apartments REMIC Regular Interest": The
uncertificated "regular interest", within the meaning of Section 860G(a)(1) of
the Code, in the Holmead Apartments REMIC, issued pursuant to the Holmead
Apartments REMIC Declaration. The principal balance of the Holmead Apartments
REMIC Regular Interest shall equal the principal balance of the Holmead
Apartments Mortgage Loan (or, if applicable, the deemed principal balance of any
successor REO Loan) outstanding from time to time. Payments and other
collections of amounts received on or in respect of the Holmead Apartments
Mortgage Loan (or any related REO Property) and allocable to interest (adjusted
to the related Loan REMIC Remittance Rate) on, principal of and/or Prepayment
Premiums in respect of such Mortgage Loan (or any successor REO Loan) shall be
deemed paid on the Holmead Apartments REMIC Regular Interest to REMIC I at the
time such amounts are so received. The terms of the Holmead Apartments REMIC
Regular Interest are otherwise set forth in the related Loan REMIC Declaration.
"Holmead Apartments REMIC Residual Interest": The sole
uncertificated "residual interest", within the meaning of Section 860G(a)(2) of
the Code, in the Holmead Apartments REMIC, issued pursuant to the Holmead
Apartments REMIC Declaration.
"HUD-Approved Servicer": A servicer that is a mortgagee
approved by the Secretary of Housing and Urban Development pursuant to Sections
203 and 211 of the National Housing Act.
-23-
<PAGE>
"Independent": When used with respect to any specified Person,
any such Person who (i) is in fact independent of the Depositor, Llama, SBRC,
the Master Servicer, the Special Servicer, the Trustee, the Tax Administrator
and any and all Affiliates thereof, (ii) does not have any direct financial
interest in or any material indirect financial interest in any of the Depositor,
Llama, SBRC, the Master Servicer, the Special Servicer, the Trustee, the Tax
Administrator or any Affiliate thereof, and (iii) is not connected with the
Depositor, Llama, SBRC, the Master Servicer, the Special Servicer, the Trustee,
the Tax Administrator or any Affiliate thereof as an officer, employee,
promoter, underwriter, trustee, partner, director or Person performing similar
functions; provided, however, that a Person shall not fail to be Independent of
the Depositor, Llama, SBRC, the Master Servicer, the Special Servicer, the
Trustee, the Tax Administrator or any Affiliate thereof merely because such
Person is the beneficial owner of 1% or less of any class of securities issued
by the Depositor, Llama, SBRC, the Master Servicer, the Special Servicer, the
Trustee, the Tax Administrator or any Affiliate thereof, as the case may be.
"Independent Contractor": Any Person that would be an
"independent contractor" with respect to REMIC I (or, solely for the purposes of
a Mortgage Loan in a Loan REMIC, the related Loan REMIC) within the meaning of
Section 856(d)(3) of the Code if REMIC I (or the related Loan REMIC) were a real
estate investment trust (except that the ownership test set forth in that
section shall be considered to be met by (i) any Person that owns, directly or
indirectly, 35 percent or more of any Class of Certificates, or such other
interest in any Class of Certificates as is set forth in an Opinion of Counsel,
which shall not be an expense of the Trustee, the Tax Administrator or the
Trust, delivered to the Trustee and the Tax Administrator), so long as REMIC I
(or the related Loan REMIC) does not receive or derive any income from such
Person and provided that the relationship between such Person and REMIC I (or
the related Loan REMIC) is at arm's length, all within the meaning of Treasury
Regulation Section 1.856-4(b)(5), or (ii) any other Person upon receipt by the
Trustee and the Tax Administrator of an Opinion of Counsel, which shall be at no
expense to the Trustee, the Tax Administrator or the Trust, to the effect that
the taking of any action in respect of any REO Property by such Person, subject
to any conditions therein specified, that is otherwise herein contemplated to be
taken by an Independent Contractor will not cause such REO Property to cease to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code, or cause any income realized in respect of such REO Property to fail
to qualify as Rents from Real Property.
"Initial Class Notional Amount": With respect to the Class X
Certificates, the initial Class Notional Amount thereof as of the Closing Date
equal to $734,852,898.
-24-
<PAGE>
"Initial Class Principal Balance": With respect to any Class
of Principal Balance Certificates, the initial Class Principal Balance thereof
as of the Closing Date, in each case as set forth below:
<TABLE>
<CAPTION>
Initial Class
Class Principal Balance
- ----- -----------------
<S> <C>
Class A-1 $167,874,000
Class A-2 $355,708,000
Class B $ 38,580,000
Class C $ 38,580,000
Class D $ 11,023,000
Class E $ 27,557,000
Class F $ 11,022,000
Class G $ 14,697,000
Class H $ 20,209,000
Class J $ 9,185,000
Class K $ 16,535,000
Class L $ 7,348,000
Class M $ 16,534,898
</TABLE>
"Initial Pool Balance": The aggregate Cut-off Date Balance of
all the Mortgage Loans included in the Trust Fund as of the Closing Date.
"Institutional Accredited Investor": An "accredited investor"
as defined in any of paragraphs (1), (2), (3) and (7) of Rule 501(a) under the
Securities Act or any entity in which all of the equity owners come within such
paragraphs.
"Insurance Policy": With respect to any Mortgage Loan or REO
Property, any hazard insurance policy, Environmental Insurance Policy, flood
insurance policy, title policy or other insurance policy that is maintained from
time to time in respect of such Mortgage Loan (or the related Mortgaged
Property) or in respect of such REO Property, as the case may be.
"Insurance Proceeds": Proceeds paid under any Insurance
Policy, to the extent such proceeds are not applied to the restoration of the
related Mortgaged Property or REO Property or released to the Borrower, in
either case, in accordance with the Servicing Standard.
"Interest Accrual Basis": The basis on which interest accrues
in respect of any Mortgage Loan, any REMIC I Regular Interest, any REMIC II
Regular Interest or any Class of REMIC III Regular Certificates, in each case
consisting of one of the following: (i) a 30/360 Basis; (ii) an Actual/360
Basis; or (iii) an Actual/365 Basis.
"Interest Accrual Period": With respect to any REMIC I Regular
Interest, any REMIC II Regular Interest or any Class of REMIC III Regular
Certificates, for any Distribution Date, the calendar month immediately
preceding the month in which such Distribution Date occurs.
-25-
<PAGE>
"Interest Only Certificate": Any Class X Certificate.
"Interest Reserve Account": The segregated account created and
maintained by the Trustee pursuant to Section 3.04(c) in trust for
Certificateholders, which shall be entitled "The Chase Manhattan Bank [or the
name of any successor Trustee], as Trustee, in trust for the registered holders
of Salomon Brothers Mortgage Securities VII, Inc., Commercial Mortgage
Pass-Through Certificates, Series 1999-C1".
"Interest Reserve Amount": With respect to each Interest
Reserve Loan and each Master Servicer Remittance Date that occurs during
February of each year and during January of each year that is not a leap year,
an amount equal to one-day's interest at the related Net Mortgage Rate accrued
on the related Stated Principal Balance as of the Due Date in the month in which
such Master Servicer Remittance Date occurs (but prior to the application of any
amounts due on such Due Date), to the extent that a Scheduled P&I Payment is
remitted to the Trustee in respect thereof for such Due Date on such Master
Servicer Remittance Date or a P&I Advance is made in respect thereof for such
Due Date on such Master Servicer Remittance Date.
"Interest Reserve Loan": Any Actual/360 Mortgage Loan (or
successor REO Loan) or any Actual/365 Mortgage Loan (or successor REO Loan).
"Interested Person": The Depositor, Llama, SBRC, the Master
Servicer, the Special Servicer, any Holder of a Certificate, or any Affiliate of
any such Person.
"Investment Account": As defined in Section 3.06(a).
"IRS": The Internal Revenue Service or any successor.
"Issue Price": With respect to each Class of Certificates, the
"issue price" as defined in the Code and Treasury regulations promulgated
thereunder.
"Late Collections": With respect to any Mortgage Loan, all
amounts received thereon during any Collection Period, whether as payments,
Insurance Proceeds, Liquidation Proceeds or otherwise, which represent late
collections of all or any portion of a Scheduled P&I Payment or an Assumed P&I
Payment in respect of such Mortgage Loan due or deemed due, as the case may be,
for a Due Date in a previous Collection Period, or for a Due Date coinciding
with or preceding the Cut-off Date, and not previously received or recovered.
With respect to any REO Loan, all amounts received in connection with the
related REO Property during any Collection Period, whether as Insurance
Proceeds, Liquidation Proceeds, REO Revenues or otherwise, which represent late
collections of all or any portion of a Scheduled P&I Payment or an Assumed P&I
Payment in respect of the related Mortgage Loan or of an Assumed P&I Payment in
respect of such REO Loan due or deemed due, as the case may be, for a Due Date
in a previous Collection Period and not previously received or recovered. The
term "Late Collections" shall specifically exclude any Default Charges.
-26-
<PAGE>
"Legal Final Distribution Date": With respect to any Loan
REMIC Regular Interest, any REMIC I Regular Interest, any REMIC II Regular
Interest or any Class of REMIC III Regular Certificates, the "latest possible
maturity date" thereof, calculated solely for purposes of satisfying Treasury
regulation section 1.860G-1(a)(4)(iii).
"Liquidation Event": With respect to any Mortgage Loan, any of
the following events: (i) such Mortgage Loan is paid in full; (ii) a Final
Recovery Determination is made with respect to such Mortgage Loan; (iii) such
Mortgage Loan is repurchased by Llama or SBRC or any Affiliate of either of them
pursuant to Section 2.03; (iv) such Mortgage Loan is purchased by the Majority
Certificateholder of the Controlling Class pursuant to Section 3.18(b), by the
Master Servicer or the Special Servicer pursuant to Section 3.18(c), or by the
Master Servicer or the Majority Certificateholder of the Controlling Class
pursuant to Section 9.01; or (v) such Mortgage Loan is acquired by the Sole
Certificateholder in exchange for Certificates pursuant to Section 9.01. With
respect to any REO Property (and the related REO Loan), any of the following
events: (x) a Final Recovery Determination is made with respect to such REO
Property; (y) such REO Property is purchased by the Master Servicer or the
Majority Certificateholder of the Controlling Class pursuant to Section 9.01; or
(z) such REO Property is acquired by the Sole Certificateholder in exchange for
Certificates pursuant to Section 9.01.
"Liquidation Expenses": All customary, reasonable and
necessary "out of pocket" costs and expenses due and owing (but not otherwise
covered by Servicing Advances) in connection with the liquidation of any
Specially Serviced Mortgage Loan or REO Property pursuant to Section 3.09 or
3.18 (including, without limitation, legal fees and expenses, committee or
referee fees and, if applicable, brokerage commissions and conveyance taxes).
"Liquidation Fee": With respect to each Specially Serviced
Mortgage Loan or REO Property (other than any Specially Serviced Mortgage Loan
or REO Property purchased or otherwise acquired (x) by Llama or SBRC or any
Affiliate of either of them pursuant to Section 2.03 within the time period
permitted by such section following Llama's or SBRC's, as the case may be,
notice or discovery of the breach, Document Defect or other event giving rise to
such repurchase obligation, (y) by the Majority Certificateholder of the
Controlling Class, the Master Servicer or the Special Servicer pursuant to
Section 3.18 or (z) by the Master Servicer, the Majority Certificateholder of
the Controlling Class or the Sole Certificateholder pursuant to Section 9.01),
the fee designated as such and payable to the Special Servicer pursuant to the
third paragraph of Section 3.11(c).
"Liquidation Fee Rate": With respect to each Specially
Serviced Mortgage Loan or REO Property as to which a Liquidation Fee is payable,
1.0%.
"Liquidation Proceeds": All cash amounts (other than Insurance
Proceeds and REO Revenues) received by the Master Servicer or the Special
Servicer in connection with: (i) the taking of all or a part of a Mortgaged
Property by exercise of the power of eminent domain or condemnation; (ii) the
liquidation of a Mortgaged Property or other collateral constituting, or that
constituted, security for a defaulted Mortgage Loan, through trustee's sale,
foreclosure sale, REO Disposition or otherwise, exclusive of any portion thereof
required to be released to the related Borrower in accordance with applicable
law and the terms and conditions of the related Mortgage Note and Mortgage;
(iii) the realization upon any deficiency judgment obtained against a Borrower
-27-
<PAGE>
or any guarantor; (iv) the purchase of a Defaulted Mortgage Loan by the Majority
Certificateholder of the Controlling Class pursuant to Section 3.18(b) or by the
Master Servicer or the Special Servicer pursuant to Section 3.18(c) or any other
sale thereof pursuant to Section 3.18(d); (v) the repurchase of a Mortgage Loan
by Llama or SBRC or an Affiliate of either of them pursuant to Section 2.03;
(vi) the purchase of a Mortgage Loan or REO Property by the Master Servicer or
the Majority Certificateholder of the Controlling Class pursuant to Section
9.01; or (vii) the acquisition of any Mortgage Loan or REO Property by the Sole
Certificateholder in exchange for Certificates pursuant to Section 9.01.
"Llama": Llama Capital Mortgage Company Limited Partnership or
its successor in interest.
"Llama Mortgage Loan": Any of the Mortgage Loans which are the
subject of the Llama Mortgage Loan Purchase Agreement and as to which "Llama" is
identified on the Mortgage Loan Schedule under the heading "Loan Contributor".
"Llama Mortgage Loan Purchase Agreement": That certain
mortgage loan purchase agreement dated as of August 5, 1999, between Llama and
the Depositor.
"Loan REMIC": Each of the Park View Plaza REMIC, the 625 Polk
Street REMIC, the Fourth Avenue Marketplace REMIC, the GTE Plaza Shopping Center
REMIC, the Holmead Apartments REMIC, the Parker Paints (Andresen Plaza) REMIC
and the 500 Third Street REMIC.
"Loan REMIC Interest": Any Loan REMIC Regular Interest or Loan
REMIC Residual Interest.
"Loan REMIC Declaration": Each of the Park View Plaza REMIC
Declaration, the 625 Polk Street REMIC Declaration, the Fourth Avenue
Marketplace REMIC Declaration, the GTE Plaza Shopping Center REMIC Declaration,
the Holmead Apartments REMIC Declaration, the Parker Paints (Andresen Plaza)
REMIC Declaration and the 500 Third Street REMIC Declaration.
"Loan REMIC Regular Interest": Each of the Park View Plaza
REMIC Regular Interest, the 625 Polk Street REMIC Regular Interest, the Fourth
Avenue Marketplace REMIC Regular Interest, the GTE Plaza Shopping Center REMIC
Regular Interest, the Holmead Apartments REMIC Regular Interest, the Parker
Paints (Andresen Plaza) REMIC Regular Interest and the 500 Third Street REMIC
Regular Interest.
"Loan REMIC Remittance Rate": The per annum rate at which
interest accrues in respect of a Loan REMIC Regular Interest, as set forth in or
otherwise calculated in accordance with the related Loan REMIC Declaration.
"Loan REMIC Residual Interest": Each of the Park View Plaza
REMIC Residual Interest, the 625 Polk Street REMIC Residual Interest, the Fourth
Avenue Marketplace REMIC Residual Interest, the GTE Plaza Shopping Center REMIC
Residual Interest, the Holmead Apartments REMIC Residual Interest, the Parker
Paints (Andresen Plaza) REMIC Residual Interest and the 500 Third Street REMIC
Residual Interest.
-28-
<PAGE>
"Majority Certificateholder": With respect to any specified
Class or Classes of Certificates, as of any date of determination, any Holder or
particular group of Holders of Certificates of such Class or Classes, as the
case may be, entitled to a majority of the Voting Rights allocated to such Class
or Classes, as the case may be.
"Master Servicer": GMAC Commercial Mortgage Corporation or its
successor in interest, in its capacity as master servicer hereunder, or any
successor master servicer appointed as herein provided.
"Master Servicer Remittance Amount": With respect to any
Master Servicer Remittance Date, an amount equal to (a) all amounts on deposit
in the Collection Account as of the commencement of business on such Master
Servicer Remittance Date, net of (b) any portion of the amounts described in
clause (a) of this definition that represents one or more of the following: (i)
collected Scheduled P&I Payments that are due on a Due Date following the end of
the related Collection Period, (ii) any payments of principal (including,
without limitation, Principal Prepayments) and interest (including, without
limitation, Additional Interest), Liquidation Proceeds and Insurance Proceeds
received after the end of the related Collection Period, (iii) any Prepayment
Premiums received after the end of the related Collection Period, (iv) any
amounts payable or reimbursable to any Person from the Collection Account
pursuant to any of clauses (ii) through (xvii) of Section 3.05(a), and (v) any
amounts deposited in the Collection Account in error; provided that, with
respect to the Master Servicer Remittance Date that occurs in the same calendar
month as the Final Distribution Date, the Master Servicer Remittance Amount will
be calculated without regard to clauses (b)(i), (b)(ii) and (b)(iii) of this
definition.
"Master Servicer Remittance Date": The Business Day
immediately preceding each Distribution Date.
"Master Servicing Fee": With respect to each Mortgage Loan and
REO Loan, the fee payable to the Master Servicer pursuant to Section 3.11(a) and
from which any Primary Servicing Fees are payable.
"Master Servicing Fee Rate": With respect to each Mortgage
Loan (and any related REO Loan), the rate per annum specified as such in the
Mortgage Loan Schedule, which rate includes the Primary Servicing Fee Rate.
"Modified Mortgage Loan": Any Mortgage Loan as to which any
Servicing Transfer Event has occurred and which has been modified by the Special
Servicer pursuant to Section 3.20 in a manner that:
(A) affects the amount or timing of any payment of principal
or interest due thereon (other than, or in addition to, bringing
current Scheduled P&I Payments with respect to such Mortgage
Loan);
(B) except as expressly contemplated by the related
Mortgage, results in a release of the lien of the Mortgage on
any material portion of the related Mortgaged Property without a
corresponding Principal Prepayment in an amount not less than
the fair market
-29-
<PAGE>
value (as is), as determined by an Appraisal delivered to the
Special Servicer (at the expense of the related Borrower and
upon which the Special Servicer may conclusively rely), of the
property to be released; or
(C) in the good faith and reasonable judgment of the Special
Servicer, otherwise materially impairs the security for such
Mortgage Loan or reduces the likelihood of timely payment of
amounts due thereon.
"Moody's": Moody's Investors Service, Inc. or its successor in
interest. If neither such rating agency nor any successor remains in existence,
"Moody's" shall be deemed to refer to such other nationally recognized
statistical rating agency or other comparable Person designated by the
Depositor, notice of which designation shall be given to the Trustee, the Master
Servicer, the Special Servicer and the Tax Administrator, and specific ratings
of Moody's Investors Service, Inc. herein referenced shall be deemed to refer to
the equivalent ratings of the party so designated.
"Mortgage": With respect to any Mortgage Loan, separately and
collectively, as the context may require, each mortgage, deed of trust and/or
other similar document or instrument securing the related Mortgage Note and
creating a lien on the related Mortgaged Property.
"Mortgage File": With respect to any Mortgage Loan, subject to
Section 2.01(c), collectively the following documents:
(i) the original Mortgage Note, endorsed by the most recent
endorsee prior to the Trustee or, if none, by the
originator, without recourse, either in blank or to the
order of the Trustee in the following form: "Pay to the
order of The Chase Manhattan Bank, as trustee for the
registered holders of Salomon Brothers Mortgage
Securities VII, Inc., Commercial Mortgage Pass-Through
Certificates, Series 1999-C1, without recourse";
(ii) the original or a copy of the Mortgage and, if
applicable, the originals or copies of any intervening
assignments thereof showing a complete chain of
assignment from the originator of the Mortgage Loan to
the most recent assignee of record thereof prior to the
Trustee, if any, in each case with evidence of
recording indicated thereon;
(iii) an original assignment of the Mortgage, that is
complete and in recordable form, executed by the most
recent assignee of record thereof prior to the Trustee
or, if none, by the originator, in favor of the Trustee
(in such capacity);
(iv) the original or a copy of any related Assignment of
Leases (if any such item is a document separate from
the Mortgage) and, if applicable, the originals or
copies of any intervening assignments thereof showing a
complete chain of assignment from the originator of the
Mortgage Loan to the most recent assignee of record
thereof prior to the Trustee, if any, in each case with
evidence of recording thereon;
-30-
<PAGE>
(v) an original assignment of any related Assignment of
Leases (if any such item is a document separate from
the Mortgage), that is complete and in recordable form,
executed by the most recent assignee of record thereof
prior to the Trustee or, if none, by the originator, in
favor of the Trustee (in such capacity), which
assignment may be included as part of the corresponding
assignment of Mortgage referred to in clause (iii)
above;
(vi) an original or copy of any related Security Agreement
(if such item is a document separate from the Mortgage)
and, if applicable, the originals or copies of any
intervening assignments thereof showing a complete
chain of assignment from the originator of the Mortgage
Loan to the most recent assignee of record thereof
prior to the Trustee, if any;
(vii) an original assignment of any related Security
Agreement (if such item is a document separate from the
Mortgage), that is complete, executed by the most
recent assignee of record thereof prior to the Trustee
or, if none, by the originator, in favor of the Trustee
(in such capacity), which assignment may be included as
part of the corresponding assignment of Mortgage
referred to in clause (iii) above;
(viii) originals or copies of all assumption, modification,
written assurance and substitution agreements, with
evidence of recording thereon if appropriate, in those
instances where the terms or provisions of the
Mortgage, Mortgage Note or any related security
document have been modified or the Mortgage Loan has
been assumed;
(ix) the original or a copy of the lender's title insurance
policy issued in respect of the Mortgage Loan, together
with all endorsements or riders (or copies thereof)
that were issued with or subsequent to the issuance of
such policy, insuring the priority of the Mortgage as a
first lien on the Mortgaged Property;
(x) the original of any guaranty of the obligations of the
Borrower under the Mortgage Loan which was in the
possession of Llama or SBRC, as applicable, at the time
the Mortgage Files were delivered to the Trustee;
(xi) (A) file or certified copies of any UCC Financing
Statements and continuation statements which were filed
in order to perfect (and maintain the perfection of)
any security interest held by the originator of the
Mortgage Loan (and each assignee of record prior to the
Trustee) in and to the personalty of the Borrower at
the Mortgaged Property (in each case with evidence of
filing thereon) and which were in the possession of
Llama or SBRC, as applicable, at the time the Mortgage
Files were delivered to the Trustee and (B) if any such
security interest is perfected and the related UCC-1,
UCC-2 or UCC-3 financing statements were in the
possession of Llama or SBRC, as applicable, a UCC-2 or
UCC-3 financing statement, as applicable, that is
complete and
-31-
<PAGE>
in form suitable for filing, executed by the most recent
assignee of record prior to the Trustee or, if none, by
the originator, evidencing the transfer of such
security interest to the Trustee (or a certified copy
of such assignment as sent for filing);
(xii) the original or a copy of the power of attorney (with
evidence of recording thereon, if appropriate) granted
by the Borrower if the Mortgage, Mortgage Note or other
document or instrument referred to above was signed on
behalf of the Borrower;
xiii) if the Borrower has a leasehold interest in the
related Mortgaged Property, the original Ground Lease
or a copy thereof;
(xiv) the original or copy of any loan agreement and
intercreditor agreement relating to such Mortgage Loan;
(xv) the original or copy of any operating lease relating to
the related Mortgaged Property;
(xvi) the original or copy of any environmental indemnity
and the original or copy of any Environmental Insurance
Policy; and
(xvii) any additional documents required to be added to the
Mortgage File pursuant to this Agreement;
provided that whenever the term "Mortgage File" is used to refer to documents
actually received by the Trustee or a Custodian appointed thereby, such term
shall not be deemed to include such documents and instruments required to be
included therein unless they are actually so received.
"Mortgage Loan": Each of the mortgage loans transferred and
assigned to the Trustee pursuant to Section 2.01 and from time to time held in
the Trust Fund. As used herein, the term "Mortgage Loan" includes the related
Mortgage Note, Mortgage and other security documents contained in the related
Mortgage File.
"Mortgage Loan Purchase Agreements": Together, the Llama
Mortgage Loan Purchase Agreement and the SBRC Mortgage Loan Purchase Agreement.
"Mortgage Loan Schedule": The list of Mortgage Loans
transferred on the Closing Date to the Trustee as part of the Trust Fund, which
list is attached hereto as Schedule I and may be amended from time to time in
accordance with Section 2.02(e). The Mortgage Loan Schedule shall set forth,
among other things, the following information with respect to each Mortgage
Loan:
(i) the loan number and control number;
(ii) the street address (including city, state and zip code) of
the related Mortgaged Property;
-32-
<PAGE>
(iii) the Mortgage Rate in effect as of the Cut-off Date;
(iv) the original principal balance;
(v) the Cut-off Date Balance;
(vi) the (A) remaining term to stated maturity or, in the case of
an ARD Loan, the Anticipated Repayment Date and (B) Stated
Maturity Date;
(vii) the Due Date;
(viii) the amount of the Scheduled P&I Payment due on the first
Due Date following the Cut-off Date;
(ix) the Master Servicing Fee Rate (inclusive of the Primary
Servicing Fee Rate);
(x) the Primary Servicing Fee Rate;
(xi) whether the Borrower's interest in the related Mortgaged
Property is a leasehold estate;
(xii) the related Mortgage Loan Seller;
(xiii) whether the Mortgage Loan is a Cross-Collateralized
Mortgage Loan and, if so, a reference to the other Mortgage
Loans that are cross-collateralized with such Mortgage Loan;
(xiv) whether the Mortgage Loan is an ARD Loan; and
(xv) whether the Mortgage Loan is a Defeasance Loan.
The Mortgage Loan Schedule shall also set forth the aggregate Cut-off Date
Balance for all of the Mortgage Loans. Such list may be in the form of more than
one list, collectively setting forth all of the information required.
"Mortgage Loan Sellers": Together, Llama and SBRC.
"Mortgage Note": The original executed note evidencing the
indebtedness of a Borrower under a Mortgage Loan, together with any rider,
addendum or amendment thereto.
"Mortgage Pool": Collectively, all of the Mortgage Loans and
any successor REO Loans.
-33-
<PAGE>
"Mortgage Rate": With respect to (i) any Mortgage Loan on or
prior to its Stated Maturity Date, the annualized rate at which interest is
scheduled (in the absence of a default) to accrue on such Mortgage Loan from
time to time in accordance with the terms of the related Mortgage Note (as such
may be modified at any time following the Closing Date) and applicable law, (ii)
any Mortgage Loan after its Stated Maturity Date, the annualized rate described
in clause (i) above determined without regard to the passage of such Stated
Maturity Date, and (iii) any REO Loan, the annualized rate described in clause
(i) or (ii) above, as applicable, determined as if the related Mortgage Loan had
remained outstanding.
"Mortgaged Property": Individually and collectively, as the
context may require, each real property (together with all improvements and
fixtures thereon) subject to the lien of a Mortgage and constituting collateral
for a Mortgage Loan. With respect to any Cross-Collateralized Mortgage Loan, as
the context may require, "Mortgaged Property" may mean, collectively, all the
Mortgaged Properties securing such Cross-Collateralized Mortgage Loan.
"Net Aggregate Prepayment Interest Shortfall": With respect to
any Distribution Date, the amount, if any, by which (a) the aggregate of all
Prepayment Interest Shortfalls incurred in connection with the receipt of
Principal Prepayments on the Mortgage Loans during the related Collection
Period, exceeds (b) the sum of (i) the aggregate amount remitted by the Master
Servicer for deposit in the Distribution Account for such Distribution Date
pursuant to Section 3.19(e) in connection with such Prepayment Interest
Shortfalls and (ii) the aggregate of all Prepayment Interest Excesses collected
in connection with the receipt of Principal Prepayments on the Mortgage Loans
during the related Collection Period.
"Net Class Principal Balance": With respect to any Class of
Principal Balance Certificates (other than the Class A Certificates), as of any
date of determination, an amount equal to (a) the then-outstanding Class
Principal Balance of such Class of Principal Balance Certificates, reduced (to
not less than zero) by (b) the excess, if any, of (i) any then-existing
aggregate Appraisal Reduction Amount, over (ii) the aggregate of the
then-outstanding Class Principal Balances of all other Classes of Principal
Balance Certificates with a more subordinate Payment Priority; and, with respect
to a Class of Class A Certificates, as of any date of determination, an amount
equal to (1) the then-outstanding Class Principal Balance of such Class of Class
A Certificates, reduced (to not less than zero) by (2) the product of (a) a
fraction, the numerator of which is the then-outstanding Class Principal Balance
of such Class of Class A Certificates, and the denominator of which is the
aggregate of the then-outstanding Class Principal Balances of both Classes of
Class A Certificates, multiplied by (b) the excess, if any, of (i) any
then-existing aggregate Appraisal Reduction Amount, over (ii) the aggregate of
the then-outstanding Class Principal Balances of all other Classes of Principal
Balance Certificates with a more subordinate Payment Priority than the Class A
Certificates.
"Net Default Charges": With respect to any Mortgage Loan or
REO Loan, any Default Charges actually collected thereon (determined in
accordance with the allocation of amounts collected as specified in Section
1.02), to the extent such Default Charges are not allocable to pay Advance
Interest accrued on Advances made in respect of such Mortgage Loan, REO Loan or
the related REO Property, as the case may be.
-34-
<PAGE>
"Net Investment Earnings": With respect to any Investment
Account for any Collection Period, the amount, if any, by which the aggregate of
all interest and other income realized during such Collection Period on funds
held in such Investment Account, exceeds the aggregate of all losses and
investment costs, if any, incurred during such Collection Period in connection
with the investment of such funds in accordance with Section 3.06.
"Net Investment Loss": With respect to any Investment Account
for any Collection Period, the amount by which the aggregate of all losses and
investment costs, if any, incurred during such Collection Period in connection
with the investment of funds held in such Investment Account in accordance with
Section 3.06, exceeds the aggregate of all interest and other income realized
during such Collection Period on such funds; provided that, in the case of any
Investment Account and any particular investment of funds in such Investment
Account, Net Investment Loss shall not include any loss with respect to such
particular investment of funds which is incurred solely as a result of the
insolvency of the federal or state chartered depository institution or trust
company that holds such Investment Account, so long as such depository
institution or trust company satisfied the qualifications set forth in the
definition of Eligible Account at the time such particular investment of funds
was made.
"Net Mortgage Rate": With respect to any Mortgage Loan or REO
Loan, as of any date of determination, a rate per annum equal to the related
Mortgage Rate then in effect, minus the sum of the related Administrative Fee
Rate and any related Additional Interest Rate.
"Net Operating Income": With respect to any Mortgaged
Property, the total operating revenues derived from such Mortgaged Property,
minus the total fixed and variable operating expenses incurred in respect of
such Mortgaged Property (subject to adjustments for, among other things, (i)
non-cash items such as depreciation and amortization, (ii) capital expenditures
and (iii) debt service on loans secured by the Mortgaged Property).
"NOI Adjustment Worksheet": A report prepared by the Special
Servicer with respect to Specially Serviced Mortgage Loans and REO Loans, and by
the Master Servicer with respect to all other Mortgage Loans, substantially in
the form and containing the information described in Exhibit G-9 attached
hereto, presenting the computations made in accordance with the methodology
described in such Exhibit to "normalize" the full year net operating income and
debt service coverage numbers used in the other reports required by this
Agreement.
"Nonrecoverable Advance": Any Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance.
"Nonrecoverable P&I Advance": As evidenced by the Officer's
Certificate and supporting documentation contemplated by Section 4.03(c), any
P&I Advance made or proposed to be made in respect of a Mortgage Loan or REO
Loan which, as determined by the Master Servicer or, if applicable, the Trustee,
in its reasonable and good faith judgment, will not be recoverable (together
with Advance Interest accrued thereon), or which in fact was not ultimately
recovered, from late payments, Insurance Proceeds, Liquidation Proceeds or any
other recovery on or in respect of such Mortgage Loan or the related REO
Property (without giving effect to potential recoveries on deficiency judgments
or recoveries from guarantors).
-35-
<PAGE>
"Nonrecoverable Servicing Advance": As evidenced by the
Officer's Certificate and supporting documentation contemplated by Section
3.11(g), any Servicing Advance made or proposed to be made in respect of a
Mortgage Loan or an REO Property which, as determined by the Master Servicer,
the Special Servicer or, if applicable, the Trustee, in its reasonable and good
faith judgment, will not be recoverable (together with Advance Interest accrued
thereon), or which in fact was not ultimately recovered, from late payments,
Insurance Proceeds, Liquidation Proceeds or any other recovery on or in respect
of such Mortgage Loan or such REO Property (without giving effect to potential
recoveries on deficiency judgments or recoveries from guarantors).
"Non-Registered Certificate": Unless and until registered
under the Securities Act, any Class G, Class H, Class J, Class K, Class L, Class
M, Class Y or Residual Certificate.
"Non-United States Person": Any person other than a United
States Person.
"Officer's Certificate": A certificate signed by a Servicing
Officer of the Master Servicer or the Special Servicer, as the case may be, or a
Responsible Officer of the Trustee, as the case may be.
"Operating Statement Analysis": As defined in Section 4.02(b).
"Opinion of Counsel": A written opinion of counsel (who must,
in connection with any opinion rendered pursuant hereto with respect to tax
matters or a resignation under Section 6.04, be Independent counsel, but who
otherwise may be salaried counsel for the Depositor, Llama, SBRC, the Trustee,
the Tax Administrator, the Master Servicer or the Special Servicer), which
written opinion is acceptable and delivered to the addressee(s).
"OTS": The Office of Thrift Supervision or any successor
thereto.
"Ownership Interest": As to any Certificate or Loan REMIC
Residual Interest, 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.
"Park View Plaza Mortgage Loan": The Mortgage Loan identified
on the Mortgage Loan Schedule by loan number 6600484.
"Park View Plaza REMIC": The segregated pool of assets subject
hereto, with respect to which the Park View Plaza REMIC Declaration has been
made, consisting of the Park View Plaza Mortgage Loan or any REO Property
acquired in respect thereof.
"Park View Plaza REMIC Declaration": The REMIC Declaration
dated as of June 21, 1999 with respect to the assets of the Park View Plaza
REMIC.
"Park View Plaza REMIC Regular Interest": The uncertificated
"regular interest", within the meaning of Section 860G(a)(1) of the Code, in the
Park View Plaza REMIC, issued pursuant to the Park View Plaza REMIC Declaration.
The principal balance of the Park View Plaza REMIC Regular Interest shall equal
the principal balance of the Park View Plaza Mortgage Loan (or,
-36-
<PAGE>
if applicable, the deemed principal balance of any successor REO Loan)
outstanding from time to time. Payments and other collections of amounts
received on or in respect of the Park View Plaza Mortgage Loan (or any related
REO Property) and allocable to interest (adjusted to the related Loan REMIC
Remittance Rate) on, principal of and/or Prepayment Premiums in respect of such
Mortgage Loan (or any successor REO Loan) shall be deemed paid on the Park View
Plaza REMIC Regular Interest to REMIC I at the time such amounts are so
received. The terms of the Park View Plaza REMIC Regular Interest are otherwise
set forth in the related Loan REMIC Declaration.
"Park View Plaza REMIC Residual Interest": The sole
uncertificated "residual interest", within the meaning of Section 860G(a)(2) of
the Code, in the Park View Plaza REMIC, issued pursuant to the Park View Plaza
REMIC Declaration.
"Parker Paints (Andresen Plaza) Mortgage Loan": The Mortgage
Loan identified on the Mortgage Loan Schedule by loan number 6600856.
"Parker Paints (Andresen Plaza) REMIC": The segregated pool of
assets subject hereto, with respect to which the Parker Paints (Andresen Plaza)
REMIC Declaration has been made, consisting of the Parker Paints (Andresen
Plaza) Mortgage Loan or any REO Property acquired in respect thereof.
"Parker Paints (Andresen Plaza) REMIC Declaration": The REMIC
Declaration dated as of July 27, 1999 with respect to the assets of the Parker
Paints (Andresen Plaza) REMIC.
"Parker Paints (Andresen Plaza) REMIC Regular Interest": The
uncertificated "regular interest", within the meaning of Section 860G(a)(1) of
the Code, in the Parker Paints (Andresen Plaza) REMIC, issued pursuant to the
Parker Paints (Andresen Plaza) REMIC Declaration. The principal balance of the
Parker Paints (Andresen Plaza) REMIC Regular Interest shall equal the principal
balance of the Parker Paints (Andresen Plaza) Mortgage Loan (or, if applicable,
the deemed principal balance of any successor REO Loan) outstanding from time to
time. Payments and other collections of amounts received on or in respect of the
Parker Paints (Andresen Plaza) Mortgage Loan (or any related REO Property) and
allocable to interest (adjusted to the related Loan REMIC Remittance Rate) on,
principal of and/or Prepayment Premiums in respect of such Mortgage Loan (or any
successor REO Loan) shall be deemed paid on the Parker Paints (Andresen Plaza)
REMIC Regular Interest to REMIC I at the time such amounts are so received. The
terms of the Parker Paints (Andresen Plaza) REMIC Regular Interest are otherwise
set forth in the related Loan REMIC Declaration.
"Parker Paints (Andresen Plaza) REMIC Residual Interest": The
sole uncertificated "residual interest", within the meaning of Section
860G(a)(2) of the Code, in the Parker Paints (Andresen Plaza) REMIC, issued
pursuant to the Parker Paints (Andresen Plaza) REMIC Declaration.
"Pass-Through Rate": With respect to the Class X Certificates,
for any Distribution Date, a rate per annum equal to the excess, if any, of the
Weighted Average REMIC II Remittance Rate for such Distribution Date, over the
Weighted Average Adjusted REMIC II Remittance Rate for such Distribution Date;
with respect to the Class A-1 Certificates, for any Distribution Date, a rate
-37-
<PAGE>
per annum equal to the lesser of (i) the REMIC II Remittance Rate in respect of
the Corresponding REMIC II Regular Interest for such Class of Certificates for
such Distribution Date and (ii) 7.075% per annum; with respect to the Class A-2
Certificates, for any Distribution Date, a rate per annum equal to the lesser of
(i) the REMIC II Remittance Rate in respect of the Corresponding REMIC II
Regular Interest for such Class of Certificates for such Distribution Date and
(ii) 7.150% per annum; with respect to the Class B, Class C, Class D, Class E,
Class F and Class G Certificates, for any Distribution Date, a rate per annum
equal to, in the case of each such Class, the REMIC II Remittance Rate in
respect of the Corresponding REMIC II Regular Interest for such Class of
Certificates for such Distribution Date; and with respect to each other Class of
REMIC III Regular Certificates, for any Distribution Date, a rate per annum
equal to the lesser of (i) the REMIC II Remittance Rate in respect of the
Corresponding REMIC II Regular Interest for such Class of Certificates for such
Distribution Date and (ii) 7.000% per annum.
"Payment Priority": With respect to any Class of Certificates,
the priority of the Holders thereof in respect of the Holders of the other
Classes of Certificates to receive distributions out of the Available
Distribution Amount for any Distribution Date. The Payment Priority of the
respective Classes of Certificates shall be, from most senior to most
subordinate, as follows: first, the respective Classes of Senior Certificates,
pro rata; second, the Class B Certificates; third, the Class C Certificates;
fourth, the Class D Certificates; fifth, the Class E Certificates; sixth, the
Class F Certificates; seventh, the Class G Certificates; eighth, the Class H
Certificates; ninth, the Class J Certificates; tenth, the Class K Certificates;
eleventh, the Class L Certificates; twelfth, the Class M Certificates; and last,
the respective Classes of Residual Certificates.
"Percentage Interest": With respect to any REMIC III Regular
Certificate, the portion of the relevant Class evidenced by such Certificate,
expressed as a percentage, the numerator of which is the Certificate Principal
Balance or Certificate Notional Amount, as the case may be, of such Certificate
as of the Closing Date, as specified on the face thereof, and the denominator of
which is the Initial Class Principal Balance or Initial Class Notional Amount,
as the case may be, of the relevant Class. With respect to a Class Y Certificate
or a Residual Certificate, the percentage interest in distributions to be made
with respect to the relevant Class, as stated on the face of such Certificate.
"Performing Mortgage Loan": Any Corrected Mortgage Loan and
any Mortgage Loan as to which a Servicing Transfer Event has not occurred.
"Permitted Investments": Any one or more of the following
obligations:
(i) direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States or any
agency or instrumentality thereof, provided such obligations are
backed by the full faith and credit of the United States;
(ii) repurchase obligations with respect to any security
described in clause (i) above, provided that the party agreeing to
repurchase such obligations is a financial institution meeting the
requirements set forth in clause (iii) below;
-38-
<PAGE>
(iii) demand and time deposits in, or certificates of deposit of,
or bankers' acceptances issued by, any bank or trust company, savings
and loan association or savings bank, the short term obligations of
which are rated in the highest short term rating category by each
Rating Agency (or, if not rated by either Rating Agency, otherwise
acceptable to such Rating Agency, as applicable, as confirmed in
writing that such investment would not result in the qualification,
downgrade or withdrawal of the rating then assigned by either Rating
Agency to any Class of Certificates);
(iv) units of taxable 2A-7 money market funds that are rated in
the highest applicable rating category by each Rating Agency, or
mutual funds that seek to maintain a constant asset value and either
(A) are rated by each Rating Agency in its highest applicable rating
category or (B) have been designated in writing by each Rating Agency
as Permitted Investments with respect to this definition;
(v) commercial paper of any corporation incorporated under the
laws of the United States or any state thereof rated no less than
"P-1" by Moody's and "F-1+" by Fitch; and
(vi) any other obligation or security which would not result in
the qualification, downgrade or withdrawal of the rating then assigned
by either Rating Agency to any Class of Certificates, evidence of
which shall be confirmed in writing by each Rating Agency to the
Trustee;
provided that no investment described hereunder shall evidence either the right
to receive (a) only interest with respect to such investment or (b) a yield to
maturity greater than 120% of the yield to maturity at par of the underlying
obligations; and provided, further, that no investment described hereunder may
be purchased at a price greater than par if such investment may be prepaid or
called at a price less than its purchase price prior to stated maturity; and
provided, further, that no investment described hereunder may be sold prior to
stated maturity if such sale would result in a loss of principal on the
instrument or a tax on "prohibited transactions" under Section 860F of the Code;
and provided, further, that no investment described hereunder may have an "r"
highlighter or other comparable qualifier attached to its rating; and provided,
further, that each investment described hereunder shall, by its terms, have a
predetermined fixed amount of principal due at maturity (that cannot vary or
change), an original maturity of not more than 365 days and either a fixed
interest rate or variable interest rate tied to a single interest rate index
plus a single fixed spread; and provided, further, that each investment
described hereunder shall be a "cash flow investment", as defined in the REMIC
Provisions.
"Permitted Transferee": Any Transferee of a Residual
Certificate other than either a Disqualified Organization or a Non-United States
Person; provided that if a Transferee is classified as a partnership under the
Code, such Transferee shall only be a Permitted Transferee if all of its
beneficial owners are United States Persons.
"Person": Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company or government or any agency or political subdivision
thereof.
-39-
<PAGE>
"Phase I Environmental Assessment": A "Phase I assessment" as
described in and meeting the criteria of Chapter 5 of the Fannie Mae Multifamily
Guide, Part II, as amended from time to time.
"P&I Advance": As to any Mortgage Loan or REO Loan, any
advance made by the Master Servicer or the Trustee pursuant to Section 4.03.
"Plan": As defined in Section 5.02(c).
"Prepayment Assumption": The assumption that each ARD Loan is
paid in full on its Anticipated Repayment Date and that no Mortgage Loan is
otherwise prepaid prior to its Stated Maturity Date, such assumption to be used
for determining the accrual of original issue discount, market discount and
premium, if any, on the Mortgage Loans, the Loan REMIC Regular Interests, the
REMIC I Regular Interests, the REMIC II Regular Interests and the Certificates
for federal income tax purposes.
"Prepayment Interest Excess": With respect to any Mortgage
Loan that was subject to a Principal Prepayment, in full or in part, after the
related Due Date in any Collection Period, any payment of interest (net of
related Master Servicing Fees and exclusive of Prepayment Premiums, Default
Interest and, in the case of an ARD Loan after its Anticipated Repayment Date,
Additional Interest) actually collected from the related Borrower and intended
to cover the period from the related Due Date in such Collection Period to the
date of prepayment.
"Prepayment Interest Shortfall": With respect to any Mortgage
Loan that was subject to a Principal Prepayment, in full or in part, prior to
the related Due Date in any Collection Period, the amount of uncollected
interest (determined without regard to any Prepayment Premium that may have been
collected) that would have accrued at a per annum rate equal to the sum of the
Net Mortgage Rate for such Mortgage Loan plus the Trustee Fee Rate, on the
amount of such Principal Prepayment during the period commencing on the date as
of which such Principal Prepayment was applied to such Mortgage Loan and ending
on the day prior to the related Due Date in such Collection Period, inclusive.
"Prepayment Premium": Any premium, penalty, charge or fee
(including, without limitation, a yield maintenance payment) paid or payable, as
the context requires, by a Borrower in connection with a Principal Prepayment
on, or other early collection of principal of, a Mortgage Loan or any successor
REO Loan.
"Primary Servicing Fee": With respect to each Mortgage Loan
that is subject to a Sub-Servicing Agreement as of the Closing Date, the monthly
fee payable to the Sub-Servicer by the Master Servicer from the Master Servicing
Fee.
"Primary Servicing Fee Rate": With respect to each Mortgage
Loan that is subject to a Sub-Servicing Agreement as of the Closing Date, the
rate per annum specified as such in the Mortgage Loan Schedule.
-40-
<PAGE>
"Primary Servicing Office": With respect to the Master
Servicer, the office thereof primarily responsible for performing its respective
duties under this Agreement, initially located in Horsham, Pennsylvania and,
with respect to the Special Servicer, the office thereof primarily responsible
for performing its respective duties under this Agreement, initially located in
Bethesda, Maryland and Dallas, Texas.
"Principal Balance Certificate": Any Class A, Class B, Class
C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L or
Class M Certificate.
"Principal Distribution Amount": With respect to any
Distribution Date, an amount (calculated in accordance with Section 1.02) equal
to the aggregate (without duplication) of:
(a) all payments of principal (other than Principal
Prepayments) received on the Mortgage Loans during the related
Collection Period, in each case net of any portion of the
particular payment that represents a late collection of principal
for which a P&I Advance was previously made for a prior
Distribution Date or that represents the principal portion of a
Scheduled P&I Payment due on or before the Cut-off Date or on a
Due Date subsequent to the end of the related Collection Period;
(b) the principal portion of all Scheduled P&I Payments due
in respect of the Mortgage Loans for their respective Due Dates
occurring during the related Collection Period, that were
received prior to the end of the related Collection Period;
(c) all Principal Prepayments received on the Mortgage Loans
during the related Collection Period;
(d) all other collections (including Liquidation Proceeds,
Insurance Proceeds and REO Revenues) that were received on or in
respect of the Mortgage Loans and any REO Properties during the
related Collection Period and that were identified and applied by
the Master Servicer as recoveries of principal of such Mortgage
Loans or the related REO Loans, as the case may be, in each case
net of any portion of the particular collection that represents a
late collection of principal due on or before the Cut-off Date or
for which a P&I Advance was previously made for a prior
Distribution Date; and
(e) the principal portion of all P&I Advances made in
respect of the Mortgage Loans and REO Loans for such Distribution
Date.
"Principal Prepayment": Any payment of principal made by the
Borrower on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest (without regard to
any Prepayment Premium that may have been collected) representing scheduled
interest due on any date or dates in any month or months subsequent to the month
of prepayment.
"Proposed Plan": As defined in Section 3.17(a).
-41-
<PAGE>
"Prospectus Supplement": That certain prospectus supplement
dated August 5, 1999, relating to the Registered Certificates, that is a
supplement to the Base Prospectus.
"PTCE": As defined in Section 5.02(c).
"PTE": As defined in Section 5.02(c).
"Purchase Price": With respect to any Mortgage Loan, a price
equal to the unpaid principal balance of the Mortgage Loan as of the date of
purchase, together with (a) all accrued and unpaid interest (excluding, in the
case of an ARD Loan after its Anticipated Repayment Date, Additional Interest)
on the Mortgage Loan at the related Mortgage Rate to but not including the Due
Date in the Collection Period of purchase, (b) all related unreimbursed
Servicing Advances, and (c) if paid in connection with any repurchase of such
Mortgage Loan by Llama or SBRC or any Affiliate of either of them pursuant to
Section 2.03, all accrued and unpaid Advance Interest in respect of related
Advances and (without duplication of the amounts described in the immediately
preceding clause (b)) all other unreimbursed costs and expenses incurred by the
Trust in connection with such repurchase. With respect to any REO Property, a
price equal to the unpaid principal balance of the related REO Loan as of the
date of purchase, together with (a) all accrued and unpaid interest (excluding,
in the case of an ARD Loan after its Anticipated Repayment Date, Additional
Interest) on such REO Loan at the related Mortgage Rate to but not including the
Due Date in the Collection Period of purchase, (b) all related unreimbursed
Servicing Advances, and (c) if paid in connection with any repurchase of such
REO Property by Llama or SBRC or any Affiliate of either them pursuant to
Section 2.03, all accrued and unpaid Advance Interest in respect of related
Advances and (without duplication of the amounts described in the immediately
preceding clause (b)) all other unreimbursed costs and expenses incurred by the
Trust in connection with such repurchase. The Purchase Price of any Mortgage
Loan or REO Property is intended to include, without limitation, principal and
interest previously advanced with respect thereto and not previously reimbursed.
"Qualified Appraiser": In connection with the appraisal of any
Mortgaged Property or REO Property, an Independent appraiser, who is a member in
good standing of the Appraisal Institute, with at least five years of experience
in respect of the relevant geographic location and property type.
"Qualified Institutional Buyer": A "qualified institutional
buyer" within the meaning of Rule 144A under the Securities Act.
"Qualified Insurer": An insurance company or security or
bonding company qualified to write the related Insurance Policy in the relevant
jurisdiction.
"Rated Certificate": Any of the Certificates to which a rating
has been assigned by either Rating Agency at the request of the Depositor.
"Rated Final Distribution Date": The Distribution Date in May
2032.
"Rating Agency": Each of Moody's and Fitch.
-42-
<PAGE>
"Realized Loss": With respect to each defaulted Mortgage Loan
as to which a Final Recovery Determination has been made, or with respect to any
REO Loan as to which a Final Recovery Determination has been made as to the
related REO Property, an amount (not less than zero) equal to (i) the unpaid
principal balance of such Mortgage Loan or REO Loan, as the case may be, as of
the commencement of the Collection Period in which the Final Recovery
Determination was made, plus (ii) all accrued but unpaid interest (excluding
Default Interest and, in the case of an ARD Loan after its Anticipated Repayment
Date, Additional Interest) on such Mortgage Loan or any REO Loan, as the case
may be (without taking into account the amounts described in subclause (iv) of
this sentence), to but not including the Due Date in the Collection Period in
which the Final Recovery Determination was made, plus (iii) any related
unreimbursed Servicing Advances as of the commencement of the Collection Period
in which the Final Recovery Determination was made, together with any new
related Servicing Advances made during such Collection Period, minus (iv) all
payments and proceeds, if any, received in respect of such Mortgage Loan or REO
Loan, as the case may be, during the Collection Period in which such Final
Recovery Determination was made (net of any related Liquidation Expenses paid
therefrom).
With respect to any Mortgage Loan as to which any portion of
the outstanding principal or accrued interest owed thereunder was forgiven in
connection with a bankruptcy, insolvency or similar proceeding involving the
related Borrower or a modification, waiver or amendment of such Mortgage Loan
granted or agreed to by the Master Servicer or Special Servicer pursuant to
Section 3.20, the amount of such principal or interest (other than any Default
Interest or Additional Interest) so forgiven.
With respect to any Mortgage Loan as to which the Mortgage
Rate thereon has been permanently reduced and not recaptured for any period in
connection with a bankruptcy, insolvency or similar proceeding involving the
related Borrower or a modification, waiver or amendment of such Mortgage Loan
granted or agreed to by the Master Servicer or Special Servicer pursuant to
Section 3.20, the amount of the consequent reduction, if any, in the interest
portion of each successive Scheduled P&I Payment due thereon. Each such Realized
Loss shall be deemed to have been incurred on the Due Date for each affected
Scheduled P&I Payment.
"Record Date": With respect to each Class of Certificates, for
any Distribution Date, the last Business Day of the calendar month immediately
preceding the month in which such Distribution Date occurs.
"Registered Certificates": Collectively, the Class X, Class
A-1, Class A-2, Class B, Class C, Class D, Class E and Class F Certificates.
"Reimbursement Rate": The rate per annum applicable to the
accrual of Advance Interest, which rate per annum shall be equal to the "prime
rate" as published in the "Money Rates" section of The Wall Street Journal, as
such "prime rate" may change from time to time. If The Wall Street Journal
ceases to publish such "prime rate", then the Trustee, in its sole discretion,
shall select an equivalent publication that publishes such "prime rate"; and if
such "prime rate" is no longer generally published or is limited, regulated or
administered by a governmental or quasi-governmental body, then the Trustee
shall select a comparable interest rate index. In either case, such selection
-43-
<PAGE>
shall be made by the Trustee in its sole discretion and the Trustee shall notify
the Master Servicer and the Special Servicer in writing of its selection.
"Release Date": As defined in Section 3.20(g).
"REMIC": A "real estate mortgage investment conduit" as
defined in Section 860D of the Code.
"REMIC I": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election is to be made, consisting of: (i) the
Mortgage Loans as from time to time are subject to this Agreement (other than
the Park View Plaza Mortgage Loan, the 625 Polk Street Mortgage Loan, the Fourth
Avenue Marketplace Mortgage Loan, the GTE Plaza Shopping Center Mortgage Loan,
the Holmead Apartments Mortgage Loan, the Parker Paints (Andresen Plaza)
Mortgage Loan and the 500 Third Street Mortgage Loan) and all payments under and
proceeds of such Mortgage Loans received or receivable after the Cut-off Date
(exclusive of Additional Interest collected in respect of the ARD Loans after
their respective Anticipated Repayment Dates and further exclusive of payments
of principal, interest and other amounts due and payable on the Mortgage Loans
on or before the Cut-off Date), together with all documents, Escrow Payments and
Reserve Funds delivered or caused to be delivered hereunder with respect to such
Mortgage Loans by the Mortgage Loan Sellers; (ii) any REO Property acquired in
respect of a Mortgage Loan (other than the Park View Plaza Mortgage Loan, the
625 Polk Street Mortgage Loan, the Fourth Avenue Marketplace Mortgage Loan, the
GTE Plaza Shopping Center Mortgage Loan, the Holmead Apartments Mortgage Loan,
the Parker Paints (Andresen Plaza) Mortgage Loan and the 500 Third Street
Mortgage Loan) and all payments and proceeds of such REO Property; (iii) such
funds or assets as from time to time are deposited in the Distribution Account,
the Collection Account, the Interest Reserve Account and the REO Account (if
established); and (iv) the Loan REMIC Regular Interests and all payments under
and proceeds of such Loan REMIC Regular Interests received after the Closing
Date.
"REMIC I Regular Interest": Any of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a "regular interest" in REMIC I. Each REMIC I Regular Interest
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance.
"REMIC I Remittance Rate": With respect to any Distribution
Date: (a) in the case of any REMIC I Regular Interest that directly or
indirectly corresponds to a Mortgage Loan (or any successor REO Loan) that, as
of the Closing Date, provided for the accrual of interest on a 30/360 Basis, a
per annum rate equal to the Net Mortgage Rate in effect for such Mortgage Loan
as of the Closing Date; and (b) in the case of any REMIC I Regular Interest that
directly or indirectly corresponds to a Mortgage Loan (or any successor REO
Loan) that, as of the Closing Date, provided for the accrual of interest on an
Actual/360 Basis or an Actual/365 Basis, a per annum rate equal to a fraction
(expressed as a percentage), the numerator of which is (subject to adjustment as
provided below) the product of twelve (12) times the aggregate amount of
interest that would have accrued during the related Interest Accrual Period on
the Uncertificated Principal Balance of such REMIC I Regular Interest
outstanding immediately prior to such Distribution Date if such interest were
-44-
<PAGE>
calculated on an Actual/360 Basis or an Actual/365 Basis, as applicable, at the
Net Mortgage Rate in effect for the related Mortgage Loan as of the Closing
Date, and the denominator of which is the Uncertificated Principal Balance of
such REMIC I Regular Interest outstanding immediately prior to such Distribution
Date; provided that, in the case of a REMIC I Regular Interest that directly or
indirectly corresponds to an Interest Reserve Loan, if the subject Distribution
Date occurs during February of any year or during January of any year other than
a leap year, the amount of the numerator for the fraction described in clause
(b) above shall be reduced by the related Interest Reserve Amount to be
deposited in the Interest Reserve Account on such Distribution Date and, if the
subject Distribution Date occurs during March of any year, the amount of the
numerator for the fraction described in clause (b) above shall be increased by
any related Interest Reserve Amounts transferred from the Interest Reserve
Account to the Distribution Account for distribution on such Distribution Date
in March.
"REMIC I Residual Interest": The sole uncertificated "residual
interest" within the meaning of Section 860G(a)(2) of the Code, in REMIC I
issued pursuant to this Agreement.
"REMIC II": The segregated pool of assets consisting of all of
the REMIC I Regular Interests, with respect to which a separate REMIC election
is to be made.
"REMIC II Regular Interest": Any of the 13 separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a "regular interest" in REMIC II. Each REMIC II Regular Interest
shall accrue interest at the REMIC II Remittance Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto. The designations for the respective REMIC II Regular Interests are set
forth in the Preliminary Statement hereto.
"REMIC II Remittance Rate": With respect to each REMIC II
Regular Interest, for any Distribution Date, the Weighted Average REMIC I
Remittance Rate for such Distribution Date.
"REMIC III": The segregated pool of assets consisting of all
of the REMIC II Regular Interests, with respect to which a separate REMIC
election is to be made.
"REMIC III Certificate": Any Certificate, other than a Class
R-I or Class R-II Certificate.
"REMIC III Regular Certificate": Any REMIC III Certificate,
other than a Class R-III Certificate.
"REMIC Pool": Any of REMIC I, REMIC II, REMIC III, the Park
View Plaza REMIC, the 625 Polk Street REMIC, the Fourth Avenue Marketplace
REMIC, the GTE Plaza Shopping Center REMIC, the Holmead Apartments REMIC, the
Parker Paints (Andresen Plaza) REMIC and the 500 Third Street REMIC.
-45-
<PAGE>
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Sections
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and proposed, temporary and final Treasury regulations and any
published rulings, notices and announcements promulgated thereunder, as the
foregoing may be in effect from time to time.
"REMIC Sub-Account": A sub-account of the Distribution Account
established pursuant to Section 3.04(b), which sub-account shall constitute an
asset of the Trust Fund and REMIC I (or any Loan REMIC), but not an asset of
either Grantor Trust Pool.
"Rents from Real Property": With respect to any REO Property,
gross income of the character described in Section 856(d) of the Code.
"REO Account": A segregated custodial account or accounts
created and maintained by the Special Servicer pursuant to Section 3.16(b) on
behalf of the Trustee in trust for the Certificateholders, which shall be
entitled "BNY Asset Solutions LLC [or the name of any successor Special
Servicer], as Special Servicer, in trust for registered holders of Salomon
Brothers Mortgage Securities VII, Inc., Commercial Mortgage Pass-Through
Certificates, Series 1999-C1".
"REO Acquisition": The acquisition of any REO Property
pursuant to Section 3.09.
"REO Disposition": The sale or other disposition of the REO
Property pursuant to Section 3.18(d).
"REO Extension": As defined in Section 3.16(a).
"REO Loan": The mortgage loan deemed for purposes hereof to be
outstanding with respect to the REO Property acquired in respect of any Mortgage
Loan. Each REO Loan shall be deemed to provide for monthly payments of principal
and/or interest equal to its Assumed P&I Payment and otherwise to have the same
terms and conditions as the predecessor Mortgage Loan. Each REO Loan shall be
deemed to have an initial unpaid principal balance and Stated Principal Balance
equal to the unpaid principal balance and Stated Principal Balance,
respectively, of the predecessor Mortgage Loan as of the date of the related REO
Acquisition. In addition, all Scheduled P&I Payments (other than any Balloon
Payment, except to the extent it constitutes part of any related Assumed P&I
Payments), Assumed P&I Payments (in the case of a Balloon Mortgage Loan
delinquent in respect of its Balloon Payment) and other amounts due and owing,
or deemed to be due and owing, in respect of the predecessor Mortgage Loan as of
the date of the related REO Acquisition, shall be deemed to continue to be due
and owing in respect of an REO Loan. All amounts payable or reimbursable to the
Master Servicer, the Special Servicer and/or the Trustee in respect of the
related Mortgage Loan as of the date of the related REO Acquisition, including,
without limitation, any unpaid Servicing Fees and any unreimbursed Advances,
together with any Advance Interest accrued and payable to the Master Servicer,
the Special Servicer and/or the Trustee in respect of such Advances, shall
continue to be payable or reimbursable to the Master Servicer, the Special
Servicer and/or the Trustee, as the case may be, in respect of an REO Loan.
-46-
<PAGE>
"REO Property": A Mortgaged Property acquired by the Special
Servicer on behalf of the Trust for the benefit of the Certificateholders
pursuant to Section 3.09 through foreclosure, acceptance of a deed-in-lieu of
foreclosure or otherwise in accordance with applicable law in connection with
the default or imminent default of a Mortgage Loan.
"REO Revenues": All income, rents, profits and proceeds
derived from the ownership, operation or leasing of any REO Property.
"REO Status Report": A report or reports substantially in the
form of Exhibit G-4 attached hereto setting forth, among other things, with
respect to each REO Property that was included in the Trust Fund as of the close
of business on the Determination Date immediately preceding the preparation of
such report or reports, (i) the Acquisition Date of such REO Property, (ii) the
amount of REO Revenues collected with respect to such REO Property (net of
related expenses) and other amounts, if any, received on such REO Property
during the Collection Period ending on such Determination Date and (iii) the
value of such REO Property based on the most recent Appraisal or other valuation
thereof available to the Master Servicer as of such Determination Date
(including any valuation prepared internally by the Special Servicer).
"REO Tax": As defined in Section 3.17(a).
"Representing Party": As defined in Section 2.05(c).
"Request for Release": A request for release signed by a
Servicing Officer of, as applicable, the Master Servicer or Special Servicer in
the form of Exhibit E attached hereto.
"Required Appraisal Loan": As defined in Section 3.19(b).
"Required Claims-Paying Ratings": With respect to any
insurance carrier, a claims-paying ability (or equivalent) rating of "A2" or
better from Moody's and a claims-paying ability (or equivalent) rating of "A" or
better from Fitch (or, if not rated by Fitch, A-IX from A.M. Best Company);
unless, in the case of either Rating Agency, such Rating Agency has confirmed in
writing that an insurance company with lower or fewer claims-paying ability
ratings shall not result, in and of itself, in a downgrading or withdrawal of
the then current rating assigned by such Rating Agency to any Class of
Certificates.
"Reserve Account": The account or accounts created and
maintained pursuant to Section 3.03(d).
"Reserve Funds": With respect to any Mortgage Loan, any
amounts delivered by the related Borrower to be held in escrow by or on behalf
of the mortgagee representing reserves for principal and interest payments,
repairs, replacements, capital improvements (including, without limitation,
tenant improvements and leasing commissions), and/or environmental testing and
remediation with respect to the related Mortgaged Property.
"Residual Certificate": Any Class R-I, Class R-II or Class
R-III Certificate.
-47-
<PAGE>
"Responsible Officer": When used with respect to the Trustee,
any officer assigned to the Capital Markets Fiduciary Services (CMBS) Department
of the Trustee, any vice president, any assistant vice president, any assistant
secretary, any assistant treasurer, or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers to whom a particular matter is referred by the Trustee
because of such officer's knowledge of and familiarity with the particular
subject. When used with respect to any Certificate Registrar (other than the
Trustee), any officer or assistant officer thereof.
"Responsible Party": With respect to any Document Defect or
alleged Document Defect or any breach or alleged breach of a representation or
warranty set forth in Section 2.05(c), either: (i) Llama, if such Document
Defect or alleged Document Defect relates to a Llama Mortgage Loan or if such
breach or alleged breach is of a representation or warranty as to which Llama is
the Representing Party; or (ii) SBRC, if such Document Defect or alleged
Document Defect relates to a SBRC Mortgage Loan or if such breach or alleged
breach is of a representation or warranty as to which SBRC is the Representing
Party.
"SBRC": Salomon Brothers Realty Corp., or its successor in
interest.
"SBRC Mortgage Loan": Any of the Mortgage Loans which are the
subject of the SBRC Mortgage Loan Purchase Agreement and as to which "SBRC" is
identified on the Mortgage Loan Schedule under the heading "Loan Contributor".
"SBRC Mortgage Loan Purchase Agreement": That certain mortgage
loan purchase agreement dated August 5, 1999, between SBRC and the Depositor.
"Scheduled P&I Payment": With respect to any Mortgage Loan,
for any Due Date as of which such Mortgage Loan is outstanding, the scheduled
monthly payment (or, in the case of an ARD Loan after its Anticipated Repayment
Date, the minimum required monthly payment) of principal and/or interest on such
Mortgage Loan, including, without limitation, a Balloon Payment, that is (in the
absence of default) actually payable by the related Borrower from time to time
under the terms of the related Mortgage Note (as such terms may be changed or
modified in connection with a bankruptcy or similar proceeding involving the
related Borrower or a modification, waiver or amendment of such Mortgage Loan
granted or agreed to by the Master Servicer or Special Servicer pursuant to
Section 3.20) and applicable law; provided that the Scheduled P&I Payment due in
respect of any ARD Loan after its Anticipated Repayment Date shall not include
Additional Interest.
"Securities Act": The Securities Act of 1933, as amended.
"Security Agreement": With respect to any Mortgage Loan, any
security agreement, chattel mortgage or similar document or instrument, whether
contained in the related Mortgage or executed separately, creating in favor of
the holder of such Mortgage a security interest in the personal property
constituting security for repayment of such Mortgage Loan.
"Senior Certificate": Any Class A-1, Class A-2 or Class X
Certificate.
-48-
<PAGE>
"Senior Principal Distribution Cross-Over Date": The first
Distribution Date as of which the aggregate of the Class Principal Balances of
the Class A-1 and Class A-2 Certificates outstanding immediately prior to such
Distribution Date equals or exceeds the sum of (a) the aggregate Stated
Principal Balance of the Mortgage Pool that will be outstanding immediately
following such Distribution Date, plus (b) the lesser of (i) the Principal
Distribution Amount for such Distribution Date and (ii) the portion of the
Available Distribution Amount for such Distribution Date that will remain after
the distributions of all Distributable Certificate Interest to be made on the
Senior Certificates on such Distribution Date have been so made.
"Servicing Account": The account or accounts created and
maintained pursuant to Section 3.03(a).
"Servicing Advances": All customary, reasonable and necessary
"out of pocket" costs and expenses incurred or to be incurred, as the context
requires, by the Master Servicer or the Special Servicer (or, if applicable, the
Trustee) in connection with the servicing of a Mortgage Loan after a default,
delinquency or other unanticipated event, or in connection with the
administration of any REO Property, including, but not limited to, the cost of
(a) compliance with the obligations of the Master Servicer and/or the Special
Servicer set forth in Sections 3.03(c) and 3.09, (b) the preservation,
insurance, restoration, protection and management of a Mortgaged Property, (c)
obtaining any Liquidation Proceeds or Insurance Proceeds in respect of any
Mortgage Loan or REO Property, (d) any enforcement or judicial proceedings with
respect to a Mortgaged Property, including, without limitation, foreclosures,
and (e) the operation, management, maintenance and liquidation of any REO
Property; provided that notwithstanding anything to the contrary, "Servicing
Advances" shall not include allocable overhead of the Master Servicer or the
Special Servicer, such as costs for office space, office equipment, supplies and
related expenses, employee salaries and related expenses and similar internal
costs and expenses, or costs incurred by either such party in connection with
its purchase of any Mortgage Loan or REO Property pursuant to any provision of
this Agreement. All Emergency Advances made by the Special Servicer hereunder
shall be considered "Servicing Advances" for the purposes hereof.
"Servicing Fees": With respect to each Mortgage Loan and REO
Loan, the Master Servicing Fee and the Special Servicing Fee.
"Servicing File": Any documents (other than documents required
to be part of the related Mortgage File), including, without limitation, the
related environmental site assessment report(s) referred to in Section
2.05(c)(xiv), in the possession of the Master Servicer or the Special Servicer
and relating to the origination and servicing of any Mortgage Loan.
"Servicing Officer": Any officer or authorized signatory of
the Master Servicer or the Special Servicer involved in, or responsible for, the
administration and servicing of Mortgage Loans, whose name and specimen
signature appear on a list of such officers and authorized signatories furnished
by such party to the Trustee and the Depositor on the Closing Date, as such list
may be amended from time to time thereafter.
-49-
<PAGE>
"Servicing Return Date": With respect to any Corrected
Mortgage Loan, the date that servicing thereof is returned by the Special
Servicer to the Master Servicer pursuant to Section 3.21(a).
"Servicing Standard": With respect to each of the Master
Servicer and the Special Servicer, to service and administer the Mortgage Loans
and any REO Properties for which such Person is responsible hereunder: (i) with
the same care, skill and diligence as is normal and usual in its general
mortgage servicing and REO property management activities on behalf of third
parties or on behalf of itself, whichever is higher, with respect to mortgage
loans and REO properties that are comparable to those for which it is
responsible hereunder; (ii) with a view to the timely collection of all
scheduled payments of principal and interest due under the Mortgage Loans or, if
a Mortgage Loan comes into and continues in default and if, in the good faith
and reasonable judgment of the Special Servicer, no satisfactory arrangements
can be made for the collection of the delinquent payments, the maximization of
the recovery on such Mortgage Loan to the Certificateholders (as a collective
whole) on a present value basis (the relevant discounting of anticipated
collections that will be distributable to Certificateholders to be performed at
the related Net Mortgage Rate); and (iii) without regard to (A) any relationship
that the Master Servicer or the Special Servicer, as the case may be, or any
Affiliate thereof may have with the related Borrower, (B) the ownership of any
Certificate by the Master Servicer or the Special Servicer, as the case may be,
or by any Affiliate thereof, (C) the Master Servicer's obligation to make
Advances, (D) the Special Servicer's obligation to make (or to direct the Master
Servicer to make) Servicing Advances and (E) the right of the Master Servicer
(or any Affiliate thereof) or the Special Servicer (or any Affiliate thereof),
as the case may be, to receive reimbursement of costs, or the sufficiency of any
compensation payable to it, hereunder or with respect to any particular
transaction.
"Servicing Transfer Event": With respect to any Mortgage Loan,
the occurrence of any of the events described in clauses (a) through (h) of the
definition of "Specially Serviced Mortgage Loan".
"Single Certificate": For purposes of Section 4.02(a), a
hypothetical Certificate of any Class of REMIC III Regular Certificates
evidencing a $1,000 denomination or, in the case of a Class X Certificate, a
100% Percentage Interest in the related Class.
"Sole Certificateholder": Any Holder of 100% of the
Certificates.
"Special Servicer": BNY Asset Solutions LLC, in its capacity
as special servicer, its successor in interest or any successor special servicer
appointed as herein provided.
"Special Servicer Loan Status Report": A report or reports
setting forth, among other things, as of the close of business on the
Determination Date immediately preceding the preparation of such report or
reports, (i) the aggregate unpaid principal balance of all Specially Serviced
Mortgage Loans and (ii) a loan-by-loan listing of all Specially Serviced
Mortgage Loans indicating their status and the date and reason for transfer to
the Special Servicer, substantially in the form of Exhibit G-5 attached hereto.
-50-
<PAGE>
"Special Servicing Fee": With respect to each Specially
Serviced Mortgage Loan and each REO Loan, the fee designated as such and payable
to the Special Servicer pursuant to the first paragraph of Section 3.11(c).
"Special Servicing Fee Rate": With respect to each Specially
Serviced Mortgage Loan and each REO Loan, 0.25% per annum.
"Specially Serviced Mortgage Loan": Any Mortgage Loan as to
which any of the following events has occurred:
(a) the failure of the related Borrower to make when due any
Balloon Payment, which failure continues, or the Master
Servicer determines in its good faith and reasonable judgment
will continue, unremedied for thirty (30) days;
(b) the failure of the related Borrower to make when due any
Scheduled P&I Payment (other than a Balloon Payment) or any
other payment required under the related Mortgage Note or the
related Mortgage, which failure continues, or the Master
Servicer determines in its good faith and reasonable judgment
will continue, unremedied for sixty (60) days;
(c) the determination by the Master Servicer in its good faith and
reasonable judgment that a default in the making of a
Scheduled P&I Payment (including a Balloon Payment) or any
other payment required under the related Mortgage Note or the
related Mortgage is likely to occur within thirty (30) days
and either (i) such default is likely to remain unremedied for
at least sixty (60) days or, in the case of a Balloon Payment,
for at least thirty (30) days, or (ii) the related Borrower
has requested a material modification of the related Mortgage
Loan (other than a waiver of a "due-on-sale" clause or the
extension of the related maturity date) which is otherwise
permitted pursuant to this Agreement;
(d) any default under the related loan documents, other than a
payment default, that may, in the Master Servicer's good faith
and reasonable judgment, materially impair the value of the
related Mortgaged Property as security for the Mortgage Loan
or otherwise materially and adversely affect the interests of
Certificateholders, which default continues unremedied for the
applicable cure period under the terms of the Mortgage Loan
(or, if no cure period is specified, thirty (30) days);
(e) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an
involuntary case under any present or future federal or state
bankruptcy, insolvency or similar law or the appointment of a
conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities,
or similar proceedings, or for the winding-up or liquidation
of its affairs, shall have been entered against the related
Borrower and such decree or order shall have remained in force
undischarged or unstayed for a period of sixty (60) days;
-51-
<PAGE>
(f) the related Borrower shall have consented to the appointment
of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets, and liabilities
or similar proceedings of or relating to such Borrower or of
or relating to all or substantially all of its property;
(g) the related Borrower shall have admitted in writing its
inability to pay its debts generally as they become due, filed
a petition to take advantage of any applicable insolvency or
reorganization statute, made an assignment for the benefit of
its creditors, or voluntarily suspended payment of its
obligations; or
(h) the Master Servicer shall have received notice of the
commencement of foreclosure or similar proceedings with
respect to the related Mortgaged Property or Properties;
provided that, a Mortgage Loan will cease to be a Specially Serviced Mortgage
Loan, when a Liquidation Event has occurred with respect to such Mortgage Loan,
when the related Mortgaged Property has become an REO Property, or at such time
as such of the following as are applicable occur with respect to the
circumstances identified above that caused the Mortgage Loan to be characterized
as a Specially Serviced Mortgage Loan (and provided that no other Servicing
Transfer Event then exists):
(w) with respect to the circumstances described in clauses (a) and
(b) above, when the related Borrower has made three
consecutive full and timely Scheduled P&I Payments under the
terms of such Mortgage Loan (as such terms may be changed or
modified in connection with a bankruptcy or similar proceeding
involving the related Borrower or by reason of a modification,
waiver or amendment granted or agreed to by the Master
Servicer or Special Servicer pursuant to Section 3.20);
(x) with respect to the circumstances described in clauses (c),
(e), (f) and (g) above, when such circumstances cease to exist
in the good faith and reasonable judgment of the Special
Servicer;
(y) with respect to the circumstances described in clause (d)
above, when such default is cured; and
(z) with respect to the circumstances described in clause (h)
above, when such proceedings are terminated.
"Startup Day": With respect to each of REMIC I, REMIC II and
REMIC III, the day designated as such in Section 10.01(c). With respect to each
Loan REMIC, the day designated as such in the related Loan REMIC Declaration.
"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
-52-
<PAGE>
Servicer pursuant to Section 3.20 and, in the case of an ARD Loan, without
regard to its Anticipated Repayment Date.
"Stated Principal Balance": With respect to any Mortgage Loan
(and any successor REO Loan), a principal amount initially equal to the Cut-off
Date Balance of such Mortgage Loan, that is permanently reduced on each
Distribution Date (to not less than zero) by (i) that portion, if any, of the
Principal Distribution Amount for such Distribution Date that is attributable to
such Mortgage Loan (or such successor REO Loan), and (ii) the principal portion
of any Realized Loss incurred in respect of such Mortgage Loan (or such
successor REO Loan) during the related Collection Period. Notwithstanding the
foregoing, if a Liquidation Event occurs in respect of any Mortgage Loan or REO
Property, then the "Stated Principal Balance" of such Mortgage Loan or of the
related REO Loan, as the case may be, shall be zero commencing as of the
Distribution Date in the Collection Period next following the Collection Period
in which such Liquidation Event occurred.
"Sub-Servicer": Any Person with which the Master Servicer or
the Special Servicer has entered into a Sub-Servicing Agreement.
"Sub-Servicer Termination Compensation": As defined in Section
3.22(d).
"Sub-Servicer Termination Fee": As defined in Section 3.22(d).
"Sub-Servicing Agreement": The written contract between the
Master Servicer or the Special Servicer, on the one hand, and any Sub-Servicer,
on the other hand, relating to servicing and administration of Mortgage Loans as
provided in Section 3.22.
"Tax Administrator": Any tax administrator appointed pursuant
to Section 10.03 (or, in the absence of any such appointment, the Trustee).
"Tax Matters Person": With respect to each REMIC Pool, the
Person designated as the "tax matters person" of such REMIC in the manner
provided under Treasury regulation section 1.860F-4(d) and temporary Treasury
regulation section 301.6231(a)(7)-1T, which shall be, for each REMIC Pool, the
Holder of Certificates evidencing the largest Percentage Interest in the related
Class of Residual Certificates.
"Tax Returns": The federal income tax return on Internal
Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income
Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of each of REMIC Pool due to its classification as a REMIC
under the REMIC Provisions, together with any and all other information, reports
or returns that may be required to be furnished to the Certificateholders or
filed with the Internal Revenue Service or any other governmental taxing
authority under any applicable provisions of federal law or Applicable State
Law.
"Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment of any Ownership Interest in a
Certificate or Loan REMIC Residual Interest.
-53-
<PAGE>
"Transferee": Any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.
"Transferor": Any Person who is disposing by Transfer any
Ownership Interest in a Certificate.
"Trust": The common law trust created hereby.
"Trust Fund": Collectively, all of the assets of each REMIC
Pool and each Grantor Trust Pool.
"Trustee": The Chase Manhattan Bank or its successor in
interest, in its capacity as trustee hereunder, or any successor trustee
appointed as herein provided.
"Trustee Fee": The fee payable to the Trustee on each
Distribution Date for its services as Trustee hereunder, in an aggregate amount
equal to one month's interest at the Trustee Fee Rate in respect of each
Mortgage Loan and REO Loan, calculated on the same Interest Accrual Basis as is
applicable to the accrual of interest on such Mortgage Loan and accrued during
the related Interest Accrual Period on the Stated Principal Balance of such
Mortgage Loan or REO Loan, as the case may be, outstanding immediately prior to
such Distribution Date.
"Trustee Fee Rate": A rate of 0.003% per annum.
"UCC": The Uniform Commercial Code in effect in the applicable
jurisdiction.
"UCC Financing Statement": A financing statement executed and
filed pursuant to the Uniform Commercial Code, as in effect in the relevant
jurisdiction.
"UCC-1", "UCC-2" and "UCC-3": UCC financing statements on Form
UCC-1, Form UCC-2 and Form UCC-3, respectively.
"Uncertificated Accrued Interest": With respect to any REMIC I
Regular Interest, for any Distribution Date, one month's interest (calculated on
a 30/360 Basis) at the REMIC I Remittance Rate applicable to such REMIC I
Regular Interest for such Distribution Date, accrued on the Uncertificated
Principal Balance of such REMIC I Regular Interest outstanding immediately prior
to such Distribution Date; and, with respect to any REMIC II Regular Interest,
for any Distribution Date, one month's interest (calculated on a 30/360 Basis)
at the REMIC II Remittance Rate applicable to such REMIC II Regular Interest for
such Distribution Date, accrued on the Uncertificated Principal Balance of such
REMIC II Regular Interest outstanding immediately prior to such Distribution
Date. The Uncertificated Accrued Interest in respect of any REMIC I Regular
Interest or REMIC II Regular Interest for any Distribution Date shall be deemed
to have accrued during the related Interest Accrual Period.
-54-
<PAGE>
"Uncertificated Distributable Interest": With respect to any
REMIC I Regular Interest, for any Distribution Date, the Uncertificated Accrued
Interest in respect of such REMIC I Regular Interest for such Distribution Date,
reduced (to not less than zero) by that portion, if any, of the Net Aggregate
Prepayment Interest Shortfall, if any, for such Distribution Date that is
attributable to the Mortgage Loan that corresponds to such REMIC I Regular
Interest; and, with respect to any REMIC II Regular Interest for any
Distribution Date, the Uncertificated Accrued Interest in respect of such REMIC
II Regular Interest for such Distribution Date, reduced (to not less than zero)
by that portion, if any, of the Net Aggregate Prepayment Interest Shortfall for
such Distribution Date allocated to such REMIC II Regular Interest as provided
below. The portion, if any, of the Net Aggregate Prepayment Interest Shortfall
for any Distribution Date that is allocated to any Class of Principal Balance
Certificates in accordance with the definition of "Distributable Certificate
Interest" shall be deemed to have first been allocated to the Corresponding
REMIC II Regular Interest. In addition, the portion, if any, of the Net
Aggregate Prepayment Interest Shortfall for any Distribution Date that is
allocated to the Class X Certificates in accordance with the definition of
"Distributable Certificate Interest" shall be deemed to have first been
allocated to all the REMIC II Regular Interests up to an amount equal to, and on
a pro rata basis in accordance with, the Class X Portion of the Uncertificated
Accrued Certificate Interest in respect of each such REMIC II Regular Interest
for such Distribution Date.
"Uncertificated Principal Balance": The principal amount of
any REMIC I Regular Interest or REMIC II Regular Interest outstanding as of any
date of determination. As of the Closing Date, the Uncertificated Principal
Balance of each REMIC I Regular Interest shall equal the Cut-off Date Balance of
the related Mortgage Loan, and the Uncertificated Principal Balance of each
REMIC II Regular Interest shall equal the amount specified as its initial
Uncertificated Principal Balance in the Preliminary Statement hereto. On each
Distribution Date, the Uncertificated Principal Balance of each REMIC II Regular
Interest shall be permanently reduced by all distributions of principal deemed
to have been made thereon on such Distribution Date pursuant to Section 4.05(a)
and, if and to the extent appropriate, shall be further permanently reduced on
such Distribution Date as provided in Section 4.05(d). On each Distribution
Date, the Uncertificated Principal Balance of each REMIC I Regular Interest
shall be permanently reduced by all distributions of principal deemed to have
been made thereon on such Distribution Date pursuant to Section 4.05(e) and, if
and to the extent appropriate, shall be further permanently reduced on such
Distribution Date as provided in Section 4.05(g).
"Underwriters": Collectively, Salomon Smith Barney Inc., or
its successor in interest, and Banc of America Securities LLC, or its successor
in interest.
"United States Person": A citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision thereof, or an
estate whose income from sources without the United States is includible in
gross income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States, or
a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
Persons have the authority to control all substantial decisions of the trust,
all within the meaning of Section 7701(a)(30) of the Code.
-55-
<PAGE>
"Unrestricted Servicer Reports": Each of the Delinquent Loan
Status Report, the Historical Loan Modification Report, the Historical Loss
Estimate Report, the REO Status Report and the CSSA Reports.
"USPAP": The Uniform Standards of Professional Appraisal
Practices.
"Voting Rights": The voting rights evidenced by the
Certificates. At all times during the term of this Agreement, 97.0% of the
Voting Rights shall be allocated among the Holders of the various outstanding
Classes of Principal Balance Certificates in proportion to the respective Net
Class Principal Balances of their Certificates, 2.0% of the Voting Rights shall
be allocated to the Holders of the Class X Certificates, and 1/3 of 1.0% of the
Voting Rights shall be allocated to the Holders of each Class of Residual
Certificates. Voting Rights allocated to a Class of Certificateholders shall be
allocated among such Certificateholders in proportion to the Percentage
Interests evidenced by their respective Certificates.
"Watchlist": For any Determination Date, a report
(substantially in the form of Exhibit G-8) of all Mortgage Loans that constitute
one of the following types of Mortgage Loans as of such Determination Date: (i)
a Mortgage Loan that has a then-current Debt Service Coverage Ratio that is less
than 1.10x; (ii) a Mortgage Loan as to which any required inspection of the
related Mortgaged Property conducted by the Master Servicer indicates a problem
that the Master Servicer determines can reasonably be expected to materially
adversely affect the cash flow generated by such Mortgaged Property; (iii) a
Mortgage Loan as to which the Master Servicer has actual knowledge of material
damage or waste at the related Mortgaged Property; (iv) a Mortgage Loan as to
which it has come to the Master Servicer's attention in the performance of its
duties under this Agreement (without any expansion of such duties by reason
thereof) that any tenant occupying 25% or more of the space in the related
Mortgaged Property (A) has vacated such space (without being replaced by a
comparable tenant and lease) or (B) has declared bankruptcy; (v) a Mortgage Loan
that is at least thirty (30) days delinquent in payment; and (vi) a Mortgage
Loan that is within sixty (60) days of maturity. No later than one Business Day
after each Determination Date, the Special Servicer shall provide the Master
Servicer with all information in its possession regarding the Specially Serviced
Mortgage Loans relevant to the preparation of the Watchlist.
"Weighted Average Adjusted REMIC II Remittance Rate": With
respect to any Distribution Date, the weighted average of the respective
Adjusted REMIC II Remittance Rates applicable to the REMIC II Regular Interests
for such Distribution Date, weighted on the basis of the respective
Uncertificated Principal Balances of such REMIC II Regular Interests outstanding
immediately prior to such Distribution Date.
"Weighted Average REMIC I Remittance Rate": With respect to
any Distribution Date, the weighted average of the respective REMIC I Remittance
Rates applicable to the REMIC I Regular Interests for such Distribution Date,
weighted on the basis of the respective Uncertificated Principal Balances of
such REMIC I Regular Interests outstanding immediately prior to such
Distribution Date.
-56-
<PAGE>
"Weighted Average REMIC II Remittance Rate": With respect to
any Distribution Date, the weighted average of the respective REMIC II
Remittance Rates applicable to the REMIC II Regular Interests for such
Distribution Date, weighted on the basis of the respective Uncertificated
Principal Balances of such REMIC II Regular Interests outstanding immediately
prior to such Distribution Date.
"Workout Fee": With respect to each Corrected Mortgage Loan,
the fee designated as such and payable to the Special Servicer pursuant to the
second paragraph of Section 3.11(c).
"Workout Fee Rate": With respect to each Corrected Mortgage
Loan as to which a Workout Fee is payable, 1.0%.
"Year 2000 Ready": With respect to any Person, all computers,
hardware, imbedded microchips, software and material date-affected technology
used in such Person's business operations are able to correctly and effectively
store, process and otherwise deal with date data from, into, between and
otherwise concerning the 20th and 21st centuries, and otherwise continue to
function properly and unimpaired with respect to all calendar dates falling on
or after January 1, 2000.
SECTION 1.02. Certain Calculations in Respect of the Mortgage
Pool.
(a) All amounts collected in respect of any Group of
Cross-Collateralized Mortgage Loans in the form of payments from Borrowers,
Insurance Proceeds and Liquidation Proceeds, shall be applied by the Master
Servicer among such Mortgage Loans in accordance with the express provisions of
the related loan documents and, in the absence of such express provisions, on a
pro rata basis in accordance with the respective amounts then "due and owing" as
to each of the Mortgage Loans constituting such Group. All amounts collected in
respect of or allocable to any particular individual Mortgage Loan (whether or
not such Mortgage Loan is a Cross-Collateralized Mortgage Loan) in the form of
payments from Borrowers, Liquidation Proceeds or Insurance Proceeds shall be
applied for purposes of this Agreement (including, without limitation, for
purposes of determining distributions on the Certificates pursuant to Article IV
and additional compensation payable to the Master Servicer, the Special Servicer
and any Sub-Servicers) in accordance with the express terms of the related
Mortgage Loan documents or, in the absence of any such express terms or if and
to the extent that such terms authorize the lender to use its discretion, as
follows: first, as a recovery of any related unreimbursed Servicing Advances
and, if applicable, unpaid Liquidation Expenses; second, as a recovery of
accrued and unpaid interest (excluding, in the case of an ARD Loan after its
Anticipated Repayment Date, Additional Interest) at the related Mortgage Rate on
such Mortgage Loan to but not including, as appropriate, the date of receipt or,
in the case of a full Scheduled P&I Payment from any Borrower, the related Due
Date; third, as a recovery of principal of such Mortgage Loan then due and
owing, including, without limitation, by reason of acceleration of the Mortgage
Loan following a default thereunder (or, if a Liquidation Event has occurred in
respect of such Mortgage Loan, as a recovery of principal to the extent of its
entire remaining unpaid principal balance); fourth, as a recovery of amounts to
be currently applied to the payment of, or escrowed for the future payment of,
real estate taxes, assessments, insurance premiums, ground rents (if applicable)
and similar items; fifth, as a recovery of Reserve Funds to the extent then
required to be held in escrow; sixth, as a recovery of any Prepayment Premium
then due and owing under such Mortgage Loan; seventh, as a recovery of any
Default Charges then due and owing under such
-57-
<PAGE>
Mortgage Loan; eighth, as a recovery of any assumption fees and modification
fees then due and owing under such Mortgage Loan; ninth, as a recovery of any
other amounts then due and owing under such Mortgage Loan other than remaining
unpaid principal and, in the case of an ARD Loan after its Anticipated Repayment
Date, accrued and unpaid Additional Interest; tenth, as an early recovery of any
remaining principal of such Mortgage Loan to the extent of its entire remaining
unpaid principal balance; and, eleventh, in the case of an ARD Loan after its
Anticipated Repayment Date, as a recovery of accrued and unpaid Additional
Interest on such ARD Loan, to but not including the date of receipt. The Master
Servicer shall, to the fullest extent permitted by applicable law and the
related Mortgage Loan documents, apply all payments on and proceeds of each
Mortgage Loan to amounts actually due and owing from the related Borrower in a
manner consistent with the foregoing and shall maintain accurate records of how
all such payments and proceeds are actually applied and are applied for purposes
of this Agreement.
(b) Collections in respect of each REO Property (exclusive of
amounts to be applied to the payment of the costs of operating, managing,
maintaining and disposing of such REO Property) shall be applied for purposes of
this Agreement (including, without limitation for purposes of determining
distributions on the Certificates pursuant to Article IV and additional
compensation payable to the Master Servicer, the Special Servicer and any
Sub-Servicers) as follows: first, as a recovery of any related unreimbursed
Servicing Advances and, if applicable, unpaid Liquidation Expenses; second, as a
recovery of accrued and unpaid interest (excluding, in the case of an REO Loan
that relates to an ARD Loan after its Anticipated Repayment Date, Additional
Interest) on the related REO Loan at the related Mortgage Rate to but not
including the Due Date in the Collection Period of receipt; third, as a recovery
of principal of the related REO Loan to the extent of its entire unpaid
principal balance; fourth, as a recovery of any Prepayment Premium then due and
owing under such REO Loan; fifth, as a recovery of any other amounts (including,
without limitation, Default Charges, but excluding, in the case of an ARD Loan
after its Anticipated Repayment Date, accrued and unpaid Additional Interest)
deemed to be due and owing in respect of the related REO Loan; and, sixth, in
the case of an REO Loan that relates to an ARD Loan after its Anticipated
Repayment Date, as a recovery of accrued and unpaid Additional Interest on such
REO Loan to but not including the date of receipt.
(c) For the purposes of calculating distributions on, as well
as allocations of Realized Losses and Additional Trust Fund Expenses to, the
Certificates pursuant to this Agreement, Additional Interest on an ARD Loan or a
successor REO Loan shall be deemed not to constitute principal or any portion
thereof and shall not be added to the unpaid principal balance or Stated
Principal Balance of such ARD Loan or successor REO Loan. To the extent any
Additional Interest is not paid on a current basis, it shall be deemed to be
deferred interest.
(d) Insofar as amounts received in respect of any Mortgage
Loan or REO Property and allocable to fees and charges owing in respect of such
Mortgage Loan or the related REO Loan, as the case may be, that constitute
additional servicing compensation payable to the Master Servicer and/or Special
Servicer pursuant to Section 3.11, are insufficient to cover the full amount of
such fees and charges, such amounts shall be allocated between such of those
fees and charges as are payable to the Master Servicer, on the one hand, and
such of those fees and charges as are payable to the Special Servicer, on the
other, pro rata in accordance with their respective entitlements.
-58-
<PAGE>
(e) The foregoing applications of amounts received in respect
of any Mortgage Loan or REO Property shall be determined by the Master Servicer
and reflected in the reports to be delivered thereby pursuant to Section
4.02(b).
-59-
<PAGE>
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans.
(a) It is the intention of the parties hereto that a common
law trust be established pursuant to this Agreement. The Chase Manhattan Bank is
hereby appointed, and does hereby agree to act, as Trustee hereunder and, in
such capacity, to hold the Trust Fund in trust for the exclusive use and benefit
of all present and future Certificateholders. It is not intended that this
Agreement create a partnership or a joint-stock association.
(b) Each of the Depositor and, at the direction of the
Depositor given pursuant to the Mortgage Loan Purchase Agreements, the Mortgage
Loan Sellers, concurrently with their execution and delivery hereof, does hereby
assign, transfer, sell and otherwise convey to the Trustee without recourse for
the benefit of the Certificateholders all the right, title and interest of the
Depositor and the Mortgage Loan Sellers, respectively, in, to and under the
Mortgage Loans identified on the Mortgage Loan Schedule and all other assets
included or to be included in REMIC I. Such assignment includes (i) the Mortgage
Loans as from time to time are subject to this Agreement and all payments under
and proceeds of such Mortgage Loans received or receivable after the Cut-off
Date (other than payments of principal, interest and other amounts due and
payable on the Mortgage Loans on or before the Cut-off Date), together with all
documents delivered or caused to be delivered hereunder with respect to such
Mortgage Loans by the Mortgage Loan Sellers; (ii) any REO Property acquired in
respect of a Mortgage Loan; (iii) such funds or assets as from time to time are
deposited in the Distribution Account, the Collection Account, the Interest
Reserve Account and the REO Account (if established); and (iv) the Loan REMIC
Interests and the Loan REMIC Declarations. This conveyance is subject to, in the
case of each of the Park View Plaza Mortgage Loan, the 625 Polk Street Mortgage
Loan, the Fourth Avenue Marketplace Mortgage Loan, the GTE Plaza Shopping Center
Mortgage Loan, the Holmead Apartments Mortgage Loan, the Parker Paints (Andresen
Plaza) Mortgage Loan and the 500 Third Street Mortgage Loan, the related Loan
REMIC Declaration.
It is intended that the conveyance of the Mortgage Loans (and,
in the case of the Park View Plaza Mortgage Loan, the 625 Polk Street Mortgage
Loan, the Fourth Avenue Marketplace Mortgage Loan, the GTE Plaza Shopping Center
Mortgage Loan, the Holmead Apartments Mortgage Loan, the Parker Paints (Andresen
Plaza) Mortgage Loan and the 500 Third Street Mortgage Loan, the related Loan
REMIC Regular Interests) and the related rights and property by the Depositor
and the Mortgage Loan Sellers to the Trustee, as provided in this section be,
and be construed as, an absolute transfer of the Mortgage Loans by the Depositor
and the Mortgage Loan Sellers to the Trustee for the benefit of the
Certificateholders. It is, further, not intended that such conveyance be deemed
a pledge of the Mortgage Loans by the Depositor or the Mortgage Loan Sellers to
the Trustee to secure a debt or other obligation of the Depositor or the
Mortgage Loan Sellers, as the case may be. However, in the event that the
Mortgage Loans (or any sub-group thereof) are held to be property of the
Depositor or either of the Mortgage Loan Sellers, or if for any
-60-
<PAGE>
reason this Agreement is held or deemed to create a security interest in the
Mortgage Loans, then it is intended that, (i) this Agreement shall also be
deemed to be a security agreement within the meaning of Articles 8 and 9 of the
New York Uniform Commercial Code and the Uniform Commercial Code of any other
applicable jurisdiction; (ii) the conveyance provided for in this section shall
be deemed to be a grant by the Depositor and the Mortgage Loan Sellers to the
Trustee, for the benefit of the Certificateholders, of a security interest in
all of their respective right (including the power to convey title thereto),
title and interest, whether now owned or hereafter acquired, in and to (A) the
Mortgage Notes, the Mortgages, any related insurance policies and all other
documents in the related Mortgage Files, (B) all amounts payable to the holders
of the Mortgage Loans in accordance with the terms thereof and (C) all proceeds
of the conversion, voluntary or involuntary, of the foregoing into cash,
instruments, securities or other property, including without limitation all
amounts from time to time held or invested in the Collection Account, the
Distribution Account, the Interest Reserve Account or the REO Account, whether
in the form of cash, instruments, securities or other property; (iii) the
possession by the Trustee or its agent of the Mortgage Notes and such other
items of property as constitute instruments, money, negotiable documents or
chattel paper shall be deemed to be "possession by the secured party" or
possession by a purchaser or a Person designated by such secured party, for
purposes of perfecting the security interest pursuant to the New York Uniform
Commercial Code and the Uniform Commercial Code of any other applicable
jurisdiction (including, without limitation, Section 9-305, 8-313 or 8-321
thereof); and (d) notifications to, and acknowledgments, receipts or
confirmations from, Persons holding such property shall be deemed to be
notifications to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Trustee for the purpose
of perfecting such security interest under applicable law. The Depositor, the
Mortgage Loan Sellers and the Trustee shall, to the extent consistent with this
Agreement, take such actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the Mortgage Loans, such
security interest would be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term
of this Agreement. At the Depositor's direction, the Trustee shall execute,
deliver and (at its expense) file, all filings necessary to maintain the
effectiveness of any original filings necessary under the Uniform Commercial
Code as in effect in any jurisdiction to perfect and maintain the Trustee's
security interest in or lien on the Trust Fund, including without limitation (A)
continuation statements and (B) such other statements as may be occasioned by
any transfer of any interest of the Trustee, the Master Servicer, the Special
Servicer or the Depositor in the Trust Fund. In connection herewith, the Trustee
shall have all of the rights and remedies of a secured party and creditor under
the Uniform Commercial Code as in force in the relevant jurisdiction.
(c) In connection with each Mortgage Loan Seller's assignment
pursuant to subsection (b) above, (i) Llama shall deliver to and deposit with,
or cause to be delivered to and deposited with, the Trustee or a Custodian
appointed thereby on or before the Closing Date, with a copy to the Master
Servicer within a reasonable period (but in no event more than thirty (30) days)
following the Closing Date, the Mortgage File for each Llama Mortgage Loan;
provided that a copy of the Mortgage Note, the Mortgage and any environmental
insurance policy for each Llama Mortgage Loan shall be delivered to the Master
Servicer on or before the Closing Date and, until the date that the complete
copy of the Mortgage File for any Llama Mortgage Loan has been delivered to the
Master Servicer, Llama will provide the Master Servicer with copies of such
other documents to be included in that Mortgage File that the Master Servicer
may reasonably request, and (ii) SBRC
-61-
<PAGE>
shall deliver to and deposit with, or cause to be delivered to and deposited
with, the Trustee or a Custodian appointed thereby, on or before the Closing
Date, with a copy to the Master Servicer within a reasonable period (but in no
event more than thirty (30) days) following the Closing Date, the Mortgage File
for each SBRC Mortgage Loan; provided that a copy of the Mortgage Note, the
Mortgage and any environmental insurance policy for each SBRC Mortgage Loan
shall be delivered to the Master Servicer on or before the Closing Date and,
until the date that the complete copy of the Mortgage File for any SBRC Mortgage
Loan has been delivered to the Master Servicer, SBRC will provide the Master
Servicer with copies of such other documents to be included in that Mortgage
File that the Master Servicer may reasonably request. If either Mortgage Loan
Seller is unable to deliver or cause the delivery of any original Mortgage Note
required to be delivered hereby, such party may deliver a copy of such Mortgage
Note, together with a lost note affidavit, and shall thereby be deemed to have
satisfied the document delivery requirements of this Section 2.01(c). If either
Mortgage Loan Seller cannot so deliver, or cause to be delivered, as to any of
its Mortgage Loans, the original or a copy of any of the documents and/or
instruments referred to in clauses (ii), (iv), (viii), (xi)(A) and (xii) of the
definition of "Mortgage File" required to be delivered hereby, with evidence of
recording or filing (as the case may be) thereon, solely because of a delay
caused by the public recording or filing office where such document or
instrument has been delivered for recordation or filing, as the case may be, the
delivery requirements of this Section 2.01(c) shall be deemed to have been
satisfied as to such missing item, and such missing item shall be deemed to have
been included in the related Mortgage File, provided that a copy of such
document or instrument (without evidence of recording or filing thereon, but
certified (which certificate may relate to multiple documents and/or
instruments) by the related Mortgage Loan Seller to be a true and complete copy
of the original thereof submitted for recording or filing, as the case may be)
is delivered to the Trustee or a Custodian appointed thereby on or before the
Closing Date, and either the original of such missing document or instrument, or
a copy thereof, with evidence of recording or filing, as the case may be,
thereon, is delivered to the Trustee or such Custodian within 180 days of the
Closing Date (or within such longer period after the Closing Date as the Trustee
may consent to, which consent shall not be unreasonably withheld so long as the
related Mortgage Loan Seller has provided the Trustee with evidence of such
submission for recording or filing, as the case may be, or has certified in
writing to the Trustee as to the occurrence of such submission for recording or
filing, as the case may be, and is, as certified in writing to the Trustee no
less often than monthly, in good faith attempting to obtain from the appropriate
recording or filing office such original or copy). If either Mortgage Loan
Seller cannot or does not so deliver, or cause to be delivered, as to any of its
Mortgage Loans, the original of any of the documents and/or instruments referred
to in clauses (iii), (v), and (xi)(B) of the definition of "Mortgage File"
required to be delivered hereby, because such document or instrument has been
delivered for recording or filing, as the case may be, the delivery requirements
of this Section 2.01(c) shall be deemed to have been satisfied as to such
missing item, and such missing item shall be deemed to have been included in the
related Mortgage File, provided that a copy of such document or instrument
(without evidence of recording or filing thereon, but certified (which
certificate may relate to multiple documents and/or instruments) by the related
Mortgage Loan Seller to be a true and complete copy of the original thereof
submitted for recording or filing, as the case may be) is delivered to the
Trustee or a Custodian appointed thereby on or before the Closing Date, and
either the original of such missing document or instrument, or a copy thereof,
with evidence of recording or filing, as the case may be, thereon, is delivered
to the Trustee or such Custodian within 180 days of the Closing Date (or within
such longer period after the Closing Date as the Trustee may consent to, which
consent shall not be unreasonably withheld so long as the related Mortgage Loan
Seller has
-62-
<PAGE>
provided the Trustee with evidence of such submission for recording or filing,
as the case may be, or has certified in writing to the Trustee as to the
occurrence of such submission for recording or filing, as the case may be, and
is, as certified in writing to the Trustee no less often than monthly, in good
faith attempting to obtain from the appropriate recording or filing office such
original or copy). If either Mortgage Loan Seller cannot so deliver, or cause to
be delivered, as to any of its Mortgage Loans, the original or a copy of the
related lender's title insurance policy referred to in clause (ix) of the
definition of "Mortgage File" required to be delivered hereby, solely because
such policy has not yet been issued, the delivery requirements of this Section
2.01(c) shall be deemed to be satisfied as to such missing item, and such
missing item shall be deemed to have been included in the related Mortgage File,
provided that the related Mortgage Loan Seller shall have delivered to the
Trustee or a Custodian appointed thereby, on or before the Closing Date, a
commitment for title insurance "marked-up" at the closing of such Mortgage Loan,
the related Mortgage Loan Seller shall make reasonable efforts to have the
related lender's title insurance policy issued as promptly as reasonably
practicable, and the related Mortgage Loan Seller shall deliver to the Trustee
or such Custodian, promptly following the receipt thereof, the original related
lender's title insurance policy (or a copy thereof). In addition,
notwithstanding anything to the contrary contained herein, if there exists with
respect to any Group of related Cross-Collateralized Mortgage Loans only one
original of any document referred to in the definition of "Mortgage File"
covering all the Mortgage Loans in such Group, then the inclusion of the
original of such document in the Mortgage File for any of the Mortgage Loans in
such Group shall be deemed an inclusion of such original in the Mortgage File
for each such Mortgage Loan. None of the Trustee, any Custodian, the Depositor,
the Master Servicer or the Special Servicer shall in any way be liable for any
failure by either Mortgage Loan Seller to comply with the delivery requirements
of this Section 2.01(c).
