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, as amended
Date of Report (Date of earliest event reported): October 30, 1996
Structured Asset Securities Corporation
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 33-96378 74-2440850
-------- -------- ----------
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification Number)
200 Vesey Street
New York, New York 10285
- ------------------ -----
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code (212) 526-5594
--------------
<PAGE>
-2-
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
Description of the Certificates and the Mortgage Pool
On October 30, 1996, a single series of certificates, entitled LB
Commercial Conduit Mortgage Trust II Multiclass Pass-Through Certificates,
Series 1996-C2 (the "Certificates"), was issued pursuant to a trust agreement
(the "Trust Agreement") attached hereto as Exhibit 4.1, dated as of October 1,
1996, among Structured Asset Securities Corporation as depositor (the
"Depositor"), GMAC Commercial Mortgage Corporation as servicer, CRIIMI MAE
Services Limited Partnership as special servicer, LaSalle National Bank as
trustee and ABN AMRO Bank N.V. as fiscal agent. The Certificates consists of
thirteen classes identified as the "Class A Certificates", the "Class IO
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 R-I Certificates", the "Class R-II Certificates" and
the "Class R-III Certificates", respectively, and were issued in exchange for,
and evidence the entire beneficial ownership interest in, the assets of a trust
fund (the "Trust Fund") consisting primarily of a pool (the "Mortgage Pool") of
commercial and multifamily mortgage loans (the "Mortgage Loans"), having, as of
the close of business on October 1, 1996 (the "Cut-off Date"), an aggregate
principal balance of $397,202,489.27 (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 Certificates were sold by the Depositor
to Lehman Brothers Inc. ("LBI") pursuant to (i) an underwriting agreement, dated
October 18, 1996 (the "Underwriting Agreement"), between the Depositor and LBI
and (ii) a certificate purchase agreement, dated October 18, 1996, between the
Depositor and LBI. The Underwriting Agreement is attached hereto as Exhibit 1.1.
The Class A Certificates have an initial stated principal balance (a
"Certificate Balance") of $270,097,693. The Class B Certificates have an initial
Certificate Balance of $27,804,174. The Class C Certificates have an initial
Certificate Balance of $23,832,149. The Class D Certificates have an initial
Certificate Balance of $15,888,100. The Class E Certificates have an initial
Certificate Balance of $7,944,050. The Class F Certificates have an initial
Certificate Balance of $21,846,137. The Class G Certificates have an initial
Certificate Balance of $13,902,087. The Class H Certificates have an initial
Certificate Balance of $5,958,037. The Class J Certificates have an initial
Certificate Balance of $9,930,062. The Class IO Certificates will not have a
Certificate Balance, but will represent the right to receive distributions of
interest accrued as provided in the Trust Agreement on a hypothetical or
notional amount (a "Notional Amount") equal to $397,202,489. The Class R-I,
Class R-II and Class R-III Certificates each have an initial Certificate Balance
of $0.
Capitalized terms used herein and not otherwise defined shall have the
meanings assigned to them in the Trust Agreement.
<PAGE>
-3-
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Not applicable
(b) Not applicable
(c) Exhibits
Exhibit No. Description
----------- -----------
1.1 Underwriting Agreement, dated October 18,
1996, between Structured Asset Securities
Corporation as seller and Lehman Brothers
Inc. as underwriter.
4.1 Trust Agreement, dated as of October 1,
1996, among Structured Asset Securities
Corporation as depositor, GMAC Commercial
Mortgage Corporation as servicer, CRIIMI
MAE Services Limited Partnership as special
servicer, LaSalle National Bank as trustee
and ABN AMRO Bank N.V. as fiscal agent.
99.1 Mortgage Loan Purchase Agreement, dated
October 18, 1996, between Lehman Brothers
Holdings Inc., doing business as Lehman
Capital, A Division of Lehman Brothers
Holdings Inc. as seller and Structured
Asset Securities Corporation as purchaser.
99.2 Servicing Agreement, dated as of October 1,
1996, among Structured Asset Securities
Corporation as depositor, LaSalle National
Bank as trustee, GMAC Commercial Mortgage
Corporation as servicer and CRIIMI MAE
Services Limited Partnership as special
servicer.
99.3 Special Servicing Agreement, dated as of
October 1, 1996, among Structured Asset
Securities Corporation as depositor,
LaSalle National Bank as trustee, GMAC
Commercial Mortgage Corporation
<PAGE>
-4-
as servicer and CRIIMI MAE Services Limited
Partnership as special servicer.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
STRUCTURED ASSET SECURITIES
CORPORATION
By: /s/ Michael Mazzei
-----------------------------
Name: Michael Mazzei
Title: Managing Director and
Authorized Signatory
Dated: November 11, 1996
<PAGE>
Index To Exhibits
-----------------
Sequentially
Numbered
Exhibit No. Description Page
----------- ----------- ----
1.1 Underwriting Agreement, dated
October 18, 1996, between
Structured Asset Securities
Corporation as seller and Lehman
Brothers Inc. as underwriter.
4.1 Trust Agreement, dated as of
October 1, 1996, among Structured
Asset Securities Corporation as
depositor, GMAC Commercial
Mortgage Corporation as servicer,
CRIIMI MAE Services Limited
Partnership as special servicer,
LaSalle National Bank as trustee
and ABN AMRO Bank N.V. as fiscal
agent.
99.1 Mortgage Loan Purchase Agreement,
dated October 18, 1996, between
Lehman Brothers Holdings Inc.,
doing business as Lehman Capital,
A Division of Lehman Brothers
Holdings Inc. as seller and
Structured Asset Securities
Corporation as purchaser.
99.2 Servicing Agreement, dated as of
October 1, 1996, among Structured
Asset Securities Corporation as
depositor, LaSalle National Bank
as trustee, GMAC Commercial
Mortgage Corporation as servicer
and CRIIMI MAE Services Limited
Partnership as special servicer.
<PAGE>
-2-
99.3 Special Servicing Agreement,
dated as of October 1, 1996,
among Structured Asset Securities
Corporation as depositor, LaSalle
National Bank as trustee, GMAC
Commercial Mortgage Corporation
as servicer and CRIIMI MAE
Services Limited Partnership as
special servicer.
EXHIBIT 1.1
<PAGE>
LB COMMERCIAL CONDUIT MORTGAGE TRUST II
MULTICLASS PASS-THROUGH CERTIFICATES, SERIES 1996-C2
October 18, 1996
UNDERWRITING AGREEMENT
----------------------
Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
Structured Asset Securities Corporation, a Delaware
corporation (the "Company"), proposes to cause the issuance of, and sell to
Lehman Brothers Inc. ("LBI" or the "Underwriter"), the classes of LB Commercial
Conduit Mortgage Trust II Multiclass PassThrough Certificates, Series 1996-C2
that are described on Schedule I attached hereto (the "Certificates"). The
Certificates will evidence beneficial ownership interests in a trust fund (the
"Trust Fund") to be formed by the Company and consisting primarily of a
segregated pool (the "Mortgage Pool") of multifamily and commercial mortgage
loans (the "Mortgage Loans"). The Certificates will be issued under a trust
agreement, dated as of October 1, 1996 (the "Trust Agreement"), among the
Company as depositor, LaSalle National Bank as trustee (the "Trustee"), GMAC
Commercial Mortgage Corporation as servicer (the "Servicer"), CRIIMI MAE
Services Limited Partnership as special servicer (the "Special Servicer") and
ABN AMRO Bank N.V. as fiscal agent (the "Fiscal Agent").
1. REPRESENTATIONS AND WARRANTIES. The Company represents, warrants and
agrees that:
a. A registration statement on Form S-3 (No.
33-96378) with respect to the Certificates has been prepared by the Company and
filed with the Securities and Exchange Commission (the "Commission"), and
complies as to form in all material respects with the requirements of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), including Rule 415,
and has become effective under the Securities Act. As used in this Underwriting
Agreement (this "Agreement" or the "Underwriting Agreement"), (i) "Registration
Statement" means that registration statement and all exhibits thereto,
including, among other things, the Statement of Eligibility and Qualification of
the Trustee under the Trust Indenture Act of 1939, as amended, on Form T-1 (the
"Form T-1"), as amended or supplemented to the date of this Agreement; (ii)
"Basic Prospectus" means the prospectus included in the Registration Statement
at the time it became effective, or as subsequently filed with the Commission
pursuant to paragraph (b) of Rule 424 of the Securities Act; (iii) "Prospectus"
means the Basic Prospectus, together with the prospectus supplement specifically
relating to the Certificates (the "Prospectus Supplement"), as filed with,
<PAGE>
or mailed for filing to, the Commission pursuant to paragraph (b) of Rule 424 of
the Securities Act; and (iv) "Preliminary Prospectus" means any preliminary form
of the Prospectus that has heretofore been filed pursuant to paragraph (b) of
Rule 424 of the Securities Act.
b. The Registration Statement and the Prospectus, at
the time the Registration Statement became effective and on the date of this
Agreement, complied, and (in the case of any amendment or supplement to any such
document filed with the Commission after the date as of which this
representation is being made) will comply, as to form in all material respects
with the requirements of the Securities Act, the Trust Indenture Act of 1939, as
amended, and the rules and regulations thereunder (collectively, the "Trust
Indenture Act"); and the Registration Statement and the Prospectus do not, and
(in the case of any amendment or supplement to any such document filed with the
Commission after the date as of which this representation is being made) will
not, contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided however, that the Company makes no
representation or warranty as to (i) that part of the Registration Statement
that shall constitute the Form T-1, (ii) information contained in or omitted
from the Registration Statement or the Prospectus in reliance upon and in
conformity with written information furnished to the Company by the Underwriter
specifically for inclusion therein or (iii) any information in any Computational
Materials and ABS Term Sheets (each as defined below) incorporated into the
Registration Statement by the filing thereof pursuant to Section 4(j).
c. The Company is not in violation of its corporate
charter or by-laws or in default under any agreement, indenture or instrument
the effect of which violation or default would be material to the Company; the
execution, delivery and performance by the Company of this Agreement, and the
consummation of the transactions contemplated herein, have been, and as of the
Delivery Date (as defined in Section 3 hereof), the Trust Agreement, the
Servicing Agreement, dated as of October 1, 1996 (the "Servicing Agreement"),
among the Company, the Trustee, the Servicer and the Special Servicer and the
Special Servicing Agreement, dated as of October 1, 1996 (the "Special Servicing
Agreement"), among the Company, the Trustee, the Servicer and the Special
Servicer, and the consummation of the transactions contemplated therein, will
have been, authorized by all necessary corporate action and compliance by the
Company with the provisions of this Agreement; the issuance of the Certificates
and the execution, delivery and performance by the Company of the Trust
Agreement will not conflict with, result in the creation or imposition of any
material lien, charge or encumbrance upon any of the assets of the Company,
other than the lien, if any, created by the Trust Agreement, pursuant to the
terms of, or constitute a default under, any material agreement, trust agreement
or instrument, or result in a violation of the corporate charter or bylaws of
the Company or any order, rule or regulation of any court or governmental agency
having jurisdiction over the Company or its properties; and, except as required
by the Securities Act, the Trust Indenture Act, the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and applicable state securities laws, no
consent, authorization or order of, or filing or registration with, any court or
governmental agency is required for the execution, delivery and
2
<PAGE>
performance of this Agreement, the Servicing Agreement, the Special Servicing
Agreement and the Trust Agreement (collectively, the "Transaction Documents").
d. Except as described in the Registration Statement
and the Prospectus, there has not been any material adverse change in, or any
adverse development that materially affects, the business, properties, financial
condition or results of operations of the Company from the dates as of which
information is given in the Registration Statement and the Prospectus.
e. The Company has no reason to believe that Deloitte
& Touche LLP, whose reports are incorporated by reference into the Prospectus,
are not independent accountants as required by the Securities Act.
f. As of the date hereof, this Agreement has been
duly and validly authorized, executed and delivered by the Company and is a
valid and legally binding obligation of the Company, enforceable in accordance
with its terms, except as such enforcement may be limited by bankruptcy,
insolvency or other laws affecting the enforcement of creditors rights
generally, by general principles of equity, and by public policy considerations,
to the extent that such public policy considerations limit the enforceability of
any provisions of this Agreement that purport to provide indemnification for
securities law liabilities. On the Delivery Date, (i) the Trust Agreement, the
Servicing Agreement and the Special Servicing Agreement will have been duly and
validly authorized, executed and delivered by the Company, and will constitute
the valid and legally binding obligations of the Company, enforceable in
accordance with their respective terms, except as such enforcement may be
limited by bankruptcy, insolvency or other laws affecting the enforcement of
creditors rights generally or by general principles of equity, (ii) the issuance
of the Certificates will have been validly authorized by the Company and, upon
payment for the Certificates as provided in this Agreement and due execution,
authentication and delivery thereof as provided in the Trust Agreement, the
Certificates will be validly issued and outstanding, and will be entitled to the
benefits of the Trust Agreement, and (iii) the Certificates, the Servicing
Agreement, the Special Servicing Agreement and the Trust Agreement will conform
to the descriptions thereof contained in the Prospectus.
g. The Company has been duly incorporated, is validly
existing and in good standing under the laws of the State of Delaware and is
duly qualified to do business and is in good standing as a foreign corporation
in each jurisdiction in which its ownership of property or the conduct of its
business requires such qualification and has all corporate power and authority
necessary to own or hold its properties and to conduct the business in which it
is engaged, except such jurisdictions, if any, in which the failure to be so
qualified will not have a material adverse effect on its business or properties.
h. Except as described in the Prospectus, there is no
litigation or governmental proceeding pending or, to the knowledge of the
Company, threatened against the Company that might result in any material
adverse change in the financial condition, results of
3
<PAGE>
operations, business or prospects of the Company or that is required to be
disclosed in the Registration Statement or Prospectus.
i. There are no contracts or other documents that are
required to be filed as exhibits to the Registration Statement by the Securities
Act or by the Trust Indenture Act that have not been filed as exhibits to the
Registration Statement or incorporated therein by reference as permitted by the
Securities Act or the Trust Indenture Act, or that are required to be summarized
in the Prospectus that are not so summarized; provided, however, that the
Company makes no representation or warranty with respect to any contract or
document, except this Agreement, to which LBI is a party.
j. At or prior to the Delivery Date, the Company will
have validly assigned all of its right, title and interest in and to the
Mortgage Loans, and delivered the related Mortgage Files to the Trustee under
the Trust Agreement. The Mortgage Loans (i) have as of the Delivery Date an
aggregated unpaid principal balance, after application of all payments due on or
before October 1, 1996 (the "Cut-off Date"), of not less than the aggregate
certificate principal amount of the Certificates and the other certificates, if
any, issued pursuant to the Trust Agreement, (ii) have for each Due Date
scheduled payments of principal and interest that will satisfy the requirements
of the Trust Agreement and (iii) conform in all material respects with the
description thereof in the Prospectus.
k. The Company and the Trust Fund are not, and will
not be as a result of the offer and sale of the Certificates as contemplated by
the Prospectus, subject to the provisions of the Investment Company Act of 1940,
as amended.
l. At the Delivery Date, each Class of the
Certificates will have been rated in the bond rating category by a nationally
recognized statistical rating organization (as such term is used in Rule 15c3-1
of the Exchange Act) as described in the Prospectus.
2. PURCHASE AND SALE. Subject to the terms and conditions and
in reliance on the representations and warranties herein set forth, the Company
agrees to sell to LBI and LBI agrees to purchase from the Company the
Certificates, at the purchase price for each class thereof as set forth on
Schedule I attached hereto.
3. PAYMENT AND DELIVERY. Payment for the Certificates shall be
made at the offices of Thacher Proffitt & Wood, Two World Trade Center, New
York, New York 10048, at 10:00 a.m. New York City time, on October 30, 1996 or
at such other location, time and date as shall be agreed upon. This date and
time are sometimes referred to as the "Delivery Date". Delivery of the
Certificates shall be made to LBI against payment by LBI of the purchase price
therefore to or upon the order of the Company in same-day funds by federal funds
wire. Unless delivery is made through the facilities of The Depository Trust
Company, the Certificates shall be registered in such names and in such
authorized denominations as LBI may have requested not less than three full
business days prior to the Delivery Date.
4
<PAGE>
The Company agrees to have the Certificates available for
inspection, checking and packaging in New York, New York, at any time before
3:00 p.m. on the business day prior to the Delivery Date.
4. AGREEMENTS. The Company agrees:
a. To furnish promptly to the Underwriter and counsel
for the Underwriter one signed copy of the Registration Statement as originally
filed with the Commission, and each amendment or supplement thereto filed prior
to the date of this Agreement or relating to or covering the Certificates, and a
copy of each Prospectus filed with the Commission, including all consents and
exhibits filed therewith;
b. To deliver promptly to the Underwriter such number
of conformed copies of the Registration Statement and of each amendment or
supplement thereto filed prior to the date of this Agreement or relating to or
covering the Certificates and, during such period following the date of the this
Agreement in which any Prospectus is required by law to be delivered, such
number of copies of each Prospectus, as the Underwriter may reasonably request;
c. To file promptly with the Commission, during such
period following the date of the this Agreement in which any Prospectus is
required by law to be delivered, any amendment or supplement to the Registration
Statement or any Prospectus that may, in the judgment of the Company or the
Underwriter, be required by the Securities Act or requested by the Commission
and approved by the Underwriter;
d. Prior to filing with the Commission during the
period referred to in (c) above any amendment or supplement to the Registration
Statement or any Prospectus, to furnish a copy thereof to the Underwriter and to
counsel for the Underwriter, and the Company will not file any such amendment or
supplement to which the Underwriter shall reasonably object;
e. To advise the Underwriter promptly (i) when any
post-effective amendment to the Registration Statement relating to or covering
the Certificates becomes effective, (ii) of any request or proposed request by
the Commission for an amendment or supplement to the Registration Statement or
to any Prospectus (insofar as the amendment or supplement relates to or covers
the Certificates) or for any additional information, (iii) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or any order directed to any Prospectus or the initiation
or threat of any such stop order proceeding, (iv) of receipt by the Company of
any notification with respect to the suspension of the qualification of the
Certificates for sale in any jurisdiction or the initiation or threat of any
proceeding for that purpose and (v) of the happening of any event that makes
untrue any statement of a material fact made in the Registration Statement or
any Prospectus or that requires the making of a change in the Registration
Statement or any Prospectus in order to make any material statement therein not
misleading;
5
<PAGE>
f. If, during the period referred to in (c) above,
the Commission shall issue a stop order suspending the effectiveness of the
Registration Statement, the Company shall be obligated to make every reasonable
effort to obtain the lifting of that order at the earliest possible time;
g. As soon as practicable, to make generally
available to its security holders and to deliver to the Underwriter an earnings
statement conforming with the requirements of Section 11(a) of the Securities
Act and Rule 158 thereunder;
h. To endeavor to qualify the Certificates for offer
and sale under the securities laws of such jurisdictions as the Underwriter may
reasonably request, provided, however, that this Section 4(h) shall not obligate
the Company to file any general consent to service of process or to qualify to
do business in any jurisdiction or as a dealer in securities in any jurisdiction
in which it is not so qualified;
i. To pay or cause to be paid (i) the costs incident
in the preparation, printing and filing under the Securities Act of the
Registration Statement and any amendments thereof and supplements and exhibits
thereto; (ii) the costs of distributing the Registration Statement as originally
filed and each amendment and post-effective amendment thereof (including
exhibits), any Preliminary Prospectus, each Prospectus and any amendment or
supplement to the Prospectus as provided in this Agreement; (iii) the costs of
printing and distributing the Transaction Documents; (iv) the costs of filings,
if any, with the National Association of Securities Dealers, Inc.; (v) fees paid
to any rating agency in connection with the rating of the Certificates; (vi) the
fees and expenses of qualifying the Certificates, under the securities laws of
the several jurisdictions as provided in Section 4(h) hereof and of preparing
and printing, if so requested by the Underwriter, a preliminary blue sky survey
and legal investment survey concerning the legality of the Certificates,
including the Certificates, as an investment (including fees and disbursements
of counsel to the Underwriter in connection therewith); and (vii) any other
costs and expenses incident to the performance of the Company's obligations
under this Agreement; provided, however, that, except as provided above in this
paragraph (i) or in Section 8, the Underwriter shall pay its own costs and
expenses, including the fees and expenses of its counsel, any transfer taxes on
the Certificates that it may sell and the expenses of advertising any offering
of the Certificates made by the Underwriter; and
j. To file any documents and any amendments thereof
as may be required to be filed by it pursuant to the Securities Act and the
Exchange Act, including, but not limited to, the filing with the commission in a
Current Report on form 8-K all Computational Materials and ABS Term Sheets
furnished by the Underwriter and identified by it as such. The company will file
all such Computational Materials and ABS Term Sheets within the time period
allotted for such filing pursuant to the No-Action Letters (as hereinafter
defined).
6
<PAGE>
5. INDEMNIFICATION.
a. The Company shall indemnify and hold harmless the
Underwriter and each person, if any, who controls the Underwriter within the
meaning of Section 20 the Exchange Act or Section 15 of the Securities Act from
and against any loss, claim, damage or liability, joint or several, and any
action in respect thereof, to which the Underwriter or such controlling person
may become subject, under the Securities Act, the Exchange Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or any
Prospectus or arises out of, or is based upon, the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and shall reimburse the Underwriter
and such controlling person for any legal and other expenses reasonably incurred
by the Underwriter or such controlling person in investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action;
provided, however, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of, or
is based upon, (i) any untrue statement or alleged untrue statement or omission
or alleged omission made in any Preliminary Prospectus, the Registration
Statement or any Prospectus in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Underwriter
specifically for inclusion therein or (ii) any such untrue statement made in the
Underwriter's Computational Materials or ABS Term Sheets incorporated into the
Registration Statement by the filing thereof pursuant to Section 4(j); and
provided further that, as to any Preliminary Prospectus, this indemnity
agreement shall not inure to the benefit of the Underwriter or any person
controlling the Underwriter on account of any loss, claim, damage, liability or
action arising from the sale of Certificates to any person by that Underwriter
if that Underwriter failed to send or give a copy of the Prospectus, as the same
may be amended or supplemented, to that person within the time required by the
Securities Act, and the untrue statement or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact in such
Preliminary Prospectus was corrected in such Prospectus, unless such failure
resulted from non-compliance by the Company with Section 4(a) or 4(b). The
foregoing indemnity is in addition to any liability that the Company may
otherwise have to the Underwriter or any person or entity controlling the
Underwriter.
b. The Underwriter shall indemnify and hold harmless
the Company, each of its directors, each of its officers who signed the
Registration Statement, and any person who controls the Company within the
meaning of Section 20 of the Exchange Act or Section 15 of the Securities Act
from and against any loss, claim, damage or liability, joint or several, and any
action in respect thereof, to which the Company or any such director, officer or
controlling person may become subject, under the Securities Act, the Exchange
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or any Prospectus, or arises out of, or is based upon,
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, but
in each case only to the extent that (i) the untrue
7
<PAGE>
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Underwriter specifically for inclusion therein,
or (ii) any such untrue statement was made in the Underwriter's Computational
Materials or ABS Term Sheets incorporated into the Registration Statement by the
filing thereof pursuant to Section 4(j); and shall reimburse the Company for any
legal and other expenses reasonably incurred by the Company or any such
director, officer or controlling person in investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action.
The foregoing indemnity agreement is in addition to any liability that the
Underwriter may otherwise have to the Company or any of its directors, officers
or controlling persons.
c. Promptly after receipt by an indemnified party
under this Section of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section, notify the indemnifying party in writing
of the claim or commencement of that action, provided that the failure to notify
the indemnifying party shall not relieve it from any liability that it may have
to an indemnified party otherwise than under this Section. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified party. After
notice from the indemnifying party to the indemnified party that it will assume
the defense of any such claim or action, the indemnifying party will not be
liable to the indemnified party under this Section for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof; provided that the Underwriter shall have the right to employ
counsel to represent the Underwriter and the controlling persons referred to in
subsection (a) above who may be subject to liability arising out of any claim or
action in respect of which indemnity may be sought by the Underwriter against
the Company under this Section, if (i) in the reasonable judgment of the
Underwriter, there may be legal defenses available to the Underwriter, and those
controlling persons, different from or in addition to those available to the
Company, or there is a conflict of interest between the Underwriter and the
controlling persons, on the one hand, and the Company, on the other, or (ii) the
Company shall fail to select counsel reasonably satisfactory to the indemnified
party or parties, and in such event the fees and expenses of such separate
counsel shall be paid by the Company. In no event shall the Company be liable
for the fees and expenses of more than one separate firm of attorneys for the
Underwriter and its controlling persons in connection with any other action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances.
d. If the indemnification provided for in Sections
5(a) and 5(b) shall for any reason be unavailable to an indemnified party under
Section 5(a) or 5(b), as the case may be, in respect of any loss, claim, damage
or liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be
8
<PAGE>
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriter on the other from the offering of the Certificates or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriter on the other with respect to the
statements or omissions that resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriter on the other with respect to such offering shall be deemed
to be in the same proportion as the total net proceeds from the offering of the
Certificates (before deducting expenses) received by the Company bear to the
total underwriting discounts and commissions received by the Underwriter with
respect to such offering. The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Underwriter, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriter agree that it would not
be just and equitable if contributions pursuant to this Section 5(d) were to be
determined by pro rata allocation or by any other method of allocation that does
not take into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in this
Section 5(d) shall be deemed to include, for purposes of this Section 5(d), 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 Section 5(d), the Underwriter shall not
be required to contribute any amount in excess of the amount by which the
discount on the front cover of the Prospectus relating to the Certificates
underwritten by it and distributed to the public exceeds the amount of any
damages that the Underwriter has otherwise paid or become liable to pay by
reason of any 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.
e. The indemnity and contribution agreements
contained in this Section and the representations, warranties and agreements of
the Company in Section 1 and Section 4 hereof, shall survive the delivery of the
Certificates, and the provisions of this Section shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of any indemnified party.
6. TERMINATION. The obligations of the Underwriter under this
Agreement may be terminated by the Underwriter, in its absolute discretion by
notice given to and received by the Company prior to the delivery of and payment
for the Certificates, if, during the period beginning on the date of this
Agreement to and including the Delivery Date, (a) trading in securities
generally on the New York Stock Exchange is suspended or minimum prices are
established on that Exchange, or (b) a banking moratorium is declared by Federal
or New York State authorities, or (c) the United States is or becomes engaged in
hostilities that result in the
9
<PAGE>
declaration of a national emergency, or (d) any proposed rating of any class of
Certificates shall be lowered by the nationally recognized statistical rating
organization (as such term is used in Rule 15c3-1 under the Exchange Act) that
will initially rate the Certificates.
7. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITER. The
obligations of the Underwriter under this Agreement with respect to the
Certificates are subject to the accuracy, on the date of this Agreement and on
the Delivery Date, of the representations and warranties of the Company
contained herein, to performance by the Company of its obligations hereunder,
and to each of the following additional terms and conditions applicable to the
Certificates:
a. At or before the Delivery Date, no stop order
suspending the effectiveness of the Registration Statement shall have been
issued, and prior to that time no stop order proceeding shall have been
initiated or threatened by the Commission; any request of the Commission for
inclusion of additional information in the Registration Statement or any
Prospectus or otherwise shall have been complied with; and after the date of
this Agreement the Company shall not have filed with the Commission any
amendment or supplement to the Registration Statement or any Prospectus to which
the Underwriter shall have reasonably objected.
b. The Underwriter shall not have discovered and
disclosed to the Company on or prior to the Delivery Date that the Registration
Statement or any Prospectus contains an untrue statement of a fact that, in the
opinion of counsel to the Underwriter, is material or omits to state a fact
that, in the opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
c. All corporate proceedings and other legal matters
incident to the authorization, form and validity of the Certificates and the
Transaction Documents and the form of the Registration Statement, the Prospectus
(other than financial statements and other financial data) and all other legal
matters relating to this Agreement and the transactions contemplated hereby
shall be reasonably satisfactory in all respects to counsel for the Underwriter,
and the Company shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass upon such
matters.
d. The Underwriter shall have received the following:
i. A favorable opinion, dated the Delivery
Date, of (A) counsel for the Company, (B) counsel for the Servicer, (C)
counsel for the Special Servicer, and (D) counsel for the Trustee and
the Fiscal Agent.
ii. A certificate of the Company, dated the
Delivery Date, substantially in the form attached hereto as Exhibit A.
10
<PAGE>
iii. A letter dated the date hereof and
satisfactory in form and substance to the Underwriter and the
Underwriter's counsel, from Deloitte & Touche LLP, certified public
accountants, to the effect that they have performed certain specified
procedures, all of which have been agreed to by the Underwriter, as a
result of which they determined that certain information of an
accounting, financial or statistical nature set forth in the Prospectus
Supplement under the captions "Description of the Mortgage Pool",
"Description of the Certificates" and "Yield, Prepayment and Maturity
Considerations" agrees with the records of the Company excluding any
questions of legal interpretation.
iv. Such other letters, opinions and
certificates as have been requested by those nationally recognized
statistical rating organizations (as such term is used in Rule 15c3-1
under the Exchange Act) that will initially rate the Certificates.
8. ITEMS DELIVERED RELATING TO COMPUTATIONAL MATERIALS AND ABS
TERM SHEETS.
a. The Underwriter shall deliver to the Company an
officer's certificate (i) stating that attached thereto are all of the
information, tables, charts and other items that constitute "Computational
Materials" (as defined in the letter dated May 4, 1994, from Brown & Wood to
Linda C. Quinn, Director of the Division of Corporation Finance of the
Commission (together with the Commission's response thereto dated May 20, 1994,
the "Kidder Letter")) or that constitute "ABS Term Sheets" (as defined in the
letter dated February 13, 1995, from Cleary, Gottlieb, Steen & Hamilton to
Abigail Arms, Associate Director of the Division of Corporate Finance of the
Commission (together with the Commission's response thereto dated February 17,
1995, the "PSA Letter")) (the Kidder Letter and the PSA Letter, together, the
"No-Action Letters") prepared by the Underwriter which are required to be filed
with the Commission pursuant to the terms of the No-Action Letters and stating
that the Underwriter has otherwise complied with the terms of the No-Action
Letters and (ii) representing that (A) other than the items described in clause
(i), no term sheets, collateral information or other data in written form that
would be required to be filed with the Commission pursuant to the No-Action
Letters were furnished by such Underwriter to actual or potential investors for
the Registered Certificates prior to the Delivery Date and (B) to the best
knowledge of such officer, the items described in clause (i) do not include any
untrue or misleading statement of a material fact nor, when taken together with
the Prospectus, and in the light of the circumstances in which the statements in
such items were made, omit to state any material fact required to be stated in
such items or necessary to make the statements contained in such items not
misleading.
b. Deloitte & Touche LLP shall furnish to the Company
and the Underwriter a letter or letters, each in form and substance satisfactory
to the Company, relating to the Computational Materials and ABS Terms Sheets of
the Underwriter filed in accordance with Section 4(j) and dated the date of the
related Current Report on Form 8-K and stating in effect that:
11
<PAGE>
i. using the assumptions and methodology
used by the Underwriter, all of which shall be described by reference
in the letter, they have recalculated the numerical data and dates set
forth in the 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; and
ii. if such Computational Materials and ABS
Term Sheets include data reflecting the distribution of interest at
other than a fixed rate or the distribution in reduction of the
aggregate Certificate Principal Amount (as defined in the Prospectus
Supplement) of a class of Certificates according to a schedule of
planned or targeted amounts, or reflecting other characteristics which
give rise to the use of tables in such Computational Materials and ABS
Term Sheets, such letter shall also set forth such other statements as
are customarily set forth by Deloitte & Touche LLP in such letter with
respect to such data.
9. FEES AND EXPENSES. If the sale of the Certificates shall
not be consummated because any condition to the Underwriter's obligations set
forth in Section 7 hereof is not satisfied or because of any refusal, inability
or failure on the part of the Company to perform any agreement herein or comply
with any provision hereof other than by reason of default of the Underwriter,
the Company shall reimburse the Underwriter for the reasonable fees and expenses
of its counsel and for such other out-of-pocket expenses as shall have been
incurred in connection with this Agreement and the proposed purchase of the
Certificates, and upon demand the Company shall pay the full amount thereof to
the Underwriter.
10. NOTICES. The Company shall be entitled to act and rely
upon any request, consent, notice or agreement by Lehman Brothers Inc. Any
notice by the Company to the Underwriter shall be sufficient if given in writing
or by telegraph addressed to the Underwriter at 200 Vesey Street, New York, New
York 10285, attention of Wayne C. Olson, and any notice by the Underwriter to
the Company shall be sufficient if given in writing or by telegraph addressed to
the Company at 200 Vesey Street, New York, New York 10285, attention of the
President.
11. SUCCESSORS. This Agreement shall be binding upon the
Underwriter, the Company and their respective successors. This Agreement and the
terms and provisions hereof are for the sole benefit of only those persons,
except that the indemnity agreement of the Underwriter contained in Section 5
hereof shall be deemed to be also for the benefit of directors of the Company,
officers of the Company who have signed the Registration Statement and any
person controlling the Company and the indemnity agreement of the Company
contained in Section 5 shall be deemed to be also for the benefit of any person
controlling the Underwriter. Nothing in this Agreement is intended or shall be
construed to give any person, other than the persons referred to in this
Section, any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision contained herein.
12
<PAGE>
12. BUSINESS DAY. For purposes of this Agreement, "business
day" means any day on which the New York Stock Exchange is open for trading.
13. APPLICABLE LAW. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
14. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, and, if executed in more than one counterpart, the executed
counterparts shall together constitute a single instrument.
13
<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
between the Company and the Underwriter.
Very truly yours,
STRUCTURED ASSET SECURITIES
CORPORATION
By:_____________________________________
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
LEHMAN BROTHERS INC.
By:_________________________________
Name:
Title:
14
<PAGE>
SCHEDULE I
Underwriting Agreement, dated October 18, 1996.
Title and Description of the Certificates:
LB Commercial Conduit Mortgage Trust II Multiclass Pass-Through
Certificates, Series 1996-C2, Class A, Class IO, Class B, Class C,
Class D and Class E.
Cut-off Date: October 1, 1996.
<TABLE>
<CAPTION>
CERTIFICATES
=========================================================================================================================
CLASS A CLASS IO CLASS B CLASS C CLASS D CLASS E
------- -------- ------- ------- ------- -------
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Initial Aggregate $270,097,693 $397,202,489(2) $27,804,174 $23,832,149 $15,888,100 $7,944,050
Certificate Principal
Amount or Certificate
Notional Amount
- -------------------------------------------------------------------------------------------------------------------------
Initial Certificate 7.416% 1.249% 7.606% 7.726% 7.886% 7.886%
Interest Rate
- -------------------------------------------------------------------------------------------------------------------------
Rating Aaa/AAA/AAA Aaa/AAA/AAA Aa2/AA/AA A2/A/A Baa2/BBB/BBB Baa3/BBB-
/BBB-
- -------------------------------------------------------------------------------------------------------------------------
Purchase Price(1)
=========================================================================================================================
</TABLE>
(1) Expressed as a percentage of the initial aggregate Certificate
Principal Amount or Certificate Notional Amount, as applicable, of each
class of Certificates. The Purchase Price for each class of
Certificates will include accrued interest at the initial Certificate
Interest Rate therefor on the initial aggregate Certificate Principal
Amount or Certificate Notional Amount thereof from the Cut-off Date to
but not including the Closing Date.
(2) Notional amount.
Closing Time, Date and Location: 10:00 a.m., New York City time, on October 30,
1996 at the offices of Thacher Proffitt & Wood.
-------------------------------------------
Issuance and delivery of Certificates: The Class A, Class B, Class C, Class D
and Class E Certificates (the "Book-Entry 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 the BookEntry
Certificates through the book-entry facilities of The Depository Trust Company
in minimum denominations of initial actual principal amount of $10,000 and
integral multiples of $1.00 in excess thereof. The Class IO Certificates will be
issued in minimum denominations of initial notional principal amount of $500,000
and integral multiples of $1.00 in excess thereof. The Class IO Certificates
will be delivered in fully registered, certificated form in such names and
authorized denominations as the Underwriter may direct.
<PAGE>
EXHIBIT A
LB Commercial Conduit Mortgage Trust II
Multiclass Pass-Through Certificates
Series 1996-C2
CERTIFICATE OF AN OFFICER OF
STRUCTURED ASSET SECURITIES CORPORATION
I, _______________ hereby certify that I am a ______________ of
Structured Asset Securities Corporation, a Delaware corporation (the "Company"),
and further certify as follows:
2. Attached hereto are true, complete and correct copies of the
certificate of incorporation and by-laws of the Company as in full force and
effect on the date hereof, together with a certificate of good standing in
respect of the Company issued by the Secretary of State of the State of
Delaware. No event (including, without limitation, any act or omission on the
part of the Company) has occurred since the date thereof which has affected the
good standing of the Company under the laws of the State of Delaware.
3. No proceedings looking toward merger, liquidation, dissolution or
bankruptcy of the Company are pending or contemplated.
4. Each individual who, as an officer or representative of the Company,
signed (a) the Underwriting Agreement, dated as of October 18, 1996 (the
"Underwriting Agreement"), between the Company as seller and Lehman Brothers
Inc. ("LBI") as underwriter, (b) the Certificate Purchase Agreement, dated as of
October 18, 1996 (the "Certificate Purchase Agreement"), between the Company as
seller and LBI as purchaser, (c) the Trust Agreement, dated as of October 1,
1996 (the "Trust Agreement"), among the Company as depositor, GMAC Commercial
Mortgage Corporation as servicer, CRIIMI MAE Services Limited Partnership as
special servicer, LaSalle National Bank as trustee and ABN AMRO Bank N.V. as
fiscal agent, (d) the Mortgage Loan Purchase Agreement, dated as of October 18,
1996 (the "Mortgage Loan Purchase Agreement"), between the Company as purchaser
and Lehman Brothers Holdings Inc., doing business as Lehman Capital, A Division
of Lehman Brothers Holdings Inc., as seller, or (e) any other document or
certificate delivered by or on behalf of the Company prior hereto or on the date
hereof in connection with the transactions contemplated in the Mortgage Loan
Purchase Agreement, the Underwriting Agreement, the Certificate Purchase
Agreement and the Trust Agreement (collectively, the "Agreements") was, at the
respective times of such signing and delivery, and is as of the date hereof,
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.
<PAGE>
5. There are no actions, suits or proceedings pending or, to the best
of my knowledge, threatened, against or affecting the Company which if adversely
determined, individually or in the aggregate, would materially and adversely
affect the Company's ability to perform its obligations under any of the
Agreements.
6. Attached hereto is a true, complete and correct copy of the
resolutions duly adopted by the board of directors of the Company with respect
to the transactions contemplated in the Agreements, and such resolutions have
not been amended, modified, annulled or revoked since the date thereof and are
in full force and effect on the date hereof.
<PAGE>
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: October 30, 1996
________________________________
Name:
Title:
I, _____________, a _____________ of the Company, hereby certify that
______________ is a duly elected or appointed, qualified and acting of the
Company, and that the signature appearing above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: October 30, 1996
________________________________
Name:
Title:
EXHIBIT 4.1
<PAGE>
================================================================================
STRUCTURED ASSET SECURITIES CORPORATION,
Depositor
LASALLE NATIONAL BANK,
Trustee
ABN AMRO BANK N.V.,
Fiscal Agent
GMAC COMMERCIAL MORTGAGE CORPORATION,
Servicer
and
CRIIMI MAE SERVICES LIMITED PARTNERSHIP,
Special Servicer
----------------------------------------
TRUST AGREEMENT
Dated as of October 1, 1996
----------------------------------------
LB COMMERCIAL CONDUIT MORTGAGE TRUST II,
MULTICLASS PASS-THROUGH CERTIFICATES,
SERIES 1996-C2
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT
ARTICLE I
DEFINITIONS
1.01 DEFINITIONS......................................................... 4
1.02 CALCULATIONS RESPECTING THE MORTGAGE POOL........................... 41
ARTICLE II
DECLARATION OF TRUST FUND;
ISSUANCE OF CERTIFICATES;
REPRESENTATIONS AND WARRANTIES
2.01 CREATION AND DECLARATION OF TRUST FUND; CONVEYANCE OF MORTGAGE
LOANS............................................................... 43
2.02 ACCEPTANCE OF REMIC I BY TRUSTEE; REVIEW OF MORTGAGE LOAN
DOCUMENTATION....................................................... 48
2.03 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR..................... 50
2.04 REPURCHASE OF MORTGAGE LOANS........................................ 57
2.05 ISSUANCE OF CLASS RI CERTIFICATES; CREATION OF REMIC I REGULAR
INTERESTS........................................................... 58
2.06 CONVEYANCE OF REMIC I REGULAR INTERESTS; ACCEPTANCE OF REMIC II BY
THE TRUSTEE......................................................... 58
2.07 ISSUANCE OF CLASS RII CERTIFICATES; CREATION OF REMIC II REGULAR
INTERESTS........................................................... 58
2.08 CONVEYANCE OF REMIC II REGULAR INTERESTS; ACCEPTANCE OF REMIC III BY
TRUSTEE............................................................. 59
2.09 ISSUANCE OF REMIC III CERTIFICATES.................................. 59
ARTICLE III
THE CERTIFICATES
3.01 THE CERTIFICATES.................................................... 61
3.02 REGISTRATION........................................................ 61
3.03 TRANSFER AND EXCHANGE OF CERTIFICATES............................... 62
3.04 TEMPORARY CERTIFICATES.............................................. 64
3.05 APPOINTMENT OF PAYING AGENT......................................... 64
3.06 BOOKENTRY CERTIFICATES.............................................. 65
3.07 NOTICES TO CLEARING AGENCY.......................................... 66
3.08 PHYSICAL CERTIFICATES............................................... 66
<PAGE>
ARTICLE IV
ADVANCES; CERTAIN MATTERS
INVOLVING THE TRUSTEE AND THE FISCAL AGENT
4.01 P&I ADVANCES BY SERVICER............................................ 67
4.02 SERVICING ADVANCES.................................................. 67
4.03 ADVANCES BY TRUSTEE AND FISCAL AGENT................................ 67
4.04 EVIDENCE OF NONRECOVERABILITY....................................... 68
4.05 INTEREST ON ADVANCES; CALCULATION OF OUTSTANDING ADVANCES WITH
RESPECT TO A MORTGAGE LOAN.......................................... 69
4.06 REIMBURSEMENT OF ADVANCES AND ADVANCE INTEREST...................... 69
4.07 REPRESENTATIONS AND WARRANTIES OF THE FISCAL AGENT.................. 70
4.08 FISCAL AGENT EVENT OF DEFAULT....................................... 71
4.09 PROCEDURE UPON FISCAL AGENT EVENT OF DEFAULT........................ 72
4.10 MERGER OR CONSOLIDATION............................................. 73
4.11 RESIGNATION OF FISCAL AGENT......................................... 73
4.12 FEES OF THE FISCAL AGENT............................................ 74
4.13 LIMITATION ON LIABILITY OF THE FISCAL AGENT AND OTHERS.............. 74
4.14 INDEMNIFICATION OF FISCAL AGENT..................................... 74
ARTICLE V
ADMINISTRATION OF THE TRUST FUND
5.01 DUTIES OF THE SERVICER AND THE SPECIAL SERVICER..................... 77
5.02 RESIGNATION OR TERMINATION OF SERVICER.............................. 77
5.03 RESIGNATION OR TERMINATION OF SPECIAL SERVICER...................... 79
5.04 THE CUSTODIAL ACCOUNT AND THE REO ACCOUNTS.......................... 80
5.05 THE COLLECTION ACCOUNT.............................................. 81
5.06 SALE OF DEFAULTED MORTGAGE LOANS.................................... 82
5.07 SALE OF DEFAULTED MORTGAGE LOANS AND REO PROPERTIES................. 82
5.08 OPERATING ADVISER; ELECTIONS........................................ 84
5.09 LIMITATION ON LIABILITY OF OPERATING ADVISER........................ 85
5.10 DUTIES OF OPERATING ADVISER......................................... 86
5.11 REPORTS TO CERTIFICATEHOLDERS....................................... 87
5.12 REPORTS BY TRUSTEE.................................................. 90
5.13 OTHER INFORMATION AVAILABLE TO CERTIFICATEHOLDERS................... 91
ARTICLE VI
DISTRIBUTIONS TO HOLDERS OF CERTIFICATES
6.01 DISTRIBUTIONS GENERALLY............................................. 92
6.02 DISTRIBUTIONS OUT OF THE AVAILABLE DISTRIBUTION AMOUNT;
DISTRIBUTIONS OF NET PREPAYMENT PREMIUMS............................ 93
ii
<PAGE>
6.03 ALLOCATION OF REALIZED LOSSES AND ADDITIONAL EXPENSE LOSSES TO
THE REMIC III CERTIFICATES.......................................... 98
6.04 DEEMED DISTRIBUTIONS ON, AND ALLOCATIONS OF REALIZED LOSSES AND
ADDITIONAL EXPENSE LOSSES TO, THE REMIC II REGULAR INTERESTS........ 99
6.05 DEEMED DISTRIBUTIONS ON, AND ALLOCATIONS OF REALIZED LOSSES AND
ADDITIONAL EXPENSE LOSSES TO, THE REMIC I REGULAR INTERESTS.........101
6.06 NET AGGREGATE PREPAYMENT INTEREST SHORTFALLS........................102
6.07 ADJUSTMENT OF SERVICING FEES........................................102
6.08 COMPLIANCE WITH WITHHOLDING REQUIREMENTS............................102
ARTICLE VII
CONCERNING THE TRUSTEE AND THE FISCAL AGENT
7.01 DUTIES OF TRUSTEE AND FISCAL AGENT..................................103
7.02 CERTAIN MATTERS AFFECTING THE TRUSTEE...............................104
7.03 TRUSTEE AND THE FISCAL AGENT NOT LIABLE FOR CERTIFICATES............106
7.04 TRUSTEE AND THE FISCAL AGENT MAY OWN CERTIFICATES...................106
7.05 ELIGIBILITY REQUIREMENTS FOR TRUSTEE................................106
7.06 RESIGNATION AND REMOVAL OF TRUSTEE..................................107
7.07 SUCCESSOR TRUSTEE AND SUCCESSOR FISCAL AGENT........................108
7.08 MERGER OR CONSOLIDATION OF TRUSTEE..................................109
7.09 APPOINTMENT OF COTRUSTEE, SEPARATE TRUSTEE OR CUSTODIAN.............109
7.10 AUTHENTICATING AGENTS...............................................111
7.11 INDEMNIFICATION OF TRUSTEE..........................................112
7.12 FEES AND EXPENSES OF TRUSTEE AND THE FISCAL AGENT...................114
7.13 COLLECTION OF MONEYS................................................114
ARTICLE VIII
PURCHASE AND
TERMINATION OF THE TRUST FUND
8.01 TERMINATION OF TRUST FUND UPON REPURCHASE OR LIQUIDATION OF ALL
MORTGAGE LOANS......................................................115
8.02 PROCEDURE UPON TERMINATION OF TRUST FUND............................116
8.03 ADDITIONAL TRUST FUND TERMINATION REQUIREMENTS......................117
ARTICLE IX
RIGHTS OF CERTIFICATEHOLDERS
9.01 LIMITATION ON RIGHTS OF HOLDERS.....................................119
9.02 ACCESS TO LIST OF HOLDERS...........................................120
9.03 ACTS OF HOLDERS OF CERTIFICATES.....................................120
ARTICLE X
iii
<PAGE>
REMIC ADMINISTRATION
10.01 REMIC ADMINISTRATION................................................122
10.02 PROHIBITED TRANSACTIONS AND ACTIVITIES..............................125
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.01 BINDING NATURE OF AGREEMENT; BENEFITS OF AGREEMENT..................126
11.02 ENTIRE AGREEMENT....................................................126
11.03 AMENDMENT...........................................................126
11.04 GOVERNING LAW.......................................................127
11.05 NOTICES.............................................................127
11.06 SEVERABILITY OF PROVISIONS..........................................128
11.07 INDULGENCES; NO WAIVERS.............................................128
11.08 HEADINGS NOT TO AFFECT INTERPRETATION...............................128
11.09 SPECIAL NOTICES TO THE RATING AGENCIES..............................128
11.10 COUNTERPARTS........................................................130
11.11 SUCCESSORS AND ASSIGNS..............................................130
EXHIBITS
EXHIBIT A-1 Form of Class A Certificates
EXHIBIT A-2 Form of Class B Certificates
EXHIBIT A-3 Form of Class C Certificates
EXHIBIT A-4 Form of Class D Certificates
EXHIBIT A-5 Form of Class E Certificates
EXHIBIT A-6 Form of Class IO Certificates
EXHIBIT A-7 Form of Class F Certificates
EXHIBIT A-8 Form of Class G Certificates
EXHIBIT A-9 Form of Class H Certificates
EXHIBIT A-10 Form of Class J Certificates
EXHIBIT A-11 Form of Class R-I Certificates
EXHIBIT A-12 Form of Class R-II Certificates
EXHIBIT A-13 Form of Class R-III Certificates
EXHIBIT B-1 Form of Trustee (or Custodian) Initial Certification
EXHIBIT B-2 Form of Trustee (or Custodian) Interim Certification
EXHIBIT B-3 Form of Trustee (or Custodian) Final Certification
EXHIBIT C-1 Form of Transferor Certificate Pursuant to Section 3.03(c)(i)
EXHIBIT C-2 Form of Transferor Certificate Pursuant to Section 3.03(c)(ii)
EXHIBIT C-3 Form of Transferee Certificate Pursuant to Section 3.03(c)(ii)
EXHIBIT D Form of Affidavit Pursuant to Sections 860(D)(a)(6)(A) and
860E(e)(4) of the Internal Revenue Code of 1986, as Amended
EXHIBIT E Form of UCC-1 Financing Statement
iv
<PAGE>
SCHEDULES
SCHEDULE I Mortgage Loan Schedule
SCHEDULE II Mortgage Loan Schedule Information
SCHEDULE III Information to be included in Database
v
<PAGE>
TRUST AGREEMENT dated as of October 1, 1996 (this "AGREEMENT")
among STRUCTURED ASSET SECURITIES CORPORATION, as depositor (the "DEPOSITOR"),
LASALLE NATIONAL BANK, as trustee (the "TRUSTEE"), ABN AMRO BANK N.V., as fiscal
agent (only in its capacity as a party required to make Advances (as herein
defined) pursuant to Article IV hereof) (the "FISCAL AGENT"), GMAC COMMERCIAL
MORTGAGE CORPORATION, as servicer (the "SERVICER"), and CRIIMI MAE SERVICES
LIMITED PARTNERSHIP, as special servicer (the "SPECIAL SERVICER").
PRELIMINARY STATEMENT
The Depositor has acquired the Mortgage Loans (as herein
defined), net of any Retained Yield (as defined herein) with respect thereto,
from Lehman Brothers Holdings, Inc., doing business as Lehman Capital, a
Division of Lehman Brothers Holdings, Inc., as seller (the "SELLER"), and on the
Closing Date (as herein defined) is the owner of the Mortgage Loans (net of any
Retained Yield with respect thereto) and the other property being conveyed by it
to the Trustee for inclusion in the Trust Fund (as herein defined). On the
Closing Date, the Depositor will acquire the multiclass pass-through
certificates issued hereunder (the "CERTIFICATES") as consideration for its
transfer to the trust created hereby (the "TRUST") of the Mortgage Loans (net of
any Retained Yield with respect thereto) and the other property constituting the
Trust Fund. The Trust is hereby designated as LB Commercial Conduit Mortgage
Trust II. The Certificates will be issued in multiple classes (each, a "CLASS").
The Depositor has duly authorized the execution and delivery of this Agreement
to provide for the foregoing and the issuance of the Certificates representing
in the aggregate the entire beneficial ownership of the Trust Fund. All
covenants and agreements made by the Depositor, the Trustee, the Fiscal Agent,
the Servicer and the Special Servicer herein with respect to the Mortgage Loans
(net of any Retained Yield with respect thereto) and the other property
constituting the Trust Fund are for the benefit of the holders of the
Certificates. The Depositor, the Trustee, the Fiscal Agent, the Servicer and the
Special Servicer are entering into this Agreement, and the Trustee is accepting
the trusts created hereby, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged.
As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the Mortgage Loans (net of any Retained
Yield with respect thereto) and certain other related assets subject to this
Agreement as a real estate mortgage investment conduit (a "REMIC") for federal
income tax purposes, and such segregated pool of assets will be designated as
"REMIC I". The Class R-I Certificates will represent the sole class of "residual
interests" in REMIC I for purposes of the REMIC Provisions (as herein defined)
under federal income tax law. With respect to each Mortgage Loan, there shall be
a corresponding "regular interest" in REMIC I (each, a "REMIC I REGULAR
INTEREST"). The designation for each such REMIC I Regular Interest shall be the
loan number for the related Mortgage Loan set forth on the schedule of Mortgage
Loans attached hereto as SCHEDULE I. The remittance rate (the "REMIC I
REMITTANCE RATE") and the initial stated principal amount (the initial
"UNCERTIFICATED PRINCIPAL AMOUNT") of each such REMIC I Regular Interest shall
equal the Net Mortgage Rate (as defined herein) as of the Closing Date and the
Cut-off Date Principal Balance (as defined herein), respectively, for the
related Mortgage Loan. Each such REMIC I Regular interest will accrue interest
on the basis of a 360-day year consisting of twelve 30-day months. Determined
solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each such REMIC I
Regular Interest shall be the date that is the first
<PAGE>
Distribution Date (as defined herein) that follows the Stated Maturity Date (as
defined herein) for the related Mortgage Loan. None of the REMIC I Regular
Interests will be certificated.
As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC II". The Class R-II Certificates will represent the sole
class of "residual interests" in REMIC II for purposes of the REMIC Provisions
under federal income tax law. The following table irrevocably sets forth the
designation, remittance rate (the "REMIC II REMITTANCE RATE"), initial
Uncertificated Principal Amount and "latest possible maturity date" for each of
the "regular interests" in REMIC II (the "REMIC II REGULAR INTERESTS"). None of
the REMIC II Regular Interests will be certificated.
<TABLE>
<CAPTION>
REMIC II Initial Uncertificated Latest Possible
Designation Remittance Rate(1) Principal Amount Maturity Date(3)
----------- ------------------ ---------------- ----------------
<S> <C> <C> <C>
A Variable (2) $270,097,693 April 25, 2022
B Variable (2) $27,804,174 April 25, 2022
C Variable (2) $23,832,149 April 25, 2022
D Variable (2) $15,888,100 April 25, 2022
E Variable (2) $7,944,050 April 25, 2022
F Variable (2) $21,846,137 April 25, 2022
G Variable (2) $13,902,087 April 25, 2022
H Variable (2) $5,958,037 April 25, 2022
J Variable (2) $9,930,062 April 25, 2022
</TABLE>
- ------------
(1) Interest on each REMIC II Regular Interest will be calculated on the
basis of a 360-day year consisting of twelve 30-day months.
(2) Calculated in accordance with the definition of "REMIC II Remittance
Rate".
(3) Determined solely for purposes of satisfying Treasury regulation
Section 1.860G-1(a)(4)(iii), the "latest possible maturity date" has
been set to the third anniversary of the first Distribution Date (as
defined herein) that follows the scheduled maturity date for the
Mortgage Loan with, as of the Closing Date, the longest remaining term
to scheduled maturity.
As provided herein, the Trustee 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 evidence the
sole class of "residual interests" in REMIC III for purposes of the REMIC
Provisions under federal income tax law. The following table sets forth the
Class designation, interest rate (the "CERTIFICATE INTEREST RATE"), the initial
aggregate principal amount (the initial "AGGREGATE CERTIFICATE PRINCIPAL
AMOUNT") and latest possible maturity date for each Class of Certificates
representing "regular interests" in REMIC III (the "REMIC III REGULAR
CERTIFICATES"):
2
<PAGE>
<TABLE>
<CAPTION>
Initial Aggregate
Certificate Certificate Latest Possible
Class Interest Principal Maturity
Designation Rate(1) Amount Date(4)
----------- ------- ------ -------
<S> <C> <C> <C>
Class A Variable (2) $270,097,693 April 25, 2022
Class IO Variable (2) $397,202,489(3) April 25, 2022
Class B Variable (2) $27,804,174 April 25, 2022
Class C Variable (2) $23,832,149 April 25, 2022
Class D Variable (2) $15,888,100 April 25, 2022
Class E Variable (2) $7,944,050 April 25, 2022
Class F Variable (2) $21,846,137 April 25, 2022
Class G Variable (2) $13,902,087 April 25, 2022
Class H Variable (2) $5,958,037 April 25, 2022
Class J Variable (2) $9,930,062 April 25, 2022
</TABLE>
- -----------
(1) Interest on each Class of REMIC III Regular Certificates will be
calculated on the basis of a 360-day year consisting of twelve 30-day
months.
(2) Calculated in accordance with the definition of "Certificate Interest
Rate".
(3) The Class IO Certificates do not have an Aggregate Certificate
Principal Amount. Interest on the Class IO Certificates is computed on
the basis of an aggregate notional amount (an "AGGREGATE CERTIFICATE
NOTIONAL AMOUNT") equal to the aggregate of the Uncertificated
Principal Amounts of REMIC II Regular Interest A, REMIC II Regular
Interest B, REMIC II Regular Interest C, REMIC II Regular Interest D,
REMIC II Regular Interest E, REMIC II Regular Interest F, REMIC II
Regular Interest G, REMIC II Regular Interest H and REMIC II Regular
Interest J outstanding from time to time.
(4) Determined solely for purposes of satisfying Treasury regulation
Section 1.860G-1(a)(4)(iii), the "latest possible maturity date" has
been set to the third anniversary of the first Distribution Date that
follows the scheduled maturity date for the Mortgage Loan with, as of
the Closing Date, the longest remaining term to scheduled maturity.
The Class A, Class B, Class C, Class D, Class E and Class IO
Certificates issued hereunder have been offered for sale pursuant to a
Prospectus, dated January 29, 1996 (the "1996-C2 BASE PROSPECTUS") and a
Prospectus Supplement dated October 18, 1996 (the "1996-C2 PROSPECTUS
SUPPLEMENT"; and together with the 1996-C2 Base Prospectus, the "1996-C2
PROSPECTUS"), and the Class F, Class G, Class H and Class J Certificates issued
hereunder have been offered for sale pursuant to a Private Placement Memorandum
dated October 18, 1996 (the "1996-C2 PPM").
The Mortgage Loans initially constituting the Trust Fund had
an aggregate Cut-off Date Principal Balance of $397,202,489.27.
The Depositor, the Trustee, the Fiscal Agent, the Servicer and
the Special Servicer hereby agree as follows:
3
<PAGE>
ARTICLE I
DEFINITIONS
Section 1.01 DEFINITIONS. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
"ACCEPTED SERVICING PRACTICES" has, with respect to the
Servicer, the meaning set forth in the Servicing Agreement and has, with respect
to the Special Servicer, the meaning set forth in the Special Servicing
Agreement.
"ACCOUNTANT" means a person engaged in the practice of
accounting who is Independent.
"ACCOUNTS" means, collectively, the Collection Account, the
Custodial Account and any REO Accounts.
"ACCRUED CERTIFICATE INTEREST" means, with respect to any
Class of REMIC III Regular Certificates, for any Distribution Date, one month's
interest (calculated on the basis of a 360-day year consisting of twelve 30-day
months) at the Certificate Interest Rate applicable to such Class of
Certificates for such Distribution Date, accrued on the Aggregate Certificate
Principal Amount or Aggregate Certificate Notional Amount, as the case may be,
of such Class of Certificates outstanding immediately prior to such Distribution
Date. Without affecting the amount of Accrued Certificate Interest in respect of
any Class of REMIC III Regular Certificates for any Distribution Date, the
"accrual period" in respect of such Class for such Distribution Date shall be
deemed to be the calendar month most recently ended prior to such Distribution
Date.
"ACQUISITION DATE" means the date upon which, under the Code
(and in particular the REMIC Provisions and Section 856(e) of the Code), REMIC I
is deemed to have acquired an REO Property.
"ADDITIONAL EXPENSE LOSS" means a loss to the Trust realized
upon payment by the Trust of an Additional Trust Fund Expense; provided that the
payment of Advance Interest will be deemed not to be an Additional Expense Loss
to the extent that such payment is made out of late payment charges and/or
Default Interest collected on the related Mortgage Loan and the payment of any
Additional Trust Fund Expense will be deemed not to be an Additional Expense
Loss to the extent that such payment is made out of the portion of Repurchase
Proceeds paid in respect of the related Deleted Mortgage Loan or REO Property to
cover such.
"ADDITIONAL TRUST FUND EXPENSES" means any of the following
items: (i) to the extent not offset by a reduction in the Servicing Fees for the
related Specially Serviced Mortgage Loans and/or REO Loans for the corresponding
periods, Special Servicing Supplemental Fees; (ii) Advance Interest; (iii) any
outstanding and unreimbursed Servicing Advance that is determined to be a
Nonrecoverable Advance; (iv) indemnification of the Trustee and certain related
Persons pursuant to Section 7.11(a) or reimbursement of the Trustee and/or the
Fiscal
4
<PAGE>
Agent for costs and expenses pursuant to Section 7.12; (v) indemnification of
the Servicer and certain related Persons pursuant to Section 4.23(a) of the
Servicing Agreement; (vi) indemnification of the Special Servicer and certain
related Persons pursuant to Section 4.24(a) of the Special Servicing Agreement;
(vii) indemnification of the Fiscal Agent and certain related Persons pursuant
to Section 4.14(a); (viii) tax-related expenses payable out of the Collection
Account pursuant to Section 10.01(c); (ix) any federal, state and local taxes
imposed on either the Trust Fund or its assets or transactions payable out of
the Collection Account pursuant to Section 10.01(h); and (x) to the extent not
included in the calculation of a Realized Loss and not covered by
indemnification from one of the parties hereto, any other expense of the Trust
for which there is no corresponding payment from a Mortgagor.
"ADMINISTRATIVE COST RATE" means, with respect to any Mortgage
Loan (or successor REO Loan), as of any date of determination, the sum of the
then applicable Servicing Fee Rate, the Trustee Fee Rate and the Special
Servicing Basic Fee Rate.
"ADVANCE" means either a P&I Advance or a Servicing Advance.
"ADVANCE INTEREST" means interest payable to the Servicer, the
Trustee or the Fiscal Agent on outstanding Advances made thereby pursuant to
Article IV of this Agreement.
"ADVANCE RATE" means Prime.
"AFFILIATE" means, with respect to any specified Person, any
other Person controlling or controlled by or under common control with such
specified Person. For the purposes of this definition, "control" when used with
respect to any specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"AGGREGATE ASSIGNED ASSET VALUE" means, as of any date of
determination, the then aggregate of the Assigned Asset Values of the Mortgage
Pool.
"AGGREGATE CERTIFICATE NOTIONAL AMOUNT" means, with respect to
the Class IO Certificates, the aggregate of the Uncertificated Principal Amounts
of REMIC II Regular Interest A, REMIC II Regular Interest B, REMIC II Regular
Interest C, REMIC II Regular Interest D, REMIC II Regular Interest E, REMIC II
Regular Interest F, REMIC II Regular Interest G, REMIC II Regular Interest H and
REMIC II Regular Interest J.
"AGGREGATE CERTIFICATE PRINCIPAL AMOUNT" means, as the context
may require, either: (a) the aggregate of the Certificate Principal Amounts of
all the Sequential Pay Certificates at any date of determination; or (b) with
respect to any particular Class or Classes of Sequential Pay Certificates, the
aggregate of the Certificate Principal Amounts of all Certificates of that Class
or those Classes at any date of determination.
"AGGREGATE SCHEDULED PRINCIPAL BALANCE" means, as of any date
of determination, the then aggregate of the Scheduled Principal Balances of the
Mortgage Pool.
5
<PAGE>
"AGGREGATE STATED PRINCIPAL BALANCE" means, as of any date of
determination, the then aggregate of the Stated Principal Balances of the
Mortgage Pool.
"AGGREGATE UNPAID PRINCIPAL BALANCE" means, as of any date of
determination, the then aggregate of the Unpaid Principal Balances of the
Mortgage Pool.
"AGREEMENT" means this Trust Agreement and all amendments and
supplements hereto.
"ALTA" means The American Land Title Association.
"AMORTIZATION TERM" means, with respect to any Mortgage Loan
(or successor REO Loan), the term over which the original principal balance of
such Mortgage Loan would be fully amortized assuming the timely payment each
month of an amount equal to the related Scheduled Payment in effect as of the
first Due Date for such Mortgage Loan following the Cutoff Date.
"APPRAISAL" means, with respect to any Mortgaged Property or
REO Property, either: (i) a narrative appraisal complying with USPAP conducted
by a Qualified Appraiser, if the related Mortgage Loan or REO Loan, as the case
may be, has a Stated Principal Balance as of the date of such appraisal of
greater than $1,000,000; or (ii) a limited appraisal and a summary report of the
"market value" of the Mortgaged Property, as defined in 12 CFR ss.225.62(g),
conducted by a Qualified Appraiser, if the related Mortgage Loan or REO Loan, as
the case may be, has a Stated Principal Balance as of the date of such appraisal
of $1,000,000 or less. In the case of a Mortgaged Property that secures a Group
of Cross-Collateralized Mortgage Loans, the "related Mortgage Loan " shall be,
for purposes of this definition, the Mortgage Loan as to which such Mortgaged
Property has been designated as the Primary Mortgaged Property.
"APPRAISAL REDUCTION AMOUNT" means, with respect to any
Required Appraisal Loan, an amount, as calculated on the Determination Date
immediately following the date on which the most recent relevant Appraisal was
obtained by the Special Servicer pursuant to the Special Servicing Agreement,
equal to the excess, if any, of (a) 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 Servicer, the Trustee or the Fiscal Agent, all accrued and
unpaid 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 related
Mortgage Rate (net of any applicable Retained Yield Rate), (iii) all related
unreimbursed Advances made by or on behalf of the Servicer, the Trustee or the
Fiscal Agent in respect of such Required Appraisal Loan, together with all
unpaid Advance Interest accrued on such Advances, and (iv) 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 Servicer or the Special
Servicer with respect to any such item, over (b) 90% of an amount equal to the
Appraised Value of the related Mortgaged Property or REO Property, as
applicable, as determined by such Appraisal (net of any liens on such property
that are prior to the lien of the Required Appraisal Loan and that do not relate
to an item considered in clause (a)(iv) of this definition). In the case of a
Cross-Collateralized Mortgage Loan, the "related
6
<PAGE>
Mortgaged Property" shall be, for purposes of this definition, the related
Primary Mortgaged Property.
"APPRAISED VALUE" means, with respect to each Mortgaged
Property or REO Property, the appraised value thereof (as is) based upon the
most recent Appraisal obtained pursuant to this Agreement.
"ASSIGNED ASSET VALUE" means (1) with respect to any Mortgage
Loan (other than a Required Appraisal Loan), as of any date of determination,
the Stated Principal Balance of such Mortgage Loan as of such date of
determination; and (2) with respect to any Required Appraisal Loan, an amount
equal to (a) the Stated Principal Balance of such Required Appraisal Loan as of
such date of determination, reduced (to not less than zero) by (b) any Appraisal
Reduction Amount applicable to such Required Appraisal Loan as of such date of
determination.
"ASSIGNMENT OF LEASES" means, with respect to any Mortgage
Loan, any assignment of leases, rents and profits or equivalent instrument,
whether contained in a related Mortgage or executed separately, assigning to the
holder or holders of such Mortgage all of the related Mortgagor's interest in
the leases, rents and profits derived from the ownership, operation, leasing or
disposition of all or a portion of a related Mortgaged Property as security for
repayment of such Mortgage Loan.
"ASSUMED FINAL DISTRIBUTION DATE" means, with respect to any
Class of REMIC III Regular Certificates, the Distribution Date on which the
Aggregate Certificate Principal Amount or Aggregate Certificate Notional Amount,
as the case may be, of such Class of Certificates would be reduced to zero based
on the assumption that no Mortgage Loan is voluntarily prepaid prior to its
Maturity Date and otherwise based on the "Mortgage Loan Assumptions" set forth
in the 1996-C2 Prospectus Supplement under the caption "YIELD, PREPAYMENT AND
MATURITY CONSIDERATIONS--Weighted Average Life", which Distribution Date shall
in each case be as follows:
Class Designation Assumed Final Distribution Date
----------------- -------------------------------
Class A June 25, 2006
Class IO April 25, 2019
Class B August 25, 2006
Class C August 25, 2006
Class D September 25, 2006
Class E September 25, 2006
Class F January 25, 2011
Class G January 25, 2013
Class H March 25, 2015
Class J April 25, 2019
7
<PAGE>
"ASSUMED SCHEDULED PAYMENT" means with respect to any Balloon
Mortgage Loan for its Maturity Date (provided that such Mortgage Loan has not
been paid in full or otherwise liquidated on or before the first Determination
Date that follows such date) and for any Due Date thereafter that such Mortgage
Loan remains outstanding and part of the Trust Fund, and with respect to any REO
Loan for any Due Date coinciding with or following the related Acquisition Date
as of which the related REO Property is part of the Trust Fund, an amount deemed
to be due for such Mortgage Loan or REO Loan, as the case may be, on such Due
Date for purposes of certain calculations hereunder equal to the fixed payment
that, if paid on such Due Date and on each subsequent Due Date through the end
of the related Amortization Term, would be sufficient to fully amortize the
Scheduled Principal Balance of such Mortgage Loan or REO Loan, as the case may
be, outstanding immediately prior to such Due Date over the remaining related
Amortization Term and pay one month's interest at the related Mortgage Rate.
"AUTHENTICATING AGENT" means any authenticating agent
appointed by the Trustee pursuant to Section 7.10.
"AUTHORIZED OFFICER" means any Person that may execute an
Officer's Certificate on behalf of the Depositor.
"AVAILABLE ADVANCE REIMBURSEMENT AMOUNT" has, with respect to
any Mortgage Loan or REO Property, the meaning set forth in Section 4.06(a)
hereof.
"AVAILABLE DISTRIBUTION AMOUNT" means, with respect to any
Distribution Date, the sum of the following amounts (without duplication):
(a) the aggregate of all cash amounts received on or
in respect of the Mortgage Loans and any REO Properties that are on deposit in
the Collection and Custodial Accounts as of the commencement of business on the
immediately preceding Servicer Remittance Date, exclusive of any portion thereof
that represents one or more of the following:
(i) Scheduled Payments collected but due on
a Due Date subsequent to the related Due Period;
(ii) all payments of principal (including,
without limitation, Principal Prepayments) and interest, Insurance
Proceeds, Condemnation Proceeds and other Liquidation Proceeds received
after the end of the related Collection Period;
(iii) Prepayment Premiums;
(iv) Retained Yield; and
(v) amounts in the Collection Account or
Custodial Account which are payable or reimbursable to the Depositor,
the Servicer, the Special Servicer, the Fiscal Agent, the Trustee or
any other Person pursuant to any of clauses (i) through (vi) of Section
5.05(b) hereof, in the case of the Collection Account, or pursuant to
any of clauses (i) through (x) of Section 2.02(a) of the Servicing
Agreement, in the case of the Custodial Account; and
8
<PAGE>
(b) all P&I Advances and any other payments with
respect to the Mortgage Loans made by the Servicer, the Trustee or the Fiscal
Agent with respect to such Distribution Date.
For purposes of determining the Available Distribution Amount
for any Distribution Date, funds from the Collection Account and the Custodial
Account that are invested in Eligible Investments shall be deemed to remain on
deposit in such Account.
"BALLOON MORTGAGE LOAN" means a Mortgage Loan which will not
fully amortize based on the fixed monthly Scheduled Payment by its original
Maturity Date.
"BALLOON PAYMENT" means, with respect to any Balloon Mortgage
Loan, the Scheduled Payment payable on the Maturity Date of such Mortgage Loan.
"BANKRUPTCY CODE" means the federal Bankruptcy Code, as
amended from time to time (Title 11 of the United States Code).
"BANKRUPTCY LOSS" means a loss to the Trust arising from a
proceeding under the Bankruptcy Code or any other similar state law or other
proceeding with respect to the Mortgagor of, or Mortgaged Property under, a
Mortgage Loan, including, without limitation, any Deficient Valuation Amount or
losses, if any, resulting from any Debt Service Reduction Amount for the Due
Period in which the related Due Date occurs.
"BASIS LIMIT PRICE" means, as to each Mortgage Loan, REMIC I's
adjusted federal income tax basis in such Mortgage Loan on the date such
Mortgage Loan is to be sold by REMIC I.
"BOOK-ENTRY CERTIFICATES" means Certificates, ownership and
transfer of which shall be made through book entries by a Clearing Agency as
described in Section 3.06; provided that after the occurrence of a condition
whereupon book-entry registration and transfer are no longer authorized and
Physical Certificates are to be issued to the Certificate Owners, such
Certificates shall no longer be "Book-Entry Certificates."
"BUSINESS DAY" means any day other than (i) a Saturday or a
Sunday, (ii) a legal holiday in New York, New York or Chicago, Illinois or (iii)
a day on which banking institutions or savings associations in New York, New
York or Chicago, Illinois are authorized or obligated by law or executive order
to be closed.
"CASH LIQUIDATION" means, as to any Defaulted Mortgage Loan
other than a Mortgage Loan which became an REO Loan, the receipt of all
Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds and other
payments or recoveries in connection with a Final Recovery Determination made by
the Servicer. The Servicer shall maintain records, prepared by a Servicing
Officer (and, in the case of Specially Serviced Mortgage Loans, based on the
written reports with respect to such Cash Liquidation delivered by the Special
Servicer to the Servicer), of each Cash Liquidation.
"CERTIFICATEHOLDER" means the Holder of a Certificate.
9
<PAGE>
"CERTIFICATE INTEREST RATE" means: (a) with respect to the
Class A Certificates for any Distribution Date, the Weighted Average REMIC II
Remittance Rate for such Distribution Date, minus 137 basis points; (b) with
respect to the Class B Certificates for any Distribution Date, the Weighted
Average REMIC II Remittance Rate for such Distribution Date, minus 118 basis
points; (c) with respect to the Class C Certificates for any Distribution Date,
the Weighted Average REMIC II Remittance Rate for such Distribution Date, minus
106 basis points; (d) with respect to the Class D, Class E, Class F, Class G,
Class H and Class J Certificates for any Distribution Date, the Weighted Average
REMIC II Remittance Rate for such Distribution Date, minus 90 basis points; and
(e) with respect to the Class IO Certificates for any Distribution Date, the
weighted average, expressed as a percentage and rounded to five decimal places,
of the REMIC II Strip Rates for the respective REMIC II Regular Interests,
weighted on the basis of the respective Uncertificated Principal Amounts of such
REMIC II Regular Interests outstanding immediately prior to such Distribution
Date. No Residual Certificate will have a Certificate Interest Rate.
"CERTIFICATE NOTIONAL AMOUNT" means, with respect to any Class
IO Certificate, the specified dollar amount of principal upon which such
Certificate accrues interest, such amount being equal to the product of (a) the
Percentage Interest in the relevant Class evidenced by such Certificate,
multiplied by (b) the aggregate of the Uncertificated Principal Amounts of REMIC
II Regular Interest A, REMIC II Regular Interest B, REMIC II Regular Interest C,
REMIC II Regular Interest D, REMIC II Regular Interest E, REMIC II Regular
Interest F, REMIC II Regular Interest G, REMIC II Regular Interest H and REMIC
II Regular Interest J outstanding at any date of determination.
"CERTIFICATE OWNER" means, with respect to a Book-Entry
Certificate, the Person who is the beneficial owner of such Book-Entry
Certificate, as may be reflected on the books of the Clearing Agency, or on the
books of a Person maintaining an account with such Clearing Agency (directly or
as indirect participant, in accordance with the rules of such Clearing Agency).
"CERTIFICATE PRINCIPAL AMOUNT" means, with respect to any
Sequential Pay Certificate, as of any date of determination, the maximum
specified dollar amount of principal to which the Holder thereof is then
entitled hereunder, such amount being equal to the initial principal amount
thereof set forth on the face of such Certificate, less the amount of all
distributions of principal previously made with respect to such Certificate
pursuant to Sections 6.01 and 6.02(a), and less all Realized Losses and
Additional Expense Losses previously allocated to such Certificate pursuant to
Section 6.03. No Class IO Certificate or Residual Certificate will have a
Certificate Principal Amount.
"CERTIFICATE REGISTER" and "CERTIFICATE REGISTRAR" mean the
register maintained and the registrar appointed pursuant to Section 3.02.
"CERTIFICATEHOLDER" has the same meaning as "Holder".
"CERTIFICATES" means, collectively, the LB Commercial Conduit
Mortgage Trust II, Multiclass Pass-Through Certificates, Series 1996-C2, being
issued pursuant to this Agreement.
10
<PAGE>
"CLASS" means, collectively, all the Certificates bearing the
same alphabetical and, if applicable, numerical class designation.
"CLASS A CERTIFICATES" means, collectively, the Certificates
designated as "Class A" on the face thereof, in substantially the form attached
hereto as EXHIBIT A-1.
"CLASS A CERTIFICATEHOLDER" means the Holder of a Class A
Certificate.
"CLASS B CERTIFICATES" means, collectively, the Certificates
designated as "Class B" on the face thereof, in substantially the form attached
hereto as EXHIBIT A-2.
"CLASS B CERTIFICATEHOLDER" means the Holder of a Class B
Certificate.
"CLASS C CERTIFICATES" means, collectively, the Certificates
designated as "Class C" on the face thereof, in substantially the form attached
thereto as EXHIBIT A-3.
"CLASS C CERTIFICATEHOLDER" means the Holder of a Class C
Certificate.
"CLASS D CERTIFICATES" means, collectively, the Certificates
designated as "Class D" on the face thereof, in substantially the form attached
hereto as EXHIBIT A-4.
"CLASS D CERTIFICATEHOLDER" means the Holder of a Class D
Certificate.
"CLASS E CERTIFICATES" means, collectively, the Certificates
designated as "Class E" on the face thereof, in substantially the form attached
hereto as EXHIBIT A-5.
"CLASS E CERTIFICATEHOLDER" means the Holder of a Class E
Certificate.
"CLASS F CERTIFICATES" means, collectively, the Certificates
designated as "Class F" on the face thereof, in substantially the form attached
hereto as EXHIBIT A-7.
"CLASS F CERTIFICATEHOLDER" means the Holder of a Class F
Certificate.
"CLASS G CERTIFICATES" means, collectively, the Certificates
designated as "Class G" on the face thereof, in substantially the form attached
hereto as EXHIBIT A-8.
"CLASS G CERTIFICATEHOLDER" means the Holder of a Class G
Certificate.
"CLASS H CERTIFICATES" means, collectively, the Certificates
designated as "Class H" on the face thereof, substantially in the form attached
hereto as EXHIBIT A-9.
"CLASS H CERTIFICATEHOLDER" means the Holder of a Class H
Certificate.
"CLASS IO CERTIFICATES" means, collectively, the Certificates
designated "Class IO" on the face thereof, substantially in the form attached
hereto as EXHIBIT A-6.
"CLASS IO CERTIFICATEHOLDER" means the Holder of a Class IO
Certificate.
11
<PAGE>
"CLASS J CERTIFICATES" means, collectively, the Certificates
designated as "Class J" on the face thereof, in substantially the form attached
hereto as EXHIBIT A-10.
"CLASS J CERTIFICATEHOLDER" means the Holder of a Class J
Certificate.
"CLASS R-I CERTIFICATES" means, collectively, the Certificates
designated as "Class R-I" on the face thereof, in substantially the form
attached hereto as EXHIBIT A-11.
"CLASS R-I CERTIFICATEHOLDER" means the Holder of a Class R-I
Certificate.
"CLASS R-II CERTIFICATES" means, collectively, the
Certificates designated as "Class R-II" on the face thereof, in substantially
the form attached hereto as EXHIBIT A-12.
"CLASS R-II CERTIFICATEHOLDER" means the Holder of a Class
R-II Certificate.
"CLASS R-III CERTIFICATES" means, collectively, the
Certificates designated as "Class R-III" on the face thereof, in substantially
the form attached as EXHIBIT A-13 hereto.
"CLASS R-III CERTIFICATEHOLDER" means any Holder of a Class
R-III Certificate.
"CLEAN-UP NOTICE" has the meaning set forth in the Servicing
Agreement.
"CLEARING AGENCY" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of securities deposited
with the Clearing Agency.
"CLOSING DATE" means October 30, 1996.
"CODE" means the Internal Revenue Code of 1986.
"COLLECTION ACCOUNT" means the segregated account or accounts
maintained by the Trustee, or the Paying Agent, on its behalf, in accordance
with the provisions of Section 5.05.
"COLLECTION PERIOD" means, with respect to any Distribution
Date, the period commencing on the day immediately following the Determination
Date in the month prior to the month in which such Distribution Date occurs (or,
in the case of the first Collection Period, commencing on the day following the
Cut-Off Date) and ending on the Determination Date in the month in which such
Distribution Date occurs.
"COMPARATIVE FINANCIAL STATUS REPORT" means a report
substantially in the form of EXHIBIT B to the Servicing Agreement.
"COMMISSION" means the Securities and Exchange Commission.
12
<PAGE>
"CONDEMNATION PROCEEDS" means any awards resulting from the
full or partial condemnation or any eminent domain proceeding or any conveyance
in lieu or in anticipation thereof with respect to a Mortgaged Property (or REO
Property) by or to any governmental or quasi-governmental authority, other than
amounts to be applied to the restoration, preservation or repair of such
Mortgaged Property (or REO Property) or released to the related Mortgagor in
accordance with the terms of the related Mortgage Loan(s), applicable law and/or
the Transaction Documents (including Accepted Serving Practices).
"CONTROLLING CLASS" means, on any date of determination, the
Class of Sequential Pay Certificates with the latest alphabetical Class
designation that has a then Aggregate Certificate Principal Amount (net of any
Uncovered Portion thereof) at least equal to the lesser of (i) 25% of the
initial Aggregate Certificate Principal Amount of such Class of Sequential Pay
Certificates as of the Closing Date and (ii) 2% of the Aggregate Certificate
Principal Amount (net of any Uncovered Portion thereof) of all the Sequential
Pay Certificates as of such date of determination.
"CORPORATE TRUST OFFICE" means, with respect to the
presentment and surrender of Certificates for the final distribution thereon or
the presentment and surrender of Certificates for any other purpose, the New
York Presenting Office or the principal corporate trust office of the Trustee,
and for all other purposes only the principal corporate trust office of the
Trustee. The principal corporate trust office of the Trustee is presently
located at 135 South LaSalle Street, Suite 1740, Chicago, IL 60674-4107,
ATTENTION: Asset-Backed Securities Trust Services Group-LB Mortgage Trust,
Series 1996-C2, or at such other addresses as the Trustee may designate from
time to time by notice to the Certificateholders, the Depositor, the Fiscal
Agent, the Servicer and the Special Servicer.
"CROSS-COLLATERALIZED MORTGAGE LOANS" means any two or more
Mortgage Loans which are cross-defaulted and cross-collateralized.
"CUSTODIAL ACCOUNT" means, collectively, the separate account
or accounts established and maintained by the Servicer pursuant to the Servicing
Agreement as required by Section 5.04(a).
"CUSTODIAN" means the Trustee or any Person who is appointed
by the Trustee at any time as custodian pursuant to Section 7.09 and who is
unaffiliated with the Depositor and the Seller.
"CUT-OFF DATE" means October 1, 1996.
"CUT-OFF DATE PRINCIPAL BALANCE" means, with respect to any
Mortgage Loan, the unpaid principal balance of such Mortgage Loan as of the
Cut-Off Date, reduced by all payments of principal due on or before such date
and not paid.
"D&P" means Duff & Phelps Credit Rating Co., or its successor
in interest. If neither such rating agency nor any successor remains in
existence, "D&P" 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
13
<PAGE>
Servicer, the Special Servicer and the Fiscal Agent, and specific ratings of
Duff & Phelps Credit Rating Co. herein referenced shall be deemed to refer to
the equivalent ratings of the party so designated.
"DEBT SERVICE REDUCTION AMOUNT" means, with respect to a Due
Date, the amount of the reduction of the Scheduled Payment which a Mortgagor is
obligated to pay on such Due Date with respect to a Mortgage Loan as a result of
any proceeding under bankruptcy law or any similar proceeding (other than a
Deficient Valuation); provided that in the case of an amount that is deferred,
but not forgiven, such reduction shall include only the net present value
(calculated at the related Mortgage Rate) of the reduction.
"DEFAULTED MORTGAGE LOAN" means a Mortgage Loan as to which a
payment default has occurred and is continuing or which is otherwise in material
default under the terms of the applicable Mortgage Loan documentation (without
giving effect to any grace period or any modification, waiver or amendment of
such Mortgage Loan granted or agreed to by the Special Servicer).
"DEFAULT INTEREST" means, with respect to any Defaulted
Mortgage Loan (or successor REO Loan), for any Mortgage Loan Due Period, all
interest accrued in respect of such Mortgage Loan (or REO Loan) during such
Mortgage Loan Due Period (exclusive of late payment charges) that is in excess
of interest at the related Mortgage Rate accrued on the Unpaid Principal Balance
of such Mortgage Loan (or REO Loan) outstanding from time to time during such
Mortgage Loan Due Period.
"DEFECT" has the meaning set forth in Section 2.02(c).
"DEFICIENT VALUATION" means, with respect to any Mortgage
Loan, a valuation by a court of competent jurisdiction of the related Mortgaged
Property (or, in the case of a CrossCollateralized Mortgage Loan, the related
Primary Mortgaged Property) in an amount less than the then outstanding
indebtedness under such Mortgage Loan, which valuation results from a proceeding
initiated under the Bankruptcy Code, and that reduces the amount the Mortgagor
is required to pay under such Mortgage Loan.
"DEFICIENT VALUATION AMOUNT" means the amount by which the
total amount due with respect to a Mortgage Loan, including the Unpaid Principal
Balance of a Mortgage Loan, plus any accrued and unpaid interest thereon and any
other amounts recoverable from the Mortgagor with respect thereto pursuant to
the terms thereof, is reduced in connection with a Deficient Valuation.