If any of the endorsements referred to in clause (i) of the
definition of "Mortgage File", any of the assignments of Mortgage referred to in
clause (iii) of the definition of "Mortgage File", any of the assignments of
Assignment of Leases referred to in clause (v) of the definition of "Mortgage
File", or any of the assignments of Security Agreement referred to in clause
(vii) of the definition of "Mortgage File" are delivered to the Trustee in
blank, the Trustee shall complete (or cause any Custodian to complete) the
related endorsement or assignment in the name of the Trustee (in such capacity),
and the Trustee shall be entitled to charge the related Mortgage Loan Seller for
any reasonable expense incurred by it in so doing.
Also in connection with the Depositor's assignment pursuant to
Section 2.01(b) above, the Depositor shall deliver to and deposit with, or cause
to be delivered to and deposited with, the Trustee or a Custodian appointed
thereby, on or before the Closing Date, the originals or copies of the Loan
REMIC Declarations. In addition, the Depositor shall deliver or cause to be
delivered to the Trustee, the Master Servicer and the Special Servicer, in
electronic format, the CSSA Standard Reporting Set-Up Layout with respect to the
Mortgage Pool.
(d) To the extent not previously delivered for recording by
the related Mortgage Loan Seller, the Trustee shall, at the expense of the
related Mortgage Loan Seller, as to each Mortgage Loan, promptly (and in any
event within 45 days of the Closing Date or the date received by it, whichever
is later) submit or cause to be submitted for recording or filing, as the case
may be, in the appropriate public office for real property records or UCC
Financing Statements, as appropriate, each assignment referred to in clauses
(iii) and (v) of the definition of "Mortgage File",
-63-
<PAGE>
and each UCC-2 and UCC-3, if any, referred to in clause (xi)(B) of the
definition of "Mortgage File", that is delivered to it. Each such assignment
shall reflect that it should be returned by the public recording office to the
Trustee or its designee following recording, and each such UCC-2 and UCC-3 shall
reflect that the file copy thereof should be returned to the Trustee or its
designee following filing. At such time as such assignments, UCC-2s and UCC-3s
have been returned to the Trustee, the Trustee shall promptly forward a copy of
each thereof to the Master Servicer and the Special Servicer. If any such
document or instrument is lost or returned unrecorded or unfiled, as the case
may be, because of a defect therein, Llama, in the case of a Llama Mortgage
Loan, and SBRC, in the case of a SBRC Mortgage Loan, shall promptly prepare or
cause the preparation of a substitute therefor or cure or cause the curing of
such defect, as the case may be, and shall promptly thereafter deliver the
substitute or corrected document to the Trustee. The Trustee shall thereupon
submit the substitute or corrected document, or cause such to be submitted, for
recording or filing, as appropriate, at the expense of the related Mortgage Loan
Seller.
(e) All documents and records in the possession of or under
the control of either Mortgage Loan Seller and relating to its Mortgage Loans
that are not required to be a part of a Mortgage File in accordance with the
definition thereof, together with all Escrow Payments and Reserve Funds in the
possession or under the control of either Mortgage Loan Seller with respect to
its Mortgage Loans, shall be delivered or caused to be delivered by such
Mortgage Loan Seller to the Master Servicer (with copies of such documents to
the Special Servicer) on or before the Closing Date. All such documents and
funds shall be retained by the Master Servicer on behalf of the Trustee in trust
for the benefit of the Certificateholders.
(f) Llama shall, as to each Llama Mortgage Loan that is
secured (in whole or in part) by the interest of the related Borrower under a
Ground Lease, and SBRC shall, as to each SBRC Mortgage Loan that is secured (in
whole or in part) by the interest of the related Borrower under a Ground Lease,
in each case at its own expense, promptly (and in any event within forty-five
(45) days of the Closing Date) notify the related ground lessor of the transfer
of such Mortgage Loan to the Trust pursuant to this Agreement and inform such
ground lessor that any notices of default under the related Ground Lease should
thereafter be forwarded to the Master Servicer on behalf of the Trustee.
SECTION 2.02. Acceptance of REMIC I by Trustee.
(a) The Trustee, by the execution and delivery of this
Agreement, acknowledges receipt by it or a Custodian on its behalf, subject to
(i) any exceptions noted on the Schedule of Exceptions to Mortgage File Delivery
attached hereto as Schedule III, (ii) the provisions of Section 2.01 and (iii)
the further review provided for in this Section 2.02, of, with respect to each
Mortgage Loan, an original Mortgage Note endorsed to the Trustee (in such
capacity), an original or a copy of the Mortgage (with evidence of recording
thereon), and an original assignment of such Mortgage executed in favor of the
Trustee (in such capacity) and of all other assets included in REMIC I which
have been delivered to the Trustee, in good faith and without notice of any
adverse claim, and declares that it or a Custodian on its behalf holds and will
hold the documents delivered or caused to be delivered by Mortgage Loan Sellers
in respect of the Mortgage Loans, and that it holds and will hold such other
assets included in REMIC I, in trust for the exclusive use and benefit of all
present and future Certificateholders.
-64-
<PAGE>
(b) Within forty-five (45) days of the Closing Date (or, in
the case of any Mortgage Loan as to which a Servicing Transfer Event has
occurred during such 45-day period of which event the Trustee has notice, within
the shorter of forty-five (45) days of the Closing Date and five (5) Business
Days of the Trustee's receiving such notice), the Trustee or a Custodian on its
behalf shall review each of the documents delivered or caused to be delivered by
the Mortgage Loan Sellers with respect to each Mortgage Loan pursuant to Section
2.01(c); and, promptly following such review, the Trustee shall, subject to
Section 2.02(d), certify in writing to each of the Depositor, the Master
Servicer, the Special Servicer and the Mortgage Loan Sellers that as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full), and except as specifically identified in any exception report
annexed to such certification, (i) all documents specified in clauses (i)
through (iii), (ix) and, if the Mortgage Loan Schedule specifies that the
related Borrower has a leasehold interest in the related Mortgaged Property,
(xiii) of the definition of "Mortgage File" are in its possession or the
possession of a Custodian on its behalf, or the related Mortgage Loan Seller has
otherwise satisfied the delivery requirements in respect of such documents in
accordance with Section 2.01(c), (ii) all documents received by it or any
Custodian in respect of such Mortgage Loan have been reviewed by it or by a
Custodian on its behalf and appear regular on their face and relate to such
Mortgage Loan, and (iii) based on such examination and only as to the foregoing
documents, the information set forth in the Mortgage Loan Schedule with respect
to the items specified in clauses (iv) and (vi)(B) of the definition of
"Mortgage Loan Schedule" is correct.
(c) The Trustee or a Custodian on its behalf shall review each
of the documents relating to the Mortgage Loans received thereby subsequent to
the Closing Date; and on or about every 90 days until the earlier of (i) the
second anniversary of the Closing Date and (ii) the date on which all exceptions
are addressed, the Trustee shall, subject to Section 2.02(d), certify in writing
to each of the Depositor, the Master Servicer, the Special Servicer and the
Mortgage Loan Sellers that as to each Mortgage Loan listed on the Mortgage Loan
Schedule (other than any Mortgage Loan paid in full or otherwise liquidated),
and except as specifically identified in any exception report annexed to such
certification, (i) all documents specified in clauses (i), (ii), (ix) and, if
the Mortgage Loan Schedule specifies that the related Borrower has a leasehold
interest in the related Mortgaged Property, (xiii) of the definition of
"Mortgage File" are in its possession or the possession of a Custodian on its
behalf, or the related Mortgage Loan Seller has otherwise satisfied the delivery
requirements in respect of such documents in accordance with Section 2.01(c),
(ii) it or a Custodian on its behalf has received either the original or copy of
each of the assignments specified in clauses (iii) and (v) of the definition of
"Mortgage File" that were delivered by the related Mortgage Loan Seller, with
evidence of recording thereon, (iii) all documents received by it or any
Custodian in respect of such Mortgage Loan have been reviewed by it or by such
Custodian on its behalf and appear regular on their face and relate to such
Mortgage Loan, and (iv) based on the examinations referred to in subsection (b)
above and this subsection (c) and only as to the foregoing documents, the
information set forth in the Mortgage Loan Schedule with respect to the items
specified in clauses (iv) and (vi)(B) of the definition of "Mortgage Loan
Schedule", is correct.
(d) It is herein acknowledged that, notwithstanding any other
provision hereof, neither the Trustee nor any Custodian is under any duty or
obligation (i) to determine whether any of the documents specified in clauses
(iv) through (viii), (x) through (xii) and (xiv) through (xvi) of the definition
of "Mortgage File" exist (except to the extent that the Trustee certifies as to
its possession of any such document) or are required to be delivered by the
related Mortgage Loan Seller
-65-
<PAGE>
in respect of any Mortgage Loan or (ii) to inspect, review or examine any of the
documents, instruments, certificates or other papers relating to the Mortgage
Loans delivered to it to determine that the same are genuine, enforceable, in
recordable form or appropriate for the represented purpose, or that they are
other than what they purport to be on their face.
In performing the reviews contemplated by subsections (a), (b)
and (c) above, the Trustee may conclusively rely on the related Mortgage Loan
Seller as to the purported genuineness of any such document and any signature
thereon. It is understood that the scope of the Trustee's review of the Mortgage
Files is limited to the matters specifically set forth in subsections (a), (b)
and (c) above.
(e) If, in the process of reviewing the documents delivered or
caused to be delivered by the Mortgage Loan Sellers pursuant to Section 2.01(c),
the Trustee or any Custodian discovers that any document required to have been
delivered pursuant to Section 2.01(c) has not been so delivered (including,
without limitation, any missing documents properly identified on the exception
reports referred to in subsections (a), (b) and (c) above), or discovers that
any of the documents that were delivered has not been properly executed,
contains information that does not conform in any material respect with the
corresponding information set forth in the Mortgage Loan Schedule, or is
defective on its face (each, including, without limitation, that a document is
missing, a "Document Defect"), or if, at any other time, the Trustee or any
other party hereto discovers a Document Defect in respect of any Mortgage Loan,
the party discovering such Document Defect shall promptly so notify each of the
other parties hereto. If and when such party is notified of or discovers any
error in the Mortgage Loan Schedule, Llama, if a Llama Mortgage Loan is
affected, or SBRC, if a SBRC Mortgage Loan is affected, shall promptly correct
such error and distribute a new, corrected Mortgage Loan Schedule to each of the
other parties hereto; provided that the exception reports contemplated by
subsections (a), (b) and (c) above shall, upon delivery, constitute notice to
the recipient with respect to any missing documents properly identified thereon.
Such new, corrected Mortgage Loan Schedule shall be deemed to amend and replace
the existing Mortgage Loan Schedule.
SECTION 2.03. Mortgage Loan Sellers' Repurchase of
Mortgage Loans for Document Defects and
Certain Breaches of Representations and
Warranties.
(a) Within ninety (90) days of the earlier of discovery or
receipt of notice by the Responsible Party, of a Document Defect in respect of
any Mortgage Loan or a breach of any representation or warranty set forth in
Section 2.05(c) in respect of any Mortgage Loan, which Document Defect or
breach, as the case may be, materially and adversely affects the value of such
Mortgage Loan or the interests of the Certificateholders therein, the
Responsible Party shall cure such Document Defect or breach, as the case may be,
in all material respects or repurchase the affected Mortgage Loan at the
applicable Purchase Price by deposit of such Purchase Price into the Collection
Account and delivery to the Trustee of a written certification that such deposit
has been made; provided that, if the Responsible Party certifies to the Trustee
that (i) such Document Defect or breach is not reasonably susceptible of
correction or cure within such 90-day period and is susceptible of correction or
cure within an additional 90-day period, (ii) such Document Defect or breach
does not cause the related Mortgage Loan or Loan REMIC Regular Interest to fail
to be a "qualified
-66-
<PAGE>
mortgage" within the meaning of Section 860G of the Code, and (iii) the
Responsible Party is diligently prosecuting the correction of such Document
Defect or breach, then such Responsible Party shall have an additional period of
ninety (90) days within which to correct or cure such Document Defect or breach,
or, if ultimately unable to do so, to effect such repurchase. Notwithstanding
the immediately preceding sentence, within ninety (90) days of the earlier of
discovery or receipt of notice by any party hereto that there is a breach of the
representation and warranty set forth in Section 2.05(c)(xxxi) (i.e., that any
Mortgage Loan did not, as of the Closing Date, constitute a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code), the Responsible Party
shall repurchase such Mortgage Loan at the applicable Purchase Price by deposit
of such Purchase Price into the Collection Account and delivery to the Trustee
of a written certification that such deposit has been made.
If either Mortgage Loan Seller discovers or is notified that
there exists a breach of any representation or warranty made by it pursuant to
Section 2.05(c) with respect to any of its Mortgage Loans, but such breach does
not materially and adversely affect the value of such Mortgage Loan or the
interests of the Certificateholders therein, such Mortgage Loan Seller will use
reasonable efforts to promptly cure such breach (but will not be obligated to
repurchase such Mortgage Loan).
(b) In connection with any repurchase of a Mortgage Loan
pursuant to this Section 2.03, the Trustee, the Master Servicer and the Special
Servicer shall each tender or cause to be tendered to the Responsible Party,
upon delivery to each of the Trustee, the Master Servicer and the Special
Servicer of a receipt executed by the Responsible Party, all portions of the
Mortgage File and other documents and all Escrow Payments and Reserve Funds
pertaining to such Mortgage Loan possessed by it (or any Custodian or
Sub-Servicer on its behalf), and each document that constitutes a part of the
Mortgage File that was endorsed or assigned to the Trustee shall be endorsed or
assigned, as the case may be, to or at the direction of the Responsible Party,
in the same manner. The form, sufficiency and expense of all such instruments
and certificates shall be the responsibility of the Responsible Party.
(c) This Section 2.03 provides the sole remedies available to
the Certificateholders, or to the Trustee on behalf of the Certificateholders,
respecting any Document Defect or any breach of any representation or warranty
set forth in Section 2.05(c) hereof. If the Responsible Party defaults on its
obligations to repurchase any Mortgage Loan in accordance with Section 2.03(a)
hereof, or disputes its obligation to repurchase any Mortgage Loan in accordance
with any such provision, the Trustee shall promptly notify the
Certificateholders and, subject to Sections 8.01 and 8.02 and its right to
reimbursement pursuant to Section 8.05(b), shall take such action as may be
appropriate to enforce such payment or performance, including, without
limitation, the institution and prosecution of appropriate proceedings. If it is
judicially determined or subsequently agreed that the Responsible Party is
required to repurchase such Mortgage Loan under Section 2.03(a) hereof, the
Responsible Party shall reimburse the Trustee, the Master Servicer and the
Special Servicer for all reasonable costs and expenses incurred by such parties
in connection with such enforcement, and otherwise the Trustee's right of
reimbursement shall be limited to amounts on deposit in the Distribution Account
from time to time in accordance with Section 8.05(b) and to such other sources
of security and indemnity as shall have been offered to the Trustee by the
Certificateholders.
-67-
<PAGE>
(d) In connection with any repurchase of the Park View Plaza
Mortgage Loan, the 625 Polk Street Mortgage Loan, the Fourth Avenue Marketplace
Mortgage Loan, the GTE Plaza Shopping Center Mortgage Loan, the Holmead
Apartments Mortgage Loan, the Parker Paints (Andresen Plaza) Mortgage Loan or
the 500 Third Street Mortgage Loan pursuant to or as contemplated by this
Section 2.03, the Trustee shall effect a "qualified liquidation" of the related
Loan REMIC in accordance with the REMIC Provisions.
SECTION 2.04. Representations and Warranties of the Depositor.
(a) The Depositor hereby represents and warrants to each of
the other parties to this Agreement and for the benefit of the
Certificateholders, as of the Closing Date, that:
(i) The Depositor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
(ii) The execution and delivery of this Agreement by the
Depositor, and the performance and compliance with the terms of this
Agreement by the Depositor, will not violate the Depositor's
certificate of incorporation or bylaws or constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a
default) under, or result in the breach of, any material agreement or
other instrument to which it is a party or which is applicable to it or
any of its assets.
(iii) The Depositor 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 Depositor, enforceable against the
Depositor in accordance with the terms hereof, subject to (A)
applicable bankruptcy, insolvency, reorganization, moratorium and other
laws affecting the enforcement of creditors' rights generally, and (B)
general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law.
(v) The Depositor 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 Depositor's good faith
and reasonable judgment, is likely to affect materially and adversely
either the ability of the Depositor to perform its obligations under
this Agreement or the financial condition of the Depositor.
(vi) The transfer of the Mortgage Loans to the Trustee as
contemplated herein requires no regulatory approval, other than any
such approvals as have been obtained, and is not subject to any bulk
transfer or similar law in effect in any applicable jurisdiction.
-68-
<PAGE>
(vii) No litigation is pending or, to the best of the
Depositor's knowledge, threatened against the Depositor which would
prohibit the Depositor from entering into this Agreement or, in the
Depositor's good faith and reasonable judgment, is likely to materially
and adversely affect either the ability of the Depositor to perform its
obligations under this Agreement or the financial condition of the
Depositor.
(viii) No consent, approval, authorization or order of any
state or federal court or governmental agency or body is required for
the consummation by the Depositor of the transactions contemplated
herein, except for those consents, approvals, authorizations or orders
that previously have been obtained.
(b) Upon discovery by any of the parties hereto of a breach of
any of the foregoing representations and warranties which materially and
adversely affects the interests of the Certificateholders or any party hereto,
the party discovering such breach shall give prompt written notice to each of
the other parties hereto.
SECTION 2.05. Representations and Warranties of the Mortgage
Loan Sellers.
(a) Llama hereby represents and warrants to the other parties
hereto and for the benefit of the Certificateholders, as of the Closing Date,
that:
(i) Llama is a limited partnership duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts.
(ii) The execution and delivery of this Agreement by Llama,
and the performance and compliance with the terms of this Agreement by
Llama, will not violate Llama's organizational documents or constitute
a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, or result in the breach of, any
material agreement or other instrument to which it is a party or which
is applicable to it or any of its assets.
(iii) Llama 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 Llama, enforceable against Llama in
accordance with the terms hereof, subject to (A) applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the
enforcement of creditors' rights generally, and (B) general principles
of equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law.
(v) Llama 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,
-69-
<PAGE>
in Llama's good faith and reasonable judgment, is likely to affect
materially and adversely either the ability of Llama to perform its
obligations under this Agreement or the financial condition of Llama.
(vi) No litigation is pending or, to the best of Llama's
knowledge, threatened against Llama which would prohibit Llama from
entering into this Agreement or, in Llama's good faith and reasonable
judgment, is likely to materially and adversely affect either the
ability of Llama to perform its obligations under this Agreement or the
financial condition of Llama.
(vii) No consent, approval, authorization or order of any
state or federal court or governmental agency or body is required for
the consummation by Llama of the transactions contemplated herein,
except for those consents, approvals, authorizations or orders that
previously have been obtained.
(b) SBRC hereby represents and warrants to the other parties
hereto and for the benefit of the Certificateholders, as of the Closing Date,
that:
(i) SBRC is a corporation organized, validly existing and in
good standing under the laws of the State of New York.
(ii) The execution and delivery of this Agreement by SBRC, and
the performance and compliance with the terms of this Agreement by
SBRC, will not violate SBRC's organizational documents or constitute a
default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, or result in the breach of, any
material agreement or other instrument to which it is a party or which
is applicable to it or any of its assets.
(iii) SBRC has the full power and authority to enter into and
consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement,
and has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by each of the other parties hereto, constitutes a valid,
legal and binding obligation of SBRC, enforceable against SBRC in
accordance with the terms hereof, subject to (A) applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the
enforcement of creditors' rights generally, and (B) general principles
of equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law.
(v) SBRC is not in violation of, and its execution and
delivery of this Agreement and its performance and compliance with the
terms of this Agreement will not constitute a violation of, any law,
any order or decree of any court or arbiter, or any order, regulation
or demand of any federal, state or local governmental or regulatory
authority, which violation, in SBRC's good faith and reasonable
judgment, is likely to affect materially and adversely either the
ability of SBRC to perform its obligations under this Agreement or the
financial condition of SBRC.
-70-
<PAGE>
(vi) No litigation is pending or, to the best of SBRC's
knowledge, threatened against SBRC which would prohibit SBRC from
entering into this Agreement or, in SBRC's good faith and reasonable
judgment, is likely to materially and adversely affect either the
ability of SBRC to perform its obligations under this Agreement or the
financial condition of SBRC.
(vii) No consent, approval, authorization or order of any
state or federal court or governmental agency or body is required for
the consummation by SBRC of the transactions contemplated herein,
except for those consents, approvals, authorizations or orders that
previously have been obtained.
(c) Llama hereby represents and warrants (and, accordingly, is
the "Representing Party" in respect of each such representation and warranty so
made) solely with respect to each Llama Mortgage Loan, and SBRC hereby
represents and warrants (and, accordingly, is the "Representing Party" in
respect of each such representation and warranty so made) solely with respect to
each SBRC Mortgage Loan, in each case to the other parties hereto and for the
benefit of the Certificateholders, as of the date hereinbelow specified or, if
no such date is specified, as of the Closing Date, that:
(i) Immediately prior to the transfer thereof by the
Representing Party to the Trustee, the Representing Party had good
title to, and was the sole owner and holder of, such Mortgage Loan,
free and clear of any and all liens, charges, encumbrances or any other
ownership or participation interests on, in or to such Mortgage Loan
(other than, in certain cases, either (A) the right of the Master
Servicer or a Sub-Servicer to master service or primary service such
Mortgage Loan or (B) the lien of a warehouse lender on such Mortgage
Loan which lien will be released contemporaneously with the transfer).
Upon completion of the conveyance contemplated hereby, the Representing
Party will have validly and effectively conveyed to the Trustee all
legal and beneficial interest in and to such Mortgage Loan free and
clear of any pledge, lien or security interest created by or through
the Representing Party.
(ii) The Representing Party had full right and authority
to sell, assign and transfer such Mortgage Loan to the Trustee; and
each Mortgage Loan is properly endorsed to the Trustee and such
endorsement is genuine.
(iii) The information pertaining to such Mortgage Loan
set forth in the Mortgage Loan Schedule was true and correct, and met
the requirements of this Agreement, in all material respects as of the
Cut-off Date.
(iv) Such Mortgage Loan was not, as of the Cut-off Date
or at any time during the twelve-month period prior thereto, more than
thirty (30) days delinquent in respect of any Scheduled P&I Payment
required thereunder, without giving effect to any applicable grace
period.
-71-
<PAGE>
(v) Each Mortgage securing such Mortgage Loan
constitutes a legal, valid and, subject to the exceptions in paragraph
(c)(xii) below, enforceable first lien upon the Borrower's interest in
the related Mortgaged Property, including, without limitation, all
buildings located thereon and all fixtures attached thereto, subject
only to (and such Mortgaged Property is free and clear of all
encumbrances and liens having priority over the lien of such Mortgage,
except for) (A) the lien of current real property taxes and assessments
not yet due and payable, (B) covenants, conditions and restrictions,
rights of way, easements and other matters of public record, and other
matters to which like properties are commonly subject, which do not
materially and adversely affect the current use of the Mortgaged
Property, the security interest of the lender or the value of the
Mortgaged Property, (C) the rights of tenants (whether under ground
leases or space leases) at the Mortgaged Property to remain following a
foreclosure or similar proceeding (provided that such tenants are
performing under such leases), (D) in the case of the Mortgage Loans
identified on the Mortgage Loan Schedule by loan numbers LC 2729, LC
3013, 321 and 6601618, tenants' rights of first refusal to purchase all
or a material portion of the related Mortgaged Property, (E) in the
case of the Mortgage Loan identified on the Mortgage Loan Schedule as
loan number 261, the obligation of the mortgagee to subordinate its
lien on a portion of related Mortgaged Property to the lien of a
construction loan to cover the costs of expansion by an anchor tenant,
so long as the related Borrower and/or key principals post a letter of
credit in an amount equal to 125% of the principal balance of the
construction loan, (F) in the case of the Mortgage Loan identified on
the Mortgage Loan Schedule as loan number LC 2806, a third party's
option rights to purchase a portion of the related Mortgaged Property,
which portion does not materially and adversely affect the use,
operation or value of the related Mortgaged Property, (G) exceptions
and exclusions specifically referred to in the lender's title insurance
policy issued or, as evidenced by a "marked-up" commitment, to be
issued in respect of such Mortgage Loan, and (H) if such Mortgage Loan
is cross-collateralized with any other Mortgage Loan, the lien of the
Mortgage for such other Mortgage Loan (the exceptions set forth in the
foregoing clauses (A), (B), (C), (D), (E), (F), (G) and (H),
collectively, "Permitted Encumbrances"). Such Permitted Encumbrances do
not materially interfere with the security intended to be provided by
the related Mortgage(s), or materially and adversely affect the current
use or value of the related Mortgaged Property or the current ability
of such Mortgaged Property to generate Net Cash Flow sufficient to
service the Mortgage Loan. In addition, if the option referred to in
clause (F) of the second preceding sentence is exercised, then the
accompanying partial release of the Mortgaged Property would not result
in any non-de minimis change in the loan-to-value ratio of the Mortgage
Loan. Except as contemplated by clause (E) of this paragraph (c)(v),
none of the Permitted Encumbrances are senior mortgage liens. If the
related Mortgaged Property is operated as a healthcare facility or a
hospitality property, a UCC financing statement has been filed and/or
recorded in all places necessary to perfect a valid security interest
in the personal property of the related Borrower granted under such
Mortgage and/or any related security agreement, chattel mortgage or
equivalent document related to and delivered in connection with such
Mortgage Loan, and such document or documents establish and create a
valid and, subject to the exceptions in paragraph (c)(xii) below,
enforceable first lien and first priority security interest in the
property of the related Borrower described therein, subject to any
purchase money security interest or any security interest to secure a
line of credit or similar financing.
-72-
<PAGE>
(vi) The lien of each related Mortgage is insured by an
ALTA lender's title insurance policy, or its equivalent as adopted in
the applicable jurisdiction, issued by a nationally recognized title
insurance company or its subsidiary, insuring the originator of such
Mortgage Loan, its successors and assigns, as to the first priority
lien of the Mortgage in the original principal amount of such Mortgage
Loan after all advances of principal, subject only to Permitted
Encumbrances (or, if a title insurance policy has not yet been issued
in respect of any Mortgage Loan, a policy meeting the foregoing
description is evidenced by a commitment for title insurance
"marked-up" at the closing of such Mortgage Loan). Such title policy
(or, if it has yet to be issued, the coverage to be provided thereby)
is in full force and effect, all premiums thereon have been paid and,
to the Representing Party's knowledge as of the Closing Date, no
material claims have been made thereunder and no claims have been paid
thereunder (and the Representing Party has not received notice of any
material claims having been made or paid thereunder). No holder of the
related Mortgage has done, by act or omission, anything that would, and
the Representing Party has no actual knowledge of any other
circumstance that would, materially impair the coverage under such
title policy. Immediately following the transfer and assignment of the
related Mortgage Loan to the Trustee, such title policy (or, if it has
yet to be issued, the coverage to be provided thereby) will inure to
the benefit of the Trustee without the consent of or notice to the
insurer. To the Representing Party's knowledge, the insurance company
that issued (or is obligated to issue) such title policy is qualified
to do business in the jurisdiction in which the related Mortgaged
Property is located.
(vii) The Representing Party has not waived any material
default, breach, violation or event of acceleration existing under the
related Mortgage or Mortgage Note, except that certain post-closing
conditions or requirements may not have yet been completed.
(viii) There is no right of rescission, offset, abatement,
diminution, defense or counterclaim to any Mortgage Loan (including the
defense of usury), nor will the operation of any of the terms of such
Mortgage Loan, or the exercise of any rights thereunder, render the
Mortgage Loan, the related Mortgage Note or the related Mortgage
unenforceable, in whole or in part, or subject to any right of
rescission, offset, abatement, diminution, defense or counterclaim. To
the Representing Party's actual knowledge, no such right of rescission,
offset, abatement, diminution, defense or counterclaim has been
asserted with respect to any Mortgage Loan.
(ix) The Representing Party has not received actual
notice and is not otherwise aware that (A) there is any proceeding
pending or threatened for condemnation affecting all or a material
portion of the related Mortgaged Property or (B) there is any damage at
the related Mortgaged Property that materially and adversely affects
the value of such Mortgaged Property (except in such case where an
escrow of funds exists, or an effective insurance policy provides
coverage, sufficient to effect the necessary repairs and maintenance).
(x) At origination, such Mortgage Loan complied in all
material respects with all requirements of federal, state and local
laws (including, without limitation, laws pertaining to usury) relating
to the origination, funding and terms of such Mortgage Loan.
-73-
<PAGE>
(xi) The proceeds of such Mortgage Loan have been fully
disbursed, and there is no requirement for future advances thereunder.
(xii) The Mortgage and Mortgage Note for such Mortgage
Loan and all other documents to which the related Borrower is a party
and which evidence or secure such Mortgage Loan, are each the legal,
valid and binding obligations of the related Borrower (subject to any
non-recourse provisions and any applicable state anti-deficiency
legislation), enforceable in accordance with their respective terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, redemption, fraudulent conveyance, receivership,
moratorium or other laws relating to or affecting the rights of
creditors generally and by general principles of equity, and except
that certain provisions of such Mortgage Loan documents are or may be
unenforceable in whole or in part under applicable state or federal
laws, but the inclusion of such provisions does not render any of the
Mortgage Loan documents invalid as a whole, and such Mortgage Loan
documents taken as a whole are enforceable to the extent necessary and
customary for the practical realization of the rights and benefits
afforded thereby.
(xiii) The related Mortgaged Property is insured by a fire
and extended perils insurance policy, issued by an insurer meeting the
requirements of such Mortgage Loan and having a claims-paying rating of
at least A:V from A.M. Best Company, in an amount at least equal to the
lesser of the outstanding principal balance of such Mortgage Loan and
100% of the full replacement cost of the improvements located on the
related Mortgaged Property, with (if applicable) an appropriate
endorsement to avoid the application of any co-insurance provisions
with respect to such Mortgaged Property, and is also covered by
comprehensive general liability insurance against claims for personal
and bodily injury, death or property damage occurring on, in or about
the related Mortgaged Property, in an amount customarily required by
institutional lenders, and (except if such Mortgaged Property is
operated as a mobile home park) by business interruption or rental loss
insurance in an amount equal to the gross rentals for at least a
12-month period. In addition, no such insurance policy provides that it
may be canceled, endorsed, altered or reissued to effect a change in
coverage unless such insurer shall have first given the mortgagee under
such Mortgage Loan thirty (30) days' prior written notice, and no
notice has been received as of the date hereof; all premiums required
to be paid on such policy have been paid; and the related Mortgage
obligates the related Borrower to maintain all such insurance and, at
the related Borrower's failure to do so, authorizes the mortgagee under
such Mortgage Loan to purchase such insurance at the related Borrower's
cost and expense and to seek reimbursement from such Borrower.
Furthermore, all insurance coverage required under the related Mortgage
is in full force and effect with respect to the related Mortgaged
Property, and if the related Mortgaged Property is located in a
federally designated special flood hazard area, the related Borrower is
required to maintain flood insurance in respect thereof (exclusive of
any parking lot or unused or undeveloped portion thereof). To the
Representing Party's knowledge, the insurer issuing each of the
foregoing insurance policies is qualified to write insurance in the
jurisdiction where the related Mortgaged Property is located.
-74-
<PAGE>
(xiv) Except in the case of the Mortgage Loans identified
on the Mortgage Loan Schedule by loan numbers LL1009 and LL1010, as to
which environmental data base reviews were conducted as to the related
Mortgaged Property, a "Phase I" environmental site assessment meeting
ASTM requirements (or an update of a previously conducted assessment)
was performed by a licensed third-party professional experienced in
environmental matters with respect to the related Mortgaged Property
within the 24-month period prior to the Closing Date (or, in the case
of the Mortgage Loans identified on the Mortgage Loan Schedule by loan
numbers 113, 167, 220, 228, 267, 269 and 335, as of an earlier date).
In the case of the Mortgage Loans identified on the Mortgage Loan
Schedule by loan numbers 110, 112, 119, 288, 316A, 6601896, LC2663,
LC3013, LC3028, LC3339 and LC3517, a "Phase II" environmental site
assessment meeting ASTM requirements was also performed by a licensed
third-party professional experienced in environmental matters with
respect to the related Mortgaged Property. Either (x) the related
environmental reports did not reveal any known circumstances or
conditions with respect to the related Mortgaged Property that rendered
such Mortgaged Property, at the date(s) of such environmental
report(s), in material violation of any applicable environmental laws
or (y) if any such environmental report did reveal any such
circumstances or conditions with respect to the related Mortgaged
Property and the same have not been subsequently remediated in all
material respects, then either (i) the expenditure of funds necessary
to effect such remediation is not material in relation to the
outstanding principal balance of the related Mortgage Loan, or (ii) a
sufficient escrow of funds exists for purposes of effecting such
remediation, or (iii) the related Borrower or other responsible party
is currently taking such actions, if any, with respect to such
circumstances or conditions as have been required by the applicable
governmental regulatory authority, or (iv) the related Mortgaged
Property is insured under a policy of insurance, subject to certain per
occurrence and aggregate limits and a deductible, against possible
losses arising from such circumstances and conditions. The Representing
Party has no knowledge of any environmental condition or circumstance
affecting such Mortgaged Property and not disclosed in the related
environmental report(s), which would impact such Mortgaged Property's
soil or groundwater quality or require remediation by the related
Borrower under applicable environmental law. The related Mortgage or
other loan documents contain covenants on the part of the related
Borrower requiring its compliance with applicable federal and state
environmental laws and regulations in respect of the related Mortgaged
Property.
(xv) Except as indicated on the Mortgage Loan Schedule,
such Mortgage Loan is not cross-collateralized with other Mortgage
Loans in the Mortgage Pool. Such Mortgage Loan is not
cross-collateralized with a mortgage loan outside the Mortgage Pool.
(xvi) The terms of the Mortgage Note and Mortgage for
such Mortgage Loan have not been impaired, waived, altered or modified
in any material respect, except by written instrument which is
specifically set forth in the related Mortgage File.
(xvii) There are no delinquent taxes, ground rents, water
charges, sewer rents, or other similar outstanding charges affecting
the related Mortgaged Property that are not otherwise covered by an
escrow of funds sufficient to pay such charges.
-75-
<PAGE>
(xviii) The interest of the Borrower in the related
Mortgaged Property consists of a fee simple and/or leasehold estate or
interest in real property.
(xix) Such Mortgage Loan is a whole loan and not a
participation interest.
(xx) The assignment of the related Mortgage to the
Trustee has been duly authorized, executed and delivered by the
Representing Party, is in a recordable form and constitutes the legal,
valid and binding assignment of such Mortgage from the relevant
assignor to the Trustee, and the assignment of the related Assignment
of Leases, if any, or of any other agreement executed in connection
with such Mortgage Loan to the Trustee constitutes the legal, valid and
binding assignment thereof from the relevant assignor to the Trustee.
(xxi) All escrow deposits (including capital improvements
and environmental remediation reserves) relating to such Mortgage Loan
that were required to be delivered to the lender under the terms of the
related loan documents, have been received and, to the extent of any
remaining balances of such escrow deposits, are in the possession or
under the control of the Representing Party or its agents (which shall
include the Master Servicer). All such escrows and deposits are
conveyed hereunder to the Trust.
(xxii) As of the date of origination of such Mortgage Loan
and as of the Closing Date, the related Mortgaged Property was and is
free and clear of any mechanics' and materialmen's liens or liens in
the nature thereof which create a lien prior to that created by the
related Mortgage(s).
(xxiii) No improvement that was included for the purpose of
determining the appraised value of the related Mortgaged Property at
the time of origination of such Mortgage Loan lies outside the
boundaries and building restriction lines of such property to any
material extent (except to the extent that it may constitute a legal
non-conforming use or structure or title insurance was provided with
respect thereto); no improvements on adjoining properties materially
encroach upon such Mortgaged Property to any material extent; and no
improvement located on or forming part of such Mortgaged Property is in
material violation of any applicable zoning laws or ordinances and any
non-material violation does not materially and adversely affect the
value of such Mortgaged Property (provided, however, that, although it
does not constitute a violation of law, the improvements on such
Mortgaged Property may constitute a legal non-conforming use or
structure).
(xxiv) To the extent required under applicable law as of
the Closing Date and necessary for the enforceability or collectability
of the Mortgage Loan, the originator of such Mortgage Loan was
authorized to do business in the jurisdiction in which the related
Mortgaged Property is located at all times when it held the Mortgage
Loan.
(xxv) There is no material default, breach or event of
acceleration existing under the related Mortgage or Mortgage Note, and
the Representing Party has not, without having reviewed any public
records, received notice of any event (other than payments due but not
yet 30 days' delinquent) that, with the passage of time or with notice
and the
-76-
<PAGE>
expiration of any grace or cure period, would constitute such a
material default, breach or event of acceleration; provided, however,
that this representation and warranty does not cover any default,
breach or event of acceleration that specifically pertains to any
matter otherwise covered by any other representation and warranty made
by the Representing Party in any other paragraph of this Section
2.05(c); and provided, further, that certain post-closing conditions or
requirements may not have yet been completed.
(xxvi) If such Mortgage Loan is secured in whole or in
part by the interest of a Borrower under a Ground Lease and by the
related fee interest, such fee interest is encumbered by the related
Mortgage, and the related Mortgage does not by its terms provide that
it will be subordinated to the lien of any mortgage or any other lien
upon such fee interest.
(xxvii) Such Mortgage Loan does not contain any equity
participation by the lender, provide for any contingent or additional
interest in the form of participation in the cash flow of the related
Mortgaged Property or, except for ARD Loans, provide for the negative
amortization of interest.
(xxviii) No holder of such Mortgage Loan has, to the
Representing Party's knowledge, advanced funds or induced, solicited or
knowingly received any advance of funds from a party other than the
owner of the related Mortgaged Property, directly or indirectly, for
the payment of any amount required by the Mortgage Loan, except for
interest accruing from the date of origination of such Mortgage Loan or
the date of disbursement of the Mortgage Loan proceeds, whichever is
later, to the date which preceded by thirty (30) days the first Due
Date under the related Mortgage Note.
(xxix) To the Representing Party's knowledge, based on due
diligence customarily performed in the origination of comparable
mortgage loans, as of the date of origination of such Mortgage Loan,
(A)(i) the related Borrower was in possession of all material licenses,
permits and authorizations required by applicable laws for the
ownership of the related Mortgaged Property as it was then operated and
(ii) with respect to each Mortgaged Property improved by a hotel or
health care facility, the related Borrower was in possession of all
material licenses, permits and authorizations required by applicable
law for the ownership and operation of the related Mortgaged Property
as it was then operated, and (B) all such licenses, permits and
authorizations were valid and in full force and effect.
(xxx) The related Mortgage or Mortgage Note, together
with applicable state law, contains customary and enforceable
provisions (subject to the exceptions set forth in paragraph (c)(xii)
above) such as to render the rights and remedies of the holders thereof
adequate for the practical realization against the related Mortgaged
Property of the principal benefits of the security intended to be
provided thereby.
(xxxi) Such Mortgage Loan is a "qualified mortgage" within
the meaning of Section 860G(a)(3) of the Code.
-77-
<PAGE>
(xxxii) No fraud with respect to such Mortgage Loan has
taken place on the part of the Representing Party in connection with
the origination of such Mortgage Loan.
(xxxiii) The terms of such Mortgage Loan provide or, at
lender's option, permit, and the terms of this Agreement and any
Sub-Servicing Agreement to which such Mortgage Loan is subject provide
for purposes of calculating distributions on the Certificates and
additional compensation payable to the Master Servicer, the Special
Servicer and any related Sub-Servicer, that payments on and proceeds of
such Mortgage Loan will be applied to principal and interest at the
related Mortgage Rate (excluding, in the case of an ARD Loan after its
Anticipated Repayment Date, Additional Interest) due and owing at the
time such payments or proceeds are received, prior to being applied to
any Default Charges, assumption fees and modification fees then due and
owing.
(xxxiv) The origination, servicing and collection practices
used with respect to such Mortgage Loan have been in all material
respects legal and have met generally accepted servicing standards for
similar commercial and multifamily mortgage loans.
(xxxv) There exists as part of the related Mortgage File
an Assignment of Leases (either as a separate instrument or
incorporated into the related Mortgage); and such Assignment of Leases
creates in favor of the holder, a valid, perfected and (subject to the
exceptions set forth in paragraph (c)(xii) above) enforceable lien of
the same priority as the related Mortgage, in the property and rights
described therein; provided that the enforceability of such lien is
subject to applicable bankruptcy, insolvency, reorganization,
moratorium, and other laws affecting the enforcement of creditors'
rights generally, and by general principles of equity. The Representing
Party has the full right to assign to the Trustee such Assignment of
Leases and the lien created thereby as described in the immediately
preceding sentence. No Person other than the Borrower owns any interest
in any payments due under the related leases. The related Mortgage or
such Assignment of Leases provides for the appointment of a receiver
for rents or allows the lender to enter into possession to collect rent
or provides for rents to be paid directly to the mortgagee in the event
of a default.
(xxxvi) Except in the case of those Mortgage Loans
identified on the Mortgage Loan Schedule by loan numbers LC 3377, LC
3362 and LC 2779, and without having reviewed any public records since
origination, the Representing Party has no knowledge that the related
Mortgaged Property is encumbered by any debt other than the related
Mortgage Loan or another Mortgage Loan. In the case of the Mortgage
Loans identified on the Mortgage Loan Schedule by loan numbers LC 3377,
LC 3362 and LC 2779, the related Mortgaged Property is encumbered by
secured subordinate debt, but (A) in the case of the Mortgage Loans
identified in the Mortgage Loan Schedule by loan numbers LC 3377 and LC
3362, the holder of the subordinate debt has agreed pursuant to a
subordination and standstill agreement that, upon receiving a default
notice from the related senior lender, the holder of the subordinate
debt shall not be entitled to receive payments due under the
subordinate loan documents or otherwise enforce its remedies for the
duration of a standstill period of up to 90 days (however, after that
standstill period ends, unless the related senior lender is pursuing a
foreclosure action, the related subordinate lender is entitled to
resume payments due under the subordinate debt documents) and (B) in
the case of the Mortgage
-78-
<PAGE>
Loan identified on the Mortgage Loan Schedule by loan number LC 2779,
the holder of the subordinate debt has agreed pursuant to a
subordination and standstill agreement, not to foreclose on the related
Mortgaged Property for so long as such Mortgage Loan is outstanding and
the Special Servicer on behalf of the Trust is not pursuing a
foreclosure action) or is not otherwise pursuing enforcement of its
default remedies.
(xxxvii) Subject to a one-time (or, in the case of certain
Mortgage Loans, a multiple-time) transfer right allowed in accordance
with certain provisions set forth in the related Mortgage, the related
Mortgage contains a "due-on-sale" clause which provides for the
acceleration of, or permits the lender to accelerate, the payment of
the unpaid principal balance of such Mortgage Loan if, without the
prior written consent of the holder of the Mortgage and/or the
satisfaction of specified underwriting criteria set forth in the
related Mortgage Loan documents, the related Borrower transfers
ownership of the related Mortgaged Property subject to such Mortgage
or, except in the case of those Mortgage Loans identified on the
Mortgage Loan Schedule by loan numbers 318, 317, 307, 272 and 273, any
controlling interest in the related Borrower is directly or indirectly
transferred or sold.
(xxxviii) The Representing Party has not waived any claims
against the related Borrower or any related guarantor under any
non-recourse exceptions contained in the related Mortgage Note.
(xxxix) With the exception of the Mortgage Loans identified
on the Mortgage Loan Schedule as loan numbers LC 1009 and LC 1010, the
related Mortgage and/or Mortgage Note provides that the related
Borrower shall be fully and personally liable for all liabilities,
costs, losses, damages, expenses or claims suffered or incurred by the
lender by reason of or in connection with and to the extent of any
material fraud or intentional and material misrepresentation by the
related Borrower in connection with such Mortgage Loan.
(xl) If such Mortgage Loan is an ARD Loan, it commenced
amortizing on its initial scheduled Due Date, and it provides that: (i)
its Mortgage Rate will increase by at least two (2) percentage points
in connection with the passage of its Anticipated Repayment Date; (ii)
its Anticipated Repayment Date is approximately five (5) to fifteen
(15) years following the origination of such Mortgage Loan; (iii) no
later than the related Anticipated Repayment Date, the related Borrower
is required (if it has not previously done so) to enter into a "lockbox
agreement" whereby all revenue from the related Mortgaged Property
shall be deposited directly into a designated account controlled by the
Master Servicer; (iv) any cash flow from the related Mortgaged Property
that is applied to amortize such Mortgage Loan following its
Anticipated Repayment Date shall, to the extent such net cash flow is
in excess of the Scheduled P&I Payment payable therefrom, be net of
budgeted and discretionary (servicer approved) capital expenditures;
and (v) if the property manager for the related Mortgaged Property can
be removed by or at the direction of the lender on the basis of a debt
service coverage test, the subject debt service coverage ratio shall be
calculated without taking account of any increase in the related
Mortgage Rate on such Mortgage Loan's Anticipated Repayment Date.
-79-
<PAGE>
(xli) At origination of such Mortgage Loan, the related
Borrower was not, to the Representing Party's knowledge (based on
customary and usual due diligence conducted by prudent institutional
commercial mortgage lenders), a debtor in any pending state or federal
bankruptcy or insolvency proceeding. Furthermore, at the Closing Date,
without having reviewed any public records, the Representing Party has
no knowledge that the related Borrower was a debtor in any pending
state or federal bankruptcy or insolvency proceeding.
(xlii) The servicing and collection practices used with
respect to such Mortgage Loan have in all material respects been legal
and met customary standards used by institutional lenders with respect
to comparable mortgage loans.
(xliii) Without having reviewed any public records since
origination, the Representing Party has no knowledge of any pending
litigation or other legal proceedings involving the related Borrower or
the related Mortgaged Property that can reasonably be expected to
materially interfere with the security intended to be provided by the
related Mortgage, the current use of the related Mortgaged Property, or
the current ability of the Mortgaged Property to generate net cash flow
sufficient to service the Mortgage Loan.
(xliv) If such Mortgage Loan had a Cut-off Date Balance
greater than $15,000,000, the related Borrower has provided in its
organizational documents and/or covenanted in the Mortgage Loan
documents to own no significant asset other than the related Mortgaged
Property, Mortgaged Properties securing other Mortgage Loans and assets
incidental to its ownership and operation of such Mortgaged Property or
Properties; and to the Representing Party's knowledge, at the time of
origination of such Mortgage Loan, the related Borrower was in
compliance with such provisions/covenants.
(xlv) Except in cases where the related Mortgage Note or
the related Mortgage provide for (A) a release of a portion of the
related Mortgaged Property, which portion was not considered material
for purposes of underwriting the Mortgage Loan or (B) a release of a
portion of the related Mortgaged Property conditioned upon the
satisfaction of certain underwriting and legal requirements, property
performance requirements and/or the payment of a release price, neither
the related Mortgage Note nor the related Mortgage requires the lender
to release all or any material portion of the related Mortgaged
Property from the lien of the related Mortgage except upon payment in
full of all amounts due under the related Mortgage Loan.
(xlvi) Such Mortgage Loan does not permit the related
Mortgaged Property to be encumbered subsequent to the Closing Date by
any lien junior to or of equal priority with the lien of the related
Mortgage without the prior written consent of the holder thereof.
(xlvii) With respect to any Mortgage Loan that is a
Defeasance Loan, the related Mortgage Note or Mortgage provides that
(A) the Defeasance Option is not exercisable prior to a date that is at
least two (2) years following the Startup Day for the REMIC Pool which
holds such Mortgage Loan and (B) the Borrower will not be liable for
any shortfalls from the Defeasance Collateral or otherwise become
subject to recourse liability
-80-
<PAGE>
with respect to the Defeasance Loan except to the extent so liable
prior to defeasance; and, further, contains no provision that would
result in a new Borrower on the Defeasance Loan without the consent of
the related lender (unless such new Borrower is acquiring the Mortgaged
Property that was the initial security for the Defeasance Loan). In
addition, each Mortgage loan that is a Defeasance Loan permits
defeasance (i) only with substitute collateral constituting "government
securities" within the meaning of Treas. Reg. Section 1.860G-
2(a)(8)(i) and (ii) to the Representing Party's knowledge, only for the
purpose of facilitating the disposition of mortgaged real property and
not as part of an arrangement to collateralize a REMIC offering with
obligations that are not real estate mortgages.
(xlviii) If the Mortgage in respect of any Mortgage Loan is
a deed of trust, (A) a trustee, duly qualified under applicable law to
serve as such, is properly designated and serving under such Mortgage,
and (B) except in connection with a trustee's sale after default by the
related Borrower, no fees or expenses are payable to such trustee by
the Representing Party or any subsequent mortgagee.
(xlix) The related Mortgage Note is not secured by any
collateral that is not included in the Trust Fund.
(l) If such Mortgage Loan is secured by the interest of
the related Borrower as a lessee under a Ground Lease covering all or
any material portion of the related Mortgaged Property, but not by the
related fee interest in such Mortgaged Property or portion thereof:
(A) As of the origination of such Mortgage Loan,
such Ground Lease was in full force and
effect and, to the Representing Party's
knowledge, no material default existed under
such Ground Lease; the Representing Party
has provided the ground lessor with notice
of its lien in accordance with the terms of
such Ground Lease; and, as of the Closing
Date, the Representing Party has not
received written notice of any material
default under such Ground Lease;
(B) Either (1) the related ground lessor has
subordinated its interest in the related
Mortgaged Property to the interest of the
holder of the Mortgage Loan or (2) the
related ground lessor has granted the holder
of the Mortgage Loan notice of and the right
to cure any default or breach by the ground
lessee (provided that the holder of the
Mortgage Loan has provided the ground lessor
with notice of its lien in accordance with
the terms of such Ground Lease);
(C) Upon the foreclosure of such Mortgage Loan
or acceptance of a deed in lieu thereof
(provided that the holder of the Mortgage
Loan has provided the ground lessor with
notice of its lien in accordance with the
terms of such Ground Lease), the related
Ground Lease is assignable to the lender
under such Mortgage Loan and its assigns
-81-
<PAGE>
without the consent of the ground lessor
thereunder (or such consent, if required,
cannot be unreasonably withheld);
(D) Such Ground Lease or a memorandum thereof
has been or will be duly recorded; such
Ground Lease, or an estoppel letter or other
agreement received by the originator of such
Mortgage Loan from the ground lessor,
permits the interest of the lessee
thereunder to be encumbered by the related
Mortgage; and there has been no material
change in the terms of such Ground Lease
since its recordation, with the exception of
written instruments which are a part of the
related Mortgage File;
(E) Such Ground Lease is not subject to any
liens or encumbrances superior to, or of
equal priority with, the related Mortgage,
other than the related fee interest and
Permitted Encumbrances;
(F) Such Ground Lease, or an estoppel letter or
other agreement received by the originator
of such Mortgage Loan from the ground
lessor, provides that (provided that the
holder of the Mortgage Loan has provided the
ground lessor with notice of its lien in
accordance with the terms of such Ground
Lease) no notice of termination given under
such Ground Lease is effective against the
holder unless a copy has been delivered to
such lender in the manner described in such
Ground Lease;
(G) Such Ground Lease, or an estoppel letter or
other agreement received by the originator
of such Mortgage Loan from the ground
lessor, requires the ground lessor to enter
into a new lease with the holder of such
Mortgage Loan upon termination of such
Ground Lease for any reason, including
rejection of such Ground Lease in a
bankruptcy proceeding (provided that the
holder of the Mortgage Loan has provided the
ground lessor with notice of its lien in
accordance with the terms of such Ground
Lease);
(H) Such Ground Lease has an original term (or
an original term plus one or more optional
renewal terms, which, under all
circumstances, may be exercised, and will be
enforceable, by the holder of such Mortgage
Loan if it becomes the owner of such
leasehold interest) that extends not less
than 10 years beyond the stated maturity of
such Mortgage Loan;
(I) Under the terms of such Ground Lease, or an
estoppel letter or other agreement received
by the originator of the Mortgage Loan from
the ground lessor, and the related Mortgage,
taken together (provided that the holder of
the Mortgage Loan has provided the ground
lessor with notice of its lien in accordance
with the terms of such Ground
-82-
<PAGE>
Lease), any related insurance proceeds or
condemnation proceeds (other than in respect
of a total or substantially total loss or
taking) will be applied either (1) to the
repair or restoration of all or part of the
related Mortgaged Property, with the lender
or a trustee appointed by it having the
right to hold and disburse such proceeds as
the repair or restoration progresses (except
in such cases where the Ground Lease
contains a provision entitling another party
to hold and disburse such proceeds would not
be viewed as commercially unreasonable by a
prudent commercial mortgage lender), or (2)
to the payment of the outstanding principal
balance of such Mortgage Loan together with
any accrued interest thereon;
(J) Such Ground Lease does not impose any
restrictions on subletting which would be
viewed as commercially unreasonable by a
prudent commercial mortgage lender; and
(K) Such Ground Lease may not be amended,
modified or, except in the case of a
default, canceled or terminated without the
prior written consent of the holder of the
Mortgage Loan, and any such action without
such consent is not binding on such holder,
provided that such holder has provided the
ground lessor with notice of its lien in
accordance with the terms of such Ground
Lease.
(li) Neither the related Mortgage Note nor the related
Mortgage contain provisions limiting the right or ability of the
Representing Party to assign, transfer and convey such documents.
(lii) Each Mortgaged Property constitutes one or more
complete separate tax lots.
(liii) The Representing Party has inspected or caused to
be inspected each related Mortgaged Property within the 24 months
preceding the Cut-off Date.
(liv) The related Mortgage requires the related Borrower
to provide the holder of such Mortgage with annual operating
statements, rent rolls and related information.
(d) It is understood and agreed that the representations and
warranties set forth in this Section 2.05 shall survive delivery of the
respective Mortgage Files to the Trustee or a Custodian on its behalf and shall
inure to the benefit of the Persons for whose benefit they were made for so long
as the Trust remains in existence, notwithstanding any restrictive or qualified
endorsement or assignment. Upon discovery by any of the parties hereto of a
breach of any of the representations and warranties set forth in subsection (a)
or (b) above which materially and adversely affects the interests of the
Certificateholders or any party hereto or a breach of any of the representations
and warranties set forth in subsection (c) above which materially and adversely
affects the value of any Mortgage Loan or the interests therein of the
Certificateholders, the party discovering such breach shall give prompt written
notice to each of the other parties hereto. It is further understood and
-83-
<PAGE>
agreed that Llama makes no representations or warranties with regard to the SBRC
Mortgage Loans and that Llama has no obligation to cure any breach of any
representation or warranty made by SBRC with respect to any SBRC Mortgage Loan,
nor to repurchase any SBRC Mortgage Loan. It is further understood and agreed
that SBRC makes no representations or warranties with regard to the Llama
Mortgage Loans and that SBRC has no obligation to cure any breach of any
representation or warranty made by Llama with respect to any Llama Mortgage
Loan, nor to repurchase any Llama Mortgage Loan.
SECTION 2.06. Representations and Warranties of the Master
Servicer.
(a) The Master Servicer hereby represents and warrants to the
other parties hereto and for the benefit of the Certificateholders, as of the
Closing Date, that:
(i) The Master Servicer is duly organized, validly existing
and in good standing as a corporation under the laws of the State of
California, and the Master Servicer is in material compliance with the
laws of each State in which any Mortgaged Property is located to the
extent necessary to perform its obligations under this Agreement.
(ii) The execution and delivery of this Agreement by the
Master Servicer, and the performance and compliance with the terms of
this Agreement by the Master Servicer, will not violate the Master
Servicer's organizational documents or constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a
default) under, or result in the breach of, any material agreement or
other instrument to which it is a party or which is applicable to it or
any of its assets, which default, in the Master Servicer's good faith
and reasonable judgment, is likely to materially and adversely affect
either the ability of the Master Servicer to perform its obligations
under this Agreement or the financial condition of the Master Servicer.
(iii) The Master Servicer has the full power and authority to
enter into and consummate all transactions contemplated by this
Agreement, has duly authorized the execution, delivery and performance
of this Agreement, and has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by each of the other parties hereto, constitutes a valid,
legal and binding obligation of the Master Servicer, enforceable
against the Master Servicer in accordance with the terms hereof,
subject to (A) applicable bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors'
rights generally, and (B) general principles of equity, regardless of
whether such enforcement is considered in a proceeding in equity or at
law.
(v) The Master Servicer is not in violation of, and its
execution and delivery of this Agreement and its performance and
compliance with the terms of this Agreement will not constitute a
violation of, any law, any order or decree of any court or arbiter, or
any order, regulation or demand of any federal, state or local
governmental or regulatory authority, which violation, in the Master
Servicer's good faith and reasonable judgment, is likely to
-84-
<PAGE>
affect materially and adversely either the ability of the Master
Servicer to perform its obligations under this Agreement or the
financial condition of the Master Servicer.
(vi) No litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer the
outcome of which, in the Master Servicer's good faith and reasonable
judgement, would prohibit the Master Servicer from entering into this
Agreement or, in the Master Servicer's good faith and reasonable
judgment, could reasonably be expected to materially and adversely
affect either the ability of the Master Servicer to perform its
obligations under this Agreement or the financial condition of the
Master Servicer.
(vii) The Master Servicer has errors and omissions insurance
in the amounts and with the coverage required by Section 3.07(d).
(viii) No consent, approval, authorization or order of any
state or federal court or governmental agency or body is required for
the consummation by the Master Servicer of the transactions
contemplated herein, expect for those consents, approvals,
authorizations or orders that previously have been obtained and where
the lack of such consent, approval, authorization or order would not
have a material adverse effect on the ability of the Master Servicer to
perform its obligations under this Agreement.
(b) The representations and warranties of the Master Servicer
set forth in Section 2.06(a) shall survive the execution and delivery of this
Agreement and inure to the benefit of the Persons for whose benefit they were
made for so long as the Trust remains in existence. Upon discovery by any of the
parties hereto of a breach of any of such representations and warranties which
materially and adversely affects the interests of the Certificateholders or any
party hereto, the party discovering such breach shall give prompt written notice
to each of the other parties hereto.
(c) The Master Servicer covenants that by August 31, 1999, any
custom-made software or hardware designed, purchased or licensed by the Master
Servicer and used by the Master Servicer in the performance of its duties under,
or the compiling, reporting or generation of data required by, this Agreement,
will not contain any deficiency (i) in the ability of such software or hardware
to identify correctly or perform calculations or other processing with respect
to dates after August 31, 1999 or (ii) that would cause such software or
hardware to be fit no longer for the purpose for which it was intended by reason
of the changing of the date from 1999 to 2000.
(d) Each successor Master Servicer (if any) shall be deemed to
have made, as of the date of its succession, each of the representations and
warranties set forth in Section 2.06(a) and the covenant in Section 2.06(c)
subject to such appropriate modifications to the representation and warranty set
forth in Section 2.06(a)(i) to accurately reflect such successor's jurisdiction
of organization and whether it is a corporation, partnership, bank, association
or other type of organization.
-85-
<PAGE>
SECTION 2.07. Representations and Warranties of the
Special Servicer.
(a) The Special Servicer hereby represents and warrants to the
other parties hereto and for the benefit of the Certificateholders, as of the
Closing Date, that:
(i) The Special Servicer is duly organized, validly existing
and in good standing as a limited liability company under the laws of
the State of Delaware, and the Special Servicer is in compliance with
the laws of each State in which any Mortgaged Property is located to
the extent necessary to perform its obligations under this Agreement.
(ii) The execution and delivery of this Agreement by the
Special Servicer, and the performance and compliance with the terms of
this Agreement by the Special Servicer, will not violate the Special
Servicer's organizational documents or constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a
default) under, or result in the breach of, any material agreement or
other instrument to which it is a party or which is applicable to it or
any of its assets, which default, in the Special Servicer's good faith
and reasonable judgement, is likely to materially and adversely effect
either the ability of the Special Servicer to perform its obligations
under this Agreement or the financial condition of the Special
Servicer.
(iii) The Special Servicer has the full power and authority to
enter into and consummate all transactions contemplated by this
Agreement, has duly authorized the execution, delivery and performance
of this Agreement, and has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by each of the other parties hereto, constitutes a valid,
legal and binding obligation of the Special Servicer, enforceable
against the Special Servicer in accordance with the terms hereof,
subject to (A) applicable bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors'
rights generally, and (B) general principles of equity, regardless of
whether such enforcement is considered in a proceeding in equity or at
law.
(v) The Special Servicer is not in violation of, and its
execution and delivery of this Agreement and its performance and
compliance with the terms of this Agreement will not constitute a
violation of, any law, any order or decree of any court or arbiter, or
any order, regulation or demand of any federal, state or local
governmental or regulatory authority, which violation, in the Special
Servicer's good faith and reasonable judgment, is likely to affect
materially and adversely either the ability of the Special Servicer to
perform its obligations under this Agreement or the financial condition
of the Special Servicer.
(vi) No litigation is pending or, to the best of the Special
Servicer's knowledge, threatened against the Special Servicer which
would prohibit the Special Servicer from entering into this Agreement
or, in the Special Servicer's good faith and reasonable judgment, is
likely to materially and adversely affect either the ability of the
Special Servicer to perform its obligations under this Agreement or the
financial condition of the Special Servicer.
-86-
<PAGE>
(vii) Each officer or employee of the Special Servicer that
has responsibilities concerning the servicing and administration of the
Mortgage Loans is covered by errors and omissions insurance in the
amounts and with the coverage required by Section 3.07(d). None of the
Special Servicer or any of their respective officers or employees that
is involved in the servicing or administration of the Mortgage Loans
has been refused such coverage or insurance.
(viii) No consent, approval, authorization or order of any
state or federal court or governmental agency or body is required for
the consummation by the Special Servicer of the transactions
contemplated herein, expect for those consents, approvals,
authorizations or orders that previously have been obtained.
(ix) The Special Servicer has not retained any Sub-Servicers
as of the Closing Date.
(b) The representations and warranties of the Special Servicer
set forth in Section 2.07(a) shall survive the execution and delivery of this
Agreement and inure to the benefit of the Persons for whose benefit they were
made for so long as the Trust remains in existence. Upon discovery by any of the
parties hereto of a breach of any of such representations and warranties which
materially and adversely affects the interests of the Certificateholders or any
party hereto, the party discovering such breach shall give prompt written notice
to each of the other parties hereto.
(c) The Special Servicer covenants that by August 31, 1999,
any custom-made software or hardware designed, purchased or licensed by the
Special Servicer and used by the Special Servicer in the performance of its
duties under, or the compiling, reporting or generation of data required by,
this Agreement, will not contain any deficiency (i) in the ability of such
software or hardware to identify correctly or perform calculations or other
processing with respect to dates after August 31, 1999 or (ii) that would cause
such software or hardware to be fit no longer for the purpose for which it was
intended by reason of the changing of the date from 1999 to 2000.
(d) Each successor Special Servicer (if any), other than the
Trustee, shall be deemed to have made, as of the date of its succession, each of
the representations and warranties set forth in Sections 2.07(a) and the
covenant set forth in Section 2.07(c), subject to such appropriate modifications
to the representation and warranty set forth in Section 2.07(a)(i) to accurately
reflect such successor's jurisdiction of organization and whether it is a
corporation, partnership, bank, association or other type of organization.
SECTION 2.08. Representations and Warranties of the
Trustee.
(a) The Trustee hereby represents and warrants to the other
parties hereto and for the benefit of the Certificateholders, as of the Closing
Date, that:
(i) The Trustee is a banking corporation duly organized,
validly existing and in good standing under the laws of the State of
New York and is, shall be or, if necessary, shall appoint a co-trustee
that is, in compliance with the laws of each State in which any
-87-
<PAGE>
Mortgaged Property is located to the extent necessary to ensure the
enforceability of each Mortgage Loan and to perform its obligations
under this Agreement.
(ii) The execution and delivery of this Agreement by the
Trustee, and the performance and compliance with the terms of this
Agreement by the Trustee, do not violate the Trustee'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 Trustee's good faith and reasonable judgement, is
likely to materially and adversely affect either the ability of the
Trustee to perform its obligations under this Agreement or the
financial condition of the Trustee.
(iii) The Trustee 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 Trustee, enforceable against the
Trustee in accordance with the terms hereof, subject to (A) applicable
bankruptcy, insolvency, receivership, 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 Trustee 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 Trustee's good faith and reasonable
judgment, is likely to affect materially and adversely either the
ability of the Trustee to perform its obligations under this Agreement
or the financial condition of the Trustee.
(vi) No litigation is pending or, to the best of the Trustee's
knowledge, threatened against the Trustee which would prohibit the
Trustee from entering into this Agreement or, in the Trustee's good
faith and reasonable judgment, is likely to materially and adversely
affect either the ability of the Trustee to perform its obligations
under this Agreement or the financial condition of the Trustee.
(vii) No consent, approval, authorization or order of any
state or federal court or governmental agency or body is required for
the consummation by the Trustee of the transactions contemplated
herein, expect for those consents, approvals, authorizations or orders
that previously have been obtained.
(b) The representations and warranties of the Trustee set
forth in Section 2.08(a) shall survive the execution and delivery of this
Agreement and shall inure to the benefit of the Persons for whose benefit they
were made for so long as the Trust remains in existence. Upon discovery by any
of the parties hereto of a breach of any of such representations and warranties
which materially
-88-
<PAGE>
and adversely affects the interests of the Certificateholders or any party
hereto, the party discovering such breach shall give prompt written notice to
each of the other parties hereto.
(c) The Trustee covenants that by August 31, 1999, any
custom-made software or hardware designed, purchased or licensed by the Trustee
and used by the Trustee in the performance of its duties under, or the
compiling, reporting or generation of data required by, this Agreement, will not
contain any deficiency (i) in the ability of such software or hardware to
identify correctly or perform calculations or other processing with respect to
dates after August 31, 1999 or (ii) that would cause such software or hardware
to be fit no longer for the purpose for which it was intended by reason of the
changing of the date from 1999 to 2000.
(d) Each successor Trustee (if any) shall be deemed to have
made, as of the date of its succession, each of the representations and
warranties set forth in Section 2.08(a) and the covenant in Section 2.08(c),
subject to such appropriate modifications to the representation and warranty set
forth in Section 2.08(a)(i) to accurately reflect such successor's jurisdiction
of organization and whether it is a corporation, partnership, bank, association
or other type of organization.
SECTION 2.09. Acceptance of the Grantor Trusts by Trustee;
Issuance of the Class Y Certificates and the
Class R-I Certificates.
(a) The Depositor, as of the Closing Date, and concurrently
with the execution and delivery of this Agreement, does hereby assign without
recourse all right, title and interest of the Depositor in and to the REMIC I
Residual Interest and the Loan REMIC Residual Interests to the Trustee for the
benefit of the Holders of the Class R-I Certificates. It is the intention of the
parties hereto that the segregated pool of assets consisting of the REMIC I
Residual Interest and the Loan REMIC Residual Interests constitute a Grantor
Trust for federal income tax purposes and, further, that such segregated pool of
assets be designated as "Grantor Trust R-I". The Trustee, by its execution and
delivery hereof, acknowledges the assignment to it of the assets of Grantor
Trust R-I and declares that it will hold such assets in trust for the exclusive
use and benefit of all present and future Holders of the Class R-I Certificates.
Concurrently with the assignment to it of the assets included in Grantor Trust
R-I, the Trustee shall execute, authenticate and deliver to or upon the order of
the Depositor the Class R-I Certificates in authorized denominations evidencing
the entire beneficial ownership of Grantor Trust R-I. The rights of the Holders
of the Class R-I Certificates to receive distributions from the proceeds of
Grantor Trust R-I, and all ownership interests of such Holders in and to such
distributions, shall be as set forth in this Agreement.
(b) It is the intention of the parties hereto that the
segregated pool of assets consisting of any collections of Additional Interest
received on the ARD Loans and the Class Y Sub-Account constitute a Grantor
Trust for federal income tax purposes and, further that such segregated pool of
assets be designated as "Grantor Trust Y". The Trustee, by its execution and
delivery hereof, acknowledges the assignment to it of the assets of Grantor
Trust Y and declares that it will hold such assets in trust for the exclusive
use and benefit of all present and future Holders of the Class Y Certificates.
Concurrently with the assignment to it of the assets included in Grantor Trust
Y, the Trustee shall execute, authenticate and deliver to or upon the order of
the Depositor the Class Y Certificates in authorized denominations evidencing
the entire beneficial ownership of Grantor Trust
-89-
<PAGE>
Y. The rights of the Holders of the Class Y Certificates to receive
distributions from the proceeds of Grantor Trust Y, and all ownership interests
of such Holders in and to such distributions, shall be as set forth in this
Agreement.
SECTION 2.10. Creation of the REMIC I Regular Interests
and REMIC I Residual Interest.
Concurrently with the assignment to the Trustee of the assets
included in REMIC I, and in exchange therefor, at the written direction of the
Depositor, the REMIC I Regular Interests and the REMIC I Residual Interest have
been issued hereunder. The REMIC I Residual Interest, together with the REMIC I
Regular Interests, constitute the entire beneficial ownership of REMIC I. The
rights of the Class R-I Certificateholders and REMIC II to receive distributions
from the proceeds of REMIC I in respect of the REMIC I Residual Interest and the
REMIC I Regular Interests, respectively, and all ownership interests of the
Class R-I Certificateholders and REMIC II in and to such distributions, shall be
as set forth in this Agreement.
SECTION 2.11. Conveyance of REMIC I Regular Interests;
Acceptance of REMIC II by the Trustee.
(a) The Depositor, as of the Closing Date, and concurrently
with the execution and delivery hereof, does hereby assign without recourse all
the right, title and interest of the Depositor in and to the REMIC I Regular
Interests to the Trustee for the benefit of the Holders of the REMIC III
Certificates and the Class R-II Certificates. The Trustee acknowledges the
assignment to it of the REMIC I Regular Interests and declares that it holds and
will hold the same in trust for the exclusive use and benefit of all present and
future Holders of the REMIC III Certificates and the Class R-II Certificates.
SECTION 2.12. Issuance of the Class R-II Certificates;
Creation of the REMIC II Regular Interests.
Concurrently with the assignment to the Trustee of the assets
included in REMIC II, and in exchange therefor, at the written direction of the
Depositor, the REMIC II Regular Interests have been issued hereunder and the
Trustee has executed, authenticated and delivered to or upon the order of the
Depositor, the Class R-II Certificates in authorized denominations. The
interests evidenced by the Class R-II Certificates, together with the REMIC II
Regular Interests, constitute the entire beneficial ownership of REMIC II. The
rights of the Class R-II Certificateholders and REMIC III to receive
distributions from the proceeds of REMIC II in respect of the Class R-II
Certificates and the REMIC II Regular Interests, respectively, and all ownership
interests of the Class R-II Certificateholders and REMIC III in and to such
distributions, shall be as set forth in this Agreement.
-90-
<PAGE>
SECTION 2.13. Conveyance of REMIC II Regular Interests;
Acceptance of REMIC III by the Trustee.
The Depositor, as of the Closing Date, and concurrently with
the execution and delivery hereof, does hereby assign without recourse all the
right, title and interest of the Depositor in and to the REMIC II Regular
Interests to the Trustee for the benefit of the Holders of the REMIC III
Certificates. The Trustee acknowledges the assignment to it of the REMIC II
Regular Interests and declares that it holds and will hold the same in trust for
the exclusive use and benefit of all present and future Holders of the REMIC III
Certificates.
SECTION 2.14. Issuance of the REMIC III Certificates.
Concurrently with the assignment to the Trustee of the REMIC
II Regular Interests, and in exchange therefor, at the written direction of the
Depositor, the Trustee has executed, authenticated and delivered to or upon the
order of the Depositor, the REMIC III Certificates in authorized denominations
evidencing the entire beneficial ownership of REMIC III. The rights of the
respective Classes of Holders of the REMIC III Certificates to receive
distributions from the proceeds of REMIC III in respect of their REMIC III
Certificates, and all ownership interests of the respective Classes of Holders
of the REMIC III Certificates in and to such distributions, shall be as set
forth in this Agreement.
-91-
<PAGE>
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
SECTION 3.01. Administration of the Mortgage Loans.
(a) Each of the Master Servicer and the Special Servicer shall
service and administer the Mortgage Loans and other assets of the Trust that it
is obligated to service and administer pursuant to this Agreement on behalf of
the Trustee, and in the best interests and for the benefit of the
Certificateholders (as determined by the Master Servicer or the Special
Servicer, as the case may be, in its good faith and reasonable judgment), in
accordance with any and all applicable laws and the terms of this Agreement, the
respective Mortgage Loans and the related environmental insurance policies and,
to the extent consistent with the foregoing, in accordance with the Servicing
Standard. Without limiting the foregoing, and subject to Section 3.21, (i) the
Master Servicer shall service and administer all Mortgage Loans as to which no
Servicing Transfer Event has occurred and all Corrected Mortgage Loans, and (ii)
the Special Servicer shall service and administer (x) each Mortgage Loan (other
than a Corrected Mortgage Loan) as to which a Servicing Transfer Event has
occurred, and (y) each REO Property; provided, however, that the Master Servicer
shall continue to collect information from the Special Servicer and, based
thereon, prepare all reports to the Trustee required hereunder with respect to
any Specially Serviced Mortgage Loans and REO Properties (and the related REO
Loans), and further to render such other services with respect to any Specially
Serviced Mortgage Loans and REO Properties as are specifically provided for
herein; and provided, further, that the Special Servicer shall render such
services with respect to Mortgage Loans (in addition to the Specially Serviced
Mortgage Loans) as are specifically provided for herein.
(b) Subject to Section 3.01(a), the Master Servicer and the
Special Servicer each shall have full power and authority, acting alone, to do
or cause to be done any and all things in connection with such servicing and
administration which it may deem necessary or desirable. Without limiting the
generality of the foregoing, each of the Master Servicer and the Special
Servicer, in its own name, with respect to each of the Mortgage Loans it is
obligated to service hereunder, is hereby authorized and empowered by the
Trustee to execute and deliver, on behalf of the Certificateholders and the
Trustee or any of them: (i) any and all financing statements, continuation
statements and other documents or instruments necessary to maintain the lien
created by any Mortgage or other security document in the related Mortgage File
on the related Mortgaged Property and related collateral; (ii) in accordance
with the Servicing Standard and subject to Sections 3.08 and 3.20, any and all
modifications, waivers, amendments or consents to or with respect to any
documents contained in the related Mortgage File; and (iii) any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments. Subject to Section 3.10, the
Trustee shall, at the written request of a Servicing Officer of the Master
Servicer or the Special Servicer, furnish, or cause to be so furnished, to the
Master Servicer and the Special Servicer, as the case may be, any limited powers
of attorney and other documents necessary or appropriate to enable them to carry
out their servicing and administrative duties hereunder; provided, however, that
the Trustee shall not be held liable for any misuse of any such power of
attorney by the Master Servicer or the Special Servicer.
-92-
<PAGE>
(c) The relationship of each of the Master Servicer and Special
Servicer to the Trustee and to each other under this Agreement is intended by
the parties to be that of an independent contractor and not that of a joint
venturer, partner or agent. The Master Servicer shall have no responsibility for
the performance by the Special Servicer of its duties hereunder, and the Special
Servicer shall have no responsibility for the performance by the Master Servicer
of its duties hereunder, in each case unless the Master Servicer and the Special
Servicer are the same Person.
(d) In the event that any two or more Mortgage Loans are
cross-collateralized with each other, each of the Master Servicer or Special
Servicer, as applicable, in accordance with the terms of this Agreement, shall
service and administer such Mortgage Loans as a single Mortgage Loan as and when
it deems necessary and appropriate, consistent with the Servicing Standard. If
any Cross-Collateralized Mortgage Loan becomes a Specially Serviced Mortgage
Loan, then each other Mortgage Loan that is cross-collateralized with it shall
also become a Specially Serviced Mortgage Loan. Similarly, no
Cross-Collateralized Mortgage Loan shall subsequently become a Corrected
Mortgage Loan, unless and until all Servicing Transfer Events in respect of each
other Mortgage Loan that is cross-collateralized with it are remediated or
otherwise addressed as contemplated in the definition of "Specially Serviced
Mortgage Loan".
SECTION 3.02. Collection of Mortgage Loan Payments.
Each of the Master Servicer and the Special Servicer shall use its
reasonable best efforts (in any event, consistent with the Servicing Standard)
to collect all payments called for under the terms and provisions of the
Mortgage Loans it is obligated to service hereunder, and shall, to the extent
such procedures shall be consistent with this Agreement (including without
limitation, the Servicing Standard), follow such collection procedures as it
would follow were it the owner of such Mortgage Loans; provided, however, that
nothing herein contained shall be construed as an express or implied guarantee
by the Master Servicer or the Special Servicer of the collectability of the
Mortgage Loans; and, provided, further, that neither the Master Servicer nor the
Special Servicer shall, with respect to any ARD Loan after its Anticipated
Repayment Date, take any enforcement action with respect to the payment of
Additional Interest (other than the making of requests for its collection),
unless (i) the taking of an enforcement action with respect to the payment of
other amounts due under such Mortgage Loan is, in the good faith and reasonable
judgment of the Special Servicer, and without regard to such Additional
Interest, also necessary, appropriate and consistent with the Servicing Standard
or (ii) all other amounts due under such Mortgage Loan have been paid, the
payment of such Additional Interest has not been forgiven in accordance with
Section 3.20 and, in the good faith and reasonable judgment of the Special
Servicer, the Liquidation Proceeds expected to be recovered in connection with
such enforcement action will cover the anticipated costs of such enforcement
action and, if applicable, any associated Advance Interest. Consistent with the
foregoing, the Master Servicer (as to Performing Mortgage Loans) or the Special
Servicer (as to Specially Serviced Mortgage Loans) each may waive any Default
Charges in connection with any specific delinquent payment on a Mortgage Loan it
is obligated to service hereunder.
-93-
<PAGE>
At least ninety (90) days prior to the maturity date of each
Balloon Mortgage Loan, the Master Servicer shall send a notice to the related
Borrower of such maturity date (with a copy to be sent to the Special Servicer)
and shall request confirmation that the Balloon Payment will be paid by such
date. If any Borrower does not respond to such notice, then the Master Servicer
shall take such other steps as are reasonable and appropriate to ensure that
such Balloon Payment will be paid by the date due. If, as of a date not more
than 30 days prior to the maturity date of any Balloon Mortgage Loan, the Master
Servicer makes a good faith determination that the Borrower thereunder will
default in making its Balloon Payment and such default shall remain unremedied
for at least 30 days, the Master Servicer may transfer servicing of such Balloon
Mortgage Loan to the Special Servicer pursuant to Section 3.21 and such Balloon
Mortgage Loan will then be a Specially Serviced Mortgage Loan.
SECTION 3.03. Collection of Taxes, Assessments and Similar Items;
Servicing Accounts; Reserve Accounts.
(a) The Master Servicer shall, as to all the Mortgage Loans,
establish and maintain one or more accounts (the "Servicing Accounts"), into
which all Escrow Payments shall be deposited and retained. Subject to any terms
of the related Mortgage Loan documents that specify the nature of the account in
which Escrow Payments shall be held, each Servicing Account shall be an Eligible
Account. Withdrawals of amounts so collected in respect of any Mortgage Loan
(and interest earned thereon) from a Servicing Account may be made only: (i) to
effect payment of real estate taxes, assessments, insurance premiums (including,
without limitation, premiums on any Environmental Insurance Policy), ground
rents (if applicable) and comparable items in respect of the related Mortgaged
Property; (ii) to reimburse the Master Servicer, the Special Servicer or the
Trustee, as applicable, for any unreimbursed Servicing Advances made thereby to
cover any of the items described in the immediately preceding clause (i); (iii)
to refund to the related Borrower any sums as may be determined to be overages;
(iv) to pay interest, if required and as described below, to the related
Borrower on balances in the Servicing Account (or, if and to the extent not
payable to the related Borrower under the terms of the related Mortgage Loan, to
pay such interest to the Master Servicer); or (v) to clear and terminate the
Servicing Account at the termination of this Agreement in accordance with
Section 9.01. The Master Servicer shall pay or cause to be paid to the Borrowers
interest, if any, earned on the investment of funds in Servicing Accounts
maintained thereby, if required by law or the terms of the related Mortgage
Loan. If the Master Servicer shall deposit in a Servicing Account any amount not
required to be deposited therein, it may at any time withdraw such amount from
such Servicing Account, any provision herein to the contrary notwithstanding.
The Special Servicer shall promptly deliver all Escrow Payments received by it
to the Master Servicer for deposit in the applicable Servicing Account.
(b) The Master Servicer shall, as to all the Mortgage Loans
(including, without limitation, Specially Serviced Mortgage Loans), (i) maintain
accurate records with respect to each Mortgaged Property reflecting the status
of real estate taxes, assessments and other similar items that are or may become
a lien thereon and the status of insurance premiums and any ground rents payable
in respect thereof and (ii) use reasonable efforts to obtain, from time to time,
all bills for the payment of such items (including renewal premiums) and shall
effect payment thereof prior to the applicable penalty or termination date. For
purposes of effecting any such payment, the Master Servicer shall apply Escrow
Payments as allowed under the terms of the related Mortgage Loan or, if such
-94-
<PAGE>
Mortgage Loan does not require the related Borrower to escrow for the payment of
real estate taxes, assessments, insurance premiums, ground rents (if applicable)
and similar items, each of the Master Servicer and the Special Servicer shall,
as to those Mortgage Loans it is obligated to service hereunder and subject to
the Servicing Standard, enforce the requirement of the related Mortgage that the
Borrower make payments in respect of such items at the time they first become
due.
(c) In accordance with the Servicing Standard, the Master Servicer
shall, as to all the Mortgage Loans (including, without limitation, Specially
Serviced Mortgage Loans), advance with respect to the related Mortgaged Property
all such funds as are necessary for the purpose of effecting the payment of (i)
real estate taxes, assessments and other similar items, (ii) ground rents or
other rents (if applicable), and (iii) premiums on Insurance Policies
(including, without limitation, Environmental Insurance Policies), in each
instance if and to the extent Escrow Payments (if any) collected from the
related Borrower are insufficient to pay such item when due and the related
Borrower has failed to pay such item on a timely basis, and provided that the
particular advance would not, if made, constitute a Nonrecoverable Servicing
Advance. All such Servicing Advances shall be reimbursable in the first instance
from related collections from the Borrowers and further as provided in Section
3.05(a). No costs incurred by the Master Servicer or the Special Servicer in
effecting the payment of real estate taxes, assessments and similar items and,
if applicable, ground rents on or in respect of such Mortgaged Properties shall,
solely for purposes hereof, including, without limitation, calculating monthly
distributions to Certificateholders, be added to the unpaid principal balances
of the related Mortgage Loans, notwithstanding that the terms of such Mortgage
Loans so permit; provided, however, that this provision is in no way intended to
affect amounts actually due and owing from the related Borrower under such
Mortgage Loan.
(d) The Master Servicer shall, as to all the Mortgage Loans,
establish and maintain, as applicable, one or more accounts (the "Reserve
Accounts"), into which all Reserve Funds, if any, shall be deposited and
retained. Withdrawals of amounts so deposited may be made to pay for or
otherwise cover, or (if appropriate) to reimburse the related Borrower in
connection with, the specific items for which such Reserve Funds were escrowed,
all in accordance with the Servicing Standard and the terms of the related
Mortgage Note, Mortgage and any agreement with the related Borrower governing
such Reserve Funds. Subject to the terms of the related Mortgage Note and
Mortgage, all Reserve Accounts shall be Eligible Accounts and funds therein may
be invested in Permitted Investments in accordance with the provisions of
Section 3.06. Interest and investment income on funds held in any Reserve Fund
will be for the benefit of the Master Servicer subject to its withdrawal, but
only to the extent it is not otherwise required to be paid to the related
Borrower pursuant to applicable law and/or the related loan documents. The
Special Servicer shall promptly deliver all Reserve Funds received by it to the
Master Servicer for deposit in the applicable Reserve Account.
SECTION 3.04. Collection Account, Distribution Account and
Interest Reserve Account.
(a) The Master Servicer shall establish and maintain one or more
accounts (collectively, the "Collection Account"), held on behalf of the Trustee
in trust for the benefit of the Certificateholders. The Collection Account shall
be an Eligible Account. The Master Servicer shall deposit or cause to be
deposited in the Collection Account, within two (2) Business Days of receipt
-95-
<PAGE>
(in the case of payments by Borrowers or other collections on or in respect of
the Mortgage Loans) or as otherwise required hereunder, the following payments
and collections received or made by or on behalf of it subsequent to the Cut-off
Date (other than in respect of principal, interest and any other amounts due and
payable on the Mortgage Loans on or before the Cut-off Date, which payments
shall, in each case, be delivered promptly to the related Mortgage Loan Seller
or its designee, with negotiable instruments endorsed as necessary and
appropriate without recourse):
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest at the respective
Mortgage Rates on the Mortgage Loans and all Prepayment Premiums received
in respect of the Mortgage Loans;
(iii) all payments on account of Default Charges on such Mortgage
Loan;
(iv) all Insurance Proceeds and Liquidation Proceeds (net of all
related Liquidation Expenses paid therefrom) received in respect of any
Mortgage Loan (other than Liquidation Proceeds that are received in
connection with a purchase by the Master Servicer or a Majority
Certificateholder of the Controlling Class of, or an exchange by the Sole
Certificateholder of all the Certificates for, all of the Mortgage Loans
and any REO Properties in the Trust Fund and that are required to be
deposited in the Distribution Account pursuant to Section 9.01);
(v) any amounts required to be deposited by the Master Servicer
pursuant to Section 3.06 in connection with losses incurred with respect
to Permitted Investments of funds held in the Collection Account;
(vi) any amounts required to be deposited by the Master Servicer
or the Special Servicer pursuant to Section 3.07(b) in connection with
losses resulting from a deductible clause in a blanket or master single
interest policy;
(vii) any amounts required to be transferred from the REO Account
pursuant to Section 3.16(c); and
(viii) any amounts representing payments made by Borrowers that
are allocable to cover items in respect of which Servicing Advances have
been made.
The foregoing requirements for deposit in the Collection Account
shall be exclusive. Without limiting the generality of the foregoing, (A) actual
payments from Borrowers in the nature of Escrow Payments, and amounts that the
Master Servicer and the Special Servicer are entitled to retain as additional
servicing compensation pursuant to Section 3.11(b) and Section 3.11(d),
respectively, need not be deposited by the Master Servicer in the Collection
Account and (B) with respect to any amount representing a sub-servicing fee
(including, without limitation, a Primary Servicing Fee, if applicable) that
otherwise would be required to be deposited by the Master Servicer in the
Collection Account and that, once so deposited, would have been permitted to be
withdrawn immediately from the Collection Account pursuant to Section 3.05 as
part of the payment of the Master Servicing Fee, such amount shall be deemed to
have been deposited to and withdrawn from
-96-
<PAGE>
the Collection Account for such purpose to the extent that such sum has been
retained by the Sub-Servicer pursuant to the related Sub-Servicing Agreement.
If the Master Servicer shall deposit in the Collection Account any amount not
required to be deposited therein, it may at any time withdraw such amount from
the Collection Account, any provision herein to the contrary notwithstanding.
The Master Servicer shall promptly deliver to the Special Servicer, as
additional special servicing compensation in accordance with Section 3.11(d),
assumption fees, modification fees, Net Default Charges and similar fees
(excluding Prepayment Premiums) received by the Master Servicer with respect to
Specially Serviced Mortgage Loans. The Collection Account shall be maintained as
a segregated account, separate and apart from trust funds created for mortgage
pass-through certificates of other series serviced and the other accounts of the
Master Servicer.
Upon receipt of any of the amounts described in clauses (i)
through (iv) above with respect to any Mortgage Loan, the Special Servicer shall
promptly, but in no event later than two (2) Business Days after receipt, remit
such amounts to the Master Servicer for deposit into the Collection Account in
accordance with the second preceding paragraph, unless the Special Servicer
determines, consistent with the Servicing Standard, that a particular item
should not be deposited because of a restrictive endorsement or other
appropriate reason. With respect to any such amounts paid by check to the order
of the Special Servicer, the Special Servicer shall endorse such check to the
order of the Master Servicer and shall deliver promptly, but in no event later
than two (2) Business Days after receipt, any such check to the Master Servicer
by overnight courier, unless the Special Servicer determines, consistent with
the Servicing Standard, that a particular item cannot be so endorsed and
delivered because of a restrictive endorsement or other appropriate reason. Any
such amounts received by the Special Servicer with respect to an REO Property
shall be deposited by the Special Servicer into the REO Account and remitted to
the Master Servicer for deposit into the Collection Account pursuant to Section
3.16(c).
(b) The Trustee shall establish and maintain one or more trust
accounts (collectively, the "Distribution Account"), to be held in trust for the
benefit of the Certificateholders. Each account that constitutes the
Distribution Account shall be an Eligible Account. The Trustee shall establish
and maintain two sub-accounts of the Distribution Account (i) one of which sub-
accounts (such sub-account, the "REMIC Sub-Account") shall be deemed to be held
in trust for the benefit of the Holders of the REMIC III Regular Certificates
and the Residual Certificates and (ii) one of which sub-accounts (such
sub-account, the "Class Y Sub-Account") shall be deemed to be held in trust for
the benefit of the Holders of the Class Y Certificates. By 2:00 p.m. (New York
City time) on each Master Servicer Remittance Date, the Master Servicer shall
deliver to the Trustee, for deposit in the Distribution Account, an aggregate
amount of immediately available funds equal to the Master Servicer Remittance
Amount for such Master Servicer Remittance Date. Immediately upon deposit of the
Master Servicer Remittance Amount for any Master Servicer Remittance Date into
the Distribution Account, any portion thereof that represents any Additional
Interest related to the ARD Loans shall be deemed to have been deposited into
the Class Y Sub-Account, and the remaining portion thereof shall be deemed to
have been deposited into the REMIC Sub-Account. If, at 3:00 p.m., New York City
time, on any Master Servicer Remittance Date, the Trustee has not received the
Master Servicer Remittance Amount, the Trustee shall provide notice to the
Master Servicer in the same manner as required by Section 4.03(a) hereof with
respect to P&I Advances.
-97-
<PAGE>
In addition, subject to Section 3.04(c), the Master Servicer
shall, as and when required hereunder, deliver to the Trustee for deposit in the
Distribution Account:
(i) any P&I Advances required to be made by the Master
Servicer in accordance with Section 4.03(a); and
(ii) any amounts required to be deposited by the Master
Servicer pursuant to Section 3.19(e) in connection with Prepayment
Interest Shortfalls.
Furthermore, any Liquidation Proceeds paid by the Master Servicer,
a Majority Certificateholder of the Controlling Class or a Sole
Certificateholder in connection with the purchase of, or the exchange of all the
Certificates for, all of the Mortgage Loans and any REO Properties pursuant to
Section 9.01, exclusive of the portion of such Liquidation Proceeds required to
be deposited in the Collection Account pursuant to Section 9.01, shall be
deposited in the Distribution Account.
The Trustee shall, upon receipt, deposit in the Distribution
Account any and all amounts received or advanced by the Trustee that are
required by the terms of this Agreement to be deposited therein.
(c) The Trustee shall establish and maintain one or more accounts
(collectively, the "Interest Reserve Account") to be held in trust for the
benefit of the Certificateholders. Each account that constitutes the Interest
Reserve Account shall be an Eligible Account. On the Distribution Date in
January (except during a leap year) and February of each calendar year,
commencing in 2000, prior to any distributions being made in respect of the
Certificates on such Distribution Date, the Trustee shall, with respect to each
Interest Reserve Loan, withdraw from the Distribution Account and deposit in the
Interest Reserve Account an amount equal to the Interest Reserve Amount, if any,
in respect of such Interest Reserve Loan for such Distribution Date; provided
that no such transfer of monies from the Distribution Account to the Interest
Reserve Account shall be made on the Final Distribution Date.
(d) Funds in the Collection Account may be invested in Permitted
Investments in accordance with the provisions of Section 3.06. Funds in the
Distribution Account and the Interest Reserve Account shall remain uninvested.
The Master Servicer shall give notice to the other parties hereto of the
location of the Collection Account as of the Closing Date and of the new
location of each of the Collection Account prior to any change thereof. The
Trustee shall give notice to the other parties hereto of the location of each of
the Distribution Account and Interest Reserve Account as of the Closing Date and
of the new location of each of the Distribution Account and Interest Reserve
Account prior to any change thereof.
-98-
<PAGE>
SECTION 3.05. Permitted Withdrawals From the Collection Account,
the Distribution Account and the Interest Reserve
Account.
(a) The Master Servicer may, from time to time, make withdrawals
from the Collection Account for any of the following purposes (the order set
forth below not constituting an order of priority for such withdrawals):
(i) to remit to the Trustee for deposit in the Distribution
Account the Master Servicer Remittance Amount for and, to the extent
permitted or required by Section 4.03(a), any P&I Advances to be made on
each Master Servicer Remittance Date;
(ii) to reimburse the Trustee or the Master Servicer, as
applicable, in that order, for unreimbursed P&I Advances made thereby in
respect of any Mortgage Loan or REO Loan, the Trustee's and the Master
Servicer's respective rights to reimbursement pursuant to this clause
(ii) with respect to any P&I Advance being payable from, and limited to,
amounts that represent Late Collections of interest and principal (net of
related Workout Fees and/or Liquidation Fees payable therefrom) received
in respect of the particular Mortgage Loan or REO Loan as to which such
P&I Advance was made;
(iii) to pay to the Master Servicer earned and unpaid Master
Servicing Fees in respect of each Mortgage Loan and REO Loan, the Master
Servicer's right to payment pursuant to this clause (iii) with respect to
any Mortgage Loan or REO Loan being limited to amounts received on or in
respect of such Mortgage Loan (whether in the form of payments,
Liquidation Proceeds or Insurance Proceeds) or such REO Loan (whether in
the form of REO Revenues, Liquidation Proceeds or Insurance Proceeds)
that are allocable as interest thereon;
(iv) to pay to the Special Servicer, out of general collections on
the Mortgage Loans and any REO Properties, earned and unpaid Special
Servicing Fees in respect of each Specially Serviced Mortgage Loan and
REO Loan;
(v) to pay to the Special Servicer earned and unpaid Workout Fees
and Liquidation Fees to which it is entitled pursuant to, and from the
sources contemplated by, Section 3.11(c);
(vi) to reimburse the Trustee, first, and the Master Servicer and
the Special Servicer, on a pari passu basis, for any unreimbursed
Servicing Advances made thereby with respect to any Mortgage Loan or REO
Property, the Trustee's, the Special Servicer's and the Master Servicer's
respective rights to reimbursement pursuant to this clause (vi) with
respect to any Servicing Advance being payable from, and limited to, (A)
payments made by the related Borrower that are allocable to cover the
item in respect of which such Servicing Advance was made, and (B)
Liquidation Proceeds (net of Liquidation Fees payable therefrom),
Insurance Proceeds and, if applicable, REO Revenues received in respect
of the particular Mortgage Loan or REO Property as to which such
Servicing Advance was made;
-99-
<PAGE>
(vii) to reimburse the Trustee, first, and the Master Servicer and
the Special Servicer, on a pari passu basis, out of general collections
on the Mortgage Loans and any REO Properties, for any unreimbursed
Advances made thereby with respect to any Mortgage Loan, REO Loan or REO
Property that have been determined to be Nonrecoverable Advances;
provided that, if the aggregate Stated Principal Balance of the Mortgage
Pool (calculated without regard to any Specially Serviced Mortgage Loan
or REO Loan) is less than 5.0% of the Initial Pool Balance, and if either
the Master Servicer or the Special Servicer has determined that any
future Advances with respect to any particular Mortgage Loan or REO
Property would constitute Nonrecoverable Advances and has so notified the
other such party, then all future Advances thereafter made by the Master
Servicer or the Special Servicer with respect to such Mortgage Loan or
REO Property, as the case may be, and reimbursable pursuant to this
clause (vii) shall be so reimbursable on a pari passu basis as between
the Master Servicer and the Special Servicer only after all other
Nonrecoverable Advances made prior to such determination and notice with
respect to such Mortgage Loan or REO Property, as the case may be, and
reimbursable pursuant to this clause (vii) have been reimbursed in
accordance herewith without regard to this proviso;
(viii) to pay the Trustee, first, and the Master Servicer and the
Special Servicer, on a pari passu basis, any Advance Interest due and
owing thereto, the Trustee's, the Special Servicer's and the Master
Servicer's respective rights to payment pursuant to this clause (viii)
being payable solely from Default Charges collected in respect of the
Mortgage Loan or REO Loan as to which the related Advances were made;
(ix) at or following such time as the Master Servicer reimburses
itself, the Special Servicer or the Trustee, as applicable, for any
unreimbursed Advance pursuant to clause (ii), (vi) or (vii) above or
Section 3.03, and insofar as payment has not already been made pursuant
to clause (viii) above, to pay the Trustee, the Master Servicer or the
Special Servicer, as the case may be, and in that order, out of general
collections on the Mortgage Loans and any REO Properties, any related
Advance Interest accrued and payable on such Advance;
(x) to pay the Master Servicer, as additional servicing
compensation in accordance with Sections 3.06(b) and 3.11(b), any Net
Investment Earnings in respect of amounts held in the Collection Account
for any Collection Period;
(xi) to pay the Master Servicer, as additional servicing
compensation in accordance with Section 3.11(b), (A) any Prepayment
Interest Excesses collected on all the Mortgage Loans (but only to the
extent that all such Prepayment Interest Excesses collected during any
Collection Period exceed all Prepayment Interest Shortfalls incurred with
respect to the Mortgage Loans during such Collection Period) and (B) any
Net Default Charges collected on any Mortgage Loan and allocable to the
period that it was not a Specially Serviced Mortgage Loan or REO Loan;
and to pay the Special Servicer, as additional servicing compensation in
accordance with Section 3.11(d), any Net Default Charges collected on any
Mortgage Loan to the extent allocable to the period that such Mortgage
Loan is a Specially Serviced Mortgage Loan or REO Loan;
-100-
<PAGE>
(xii) to reimburse, out of general collections on the Mortgage
Loans and any REO Properties, the Master Servicer, the Special Servicer,
the Depositor, or any of their respective directors, officers, employees
and agents any amounts reimbursable to any such Person pursuant to
Section 6.03, or to pay directly to any third party any amount which if
paid by any such Person would be reimbursable thereto pursuant to Section
6.03;
(xiii) to pay, out of general collections on the Mortgage Loans
and any REO Properties, for (A) the reasonable costs of the advice of
counsel contemplated by Section 3.17(a), (B) the reasonable costs of the
Opinions of Counsel contemplated by Sections 3.09(b)(ii) and 3.16(a), (C)
the reasonable costs of Appraisals obtained pursuant to Section 3.11(g)
or 4.03(c), (D) the reasonable costs of obtaining any REO Extension
sought by the Special Servicer as contemplated by Section 3.16(a), and
(E) the cost of recording this Agreement in accordance with Section
11.02(a);
(xiv) to pay itself, the Special Servicer, the Majority
Certificateholder of the Controlling Class, Llama, SBRC or any other
Person, as the case may be, with respect to each Mortgage Loan, if any,
previously purchased by such Person pursuant to this Agreement, all
amounts received thereon subsequent to the date of purchase;
(xv) to pay the Trustee, the Tax Administrator or any of their
respective directors, officers, employees and agents, as the case may be,
any amounts payable or reimbursable to any such Person pursuant to
Sections 8.05(b) and 10.03;
(xvi) to pay (A) any costs and expenses contemplated in Section
3.11(h), the last sentence of Section 7.02 and the last sentence of
Section 8.08(a) and (B) the cost of any remedial, corrective or other
further action contemplated by clause (i) and/or clause (ii) of Section
3.09(c);
(xvii) to reimburse out of the Collection Account the expenses
incurred by the Trustee pursuant to Section 3.23(b) and Section 3.24(a);
and
(xviii) to clear and terminate the Collection Account at the
termination of this Agreement pursuant to Section 9.01.
If amounts on deposit in the Collection Account at any particular
time (after withdrawing any portion of such amounts deposited in the Collection
Account in error) are insufficient to satisfy all payments, reimbursements and
remittances to be made therefrom as set forth in clauses (ii) through (xvii)
above, then the corresponding withdrawals from the Collection Account shall be
made in the following priority and subject to the following rules: (A) if the
payment, reimbursement or remittance is to be made from a specific source of
funds, then such payment, reimbursement or remittance shall be made from that
specific source of funds on a pro rata basis with any and all other payments,
reimbursements and remittances to be made from such specific source of funds,
provided that where, as in clauses (ii), (vi) and (viii), an order of priority
is set forth to govern the application of funds withdrawn from the Collection
Account pursuant to such clauses, payments, reimbursements or remittances
pursuant to any such clause shall be made in such order of priority to the
extent of available funds; and (B) if the payment, reimbursement or remittance
can be
-101-
<PAGE>
made from any funds on deposit in the Collection Account, then (following any
withdrawals made from the Collection Account in accordance with the immediately
preceding clause (A) above) such payment, reimbursement or remittance shall be
made from such general funds remaining on a pro rata basis with any and all
other payments, reimbursements or remittances to be made from such general
funds, provided that where, as in clauses (vii) and (ix), an order of priority
is set forth to govern the application of funds withdrawn from the Collection
Account pursuant to such clauses, payments, reimbursements or remittances
pursuant to any such clause shall be made in such order of priority to the
extent of available funds.
The Master Servicer shall keep and maintain separate accounting
records, on a loan- by-loan and property-by-property basis when appropriate, in
connection with any withdrawal from the Collection Account pursuant to clauses
(ii) through (xvii) above.
The Master Servicer shall pay to the Special Servicer (or to third
party contractors at the direction of the Special Servicer) from the Collection
Account amounts permitted to be paid to it (or to such third party contractors)
therefrom promptly upon receipt of a certificate of a Servicing Officer of the
Special Servicer describing the item and amount to which the Special Servicer
(or such third party contractors) is entitled. The Master Servicer may rely
conclusively on any such certificate and shall have no duty to re-calculate the
amounts stated therein. The Special Servicer shall keep and maintain separate
accounting for each Specially Serviced Mortgage Loan and REO Property, on a
loan-by-loan and property-by-property basis, for the purpose of justifying any
request for withdrawal from the Collection Account.
(b) The Trustee may, from time to time, make withdrawals from the
Distribution Account for any of the following purposes (the order set forth
below not constituting an order of priority for such withdrawals):
(i) to make distributions to Certificateholders on each
Distribution Date pursuant to Section 4.01;
(ii) to pay the Trustee accrued and unpaid Trustee Fees pursuant
to Section 8.05(a);
(iii) to pay the Trustee, the Tax Administrator or any of their
respective directors, officers, employees and agents, as the case may be,
any amounts payable or reimbursable to any such Person pursuant to
Sections 8.05(b) and 10.03;
(iv) as contemplated by Section 11.01(g), to pay for the
reasonable costs of the Opinions of Counsel sought by the Trustee as
contemplated by Section 11.01(a) or 11.01(c) in connection with any
amendment to this Agreement requested by the Trustee which amendment is
in furtherance of the rights and interests of Certificateholders;
(v) to transfer Interest Reserve Amounts in respect of the
Interest Reserve Loans to the Interest Reserve Account as and when
required by Section 3.04(c);
-102-
<PAGE>
(vi) to (A) pay for the reasonable costs of the Opinions of
Counsel sought by the Trustee as contemplated by Section 11.02(a), (B)
pay any and all federal, state and local taxes imposed on any REMIC Pool
or on the assets or transactions of such REMIC Pool, together with all
incidental costs and expenses, and any and all reasonable expenses
relating to tax audits, if and to the extent that either (1) none of the
Trustee, the Master Servicer, the Special Servicer or the Tax
Administrator is liable therefor pursuant to Section 10.01(d) and/or
Section 10.01(h) or (2) any such Person that may be so liable has failed
to timely make the required payment, and (C) reimburse the Tax
Administrator for reasonable expenses incurred by and reimbursable to it
by the Trust pursuant to Section 10.01(d) and/or Section 10.01(g); and
(vii) to clear and terminate the Distribution Account at the
termination of this Agreement pursuant to Section 9.01.
(c) On each Master Servicer Remittance Date in March, the Trustee
shall withdraw from the Interest Reserve Account and deposit in the Distribution
Account all Interest Reserve Amounts in respect of the Interest Reserve Loans
then on deposit in the Interest Reserve Account.
SECTION 3.06. Investment of Funds in the Collection Account, the
REO Account, the Servicing Accounts and the Reserve
Accounts.
(a) The Master Servicer may direct any depository institution
maintaining the Collection Account or, subject to applicable law and the related
loan documents, any Servicing Account or Reserve Account, and the Special
Servicer may direct any depository institution maintaining the REO Account, to
invest, or if it is such depository institution, may itself invest, the funds
held therein (each such account, for purposes of this Section 3.06, an
"Investment Account") in one or more Permitted Investments bearing interest or
sold at a discount, and maturing, unless payable on demand, no later than the
Business Day immediately preceding the next succeeding date on which such funds
are required to be withdrawn from such account pursuant to this Agreement. All
such Permitted Investments shall be held to maturity, unless payable on demand,
in which case such investments may be sold at any time. Any investment of funds
in an Investment Account shall be made in the name of the Trustee for the
benefit of the Certificateholders (in its capacity as such). The Master Servicer
(with respect to Permitted Investments of amounts in the Collection Account, a
Servicing Account or a Reserve Account) and the Special Servicer (with respect
to Permitted Investments of amounts in the REO Account) acting on behalf of the
Trustee, shall (and Trustee hereby designates the Master Servicer and the
Special Servicer, as applicable, as the Person that shall) (i) be the
"entitlement holder" of any Permitted Investment that is a "security
entitlement" and (ii) maintain "control" of any Permitted Investment that is
either a "certificated security" or an "uncertificated security". For purposes
of this Section 3.06(a), the terms "entitlement holder", "security entitlement",
"control", "certificated security" and "uncertificated security" shall have the
meanings given such terms in Revised Article 8 (1994 Revision) of the UCC, and
"control" of any Permitted Investment by the Master Servicer or the Special
Servicer shall constitute "control" by a Person designated by, and acting on
behalf of, the Trustee for purposes of Revised Article 8 (1994 Revision) of the
UCC. If amounts on deposit in an Investment Account are at any time invested in
a Permitted Investment payable on demand, the Master Servicer (in the case of
the Collection
-103-
<PAGE>
Account, a Servicing Account or a Reserve Account) or the Special Servicer (in
the case of the REO Account) shall:
(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such Permitted
Investment may otherwise mature hereunder in an amount equal to the
lesser of (1) all amounts then payable thereunder and (2) the amount
required to be withdrawn on such date; and
(y) demand payment of all amounts due thereunder promptly upon
determination by the Master Servicer or the Special Servicer, as the case
may be, that such Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in the Investment
Account.
(b) Whether or not the Master Servicer directs the investment of
funds in the Collection Account, a Servicing Account or a Reserve Account,
interest and investment income realized on funds deposited therein, to the
extent of the Net Investment Earnings, if any, for such Investment Account for
each Collection Period (and, further to the extent that, in the case of a
Servicing Account or a Reserve Account, such interest or investment income is
not otherwise required to be paid to the related Borrower in accordance with
applicable law and/or the related loan documents), shall be for the sole and
exclusive benefit of the Master Servicer and shall be subject to its withdrawal
in accordance with Section 3.05(a). Whether or not the Special Servicer directs
the investment of funds in the REO Account, interest and investment income
realized on funds deposited therein, to the extent of the Net Investment
Earnings, if any, for such Investment Account for each Collection Period, shall
be for the sole and exclusive benefit of the Special Servicer and shall be
subject to its withdrawal in accordance with Section 3.16(b). If any loss shall
be incurred in respect of any Permitted Investment on deposit in any Investment
Account (other than a loss of what would otherwise have constituted investment
earnings), the Master Servicer (in the case of the Collection Account, a
Servicing Account or a Reserve Account) or the Special Servicer (in the case of
the REO Account) shall, if the Permitted Investment had been for its benefit,
promptly deposit therein from its own funds, without right of reimbursement, no
later than the end of the Collection Period during which such loss was incurred,
the amount of the Net Investment Loss, if any, for such Collection Period. The
Trustee shall have no liability whatsoever with respect to any such losses,
except to the extent that it is the obligor on any such Permitted Investment.
(c) Except as otherwise expressly provided in this Agreement, if
any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment and the Master Servicer or the Special Servicer, as
applicable, has not taken such action, the Trustee may and, subject to Section
8.02, upon the request of Holders of Certificates entitled to not less than 25%
of the Voting Rights allocated to any Class, shall take such action as may be
appropriate to enforce such payment or performance, including, without
limitation, the institution and prosecution of appropriate proceedings.
(d) Amounts on deposit in the Distribution Account and the
Interest Reserve Account shall remain uninvested.
-104-
<PAGE>
(e) Notwithstanding the investment of funds held in any Investment
Account, for purposes of the calculations hereunder, including, without
limitation, the calculation of the Available Distribution Amount and the Master
Servicer Remittance Amount, the amounts so invested (but not any interest earned
thereon) shall be deemed to remain on deposit in such Investment Account.
SECTION 3.07. Maintenance of Insurance Policies; Errors and
Omissions and Fidelity Coverage.
(a) Each of the Master Servicer and the Special Servicer shall, as
to those Mortgage Loans it is obligated to service hereunder, use reasonable
efforts in accordance with the Servicing Standard to cause the related Borrower
to maintain (and, if the related Borrower does not so maintain, the Master
Servicer (even in the case of Specially Serviced Mortgage Loans) shall itself
maintain (subject to the provisions of this Agreement regarding Nonrecoverable
Advances, and further subject to Section 3.11(h) hereof, and to the extent the
Trustee, as mortgagee on behalf of the Certificateholders, has an insurable
interest and to the extent available at commercially reasonable rates) all
insurance coverage as is required under the related Mortgage (subject to
applicable law); provided that if any Mortgage permits the holder thereof to
dictate to the Borrower the insurance coverage to be maintained on such
Mortgaged Property, the Master Servicer or the Special Servicer, as appropriate,
shall impose such insurance requirements as are consistent with the Servicing
Standard. The Special Servicer shall cause to be maintained for each REO
Property, in each case with an insurer that possesses (or whose obligations are
guaranteed or backed, in writing, by an entity having) the Required
Claims-Paying Ratings at the time such policy is purchased, no less insurance
coverage than was previously required of the related Borrower under the related
Mortgage and, if the related Mortgage did not so require, hazard insurance,
public liability insurance, business interruption or rent loss insurance and, to
the extent consistent with the Servicing Standard, flood and earthquake
insurance, all in such amounts as are consistent with the Servicing Standard,
and the Special Servicer shall be reimbursed for the premium costs thereof as a
Servicing Advance pursuant to and to the extent permitted under Section 3.05(a).
All such insurance policies shall contain a "standard" mortgagee clause, with
loss payable to the Master Servicer (in the case of insurance maintained in
respect of the Mortgaged Properties) or the Special Servicer (in the case of
insurance maintained in respect of REO Properties) on behalf of the Trustee,
shall be issued by an insurer authorized under applicable law to issue such
insurance, and, unless prohibited by the related Mortgage, may contain a
deductible clause (not in excess of a customary amount). Any amounts collected
by the Master Servicer or Special Servicer under any such policies (other than
amounts to be applied to the restoration or repair of the related Mortgaged
Property or REO Property or amounts to be released to the related Borrower, in
each case in accordance with the Servicing Standard) shall be deposited in the
Collection Account, subject to withdrawal pursuant to Section 3.05(a), in the
case of amounts received in respect of a Mortgage Loan, or in the REO Account,
subject to withdrawal pursuant to Section 3.16(c), in the case of amounts
received in respect of an REO Property. Any cost incurred by the Master Servicer
or the Special Servicer, as applicable, in maintaining any such insurance shall
not, solely for purposes hereof, including, without limitation, calculating
monthly distributions to Certificateholders, be added to the unpaid principal
balance or Stated Principal Balance of the related Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so permit; provided,
however, that this provision is in no way intended to affect amounts due and
owing from the related Borrower under such Mortgage Loan.
-105-
<PAGE>
(b) (i) If the Master Servicer or the Special Servicer shall
obtain and maintain a blanket policy insuring against hazard losses on
any or all of the Mortgaged Properties (in the case of the Master
Servicer) or REO Properties (in the case of the Special Servicer), then,
to the extent such policy (i) is obtained from a Qualified Insurer that
possesses (or whose obligations are guaranteed or backed, in writing, by
an entity having) the Required Claims- Paying Ratings, and (ii) provides
protection equivalent to the individual policies otherwise required, the
Master Servicer or the Special Servicer, as the case may be, shall
conclusively be deemed to have satisfied its obligation to cause hazard
insurance to be maintained on the Mortgaged Properties or REO Properties,
as applicable, so covered, and the premium costs thereof shall be, if and
to the extent they are specifically attributable either to a specific
Mortgaged Property during any period that the related Borrower has failed
to maintain the hazard insurance required under the related Mortgage Loan
in respect of such Mortgaged Property or to a specific REO Property, a
Servicing Advance reimbursable pursuant to and to the extent permitted
under Section 3.05(a); provided that, to the extent that such premium
costs are attributable to properties other than Mortgaged Properties
and/or REO Properties or are attributable to Mortgaged Properties as to
which the hazard insurance required under the related Mortgage Loan is
being maintained, they shall be borne by the Master Servicer or Special
Servicer, as the case may be, without right of reimbursement. Such a
blanket policy may contain a deductible clause (not in excess of a
customary amount), in which case the Master Servicer or the Special
Servicer, as appropriate, shall, if there shall not have been maintained
on the related Mortgaged Property or REO Property, as applicable, a
hazard insurance policy complying with the requirements of Section
3.07(a), and there shall have been one or more losses which would have
been covered by such property specific policy (taking into account any
deductible clause that would have been permitted therein), promptly
deposit into the Collection Account from its own funds (without right of
reimbursement) the amount of such losses up to the difference between the
amount of the deductible clause in such blanket policy and the amount of
any deductible clause that would have been permitted under such property
specific policy. The Master Servicer and the Special Servicer each agree
to prepare and present, on behalf of itself, the Trustee and the
Certificateholders, claims under any such blanket policy maintained by it
in a timely fashion in accordance with the terms of such policy.
(ii) If the Master Servicer shall cause any Mortgaged Property or
the Special Servicer shall cause any REO Property to be covered by a
master single interest insurance policy naming the Master Servicer or the
Special Servicer, as applicable, on behalf of the Trustee as the loss
payee, then to the extent such policy (i) is obtained from a Qualified
Insurer that possesses (or whose obligations are guaranteed or backed, in
writing, by an entity having) the Required Claims-Paying Ratings and (ii)
provides protection equivalent to the individual policies otherwise
required, the Master Servicer or the Special Servicer, as applicable,
shall conclusively be deemed to have satisfied its obligation to cause
such insurance to be maintained on such Mortgaged Property (in the case
of the Master Servicer) or REO Property (in the case of the Special
Servicer). If the Master Servicer shall cause any Mortgaged Property as
to which the related Borrower has failed to maintain the required
insurance coverage, or the Special Servicer shall cause any REO Property,
to be covered by such master single interest insurance policy, then the
incremental costs of such insurance applicable to such Mortgaged Property
or REO Property (i.e., other than any minimum or
-106-
<PAGE>
standby premium payable for such policy whether or not any Mortgaged
Property or REO Property is covered thereby) paid by the Master Servicer
or the Special Servicer, as applicable, shall constitute a Servicing
Advance. The Master Servicer shall, consistent with the Servicing
Standard and the terms of the related Mortgage Loan documents, pursue the
related Borrower for the amount of such incremental costs. All other
costs associated with any such master single interest insurance policy
(including, without limitation, any minimum or standby premium payable
for such policy) shall be borne by the Master Servicer or Special
Servicer, as the case may be, without right of reimbursement. Such master
single interest insurance policy may contain a deductible clause (not in
excess of a customary amount), in which case the Master Servicer or the
Special Servicer, as applicable, shall, in the event that there shall not
have been maintained on the related Mortgaged Property or REO Property,
as the case may be, a policy otherwise complying with the provisions of
Section 3.07(a), and there shall have been one or more losses which would
have been covered by such property specific policy had it been
maintained, promptly deposit into the Collection Account from its own
funds (without right of reimbursement) the amount not otherwise payable
under the master single interest policy because of such deductible
clause, to the extent that any such deductible exceeds the deductible
limitation that pertained to the related Mortgage Loan, or, in the
absence of any such deductible limitation, the deductible limitation
which is consistent with the Servicing Standard.
(c) On or before the Closing Date, with respect to the Mortgage
Loans identified on the Mortgage Loan Schedule by loan numbers LC 3272, LC 3297,
LC 3339, LC 3377, LC 3755, LC 3857 and LC 3907 (the "Environmentally Insured
Loans"), the related Mortgage Loan Seller shall notify the insurer under the
related Environmental Insurance Policy and take all other action necessary for
the Trustee, on behalf of the Certificateholders, to be an insured (and for the
Master Servicer, on behalf of the Trust, to make claims) under such Insurance
Policy. In the event that the Master Servicer has actual knowledge of any event
(an "Insured Event") giving rise to a claim under any Environmental Insurance
Policy in respect of any Environmentally Insured Loan for which the Borrower has
not filed a claim, the Master Servicer shall, in accordance with the terms of
such Insurance Policy and the Servicing Standard, timely make a claim thereunder
with the appropriate insurer and take all other actions necessary under such
Insurance Policy in order to realize the full value thereof for the benefit of
the Certificateholders. With respect to each Environmental Insurance Policy in
respect of an Environmentally Insured Loan, the Master Servicer shall review and
familiarize itself with the terms and conditions relating to enforcement of
claims and shall monitor the dates by which any claim must be made or any action
must be taken under such policy to realize the full value thereof for the
benefit of the Certificateholders in the event the Master Servicer has actual
knowledge of an Insured Event giving rise to a claim under such policy.
The Master Servicer shall abide by the terms and conditions
precedent to payment of claims under the Environmental Insurance Policies with
respect to the Environmentally Insured Loans and take all such action as may be
required to comply with the terms and provisions of such policies in order to
maintain such policies in full force and effect and to make claims thereunder.
-107-
<PAGE>
In the event that the Master Servicer receives notice of any
termination of any Environmental Insurance Policy with respect to an
Environmentally Insured Loan, the Master Servicer shall, within five Business
Days after receipt of such notice, notify the Special Servicer, the Controlling
Class Representative, the Rating Agencies and the Trustee of such termination in
writing. Upon receipt of such notice, the Master Servicer shall address such
termination in accordance with Section 3.07(a). Any legal fees, premiums or
other out of pocket costs incurred in accordance with the Servicing Standard in
connection with enforcing the obligations of the Borrower under any
Environmental Insurance Policy or in connection with a resolution of such
termination of an Environmental Insurance Policy shall be paid by the Master
Servicer and shall be reimbursable to it as a Servicing Advance.
Without limiting its obligations hereunder with respect to any
other Mortgage Loan, the Master Servicer shall monitor the actions, and enforce
the obligations, of the related Borrower under each Environmentally Insured Loan
insofar as such actions/obligations relate to (i) to the extent consistent with
Section 3.07(a), the maintenance (including, without limitation, any required
renewal) of an Environmental Insurance Policy with respect to the related
Mortgaged Property or (ii) environmental testing or remediation at the related
Mortgaged Property.
(d) Each of the Master Servicer and the Special Servicer shall at
all times during the term of this Agreement keep in force with recognized
insurers that possess (or whose obligations are guaranteed or backed, in
writing, by entities having) the Required Claims-Paying Ratings, a fidelity bond
in such form and amount as would permit it to be a qualified Fannie Mae or
Freddie Mac seller-servicer of multifamily mortgage loans. Each of the Master
Servicer and the Special Servicer shall be deemed to have complied with the
foregoing provision if an Affiliate thereof has such fidelity bond coverage and,
by the terms of such fidelity bond, the coverage afforded thereunder extends to
the Master Servicer or the Special Servicer, as the case may be.
In addition, each of the Master Servicer and the Special Servicer
shall at all times during the term of this Agreement keep in force with
recognized insurers that possess (or whose obligations are guaranteed or backed,
in writing, by entities having) the Required Claims-Paying Ratings, a policy or
policies of insurance covering loss occasioned by the errors and omissions of
its officers and employees in connection with its obligation to service the
Mortgage Loans for which it is responsible hereunder, which policy or policies
shall be in such form and amount as would permit it to be a qualified Fannie Mae
or Freddie Mac seller-servicer of multifamily mortgage loans.
(e) All insurance coverage required to be maintained under this
Section 3.07 shall be obtained from Qualified Insurers.
SECTION 3.08. Enforcement of Due-On-Sale Clauses; Assumption
Agreements; Subordinate Financing.
(a) As to each Mortgage Loan which contains a provision in the
nature of a "due-on-sale" clause, which by its terms:
-108-
<PAGE>
(i) provides that such Mortgage Loan shall (or may at the
mortgagee's option) become due and payable upon the sale or other
transfer of an interest in the related Mortgaged Property or of a
controlling interest in the related Borrower; or
(ii) provides that such Mortgage Loan may not be assumed without
the consent of the mortgagee in connection with any such sale or other
transfer,
then, for so long as such Mortgage Loan is included in the Trust Fund, each of
the Master Servicer and the Special Servicer shall, on behalf of the Trustee as
the mortgagee of record, as to those Mortgage Loans it is obligated to service
hereunder, exercise (or waive its right to exercise) any right it may have with
respect to such Mortgage Loan (x) to accelerate the payments thereon, or (y) to
withhold its consent to any such sale or other transfer, in a manner consistent
with the Servicing Standard, but subject to Section 3.20(a)(iv); provided that,
notwithstanding anything to the contrary contained herein, the Master Servicer
shall not waive any right it has, or grant any consent it is otherwise entitled
to withhold, under any related "due-on-sale" clause unless it first shall have
provided to the Special Servicer, at least five (5) Business Days prior to the
granting of such waiver or consent, written notice of the matter consisting of a
reasonable description of the related Borrower's request or, if no request has
been made, the relevant circumstances known to the Master Servicer (it being
acknowledged and agreed that the Special Servicer shall have the opportunity but
not the obligation to provide input with respect to such matter and, further,
that the Master Servicer shall have no obligation to follow any advice given by
the Special Servicer); and provided, further, that, notwithstanding anything to
the contrary contained herein, if the then-outstanding principal balance of the
subject Mortgage Loan (together with the then-outstanding aggregate principal
balance of all other Mortgage Loans that are cross-collateralized with the
subject Mortgage Loan or that are made to the same Borrower or to other
Borrowers that are, to the Master Servicer's or Special Servicer's, as
applicable, actual knowledge, Affiliates of the Borrower under the subject
Mortgage Loan) is more than 5.0% of the then-outstanding aggregate principal
balance of the Mortgage Pool or the subject Mortgage Loan (together with all
other Mortgage Loans that are cross-collateralized with the subject Mortgage
Loan or that are made to the same Borrower or to other Borrowers that are, to
the Master Servicer's or Special Servicer's, as applicable, actual knowledge,
Affiliates of the Borrower under the subject Mortgage Loan) represents one of
the then ten (10) largest Mortgage Loans or concentrations of related Mortgage
Loans, neither the Master Servicer nor the Special Servicer shall waive any
right it has, or grant any consent it is otherwise entitled to withhold, under
any related "due-on-sale" clause until it has obtained written confirmation from
each Rating Agency that such action shall not result in a qualification,
downgrade or withdrawal of the rating then assigned by such Rating Agency to any
Class of Certificates; and provided, further, that, notwithstanding anything to
the contrary contained herein, neither the Master Servicer nor the Special
Servicer shall waive any right it has, or grant any consent it is otherwise
entitled to withhold, under any related "due-on-sale" clause governing the
transfer of any Mortgaged Property which secures, or controlling interests in
any Borrower under, a Group of Cross-Collateralized Mortgage Loans unless all of
the Mortgaged Properties securing, or a controlling interest in all the
Borrowers (if more than one) under, such Group of Cross-Collateralized Mortgage
Loans are transferred simultaneously to the same transferee. In the event that
the Master Servicer or Special Servicer intends or is required, in accordance
with the preceding sentence, the Mortgage Loan documents or applicable law, to
permit the transfer of any Mortgaged Property, the Master Servicer or the
Special Servicer, as the case may be, may, if consistent with the Servicing
Standard, enter into a substitution of liability
-109-
<PAGE>
agreement, pursuant to which the original Borrower and any original guarantors
are released from liability, and the transferee and any new guarantors are
substituted therefor and become liable under the Mortgage Note and any related
guaranties and, in connection therewith, may require from the related Borrower a
reasonable and customary fee for the additional services performed by it,
together with reimbursement for any related costs and expenses incurred by it
(but only to the extent that charging such fee will not be a "significant
modification" of the Mortgage Loan, or result in the receipt by a REMIC Pool of
net income from a "prohibited transaction", under the REMIC Provisions). The
Master Servicer or the Special Servicer, as the case may be, shall promptly
notify the Trustee in writing of any such agreement and forward the original
thereof to the Trustee for inclusion in the related Mortgage File.
(b) As to each Mortgage Loan which contains a provision in the
nature of a "due-on-encumbrance" clause, which by its terms:
(i) provides that such Mortgage Loan shall (or may at the
mortgagee's option) become due and payable upon the creation of any
additional lien or other encumbrance on the related Mortgaged Property;
or
(ii) requires the consent of the mortgagee to the creation of any
such additional lien or other encumbrance on the related Mortgaged
Property;
then, for so long as such Mortgage Loan is included in the Trust Fund, each of
the Master Servicer and the Special Servicer shall on behalf of the Trustee as
the mortgagee of record, as to those Mortgage Loans it is obligated to service
hereunder, exercise (or waive its right to exercise) any right it may have with
respect to such Mortgage Loan (x) to accelerate the payments thereon, or (y) to
withhold its consent to the creation of any such additional lien or other
encumbrance, in a manner consistent with the Servicing Standard, but subject to
Section 3.20(a)(iv); provided that, notwithstanding anything to the contrary
contained herein, the Master Servicer shall not waive any right it has, or grant
any consent it is otherwise entitled to withhold, under any related
"due-on-encumbrance" clause unless it first shall have provided to the Special
Servicer, at least five (5) Business Days prior to the granting of such waiver
or consent, written notice of the matter consisting of a reasonable description
of the related Borrower's request or, if no request has been made, the relevant
circumstances known to the Master Servicer, and the Special Servicer shall not
have objected to the granting of such consent or waiver within such five (5)
Business Day period; and provided, further, that, notwithstanding anything to
the contrary contained herein, neither the Master Servicer nor the Special
Servicer shall waive any right it has, or grant any consent it is otherwise
entitled to withhold, under any related "due-on-encumbrance" clause until it has
obtained written confirmation from each Rating Agency that such action would not
result in the qualification, downgrade or withdrawal of the rating then assigned
by such Rating Agency to any Class of Certificates (except that the foregoing
rating confirmation will not be required from Fitch unless the subject Mortgage
Loan (together with all other Mortgage Loans that are cross-collateralized with
the subject Mortgage Loan or that are made to the same Borrower or to other
Borrowers that are, to the Master Servicer's or Special Servicer's, as
applicable, actual knowledge, Affiliates of the Borrower under the subject
Mortgage Loan) represents one of the then ten (10) largest Mortgage Loans or
concentrations of related Mortgage Loans). Notwithstanding the foregoing
limitations set forth in this Section 3.08, consent by the Master Servicer or
the Special Servicer, as the case may be, to an encumbrance which
-110-
<PAGE>
(i) is subordinate to the Mortgage, (ii) does not adversely impact the Debt
Service Coverage Ratio, and (iii) does not secure any debt of the related
Borrower, shall not require written confirmation from any Rating Agency to the
effect that such action would not result in the qualification, downgrade or
withdrawal of the rating then assigned by such Rating Agency to any Class of
Certificates; provided, however, that the consent by the Master Servicer or the
Special Servicer, as the case may be, to such an encumbrance shall be consistent
with the Servicing Standard.
(c) Nothing in this Section 3.08 shall constitute a waiver of the
Trustee's right, as the mortgagee of record, to receive notice of any assumption
of a Mortgage Loan, any sale or other transfer of the related Mortgaged Property
or the creation of any additional lien or other encumbrance with respect to such
Mortgaged Property.
SECTION 3.09. Realization Upon Defaulted Mortgage Loans.
(a) The Special Servicer shall, subject to subsections (b) through
(d) of this Section 3.09, exercise best efforts, consistent with the Servicing
Standard, to foreclose upon or otherwise comparably convert (which may include
an REO Acquisition) the ownership of properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments, and which are
not released from the Trust Fund pursuant to any other provision hereof, if the
Special Servicer determines, consistent with the Servicing Standard, that such
action would be in the best economic interest of the Trust; provided that
neither the Master Servicer nor the Special Servicer shall, with respect to any
ARD Loan after its Anticipated Repayment Date, take any enforcement action with
respect to the payment of Additional Interest (other than the making of requests
for its collection) unless (i) the taking of an enforcement action with respect
to the payment of other amounts due under such Mortgage Loan is, in the good
faith and reasonable judgment of the Special Servicer, and without regard to
such Additional Interest, also necessary, appropriate and consistent with the
Servicing Standard or (ii) all other amounts due under such Mortgage Loan have
been paid, the payment of such Additional Interest has not been forgiven in
accordance with Section 3.20 and, in the good faith and reasonable judgment of
the Special Servicer, the Liquidation Proceeds expected to be recovered in
connection with such enforcement action will cover the anticipated costs of such
enforcement action and, if applicable, any associated Advance Interest. The
Special Servicer shall advance or direct the Master Servicer to advance, as
contemplated by Section 3.19(d), all costs and expenses to be incurred on behalf
of the Trust in any such proceedings, subject to each of the Master Servicer and
the Special Servicer being entitled to reimbursement for any such advance as a
Servicing Advance as provided in Section 3.05(a), and further subject to the
Special Servicer's being entitled to pay out of the related Liquidation Proceeds
any Liquidation Expenses incurred in respect of any Mortgage Loan, which
Liquidation Expenses were outstanding at the time such proceeds are received. In
connection with the foregoing, in the event of a default under any Mortgage Loan
or Group of Cross-Collateralized Mortgage Loans that are secured by real
properties located in multiple states, and such states include the State of
California or another state with a statute, rule or regulation comparable to the
State of California's "one action" rule, then the Special Servicer shall consult
with Independent counsel regarding the order and manner in which the Special
Servicer should foreclose upon or comparably proceed against such properties
(the cost of such consultation to be advanced by the Master Servicer as a
Servicing Advance, at the direction of the Special Servicer, subject to the
Master Servicer's being entitled to reimbursement therefor as a Servicing
Advance as provided in
-111-
<PAGE>
Section 3.05(a)). When applicable state law permits the Special Servicer to
select between judicial and non-judicial foreclosure in respect of any Mortgaged
Property, the Special Servicer shall make such selection in a manner consistent
with the Servicing Standard. Nothing contained in this Section 3.09 shall be
construed so as to require the Special Servicer, on behalf of the Trust, to make
an offer on any Mortgaged Property at a foreclosure sale or similar proceeding
that is in excess of the fair market value of such property, as determined by
the Special Servicer in its reasonable and good faith judgment taking into
account the factors described in Section 3.18(e) and the results of any
Appraisal obtained pursuant to the following sentence or otherwise, all such
offers to be made in a manner consistent with the Servicing Standard. If and
when the Special Servicer or the Master Servicer deems it necessary and prudent
for purposes of establishing the fair market value of any Mortgaged Property
securing a defaulted Mortgage Loan, whether for purposes of making an offer at
foreclosure or otherwise, the Special Servicer or the Master Servicer, as the
case may be, is authorized to have an Appraisal completed with respect to such
property (the cost of which Appraisal shall be advanced by the Master Servicer
as a Servicing Advance, subject to its being entitled to reimbursement therefor
as a Servicing Advance as provided in Section 3.05(a), such Advance to be made
at the direction of the Special Servicer when the Appraisal is obtained by the
Special Servicer).
(b) Notwithstanding any other provision of this Agreement, no
Mortgaged Property shall be acquired by the Special Servicer on behalf of the
Trust under such circumstances, in such manner or pursuant to such terms as
would (i) cause such Mortgaged Property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code (unless the
portion of such REO Property that is not treated as "foreclosure property" and
that is held by REMIC I at any given time constitutes not more than a de minimis
amount of the assets of REMIC I within the meaning of Treasury regulation
Section 1.860D-1(b)(3)(i) and (ii)), or (ii) except as permitted by Section
3.17(a), subject the Trust to the imposition of any federal income taxes under
the Code. In addition, the Special Servicer shall not acquire any personal
property on behalf of the Trust pursuant to this Section 3.09 unless either:
(i) such personal property is incident to real property (within
the meaning of Section 856(e)(1) of the Code) so acquired by the Special
Servicer; or
(ii) the Special Servicer shall have obtained an Opinion of
Counsel (the reasonable cost of which may be withdrawn from the
Collection Account pursuant to Section 3.05(a)) to the effect that the
holding of such personal property by the Trust will not cause any REMIC
Pool to fail to qualify as a REMIC at any time that any Certificate is
outstanding or, subject to Section 3.17, cause the imposition of a tax on
the Trust under the REMIC Provisions.
(c) Notwithstanding the foregoing provisions of this Section 3.09,
neither the Special Servicer nor the Master Servicer shall, on behalf of the
Trustee, initiate foreclosure proceedings, obtain title to a Mortgaged Property
in lieu of foreclosure or otherwise, have a receiver of rents appointed with
respect to any Mortgaged Property, or take any other action with respect to any
Mortgaged Property, if, as a result of any such action, the Trustee, on behalf
of the Certificateholders, would be considered to hold title to, to be a
"mortgagee-in-possession" of, or to be an "owner" or "operator" of such
Mortgaged Property within the meaning of CERCLA or any comparable law, unless
(as evidenced by an Officer's Certificate to such effect delivered to the
-112-
<PAGE>
Trustee) the Special Servicer has previously determined in accordance with the
Servicing Standard, based on a Phase I Environmental Assessment (and any
additional environmental testing that the Special Servicer deems necessary and
prudent) of such Mortgaged Property performed within the 12-month period
preceding such determination by an Independent Person who regularly conducts
Phase I Environmental Assessments and such additional environmental testing,
that:
(i) the Mortgaged Property is in compliance with applicable
environmental laws and regulations or, if not, that taking such actions
as are necessary to bring the Mortgaged Property in compliance therewith
and proceeding against the Mortgaged Property is reasonably likely to
produce a greater recovery to Certificateholders on a present value basis
(the relevant discounting of anticipated collections that will be
distributable to Certificateholders to be performed at the related Net
Mortgage Rate), taking into consideration any associated liabilities,
than not taking such actions and not proceeding against such Mortgaged
Property; and
(ii) there are no circumstances or conditions present at the
Mortgaged Property relating to the use, management or disposal of
Hazardous Materials for which investigation, testing, monitoring,
containment, clean-up or remediation could be required under any
applicable environmental laws and/or regulations or, if such
circumstances or conditions are present for which any such action could
be required, that taking such actions with respect to such Mortgaged
Property and proceeding against the Mortgaged Property is reasonably
likely to produce a greater recovery to Certificateholders on a present
value basis (the relevant discounting of anticipated collections that
will be distributable to Certificateholders to be performed at the
related Net Mortgage Rate), taking into consideration any associated
liabilities, than not taking such actions and not proceeding against such
Mortgaged Property.
The cost of such Phase I Environmental Assessment and any such
additional environmental testing shall be advanced by the Master Servicer at the
direction of the Special Servicer given in accordance with the Servicing
Standard; provided, however, that the Master Servicer shall not be obligated in
connection therewith to advance any funds which, if so advanced, would
constitute a Nonrecoverable Servicing Advance. Amounts so advanced shall be
subject to reimbursement as Servicing Advances in accordance with Section
3.05(a). The cost of any remedial, corrective or other further actions
contemplated by clause (i) and or clause (ii) of the preceding paragraph shall
be payable directly out of the Collection Account.
(d) If the environmental testing contemplated by Section 3.09(c)
above establishes that either of the conditions set forth in clauses (i) and
(ii) of the first sentence thereof has not been satisfied with respect to any
Mortgaged Property securing a defaulted Mortgage Loan, the Special Servicer
shall take such action as is in accordance with the Servicing Standard (other
than proceeding against the Mortgaged Property, but including the sale of the
affected Mortgage Loan) and, at such time as it deems appropriate, may, on
behalf of the Trustee, release all or a portion of such Mortgaged Property from
the lien of the related Mortgage; provided that prior to the release of all or a
portion of the related Mortgaged Property from the lien of the related Mortgage,
(i) the Special Servicer shall have notified the Trustee and the Master Servicer
in writing of its intention to so release all or a portion of such Mortgaged
Property, (ii) the Trustee shall have notified the Certificateholders in writing
of the Special Servicer's intention to so release all or a portion of such
Mortgaged Property
-113-
<PAGE>
and (iii) the Holders of Certificates entitled to a majority of the Voting
Rights shall not have objected to such release within 30 days of the Trustee's
distributing such notice.
(e) The Special Servicer shall provide written reports to the
Trustee, the Controlling Class Representative and the Master Servicer monthly
regarding any actions taken by the Special Servicer with respect to any
Mortgaged Property securing a defaulted Mortgage Loan as to which the
environmental testing contemplated in subsection (c) above has revealed that
either of the conditions set forth in clauses (i) and (ii) of the first sentence
thereof has not been satisfied or that any remedial, corrective or other further
action contemplated by either such clause is required, in each case until the
earliest to occur of (i) satisfaction of both such conditions and completion of
all such remedial, corrective or other further action, (ii) repurchase of the
related Mortgage Loan by the related Mortgage Loan Seller and (iii) release of
the lien of the related Mortgage on such Mortgaged Property. The Trustee shall
forward or make available electronically copies of all such reports to the
Certificateholders and the Rating Agencies promptly following the receipt
thereof.
(f) The Special Servicer shall file on a timely basis the
information returns with respect to the receipt of any mortgage interest
received in a trade or business, the reports of foreclosures and abandonments
and reports relating to any cancellation of indebtedness income with respect to
any Mortgaged Property required by Sections 6050H, 6050J and 6050P of the Code
and deliver annually, in January of each year, to the Trustee an Officer's
Certificate stating that all such reports that were required to be filed during
the prior 12 months, have been filed. Such reports shall be in form and
substance sufficient to meet the reporting requirements imposed by such Sections
6050H, 6050J and 6050P of the Code.
(g) The Special Servicer shall have the right to determine, in
accordance with the Servicing Standard, the advisability of the maintenance of
an action to obtain a deficiency judgment if the state in which the Mortgaged
Property is located and the terms of the Mortgage Loan permit such an action.
The Master Servicer, at the direction of the Special Servicer, shall advance the
costs incurred in any such deficiency action, subject to its being entitled to
reimbursement therefor as a Servicing Advance as provided in Section 3.05(a).
(h) The Special Servicer shall maintain accurate records,
certified by a Servicing Officer, of each Final Recovery Determination in
respect of any Mortgage Loan or REO Property and the basis thereof. Each Final
Recovery Determination shall be evidenced by an Officer's Certificate delivered
to the Trustee, the Master Servicer and the Rating Agencies no later than the
tenth Business Day following such Final Recovery Determination.
SECTION 3.10. Trustee to Cooperate; Release of Mortgage Files.
(a) Upon the payment in full of any Mortgage Loan, or the receipt
by the Master Servicer of a notification that payment in full shall be escrowed
in a manner customary for such purposes, the Master Servicer shall immediately
notify the Trustee and request delivery of the related Mortgage File by
delivering thereto a Request for Release in the form of Exhibit E attached
hereto signed by a Servicing Officer of the Master Servicer. Any such Request
for Release shall include a statement to the effect that all amounts received or
to be received in connection with such payment which are required to be
deposited in the Collection Account pursuant to Section 3.04(a) have been
-114-
<PAGE>
or will be so deposited. Upon receipt of such notice and request conforming in
all material respects to the provisions hereof, the Trustee shall promptly
release, or cause any related Custodian to release, the related Mortgage File to
the Master Servicer and shall, if requested, promptly execute and deliver such
documents furnished to it by such person and certified by such person as being
necessary for such purpose. No expenses incurred in connection with any
instrument of satisfaction or deed of reconveyance shall be chargeable to the
Collection Account.
(b) If from time to time, and as appropriate for servicing or
foreclosure of any Mortgage Loan, the Master Servicer or the Special Servicer
shall otherwise require any Mortgage File (or any portion thereof), then, upon
request of the Master Servicer or the Special Servicer and receipt therefrom of
a Request for Release in the form of Exhibit E attached hereto signed by a
Servicing Officer thereof, the Trustee shall release, or cause any related
Custodian to release, such Mortgage File (or portion thereof) to the Master
Servicer or the Special Servicer, as the case may be, and shall, if requested,
promptly execute and deliver such documents furnished to it by such person and
certified by such person as being necessary for such purpose. Upon return of
such Mortgage File (or portion thereof) to the Trustee or the related Custodian,
or the delivery to the Trustee of a certificate of a Servicing Officer of the
Master Servicer or the Special Servicer stating that such Mortgage Loan was
liquidated and that all amounts received or to be received in connection with
such liquidation which are required to be deposited into the Collection Account
pursuant to Section 3.04(a) have been or will be so deposited, or that such
Mortgage Loan has become an REO Property, the Request for Release shall be
released by the Trustee to the Master Servicer or the Special Servicer, as
applicable.
(c) The Trustee shall promptly execute and deliver to the Special
Servicer any court pleadings, requests for trustee's sale or other documents
furnished by the Special Servicer and certified by it as being necessary to the
foreclosure or trustee's sale in respect of a Mortgaged Property or to any legal
action brought to obtain judgment against any Borrower on the Mortgage Note or
Mortgage or to obtain a deficiency judgment, or to enforce any other remedies or
rights provided by the Mortgage Note or Mortgage or otherwise available at law
or in equity or for any other purpose necessary or advisable in the reasonable,
good faith judgment of the Special Servicer; provided, however, that the Special
Servicer shall be responsible for the preparation of all such documents and
pleadings; and when submitted to the Trustee for signature, such documents or
pleadings shall be accompanied by a certificate of a Servicing Officer
requesting that such pleadings or documents be executed by the Trustee and
certifying as to the reason such documents or pleadings are required and that
the execution and delivery thereof by the Trustee will not invalidate or
otherwise affect the lien of the Mortgage, except for the termination of such a
lien upon completion of the foreclosure or trustee's sale.
SECTION 3.11. Servicing Compensation; Interest on Servicing
Advances; Payment of Certain Expenses; Obligations
of the Trustee Regarding Back-up Servicing Advances.
(a) As compensation for its activities hereunder, the Master
Servicer shall be entitled to receive the Master Servicing Fee with respect to
each and every Mortgage Loan (including, without limitation, each and every
Specially Serviced Mortgage Loan) and REO Loan. As to each Mortgage Loan and REO
Loan, the Master Servicing Fee shall accrue from time to time
-115-
<PAGE>
at the applicable Master Servicing Fee Rate on the basis of the same principal
amount and for the same number of days respecting which any related interest
payment due on such Mortgage Loan or deemed to be due on such REO Loan is
computed under the terms of the related Mortgage Note (as such terms may be
changed or modified at any time following the Closing Date) and applicable law.
The Master Servicing Fee with respect to any Mortgage Loan or REO Loan shall
cease to accrue if a Liquidation Event occurs in respect thereof. Master
Servicing Fees earned with respect to any Mortgage Loan or REO Loan shall be
payable monthly from payments of interest on such Mortgage Loan and REO Revenues
allocable as interest on such REO Loan, as the case may be. The Master Servicer
shall be entitled to recover unpaid Master Servicing Fees in respect of any
Mortgage Loan or REO Loan out of the portion of any related Insurance Proceeds
or Liquidation Proceeds allocable as interest on such Mortgage Loan or REO Loan,
as the case may be. The right to receive the Master Servicing Fee may not be
transferred in whole or in part except in connection with the transfer of all of
the Master Servicer's responsibilities and obligations under this Agreement or
except as provided in Section 3.22(d). The Master Servicer shall, monthly out of
its Master Servicing Fee, pay to any Sub-Servicer retained by the Master
Servicer such Sub-Servicer's sub-servicing fee (including, without limitation,
any Primary Servicing Fee, if applicable), to the extent such Sub-Servicer is
entitled thereto under the applicable Sub-Servicing Agreement.
(b) The Master Servicer shall be entitled to receive as additional
servicing compensation:
(i) all Net Default Charges, assumption fees, modification fees
and any similar fees (excluding Prepayment Premiums), if any, actually
collected in respect of any Mortgage Loan and allocable to the period
that it was not a Specially Serviced Mortgage Loan;
(ii) charges for beneficiary statements or demands and amounts
collected for checks returned for insufficient funds, or similar fees, to
the extent actually paid by a Borrower with respect to any Mortgage Loan;
(iii) all Prepayment Interest Excesses, if any, collected on the
Mortgage Loans (but only to the extent such Prepayment Interest Excesses
collected during any Collection Period are greater than all Prepayment
Interest Shortfalls incurred in respect of the Mortgage Loans during such
Collection Period); and
(iv) interest or other income earned on deposits in the Investment
Accounts maintained by the Master Servicer, in accordance with Section
3.06(b) (but only to the extent of the Net Investment Earnings, if any,
with respect to any such Investment Account for each Collection Period
and, in the case of a Servicing Account or Reserve Account, only to the
extent such interest or other income is not required to be paid to any
Borrower under applicable law or under the related Mortgage Loan
documents);
provided that with respect to the items of additional servicing compensation set
forth in clauses (i) and (ii) above, the Master Servicer shall, in turn, pay the
amounts described therein to the related Sub-Servicer to the extent such
Sub-Servicer is entitled thereto under the applicable Sub-Servicing Agreement.
-116-
<PAGE>
Notwithstanding anything to the contrary contained herein, any
entity acting as Master Servicer shall be entitled to assign to an Affiliate the
right to receive, for so long as (but only for so long as) such entity continues
to act as Master Servicer, any or all of the items constituting additional
servicing compensation contemplated by this Section 3.11(b).
The Master Servicer shall be required to pay out of its own funds
all expenses incurred by it in connection with its servicing activities
hereunder (including, without limitation, payment of any amounts due and owing
to any Sub-Servicer retained by it and the premiums for any blanket policy
insuring against hazard losses pursuant to Section 3.07(b)), if and to the
extent such expenses are not payable directly out of the Collection Account, and
the Master Servicer shall not be entitled to reimbursement therefor except as
expressly provided in this Agreement.
(c) As compensation for its activities hereunder, the Special
Servicer shall be entitled to receive the Special Servicing Fee with respect to
each Specially Serviced Mortgage Loan and each REO Loan. As to each Specially
Serviced Mortgage Loan and REO Loan, the Special Servicing Fee shall accrue from
time to time at the Special Servicing Fee Rate on the basis of the same
principal amount and for the same number of days respecting which any related
interest payment due on such Mortgage Loan or deemed to be due (using for such
purpose the principal deemed outstanding and the interest deemed due pursuant to
the definition of Assumed P&I Payment) on such REO Loan is computed under the
terms of the related Mortgage Note (as such terms may be modified at any time
following the Closing Date) and applicable law. The Special Servicing Fee with
respect to any Specially Serviced Mortgage Loan or REO Loan shall cease to
accrue as of the date a Liquidation Event occurs in respect thereof or it
becomes a Corrected Mortgage Loan. Earned but unpaid Special Servicing Fees
shall be payable monthly out of general collections on the Mortgage Loans and
any REO Properties on deposit in the Collection Account pursuant to Section
3.05(a).
As further compensation for its activities hereunder, the Special
Servicer shall be entitled to receive the Workout Fee with respect to each
Corrected Mortgage Loan, unless the basis on which such Mortgage Loan became a
Corrected Mortgage Loan was the remediation of a circumstance or condition
relating to the related Mortgage Loan Seller's obligation to repurchase such
Mortgage Loan pursuant to Section 2.03, in which case, if such Mortgage Loan is
repurchased within the applicable cure period following the related Mortgage
Loan Seller's notice or discovery (whichever occurred earlier) of the Document
Defect or breach giving rise to such repurchase obligation, no Workout Fee will
be payable from or based upon the receipt of, any Purchase Price paid by the
related Mortgage Loan Seller in satisfaction of such repurchase obligation.
Furthermore, no Workout Fees will be payable from, or based upon, the receipt of
any Liquidation Proceeds paid by any Majority Certificateholder of the
Controlling Class, the Master Servicer or the Sole Certificateholder in
connection with the purchase of, or the exchange of all the Certificates for,
all the Mortgage Loans and any REO Properties in the Trust Fund pursuant to
Section 9.01 hereof. As to each Corrected Mortgage Loan, subject to the
exceptions provided for in the preceding two sentences, the Workout Fee shall be
payable from, and shall be calculated by application of the Workout Fee Rate to,
each collection of interest (other than Default Interest and, in the case of an
ARD Loan after its Anticipated Repayment Date, Additional Interest) and
principal (including scheduled payments, prepayments and Balloon Payments at
maturity) received on such Mortgage Loan for so long as it remains a Corrected
Mortgage Loan. The Workout Fee with respect to any Corrected Mortgage Loan will
cease to be payable if a Servicing Transfer Event occurs with respect
-117-
<PAGE>
thereto or if the related Mortgaged Property becomes an REO Property; provided
that a new Workout Fee will become payable if and when such Mortgage Loan again
becomes a Corrected Mortgage Loan. If the Special Servicer is terminated other
than for cause or resigns in accordance with clause (ii) of the first paragraph
of Section 6.04, it shall retain the right to receive any and all Workout Fees
payable in respect of Mortgage Loans that became Corrected Mortgage Loans during
the period that it acted as Special Servicer and were still such at the time of
such termination or resignation (and the successor Special Servicer shall not be
entitled to any portion of such Workout Fees), in each case until the Workout
Fee for any such Mortgage Loan ceases to be payable in accordance with the
preceding sentence.
As further compensation for its activities hereunder, the Special
Servicer shall also be entitled to receive a Liquidation Fee with respect to
each Specially Serviced Mortgage Loan or REO Property as to which it receives
any full or discounted payoff from the related Borrower or any Liquidation
Proceeds (other than in connection with the purchase of any such Specially
Serviced Mortgage Loan or REO Property by the Special Servicer pursuant to
Section 3.18, by the Master Servicer or the Majority Certificateholder of the
Controlling Class pursuant to Section 3.18 or Section 9.01, or by Llama or SBRC
pursuant to Section 2.03 within the applicable cure period of its discovery or
notice (whichever occurred earlier) of the breach or Document Defect that gave
rise to the repurchase obligation; other than in connection with the acquisition
of any such Specially Serviced Mortgage Loan or REO Property by the Sole
Certificateholder in exchange for Certificates pursuant to Section 9.01; and
other than in connection with the condemnation or other governmental taking of a
Mortgaged Property or REO Property). As to each such Specially Serviced Mortgage
Loan or REO Property, the Liquidation Fee shall be payable from, and shall be
calculated by application of the Liquidation Fee Rate to, such full or
discounted payoff and/or such Liquidation Proceeds (excluding any portion of
such payoff and/or proceeds that represents accrued but unpaid Additional
Interest with respect to an ARD Loan after its Anticipated Repayment Date or
accrued but unpaid Default Interest); provided that no Liquidation Fee will be
payable with respect to any such Specially Serviced Mortgage Loan that becomes a
Corrected Mortgage Loan; and provided, further, that (without limiting the
Special Servicer's right to any Workout Fee that is properly payable therefrom),
no Liquidation Fee will be payable from, or based upon the receipt of,
Liquidation Proceeds collected as a result of any purchase or other acquisition
of a Specially Serviced Mortgage Loan or REO Property described in the
parenthetical to the first sentence of this paragraph or in connection with a
condemnation or other governmental taking of a Mortgaged Property or REO
Property.
Notwithstanding anything to the contrary herein, a Liquidation Fee
and a Workout Fee relating to the same Mortgage Loan shall not be paid from the
same proceeds on or with respect to such Mortgage Loan.
The Special Servicer's right to receive the Special Servicing Fee,
the Workout Fee and/or the Liquidation Fee may not be transferred in whole or in
part except in connection with the transfer of all of the Special Servicer's
responsibilities and obligations under this Agreement.
(d) The Special Servicer shall be entitled to receive as
additional special servicing compensation:
-118-
<PAGE>
(i) (A) to the extent allocable to the period when any Mortgage
Loan is a Specially Serviced Mortgage Loan or to the extent allocable to
an REO Loan, any Net Default Charges actually collected on such Mortgage
Loan or REO Loan, as the case may be, and (B) any assumption fees,
modification fees or similar fees (excluding Prepayment Premiums)
actually collected on or with respect to Specially Serviced Mortgage
Loans or REO Loans; and
(ii) interest or other income earned on deposits in the REO
Account, if established, in accordance with Section 3.06(b) (but only to
the extent of the Net Investment Earnings, if any, with respect to the
REO Account for each Collection Period).
To the extent the amounts described in clause (i)(B) of the
preceding paragraph are collected by the Master Servicer, the Master Servicer
shall promptly pay such amounts to the Special Servicer and shall not be
required to deposit such amounts in the Collection Account pursuant to Section
3.04(a). Additional servicing compensation to which the Master Servicer (or, if
so provided by the applicable Sub-Servicing Agreement, any Sub-Servicer retained
thereby) is entitled pursuant to Section 3.11(b) in the form of assumption fees,
modification fees and any similar fees (excluding Prepayment Premiums) collected
by the Special Servicer on Mortgage Loans that are not Specially Serviced
Mortgage Loans or REO Loans, or in the form of charges for beneficiary
statements or demands and amounts collected for checks returned for insufficient
funds with respect to any Mortgage Loans (including, without limitation,
Specially Serviced Mortgage Loans), shall be paid promptly to the Master
Servicer by the Special Servicer.
Notwithstanding anything to the contrary contained herein, any
entity acting as Special Servicer shall be entitled to assign to an Affiliate
the right to receive, for so long as (but only for so long as) such entity
continues to act as Special Servicer, any or all of the items constituting
additional special servicing compensation contemplated by this Section 3.11(d).
The Special Servicer shall be required to pay out of its own funds
all overhead, general and administrative expenses incurred by it in connection
with its servicing activities hereunder (including, without limitation, payment
of any amounts due and owing to any Sub-Servicers retained by it and the
premiums for any blanket policy obtained by it insuring against hazard losses
pursuant to Section 3.07(b)), if and to the extent such expenses are not payable
directly out of the Collection Account or the REO Account, do not constitute
Servicing Advances and the Master Servicer is not required to advance such
expenses at the direction of the Special Servicer, and the Special Servicer
shall not be entitled to reimbursement except as expressly provided in this
Agreement.
(e) If the Master Servicer or Special Servicer is required under
this Agreement to make a Servicing Advance, but neither does so within ten (10)
days after such Servicing Advance is required to be made, then the Trustee, if
it has actual knowledge of such failure on the part of the Master Servicer or
Special Servicer, as the case may be, shall give notice of such failure to the
Master Servicer and/or the Special Servicer, as appropriate. If such Servicing
Advance is not made by the Master Servicer or the Special Servicer within three
(3) Business Days after such notice then (subject to Section 3.11(g) below), the
Trustee shall make such Servicing Advance. Any failure by the Master Servicer or
the Special Servicer to make a Servicing Advance it is required to make
hereunder shall
-119-
<PAGE>
constitute an Event of Default by the Master Servicer or the Special Servicer,
as the case may be, subject to and as provided in Section 7.01(a).
(f) As and to the extent permitted by Section 3.05(a), the Master
Servicer, the Special Servicer (to the extent it has not already been reimbursed
for any such Servicing Advance by the Master Servicer) and the Trustee shall
each be entitled to receive interest at the Reimbursement Rate in effect from
time to time, accrued on the amount of each Servicing Advance made thereby (out
of its own funds) for so long as such Servicing Advance is outstanding, and such
interest will be paid: first, out of any Default Charges collected on or in
respect of the related Mortgage Loan or REO Loan; and second, at any time
coinciding with or following the reimbursement of such Servicing Advance, to the
extent that any such Default Charges then on deposit in the Collection Account
are insufficient to cover such Advance Interest, out of general collections on
the Mortgage Loans and any REO Properties on deposit in the Collection Account.
As and to the extent provided in Sections 3.03(a) and 3.05(a), the Master
Servicer shall reimburse itself, the Special Servicer or the Trustee, as
appropriate, for any Servicing Advance made thereby as soon as practicable after
funds available for such purpose are deposited in the Collection Account or a
Servicing Account.
(g) Notwithstanding anything to the contrary set forth herein,
none of the Master Servicer, the Special Servicer or the Trustee shall be
required to make any Servicing Advance (including, without limitation, an
Emergency Advance) that it determines in its reasonable and good faith judgment
would constitute a Nonrecoverable Servicing Advance. In addition, Nonrecoverable
Servicing Advances shall be reimbursable pursuant to Section 3.05(a)(vii) out of
general collections on the Mortgage Pool on deposit in the Collection Account.
The determination by the Master Servicer, the Special Servicer or, if applicable
or the Trustee, that it has made a Nonrecoverable Servicing Advance or that any
proposed Servicing Advance, if made, would constitute a Nonrecoverable Servicing
Advance, shall be evidenced by an Officer's Certificate delivered promptly to
the Trustee (or, if applicable, retained thereby), the Depositor and the Rating
Agencies, setting forth the basis for such determination, together with (if such
determination is prior to the liquidation of the related Mortgage Loan or REO
Property) a copy of an Appraisal of the related Mortgaged Property or REO
Property, as the case may be, which shall have been performed within the twelve
months preceding such determination, and further accompanied by any other
information, including, without limitation, engineers' reports, environmental
surveys, inspection reports, rent rolls, income and expense statements or
similar reports, that the Master Servicer or the Special Servicer may have
obtained and that supports such determination. If such an Appraisal shall not
have been required and performed pursuant to the terms of this Agreement, the
Master Servicer or the Special Servicer, as the case may be, may, subject to its
reasonable and good faith determination that such Appraisal will demonstrate the
nonrecoverability of a Servicing Advance, obtain an Appraisal for such purpose
at the expense of the Trust. The Trustee shall be entitled to rely on any
determination of nonrecoverability that may have been made by the Master
Servicer or the Special Servicer with respect to a particular Servicing Advance;
and the Master Servicer and the Special Servicer shall each be entitled to rely
on any determination of nonrecoverability that may have been made by the other
such party with respect to a particular Servicing Advance.
-120-
<PAGE>
(h) Notwithstanding anything to the contrary set forth herein, the
Master Servicer shall (at the direction of the Special Servicer if a Specially
Serviced Mortgage Loan or an REO Property is involved) pay directly out of the
Collection Account any servicing expense that, if paid by the Master Servicer or
the Special Servicer, would constitute a Nonrecoverable Servicing Advance;
provided that the Master Servicer (or the Special Servicer, if a Specially
Serviced Mortgage Loan or an REO Property is involved) has determined in
accordance with the Servicing Standard that making such payment is in the best
interests of the Certificateholders (as a collective whole), as evidenced by an
Officer's Certificate delivered promptly to the Trustee, the Depositor and the
Rating Agencies, setting forth the basis for such determination and accompanied
by any information that the Master Servicer or the Special Servicer may have
obtained that supports such determination.
SECTION 3.12. Inspections; Collection of Financial Statements.
(a) Commencing in 2000, the Master Servicer, at its own expense,
shall perform or cause to be performed physical inspections of each Mortgaged
Property at least once every two (2) years (or, if the related Mortgage Loan has
a then current balance greater than $2,000,000, at least once every year),
provided that at least 50% of the Mortgaged Properties (by both number and
aggregate Stated Principal Balances of the related Mortgage Loans) will be
inspected each year by the Master Servicer (or an entity employed by the Master
Servicer for such purpose) or, in accordance with the second succeeding
sentence, by the Special Servicer. The Master Servicer shall be responsible for
such inspections only in respect of (i) Mortgage Loans that are not Specially
Serviced Mortgage Loans and (ii) Corrected Mortgage Loans. The Special Servicer
shall, subject to statutory limitations or limitations set forth in the related
Mortgage Loan documents, perform or cause to be performed a physical inspection
of a Mortgaged Property (i) as soon as practicable after the servicing of the
related Mortgage Loan is transferred thereto pursuant to Section 3.21(a), (ii)
each year thereafter until such Mortgage Loan becomes a Corrected Mortgage Loan
and (iii) at any time at the request and expense of the Controlling Class
Representative. The Special Servicer shall be entitled to reimbursement of all
out-of-pocket expenses incurred in connection with any inspection and such
expenses shall constitute a Servicing Advance. The Master Servicer and the
Special Servicer shall each prepare or cause to be prepared as soon as
reasonably possible a written report of each such inspection performed or caused
to be performed thereby detailing the condition of the Mortgaged Property and
specifying the existence of (i) any vacancy in the Mortgaged Property that is,
in the reasonable judgment of the Master Servicer or Special Servicer (or their
respective designees), as the case may be, material and is evident from such
inspection, (ii) any abandonment of the Mortgaged Property, (iii) any waste on
or deferred maintenance in respect of the Mortgaged Property that is evident
from such inspection or (iv) any capital improvements made that are evident from
such inspection. The Master Servicer and Special Servicer each shall, within ten
(10) days of the completion thereof, deliver to the Depositor and the
Controlling Class Representative and, upon request, deliver to the Trustee, each
other and the Rating Agencies, a copy of each such written report prepared or
caused to be prepared by or on behalf of it. Upon the request of any
Certificateholder, Certificate Owner or prospective Certificateholder or
Certificate Owner (which prospective Certificateholder or Certificate Owner has
been certified to it as such by a Certificateholder or a Certificate Owner), the
Trustee shall request from the Master Servicer or the Special Servicer, as the
case may be, and the Trustee shall make available to the requesting party, in
accordance with Section 8.12(b), copies of the written reports prepared pursuant
to this Section 3.12(a). In the absence of actual knowledge that the Master
Servicer or the Special Servicer is in
-121-
<PAGE>
default under this Section 3.12(a), the Trustee shall have no obligation to
confirm that inspections of the Mortgaged Properties are being performed in
accordance with this Section 3.12(a).
(b) The Special Servicer, in the case of the Specially Serviced
Mortgage Loans and REO Properties, and the Master Servicer, in the case of all
other Mortgage Loans, shall make reasonable efforts to collect or otherwise
obtain promptly (from the related Borrower in the case of a Mortgage Loan)
annual and quarterly operating statements and rent rolls of the related
Mortgaged Property or REO Property (and financial statements of the related
Borrower in the case of a Mortgage Loan), whether or not delivery of such items
is required pursuant to the terms of the related Mortgage (which efforts shall
include at least three (3) phone calls, followed by confirming correspondence,
requesting such delivery). The Special Servicer, in the case of the Specially
Serviced Mortgage Loans and REO Properties, and the Master Servicer, in the case
of all other Mortgage Loans, shall promptly deliver copies of the collected
items to the Depositor and the Controlling Class Representative and, upon
request, to the Trustee, the Rating Agencies, and each other in accordance with
Section 4.02(b). Upon the request of any Certificateholder, Certificate Owner or
prospective Certificateholder or Certificate Owner (which prospective
Certificateholder or Certificate Owner has been certified to it as such by a
Certificateholder or Certificate Owner), the Trustee shall request from the
Master Servicer or the Special Servicer, as the case may be, and the Trustee
shall make available to the requesting party, in accordance with Section
8.12(b), copies of the documents collected pursuant to this Section 3.12(b).
Within thirty (30) days after receipt by the Master Servicer or
twenty (20) days after receipt by the Special Servicer of any annual operating
statements with respect to any Mortgaged Property or REO Property, as
applicable, each of the Master Servicer and the Special Servicer shall prepare
or update (and, in the case of the Special Servicer, forward within such 20-day
period to the Master Servicer in an electronic format reasonably acceptable to
the Master Servicer) an NOI Adjustment Worksheet for such Mortgaged Property or
REO Property (with the annual operating statements attached thereto as an
exhibit).
(c) If, with respect to any Mortgage Loan (other than a Specially
Serviced Mortgage Loan), the Special Servicer has any questions for the related
Borrower based upon the information received by the Special Servicer pursuant to
Section 3.12(a) or 3.12(b), the Master Servicer shall, in this regard and
without otherwise changing or modifying its duties hereunder, reasonably
cooperate with the Special Servicer in assisting the Special Servicer to contact
and solicit information from such Borrower.
SECTION 3.13. Annual Statement as to Compliance.
Each of the Master Servicer and the Special Servicer will deliver
to the Trustee, with a copy to the Depositor and each other, on or before April
15 of each year, beginning April 15, 2000, an Officer's Certificate stating that
(i) a review of the activities of the Master Servicer or the Special Servicer,
as the case may be, during the preceding calendar year, and of its performance
under this Agreement during such calendar year, has been made under the signing
officer's supervision, (ii) to the best of such officer's knowledge, based on
such review, the Master Servicer or the Special Servicer, as the case may be,
has in all material respects fulfilled all of its obligations under this
Agreement throughout the preceding calendar year, or, if there has been a
material default in the
-122-
<PAGE>
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof, and (iii) the Master Servicer or the
Special Servicer, as the case may be, has received no notice regarding the
qualification or status of any REMIC Pool as a REMIC or the status of either
Grantor Trust Pool as a Grantor Trust or otherwise asserting a tax (other than
ad valorem real property taxes or other similar taxes on REO Property) on the
income or assets of, any portion of the Trust Fund from the Internal Revenue
Service or from any other governmental agency or body or, if it has received any
such notice, specifying the details thereof. The signing officer shall have no
personal liability with respect to the content of any such statement, and the
Master Servicer or the Special Servicer, as the case may be, shall be deemed to
have made such statement and shall assume any liability resulting therefrom.
The Master Servicer and the Special Servicer, to the extent
applicable, will reasonably cooperate with the Depositor in conforming any
Officer's Certificate delivered pursuant to this Section 3.13 to requirements
imposed by the Commission on the Depositor in connection with the Commission's
issuance of a no-action letter relating to the Depositor's reporting
requirements in respect of the Trust pursuant to the Exchange Act.
SECTION 3.14. Reports by Independent Public Accountants.
On or before April 15 of each year, beginning April 15, 2000, each
of the Master Servicer and the Special Servicer, at its expense, shall cause a
firm of independent public accountants (which may also render other services to
the Master Servicer or Special Servicer, as applicable) and that is a member of
the American Institute of Certified Public Accountants to furnish a statement to
the Depositor, the Controlling Class Representative and the Trustee to the
effect that (i) it has obtained a letter of representation regarding certain
matters from the management of the Master Servicer or the Special Servicer, as
the case may be, which includes an assertion that the Master Servicer or the
Special Servicer, as the case may be, has complied with certain minimum mortgage
loan servicing standards (to the extent applicable to commercial and multifamily
mortgage loans), identified in the Uniform Single Attestation Program for
Mortgage Bankers established by the Mortgage Bankers Association of America,
with respect to the servicing of commercial and multifamily mortgage loans
during the most recently completed calendar year and on the basis of an
examination conducted by such firm in accordance with standards set by the
American Institute of Certified Public Accountants, such representation is
fairly stated in all material respects, subject to such exceptions and other
qualifications that may be appropriate. In rendering its report such firm may
rely, as to matters relating to the direct servicing of commercial and
multifamily mortgage loans by Sub-Servicers, upon comparable reports of firms of
independent certified public accountants rendered on the basis of examinations
conducted in accordance with the same standards (rendered within one year of
such report) with respect to those Sub-Servicers.
The Master Servicer and the Special Servicer, to the extent
applicable, will reasonably cooperate with the Depositor in conforming any
reports delivered pursuant to this Section 3.14 to requirements imposed by the
Commission on the Depositor in connection with the Commission's issuance of a
no-action letter relating to the Depositor's reporting requirements in respect
of the Trust pursuant to the Exchange Act.
-123-
<PAGE>
SECTION 3.15. Access to Certain Information.
Each of the Master Servicer and the Special Servicer shall provide
or cause to be provided to the other such party, the Depositor, the Trustee, the
Controlling Class Representative and the Rating Agencies, and to the OTS, the
FDIC, and any other federal or state banking or insurance regulatory authority
that may exercise authority over any Certificateholder, access to any
documentation regarding the Mortgage Loans and the other assets of the Trust
Fund that are within its control which may be required by this Agreement or by
applicable law, except to the extent that (i) such documentation is subject to a
claim of privilege under applicable law that has been asserted by the
Certificateholders and of which the Master Servicer has received written notice
or (ii) the Master Servicer or the Special Servicer is otherwise prohibited from
making such disclosure under applicable law, or may be subject to liability for
making such disclosure in the opinion of the counsel for the Master Servicer or
Special Servicer (which counsel may be a salaried employee of the Master
Servicer or Special Servicer). Such access shall be afforded without charge but
only upon reasonable prior written request and during normal business hours at
the offices of the Master Servicer or the Special Servicer, as the case may be,
designated by it. The Master Servicer and the Special Servicer shall each be
permitted to affix a reasonable disclaimer to any information provided by it
pursuant to this Section 3.15.
SECTION 3.16. Title to REO Property; REO Account.
(a) If title to any REO Property is acquired, the deed or
certificate of sale shall be issued to the Trustee on behalf of the
Certificateholders. The Special Servicer shall sell any REO Property by the end
of the third calendar year following the year in which the Trust acquires
ownership of such REO Property for purposes of Section 860G(a)(8) of the Code,
unless the Special Servicer either (i) is granted an extension of time (an "REO
Extension") by the Internal Revenue Service to sell such REO Property or (ii)
obtains for the Trustee and the Tax Administrator an Opinion of Counsel,
addressed to the Trustee and the Tax Administrator, to the effect that the
holding by the Trust of such REO Property subsequent to the end of the third
calendar year following the year in which such acquisition occurred, will not
result in the imposition of taxes on "prohibited transactions" of any REMIC Pool
as defined in Section 860F of the Code or cause any REMIC Pool to fail to
qualify as a REMIC at any time that any Certificates are outstanding. If the
Special Servicer is granted the REO Extension contemplated by clause (i) of the
immediately preceding sentence or obtains the Opinion of Counsel contemplated by
clause (ii) of the immediately preceding sentence, the Special Servicer shall
sell such REO Property within such extended period as is permitted by such REO
Extension or such Opinion of Counsel, as the case may be. Any reasonable expense
incurred by the Special Servicer in connection with its being granted the REO
Extension contemplated by clause (i) of the second preceding sentence or its
obtaining the Opinion of Counsel contemplated by clause (ii) of the second
preceding sentence, shall be an expense of the Trust payable out of the
Collection Account pursuant to Section 3.05(a). Any REO Extension shall be
requested by the Special Servicer no later than 60 days before the end of the
third calendar year following the year in which the Trust acquired ownership of
the related REO Property.
-124-
<PAGE>
(b) The Special Servicer shall segregate and hold all funds
collected and received in connection with any REO Property separate and apart
from its own funds and general assets. If an REO Acquisition shall occur, the
Special Servicer shall establish and maintain one or more accounts
(collectively, the "REO Account"), to be held on behalf of the Trustee in trust
for the benefit of the Certificateholders, for the retention of revenues and
other proceeds derived from each REO Property. The REO Account shall be an
Eligible Account and may consist of one account for all the REO Properties. The
Special Servicer shall deposit, or cause to be deposited, in the REO Account,
within two (2) Business Days of receipt, all REO Revenues, Liquidation Proceeds
(net of all Liquidation Expenses paid therefrom) and Insurance Proceeds received
in respect of an REO Property. The Special Servicer is authorized to pay out of
related Liquidation Proceeds any Liquidation Expenses incurred in respect of an
REO Property and outstanding at the time such proceeds are received. Funds in
the REO Account may be invested in Permitted Investments in accordance with
Section 3.06. The Special Servicer shall be entitled to make withdrawals from
the REO Account to pay itself, as additional servicing compensation in
accordance with Section 3.11(d), interest and investment income earned in
respect of amounts held in the REO Account as provided in Section 3.06(b) (but
only to the extent of the Net Investment Earnings with respect to the REO
Account for any Collection Period). The Special Servicer shall give notice to
the other parties hereto of the location of the REO Account when first
established and of the new location of the REO Account prior to any change
thereof.
(c) The Special Servicer shall withdraw from the REO Account funds
necessary for the proper operation, management, maintenance and disposition of
any REO Property, but only to the extent of amounts on deposit in the REO
Account relating to such REO Property. Within one Business Day following the end
of each Collection Period, the Special Servicer shall withdraw from the REO
Account and deposit into the Collection Account or deliver to the Master
Servicer (which shall deposit such amounts into the Collection Account) the
aggregate of all amounts received in respect of each REO Property during such
Collection Period, net of any withdrawals made out of such amounts pursuant to
the preceding sentence; provided that the Special Servicer may retain in the REO
Account such portion of proceeds and collections as may be necessary to maintain
a reserve of sufficient funds for the proper operation, management, maintenance
and disposition of the related REO Property (including without limitation the
creation of a reasonable reserve for repairs, replacements and necessary capital
improvements and other related expenses), such reserve not to exceed an amount
sufficient to cover such items to be incurred during the following twelve-month
period.
(d) The Special Servicer shall keep and maintain separate records,
on a property-by-property basis, for the purpose of accounting for all deposits
to, and withdrawals from, the REO Account pursuant to Section 3.16(b) or (c).
SECTION 3.17. Management of REO Property.
(a) Prior to the acquisition of title to any Mortgaged Property
securing a defaulted Mortgage Loan, the Special Servicer shall review the
operation of such Mortgaged Property and determine the nature of the income that
would be derived from such property if it were acquired by the Trust. If the
Special Servicer determines from such review that:
-125-
<PAGE>
(i) None of the income from Directly Operating such Mortgaged
Property would be subject to tax as "net income from foreclosure
property" within the meaning of the REMIC Provisions or would be subject
to the tax imposed on "prohibited transactions" under Section 860F of the
Code (either such tax referred to herein as an "REO Tax"), then such
Mortgaged Property may be Directly Operated by the Special Servicer as
REO Property;
(ii) Directly Operating such Mortgaged Property as an REO Property
could result in income from such property that would be subject to an REO
Tax, but that a lease of such property to another party to operate such
property, or the performance of some services by an Independent
Contractor with respect to such property, or another method of operating
such property would not result in income subject to an REO Tax, then the
Special Servicer may (provided, that in the good faith and reasonable
judgment of the Special Servicer, it is commercially reasonable) acquire
such Mortgaged Property as REO Property and so lease or operate such REO
Property; or
(iii) It would not be commercially reasonable to operate and
manage such property as REO Property without the Trust incurring or
possibly incurring an REO Tax on income from such property, then the
Special Servicer shall deliver to the Tax Administrator, in writing, a
proposed plan (the "Proposed Plan") to manage such property as REO
Property. Such plan shall include potential sources of income, and to the
extent reasonably possible, estimates of the amount of income from each
such source. Within a reasonable period of time after receipt of such
plan, the Tax Administrator shall consult with the Special Servicer and
shall advise the Special Servicer of the Trust's federal income tax
reporting position with respect to the various sources of income that the
Trust would derive under the Proposed Plan. In addition, the Tax
Administrator shall (to the maximum extent reasonably possible) advise
the Special Servicer of the estimated amount of taxes that the Trust
would be required to pay with respect to each such source of income from
such REO Property. After receiving the information described in the two
preceding sentences from the Tax Administrator, the Special Servicer
shall either (A) implement the Proposed Plan (after acquiring the
respective Mortgaged Property as REO Property) or (B) manage and operate
such property in a manner that would not result in the imposition of an
REO Tax on the income derived from such property.
The Special Servicer's decision as to how each REO Property shall
be managed and operated shall be based on the good faith and reasonable judgment
of the Special Servicer as to which means would be in the best interest of the
Certificateholders by maximizing (to the extent commercially feasible) the net
after-tax REO Revenues received by the Trust with respect to such property
without materially impairing its marketability and, to the extent consistent
with the foregoing, in the same manner as would prudent mortgage loan servicers
and asset managers operating acquired mortgaged property comparable to such REO
Property. Both the Special Servicer and the Tax Administrator may consult with
counsel knowledgeable in such matters at (to the extent reasonable) the expense
of the Trust in connection with determinations required under this Section
3.17(a). Neither the Special Servicer nor the Tax Administrator shall be liable
to the Certificateholders, the Trust, the other parties hereto or each other for
errors in judgment made in good faith in the reasonable exercise of their
discretion or in reasonable and good faith reliance on the advice of
knowledgeable counsel while performing their respective responsibilities under
this
-126-
<PAGE>
Section 3.17(a) or, to the extent it relates to federal income tax consequences
for the Trust, Section 3.17(b) below. Nothing in this Section 3.17(a) is
intended to prevent the sale of a Defaulted Mortgage Loan or REO Property
pursuant to the terms and subject to the conditions of Section 3.18.
(b) If title to any REO Property is acquired, the Special Servicer
shall manage, conserve, protect and operate such REO Property for the benefit of
the Certificateholders solely for the purpose of its prompt disposition and sale
in a manner that does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or,
except as contemplated by Section 3.17(a), result in the receipt by any REMIC
Pool of any "income from non-permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code or in an Adverse REMIC Event in respect of any such
REMIC. Except as provided in Section 3.17(a), the Special Servicer shall not
enter into any lease, contract or other agreement that causes any REMIC Pool to
receive, and (unless required to do so under any lease, contract or agreement to
which the Special Servicer or the Trust may become a party or successor to a
party due to a foreclosure, deed-in-lieu of foreclosure or other similar
exercise of a creditor's rights or remedies with respect to a Mortgage Loan)
shall not cause or allow any REMIC Pool to receive, any "net income from
foreclosure property" that is subject to taxation under the REMIC Provisions.
Subject to the foregoing, however, the Special Servicer shall have full power
and authority to do any and all things in connection therewith as are consistent
with the Servicing Standard and, consistent therewith, shall withdraw from the
REO Account, to the extent of amounts on deposit therein with respect to any REO
Property, funds necessary for the proper operation, management, maintenance and
disposition of such REO Property, including without limitation:
(i) all insurance premiums due and payable in respect of such REO
Property;
(ii) all real estate taxes and assessments in respect of such REO
Property that may result in the imposition of a lien thereon;
(iii) any ground rents in respect of such REO Property; and
(iv) all costs and expenses necessary to maintain, lease, sell,
protect, manage, operate and restore such REO Property.
To the extent that amounts on deposit in the REO Account in respect of any REO
Property are insufficient for the purposes set forth in the preceding sentence
with respect to such REO Property, the Special Servicer shall direct the Master
Servicer to make (and the Master Servicer shall so make) Servicing Advances in
such amounts as are necessary for such purposes unless (as evidenced in the
manner contemplated by Section 3.11(g)) the Special Servicer or the Master
Servicer determines, in its reasonable, good faith judgment, that such payment
would be a Nonrecoverable Servicing Advance.
(c) The Special Servicer may (and, except as otherwise permitted
by Section 3.17(a), shall if it would avoid an Adverse REMIC Event) contract
with any Independent Contractor for the operation and management of any REO
Property, provided that:
-127-
<PAGE>
(i) the terms and conditions of any such contract may not be
inconsistent herewith and shall reflect an agreement reached at arm's
length;
(ii) the fees of such Independent Contractor (which shall be
expenses of the Trust) shall be reasonable and customary in consideration
of the nature and locality of the REO Property;
(iii) any such contract shall be consistent with the provisions of
Treasury Regulation 'SS'1.856-4(b)(5) and, to the extent consistent
therewith, shall be administered to require that the Independent
Contractor, in a timely manner, (A) to the extent of available revenue
from the REO Property, pay all costs and expenses incurred in connection
with the operation and management of such REO Property, including,
without limitation, those listed in Section 3.17(b) above, and (B) remit
all related revenues collected (net of its fees and such costs and
expenses) to the Special Servicer upon receipt;
(iv) none of the provisions of this Section 3.17(c) relating to
any such contract or to actions taken through any such Independent
Contractor shall be deemed to relieve the Special Servicer of any of its
duties and obligations hereunder with respect to the operation and
management of any such REO Property; and
(v) the Special Servicer shall be obligated with respect thereto
to the same extent as if it alone were performing all duties and
obligations in connection with the operation and management of such REO
Property.
The Special Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Special Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification.
SECTION 3.18. Sale of Defaulted Mortgage Loans and REO Properties.
(a) The parties hereto may sell or purchase, or permit the sale or
purchase of, a Mortgage Loan or REO Property only on the terms and subject to
the conditions set forth in this Section 3.18 or as otherwise expressly provided
in or contemplated by Sections 2.03 and 9.01.
(b) If the Special Servicer has determined, in its good faith and
reasonable judgment, that any Defaulted Mortgage Loan will become the subject of
a foreclosure sale or similar proceeding, and that the sale of such Mortgage
Loan under the circumstances provided in this Section 3.18(b) or in Section
3.18(c) is in accordance with the Servicing Standard, then the Special Servicer
shall promptly so notify in writing the Trustee and the Master Servicer, and the
Trustee shall, within ten (10) days after receipt of such notice, notify all the
Certificateholders of the Controlling Class. The Majority Certificateholder of
the Controlling Class may at its or their option purchase from the Trust, at a
price equal to the applicable Purchase Price, any such Defaulted Mortgage Loan.
The Purchase Price for any Mortgage Loan purchased under this paragraph (b)
shall be deposited into the Collection Account, and the Trustee, upon receipt of
an Officer's Certificate from the Master Servicer to the effect that such
deposit has been made, shall release or cause to be released to the
-128-
<PAGE>
Certificateholder(s) effecting such purchase (or any designee thereof) the
related Mortgage File, and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as shall be provided to
it and are reasonably necessary to vest in the Certificateholder(s) effecting
such purchase (or any designee thereof) ownership of such Mortgage Loan. In
connection with any such purchase, the Special Servicer shall deliver the
related Servicing File to the Certificateholder(s) effecting such purchase (or
any designee thereof).
(c) If the Majority Certificateholder of the Controlling Class has
not purchased any Defaulted Mortgage Loan described in the first sentence of
Section 3.18(b) within the period (the "Initial Option Period") ending on the
earlier of (i) the 15th day after it has received written notice in respect
thereof pursuant to Section 3.18(b) above, and (ii) the date of receipt by the
Special Servicer of a written notice from the Majority Certificateholder of the
Controlling Class that the Majority Certificateholder does not intend to
exercise its purchase option (which written notice has been sent by the Majority
Certificateholder of the Controlling Class to the Special Servicer with a copy
to the Trustee and the Master Servicer) then the Special Servicer may purchase
such Mortgage Loan from the Trust at a price equal to the Purchase Price within
ten (10) days after the expiration of the Initial Option Period.
If the Special Servicer has not purchased any Defaulted Mortgage
Loan described in the first sentence of Section 3.18(b) within the period (the
"Second Option Period") ending on the earlier of (i) the 10th day after the
expiration of the Initial Option Period, and (ii) the date of receipt by the
Master Servicer of a written notice from the Special Servicer that the Special
Servicer does not intend to exercise its purchase option (which written notice
has been sent by the Special Servicer to the Master Servicer with a copy to the
Majority Certificateholder of the Controlling Class and the Trustee), then the
Master Servicer may purchase such Mortgage Loan from the Trust at a price equal
to the Purchase Price until the earlier of (i) the 10th day after the expiration
of the Second Option Period, and (ii) the date of receipt by the Special
Servicer of a written notice from the Master Servicer that the Master Servicer
does not intend to exercise its purchase option (which written notice has been
sent by the Master Servicer to the Special Servicer with a copy to the Majority
Certificateholder of the Controlling Class and the Trustee).
The Purchase Price for any such Mortgage Loan purchased under this
subsection (c) shall be deposited into the Collection Account, and the Trustee,
upon receipt of an Officer's Certificate from the Master Servicer to the effect
that such deposit has been made, shall release or cause to be released to the
Master Servicer or the Special Servicer, as applicable, the related Mortgage
File, and shall execute and deliver such instruments of transfer or assignment,
in each case without recourse, as shall be provided to it and are reasonably
necessary to vest in the Master Servicer or the Special Servicer, as applicable,
the ownership of such Mortgage Loan. In connection with any such purchase by the
Master Servicer, the Special Servicer shall deliver the related Servicing File
to the Master Servicer.
(d) The Special Servicer may offer to sell any Defaulted Mortgage
Loan not otherwise purchased pursuant to Section 3.18(b) or Section 3.18(c)
above, if and when the Special Servicer determines, consistent with the
Servicing Standard, that such a sale would be in the best economic interests of
the Trust. Such offer shall be made in a commercially reasonable manner (which,
for purposes hereof, includes an offer to sell without representation or
warranty other than
-129-
<PAGE>
customary warranties of title, loan status, condition and similar customary
matters, if liability for breach thereof is limited to recourse against the
Trust) for a period of not less than 15 days. Unless the Special Servicer
determines that acceptance of any offer would not be in the best economic
interests of the Trust, the Special Servicer shall accept the highest cash offer
received from any Person that constitutes a fair price for such Mortgage Loan.
In the absence of any offer determined as provided below to be fair, the Special
Servicer shall proceed with respect to such Defaulted Mortgage Loan in
accordance with Section 3.09 and, otherwise, in accordance with the Servicing
Standard.
The Special Servicer shall use its best efforts to solicit cash
offers for each REO Property in such manner as will be reasonably likely to
realize a fair price for such property within the time period provided for by
Section 3.16(a). The Special Servicer shall accept the first (and, if multiple
offers are received contemporaneously, highest) cash offer received from any
Person that constitutes a fair price (determined pursuant to Section 3.18(e)
below) for such REO Property. If the Special Servicer reasonably believes that
it will be unable to realize a fair price (determined pursuant to Section
3.18(e) below) for any REO Property within the time constraints imposed by
Section 3.16(a), the Special Servicer shall dispose of such REO Property upon
such terms and conditions as the Special Servicer shall deem necessary and
desirable to maximize the recovery thereon under the circumstances and, in
connection therewith, shall accept the highest outstanding cash offer,
regardless of from whom received.
The Special Servicer shall give the Trustee, the Controlling Class
Representative and the Master Servicer not less than two (2) Business Days'
prior written notice of its intention to sell any Defaulted Mortgage Loan or REO
Property pursuant to this Section 3.18(d). No Interested Person shall be
obligated to submit an offer to purchase any such Mortgage Loan or REO Property,
and notwithstanding anything to the contrary herein, neither the Trustee, in its
individual capacity, nor any of its Affiliates may make an offer for or purchase
any Defaulted Mortgage Loan or any REO Property pursuant hereto.
(e) Whether any cash offer constitutes a fair price for any
Defaulted Mortgage Loan or REO Property, as the case may be, for purposes of
Section 3.18(d), shall be determined by the Special Servicer or, if such cash
offer is from an Interested Person, by the Trustee. In determining whether any
offer received from an Interested Person represents a fair price for any such
Mortgage Loan or REO Property, the Trustee shall be supplied with and shall rely
on the most recent Appraisal or updated Appraisal conducted in accordance with
this Agreement within the preceding 12-month period or, in the absence of any
such Appraisal, on a narrative appraisal prepared by a Qualified Appraiser,
retained by the Special Servicer. Such appraiser shall be selected by the
Special Servicer if neither the Special Servicer nor any Affiliate thereof is
making an offer with respect to a Defaulted Mortgage Loan or REO Property and
shall be selected by the Trustee if the Special Servicer or an Affiliate thereof
is making such an offer. The cost of any such narrative appraisal shall be
advanced by the Master Servicer, at the direction of the Special Servicer, and
shall constitute a Servicing Advance. When any Interested Person is among those
making an offer with respect to a Defaulted Mortgage Loan or REO Property, the
Special Servicer shall require that all offers be submitted in writing and be
accompanied by a refundable deposit of cash in an amount equal to 5% of the
offered amount. In determining whether any offer from a Person other than an
Interested Person constitutes a fair price for any such Mortgage Loan or REO
Property, the Special Servicer shall take into account
-130-
<PAGE>
(in addition to the results of any Appraisal, updated Appraisal or narrative
Appraisal that it may have obtained pursuant to this Agreement within the prior
twelve (12) months), and in determining whether any offer from an Interested
Person constitutes a fair price for any such Mortgage Loan or REO Property, any
appraiser or other expert in real estate matters shall be instructed to take
into account, as applicable, among other factors, the period and amount of any
delinquency on the affected Mortgage Loan, the occupancy level and physical
condition of the Mortgaged Property or REO Property, the state of the local
economy and the obligation to dispose of any REO Property within the time period
specified in Section 3.16(a). Notwithstanding the other provisions of this
Section 3.18, no cash offer from any Interested Person or any Affiliate thereof
in an amount less than the related Purchase Price shall constitute a fair price
for any Defaulted Mortgage Loan or REO Property unless such offer is the highest
cash offer received and at least two additional offers (not including the offers
of Interested Persons or any Affiliates thereof) have been received from
Independent third parties reflecting prices less than the related Purchase
Price. The Purchase Price for any Defaulted Mortgage Loan or REO Property shall
in all cases be deemed a fair price.
(f) Subject to Sections 3.18(a) through 3.18(e) above, the Special
Servicer shall act on behalf of the Trustee in negotiating and taking any other
action necessary or appropriate in connection with the sale of any Defaulted
Mortgage Loan or REO Property, and the collection of all amounts payable in
connection therewith. In connection therewith, the Special Servicer may charge
prospective offerors, and may retain, fees that approximate the Special
Servicer's actual costs in the preparation and delivery of information
pertaining to such sales or evaluating offers without obligation to deposit such
amounts into the Collection Account. Any sale of a Defaulted Mortgage Loan or
any REO Property shall be final and without recourse to the Trustee or the Trust
(except such recourse imposed by those representations and warranties typically
given in such transactions, any prorations applied thereto and any customary
closing matters), and if such sale is consummated in accordance with the terms
of this Agreement, none of the Special Servicer, the Master Servicer or the
Trustee shall have any liability to any Certificateholder with respect to the
purchase price therefor accepted by the Special Servicer or the Trustee.
(g) Any sale of a Defaulted Mortgage Loan or any REO Property
shall be for cash only (unless, as evidenced by an Opinion of Counsel, changes
in the REMIC Provisions made subsequent to the Startup Day allow a sale for
other consideration).
(h) Notwithstanding any of the foregoing paragraphs of this
Section 3.18, the Special Servicer shall not be obligated to accept the highest
cash offer if the Special Servicer determines, in accordance with the Servicing
Standard, that rejection of such offer would be in the best interests of the
Certificateholders, and the Special Servicer may accept a lower cash offer (from
any Person other than itself or an Affiliate) if it determines, in accordance
with the Servicing Standard, that acceptance of such offer would be in the best
interests of the Certificateholders (for example, if the prospective buyer
making the lower offer is more likely to perform its obligations or the terms
(other than price) offered by the prospective buyer making the lower offer are
more favorable).
-131-
<PAGE>
SECTION 3.19. Additional Obligations of the Master Servicer, the
Special Servicer and the Depositor.
(a) The Master Servicer shall maintain at its Primary Servicing
Office and shall, upon reasonable advance written notice, make available during
normal business hours for review by each Rating Agency and by any
Certificateholder or Certificate Owner or any Person identified to the Master
Servicer as a prospective transferee of a Certificate or an interest therein,
copies of the Servicing Files; provided that, if the Master Servicer reasonably
and in good faith determines that any item of information contained in such
Servicing Files is of a nature that it should be conveyed to all
Certificateholders at the same time, it shall, as soon as reasonably possible
following its receipt of any such item of information, disclose such item of
information to the Trustee as part of the reports to be delivered to the Trustee
by the Master Servicer pursuant to Section 4.02(b), and until the Trustee has
either disclosed such information to all Certificateholders in a Distribution
Date Statement or has properly filed such information with the Commission on
behalf of the Trust under the Exchange Act, the Master Servicer shall be
entitled to withhold such item of information from any Certificateholder or
Certificate Owner or prospective transferee of a Certificate or an interest
therein; and provided, further, that the Master Servicer shall not be required
to make particular items of information contained in the Servicing File for any
Mortgage Loan available to any Person if the disclosure of such particular items
of information is expressly prohibited by applicable law or the provisions of
any related Mortgage Loan documents or if such documentation is subject to claim
of privilege under applicable law that can be asserted by the
Certificateholders; and provided, further, that, except in the case of the
Rating Agencies, the Master Servicer shall be entitled to recover from any
Person reviewing the Servicing Files pursuant to this Section 3.19(a) its
reasonable "out-of-pocket" expenses incurred in connection with making the
Servicing Files available to such Person. Except as set forth in the provisos to
the preceding sentence, copies of all or any portion of any Servicing File are
to be made available by the Master Servicer upon request; however, the Master
Servicer shall be permitted to require payment of a sum sufficient to cover the
reasonable out-of-pocket costs and expenses of providing such service. The
Special Servicer shall, as to each Specially Serviced Mortgage Loan and REO
Property, promptly deliver to the Master Servicer a copy of each document or
instrument added to the related Servicing File, and the Master Servicer shall in
no way be in default under this Section 3.19(a) solely by reason of the Special
Servicer's failure to do so.
In connection with providing access to or copies of the items
described in the preceding paragraph, the Master Servicer may require, unless
the Depositor directs otherwise, (a) in the case of Certificate Owners, a
written confirmation executed by the requesting Person, in form reasonably
satisfactory to the Master Servicer, generally to the effect that such Person is
a beneficial holder of Certificates and will otherwise keep such information
confidential, and (b) in the case of a prospective purchaser, written
confirmation executed by the requesting Person, in form reasonably satisfactory
to the Master Servicer, generally to the effect that such Person is a
prospective purchaser of a Certificate or an interest therein, is requesting the
information for use in evaluating a possible investment in Certificates and will
otherwise keep such information confidential. All Certificateholders, by the
acceptance of their Certificates, shall be deemed to have agreed to keep such
information confidential, except to the extent that the Depositor grants written
permission to the contrary. The Master Servicer shall not be liable for the
dissemination of information in accordance with this Section 3.19(a).
-132-
<PAGE>
(b) Within sixty (60) days (or within such longer period as the
Master Servicer or the Special Servicer, as applicable, is (as certified thereby
to the Trustee in writing) diligently and in good faith proceeding to obtain the
Appraisal referred to below ) after the earliest of (i) the date on which any
Mortgage Loan becomes a Modified Mortgage Loan, (ii) the 90th day following the
occurrence of any uncured delinquency in Scheduled P&I Payments with respect to
any Mortgage Loan, (iii) the date on which a receiver is appointed and continues
in such capacity in respect of the Mortgaged Property securing any Mortgage
Loan, (iv) the date on which the Borrower under any Mortgage Loan becomes the
subject of bankruptcy, insolvency or similar proceedings, and (v) the date on
which the Mortgaged Property securing any Mortgage Loan becomes an REO Property
(each such Mortgage Loan and any related REO Loan, until it ceases to be such in
accordance with the following paragraph, a "Required Appraisal Loan"), the
Master Servicer or the Special Servicer (whichever is then responsible for
servicing such Mortgage Loan) shall obtain an Appraisal of the related Mortgaged
Property (unless an Appraisal thereof had previously been obtained within the
prior twelve months). The cost of such Appraisal shall be advanced by the Master
Servicer, subject to its being entitled to reimbursement therefor as a Servicing
Advance as provided in Section 3.05(a), and such Advance shall be made at the
direction of the Special Servicer when the Appraisal is obtained by the Special
Servicer.
With respect to each Required Appraisal Loan (unless such loan has
become a Corrected Mortgage Loan and has remained current for at least twelve
(12) consecutive Scheduled P&I Payments, and no other Servicing Transfer Event
has occurred with respect thereto during the preceding twelve months, in which
case it will cease to be a Required Appraisal Loan), the Special Servicer shall,
within thirty (30) days of each anniversary of such loan becoming a Required
Appraisal Loan, order an update of the prior Appraisal (the cost of which shall
be advanced by the Master Servicer as a Servicing Advance at the direction of
the Special Servicer, subject to the Master Servicer's right to reimbursement as
provided in Section 3.05(a)). Based upon such Appraisal, the Special Servicer
shall redetermine and report to the Trustee the Appraisal Reduction Amount, if
any, with respect to such loan.
At any time that any Appraisal Reduction Amount exists with
respect to any Required Appraisal Loan, the Controlling Class Representative
may, at its own expense, obtain and deliver to the Master Servicer, the Special
Servicer and the Trustee an Appraisal of the related Mortgaged Property or REO
Property, as the case may be. If the appraiser that performed, and the appraised
value reflected in, the Appraisal obtained by the Controlling Class
Representative are different from the appraiser that performed, and the
appraised value reflected in, the Appraisal used to determine such Appraisal
Reduction Amount, then the Special Servicer shall, at the request and expense of
the Controlling Class Representative, retain a third Qualified Appraiser
mutually acceptable to the Special Servicer and the Controlling Class
Representative to decide which of those two Appraisals more closely reflects the
then-value of the related Mortgaged Property. If that third Qualified Appraiser
selects the Appraisal delivered by the Controlling Class Representative, then
the Special Servicer shall recalculate the Appraisal Reduction Amount in respect
of such Required Appraisal Loan based on the Appraisal delivered by the
Controlling Class Representative and notify the Trustee, the Master Servicer and
the Controlling Class Representative of such recalculated Appraisal Reduction
Amount.
-133-
<PAGE>
(c) The Master Servicer and the Special Servicer shall each
deliver to the other and to the Trustee (for inclusion in the Mortgage File),
the Underwriters, the Controlling Class Representative and the Rating Agencies
copies of all Appraisals, environmental reports and engineering reports (or, in
each case, updates thereof) obtained with respect to any Mortgaged Property or
REO Property.
(d) No more frequently than once per calendar month, the Special
Servicer may require the Master Servicer, and the Master Servicer shall be
obligated, subject to the second following paragraph, to reimburse the Special
Servicer for any Servicing Advances made by the Special Servicer, but not
previously reimbursed (whether pursuant to Section 3.05(a), this Section 3.19(d)
or otherwise) to the Special Servicer, and to pay the Special Servicer interest
thereon at the Reimbursement Rate from the date made to, but not including, the
date of reimbursement. Such reimbursement and any accompanying payment of
interest shall be made within ten (10) days of the request therefor by wire
transfer of immediately available funds to an account designated by the Special
Servicer. Upon the Master Servicer's reimbursement to the Special Servicer of
any Servicing Advance and payment to the Special Servicer of interest thereon,
all in accordance with this Section 3.19(d), the Master Servicer shall for all
purposes of this Agreement be deemed to have made such Servicing Advance at the
same time as the Special Servicer originally made such Advance, and accordingly,
the Master Servicer shall be entitled to reimbursement for such Advance,
together with Advance Interest thereon, at the same time, in the same manner and
to the same extent as the Master Servicer would otherwise have been entitled if
it had actually made such Servicing Advance.
Notwithstanding anything to the contrary contained in this
Agreement, if the Special Servicer (i) is required under any other provision of
this Agreement to direct the Master Servicer to make a Servicing Advance or (ii)
is otherwise aware a reasonable period in advance that it is reasonably likely
that the Special Servicer will incur a cost or expense that will, when incurred,
constitute a Servicing Advance, the Special Servicer shall (in the case of
clause (i) preceding), and shall use reasonable efforts to (in the case of
clause (ii) preceding), request that the Master Servicer make such Servicing
Advance, such request to be made in writing and in a timely manner that does not
materially and adversely affect the interests of any Certificateholder and at
least five (5) Business Days prior to the date on which such Servicing Advance
is first required to be made; provided, however, that the Special Servicer shall
have an obligation to make any Emergency Advance or any other Servicing Advance
with respect to which it would, under the circumstances, be inconsistent with
the Servicing Standard for the Special Servicer to request that the Master
Servicer make such Servicing Advance (in lieu of making such Servicing Advance
itself and seeking reimbursement therefor as provided herein); and provided,
further, that the Special Servicer shall, with respect to Specially Serviced
Mortgage Loans and REO Properties, make any Servicing Advance that it fails to
timely request the Master Servicer to make. The Master Servicer shall (subject
to the following paragraph) have the obligation to make any such Servicing
Advance that it is requested by the Special Servicer to make within five (5)
Business Days of the Master Servicer's receipt of such request. Subject to the
foregoing, the Special Servicer shall be relieved of any obligations with
respect to a Servicing Advance that it timely requests the Master Servicer to
make (regardless of whether or not the Master Servicer shall make such Servicing
Advance), other than an Emergency Advance or any other Servicing Advance with
respect to which it would, under the circumstances, be inconsistent with the
Servicing Standard for the Special Servicer to request that the Master Servicer
make such Servicing Advance (in lieu of making such Servicing Advance itself and
seeking reimbursement
-134-
<PAGE>
therefor as provided herein). The Master Servicer shall be entitled to
reimbursement for any Servicing Advance made by it at the direction of the
Special Servicer, together with Advance Interest thereon, at the same time, in
the same manner and to the same extent as the Master Servicer is entitled with
respect to any other Servicing Advance made thereby.
Notwithstanding the foregoing provisions of this Section 3.19(d)
or any other provision of this Agreement to the contrary, the Master Servicer
shall not be required to reimburse the Special Servicer out of the Master
Servicer's own funds for, or make at the Special Servicer's direction, any
Servicing Advance if the Master Servicer determines in its reasonable, good
faith judgment that the Servicing Advance which the Special Servicer is
directing the Master Servicer to reimburse it for or make hereunder, although
not characterized by the Special Servicer as a Nonrecoverable Servicing Advance,
is or would be, if made, a Nonrecoverable Servicing Advance. The Master Servicer
shall notify the Special Servicer and the Trustee in writing of such
determination. Such notice shall not obligate the Special Servicer to make such
Servicing Advance.
At such time as the aggregate Stated Principal Balance of the
Mortgage Pool (calculated without regard to any Specially Serviced Mortgage Loan
or REO Loan) is less than 5.0% of the Initial Pool Balance, each of the Master
Servicer and the Special Servicer shall (i) notify the other prior to making any
Advance with respect to any particular Mortgage Loan or REO Property, if such
Advance, together with all other Advances then outstanding in respect of the
same Mortgage Loan or REO Property, as the case may be, is in excess of 50% of
the then Appraised Value of the related Mortgaged Property or such REO Property,
as applicable, (ii) without otherwise changing or modifying its duties
hereunder, reasonably cooperate with the other party in providing to the other
party such information as the other party may reasonably request relating to
such Advance including, without limitation and to the extent not previously
provided, copies of the most recently obtained inspection report and appraisal
with respect to any particular Mortgage Loan or REO Property and (iii) provide
to the other party a reasonable description of any workout, modification,
waiver, amendment and/or assumption.
(e) The Master Servicer shall deliver to the Trustee for deposit
in the Distribution Account on each Master Servicer Remittance Date, without any
right of reimbursement therefor, an amount equal to the lesser of (i) the
aggregate of all Prepayment Interest Shortfalls incurred (reduced (to not less
than zero) by the aggregate of all Prepayment Interest Excesses collected) in
connection with Principal Prepayments received in respect of the Mortgage Pool
during the most recently ended Collection Period, and (ii) that portion of its
aggregate Master Servicing Fee for the related Collection Period that is, in the
case of each and every Mortgage Loan and REO Loan, calculated at 0.04% per
annum.
(f) Except under the same circumstances that it would be permitted
to waive a prepayment lockout provision in the subject Mortgage Loan pursuant to
Section 3.20(a), neither the Master Servicer nor the Special Servicer shall
consent to any Borrower's prepaying its Mortgage Loan, partially or in its
entirety, if the Borrower would be prohibited from doing so without such
consent.
(g) The Master Servicer shall not exercise any discretionary right
it has with respect to any Mortgage Loan pursuant to the related Mortgage Note
or Mortgage to apply any
-135-
<PAGE>
amounts maintained as an escrow or reserve to the principal balance of such
Mortgage Loan except in the case of a default thereunder.
(h) The Depositor shall pay, without any right of reimbursement
therefor, the post-Closing Date fees of the Rating Agencies for ongoing
surveillance of the Rated Certificates, but shall not be required to pay without
reimbursement the fees charged by any Rating Agency for a (i) rating
confirmation with respect to any Class of Rated Certificates or (ii) in
connection with any other particular matter.
(i) For so long as any Mortgage Loan is included in the Trust, the
Special Servicer shall not (i) acquire a direct interest in the related
Borrower, (ii) enter into a lending arrangement with the related Borrower or
(iii) enter into a lending arrangement with any Affiliate of the related
Borrower that is secured by an interest in the related Borrower.
SECTION 3.20. Modifications, Waivers, Amendments and Consents.