"DELETED MORTGAGE LOAN" means a Mortgage Loan (or any property
acquired in respect thereof) which is repurchased from the Trust by the
Depositor pursuant to Article II.
"DELINQUENT LOAN STATUS REPORT" means a report substantially
in the form of EXHIBIT D to the Servicing Agreement.
"DEPOSITOR" means Structured Asset Securities Corporation and
its successors-in- interest.
14
<PAGE>
"DEPOSITORY" has the meaning set forth in Section 3.06.
"DEPOSITORY AGREEMENT" means, with respect to any Class of
Book-Entry Certificates, the letter of representations among the Depositor, the
Trustee and the Clearing Agency.
"DETERMINATION DATE" means, with respect to any Distribution
Date, the 12th day of the month in which such Distribution Date occurs or, if
such day is not a Business Day, the next preceding Business Day.
"DISQUALIFIED ORGANIZATION" means 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 FHLMC, 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 Trustee based upon an Opinion of
Counsel, obtained at the expense of the Trust Fund, 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" means, 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 the portion of any Net
Aggregate Prepayment Interest Shortfall for such Distribution Date allocable to
such Class of Certificates pursuant to Section 6.06(a).
"DISTRIBUTION DATE" means the 25th day of each month or, if
such day is not a Business Day, the next succeeding Business Day, commencing in
November 1996.
"DISTRIBUTION DATE STATEMENT" has the meaning set forth in
Section 5.11(a).
"DUE DATE" means, with respect to any Mortgage Loan,
including, without limitation, a Balloon Mortgage Loan delinquent in respect of
its Balloon Payment, and with respect to any successor REO Loan, the day each
month set forth in the related Mortgage Note on which a Scheduled Payment is
scheduled to be first due.
"DUE PERIOD" means, with respect to any Distribution Date, the
period commencing on the day immediately following the Determination Date in the
month prior to the month in which such Distribution Date occurs (or, in the case
of the first Due Period,
15
<PAGE>
commencing on the day following the Cut-off Date) and ending on the
Determination Date in the month in which such Distribution Date occurs.
"ELIGIBLE ACCOUNT" means either: (i) an account or accounts
maintained with a federal or state chartered depository institution or trust or
holding company, the short-term unsecured debt of which has a short-term rating
of not less than "P-1" from Moody's, "D-1+" from D&P and "F-1+" from Fitch and,
if amounts are to be held therein for more than 30 days, the long-term unsecured
debt of which has a rating not less than "Aa3" from Moody's, "A" from D&P and
"AA-" from Fitch; or (ii) a segregated trust account or accounts maintained with
the corporate trust department of a federal or state chartered depository
institution or trust company that, in either case, has corporate trust powers,
acting in its fiduciary capacity (provided that any state chartered depository
institution or trust company is subject to regulation regarding fiduciary funds
substantially similar to 12 CFR 9.10(b)). Eligible Accounts may bear interest.
"ELIGIBLE INVESTMENTS" means any one or more of the following
obligations or securities:
(i) direct obligations of, and obligations fully guaranteed as
to timely payment of principal and interest by, the United States of
America, FNMA, FHLMC or any agency or instrumentality of the United
States of America the obligations of which are backed by the full faith
and credit of the United States of America; provided that any
obligation of, or guarantee by, FNMA or FHLMC, other than an unsecured
senior debt obligation of FNMA or FHLMC or a mortgage participation or
pass-through certificate guaranteed by FNMA or FHLMC, shall be an
Eligible Investment only if such investment shall be acceptable to the
Rating Agencies as evidenced in writing;
(ii) demand and time deposits in, certificates of deposit of,
or bankers' acceptances issued by, any depository institution or trust
company (including the Trustee, the Fiscal Agent, the Servicer or any
Affiliate of the Servicer, the Special Servicer or the Trustee, acting
in its commercial capacity) incorporated or organized under the laws of
the United States of America or any State thereof and subject to
supervision and examination by federal or state banking authorities, so
long as the commercial paper or other short-term debt obligations of
such depository institution or trust company are rated not less than
"P-1" by Moody's, "D-1+" by D&P and "F-1+" by Fitch or are otherwise
acceptable to the Rating Agencies;
(iii) repurchase agreements or obligations with respect to any
security described in clause (i) above where such security has a
remaining maturity of one year or less and where such repurchase
obligation has been entered into with a depository institution or trust
company (acting as principal) described in clause (ii) above and where
such repurchase obligation will mature prior to the Business Day
preceding the next date upon which, as described in this Agreement, the
Servicing Agreement or the Special Servicing Agreement, as applicable,
such amounts are required to be withdrawn from the applicable Account
and which meets the minimum rating requirement for such entity
described above;
16
<PAGE>
(iv) securities bearing interest or sold at a discount issued
by any corporation incorporated under the laws of the United States of
America or any state thereof, which securities have ratings from each
Rating Agency, at least equal to the highest long-term credit ratings
assigned by such Rating Agency, unless otherwise specified in writing
by the Rating Agencies; provided that securities issued by any
particular corporation will not be Eligible Investments to the extent
that investment therein will cause the then outstanding principal
amount of securities issued by such corporation and held in the
Accounts to exceed 10% of the sum of the Aggregate Unpaid Principal
Balance of the Mortgage Pool and the aggregate principal amount of all
Eligible Investments in the Accounts;
(v) commercial paper (including both noninterest-bearing
discount obligations and interest-bearing obligations payable on demand
or on a specified date not more than one year after the date of
issuance thereof) rated not less than "P-1" by Moody's, "D-1+" by D&P
and "F-1+" by Fitch, or otherwise acceptable to the Rating Agencies;
(vi) units of investment funds (including money market funds)
rated in the highest category by Moody's and, if rated thereby, by D&P
and Fitch (or, if not rated by D&P and/or Fitch, then otherwise
acceptable thereto);
(vii) a Qualified GIC;
(viii) certificates or receipts representing ownership
interests in future interest or principal payments on obligations
described in clause (i) above; and
(ix) any other demand, money market or time deposit,
obligation, security or investment, as would be acceptable to the
Rating Agencies as evidenced in writing;
provided that no such instrument shall be an Eligible Investment (A) if such
instrument evidences principal and interest payments derived from obligations
underlying such instrument and the interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations, or (B) if it may be redeemed at
a price below the purchase price (the foregoing clause (B) not to apply to
investments in units of money market funds pursuant to clause (vii) above); and
provided, further, that no amount beneficially owned by any REMIC created
hereunder (including, without limitation, any amounts collected by the Servicer
or the Special Servicer but not yet deposited in any Account) may be invested in
investments (other than money market funds) treated as equity interests for
Federal income tax purposes, unless the Servicer shall have received an Opinion
of Counsel, at the expense of Servicer, to the effect that such investment will
not adversely affect the status of such REMIC as a REMIC under the Code or
result in imposition of a tax on such REMIC. Eligible Investments that are
subject to prepayment or call may not be purchased at a price in excess of par.
"ENVIRONMENTAL LAWS" has the meaning set forth in the
Servicing Agreement.
17
<PAGE>
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"EXCESS PREPAYMENT INTEREST" means for any Distribution Date,
if during the related Collection Period a full or partial Principal Prepayment
or a Balloon Payment is made in respect of any Mortgage Loan after the Due Date
for such Mortgage Loan, the amount of interest (exclusive of any portion thereof
constituting Retained Yield) that accrues on such Principal Prepayment or on the
principal portion of such Balloon Payment, as the case may be, from such Due
Date to the date such payment was made, to the extent collected.
"EVENT OF DEFAULT" means any Servicer Event of Default,
Special Servicer Event of Default or Fiscal Agent Event of Default.
"FDIC" means the Federal Deposit Insurance Corporation or any
successor thereto.
"FHLMC" means the Federal Home Loan Mortgage Corporation or
any successor thereto.
"FINAL DISTRIBUTION DATE" has the meaning set forth in Section
8.01(a).
"FINAL RECOVERY DETERMINATION" has the meaning set forth in
the Servicing Agreement.
"FISCAL AGENT" means ABN AMRO Bank N.V., and its permitted
successors and assigns.
"FISCAL AGENT EVENT OF DEFAULT" has the meaning set forth in
Section 4.08.
"FITCH" means Fitch Investors Service, L.P. or its successor
in interest. If neither such rating agency nor any successor remains in
existence, "Fitch" shall be deemed to refer to such other nationally recognized
statistical rating agency or other comparable Person designated by the
Depositor, notice of which designation shall be given to the Trustee, the
Servicer, the Special Servicer and the Fiscal Agent, and specific ratings of
Fitch Investors Service, L.P. herein referenced shall be deemed to refer to the
equivalent ratings of the party so designated.
"FNMA" means Federal National Mortgage Association or any
successor thereto.
"FIXED INTEREST PAYMENT ADJUSTMENT" has the meaning set forth
in the definition of "PV Yield Loss Amount."
"GNMA" means the Government National Mortgage Association or
any successor thereto.
"GROUP" means any group of related Cross-Collateralized
Mortgage Loans secured by Mortgages on the same Mortgaged Properties.
18
<PAGE>
"HISTORICAL LIQUIDATION LOSS REPORT" means a report
substantially in the form of EXHIBIT E to the Servicing Agreement.
"HISTORICAL LOAN MODIFICATION REPORT" means a report
substantially in the form of EXHIBIT F to the Servicing Agreement.
"HOLDER" means the Person in whose name a Certificate is
registered on the Certificate Register.
"INDEPENDENT" means, when used with respect to any
Accountants, a Person who is "independent" within the meaning of Rule 2-01(b) of
the Securities and Exchange Commission's Regulation S-X. Independent means, when
used with respect to any other Person, a Person who (a) is in fact independent
of another specified Person and any Affiliate of such other Person, (b) does not
have any material direct financial interest in such other Person or any
Affiliate of such other Person and (c) is not connected with such other Person
or any Affiliate of such other Person as an officer, employee, promoter,
underwriter, trustee, partner, director or Person performing similar functions.
"INDEPENDENT CONTRACTOR" has the meaning set forth in the
Special Servicing Agreement.
"INSURANCE POLICIES" means, collectively, any Standard Hazard
Insurance Policy, flood insurance policy, title insurance policy, earthquake
insurance policy or other insurance policy relating to the Mortgage Loans or the
Mortgaged Properties (or any REO Properties), required to be in effect as of the
Closing Date or thereafter during the term of this Agreement.
"INSURANCE PROCEEDS" means amounts paid by the insurer under
any Insurance Policy with respect to a Mortgaged Property (or REO Property),
other than amounts to be applied to the restoration, preservation or repair of
such Mortgaged Property (or REO Property) or released to the related Mortgagor
in accordance with the terms of the related Mortgage Loan(s), applicable law
and/or the Transaction Documents (including Accepted Serving Practices).
"INTEREST PAYMENT ADJUSTMENT PERIOD" has the meaning set forth
in the definition of "PV Yield Loss Amount".
"INTERESTED PERSON" means, as of any date of determination,
the Servicer, the Special Servicer, any Independent Contractor engaged by the
Servicer or the Special Servicer pursuant to the Servicing Agreement or the
Special Servicing Agreement, as applicable, or any Person known to a Responsible
Officer of the Trustee to be an Affiliate of any of them.
"LATE COLLECTIONS" means: (a) with respect to any Mortgage
Loan, all amounts received thereon during any Due Period, whether as payments,
Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds or otherwise,
which represent late collections of the principal and/or interest portions of a
Scheduled Payment (other than a Balloon Payment) or an Assumed Scheduled Payment
in respect of such Mortgage Loan due or deemed due for a Due Date in a previous
Due Period, or for a Due Date coinciding with or preceding the Cut-off
19
<PAGE>
Date, and not previously recovered; and (b) with respect to any REO Loan, all
amounts received in connection with the related REO Property during any Due
Period, whether as Insurance Proceeds, Condemnation Proceeds, Liquidation
Proceeds, Net REO Income or otherwise, which represent late collections of the
principal and/or interest portions of a Scheduled Payment (other than a Balloon
Payment) or an Assumed Scheduled Payment in respect of the predecessor Mortgage
Loan or of an Assumed Scheduled Payment in respect of such REO Loan due or
deemed due for a Due Date in a previous Due Period and not previously recovered.
"LEHMAN BROTHERS" means Lehman Brothers Inc. and its
successors in interest.
"LIQUIDATION EXPENSES" means expenses incurred by the Servicer
or Special Servicer in connection with the enforcement and liquidation of any
Specially Serviced Mortgage Loan or REO Property acquired in respect thereof,
including, without limitation, legal fees and expenses, committee or referee
fees, property manager fees, and, if applicable, brokerage commissions and
conveyance taxes. All Liquidation Expenses shall be Servicing Advances.
"LIQUIDATION PROCEEDS" means amounts received by the Servicer
or the Special Servicer in connection with a Cash Liquidation or an REO
Disposition, whether through judicial foreclosure, sale or otherwise (other than
amounts required to be paid to the Mortgagor pursuant to the terms of the
applicable Mortgage or otherwise pursuant to law), including, without
limitation, payments in connection with a Mortgage Loan received from the
related Mortgagor or otherwise, Insurance Proceeds, Condemnation Proceeds or
otherwise.
"LIQUIDATION REALIZED LOSS" means, with respect to any
Mortgage Loan or REO Property as to which a Cash Liquidation or REO Disposition,
as applicable, has occurred, an amount equal to the sum of (A) the Unpaid
Principal Balance of the Mortgage Loan or, in the case of REO Property, of the
related REO Loan as of the date of the Cash Liquidation or REO Disposition, plus
(B) all unpaid interest accrued in respect of such Mortgage Loan or REO Loan, as
the case may be, at the applicable Mortgage Rate in effect from time to time
(net of any related Retained Yield Rate), from the date to which interest was
last paid or otherwise collected until the related Due Date in the Collection
Period in which the Cash Liquidation or REO Disposition occurred, on the Unpaid
Principal Balance of such Mortgage Loan or REO Loan, as the case may be,
referred to in clause (A) above, minus (C) without duplication of amounts taken
into account in determining the Unpaid Principal Balance or the accrued and
unpaid interest described in clauses (A) and (B), respectively, above, all Net
Liquidation Proceeds and, after netting out any related Retained Yield,
Liquidation Expenses and/or Servicing Advances payable therefrom, all other
amounts received during the Collection Period in which such Cash Liquidation or
REO Disposition occurred and allocable to pay principal and/or interest
(adjusted to the applicable Mortgage Rate less any applicable Retained Yield
Rate) in respect of such Mortgage Loan or REO Loan, as the case may be.
Liquidation Realized Losses on a Mortgage Loan or REO Property are allocated
first to principal of such Mortgage Loan or, in the case of an REO Property, of
the related REO Loan, and then to interest.
"LOAN-TO-VALUE RATIO" means: (a) with respect to any Mortgage
Loan or any Group of related Cross-Collateralized Mortgage Loans, as of any date
of determination, a fraction, expressed as a percentage, the numerator of which
is the then Unpaid Principal Balance of such Mortgage Loan or the then aggregate
Unpaid Principal Balance of such Group, as the
20
<PAGE>
case may be, and the denominator of which is the Appraised Value of the related
Mortgaged Property or Properties; and (b) with respect to any REO Loan, as of
any date of determination, a fraction, expressed as a percentage, the numerator
of which is the then Unpaid Principal Balance of such REO Loan, and the
denominator of which is the Appraised Value of the related REO Property.
"MATURITY DATE" means, with respect to any Mortgage Loan as of
any date of determination, the date on which the last payment of principal is
due and payable under the related Mortgage Note, after taking into account all
Principal Prepayments received and any Deficient Valuation, Debt Service
Reduction Amount or modification of the Mortgage Loan occurring prior to such
date of determination, but without giving effect to (i) any acceleration of the
principal of such Mortgage Loan or (ii) any grace period permitted by the
related Mortgage Note.
"MODIFICATION LOSS" means (i) a decrease in the Unpaid
Principal Balance of a Mortgage Loan as a result of a modification thereof in
accordance with the terms hereof or of the Special Servicing Agreement and (ii)
any expenses connected with such modification, to the extent (x) reimbursable to
the Trustee, the Fiscal Agent, the Special Servicer or the Servicer and (y) not
recovered from the related Mortgagor.
"MODIFIED MORTGAGE LOAN" means any Mortgage Loan as to which
any Servicing Transfer Event has occurred and which has been modified by the
Special Servicer pursuant to the Special Servicing Agreement 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 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 (or, in the case of a
Cross-Collateralized Mortgage Loan, the related Primary Mortgaged
Property) without a corresponding Principal Prepayment in an amount not
less than the fair market value (as is), as determined by an Appraisal
delivered to the Special Servicer (at the expense of the related
Mortgagor and upon which the Special Servicer may conclusively rely) of
the property to be released; or
(C) in the good faith judgment of the Special Servicer, does not
otherwise materially impair the security for such Mortgage Loan or
reduce the likelihood of timely payment of amounts due thereon.
"MONEY TERM" means, with respect to any Mortgage Loan, the
Maturity Date, Mortgage Rate, principal balance, amortization terms, payment
frequency, prepayment premium, or "equity participation" thereof.
"MOODY'S" means Moody's Investors Services, 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
21
<PAGE>
designated by the Depositor, notice of which designation shall be given to the
Trustee, the Servicer, the Special Servicer and the Fiscal Agent, and specific
ratings of Moody's Investors Services, Inc. herein referenced shall be deemed to
refer to the equivalent ratings of the party so designated.
"MORTGAGE" means, with respect to any Mortgage Loan, the
mortgage, deed of trust or other instrument securing a Mortgage Note and
creating a first mortgage lien on a related Mortgaged Property.
"MORTGAGE FILE" means, collectively, the mortgage documents
listed in Section 2.01(b) pertaining to a particular Mortgage Loan required to
be delivered to the Trustee pursuant to this Agreement, together with any
additional mortgage documents pertaining to such Mortgage Loan to be added
thereto pursuant to this Agreement, the Servicing Agreement or the Special
Servicing Agreement; provided that whenever "Mortgage File" is used to refer to
documents actually received by the Trustee, such term shall be deemed not to
include such documents and instruments required to be included therein unless
they are actually so received.
"MORTGAGE LOAN" means each mortgage loan identified on the
Mortgage Loan Schedule, as amended from time to time, and conveyed, transferred,
sold, assigned to or deposited with the Trustee pursuant to Section 2.01. Two
Groups of the Cross-Collateralized Mortgage Loans are, in the case of each such
Group, evidenced by a single Mortgage Note; and the respective
Cross-Collateralized Mortgage Loans constituting each such Group represent
portions of the related debt allocated to each of the Mortgaged Properties
securing such debt. As used herein, the term "Mortgage Loan" includes the
related Mortgage Note, each related Mortgage and all other security documents
included in the related Mortgage File.
"MORTGAGE LOAN DUE PERIOD" means, with respect to each
Mortgage Loan (and any successor REO Loan), the period beginning on the day
following a Due Date and ending on the next Due Date.
"MORTGAGE LOAN PURCHASE AGREEMENT" has the meaning set forth
in Section 2.01(a) hereof.
"MORTGAGE LOAN SCHEDULE" or "LOAN SCHEDULE" means the schedule
attached hereto as SCHEDULE I, which shall identify each Mortgage Loan by the
information set forth on SCHEDULE II attached hereto as such schedule may be
amended pursuant to Section 2.04.
"MORTGAGE NOTE" means the note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan
(or, in the case of each of certain Groups of Cross-Collateralized Mortgage
Loans, evidencing the indebtedness of multiple Mortgagors under such Group).
"MORTGAGE POOL" means, collectively, all the Mortgage Loans
(and any successor REO Loans).
"MORTGAGE RATE" means, with respect to (i) any Mortgage Loan
on or prior to its Maturity Date, the annualized rate at which interest is
scheduled (in the absence of a default)
22
<PAGE>
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 Maturity
Date, the annualized rate described in clause (i) above determined without
regard to the passage of such Maturity Date, and (iii) any REO Loan, the
annualized rate described in clause (i) or (ii) above, as applicable, determined
as if the predecessor Mortgage Loan had remained outstanding.
"MORTGAGED PROPERTY" means the real property, together with
improvements thereto, securing the indebtedness of the Mortgagor under a
Mortgage Loan (or, in the case of each of certain Groups of Cross-Collateralized
Mortgage Loans, of the Mortgagor(s) under such Group).
"MORTGAGEE" means, with respect to any Mortgage Loan as of any
date of determination, the holder of the related Mortgage Note as of such date.
"MORTGAGOR" means an obligor on a Mortgage Note.
"NET AGGREGATE PREPAYMENT INTEREST SHORTFALL" means for any
Distribution Date, the excess, if any, of all Prepayment Interest Shortfalls for
such Distribution Date, over the sum of (i) all Excess Prepayment Interest for
such Distribution Date and (ii) the Servicing Fee for the related Collection
Period (prior to adjustment pursuant to Section 2.05 of the Servicing
Agreement).
"NET LIQUIDATION PROCEEDS" means Liquidation Proceeds minus
related Liquidation Expenses, and minus any Servicing Advances with respect to
the related Mortgage Loan or REO Property not included in the definition of
Liquidation Expenses that are reimbursable from such Liquidation Proceeds, and
minus any Retained Yield with respect to the related Mortgage Loan that is
payable from such Liquidation Proceeds.
"NET MORTGAGE RATE" means, with respect to each Mortgage Loan
(and any successor REO Loan), as of any date of determination, a rate per annum
equal to the Mortgage Rate, net of the Administrative Cost Rate and any Retained
Yield Rate, in effect for such Mortgage Loan as of such date of determination.
"NET REO INCOME" means, with respect to any REO Property, all
income received in connection with such REO Property less any operating
expenses, utilities, real estate taxes, management fees, insurance premiums,
expenses for maintenance and repairs and any other capital expenses directly
related to such REO Property.
"NET PREPAYMENT PREMIUM" means any Prepayment Premium
collected on a Mortgage Loan (or successor REO Loan) that is exclusive of any
portion thereof constituting Retained Yield.
"NEW YORK PRESENTING OFFICE" means the office of the Trustee,
being at IBJ Schroder Trust Bank, Stock Transfer Department, One State Street
Plaza, New York, New York 10015, or such other office as the Trustee, the
Certificate Registrar or the Paying Agent may designate by written notice to the
Depositor and the Certificateholders.
23
<PAGE>
"1933 ACT" means the Securities Act of 1933, as amended.
"1934 ACT" means the Securities Exchange Act of 1934, as
amended.
"1996-C2 PPM" has the meaning set forth in the Preliminary
Statement hereto.
"1996-C2 PROSPECTUS" has the meaning set forth in the
Preliminary Statement hereto.
"1996-C2 PROSPECTUS SUPPLEMENT" has the meaning set forth in
the Preliminary Statement hereto.
"NONRECOVERABLE ADVANCE" means, (i) any Advance or proposed
Advance that, in the reasonable business judgment of the Servicer (as evidenced
by an Officer's Certificate), (ii) if the Trustee is required herein to make
such Advance, that, in the reasonable business judgment of the Trustee (as
evidenced by an Officer's Certificate) and (iii) if the Fiscal Agent is required
herein to make such Advance, that, in the reasonable business judgment of the
Fiscal Agent (as evidenced by an Officer's Certificate), would not ultimately be
recoverable, together with all unreimbursed Advances made prior to such date
with respect to the related Mortgage Loan or REO Property, from Net Liquidation
Proceeds or other amounts recoverable with respect to such Mortgage Loan or REO
Property. Such Officer's Certificate shall be delivered to the Depositor, to the
Operating Adviser and, in the case of the Servicer and the Fiscal Agent, to the
Trustee in the time periods as specified in Section 4.04, shall set forth such
determination of nonrecoverability and the procedure and considerations of the
Servicer, the Trustee or the Fiscal Agent, as applicable, forming the basis of
such determination (which must include, without limitation, and/or be
accompanied by, with respect to each related Mortgaged Property or REO Property,
information such as related income and expense statements, rent rolls, occupancy
status, property inspections, the Servicer or Special Servicer inquiries, an
Appraisal (the cost of which Appraisal shall be recoverable as a Servicing
Advance) and/or notification of material environmental concern). The Trustee and
the Fiscal Agent shall be entitled to conclusively rely on any nonrecoverability
determination made by the Servicer in connection with an Advance.
"NON-REGISTERED CERTIFICATES" means, collectively, the Class
F, Class G, Class H, Class J, Class R-I, Class R-II and Class R-III
Certificates.
"NON-REGISTERED CERTIFICATEHOLDER" means the Holder of a
Non-Registered Certificate.
"OFFICER'S CERTIFICATE" means, in the case of (i) any Person
other than the Servicer and the initial Trustee, a certificate signed by one or
more of the Chairman of the Board, any Vice Chairman, the President or any Vice
President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of a Person, (ii) the Servicer, a certificate signed by an
employee thereof designated as a Servicing Officer pursuant to the Servicing
Agreement and (iii) the initial Trustee, any Responsible Officer, and in each
case delivered to the Trustee (or, in the case of an Officer's Certificate of
the Trustee, to the Depositor and the Operating Adviser).
24
<PAGE>
"OPERATING ADVISER" shall have the meaning set forth in
Section 5.08(a).
"OPERATING STATEMENT ANALYSIS" means a report substantially in
the form of EXHIBIT G to the Servicing Agreement.
"OPINION OF COUNSEL" means a written opinion of counsel,
reasonably acceptable in form and substance to the Trustee, and who may be
in-house or outside counsel to the Depositor, the Servicer or the Special
Servicer, but who must be Independent outside counsel with respect to any such
opinion of counsel concerning the taxation, or status for tax purposes, of REMIC
I, or REMIC II or REMIC III.
"OUTSTANDING UNCERTIFICATED DISTRIBUTABLE INTEREST SHORTFALL"
means, with respect to any REMIC I Regular Interest for any Distribution Date
subsequent to the initial Distribution Date (the Outstanding Uncertificated
Distributable Interest Shortfall for each REMIC I Regular Interest for the
initial Distribution Date being zero), an amount equal to the sum of (a) the
excess, if any, of (i) the Uncertificated Distributable Interest and any
Outstanding Uncertificated Distributable Interest Shortfall in respect of such
REMIC I Regular Interest for the prior Distribution Date, over (ii) the
aggregate distributions of interest deemed made to REMIC II in respect of such
REMIC I Regular Interest on the prior Distribution Date, plus (b) one month's
interest (calculated on the basis of a 360-day year consisting of twelve 30-day
months) on any such excess at the REMIC I Remittance Rate for such REMIC I
Regular Interest.
"P&I ADVANCE" means any advance made by the Servicer, the
Trustee or the Fiscal Agent pursuant to Article IV hereof to cover a P&I Advance
Amount for any Mortgage Loan or REO Loan for any Distribution Date.
"P&I ADVANCE AMOUNT" means, as to any Distribution Date: (i)
with respect to any Mortgage Loan, including without limitation, any Specially
Serviced Mortgage Loan as to which the Scheduled Payment (other than a Balloon
Payment) due during the related Due Period was not received by the Servicer or
Special Servicer, as applicable, as of the related Determination Date, but as to
which the related Maturity Date had not occurred as of the related Determination
Date, the amount of such Scheduled Payment not received from the related
Mortgagor (exclusive of any portion of such Scheduled Payment that constitutes
Retained Yield); (ii) with respect to any Balloon Mortgage Loan as to which the
related Maturity Date occurred during or prior to the related Due Period but the
full amount of the related Balloon Payment had not been collected as of the
related Determination Date, an amount equal to the excess, if any, of the
Assumed Scheduled Payment for such Balloon Mortgage Loan for the Due Date during
the related Due Period (exclusive of any portion of such Assumed Scheduled
Payment that constitutes Retained Yield), over any payments or other collections
received in respect of such Mortgage Loan during the related Collection Period
identified and applied by the Servicer as previously unadvanced principal of
and/or interest (exclusive of any portion thereof constituting Retained Yield)
on such Mortgage Loan; and (iii) with respect to each REO Loan, an amount equal
to the excess, if any, of the Assumed Scheduled Payment for such REO Loan and
the Due Date during the related Due Period (exclusive of any portion of such
Assumed Scheduled Payment that constitutes or, if the predecessor Mortgage Loan
had remained outstanding, would have constituted, Retained Yield), over the Net
REO Income derived from the operation of the related REO Property during the
related Collection Period that is identified and applied by the
25
<PAGE>
Servicer as previously unadvanced principal of and/or interest (exclusive of any
portion thereof constituting Retained Yield) on such REO Loan; 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 Amount 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
Amount) to equal the product of (i) the amount of the interest portion of such
P&I Advance Amount 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 Assigned Asset Value of such
Required Appraisal Loan immediately prior to such Distribution Date, and the
denominator of which is equal to the Stated Principal Balance of such Required
Appraisal Loan immediately prior to such Distribution Date.
"P&I ADVANCE DATE" means, with respect to any Distribution
Date, the second Business Day preceding such Distribution Date.
"PAYING AGENT" means the paying agent appointed pursuant to
Section 3.05.
"PERCENTAGE INTEREST" means, with respect to any Certificate
of any Class at any time, except as set forth in the last sentence of this
definition, the fraction of such Class evidenced by such Certificate, expressed
as a percentage (carried to four decimal places, if necessary), the numerator of
which is the Certificate Principal Amount (or the Certificate Notional Amount,
in the case of a Class IO Certificate) represented by such Certificate
determined on the Closing Date (as set forth on the face thereof), and the
denominator of which is the Aggregate Certificate Principal Amount (or Aggregate
Certificate Notional Amount, in the case of the Class IO Certificates) of all of
the Certificates of such Class determined on the Closing Date (as set forth
and/or described in the Preliminary Statement hereto). With respect to a
Residual Certificate, the fraction of the related Class of Residual Certificates
evidenced thereby, expressed as a percentage, as stated on the face of such
Certificate.
"PERMITTED ENCUMBRANCES" means, with respect to any Mortgaged
Property and any Mortgage thereon, (a) liens for real estate taxes and special
assessments not yet due and payable, (b) covenants, conditions and restrictions,
rights of way, easements and other matters of public record as of the date of
recording of such Mortgage, such exceptions appearing of record being (i)
customarily acceptable to mortgage lending institutions generally or (ii)
specifically considered in the appraisal of such Mortgaged Property made in
connection with the origination of a Mortgage Loan, (c) other matters to which
like properties are commonly subject which do not, individually or in the
aggregate, materially interfere with the benefits of the security intended to be
provided by such Mortgage or materially affect the value or marketability of
such Mortgaged Property, and (d) if such Mortgage secures a Cross-Collateralized
Mortgage Loan, any lien securing a related Cross-Collateralized Mortgage Loan.
"PERMITTED TRANSFEREE" means any proposed transferee of a
Residual Certificate that is (i) a U.S. Person, (ii) not a Disqualified
Organization and (iii) not an agent or nominee acting on behalf of a
Disqualified Organization.
26
<PAGE>
"PERSON" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"PHYSICAL CERTIFICATES" shall have the meaning set forth in
Section 3.06.
"PLAN" has the meaning set forth in Section 3.03(d).
"PREPAYMENT INTEREST SHORTFALL" means, with respect to any
Distribution Date, if during the related Collection Period a full or partial
Principal Prepayment (other than a Principal Prepayment in full due to a
default, casualty, condemnation or liquidation) or a Balloon Payment is made in
respect of any Mortgage Loan before the Due Date for such Mortgage Loan, the
amount of interest (exclusive of any portion thereof constituting Retained
Yield) that would accrue on such Principal Prepayment or on the principal
portion of such Balloon Payment, as the case may be, from the date such payment
was made to such Due Date, to the extent not collected.
"PREPAYMENT PREMIUM" means any premium, penalty or fee paid or
payable, as the context requires, under the terms of the related Mortgage Note
in connection with a Principal Prepayment collected in respect of any Mortgage
Loan.
"PRIMARY MORTGAGED PROPERTY" means, with respect to any
Cross-Collateralized Mortgage Loan, the Mortgaged Property whose address is set
forth next to such Mortgage Loan's loan number on the Mortgage Loan Schedule.
"PRIME" means a per annum rate equal to the "prime rate" as
published in the "Money Rates" section of The Wall Street Journal or such other
publication as determined by the Trustee in its reasonable discretion.
"PRINCIPAL PAYMENT AMOUNT" means, with respect to any
Distribution Date, an amount equal to the aggregate of (without duplication):
(a) the aggregate of 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 due
on or before the Cut-off Date or for which a P&I Advance was previously
made for a prior Distribution Date or that represents the principal
portion of a Scheduled Payment due on a Due Date subsequent to the
related Due Period;
(b) the aggregate of the principal portions of all Scheduled
Payments due in respect of the Mortgage Loans for their respective Due
Dates occurring during the related Due Period that were received prior
to the related Collection Period;
(c) the aggregate of all Principal Prepayments received on the
Mortgage Loans during the related Collection Period;
27
<PAGE>
(d) the aggregate of all Insurance Proceeds, Condemnation
Proceeds, other Liquidation Proceeds, Repurchase Proceeds and Net REO
Income 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 Servicer as recoveries of principal
thereof (or, in the case of an REO Property, of the related REO Loan)
in accordance with Section 1.02(b), in each case net of any portion of
such amounts 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;
(e) the aggregate of the principal portions of any P&I
Advances made by the Servicer, the Trustee and/or the Fiscal Agent for
such Distribution Date; and
(f) if such Distribution Date is subsequent to the initial
Distribution Date, the excess, if any, of the Principal Payment Amount
for the preceding Distribution Date, over the aggregate distributions
of principal made on the Sequential Pay Certificates on such preceding
Distribution Date.
"PRINCIPAL PREPAYMENT" means any Mortgagor payment of
principal or other recovery of principal on a Mortgage Loan which is received or
recovered in advance of its scheduled Due Date and applied to reduce the Unpaid
Principal Balance of the Mortgage Loan in advance of its scheduled Due Date (but
excluding any such recovery of principal in the form of Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds, Repurchase Proceeds or Net REO
Income).
"PROPERTY VALUATION" has the meaning set forth in the Special
Servicing Agreement.
"PURCHASE PRICE" means: (a) with respect to the repurchase of
a Mortgage Loan by the Depositor pursuant to Article II of this Agreement, a
price equal to the greater of (i) the sum of (A) 100% of the Unpaid Principal
Balance of such Mortgage Loan, plus (B) accrued but unpaid interest thereon at
the related Mortgage Rate in effect from time to time (net of any applicable
Retained Yield Rate), from the date as to which interest was last paid on such
Mortgage Loan to the Due Date in the Collection Period in which such purchase
occurs, plus (C) any unreimbursed Servicing Advances outstanding with respect to
such Mortgage Loan, plus (D) the amount of any Additional Trust Fund Expenses
related to such Mortgage Loan (including, without limitation, any Advance
Interest and Special Servicing Supplemental Fees related to such Mortgage Loan)
previously paid or reimbursed to or payable or reimbursable to the Servicer, the
Special Servicer, the Trustee, the Fiscal Agent, or other Persons, and (ii) the
fair market value thereof at the time of such purchase; and (b) with respect to
a sale of a Defaulted Mortgage Loan pursuant to Section 5.06 or 5.07 hereof, the
amount set forth in clause (a) above without regard to subclause (i)(D) thereof;
provided that the Servicer shall obtain an Opinion of Counsel, at the
Depositor's expense, in connection with any such purchase of a Mortgage Loan as
a result of a breach of a representation or warranty in Section 2.03(b) if the
Basis Limit Price (as determined by the Trustee) of such Mortgage Loan is less
than the Purchase Price of such Mortgage Loan determined as set forth above, and
the Purchase Price shall be reduced to the Basis Limit Price if such Opinion of
Counsel states that failure to do so would expose any REMIC created hereunder to
a tax on a prohibited transaction, as defined in
28
<PAGE>
Section 860F(a) of the Code. The "Purchase Price" means: (x) with respect to the
purchase of REO Property by the Depositor pursuant to Article II of this
Agreement, a price equal to the greater of (i) the sum of (A) 100% of the Unpaid
Principal Balance of the related REO Loan, plus (B) accrued but unpaid interest
thereon at the applicable Mortgage Rate in effect from time to time (net of any
applicable Retained Yield Rate), from the date as to which interest was last
paid or otherwise collected on the related Mortgage Loan or REO Loan to the Due
Date in the Collection Period in which such purchase occurs plus (C) any
unreimbursed Servicing Advances outstanding with respect to such REO Property
and/or the related Mortgage Loan, plus (D) the amount of any Additional Trust
Fund Expenses related to such REO Property and/or the related Mortgage Loan
(including, without limitation, any Advance Interest and Special Servicing
Supplemental Fees related to such REO Property, the related Mortgage Loan or the
related REO Loan) previously paid or reimbursed to or payable or reimbursable to
the Servicer, the Special Servicer, the Trustee, the Fiscal Agent, or other
Persons, and (ii) the fair market value thereof as determined by an appraisal of
such REO Property prepared at the time of such purchase; and (y) with respect to
a sale of REO Property pursuant to Section 5.07 hereof, the amount set forth in
clause (x) above without regard to subclause (i)(D) thereof.
"PV YIELD LOSS AMOUNT" means: (a) with respect to any Class of
Sequential Pay Certificates, as calculated on any Distribution Date in respect
of any prepayment of principal of a Mortgage Loan or an REO Loan that is
payable, in whole or in part, in reduction of the Aggregate Certificate
Principal Amount of such Class of Certificates on such Distribution Date, an
amount equal to the present value of a series of monthly payments, each equal to
the related Fixed Interest Payment Adjustment deemed payable on each subsequent
Distribution Date to and including the earlier of (i) the Assumed Final
Distribution Date for such Class of Certificates and (ii) the Distribution Date
immediately following the Stated Maturity Date for such Mortgage Loan (such
period following the then current Distribution Date to and including the earlier
of the two Distribution Dates referred to in clauses (a)(i) and (a)(ii), the
"INTEREST PAYMENT ADJUSTMENT PERIOD" for such Class of Certificates), and each
discounted at the applicable Reinvestment Yield (monthly compounding) for the
number of months remaining from the then current Distribution Date to the
applicable subsequent Distribution Date; and (b) with respect to the Class IO
Certificates, as calculated on any Distribution Date in respect of any
prepayment of principal of a Mortgage Loan or an REO Loan that is payable, in
whole or in part, in reduction of the Aggregate Certificate Principal Amount of
the Sequential Pay Certificates on such Distribution Date, the present value of
a series of monthly payments, which may vary over time, each equal to the
applicable related Variable Interest Payment Adjustment(s) deemed payable on
each subsequent Distribution Date to and including the Distribution Date
immediately following the Stated Maturity Date for such Mortgage Loan (such
period following the then current Distribution Date to and including the
Distribution Date immediately following the Stated Maturity Date for such
Mortgage Loan, the "INTEREST PAYMENT ADJUSTMENT PERIOD" for the Class IO
Certificates), and each discounted at the applicable Reinvestment Yield (monthly
compounding) for the number of months remaining from the then current
Distribution Date to the applicable subsequent Distribution Date. With respect
to any Class of Sequential Pay Certificates and any prepayment of principal of a
Mortgage Loan that is payable, in whole or in part, in reduction of the
Aggregate Certificate Principal Amount of such Class of Certificates on any
Distribution Date, the "FIXED INTEREST PAYMENT ADJUSTMENT" deemed payable on
each subsequent Distribution Date during the relevant Interest Payment
Adjustment Period, shall equal one-twelfth of the product of (a) the amount, if
any, by which the Certificate Interest Rate for
29
<PAGE>
such Class of Certificates for the then current Distribution Date exceeds the
applicable Reinvestment Yield, multiplied by (b) the amount of such prepayment
that is payable in reduction of the Aggregate Certificate Principal Amount of
such Class of Certificates on the then current Distribution Date. With respect
to the Class IO Certificates and any prepayment of principal of a Mortgage Loan
that is payable, in whole or in part, in reduction of the Aggregate Certificate
Principal Amount of the Sequential Pay Certificates on any Distribution Date,
the "VARIABLE INTEREST PAYMENT ADJUSTMENT(S)" deemed payable on any particular
subsequent Distribution Date during the relevant Interest Payment Adjustment
Period shall depend on when such subsequent Distribution Date occurs, shall be
subject to change with the occurrence of each Assumed Final Distribution Date
that occurs during the relevant Interest Payment Adjustment Period and shall
equal one-twelfth of (a) a specified percentage or percentages, multiplied by
(b) the amount of the particular prepayment of principal that is payable in
reduction of the aggregate Certificate Principal Amount of the Sequential Pay
Certificates on the then current Distribution Date (multiple Variable Interest
Payment Adjustments being deemed due on any Assumed Final Distribution Date that
relates to more than one Class of Sequential Pay Certificates). The specified
percentage(s) referred to in clause (a) of the prior sentence shall be: (w)
1.37% for Variable Interest Payment Adjustments deemed due on or prior to the
Assumed Final Distribution Date for the Class A Certificates; (x) 1.18% for
Variable Interest Payment Adjustments deemed due prior to the Assumed Final
Distribution Date for the Class B Certificates but after the Assumed Final
Distribution Date for the Class A Certificates; (y) 1.18% and 1.06% for the
Variable Interest Payment Adjustments deemed due on the Assumed Final
Distribution Date for the Class B and Class C Certificates; and (z) 0.90% for
Variable Interest Payment Adjustments deemed due after the Assumed Final
Distribution Date for the Class C Certificates. For purposes of the foregoing,
the "REINVESTMENT YIELD" applicable to any Class of Regular Interest
Certificates will be equal to the yield on the U.S. Treasury issue (primary
issue) with a maturity date closest to the final Distribution Date during the
relevant Interest Payment Adjustment Period. Also for purposes of the foregoing,
the amount of any prepayment of principal payable in reduction of the Aggregate
Certificate Principal Amount of any Class or Classes of Sequential Pay
Certificates on any Distribution Date shall be deemed to equal the product of
(x) the full amount of such prepayment of principal, multiplied by (y) a
fraction, the numerator of which is the portion of the Principal Payment Amount
for such Distribution Date that is payable in respect of such Class or Classes
of Sequential Pay Certificates, and the denominator of which is the entire
Principal Payment Amount for such Distribution Date.
"QUALIFIED APPRAISER" means, with respect to any Mortgaged
Property or REO Property, an Independent MAI-designated appraiser with at least
five years of experience in respect of the relevant geographic location and
property type.
"QUALIFIED GIC" means a guaranteed investment contract or
surety bond providing for the investment of funds in any Account and insuring a
minimum or fixed rate of return on investments of such funds, which contract or
surety bond shall:
(i) be an obligation of an insurance company or other
corporation whose long-term unsecured debt rating is "Aaa" by Moody's
and "AAA" by each of Fitch and D&P;
30
<PAGE>
(ii) provide that the Trustee may exercise all of the rights
under such contract or surety bond without the necessity of taking any
action by any other Person;
(iii) provide that, if at any time the then current credit
standing of the obligor under such guaranteed investment contract is
such that continued investment pursuant to such contract or funds would
result in a qualification, downgrading or withdrawal of the rating on
any Class of Certificates by any Rating Agency, the Trustee may
terminate such contract without penalty and be entitled to the return
of all funds previously invested thereunder, together with accrued
interest thereon at the interest rate provided under such contract to
the date of delivery of such funds to the Trustee;
(iv) provide that the Trustee's interest therein shall be
transferable to any successor or assignee of the Trustee hereunder; and
(v) provide that the funds reinvested thereunder and accrued
interest thereon be returnable to the applicable Account not later than
the Business Day prior to the next date upon which as described in this
Agreement, the Servicing Agreement or the Special Servicing Agreement,
as applicable, such amounts are necessary to be withdrawn from the
Account.
"QUALIFIED MORTGAGE" means a "qualified mortgage" within the
meaning of Code Section 860G(a)(3) (but without regard to the rule in Treasury
Regulation ss. 1.860G-2(f)(2) that treats a defective obligation as a qualified
mortgage, or any substantially similar successor provision) and applicable
Treasury Regulations promulgated pursuant thereto.
"RATING AGENCIES" means Moody's, D&P and Fitch.
"REALIZED LOSS" means a Liquidation Realized Loss or, to the
extent not otherwise allocable to a reduction in the amount of Retained Yield
payable to the related Retained Yield Holder, a Modification Loss or a
Bankruptcy Loss.
"RECORD DATE" means, for each Distribution Date and each Class
of Certificates, the last day of the month immediately preceding the month in
which such Distribution Date occurs or, if such day is not a Business Day, the
Business Day immediately preceding such day.
"REGISTERED CERTIFICATES" means, collectively, the Class A,
Class B, Class C, Class D, Class E and Class IO Certificates.
"REGISTERED CERTIFICATEHOLDER" means the Holder of a
Registered Certificate.
"REHABILITATED MORTGAGE LOAN" has the meaning set forth in the
Servicing Agreement.
"REINVESTMENT YIELD" has the meaning set forth in the
definition of "PV Yield Loss Amount".
31
<PAGE>
"REMIC" means a real estate mortgage investment conduit within
the meaning of the REMIC Provisions.
"REMIC I" means the segregated pool of assets consisting of
the Mortgage Loans (exclusive of any Retained Yield with respect thereto), such
amounts (excluding Retained Yield) as shall from time to time be held in the
Collection Account, the Custodial Account and any REO Accounts, the Insurance
Policies and any REO Properties, for which a REMIC election is to be made.
"REMIC I REGULAR INTEREST" means, with respect to each
Mortgage Loan (and any successor REO Loan), the separate non-certificated
beneficial ownership interest 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 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 Amount (which
shall equal the Cut-off Date Principal Balance of the related Mortgage Loan).
The designation for each REMIC I Regular Interest shall be the loan number for
the related Mortgage loan set forth in the Mortgage Loan Schedule.
"REMIC I REMITTANCE RATE" means, with respect to any REMIC I
Regular Interest for any Distribution Date, a fixed rate per annum equal to the
Net Mortgage Rate for the related Mortgage Loan in effect as of the Closing
Date.
"REMIC II" means, the segregated pool of assets consisting of
all of the REMIC I Regular Interests, for which a separate REMIC election is to
be made.
"REMIC II REGULAR INTEREST" means any one of the nine 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 related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Amount 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" means, with respect to any REMIC II
Regular Interest for any Distribution Date, the Weighted Average REMIC I
Remittance Rate for such Distribution Date.
"REMIC II STRIP RATE" means, with respect to REMIC II Regular
Interest A, 1.37% per annum; with respect to REMIC II Regular Interest B, 1.18%
per annum; with respect to REMIC II Regular Interest C, 1.06% per annum; with
respect to REMIC II Regular Interest D, 0.90% per annum; with respect to REMIC
II Regular Interest E, 0.90% per annum; with respect to REMIC II Regular
Interest F, 0.90% per annum; with respect to REMIC II Regular Interest G, 0.90%
per annum; with respect to REMIC II Regular Interest H, 0.90% per annum; and
with respect to REMIC II Regular Interest J, 0.90% per annum.
32
<PAGE>
"REMIC III" means the segregated pool of assets consisting of
all of the REMIC II Regular Interests, for which a separate REMIC election is to
be made.
"REMIC III CERTIFICATES" means, collectively, the Class A,
Class B, Class C, Class D, Class E, Class IO, Class F, Class G, Class H, Class J
and Class R-III Certificates issued pursuant to this Agreement.
"REMIC III REGULAR CERTIFICATES" means, collectively, the
REMIC III Certificates (other than the Class R-III Certificates).
"REMIC PROVISIONS" means the provisions of the federal income
tax law relating to real estate mortgage investment conduits, which appear at
Sections 860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and proposed, temporary and final Treasury regulations and any
published rulings, notices and announcements promulgated thereunder, as the
foregoing may be in effect from time to time.
"RENTS FROM REAL PROPERTY" means, with respect to any REO
Property, gross income of the character described in Section 856(d) of the Code.
"REO ACCOUNT" means, with respect to each REO Property, a
separate account established and maintained by the Special Servicer pursuant to
the Special Servicing Agreement as required by Section 5.04(b).
"REO DISPOSITION" means the receipt by the Servicer or the
Special Servicer of Liquidation Proceeds and other payments and recoveries
(including proceeds of a final sale) from the sale or other disposition of REO
Property.
"REO LOAN" means the mortgage loan deemed for purposes hereof
to be outstanding with respect to each REO Property. Each REO Loan shall be
deemed to provide for monthly payments of principal and/or interest equal to its
Assumed Scheduled Payment and otherwise to have the same terms and conditions as
its predecessor Mortgage Loan, which, in the case of a Cross-Collateralized
Mortgage Loan, shall be the Mortgage Loan for which the related REO Property had
constituted the Primary Mortgaged Property. Each REO Loan shall be deemed to
have an initial Unpaid Principal Balance, Scheduled Principal Balance and Stated
Principal Balance equal to the Unpaid Principal Balance, Scheduled Principal
Balance and Stated Principal Balance, respectively, of its predecessor Mortgage
Loan as of the date on which the related REO Property was acquired on behalf of
the Trust. All Scheduled Payments (other than a Balloon Payment), Assumed
Scheduled 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 on which the
related REO Property was acquired on behalf of the Trust, shall be deemed to
continue to be due and owing in respect of an REO Loan. All amounts payable or
reimbursable to the Servicer, the Special Servicer or any other Person in
respect of the predecessor Mortgage Loan as of the date on which the related REO
Property was acquired on behalf of the Trust, shall be deemed to continue to be
payable or reimbursable to the Servicer, the Special Servicer or such other
Person, as the case may be, in respect of an REO Loan.
33
<PAGE>
"REO PROPERTY" means a Mortgaged Property acquired on behalf
of the Trust through foreclosure, deed-in-lieu of foreclosure, abandonment or
reclamation from bankruptcy in connection with a defaulted Mortgage Loan or
otherwise treated as foreclosure property under the REMIC Provisions. References
herein to "related Mortgage Loan" are, with respect to any REO Property that had
secured a Group of Cross-Collateralized Mortgage Loans, references to the
Mortgage Loan for which such REO Property had been the Primary Mortgaged
Property.
"REO STATUS REPORT" means a report substantially in the form
of EXHIBIT I to the Servicing Agreement.
"REPURCHASE PROCEEDS" means cash amounts paid by or on behalf
of the Depositor in connection with the repurchase of any Deleted Mortgage Loan
or the purchase of any REO Property by the Depositor pursuant to Article II
hereof.
"REQUIRED APPRAISAL LOAN" has the meaning set forth in the
Special Servicing Agreement.
"RESERVE FUNDS" has the meaning set forth in the Servicing
Agreement.
"RESIDUAL CERTIFICATES" means, collectively, the Class R-I,
Class R-II and Class R-III Certificates.
"RESIDUAL CERTIFICATEHOLDER" means the Holder of a Residual
Certificate.
"RESPONSIBLE OFFICER" means, when used with respect to the
initial Trustee, any Vice President, Assistant Vice President, corporate trust
officer or assistant corporate trust officer in the Asset-Backed Securities
Trust Services Group of LaSalle National Bank, and with respect to any successor
Trustee, any Vice President, Assistant Vice President, corporate trust officer
or any assistant corporate trust officer, or any other officer of the Trustee to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject and who may execute any relevant
documents in accordance with the bylaws of the Trustee.
"RETAINED YIELD" means, with respect to any Mortgage Loan
indicated on the Mortgage Loan Schedule as having a Retained Yield Rate in
excess of 0.00% per annum, the aggregate of: (i) interest accrued at the
Retained Yield Rate on the Unpaid Principal Balance from time to time of such
Mortgage Loan calculated and payable monthly from interest received on such
Mortgage Loan, from the interest portion of Scheduled Payments, Insurance
Proceeds, Condemnation Proceeds, other Liquidation Proceeds, or otherwise; (ii)
that portion of each Prepayment Premium, if any, received in respect of such
Mortgage Loan equal to the product of the related Retained Yield Fraction,
multiplied by the amount of such Prepayment Premium; and (iii) in the case of
the Mortgage Loans identified on the Mortgage Loan Schedule by loan numbers 61
and 107, that portion of each late payment charge, if any, received in respect
of each such Mortgage Loan equal to the product of the related Retained Yield
Fraction, multiplied by the amount of such late payment charge.
34
<PAGE>
"RETAINED YIELD DOCUMENT" means, (i) in the case of the
Mortgage Loans identified on the Mortgage Loan Schedule by loan numbers 7 and
14, collectively (a) the Multifamily and Commercial Servicing Agreement
(Retained Yield), dated as of June 30, 1995, between the Seller as initial owner
and the Servicer as servicer and (b) the Multifamily and Commercial Mortgage
Loan Purchase Agreement (Single Purchase, Pre-Closed Mortgage Loans, Retained
Yield), dated as of June 30, 1995, between the Seller as purchaser and the
Servicer as seller; and (ii) in the case of the Mortgage Loans identified on the
Mortgage Loan Schedule by loan numbers 61 and 107, collectively (a) the
Multifamily and Commercial Servicing Agreement, dated as of May 1, 1995, between
the Seller as initial owner and Main America Capital, L.C. as servicer and (b)
the Multifamily and Commercial Mortgage Loan Purchase Agreement (Pre-Closed
Mortgage Loans, Retained Yield), dated as of May 1, 1995, between the Seller as
purchaser and Main America Capital, L.C. as seller.
"RETAINED YIELD FRACTION" means, with respect to each of the
Mortgage Loans indicated on the Mortgage Loan Schedule as having a Retained
Yield Rate in excess of 0.00% per annum, a fraction (expressed as a percentage),
the numerator of which is the related Retained Yield Rate, and the denominator
of which is the related Mortgage Rate minus 0.125%.
"RETAINED YIELD HOLDER" means, with respect to any Mortgage
Loan as to which there is Retained Yield, the Person entitled to receive such
Retained Yield.
"RETAINED YIELD RATE" means, with respect to any Mortgage
Loan, the rate per annum specified on the Mortgage Loan Schedule under the
heading "Retained Yield"; provided that in the event that a Scheduled Payment is
modified by the Servicer or Special Servicer or by the related Mortgagee or in
connection with a bankruptcy or similar proceeding involving the related
Mortgagor, the Retained Yield Rate shall be increased or decreased on a PRO RATA
basis with amounts payable to the Trustee or other related Mortgagee based on
the ratio the related Mortgage Rate (net of the related Retained Yield Rate)
bears to the related Retained Yield Rate immediately prior to such modification.
"RULE 144A" means Rule 144A under the 1933 Act.
"SCHEDULED PAYMENT" means each scheduled payment of principal
of, and interest on, a Mortgage Loan required to be paid on a Due Date by the
related Mortgagor in accordance with the terms of the related Mortgage Note
(excluding all amounts of principal and interest which were due on or before the
Cut-Off Date, whenever received and taking account of any modifications thereof
and the effects of any Debt Service Reduction Amounts)).
"SCHEDULED PRINCIPAL BALANCE" means, with respect to any
Mortgage Loan (or successor REO Loan), as of any date of determination, the
Cut-off Date Principal Balance of such Mortgage Loan reduced (to not less than
zero) by the aggregate of (without duplication): (a) the principal portion of
all Scheduled Payments (other than any Balloon Payment) due, and of any Assumed
Scheduled Payments deemed due, in respect of such Mortgage Loan (or any
successor REO Loan) on all Due Dates subsequent to the Cut-off Date through and
including such date of determination, whether or not received or advanced; (b)
the aggregate of all payments, Insurance Proceeds, Condemnation Proceeds, other
Liquidation Proceeds, Repurchase Proceeds and, if applicable, Net REO Income
received on or in respect of such Mortgage Loan
35
<PAGE>
(or any related REO Property) during the period subsequent to the Cut-off Date
through and including such date of determination that were identified and
applied by the Servicer as recoveries of principal of such Mortgage Loan (or any
successor REO Loan) in accordance with Section 1.02(b), in each case net of any
portion of such particular payment or other collection which represents a
recovery of a principal portion of any Scheduled Payment (other than a Balloon
Payment) due, or of the principal portion of any Assumed Scheduled Payment
deemed due, in respect of such Mortgage Loan (or any successor REO Loan) on a
Due Date coinciding with or preceding such date of determination; and (c) the
principal portion of any Realized Loss incurred in respect of such Mortgage Loan
or any related REO Property during the period subsequent to the Cut-off Date
through and including such date of determination; provided that, notwithstanding
the foregoing, if any Mortgage Loan is paid in full, or if a Final Recovery
Determination is made in respect of any Mortgage Loan or REO Property, or if any
Mortgage Loan or REO Property is purchased by the Depositor pursuant to Article
II or otherwise removed from the Trust Fund, then the "Scheduled Principal
Balance" of such Mortgage Loan or, in the case of an REO Property, the related
REO Loan will be zero as of the date on which such payment in full, Final
Recovery Determination, purchase or other disposition occurred and as of each
date thereafter.
"SELLER" means Lehman Brothers Holdings, Inc., doing business
as Lehman Capital, a Division of Lehman Brothers Holdings, Inc., and its
successors-in-interest.
"SENIOR CERTIFICATES" means, collectively, the Class A and
Class IO Certificates.
"SENIOR CERTIFICATEHOLDER" means the Holder of a Senior
Certificate.
"SEQUENTIAL PAY CERTIFICATES" means, collectively, the Class
A, Class B, Class C, Class D, Class E, Class F, Class G, Class H and Class J
Certificates.
"SEQUENTIAL PAY CERTIFICATEHOLDER" means the Holder of a
Sequential Pay Certificate.
"SERVICER" means GMAC Commercial Mortgage Corporation and its
permitted successors or assigns.
"SERVICER EVENT OF DEFAULT" means any one of the events
described in Section 3.01(b) of the Servicing Agreement.
"SERVICER REMITTANCE DATE" has the meaning set forth in the
Servicing Agreement.
"SERVICING ADVANCE" means any cost or expense of the Servicer,
the Trustee or Fiscal Agent designated as a servicing advance in any of the
Transaction Documents.
"SERVICING AGREEMENT" means the Servicing Agreement, dated as
of the Cut-off Date, by and among the Depositor, the Trustee, the Servicer and
the Special Servicer, as such agreement may from time to time be amended,
supplemented or otherwise modified.
"SERVICING FEE" has the meaning set forth in the Servicing
Agreement.
36
<PAGE>
"SERVICING FEE RATE" means (a) with respect to any Mortgage
Loan (other than a Specially Serviced Mortgage Loan or a Mortgage Loan that has
become an REO Loan), the sum of the rate per annum specified on the Mortgage
Loan Schedule under the heading "Servicing Fee" and the rate per annum specified
on such schedule under the heading "Master Servicing Fee"; and (b) with respect
to any Specially Serviced Mortgage Loan or REO Loan, 0.125% per annum.
"SERVICING TRANSFER EVENT" has the meaning set forth in the
Servicing Agreement.
"SERVICING OFFICER" has, with respect to the Servicer, the
meaning set forth in the Servicing Agreement and has, with respect to the
Special Servicer, the meaning set forth in the Special Servicing Agreement.
"SINGLE CERTIFICATE" means a hypothetical Certificate of any
Class of REMIC III Regular Certificates evidencing a $1,000 denomination or, in
the case of the Class IO Certificates, a 100% Percentage Interest in such Class.
"SPECIAL SERVICER" means CRIIMI MAE Services Limited
Partnership and its permitted successors or assigns.
"SPECIAL SERVICER EVENT OF DEFAULT" means any one of the
events described in Section 3.01(b) of the Special Servicing Agreement.
"SPECIAL SERVICER REMITTANCE DATE" has the meaning set forth
in the Special Servicing Agreement.
"SPECIAL SERVICING AGREEMENT" means the Special Servicing
Agreement, dated as of the Cut-off Date, by and among the Depositor, the
Trustee, the Servicer and the Special Servicer, as such agreement may from time
to time be amended, supplemented or otherwise modified.
"SPECIAL SERVICING BASIC FEE" has the meaning set forth in the
Special Servicing Agreement.
"SPECIAL SERVICING BASIC FEE RATE" means 0.05% per annum.
"SPECIAL SERVICING OFFICER" means any officer of the Special
Servicer involved in, or responsible for, the administration and servicing of
the Specially Serviced Mortgage Loans and/or REO Properties whose name and
specimen signature appear on a list of servicing officers or employees furnished
to the Trustee by the Special Servicer as such list may from time to time be
amended.
"SPECIAL SERVICING SUPPLEMENTAL FEE" has the meaning set forth
in the Special Servicing Agreement.
"SPECIALLY SERVICED MORTGAGE LOAN" has the meaning set forth
in the Servicing Agreement.
37
<PAGE>
"STANDARD HAZARD INSURANCE POLICY" has the meaning set forth
in the Servicing Agreement.
"STARTUP DAY" means, with respect to each of REMIC I, REMIC II
and REMIC III, the day designated as such in Section 10.01(b).
"STATED MATURITY DATE" means, with respect to any Mortgage
Loan, the Due Date on which the last payment of principal is due and payable
under the terms of the related Mortgage Note as in effect on the Closing Date,
without regard to any change in or modification of such terms in connection with
a bankruptcy or similar proceeding involving the related Mortgagor or a
modification, waiver or amendment of such Mortgage Loan granted or agreed to by
the Special Servicer.
"STATED PRINCIPAL BALANCE" means, with respect to any Mortgage
Loan (and any successor REO Loan), as of any date of determination, the Cut-off
Date Principal Balance of such Mortgage Loan, reduced on each Distribution Date
(to not less than zero) by: (i) that portion of the Principal Payment Amount for
such Distribution Date (calculated without regard to clause (f) of the
definition of "Principal Payment Amount") that is attributable to such Mortgage
Loan (or any successor REO Loan); and (ii) the principal portion of any Realized
Loss incurred in respect of such Mortgage Loan (or any related REO Property)
during the related Collection Period; provided that, notwithstanding the
foregoing, if any Mortgage Loan is paid in full, or if a Final Recovery
Determination is made in respect of any Mortgage Loan or REO Property, or if any
Mortgage Loan or REO Property is purchased by the Depositor pursuant to Article
II or otherwise removed from the Trust Fund, then the "Stated Principal Balance"
of such Mortgage Loan or, in the case of an REO Property, the related REO Loan
will be zero as of the Distribution Date relating to the Collection Period in
which such payment in full, Final Recovery Determination, purchase or other
disposition occurred and as of each date thereafter.
"SUBORDINATE CERTIFICATES" means, collectively, the Class B,
Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class R-I, Class
R-II and Class R-III Certificates.
"SUBORDINATE CERTIFICATEHOLDER" means the Holder of a
Subordinate Certificate.
"TAX MATTERS PERSON" means, with respect to each of REMIC I,
REMIC II and REMIC III, the Person designated as the "tax matters person" of
such REMIC pursuant to Treasury Regulation Section 1.860F-4(d).
"TERMINATION PRICE" has the meaning set forth in Section
8.01(b).
"TITLE INSURANCE POLICY" means a title insurance policy
maintained with respect to a Mortgage Loan.
"TRANSACTION DOCUMENTS" means, collectively, this Agreement,
the Servicing Agreement and the Special Servicing Agreement.
"TRUST" has the meaning set forth in the Preliminary Statement
hereto.
38
<PAGE>
"TRUST FUND" means, collectively, all the assets of REMIC I,
REMIC II and REMIC III.
"TRUSTEE" means LaSalle National Bank, as Trustee, or its
successor-in-interest, or if any successor trustee or any separate trustee or
co-trustee shall be appointed as herein provided, then Trustee shall also mean
such successor trustee (subject to Section 7.07 hereof) and such separate
trustee or co-trustee (subject to Section 7.09 hereof), as the case may be.
"TRUSTEE FEE" means, with respect to each Mortgage Loan and
REO Loan for any Due Period, an amount equal to one month's interest (calculated
on the basis of a 360-day year consisting of twelve 30-day months) at the
Trustee Fee Rate on the Scheduled Principal Balance of such Mortgage Loan or REO
Loan, as the case may be, outstanding as of the commencement of such Due Period.
"TRUSTEE FEE RATE" means 0.01% per annum.
"UCC FINANCING STATEMENT" means, a financing statement
executed and filed pursuant to the Uniform Commercial Code, as in effect in the
relevant jurisdiction.
"UNCERTIFICATED ACCRUED INTEREST" means, with respect to any
REMIC I Regular Interest or REMIC II Regular Interest for any Distribution Date,
one month's interest (calculated on the basis of a 360-day year consisting of
twelve 30-day months) at the REMIC I Remittance Rate or REMIC II Remittance
Rate, as applicable, in respect thereof for such Distribution Date, accrued on
the Uncertificated Principal Amount of such REMIC I Regular Interest or REMIC II
Regular Interest, as the case may be, outstanding immediately prior to such
Distribution Date.
"UNCERTIFICATED DISTRIBUTABLE INTEREST" means, with respect to
any REMIC I Regular Interest or REMIC II Regular Interest for any Distribution
Date, the Uncertificated Accrued Interest in respect thereof for such
Distribution Date, reduced (to not less than zero) by the portion of any Net
Aggregate Prepayment Interest Shortfall for such Distribution Date allocable to
such REMIC I Regular Interest or REMIC II Regular Interest, as the case may be,
in accordance with Section 6.06(b) or Section 6.06(c), as applicable.
"UNCERTIFICATED PRINCIPAL AMOUNT" means, with respect to any
REMIC I Regular Interest or REMIC II Regular Interest, the principal amount
thereof outstanding as of any date of determination. As of the Closing Date, the
Uncertificated Principal Amount of each REMIC I Regular Interest shall equal the
Cut-off Date Principal Balance of the related Mortgage Loan. On each
Distribution Date, the Uncertificated Principal Amount of each REMIC I Regular
Interest shall be reduced by all distributions of principal deemed to have been
made thereon on such Distribution Date pursuant to Section 6.05(a) and, if and
to the extent appropriate, shall be further reduced on such Distribution Date as
provided in Section 6.05(d). As of the Closing Date, the Uncertificated
Principal Amount of each REMIC II Regular Interest shall equal the amount set
forth in the Preliminary Statement hereto as its initial Uncertificated
Principal Amount. On each Distribution Date, the Uncertificated Principal Amount
of each REMIC II Regular Interest shall be reduced by all distributions of
principal deemed to have been made thereon on such Distribution Date pursuant to
Section 6.04(a), and shall be further reduced by
39
<PAGE>
all Realized Losses and Additional Expense Losses deemed to have been allocated
thereto on such Distribution Date pursuant to Section 6.04(d).
"UNCOVERED PORTION" means, as the context may require, either:
(a) that portion, if any, of the then Aggregate Certificate Principal Amount of
all the Sequential Pay Certificates that is in excess of the then Aggregate
Assigned Asset Value of the Mortgage Pool; and (b) that portion, if any, of the
then Aggregate Certificate Principal Amount of any Class of Sequential Pay
Certificates that is in excess of an amount equal to (i) the then Aggregate
Assigned Asset Value of the Mortgage Pool, reduced (to not less than zero) by
(ii) the then Aggregate Certificate Principal Amount of each other Class of
Sequential Pay Certificates, if any, with an earlier alphabetical Class
designation.
"UNPAID PRINCIPAL BALANCE" means, with respect to any Mortgage
Loan (and any successor REO Loan), as of any date of determination, the Cut-off
Date Principal Balance of such Mortgage Loan, reduced (to not less than zero) by
the aggregate of (without duplication): (a) all payments, Insurance Proceeds,
Condemnation Proceeds, other Liquidation Proceeds, Repurchase Proceeds and, if
applicable, Net REO Income received on or in respect of such Mortgage Loan (or
any related REO Property) during the period subsequent to the Cut-off Date but
on or before such date of determination that were identified and applied by the
Servicer as recoveries of principal of such Mortgage Loan (or any successor REO
Loan) in accordance with Section 1.02(b), net of any portion thereof that
represents a Late Collection of principal due on or before the Cut-off Date; and
(b) the principal portion of any Realized Loss incurred in respect of such
Mortgage Loan (or any related REO Property) subsequent to the Cut-off Date but
on or before such date of determination; provided that, notwithstanding the
foregoing, if any Mortgage Loan is paid in full, or if a Final Recovery
Determination is made in respect of any Mortgage Loan or REO Property, or if any
Mortgage Loan or REO Property is purchased by the Depositor pursuant to Article
II hereof or otherwise removed from the Trust Fund, then the "Unpaid Principal
Balance" of such Mortgage Loan or, in the case of an REO Property, the related
REO Loan will be zero as of the date on which such payment in full, Final
Recovery Determination, purchase or other disposition occurred and as of each
date thereafter.
"U.S. PERSON" means 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 is subject to United States federal income tax regardless of
its source, 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 fiduciaries have the authority to control all substantial decisions of
the trust. The terms "United States", shall have the meaning set forth in
Section 7701 of the Code or successor provisions.
"VARIABLE INTEREST PAYMENT ADJUSTMENT" has the meaning set
forth in the definition of "PV Yield Loss Amount".
"VOTING RIGHTS" means the portion of the voting rights of all
of the Certificates which is allocated to any Certificate. At all times during
the term of this Agreement, 100% of the Voting Rights shall be allocated among
the Holders of the respective Classes of the Sequential Pay Certificates in
proportion to the respective Aggregate Certificate Principal Amounts of such
Classes of Certificates, and none of the Voting Rights shall be allocated among
40
<PAGE>
the Holders of the Class IO Certificates and/or the Holders of the 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 REPORT" means a report substantially in the form of
EXHIBIT H to the Servicing Agreement.
"WEIGHTED AVERAGE REMIC I REMITTANCE RATE" means, with respect
to any Distribution Date, the rate per annum equal to the weighted average,
expressed as a percentage and rounded to five decimal places, of the respective
REMIC I Remittance Rates for the REMIC I Regular Interests for such Distribution
Date, weighted on the basis of the respective Uncertified Principal Amounts of
such REMIC I Regular Interests outstanding immediately prior to such
Distribution Date.
"WEIGHTED AVERAGE REMIC II REMITTANCE RATE" means, with
respect to any Distribution Date, the rate per annum equal to the weighted
average, expressed as a percentage and rounded to five decimal places, of the
respective REMIC II Remittance Rates for the REMIC II Regular Interests for such
Distribution Date, weighted on the basis of the respective Uncertificated
Principal Amounts of such REMIC II Regular Interests outstanding immediately
prior to such Distribution Date.
Section 1.02 CALCULATIONS RESPECTING THE MORTGAGE POOL.
(a) Calculations required to be made pursuant to this
Agreement with respect to any Mortgage Loan, REO Loan or REO Property shall be
made based upon current information as to the terms of the Mortgage Loans and
REO Loans and reports of payments received from the Servicer or the Special
Servicer on the Mortgage Loans and the REO Properties and payments to be made to
the Trustee (or the Paying Agent) as supplied to the Trustee (or the Paying
Agent) by the Servicer or the Special Servicer. The Trustee shall not be
required to recompute, verify or recalculate the information supplied to it by
the Servicer or the Special Servicer. To the extent that it is not patently
incorrect on its face, such information or accounting may be conclusively relied
upon by the Trustee (or the Paying Agent) in making such calculations.
(b) Amounts collected on any Group of related
Cross-Collateralized Mortgage Loans in the form of payments from Mortgagors,
Insurance Proceeds, Condemnation Proceeds and other Liquidation Proceeds, shall
be applied by the Servicer among such Mortgage Loans in accordance with the
express provisions of the related Mortgage Loan documents and, in the absence of
such express provisions, in accordance with the Accepted Servicing Practices.
All amounts collected on any Mortgage Loan (whether or not such Mortgage Loan is
a CrossCollateralized Mortgage Loan) in the form of payments from Mortgagors,
Insurance Proceeds, Condemnation Proceeds and other Liquidation Proceeds, shall
be applied to amounts due and owing under the related Mortgage Loan documents
(including, without limitation, for principal and accrued and unpaid interest)
in accordance with the express provisions of such documents and, in the absence
of such express provisions, shall be applied by the Servicer (after
reimbursement to the Trustee, the Fiscal Agent and the Servicer for any related
Servicing Advances and, if applicable, payment of any related Liquidation
Expenses): FIRST, as a recovery
41
<PAGE>
of amounts to be currently applied to the payment of, or escrowed for the future
payment of, real estate taxes, assessments, insurance premiums and similar
items; SECOND, as a recovery of Reserve Funds to the extent then required to be
held in escrow; THIRD, as a recovery of accrued and unpaid interest on such
Mortgage Loan at the related Mortgage Rate in effect from time to time through
the date of receipt (or, in the case of a full Scheduled Payment from any
Mortgagor, through the related Due Date); FOURTH, 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 and such
other amounts as the related Mortgagor has instructed be applied to principal or
the Servicer has applied to principal pursuant to the terms of the related
Mortgage Note and Mortgage; FIFTH, as a recovery of any Prepayment Premiums due
and owing under such Mortgage Loan; SIXTH, in accordance with Accepted Servicing
Practices, as a recovery of any other amounts then due and owing under such
Mortgage Loan, including, without limitation, Default Interest and late payment
charges; and SEVENTH, as a recovery of any remaining principal of such Mortgage
Loan to the extent of its entire remaining Unpaid Principal Balance. All amounts
collected on any REO Property in the form of income, Insurance Proceeds,
Condemnation Proceeds and other Liquidation Proceeds (exclusive of amounts to be
applied to the payment of, or to be reimbursed to the Servicer, the Fiscal Agent
or the Trustee for the payment of, the costs of operating, managing, maintaining
and disposing of such REO Property) shall be treated by the Servicer: FIRST, as
a recovery of accrued and unpaid interest on the related REO Loan at the related
Mortgage Rate in effect from time to time to but not including the Due Date in
the Collection Period of receipt; SECOND, as a recovery of principal of the
related REO Loan to the extent of its entire Unpaid Principal Balance; THIRD, as
a recovery of any Prepayment Premiums due and owing under the related REO Loan;
and FOURTH, in accordance with Accepted Servicing Practices, as recovery of any
other amounts due and owing in respect of the related REO Loan, including,
without limitation, Default Interest and late payment charges. All amounts
collected on any Mortgage Loan or REO Property in the form of Repurchase
Proceeds shall be applied by the Servicer (after reimbursement to the Trustee,
the Fiscal Agent and the Servicer for any related Servicing Advances and net of
any portion of such proceeds paid to cover Additional Trust Fund Expenses
attributable to such Mortgage Loan or REO Property): FIRST, as a recovery of
accrued and unpaid interest on such Mortgage Loan or, in the case of an REO
Property, the related REO Loan at the related Mortgage Rate (net of any
applicable Retained Yield Rate) in effect from time to time to but not including
the Due Date in the Collection Period of receipt; and SECOND, as a recovery of
principal of such Mortgage Loan or, in the case of an REO Property, the related
REO Loan to the extent of its entire Unpaid Principal Balance.
(c) If the amount allocated for any month to interest in
respect of a Mortgage Loan with Retained Yield is less than the full amount of
accrued and unpaid interest due on such Mortgage Loan, such lesser amount will
be allocated between the Retained Yield Holder and the Trust in accordance with
the related Retained Yield Document; provided, however, that the amount so
allocated to the Trust shall be distributed in accordance with the provisions
of, and the priorities set forth in, the Transaction Documents.
42
<PAGE>
ARTICLE II
DECLARATION OF TRUST FUND;
ISSUANCE OF CERTIFICATES;
REPRESENTATIONS AND WARRANTIES
Section 2.01 CREATION AND DECLARATION OF TRUST FUND;
CONVEYANCE OF MORTGAGE LOANS.
(a) Concurrently with the execution and delivery of
this Agreement;
(i) the Depositor does hereby transfer,
assign, set over, deposit with and otherwise convey to the Trustee,
without recourse, in trust, all the right, title and interest of the
Depositor, whether now owned or hereafter acquired, in and to the
Mortgage Loans identified on the Mortgage Loan Schedule, as amended
from time to time, all payments of principal and interest (exclusive of
any portion thereof constituting Retained Yield) due with respect to
the Mortgage Loans after the Cut-Off Date (whether or not yet
received), all Principal Prepayments and, exclusive of any portion
thereof constituting Retained Yield, Prepayment Premiums received with
respect to the Mortgage Loans after the Cut-Off Date, any REO
Properties, all Insurance Proceeds, Condemnation Proceeds and other
Liquidation Proceeds (exclusive of any portion thereof constituting
Retained Yield) received with respect to the Mortgage Loans and any REO
Properties after the Cut-Off Date, and all other proceeds (exclusive of
any portion thereof constituting Retained Yield) received with respect
to the Mortgage Loans and any REO Properties after the Cut-Off Date,
together with all of its right, title and interest in and to all
amounts (exclusive of Retained Yield) held from time to time in and the
proceeds of the respective Accounts to the extent provided for in the
Transaction Documents and in and to any Insurance Policies related to
the Mortgage Loans, to have and to hold, in trust; and
(ii) the Trustee does hereby declare that,
subject to the review provided for in Section 2.02, it has received and
shall hold the Trust Fund as Trustee, in trust, for the benefit and use
of the Holders of the Certificates and for the purposes and subject to
the terms and conditions set forth in the Transaction Documents. The
Trustee is hereby authorized to release Mortgage Files and/or documents
therefrom to the Servicer as contemplated in Section 4.07 of the
Servicing Agreement and to the Special Servicer as contemplated in
Section 4.06 of the Special Servicing Agreement.
It is intended that the conveyance of the Mortgage Loans by
the Depositor to the Trustee as provided in this Section 2.01(a) be, and be
construed as, a sale of the Mortgage Loans by the Depositor 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 to the
Trustee to secure a debt or other obligation of the Depositor. However, in the
event that the Mortgage Loans are held to be property of the Depositor, or if
for any reason this Agreement is held or deemed to create a security interest in
the Mortgage Loans, then it is intended that: (i) this Agreement shall also be
deemed to be a security agreement within the
43
<PAGE>
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 2.01(a) shall be deemed to be (A) a
grant by the Depositor to the Trustee of a security interest in all of its right
(including the power to convey title thereto), title and interest, whether now
owned or hereafter acquired, in and to (1) the Mortgage Notes, the Mortgages,
the Insurance Policies and all other documents in the related Mortgage Files,
(2) all amounts (other than Retained Yield) payable to the holders of the
Mortgage Loans in accordance with the terms thereof after the Cut-off Date and
(3) 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 any Account,
whether in the form of cash, instruments, securities or other property, and (B)
an assignment by the Depositor to the Trustee of any security interest in any
and all of the Seller's right (including the power to convey title thereto),
title and interest, whether now owned or hereafter acquired, in and to the
property described in the foregoing clauses (A)(1) through (3) granted by the
Seller to the Depositor pursuant to the Mortgage Loan Purchase Agreement of even
date herewith between such parties (the "MORTGAGE LOAN PURCHASE AGREEMENT");
(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, Sections 9-305, 8-313 or 8-321
thereof); and (iv) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the Trustee
for the purpose of perfecting such security interest under applicable law. The
Depositor 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 the Agreement. In this regard,
the Depositor shall file or cause to be filed, as a precautionary filing, a Form
UCC-1 substantially in the form of EXHIBIT E hereto in all appropriate locations
in the State of New York promptly following issuance of the Certificates, and
the Servicer shall prepare and file at each such office, and the Trustee shall
execute, continuation statements with respect to thereto, in each case within
six months prior to the fifth anniversary of the immediately preceding filing.
The Depositor shall cooperate in a reasonable manner with the Trustee and the
Servicer in preparing and filing such continuation statements. This Section
2.01(a) shall constitute notice to the Trustee pursuant to the requirements of
Section 9-305 the New York Uniform Commercial Code.
(b) In connection with such transfer and assignment
of the Mortgage Loans, the Depositor does hereby deliver to, and deposit with,
or cause to be delivered to and deposited with, the Trustee, or the Custodian
acting on the Trustee's behalf, if applicable, the following documents or
instruments with respect to each Mortgage Loan so transferred and assigned:
44
<PAGE>
(i) The original Mortgage Note, endorsed in
blank or to "LaSalle National Bank, as trustee for LB
Commercial Conduit Mortgage Trust II, Multiclass
Pass-Through Certificates, Series 1996-C2, without
recourse," together with all intervening endorsements
showing an unbroken chain of endorsement from the
originator of the Mortgage Loan to the Person so
endorsing;
(ii) Each original Mortgage, with evidence
of recording thereon, and, if any such Mortgage was
executed pursuant to a power of attorney, the
original of such power of attorney, with evidence of
recording thereon, or (A) if any such original
Mortgage or power of attorney has not been returned
from the applicable public recording office due to a
delay caused by the public recording office, a true
and correct copy thereof, together with an Officer's
Certificate of the Seller or the Depositor stating
that such original Mortgage and/or power of attorney
has been sent to the appropriate public recording
office for recordation, or (B) if any such original
Mortgage or power of attorney has been lost after
recordation or has been retained by the public
recording office, a copy thereof, certified by the
appropriate public recording office where such
document is recorded to be a true and complete copy
of the recorded original of such Mortgage or power of
attorney, as the case may be;
(iii) The originals of all modification,
consolidation and extension agreements, if any, with
evidence of recording thereon, or (A) if any such
original modification, consolidation or extension
agreement has not been returned from the applicable
public recording office due to a delay caused by the
public recording office, a true and correct copy
thereof, together with an Officer's Certificate of
the Seller or the Depositor stating that such
original modification, consolidation or extension
agreement has been sent to the appropriate public
recording office for recordation, or (B) if any such
original modification, consolidation or extension
agreement has been lost after recordation or has been
retained by the public recording office, a copy
thereof, certified by the appropriate public
recording office where such document is recorded to
be a true and complete copy of the recorded original
of such modification, consolidation or extension
agreement;
(iv) An original assignment of each
Mortgage, in recordable form, signed by the holder of
record in blank or in favor of "LaSalle National
Bank, as trustee for LB Commercial Conduit Mortgage
Trust II, Multiclass Pass-Through Certificates,
Series 1996-C2";
(v) Originals of all intervening assignments
of each Mortgage, with evidence of recording thereon
and showing a complete chain of assignment from the
originator of the Mortgage Loan to the holder of
record, or (A) if any such original intervening
assignment of such Mortgage has not been returned
from the applicable public recording
45
<PAGE>
office due to a delay caused by the public recording
office, a true and correct copy thereof, together
with an Officer's Certificate of the Seller or the
Depositor stating that such original intervening
assignment of such Mortgage has been sent to the
appropriate public recording office for recordation,
or (B) if any such original intervening assignment of
such Mortgage has been lost after recordation or has
been retained by the public recording office, a copy
thereof, certified by the appropriate public
recording office where such assignment is recorded to
be a true and complete copy of the recorded original
of such intervening assignment of such Mortgage;
(vi) If any related Assignment of Leases is
separate from the corresponding Mortgage, the
original version of such Assignment of Leases with
evidence of recording thereon, or (A) if such
Assignment of Leases has not been returned from the
applicable public recording office due to a delay
caused by the public recording office, a true and
correct copy thereof, together with an Officer's
Certificate of the Seller or the Depositor stating
that such original Assignment of Leases has been sent
to the appropriate public recording office for
recordation, or (B) if such original Assignment of
Leases has been lost after recordation or has been
retained by the public recording office, a copy
thereof, certified by the appropriate public
recording office where such document is recorded to
be a true and complete copy of the recorded original
of such Assignment of Leases;
(vii) If any related Assignment of Leases is
separate from the corresponding Mortgage, an original
assignment of such Assignment of Leases, in
recordable form, signed by the holder of record in
blank or in favor of "LaSalle National Bank, as
trustee for LB Commercial Conduit Mortgage Trust II,
Multiclass Pass-Through Certificates, Series
1996-C2", which assignment may be effected in the
related assignment of the corresponding Mortgage
referred to in clause (b)(iv) above;
(viii) If any related Assignment of Leases
is separate from the corresponding Mortgage,
originals of all intervening assignments of such
Assignment of Leases (which in each case may be
effected in the related intervening assignment of the
corresponding Mortgage referred to in clause (b)(v)
above), with evidence of recording thereon and
showing a complete chain of assignment from the
originator of the Mortgage Loan to the holder or
record, or (A) if any such original intervening
assignment of such Assignment of Leases has not been
returned from the applicable public recording office
due to a delay caused by the public recording office,
a true and correct copy thereof, together with an
Officer's Certificate of the Seller or the Depositor
stating that such original intervening assignment of
such Assignment of Leases has been sent to the
appropriate public recording office for recordation,
or (B) if any such original intervening assignment of
such Assignment of Leases has been
46
<PAGE>
lost after recordation or has been retained by the
public recording office, a copy thereof, certified by
the appropriate public recording office where such
assignment is recorded to be a true and complete copy
of the recorded original of such intervening
assignment of such Assignment of Leases;
(ix) The original of each guaranty
constituting additional security for the repayment of
such Mortgage Loan, together with (A) each original
intervening assignment of such item of additional
security showing a complete chain of assignment from
the original beneficiary of such item to the holder
of record and (B) an original assignment of such item
of additional security signed by the holder of record
in blank or in favor of the Trustee for the benefit
of the Holders of the Certificates;
(x) The original Title Insurance Policy or
in the event such original Title Insurance Policy is
unavailable, any one of an original title binder, an
original title commitment or a copy of such policy
certified by the title company; and
(xi) An original assignment of each recorded
or filed effective financing statement, in form and
substance acceptable for recording or filing, as
appropriate, signed by the secured party currently
designated of record in blank or in favor of "LaSalle
National Bank, as trustee for LB Commercial Conduit
Mortgage Trust II, Multiclass Pass-Through
Certificates, Series 1996-C2";
provided that, notwithstanding anything herein to the contrary, in the case of a
Group of CrossCollateralized Mortgage Loans, if there is only one original of
any document referred to above in respect of the entire such Group, delivery of
such original or a copy of such document in accordance with the applicable
clause of (b)(i) through (b)(xi) above with respect to any of the
Cross-Collateralized Mortgage Loans in such Group shall be deemed to satisfy the
delivery requirements of this Section 2.01(b) with respect to all the
Cross-Collateralized Mortgage Loans in such Group.
The parties hereto acknowledge and agree that the forms of
endorsement and assignment set forth in subsections (b)(i) and (b)(iv) above are
intended to effect the transfer to the Trustee, for the benefit of the Holders
of the Certificates, of the Mortgage Notes and the Mortgages.
(c) Within 30 days after the Closing Date, the
Trustee, at the Depositor's expense, shall cause the following documents and
instruments to be properly submitted for recordation in each public recording
office where the Mortgages are recorded: (i) each assignment of a Mortgage
referred to in Section 2.01(b)(iv); and (ii) each assignment of an Assignment of
Leases, if any, referred to in Section 2.01(b)(vii). If any such assignment of a
Mortgage or assignment of an Assignment of Leases is lost or returned unrecorded
because of a defect therein, the Trustee, upon becoming aware of such loss or
defect, shall promptly give written notice of such loss or defect to the
Depositor, and the Depositor shall promptly prepare
47
<PAGE>
a substitute therefor or use its best efforts to cure such defect, as the case
may be, and shall then return the same to the Trustee. The Trustee shall cause
the same to be properly submitted for recordation at the Depositor's expense.
The Depositor, shall, promptly upon receipt thereof, deliver or cause to be
delivered to the Trustee the original recorded Mortgage and, if applicable,
Assignment of Leases and any original recorded intervening assignments of such
documents, in those instances where a copy thereof was delivered to the Trustee.
(d) If, within one year after the Closing Date, any
assignment of a Mortgage referred to in Section 2.01(b)(iv) above or, if
applicable, any assignment of an Assignment of Leases referred to in Section
2.01(b)(vii) above, in each case with evidence of the recording of the Trustee's
interest thereon, or a copy (certified by the applicable public recording office
to be a true and correct copy) of such recorded assignment of a Mortgage or
assignment of an Assignment of Leases, is not delivered to the Trustee, the
Depositor shall repurchase the related Mortgage Loan from the Trust at the
applicable Purchase Price in the manner provided in Section 2.04. The Trustee,
upon notice or knowledge of any repurchase by the Depositor hereunder, shall
notify the Servicer of such repurchase by the Depositor pursuant to this Section
2.01(d). The repurchase obligation pursuant to this Section 2.01(d), which shall
be effected solely at the cost and expense of the Depositor, shall constitute
the sole recourse against the Depositor available to the Certificateholders or
the Trustee for failure of an assignment of a Mortgage referred to in Section
2.01(b)(iv) or, if applicable, any assignment of an Assignment of Leases
referred to in Section 2.01(b)(vii), to be recorded.
(e) In instances where anything other than a Title
Insurance Policy (or copy thereof) is delivered to the Trustee under Section
2.01(b)(x) above, the Depositor will provide an original of such Title Insurance
Policy in accordance with the terms of the commitment or binder to the Trustee
as promptly as practicable after the execution and delivery hereof but, in any
event, within 180 days of the Closing Date.
Section 2.02 ACCEPTANCE OF REMIC I BY TRUSTEE; REVIEW OF
MORTGAGE LOAN DOCUMENTATION.
(a) The Trustee, by execution and delivery hereof,
acknowledges receipt of the Mortgage Files by it or a Custodian on its behalf,
in good faith and without actual notice or knowledge of any adverse claim
pertaining to the Mortgage Loans listed on the Mortgage Loan Schedule, subject
to its or a Custodian's further review thereof under this Section 2.02. The
Trustee or a Custodian on its behalf shall execute and deliver on the Closing
Date the Initial Certification in the form annexed hereto as EXHIBIT B-1.
(b) Within 45 days after the Closing Date, the
Trustee or a Custodian on its behalf shall, for the benefit of Holders of the
Certificates, review each Mortgage File to ascertain that the documents
delivered pursuant to Section 2.01 appear on their face to contain the requisite
signatures by or on behalf of the respective parties thereto, and shall deliver
to the Depositor (with a copy to the Servicer) an Interim Certification in the
form annexed hereto as EXHIBIT B-2 to the effect that, as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan prepaid in
full or any Mortgage Loan specifically identified in such certification as not
covered by such certification), (i) all of the following documents are in its
possession: (A) all documents specified in clauses (i), (ii), (v) and (x) of
Section 2.01(b),
48
<PAGE>
and (B) documents specified in clauses (iii), (vi), (viii) and (ix) of Section
2.01(b) for those Mortgage Loans which the Depositor has notified the Trustee
or, if applicable, the Custodian, as having an assumption, modification,
consolidation, extension or substitution agreement, Assignment of Leases
separate from the corresponding Mortgage or any guaranty, but only as to
documents specifically described in such notice from the Depositor; (ii) the
documents specified in clause (iv) and, if applicable, clause (vii) of Section
2.01(b) have been submitted for recordation; (iii) all such documents referred
to in the preceding clauses (i) and (ii) have been reviewed by it and appear to
relate to such Mortgage Loan; and (iv) based on its examination and only as to
the foregoing documents, the information respecting such Mortgage Loan set forth
in items (i), (ii), (iii), (iv) and (v) of the Mortgage Loan Schedule, as
required by the "MORTGAGE LOAN SCHEDULE INFORMATION" attached as Schedule II
hereto, accurately reflects information set forth in the related Mortgage File,
to the extent that such information contained in items (i), (ii), (iii), (iv)
and (v) of the Mortgage Loan Schedule Information is ascertainable from the
documents delivered to the Trustee. The Trustee or a Custodian on its behalf
shall make sure that the documents delivered by the Depositor and constituting
the Mortgage File for each Mortgage Loan are executed and/or endorsed, as
appropriate, but shall be under no duty or obligation to inspect, review or
examine any such documents, instruments, certificates or other papers to
determine that the same are valid, binding, legally effective, properly
endorsed, genuine, enforceable or appropriate for the represented purpose or
that they have actually been recorded or are in recordable form or that they are
other than what they purport to be on their face. The Custodian shall have no
responsibility for verifying the genuineness or the legal effectiveness of or
authority for any signatures of or on behalf of any party or endorser.
(c) If the Trustee or a Custodian discovers any
document or documents constituting a part of a Mortgage File to be missing, not
to conform in any respect with the information set forth in items (i), (ii),
(iii), (iv) and (v) of Schedule II in a way which could adversely affect the
value of the related Mortgage Loan or the interests of the Certificateholders
therein, not to appear regular on its face (I.E., is mutilated, damaged,
defaced, torn or otherwise physically altered) or to appear to be unrelated to
the Mortgage Loans identified in the Mortgage Loan Schedule (collectively, a
"DEFECT"), the Trustee or a Custodian on its behalf shall promptly, but in all
events, within 10 days of such discovery (or, if such discovery occurs within
the 45-day period referred to in Section 2.02(b) above, then within such 45-day
period) identify the Mortgage Loan to which such Defect relates in the Interim
Certificate delivered to the Depositor. Within 75 days of its receipt of such
notice from the Custodian, if the relevant Defect materially adversely affects
the value of the related Mortgage Loan or the interests of the
Certificateholders therein, the Depositor shall cure such Defect (and, in such
event, the Depositor shall provide the Trustee with an Officer's Certificate
confirming that such cure has been effected) or, if it does not cure such
Defect, shall repurchase the related Mortgage Loan from the Trust at the
applicable Purchase Price in the manner provided in Section 2.04. Any
nonconforming or missing information or documents that could cause the
applicable Mortgage Loan not to constitute a Qualified Mortgage for purposes of
the REMIC Provisions shall be conclusively presumed to materially and adversely
affect the interests of Certificateholders. The repurchase obligation pursuant
to this Section 2.02(c), which shall be effected solely at the cost and expense
of the Depositor, shall constitute the sole recourse against the Depositor
available to Certificateholders or the Trustee for a Defect with respect to any
Mortgage File. The failure of the Trustee or the Custodian, if applicable, to
give the notice contemplated herein within 45 days after the execution of this
Agreement shall not affect or relieve the Depositor of its
49
<PAGE>
obligation to repurchase any Mortgage Loan pursuant to this Section 2.02(c) or
any other Section of this Agreement requiring the repurchase of Mortgage Loans
from the Trust Fund.
(d) On or about the first anniversary date of the
Closing Date, the Trustee or a Custodian on its behalf shall deliver to the
Depositor a Final Certification substantially in the form annexed hereto as
EXHIBIT B-3 (and shall deliver a copy of such Final Certification to the
Servicer).
Section 2.03 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.
(a) The Depositor hereby represents and warrants to the other parties hereto 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 governing its
creation and existence and has full corporate power and authority to
own its property, to carry on its business as presently conducted, to
enter into and perform its obligations under each of the Transaction
Documents, and to create the Trust pursuant hereto;
(ii) The execution and delivery by the Depositor of
the Transaction Documents, have been duly authorized by all necessary
corporate action on the part of the Depositor; neither the execution
and delivery of the Transaction Documents, nor the consummation of the
transactions contemplated in the Transaction Documents, nor compliance
with the provisions of the Transaction Documents, will conflict with or
result in a breach of, or constitute a default under, (A) any of the
provisions of any law, governmental rule, regulation, judgment, decree
or order binding on the Depositor or its properties, (B) the
organizational documents of the Depositor, or (C) the terms of any
indenture or other agreement or instrument to which the Depositor is a
party or by which it is bound; neither the Depositor nor any of its
Affiliates is a party to, bound by, or in breach or violation of any
indenture or other agreement or instrument, or subject to or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over it, which materially and adversely affects or, to the best
knowledge of the Depositor, may in the future materially and adversely
affect (X) the ability of the Depositor to perform its obligations
under any of the Transaction Documents or (Y) the business, operations,
financial condition, properties or assets of the Depositor;
(iii) The execution, delivery and performance by the
Depositor of the Transaction Documents and the consummation of the
transactions contemplated by the Transaction Documents do not require
the consent or approval of, the giving of notice to, the registration
with, or the taking of any other action in respect of, any state,
federal or other governmental authority or agency, except such as has
been obtained, given, effected or taken prior to the date hereof;
(iv) Each of the Transaction Documents has been duly
executed and delivered by the Depositor and, assuming due
authorization, execution and delivery by the Trustee, constitutes a
valid and binding obligation of the Depositor enforceable against it in
accordance with its terms subject, as to enforcement of remedies, to
50
<PAGE>
applicable bankruptcy, reorganization, insolvency, moratorium and other
similar laws affecting creditors' rights generally as from time to time
in effect, and to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law);
and
(v) There are no actions, suits or proceedings
pending or, to the best of the Depositor's knowledge, threatened or
likely to be asserted against or affecting the Depositor, before or by
any court, administrative agency, arbitrator or governmental body (A)
with respect to any of the transactions contemplated by the Transaction
Documents or (B) with respect to any other matter which in the judgment
of the Depositor will be determined adversely to the Depositor and
will, if determined adversely to the Depositor, materially and
adversely affect it or its business, assets, operations or condition,
financial or otherwise, or adversely affect its ability to perform its
obligations under the Transaction Documents.
It is understood and agreed that the representations and
warranties set forth in this Section 2.03(a) shall survive delivery of the
Mortgage Files to the Trustee and, if applicable, the Custodian and shall
continue through the term of this Agreement. Upon discovery by any of the
parties hereto of a breach of any of the foregoing representations and
warranties that materially and adversely affects the interests of the
Certificateholders or of any party hereto, the party discovering such breach
shall give prompt written notice to the other parties hereto and the Rating
Agencies.
(b) The Depositor hereby represents and warrants to the
Trustee for the benefit of the Certificateholders with respect to each Mortgage
Loan initially delivered to the Trustee under this Agreement, as of the Cut-Off
Date, unless otherwise specified therein, that:
(i) The information pertaining to each Mortgage Loan
set forth in the Mortgage Loan Schedule was true and correct in all
material respects as of the Cut-Off Date;
(ii) If such Mortgage Loan was originated by the
Seller or an Affiliate thereof, then, as of the date of its
origination, such Mortgage Loan complied in all material respects with,
or was exempt from, all requirements of federal, state or local law
relating to the origination of such Mortgage Loan; and, if such
Mortgage Loan was not originated by the Seller or an Affiliate thereof,
then, to the best of the Depositor's knowledge after having performed
the type of due diligence customarily performed by prudent
institutional commercial and multifamily mortgage lenders, as of the
date of its origination, such Mortgage Loan complied in all material
respects with, or was exempt from, all requirements of federal, state
or local law relating to the origination of such Mortgage Loan;
(iii) Except for any Retained Yield with respect to
such Mortgage Loan, the Depositor owns the Mortgage Loan, has good and
marketable title thereto, has full right and authority to sell, assign
and transfer the Mortgage Loan and is transferring the Mortgage Loan
free and clear of any and all liens, pledges, charges or security
interests of any nature encumbering such Mortgage Loan;
51
<PAGE>
(iv) The proceeds of such Mortgage Loan have been
fully disbursed and there is no requirement for future advances
thereunder;
(v) To the actual knowledge of the Depositor, each of
the related Mortgage Note, Mortgage(s), Assignment of Leases, if any,
and other agreements executed in connection therewith is the legal,
valid and binding obligation of the maker thereof (subject to any
non-recourse provisions therein and any state anti-deficiency
legislation), enforceable in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights
generally, and by general principles of equity (regardless of whether
such enforcement is considered in a proceeding in equity or at law),
and a legal opinion to such effect was obtained by the originator of
such Mortgage Loan at the time of origination;
(vi) As of the date of its origination, there was no
valid offset, defense, counterclaim or right to rescission with respect
to any of the related Mortgage Note, Mortgage(s) or other agreements
executed in connection therewith, and, as of the Cut-off Date, to the
actual knowledge of the Depositor, there is no valid offset, defense,
counterclaim or right to rescission with respect to such Mortgage Note,
Mortgage(s) or other agreements;
(vii) The assignment of the related Mortgage in favor
of the Trustee constitutes the legal, valid and binding assignment of
such Mortgage to the Trustee;
(viii) The related Mortgage (or, in the case of a
Cross-Collateralized Mortgage Loan, a related Mortgage) is a valid and
enforceable first lien on the related Mortgaged Property (or, in the
case of a Cross-Collateralized Mortgage Loan, the related Primary
Mortgaged Property), which Mortgaged Property is free and clear of all
encumbrances and liens having priority over or on a parity with the
first lien of such Mortgage, except for Permitted Encumbrances;
(ix) The Depositor has filed and/or recorded in all
appropriate public filing and recording offices all UCC-1 Financing
Statements necessary to create and perfect a security interest in and
lien on the items of personal property described therein (or, if not
filed and/or recorded, has submitted such UCC-1 Financing Statements
for filing and/or recording and such UCC-1 Financing Statements are in
form and substance acceptable for filing and/or recording), to the
extent perfection may be effected pursuant to applicable law by
recording or filing;
(x) All taxes and governmental assessments that prior
to the Cut-off Date became due and owing in respect of, and affect, the
related Mortgaged Property (or, in the case of a Cross-Collateralized
Mortgage Loan, the related Primary Mortgaged Property) have been paid,
or an escrow of funds in an amount sufficient to cover such payments
has been established;
(xi) As of the date of its origination, there was no
proceeding pending for the total or partial condemnation of the related
Mortgaged Property (or, in the case
52
<PAGE>
of a Cross-Collateralized Mortgage Loan, the related Primary Mortgaged
Property) that materially affects the value thereof, and such Mortgaged
Property was free of material damage; and, as of the Cut-off Date, to
the actual knowledge of the Depositor, there is no proceeding pending
for the total or partial condemnation of the related Mortgaged Property
(or, in the case of a Cross-Collateralized Mortgage Loan, the related
Primary Mortgaged Property) that materially affects the value thereof,
and such Mortgaged Property is free of material damage;
(xii) The related Mortgaged Property (or, in the case
of a CrossCollateralized Mortgage Loan, the related Primary Mortgaged
Property) is covered by an ALTA (or its equivalent) lender's title
insurance policy insuring that the related Mortgage (or, in the case of
a Cross-Collateralized Mortgage Loan, a related Mortgage) is a valid
first lien on such Mortgaged Property in the original principal amount
of the Mortgage Loan after all advances of principal, subject only to
the Permitted Encumbrances, or there is a binding commitment from a
title insurer qualified and licensed in the applicable jurisdiction, as
required, to issue such policy; such title insurance policy, if issued,
is in full force and effect, is freely assignable (subject to securing
the required assignment endorsement upon payment of premium therefor)
and (subject to the recordation of the appropriate assignment, the
securing of the required assignment endorsement and the payment of the
required premium therefor) will inure solely to the benefit of the
Trustee as Mortgagee of record, or any such commitment is a legal,
valid and binding obligation of such insurer; no claims have been made
under such title insurance policy, if issued; no prior Mortgagee has
done, by act or omission, anything which would materially impair the
coverage of any such title insurance policy;
(xiii) As of the date of its origination, all
insurance required under the Mortgage (or, in the case of a
Cross-Collateralized Mortgage Loan, a Mortgage), which insurance
covered such risks and was in such amounts as were customarily
acceptable to prudent commercial and multifamily mortgage lending
institutions lending on the security of property comparable to the
related Mortgaged Property in the jurisdiction in which such Mortgaged
Property is located, was in full force and effect with respect to the
related Mortgaged Property (or, in the case of a Cross-Collateralized
Mortgage Loan, the related Primary Mortgaged Property); and, as of the
Cut-off Date, to the actual knowledge of the Depositor, all insurance
required under the Mortgage (or, in the case of a Cross-Collateralized
Mortgage Loan, a Mortgage), which insurance covers such risks and is in
such amounts as are customarily acceptable to prudent commercial and
multifamily mortgage lending institutions lending on the security of
property comparable to the related Mortgaged Property in the
jurisdiction in which such Mortgaged Property is located, is in full
force and effect with respect to the related Mortgaged Property (or, in
the case of a Cross-Collateralized Mortgage Loan, the related Primary
Mortgaged Property); no notice of termination or cancellation with
respect to any such insurance policy has been received by the
Depositor;
53
<PAGE>
(xiv) Other than payments due but not yet 30 days or
more delinquent, to the best of the Depositor's knowledge, (A) there is
no material default, breach, violation or event of acceleration, and to
the actual knowledge of the Depositor there is no other default,
breach, violation or event of acceleration, existing under the related
Mortgage Note or the related Mortgage (or, in the case of a
Cross-Collateralized Mortgage Loan, the Mortgage on the related Primary
Mortgaged Property), and (B) there is no event which, with the passage
of time or with notice and the expiration of any grace or cure period,
would constitute a material default, breach, violation or event of
acceleration under any of the documents referred to in clause (A), and
to the actual knowledge of the Depositor there is no event which, with
the passage of time or with notice and the expiration of any grace or
cure period, would constitute any other default, breach, violation or
event of acceleration under any of the documents referred to in clause
(A); the Depositor has not waived any material default, breach,
violation or event of acceleration under any of the documents referred
to in clause (A), and to the Depositor's actual knowledge the Depositor
has not waived any other default, breach, violation or event of
acceleration under such documents; and under the terms of the Mortgage
Loan, the related Mortgage Note or the related Mortgage (or, in the
case of a Cross-Collateralized Mortgage Loan, the Mortgage on the
related Primary Mortgaged Property), no person or party other than the
Mortgagee may declare an event of default or accelerate the related
indebtedness under such Mortgage Loan, Mortgage Note or Mortgage,
except, in the case of a Cross-Collateralized Mortgage Loan, pursuant
to the cross-default and cross-collateralization provisions thereunder;
(xv) As of the Cut-off Date, no Mortgage Loan is, or
in the prior 12 months, has been, 30 days or more past due in respect
of any Scheduled Payment;
(xvi) The Mortgage Loan accrues interest (payable
monthly in arrears) at a fixed Mortgage Rate on the basis of a 360-day
year consisting of twelve 30-day months;
(xvii) To the actual knowledge of the Depositor, the
related Mortgage (or, in the case of a Cross-Collateralized Mortgage
Loan, the Mortgage on the related Primary Mortgaged Property) does not
provide for or permit, without the prior written consent of the holder
of the Mortgage Note, the related Mortgaged Property (or, in the case
of a Cross-Collateralized Mortgage Loan, the related Primary Mortgaged
Property) to secure any other promissory note or obligation expressly
described in such Mortgage other than another Mortgage Loan in the
Trust Fund;
(xviii) Such Mortgage Loan is or constitutes part of
a Qualified Mortgage;
(xix) One or more environmental site assessments were
performed by an environmental consulting firm Independent of the
Depositor and the Depositor's Affiliates with respect to the related
Mortgaged Property (or, in the case of a Cross-Collateralized Mortgage
Loan, the related Primary Mortgaged Property) during the 18-month
period preceding the Cut-off Date, and the Depositor, having made no
independent inquiry other than to review the report(s) prepared in
connection with the assessment(s) referenced
54
<PAGE>
herein, has no knowledge of any material and adverse environmental
condition or circumstance affecting such Mortgaged Property that was
not disclosed in such report(s);
(xx) The related Mortgage Note, Mortgage(s) and
Assignment of Leases, if any, contain customary and enforceable
provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the related Mortgaged
Property or Properties of the benefits of the security, including
realization by judicial or, if applicable, non-judicial foreclosure,
subject to applicable reorganization, insolvency, moratorium and other
similar laws affecting creditors' rights generally as from time to
time, in effect, and to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or
at law);
(xxi) To the best of the Depositor's knowledge, the
related Mortgagor is not a debtor in any bankruptcy, reorganization,
insolvency or comparable proceeding;
(xxii) Such Mortgage Loan is secured by a fee simple
interest in a commercial property or multifamily property owned by the
related Mortgagor, including all of the related Mortgagor's interest in
all improvements on the related Mortgaged Property;
(xxiii) Such Mortgage Loan does not provide for
negative amortization;
(xxiv) Such Mortgage Loan is a whole loan, contains
no equity participation by the lender or shared appreciation feature
and does not provide for any contingent or additional interest in the
form of participation in the cash flow of the related Mortgaged
Property;
(xxv) The related Mortgage contains provisions for
the acceleration of the payment of the unpaid principal balance of such
Mortgage Loan if, without the prior written consent of the mortgagee,
the related Mortgaged Property (or, in the case of a
Cross-Collateralized Mortgage Loan, the related Primary Mortgaged
Property), or any interest therein, is directly or indirectly
encumbered in connection with subordinate financing;
(xxvi) The related Mortgage contains either (A)
provisions for the acceleration of the payment of the unpaid principal
balance of such Mortgage Loan if the related Mortgaged Property (or, in
the case of a Cross-Collateralized Mortgage Loan, the related Primary
Mortgaged Property), or any interest therein, is directly or indirectly
transferred or sold without the prior written consent of the mortgagee,
or (b) provisions for the acceleration of the payment of the unpaid
principal balance of such Mortgage Loan if the related Mortgaged
Property (or, in the case of a Cross-Collateralized Mortgage Loan, the
related Primary Mortgaged Property), or any interest therein, is
directly or indirectly transferred or sold without the related
Mortgagor having satisfied certain conditions specified in the related
Mortgage with respect to permitted transfers;
55
<PAGE>
(xxvii) Except as to the Mortgage Loans made to
borrowers that are directly or indirectly controlled by Servico, Inc.
or an Affiliate of John Blanchard or an Affiliate of John Blanchard and
Sam Miller, Mortgage Loans representing no more than 5% of the
aggregate Cut-off Date Principal Balance of the Mortgage Pool have the
same Mortgagor or, to the best of the Depositor's knowledge, are to
Mortgagors which are Affiliates of each other;
(xxviii) Except as set forth in the related Mortgage
File, the terms of the related Mortgage Note and Mortgage(s) have not
been waived, modified, altered, satisfied, impaired, cancelled,
subordinated or rescinded in any manner which materially interferes
with the security intended to be provided by such Mortgage;
(xxix) In connection with the sale of such Mortgage
Loan to the Trust, all escrow deposits and escrow payments in the
possession or under the control of the Depositor or its agent will be
conveyed to the Trust;
(xxx) The related Mortgaged Property (or, in the case
of a Cross- Collateralized Mortgage Loan, the related Primary Mortgaged
Property) was inspected by or on behalf of the related originator
during the 12 month period prior to the related origination date;
(xxxi) Except for two of the Groups of
Cross-Collateralized Mortgage Loans, the related documents for which
provide that one or more of the individual hotels in each such Group
may be released from the lien of the related Mortgage provided that
certain specified conditions are met, the terms of the related Mortgage
do not provide for the release of any material portion of the related
Mortgaged Property from the lien of such Mortgage;
(xxxii) The related Mortgagor has covenanted in the
Mortgage Loan documents to maintain the related Mortgaged Property in
compliance with all applicable laws, zoning ordinances, rules,
covenants and restrictions affecting the construction, occupancy, use
and operation of such Mortgaged Property, and the related originator
performed the type of due diligence in connection with the origination
of such Mortgage Loan customarily performed by prudent institutional
commercial and multifamily mortgage lenders with respect to the
foregoing matters; the Depositor has received no notice of any material
violation of any applicable laws, zoning ordinances, rules, covenants
or restrictions affecting the construction, occupancy, use or operation
of such Mortgaged Property;
(xxxiii) The related Mortgagor has covenanted in the
Mortgage Loan documents to deliver each year to the Mortgagee an
operating statement of the related Mortgaged Property (or, in the case
of a Cross-Collateralized Mortgage Loan, the related Primary Mortgaged
Property) covering the twelve-month period identified therein; and
(xxxiv) The related Mortgagor has covenanted in its
organizational documents and/or the Mortgage Loan documents to own no
significant asset other than the related Mortgaged Property and assets
incidental to its ownership and operation of such Mortgaged Property.
56
<PAGE>
It is understood and agreed that the representations and
warranties set forth in this Section 2.03(b) shall survive delivery of the
Mortgage Files to the Trustee and the Custodian and shall continue throughout
the term of this Agreement. Upon discovery by any of the parties hereto of a
breach of any of the foregoing representations and warranties that materially
and adversely affects the value of any Mortgage Loan or the interests of the
Certificateholders therein, the party discovering such breach shall give prompt
written notice to the other parties and the Rating Agencies. Within 90 days of
its discovery or its receipt of notice of any such breach with respect to the
representations and warranties set forth in this Section 2.03(b), the Depositor
shall cure such breach in all material respects or, alternatively, shall
repurchase the affected Mortgage Loan (or any property acquired in respect
thereof) from the Trust at the applicable Purchase Price in the manner provided
in Section 2.04. The repurchase obligation pursuant to this Section 2.03(b),
which shall be effected solely at the cost and expense of the Depositor, shall
constitute the sole recourse against the Depositor available to
Certificateholders and the Trustee for a breach of any representation or
warranty set forth in this Section 2.03(b).
Section 2.04 REPURCHASE OF MORTGAGE LOANS.
(a) With respect to any Mortgage Loan (which, for the
purposes of this Section, shall include any property acquired in respect
thereof) required to be repurchased by the Depositor pursuant to this Article
II, the Depositor shall deliver or cause to be delivered to the Servicer cash
proceeds in an amount equal to the related Purchase Price, and the Servicer
shall, promptly following the receipt thereof, deposit such Repurchase Proceeds
in the Custodial Account. Upon the Trustee's receipt from the Servicer of a
certification to the effect that the Purchase Price for any Deleted Mortgage
Loan was properly calculated and the full amount thereof has been deposited in
the Custodial Account, the Trustee shall release or cause to be released and
reassign to the Depositor the related Mortgage File for the Deleted Mortgage
Loan and shall execute and deliver such instruments of transfer or assignment,
in each case without recourse, representation or warranty, as shall be necessary
to vest in the Depositor or its designee or assignee title (to the extent title
was delivered to the Trustee), to any Deleted Mortgage Loan released pursuant
hereto, free and clear of all security interests, liens and other encumbrances
created by this Agreement (other than the interests of any Retained Yield
Holder), which instruments shall be prepared by the Servicer at the Depositor's
expense and shall be reasonably acceptable to the Depositor and the Trustee, and
the Trustee shall have no further responsibility with respect to the Mortgage
File relating to such Deleted Mortgage Loan. The Servicer shall amend the
Mortgage Loan Schedule to reflect the removal of the Deleted Mortgage Loan from
the terms of this Agreement (and, if and when appropriate, to reflect any other
liquidation, payment in full or removal from the Trust Fund of any Mortgage Loan
or REO Property), and shall forward a copy thereof to each other party hereto.
Any repurchase by the Depositor of a Mortgage Loan hereunder shall be deemed to
include the right to receive any payment of principal and interest thereon
payable after the date on which such repurchase is effected. The Trustee shall
identify in writing any such payments of principal and interest on the Mortgage
Loans to the Paying Agent, and the Paying Agent shall, upon receipt of any such
payment, promptly remit the amount of such payment to the Depositor.
(b) In connection with any repurchase of a
Cross-Collateralized Mortgage Loan contemplated by this Section 2.04, and
notwithstanding anything herein to the contrary, if related Cross-Collateralized
Mortgage Loans secured by mortgage liens on the same
57
<PAGE>
Mortgaged Properties are to remain part of the Trust Fund, the parties hereto
shall execute, acknowledge and deliver all such additional documents and
instruments and do or cause to be done at the Depositor's expense all such
further acts and things as may be reasonably necessary to eliminate the
cross-collateralization of such Cross-Collateralized Mortgage Loan being
repurchased with each such other Cross-Collateralized Mortgage Loan remaining in
the Trust Fund. If, however, the Servicer shall determine that such repurchase
and the corresponding severance of the cross-collateralization between the
Cross-Collateralized Mortgage Loan to be repurchased and the related
Cross-Collateralized Mortgage Loans that are to remain in the Trust Fund, is not
(as evidenced in writing to the Trustee) in the best interests of the
Certificateholders, then the Servicer may direct the Depositor not to repurchase
the CrossCollateralized Mortgage Loan that it is otherwise required to
repurchase, provided that if such direction is given, the applicable Defect or
breach giving rise to the repurchase obligation shall be deemed to have been
cured in all respects.
(c) The Depositor shall, at its own expense, enforce
its rights under the Mortgage Loan Purchase Agreement.
Section 2.05 ISSUANCE OF CLASS R-I CERTIFICATES; CREATION OF
REMIC I REGULAR INTERESTS. Concurrently with the assignment to the Trustee of
the assets included in REMIC I, and in exchange therefor, at the direction of
the Depositor, the REMIC I Regular Interests have been created hereunder and the
Trustee has executed, authenticated and delivered to or upon the order of the
Depositor, the Class R-I Certificates in authorized denominations. The interests
evidenced by the Class R-I Certificates, together with the REMIC I Regular
Interests, constitute the entire beneficial ownership of REMIC I. The rights of
the Class R-I Certificateholders and REMIC II to receive distributions from the
proceeds of REMIC I in respect of the Class R-I Certificates and the REMIC I
Regular Interests, respectively, and all ownership interests of the Class R-I
Certificateholders and REMIC II in such distributions, shall be as set forth in
this Agreement.
Section 2.06 CONVEYANCE OF REMIC I REGULAR INTERESTS;
ACCEPTANCE OF REMIC II BY THE TRUSTEE.
The Depositor, as of the Closing Date, and
concurrently with the execution and delivery of this Agreement, 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 Class
R-II and REMIC III Certificateholders. 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
Class R-II and REMIC III Certificateholders.
Section 2.07 ISSUANCE OF CLASS R-II CERTIFICATES; CREATION OF
REMIC II REGULAR INTERESTS.
Concurrently with the assignment to the Trustee of the REMIC I
Regular Interests, and in exchange therefor, at the direction of the Depositor,
the REMIC II Regular Interests have been created 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.
58
<PAGE>
The interests evidenced by the Class R-II Certificates, together with the REMIC
II Regular Interests, constitute the entire beneficial ownership of REMIC II.
The rights of the Class R-II Certificateholders and REMIC III to receive
distributions from the proceeds of REMIC II in respect of the Class R-II
Certificates and the REMIC II Regular Interests, respectively, and all ownership
interests of the Class R-II Certificateholders and REMIC III in and to such
distributions, shall be as set forth in this Agreement.
Section 2.08 CONVEYANCE OF REMIC II REGULAR INTERESTS;
ACCEPTANCE OF REMIC III BY TRUSTEE.
The Depositor, as of the Closing Date, and concurrently with
the execution and delivery of this Agreement, 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 REMIC III
Certificateholders. 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 REMIC III
Certificateholders.
Section 2.09 ISSUANCE OF REMIC III CERTIFICATES.
Concurrently with the assignment to it of the REMIC II Regular
Interests, and in exchange therefor, at the 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 REMIC III Certificateholders 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 REMIC III Certificateholders in such
distributions, shall be as set forth in this Agreement.
Section 2.10 RETAINED YIELD.
(a) The related Retained Yield Holder's right to
receive the Retained Yield with respect to any Mortgage Loan shall be absolute
and unconditional. Any Retained Yield Holder's right to receive its Retained
Yield shall not be subject to offset or counterclaim, whether or not such right
has been assigned in whole or in part, notwithstanding any breach of any
representation or warranty of the Depositor under this Agreement or any default
by the Depositor of any of its obligations or covenants under this Agreement.
Each Retained Yield Holder shall have the right to assign any or all of its
rights in and to its Retained Yield in respect of a Mortgage Loan without the
consent of any party hereto, any Certificateholder or any subsequent owner and
holder of such Mortgage Loan or the holder of any beneficial ownership interest
therein; provided that each Retained Yield Holder is to provide to the Trustee
written notice of any transfer of its Retained Yield with respect to a Mortgage
Loan.
(b) Except as expressly provided in the definition of
"Retained Yield", no Retained Yield Holder shall be entitled to any late payment
fees or penalty interest received in connection with any Mortgage Loan.
59
<PAGE>
(c) The Trust shall not, and no party hereto shall
cause the Trust to, sell, pledge, assign or dispose of any Mortgage Loan with
Retained Yield except subject to the related Retained Yield Holder's interest in
and right to such Retained Yield and the corresponding rights under the
agreement pursuant to which such Retained Yield was created.
(d) The Trustee, the Servicer and the Special
Servicer shall, with respect to any Mortgage Loan with Retained Yield, provide
to the related Retained Yield Holder (but no other Retained Yield Holder) any
and all reports (including monthly Distribution Date Statements) regarding the
performance of such Mortgage Loan that are provided to the Certificateholders.
Each Retained Yield Holder shall be a third party beneficiary under this
Agreement for purposes of enforcing its right to its Retained Yield in
accordance with the terms hereof and enforcing the right to receive such
reports.
(e) To the extent received from the Servicer, the
Trustee shall remit or cause the remittance of any Retained Yield received with
respect to any Mortgage Loan to the related Retained Yield Holder pursuant to
such reasonable arrangements as may be entered into between the Trustee and such
Retained Yield Holder.
(f) If any Mortgage Loan with Retained Yield is
repurchased by the Depositor pursuant to Article II or otherwise sold or
disposed of by the Trust, the Depositor or such other future owner shall be
responsible for remitting to the related Retained Yield Holder all such Retained
Yield received subsequent to the date on which such Mortgage Loan is removed
from the Trust Fund.
60
<PAGE>
ARTICLE III
THE CERTIFICATES
Section 3.01 THE CERTIFICATES.
(a) The Certificates will be substantially in the
respective forms annexed hereto as Exhibit A-1, A-2, A-3, A-4, A-5, A-6, A-7,
A-8, A-9, A-10, A-11, A-12 and A-13. The Certificates will be issuable in
registered form only; provided that in accordance with Section 3.06 beneficial
ownership interests in the Class A, Class B, Class C, Class D and Class E
Certificates shall initially be held and transferred through the book-entry
facilities of the Depository. The Class A, Class B, Class C, Class D and Class E
Certificates will be issued in minimum denominations of $10,000 initial
Certificate Principal Amount and in integral multiples of $1 in excess thereof.
The Class F, Class G, Class H and Class J Certificates will be issued in minimum
denominations of $500,000 initial Certificate Principal Amount and in integral
multiples of $1 in excess thereof. The Class IO Certificates will be issued in
minimum denominations of $500,000 initial Certificate Notional Amount and in
integral multiples of $1 in excess thereof. One Certificate of each such Class
may be issued in a different denomination. The Residual Certificates shall be
issued in minimum denominations of 10%, and in integral multiples of 1% in
excess thereof.
(b) Each Certificate shall, on original issue, be
authenticated by the Trustee or the Authenticating Agent upon the order of the
Depositor. No Certificate shall be entitled to any benefit under this Agreement,
or be valid for any purpose, unless there appears on such Certificate a
certificate of authentication substantially in the form provided for herein,
executed by an authorized officer of the Trustee or the Authenticating Agent, if
any, by manual signature, and such certification upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. At any time and from time to time after the execution
and delivery of this Agreement, the Depositor may deliver Certificates to the
Trustee for authentication and the Trustee or the Authenticating Agent shall
authenticate and deliver such Certificates as in this Agreement provided and not
otherwise. In the event that additional Certificates need to be prepared at any
time subsequent to the Closing Date, the Depositor shall prepare, or cause to be
prepared, and deliver, or cause to be delivered, at the Depositor's expense, any
such additional Certificates. With respect to the Class A, Class B, Class C,
Class D and Class E Certificates, on the Closing Date the Trustee or the
Authenticating Agent upon the order of the Depositor shall authenticate
Book-Entry Certificates that are issued to a Clearing Agency or its nominee as
provided in Section 3.06 against payment of the purchase price thereof.
Section 3.02 REGISTRATION. The Trustee shall initially be the
registrar (the "CERTIFICATE REGISTRAR") in respect of the Certificates who shall
maintain books for the registration and for the transfer of Certificates (the
"CERTIFICATE REGISTER") and shall perform each of the obligations of the
Certificate Registrar set forth herein. The Trustee may appoint, by a written
instrument delivered to the other parties hereto, any other bank or trust
company to act as Certificate Registrar under such conditions as the Trustee may
prescribe, provided that the
61
<PAGE>
Trustee shall not be relieved of any of its duties or responsibilities hereunder
as Certificate Registrar by reason of such appointment and the appointee agrees
to perform each of the obligations of the Certificate Registrar set forth
herein. 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 Servicer and the Special
Servicer 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.
Section 3.03 TRANSFER AND EXCHANGE OF CERTIFICATES.
(a) A Certificate may be transferred by the Holder
thereof only upon presentation and surrender of such Certificate at the New York
Presenting Office duly endorsed or accompanied by an assignment duly executed by
such Holder or his duly authorized attorney in such form as shall be
satisfactory to the Certificate Registrar. Upon the transfer of any Certificate
in accordance with the preceding sentence, the Trustee shall execute, and the
Trustee or any Authenticating Agent shall authenticate and deliver to the
transferee, one or more new Certificates of the same Class, in authorized
denominations, evidencing in the aggregate the same aggregate Certificate
Principal Amount or aggregate Certificate Notional Amount or aggregate
Percentage Interest in the relevant Class, as the case may be, as the
Certificate being transferred.
(b) A Certificate may be exchanged by the Holder
thereof for any number of new Certificates of the same Class, in authorized
denominations, representing in the aggregate the same aggregate Certificate
Principal Amount or aggregate Certificate Notional Amount or aggregate
Percentage Interest in the relevant Class, as the case may be, as the
Certificate surrendered, upon surrender of the Certificate to be exchanged at
the New York Presenting Office duly endorsed or accompanied by a written
instrument of transfer duly executed by such Holder or his duly authorized
attorney in such form as is satisfactory to the Certificate Registrar.
Certificates delivered upon any such exchange will evidence the same
obligations, and will be entitled to the same rights and privileges, as the
Certificates surrendered.
(c) No transfer of a Non-Registered Certificate shall
be made unless such transfer is made pursuant to an effective registration
statement or otherwise in accordance with the requirements under the 1933 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. If such a transfer (other than one by the Depositor or an
Affiliate thereof) is to be made without registration under the 1933 Act, the
Certificate Registrar shall not register such transfer unless the transferor
and/or transferee deliver either (i) a certification of the transferor
substantially in the form of Exhibit C-1 attached hereto, or (ii) a
certification of the transferor substantially in the form of Exhibit C-2
attached hereto and a certification of the transferee substantially in the form
of Exhibit C-3 attached hereto, or (iii) an Opinion of Counsel, in form and
substance reasonably satisfactory to the Certificate Registrar and the
Depositor, to the effect that such transfer may be made pursuant to an exemption
from registration under the 1933 Act, describing the applicable exemption and
the basis therefor, which Opinion of Counsel shall not be an expense of the
Certificate Registrar, the Depositor, the Servicer, the Special Servicer or the
Trustee in its respective capacity as such, and which Opinion of Counsel shall
be
62
<PAGE>
accompanied by a certification of the transferor and/or the transferee, in form
and substance reasonably satisfactory to the Certificate Registrar, setting
forth the facts surrounding such transfer. In each case, the Certificate
Registrar will be entitled without further investigation to rely upon such
Opinion of Counsel or certification. Any Holder of a Non-Registered Certificate
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Certificate Registrar, the Trustee, the Fiscal Agent, the Servicer, the Special
Servicer and the Depositor 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.
None of the Depositor, the Trustee, the Fiscal Agent, the Servicer, the Special
Servicer or the Certificate Registrar is under an obligation to register or
qualify any Non-Registered Certificate under the 1933 Act or any other
securities law.
Each Non-Registered Certificate shall bear a legend describing
or referencing the restrictions on transferability set forth in this Section
3.03(c).
(d) No transfer of a Class B, Class C, Class D or
Class E Certificate or any interest therein shall be made (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, as trustee of, or with assets of a Plan, unless the
purchase and holding 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 Class Exemption 95-60. No transfer of any
other Subordinate Certificate or any interest therein shall be made (i) to 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, as trustee
of, or with assets of a Plan, unless the prospective transferee provides the
Certificate Registrar with a certification of facts and an Opinion of Counsel
which establish to the satisfaction of the Certificate Registrar that such
transfer will not result in a violation of Section 406 of ERISA or Section 4975
of the Code or cause the Servicer, the Special Servicer, the Fiscal Agent or the
Trustee to be deemed a fiduciary of such Plan or result in the imposition of an
excise tax under Section 4975 of the Code. Each Person who acquires any
Subordinate Certificate or interest therein (unless it shall have delivered the
certification of facts and Opinion of Counsel referred to in the preceding
sentence) shall be deemed to have represented and certified to the Depositor,
the Servicer, the Special Servicer, the Trustee, any Sub-Servicer and each
Mortgagor that it is neither a Plan nor any Person who is directly or indirectly
purchasing such Subordinate Certificate or interest therein on behalf of, as
named fiduciary of, as trustee of, or with assets of a Plan or, alternatively,
but solely in the case of a Class B, Class C, Class D or Class E Certificate or
an interest therein, that the purchase and holding of such Certificate or
interest therein by such Person is exempt from the prohibited transaction
provisions of Section 406 of ERISA and Section 4975 of the Code on the basis of
Prohibited Transaction Class Exemption 95-60.
Each Subordinate Certificate shall bear a legend describing or
referencing the restrictions on transferability set forth in this Section
3.03(d).
63
<PAGE>
(e) In addition to the foregoing and notwithstanding
anything to the contrary contained herein, no Residual Certificate may be owned,
pledged or transferred, directly or indirectly, by or to a Disqualified
Organization or a non-U.S. Person.
Prior to and as a condition of the registration of any
transfer, sale or other disposition of a Residual Certificate, the proposed
transferee, including the initial Residual Certificateholder, shall deliver to
the Certificate Registrar an affidavit in substantially the form attached hereto
as EXHIBIT D representing and warranting, among other things, that such
transferee is a Permitted Transferee and that no purpose of the acquisition of
the Residual Certificate is to impede the assessment or collection of tax. In
addition, the Certificate Registrar may (but shall have no obligation to and
shall not in the case of a transfer by the Depositor or any Affiliate thereof)
require, prior to and as a condition of any such transfer, the delivery by the
proposed transferee of an Opinion of Counsel, satisfactory in form and substance
to the Certificate Registrar, that such proposed transferee is a Permitted
Transferee, which Opinion of Counsel shall not be an expense of the Depositor,
the Servicer, the Special Servicer, the Certificate Registrar or the Trustee.
Each Holder of a Residual Certificate, by such Holder's
acceptance thereof, shall be deemed for all purposes to have consented to the
provisions of this section.
Each Residual Certificate shall bear a legend describing or
referencing the restrictions on transferability set forth in this Section
3.03(e).
Section 3.04 TEMPORARY CERTIFICATES.
(a) Pending the preparation of final Certificates,
upon the order of the Depositor, the Trustee shall execute and the Trustee or
the Authenticating Agent shall authenticate and deliver, temporary Certificates
that are printed, lithographed, typewritten, mimeographed or otherwise produced,
in any authorized denomination, substantially of the tenor of the final
Certificates in lieu of which they are issued and with such variations as the
authorized officers executing such Certificates may determine, as evidenced by
their execution of such Certificates.
(b) If temporary Certificates are issued, the
Depositor will cause final Certificates to be prepared without unreasonable
delay. After the preparation of final Certificates, the temporary Certificates
shall be exchangeable for final Certificates upon surrender of the temporary
Certificates at the Corporate Trust Office without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Certificates, the
Trustee shall execute and the Trustee or the Authenticating Agent shall
authenticate and deliver in exchange therefor a like aggregate Certificate
Principal Amount or aggregate Certificate Notional Amount or aggregate
Percentage Interest in the relevant Class, as the case may be, of final
Certificates of the same Class in the authorized denominations. Until so
exchanged, the temporary Certificates shall in all respects be entitled to the
same benefits under this Agreement as final Certificates of the same Class.
64
<PAGE>
Section 3.05 APPOINTMENT OF PAYING AGENT. The Trustee shall
initially be the Paying Agent for the purpose of making distributions to
Certificateholders hereunder and shall perform all obligations of the Paying
Agent set forth herein. The Trustee may appoint another Person as Paying Agent
as provided herein. The Trustee shall cause such Person appointed as Paying
Agent to execute and deliver to the Trustee an instrument in which such Person
shall agree with the Trustee that such Person will hold all sums held by it for
the payment to Certificateholders in an Eligible Account in trust for the
benefit of the Certificateholders entitled thereto until such sums shall be paid
to the Certificateholders and further that such Person will otherwise be bound
by all provisions hereof governing the duties and obligations of a Paying Agent.
All funds remitted by the Trustee to any such Paying Agent for the purpose of
making distributions shall be paid to Certificateholders on each Distribution
Date and any amounts not so paid shall be returned on such Distribution Date to
the Trustee. If the Paying Agent is not the Trustee, the Trustee shall remit to
the Paying Agent on the Business Day prior to each Distribution Date, by wire
transfer in immediately available funds, the funds to be distributed on such
Distribution Date. Any Paying Agent shall be either a bank or trust company or
otherwise authorized under law to exercise corporate trust powers.
Section 3.06 BOOK-ENTRY CERTIFICATES. The Class A, Class B,
Class C, Class D and Class E Certificates, upon original issuance, shall be
issued in the form of typewritten Certificates representing the Book-Entry
Certificates, to be delivered to The Depository Trust Company (the "DEPOSITORY")
which shall be the Clearing Agency by or on behalf of such Certificates. The
Class A, Class B, Class C, Class D and Class E Certificates shall initially be
registered on the Certificate Register in the name of Cede & Co., the nominee of
the Clearing Agency. No Certificate Owner will receive a physical certificate
representing such Certificate Owner's interest in any such Class of
Certificates, except as provided in Section 3.08. Unless and until physical,
fully registered Certificates of any such Class ("PHYSICAL CERTIFICATES") have
been issued to Certificate Owners pursuant to Section 3.08:
(i) the provisions of this Section 3.06 shall be in
full force and effect with respect to each such Class;
(ii) the Depositor, the Servicer, the Special
Servicer, the Paying Agent, the Certificate Registrar and the Trustee
may deal with the Clearing Agency and the Clearing Agency Participants
for all purposes (including the making of distributions on the
Certificates of each such Class) as the authorized representatives of
the Certificate Owners;
(iii) to the extent that the provisions of this
Section 3.06 conflict with any other provisions of this Agreement, the
provisions of this Section 3.06 shall control with respect to each such
Class; and
(iv) the rights of Certificate Owners of each such
Class shall be exercised only through the Clearing Agency and the
applicable Clearing Agency Participants and shall be limited to those
established by law and agreements between such Certificate Owners and
the Clearing Agency and/or the Clearing Agency Participants. Pursuant
to the Depository Agreement applicable to a Class of Book-Entry
Certificates, unless and until Physical Certificates of such Class are
issued pursuant to Section 3.08,
65
<PAGE>
the initial Clearing Agency will make book-entry transfers among the
Clearing Agency Participants and receive and transmit distributions of
principal and interest on such Certificates to such Clearing Agency
Participants.
Section 3.07 NOTICES TO CLEARING AGENCY. Whenever notice or
other communication to the Certificateholders is required under this Agreement,
unless and until Physical Certificates shall have been issued to Certificate
Owners pursuant to Section 3.08, the Trustee shall give all such notices and
communications specified herein to be given to Holders of the Class A, Class B,
Class C, Class D and Class E Certificates to the Clearing Agency for
distribution to the related Certificate Owners.
Section 3.08 PHYSICAL CERTIFICATES. If (i) (A) the Depositor
advises the Trustee in writing that the Clearing Agency is no longer willing or
able to discharge properly its responsibilities under the applicable Depository
Agreement, and (B) the Depositor is unable to locate a qualified successor, (ii)
the Depositor, at its option, advises the Trustee in writing that it elects to
terminate the book-entry system through the Clearing Agency with respect to any
Class of Book-Entry Certificates or (iii) Certificate Owners of a Class of
Book-Entry Certificates representing beneficial interests aggregating not less
than 50% of the Aggregate Certificate Principal Amount of such Class advise the
Trustee and the applicable Clearing Agency through the applicable Clearing
Agency Participants in writing that the continuation of a book-entry system
through the applicable Clearing Agency is no longer in the best interests of the
Certificate Owners of such Class, the Trustee shall notify all Certificate
Owners of each affected Class of Book-Entry Certificates, through the applicable
Clearing Agency Participants, of the occurrence of any such event and of the
availability of Physical Certificates to Certificate Owners of such Class
requesting the same. Upon surrender to the Trustee of the Certificates of such
Class by the applicable Clearing Agency, accompanied by registration
instructions from the applicable Clearing Agency for registration, the Trustee
shall issue the Physical Certificates of such Class. Neither the Depositor nor
the Trustee shall be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Physical Certificates of such Class all
references herein to obligations imposed upon or to be performed by the
applicable Clearing Agency shall be deemed to be imposed upon and performed by
the Trustee, to the extent applicable with respect to such Physical
Certificates, and the Trustee shall recognize the Holders of the Physical
Certificates of such Class as Certificateholders of such Class hereunder.
66
<PAGE>
ARTICLE IV
ADVANCES; CERTAIN MATTERS
INVOLVING THE TRUSTEE AND THE FISCAL AGENT
P&I Advances and Servicing Advances shall be made by the
Servicer, the Trustee and the Fiscal Agent, each to the extent described herein.
Section 4.01 P&I ADVANCES BY SERVICER.
(a) If, on or prior to any P&I Advance Date, the
Servicer determines that the aggregate P&I Advance Amount for the related
Distribution Date is greater than zero, the Servicer shall make P&I Advances
aggregating such amount; provided that the Servicer shall not be required to
make any particular P&I Advance if the Servicer determines, in accordance with
Section 4.04 below, that such P&I Advance would be a Nonrecoverable Advance. It
is understood and agreed that the obligation of the Servicer to make such P&I
Advances is mandatory and shall apply through any court appointed stay period or
similar payment delay resulting from any insolvency of the Mortgagor or related
bankruptcy, notwithstanding any other provision of this Agreement.
(b) If the Servicer determines that there is an
aggregate P&I Advance Amount for a Distribution Date, the Servicer shall on the
related P&I Advance Date (i) make the required P&I Advances by depositing in the
Custodial Account an amount equal to such aggregate P&I Advance Amount, (ii)
make such P&I Advances using funds being held in the Custodial Account for
distribution to Certificateholders on subsequent Distribution Dates or (iii)
make such P&I Advances in any combination thereof. Any funds being held in the
Custodial Account for future distribution and so used shall be replaced by the
Servicer from its own funds by deposit in the Custodial Account prior to any
future Servicer Remittance Date to the extent that such funds, if they had not
been so used to make P&I Advances, would have constituted part of the Available
Distribution Amount for the Distribution Date next following such Servicer
Remittance Date.
Section 4.02 SERVICING ADVANCES. The Servicer shall make
Servicing Advances to the extent provided in each of the Transaction Documents,
except to the extent that the Servicer determines, in accordance with Section
4.04 below, that any such Servicing Advance would be a Nonrecoverable Advance.
Section 4.03 ADVANCES BY TRUSTEE AND FISCAL AGENT. On the P&I
Advance Date, the Servicer shall send to the Trustee by facsimile transmission
to "Asset-Backed Securities Trust Services, Ref. LB 96-C2" at facsimile number
312-904-2084 a certification confirming that the Servicer has made the required
P&I Advances, if any, on such date. If the Servicer is required under any of the
Transaction Documents to make an Advance but does not do so by the related P&I
Advance Date, in the case of a P&I Advance, or within three days after it is
required to be made, in the case of a Servicing Advance, the Trustee shall, if
it has knowledge of such failure on the part of the Servicer, make such Advance,
unless the Trustee determines, in accordance with Section 4.04 below, that such
Advance, if made, would be a Nonrecoverable
67
<PAGE>
Advance. If the Trustee is required under any of the Transaction Documents to
make an Advance but does not do so by 12:30 p.m., Central Time, on the related
Distribution Date, in the case of a P&I Advance, or within three days after it
is required to be made, in the case of a Servicing Advance, the Fiscal Agent
shall make such Advance, unless the Fiscal Agent determines, in accordance with
Section 4.04 below that such Advance, if made, would be a Nonrecoverable
Advance. In the event the Trustee fails to make an Advance required to be made
by the Trustee under any Transaction Document and such Advance is made by the
Fiscal Agent, the Trustee shall not be in default under any such Transaction
Documents by reason of not having made such Advance. The Servicer shall notify
the Trustee and the Fiscal Agent promptly (and in any event no later than five
days after each Determination Date, with respect to P&I Advances that may be
distributable on the Distribution Date occurring in that month) if the Trustee
is required to make an Advance in accordance with this Section 4.03; provided
that failure to receive such notice shall not affect the obligation of the
Trustee and the Fiscal Agent to make such Advances. To the extent that the
Trustee or the Fiscal Agent is required hereunder to make P&I Advances in
respect of any Distribution Date, it shall deposit in the Collection Account on
or before the related Distribution Date the amount of such P&I Advance until
such time as the Trustee shall have succeeded as servicer under the Transaction
Documents, after which time the Trustee, as servicer, shall deposit all P&I
Advances into the Custodial Account as the Servicer is so required to deposit
under this Agreement. Prior to making any Advance required to be made by the
Servicer under any of the Transaction Documents, the Trustee shall deliver
written notice of termination to the Servicer pursuant to Section 3.01(a) of the
Servicing Agreement. The Trustee and the Fiscal Agent shall not be required to
make any Advance or deliver an Officer's Certificate certifying that such
Advance, if made, would be a Nonrecoverable Advance if the Servicer has
previously determined that such Advance, if made, would be a Nonrecoverable
Advance.
Section 4.04 EVIDENCE OF NONRECOVERABILITY. If the Servicer,
the Trustee or the Fiscal Agent determines at any time that any Advance
previously made by it or proposed Advance, if made by it, would constitute a
Nonrecoverable Advance, such determination shall be evidenced by an Officer's
Certificate of such party delivered to the Depositor, to the Special Servicer,
to the Operating Adviser and, in the case of the Servicer, to the Trustee by the
third Business Day following the next succeeding Determination Date, but in no
event (in the case of a proposed P&I Advance) later than three Business Days
(or, in the case of the Trustee or the Fiscal Agent, one Business Day) preceding
the Distribution Date on which such Advance would otherwise be paid to Holders
of the Certificates. Such Officer's Certificate shall set forth such
determination of nonrecoverability and the procedure and considerations of the
Servicer, the Trustee or the Fiscal Agent, as the case may be, forming the basis
of such determination (which shall include, without limitation, and/or be
accompanied by, as applicable, with respect to each related Mortgaged Property
or REO Property, financial or non-financial information such as related income
and expense statements, rent rolls, occupancy status, property inspections,
Servicer or Special Servicer inquiries, a Property Valuation or an Appraisal
(neither of which may be more than 12 months old) and/or notification of
material environmental concern).
68
<PAGE>
Section 4.05 INTEREST ON ADVANCES; CALCULATION OF OUTSTANDING
ADVANCES WITH RESPECT TO A MORTGAGE LOAN. Any unreimbursed Advance funded from
the Servicer's, the Trustee's or the Fiscal Agent's own funds shall accrue
interest on a daily basis, at a per annum rate equal to the Advance Rate, from
the date such Advance was made until the date on which such Advance has been
reimbursed. For purposes of determining whether a P&I Advance is outstanding,
amounts collected with respect to a particular Mortgage Loan or REO Property and
treated as collections of principal or interest (net of any related Retained
Yield) shall be applied first to reimburse the earliest P&I Advance and then
each succeeding P&I Advance to the extent not inconsistent with Section 4.06,
subject to the provisions of Section 2.02(a)(i) of the Servicing Agreement. The
Servicer shall attempt to collect the full amount of late fees plus an amount at
least sufficient to pay Advance Interest from the Mortgagor on any loan other
than a Specially Serviced Mortgage Loan. The Servicer shall retain late payment
fees (exclusive, in the case of the Mortgage Loans identified on the Mortgage
Loan Schedule as loan numbers 61 and 107, of the portion of such late payment
fees payable to the related Retained Yield Holder) and Default Interest paid by
any Mortgagor with respect to any Mortgage Loan (other than a Specially Serviced
Mortgage Loan, as to which it shall not retain late payment fees or Default
Interest), but only to the extent that the sum of such Default Interest and late
payment fees collected from such Mortgagor, exceeds the amount of accrued
Advance Interest with respect to any Advances made in respect of such Mortgage
Loan.
Section 4.06 REIMBURSEMENT OF ADVANCES AND ADVANCE INTEREST.
(a) Advances made with respect to each Mortgage Loan and REO
Property shall be reimbursed to the extent that the amount in respect of which
such Advance was made is repaid by the Mortgagor or, as and to the extent
permitted by Section 2.02 of the Servicing Agreement, was otherwise recovered
from Late Collections, Net Liquidation Proceeds, Insurance Proceeds,
Condemnation Proceeds, Net REO Income from the related REO Property, or any
other amount collected with respect to the Mortgage Loan or REO Property and
applied as a payment of the amount that was advanced. The aggregate of such
amounts on deposit in the Custodial Account as of any date of determination and
available to reimburse outstanding Advances with respect to any Mortgage Loan or
REO Property in accordance with Section 2.02 of the Servicing Agreement shall
constitute the "AVAILABLE ADVANCE REIMBURSEMENT AMOUNT" for such Mortgage Loan
or REO Property and such date of determination. Advances made and subsequently
determined to be Nonrecoverable Advances shall be reimbursed in accordance with
Section 2.02(a) of the Servicing Agreement out of general collections on the
Mortgage Loans and REO Properties on deposit in the Custodial Account.
(b) To the extent that Advances have been made on any Mortgage
Loan or REO Property, the Available Advance Reimbursement Amount for such
Mortgage Loan or REO Property for any date of determination shall be applied:
FIRST, to reimburse the Fiscal Agent up to an amount equal to the lesser of (i)
all Advances outstanding with respect to such Mortgage Loan or REO Property and
(ii) all outstanding Advances reimbursable to the Fiscal Agent in respect of any
Mortgage Loans and/or REO Properties; SECOND, to reimburse the Trustee up to an
amount equal to the lesser of (i) all Advances outstanding with respect to such
Mortgage Loan or REO Property (net of any amount reimbursed to the Fiscal Agent
pursuant to the immediately preceding clause FIRST) and (ii) all outstanding
Advances reimbursable to the Trustee in respect of any Mortgage Loans or REO
Properties; and THIRD, to reimburse the Servicer up to an amount
69
<PAGE>
equal to the lesser of (i) all Advances outstanding with respect to such
Mortgage Loan or REO Property (net of any amounts reimbursed to the Fiscal Agent
and the Trustee pursuant to the immediately preceding clauses FIRST and SECOND)
and (ii) all outstanding Advances reimbursable to the Servicer in respect of any
Mortgage Loans and/or REO Properties.
(c) At the time any Advance is reimbursed, all Advance
Interest accrued and payable with respect thereto may be withdrawn from the
Custodial Account from late payment charges and Default Interest collected on
the related Mortgage Loan or, to the extent of that portion thereof paid to
cover such Advance Interest, Repurchase Proceeds paid in respect of the related
Mortgage Loan or REO Property and otherwise from general collections in respect
of the Mortgage Pool on deposit in the Custodial Account, all in accordance with
Section 2.02 of the Servicing Agreement, and shall be paid: FIRST, to the Fiscal
Agent up to an amount equal to the lesser of (i) all such Advance Interest
accrued in respect of the Advance being reimbursed and (ii) all accrued unpaid
Advance Interest payable to the Fiscal Agent up to the date of such
reimbursement in respect of Advances on any Mortgage Loans or REO Properties;
SECOND, to the Trustee up to an amount equal to the lesser of (i) all such
Advance Interest accrued in respect of the Advance being reimbursed (net of any
payment to the Fiscal Agent pursuant to the immediately preceding clause first)
and (ii) all accrued unpaid Advance Interest payable to the Trustee up to the
date of such reimbursement in respect of Advances on any Mortgage Loans or REO
Properties; and THIRD, to the Servicer up to an amount equal to the lesser of
(i) all such Advance Interest accrued in respect of the Advance being reimbursed
(net of any payments to the Fiscal Agent and the Trustee pursuant to the
immediately preceding clauses FIRST and SECOND) and (ii) all accrued unpaid
Advance Interest payable to the Servicer up to the date of such reimbursement in
respect of Advances on any Mortgage Loans or REO Properties.
Section 4.07 REPRESENTATIONS AND WARRANTIES OF THE FISCAL
AGENT. The Fiscal Agent hereby represents and warrants to the other parties
hereto and for the benefit of the Certificateholders as of the Closing Date
that:
(a) The Fiscal Agent is a foreign banking corporation duly
organized, validly existing and in good standing under the laws
governing its creation and existence and has full corporate power and
authority to own its property, to carry on its business as presently
conducted, and to enter into and perform its obligations under the
Transaction Documents;
(b) The execution and delivery by the Fiscal Agent of this
Agreement have been duly authorized by all necessary corporate action
on the part of the Fiscal Agent; neither the execution and delivery of
this Agreement, nor the consummation of the transactions contemplated
in this Agreement or any other Transaction Document, nor compliance
with the provisions of this Agreement or any other Transaction
Document, will conflict with or result in a breach of, or constitute a
default under, (i) any of the provisions of any law, governmental rule,
regulation, judgment, decree or order binding on the Fiscal Agent or
its properties that would materially and adversely affect the Fiscal
Agent's ability to perform its obligations under the Transaction
Documents, (ii) the organizational documents of the Fiscal Agent, or
(iii) the terms of any material agreement or instrument to which the
Fiscal Agent is a party or by which it is bound; the Fiscal Agent is
not in default with respect to any order or decree of any court or any
70
<PAGE>
order, regulation or demand of any federal, state, municipal or other
governmental agency, which default would materially and adversely
affect its performance under the Transaction Documents;
(c) The execution, delivery and performance by the Fiscal
Agent of this Agreement and the consummation of the transactions
contemplated by this Agreement and the other Transaction Documents do
not require the consent, approval, authorization or order of, the
giving of notice to or the registration with any state, federal or
other governmental authority or agency, except such as has been
obtained, given, effected or taken prior to the date hereof;
(d) This Agreement has been duly executed and delivered by the
Fiscal Agent and, assuming due authorization, execution and delivery by
the other parties hereto, constitutes a valid and binding obligation of
the Fiscal Agent, enforceable against the Fiscal Agent in accordance
with its terms, subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium and other similar
laws affecting creditors' rights generally as from time to time in
effect, and to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law); and
(e) There are no actions, suits or proceedings pending or, to
the best of the Fiscal Agent's knowledge, threatened, against the
Fiscal Agent that, either in any one instance or in the aggregate,
would draw into question the validity of the Transaction Documents, or
which would be likely to impair materially the ability of the Fiscal
Agent to perform under the terms of the Transaction Documents.
Section 4.08 FISCAL AGENT EVENT OF DEFAULT. "Fiscal Agent
Event of Default," wherever used herein, means any one of the following events:
(a) Any failure by the Fiscal Agent to make any Advance as and
when required under the terms of this Agreement, including, without
limitation, any required P&I Advance; or
(b) Any failure on the part of the Fiscal Agent duly to
observe or perform in any material respect any other of the covenants
or agreements on the part of the Fiscal Agent contained in this
Agreement or any other Transaction Document which continues unremedied
for a period of 45 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to
the Fiscal Agent by the Depositor or the Trustee; provided that to the
extent the Trustee determines that the Fiscal Agent is in good faith
attempting to remedy such failure and the Certificateholders shall not
be materially and adversely affected thereby, such cure period may be
extended for an additional 45 days to permit the Fiscal Agent to cure
such failure; or
(c) Any breach of the representations and warranties contained
in Section 4.07 that materially and adversely affects the interests of
the Certificateholders and that continues unremedied for a period of 45
days after the date on which notice of such breach, requiring the same
to be remedied, shall have been given to the Fiscal Agent by
71
<PAGE>
the Depositor or the Trustee; provided that to the extent the Trustee
determines that the Fiscal Agent is in good faith attempting to remedy
such breach and the Certificateholders shall not be materially and
adversely affected thereby, such cure period may be extended for an
additional 45 days to permit the Fiscal Agent to cure such breach; or
(d) 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 Fiscal Agent and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 days; or
(e) The Fiscal Agent 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 the Fiscal Agent
or of or relating to all or substantially all of its property; or
(f) The Fiscal Agent 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.
Section 4.09 PROCEDURE UPON FISCAL AGENT EVENT OF DEFAULT.
(a) If a Fiscal Agent Event of Default shall occur
and be continuing, then either the Trustee or the Depositor may and, at the
direction of the Holders of Certificates entitled to at least 25% of all the
Voting Rights, the Trustee shall by written notice given to the Fiscal Agent
(copies of which shall be sent to each of other parties hereto) terminate all
authority, power and rights of the Fiscal Agent under this Agreement, whether
with respect to the Mortgage Loans or otherwise; provided that, unless a
successor fiscal agent is not required to be appointed as contemplated by the
last sentence of this Section 4.09(a), in no event shall the termination of the
Fiscal Agent be effective until a successor fiscal agent designated by the
Trustee shall have assumed the Fiscal Agent's responsibilities and obligations
under this Agreement and the Rating Agencies shall have confirmed in writing
that such designation shall not result in the qualification, downgrading or
withdrawal of the ratings on the Certificates that are then rated. The Fiscal
Agent agrees to cooperate with the Trustee in effecting the termination of the
Fiscal Agent's responsibilities and rights hereunder as Fiscal Agent.
Notwithstanding anything herein to the contrary, upon the termination of the
Fiscal Agent in accordance with this Section 4.09(a), the Trustee shall not be
required to designate a successor fiscal agent if (but only for so long as) the
long-term unsecured senior debt of the Trustee is rated at least "AA" or "Aa2",
as applicable, by each Rating Agency (or, in the case of any Rating Agency, such
lower rating as is confirmed by such Rating Agency in writing will not adversely
affect any rating then assigned thereby to the Certificates).
72
<PAGE>
(b) Notwithstanding the termination of its activities
as Fiscal Agent, the terminated Fiscal Agent shall continue to be entitled to
reimbursement to the extent provided in Section 4.06 but only to the extent such
reimbursement relates to the period up to and including the date on which the
Fiscal Agent's termination is effective.
Section 4.10 MERGER OR CONSOLIDATION. Any Person into which
the Fiscal Agent may be merged or consolidated, or any Person resulting from any
merger, conversion, other change in form or consolidation to which the Fiscal
Agent shall be a party, or any Person succeeding to the business of the Fiscal
Agent, shall be the successor of the Fiscal Agent 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
(i) the successor to the Fiscal Agent or resulting Person shall have a long-term
unsecured debt rating of at least "AA" or "Aa2", as applicable, from each Rating
Agency, (ii) such successor or resulting Person shall be satisfactory to the
Depositor and the Trustee, (iii) such successor or resulting Person shall
execute and deliver to the Trustee an agreement, in form and substance
satisfactory to the Trustee, which contains an assumption by such Person of the
due and punctual performance and observance of each covenant and condition to be
performed or observed by the Fiscal Agent under this Agreement from and after
the date of such agreement, (iv) the Rating Agencies shall be given prior
written notice of the identity of the proposed successor or resulting Person and
the Rating Agencies shall have confirmed in writing that the ratings on the
Certificates will not be qualified, downgraded or withdrawn by reason thereof,
and (v) the Fiscal Agent shall deliver to the Trustee an Officer's Certificate
and an Opinion of Counsel acceptable to the Trustee (which opinion shall be at
the expense of the Fiscal Agent) stating that all conditions precedent to such
action under this Agreement have been completed and such action is permitted by
and complies with the terms of this Agreement.
Section 4.11 RESIGNATION OF FISCAL AGENT.
(a) Except as otherwise provided in Section 4.11(b)
hereof, the Fiscal Agent shall not resign from the obligations and duties hereby
imposed on it unless it determines that the Fiscal Agent's 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 (provided that it
had been engaged in such activities as of the date hereof). Any such
determination permitting the resignation of the Fiscal Agent shall be evidenced
by an Opinion of Counsel to such effect delivered to the Trustee and the
Depositor (which opinion shall be at the expense of the Fiscal Agent). Unless a
successor fiscal agent is not required to be appointed as contemplated by the
last sentence of this Section 4.11(a), no such resignation shall become
effective until a successor fiscal agent designated by the Trustee shall have
assumed the Fiscal Agent's responsibilities and obligations under this Agreement
and the Rating Agencies shall have confirmed in writing that such designation
shall not result in a qualification, downgrading or withdrawal of the ratings on
the Certificates that are then rated. Notice of such resignation shall be given
promptly in writing by the Fiscal Agent to the Trustee. Notwithstanding anything
herein to the contrary, upon the resignation of the Fiscal Agent in accordance
with this Section 4.11(a), the Trustee shall not be required to designate a
successor fiscal agent if (but only for so long as) the long-term unsecured
senior debt of the Trustee is rated at least "AA" or "Aa2", as applicable, by
each Rating Agency (or, in the case of either Rating Agency, such lower rating
73
<PAGE>
as is confirmed by such Rating Agency in writing will not adversely affect any
rating then assigned thereby to the Certificates).
(b) The Fiscal Agent may resign from the obligations
and duties imposed on it hereby at any time after October 31, 1997, upon
reasonable notice to the Trustee, provided that (i) a successor fiscal agent is
(A) available, and (B) willing to assume the obligations, responsibilities, and
covenants to be performed under the Transaction Documents by the Fiscal Agent on
substantially the same terms and conditions to those provided for under the
Transaction Documents, (ii) the Fiscal Agent bears all costs associated with
such resignation, (iii) the successor fiscal agent has a long-term unsecured
debt rating of at least "AA" or "Aa2", as applicable, from each Rating Agency,
(iv) the successor fiscal agent is approved by the Depositor and the Trustee,
and (v) the Rating Agencies shall have confirmed in writing that the appointment
of such successor fiscal agent shall not result in a qualification, downgrading
or withdrawal of the ratings on the Certificates that are then rated.
Section 4.12 FEES OF THE FISCAL AGENT. The Fiscal Agent shall
be entitled to receive (and the Trustee shall pay without right of
reimbursement) reasonable compensation for all services rendered by the Fiscal
Agent under this Agreement or any other Transaction Document.
Section 4.13 LIMITATION ON LIABILITY OF THE FISCAL AGENT AND
OTHERS. Neither the Fiscal Agent nor any of the directors, officers, employees
or agents of the Fiscal Agent shall be under any liability to the
Certificateholders, the Depositor or the Trustee for any action taken or for
refraining from the taking of any action in good faith pursuant to this
Agreement or any other Transaction Document, or for errors in judgment; provided
that this provision shall not protect the Fiscal Agent or any such person
against any breach of a representation or warranty contained herein or any
liability which would otherwise be imposed by reason of willful misfeasance, bad
faith or negligence in its performance of duties or by reason of reckless
disregard for its obligations and duties under this Agreement or any other
Transaction Document. The Fiscal Agent and any director, officer, employee or
agent of the Fiscal Agent may rely in good faith on any document of any kind
PRIMA FACIE properly executed and submitted by any Person respecting any matters
arising hereunder. The Fiscal Agent shall not be under any obligation to appear
in, prosecute or defend any legal action which is not incidental to its duties
with respect to the Mortgage Loans and any REO Properties in accordance with
this Agreement or any other Transaction Document.
Section 4.14 INDEMNIFICATION OF FISCAL AGENT.
(a) The Fiscal Agent and each of its directors,
officers, employees and agents shall be entitled to indemnification from the
Trust Fund out of the Custodial Account for any loss, liability or expense
incurred without negligence, bad faith or willful misconduct on their part,
arising out of, or in connection with, the performance (in accordance with the
terms of this Agreement) of their obligations under this Agreement (including,
without limitation, any such loss, liability or expense incurred in connection
with any action or inaction of the Servicer pursuant to this Agreement or the
Servicing Agreement or the Special Servicer pursuant to this Agreement or the
Special Servicing Agreement), including the costs and expenses of defending
themselves against any related claims; provided that:
74
<PAGE>
(i) with respect to any such claim, the
Fiscal Agent shall have given the Depositor and the Holders of the
Certificates written notice thereof promptly after the Fiscal Agent
shall have knowledge thereof (except that failure to give such notice
shall not affect the Fiscal Agent's rights to indemnification unless
the Depositor's or Holders' defense of such claim is materially
prejudiced thereby);
(ii) while maintaining control over its own
defense, the Fiscal Agent shall cooperate and consult fully with the
Depositor in preparing such defense; and
(iii) notwithstanding anything to the
contrary in this Section 4.14(a), the Trust Fund shall not be liable
for settlement of any such claim by the Fiscal Agent entered into
without the prior consent of the Depositor, which consent shall not be
unreasonably withheld.
The provisions of this Section 4.14(a) shall survive any termination of this
Agreement and the resignation or removal of the Fiscal Agent.
(b) The Depositor shall indemnify and hold harmless
the Fiscal Agent, its directors, officers, employees or agents and each Person,
if any, who controls the Fiscal Agent within the meaning of the 1933 Act from
and against any loss, claim, damage or liability, joint or several, and any
action in respect thereof, to which the Fiscal Agent or any of its directors,
officers, employees, agents or controlling Persons may become subject under the
1933 Act, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the registration of
the Registered Certificates under the 1933 Act as originally filed or any
amendment thereof (collectively, for purposes of this Section 4.14, the
"Registration Statement"), or in the 1996-C2 Prospectus or the 1996-C2 PPM
(collectively, for purposes of this Section 4.14, the "Disclosure Documents"),
or arises out of, or is based upon, the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein (in the case of a Disclosure Document, in light of the
circumstances under which they were made) not misleading and shall reimburse the
Fiscal Agent, its directors, officers, employees, agents and controlling Persons
for any legal and other expenses reasonably incurred by the Fiscal Agent or any
such director, officer, employee, agent or controlling Person in investigating
or defending or preparing to defend against any such loss, claim, damage,
liability or action; provided that the Depositor shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or action arises
out of, or is based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement or Disclosure
Documents in reliance upon and in conformity with written information concerning
the Fiscal Agent furnished to the Depositor by or on behalf of the Fiscal Agent
specifically for inclusion therein. The Fiscal Agent shall immediately notify
the Depositor if a claim is made by a third party entitling the Fiscal Agent or
any of its directors, officers, employees, agents or controlling Persons to
indemnification under this Section 4.14(b), whereupon the Depositor shall assume
the defense of any such claim (with counsel reasonably satisfactory to the
Fiscal Agent) and pay all expenses in connection therewith, including counsel
fees, and promptly pay, discharge and satisfy any judgment or decree which may
be entered against it or them in respect of such claim. Any failure to so notify
the Depositor shall not affect any rights the Fiscal Agent, its directors,
officers, employees, agents or controlling
75
<PAGE>
Persons may have to indemnification under this Section 4.14(b), unless the
Depositor's defense of such claim is materially prejudiced thereby. The
indemnification provided herein shall survive the termination of any of the
Transaction Documents and any termination or resignation of any of the Trustee,
the Fiscal Agent, the Servicer and the Special Servicer under any of the
Transaction Documents.
(c) The Fiscal Agent shall indemnify and hold
harmless the Depositor, its directors, officers, employees or agents and each
Person, if any, who controls the Depositor within the meaning of the 1933 Act
from and against any loss, claim, damage or liability, joint or several, and any
action in respect thereof, to which the Depositor or any of its directors,
officers, employees, agents or controlling Persons may become subject under the
1933 Act, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, any untrue statement or alleged untrue statement of a
material fact contained in the Disclosure Documents, or arises out of, or is
based upon, the omission or alleged omission to state therein a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading and shall reimburse the Depositor and its
directors, officers, employees, agents and controlling Persons for any legal and
other expenses reasonably incurred by the Depositor or any such director,
officer, employee, agent or controlling Person in investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action,
but in each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information concerning the Fiscal Agent furnished to the
Depositor by or on behalf of the Fiscal Agent specifically for inclusion
therein. The Depositor shall immediately notify the Fiscal Agent if a claim is
made by a third party entitling the Depositor or any of its directors, officers,
employees, agents or controlling Persons to indemnification under this Section
4.14(c), whereupon the Fiscal Agent shall assume the defense of any such claim
(with counsel reasonably satisfactory to the Depositor) and pay all expenses in
connection therewith, including counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or them in
respect of such claim. Any failure to so notify the Fiscal Agent shall not
affect any rights the Depositor or any of its directors, officers, employees,
agents or controlling Persons may have to indemnification under this Section
4.14(c), unless the Fiscal Agent's defense of such claim is materially
prejudiced thereby. The indemnification provided herein shall survive the
termination of any of the Transaction Documents and any termination or
resignation of the Fiscal Agent under any of the Transaction Documents.
(d) The Depositor and the Fiscal Agent expressly
agree that the only written information concerning the Fiscal Agent furnished by
or on behalf of the Fiscal Agent for inclusion in the Registration Statement or
the Disclosure Documents is the information set forth in the last sentence under
the caption "DESCRIPTION OF THE CERTIFICATES--The Fiscal Agent" in the 1996-C2
Prospectus Supplement, which information the Fiscal Agent hereby represents to
be true and correct in all material respects as of the date of the 1996-C2
Prospectus Supplement and as of the Closing Date.
76
<PAGE>
ARTICLE V
ADMINISTRATION OF THE TRUST FUND
Section 5.01 DUTIES OF THE SERVICER AND THE SPECIAL SERVICER.
(a) For and on behalf of the Certificateholders and
the Trustee, the Servicer shall service the Mortgage Loans (other than the
Specially Serviced Mortgage Loans except to the limited extent contemplated
thereby) in the best interest of the Trust and the Certificateholders in
accordance with applicable law and the provisions of the Transaction Documents,
the respective Mortgage Loans and the related Insurance Policies and, to the
extent consistent with the foregoing, in accordance with Accepted Servicing
Practices.
(b) For and on behalf of the Certificateholders and
the Trustee, the Special Servicer shall service the Specially Serviced Mortgage
Loans, perform certain limited duties as to the remaining Mortgage Loans and
manage the REO Properties in accordance with applicable law and the provisions
of the Transaction Documents (including, without limitation, such provisions
relating to the authority of an Operating Adviser), the respective Mortgage
Loans and the related Insurance Policies and, to the extent consistent with the
foregoing, in accordance with Accepted Servicing Practices.
(c) The Certificateholders and the Trust shall be
third party beneficiaries of the Servicing Agreement and the Special Servicing
Agreement.
(d) The Trustee shall enforce the obligations of the
Servicer and the Special Servicer under the Servicing Agreement and the Special
Servicing Agreement on behalf of and for the benefit of the Trust and the
Certificateholders and shall be entitled to reimbursement for the associated
costs and expenses out of the Collection Account pursuant to Sections 5.05(b)
and 7.12. If a Servicer Event of Default or a Special Servicer Event of Default
shall occur and be continuing, then either the Trustee or the Depositor may, and
at the direction of the Holders of Certificates entitled to at least 25% of the
Voting Rights, the Trustee shall terminate all authority, power and rights of
the Servicer or the Special Servicer, as appropriate, as such under the
Transaction Documents, whether with respect to the Mortgage Loans or otherwise,
all in accordance with the Servicing Agreement or the Special Servicing
Agreement, as applicable. The Operating Adviser may direct the Trustee to, and
the Trustee shall upon direction of the Operating Adviser, terminate the
services of the Special Servicer under the Transaction Documents in accordance
with Section 3.01(c) of the Special Servicing Agreement.
(e) Notwithstanding anything to the contrary
contained in the Transaction Documents, the Servicer shall not modify, waive or
amend any term of any Mortgage Loan or the related Mortgage Note.
77
<PAGE>
Section 5.02 RESIGNATION OR TERMINATION OF SERVICER.
(a) In the event that the Servicer may resign or be
terminated as Servicer under the Servicing Agreement, then the Servicer shall
automatically be deemed to have resigned or been terminated, as the case may be,
hereunder, and any successor servicer appointed under the Servicing Agreement
shall automatically succeed to the rights and obligations of the Servicer
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 hereunder.
(b) On and after the time the Servicer is terminated
for cause or resigns pursuant to the Servicing Agreement, provided, another
successor to the Servicer has not been provided for pursuant to Section 3.02(b)
or 4.19(a) of the Servicing Agreement, as the case may be, the Trustee shall be
the successor in all respects to the Servicer in such capacity under the
Transaction Documents and the transactions set forth or provided for in the
Transaction Documents and shall have all the rights and powers and be subject to
all the responsibilities, duties and liabilities relating thereto and arising
thereafter placed on the Servicer by the terms and provisions of the Transaction
Documents; provided that any failure to perform such duties or responsibilities
caused by the Servicer's failure to provide required information shall not be
considered a default by the Trustee under the Transaction Documents. In
addition, the Trustee shall have no liability relating to (i) the
representations and warranties of the Servicer contained in the Servicing
Agreement or (ii) any obligation incurred by the Servicer prior to its
termination or resignation (including, without limitation, the Servicer's
obligations to repay losses resulting from the investment of funds in any
account established pursuant to this Agreement or the Servicing Agreement). In
the Trustee's capacity as such successor, the Trustee shall have the same
limitations on liability granted to the Servicer in the Transaction Documents.
As compensation therefor, the Trustee shall be entitled to receive the
compensation payable to the Servicer set forth in the Servicing Agreement.
(c) Notwithstanding the above, the Trustee may, if it
is unwilling to so act as a successor servicer, or shall, if it is unable to so
act, appoint, or petition a court of competent jurisdiction to appoint, any
established commercial or multifamily mortgage finance institution, servicer or
special servicer or mortgage servicing institution having a net worth of not
less than $10,000,000, meeting such other standards for a successor servicer as
are set forth in Section 4.18 of the Servicing Agreement and which, as confirmed
by the Rating Agencies in writing, will not adversely affect the then current
rating of any Class of Certificates with a rating, as the successor to the
Servicer under the Transaction Documents in the assumption of all of the
responsibilities, duties and liabilities of the Servicer thereunder. Pending any
such appointment, the Trustee shall act in such capacity as hereinabove
provided. Any entity designated by the Trustee as successor Servicer may be an
Affiliate of the Trustee; provided that such Affiliate shall meet the standards
set forth in the Servicing Agreement for a successor servicer. In connection
with such appointment and assumption, the Trustee may make such arrangements for
the compensation of such successor out of payments on Mortgage Loans as it and
such successor shall agree; provided that no such compensation shall be in
excess of that permitted to the Servicer under the Servicing Agreement. The
Trustee and such successor shall take such actions, consistent with the
Transaction Documents as shall be necessary to effectuate any such succession.
The Servicer shall cooperate with the Trustee and any successor servicer
78
<PAGE>
in effecting the termination of the Servicer's responsibilities and rights under
the Transaction Documents, including, without limitation, notifying Mortgagors
of the assignment of the servicing function, providing the Trustee and any other
successor servicer with all documents and records in the Servicer's possession
in electronic or other form reasonably requested by the Trustee or such other
successor servicer to enable it to assume the Servicer's functions under the
Transaction Documents and transferring to the Trustee or such other successor
servicer all amounts which shall at the time be or should have been deposited by
the Servicer in the Custodial Account and any other account or fund maintained
with respect to the Certificates or as may thereafter be received with respect
to the Mortgage Loans. Neither the Trustee nor any other successor servicer
shall be deemed to be in default hereunder by reason of any failure to make, or
any delay in making, any distribution hereunder or any portion thereof caused by
(i) the failure of the terminated Servicer to deliver, or any delay in
delivering, cash, documents or records to it, or (ii) restrictions imposed by
any regulatory authority having jurisdiction over the terminated Servicer.
(d) Upon termination of the Servicer or appointment
of a successor to the Servicer, the Trustee shall promptly mail notice thereof
by first class mail to the Certificateholders at their respective addresses
appearing on the Certificate Register.
Section 5.03 RESIGNATION OR TERMINATION OF SPECIAL SERVICER.
(a) In the event that the Special Servicer may resign
or be terminated as Special Servicer under the Special Servicing Agreement, then
the Special Servicer shall automatically be deemed to have resigned or been
terminated, as the case may be, hereunder, and any successor special servicer
appointed under the Special Servicing Agreement shall automatically succeed to
the rights and obligations of the Special Servicer 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 hereunder.