(a) The Special Servicer (as to Specially Serviced Mortgage Loans)
and, to the limited extent permitted below, the Master Servicer (as to
Performing Mortgage Loans) each may, consistent with the Servicing Standard,
agree to any modification, waiver or amendment of any term of, forgive or defer
the payment of interest (including, without limitation, Default Interest and
Additional Interest) on and principal of, forgive Default Charges and Prepayment
Premiums on, permit the release, addition or substitution of collateral
securing, and/or permit the release of the Borrower on or any guarantor of any
such Mortgage Loan it is required to service and administer hereunder, without
the consent of the Trustee or any Certificateholder, subject, however, to each
of the following limitations, conditions and restrictions:
(i) other than as expressly provided in Section 3.02 (with respect
to Default Charges), Section 3.08 (with respect to due-on-sale and
due-on-encumbrance clauses) and Section 3.20(f) (with respect to
Additional Interest), the Master Servicer shall not agree to any
modification, waiver or amendment of any term of, or take any of the
other acts referenced in this Section 3.20(a) with respect to any
Performing Mortgage Loan without the consent of the Special Servicer (it
being understood and agreed that (A) the Master Servicer shall promptly
provide the Special Servicer with all information that the Special
Servicer may reasonably request in order to withhold or grant any such
consent, (B) the Special Servicer (for no additional compensation) shall
decide whether to withhold or grant such consent in accordance with the
Servicing Standard and (C) if any such consent has not been expressly
denied within ten (10) Business Days of the Special Servicer's receipt
from the Master Servicer of all information reasonably requested thereby
in order to make an informed decision, such consent shall be deemed to
have been granted);
(ii) other than as provided in Sections 3.02 and 3.08, the Special
Servicer shall not, as applicable, agree to or consent to the Master
Servicer's agreeing to any modification, waiver or amendment of any term
of, or take or consent to the Master Servicer's taking any of the other
acts referenced in this Section 3.20(a) with respect to, any Mortgage
Loan that would affect the amount or timing of any related payment of
principal, interest or other amount payable thereunder or, in the Special
Servicer's good faith and reasonable judgment,
-136-
<PAGE>
would materially impair the security for such Mortgage Loan or reduce the
likelihood of timely payment of amounts due thereon, unless a material
default on such Mortgage Loan has occurred or, in the Special Servicer's
good faith and reasonable judgment, a default in respect of payment on
such Mortgage Loan is reasonably foreseeable, and such modification,
waiver, amendment or other action is reasonably likely to produce a
greater recovery to Certificateholders (as a collective whole) on a
present value basis (the relevant discounting of anticipated collections
that will be distributable to Certificateholders to be performed at the
related Net Mortgage Rate), than would liquidation;
(iii) the Special Servicer may not, in connection with any
particular extension, (A) extend or consent to the Master Servicer's
extending the maturity date of any Mortgage Loan beyond a date that is
two (2) years prior to the Rated Final Distribution Date, (B) in the case
of a Mortgage Loan secured solely by a Mortgage on the applicable
Borrower's leasehold interest in all or any material portion of the
related Mortgaged Property (but not by a Mortgage on the fee interest in
such Mortgaged Property or portion thereof), extend or consent to the
Master Servicer's extending the maturity date of such Mortgage Loan
beyond a date that is ten (10) years prior to the expiration of the
related Ground Lease or (C) in the case of a Mortgage Loan that is a
Balloon Mortgage Loan, extend or consent to the Master Servicer's
extending the maturity date beyond the amortization term thereof (as
determined without regard to the Balloon Payment);
(iv) neither the Master Servicer nor the Special Servicer shall
make or permit any modification, waiver or amendment of any term of, or
take any of the other acts referenced in this Section 3.20(a) or in
Section 3.08 with respect to, any Mortgage Loan that would cause an
Adverse REMIC Event for any REMIC Pool or an Adverse Grantor Trust Event
for any Grantor Trust Pool (it being acknowledged and agreed that neither
the Master Servicer nor the Special Servicer shall be liable for
decisions made under this subsection which were made in good faith; and,
unless it would be contrary to the Servicing Standard to do so, each of
the Master Servicer and the Special Servicer may rely on Opinions of
Counsel in making such decisions);
(v) unless required pursuant to the related Mortgage Loan
documents and applicable law, the Special Servicer shall not, as
applicable, permit or consent to the Master Servicer's permitting any
Borrower to add or substitute any collateral for an outstanding Mortgage
Loan, which additional or substitute collateral constitutes real
property, unless and until (A) the Special Servicer shall have obtained
written confirmation from each Rating Agency that such action would not
result in a qualification, downgrade or withdrawal of the rating then
assigned by such Rating Agency to any Class of Certificates and (B) the
Special Servicer shall have first determined in accordance with the
Servicing Standard, based upon a Phase I Environmental Assessment (and
such additional environmental testing as the Special Servicer deems
necessary and appropriate) prepared within the 12-month period prior to
such determination by an Independent Person who regularly conducts Phase
I Environmental Assessments (and such additional environmental testing),
at the expense of the Borrower, that such additional or substitute
collateral is in compliance with applicable environmental laws and
regulations and that there are no circumstances or conditions present
with respect to such new collateral relating to the use, management or
disposal of any Hazardous Materials for
-137-
<PAGE>
which investigation, testing, monitoring, containment, clean-up or
remediation would be required under any then applicable environmental
laws and/or regulations; and
(vi) unless required pursuant to the related Mortgage Loan
documents and applicable law, or unless the subject release is a de
minimis release in the nature of a curb-cut or easement, the Special
Servicer shall not, as applicable, release or consent to the Master
Servicer's releasing any collateral securing an outstanding Mortgage Loan
(including, without limitation, as part of a substitution of collateral),
except in connection with a payment in full or, subject to the other
provisions of this Section 3.20, a discounted payoff of such Mortgage
Loan, or except as provided in Section 3.09(d), or except where the
Rating Agencies have provided written confirmation that such action would
not result in a qualification, downgrade or withdrawal of the rating then
assigned by such Rating Agency to any Class of Certificates and (A)
either (1) the use of the collateral to be released will not, in the
Special Servicer's good faith and reasonable judgment, materially and
adversely affect the Net Cash Flow being generated by or the use of the
related Mortgaged Property, or (2) there is a corresponding principal
paydown of such Mortgage Loan in an amount at least equal to, or a
delivery of substitute collateral with an appraised value at least equal
to, the appraised value of the collateral to be released and (B) the
remaining Mortgaged Property and any substitute collateral is, in the
Special Servicer's good faith and reasonable judgment, adequate security
for the remaining Mortgage Loan;
provided that (x) the limitations, conditions and restrictions set forth in
clauses (i) through (vi) above shall not apply to any act or event (including,
without limitation, a release, substitution or addition of collateral) in
respect of any Mortgage Loan that either occurs automatically, or results from
the exercise of a unilateral option by the Borrower within the meaning of
Treasury Regulations Section 1.1001-3(c)(2)(iii), in any event under the terms
of such Mortgage Loan in effect on the Closing Date, and (y) notwithstanding
clauses (i) through (vi) above, neither the Master Servicer nor the Special
Servicer shall be required to oppose the confirmation of a plan in any
bankruptcy or similar proceeding involving a Borrower if in their reasonable and
good faith judgment such opposition would not ultimately prevent the
confirmation of such plan or one substantially similar.
(b) Neither the Master Servicer nor the Special Servicer shall
have any liability to the Trust, the Certificateholders or any other Person if
the Special Servicer's analysis and determination that the modification, waiver,
amendment or other action contemplated by Section 3.20(a) (with respect to
Specially Serviced Mortgage Loans) is reasonably likely to produce a greater
recovery to Certificateholders (as a collective whole) on a present value basis
than would liquidation, should prove to be wrong or incorrect, so long as the
analysis and determination were made on a reasonable basis in good faith by the
Special Servicer and the Special Servicer has complied with the Servicing
Standard in ascertaining the pertinent facts. Each such determination shall be
evidenced by an Officer's Certificate to such effect to be delivered by the
Special Servicer to the Trustee.
(c) Any payment of interest, which is deferred pursuant to Section
3.20(a), shall not, solely for purposes hereof, including, without limitation,
calculating monthly distributions to Certificateholders, be added to the unpaid
principal balance or Stated Principal Balance of the related Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so permit; provided,
-138-
<PAGE>
however, that this provision is in no way intended to affect amounts actually
due and owing from the related Borrower under such Mortgage Loan.
(d) The Master Servicer and the Special Servicer each may, as a
condition to its granting any request by a Borrower for consent, modification,
waiver or indulgence or any other matter or thing (except with respect to any
waiver pursuant to subsection (f) below), the granting of which is within the
Master Servicer's or Special Servicer's, as the case may be, discretion pursuant
to the terms of the instruments evidencing or securing the related Mortgage Loan
and is permitted by the terms of this Agreement, require that such Borrower pay
to it, as additional servicing compensation, a reasonable and customary fee (not
to exceed 1.0% of the unpaid principal balance of the related Mortgage Loan) for
the additional services performed in connection with such request, together with
any related costs and expenses incurred by it.
(e) All modifications, waivers, amendments and other actions
entered into or taken in respect of the Mortgage Loans pursuant to the preceding
subsections of this Section 3.20 shall be in writing. Each of the Master
Servicer and the Special Servicer shall notify the other such party, the Trustee
and the Controlling Class Representative, in writing, of any modification,
waiver, amendment or other action entered into or taken in respect of any
Mortgage Loan pursuant to this Section 3.20 and the date thereof, and shall
deliver to the Trustee or the related Custodian for deposit in the related
Mortgage File (with a copy to the other such party), an original counterpart of
the agreement relating to such modification, waiver, amendment or other action,
promptly (and in any event within ten (10) Business Days) following the
execution thereof. In addition, following the execution of any modification,
waiver or amendment agreed to by the Special Servicer pursuant to Section
3.20(a) above, the Special Servicer shall deliver to the Master Servicer, the
Trustee and the Controlling Class Representative an Officer's Certificate
setting forth in reasonable detail the basis of the determination made by it
pursuant to clause (i) of Section 3.20(a).
(f) With respect to any ARD Loan after its Anticipated Repayment
Date, the Master Servicer shall be permitted, in its discretion, to waive (such
waiver to be in writing addressed to the related Borrower, with a copy to the
Trustee) all or any accrued Additional Interest if, prior to the related
maturity date, the related Borrower has requested the right to prepay the
Mortgage Loan in full together with all other payments required by the Mortgage
Loan in connection with such prepayment except for such accrued Additional
Interest, provided that the Master Servicer's determination to waive the right
to such accrued Additional Interest is reasonably likely to produce a greater
payment to Certificateholders (as a collective whole) on a present value basis
(the relevant discounting of anticipated collections that will be distributable
to Certificateholders to be performed at the related Net Mortgage Rate) than a
refusal to waive the right to such accrued Additional Interest. The Master
Servicer will have no liability to the Trust, the Certificateholders or any
other person so long as such determination is based on such criteria.
(g) With respect to any Mortgage Loan which permits release of the
related Mortgaged Property through the exercise of a Defeasance Option, the
Master Servicer shall, to the extent consistent with and permitted by the
applicable Mortgage Loan documents, permit the exercise of such Defeasance
Option on any Due Date occurring more than two (2) years after the Startup Day
(the "Release Date") only upon the satisfaction of the following conditions:
-139-
<PAGE>
(i) No event of default shall exist under the related Mortgage
Note;
(ii) The Borrower shall have paid on such Release Date (A) all
interest accrued and unpaid on the principal balance of the related
Mortgage Note to and including the Release Date; (B) all other sums,
excluding scheduled interest or principal payments due under such
Mortgage Note after the Release Date and (C) any costs and expenses
incurred in connection with such release;
(iii) The Borrower shall have delivered Defeasance Collateral (or
cash sufficient for the Master Servicer to acquire Defeasance Collateral
(which the Master Servicer shall do promptly)) providing payments on or
prior to all successive scheduled payment dates from the Release Date to
the related Stated Maturity Date, and in an amount equal to or greater
than the scheduled payments due on such dates under the Mortgage Loan;
provided that, for purposes of the foregoing, in the case of an ARD Loan,
such Mortgage Loan shall be deemed to be a Balloon Loan that matures on
its Anticipated Repayment Date;
(iv) The Borrower shall have delivered a security agreement
granting the Trust a first priority security interest in the Defeasance
Collateral;
(v) The Master Servicer shall have received an Opinion of Counsel
from the related Borrower (which shall be an expense of the related
Borrower) to the effect that the Trust has a first priority security
interest in the Defeasance Collateral and that the assignment thereof is
valid and enforceable;
(vi) The Master Servicer shall have obtained at the related
Borrower's expense a certificate from an Independent certified public
accountant certifying that the Defeasance Collateral complies with the
requirements of the related Mortgage Note;
(vii) If such Mortgage Loan so requires and provides for the
related Borrower to pay the cost thereof, the Master Servicer shall have
obtained an Opinion of Counsel from the related Borrower to the effect
that such release would not cause any REMIC Pool to fail to qualify as a
REMIC, or either Grantor Trust Pool to fail to qualify as a Grantor
Trust, at any time that any Certificates are outstanding or cause a tax
to be imposed on the Trust Fund under the REMIC Provisions;
(viii) The Borrower shall have provided evidence to the Master
Servicer demonstrating that the lien of the related Mortgage is being
released to facilitate the disposition of the Mortgaged Property or
another customary commercial transaction, and not as part of an
arrangement to collateralize the Certificates with obligations that are
not real estate mortgages; and
(ix) The Master Servicer shall have delivered to each Rating
Agency copies of the Opinion of Counsel and certificate referenced in
clauses (g)(v) and (g)(vi) above and shall have obtained written
confirmation from each Rating Agency that the related Borrower's exercise
of such Defeasance Option would not result in a qualification, downgrade
or withdrawal of any rating then assigned by such Rating Agency to any
Class of Certificates.
-140-
<PAGE>
In connection with the related Borrower's exercise of the
Defeasance Option under any Defeasance Loan, subject to the related Mortgage
Loan documents, the Master Servicer shall not consent to a new Person becoming
the Borrower on the subject Defeasance Loan unless either such new Person is
acquiring the Mortgaged Property that was the initial security for the
Defeasance Loan or the Defeasance Loan is not, and was not at any time, a
personal liability (without regard to customary exceptions) of the Borrower.
SECTION 3.21. Transfer of Servicing Between Master Servicer and
Special Servicer; Record Keeping.
(a) Upon determining that a Servicing Transfer Event has occurred
with respect to any Mortgage Loan, the Master Servicer shall promptly give
notice thereof, and deliver the related Servicing File and, to the extent
received from the related Mortgage Loan Seller, a copy of the related Mortgage
File to the Special Servicer and shall use its best efforts to provide the
Special Servicer with all information, documents (or copies thereof) and records
(including records stored electronically on computer tapes, magnetic discs and
the like) relating to the Mortgage Loan and reasonably requested by the Special
Servicer to enable it to assume its functions hereunder with respect thereto
without acting through a Sub-Servicer. The Master Servicer shall use its best
efforts to comply with the preceding sentence within five (5) Business Days of
the occurrence of each related Servicing Transfer Event. The Special Servicer
may, with respect to any delinquent Mortgage Loan, prior to the occurrence of a
Servicing Transfer Event with respect thereto, request and obtain the foregoing
documents and information in order to perform its duties described in Section
3.02.
Upon determining that a Specially Serviced Mortgage Loan has
become a Corrected Mortgage Loan, the Special Servicer shall promptly give
notice thereof, and return the related Servicing File (or a copy thereof to the
extent a copy had been received by the Special Servicer), to the Master Servicer
(using its reasonable efforts to do so within five (5) Business Days) and upon
giving such notice, and returning such Servicing File (or copy thereof), to the
Master Servicer, the Special Servicer's obligation to service such Mortgage
Loan, and the Special Servicer's right to receive the Special Servicing Fee with
respect to such Mortgage Loan, shall terminate, and the obligations of the
Master Servicer to service and administer such Mortgage Loan shall resume.
Notwithstanding other provisions in this Agreement to the
contrary, the Master Servicer shall remain responsible for the accounting, data
collection, reporting (based on reports delivered by the Special Servicer) and
other basic Master Servicer administrative functions with respect to Specially
Serviced Mortgage Loans, provided that the Special Servicer shall establish
procedures for the Master Servicer as to the application of receipts and
tendered payments and shall have the exclusive responsibility for and authority
over all contacts (including billing and collection) with and notices to
Borrowers and similar matters relating to each Specially Serviced Mortgage Loan
and the related Mortgaged Property.
Also notwithstanding anything herein to the contrary, in
connection with the transfer to the Special Servicer of the servicing of a
Cross-Collateralized Mortgage Loan as a result of a Servicing Transfer Event or
the re-assumption of servicing responsibilities by the Master Servicer with
respect to any such Mortgage Loan upon its becoming a Corrected Mortgage Loan,
the Master Servicer and the Special Servicer shall each transfer to the other,
as and when applicable, the
-141-
<PAGE>
servicing of all other Cross-Collateralized Mortgage Loans constituting part of
the same Group; provided that no Cross-Collateralized Mortgage Loan may become a
Corrected Mortgage Loan at any time that a continuing Servicing Transfer Event
exists with respect to another Cross-Collateralized Mortgage Loan in the same
Group.
(b) In servicing any Specially Serviced Mortgage Loans, the
Special Servicer shall provide to the Trustee originals of documents
contemplated by the definition of "Mortgage File" and generated while such
Mortgage Loan is a Specially Serviced Mortgage Loan, for inclusion in the
related Mortgage File (with a copy of each such original to the Master
Servicer), and shall provide to the Trustee and the Master Servicer copies of
any additional related Mortgage Loan information, including correspondence with
the related Borrower generated while such Mortgage Loan is a Specially Serviced
Mortgage Loan.
(c) Notwithstanding anything in this Agreement to the contrary, in
the event that the Master Servicer and the Special Servicer are the same Person,
all notices, certificates, information, consents and documents required to be
given or delivered by the Master Servicer to the Special Servicer or vice versa
shall be deemed to be given or delivered, as the case may be, without the
necessity of any action on such Person's part.
SECTION 3.22. Sub-Servicing Agreements.
(a) The Master Servicer and, subject to Section 3.22(f), the
Special Servicer, may each enter into Sub-Servicing Agreements to provide for
the performance by third parties of any or all of its obligations hereunder,
provided that, in each case, the Sub-Servicing Agreement: (i) is not
inconsistent with this Agreement and does not subject the Trust to any
liability; (ii) expressly or effectively provides that if the Master Servicer or
Special Servicer, as the case may be, shall for any reason no longer act in such
capacity hereunder (including, without limitation, by reason of an Event of
Default), any successor to the Master Servicer or the Special Servicer, as the
case may be, hereunder (including the Trustee if the Trustee has become such
successor pursuant to Section 7.02) may thereupon either assume all of the
rights and, except to the extent they arose prior to the date of assumption,
obligations of the Master Servicer or Special Servicer, as the case may be,
under such agreement or, subject to the provisions of Section 3.22(d), terminate
such rights and obligations, in either case without payment of any fee except as
set forth in Section 3.22(d); (iii) prohibits the Sub-Servicer from modifying
any Mortgage Loan or commencing any foreclosure or similar proceedings with
respect to any Mortgaged Property without the consent of the Master Servicer or
the Special Servicer; (iv) in the case of a Sub-Servicing Agreement entered into
by the Master Servicer, expressly or effectively provides (unless the Special
Servicer agrees otherwise) that such agreement shall be suspended or terminated
with respect to any Mortgage Loan serviced thereunder at the time such Mortgage
Loan becomes a Specially Serviced Mortgage Loan, and also expressly or
effectively provides (unless the Special Servicer agrees otherwise) that the
Sub-Servicer shall not receive or accrue an entitlement to any sub-servicing
compensation in respect of a Specially Serviced Mortgage Loan or an REO Loan;
and (v) in the case of a Sub-Servicing Agreement entered into by the Special
Servicer, relates only to Specially Serviced Mortgage Loans or REO Properties
and expressly or effectively provides that such agreement shall terminate with
respect to any such Mortgage Loan that becomes a Corrected Mortgage Loan.
References in this Agreement to actions taken or to be taken by the Master
Servicer or the Special Servicer, as the case may be, include actions taken or
to be
-142-
<PAGE>
taken by a Sub-Servicer on behalf of the Master Servicer or the Special
Servicer, as the case may be; and, in connection therewith, all amounts advanced
by any Sub-Servicer to satisfy the obligations of the Master Servicer or the
Special Servicer, as the case may be, hereunder to make Advances shall be deemed
to have been advanced by the Master Servicer or the Special Servicer, as the
case may be, out of its own funds and, accordingly, such Advances shall be
recoverable by such Sub-Servicer in the same manner and out of the same funds as
if such Sub-Servicer were the Master Servicer or the Special Servicer, as the
case may be, and, for so long as they are outstanding, such Advances shall
accrue interest in accordance with Section 3.11(f) and/or Section 4.03(d), such
interest to be allocable between the Master Servicer or the Special Servicer, as
the case may be, and such Sub-Servicer as they may agree. For purposes of this
Agreement, the Master Servicer and the Special Servicer each shall be deemed to
have received any payment when a Sub-Servicer retained by it receives such
payment. The Master Servicer and the Special Servicer each shall notify the
other such party, the Trustee and the Depositor in writing promptly of the
appointment by it of any Sub-Servicer, and shall deliver to the Trustee copies
of all Sub-Servicing Agreements, and any amendments thereto and modifications
thereof, entered into by it promptly upon its execution and delivery of such
documents; provided that the foregoing requirements set forth in this sentence
shall not apply in the case of the Sub-Servicing Agreements in effect or being
negotiated as of the Closing Date that are listed on Schedule II hereto or in
the case of the Sub-Servicers thereunder.
(b) Each Sub-Servicer (i) shall be authorized to transact business
in the state or states in which the Mortgaged Properties for the Mortgage Loans
it is to service are situated, if and to the extent required by applicable law,
and (ii) shall be an approved conventional seller/servicer of multifamily
mortgage loans for Freddie Mac or Fannie Mae or a HUD-Approved Servicer.
(c) The Master Servicer and the Special Servicer, for the benefit
of the Trustee and the Certificateholders, shall (at no expense to the Trustee,
the Certificateholders or the Trust) each monitor the performance and enforce
the obligations of its Sub-Servicers under the related Sub-Servicing
Agreements. Such enforcement, including, without limitation, the legal
prosecution of claims, termination of Sub-Servicing Agreements in accordance
with their respective terms and the terms of this Agreement, and the pursuit of
other appropriate remedies, shall be in such form and carried out to such an
extent and at such time as the Master Servicer or the Special Servicer, as the
case may be, in its good faith business judgment, would require were it the
owner of the Mortgage Loans.
(d) With respect to the Sub-Servicing Agreements in effect or
being negotiated as of the Closing Date that are listed on Schedule II hereto,
the initial Master Servicer hereby agrees that it shall not, in its capacity as
Master Servicer, terminate any Sub-Servicer thereunder without cause. In the
event of the resignation, removal or other termination of the initial Master
Servicer (or any successor Master Servicer) hereunder for any reason, the
successor to the initial Master Servicer (or to such successor Master Servicer)
shall elect, with respect to any Sub-Servicing Agreement referred to in the
preceding sentence existing at the time of such termination (i) to assume the
rights and obligations of the predecessor Master Servicer under such
Sub-Servicing Agreement and continue the sub-servicing arrangements thereunder
on the same terms (including without limitation the obligation to pay the same
sub-servicing fee), (ii) to enter into a new Sub-Servicing Agreement with the
related Sub-Servicer and on such terms as the new Master Servicer and such
Sub-Servicer shall mutually agree (it being understood that such Sub-Servicer is
under no obligation to accept any
-143-
<PAGE>
such new Sub-Servicing Agreement, to enter into or continue negotiations with
the new Master Servicer or to resign if such new Sub-Servicing Agreement is not
mutually agreed upon) or (iii) to terminate such Sub-Servicing Agreement without
cause, provided that no Sub-Servicer under a Sub-Servicing Agreement referred
to in the first sentence of this Section 3.22(d), may be terminated without
cause unless it receives Sub-Servicer Termination Compensation. For purposes
hereof, a Sub-Servicer under a Sub-Servicing Agreement referred to in the first
sentence of this Section 3.22(d), shall receive "Sub-Servicer Termination
Compensation" if any successor Master Servicer elects to terminate such
Sub-Servicer without cause, in which case such successor Master Servicer shall
pay to such Sub-Servicer a fee (a "Sub-Servicer Termination Fee") in an amount
equal to six (6) times the product of (i) the Primary Servicing Fee Rate in
effect under such Sub-Servicing Agreement at the time of such Sub-Servicer's
termination and (ii) the then-current outstanding principal balance of the
Mortgage Loans serviced by such Sub-Servicer. Nothing in the foregoing
provisions of this Section 3.22(d) shall limit the ability of the initial or a
successor Master Servicer to terminate a Sub-Servicer at any time for cause;
provided, however, that the parties hereto understand and agree that the refusal
or failure of a Sub-Servicer under a Sub-Servicing Agreement referred to in the
first sentence of this Section 3.22(d), to enter into or continue negotiations
with a successor Master Servicer concerning a new Sub-Servicing Agreement shall
not constitute cause for termination. It shall be the corporate obligation (not
reimbursable by the Trust or any of the other parties to this Agreement) of the
Person, who as successor Master Servicer, terminates any Sub-Servicer without
cause, to pay Sub-Servicer Termination Compensation to such terminated
Sub-Servicer. References in this Section 3.22(d) to Master Servicer, successor
Master Servicer or subsequent successor Master Servicer shall mean the Trustee,
if it is then Master Servicer, successor Master Servicer or subsequent Master
Servicer pursuant to the operation of Section 7.02.
(e) In the event the Trustee or its designee assumes the rights
and obligations of the Master Servicer or the Special Servicer under any
Sub-Servicing Agreement, the Master Servicer or the Special Servicer, as the
case may be, at its expense shall, upon request of the Trustee, deliver to the
assuming party all documents and records relating to such Sub-Servicing
Agreement and the Mortgage Loans then being serviced thereunder and an
accounting of amounts collected and held on behalf of it thereunder, and
otherwise use its best efforts to effect the orderly and efficient transfer of
the Sub-Servicing Agreement to the assuming party.
(f) Notwithstanding anything herein to the contrary, if the
Special Servicer intends to retain a Sub-Servicer to perform substantially all
of its duties hereunder and such Sub-Servicer has not been assigned a special
servicer rating by Fitch (to the extent Fitch still provides such ratings at
that time) at least equal to the special servicer rating then assigned to the
Special Servicer, then the Special Servicer shall not retain such Sub-Servicer
until it has obtained written confirmation from each Rating Agency that the
retention of such Sub-Servicer will not result in a qualification, downgrade or
withdrawal of any rating then assigned by such Rating Agency to the
Certificates. The Special Servicer shall provide each Rating Agency with notice
of its execution and delivery of a Sub-Servicing Agreement, which notice shall
include the name and address of the related Sub-Servicer and a list of the
Mortgage Loans covered.
(g) Notwithstanding any Sub-Servicing Agreement, the Master
Servicer and the Special Servicer shall each remain obligated and liable to the
Trustee and the Certificateholders for the performance of its obligations and
duties under this Agreement in accordance with the provisions
-144-
<PAGE>
hereof to the same extent and under the same terms and conditions as if it alone
were servicing and administering the Mortgage Loans for which it is responsible.
SECTION 3.23. Controlling Class Representative.
(a) The Holders (or, in the case of Book-Entry Certificates, the
Certificate Owners) of Certificates representing more than 50% of the Class
Principal Balance of the Controlling Class shall be entitled in accordance with
this Section 3.23 to select a representative (the "Controlling Class
Representative") having the rights and powers specified in this Agreement
(including those specified in Section 3.24) or to replace an existing
Controlling Class Representative. Upon (i) the receipt by the Trustee of written
requests for the selection of a Controlling Class Representative from the
Holders (or, in the case of Book-Entry Certificates, the Certificate Owners) of
Certificates representing more than 50% of the Class Principal Balance of the
Controlling Class, (ii) the resignation or removal of the Person acting as
Controlling Class Representative or (iii) a determination by the Trustee that
the Controlling Class has changed, the Trustee shall promptly notify the
Depositor and the Holders (and, in the case of Book-Entry Certificates, to the
extent actually known to a Responsible Officer of the Trustee or identified
thereto by the Depository or the Depository Participants, the Certificate
Owners) of the Controlling Class that they may select a Controlling Class
Representative. Such notice shall set forth the process established by the
Trustee in order to select a Controlling Class Representative, which process may
include the designation of the Controlling Class Representative by the Majority
Certificateholder of the Controlling Class by a writing delivered to the
Trustee. No appointment of any Person as a Controlling Class Representative
shall be effective until such Person provides the Trustee, the Master Servicer
and the Special Servicer with written confirmation of its acceptance of such
appointment, an address and telecopy number for the delivery of notices and
other correspondence and a list of officers or employees of such Person with
whom the parties to this Agreement may deal (including their names, titles, work
addresses and telecopy numbers).
(b) Within ten (10) Business Days (or as soon thereafter as
practicable if the Controlling Class consists of Book-Entry Certificates) of
receiving a request therefor from the Master Servicer or Special Servicer, the
Trustee shall deliver to the requesting party the identity of the Controlling
Class Representative and a list of each Holder (or, in the case of Book-Entry
Certificates, to the extent actually known to a Responsible Officer of the
Trustee or identified thereto by the Depository or the Depository Participants,
each Certificate Owner) of the Controlling Class, including, in each case, names
and addresses. With respect to such information, the Trustee shall be entitled
to conclusively rely on information provided to it by the Holders (or, in the
case of Book- Entry Certificates, subject to Section 5.06, by the Depository or
the Certificate Owners) of such Certificates, and the Master Servicer and the
Special Servicer shall be entitled to rely on such information provided by the
Trustee with respect to any obligation or right hereunder that the Master
Servicer and the Special Servicer may have to deliver information or otherwise
communicate with the Controlling Class Representative or any of the Holders (or,
if applicable, Certificate Owners) of the Controlling Class. In addition to the
foregoing, within two (2) Business Days of the selection, resignation or removal
of a Controlling Class Representative, the Trustee shall notify the other
parties to this Agreement of such event. The expenses incurred by the Trustee in
connection with obtaining information from the Depository or Depository
Participants with respect to any Book-Entry
-145-
<PAGE>
Certificate shall be expenses of the Trust payable out of the Collection Account
pursuant to Section 3.05(a).
(c) A Controlling Class Representative may at any time resign as
such by giving written notice to the Trustee, the Master Servicer, the Special
Servicer and each Holder (or, in the case of Book-Entry Certificates,
Certificate Owner) of the Controlling Class. The Holders (or, in the case of
Book-Entry Certificates, the Certificate Owners) of Certificates representing
more than 50% of the Class Principal Balance of the Controlling Class shall be
entitled to remove any existing Controlling Class Representative by giving
written notice to the Trustee, the Master Servicer, the Special Servicer and
such existing Controlling Class Representative.
(d) Once a Controlling Class Representative has been selected
pursuant to this Section 3.23, each of the parties to this Agreement and each
Certificateholder (or Certificate Owner, if applicable) shall be entitled to
rely on such selection unless a majority of the Holders (or, in the case of
Book-Entry Certificates, the Certificate Owners) of the Controlling Class, by
aggregate Certificate Principal Balance, or such Controlling Class
Representative, as applicable, shall have notified the Trustee and each other
Holder (or, in the case of Book-Entry Certificates, Certificate Owner) of the
Controlling Class, in writing, of the resignation or removal of such Controlling
Class Representative.
(e) Any and all expenses of the Controlling Class Representative
shall be borne by the Holders (or, if applicable, the Certificate Owners) of
Certificates of the Controlling Class, pro rata according to their respective
Percentage Interests in such Class, and not by the Trust. Notwithstanding the
foregoing, if a claim is made against the Controlling Class Representative by a
Borrower with respect to this Agreement or any particular Mortgage Loan, the
Controlling Class Representative shall immediately notify the Trustee, the
Master Servicer and the Special Servicer, whereupon (if the Special Servicer or
the Trust are also named parties to the same action and, in the sole judgment of
the Special Servicer, (i) the Controlling Class Representative had acted in good
faith, without gross negligence or willful misfeasance with regard to the
particular matter, and (ii) there is no potential for the Special Servicer or
the Trust to be an adverse party in such action as regards the Controlling Class
Representative) the Special Servicer on behalf of the Trust shall, subject to
Section 6.03, assume the defense of any such claim against the Controlling Class
Representative. This provision shall survive the termination of this Agreement
and the termination or resignation of the Controlling Class Representative.
SECTION 3.24. Certain Rights and Powers of the Controlling Class
Representative.
(a) No later than thirty (30) days after a Servicing Transfer
Event for a Specially Serviced Mortgage Loan, the Special Servicer shall,
subject to Section 3.24(b), deliver to each Rating Agency, the Trustee and the
Controlling Class Representative a report (the "Asset Status Report") with
respect to such Mortgage Loan and the related Mortgaged Property. Such Asset
Status Report shall include the following information to the extent reasonably
determinable:
(i) a summary of the status of such Specially Serviced Mortgage
Loan;
-146-
<PAGE>
(ii) a discussion of the legal and environmental considerations
reasonably known to the Special Servicer, consistent with the Servicing
Standard, that are applicable to the exercise of remedies and to the
enforcement of any related guaranties or other collateral for such
Specially Serviced Mortgage Loan and whether outside legal counsel has
been retained;
(iii) the most current rent roll and income or operating statement
available for the related Mortgaged Property;
(iv) the Appraised Value of the related Mortgaged Property,
together with the assumptions used in the calculation thereof;
(v) a summary of the Special Servicer's recommended action with
respect to such Specially Serviced Mortgage Loan; and
(vi) such other information as the Special Servicer deems relevant
in light of the Servicing Standard.
If the Controlling Class Representative disapproves of an Asset
Status Report, the Controlling Class Representative shall, within ten (10)
Business Days of receiving such Asset Status Report, provide notice in writing
to the Special Servicer of such disapproval, and the Special Servicer shall,
subject to Section 3.24(b), revise such Asset Status Report and deliver to the
Controlling Class Representative, the Trustee and the Rating Agencies a new
Asset Status Report as soon as practicable, but in no event later than thirty
(30) days after such disapproval. If the Controlling Class Representative does
not disapprove of an Asset Status Report within such ten (10) Business Day
period, the Special Servicer shall implement the recommended action as outlined
in such Asset Status Report (provided that the Special Servicer shall not take
any action that is contrary to applicable law or the terms of the applicable
loan documents). The Special Servicer shall, subject to Section 3.24(b), revise
such Asset Status Report as provided above in this paragraph until the earliest
of (a) the failure of the Controlling Class Representative to disapprove such
revised Asset Status Report in writing within ten (10) Business Days of its
receipt thereof; (b) a determination by the Special Servicer, as set forth
below, that any affirmative disapproval of an Asset Status Report is not in the
best interest of all the Certificateholders pursuant to the Servicing Standard
or (c) the passage of seventy (70) days from the date of preparation of the
first version of the Asset Status Report. The Special Servicer may, from time to
time, subject to Section 3.24(b), modify any Asset Status Report it has
previously delivered and implement the new action in such revised report so long
as such revised report has been prepared, reviewed and not rejected as provided
above.
Notwithstanding the prior paragraph, the Special Servicer may: (i)
take any action set forth in an Asset Status Report before the expiration of the
ten (10) Business Day period during which the Controlling Class Representative
may reject such report if (A) the Special Servicer has reasonably determined
that failure to take such action would materially and adversely affect the
interests of the Certificateholders and (B) it has made a reasonable effort to
contact the Controlling Class Representative; and (ii) determine whether any
affirmative disapproval of an Asset Status Report is not in the best interest of
all the Certificateholders pursuant to the Servicing Standard. Upon making any
such determination referred to in clause (ii) of the prior sentence, the Special
Servicer shall notify the Trustee of such determination and deliver to the
Trustee a proposed notice
-147-
<PAGE>
to Certificateholders which is to include a copy of the relevant Asset Status
Report. The Trustee shall thereupon send such notice to all Certificateholders;
and, if the Holders of Certificates representing a majority of the Voting Rights
fail, within ten (10) Business Days of the Trustee's sending such notice, to
reject such Asset Status Report, the Special Servicer shall implement the same.
If the Asset Status Report is rejected within such ten (10) Business Day period
by the Holders of Certificates representing a majority of the Voting Rights, the
Special Servicer shall, subject to Section 3.24(b), revise such Asset Status
Report as described above. The Trustee shall be entitled to reimbursement from
the Trust for the reasonable out-of-pocket expenses of providing such notices.
The Special Servicer may not take any action inconsistent with an
Asset Status Report that has been adopted as described above, unless such action
would be required in order to act in accordance with the Servicing Standard.
(b) Notwithstanding anything herein to the contrary, any action
recommended by the Special Servicer in an Asset Status Report (or any revision
thereof) shall be consistent with the Servicing Standard and the other sections
of this Agreement, and the Controlling Class Representative may not direct the
Special Servicer to act in any manner (and the Special Servicer shall disregard
any such direction) that would:
(i) require or cause the Special Servicer to violate the terms of
a Specially Serviced Mortgage Loan, applicable law or any provision of
this Agreement, including the Special Servicer's obligation to act in
accordance with the Servicing Standard; or
(ii) result in an Adverse REMIC Event or an Adverse Grantor Trust
Event; or
(iii) expose the Master Servicer, the Special Servicer, the
Depositor, any Mortgage Loan Seller, the Trust, the Trustee or their
Affiliates, officers, directors, employees or agents to any claim, suit
or liability; or
(iv) materially expand the scope of the Special Servicer's, the
Master Servicer's or the Trustee's responsibilities under this Agreement.
In addition, the Special Servicer shall not have any obligation to
consult with or notify any Controlling Class Representative prior to acting, and
the provisions of this Agreement requiring such shall be of no effect, during
the period prior to the initial selection of a Controlling Class Representative
and, if any Controlling Class Representative resigns or is removed, during the
period following such resignation or removal until a replacement is selected.
(c) The Controlling Class Representative will have no liability to
the Certificateholders for any action taken, or for refraining from the taking
of any action, in good faith pursuant to this Agreement, or for errors in
judgment; provided, however, that the Controlling Class Representative will not
be protected against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of reckless disregard of its obligations or duties. Each
Certificateholder acknowledges and agrees, by its acceptance of its
Certificates, that the Controlling Class Representative may have special
relationships and interests that conflict with those of Holders of one or more
Classes of Certificates,
-148-
<PAGE>
that the Controlling Class Representative may act solely in the interests of the
Holders of the Controlling Class, that the Controlling Class Representative does
not have any duties to the Holders of any Class of Certificates other than the
Controlling Class, that the Controlling Class Representative may take actions
that favor interests of the Holders of the Controlling Class over the interests
of the Holders of one or more other Classes of Certificates, that the
Controlling Class Representative shall not be deemed to have been grossly
negligent or reckless, or to have acted in bad faith or engaged in willful
misfeasance, by reason of its having acted solely in the interests of the
Holders of the Controlling Class, and that the Controlling Class Representative
shall have no liability whatsoever for having so acted, and no Certificateholder
may take any action whatsoever against the Controlling Class Representative or
any director, officer, employee, agent or principal thereof for having so acted.
SECTION 3.25. Designation of Special Servicer by the Majority
Certificateholder of the Controlling Class.
The Majority Certificateholder of the Controlling Class may at any
time and from time to time replace any existing Special Servicer or any Special
Servicer that has resigned or otherwise ceased to serve as Special Servicer.
Such Majority Certificateholder shall so designate a Person to so serve by the
delivery to the Trustee of a written notice stating such designation, subject to
the approval of the Trustee, which approval shall not be unreasonably withheld.
The Trustee shall, promptly after receiving any such notice, so notify the
Rating Agencies. If the Trustee approves the designated Person (based upon the
servicing qualifications and financial condition of such designated Person) as a
replacement Special Servicer, which approval shall not be unreasonably withheld,
the designated Person shall become the Special Servicer as of the date the
Trustee shall have received: (i) written confirmation from each Rating Agency
stating that if the designated Person were to serve as Special Servicer
hereunder, none of the then-current ratings assigned by such Rating Agency to
the respective Classes of the Certificates would be qualified, downgraded or
withdrawn as a result thereof; (ii) a written acceptance of all obligations of
the Special Servicer under this Agreement, executed by the designated Person;
and (iii) an Opinion of Counsel (at the expense of the Person designated to
become the Special Servicer or at the expense of the Majority Certificateholder
that made the designation) to the effect that the designation of such Person to
serve as Special Servicer is in compliance with this Section 3.25, that upon the
execution and delivery of the written acceptance referred to in the immediately
preceding clause (ii), the designated Person shall be bound by the terms of this
Agreement and that this Agreement shall be enforceable against the designated
Person in accordance with its terms. The existing Special Servicer shall be
deemed to have resigned simultaneously with such designated Person's becoming
the Special Servicer hereunder; provided, however, that (i) the terminated
Special Servicer shall continue to be entitled to receive all amounts accrued or
owing to it under this Agreement on or prior to the effective date of such
resignation, whether in respect of Servicing Advances or otherwise, (ii) if it
was terminated without cause, it shall be entitled to a portion of certain
Workout Fees thereafter received on the Corrected Mortgage Loans (but only if
and to the extent permitted by Section 3.11(c)), and (iii) it and its directors,
officers, employees and agents shall continue to be entitled to the benefits of
Section 6.03, notwithstanding any such resignation. Such terminated Special
Servicer shall cooperate with the Trustee and the replacement Special Servicer
in effecting the termination of its responsibilities and rights hereunder,
including, without limitation, the transfer within two (2) Business Days to the
replacement Special Servicer for administration by it of all cash amounts that
shall at the time be or should have been credited by the terminated Special
Servicer to the REO Account or delivered to the Master Servicer
-149-
<PAGE>
or that are thereafter received by the terminated Special Servicer with respect
to Specially Serviced Mortgage Loans and REO Properties.
SECTION 3.26. No Solicitation of Prepayments.
Neither the Master Servicer nor the Special Servicer shall solicit
or permit any Affiliate to solicit, either directly or indirectly, prepayments
of the Mortgage Loans; provided however, that the foregoing restriction shall
not be interpreted to prohibit such solicitation by a division or department of,
or an Affiliate of, the Master Servicer or the Special Servicer if such
solicitation occurs incidentally in the normal course of business and such
solicitation is not conducted, in whole or in part, (i) by a Person engaged at
any time in activities relating to the servicing of Mortgage Loans or (ii) based
upon or otherwise with the benefit of proprietary non-public information
obtained by or through the Master Servicer or Special Servicer or from
documentation relating to the Certificates, including without limitation any
listing of the Mortgage Loans or related Borrowers or Mortgaged Properties. Each
Sub-Servicing Agreement shall contain a provision identical to the foregoing
with respect to the related Sub-Servicer.
-150-
<PAGE>
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS AND RELATED MATTERS
SECTION 4.01. Distributions on the Certificates.
(a) On each Distribution Date, the Trustee shall apply amounts
on deposit in the Distribution Account, in each case to the extent of the
remaining portion of the Available Distribution Amount, in the following order
of priority:
(i) to distributions of interest to the Holders of the
Class A-1 Certificates, the Holders of the Class A-2 Certificates and
the Holders of the Class X Certificates, pro rata in accordance with
the respective amounts of Distributable Certificate Interest payable in
respect of such Classes of Certificates described in this clause (i),
in an amount equal to all Distributable Certificate Interest in respect
of each such Class of Certificates for such Distribution Date and, to
the extent not previously paid, for all prior Distribution Dates;
(ii) to distributions of principal, first to the Holders
of the Class A-1 Certificates and second to the Holders of the Class
A-2 Certificates, in each case, in an amount (not to exceed the Class
Principal Balance of such Class of Certificates outstanding immediately
prior to such Distribution Date) equal to the entire remaining
Principal Distribution Amount for such Distribution Date;
(iii) to distributions to the Holders of the Class A-1
Certificates and the Holders of the Class A-2 Certificates, pro rata in
accordance with the respective amounts of previously allocated Realized
Losses and Additional Trust Fund Expenses reimbursable in respect of
such Classes of Certificates described in this clause (iii), in an
amount equal to, and in reimbursement of, all Realized Losses and
Additional Trust Fund Expenses, if any, that were previously allocated
to each such Class of Certificates and that remain unreimbursed
immediately prior to such Distribution Date;
(iv) to distributions of interest to the Holders of the
Class B Certificates in an amount equal to all Distributable
Certificate Interest in respect of such Class of Certificates for such
Distribution Date and, to the extent not previously paid, for all prior
Distribution Dates;
(v) if the Class Principal Balances of the Class A-1
and Class A-2 Certificates have been reduced to zero, to distributions
of principal to the Holders of the Class B Certificates, in an amount
(not to exceed the Class Principal Balance of the Class B Certificates
outstanding immediately prior to such Distribution Date) equal to the
entire remaining Principal Distribution Amount for such Distribution
Date;
-151-
<PAGE>
(vi) to distributions to the Holders of the Class B
Certificates, in an amount equal to, and in reimbursement of, all
Realized Losses and Additional Trust Fund Expenses, if any, that were
previously allocated to the Class B Certificates and that remain
unreimbursed immediately prior to such Distribution Date;
(vii) to distributions of interest to the Holders of the
Class C Certificates, in an amount equal to all Distributable
Certificate Interest in respect of such Class of Certificates for such
Distribution Date and, to the extent not previously paid, for all prior
Distribution Dates;
(viii) if the Class Principal Balances of the Class A-1,
Class A-2 and Class B Certificates have been reduced to zero, to
distributions of principal to the Holders of the Class C Certificates,
in an amount (not to exceed the Class Principal Balance of the Class C
Certificates outstanding immediately prior to such Distribution Date)
equal to the entire remaining Principal Distribution Amount for such
Distribution Date;
(ix) to distributions to the Holders of the Class C
Certificates, in an amount equal to, and in reimbursement of, all
Realized Losses and Additional Trust Fund Expenses, if any, that were
previously allocated to the Class C Certificates and that remain
unreimbursed immediately prior to such Distribution Date;
(x) to distributions of interest to the Holders of the
Class D Certificates, in an amount equal to all Distributable
Certificate Interest in respect of such Class of Certificates for such
Distribution Date and, to the extent not previously paid, for all prior
Distribution Dates;
(xi) if the Class Principal Balances of the Class A-1,
Class A-2, Class B and Class C Certificates have been reduced to zero,
to distributions of principal to the Holders of the Class D
Certificates, in an amount (not to exceed the Class Principal Balance
of the Class D Certificates outstanding immediately prior to such
Distribution Date) equal to the entire remaining Principal Distribution
Amount for such Distribution Date;
(xii) to distributions to the Holders of the Class D
Certificates, in an amount equal to, and in reimbursement of, all
Realized Losses and Additional Trust Fund Expenses, if any, that were
previously allocated to the Class D Certificates and that remain
unreimbursed immediately prior to such Distribution Date;
(xiii) to distributions of interest to the Holders of the
Class E Certificates, in an amount equal to all Distributable
Certificate Interest in respect of such Class of Certificates for such
Distribution Date and, to the extent not previously paid, for all prior
Distribution Dates;
(xiv) if the Class Principal Balances of the Class A-1,
Class A-2, Class B, Class C and Class D Certificates have been reduced
to zero, to distributions of principal to the Holders of the Class E
Certificates, in an amount (not to exceed the Class Principal
-152-
<PAGE>
Balance of the Class E Certificates outstanding immediately prior to
such Distribution Date) equal to the entire remaining Principal
Distribution Amount for such Distribution Date;
(xv) to distributions to the Holders of the Class E
Certificates, in an amount equal to, and in reimbursement of, all
Realized Losses and Additional Trust Fund Expenses, if any, that were
previously allocated to the Class E Certificates and that remain
unreimbursed immediately prior to such Distribution Date;
(xvi) to distributions of interest to the Holders of the
Class F Certificates, in an amount equal to all Distributable
Certificate Interest in respect of such Class of Certificates for such
Distribution Date and, to the extent not previously paid, for all prior
Distribution Dates;
(xvii) if the Class Principal Balances of the Class A-1,
Class A-2, Class B, Class C, Class D, and Class E Certificates have
been reduced to zero, to distributions of principal to the Holders of
the Class F Certificates, in an amount (not to exceed the Class
Principal Balance of the Class F Certificates outstanding immediately
prior to such Distribution Date) equal to the entire remaining
Principal Distribution Amount for such Distribution Date;
(xviii) to distributions to the Holders of the Class F
Certificates, in an amount equal to, and in reimbursement of, all
Realized Losses and Additional Trust Fund Expenses, if any, that were
previously allocated to the Class F Certificates and that remain
unreimbursed immediately prior to such Distribution Date;
(xix) to distributions of interest to the Holders of the
Class G Certificates, in an amount equal to all Distributable
Certificate Interest in respect of such Class of Certificates for such
Distribution Date and, to the extent not previously paid, for all prior
Distribution Dates;
(xx) if the Class Principal Balances of the Class A-1,
Class A-2, Class B, Class C, Class D, Class E and Class F Certificates
have been reduced to zero, to distributions of principal to the Holders
of the Class G Certificates, in an amount (not to exceed the Class
Principal Balance of the Class G Certificates outstanding immediately
prior to such Distribution Date) equal to the entire remaining
Principal Distribution Amount for such Distribution Date;
(xxi) to distributions to the Holders of the Class G
Certificates, in an amount equal to, and in reimbursement of, all
Realized Losses and Additional Trust Fund Expenses, if any, that were
previously allocated to the Class G Certificates and that remain
unreimbursed immediately prior to such Distribution Date;
-153-
<PAGE>
(xxii) to distributions of interest to the Holders of the
Class H Certificates, in an amount equal to all Distributable
Certificate Interest in respect of such Class of Certificates for such
Distribution Date and, to the extent not previously paid, for all prior
Distribution Dates;
(xxiii) if the Class Principal Balances of the Class A-1,
Class A-2, Class B, Class C, Class D, Class E, Class F and Class G
Certificates have been reduced to zero, to distributions of principal
to the Holders of the Class H Certificates, in an amount (not to exceed
the Class Principal Balance of the Class H Certificates outstanding
immediately prior to such Distribution Date) equal to the entire
remaining Principal Distribution Amount for such Distribution Date;
(xxiv) to distributions to the Holders of the Class H
Certificates, in an amount equal to, and in reimbursement of, all
Realized Losses and Additional Trust Fund Expenses, if any, that were
previously allocated to the Class H Certificates and that remain
unreimbursed immediately prior to such Distribution Date;
(xxv) to distributions of interest to the Holders of the
Class J Certificates, in an amount equal to all Distributable
Certificate Interest in respect of such Class of Certificates for such
Distribution Date and, to the extent not previously paid, for all prior
Distribution Dates;
(xxvi) if the Class Principal Balances of the Class A-1,
Class A-2, Class B, Class C, Class D, Class E, Class F, Class G and
Class H Certificates have been reduced to zero, to distributions of
principal to the Holders of the Class J Certificates, in an amount (not
to exceed the Class Principal Balance of the Class J Certificates
outstanding immediately prior to such Distribution Date) equal to the
entire remaining Principal Distribution Amount for such Distribution
Date;
(xxvii) to distributions to the Holders of the Class J
Certificates, in an amount equal to, and in reimbursement of, all
Realized Losses and Additional Trust Fund Expenses, if any, that were
previously allocated to the Class J Certificates and that remain
unreimbursed immediately prior to such Distribution Date;
(xxviii) to distributions of interest to the Holders of the
Class K Certificates, in an amount equal to all Distributable
Certificate Interest in respect of such Class of Certificates for such
Distribution Date and, to the extent not previously paid, for all prior
Distribution Dates;
(xxix) if the Class Principal Balances of the Class A-1,
Class A-2, Class B, Class C, Class D, Class E, Class F, Class G, Class
H and Class J Certificates have been reduced to zero, to distributions
of principal to the Holders of the Class K Certificates, in an amount
(not to exceed the Class Principal Balance of the Class K Certificates
outstanding immediately prior to such Distribution Date) equal to the
entire remaining Principal Distribution Amount for such Distribution
Date;
-154-
<PAGE>
(xxx) to distributions to the Holders of the Class K
Certificates, in an amount equal to, and in reimbursement of, all
Realized Losses and Additional Trust Fund Expenses, if any, that were
previously allocated to the Class K Certificates and that remain
unreimbursed immediately prior to such Distribution Date;
(xxxi) to distributions of interest to the Holders of the
Class L Certificates, in an amount equal to all Distributable
Certificate Interest in respect of such Class of Certificates for such
Distribution Date and, to the extent not previously paid, for all prior
Distribution Dates;
(xxxii) if the Class Principal Balances of the Class A-1,
Class A-2, Class B, Class C, Class D, Class E, Class F, Class G, Class
H, Class J and Class K Certificates have been reduced to zero, to
distributions of principal to the Holders of the Class L Certificates,
in an amount (not to exceed the Class Principal Balance of the Class L
Certificates outstanding immediately prior to such Distribution Date)
equal to the entire remaining Principal Distribution Amount for such
Distribution Date;
(xxxiii) to distributions to the Holders of the Class L
Certificates, in an amount equal to, and in reimbursement of, all
Realized Losses and Additional Trust Fund Expenses, if any, that were
previously allocated to the Class L Certificates and that remain
unreimbursed immediately prior to such Distribution Date;
(xxxiv) to distributions of interest to the Holders of the
Class M Certificates, in an amount equal to all Distributable
Certificate Interest in respect of such Class of Certificates for such
Distribution Date and, to the extent not previously paid, for all prior
Distribution Dates;
(xxxv) if the Class Principal Balances of the Class A-1,
Class A-2, Class B, Class C, Class D, Class E, Class F, Class G, Class
H, Class J, Class K and Class L Certificates have been reduced to zero,
to distributions of principal to the Holders of the Class M
Certificates, in an amount (not to exceed the Class Principal Balance
of the Class M Certificates outstanding immediately prior to such
Distribution Date) equal to the entire remaining Principal Distribution
Amount for such Distribution Date;
(xxxvi) to distributions to the Holders of the Class M
Certificates, in an amount equal to, and in reimbursement of, all
Realized Losses and Additional Trust Fund Expenses, if any, that were
previously allocated to the Class M Certificates and that remain
unreimbursed immediately prior to such Distribution Date;
(xxxvii) to make distributions to the Holders of the Class
R-III Certificates, in an amount equal to the excess, if any, of (A)
the aggregate distributions deemed made in respect of the REMIC II
Regular Interests on such Distribution Date pursuant to Section
4.05(a), over (B) the aggregate distributions made in respect of the
REMIC III Regular Certificates on such Distribution Date pursuant to
clauses (i) through (xxxvi) above;
-155-
<PAGE>
(xxxviii) to make distributions to the Holders of the Class
R-II Certificates, up to an amount equal to the excess, if any, of (A)
the aggregate distributions deemed made in respect of the REMIC I
Regular Interests on such Distribution Date pursuant to Section
4.05(e), over (B) the aggregate distributions deemed made in respect of
the REMIC II Regular Interests on such Distribution Date pursuant to
Section 4.05(a); and
(xxxix) to distributions to the Holders of the Class R-I
Certificates, in an amount equal to the balance, if any, of the
Available Distribution Amount for such Distribution Date remaining
after the distributions to be made on such Distribution Date pursuant
to clauses (i) through (xxxviii) above;
provided that, on each Distribution Date coinciding with or following the Senior
Principal Distribution Cross-Over Date, and in any event on the Final
Distribution Date, the payments of principal to be made pursuant to clause (ii)
above will be so made to the Holders of the respective Classes of Class A
Certificates, subject to available funds, up to an amount equal to, and pro rata
as between such Classes in accordance with, the respective then-outstanding
Class Principal Balances of such Classes of Certificates, and without regard to
the Principal Distribution Amount for such date; and provided, further, that, on
the Final Distribution Date, the payments of principal to be made pursuant to
any of clauses (v), (viii), (xi), (xiv), (xvii), (xx), (xxiii), (xxvi), (xxix),
(xxxii) and (xxxv) above with respect to any Class of Principal Balance
Certificates, will be so made to the Holders thereof, subject to available
funds, up to an amount equal to the entire then-outstanding Class Principal
Balance of such Class of Certificates, and without regard to the Principal
Distribution Amount for such date. References to "remaining Principal
Distribution Amount" in clause (ii) above, in connection with distributions of
principal to be made to the Holders of either Class of Class A Certificates on
any Distribution Date prior to the earlier of the Senior Principal Distribution
CrossOver Date and the Final Distribution Date shall be: (x) in the case of the
Class A-1 Certificates, to the entire Principal Distribution Amount for such
Distribution Date; and (y) in the case of the Class A-2 Certificates, to the
Principal Distribution Amount for such Distribution Date, net of any
distributions of principal made on such date to the Holders of the Class A-1
Certificates. References to "remaining Principal Distribution Amount" in any of
clauses (v), (viii), (xi), (xiv), (xvii), (xx), (xxiii), (xxvi), (xxix), (xxxii)
and (xxxv) above, in connection with the distributions of principal to be made
to the Holders of any Class of Principal Balance Certificates on any
Distribution Date prior to the Final Distribution Date, shall be to the
Principal Distribution Amount for such Distribution Date, net of any
distributions of principal made on such date to the Holders of each other Class
of Principal Balance Certificates that has a higher Payment Priority.
Any Prepayment Premium (whether described in the related
Mortgage Loan documents as a fixed prepayment premium or a yield maintenance
amount) actually collected with respect to a Mortgage Loan or REO Loan during
any particular Collection Period will be distributed on the related Distribution
Date as follows:
(i) first, to the Holders of the respective Class or Classes
of Principal Balance Certificates (other than the Class G, Class H,
Class J, Class K, Class L and Class M Certificates) then entitled to
distributions of principal on such Distribution Date, up to an amount
equal to the corresponding Additional Yield Amount (as defined below)
for each such
-156-
<PAGE>
Class of Certificates, pro rata in accordance with their respective
entitlements if there is more than one such Class of Certificates; and
(ii) then, to the extent of any portion of such Prepayment
Premium remaining following the distributions described in the
preceding clause (i), to the Holders of the Class X Certificates.
If a Prepayment Premium is distributable on any Distribution
Date, then the applicable "Additional Yield Amount" for any Class of Principal
Balance Certificates (other than the Class G, Class H, Class J, Class K, Class L
and Class M Certificates) entitled to distributions of principal on such
Distribution Date in reduction of its Class Principal Balance, shall be an
amount equal to the product of (a) such Prepayment Premium, multiplied by (b) a
fraction, which in no event will be greater than one or less than zero, the
numerator of which is equal to the positive excess, if any, of (i) the
Pass-Through Rate for such Class of Principal Balance Certificates over (ii) the
related Discount Rate, and the denominator of which is equal to the positive
excess, if any, of (i) the Mortgage Rate for the Mortgage Loan or REO Loan, as
the case may be, as to which such Prepayment Premium was collected, over (ii)
the related Discount Rate, multiplied by (c) a fraction, the numerator of which
is equal to the portion of the Principal Distribution Amount allocated to such
Class of Principal Balance Certificates for such Distribution Date, and the
denominator of which is equal to the entire Principal Distribution Amount for
such Distribution Date.
The "Discount Rate" with respect to any prepaid Mortgage Loan
or REO Loan, for the purpose of allocating any Prepayment Premium received
thereon or with respect thereto among the respective Classes of Principal
Balance Certificates (other than the Class G, Class H, Class J, Class K, Class L
and Class M Certificates) on any Distribution Date, shall be a rate determined
by the Trustee, in good faith, equal to the average yield for "This Week" as
most recently reported by the Federal Reserve Board in Federal Reserve
Statistical Release H.15 (519) for the constant maturity treasury having a
maturity coterminous with the maturity date or, in the case of an ARD Loan, the
Anticipated Repayment Date of the prepaid Mortgage Loan or REO Loan as of the
related Determination Date. If there is no Discount Rate for instruments having
a maturity coterminous with the remaining term (to maturity or Anticipated
Repayment Date, as applicable) of the applicable Mortgage Loan or REO Loan, then
the Discount Rate will equal the interpolation of the yields of the constant
maturity treasuries with maturities next longer and shorter than such remaining
term (to maturity or Anticipated Repayment Date, as applicable).
On each Distribution Date, the Trustee shall withdraw from the
Distribution Account any amounts then on deposit in the Class Y Sub-Account of
the Distribution Account that represent Additional Interest collected during or
prior to the related Collection Period in respect of the ARD Loans and shall
distribute such amounts to the Holders of the Class Y Certificates.
(b) All distributions made with respect to each Class on each
Distribution Date shall be allocated pro rata among the outstanding Certificates
in such Class based on their respective Percentage Interests. Except as
otherwise provided below, all such distributions with respect to each Class on
each Distribution Date shall be made to the Certificateholders of the respective
Class of record at the close of business on the related Record Date and shall be
made by wire transfer of immediately available funds to the account of any such
Certificateholder at a bank or other entity
-157-
<PAGE>
having appropriate facilities therefor, if such Certificateholder shall have
provided the Trustee with written wiring instructions no less than five (5)
Business Days prior to the related Record Date or, in the case of the initial
Distribution Date, as of the related Record Date (which wiring instructions may
be in the form of a standing order applicable to all subsequent Distribution
Dates), or otherwise by check mailed to the address of such Certificateholder as
it appears in the Certificate Register. The final distribution on each
Certificate (determined, in the case of a Principal Balance Certificate, without
regard to any possible future reimbursement of any Realized Losses and
Additional Trust Fund Expenses previously allocated to such Certificate) will be
made in like manner, but only upon presentation and surrender of such
Certificate at the Corporate Trust Office or such other location specified in
the notice to Certificateholders of such final distribution. Any distribution
that is to be made with respect to a Principal Balance Certificate in
reimbursement of Realized Losses and Additional Trust Fund Expenses previously
allocated thereto, which reimbursement is to occur after the date on which such
Certificate is surrendered as contemplated by the preceding sentence, will be
made by check mailed to the address of the Certificateholder that surrendered
such Certificate as such address last appeared in the Certificate Registrar or
to any other address of which the Trustee was subsequently notified in writing.
(c) Each distribution with respect to a Book-Entry Certificate
shall be paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of the
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the
Certificate Registrar, the Depositor, the Master Servicer, the Special Servicer
or the Tax Administrator shall have any responsibility therefor except as
otherwise provided by this Agreement or applicable law.
(d) The rights of the Certificateholders to receive
distributions from the proceeds of the Trust Fund in respect of their
Certificates, and all rights and interests of the Certificateholders in and to
such distributions, shall be as set forth in this Agreement. Neither the Holders
of any Class of Certificates nor any party hereto shall in any way be
responsible or liable to the Holders of any other Class of Certificates in
respect of amounts properly previously distributed on the Certificates.
Distributions in reimbursement of Realized Losses and Additional Trust Fund
Expenses previously allocated to a Class of Certificates shall not constitute
distributions of principal and shall not result in a reduction of the related
Class Principal Balance.
(e) Except as otherwise provided in Section 9.01, whenever the
Trustee expects that the final distribution with respect to any Class of
Certificates (determined, in the case of a Class of Principal Balance
Certificates, without regard to any possible future reimbursement of any
Realized Losses and Additional Trust Fund Expenses previously allocated to such
Class of Certificates) will be made on the next Distribution Date, the Trustee
shall, as soon as practicable in the month in which such Distribution Date
occurs, mail to each Holder of such Class of Certificates as of the date of
mailing a notice to the effect that:
-158-
<PAGE>
(i) the Trustee expects that the final distribution with
respect to such Class of Certificates will be made on such Distribution
Date but only upon presentation and surrender of such Certificates at
the Corporate Trust Office or such other location therein specified,
and
(ii) no interest shall accrue on such Certificates from and
after such Distribution Date.
Any funds not distributed to any Holder or Holders of Certificates of such Class
on such Distribution Date because of the failure of such Holder or Holders to
tender their Certificates shall, on such date, be set aside and held uninvested
in trust and credited to the account or accounts of the appropriate
non-tendering Holder or Holders. If any Certificates as to which notice has been
given pursuant to this Section 4.01(e) shall not have been surrendered for
cancellation within six months after the time specified in such notice, the
Trustee shall mail a second notice to the remaining non-tendering
Certificateholders to surrender their Certificates for cancellation in order to
receive the final distribution with respect thereto. If within one year after
the second notice all such Certificates shall not have been surrendered for
cancellation, the Trustee, directly or through an agent, shall take such steps
to contact the remaining non-tendering Certificateholders concerning the
surrender of their Certificates as it shall deem appropriate. The costs and
expenses of holding such funds in trust and of contacting such
Certificateholders following the first anniversary of the delivery of such
second notice to the non-tendering Certificateholders shall be paid out of such
funds. No interest shall accrue or be payable to any Certificateholder on any
amount held in trust hereunder by the Trustee as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment
thereof in accordance with this Section 4.01(e). If all of the Certificates
shall not have been surrendered for cancellation by the second anniversary of
the delivery of the second notice, the Trustee shall distribute to the Class
R-III Certificateholders all unclaimed funds and other assets which remain
subject hereto.
(f) Notwithstanding any other provision of this Agreement, the
Trustee shall comply with all federal withholding requirements respecting
payments to Certificateholders of interest or original issue discount that the
Trustee reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
Trustee does withhold any amount from interest or original issue discount
payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall indicate the amount withheld to such
Certificateholders.
SECTION 4.02. Statements to Certificateholders; Certain
Reports by the Master Servicer and the
Special Servicer.
(a) On each Distribution Date, based upon (where applicable)
the information set forth in the report relating to such Distribution Date
prepared by the Master Servicer and delivered to the Trustee pursuant to Section
4.02(b) hereof, and only to the extent (where applicable) such information is
provided to the Trustee by the Master Servicer, the Trustee shall forward to
each Holder (and, if it shall have certified to the Trustee as to its Ownership
Interest in a Class of Book-Entry Certificates, each Certificate Owner) of the
REMIC III Regular Certificates and to the Rating Agencies a statement (a
"Distribution Date Statement"), substantially in the form attached hereto as
Exhibit F and setting forth:
-159-
<PAGE>
(i) the amount of the distribution, if any, on such
Distribution Date to the Holders of each Class of REMIC III Regular
Certificates in reduction of the Class Principal Balance thereof;
(ii) the amount of the distribution, if any, on such
Distribution Date to the Holders of each Class of REMIC III Regular
Certificates allocable to Distributable Certificate Interest and the
amount of the distribution, if any, on such Distribution Date to the
Holders of each Class of REMIC III Regular Certificates allocable to
Prepayment Premiums;
(iii) the Available Distribution Amount for such Distribution
Date;
(iv) the aggregate amount of P&I Advances made in respect of
the immediately preceding Distribution Date;
(v) the aggregate Stated Principal Balance of the Mortgage
Pool outstanding immediately before and immediately after such
Distribution Date;
(vi) the number, aggregate principal balance, weighted average
remaining term to maturity and weighted average Mortgage Rate of the
Mortgage Pool as of the end of the Collection Period for such
Distribution Date;
(vii) as of the close of business on the last day of the most
recently ended calendar month, the number, aggregate unpaid principal
balance and specific identification (by loan number) of Mortgage Loans
(A) delinquent 30-59 days, (B) delinquent 60-89 days, (C) delinquent 90
or more days, and (D) as to which foreclosure proceedings have been
commenced;
(viii) the most recent Appraised Value, the property type and
the address of any REO Property included in the Trust Fund as of the
end of the Collection Period for such Distribution Date and the unpaid
principal balance and Assumed P&I Payment of the related REO Loan;
(ix) the Accrued Certificate Interest and Distributable
Certificate Interest in respect of each Class of REMIC III Regular
Certificates for such Distribution Date;
(x) the aggregate amount of Distributable Certificate Interest
payable in respect of each Class of REMIC III Regular Certificates on
such Distribution Date, including, without limitation, any
Distributable Certificate Interest remaining unpaid from prior
Distribution Dates;
(xi) any unpaid Distributable Certificate Interest in respect
of each Class of REMIC III Regular Certificates after giving effect to
the distributions made on such Distribution Date;
(xii) the Pass-Through Rate for each Class of REMIC III
Regular Certificates for such Distribution Date;
-160-
<PAGE>
(xiii) the Principal Distribution Amount for such Distribution
Date, separately identifying the respective components of such amount;
(xiv) the aggregate of all Realized Losses incurred during the
related Collection Period and, aggregated by type, all Additional Trust
Fund Expenses incurred during the related Collection Period;
(xv) the Class Principal Balance or Class Notional Amount, as
the case may be, of each Class of REMIC III Regular Certificates
outstanding immediately before and immediately after such Distribution
Date, separately identifying any reduction therein due to the
allocation of Realized Losses and Additional Trust Fund Expenses on
such Distribution Date;
(xvi) the Certificate Factor for each Class of REMIC III
Regular Certificates immediately following such Distribution Date;
(xvii) the aggregate amount of Servicing Fees paid to the
Master Servicer and the Special Servicer, collectively and separately,
during the Collection Period for the preceding Distribution Date, if
any;
(xviii) a brief description of any material waiver,
modification or amendment of any Mortgage Loan entered into by the
Master Servicer or Special Servicer pursuant to Section 3.20 during the
Collection Period for such Distribution Date;
(xix) any item of information disclosed to the Trustee by the
Master Servicer pursuant to Section 3.19(a) since the preceding
Distribution Date (or, in the case of the initial Distribution Date,
since the Closing Date); and
(xx) such additional information, if any, as is contemplated
on Exhibit F hereto.
In the case of information furnished pursuant to clauses (i)
and (ii) above, the amounts shall be expressed as a dollar amount in the
aggregate for all Certificates of each applicable Class and per Single
Certificate. Except with respect to the Certificate Factor (required to be
reported by clause (xvi) above), financial information reported by the Trustee
to the Certificateholders pursuant to this Section 4.02 shall be expressed as a
dollar amount rounded to the nearest whole cent. Absent actual knowledge of an
error therein, the Trustee shall have no obligation to recompute, recalculate or
verify any information provided to it by the Master Servicer or Special
Servicer. The calculations by the Trustee contemplated by this Section 4.02
shall, in the absence of manifest error, be presumptively deemed to be correct
for all purposes hereunder.
In addition, the Trustee shall so deliver or cause to be
delivered to such Certificateholders and Certificate Owners, to the Controlling
Class Representative and to the Rating Agencies, at the same time that the
Distribution Date Statement is delivered thereto, each (i) Delinquent Loan
Status Report, (ii) REO Status Report, (iii) Historical Loan Modification
Report, (iv) Special Servicer Loan Status Report, (v) Historical Loss Estimate
Report, (vi) Operating Statement Analysis, (vii) Comparative Financial Status
Report, (viii) Watchlist, (ix) CSSA Report and
-161-
<PAGE>
(x) NOI Adjustment Worksheet (such reports described in the immediately
preceding clauses (i) - (ix), collectively with the Distribution Date Statement,
the "Certificateholder Reports"), that has been received or prepared by the
Trustee since the prior Distribution Date (or, in the case of the initial
Distribution Date, since the Closing Date). Delivery of such reports shall be
either in a written format, or by such other means mutually agreed to by the
Trustee and any such Certificateholder or Certificate Owner, and, in the case of
the Rating Agencies (upon request and to the extent reasonably possible),
through an electronic medium. The form of any Certificateholder Report may
change over time.
On each Distribution Date, the Trustee shall also deliver or
cause to be delivered to such Certificateholders and Certificate Owners, to the
Controlling Class Representative and to the Rating Agencies, a report (based on
information received from the Master Servicer and Special Servicer) containing,
as and to the extent received from the Master Servicer and Special Servicer,
information regarding the Mortgage Pool as of the close of business on the
related Determination Date, which report shall contain substantially the
categories of information regarding the Mortgage Loans set forth in Annex A to
the Prospectus Supplement (calculated, where applicable, on the basis of the
most recent relevant information provided by the Borrowers to the Master
Servicer or the Special Servicer and by the Master Servicer or the Special
Servicer, as the case may be, to the Trustee), and such information shall be
presented in a loan-by-loan and tabular format substantially similar to the
formats utilized in Annex A to the Prospectus Supplement (provided that no
information will be provided as to any repair and replacement or other cash
reserve and the only financial information to be reported on an ongoing basis
will be the actual expenses, actual revenues and actual Net Cash Flow for the
respective Mortgaged Properties and a Debt Service Coverage Ratio calculated on
the basis thereof). To the extent reasonably possible, delivery of such report
to any particular Rating Agency shall be, upon request, through an electronic
medium.
On each Distribution Date, the Trustee shall forward or make
available electronically to the Depositor, to the Master Servicer, to the
Special Servicer, to the Controlling Class Representative, to the Underwriters,
to the Holders of the Residual and Class Y Certificates and, in the case of
reports regarding a Class of Book-Entry Certificates, to (i) The Trepp Group (at
477 Madison Avenue, 15th Floor, New York, New York 10022, or such other address
as The Trepp Group may hereafter designate), (ii) Intex Solutions, Inc. (at 35
Highland Circle, Needham, Massachusetts 02194, or such other address as Intex
Solutions, Inc. may hereafter designate), (iii) Charter Research Corporation (at
262 Washington Street, Boston, Massachusetts 02108, or such other address as
Charter Research Corporation may hereafter designate) and (iv) any other party
that the Depository may designate, a copy of the reports forwarded to the
Holders of the REMIC III Regular Certificates on such Distribution Date and a
statement setting forth the amounts, if any, actually distributed with respect
to each Class of Residual Certificates and Class Y Certificates on such
Distribution Date.
Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to each Person who at any time during
the calendar year was a Holder of a REMIC III Regular Certificate a statement
containing the information as to the applicable Class set forth in clauses (i)
and (ii) above of the description of Distribution Date Statement, aggregated for
such calendar year or applicable portion thereof during which such Person was a
Certificateholder, together with such other information as the Trustee
determines to be necessary to enable
-162-
<PAGE>
Certificateholders to prepare their tax returns for such calendar year. Such
obligation of the Trustee shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Trustee
pursuant to any requirements of the Code as from time to time are in force.
Upon filing with the IRS, the Tax Administrator shall furnish
to the Holders of the Class R-I, Class R-II and Class R-III Certificates the
Form 1066 and shall furnish their respective Schedules Q thereto at the times
required by the Code or the IRS, and shall provide from time to time such
information and computations with respect to the entries on such forms as any
Holder of the R-I, Class R-II and Class R-III Certificates may reasonably
request.
A Certificateholder or Certificate Owner may obtain
Certificateholder Reports by calling the Trustee at (212) 946-3246. At the
direction of the Depositor, the Trustee shall make available any or all of the
Certificateholder Reports and may make available certain other information
concerning the Mortgage Loans and the Certificates to Certificateholders and
Certificate Owners through the Trustee's internet website with the use of a
password. Additionally, at the direction of the Depositor, the Trustee shall
make available to the Master Servicer, the Special Servicer, the
Certificateholders, Certificate Owners identified to the Trustee in writing in
accordance with Section 5.06(b), the Depositor, the Underwriters, each Rating
Agency and, at the direction of the Depositor, Bloomberg Financial Markets, L.P.
("Bloomberg") (and may in its discretion and upon receipt of prior written
consent of the Depositor publish on the internet) by means of electronic access
to a datafile in the form of the CSSA Reports, with the Delinquent Loan Status
Report, REO Status Report, Historical Loan Modification Report, Special Servicer
Loan Status Report, Historical Loss Estimate Report and the Operating Statement
Analysis attached (provided such reports have been delivered to the Trustee
pursuant to Section 4.02(b) in an electronic format acceptable to the Trustee)
via the Trustee's electronic bulletin board. The Trustee may disclaim
responsibility for any information therein for which it is not the original
source.
The Master Servicer may, with the prior written consent of the
Depositor, but is not obligated to, publish on its internet website information
relating to the Mortgage Loans (other than Borrower names and Borrower
principal/sponsor names), provided that any "out-of-pocket" expenses arising
therefrom shall not be an Additional Trust Fund Expense and shall be the sole
responsibility of the Master Servicer.
(b) At or before 11:00 a.m. (New York City time) on the later
of (i) the second Business Day following each Determination Date and (ii) the
third Business Day prior to the related Distribution Date, the Master Servicer
shall deliver or cause to be delivered to the Trustee, the Special Servicer, the
Controlling Class Representative and the Underwriters, in writing and on a
computer-readable medium, in form reasonably acceptable to the recipient,
including, without limitation, on a loan-by-loan basis, the following reports:
(1) a Delinquent Loan Status Report, (2) an REO Status Report, (3) an Historical
Loan Modification Report, (4) an Historical Loss Estimate Report, (5) a
Comparative Financial Status Report, (6) the CSSA Reports (excluding the CSSA
Standard Reporting Set-Up Layout), (7) a Watchlist, (8) the Special Servicer
Loan Status Report most recently received by the Master Servicer and (9) a
single report setting forth (but only to the extent not covered by any of the
other reports in clauses (1) through (8) of this paragraph) the information
specified in clauses (i) through (vii) below (the amounts and allocations of
payments,
-163-
<PAGE>
collections, fees and expenses with respect to Specially Serviced Mortgage Loans
and REO Properties to be based upon the report to be delivered by the Special
Servicer to the Master Servicer on the earlier of the second Business Day after
the related Determination Date and the fourth Business Day prior to the subject
Distribution Date, in the form required by Section 4.02(c) below):
(i) the aggregate amount that is to be transferred from the
Collection Account to the Distribution Account on the related Master
Servicer Remittance Date that is allocable to principal on or in
respect of the Mortgage Loans and any REO Loans, separately identifying
the aggregate amount of any Principal Prepayments included therein, and
(if different) the Principal Distribution Amount for the immediately
succeeding Distribution Date;
(ii) the aggregate amount that is to be transferred from the
Collection Account to the Distribution Account on the related Master
Servicer Remittance Date that is allocable to (A) interest on or in
respect of the Mortgage Loans and any REO Loans and (B) Prepayment
Premiums;
(iii) the aggregate amount of any P&I Advances (specifying the
principal and interest portions thereof separately) to be made pursuant
to Section 4.03 of this Agreement that were made in respect of the
immediately preceding Distribution Date;
(iv) the amount of the Master Servicing Fees, Special
Servicing Fees, Workout Fees and Liquidation Fees with respect to the
Mortgage Pool for the Collection Period ending on the related
Determination Date, in each case payable to the Master Servicer, the
Special Servicer and any Sub-Servicers retained by each;
(v) the aggregate Stated Principal Balance of the Mortgage
Pool outstanding immediately before and immediately after the subject
Distribution Date;
(vi) the aggregate amount of the Additional Trust Fund
Expenses (broken down by type) withdrawn from the Collection Account
during the Collection Period ending on the related Determination Date;
and
(vii) such other information on a Mortgage Loan-by-Mortgage
Loan or REO Property-by-REO Property basis as the Trustee or the
Depositor shall reasonably request in writing (including, without
limitation, information with respect to any modifications of any
Mortgage Loan, any Mortgage Loans in default or foreclosure, the
operation and disposition of REO Property and the assumption of any
Mortgage Loan).
On the date on which the reports described above are delivered
to the Trustee, the Special Servicer, the Controlling Class Representative and
the Underwriters, the Master Servicer shall also deliver or cause to be
delivered to the Trustee, the Underwriters and the Rating Agencies a report, in
writing and in a computer-readable medium, in form reasonably acceptable to the
Trustee, containing the information with respect to the Mortgage Pool necessary
for the Trustee to prepare with respect to the Mortgage Pool the additional
schedules and tables required to be made available by the Trustee pursuant to
Section 4.02(a) in substantially the same formats set forth in Annex A to
-164-
<PAGE>
the Prospectus Supplement, in each case reflecting the changes in the Mortgage
Pool during the related Collection Period.
Not later than the first day of the calendar month following
each Master Servicer Remittance Date, the Master Servicer shall forward to the
Trustee a statement, setting forth the status of the Collection Account as of
the close of business on such Master Servicer Remittance Date, stating that all
distributions required by this Agreement to be made by the Master Servicer have
been made (or, in the case of any required distribution that has not been made
by the Master Servicer, specifying the nature and status thereof) and showing,
for the period from the preceding Master Servicer Remittance Date (or, in the
case of the first Master Servicer Remittance Date, from the Cut-off Date) to
such Master Servicer Remittance Date, the aggregate of deposits into and
withdrawals from the Collection Account for each category of deposit specified
in Section 3.04(a) and each category of withdrawal specified in Section 3.05(a).
The Master Servicer shall also deliver to the Trustee, upon reasonable request
of the Trustee, any and all additional information relating to the Mortgage
Loans (which information shall be based upon reports delivered to the Master
Servicer by the Special Servicer with respect to Specially Serviced Mortgage
Loans and REO Properties).
Within one hundred twenty (120) days following the end of each
calendar quarter, commencing with the calendar quarter ended September 30, 1999,
the Master Servicer shall deliver to the Controlling Class Representative, the
Depositor, the Special Servicer and, if requested, to the Trustee and the
Underwriters, with respect to each Mortgaged Property and REO Property, a report
(an "Operating Statement Analysis") substantially in the form of Exhibit G-6
containing revenue, expense and Net Cash Flow information normalized using the
methodology described therein as of the end of such calendar quarter, together
with all operating statements and rent rolls in its possession that relate to
such Mortgaged Property or REO Property, as the case may be; provided that (i)
the requirement that the Master Servicer deliver an Operating Statement Analysis
with respect to any Specially Serviced Mortgage Loan or REO Property in the time
period provided above is subject to the Master Servicer having received directly
from the Special Servicer or through a Sub-Servicer the related operating
statements and rent rolls from the related Borrower or otherwise within ninety
(90) days following the end of such calendar quarter and (ii) if the related
operating statements and rent rolls are not received within ninety (90) days
following the end of such calendar quarter, then the subject Operating Statement
Analysis shall be delivered by the Master Servicer to the Controlling Class
Representative within thirty (30) days after the date the Master Servicer has
received the related operating statements and rent rolls. Upon the request of
any Certificateholder, Certificate Owner or prospective Certificateholder or
Certificate Owners (which prospective Certificateholder or Certificate Owner has
been certified to it as such by a Certificateholder or Certificate Owner), the
Trustee shall request from the Master Servicer and shall make available to the
requesting party, in accordance with Section 8.12(b), copies of the
above-mentioned report, with attachments delivered pursuant to this Section
4.02(b).
The Master Servicer, on each Determination Date, shall forward
(for delivery on such Determination Date) to the Special Servicer all
information collected by the Master Servicer which the Special Servicer is
required to include in the Special Servicer Loan Status Report. Further, the
Master Servicer shall cooperate with the Special Servicer and provide the
Special Servicer with the information in the possession of the Master Servicer
reasonably requested by the Special Servicer,
-165-
<PAGE>
in writing, to the extent required to allow the Special Servicer to perform its
obligations under this Agreement with respect to those Mortgage Loans serviced
by the Special Servicer.
The Master Servicer shall use its reasonable efforts to notify
the Rating Agencies in a timely manner of any change in the identity of either
of the two largest tenants of any retail Mortgaged Property (provided that the
related Mortgage Loan has a Cut-off Date Balance greater than 5% of the
aggregate Cut-off Date Balance of the Mortgage Pool) and any casualty at or
condemnation proceeding with respect to any Mortgaged Property, subject to its
having actual knowledge of such change or event.
To the extent the statements, reports and information (or
portions thereof) to be delivered by the Master Servicer under this Section
4.02(b) are derived from underlying information to be delivered to the Master
Servicer by the Special Servicer or any Sub-Servicer on behalf of the Special
Servicer, the Master Servicer shall not be liable for any failure to deliver
such statement, report or information (or portion thereof) on the prescribed
dates, to the extent such failure is caused by the Special Servicer's or such
Sub-Servicer's failure to deliver such underlying information in a timely
manner. Absent actual knowledge to the contrary, the Master Servicer may
conclusively rely on any such information forwarded to it by the Special
Servicer or any Sub-Servicer on behalf of the Special Servicer, and shall have
no obligation to verify the same.
(c) On the first Business Day after each Determination Date,
the Special Servicer shall forward to the Master Servicer (A) the Special
Servicer Loan Status Report and (B) all information the Master Servicer will be
required to include in the other reports that the Master Servicer is obligated
to deliver to the Trustee pursuant to Section 4.02(b), to the extent such
information relates to any Specially Serviced Mortgage Loan or any REO Property.
The Special Servicer shall also deliver to the Master Servicer and the Trustee,
upon the reasonable written request of either of them, any and all additional
information in the possession of the Special Servicer relating to the Specially
Serviced Mortgage Loans and the REO Properties.
The Special Servicer shall cooperate with the Master Servicer
and provide the Master Servicer with the information in the possession of the
Special Servicer reasonably requested by the Master Servicer, in writing, to the
extent required to allow the Master Servicer to perform its obligations under
this Agreement with respect to the Specially Serviced Mortgage Loans and REO
Properties. Additional information regarding the Specially Serviced Mortgage
Loans, including, without limitation, any financial or occupancy information
(including lease summaries) provided to the Special Servicer by the Borrowers or
otherwise obtained, shall be delivered to the Master Servicer, within ten (10)
days of receipt.
SECTION 4.03. P&I Advances.
(a) On or before 1:00 p.m., New York City time, on each Master
Servicer Remittance Date the Master Servicer shall, subject to Section 3.04(c),
either (i) deposit into the Distribution Account from its own funds an amount
equal to the aggregate amount of P&I Advances, if any, to be made in respect of
the related Distribution Date, (ii) apply amounts held in the Collection Account
for future distribution to Certificateholders in subsequent months in discharge
of any such obligation to make P&I Advances, or (iii) make P&I Advances in the
form of any combination of (i)
-166-
<PAGE>
and (ii) aggregating the total amount of P&I Advances to be made; provided that
if Late Collections of any of the delinquent principal and/or interest in
respect of which it is to make P&I Advances on any Master Servicer Remittance
Date are then on deposit in the Collection Account, the Master Servicer shall
use such Late Collections (net of any Workout Fees payable therefrom) to make
such P&I Advances. Any amounts held in the Collection Account for future
distribution and so used to make P&I Advances (other than the Late Collections
of the delinquent principal and/or interest contemplated by the proviso to the
preceding sentence) shall be appropriately reflected in the Master Servicer's
records and replaced by the Master Servicer by deposit in the Collection Account
on or before the next succeeding Determination Date (to the extent not
previously replaced through the deposit of Late Collections of the delinquent
principal and/or interest in respect of which such P&I Advances were made). If,
as of 1:00 p.m., New York City time, on any Master Servicer Remittance Date, the
Master Servicer shall not have made any P&I Advance required to be made on such
date pursuant to this Section 4.03(a) (and shall not have delivered to the
Trustee (i) the requisite Officer's Certificate and documentation related to a
determination of nonrecoverability of a P&I Advance or (ii) the requisite notice
contemplated by Section 3.04(c)), then the Trustee shall provide notice of such
failure to a Servicing Officer of the Master Servicer by facsimile transmission
sent to telecopy no. 312-499-5406 (or such alternative number provided by the
Master Servicer to the Trustee in writing) and by telephone at telephone no.
312-499-5485 (or such alternative number provided by the Master Servicer to the
Trustee in writing) as soon as possible, but in any event before 3:00 p.m., New
York City time, on such Master Servicer Remittance Date. If, after such notice,
the Trustee does not receive the full amount of such P&I Advances by 11:00 a.m.
(New York City time) on the related Distribution Date, then (i) unless the
Trustee determines that such Advance would be a Nonrecoverable P&I Advance if
made, the Trustee shall make the portion of such P&I Advances that was required
to be, but was not, made by the Master Servicer on such Master Servicer
Remittance Date and (ii) such failure shall constitute an Event of Default on
the part of the Master Servicer.
(b) The aggregate amount of P&I Advances to be made in respect
of the Mortgage Loans (including, without limitation, Balloon Mortgage Loans
delinquent as to their respective Balloon Payments) and any REO Loans for any
Distribution Date shall equal, subject to subsection (c) below, the aggregate of
all Scheduled P&I Payments (other than Balloon Payments) and any Assumed P&I
Payments, in each case net of related Workout Fees payable hereunder, that (i)
were due or deemed due, as the case may be, in respect thereof on their
respective Due Dates during the related Collection Period and (ii) were not paid
by or on behalf of the related Borrowers or otherwise collected as of the close
of business on the last day of the related Collection Period; provided that, if
an Appraisal Reduction Amount exists with respect to any Required Appraisal
Loan, then, in the event of subsequent delinquencies thereon, the interest
portion of the P&I Advance in respect of such Required Appraisal Loan for the
related Distribution Date shall be reduced (it being herein acknowledged that
there shall be no reduction in the principal portion of such P&I Advance) to
equal the product of (i) the amount of the interest portion of such P&I Advance
for such Required Appraisal Loan for such Distribution Date without regard to
this proviso, multiplied by (ii) a fraction, expressed as a percentage, the
numerator of which is equal to the Stated Principal Balance of such Required
Appraisal Loan immediately prior to such Distribution Date, net of the related
Appraisal Reduction Amount, if any, and the denominator of which is equal to the
Stated Principal Balance of such Required Appraisal Loan immediately prior to
such Distribution Date.
-167-
<PAGE>
(c) Notwithstanding anything herein to the contrary, no P&I
Advance shall be required to be made hereunder if such P&I Advance would, if
made, constitute a Nonrecoverable P&I Advance. In addition, Nonrecoverable P&I
Advances shall be reimbursable pursuant to Section 3.05(a) out of general
collections on the Mortgage Pool on deposit in the Collection Account. The
determination by the Master Servicer or, if applicable, the Trustee, that it has
made a Nonrecoverable P&I Advance or that any proposed P&I Advance, if made,
would constitute a Nonrecoverable P&I Advance, shall be evidenced by an
Officer's Certificate delivered promptly (and, in any event, in the case of a
proposed P&I Advance by the Master Servicer, no less than two (2) Business Days
prior to the related Master Servicer Remittance Date) to the Trustee (or, if
applicable, retained thereby), the Depositor and the Rating Agencies, setting
forth the basis for such determination, together with (if such determination is
prior to the liquidation of the related Mortgage Loan or REO Property) a copy of
an Appraisal of the related Mortgaged Property or REO Property, as the case may
be, which shall have been performed within the twelve months preceding such
determination, and further accompanied by any other information that the Master
Servicer (or the Trustee) may have obtained and that supports such
determination. The Trustee shall deliver such Officer's Certificate as soon as
practicable after its determination that such P&I Advance would be
nonrecoverable. If such an Appraisal shall not have been required and performed
pursuant to the terms of this Agreement, the Master Servicer (or the Trustee)
subject to its reasonable and good faith determination that such Appraisal will
demonstrate the nonrecoverability of the related Advance, obtain an Appraisal
for such purpose at the expense of the Trust. The Trustee shall be entitled to
rely on any determination of nonrecoverability that may have been made by the
Master Servicer with respect to a particular P&I Advance.
(d) As and to the extent permitted by Section 3.05(a), the
Master Servicer and the Trustee shall each be entitled to receive interest at
the Reimbursement Rate in effect from time to time, accrued on the amount of
each P&I Advance made thereby (out of its own funds) for so long as such P&I
Advance is outstanding (or, in the case of Advance Interest payable to the
Master Servicer, if earlier, until the Late Collection of the delinquent
principal and/or interest in respect of which such P&I Advance was made has been
received by the Master Servicer or any of its Sub- Servicers), and such interest
will be paid: first, out of any Default Charges collected on or in respect of
the related Mortgage Loan or REO Loan, as the case may be; and second, at any
time coinciding with or following the reimbursement of such P&I Advance to the
extent that any such Default Charges then on deposit in the Collection Account
are insufficient to cover such Advance Interest, out of general collections on
the Mortgage Loans and any REO Properties on deposit in the Collection Account.
As and to the extent provided by Section 3.05(a), the Master Servicer shall
reimburse itself or the Trustee, as appropriate, for any P&I Advance made
thereby as soon as practicable after funds available for such purpose are
deposited in the Collection Account, and in no event shall interest accrue in
accordance with this Section 4.03(d) on any P&I Advance as to which the
corresponding Late Collection had been received as of the related date on which
such P&I Advance was made.
SECTION 4.04. Allocation of Realized Losses and Additional
Trust Fund Expenses to the Principal Balance
Certificates.
On each Distribution Date, following the distributions to be
made to the Certificateholders on such date pursuant to Section 4.01(a), the
Trustee shall determine the amount,
-168-
<PAGE>
if any, by which (i) the then aggregate Certificate Principal Balance of the
Principal Balance Certificates, exceeds (ii) the aggregate Stated Principal
Balance of the Mortgage Pool that will be outstanding immediately following such
Distribution Date. If such excess does exist, then the Class Principal Balances
of the Class 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 such excess or the related Class Principal Balance is
reduced to zero (whichever occurs first). If, after the foregoing reductions,
the then aggregate Certificate Principal Balance of the Class A Certificates
exceeds the aggregate Stated Principal Balance of the Mortgage Pool that will be
outstanding immediately following such Distribution Date, then the respective
Class Principal Balances of the Class A-1 and Class A-2 Certificates shall be
reduced, pro rata in accordance with the relative sizes of the then-outstanding
Class Principal Balances of such Classes of Certificates, until such excess or
each such Class Principal Balance is reduced to zero (whichever occurs first).
Such reductions in the Class Principal Balances of the respective Classes of the
Principal Balance Certificates shall be deemed to be allocations of Realized
Losses and Additional Trust Fund Expenses.
SECTION 4.05. Deemed Distributions on, and Allocations of
Realized Losses and Additional Trust Fund
Expenses to, the REMIC I Regular Interests
and REMIC II Regular Interests; Deemed
Distributions on the Loan REMIC Interests.
(a) All distributions of Distributable Certificate Interest
made in respect of the Class X Certificates on each Distribution Date pursuant
to Section 4.01(a), shall be deemed to have first been distributed from REMIC II
to REMIC III in respect of all the REMIC II Regular Interests, up to an amount
equal to, and pro rata in accordance with, the Class X Portion of the
Uncertificated Distributable Interest for each such REMIC II Regular Interest
for such Distribution Date and, to the extent not previously deemed distributed
pursuant to this sentence, for all prior Distribution Dates, if any. In
addition, all distributions of Distributable Certificate Interest, distributions
of principal and reimbursements of previously allocated Realized Losses and
Additional Trust Fund Expenses made in respect of each Class of Principal
Balance Certificates on each Distribution Date pursuant to Section 4.01(a) shall
be deemed to have first been distributed from REMIC II to REMIC III in respect
of the Corresponding REMIC II Regular Interest for such Class of Principal
Balance Certificates. In each such case, if such distribution on any such Class
of REMIC III Regular Certificates was a distribution of interest, of principal
or in reimbursement of any previously allocated Realized Losses and Additional
Trust Fund Expenses in respect of such Class of Certificates, then the
corresponding distribution deemed to be made on a REMIC II Regular Interest
pursuant to either of the preceding two sentences shall be deemed to also be a
distribution of interest, of principal or in reimbursement of any previously
allocated Realized Losses and Additional Trust Fund Expenses, as the case may
be, in respect of such REMIC II Regular Interest.
(b) All distributions of Prepayment Premiums made in respect
of the respective Classes of REMIC III Regular Certificates on each Distribution
Date pursuant to Section 4.01(a) shall be deemed to have first been distributed
from REMIC II to REMIC III in respect of the respective REMIC II Regular
Interests, pro rata based upon the amount of principal deemed distributed in
respect of each such REMIC II Regular Interest for such Distribution Date
pursuant to Section 4.05(a) above.
-169-
<PAGE>
(c) The actual distributions made by the Trustee on each
Distribution Date in respect of the REMIC III Certificates pursuant to Section
4.01(a), shall be deemed to have been so made from the amounts deemed
distributed in respect of the REMIC II Regular Interests on such Distribution
Date pursuant to this Section 4.05. Notwithstanding the deemed distributions on
the REMIC II Regular Interests described in this Section 4.05, actual
distributions of funds from the Distribution Account shall be made only in
accordance with Section 4.01.
(d) Realized Losses and Additional Trust Fund Expenses, if
any, allocated to any Class of Principal Balance Certificates on any
Distribution Date shall be deemed to have first been allocated to the
Corresponding REMIC II Regular Interest for such Class of Principal Balance
Certificates, with a corresponding reduction in the Uncertificated Principal
Balance of such REMIC II Regular Interest.
(e) On each Distribution Date, the Available Distribution
Amount for such date shall be deemed to have first been distributed from REMIC I
to REMIC II in respect of the REMIC I Regular Interests, in each case to the
extent of the remaining portion of such funds, for the following purposes and in
the following order of priority:
(i) as deemed distributions of interest in respect of the
REMIC I Regular Interests, up to an amount equal to, and pro rata in
accordance with, all Uncertificated Distributable Interest in respect
of each such REMIC I Regular Interest for such Distribution Date and,
to the extent not previously deemed distributed, for all prior
Distribution Dates;
(ii) as deemed distributions of principal in respect of the
REMIC I Regular Interests, up to an amount equal to, and pro rata in
accordance with, as to each such REMIC I Regular Interest, that
portion, if any, of the Principal Distribution Amount for such
Distribution Date attributable the related Mortgage Loan (or successor
REO Loan); and
(iii) as deemed distributions in respect of the REMIC I
Regular Interests, up to an amount equal to, pro rata in accordance
with, and in reimbursement of, any Realized Losses and Additional Trust
Fund Expenses (with compounded interest at the related REMIC I
Remittance Rate), previously allocated to each such REMIC I Regular
Interest.
(f) All distributions of Prepayment Premiums made in respect
of the respective Classes of REMIC III Regular Certificates on each Distribution
Date pursuant to Section 4.01(a) shall be deemed to have first been distributed
from REMIC I to REMIC II in respect of the REMIC I Regular Interest
corresponding to the prepaid Mortgage Loan or REO Loan, as the case may be, in
respect of which such Prepayment Premium was received.
(g) On each Distribution Date, following the deemed
distributions to be made in respect of the REMIC I Regular Interests pursuant to
Section 4.05(e), the Uncertificated Principal Balance of each REMIC I Regular
Interest (after taking account of such deemed distributions) shall, if and to
the extent necessary, be reduced to equal the Stated Principal Balance of the
related Mortgage Loan and/or REO Loan, as the case may be, that will be
outstanding immediately following such Distribution Date. All such reductions in
the Uncertificated Principal Balances of the respective
-170-
<PAGE>
REMIC I Regular Interests shall be deemed to constitute allocations of Realized
Losses and Additional Trust Fund Expenses.
(h) Payments of principal, interest and Prepayment Premiums on
any Loan REMIC Regular Interest shall match the payments of principal, interest
and Prepayment Premiums on the related Mortgage Loan or successor REO Loan,
except that Holders of the Class R-I Certificates shall receive any proceeds
with respect to any related REO Property in excess of the amounts due under such
Mortgage Loan or successor REO Loan (net, if applicable, of expenses or
advances, including interest).
-171-
<PAGE>
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
(a) The Certificates will be substantially in the respective
forms annexed hereto as Exhibits A-1, A-2, A-3, A-4, A-5 and A-6; provided that
any of the Certificates may be issued with appropriate insertions, omissions,
substitutions and variations, and may have imprinted or otherwise reproduced
thereon such legend or legends, not inconsistent with the provisions of this
Agreement, as may be required to comply with any law or with rules or
regulations pursuant thereto, or with the rules of any securities market in
which the Certificates are admitted to trading, or to conform to general usage.
The Certificates will be issuable in registered form only; provided, however,
that in accordance with Section 5.03 beneficial ownership interests in the
Registered Certificates shall initially be held and transferred through the
book-entry facilities of the Depository. The Registered Certificates will be
issuable in denominations corresponding to initial Certificate Principal
Balances or Certificate Notional Amounts, as the case may be, as of the Closing
Date of not less than $10,000 (or, with respect to the Class X Certificates,
$1,000,000) and in any whole dollar denomination in excess thereof. The
Non-Registered Certificates will be issuable in denominations corresponding to
initial Certificate Principal Balances as of the Closing Date of not less than
$100,000 and in any whole dollar denomination in excess thereof. Each Class of
Residual Certificates and the Class Y Certificates will be issuable only in
denominations representing not less than a 10% Percentage Interest in such
Class.
(b) The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee in its capacity as trustee hereunder by an
authorized officer. Certificates bearing the manual or facsimile signatures of
individuals who were at any time the authorized officers of the Trustee shall be
entitled to all benefits under this Agreement, subject to the following
sentence, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such Certificates. No Certificate
shall be entitled to any benefit under this Agreement, or be valid for any
purpose, however, unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein executed by the
Certificate Registrar by manual signature, and such certificate of
authentication upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication;
provided that the Certificates issued on the Closing Date shall, in any event,
be dated the Closing Date.
SECTION 5.02. Registration of Transfer and Exchange of
Certificates.
(a) At all times during the term of this Agreement, there
shall be maintained at the office of the Certificate Registrar a Certificate
Register in which, subject to such reasonable regulations as the Certificate
Registrar may prescribe, the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges of Certificates as
herein provided. The Trustee is hereby initially appointed (and hereby agrees to
act in accordance with the terms hereof)
-172-
<PAGE>
as Certificate Registrar for the purpose of registering Certificates and
transfers and exchanges of Certificates as herein provided. For so long as the
Trustee acts as Certificate Registrar, its Corporate Trust Office shall
constitute the office of the Certificate Registrar maintained for such purposes.
The Trustee may appoint, by a written instrument delivered to the Depositor, the
Master Servicer, the Special Servicer and the Tax Administrator, any other bank
or trust company to act as Certificate Registrar under such conditions as the
predecessor Certificate Registrar may prescribe, provided that the Trustee shall
not be relieved of any of its duties or responsibilities hereunder as
Certificate Registrar by reason of such appointment. If the Trustee resigns or
is removed in accordance with the terms hereof, the successor trustee shall
immediately succeed to its predecessor's duties as Certificate Registrar. The
Depositor, the Master Servicer, the Special Servicer and the Tax Administrator
shall have the right to inspect the Certificate Register or to obtain a copy
thereof at all reasonable times, and to rely conclusively upon a certificate of
the Certificate Registrar as to the information set forth in the Certificate
Register. Upon request, the Trustee shall promptly inform, or cause the
Certificate Registrar to inform, the Master Servicer or the Special Servicer, as
applicable, of the identity of all Certificateholders of the Controlling Class.
In the event that any Certificateholder (hereinafter referred
to as the "applicant") applies in writing to the Trustee, and such application
states that the applicant desires to communicate with other Certificateholders
with respect to their rights under this Agreement or under the Certificates and
is accompanied by a copy of the communication which such applicant proposes to
transmit, then the Trustee shall, within five (5) Business Days after the
receipt of such application, afford such applicant access during normal business
hours to the most recent list of Certificateholders held by the Trustee. If the
Trustee is no longer the Certificate Registrar and such a list is as of a date
more than 90 days prior to the date of receipt of such applicant's request, the
Trustee shall promptly request from the Certificate Registrar a current list as
provided above, and shall afford such applicant access to such list promptly
upon receipt.
Every Certificateholder, by receiving and holding such list,
agrees with the Certificate Registrar and the Trustee that neither the
Certificate Registrar nor the Trustee shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the
Certificateholders hereunder, regardless of the source from which such
information was derived.
(b) No transfer of any Non-Registered Certificate shall be
made unless that transfer is made pursuant to an effective registration
statement under the Securities Act, and effective registration or qualification
under applicable state securities laws, or is made in a transaction which does
not require such registration or qualification. In the event a transfer of any
Non-Registered Certificate (other than in connection with the initial issuance
of the Certificates or a transfer of such Non-Registered Certificate by the
Depositor) is to be made without registration under the Securities Act, the
Certificate Registrar shall refuse to register such transfer unless it receives
the following: (i) a certificate from the Certificateholder desiring to effect
such transfer substantially in the form attached as Exhibit B-1 hereto (except
in the case of the initial sale of any Non-Registered Certificate by an
Underwriter) and a certificate from such Certificateholder's prospective
transferee substantially in the form attached either as Exhibit B-2 or Exhibit
B-3 hereto; or (ii) an Opinion of Counsel satisfactory to the Certificate
Registrar to the effect that such transfer may be made without registration
under the Securities Act, together with the written certification(s) as to the
facts surrounding such transfer from the Certificateholder desiring to effect
such transfer and/or such
-173-
<PAGE>
Certificateholder's prospective transferee on which such Opinion of Counsel is
based. None of the Depositor, the Trustee or the Certificate Registrar is
obligated to register or qualify any Class of NonRegistered Certificates under
the Securities Act or any other securities law or to take any action not
otherwise required under this Agreement to permit the transfer of any
Non-Registered Certificate or interest therein without registration or
qualification. Any Holder of a Non-Registered Certificate desiring to effect
such a transfer shall, and does hereby agree to, indemnify the Depositor, the
Master Servicer, the Special Servicer, the Trustee, the Tax Administrator and
the Certificate Registrar against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.