(b) On and after the time the Special Servicer is
terminated for cause or resigns pursuant to the Special Servicing Agreement,
provided another successor to the Special Servicer has not been provided for
pursuant to Section 3.01(c) or 4.21(b) of the Special Servicing Agreement, as
the case may be, the Trustee shall be the successor in all respects to the
Special Servicer in such capacity under the Transaction Documents and the
transactions set forth or provided for in the Transaction Documents and shall
have all the rights and powers and be subject to all the responsibilities,
duties and liabilities relating thereto and arising thereafter placed on the
Special Servicer by the terms and provisions of the Transaction Documents;
provided that any failure to perform such duties or responsibilities caused by
the Special Servicer's failure to provide required information shall not be
considered a default by the Trustee under the Transaction Documents. In
addition, the Trustee shall have no liability relating to (i) the
representations and warranties of the Special Servicer contained in the Special
Servicing Agreement or (ii) any obligation incurred by the Special Servicer
prior to its termination or resignation. In the Trustee's capacity as such
successor, the Trustee shall have the same limitations on liability granted to
the Special Servicer under the Transaction Documents. As compensation therefor,
the Trustee shall be entitled to receive the compensation payable to the Special
Servicer set forth in the Special Servicing Agreement.
79
<PAGE>
(c) Notwithstanding the above, the Trustee may, if it
is unwilling to so act, or shall, if it is unable to so act, appoint, or
petition a court of competent jurisdiction to appoint, any established
commercial or multifamily mortgage finance institution, servicer or special
servicer or mortgage servicing institution meeting such standards for a
successor special servicer as are set forth in Section 4.20 of the Special
Servicing Agreement and which, as confirmed by the Rating Agencies in writing,
will not adversely affect the then current rating of any Class of Certificates
with a rating, as the successor to the Special Servicer under the Transaction
Documents in the assumption of all of the responsibilities, duties and
liabilities of the Special Servicer thereunder. Pending any such appointment,
the Trustee shall act in such capacity as hereinabove provided. Any entity
designated by the Trustee as successor Special Servicer may be an Affiliate of
the Trustee; provided that such Affiliate shall meet the standards set forth in
the Special Servicing Agreement for a successor special servicer. In connection
with such appointment and assumption, the Trustee may make such arrangements for
the compensation of such successor out of payments on Mortgage Loans and REO
Properties as it and such successor shall agree; provided that no such
compensation shall be in excess of that permitted to the Special Servicer under
the Special Servicing Agreement. The Trustee and such successor shall take such
actions, consistent with the Transaction Documents as shall be necessary to
effectuate any such succession. The Special Servicer shall cooperate with the
Trustee and any successor special servicer in effecting the termination of the
Special Servicer's responsibilities and rights under the Transaction Documents,
including, without limitation, notifying Mortgagors of Specially Serviced
Mortgage Loans of the assignment of the special servicing function, providing
the Trustee and any other successor special servicer with all documents and
records in the Special Servicer's possession in electronic or other form
reasonably requested by the Trustee or such other successor special servicer to
enable it to assume the Special Servicer's functions under the Transaction
Documents and transferring to the Trustee or such other successor special
servicer all amounts which shall at the time be or should have been deposited by
the Special Servicer in the Custodial Account, any REO Account and any other
account or fund maintained with respect to the Certificates or as may thereafter
be received with respect to the Mortgage Loans or any REO Properties. The
Special Servicer's additional out-of-pocket costs in connection with the
transfer of servicing shall be paid by the Special Servicer without any right of
reimbursement, unless the Special Servicer has been terminated without cause, in
which case such additional costs shall be reimbursable to the Special Servicer
by the Controlling Class. Neither the Trustee nor any other successor special
servicer shall be deemed to be in default hereunder by reason of any failure to
make, or any delay in making, any distribution hereunder or any portion thereof
caused by (i) the failure of the terminated Special Servicer to deliver, or any
delay in delivering, cash, documents or records to it, or (ii) restrictions
imposed by any regulatory authority having jurisdiction over the terminated
Special Servicer.
(d) Upon termination of the Special Servicer or
appointment of a successor to the Special Servicer, the Trustee shall promptly
mail notice thereof by first class mail to the Certificateholders at their
respective addresses appearing on the Certificate Register.
Section 5.04 THE CUSTODIAL ACCOUNT AND THE REO ACCOUNTS.
(a) On or prior to the Closing Date, the Servicer
shall be required in the Servicing Agreement to establish and thereafter
maintain one or more accounts (collectively,
80
<PAGE>
the "CUSTODIAL ACCOUNT"), each of which shall be an Eligible Account, in the
name of "LaSalle National Bank, as Trustee for Holders of LB Commercial Conduit
Mortgage Trust II, Multiclass Pass-Through Certificates, Series
1996-C2-Custodial Account". The Custodial Account shall relate solely to the
Mortgage Loans and funds in the Custodial Account shall not be commingled with
any other moneys. The Servicer shall be required to make deposits to the
Custodial Account in accordance with Section 2.01(c) of the Servicing Agreement
and shall be permitted to make withdrawals therefrom pursuant to Section 2.02 of
the Servicing Agreement. Amounts on deposit therein may be invested in Eligible
Investments in accordance with Section 2.01(d) of the Servicing Agreement. On
each Servicer Remittance Date, the Servicer shall be required under the
Servicing Agreement to remit from the Custodial Account to the Trustee for
deposit into the Collection Account the Available Distribution Amount (net of
any portion of such Available Distribution Amount that is on deposit in the
Collection Account) for the next succeeding Distribution Date, all Net
Prepayment Premiums collected on the Mortgage Loans during the most recently
ended Collection Period and amounts to be applied to the Trustee Fee and any
expenses of the Trust payable out of the Collection Account under this
Agreement.
(b) The Special Servicer shall be required pursuant
to the Special Servicing Agreement to segregate and hold all funds collected and
received in connection with the operation of each REO Property separate and
apart from its own funds and general assets and shall be required pursuant to
the Special Servicing Agreement to establish and maintain with respect to each
REO Property an account (an "REO ACCOUNT") to be held in trust for the benefit
of the Certificateholders in the name of "LaSalle National Bank, as Trustee for
the Holders of LB Commercial Conduit Mortgage Trust II, Multiclass Pass-Through
Certificates, Series 1996-C2-[name of REO Property]". Each REO Account is to be
an Eligible Account, and amounts therein are to be invested in Eligible
Investments. On each Special Servicer Remittance Date, the Special Servicer
shall be required pursuant to the Special Servicing Agreement to withdraw from
each REO Account and deposit in the Custodial Account the Net REO Income,
Insurance Proceeds and/or Condemnation Proceeds received on the related REO
Property during the most recently ended Collection Period (together with
reinvestment income thereon); provided that the Special Servicer may retain in
such REO Account such portion of such proceeds and collections as may be
necessary to maintain in such account funds sufficient for the proper operation,
management and maintenance of the related REO Property.
Section 5.05 THE COLLECTION ACCOUNT.
(a) The Trustee, or the Paying Agent, on behalf of
the Trustee, shall establish and maintain in the name of the Trustee, a
segregated trust account (the "COLLECTION ACCOUNT"), to be held in trust for the
benefit of the Holders of the Certificates until disbursed pursuant to the terms
of this Agreement, entitled: "LaSalle National Bank, as trustee, in trust for
the benefit of the Holders of LB Commercial Conduit Mortgage Trust II,
Multiclass PassThrough Certificates, Series 1996-C2--Collection Account." The
Collection Account shall be an Eligible Account. The Collection Account shall
relate solely to the Certificates issued hereunder and funds in the Collection
Account shall be held separate and apart from and shall not be commingled with
any other moneys including, without limitation, other moneys of the Trustee or
the Paying Agent, as applicable, held under this Agreement. The funds held in
the Collection Account shall not be invested.
81
<PAGE>
(b) The Trustee or the Paying Agent, as applicable,
shall deposit into the Collection Account on the Business Day received all
moneys remitted by the Servicer pursuant to the Servicing Agreement. The Trustee
and the Fiscal Agent shall deposit in the Collection Account on or before the
related Distribution Date any P&I Advances made thereby in accordance with
Section 4.03 until such time as the Trustee shall have succeeded the Servicer
under the Transaction Documents. The Trustee or the Paying Agent, as applicable,
shall make withdrawals from the Collection Account only for the following
purposes:
(i) to withdraw amounts deposited in the
Collection Account in error;
(ii) to pay to the Trustee all earned but
unpaid Trustee Fees and to pay certain costs and expenses of the
Trustee and Fiscal Agent pursuant to Section 7.01(c)(v) or 7.12;
(iii) to pay any tax-related expenses
pursuant to Section 10.01(c);
(iv) to pay any federal, state or local tax
required to be paid out of the Collection Account pursuant to Section
10.01(h);
(v) to pay any other expenses of the Trust
required to be paid out of the Collection Account pursuant to any of
the Transaction Documents;
(vi) to pay to the Servicer the amount
certified by the Servicer to be unpaid Servicing Fees and to pay to the
Special Servicer the amount certified by the Special Servicer to be
unpaid Special Servicing Basic Fees and Special Servicing Supplemental
Fees, in each case, from the interest portion of any P&I Advance made
by the Trustee or the Fiscal Agent directly into the Collection Account
in respect of the Mortgage Loan or REO Loan as to which any such fee
was earned;
(vii) to make distributions to the Holders
of the Certificates pursuant to Sections 6.01 and 6.02; and
(viii) to clear and terminate the Collection
Account pursuant to Section 8.02.
Section 5.06 SALE OF DEFAULTED MORTGAGE LOANS. In the event
that the Trustee receives any bid or bids from any Person to purchase for cash
any Defaulted Mortgage Loan, then the Special Servicer, on behalf of the
Trustee, shall sell such Mortgage Loan on a cash only basis to the highest
bidder; provided that the price shall not be less than the Purchase Price. The
Trustee shall be under no obligation to solicit such bids. The procedure used in
transferring such Mortgage Loan shall be the same as set forth in Section 2.04
above, provided that the bidder shall pay all costs in connection therewith, and
the Trustee shall have received an Opinion of Counsel, the expense of which
shall be paid by such bidder, to the effect that such purchase as provided in
this Section 5.06 will not cause (i) a loss of REMIC status for REMIC I, REMIC
II or REMIC III, or (ii) a gain on prohibited transactions imposed by Section
860F(a) of the Code or (iii) any of REMIC I, REMIC II or REMIC III to be subject
to any tax under the
82
<PAGE>
REMIC Provisions. Proceeds received from any such sale shall constitute
"Liquidation Proceeds", and the portion thereof constituting Net Liquidation
Proceeds shall be delivered to the Servicer for deposit in the Custodial
Account.
Section 5.07 SALE OF DEFAULTED MORTGAGE LOANS AND REO
PROPERTIES.
(a) Unless the terms of Section 5.06 apply, the Special
Servicer may, subject to any rights of the Operating Adviser to approve or
direct the actions of the Special Servicer in connection therewith pursuant to
Section 5.10, offer to sell for cash to any Person any Defaulted Mortgage Loan
or any REO Property (at the Purchase Price therefor), but in any event, shall so
offer to sell any REO Property no later than the time determined by the Special
Servicer to be sufficient to result in the sale of such REO Property on or prior
to the date specified in Section 4.15 of the Special Servicing Agreement. The
Special Servicer shall give the Operating Adviser and the Trustee not less than
five days' prior written notice of its intention to sell any Defaulted Mortgage
Loan or REO Property, and thereafter, subject to any rights of the Operating
Adviser to approve or direct the actions of the Special Servicer in connection
therewith, the Special Servicer shall offer such Defaulted Mortgage Loan or REO
Property for sale in a fair auction or other manner consistent with the
servicing standards set forth in Section 4.01 of the Special Servicing Agreement
and shall (subject to the next paragraph) accept the highest cash bid received
from any Person for any Defaulted Mortgage Loan or any REO Property in an amount
at least equal to the Purchase Price therefor; provided that, in the absence of
any such bid, the Special Servicer shall (subject to the next paragraph) accept
the highest bid received from any Person that is determined by the Special
Servicer (or, if the Special Servicer or any Affiliate thereof would otherwise
be the winning bidder, by the Trustee in consultation with the Operating
Adviser) to be a fair price for such Defaulted Mortgage Loan or REO Property.
Notwithstanding anything to the contrary herein, neither the Trustee, in its
individual capacity, nor any of its Affiliates may bid for or purchase any
Defaulted Mortgage Loan or REO Property pursuant hereto.
Unless so directed by the Operating Adviser, the Special
Servicer shall not be obligated by the foregoing paragraph or otherwise to
accept the highest bid if the Special Servicer determines, in accordance with
the servicing standards stated in Section 4.01 of the Special Servicing
Agreement, that rejection of such bid would be in the best interests of the
Certificateholders. In addition, the Special Servicer may, unless the Operating
Adviser directs otherwise, accept a lower bid of a Person other than an
Interested Person if it determines, in accordance with the servicing standards
stated in Section 4.01 of the Special Servicing Agreement, that acceptance of
such bid would be in the best interests of the Certificateholders (for example,
if the prospective buyer making the lower bid is more likely to perform its
obligations, or the terms offered by the prospective buyer making the lower bid
are more favorable). The Special Servicer, after consultation with the Operating
Adviser, shall determine no later than six months prior to the end of the
two-year period referred to in Section 4.15 of the Special Servicing Agreement
with respect to any REO Property whether a sale of such REO Property pursuant to
any bids being made with respect thereto is in the best interests of the
Certificateholders. If the Special Servicer so determines, after consultation
with the Operating Adviser, that such a sale would not be in the best interests
of the Certificateholders, the Special Servicer shall seek an extension of such
two-year period in the manner described in Section 4.15 of the Special Servicing
Agreement.
83
<PAGE>
The Special Servicer shall not follow any direction of the
Operating Adviser in connection with this Section 5.07(a) unless such direction
satisfies the requirements of Section 5.10(c).
(b) In determining whether the price to be paid by the Special
Servicer or any Affiliate thereof represents a fair price for any Defaulted
Mortgage Loan or REO Property, the Trustee may conclusively rely on the opinion
of a Qualified Appraiser retained by the Special Servicer at the expense of the
Trust payable out of the Collection Account. In determining whether any bid or
the price to be paid by the Special Servicer or any Affiliate thereof
constitutes a fair price for any Defaulted Mortgage Loan or REO Property, the
Special Servicer shall take into account, and any appraiser shall be instructed
to take into account, as applicable, among other factors, the period and amount
of any delinquency on the affected Defaulted Mortgage Loan, the physical
condition of the related Mortgaged Property or such REO Property, the state of
the local economy and, subject to any extension thereof obtained as contemplated
above, the Trust's obligation to dispose of any REO Property within the two-year
period specified in Section 4.15 of the Special Servicing Agreement.
(c) Subject to the provisions of Section 4.15 of the Special
Servicing Agreement, the Special Servicer shall act on behalf of the Trust Fund
in negotiating and taking any other action necessary or appropriate in
connection with the sale of any Defaulted Mortgage Loan or REO Property,
including the collection of all amounts payable in connection therewith. Any
sale of a Defaulted Mortgage Loan or any REO Property shall be without recourse
to, or representation or warranty by, the Trustee, the Depositor, the Servicer,
the Special Servicer or the Trust (except that any contract of sale and
assignment and conveyance documents may contain customary warranties of title,
so long as the only recourse for breach thereof is to the Trust), and, if
consummated in accordance with the terms of this Agreement, none of the
Servicer, the Special Servicer, the Depositor or the Trustee shall have any
liability to the Trust or any Certificateholder with respect to the purchase
price therefor accepted by the Special Servicer or the Trustee.
(d) The proceeds of any sale, after deduction of the expenses
of such sale incurred in connection therewith, shall constitute Net Liquidation
Proceeds and shall be deposited within one Business Day in the Custodial
Account.
Section 5.08 OPERATING ADVISER; ELECTIONS.
(a) Certificateholders representing more than 50% by
Certificate Principal Amount of the Certificates of the then Controlling Class
shall in accordance with this Section 5.08 be entitled to vote to elect an
adviser (the "OPERATING ADVISER") having the powers specified in Section 5.10.
Upon (i) the receipt by the Trustee of written requests for an election of an
Operating Adviser from Certificateholders representing more than 50% by
Certificate Principal Amount of the Certificates of the then Controlling Class,
(ii) the resignation or removal of the Person acting as Operating Adviser or
(iii) a determination by the Trustee that the Controlling Class has changed, an
election of a successor Operating Adviser shall be held commencing as soon as
practicable thereafter. The Operating Adviser shall be elected for the purpose
of advising, approving and directing the actions of the Special Servicer
specified herein in respect of the Specially Serviced Mortgage Loans.
84
<PAGE>
(b) After any such receipt, resignation, removal or
determination contemplated by Section 5.08(a), the Trustee shall, for purposes
of electing an Operating Adviser, call a meeting of the Holders of the
Controlling Class. Notice of the meeting of such Holders shall be mailed or
delivered to each such Holder not less than 10 nor more than 60 days prior to
the meeting. The notice shall state the place and the time of the meeting, which
may be held by telephone. Certificateholders representing a majority of
Certificate Principal Amount of the Certificates of the Controlling Class,
present in person or represented by proxy, shall constitute a quorum for the
nomination of an Operating Adviser. At the meeting, each such Holder shall be
entitled to nominate one Person to act as Operating Adviser. The Trustee shall
cause the election of the Operating Adviser to be held as soon thereafter as
convenient.
(c) Each Holder of the Certificates of the Controlling Class
shall be entitled to vote in each election of the Operating Adviser. The voting
in each election of the Operating Adviser shall be in writing mailed, delivered
or sent by courier and actually received by the Trustee on or prior to the date
of such election. Immediately upon receipt by the Trustee of votes (which have
not been rescinded) from the Holders of Certificates representing more than 50%
by Certificate Principal Amount of the Certificates of the then Controlling
Class, which votes are cast for a single Person, such Person shall be, upon such
Person's acceptance, the Operating Adviser. Prior to the election of the initial
Operating Adviser, and in the event that an Operating Adviser shall have
resigned or been removed and a successor Operating Adviser shall not have been
elected, there shall be no Operating Adviser. Notwithstanding anything to the
contrary herein or in any other Transaction Document, the Special Servicer shall
not have any right or obligation to notify, to consult with, or to seek and/or
obtain approval or direction from an Operating Adviser, and the Special Servicer
may act in accordance with the provisions of the Transaction Documents without
providing such notice, engaging in such consultation or seeking or obtaining
such approval or direction, in any event during the period prior to the initial
selection of an Operating Adviser and, if the Operating Adviser resigns or is
removed, during the period following such resignation or removal until a
replacement is selected.
(d) The Operating Adviser may be removed at any time by the
written vote, copies of which must be delivered to the Trustee, of more than 50%
by Certificate Principal Amount of the Holders of the Certificates of the then
Controlling Class.
(e) The Trustee shall act as judge of each election of an
Operating Adviser and, absent manifest error, the determination of the results
of any such election by the Trustee shall be conclusive. Notwithstanding any
other provisions of this Section 5.08, the Trustee may make such reasonable
regulations as it may deem advisable for any such election.
Section 5.09 LIMITATION ON LIABILITY OF OPERATING ADVISER. The
Operating Adviser shall not have any liability to the Trust Fund or the
Certificateholders for any action taken, or for refraining from the taking of
any action, in good faith pursuant to this Agreement, or for errors in judgment;
provided that this provision shall not protect the Operating Adviser against any
liability which would otherwise be imposed by reason of willful misfeasance, bad
faith or negligence in the performance of duties or by reason of reckless
disregard of obligations or duties. By its acceptance of a Certificate, each
Certificateholder confirms its understanding that the Operating Adviser may take
actions that favor the interests of one or more Classes of the Certificates over
other Classes of the Certificates and that the Operating Adviser may have
85
<PAGE>
special relationships and interests that conflict with those of Holders of some
Classes of the Certificates, and further, each Certificateholder agrees to take
no action against the Operating Adviser or any of its respective officers,
directors, employees, principals or agents as a result of such a special
relationship or conflict.
Section 5.10 DUTIES OF OPERATING ADVISER.
(a) Prior to the Special Servicer taking any of the following
actions, the Special Servicer shall notify the Operating Adviser, if any, in
writing, of its intention to take such action (with a copy of such notice to be
forwarded to the Holders of the Controlling Class); and, subject to Section
5.10(c), if there is an Operating Adviser, the Special Servicer shall refrain
from taking such action if such Operating Adviser shall have objected to such
action in writing within five Business Days of receiving such notice (if a
written objection to such action has not been received by the Special Servicer
within such five Business Day period, then the Operating Adviser's approval will
be deemed to have been given):
(i) any foreclosure upon or comparable conversion
(which may include acquisition of an REO Property) of the ownership of
properties securing such of the Specially Serviced Mortgage Loans as
come into and continue in default;
(ii) any modification of a Money Term of a Mortgage
Loan other than a modification consisting of the extension of the
Maturity Date of a Mortgage Loan for one year or less;
(iii) any proposed sale of a Defaulted Mortgage Loan
or REO Property (other than upon termination of the Trust Fund pursuant
to Article VIII);
(iv) any determination to bring an REO Property into
compliance with Environmental Laws;
(v) any acceptance of substitute or additional
collateral for a Mortgage Loan;
(vi) any waiver of a "due-on-sale" or
"due-on-encumbrance" clause; and
(vii) any acceptance of an assumption agreement
releasing a Mortgagor from liability under a Mortgage Loan.
(b) In addition, the Operating Adviser may direct the Special
Servicer to take, or to refrain from taking, such other actions as the Operating
Adviser may deem advisable or as to which provision is otherwise made herein.
(c) The Special Servicer shall ignore any objection of the
Operating Adviser delivered pursuant to Section 5.10(a), and shall refuse to
follow any direction of the Operating Adviser given pursuant to Section 5.10(b),
if acting or refraining from acting, as the case may be, in accordance with such
objection or direction would be inconsistent with Accepted Servicing Practices
or, in the case of any such direction, would require or cause the Special
Servicer to
86
<PAGE>
violate any other provision of the Transaction Documents, including, without
limitation, the Special Servicer's obligation to act in accordance with the
servicing standards set forth in Section 4.01 of the Special Servicing
Agreement, or expose the Servicer, the Special Servicer, the Trust or the
Trustee to liability, or materially expand the scope of the Special Servicer's
responsibilities under the Transaction Documents.
Section 5.11 REPORTS TO CERTIFICATEHOLDERS.
(a) On each Distribution Date, the Trustee shall
deliver or cause to be delivered by first class mail to each Certificateholder,
the Depositor, the Servicer, the Special Servicer and the Rating Agencies a
written report (a "DISTRIBUTION DATE STATEMENT") setting forth the following
information:
(i) the aggregate amount of the distribution
to be made on such Distribution Date to the Holders of each Class of
REMIC III Regular Certificates applied to reduce the Aggregate
Certificate Principal Amount thereof;
(ii) the aggregate amount of the
distribution to be made on such Distribution Date to the Holders of
each Class of REMIC III Regular Certificates allocable to (A)
Distributable Certificate Interest and (B) Net Prepayment Premiums;
(iii) the aggregate amount, if any, of the
distribution to the Holders of each Class of Residual Certificates;
(iv) the Aggregate Certificate Principal
Amount or Aggregate Certificate Notional Amount, as the case may be, of
each Class of REMIC III Regular Certificates, before and after giving
effect to payments allocated to principal reported under subclause (i)
above, and separately identifying any reduction of any of the foregoing
amounts due to Realized Losses and/or Additional Expense Losses;
(v) the aggregate Distributable Certificate
Interest remaining unpaid, if any, for each Class of REMIC III Regular
Certificates, after giving effect to the payments allocated to interest
reported under subclause (ii)(A) above;
(vi) the Certificate Interest Rate for each
Class of REMIC III Regular Certificates applicable to such Distribution
Date;
(vii) the reduction in Aggregate Stated
Principal Amount of the Mortgage Pool as a result of repurchases of
Mortgage Loans and/or REO Properties by the Depositor from the Trust
during the related Collection Period;
(viii) the Aggregate Scheduled Principal
Balance of the Mortgage Pool at the close of business on the related
Determination Date and the Aggregate Stated Principal Balance of the
Mortgage Pool at the close of business on such Distribution Date;
87
<PAGE>
(ix) the number and aggregate Unpaid
Principal Balance of Mortgage Loans (A) delinquent one month, (B)
delinquent two months, (C) delinquent three or more months, (D) that
are Specially Serviced Mortgage Loans that are not delinquent, or (E)
as to which foreclosure proceedings have been commenced;
(x) with respect to any Mortgage Loan that
became a REO Loan during the related Collection Period, the Scheduled
Principal Balance, Stated Principal Balance and Unpaid Principal
Balance of such Mortgage Loan as of the date it became a REO Loan;
(xi) with respect to any REO Property
included in the Trust Fund at the close of business on the related
Determination Date (A) the loan number of the related Mortgage Loan,
(B) the book value of such REO Property, and (C) the aggregate amount
of Net REO Income and other revenues collected by the Special Servicer
with respect to such REO Property during the related Collection Period
and the portion thereof included in the Available Distribution Amount
for such Distribution Date;
(xii) with respect to any Mortgage Loan or
REO Property as to which a Final Recovery Determination was made by the
Servicer during the related Collection Period, the loan number of such
Mortgage Loan or, in the case of an REO Property, of the related
Mortgage Loan, the amount of Liquidation Proceeds and/or other amounts,
if any, received thereon during such Collection Period and the portion
thereof included in the Available Distribution Amount for such
Distribution Date, and any resulting Liquidation Realized Loss;
(xiii) with respect to any Mortgage Loan
that became a Deleted Mortgage Loan during the related Collection
Period, the loan number of such Mortgage Loan, and the amount of
Repurchase Proceeds received thereon and the portion thereof included
in the Available Distribution Amount for such Distribution Date;
(xiv) the aggregate amount of Principal
Prepayments made during the related Collection Period and any Net
Aggregate Prepayment Interest Shortfall for such Distribution Date;
(xv) the number of outstanding Mortgage
Loans and the aggregate Unpaid Principal Balance of such Mortgage Loans
at the close of business on the related Determination Date;
(xvi) the aggregate amount of Servicing
Advances and P&I Advances outstanding at the close of business on the
related Determination Date which have been made by the Servicer, the
Trustee and/or the Fiscal Agent;
(xvii) the aggregate amount of servicing
compensation retained by or paid to the Servicer and the Special
Servicer during the related Due Period;
88
<PAGE>
(xviii) the amount of Realized Losses and/or
Additional Expense Losses, if any, incurred with respect to the
Mortgage Pool during the related Collection Period; and
(xix) the aggregate amount of Realized
Losses and/or Additional Expense Losses incurred since the Cut-off Date
but not allocated as of the close of business on such Distribution
Date.
In the case of information furnished pursuant to subclauses
(i), (ii) and (iv) above, the amounts shall be expressed as a dollar amount per
$1,000 of original Certificate Principal Amount or Certificate Notional Amount,
as the case may be, of a REMIC III Regular Certificate.
In addition, the Trustee shall so deliver or cause to be
delivered to such parties, at the same time that the report described above is
delivered, each (u) Delinquent Loan Status Report, (v) REO Status Report, (w)
Historical Loan Modification Report, (x) Historical Liquidation Loss Report, (y)
Comparative Financial Status Report and (z) Watchlist Report that has been
received by the Trustee since the prior Distribution Date.
(b) Upon the reasonable advance written request of
any Certificateholder that is a savings and loan association, bank, or insurance
company, the Trustee or the Servicer shall provide to the extent that it is in
possession of the reports, information and documentation specified in this
paragraph, to each such Certificateholder such reports and access to information
and documentation regarding the Mortgage Loans and the Certificates as such
Certificateholder may reasonably deem necessary to comply with applicable
regulations of the Office of Thrift Supervision or successor or other regulatory
authorities with respect to investment in the Certificates; provided that the
Trustee or Servicer, as the case may be, shall be entitled to be reimbursed by
such Certificateholder for the Trustee's or Servicer's actual expenses incurred
in providing such reports and access.
(c) Within a reasonable period of time after the end
of each calendar year, the Trustee shall send to each Person who at any time
during the calendar year was a Certificateholder of record a report summarizing
on an annual basis (if appropriate) the relevant items provided to
Certificateholders pursuant to clauses (i), (ii), (iii) and (xvii) of the first
paragraph of Section 5.11(a) and such other information as may be required to
enable such Holders to prepare their federal income tax returns. Such
information shall include the amount of original issue discount accrued on each
Class of Certificates held by Persons other than Holders exempted from the
reporting requirements and information regarding the expenses of the Trust Fund.
(d) On each Distribution Date, the Trustee shall
deliver or cause to be delivered by first class mail to each Certificateholder
and the Rating Agencies (i) a report containing information regarding the
Mortgage Loans as of the end of the related Due Period and Collection Period,
which report shall contain substantially the categories of information regarding
the Mortgage Loans set forth in the 1996-C2 Prospectus Supplement under the
caption "DESCRIPTION OF THE MORTGAGE POOL--Additional Mortgage Loan Information"
(calculated where applicable on the basis of the most recent relevant
information provided by
89
<PAGE>
the Mortgagors to the Servicer or the Special Servicer and by the Servicer or
the Special Servicer, as the case may be, to the Trustee) and such information
shall be presented in a tabular format substantially similar to the format
utilized in the 1996-C2 Prospectus Supplement under such caption and (ii) a
loan-by-loan listing showing loan number, property type, location, Unpaid
Principal Balance, latest annual debt service coverage ratio, Mortgage Rate,
paid through date, Maturity Date, net interest portion of the Scheduled Payment,
principal portion of the Scheduled Payment and any Prepayment Premiums received.
(e) Quarterly, commencing in April 1997, the Trustee
shall deliver or shall cause to be delivered by first class mail to each
Certificateholder and each Rating Agency a copy of the then most recent
Operating Statement Analyses of the Special Servicer prepared pursuant to
Section 2.03(e) of the Servicing Agreement.
(f) If any Certificate Owner does not receive through
the Depository or the Clearing Agency Participants any of the statements,
reports and/or other written information described above in this Section 5.11
that it would otherwise be entitled to if it were the Holder of a Physical
Certificate evidencing its ownership interest in the related Class of Book-Entry
Certificates, then the Trustee shall mail or cause the mailing of such
statements, reports and/or other written information to such Certificate Owner
upon the request of such Certificate Owner made in writing to the Corporate
Trust Office (accompanied by verification of such Certificate Owner's ownership
interest).
Such information regarding the Trust Fund as may be agreed
upon by the Depositor and the Trustee shall be available to any Person via
facsimile transmission from the Trustee through the Trustee's electronic
bulletin board system reachable at (714) 282-3990 or such other number as the
Trustee may specify to the Depositor and the Certificateholders. Any such Person
may obtain an account number on the Trustee's automated facsimile system and/or
request a Distribution Date Statement or certificate factor information to be
delivered to such Person's facsimile number by calling (312) 904-2200 (or, in
the case of certificate factor information, (800) 246-5761) or such other number
as the Trustee may specify to the Depositor and Certificateholders.
(g) Each month, the Trustee shall provide to the
Certificateholders, the Depositor, the Rating Agencies, the Operating Adviser
and Bloomberg, L.P., on a computerized database accessible by modem, current
information regarding the items listed on SCHEDULE III hereto to the extent
received from the Servicer.
(i) The Trustee shall provide to any
Certificateholder, the Depositor, any Rating Agency and the Operating Adviser,
upon request, any reports received by the Trustee from the Special Servicer that
the Trustee is not otherwise obligated by the terms of this Agreement to deliver
to Certificateholders, the Depositor, the Rating Agencies and the Operating
Adviser.
90
<PAGE>
Section 5.12 REPORTS BY TRUSTEE.
Based upon reports, documents and other information provided
to the Trustee by the Servicer and the Special Servicer pursuant to the
Transaction Documents, the Trustee shall file with the Commission, in respect of
the Trust and the Certificates, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may from time to time by rules and regulations
prescribe) required to be filed with the Commission pursuant to Section 13 or
15(d) of the 1934 Act. The Depositor shall reimburse the Trustee for reasonable
expenses incurred in connection with the filings required under this Section
5.12, including but not limited to, fees payable to the Trustee's counsel. In
addition, in the event that the Depositor determines that electronic filing
through the EDGAR System is required, the Depositor may either (x) pay a fee to
the Trustee that will be determined by the Trustee and the Depositor for each
filing by the Trustee as compensation for the processing of such filing, or (y)
cause the filing to be processed by the Depositor or its designee upon receipt
from the Trustee of the reports, documents and other information described
above. Notwithstanding the foregoing, the Depositor shall file with the
Commission, within fifteen days after the Closing Date, a Current Report on Form
8-K together with the Transaction Documents.
Section 5.13 OTHER INFORMATION AVAILABLE TO
CERTIFICATEHOLDERS.
The Trustee shall make available at its offices primarily
responsible for administration of the Trust Fund, during normal business hours,
for review by any Certificateholder, any Certificate Owner (provided that such
Certificate Owner provides verification of its ownership interest), the Rating
Agencies or any other Person to whom the Trustee reasonably believes such
disclosure is appropriate, originals or copies of, among other things, the
following items (except to the extent prohibited by applicable law or by the
terms of the Mortgage Loans): (a) the Transaction Documents and any amendments
thereto; (b) all Distribution Date Statements delivered to holders of the
relevant Class of Certificates since the Closing Date; (c) all annual officer's
certificates and accountants' reports delivered by the Servicer and the Special
Servicer to the Trustee since the Closing Date pursuant to Sections 4.16 and
4.17 of the Servicing Agreement (in the case of any such items delivered by the
Servicer) or pursuant to Sections 4.18 and 4.19 of the Special Servicing
Agreement (in the case of any such items delivered by the Special Servicer); (d)
the most recent property inspection report prepared by or on behalf of the
Special Servicer in respect of each Mortgaged Property; (e) the most recent
annual operating statements, if any, collected by or on behalf of the Special
Servicer in respect of each Mortgaged Property, together with any intervening
monthly or quarterly operating statements so collected in respect of such
Mortgaged Property; (f) the Mortgage Files, including, without limitation, any
and all modifications, waivers and amendments of the terms of a Mortgage Loan
entered into by the Servicer and/or the Special Servicer; (g) any and all
Officer's Certificates and other evidence delivered to or by the Trustee to
support the Servicer's, Trustee's or Fiscal Agent's determination that any
Advance was or, if made, would be a Nonrecoverable Advance; and (h) in the case
of a Holder of a Class F, Class G, Class H or Class J Certificate or any
prospective transferee of any such Certificate, a 1996-C2 PPM in the most recent
form delivered to the Trustee. Copies of any and all of the foregoing items will
be available from the Trustee upon request; however the Trustee will be
permitted to require payment by the requesting party of a sum sufficient to
cover the reasonable costs and expenses
91
<PAGE>
of providing such copies. The Trustee's obligation under this Section 5.13 to
make available any document to be provided to the Trustee by the Servicer or the
Special Servicer is subject to the Trustee's receipt of such document from the
Servicer or the Special Servicer, as the case may be.
92
<PAGE>
ARTICLE VI
DISTRIBUTIONS TO HOLDERS OF CERTIFICATES
Section 6.01 DISTRIBUTIONS GENERALLY. Subject to Sections 8.01
and 8.02 respecting the final distribution on the Certificates, on each
Distribution Date, the Trustee or the Paying Agent, on behalf of the Trustee,
shall withdraw from the Collection Account the Available Distribution Amount for
such date, together with any Net Prepayment Premiums then on deposit therein,
and distribute to each Certificateholder of record as of the close of business
on the immediately preceding Record Date, the amount or amounts to be
distributed to such Certificateholder pursuant to the provisions hereof.
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. Each such
distribution shall be made by check mailed to the relevant Holder's address as
it appears on the Certificate Register of the Certificate Registrar or, upon
written request of any Holder made to the Trustee or the Paying Agent at least
five Business Days prior to the related Record Date (or upon standing
instructions given to the Trustee or the Paying Agent on the Closing Date or
five Business Days prior to any Record Date, which instructions may be revoked
at any time thereafter upon written notice to the Trustee or the Paying Agent
five Business Days prior to the related Record Date), by wire transfer in
immediately available funds to an account specified in the request of such
Certificateholder; provided that (i) distributions to the Depository shall be
made by wire transfer of immediately available funds to the account specified
thereby and (ii) the final distribution in respect of any Certificate shall be
made only upon presentation and surrender of such Certificate at the Corporate
Trust Office in accordance with Section 8.02. Wire transfers, other than to the
Depository, will be made at the expense of the Holder requesting such wire
transfer by deducting a wire transfer fee from the related distribution. If any
payment required to be made on the Certificates is to be made on a day that is
not a Business Day, then such payment will be made on the next succeeding
Business Day without compensation for such delay.
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
Clearing Agency Participants in accordance with its normal procedures. Each
Clearing Agency Participant shall be responsible for disbursing such
distribution to the appropriate 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 appropriate Certificate Owners that it
represents. None of the Trustee, the Paying Agent, the Depositor, the Servicer,
the Special Servicer or the Fiscal Agent shall have any responsibility therefor
except as otherwise provided by this Agreement or applicable law.
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
93
<PAGE>
distributed on the Certificates. Distributions in reimbursement of Realized
Losses and Additional Expense Losses previously allocated to a Class of
Certificates shall not constitute distributions of principal and shall not
result in a reduction of the related Aggregate Certificate Principal Amounts.
Section 6.02 DISTRIBUTIONS OUT OF THE AVAILABLE DISTRIBUTION
AMOUNT; DISTRIBUTIONS OF NET PREPAYMENT PREMIUMS.
(a) On each Distribution Date, including, without limitation,
the Final Distribution Date, the Trustee (or the Paying Agent on behalf of the
Trustee) shall apply amounts on deposit in the Collection Account, in each case
up to the remaining portion of the Available Distribution Amount for such date,
in the following order of priority:
(i) to distributions of interest to the Holders of the Class A
Certificates and the Holders of the Class IO Certificates, PRO RATA as
between such Classes of Certificateholders in accordance with their
respective entitlements pursuant to 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 to the Holders of the Class
A Certificates, in an amount (not to exceed the Aggregate Certificate
Principal Amount of the Class A Certificates outstanding immediately
prior to such Distribution Date) equal to the entire Principal Payment
Amount for such Distribution Date;
(iii) to distributions to the Holders of the Class A
Certificates, in an amount equal to, and in reimbursement of, all
Realized Losses and Additional Expense Losses, if any, that were
previously allocated to the Class A 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 the Class B Certificates for such Distribution
Date and, to the extent not previously paid, for all prior Distribution
Dates;
(v) if the Aggregate Certificate Principal Amount of the Class
A Certificates has been reduced to zero, to distributions of principal
to the Holders of the Class B Certificates, in an amount (not to exceed
the Aggregate Certificate Principal Amount of the Class B Certificates
outstanding immediately prior to such Distribution Date) equal to the
entire Principal Payment Amount for such Distribution Date (net of any
portion thereof distributed on such Distribution Date to the Holders of
the Class A Certificates pursuant to clause (ii) above);
94
<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 Expense Losses, 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 the Class C Certificates for such Distribution
Date and, to the extent not previously paid, for all prior Distribution
Dates;
(viii) if the Aggregate Certificate Principal Amount of the
Class A and Class B Certificates has been reduced to zero, to
distributions of principal to the Holders of the Class C Certificates,
in an amount (not to exceed the Aggregate Certificate Principal Amount
of the Class C Certificates outstanding immediately prior to such
Distribution Date) equal to the entire Principal Payment Amount for
such Distribution Date (net of any portion thereof distributed on such
Distribution Date to the Holders of the Class A Certificates pursuant
to clause (ii) above or the Holders of the Class B Certificates
pursuant to clause (v) above);
(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 Expense Losses, 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 the Class D Certificates for such Distribution
Date and, to the extent not previously paid, for all prior Distribution
Dates;
(xi) if the Aggregate Certificate Principal Amount of the
Class A, Class B and Class C Certificates has been reduced to zero, to
distributions of principal to the Holders of the Class D Certificates,
in an amount (not to exceed the Aggregate Certificate Principal Amount
of the Class D Certificates outstanding immediately prior to such
Distribution Date) equal to the entire Principal Payment Amount for
such Distribution Date (net of any portion thereof distributed on such
Distribution Date to the Holders of the Class A Certificates pursuant
to clause (ii) above, the Holders of the Class B Certificates pursuant
to clause (v) above or the Holders of the Class C Certificates pursuant
to clause (viii) above);
(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 Expense Losses, 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 the Class E Certificates
95
<PAGE>
for such Distribution Date and, to the extent not previously paid, for
all prior Distribution Dates;
(xiv) if the Aggregate Certificate Principal Amount of the
Class A, Class B, Class C and Class D Certificates has been reduced to
zero, to distributions of principal to the Holders of the Class E
Certificates, in an amount (not to exceed the Aggregate Certificate
Principal Amount of the Class E Certificates outstanding immediately
prior to such Distribution Date) equal to the entire Principal Payment
Amount for such Distribution Date (net of any portion thereof
distributed on such Distribution Date to the Holders of the Class A
Certificates pursuant to clause (ii) above, the Holders of the Class B
Certificates pursuant to clause (v) above, the Holders of the Class C
Certificates pursuant to clause (viii) above or the Holders of the
Class D Certificates pursuant to clause (xi) above);
(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 Expense Losses, 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 the Class F Certificates for such Distribution
Date and, to the extent not previously paid, for all prior Distribution
Date;
(xvii) if the Aggregate Certificate Principal Amount of the
Class A, Class B, Class C, Class D and Class E Certificates has been
reduced to zero, to distributions of principal to the Holders of the
Class F Certificates, in an amount (not to exceed the Aggregate
Certificate Principal Amount of the Class F Certificates outstanding
immediately prior to such Distribution Date) equal to the entire
Principal Payment Amount for such Distribution Date (net of any portion
thereof distributed on such Distribution Date to the Holders of the
Class A Certificates pursuant to clause (ii) above, the Holders of the
Class B Certificates pursuant to clause (v) above, the Holders of the
Class C Certificates pursuant to clause (viii) above, the Holders of
the Class D Certificates pursuant to clause (xi) above or the Holders
of the Class E Certificates pursuant to clause (xiv) above);
(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 Expense Losses, 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 the Class G Certificates for such Distribution
Date and, to the extent not previously paid, for all prior Distribution
Dates;
96
<PAGE>
(xx) if the Aggregate Certificate Principal Amount of the
Class A, Class B, Class C, Class D, Class E and Class F Certificates
has been reduced to zero, to distributions of principal to the Holders
of the Class G Certificates, in an amount (not to exceed the Aggregate
Certificate Principal Amount of the Class G Certificates outstanding
immediately prior to such Distribution Date) equal to the entire
Principal Payment Amount for such Distribution Date (net of any portion
thereof distributed on such Distribution Date to the Holders of the
Class A Certificates pursuant to clause (ii) above, the Holders of the
Class B Certificates pursuant to clause (v) above, the Holders of the
Class C Certificates pursuant to clause (viii) above, the Holders of
the Class D Certificates pursuant to clause (xi) above, the Holders of
the Class E Certificates pursuant to clause (xiv) above or the Holders
of the Class F Certificates pursuant to clause (xvii) above);
(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 Expense Losses, if any, that were
previously allocated to the Class G Certificates and that remain
unreimbursed immediately prior to such Distribution Date;
(xxii) to distributions of interest to the Holders of the
Class H Certificates, in an amount equal to all Distributable
Certificate Interest in respect of the Class H Certificates for such
Distribution Date and, to the extent not previously paid, for all prior
Distribution Dates;
(xxiii) if the Aggregate Certificate Principal Amount of the
Class A, Class B, Class C, Class D, Class E, Class F and Class G
Certificates has been reduced to zero, to distributions of principal to
the Holders of the Class H Certificates, in an amount (not to exceed
the Aggregate Certificate Principal Amount of the Class H Certificates
outstanding immediately prior to such Distribution Date) equal to the
entire Principal Payment Amount for such Distribution Date (net of any
portion thereof distributed on such Distribution Date to the Holders of
the Class A Certificates pursuant to clause (ii) above, the Holders of
the Class B Certificates pursuant to clause (v) above, the Holders of
the Class C Certificates pursuant to clause (viii) above, the Holders
of the Class D Certificates pursuant to clause (xi) above, the Holders
of the Class E Certificates pursuant to clause (xiv) above, the Holders
of the Class F Certificates pursuant to clause (xvii) above or the
Holders of the Class G Certificates pursuant to clause (xx) above);
(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 Expense Losses, 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 the Class J Certificates for such Distribution
Date and, to the extent not previously paid, for all prior Distribution
Dates;
97
<PAGE>
(xxvi) if the Aggregate Certificate Principal Amount of the
Class A, Class B, Class C, Class D, Class E, Class F, Class G and Class
H Certificates has been reduced to zero, to distributions of principal
to the Holders of the Class J Certificates, in an amount (not to exceed
the Aggregate Certificate Principal Amount of the Class J Certificates
outstanding immediately prior to such Distribution Date) equal to the
entire Principal Payment Amount for such Distribution Date (net of any
portion thereof distributed on such Distribution Date to the Holders of
the Class A Certificates pursuant to clause (ii) above, the Holders of
the Class B Certificates pursuant to clause (v) above, the Holders of
the Class C Certificates pursuant to clause (viii) above, the Holders
of the Class D Certificates pursuant to clause (xi) above, the Holders
of the Class E Certificates pursuant to clause (xiv) above, the Holders
of the Class F Certificates pursuant to clause (xvii) above, the
holders of the Class G Certificates pursuant to clause (xx) above or
the Holders of the Class H Certificates pursuant to clause (xxiii)
above);
(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 Expense Losses, if any, that were
previously allocated to the Class J Certificates and that remain
unreimbursed immediately prior to such Distribution Date;
(xxviii) to distributions to the Holders of the Class R-II
Certificates, in an amount equal to the excess, if any, of the
aggregate distributions of principal and interest and reimbursements of
previously allocated Realized Losses and Additional Expense Losses
deemed made to REMIC II with respect to the REMIC I Regular Interests
on such Distribution Date pursuant to Section 6.05(a), over the
aggregate distributions of principal and interest and reimbursements of
previously allocated Realized Losses and Additional Expense Losses
deemed made to REMIC III with respect to the REMIC II Regular Interests
on such Distribution Date pursuant to Section 6.04(a); and
(xxix) 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 (xxviii) above;
provided that, notwithstanding anything to the contrary herein, on the Final
Distribution Date, the distributions of principal to be made pursuant to clauses
(ii), (v), (viii), (xi), (xiv), (xvii), (xx), (xxiii) and (xxvi) above shall, in
each such case, subject to the then remaining portion of the Available
Distribution Amount for such date, be made to the Holders of the relevant Class
of Sequential Pay Certificates otherwise entitled to distributions of principal
pursuant to such clause in an amount equal to the entire Aggregate Certificate
Principal Amount of such Class outstanding immediately prior to the Final
Distribution Date.
(b) On each Distribution Date, except as otherwise provided
below, the Trustee (or the Paying Agent on behalf of the Trustee) shall withdraw
from the Collection Account any amount on deposit therein that represents any
Prepayment Premium collected on a Mortgage Loan during the related Collection
Period, exclusive of any portion thereof that constitutes Retained Yield, and
the Trustee (or such Paying Agent) shall thereupon distribute such amount,
separate from but in the same manner as the Available Distribution Amount for
98
<PAGE>
such date, to the Holders of the Class IO Certificates and Holders of the
respective Classes of Sequential Pay Certificates then entitled to distributions
of principal, PRO RATA, in an amount equal to the PV Yield Loss Amount for each
such Class of Certificates in respect of the particular prepayment of principal
as to which such Prepayment Premium was received.
If the amount of any such Prepayment Premium (exclusive of any portion
thereof that constitutes Retained Yield) distributed in accordance with the
preceding paragraph on any Distribution Date exceeds the aggregate PV Yield Loss
Amount for the REMIC III Regular Certificates in respect of the prepayment of
principal in connection with which such Prepayment Premium was received, then
the Trustee (or the Paying Agent on behalf of the Trustee) shall distribute 70%
of such excess to the holders of the Class of Sequential Pay Certificates with
the earliest alphabetical Class designation that had an aggregate Certificate
Principal Amount greater than zero immediately prior to such Distribution Date,
but which was not entitled to any distribution of principal on such Distribution
Date, and the Trustee (or the Paying Agent on behalf of the Trustee) shall
distribute the remaining 30% of such excess to the Holders of the Class of
Sequential Pay Certificates with the second earliest alphabetical Class
designation that had an aggregate Certificate Principal Amount greater than zero
immediately prior to such Distribution Date, but which was not entitled to any
distribution of principal on such Distribution Date; provided that, if only one
Class of Sequential Pay Certificates with an aggregate Certificate Principal
Amount greater than zero immediately prior to such Distribution Date was not
entitled to any distribution of principal on such Distribution Date, then the
entire amount of such excess shall be distributed to the Holders of such Class;
and provided, further, that, if every Class of Sequential Pay Certificates with
an aggregate Certificate Principal Amount greater than zero immediately prior to
such Distribution Date was entitled to distributions of principal on such
Distribution Date, then the entire amount of such excess shall be distributed to
the Holders of the Class R-II Certificates.
Notwithstanding the foregoing, on each Distribution Date, provided that
the Aggregate Certificate Notional Amount of the Class IO Certificates was
greater than zero immediately prior to such Distribution Date, the Trustee (or
the Paying Agent on behalf of the Trustee) shall distribute entirely to the
Holders of the Class IO Certificates any Prepayment Premium (net of the portion
thereof, if any, that constitutes Retained Yield) that was collected during the
related Collection Period and as to which each of the following conditions
apply: (i) the related prepaid Mortgage Loan or REO Loan provides that the
amount of such Prepayment Premium was to be calculated as the greater of (x)
1.0% of the related prepayment of principal and (y) the result of a specified
"treasury" yield maintenance formula; and (ii) such related Prepayment Premium
was calculated in accordance with the foregoing to equal 1.0% of the related
prepayment of principal.
Section 6.03 ALLOCATION OF REALIZED LOSSES AND ADDITIONAL
EXPENSE LOSSES TO THE REMIC III CERTIFICATES.
On each Distribution Date, following the distributions to be
made on the Certificates on such date pursuant to Sections 6.01 and 6.02, the
Trustee shall allocate to the respective Classes of Sequential Pay Certificates
as follows the aggregate of all Realized Losses and Additional Expense Losses
that were incurred at any time following the Cut-off Date through the end of the
related Collection Period and that were not previously allocated pursuant
99
<PAGE>
to this Section 6.03 on any prior Distribution Date, but only to the extent that
(i) the Aggregate Certificate Principal Amount of the Sequential Pay
Certificates as of such Distribution Date (after taking into account all of the
distributions made on such Distribution Date pursuant to Sections 6.01 and 6.02,
but before taking into account any allocations of Realized Losses and Additional
Expense Losses to be made on such Distribution Date pursuant to this Section
6.03), exceeds (ii) the aggregate Stated Principal Balance of the Mortgage Pool
that will be outstanding immediately following such Distribution Date: FIRST, to
the Class J Certificates, until the remaining Aggregate Certificate Principal
Amount thereof has been reduced to zero; SECOND, to the Class H Certificates,
until the remaining Aggregate Certificate Principal Amount thereof has been
reduced to zero; THIRD, to the Class G Certificates, until the remaining
Aggregate Certificate Principal Amount thereof has been reduced to zero; FOURTH,
to the Class F Certificates, until the remaining Aggregate Certificate Principal
Amount thereof has been reduced to zero; FIFTH, to the Class E Certificates,
until the remaining Aggregate Certificate Principal Amount thereof has been
reduced to zero; SIXTH, to the Class D Certificates, until the remaining
Aggregate Certificate Principal Amount thereof has been reduced to zero;
SEVENTH, to the Class C Certificates, until the remaining Aggregate Certificate
Principal Amount thereof has been reduced to zero; EIGHTH, to the Class B
Certificates, until the remaining Aggregate Certificate Principal Amount thereof
has been reduced to zero; and LAST, to the Class A Certificates, until the
remaining Aggregate Certificate Principal Amount thereof has been reduced to
zero. Any allocation of Realized Losses and Additional Expense Losses to a Class
of Sequential Pay Certificates shall be made by reducing the Aggregate
Certificate Principal Amount thereof by the amount so allocated. All Realized
Losses and Additional Expense Losses, if any, allocated to a Class of Sequential
Pay Certificates shall be allocated among the respective Certificates of such
Class in proportion to the Percentage Interests evidenced thereby. All Realized
Losses and Additional Expense Losses, if any, that have not been allocated to
the Sequential Pay Certificates as of the Distribution Date on which the
Aggregate Certificate Principal Amount of such Certificates has been reduced to
zero, shall be deemed allocated to the Residual Certificates.
Section 6.04 DEEMED DISTRIBUTIONS ON, AND ALLOCATIONS OF
REALIZED LOSSES AND ADDITIONAL EXPENSE LOSSES TO, THE REMIC II REGULAR
INTERESTS.
(a) On each Distribution Date, including, without limitation,
the Final Distribution Date:
(i) all distributions of Distributable Certificate Interest to
be made in respect of the Class IO Certificates on such Distribution
Date pursuant to Sections 6.01 and 6.02(a) shall be deemed to have
first been distributed on such Distribution Date from REMIC II to REMIC
III as Uncertificated Distributable Interest in respect of REMIC II
Regular Interest A, REMIC II Regular Interest B, REMIC II Regular
Interest C, REMIC II Regular Interest D, REMIC II Regular Interest E,
REMIC II Regular Interest F, REMIC II Regular Interest G, REMIC II
Regular Interest H and REMIC II Regular Interest J, in that order, in
each case up to an amount equal to the excess, if any, of (A) all
Uncertificated Distributable Interest deemed payable on such
Distribution Date (including, without limitation, from prior
Distribution Dates) in respect of such REMIC II Regular Interest, over
(B) all Distributable Certificate Interest payable on such Distribution
Date (including, without limitation, from prior Distribution Dates) in
respect
100
<PAGE>
of the Class of Sequential Pay Certificates with the same letter Class
designation as the letter designation for such REMIC II Regular
Interest;
(ii) all distributions of Distributable Certificate Interest
to be made in respect of each Class of Sequential Pay Certificates on
such Distribution Date pursuant to Sections 6.01 and 6.02(a) shall be
deemed to have first been distributed on such Distribution Date from
REMIC II to REMIC III as Uncertificated Distributable Interest in
respect of the REMIC II Regular Interest with the same letter
designation as the letter Class designation for such Class of
Sequential Pay Certificates; and
(iii) all distributions of principal, and reimbursements of
previously allocated Realized Losses and Additional Expense Losses, to
be made in respect of each Class of Sequential Pay Certificates on such
Distribution Date pursuant to Sections 6.01 and 6.02(a) shall be deemed
to have first been distributed from REMIC II to REMIC III
correspondingly as principal of, and reimbursements of Realized Losses
and Additional Expense Losses previously allocated to, the REMIC II
Regular Interest with the same letter designation as the letter Class
designation for such Class of Sequential Pay Certificates;
(b) All distributions of additional interest (in the form of
Net Prepayment Premiums) to be made in respect of the REMIC III Regular
Certificates pursuant to Sections 6.01 and 6.02(b) on any Distribution Date
shall be deemed to have first been distributed from REMIC II to REMIC III as
additional interest (in the form of Net Prepayment Premiums) in respect of REMIC
II Regular Interest A, REMIC II Regular Interest B, REMIC II Regular Interest C,
REMIC II Regular Interest D, REMIC II Regular Interest E, REMIC II Regular
Interest F, REMIC II Regular Interest G, REMIC II Regular Interest H and REMIC
II Regular Interest J, PRO RATA in accordance with the respective amounts of
Uncertificated Distributable Interest in respect of such REMIC II Regular
Interests for such Distribution Date.
(c) The actual distributions to be made by the Trustee on each
Distribution Date in respect of the REMIC III Certificates pursuant to Sections
6.01 and 6.02 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 6.04. Notwithstanding the deemed distributions on
the REMIC II Regular Interests described in this Section 6.04, actual
distributions of funds from the Collection Account shall be made only in
accordance with Sections 6.01 and 6.02.
(d) Each Realized Loss and Additional Expense Loss, if any, to
be allocated to any Class of Sequential Pay Certificates on any Distribution
Date shall be deemed to have first been allocated to the REMIC II Regular
Interest with the same letter designation as the letter Class designation for
such Class of Sequential Pay Certificates, with a corresponding reduction in the
Uncertificated Principal Amount of such REMIC II Regular Interest.
101
<PAGE>
Section 6.05 DEEMED DISTRIBUTIONS ON, AND ALLOCATIONS OF
REALIZED LOSSES AND ADDITIONAL EXPENSE LOSSES TO, THE REMIC I REGULAR INTERESTS.
(a) On each Distribution Date, including, without limitation,
the Final Distribution Date, the Trustee (or the Paying Agent on behalf of the
Trustee) shall be deemed to apply amounts on deposit in the Collection Account,
in each case up to the remaining portion of the Available Distribution Amount
for such date, in the following order of priority:
(i) to distributions of interest to REMIC II in
respect of the respective REMIC I Regular Interests, PRO RATA in
accordance with the respective amounts of interest payable in respect
of the REMIC I Regular Interests as described in this clause (i), in an
amount equal to all Uncertificated Distributable Interest and any
Outstanding Uncertificated Distributable Interest Shortfall in respect
of each REMIC I Regular Interest for such Distribution Date;
(ii) to distributions of principal to REMIC II in
respect of the respective REMIC I Regular Interests, PRO RATA in
accordance with, and to the extent of, in the case of each REMIC I
Regular Interest, an amount equal to the excess, if any, of the
Uncertificated Principal Amount of such REMIC I Regular Interest
outstanding immediately prior to such Distribution Date, over the
Stated Principal Balance of the related Mortgage Loan or REO Loan, as
the case may be, that will be outstanding immediately following such
Distribution Date; and
(iii) to distributions to REMIC II in respect of the
respective REMIC I Regular Interests, PRO RATA in accordance with the
respective amounts payable and reimbursable in respect of the REMIC I
Regular Interests as described in this clause (iii), in an amount equal
to, and in reimbursement of, all Realized Losses and Additional Expense
Losses, if any, that were previously allocated to each REMIC I Regular
Interest and that remain unreimbursed immediately prior to such
Distribution Date, together with interest on any such unreimbursed
losses at the REMIC I Remittance Rate for such REMIC I Regular
Interest.
(b) On each Distribution Date, the Trustee (or the Paying
Agent on behalf of the Trustee) shall be deemed to apply all amounts then on
deposit in the Collection Account that represent Net Prepayment Premiums
collected during or prior to the related Collection Period to distributions of
additional interest to REMIC II, in the case of each such Net Prepayment
Premium, in respect of the REMIC I Regular Interest created with respect to the
Mortgage Loan or REO Loan, as the case may be, as to which such Net Prepayment
Premium was received.
(c) With respect to each Distribution Date, the distributions
deemed to have been made with respect to the REMIC II Regular Interests on such
Distribution Date pursuant to Section 6.04 and the distributions actually made
with respect to the Class R-II and REMIC III Certificates on such Distribution
Date pursuant to Sections 6.01 and 6.02 shall be deemed to have been so made
from the amounts deemed distributed in respect of the REMIC I Regular Interests
on such Distribution Date pursuant to this Section 6.05. Notwithstanding the
deemed distributions on the REMIC I Regular Interests described in this Section
6.05, actual
102
<PAGE>
distributions of funds from the Collection Account shall be made only in
accordance with Sections 6.01 and 6.02.
(d) On each Distribution Date, following the deemed
distributions to be made in respect of the REMIC I Regular Interests pursuant to
Sections 6.05(a) and 6.05(b), the Uncertificated Principal Amount of each REMIC
I Regular Interest (after taking account of such deemed distributions) shall be
reduced to equal the Stated Principal Balance of the related Mortgage Loan or
REO Loan, as the case may be, that will be outstanding immediately following
such Distribution Date. Such reductions shall be deemed to be an allocation of
Realized Losses and Additional Expense Losses.
Section 6.06 NET AGGREGATE PREPAYMENT INTEREST SHORTFALLS.
(a) On each Distribution Date, any Net Aggregate Prepayment
Interest Shortfall for such date shall be allocated among the respective Classes
of REMIC III Regular Certificates, PRO RATA in accordance with the respective
amounts of Accrued Certificate Interest for each such Class for such
Distribution Date.
(b) On each Distribution Date, any Net Aggregate Prepayment
Interest Shortfall for such date shall be allocated among the respective REMIC
II Regular Interests, PRO RATA in accordance with the respective amounts of
Uncertificated Accrued Interest for each such REMIC II Regular Interest for such
Distribution Date.
(c) On each Distribution Date, any Net Aggregate Prepayment
Interest Shortfall for such date shall be allocated among the respective REMIC I
Regular Interests, PRO RATA in accordance with the respective amounts of
Uncertificated Accrued Interest for each such REMIC I Regular Interest for such
Distribution Date.
Section 6.07 ADJUSTMENT OF SERVICING FEES. The total Servicing
Fee payable to the Servicer shall be adjusted as provided in Section 2.05 of the
Servicing Agreement.
Section 6.08 COMPLIANCE WITH WITHHOLDING REQUIREMENTS.
Notwithstanding any other provision of the Transaction Documents to the
contrary, the Trustee and the Paying Agent, as the case may be, shall comply
with all federal withholding requirements with respect to payments to
Certificateholders of interest, original issue discount, or other amounts that
the Trustee or the Paying Agent reasonably believes are applicable under the
Code. The consent of Certificateholders shall not be required for any such
withholding. In the event the Paying Agent or the Trustee withholds any amount
from payments made to any Certificateholder pursuant to federal withholding
requirements, the Trustee shall indicate to such Certificateholder the amount
withheld.
103
<PAGE>
ARTICLE VII
CONCERNING THE TRUSTEE AND THE FISCAL AGENT
Section 7.01 DUTIES OF TRUSTEE AND FISCAL AGENT.
(a) The Trustee and the Fiscal Agent, prior to the
occurrence of an Event of Default and after the curing or waiver of all such
Events of Default, undertake to perform such duties and only such duties as are
specifically set forth in this Agreement and no implied covenants or obligations
shall be read into this Agreement against the Trustee or the Fiscal Agent. Any
permissive right of the Trustee or the Fiscal Agent provided for in this
Agreement shall not be construed as a duty of the Trustee or the Fiscal Agent.
The Trustee and the Fiscal Agent shall each exercise such of the rights and
powers vested in it by this Agreement and use the same degree of care and skill
in their exercise as a prudent Person would exercise or use under the
circumstances in the conduct of such Person's own affairs.
(b) 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 Trustee's review
of which is governed by Article II), the Trustee shall examine them to determine
whether they are in the form required by this Agreement; provided that the
Trustee shall not be responsible for the accuracy or content of any such
resolution, certificate, statement, opinion, report, document, order or other
instrument furnished by the Servicer or any other person to the Trustee pursuant
to this Agreement. If any such instrument is found on its face not to conform to
the requirements of this Agreement, the Trustee shall take such action as it
deems appropriate to have the instrument corrected, and if the instrument is not
corrected to the Trustee's reasonable satisfaction, the Trustee will provide
notice thereof to the Certificateholders.
(c) Neither the Trustee nor the Fiscal Agent nor any
of their respective directors, officers, employees or agents shall have any
liability arising out of or in connection with this Agreement, except for their
respective negligence or willful misconduct. No provision of this Agreement
shall be construed to relieve the Trustee or the Fiscal Agent or any of their
respective directors, officers, employees or agents from liability for their own
negligent action, their own negligent failure to act or their own willful
misconduct; provided that:
(i) Neither the Trustee nor the Fiscal Agent
nor any of their respective directors, officers, employees or agents
shall be personally liable with respect to any action taken, suffered
or omitted to be taken by it in good faith in accordance with this
Agreement or in accordance with the direction of Holders of
Certificates evidencing not less than a majority of the Aggregate
Certificate Principal Amount of the Certificates;
(ii) No provision of this Agreement shall
require the Trustee or the Fiscal Agent 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;
104
<PAGE>
(iii) Neither the Trustee nor the Fiscal
Agent nor any of their respective directors, officers, employees or
agents shall be responsible for any act or omission of any Custodian,
Paying Agent or Certificate Registrar that is not an Affiliate of the
Trustee and that is selected other than by the Trustee, performed or
omitted in compliance with any custodial or other agreement, or any act
or omission of the Servicer (unless the Trustee is acting in such
capacity), the Special Servicer (unless the Trustee is acting in such
capacity), the Depositor or the Seller, including, without limitation,
in connection with actions taken pursuant to this Agreement, the
Servicing Agreement or the Special Servicing Agreement;
(iv) The execution by the Trustee of any
forms or plans of liquidation in connection with REMIC I, REMIC II or
REMIC III shall not constitute a representation by the Trustee as to
the adequacy of such form or plan of liquidation;
(v) The Trustee and the Fiscal Agent shall
not be under any obligation to appear in, prosecute or defend any legal
action which is not incidental to their respective duties as Trustee
and Fiscal Agent in accordance with this Agreement (and, if either
does, all legal expenses and costs of such action shall be expenses and
costs of the Trust Fund, and the Trustee and the Fiscal Agent shall be
entitled to be reimbursed therefor from the Collection Account, unless
such legal action arises out of the negligence, bad faith or willful
misconduct of the Trustee or the Fiscal Agent, as the case may be, or
any breach of a representation, warranty or covenant of the Trustee or
the Fiscal Agent, as the case may be, contained herein or in either of
the other Transaction Documents); and
(vi) Neither the Trustee nor the Fiscal
Agent shall be charged with knowledge of any act, failure to act or
breach of any Person upon the occurrence of which the Trustee may be
required to act, unless a Responsible Officer of the Trustee or the
Fiscal Agent, as applicable, obtains actual knowledge of such failure.
Section 7.02 CERTAIN MATTERS AFFECTING THE TRUSTEE. (a) Except
as otherwise provided in Section 7.01:
(i) The Trustee and the Fiscal Agent may
request, and may rely 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, approval, bond or other paper
or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) The Trustee and the Fiscal Agent may
consult with counsel and the advice of such counsel and 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 with such advice or Opinion of Counsel;
(iii) Neither the Trustee nor the Fiscal
Agent nor any of their respective directors, officers, employees and
agents shall be personally liable for any
105
<PAGE>
action taken, suffered or omitted by it in good faith and reasonably
believed by any of them to be authorized or within the discretion or
rights or powers conferred upon any of them by this Agreement;
(iv) Neither the Trustee nor the Fiscal
Agent shall be under any obligation to exercise any of the powers
vested in it by this Agreement or to institute, conduct or defend any
litigation hereunder or relating hereto or to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document (provided the same
appears regular on its face), unless (in the case of the Trustee)
requested in writing to do so by Holders of Certificates entitled to at
least 25% of the Voting Rights; provided 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 it, by the
security afforded to it by the terms of this Agreement, the Trustee may
require reasonable indemnity against such expense or liability or
payment of such estimated expenses as a condition to proceeding. The
reasonable expenses incurred by the Trustee in connection with the
foregoing shall be paid by the requesting Certificateholders;
(v) 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, which agents or
attorneys shall have any or all of the rights, powers, duties and
obligations of the Trustee conferred on them by such appointment,
provided that the Trustee shall continue to be responsible for its
respective duties and obligations hereunder;
(vi) The Trustee and the Fiscal Agent shall
in no event be required to obtain a deficiency judgment against a
Mortgagor, except under the circumstances where the Trustee is acting
as successor to the Servicer or Special Servicer and to the extent the
Servicer or the Special Servicer would be so required in accordance
with the relevant Accepted Servicing Practices applicable to it;
(vii) 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 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;
(viii) Neither the Trustee nor the Fiscal
Agent shall be liable for any loss on any investment of funds pursuant
to this Agreement;
(ix) Unless otherwise specifically required
by law, the Trustee and the Fiscal Agent shall not be required to post
any surety or bond of any kind in connection with the execution or
performance of its duties hereunder;
(x) Following the Closing Date, the Trustee
shall not accept any contribution of assets to the Trust Fund not
specifically contemplated by this Agreement (i) unless the Trustee
shall have received a Nondisqualification Opinion at the expense
106
<PAGE>
of the Person desiring to contribute such assets, and (ii) if such
assets include real property, unless the Servicer has determined, based
on a report prepared at the expense of the Person desiring to
contribute such property, by an Independent Person who regularly
conducts environmental site assessments in accordance with then current
standards imposed by institutional commercial mortgage lenders and who
has had not less than five years experience in such matters (a copy of
which report shall be delivered to the Trustee), that such property is
in compliance with applicable Environmental Laws and that there are no
circumstances present at such property relating to the use, management
or disposal of any hazardous substances, hazardous materials, hazardous
wastes or petroleum-based materials for which investigation, testing,
monitoring, containment, clean-up or remediation could be required
under any Federal, state or local law or regulation; provided that in
making such determination the Servicer may rely conclusively on the
opinion of an environmental consultant retained by the Servicer at the
expense of the Trust payable out of the Collection Account; and
(xi) All rights of action under this
Agreement or under any of the Certificates, enforceable by the Trustee,
may be enforced by it without the possession of any of the
Certificates, or the production thereof at the trial or the proceeding
relating thereto, and any such suit, action or proceedings instituted
by the Trustee shall be brought in its name for the benefit of all the
Holders of such Certificates, subject to the provisions of this
Agreement.
Section 7.03 TRUSTEE AND THE FISCAL AGENT NOT LIABLE FOR
CERTIFICATES. The Trustee and the Fiscal Agent make no representations as to the
validity or sufficiency of this Agreement or of the Certificates (other than the
certificate of authentication on the Certificates if the Trustee is the
Authenticating Agent) or of any Mortgage Loan or related document save that each
of the Trustee and the Fiscal Agent represent that, assuming due execution and
delivery by the other parties hereto, this Agreement has been duly authorized,
executed and delivered by it and constitutes its valid and binding obligation,
enforceable against it in accordance with its terms except as such
enforceability may be subject to (A) applicable bankruptcy and insolvency laws
and other similar laws affecting the enforcement of the rights of creditors
generally, and (B) general principles of equity regardless of whether such
enforcement is considered in a proceeding in equity or at law. The Trustee and
the Fiscal Agent shall not be accountable for the use or application of any
funds paid to the Depositor in consideration of the assignment of the Mortgage
Loans to the Trust by the Depositor or any funds deposited into or withdrawn
from the Custodial Account or any other fund or account by or on behalf of the
Depositor, the Servicer or the Special Servicer (except to the extent that the
Trustee may be acting as successor to the Servicer or Special Servicer and in
such case, only to the extent that the Servicer or Special Servicer would be
accountable pursuant to the provisions of the Transaction Documents).
Section 7.04 TRUSTEE AND THE FISCAL AGENT MAY OWN
CERTIFICATES. The Trustee and the Fiscal Agent and any agent of the Trustee and
the Fiscal Agent in its individual or any other capacity may become the owner or
pledgee of Certificates with the same rights it would have if it were not
Trustee or the Fiscal Agent or such agent, as the case may be.
Section 7.05 ELIGIBILITY REQUIREMENTS FOR TRUSTEE. The Trustee
and any successor trustee hereunder shall at all times be (i) an institution
insured by the FDIC, (ii) a
107
<PAGE>
corporation, national bank or national banking association, organized and doing
business under the laws of the United States of America or any State thereof,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by federal or state authority and (iii) an institution whose
long-term senior unsecured debt is rated either (A) if a fiscal agent is then
currently in place, not less than (1) "Baa2" by Moody's, (2) "A-" by Fitch or
another nationally recognized statistical rating organization (other than
Moody's) and (3) "BBB" by D&P (or, if not rated by D&P, otherwise acceptable to
D&P), or (B) if a fiscal agent is not then in place, "Aa2" by Moody's and "AA"
by each of Fitch and D&P (or, in the case of each of clause (iii)(A) and
(iii)(B) above, such other lower rating by any Rating Agency as would not, as
evidenced in writing by such Rating Agency, adversely affect any of the ratings
then assigned thereby to the Certificates). If such corporation, national bank
or national 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 7.05, the combined
capital and surplus of such corporation, national bank or national 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 provisions of this Section
7.05, the Trustee shall resign immediately in the manner and with the effect
specified in Section 7.06. No Person shall become a successor trustee hereunder
if the succession of such Person would result in a qualification, downgrading or
withdrawal of any of the ratings then assigned by the Rating Agencies to the
Certificates.
Section 7.06 RESIGNATION AND REMOVAL OF TRUSTEE.
(a) The Trustee may at any time resign and be
discharged from the trust hereby created by giving written notice thereof to the
Depositor, the Servicer and the Rating Agencies. Upon receiving such notice of
resignation, the Depositor will promptly appoint a successor trustee by written
instrument, one copy of which instrument shall be delivered to the resigning
Trustee, one copy to the successor trustee and one copy to each of the Servicer,
the Special Servicer, the Fiscal Agent and the Rating Agencies. If no successor
trustee shall have been so appointed and shall have accepted appointment within
30 days after the giving of such notice of resignation, the resigning Trustee
may petition any court of competent jurisdiction for the appointment of a
successor trustee. Notwithstanding the foregoing provisions of this Section
7.06(a), no successor trustee shall be appointed unless the Rating Agencies
shall have confirmed in writing that the ratings on the Certificates will not be
qualified, downgraded or withdrawn by reason thereof.
(b) If at any time (i) the Trustee shall cease to be
eligible in accordance with the provisions of Section 7.05 and shall fail to
resign after written request therefor by the Depositor, (ii) the Trustee shall
become incapable of acting, or shall be adjudged a 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, or (iii)
the continued use of the Trustee would result in a qualification, downgrading or
withdrawal of the rating by the Rating Agencies of any Class of Certificates
with a rating as evidenced in writing by the Rating Agencies, then the Depositor
shall remove the Trustee and appoint a successor trustee by written instrument,
one copy of which instrument shall be delivered to the Trustee so removed, one
copy to the successor
108
<PAGE>
trustee, and one copy to each of the Servicer, the Special Servicer, the Fiscal
Agent and the Rating Agencies.
(c) The Holders of Certificates entitled to more than
50% of the Voting Rights may, for cause, upon 30 days' written notice to the
Trustee and to the Depositor remove the Trustee by such written instrument,
signed by such Holders or their attorney-in-fact duly authorized, one copy of
which instrument shall be delivered to the Depositor and one copy to the Trustee
so removed; the Depositor shall thereupon use its best efforts to appoint a
successor Trustee in accordance with this Section 7.06.
(d) Any resignation or removal of the Trustee and
appointment of a successor trustee pursuant to any of the provisions of this
Section 7.06 shall become effective upon acceptance of appointment by the
successor trustee as provided in Section 7.07. Upon any succession of the
Trustee and the Fiscal Agent under this Agreement, the predecessor Trustee and
the predecessor Fiscal Agent shall be entitled to the payment of compensation
and reimbursement agreed to under this Agreement for services rendered and
expenses incurred. No Trustee or Fiscal Agent shall be personally liable for any
action or omission of any successor Trustee or successor Fiscal Agent.
Notwithstanding anything to the contrary herein, (i) removal of or resignation
by the initial Trustee shall automatically result in the simultaneous removal of
the initial Fiscal Agent and (ii) upon resignation or removal of any subsequent
Trustee, the Depositor may in its sole discretion remove the then current fiscal
agent without cause upon notice. If the Fiscal Agent is removed or terminated as
provided by clause (i) of the foregoing sentence or as permitted by clause (ii)
of such sentence, no successor fiscal agent shall be required if the successor
trustee has a long-term unsecured senior debt rating of at least "AA" or "Aa2",
as applicable, from each Rating Agency (or, in the case of any Rating Agency,
such lower rating as confirmed by such Rating Agency in writing would not
adversely affect any of the ratings then assigned thereby to the Certificates).
However, if the successor trustee does not have such long- term unsecured senior
debt rating, the successor trustee shall appoint a successor fiscal agent whose
appointment as such will not result in the qualification, withdrawal or
downgrading of the ratings on the Certificates that are then rated.
Section 7.07 SUCCESSOR TRUSTEE AND SUCCESSOR FISCAL AGENT.
(a) Any successor trustee appointed as provided in
Section 7.06 and any successor fiscal agent appointed as provided in Sections
4.09(a), 4.11(a) or 7.06(d) shall execute, acknowledge and deliver to the
Depositor and to its predecessor trustee or fiscal agent, as the case may be, an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor trustee or fiscal agent, as the case may be, shall
become effective and such successor trustee or fiscal agent, as the case may be,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
like effect as if originally named as trustee or fiscal agent, as the case may
be, herein. The predecessor trustee shall deliver to the successor trustee all
Mortgage Files and documents and statements related to the Mortgage Files held
by it hereunder, and shall duly assign, transfer, deliver and pay over to the
successor trustee the entire Trust Fund, together with all instruments of
transfer and assignment or other documents properly executed necessary to effect
such transfer and such of the records or copies thereof maintained by the
predecessor trustee in the administration hereof as may be requested by the
109
<PAGE>
successor trustee and shall thereupon be discharged from all duties and
responsibilities under this Agreement. In addition, the Depositor and the
predecessor trustee or fiscal agent, as the case may be, shall execute and
deliver such other instruments and do such other things as may reasonably be
required to more fully and certainly vest and confirm in the successor trustee
or fiscal agent, as the case may be, all such rights, powers, duties and
obligations. Anything herein to the contrary notwithstanding, in no event shall
the fees payable to a successor trustee exceed the Trustee Fee.
(b) No successor trustee shall accept appointment as
provided in this Section 7.07 unless at the time of such appointment such
successor trustee shall be eligible under the provisions of Section 7.05.
(c) Upon acceptance of appointment by a successor
trustee as provided in this Section 7.07 or a successor fiscal agent as provided
in Section 4.09(a), 4.11(a) or 7.06(d), the Depositor shall mail notice of the
succession of such trustee or fiscal agent, as the case may be, hereunder to all
Holders of Certificates at their addresses as shown in the Certificate Register
and to the Rating Agencies. The expenses of such mailing shall be borne by the
Depositor. If the Depositor fails to mail such notice within 10 days after
acceptance of appointment by the successor trustee or fiscal agent, as the case
may be, the successor trustee or fiscal agent, as the case may be, shall cause
such notice to be mailed at the expense of the Depositor.
Section 7.08 MERGER OR CONSOLIDATION OF TRUSTEE. Any Person
into which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding to
the business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such Person shall be eligible under the provisions of Section
7.05, without the execution or filing of any paper or any further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 7.09 APPOINTMENT OF CO-TRUSTEE, SEPARATE TRUSTEE
OR CUSTODIAN.
(a) Notwithstanding any other provisions hereof, at
any time, the Trustee, the Depositor or the Holders of Certificates entitled to
more than 50% of the Voting Rights shall each have the power from time to time
to appoint one or more Persons to act either as co-trustees jointly with the
Trustee, or as separate trustees, for the purpose of holding title to,
foreclosing or otherwise taking action with respect to any Mortgage Loan outside
the state where the Trustee has its principal place of business where such
separate trustee or co-trustee is necessary or advisable (or the Trustee is
advised by the Servicer or the Special Servicer that such separate trustee or
co-trustee is necessary or advisable) under the laws of any state in which a
property securing a Mortgage Loan is located or for the purpose of otherwise
conforming to any legal requirement, restriction or condition in any state in
which a property securing a Mortgage Loan is located or in any state in which
any portion of the Trust Fund is located. The separate trustees or co-trustees
so appointed shall be trustees for the benefit of all the Certificateholders and
shall have such powers, rights and remedies as shall be specified in the
instrument of appointment; provided that no such appointment shall, or shall be
deemed to,
110
<PAGE>
constitute the appointee an agent of the Trustee; and provided further that the
Trustee shall not be liable for the actions of any co-trustee or separate
trustee.
(b) Subject to the consent of the Depositor, which
consent shall not be unreasonably withheld, the Trustee may appoint at any time
a Custodian other than LaSalle National Bank to hold some or all of the Mortgage
Files; provided that such appointment shall not adversely affect the rating by
the Rating Agencies of any Class of Certificates with a rating as evidenced in
writing. Upon the appointment of a Custodian other than LaSalle National Bank,
the Trustee and such Custodian shall enter into a custodial agreement. The
Trustee shall be responsible for the acts and omissions of such Custodian.
(c) Every separate trustee and co-trustee shall, to
the extent permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all powers, duties, obligations and
rights conferred upon the Trustee in respect of the receipt, custody
and payment of moneys shall be exercised solely by the Trustee;
(ii) all other rights, powers, duties and
obligations conferred or imposed upon the Trustee shall be conferred or
imposed upon and exercised or performed by the Trustee and such
separate trustee 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, if applicable, as
successor to the Servicer or Special Servicer) the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations, including the holding of
title to the Trust Fund or any portion thereof in any such
jurisdiction, shall be exercised and performed by such separate trustee
or co-trustee;
(iii) no trustee hereunder shall be
personally liable by reason of any act or omission of any other trustee
hereunder; and
(iv) the Trustee or the Holders of
Certificates entitled to more than 50% of the Voting Rights may at any
time accept the resignation of or remove any separate trustee or
co-trustee, so appointed by it or them, if such resignation or removal
does not violate the other terms of this Agreement.
(d) Any notice, request or other writing given to the
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee, co-trustee or Custodian shall refer to this
Agreement and the conditions of this Article VII. 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.
111
<PAGE>
(e) Any separate trustee, co-trustee or Custodian
may, at any time, constitute the Trustee its agent or attorney-in-fact with full
power and authority, to the extent not prohibited by law, to do any lawful act
under or in respect of this Agreement on its behalf and in its name. If any
separate trustee, co-trustee or Custodian shall die, become incapable of acting,
resign or be removed, all of its estates, properties, rights, remedies and
trusts shall vest in and be exercised by the Trustee, to the extent permitted by
law, without the appointment of a new or successor trustee or Custodian.
(f) No separate trustee, co-trustee or Custodian
hereunder shall be required to meet the terms of eligibility as a successor
trustee under Section 7.05 and no notice to Certificateholders of the
appointment of any separate trustee, co-trustee or Custodian hereunder shall be
required under Section 7.07 hereto.
(g) The Trustee agrees to instruct the co-trustees,
if any, to the extent necessary to fulfill the Trustee's obligations hereunder.
(h) The Trust shall pay the reasonable compensation
of any co-trustee or separate trustee appointed pursuant to this Section 7.09 to
the extent, and in accordance with the standards, specified in Section 7.12
hereof.
Section 7.10 AUTHENTICATING AGENTS.
(a) The Trustee may appoint one or more
Authenticating Agents which shall be authorized to act on behalf of the Trustee
in authenticating Certificates. Wherever reference is made in this Agreement to
the authentication of Certificates by the Trustee or the Trustee's certificate
of authentication, such reference shall be deemed to include authentication on
behalf of the Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent must be acceptable to the Depositor and must be a
corporation organized and doing business under the laws of the United States of
America or of any state and having a principal office and place of business in
the Borough of Manhattan, the City and State of New York or in the State of
Illinois, having a combined capital and surplus of at least $15,000,000,
authorized under such laws to do a trust business and subject to supervision or
examination by federal or state authorities. The Trustee shall initially be
Authenticating Agent hereunder and shall perform each of the obligations of the
Authenticating Agent set forth herein
(b) Any Person into which any Authenticating Agent
may be merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which any
Authenticating Agent shall be a party, or any Person succeeding to the corporate
agency business of any Authenticating Agent, shall continue to be the
Authenticating Agent without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
(c) Any Authenticating Agent may at any time resign
by giving at least 30 days' advance written notice of resignation to the Trustee
and the Depositor. The Trustee may at any time terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and the Depositor. Upon receiving a notice of
112
<PAGE>
resignation or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible in accordance with the
provisions of Section 7.10(a), the Trustee may appoint a successor
Authenticating Agent, shall give written notice of such appointment to the
Depositor and shall mail notice of such appointment to all Holders of
Certificates. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers, duties
and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent. No such Authenticating Agent shall be
appointed unless eligible under the provisions of Section 7.10(a). No
Authenticating Agent shall have responsibility or liability for any action taken
by it as such at the direction of the Trustee.
Section 7.11 INDEMNIFICATION OF TRUSTEE.
(a) The Trustee and each of its directors, officers,
employees and agents shall be entitled to indemnification from the Trust Fund
out of the Custodial Account for any loss, liability or expense incurred without
negligence, bad faith or willful misconduct on their part, arising out of, or in
connection with, the acceptance or administration (in accordance with the
provisions of this Agreement) of the trusts created hereunder (including,
without limitation, any such loss, liability or expense incurred in connection
with any action or inaction of the Servicer pursuant to this Agreement or the
Servicing Agreement or the Special Servicer pursuant to this Agreement or the
Special Servicing Agreement and any loss, liability or expense incurred in
connection with the provision by the Trustee of the information set forth in
Section 5.11(d)(ii)), including the costs and expenses of defending themselves
against any related claims; provided that:
(i) with respect to any such claim, the
Trustee shall have given the Depositor and the Holders of the
Certificates written notice thereof promptly after the Trustee shall
have knowledge thereof (except that failure to give such notice shall
not affect the Trustee's rights to indemnification unless the
Depositor's or Holders' defense of such claim is materially prejudiced
thereby);
(ii) while maintaining control over its own
defense, the Trustee shall cooperate and consult fully with the
Depositor in preparing such defense; and
(iii) notwithstanding anything to the
contrary in this Section 7.11, the Trust Fund shall not be liable for
settlement of any such claim by the Trustee entered into without the
prior consent of the Depositor, which consent shall not be unreasonably
withheld.
The provisions of this Section 7.11 shall survive any termination of this
Agreement and the resignation or removal of the Trustee.
(b) The Depositor shall indemnify and hold harmless
the Trustee, its directors, officers, employees or agents and each Person, if
any, who controls the Trustee within the meaning of the 1933 Act from and
against any loss, claim, damage or liability, joint or several, and any action
in respect thereof, to which the Trustee or any of its directors, officers,
employees or agents or controlling Persons may become subject under the 1933
Act, insofar as
113
<PAGE>
such loss, claim, damage, liability or action arises out of, or is based upon
any untrue statement or alleged untrue statement of a material fact contained in
the registration statement for the registration of the Certificates under the
1933 Act as originally filed or any amendment thereof (collectively, for
purposes of this Section 7.11, the "REGISTRATION STATEMENT"), or in the 1996-C2
Prospectus or the 1996-C2 PPM (collectively, for purposes of this Section 7.11,
the "DISCLOSURE DOCUMENTS"), or arises out of, or is based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein (in the case of a Disclosure
Document, in light of the circumstances under which they were made) not
misleading and shall reimburse the Trustee, its directors, officers, employees,
agents or any controlling Persons for any legal and other expenses reasonably
incurred by the Trustee or any such director, officer, employee, agent or
controlling Person in investigating or defending or preparing to defend against
any such loss, claim, damage, liability or action; provided that the Depositor
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission made in
any such Registration Statement or Prospectus in reliance upon and in conformity
with written information concerning the Trustee furnished to the Depositor by or
on behalf of the Trustee specifically for inclusion therein. The Trustee shall
immediately notify the Depositor if a claim is made by a third party entitling
the Trustee or any of its directors, officers, employees, agents or controlling
Persons to indemnification under this Section 7.11(b), whereupon the Depositor
shall assume the defense of any such claim (with counsel reasonably satisfactory
to the Trustee) and pay all expenses in connection therewith, including counsel
fees, and promptly pay, discharge and satisfy any judgment or decree which may
be entered against it or them in respect of such claim. Any failure to so notify
the Depositor shall not affect any rights the Trustee, its directors, officers,
employees, agents or controlling Persons may have to indemnification under this
Section 7.11(b), unless the Depositor's defense of such claim is materially
prejudiced thereby. The indemnification provided herein shall survive the
termination of any of the Transaction Documents and the termination or
resignation of any of the Trustee, the Fiscal Agent, the Servicer and the
Special Servicer under any of the Transaction Documents.
(c) The Trustee shall indemnify and hold harmless the
Depositor, its directors, officers, employees or agents and each Person, if any,
who controls the Depositor within the meaning of the 1933 Act from and against
any loss, claim, damage or liability, joint or several, and any action in
respect thereof, to which the Depositor or any of its directors, officers,
employees, agents or controlling Persons may become subject under the 1933 Act,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement of a material fact
contained in the Disclosure Documents, or arises out of, or is based upon, the
omission or alleged omission to state therein a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading and shall reimburse the Depositor and its directors,
officers, employees, agents and controlling Persons for any legal and other
expenses reasonably incurred by the Depositor or any such director, officer,
employee, agent or controlling Person in investigating or defending or preparing
to defend against any such loss, claim, damage, liability or action, but in each
case only to the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information concerning the Trustee furnished to the Depositor by or on
behalf of the Trustee specifically for inclusion therein. The Depositor shall
immediately notify the Trustee
114
<PAGE>
if a claim is made by a third party entitling the Depositor or any of its
directors, officers, employees, agents or controlling Persons to indemnification
under this Section 7.11(c), whereupon the Trustee shall assume the defense of
any such claim (with counsel reasonably satisfactory to the Depositor) and pay
all expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it or
them in respect of such claim. Any failure to so notify the Trustee shall not
affect any rights the Depositor or any of its directors, officers, employees,
agents or controlling Persons may have to indemnification under this Section
7.11(c), unless the Trustee's defense of such claim is materially prejudiced
thereby. The indemnification provided herein shall survive the termination of
any of the Transaction Documents and any termination or resignation of the
Trustee under any of the Transaction Documents.
(d) The Depositor and the Trustee expressly agree
that the only written information concerning the Trustee furnished by or on
behalf of the Trustee for inclusion in the Registration Statement or the
Disclosure Documents is the information set forth in the second, fourth and
fifth sentences of the first paragraph under the caption "DESCRIPTION OF THE
CERTIFICATES--The Trustee" in the 1996-C2 Prospectus Supplement, which
information the Trustee hereby represents and warrants is true and correct in
all material respects as of the date of the 1996-C2 Prospectus Supplement and as
of the Closing Date.
Section 7.12 FEES AND EXPENSES OF TRUSTEE AND THE FISCAL
AGENT. The Trustee shall be entitled to receive the Trustee Fee, payable monthly
from the Collection Account (and which shall not be limited by any provision of
law with respect to the compensation of a trustee of an express trust), for all
services rendered by the Trustee in the execution of the trusts hereby created
and in the exercise and performance of any of the powers and duties hereunder of
the Trustee. The Trustee shall be responsible for the fees of the Fiscal Agent.
The Trustee and the Fiscal Agent shall also be entitled to recover from the
Trust Fund all reasonable unanticipated expenses and disbursements incurred or
made by the Trustee and the Fiscal Agent, respectively, in accordance with any
of the provisions of any of the Transaction Documents (including the reasonable
compensation and the reasonable expenses and disbursements of its counsel and
for all Persons not regularly in its employ), not including expenses incurred in
the ordinary course of performing its duties as Trustee or Fiscal Agent, as the
case may be, under any of the Transaction Documents, and except any such
expense, disbursement or advance as may arise from its negligence, bad faith or
willful misconduct or which is the specific responsibility of the Trustee
hereunder. The provisions of this Section 7.12 shall survive any termination of
any of the Transaction Documents and the termination or resignation of the
Trustee and the Fiscal Agent under any of the Transaction Documents.
Section 7.13 COLLECTION OF MONEYS. Except as otherwise
expressly provided in this Agreement, the Trustee may demand payment or delivery
of, and shall receive and collect, all money and other property payable to or
receivable by the Trustee pursuant to this Agreement. The Trustee shall hold all
such money and property received by it as part of the Trust Fund and shall
distribute it as provided in this Agreement. If the Trustee shall not have
timely received amounts to be remitted with respect to the Mortgage Loans and
any REO Properties from the Servicer, the Trustee shall request the Servicer to
make such distribution as promptly as practicable or legally permitted. If the
Trustee shall subsequently receive any such amount, it may withdraw such
request.
115
<PAGE>
ARTICLE VIII
PURCHASE AND
TERMINATION OF THE TRUST FUND
Section 8.01 TERMINATION OF TRUST FUND UPON REPURCHASE OR
LIQUIDATION OF ALL MORTGAGE LOANS.
(a) The obligations and responsibilities of the
Trustee created hereby (other than the obligation of the Trustee to make
payments to the Certificateholders as set forth in Section 8.02 and other than
the obligations in the nature of information or tax reporting) 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 (the "FINAL DISTRIBUTION DATE") that follows the Collection
Period in which occurs the earlier of (i) the later of (A) the final payment or
other liquidation of the last Mortgage Loan remaining in the Trust Fund and (B)
the disposition of all REO Property remaining in the Trust Fund, and (ii) the
sale of all the Mortgage Loans and any REO Properties remaining in the Trust
Fund in accordance with Section 8.01(b); provided that in no event shall the
Trust Fund created hereby continue beyond the expiration of 21 years from the
death of the last survivor of the descendants of Joseph P. Kennedy, the late
Ambassador of the United States to the Court of St. James, living on the date
hereof. Any termination of the Trust must be conducted so as to qualify as a
"qualified liquidation" of each of REMIC I, REMIC II and REMIC III under Section
860F of the Code, as evidenced by an Opinion of Counsel obtained by the Trustee
at the expense of the Trust Fund.
(b) The Holders of 100% of the Class R-III
Certificates or the Servicer (in accordance with the Servicing Agreement) may
purchase all the Mortgage Loans and any REO Properties then remaining in the
Trust Fund; provided that on the Distribution Date preceding the date of such
purchase, the Aggregate Certificate Principal Amount of the Sequential Pay
Certificates, after giving effect to distributions of principal made on such
Distribution Date, is not more than 5% of the initial Aggregate Certificate
Principal Amount of the Sequential Pay Certificates as of the Closing Date. The
Trustee shall, on the Business Day it receives any "Clean-Up Notice" from the
Servicer pursuant to the Servicing Agreement, deliver such notice to the Holders
of the Class R-III Certificates. Within ten Business Days after a Clean-Up
Notice has been sent by the Trustee, the Class R-III Certificateholders shall
either (i) notify the Trustee that they will purchase such Mortgage Loans and
REO Properties pursuant to this Section 8.01 and the Servicer's right to do so
shall expire or (ii) notify the Trustee that they will not purchase such
Mortgage Loans and REO Properties and that the Servicer shall be entitled to
purchase such Mortgage Loans and REO Properties as provided in this Section
8.01. If the Holders of the Class R-III Certificates provide the notification
specified in clause (ii) above or provide neither the notification specified in
clause (i) above or clause (ii) above within such period of ten Business Days,
such assets shall be purchased by the Servicer in accordance with the Servicing
Agreement. Any such purchase, whether by the Servicer or the Class R-III
Certificateholders, shall be at a price (the "TERMINATION PRICE") equal to the
greater of (1) the sum of (x) 100% of the Aggregate Unpaid Principal Balance of
the Mortgage Loans on the day of such purchase, together with, in the case of
each such Mortgage Loan, all accrued and unpaid
116
<PAGE>
interest thereon at the related Mortgage Rate (net of any applicable Retained
Yield Rate) to the Due Date for such loan in the Collection Period of purchase
and all related unreimbursed Servicing Advances, plus (y) the fair market value
of any REO Property then remaining in the Trust Fund, and (2) the fair market
value of all such Mortgage Loans and REO Properties. Upon receipt of the
Termination Price, the Trustee shall deposit in the Custodial Account that
portion of the Termination Price that would be payable to the Servicer, the
Special Servicer, the Trustee, the Fiscal Agent or any other Person pursuant to
any of clauses (i) through (iv) and (x) of Section 2.02(a) of the Servicing
Agreement if such amount were on deposit in the Custodial Account (for purposes
of the foregoing that portion of the Termination Price attributable to any
Mortgage Loan or REO Property shall be treated like Liquidation Proceeds), and
the Trustee shall deposit the balance of the Termination Price in the Collection
Account. In addition, upon receipt of the Termination Price, the Trustee shall
promptly release or cause to be released to the Servicer for the benefit of the
Class R-III Certificateholders or its own benefit, as applicable, the Mortgage
Files for the Mortgage Loans, and shall otherwise transfer the Mortgage Loans
and any REO Properties substantially in the manner contemplated by Section 2.04.
The Trustee shall consult with Lehman Brothers or its successor, as adviser, in
the determination of whether the fair market value of the Mortgage Loans and REO
Properties remaining in the Trust Fund has been offered; provided that if Lehman
Brothers or an Affiliate of Lehman Brothers is a Holder of Class R-III
Certificates and is exercising its right as a Class R-III Certificateholder to
purchase the Mortgage Loans and any REO Properties, the Trustee shall consult
with the Operating Adviser. As a condition to the purchase of the Mortgage Loans
and REO Properties remaining in the Trust Fund pursuant to this Section 8.01(b),
the Holders of the Class R-III Certificates, if such Holders are purchasing the
Mortgage Loans and REO Properties, or the Servicer, if the Servicer is
purchasing the Mortgage Loans and REO Properties, must deliver to the Trustee
and the Depositor an Opinion of Counsel, which shall be at the expense of such
Holders or the Servicer, as the case may be, stating that such termination will
be a "qualified liquidation" of each of REMIC I, REMIC II and REMIC III under
section 860F of the Code.
Such purchase shall be made in accordance with Section 8.03.
Section 8.02 PROCEDURE UPON TERMINATION OF TRUST FUND.
(a) Notice of any termination pursuant to the
provisions of Section 8.01, specifying the Distribution Date upon which the
final distribution shall be made, shall be given promptly by the Trustee by
first class mail to the Certificateholders mailed no later than ten days prior
to the date of such termination. Such notice shall specify (A) the Distribution
Date upon which final distribution on the Certificates will be made upon
presentation and surrender of the Certificates at the Corporate Trust Office,
and (B) that the Record Date otherwise applicable to such Distribution Date is
not applicable, distribution being made only upon presentation and surrender of
the Certificates at the office or agency of the Trustee therein specified. The
Trustee shall give such notice to the Depositor and the Certificate Registrar at
the time such notice is given to Certificateholders. Upon any such termination,
the duties of the Certificate Registrar with respect to the Certificates shall
terminate and the Trustee shall terminate, or request the Servicer and/or
Special Servicer to terminate, the Custodial Account and Collection Account and
any other account or fund maintained with respect to the Certificates, subject
to the Trustee's obligation hereunder to hold all amounts payable to the
Certificateholders in trust without interest pending such payment.
117
<PAGE>
(b) Upon presentation and surrender of the
Certificates by the Certificateholders on the Final Distribution Date, the
Trustee shall, in accordance with Sections 6.01 and 6.02, distribute to each
Certificateholder so presenting and surrendering its Certificates such
Certificateholder's Percentage Interest of that portion of the amounts then on
deposit in the Collection Account that are allocable to payments on the Class of
Certificates to which such Certificates being so presented and surrendered
belong.
(c) In the event that all of the Holders do not
surrender their Certificates for cancellation within three months after the time
specified in the above-mentioned written notice, the Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within one year after the second notice any Certificates shall not
have been surrendered for cancellation, the Trustee may take appropriate steps
to contact the remaining Certificateholders concerning surrender of such
Certificates, and the cost thereof shall be paid out of the amounts
distributable to such Holders. If within two years after the second notice any
such Certificates shall not have been surrendered for cancellation, the Trustee
shall, subject to applicable state law relating to escheatment, hold all amounts
distributable to such Holders for the benefit of such Holders. No interest shall
accrue on any amount held by the Trustee and not distributed to a
Certificateholder due to such Certificateholder's failure to surrender its
Certificate(s) for payment of the final distribution thereon in accordance with
this Section 8.02. Any money held by the Trustee pending distribution under this
Section 8.02 after 90 days after the qualified liquidation shall be deemed for
tax purposes to have been distributed from REMIC I, REMIC II and REMIC III and
shall be beneficially owned by the related Holder.
Section 8.03 ADDITIONAL TRUST FUND TERMINATION REQUIREMENTS.
(a) A termination of the Trust Fund pursuant to
Section 8.01(b) shall be effected in accordance with the following additional
requirements, unless at the request of the Servicer or the Class R-III
Certificateholders, the Trustee seeks, and subsequently receives, an Opinion of
Counsel (at the expense of the Servicer or the Class R-III Certificateholders,
as the case may be), addressed to the Depositor and the Trustee to the effect
that the failure of the Trust Fund to comply with the requirements of this
Section 8.03 will not (i) result in the imposition of taxes on REMIC I, REMIC II
or REMIC III under the REMIC Provisions or (ii) cause either REMIC I, REMIC II
or REMIC III to fail to qualify as a REMIC at any time that any Certificates are
outstanding:
(i) upon receipt of the Clean-Up Notice by
the Trustee, the Trustee shall specify the first day in the 90-day
liquidation period in a statement attached to the final Tax Return for
each of REMIC I, REMIC II and REMIC III pursuant to Treasury regulation
Section 1.860F-1 and any termination of the Trust shall be conducted in
such a manner as to satisfy all requirements of a qualified liquidation
under Section 860F of the Code and any regulations thereunder as
evidenced by an Opinion of Counsel provided by and at the expense of
the Servicer or Class R-III Certificateholders, as the case may be;
(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
118
<PAGE>
assets of REMIC I to the Servicer or the Class R-III
Certificateholders, as applicable, for cash, at the Termination Price;
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 Certificateholders in
accordance with Section 8.01 all cash on hand (other than cash retained
to meet claims), and each of REMIC I, REMIC II and REMIC III shall
terminate at that time.
(b) By their acceptance of Certificates, the Holders thereof
hereby agree to authorize the Trustee to specify the 90-day liquidation period
for each of REMIC I, REMIC II and REMIC III, which authorization shall be
binding upon all successor Certificateholders.
119
<PAGE>
ARTICLE IX
RIGHTS OF CERTIFICATEHOLDERS
Section 9.01 LIMITATION ON RIGHTS OF HOLDERS.
(a) The death or incapacity of any Certificateholder
shall not operate to terminate this Agreement or the Trust Fund, nor entitle
such Certificateholder's legal representatives or heirs to claim an accounting
or take any action or proceeding in any court for a partition or winding up of
the Trust Fund, nor otherwise affect the rights, obligations and liabilities of
the parties hereto or any of them.
(b) Except as otherwise expressly provided herein, no
Certificateholder, solely by virtue of its status as a Certificateholder, shall
have any right to vote or in any manner otherwise control the Servicer or
operation and management of the Trust Fund, or the obligations of the parties
hereto, nor shall anything herein set forth, or contained in the terms of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association, nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
(c) No Certificateholder, solely by virtue of its
status as Certificateholder, shall have any right by virtue or by availing of
any provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to any of the Transaction
Documents unless the Holders of Certificates entitled to not less than 50% 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 and shall have
offered to the Trustee such reasonable indemnity as it may require against the
cost, expenses and liabilities to be incurred therein or thereby, and the
Trustee, for sixty 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 and no direction inconsistent with such written request has been
given such Trustee during such sixty-day period by such Certificateholders; it
being understood and intended, and being 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 whatever
by virtue or by availing of any provision of this Agreement to affect, disturb
or prejudice the rights of the Holders of any other of such Certificates, or to
obtain or seek to obtain priority over or preference to any other such Holder
not expressly provided for herein, or to enforce any right under this Agreement,
except in the manner herein provided and for the benefit of all
Certificateholders. For the protection and enforcement of the provisions of this
Section 9.01, each and every Certificateholder and the Trustee shall be entitled
to such relief as can be given either at law or in equity.
120
<PAGE>
Section 9.02 ACCESS TO LIST OF HOLDERS.
(a) If the Trustee is not acting as Certificate
Registrar, the Trustee shall cause the Certificate Registrar to furnish to the
Trustee, within fifteen days after receipt by the Certificate Registrar of a
request by the Trustee in writing, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Certificateholders of each
Class as of the most recent Record Date.
(b) If three or more Holders (hereinafter referred to
as "APPLICANTS," with a single Person which (together with its Affiliates) is
the Holder of more than one Class of Certificates being viewed as a single
"APPLICANT" for these purposes) apply in writing to the Trustee, and such
application states that the applicants desire to communicate with other Holders
with respect to their rights under this Agreement or under the Certificates and
is accompanied by a copy of the communication which such applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt of
such application, send, at the applicants' expense, the written communication
proffered by the applicants to all Certificateholders at their addresses as they
appear in the Certificate Register.
(c) Every Holder, by receiving and holding a
Certificate, agrees with the Depositor, the Certificate Registrar and the
Trustee that neither the Depositor, 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.
Section 9.03 ACTS OF HOLDERS OF CERTIFICATES.
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Agreement to be given
or taken by Holders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Depositor.
Such instrument or instruments (as the action embodied therein and evidenced
thereby) are herein sometimes referred to as an "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agents shall be sufficient for any purpose of this
Agreement and conclusive in favor of the Trustee and the Depositor, if made in
the manner provided in this Section 9.03. The Trustee agrees to promptly notify
the Depositor of any such instrument or instruments received by it, and to
promptly forward copies of the same.
(b) The fact and date of the execution by any Person
of any such instrument or writing may be proved by the affidavit of a witness of
such execution or by the certificate of any notary public or other officer
authorized by law to take acknowledgements or deeds, certifying that the
individual signing such instrument or writing acknowledged to him the execution
thereof. Whenever such execution is by an officer of a corporation or a member
of a limited liability company or partnership on behalf of such corporation,
limited liability company or partnership, such certificate or affidavit shall
also constitute sufficient proof of his
121
<PAGE>
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the individual executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
(c) The ownership of Certificates (notwithstanding
any notation of ownership or other writing thereon made by anyone other than the
Trustee) shall be proved by the Certificate Register, and neither the Trustee
nor the Depositor shall be affected by any notice to the contrary.
(d) Any request, demand, authorization, direction,
notice, consent, waiver or other action by the Holder of any Certificate shall
bind every future Holder of the same Certificate and the Holder of every
Certificate issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, omitted or suffered to
be done by the Trustee or the Depositor in reliance thereon, whether or not
notation of such action is made upon such Certificate.
122
<PAGE>
ARTICLE X
REMIC ADMINISTRATION
Section 10.01 REMIC ADMINISTRATION.
(a) An election will be made by the Trustee on behalf
of the Trust to treat each of REMIC I, REMIC II and REMIC III as a REMIC under
the Code. Each such election will be made on Form 1066 or other appropriate
federal tax or information return for the taxable year ending on the last day of
the calendar year in which the Certificates are issued. The REMIC I Regular
Interests are hereby designated as the "regular interests" (within the meaning
of Section 860G(a)(1) of the Code), and the Class R-I Certificates shall
evidence the single class of "residual interests" (within the meaning of Section
860G(a)(2) of the Code), in REMIC I. The REMIC II Regular Interests are hereby
designated as the "regular interests" (within the meaning of Section 860G(a)(1)
of the Code), and the Class R-II Certificates shall evidence the single class of
"residual interests" (within the meaning of Section 860G(a)(2) of the Code), in
REMIC II. The Class A, Class B, Class C, Class D, Class E, Class IO, Class F,
Class G, Class H and Class J Certificates shall evidence the "regular interests"
(within the meaning of Section 860G(a)(1) of the Code), and the Class R-III
Certificates shall evidence the single class of "residual interests" (within the
meaning of Section 860G(a)(2) of the Code), in REMIC III. None of the Servicer,
the Special Servicer, the Fiscal Agent, the Depositor or the Trustee shall, to
the extent it is within the control of such Person, create or permit the
creation of any "interests" in any of REMIC I, REMIC II or REMIC III (within the
meaning of Treasury regulation Section 1.860D-1(b)(1)) other than the REMIC I
Regular Interests, the REMIC II Regular Interests, and the interests represented
by the Certificates.
(b) 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.
(c) The Trustee shall pay out of the Collection
Account any and all tax related expenses (exclusive of any taxes, however
denominated, and any costs and expenses incidental to such taxes, including,
without limitation, penalties, interest and reasonable attorneys' fees) of each
of REMIC I, REMIC II and REMIC III, including but not limited to any
professional fees or expenses related to audits or any administrative or
judicial proceedings with respect to each of REMIC I, REMIC II and REMIC III
that involve the Internal Revenue Service or state tax authorities.
(d) The Trustee shall prepare and file all of REMIC
I's, REMIC II's and REMIC III's federal and state income or franchise tax and
information returns, in each case as such REMIC's direct representative; the
costs and expenses of preparing and filing such returns shall be borne by the
Trustee.
(e) The Trustee shall perform on behalf of each of
REMIC I, REMIC II and REMIC III all reporting and other tax compliance duties
that are the responsibility of such REMIC under the Code, REMIC Provisions, or
other compliance guidance issued by the Internal Revenue Service or any state or
local taxing authority. Among its other duties, the Trustee shall provide (i) to
the Treasury or other Persons (including, but not limited to, the transferor of
a
123
<PAGE>
Residual Certificate to a Disqualified Organization or to an agent that has
acquired a Residual Certificate on behalf of a Disqualified Organization) such
information as is necessary for the application of any tax relating to the
transfer of a Residual Certificate to any Disqualified Organization and (ii) to
the Certificateholders such information or reports as are required by the Code
or REMIC Provisions.
(f) The Holder of a greater than 50% Percentage
Interest in each Class of the Residual Certificates (or, in each such case, of
the greatest Percentage Interest in such Class of Residual Certificates if no
Holder holds more than 50% thereof), shall be the related REMIC's Tax Matters
Person. The duties of the Tax Matters Person for each of REMIC I, REMIC II and
REMIC III are hereby delegated to the Trustee and each Residual
Certificateholder, by acceptance of its Residual Certificate, agrees, on behalf
of itself and all successor holders of such Residual Certificate, to such
delegation to the Trustee as their agent and attorney in fact. If the Code or
applicable Treasury regulations prohibits the Trustee from signing any
applicable Internal Revenue Service, court or other administrative documents or
from acting as Tax Matters Person (as an agent or otherwise) with respect to
REMIC I, REMIC II or REMIC III, the Trustee shall take whatever action is
necessary for the signing of such documents and designation of a Tax Matters
Person, including the designation of the applicable Residual Certificateholder.
(g) The Trustee and the Holders of each Class of
Residual Certificates shall not take any action or fail to take any action or
cause the related REMIC to take any action or fail to take any action if any of
such Persons knows or could, upon the exercise of reasonable diligence, know,
that, under the REMIC Provisions such action or failure, as the case may be,
could (i) endanger the status of the related REMIC as a REMIC or (ii) result in
the imposition of a tax upon the related REMIC (other than a tax permitted to be
incurred pursuant to Section 4.14(c) of the Special Servicing Agreement)
(including but not limited to the tax on prohibited transactions as defined in
Code Section 860F(a)(2)), unless the Trustee has received an Opinion of Counsel
(at the expense of the party seeking to take such action) to the effect that the
contemplated action will not endanger such status or result in the imposition of
such a tax. Any action required under this section which would result in an
unusual or unexpected expense shall be undertaken at the expense of the party
seeking the Trustee or the Holders of the affected Class of Residual
Certificates to undertake such action.
(h) In the event that any tax is imposed on REMIC I,
REMIC II or REMIC III, including, without limitation, "prohibited transactions"
taxes as defined in Section 860F(a)(2) of the Code, any tax on "net income from
foreclosure property" as defined in Section 860G(c) of the Code, any taxes on
contributions to REMIC I, REMIC II or REMIC III after the Startup Day pursuant
to Section 860G(d) of the Code, and any other tax imposed by the Code or any
applicable provisions of state or local tax laws (other than any tax permitted
to be incurred by the Special Servicer pursuant to Section 4.14(c) of the
Special Servicing Agreement), such tax, together with all incidental costs and
expenses (including, without limitation, penalties, interest and reasonable
attorneys' fees), shall be charged to and paid by: (i) the Trustee, if such tax
arises out of or results from a breach of any of its obligations under this
Article X; (ii) the Servicer, if such tax arises out of or results from a breach
by the Servicer of any of its obligations under the Servicing Agreement or this
Article X; (iii) the Special Servicer, if such tax arises out of or results from
a breach by the Special Servicer of any of its obligations under
124
<PAGE>
the Special Servicing Agreement or this Article X; or (iv) the Trust in all
other instances. Any tax permitted to be incurred by the Special Servicer
pursuant to Section 4.14(c) of the Special Servicing Agreement shall be charged
to and paid by the Trust. Any such amounts payable by the Trust in respect of
taxes shall be paid by the Trustee out of amounts on deposit in the Collection
Account.
(i) The Trustee and, to the extent records are
maintained by the Servicer and the Special Servicer in the normal course of its
business, the Servicer and the Special Servicer shall, for federal income tax
purposes, maintain books and records with respect to each of REMIC I, REMIC II
and REMIC III on a calendar year and on an accrual basis. The books and records
must be sufficient concerning the nature and amount of each such REMIC's
investments to show that such REMIC has complied with the REMIC Provisions.
(j) None of the Trustee, the Servicer or the Special
Servicer shall enter into any arrangement by which any of REMIC I, REMIC II or
REMIC III will receive a fee or other compensation for services.
(k) In order to enable the Trustee to perform its
duties as set forth herein, the Depositor shall provide, or cause to be
provided, to the Trustee within ten (10) days after the Closing Date all
information or data that the Trustee reasonably determines to be relevant for
tax purposes on the valuations and offering prices of the Certificates,
including, without limitation, the yield, prepayment assumption, issue prices
and projected cash flows of the Certificates and the projected cash flows of the
Mortgage Loans. Thereafter, the Depositor shall provide to the Trustee, promptly
upon request therefor, any such additional information or data that the Trustee
may, from time to time, reasonably request in order to enable the Trustee to
perform its duties as set forth herein. The Trustee is hereby directed to use
any and all such information or data provided by the Depositor in the
preparation of all federal and state income or franchise tax and information
returns and reports for REMIC I, REMIC II and REMIC III to Certificateholders as
required herein. The Depositor hereby agrees to indemnify the Trustee for any
losses, liabilities, damages, claims or expenses of the Trustee arising from any
errors or miscalculations of the Trustee pursuant to this Section 10.01 that
result from any failure of the Depositor to provide, or to cause to be provided,
accurate information or data to the Trustee (but not resulting from the
methodology employed by the Trustee) on a timely basis and such indemnifications
shall survive the termination of any of the Transaction Documents and the
termination or resignation of the Trustee under any of the Transaction
Documents.
The Servicer and the Special Servicer shall provide on a
timely basis to the Trustee or its designee such information with respect to the
Trust Fund as is in its possession, which the Servicer and the Special Servicer
has received or prepared by virtue of its role as servicer or special servicer,
as the case may be, under the Transaction Documents and which has been
reasonably requested by the Trustee to enable it to perform its obligations
under this Section 10.01, and the Trustee shall be entitled to conclusively rely
on such information in the performance of its obligations under this Section
10.01. The Servicer and the Special Servicer shall indemnify the Trustee, the
Fiscal Agent and the Depositor for any liability or assessment against the
Trustee, the Fiscal Agent, the Depositor or the Trust and any expenses incurred
in connection with such liability or assessment (including attorney's fees)
resulting from any error in any tax or information returns resulting from errors
in the information provided by the
125
<PAGE>
Servicer or Special Servicer, as the case may be, caused by the negligence,
willful misconduct or bad faith of the Servicer or Special Servicer, as the case
may be. Such indemnification shall survive the termination of any of the
Transaction Documents and any resignation or termination of the Trustee, the
Fiscal Agent, the Servicer and the Special Servicer under any of the Transaction
Documents.
The Trustee agrees that all such information or data so
obtained by it are to be regarded as confidential information and agrees that it
shall use its best reasonable efforts to retain in confidence, and shall ensure
that its officers, employees and representatives retain in confidence, and shall
not disclose, without the prior written consent of the Depositor, any or all of
such information or data, or make any use whatsoever (other than for the
purposes contemplated by this Agreement) of any such information or data without
the prior written consent of the Depositor, unless such information is generally
available to the public (other than as a result of a breach of this Section
10.01(k)) or is required by law or applicable regulations to be disclosed or is
disclosed (i) to independent auditors and accountants, counsel and other
professional advisers of the Trustee and its parent or (ii) in connection with
its rights and obligations under this Agreement.
Section 10.02 PROHIBITED TRANSACTIONS AND ACTIVITIES. None of
the Trustee, the Servicer, the Special Servicer or the Operating Adviser shall
permit the sale, disposition or substitution for any of the Mortgage Loans
(except in a disposition pursuant to (i) the foreclosure or default of a
Mortgage Loan, (ii) the bankruptcy or insolvency of REMIC I, REMIC II or REMIC
III, (iii) the termination of REMIC I, REMIC II or REMIC III in a "qualified
liquidation" as defined in Section 860F(a)(4) of the Code, or (iv) a repurchase
pursuant to Article II of this Agreement), nor acquire any assets for the Trust,
except as provided in Article II of this Agreement, nor sell or dispose of any
investments in any of the Accounts for gain, nor accept any contributions to
REMIC I, REMIC II or REMIC III (other than a cash contribution during the
three-month period beginning on the related Startup Day), unless it has received
an Opinion of Counsel (at the expense of the Person requesting the Trustee to
take such action) to the effect that such disposition, acquisition,
substitution, or acceptance will not (a) affect adversely the status of REMIC I,
REMIC II or REMIC III as a REMIC or the status of the REMIC I Regular Interests,
the REMIC II Regular Interests or the REMIC III Regular Certificates,
respectively, as the regular interests therein, (b) result in the encumbrance of
the assets transferred or assigned to the Trust Fund (except pursuant to the
provisions of this Agreement) or (c) cause REMIC I, REMIC II or REMIC III to be
subject to a tax on "prohibited transactions" or "prohibited contributions"
pursuant to the REMIC Provisions.
126
<PAGE>
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 BINDING NATURE OF AGREEMENT; BENEFITS OF
AGREEMENT. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns and shall
inure to the benefit of the Certificateholders. Nothing in this Agreement or in
the Certificates, express or implied, shall give to any Person, other than the
parties to this Agreement and their successors hereunder and the Holders of the
Certificates, any benefit or any legal or equitable right, power, remedy or
claim under this Agreement.
Section 11.02 ENTIRE AGREEMENT. The Transaction Documents
(including, without limitation, this agreement) contain the entire agreement and
understanding between the parties hereto with respect to the subject matter
thereof, and supersede all prior and contemporaneous agreements, understandings,
inducements and conditions, express or implied, oral or written, of any nature
whatsoever with respect to the subject matter thereof. The express terms of the
Transaction Documents control and supersede any course of performance or usage
of the trade inconsistent with any of the terms thereof.
Section 11.03 AMENDMENT.
(a) This Agreement may be amended from time to time
by the parties hereto (and the Trustee may agree to any amendment of the
Servicing Agreement or the Special Servicing Agreement), without notice to or
the consent of any of the Holders, (i) to cure any ambiguity herein (or
therein), (ii) to cause the provisions herein (or therein) to conform to or be
consistent with or in furtherance of the statements made with respect to the
Certificates, the Trust Fund or this Agreement (or with respect to the Servicing
Agreement or the Special Servicing Agreement) in the 1996-C2 Prospectus, or to
correct or supplement any provision herein (or therein) which may be
inconsistent with any other provisions herein (or therein), (iii) to amend any
provision hereof (or thereof) to the extent necessary or desirable to maintain
the status of each of REMIC I, REMIC II and REMIC III as a REMIC for the
purposes of federal income tax law or comparable provisions of state income tax
law, and (iv) to make any other provisions with respect to matters or questions
arising under or with respect to this Agreement (or under or with respect to the
Servicing Agreement or the Special Servicing Agreement); provided that no such
amendment effected (or agreed to by the Trustee) pursuant to clause (iv) of the
preceding sentence shall (i) adversely affect in any material respect the
interests of any Holder not consenting thereto or (ii) adversely affect the
status of REMIC I, REMIC II or REMIC III as a REMIC. Prior to entering into any
amendment hereof (or agreeing to any amendment of the Servicing Agreement or the
Special Servicing Agreement) without the consent of Holders pursuant to this
paragraph, the Trustee may require an Opinion of Counsel (in the case of clauses
(i), (ii) and (iii), at the expense of the Depositor, and otherwise at the
expense of the party requesting such amendment) to the effect that such
amendment is permitted under this paragraph. Any such amendment shall be deemed
not to adversely affect in any material respect any Holder of a rated
Certificate if the Trustee receives written confirmation from each Rating Agency
that such amendment will not cause such Rating Agency to reduce, qualify or
127
<PAGE>
withdraw the then current rating assigned to any of the Certificates that were
then being rated by the Rating Agencies (and any Opinion of Counsel requested by
the Trustee in connection with any such amendment may rely expressly on such
confirmation as the basis therefor).
(b) This Agreement may also be amended from time to
time by the parties hereto (and the Trustee may agree to any amendment of the
Servicing Agreement or the Special Servicing Agreement) with the consent of the
Holders of Certificates entitled to not less than 66-2/3% of the Voting Rights,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement (or of the Servicing
Agreement or the Special Servicing Agreement) or of modifying in any manner the
rights of the Holders; provided that no such amendment may (i) reduce in any
manner the amount of, or delay the timing of, payments received on the Mortgage
Loans which are required to be distributed on any Certificate without the
consent of the Holder of such Certificate, (ii) reduce the aforesaid percentages
of Voting Rights, the Holders of which are required to consent to any such
amendment, without the consent of all the Certificateholders or (iii) adversely
affect the status of REMIC I, REMIC II or REMIC III as a REMIC for federal
income tax purposes.
(c) The costs and expenses associated with any such
amendment shall be borne by the Depositor, in the case of clauses (i), (ii) and
(iii) of Section 11.03(a), and otherwise shall be borne by the party requesting
the amendment.
(d) Promptly after the execution of any such
amendment, the Trustee shall furnish written notification of the substance of
such amendment to each Holder, the Depositor and the Rating Agencies.
(e) It shall not be necessary for the consent of
Holders under this Section 11.03 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 Holders shall be subject to such
reasonable regulations as the Trustee may prescribe.
Section 11.04 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED
IN NEW YORK.
Section 11.05 NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given when
received by (a) the Depositor at 200 Vesey Street, New York, New York 10285,
Attention: Manager of Commercial Contract Finance; (b) the Trustee and the
Fiscal Agent at 135 South LaSalle Street, Suite 1740, Chicago, Illinois
60674-4107, Attention: Asset-Backed Securities Trust Services Group-LB Mortgage
Trust II, 1996-C2; (c) the Servicer at 100 South Wacker Drive, Suite 400,
Chicago, Illinois 60606, Attention: Master Servicing Manager, with a copy to
GMAC Mortgage Corporation, 100 Witmer Road, Horsham, Pennsylvania 19044-0963,
Attention: General Counsel, or (d) the Special Servicer at 11200 Rockville Pike,
Rockville, Maryland 20852, Attention: Frederick R.
128
<PAGE>
Burchill (with copies to David Iannarone, Esq., 11200 Rockville Pike, Rockville,
Maryland 20852); or as to each party at such other address as may hereafter be
furnished by such party to the other parties in writing. Any notice required or
permitted to be mailed to a Holder shall be given by first class mail, postage
prepaid, at the address of such Holder as shown in the Certificate Register. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice.
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 INDULGENCES; NO WAIVERS. Neither the failure nor
any delay on the part of a party to exercise any right, remedy, power or
privilege under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, remedy, power or privilege preclude any
other or further exercise of the same or of any other right, remedy, power or
privilege, nor shall any waiver of any right, remedy, power or privilege with
respect to any occurrence be construed as a waiver of such right, remedy, power
or privilege with respect to any other occurrence. No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted such
waiver.
Section 11.08 HEADINGS NOT TO AFFECT INTERPRETATION. The
headings contained in this Agreement are for convenience of reference only, and
shall not be used in the interpretation hereof.
Section 11.09 SPECIAL NOTICES TO THE RATING AGENCIES.
(a) The Depositor shall give prompt notice to the
Rating Agencies of the occurrence of any of the following events of which it has
notice:
(i) any amendment to any of the Transaction Documents;
(ii) the Interim Certification required
pursuant to Section 2.02(b) hereof and the Final Certification required
pursuant to Section 2.02(d) hereof;
(iii) the repurchase of any Mortgage Loan
pursuant to Article II hereof;
(iv) any resignation of the Servicer
pursuant to the Servicing Agreement or of the Special Servicer pursuant
to the Special Servicing Agreement;
(v) any resignation or removal of the
Trustee pursuant to Section 7.06 hereof;
129
<PAGE>
(vi) the appointment of any successor to the
Servicer pursuant to Section 5.02 hereof or of the Special Servicer
pursuant to Section 5.03 hereof;
(vii) the appointment of a successor trustee
pursuant to Section 7.07 hereof;
(viii) the election of an Operating Adviser;
or
(ix) the making of a final payment as
contemplated by Section 8.02 hereof.
(b) All notices to the Rating Agencies shall be in
writing and sent by first class mail, telecopy or overnight courier, as follows:
If to Fitch, to:
Fitch Investors Services, L.P.
One State Street Plaza
New York, N.Y. 10004
Attention: Commercial Mortgage Surveillance
If to D&P, to:
Duff & Phelps Credit Rating Co.
55 East Monroe Street
Chicago, Illinois 60603
Attention: Structured Finance - Commercial Real Estate Monitoring
If to Moody's, to:
Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
Attention: Commercial Mortgage Surveillance Group
If to any other Rating Agency, at such address as shall be
provided in writing to the Depositor by such Rating Agency.
(c) The Trustee shall deliver to the Rating Agencies
reports prepared pursuant to Section 5.11(d) and other information in the
Trustee's possession as reasonably requested by the Rating Agencies.
(d) Each of the Servicer, the Trustee and the Fiscal
Agent shall deliver to the Depositor any document that the Servicer, the Trustee
or the Fiscal Agent is required by any of the Transaction Documents to deliver
to any of the other of such parties. Any notice or other document required to be
delivered or mailed by the Depositor, the Servicer, the Special Servicer or the
Trustee pursuant to any of the Transaction Documents shall be given by such
130
<PAGE>
parties, respectively, on a best efforts basis and only as a matter of courtesy
and accommodation to the Rating Agencies, unless otherwise specifically required
herein, and such parties, respectively, shall have no liability for failure to
deliver any such notice or document to the Rating Agencies.
Section 11.10 COUNTERPARTS. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an original, and
all of which together shall constitute one and the same instrument.
Section 11.11 SUCCESSORS AND ASSIGNS. Any permitted successor
or assign of the Trustee hereunder, of the Servicer under the Servicing
Agreement or of the Special Servicer under the Special Servicing Agreement
shall, in each such case, succeed to the rights and obligations of such party
under the other Transaction Documents without the execution or filing of any
paper or any further act on the part of any of the parties to any of the
Transaction Documents, anything herein to the contrary notwithstanding.
131
<PAGE>
IN WITNESS WHEREOF, the Depositor, the Trustee, the Fiscal
Agent, the Servicer and the Special Servicer have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
day and year first above written.
STRUCTURED ASSET SECURITIES
CORPORATION, as Depositor
By:__________________________________
Name:
Title:
LASALLE NATIONAL BANK, as Trustee
By:__________________________________
Name:
Title:
ABN AMRO BANK N.V., as Fiscal Agent
By:__________________________________
Name:
Title:
By:__________________________________
Name:
Title:
GMAC COMMERCIAL MORTGAGE
CORPORATION, as Servicer
By:_________________________________
Name:
Title:
CRIIMI MAE SERVICES LIMITED
PARTNERSHIP, as Special Servicer
By: CRIIMI MAE Management, Inc.
its general partner
By:__________________________________
Name:
Title:
<PAGE>
STATE OF NEW YORK )
): ss.:
COUNTY OF NEW YORK )
On this ____ day of October 1996, before me, a notary public
in and for said State, personally appeared _______________________, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person who executed the within instrument as ____________________ of Structured
Asset Securities Corporation, and acknowledged to me that such corporation
executed the within instrument pursuant to its by-laws or a resolution of its
Board of Directors.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed
my official seal the day and year in this certificate first above written.
------------------------------
Notary Public
<PAGE>
STATE OF ILLINOIS )
): ss.:
COUNTY OF COOK )
On this ____ day of October 1996, before me, a notary public
in and for said State, personally appeared ___________________, personally known
to me (or proved to me on the basis of satisfactory evidence) to be the person
who executed the within instrument as ___________________ of LaSalle National
Bank, and acknowledged to me that such banking corporation executed the within
instrument pursuant to its by-laws or a resolution of its Board of Directors.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed
my official seal the day and year in this certificate first above written.
------------------------------
Notary Public
<PAGE>
STATE OF ILLINOIS )
): ss.:
COUNTY OF COOK )
On this ______ day of October 1996, before me, a notary public
in and for said State, personally appeared ____________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person who executed the within instrument as ________________ of ABN
AMRO Bank N.V., and acknowledged to me that such banking corporation executed
the within instrument pursuant to its by-laws or a resolution of its Board of
Directors.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed
my official seal the day and year in this certificate first above written.
------------------------------
Notary Public
<PAGE>
STATE OF ILLINOIS )
): ss.:
COUNTY OF COOK )
On this ______ day of October 1996, before me, a notary public
in and for said State, personally appeared ____________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person who executed the within instrument as ________________ of ABN
AMRO Bank N.V., and acknowledged to me that such banking corporation executed
the within instrument pursuant to its by-laws or a resolution of its Board of
Directors.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed
my official seal the day and year in this certificate first above written.
------------------------------
Notary Public
<PAGE>
STATE OF ILLINOIS )
): ss.:
COUNTY OF COOK )
On this _____ day of October 1996, before me, a notary public
in and for said State, personally appeared _______________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person who executed the within instrument as ________________ of GMAC
Commercial Mortgage Corporation, and acknowledged to me that such corporation
executed the within instrument pursuant to its by-laws or a resolution of its
Board of Directors.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed
my official seal the day and year in this certificate first above written.
------------------------------
Notary Public
<PAGE>
STATE OF MARYLAND )
): ss.:
COUNTY OF _____________ )
On this _____ day of October 1996, before me, a notary public
in and for said State, personally appeared _________________________, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person who executed the within instrument as ________________ of CRIIMI MAE
Management, Inc., the general partner of CRIIMI MAE Services Limited
Partnership, and acknowledged to me that such corporation executed the within
instrument pursuant to its by-laws or a resolution of its Board of Directors on
behalf of such limited partnership.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed
my official seal the day and year in this certificate first above written.
------------------------------
Notary Public
<PAGE>
FORMS OF CERTIFICATES
EXHIBIT A-1
CLASS A CERTIFICATE
LB COMMERCIAL CONDUIT MORTGAGE TRUST II
CLASS A MULTICLASS PASS-THROUGH CERTIFICATE,
SERIES 1996-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of multifamily and commercial mortgage loans (the
"Mortgage Loans"), such pool being formed and sold by
STRUCTURED ASSET SECURITIES CORPORATION
Initial Certificate Interest Initial Aggregate Certificate Principal
Rate: Approximately 7.416% per annum Amount of the Class A Certificates:
$270,097,693
Cut-off Date:
October 1, 1996 Initial Certificate Principal
Amount of this Class A
Closing Date: October 30, 1996 Certificate:
$-------------
First Distribution Date:
November 25, 1996 Aggregate Scheduled Principal
Balance of the Mortgage Loans
Servicer: as of the Cut-off Date:
GMAC Commercial Mortgage Corporation $397,202,489.27
Special Servicer: Trustee:
CRIIMI MAE Services Limited Partnership LaSalle National Bank
Fiscal Agent:
ABN AMRO Bank N.V.
Certificate No. A-__ CUSIP No. _________
<PAGE>
-2-
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR,
THE SERVICER, 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 STRUCTURED
ASSET SECURITIES CORPORATION, GMAC COMMERCIAL MORTGAGE CORPORATION, CRIIMI MAE
SERVICES LIMITED PARTNERSHIP, LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY
OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES OR BY 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 INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH IN THE TRUST AGREEMENT REFERRED TO
HEREIN. IN ADDITION, IF THE AGGREGATE CERTIFICATE PRINCIPAL AMOUNT OF THE CLASS
B, CLASS C, CLASS D, CLASS E, CLASS F, CLASS G, CLASS H AND CLASS J CERTIFICATES
OF THE SAME SERIES IS REDUCED TO ZERO, THE CERTIFICATE PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY BE REDUCED BY CERTAIN LOSSES AND EXPENSES EXPERIENCED BY THE
TRUST FUND AS SET FORTH IN THE TRUST AGREEMENT REFERRED TO HEREIN. ACCORDINGLY,
THE OUTSTANDING CERTIFICATE PRINCIPAL AMOUNT 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 Class A Certificate (obtained by dividing
the principal amount of this Class A Certificate (its "Certificate Principal
Amount") as of the Closing Date by the aggregate principal amount of all the
Class A Certificates (their "Aggregate Certificate Principal Amount") as of the
Closing Date) in that certain beneficial ownership interest evidenced by all the
Class A Certificates in the Trust Fund created pursuant to a Trust Agreement,
dated as of the Cut-off Date (the "Agreement"), among Structured Asset
Securities Corporation (hereinafter called the "Depositor", which term includes
any successor entity under the Agreement), GMAC
<PAGE>
-3-
Commercial Mortgage Corporation (hereinafter called the "Servicer", which term
includes any successor entity under the Agreement), CRIIMI MAE Services Limited
Partnership (hereinafter called the "Special Servicer", which term includes any
successor entity under the Agreement), ABN AMRO Bank N.V. (hereinafter called
the "Fiscal Agent", which term includes any successor entity under the
Agreement) and LaSalle National Bank (hereinafter called the "Trustee", which
term includes any successor entity under the Agreement), a summary of certain of
the pertinent provisions of which is set forth hereafter. 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 and the other Transaction
Documents, to which agreements and documents 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 25th day of each month or, if such 25th 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 to the Holders of
the Class A Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on this Class A
Certificate will be made by or on behalf of the Trustee by check mailed to the
relevant Holder's address as it appears on the Certificate Register of the
Certificate Registrar or, upon written request of any Holder made to the Trustee
or the Paying Agent at least five Business Days prior to the related Record Date
(or upon standing instructions given to the Trustee or the Paying Agent on the
Closing Date or five Business Days prior to any Record Date, which instructions
may be revoked at any time thereafter upon written notice to the Trustee or the
Paying Agent five Business Days prior to the related Record Date), by wire
transfer in immediately available funds to an account specified in the request
of such Certificateholder; provided that (i) distributions to the Depository
shall be made by wire transfer of immediately available funds to the account
specified thereby and (ii) the final distribution in respect of any Certificate
shall be made only upon presentation and surrender of such Certificate at the
Corporate Trust Office. Wire transfers, other than to the Depository, will be
made at the expense of the Holder requesting such wire transfer by deducting a
wire transfer fee from the related distribution. If any payment required to be
made on the Certificates is to be made on a day that is not a Business Day, then
such payment will be made on the next succeeding Business Day without
compensation for such delay.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein, in the Agreement and in the other Transaction
Documents. As provided in the Agreement and in the other Transaction Documents,
withdrawals from the Collection Account, the Custodial Account and, if
established, the REO Accounts may be made from time to time for purposes other
than, and, in certain cases, prior to, distributions to Certificateholders, such
purposes including the
<PAGE>
-4-
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans and the payment of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Principal Amount 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 Class A Certificates are issuable in fully registered
certificated form only, without coupons, in minimum denominations specified in
the Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Class A Certificates are exchangeable for new Class A
Certificates in authorized denominations evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
This Certificate may be transferred by the Holder thereof only
upon presentation and surrender of such Certificate at the New York Presenting
Office duly endorsed or accompanied by an assignment duly executed by such
Holder or his duly authorized attorney in such form as shall be satisfactory to
the Certificate Registrar. Upon the transfer of this Certificate in accordance
with the preceding sentence, the Trustee shall execute, and the Trustee or any
Authenticating Agent shall authenticate and deliver to the transferee, one or
more new Certificates of the same Class, in authorized denominations, evidencing
in the aggregate the same aggregate Certificate Principal Amount as the
Certificate being transferred.
Notwithstanding the foregoing, 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.
The Depositor, the Servicer, the Special Servicer, the Fiscal
Agent, the Trustee and the Certificate Registrar and any agent of the Depositor,
the Servicer, the Special Servicer, the Fiscal Agent, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Special Servicer, the Fiscal Agent, the Trustee, 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
and the other Transaction Documents shall terminate upon distribution (or
provision for distribution) to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be distributed to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan or REO Property
remaining in the Trust Fund, and (ii) the purchase by the Servicer or the Class
R-III Certificateholders at a price determined as provided in the Agreement of
all Mortgage Loans and each REO Property remaining in the Trust Fund. The
Agreement permits, but does not require, the Servicer or the Class R-III
Certificateholders to purchase from the Trust Fund all Mortgage Loans and each
REO Property remaining therein. The exercise of such right will effect early
<PAGE>
-5-
retirement of the Class A Certificates; however, such right to purchase is
subject to the Aggregate Certificate Principal Amount of the Sequential Pay
Certificates at the time of purchase being not more than 5% of the Aggregate
Certificate Principal Amount of the Sequential Pay Certificates as of the
Closing Date.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and of the other Transaction Documents and the
modification of the rights and obligations of the Depositor, the Servicer, the
Special Servicer, the Fiscal Agent and the Trustee and the rights of the
Certificateholders under such agreements and documents at any time by the
parties thereto with the consent of the Holders of Certificates entitled to not
less than 66-2/3% of the Voting Rights. 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 and of the other Transaction Documents, in certain limited
circumstances, including any amendment necessary to maintain the status of each
of REMIC I, REMIC II and REMIC III as a REMIC, without the consent of the
Holders of any of the Certificates.
Unless the certificate of authentication hereon has been
executed by the Authenticating Agent, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder.
This Certificate shall be construed in accordance with the
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 Holder hereof
shall be determined in accordance with such laws.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
LASALLE NATIONAL BANK,
as Trustee
By:__________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A Certificates referred to in the
within-mentioned Agreement.
Dated:
LASALLE NATIONAL BANK,
as Authenticating Agent
By:________________________________
Authorized Officer
<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
Multiclass PassThrough Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Multiclass PassThrough Certificate of a like Percentage Interest and Class to
the above named assignee and deliver such Multiclass 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.
<PAGE>
EXHIBIT A-2
CLASS B CERTIFICATE
LB COMMERCIAL CONDUIT MORTGAGE TRUST II
CLASS B MULTICLASS PASS-THROUGH CERTIFICATE,
SERIES 1996-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of multifamily and commercial mortgage loans (the
"Mortgage Loans"), such pool being formed and sold by
STRUCTURED ASSET SECURITIES CORPORATION
Initial Certificate Interest Initial Aggregate Certificate Principal
Rate: Approximately 7.606% per annum Amount of the Class B Certificates:
$27,804,174
Cut-off Date:
October 1, 1996 Initial Certificate Principal
Amount of this Class B
Closing Date: October 30, 1996 Certificate:
$-------------
First Distribution Date:
November 25, 1996 Aggregate Scheduled Principal
Balance of the Mortgage Loans
Servicer: as of the Cut-off Date:
GMAC Commercial Mortgage Corporation $397,202,489.27
Special Servicer: Trustee:
CRIIMI MAE Services Limited Partnership LaSalle National Bank
Fiscal Agent:
ABN AMRO Bank N.V.
Certificate No. B-__ CUSIP No. _________
<PAGE>
-2-
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR,
THE SERVICER, 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 STRUCTURED
ASSET SECURITIES CORPORATION, GMAC COMMERCIAL MORTGAGE CORPORATION, CRIIMI MAE
SERVICES LIMITED PARTNERSHIP, LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY
OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES OR BY ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A AND CLASS IO CERTIFICATES OF THE
SAME SERIES TO THE EXTENT DESCRIBED IN THE TRUST AGREEMENT REFERRED TO HEREIN.
EXCEPT UNDER THE LIMITED CIRCUMSTANCES DESCRIBED HEREIN, NO TRANSFER OF THIS
CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE (A) 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 THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE") (ANY SUCH EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT, A "PLAN"), OR (B) TO 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.
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.
IF THE AGGREGATE CERTIFICATE PRINCIPAL AMOUNT OF THE CLASS A CERTIFICATES OF THE
SAME SERIES IS REDUCED TO ZERO, DISTRIBUTIONS
<PAGE>
-3-
IN REDUCTION OF THE CERTIFICATE PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY BE MADE
MONTHLY AS SET FORTH IN THE TRUST AGREEMENT REFERRED TO HEREIN. IN ADDITION, IF
THE AGGREGATE CERTIFICATE PRINCIPAL AMOUNT OF THE CLASS C, CLASS D, CLASS E,
CLASS F, CLASS G, CLASS H AND CLASS J CERTIFICATES OF THE SAME SERIES IS REDUCED
TO ZERO, THE CERTIFICATE PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY BE REDUCED BY
CERTAIN LOSSES AND EXPENSES EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE
TRUST AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE
PRINCIPAL AMOUNT 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 Class B Certificate (obtained by dividing
the principal amount of this Class B Certificate (its "Certificate Principal
Amount") as of the Closing Date by the aggregate principal amount of all the
Class B Certificates (their "Aggregate Certificate Principal Amount") as of the
Closing Date) in that certain beneficial ownership interest evidenced by all the
Class B Certificates in the Trust Fund created pursuant to a Trust Agreement,
dated as of the Cut-off Date (the "Agreement"), among Structured Asset
Securities Corporation (hereinafter called the "Depositor", which term includes
any successor entity under the Agreement), GMAC Commercial Mortgage Corporation
(hereinafter called the "Servicer", which term includes any successor entity
under the Agreement), CRIIMI MAE Services Limited Partnership (hereinafter
called the "Special Servicer", which term includes any successor entity under
the Agreement), ABN AMRO Bank N.V. (hereinafter called the "Fiscal Agent", which
term includes any successor entity under the Agreement) and LaSalle National
Bank (hereinafter called the "Trustee", which term includes any successor entity
under the Agreement), a summary of certain of the pertinent provisions of which
is set forth hereafter. 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 and the other Transaction Documents, to which
agreements and documents 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 25th day of each month or, if such 25th 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 to the Holders of
the Class B Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on this Class B
Certificate will be made by or on behalf of the Trustee by check mailed to the
relevant Holder's address as it appears on the Certificate Register of the
Certificate Registrar or, upon written request of any Holder made to the Trustee
or the Paying Agent at least five Business Days prior to the related Record Date
(or upon standing instructions given
<PAGE>
-4-
to the Trustee or the Paying Agent on the Closing Date or five Business Days
prior to any Record Date, which instructions may be revoked at any time
thereafter upon written notice to the Trustee or the Paying Agent five Business
Days prior to the related Record Date), by wire transfer in immediately
available funds to an account specified in the request of such
Certificateholder; provided that (i) distributions to the Depository shall be
made by wire transfer of immediately available funds to the account specified
thereby and (ii) the final distribution in respect of any Certificate shall be
made only upon presentation and surrender of such Certificate at the Corporate
Trust Office. Wire transfers, other than to the Depository, will be made at the
expense of the Holder requesting such wire transfer by deducting a wire transfer
fee from the related distribution. If any payment required to be made on the
Certificates is to be made on a day that is not a Business Day, then such
payment will be made on the next succeeding Business Day without compensation
for such delay.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein, in the Agreement and in the other Transaction
Documents. As provided in the Agreement and in the other Transaction Documents,
withdrawals from the Collection Account, the Custodial Account and, if
established, the REO Accounts 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.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Principal Amount 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 Class B Certificates are issuable in fully registered
certificated form only, without coupons, in minimum denominations specified in
the Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Class B Certificates are exchangeable for new Class B
Certificates in authorized denominations evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
This Certificate may be transferred by the Holder thereof only
upon presentation and surrender of such Certificate at the New York Presenting
Office duly endorsed or accompanied by an assignment duly executed by such
Holder or his duly authorized attorney in such form as shall be satisfactory to
the Certificate Registrar. Upon the transfer of this Certificate in accordance
with the preceding sentence, the Trustee shall execute, and the Trustee or any
Authenticating Agent shall authenticate and deliver to the transferee, one or
more new Certificates of the same Class, in authorized denominations, evidencing
in the aggregate the same aggregate Certificate Principal Amount as the
Certificate being transferred.
No transfer of a Class B Certificate or any interest therein
shall be made to (A) a Plan or (B) any Person who is directly or indirectly
purchasing the Class B Certificate or interest therein on behalf of, as named
fiduciary of, as trustee of, or with assets of a Plan, unless
<PAGE>
-5-
the purchase and holding 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 Class Exemption 95-60. Any such Plan or
Person to whom a transfer of any such Certificate or interest therein is made
shall be deemed to have represented to the Depositor, the Servicer, the Special
Servicer, the Trustee, any Sub-Servicer and each Mortgagor with respect to the
Mortgage Loans that the purchase and holding of such Certificate or interest
therein is so exempt on the basis of Prohibited Transaction Class Exemption
95-60.
Notwithstanding the foregoing, 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.
The Depositor, the Servicer, the Special Servicer, the Fiscal
Agent, the Trustee and the Certificate Registrar and any agent of the Depositor,
the Servicer, the Special Servicer, the Fiscal Agent, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Special Servicer, the Fiscal Agent, the Trustee, 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
and the other Transaction Documents shall terminate upon distribution (or
provision for distribution) to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be distributed to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan or REO Property
remaining in the Trust Fund, and (ii) the purchase by the Servicer or the Class
R-III Certificateholders at a price determined as provided in the Agreement of
all Mortgage Loans and each REO Property remaining in the Trust Fund. The
Agreement permits, but does not require, the Servicer or the Class R-III
Certificateholders to purchase from the Trust Fund all Mortgage Loans and each
REO Property remaining therein. The exercise of such right will effect early
retirement of the Class B Certificates; however, such right to purchase is
subject to the Aggregate Certificate Principal Amount of the Sequential Pay
Certificates at the time of purchase being not more than 5% of the Aggregate
Certificate Principal Amount of the Sequential Pay Certificates as of the
Closing Date.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and of the other Transaction Documents and the
modification of the rights and obligations of the Depositor, the Servicer, the
Special Servicer, the Fiscal Agent and the Trustee and the rights of the
Certificateholders under such agreements and documents at any time by the
parties thereto with the consent of the Holders of Certificates entitled to not
less than 66-2/3% of the Voting Rights. 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 and of the other Transaction Documents, in certain limited
circumstances, including any
<PAGE>
-6-
amendment necessary to maintain the status of each of REMIC I, REMIC II and
REMIC III as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been
executed by the Authenticating Agent, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder.
This Certificate shall be construed in accordance with the
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 Holder hereof
shall be determined in accordance with such laws.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
LASALLE NATIONAL BANK,
as Trustee
By:__________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates referred to in the
within-mentioned Agreement.
Dated:
LASALLE NATIONAL BANK,
as Authenticating Agent
By:________________________________
Authorized Officer
<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
Multiclass PassThrough Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Multiclass PassThrough Certificate of a like Percentage Interest and Class to
the above named assignee and deliver such Multiclass 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.
<PAGE>
EXHIBIT A-3
CLASS C CERTIFICATE
LB COMMERCIAL CONDUIT MORTGAGE TRUST II
CLASS C MULTICLASS PASS-THROUGH CERTIFICATE,
SERIES 1996-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of multifamily and commercial mortgage loans (the
"Mortgage Loans"), such pool being formed and sold by
STRUCTURED ASSET SECURITIES CORPORATION
Initial Certificate Interest Initial Aggregate Certificate Principal
Rate: Approximately 7.726% per annum Amount of the Class C Certificates:
$23,832,149
Cut-off Date:
October 1, 1996 Initial Certificate Principal
Amount of this Class C
Closing Date: October 30, 1996 Certificate:
$-------------
First Distribution Date:
November 25, 1996 Aggregate Scheduled Principal
Balance of the Mortgage Loans
Servicer: as of the Cut-off Date:
GMAC Commercial Mortgage Corporation $397,202,489.27
Special Servicer: Trustee:
CRIIMI MAE Services Limited Partnership LaSalle National Bank
Fiscal Agent:
ABN AMRO Bank N.V.
Certificate No. C-___ CUSIP No. _________
<PAGE>
-2-
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR,
THE SERVICER, 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 STRUCTURED
ASSET SECURITIES CORPORATION, GMAC COMMERCIAL MORTGAGE CORPORATION, CRIIMI MAE
SERVICES LIMITED PARTNERSHIP, LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY
OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES OR BY ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A, CLASS IO AND CLASS B
CERTIFICATES OF THE SAME SERIES TO THE EXTENT DESCRIBED IN THE TRUST AGREEMENT
REFERRED TO HEREIN.
EXCEPT UNDER THE LIMITED CIRCUMSTANCES DESCRIBED HEREIN, NO TRANSFER OF THIS
CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE (A) 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 THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE") (ANY SUCH EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT, A "PLAN"), OR (B) TO 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.
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.
IF THE AGGREGATE CERTIFICATE PRINCIPAL AMOUNT OF THE CLASS A AND CLASS B
CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO,
<PAGE>
-3-
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH IN THE TRUST AGREEMENT REFERRED TO
HEREIN. IN ADDITION, IF THE AGGREGATE CERTIFICATE PRINCIPAL AMOUNT OF THE CLASS
D, CLASS E, CLASS F, CLASS G, CLASS H AND CLASS J CERTIFICATES OF THE SAME
SERIES IS REDUCED TO ZERO, THE CERTIFICATE PRINCIPAL AMOUNT OF THIS CERTIFICATE
MAY BE REDUCED BY CERTAIN LOSSES AND EXPENSES EXPERIENCED BY THE TRUST FUND AS
SET FORTH IN THE TRUST AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL AMOUNT 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 Class C Certificate (obtained by dividing
the principal amount of this Class C Certificate (its "Certificate Principal
Amount") as of the Closing Date by the aggregate principal amount of all the
Class C Certificates (their "Aggregate Certificate Principal Amount") as of the
Closing Date) in that certain beneficial ownership interest evidenced by all the
Class C Certificates in the Trust Fund created pursuant to a Trust Agreement,
dated as of the Cut-off Date (the "Agreement"), among Structured Asset
Securities Corporation (hereinafter called the "Depositor", which term includes
any successor entity under the Agreement), GMAC Commercial Mortgage Corporation
(hereinafter called the "Servicer", which term includes any successor entity
under the Agreement), CRIIMI MAE Services Limited Partnership (hereinafter
called the "Special Servicer", which term includes any successor entity under
the Agreement), ABN AMRO Bank N.V. (hereinafter called the "Fiscal Agent", which
term includes any successor entity under the Agreement) and LaSalle National
Bank (hereinafter called the "Trustee", which term includes any successor entity
under the Agreement), a summary of certain of the pertinent provisions of which
is set forth hereafter. 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 and the other Transaction Documents, to which
agreements and documents 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 25th day of each month or, if such 25th 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 to the Holders of
the Class C Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on this Class C
Certificate will be made by or on behalf of the Trustee by check mailed to the
relevant Holder's address as it appears on the Certificate Register of the
Certificate Registrar or, upon written request of any Holder made to the Trustee
or the Paying Agent at least five Business Days prior to the related Record Date
(or upon standing instructions given to the Trustee or the Paying Agent on the
Closing Date or five Business Days prior to any
<PAGE>
-4-
Record Date, which instructions may be revoked at any time thereafter upon
written notice to the Trustee or the Paying Agent five Business Days prior to
the related Record Date), by wire transfer in immediately available funds to an
account specified in the request of such Certificateholder; provided that (i)
distributions to the Depository shall be made by wire transfer of immediately
available funds to the account specified thereby and (ii) the final distribution
in respect of any Certificate shall be made only upon presentation and surrender
of such Certificate at the Corporate Trust Office. Wire transfers, other than to
the Depository, will be made at the expense of the Holder requesting such wire
transfer by deducting a wire transfer fee from the related distribution. If any
payment required to be made on the Certificates is to be made on a day that is
not a Business Day, then such payment will be made on the next succeeding
Business Day without compensation for such delay.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein, in the Agreement and in the other Transaction
Documents. As provided in the Agreement and in the other Transaction Documents,
withdrawals from the Collection Account, the Custodial Account and, if
established, the REO Accounts 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.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Principal Amount 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 Class C Certificates are issuable in fully registered
certificated form only, without coupons, in minimum denominations specified in
the Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Class C Certificates are exchangeable for new Class C
Certificates in authorized denominations evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
This Certificate may be transferred by the Holder thereof only
upon presentation and surrender of such Certificate at the New York Presenting
Office duly endorsed or accompanied by an assignment duly executed by such
Holder or his duly authorized attorney in such form as shall be satisfactory to
the Certificate Registrar. Upon the transfer of this Certificate in accordance
with the preceding sentence, the Trustee shall execute, and the Trustee or any
Authenticating Agent shall authenticate and deliver to the transferee, one or
more new Certificates of the same Class, in authorized denominations, evidencing
in the aggregate the same aggregate Certificate Principal Amount as the
Certificate being transferred.
No transfer of a Class C Certificate or any interest therein
shall be made to (A) a Plan or (B) any Person who is directly or indirectly
purchasing the Class C Certificate or interest therein on behalf of, as named
fiduciary of, as trustee of, or with assets of a Plan, unless the purchase and
holding of such Certificate or interest therein is exempt from the prohibited
<PAGE>
-5-
transaction provisions of Section 406 of ERISA and Section 4975 of the Code
under Prohibited Transaction Class Exemption 95-60. Any such Plan or Person to
whom a transfer of any such Certificate or interest therein is made shall be
deemed to have represented to the Depositor, the Servicer, the Special Servicer,
the Trustee, any Sub-Servicer and each Mortgagor with respect to the Mortgage
Loans that the purchase and holding of such Certificate or interest therein is
so exempt on the basis of Prohibited Transaction Class Exemption 95-60.
Notwithstanding the foregoing, 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.
The Depositor, the Servicer, the Special Servicer, the Fiscal
Agent, the Trustee and the Certificate Registrar and any agent of the Depositor,
the Servicer, the Special Servicer, the Fiscal Agent, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Special Servicer, the Fiscal Agent, the Trustee, 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
and the other Transaction Documents shall terminate upon distribution (or
provision for distribution) to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be distributed to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan or REO Property
remaining in the Trust Fund, and (ii) the purchase by the Servicer or the Class
R-III Certificateholders at a price determined as provided in the Agreement of
all Mortgage Loans and each REO Property remaining in the Trust Fund. The
Agreement permits, but does not require, the Servicer or the Class R-III
Certificateholders to purchase from the Trust Fund all Mortgage Loans and each
REO Property remaining therein. The exercise of such right will effect early
retirement of the Class C Certificates; however, such right to purchase is
subject to the Aggregate Certificate Principal Amount of the Sequential Pay
Certificates at the time of purchase being not more than 5% of the Aggregate
Certificate Principal Amount of the Sequential Pay Certificates as of the
Closing Date.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and of the other Transaction Documents and the
modification of the rights and obligations of the Depositor, the Servicer, the
Special Servicer, the Fiscal Agent and the Trustee and the rights of the
Certificateholders under such agreements and documents at any time by the
parties thereto with the consent of the Holders of Certificates entitled to not
less than 66-2/3% of the Voting Rights. 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 and of the other Transaction Documents, in certain limited
circumstances, including any
<PAGE>
-6-
amendment necessary to maintain the status of each of REMIC I, REMIC II and
REMIC III as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been
executed by the Authenticating Agent, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder.
This Certificate shall be construed in accordance with the
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 Holder hereof
shall be determined in accordance with such laws.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
LASALLE NATIONAL BANK,
as Trustee
By:__________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class C Certificates referred to in the
within-mentioned Agreement.
Dated:
LASALLE NATIONAL BANK,
as Authenticating Agent
By:________________________________
Authorized Officer
<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
Multiclass PassThrough Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Multiclass PassThrough Certificate of a like Percentage Interest and Class to
the above named assignee and deliver such Multiclass 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.
<PAGE>
EXHIBIT A-4
CLASS D CERTIFICATE
LB COMMERCIAL CONDUIT MORTGAGE TRUST II
CLASS D MULTICLASS PASS-THROUGH CERTIFICATE,
SERIES 1996-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of multifamily and commercial mortgage loans (the
"Mortgage Loans"), such pool being formed and sold by
STRUCTURED ASSET SECURITIES CORPORATION
Initial Certificate Interest Initial Aggregate Certificate Principal
Rate: Approximately 7.886% per annum Amount of the Class D Certificates:
$15,888,100
Cut-off Date:
October 1, 1996 Initial Certificate Principal
Amount of this Class D
Closing Date: October 30, 1996 Certificate:
$-------------
First Distribution Date:
November 25, 1996 Aggregate Scheduled Principal
Balance of the Mortgage Loans
Servicer: as of the Cut-of Date:
GMAC Commercial Mortgage Corporation $397,202,489.27
Special Servicer: Trustee:
CRIIMI MAE Services Limited Partnership LaSalle National Bank
Fiscal Agent:
ABN AMRO Bank N.V.
Certificate No. D-___ CUSIP No. _________
<PAGE>
-2-
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR,
THE SERVICER, 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 STRUCTURED
ASSET SECURITIES CORPORATION, GMAC COMMERCIAL MORTGAGE CORPORATION, CRIIMI MAE
SERVICES LIMITED PARTNERSHIP, LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY
OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES OR BY ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A, CLASS IO, CLASS B AND CLASS C
CERTIFICATES OF THE SAME SERIES TO THE EXTENT DESCRIBED IN THE TRUST AGREEMENT
REFERRED TO HEREIN.
EXCEPT UNDER THE LIMITED CIRCUMSTANCES DESCRIBED HEREIN, NO TRANSFER OF THIS
CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE (A) 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 THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE") (ANY SUCH EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT, A "PLAN"), OR (B) 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 ASSETS OF A PLAN.
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.
<PAGE>
-3-
IF THE AGGREGATE CERTIFICATE PRINCIPAL AMOUNT OF THE CLASS A, CLASS B AND CLASS
C CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO, DISTRIBUTIONS IN REDUCTION
OF THE CERTIFICATE PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY BE MADE MONTHLY AS
SET FORTH IN THE TRUST AGREEMENT REFERRED TO HEREIN. IN ADDITION, IF THE
AGGREGATE CERTIFICATE PRINCIPAL AMOUNT OF THE CLASS E, CLASS F, CLASS G, CLASS H
AND CLASS J CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO, THE CERTIFICATE
PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY BE REDUCED BY CERTAIN LOSSES AND
EXPENSES EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE TRUST AGREEMENT
REFERRED TO HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL AMOUNT
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 Class D Certificate (obtained by dividing
the principal amount of this Class D Certificate (its "Certificate Principal
Amount") as of the Closing Date by the aggregate principal amount of all the
Class D Certificates (their "Aggregate Certificate Principal Amount") as of the
Closing Date) in that certain beneficial ownership interest evidenced by all the
Class D Certificates in the Trust Fund created pursuant to a Trust Agreement,
dated as of the Cut-off Date (the "Agreement"), among Structured Asset
Securities Corporation (hereinafter called the "Depositor", which term includes
any successor entity under the Agreement), GMAC Commercial Mortgage Corporation
(hereinafter called the "Servicer", which term includes any successor entity
under the Agreement), CRIIMI MAE Services Limited Partnership (hereinafter
called the "Special Servicer", which term includes any successor entity under
the Agreement), ABN AMRO Bank N.V. (hereinafter called the "Fiscal Agent", which
term includes any successor entity under the Agreement) and LaSalle National
Bank (hereinafter called the "Trustee", which term includes any successor entity
under the Agreement), a summary of certain of the pertinent provisions of which
is set forth hereafter. 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 and the other Transaction Documents, to which
agreements and documents 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 25th day of each month or, if such 25th 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 to the Holders of
the Class D Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on this Class D
Certificate will be made by or on behalf of the Trustee by check mailed to the
relevant Holder's address as it appears on the Certificate Register of the
Certificate
<PAGE>
-4-
Registrar or, upon written request of any Holder made to the Trustee or the
Paying Agent at least five Business Days prior to the related Record Date (or
upon standing instructions given to the Trustee or the Paying Agent on the
Closing Date or five Business Days prior to any Record Date, which instructions
may be revoked at any time thereafter upon written notice to the Trustee or the
Paying Agent five Business Days prior to the related Record Date), by wire
transfer in immediately available funds to an account specified in the request
of such Certificateholder; provided that (i) distributions to the Depository
shall be made by wire transfer of immediately available funds to the account
specified thereby and (ii) the final distribution in respect of any Certificate
shall be made only upon presentation and surrender of such Certificate at the
Corporate Trust Office. Wire transfers, other than to the Depository, will be
made at the expense of the Holder requesting such wire transfer by deducting a
wire transfer fee from the related distribution. If any payment required to be
made on the Certificates is to be made on a day that is not a Business Day, then
such payment will be made on the next succeeding Business Day without
compensation for such delay.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein, in the Agreement and in the other Transaction
Documents. As provided in the Agreement and in the other Transaction Documents,
withdrawals from the Collection Account, the Custodial Account and, if
established, the REO Accounts 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.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Principal Amount 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 Class D Certificates are issuable in fully registered
certificated form only, without coupons, in minimum denominations specified in
the Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Class D Certificates are exchangeable for new Class D
Certificates in authorized denominations evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
This Certificate may be transferred by the Holder thereof only
upon presentation and surrender of such Certificate at the New York Presenting
Office duly endorsed or accompanied by an assignment duly executed by such
Holder or his duly authorized attorney in such form as shall be satisfactory to
the Certificate Registrar. Upon the transfer of this Certificate in accordance
with the preceding sentence, the Trustee shall execute, and the Trustee or any
Authenticating Agent shall authenticate and deliver to the transferee, one or
more new Certificates of the same Class, in authorized denominations, evidencing
in the aggregate the same aggregate Certificate Principal Amount as the
Certificate being transferred.
<PAGE>
-5-
No transfer of a Class D Certificate or any interest therein
shall be made to (A) a Plan or (B) any Person who is directly or indirectly
purchasing the Class D Certificate or interest therein on behalf of, as named
fiduciary of, as trustee of, or with assets of a Plan, unless the purchase and
holding 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 Class Exemption 95-60. Any such Plan or Person to
whom a transfer of any such Certificate or interest therein is made shall be
deemed to have represented to the Depositor, the Servicer, the Special Servicer,
the Trustee, any Sub-Servicer and each Mortgagor with respect to the Mortgage
Loans that the purchase and holding of such Certificate or interest therein is
so exempt on the basis of Prohibited Transaction Class Exemption 95-60.
Notwithstanding the foregoing, 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.
The Depositor, the Servicer, the Special Servicer, the Fiscal
Agent, the Trustee and the Certificate Registrar and any agent of the Depositor,
the Servicer, the Special Servicer, the Fiscal Agent, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Special Servicer, the Fiscal Agent, the Trustee, 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
and the other Transaction Documents shall terminate upon distribution (or
provision for distribution) to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be distributed to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan or REO Property
remaining in the Trust Fund, and (ii) the purchase by the Servicer or the Class
R-III Certificateholders at a price determined as provided in the Agreement of
all Mortgage Loans and each REO Property remaining in the Trust Fund. The
Agreement permits, but does not require, the Servicer or the Class R-III
Certificateholders to purchase from the Trust Fund all Mortgage Loans and each
REO Property remaining therein. The exercise of such right will effect early
retirement of the Class D Certificates; however, such right to purchase is
subject to the Aggregate Certificate Principal Amount of the Sequential Pay
Certificates at the time of purchase being not more than 5% of the Aggregate
Certificate Principal Amount of the Sequential Pay Certificates as of the
Closing Date.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and of the other Transaction Documents and the
modification of the rights and obligations of the Depositor, the Servicer, the
Special Servicer, the Fiscal Agent and the Trustee and the rights of the
Certificateholders under such agreements and documents at any time by the
parties thereto with the consent of the Holders of Certificates entitled to not
less than 66-2/3% of the Voting Rights. 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
<PAGE>
-6-
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 and of the other Transaction Documents, in
certain limited circumstances, including any amendment necessary to maintain the
status of each of REMIC I, REMIC II and REMIC III as a REMIC, without the
consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been
executed by the Authenticating Agent, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to agreements 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.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
LASALLE NATIONAL BANK,
as Trustee
By:__________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class D Certificates referred to in the
within-mentioned Agreement.
Dated:
LASALLE NATIONAL BANK,
as Authenticating Agent
By:________________________________
Authorized Officer
<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
Multiclass PassThrough Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Multiclass PassThrough Certificate of a like Percentage Interest and Class to
the above named assignee and deliver such Multiclass 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.
<PAGE>
EXHIBIT A-5
CLASS E CERTIFICATE
LB COMMERCIAL CONDUIT MORTGAGE TRUST II
CLASS E MULTICLASS PASS-THROUGH CERTIFICATE,
SERIES 1996-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of multifamily and commercial mortgage loans (the
"Mortgage Loans"), such pool being formed and sold by
STRUCTURED ASSET SECURITIES CORPORATION
Initial Certificate Interest Initial Aggregate Certificate Principal
Rate: Approximately 7.886% per annum Amount of the Class E Certificates:
$7,944,050
Cut-off Date:
October 1, 1996 Initial Certificate Principal
Amount of this Class E
Closing Date: October 30, 1996 Certificate:
$-------------
First Distribution Date:
November 25, 1996 Aggregate Scheduled Principal
Balance of the Mortgage Loans
Servicer: as of the Cut-of Date:
GMAC Commercial Mortgage Corporation $397,202,489.27
Special Servicer: Trustee:
CRIIMI MAE Services Limited Partnership LaSalle National Bank
Fiscal Agent:
ABN AMRO Bank N.V.
Certificate No. E-___ CUSIP No. _________
<PAGE>
-2-
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR,
THE SERVICER, 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 STRUCTURED
ASSET SECURITIES CORPORATION, GMAC COMMERCIAL MORTGAGE CORPORATION, CRIIMI MAE
SERVICES LIMITED PARTNERSHIP, LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY
OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES OR BY ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A, CLASS IO, CLASS B, CLASS C AND
CLASS D CERTIFICATES OF THE SAME SERIES TO THE EXTENT DESCRIBED IN THE TRUST
AGREEMENT REFERRED TO HEREIN.
EXCEPT UNDER THE LIMITED CIRCUMSTANCES DESCRIBED HEREIN, NO TRANSFER OF THIS
CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE (A) 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 THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE") (ANY SUCH EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT, A "PLAN"), OR (B) 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 ASSETS OF A PLAN.
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
<PAGE>
-3-
CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS OCTOBER 30, 1996. 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 (AS
DEFINED IN THE PROSPECTUS DATED JANUARY 29, 1996 AND THE PROSPECTUS SUPPLEMENT
DATED OCTOBER 18, 1996 RELATING TO THIS CERTIFICATE) OF 0% (THE "PREPAYMENT
ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN $_________ OF
OID PER $__________ OF INITIAL CERTIFICATE PRINCIPAL 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
PRINCIPAL AMOUNT, COMPUTED UNDER THE EXACT METHOD. NO REPRESENTATION IS MADE
THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON THE PREPAYMENT ASSUMPTION
OR AT ANY OTHER RATE.
IF THE AGGREGATE CERTIFICATE PRINCIPAL AMOUNT OF THE CLASS A, CLASS B, CLASS C
AND CLASS D CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO, DISTRIBUTIONS IN
REDUCTION OF THE CERTIFICATE PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY BE MADE
MONTHLY AS SET FORTH IN THE TRUST AGREEMENT REFERRED TO HEREIN. IN ADDITION, IF
THE AGGREGATE CERTIFICATE PRINCIPAL AMOUNT OF THE CLASS F, CLASS G, CLASS H AND
CLASS J CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO, THE CERTIFICATE
PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY BE REDUCED BY CERTAIN LOSSES AND
EXPENSES EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE TRUST AGREEMENT
REFERRED TO HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL AMOUNT
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 Class E Certificate (obtained by dividing
the principal amount of this Class E Certificate (its "Certificate Principal
Amount") as of the Closing Date by the aggregate principal amount of all the
Class E Certificates (their "Aggregate Certificate Principal Amount") as of the
Closing Date) in that certain beneficial ownership interest evidenced by all the
Class E Certificates in the Trust Fund created pursuant to a Trust Agreement,
dated as of the Cut-off Date (the "Agreement"), among Structured Asset
Securities Corporation (hereinafter called the "Depositor", which term includes
any successor entity under the Agreement), GMAC Commercial Mortgage Corporation
(hereinafter called the "Servicer", which term includes any successor entity
under the Agreement), CRIIMI MAE Services Limited Partnership (hereinafter
called the "Special Servicer", which term includes any successor entity under
the Agreement), ABN AMRO Bank N.V. (hereinafter called the "Fiscal Agent", which
term includes any successor entity under the Agreement) and LaSalle National
Bank (hereinafter called the "Trustee", which term includes any successor entity
under the Agreement), a summary of certain of the pertinent provisions of which
is set forth hereafter. 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
<PAGE>
-4-
Agreement and the other Transaction Documents, to which agreements and documents
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 25th day of each month or, if such 25th 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 to the Holders of
the Class E Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on this Class E
Certificate will be made by or on behalf of the Trustee by check mailed to the
relevant Holder's address as it appears on the Certificate Register of the
Certificate Registrar or, upon written request of any Holder made to the Trustee
or the Paying Agent at least five Business Days prior to the related Record Date
(or upon standing instructions given to the Trustee or the Paying Agent on the
Closing Date or five Business Days prior to any Record Date, which instructions
may be revoked at any time thereafter upon written notice to the Trustee or the
Paying Agent five Business Days prior to the related Record Date), by wire
transfer in immediately available funds to an account specified in the request
of such Certificateholder; provided that (i) distributions to the Depository
shall be made by wire transfer of immediately available funds to the account
specified thereby and (ii) the final distribution in respect of any Certificate
shall be made only upon presentation and surrender of such Certificate at the
Corporate Trust Office. Wire transfers, other than to the Depository, will be
made at the expense of the Holder requesting such wire transfer by deducting a
wire transfer fee from the related distribution. If any payment required to be
made on the Certificates is to be made on a day that is not a Business Day, then
such payment will be made on the next succeeding Business Day without
compensation for such delay.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein, in the Agreement and in the other Transaction
Documents. As provided in the Agreement and in the other Transaction Documents,
withdrawals from the Collection Account, the Custodial Account and, if
established, the REO Accounts 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.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Principal Amount 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 Class E Certificates are issuable in fully registered
certificated form only, without coupons, in minimum denominations specified in
the Agreement. As provided in the
<PAGE>
-5-
Agreement and subject to certain limitations therein set forth, Class E
Certificates are exchangeable for new Class E Certificates in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
This Certificate may be transferred by the Holder thereof only
upon presentation and surrender of such Certificate at the New York Presenting
Office duly endorsed or accompanied by an assignment duly executed by such
Holder or his duly authorized attorney in such form as shall be satisfactory to
the Certificate Registrar. Upon the transfer of this Certificate in accordance
with the preceding sentence, the Trustee shall execute, and the Trustee or any
Authenticating Agent shall authenticate and deliver to the transferee, one or
more new Certificates of the same Class, in authorized denominations, evidencing
in the aggregate the same aggregate Certificate Principal Amount as the
Certificate being transferred.
No transfer of a Class E Certificate or any interest therein
shall be made to (A) a Plan or (B) any Person who is directly or indirectly
purchasing the Class E Certificate or interest therein on behalf of, as named
fiduciary of, as trustee of, or with assets of a Plan, unless the purchase and
holding 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 Class Exemption 95-60. Any such Plan or Person to
whom a transfer of any such Certificate or interest therein is made shall be
deemed to have represented to the Depositor, the Servicer, the Special Servicer,
the Trustee, any Sub-Servicer and each Mortgagor with respect to the Mortgage
Loans that the purchase and holding of such Certificate or interest therein is
so exempt on the basis of Prohibited Transaction Class Exemption 95-60.
Notwithstanding the foregoing, 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.