(c) No transfer of any Non-Registered Certificate or any
interest therein shall be made under any circumstances (i) to any employee
benefit plan or other retirement arrangement, including individual retirement
accounts and annuities, Keogh plans and collective investment funds and separate
accounts in which such plans, accounts or arrangements are invested, that is
subject to ERISA or the Code (each, a "Plan"), or (ii) to any Person who is
directly or indirectly purchasing such Certificate or interest therein on behalf
of, as named fiduciary of or as trustee of a Plan, or with "plan assets" within
the meaning of the Department of Labor regulation promulgated at 29 C.F.R.
ss.2510.3-101, unless: (x) in the case of any Non-Registered Certificate or
interest therein that is being acquired with "plan assets", the prospective
Transferee provides the Certificate Registrar with a certification to the effect
that the purchase, continued holding and transfer of such Certificate or
interest therein is exempt from the prohibited transaction provisions of Section
406 of ERISA and Section 4975 of the Code under Sections I and III of Prohibited
Transaction Class Exemption ("PTCE") 95-60; or (y) the prospective Transferee
provides the Certificate Registrar with a certification of facts and an Opinion
of Counsel, obtained at the expense of such prospective Transferee, which
establish to the satisfaction of the Certificate Registrar that such transfer
will not result in a violation of Section 406 of ERISA or Section 4975 of the
Code, will not result in the imposition of an excise tax under Section 4975 of
the Code and will not subject the Trustee, Master Servicer or Special Servicer
to any obligation in addition to those undertaken in this Agreement. It is
hereby acknowledged that the form of certification attached hereto as Exhibit D
is an acceptable certification for purposes of the preceding sentence. Each
Person who acquires any Certificate (including, without limitation, a Registered
Certificate) or interest therein shall (in all cases, in the case of a
Registered Certificate, and only if such Person shall not have delivered the
Opinion of Counsel and/or one of the certifications referred to in the two
preceding sentences, in the case of a Non-Registered Certificate) be deemed to
have certified that: (i) it is neither a Plan nor any Person who is directly or
indirectly purchasing such Certificate or interest therein on behalf of, as
named fiduciary of, as trustee of, or with assets of a Plan, or (ii)
alternatively, in the case of a Registered Certificate, that the purchase,
continued holding and transfer of such Certificate or interest therein is exempt
from the prohibited transaction provisions of Section 406 of ERISA and Section
4975 of the Code under Prohibited Transaction Exemption ("PTE") 91-23 or
Sections I and III of PTCE 95-60.
(d) (i) Each Person who has or who acquires any Ownership
Interest in a Residual Certificate shall be deemed by the acceptance or
acquisition of such Ownership Interest to have agreed to be bound by
the following provisions and to have irrevocably authorized the Trustee
under clause (ii)(A) below to deliver payments to a Person other than
such Person and to have irrevocably authorized the Trustee under clause
(ii)(B) below to negotiate the
-174-
<PAGE>
terms of any mandatory sale and to execute all instruments of Transfer
and to do all other things necessary in connection with any such sale.
The rights of each Person acquiring any Ownership Interest in a
Residual Certificate are expressly subject to the following provisions:
(A) Each Person holding or acquiring any Ownership
Interest in a Residual Certificate shall be a Permitted
Transferee and shall promptly notify the Trustee and the Tax
Administrator of any change or impending change in its status
as a Permitted Transferee.
(B) In connection with any proposed Transfer of any
Ownership Interest in a Residual Certificate (other than in
connection with the initial issuance of the Certificates or
any transfer of a Residual Certificate by the Depositor), the
Certificate Registrar shall require delivery to it, and shall
not register the Transfer of any Residual Certificate until
its receipt of, an affidavit and agreement substantially in
the form attached hereto as Exhibit C-1 (a "Transfer Affidavit
and Agreement") from the proposed Transferee, in form and
substance satisfactory to the Certificate Registrar,
representing and warranting, among other things, that such
Transferee is a Permitted Transferee, that it is not acquiring
its Ownership Interest in the Residual Certificate that is the
subject of the proposed Transfer as a nominee, trustee or
agent for any Person that is not a Permitted Transferee, that
for so long as it retains its Ownership Interest in a Residual
Certificate it will endeavor to remain a Permitted Transferee,
and that it has reviewed the provisions of this Section
5.02(d) and agrees to be bound by them.
(C) Notwithstanding the delivery of a Transfer
Affidavit and Agreement by a proposed Transferee under clause
(B) above, if the Certificate Registrar has actual knowledge
that the proposed Transferee is not both a Permitted
Transferee and no Transfer of an Ownership Interest in a
Residual Certificate to such proposed Transferee shall be
effected.
(D) Except in connection with the initial issuance of
the Residual Certificates or any transfer thereof among the
Depositor and its Affiliates, each Person holding or acquiring
any Ownership Interest in a Residual Certificate shall agree
(1) to require a Transfer Affidavit and Agreement from any
prospective Transferee to whom such Person attempts to
transfer its Ownership Interest in such Residual Certificate
and (2) not to transfer its Ownership Interest in such
Residual Certificate unless it provides to the Certificate
Registrar a certificate substantially in the form attached
hereto as Exhibit C-2 stating that, among other things, it has
no actual knowledge that such prospective Transferee is not a
Permitted Transferee.
(E) Each Person holding or acquiring an Ownership
Interest in a Residual Certificate, by purchasing an Ownership
Interest in such Certificate, agrees to give the Trustee and
the Tax Administrator written notice that it is a
"pass-through interest holder" within the meaning of temporary
Treasury regulation Section 1.67-3T(a)(2)(i)(A) immediately
upon acquiring an Ownership Interest in a Residual
-175-
<PAGE>
Certificate, if it is, or is holding an Ownership Interest in
a Residual Certificate on behalf of, a "pass-through interest
holder".
(ii) (A) If any purported Transferee shall become a
Holder of a Residual Certificate in violation of the
provisions of this Section 5.02(d), then such transfer shall
be void ab initio and the last preceding Holder of such
Residual Certificate that was in compliance with the
provisions of this Section 5.02(d) shall be restored, to the
extent permitted by law, to all rights as Holder thereof
retroactive to the date of registration of such Transfer of
such Residual Certificate. None of the Trustee, the Master
Servicer, the Special Servicer, the Tax Administrator or the
Certificate Registrar shall be under any liability to any
Person for any registration of Transfer of a Residual
Certificate that is in fact not permitted by this Section
5.02(d) or for making any payments due on such Certificate to
the Holder thereof or for taking any other action with respect
to such Holder under the provisions of this Agreement.
(B) If any purported Transferee shall become a Holder
of a Residual Certificate in violation of the restrictions in
this Section 5.02(d) and to the extent that the retroactive
restoration of the rights of the Holder of such Residual
Certificate as described in clause (ii)(A) above shall be
invalid, illegal or unenforceable, then the Trustee shall have
the right, but not the obligation, to cause the transfer of
such Residual Certificate to a Permitted Transferee selected
by the Trustee on such terms as the Trustee may choose, and
the Trustee shall not be liable to any Person having an
Ownership Interest in a Residual Certificate as a result of
its exercise of such discretion. Such Permitted Transferee
shall promptly endorse and deliver such Residual Certificate
in accordance with the instructions of the Trustee. Such
Permitted Transferee may be the Trustee itself or any
Affiliate of the Trustee.
(iii) The Tax Administrator shall make available to the
Internal Revenue Service and those Persons specified by the REMIC
Provisions all information necessary to compute any tax imposed (A) as
a result of the Transfer of an Ownership Interest in a Residual
Certificate to any Person who is not a Permitted Transferee, including
the information described in Treasury regulations sections
1.860D-1(b)(5) and 1.860E-2(a)(5) with respect to the "excess
inclusions" of such Residual Certificate and (B) as a result of any
regulated investment company, real estate investment trust, common
trust fund, partnership, trust, estate or organization described in
Section 1381 of the Code that holds an Ownership Interest in a Residual
Certificate having as among its record holders at any time any Person
which is not a Permitted Transferee. The Person holding such Ownership
Interest shall be responsible for the reasonable compensation of the
Tax Administrator for providing such information.
(iv) The provisions of this Section 5.02(d) set forth prior to
this subsection (iv) may be modified, added to or eliminated, provided
that there shall have been delivered to the Trustee and the Tax
Administrator the following:
-176-
<PAGE>
(A) written notification from each Rating Agency to
the effect that the modification of, addition to or
elimination of such provisions will not cause such Rating
Agency to qualify, downgrade or withdraw its then-current
rating of any Class of Certificates; and
(B) an Opinion of Counsel, in form and substance
satisfactory to the Trustee and the Tax Administrator, to the
effect that such modification of, addition to or elimination
of such provisions will not cause any REMIC Pool to (x) cease
to qualify as a REMIC or (y) be subject to an entity-level tax
caused by the Transfer of any Residual Certificate to a Person
which is not a Permitted Transferee, or cause a Person other
than the prospective Transferee to be subject to a
REMIC-related tax caused by the Transfer of a Residual
Certificate to a Person which is not a Permitted Transferee.
Such Opinion of Counsel shall not be at the expense of the
Trust, the Trustee or the Tax Administrator.
(e) The Trust has not been registered as an investment company
under the Investment Company Act. Accordingly, no transfer of any Class G, Class
H, Class J, Class K, Class L, Class M or Class Y Certificate shall be made to
any Person other than an Institutional Accredited Investor or a Qualified
Institutional Buyer, and no transfer of any Residual Certificate shall be made
to any Person other than a Qualified Institutional Buyer. If a transfer of any
such Certificate is to be made, then the Certificate Registrar shall require, in
order to assure compliance with the foregoing, that the prospective transferee
of such Certificate certify in writing that the prospective transferee is a
Qualified Institutional Buyer or, alternatively, except in the case of a
Residual Certificate, an Institutional Accredited Investor.
(f) Subject to the preceding subsections, upon surrender for
registration of transfer of any Certificate at the offices of the Certificate
Registrar maintained for such purpose, the Trustee shall execute and the
Certificate Registrar shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of authorized
denominations of the same Class of a like aggregate Percentage Interest.
(g) At the option of any Holder, its Certificates may be
exchanged for other Certificates of authorized denominations of the same Class
of a like aggregate Percentage Interest, upon surrender of the Certificates to
be exchanged at the offices of the Certificate Registrar maintained for such
purpose. Whenever any Certificates are so surrendered for exchange, the Trustee
shall execute and the Certificate Registrar shall authenticate and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive.
(h) Every Certificate presented or surrendered for transfer or
exchange shall (if so required by the Certificate Registrar) be duly endorsed
by, or be accompanied by a written instrument of transfer in the form
satisfactory to the Certificate Registrar duly executed by, the Holder thereof
or his attorney duly authorized in writing.
-177-
<PAGE>
(i) No service charge shall be imposed for any transfer or
exchange of Certificates, but the Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.
(j) Subsequent to the initial issuance of the Certificates,
the Trustee shall be responsible for the preparation of physical Certificates in
connection with any transfer or exchange; provided that the correct form of
Certificate of each Class shall be provided by the Depositor to the Trustee on
diskette on or about the Closing Date. All Certificates surrendered for transfer
and exchange shall be physically canceled by the Certificate Registrar, and the
Certificate Registrar shall hold or destroy such canceled Certificates in
accordance with its standard procedures.
(k) The Certificate Registrar shall be required to provide the
Depositor and the Tax Administrator with an updated copy of the Certificate
Register on or about January 1 of each year, commencing January 1, 2000, and
shall be required to provide the Depositor, the Master Servicer, the Special
Servicer or the Tax Administrator with an updated copy of the Certificate
Register at other times promptly upon written request therefor.
(l) If a Person is acquiring any Non-Registered Certificate or
interest therein as a fiduciary or agent for one or more accounts, such Person
shall be required to deliver to the Certificate Registrar (or, in the case of a
Book-Entry Certificate, to the Certificate Owner that is transferring such
interest) a certification to the effect that, and such other evidence as may be
reasonably required by the Trustee (or such Certificate Owner) to confirm that,
it has (i) sole investment discretion with respect to each such account and (ii)
full power to make the acknowledgments, representations, warranties,
certification and agreements with respect to each such account as set forth in
subsections (b), (c), (d) and (e) as applicable, of this Section 5.02.
(m) Neither the Trustee nor the Certificate Registrar shall
have any obligation or duty to monitor, determine or inquire as to compliance
with any restriction or transfer imposed under this Section 5.02 or under
applicable law with respect to any transfer of any Certificate, or any interest
therein, other than to require delivery of the certification(s) and/or opinions
of counsel described in this Section 5.02 applicable with respect to changes in
registration of record ownership of Certificates in the Certificate Register.
The Trustee and the Certificate Registrar shall have no liability for transfers,
including transfers made through the book-entry facilities of the Depository or
between or among the Depository Participants or Certificate Owners made in
violation of applicable restrictions.
SECTION 5.03. Book-Entry Certificates.
(a) The Registered Certificates shall, in the case of each
Class thereof, initially be issued as one or more Certificates registered in the
name of the Depository or its nominee and, except as provided in subsection (c)
below, transfer of such Certificates may not be registered by the Certificate
Registrar unless such transfer is to a successor depository that agrees to hold
such Certificates for the respective Certificate Owners with Ownership Interests
therein. Such Certificate Owners shall hold and transfer their respective
Ownership Interests in and to such Certificates through the book-entry
facilities of the Depository and, except as provided in subsection (c) below,
-178-
<PAGE>
shall not be entitled to fully registered, physical Certificates ("Definitive
Certificates") in respect of such Ownership Interests. All transfers by
Certificate Owners of their respective Ownership Interests in the Book-Entry
Certificates shall be made in accordance with the procedures established by the
Depository Participant or brokerage firm representing each such Certificate
Owner. Each Depository Participant shall only transfer the Ownership Interests
in the Book-Entry Certificates of Certificate Owners it represents or of
brokerage firms for which it acts as agent in accordance with the Depository's
normal procedures. Neither the Certificate Registrar nor the Trustee shall have
any responsibility to monitor or restrict the transfer of Ownership Interests in
Certificates through the book-entry facilities of the Depository.
(b) The Depositor, the Mortgage Loan Sellers, the Trustee, the
Master Servicer, the Special Servicer, the Tax Administrator and the Certificate
Registrar may for all purposes, including the making of payments due on the
Book-Entry Certificates, deal with the Depository as the authorized
representative of the Certificate Owners with respect to such Certificates for
the purposes of exercising the rights of Certificateholders hereunder. The
rights of Certificate Owners with respect to the Book-Entry Certificates shall
be limited to those established by law and agreements between such Certificate
Owners and the Depository Participants and brokerage firms representing such
Certificate Owners. Multiple requests and directions from, and votes of, the
Depository as Holder of the Book-Entry Certificates with respect to any
particular matter shall not be deemed inconsistent if they are made with respect
to different Certificate Owners. The Trustee may establish a reasonable record
date in connection with solicitations of consents from or voting by
Certificateholders and shall give notice to the Depository of such record date.
If any party hereto requests from the Depository a list of the Depository
Participants in respect of any Class or Classes of the Book-Entry Certificates,
the cost thereof shall be borne by the party on whose behalf such request is
made (but in no event shall any such cost be borne by the Trustee).
(c) If (i)(A) the Depositor advises the Trustee and the
Certificate Registrar in writing that the Depository is no longer willing or
able to properly discharge its responsibilities with respect to any Class of the
Book-Entry Certificates, and (B) the 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 Depository with respect to any Class of the Book-Entry
Certificates, the Certificate Registrar shall notify all affected Certificate
Owners, through the Depository, of the occurrence of any such event and of the
availability of Definitive Certificates to such Certificate Owners requesting
the same. Upon surrender to the Certificate Registrar of any Class of the
Book-Entry Certificates by the Depository, accompanied by registration
instructions for registration of transfer, the Trustee shall execute, and the
Certificate Registrar shall authenticate and deliver, the appropriate Definitive
Certificates to the Certificate Owners identified in such instructions. None of
the Depositor, the Mortgage Loan Sellers, the Master Servicer, the Special
Servicer, the Trustee, the Tax Administrator or the Certificate Registrar shall
be liable for any delay in delivery of such instructions and may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of Definitive Certificates for purposes of evidencing ownership of any
Class of Registered Certificates, the registered holders of such Definitive
Certificates shall be recognized as Certificateholders hereunder and,
accordingly, shall be entitled directly to receive payments on, to exercise
Voting Rights with respect to, and to transfer and exchange such Definitive
Certificates.
-179-
<PAGE>
SECTION 5.04. Mutilated, Destroyed, Lost or Stolen
Certificates.
If (i) any mutilated Certificate is surrendered to the
Certificate Registrar, or the Certificate Registrar receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate, and (ii)
there is delivered to the Trustee and the Certificate Registrar such security or
indemnity as may reasonably be required by them to save each of them harmless,
then, in the absence of actual notice to the Trustee or the Certificate
Registrar that such Certificate has been acquired by a bona fide purchaser, the
Trustee shall execute and the Certificate Registrar shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of the same Class and like Percentage
Interest. Upon the issuance of any new Certificate under this Section, the
Trustee and the Certificate Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee and the Certificate Registrar) connected therewith. Any replacement
Certificate issued pursuant to this Section shall constitute complete and
indefeasible evidence of ownership in the applicable REMIC created hereunder, as
if originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
SECTION 5.05. Persons Deemed Owners.
Prior to due presentment for registration of transfer, the
Depositor, the Mortgage Loan Sellers, the Master Servicer, the Special Servicer,
the Trustee, the Tax Administrator, the Certificate Registrar and any agents of
any of them may treat the person in whose name any Certificate is registered as
the owner of such Certificate for the purpose of receiving distributions
pursuant to Section 4.01 and for all other purposes whatsoever, and none of the
Depositor, the Mortgage Loan Sellers, the Master Servicer, the Special Servicer,
the Trustee, the Tax Administrator, the Certificate Registrar or any agent of
any of them shall be affected by notice to the contrary.
SECTION 5.06. Certification by Certificate Owners.
(a) Each Certificate Owner is hereby deemed by virtue of its
acquisition of an Ownership Interest in the Book-Entry Certificates to agree to
comply with the applicable transfer requirements of Sections 5.02(b) and
5.02(c).
(b) To the extent that under the terms of this Agreement, it
is necessary to determine whether any Person is a Certificate Owner, the Trustee
shall make such determination based on a certificate of such Person which shall
specify, in reasonable detail satisfactory to the Trustee, the Class and
Certificate Principal Balance or Certificate Notional Amount, as the case may
be, of the Book-Entry Certificate beneficially owned, the value of such Person's
interest in such Certificate and any intermediaries through which such Person's
Ownership Interest in such Book- Entry Certificate is held; provided, however,
that the Trustee shall not knowingly recognize such Person as a Certificate
Owner if such Person, to the knowledge of a Responsible Officer of the Trustee,
acquired its Ownership Interest in a Book-Entry Certificate in violation of
Section 5.02(b) and/or Section 5.02(c), or if such Person's certification that
it is a Certificate Owner is in direct conflict with information obtained by the
Trustee from the Depository, the Depository Participants, and/or indirect
participating brokerage firms for which a Depository Participant acts as agent,
with respect to the identity of a Certificate Owner. The Trustee shall exercise
its reasonable discretion in
-180-
<PAGE>
making any determination under this Section 5.06(b) and shall afford any Person
providing information with respect to its beneficial ownership of any
Certificates an opportunity to resolve any discrepancies between the information
provided and any other information available to the Trustee.
-181-
<PAGE>
ARTICLE VI
THE DEPOSITOR, THE MORTGAGE LOAN SELLERS,
THE MASTER SERVICER AND THE SPECIAL SERVICER
SECTION 6.01. Liability of the Depositor, the Mortgage Loan
Sellers, the Master Servicer and the Special
Servicer.
The Depositor, Llama, SBRC, the Master Servicer and the
Special Servicer shall be liable in accordance herewith only to the extent of
the respective obligations specifically imposed upon and undertaken by the
Depositor, Llama, SBRC, the Master Servicer and the Special Servicer herein.
SECTION 6.02. Merger, Consolidation or Conversion of the
Depositor, the Mortgage Loan Sellers, the
Master Servicer or the Special Servicer.
Subject to the following paragraph, the Depositor, Llama,
SBRC, the Master Servicer and the Special Servicer each will keep in full effect
its existence, rights and franchises as a corporation or other business
organization under the laws of the jurisdiction of its organization, and each
will obtain and preserve its qualification to do business as a foreign
corporation or otherwise in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement,
the Certificates or any of the Mortgage Loans and to perform its respective
duties under this Agreement.
The Depositor, Llama, SBRC, the Master Servicer and the
Special Servicer each may be merged or consolidated with or into any Person, or
transfer all or substantially all of its assets (which, as to the Master
Servicer and the Special Servicer, may be limited to all or substantially all of
its assets relating to the business of mortgage loan servicing) to any Person,
in which case any Person resulting from any merger or consolidation to which the
Depositor, Llama, SBRC, the Master Servicer or the Special Servicer shall be a
party, or any Person succeeding to the business of the Depositor, Llama, SBRC,
the Master Servicer or the Special Servicer, shall be the successor of the
Depositor, Llama, SBRC, the Master Servicer or the Special Servicer, as the case
may be, hereunder, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that no successor or surviving Person shall
succeed to the rights of the Master Servicer or the Special Servicer unless such
succession will not result in any withdrawal, downgrade or qualification of the
rating then assigned by either Rating Agency to any Class of Certificates (as
confirmed to the Trustee in writing).
Notwithstanding anything else in this Section 6.02 and in
Section 6.04 to the contrary, the Master Servicer and the Special Servicer may
each assign all of its rights and, subject to Section 3.22, delegate all of its
duties and obligations under this Agreement; provided that the Person accepting
such assignment or delegation is willing to act as successor Master Servicer or
Special Servicer, as the case may be, and executes and delivers to the Depositor
and the Trustee an agreement, in form and substance reasonably satisfactory to
the Depositor and the Trustee, which
-182-
<PAGE>
contains an assumption by such Person of the due and punctual performance and
observance of each covenant and condition to be performed or observed by the
Master Servicer or the Special Servicer, as the case may be, under this
Agreement; and provided, further, that such assignment or delegation will not
result in the qualification, downgrade or withdrawal of any of the then-current
ratings of the Classes of Certificates that have been rated (as evidenced by a
letter to such effect from each Rating Agency); and provided, further, that any
such Person accepting such assignment or delegation from the Master Servicer
shall be qualified to service multifamily mortgage loans on behalf of FNMA or
FHLMC and is reasonably satisfactory to the Trustee and the Depositor. In the
case of any such assignment and delegation, 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,
or arising from its conduct, hereunder prior to the satisfaction of the
conditions to such assignment and delegation set forth in the preceding
sentence. All reasonable out-of-pocket costs and expenses of the Trustee and the
Trust (including, without limitation, any costs or expenses of any party hereto
reimbursable out of the Trust Fund) directly in connection with any such
assignment or delegation (including, without limitation, any requisite transfer
of servicing) shall be paid for, as incurred, by the assigning or delegating
party. Notwithstanding anything above to the contrary, each of the Master
Servicer and, subject to Section 3.22(f), the Special Servicer may, in its sole
discretion, appoint Sub-Servicers in accordance with Section 3.22 hereof and
independent contractors or agents to perform select duties thereof, provided
that the Master Servicer or the Special Servicer shall not be relieved from such
duties solely by virtue of such appointment.
SECTION 6.03. Limitation on Liability of the Depositor, the
Master Servicer, the Special Servicer and
Others.
None of the Depositor, the Master Servicer, the Special
Servicer or any director, officer, employee or agent of any of the foregoing
shall be under any liability to the Trust or the Certificateholders for any
action taken, or not taken, in good faith pursuant to this Agreement, or for
errors in judgment; provided, however, that this provision shall not protect the
Depositor, the Master Servicer, the Special Servicer or any such other Person
against any breach of a representation or warranty made herein, or against any
expense or liability specifically required to be borne thereby pursuant to the
terms hereof, or against any liability which would otherwise be imposed by
reason of willful misfeasance, bad faith or negligence in the performance of
obligations or duties hereunder, or by reason of negligent disregard of such
obligations and duties. The Depositor, the Master Servicer, the Special Servicer
and any director, officer, employee or agent of any of the foregoing may rely in
good faith on any document of any kind which, prima facie, is properly executed
and submitted by any Person respecting any matters arising hereunder. The
Depositor, the Master Servicer, the Special Servicer and any director, officer,
employee or agent of any of the foregoing shall be indemnified and held harmless
by the Trust against any loss, liability or reasonable expense incurred in
connection with any legal action relating to this Agreement, the Certificates or
any asset of the Trust, other than any such loss, liability or expense: (i)
specifically required to be borne by such Person pursuant to the terms hereof,
including, without limitation, Section 10.01(h); (ii) that constitutes a
Servicing Advance and is otherwise reimbursable pursuant to this Agreement
(provided that this clause (ii) is not intended to limit the Master Servicer's
or Special Servicer's right of recovery of liabilities and expenses incurred as
a result of being the defendant, or participating in a proceeding to which
another indemnified party under this Section 6.03 is a defendant, in a legal
action relating to this Agreement);
-183-
<PAGE>
or (iii) which was incurred in connection with claims against such party
resulting from (A) any breach of a representation or warranty made herein by
such party, or (B) willful misfeasance, bad faith or negligence in the
performance of obligations or duties hereunder by such party, or from negligent
disregard of such obligations or duties. None of the Depositor, the Master
Servicer or 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, except in the case of a legal action
contemplated by Section 3.22, in its opinion does not involve it in any ultimate
expense or liability; provided, however, that the Depositor, the Master Servicer
or the Special Servicer may in its discretion undertake any such action which it
may deem necessary or desirable with respect to the enforcement and/or
protection of the rights and duties of the parties hereto and the interests of
the Certificateholders hereunder. In such event, the legal expenses and costs of
such action, and any liability resulting therefrom, shall be expenses, costs and
liabilities of the Trust, and the Depositor, the Master Servicer and the Special
Servicer each shall be entitled to the direct payment of such expenses or to be
reimbursed therefor from the Collection Account as provided in Section 3.05(a).
SECTION 6.04. Master Servicer and Special Servicer Not to
Resign.
Neither the Master Servicer nor the Special Servicer shall be
permitted to resign from the obligations and duties hereby imposed on it, except
upon determination that such obligations and duties hereunder are no longer
permissible under applicable law or are in material conflict by reason of
applicable law with any other activities carried on by it, the other activities
of the Master Servicer or Special Servicer, as the case may be, so causing such
a conflict being of a type and nature carried on by the Master Servicer or
Special Servicer, as the case may be, at the date of this Agreement. Any such
determination of the nature described in the preceding sentence permitting the
resignation of the Master Servicer or the Special Servicer, as the case may be,
shall be evidenced by an Opinion of Counsel to such effect which shall be
rendered by Independent counsel, be addressed and delivered to the Trustee and
the Rating Agencies and be paid for by the resigning party. No such resignation
for either reason shall become effective until the Trustee or other successor
shall have assumed the responsibilities and obligations of the resigning party
hereunder.
Consistent with the foregoing, neither the Master Servicer nor
the Special Servicer shall be permitted, except as expressly provided herein, to
assign or transfer any of its rights, benefits or privileges hereunder to any
other Person, or delegate to or subcontract with, or authorize or appoint any
other Person to perform any of the duties, covenants or obligations to be
performed by it hereunder. If, pursuant to any provision hereof, the duties of
the Master Servicer or the Special Servicer are transferred to a successor
thereto, then, subject to Section 3.11 and Section 3.22, the entire amount of
compensation payable to the Master Servicer or the Special Servicer, as the case
may be, pursuant hereto and accrued after the date of transfer shall thereafter
be payable to such successor.
-184-
<PAGE>
SECTION 6.05. Rights of the Depositor and the Trustee in
Respect of the Master Servicer and the
Special Servicer.
The Master Servicer and the Special Servicer each shall afford
the Depositor and the Trustee, upon reasonable notice, during normal business
hours, access to all records maintained by the Master Servicer or the Special
Servicer, as the case may be, in respect of its rights and obligations hereunder
and access to such of its officers as are responsible for such obligations. Upon
reasonable request, the Master Servicer and the Special Servicer each shall
furnish the Depositor and the Trustee with its most recent annual audited
financial statements (or, if not available, the audited annual financial
statements of it and its affiliates on a consolidated basis), and such other
information as it possesses as is publicly available regarding its business,
affairs, property and condition, financial or otherwise. The Depositor may, but
is not obligated to, enforce the obligations of the Master Servicer and the
Special Servicer hereunder and may, but is not obligated to, perform, or cause a
designee to perform, any defaulted obligation of the Master Servicer or the
Special Servicer hereunder or, in connection with a default thereby, exercise
the rights of the Master Servicer or the Special Servicer hereunder; provided,
however, that neither the Master Servicer nor the Special Servicer shall be
relieved of any of its obligations hereunder by virtue of such performance by
the Depositor or its designee. The Depositor shall not have any responsibility
or liability for any action or failure to act by the Master Servicer or the
Special Servicer and is not obligated to supervise the performance of the Master
Servicer or the Special Servicer under this Agreement or otherwise.
-185-
<PAGE>
ARTICLE VII
DEFAULT
SECTION 7.01. Events of Default.
(a) "Event of Default", wherever used herein, unless the
context otherwise requires, means any one of the following events:
(i) any failure by the Master Servicer to deposit into the
Collection Account any amount required to be so deposited under this
Agreement, which failure continues unremedied for two (2) Business Days
following the date on which such deposit was first required to be made;
or any failure by the Master Servicer to deposit into, or to remit to
the Trustee for deposit into, the Distribution Account on any Master
Servicer Remittance Date, the full amount of any Master Servicer
Remittance Amount required to be so deposited or remitted under this
Agreement on such date, which failure is not remedied by 11:00 a.m.
(New York City time) on the relevant Distribution Date; or
(ii) any failure by the Special Servicer to deposit into, or
to remit to the Master Servicer for deposit into, the Collection
Account or the REO Account any amount required to be so deposited or
remitted under this Agreement which continues unremedied for two (2)
Business Days following the date on which such deposit or remittance
was first required to be made; or
(iii) any failure by the Master Servicer to remit to the
Trustee for deposit into the Distribution Account, on any Master
Servicer Remittance Date, the full amount of P&I Advances required to
be made on such date, which failure is not remedied by 11:00 a.m.
(New York City time) on the relevant Distribution Date; or
(iv) any failure by the Master Servicer to timely make any
Servicing Advance required to be made by it pursuant to this Agreement,
which failure to make such Servicing Advance continues unremedied for a
period of three (3) Business Days following the date on which notice
shall have been received by the Master Servicer from the Trustee as
provided in Section 3.11(e); or
(v) any failure by the Special Servicer to timely make (or
timely direct the Master Servicer to make) any Servicing Advance
required to be made by it or the Master Servicer at its direction
pursuant to this Agreement, which failure to make such Servicing
Advance continues unremedied for a period of three (3) Business Days
following the date on which notice shall have been received by the
Special Servicer from the Trustee as provided in Section 3.11(e); or
(vi) any failure on the part of the Master Servicer or the
Special Servicer duly to observe or perform in any material respect any
other of the covenants or agreements thereof contained in this
Agreement, which failure continues unremedied for a period of 30 days
after the date on which written notice of such failure, requiring the
same to be remedied, shall have
-186-
<PAGE>
been received by the Master Servicer or the Special Servicer, as the
case may be, from any other party hereto, or by the Master Servicer or
the Special Servicer, as the case may be, with a copy to each other
party hereto, from the Holders of Certificates entitled to at least 25%
of the Voting Rights, provided, however, that with respect to any such
failure which is not curable within such 30-day period, the Master
Servicer or the Special Servicer, as the case may be, shall have an
additional cure period of thirty (30) days to effect such cure so long
as the Master Servicer or the Special Servicer, as the case may be, has
commenced to cure such failure within the initial 30-day period and has
provided the Trustee with an Officer's Certificate certifying that it
has diligently pursued, and is continuing to pursue diligently, a full
cure; or
(vii) any breach on the part of the Master Servicer or the
Special Servicer of any representation or warranty thereof contained in
this Agreement which materially and adversely affects the interests of
any Class of Certificateholders and which continues unremedied for a
period of thirty (30) days after the date on which notice of such
breach, requiring the same to be remedied, shall have been given to the
Master Servicer or the Special Servicer, as the case may be, by any
other party hereto, or to the Master Servicer or the Special Servicer,
as the case may be, with a copy to each other party hereto, by the
Holders of Certificates entitled to at least 25% of the Voting Rights,
provided, however, that with respect to any such breach which is not
curable within such 30-day period, the Master Servicer or the Special
Servicer, as the case may be, shall have an additional cure period of
thirty (30) days to effect such cure so long as the Master Servicer or
the Special Servicer, as the case may be, has commenced to cure such
breach within the initial 30-day period and has provided the Trustee
with an Officer's Certificate certifying that it has diligently
pursued, and is continuing to pursue diligently, a full cure; or
(viii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case
under any present or future federal or state bankruptcy, insolvency or
similar law for the appointment of a conservator, receiver, liquidator,
trustee or similar official in any bankruptcy, insolvency, readjustment
of debt, marshalling of assets and liabilities or similar proceedings,
or for the winding-up or liquidation of its affairs, shall have been
entered against the Master Servicer or the Special Servicer and such
decree or order shall have remained in force undischarged or unstayed
for a period of sixty (60) days; or
(ix) the Master Servicer or the Special Servicer shall consent
to the appointment of a conservator, receiver, liquidator, trustee or
similar official in any bankruptcy, insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to it or of or relating to all or substantially all of its
property; or
(x) the Master Servicer or the Special Servicer shall admit in
writing its inability to pay its debts generally as they become due,
file a petition to take advantage of any applicable bankruptcy,
insolvency or reorganization statute, make an assignment for the
benefit of its creditors, voluntarily suspend payment of its
obligations, or take any corporate action in furtherance of the
foregoing; or
-187-
<PAGE>
(xi) there has been a qualification, downgrade or withdrawal
of any rating then assigned by either Rating Agency to any Class of
Certificates because the Master Servicer or Special Servicer, as the
case may be, is acting in such capacity;
(xii) the Trustee shall have received written notice from
either Rating Agency that the continuation of the Master Servicer or
the Special Servicer, as the case may be, in such capacity would result
in the qualification, downgrade or withdrawal of any rating then
assigned by such Rating Agency to any Class of Certificates.
Each Event of Default listed above as items (vi) through (x) shall constitute an
Event of Default only with respect to the relevant party; provided that if a
single entity acts or any two or more Affiliates act as Master Servicer and
Special Servicer, or in any two or more of the foregoing capacities, an Event of
Default in one capacity will constitute an Event of Default in each such
capacity.
(b) If any Event of Default with respect to the Master
Servicer or the Special Servicer (in either case, for purposes of this Section
7.01(b), the "Defaulting Party") shall occur and be continuing, then, and in
each and every such case, so long as the Event of Default shall not have been
remedied, the Depositor or the Trustee may (and, at the written direction of the
Holders of Certificates entitled to at least 51% of the Voting Rights, the
Trustee shall) terminate, by notice in writing to the Defaulting Party (with a
copy of such notice to each other party hereto), all of the rights and
obligations (accruing from and after such notice) of the Defaulting Party under
this Agreement and in and to the Mortgage Loans and the proceeds thereof. From
and after the receipt by the Defaulting Party of such written notice, all
authority and power of the Defaulting Party under this Agreement, whether with
respect to the Certificates (other than as a Holder of any Certificate) or the
Mortgage Loans or otherwise, shall pass to and be vested in the Trustee pursuant
to and under this Section, and, without limitation, the Trustee is hereby
authorized and empowered to execute and deliver, on behalf of and at the expense
of the Defaulting Party, as attorney-in-fact or otherwise, any and all documents
and other instruments, and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement or assignment of the Mortgage
Loans and related documents, or otherwise. The Master Servicer and the Special
Servicer each agree that, if it is terminated pursuant to this Section 7.01(b),
it shall promptly (and in any event no later than ten (10) Business Days
subsequent to its receipt of the notice of termination) provide the Trustee with
all documents and records reasonably requested thereby to enable the Trustee to
assume the Master Servicer's or Special Servicer's, as the case may be,
functions hereunder, and shall cooperate with the Trustee in effecting the
termination of the Master Servicer's or Special Servicer's, as the case may be,
responsibilities and rights hereunder, including, without limitation, the
transfer within two (2) Business Days to the Trustee for administration by it of
all cash amounts which shall at the time be or should have been credited by the
Master Servicer to the Collection Account, the Distribution Account, any
Servicing Account or any Reserve Account (if it is the Defaulting Party) or by
the Special Servicer to the REO Account, the Collection Account, any Servicing
Account or any Reserve Account (if it is the Defaulting Party) or thereafter be
received with respect to the Mortgage Loans and any REO Properties (provided,
however, that the Master Servicer and the Special Servicer each shall, if
terminated pursuant to this Section 7.01(b), continue to be obligated for or
entitled to receive all amounts accrued or owing by or to it under this
Agreement on or prior to the date of such termination, whether in respect of
Advances or otherwise, and it and its directors, officers, employees and agents
shall continue to be
-188-
<PAGE>
entitled to the benefits of Section 6.03 notwithstanding any such termination).
All reasonable costs and expenses of the Trustee, the Trust or the successor
Master Servicer or successor Special Servicer incurred in connection with
transferring the Mortgage Files and/or Servicing Files, other servicing records
and all funds relating to the Mortgage Loans and any REO Properties to the
successor Master Servicer or Special Servicer and amending this Agreement to
reflect such succession as successor Master Servicer or successor Special
Servicer pursuant to this Section 7.01 shall be paid by the predecessor Master
Servicer or the Special Servicer, as applicable, upon presentation of reasonable
documentation of such costs and expenses.
SECTION 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer or the Special
Servicer resigns pursuant to Section 6.04 or receives a notice of termination
pursuant to Section 7.01, the Trustee shall be the successor in all respects to
the Master Servicer or the Special Servicer, as the case may be, in its capacity
as such under this Agreement and the transactions set forth or provided for
herein and shall be subject to all the responsibilities, duties and liabilities
relating thereto and arising thereafter placed on the Master Servicer or the
Special Servicer, as the case may be, by the terms and provisions hereof,
including, without limitation, if the Master Servicer is the resigning or
terminated party, the Master Servicer's obligation to make P&I Advances;
provided that any failure to perform such duties or responsibilities caused by
the Master Servicer's or the Special Servicer's, as the case may be, failure to
cooperate or to provide information or monies required by Section 7.01 shall not
be considered a default by the Trustee hereunder. Neither the Trustee nor any
other successor shall be liable for any of the representations and warranties of
the resigning or terminated party or for any losses incurred by the resigning or
terminated party pursuant to Section 3.06 hereunder nor shall the Trustee nor
any other successor be required to purchase any Mortgage Loan hereunder. As
compensation therefor, the Trustee shall be entitled to all fees and other
compensation which the resigning or terminated party would have been entitled to
for future services rendered if the resigning or terminated party had continued
to act hereunder. Notwithstanding the above, the Trustee may, if it shall be
unwilling to so act, or shall, if it is unable to so act, or is not approved by
each and every Rating Agency as an acceptable master servicer or special
servicer, as the case may be, of commercial mortgage loans, or if the Holders of
Certificates entitled to at least 51% of the Voting Rights so request in writing
to the Trustee, promptly appoint, or petition a court of competent jurisdiction
to appoint, any established and qualified institution as the successor to the
Master Servicer or the Special Servicer, as the case may be, hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Master Servicer or the Special Servicer, as the case may be, hereunder;
provided that such appointment does not result in the qualification, downgrade
or withdrawal of any rating then assigned by either Rating Agency to any Class
of Certificates (as evidenced by written confirmation thereof from each Rating
Agency); and provided, further, that any successor to the Master Servicer must
have a net worth of at least $10 million. No appointment of a successor to the
Master Servicer or the Special Servicer hereunder shall be effective until the
assumption of the successor to such party of all its responsibilities, duties
and liabilities hereunder. Pending appointment of a successor to the Master
Servicer or the Special Servicer hereunder, the Trustee shall act in such
capacity as hereinabove provided. In connection with any such appointment and
assumption described herein, the Trustee may make such arrangements for the
compensation of such successor out of payments on or in respect of the Mortgage
Loans or otherwise as it and such successor shall agree; provided, however, that
no such compensation shall be in excess of that permitted the resigning or
terminated
-189-
<PAGE>
party hereunder. The Depositor, the Trustee, such successor and each other party
hereto shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession. Any costs and expenses associated
with the transfer of the foregoing functions under this Agreement (other than
the set-up costs of the successor) shall be required to be borne by the
predecessor Master Servicer or Special Servicer, as applicable, and, if not paid
by such predecessor Master Servicer or Special Servicer within 30 days of its
receipt of an invoice therefor, shall be an expense of the Trust; provided that
such predecessor Master Servicer or Special Servicer shall reimburse the Trust
for any such expense so incurred by the Trust; and provided, further, that the
Trustee shall decide whether and to what extent it is in the best interest of
the Certificateholders to pursue any remedy against any party obligated to make
such reimbursement.
SECTION 7.03. Notification to Certificateholders.
(a) Upon any assignment of rights and obligations by the
Master Servicer or the Special Servicer pursuant to Section 6.02, any
resignation of the Master Servicer or the Special Servicer pursuant to Section
6.04, any termination of the Master Servicer or the Special Servicer pursuant to
Section 7.01 or any appointment of a successor to the Master Servicer or the
Special Servicer pursuant to Section 6.02, Section 6.04 or Section 7.02, the
Trustee shall give prompt written notice thereof to Certificateholders at their
respective addresses appearing in the Certificate Register and to the Depositor.
(b) Not later than the later of (i) 60 days after the
occurrence of any event which constitutes or, with notice or lapse of time or
both, would constitute an Event of Default and (ii) five (5) days after a
Responsible Officer of the Trustee has actual knowledge, or would be deemed in
accordance with Section 8.02(vii) to have notice of the occurrence of such an
event, the Trustee shall transmit by mail to the other non-defaulting parties
hereto and all Certificateholders notice of such occurrence, unless such default
shall have been cured.
SECTION 7.04. Waiver of Events of Default.
The Holders entitled to at least 66-2/3% (or, in the case of
an Event of Default described in clauses (i) through (v) of Section 7.01(a),
100%) of the Voting Rights allocated to each of the Classes of Certificates
affected by any Event of Default hereunder may waive such Event of Default,
except that prior to any waiver of an Event of Default arising from a failure to
make P&I Advances, the Trustee shall be reimbursed all amounts which it has
advanced. Upon any such waiver of an Event of Default, such Event of Default
shall cease to exist and shall be deemed to have been remedied for every purpose
hereunder. No such waiver shall extend to any subsequent or other Event of
Default or impair any right consequent thereon except to the extent expressly so
waived. Notwithstanding any other provisions of this Agreement, for purposes of
waiving any Event of Default pursuant to this Section 7.04, Certificates
registered in the name of the Depositor or any Affiliate of the Depositor
(provided that neither the Depositor nor any Affiliate thereof is the party in
respect of which such Event of Default exists) shall be entitled to the same
Voting Rights with respect to the matters described above as they would if any
other Person held such Certificates.
-190-
<PAGE>
SECTION 7.05. Additional Remedies of Trustee Upon Event of
Default.
During the continuance of any Event of Default, so long as
such Event of Default shall not have been remedied, the Trustee, in addition to
the rights specified in Section 7.01, shall have the right, in its own name and
as trustee of an express trust, to take all actions now or hereafter existing at
law, in equity or by statute to enforce its rights and remedies and to protect
the interests, and enforce the rights and remedies, of the Certificateholders
(including the institution and prosecution of all judicial, administrative and
other proceedings and the filings of proofs of claim and debt in connection
therewith). Except as otherwise expressly provided in this Agreement, no remedy
provided for by this Agreement shall be exclusive of any other remedy, and each
and every remedy shall be cumulative and in addition to any other remedy, and no
delay or omission to exercise any right or remedy shall impair any such right or
remedy or shall be deemed to be a waiver of any Event of Default.
-191-
<PAGE>
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of the Trustee.
(a) The Trustee, prior to the occurrence of an Event of
Default hereunder and after the curing or waiver of all such Events of Default
and defaults which may have occurred, undertakes to perform such duties and only
such duties as are specifically set forth in this Agreement; provided that it is
herein acknowledged and agreed that the Trustee is at all times acting in a
fiduciary capacity with respect to the Certificateholders. If an Event of
Default hereunder occurs and is continuing, the Trustee shall exercise such of
the rights and powers vested in it by this Agreement and applicable law, and use
the same degree of care and skill in their exercise as a prudent man or the
Trustee would exercise or use under the circumstances in the conduct of his or
its own affairs (whichever standard would be higher). Any permissive right of
the Trustee contained in this Agreement shall not be construed as a duty.
(b) The Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Trustee which are specifically required to be
furnished pursuant to any provision of this Agreement (other than the Mortgage
Files, the review of which is specifically governed by the terms of Article II),
shall examine them to determine whether they conform in form to the requirements
of this Agreement. If any such instrument is found not to so conform to the
requirements of this Agreement in a material manner, the Trustee shall take such
action as it deems appropriate to have the instrument corrected. The Trustee
shall not be responsible for, but may assume and rely upon, the accuracy and
content of any resolution, certificate, statement, opinion, report, document,
order or other instrument furnished by the Depositor, the Master Servicer, the
Special Servicer or the Tax Administrator and accepted by the Trustee in good
faith, pursuant to this Agreement.
(c) No provision of this Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided, however, that:
(i) The duties and obligations of the Trustee shall be
determined solely by the express provisions of this Agreement, the
Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement
against the Trustee and, in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee and conforming to
the requirements of this Agreement;
(ii) The Trustee shall not be personally liable for an error
of judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
-192-
<PAGE>
(iii) The Trustee shall not be personally liable with respect
to any action taken, suffered or omitted to be taken by it in good
faith in accordance with the direction of Holders of Certificates
entitled to at least 25% (or, as to any particular matter, any higher
percentage as may be specifically provided for hereunder) of the Voting
Rights relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee, under this Agreement;
(iv) 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
or the Special Servicer under this Agreement except during such time,
if any, as the Trustee shall be the successor to, and be vested with
the rights, duties, powers and privileges of the Master Servicer or the
Special servicer in accordance with the terms of this Agreement; and
(v) Except to the extent expressly required by the other
provisions of this Agreement, the Trustee shall have no duty (A) to see
any recording, filing, or depositing of this Agreement or any agreement
referred to herein or any financing statement or continuation statement
evidencing a security interest, or to see the maintenance of any such
recording or filing or deposing or to any rerecording refiling or
redepositing thereof, (B) to see to any insurance, (C) to see 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 other than from
funds available in the Distribution Account or (D) to confirm or verify
the contents of any reports or certificates of the Master Servicer or
the Special 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.
SECTION 8.02. Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 8.01:
(i) The Trustee may rely upon and shall be protected in acting
or refraining from acting upon any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document reasonably believed by it to
be genuine and to have been signed or presented by the proper party or
parties;
(ii) The Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken or
suffered or omitted by it hereunder in good faith and in accordance
therewith;
(iii) The Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Agreement or to make any
investigation of matters arising hereunder or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request,
order or direction of any of the Certificateholders, pursuant to the
provisions of
-193-
<PAGE>
this Agreement, unless such Certificateholders shall have offered to
the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby; the
Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it; nothing contained herein
shall, however, relieve the Trustee of the obligation, upon the
occurrence of an Event of Default hereunder which has not been cured,
to exercise such of the rights and powers vested in it by this
Agreement and to use the same degree of care and skill in their
exercise as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs;
(iv) The Trustee shall not be personally liable for any action
reasonably taken, suffered or omitted by it in good faith and believed
by it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(v) Prior to the occurrence of an Event of Default hereunder,
and after the curing of all such Events of Default which may have
occurred, the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing to do so
by Holders of Certificates entitled to at least 25% of the Voting
Rights; provided, however, that if the payment within a reasonable time
to the Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the opinion
of the Trustee, not reasonably assured to the Trustee by the security
afforded to it by the terms of this Agreement, the Trustee may require
reasonable indemnity against such expense or liability as a condition
to taking any such action;
(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys-in-fact, provided that the use of any such
agent or attorney-in-fact shall not relieve the Trustee from any of its
obligations hereunder, and the Trustee shall remain responsible for all
acts and omissions of any such agent or attorney-in-fact;
(vii) For all purposes under this Agreement, the Trustee shall
not be deemed to have notice of any Event of Default hereunder unless a
Responsible Officer of the Trustee has actual knowledge thereof or
unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office, and such notice
references the Certificates or this Agreement; and
(viii) The Trustee shall not be responsible for any act or
omission of the Master Servicer, the Special Servicer or the Tax
Administrator (unless the Trustee is acting as Master Servicer, Special
Servicer or Tax Administrator, as the case may be) or for any act or
omission of the Depositor or the Mortgage Loan Sellers.
-194-
<PAGE>
SECTION 8.03. Trustee Not Liable for Validity or
Sufficiency of Certificates or Mortgage
Loans.
The recitals contained herein and in the Certificates (other
than the representations and warranties of, and the other statements attributed
to, the Trustee in Article II and the certificate of authentication executed by
the Trustee as Certificate Registrar set forth on each outstanding Certificate)
shall be taken as the statements of the Depositor, the Mortgage Loan Sellers,
the Master Servicer or the Special Servicer, as the case may be, and the Trustee
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Agreement (other than
as specifically set forth in Sections 2.08 and 2.09) or of any Certificate
(other than as to the signature of the Trustee set forth thereon) or of any
Mortgage Loan or related document. The Trustee shall not be accountable for the
use or application by the Depositor of any of the Certificates issued to it or
of the proceeds of such Certificates, or for the use or application of any funds
paid to the Depositor or the Mortgage Loan Sellers in respect of the assignment
of the Mortgage Loans to the Trust, or any funds deposited in or withdrawn from
the Collection Account or any other account by or on behalf of the Depositor,
the Master Servicer or the Special Servicer. The Trustee shall not be
responsible for the accuracy or content of any resolution, certificate,
statement, opinion, report, document, order or other instrument furnished by the
Depositor, the Master Servicer or the Special Servicer and accepted by the
Trustee in good faith, pursuant to this Agreement.
SECTION 8.04. Trustee May Own Certificates.
The Trustee, in its individual or any other capacity, and any
agent of the Trustee may become the owner or pledgee of Certificates with,
except as otherwise provided in the definition of Certificateholder, the same
rights it would have if it were not the Trustee or such agent, as the case may
be.
SECTION 8.05. Fees of the Trustee; Indemnification of
Trustee.
(a) The Trustee shall pay to itself, prior to making any other
distributions under Section 4.01(a), on each Distribution Date, pursuant to
Section 3.05(b)(ii), from amounts on deposit in the Distribution Account, an
amount equal to the Trustee Fee for such Distribution Date and, to the extent
not previously received, for each prior Distribution Date.
(b) The Trustee and any director, officer, employee or agent
of the Trustee shall be entitled to be indemnified and held harmless by the
Trust (to the extent of amounts on deposit in the Collection Account and the
Distribution Account from time to time) against any loss, liability or expense
(including, without limitation, costs and expenses of litigation, and of
investigation, counsel fees, damages, judgments and amounts paid in settlement)
arising out of, or incurred in connection with, the exercise and performance of
any of the powers and duties of the Trustee hereunder; provided that none of the
Trustee or any of the other above specified Persons shall be entitled to
indemnification pursuant to this Section 8.05(b) for (i) allocable overhead,
(ii) expenses or disbursements incurred or made by or on behalf of the Trustee
in the normal course of the Trustee's performing its routine duties in
accordance with any of the provisions hereof, (iii) any expense or liability
specifically required to be borne thereby pursuant to the terms hereof, or (iv)
any loss, liability
-195-
<PAGE>
or expense incurred by reason of willful misfeasance, bad faith or negligence in
the performance of the Trustee's obligations and duties hereunder, or by reason
of negligent disregard of such obligations or duties, or as may arise from a
breach of any representation, warranty or covenant of the Trustee made herein.
The provisions of this Section 8.05(b) shall survive any resignation or removal
of the Trustee and appointment of a successor trustee.
SECTION 8.06. Eligibility Requirements for the Trustee.
The Trustee hereunder shall at all times meet the requirements
of Section 26(a)(1) of the Investment Company Act and be a corporation, a trust
company, a bank or a banking association: (i) organized and doing business under
the laws of the United States of America or any State thereof or the District of
Columbia; (ii) authorized under such laws to exercise trust powers; (iii) having
a combined capital and surplus of at least $50,000,000; (iv) subject to
supervision or examination by federal or state authority; and (v) whose
long-term senior unsecured debt is rated not less than "Aa3" by Moody's and "AA"
by Fitch (or, in the case of each Rating Agency, such lower ratings as would
not, as confirmed in writing by such Rating Agency, result in a qualification,
downgrade or withdrawal of any of the then-current ratings assigned by such
Rating Agency to the Certificates). If such corporation, trust company, bank or
banking association publishes reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining
authority, then, for the purposes of this Section 8.06, the combined capital and
surplus of such corporation, trust company, bank or banking association shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 8.07.
The corporation, trust company, bank or banking association serving as Trustee
may have normal banking and trust relationships with the Depositor, the Mortgage
Loan Sellers, the Master Servicer, the Special Servicer, the Tax Administrator
and their respective Affiliates; provided that none of (i) the Depositor or any
Person involved in the organization or operation of the Depositor, (ii) Llama,
(iii) SBRC or (iv) any Affiliate of any of them, may be the Trustee hereunder.
SECTION 8.07. Resignation and Removal of the Trustee.
(a) The Trustee may at any time resign and be discharged from
the trusts hereby created by giving written notice thereof to the Depositor, the
Mortgage Loan Sellers, the Master Servicer, the Special Servicer, the Tax
Administrator and all the Certificateholders. Upon receiving such notice of
resignation, the Depositor shall promptly appoint a successor trustee reasonably
acceptable to the Master Servicer by written instrument, in duplicate, which
instrument shall be delivered to the resigning Trustee and to the successor
trustee. A copy of such instrument shall be delivered to the Mortgage Loan
Sellers, the Master Servicer, the Special Servicer, the Tax Administrator and
the Certificateholders by the Depositor. If no successor trustee shall have been
so appointed and have accepted appointment within thirty (30) days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee.
-196-
<PAGE>
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Depositor or the Master Servicer, or if at any
time the Trustee shall become incapable of acting, or shall be adjudged bankrupt
or insolvent, or a receiver of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Depositor may remove the Trustee and appoint a successor
trustee reasonably acceptable to the Master Servicer by written instrument, in
duplicate, which instrument shall be delivered to the Trustee so removed and to
the successor trustee. A copy of such instrument shall be delivered to the
Mortgage Loan Sellers, the Master Servicer, the Special Servicer, the Tax
Administrator and the Certificateholders by the Depositor.
(c) The Holders of Certificates entitled to at least 51% of
the Voting Rights may at any time remove the Trustee and appoint a successor
trustee by written instrument or instruments, in triplicate, signed by such
Holders or their attorneys-in-fact duly authorized, one complete set of which
instruments shall be delivered to the Master Servicer, one complete set to the
Trustee so removed and one complete set to the successor so appointed; provided
that the Master Servicer, the Depositor and the remaining Certificateholders
shall have been notified. A copy of such instrument shall be delivered to the
Depositor, the Mortgage Loan Sellers, the Special Servicer, the Tax
Administrator and the remaining Certificateholders by the Master Servicer.
(d) Any resignation or removal of the Trustee and appointment
of a successor trustee pursuant to any of the provisions of this Section 8.07
shall not become effective until acceptance of appointment by the successor
trustee as provided in Section 8.08.
SECTION 8.08. Successor Trustee.
(a) Any successor trustee appointed as provided in Section
8.07 shall execute, acknowledge and deliver to the Depositor, the Mortgage Loan
Sellers, the Master Servicer, the Special Servicer, the Tax Administrator and to
its predecessor trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The predecessor trustee shall deliver to the successor
trustee all Mortgage Files and related documents and statements held by it
hereunder (other than any Mortgage Files and related documents and statements at
the time held on its behalf by a Custodian, which Custodian shall become the
agent of the successor trustee), and the Depositor, the Mortgage Loan Sellers,
the Master Servicer, the Special Servicer, the Tax Administrator and the
predecessor trustee shall execute and deliver such instruments and do such other
things as may reasonably be required to more fully and certainly vest and
confirm in the successor trustee all such rights, powers, duties and
obligations, and to enable the successor trustee to perform its obligations
hereunder. If such predecessor trustee was removed as Trustee under this
Agreement without cause, the cost of any such execution, delivery or action
shall be at the expense of the Trust.
(b) No successor trustee shall accept appointment as provided
in this Section 8.08 unless at the time of such acceptance such successor
trustee shall be eligible under the provisions of Section 8.06.
-197-
<PAGE>
(c) Upon acceptance of appointment by a successor trustee as
provided in this Section 8.08, the Master Servicer shall mail notice of the
succession of such trustee hereunder to the Depositor and the
Certificateholders. If the Master Servicer fails to mail such notice within ten
(10) days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Master Servicer.
SECTION 8.09. Merger or Consolidation of the Trustee.
Any entity into which the Trustee may be merged or converted
or with which it may be consolidated or any entity resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any entity
succeeding to the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, without the execution or filing of any paper
or any further act on the part of any of the parties hereto, anything herein to
the contrary notwithstanding; provided that the Trustee shall continue to be
eligible under the provisions of Section 8.06. The successor to the Trustee
shall promptly notify in writing each of the other parties hereto, the
Certificateholders and the Rating Agencies of any such merger, conversion,
consolidation or succession to business.
SECTION 8.10. Appointment of Co-Trustee or Separate
Trustee.
(a) Notwithstanding any other provisions hereof, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing the same may at the time be
located, the Master Servicer and the Trustee acting jointly shall have the power
and shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees, jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity, such title
to the Trust Fund, or any part thereof, and, subject to the other provisions of
this Section 8.10, such powers, duties, obligations, rights and trusts as the
Master Servicer and the Trustee may consider necessary or desirable. If the
Master Servicer shall not have joined in such appointment within fifteen (15)
days after the receipt by it of a request to do so, or in case an Event of
Default in respect of the Master Servicer shall have occurred and be continuing,
the Trustee alone shall have the power to make such appointment. No co-trustee
or separate trustee hereunder shall be required to meet the terms of eligibility
as a successor trustee under Section 8.06 hereunder and no notice to Holders of
Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be
required under Section 8.08 hereof. The Trustee shall not, however, appoint any
particular co-trustee or separate trustee until it has obtained written
confirmation from each Rating Agency that such appointment shall not result in
the qualification, downgrade or withdrawal of any rating assigned by such Rating
Agency to any Class of Certificates.
(b) In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Master Servicer, the Special Servicer or the Tax
Administrator hereunder), the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust Fund or any portion
thereof in any such
-198-
<PAGE>
jurisdiction) shall be exercised and performed by such separate trustee or
co-trustee at the direction of the Trustee.
(c) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may, at any time,
constitute the Trustee, its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
(e) The appointment of a co-trustee or separate trustee under
this Section 8.10 shall not relieve the Trustee of its duties, responsibilities
or liabilities hereunder.
SECTION 8.11. Appointment of Custodians.
The Trustee may, at its own expense, with the consent of the
Master Servicer, which consent shall not unreasonably be withheld, appoint one
or more Custodians to hold all or a portion of the Mortgage Files as agent for
the Trustee; provided that if the Custodian is an Affiliate of the Trustee such
consent of the Master Servicer need not be obtained and the Trustee shall
instead notify the Master Servicer of such appointment. Each Custodian shall be
a depository institution subject to supervision by federal or state authority,
shall have combined capital and surplus (or shall have its performance
guaranteed by an Affiliate with a combined capital and surplus) of at least
$10,000,000, shall be qualified to do business in the jurisdiction in which it
holds any Mortgage File, shall maintain errors and omissions insurance and a
fidelity bond meeting the requirements of Fannie Mae for mortgage loan document
custodians acting on its behalf and shall not be the Depositor, the Mortgage
Loan Sellers, or any Affiliate of any of them. The long-term senior unsecured
debt of each Custodian shall have been rated at least investment grade by each
Rating Agency. Each Custodian shall be subject to the same obligations and
standard of care as would be imposed on the Trustee hereunder in connection with
the retention of Mortgage Files directly by the Trustee. The appointment of one
or more Custodians shall not relieve the Trustee from any of its duties,
liabilities or obligations hereunder, and the Trustee shall remain responsible
for all acts and omissions of any Custodian.
-199-
<PAGE>
SECTION 8.12. Access to Certain Information.
(a) The Trustee shall provide or cause to be provided to the
Depositor, the Master Servicer, the Special Servicer and the Rating Agencies,
and to the OTS, the FDIC, and any other federal or state banking or insurance
regulatory authority that may exercise authority over any Certificateholder,
access to the Mortgage Files and any other documentation regarding the Mortgage
Loans and the Trust Fund, that is within its control which may be required by
this Agreement or by applicable law. Such access shall be afforded without
charge but only upon reasonable prior written request and during normal business
hours at the offices of the Trustee designated by it.
(b) Promptly following the first sale of any Non-Registered
Certificate to an Independent third party, the Depositor shall provide to the
Trustee ten (10) copies of any private placement memorandum or other disclosure
document used by the Depositor or its Affiliate in connection with the offer and
sale of the Class of Certificates to which such Non-Registered Certificate
belongs. In addition, if any such private placement memorandum or disclosure
document is revised, amended or supplemented at any time following the delivery
thereof to the Trustee, the Depositor promptly shall inform the Trustee of such
event and shall deliver to the Trustee ten (10) copies of the private placement
memorandum or disclosure document, as revised, amended or supplemented. The
Trustee shall maintain at its Corporate Trust Office and shall on behalf of the
Depositor, upon reasonable advance written notice, make available during normal
business hours for review by each Rating Agency and by any Certificateholder or
any Certificate Owner or any Person identified to the Trustee by a
Certificateholder or a Certificate Owner as a prospective transferee of a
Certificate or interest therein, originals or copies of the following items: (i)
in the case of a Holder or prospective transferee of a Non-Registered
Certificate, any private placement memorandum or other disclosure document
relating to the Class of Certificates to which such Non-Registered Certificate
belongs, in the form most recently provided to the Trustee; and (ii) in all
cases, (A) this Agreement and the Sub-Servicing Agreements, and any amendments
hereto or thereto, (B) all statements and reports required to be delivered to
Holders of the relevant Class of Certificates pursuant to Section 4.02(a) since
the Closing Date, (C) all reports delivered to the Trustee since the Closing
Date pursuant to Section 4.02(b) and Section 4.02(c), (D) all Officer's
Certificates delivered to the Trustee since the Closing Date pursuant to Section
3.13, (E) all accountants' reports delivered to the Trustee since the Closing
Date pursuant to Section 3.14, (F) the most recent inspection report prepared by
the Master Servicer or Special Servicer, as the case may be, and delivered to
the Trustee in respect of each Mortgaged Property pursuant to Section 3.12(a),
(G) all Borrower financial statements and Mortgaged Property operating
statements and rent rolls delivered to the Trustee by the Master Servicer or the
Special Servicer since the Closing Date pursuant to Section 3.12(b), (H) any and
all notices and reports delivered to the Trustee with respect to any Mortgaged
Property securing a defaulted Mortgage Loan as to which the environmental
testing contemplated by Section 3.09(c) revealed that either of the conditions
set forth in clauses (i) and (ii) of the first sentence thereof was not
satisfied or that any remedial, corrective or other further action contemplated
in such clauses is required (but only for so long as such Mortgaged Property or
the related Mortgage Loan is part of the Trust Fund), and (I) all documents
constituting the Mortgage Files, including, without limitation, any and all
modifications, waivers and amendments of the terms of a Mortgage Loan entered
into by the Master Servicer or the Special Servicer and delivered to the Trustee
pursuant to Section 3.20 (but, in each case, only for so long as the related
Mortgage Loan is part of the Trust Fund). Copies of any and all of the foregoing
items are to be available from the Trustee upon request;
-200-
<PAGE>
however, the Trustee shall be permitted to require payment of a sum sufficient
to cover the reasonable costs and expenses of providing such service.
In connection with providing access to or copies of the items
described in the immediately preceding paragraph of this Section 8.12(b), the
Trustee may require, unless the Depositor directs otherwise, (i) in the case of
Certificate Owners, a written confirmation executed by the requesting Person, in
form reasonably satisfactory to the Trustee, generally to the effect that such
Person is a beneficial holder of Certificates and will keep such information
confidential and (ii) in the case of any prospective purchaser of a Certificate
or, in the case of a Book-Entry Certificate, of a beneficial ownership interest
therein, a written confirmation executed by the requesting Person, in form
reasonably satisfactory to the Trustee, generally to the effect that such Person
is a prospective purchaser of a Certificate or a beneficial ownership interest
therein, is requesting the information for use in evaluating a possible
investment in Certificates and will otherwise keep such information
confidential. All Certificateholders, by acceptance of their Certificates, shall
be deemed to have agreed to keep such information confidential, except to the
extent that the Depositor grants written permission to the contrary.
Notwithstanding the preceding sentences of this paragraph, the Trustee shall
have no responsibility for the accuracy, completeness or sufficiency of any
information so made available or furnished by it in the manner described in the
immediately preceding paragraph.
SECTION 8.13. Filings with the Securities and Exchange
Commission.
(a) With respect to the Trust's fiscal year 1999 (and, if as
of the beginning of any other fiscal year for the Trust, the Registered
Certificates are held (directly or, in the case of Registered Certificates held
in book-entry form, through the Depository) by at least 300 Holders and/or
Depository Participants having accounts with the Depository), the Trustee shall:
(i) during such fiscal year, in accordance with the Exchange
Act, the rules and regulations promulgated thereunder and applicable
"no-action letters" issued by the Commission, prepare for filing,
execute and properly file with the Commission monthly, with respect to
the Trust, a Current Report on Form 8-K with copies of the Distribution
Date Statement and the Unrestricted Servicer Reports attached as
exhibits;
(ii) during such fiscal year, (A) monitor for and promptly
notify the Depositor of the occurrence or existence of any of the
matters identified in Section 11.09(a) and/or Section 8.13(b) (in each
case to the extent that a Responsible Officer of the Trustee has actual
knowledge thereof), (B) cooperate with the Depositor in obtaining all
necessary information in order to enable the Depositor to prepare a
Current Report on Form 8-K reporting any such matter in accordance with
the Exchange Act, the rules and regulations promulgated thereunder and
applicable "no-action letters" issued by the Commission, and (C)
execute and promptly file with the Commission any such Current Report
on Form 8-K prepared by or on behalf of the Depositor and delivered to
the Trustee; and
-201-
<PAGE>
(iii) within ninety (90) days following the end of such fiscal
year, prepare, execute and properly file with the Commission, with
respect to the Trust, an Annual Report on Form 10-K which complies in
all material respects with the requirements of the Exchange Act, the
rules and regulations promulgated thereunder and applicable "no-action
letters" issued by the Commission;
provided that (x) the Trustee shall not have any responsibility to file any
items (other than those generated by it) that have not been received in a format
suitable for electronic filing via the EDGAR system (or in an ASCII, Microsoft
Word or Excel format) and shall not have any responsibility to convert any such
items (other than those generated by it) to such formats and (y) the Depositor
shall be responsible for preparing, executing and filing (via the EDGAR system
within fifteen (15) days following the Closing Date) a Current Report on Form
8-K reporting the establishment of the Trust and whereby this Agreement is filed
as an exhibit. Each of the other parties to this Agreement shall deliver to the
Trustee in a format suitable for electronic filing via the EDGAR system (or in
an ASCII, Microsoft Word or Excel format) any and all items (including, in the
case of the Master Servicer and the Special Servicer, Unrestricted Servicer
Reports) contemplated to be filed with the Commission pursuant to this Section
8.13(a).
(b) At all times during the Trust's fiscal year 1999 (and, if
as of the beginning of any other fiscal year for the Trust, the Registered
Certificates are held (directly or, in the case of Registered Certificates held
in book-entry form, through the Depository) by at least 300 Holders and/or
Depository Participants having accounts with the Depository, at all times during
such other fiscal year), the Trustee shall monitor for and promptly notify the
Depositor of the occurrence or existence of any of the following matters of
which a Responsible Officer of the Trustee has actual knowledge:
(i) any failure of the Trustee to make any monthly
distributions to the Holders of any Class of Certificates, which
failure is not otherwise reflected in the Certificateholder Reports
filed with the Commission or has not otherwise been reported to the
Depositor pursuant to any other Section of this Agreement;
(ii) any acquisition or disposition by the Trust of a Mortgage
Loan or an REO Property, which acquisition or disposition has not
otherwise been reflected in the Certificateholder Reports filed with
the Commission or has not otherwise been reported to the Depositor
pursuant to any other Section of this Agreement;
(iii) any other acquisition or disposition by the Trust of a
significant amount of assets (other than Permitted Investments,
Mortgage Loans and REO Properties), other than in the normal course of
business;
(iv) any change in the fiscal year of the Trust;
(v) any material legal proceedings, other than ordinary
routine litigation incidental to the business of the Trust, to which
the Trust (or any party to this Agreement on behalf of the Trust) is a
party or of which any property included in the Trust Fund is subject,
or any threat by a governmental authority to bring any such legal
proceedings;
-202-
<PAGE>
(vi) any event of bankruptcy, insolvency, readjustment of
debt, marshalling of assets and liabilities, or similar proceedings in
respect of or pertaining to the Trust or any party to this Agreement,
or any actions by or on behalf of the Trust or any party to this
Agreement indicating its bankruptcy, insolvency or inability to pay its
obligations; and
(vii) any change in the rating or ratings assigned to any
Class of Certificates not otherwise reflected in the Certificateholder
Reports filed with the Commission;
provided that (a) the actual knowledge of a Responsible Officer of the Trustee
of any material legal proceedings of which property included in the Trust Fund
is subject or of any material legal proceedings threatened by a governmental
authority is limited to circumstances where it would be reasonable for the
Trustee to identify such property as an asset of, or as securing an asset of,
the Trust or such threatened proceedings as concerning the Trust and (b) no
Responsible Officer of the Trustee shall be deemed to have actual knowledge of
the matters described in clauses (vi) and (vii) of this Section 8.13(b) unless
(x) any such matter contemplated in clause (vi) occurred or related specifically
to the Trust or (y) such Responsible Officer was notified in writing.
(c) The Master Servicer, the Special Servicer and the
Depositor shall each, as applicable, promptly notify the Trustee of the
occurrence or existence of any of the following matters of which a Servicing
Officer thereof has actual knowledge:
(i) any material legal proceedings, other than ordinary
routine litigation incidental to the business of such Person, to which
the Trust or such Person or such Person on behalf of the Trust is a
party or of which any property included in the Trust Fund is subject,
or any threat by a governmental authority to bring any such legal
proceedings; and
(ii) any event of bankruptcy, insolvency, readjustment of
debt, marshalling of assets and liabilities, or similar proceedings in
respect of such Person or the Trust, or any actions by or on behalf of
such Person or the Trust indicating its bankruptcy, insolvency or
inability to pay its obligations.
(d) If as of the beginning of any fiscal year for the Trust
(other than fiscal year 1999), the Registered Certificates are held (directly
or, in the case of Registered Certificates held in book-entry form, through the
Depository) by less than 300 Holders and/or Depository Participants having
accounts with the Depository, the Trustee shall, in accordance with the Exchange
Act and the rules and regulations promulgated thereunder, timely file a Form 15
with respect to the Trust.
-203-
<PAGE>
ARTICLE IX
TERMINATION
SECTION 9.01. Termination Upon Repurchase or Liquidation of
All Mortgage Loans.
Subject to Section 9.02, the Trust and the respective
obligations and responsibilities under this Agreement of the Depositor, the
Mortgage Loan Sellers, the Master Servicer, the Special Servicer, the Trustee
and the Tax Administrator (other than the obligations of the Trustee to provide
for and make payments to Certificateholders as hereafter set forth) shall
terminate upon payment (or provision for payment) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required hereunder to be so
paid on the Distribution Date following the earlier to occur of (i) the purchase
by the Majority Certificateholder of the Controlling Class (other than the
Depositor or either Mortgage Loan Seller) or the Master Servicer (in that order
or priority) of all Mortgage Loans and each REO Property remaining in the Trust
Fund at a price (to be calculated by the Master Servicer and the Trustee as of
the close of business on the third Business Day preceding the date upon which
notice of any such purchase is furnished to Certificateholders pursuant to the
fourth paragraph of this Section 9.01 and as if the purchase was to occur on
such Business Day) equal to (A) the aggregate Purchase Price of all the Mortgage
Loans included in the Trust Fund, plus (B) the appraised value of each REO
Property, if any, included in the Trust Fund (such appraisal to be conducted by
a Qualified Appraiser selected by the Master Servicer and approved by the
Trustee), minus (C) if such purchase is being made by the Master Servicer, the
aggregate amount of unreimbursed Advances made by the Master Servicer, together
with any Advance Interest payable to the Master Servicer in respect of such
Advances and any unpaid Master Servicing Fees remaining outstanding (which items
shall be deemed to have been paid or reimbursed to the Master Servicer in
connection with such purchase), (ii) the exchange by any Sole Certificateholder
of all the Certificates for all Mortgage Loans and each REO Property remaining
in the Trust Fund, and (iii) the final payment or other liquidation (or any
Advance with respect thereto) of the last Mortgage Loan or REO Property
remaining in the Trust Fund; provided, however, that in no event shall the trust
created hereby continue beyond the expiration of 21 years from the death of the
last survivor of the descendants of Joseph P. Kennedy, the late ambassador of
the United States to the Court of St. James, living on the date hereof.
Any Majority Certificateholder of the Controlling Class (other
than the Depositor or either Mortgage Loan Seller) and the Master Servicer, in
that order of priority, shall have the right to purchase all of the Mortgage
Loans and each REO Property remaining in the Trust Fund as contemplated by
clause (i) of the preceding paragraph by giving written notice to the other
parties hereto no later than sixty (60) days prior to the anticipated date of
purchase; provided, however, that the Master Servicer and any Majority
Certificateholder of the Controlling Class (other than the Depositor or either
Mortgage Loan Seller) each may so elect to purchase all of the Mortgage Loans
and each REO Property remaining in the Trust Fund only if the aggregate Stated
Principal Balance of the Mortgage Pool at the time of such election is less than
1.0% of the Initial Pool Balance. In the event that the Master Servicer or any
Majority Certificateholder of the Controlling Class (other than the Depositor or
either Mortgage Loan Seller) elects to purchase all of the Mortgage Loans and
each
-204-
<PAGE>
REO Property remaining in the Trust Fund in accordance with the preceding
sentence, the Master Servicer or such Majority Certificateholder, as applicable,
shall deposit in the Distribution Account not later than the Master Servicer
Remittance Date relating to the Distribution Date on which the final
distribution on the Certificates is to occur, an amount in immediately available
funds equal to the above-described purchase price (exclusive of any portion
thereof payable to any Person other than the Certificateholders pursuant to
Section 3.05(a), which portion shall be deposited in the Collection Account). In
addition, the Master Servicer shall transfer all amounts required to be
transferred to the Distribution Account on such Master Servicer Remittance Date
from the Collection Account pursuant to the first paragraph of Section 3.04(b).
Upon confirmation that such final deposits have been made, the Trustee shall
release or cause to be released to the purchaser or its designee, the Mortgage
Files for the remaining Mortgage Loans and shall execute all assignments,
endorsements and other instruments furnished to it by the purchaser, as shall be
necessary to effectuate transfer of the Mortgage Loans and REO Properties
remaining in the Trust Fund.
Any Sole Certificateholder shall have the right to exchange
all of the Certificates for all of the Mortgage Loans and each REO Property
remaining in the Trust Fund as contemplated by clause (ii) of the second
preceding paragraph by giving written notice to all the parties hereto no later
than 60 days prior to the anticipated date of exchange. In the event that the
Sole Certificateholder elects to exchange all of the Certificates for all of the
Mortgage Loans and each REO Property remaining in REMIC I in accordance with the
preceding sentence, the Sole Certificateholder, not later than the Master
Servicer Remittance Date relating to the Distribution Date on which the final
distribution on the Certificates is to occur, shall deposit: (i) in the
Distribution Account an amount in immediately available funds equal to all
amounts then due and owing to the Trustee and/or Tax Administrator hereunder
that may be withdrawn from the Distribution Account pursuant to Section 3.05(b);
and (ii) in the Collection Account an amount in immediately available funds
equal to all amounts then due and owing to the Master Servicer, the Special
Servicer, the Trustee and/or the Tax Administrator hereunder that may be
withdrawn from the Collection Account pursuant to Section 3.05(a). In addition,
the Master Servicer shall transfer all amounts required to be transferred to the
Distribution Account on such Master Servicer Remittance Date from the Collection
Account pursuant to the first paragraph of Section 3.04(b). Upon confirmation
that such final deposits have been made and following the surrender of all the
Certificates on the Final Distribution Date, the Trustee shall release or cause
to be released to the Sole Certificateholder or its designee, the Mortgage Files
for the remaining Mortgage Loans and shall execute all assignments, endorsements
and other instruments furnished to it by the Sole Certificateholder, as shall be
necessary to effectuate transfer of the Mortgage Loans and REO Properties
remaining in the Trust Fund.
Notice of any termination shall be given promptly by the
Trustee by letter to Certificateholders and, if not previously notified pursuant
to the preceding paragraphs, to the other parties hereto mailed (a) in the event
such notice is given in connection with a purchase by the Master Servicer or any
Majority Certificateholder of the Controlling Class (other than the Depositor or
a Mortgage Loan Seller) of all of the Mortgage Loans and each REO Property
remaining in the Trust Fund, not earlier than the 15th day and not later than
the 25th day of the month next preceding the month of the final distribution on
the Certificates or (b) otherwise during the month of such final distribution on
or before the 5th day of such month, in each case specifying (i) the
Distribution Date upon which the Trust will terminate and final payment on the
Certificates will be made, (ii) the amount of any such final payment and (iii)
that the Record Date otherwise applicable to such
-205-
<PAGE>
Distribution Date is not applicable, payments being made only upon presentation
and surrender of the Certificates at the offices of the Certificate Registrar or
such other location therein designated.
Upon presentation and surrender of the Certificates by the
Certificateholder(s) on the Final Distribution Date, the Trustee shall
distribute to each Certificateholder so presenting and surrendering its
Certificates such Certificateholder's Percentage Interest of that portion of the
Available Distribution Amount for, and any Prepayment Premiums distributable on,
such date that is allocable to payments on the relevant Class in accordance with
Section 4.01.
Any funds not distributed to any Holder or Holders of
Certificates of any Class on the Final Distribution Date because of the failure
of such Holder or Holders to tender their Certificates shall, on such date, be
set aside and held uninvested in trust and credited to the account or accounts
of the appropriate non-tendering Holder or Holders. If any Certificates as to
which notice has been given pursuant to this Section 9.01 shall not have been
surrendered for cancellation within six (6) months after the time specified in
such notice, the Trustee shall mail a second notice to the remaining
non-tendering Certificateholders to surrender their Certificates for
cancellation in order to receive the final distribution with respect thereto. If
within one year after the second notice all such Certificates shall not have
been surrendered for cancellation, the Trustee, directly or through an agent,
shall take such reasonable steps to contact the remaining non-tendering
Certificateholders concerning the surrender of their Certificates as it shall
deem appropriate. The costs and expenses of holding such funds in trust and of
contacting such Certificateholders following the first anniversary of the
delivery of such second notice to the non-tendering Certificateholders shall be
paid out of such funds. No interest shall accrue or be payable to any former
Holder on any amount held in trust hereunder. If by the second anniversary of
the delivery of such second notice, all of the Certificates shall not have been
surrendered for cancellation, then (subject to applicable escheat laws) the
Class R-III Certificateholders shall be entitled to all unclaimed funds and
other assets which remain subject thereto.
SECTION 9.02. Additional Termination Requirements.
(a) In the event the Master Servicer or any Majority
Certificateholder of the Controlling Class (other than the Depositor or either
Mortgage Loan Seller) purchases, or the Sole Certificateholder exchanges all the
Certificates for, all of the Mortgage Loans and each REO Property remaining in
each REMIC Pool as provided in Section 9.01, the Trust (and, accordingly, each
REMIC Pool) shall be terminated in accordance with the following additional
requirements, unless the Master Servicer or such Majority Certificateholder, as
applicable, obtains at its own expense and delivers to the Trustee and the Tax
Administrator an Opinion of Counsel, addressed to the Trustee and the Tax
Administrator, to the effect that the failure of the Trust to comply with the
requirements of this Section 9.02 will not result in the imposition of taxes on
"prohibited transactions" of any REMIC Pool as defined in Section 860F of the
Code or cause any REMIC Pool to fail to qualify as a REMIC at any time that any
Certificates are outstanding:
(i) the Tax Administrator shall specify the first day in 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;
-206-
<PAGE>
(ii) during such 90-day liquidation period and at or prior to
the time of making of the final payment on the Certificates, the
Trustee shall sell all of the assets of each REMIC Pool to the Master
Servicer, the Majority Certificateholder of the Controlling Class or
the Sole Certificateholder, as applicable, for cash and/or
Certificates; and
(iii) at the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited, to the Holders of the applicable Class of
Residual Certificates all cash on hand (other than cash retained to
meet claims), and each of REMIC Pool shall terminate at that time.
(b) By their acceptance of Certificates, the Holders thereof
hereby agree to authorize the Tax Administrator to adopt a plan of complete
liquidation of each of REMIC Pool in accordance with the terms and conditions of
this Agreement, which authorization shall be binding upon all successor
Certificateholders.
-207-
<PAGE>
ARTICLE X
ADDITIONAL REMIC PROVISIONS
SECTION 10.01. REMIC Administration.
(a) The Tax Administrator shall elect to treat each REMIC Pool
as a REMIC under the Code and, if necessary, under Applicable State Law. Each
such election will be made on Form 1066 or other appropriate federal or state
Tax Returns for the taxable year ending on the last day of the calendar year in
which the Certificates are issued.
(b) The REMIC I Regular Interests are hereby designated as the
"regular interests" (within the meaning of Section 860G(a)(1) of the Code), and
the REMIC I Residual Interest is the sole "residual interest" (within the
meaning of Section 860G(a)(2) of the Code), in REMIC I. The 625 Polk Street
REMIC Regular Interest shall constitute the "regular interest" (within the
meaning of Section 860G(a)(1) of the Code), and the 625 Polk Street REMIC
Residual Interest shall constitute the sole "residual interest" (within the
meaning of Section 860G(a)(2) of the Code), in the 625 Polk Street REMIC. The
Fourth Avenue Marketplace REMIC Regular Interest shall constitute the "regular
interest" (within the meaning of Section 860G(a)(1) of the Code), and the Fourth
Avenue Marketplace REMIC Residual Interest shall constitute the sole "residual
interest" (within the meaning of Section 860G(a)(2) of the Code), in the Fourth
Avenue Marketplace REMIC. The GTE Plaza Shopping Center REMIC Regular Interest
shall constitute the "regular interest" (within the meaning of Section
860G(a)(1) of the Code), and the GTE Plaza Shopping Center REMIC Residual
Interest shall constitute the sole "residual interest" (within the meaning of
Section 860G(a)(2) of the Code), in the GTE Plaza Shopping Center REMIC. The
Holmead Apartments REMIC Regular Interest shall constitute the "regular
interest" (within the meaning of Section 860G(a)(1) of the Code), and the
Holmead Apartments REMIC Residual Interest shall constitute the sole "residual
interest" (within the meaning of Section 860G(a)(2) of the Code), in the Holmead
Apartments REMIC. The Parker Paints (Andresen Plaza) REMIC Regular Interest
shall constitute the "regular interest" (within the meaning of Section
860G(a)(1) of the Code), and the Parker Paints (Andresen Plaza) REMIC Residual
Interest shall constitute the sole "residual interest" (within the meaning of
Section 860G(a)(2) of the Code), in the Parker Paints (Andresen Plaza) REMIC.
The 500 Third Street REMIC Regular Interest shall constitute the "regular
interest" (within the meaning of Section 860G(a)(1) of the Code), and the 500
Third Street REMIC Residual Interest shall constitute the sole "residual
interest" (within the meaning of Section 860G(a)(2) of the Code), in the 500
Third Street REMIC. The Park View Plaza REMIC Regular Interest shall constitute
the "regular interest" (within the meaning of Section 860G(a)(1) of the Code),
and the Park View Plaza REMIC Residual Interest shall constitute the sole
"residual interest" (within the meaning of Section 860G(a)(2) of the Code), in
the Park View Plaza REMIC. The REMIC II Regular Interests are hereby designated
as the "regular interests" (within the meaning of Section 860G(a)(1) of the
Code) in REMIC II, and the Class R-II Certificates are hereby designated as the
sole class of "residual interests" (within the meaning of Section 860G(a)(2) of
the Code) in REMIC II. The Class X, Class A-1, Class A-2, Class B, Class C,
Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L and Class
M Certificates are hereby designated as the "regular interests" (within the
meaning of Section 860G(a)(1) of the Code), and the Class R-III Certificates are
hereby designated as the sole class of "residual interests" (within the meaning
of
-208-
<PAGE>
Section 860G(a)(2) of the Code), in REMIC III. None of the Tax Administrator,
the Master Servicer, the Special Servicer or the Trustee shall, to the extent it
is within the control of such Person, create or permit the creation of any other
"interests" in any REMIC Pool (within the meaning of Treasury regulation Section
1.860D-1(b)(1)).
(c) The Closing Date is hereby designated as the "Startup Day"
of each of REMIC I, REMIC II and REMIC III within the meaning of Section
860G(a)(9) of the Code.
(d) The Holder of Certificates evidencing the largest
Percentage Interest in the related Class of Residual Certificates is hereby
designated as agent for the Tax Matters Person of each REMIC Pool and shall: act
on behalf of the Trust in relation to any tax matter or controversy, represent
the Trust in any administrative or judicial proceeding relating to an
examination or audit by any governmental taxing authority, request an
administrative adjustment as to any taxable year of any REMIC Pool, seek private
letter rulings from the IRS in accordance with Section 10.01(g), enter into
settlement agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of any REMIC Pool, and otherwise act on
behalf of each REMIC Pool in relation to any tax matter or controversy involving
such REMIC. By their acceptance thereof, the Holders of the Residual
Certificates hereby agree to irrevocably appoint the Tax Administrator as their
agent to perform all of the duties of the Tax Matters Person for each REMIC Pool
and the Tax Administrator agrees to act in such capacity. Subject to Section
10.01(h), the legal expenses and costs of any action described in this
subsection (d) and any liability resulting therefrom shall be expenses, costs
and liabilities of the Trust, and the Tax Administrator shall be entitled to be
reimbursed therefor out of any amounts on deposit in the Distribution Account as
provided by Section 3.05(b).
(e) The Tax Administrator shall prepare and file, and the
Trustee shall sign, all of the Tax Returns in respect of each REMIC Pool. The
expenses of preparing and filing such returns, and performing its duties under
Section 10.01(f), shall be borne by the Tax Administrator without any right of
reimbursement therefor.
(f) The Tax Administrator shall perform on behalf of each
REMIC Pool all reporting and other tax compliance duties that are the
responsibility of each such REMIC under the Code, the REMIC Provisions or other
compliance guidance issued by the IRS or any other taxing authority under
Applicable State Law. Included among such duties, the Tax Administrator shall
provide to: (i) any Transferor of a Residual Certificate, such information as is
necessary for the application of any tax relating to the transfer of a Residual
Certificate to any Person who is not a Permitted Transferee; (ii) the
Certificateholders, such information or reports as are required by the Code or
the REMIC Provisions, including, without limitation, reports relating to
interest, original issue discount and market discount or premium (using the
Prepayment Assumption as required); and (iii) the IRS, the name, title, address
and telephone number of the Person who will serve as the representative of each
REMIC Pool.
(g) The Tax Administrator shall perform its duties more
specifically set forth hereunder in a manner consistent with maintaining the
status of each REMIC Pool as a REMIC under the REMIC Provisions (and each of the
other parties hereto shall assist it, to the extent reasonably requested by it).
The Tax Administrator shall not knowingly take (or cause any REMIC Pool to take)
-209-
<PAGE>
any action or fail to take (or fail to cause to be taken) any action within the
scope of its duties more specifically set forth hereunder that, under the REMIC
Provisions, if taken or not taken, as the case may be, could result in an
Adverse REMIC Event with respect to any such REMIC, unless the Tax Administrator
has received an Opinion of Counsel or an IRS private letter ruling to the effect
that the contemplated action will not result in an Adverse REMIC Event. None of
the other parties hereto shall take any action (whether or not authorized
hereunder) as to which the Tax Administrator has advised it in writing that it
has received an Opinion of Counsel or an IRS private letter ruling to the effect
that an Adverse REMIC Event could occur with respect to such action. In
addition, prior to taking any action with respect to any REMIC Pool, or causing
any REMIC Pool to take any action, that is not expressly permitted under the
terms of this Agreement, each of the other parties hereto will consult with the
Tax Administrator, in writing, with respect to whether such action could cause
an Adverse REMIC Event to occur. None of the parties hereto shall take any such
action or cause any REMIC Pool to take any such action as to which the Tax
Administrator has advised it in writing that an Adverse REMIC Event could occur.
The Tax Administrator may consult with counsel or seek an IRS private letter
ruling to make such written advice, and the cost of same shall be borne: (i) if
such action that is not expressly permitted by this Agreement would be of a
material benefit to or otherwise in the best interests of the Certificateholders
as a whole, by the Trust and shall be paid by the Trustee at the direction of
the Tax Administrator out of amounts on deposit in the Distribution Account; and
(ii) otherwise by the party seeking to take the action not permitted by this
Agreement. Without limiting the respective duties and obligations of the parties
hereto, the parties hereto may act hereunder in reliance on any IRS private
letter ruling so obtained by the Tax Administrator.
(h) In the event that any tax is imposed on any REMIC Pool,
including, without limitation, "prohibited transactions" taxes as defined in
Section 860F(a)(2) of the Code, any tax on "net income from foreclosure
property" as defined in Section 860G(c) of the Code, any taxes on contributions
to 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 (other than any tax permitted to be incurred by the Special
Servicer pursuant to Section 3.17(a)), such tax, together with all incidental
costs and expenses (including, without limitation, penalties and reasonable
attorneys' fees), shall be charged to and paid by: (i) the Tax Administrator, if
such tax arises out of or results from a breach by the Tax Administrator of any
of its obligations under this Article X; (ii) the Trustee, if such tax arises
out of or results from a breach by the Trustee of any of its obligations under
Article IV, Article VIII or this Article X; (iii) the 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; (iv) the Special Servicer, if
such tax arises out of or results from a breach by the Special Servicer of any
of its obligations under Article III or this Article X; or (v) the Trust, out of
the Trust Fund (exclusive of the Grantor Trust Pool) in all other instances. Any
tax permitted to be incurred by the Special Servicer pursuant to Section 3.17(a)
shall be charged to and paid by the Trust. If any tax is imposed on either
Grantor Trust Pool, 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 Tax Administrator, if such tax arises out of
or results from a breach by the Tax Administrator of any of its obligations
under this Article X; (ii) 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; (iii) 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; (iv) the Trustee, if such tax arises out of
or results from a breach by the Trustee of any of its obligations under Article
IV, Article VIII
-210-
<PAGE>
or this Article X; or (v) the Trust, out of the portion of the Trust Fund
constituting such Grantor Trust Pool, in all other instances. Any such amounts
payable by the Trust in respect of taxes shall be paid by the Trustee at the
direction of the Tax Administrator out of amounts on deposit in the Distribution
Account.
(i) The Tax Administrator and, to the extent that records are
maintained thereby in the normal course of its business, each of the other
parties hereto shall, for federal income tax purposes, maintain books and
records with respect to each REMIC Pool and the Grantor Trust Pool on a calendar
year and on an accrual basis.
(j) Following the Startup Day therefor, the Trustee shall not
accept any contributions of assets to any REMIC Pool unless it shall have
received an Opinion of Counsel (at the expense of the party seeking to cause
such contribution) to the effect that the inclusion of such assets in such REMIC
will not cause: (i) such REMIC to fail to qualify as a REMIC at any time that
any Certificates are outstanding; or (ii) the imposition of any tax on such
REMIC under the REMIC Provisions or other applicable provisions of federal,
state and local law or ordinances.
(k) None of the Tax Administrator, the Master Servicer, the
Special Servicer or the Trustee shall consent to or, to the extent it is within
the control of such Person, permit: (i) the sale or disposition of any of the
Mortgage Loans (except in connection with (A) a breach of any representation or
warranty of Llama or SBRC regarding the Mortgage Loans or as otherwise provided
for in Section 2.03, (B) the foreclosure, default or imminent default of a
Mortgage Loan, including but not limited to, the sale or other disposition of a
Mortgaged Property acquired by deed- in-lieu of foreclosure, (C) the bankruptcy
of any REMIC Pool, or (D) the termination of the Trust pursuant to Article IX of
this Agreement); (ii) the sale or disposition of any investments in the
Collection Account or the REO Account for gain; or (iii) the acquisition of any
assets for the Trust Fund (other than a Mortgaged Property acquired through
foreclosure, deed-in-lieu of foreclosure or otherwise in respect of a defaulted
Mortgage Loan and other than Permitted Investments acquired in connection with
the investment of funds in the Collection Account or the REO Account); in any
event unless it has received an Opinion of Counsel (from and at the expense of
the party seeking to cause such sale, disposition, or acquisition) to the effect
that such sale, disposition, or acquisition will not cause: (x) any REMIC Pool
to fail to qualify as a REMIC at any time that any Certificates are outstanding;
or (y) the imposition of any tax on any REMIC Pool under the REMIC Provisions or
other applicable provisions of federal, state and local law or ordinances.
(l) Except as otherwise permitted by Section 3.17(a), none of
the Tax Administrator, the Master Servicer, the Special Servicer or the Trustee
shall enter into any arrangement by which any REMIC Pool will receive a fee or
other compensation for services or, to the extent it is within the control of
such Person, permit any REMIC Pool to receive any income from assets other than
"qualified mortgages" as defined in Section 860G(a)(3) of the Code or "permitted
investments" as defined in Section 860G(a)(5) of the Code. At all times as may
be required by the Code, the Tax Administrator shall make reasonable efforts to
ensure that substantially all of the assets of each REMIC Pool will consist of
"qualified mortgages" as defined in Section 860G(a)(3) of the Code and
"permitted investments" as defined in Section 860G(a)(5) of the Code.
-211-
<PAGE>
(m) Within thirty (30) days after the Closing Date, the Tax
Administrator shall prepare and file with the IRS, with respect to each REMIC
Pool, if required by the Code, Form 8811 "Information Return for Real Estate
Mortgage Investment Conduits (REMICs) and Issuers of Collateralized Debt
Obligations".
(n) On or before April 15 of each calendar year, commencing
April 15, 2000, unless the Tax Administrator and the Trustee are the same
Person, the Tax Administrator shall deliver to the Trustee an Officer's
Certificate from a Responsible Officer of the Tax Administrator confirming the
Tax Administrator's compliance with its obligations under this Agreement during
the prior calendar year.
(o) The parties intend that the portion of the Trust Fund
consisting of Additional Interest on the ARD Loans and the Class Y Sub-Account
shall constitute, and that the affairs of such portion of the Trust Fund shall
be conducted so as to qualify as, a "grantor trust" under the Code, and the
provisions hereof shall be interpreted consistently with this intention. The
parties intend that the portion of the Trust Fund consisting of the REMIC I
Residual Interest and the Loan REMIC Residual Interests shall constitute, and
that the affairs of such portion of the Trust Fund shall be conducted so as to
qualify as, a "grantor trust" under the Code, and the provisions hereof shall be
interpreted consistently with this intention. The Tax Administrator shall also
perform on behalf of either Grantor Trust Pool all reporting and other tax
compliance duties that are the responsibility of either Grantor Trust under the
Code or any compliance guidance issued by the IRS or any state or local taxing
authorities. The expenses of preparing and filing such returns shall be borne by
the Tax Administrator.
SECTION 10.02. Depositor, Master Servicer, Special Servicer
and Trustee to Cooperate with Tax
Administrator.
(a) The Depositor shall provide or cause to be provided to the
Tax Administrator, within ten (10) days after the Closing Date, all information
or data that the Tax Administrator reasonably determines to be relevant for tax
purposes as to the valuations and issue prices of the Certificates, including,
without limitation, the price, yield, prepayment assumption and projected cash
flow of the Certificates.
(b) The Master Servicer, the Special Servicer and the Trustee
shall each furnish such reports, certifications and information, and access to
such books and records maintained thereby, as may relate to the Certificates or
the Trust Fund and as shall be reasonably requested by the Tax Administrator in
order to enable it to perform its duties hereunder.
SECTION 10.03. Appointment of Tax Administrators.
The Trustee may, at its own expense, appoint any Person with
appropriate tax-related experience to act as Tax Administrator hereunder;
provided that, in the absence of any other Person appointed in accordance
herewith acting as Tax Administrator, the Trustee agrees to act in such capacity
in accordance with the terms hereof. The appointment of a Tax Administrator
shall not relieve the Trustee from any of its obligations hereunder, and the
Trustee shall remain responsible for all acts and omissions of the Tax
Administrator. The Trustee shall cause any such Tax Administrator
-212-
<PAGE>
appointed by it to execute and deliver to the Trustee an instrument in which
such Tax Administrator shall agree to act in such capacity, with the obligations
and responsibilities provided for herein. The Tax Administrator shall be subject
to the same standards of care, limitations on liability and rights to indemnity
as the Trustee, and the provisions of Sections 8.01, 8.02, 8.03, 8.04 and
8.05(b) shall apply to the Tax Administrator to the same extent that they apply
to the Trustee. Any Tax Administrator appointed in accordance with this Section
10.03 may at any time resign by giving at least 30 days' advance written notice
of resignation to the Trustee, the Master Servicer, the Special Servicer and the
Depositor. The Trustee may at any time terminate the agency of any Tax
Administrator appointed in accordance with this Section 10.03 by giving written
notice of termination to such Tax Administrator, the Master Servicer, and the
Depositor.
-213-
<PAGE>
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment.
(a) This Agreement may be amended from time to time by the
mutual agreement of the parties hereto, without the consent of any of the
Certificateholders, (i) to cure any ambiguity, (ii) to correct, modify or
supplement any provision herein which may be defective or may be inconsistent
with any other provision herein, (iii) to add any other provisions with respect
to matters or questions arising hereunder which shall not be inconsistent with
the provisions hereof, (iv) to relax or eliminate any requirement hereunder
imposed by the REMIC Provisions if the REMIC Provisions are amended or clarified
such that any such requirement may be relaxed or eliminated; (v) if such
amendment, as evidenced by an Opinion of Counsel delivered to the Trustee and
the Tax Administrator, is reasonably necessary to comply with any requirements
imposed by the Code or any successor or amendatory statute or any temporary or
final regulation, revenue ruling, revenue procedure or other written official
announcement or interpretation relating to federal income tax laws or any such
proposed action which, if made effective, would apply retroactively to any REMIC
Pool or either Grantor Trust Pool at least from the effective date of such
amendment, or would be necessary to avoid the occurrence of a prohibited
transaction or to reduce the incidence of any tax that would arise from any
actions taken with respect to the operation of any REMIC Pool or either Grantor
Trust Pool; (vi) to modify, add to or eliminate any provisions of Section
5.02(d)(i), (ii) and (iii) as provided in Section 5.02(d)(iv); or (vii) for any
other purpose; provided that such amendment (other than any amendment for the
specific purposes described in clauses (v) and (vi) above) shall not, as
evidenced by an Opinion of Counsel obtained by or delivered to the Trustee,
adversely affect in any material respect the interests of any Certificateholder
without such Certificateholder's written consent; and provided further that such
amendment (other than any amendment for any of the specific purposes described
in clauses (i) through (vi) above) shall not result in a qualification,
downgrade or withdrawal of any rating then assigned to any Class of Certificates
by either Rating Agency (as evidenced by written confirmation to such effect
from each Rating Agency obtained by or delivered to the Trustee).
(b) This Agreement may also be amended from time to time by
the mutual agreement of the parties hereto, with the consent of the Holders of
Certificates entitled to at least 51% of the Voting Rights allocated to the
affected Classes, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Holders of Certificates; provided, however, that no
such amendment of this Agreement shall (i) reduce in any manner the amount of,
or delay the timing of, payments on any Certificate without the written consent
of the Holder of such Certificate, (ii) adversely affect in any material respect
the interests of the Holders of any Class of Certificates in a manner other than
as described in clause (b)(i) without the written consent of the Holders of all
Certificates of such Class, or (iii) modify the provisions of this Section 11.01
without the written consent of the Holders of all Certificates then-outstanding.
Notwithstanding any other provision of this Agreement, for purposes of the
giving or withholding of consents pursuant to this Section 11.01, Certificates
registered in the name of the Depositor, Llama, SBRC, the Master Servicer, the
Special Servicer or
-214-
<PAGE>
any of their respective Affiliates shall be entitled to the same Voting Rights
with respect to matters described above as they would if any other Person held
such Certificates.
(c) Notwithstanding any contrary provision of this Agreement,
neither the Trustee nor the Tax Administrator shall consent to any amendment to
this Agreement unless it shall first have obtained or been furnished with an
Opinion of Counsel to the effect that such amendment or the exercise of any
power granted to any party hereto in accordance with such amendment will not
result in the imposition of a tax on any REMIC Pool pursuant to the REMIC
Provisions or cause any REMIC Pool to fail to qualify as a REMIC or cause an
Adverse Grantor Trust Event at any time that any Certificates are outstanding.
(d) Promptly after the execution of any such amendment, the
Trustee shall furnish a copy of the amendment to each Certificateholder.
(e) It shall not be necessary for the consent of
Certificateholders under this Section 11.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe; provided
that such consents shall be in writing.
(f) The Trustee may but shall not be obligated to enter into
any amendment pursuant to this Section that affects its rights, duties and
immunities under this Agreement or otherwise.
(g) The cost of any Opinion of Counsel to be delivered
pursuant to Section 11.01(a) or (c) shall be borne by the Person seeking the
related amendment, except that if the Trustee requests any amendment of this
Agreement in furtherance of the rights and interests of Certificateholders, the
cost of any Opinion of Counsel required in connection therewith pursuant to
Section 11.01(a) or (c) shall be payable out of the Distribution Account.
SECTION 11.02. Recordation of Agreement; Counterparts.
(a) To the extent permitted by applicable law, this Agreement
is subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Master Servicer at the expense of the Trust, but only upon (i)
consent of the Controlling Class Representative and (ii) direction by the
Trustee accompanied by an Opinion of Counsel (the reasonable cost of which may
be paid out of the Distribution Account) to the effect that such recordation
materially and beneficially affects the interests of the Certificateholders.
(b) For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
-215-
<PAGE>
SECTION 11.03. Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
(b) No Certificateholder shall have any right to vote (except
as expressly provided for herein) or in any manner otherwise control the
operation and management of the Trust Fund, or the obligations of the parties
hereto, nor shall anything herein set forth, or contained in the terms of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third party by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement or any Mortgage
Loan, unless, with respect to any suit, action or proceeding upon or under or
with respect to this Agreement, such Holder previously shall have given to the
Trustee a written notice of default hereunder, and of the continuance thereof,
as hereinbefore provided, and (except in the case of a default by the Trustee)
the Holders of Certificates entitled to at least 25% of the Voting Rights shall
have made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for sixty
(60) days after its receipt of such notice, request and offer of indemnity,
shall have neglected or refused to institute any such action, suit or
proceeding. It is understood and intended, and expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Holders of Certificates shall have any right in any manner
whatsoever by virtue of any provision of this Agreement to affect, disturb or
prejudice the rights of the Holders of any other of such Certificates, or to
obtain or seek to obtain priority over or preference to any other such Holder,
which priority or preference is not otherwise provided for herein, or to enforce
any right under this Agreement, except in the manner herein provided and for the
equal, ratable and common benefit of all Certificateholders. For the protection
and enforcement of the provisions of this Section 11.03(c), each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
SECTION 11.04. Governing Law.