The Depositor, the Servicer, the Special Servicer, the Fiscal
Agent, the Trustee and the Certificate Registrar and any agent of the Depositor,
the Servicer, the Special Servicer, the Fiscal Agent, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Special Servicer, the Fiscal Agent, the Trustee, 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
and the other Transaction Documents shall terminate upon distribution (or
provision for distribution) to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be distributed to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan or REO Property
remaining in the Trust Fund, and (ii) the purchase by the Servicer or the Class
R-III Certificateholders at a price determined as provided in the Agreement of
all Mortgage Loans and each REO Property remaining in the Trust Fund. The
Agreement permits, but does not require, the Servicer or the Class R-III
Certificateholders to purchase from the Trust Fund all Mortgage
<PAGE>
-6-
Loans and each REO Property remaining therein. The exercise of such right will
effect early retirement of the Class E Certificates; however, such right to
purchase is subject to the Aggregate Certificate Principal Amount of the
Sequential Pay Certificates at the time of purchase being not more than 5% of
the Aggregate Certificate Principal Amount of the Sequential Pay Certificates as
of the Closing Date.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and of the other Transaction Documents and the
modification of the rights and obligations of the Depositor, the Servicer, the
Special Servicer, the Fiscal Agent and the Trustee and the rights of the
Certificateholders under such agreements and documents at any time by the
parties thereto with the consent of the Holders of Certificates entitled to not
less than 66-2/3% of the Voting Rights. 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 and of the other Transaction Documents, in certain limited
circumstances, including any amendment necessary to maintain the status of each
of REMIC I, REMIC II and REMIC III as a REMIC, without the consent of the
Holders of any of the Certificates.
Unless the certificate of authentication hereon has been
executed by the Authenticating Agent, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to agreements 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.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
LASALLE NATIONAL BANK,
as Trustee
By:__________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class E Certificates referred to in the
within-mentioned Agreement.
Dated:
LASALLE NATIONAL BANK,
as Authenticating Agent
By:________________________________
Authorized Officer
<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
Multiclass PassThrough Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Multiclass PassThrough Certificate of a like Percentage Interest and Class to
the above named assignee and deliver such Multiclass 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.
<PAGE>
EXHIBIT A-6
CLASS IO CERTIFICATE
LB COMMERCIAL CONDUIT MORTGAGE TRUST II
CLASS IO MULTICLASS PASS-THROUGH CERTIFICATE,
SERIES 1996-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of multifamily and commercial mortgage loans (the
"Mortgage Loans"), such pool being formed and sold by
STRUCTURED ASSET SECURITIES CORPORATION
Initial Certificate Interest Initial Aggregate Certificate Notional
Rate: Approximately 1.249% per annum Amount of the Class IO Certificates:
$397,202,489
Cut-off Date:
October 1, 1996 Initial Certificate Notional Amount of
this Class IO Certificate:
$--------------
Closing Date:
October 30, 1996 Aggregate Scheduled Principal
Balance of the Mortgage Loans
First Distribution Date: as of the Cut-off Date:
November 25, 1996 $397,202,489.27
Servicer: Trustee:
GMAC Commercial Mortgage Corporation LaSalle National Bank
Special Servicer: CUSIP No. _________
CRIIMI MAE Services Limited Partnership
Fiscal Agent:
ABN AMRO Bank N.V.
Certificate No. IO-__
<PAGE>
-2-
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN STRUCTURED
ASSET SECURITIES CORPORATION, GMAC COMMERCIAL MORTGAGE CORPORATION, CRIIMI MAE
SERVICES LIMITED PARTNERSHIP, LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY
OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES OR BY 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 INTERNAL
REVENUE CODE OF 1986 (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 OCTOBER
30, 1996. 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 (AS DEFINED IN THE PROSPECTUS DATED JANUARY 29, 1996
AND THE PROSPECTUS SUPPLEMENT DATED OCTOBER 18, 1996 RELATING TO THIS
CERTIFICATE) OF 0% (THE "PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN
ISSUED WITH NO MORE THAN $_________ OF OID PER $__________ OF INITIAL
CERTIFICATE NOTIONAL AMOUNT, THE YIELD TO MATURITY IS ____% PER ANNUM, AND THE
AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE THAN
$_________ PER $__________ OF INITIAL CERTIFICATE NOTIONAL AMOUNT, COMPUTED
UNDER THE EXACT METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT A RATE BASED ON THE PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE.
REDUCTIONS OF THE CERTIFICATE NOTIONAL AMOUNT OF THIS CERTIFICATE MAY BE MADE
MONTHLY AS SET FORTH IN THE TRUST AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE NOTIONAL AMOUNT HEREOF AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ABOVE. THIS CERTIFICATE DOES NOT HAVE A CERTIFICATE PRINCIPAL
AMOUNT AND WILL NOT ENTITLE THE HOLDER HEREOF TO DISTRIBUTIONS OF PRINCIPAL.
This certifies that _____________is the registered owner of
the Percentage Interest evidenced by this Class IO Certificate (obtained by
dividing the notional amount of this Class IO Certificate (its "Certificate
Notional Amount") as of the Closing Date by the aggregate notional amount of all
the Class IO Certificates (their "Aggregate Certificate Notional Amount") as of
the Closing Date) in that certain beneficial ownership interest evidenced by all
the Class IO Certificates in the Trust Fund created pursuant to a Trust
Agreement, dated as of the Cut-off Date (the "Agreement"), among Structured
Asset Securities Corporation (hereinafter called the
<PAGE>
-3-
"Depositor", which term includes any successor entity under the Agreement), GMAC
Commercial Mortgage Corporation (hereinafter called the "Servicer", which term
includes any successor entity under the Agreement), CRIIMI MAE Services Limited
Partnership (hereinafter called the "Special Servicer", which term includes any
successor entity under the Agreement), ABN AMRO Bank N.V. (hereinafter called
the "Fiscal Agent", which term includes any successor entity under the
Agreement) and LaSalle National Bank (hereinafter called the "Trustee", which
term includes any successor entity under the Agreement), a summary of certain of
the pertinent provisions of which is set forth hereafter. 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 and the other Transaction
Documents, to which agreements and documents 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 25th day of each month or, if such 25th 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 to the Holders of
the Class IO Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on this Class IO
Certificate will be made by or on behalf of the Trustee by check mailed to the
relevant Holder's address as it appears on the Certificate Register of the
Certificate Registrar or, upon written request of any Holder made to the Trustee
or the Paying Agent at least five Business Days prior to the related Record Date
(or upon standing instructions given to the Trustee or the Paying Agent on the
Closing Date or five Business Days prior to any Record Date, which instructions
may be revoked at any time thereafter upon written notice to the Trustee or the
Paying Agent five Business Days prior to the related Record Date), by wire
transfer in immediately available funds to an account specified in the request
of such Certificateholder; provided that (i) distributions to the Depository
shall be made by wire transfer of immediately available funds to the account
specified thereby and (ii) the final distribution in respect of any Certificate
shall be made only upon presentation and surrender of such Certificate at the
Corporate Trust Office. Wire transfers, other than to the Depository, will be
made at the expense of the Holder requesting such wire transfer by deducting a
wire transfer fee from the related distribution. If any payment required to be
made on the Certificates is to be made on a day that is not a Business Day, then
such payment will be made on the next succeeding Business Day without
compensation for such delay.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein, in the Agreement and in the other Transaction
Documents. As provided in the Agreement and in the other Transaction Documents,
withdrawals from the Collection Account, the Custodial Account and, if
established, the REO Accounts may be made from time to time for purposes other
than, and, in certain cases, prior to, distributions to Certificateholders, such
purposes including the
<PAGE>
-4-
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 Class IO Certificates are issuable in fully registered
certificated form only, without coupons, in minimum denominations specified in
the Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Class IO Certificates are exchangeable for new Class IO
Certificates in authorized denominations evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
This Certificate may be transferred by the Holder thereof only
upon presentation and surrender of such Certificate at the New York Presenting
Office duly endorsed or accompanied by an assignment duly executed by such
Holder or his duly authorized attorney in such form as shall be satisfactory to
the Certificate Registrar. Upon the transfer of this Certificate in accordance
with the preceding sentence, the Trustee shall execute, and the Trustee or any
Authenticating Agent shall authenticate and deliver to the transferee, one or
more new Certificates of the same Class, in authorized denominations, evidencing
in the aggregate the same aggregate Certificate Notional Amount as the
Certificate being transferred.
The Depositor, the Servicer, the Special Servicer, the Fiscal
Agent, the Trustee and the Certificate Registrar and any agent of the Depositor,
the Servicer, the Special Servicer, the Fiscal Agent, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Special Servicer, the Fiscal Agent, the Trustee, 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
and the other Transaction Documents shall terminate upon distribution (or
provision for distribution) to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be distributed to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan or REO Property
remaining in the Trust Fund, and (ii) the purchase by the Servicer or the Class
R-III Certificateholders at a price determined as provided in the Agreement of
all Mortgage Loans and each REO Property remaining in the Trust Fund. The
Agreement permits, but does not require, the Servicer or the Class R-III
Certificateholders to purchase from the Trust Fund all Mortgage Loans and each
REO Property remaining therein. The exercise of such right will effect early
retirement of the Class IO Certificates; however, such right to purchase is
subject to the Aggregate Certificate Principal Amount of the Sequential Pay
Certificates at the time of purchase being not more than 5% of the Aggregate
Certificate Principal Amount of the Sequential Pay Certificates as of the
Closing Date.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and of the other Transaction Documents and the
modification of the rights and obligations of the Depositor, the Servicer, the
Special Servicer, the Fiscal Agent and the Trustee and the rights of the
Certificateholders under such agreements and documents at any time by the
parties thereto with the consent of the Holders of Certificates entitled to not
less than 66-2/3%
<PAGE>
-5-
of the Voting Rights. 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 limited circumstances, including any amendment necessary to maintain the
status of each of REMIC I, REMIC II and REMIC III as a REMIC, without the
consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been
executed by the Authenticating Agent, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder.
This Certificate shall be construed in accordance with the
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 Holder hereof
shall be determined in accordance with such laws.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
LASALLE NATIONAL BANK,
as Trustee
By:__________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class IO Certificates referred to in the
within-mentioned Agreement.
Dated:
LASALLE NATIONAL BANK,
as Authenticating Agent
By:________________________________
Authorized Officer
<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
Multiclass PassThrough Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Multiclass PassThrough Certificate of a like Percentage Interest and Class to
the above named assignee and deliver such Multiclass 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.
<PAGE>
EXHIBIT A-7
CLASS F CERTIFICATE
LB COMMERCIAL CONDUIT MORTGAGE TRUST II
CLASS F MULTICLASS PASS-THROUGH CERTIFICATE,
SERIES 1996-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of multifamily and commercial mortgage loans (the
"Mortgage Loans"), such pool being formed and sold by
STRUCTURED ASSET SECURITIES CORPORATION
Initial Certificate Interest Initial Aggregate Certificate Principal
Rate: Approximately 7.886% per annum Amount of the Class F Certificates:
$21,846,137
Cut-off Date:
October 1, 1996 Initial Certificate Principal
Amount of this Class F
Closing Date: October 30, 1996 Certificate:
$-------------
First Distribution Date:
November 25, 1996 Aggregate Scheduled Principal
Balance of the Mortgage Loans
Servicer: as of the Cut-off Date:
GMAC Commercial Mortgage Corporation $397,202,489.27
Special Servicer: Trustee:
CRIIMI MAE Services Limited Partnership LaSalle National Bank
Fiscal Agent:
ABN AMRO Bank N.V.
Certificate No. F-__ PIN _________
<PAGE>
-2-
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN STRUCTURED
ASSET SECURITIES CORPORATION, GMAC COMMERCIAL MORTGAGE CORPORATION, CRIIMI MAE
SERVICES LIMITED PARTNERSHIP, LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY
OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES OR BY ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A, CLASS IO, CLASS B, CLASS C,
CLASS D AND CLASS E CERTIFICATES OF THE SAME SERIES TO THE EXTENT DESCRIBED IN
THE TRUST AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES LAWS OF ANY STATE.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT SUCH
REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 3.03 OF THE TRUST AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986 (THE "CODE"),
OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS CERTIFICATE ON
BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH ASSETS OF ANY SUCH
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, WILL BE REGISTERED EXCEPT
IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
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 OCTOBER 30, 1996. 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 (AS
DEFINED IN THE PROSPECTUS DATED JANUARY 29, 1996 AND THE PROSPECTUS SUPPLEMENT
DATED OCTOBER 18, 1996 RELATING TO THIS CERTIFICATE) OF 0% (THE "PREPAYMENT
ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN $_________ OF
OID PER $__________ OF INITIAL CERTIFICATE
<PAGE>
-3-
PRINCIPAL 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 PRINCIPAL AMOUNT, COMPUTED UNDER THE EXACT
METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE
BASED ON THE PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE.
IF THE AGGREGATE CERTIFICATE PRINCIPAL AMOUNT OF THE CLASS A, CLASS B, CLASS C,
CLASS D AND CLASS E CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO,
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH IN THE TRUST AGREEMENT REFERRED TO
HEREIN. IN ADDITION, IF THE AGGREGATE CERTIFICATE PRINCIPAL AMOUNT OF THE CLASS
G, CLASS H AND CLASS J CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO, THE
CERTIFICATE PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY BE REDUCED BY CERTAIN
LOSSES AND EXPENSES EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE TRUST
AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
AMOUNT 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 Class F Certificate (obtained by
dividing the principal amount of this Class F Certificate (its "Certificate
Principal Amount") as of the Closing Date by the aggregate principal amount of
all the Class F Certificates (their "Aggregate Certificate Principal Amount") as
of the Closing Date) in that certain beneficial ownership interest evidenced by
all the Class F Certificates in the Trust Fund created pursuant to a Trust
Agreement, dated as of the Cut-off Date (the "Agreement"), among Structured
Asset Securities Corporation (hereinafter called the "Depositor", which term
includes any successor entity under the Agreement), GMAC Commercial Mortgage
Corporation (hereinafter called the "Servicer", which term includes any
successor entity under the Agreement), CRIIMI MAE Services Limited Partnership
(hereinafter called the "Special Servicer", which term includes any successor
entity under the Agreement), ABN AMRO Bank N.V. (hereinafter called the "Fiscal
Agent", which term includes any successor entity under the Agreement) and
LaSalle National Bank (hereinafter called the "Trustee", which term includes any
successor entity under the Agreement), a summary of certain of the pertinent
provisions of which is set forth hereafter. 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 and the other Transaction Documents,
to which agreements and documents 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 25th day of each month or, if such 25th 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
<PAGE>
-4-
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 to the Holders of the Class F Certificates on the applicable
Distribution Date pursuant to the Agreement. All distributions made under the
Agreement on this Class F Certificate will be made by or on behalf of the
Trustee by check mailed to the relevant Holder's address as it appears on the
Certificate Register of the Certificate Registrar or, upon written request of
any Holder made to the Trustee or the Paying Agent at least five Business Days
prior to the related Record Date (or upon standing instructions given to the
Trustee or the Paying Agent on the Closing Date or five Business Days prior to
any Record Date, which instructions may be revoked at any time thereafter upon
written notice to the Trustee or the Paying Agent five Business Days prior to
the related Record Date), by wire transfer in immediately available funds to an
account specified in the request of such Certificateholder; provided that the
final distribution in respect of any Certificate shall be made only upon
presentation and surrender of such Certificate at the Corporate Trust Office.
Wire transfers, other than to the Depository, will be made at the expense of the
Holder requesting such wire transfer by deducting a wire transfer fee from the
related distribution. If any payment required to be made on the Certificates is
to be made on a day that is not a Business Day, then such payment will be made
on the next succeeding Business Day without compensation for such delay.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein, in the Agreement and in the other Transaction
Documents. As provided in the Agreement and in the other Transaction Documents,
withdrawals from the Collection Account, the Custodial Account and, if
established, the REO Accounts 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.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Principal Amount 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 Class F Certificates are issuable in fully registered
certificated form only, without coupons, in minimum denominations specified in
the Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Class F Certificates are exchangeable for new Class F
Certificates in authorized denominations evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
This Certificate may be transferred by the Holder thereof only
upon presentation and surrender of such Certificate at the New York Presenting
Office duly endorsed or accompanied by an assignment duly executed by such
Holder or his duly authorized attorney in such form as shall be satisfactory to
the Certificate Registrar. Upon the transfer of this Certificate in accordance
with the preceding sentence, the Trustee shall execute, and the Trustee
<PAGE>
-5-
or any Authenticating Agent shall authenticate and deliver to the transferee,
one or more new Certificates of the same Class, in authorized denominations,
evidencing in the aggregate the same aggregate Certificate Principal Amount as
the Certificate being transferred.
No transfer of any Class F Certificate shall be made unless
that transfer is made pursuant to an effective registration statement under the
Securities Act or otherwise in accordance with 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. If a
transfer of any Class F Certificate is to be made without registration under the
Securities Act (other than a transfer thereof by the Depositor or any of its
affiliates), then the Certificate Registrar shall refuse to register such
transfer unless it receives either (a) a certification of the transferor
substantially in the form of Exhibit C-1 attached to the Agreement, or (b) a
certification of the transferor substantially in the form of Exhibit C-2
attached to the Agreement and a certification of the transferee substantially in
the form of Exhibit C-3 attached to the Agreement, or (c) an Opinion of Counsel,
in form and substance reasonably satisfactory to the Certificate Registrar and
the Depositor that such transfer may be made pursuant to an exemption from
registration under the Securities Act, describing the applicable exemption and
the basis therefor, and which Opinion of Counsel shall be accompanied by a
certification of the transferor and/or transferee in form and substance
reasonably satisfactory to the Certificate Registrar, setting forth the facts
surrounding such transfer. In each case, the Certificate Registrar will be
entitled without further investigation to rely upon such Opinion of Counsel or
certification. Any Holder of a Class F Certificate desiring to effect such
transfer shall indemnify the Certificate Registrar, the Trustee, the Fiscal
Agent, the Servicer, the Special Servicer and the Depositor 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. None of the Depositor, the Trustee,
the Servicer, the Special Servicer or the Certificate Registrar is under an
obligation to register or qualify any Class F Certificate under the Securities
Act or any other securities law.
No transfer of a Class F Certificate or any interest therein
shall be made to (A) 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 (B) any Person who is directly or indirectly purchasing the Class F
Certificate or interest therein on behalf of, as named fiduciary of, as trustee
of, or with assets of a Plan, unless the prospective transferee provides the
Certificate Registrar with a certification of facts and an Opinion of Counsel
that 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 or result in the imposition of an excise tax under Section 4975 of
the Code. Each Person who acquires any Class F Certificate or interest therein
(unless it shall have delivered the certification of facts and Opinion of
Counsel referred to in the preceding sentence) shall be deemed to have certified
that it is neither a Plan nor any Person who is directly or indirectly
purchasing such Class F Certificate on behalf of, as named fiduciary of, as
trustee of, or with assets of a Plan.
<PAGE>
-6-
The Depositor, the Servicer, the Special Servicer, the Fiscal
Agent, the Trustee and the Certificate Registrar and any agent of the Depositor,
the Servicer, the Special Servicer, the Fiscal Agent, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Special Servicer, the Fiscal Agent, the Trustee, 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
and the other Transaction Documents shall terminate upon distribution (or
provision for distribution) to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be distributed to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan or REO Property
remaining in the Trust Fund, and (ii) the purchase by the Servicer or the Class
R-III Certificateholders at a price determined as provided in the Agreement of
all Mortgage Loans and each REO Property remaining in the Trust Fund. The
Agreement permits, but does not require, the Servicer or the Class R-III
Certificateholders to purchase from the Trust Fund all Mortgage Loans and each
REO Property remaining therein. The exercise of such right will effect early
retirement of the Class F Certificates; however, such right to purchase is
subject to the Aggregate Certificate Principal Amount of the Sequential Pay
Certificates at the time of purchase being not more than 5% of the Aggregate
Certificate Principal Amount of the Sequential Pay Certificates as of the
Closing Date.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and of the other Transaction Documents and the
modification of the rights and obligations of the Depositor, the Servicer, the
Special Servicer, the Fiscal Agent and the Trustee and the rights of the
Certificateholders under such agreements and documents at any time by the
parties thereto with the consent of the Holders of Certificates entitled to not
less than 66-2/3% of the Voting Rights. 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 and of the other Transaction Documents, in certain limited
circumstances, including any amendment necessary to maintain the status of each
of REMIC I, REMIC II and REMIC III as a REMIC, without the consent of the
Holders of any of the Certificates.
Unless the certificate of authentication hereon has been
executed by the Authenticating Agent, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder.
This Certificate shall be construed in accordance with the
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 Holder hereof
shall be determined in accordance with such laws.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
LASALLE NATIONAL BANK,
as Trustee
By:__________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class F Certificates referred to in the
within-mentioned Agreement.
Dated:
LASALLE NATIONAL BANK,
as Authenticating Agent
By:________________________________
Authorized Officer
<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
Multiclass PassThrough Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Multiclass PassThrough Certificate of a like Percentage Interest and Class to
the above named assignee and deliver such Multiclass 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.
<PAGE>
EXHIBIT A-8
CLASS G CERTIFICATE
LB COMMERCIAL CONDUIT MORTGAGE TRUST II
CLASS G MULTICLASS PASS-THROUGH CERTIFICATE,
SERIES 1996-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of multifamily mortgage loans (the "Mortgage
Loans"), such pool being formed and sold by
STRUCTURED ASSET SECURITIES CORPORATION
Initial Certificate Interest Initial Aggregate Certificate Principal
Rate: Approximately 7.886% per annum Amount of the Class G Certificates:
$13,902,087
Cut-off Date:
October 1, 1996 Initial Certificate Principal
Amount of this Class G
Closing Date: October 30, 1996 Certificate:
$-------------
First Distribution Date:
November 25, 1996 Aggregate Scheduled Principal
Balance of the Mortgage Loans
Servicer: as of the Cut-off Date:
GMAC Commercial Mortgage Corporation $397,202,489.27
Special Servicer: Trustee:
CRIIMI MAE Services Limited Partnership LaSalle National Bank
Fiscal Agent:
ABN AMRO Bank N.V.
Certificate No. G-___ PIN _________
<PAGE>
-2-
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN STRUCTURED
ASSET SECURITIES CORPORATION, GMAC COMMERCIAL MORTGAGE CORPORATION, CRIIMI MAE
SERVICES LIMITED PARTNERSHIP, LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY
OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES OR BY ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A, CLASS IO, CLASS B, CLASS C,
CLASS D, CLASS E AND CLASS F CERTIFICATES OF THE SAME SERIES TO THE EXTENT
DESCRIBED IN THE TRUST AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES LAWS OF ANY STATE.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT SUCH
REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 3.03 OF THE TRUST AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986 (THE "CODE"),
OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS CERTIFICATE ON
BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH ASSETS OF ANY SUCH
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, WILL BE REGISTERED EXCEPT
IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
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 OCTOBER 30, 1996. 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 (AS
DEFINED IN THE PROSPECTUS DATED JANUARY 29, 1996 AND THE PROSPECTUS SUPPLEMENT
DATED OCTOBER 18, 1996 RELATING TO THIS CERTIFICATE) OF 0% (THE "PREPAYMENT
ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH NO
<PAGE>
-3-
MORE THAN $_________ OF OID PER $__________ OF INITIAL CERTIFICATE PRINCIPAL
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 PRINCIPAL AMOUNT, COMPUTED UNDER THE EXACT
METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE
BASED ON THE PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE.
IF THE AGGREGATE CERTIFICATE PRINCIPAL AMOUNT OF THE CLASS A, CLASS B, CLASS C,
CLASS D, CLASS E AND CLASS F CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO,
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH IN THE TRUST AGREEMENT REFERRED TO
HEREIN. IN ADDITION, IF THE AGGREGATE CERTIFICATE PRINCIPAL AMOUNT OF THE CLASS
H AND CLASS J CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO, THE
CERTIFICATE PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY BE REDUCED BY CERTAIN
LOSSES AND EXPENSES EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE TRUST
AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
AMOUNT 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 Class G Certificate (obtained by
dividing the principal amount of this Class G Certificate (its "Certificate
Principal Amount") as of the Closing Date by the aggregate principal amount of
all the Class G Certificates (their "Aggregate Certificate Principal Amount") as
of the Closing Date) in that certain beneficial ownership interest evidenced by
all the Class G Certificates in the Trust Fund created pursuant to a Trust
Agreement, dated as of the Cut-off Date (the "Agreement"), among Structured
Asset Securities Corporation (hereinafter called the "Depositor", which term
includes any successor entity under the Agreement), GMAC Commercial Mortgage
Corporation (hereinafter called the "Servicer", which term includes any
successor entity under the Agreement), CRIIMI MAE Services Limited Partnership
(hereinafter called the "Special Servicer", which term includes any successor
entity under the Agreement), ABN AMRO Bank N.V. (hereinafter called the "Fiscal
Agent", which term includes any successor entity under the Agreement) and
LaSalle National Bank (hereinafter called the "Trustee", which term includes any
successor entity under the Agreement), a summary of certain of the pertinent
provisions of which is set forth hereafter. 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 and the other Transaction Documents,
to which agreements and documents 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 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (each, a "Distribution Date"), commencing
on the first Distribution Date specified
<PAGE>
-4-
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 to the Holders of the Class G Certificates on the
applicable Distribution Date pursuant to the Agreement. All distributions made
under the Agreement on this Class G Certificate will be made by or on behalf of
the Trustee by check mailed to the relevant Holder's address as it appears on
the Certificate Register of the Certificate Registrar or, upon written request
of any Holder made to the Trustee or the Paying Agent at least five Business
Days prior to the related Record Date (or upon standing instructions given to
the Trustee or the Paying Agent on the Closing Date or five Business Days prior
to any Record Date, which instructions may be revoked at any time thereafter
upon written notice to the Trustee or the Paying Agent five Business Days prior
to the related Record Date), by wire transfer in immediately available funds to
an account specified in the request of such Certificateholder; provided that the
final distribution in respect of any Certificate shall be made only upon
presentation and surrender of such Certificate at the Corporate Trust Office.
Wire transfers, other than to the Depository, will be made at the expense of the
Holder requesting such wire transfer by deducting a wire transfer fee from the
related distribution. If any payment required to be made on the Certificates is
to be made on a day that is not a Business Day, then such payment will be made
on the next succeeding Business Day without compensation for such delay.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein, in the Agreement and in the other Transaction
Documents. As provided in the Agreement and in the other Transaction Documents,
withdrawals from the Collection Account, the Custodial Account and, if
established, the REO Accounts 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.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Principal Amount 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 Class G Certificates are issuable in fully registered
certificated form only, without coupons, in minimum denominations specified in
the Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Class G Certificates are exchangeable for new Class G
Certificates in authorized denominations evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
This Certificate may be transferred by the Holder thereof only
upon presentation and surrender of such Certificate at the New York Presenting
Office duly endorsed or accompanied by an assignment duly executed by such
Holder or his duly authorized attorney in such form as shall be satisfactory to
the Certificate Registrar. Upon the transfer of this
<PAGE>
-5-
Certificate in accordance with the preceding sentence, the Trustee shall
execute, and the Trustee or any Authenticating Agent shall authenticate and
deliver to the transferee, one or more new Certificates of the same Class, in
authorized denominations, evidencing in the aggregate the same aggregate
Certificate Principal Amount as the Certificate being transferred.
No transfer of any Class G Certificate shall be made unless
that transfer is made pursuant to an effective registration statement under the
Securities Act or otherwise in accordance with 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. If a
transfer of any Class G Certificate is to be made without registration under the
Securities Act (other than a transfer thereof by the Depositor or any of its
affiliates), then the Certificate Registrar shall refuse to register such
transfer unless it receives either (a) a certification of the transferor
substantially in the form of Exhibit C-1 attached to the Agreement, or (b) a
certification of the transferor substantially in the form of Exhibit C-2
attached to the Agreement and a certification of the transferee substantially in
the form of Exhibit C-3 attached to the Agreement, or (c) an Opinion of Counsel,
in form and substance reasonably satisfactory to the Certificate Registrar and
the Depositor that such transfer may be made pursuant to an exemption from
registration under the Securities Act, describing the applicable exemption and
the basis therefor, and which Opinion of Counsel shall be accompanied by a
certification of the transferor and/or transferee, in form and substance
reasonably satisfactory to the Certificate Registrar, setting forth the facts
surrounding such transfer. In each case, the Certificate Registrar will be
entitled without further investigation to rely upon such Opinion of Counsel or
certification. Any Holder of a Class G Certificate desiring to effect such
transfer shall indemnify the Certificate Registrar, the Trustee, the Fiscal
Agent, the Servicer, the Special Servicer and the Depositor 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. None of the Depositor, the Trustee,
the Servicer, the Special Servicer or the Certificate Registrar is under an
obligation to register or qualify any Class G Certificate under the Securities
Act or any other securities law.
No transfer of a Class G Certificate or any interest therein
shall be made to (A) 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 (B) any Person who is directly or indirectly purchasing the Class G
Certificate or interest therein on behalf of, as named fiduciary of, as trustee
of, or with assets of a Plan, unless the prospective transferee provides the
Certificate Registrar with a certification of facts and an Opinion of Counsel
that 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 or result in the imposition of an excise tax under Section 4975 of
the Code. Each Person who acquires any Class G Certificate or interest therein
(unless it shall have delivered the certification of facts and Opinion of
Counsel referred to in the preceding sentence) shall be deemed to have certified
that it is neither a Plan nor any Person who is directly or indirectly
purchasing such Class G Certificate on behalf of, as named fiduciary of, as
trustee of, or with assets of a Plan.
<PAGE>
-6-
The Depositor, the Servicer, the Special Servicer, the Fiscal
Agent, the Trustee and the Certificate Registrar and any agent of the Depositor,
the Servicer, the Special Servicer, the Fiscal Agent, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Special Servicer, the Fiscal Agent, the Trustee, 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
and the other Transaction Documents shall terminate upon distribution (or
provision for distribution) to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be distributed to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan or REO Property
remaining in the Trust Fund, and (ii) the purchase by the Servicer or the Class
R-III Certificateholders at a price determined as provided in the Agreement of
all Mortgage Loans and each REO Property remaining in the Trust Fund. The
Agreement permits, but does not require, the Servicer or the Class R-III
Certificateholders to purchase from the Trust Fund all Mortgage Loans and each
REO Property remaining therein. The exercise of such right will effect early
retirement of the Class G Certificates; however, such right to purchase is
subject to the Aggregate Certificate Principal Amount of the Sequential Pay
Certificates at the time of purchase being not more than 5% of the Aggregate
Certificate Principal Amount of the Sequential Pay Certificates as of the
Closing Date.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and of the other Transaction Documents and the
modification of the rights and obligations of the Depositor, the Servicer, the
Special Servicer, the Fiscal Agent and the Trustee and the rights of the
Certificateholders under such agreements and documents at any time by the
parties thereto with the consent of the Holders of Certificates entitled to not
less than 66-2/3% of the Voting Rights. 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 and of the other Transaction Documents, in certain limited
circumstances, including any amendment necessary to maintain the status of each
of REMIC I, REMIC II and REMIC III as a REMIC, without the consent of the
Holders of any of the Certificates.
Unless the certificate of authentication hereon has been
executed by the Authenticating Agent, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder.
This Certificate shall be construed in accordance with the
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 Holder hereof
shall be determined in accordance with such laws.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
LASALLE NATIONAL BANK,
as Trustee
By:__________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class G Certificates referred to in the
within-mentioned Agreement.
Dated:
LASALLE NATIONAL BANK,
as Authenticating Agent
By:________________________________
Authorized Officer
<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
Multiclass PassThrough Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Multiclass PassThrough Certificate of a like Percentage Interest and Class to
the above named assignee and deliver such Multiclass 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.
<PAGE>
EXHIBIT A-9
CLASS H CERTIFICATE
LB COMMERCIAL CONDUIT MORTGAGE TRUST II
CLASS H MULTICLASS PASS-THROUGH CERTIFICATE,
SERIES 1996-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of multifamily mortgage loans (the "Mortgage
Loans"), such pool being formed and sold by
STRUCTURED ASSET SECURITIES CORPORATION
Initial Certificate Interest Initial Aggregate Certificate Principal
Rate: Approximately 7.886% per annum Amount of the Class H Certificates:
$5,958,037
Cut-off Date:
October 1, 1996 Initial Certificate Principal
Amount of this Class H
Closing Date: October 30, 1996 Certificate:
$-------------
First Distribution Date:
November 25, 1996 Aggregate Scheduled Principal
Balance of the Mortgage Loans
Servicer: as of the Cut-off Date:
GMAC Commercial Mortgage Corporation $397,202,489.27
Special Servicer: Trustee:
CRIIMI MAE Services Limited Partnership LaSalle National Bank
Fiscal Agent:
ABN AMRO Bank N.V.
Certificate No. G-___ PIN _________
<PAGE>
-2-
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN STRUCTURED
ASSET SECURITIES CORPORATION, GMAC COMMERCIAL MORTGAGE CORPORATION, CRIIMI MAE
SERVICES LIMITED PARTNERSHIP, LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY
OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES OR BY ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A, CLASS IO, CLASS B, CLASS C,
CLASS D, CLASS E, CLASS F AND CLASS G CERTIFICATES OF THE SAME SERIES TO THE
EXTENT DESCRIBED IN THE TRUST AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES LAWS OF ANY STATE.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT SUCH
REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 3.03 OF THE TRUST AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986 (THE "CODE"),
OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS CERTIFICATE ON
BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH ASSETS OF ANY SUCH
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, WILL BE REGISTERED EXCEPT
IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
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 OCTOBER 30, 1996. 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 (AS
DEFINED IN THE PROSPECTUS DATED JANUARY 29, 1996 AND THE PROSPECTUS SUPPLEMENT
DATED OCTOBER 18, 1996 RELATING TO THIS CERTIFICATE) OF 0% (THE "PREPAYMENT
ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH NO
<PAGE>
-3-
MORE THAN $_________ OF OID PER $__________ OF INITIAL CERTIFICATE PRINCIPAL
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 PRINCIPAL AMOUNT, COMPUTED UNDER THE EXACT
METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE
BASED ON THE PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE.
IF THE AGGREGATE CERTIFICATE PRINCIPAL AMOUNT OF THE CLASS A, CLASS B, CLASS C,
CLASS D, CLASS E, CLASS F AND CLASS G CERTIFICATES OF THE SAME SERIES IS REDUCED
TO ZERO, DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH IN THE TRUST AGREEMENT REFERRED TO
HEREIN. IN ADDITION, IF THE AGGREGATE CERTIFICATE PRINCIPAL AMOUNT OF THE CLASS
J CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO, THE CERTIFICATE PRINCIPAL
AMOUNT OF THIS CERTIFICATE MAY BE REDUCED BY CERTAIN LOSSES AND EXPENSES
EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE TRUST AGREEMENT REFERRED TO
HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL AMOUNT 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 Class H Certificate (obtained by
dividing the principal amount of this Class H Certificate (its "Certificate
Principal Amount") as of the Closing Date by the aggregate principal amount of
all the Class H Certificates (their "Aggregate Certificate Principal Amount") as
of the Closing Date) in that certain beneficial ownership interest evidenced by
all the Class H Certificates in the Trust Fund created pursuant to a Trust
Agreement, dated as of the Cut-off Date (the "Agreement"), among Structured
Asset Securities Corporation (hereinafter called the "Depositor", which term
includes any successor entity under the Agreement), GMAC Commercial Mortgage
Corporation (hereinafter called the "Servicer", which term includes any
successor entity under the Agreement), CRIIMI MAE Services Limited Partnership
(hereinafter called the "Special Servicer", which term includes any successor
entity under the Agreement), ABN AMRO Bank N.V. (hereinafter called the "Fiscal
Agent", which term includes any successor entity under the Agreement) and
LaSalle National Bank (hereinafter called the "Trustee", which term includes any
successor entity under the Agreement), a summary of certain of the pertinent
provisions of which is set forth hereafter. 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 and the other Transaction Documents,
to which agreements and documents 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 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (each, a "Distribution Date"), commencing
on the first Distribution Date specified
<PAGE>
-4-
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 to the Holders of the Class H Certificates on the
applicable Distribution Date pursuant to the Agreement. All distributions made
under the Agreement on this Class H Certificate will be made by or on behalf of
the Trustee by check mailed to the relevant Holder's address as it appears on
the Certificate Register of the Certificate Registrar or, upon written request
of any Holder made to the Trustee or the Paying Agent at least five Business
Days prior to the related Record Date (or upon standing instructions given to
the Trustee or the Paying Agent on the Closing Date or five Business Days prior
to any Record Date, which instructions may be revoked at any time thereafter
upon written notice to the Trustee or the Paying Agent five Business Days prior
to the related Record Date), by wire transfer in immediately available funds to
an account specified in the request of such Certificateholder; provided that the
final distribution in respect of any Certificate shall be made only upon
presentation and surrender of such Certificate at the Corporate Trust Office.
Wire transfers, other than to the Depository, will be made at the expense of the
Holder requesting such wire transfer by deducting a wire transfer fee from the
related distribution. If any payment required to be made on the Certificates is
to be made on a day that is not a Business Day, then such payment will be made
on the next succeeding Business Day without compensation for such delay.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein, in the Agreement and in the other Transaction
Documents. As provided in the Agreement and in the other Transaction Documents,
withdrawals from the Collection Account, the Custodial Account and, if
established, the REO Accounts 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.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Principal Amount 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 Class H Certificates are issuable in fully registered
certificated form only, without coupons, in minimum denominations specified in
the Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Class H Certificates are exchangeable for new Class H
Certificates in authorized denominations evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
This Certificate may be transferred by the Holder thereof only
upon presentation and surrender of such Certificate at the New York Presenting
Office duly endorsed or accompanied by an assignment duly executed by such
Holder or his duly authorized attorney in such form as shall be satisfactory to
the Certificate Registrar. Upon the transfer of this
<PAGE>
-5-
Certificate in accordance with the preceding sentence, the Trustee shall
execute, and the Trustee or any Authenticating Agent shall authenticate and
deliver to the transferee, one or more new Certificates of the same Class, in
authorized denominations, evidencing in the aggregate the same aggregate
Certificate Principal Amount as the Certificate being transferred.
No transfer of any Class H Certificate shall be made unless
that transfer is made pursuant to an effective registration statement under the
Securities Act or otherwise in accordance with 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. If a
transfer of any Class H Certificate is to be made without registration under the
Securities Act (other than a transfer thereof by the Depositor or any of its
affiliates), then the Certificate Registrar shall refuse to register such
transfer unless it receives either (a) a certification of the transferor
substantially in the form of Exhibit C-1 attached to the Agreement, or (b) a
certification of the transferor substantially in the form of Exhibit C-2
attached to the Agreement and a certification of the transferee substantially in
the form of Exhibit C-3 attached to the Agreement, or (c) an Opinion of Counsel,
in form and substance reasonably satisfactory to the Certificate Registrar and
the Depositor that such transfer may be made pursuant to an exemption from
registration under the Securities Act, describing the applicable exemption and
the basis therefor, and which Opinion of Counsel shall be accompanied by a
certification of the transferor and/or transferee, in form and substance
reasonably satisfactory to the Certificate Registrar, setting forth the facts
surrounding such transfer. In each case, the Certificate Registrar will be
entitled without further investigation to rely upon such Opinion of Counsel or
certification. Any Holder of a Class H Certificate desiring to effect such
transfer shall indemnify the Certificate Registrar, the Trustee, the Fiscal
Agent, the Servicer, the Special Servicer and the Depositor 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. None of the Depositor, the Trustee,
the Servicer, the Special Servicer or the Certificate Registrar is under an
obligation to register or qualify any Class H Certificate under the Securities
Act or any other securities law.
No transfer of a Class H Certificate or any interest therein
shall be made to (A) 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 (B) any Person who is directly or indirectly purchasing the Class H
Certificate or interest therein on behalf of, as named fiduciary of, as trustee
of, or with assets of a Plan, unless the prospective transferee provides the
Certificate Registrar with a certification of facts and an Opinion of Counsel
that 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 or result in the imposition of an excise tax under Section 4975 of
the Code. Each Person who acquires any Class H Certificate or interest therein
(unless it shall have delivered the certification of facts and Opinion of
Counsel referred to in the preceding sentence) shall be deemed to have certified
that it is neither a Plan nor any Person who is directly or indirectly
purchasing such Class H Certificate on behalf of, as named fiduciary of, as
trustee of, or with assets of a Plan.
<PAGE>
-6-
The Depositor, the Servicer, the Special Servicer, the Fiscal
Agent, the Trustee and the Certificate Registrar and any agent of the Depositor,
the Servicer, the Special Servicer, the Fiscal Agent, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Special Servicer, the Fiscal Agent, the Trustee, 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
and the other Transaction Documents shall terminate upon distribution (or
provision for distribution) to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be distributed to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan or REO Property
remaining in the Trust Fund, and (ii) the purchase by the Servicer or the Class
R-III Certificateholders at a price determined as provided in the Agreement of
all Mortgage Loans and each REO Property remaining in the Trust Fund. The
Agreement permits, but does not require, the Servicer or the Class R-III
Certificateholders to purchase from the Trust Fund all Mortgage Loans and each
REO Property remaining therein. The exercise of such right will effect early
retirement of the Class H Certificates; however, such right to purchase is
subject to the Aggregate Certificate Principal Amount of the Sequential Pay
Certificates at the time of purchase being not more than 5% of the Aggregate
Certificate Principal Amount of the Sequential Pay Certificates as of the
Closing Date.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and of the other Transaction Documents and the
modification of the rights and obligations of the Depositor, the Servicer, the
Special Servicer, the Fiscal Agent and the Trustee and the rights of the
Certificateholders under such agreements and documents at any time by the
parties thereto with the consent of the Holders of Certificates entitled to not
less than 66-2/3% of the Voting Rights. 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 and of the other Transaction Documents, in certain limited
circumstances, including any amendment necessary to maintain the status of each
of REMIC I, REMIC II and REMIC III as a REMIC, without the consent of the
Holders of any of the Certificates.
Unless the certificate of authentication hereon has been
executed by the Authenticating Agent, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder.
This Certificate shall be construed in accordance with the
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 Holder hereof
shall be determined in accordance with such laws.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
LASALLE NATIONAL BANK,
as Trustee
By:__________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class H Certificates referred to in the
within-mentioned Agreement.
Dated:
LASALLE NATIONAL BANK,
as Authenticating Agent
By:________________________________
Authorized Officer
<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
Multiclass PassThrough Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Multiclass PassThrough Certificate of a like Percentage Interest and Class to
the above named assignee and deliver such Multiclass 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.
<PAGE>
EXHIBIT A-10
CLASS J CERTIFICATE
LB COMMERCIAL CONDUIT MORTGAGE TRUST II
CLASS J MULTICLASS PASS-THROUGH CERTIFICATE,
SERIES 1996-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of multifamily mortgage loans (the "Mortgage
Loans"), such pool being formed and sold by
STRUCTURED ASSET SECURITIES CORPORATION
Initial Certificate Interest Initial Aggregate Certificate Principal
Rate: Approximately 7.886% per annum Amount of the Class J Certificates:
$9,930,062
Cut-off Date:
October 1, 1996 Initial Certificate Principal
Amount of this Class J
Closing Date: October 30, 1996 Certificate:
$-------------
First Distribution Date:
November 25, 1996 Aggregate Scheduled Principal
Balance of the Mortgage Loans
Servicer: as of the Cut-off Date:
GMAC Commercial Mortgage Corporation $397,202,489.27
Special Servicer: Trustee:
CRIIMI MAE Services Limited Partnership LaSalle National Bank
Fiscal Agent:
ABN AMRO Bank N.V.
Certificate No. J-___ PIN _________
<PAGE>
-2-
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN STRUCTURED
ASSET SECURITIES CORPORATION, GMAC COMMERCIAL MORTGAGE CORPORATION, CRIIMI MAE
SERVICES LIMITED PARTNERSHIP, LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY
OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES OR BY ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A, CLASS IO, CLASS B, CLASS C,
CLASS D, CLASS E, CLASS F, CLASS G AND CLASS H CERTIFICATES OF THE SAME SERIES
TO THE EXTENT DESCRIBED IN THE TRUST AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES LAWS OF ANY STATE.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT SUCH
REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 3.03 OF THE TRUST AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986 (THE "CODE"),
OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS CERTIFICATE ON
BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH ASSETS OF ANY SUCH
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, WILL BE REGISTERED EXCEPT
IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
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 OCTOBER 30, 1996. 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 (AS
DEFINED IN THE PROSPECTUS DATED JANUARY 29, 1996 AND THE PROSPECTUS SUPPLEMENT
DATED OCTOBER 18, 1996 RELATING TO THIS CERTIFICATE) OF 0% (THE "PREPAYMENT
ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH NO
<PAGE>
-3-
MORE THAN $_________ OF OID PER $__________ OF INITIAL CERTIFICATE PRINCIPAL
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 PRINCIPAL AMOUNT, COMPUTED UNDER THE EXACT
METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE
BASED ON THE PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE.
IF THE AGGREGATE CERTIFICATE PRINCIPAL AMOUNT OF THE CLASS A, CLASS B, CLASS C,
CLASS D, CLASS E, CLASS F, CLASS G AND CLASS H CERTIFICATES OF THE SAME SERIES
IS REDUCED TO ZERO, DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
AMOUNT OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH IN THE TRUST
AGREEMENT REFERRED TO HEREIN. IN ADDITION, THE CERTIFICATE PRINCIPAL AMOUNT OF
THIS CERTIFICATE MAY BE REDUCED BY CERTAIN LOSSES AND EXPENSES EXPERIENCED BY
THE TRUST FUND AS SET FORTH IN THE TRUST AGREEMENT REFERRED TO HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL AMOUNT 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 Class J Certificate (obtained by
dividing the principal amount of this Class J Certificate (its "Certificate
Principal Amount") as of the Closing Date by the aggregate principal amount of
all the Class J Certificates (their "Aggregate Certificate Principal Amount") as
of the Closing Date) in that certain beneficial ownership interest evidenced by
all the Class J Certificates in the Trust Fund created pursuant to a Trust
Agreement, dated as of the Cut-off Date (the "Agreement"), among Structured
Asset Securities Corporation (hereinafter called the "Depositor", which term
includes any successor entity under the Agreement), GMAC Commercial Mortgage
Corporation (hereinafter called the "Servicer", which term includes any
successor entity under the Agreement), CRIIMI MAE Services Limited Partnership
(hereinafter called the "Special Servicer", which term includes any successor
entity under the Agreement), ABN AMRO Bank N.V. (hereinafter called the "Fiscal
Agent", which term includes any successor entity under the Agreement) and
LaSalle National Bank (hereinafter called the "Trustee", which term includes any
successor entity under the Agreement), a summary of certain of the pertinent
provisions of which is set forth hereafter. 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 and the other Transaction Documents,
to which agreements and documents 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 25th day of each month or, if such 25th 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
<PAGE>
-4-
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 to the Holders of the Class J Certificates on the applicable
Distribution Date pursuant to the Agreement. All distributions made under the
Agreement on this Class J Certificate will be made by or on behalf of the
Trustee by check mailed to the relevant Holder's address as it appears on the
Certificate Register of the Certificate Registrar or, upon written request of
any Holder made to the Trustee or the Paying Agent at least five Business Days
prior to the related Record Date (or upon standing instructions given to the
Trustee or the Paying Agent on the Closing Date or five Business Days prior to
any Record Date, which instructions may be revoked at any time thereafter upon
written notice to the Trustee or the Paying Agent five Business Days prior to
the related Record Date), by wire transfer in immediately available funds to an
account specified in the request of such Certificateholder; provided that the
final distribution in respect of any Certificate shall be made only upon
presentation and surrender of such Certificate at the Corporate Trust Office.
Wire transfers, other than to the Depository, will be made at the expense of the
Holder requesting such wire transfer by deducting a wire transfer fee from the
related distribution. If any payment required to be made on the Certificates is
to be made on a day that is not a Business Day, then such payment will be made
on the next succeeding Business Day without compensation for such delay.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein, in the Agreement and in the other Transaction
Documents. As provided in the Agreement and in the other Transaction Documents,
withdrawals from the Collection Account, the Custodial Account and, if
established, the REO Accounts 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.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Principal Amount 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 Class J Certificates are issuable in fully registered
certificated form only, without coupons, in minimum denominations specified in
the Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Class J Certificates are exchangeable for new Class J
Certificates in authorized denominations evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
This Certificate may be transferred by the Holder thereof only
upon presentation and surrender of such Certificate at the New York Presenting
Office duly endorsed or accompanied by an assignment duly executed by such
Holder or his duly authorized attorney in such form as shall be satisfactory to
the Certificate Registrar. Upon the transfer of this Certificate in accordance
with the preceding sentence, the Trustee shall execute, and the Trustee
<PAGE>
-5-
or any Authenticating Agent shall authenticate and deliver to the transferee,
one or more new Certificates of the same Class, in authorized denominations,
evidencing in the aggregate the same aggregate Certificate Principal Amount as
the Certificate being transferred.
No transfer of any Class J Certificate shall be made unless
that transfer is made pursuant to an effective registration statement under the
Securities Act or otherwise in accordance with 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. If a
transfer of any Class J Certificate is to be made without registration under the
Securities Act (other than in connection with the initial issuance thereof or
the initial transfer thereof by the Depositor or any of its affiliates), (i) in
the event that the transfer is to be made in reliance upon Rule 144A of the
Securities Act, then the Certificate Registrar shall refuse to register such
transfer unless it receives (a) a certification of the transferor substantially
in the form of Exhibit C-1 attached to the Agreement or (b) a certification of
the transferor substantially in the form of Exhibit C-2 attached to the
Agreement and a certification of the transferee substantially in the form of
Exhibit C-3 attached to the Agreement, and (ii) otherwise (a) the Certificate
Registrar shall require an Opinion of Counsel reasonably satisfactory to the
Certificate Registrar and the Depositor that such transfer may be made pursuant
to an exemption from registration under the Securities Act, describing the
applicable exemption and the basis therefor, and (b) the Certificate Registrar
shall require the transferor and/or the transferee to execute a certification
acceptable to and in form and substance satisfactory to the Certificate
Registrar setting forth the facts surrounding such transfer. In each case, the
Certificate Registrar will be entitled without further investigation to rely
upon such Opinion of Counsel or certification. Any Holder of a Class J
Certificate desiring to effect such transfer shall indemnify the Certificate
Registrar, the Trustee, the Fiscal Agent, the Servicer, the Special Servicer and
the Depositor 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. None of
the Depositor, the Trustee, the Servicer, the Special Servicer or the
Certificate Registrar is under an obligation to register or qualify any Class J
Certificate under the Securities Act or any other securities law.
No transfer of a Class J Certificate or any interest therein
shall be made to (A) 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 (B) any Person who is directly or indirectly purchasing the Class J
Certificate or interest therein on behalf of, as named fiduciary of, as trustee
of, or with assets of a Plan, unless the prospective transferee provides the
Certificate Registrar with a certification of facts and an Opinion of Counsel
that 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 or result in the imposition of an excise tax under Section 4975 of
the Code. Each Person who acquires any Class J Certificate or interest therein
(unless it shall have delivered the certification of facts and Opinion of
Counsel referred to in the preceding sentence) shall be deemed to have certified
that it is neither a Plan nor any Person who is directly or indirectly
purchasing such Class J Certificate on behalf of, as named fiduciary of, as
trustee of, or with assets of a Plan.
<PAGE>
-6-
The Depositor, the Servicer, the Special Servicer, the Fiscal
Agent, the Trustee and the Certificate Registrar and any agent of the Depositor,
the Servicer, the Special Servicer, the Fiscal Agent, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Special Servicer, the Fiscal Agent, the Trustee, 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
and the other Transaction Documents shall terminate upon distribution (or
provision for distribution) to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be distributed to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan or REO Property
remaining in the Trust Fund, and (ii) the purchase by the Servicer or the Class
R-III Certificateholders at a price determined as provided in the Agreement of
all Mortgage Loans and each REO Property remaining in the Trust Fund. The
Agreement permits, but does not require, the Servicer or the Class R-III
Certificateholders to purchase from the Trust Fund all Mortgage Loans and each
REO Property remaining therein. The exercise of such right will effect early
retirement of the Class J Certificates; however, such right to purchase is
subject to the Aggregate Certificate Principal Amount of the Sequential Pay
Certificates at the time of purchase being not more than 5% of the Aggregate
Certificate Principal Amount of the Sequential Pay Certificates as of the
Closing Date.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and of the other Transaction Documents and the
modification of the rights and obligations of the Depositor, the Servicer, the
Special Servicer, the Fiscal Agent and the Trustee and the rights of the
Certificateholders under such agreements and documents at any time by the
parties thereto with the consent of the Holders of Certificates entitled to not
less than 66-2/3% of the Voting Rights. 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 and of the other Transaction Documents, in certain limited
circumstances, including any amendment necessary to maintain the status of each
of REMIC I, REMIC II and REMIC III as a REMIC, without the consent of the
Holders of any of the Certificates.
Unless the certificate of authentication hereon has been
executed by the Authenticating Agent, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder.
This Certificate shall be construed in accordance with the
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 Holder hereof
shall be determined in accordance with such laws.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
LASALLE NATIONAL BANK,
as Trustee
By:__________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class J Certificates referred to in the
within-mentioned Agreement.
Dated:
LASALLE NATIONAL BANK,
as Authenticating Agent
By:________________________________
Authorized Officer
<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
Multiclass PassThrough Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Multiclass PassThrough Certificate of a like Percentage Interest and Class to
the above named assignee and deliver such Multiclass 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.
<PAGE>
CLASS R-I CERTIFICATE
LB COMMERCIAL CONDUIT MORTGAGE TRUST II
CLASS R-I MULTICLASS PASS-THROUGH CERTIFICATE,
SERIES 1996-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of multifamily and commercial mortgage loans (the
"Mortgage Loans"), such pool being formed and sold by
STRUCTURED ASSET SECURITIES CORPORATION
Cut-off Date: Percentage Interest Represented
October 1, 1996 by this Class R-I Certificate: 100%
Closing Date: Aggregate Scheduled Principal Balance of the
October 30, 1996 Mortgage Loans as of the Cut-off Date:
$397,202,498.27
First Distribution Date:
November 25, 1996 Trustee: LaSalle National Bank
Servicer: GMAC Commercial Special Servicer:
Mortgage Corporation CRIIMI MAE Services Limited Partnership
Certificate No. R-I-1 Fiscal Agent:
ABN AMRO Bank N.V.
<PAGE>
-2-
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN STRUCTURED
ASSET SECURITIES CORPORATION, GMAC COMMERCIAL MORTGAGE CORPORATION, CRIIMI MAE
SERVICES LIMITED PARTNERSHIP, LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY
OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES OR BY ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A, CLASS IO, CLASS B, CLASS C,
CLASS D, CLASS E, CLASS F, CLASS G, CLASS H AND CLASS J CERTIFICATES OF THE SAME
SERIES TO THE EXTENT DESCRIBED IN THE TRUST AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES LAWS OF ANY STATE.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT SUCH
REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 3.03 OF THE TRUST AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986 (THE "CODE") OR
TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS CERTIFICATE ON
BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH ASSETS OF ANY SUCH
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WILL BE REGISTERED EXCEPT
IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
CONSEQUENTLY, TRANSFER OF THIS CERTIFICATE IS ALSO SUBJECT TO THE ADDITIONAL TAX
RELATED TRANSFER RESTRICTIONS DESCRIBED HEREIN.
This certifies that _____________ is the registered owner of
the Percentage Interest evidenced by this Class R-I Certificate and specified
above in that certain beneficial ownership interest evidenced by all the Class
R-I Certificates in the Trust Fund created pursuant to a Trust Agreement, dated
as of the Cut-off Date (the "Agreement"), among Structured Asset Securities
Corporation (hereinafter called the "Depositor", which term includes any
successor entity under the Agreement), GMAC Commercial Mortgage Corporation
(hereinafter called the "Servicer", which term includes any successor entity
under the Agreement), CRIIMI MAE Services Limited Partnership (hereinafter
called the "Special Servicer", which term includes any
<PAGE>
-3-
successor entity under the Agreement), ABN AMRO Bank N.V. (hereinafter called
the "Fiscal Agent", which term includes any successor entity under the
Agreement) and LaSalle National Bank (hereinafter called the "Trustee", which
term includes any successor entity under the Agreement), a summary of certain of
the pertinent provisions of which is set forth hereafter. 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 and the other Transaction
Documents, to which agreements and documents 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 25th day of each month or, if such 25th 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, if any, required to be distributed to the
Holders of the Class R-I Certificates on the applicable Distribution Date
pursuant to the Agreement. All distributions made under the Agreement on this
Class R-I Certificate will be made by check mailed to the address of the Person
entitled thereto, as such name and address appear in the Certificate Register.
Notwithstanding the foregoing, the final distribution on this Certificate will
be made in like manner, but only upon presentation and surrender of this
Certificate at the offices of the Certificate Registrar or such other location
specified in the notice to Certificateholders of such final distribution.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein, in the Agreement and in the other Transaction
Documents. As provided in the Agreement and in the other Transaction Documents,
withdrawals from the Collection Account, the Custodial Account and, if
established, the REO Accounts 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 Class R-I Certificates are issuable in fully registered
certificated form only, without coupons, in minimum denominations representing
Percentage Interests specified in the Agreement. As provided in the Agreement
and subject to certain limitations therein set forth, Class R-I Certificates are
exchangeable for new Class R-I Certificates in authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
This Certificate may be transferred by the Holder thereof only
upon presentation and surrender of such Certificate at the New York Presenting
Office duly endorsed or accompanied by an assignment duly executed by such
Holder or his duly authorized attorney in such form as shall be satisfactory to
the Certificate Registrar. Upon the transfer of this
<PAGE>
-4-
Certificate in accordance with the preceding sentence, the Trustee shall
execute, and the Trustee or any Authenticating Agent shall authenticate and
deliver to the transferee, one or more new Certificates of the same Class, in
authorized denominations, evidencing in the aggregate the same aggregate
Certificate Principal Amount as the Certificate being transferred.
No transfer of any Class R-I Certificate shall be made unless
that transfer is made pursuant to an effective registration statement under the
Securities Act or otherwise in accordance with 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. If a
transfer of any Class R-I Certificate is to be made without registration under
the Securities Act (other than a transfer thereof by the Depositor or any of its
affiliates), then the Certificate Registrar shall refuse to register such
transfer unless it receives either (a) a certification of the transferor
substantially in the form of Exhibit C-1 attached to the Agreement, or (b) a
certification of the transferor substantially in the form of Exhibit C-2
attached to the Agreement and a certification of the transferee substantially in
the form of Exhibit C-3 attached to the Agreement, or (c) an Opinion of Counsel,
in form and substance reasonably satisfactory to the Certificate Registrar and
the Depositor that such transfer may be made pursuant to an exemption from
registration under the Securities Act, describing the applicable exemption and
the basis therefor, and which Opinion of Counsel shall be accompanied by a
certification of the transferor and/or transferee, in form and substance
reasonably satisfactory to the Certificate Registrar, setting forth the facts
surrounding such transfer. In each case, the Certificate Registrar will be
entitled without further investigation to rely upon such Opinion of Counsel or
certification. Any Holder of a Class R-I Certificate desiring to effect such
transfer shall indemnify the Certificate Registrar, the Trustee, the Fiscal
Agent, the Servicer, the Special Servicer and the Depositor 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. None of the Depositor, the Trustee,
the Fiscal Agent, the Servicer, the Special Servicer, or the Certificate
Registrar is under an obligation to register or qualify any Class R-I
Certificate under the Securities Act or any other securities law.
No transfer of a Class R-I Certificate or any interest therein
shall be made to (A) 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 (B) any Person who is directly or indirectly purchasing the Class R-I
Certificate or interest therein on behalf of, as named fiduciary of, as trustee
of, or with assets of a Plan, unless the prospective transferee provides the
Certificate Registrar with a certification of facts and an Opinion of Counsel
that 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 or result in the imposition of an excise tax under Section 4975 of
the Code. Each Person who acquires any Class R-I Certificate or interest therein
(unless it shall have delivered the certification of facts and Opinion of
Counsel referred to in the preceding sentence) shall be deemed to have certified
that it is neither a Plan nor any Person who is directly or indirectly
purchasing such Class R-I Certificate on behalf of, as named fiduciary of, as
trustee of, or with assets of a Plan.
<PAGE>
-5-
In addition to the foregoing and notwithstanding anything to
the contrary contained herein or in the Agreement, no Class R-I Certificate may
be owned, pledged or transferred, directly or indirectly, by or to a
Disqualified Organization or a non-U.S. Person.
Prior to and as a condition of the registration of any
transfer, sale or other disposition of a Class R-I Certificate, the proposed
transferee, including the initial Class R-I Certificateholder, shall deliver to
the Certificate Registrar an affidavit in substantially the form attached to the
Agreement as Exhibit D representing and warranting, among other things, that
such transferee is a U.S. Person and is neither a Disqualified Organization nor
an agent or nominee acting on behalf of a Disqualified Organization (any such
transferee, a "Permitted Transferee"), and that no purpose of the acquisition of
the Class R-I Certificate is to impede the assessment or collection of tax. In
addition, the Certificate Registrar may (but shall have no obligation to and
shall not in the case of a transfer by the Depositor or any Affiliate thereof)
require, prior to and as a condition of any such transfer, the delivery by the
proposed transferee of an Opinion of Counsel, satisfactory in form and substance
to the Certificate Registrar, that such proposed transferee or, if the proposed
transferee is an agent or nominee, the proposed beneficial owner, is a Permitted
Transferee and a U.S. Person, which Opinion of Counsel shall not be an expense
of the Depositor, the Servicer, the Special Servicer, the Certificate Registrar
or the Trustee. Each Holder of this Class R-I Certificate, by its acceptance
hereof, shall be deemed for all purposes to have consented to the foregoing
provisions of this paragraph.
The Depositor, the Servicer, the Special Servicer, the Fiscal
Agent, the Trustee and the Certificate Registrar and any agent of the Depositor,
the Servicer, the Special Servicer, the Fiscal Agent, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Special Servicer, the Fiscal Agent, the Trustee, 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
and the other Transaction Documents shall terminate upon distribution (or
provision for distribution) to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be distributed to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan or REO Property
remaining in the Trust Fund, and (ii) the purchase by the Servicer or the Class
R-III Certificateholders at a price determined as provided in the Agreement of
all Mortgage Loans and each REO Property remaining in the Trust Fund. The
Agreement permits, but does not require, the Servicer or the Class R-III
Certificateholders to purchase from the Trust Fund all Mortgage Loans and each
REO Property remaining therein. The exercise of such right will effect early
retirement of the Class R-I Certificates; however, such right to purchase is
subject to the Aggregate Certificate Principal Amount of the Sequential Pay
Certificates at the time of purchase being not more than 5% of the Aggregate
Certificate Principal Amount of the Sequential Pay Certificates as of the
Closing Date.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and of the other Transaction Documents and the
modification of the rights and
<PAGE>
-6-
obligations of the Depositor, the Servicer, the Special Servicer, the Fiscal
Agent and the Trustee and the rights of the Certificateholders under such
agreements and documents at any time by the parties thereto with the consent of
the Holders of Certificates entitled to not less than 66-2/3% of the Voting
Rights. 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 and of the other
Transaction Documents, in certain limited circumstances, including any amendment
necessary to maintain the status of each of REMIC I, REMIC II and REMIC III as a
REMIC, without the consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been
executed by the Authenticating Agent, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder.
This Certificate shall be construed in accordance with the
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 Holder hereof
shall be determined in accordance with such laws.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
LASALLE NATIONAL BANK,
as Trustee
By:__________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-I Certificates referred to in the
within-mentioned Agreement.
Dated:
LASALLE NATIONAL BANK,
as Authenticating Agent
By:________________________________
Authorized Officer
<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
Multiclass PassThrough Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Multiclass PassThrough Certificate of a like Percentage Interest and Class to
the above named assignee and deliver such Multiclass 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.
<PAGE>
CLASS R-II CERTIFICATE
LB COMMERCIAL CONDUIT MORTGAGE TRUST II
CLASS R-II MULTICLASS PASS-THROUGH CERTIFICATE,
SERIES 1996-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of multifamily and commercial mortgage loans (the
"Mortgage Loans"), such pool being formed and sold by
STRUCTURED ASSET SECURITIES CORPORATION
Cut-off Date: Percentage Interest Represented
October 1, 1996 by this Class R-II Certificate: 100%
Closing Date: Aggregate Scheduled Principal Balance
October 30, 1996 of the Mortgage Loans as of the Cut-off
Date: $ 397,202,498.27
First Distribution Date:
November 25, 1996 Trustee: LaSalle National Bank
Servicer: GMAC Commercial Special Servicer:
Mortgage Corporation CRIIMI MAE Services Limited
Partnership
Certificate No. R-II-1 Fiscal Agent:
ABN AMRO Bank N.V.
<PAGE>
-2-
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN STRUCTURED
ASSET SECURITIES CORPORATION, GMAC COMMERCIAL MORTGAGE CORPORATION, CRIIMI MAE
SERVICES LIMITED PARTNERSHIP, LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY
OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES OR BY ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A, CLASS IO, CLASS B, CLASS C,
CLASS D, CLASS E, CLASS F, CLASS G, CLASS H AND CLASS J CERTIFICATES OF THE SAME
SERIES TO THE EXTENT DESCRIBED IN THE TRUST AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES LAWS OF ANY STATE.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT SUCH
REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 3.03 OF THE TRUST AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986 (THE "CODE") OR
TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS CERTIFICATE ON
BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH ASSETS OF ANY SUCH
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WILL BE REGISTERED EXCEPT
IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
CONSEQUENTLY, TRANSFER OF THIS CERTIFICATE IS ALSO SUBJECT TO THE ADDITIONAL TAX
RELATED TRANSFER RESTRICTIONS DESCRIBED HEREIN.
This certifies that _____________ is the registered owner of
the Percentage Interest evidenced by this Class R-II Certificate and specified
above in that certain beneficial ownership interest evidenced by all the Class
R-II Certificates in the Trust Fund created pursuant to a Trust Agreement, dated
as of the Cut-off Date (the "Agreement"), among Structured Asset Securities
Corporation (hereinafter called the "Depositor", which term includes any
successor entity under the Agreement), GMAC Commercial Mortgage Corporation
(hereinafter called the "Servicer", which term includes any successor entity
under the Agreement), CRIIMI MAE
<PAGE>
-3-
Services Limited Partnership (hereinafter called the "Special Servicer", which
term includes any successor entity under the Agreement), ABN AMRO Bank N.V.
(hereinafter called the "Fiscal Agent", which term includes any successor entity
under the Agreement) and LaSalle National Bank (hereinafter called the
"Trustee", which term includes any successor entity under the Agreement), a
summary of certain of the pertinent provisions of which is set forth hereafter.
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 and the
other Transaction Documents, to which agreements and documents 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 25th day of each month or, if such 25th 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, if any, required to be distributed to the
Holders of the Class R-II Certificates on the applicable Distribution Date
pursuant to the Agreement. All distributions made under the Agreement on this
Class R-II Certificate will be made by check mailed to the address of the Person
entitled thereto, as such name and address appear in the Certificate Register.
Notwithstanding the foregoing, the final distribution on this Certificate will
be made in like manner, but only upon presentation and surrender of this
Certificate at the offices of the Certificate Registrar or such other location
specified in the notice to Certificateholders of such final distribution.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein, in the Agreement and in the other Transaction
Documents. As provided in the Agreement and in the other Transaction Documents,
withdrawals from the Collection Account, the Custodial Account and, if
established, the REO Accounts 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 Class R-II Certificates are issuable in fully registered
certificated form only, without coupons, in minimum denominations representing
Percentage Interests specified in the Agreement. As provided in the Agreement
and subject to certain limitations therein set forth, Class R-II Certificates
are exchangeable for new Class R-II Certificates in authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
This Certificate may be transferred by the Holder thereof only
upon presentation and surrender of such Certificate at the New York Presenting
Office duly endorsed or accompanied by an assignment duly executed by such
Holder or his duly authorized attorney in
<PAGE>
-4-
such form as shall be satisfactory to the Certificate Registrar. Upon the
transfer of this Certificate in accordance with the preceding sentence, the
Trustee shall execute, and the Trustee or any Authenticating Agent shall
authenticate and deliver to the transferee, one or more new Certificates of the
same Class, in authorized denominations, evidencing in the aggregate the same
aggregate Certificate Principal Amount as the Certificate being transferred.
No transfer of any Class R-II Certificate shall be made unless
that transfer is made pursuant to an effective registration statement under the
Securities Act or otherwise in accordance with 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. If a
transfer of any Class R-II Certificate is to be made without registration under
the Securities Act (other than transfer thereof by the Depositor or any of its
affiliates), then the Certificate Registrar shall refuse to register such
transfer unless it receives either (a) a certification of the transferor
substantially in the form of Exhibit C-1 attached to the Agreement, or (b) a
certification of the transferor substantially in the form of Exhibit C-2
attached to the Agreement and a certification of the transferee substantially in
the form of Exhibit C-3 attached to the Agreement, or (c) an Opinion of Counsel,
in form and substance reasonably satisfactory to the Certificate Registrar and
the Depositor that such transfer may be made pursuant to an exemption from
registration under the Securities Act, describing the applicable exemption and
the basis therefor, and which Opinion of Counsel shall be accompanied by a
certification of the transferor and/or transferee, in form and substance
reasonably satisfactory to the Certificate Registrar, setting forth the facts
surrounding such transfer. In each case, the Certificate Registrar will be
entitled without further investigation to rely upon such Opinion of Counsel or
certification. Any Holder of a Class R-II Certificate desiring to effect such
transfer shall indemnify the Certificate Registrar, the Trustee, the Fiscal
Agent, the Servicer, the Special Servicer and the Depositor 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. None of the Depositor, the Trustee,
the Fiscal Agent, the Servicer, the Special Servicer, or the Certificate
Registrar is under an obligation to register or qualify any Class R-II
Certificate under the Securities Act or any other securities law.
No transfer of a Class R-II Certificate or any interest
therein shall be made to (A) 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 (B) any Person who is directly or indirectly purchasing the
Class R-II Certificate or interest therein on behalf of, as named fiduciary of,
as trustee of, or with assets of a Plan, unless the prospective transferee
provides the Certificate Registrar with a certification of facts and an Opinion
of Counsel that 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 or result in the imposition of an excise tax under Section 4975
of the Code. Each Person who acquires any Class R-II Certificate or interest
therein (unless it shall have delivered the certification of facts and Opinion
of Counsel referred to in the preceding sentence) shall be deemed to have
certified that it is neither a Plan nor any Person who is directly or indirectly
<PAGE>
-5-
purchasing such Class R-II Certificate on behalf of, as named fiduciary of, as
trustee of, or with assets of a Plan.
In addition to the foregoing and notwithstanding anything to
the contrary contained herein or in the Agreement, no Class R-II Certificate may
be owned, pledged or transferred, directly or indirectly, by or to a
Disqualified Organization or a non-U.S. Person.
Prior to and as a condition of the registration of any
transfer, sale or other disposition of a Class R-II Certificate, the proposed
transferee, including the initial Class R-II Certificateholder, shall deliver to
the Certificate Registrar an affidavit in substantially the form attached to the
Agreement as Exhibit D representing and warranting, among other things, that
such transferee is a U.S. Person and is neither a Disqualified Organization nor
an agent or nominee acting on behalf of a Disqualified Organization (any such
transferee, a "Permitted Transferee"), and that no purpose of the acquisition of
the Class R-II Certificate is to impede the assessment or collection of tax. In
addition, the Certificate Registrar may (but shall have no obligation to and
shall not in the case of a transfer by the Depositor or any Affiliate thereof)
require, prior to and as a condition of any such transfer, the delivery by the
proposed transferee of an Opinion of Counsel, satisfactory in form and substance
to the Certificate Registrar, that such proposed transferee or, if the proposed
transferee is an agent or nominee, the proposed beneficial owner, is a Permitted
Transferee and a U.S. Person, which Opinion of Counsel shall not be an expense
of the Depositor, the Servicer, the Special Servicer, the Certificate Registrar
or the Trustee. Each Holder of this Class R-II Certificate, by its acceptance
hereof, shall be deemed for all purposes to have consented to the foregoing
provisions of this paragraph.
The Depositor, the Servicer, the Special Servicer, the Fiscal
Agent, the Trustee and the Certificate Registrar and any agent of the Depositor,
the Servicer, the Special Servicer, the Fiscal Agent, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Special Servicer, the Fiscal Agent, the Trustee, 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
and the other Transaction Documents shall terminate upon distribution (or
provision for distribution) to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be distributed to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan or REO Property
remaining in the Trust Fund, and (ii) the purchase by the Servicer or the Class
R-III Certificateholders at a price determined as provided in the Agreement of
all Mortgage Loans and each REO Property remaining in the Trust Fund. The
Agreement permits, but does not require, the Servicer or the Class R-III
Certificateholders to purchase from the Trust Fund all Mortgage Loans and each
REO Property remaining therein. The exercise of such right will effect early
retirement of the Class R-II Certificates; however, such right to purchase is
subject to the Aggregate Certificate Principal Amount of the Sequential Pay
Certificates at the time of purchase being not more than 5% of the Aggregate
Certificate Principal Amount of the Sequential Pay Certificates as of the
Closing Date.
<PAGE>
-6-
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and of the other Transaction Documents and the
modification of the rights and obligations of the Depositor, the Servicer, the
Special Servicer, the Fiscal Agent and the Trustee and the rights of the
Certificateholders under such agreements and documents at any time by the
parties thereto with the consent of the Holders of Certificates entitled to not
less than 66-2/3% of the Voting Rights. 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 and of the other Transaction Documents, in certain limited
circumstances, including any amendment necessary to maintain the status of each
of REMIC I, REMIC II and REMIC III as a REMIC, without the consent of the
Holders of any of the Certificates.
Unless the certificate of authentication hereon has been
executed by the Authenticating Agent, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder.
This Certificate shall be construed in accordance with the
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 Holder hereof
shall be determined in accordance with such laws.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
LASALLE NATIONAL BANK,
as Trustee
By:__________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-II Certificates referred to in the
within-mentioned Agreement.
Dated:
LASALLE NATIONAL BANK,
as Authenticating Agent
By:________________________________
Authorized Officer
<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
Multiclass PassThrough Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Multiclass PassThrough Certificate of a like Percentage Interest and Class to
the above named assignee and deliver such Multiclass 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.
<PAGE>
CLASS R-III CERTIFICATE
LB COMMERCIAL CONDUIT MORTGAGE TRUST II
CLASS R-III MULTICLASS PASS-THROUGH CERTIFICATE,
SERIES 1996-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of multifamily and commercial mortgage loans (the
"Mortgage Loans"), such pool being formed and sold by
STRUCTURED ASSET SECURITIES CORPORATION
Cut-off Date: Percentage Interest Represented
October 1, 1996 by this Class R-III Certificate: 100%
Closing Date: Aggregate Scheduled Principal Balance
October 25, 1996 of the Mortgage Loans as of the Cut-off
Date: $ 397,202,498.27
First Distribution Date:
November 25, 1996 Trustee: LaSalle National Bank
Servicer: GMAC Commercial Special Servicer:
Mortgage Corporation CRIIMI MAE Services Limited
Partnership
Certificate No. R-III-1 Fiscal Agent:
ABN AMRO Bank N.V.
<PAGE>
-2-
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN STRUCTURED
ASSET SECURITIES CORPORATION, GMAC COMMERCIAL MORTGAGE CORPORATION, CRIIMI MAE
SERVICES LIMITED PARTNERSHIP, LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY
OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES OR BY ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A, CLASS IO, CLASS B, CLASS C,
CLASS D, CLASS E, CLASS F, CLASS G, CLASS H AND CLASS J CERTIFICATES OF THE SAME
SERIES TO THE EXTENT DESCRIBED IN THE TRUST AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES LAWS OF ANY STATE.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT SUCH
REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 3.03 OF THE TRUST AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986 (THE "CODE") OR
TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS CERTIFICATE ON
BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH ASSETS OF ANY SUCH
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WILL BE REGISTERED EXCEPT
IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
CONSEQUENTLY, TRANSFER OF THIS CERTIFICATE IS ALSO SUBJECT TO THE ADDITIONAL TAX
RELATED TRANSFER RESTRICTIONS DESCRIBED HEREIN.
This certifies that _____________ is the registered owner of
the Percentage Interest evidenced by this Class R-III Certificate and specified
above in that certain beneficial ownership interest evidenced by all the Class
R-III Certificates in the Trust Fund created pursuant to a Trust Agreement,
dated as of the Cut-off Date (the "Agreement"), among Structured Asset
Securities Corporation (hereinafter called the "Depositor", which term includes
any successor entity under the Agreement), GMAC Commercial Mortgage Corporation
(hereinafter called the "Servicer", which term includes any successor entity
under the
<PAGE>
-3-
Agreement), CRIIMI MAE Services Limited Partnership (hereinafter called the
"Special Servicer", which term includes any successor entity under the
Agreement), ABN AMRO Bank N.V. (hereinafter called the "Fiscal Agent", which
term includes any successor entity under the Agreement) and LaSalle National
Bank (hereinafter called the "Trustee", which term includes any successor entity
under the Agreement), a summary of certain of the pertinent provisions of which
is set forth hereafter. 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 and the other Transaction Documents, to which
agreements and documents 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 25th day of each month or, if such 25th 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, if any, required to be distributed to the
Holders of the Class R-III Certificates on the applicable Distribution Date
pursuant to the Agreement. All distributions made under the Agreement on this
Class R-III Certificate will be made by check mailed to the address of the
Person entitled thereto, as such name and address appear in the Certificate
Register. Notwithstanding the foregoing, the final distribution on this
Certificate will be made in like manner, but only upon presentation and
surrender of this Certificate at the offices of the Certificate Registrar or
such other location specified in the notice to Certificateholders of such final
distribution.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein, in the Agreement and in the other Transaction
Documents. As provided in the Agreement and in the other Transaction Documents,
withdrawals from the Collection Account, the Custodial Account and, if
established, the REO Accounts 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 Class R-III Certificates are issuable in fully registered
certificated form only, without coupons, in minimum denominations representing
Percentage Interests specified in the Agreement. As provided in the Agreement
and subject to certain limitations therein set forth, Class R-III Certificates
are exchangeable for new Class R-III Certificates in authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
This Certificate may be transferred by the Holder thereof only
upon presentation and surrender of such Certificate at the New York Presenting
Office duly endorsed or accompanied by an assignment duly executed by such
Holder or his duly authorized attorney in
<PAGE>
-4-
such form as shall be satisfactory to the Certificate Registrar. Upon the
transfer of this Certificate in accordance with the preceding sentence, the
Trustee shall execute, and the Trustee or any Authenticating Agent shall
authenticate and deliver to the transferee, one or more new Certificates of the
same Class, in authorized denominations, evidencing in the aggregate the same
aggregate Certificate Principal Amount as the Certificate being transferred.
No transfer of any Class R-III Certificate shall be made
unless that transfer is made pursuant to an effective registration statement
under the Securities Act or otherwise in accordance with 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. If a transfer of any Class R-III Certificate is to be made
without registration under the Securities Act (other than a transfer thereof by
the Depositor or any of its affiliates), then the Certificate Registrar shall
refuse to register such transfer unless it receives either (a) a certification
of the transferor substantially in the form of Exhibit C-1 attached to the
Agreement, or (b) a certification of the transferor substantially in the form of
Exhibit C-2 attached to the Agreement and a certification of the transferee
substantially in the form of Exhibit C-3 attached to the Agreement, or (c) an
Opinion of Counsel, in form and substance reasonably satisfactory to the
Certificate Registrar and the Depositor that such transfer may be made pursuant
to an exemption from registration under the Securities Act, describing the
applicable exemption and the basis therefor, and which Opinion of Counsel shall
be accompanied by a certification of the transferor and/or transferee, in form
and substance reasonably satisfactory to the Certificate Registrar, setting
forth the facts surrounding such transfer. In each case, the Certificate
Registrar will be entitled without further investigation to rely upon such
Opinion of Counsel or certification. Any Holder of a Class R-III Certificate
desiring to effect such transfer shall indemnify the Certificate Registrar, the
Trustee, the Fiscal Agent, the Servicer, the Special Servicer and the Depositor
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. None of the Depositor, the
Trustee, the Fiscal Agent, the Servicer, the Special Servicer, or the
Certificate Registrar is under an obligation to register or qualify any Class
R-III Certificate under the Securities Act or any other securities law.
No transfer of a Class R-III Certificate or any interest
therein shall be made to (A) 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 (B) any Person who is directly or indirectly purchasing the
Class R-III Certificate or interest therein on behalf of, as named fiduciary of,
as trustee of, or with assets of a Plan, unless the prospective transferee
provides the Certificate Registrar with a certification of facts and an Opinion
of Counsel that 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 or result in the imposition of an excise tax under Section 4975
of the Code. Each Person who acquires any Class R-III Certificate or interest
therein (unless it shall have delivered the certification of facts and Opinion
of Counsel referred to in the preceding sentence) shall be deemed to have
certified that it is neither a Plan nor any Person who is directly or indirectly
<PAGE>
-5-
purchasing such Class R-III Certificate on behalf of, as named fiduciary of, as
trustee of, or with assets of a Plan.
In addition to the foregoing and notwithstanding anything to
the contrary contained herein or in the Agreement, no Class R-III Certificate
may be owned, pledged or transferred, directly or indirectly, by or to a
Disqualified Organization or a non-U.S. Person.
Prior to and as a condition of the registration of any
transfer, sale or other disposition of a Class R-III Certificate, the proposed
transferee, including the initial Class R-III Certificateholder, shall deliver
to the Certificate Registrar an affidavit in substantially the form attached to
the Agreement as Exhibit D representing and warranting, among other things, that
such transferee is a U.S. Person and is neither a Disqualified Organization nor
an agent or nominee acting on behalf of a Disqualified Organization (any such
transferee, a "Permitted Transferee"), and that no purpose of the acquisition of
the Class R-III Certificate is to impede the assessment or collection of tax. In
addition, the Certificate Registrar may (but shall have no obligation to and
shall not in the case of a transfer by the Depositor or any Affiliate thereof)
require, prior to and as a condition of any such transfer, the delivery by the
proposed transferee of an Opinion of Counsel, satisfactory in form and substance
to the Certificate Registrar, that such proposed transferee or, if the proposed
transferee is an agent or nominee, the proposed beneficial owner, is a Permitted
Transferee and a U.S. Person, which Opinion of Counsel shall not be an expense
of the Depositor, the Servicer, the Special Servicer, the Certificate Registrar
or the Trustee. Each Holder of this Class R-III Certificate, by its acceptance
hereof, shall be deemed for all purposes to have consented to the foregoing
provisions of this paragraph.
The Depositor, the Servicer, the Special Servicer, the Fiscal
Agent, the Trustee and the Certificate Registrar and any agent of the Depositor,
the Servicer, the Special Servicer, the Fiscal Agent, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Servicer, the Special Servicer, the Fiscal Agent, the Trustee, 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
and the other Transaction Documents shall terminate upon distribution (or
provision for distribution) to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be distributed to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan or REO Property
remaining in the Trust Fund, and (ii) the purchase by the Servicer or the Class
R-III Certificateholders at a price determined as provided in the Agreement of
all Mortgage Loans and each REO Property remaining in the Trust Fund. The
Agreement permits, but does not require, the Servicer or the Class R-III
Certificateholders to purchase from the Trust Fund all Mortgage Loans and each
REO Property remaining therein. The exercise of such right will effect early
retirement of the Class R-III Certificates; however, such right to purchase is
subject to the Aggregate Certificate Principal Amount of the Sequential Pay
Certificates at the time of purchase being not more than 5% of the Aggregate
Certificate Principal Amount of the Sequential Pay Certificates as of the
Closing Date.
<PAGE>
-6-
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and of the other Transaction Documents and the
modification of the rights and obligations of the Depositor, the Servicer, the
Special Servicer, the Fiscal Agent and the Trustee and the rights of the
Certificateholders under such agreements and documents at any time by the
parties thereto with the consent of the Holders of Certificates entitled to not
less than 66-2/3% of the Voting Rights. 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 and of the other Transaction Documents, in certain limited
circumstances, including any amendment necessary to maintain the status of each
of REMIC I, REMIC II and REMIC III as a REMIC, without the consent of the
Holders of any of the Certificates.
Unless the certificate of authentication hereon has been
executed by the Authenticating Agent, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof, agrees
that it will look solely to the Trust Fund (to the extent of its rights therein)
for distributions hereunder.
This Certificate shall be construed in accordance with the
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 Holder hereof
shall be determined in accordance with such laws.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
LASALLE NATIONAL BANK,
as Trustee
By:__________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-III Certificates referred to in the
within-mentioned Agreement.
Dated:
LASALLE NATIONAL BANK,
as Authenticating Agent
By:________________________________
Authorized Officer
<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
Multiclass PassThrough Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a new
Multiclass PassThrough Certificate of a like Percentage Interest and Class to
the above named assignee and deliver such Multiclass 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.
<PAGE>
-1-
EXHIBIT B-1
FORM OF TRUSTEE (OR CUSTODIAN)
INITIAL CERTIFICATION
October 30, 1996
Structured Asset Securities
Corporation
200 Vesey Street
New York, New York 10285
Lehman Brothers Inc.
200 Vesey Street
New York, New York 10285
GMAC Commercial Mortgage Corporation
100 South Wacker Drive, Suite 400
Chicago, Illinois 60606
Re: Trust Agreement (the "TRUST AGREEMENT"), dated as of October
1, 1996, among LaSalle National Bank, as Trustee, Structured
Asset Securities Corporation, as Depositor, ABN AMRO Bank
N.V., as Fiscal Agent, GMAC Commercial Mortgage Corporation,
as Servicer, and CRIIMI MAE Services Limited Partnership, as
Special Servicer, with respect to LB Commercial Conduit
Mortgage Trust II, Multiclass Pass-Through Certificates,
Series 1996-C2
Ladies and Gentlemen:
In accordance with Section 2.02(a) of the Trust Agreement,
subject to further review of the contents thereof, and except as otherwise
listed on the attachment hereto, the undersigned, as [Trustee] [Custodian],
hereby certifies that it has received the documents listed in Section 2.01(b)(i)
(without regard to whether the signatory thereof is the holder of record of the
Mortgage Loan) of the Trust Agreement pertaining to each Mortgage Loan listed in
the Mortgage Loan Schedule.
Capitalized words and phrases used herein and not otherwise
defined herein shall have the respective meanings assigned to them in the Trust
Agreement. This Certificate is subject in all respects to the terms of said
Trust Agreement. The Rating Agencies may rely upon this Certificate.
_____________________________________
as [Trustee] [Custodian]
By:__________________________________
<PAGE>
-2-
Name:
Title:
<PAGE>
-1-
EXHIBIT B-2
FORM OF TRUSTEE (OR CUSTODIAN)
INTERIM CERTIFICATION
[DATE]
Structured Asset Securities
Corporation
200 Vesey Street
New York, New York 10285
Lehman Brothers Inc.
200 Vesey Street
New York, New York 10285
GMAC Commercial Mortgage Corporation
100 South Wacker Drive, Suite 400
Chicago, Illinois 60606
Re: Trust Agreement (the "TRUST AGREEMENT"), dated as of October
1, 1996, among LaSalle National Bank, as Trustee, Structured
Asset Securities Corporation, as Depositor, ABN AMRO Bank
N.V., as Fiscal Agent, GMAC Commercial Mortgage Corporation,
as Servicer, and CRIIMI MAE Services Limited Partnership, as
Special Servicer, with respect to LB Commercial Conduit
Mortgage Trust II, Multiclass Pass-Through Certificates,
Series 1996-C2
Ladies and Gentlemen:
In accordance with Section 2.02(b) of the Trust Agreement, the
undersigned, as [Trustee] [Custodian], hereby certifies that as to each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in
full or listed on the attachment hereto) (i) all of the following documents are
in its possession: (A) all documents specified in clauses (i), (ii), (v), and
(x) of Section 2.01(b) of the Trust Agreement, and (B) documents specified in
clauses (iii), (vi), (viii) and (ix) of Section 2.01(b) of the Trust Agreement
for those Mortgage Loans which the Depositor has notified the Trustee as having
an assumption, modification or substitution agreement, Assignment of Leases
separate from the Mortgage or any guaranty, but only as to documents
specifically described in such notice from the Depositor; (ii) the documents
specified in clause (iv) and, if applicable, clause (vii) of Section 2.01(b)
have been submitted for recordation; (iii) all such documents referred to in the
preceding clauses (i) and (ii) have been reviewed by it and appear to relate to
such Mortgage Loan; and (iv) based on its examination and only as to the
foregoing documents, the information respecting such Mortgage Loan set forth in
items (i), (ii), (iii), (iv) and (v) of the Mortgage Loan Schedule attached to
the
<PAGE>
-2-
Trust Agreement as Schedule I, as required by the Mortgage Loan Schedule
Information attached to the Trust Agreement as Schedule II, accurately reflects
information set forth in the related Mortgage File, to the extent that such
information contained in items (i), (ii), (iii), (iv) and (v) of the Mortgage
Loan Schedule Information is ascertainable from the documents delivered to the
Trustee.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Trust Agreement. This Certificate is
qualified in all respects by the terms of said Trust Agreement including but not
limited to Section 2.02(b).
_____________________________________
as [Trustee] [Custodian]
By:__________________________________
Name:
Title:
<PAGE>
-1-
EXHIBIT B-3
FORM OF TRUSTEE (OR CUSTODIAN) FINAL CERTIFICATION
[DATE]
Structured Asset Securities
Corporation
200 Vesey Street
New York, New York 10285
Lehman Brothers Inc.
200 Vesey Street
New York, New York 10285
GMAC Commercial Mortgage Corporation
100 South Wacker Drive, Suite 400
Chicago, Illinois 60606
Re: Trust Agreement (the "TRUST AGREEMENT"), dated as of October
1, 1996, among LaSalle National Bank, as Trustee, Structured
Asset Securities Corporation, as Depositor, ABN AMRO Bank
N.V., as Fiscal Agent, GMAC Commercial Mortgage Corporation,
as Servicer, and CRIIMI MAE Services Limited Partnership, as
Special Servicer, with respect to LB Commercial Conduit
Mortgage Trust II, Multiclass Pass-Through Certificates,
Series 1996-C2
Ladies and Gentlemen:
In accordance with Section 2.02(d) of the Trust Agreement, the
undersigned, as [Trustee] [Custodian], hereby certifies that as to each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in
full or listed on the attachment hereto) it has received:
(i) The original Mortgage Note, endorsed in blank or
to "LaSalle National Bank, as trustee for LB Commercial
Conduit Mortgage Trust II, Multiclass Pass-Through
Certificates, Series 1996-C2, without recourse," together with
all intervening endorsements showing an unbroken chain of
endorsement from the originator of the Mortgage Loan to the
Person so endorsing;
(ii) Each original Mortgage, with evidence of
recording thereon, and, if any such Mortgage was executed
pursuant to a power of attorney, the original of such power of
attorney, with evidence of recording thereon, or if any such
original Mortgage or power of attorney has been retained by
the applicable public
<PAGE>
-2-
recording office or has been lost following recordation, a
copy of such Mortgage or power of attorney, certified by the
appropriate public recording office where such document is
recorded to be a true and complete copy of the recorded
original of such Mortgage or power of attorney, as the case
may be;
(iii) If notified of the existence thereof by the
Depositor, the originals of all modification, consolidation
and extension agreements, if any, with evidence of recording
thereon, or if any such original modification, consolidation
or extension agreement has been retained by the applicable
public recording office or has been lost following
recordation, a copy of such modification, consolidation or
extension agreement certified by the appropriate public
recording office where such document is recorded to be a true
and complete copy of the recorded original of such
modification, consolidation or extension agreement;
(iv) Originals of all assignments of each Mortgage,
with evidence of recording thereon and showing a complete
chain of assignment from the originator of the Mortgage Loan
to the Trustee, or if any such original assignment of such
Mortgage has been retained by the applicable public recording
office or has been lost following recordation, a copy of such
assignment of such Mortgage certified by the appropriate
public recording office where such assignment is recorded to
be a true and complete copy of the recorded original of such
assignment of such Mortgage;
(v) If any related Assignment of Leases is separate
from the Mortgage, the original version of such Assignment of
Leases with evidence of recording thereon, or if such
Assignment of Leases has been retained by the applicable
public recording office or has been lost following
recordation, a copy of such Assignment of Leases certified by
the appropriate public recording office where such document is
recorded to be a true and complete copy of the recorded
original of such Assignment of Leases;
(vi) If any related Assignment of Leases is separate
from the Mortgage, originals of all assignments of such
Assignment of Leases (which in each case may be effected in
the related assignment of the corresponding Mortgage referred
to in clause (iv) above), with evidence of recording thereon
and showing a complete chain of assignment from the originator
of the Mortgage Loan to the Trustee, or if any such original
assignment of such Assignment of Leases has been retained by
the applicable public recording office or has been lost
following recordation, a copy of such assignment of such
Assignment of Leases certified by the appropriate public
recording office where such assignment is recorded to be a
true and complete copy of the recorded original of such
assignment of such Assignment of Leases;
(vii) The original of each guaranty constituting
additional security for the repayment of such Mortgage Loan,
together with each original assignment of
<PAGE>
-3-
such item of additional security showing a complete chain of
assignment from the original beneficiary of such item to the
Trustee; and
(viii) The original Title Insurance Policy or a copy
of such policy certified by the title company;
provided that, notwithstanding anything herein to the contrary, in the case of a
Group of CrossCollateralized Mortgage Loans, if there is only one original of
any document referred to above in respect of the entire such Group, delivery of
such original or a copy of such document in accordance with the applicable
clause of (i) through (viii) above with respect to any of the
CrossCollateralized Mortgage Loans in such Group has been deemed (in accordance
with the provisions of the Trust Agreement) to be delivery thereof with respect
to all the CrossCollateralized Mortgage Loans in such Group.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Trust Agreement. This Certificate is qualified
in all respects by the terms of said Trust Agreement.
_________________________________
as [Trustee] [Custodian]
By:______________________________
Name:
Title:
<PAGE>
-1-
EXHIBIT C-1
FORM OF TRANSFEROR CERTIFICATE
PURSUANT TO SECTION 3.03(C)(I)
_____________, 19__
[CERTIFICATE REGISTRAR]
Re: LB Commercial Conduit Mortgage Trust II,
Multiclass PassThrough Certificate, Series
1996-C2, Class [F] [G] [H] [J] [R-I] [R-II]
[R-III], [having an initial principal amount
as of _________________, 1996 (the "Issue
Date") of $__________] [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 Certificate (the "Certificate"), issued pursuant
to a Trust Agreement (the "Trust Agreement"), dated as of October 1, 1996, among
Structured Asset Securities Corporation, as Depositor, LaSalle National Bank, as
Trustee, ABN AMRO Bank N.V., as Fiscal Agent, GMAC Commercial Mortgage
Corporation, as Servicer, and CRIIMI MAE Services Limited Partnership, as
Special Servicer. All terms used herein and not otherwise defined shall have the
respective meanings set forth in the Trust Agreement. The Transferor hereby
certifies, represents and warrants to you, as Certificate Registrar, that:
1. The Transferor is the lawful owner of the Certificate with
the full right to transfer the Certificate 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 the
Certificate, any interest in the 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 the Certificate, any
interest in the Certificate or any other similar security from any
person in any manner, (c) otherwise approached or negotiated with
respect to the Certificate, any interest in the Certificate or any
other similar security with any person in any manner, (d) made any
general solicitation with respect to the Certificate, any interest in
the 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 the Certificate, any interest in the Certificate or any
other similar security, which (in the case of any of the acts described
in clauses (a)
<PAGE>
-2-
through (e) hereof) would constitute a distribution of the Certificate
under the Securities Act of 1933, as amended (the "1933 Act"), or would
render the disposition of the Certificate a violation of Section 5 of
the 1933 Act or any state securities laws, or would require
registration or qualification of the Certificate pursuant to the 1933
Act or any state securities laws.
3. The Transferor and any person acting on behalf of the
Transferor in this matter reasonably believe that the Transferee is a
"qualified institutional buyer" (as that term is defined in Rule 144A
("RULE 144A") under the 1933 Act) purchasing for its own account. In
determining whether the Transferee is a "qualified institutional
buyer", the Transferor and any person acting on behalf of the
Transferor in this matter has relied upon the following method(s) of
establishing the Transferee's ownership and discretionary investments
of securities (check one or more):
___ (a) The Transferee's most recent publicly available
financial statements, which statements present the
information as of a date within 16 months preceding
the date of sale of the Certificate in the case of a
U.S. purchaser and within 18 months preceding such
date of sale for a foreign purchaser; or
___ (b) The most recent publicly available information
appearing in documents filed by the Transferee with
the Securities and Exchange Commission or another
United States federal, state, or local governmental
agency or self-regulatory organization, or with a
foreign governmental agency or self-regulatory
organization, which information is as of a date
within 16 months preceding the date of sale of the
Certificate in the case of a U.S. purchaser and
within 18 months preceding such date of sale for a
foreign purchaser; or
___ (c) The most recent publicly available information
appearing in a recognized securities manual, which
information is as of a date within 16 months
preceding the date of sale of the Certificate in the
case of a U.S. purchaser and within 18 months
preceding such date of sale for a foreign purchaser;
or
___ (d) A certification by the chief financial officer, a
person fulfilling an equivalent function, or other
executive officer of the Transferee, specifying the
amount of securities owned and invested on a
discretionary basis by the Transferee as of a
specific date on or since the close of the
Transferee's most recent fiscal year, or, in the case
of a Transferee that is a member of a "family of
investment companies", as that term is defined in
Rule 144A, a certification by an executive officer of
the investment adviser specifying the amount of
securities owned by the "family of investment
companies" as of a specific date on or since the
close of the Transferee's most recent fiscal year.
<PAGE>
-3-
4. The Transferor and any person acting on behalf of the
Transferor understand that in determining the aggregate amount of
securities owned and invested on a discretionary basis by an entity for
purposes of establishing whether such entity is a "qualified
institutional buyer":
(a) the following instruments and interests shall be
excluded: securities of issuers that are affiliated
with the Transferee; securities that are part of an
unsold allotment to or subscription by the
Transferee, if the Transferee is a dealer; securities
of issuers that are part of the Transferee's "family
of investment companies", if the Transferee is a
registered investment company; bank deposit notes and
certificates of deposit; loan participations;
repurchase agreements; securities owned but subject
to a repurchase agreement; and currency, interest
rate and commodity swaps;
(b) the aggregate value of the securities shall be
the cost of such securities, except where the entity
reports its securities holdings in its financial
statements on the basis of their market value, and no
current information with respect to the cost of those
securities has been published, in which case the
securities may be valued at market;
(c) securities owned by subsidiaries of the entity
that are consolidated with the entity in its
financial statements prepared in accordance with
generally accepted accounting principles may be
included if the investments of such subsidiaries are
managed under the direction of the entity, except
that, unless the entity is a reporting company under
Section 13 or 15(d) of the Securities Exchange Act of
1934, securities owned by such subsidiaries may not
be included if the entity itself is a majority-owned
subsidiary that would be included in the consolidated
financial statements of another enterprise.
5. The Transferor or a person acting on its behalf has taken
reasonable steps to ensure that the Transferee is aware that the
Transferor is relying on the exemption from the provisions of Section 5
of the 1933 Act provided by Rule 144A.
6. The Transferor or a person acting on its behalf has
furnished, or caused to be furnished, to the Transferee all information
regarding (a) the Certificate and distributions thereon, (b) the
nature, performance and servicing of the Mortgage Loans, (c) the Trust
Agreement, the Servicing Agreement and the Special Servicing Agreement,
and (d) any credit enhancement mechanism associated with the
Certificate, that the Transferee has requested.
Very truly yours,
_________________________________
(Transferor)
<PAGE>
-4-
By:_____________________________
Name:
Title:
<PAGE>
-1-
EXHIBIT C-2
FORM OF TRANSFEROR CERTIFICATE
PURSUANT TO SECTION 3.03(C)(II)
_____________, 19__
[CERTIFICATE REGISTRAR]
Re: LB Commercial Conduit Mortgage Trust II,
Multiclass PassThrough Certificate, Series
1996-C2, Class [F] [G] [H] [J] [R-I] [R-II]
[R-III], [having an initial principal amount
as of __________________, 1996 (the "Issue
Date") of $__________] [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 Certificate (the "Certificate"), issued pursuant
to a Trust Agreement (the "Trust Agreement"), dated as of October 1, 1996, among
Structured Asset Securities Corporation, as Depositor, LaSalle National Bank, as
Trustee, ABN AMRO Bank N.V., as Fiscal Agent, GMAC Commercial Mortgage
Corporation, as Servicer, and CRIIMI MAE Services Limited Partnership, as
Special Servicer. All terms used herein and not otherwise defined shall have the
respective meanings set forth in the Trust Agreement. The Transferor hereby
certifies, represents and warrants to you, as Certificate Registrar, that:
1. The Transferor is the lawful owner of the Certificate with
the full right to transfer the Certificate 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 the
Certificate, any interest in the 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 the Certificate, any
interest in the Certificate or any other similar security from any
person in any manner, (c) otherwise approached or negotiated with
respect to the Certificate, any interest in the Certificate or any
other similar security with any person in any manner, (d) made any
general solicitation with respect to the Certificate, any interest in
the 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 the Certificate, any interest in the Certificate or any
other similar security, which (in the case of any of the acts described
in clauses (a)
<PAGE>
-2-
through (e) hereof) would constitute a distribution of the Certificate
under the Securities Act of 1933, as amended (the "1933 Act"), or would
render the disposition of the Certificate a violation of Section 5 of
the 1933 Act or any state securities laws, or would require
registration or qualification of the Certificate pursuant to the 1933
Act or any state securities laws.
Very truly yours,
____________________________________
(Transferor)
By:_________________________________
Name:_______________________________
Title:______________________________
<PAGE>
-1-
EXHIBIT C-3
FORM OF TRANSFEREE CERTIFICATE
PURSUANT TO SECTION 3.03(C)(II)
_____________, 19__
[CERTIFICATE REGISTRAR]
Re: LB Commercial Conduit Mortgage Trust II,
Multiclass PassThrough Certificate, Series
1996-C2, Class [F] [G] [H] [J] [R-I] [R-II]
[R-III], [having an initial principal amount
as of _____________, 1996 (the "Issue Date")
of $__________] [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 Certificate (the "Certificate"), issued pursuant
to a Trust Agreement (the "Trust Agreement"), dated as of October 1, 1996, among
Structured Asset Securities Corporation, as Depositor, LaSalle National Bank, as
Trustee, ABN AMRO Bank N.V., as Fiscal Agent, GMAC Commercial Mortgage
Corporation, as Servicer, and CRIIMI MAE Services Limited Partnership, as
Special Servicer. All terms used herein and not otherwise defined shall have the
respective meanings set forth in the Trust Agreement. The Transferor hereby
certifies, represents and warrants to you, as Certificate Registrar, that:
1. 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 (the "1933 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 Certificate for its own
account or for the account of a qualified institutional buyer, and
understands that such Certificate 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 a 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 1933
Act.
<PAGE>
-2-
2. The Transferee has been furnished with all information
regarding (a) the Certificate and distributions thereon, (b) the
nature, performance and servicing of the Mortgage Loans, (c) the Trust
Agreement, the Servicing Agreement, and the Special Servicing
Agreement, and (d) any credit enhancement mechanism associated with the
Certificate, that it has requested.
Very truly yours,
____________________________________
(Transferor)
By:_________________________________
Name:_______________________________
Title:______________________________
<PAGE>
ANNEX 1 TO EXHIBIT C-3
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned hereby certifies as follows to [name of
Transferor] (the "TRANSFEROR") and [name of Certificate Registrar], as
Certificate Registrar, with respect to the multiclass pass-through certificate
(the "CERTIFICATE") 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 Certificate (the "TRANSFEREE").
2. The Transferee is a "qualified institutional buyer" as that
term is defined in Rule 144A under the Securities Act of 1933, as amended ("RULE
144A") because (i) the Transferee owned and/or invested on a discretionary basis
$______________________1 in securities (other than the excluded securities
referred to below) as of the end of the Transferee's most recent fiscal year
(such amount being calculated in accordance with Rule 144A) and (ii) the
Transferee satisfies the criteria in the category marked below.
___ CORPORATION, ETC. The Transferee is a corporation (other than
a bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or any
organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986.
___ BANK. The Transferee (a) is a national bank or a banking
institution organized under the laws of any State, U.S.
territory or the District of Columbia, the business of which
is substantially confined to banking and is supervised by the
State or territorial banking commission or similar official or
is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, A COPY OF WHICH IS
ATTACHED HERETO, as of a date not more than 16 months
preceding the date of sale of the Certificate in the case of a
U.S. bank, and not more than 18 months preceding such date of
sale for 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
- --------
1 Transferee must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Transferee is a dealer, and, in that case,
Transferee must own and/or invest on a discretionary basis at least $10,000,000
in securities.
<PAGE>
-2-
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 Certificate in the
case of a U.S. savings and loan association, and not more than
18 months preceding such date of sale for 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.
___ 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 ADVISER. The Transferee is an investment advisor
registered under the Investment Advisers Act of 1940.
___ OTHER. (Please supply a brief description of the entity and a
cross-reference to the paragraph and subparagraph under
subsection (a)(1) of Rule 144A pursuant to which it qualifies.
Note that registered investment companies should complete
Annex 2 rather than this Annex 1.)
3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Transferee, (ii) securities
that are part of an unsold allotment to or subscription by the Transferee, if
the Transferee is a dealer, (iii) bank deposit notes and certificates of
deposit, (iv) loan participations, (v) repurchase agreements, (vi) securities
owned but subject to a repurchase agreement and (vii) currency, interest rate
and commodity swaps. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Transferee, the
Transferee did not include any of the securities referred to in this paragraph.
<PAGE>
-3-
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Transferee, the
Transferee used the cost of such securities to the Transferee, unless the
Transferee reports its securities holdings in its financial statements on the
basis of their market value, and no current information with respect to the cost
of those securities has been published, in which case the securities were valued
at market. Further, in determining such aggregate amount, the Transferee may
have included securities owned by subsidiaries of the Transferee, but only if
such subsidiaries are consolidated with the Transferee in its financial
statements prepared in accordance with generally accepted accounting principles
and if the investments of such subsidiaries are managed under the Transferee's
direction. However, such securities were not included if the Transferee is a
majority-owned, consolidated subsidiary of another enterprise and the Transferee
is not itself a reporting company under the Securities Exchange Act of 1934.
5. The Transferee acknowledges that it is familiar with Rule
144A and understands that the Transferor and other parties related to the
Certificate 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 Certificate
Yes No 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 Certificate
will constitute a reaffirmation of this certification as of the date of such
purchase. In addition, if the Transferee is a bank or savings and loan as
provided above, the Transferee agrees that it will furnish to such parties any
updated annual financial statements that become available on or before the date
of such purchase, promptly after they become available.
____________________________________
Print Name of Transferee
By:_________________________________
Name:_______________________________
Title:______________________________
Date:_______________________________
<PAGE>
ANNEX 2 TO EXHIBIT C-3
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That Are Registered Investment Companies]
The undersigned hereby certifies as follows to [name of
Transferor] (the "TRANSFEROR") and [name of Certificate Registrar], as
Certificate Registrar, with respect to the multiclass pass-through certificate
(the "CERTIFICATE") 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 Certificate (the "TRANSFEREE") or, if the
Transferee is a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act of 1933, as amended ("Rule 144A") because the
Transferee is part of a Family of Investment Companies (as defined below), is an
executive officer of the investment adviser (the "Adviser").
2. The Transferee is a "qualified institutional buyer" as
defined in Rule 144A because (i) the Transferee is an investment company
registered under the Investment Company Act of 1940, 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
<PAGE>
-2-
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 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 parties to which this certification is being made 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 Certificate
Yes No 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 Certificate will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
_________________________________________
Print Name of Transferee or Adviser
By:______________________________________
Name:
Title:
IF AN ADVISER:
_________________________________________
Print Name of Transferee
Date:____________________________________
<PAGE>
-1-
EXHIBIT D
FORM OF AFFIDAVIT PURSUANT TO SECTIONS
860D(A)(6)(A) AND 860E(E)(4)
OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED
Re: LB Commercial Conduit Mortgage Trust II, Multiclass Pass-Through
Certificates, Series 1996-C2 (the "CERTIFICATES") issued pursuant to
the Trust Agreement (the "TRUST AGREEMENT"), dated as of October 1,
1996, among LaSalle National Bank, as Trustee, Structured Asset
Securities Corporation, as Depositor, ABN AMRO Bank N.V., as Fiscal
Agent, GMAC Commercial Mortgage Corporation, as Servicer, and CRIIMI
MAE Services Limited Partnership, as Special Servicer
STATE OF NEW YORK )
) ss.: ____________
COUNTY OF NEW YORK )
I, ________________, under penalties of perjury, declare that, to the
best of my knowledge and belief, the following representations are true, correct
and complete, and being first sworn, depose and say:
1. That I am the __________________ of ____________________ (the
"Purchaser"), on behalf of which I have the authority to make this affidavit.
2. That the Purchaser is acquiring certain Class R-[I] [II] [III]
Certificates representing a residual interest in the real estate mortgage
investment conduit ("REMIC") designated as "REMIC [I] [II] [III]" relating to
the Certificates for which an election [is to be] [has been] made under Section
860D of the Internal Revenue Code of 1986, as amended (the "Code").
3. That the Purchaser is not a "Disqualified Organization" (as defined
below), and that the Purchaser is not acquiring the subject Class R-[I] [II]
[III] Certificates for the account of, or as agent or nominee of, or with a view
to the transfer of direct or indirect record or beneficial ownership thereof, to
a Disqualified Organization. For the purposes hereof, a Disqualified
Organization is any of the following: (i) the United States, (ii) any state or
political subdivision thereof, (iii) any foreign government, (iv) any
international organization, (v) any agency or instrumentality of any of the
foregoing, (vi) any tax- exempt organization (other than a cooperative described
in section 521 of the Code) which is exempt from the tax imposed by Chapter 1 of
the Code unless such organization is subject to the tax imposed by section 511
of the Code, (vii) any organization described in section 1381(a)(2)(C) of the
Code, or (viii) any other entity designated as a "disqualified organization" by
relevant legislation amending the
<PAGE>
-2-
REMIC Provisions and in effect at or proposed to be effective as of the time of
determination. In addition, a corporation will not be treated as an
instrumentality of the United States or of any state or political subdivision
thereof if all of its activities are subject to tax and a majority of its board
of directors is not selected by such governmental unit. The terms "United
States" and "international organization" shall have the meanings set forth in
Section 7701 of the Code.
4. That the Purchaser acknowledges that Section 860E(e) of the Code
would impose a substantial tax on the transferor or, in certain circumstances,
on an agent for the transferee, with respect to any transfer of any interest in
any Class R-[I] [II] [III] Certificates to a Disqualified Organization.
5. That the Purchaser is a U.S. Person as defined in Section 7701(a) of
the Code; and that the Purchaser's U.S. taxpayer identification number
is_______________________.
6. That no purpose of the acquisition of the subject Class R-[I] [II]
[III] Certificates is to impede the assessment or collection of tax.
7. That the Purchaser historically has paid its debts as they have come
due and intends to pay its debts as they come due in the future and that the
Purchaser intends to pay taxes associated with holding the subject Class R-[I]
[II] [III] Certificates as they become due.
8. That the Purchaser understands that it may incur tax liabilities
with respect to the subject Class R-[I] [II] [III] Certificates in excess of any
cash flows generated by such Certificates.
9. That the Purchaser will not transfer any Class R-[I] [II] [III]
Certificates to any person or entity as to which the Purchaser has not received
an affidavit substantially in the form of this affidavit or to any person or
entity as to which the Purchaser has actual knowledge that the requirements set
forth in paragraphs 3, 5 or 7 hereof are not satisfied.
10. That the Purchaser agrees to such amendments of the Trust Agreement
as may be required to further effectuate the prohibition against transferring
Class R-[I] [II] [III] Certificates to a Disqualified Organization, an agent
thereof or a person that does not satisfy the requirements of paragraphs 5 and
7.
11. That the Purchaser consents to the designation of the Trustee as
the agent of the Tax Matters Person of REMIC-[I] [II] [III] pursuant to Section
10.01(f) of the Trust Agreement.
Capitalized terms used but not defined herein have the meanings
assigned thereto in the Trust Agreement.
<PAGE>
-3-
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be duly
executed on its behalf by its duly authorized officer this ___ day of
______________, 199__.
By:________________________________
Name:
Title:
Personally appeared before me _______________ _______________, known or
proved to me to be the same person who executed the foregoing instrument and to
be a ________________________ of the Purchaser, and acknowledged to me that he
executed the same as his free act and deed and as the free act and deed of the
Purchaser.
Subscribed and sworn before me this
_____ day of _____________, 199__.
-------------------------------
Notary Public
<PAGE>
-1-
SCHEDULE I
MORTGAGE LOAN SCHEDULE
<PAGE>
-2-
SCHEDULE II
MORTGAGE LOAN SCHEDULE INFORMATION
Each Mortgage Loan shall be identified by at least the following details, among
others, set forth as to each Mortgage Loan:
(i) the loan number and name of the Mortgagor;
(ii) the street address (including city, state and zip code) of
the Mortgaged Property;
(iii) the Mortgage Rate as stated on the face of the Mortgage Note;
(iv) the original term and Stated Maturity Date;
(v) the original principal balance;
(vi) the first Due Date following the Cut-Off Date;
(vii) the Scheduled Payment in effect as of the Cut-Off Date;
(viii) the Cut-Off Date Principal Balance;
(ix) the original and remaining amortization terms;
(x) whether the Mortgage Loan is a Balloon Mortgage Loan;
(xi) whether the Mortgage Loan is a Cross-Collateralized Mortgage
Loan; and
(xii) the Servicing Fee Rate (for such period as the Mortgage
Loan is not a Specially Serviced Mortgage Loan or an REO
Loan).
Such schedule shall also set forth the total of the amounts
described under (viii) above for all of the Mortgage Loans. Such schedule may be
in the form of more than one list, collectively setting forth all of the
information required.
<PAGE>
-3-
SCHEDULE III
INFORMATION TO BE INCLUDED IN DATABASE
Issue Id
Sub Issue Id
Period
Collateral Id
Beginning Principal Balance
Scheduled Principal
Deferred Interest
Prepayment Code
Prepayment
Prepayment Date
Other Principal Adjustment
Ending Principal Balance
Current Gross Rate
Scheduled P&I
Interest Paid Through Date
Remaining Term
Maturity Date
Property Inspection Date
Current Occupancy (and rent roll date)
General Property Condition (P/G/E)
Revenue (Last Full Year)
Expenses (Last Full Year)
NOI (Last Full Year)
DSCR (Last Full Year)
Date of Last Annual Statement
Revenue (YTD)
Expenses (YTD)
NOI (YTD)
DSCR (YTD)
EXHIBIT 99.1
<PAGE>
MORTGAGE LOAN PURCHASE AGREEMENT
AGREEMENT, dated October 18, 1996, between Structured Asset
Securities Corporation, a corporation organized under the laws of the State of
Delaware (the "Depositor"), and Lehman Brothers Holdings Inc., doing business as
Lehman Capital, A Division of Lehman Brothers Holdings Inc., a corporation
organized under the laws of the State of Delaware (the "Seller").
PRELIMINARY STATEMENT
The Seller intends to sell the multifamily and commercial
mortgage loans (the "Mortgage Loans") described on the schedule (the "Mortgage
Loan Schedule") annexed hereto as Exhibit 1 to the Depositor, on a servicing
released basis, but net of any Retained Yield (as defined herein), as provided
herein. The Depositor intends to transfer the Mortgage Loans to a trust (the
"Trust") designated as LB Commercial Conduit Mortgage Trust II, the beneficial
ownership of which will be evidenced by several classes (each, a "Class") of
multiclass pass-through certificates (the "Certificates"). Three "real estate
mortgage investment conduit" ("REMIC") elections will be made with respect to
the assets of the Trust (such assets, collectively, the "Trust Fund"). The Trust
will be created and the Certificates will be issued pursuant to a Trust
Agreement (the "Trust Agreement"), dated as of October 1, 1996 (the "Cutoff
Date"), among the Depositor, LaSalle National Bank as trustee (the "Trustee"),
GMAC Commercial Mortgage Corporation as servicer (the "Servicer"), CRIIMI MAE
Services Limited Partnership as special servicer (the "Special Servicer") and
ABN AMRO Bank N.V. as fiscal agent (the "Fiscal Agent"). Six Classes of the
Certificates (the "Publicly Offered Certificates") will be assigned an
investment grade rating by one or more nationally recognized rating agencies
specified by the Depositor (individually and collectively, the "Rating Agency"),
will be registered under the Securities Act of 1933, as amended (the "Securities
Act") pursuant to the Registration Statement (as defined below), will be
purchased by Lehman Brothers Inc. (the "Underwriter") and will be publicly
offered pursuant to the Prospectus (as defined below). The remaining Classes of
Certificates (the "Private Certificates"), including, without limitation, those
evidencing "residual interests" in the REMICs created under the Trust Agreement
for federal income tax purposes (the "REMIC Residual Certificates"), will be
assigned below investment grade ratings by the Rating Agency or will be unrated,
will be purchased by the Underwriter from the Depositor and will be privately
placed by the Underwriter with various institutional investors pursuant to the
Private Placement Memorandum (as defined below). As used in this Mortgage Loan
Purchase Agreement (the "Agreement" or the "Mortgage Loan Purchase Agreement"),
(i) "Registration Statement" means the Depositor's registration statement,
registration number 33-96378, on Form S-3, (ii) "Base Prospectus" means the
prospectus included in the Registration Statement at the time it became
effective, or as subsequently filed with the commission pursuant to paragraph
(b) of Rule 424 of the Securities Act, (iii) "Prospectus" means the Base
Prospectus, together with the prospectus supplement dated October 18, 1996
specifically relating to the Publicly Offered Certificates (a "Prospectus
Supplement"), as filed with, or mailed for filing to, the commission pursuant to
paragraph (b) of Rule 424 of the Securities Act; (iv) "Preliminary Prospectus"
means any preliminary form of the Prospectus that has heretofore been filed
pursuant to paragraph (b) of Rule 424 of the Securities Act; (v) "Private
Placement Memorandum" means the private placement memorandum dated October 18,
1996 (including all exhibits thereto) relating to the Private Certificates; and
(vi) "Disclosure
<PAGE>
-2-
Documents" means the Private Placement Memorandum together with the Prospectus,
the Registration Statement and any Preliminary Prospectus. All capitalized terms
used but not defined herein shall have the meanings assigned to them in the
Trust Agreement.
The parties hereto agree as follows:
SECTION 1. AGREEMENT TO PURCHASE. The Seller agrees to sell,
and the Depositor agrees to purchase, on a servicing released basis, but net of
any Retained Yield, the Mortgage Loans. The Mortgage Loans will have an
aggregate principal balance as of the close of business on the Cut-off Date,
after giving effect to any payments due on or before such date, whether or not
received, of $397,202,489.27 (subject to a variance of plus or minus five
percent (5%) of such amount, the "Initial Pool Balance"). The purchase and sale
of the Mortgage Loans shall take place on October 30, 1996 or such other date as
shall be mutually acceptable to the parties hereto (the "Closing Date"). The
purchase price to be paid by the Depositor for the Mortgage Loans shall equal
______% of the Initial Pool Balance and such purchase price shall be paid to the
Seller by wire transfer in immediately available funds on the Closing Date.
The Depositor will assign to the Trustee, pursuant to the
Trust Agreement, all of its right, title and interest in and to the Mortgage
Loans, which shall be net of any Retained Yield, and the Trustee shall succeed
to such right, title and interest in and to the Mortgage Loans.
SECTION 2. CONVEYANCE OF MORTGAGE LOANS.
(a) Effective as of the Closing Date, subject only to receipt
of the consideration referred to in Section 1 hereof, the Seller does hereby
transfer, assign, set over and otherwise convey to the Depositor, without
recourse, all the right, title and interest of the Seller in and to the Mortgage
Loans, which shall be net of any Retained Yield. The Mortgage Loan Schedule
shall conform to the requirements of this Agreement and the Trust Agreement. In
connection with such transfer and assignment, the Seller shall deliver to the
Trustee, on behalf of the Depositor, at least 2 days prior to the Closing Date,
the documents and/or instruments set forth in Section 2.01(b) of the Trust
Agreement with respect to each Mortgage Loan (each, a "Mortgage File").
(b) All Mortgage Files so delivered are to be held by the
Trustee in escrow at all times prior to the Closing Date.
(c) The Seller agrees to comply with the provisions of
Sections 2.01(c) and 2.01(e) of the Trust Agreement, including, but not limited
to those relating to recordation, as if it were the Depositor thereunder.
SECTION 3. EXAMINATION OF MORTGAGE FILES AND DUE DILIGENCE
REVIEW. The Seller shall reasonably cooperate with the Depositor in its
examination of the credit files, underwriting documentation and Mortgage Files
for the Mortgage Loans and its due diligence
<PAGE>
-3-
review of the Mortgage Loans. If the Depositor identifies any Mortgage Loans
that, in its sole discretion, do not conform to its requirements, including, but
not limited to, requirements relating to loan quality, loan documentation and
compliance with underwriting standards that have been agreed upon by the
Depositor and the Seller and are described in the Prospectus, or for any other
reason, decides, in its sole discretion, to exclude any Mortgage Loan from this
transaction, such Mortgage Loans shall be deleted from the Mortgage Loan
Schedule. The Depositor may, at its option and without notice to the Seller,
accept all or part of the Mortgage Loans without conducting any partial or
complete examination thereof. The fact that the Depositor has conducted or has
failed to conduct any partial or complete examination of the credit files,
underwriting documentation or Mortgage Files for the Mortgage Loans shall not
affect the right of the Depositor, the Trustee or any holder of a Certificate to
demand repurchase of the Mortgage Loans or to obtain other relief as
contemplated by this Agreement or to be provided under the Trust Agreement.
On or prior to the Closing Date, the Seller shall allow
representatives of the Depositor, the Underwriter and the Rating Agency to
examine and audit all books, records and files pertaining to the Mortgage Loans,
the Seller's underwriting procedures and the Seller's ability to perform or
observe all of the terms, covenants and conditions of this Agreement. Such
examinations and audits shall take place at one or more offices of the Seller
during normal business hours and shall not be conducted in a manner that is
disruptive to the Seller's normal business operations. In the course of such
examinations and audits, the Seller will make available to such representatives
of the Depositor, the Underwriter and the Rating Agency reasonably adequate
facilities, as well as the assistance of a sufficient number of knowledgeable
and responsible individuals who are familiar with the Mortgage Loans and the
terms of this Agreement, and the Seller shall reasonably cooperate fully with
any such examination and audit in all respects. On or prior to the Closing Date,
the Seller shall provide the Depositor or the Underwriter with all material
information regarding the Seller's financial condition as the Depositor or the
Underwriter shall reasonably request and access to knowledgeable financial or
accounting officers for the purpose of answering questions with respect to the
Seller's financial condition or other developments affecting the Seller.
The Depositor shall keep, and shall cause the Underwriter to
keep, confidential any information regarding the Seller that has been delivered
into the Depositor's or the Underwriter's possession and that is not otherwise
publicly available; PROVIDED, HOWEVER, that such information shall not be kept
confidential (and the right to require confidentiality under any confidentiality
agreement is hereby waived) to the extent such information is required to be
included in the Prospectus or the Depositor or the Underwriter is required by
law or court order to disclose such information.
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
SELLER.
(a) The Seller represents, warrants and agrees, as of the date
hereof, that:
<PAGE>
-4-
(i) The Seller's Information (as hereinafter defined)
furnished to the Depositor for inclusion in the Private Placement
Memorandum and the Prospectus Supplement does not contain an untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading.
(ii) The execution and delivery by the Seller of this
Agreement has been duly authorized by all necessary corporate action on
the part of the Seller; neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated
herein, nor compliance with the provisions of this Agreement, will
conflict with or result in a breach of, or constitute a default under,
(A) any of the provisions of any law, governmental rule, regulation,
judgment, decree or order binding on the Seller or its properties, (B)
the organizational documents of the Seller, or (C) the terms of any
indenture or other agreement or instrument to which the Seller is a
party or by which it is bound.
(iii) The execution, delivery and performance by the Seller of
this Agreement and the consummation of the transactions contemplated
hereby do not require the consent or approval of, the giving of notice
to, the registration with, or the taking or any other action in respect
of, any state, federal or other governmental authority or agency,
except such as have been obtained, given, effected or taken prior to
the date hereof.
(iv) This Agreement has been duly and validly executed and
delivered by the Seller and is a valid and legally binding obligation
of the Seller, enforceable in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency or other laws
affecting the enforcement of creditor's rights generally, by general
principles of equity, and by public policy considerations, to the
extent that such public policy considerations limit the enforceability
of any provisions of this Agreement that purport to provide
indemnification for securities law liabilities.
(v) The Seller has been duly incorporated, is validly existing
and in good standing under the laws of the State of Delaware and is
duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which its ownership of property or
the conduct of its business requires such qualification and has all
corporate power and authority necessary to own or hold its properties
and to conduct the business in which it is engaged, except such
jurisdictions, if any, in which the failure to be so qualified will not
have a material adverse affect on its business or properties.
(vi) There are no actions, suits or proceedings pending or, to
the best of Seller's knowledge, threatened or likely to be asserted
against or affecting the Seller, before or by a court, administrative
agency, arbitrator or governmental body (A) with respect to any of the
transactions contemplated hereby or (B) with respect to any other
matter which in the judgment of the Seller will be determined adversely
to the Seller and will, if determined adversely to the Seller,
materially and adversely affect it or its business,
<PAGE>
-5-
assets, operations or condition, financial or otherwise, or adversely
affect its ability to perform its obligations under this Agreement.
(b) To induce the Depositor to enter into this Agreement, the
Seller hereby makes for the benefit of the Depositor and its assigns as of the
date hereof (or as of such other date specifically set forth in the particular
representation and warranty) each of the representations and warranties set
forth in Section 2.03(b) (with respect to each Mortgage Loan) of the Trust
Agreement as if it were the Depositor thereunder.
SECTION 5. REPURCHASES. The Seller agrees to repurchase from
the Depositor, pursuant to the terms of the Trust Agreement, any Mortgage Loan
that the Depositor is obligated to repurchase under Article II of the Trust
Agreement. The obligation of the Seller set forth in the previous sentence to
repurchase a Mortgage Loan constitutes the sole remedy of the Depositor with
respect to any breach of a representation, warranty or covenant made by the
Seller pursuant to Section 2(a) or Section 4(b) hereof.
If the Seller repurchases any Mortgage Loan pursuant to this
Section 5, the Depositor or its assignee, following receipt by the Trustee of
the Purchase Price therefor, shall deliver or cause to be delivered to the
Seller all Mortgage Loan documents with respect to such Mortgage Loan, and each
document that constitutes a part of the Mortgage File that was endorsed or
assigned to the Trustee shall be endorsed and assigned to the Seller in the same
manner.
SECTION 6. CLOSING. The closing of the sale of the Mortgage
Loans shall be held at the offices of Thacher Proffitt & Wood, Two World Trade
Center, New York, New York 10048 at 10:00 a.m., New York City time, on the
Closing Date.
The closing shall be subject to each of the following
conditions:
(a) All of the representations and warranties of the Seller
specified in Section 4 of this Agreement shall be true
and correct as of the Closing Date.
(b) All Closing Documents specified in Section 7 of this
Agreement, in such forms as are agreed upon and
acceptable to the Depositor, shall be duly executed and
delivered by all signatories as required pursuant to
the respective terms thereof.
(c) The Seller shall have delivered and released to the
Trustee all documents required to be delivered to the
Trustee pursuant to Section 2 of this Agreement.
(d) The result of the examination and audit performed by
the Depositor and its affiliates pursuant to Section 3
hereof shall be satisfactory to the Depositor and its
affiliates in their sole determination.
<PAGE>
-6-
(e) All other terms and conditions of this Agreement
required to be complied with by the Seller on or before
the Closing Date shall have been complied with and the
Seller shall have the ability to comply with all terms
and conditions and perform all duties and obligations
required to be complied with or performed by the Seller
after the Closing Date.
(f) The Seller shall have paid all fees and expenses
payable by it to the Depositor or third parties.
(g) The Certificates to be so rated shall have been
assigned by the Rating Agency the ratings set forth in
the Prospectus Supplement and the Private Placement
Memorandum.
All parties agree to use their best efforts to perform their
respective obligations hereunder in a manner that will enable the Depositor to
purchase the Mortgage Loans on the Closing Date. If any of the foregoing
conditions is not satisfied by the Seller, other than as a result of bad faith
nonperformance on the part of the Depositor, the Depositor shall be entitled to
terminate this Agreement (exclusive of any payment or reimbursement obligations
of the Seller hereunder).
SECTION 7. CLOSING DOCUMENTS. The "Closing Documents" shall
consist of the following:
(a) This Agreement duly executed by the Depositor and the
Seller.
(b) Certificates of the Seller, executed by a duly
authorized officer of the Seller and dated the Closing
Date, and upon which the Depositor and the Underwriter
may rely, substantially similar to the forms attached
hereto as Exhibits 2A and 2B.
(c) Certificates from an officer of the Seller, in his or
her individual capacity, dated the Closing Date, and
upon which the Depositor and the Underwriter may rely,
substantially similar to the forms attached hereto as
Exhibits 3A and 3B.
(d) A favorable opinion of counsel to the Seller, dated the
Closing Date, and addressed to the Depositor and the
Underwriter, reasonably acceptable to the Depositor,
the Underwriter and their respective counsel.
(e) Such other certificates and opinions of counsel as the
Rating Agency may request in connection with the sale
of the Mortgage Loans by the Seller to the Depositor or
the Seller's execution and delivery of, or performance
under, this Agreement.
<PAGE>
-7-
(f) A letter or letters from Deloitte & Touche LLP,
certified public accountants, dated the date hereof, to
the effect that they have performed certain specified
procedures as a result of which they determined that
certain information of an accounting, financial or
statistical nature set forth in each of the Prospectus
Supplement and the Private Placement Memorandum under
the caption "Description of the Mortgage Pool" agrees
with the records of the Seller.
(g) Such further certificates, opinions and documents as
the Depositor or the Underwriter may reasonably
request.
SECTION 8. INDEMNIFICATION.
(a) The Seller shall indemnify and hold harmless the
Depositor, the Underwriter, their respective officers and directors, and each
person, if any, who controls the Depositor or the Underwriter within the meaning
of either Section 15 of the Securities Act or Section 20 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), against any and all
losses, claims, damages, liabilities or expenses (including, without limitation,
the reasonable cost of investigating and defending against any claims therefor
and legal fees and disbursements incurred in connection therewith except as
otherwise provided below), joint or several, to which they 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, liabilities or expenses (or actions in respect thereof)
arise out of or are based in whole or in part upon any untrue statement or
alleged untrue statement of a material fact contained in any Disclosure
Document, or in any amendment thereof or supplement thereto, or arise out of or
are based upon any omission or alleged omission to state therein a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, which untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon any
information furnished to the Depositor or any of its affiliates by the Seller or
approved by the Seller, or upon any document delivered to the Depositor or any
of its affiliates by the Seller, or upon any of the representations, warranties,
covenants or agreements of the Seller as set forth in this Agreement
(collectively, the "Seller's Information"), it being acknowledged that the
statements set forth in each of the Prospectus Supplement and the Private
Placement Memorandum under the caption "Description of the Mortgage Pool" or
elsewhere in the Prospectus and the Private Placement Memorandum with respect to
the subjects discussed under such caption, to the extent relating to or based
(in whole or in part) on information relating to the nature, quality and/or
characteristics of the Mortgage Loans, the Mortgaged Properties, the Mortgagors
and/or the Seller, were the only statements made in reliance upon information
furnished or approved by the Seller, or upon documents delivered to the
Depositor or its affiliates by the Seller, or upon any of the representations,
warranties, covenants or agreements of the Seller as set forth in this
Agreement. The foregoing indemnification is in addition to any liability the
Seller may otherwise have to the indemnified parties.
<PAGE>
-8-
(b) Promptly after receipt by an indemnified party under this
Section of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
Seller under this Section, notify the Seller in writing of the claim or
commencement of that action, provided that failure to so notify the Seller shall
not relieve the Seller from any liability that it may have to an indemnified
party otherwise than under this Section. If any such claim or action shall be
brought against an indemnified party, and it shall notify the Seller thereof,
the Seller shall be entitled to participate therein and, to the extent that it
wishes, to assume the defense thereof with counsel reasonably satisfactory to
the indemnified party. After notice from the Seller to an indemnified party that
it will assume the defense of any such claim or action, the Seller will not be
liable to the indemnified party under this Section for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof; provided that the Depositor shall have the right to employ
counsel to represent the Depositor, the Underwriter and the officers, directors
and controlling persons referred to in subsection (a) above who may be subject
to liability arising out of any claim or action in respect of which indemnity
may be sought by the Depositor or the Underwriter against the Seller under this
Section, if (i) in the reasonable judgment of the Depositor, there may be legal
defenses available to the Depositor, the Underwriter, and those officers,
directors and controlling persons, different from or in addition to those
available to the Seller, or there is a conflict of interest between the
Depositor, the Underwriter and those officers, directors and controlling
persons, on the one hand, and the Seller, on the other, or (ii) the Seller shall
fail to select counsel reasonably satisfactory to the indemnified party or
parties, and in such event the fees and expenses of such separate counsel shall
be paid by the Seller. In no event shall the Seller be liable for the fees and
expenses of more than one separate firm of attorneys for the Depositor, the
Underwriter and the officers, directors and controlling persons referred to in
subsection (a) above in connection with any other action or separate but similar
or related actions in the same jurisdiction arising out of the same general
allegations or circumstances.
(c) If the indemnification provided for in Section 8(a) shall
for any reason be unavailable to an indemnified party under Section 8(a) or
8(b), as the case may be, in respect of any loss, claim, damage or liability, or
any action in respect thereof, referred to therein, then the Seller shall, in
lieu of indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim, damage or
liability, or action in respect thereof, (i) in such proportion as shall be
appropriate to reflect the benefits received by the Seller from its sale of the
Mortgage Loans relative to the benefits received by the Depositor and the
Underwriter, collectively, from the offering of the Certificates or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the fault of the Seller relative to the
fault of the Depositor and the Underwriter, collectively, with respect to the
statements or omissions that resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Seller from such loan
sale, on the one hand, and by the Depositor and the Underwriter, collectively,
from such offering, on the other, shall be deemed to be in the same proportion
as the total net proceeds from the sale of the Mortgage Loans (before deducting
<PAGE>
-9-
expenses) received by the Seller bear to the total net proceeds from the sale of
the Certificates to independent third parties (before deducting expenses)
received by the Depositor and/or the Underwriter. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Seller, the Depositor or the Underwriter, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Seller and the
Depositor agree that it would not be just and equitable if contributions
pursuant to this Section 8(c) were to be determined by pro rata allocation or by
any other method of allocation that does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 8(c) shall be deemed to include, for
purposes of this Section 8(c), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. 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.
(d) The indemnity and contribution agreements contained in
this Section 8 shall remain operative and in full force and effect, regardless
of (i) any termination of this Agreement, (ii) any investigation made by the
Depositor, the Underwriter, any of their respective directors or officers, or
any person controlling the Depositor or the Underwriter, and (iii) acceptance of
and payment for any of the Mortgage Loans.
SECTION 9. CERTAIN MATTERS CONCERNING THE RETAINED YIELD.
(a) The Depositor shall not sell, pledge, assign or dispose of
any Mortgage Loan except subject to the Retained Yield Holder's and its
successors' and assigns' interest in and right to the Retained Yield, if any, in
respect of such loan. The person entitled to receive the Retained Yield in
respect of any Mortgage Loan is herein referred to as the "Retained Yield
Holder" in respect of such Retained Yield. The "Retained Yield Holder" is the
holder of the right to receive the Retained Yield or any such subsequent holder.
(b) The Depositor shall cause the Trust Agreement to provide
that the Trustee shall furnish to each Retained Yield Holder any and all reports
(including, without limitation, monthly trustee statements) regarding the
performance of the related Mortgage Loans that are provided to the
Certificateholders. The Retained Yield Holder shall be a named third party
beneficiary to the Trust Agreement for the purposes of enforcing its right to
the Retained Yield in accordance with the terms hereof and enforcing the right
to receive such reports.
(c) "Retained Yield" shall mean, with respect to each Mortgage
Loan indicated on the Mortgage Loan Schedule as having a Retained Yield Rate in
excess of 0.00% per annum, the sum of (i) interest accrued at the related
Retained Yield Rate on the Scheduled Principal Balance from time to time of such
Mortgage Loan calculated and payable monthly from interest received on the
Mortgage Loan, from the interest portion of Scheduled Payments, Insurance
<PAGE>
-10-
Proceeds, Condemnation Proceeds, other Liquidation Proceeds, or otherwise, (ii)
Prepayment Premiums received in respect of such Mortgage Loan, net of the
portion thereof equal to the related Prepayment Premium calculated at the
related Mortgage Rate minus the related Retained Yield Rate, and (iii) in the
case of the Mortgage Loans identified on the Mortgage Loan Schedule as loan
numbers 63 and 109, late payment charges received in respect of such Mortgage
Loans.
"Retained Yield Rate" shall mean, with respect to any Mortgage
Loan, the per annum rate set forth as such in the Mortgage Loan Schedule;
provided, however, that in the event that a Scheduled Payment is modified by the
Servicer or Special Servicer or by the related mortgagee or in connection with a
bankruptcy or similar proceeding involving the related Mortgagor, the Retained
Yield Rate shall be increased or decreased on a pro rata basis with amounts
payable to the related mortgagee based on the ratio the related Mortgage Rate
(net of the related Retained Yield Rate) bears to the related Retained Yield
Rate immediately prior to such modification.
(d) Payments or other collections of interest received in
respect of any Mortgage Loan as to which there is Retained Yield, if less than
the full amount of interest that is due and owing on such Mortgage Loan, shall
be applied first, to unpaid Servicing Fees, Special Servicing Basic Fees and
Special Servicing Supplemental Fees, and second, on a pro rata basis to the
Retained Yield Holder and the Depositor or its designee, in the same proportions
as the related Retained Yield Rate and the related Mortgage Rate (net of the
related Retained Yield Rate), respectively, bear to the related Mortgage Rate.
Except as expressly set forth above, no Retained Yield Holder
shall be entitled to any late payment fees or penalty interest received in
connection with any Mortgage Loan.
SECTION 10. RETAINED YIELD HOLDER'S RIGHT TO RETAINED YIELD
ABSOLUTE. The related Retained Yield Holder's right to receive the Retained
Yield with respect to each Mortgage Loan shall be absolute and unconditional,
and shall survive notwithstanding the consummation of the transactions
contemplated by this Agreement. The related Retained Yield Holder's right to
receive the Retained Yield with respect to each Mortgage Loan shall not be
subject to offset or counterclaim, whether or not such right has been assigned
in whole or in part, notwithstanding any breach of any representation or
warranty of the Seller under this Agreement or any default by the Seller of any
of its obligations or covenants under this Agreement. The related Retained Yield
Holder shall have the right to assign any or all of its rights in and to the
Retained Yield in respect of a Mortgage Loan without the consent of the
Depositor or any subsequent owner and holder of such Mortgage Loan or the holder
of any beneficial ownership interest therein; provided, however, that Retained
Yield Holder shall provide written notice of any such transfer to the Depositor.
SECTION 11. COSTS. The Seller shall pay (or shall reimburse
the Depositor to the extent that the Depositor has paid) the aggregate of the
following amounts: (a) the costs and expenses of printing (or otherwise
reproducing) and delivering any Disclosure Document; (b) the
<PAGE>
-11-
initial fees, costs and expenses of the Servicer, the Special Servicer, the
Trustee and the Fiscal Agent (including, without limitation, reasonable
attorneys' fees); (c) the filing fee charged by the Securities and Exchange
Commission for registration of the Publicly Offered Certificates; (d) the fees
charged by the Rating Agency to rate the Certificates so rated; (e) the expense
of recording or filing any document constituting part of a Mortgage File as
contemplated by Section 2 hereof; (f) all attorneys' fees and accountants' fees
and expenses incurred by the Seller, the Depositor and/or the Underwriter in
connection with the transfer of the Mortgage Loans from the Seller to or at the
direction of the Depositor, the issuance and offering of the Certificates and
the other transactions contemplated hereby; and (g) the costs and expenses of
the Depositor's and the Underwriter's due diligence review of the Mortgage Loans
and/or the Mortgaged Properties. All other costs and expenses in connection with
the transactions contemplated hereunder shall be borne by the party incurring
such expense.
SECTION 12. NOTICES. All communications provided for or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if (a) personally delivered, (b) mailed by registered or certified mail,
postage prepaid and received by the addressee, (c) sent by express courier
delivery service and received by the addressee, or (d) transmitted by telex or
facsimile transmission (or any other type of electronic transmission agreed upon
by the parties) and confirmed by a writing delivered by any of the means
described in (a), (b) or (c): (i) if to the Depositor, addressed to Structured
Asset Securities Corporation at 200 Vesey Street, New York, New York 10285,
Attention: ____________________ (or such other address as may hereafter be
furnished in writing by the Depositor); and (ii) if to the Seller, addressed to
Lehman Brothers Holdings Inc., doing business as Lehman Capital, A Division of
Lehman Brothers Holdings Inc., at Three World Financial Center, New York, New
York 10285, Attention: __________________ (or to such other address as may
hereafter be furnished in writing by the Seller).
SECTION 13. SEVERABILITY OF PROVISIONS. Any part, provision,
representation, warranty or covenant of this Agreement that is prohibited or
which is held to be void or unenforceable shall be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof. Any part, provision, representation, warranty or covenant of
this Agreement that is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by applicable law, the parties
hereto waive any provision of law which prohibits or renders void or
unenforceable any provision hereof.
SECTION 14. FURTHER ASSURANCES. The Seller and the Depositor
each agrees to execute and deliver such instruments and take such actions as the
other may, from time to time, reasonably request in order to effectuate the
purpose and to carry out the terms of this Agreement and the Trust Agreement.
<PAGE>
-12-
SECTION 15. SURVIVAL. The Seller agrees that the
representations, warranties and agreements made by it herein and in any
certificate or other instrument delivered pursuant hereto shall be deemed to be
relied upon by the Depositor, notwithstanding any investigation heretofore or
hereafter made by the Depositor or on its behalf, and that the representations,
warranties and agreements made by the Seller herein or in any such certificate
or other instrument shall survive the delivery of and payment for the Mortgage
Loans and shall continue in full force and effect, notwithstanding any
restrictive or qualified endorsement on the Mortgage Notes and notwithstanding
subsequent termination of this Agreement.
SECTION 16. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS,
DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE
OF NEW YORK. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AGREEMENT.
SECTION 17. BENEFITS OF MORTGAGE LOAN PURCHASE AGREEMENT.
Subject to the foregoing, this Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and assigns, the
Underwriter and its successors and, with respect to Section 8 hereof, each of
the officers, directors and controlling persons referred to therein. Nothing in
this Agreement, express or implied, shall give to any person, other than the
parties hereto and their respective successors and permitted assigns hereunder,
the Depositor and its successors and, with respect to Section 8 hereof, each of
the officers, directors and controlling persons referred to therein, any benefit
or any legal or equitable right, remedy or claim under this Agreement.
SECTION 18. MISCELLANEOUS. This Agreement may be executed in
two or more counterparts, each of which when so executed and delivered shall be
an original, but all of which together shall constitute one and the same
instrument. This Agreement supersedes all prior agreements and understandings
relating to the subject matter hereof. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought. The headings in this
Agreement are for purposes of reference only and shall not limit or otherwise
affect the meaning hereof. The rights and obligations of the Seller under this
Agreement shall not be assigned by the Seller without the prior written consent
of the Depositor, except that any person into which the Seller may be merged or
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Seller is a party, or any person succeeding to the
entire business of the Seller shall be the successor to the Seller hereunder.
The Depositor has the right to assign its interest under this Agreement, in
whole or in part, as may be required to effect the purposes of the Trust
Agreement, and the assignee shall succeed to the rights and obligations
hereunder of the Depositor.
<PAGE>
IN WITNESS WHEREOF, the Depositor and the Seller have caused
their names to be signed by their respective duly authorized officers as of the
date first above written.
STRUCTURED ASSET SECURITIES
CORPORATION
By:__________________________________
Name:
Title:
LEHMAN BROTHERS HOLDINGS INC., DOING
BUSINESS AS LEHMAN CAPITAL, A DIVISION OF
LEHMAN BROTHERS HOLDINGS INC.
By:__________________________________
Name:
Title:
<PAGE>
EXHIBIT 1
MORTGAGE LOAN SCHEDULE
<PAGE>
<TABLE>
<CAPTION>
Loan Mortgage
Number Borrower Address City State Zip Rate (%)
<S> <C> <C> <C> <C> <C>
1 Congressional North Assoc Ltd. 1400 Block of Rockville Pike Rockville MD 20849 8.680
2 Johnson Hotel Company 7050 Johnson Industrial Drive Pleasanton CA 94566 10.500
3 SR Properties Ltd. 1800 S. Jefferson Davis Hwy Crystal City VA 22202 9.750
4 Concord Shopping Plaza 11241 Southwest 40th Street Miami FL 33165 9.095
5 Mableton Village Assoc, LLC 5590 Mableton Parkway Mableton GA 30059 9.220
6 Arlington Plaza Ltd Ptshp 150 East 286 West Rand Road Arlington Heights IL 60005 9.380
7 Wiston XIV Limited Partnership 10535 Ellison Plaza Omaha NE 68134 9.250
8 CHA Holdings Ltd. Partnership 11284 Grand Oak Drive Grand Blanc MI 48439 8.500
9 LMX Doubletree Center Inc. Route 47 - North Delsea Drive Glassboro NJ 08028 8.790
10 Sunkist Shopping Center, LTD 13847-13965 East Amar Road La Puente CA 91746 9.230
11 Gem Commercial Assoc., Ltd. 2985-3017 Berlin Turnpike Newington CT 06111 9.230
12 Grand Street Rlty, LLC Grand & Monmouth Streets Jersey City NJ 07302 9.250
13 First Providence Htl Investors 21 Atwells Avenue Providence RI 02903 9.250
14 Haddonfield Manor L.L.C. 126 Kent Avenue Haddonfield NJ 08033 8.740
15 Malcai Evergreen, LLC 5400 West Cheyenne Las Vegas NV 89108 8.650
16 First Warwick Hotel Investors 1940 Post Road Warwick RI 02886 10.250
17 WAK/B.G. Partnership 2540 Bahama Dr. Dallas TX 75211 8.050
18 Tourist Plaza Joint Venture 8510-8560 International Drive Orlando FL 32819 9.740
19 Ocean Drive Associates, LTD. 626-640-650 Ocean Drive Miami FL 33139 10.375
20 Sioux City Hospitality, L.P. (A) 707 Fourth Street Sioux City IA 51101 8.625
21 Servico Lansing, Inc. (B) 7501 W.Saginaw Highway Lansing MI 48917 9.875
22 Cotswold Village Assoc., LLC 1075 North Hairston Road Stone Mountain GA 30083 7.900
23 Grandview II, LLP 5209 East 126th St Grandview MO 64030 8.100
24 Cegrove Associates, L.L.C. 120 Cedar Grove Lane Franklin Township NJ 08873 9.060
25 Poplar Springs Apts of AL LLC 6095 West Lee's Mill Road College Park GA 30349 8.770
26 Lakeside Apartments, L.L.C. 5577 Riverdale Road College Park GA 30349 8.590
27 Homosassa Springs, an Illinois 3902-3956 S. Suncoast Boulevard Homosassa Springs FL 34448 8.900
28 Servico Omaha Central, Inc. (B) 3650 72nd Street Omaha NE 68124 9.875
29 Servico Wichita, Inc. (B) 5500 West Kellogg Wichita KS 67209 9.875
30 Mount Laurel Inn Limited Partn 4000 Crawford Lane Mt. Laurel NJ 08054 9.250
31 St. Andrews Developement Corp. 600-620 State Street Los Angeles CA 90005 8.120
32 Arbor House Louisville Associa 1 Trafalgar Square Louisville KY 40218 8.290
33 King Charles Associates, LP 237 Meeting Street Charleston SC 29401 9.125
34 Skybuck, Inc. 645 North Country Club Dr. Mesa AZ 85201 7.910
35 Homewood Assoc. Ltd. So.Governors Hwy/183rd Street Homewood IL 60430 9.210
36 1075 Hospitality, L.P. (A) 1075 Stevens Creek Augusta GA 30907 8.625
37 GJSI - Texas, Inc. 12200-12300 Ford Road Farmers Branch TX 75234 8.820
38 Ludren Park, LLC 12101 Fondren Rd. Houston TX 77071 8.170
39 McQueen Village, LTD 601 McQueen Village Road Prattville AL 36066 9.164
40 Chateau Estates Limited Partnr 103 Hart Street Taunton MA 02780 8.680
41 American Self Storage Assoc. 1985 East Bayshore Blvd. East Palo Alto CA 94303 9.540
42 Canal House Historic Associate 4312 Main Street Philadelphia PA 19127 8.750
43 581 Second Street Shoppes Ltd 581 Second Street Manchester NH 03102 9.570
44 Uptown 3414-3428 Connecticut A (C) 3414-3428 Connecticut Ave. N.W. Washington DC 20037 9.000
45 Servico West Des Moines, Inc. (B) 11040 Hickman Road Des Moines IA 50325 9.875
</TABLE>
<TABLE>
<CAPTION>
First
Due
Date Cut-off Orig.
Orig. Original after Date Amort.
Loan Terms Maturity Principal Cut-off Scheduled Principal Term
Number Borrower (mos.) Date Balance Date Payment Balance (mos)
<S> <C> <C> <C> <C> <C> <C> <C>
1 Congressional North Assoc Ltd. 84 9/1/03 $16,950,000 11/1/96 $132,499.21 $16,940,105.79 360
2 Johnson Hotel Company 120 7/1/06 $16,250,000 11/1/96 $153,429.53 $16,215,977.94 300
3 SR Properties Ltd. 84 6/1/03 $14,900,000 11/1/96 $132,779.48 $14,852,557.78 300
4 Concord Shopping Plaza 84 6/1/03 $12,350,000 11/1/96 $100,216.24 $12,323,243.60 360
5 Mableton Village Assoc, LLC 120 8/1/06 $10,670,000 11/1/96 $87,547.60 $10,658,824.37 360
6 Arlington Plaza Ltd Ptshp 120 8/1/06 $10,610,000 11/1/96 $90,169.92 $10,595,473.27 324
7 Wiston XIV Limited Partnership 84 5/1/02 $9,350,000 11/1/96 $80,071.70 $9,205,303.21 300
8 CHA Holdings Ltd. Partnership 120 12/1/05 $8,787,000 11/1/96 $67,564.43 $8,732,038.98 360
9 LMX Doubletree Center Inc. 84 12/1/02 $8,500,000 11/1/96 $67,113.09 $8,449,863.61 360
10 Sunkist Shopping Center, LTD 120 9/1/06 $8,400,000 11/1/96 $68,983.03 $8,395,626.97 360
11 Gem Commercial Assoc., Ltd. 120 9/1/06 $7,700,000 11/1/96 $65,835.17 $7,693,390.66 300
12 Grand Street Rlty, LLC 120 8/1/06 $7,615,000 11/1/96 $62,647.00 $7,607,073.48 360
13 First Providence Htl Investors 276 3/1/19 $7,500,000 11/1/96 $65,704.29 $7,443,589.39 276
14 Haddonfield Manor L.L.C. 120 6/1/05 $7,200,000 11/1/96 $57,960.78 $7,106,674.42 324
15 Malcai Evergreen, LLC 120 7/1/05 $6,250,000 11/1/96 $48,723.07 $6,192,068.01 360
16 First Warwick Hotel Investors 276 10/1/18 $6,200,000 11/1/96 $58,556.90 $6,129,569.38 276
17 WAK/B.G. Partnership 120 2/1/06 $6,150,000 11/1/96 $45,341.07 $6,116,543.79 360
18 Tourist Plaza Joint Venture 84 7/1/03 $6,000,000 11/1/96 $51,505.21 $5,991,515.88 360
19 Ocean Drive Associates, LTD. 120 8/1/06 $5,940,000 11/1/96 $55,554.94 $5,931,566.32 300
20 Sioux City Hospitality, L.P. (A) 84 2/1/03 $5,890,000 11/1/96 $49,142.14 $5,834,300.14 276
21 Servico Lansing, Inc. (B) 84 6/1/03 $5,687,000 11/1/96 $51,177.54 $5,669,269.56 300
22 Cotswold Village Assoc., LLC 120 2/1/06 $5,525,000 11/1/96 $40,156.00 $5,494,028.73 360
23 Grandview II, LLP 120 2/1/06 $5,510,000 11/1/96 $42,892.73 $5,463,306.15 300
24 Cegrove Associates, L.L.C. 84 8/1/02 $5,500,000 11/1/96 $44,492.00 $5,456,359.69 360
25 Poplar Springs Apts of AL LLC 120 6/1/06 $5,250,000 11/1/96 $41,376.79 $5,237,835.30 360
26 Lakeside Apartments, L.L.C. 120 4/1/06 $5,240,000 11/1/96 $40,625.77 $5,220,965.58 360
27 Homosassa Springs, an Illinois 84 7/1/03 $5,100,000 11/1/96 $40,669.33 $5,091,403.56 360
28 Servico Omaha Central, Inc. (B) 84 8/1/03 $4,905,000 11/1/96 $44,140.29 $4,897,416.47 300
29 Servico Wichita, Inc. (B) 84 8/1/03 $4,875,000 11/1/96 $43,870.32 $4,867,462.85 300
30 Mount Laurel Inn Limited Partn 120 1/1/06 $4,800,000 11/1/96 $42,050.75 $4,753,116.25 276
31 St. Andrews Developement Corp. 120 12/1/05 $4,400,000 11/1/96 $32,654.48 $4,370,295.21 360
32 Arbor House Louisville Associa 84 7/1/02 $4,300,000 11/1/96 $34,018.37 $4,232,088.10 300
33 King Charles Associates, LP 276 11/1/18 $4,150,000 11/1/96 $36,007.33 $4,099,145.32 276
34 Skybuck, Inc. 120 2/1/06 $4,080,000 11/1/96 $29,682.01 $4,057,174.49 360
35 Homewood Assoc. Ltd. 120 9/1/06 $4,030,000 11/1/96 $33,038.00 $4,027,892.25 360
36 1075 Hospitality, L.P. (A) 84 2/1/03 $3,970,000 11/1/96 $33,122.98 $3,932,456.93 276
37 GJSI - Texas, Inc. 84 12/1/02 $3,946,000 11/1/96 $31,240.69 $3,922,869.34 360
38 Ludren Park, LLC 180 1/1/11 $3,600,000 11/1/96 $28,192.02 $3,565,944.88 300
39 McQueen Village, LTD 180 7/1/11 $3,346,000 11/1/96 $27,318.45 $3,340,660.95 360
40 Chateau Estates Limited Partnr 120 10/1/05 $3,252,000 11/1/96 $26,582.00 $3,213,797.69 300
41 American Self Storage Assoc. 120 9/1/06 $3,215,000 11/1/96 $28,178.79 $3,212,380.46 300
42 Canal House Historic Associate 84 5/1/03 $3,216,000 11/1/96 $25,300.29 $3,206,612.65 360
43 581 Second Street Shoppes Ltd 84 8/1/03 $3,190,000 11/1/96 $27,335.22 $3,186,194.94 336
44 Uptown 3414-3428 Connecticut A (C) 120 4/1/06 $3,150,000 11/1/96 $26,435.00 $3,132,820.70 300
45 Servico West Des Moines, Inc. (B) 84 8/1/03 $3,060,000 11/1/96 $27,537.06 $3,055,268.99 300
</TABLE>
<TABLE>
<CAPTION>
Rem.
Amort.
Loan Term Balloon Servicing
Number Borrower (mos) Loan? Fee Rate(%)
<S> <C> <C> <C>
1 Congressional North Assoc Ltd. 359 Yes 0.237
2 Johnson Hotel Company 297 Yes 0.235
3 SR Properties Ltd. 296 Yes 0.235
4 Concord Shopping Plaza 356 Yes 0.237
5 Mableton Village Assoc, LLC 358 Yes 0.237
6 Arlington Plaza Ltd Ptshp 322 Yes 0.237
7 Wiston XIV Limited Partnership 283 Yes 0.237
8 CHA Holdings Ltd. Partnership 350 Yes 0.237
9 LMX Doubletree Center Inc. 350 Yes 0.237
10 Sunkist Shopping Center, LTD 359 Yes 0.237
11 Gem Commercial Assoc., Ltd. 299 Yes 0.237
12 Grand Street Rlty, LLC 358 Yes 0.237
13 First Providence Htl Investors 269 No 0.235
14 Haddonfield Manor L.L.C. 308 Yes 0.237
15 Malcai Evergreen, LLC 345 Yes 0.237
16 First Warwick Hotel Investors 264 No 0.235
17 WAK/B.G. Partnership 352 Yes 0.237
18 Tourist Plaza Joint Venture 357 Yes 0.237
19 Ocean Drive Associates, LTD. 298 Yes 0.235
20 Sioux City Hospitality, L.P. (A) 268 Yes 0.235
21 Servico Lansing, Inc. (B) 296 Yes 0.235
22 Cotswold Village Assoc., LLC 352 Yes 0.237
23 Grandview II, LLP 292 Yes 0.237
24 Cegrove Associates, L.L.C. 346 Yes 0.237
25 Poplar Springs Apts of AL LLC 356 Yes 0.237
26 Lakeside Apartments, L.L.C. 354 Yes 0.237
27 Homosassa Springs, an Illinois 357 Yes 0.237
28 Servico Omaha Central, Inc. (B) 298 Yes 0.235
29 Servico Wichita, Inc. (B) 298 Yes 0.235
30 Mount Laurel Inn Limited Partn 267 Yes 0.235
31 St. Andrews Developement Corp. 350 Yes 0.237
32 Arbor House Louisville Associa 285 Yes 0.237
33 King Charles Associates, LP 265 No 0.235
34 Skybuck, Inc. 352 Yes 0.237
35 Homewood Assoc. Ltd. 359 Yes 0.237
36 1075 Hospitality, L.P. (A) 268 Yes 0.235
37 GJSI - Texas, Inc. 350 Yes 0.237
38 Ludren Park, LLC 291 Yes 0.237
39 McQueen Village, LTD 357 Yes 0.237
40 Chateau Estates Limited Partnr 288 Yes 0.237
41 American Self Storage Assoc. 299 Yes 0.237
42 Canal House Historic Associate 355 Yes 0.237
43 581 Second Street Shoppes Ltd 334 Yes 0.237
44 Uptown 3414-3428 Connecticut A (C) 294 Yes 0.237
45 Servico West Des Moines, Inc. (B) 298 Yes 0.235
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Loan Mortgage
Number Borrower Address City State Zip Rate (%)
<S> <C> <C> <C> <C> <C> <C>
46 Brecksville Hospitality, L.P. (A) 4747 Brecksville Richfield OH 44286 8.625
47 Hudson Bridge Apartments,LLC. 141 Hudson Bridge Lane Stockbridge GA 30281 8.685
48 Baustin V, Ltd. 2207 Lawnmont Austin TX 78756 8.710
49 SDI, Inc. 1100 N. Blairs Bridge Rd. Austell GA 30001 9.750
50 Three Corners Realty Trust 18 Washington Square West Salem MA 02726 9.625
51 Hampden Enterprises, L.P 2001 Hampden Boulevard Reading PA 19604 8.470
52 Oxford Hotel Partners, L.L.C. 400 N. Lamar Oxford MS 38655 10.625
53 Lompoc Investment Group LLC 1420 West North Avenue Lompoc CA 93436 9.320
54 Sterling Systems, Inc. 13150 Bissonet Houston TX 77042 8.420
55 Sojourn Associates, LLC 3 New Warrington Road Pensacola FL 32506 10.250
56 Herndon Motel Associates Limit 200 Elden Street Herndon VA 22070 8.500
57 Corder Crossing Associates, Lt 750 Corder Road Warner Robins GA 31088 8.660
58 Servico Omaha Central Inc. (B) 4888 South 118th Street Omaha NE 68137 9.875
59 Balsters/Villa Rose Ltd. Part. 401 South Morland Road Bethalto IL 62010 9.585
60 Carolina Sharp, Inc., a South 1391 East Main Street Duncan SC 29334 9.500
61 Citizens Associates, Ltd. 75 Piedmont Avenue Atlanta GA 30303 10.680
62 Fifteen Habersham Court Ltd. 15 Habersham Road Atlanta GA 30325 8.725
63 El Presidente Apartments, Ltd. 2200 West North Loop Austin TX 78751 8.230
64 MLD Joint Venture - Sutton Sq. 601 Bellaire Drive Hurst TX 76053 8.100
65 WAK/H.H. Partners, A Texas Lim 811 North Plymouth Road Dallas TX 75211 8.050
66 Ridgewood Assoc., Ltd. 2100 Apalachee Parkway Tallahasse FL 32302 8.820
67 SR Properties Limited Partner 1861 West Main Street Barstow CA 92311 9.375
68 F.B.D. Realty, L.L.C. 145-18 34th Avenue Flushing NY 11354 8.270
69 American National Bank & Trust 15-45 East Dundee Road Buffalo Grove IL 60089 9.290
70 Forest Place L.L.C. 34,36,44,48 & 50 Forest Street Hartford CT 06105 9.470
71 Plainfield II Indiana 192-5 Pa 6105 Cambridge Way Plainfield IN 46231 8.500
72 Oakley Shoals Apartments,L.L.C 6295 Oakley Road Union City GA 30291 8.770
73 Poplar Springs Apts Ph.III LLC 6095 West Lee's Mill Road College Park GA 30349 8.770
74 Plainfield, Indiana 989-4 Part 6111 Cambridge Way Plainfield IN 46168 8.500
75 C.P. Plaza Limited Partnership Rte. 7 & 145 at Borst Noble Road Cobleskill NY 12043 8.230
76 106th South Associates, L.C. 10676 South 300 West South Jordan UT 84065 10.375
77 FSF Pineview Assoc., L.P. 3910 W. Walnut Street Garland TX 75042 8.250
78 Wasatch/Mid-Atlantic Oak Trail 2911 Clydedale Drive Dallas TX 75220 9.350
79 Marysville Ohio 589-3 Parnters 16420 Allenby Drive Marysville OH 43040 8.500
80 Servico Council Bluffs Inc. (B) 3537 West Broadway Council Bluffs IA 51501 9.875
81 1218-1220 Connecticut Ave., N. (C) 1218-1220 Connecticut Ave. NW LLC Washington DC 20037 9.000
82 Dara Corporation, a North Caro One Vesta Street King NC 27021 9.500
83 Brentwood Partners 6929 West University Ave. Gainesville FL 32607 9.000
84 Dorset Avenue Associates, L.P. 305-319 North Dorset Avenue Ventnor NJ 08406 8.400
85 Wisperwood Assoc, Ltd 4100 Northwest 28th Land Gainesville FL 32606 9.000
86 Westchester Apartments, L.L.C. 2905 Arrowhead Drive Augusta GA 30909 8.500
87 GBR East Fairmount, LLC Fairmount Avenue, Town of Busti Jamestown NY 14750 9.670
88 Cloverdale Indiana 588-1 Partn 1031 North Main Street Cloverdale IN 46120 8.500
89 Natha Govan, Inc. 2435 Southwest 13th Street Gainesville FL 32608 10.125
90 Westpark Apartments, L.L.C., a 370 Westfork Boulevard Lithia Springs GA 30057 8.770
</TABLE>
<TABLE>
<CAPTION>
First
Due
Date Cut-off Orig.
Orig. Original after Date Amort.
Loan Terms Maturity Principal Cut-off Scheduled Principal Term
Number Borrower (mos.) Date Balance Date Payment Balance (mos)
<S> <C> <C> <C> <C> <C> <C> <C>
46 Brecksville Hospitality, L.P. (A) 84 2/1/03 $3,050,000 11/1/96 $25,447.13 $3,021,104.73 276
47 Hudson Bridge Apartments,LLC. 120 10/1/06 $2,950,000 11/1/96 $23,070.85 $2,950,000.00 360
48 Baustin V, Ltd. 240 10/1/15 $2,900,000 11/1/96 $25,553.65 $2,843,735.26 240
49 SDI, Inc. 240 12/1/15 $2,800,000 11/1/96 $25,480.47 $2,771,675.02 276
50 Three Corners Realty Trust 84 8/1/03 $2,775,000 11/1/96 $24,486.65 $2,770,524.45 300
51 Hampden Enterprises, L.P 120 4/1/06 $2,755,000 11/1/96 $22,128.34 $2,738,617.49 300
52 Oxford Hotel Partners, L.L.C. 120 6/1/06 $2,710,000 11/1/96 $25,829.65 $2,699,376.64 300
53 Lompoc Investment Group LLC 84 7/1/03 $2,700,000 11/1/96 $22,349.33 $2,697,230.63 360
54 Sterling Systems, Inc. 120 4/1/06 $2,700,000 11/1/96 $20,607.78 $2,689,846.66 360
55 Sojourn Associates, LLC 180 8/1/11 $2,660,000 11/1/96 $28,992.70 $2,647,402.69 180
56 Herndon Motel Associates Limit 84 2/1/03 $2,560,000 11/1/96 $21,147.82 $2,535,274.61 276
57 Corder Crossing Associates, Lt 84 10/1/02 $2,550,000 11/1/96 $19,898.00 $2,531,324.29 360
58 Servico Omaha Central Inc. (B) 84 8/1/03 $2,435,000 11/1/96 $21,912.66 $2,431,235.29 300
59 Balsters/Villa Rose Ltd. Part. 84 7/1/03 $2,312,000 11/1/96 $19,584.09 $2,308,622.19 360
60 Carolina Sharp, Inc., a South 120 12/1/05 $2,325,000 11/1/96 $20,761.65 $2,300,588.93 276
61 Citizens Associates, Ltd. 120 5/1/05 $2,500,000 11/1/96 $33,986.22 $2,285,626.44 120
62 Fifteen Habersham Court Ltd. 84 9/1/03 $2,250,000 11/1/96 $17,661.00 $2,248,698.38 360
63 El Presidente Apartments, Ltd. 240 1/1/16 $2,200,000 11/1/96 $18,717.84 $2,166,423.81 240
64 MLD Joint Venture - Sutton Sq. 120 2/1/06 $2,128,000 11/1/96 $15,763.11 $2,116,539.10 360
65 WAK/H.H. Partners, A Texas Lim 120 2/1/06 $2,100,000 11/1/96 $15,482.32 $2,088,575.89 360
66 Ridgewood Assoc., Ltd. 240 9/1/16 $2,000,000 11/1/96 $17,763.04 $1,996,936.96 240
67 SR Properties Limited Partner 276 4/1/19 $2,000,000 11/1/96 $17,690.00 $1,987,382.11 276
68 F.B.D. Realty, L.L.C. 120 12/1/05 $1,975,000 11/1/96 $14,865.29 $1,962,061.31 360
69 American National Bank & Trust 120 7/1/06 $1,960,000 11/1/96 $16,182.00 $1,956,951.52 360
70 Forest Place L.L.C. 120 6/1/06 $1,740,000 11/1/96 $15,166.05 $1,734,193.51 300
71 Plainfield II Indiana 192-5 Pa 180 1/1/11 $1,740,000 11/1/96 $14,373.91 $1,721,028.61 276
72 Oakley Shoals Apartments,L.L.C 120 6/1/06 $1,695,000 11/1/96 $13,358.79 $1,691,072.56 360
73 Poplar Springs Apts Ph.III LLC 120 6/1/06 $1,672,500 11/1/96 $13,181.46 $1,668,624.68 360
74 Plainfield, Indiana 989-4 Part 180 1/1/11 $1,680,000 11/1/96 $13,878.26 $1,661,682.78 276
75 C.P. Plaza Limited Partnership 120 5/1/06 $1,660,000 11/1/96 $12,447.69 $1,654,612.29 360
76 106th South Associates, L.C. 276 8/1/18 $1,670,000 11/1/96 $15,917.64 $1,648,087.68 276
77 FSF Pineview Assoc., L.P. 120 1/1/06 $1,650,000 11/1/96 $13,009.43 $1,634,589.95 300
78 Wasatch/Mid-Atlantic Oak Trail 120 8/1/06 $1,610,000 11/1/96 $13,899.01 $1,607,280.59 300
79 Marysville Ohio 589-3 Parnters 180 1/1/11 $1,610,000 11/1/96 $13,300.00 $1,592,445.98 276
80 Servico Council Bluffs Inc. (B) 84 8/1/03 $1,565,000 11/1/96 $14,083.50 $1,562,580.38 300
81 1218-1220 Connecticut Ave., N. (C) 120 4/1/06 $1,550,000 11/1/96 $13,008.00 $1,541,544.85 300
82 Dara Corporation, a North Caro 120 12/1/05 $1,550,000 11/1/96 $13,841.10 $1,533,725.92 276
83 Brentwood Partners 240 10/1/16 $1,500,000 11/1/96 $13,495.89 $1,500,000.00 240
84 Dorset Avenue Associates, L.P. 84 1/1/03 $1,500,000 11/1/96 $11,428.00 $1,491,410.28 360
85 Wisperwood Assoc, Ltd 240 10/1/16 $1,450,000 11/1/96 $13,046.03 $1,450,000.00 240
86 Westchester Apartments, L.L.C. 120 11/1/05 $1,447,500 11/1/96 $11,130.02 $1,437,505.16 360
87 GBR East Fairmount, LLC 120 9/1/06 $1,431,000 11/1/96 $12,211.00 $1,430,320.48 360
88 Cloverdale Indiana 588-1 Partn 180 1/1/11 $1,370,000 11/1/96 $11,317.39 $1,355,062.75 276
89 Natha Govan, Inc. 120 5/1/06 $1,300,000 11/1/96 $11,927.86 $1,295,122.85 300
90 Westpark Apartments, L.L.C., a 120 6/1/06 $1,260,000 11/1/96 $9,930.43 $1,257,080.47 360
</TABLE>
<TABLE>
<CAPTION>
Rem.
Amort.