This Agreement and the Certificates shall be construed in
accordance with the internal laws of the State of New York applicable to
agreements made and to be performed in said State, and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
-216-
<PAGE>
SECTION 11.05. Notices.
Any communications provided for or permitted hereunder shall
be in writing and, unless otherwise expressly provided herein, shall be deemed
to have been duly given when delivered to: (1) in the case of the Depositor,
Salomon Brothers Mortgage Company VII, Inc., 388 Greenwich Street, New York, New
York 10013, Attention: Angela Hutzel, telecopy number: (212) 816-8306; (2) in
the case of Llama, Llama Capital Mortgage Company Limited Partnership, 505 South
Flagler Drive, West Palm Beach, Florida 33401, Attention: Jordan Paul, telecopy
number (561) 832-7404, with copies to Llama Capital Mortgage Company Limited
Partnership, 505 South Flagler Drive, West Palm Beach, Florida 33401, Attention:
General Counsel; (3) in the case of SBRC, Salomon Brothers Realty Corp., 388
Greenwich Street, New York, New York 10013, Attention: Angela Hutzel, telecopy
number (212) 816-8306; (4) in the case of the Master Servicer, GMAC Commercial
Mortgage Corporation, 650 Dresher Road, P.O. Box 1015, Horsham, Pennsylvania
19044, Attention: Managing Director Servicing, with copies to GMAC Commercial
Mortgage Corporation, 650 Dresher Road, P.O. Box 1015, Horsham, Pennsylvania
19044, Attention: General Counsel and to GMAC Commercial Mortgage Corporation,
150 South Wacker Drive, 28th Floor, Chicago, Illinois 60606 Attention: Gary
Severyn; (5) in the case of the Special Servicer, BNY Asset Solutions LLC, 6550
Rock Spring Drive, Suite 280, Bethesda, Maryland 20817, Attention: President;
with a copy to BNY Asset Solutions LLC, 600 E. Las Colinas Boulevard, Suite
1300, Irving, Texas 75039, Attention: SVP, Risk Management; (6) in the case of
the Trustee, The Chase Manhattan Bank, 450 West 33rd Street, 14th Floor, New
York, New York 10009-2697, Attention: Capital Markets Fiduciary Services (CMBS);
and (7) in the case of the Rating Agencies, (A) Moody's Investors Service, Inc.,
99 Church Street, New York, New York 10007, Attention: Commercial MBS Monitoring
Department, telecopy number: (212) 553-0300; and (B) Fitch IBCA, Inc., One State
Street Plaza, New York, New York 10004, Attention: Commercial Mortgage
Surveillance; or as to each such Person such other address as may hereafter be
furnished by such Person to the parties hereto in writing. Any communication
required or permitted to be delivered to a Certificateholder shall be deemed to
have been duly given when mailed first class, postage prepaid, to the address of
such Holder as shown in the Certificate Register.
SECTION 11.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 11.07. Successors and Assigns; Beneficiaries.
The provisions of this Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the parties
hereto, and all such provisions shall inure to the benefit of the
Certificateholders. Except as specifically contemplated by Sections 3.26, 6.03
and 8.05, no other person, including, without limitation, any Borrower, shall be
entitled to any benefit or equitable right, remedy or claim under this
Agreement.
-217-
<PAGE>
SECTION 11.08. Article and Section Headings.
The article and section headings herein are for convenience of
reference only, and shall not limit or otherwise affect the meaning hereof.
SECTION 11.09. Notices to the Rating Agencies.
(a) The Trustee shall promptly provide notice to each Rating
Agency with respect to each of the following of which a Responsible Officer of
the Trustee has actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Event of Default hereunder that
has not been cured;
(iii) the resignation or termination of the Master Servicer,
the Special Servicer or the Tax Administrator and the appointment of a
successor;
(iv) any change in the location of the Distribution Account
or the Interest Reserve Account;
(v) the final payment to any Class of Certificateholders;
and
(vi) the repurchase of any Mortgage Loan by Llama or SBRC, as
applicable, pursuant to Section 2.03.
(b) The Master Servicer shall promptly provide notice to each
Rating Agency with respect to each of the following of which it has actual
knowledge:
(i) the resignation or removal of the Trustee and the
appointment of a successor;
(ii) any change in the location of the Collection Account;
(iii) any event that would result in the voluntary or
involuntary termination of any insurance of the accounts of the
Trustee;
(iv) any material casualty at or condemnation or eminent
domain proceeding in respect of a Mortgaged Property; and
(v) the vacating by an anchor tenant of a retail Mortgaged
Property.
(c) Each of the Master Servicer and the Special Servicer, as
the case may be, shall furnish to each Rating Agency such information with
respect to the Mortgage Loans as the Rating Agency shall reasonably request and
which the Master Servicer or the Special Servicer, as the case may be, can
reasonably provide.
-218-
<PAGE>
(d) Each of the Master Servicer and the Special Servicer shall
promptly furnish to each Rating Agency copies of the following:
(i) each of its annual statements as to compliance described
in Section 3.13; and
(ii) each of its annual independent public accountants'
servicing reports described in Section 3.14, if any.
In addition, upon request, each of the Master Servicer and the Special Servicer
shall promptly furnish to each Rating Agency copies or summaries (in such format
as will be acceptable to the Rating Agency) of any of the written reports
(including, without limitation, reports regarding property inspections)
prepared, and any of the quarterly and annual operating statements, rent rolls
and financial statements collected, by it pursuant to Section 3.12(b).
(e) The Trustee shall promptly furnish to each Rating Agency
on a monthly basis copies of the statements to the Holders of the REMIC III
Regular Certificates required by the first paragraph of Section 4.02(a).
(f) To the extent reasonably possible, all information and
reports delivered or made available to the Rating Agencies by any of the
Trustee, the Master Servicer or the Special Servicer pursuant to this Section
11.09, shall be so delivered or otherwise made available through an electronic
medium.
SECTION 11.10. Notices to Controlling Class Representative.
The Trustee, the Master Servicer or the Special Servicer, as
the case may be, shall deliver to the Controlling Class Representative a copy of
each notice or other item of information such Person is required to deliver to
the Rating Agencies pursuant to Section 11.09, to the extent not previously
delivered, in each case simultaneously with the delivery thereof to the Rating
Agencies.
-219-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their names
to be signed hereto by their respective officers or representatives thereunto
duly authorized, in each case as of the day and year first above written.
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.
Depositor
By: /s/ Angela Hutzel
----------------------------------------
Name: Angela Hutzel
Title: Assistant Vice President
SALOMON BROTHERS REALTY CORP.
Mortgage Loan Seller
By: /s/ Angela Hutzel
----------------------------------------
Name: Angela Hutzel
Title: Authorized Agent
LLAMA CAPITAL MORTGAGE COMPANY
LIMITED PARTNERSHIP
Mortgage Loan Seller
By: Llama Mortgage Services Corporation
----------------------------------------
its general partner
By: /s/ Kevin J. Kelley
----------------------------------------
Name: Kevin J. Kelley
Title: Assistant Secretary
GMAC COMMERCIAL MORTGAGE CORPORATION
Master Servicer
By: /s/ Kathryn Marquardt
----------------------------------------
Name: Kathryn Marquardt
Title: Senior Vice President
<PAGE>
BNY ASSET SOLUTIONS LLC
Special Servicer
By: /s/ Louis J. Trotter Jr.
----------------------------------------
Name: Louis J. Trotter Jr.
Title: President
THE CHASE MANHATTAN BANK
Trustee
By: /s/ Nina Velastegui
----------------------------------------
Name: Nina Velastegui
Title: Assistant Vice President
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 20th day of August , 1999, before me, a notary
------ --------
public in and for said State, personally appeared Angela Hutzel , known to me
---------------
to be a Assistant Vice President of SALOMON BROTHERS MORTGAGE SECURITIES VII,
--------------------------
INC., one of the entities that executed the within instrument, and also known to
me to be the person who executed it on behalf of such entity, and acknowledged
to me that such entity executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ David E. Philley
----------------------------------------
Notary Public
[Notarial Seal]
<PAGE>
STATE OF New York )
---------- ) ss.:
COUNTY OF New York )
----------
On the 20th day of August , 1999, before me, a notary
------ --------
public in and for said State, personally appeared Angela Hutzel , known to me
---------------
to be a Authorized Signatory of SALOMON BROTHERS REALTY CORP., one of, the
---------------------
entities that executed the within instrument, and also known to me to be the
person who executed it on behalf of such entity, and acknowledged to me that
such entity executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ David E. Philley
----------------------------------------
Notary Public
[Notarial Seal]
<PAGE>
STATE OF FLORIDA )
--------- ) ss.:
COUNTY OF PALM BEACH )
------------
On the 17th day of August , 1999, before me, a notary
------ --------
public in and for said State, personally appeared Kevin J. Kelley , known to me
-----------------
to be an Assistant Secretary of LLAMA MORTGAGE SERVICES CORPORATION,
------------------------------------------------------------
the general partner of LLAMA CAPITAL MORTGAGE COMPANY LIMITED PARTNERSHIP, one
of the entities that executed the within instrument, and also known to me to be
the person who executed it on behalf of such entity, and acknowledged to me that
such entity executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Elizabeth S. Gore
----------------------------------------
Notary Public
[Notarial Seal]
<PAGE>
STATE OF PENNSYLVANIA )
-------------- ) ss.:
COUNTY OF MONTGOMERY )
------------
On the 20th day of August , 1999, before me, a notary
------ --------
public in and for said State, personally appeared Kathryn Marquardt , known to
-------------------
me to be a Senior Vice President of GMAC COMMERCIAL MORTGAGE CORPORATION,
-----------------------
one of the entities that executed the within instrument, and also known to me to
be the person who executed it on behalf of such entity, and acknowledged to me
that such entity executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Dorothy Marshall
----------------------------------------
Notary Public
[Notarial Seal]
<PAGE>
STATE OF MARYLAND )
---------- ) ss.:
COUNTY OF MONTGOMERY )
------------
On the 18th day of August , 1999, before me, a notary
------ --------
public in and for said State, personally appeared Louis J. Trotter, Jr. , known
-----------------------
to me to be a President of BNY ASSET SOLUTIONS LLC, one of the entities that
-----------
executed the within instrument, and also known to me to be the person who
executed it on behalf of such entity, and acknowledged to me that such entity
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Stacey M. Fournier
----------------------------------------
Notary Public
[Notarial Seal]
<PAGE>
STATE OF NEW YORK )
---------- ) ss.:
COUNTY OF NEW YORK )
----------
On the 20th day of August , 1999, before me, a notary
------ --------
public in and for said State, personally appeared Nina Velastequi , known to me
-----------------
to be a Assistant Vice President of THE CHASE MANHATTAN BANK, one of the
--------------------------
entities that executed the within instrument, and also known to me to be the
person who executed it on behalf of such entity, and acknowledged to me that
such entity executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Margaret M. Price
----------------------------------------
Notary Public
[Notarial Seal]
<PAGE>
SCHEDULE I
Mortgage Loan Schedule
[See Attached Schedule]
<PAGE>
<TABLE>
<CAPTION>
Loan Mortgage Seller Property Name Cut-off Date
Number Balance
<S> <C> <C> <C>
110 Salomon Brothers Realty Corp. Tempe Square Shopping Center 8,482,230.41
112 Salomon Brothers Realty Corp. DEA and U.S. Customs Office Building-Riverside 7,189,887.45
113 Salomon Brothers Realty Corp. DEA and U.S. Customs Office Building-Otay Mesa 6,380,152.60
119 Salomon Brothers Realty Corp. Lincoln View Plaza Shopping Center 5,170,454.01
121 Salomon Brothers Realty Corp. Hampton Inn - St. Augustine Beach 4,859,774.60
123 Salomon Brothers Realty Corp. D.I.Y. Home Warehouse Shopping Center 4,765,378.78
128 Salomon Brothers Realty Corp. Plainfield Shoppes 4,246,731.55
158 Salomon Brothers Realty Corp. Hampton Inn - Rome 2,349,057.70
167 Salomon Brothers Realty Corp. Pocatello Industrial Park 2,176,374.63
213 Salomon Brothers Realty Corp. Oakridge Townhomes 1,040,246.30
217 Salomon Brothers Realty Corp. Hollywood Video - Tucson 948,146.25
220 Salomon Brothers Realty Corp. 2424 State Road 809,961.91
221 Salomon Brothers Realty Corp. Hollywood Video - St. Joseph 759,725.65
228 Salomon Brothers Realty Corp. 8431-8435 Buffalo Avenue 244,438.31
246 Salomon Brothers Realty Corp. 510 Maple Avenue 289,810.58
248 Salomon Brothers Realty Corp. Hollywood Video - Fort Smith 955,556.33
249 Salomon Brothers Realty Corp. OfficeMax - Casper 2,316,574.85
261 Salomon Brothers Realty Corp. Rainbow Springs Shopping Center 10,692,481.25
263 Salomon Brothers Realty Corp. OfficeMax - Sandy 2,561,669.38
264 Salomon Brothers Realty Corp. West Palm Plaza 2,561,669.38
265 Salomon Brothers Realty Corp. OfficeMax-American Fork 2,118,303.52
267 Salomon Brothers Realty Corp. Office Max - Manitowoc 1,970,514.87
269 Salomon Brothers Realty Corp. OfficeMax - Clovis 1,812,873.70
270 Salomon Brothers Realty Corp. Nebel Office Center 1,679,291.48
272 Salomon Brothers Realty Corp. Hollywood Video - Raleigh 1,146,675.72
273 Salomon Brothers Realty Corp. Hollywood Video - Rocky Mount 1,046,933.05
274 Salomon Brothers Realty Corp. Hollywood Video - Sanford 959,688.54
276 Salomon Brothers Realty Corp. Hollywood Video - New Bern 985,627.07
288 Salomon Brothers Realty Corp. 605 & Firestone Shopping Center 5,942,859.37
296 Salomon Brothers Realty Corp. 32-34 North Main Street 183,561.34
299 Salomon Brothers Realty Corp. Ace Clearwater Industrial Facility 1,218,619.64
304 Salomon Brothers Realty Corp. 7900 Queenair Drive 988,631.76
305 Salomon Brothers Realty Corp. Hampton Park Business Center 1,136,926.52
306 Salomon Brothers Realty Corp. Village Square Shopping Center 1,484,055.46
307 Salomon Brothers Realty Corp. 4600 City Line Avenue 1,636,993.69
308 Salomon Brothers Realty Corp. OfficeMax - Clinton 2,036,705.57
309 Salomon Brothers Realty Corp. Philips Medical Systems 2,473,616.04
311 Salomon Brothers Realty Corp. Country Club Estates 1,830,051.56
312 Salomon Brothers Realty Corp. Valley View Apartments 1,167,276.20
313 Salomon Brothers Realty Corp. 325 Broadway 2,467,628.72
314 Salomon Brothers Realty Corp. Northeast Commerce Center 2,336,145.55
315 Salomon Brothers Realty Corp. The Vinings Apartments 13,181,122.36
- --------------------------------------------------------------------------------------------------------------------
316 Salomon Brothers Realty Corp. Central Plaza/Wells Avenue, LLC Portfolio 9,705,379.55
316A Central Plaza One and Two
316B Newton Center
- --------------------------------------------------------------------------------------------------------------------
317 Salomon Brothers Realty Corp. Dorsey One 3,079,990.02
318 Salomon Brothers Realty Corp. Southgate Business Center 3,775,471.62
319 Salomon Brothers Realty Corp. 20735 Superior Street 1,060,704.57
320 Salomon Brothers Realty Corp. Willows II Apartments 1,641,553.81
321 Salomon Brothers Realty Corp. North McColl Business Park 1,228,738.28
<CAPTION>
Loan Property Address City State Zip Original Mortgage Note Date
Number Code Balance Rate
<S> <C> <C> <C> <C> <C> <C> <C>
110 6426 South McClintock Drive Tempe AZ 85283 8,600,000 7.200% 01/06/98
112 4470 Olivewood Avenue Riverside CA 92501 7,725,000 7.810% 09/22/97
113 841 Neils Bohr Ct Otay Mesa CA 97175 6,855,000 7.810% 09/22/97
119 3113-3155 East Lincoln Drive Phoenix AZ 85016 5,250,000 7.407% 12/12/97
121 430 State Highway A1A St. Augustine Beach FL 32084 5,000,000 8.170% 11/07/97
123 4601 Northfield Road North Randall OH 44128 4,875,000 7.625% 12/18/97
128 2611-2649 East Main Street Plainfield IN 46902 4,350,000 7.200% 02/27/98
158 21 Chateau Drive Rome GA 30161 2,500,000 8.250% 11/21/97
167 4278-4280 Yellowstone Pocatello ID 83201 2,230,000 9.375% 05/02/97
Avenue & 1944 Hurley Avenue
213 816-819 Tracey Street, Henderson NV 89012 1,062,500 7.625% 12/24/97
306-324 Champlin Avenue,
810-818 Joyce Street, and
301-325 Gayle Avenue
217 1895 W. Valencia Road Tucson AZ 85746 980,000 7.625% 01/22/98
220 2424 State Road Bensalem PA 19020 825,000 8.970% 12/24/97
221 205 North Belt Highway St. Joseph MO 64501 796,000 7.750% 02/20/98
228 8431-8435 Buffalo Avenue Niagara Falls NY 14304 250,000 9.310% 07/24/97
246 510 Maple Avenue Elizabeth NJ 07202 293,900 8.359% 04/09/98
248 8500 Phoenix Avenue Fort Smith AR 72903 990,000 7.650% 03/28/98
249 3540 East Second Street Casper WY 82609 2,360,000 7.250% 03/31/98
261 3615-3685 South Rainbow Boulevard Las Vegas NV 89103 11,187,000 7.125% 05/20/98
263 10947 South State Street Sandy UT 84070 2,600,000 7.250% 06/16/98
264 2301-2399 W. 52nd Street Hialeah FL 33016 2,600,000 7.250% 06/23/98
265 650 South 500 East American Fork UT 84003 2,150,000 7.250% 06/16/98
267 4121 Calumet Avenue Manitowoc WI 54220 2,000,000 7.250% 06/17/98
269 900 East Manana Boulevard Clovis NM 88101 1,840,000 7.250% 06/29/98
270 11600 Nebel Street Rockville MD 20852 1,700,000 7.750% 04/30/98
272 900 Spring Forest Road Raleigh NC 27609 1,180,000 7.550% 06/15/98
273 941 North Wesleyan Boulevard Rocky Mount NC 27804 1,080,000 7.550% 05/11/98
274 2109 South Horner Blvd. Sanford NC 27330 990,000 7.550% 05/11/98
276 3500 Clarendon Boulevard New Bern NC 28562 1,013,600 7.750% 06/15/98
288 10917-10961 Firestone Boulevard Norwalk CA 90650 6,000,000 7.500% 05/08/98
296 32-34 North Main Street Spring Valley NY 10977 190,000 9.154% 06/15/98
299 19815 Magellan Drive Torrance CA 90502 1,250,000 7.250% 11/30/98
304 7900 Queenair Drive Gaithersburg MD 20879 1,000,000 7.250% 09/08/98
305 505 Hampton Park Boulevard Capital Heights MD 20743 1,150,000 7.250% 09/08/98
306 19325-71 South Dixie Highway Miami FL 33157 1,500,000 7.625% 09/10/98
307 4600 City Line Avenue Philadelphia PA 19131 1,650,000 7.375% 12/08/98
308 2510 Lincoln Way Clinton IA 52732 2,060,000 7.125% 10/16/98
309 2171 Landings Drive Mountain View CA 94043 2,500,000 7.125% 10/15/98
311 654, 675, 713 and 726 Long Drive Sheridan WY 82801 1,850,000 7.000% 10/13/98
312 315, 325, 401 East Boxelder Road Gillette WY 82718 1,180,000 7.000% 10/13/98
313 325 Broadway New York NY 10007 2,500,000 6.500% 10/01/98
314 6904 North Main Street & 100
Northeast Drive Columbia SC 29203 2,350,000 7.150% 11/03/98
315 735 Dulles Avenue Stafford TX 77477 13,250,000 7.686% 11/30/98
---------------------------------------------------------------------------------------------------------------------------
316 9,800,000 6.900% 11/05/98
316A 675 Massachussetts Avenue Cambridge MA 01239
318B 181 Wells Avenue Newton MA 02159
---------------------------------------------------------------------------------------------------------------------------
317 6835 Deerpath Road Elkridge MD 21227 3,100,000 6.750% 11/04/98
318 4500 Southgate Place Chantilly VA 22021 3,800,000 6.750% 11/04/98
319 20735 Superior Street Chatsworth CA 91311 1,070,000 7.500% 11/30/98
320 2024 Park Springs Boulevard Arlington TX 76013 1,650,000 7.750% 11/30/98
321 4901-5011 North McColl Road McAllen TX 78504 1,240,000 7.250% 11/17/98
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Loan Mortgage Seller Property Name Cut-off Date
Number Balance
<S> <C> <C> <C>
323 Salomon Brothers Realty Corp. Seneca Center 2,687,561.89
325 Salomon Brothers Realty Corp. Hunter's Ridge Apartments 7,183,305.39
326 Salomon Brothers Realty Corp. Mill Creek Apartments 5,387,479.07
327 Salomon Brothers Realty Corp. Walnut Creek I & II Apartments 9,976,813.08
328 Salomon Brothers Realty Corp. Woodbridge Crossing Apartments 4,988,406.53
329 Salomon Brothers Realty Corp. Towne Oaks Apartments 7,182,319.15
333 Salomon Brothers Realty Corp. Ashford Point Apartments 4,748,032.66
334 Salomon Brothers Realty Corp. Blockbuster Video Store 1,225,917.41
335 Salomon Brothers Realty Corp. Country View Apartments 5,884,960.29
336 Salomon Brothers Realty Corp. Lakewood Colony Apartments 3,263,787.34
337 Salomon Brothers Realty Corp. Melbourne Neurologic Medical Building 1,257,624.72
338 Salomon Brothers Realty Corp. Pebble Creek Village Apartments 3,337,090.66
339 Salomon Brothers Realty Corp. Quail Valley Apartments 3,725,015.22
340 Salomon Brothers Realty Corp. 1100 Marshall Street Office Building 2,272,359.77
341 Salomon Brothers Realty Corp. Wayforest Glen Apartments 2,374,265.87
6000171 Salomon Brothers Realty Corp. Econolodge & Efficiency Apartments 1,692,450.14
6000215 Salomon Brothers Realty Corp. Mar-Stal Apartments 2,677,387.30
6200970 Salomon Brothers Realty Corp. Centrepointe Apartments 6,639,492.41
6202004 Salomon Brothers Realty Corp. Flagship - Route 22 3,662,446.93
6202343 Salomon Brothers Realty Corp. Omni Apartments 3,374,388.72
6202516 Salomon Brothers Realty Corp. Southgate Plaza Shopping Center 1,723,704.49
6202586 Salomon Brothers Realty Corp. 1218-30 Burlingame Ave. 3,722,075.91
6202757 Salomon Brothers Realty Corp. Sales Max Inc. 1,053,003.47
6203029 Salomon Brothers Realty Corp. Olympic Tower Fee 17,352,427.60
6600028 Salomon Brothers Realty Corp. Best Western-Altamonte Springs 7,007,359.55
6600059 Salomon Brothers Realty Corp. University Villas Apartments 3,469,359.78
6600099 Salomon Brothers Realty Corp. Heritage Pointe Apartments 5,057,467.81
6600229 Salomon Brothers Realty Corp. PrimaCare 703,524.61
6600306 Salomon Brothers Realty Corp. Toledo Great Eastern Shopping Center 3,845,781.29
6600307 Salomon Brothers Realty Corp. Toledo Great Southern Shopping Center 4,928,006.60
6600344 Salomon Brothers Realty Corp. Warehouse 290 2,545,985.36
6600398 Salomon Brothers Realty Corp. Hoyts Cinemas-Martinsburg 3,911,796.98
6600426 Salomon Brothers Realty Corp. 500 Third Street 8,827,858.78
6600484 Salomon Brothers Realty Corp. Park View Plaza 1,485,328.04
6600609 Salomon Brothers Realty Corp. Hudson Plaza II 3,457,472.85
6600629 Salomon Brothers Realty Corp. Ranch One 1,012,218.41
6600648 Salomon Brothers Realty Corp. 53-83 Fourth Avenue 3,122,721.88
6600649 Salomon Brothers Realty Corp. 115 Fourth Avenue 7,187,511.16
6600703 Salomon Brothers Realty Corp. Timberline Tech Center 1,289,201.23
6600839 Salomon Brothers Realty Corp. Holmead Apartments 1,684,754.53
6600856 Salomon Brothers Realty Corp. Parker Paints (Andresen Plaza) 1,208,992.85
6600927 Salomon Brothers Realty Corp. Town Center 21,841,789.43
6600928 Salomon Brothers Realty Corp. Northpoint Apartments 1,229,138.29
6601000 Salomon Brothers Realty Corp. Millwood Plaza 816,349.05
6601011 Salomon Brothers Realty Corp. Huntington Plaza 6,546,332.72
6601013 Salomon Brothers Realty Corp. Space Savers #9 Mini-Warehouse 925,967.27
6601035 Salomon Brothers Realty Corp. 625 Polk Street 9,169,521.18
6601059 Salomon Brothers Realty Corp. Fourth Avenue Marketplace 2,229,681.57
6601106 Salomon Brothers Realty Corp. Village in Pinson, The 3,864,699.89
- ------------------------------------------------------------------------------------------------------------------
6601131 Salomon Brothers Realty Corp. Fuss & Lieberman Realty and Carl Herman Realty Portfolio 3,970,896.98
6601131A 132 Bowery & 116 Elizabeth
6601131B 145-149 Bowery
- ------------------------------------------------------------------------------------------------------------------
6601145 Salomon Brothers Realty Corp. Mainchester Sq Shopping Ctr 989,514.08
6601165 Salomon Brothers Realty Corp. Grenada Square Retail 3,669,082.27
<CAPTION>
Loan Property Address City State Zip Original Mortgage Note Date
Number Code Balance Rate
<S> <C> <C> <C> <C> <C> <C> <C>
323 18761 North Frederick Avenue Gaithersburg MD 20879 2,700,000 8.050% 02/04/99
325 11700-11710 Fuqua Street Houston TX 77034 7,200,000 7.910% 03/08/99
326 5249 U.S. Highway 277 South Abilene TX 79605 5,400,000 7.910% 03/08/99
327 5450 Rowley Road San Antonio TX 78240 10,000,000 7.910% 03/08/99
328 202 Woodbridge Boulevard Temple TX 76504 5,000,000 7.910% 03/08/99
329 6550 Lexington Drive Beaumont TX 77706 7,200,000 7.690% 04/01/99
333 3950 Ashburnham Drive Houston TX 77082 4,800,000 7.100% 06/12/98
334 3701 South Shepard Drive Houston TX 77098 1,245,000 7.500% 05/28/98
335 7015 Dorr Street Toledo OH 43615 5,940,000 6.980% 08/31/98
336 2455 Connecticut Lane Dallas TX 75214 3,300,000 7.030% 06/12/98
337 1317 Oak Street Melbourne FL 32901 1,275,000 7.125% 08/14/98
338 5710-51 Pebble Creek Court Bethel Park PA 15102 3,376,000 6.950% 04/22/98
339 1800 F.M 1092 (Murphy Road) Missouri City TX 77459 3,760,000 6.930% 07/23/98
340 1100 Marshall Street Redwood City CA 94063 2,300,000 7.260% 09/29/98
341 17601 Wayforest Drive Houston TX 77060 2,400,000 7.150% 06/12/98
6000171 1030 Arsenal Street Watertown NY 13601 1,725,000 7.810% 08/03/98
6000215 Lake Road Havelock NC 28532 2,700,000 7.060% 08/14/98
6200970 1401 E. Santo Antonio Drive Colton CA 92324 6,700,000 7.060% 07/02/98
6202004 2264 Route 22 Center Island Union NJ 07083 3,700,000 7.350% 10/15/98
6202343 2049 Triviz Drive Las Cruces NM 88001 3,400,000 7.050% 09/30/98
6202516 1010 S. Kansas Ave. Liberal KS 67901 1,750,000 7.610% 05/15/98
6202586 1218-30 Burlingame Ave . Burlingame CA 94010 3,750,000 7.100% 09/22/98
6202757 2455 East Francis Street Ontario CA 91761 1,100,000 7.510% 05/08/98
6203029 641-653 Fifth Ave. & 10 New York NY 10022 17,500,000 6.550% 09/10/98
East 52nd Street
6600028 150 Douglas Avenue Altamonte Springs FL 32714 7,200,000 7.510% 04/09/98
6600059 3100 Alafaya Trail Orlando FL 32826 3,500,000 6.380% 09/21/98
6600099 811 Issaqueena Trail Clemson SC 29630 5,100,000 6.600% 09/10/98
6600229 6340 N. Beach St. Haltom City TX 76117 735,000 7.840% 06/01/98
6600306 2520-2702 Woodville Road Northwood OH 43619 3,900,000 7.160% 07/16/98
6600307 3322-3426 Glendale Avenue Toledo OH 43619 5,000,000 6.960% 07/16/98
and 1339-1415 Byrne Rd.
6600344 12816-12828 Highway Hempstead Houston TX 77092 2,575,000 7.300% 09/18/98
6600398 950 Foxcroft Avenue Martinsburg WV 25401 3,960,000 6.860% 09/01/98
6600426 510-540 Third Street San Francisco CA 94017 9,200,000 7.230% 06/02/98
6600484 1704-1754 W. Ajo Way Tucson AZ 85713 1,500,000 7.020% 06/30/98
6600609 41 Georgia State Highway 85 Fayetteville GA 30214 3,500,000 7.470% 08/19/98
6600629 832 Eighth Ave. New York NY 10019 1,030,000 7.700% 09/11/98
6600648 53-83 Fourth Avenue Needham MA 02192 3,150,000 7.240% 07/16/98
6600649 115 - 119 Fourth Avenue Needham MA 02192 7,250,000 7.260% 07/16/98
6600703 2057 Vermont Drive Fort Collins CO 80525 1,312,500 7.040% 04/02/98
6600839 3435 Holmead Place, NW Washington DC 20010 1,700,000 7.090% 07/28/98
6600856 3000 NE Andresen Road Vancouver WA 97367 1,218,750 7.570% 07/30/98
6600927 29 South Main Street West Hartford CT 06107 22,000,000 7.250% 09/25/98
6600928 74 Lyerly Street Houston TX 77002 1,240,000 6.860% 08/31/98
6601000 800 South Battlefield Blvd. Chesapeake VA 23320 825,000 7.700% 09/24/98
6601011 263-289 Huntington Avenue Boston MA 02115 6,600,000 7.190% 08/25/98
6601013 9818 South Gessner Houston TX 77071 937,500 7.400% 08/25/98
6601035 625 Polk Street San Francisco CA 94108 9,250,000 7.220% 07/24/98
6601059 340-345 Fifth 327-379 Fourth Av. San Diego CA 92101 2,250,000 7.060% 07/09/98
6601106 6662 Alabama Highway 75 North Birmingham AL 35126 3,900,000 7.050% 07/30/98
- ------------------------------------------------------------------------------------------------------------------------------
6601131 4,000,000 7.200% 09/25/98
6601131A 132 Bowery & 116 Elizabeth New York NY 10002
6601131B 145-149 Bowery New York NY 10002
- ------------------------------------------------------------------------------------------------------------------------------
6601145 2100 North Main Street High Point NC 27262 1,000,000 7.700% 09/17/98
6601165 1218-1246 Sunset Drive Grenada MS 38901 3,700,000 7.070% 08/20/98
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Loan Mortgage Seller Property Name Cut-off Date
Number Balance
<S> <C> <C> <C>
6601175 Salomon Brothers Realty Corp. Cinema Plaza 1,288,243.91
6601178 Salomon Brothers Realty Corp. 310 South Street 1,655,076.06
6601211 Salomon Brothers Realty Corp. Orleans Square Offices 1,373,070.93
6601229 Salomon Brothers Realty Corp. 1540 Market Street 2,880,798.43
6601236 Salomon Brothers Realty Corp. 330 South Street 790,484.14
6601328 Salomon Brothers Realty Corp. Suburban Lodge-Inverness 2,504,780.25
6601344 Salomon Brothers Realty Corp. GTE Plaza Shopping Center 1,813,703.79
6601350 Salomon Brothers Realty Corp. Casa de Oro Plaza 2,173,504.05
6601357 Salomon Brothers Realty Corp. Mt. Baker Care Center 5,725,592.94
6601373 Salomon Brothers Realty Corp. Harbor Vermont Center 2,420,377.50
6601405 Salomon Brothers Realty Corp. Bolsa Medical Center 3,950,289.93
6601414 Salomon Brothers Realty Corp. Coconut Marketplace 14,373,503.97
6601448 Salomon Brothers Realty Corp. Cobblestone West Apartments 4,518,486.44
6601473 Salomon Brothers Realty Corp. Village Green Apartments 4,359,002.77
6601475 Salomon Brothers Realty Corp. Hampton Inn (Ocala FL) 7,513,133.80
6601476 Salomon Brothers Realty Corp. Americana Warner Center Apts. 7,771,955.50
6601479 Salomon Brothers Realty Corp. Orange Plaza Apartments 1,863,970.23
6601499 Salomon Brothers Realty Corp. The Links Townhomes 2,545,108.30
6601508 Salomon Brothers Realty Corp. 1033 Office Building 1,389,790.21
6601522 Salomon Brothers Realty Corp. Grovemont Square 1,388,616.03
6601543 Salomon Brothers Realty Corp. The Lakes at Gig Harbor 4,089,427.64
6601585 Salomon Brothers Realty Corp. Fox Hill Apartments-Dallas 5,150,163.83
6601594 Salomon Brothers Realty Corp. Tower Plaza - Phase II 2,478,681.38
6601618 Salomon Brothers Realty Corp. Healthcare Partners Building 1,146,219.81
6601621 Salomon Brothers Realty Corp. Madison Terrace Apts. 3,961,909.59
6601629 Salomon Brothers Realty Corp. Broad Ripple Towne Homes 3,124,309.87
6601672 Salomon Brothers Realty Corp. 77 Medford Ave. 1,460,144.36
6601844 Salomon Brothers Realty Corp. River Park 1,587,154.59
6601846 Salomon Brothers Realty Corp. Sunridge Townhomes 1,487,957.46
6601847 Salomon Brothers Realty Corp. Timbers-Memphis 3,978,775.44
6601848 Salomon Brothers Realty Corp. Rivergrove Townhomes 3,967,886.55
6601855 Salomon Brothers Realty Corp. Hollianna Garden Apartments 1,387,609.24
6601896 Salomon Brothers Realty Corp. Arlington Estates Mobile Village 6,979,928.66
6602019 Salomon Brothers Realty Corp. Fredericksburg Holiday Inn 3,766,862.25
6602105 Salomon Brothers Realty Corp. Imperial Business Park 1,795,088.59
6602316 Salomon Brothers Realty Corp. Cypress Creek Apartments 2,432,414.71
6602434 Salomon Brothers Realty Corp. 4990 Viewridge Office Building 2,444,445.80
6603042 Salomon Brothers Realty Corp. 7171-7177 East Main Street 1,297,617.02
6603061 Salomon Brothers Realty Corp. Boulders on the River 12,873,829.19
- ------------------------------------------------------------------------------------------------------------------
6603200 Salomon Brothers Realty Corp. Codisco International, Inc. Portfolio 3,091,566.39
6603200A Codisco-4308 N. Palafox Street
6603200B Codisco-6003-A Anderson Road
6603200C Codisco-7755 Ellis Road
6603200D Codisco-1183 Headland Avenue
6603200E Codisco-3040 Northeast 20th Way
6603200F Codisco-1050 Waterloo Avenue
6603200G Codisco-1100 West 17th Street
6603200H Codisco-601 Codisco Way
6603200I Codisco-1010 NE 16th Street
- ------------------------------------------------------------------------------------------------------------------
LC2080 Llama Capital Mortgage Company Raymour and Flanigan Plaza 6,944,975.11
- ------------------------------------------------------------------------------------------------------------------
LC2630 Llama Capital Mortgage Company 1144 Properties LLC Portfolio 3,345,224.25
LC2630A Executive House
LC2630B Cranberry Court Apartments
LC2630C The Atrium Apartments
- ------------------------------------------------------------------------------------------------------------------
<CAPTION>
Loan Property Address City State Zip Original Mortgage Note Date
Number Code Balance Rate
<S> <C> <C> <C> <C> <C> <C> <C>
6601175 208 Route 112 Port Jefferson Station NY 11766 1,300,000 8.000% 10/22/98
6601178 310 South Street Morristown NJ 07963 1,675,000 7.590% 08/14/98
6601211 855 Pear Orchard Road Ridgeland MS 39157 1,400,000 6.870% 09/11/98
6601229 1540 Market Street San Francisco CA 94108 3,200,000 7.010% 07/24/98
6601236 330 South Street Morristown NJ 07960 800,000 7.590% 08/14/98
6601328 5429 Highway 280 East Birmingham AL 35242 2,535,000 6.980% 09/04/98
6601344 1900-1940 North Story Road Irving TX 75062 1,850,000 7.390% 07/21/98
6601350 9714-9816 Campo Road Spring Valley CA 91977 2,200,000 7.520% 08/17/98
6601357 2901-2905 Connelly Avenue Bellingham WA 98264 5,800,000 7.160% 08/11/98
6601373 24328 and 24404 South Vermont Avenue Harbor City CA 90710 2,437,500 7.350% 09/17/98
6601405 10362 Bolsa Avenue Westminster CA 92683 4,000,000 6.740% 09/08/98
6601414 484 Kuhio Highway Kapaa, Kauai HI 96746 14,550,000 6.880% 09/11/98
6601448 4355 Cascade Road Atlanta GA 30331 4,560,000 6.200% 09/02/98
6601473 2700 Ernest St. Lake Charles LA 70601 4,400,000 6.580% 08/28/98
6601475 3434 Southwest College Road Ocala FL 34474 7,612,500 7.060% 08/31/98
6601476 6701 De Soto Avenue Canoga Park CA 91303 7,850,000 6.280% 08/28/98
6601479 1330 N.Orange Drive Los Angeles CA 90028 1,880,000 6.500% 09/03/98
6601499 NCSR 1109 on Silver Creek Golf Course Swansboro NC 28570 2,550,000 7.310% 04/30/99
6601508 1033 NE 6th Avenue Portland OR 97232 1,400,000 7.190% 09/02/98
6601522 2424-2428 N. Grand Avenue Santa Ana CA 92705 1,400,000 7.190% 08/24/98
6601543 4420 146th Street N.W. Gig Harbor WA 98332 4,125,000 6.930% 08/28/98
6601585 8783 Ferndale Road Dallas TX 75238 5,200,000 6.800% 07/27/98
6601594 3935-3955 E. Thomas Rd. Phoenix AZ 85008 2,500,000 6.980% 08/25/98
6601618 2025 East Alosta Avenue Glendora CA 91740 1,160,000 7.000% 09/28/98
6601621 900 West Monroe Avenue Las Vegas NV 89106 4,000,000 6.480% 08/27/98
6601629 5237 Crestview Avenue Indianapolis IN 46220 3,150,000 6.700% 09/17/98
6601672 77 Medford Avenue Patchogue NY 11772 1,550,000 7.180% 09/25/98
6601844 2027 28th Avenue North Nashville TN 37208 1,600,000 6.770% 09/14/98
6601846 5006 Cobalt Cove Memphis TN 38128 1,500,000 6.770% 09/14/98
6601847 4544 New Allen Road Memphis TN 38128 4,008,000 6.790% 10/05/98
6601848 4000 Rio Lobo Drive Memphis TN 38128 4,000,000 6.770% 09/14/98
6601855 712 Nicolet Avenue Winter Park FL 32789 1,400,000 6.330% 09/03/98
6601896 3785 Evanston Avenue Muskegon MI 49442 7,000,000 7.760% 04/09/99
6602019 5324 Jefferson Davis Highway Fredericksburg VA 22408 3,800,000 8.200% 10/23/98
6602105 1203-1219 W. Imperial Hwy Brea CA 92621 1,800,000 8.000% 04/19/99
6602316 4709 Cypress Creek Avenue Tuscaloosa AL 35405 2,440,000 7.520% 02/08/99
6602434 4990 Viewridge Avenue San Diego CA 92123 2,450,000 7.995% 03/02/99
6603042 7171-7177 East Main Street Scottsdale AZ 85251 1,300,000 8.150% 05/04/99
6603061 655 Goodpasture Island Rd Eugene OR 97401 12,900,000 7.100% 04/29/99
- ------------------------------------------------------------------------------------------------------------------------------
6603200 3,200,000 7.350% 08/07/98
6603200A 4308 N. Palafox Street Pensacola FL 32505
6603200B 6003-A Anderson Road Tampa FL 33634
6603200C 7755 Ellis Road West Melbourne FL 32904
6603200D 1183 Headland Avenue Dothan AL 36303
6603200E 3040 Northeast 20th Way Gainesville FL 32609
6603200F 1050 Waterloo Avenue Sarasota FL 34237
6603200G 1100 West 17th Street Riviera Beach FL 33404
6603200H 601 Codisco Way Sanford FL 32771
6603200I 1010 NE 16th Street Ocala FL 34470
- ------------------------------------------------------------------------------------------------------------------------------
LC2080 3440 Erie Boulevard East Dewitt NY 13214 7,000,000 8.050% 11/30/98
- ------------------------------------------------------------------------------------------------------------------------------
LC2630 3,425,000 7.100% 06/29/98
LC2630A
LC2630B 292 Market Street Rockland MA 02370
LC2630C 12-18 Tremont Street Kingston MA 02364
250 VFW Parkway Rockland MA 02370
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Loan Mortgage Seller Property Name Cut-off Date
Number Balance
<S> <C> <C> <C>
LC2662 Llama Capital Mortgage Company Longwood Park 1,566,573.46
LC2663 Llama Capital Mortgage Company Terraceview Apartments 1,765,694.98
LC2664 Llama Capital Mortgage Company Heatherwick House Apartments 1,174,930.04
LC2722 Llama Capital Mortgage Company Canal Park Office Complex 1,918,478.20
LC2728 Llama Capital Mortgage Company Capital Plaza Office Complex 4,545,598.32
LC2729 Llama Capital Mortgage Company Packwell Distribution Center 5,368,890.72
LC2766 Llama Capital Mortgage Company 429 Sylvan Avenue 1,959,960.41
LC2779 Llama Capital Mortgage Company Breighton Apartments 994,827.80
LC2790 Llama Capital Mortgage Company Best Plaza 2,266,842.94
LC2805 Llama Capital Mortgage Company Building 33 3,446,809.86
LC2806 Llama Capital Mortgage Company The 495 Technology Center 8,027,191.23
LC2886 Llama Capital Mortgage Company FIA Office Building 2,706,755.59
LC3013 Llama Capital Mortgage Company Palomar Savings Building 2,203,856.89
LC3028 Llama Capital Mortgage Company Summit Terrace 3,563,701.07
LC3031 Llama Capital Mortgage Company Quail Ridge 1,990,059.22
LC3032 Llama Capital Mortgage Company Eagle Ridge Apartments 4,287,411.37
LC3040 Llama Capital Mortgage Company Somerset Apartments 5,456,255.55
LC3044 Llama Capital Mortgage Company 46 Elm Street 427,590.46
LC3045 Llama Capital Mortgage Company Ashford Court 1,622,672.24
LC3046 Llama Capital Mortgage Company 72 Gardner Street 2,637,826.96
LC3047 Llama Capital Mortgage Company 50 Parkvale Avenue 793,612.81
LC3048 Llama Capital Mortgage Company 36,40,44 Quint Ave 1,921,015.45
- --------------------------------------------------------------------------------------------------------------------
LC3057 Llama Capital Mortgage Company New Boston Ballardvale Limited Partnership Portfolio1 3,425,889.46
LC3057A 204 Spring Hill Road
LC3057B 126 Monroe Turnpike
LC3057C 30 Trefoil Drive
LC3057D 55 Corporate Drive
LC3057E 35 Corporate Drive
- --------------------------------------------------------------------------------------------------------------------
LC3058 Llama Capital Mortgage Company Shadow Glen 2,966,377.06
LC3117 Llama Capital Mortgage Company Avon Properties 3,863,093.54
LC3118 Llama Capital Mortgage Company Brownsville Business Park 1,929,977.40
LC3124 Llama Capital Mortgage Company 335 Washington Street 5,232,993.06
LC3126 Llama Capital Mortgage Company The Cannon Building 992,411.88
LC3165 Llama Capital Mortgage Company CVS Center 1,703,684.56
LC3166 Llama Capital Mortgage Company Berkshire Plaza 2,278,182.87
LC3209 Llama Capital Mortgage Company Brigham Business Park 2,590,003.13
LC3215 Llama Capital Mortgage Company Kings Mill Village 1,862,662.33
LC3272 Llama Capital Mortgage Company Tactician Corporation 3,155,077.27
LC3297 Llama Capital Mortgage Company 347-351 Congress Street 6,352,452.87
LC3299 Llama Capital Mortgage Company Brownsville Trade Center 1,420,687.51
LC3320 Llama Capital Mortgage Company 53 Elm Street 702,821.02
LC3339 Llama Capital Mortgage Company Village Grove Apartments 8,516,861.55
LC3344 Llama Capital Mortgage Company The Hildreth Building 1,141,627.13
LC3359 Llama Capital Mortgage Company North Main Plaza 3,181,564.87
LC3362 Llama Capital Mortgage Company Randolph Village Apartments 4,661,825.11
LC3377 Llama Capital Mortgage Company Super Stop and Shop Plaza 10,506,735.25
LC3467 Llama Capital Mortgage Company Circuit City 1,771,212.48
LC3515 Llama Capital Mortgage Company Cross Keys Plaza 1,375,886.37
LC3517 Llama Capital Mortgage Company 5 Wheeling Avenue 1,480,617.95
LC3518 Llama Capital Mortgage Company 83 Cambridge Street 1,890,135.92
LC3538 Llama Capital Mortgage Company San Gabriel Parkway Business Center 6,630,626.09
LC3552 Llama Capital Mortgage Company 7-Eleven Convenience Store and Gas Station 1,226,099.77
LC3728 Llama Capital Mortgage Company Northgate Place 3,861,723.43
LC3755 Llama Capital Mortgage Company Sunrise Park Center 3,684,214.02
<CAPTION>
Loan Property Address City State Zip Original Mortgage Note Date
Number Code Balance Rate
<S> <C> <C> <C> <C> <C> <C> <C>
LC2662 5460 Dorr Street Toledo OH 43615 1,600,000 6.920% 03/11/98
LC2663 1947 Richards Road Toledo OH 43607 1,800,000 7.080% 04/27/98
LC2664 3070-3104 Carskaddon Drive Toledo OH 43606 1,200,000 6.920% 03/11/98
LC2722 30, 91, 121 Erie Canal Dr. Greece NY 14626 1,935,000 7.300% 07/20/98
LC2728 1000-1150 E. William Street Carson City NV 89701 4,630,000 7.370% 04/10/98
LC2729 400 Portwall Street Houston TX 77013 5,400,000 7.250% 11/04/98
LC2766 429 Sylvan Avenue Englewood Cliffs NJ 07632 2,000,000 7.200% 03/13/98
LC2779 2930 North Shartel Oklahoma City OK 73118 1,005,500 7.600% 05/06/98
LC2790 450 Lenola Rd. Maple Shade NJ 08052 2,287,500 7.060% 07/06/98
LC2805 33 Third Avenue Charlestown MA 02129 3,500,000 7.580% 06/10/98
LC2806 155 Northborough Road Southborough MA 01772 8,100,000 7.080% 07/14/98
LC2886 119 Littleton Road Parsippany NJ 07054 2,750,000 7.360% 06/05/98
LC3013 355 West Grand Avenue Escondido CA 92025 2,230,000 7.460% 04/17/98
LC3028 111 Summit Terrace Road South Portland ME 04106 3,600,000 7.260% 05/13/98
LC3031 1436 Picadilly Lane Maumee OH 43537 2,020,000 7.220% 06/04/98
LC3032 2611 Pine Trace Drive Toledo OH 43537 4,336,000 7.070% 04/29/98
LC3040 3185 Contra Loma Boulevard Antioch CA 94509 5,510,000 7.210% 07/23/98
LC3044 46 Elm Street Worcester MA 01609 435,000 6.840% 07/01/98
LC3045 1-6 Ashford Court Allston MA 02135 1,648,000 6.970% 07/17/98
LC3046 72 Gardner Street Allston MA 02134 2,679,000 6.970% 07/17/98
LC3047 50 Parkvale Avenue Allston MA 02134 806,000 6.970% 07/17/98
LC3048 36,40,44 Quint Ave Allston MA 02134 1,951,000 6.970% 07/17/98
- ------------------------------------------------------------------------------------------------------------------------------
LC3057 13,550,000 7.070% 08/21/98
LC3057A 204 Spring Hill Road Trumbull CT 06611
LC3057B 126 Monroe Turnpike Trumbull CT 06611
LC3057C 30 Trefoil Drive Trumbull CT 06611
LC3057D 55 Corporate Drive Trumbull CT 06611
LC3057E 35 Corporate Drive Trumbull CT 06611
- ------------------------------------------------------------------------------------------------------------------------------
LC3058 140 14th Street Ramona CA 92065 3,000,000 7.230% 05/14/98
LC3117 One Harrison Blvd Avon MA 02322 3,900,000 7.160% 06/11/98
LC3118 3539 East 14th Street Brownsville TX 78521 2,000,000 6.980% 08/04/98
LC3124 335 Washington Street Woburn MA 01801 5,300,000 6.640% 09/08/98
LC3126 5 Broadway Troy NY 12180 1,000,000 8.240% 11/06/98
LC3165 831 Providence Rd Upper Darby PA 19082 1,720,000 7.150% 06/26/98
LC3166 1812 State Hill Road Wyomissing Hills PA 19610 2,300,000 7.150% 06/26/98
LC3209 19 Brigham Street Marlborough MA 01752 2,700,000 7.150% 06/30/98
LC3215 401 Taunton Lake Road Evesham NJ 08053 1,875,000 7.250% 10/19/98
LC3272 305 North Main St Andover MA 01810 3,200,000 7.520% 06/10/98
LC3297 347-351 Congress Street Boston MA 02210 6,400,000 7.110% 09/17/98
LC3299 1244 Robinhood Brownsville TX 78521 1,450,000 7.280% 08/04/98
LC3320 53 Elm Street Worcester MA 01609 715,000 6.840% 07/01/98
LC3339 3505-3675 Grove Avenue Lemon Grove CA 91945 8,600,000 6.790% 08/10/98
LC3344 45 Merrimack Street Lowell MA 01852 1,150,000 7.440% 11/30/98
LC3359 510-560 North Main Street Manteca CA 95336 3,200,000 7.250% 11/04/98
LC3362 531 Randolph Rd Silver Spring MD 20904 4,700,000 7.510% 07/31/98
LC3377 206 East Washington Street North Attleboro MA 02760 10,600,000 6.840% 08/13/98
LC3467 2445 South Bristol Street Santa Ana CA 92704 1,800,000 7.520% 10/29/98
LC3515 444 Hurfville & Cross Keys Road Turnersville NJ 08080 1,383,000 7.730% 11/19/98
LC3517 5 Wheeling Ave. Woburn MA 01801 1,500,000 7.220% 12/23/98
LC3518 83 Cambridge Street Burlington MA 01803 1,900,000 7.220% 12/23/98
LC3538 3619-3735 San Gabriel River Parkway Pico Rivera CA 90660 6,650,000 7.760% 02/26/99
LC3552 2002 U.S. Highway 19 North Eustis FL 32726 1,250,000 7.750% 10/29/98
LC3728 543 NE Northgate Way & 10720 5th
Avenue NE Seattle WA 98125 3,880,000 7.940% 02/09/99
LC3755 11365-11375 Sunrise Park Center Rancho Cordova CA 95742 3,700,000 7.560% 01/28/99
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Loan Mortgage Seller Property Name Cut-off Date
Number Balance
<S> <C> <C> <C>
LC3857 Llama Capital Mortgage Company Settlers Green Outlet 14,424,218.74
LC3907 Llama Capital Mortgage Company Brandywine Industrial Center 6,478,920.53
- ------------------------------------------------------------------------------------------------------------------
LC3965 Llama Capital Mortgage Company Pocono LLC Portfolio 4,987,003.23
LC3965A Meadowbrook Mobile Home Park
LC3965B Pocono Park
- ------------------------------------------------------------------------------------------------------------------
LL1002 Llama Capital Mortgage Company 222 South First Street 1,187,836.78
- ------------------------------------------------------------------------------------------------------------------
LL1007 Llama Capital Mortgage Company South National Centers LLC Portfolio 4,052,491.00
LL1007A Bradford Centre
LL1007B Montclaire Centre
- ------------------------------------------------------------------------------------------------------------------
LL1009 Llama Capital Mortgage Company US Post Office Del City 637,882.19
LL1010 Llama Capital Mortgage Company US Post Office El Paso 970,174.24
LL1012 Llama Capital Mortgage Company Spartan Shopping Center 2,160,945.90
LL1013 Llama Capital Mortgage Company Garland Square Apartments 1,262,326.33
LL1014 Llama Capital Mortgage Company Chapel Ridge Apartments 3,130,328.25
LL1015 Llama Capital Mortgage Company Chapel Ridge Apartments - Phase II 2,342,125.56
LL1017 Llama Capital Mortgage Company Fairway at Fianna Hills 2,249,723.03
LL1018 Llama Capital Mortgage Company West End Plaza 651,510.82
LL1027 Llama Capital Mortgage Company Main Professional Building 1,081,263.50
LL1035 Llama Capital Mortgage Company Breckenridge Cove Mobile Home Park 1,045,927.12
LL1036 Llama Capital Mortgage Company U-Stuff-It Storage 965,523.21
LL1042 Llama Capital Mortgage Company Clark Holder Clinic 4,408,443.71
LL1046 Llama Capital Mortgage Company St Andrews at the Barringtons Apts 6,148,378.09
- ------------------------------------------------------------------------------------------------------------------
LL1047 Llama Capital Mortgage Company Aldine-Langfield Assoc. LLC Portfolio 1,888,896.82
LL1047A Hydrotech Systems
LL1047B POPI International, Inc.
- ------------------------------------------------------------------------------------------------------------------
LL1050 Llama Capital Mortgage Company Cambridge Apartments 685,095.97
LL1051 Llama Capital Mortgage Company Times Square Shopping Center 565,680.82
LL1056 Llama Capital Mortgage Company Premier Storage 897,630.57
<CAPTION>
Loan Property Address City State Zip Original Mortgage Note Date
Number Code Balance Rate
<S> <C> <C> <C> <C> <C> <C> <C>
LC3857 Route 16 North Conway NH 03860 14,500,000 7.190% 12/31/98
LC3907 1669 and 1675 Brandywine Avenue Chula Vista CA 91911 6,500,000 7.360% 02/08/99
- ------------------------------------------------------------------------------------------------------------------------------
LC3965 5,000,000 8.230% 04/19/99
LC3965A Route 405 Muncy PA 17756
LC3965B 740 Jumper Road Wilkes Barre PA 18702
- ------------------------------------------------------------------------------------------------------------------------------
LL1002 222 South First Street Rogers AR 72756 1,200,000 7.440% 07/01/98
- ------------------------------------------------------------------------------------------------------------------------------
LL1007 4,100,000 7.520% 04/29/98
LL1007A 3512-3550 South National Ave Springfield MO 65804
LL1007B 3010-3050 South National Ave Springfield MO 65804
- ------------------------------------------------------------------------------------------------------------------------------
LL1009 4440 SE 44th Street Oklahoma City OK 73135 645,000 7.400% 06/01/98
LL1010 10550 North Loop Road El Paso TX 79927 981,000 7.400% 06/01/98
LL1012 15000-15040 South Memorial Drive Bixby OK 74008 2,187,500 7.280% 04/30/98
LL1013 1140 West Cato Springs Road Fayetteville AR 72701 1,275,000 7.540% 06/22/98
LL1014 130 E. 45th Street Shawnee OK 74801 3,137,000 7.760% 04/26/99
LL1015 501 S. W. 15th Street Edmond OK 73013 2,360,000 7.540% 09/30/98
LL1017 2100 Brooken Hill Drive Fort Smith AR 72908 2,272,000 7.610% 06/15/98
LL1018 1494 & 1526 Plaza Place Springdale AR 72764 658,500 7.600% 06/01/98
LL1027 4915 S. Main Stafford TX 77477 1,087,500 7.540% 02/02/99
LL1035 2312 Moody Road Warner Robins GA 31088 1,050,000 8.000% 01/21/99
LL1036 2274 Moody Rd Warner Robins GA 31088 975,000 8.000% 10/30/98
LL1042 303 Smith Street LaGrange GA 30240 4,500,000 7.230% 08/28/98
LL1046 825 Gaines School Rd Athens GA 30605 6,300,000 7.500% 11/20/98
- ------------------------------------------------------------------------------------------------------------------------------
LL1047 1,900,000 7.800% 01/11/99
LL1047A 6450-6460 Langfield Road Houston TX 77092
LL1047B 16623 Aldine-Westfield Rd Houston TX 77092
- ------------------------------------------------------------------------------------------------------------------------------
LL1050 1108 18th Avenue East Cordele GA 31015 688,000 7.610% 01/19/99
ll1051 602 East 16th Avenue Cordele GA 31015 569,000 7.810% 01/19/99
ll1056 3855 W. King St Cocoa FL 32936 900,000 8.170% 04/23/99
</TABLE>
<PAGE>
SCHEDULE II
SUB-SERVICING AGREEMENTS IN EFFECT
AS OF THE CLOSING DATE
<TABLE>
<CAPTION>
Sub-Servicer Original Contract Date
- ------------ ----------------------
<S> <C>
L. J. Melody & Company August 1, 1999
Ward Cook Inc. August 1, 1999
Keycorp Real Estate Capital Markets August 1, 1999
Financial Federal Savings Bank August 1, 1999
Huntington Capital Corp. August 1, 1999
SunTrust Mortgage, Inc. August 1, 1999
</TABLE>
<PAGE>
SCHEDULE III
Schedule of Exceptions to Mortgage File Delivery
The required endorsements to Chase Manhattan Bank, as Trustee are missing from
all of the Notes
<PAGE>
EXHIBIT A-1
FORM OF CLASS X CERTIFICATE
CLASS X COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1999-C1
This is one of a series of commercial mortgage pass-through certificates
(collectively, the "Certificates"), issued in multiple classes (each, a
"Class"), which series of Certificates evidences the entire beneficial ownership
interest in a trust fund (the "Trust Fund") consisting primarily of a pool (the
"Mortgage Pool") of multifamily and commercial mortgage loans (the "Mortgage
Loans"), such pool being formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
<TABLE>
<S> <C>
Pass-Through Rate: Variable Certificate Notional Amount of this Certificate
as of the Issue Date: $______________
Date of Pooling Agreement: August 1, 1999 Class Notional Amount of all the Class X
Certificates as of the Issue Date:
Cut-off Date: August 1, 1999 $______________
Issue Date: August 20, 1999 Aggregate unpaid principal balance of the
Mortgage Pool as of the Cut-off Date, after
First Distribution Date: September 20, 1999 deducting payments of principal due on or
before such date (the "Initial Pool Balance"):
$734,852,899
Master Servicer: Trustee: The Chase Manhattan Bank
GMAC Commercial Mortgage Corporation
Special Servicer: BNY Asset Solutions LLC
Mortgage Loan Sellers:
Salomon Brothers Realty Corp. and
Llama Capital Mortgage Company
Limited Partnership
Certificate No. X-___ CUSIP No. _____________
</TABLE>
A-1-1
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR,
THE TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN SALOMON
BROTHERS MORTGAGE SECURITIES VII, INC., SALOMON BROTHERS REALTY CORP., LLAMA
CAPITAL MORTGAGE COMPANY LIMITED PARTNERSHIP, GMAC COMMERCIAL MORTGAGE
CORPORATION, BNY ASSET SOLUTIONS LLC, THE CHASE MANHATTAN BANK OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER
PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE. THE
FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE U.S.
FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS CERTIFICATE.
THE ISSUE DATE OF THIS CERTIFICATE IS AUGUST 20, 1999. ASSUMING THAT THE
MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF PREPAYMENT USED SOLELY FOR THE
PURPOSES OF APPLYING THE OID RULES TO THE CERTIFICATES EQUAL TO A "CPR" OF 0%
(EXCEPT THAT ARD LOANS (AS DEFINED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN) ARE ASSUMED TO BE REPAID IN THEIR ENTIRETY ON THEIR
RESPECTIVE ANTICIPATED REPAYMENT DATES (ALSO AS DEFINED IN SUCH POOLING AND
SERVICING AGREEMENT)) (THE FOREGOING, THE "PREPAYMENT ASSUMPTION"), THIS
CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN $________ OF OID PER $_________ OF
INITIAL CERTIFICATE NOTIONAL AMOUNT, THE YIELD TO MATURITY IS ______% PER ANNUM
AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE THAN
$_______ PER $________ OF INITIAL CERTIFICATE NOTIONAL AMOUNT, COMPUTED UNDER A
CONSTANT YIELD METHOD WITH DAILY COMPOUNDING. NO REPRESENTATION IS MADE THAT THE
MORTGAGE LOANS WILL NOT PREPAY OR THAT, IF THEY DO, THEY WILL PREPAY AT ANY
PARTICULAR RATE.
THIS CERTIFICATE DOES NOT HAVE A CERTIFICATE PRINCIPAL BALANCE AND DOES NOT
ENTITLE THE HOLDER HEREOF TO ANY DISTRIBUTIONS OF PRINCIPAL. THE HOLDER HEREOF
WILL BE ENTITLED TO DISTRIBUTIONS OF INTEREST ACCRUED AS PROVIDED IN THE POOLING
AGREEMENT REFERRED TO HEREIN ON THE CERTIFICATE NOTIONAL AMOUNT OF THIS
CERTIFICATE, WHICH AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
A-1-2
<PAGE>
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
notional principal amount of this Certificate (its "Certificate Notional
Amount") as of the Issue Date by the aggregate notional principal balance of all
the Certificates of the same Class as this Certificate (their "Class Notional
Amount") as of the Issue Date) in that certain beneficial ownership interest in
the Trust Fund evidenced by all the Certificates of the same Class as this
Certificate. The Trust Fund was created and the Certificates were issued
pursuant to a Pooling Agreement, dated as specified above (the "Agreement"),
among Salomon Brothers Mortgage Securities VII, Inc., as Depositor, and the
Mortgage Loan Sellers, Master Servicer, Special Servicer and Trustee identified
above. To the extent not defined herein, the capitalized terms used herein have
the respective meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 18th day of each month or, if such 18th day is not a Business Day,
the Business Day immediately following (each, a "Distribution Date"), commencing
on the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (the "Record
Date"), in an amount equal to the product of the Percentage Interest evidenced
by this Certificate and the amount required to be distributed pursuant to the
Agreement on the applicable Distribution Date in respect of the Class of
Certificates to which this Certificate belongs. All distributions made under the
Agreement in respect of this Certificate will be made by the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto at a bank or other entity having appropriate facilities therefor, if
such Certificateholder shall have provided the Trustee with written wiring
instructions no less than five (5) Business Days prior to the Record Date for
such distribution (which wiring instructions may be in the form of a standing
order applicable to all subsequent distributions as well), or otherwise by check
mailed to the address of such Certificateholder appearing in the Certificate
Register. Notwithstanding the above, the final distribution in respect of this
Certificate will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
offices of the Certificate Registrar appointed as provided in the Agreement or
such other location as may be specified in such notice.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
The Certificates are issuable in fully registered form only
without coupons in minimum denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, the
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
A-1-3
<PAGE>
No service charge will be imposed for any registration of
transfer or exchange of Certificates, but the Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.
For so long as this Certificate is registered in the name of
Cede & Co., or in such other name as is requested by an authorized
representative of DTC, transfers of interests in this Certificate shall be made
through the book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration
of transfer, the Depositor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Trustee, the Tax Administrator, the Certificate Registrar
and any agents of any of them may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Mortgage Loan Sellers, the Master Servicer, the Special Servicer,
the Trustee, the Tax Administrator, the Certificate Registrar or any such agent
shall be affected by notice to the contrary.
The Trust Fund and the obligations created by the Agreement
shall terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Depositor or
either Mortgage Loan Seller) at a price determined as provided in the Agreement
of all Mortgage Loans and each REO Property remaining in the Trust Fund, and
(iii) the exchange by any Sole Certificateholder of all the Certificates for all
Mortgage Loans and each REO Property remaining in the Trust Fund. The Agreement
permits, but does not require, any such Majority Certificateholder or the Master
Servicer to purchase from the Trust Fund all Mortgage Loans and each REO
Property remaining in the Trust Fund. The exercise of such right will effect
early retirement of the Certificates; however, such right to purchase is subject
to the aggregate Stated Principal Balance of the Mortgage Pool at the time of
purchase being less than 1% of the Initial Pool Balance specified on the face
hereof.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof, and the modification of the rights and
obligations of the Depositor, the Mortgage Loan Sellers, the Master Servicer,
the Special Servicer and the Trustee thereunder and the rights of the
Certificateholders thereunder, at any time by the Depositor, the Mortgage Loan
Sellers, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain circumstances, including any amendment necessary to maintain
the status of REMIC I, REMIC II, REMIC III or any Loan REMIC as a REMIC, without
the consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder and that the Trustee in its individual capacity is
not personally liable to the Holder hereof for any amounts payable on this
Certificate under the Agreement.
A-1-4
<PAGE>
This Certificate shall be construed in accordance with the
internal laws of the State of New York that are applicable to agreements
negotiated, made and to be performed in said State, and the obligations, rights
and remedies of the Holder hereof shall be determined in accordance with such
laws.
A-1-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
THE CHASE MANHATTAN BANK, not in
its individual capacity but solely as Trustee
By:
________________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class X Certificates referred to in the
within-mentioned Agreement.
Dated:
THE CHASE MANHATTAN BANK, not in
its individual capacity but solely as
Certificate Registrar
By:
________________________________________
Authorized Officer
A-1-6
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Commercial Mortgage Pass-Through Certificate and hereby authorize(s) the
registration of transfer of such interest to the above named assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and delivery of such Commercial Mortgage Pass-Through
Certificate to the following address: __________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:
_________________________________________
Signature by or on behalf of Assignor
_________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to __________________________________
________________________________________________________________________________
for the account of______________________________________________________________
Distributions made by check (such check to be made payable to
___________________) and all applicable statements and notices should be mailed
to______________________________________________________________________________
This information is provided by ________________________, the
assignee named above, or ____________________, as its agent.
A-1-7
<PAGE>
EXHIBIT A-2
FORM OF CLASS [A-1] [A-2] CERTIFICATE
CLASS [A-1] [A-2] COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1999-C1
This is one of a series of commercial mortgage pass-through certificates
(collectively, the "Certificates"), issued in multiple classes (each, a
"Class"), which series of Certificates evidences the entire beneficial ownership
interest in a trust fund (the "Trust Fund") consisting primarily of a pool (the
"Mortgage Pool") of multifamily and commercial mortgage loans (the "Mortgage
Loans"), such pool being formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
<TABLE>
<S> <C>
Pass-Through Rate: Variable Certificate Principal Balance of this Certificate
as of the Issue Date: $______________
Date of Pooling Agreement: August 1, 1999 Class Principal Balance of all the Class [A-1] [A-2]
Certificates as of the Issue Date:
Cut-off Date: August 1, 1999 $______________
Issue Date: August 20, 1999 Aggregate unpaid principal balance of the
Mortgage Pool as of the Cut-off Date, after
First Distribution Date: September 20, 1999 deducting payments of principal due on or
before such date (the "Initial Pool Balance"):
$734,852,899
Master Servicer: Trustee:
GMAC Commercial Mortgage Corporation The Chase Manhattan Bank
Special Servicer:
BNY Asset Solutions LLC
Mortgage Loan Sellers:
Salomon Brothers Realty Corp. and
Llama Capital Mortgage Company
Limited Partnership
Certificate No. [A-1] [A-2]-___ CUSIP No. _____________
</TABLE>
A-2-1
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR,
THE TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN SALOMON
BROTHERS MORTGAGE SECURITIES VII, INC., SALOMON BROTHERS REALTY CORP., LLAMA
CAPITAL MORTGAGE COMPANY LIMITED PARTNERSHIP, GMAC COMMERCIAL MORTGAGE
CORPORATION, BNY ASSET SOLUTIONS LLC, THE CHASE MANHATTAN BANK OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER
PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" (A "REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE CODE.
THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
principal balance of this Certificate (its "Certificate Principal Balance") as
of the Issue Date by the aggregate principal balance of all the Certificates of
the same Class as this Certificate (their "Class Principal Balance") as of the
Issue Date) in that certain beneficial ownership interest in the Trust Fund
evidenced by all the Certificates of the same Class as this Certificate. The
Trust Fund was created and the Certificates were issued pursuant to a Pooling
Agreement, dated as specified above (the "Agreement"), among Salomon Brothers
Mortgage Securities VII, Inc., as Depositor, and the Mortgage Loan Sellers,
Master Servicer, Special Servicer and Trustee identified above. To the extent
not defined herein, the capitalized terms used herein have the respective
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 18th day of each month or, if such 18th day is not a Business Day,
the Business Day immediately following (each, a "Distribution Date"), commencing
on the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (the "Record
Date"), in an amount equal to the product of the Percentage Interest evidenced
by this Certificate and the amount required to be distributed pursuant to the
Agreement on the applicable Distribution Date in respect of the Class of
Certificates to which this Certificate belongs. All distributions made under the
Agreement in respect of this Certificate will be made by the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto at a bank or other entity having appropriate facilities therefor, if
such Certificateholder shall have provided the Trustee with written wiring
instructions no less than five (5) Business Days prior to the Record Date for
such distribution (which wiring instructions may be in the form of a standing
order applicable to all subsequent
A-2-2
<PAGE>
distributions as well), or otherwise by check mailed to the address of such
Certificateholder appearing in the Certificate Register. Notwithstanding the
above, the final distribution in respect of this Certificate (determined without
regard to any possible future reimbursement of any Realized Loss or Additional
Trust Fund Expense previously allocated to this Certificate) will be made after
due notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the offices of the Certificate
Registrar appointed as provided in the Agreement or such other location as may
be specified in such notice. Also notwithstanding the foregoing, any
distribution that may be made with respect to this Certificate in reimbursement
of any Realized Loss or Additional Trust Fund Expense previously allocated to
this Certificate, which reimbursement is to occur after the date on which this
Certificate is surrendered as contemplated by the preceding sentence, will be
made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Principal Balance hereof is binding on such Holder
and all future Holders of this Certificate and any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such distribution is made upon this Certificate.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
The Certificates are issuable in fully registered form only
without coupons in minimum denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, the
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
No service charge will be imposed for any registration of
transfer or exchange of Certificates, but the Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.
For so long as this Certificate is registered in the name of
Cede & Co., or in such other name as is requested by an authorized
representative of DTC, transfers of interests in this Certificate shall be made
through the book-entry facilities of DTC.
A-2-3
<PAGE>
Prior to due presentment of this Certificate for registration
of transfer, the Depositor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Trustee, the Tax Administrator, the Certificate Registrar
and any agents of any of them may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Mortgage Loan Sellers, the Master Servicer, the Special Servicer,
the Trustee, the Tax Administrator, the Certificate Registrar or any such agent
shall be affected by notice to the contrary.
The Trust Fund and the obligations created by the Agreement
shall terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Depositor or either
Mortgage Loan Seller) at a price determined as provided in the Agreement of all
Mortgage Loans and each REO Property remaining in the Trust Fund and (iii) the
exchange by any Sole Certificateholder of all the Certificates for all Mortgage
Loans and each REO Property remaining in the Trust Fund. The Agreement permits,
but does not require, any such Majority Certificateholder or the Master Servicer
to purchase from the Trust Fund all Mortgage Loans and each REO Property
remaining in the Trust Fund. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Pool at the time of
purchase being less than 1% of the Initial Pool Balance specified on the face
hereof.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof, and the modification of the rights and
obligations of the Depositor, the Mortgage Loan Sellers, the Master Servicer,
the Special Servicer and the Trustee thereunder and the rights of the
Certificateholders thereunder, at any time by the Depositor, the Mortgage Loan
Sellers, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain circumstances, including any amendment necessary to maintain
the status of REMIC I, REMIC II, REMIC III or any Loan REMIC as a REMIC, without
the consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder and that the Trustee in its individual capacity is
not personally liable to the Holder hereof for any amounts payable on this
Certificate under the Agreement.
This Certificate shall be construed in accordance with the
internal laws of the State of New York that are applicable to agreements
negotiated, made and to be performed in said State, and the obligations, rights
and remedies of the Holder hereof shall be determined in accordance with such
laws.
A-2-4
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
THE CHASE MANHATTAN BANK, not in
its individual capacity but solely as Trustee
By: __________________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class [A-1] [A-2] Certificates referred to
in the within-mentioned Agreement.
Dated:
THE CHASE MANHATTAN BANK, not in
its individual capacity but solely as
Certificate Registrar
By: __________________________________________
Authorized Officer
A-2-5
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Commercial Mortgage Pass-Through Certificate and hereby authorize(s) the
registration of transfer of such interest to the above named assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and delivery of such Commercial Mortgage Pass-Through
Certificate to the following address:___________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:
_________________________________________
Signature by or on behalf of Assignor
_________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to___________________________________
________________________________________________________________________________
for the account of_____________________________________________________________.
Distributions made by check (such check to be made payable to
____________________) and all applicable statements and notices should be mailed
to ____________________________________________________________________________.
This information is provided by ________________________, the
assignee named above, or ____________________, as its agent.
A-2-6
<PAGE>
EXHIBIT A-3
FORM OF CLASS [B] [C] [D] [E] [F] CERTIFICATE
CLASS [B] [C] [D][E] [F] COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1999-C1
This is one of a series of commercial mortgage pass-through certificates
(collectively, the "Certificates"), issued in multiple classes (each, a
"Class"), which series of Certificates evidences the entire beneficial ownership
interest in a trust fund (the "Trust Fund") consisting primarily of a pool (the
"Mortgage Pool") of multifamily and commercial mortgage loans (the "Mortgage
Loans"), such pool being formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
<TABLE>
<S> <C>
Pass-Through Rate: Variable Certificate Principal Balance of this Certificate
as of the Issue Date: $______________
Date of Pooling Agreement: August 1, 1999 Class Principal Balance of all the Class [B] [C]
[D] [E] [F] Certificates as of the Issue Date:
Cut-off Date: August 1, 1999 $______________
Issue Date: August 20, 1999 Aggregate unpaid principal balance of the
Mortgage Pool as of the Cut-off Date, after
deducting payments of principal due on or
before such date (the "Initial Pool Balance"):
$734,852,899
First Distribution Date: September 20, 1999
Master Servicer: Trustee:
GMAC Commercial Mortgage Corporation The Chase Manhattan Bank
Special Servicer:
BNY Asset Solutions LLC
Mortgage Loan Sellers:
Salomon Brothers Realty Corp. and
Llama Capital Mortgage Company
Limited Partnership
Certificate No. [B] [C] [D] [E] [F] CUSIP No. _____________
</TABLE>
A-3-1
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR,
THE TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN SALOMON
BROTHERS MORTGAGE SECURITIES VII, INC., SALOMON BROTHERS REALTY CORP., LLAMA
CAPITAL MORTGAGE COMPANY LIMITED PARTNERSHIP, GMAC COMMERCIAL MORTGAGE
CORPORATION, BNY ASSET SOLUTIONS LLC, THE CHASE MANHATTAN BANK OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER
PERSON.
THE CLASS OF CERTIFICATES TO WHICH THIS CERTIFICATE BELONGS IS SUBORDINATE TO
ONE OR MORE CLASSES OF CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT
PROVIDED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
ANY INVESTMENT IN THIS CERTIFICATE BY AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986 (THE "CODE"),
OR BY ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS CERTIFICATE OR
ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH
ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, MAY
GIVE RISE TO A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA AND BE SUBJECT
TO AN EXCISE TAX UNDER SECTION 4975 OF THE CODE UNLESS A STATUTORY OR
ADMINISTRATIVE EXEMPTION IS AVAILABLE. ACCORDINGLY, ANY TRANSFEREE OF THIS
CERTIFICATE OR ANY INTEREST HEREIN WILL BE DEEMED TO HAVE MADE CERTAIN
REPRESENTATIONS AND WARRANTIES DESCRIBED HEREIN IN THIS REGARD.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" (A "REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE CODE. [THE FOLLOWING INFORMATION IS PROVIDED
SOLELY FOR THE PURPOSES OF APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE
DISCOUNT ("OID") RULES TO THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE
IS AUGUST 20, 1999. ASSUMING THAT THE MORTGAGE LOANS PREPAY AT AN ASSUMED RATE
OF PREPAYMENT USED SOLELY FOR THE PURPOSES OF APPLYING THE OID RULES TO THE
CERTIFICATES EQUAL TO A "CPR" OF 0% (EXCEPT THAT ARD LOANS (AS DEFINED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN) ARE ASSUMED TO BE REPAID IN
THEIR ENTIRETY ON THEIR RESPECTIVE ANTICIPATED REPAYMENT DATES (ALSO AS DEFINED
IN SUCH POOLING AND SERVICING AGREEMENT)) (THE "PREPAYMENT ASSUMPTION"), THIS
CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN $__________ OF OID PER $__________
OF
A-3-2
<PAGE>
INITIAL CERTIFICATE PRINCIPAL BALANCE, THE YIELD TO MATURITY IS ____% PER ANNUM
AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE THAN
$_____ PER $_______ OF INITIAL CERTIFICATE PRINCIPAL BALANCE, COMPUTED UNDER A
CONSTANT YIELD METHOD WITH DAILY COMPOUNDING. NO REPRESENTATION IS MADE THAT THE
MORTGAGE LOANS WILL NOT PREPAY OR THAT, IF THEY DO, THEY WILL PREPAY AT ANY
PARTICULAR RATE.]
THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
principal balance of this Certificate (its "Certificate Principal Balance") as
of the Issue Date by the aggregate principal balance of all the Certificates of
the same Class as this Certificate (their "Class Principal Balance") as of the
Issue Date) in that certain beneficial ownership interest in the Trust Fund
evidenced by all the Certificates of the same Class as this Certificate. The
Trust Fund was created and the Certificates were issued pursuant to a Pooling
Agreement, dated as specified above (the "Agreement"), among Salomon Brothers
Mortgage Securities VII, Inc., as Depositor, and the Mortgage Loan Sellers,
Master Servicer, Special Servicer and Trustee identified above. To the extent
not defined herein, the capitalized terms used herein have the respective
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 18th day of each month or, if such 18th day is not a Business Day,
the Business Day immediately following (each, a "Distribution Date"), commencing
on the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (the "Record
Date"), in an amount equal to the product of the Percentage Interest evidenced
by this Certificate and the amount required to be distributed pursuant to the
Agreement on the applicable Distribution Date in respect of the Class of
Certificates to which this Certificate belongs. All distributions made under the
Agreement in respect of this Certificate will be made by the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto at a bank or other entity having appropriate facilities therefor, if
such Certificateholder shall have provided the Trustee with written wiring
instructions no less than five (5) Business Days prior to the Record Date for
such distribution (which wiring instructions may be in the form of a standing
order applicable to all subsequent distributions as well), or otherwise by check
mailed to the address of such Certificateholder appearing in the Certificate
Register. Notwithstanding the above, the final distribution in respect of this
Certificate (determined without regard to any possible future reimbursement of
any Realized Loss or Additional Trust Fund Expense previously allocated to this
Certificate) will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the offices of the Certificate Registrar appointed as provided in the
Agreement or such other location as may be specified in such notice. Also
notwithstanding the foregoing, any distribution that may be made with respect to
this Certificate in reimbursement of any Realized Loss or Additional Trust Fund
Expense previously allocated to this Certificate, which reimbursement is to
occur after the date on which this Certificate is surrendered as contemplated by
the preceding sentence, will be made by check mailed to the address of the
Holder that surrenders this Certificate as such address last appeared in the
Certificate Register or to any such other address of which the Trustee is
subsequently notified in writing.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Principal Balance hereof is binding on such Holder
and all future Holders of this Certificate and any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such distribution is made upon this Certificate.
A-3-3
<PAGE>
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
The Certificates are issuable in fully registered form only
without coupons in minimum denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, the
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
Each Person who acquires this Certificate or any interest
herein shall be deemed to have certified that it is neither a Plan nor any
Person who is directly or indirectly purchasing this Certificate or such
interest herein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, or alternatively, that the purchase, continued holding and
transfer of this Certificate or such interest herein is exempt from the
prohibited transaction provisions of Section 406 of ERISA and Section 4975 of
the Code under Sections I and III of Prohibited Transaction Class Exemption
95-60.
No service charge will be imposed for any registration of
transfer or exchange of Certificates, but the Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.
For so long as this Certificate is registered in the name of
Cede & Co., or in such other name as is requested by an authorized
representative of DTC, transfers of interests in this Certificate shall be made
through the book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration
of transfer, the Depositor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Trustee, the Tax Administrator, the Certificate Registrar
and any agents of any of them may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Mortgage Loan Sellers, the Master Servicer, the Special Servicer,
the Trustee, the Tax Administrator, the Certificate Registrar or any such agent
shall be affected by notice to the contrary.
The Trust Fund and the obligations created by the Agreement
shall terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Depositor or either
Mortgage Loan Seller) at a price determined as provided in the Agreement of all
Mortgage Loans and each REO Property remaining in the
A-3-4
<PAGE>
Trust Fund, and (iii) the exchange by any Sole Certificateholder of all the
Certificates for all Mortgage Loans and each REO Property remaining in the Trust
Fund. The Agreement permits, but does not require, any such Majority
Certificateholder or the Master Servicer to purchase from the Trust Fund all
Mortgage Loans and each REO Property remaining in the Trust Fund. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Pool at the time of purchase being less than 1% of the Initial Pool
Balance specified on the face hereof.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof, and the modification of the rights and
obligations of the Depositor, the Mortgage Loan Sellers, the Master Servicer,
the Special Servicer and the Trustee thereunder and the rights of the
Certificateholders thereunder, at any time by the Depositor, the Mortgage Loan
Sellers, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain circumstances, including any amendment necessary to maintain
the status of REMIC I, REMIC II, REMIC III or any Loan REMIC as a REMIC, without
the consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder and that the Trustee in its individual capacity is
not personally liable to the Holder hereof for any amounts payable om this
Certificate under the Agreement.
This Certificate shall be construed in accordance with the
internal laws of the State of New York that are applicable to agreements
negotiated, made and to be performed in said State, and the obligations, rights
and remedies of the Holder hereof shall be determined in accordance with such
laws.
A-3-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
THE CHASE MANHATTAN BANK, not in
its individual capacity but solely as
Trustee
By:
_____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class [B] [C] [D] [E] [F] Certificates
referred to in the within-mentioned Agreement.
Dated:
THE CHASE MANHATTAN BANK, not in
its individual capacity but solely as
Certificate Registrar
By:
_____________________________________
Authorized Officer
A-3-6
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Commercial Mortgage Pass-Through Certificate and hereby authorize(s) the
registration of transfer of such interest to the above named assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and delivery of such Commercial Mortgage Pass-Through
Certificate to the following address: __________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:
_________________________________________
Signature by or on behalf of Assignor
_________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to __________________________________
________________________________________________________________________________
for the account of ____________________________________________________________.
Distributions made by check (such check to be made payable to
___________________________________) and all applicable statements and notices
should be mailed to ___________________________________________________________.
This information is provided by ________________________, the
assignee named above, or ____________________, as its agent.
A-3-7
<PAGE>
EXHIBIT A-4
FORM OF CLASS [G] [H] [J] [K] [L] [M] CERTIFICATE
CLASS [G] [H] [J] [K] [L] [M] COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1999-C1
This is one of a series of commercial mortgage pass-through certificates
(collectively, the "Certificates"), issued in multiple classes (each, a
"Class"), which series of Certificates evidences the entire beneficial ownership
interest in a trust fund (the "Trust Fund") consisting primarily of a pool (the
"Mortgage Pool") of multifamily and commercial mortgage loans (the "Mortgage
Loans"), such pool being formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
<TABLE>
<S> <C>
Pass-Through Rate: Variable Certificate Principal Balance of this Certificate
as of the Issue Date: $______________
Date of Pooling Agreement: August 1, 1999 Class Principal Balance of all the Class [G] [H]
[J] [K] [L] [M] Certificates as of the Issue Date:
Cut-off Date: August 1, 1999 $______________
Issue Date: August 20, 1999 Aggregate unpaid principal balance of the
Mortgage Pool as of the Cut-off Date, after
First Distribution Date: September 20, 1999 deducting payments of principal due on or
before such date (the "Initial Pool Balance"):
$734,852,899
Master Servicer: Trustee:
GMAC Commercial Mortgage Corporation The Chase Manhattan Bank
Special Servicer:
BNY Asset Solutions LLC
Mortgage Loan Sellers:
Salomon Brothers Realty Corp. and
Llama Capital Mortgage Company
Limited Partnership
Certificate No. [G] [H] [J] [K] [L] [M]-___ CUSIP No. _____________
</TABLE>
A-4-1
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN SALOMON
BROTHERS MORTGAGE SECURITIES VII, INC., SALOMON BROTHERS REALTY CORP., LLAMA
CAPITAL MORTGAGE COMPANY LIMITED PARTNERSHIP, GMAC COMMERCIAL MORTGAGE
CORPORATION, BNY ASSET SOLUTIONS LLC, THE CHASE MANHATTAN BANK OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER
PERSON.
THE CLASS OF CERTIFICATES TO WHICH THIS CERTIFICATE BELONGS, IS SUBORDINATE TO
ONE OR MORE CLASSES OF CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT
PROVIDED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE.
ANY RESALE, PLEDGE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT
SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES
NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.02 OF THE POOLING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO (A) AN
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE"), OR (B) ANY PERSON WHO IS DIRECTLY OR
INDIRECTLY PURCHASING THIS CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS
NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT, EXCEPT IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THE TRUST FUND IN WHICH THIS CERTIFICATE EVIDENCES AN INTEREST HAS NOT BEEN
REGISTERED AS AN "INVESTMENT COMPANY" UNDER THE INVESTMENT COMPANY ACT OF 1940,
AS AMENDED (THE "INVESTMENT COMPANY ACT"). ACCORDINGLY, THIS CERTIFICATE MAY NOT
BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT TO (1) A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT (A
"QUALIFIED INSTITUTIONAL BUYER") OR (2) AN ACCREDITED INVESTOR WITHIN THE
MEANING OF PARAGRAPH (1), (2), (3) OR (7) OF RULE 501(A) OF REGULATION D UNDER
THE SECURITIES ACT OR AN ENTITY IN WHICH ALL THE EQUITY OWNERS CONSTITUTE
ENTITIES DESCRIBED IN SUCH PARAGRAPHS (AN "INSTITUTIONAL ACCREDITED INVESTOR").
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE. [THE
FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE U.S.
FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS CERTIFICATE.
THE ISSUE DATE OF THIS CERTIFICATE IS AUGUST 20, 1999. ASSUMING THAT THE
MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF PREPAYMENT USED SOLELY FOR THE
PURPOSES OF APPLYING THE OID RULES TO THE CERTIFICATES EQUAL TO A "CPR" OF 0%
(EXCEPT THAT ARD LOANS (AS DEFINED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN)
A-4-2
<PAGE>
ARE ASSUMED TO BE REPAID IN THEIR ENTIRETY ON THEIR RESPECTIVE ANTICIPATED
REPAYMENT DATES (ALSO AS DEFINED IN SUCH POOLING AND SERVICING AGREEMENT)) (THE
"PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN
$__________ OF OID PER $__________ OF INITIAL CERTIFICATE PRINCIPAL BALANCE, THE
YIELD TO MATURITY IS ____% PER ANNUM AND THE AMOUNT OF OID ATTRIBUTABLE TO THE
INITIAL ACCRUAL PERIOD IS NO MORE THAN $_____ PER $_______ OF INITIAL
CERTIFICATE PRINCIPAL BALANCE, COMPUTED UNDER A CONSTANT YIELD METHOD WITH DAILY
COMPOUNDING. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL NOT PREPAY
OR THAT, IF THEY DO, THEY WILL PREPAY AT ANY PARTICULAR RATE.]
THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
This certifies that _____________________________ is the
registered owner of the Percentage Interest evidenced by this Certificate
(obtained by dividing the principal balance of this Certificate (its
"Certificate Principal Balance") as of the Issue Date by the aggregate principal
balance of all the Certificates of the same Class as this Certificate (their
"Class Principal Balance") as of the Issue Date) in that certain beneficial
ownership interest in the Trust Fund evidenced by all the Certificates of the
same Class as this Certificate. The Trust Fund was created and the Certificates
were issued pursuant to a Pooling Agreement, dated as specified above (the
"Agreement"), among Salomon Brothers Mortgage Securities VII, Inc., as
Depositor, and the Mortgage Loan Sellers, Master Servicer, Special Servicer and
Trustee identified above. To the extent not defined herein, the capitalized
terms used herein have the respective meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 18th day of each month or, if such 18th day is not a Business Day,
the Business Day immediately following (each, a "Distribution Date"), commencing
on the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (the "Record
Date"), in an amount equal to the product of the Percentage Interest evidenced
by this Certificate and the amount required to be distributed pursuant to the
Agreement on the applicable Distribution Date in respect of the Class of
Certificates to which this Certificate belongs. All distributions made under the
Agreement in respect of this Certificate will be made by the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto at a bank or other entity having appropriate facilities therefor, if
such Certificateholder shall have provided the Trustee with written wiring
instructions no less than five (5) Business Days prior to the Record Date for
such distribution (which wiring instructions may be in the form of a standing
order applicable to all subsequent distributions as well), or otherwise by check
mailed to the address of such Certificateholder appearing in the Certificate
Register. Notwithstanding the above, the final distribution in respect of this
Certificate (determined without regard to any possible future reimbursement of
any Realized Loss or Additional Trust Fund Expense previously allocated to this
Certificate) will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the offices of the Certificate Registrar appointed as provided in the
Agreement or such other location as may be specified in such notice. Also
notwithstanding the foregoing, any distribution that may be made with respect to
this Certificate in reimbursement of any Realized Loss or Additional Trust Fund
Expense previously allocated to this Certificate, which reimbursement is to
occur after the date on which this Certificate is surrendered as contemplated by
the preceding sentence, will be made by check mailed to the address of the
Holder that surrenders this Certificate as such address last appeared in the
Certificate Register or to any such other address of which the Trustee is
subsequently notified in writing.
A-4-3
<PAGE>
Any distribution to the Holder of this Certificate in
reduction of the Certificate Principal Balance hereof is binding on such Holder
and all future Holders of this Certificate and any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such distribution is made upon this Certificate.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
The Certificates are issuable in fully registered form only
without coupons in minimum denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, the
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
No transfer of this Certificate or any interest herein shall
be made unless that transfer is made pursuant to an effective registration
statement under the Securities Act, and effective registration or qualification
under applicable state securities laws, or is made in a transaction which does
not require such registration or qualification. In the event a transfer of this
Certificate (other than in connection with the initial issuance of the
Certificates or a transfer of this Certificate by the Depositor) is to be made
without registration under the Securities Act, then the Certificate Registrar
shall refuse to register such transfer until it receives the following: (i) a
certificate from the Certificateholder desiring to effect such transfer
substantially in the form attached as Exhibit B-1 to the Agreement and a
certificate from such Certificateholder's prospective transferee substantially
in the form attached as Exhibit B-2 or Exhibit B-3 to the Agreement; or (ii) an
opinion of counsel satisfactory to the Certificate Registrar to the effect that
such transfer may be made without registration under the Securities Act (which
opinion of counsel shall not be an expense of the Trust Fund or of the
Depositor, the Mortgage Loan Sellers, the Master Servicer, the Special Servicer,
the Trustee, the Tax Administrator or the Certificate Registrar in their
respective capacities as such), together with the written certification(s) as to
the facts surrounding such transfer from the Certificateholder desiring to
effect such transfer and/or such Certificateholder's prospective transferee on
which such opinion of counsel is based. None of the Depositor, the Trustee or
the Certificate Registrar is obligated to register or qualify the Class of
Certificates to which this Certificate belongs, under the Securities Act or any
other securities law or to take any action not otherwise required under the
Agreement to permit the transfer of this Certificate or any interest herein
without registration or qualification. Any Holder of this Certificate desiring
to effect such a transfer shall be required to indemnify the Depositor, the
Trustee, the Tax Administrator, the Master Servicer, the Special Servicer and
the Certificate Registrar against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.
A-4-4
<PAGE>
No transfer of this Certificate or any interest herein shall
be made under any circumstances (i) to any employee benefit plan or other
retirement arrangement, including individual retirement accounts and annuities,
Keogh plans and collective investment funds and separate accounts in which such
plans, accounts or arrangements are invested, that is subject to ERISA or the
Code (each, a "Plan") or (ii) to any Person who is directly or indirectly
purchasing this Certificate or such interest herein on behalf of, as named
fiduciary of, as trustee of, or with "plan assets" within the meaning of the
Department of Labor regulation promulgated at 29 C.F.R. 'SS'2510.3-101, unless:
(x) if this Certificate or any interest herein is being acquired with "plan
assets", the prospective Transferee provides the Certificate Registrar with a
certification to the effect that the purchase, continued holding and transfer of
this Certificate or such interest herein is exempt from the prohibited
transaction provisions of Section 406 of ERISA and Section 4975 of the Code
under Sections I and III of Prohibited Transaction Class Exemption ("PTCE")
95-60; or (y) the prospective transferee provides the Certificate Registrar with
a certification of facts and an opinion of counsel, obtained at the expense of
such prospective transferee, which establish to the satisfaction of the
Certificate Registrar that such transfer will not result in a violation of
Section 406 of ERISA or Section 4975 of the Code, will not result in the
imposition of an excise tax under Section 4975 of the Code and will not subject
the Trustee, the Master Servicer or the Special Servicer to any obligation in
addition to those undertaken in the Agreement. It is hereby acknowledged that
the form of certification attached to the Agreement as Exhibit D is acceptable
for the purposes of the preceding sentence. Each Person who acquires this
Certificate or any interest herein without delivery of the certification of
facts and/or opinion of counsel referred to in the preceding two sentences shall
be deemed to have certified that it is neither a Plan nor any Person who is
directly or indirectly purchasing this Certificate or such interest herein on
behalf of, as named fiduciary of, as trustee of, or with assets of a Plan.
No service charge will be imposed for any registration of
transfer or exchange of Certificates, but the Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.
Prior to due presentment of this Certificate for registration
of transfer, the Depositor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Trustee, the Tax Administrator, the Certificate Registrar
and any agents of any of them may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Mortgage Loan Sellers, the Master Servicer, the Special Servicer,
the Trustee, the Tax Administrator, the Certificate Registrar or any such agent
shall be affected by notice to the contrary.
The Trust Fund and the obligations created by the Agreement
shall terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Depositor or either
Mortgage Loan Seller) at a price determined as provided in the Agreement of all
Mortgage Loans and each REO Property remaining in the Trust Fund, and (iii) the
exchange by any sole Certificateholder of all the Certificates for all Mortgage
Loans and each REO Property remaining in the Trust Fund. The Agreement permits,
but does not require, any such Majority Certificateholder or the Master Servicer
to purchase from the Trust Fund all Mortgage Loans and each REO Property
remaining in the Trust Fund. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Pool at the time of
purchase being less than 1% of the Initial Pool Balance specified on the face
hereof.
A-4-5
<PAGE>
The Agreement permits, with certain exceptions therein
provided, the amendment thereof, and the modification of the rights and
obligations of the Depositor, the Mortgage Loan Sellers, the Master Servicer,
the Special Servicer and the Trustee thereunder and the rights of the
Certificateholders thereunder, at any time by the Depositor, the Mortgage Loan
Sellers, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain circumstances, including any amendment necessary to maintain
the status of REMIC I, REMIC II REMIC III or any Loan REMIC as a REMIC, without
the consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder and that the Trustee in its individual capacity is
not personally liable to the Holder hereof for any amounts payable on this
Certificate under the Agreement.
This Certificate shall be construed in accordance with the
internal laws of the State of New York that are applicable to agreements
negotiated, made and to be performed in said State, and the obligations, rights
and remedies of the Holder hereof shall be determined in accordance with such
laws.
A-4-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
THE CHASE MANHATTAN BANK, not in
its individual capacity but solely as Trustee
By: _________________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class [G] [H] [J] [K] [L] [M] Certificates
referred to in the within-mentioned Agreement.
Dated:
THE CHASE MANHATTAN BANK, not in
its individual capacity but solely as
Certificate Registrar
By: _________________________________________
Authorized Officer
A-4-7
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee) the beneficial ownership interest in the Trust Fund evidenced by the
within Commercial Mortgage Pass-Through Certificate and hereby authorize(s) the
registration of transfer of such interest to the above named assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and delivery of such Commercial Mortgage Pass-Through
Certificate to the following address: __________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:
-----------------------------------------------
Signature by or on behalf of Assignor
-----------------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to __________________________________
________________________________________________________________________________
for the account of ____________________________________________________________.
Distributions made by check (such check to be made payable to
________________________________________) and all applicable statements and
notices should be mailed to ___________________________________________________.
This information is provided by ________________________, the
assignee named above, or ____________________, as its agent.
A-4-8
<PAGE>
EXHIBIT A-5
FORM OF CLASS Y CERTIFICATE
CLASS Y COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1999-C1
This is one of a series of commercial mortgage pass-through certificates
(collectively, the "Certificates"), issued in multiple classes (each, a
"Class"), which series of Certificates evidences the entire beneficial ownership
interest in a trust fund (the "Trust Fund") consisting primarily of a pool (the
"Mortgage Pool") of multifamily and commercial mortgage loans (the "Mortgage
Loans"), such pool being formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
<TABLE>
<S> <C>
Date of Pooling Agreement: August 1, 1999 Percentage Interest evidenced by this Certificate
in the related Class: ____%
Aggregate unpaid principal balance of the
Cut-off Date: August 1, 1999 Mortgage Pool as of the Cut-off Date, after
deducting payments of principal due on or
Issue Date: August 20, 1999 before such date (the "Initial Pool Balance"):
$734,852,899
Master Servicer: Trustee:
GMAC Commercial Mortgage Corporation The Chase Manhattan Bank
Special Servicer:
BNY Asset Solutions LLC
Mortgage Loan Sellers:
Salomon Brothers Realty Corp. and
Llama Capital Mortgage Company
Limited Partnership
Certificate No. Y-____ CUSIP No. _____________
</TABLE>
A-5-1
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN SALOMON
BROTHERS MORTGAGE SECURITIES VII, INC., SALOMON BROTHERS REALTY CORP., LLAMA
CAPITAL MORTGAGE COMPANY LIMITED PARTNERSHIP, GMAC COMMERCIAL MORTGAGE
CORPORATION, BNY ASSET SOLUTIONS LLC, THE CHASE MANHATTAN BANK OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER
PERSON.
THE CLASS OF CERTIFICATES TO WHICH THIS CERTIFICATE BELONGS, IS SUBORDINATE TO
ONE OR MORE CLASSES OF CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT
PROVIDED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE.
ANY RESALE, PLEDGE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT
SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES
NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.02 OF THE POOLING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO (A) AN
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE"), OR (B) ANY PERSON WHO IS DIRECTLY OR
INDIRECTLY PURCHASING THIS CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS
NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT, EXCEPT IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THE TRUST FUND IN WHICH THIS CERTIFICATE EVIDENCES AN INTEREST HAS NOT BEEN
REGISTERED AS AN "INVESTMENT COMPANY" UNDER THE INVESTMENT COMPANY ACT OF 1940,
AS AMENDED (THE "INVESTMENT COMPANY ACT"). ACCORDINGLY, THIS CERTIFICATE MAY NOT
BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT TO (1) A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT (A
"QUALIFIED INSTITUTIONAL BUYER") OR (2) AN ACCREDITED INVESTOR WITHIN THE
MEANING OF PARAGRAPH (1), (2), (3) OR (7) OF RULE 501(a) OF REGULATION D UNDER
THE SECURITIES ACT OR AN ENTITY IN WHICH ALL THE EQUITY OWNERS CONSTITUTE
ENTITIES DESCRIBED IN SUCH PARAGRAPH (AN "INSTITUTIONAL ACCREDITED INVESTOR").
THIS CERTIFICATE IS ENTITLED ONLY TO CERTAIN ADDITIONAL INTEREST (IF ANY) IN
RESPECT OF THE ARD LOANS (AS DEFINED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN).
This certifies that _____________________ is the registered owner of
the Percentage Interest evidenced by this Certificate (as specified above) in
that certain beneficial ownership interest in the Trust Fund evidenced by all
the Certificates of the same Class as this Certificate. The Trust Fund was
created and the Certificates were issued pursuant to a Pooling Agreement, dated
as specified above (the "Agreement"),
A-5-2
<PAGE>
among Salomon Brothers Mortgage Securities VII, Inc., as Depositor, and the
Mortgage Loan Sellers, Master Servicer, Special Servicer and Trustee identified
above. To the extent not defined herein, the capitalized terms used herein have
the respective meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 18th day of each month or, if such 18th day is not a Business Day,
the Business Day immediately following (each, a "Distribution Date"), commencing
on the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (the "Record
Date"), in an amount equal to the product of the Percentage Interest evidenced
by this Certificate and the amount required to be distributed pursuant to the
Agreement on the applicable Distribution Date in respect of the Class of
Certificates to which this Certificate belongs. All distributions made under the
Agreement in respect of this Certificate will be made by the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto at a bank or other entity having appropriate facilities therefor, if
such Certificateholder shall have provided the Trustee with written wiring
instructions no less than five (5) Business Days prior to the Record Date for
such distribution (which wiring instructions may be in the form of a standing
order applicable to all subsequent distributions as well), or otherwise by check
mailed to the address of such Certificateholder appearing in the Certificate
Register. Notwithstanding the above, the final distribution in respect of this
Certificate will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
offices of the Certificate Registrar appointed as provided in the Agreement or
such other location as may be specified in such notice.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
The Certificates are issuable in fully registered form only
without coupons in minimum denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, the
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
No transfer of this Certificate or any interest herein shall
be made unless that transfer is made pursuant to an effective registration
statement under the Securities Act, and effective registration or qualification
under applicable state securities laws, or is made in a transaction which does
not require such registration or qualification. In the event a transfer of this
Certificate (other than in connection with the initial issuance of the
Certificates or a transfer of this Certificate by the Depositor) is to be made
without registration under the Securities Act, then the Certificate Registrar
shall refuse to register such transfer until it
A-5-3
<PAGE>
receives the following: (i) a certificate from the Certificateholder desiring to
effect such transfer substantially in the form attached as Exhibit B-1 to the
Agreement and a certificate from such Certificateholder's prospective transferee
substantially in the form attached as Exhibit B-2 or Exhibit B-3 to the
Agreement; or (ii) an opinion of counsel satisfactory to the Certificate
Registrar to the effect that such transfer may be made without registration
under the Securities Act (which opinion of counsel shall not be an expense of
the Trust Fund or of the Depositor, the Mortgage Loan Sellers, the Master
Servicer, the Special Servicer, the Trustee, the Tax Administrator or the
Certificate Registrar in their respective capacities as such), together with the
written certification(s) as to the facts surrounding such transfer from the
Certificateholder desiring to effect such transfer and/or such
Certificateholder's prospective transferee on which such opinion of counsel is
based. None of the Depositor, the Trustee or the Certificate Registrar is
obligated to register or qualify the Class of Certificates to which this
Certificate belongs, under the Securities Act or any other securities law or to
take any action not otherwise required under the Agreement to permit the
transfer of this Certificate or any interest herein without registration or
qualification. Any Certificateholder desiring to effect such a transfer shall be
required to indemnify the Depositor, the Trustee, the Tax Administrator, the
Master Servicer, the Special Servicer and the Certificate Registrar against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.
No transfer of this Certificate or any interest herein shall
be made under any circumstances (i) to any employee benefit plan or other
retirement arrangement, including individual retirement accounts and annuities,
Keogh plans and collective investment funds and separate accounts in which such
plans, accounts or arrangements are invested, that is subject to ERISA or the
Code (each, a "Plan") or (ii) to any Person who is directly or indirectly
purchasing this Certificate or such interest herein on behalf of, as named
fiduciary of, as trustee of, or with "plan assets" within the meaning of the
Department of Labor regulation promulgated at 29 C.F.R. 'SS'2510.3-101, unless:
(x) if this Certificate or any interest herein is being acquired with "plan
assets", the prospective Transferee provides the Certificate Registrar with a
certification to the effect that the purchase, continued holding and transfer of
this Certificate or such interest herein is exempt from the prohibited
transaction provisions of Section 406 of ERISA and Section 4975 of the Code
under Sections I and III of Prohibited Transaction Class Exemption ("PTCE")
95-60; or (y) the prospective transferee provides the Certificate Registrar with
a certification of facts and an opinion of counsel, obtained at the expense of
such prospective transferee, which establish to the satisfaction of the
Certificate Registrar that such transfer will not result in a violation of
Section 406 of ERISA or Section 4975 of the Code, will not result in the
imposition of an excise tax under Section 4975 of the Code and will not subject
the Trustee, the Master Servicer or the Special Servicer to any obligation in
addition to those undertaken in the Agreement. It is hereby acknowledged that
the form of certification attached to the Agreement as Exhibit D is acceptable
for the purposes of the preceding sentence. Each Person who acquires this
Certificate without delivery of the certification of facts and opinion of
counsel referred to in the preceding two sentences shall be deemed to have
certified that it is neither a Plan nor any Person who is directly or indirectly
purchasing this Certificate on behalf of, as named fiduciary of, as trustee of,
or with assets of a Plan.
No service charge will be imposed for any registration of
transfer or exchange of Certificates, but the Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.
Prior to due presentment of this Certificate for registration
of transfer, the Depositor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Trustee, the Tax Administrator, the Certificate Registrar
and any agents of any of them may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Mortgage Loan Sellers, the Master Servicer, the Special Servicer,
the Trustee, the Tax Administrator, the Certificate Registrar or any such agent
shall be affected by notice to the contrary.
A-5-4
<PAGE>
The Trust Fund and the obligations created by the Agreement
shall terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Depositor or the
Mortgage Loan Sellers) at a price determined as provided in the Agreement of all
Mortgage Loans and any REO Properties remaining in the Trust Fund, and (iii) the
exchange by any Sole Certificateholder of all the Certificates for all Mortgage
Loans and any REO Properties remaining in the Trust Fund. The Agreement permits,
but does not require, any such Majority Certificateholder or the Master Servicer
to purchase from the Trust Fund all Mortgage Loans and any REO Properties
remaining therein. The exercise of such right will effect early retirement of
the Certificates; however, such right to purchase is subject to the aggregate
Stated Principal Balance of the Mortgage Pool at the time of purchase being less
than 1% of the Initial Pool Balance specified on the face hereof.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof, and the modification of the rights and
obligations of the Depositor, the Mortgage Loan Sellers, the Master Servicer,
the Special Servicer and the Trustee thereunder and the rights of the
Certificateholders thereunder, at any time by the Depositor, the Mortgage Loan
Sellers, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain circumstances, including any amendment necessary to maintain
the status of REMIC I, REMIC II, REMIC III or any Loan REMIC as a REMIC, without
the consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder and that the Trustee in its individual capacity is
not personally liable to the Holder hereof for any amounts payable on this
Certificate under the Agreement.
This Certificate shall be construed in accordance with the
internal laws of the State of New York that are applicable to agreements
negotiated, made and to be performed in said State, and the obligations, rights
and remedies of the Holder hereof shall be determined in accordance with such
laws.
A-5-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
THE CHASE MANHATTAN BANK, not in
its individual capacity but solely as Trustee
By: _________________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class Y Certificates referred to in the
within-mentioned Agreement.
Dated:
THE CHASE MANHATTAN BANK, not in
its individual capacity but solely as
Certificate Registrar
By: _________________________________________
Authorized Officer
A-5-6
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the
within Commercial Mortgage Pass-Through Certificate and hereby authorize(s) the
registration of transfer of such interest to the above named assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and delivery of such Commercial Mortgage Pass-Through
Certificate to the following address: __________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:
-----------------------------------------------
Signature by or on behalf of Assignor
-----------------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to __________________________________
________________________________________________________________________________
for the account of ____________________________________________________________.
Distributions made by check (such check to be made payable to
__________________) and all applicable statements and notices should be mailed
to ____________________________________.
This information is provided by ________________________, the
assignee named above, or ____________________, as its agent.
A-5-7
<PAGE>
EXHIBIT A-6
FORM OF CLASS [R-I] [R-II] [R-III] CERTIFICATE
CLASS [R-I] [R-II] [R-III] COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1999-C1
This is one of a series of commercial mortgage pass-through certificates
(collectively, the "Certificates"), issued in multiple classes (each, a
"Class"), which series of Certificates evidences the entire beneficial ownership
interest in a trust fund (the "Trust Fund") consisting primarily of a pool (the
"Mortgage Pool") of multifamily and commercial mortgage loans (the "Mortgage
Loans"), such pool being formed and sold by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
<TABLE>
<S> <C>
Date of Pooling Agreement: August 1, 1999 Percentage Interest evidenced by this Certificate
in the related Class: ____%
Aggregate unpaid principal balance of the
Cut-off Date: August 1, 1999 Mortgage Pool as of the Cut-off Date, after
deducting payments of principal due on or
Issue Date: August 20, 1999 before such date (the "Initial Pool Balance"):
$734,852,899
Master Servicer: Trustee:
GMAC Commercial Mortgage Corporation The Chase Manhattan Bank
Special Servicer:
BNY Asset Solutions LLC
Mortgage Loan Sellers:
Salomon Brothers Realty Corp. and
Llama Capital Mortgage Company
Limited Partnership
Certificate No. [R-I] [R-II] [R-III] -____ CUSIP No. _____________
</TABLE>
A-6-1
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN SALOMON
BROTHERS MORTGAGE SECURITIES VII, INC., SALOMON BROTHERS REALTY CORP., LLAMA
CAPITAL MORTGAGE COMPANY LIMITED PARTNERSHIP, GMAC COMMERCIAL MORTGAGE
CORPORATION, BNY ASSET SOLUTIONS LLC, THE CHASE MANHATTAN BANK OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE MORTGAGE LOANS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER
PERSON.
THE CLASS OF CERTIFICATES TO WHICH THIS CERTIFICATE BELONGS, IS SUBORDINATE TO
ONE OR MORE CLASSES OF CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT
PROVIDED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE.
ANY RESALE, PLEDGE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT
SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES
NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.02 OF THE POOLING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO (A) AN
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE"), OR (B) ANY PERSON WHO IS DIRECTLY OR
INDIRECTLY PURCHASING THIS CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS
NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT, EXCEPT IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THE TRUST FUND IN WHICH THIS CERTIFICATE EVIDENCES AN INTEREST HAS NOT BEEN
REGISTERED AS AN "INVESTMENT COMPANY" UNDER THE INVESTMENT COMPANY ACT OF 1940,
AS AMENDED (THE "INVESTMENT COMPANY ACT"). ACCORDINGLY, THIS CERTIFICATE MAY NOT
BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT TO A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT (A "QUALIFIED
INSTITUTIONAL BUYER").
[IN THE CASE OF CLASS R-I: SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS
CERTIFICATE EVIDENCES OWNERSHIP OF THE "RESIDUAL INTEREST" IN MULTIPLE "REAL
ESTATE MORTGAGE INVESTMENT CONDUITS" (EACH A "REMIC") AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE. CONSEQUENTLY,
TRANSFER OF THIS CERTIFICATE IS ALSO SUBJECT TO THE ADDITIONAL TAX RELATED
TRANSFER RESTRICTIONS DESCRIBED HEREIN. IF ANY PERSON BECOMES THE REGISTERED
HOLDER OF THIS CERTIFICATE IN VIOLATION OF SUCH TRANSFER RESTRICTIONS, SUCH
REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND
SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE
HEREUNDER OR UNDER THE POOLING AGREEMENT REFERRED TO HEREIN, INCLUDING, BUT NOT
LIMITED TO, THE RECEIPT OF DISTRIBUTIONS, IF ANY, ON THIS CERTIFICATE.]
A-6-2
<PAGE>
[IN THE CASE OF CLASS R-II AND CLASS R-III: SOLELY FOR U.S. FEDERAL INCOME TAX
PURPOSES, THIS CERTIFICATE IS A "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT" (A "REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE CODE. CONSEQUENTLY, THE TRANSFER OF THIS
CERTIFICATE IS ALSO SUBJECT TO THE ADDITIONAL TAX RELATED TRANSFER RESTRICTIONS
DESCRIBED HEREIN. IF ANY PERSON BECOMES THE REGISTERED HOLDER OF THIS
CERTIFICATE IN VIOLATION OF SUCH TRANSFER RESTRICTIONS, SUCH REGISTRATION SHALL
BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL BE
DEEMED NOT TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER OR UNDER THE
POOLING AGREEMENT REFERRED TO HEREIN, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT
OF DISTRIBUTIONS ON THIS CERTIFICATE.]
This certifies that _____________________ is the registered owner of
the Percentage Interest evidenced by this Certificate (as specified above) in
that certain beneficial ownership interest in the Trust Fund evidenced by all
the Certificates of the same Class as this Certificate. The Trust Fund was
created and the Certificates were issued pursuant to a Pooling Agreement, dated
as specified above (the "Agreement"), among Salomon Brothers Mortgage Securities
VII, Inc., as Depositor, and the Mortgage Loan Sellers, Master Servicer, Special
Servicer and Trustee identified above. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 18th day of each month or, if such 18th day is not a Business Day,
the Business Day immediately following (each, a "Distribution Date"), commencing
on the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (the "Record
Date"), in an amount equal to the product of the Percentage Interest evidenced
by this Certificate and the amount required to be distributed pursuant to the
Agreement on the applicable Distribution Date in respect of the Class of
Certificates to which this Certificate belongs. All distributions made under the
Agreement in respect of this Certificate will be made by the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto at a bank or other entity having appropriate facilities therefor, if
such Certificateholder shall have provided the Trustee with written wiring
instructions no less than five (5) Business Days prior to the Record Date for
such distribution (which wiring instructions may be in the form of a standing
order applicable to all subsequent distributions as well), or otherwise by check
mailed to the address of such Certificateholder appearing in the Certificate
Register. Notwithstanding the above, the final distribution in respect of this
Certificate will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
offices of the Certificate Registrar appointed as provided in the Agreement or
such other location as may be specified in such notice.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
A-6-3
<PAGE>
The Certificates are issuable in fully registered form only
without coupons in minimum denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, the
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
No transfer of this Certificate or any interest herein shall
be made unless that transfer is made pursuant to an effective registration
statement under the Securities Act, and effective registration or qualification
under applicable state securities laws, or is made in a transaction which does
not require such registration or qualification. In the event a transfer of this
Certificate (other than in connection with the initial issuance of the
Certificates or a transfer of this Certificate by the Depositor) is to be made
without registration under the Securities Act, then the Certificate Registrar
shall refuse to register such transfer until it receives the following: (i) a
certificate from the Certificateholder desiring to effect such transfer
substantially in the form attached as Exhibit B-1 to the Agreement and a
certificate from such Certificateholder's prospective transferee substantially
in the form attached as Exhibit B-2 or Exhibit B-3 to the Agreement; or (ii) an
opinion of counsel satisfactory to the Certificate Registrar to the effect that
such transfer may be made without registration under the Securities Act (which
opinion of counsel shall not be an expense of the Trust Fund or of the
Depositor, the Mortgage Loan Sellers, the Master Servicer, the Special Servicer,
the Trustee, the Tax Administrator or the Certificate Registrar in their
respective capacities as such), together with the written certification(s) as to
the facts surrounding such transfer from the Certificateholder desiring to
effect such transfer and/or such Certificateholder's prospective transferee on
which such opinion of counsel is based. None of the Depositor, the Trustee or
the Certificate Registrar is obligated to register or qualify the Class of
Certificates to which this Certificate belongs, under the Securities Act or any
other securities law or to take any action not otherwise required under the
Agreement to permit the transfer of this Certificate or any interest herein
without registration or qualification. Any Certificateholder desiring to effect
such a transfer shall be required to indemnify the Depositor, the Trustee, the
Tax Administrator, the Master Servicer, the Special Servicer and the Certificate
Registrar against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.
No transfer of this Certificate or any interest herein shall
be made under any circumstances (i) to any employee benefit plan or other
retirement arrangement, including individual retirement accounts and annuities,
Keogh plans and collective investment funds and separate accounts in which such
plans, accounts or arrangements are invested, that is subject to ERISA or the
Code (each, a "Plan") or (ii) to any Person who is directly or indirectly
purchasing this Certificate or such interest herein on behalf of, as named
fiduciary of, as trustee of, or with "plan assets" within the meaning of the
Department of Labor regulation promulgated at 29 C.F.R. 'SS'2510.3-101, unless:
(x) if this Certificate or any interest herein is being acquired with "plan
assets", the prospective Transferee provides the Certificate Registrar with a
certification to the effect that the purchase, continued holding and transfer of
this Certificate or such interest herein is exempt from the prohibited
transaction provisions of Section 406 of ERISA and Section 4975 of the Code
under Sections I and III of Prohibited Transaction Class Exemption ("PTCE")
95-60; or (y) the prospective transferee provides the Certificate Registrar with
a certification of facts and an opinion of counsel, obtained at the expense of
such prospective transferee, which establish to the satisfaction of the
Certificate Registrar that such transfer will not result in a violation of
Section 406 of ERISA or Section 4975 of the Code, will not result in the
imposition of an excise tax under Section 4975 of the Code and will not subject
the Trustee, the
A-6-4
<PAGE>
Master Servicer or the Special Servicer to any obligation in addition to those
undertaken in the Agreement. It is hereby acknowledged that the form of
certification attached to the Agreement as Exhibit D is acceptable for the
purposes of the preceding sentence. Each Person who acquires this Certificate
without delivery of the certification of facts and opinion of counsel referred
to in the preceding two sentences shall be deemed to have certified that it is
neither a Plan nor any Person who is directly or indirectly purchasing this
Certificate on behalf of, as named fiduciary of, as trustee of, or with assets
of a Plan.
Each Person who has or who acquires any Ownership Interest in
this Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the provisions of Section
5.02(d) of the Agreement and, if any purported Transferee shall become a Holder
of this Certificate in violation of the provisions of such Section 5.02(d), to
have irrevocably authorized the Trustee under clause (ii)(A) of such Section
5.02(d) to deliver payments to a Person other than such Person and to have
irrevocably authorized the Trustee under clause (ii)(B) of such Section 5.02(d)
to negotiate the terms of any mandatory disposition and to execute all
instruments of transfer and to do all other things necessary in connection with
any such disposition. Each Person holding or acquiring any Ownership Interest in
this Certificate must be a Permitted Transferee and shall promptly notify the
Master Servicer, the Trustee and the Tax Administrator of any change or
impending change in its status as a Permitted Transferee. In connection with any
proposed transfer of any Ownership Interest in this Certificate, the Certificate
Registrar shall require delivery to it, and shall not register the transfer of
this Certificate until its receipt of, an affidavit and agreement substantially
in the form attached as Exhibit C-1 to the Agreement (a "Transfer Affidavit and
Agreement") from the proposed Transferee, in form and substance satisfactory to
the Certificate Registrar, representing and warranting, among other things, that
such Transferee is a Permitted Transferee, that it is not acquiring its
Ownership Interest in this Certificate as a nominee, trustee or agent for any
Person that is not a Permitted Transferee, that for so long as it retains its
Ownership Interest in this Certificate, it will endeavor to remain a Permitted
Transferee, and that it has reviewed the provisions of Section 5.02(d) of the
Agreement and agrees to be bound by them. Notwithstanding the delivery of a
Transfer Affidavit and Agreement by a proposed Transferee, if the Certificate
Registrar has actual knowledge that the proposed Transferee is not a Permitted
Transferee, the Certificate Registrar shall not register the Transfer of an
Ownership Interest in this Certificate to such proposed Transferee.
Each Person holding or acquiring any Ownership Interest in
this Certificate shall agree (x) to require a Transfer Affidavit and Agreement
from any other Person to whom such Person attempts to transfer its Ownership
Interest herein and (y) not to transfer its Ownership Interest herein unless it
provides to the Certificate Registrar a certificate substantially in the form
attached as Exhibit C-2 to the Agreement stating that, among other things, it
has no actual knowledge that such other Person is not a Permitted Transferee.
Each Person holding or acquiring an Ownership Interest in this Certificate, by
purchasing such Ownership Interest herein, agrees to give the Trustee and the
Tax Administrator written notice that it is a "pass-through interest holder"
within the meaning of temporary Treasury regulation Section 1.67-3T(a)(2)(i)(A)
immediately upon acquiring such Ownership Interest, if it is, or is holding such
Ownership Interest on behalf of, a "pass-through interest holder".
The provisions of Section 5.02(d) of the Agreement may be
modified, added to or eliminated, provided that there shall have been delivered
to the Trustee and the Tax Administrator the following: (a) written notification
from each Rating Agency to the effect that the modification of, addition to or
elimination of such provisions will not cause such Rating Agency to withdraw or
downgrade its then-current rating of any Class of Certificates; and (b) an
opinion of counsel, in form and substance satisfactory to the Trustee and the
Tax Administrator, to the effect that such modification of, addition to or
elimination of such provisions will not (i) cause any of REMIC I, REMIC II or
REMIC III or any Loan REMIC to (A) cease to qualify as a REMIC or (B) be subject
to an entity-level tax caused by the Transfer of a Residual Certificate to a
Person which is not a Permitted Transferee, or (ii) cause a Person other than
the prospective Transferee to be subject to a REMIC-related tax caused by the
Transfer of a Residual Certificate to a Person which is not a Permitted
Transferee.
A-6-5
<PAGE>
A "Permitted Transferee" is any Transferee that is not a
Disqualified Organization or a Non-United States Person. In addition, if such a
Transferee is classified as a partnership under the Code, such Transferee can
only be a Permitted Transferee if all of its beneficial owners are United States
Persons.
A "Disqualified Organization" is (i) the United States, any
State or political subdivision thereof, any possession of the United States, or
any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax and, except for the Federal Home Loan Mortgage Corporation, a majority of
whose board of directors is not selected by such governmental unit), (ii) a
foreign government, any inter national organization, or any agency or
instrumentality of any of the foregoing, (iii) any organization (other than
certain farmers' cooperatives described in Section 521 of the Code) which is
exempt from the tax imposed by Chapter 1 of the Code (unless such organization
is subject to the tax imposed by Section 511 of the Code on unrelated business
taxable income), (iv) rural electric and telephone cooperatives described in
Section 1381 of the Code and (v) any other Person so designated by the Tax
Administrator based upon an opinion of counsel that the holding of an Ownership
Interest in a Residual Certificate by such Person may cause the Trust Fund or
any Person having an Ownership Interest in any Class of Certificates (other than
such Person) to incur a liability for any federal tax imposed under the Code
that would not otherwise be imposed but for the Transfer of an Ownership
Interest in a Residual Certificate to such Person. The terms "United States",
"State" and "international organization" shall have the meanings set forth in
Section 7701 of the Code or successor provisions.
A "Non-United States Person" is any Person other than a United
States Person. A "United States Person" is a citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision thereof, or an
estate whose income from sources without the United States is includable in
gross income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States, or
a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have the authority to control all substantial decisions of the trust,
all within the meaning of Section 7701(a)(30) of the Code.
No service charge will be imposed for any registration of
transfer or exchange of Certificates, but the Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.
Prior to due presentment of this Certificate for registration
of transfer, the Depositor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Trustee, the Tax Administrator, the Certificate Registrar
and any agents of any of them may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Mortgage Loan Sellers, the Master Servicer, the Special Servicer,
the Trustee, the Tax Administrator, the Certificate Registrar or any such agent
shall be affected by notice to the contrary.
The Trust Fund and the obligations created by the Agreement
shall terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Depositor or the
Mortgage Loan Sellers) at a price determined as provided in the Agreement of all
Mortgage Loans and any REO Properties remaining in the Trust Fund, and (iii) the
exchange by any Sole Certificateholder of all the Certificates for all Mortgage
Loans and any REO Properties remaining in the Trust Fund. The Agreement permits,
but does not require, any such Majority Certificateholder or the Master Servicer
to purchase from the Trust Fund all Mortgage Loans and
A-6-6
<PAGE>
any REO Properties remaining therein. The exercise of such right will effect
early retirement of the Certificates; however, such right to purchase is subject
to the aggregate Stated Principal Balance of the Mortgage Pool at the time of
purchase being less than 1% of the Initial Pool Balance specified on the face
hereof.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof, and the modification of the rights and
obligations of the Depositor, the Mortgage Loan Sellers, the Master Servicer,
the Special Servicer and the Trustee thereunder and the rights of the
Certificateholders thereunder, at any time by the Depositor, the Mortgage Loan
Sellers, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain circumstances, including any amendment necessary to maintain
the status of REMIC I, REMIC II, REMIC III or any Loan REMIC as a REMIC, without
the consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder and that the Trustee in its individual capacity is
not personally liable to the Holder hereof for any amounts payable on this
Certificate under the Agreement.
This Certificate shall be construed in accordance with the
internal laws of the State of New York that are applicable to agreements
negotiated, made and to be performed in said State, and the obligations, rights
and remedies of the Holder hereof shall be determined in accordance with such
laws.
A-6-7
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
THE CHASE MANHATTAN BANK, not in
its individual capacity but solely as
Trustee
By:
_____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class [R-I] [R-II] [R-III] Certificates
referred to in the within-mentioned Agreement.
Dated:
THE CHASE MANHATTAN BANK, not in
its individual capacity but solely as
Certificate Registrar
By:
_____________________________________
Authorized Officer
A-6-8
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Commercial Mortgage Pass-Through Certificate and hereby authorize(s) the
registration of transfer of such interest to the above named assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and delivery of such Commercial Mortgage Pass-Through
Certificate to the following address: __________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Dated:
_________________________________________
Signature by or on behalf of Assignor
_________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to __________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
Distributions made by check (such check to be made payable to
______________________) and all applicable statements and notices should be
mailed to _____________________________________________________________________.
This information is provided by ________________________, the
assignee named above, or ____________________, as its agent.
A-6-9
<PAGE>
EXHIBIT B-1
FORM OF TRANSFEROR CERTIFICATE
PURSUANT TO SECTION 5.02(b)
[date]
The Chase Manhattan Bank
450 West 33rd Street, 14th Floor
New York, New York 10001-2697
Attention: Capital Markets Fiduciary Services (CMBS)
Salomon Brothers Mortgage Securities VII, Inc.,
Series 1999-C1
Re: Salomon Brothers Mortgage Securities VII, Inc., Commercial
Mortgage Pass-Through Certificates, Series 1999-C1, Class ___,
[having an initial aggregate Certificate Principal Balance as of
August 20, 1999 (the "Closing Date") of $_________]
[representing a ____% Percentage Interest in the related Class.]
Dear Sirs:
This letter is delivered to you in connection with the transfer by
______________________ (the "Transferor") to __________________________ (the
"Transferee") of the captioned Certificates (the "Transferred Certificates"),
pursuant to Section 5.02 of the Pooling and Servicing Agreement (the "Pooling
Agreement"), dated as of August 1, 1999, among Salomon Brothers Mortgage
Securities VII, Inc., as Depositor, Salomon Brothers Realty Corp. and Llama
Capital Mortgage Company Limited Partnership, as Mortgage Loan Sellers, GMAC
Commercial Mortgage Corporation, as Master Servicer, BNY Asset Solutions LLC, as
Special Servicer, and The Chase Manhattan Bank, as Trustee. All capitalized
terms used herein and not otherwise defined shall have the respective meanings
set forth in the Pooling Agreement. The Transferor hereby certifies, represents
and warrants to you, as Certificate Registrar, that:
1. The Transferor is the lawful owner of the Transferred
Certificates with the full right to transfer such Certificates free from
any and all claims and encumbrances whatsoever.
2. Neither the Transferor nor anyone acting on its behalf has
(a) offered, transferred, pledged, sold or otherwise disposed of any
Non-Registered Certificate, any interest in a Non-Registered Certificate
or any other similar security to any person in any manner, (b) solicited
any offer to buy or accept a transfer, pledge or other disposition of
any Non-Registered Certificate, any interest in a Non-Registered
Certificate or any other similar security from any person in any manner,
(c) otherwise approached or negotiated with respect to any
Non-Registered Certificate, any interest in a Non-Registered Certificate
or any other similar security with any person in any manner, (d) made
any general solicitation with respect to any Non-Registered Certificate,
any interest in a Non-Registered Certificate or any other similar
security by means of general advertising or in any other manner, or (e)
taken any other action with respect to any Non-Registered Certificate,
any interest in a Non-Registered Certificate or any other similar
security, which (in the case of any of the acts described in clauses (a)
through (e) hereof) would constitute a distribution of the Transferred
Certificates under the Securities Act of 1933, as amended (the
"Securities Act"), would render the disposition of the Transferred
Certificates a violation of Section 5 of the Securities Act or any state
securities laws, or would require registration or qualification of the
Transferred Certificates pursuant to the Securities Act or any state
securities laws.
B-1-1
<PAGE>
Very truly yours,
------------------------------------
(Transferor)
By:
---------------------------------
Name:
---------------------------
Title:
---------------------------
B-1-2
<PAGE>
EXHIBIT B-2
FORM I OF TRANSFEREE CERTIFICATE
PURSUANT TO SECTION 5.02(b)
FOR TRANSFERS OF NON-REGISTERED CERTIFICATES
[FOR QIBs]
[date]
The Chase Manhattan Bank
450 West 33rd Street, 14th Floor
New York, New York 10001-2697
Attention: Capital Markets Fiduciary Services (CMBS)
Salomon Brothers Mortgage Securities VII, Inc.,
Series 1999-C1
Re: Salomon Brothers Mortgage Securities VII, Inc., Commercial
Mortgage Pass-Through Certificates, Series 1999-C1, Class ___,
[having an initial aggregate Certificate Principal Balance as of
August 20, 1999 (the "Closing Date") of $___________]
[representing a ____% Percentage Interest in the related Class.]
Dear Sirs:
This letter is delivered to you in connection with the transfer by
_______________________ (the "Transferor") to __________________________ (the
"Transferee") of the captioned Certificates (the "Transferred Certificates"),
pursuant to Section 5.02 of the Pooling and Servicing Agreement (the "Pooling
Agreement"), dated as of August 1, 1999, among Salomon Brothers Mortgage
Securities VII, Inc., as Depositor, Salomon Brothers Realty Corp. and Llama
Capital Mortgage Company Limited Partnership, as Mortgage Loan Sellers, GMAC
Commercial Mortgage Corporation, as Master Servicer, BNY Asset Solutions LLC, as
Special Servicer, and The Chase Manhattan Bank, as Trustee. All capitalized
terms used herein and not otherwise defined shall have the respective meanings
set forth in the Pooling Agreement. The Transferee hereby certifies, represents
and warrants to you, as Certificate Registrar, that:
1. The Transferee is a "qualified institutional buyer" (a
"Qualified Institutional Buyer") as that term is defined in Rule 144A
("Rule 144A") under the Securities Act of 1933, as amended (the
"Securities Act"), and has completed one of the forms of certification
to that effect attached hereto as Annex 1 and Annex 2. The Transferee is
aware that the sale to it is being made in reliance on Rule 144A. The
Transferee is acquiring the Transferred Certificates for its own account
or for the account of another Qualified Institutional Buyer, and
understands that such Transferred Certificates may be resold, pledged or
transferred only (a) to a person reasonably believed to be a Qualified
Institutional Buyer that purchases for its own account or for the
account of another Qualified Institutional Buyer to whom notice is given
that the resale, pledge or transfer is being made in reliance on Rule
144A, or (b) pursuant to another exemption from registration under the
Securities Act.
B-2-1
<PAGE>
2. The Transferee has been furnished with all information
regarding (a) the Depositor, (b) the Transferred Certificates and
distributions thereon, (c) the nature, performance and servicing of the
Mortgage Loans, (d) the Pooling Agreement and the Trust created pursuant
thereto, (e) any credit enhancement mechanism associated with the
Transferred Certificates, and (f) all related matters, that it has
requested.
3. If the Transferee proposes that the Transferred Certificates
be registered in the name of a nominee, such nominee has completed the
Nominee Acknowledgment below.
Very truly yours,
------------------------------
(Transferee)
By:
---------------------------
Name:
----------------------
Title:
---------------------
B-2-2
<PAGE>
Nominee Acknowledgment
The undersigned hereby acknowledges and agrees that as to the
Transferred Certificates being registered in its name, the sole beneficial owner
thereof is and shall be the Transferee identified above, for whom the
undersigned is acting as nominee.
------------------------------------
(Nominee)
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
B-2-3
<PAGE>
ANNEX 1 TO EXHIBIT B-2
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned hereby certifies as follows to [name of Transferor] (the
"Transferor") and [name of Certificate Registrar], as Certificate Registrar,
with respect to the mortgage pass-through certificates (the "Transferred
Certificates") described in the Transferee certificate to which this
certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the chief financial officer, a
person fulfilling an equivalent function, or other executive officer of the
entity purchasing the Transferred Certificates (the "Transferee").
2. The Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A ("Rule 144A") under the Securities Act of 1933, as amended,
because (i) [the Transferee] [each of the Transferee's equity owners] owned
and/or invested on a discretionary basis $______________________(1) in
securities (other than the excluded securities referred to below) as of the end
of its most recent fiscal year (such amount being calculated in accordance with
Rule 144A) and (ii) the Transferee satisfies the criteria in the category marked
below.
___ Corporation, etc. The Transferee is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or any
organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986.
___ Bank. The Transferee (a) is a national bank or a banking
institution organized under the laws of any state, U.S.
territory or the District of Columbia, the business of which is
substantially confined to banking and is supervised by the state
or territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its latest
annual financial statements, a copy of which is attached hereto,
as of a date not more than 16 months preceding the date of sale
of the Transferred Certificates in the case of a U.S. bank, and
not more than 18 months preceding such date of sale in the case
of a foreign bank or equivalent institution.
___ Savings and Loan. The Transferee (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a state or federal authority having
supervision over any such institutions, or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which is attached
hereto, as of a date not more than 16 months preceding the date
of sale of the Transferred Certificates in the case of a U.S.
savings and
- --------
(1) Transferee or each of its equity owners must own and/or invest on a
discretionary basis at least $100,000,000 in securities unless Transferee or any
such equity owner, as the case may be, is a dealer, and, in that case,
Transferee or such equity owner, as the case may be, must own and/or invest on a
discretionary basis at least $10,000,000 in securities.
B-2-4
<PAGE>
loan association, and not more than 18 months preceding such
date of sale in the case of a foreign savings and loan
association or equivalent institution.
___ Broker-dealer. The Transferee is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934, as amended.
___ Insurance Company. The Transferee is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a state, U.S.
territory or the District of Columbia.
___ State or Local Plan. The Transferee is a plan established and
maintained by a state, its political subdivisions, or any agency
or instrumentality of the state or its political subdivisions,
for the benefit of its employees.
___ ERISA Plan. The Transferee is an employee benefit plan within
the meaning of Title I of the Employee Retirement Income
Security Act of 1974.
___ Investment Advisor. The Transferee is an investment advisor
registered under the Investment Advisers Act of 1940.
____ QIB Subsidiary. each of the Transferee's equity owners is a
"qualified institutional buyer" within the meaning of Rule 144A.
___ Other. (Please supply a brief description of the entity and a
cross-reference to the paragraph and subparagraph under
subsection (a)(1) of Rule 144A pursuant to which it qualifies.
Note that registered investment companies should complete Annex
2 rather than this Annex 1.)
________________________________________________________________
________________________________________________________________
________________________________________________________________
3. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by any Person, the Transferee did not
include (i) securities of issuers that are affiliated with such Person, (ii)
securities that are part of an unsold allotment to or subscription by such
Person, if such Person is a dealer, (iii) bank deposit notes and certificates of
deposit, (iv) loan participations, (v) repurchase agreements, (vi) securities
owned but subject to a repurchase agreement and (vii) currency, interest rate
and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by any Person, the Transferee used the
cost of such securities to such Person, unless such Person reports its
securities holdings in its financial statements on the basis of their market
value, and no current information with respect to the cost of those securities
has been published, in which case the securities were valued at market. Further,
in determining such aggregate amount, the Transferee may have included
securities owned by subsidiaries of such Person, but only if such subsidiaries
are consolidated with such Person in its financial statements prepared in
accordance with generally accepted accounting principles and if the investments
of such subsidiaries are managed under such Person's direction. However, such
securities were not included if such Person is a majority-owned, consolidated
subsidiary of another enterprise and such Person is not itself a reporting
company under the Securities Exchange Act of 1934, as amended.
B-2-5
<PAGE>
5. The Transferee is familiar with Rule 144A and understands that the
Transferor and other parties related to the Transferred Certificates are relying
and will continue to rely on the statements made herein because one or more
sales to the Transferee may be in reliance on Rule 144A.
___ ___ Will the Transferee be purchasing the Transferred
Yes No Certificates only for the Transferee's own account?
6. If the answer to the foregoing question is "no," then in each case
where the Transferee is purchasing for an account other than its own, such
account belongs to a third party that is itself a "qualified institutional
buyer" within the meaning of Rule 144A, and the "qualified institutional buyer"
status of such third party has been established by the Transferee through one or
more of the appropriate methods contemplated by Rule 144A.
7. The Transferee will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Transferee's purchase of the Transferred
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties any updated annual financial statements that become available on or
before the date of such purchase, promptly after they become available.
8. Capitalized terms used but not defined herein have the respective
meanings assigned thereto in the Pooling and Servicing Agreement pursuant to
which the Transferred Certificates were issued.
---------------------------------
Print Name of Transferee
By:
------------------------------
Name:
-------------------------
Title:
------------------------
Date:
-------------------------
B-2-6
<PAGE>
ANNEX 2 TO EXHIBIT B-2
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That Are Registered Investment Companies]
The undersigned hereby certifies as follows to [name of Transferor] (the
"Transferor") and [name of Certificate Registrar], as Certificate Registrar,
with respect to the mortgage pass-through certificates (the "Transferred
Certificates") described in the Transferee certificate to which this
certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the chief financial officer, a
person fulfilling an equivalent function, or other executive officer of the
entity purchasing the Transferred Certificates (the "Transferee") or, if the
Transferee is a "qualified institutional buyer" as that term is defined in Rule
144A ("Rule 144A") under the Securities Act of 1933, as amended, because the
Transferee is part of a Family of Investment Companies (as defined below), is an
executive officer of the investment adviser (the "Adviser").
2. The Transferee is a "qualified institutional buyer" as defined in
Rule 144A because (i) the Transferee is an investment company registered under
the Investment Company Act of 1940, and (ii) as marked below, the Transferee
alone owned and/or invested on a discretionary basis, or the Transferee's Family
of Investment Companies owned, at least $100,000,000 in securities (other than
the excluded securities referred to below) as of the end of the Transferee's
most recent fiscal year. For purposes of determining the amount of securities
owned by the Transferee or the Transferee's Family of Investment Companies, the
cost of such securities was used, unless the Transferee or any member of the
Transferee's Family of Investment Companies, as the case may be, reports its
securities holdings in its financial statements on the basis of their market
value, and no current information with respect to the cost of those securities
has been published, in which case the securities of such entity were valued at
market.
____ The Transferee owned and/or invested on a discretionary basis
$___________________ in securities (other than the excluded
securities referred to below) as of the end of the Transferee's
most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
____ The Transferee is part of a Family of Investment Companies which
owned in the aggregate $______________ in securities (other than
the excluded securities referred to below) as of the end of the
Transferee's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two or
more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (ii) bank deposit notes and
certificates of deposit, (iii) loan participations, (iv) repurchase agreements,
(v) securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps. For purposes of determining the aggregate
amount of securities owned and/or invested on a discretionary basis by
B-2-7
<PAGE>
the Transferee, or owned by the Transferee's Family of Investment Companies, the
securities referred to in this paragraph were excluded.
5. The Transferee is familiar with Rule 144A and understands that the
Transferor and other parties related to the Transferred Certificates are relying
and will continue to rely on the statements made herein because one or more
sales to the Transferee will be in reliance on Rule 144A.
___ ___ Will the Transferee be purchasing the Transferred
Yes No Certificates only for the Transferee's own account?
6. If the answer to the foregoing question is "no," then in each case
where the Transferee is purchasing for an account other than its own, such
account belongs to a third party that is itself a "qualified institutional
buyer" within the meaning of Rule 144A, and the "qualified institutional buyer"
status of such third party has been established by the Transferee through one or
more of the appropriate methods contemplated by Rule 144A.
7. The undersigned will notify the parties to which this certification
is made of any changes in the information and conclusions herein. Until such
notice, the Transferee's purchase of the Transferred Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
8. Capitalized terms used but not defined herein have the respective
meanings assigned thereto in the Pooling and Servicing Agreement pursuant to
which the Transferred Certificates were issued.
------------------------------------------
Print Name of Transferee or Adviser
By:
---------------------------------------
Name:
--------------------------------
Title:
-------------------------------
IF AN ADVISER:
-------------------------------------------
Print Name of Transferee
Date:
--------------------------------------
B-2-8
<PAGE>
EXHIBIT B-3
FORM II OF TRANSFEREE CERTIFICATE
PURSUANT TO SECTION 5.02(b)
FOR TRANSFERS OF NON-REGISTERED CERTIFICATES
[FOR INSTITUTIONAL ACCREDITED INVESTORS]
_____________, 19__
The Chase Manhattan Bank
450 West 33rd Street, 14th Floor
New York, New York 10001-2697
Attention: Capital Markets Fiduciary Services (CMBS)
Salomon Brothers Mortgage Securities VII, Inc.,
Series 1999-C1
Re: Salomon Brothers Mortgage Securities VII, Inc., Commercial
Mortgage Pass-Through Certificates, Series 1999-C1, Class ___,
[having an initial aggregate Certificate Principal Balance as of
August 20, 1999 (the "Closing Date") of
$_______________][representing a __% Percentage Interest in the
related Class]
Dear Sirs:
This letter is delivered to you in connection with the transfer by
_______________________ (the "Transferor") to __________________________ (the
"Transferee") of the captioned Certificates (the "Transferred Certificates"),
pursuant to Section 5.02 of the Pooling and Servicing Agreement (the "Pooling
Agreement"), dated as of August 1, 1999, among Salomon Brothers Mortgage
Securities VII, Inc., as Depositor, Salomon Brothers Realty Corp. and Llama
Capital Mortgage Company Limited Partnership, as Mortgage Loan Sellers, GMAC
Commercial Mortgage Corporation, as Master Servicer, BNY Asset Solutions LLC, as
Special Servicer, and The Chase Manhattan Bank, as Trustee. All capitalized
terms used herein and not otherwise defined shall have the respective meanings
set forth in the Pooling Agreement. The Transferee hereby certifies, represents
and warrants to you, as Certificate Registrar, that:
1. The Transferee is acquiring the Transferred Certificates for its own
account for investment and not with a view to or for sale or transfer in
connection with any distribution thereof, in whole or in part, in any manner
which would violate the Securities Act of 1933, as amended (the "Securities
Act"), or any applicable state securities laws.
2. The Transferee understands that (a) the Transferred Certificates have
not been and will not be registered under the Securities Act or registered or
qualified under any applicable state securities laws, (b) the Depositor, the
Trustee and the Certificate Registrar are not obligated so to register or
qualify the Transferred Certificates and (c) neither the Transferred
Certificates nor any security issued in exchange therefor or in lieu thereof may
be resold or transferred unless it is (i) registered pursuant to the Securities
Act and registered or qualified pursuant to any applicable state securities laws
or (ii) sold or transferred in a transaction which is exempt from such
registration and qualification and the Certificate Registrar has received (A) a
certificate from the prospective transferor substantially in the form attached
as Exhibit B-1 to the Pooling Agreement and a certificate from the prospective
transferee substantially in the form attached either as Exhibit B-2 or Exhibit
B-3 to the Pooling Agreement or (B) an Opinion of Counsel satisfactory to the
Certificate Registrar that the transfer may be made without registration under
the Securities Act, together
B-3-1
<PAGE>
with the written certification(s) as to the facts surrounding the transfer from
the prospective transferor and/or prospective transferee upon which such Opinion
of Counsel is based.
3. The Transferee understands that it may not sell or otherwise transfer
the Transferred Certificates, any security issued in exchange therefor or in
lieu thereof or any interest in the foregoing except in compliance with the
provisions of Section 5.02 of the Pooling Agreement, which provisions it has
carefully reviewed, and that the Transferred Certificates will bear legends
substantially to the following effect:
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
THE SECURITIES LAWS OF ANY STATE. ANY RESALE, PLEDGE, TRANSFER
OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT SUCH
REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING
AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE
MADE TO (A) ANY EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE"), OR (B) ANY PERSON WHO IS
DIRECTLY OR INDIRECTLY PURCHASING THIS CERTIFICATE OR ANY
INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE
OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT, EXCEPT IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 5.02 OF THE POOLING AGREEMENT REFERRED TO HEREIN.
THE TRUST FUND IN WHICH THIS CERTIFICATE EVIDENCES AN INTEREST
HAS NOT BEEN REGISTERED AS AN "INVESTMENT COMPANY" UNDER THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE "INVESTMENT
COMPANY ACT"). ACCORDINGLY, THIS CERTIFICATE MAY NOT BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT TO (1) A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT (A "QUALIFIED INSTITUTIONAL BUYER") OR (2) AN
ACCREDITED INVESTOR WITHIN THE MEANING OF PARAGRAPH (1), (2),
(3) OR (7) OF RULE 501(a) OF REGULATION D UNDER THE SECURITIES
ACT OR AN ENTITY IN WHICH ALL THE EQUITY OWNERS CONSTITUTE
ENTITIES DESCRIBED IN SUCH PARAGRAPHS (AN "INSTITUTIONAL
ACCREDITED INVESTOR").
4. Neither the Transferee nor anyone acting on its behalf has (a)
offered, transferred, pledged, sold or otherwise disposed of any Transferred
Certificate, any interest in a Transferred Certificate or any other similar
security to any person in any manner, (b) solicited any offer to buy or accept a
transfer, pledge or other disposition of any Transferred Certificate, any
interest in a Transferred Certificate or any other similar security from any
person in any manner, (c) otherwise approached or negotiated with respect to any
Transferred Certificate, any interest in a Transferred Certificate or any other
similar security with any person in any manner, (d) made any general
solicitation by means of general advertising or in any other manner, or (e)
taken any other action, that (in the case of any of the acts described in
clauses (a) through (e) above) would constitute a distribution of the
Transferred Certificates under the Securities Act, would render the disposition
of the Transferred Certificates a violation of Section 5 of the Securities Act
or any state securities law or would require registration or qualification of
the Transferred Certificates pursuant thereto. The
B-3-2
<PAGE>
Transferee will not act, nor has it authorized nor will it authorize any person
to act, in any manner set forth in the foregoing sentence with respect to the
Transferred Certificates, any interest in the Transferred Certificates or any
other similar security.
5. The Transferee has been furnished with all information regarding (a)
the Depositor, (b) the Transferred Certificates and distributions thereon, (c)
nature, performance and servicing of the Mortgage Loans, (d) the Pooling
Agreement and the Trust created pursuant thereto, (e) any credit enhancement
mechanism associated with the Transferred Certificates, and (f) all related
matters, that it has requested.
6. The Transferee is an "accredited investor" within the meaning of
paragraph (1), (2), (3) or (7) of Rule 501(a) under the Securities Act or an
entity in which all the equity owners come within such paragraphs and has such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of an investment in the Transferred
Certificates; the Transferee has sought such accounting, legal and tax advice as
it has considered necessary to make an informed investment decision; and the
Transferee is able to bear the economic risks of such an investment and can
afford a complete loss of such investment.
7. If the Transferee proposes that the Transferred Certificates be
registered in the name of a nominee, such nominee has completed the Nominee
Acknowledgment below.
Very truly yours,
-----------------------------------------------
(Transferee)
By:
--------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Date:
---------------------------------------
Nominee Acknowledgment
The undersigned hereby acknowledges and agrees that as to the
Transferred Certificates being registered in its name, the sole beneficial owner
thereof is and shall be the Transferee identified above, for whom the
undersigned is acting as nominee.
---------------------------------------------
(Nominee)
By:
------------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
B-3-3
<PAGE>
EXHIBIT C-1
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
PURSUANT TO SECTION 5.02(d)(i)(B)
STATE OF )
) participation.:
COUNTY OF )
_____________________, being first duly sworn, deposes and says that:
1. He/She is a _________________ of ____________________ (the
prospective transferee (the "Transferee") of a Salomon Brothers Mortgage
Securities VII, Inc., Class [R-I] [R-II] [R-III] Commercial Mortgage
Pass-Through Certificate, Series 1999-C1, evidencing a ___% Percentage Interest
in the Class to which it belongs (the "Residual Certificate")), a
_________________ duly organized and validly existing under the laws of [the
State of ___________] [the United States], on behalf of which he/she makes this
affidavit. Capitalized terms used but not defined herein have the respective
meanings assigned thereto in the Pooling and Servicing Agreement pursuant to
which the Residual Certificate was issued (the "Pooling Agreement").
2. The Transferee (i) is [and, as of [date of transfer], will be] a
"Permitted Transferee" and will endeavor to remain a "Permitted Transferee" for
so long as it holds the Residual Certificate, and (ii) is acquiring the Residual
Certificate for its own account or for the account of another prospective
transferee from which it has received an affidavit in substantially the same
form as this affidavit. A "Permitted Transferee" is any person other than a
"disqualified organization" or a "non-United States person", but in addition, if
such person is classified as a partnership under the Code, such person can only
be a "Permitted Transferee" if all of its beneficial owners are "United States
persons". (For this purpose: (i) a "disqualified organization" means the United
States or a possession thereof, any state or political subdivision thereof, any
agency or instrumentality of any of the foregoing (other than an
instrumentality, all of the activities of which are subject to tax and, except
for the Federal Home Loan Mortgage Corporation, a majority of whose board of
directors is not selected by any such governmental entity) or any foreign
government, international organization or any agency or instrumentality of such
foreign government or organization, any rural electric or telephone cooperative,
or any organization (other than certain farmers' cooperatives) that is generally
exempt from federal income tax (unless such organization is subject to the tax
on unrelated business taxable income); and (ii) a "non-United States person" is
any person other than a "United States person". A "United States person" is a
citizen or resident of the United States, a corporation, partnership or other
entity created or organized in, or under the laws of, the United States or any
political subdivision thereof, or an estate whose income from sources without
the United States is includable in gross income for United States federal income
tax purposes regardless of its connection with the conduct of a trade or
business within the United States, or a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more United States persons have the authority to control all
substantial decisions of the trust, all within the meaning of Section
7701(a)(30) of the Code.)
3. The Transferee is aware (i) of the tax that would be imposed on
transfers of the Residual Certificate to "disqualified organizations" under the
Internal Revenue Code of 1986, as amended, that applies to all transfers of the
Residual Certificate after March 31, 1988; (ii) that such tax would be on the
transferor, or, if such transfer is through an agent (which person includes a
broker, nominee or middleman) for a "disqualified organization", on the agent;
(iii) that the person otherwise liable for the tax shall be relieved of
liability for the tax if the transferee furnishes to such person an affidavit
that the transferee is not a
C-1-1
<PAGE>
"disqualified organization" and, at the time of transfer, such person does not
have actual knowledge that the affidavit is false; and (iv) that the Residual
Certificate may be a "non-economic residual interest" within the meaning of
Treasury Regulation 'SS'1.860E-1(c) and that the transferor of a "non-economic
residual interest" will remain liable for any taxes due with respect to the
income on such residual interest, unless no significant purpose of the transfer
is to enable the transferor to impede the assessment or collection of tax.
4. The Transferee is aware of the tax imposed on a "pass-through entity"
holding the Residual Certificate if at any time during the taxable year of the
pass-through entity a "disqualified organization" is the record holder of an
interest in such entity. (For this purpose, a "pass-through entity" includes a
regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives.)
5. The Transferee is aware that the Certificate Registrar will not
register any transfer of the Residual Certificate by the Transferee unless the
Transferee's transferee, or such transferee's agent, delivers to the Certificate
Registrar, among other things, an affidavit and agreement in substantially the
same form as this affidavit and agreement. The Transferee expressly agrees that
it will not consummate any such transfer if it knows or believes that any
representation contained in such affidavit and agreement is false. In addition,
the Transferee is aware the Certificate Registrar will not register any transfer
of the Residual Interest Certificates to any entity classified as a partnership
under the Code unless at the time of transfer, all of the beneficial owners of
such entity are "United States persons".
6. The Transferee consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Residual Certificate will only be
owned, directly or indirectly, by a Permitted Transferee.
7. The Transferee's taxpayer identification number is _________________.
8. The Transferee has reviewed the provisions of Section 5.02(d) of the
Pooling Agreement, a description of which provisions is set forth in the
Residual Certificate (in particular, clause (ii)(A) of Section 5.02(d) which
authorizes the Trustee to deliver payments on the Residual Certificate to a
person other than the Transferee and clause (ii)(B) of Section 5.02(d) which
authorizes the Trustee to negotiate a mandatory disposition of the Residual
Certificate, in either case, in the event that the Transferee holds such
Residual Certificate in violation of Section 5.02(d)); and the Transferee
expressly agrees to be bound by and to comply with such provisions.
9. No purpose of the Transferee relating to its purchase or any sale of
the Residual Certificate is or will be to impede the assessment or collection of
any tax.
10. The Transferee hereby represents to and for the benefit of the
transferor that the Transferee intends to pay any taxes associated with holding
the Residual Certificate as they become due, fully understanding that it may
incur tax liabilities in excess of any cash flows generated by the Residual
Certificate.
11. The Transferee will, in connection with any transfer that it makes
of the Residual Certificate, deliver to the Certificate Registrar a
representation letter substantially in the form of Exhibit C-2 to the Pooling
Agreement in which it will represent and warrant, among other things, that it is
not transferring the Residual Certificate to impede the assessment or collection
of any tax and that it has at the time of such transfer conducted a reasonable
investigation of the financial condition of the proposed transferee as
contemplated by Treasury Regulation 'SS'1.860E-1(c)(4)(i) and has satisfied the
requirements of such provision.
C-1-2
<PAGE>
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its ___________________ and its corporate seal to be hereunto attached, attested
by its [Assistant] Secretary, this ___ day of _________, _______.
__________________________________
(Transferee)
By:_______________________________
Name:
Title:
[Corporate Seal]
ATTEST:
______________________________
[Assistant] Secretary
Personally appeared before me the above-named _____________________,
known or proved to me to be the same person who executed the foregoing
instrument and to be the _____________________ of the Transferee, and
acknowledged to me that he/she executed the same as his/her free act and deed
and the free act and deed of the Transferee
Subscribed and sworn before me this ___ day of ______________, _______.
_________________________
NOTARY PUBLIC
COUNTY OF ___________
STATE OF _____________
My Commission expires the _________
C-1-3
<PAGE>
EXHIBIT C-2
FORM OF TRANSFEROR CERTIFICATE
PURSUANT TO SECTION 5.02(d)(i)(D)
[date]
The Chase Manhattan Bank
450 West 33rd Street, 14th Floor
New York, New York 10001-2697
Attention: Capital Markets Fiduciary Services (CMBS)
Salomon Brothers Mortgage Securities VII, Inc.,
Series 1999-C1
Re: Salomon Brothers Mortgage Securities VII, Inc., Commercial
Mortgage Pass-Through Certificates, Series 1999-C1, Class [R-I]
[R-II] [R-III], evidencing a ____% Percentage Interest in the Class
to which it belongs
Dear Sirs:
This letter is delivered to you in connection with the transfer by
_____________________ (the "Transferor") to _____________________ (the
"Transferee") of the captioned Class [R-I] [R-II] [R-III] Certificate (the
"Residual Certificate"), pursuant to Section 5.02 of the Pooling and Servicing
Agreement (the "Pooling Agreement"), dated as of August 1, 1999, among Salomon
Brothers Securities VII, Inc., as Depositor, Salomon Brothers Realty Corp. and
Llama Capital Mortgage Company Limited Partnership, as Mortgage Loan Sellers,
GMAC Commercial Mortgage Corporation, as Master Servicer, BNY Asset Solutions
LLC, as Special Servicer, and The Chase Manhattan Bank, as Trustee. All terms
used herein and not otherwise defined shall have the respective meanings set
forth in the Pooling Agreement. The Transferor hereby represents and warrants to
you, as Certificate Registrar, that:
1. No purpose of the Transferor relating to the transfer of the Residual
Certificate by the Transferor to the Transferee is or will be to impede the
assessment or collection of any tax.
2. The Transferor understands that the Transferee has delivered to you a
Transfer Affidavit and Agreement in the form attached to the Pooling Agreement
as Exhibit C-1. The Transferor does not know or believe that any representation
contained therein is false.
3. The Transferor has at the time of this transfer conducted a
reasonable investigation of the financial condition of the Transferee as
contemplated by Treasury Regulation 'SS'1.860E-1(c)(4)(i) and, as a result of
that investigation, the Transferor has determined that the Transferee has
historically paid its debts as they became due and has found no significant
evidence to indicate that the Transferee will not continue to pay its debts as
they become due in the future. The Transferor understands that the transfer of
the Residual Certificate may not be respected for United States income tax
purposes (and the Transferor may continue to be liable for United States income
taxes associated therewith) unless the Transferor has conducted such an
investigation.
Very truly yours,
C-2-1
<PAGE>
-----------------------------------
(Transferor)
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
C-2-2
<PAGE>
EXHIBIT D
FORM OF TRANSFEREE CERTIFICATE
IN CONNECTION WITH ERISA
(DEFINITIVE CERTIFICATES)
[date]
The Chase Manhattan Bank
450 West 33rd Street, 14th Floor
New York, New York 10001-2697
Attention: Capital Markets Fiduciary Services (CMBS)
Salomon Brothers Mortgage Securities VII, Inc.,
Series 1999-C1
Re: Salomon Brothers Mortgage Securities VII, Inc., Commercial
Mortgage Pass-Through Certificates, Series 1999-C1, Class _____,
[having an initial aggregate Certificate Principal Balance as of
August 20, 1999 (the "Closing Date") of $__________ ][representing
a ____% Percentage Interest in the related Class.]
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
__________________________ (the "Transferor") to
____________________________________ (the "Transferee") of the captioned
Certificates (the "Transferred Certificates"), which were issued pursuant to the
Pooling and Servicing Agreement (the "Pooling Agreement"), dated as of August 1,
1999, among Salomon Brothers Mortgage Securities VII, Inc., as Depositor,
Salomon Brothers Realty Corp. and Llama Capital Mortgage Company Limited
Partnership, as Mortgage Loan Sellers, GMAC Commercial Mortgage Corporation, as
Master Servicer, BNY Asset Solutions LLC, as Special Servicer, and The Chase
Manhattan Bank, as Trustee. All capitalized terms used but not otherwise defined
herein shall have the respective meanings set forth in the Pooling Agreement.
The Transferee hereby certifies, represents and warrants to you as Certificate
Registrar, as follows (check the applicable paragraph):
___ The Transferee is neither (A) an employee benefit plan or other
retirement arrangement, including an individual retirement account or
annuity, a Keogh plan or a collective investment fund or separate
account in which such plans, accounts or arrangements are invested, that
is subject to ERISA or the Code (each, a "Plan"), nor (B) a Person who
is directly or indirectly purchasing the Transferred Certificates on
behalf of, as named fiduciary of, as trustee of, or with assets of a
Plan; or
___ The Transferee is using funds from an insurance company general account
to acquire the Transferred Certificates, however, the purchase and
holding of such Certificates by such Person is exempt from the
prohibited transaction provisions of Section 406 of ERISA and Section
4975 of the Code under Sections I and III of Prohibited Transaction
Class Exemption 95-60; or
___ As otherwise set forth in the certification of facts and opinion of
counsel attached hereto as Annex A, the purchase and holding of the
Transferred Certificates by the Transferee will not result in a
violation of Section 406 of ERISA or Section 4975 of the Code, will not
result in the imposition of an excise tax under Section 4975 of the Code
and will not subject the Trustee, the Master Servicer or the Special
Servicer to any obligation in addition to those undertaken in the
Pooling Agreement.
D-1
<PAGE>
Very truly yours,
-------------------------------------
(Transferee)
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
D-2
<PAGE>
EXHIBIT E
REQUEST FOR RELEASE
[date]
The Chase Manhattan Bank
450 West 33rd Street, 14th Floor
New York, New York 10001-2697
Attention: Capital Markets Fiduciary Services (CMBS)
Salomon Brothers Mortgage Securities VII, Inc.,
Series 1999-C1
In connection with the administration of the Mortgage Files held by or
on behalf of you as Trustee under that certain Pooling and Servicing Agreement
dated as of August 1, 1999, among Salomon Brothers Mortgage Securities VII,
Inc., as Depositor, Salomon Brothers Realty Corp. and Llama Capital Mortgage
Company Limited Partnership, as Mortgage Loan Sellers, GMAC Commercial Mortgage
Corporation, as Master Servicer, BNY Asset Solutions LLC, as Special Servicer,
and The Chase Manhattan Bank, as Trustee, the undersigned hereby requests a
release of the Mortgage File (or the portion thereof specified below) held by or
on behalf of you as Trustee with respect to the following described Mortgage
Loan for the reason indicated below.
Mortgagor's Name:
---------------------------------------------
Address:
------------------------------------------------------
Loan No.:
-----------------------------------------------------
If only particular documents in the Mortgage File are requested, please specify
which:__________________________________________________________________________
Reason for requesting file (or portion thereof):
______ 1. Mortgage Loan paid in full. The undersigned hereby certifies
that all amounts received in connection with the Mortgage Loan
that are required to be credited to the Collection Account
pursuant to the Pooling Agreement, have been or will be so
credited.
______ 2. The Mortgage Loan is being foreclosed.
______ 3. Other. (Describe)
E-1
<PAGE>
The undersigned acknowledges that the above Mortgage File (or requested
portion thereof) will be held by the undersigned in accordance with the
provisions of the Pooling Agreement and will be returned to you or your designee
within ten (10) days of our receipt thereof, unless the Mortgage Loan has been
paid in full, in which case the Mortgage File (or such portion thereof) will be
retained by us permanently, or unless the Mortgage Loan is being foreclosed, in
which case the Mortgage File (or such portion thereof) will be returned when no
longer required by us for such purpose.
Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Pooling Agreement.
[MASTER SERVICER] [SPECIAL SERVICER]
By:
---------------------------------------
Name:
----------------------------------
Title:
E-2
<PAGE>
EXHIBIT F
FORM OF DISTRIBUTION DATE STATEMENT
F-1
<PAGE>
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
STATEMENT TO CERTIFICATEHOLDERS
CONTACT INFORMATION
<TABLE>
<CAPTION>
FUNCTION NAMES / ADDRESSES
- -------- -----------------
<S> <C>
Depositor
Salomon Brothers Mortgage Company VII, Inc.
388 Greenwich Street
New York, NY 10013
(212) 816-8087
Master Servicer
GMAC Commercial Mortgage Corporation
650 Dresher Road P.O. Box 1015
Horsham, PA 19044
Special Servicer
BNY Asset Solutions LLC
599 Lexington Avenue - 36th Floor
New York, NY 10022
Trustee
Chase Manhattan Bank
450 W. 33rd Street 14th Floor
New York, NY 10001
(212) 946-7999
Relationship Manager Tom Provenzano
(212) 946-3246
Email: [email protected]
</TABLE>
Reports Available on the World Wide Web
address: www.chase.com/sfa
TABLE OF CONTENTS
<TABLE>
<CAPTION>
STATEMENT SECTIONS PAGE(s)
- ------------------ -------
<S> <C>
Certificate Distribution Detail 2 - 6
Certificate Ratings Detail 7
Mortgage Loan Characteristics 8 - 10
Loan Status Detail 11
Property History Detail 12
Historical Delinquency Detail 13
Advance Summary 14
Delinquency Loan Detail 15
Specially Serviced Loans 16
Principal Prepayment Detail 17
Modified Loan Detail 18
Realized Loss Detail 19
</TABLE>
The information contained herein has been obtained from sources believed to be
reliable, but The Chase Manhattan Bank does not warrant its completeness or
accuracy. All cashflows, prices, and yields herein were compiled by Chase from
sources associated with the transactions responsible for providing such
information for purposes of computing cashflows, prices and yields. Chase makes
no representations as to the appropriateness for any person of any investment in
the securities.
[CHASE LOGO] 'c' 1999, CHASE MANHATTAN BANK
<PAGE>
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
STATEMENT TO CERTIFICATEHOLDERS
Certificate Distribution Detail
Distribution in Dollars
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Class Cusip # Original Beginning Interest Principal Total Realized Ending Principal
Face Value Principal Balance Losses/Trust Balance
Expenses
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Class Cusip # Original Beginning Interest Principal Total Realized Ending Principal
Face Value Principal Balance Losses/Trust Balance
Expenses
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
[CHASE LOGO] 'c' 1999, CHASE MANHATTAN BANK
<PAGE>
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
STATEMENT TO CERTIFICATEHOLDERS
Certificate Distribution Detail
Factor Information per $1,000 of Original Face
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Class Cusip # Beginning Principal Interest Principal Total Ending Principal Current Pass Thru
Factor Factor Rate
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Class Cusip # Beginning Principal Interest Principal Total Ending Principal Current Pass Thru
Factor Factor Rate
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
[CHASE LOGO] 'c' 1999, CHASE MANHATTAN BANK
<PAGE>
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
STATEMENT TO CERTIFICATEHOLDERS
Certificate Distribution Detail
Sec. 4.02 (a)(iii) Aggregate Principal and Interest Advances
Additional Trust Fund Expense
Realized Loss
Sec. 4.02 (a)(iv) Servicing Compensation
Sec. 4.02 (a)(v) Aggregate Stated Principal Balance
<TABLE>
<CAPTION>
- ---------------------------------------------------
Description Beginning Balance Ending Balance
- ---------------------------------------------------
<S> <C> <C>
- ---------------------------------------------------
</TABLE>
Sec 4.02 (a)(vi) Number of Mortage Loans Outstanding for Related Due Period
Aggregate Principal Balance of Mortgage Loans Outstanding
Loans Delinquent
<TABLE>
<CAPTION>
- --------------------------------------------------------
Period Number Aggregated Percentage
Principal Balance
- --------------------------------------------------------
<S> <C> <C> <C>
- --------------------------------------------------------
</TABLE>
Sec 4.02 (a)(viii) Aggregate Appraisal Value Of REO Properties
Available Distribution Amount
Principal Distribution Amount
[CHASE LOGO] 'c' 1999, CHASE MANHATTAN BANK
<PAGE>
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
STATEMENT TO CERTIFICATEHOLDERS
Certificate Distribution Detail
Sec 4.02 (a)(x) Accrued Certificate Interest
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
Class Accrued Certificate PrePayment Certificate
Interest Interest Shortfall Distributable
Interest
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
- ----------------------------------------------------------------------------
</TABLE>
Sec. 4.02 (a)(xi) Prepayment Premium /Yield Maintenance Charges
<TABLE>
<CAPTION>
- -----------------------
Class PP/YMC
- -----------------------
<S> <C>
- -----------------------
</TABLE>
Sec 4.02 (a)(xvi) Appraisal Reduction Amounts
<TABLE>
<CAPTION>
- ---------------------------------------------
Loan Number Appraisal Appraisal
Reductions Reductions
Effected Amounts
- ---------------------------------------------
<S> <C> <C>
- ---------------------------------------------
</TABLE>
Sec 4.02 (a)(xvii) Number of Extended or Modified Mortgage Loans
Aggregate Stated Principal Balance of Extended or
Modified Mortgage Loans
[CHASE LOGO] 'c' 1999, CHASE MANHATTAN BANK
<PAGE>
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
STATEMENT TO CERTIFICATEHOLDERS
Certificate Distribution Detail
Sec 4.02 (a)(xviii) Class Unpaid Interest Shortfall
<TABLE>
<CAPTION>
- -----------------------------------------------------------
Class Current Unpaid Cumulative
Interest Shortfall Unpaid Interest
Shortfall
- -----------------------------------------------------------
<S> <C> <C>
- -----------------------------------------------------------
</TABLE>
Sec 4.02 (a)(xx) Distribution to Residual Certificates
Name/Address of Controlling Class Representative
[CHASE LOGO] 'c' 1999, CHASE MANHATTAN BANK
<PAGE>
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
STATEMENT TO CERTIFICATEHOLDERS
Certificate Ratings Detail
<TABLE>
<CAPTION>
Original Ratings Current Ratings (1)
Class CUSIP --------------------------------------------------------------------------------------------------
DCR Fitch Moody's S & P DCR Fitch Moody's S & P
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NR - Designates that the class was not rated by the above agency at the time
of original issuance.
N/A - Not applicable
(1) The information contained herein has been received directly from the
applicable rating agency within 30 days of this report. It is possible that the
current ratings may have changed before the release of this report, hence, Chase
recommends contacting the rating agency listed below directly for more recent
information and further details supporting the rating issued for each class.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
DUFF & PHELPS CREDIT RATING CO. FITCH IBCA MOODY'S INVESTORS SERVICE STANDARD & POOR'S RATING SERVICES
17 States Street, 12th floor One State Street Plaza 99 Church Street Commercial Mortgage Surveillance
New York, NY 10004 New York, NY 10004 New York, New York 10007 55 Water Street, Fl. 41
Ph: 212-908-0228 Ph: 212-908-0500 Ph: 212-553-0300 New York, NY 10041-0003
Attn: Joe Franzetti Fax: 212-635-0295 Ph: 212-438-2000
Attn: Huxley Sommerville Fax: 212-438-2664
Attn: Charles Calhoun
</TABLE>
[CHASE LOGO] 'c' 1999, CHASE MANHATTAN BANK
<PAGE>
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
STATEMENT TO CERTIFICATEHOLDERS
Mortgage Loan Characteristics
Stratification by Current Note Rate
<TABLE>
<CAPTION>
Weighted Average
# of Principal Balance % of Agg. --------------------------
Current Note Rate Loans ($) Prin.Bal. WAM Note Rate(%) DSCR
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
7.50000% or Less 0 0.00 0.00 0 0.000000 0.000000
7.51000% to 7.75000% 0 0.00 0.00 0 0.000000 0.000000
7.76000% to 8.00000% 0 0.00 0.00 0 0.000000 0.000000
8.01000% to 8.25000% 0 0.00 0.00 0 0.000000 0.000000
8.26000% to 8.50000% 0 0.00 0.00 0 0.000000 0.000000
8.51000% to 8.75000% 0 0.00 0.00 0 0.000000 0.000000
8.76000% to 9.00000% 0 0.00 0.00 0 0.000000 0.000000
9.01000% to 9.25000% 0 0.00 0.00 0 0.000000 0.000000
9.26000% to 9.50000% 0 0.00 0.00 0 0.000000 0.000000
9.51000% to 9.75000% 0 0.00 0.00 0 0.000000 0.000000
9.76000% to 10.00000% 0 0.00 0.00 0 0.000000 0.000000
10.01000% to 11.01000% 0 0.00 0.00 0 0.000000 0.000000
---- ---- ---- ---- -------- --------
Totals 0 0.00 0.00 0 0.000000 0.000000
==== ==== ==== ==== ======== ========
</TABLE>
Stratification by Remaining Stated Term (Balloon Loans Only)
<TABLE>
<CAPTION>
Weighted Average
# of Principal Balance % of Agg. -------------------------
Remaining Stated Term Loans ($) Prin.Bal. WAM Note Rate(%) DSCR
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
70 months or Less 0 0.00 0.00 0 0.000000 0.000000
71 months to 90 months 0 0.00 0.00 0 0.000000 0.000000
91 months to 110 months 0 0.00 0.00 0 0.000000 0.000000
111 months to 115 months 0 0.00 0.00 0 0.000000 0.000000
116 months to 120 months 0 0.00 0.00 0 0.000000 0.000000
121 months to 200 months 0 0.00 0.00 0 0.000000 0.000000
201 months to 274 months 0 0.00 0.00 0 0.000000 0.000000
---- ---- ---- ---- -------- --------
Totals 0 0.00 0.00 0 0.000000 0.000000
==== ==== ==== ==== ======== ========
</TABLE>
Stratification by Property Type
<TABLE>
<CAPTION>
Weighted Average
# of Principal Balance % of Agg. --------------------------
Property Type Loans ($) Prin.Bal. WAM Note Rate(%) DSCR
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Office 0 0.00 0.00 0 0.000000 0.000000
Industrial 0 0.00 0.00 0 0.000000 0.000000
Multi-Family 0 0.00 0.00 0 0.000000 0.000000
Retail, Anchored 0 0.00 0.00 0 0.000000 0.000000
Retail, Unanchored 0 0.00 0.00 0 0.000000 0.000000
Ministorage 0 0.00 0.00 0 0.000000 0.000000
Multiple 0 0.00 0.00 0 0.000000 0.000000
---- ---- ---- ---- -------- --------
Totals 0 0.00 0.00 0 0.000000 0.000000
==== ==== ==== ==== ======== ========
</TABLE>
Stratification by Remaining Stated Term (Fully Amortizing Loans Only)
<TABLE>
<CAPTION>
Weighted Average
# of Principal Balance % of Agg. --------------------------
Remaining Stated Term Loans ($) Prin.Bal. WAM Note Rate(%) DSCR
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
70 months or Less 0 0.00 0.00 0 0.000000 0.000000
71 months to 90 months 0 0.00 0.00 0 0.000000 0.000000
91 months to 110 months 0 0.00 0.00 0 0.000000 0.000000
111 months to 115 months 0 0.00 0.00 0 0.000000 0.000000
116 months to 120 months 0 0.00 0.00 0 0.000000 0.000000
121 months to 200 months 0 0.00 0.00 0 0.000000 0.000000
201 months to 0 months 0 0.00 0.00 0 0.000000 0.000000
---- ---- ---- ---- -------- --------
Totals 0 0.00 0.00 0 0.000000 0.000000
==== ==== ==== ==== ======== ========
</TABLE>
[CHASE LOGO] 'c' 1999, CHASE MANHATTAN BANK
<PAGE>
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
STATEMENT TO CERTIFICATEHOLDERS
Mortgage Loan Characteristics
Stratification by Debt Service Coverage Ratio
<TABLE>
<CAPTION>
Weighted Average
# of Principal Balance % of Agg. ---------------------------
Debt Service Coverage Ratio Loans ($) Prin.Bal. WAM Note Rate(%) DSCR
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1.000000 or Less 0 0.00 0.00 0 0.000000 0.000000
1.010000 to 1.200000 0 0.00 0.00 0 0.000000 0.000000
1.210000 to 1.240000 0 0.00 0.00 0 0.000000 0.000000
1.250000 to 1.300000 0 0.00 0.00 0 0.000000 0.000000
1.310000 to 1.400000 0 0.00 0.00 0 0.000000 0.000000
1.410000 to 1.500000 0 0.00 0.00 0 0.000000 0.000000
1.510000 to 1.600000 0 0.00 0.00 0 0.000000 0.000000
1.610000 to 1.700000 0 0.00 0.00 0 0.000000 0.000000
1.710000 to 1.800000 0 0.00 0.00 0 0.000000 0.000000
1.810000 to 1.900000 0 0.00 0.00 0 0.000000 0.000000
1.910000 to 2.000000 0 0.00 0.00 0 0.000000 0.000000
2.010000 to 2.300000 0 0.00 0.00 0 0.000000 0.000000
2.310000 to 2.400000 0 0.00 0.00 0 0.000000 0.000000
---- ---- ---- ---- -------- --------
Totals 0 0.00 0.00 0 0.000000 0.000000
==== ==== ==== ==== ======== ========
</TABLE>
Stratification by Seasoning
<TABLE>
<CAPTION>
Weighted Average
# of Principal Balance % of Agg. -------------------------
Seasoning Loans ($) Prin.Bal. WAM Note Rate(%) DSCR
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
12 months or Less 0 0.00 0.00 0 0.000000 0.000000
13 months to 24 months 0 0.00 0.00 0 0.000000 0.000000
25 months to 36 months 0 0.00 0.00 0 0.000000 0.000000
37 months to 48 months 0 0.00 0.00 0 0.000000 0.000000
49 months to 60 months 0 0.00 0.00 0 0.000000 0.000000
61 months to 72 months 0 0.00 0.00 0 0.000000 0.000000
73 months to 84 months 0 0.00 0.00 0 0.000000 0.000000
85 months to 96 months 0 0.00 0.00 0 0.000000 0.000000
97 months to 108 months 0 0.00 0.00 0 0.000000 0.000000
---- ---- ---- ---- -------- --------
Totals 0 0.00 0.00 0 0.000000 0.000000
==== ==== ==== ==== ======== ========
</TABLE>
[CHASE LOGO] 'c' 1999, CHASE MANHATTAN BANK
<PAGE>
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
STATEMENT TO CERTIFICATEHOLDERS
Mortgage Loan Characteristics
Stratification by Ending Scheduled Balance Amount
<TABLE>
<CAPTION>
Weighted Average
# of Principal Balance ---------------------------
Ending Scheduled Balance Amount Loans ($) % of Agg. WAM Note Rate(%) DSCR
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$1,000,000 or Less 0 0.00 0.00 0 0.000000 0.000000
$1,000,001 to $2,000,000 0 0.00 0.00 0 0.000000 0.000000
$2,000,001 to $4,000,000 0 0.00 0.00 0 0.000000 0.000000
$4,000,001 to $6,000,000 0 0.00 0.00 0 0.000000 0.000000
$6,000,001 to $8,000,000 0 0.00 0.00 0 0.000000 0.000000
$8,000,001 to $10,000,000 0 0.00 0.00 0 0.000000 0.000000
$10,000,001 to $15,000,000 0 0.00 0.00 0 0.000000 0.000000
$15,000,001 to $20,000,000 0 0.00 0.00 0 0.000000 0.000000
---- ---- ---- ---- -------- --------
Totals 0 0.00 0.00 0 0.000000 0.000000
==== ==== ==== ==== ======== ========
Average Principal Balance: 0.00
</TABLE>
Stratification by State Code
<TABLE>
<CAPTION>
Weighted Average
# of Principal Balance % of Agg. ---------------------------
State Code Loans ($) Prin.Bal. WAM Note Rate(%) DSCR
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ARIZONA 0 0.00 0.00 0 0.000000 0.000000
CALIFORNIA 0 0.00 0.00 0 0.000000 0.000000
COLORADO 0 0.00 0.00 0 0.000000 0.000000
CONNECTICUT 0 0.00 0.00 0 0.000000 0.000000
FLORIDA 0 0.00 0.00 0 0.000000 0.000000
GEORGIA 0 0.00 0.00 0 0.000000 0.000000
ILLINOIS 0 0.00 0.00 0 0.000000 0.000000
INDIANA 0 0.00 0.00 0 0.000000 0.000000
MASSACHUSETTS 0 0.00 0.00 0 0.000000 0.000000
MARYLAND 0 0.00 0.00 0 0.000000 0.000000
MICHIGAN 0 0.00 0.00 0 0.000000 0.000000
MISSOURI 0 0.00 0.00 0 0.000000 0.000000
NEW JERSEY 0 0.00 0.00 0 0.000000 0.000000
NEW YORK 0 0.00 0.00 0 0.000000 0.000000
OHIO 0 0.00 0.00 0 0.000000 0.000000
OREGON 0 0.00 0.00 0 0.000000 0.000000
PENNSYLVANIA 0 0.00 0.00 0 0.000000 0.000000
SOUTH CAROLINA 0 0.00 0.00 0 0.000000 0.000000
TENNESSEE 0 0.00 0.00 0 0.000000 0.000000
TEXAS 0 0.00 0.00 0 0.000000 0.000000
VIRGINIA 0 0.00 0.00 0 0.000000 0.000000
---- ---- ---- ---- -------- --------
Totals 0 0.00 0.00 0 0.000000 0.000000
==== ==== ==== ==== ======== ========
</TABLE>
Debt Coverage Service Ratios are calculated as described in the prospectus,
values are updated periodically as new NOI figures become available from
borrowers on an asset level. The makes no representation as to the accuracy
of the data provided by the borrower for this calculation
[CHASE LOGO] 'c' 1999, CHASE MANHATTAN BANK
<PAGE>
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
STATEMENT TO CERTIFICATEHOLDERS
Loan Status Detail
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Loan Offering Property City State Scheduled Scheduled Gross Maturity Neg Beginning Ending
Number Memo Type Principal Interest Coupon Date Amt Scheduled Scheduled
Cross (I) Amount Amount Flag Balance Balance
Reference
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EXAMPLE N/A N/A N/A N/A $0.00 $0.00 .00000 N/A N/A $0.00 $0.00
<CAPTION>
- -------------------------------------------------------------------
Loan Paid Appraisal Appraisal Has Loan Loan
Number Through Reduction Reduction Ever Been Status
Date Date Amount Specially Code
Serviced? (II)
(Y/N)
- -------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EXAMPLE N/A N/A $0.00 N
</TABLE>
(I) Property Type Code :
<TABLE>
<S> <C> <C>
1. Single Family 6. Non-Exempt 12. Hotel
2. Multi-Family 7. Church 13. Industrial
3. Condo, Co-op or TH 8. School,HCF,WF 14. Industrial/Flex
4. Mobile Home 9. Retail 15. Multiple Properties
5. Plan Unit Development 10. Office 16. MiniStorage
11. Retail/Office 17. Warehouse
(II) Loan Status Code:
1. Specially Serviced 6. Discounted Payoff
2. Foreclosure 7. Foreclosure Sale
3. Bankruptcy 8. Bankruptcy Sale
4. REO 9. REO Disposal
5. Prepayment in Full 10. Modification/Workout
11. Rehabilitation
</TABLE>
[CHASE LOGO] 'c' 1999, CHASE MANHATTAN BANK
<PAGE>
SALOMON BROTHERS MORTGAGE SECURITIES VIII, INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
STATEMENT TO CERTIFICATEHOLDERS
Property History Detail
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Offering Memo Data of Last No. Months Annual Estimate based on
Loan Number Cross Reference Property Name --------------------------- Revenue Current Quarter Prior Full Year
Annualized ----------------------------------------------
Inspection Financial Stmt NOI DSCR Occupancy NOI DSCR Occupancy
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
No Property History reported this period
[CHASE LOGO] 'c' 1999, CHASE MANHATTAN BANK
<PAGE>
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
STATEMENT TO CERTIFICATEHOLDERS
Historical Delinquency Detail
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Delinquencies Prepayments Rates & Maturities
Distrib. ---------------------------------------------------------------------------------------------------------------------
Date 1 Month 2 Months 3 Months(+) Foreclosures REO Modifications Curtailment Payoff Next Weighted Avg.
---------------------------------------------------------------------------------------------------------------------- WAM
# Balance # Balance # Balance # Balance # Balance # Balance # Balance # Balance Coupon Remit
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
*** Note: Foreclosures and REO Totals are excluded from the Delinquent
Aging Categories
[CHASE LOGO] 'c' 1999, CHASE MANHATTAN BANK
<PAGE>
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
STATEMENT TO CERTIFICATEHOLDERS
Advance Summary
Advances
<TABLE>
<S> <C>
Master Servicer P&I Advances Made 0.00
Master Servicer Unreimbursed P&I Advances Outstanding 0.00
Interest Accrued & Payable to Master Servicer in Respect of 0.00
Advances Made
Servicing Fee Breakdown
Current Period Accrued Servicing Fees 0.00
Less Delinquent Servicing Fees 0.00
Plus Additional Servicing Fees 0.00
Less Reductions to Servicing Fees 0.00
Plus Servicing Fees for Delinquent Payments Received 0.00
Plus Adjustments for Prior Servicing Calculation 0.00
Total Servicing Fees Collected 0.00
</TABLE>
Allocation of Interest Shortfalls, Losses & Expenses
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Class Accrued Prepayment Beginning Interest Expenses Total Certificate Ending
Certificate Interest Unpaid Loss Interest Interest Unpaid
Interest Shortfall Interest Payable Distributable Interest
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
Totals
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
[CHASE LOGO] 'c' 1999, CHASE MANHATTAN BANK
<PAGE>
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
STATEMENT TO CERTIFICATEHOLDERS
Delinquency Loan Detail
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Loan Number Offering # of Months Paid Through Current Loan Balance Current Outstanding P&I
Memo Cross Delinquent Date P&I Advances **
Reference Advances
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
No Delinquent Loans reported this period
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
Loan Number Advance Loan Special Foreclosure Current Outstanding Outstanding REO
Description Status Servicer Date Property Property Property Date
Start Date Protection Protection Protection
(I) (II) Advances Advances Date
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
No Delinquent Loans reported this period
</TABLE>
<TABLE>
<S> <C>
(I) Advance Description: A. In grace period
B. Late but < 1 month
1. 1 month delinquent
2. 2 months delinquent
3. 3+ months delinquent
(II) Loan Status Code:
1. Specially Serviced 6. Discounted Payoff
2. Foreclosure 7. Foreclosure Sale
3. Bankruptcy 8. Bankruptcy Sale
4. REO 9. REO Disposal
5. Prepayment in Full 10. Modification/Workout
11. Rehabilitation
** Outstanding P&I advances include current period.
</TABLE>
[CHASE LOGO] 'c' 1999, CHASE MANHATTAN BANK
<PAGE>
SALOMON BROTHERS MORTGAGE SECURITES VII, INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
STATEMENT TO CERTIFICATEHOLDERS
Specially Serviced Loans
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Distribution Loan Offering Date of Transfer Spec Current Prop St Interest Net
Date Number Memo Balance to Specially Serv Scheduled Type Rate Operating
Cross Serviced Code Balance Income
Reference (II) (I)
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
No Specially Serviced Loans reported this period
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------------------------
Distribution NOI Debt Maturity Rem Inspection Appraisal Appraisal
Date Date Service Date Term Date Date Value
Coverage
Ratio
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
No Specially Serviced Loans reported this period
- --------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C>
(I) Property Type Code:
6. Non-Exempt 12. Hotel
1. Single Family 7. Church 13. Industrial
2. Multi-Family 8. School,HCF,WF 14. Industrial/Flex
3. Condo, Co-op or TH 9. Retail 15. Multiple
4. Mobile Home 10. Office Properties
5. Plan Unit Development 11. Retail/Office 16. MiniStorage
17. Warehouse
(II) Special Service Code:
(1) Request to waive prepayment (5) In Foreclosure
penalty (6) Now REO
(2) Payment default (7) Paid Off
(3) Request to modify or workout (8) Returned to Master
(4) Borrower Bankruptcy Servicer
</TABLE>
[CHASE LOGO] 'c' 1999, CHASE MANHATTAN BANK
<PAGE>
SALOMON BROTHERS MORTGAGE SECURITES VII, INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
STATEMENT TO CERTIFICATEHOLDERS
Principal Prepayment Detail
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Loan Offering Curtailment Amount Payoff Net Net Mortgage
Number Memo Amount Liquidation Insurance Repurchase
Cross Proceeds Proceeds Price
Reference
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
No Principal Prepayment reported this period
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
[CHASE LOGO] 'c' 1999, CHASE MANHATTAN BANK
<PAGE>
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
STATEMENT TO CERTIFICATEHOLDERS
Modified Loan Detail
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Loan Offering Modification Modification Description
Number Memorandum Date
Cross
Reference
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
No Modified Loans reported this period
- --------------------------------------------------------------------------------------------------------------
</TABLE>
[CHASE LOGO] 'c' 1999, CHASE MANHATTAN BANK
<PAGE>
SALOMON BROTHERS MORTGAGE SECURITES VII, INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
STATEMENT TO CERTIFICATEHOLDERS
Realized Loss Detail
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Loan Offering Appraisal Appraisal Value Beginning Gross Proceeds
Number Memo Date Scheduled
Cross Balance
Reference
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
No realized losses reported this period
- ---------------------------------------------------------------------------------
Loan Gross Liquidation Net Net Realized Loss
Number Proceeds % Expenses Liquidation Proceeds %
Scheduled Proceeds Scheduled
Principal Balance
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
No realized losses reported this period
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
[CHASE LOGO] 'c' 1999, CHASE MANHATTAN BANK
<PAGE>
EXHIBIT G-1
FORM OF DELINQUENT LOAN STATUS REPORT
G-1-1
<PAGE>
<TABLE>
<CAPTION>
Prospectus Short Name Property City State Sq Ft or Paid Thru Scheduled Total Total
ID (When Type Units Date Loan P&I Expenses
Appropriate) Balance Advances To Date
To Date
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
90 + DAYS DELINQUENT
60 DAYS DELINQUENT
30 DAYS DELINQUENT
Current & at Special
Servicer
FCL - Foreclosure
LTM - Latest 12 Months
either Last Annual or
Trailing 12 months
<CAPTION>
Prospectus Other Advances Total Current Current Maturity LTM LTM LTM ***Cap
ID (Taxes & Escrow) Exposure Monthly Interest Date NOI NOI DSCR Rate
P&I Rate Date Assigned
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
90 + DAYS DELINQUENT
60 DAYS DELINQUENT
30 DAYS DELINQUENT
Current & at Special
Servicer
FCL - Foreclosure
LTM - Latest 12 Months
either Last Annual or
Trailing 12 months
<CAPTION>
Prospectus Value Valuation Appraisal Loss Estimated Total Prospectus Short
ID using Date BPO or using Recovery Appraisal ID Name
NOI & Internal 90% % Reduction (when
Cap Rate Value** Appr. or Realized appropriate)
BPO (f)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
90 + DAYS DELINQUENT
60 DAYS DELINQUENT
30 DAYS DELINQUENT
Current & at Special
Servicer
FCL - Foreclosure
LTM - Latest 12 Months
either Last Annual or
Trailing 12 months
<CAPTION>
FCL Expected
Prospectus Property City State Transfer Resolution Start FCL Sale Workout
ID Type Date Date Date Date Strategy Comments
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
90 + DAYS DELINQUENT
60 DAYS DELINQUENT
30 DAYS DELINQUENT
Current & at Special
Servicer
FCL - Foreclosure
LTM - Latest 12 Months
either Last Annual or
Trailing 12 months
</TABLE>
- -------------------------
* Workout Strategy should match the CSSA Loan file using abbreviated words in
place of a code number such as (FCL - In Foreclosure, MOD - Modification,
DPO - Discount Payoff, NS - Note Sale, BK - Bankruptcy, PP - Payment Plan)
It is possible to combine the status codes if the loan is going in more than
one direction. (i.e. FCL/Mod, BK/Mod, BK/FCL/DPO)
** App - Appraisal, BPO - Broker opinion, Int. - Internal Value
*** How to determine the cap rate is agreed upon by Underwriter and servicers -
to be provided by a third party.
G-1-2
<PAGE>
EXHIBIT G-2
FORM OF HISTORICAL LOAN MODIFICATION REPORT
G-2-1
<PAGE>
<TABLE>
<CAPTION>
Prospectus City State Mod / Effect Balance Balance at Old Rate # Mths for New Old
ID Extension Date When Sent the Effective Rate Change Rate P&I
Flag to Special Date of
Servicer Rehabilitation
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
<TABLE>
<CAPTION>
Prospectus New Old New Total # Mths (1) Realized (2) Est. Future COMMENT
ID P&I Maturity Maturity for Change Loss to Interest Loss to
of Mod Trust $ Trust $ (Rate
Reduction)
<S> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
================================================================================
THIS REPORT IS HISTORICAL
Information is as of modification. Each line it should not change in the future.
Only new modifications should be added.
TOTAL FOR ALL LOANS:
TOTAL FOR LOANS IN CURRENT MONTH:
<TABLE>
<CAPTION>
# OF LOANS $ BALANCE
<S> <C> <C>
MODIFICATIONS:
MATURITY DATE EXTENSIONS:
TOTAL:
</TABLE>
* The information in these columns is from a particular point in time and should
not change on this report once assigned.
(1) Actual principal loss taken by bonds
(2) Expected future loss due to a rate reduction. This is just an estimate
calculated at the time of the modification.
G-2-2
<PAGE>
EXHIBIT G-3
FORM OF HISTORICAL LOSS ESTIMATE REPORT
G-3-1
<PAGE>
<TABLE>
<CAPTION>
Prospectus Short Property City State % Latest Effect Sales Net Amt Scheduled
ID Name Type Received Appraisal Date Price Received Balance
(When From Sale or Brokers of Sale from Sale
Appropriate) Opinion
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
<TABLE>
<CAPTION>
Prospectus Total Total Servicing Net Actual Date Loss Minor Adj Date Total Loss Loss % of
ID P&I Advanced Expenses Fees Proceeds Losses Passed to Trust Minor Adj with Scheduled
Expense Passed thru Passed Adjustment Balance
thru thru
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
===============================================================================
THIS REPORT IS HISTORICAL
All information is from the liquidation date and does not need to be updated.
TOTAL ALL LOANS:
CURRENT MONTH ONLY:
G-3-2
<PAGE>
EXHIBIT G-4
FORM OF REO STATUS REPORT
G-4-1
<PAGE>
<TABLE>
<CAPTION>
Prospectus Short Property City State Sq Ft Paid Scheduled Total
ID Name Type or Thru Loan P&I
(When Units Date Balance Advances
Appropriate) To Date
<S> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
<TABLE>
<CAPTION>
Prospectus Total Other Total Current Maturity LTM NOI LTM NOI/ Cap Rate Valuation Date
ID Expenses Advances Exposure Monthly Date Date DSC Assign ***
To Date (Taxes P&I
& Escrow)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
<TABLE>
<CAPTION>
Prospectus Value Appraisal Loss using Estimated Total Transfer REO Pending Comments
ID using BPO or 92% Appr. Recovery Appraisal Date Acquisition Resolution
NOI & Internal or BPO (f) % Reduction Date Date
Cap Rate Value** Realized
<S> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
(1) Use the following codes; App. - Appraisal, BPO - Brokers Opinion, Int -
Internal Value
*** How to determine the cap rate is agreed upon by Underwriter and servicers -
to be provided by a third party.
G-4-2
<PAGE>
EXHIBIT G-5
FORM OF SPECIAL SERVICER LOAN STATUS REPORT
G-5-1
<PAGE>
<TABLE>
<CAPTION>
ASSETS UNDER REVIEW
STATUS REPORT 1-Multifamily 4-Retail 7-Mobile Home Park
2-Hotel 5-Industrial 8-Nursing Home
3-Office 6-Dis Warehouse 9-Storage Facility
- -------------------------------------------------------------------------------
Prop Type Master Borrower Name Net Cash Flow As of
Servicer Project Name Date Most recent
DSCR
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Potential Issues
----------------
<CAPTION>
Special Servicer Loan Status Report
Last Update
Cutoff Date
-----------------------------------------------------------------------------------------------------------------------
Reimbursable
Advances Expenses
- ------------------------------------------------------------------------------------------------------------------------------------
Prop Type Cumulative Cumulative Master Service Default Interest Other Date Description Amount Date
Principal Interest Scheduled UPB Earned To Date
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
<CAPTION>
- ------------------------------------------------
Prop Type Site Inspection
Condition
- ------------------------------------------------
<S> <C> <C>
</TABLE>
<PAGE>
G-5-2
<PAGE>
EXHIBIT G-6
FORM OF OPERATING STATEMENT ANALYSIS REPORT
G-6-1
<PAGE>
PROPERTY OVERVIEW
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-----------
Control Number
---------------------------
Current Balance/Paid to Date
------------------------------------------------------------------------------------------------
Property Name
------------------------------------------------------------------------------------------------
Property Type
------------------------------------------------------------------------------------------------
Property Address, City, State
------------------------------------------------------------------------------------------------
Net Rentable Square Feet
----------------------------
Year Built/Year Renovated
-------------------------------------------------------
Year of Operations UNDERWRITING 199 199 199 YTD
------------------------------------------------------
Occupancy Rate *
-------------------------------------------------------
Average Rental Rate
-------------------------------------------------------
</TABLE>
* OCCUPANCY RATES ARE YEAR END OR THE ENDING DATE OF THE FINANCIAL STATEMENT FOR
THE PERIOD.
<TABLE>
<CAPTION>
INCOME: NO. OF
MOS.
Number of Mos. Annualized PRIOR CURRENT
YEAR YR.
---------------------------------------------------------------------------------------------------
Period Ended UNDERWRITING 199 199 199 199 YTD** 199 -BASE 199 -199
---------------------------------------------------------------------------------------------------
Statement Classification BASE LINE NORMALIZED NORMALIZED NORMALIZED AS OF / /96 VARIANCE VARIANCE
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Rental Income (Category 1)
---------------------------------------------------------------------------------------------------
Rental Income (Category 2)
---------------------------------------------------------------------------------------------------
Rental Income (Category 3)
---------------------------------------------------------------------------------------------------
Pass Through/Escalations
---------------------------------------------------------------------------------------------------
Other Income
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
EFFECTIVE GROSS INCOME $0.00 $0.00 $0.00 $0.00 $0.00 % %
---------------------------------------------------------------------------------------------------
</TABLE>
Normalized - Full year Financial statements that have been reviewed by the
underwriter or Servicer
** Servicer will not be expected to "Normalize" these YTD numbers.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------
OPERATING EXPENSES:
---------------------------------------------------------------------------------------------------
Real Estate Taxes
---------------------------------------------------------------------------------------------------
Property Insurance
---------------------------------------------------------------------------------------------------
Utilities
---------------------------------------------------------------------------------------------------
Repairs and Maintenance
---------------------------------------------------------------------------------------------------
Management Fees
---------------------------------------------------------------------------------------------------
Payroll & Benefits Expense
---------------------------------------------------------------------------------------------------
Advertising & Marketing
---------------------------------------------------------------------------------------------------
Professional Fees
---------------------------------------------------------------------------------------------------
Other Expenses
---------------------------------------------------------------------------------------------------
Ground Rent
---------------------------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES $0.00 $0.00 $0.00 $0.00 $0.00 % %
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
OPERATING EXPENSE RATIO
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
NET OPERATING INCOME $0.00 $0.00 $0.00 $0.00 $0.00
---------------------------------------------------------------------------------------------------
Leasing Commissions
---------------------------------------------------------------------------------------------------
Tenant Improvements
---------------------------------------------------------------------------------------------------
Replacement Reserve
---------------------------------------------------------------------------------------------------
TOTAL CAPITAL ITEMS $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
N.O.I. AFTER CAPITAL ITEMS $0.00 $0.00 $0.00 $0.00 $0.00
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
DEBT SERVICE (PER SERVICER) $0.00 $0.00 $0.00 $0.00 $0.00
---------------------------------------------------------------------------------------------------
CASH FLOW AFTER DEBT SERVICES $0.00 $0.00 $0.00 $0.00 $0.00
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
(1) DSCR: (NOI/DEBT SERVICE)
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
DSCR: (AFTER RESERVES\CAP EXP.)
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
</TABLE>
G-6-2
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------
DSCR: (AFTER RESERVES\CAP EXP.)
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
SOURCE OF FINANCIAL DATA:
---------------------------------------------------------------------------------------------------
</TABLE>
(ie. operating statements, financial statements, tax return, other)
- --------------------------------------------------------------------------------
NOTES AND ASSUMPTIONS:
The years shown above will roll always showing a three year history.
This report may vary depending on the property type and because of the way
information may vary in each borrowers statement.
Rental Income need to be broken down whenever possible differently for each
property type as follows: Retail: 1)Base Rent 2)Percentage rents on cashflow
Hotel: 1)Room Revenue 2)Food/Beverage Nursing Home: 1)Private 2)Medicaid
3)Medicare
INCOME: COMMENT
EXPENSE: COMMENT
CAPITAL ITEMS: COMMENT
(1) Used in the Comparative Financial Status Report
G-6-3
<PAGE>
EXHIBIT G-7
FORM OF COMPARATIVE FINANCIAL STATUS REPORT
G-7-1
<PAGE>
<TABLE>
<CAPTION>
Original Underwriting Information
Basis Year
Prospectus City Stat Last Scheduled Paid Annual Financial % Total $
ID e Property Loan Thru Debt Info as of Occ Revenue NOI DSC
Inspect Balance Date Service Date R
Date
yy/mm yy/mm
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
List all loans currently in deal with or with out information largest to
smallest loan
Total: $ $ WA $ $ WA
</TABLE>
<TABLE>
<CAPTION>
RECEIVED
FINANCIAL INFORMATION: LOANS
BALANCE
<S> <C> <C> <C> <C>
# % $ %
CURRENT FULL YEAR:
CURRENT FULL YR. RECEIVED WITH DSC
<1:
PRIOR FULL YEAR:
PRIOR FULL YR. RECEIVED WITH
DSC <1:
QUARTERLY FINANCIALS:
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
2nd Preceding Annual Operating Preceding Annual Operating
Information Information
as of _______ Normalized as of _______ Normalized
Financial % Total $ Financial % Total $
Info as of Occ Revenue NOI DSC Info as of Occ Revenue NOI DSC
Date R Date R
yy/mm yy/mm
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
List all loans currently in deal with or with out information largest to
smallest loan
Total: WA $ $ WA WA $ $ WA
</TABLE>
<TABLE>
<CAPTION>
REQUIRED
FINANCIAL INFORMATION: LOANS BALANCE
# % $ %
<S> <C> <C> <C> <C>
CURRENT FULL YEAR:
CURRENT FULL YR. RECEIVED WITH DSC
<1:
PRIOR FULL YEAR:
PRIOR FULL YR. RECEIVED WITH
DSC <1:
QUARTERLY FINANCIALS:
</TABLE>
<TABLE>
<CAPTION>
YTD or Trailing Financial Information Net Change
Month Reported "Actual Preceding & Basis
"
FS Start FS End Total $ % % %
Date Date Revenue NOI DSC Occ Total Rev DSC
yy/mm yy/mm
<S> <C> <C> <C> <C> <C> <C> <C> <C>
List all loans currently in deal with or with out information largest to
smallest loan
Total: WA $ $ WA WA $ WA
</TABLE>
<TABLE>
<S> <C>
CURRENT FULL YEAR:
CURRENT FULL YR. RECEIVED WITH DSC
<1:
PRIOR FULL YEAR:
PRIOR FULL YR. RECEIVED WITH
DSC <1:
QUARTERLY FINANCIALS:
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) DSC calculated using NOI / Debt
Service
(2) Net change should compare the latest year to the
underwriting year
G-7-2
<PAGE>
EXHIBIT G-8
FORM OF WATCHLIST
G-8-1
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
S4 S55 S61 S57 S58 P7 P8 P11 P54
- ------------------------------------------------------------------------------------------------------------------------------------
PROSPECTUS ID SHORT NAME PROPERTY TYPE CITY STATE SCHEDULED PAID MATURITY LTM* COMMENT / REASON ON WATCH LIST
(WHEN LOAN BALANCE THRU DATE DSCR
APPROPRIATE) DATE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
List all loans on watch list and reason sorted in decending balance order.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Total: $
- ------------------------------------------------------------------------------------------------------------------------------------
*LTM - Last 12 months either trailing or last annual
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
G-8-2
<PAGE>
EXHIBIT G-9
FORM OF NOI ADJUSTMENT WORKSHEET
G-9-1
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
PROPERTY OVERVIEW
Control Number --------
Current Balance/Paid to Date -------------------
Property Name ---------------------------------------------------------------
Property Type ---------------------------------------------------------------
Property Address, City, State ---------------------------------------------------------------
Net Rentable Square Feet --------
Year Built/Year Renovated -------------------
Year of Operations BORROWER ADJUSTMENT NORMALIZED
------------------------------
Occupancy Rate* ------------------------------
Average Rental Rate ------------------------------
* OCCUPANCY RATES ARE YEAR END OR THE ENDING DATE OF THE FINANCIAL STATEMENT FOR THE PERIOD.
INCOME:
Number of Mos. Annualized "YEAR"
----------------------------------------------------
Period Ended BORROWER ADJUSTMENT NORMALIZED
----------------------------------------------------
Statement Classification ACTUAL
----------------------------------------------------
Rental Income (Category 1) ----------------------------------------------------
Rental Income (Category 2) ----------------------------------------------------
Rental Income (Category 3) ----------------------------------------------------
Pass Throughs/Escalations ----------------------------------------------------
Other Income ----------------------------------------------------
----------------------------------------------------
EFFECTIVE GROSS INCOME $0.00 $0.00 $0.00
----------------------------------------------------
Normalized - Full year Financial statements that have been reviewed by the underwriter or
Servicer
OPERATING EXPENSES:
----------------------------------------------------
Real Estate Taxes ----------------------------------------------------
Property Insurance ----------------------------------------------------
Utilities ----------------------------------------------------
Repairs and Maintenance ----------------------------------------------------
Management Fees ----------------------------------------------------
Payroll & Benefits Expense ----------------------------------------------------
Advertising & Marketing ----------------------------------------------------
Professional Fees ----------------------------------------------------
Other Expenses ----------------------------------------------------
Ground Rent ----------------------------------------------------
TOTAL OPERATING EXPENSES $0.00 $0.00 $0.00
----------------------------------------------------
----------------------------------------------------
OPERATING EXPENSE RATIO
----------------------------------------------------
----------------------------------------------------
NET OPERATING INCOME $0.00 $0.00 $0.00
----------------------------------------------------
----------------------------------------------------
Leasing Commissions ----------------------------------------------------
Tenant Improvements ----------------------------------------------------
Replacement Reserve ----------------------------------------------------
TOTAL CAPITAL ITEMS $0.00 $0.00 $0.00
----------------------------------------------------
N.O.I. After Capital Items $0.00 $0.00 $0.00
----------------------------------------------------
----------------------------------------------------
DEBT SERVICE (PER SERVICER) $0.00 $0.00 $0.00
----------------------------------------------------
CASH FLOW AFTER DEBT SERVICE $0.00 $0.00 $0.00
----------------------------------------------------
----------------------------------------------------
(1)DSCR: (NOI/DEBT SERVICE)
----------------------------------------------------
DSCR: (AFTER RESERVES\CAP EXP.)
----------------------------------------------------
SOURCE OF FINANCIAL DATA:
----------------------------------------------------
(ie. operating statements, financial statements, tax return,
other)
</TABLE>
G-9-2
<PAGE>
NOTES AND ASSUMPTIONS:
- ------------------------------------------------------------------------------
This report should be completed by the Servicer for any "Normalization" of the
Borrowers numbers.
The "Normalized" column is used in the Operating Statement Analysis Report.