Loan Term Balloon Servicing
Number Borrower (mos) Loan? Fee Rate (%)*
<S> <C> <C> <C>
46 Brecksville Hospitality, L.P. (A) 268 Yes 0.235
47 Hudson Bridge Apartments,LLC. 360 Yes 0.237
48 Baustin V, Ltd. 228 No 0.237
49 SDI, Inc. 266 Yes 0.235
50 Three Corners Realty Trust 298 Yes 0.235
51 Hampden Enterprises, L.P 294 Yes 0.227
52 Oxford Hotel Partners, L.L.C. 296 Yes 0.235
53 Lompoc Investment Group LLC 357 Yes 0.237
54 Sterling Systems, Inc. 354 Yes 0.237
55 Sojourn Associates, LLC 178 No 0.235
56 Herndon Motel Associates Limit 268 Yes 0.235
57 Corder Crossing Associates, Lt 348 Yes 0.237
58 Servico Omaha Central Inc. (B) 298 Yes 0.235
59 Balsters/Villa Rose Ltd. Part. 357 Yes 0.237
60 Carolina Sharp, Inc., a South 266 Yes 0.237
61 Citizens Associates, Ltd. 103 No 0.237
62 Fifteen Habersham Court Ltd. 359 Yes 0.237
63 El Presidente Apartments, Ltd. 231 No 0.237
64 MLD Joint Venture - Sutton Sq. 352 Yes 0.237
65 WAK/H.H. Partners, A Texas Lim 352 Yes 0.237
66 Ridgewood Assoc., Ltd. 239 No 0.237
67 SR Properties Limited Partner 270 No 0.235
68 F.B.D. Realty, L.L.C. 350 Yes 0.237
69 American National Bank & Trust 357 Yes 0.237
70 Forest Place L.L.C. 296 Yes 0.237
71 Plainfield II Indiana 192-5 Pa 267 Yes 0.235
72 Oakley Shoals Apartments,L.L.C 356 Yes 0.237
73 Poplar Springs Apts Ph.III LLC 356 Yes 0.237
74 Plainfield, Indiana 989-4 Part 267 Yes 0.235
75 C.P. Plaza Limited Partnership 355 Yes 0.237
76 106th South Associates, L.C. 262 No 0.235
77 FSF Pineview Assoc., L.P. 291 Yes 0.237
78 Wasatch/Mid-Atlantic Oak Trail 298 Yes 0.237
79 Marysville Ohio 589-3 Parnters 267 Yes 0.235
80 Servico Council Bluffs Inc. (B) 298 Yes 0.235
81 1218-1220 Connecticut Ave., N. (C) 294 Yes 0.237
82 Dara Corporation, a North Caro 266 Yes 0.237
83 Brentwood Partners 240 No 0.237
84 Dorset Avenue Associates, L.P. 351 Yes 0.237
85 Wisperwood Assoc, Ltd 240 No 0.237
86 Westchester Apartments, L.L.C. 349 Yes 0.237
87 GBR East Fairmount, LLC 359 Yes 0.237
88 Cloverdale Indiana 588-1 Partn 267 Yes 0.235
89 Natha Govan, Inc. 295 Yes 0.235
90 Westpark Apartments, L.L.C., a 356 Yes 0.237
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Loan Mortgage
Number Borrower Address City State Zip Rate (%)
<S> <C> <C> <C> <C> <C> <C>
91 Ivywood Associates General Par 1556 Clough Street Bowling Green OH 43402 9.070
92 ROMO Properties, Inc. 4711-4757 NW 24 Court Lauderdale Lakes FL 33313 8.560
93 Sweet Home Properties, Inc. 115 Barrow Hill Road Forrest City AR 72235 9.500
94 Gallup Lodging, Inc. 3208 West Highway 66 Gallup NM 87301 9.625
95 Lakeside Villa Assoc., Ltd 3665 Sykes Park Drive Jackson MS 39212 8.470
96 V & M Properties, L.C. 1009-1101 Cheek Sparger Road Colleyville TX 76034 9.780
97 Rittiman Oaks, Ltd. 4443 Rittiman Road San Antonio TX 78218 8.910
98 Clark Wilson, Inc. 60 Clarkson Avenue Brooklyn NY 11226 8.680
99 Ashley Apartments, LTD 8330 Carvel Lane Houston TX 77036 9.070
100 Thomas & Cheryl Koziol, Inc. 329 Main Street Lodi NJ 07644 8.800
101 Crawfordsville, IN 888-2 Ptshp 1040 Corey Bouldevard Crawfordsville IN 46933 8.500
102 Rongo, Inc 2209 Ivy Court Findlay OH 45840 9.340
103 Larkspur II, Limited Partnersh 2209 Ivy Court Findlay OH 45840 9.340
104 Aspen Oaks Partners, LLC 1112 Village Rd Chaska MN 55318 8.050
105 Pleasantdale Village, L.P. a G 3210 Tucker-Norcross Road Tucker GA 30084 8.750
106 326 South Normandie, LLC 326 South Normandie Avenue Los Angeles CA 90020 8.370
107 Djekic, L.L.C. 929 Vista Del Cerro Dr. Tempe AZ 85281 10.560
108 32nd Street Associates 3251 North Federal Highway Boca Raton FL 33432 9.730
109 Chapin Place Investors, LLC 590 Wethersfield Ave Hartford CT 06114 8.500
</TABLE>
<TABLE>
<CAPTION>
First
Due
Date Cut-off Orig.
Orig. Original after Date Amort.
Loan Terms Maturity Principal Cut-off Scheduled Principal Term
Number Borrower (mos.) Date Balance Date Payment Balance (mos)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
91 Ivywood Associates General Par 120 8/1/06 $1,256,250 11/1/96 $10,603.00 $1,254,025.94 300
92 ROMO Properties, Inc. 240 5/1/16 $1,250,000 11/1/96 $10,895.31 $1,239,964.63 240
93 Sweet Home Properties, Inc. 240 1/1/16 $1,200,000 11/1/96 $11,185.58 $1,184,354.52 240
94 Gallup Lodging, Inc. 120 4/1/06 $1,150,000 11/1/96 $10,367.02 $1,143,012.10 276
95 Lakeside Villa Assoc., Ltd 120 8/1/05 $1,155,800 11/1/96 $9,283.46 $1,139,300.17 300
96 V & M Properties, L.C. 84 7/1/03 $1,100,000 11/1/96 $9,825.63 $1,097,397.01 300
97 Rittiman Oaks, Ltd. 84 5/1/03 $1,073,000 11/1/96 $8,564.21 $1,069,969.40 360
98 Clark Wilson, Inc. 120 10/1/05 $1,050,000 11/1/96 $8,582.63 $1,037,665.37 300
99 Ashley Apartments, LTD 120 8/1/06 $1,030,000 11/1/96 $8,340.00 $1,028,885.97 360
100 Thomas & Cheryl Koziol, Inc. 120 4/1/06 $900,000 11/1/96 $7,429.89 $894,928.47 300
101 Crawfordsville, IN 888-2 Ptshp 180 1/1/11 $800,000 11/1/96 $6,608.70 $791,277.46 276
102 Rongo, Inc 120 8/1/06 $770,000 11/1/96 $6,643.00 $768,695.28 300
103 Larkspur II, Limited Partnersh 120 8/1/06 $750,000 11/1/96 $6,470.00 $748,730.08 300
104 Aspen Oaks Partners, LLC 120 2/1/06 $670,000 11/1/96 $5,193.38 $664,276.60 300
105 Pleasantdale Village, L.P. a G 166 5/1/09 $673,716 11/1/96 $7,032.00 $640,249.08 166
106 326 South Normandie, LLC 120 12/1/05 $587,000 11/1/96 $4,459.55 $583,230.97 360
107 Djekic, L.L.C. 120 12/1/04 $575,000 11/1/96 $5,453.70 $565,489.30 300
108 32nd Street Associates 240 8/1/16 $550,000 11/1/96 $5,210.00 $548,493.08 240
109 Chapin Place Investors, LLC 120 3/1/06 $470,000 11/1/96 $3,784.57 $466,743.64 300
Total $397,202,489.27
</TABLE>
<TABLE>
<CAPTION>
Rem.
Amort.
Loan Term Balloon Servicing
Number Borrower (mos) Loan? Fee Rate (%)*
<S> <C> <C> <C>
91 Ivywood Associates General Par 298 Yes 0.237
92 ROMO Properties, Inc. 235 No 0.237
93 Sweet Home Properties, Inc. 231 No 0.235
94 Gallup Lodging, Inc. 270 Yes 0.235
95 Lakeside Villa Assoc., Ltd 286 Yes 0.237
96 V & M Properties, L.C. 297 Yes 0.237
97 Rittiman Oaks, Ltd. 355 Yes 0.237
98 Clark Wilson, Inc. 288 Yes 0.237
99 Ashley Apartments, LTD 358 Yes 0.237
100 Thomas & Cheryl Koziol, Inc. 294 Yes 0.237
101 Crawfordsville, IN 888-2 Ptshp 267 Yes 0.235
102 Rongo, Inc 298 Yes 0.237
103 Larkspur II, Limited Partnersh 298 Yes 0.237
104 Aspen Oaks Partners, LLC 292 Yes 0.237
105 Pleasantdale Village, L.P. a G 151 No 0.237
106 326 South Normandie, LLC 350 Yes 0.237
107 Djekic, L.L.C. 278 Yes 0.237
108 32nd Street Associates 238 No 0.237
109 Chapin Place Investors, LLC 293 Yes 0.237
</TABLE>
* For such period as the Mortgage Loan is not a Specially Serviced Mortgage Loan
or an REO Loan.
(A) Mortgage Loans secured by Sioux City Hospitality, L.P., 1075 Hospitality,
L.P. and Brecksville Hospitality, L.P. are cross collateralized and
cross-defaulted.
(B) Mortgage Loans secured by Servico Omaha Central, Inc., Servico Wichita,
Inc., Servico West Des Moines, Inc., Servico Omaha Central Inc. and Servico
Council Bluffs Inc. are cross collateralized and cross-defaulted.
(C) Mortgage Loans secured by Uptown 3414-3428 Connecticut A and 1218-1220
Connecticut Ave., N. are cross collateralized and cross-defaulted.
<PAGE>
EXHIBIT 2A
FORM OF SELLER'S CERTIFICATE
LB Commercial Conduit Mortgage Trust II
Multiclass Pass-Through Certificates
Series 1996-C2
CERTIFICATE OF LEHMAN BROTHERS HOLDINGS INC.,
DOING BUSINESS AS LEHMAN CAPITAL,
A DIVISION OF LEHMAN BROTHERS HOLDINGS INC.
Lehman Brothers Holdings Inc., doing business as Lehman
Capital, A Division of Lehman Brothers Holdings Inc. (the "Seller"), hereby
certifies to Lehman Brothers Inc., that as of October 30, 1996 (the "Closing
Date"):
(i) The Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware;
(ii) The Seller has full corporate power and authority to execute,
deliver and perform the Mortgage Loan Purchase Agreement, dated as of October
18, 1996 (the "Mortgage Loan Purchase Agreement"), between Structured Asset
Securities Corporation and the Seller;
(iii) No consent, approval or authorization is required for the
consummation of any of the other transactions contemplated by the Mortgage Loan
Purchase Agreement, or each such required consent, approval and authorization
has been obtained; and
(iv) The Mortgage Loan Purchase Agreement has been duly and validly
executed and has been delivered by the Seller.
IN WITNESS WHEREOF, the undersigned has caused this
certificate to be executed by its duly authorized officer or representative,
this 30th day of October, 1996.
LEHMAN BROTHERS HOLDINGS INC., DOING
BUSINESS AS LEHMAN CAPITAL, A DIVISION OF
LEHMAN BROTHERS HOLDINGS INC.
By:________________________________
Name:
Title:
<PAGE>
EXHIBIT 2B
FORM OF SELLER'S CERTIFICATE
LB Commercial Conduit Mortgage Trust II
Multiclass Pass-Through Certificates
Series 1996-C2
CERTIFICATE OF LEHMAN BROTHERS HOLDINGS INC.,
DOING BUSINESS AS LEHMAN CAPITAL,
A DIVISION OF LEHMAN BROTHERS HOLDINGS INC.
Reference is made to Lehman Brothers Holdings Inc., doing business as
Lehman Capital, A Division of Lehman Brothers Holdings Inc. (the "Seller") and
Structured Asset Securities Corporation (the "Depositor"), an affiliate of the
Seller, in connection with (i) the transfer to the Depositor of multifamily and
commercial mortgage loans (the "Mortgage Loans") pursuant to a Mortgage Loan
Purchase Agreement, dated as of October 18, 1996 (the "Mortgage Loan Purchase
Agreement"), between the Depositor and the Seller, and (ii) the issuance by the
LB Commercial Conduit Mortgage Trust II of Multiclass Pass-Through Certificates,
Series 1996-C2, in thirteen classes designated Class A, Class IO, Class B, Class
C, Class D, Class E, Class F, Class G, Class H, Class J, Class R-I, Class R-II
and Class R-III, pursuant to a Trust Agreement, dated as of October 1, 1996 (the
"Trust Agreement"), among the Depositor as depositor, GMAC Commercial Mortgage
Corporation as servicer (the "Servicer"), CRIIMI MAE Services Limited
Partnership as special servicer (the "Special Servicer"), LaSalle National Bank
as trustee (the "Trustee") and ABN AMRO Bank N.V. as fiscal agent (the "Fiscal
Agent"). The Depositor will sell the Class A, Class B, Class C, Class D, Class E
and Class IO Certificates to Lehman Brothers Inc. ("LBI"), an affiliate of the
Seller and the Depositor, pursuant to an Underwriting Agreement, dated as of
October __, 1996 (the "Underwriting Agreement"), between the Depositor and LBI.
In addition, the Depositor will sell the Class F, Class G, Class H, Class J,
Class R-I, Class R-II and Class R-III Certificates to LBI pursuant to a
Certificate Purchase Agreement, dated as of October __, 1996 (the "Certificate
Purchase Agreement"; together with the Mortgage Loan Purchase Agreement, the
Trust Agreement and the Underwriting Agreement, collectively, the "Agreements"),
between the Depositor and LBI. Capitalized terms used but not defined herein
have the respective meanings set forth in the Agreements.
The undersigned is a duly appointed ____________ of Seller.
The undersigned hereby certifies after reasonable investigation that:
1. The price to be paid to the Seller for the Mortgage Loans
will have been paid in full at the closing of the sales pursuant to the Mortgage
Loan Purchase Agreement, and no agreement or arrangement exists or will exist
that permits the modification of the consideration for the Mortgage Loans
subsequent to those sales. The Seller will not have any right or obligation to
repurchase any Mortgage Loan, except as provided in the Mortgage Loan Purchase
Agreement.
<PAGE>
-17-
2. Each Mortgage Note and each related Mortgage has been
appropriately prepared and duly executed and delivered by the related Mortgagor,
and each Mortgage has been appropriately recorded in the applicable jurisdiction
and any intervening endorsement of any Mortgage Note, and any intervening
assignment of any Mortgage, which was required in order to transfer to the
Seller ownership of the Mortgage Loans, was obtained and completed.
3. Each Mortgage Note has been endorsed or assigned in a
manner that satisfies any requirement necessary to transfer to the Trustee all
right, title and interest of the party so endorsing or assigning, as noteholder
or transferee thereof, in and to that Mortgage Note, as provided in the Mortgage
Loan Purchase Agreement and the Trust Agreement. Each assignment to the Trustee
is in recordable form and is sufficient to effect the assignment and transfer to
the Depositor of the benefits of the assignor, as original mortgagee or assignee
thereof, under each Mortgage to which that Assignment relates, as provided in
the Mortgage Loan Purchase Agreement and the Trust Agreement. Each assignment to
the Trustee has been or will be appropriately recorded to the extent required
under applicable law, as provided in the Trust Agreement.
4. Each original Mortgage Note, each original recorded
Mortgage, each original recorded intervening assignment and each assignment to
the Trustee has been delivered to the Trustee at the direction of the Depositor.
Neither the Trustee nor any agent of the Trustee that has or will have
possession of any Mortgage Note, Mortgage or assignment is, or will be, at any
time during the term of the Trust Agreement, an affiliate of the Seller or
otherwise under the direct or indirect control of the Seller.
5. Immediately prior to the transfer of the Mortgage Loans by
the Seller to the Depositor, the Seller was the sole owner of each Mortgage
Loan, free and clear of any and all prior liens, mortgages, security interests,
pledges, participation interests, adverse claims, charges or other equities or
encumbrances of any nature (collectively, the "Other Liens"), and had full right
and authority to sell, assign and transfer the Mortgage Loans.
6. No Mortgage Note, Mortgage or other document constituting
part of the Mortgage File reflects or will reflect on its face any interest that
is inconsistent with the ownership interest of the Seller in and to the Mortgage
Loans or the transfer of the Mortgage Loans by the Seller to the Depositor.
7. The transfer of the Mortgage Loans by the Seller to the
Depositor as provided in the Mortgage Loan Purchase Agreement, is intended by
the Seller to be, and is in fact, a contemporaneous exchange in which the Seller
receives new value.
8. The consideration received by the Seller upon the sale of
the Mortgage Loans to the Depositor will constitute reasonably equivalent value
and fair consideration for the Mortgage Loans.
9. The Seller will be solvent at all relevant times prior to,
and will not be rendered insolvent by, the sale of the Mortgage Loans to the
Depositor.
<PAGE>
10. The Seller is not selling the Mortgage Loans to the
Depositor with any intent to hinder, delay or defraud any of the creditors of
the Seller.
11. Neither the Seller nor any agent acting on behalf of the
Seller, has been or will become a party to any fraud or illegality affecting any
Mortgage Loan or Certificate.
12. No breach of the Agreements by the Seller or any agent
acting on behalf of the Seller, misrepresentation or failure by the Seller or
any agent acting on behalf of the Seller to perform all acts required to be
performed prior to the Closing Date, or fraud or mistake on the part of the
Seller or any agent acting on behalf of the Seller in connection with the
transactions contemplated by the Agreements, has occurred or will occur.
13. Neither the Seller nor any agent acting on behalf of the
Seller has taken or will take any action that is unreasonable, arbitrary or
capricious, or that is not taken in good faith or in a commercially reasonable
manner, affecting the Mortgage Loans in connection with the transactions
contemplated by the Agreements.
14. There is not and will not be any other agreement among the
parties to the Agreements that modifies or otherwise supplements the agreement
of the parties as expressed in the Agreements.
15. The Seller does not have and will not have any right to
modify or alter the terms of the transfer of the Mortgage Loans by the Seller to
the Depositor, or to substitute or add any mortgage loan thereafter, except as
provided in the Agreements.
16. The Seller will not take any action that is inconsistent
with the ownership interest in the Mortgage Loans evidenced by the Certificates.
The Seller will promptly indicate to other persons or entities, when a response
is appropriate, that the Mortgage Loans were transferred by the Seller to the
Depositor. The Seller will not claim any ownership interest directly in the
Mortgage Loans other than that represented by Certificates in which it may have
an ownership interest from time to time.
17. Under generally accepted accounting principles and for
federal income tax purposes, the Seller will report the transfer of the Mortgage
Loans to the Depositor as a sale of the Mortgage Loans to the Depositor in
exchange for consideration consisting of an amount equal to the proceeds of the
sale of the Certificates by the Depositor to the Underwriter.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of October 30, 1996.
LEHMAN BROTHERS HOLDINGS INC., DOING
BUSINESS AS LEHMAN CAPITAL, A DIVISION OF
LEHMAN BROTHERS HOLDINGS INC.
By:_______________________________
Name:
Title:
<PAGE>
EXHIBIT 3A
FORM OF CERTIFICATE OF SELLER'S OFFICER
LB Commercial Conduit Mortgage Trust II
Multiclass Pass-Through Certificates
Series 1996-C2
CERTIFICATE OF AN OFFICER OF LEHMAN BROTHERS
HOLDINGS INC., DOING BUSINESS AS LEHMAN CAPITAL, A DIVISION
OF LEHMAN BROTHERS HOLDINGS INC.
I, ____________________, hereby certify that I am the duly
elected ____________ of Lehman Brothers Holdings Inc., doing business as Lehman
Capital, A Division of Lehman Brothers Holdings Inc., a Delaware corporation
(the "Seller"), and certify further as follows:
1. Attached hereto are true and correct copies of the
certificate of incorporation and by-laws of the Seller, which are in
full force and effect on the date hereof. Also attached is a
Certificate of Good Standing for the Seller issued by the Office of the
Secretary of State of the State of Delaware. No event has occurred
since the date thereof which has affected the good standing of the
Depositor under the laws of Delaware.
2. Attached hereto are true and correct copies of the
resolutions of the board of directors of the Seller, adopted on
__________, 1996, pertaining to the authorization and approval of the
sale of the Seller's right, title and interest in and to certain
mortgage loans (the "Mortgage Loans") pursuant to the Mortgage Loan
Purchase Agreement, dated as of October __, 1996 (the "Mortgage Loan
Purchase Agreement"), between the Seller and Structured Asset
Securities Corporation and other related matters. Such resolutions and
consent have not been amended or revoked and are in full force and
effect on the date hereof.
3. There are no actions, suits or proceedings pending or, to
the best of my knowledge, threatened against or affecting the Seller
which if adversely determined, individually or in the aggregate, would
materially and adversely affect the Seller's ability to perform its
obligations under the Mortgage Loan Purchase Agreement. No merger,
liquidation, dissolution or bankruptcy of the Seller is pending or
contemplated.
4. Each person who, as an officer or representative of the
Seller, signed the Mortgage Loan Purchase Agreement and any other
document delivered in connection with the transactions contemplated
thereby was, at the respective times of such signing and delivery, and
is now, duly elected or appointed, qualified and acting as such officer
or representative, and the signatures of such persons appearing on such
documents are their genuine signatures.
<PAGE>
-2-
IN WITNESS WHEREOF, I have executed this Certificate as of
October 30, 1996.
_____________________________________
_______________________________
Name:
Title:
I, _________________, a ______________ of the Seller, hereby
certify that __________________ is a duly elected, qualified and acting
__________________ of the Seller and that the signature appearing above is his
genuine signature.
IN WITNESS WHEREOF, I have executed this Certificate as of
October 30, 1996.
_______________________________
Name:
Title:
<PAGE>
EXHIBIT 3B
FORM OF CERTIFICATE OF SELLER'S OFFICER
LB Commercial Conduit Mortgage Trust II
Multiclass Pass-Through Certificates
Series 1996-C2
CERTIFICATE OF AN OFFICER OF LEHMAN BROTHERS
HOLDINGS INC., DOING BUSINESS AS LEHMAN CAPITAL, A DIVISION
OF LEHMAN BROTHERS HOLDINGS INC.
I, _______________, hereby certify that I am a _______________ of
Lehman Brothers Holdings Inc., doing business as Lehman Capital, A Division of
Lehman Brothers Holdings Inc.
(the "Seller"), and further certify as follows:
1. I have carefully examined the Prospectus (as defined in the Mortgage
Loan Purchase Agreement, dated as of October 18, 1996 (the "Agreement"), between
Structured Asset Securities Corporation ("SASCO") and Lehman Brothers Holdings
Inc., doing business as Lehman Capital, A Division of Lehman Brothers Holdings
Inc. (the "Seller")), and nothing has come to my attention that would lead me to
believe that the Prospectus, as of the date of the Prospectus Supplement (as
defined in the Agreement) or as of the date hereof, included or includes any
untrue statement of a material fact or omitted or omits to state therein a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
2. I have carefully examined the Private Placement Memorandum (as
defined in the Agreement), and nothing has come to my attention that would lead
me to believe that the Private Placement Memorandum, as of the date thereof or
as of the date hereof, included or includes any untrue statement of a material
fact or omitted or omits to state therein a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
<PAGE>
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: October 30, 1996
______________________________
Name:
Title:
I, ____________, a ______________ of the Seller, hereby certify that
____________ is a duly elected or appointed, qualified and acting
_______________ of the Seller, and that the signature appearing above is his
genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: October 30, 1996
______________________________
Name:
Title:
-2-
EXHIBIT 99.2
<PAGE>
================================================================================
STRUCTURED ASSET SECURITIES CORPORATION,
Depositor
LASALLE NATIONAL BANK,
Trustee
GMAC COMMERCIAL MORTGAGE CORPORATION,
Servicer
and
CRIIMI MAE SERVICES LIMITED PARTNERSHIP,
Special Servicer
---------------------------------
SERVICING AGREEMENT
Dated as of October 1, 1996
---------------------------------
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01 DEFINITIONS.................................................. 2
ARTICLE II
ADMINISTRATION OF FUNDS
Section 2.01 THE CUSTODIAL ACCOUNT....................................... 8
Section 2.02 APPLICATION OF FUNDS IN THE CUSTODIAL ACCOUNT............... 11
Section 2.03 REPORTS TO THE TRUSTEE AND SPECIAL SERVICER;
MORTGAGOR OPERATING STATEMENTS.............................. 13
Section 2.04 ADVANCES.................................................... 18
Section 2.05 ADJUSTMENT OF SERVICING FEES................................ 18
ARTICLE III
TERMINATION
Section 3.01 TERMINATION................................................. 19
Section 3.02 PROCEDURE UPON TERMINATION.................................. 20
Section 3.03 OPTIONAL CLEANUP CALL....................................... 22
ARTICLE IV
ADMINISTRATION AND SERVICING OF
MORTGAGE LOANS BY THE SERVICER AND THE SPECIAL SERVICER
Section 4.01 DUTIES OF THE SERVICER...................................... 23
Section 4.02 FIDELITY BOND AND ERRORS AND OMISSIONS INSURANCE POLICY..... 24
Section 4.03 THE SERVICER'S FINANCIAL STATEMENTS AND RELATED
INFORMATION................................................. 24
Section 4.04 THE SERVICER TO ACT AS SERVICER............................. 24
Section 4.05 COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR ITEMS.......... 25
Section 4.06 [ RESERVED ]................................................ 27
Section 4.07 RELEASE OF MORTGAGE FILES................................... 27
Section 4.08 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF THE
SERVICER TO BE HELD FOR THE TRUSTEE......................... 28
Section 4.09 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SERVICER... 29
Section 4.10 STANDARD HAZARD AND FLOOD INSURANCE POLICIES................ 31
Section 4.11 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS............ 33
Section 4.12 CONSENT TO THE MORTGAGOR REQUESTS........................... 34
Section 4.13 TRANSFER OF CONTROL OF A MORTGAGOR.......................... 35
Section 4.14 SERVICER'S COMPENSATION..................................... 36
Section 4.15 RESERVE ACCOUNTS............................................ 36
Section 4.16 ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE............... 36
i
<PAGE>
Page
Section 4.17 ANNUAL INDEPENDENT ACCOUNTANTS' SERVICING REPORT............ 37
Section 4.18 MERGER OR CONSOLIDATION OR BUSINESS SUCCESSOR............... 37
Section 4.19 RESIGNATION OF THE SERVICER................................. 38
Section 4.20 ASSIGNMENT OR DELEGATION OF DUTIES BY THE SERVICER.......... 38
Section 4.21 SUBSERVICING................................................ 38
Section 4.22 LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS.......... 40
Section 4.23 INDEMNIFICATION; THIRDPARTY CLAIMS.......................... 40
Section 4.24 THE SERVICER'S QUALIFICATION TO SERVICE..................... 43
Section 4.25 SPECIALLY SERVICED MORTGAGE LOANS........................... 43
Section 4.26 THE SERVICER NOT TO OWN RESIDUAL CERTIFICATES............... 44
Section 4.27 TAX REPORTING............................................... 44
Section 4.28 THE TRUSTEE, SPECIAL SERVICER AND DEPOSITOR TO COOPERATE
WITH THE SERVICER........................................... 44
Section 4.29 ADDITIONAL DUTIES OF THE SPECIAL SERVICER................... 45
ARTICLE V
REMIC ADMINISTRATION
Section 5.01 COMPLIANCE WITH REMIC PROVISIONS............................ 46
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.01 BINDING NATURE OF AGREEMENT; BENEFITS OF AGREEMENT.......... 46
Section 6.02 ENTIRE AGREEMENT............................................ 46
Section 6.03 AMENDMENT................................................... 47
Section 6.04 GOVERNING LAW............................................... 47
Section 6.05 NOTICES..................................................... 47
Section 6.06 SEVERABILITY OF PROVISIONS.................................. 48
Section 6.07 INDULGENCES; NO WAIVERS..................................... 48
Section 6.08 HEADINGS NOT TO AFFECT INTERPRETATION....................... 48
Section 6.09 COUNTERPARTS................................................ 48
Section 6.10 REMEDIES OF THE TRUSTEE..................................... 48
Section 6.11 SUCCESSORS AND ASSIGNS...................................... 48
Exhibit A Form of Trust Receipt
Exhibit B Form of Comparative Financial Status Report
Exhibit C NOI Adjustment Worksheet
Exhibit D Form of Delinquent Loan Status Report
Exhibit E Form of Historical Liquidation Loss Report
Exhibit F Form of Historical Loan Modification Report
Exhibit G Form of Operating Statement Analysis
Exhibit H Form of Watchlist Report
Exhibit I Form of REO Status Report
ii
<PAGE>
SERVICING AGREEMENT, dated as of October 1, 1996 (this
"AGREEMENT"), among Structured Asset Securities Corporation as depositor
(together with its permitted successors and assigns, the "DEPOSITOR"), LaSalle
National Bank as trustee (together with its permitted successors and assigns,
the "TRUSTEE") for the LB Commercial Conduit Mortgage Trust II, Multiclass
Pass-Through Certificates, Series 1996-C2, GMAC Commercial Mortgage Corporation
as servicer (together with its permitted successors and assigns, the "SERVICER")
and CRIIMI MAE Services Limited Partnership as special servicer (together with
its permitted successors and assigns, the "SPECIAL SERVICER").
PRELIMINARY STATEMENT
The parties hereto, together with ABN AMRO Bank N.V. as fiscal
agent (together with its permitted successors and assigns, the "FISCAL AGENT"),
have entered into a Trust Agreement of even date herewith (the "TRUST
AGREEMENT"), whereby a trust designated as LB Commercial Conduit Mortgage Trust
II (the "TRUST") is to be created and LB Commercial Conduit Mortgage Trust II,
Multiclass Pass-Through Certificates, Series 1996-C2 will be issued. The assets
of the Trust (collectively, the "TRUST FUND") will consist primarily of a
segregated pool of Mortgage Loans (as defined herein) and certain related assets
identified in the Trust Agreement.
The parties hereto have duly executed and delivered this
Agreement to provide for, among other things, the servicing of the Mortgage
Loans (other than Specially Serviced Mortgage Loans) by the Servicer and the
performance of certain limited servicing activities with respect to all the
Mortgage Loans by the Special Servicer. The Trustee is entering into this
Agreement on behalf of the Trust for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged.
As provided in the Trust Agreement, the Trustee, on behalf of
the Trust, will make, or will cause to be made, three separate elections for
designated portions of the Trust Fund to each be treated for federal income tax
purposes as a "real estate mortgage investment conduit" (a "REMIC").
In consideration of the foregoing and the representations,
warranties, covenants and agreements set forth in this Agreement, the parties
hereto agree as follows:
<PAGE>
2
ARTICLE I
DEFINITIONS
Section 1.01 DEFINITIONS.
Capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to them in the Trust Agreement. In addition,
whenever used in this Agreement, the following words and phrases, unless the
context otherwise requires, shall have the following meanings:
"ACCEPTED SERVICING PRACTICES" means, with respect to the
Servicer, the same manner in which, and with the same care, skill, prudence and
diligence with which, the Servicer generally services and administers comparable
mortgage loans for other portfolios or held in its own portfolio, whichever
servicing procedure is of a higher standard, and in any event, with a view to
the timely collection of all scheduled payments of principal and interest under
the Mortgage Loans, but without regard to: (i) any relationship that the
Servicer or any Affiliate thereof may have with the related Mortgagor; (ii) the
ownership of any Certificate by the Servicer or by any Affiliate thereof; (iii)
the Servicer's obligation to make Advances; and (iv) the right of the Servicer
or any Affiliate thereof or to receive compensation for its services or
reimbursement of costs hereunder or with respect to any particular transaction.
"AGREEMENT" means this Servicing Agreement and all amendments
and supplements hereto.
"ASSUMPTION FEE" means a fee, as specified below, payable by a
Mortgagor to the Trust in connection with an assumption of the related Mortgage
Loan. Subject to the related Mortgage Loan documents and applicable law, the
Assumption Fee payable in respect of any Mortgage Loan shall be an amount equal
to 1.00% of the Unpaid Principal Balance of such Mortgage Loan.
"CLEAN-UP NOTICE" has the meaning set forth in Section 3.03.
"COMPARATIVE FINANCIAL STATUS REPORT" means a report
substantially in the form of EXHIBIT B hereto.
"CUSTODIAL ACCOUNT" means collectively, the separate account
or accounts established and maintained pursuant to Section 2.01.
"DEBT SERVICE COVERAGE RATIO" means, with respect to any
Mortgage Loan or any Group of Cross-Collateralized Mortgage Loans, as of any
date of determination and for any period, the ratio of (a) the cash flow
available for debt service, based upon the most recent operating statement of
the Mortgagor for the Mortgaged Property or Properties delivered to the Special
Servicer pursuant to Section 2.03(d), and calculated in the manner set forth on
EXHIBIT C hereto, to (b) the Scheduled Payment or Payments due on such Mortgage
Loan or Loans for such period.
<PAGE>
3
"DELINQUENT LOAN STATUS REPORT" means a report substantially
in the form of EXHIBIT D hereto.
"DEPOSITOR" means Structured Asset Securities Corporation or
its successor in interest.
"ENVIRONMENTAL LAWS" means any and all federal, state and
local statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions, now or hereafter in effect, relating to health or the
environment or to emissions, discharges or releases of chemical substances,
including, without limitation, any and all pollutants, contaminants, petroleum
or petroleum products, asbestos or asbestos-containing materials,
polychlorinated biphenyls, ureaformaldehyde insulation, radon, industrial, toxic
or hazardous substances or wastes, into the environment, including, without
limitation, ambient air, surface water, ground water or land, or otherwise
relating to the manufacture, processing, distribution, use, labeling,
registration, treatment, storage, disposal, transport or handling of any of the
foregoing substances or wastes or the clean-up or other remediation thereof.
"ESCROW ACCOUNT" means an account established by the Servicer
pursuant to Section 4.05(a).
"ESCROW AMOUNT" means any amount payable with respect to a
Mortgage Loan for taxes, assessments, water rates, Standard Hazard Insurance
Policy premiums, ground lease payments, or similar items.
"EVENT OF DEFAULT" has the meaning set forth in Section
3.01(b).
"FINAL RECOVERY DETERMINATION" means a determination by the
Servicer (after consultation with the Special Servicer) in respect of any
Defaulted Mortgage Loan or REO Property, in each case, exercising reasonable
business judgment, that all Insurance Proceeds, Condemnation Proceeds,
Liquidation Proceeds and other payments or recoveries which the Servicer or the
Special Servicer, as the case may be, in its reasonable judgment, expects to be
finally recoverable on such Mortgage Loan or REO Property, without regard to any
obligation of the Servicer, the Trustee or the Fiscal Agent to make Advances
pursuant to the Transaction Documents, have been recovered and without regard to
any amounts that might be collected pursuant to deficiency judgments. The
Special Servicer is required by the Special Servicing Agreement to provide the
Servicer with prompt written notice of any determination by it with respect to
any Specially Serviced Mortgage Loan that all such Insurance Proceeds,
Condemnation Proceeds, Liquidation Proceeds and other payments and recoveries
have been recovered.
"FISCAL AGENT" has the meaning set forth in the Preliminary
Statement.
"HISTORICAL LIQUIDATION LOSS REPORT" means a report
substantially in the form of EXHIBIT E hereto.
<PAGE>
4
"HISTORICAL LOAN MODIFICATION REPORT" means a report
substantially in the form of EXHIBIT F hereto.
"MODIFICATION FEE" means a reasonable fee payable by a
Mortgagor to the Trust in connection with a modification or amendment of the
related Mortgage Loan.
"MORTGAGE LOAN" means any mortgage loan that may from time to
time be part of the Trust Fund and subject to the Trust Agreement, including,
without limitation, any Specially Serviced Mortgage Loan.
"NET COLLECTIONS" has the meaning set forth in the Special
Servicing Agreement.
"NONDISQUALIFICATION OPINION" means a written opinion of
counsel, which shall be nationally recognized in the practice of securitization,
that a contemplated action will neither cause any of REMIC I, REMIC II or REMIC
III to fail to qualify as a REMIC at any time that any Certificates are
outstanding nor cause a "prohibited transaction" or "prohibited contribution"
tax to be imposed on any such REMIC.
"OPERATING STATEMENT ANALYSIS" means a report substantially in
the form of EXHIBIT G hereto.
"QUALIFIED INSURER" means: (i) (A) with respect to any
Mortgage Loan or REO Property, an insurance company duly qualified as such under
the laws of the state in which the related Mortgaged Property is located, duly
authorized and licensed in such state to transact the applicable insurance
business and to write the insurance provided, and that has a claims paying
ability rated at least "A-IX" by A.M. Best, (B) with respect to the Servicer
Errors and Omissions Insurance Policy or Servicer Fidelity Bond (and with
respect to the Special Servicer Errors and Omissions Insurance Policy and the
Special Servicer Fidelity Bond, as such terms are defined in the Special
Servicing Agreement), an insurance company that has a claims paying ability
rated at least "A-IX" by A.M. Best or an insurance company meeting the
requirements of FNMA or FHLMC for an insurer that issues such policies and (C)
with respect to any master or single interest blanket insurance policy obtained
by the Servicer pursuant to Section 4.10, an insurance company that has an
insurance financial strength rated at least "A" by Moody's and a claims paying
ability rated at least "A" by each of Fitch and D&P, or (ii) in the case of each
of (A), (B) and (C) above, an insurance company that is acceptable to the Rating
Agencies.
"RATED FINAL DISTRIBUTION DATE" means October 25, 2026, the
first Distribution Date that follows the end of the amortization term for the
Mortgage Loan that, as of the Cut-off Date, has the longest remaining
amortization term.
"REHABILITATED MORTGAGE LOAN" means any Specially Serviced
Mortgage Loan with respect to which (a) in the case of Specially Serviced
Mortgage Loans as to which a "Servicing Transfer Event" specified in clause (i),
(ii) or (iii) of the definition of "Servicing Transfer Event" has occurred,
three consecutive Scheduled Payments have been made (in the case of any such
Mortgage Loan that was modified, based on the modified terms), or (b) in the
case of Specially Serviced Mortgage Loans as to which a Servicing Transfer Event
specified in clause (iv), (v), (vi) or (vii) of such definition has occurred,
the event giving rise to such Servicing
<PAGE>
5
Transfer Event has, in the good faith judgment of the Special Servicer, been
remedied, cured or otherwise resolved.
"REMIC" has the meaning set forth in the Preliminary
Statement.
"REO STATUS REPORT" means a report substantially in the form
of EXHIBIT I hereto.
"RESERVE ACCOUNT" means an account established by the Servicer
pursuant to Section 4.15.
"RESERVE FUNDS" means, with respect to any Mortgage Loan, any
amounts delivered by the related Mortgagor to be held in escrow by or on behalf
of the related Mortgagee representing reserves for replacements, repairs and/or
capital improvements to the related Mortgaged Property (including, without
limitation, any furniture, fixture and equipment reserves) and for any tenant
improvement and leasing concessions.
"SERVICER" means GMAC Commercial Mortgage Corporation and its
permitted successors or assigns.
"SERVICER ERRORS AND OMISSIONS INSURANCE POLICY" means an
errors and omissions insurance policy maintained by the Servicer with a
Qualified Insurer which policy names the Trustee as a certificateholder under
such policy, on behalf of the Certificateholders, as loss payee.
"SERVICER FIDELITY BOND" means a bond or insurance policy
maintained by the Servicer with a Qualified Insurer (i) under which such insurer
agrees to indemnify the Servicer (subject to standard exclusions) for all losses
(less any deductible) sustained as a result of any theft, embezzlement, fraud or
other dishonest act on the part of the Servicer's directors, officers, employees
or other Persons acting on behalf of the Servicer, (ii) which provides for
limits of liability under such bond for each director, officer or employee of
not less than an amount required for the Servicer by FNMA or FHLMC with respect
to multifamily mortgage loans and as is customary with respect to servicers of
commercial loans and (iii) which names the Trustee as a certificateholder under
such policy, on behalf of the Certificateholders, as loss payee.
"SERVICER REMITTANCE DATE" means the 24th day of each month
or, if such day is not a Business Day, the next preceding Business Day,
commencing in November 1996.
"SERVICING FEE" means, with respect to each Mortgage Loan and
REO Loan for any Due Period, one month's interest (calculated on the basis of a
360-day year consisting of twelve 30-day months) at the Servicing Fee Rate
accrued on the Scheduled Principal Balance of such Mortgage Loan or REO Loan, as
the case may be, as of the commencement of such Due Period, as adjusted pursuant
to Section 2.05.
"SERVICING FEE RATE" means (i) with respect to any Mortgage
Loan (other than a Specially Serviced Mortgage Loan or a Mortgage Loan that has
become an REO Loan), the sum of the rate per annum specified on the Mortgage
Loan Schedule to the Trust Agreement under the heading "Servicing Fee" and the
rate per annum specified on such schedule under the
<PAGE>
6
heading "Master Servicing Fee" and (ii) with respect to any Specially Serviced
Mortgage Loan and any REO Loan, 0.125% per annum.
"SERVICING OFFICER" means, with respect to the Servicer, any
officer or employee of the Servicer involved in, or responsible for, the
administration and servicing of the Mortgage Loans whose name and specimen
signature appear on a list of servicing officers or employees furnished to the
Trustee by the Servicer as such list may from time to time be amended.
"SERVICING TRANSFER EVENT" means, with respect to any Mortgage
Loan, the occurrence of any of the following: (i) if such Mortgage Loan is a
Balloon Mortgage Loan, a payment default occurs on such Mortgage Loan at its
Maturity Date and the Special Servicer does not extend the maturity of such
Mortgage Loan within 31 days following its Maturity Date as permitted by Section
4.05(c) of the Special Servicing Agreement; (ii) any Scheduled Payment becomes
more than 60 days delinquent; (iii) a payment default occurs or, in the
reasonable, good faith judgment of the Servicer (as evidenced by an Officer's
Certificate), is imminent and is not likely to be cured by the related Mortgagor
within 60 days of such occurrence (and in the case of a Balloon Payment, the
maturity of such Mortgage Loan is not likely to be extended by the Special
Servicer within 31 days following such Mortgage Loan's Maturity Date as
permitted by Section 4.05(c) of the Special Servicing Agreement); (iv) any other
default occurs that, in the reasonable, good faith judgment of the Servicer,
materially impairs the use or marketability of a related Mortgaged Property or
the value thereof as security for a Mortgage Loan; (v) the related Mortgagor
enters into or consents to bankruptcy, appointment of a receiver or conservator,
or a similar insolvency or similar proceeding, or the related Mortgagor becomes
the subject of a decree or order for such a proceeding that remains in full
force undischarged or unstayed for a period of 60 days; (vi) the related
Mortgagor admits in writing its inability to pay its debts generally as they
become due, files a petition to take advantage of any applicable insolvency or
reorganization statute, makes an assignment for the benefit of its creditors or
voluntarily suspends payment of its obligations; or (vii) the Servicer receives
notice of the foreclosure or proposed foreclosure of any lien on a related
Mortgaged Property.
"SPECIAL SERVICER" means CRIIMI MAE Services Limited
Partnership and its permitted successors and assigns.
"SPECIAL SERVICER REMITTANCE DATE" shall have the meaning set
forth in the Special Servicing Agreement.
"SPECIAL SERVICING AGREEMENT" means the Special Servicing
Agreement, dated as of October 1, 1996, among the Trustee, the Depositor, the
Servicer and the Special Servicer, as such agreement may from time to time be
amended, supplemented or otherwise modified.
"SPECIAL SERVICING COMPENSATION" shall have the meaning set
forth in the Special Servicing Agreement.
"SPECIALLY SERVICED MORTGAGE LOAN" means, as of any date of
determination, any Mortgage Loan with respect to which a Servicing Transfer
Event has occurred and the Special Servicer has received all information,
documents and records relating to such Mortgage Loan as reasonably requested by
the Special Servicer to enable it to assume its duties with respect to
<PAGE>
7
such Mortgage Loan. A Specially Serviced Mortgage Loan shall cease to be a
Specially Serviced Mortgage Loan from and after the date on which such Mortgage
Loan has become a Rehabilitated Mortgage Loan with respect to such Servicing
Transfer Event in accordance with the definition of "Rehabilitated Mortgage
Loan", unless and until another Servicing Transfer Event with respect to such
Mortgage Loan occurs.
"STANDARD HAZARD INSURANCE POLICY" means a fire and casualty
extended coverage insurance policy, provided by a Qualified Insurer, in such
amount and with such coverage as required by Section 4.10.
"SUB-SERVICER" means any Person with which the Servicer has
entered into a SubServicing Agreement.
"SUB-SERVICING AGREEMENT" means the written contract between
the Servicer and any Sub-Servicer relating to servicing and administration of
Mortgage Loans as provided in Section 4.21.
"TRUST" has the meaning set forth in the Preliminary
Statement.
"TRUST AGREEMENT" means the Trust Agreement, dated as of
October 1, 1996, among the Depositor, the Trustee, the Servicer, the Special
Servicer and the Fiscal Agent, as such agreement may from time to time be
amended, supplemented or otherwise modified.
"TRUSTEE" means LaSalle National Bank, as trustee of the
Trust, and its permitted successors and assigns.
"TRUST FUND" has the meaning set forth in the Preliminary
Statement.
"WATCHLIST REPORT" means a report substantially in the form of
EXHIBIT H hereto.
ARTICLE II
ADMINISTRATION OF FUNDS
Section 2.01 THE CUSTODIAL ACCOUNT.
(a) On or prior to the Closing Date, the Servicer shall
establish and maintain one or more accounts (collectively, the "CUSTODIAL
ACCOUNT"), each of which shall be an Eligible Account, entitled "LaSalle
National Bank, as Trustee for Holders of LB Commercial Conduit Mortgage Trust
II, Multiclass Pass-Through Certificates, Series 1996-C2 - Custodial Account".
The Custodial Account shall relate solely to the Mortgage Loans and funds in the
Custodial Account shall not be commingled with any other moneys.
<PAGE>
8
(b) On or prior to the date the Servicer shall first deposit
funds in any account constituting part of the Custodial Account, the Servicer
shall give to the Trustee prior written notice of the name and address of the
depository institution at which such account is maintained and the account
number of such account. The Servicer shall take such actions as are necessary to
cause the depository institution holding any account constituting part of the
Custodial Account to hold such account in the name of the Trustee as provided in
the first sentence of this Section 2.01, subject to the Servicer's right to
direct payments and investment income and its rights of withdrawal under the
Transaction Documents.
(c) The Servicer shall deposit into the Custodial Account no
later than the Closing Date, any amounts representing Scheduled Payments on the
Mortgage Loans due after the Cut-Off Date. The following amounts received by the
Servicer after the Closing Date (in each case, exclusive of any portion thereof
constituting Retained Yield on any Mortgage Loan due after the Cut-off Date,
which shall be remitted to the Trustee for distribution to the related Retained
Yield Holder) or paid thereby shall be deposited into the Custodial Account on
the Business Day following receipt (including amounts remitted to the Servicer
by the Special Servicer from an REO Account pursuant to the Special Servicing
Agreement) or as otherwise required hereunder or under the Trust Agreement:
(i) PRINCIPAL: all payments on account of principal,
including, without limitation, Principal Prepayments, the principal
component of Scheduled Payments and any Late Collections in respect
thereof, on the Mortgage Loans;
(ii) INTEREST: subject to Section 2.01(d), all payments on
account of interest, including, without limitation, all Default
Interest, and all Prepayment Premiums, late payment charges, Assumption
Fees, Modification Fees or any similar fees customarily associated with
the servicing of commercial and multifamily mortgage loans collected on
the Mortgage Loans;
(iii) LIQUIDATION PROCEEDS: all Liquidation Proceeds with
respect to the Mortgage Loans and, to the extent received from the
Special Servicer, any REO Properties;
(iv) INSURANCE PROCEEDS: all Insurance Proceeds with respect
to the Mortgage Loans and, to the extent received from the Special
Servicer, any REO Properties (other than proceeds to be applied to the
restoration or repair of the relevant Mortgaged Property or released to
the related Mortgagor in accordance with applicable law and the
provisions of the Transaction Documents, the respective Mortgage Loans
and the related Insurance Policies and, to the extent consistent with
the foregoing, in accordance with Accepted Servicing Practices, which
proceeds shall be deposited by the Servicer into an Escrow Account and
not deposited in the Custodial Account);
(v) CONDEMNATION PROCEEDS: all Condemnation Proceeds with
respect to the Mortgage Loans and, to the extent received from the
Special Servicer, any REO Properties (other than proceeds to be applied
to the restoration or repair of the relevant Mortgaged Property or
released to the related Mortgagor in accordance with applicable law and
the provisions of the Transaction Documents, the respective Mortgage
Loans and
<PAGE>
9
the related Insurance Policies and, to the extent consistent with the
foregoing, in accordance with Accepted Servicing Practices, which
proceeds shall be deposited by the Servicer into an Escrow Account and
not deposited in the Custodial Account);
(vi) P&I ADVANCES: all P&I Advances made by the Servicer, the
Trustee or the Fiscal Agent pursuant to Article IV of the Trust
Agreement; provided, however that any such Advances by the Trustee or
the Fiscal Agent shall be deposited in the Collection Account on or
before the related Distribution Date until such time as the Trustee
shall have succeeded as servicer under the Transaction Documents;
(vii) NET REO INCOME: all Net REO Income received from the
Special Servicer in connection with REO Property;
(viii) REPURCHASE PROCEEDS: all Repurchase Proceeds received
from the Depositor in connection with the repurchase of a Deleted
Mortgage Loan pursuant to Article II of the Trust Agreement; and
(ix) INVESTMENT LOSSES: any amounts required to be deposited
by the Servicer pursuant to Section 2.01(d) in connection with losses
realized on Eligible Investments with respect to funds held in the
Custodial Account.
The Special Servicing Agreement provides that, except as
provided in Sections 4.05 and 4.10(b), remittances from any REO Account to the
Servicer for deposit in the Custodial Account shall be made by the Special
Servicer no later than the Special Servicer Remittance Date.
(d) Funds in the Custodial Account may be invested and, if
invested, shall be invested in Eligible Investments selected by the Servicer
which shall mature, unless payable on demand, not later than the Business Day
immediately preceding the next Servicer Remittance Date (except that, if any
Eligible Investment is an obligation of the Servicer, then such Eligible
Investment may mature not later than such Servicer Remittance Date), and any
such Eligible Investment shall not be sold or disposed of prior to its maturity
unless payable on demand. All such Eligible Investments shall be made in the
name of "LaSalle National Bank, as Trustee for the Holders of LB Commercial
Conduit Mortgage Trust II, Multiclass Pass-Through Certificates, Series
1996-C2".
The Trustee shall have sole control (except with respect to
investment direction) over each such investment, and any certificate or other
instrument evidencing any such investment shall be delivered directly to the
Trustee or its agent, together with any document of transfer, if any, necessary
to transfer title to such investment to the Trustee. If amounts on deposit in
the Custodial Account are at any time invested in an Eligible Investment payable
on demand, the Trustee shall: (i) consistent with any notice required to be
given thereunder, demand that payment thereon be made on the last day such
Eligible Investment may otherwise mature hereunder in an amount equal to the
lesser of (A) all amounts then payable thereunder and (B) the amount required to
be withdrawn on such date; and (ii) demand payment of all amounts due thereunder
promptly upon determination by the Trustee that such Eligible
<PAGE>
10
Investment would not constitute an Eligible Investment for funds thereafter on
deposit in the Custodial Account.
An amount equal to all income and gain realized from any such
investment shall be paid to the Servicer as additional compensation and shall be
subject to its withdrawal at any time and from time to time. The amount of any
losses incurred in respect of any such investments shall be deposited in the
Custodial Account by the Servicer out of its own funds immediately as realized.
The requirements for deposit in the Custodial Account are exclusive, it being
understood and agreed that, without limiting the generality of the foregoing,
payment of interest on funds in the Custodial Account and, subject to Section
4.14, late payment fees (exclusive of, in the case of the Mortgage Loans
identified on the Mortgage Loan Schedule by loan numbers 63 and 109, the portion
of such late payment fees payable to the related Retained Yield Holder) and
Default Interest (to the extent actually collected by the Servicer (other than
in respect of Specially Serviced Mortgage Loans), less any interest earned on
Advances with respect to the related Mortgage Loans, need not be deposited in
the Custodial Account and may be retained by the Servicer as additional
servicing compensation. If the Servicer deposits in the Custodial Account any
amount not required to be deposited therein, it may at any time withdraw such
amount from the Custodial Account, any provision herein to the contrary
notwithstanding.
(e) Except as expressly provided otherwise in this Agreement,
if any default occurs in the making of a payment due under any Eligible
Investment, or if a default occurs in any other performance required under any
Eligible Investment, the Trustee may take such action as may be appropriate to
enforce such payment or performance, including the institution and prosecution
of appropriate proceedings. However, if the Servicer shall have deposited in the
Custodial Account an amount equal to all amounts due under any such Eligible
Investment (net of anticipated income or earnings thereon that would have been
payable to the Servicer as additional servicing compensation), the Servicer
shall have the sole right to enforce such payment or performance, and the
Trustee shall deliver to the Servicer the certificate or other instrument
evidencing such investment together with any necessary document of transfer.
(f) Certain of the Mortgage Loans may provide for payment by
the Mortgagor to the Servicer of Escrow Amounts and Reserve Funds for the
account of the Mortgagor. The Servicer's obligations with respect to such
amounts shall be as set forth in Sections 4.05 and 4.15, respectively.
(g) Amounts collected on the Mortgage Loans and any REO
Properties in the form of payments from Mortgagors, Liquidation Proceeds,
Insurance Proceeds, Condemnation Proceeds, Net REO Income or otherwise shall be
applied by the Servicer in accordance with Section 1.02(b) of the Trust
Agreement.
Section 2.02 APPLICATION OF FUNDS IN THE CUSTODIAL
ACCOUNT.
(a) The Servicer may, from time to time, make withdrawals from
the Custodial Account for any of the purposes set forth in clauses (i) through
(xiii) below:
(i) ADVANCES: to reimburse the Fiscal Agent and, after such
reimbursement of the Fiscal Agent, the Trustee and, after such
reimbursement of the Trustee, the
<PAGE>
11
Servicer, all in accordance with Section 4.06(b) of the Trust
Agreement, for all previously unreimbursed Advances, (A) prior to a
Final Recovery Determination with respect to the Mortgage Loan or REO
Property as to which any such Advance relates, from payments made by
the related Mortgagor of the amounts to which any such Advance relates,
any related Insurance Proceeds, Condemnation Proceeds or other
Liquidation Proceeds, any related Repurchase Proceeds (if applicable)
and related Net REO Income and (B) after a Final Recovery Determination
has been made with respect to such loan or REO Property, from any funds
on deposit in the Custodial Account, regardless of whether such amount
was recovered from the related Mortgage Loan or REO Property, other
than Net Prepayment Premiums;
(ii) ADVANCE INTEREST: at such time as the Fiscal Agent,
Trustee or Servicer is reimbursed for any Advance pursuant to clause
(i) above, to pay such Person(s), all in accordance with Section
4.06(c) of the Trust Agreement, all Advance Interest accrued thereon,
FIRST, from late payments charges (exclusive of, in the case of the
Mortgage Loans identified on the Mortgage Loan Schedule by loan numbers
63 and 109, the portion of such late payment charges payable to the
related Retained Yield Holder) and Default Interest recovered in
respect of the related Mortgage Loan or from that portion of any
Repurchase Proceeds paid in respect of the related Mortgage Loan or REO
Property and allocable to such Advance Interest, and THEREAFTER, from
any funds on deposit in the Custodial Account, other than Net
Prepayment Premiums, regardless of whether such amount was recovered on
the related Mortgage Loan or REO Property;
(iii) SERVICING FEE, SPECIAL SERVICING BASIC FEE AND SPECIAL
SERVICING SUPPLEMENTAL FEE: to pay to itself any unpaid Servicing Fees
and to pay to the Special Servicer the amount certified by the Special
Servicer to be the unpaid Special Servicing Basic Fees and Special
Servicing Supplemental Fees, in each case, from any payment or other
collection of interest on or in respect of the Mortgage Loan or REO
Loan as to which any such fee was earned or from the portion of any P&I
Advance on or in respect of such Mortgage Loan or REO Loan attributable
to interest;
(iv) EXPENSES OF TRUST: (A) to pay any Liquidation Expenses
incurred in respect of any Mortgage Loan or REO Property out of related
Liquidation Proceeds received thereon and to pay to the person entitled
thereto any other amounts specified herein to be expenses of the Trust
if another source of payment is not specified therefor in this Section
2.02(a), in the Trust Agreement or the Special Servicing Agreement from
funds on deposit in the Collection Account other than Net Prepayment
Premiums, and (B) to reimburse to the Special Servicer for any expenses
permitted to be incurred thereby following receipt of a
Nonrecoverability Notice as set forth in Section 4.04(c) of the Special
Servicing Agreement;
(v) ASSUMPTION FEE AND MODIFICATION FEE: if deposited, to pay
to the Special Servicer the related Assumption Fee payable in
connection with any assumption of a Mortgage Loan, and the Modification
Fee payable in connection with any modification of a Mortgage Loan, in
each case from the payments made by the Mortgagor of such amounts;
<PAGE>
12
(vi) LATE FEES: if deposited, to pay to itself the amount of
late fees collected on Mortgage Loans (exclusive of, in the case of the
Mortgage Loans identified on the Mortgage Loan Schedule by loan numbers
63 and 109, the portion of such late payment fees payable to the
related Retained Yield Holder, and exclusive of, in the case of all the
Mortgage Loans, any portion thereof applied to cover Advance Interest
as contemplated by clause (ii) above), from payments made by the
Mortgagor of such amounts;
(vii) INVESTMENT INCOME: to pay to itself income and gain
realized on the investment of funds deposited in the Custodial Account;
(viii) CORRECTION OF ERRORS: to withdraw funds deposited in
the Custodial Account in error;
(ix) AMOUNTS TO BE REMITTED TO OTHER PERSONS: to pay to the
Person entitled thereto any amounts received on Deleted Mortgage Loans
and other Mortgage Loans and REO Properties removed from the Trust Fund
after the date of removal;
(x) INDEMNIFICATION: to indemnify (A) the Servicer and certain
related Persons pursuant to Section 4.23(a) hereof, (B) the Special
Servicer and certain related Persons pursuant to Section 4.24(a) of the
Special Servicing Agreement, (C) the Trustee and certain related
Persons pursuant to Section 7.11(a) of the Trust Agreement and (D) the
Fiscal Agent and certain related Persons pursuant to Section 4.14(a) of
the Trust Agreement;
(xi) AMOUNTS TO BE REMITTED TO THE TRUSTEE: on each Servicer
Remittance Date, to make payments to the Collection Account of the
Available Distribution Amount for the next succeeding Distribution Date
(net of any portion of such Available Distribution Amount that is on
deposit in the Collection Account), all Net Prepayment Premiums
collected on Mortgage Loans during the most recently ended Collection
Period and amounts to be applied to the Trustee Fee and any expenses of
the Trust payable out of the Collection Account under the Trust
Agreement; and
(xii) CLEAR AND TERMINATE: to clear and terminate the
Custodial Account pursuant to Section 3.02.
(b) The Servicer shall, on each Servicer Remittance Date,
remit the amounts specified in clause (xi) above to the Collection Account by
wire transfer of immediately available funds. The Servicer shall remit by wire
transfer of immediately available funds (A) to the account specified in writing
by the Trustee and the Fiscal Agent from time to time all amounts payable to the
Trustee and the Fiscal Agent and applied as provided in clauses (i), (ii), (iv)
and (x) above; and (B) to the account specified in writing by the Special
Servicer from time to time all amounts payable to the Special Servicer and
applied as provided in clauses (iii), (iv), (v) and (x) above. If the Trustee
does not receive any funds from the Servicer on any Servicer Remittance Date,
the Trustee will give the Servicer notice to that effect by 9:00 a.m. Central
Time on the related Distribution Date.
<PAGE>
13
(c) The Servicer shall keep and maintain a separate accounting
for each Mortgage Loan for the purpose of justifying any withdrawal from the
Custodial Account for the Trust.
Section 2.03 REPORTS TO THE TRUSTEE AND SPECIAL SERVICER;
MORTGAGOR OPERATING STATEMENTS.
(a) On the fifth Business Day after each Determination Date,
the Servicer shall deliver or cause to be delivered to the Trustee and, if
requested, the Special Servicer, in writing and on a computer-readable medium,
in form reasonably acceptable to the Trustee, the following reports: (1) a
Comparative Financial Status Report, (2) a Delinquent Loan Status Report, (3) a
Historical Liquidation Loss Report, (4) a Historical Loan Modification Report
and (5) an REO Status Report.
On the fifth Business Day after each Determination Date, the
Servicer shall also deliver or cause to be delivered to the Trustee and, if
requested, the Special Servicer, in writing, and on a computer-readable medium,
in form reasonably acceptable to the Trustee, a report setting forth the
information specified in clauses (i) through (xiv) below (the amounts and
allocations of payments, collections, fees and expenses with respect to
Specially Serviced Mortgage Loans and REO Properties to be based upon the report
to be delivered by the Special Servicer to the Servicer within two Business Days
after the Determination Date, but in no event later than four Business Days
prior to the immediately succeeding Distribution Date, in the form required by
the Special Servicing Agreement):
(i) the aggregate amount that is to be transferred from the
Custodial Account to the Collection Account on the related 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 Payment Amount for the immediately succeeding
Distribution Date;
(ii) the aggregate amount that is to be transferred from the
Custodial Account to the Collection Account on the related Servicer
Remittance Date that is allocable to (A) interest on or in respect of
the Mortgage Loans and any REO Loans and (B) Net Prepayment Premiums;
(iii) the aggregate amount of any P&I Advances (specifying the
principal and interest portions thereof separately) to be made pursuant
to Article IV of the Trust Agreement that are included in the amounts
to be deposited in the Collection Account;
(iv) the amount of the Servicing Fees, Special Servicing
Compensation (broken down by type) and other servicing compensation
with respect to the Mortgage Pool for the Due Period ending on such
Determination Date, specifying the items and amounts of such other
servicing compensation payable to the Servicer and the Special
Servicer, and the amount of any adjustment to the Servicing Fee
pursuant to Section 2.05;
<PAGE>
14
(v) the aggregate Scheduled Principal Balance of the Mortgage
Pool at the close of business on such Determination Date and the
aggregate Stated Principal Balance of the Mortgage Pool that will be
outstanding after the immediately following Distribution Date;
(vi) the number and aggregate Unpaid Principal Balance and
Scheduled Principal Balance as of the close of business on such
Determination Date of Mortgage Loans (A) remaining outstanding, (B)
delinquent 30-59 days, (C) delinquent 60-89 days, (D) delinquent 90
days or more but not in foreclosure, (E) in foreclosure, (F) as to
which the related Mortgaged Property (or, in the case of a
Cross-Collateralized Mortgage Loan, the related Primary Mortgaged
Property) has become REO Property during the Collection Period ending
on such Determination Date, (G) as to which the related Mortgaged
Property (or, in the case of a Cross-Collateralized Mortgage Loan, the
related Primary Mortgaged Property) was REO Property as the end of such
Collection Period and (H) the terms of which have been modified during
such Collection Period pursuant to this Agreement or the Special
Servicing Agreement;
(vii) the loan number and the Unpaid Principal Balance and
Scheduled Principal Balance as of the close of business on such
Determination Date of each Specially Serviced Mortgage Loan and each
other Defaulted Mortgage Loan;
(viii) with respect to any REO Property that was included in
the Trust Fund as of the close of business on such Determination Date,
the loan number of the related Mortgage Loan, the book value of such
REO Property and the amount of Net REO Income and other amounts, if
any, received on such REO Property during the related Collection Period
and the portion thereof included in the Available Distribution Amount
for the immediately succeeding Distribution Date;
(ix) with respect to any Mortgage Loan as to which the related
Mortgaged Property (or, in the case of a Cross-Collateralized Mortgage
Loan, the related Primary Mortgaged Property) became an REO Property
during the Due Period ending on such Determination Date, the loan
number of such Mortgage Loan and the Unpaid Principal Balance and
Scheduled Principal Balance of such Mortgage Loan as of the related
Acquisition Date;
(x) with respect to any Mortgage Loan or REO Property as to
which a Final Recovery Determination was made by the Servicer during
the Collection Period ending on such Determination Date, the loan
number of such Mortgage Loan or, in the case of an REO Property, of the
related Mortgage Loan, the amount of Liquidation Proceeds and/or other
amounts, if any, received thereon during such Collection Period and the
portion thereof included in the Available Distribution Amount for the
immediately succeeding Distribution Date, and any resulting Liquidation
Realized Loss;
(xi) with respect to any Mortgage Loan that became a Deleted
Mortgage Loan during the Collection Period, the loan number of such
Mortgage Loan, the amount of Repurchase Proceeds received thereon and
the portion thereof included in the Available Distribution Amount for
the immediately succeeding Distribution Date;
<PAGE>
15
(xii) the aggregate amount of Realized Losses on the Mortgage
Pool for the Collection Period ending on such Determination Date (and
the portions allocable to principal and interest), setting forth
separately the aggregate amount of Realized Losses due to earthquakes
and floods;
(xiii) the aggregate amount of the Additional Trust Fund
Expenses (broken down by type) withdrawn from the Custodial Account
during the Collection Period ending on such Determination Date and the
extent to which they constitute Additional Expense Losses; and
(xiv) 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 Servicer shall also deliver or cause to be delivered to the
Trustee and the Special Servicer 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 same tables in the same form set forth under
the caption "DESCRIPTION OF MORTGAGE LOANS--Additional Mortgage Loan
Information" in the 1996-C2 Prospectus Supplement, as well as to prepare an
updated Mortgage Loan Schedule, in each case reflecting the changes in the
Mortgage Pool during the related Due Period and Collection Period.
(b) The Trustee shall perform on behalf of each of REMIC I,
REMIC II and REMIC III all reporting and other tax compliance duties that are
the responsibility of such REMIC under the Code, REMIC Provisions or other
compliance guidance issued by the Internal Revenue Service or any state or local
taxing authority. Consistent with the Trust Agreement, the Trustee shall provide
(i) to the Internal Revenue Service or other Persons (including, but not limited
to, the transferor of a Residual Certificate to a Disqualified Organization or
to an agent that has acquired a Residual Certificate on behalf of a Disqualified
Organization) such information as is necessary for the application of any tax
relating to the transfer of a Residual Certificate to any Disqualified
Organization and (ii) to the Certificateholders such information or reports as
are required by the Code or REMIC Provisions. The Servicer shall provide the
Trustee with such information concerning the Mortgage Loans and any REO
Properties as is necessary for the preparation of the tax or information returns
or receipts of each such REMIC as the Trustee may reasonably request from time
to time. The Special Servicer shall provide to the Servicer all information in
its possession with respect to the Specially Serviced Mortgage Loans and REO
Properties necessary for the Servicer to comply with its obligations under this
Section 2.03(b).
(c) Not later than the second Business Day following each
Servicer Remittance Date, the Servicer shall forward to the Trustee a statement,
setting forth the status of the Custodial Account as of the close of business on
such Servicer Remittance Date, stating that all distributions required by this
Agreement to be made by the Servicer have been made (or, in the
<PAGE>
16
case of any required distribution that has not been made by the Servicer,
specifying the nature and status thereof) and showing, for the period from the
preceding Servicer Remittance Date (or, in the case of the first Servicer
Remittance Date, from the Cut-Off Date) to such Servicer Remittance Date, the
aggregate of deposits into and withdrawals from each Custodial Account for each
category of deposit specified in Section 2.01 and each category of withdrawal
specified in Section 2.02(a). The Servicer shall also deliver to the Trustee,
upon reasonable request of the Trustee, any and all additional information
relating to the Mortgage Loans and REO Properties (which information shall be
based upon reports delivered to the Servicer by the Special Servicer with
respect to Specially Serviced Mortgage Loans and REO Properties).
(d) The Special Servicer shall use its reasonable efforts to
obtain copies of all of the monthly, quarterly and annual operating statements
for each Mortgaged Property and monthly, quarterly and annual rent rolls for
each Mortgaged Property, regardless of whether the related Mortgage Loan
documents require the Mortgagor to provide such information. The Special
Servicer shall forward monthly to the Servicer the information requested by the
Servicer to complete the Comparative Financial Status Report.
(e) Not later than the fifth Business Day following the
Determination Date each month, commencing in December 1996, the Special Servicer
shall deliver to the Trustee and the Rating Agencies an Operating Statement
Analysis with respect to all quarterly and annual operating statements and rent
rolls received by the Special Servicer during the related Collection Period
(including attached copies of such operating statements and rent rolls on which
it is based) with respect to Mortgage Loans or Groups of Cross-Collateralized
Mortgage Loans, including, among other things, information regarding the
applicable Debt Service Coverage Ratio. With respect to each Mortgage Loan and
Group of Cross-Collateralized Mortgage Loans for which the Special Servicer
receives monthly but not quarterly operating statements and rent rolls, the
Special Servicer shall deliver to the Trustee and the Rating Agencies an
Operating Statement Analysis based thereon once per calendar quarter. Each such
Operating Statement Analysis will be provided to the Servicer upon request.
(f) The Servicer shall provide copies of the reports and
information which the Servicer is to deliver to the Trustee hereunder to any of
the Depositor, the Special Servicer, the Operating Adviser or any Rating Agency
upon any such party's request. In addition, the Servicer or the Special
Servicer, as applicable, will make available to the Trustee, the Depositor, the
Operating Adviser, the Special Servicer and any Rating Agency upon reasonable
request therefor any additional information regarding the Mortgage Loans in its
possession, including without limitation, any financial or occupancy information
(including rent rolls or lease summaries). The Servicer shall provide to the
Trustee, the Depositor, the Operating Adviser, the Special Servicer and each
Rating Agency viewing access, to the extent available, to its electronic records
relating to the Mortgage Loans when such viewing access becomes available and to
the information accessible in such electronic records. Upon the request of any
of the Operating Adviser, the Depositor, the Special Servicer, the Trustee or
any Rating Agency, the Servicer shall conduct a meeting at its offices or by a
telephone conference call with such Person for the purpose of discussing any
issues relating to the Mortgage Loans.
(g) Within 10 days of receipt by the Special Servicer of any
annual operating statements with respect to any Mortgaged Property, the Special
Servicer shall prepare an NOI
<PAGE>
17
Adjustment Worksheet for such Mortgaged Property (with the annual operating
statements attached thereto as an exhibit) in the form attached hereto as
EXHIBIT C. The Special Servicer shall maintain one Operating Statement Analysis
Report for each Mortgaged Property. The Operating Statement Analysis Report for
each Mortgaged Property is to be updated by the Special Servicer, and such
updated report delivered to the Depositor, the Servicer and the Trustee, within
30 days after receipt by the Special Servicer of updated operating statements
for such Mortgaged Property. The Special Servicer will use the "normalized"
column from the NOI Adjustment Worksheet to update the Operating Statement
Analysis Report and will use any operating statements received with respect to
any Mortgaged Property to update the Operating Statement Analysis Report for
such Mortgaged Property, such updates to be completed and copies thereof sent to
the Depositor, the Trustee, the Rating Agencies and the Servicer within 30 days
after receipt of the necessary information.
(h) No later than the fifth Business Day after each
Determination Date, but in no event later than three Business Days prior to the
succeeding Distribution Date, beginning in November 1996, the Servicer shall
prepare and deliver to the Depositor and the Trustee a watchlist report in the
form of EXHIBIT H attached hereto of all Mortgage Loans that the Servicer has
determined are in jeopardy of becoming Specially Serviced Mortgage Loans. For
this purpose, Mortgage Loans that are in jeopardy of becoming Specially Serviced
Mortgage Loans shall include, without limitation (i) Mortgage Loans having a
current Debt Service Coverage Ratio that is 80% or less of the Debt Service
Coverage Ratio as of the Cut-Off Date, based on the most recent financial
reports provided to the Servicer, (ii) Mortgage Loans as to which any required
inspection of the related Mortgaged Property conducted by the Special Servicer
indicates a problem that the Special Servicer determines can reasonably be
expected to materially adversely affect the cash flow generated by such
Mortgaged Property, (iii) Mortgage Loans as to which it has come to the Special
Servicer's attention in the performance of its duties under this Agreement
(without any expansion of such duties by reason hereof) that any tenant (A)
occupying 25% or more of the space in the related Mortgaged Property has vacated
(without being replaced by a comparable tenant and lease) or (B) has declared
bankruptcy, (iv) Mortgage Loans that are at least 30 days delinquent in payment,
(v) Balloon Loans that are within 60 days of maturity and (vi) such other
Mortgage Loans as the Servicer in its reasonable judgment has determined are in
jeopardy of becoming Specially Serviced Mortgage Loans.
(i) Additional information regarding the Mortgage Loans,
including, without limitation, any financial or occupancy information (including
lease summaries), to the extent provided to the Servicer by the Mortgagors,
shall be delivered to the Special Servicer and the Trustee, within ten days of
receipt, and shall be distributed to the Certificateholders by the Trustee.
Section 2.04 ADVANCES.
The Servicer shall make each Servicing Advance and P&I Advance
in accordance with the terms of the Transaction Documents, unless the Servicer
determines, in accordance with Section 4.04 of the Trust Agreement, that any
such Advance would be a Nonrecoverable Advance. The Servicer shall deposit any
P&I Advances required to be made with respect to any Distribution Date into the
Custodial Account on the P&I Advance Date immediately preceding such
Distribution Date. Notwithstanding anything to the contrary in any of the
Transaction
<PAGE>
18
Documents, any reference herein or in the Special Servicing Agreement to the
Servicer's obligation to make any Advance under the Transaction Documents shall
be deemed to also be a reference to the Trustee's and the Fiscal Agent's
respective obligations to make such Advance as and to the extent provided in the
Trust Agreement, and any reference herein or in the Special Servicing Agreement
to an Advance being reimbursable to the Servicer shall be deemed to also be a
reference to such Advance being reimbursable to the Trustee or the Fiscal Agent
if and to the extent actually made thereby.
Section 2.05 ADJUSTMENT OF SERVICING FEES.
(a) The total Servicing Fees payable to the Servicer with
respect to the Mortgage Pool for any Due Period shall be (i) reduced (to not
less than $0) by the amount, if any, by which the aggregate of all Prepayment
Interest Shortfalls for all Mortgage Loans for the related Distribution Date was
greater than the aggregate of all Excess Prepayment Interest for all Mortgage
Loans for such Distribution Date (such aggregate reduction to be allocable among
all the Mortgage Loans and any REO Loans PRO RATA in accordance with the
respective Servicing Fees otherwise payable in respect thereof for such Due
Period) and (ii) increased by the amount, if any, by which the aggregate of all
Excess Prepayment Interest for all Mortgage Loans for such Distribution Date was
greater than the aggregate of all Prepayment Interest Shortfalls for all
Mortgage Loans for such Distribution Date (such aggregate increase to be
allocable among the prepaid Mortgage Loans to which such Excess Prepayment
Interest relates PRO RATA in accordance with the respective amounts of such
Excess Prepayment Interest for such prepaid Mortgage Loans).
(b) The determination of the amount the Servicer is required
to remit to the Trustee on any Servicer Remittance Date shall be made taking
into account any adjustment to Servicing Fees pursuant to Section 2.05(a). The
rights of the Trustee to a reduction in the aggregate Servicing Fee for any Due
Period pursuant to Section 2.05(a) shall not be cumulative from one Due Period
to another. The amount of any increase in the aggregate Servicing Fee for any
Due Period pursuant to Section 2.05(a) may be withdrawn by the Servicer from the
Custodial Account, as provided in Section 2.02(a).
ARTICLE III
TERMINATION
Section 3.01 TERMINATION.
(a) The obligations of the Servicer under the Transaction
Documents (other than the obligations of the Servicer to remit to the Persons
entitled thereto the amounts on deposit in the Custodial Account in accordance
with Sections 2.02(a) and 2.02(b), the obligation of the Servicer to make
payments to the Trustee as set forth in Section 3.02 and the obligations of the
Servicer to the Trustee pursuant to Sections 4.09 and 4.23) shall terminate upon
the earliest of (i) the date which is the later of (A) the final payment or
other liquidation of the last Mortgage Loan remaining in the Trust Fund or (B)
the disposition of the last REO Property remaining in the Trust Fund, (ii) the
sale of all the Mortgage Loans and any REO Properties remaining in the Trust
Fund as contemplated by Section 3.03, or (iii) if an Event of Default
<PAGE>
19
pursuant to (A) clauses (i) or (ii) of Section 3.01(b) has occurred, one day
following the date on which the Trustee or the Depositor shall have given
written notice to the Servicer that the Servicer is terminated under this
Agreement, (B) clauses (v), (vi) or (vii) of Section 3.01(b) has occurred,
immediately upon delivery of written notice of termination by the Trustee or the
Depositor or (C) clauses (iii), (iv) or (viii) of Section 3.01(b) has occurred,
30 days following the delivery of written notice of termination by the Trustee
or the Depositor.
(b) "EVENT OF DEFAULT," wherever used herein, means any one of
the following events:
(i) any failure by the Servicer to deposit in the Custodial
Account when required any amount required to be so deposited under the
terms of the Transaction Documents or any failure by the Servicer to
make when due any required Advances; or
(ii) any failure by the Servicer to remit to the Trustee when
due any amount required to be so remitted under the terms of the
Transaction Documents, which failure continues unremedied at 12:00
noon, Central Time on the next Distribution Date to occur after the
date on which such amount was due to be so remitted; or
(iii) any failure on the part of the Servicer to duly observe
or perform in any material respect any other of the covenants or
agreements on the part of the Servicer contained in any of the
Transaction Documents which continues unremedied for a period of 45
days after the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Servicer by the
Depositor or the Trustee, except that to the extent the Trustee
determines that the Servicer is in good faith attempting to remedy such
failure and the Certificateholders shall not be materially and
adversely affected thereby, such cure period may be extended to the
extent necessary to permit the Servicer to cure such failure (no such
cure period to exceed 60 days, however, unless agreed to in writing by
each of the Rating Agencies); or
(iv) any breach of the representations and warranties
contained in Section 4.09 that materially and adversely affects the
interest of any Class of Certificateholders and that continues
unremedied for a period of 45 days after the date on which notice of
such breach, requiring the same to be remedied, shall have been given
to the Servicer by the Depositor or the Trustee, except that to the
extent such Trustee determines that the Servicer is in good faith
attempting to remedy such breach and the Certificateholders shall not
be materially and adversely affected thereby, such cure period may be
extended to the extent necessary to permit the Servicer to cure such
breach (no such cure period to exceed 60 days, however, unless agreed
to in writing by each of the Rating Agencies); or
(v) 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 proceeding,
or for the winding-up or liquidation of its affairs, shall have been
entered against the Servicer
<PAGE>
20
and such decree or order shall have remained in force undischarged or
unstayed for a period of 60 days; or
(vi) the 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 the Servicer or of
or relating to all or substantially all of its property; or
(vii) the 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
(viii) a change in the status of the Servicer that would
result in a qualification, downgrading or withdrawal of any of the
ratings on the Certificates that are rated.
Section 3.02 PROCEDURE UPON TERMINATION.
(a) Notice of any termination pursuant to clause (i) of
Section 3.01(a), specifying the Servicer Remittance Date upon which the final
transfer by the Servicer to the Trustee shall be made, shall be given promptly
in writing by the Servicer to the Trustee no later than the later of (i) five
Business Days after the final payment or other liquidation of the last Mortgage
Loan or REO Property or (ii) the sixth day of the month of the final remittance.
Upon any such termination, the duties of the Servicer (other than the obligation
of the Servicer to pay to the Trustee the amounts remaining in the Custodial
Account as set forth below and the obligations of the Servicer to the Trustee
and the Depositor pursuant to Sections 4.09 and 4.23) shall terminate and the
Servicer shall transfer to the Trustee (for distribution to the Class R-I
Certificateholders in accordance with Section 8.03 of the Trust Agreement), the
amounts remaining in the Custodial Account after making the withdrawals
permitted to be made pursuant to clauses (i) through (xii) of Section 2.02(a)
and shall thereafter terminate the Custodial Account and any other account or
fund maintained by the Servicer with respect to the Mortgage Loans.
(b) Upon the effective date of any termination of the Servicer
pursuant to clause (iii) of Section 3.01, all authority, power and rights of the
Servicer under the Transaction Documents, whether with respect to the Mortgage
Loans or otherwise, shall terminate; provided that in no event shall the
termination of the Servicer be effective until the Trustee shall have succeeded
the Servicer as successor servicer or the Trustee or the Depositor has notified
the Servicer that another Person has been designated as successor servicer and
such successor servicer shall have assumed the Servicer's obligations and
responsibilities under the Transaction Documents. Except as provided in the next
sentence, the Trustee may not succeed the Servicer as servicer until and unless
it has satisfied the provisions that would apply to a Person succeeding to the
business of the Servicer set forth in clauses (iii) and (iv) of Section 4.18.
Notwithstanding the foregoing sentence, in the event that the Servicer is
terminated as a result of an event described in clauses (iv) through (vii) of
Section 3.01(b), the Trustee shall act as successor servicer immediately upon
delivery of a notice of termination to the Servicer and shall use best efforts,
within 90 days of assuming the duties of the Servicer, either to satisfy the
<PAGE>
21
conditions set forth in clauses (iii) and (iv) of Section 4.18 or to transfer
the duties of the Servicer to a successor servicer who has satisfied such
conditions. The Trustee is hereby authorized and empowered to execute and
deliver, on behalf of the Servicer, 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 Servicer agrees to
cooperate with the Trustee in effecting the termination of the Servicer's
responsibilities and rights under the Transaction Documents as servicer,
including, without limitation, notifying Mortgagors of the assignment of the
servicing function, providing the Trustee and the successor servicer with all
documents and records in electronic or other form reasonably requested by either
of them to enable the successor servicer to assume the Servicer's functions
under the Transaction Documents and transferring to such successor for
administration by it of all amounts which shall at the time be or should have
been deposited by the Servicer in the Custodial Account and any other account or
fund maintained by or on behalf of the Servicer or thereafter received with
respect to the Mortgage Loans or any REO Properties. Any costs and expenses
associated with the transfer of the servicing function under this Agreement
shall be borne by the predecessor servicer and, if not paid by such predecessor
servicer within 30 days of its receipt of an invoice regarding such costs, shall
be paid by the Trust Fund.
(c) Upon a resignation of the Servicer as permitted by Section
4.19 or a termination of the Servicer for cause, the Servicer shall be entitled
to reimbursement of any outstanding Advances (with interest at the Advance Rate)
made by the Servicer prior to the termination of the services of the Servicer.
The successor servicer may elect to reimburse such Advances to the Servicer that
has resigned or been terminated for cause, and, if such successor servicer so
elects to reimburse such Advances (and pay such Advance Interest), then such
successor shall be entitled to reimbursement therefor under the Transaction
Documents as if such successor has originally made such Advances. If such
successor does not elect to so reimburse such Advances to the Servicer that has
resigned or been terminated for cause, then, notwithstanding the provisions of
Section 2.02(a), such Advances (and Advance Interest) will be reimbursed to the
Servicer that resigned or was terminated for cause after reimbursement of any
Advances of the Trustee, the Fiscal Agent or any successor servicer, to the
extent funds are available therefor, during the first 120 days after such
resignation or termination, and, thereafter, such Advances (and Advance
Interest) will be reimbursed at the same time that any Advances (and Advance
Interest) of the successor servicer are reimbursed, from funds available
therefor, with one dollar being reimbursed to the resigned or terminated
servicer for every dollar reimbursed to such successor servicer. The successor
servicer shall provide to the Servicer that has resigned or been terminated (and
whose Advances have not been reimbursed by the successor servicer) monthly
reports of the status of all Advances and the reimbursement thereof until such
time as the resigned or terminated Servicer shall have received reimbursement of
all its Advances and accrued interest thereon.
<PAGE>
22
Section 3.03 OPTIONAL CLEAN-UP CALL.
At any time after the Aggregate Certificate Principal Balance
of the Sequential Pay Certificates is reduced to an amount less than or equal to
5% of the Aggregate Certificate Principal Balance of the Sequential Pay
Certificates as of the Closing Date, the Servicer may give written notice to the
Trustee (a "CLEAN-UP NOTICE") that it elects to purchase all the Mortgage Loans
and any REO Properties, at the Termination Price and on the other terms and
conditions set forth in Section 8.01 of the Trust Agreement and the Trustee
shall deliver a copy of such notice to the Class R-III Certificateholders.
Within ten Business Days after a Clean-Up Notice has been sent by the Trustee,
the Class R-III Certificateholders shall either (i) notify the Trustee that they
will purchase such Mortgage Loans and REO Properties pursuant to such Section
8.01 of the Trust Agreement and the Servicer's right to do so shall expire or
(ii) notify the Trustee that they will not purchase such Mortgage Loans and REO
Properties and that the Servicer shall be entitled to purchase such Mortgage
Loans and REO Properties as provided in Section 8.01 of the Trust Agreement. If
the Class R-III Certificateholders provide the notice specified in clause (ii)
above, or provide neither the notice specified in clause (i) or clause (ii)
above, within such period of ten Business Days, the Servicer shall be obligated
to purchase such Mortgage Loans and REO Properties at the Termination Price and
on the other terms and conditions set forth in Section 8.01 of the Trust
Agreement. If the Servicer purchases such Mortgage Loans and REO Properties,
this Agreement shall thereupon terminate. If the Class R-III Certificateholders
purchase such Mortgage Loans and REO Properties, the Class R-III
Certificateholders shall appoint a successor servicer for such Mortgage Loans
and REO Properties, and upon the completion of the transfer of servicing of such
Mortgage Loans and REO Properties from the Servicer to such successor servicer,
this Agreement shall terminate unless the Servicer and such Certificateholders
otherwise agree in writing. The transfer of servicing to a successor servicer
shall be effected in the same manner that a transfer of servicing would be
effected pursuant to a termination of the Servicer's services under the
Transaction Documents as provided in Section 3.02(b).
ARTICLE IV
ADMINISTRATION AND SERVICING OF
MORTGAGE LOANS BY THE SERVICER AND THE SPECIAL SERVICER
Section 4.01 DUTIES OF THE SERVICER.
(a) For and on behalf of the Certificateholders and the
Trustee, the Servicer shall service the Mortgage Loans (other than the Specially
Serviced Mortgage Loans) in the best interests of the Trust and the
Certificateholders in accordance with applicable law and the provisions of the
Transaction Documents, the respective Mortgage Loans and the related Insurance
Policies and, to the extent consistent with the foregoing, in accordance with
Accepted Servicing Practices.
(b) The Servicer, in the case of an event specified in clause
(A) below, and the Special Servicer, in the case of an event specified in clause
(B) below, shall each send a written notice to the other and to the Trustee
within two Business Days (or earlier, if required
<PAGE>
23
by Accepted Servicing Practices) after becoming aware (A) that a Servicing
Transfer Event has occurred with respect to a Mortgage Loan or (B) that a
Mortgage Loan has become a Rehabilitated Mortgage Loan, which notice shall
identify the applicable Mortgage Loan and, in the case of (A) above, the
Servicing Transfer Event that occurred.
(c) Upon the occurrence of a Servicing Transfer Event with
respect to a Mortgage Loan, the Servicer shall mark its records for such
Mortgage Loan to cause any bills for amounts due on such Mortgage Loan to be
sent thereafter to the Special Servicer rather than the related Mortgagor. Upon
receipt of any such bill, the Special Servicer shall, within two