This report may vary depending on the property type and because of the way
information may vary in each borrowers statement.
INCOME: COMMENTS
EXPENSE: COMMENTS
CAPITAL ITEMS: COMMENTS
(1) Used in the Comparative Financial Status Report
G-9-3
<PAGE>
EXHIBIT H-1
CSSA SET-UP DATA RECORD LAYOUT
H-1-4
<PAGE>
CSSA "LOAN SETUP" FILE
(DATA RECORD LAYOUT)
<TABLE>
<CAPTION>
SPECIFICATION DESCRIPTION/COMMENTS
- -------------------------------------------------- ----------------------------------------------------------------------------
<S> <C>
Acceptable Media Types Magnetic Tape, Diskette, Electronic Transfer
Character Set ASCII
Field Delineation Comma
Density (Bytes-Per-Inch) 1600 or 6250
Magnetic Tape Label None (unlabeled)
Magnetic Tape Blocking Factor 10285 (17 records per block)
Physical Media Label Servicer Name; Data Type (Collection Period Data); Density (Bytes-Per-Inch);
Blocking Factor; Record Length
Return Address Label Required for return of physical media (magnetic tape or diskette)
</TABLE>
<TABLE>
<CAPTION>
FIELD FORMAT
FIELD NAME NUMBER TYPE EXAMPLE
- -------------------------------------------------- ---------- --------------------------------------
<S> <C> <C> <C>
Transaction Id 1 AN XXX97001
Group Id 2 AN XXX9701A
Loan Id 3 AN 00000000012345
Offering Document Loan Id 4 AN 123
Original Note Amount 5 Numeric 1000000.00
Original Term Of Loan 6 Numeric 240
Original Amortization Term 7 Numeric 360
Original Note Rate 8 Numeric 0.095
Original Payment Rate 9 Numeric 0.095
First Loan Payment Due Date 10 AN YYYYMMDD
Grace Days Allowed 11 Numeric 10
Interest Only (Y/N) 12 AN Y
Balloon (Y/N) 13 AN Y
Interest Rate Type 14 Numeric 1
Interest Accrual Method Code 15 Numeric 1
Interest in Arrears (Y/N) 16 AN Y
Payment Type Code 17 Numeric 1
Prepayment Lock-out End Date 18 AN YYYYMMDD
Yield Maintenance End Date 19 AN YYYYMMDD
Prepayment Premium End Date 20 AN YYYYMMDD
<CAPTION>
FIELD NAME DESCRIPTION/COMMENTS
- ------------------------------------------------ ----------------------------------------------------------------------------------
<S> <C>
Transaction Id Unique Issue Identification Mnemonic
Group Id Unique Indentification Number Assigned To Each Loan Group Within An Issue
Loan Id Unique Indentification Number Assigned To Each Collateral Item In A Pool
Offering Document Loan Id Unique Indentification Number Assigned To Each Collateral Item In The Prospectus
Original Note Amount The Mortgage Loan Balance At Inception Of The Note
Original Term Of Loan Original Number Of Months Until Maturity Of Loan
Original Amortization Term Original Number Of Months Loan Amortized Over
Original Note Rate The Note Rate At Inception Of The Note
Original Payment Rate Original Rate Payment Calculated On
First Loan Payment Due Date First Payment Date On The Mortgage Loan
Grace Days Allowed Number Of Days From Due Date Borrower Is Permitted To Remit Payment
Interest Only (Y/N) Y=Yes, N=No
Balloon (Y/N) Y=Yes, N=No
Interest Rate Type 1=Fixed, 2=Arm, 3=Step, 9=Other
Interest Accrual Method Code 1=30/360, 2=Actual/365, 3=Actual/360, 4=Actual/Actual, 5=Actual/366, 6=Simple,
7=78'S
Interest in Arrears (Y/N) Y=Yes, N=No
Payment Type Code See Payment Type Code Legend
Prepayment Lock-out End Date Date After Which Loan Can Be Prepaid
Yield Maintenance End Date Date After Which Loan Can Be Prepaid Without Yield Maintenance
Prepayment Premium End Date Date After Which Loan Can Be Prepaid Without Penalty
</TABLE>
H-1-5
<PAGE>
CSSA "LOAN SETUP" FILE
(DATA RECORD LAYOUT)
<TABLE>
<CAPTION>
FIELD FORMAT
FIELD NAME NUMBER TYPE EXAMPLE
- -------------------------------------------------- ---------- ------------------------------
<S> <C> <C> <C>
Prepayment Terms Description 21 AN Text
ARM Index Code 22 AN A
First Rate Adjustment Date 23 AN YYYYMMDD
First Payment Adjustment Date 24 AN YYYYMMDD
ARM Margin 25 Numeric 0.025
Lifetime Rate Cap 26 Numeric 0.15
Lifetime Rate Floor 27 Numeric 0.05
Periodic Rate Increase Limit 28 Numeric 0.02
Periodic Rate Decrease Limit 29 Numeric 0.02
Periodic Pay Adjustment Max-% 30 Numeric 0.03
Periodic Pay Adjustment Max-$ 31 Numeric 5000.00
Payment Frequency 32 Numeric 1
Rate Reset Frequency In Months 33 Numeric 1
Pay Reset Frequency In Months 34 Numeric 1
Rounding Code 35 Numeric 1
Rounding Increment 36 Numeric 0.00125
Index Look Back In Days 37 Numeric 45
Negative Amortization Allowed (Y/N) 38 AN Y
Max Neg Allowed (% Of Orig Bal) 39 Numeric 0.075
Maximum Negate Allowed ($) 40 Numeric 25000.00
Remaining Term At Securitization 41 Numeric 240
Remaining Amor-Tm At Securitiz'n 42 Numeric 360
Maturity Date At Securitization 43 AN YYYYMMDD
Sched Prin Bal At Securitization 44 Numeric 1000000.00
Note Rate At Securitization 45 Numeric 0.095
Servicer And Trustee Fee Rate 46 Numeric 0.00025
Fee Rate / Strip Rate 1 47 Numeric 0.00001
Fee Rate / Strip Rate 2 48 Numeric 0.00001
Fee Rate / Strip Rate 3 49 Numeric 0.00001
Fee Rate / Strip Rate 4 50 Numeric 0.00001
Fee Rate / Strip Rate 5 51 Numeric 0.00001
Net Rate At Securitization 52 Numeric 0.0947
Periodic P&I Payment At Securitiz'n 53 Numeric 3000.00
- -------------------------------------------------- ---------- ------------------------------
<CAPTION>
FIELD NAME DESCRIPTION/COMMENTS
- -------------------------------------------------- ------------------------------------------------------------------------------
<S> <C>
Prepayment Terms Description Description Of Prepayment Terms (Not To Exceed 50 Characters)
ARM Index Code See Arm Index Code Legend
First Rate Adjustment Date Date Note Rate Originally Changed
First Payment Adjustment Date Date Payment Originally Changed
ARM Margin Rate Added To Index Used In The Determination Of The Gross Interest Rate
Lifetime Rate Cap Maximum Rate That The Borrower Must Pay On An Arm Loan Per The Loan Agreement
Lifetime Rate Floor Minimum Rate That The Borrower Must Pay On An Arm Loan Per The Loan Agreement
Periodic Rate Increase Limit Maximum Periodic Increase To The Note Rate Allowed Per The Loan Agreement
Periodic Rate Decrease Limit Minimum Periodic Increase To The Note Rate Allowed Per The Loan Agreement
Periodic Pay Adjustment Max-% Maximum Periodic % Increase To The Borrowers P&I Payment Allowed Per The Loan
Agreement
Periodic Pay Adjustment Max-$ Maximum Periodic Dollar Increase To The Borrowers P&I Payment Allowed Per The
Loan Agreement
Payment Frequency 1=Monthly, 3=Quarterly, 6=Semi-Annually, 12=Annually...
Rate Reset Frequency In Months 1=Monthly, 3=Quarterly, 6=Semi-Annually, 12=Annually...
Pay Reset Frequency In Months 1=Monthly, 3=Quarterly, 6=Semi-Annually, 12=Annually...
Rounding Code Rounding Method For Sum Of Index Plus Margin (See Rounding Code Legend)
Rounding Increment Used In Conjunction With Rounding Code
Index Look Back In Days Use Index In Effect X Days Prior To Adjustment Date
Negative Amortization Allowed (Y/N) Y=Yes, N=No
Max Neg Allowed (% Of Orig Bal) Maximum Lifetime Percentage Increase To The Original Balance Allowed Per The
Loan Agreement
Maximum Negate Allowed ($) Maximum Lifetime Dollar Increase To The Original Balance Allowed Per The Loan
Agreement
Remaining Term At Securitization Remaining Number Of Months Until Maturity Of Loan At Cutoff
Remaining Amor-Tm At Securitiz'n Remaining Number Of Months Loan Amortized Over At Cutoff
Maturity Date At Securitization The Scheduled Maturity Date Of The Mortgage Loan At Securitization
Sched Prin Bal At Securitization The Scheduled Principal Balance Of The Mortgage Loan At Securitization
Note Rate At Securitization Cutoff Annualized Gross Interest Rate Applicable To The Calculation Of
Scheduled Interest
Servicer And Trustee Fee Rate Cutoff Annualized Fee Paid To The Servicer And Trustee
Fee Rate / Strip Rate 1 Cutoff Annualized Fee/Strip Netted Against Current Note Rate To Determine Net
Pass-Through Rate
Fee Rate / Strip Rate 2 Cutoff Annualized Fee/Strip Netted Against Current Note Rate To Determine Net
Pass-Through Rate
Fee Rate / Strip Rate 3 Cutoff Annualized Fee/Strip Netted Against Current Note Rate To Determine Net
Pass-Through Rate
Fee Rate / Strip Rate 4 Cutoff Annualized Fee/Strip Netted Against Current Note Rate To Determine Net
Pass-Through Rate
Fee Rate / Strip Rate 5 Cutoff Annualized Fee/Strip Netted Against Current Note Rate To Determine Net
Pass-Through Rate
Net Rate At Securitization Cutoff Annualized Interest Rate Applicable To The Calculation Of Remittance
Interest
Periodic P&I Payment At Securitiz'n The Periodic Scheduled Principal & Interest Payment
</TABLE>
H-1-6
<PAGE>
CSSA "LOAN SETUP" FILE
(DATA RECORD LAYOUT)
<TABLE>
<CAPTION>
FIELD FORMAT
FIELD NAME NUMBER TYPE EXAMPLE
- -------------------------------------------------- ---------- --------------------------------------
<S> <C> <C> <C>
# Of Properties 54 Numeric 13
Property Name 55 AN Text
Property Address 56 AN Text
Property City 57 AN Text
Property State 58 AN Text
Property Zip Code 59 AN Text
Property County 60 AN Text
Property Type Code 61 AN MF
Net Square Feet At Securitization 62 Numeric 25000
# Of Units/Beds/Rms At Securitiz'n 63 Numeric 75
Year Built 64 AN 1990
NOI At Securitization 65 Numeric 100000.00
DSCR At Securitization 66 Numeric 2.11
Appraisal Value At Securitization 67 Numeric 1000000.00
Appraisal Date At Securitization 68 AN YYYYMMDD
Physical Occupancy At Securitization 69 Numeric 0.88
Revenue At Securitization 70 Numeric 100000.00
Operating Expenses At Securitization 71 Numeric 100000.00
Securitization Financials As Of Date 72 AN YYYYMMDD
Recourse (Y/N) 73 AN Y
Ground Lease (Y/N) 74 AN Y
Cross-Collateralized Loan Grouping 75 Numeric 9(3)
Collection Of Escrows (Y/N) 76 AN Y
Collection Of Other Reserves (Y/N) 77 AN Y
Lien Position At Securitization 78 Numeric 1
<CAPTION>
FIELD NAME DESCRIPTION/COMMENTS
- -------------------------------------------------- ------------------------------------------------------------------------------
<S> <C>
# Of Properties The Number Of Properties Underlying The Mortgage Loan
Property Name If Number Of Properties Is Greater Than 1 Then "Various"
Property Address If Number Of Properties Is Greater Than 1 Then "Various"
Property City If Number Of Properties Is Greater Than 1 Then "Various"
Property State If Number Of Properties Is Greater Than 1 Then "Various"
Property Zip Code If Number Of Properties Is Greater Than 1 Then "Various"
Property County If Number Of Properties Is Greater Than 1 Then "Various"
Property Type Code If Number Of Properties Is Greater Than 1 Then "Various" (See Property Type
Code Legend)
Net Square Feet At Securitization If Number Of Properties Is Greater Than 1 Then "000000"
# Of Units/Beds/Rms At Securitiz'n If Number Of Properties Is Greater Than 1 Then "000000"
Year Built If Number Of Properties Is Greater Than 1 Then "000000"
NOI At Securitization Net Operating Income At Securitization
DSCR At Securitization DSCR At Securitization
Appraisal Value At Securitization Appraisal Value At Securitization
Appraisal Date At Securitization Appraisal Date At Securitization
Physical Occupancy At Securitization Physical Occupancy At Securitization
Revenue At Securitization Revenue At Securitization
Operating Expenses At Securitization Expenses At Securitization
Securitization Financials As Of Date Securitization Financials As Of Date
Recourse (Y/N) Y=Yes, N=No
Ground Lease (Y/N) Y=Yes, N=No
Cross-Collateralized Loan Grouping All Loans With The Same Numeric Value Are Crossed
Collection Of Escrows (Y/N) Y=Yes, N=No
Collection Of Other Reserves (Y/N) Y=Yes, N=No
Lien Position At Securitization 1=First, 2=Second...
</TABLE>
H-1-7
<PAGE>
CSSA "LOAN SETUP" FILE
(DATA RECORD LAYOUT)
<TABLE>
<CAPTION>
PAYMENT TYPE CODE ARM INDEX CODE
LEGEND LEGEND
- ------------------------------------------------------ -------------------------------------------------------------------------
<S> <C> <C> <C>
1 Fully Amortizing A 11 FHLB COFI (1 Month)
2 Amortizing Balloon B 11 FHLB COFI (6 Month)
3 Interest Only / Balloon C 1 Year CMT Weekly Average Treasury
4 Interest Only / Amortizing D 3 Year CMT Weekly Average Treasury
5 Interest Only / Amortizing / Balloon E 5 Year CMT Weekly Average Treasury
6 Principal Only F Wall Street Journal Prime Rate
9 Other G 1 Month LIBOR
H 3 Month LIBOR
I 6 Month LIBOR
J National Mortgage Index Rate
All Others Use Short Text Description
</TABLE>
<TABLE>
<CAPTION>
ROUNDING CODE
LEGEND
------------------------------------------------------
<S> <C>
1 Unrounded
2 Nearest Percentage Increment
3 Up To Nearest Percentage Increment
4 Down To Nearest Percentage Increment
</TABLE>
<TABLE>
<CAPTION>
PROPERTY TYPES CODE
LEGEND
- -----------------------------------------------------------------------------
<S> <C>
MF Multifamily
RT Retail
HC Health Care
IN Industrial
WH Warehouse
MH Mobile Home Park
OF Office
MU Mixed Use
LO Lodging
SS Self Storage
OT Other
- ----------------------- -----------------------------------------------------
</TABLE>
H-1-8
<PAGE>
EXHIBIT H-2
CSSA PERIODIC DATA RECORD LAYOUT
H-2-1
<PAGE>
COMMERCIAL REAL ESTATE SECONDARY MARKET SECURITIZATION ASSOCIATION
CSSA "LOAN PERIODIC" UPDATE FILE
(DATA RECORD LAYOUT)
<TABLE>
<CAPTION>
- ------------------------------------------- --------------------------------------------------------------------------------------
Specification DESCRIPTION/COMMENTS
- ------------------------------------------- --------------------------------------------------------------------------------------
<S> <C>
Acceptable Media Types Magnetic Tape, Diskette, Electronic Transfer
Character Set ASCII
Field Delineation Comma
Density (Bytes-Per-Inch) 1600 or 6250
Magnetic Tape Label None (unlabeled)
Magnetic Tape Blocking Factor 10285 (17 records per block)
Physical Media Label Servicer Name; Data Type (Collection Period Data); Density (Bytes-Per-Inch); Blocking
Factor; Record Length
Return Address Label Required for return of physical media (magnetic tape or diskette)
- ------------------------------------------- --------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------- ----------------------------------- ---------------------------------------------------
FIELD Format
Field Name NUMBER Type Example Description/Comments
- ----------------------------------------- ----------------------------------- ---------------------------------------------------
<S> <C> <C> <C> <C>
- ----------------------------------------- ----------------------------------- ---------------------------------------------------
Transaction Id 1 AN XXX97001 Unique Issue Identification Mnemonic
Group Id 2 AN XXX9701A Unique Identification Number Assigned To Each Loan
Group Within An Issue
Loan Id 3 AN 00000000012345 Unique Identification Number Assigned To Each
Collateral Item In A Pool
Prospectus Id 4 AN 123 Unique Identification Number Assigned To Each
Collateral Item In The Prospectus
Distribution Date 5 AN YYYYMMDD Date Payments Made To Certificateholders
Current Beginning Sched Balance 6 Numeric 100000.00 Outstanding Scheduled Principal Balance At The
Beginning Of The Current Period
Current Ending Scheduled Balance 7 Numeric 100000.00 Outstanding Scheduled Principal Balance At The End
Of The Current Period
Paid To Date 8 AN YYYYMMDD Due Date Of The Last Interest Payment Received
Current Index Rate 9 Numeric 0.09 Index Rate Used In The Determination Of The Current
Period Gross Interest Rate
Current Note Rate 10 Numeric 0.09 Annualized Gross Rate Applicable To Calculate The
Current Period Scheduled Interest
Maturity Date 11 AN YYYYMMDD Date Collateral Is Scheduled To Make Its Final
Payment
Servicer and Trustee Fee Rate 12 Numeric 0.00025 Annualized Fee Paid To The Servicer And Trustee
Fee Rate/Strip Rate 1 13 Numeric 0.00001 Annualized Fee/Strip Netted Against Current Note
Rate = Net Pass-Through Rate
Fee Rate/Strip Rate 2 14 Numeric 0.00001 Annualized Fee/Strip Netted Against Current Note
Rate = Net Pass-Through Rate
Fee Rate/Strip Rate 3 15 Numeric 0.00001 Annualized Fee/Strip Netted Against Current Note
Rate = Net Pass-Through Rate
Fee Rate/Strip Rate 4 16 Numeric 0.00001 Annualized Fee/Strip Netted Against Current Note
Rate = Net Pass-Through Rate
Fee Rate/Strip Rate 5 17 Numeric 0.00001 Annualized Fee/Strip Netted Against Current Note
Rate = Net Pass-Through Rate
Net Pass-Through Rate 18 Numeric 0.0897 Annualized Interest Rate Applicable To Calculate
The Current Period Remittance Int.
Next Index Rate 19 Numeric 0.09 Index Rate Used In The Determination Of The Next
Period Gross Interest Rate
Next Note Rate 20 Numeric 0.09 Annualized Gross Interest Rate Applicable To Calc
Of The Next Period Sch. Interest
Next Rate Adjustment Date 21 AN YYYYMMDD Date Note Rate Is Next Scheduled To Change
Next Payment Adjustment Date 22 AN YYYYMMDD Date Scheduled P&I Amount Is Next Scheduled To
Change
- ----------------------------------------- ----------------------------------- ---------------------------------------------------
</TABLE>
H-2-2
<PAGE>
CSSA "LOAN PERIODIC" UPDATE FILE
(DATA RECORD LAYOUT)
<TABLE>
<CAPTION>
- ----------------------------------------- ----------------------------------- ---------------------------------------------------
FIELD Format
Field Name NUMBER Type Example Description/Comments
- ----------------------------------------- ----------------------------------- ---------------------------------------------------
<S> <C> <C> <C> <C>
- ----------------------------------------- ----------------------------------- ---------------------------------------------------
Scheduled Interest Amount 23 Numeric 1000.00 Scheduled Gross Interest Payment Due For The
Current Period
Scheduled Principal Amount 24 Numeric 1000.00 Scheduled Principal Payment Due For The Current
Period
Total Scheduled P&I Due 25 Numeric 1000.00 Scheduled Principal And Interest Payment Due
For The Current Period
Neg am/Deferred Interest Amount 26 Numeric 1000.00 Negative Amortization/Deferred Interest Amount
Due For The Current Period
Unscheduled Principal Collections 27 Numeric 1000.00 Unscheduled Payments Of Principal Received
During The Related Collection Period
Other Principal Adjustments 28 Numeric 1000.00 Unscheduled Principal Adjustments For The
Related Collection Period
Liquidation/Prepayment Date 29 AN YYYYMMDD Date Unscheduled Payment Of Principal Received
Prepayment Penalty/Yld Maint Rec'd 30 Numeric 1000.00 Additional Payment Req'd From Borrower Due To
Prepayment Of Loan Prior To Maturity
Prepayment Interest Excess (Shortfall) 31 Numeric 1000.00 Scheduled Gross Interest Applicable To The
Prepayment Amount
Liquidation/Prepayment Code 32 Numeric 1 See Liquidation/Prepayment Codes Legend
Most Recent ASER $ 33 Numeric 1000.00 Excess Of The Principal Balance Over The
Defined Appraisal Percentage
Most Recent ASER Date 34 AN YYYYMMDD Date ASER Amount Applied To Loan
Cumulative ASER $ 35 Numeric 1000.00 Cumulative ASER Amount
Actual Balance 36 Numeric 100000.00 Outstanding Actual Principal Balance At The End
Of The Current Period
Total P&I Advance Outstanding 37 Numeric 1000.00 Outstanding P&I Advances At The End Of The
Current Period
Total T&I Advance Outstanding 38 Numeric 1000.00 Outstanding Taxes & Insurance Advances At The
End Of The Current Period
Other Expense Advance Outstanding 39 Numeric 1000.00 Other Outstanding Advances At The End Of The
Current Period
Status of Loan 40 AN 1 See Status Of Loan Legend
In Bankruptcy 41 AN Y Bankruptcy Status Of Loan (If In Bankruptcy
"Y", Else "N")
Foreclosure Date 42 AN YYYYMMDD Date Of Foreclosure
REO Date 43 AN YYYYMMDD Date Of REO
Bankruptcy Date 44 AN YYYYMMDD Date Of Bankruptcy
Net Proceeds Received on Liquidation 45 Numeric 100000.00 Net Proceeds Rec'd On Liquidation To Be
Remitted To The Tr Per The Tr Doc'n
Liquidation Expense 46 Numeric 100000.00 Expenses Associated With The Liq'n To Be
Netted From The Tr Per The Tr Doc'n
Realized Loss to Trust 47 Numeric 10000.00 Liquidation Balance Less Net Liquidation
Proceeds Received
Date of Last Modification 48 AN YYYYMMDD Date Loan Was Modified
Modification Code 49 Numeric 1 See Modification Codes Legend
Modified Note Rate 50 Numeric 0.09 Note Rate Loan Modified To
Modified Payment Rate 51 Numeric 0.09 Payment Rate Loan Modified To
Preceding Fiscal Year Revenue 52 Numeric 1000.00 Preceding Fiscal Year Revenue
Preceding Fiscal Year Expenses 53 Numeric 1000.00 Preceding Fiscal Year Expenses
Preceding Fiscal Year NOI 54 Numeric 1000.00 Preceding Fiscal Year Net Op Income
Preceding Fiscal Year Debt Svc Amt. 55 Numeric 1000.00 Preceding Fiscal Year Debt Svc Amount
Preceding Fiscal Year DSCR 56 Numeric 2.55 Preceding Fiscal Yr Debt Svc Cvrge Ratio
- ---------------------------------------- -------------------------------------- ------------------------------------------------
</TABLE>
H-2-3
<PAGE>
COMMERCIAL REAL ESTATE SECONDARY MARKET SECURITIZATION ASSOCIATION
CSSA "LOAN PERIODIC" UPDATE FILE
(DATA RECORD LAYOUT)
<TABLE>
<CAPTION>
- ----------------------------------------- ----------------------------------- ---------------------------------------------------
FIELD Format
Field Name NUMBER Type Example Description/Comments
- ----------------------------------------- ----------------------------------- ---------------------------------------------------
<S> <C> <C> <C> <C>
- ----------------------------------------- ----------------------------------- ---------------------------------------------------
Preceding Fiscal Yr Physical Occ'y 57 Numeric 0.85 Preceding Fiscal Year Physical Occupancy
Preceding FY Financial As of Date 58 AN YYYYMMDD Preceding Fiscal Year Financial As Of Date
Second Preceding FY Revenue 59 Numeric 1000.00 Second Preceding Fiscal Year Revenue
Second Preceding FY Expenses 60 Numeric 1000.00 Second Preceding Fiscal Year Expenses
Second Preceding FY NOI 61 Numeric 1000.00 Second Preceding Fiscal Year Net Operating
Income
Second Preceding FY Debt Service 62 Numeric 1000.00 Second Preceding Fiscal Year Debt Service
Second Preceding FY DSCR 63 Numeric 2.55 Second Preceding Fiscal Year Debt Svc Cvrge
Ratio
Sec Preceding FY Physical Occ'y 64 Numeric 0.85 Second Preceding Fiscal Year Physical Occupancy
Sec Preceding FY Fin'l As of Date 65 AN YYYYMMDD Second Preceding Fiscal Year Financial As Of
Date
Most Recent Fiscal YTD Revenue 66 Numeric 1000.00 Most Recent Fiscal Year To Date Revenue
Most Recent Fiscal YTD Expenses 67 Numeric 1000.00 Most Recent Fiscal Year To Date Expenses
Most Recent Fiscal YTD NOI 68 Numeric 1000.00 Most Recent Fiscal Year To Date Net Operating
Income
Most Recent Fiscal YTD Debt Service 69 Numeric 1000.00 Most Recent Fiscal Year To Date Debt Service
Most Recent Fiscal YTD DSCR 70 Numeric 2.55 Most Recent Fiscal Year To Date Debt Service
Coverage Ratio
Most Recent Fiscal YTD Phys. Occ. 71 Numeric 0.85 Most Recent Fiscal Year To Date Physical
Occupancy
Most Recent Fiscal YTD Start Date 72 AN YYYYMMDD Most Recent Fiscal Year To Date Start Date
Most Recent Fiscal YTD End Date 73 AN YYYYMMDD Most Recent Fiscal Year To Date End Date
Most Recent Appraisal Date 74 AN YYYYMMDD The Date Of The Latest Available Appraisal
For The Property
Most Recent Appraisal Value 75 Numeric 100000.00 The Latest Available Appraisal Value For The
Property
Workout Strategy Code 76 Numeric 1 See Workout Strategy Codes Legend
Most Recent Spec Svc Transfer Date 77 AN YYYYMMDD Date Transferred To The Special Servicer
Most Recent Master Svc Return Date 78 AN YYYYMMDD Date Returned To The Master Servicer
Date Asset Expected to Be Resolved 79 AN YYYYMMDD Date Asset Is Expected To Be Resolved
Year Last Renovated 80 AN 1997 Year Property Last Renovated
- ----------------------------------------- -------------------------------------- -----------------------------------------------
NEW FIELDS ADDED:
- ----------------------------------------- -------------------------------------- -----------------------------------------------
Cap Rate Assigned 81 Numeric 10 Cap Rate Assigned
FCL Sale Date (Expected or Actual) 82 AN YYYYMMDD FCL Sale Date Expected or Actual
- ----------------------------------------- -------------------------------------- -----------------------------------------------
</TABLE>
H-2-4
<PAGE>
COMMERCIAL REAL ESTATE SECONDARY MARKET SECURITIZATION ASSOCIATION
CSSA "Loan Periodic" Update File
(Data Record Layout)
<TABLE>
<CAPTION>
- ---------------------------------------- ---------------------------------------------------------- ----------------------------
LIQUIDATION/PREPAYMENT CODE STATUS OF MORTGAGE LOAN MODIFICATION CODE
Legend LEGEND LEGEND
- ---------------------------------------- ---------------------------------------------------------- ----------------------------
<S> <C> <C> <C> <C> <C>
1 Partial Liq'n (Curtailment) A Payment Not Received But Still In Grace Period 1 Maturity Date Extension
2 Payoff Prior To Maturity B Late Payment But Less Than 1 Month Delinquent 2 Amortization Change
3 Disposition 0 Current 3 Principal Write-Off
4 Repurchase 1 One Month Delinquent 4 Combination
5 Full Payoff At Maturity 2 Two Months Delinquent ----------------------------
6 DPO 3 Three Or More Months Delinquent
7 Liquidation 4 Assumed Sched Payment (Performing Matured Ball'n)
7 Foreclosure
- ---------------------------------------- 9 REO
----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------
WORKOUT STRATEGY CODE
LEGEND
----------------------------------------------------------
<S> <C>
1 Modification
2 Foreclosure
3 Bankruptcy
4 Extension
5 Note Sale
6 DPO
7 REO
8 Resolved
9 Pending Return to Master Servicer
10 Deed In Lieu Of Foreclosure
----------------------------------------------------------
</TABLE>
H-2-5
<PAGE>
EXHIBIT H-3
CSSA PROPERTY DATA FILE
H-3-1
<PAGE>
Commercial Real Estate Secondary Market Securitization Association
CSSA "Property" File
(Data Record Layout)
<TABLE>
<CAPTION>
Field Format
Field Name Number Type Example Description/Comments
- ---------------------------------- -------------------------------- ---------------------------------------------------------
<S> <C> <C> <C> <C>
Transaction ID 1 AN XXX97001
Loan ID 2 AN XXX9701A
Prospectus Loan ID 3 AN 00000000012345 From Offering Document
Property ID 4 AN 1001-001 Should contain Prospectus ID and propety identifier,
e.g., 1001-001, 1000-002
Distribution Date 5 AN YYYYMMDD
Cross-Collateralized Loan Grouping 6 Numeric 9(3) All Loans With The Same Numeric Value Are Crossed
Property Name 7 AN Text
Property Address 8 AN Text
Property City 9 AN Text
Property State 10 AN FL
Property Zip Code 11 AN 30303
Property County 12 AN Text
Property Type Code 13 AN MF
Year Built 14 AN YYYY
Year Last Renovated 15 AN YYYY
Net Square Feet At Securitization 16 Numeric 25000 RT, IN, WH, OF, MU, SS,OT = SF
# Of Units/Beds/Rooms At Securitization 17 Numeric 75 MF, MHP, LO, HC = Units
Property Status 18 AN 1 1=FCL, 2=REO, 3=Defeased, 4=Partial Release, 5=Released,
6=Same as at securitization
Allocated Percentage of Loan at
Securitization 19 Numeric 0.75 Issuer to allocate loan % attributable to property for
multi-property loans
Current Allocated Percentage 20 Numeric 0.75 Calculation based on Current Allocated Loan Amount and
Current SPB for associated loan.
Current Allocated Loan Amount 21 Numeric 5900900 Maintained by servicer.
Ground Lease (Y/S/N) 22 AN N Either Y=Yes, S=Subordinate, N=No ground lease
Other Escrow / Reserve Balances 23 Numeric 25000
Most Recent Appraisal Date 24 AN YYYYMMDD
Most Recent Appraisal Value 25 Numeric 1000000
Date Asset is Expected to Be Resolved 26 AN YYYYMMDD Could be different dates for different properties if
foreclosing
Foreclosure Date 27 AN YYYYMMDD
- ---------------------------------- -------------------------------- ---------------------------------------------------------
REO Date 28 AN YYYYMMDD
Occupancy % 29 Numeric 0.75 Map to "Most Recent Fiscal YTD Phys. Occ." in CSSA
Occupancy Date 30 Numeric YYYYMMDD Add a new field to the CSSA Loan file.
Date Lease Rollover Review 31 AN YYYYMMDD Roll over review to be completed every 12 months
% Sq. Feet expiring 1-12 months 32 Numeric 0.20
% Sq. Feet expiring 13-24 months 33 Numeric 0.20
% Sq. Feet expiring 25-36 months 34 Numeric 0.20
% Sq. Feet expiring 37-48 months 35 Numeric 0.20
% Sq. Feet expiring 49-60 months 36 Numeric 0.20
Largest Tenant 37 AN Text For Office, WH, Retail, Industrial *Only if disclosed in
the offering document
<CAPTION>
CSSA
Field Name Loan Relationship to Corresponding CSSA 100.1 Field
- ---------------------------------- ----------- ------------------------------------------------------------------
<S> <C> <C>
Transaction ID S1,P1 Same as CSSA Loan File
Loan ID S3,P3 Same as CSSA Loan File
Prospectus Loan ID S4,P4 Same as CSSA Loan File
Property ID
Distribution Date P5 Same as CSSA Loan File
Cross-Collateralized Loan Grouping S75
Property Name S55 If Multi-Prop, no rollup to CSSA Loan File. Populate S55 with "Various."
Property Address S56 If Multi-Prop, no rollup to CSSA Loan File. Populate S56 with "Various."
Property City S57 If Multi-Prop, and all same then populate S57 with City, otherwise, "Various".
Missing info="incomplete"
Property State S58 If Multi-Prop, and all same then populate S58 with State, otherwise,
"Various". Missing info="incomplete"
Property Zip Code S59 If Multi-Prop, and all same then populate S59 with Zip, otherwise, "Various".
Missing info="incomplete"
Property County S60 If Multi-Prop, and all same then populate S60 with County, otherwise,
"Various". Missing info="incomplete"
Property Type Code S61 If Multi-Prop and all same then populate S61 with property type otherwise
"Various". Missing Info="incomplete"
Year Built S64 If Multi-Prop, and all same then populate S64 with year otherwise, "000000".
Year Last Renovated P80 If Multi-Prop, and all same then populate P80 with year otherwise, "000000".
Net Square Feet At Securitization S62 Roll-up to loan file if populated. If missing one or more than populate
with "00000"
# Of Units/Beds/Rooms At Securitization S63 Roll-up to loan file if populated. If missing one or more than populate
with "00000"
Property Status If multi-prop and all same than populate CSSA Loan file with property, status,
otherwise various.
Allocated Percentage of Loan at
Securitization No field needed in CSSA Loan file
Current Allocated Percentage No field needed in CSSA Loan file
Current Allocated Loan Amount P7 Roll-up to Current Ending SPB (P7)
Ground Lease (Y/S/N) S74 If any property is Y, or S then S74=Y
Other Escrow / Reserve Balances S77 If any property populated, then S77=Y
Most Recent Appraisal Date P74 If Multi-Prop, and all same then populate P74 with date, otherwise, "000000".
Most Recent Appraisal Value P75 Roll-up to CSSA Loan File if populated. If missing any appraisal value, than
populate P75 with "000000"
Date Asset is Expected to Be Resolved P79 If Multi-Prop, latest date from affiliated properties for P79.
Foreclosure Date P42 If Multi-Prop, and all same then populate P42 with date, otherwise, "000000".
- ---------------------------------- ----------- ------------------------------------------------------------------------------
REO Date P43 If Multi-Prop, and all same then populate P43 with date, otherwise, "000000".
Occupancy % P71 [Weighted Average] For P71=Sum((Curr. Allocated % Prop A) *(Occupancy Prop A)
...(Curr. Allocated % Prop Z) *(Occupancy Prop Z)). If missing one,
then, "00000"
Occupancy Date P71 If Multi-Prop, and all same then populate with date, otherwise, "various+K62".
Date Lease Rollover Review No Roll up to the CSSA loan format.
% Sq. Feet expiring 1-12 months No Roll up to the CSSA loan format.
% Sq. Feet expiring 13-24 months No Roll up to the CSSA loan format.
% Sq. Feet expiring 25-36 months No Roll up to the CSSA loan format.
% Sq. Feet expiring 37-48 months No Roll up to the CSSA loan format.
% Sq. Feet expiring 49-60 months No Roll up to the CSSA loan format.
Largest Tenant No Roll up to the CSSA loan format.
</TABLE>
H-3-2
<PAGE>
Commercial Real Estate Secondary Market Securitization Association
CSSA "Property" File
(Data Record Layout)
<TABLE>
<S> <C> <C> <C> <C>
Square Feet of Largest Tenant 38 Numeric 15000
2nd Largest Tenant 39 AN Text For Office, WH, Retail, Industrial *Only if disclosed
in the offering document
Square Feet of 2nd Largest Tenant 40 Numeric 15000
3rd Largest Tenant 41 AN Text For Office, WH, Retail, Industrial *Only if disclosed
in the offering document
Square Feet of 3rd Largest Tenant 42 Numeric 15000
Fiscal Year End Month 43 Numeric 12 Needed to indicate month ending for borrower's
Fiscal Year
Securitization Financials As Of Date 44 AN YYYYMMDD
Revenue At Securitization 45 Numeric 1000000
Operating Expenses At Securitization 46 Numeric 1000000
NOI At Securitization 47 Numeric 1000000
DSCR At Securitization 48 Numeric 1.5
Appraisal Value At Securitization 49 Numeric 1000000
Appraisal Date At Securitization 50 AN YYYYMMDD
Physical Occupancy At Securitization 51 Numeric
Date of Last Inspection 52 AN YYYYMMDD
- ---------------------------------- -------------------------------- -------------------------------------------------------
Preceding FY Financial As of Date 53 AN YYYYMMDD
Preceding Fiscal Year Revenue 54 Numeric 1,000,000
Preceding Fiscal Year Expenses 55 Numeric 1,000,000
Preceding Fiscal Year NOI 56 Numeric 1,000,000
Preceding Fiscal Year Debt Service Amt. 57 Numeric 1,000,000
Preceding Fiscal Year DSCR 58 Numeric 1.30
Preceding Fiscal Year Physical Occupancy 59 Numeric 0.90
Sec Preceding FY Financial As of Date 60 AN YYYYMMDD
Second Preceding FY Revenue 61 Numeric 1,000,000
Second Preceding FY Expenses 62 Numeric 1,000,000
Second Preceding FY NOI 63 Numeric 1,000,000
Second Preceding FY Debt Service 64 Numeric 1,000,000
Second Preceding FY DSCR 65 Numeric 1.30
Sec Preceding FY Physical Occupancy 66 Numeric 0.90
- ---------------------------------- -------------------------------- -------------------------------------------------------
<S> <C> <C>
Square Feet of Largest Tenant No Roll up to the CSSA loan format.
2nd Largest Tenant No Roll up to the CSSA loan format.
Square Feet of 2nd Largest Tenant No Roll up to the CSSA loan format.
3rd Largest Tenant No Roll up to the CSSA loan format.
Square Feet of 3rd Largest Tenant No Roll up to the CSSA loan format.
Fiscal Year End Month No Roll up to the CSSA loan format.
Securitization Financials As Of Date S72 If Multi-Prop, and all same then populate S72 with date,
otherwise, "000000".
Revenue At Securitization S70 Roll up to the CSSA Loan Format, if missing any properties
populate S70 with "0000"
Operating Expenses At Securitization S71 Roll up to the CSSA Loan Format, if missing any properties
populate S71 with "0000"
NOI At Securitization S65 Roll up to the CSSA Loan Format, if missing any properties
populate S85 with "0000"
DSCR At Securitization S66 [Weighted Average] S66=Sum((Allocated % at Sec. Prop A)
*(DSCR Prop A)...((Allocated % at Sec. Prop Z) *(DSCR Prop Z).
If missing one, "00000"
Appraisal Value At Securitization S67 Roll up to the CSSA Loan Format, if missing any properties populate
S70 with "0000"
Appraisal Date At Securitization S68 If Multi-Prop, and all same then populate S68 with date,
otherwise, "000000".
Physical Occupancy At Securitization S69 Weighted Average
Date of Last Inspection
- ---------------------------------------- ------------ ------------------------------------------------------------------
Preceding FY Financial As of Date P58 If Multi-Prop, and all same then populate P58 with date, otherwise,
"000000+K23K46".K1
Preceding Fiscal Year Revenue P52 No Roll up to the CSSA loan format.
Preceding Fiscal Year Expenses P53 No Roll up to the CSSA loan format.
Preceding Fiscal Year NOI P54 No Roll up to the CSSA loan format.
Preceding Fiscal Year Debt Service Amt. P55 No Roll up to the CSSA loan format.
Preceding Fiscal Year DSCR P56 No Roll up to the CSSA loan format.
Preceding Fiscal Year Physical Occupancy P57 No Roll up to the CSSA loan format.
Sec Preceding FY Financial As of Date P65 No Roll up to the CSSA loan format.
Second Preceding FY Revenue P59 No Roll up to the CSSA loan format.
Second Preceding FY Expenses P60 No Roll up to the CSSA loan format.
Second Preceding FY NOI P61 No Roll up to the CSSA loan format.
Second Preceding FY Debt Service P62 No Roll up to the CSSA loan format.
Second Preceding FY DSCR P63 No Roll up to the CSSA loan format.
Sec Preceding FY Physical Occupancy P64 No Roll up to the CSSA loan format.
- ---------------------------------------- ------------ ------------------------------------------------------------------
</TABLE>
H-3-3
<PAGE>
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
$650,344,000 (APPROXIMATE)
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1999-C1
CLASS A-1, CLASS A-2, CLASS X, CLASS B,
CLASS C, CLASS D, CLASS E AND CLASS F
UNDERWRITING AGREEMENT
as of August 5, 1999
Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Banc of America Securities LLC
100 North Tryon Street
NCI-007-11-07
Charlotte, North Carolina 28255
Ladies and Gentlemen:
Salomon Brothers Mortgage Securities VII, Inc., a Delaware corporation
("SBMS"), proposes to sell to Salomon Smith Barney Inc. ("Salomon") and Banc of
America Securities LLC ("BOA"; Salomon and BOA, each an "Underwriter" and,
together, the "Underwriters"), pursuant to this Underwriting Agreement (this
"Agreement"), the classes of Commercial Mortgage Pass-Through Certificates,
Series 1999-C1 that are identified on Schedule I hereto (collectively, the
"Registered Certificates"), each having the initial aggregate stated principal
amount (the initial "Class Principal Balance") or, in the case of the Class X
Certificates, initial aggregate notional principal amount (the initial "Class
Notional Amount") set forth on Schedule I. The Registered Certificates, together
with the Class G, Class H, Class J, Class K, Class L, Class M, Class R-I, Class
R-II, Class R-III and Class Y Certificates issued therewith (the "Privately
Offered Certificates" and, collectively with the Registered Certificates, the
"Certificates"), evidence the entire beneficial ownership interest in the assets
of a trust to be created by SBMS (such trust, the "Trust"; and such assets
collectively, the "Trust Fund"). The Trust Fund consists primarily of a pool
(the "Mortgage Pool") of multifamily and commercial mortgage loans (the
"Mortgage Loans") that will have, as of the close of business on August 1, 1999
(the "Cut-off Date"), after taking into account all payments of principal due on
the Mortgage Loans on or before such date, whether or not received, an aggregate
principal balance
<PAGE>
of $734,852,899 (subject to a variance of plus or minus 5.0%). Certain of the
Mortgage Loans (or the right to have such transferred to the Trust) will be
acquired by SBMS from Salomon Brothers Realty Corp. ("SBRC"; and such Mortgage
Loans, the "SBRC Mortgage Loans"), pursuant to a mortgage loan purchase
agreement, dated as of the date hereof (the "SBRC/SBMS Mortgage Loan Purchase
Agreement"), between SBRC and SBMS. The remaining Mortgage Loans will be
acquired by SBMS from Llama Capital Mortgage Company Limited Partnership
("LCMC"; and such remaining Mortgage Loans, the "LCMC Mortgage Loans"), pursuant
to a mortgage loan purchase agreement dated as of the date hereof (the
"LCMC/SBMS Mortgage Loan Purchase Agreement") between LCMC and SBMS. At least
three separate real estate mortgage investment conduit ("REMIC") elections will
be made with respect to the Trust Fund for federal income tax purposes. In
addition, certain Trust Fund assets will constitute two separate grantor trusts
for federal income tax purposes. The Trust is to be created and the Certificates
are to be issued under a pooling and servicing agreement, dated as of the
Cut-off Date (the "Pooling and Servicing Agreement"), among SBMS as depositor,
SBRC and LCMC as mortgage loan sellers (in such capacity, each, a "Mortgage Loan
Seller" and together, the "Mortgage Loan Sellers"), GMAC Commercial Mortgage
Corporation, as master servicer (the "Master Servicer"), BNY Asset Solutions
LLC, as special servicer (the "Special Servicer") and The Chase Manhattan Bank
as trustee (in such capacity, the "Trustee"). Capitalized terms used but not
defined herein have the meanings assigned thereto in the Pooling and Servicing
Agreement.
1. REPRESENTATIONS, WARRANTIES AND COVENANTS. SBMS represents and
warrants to, and covenants with, each of the Underwriters that:
(a) A registration statement (File No. 333-72647) on Form S-3 has been
filed with the Securities and Exchange Commission (the "Commission"), and has
become effective under the Securities Act of 1933, as amended (the "Securities
Act"); such registration statement includes a prospectus which, as supplemented,
shall be, and may include a preliminary prospectus supplement which, as
completed, is proposed to be, used in connection with the sale of the Registered
Certificates. Such registration statement, as amended to the date of this
Agreement, is hereinafter referred to as the "Registration Statement"; such
prospectus (which shall be in the form in which it has most recently been filed,
as the same is proposed to be added to or changed), as first supplemented by a
prospectus supplement relating to the Registered Certificates, filed, or
transmitted for filing, with the Commission pursuant to Rule 424(b) under the
Securities Act and used in connection with the sale of the Registered
Certificates, is hereinafter referred to as the "Prospectus"; and such
prospectus supplement is hereinafter referred to as the "Prospectus Supplement".
Any preliminary form of Prospectus that has heretofore been filed pursuant to
Rule 424 hereinafter is called the "Preliminary Prospectus". Any reference
herein to the terms "amend", "amendment" or "supplement" with respect to the
Registration Statement or the Prospectus shall be deemed to refer to and include
the filing of any document under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), deemed to be incorporated by reference therein after the
date hereof. SBMS will file with the Commission (i) within fifteen (15) days of
the issuance of the Certificates a Current Report on Form 8-K (for purposes of
filing the Pooling and Servicing Agreement and other material contracts) and
(ii) in the time period specified in Section 5(e) hereof, a Current Report on
Form 8-K
2
<PAGE>
(for purposes of filing certain Computational Materials and ABS Term Sheets as
described in Section 5(e) hereof).
(b) The Registration Statement, as of the date it became effective, and
the Prospectus, as of the date of the Prospectus Supplement, and any revisions
or amendments thereof or supplements thereto filed prior to the termination of
the offering of the Registered Certificates, as of their respective effective or
issue dates, conformed or will conform in all material respects to the
requirements of the Securities Act and the rules and regulations of the
Commission thereunder applicable to the use of such documents as of such
respective dates, and the Registration Statement and the Prospectus, as revised,
amended or supplemented as of the Closing Date (as defined in Section 3), will
conform in all material respects to the requirements of the Securities Act and
the rules and regulations of the Commission thereunder applicable to the use of
such documents as of the Closing Date; and no such document, as of such
respective dates and, in the case of the Prospectus and any revisions or
amendments thereof or supplements thereto filed prior to the Closing Date, as of
the Closing Date, included or will include any untrue statement of a material
fact or omitted or will omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that SBMS does not make any representations, warranties or agreements as to (A)
the information contained in or omitted from the Prospectus or any revision or
amendment thereof or supplement thereto in reliance upon and in conformity with
information furnished in writing by or on behalf of the Underwriters or the
Mortgage Loan Sellers specifically for use in connection with the preparation of
the Prospectus or any revision or amendment thereof or supplement thereto or (B)
any information in any Computational Materials and ABS Term Sheets (each as
defined in Section 9) provided by the Salomon to prospective investors in
connection with the sale of the Registered Certificates. There are no contracts
or other documents relating to SBMS of a character required to be described in
or to be filed as exhibits to the Registration Statement, as of the date of the
Prospectus Supplement, which were not described or filed as required.
(c) As of the Closing Date, the Registered Certificates will be duly
authorized by SBMS, and, when the Registered Certificates have been duly
executed and authenticated in the manner contemplated in the Pooling and
Servicing Agreement and have been delivered to and paid for by the Underwriters
pursuant to this Agreement, the Registered Certificates will be validly issued
and outstanding and entitled to the benefits provided by the Pooling and
Servicing Agreement.
(d) Arthur Andersen LLP ("Arthur Andersen") is an independent public
accountant with respect to SBMS as required by the Securities Act and the rules
and regulations thereunder.
(e) As of the Closing Date, the Pooling and Servicing Agreement will
have been duly authorized, executed and delivered by SBMS and, assuming the
valid authorization, execution and delivery thereof by the other parties
thereto, will constitute a valid and binding agreement of SBMS enforceable in
accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization or other laws relating to or affecting
the enforcement of creditors' rights and by general principles of equity.
3
<PAGE>
(f) This Agreement has been duly authorized, executed and delivered by
SBMS and, assuming the valid authorization, execution and delivery hereof by
each of the Underwriters, constitutes a valid and binding obligation of SBMS
enforceable in accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, reorganization or other laws relating to or affecting
the enforcement of creditors' rights, by general principles of equity and by
public policy considerations underlying the securities laws, to the extent that
such public policy considerations limit the enforceability of the provisions of
this Agreement that purport or are construed to provide indemnification for
securities laws liabilities.
(g) SBMS has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its business as
described in the Prospectus.
(h) SBMS is not aware of (i) any request by the Commission for any
further amendment of the Registration Statement or the Prospectus or for any
additional information, (ii) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose or (iii) any notification with
respect to the suspension of the qualification of the Registered Certificates
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose.
(i) SBMS is not, and the issuance and sale of the Registered
Certificates in the manner contemplated by the Prospectus will not cause SBMS to
be, subject to registration or regulation as an investment company or affiliate
of an investment company under the Investment Company Act of 1940, as amended
(the "Investment Company Act").
(j) The transfer of the Mortgage Loans to the Trust and the sale of the
Certificates to each of the Underwriters, at the Closing Date, will be treated
by SBMS for financial accounting and reporting purposes as a sale of assets and
not as a pledge of assets to secure debt.
2. PURCHASE AND SALE. Subject to the terms and conditions and in
reliance on the representations and warranties herein set forth, SBMS agrees to
sell to each of the Underwriters, and each of the Underwriters, severally and
not jointly, agrees to purchase from SBMS, the respective portions of the Class
Principal Balance or Class Notional Amount of each class of Registered
Certificates specified on Schedule I hereto, at the purchase price for each such
class as set forth on such Schedule I.
3. DELIVERY AND PAYMENT. Delivery of and payment for the Registered
Certificates shall be made in the manner, on the date and at the time specified
in Schedule I hereto, which date and time may be changed by agreement among the
Underwriters and SBMS (such date and time of delivery of and payment for the
Registered Certificates being hereinafter referred to as the "Closing Date").
Delivery of each Underwriter's allotment of the Registered Certificates shall be
made to the related Underwriter against payment by such Underwriter of the
purchase price therefor to or upon the order of SBMS in same-day funds by
federal funds wire (or by such other method as such
4
<PAGE>
Underwriter and SBMS may agree). Unless delivery is made through the facilities
of The Depository Trust Company, the Registered Certificates of each class
thereof shall be registered in such names and in such authorized denominations
as the related Underwriter may have requested not less than three (3) full
business days prior to the Closing Date.
SBMS agrees to have the Registered Certificates available for
inspection, checking and packaging in New York, New York, at any time before
3:00 p.m. New York City time on the business day prior to the Closing Date.
4. OFFERING BY THE UNDERWRITERS. It is understood that the Underwriters
propose to offer the Registered Certificates for sale as set forth in the
Prospectus. It is further understood that SBMS, in reliance upon Policy
Statement 105, has not filed and will not file an offering statement pursuant to
Section 352-c of the General Business Law of the State of New York with respect
to the Registered Certificates. As required by Policy Statement 105, each
Underwriter therefore covenants and agrees with SBMS that sales of the
Registered Certificates made by such Underwriter in and from the State of New
York will be made only to institutional investors within the meaning of Policy
Statement 105.
5. AGREEMENTS. SBMS agrees with each of the Underwriters that:
(a) SBMS will not file any amendment to the Registration Statement
subsequent to the date hereof and prior to the Closing Date, and will not file
any supplement to the Prospectus relating to or affecting the Registered
Certificates at any time, except as contemplated by Section 5(e) or unless SBMS
has furnished a copy to Salomon for its review prior to filing, and will not
file any such proposed amendment or supplement to which Salomon reasonably
objects. Subject to the foregoing sentence, SBMS will cause the Prospectus to be
filed, or transmitted for filing, with the Commission pursuant to Rule 424(b)
under the Securities Act and will promptly advise each Underwriter when the
Prospectus has been so filed, or transmitted for filing, and, prior to the
termination of the offering of the Registered Certificates, will also promptly
advise each Underwriter (i) when any amendment to the Registration Statement
relating to the Registered Certificates has become effective or any revision of
or supplement to the Prospectus has been so filed or transmitted for filing,
(ii) of any request by the Commission for any amendment of the Registration
Statement or the Prospectus or for any additional information, (iii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding for
that purpose and (iv) of the receipt by SBMS of any notification with respect to
the suspension of the qualification of the Registered Certificates for sale in
any jurisdiction or the institution or threatening of any proceeding for such
purpose. SBMS will use its best efforts to prevent the issuance of any such stop
order and, if issued, to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Registered
Certificates is required to be delivered under the Securities Act, (i) any event
occurs as a result of which the Prospectus, as then amended or supplemented,
would include any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which
5
<PAGE>
they were made, not misleading, or (ii) it shall be necessary to revise, amend
or supplement the Prospectus to comply with the Securities Act or the rules and
regulations of the Commission thereunder, SBMS promptly will prepare and file
with the Commission, subject to paragraph (a) of this Section 5, a revision,
amendment or supplement that will correct such statement or omission or effect
such compliance.
(c) Upon request, SBMS will furnish to each Underwriter and counsel for
such Underwriter, without charge, signed (if available) copies of the
Registration Statement (including exhibits thereto) and, so long as delivery of
a prospectus relating to the Registered Certificates is required under the
Securities Act, as many copies of the Prospectus and any revisions or amendments
thereof or supplements thereto as may be reasonably requested.
(d) SBMS will use its best efforts to arrange for the qualification of
the Registered Certificates for sale under the laws of such jurisdictions
Salomon may designate, to maintain such qualifications in effect so long as
required for the distribution of the Registered Certificates and to arrange for
the determination of the legality of the Registered Certificates for purchase by
institutional investors; provided, however, that SBMS shall not be required to
qualify to do business in any jurisdiction where it is not now so qualified or
to take any action that would subject it to general or unlimited service of
process in any jurisdiction where it is not now so subject.
(e) SBMS will cause or, if appropriate, has caused any Computational
Materials and ABS Term Sheets (each as defined in Section 9) with respect to the
Registered Certificates, which are or have been delivered by the Underwriters to
SBMS pursuant to or as contemplated by Section 9, to be filed with the
Commission on a Current Report on Form 8-K (the "Current Report") pursuant to
Rule 13a-11 under the Exchange Act not later than, in each such case, the
business day immediately following the later of (i) the day on which such
Computational Materials or ABS Term Sheets are delivered to counsel for SBMS by
the Underwriters (it being understood that any such material that is delivered
after 10:30 a.m., New York City time, on a business day shall be deemed to have
been delivered on the next business day) and (ii) the date hereof; and, if such
filing is subsequent to the date hereof, SBMS will promptly advise the
Underwriters when each such Current Report has been so filed. If any Collateral
Term Sheet (as defined in Section 9) is provided by the Underwriter to potential
investors in the Registered Certificates, SBMS will cause each such Collateral
Term Sheet that is delivered by the Underwriter to SBMS to be filed with the
Commission on a Current Report pursuant to Rule 13a-11 under the Exchange Act on
the business day immediately following the day on which such Collateral Term
Sheet is delivered to counsel for SBMS by the Underwriter (it being understood
that any such material that is delivered after 10:30 a.m., New York City time,
on a business day shall be deemed to have been delivered on the next business
day). The parties agree that any material described in this Section 5(e) that is
delivered after 2:00 p.m., New York City time, on a business day shall be deemed
to have been delivered on the next business day. Each such Current Report shall
be incorporated by reference in the Prospectus and the Registration Statement.
Notwithstanding the foregoing, SBMS shall have no obligation to file materials
provided by the Underwriters pursuant to or as contemplated by Section 9 which,
in the reasonable determination of SBMS after making reasonable efforts to
consult with the Underwriters, are not required to be filed
6
<PAGE>
pursuant to the No-Action Letters (as defined in Section 9), or which contain
erroneous information or contain any untrue statement of a material fact, or
which, when read in conjunction with the Prospectus, omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading; it being understood, however, that SBMS shall have no obligation
to review or pass upon the accuracy or adequacy of, or to correct, any
Computational Materials or ABS Term Sheets provided by the Underwriters to SBMS
pursuant to or as contemplated by Section 9 hereof.
(f) SBMS will make generally available to Registered Certificateholders
as soon as practicable, but in any event not later than eighteen months after
the filing of the Prospectus pursuant to Rule 424(b) under the Securities Act,
an earnings statement (which need not be audited) with respect to the Mortgage
Pool complying with Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder (including at the option of SBMS, Rule
158 of the Securities Act) which may be the annual report filed with the
Commission with respect to the Trust.
6. CONDITIONS TO THE OBLIGATIONS OF EACH UNDERWRITER AND SBMS. The
obligation of each Underwriter to purchase from SMBS, and the obligation of SBMS
to sell to such Underwriter, its allotment of the Registered Certificates shall
be subject to the accuracy of the representations and warranties on the part of
SBMS and such Underwriter contained herein as of the date hereof and as of the
Closing Date, to the accuracy of the statements of SBMS and such Underwriter
made in any officer's certificate delivered pursuant to the provisions hereof,
to the performance by SBMS and such Underwriter of their respective obligations
hereunder and to the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been instituted and be pending or shall have been threatened.
(b) SBMS shall have furnished to such Underwriter:
(i) An executed copy of the Pooling and Servicing Agreement;
(ii) An opinion of Sidley & Austin, counsel for SBMS, dated
the Closing Date, substantially to the effect that:
(A) SBMS is validly existing as a corporation in good
standing under the laws of the State of Delaware, with
corporate power and authority under such laws to enter into
and perform its obligations under the Pooling and Servicing
Agreement;
7
<PAGE>
(B) The Registered Certificates have been duly
authorized by SBMS and, when the Registered Certificates have
been duly executed and authenticated in the manner
contemplated in the Pooling and Servicing Agreement and have
been delivered to and paid for by the Underwriters pursuant to
this Agreement, the Registered Certificates will be validly
issued and outstanding and entitled to the benefits provided
by the Pooling and Servicing Agreement;
(C) The Pooling and Servicing Agreement has been duly
authorized, executed and delivered by SBMS and, upon the due
authorization, execution and delivery by the other parties
thereto, will constitute a valid, legal and binding agreement
of SBMS, enforceable against SBMS in accordance with its
terms, except as enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws
relating to or affecting the enforcement of creditors' rights
generally and by general principles of equity, whether
enforcement is sought in a proceeding in equity or at law;
(D) The Pooling and Servicing Agreement is not
required to be qualified under the Trust Indenture Act of
1939, as amended, and the Trust is not required to be
registered under the Investment Company Act of 1940, as
amended;
(E) The Registration Statement has become effective
under the Securities Act, and, to the best of such counsel's
knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted and are pending or have been
threatened under the Securities Act;
(F) The Registration Statement, at the time it became
effective, and the Prospectus, as of the date of the
Prospectus Supplement, and each revision or amendment thereof
or supplement thereto relating to the Registered Certificates,
as of its effective or issue date (except in each case for
accounting, financial and statistical statements included
therein or omitted therefrom and for Computational Materials
and ABS Term Sheets, as to which such counsel has not been
requested to comment), appeared on their respective faces to
be appropriately responsive in all material respects to the
requirements of the Securities Act and the rules and
regulations of the Commission thereunder applicable to such
documents as of such respective dates; and the Prospectus, as
revised, amended or supplemented as of the date hereof (except
for accounting, financial and statistical statements included
therein or omitted therefrom, as to which such counsel has not
been requested to comment), conforms in all material respects
to the requirements of the Securities Act and the rules and
regulations of the Commission thereunder applicable to use of
the Prospectus (as so revised, amended or supplemented) as of
the date hereof;
8
<PAGE>
(G) No consent, approval, authorization or order of
any federal or State of New York court or agency or other
governmental body is required for the consummation by SBMS of
the transactions contemplated by the terms of this Agreement,
except such as may be required under the securities or "blue
sky" laws of any state in connection with the purchase and the
offer and sale of the Registered Certificates by the
Underwriters as to which such counsel need not express any
opinion, and except such as have been obtained;
(H) Neither the sale of the Registered Certificates
to the Underwriters pursuant to this Agreement nor the
consummation of any other of the transactions contemplated by
or the fulfillment by SBMS of the terms of this Agreement will
result in a breach of any term or provision of the certificate
of incorporation or by-laws of SBMS or any federal or State of
New York statute or regulation, except such counsel need
express no opinion as to compliance with the securities laws
of New York and other particular States in connection with the
purchase and sale of the Registered Certificates by the
Underwriter;
(I) Such counsel does not know , having made no
independent investigation, of any contracts or other documents
relating to SBMS of a character required to be described in or
to be filed as exhibits to the Registration Statement, as of
the date of the Prospectus Supplement, that were not described
or filed as required; and
(J) This Agreement has been duly authorized, executed
and delivered by SBMS;
(K) The statements in the Prospectus under the
headings "ERISA Considerations", "Certain ERISA
Considerations", "Material Federal Income Tax Consequences"
and "Certain Federal Income Tax Consequences", to the extent
that they describe certain matters of federal law or legal
conclusions with respect thereto, while not discussing all
possible consequences of an investment in the Registered
Certificates to all investors, provide a fair and accurate
summary of such matters and conclusions set forth under such
headings;
(L) As described in the Prospectus Supplement and
assuming compliance with the provisions of the Pooling and
Servicing Agreement, (1) REMIC I will qualify as a REMIC
within the meaning of Sections 860A through 860G (the "REMIC
Provisions") of the Internal Revenue Code of 1986, and the
REMIC I Regular Interests will be "regular interests" and the
Class R-I Certificates will evidence the sole class of
"residual interests" in REMIC I (as both terms are defined in
the REMIC Provisions in effect on the Closing Date), (2) REMIC
II will qualify as a REMIC within the meaning of the REMIC
Provisions, and the REMIC II
9
<PAGE>
Regular Interests will be "regular interests" and the Class
R-II Certificates will evidence the sole class of "residual
interests" in REMIC II and (3) REMIC III will qualify as a
REMIC within the meaning of the REMIC Provisions, and the
Class 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
and Class M Certificates will evidence "regular interests" and
the Class R-III Certificates will evidence the sole class of
"residual interests" in REMIC III;
(M) Assuming compliance with the provisions of the
Pooling and Servicing Agreement, for City and State of New
York income and corporation franchise tax purposes, REMIC I,
REMIC II and REMIC III will each be classified as a REMIC and
not as a corporation, partnership or trust, in conformity with
the federal income tax treatment of REMIC I, REMIC II and
REMIC III. Accordingly, the Trust Fund will be exempt from all
City and State of New York taxation imposed on its income,
franchise or capital stock, and its assets will not be
included in the calculation of any franchise tax liability;
and
(N) The statements set forth in the Prospectus
Supplement under the headings "Description of the Offered
Certificates" and "Servicing of the Mortgage Loans" and in the
Prospectus under the headings "Description of the
Certificates" and "Description of the Agreements", insofar as
such statements purport to summarize certain material
provisions of the Registered Certificates and the Pooling and
Servicing Agreement, provide a fair and accurate summary of
such provisions.
In giving its opinions, Sidley & Austin, counsel to SBMS,
shall additionally state that, based on conferences and telephone
conversations with representatives of the Mortgage Loan Sellers, the
Underwriters, SBMS, the Trustee, the Master Servicer, the Special
Servicer and their respective counsel (but without having reviewed any
of the mortgage notes, mortgages or other documents relating to the
Mortgage Loans or made any inquiry of any originator of any Mortgage
Loan not referenced above), nothing has come to such counsel's
attention that would lead it to believe that the Prospectus (other
than: any accounting, financial or statistical information contained in
or omitted from the Prospectus and information incorporated by
reference into the Prospectus and any information relating to the
characteristics of the Mortgage Loans and the related borrowers and
mortgaged properties, all as to which such counsel has not been
requested to comment), at the date of the Prospectus Supplement or at
the Closing Date, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
Such opinion may express its reliance as to factual matters on
the representations and warranties made by, and on certificates or
other documents furnished by officers and/or authorized representatives
of, the parties to this Agreement and the Pooling and Servicing
10
<PAGE>
Agreement and on certificates furnished by public officials. Such
opinion may assume the due authorization, execution and delivery of the
instruments and documents referred to therein by the parties thereto.
Such opinion may be qualified as an opinion only on the laws of the
State of New York, the General Corporation Law of the State of Delaware
and the federal law of the United States.
(iii) Such Underwriter shall have received copies of all legal
opinion letters delivered by Sidley & Austin to the Rating Agencies in
connection with the issuance of the Registered Certificates,
accompanied in each case by a letter signed by Sidley & Austin stating
that such Underwriter may rely on such opinion letter as if it were
addressed to such Underwriter as of the date thereof;
(iv) Good standing certificates regarding SBMS, each of the
Mortgage Loan Sellers, the Master Servicer, the Special Servicer and
the Trustee from the Secretary of State (or other appropriate
authority) of the jurisdiction under which each such entity has been
formed, dated not earlier than 30 days prior to the Closing Date;
(v) Certificates of SBMS, each of the Mortgage Loan Sellers,
the Master Servicer, the Special Servicer and the Trustee, each dated
the Closing Date and signed by an executive officer or authorized
signatory of such party, to the effect that the representations and
warranties of such party herein and/or in the Pooling and Servicing
Agreement, as applicable, are true and correct in all material respects
on and as of the Closing Date with the same effect as if made on the
Closing Date, and SBMS has complied in all material respects with all
agreements and satisfied all the conditions on its part to be performed
or satisfied at or prior to the Closing Date; and
(vi) Officer's certificates, dated the Closing Date and signed
by the Secretary or an assistant secretary of SBMS, each of the
Mortgage Loan Sellers, the Master Servicer, the Special Servicer and
the Trustee, to the effect that each individual who, as an officer or
representative of such party, signed this Agreement, the Pooling and
Servicing Agreement or any other document or certificate delivered on
or before the Closing Date in connection with the transactions
contemplated herein or in the Pooling and Servicing Agreement, was at
the respective times of such signing and delivery, and is as of the
Closing Date, duly elected or appointed, qualified and acting as such
officer or representative, and the signatures of such persons appearing
on such documents and certificates are their genuine signatures. Such
certificate shall be accompanied by true and complete copies (certified
as such by the Secretary or an assistant secretary of such party) of
the organizational documents of such party, as in effect on the Closing
Date, and of the resolutions of such party and any required
shareholder, member or partner consent relating to the transactions
contemplated in this Agreement and the Pooling and Servicing Agreement.
11
<PAGE>
(c) The Underwriters shall have received, with respect to each of the
Mortgage Loan Sellers, the Master Servicer, the Special Servicer and the
Trustee, a favorable opinion of counsel, dated the Closing Date, addressing the
valid existence and good standing of such party under the laws of the
jurisdiction of its organization, the due authorization, execution and delivery
of the Pooling and Servicing Agreement by such party and, subject to the same
limitations as set forth in Section 6(b)(ii)(C), the enforceability of the
Pooling and Servicing Agreement against such party. Such opinion may express its
reliance as to factual matters on representations and warranties made by, and on
certificates or other documents furnished by officers and/or authorized
representatives of parties to this Agreement and the Pooling and Servicing
Agreement and on certificates furnished by public officials. Such opinion may
assume the due authorization, execution and delivery of the instruments and
documents referred to therein by the parties thereto other than the party on
behalf of which such opinion is being rendered. Such opinion may be qualified as
an opinion only on the laws of the jurisdiction in which the party on whose
behalf such opinion is being rendered is organized, the laws of the State of New
York and the federal law of the United States.
(d) SBMS and the Underwriters shall have received from Arthur Andersen,
certified public accountants, various comfort letters, dated, as applicable, the
date of the preliminary Prospectus Supplement, the date of the Prospectus
Supplement or other date acceptable to SBMS and the Underwriters, in form and
substance reasonably satisfactory to SBMS and the Underwriters, stating in
effect that:
(i) They have performed certain specified procedures as a
result of which they have determined that the information of an
accounting, financial or statistical nature set forth in the Prospectus
Supplement under the caption "Description of the Mortgage Pool" and on
Annex A thereto agrees with the data sheet or computer tape prepared by
the Mortgage Loan Sellers, unless otherwise noted in such letter(s);
and
(ii) They have compared the data contained in the data sheet
or computer tape referred to in the immediately preceding clause (i) to
information contained in an agreed upon sampling of the Mortgage Loan
files and in such other sources as shall be specified by them, and
found such data and information to be in agreement, unless otherwise
noted in such letter.
(e) SBMS and the Underwriters shall have received from Arthur Andersen,
certified public accountants, a letter dated on or about the Closing Date, in
form and substance reasonably satisfactory to SBMS and the Underwriters, to the
effect that they have performed certain specified procedures, all of which have
been agreed to by SBMS and the Underwriters, as a result of which they confirmed
the information of an accounting, financial or statistical nature included in
the Prospectus Supplement under the caption "Yield and Maturity Considerations".
(f) Each Underwriter shall have delivered to SBMS and to the other
Underwriter an officer's certificate (i) stating that attached thereto are all
of the information, tables, charts and other items that constitute
"Computational Materials" or "ABS Term Sheets" prepared by such
12
<PAGE>
Underwriter that are required to be filed with the Commission pursuant to the
terms of the No-Action Letters and stating that such Underwriter has otherwise
complied with the terms of the No-Action Letters and (ii) representing that,
other than the items described in clause (i), no term sheets, collateral
information or other data in written form that would be required to be filed
with the Commission pursuant to the No-Action Letters were furnished by such
Underwriter to actual or potential investors for the Registered Certificates
prior to the Closing Date.
(g) Arthur Andersen shall have furnished to SBMS and each Underwriter a
letter or letters, each in form and substance satisfactory to SBMS, relating to
the Computational Materials and ABS Terms Sheets of such Underwriter filed in
accordance with Section 5(f), dated the date of the related Current Report on
Form 8-K and stating in effect that:
(i) using the assumptions and methodology used by such
Underwriter, all of which shall be described by reference in the
letter, they have recalculated the numerical data and dates set forth
in such Computational Materials and ABS Term Sheets of such Underwriter
(or portions thereof) attached to such letter, compared the results of
their calculations to the corresponding items in such Computational
Materials and ABS Term Sheets (or portions thereof) and found such
items to be in agreement with the respective results of such
calculation;
(ii) if such Computational Materials and ABS Term Sheets
include data reflecting the distribution of interest at other than a
fixed rate, or reflecting other characteristics that give rise to the
use of tables in such Computational Materials and ABS Term Sheets, such
letter shall also set forth such other statements as are customarily
set forth by Arthur Andersen in such letter with respect to such data;
and
(iii) they have performed certain specified procedures as a
result of which they have determined that the information of an
accounting, financial or statistical nature set forth in such
Computational Materials and ABS Term Sheets agrees with the data sheet
or computer tape prepared by each Mortgage Loan Seller, unless
otherwise indicated in such letter.
(h) The Underwriters shall have received an opinion of Andrews & Kurth
L.L.P., counsel to the Underwriters, in form and substance satisfactory to them.
(i) SBMS and the Underwriters shall have received an opinion of
counsel, dated the Closing Date, from Andrews & Kurth L.L.P., stating that,
based on conferences and telephone conversations with representatives of the
Mortgage Loan Sellers, the Underwriters, SBMS, the Trustee, the Master Servicer,
the Special Servicer and their respective counsel, and further based on a review
of certain legal documents relating to the Mortgage Loans and a compilation of
the information in the loan summaries for the Mortgage Loans (but otherwise
without having reviewed any of the mortgage notes, mortgages or other documents
relating to the Mortgage Loans or made any inquiry of any originator of any
Mortgage Loan), nothing has come to such counsel's attention
13
<PAGE>
that would lead him to believe that the Prospectus (except for: any accounting,
financial or statistical information contained in or omitted from the Prospectus
and information incorporated by reference into the Prospectus, all as to which
such counsel has not been requested to comment), at the date of the Prospectus
Supplement or at the Closing Date, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
(j) Subsequent to the date hereof, there shall not have occurred any
change, or any development involving a prospective change, in or affecting the
business or properties of SBMS that Salomon concludes, in its opinion after
consultation with SBMS, materially impairs the investment quality of the
Registered Certificates so as to make it impractical or inadvisable to proceed
with the public offering or the delivery of the Registered Certificates as
contemplated by the Prospectus.
(k) The Registered Certificates shall have been assigned ratings no
less than those set forth on Schedule I and such ratings shall not have been
rescinded or qualified.
7. INDEMNIFICATION AND CONTRIBUTION. (a) SBMS agrees to indemnify and
hold harmless each Underwriter and each person who controls such Underwriter
within the meaning of either the Securities Act or the Exchange Act against any
and all losses, claims, damages or liabilities, joint or several, to which it or
any of them may become subject under the Securities Act, the Exchange Act, or
other federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or in the
Prospectus, or in any revision or amendment thereof or supplement thereto, or in
any other filing incorporated by reference therein, or arise out of or are based
upon the omission or alleged omission (in the case of any Computational
Materials or ABS Term Sheets in respect of which SBMS agrees to indemnify such
Underwriter, as set forth below, when such are read in conjunction with the
Prospectus) to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and agrees to reimburse each such
indemnified party for any legal or other expenses reasonably incurred by it or
him in connection with investigating or defending any such loss, claim, damage,
liability or action; provided that SBMS will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon (i) any such untrue statement or alleged untrue statement or omission
or alleged omission made in the Prospectus or any revision or amendment thereof
or supplement thereto in reliance upon and in conformity with written
information furnished to SBMS by or on behalf of such Underwriter specifically
for use in connection with the preparation thereof, (ii) any such untrue
statement or alleged untrue statement or omission or alleged omission that is,
in accordance with the terms thereof, covered by the indemnification provided by
SBRC pursuant to the SBRC/SBMS Mortgage Loan Purchase Agreement or by LCMC
pursuant to the LCMC/SBMS Mortgage Loan Purchase Agreement, (iii) any such
untrue statement or alleged untrue statement is made in any Computational
Materials or ABS Term Sheets provided by either such Underwriter or the other
Underwriter to prospective investors in connection with the sale of the
Registered Certificates and incorporated by reference into
14
<PAGE>
the Registration Statement or Prospectus as a result of any filing pursuant to
Section 5(e), (iv) any omission or alleged omission to state in any
Computational Materials or ABS Term Sheets provided by either such Underwriter
or the other Underwriter to prospective investors in connection with the sale of
the Registered Certificates and incorporated by reference into the Registration
Statement or Prospectus as a result of any filing pursuant to Section 5(e), a
material fact that, when read in conjunction with the Prospectus, is required to
be stated therein or necessary to make the statements therein not misleading, or
(v) any breach, inaccuracy or untruth of any of the statements, representations,
warranties and/or covenants made by such Underwriter and set forth in Section
6(f) and/or Section 9(b). This indemnity agreement will be in addition to any
liability that SBMS may otherwise have.
(b) Each Underwriter, severally and not jointly, agrees to indemnify
and hold harmless SBMS and each of its directors, each of its officers who
signed the Registration Statement or any amendments thereof, and each person who
controls SBMS within the meaning of either the Securities Act or the Exchange
Act, to the same extent as the foregoing indemnities from SBMS to the
Underwriters, but only with reference to (i) written information furnished to
SBMS by or on behalf of such Underwriter, specifically for use in connection
with the preparation of the Prospectus or any revision or amendment thereof or
supplement thereto, (ii) any untrue statement or alleged untrue statement or
omission or alleged omission made in Computational Materials or ABS Term Sheets
provided by such Underwriter to prospective investors in connection with the
sale of the Registered Certificates and incorporated by reference into the
Registration Statement or Prospectus as a result of any filing pursuant to
Section 5(e) (except that no such indemnity shall be available for any losses,
claims, damages or liabilities, or actions in respect thereof, resulting from
any Collateral Error (as defined below), other than a Corrected Collateral Error
(as defined below)) and (iii) any breach, inaccuracy or untruth of any of the
statements, representations, warranties and/or covenants set forth in Section
6(f) and/or Section 9(b). This indemnity agreement will be in addition to any
liability that the Underwriters may otherwise have. SBMS acknowledges that the
statements set forth in the third sentence of the final paragraph on the cover
page of the Prospectus Supplement, in the second sentence under the heading
"Risk Factors -- Risks Related to the Offered Certificates -- Many Factors,
Including Lack of Liquidity, Can Adversely Affect the Market Value of Your
Certificates", and in the first two sentences of the second paragraph, the first
sentence of the third paragraph and the first sentence of the fifth paragraph
under the heading "Method of Distribution" in the Prospectus Supplement,
constitute the only information furnished in writing by or on behalf of either
Underwriter for inclusion in the Prospectus or any revision or amendment thereof
or supplement thereto, and each Underwriter confirms that such statements
attributable thereto are correct.
As used herein, "Collateral Error" shall mean any error in the
information concerning the Mortgage Loans furnished by either Mortgage Loan
Sellers to SBMS or either Underwriter in writing or by electronic transmission
that was used in the preparation of any Computational Materials or ABS Term
Sheets; and "Corrected Collateral Error" shall mean any Collateral Error as to
which the Underwriter, not later than the date hereof, was notified in writing
or provided in
15
<PAGE>
written or electronic form information superseding or correcting such Collateral
Error, including, without limitation, as part of the Prospectus.
(c) Promptly after receipt by an indemnified party under this Section 7
of notice of the commencement of any suit, action, proceeding (including,
without limitation, any governmental or regulatory investigation), claim or
demand, such indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 7, notify the indemnifying
party in writing of the commencement thereof, but the omission so to notify the
indemnifying party will not relieve the indemnifying party from any liability
that it may have to any indemnified party otherwise than under this Section 7;
provided, however, that any increase in such liability as a result of such
failure to notify shall not be an expense of the indemnifying party. In case any
such action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein, and to the extent that it may elect by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party; provided that, if the
defendants in any such action include both the indemnified party and the
indemnifying party, and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties that are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party for legal expenses of other counsel or other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof unless (i) the indemnified party shall have employed
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel (in addition to any local counsel), approved by
the indemnified party or parties, representing the indemnified party or parties
who are parties to such action), (ii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time period after notice of
commencement of the action or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party; and except that, if clause (i) or (iii) is applicable, such
liability shall be only in respect of the counsel referred to in such clause (i)
or (iii). No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (A) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (B) does not include a statement as to or an admission
of fault, culpability or a failure to act, by or on behalf of the indemnified
party.
16
<PAGE>
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 7 is due
in accordance with its terms but is for any reason held by a court to be
unavailable on grounds of policy or otherwise, SBMS and each Underwriter shall
each contribute to the aggregate losses, claims, damages and liabilities
(including legal and other expenses reasonably incurred in connection with
investigating or defending same) to which SBMS and such Underwriter may be
subject in such proportion so that such Underwriter is responsible for 0.5%
thereof and SBMS is responsible for the balance; provided, however, that if such
allocation is not permitted by applicable law, then the indemnifying party shall
contribute in such proportion as is appropriate to reflect not only the relative
benefits referred to above but also the relative fault of SBMS on the one hand
and the related Underwriter on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. Notwithstanding the foregoing
provisions of this Section 7(d), neither Salomon nor BOA shall be required to
contribute any amount in excess of the amount by which the total price at which
the Registered Certificates underwritten by it and distributed to the public,
were sold, exceeds the amount of any damages which such party has otherwise been
required to pay by reason of such untrue statement or omission or alleged untrue
statement or omission. The relative fault of SBMS on the one hand and an
Underwriter on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by SBMS or by such Underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. Notwithstanding the foregoing, however, no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 7,
each person who controls an Underwriter within the meaning of either the
Securities Act or the Exchange Act shall have the same rights to contribution as
such Underwriter, and each person who controls SBMS within the meaning of either
the Securities Act or the Exchange Act, each officer of SBMS who shall have
signed the Registration Statement or any amendments thereof and each director of
SBMS shall have the same rights to contribution as SBMS. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under this paragraph
(d), notify such party or parties from whom contribution may be sought, but the
omission to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any other obligation it or
they may have hereunder or otherwise than under this paragraph (d).
(e) The Underwriters further agree as follows:
(i) Salomon will indemnify and hold harmless BOA against any
losses, claims, damages or liabilities to which BOA may become subject,
under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities arise out of or are based upon any untrue
statements or misstatements in Computational Materials or ABS Term
Sheets prepared by Salomon and will reimburse BOA for any legal or
other expenses reasonably
17
<PAGE>
incurred thereby in connection with investigating or defending any such
action or claim as such expenses are incurred.
(ii) BOA will indemnify and hold harmless Salomon against any
losses, claims, damages or liabilities to which Salomon may become
subject, under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities arise out of or are based upon any
untrue statements or misstatements in Computational Materials or ABS
Term Sheets prepared by BOA and will reimburse Salomon for any legal or
other expenses reasonably incurred thereby in connection with
investigating or defending any such action or claim as such expenses
are incurred.
(iii) Promptly after receipt by an indemnified party under
clause (i) or clause (ii) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such clause, notify the
indemnifying party in writing of the commencement thereof; but the
omission to so notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified party otherwise than
under such clause; provided, however, that any increase in such
liability as a result of such failure to notify shall not be an expense
of the indemnifying party. In case any such action shall be brought
against any indemnified party, and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish,
to assume the defense thereof, with counsel satisfactory to such
indemnified party and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under
clause (i) or clause (ii) above for any legal expenses of other counsel
or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than
reasonable costs of investigation; provided that, if the defendants in
any such action include both the indemnified party and the indemnifying
party, and the indemnified party shall have reasonably concluded that
there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the
right to select separate counsel to assert such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to,
any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not
the indemnified party is an actual or potential party to such action or
claim) unless such settlement, compromise or judgment (A) includes an
unconditional release of the indemnified party from all liability
arising out of such action or claim and (B) does not include a
statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
18
<PAGE>
(iv) If the indemnification provided in clause (i) or clause
(ii) above, as the case may be, is due in accordance with its terms in
respect of any losses, claims, damages or liabilities (or actions in
respect thereof) referred to therein, but is for any reason held by a
court to be unavailable on grounds of public policy or otherwise, then
the indemnifying party shall contribute to the amount paid or payable
by such indemnified party as a result of such losses, claims, damages
or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect both the relative benefits received by Salomon
on the one hand and BOA on the other, in each case as Underwriter, from
the offering of the Registered Certificates, and the relative fault of
Salomon on the one hand and BOA on the other in connection with the
statements which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by
Salomon on the one hand and BOA on the other shall be deemed to be in
the same proportion to the amount of Registered Certificates
underwritten by each such party. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact relates to information supplied by
Salomon on the one hand or BOA on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The parties hereto agree that it
would not be just and equitable if contribution pursuant to this clause
(iv) were determined by pro rata allocation or by any other method of
allocation which does not take into account the equitable
considerations referred to above in this clause (iv). The amount paid
or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to
above in this clause (iv) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim.
Notwithstanding the provisions of this clause (iv), neither Salomon nor
BOA shall be required to contribute any amount in excess of the amount
by which the total price at which the Registered Certificates
underwritten by it and distributed to the public, were sold, exceeds
the amount of any damages which such party has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(v) The obligations of Salomon under clauses (i), (iii) and
(iv) above shall be in addition to any liability which Salomon may
otherwise have and shall extend, upon the same terms and conditions, to
each person, if any, who controls BOA within the meaning of the
Securities Act or the Exchange Act, and the obligations of BOA under
clauses (ii), (iii) and (iv) above shall be in addition to any
liability which BOA may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls Salomon
within the meaning of the Securities Act or the Exchange Act.
8. FEES AND EXPENSES. (a) Except as provided in Section 8(b)
or any other particular section hereof, costs and expenses incurred in
connection with the transactions
19
<PAGE>
herein contemplated shall be borne by the party that incurred such cost
or expense, provided that expenses incurred by or on behalf of the
Underwriters shall be borne by Salomon.
(b) If this Agreement shall be terminated by either
Underwriter because of any failure or refusal on the part of SBMS to
comply with the terms or to fulfill any of the conditions of this
Agreement or if for any reason SBMS shall be unable to perform its
obligations under this Agreement or any condition of such Underwriter's
obligations cannot be fulfilled, SBMS agrees to reimburse or cause the
reimbursement of such Underwriter for all out-of-pocket expenses
(including the reasonable fees and expenses of its counsel) reasonably
incurred by such Underwriter in connection with this Agreement or the
offering contemplated hereunder.
9. COMPUTATIONAL MATERIALS AND ABS TERM SHEETS. (a) Not later
than 10:30 a.m., New York City time, on the date hereof, each
Underwriter shall deliver to SBMS five (5) complete copies of all
materials provided by such Underwriter to prospective investors in the
Registered Certificates that constitute either (i) "Computational
Materials" within the meaning of the no-action letter dated May 20,
1994 issued by the Division of Corporation Finance of the Commission to
Kidder, Peabody Acceptance Corporation I, Kidder, Peabody & Co.
Incorporated, and Kidder Structured Asset Corporation and the noaction
letter dated May 27, 1994 issued by the Division of Corporation Finance
of the Commission to the Public Securities Association (together, the
"Kidder Letters") or (ii) "ABS Term Sheets" within the meaning of the
no-action letter dated February 17, 1995 issued by the Division of
Corporation Finance of the Commission to the Public Securities
Association (the "PSA Letter", and together with the Kidder Letters,
the "No-Action Letters"), if the filing of such materials with the
Commission is a condition of the relief granted in such letters and, in
the case of any such materials that constitute "Collateral Term Sheets"
within the meaning of the PSA Letter, such Collateral Term Sheets have
not previously been delivered to SBMS as contemplated by Section
9(b)(i) below. Each delivery of Computational Materials pursuant to
this paragraph (a) shall be effected by delivering four (4) copies of
such materials to counsel for SBMS and one copy of such materials to
SBMS. Each delivery of ABS Term Sheets pursuant to this paragraph (a)
shall be effected by delivering such materials to counsel for SBMS on
behalf of SBMS at the address specified in Section 17 hereof in a
format that will permit such materials to be promptly filed
electronically with the Commission.
(b) Each Underwriter represents and warrants to and agrees
with SBMS, as of the date hereof and as of the Closing Date, as
applicable, that:
(i) if such Underwriter has provided any Collateral
Term Sheets to potential investors in the Registered
Certificates prior to the date hereof and if the filing of
such materials with the Commission is a condition of the
relief granted in the PSA Letter, then in each such case such
Underwriter delivered such materials in the format
contemplated by Section 9(a) to counsel for SBMS on behalf of
SBMS at
20
<PAGE>
the address specified in Section 17 hereof no later than 10:30
a.m., New York City time, on the first business day following
the date on which such materials were initially provided to a
potential investor;
(ii) the Computational Materials (either in original,
aggregated or consolidated form) and ABS Term Sheets furnished
to SBMS pursuant to Section 9(a) or as contemplated in Section
9(b)(i) constitute all of the materials relating to the
Registered Certificates furnished by such Underwriter (whether
in written, electronic or other format) to prospective
investors in the Registered Certificates prior to the date
hereof, except for any Preliminary Prospectus and any
Computational Materials and ABS Term Sheets that are not
required to be filed with the Commission in accordance with
the No-Action Letters, and all Computational Materials and ABS
Term Sheets provided by such Underwriter to potential
investors in the Registered Certificates comply with the
requirements of the No-Action Letters;
(iii) on the respective dates any such Computational
Materials and/or ABS Term Sheets with respect to the
Registered Certificates referred to in Section 9(b)(ii) were
last furnished by such Underwriter to each prospective
investor, on the date of delivery thereof to SBMS pursuant to
or as contemplated by this Section 9 and on the Closing Date,
such Computational Materials and/or ABS Term Sheets did not
and will not include any untrue statement of a material fact,
or, when read in conjunction with the Prospectus, omit to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
(iv) at the time any Computational Materials or ABS
Term Sheets with respect to the Registered Certificates were
furnished to a prospective investor and on the date hereof,
such Underwriter possessed, and on the date of delivery of
such materials to SBMS pursuant to or as contemplated by this
Section 9 and on the Closing Date, such Underwriter will
possess, the capability, knowledge, expertise, resources and
systems of internal control necessary to ensure that such
Computational Materials and/or ABS Term Sheets conform to the
representations and warranties of such Underwriter contained
in subparagraphs (ii) and (iii) above of this paragraph (b);
(v) all Computational Materials and ABS Term Sheets
with respect to the Registered Certificates furnished by such
Underwriter to potential investors contained and will contain
a legend, prominently displayed on the first page thereof, to
the effect that SBMS has not prepared, reviewed or
participated in the preparation of such Computational
Materials or ABS Term Sheets, is not responsible for the
accuracy thereof and has not authorized the dissemination
thereof;
(vi) all Collateral Term Sheets with respect to the
Registered Certificates furnished by such Underwriter to
potential investors contained and will contain a
21
<PAGE>
legend, prominently displayed on the first page thereof,
indicating that the information contained therein will be
superseded by the description of the Mortgage Loans contained
in the Prospectus and, except in the case of the initial
Collateral Term Sheet, that such information supersedes the
information in all prior Collateral Term Sheets; and
(vii) on and after the date hereof, such Underwriter
shall not deliver or authorize the delivery of any
Computational Materials, ABS Term Sheets or other materials
relating to the Registered Certificates (whether in written,
electronic or other format) to any potential investor unless
such potential investor has received a Prospectus prior to or
at the same time as the delivery of such Computational
Materials, ABS Term Sheets or other materials.
Notwithstanding the foregoing, neither Underwriter makes any
representation or warranty as to whether any Computational Materials or
ABS Term Sheets with respect to the Registered Certificates included or
will include any untrue statement resulting directly from any
Collateral Error (except any Corrected Collateral Error, with respect
to materials prepared after the receipt by the Underwriters from SBMS
or either Mortgage Loan Seller of notice of such Corrected Collateral
Error or materials superseding or correcting such Corrected Collateral
Error).
(c) The Underwriters acknowledge and agree that SBMS has not
authorized and will not authorize the distribution of any Computational
Materials or ABS Term Sheets with respect to the Registered
Certificates to any prospective investor, and agree that any such
Computational Materials and/or ABS Term Sheets furnished to prospective
investors shall include a disclaimer in the form set forth in paragraph
(b)(v) above. The Underwriters agree that they will not represent to
potential investors that any Computational Materials and/or ABS Term
Sheets with respect to the Registered Certificates were prepared or
disseminated on behalf of SBMS.
(d) If, at any time when a prospectus relating to the
Registered Certificates is required to be delivered under the
Securities Act prior to 90 days from the date hereof, it shall be
necessary in the opinion of the Underwriters or their counsel to amend
or supplement the Prospectus as a result of an untrue statement of a
material fact contained in any Computational Materials or ABS Term
Sheets provided by the Underwriters pursuant to or as contemplated by
this Section 9 or the omission to state a material fact required, when
considered in conjunction with the Prospectus, to be stated therein or
necessary to make the statements therein, when read in conjunction with
the Prospectus, not misleading, or if it shall be necessary to amend or
supplement any Current Report to comply with the Securities Act or the
rules thereunder, the Underwriters, at their expense (or, if such
amendment or supplement is necessary due to a Collateral Error (except
any Corrected Collateral Error, with respect to materials prepared
after the receipt by the Underwriters from SBMS or either Mortgage Loan
Seller of notice of such Corrected Collateral Error or materials
superseding
22
<PAGE>
or correcting such Corrected Collateral Error), at the expense of
SBMS), shall promptly prepare and furnish to SBMS for filing with the
Commission an amendment or supplement that will correct such statement
or omission or an amendment that will effect such compliance and shall
distribute such amendment or supplement to each prospective investor in
the Registered Certificates that received such information being
amended or supplemented. The Underwriters represent and warrant to
SBMS, as of the date of delivery of such amendment or supplement to
SBMS, that such amendment or supplement will not include any untrue
statement of a material fact or, when read in conjunction with the
Prospectus, omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading. SBMS shall
have no obligation to file such amendment or supplement if SBMS
determines that (i) such amendment or supplement contains any untrue
statement of a material fact or, when read in conjunction with the
Prospectus, omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading (it
being understood, however, that SBMS shall have no obligation to review
or pass upon the accuracy or adequacy of, or to correct, any such
amendment or supplement provided by the Underwriters to SBMS pursuant
to this paragraph (d)) or (ii) such filing is not required under the
Securities Act. Notwithstanding the foregoing, the Underwriters make no
representation or warranty as to whether any such amendment or
supplement of Computational Materials or ABS Term Sheets with respect
to the Registered Certificates included or will include any untrue
statement resulting directly from any Collateral Error (except any
Corrected Collateral Error, with respect to materials prepared after
the receipt by the Underwriters from SBMS or either Mortgage Loan
Seller of notice of such Corrected Collateral Error or materials
superseding or correcting such Corrected Collateral Error).
(e) If, at any time when a prospectus relating to the
Registered Certificates is required to be delivered under the
Securities Act prior to 90 days from the date hereof, it shall be
necessary in the opinion of SBMS or its counsel to amend or supplement
the Prospectus as a result of an untrue statement of a material fact
contained in any Computational Materials or ABS Term Sheets provided by
the Underwriters pursuant to or as contemplated by this Section 9 or
the omission to state therein a material fact required, when considered
in conjunction with the Prospectus, to be stated therein or necessary
to make the statements therein, when read in conjunction with the
Prospectus, not misleading, or if it shall be necessary to amend or
supplement any Current Report to comply with the Securities Act or the
rules thereunder, SBMS promptly will notify the Underwriters of the
necessity of such amendment or supplement, and the Underwriters, at
their expense (allocated 90% to Solomon and 10% to BOA) (or, if such
amendment or supplement is necessary due to a Collateral Error (except
any Corrected Collateral Error, with respect to materials prepared
after the receipt by the Underwriters from SBMS or either the Mortgage
Loan Seller of notice of such Corrected Collateral Error or materials
superseding or correcting such Corrected Collateral Error), at the
expense of SBMS), shall promptly prepare and furnish to SBMS for filing
with the Commission an amendment or supplement that will correct such
statement or omission or an amendment that will effect such compliance
and
23
<PAGE>
shall distribute such amendment or supplement to each prospective
investor in the Registered Certificates that received such information
being amended or supplemented. The Underwriters represent and warrant
to SBMS, as of the date of delivery of such amendment or supplement to
SBMS, that such amendment or supplement will not include any untrue
statement of a material fact or, when read in conjunction with the
Prospectus, omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading.
Notwithstanding the foregoing, the Underwriters make no representation
or warranty as to whether any such amendment or supplement of
Computational Materials or ABS Term Sheets with respect to the
Registered Certificates included or will include any untrue statement
resulting directly from any Collateral Error (except any Corrected
Collateral Error, with respect to materials prepared after the receipt
by the Underwriter from SBMS or either Mortgage Loan Seller of notice
of such Corrected Collateral Error or materials superseding or
correcting such Corrected Collateral Error).
(f) The Underwriters (at their own expense) further agree to
provide to SBMS any accountants' letters obtained relating to the
Computational Materials and/or ABS Term Sheets, which accountants'
letters shall be addressed to SBMS or shall state that SBMS may rely
thereon; provided that the Underwriters shall have no obligation to
procure such letter.
10. TERMINATION. This Agreement shall be subject to
termination by notice given to SBMS, if the sale of the Registered
Certificates provided for herein is not consummated because of any
failure or refusal on the part of SBMS to comply in all material
respects with the terms or to fulfill in all material respects any of
the conditions of this Agreement, or if for any reason SBMS shall be
unable to perform in all material respects its obligations under this
Agreement. This Agreement shall also be subject to termination in the
absolute discretion of Salomon, by notice given to SBMS prior to
delivery of and payment for the Certificates, if prior to such time (i)
trading in securities generally on the New York Stock Exchange shall
have been suspended or materially limited, (ii) a general moratorium on
commercial banking activities in New York shall have been declared by
either federal or New York State authorities, or (iii) there shall have
occurred any material outbreak or escalation of hostilities or other
calamity or crisis the effect of which on the financial markets of the
United States is such as to make it, in the reasonable judgment of
Salomon after consultation with SBMS, impracticable to market the
Registered Certificates.
11. DEFAULT BY AN UNDERWRITER. If either Underwriter shall
fail to purchase and pay for any of the Registered Certificates agreed
to be purchased by such Underwriter hereunder and such failure to
purchase shall constitute a default in the performance of its
obligations under this Agreement, the remaining Underwriter shall be
obligated to take up and pay for the Registered Certificates that the
defaulting Underwriter agreed but failed to purchase; provided,
however, that in the event that the initial principal amount or
notional amount, as the case may be, of Registered Certificates that
the defaulting Underwriter agreed but failed to purchase shall exceed
10% of (a) the aggregate Class Principal Balance of the Class A-1,
Class A-2, Class B, Class C, Class D, Class E and Class F Certificates
set forth
24
<PAGE>
in Schedule I hereto or (b) the Class Notional Amount of the Class X
Certificates set forth in Schedule I hereto, as the case may be, the
remaining Underwriter shall have the right to purchase all, but shall
not be under any obligation to purchase any, of the Registered
Certificates, and if such nondefaulting Underwriter does not purchase
all of the Registered Certificates, this Agreement will terminate
without liability to the nondefaulting Underwriter or SBMS. In the
event of a default by an Underwriter as set forth in this Section 11,
the Closing Date for the Registered Certificates shall be postponed for
such period, not exceeding seven (7) days, as the nondefaulting
Underwriter shall determine in order that the required changes in the
Registration Statement, the Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall
relieve any defaulting Underwriter of its liability, if any, to SBMS
and to any nondefaulting Underwriter for damages occasioned by its
default hereunder.
12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other
statements of SBMS, the Underwriters and their respective officers,
directors, employees and agents set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of the Underwriters, SBMS or any of
the officers, directors or controlling persons referred to in Section 7
hereof, and will survive delivery of and payment for the Registered
Certificates. The provisions of Sections 7 and 8(b) hereof shall
survive the termination or cancellation of this Agreement.
13. SUCCESSORS. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors
and the officers, directors and controlling persons referred to in
Section 7 hereof, and no other person will have any right or obligation
hereunder.
14. APPLICABLE LAW. This Agreement will be governed by and
construed in accordance with the substantive laws of the State of New
York, applicable to agreements negotiated, made and to be performed
entirely in said state.
15. [RESERVED.]
16. MISCELLANEOUS. This Agreement supersedes all prior or
contemporaneous agreements and understandings relating to the subject
matter hereof (other than the Term Sheet). Neither this Agreement nor
any term hereof may be changed, waived, discharged or terminated except
by a writing signed by the party against whom enforcement of such
change, waiver, discharge or termination is sought. This Agreement may
be signed in any number of counterparts, each of which shall be deemed
an original, and that taken together shall constitute one and the same
instrument.
17. NOTICES. All communications hereunder will be in writing
and effective only upon receipt and, if sent to the Underwriters, will
be delivered to Salomon Smith Barney
25
<PAGE>
Inc., 388 Greenwich Street, New York, New York 10013, Attention: Angela
Hutzel and BOA, 100 North Tryon Street, NC1-007-11-07, Charlotte, North
Carolina 28255; and, if sent to SBMS, will be delivered to Salomon
Brothers Mortgage Securities IV, Inc., 388 Greenwich Street, New York,
New York 10013, Attention: Angela Hutzel; or, in each such case, to
such other address as may be forwarded by any such party to the other
parties hereto in writing.
26
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the undersigned a counterpart hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among SBMS and the Underwriters.
Very truly yours,
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.
By: Angela Hutzel
----------------------------
Name: Angela Hutzel
Title: Assistant Vice President
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
SALOMON SMITH BARNEY INC.
By:
-------------------------------------
Name:
Title:
BANC OF AMERICA SECURITIES LLC
By:
-------------------------------------
Name:
Title:
27
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the undersigned a counterpart hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among SBMS and the Underwriters.
Very truly yours,
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.
By:
----------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
SALOMON SMITH BARNEY INC.
By: David D Tibbals
-------------------------------------
Name: David D Tibbals
Title: Managing Director
BANC OF AMERICA SECURITIES LLC
By:
-------------------------------------
Name:
Title:
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the undersigned a counterpart hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among SBMS, Citicorp and the Underwriters.
Very truly yours,
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.
By:
----------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
SALOMON SMITH BARNEY INC.
By:
-------------------------------------
Name:
Title:
BANC OF AMERICA SECURITIES LLC
By: David Gertner
-------------------------------------
Name: David Gertner
Title: Managing Director
<PAGE>
SCHEDULE I
As used in this Agreement, the term "Registration Statement" refers to the
registration statement No. 333-72647 filed by SBMS on Form S-3 and declared
effective by the Commission.
TITLE AND DESCRIPTION OF THE REGISTERED CERTIFICATES: Commercial Mortgage
Pass-Through Certificates, Series 1999-C1, Class A-1, Class A-2, Class X, Class
B, Class C, Class D, Class E and Class F Certificates.
Underwriting Agreement, dated as of August 5, 1999
Cut-off Date: August 1, 1999
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
Initial Class Principal
Balance (or, in the case
Class of Class X, Class Initial
Designation Purchase Price Notional Amount)(1)(2) Pass-Through Rate Rating(3)
----------- -------------- ---------------------- ----------------- ---------
<S> <C> <C> <C>
Class A-1 100.0000% $167,874,000 7.0750% Aaa/AAA
Class A-2 98.5432% $355,708,000 7.1500% Aaa/AAA
Class X .056448% $734,852,898 0.1980% Aaa/AAA
Class B 97.5675% $ 38,580,000 7.3563% Aa2/AA
Class C 96.2316% $ 38,580,000 7.3563% A2/A
Class D 94.6087% $ 11,023,000 7.3563% A3/A-
Class E 91.8727% $ 27,557,000 7.3563% Baa3/BBB
Class F 85.1152% $ 11,022,000 7.3563% Baa2/BBB-
</TABLE>
- ----------
(1) Subject to a variance of plus or minus 5.0%.
(2) Subject to rounding to the nearest whole dollar, Salomon Smith
Barney Inc. will acquire 90% and Banc of America Securities
LLC will acquire 10% of the Class Principal Balance of the
Class A-1 and Class A-2 Certificates. Salomon Smith Barney
Inc. will acquire 100% of the Class Principal Balance or Class
Notional Amount, as the case may be, of each remaining class
of Registered Certificates.
(3) By each of Moody's Investors Service, Inc. and Fitch IBCA, Inc.
Purchase Price: The purchase prices set forth in the above schedule for
each Class of Certificates, plus interest on the Class Principal
Balance of each Class of Certificates and also on the Class Notional
Amount of the Class X Certificates, in each case at the initial
Pass-Through Rate for the applicable Class, from the Cut-off Date to
but not including the Closing Date.
- -------------------------------------------------------------------------------
Closing Time, Date and Location: 10:00 a.m. New York City time on August 20,
1999 at the offices of Sidley & Austin, 875 Third Avenue, New York, New York
10022.
- -------------------------------------------------------------------------------
Issuance and delivery of Registered Certificates: Each class of
Registered Certificates will be issued as one or more Certificates
registered in the name of Cede & Co., as nominee of The Depository
Trust Company. Beneficial owners will hold interests in such
Certificates through the book-entry facilities of The Depository Trust
Company in minimum denominations of initial principal balance or
notional amount, as the case may be, of $10,000 (or $1,000,000, in the
case of the Class X Certificates) and integral multiples of $1 in
excess thereof.
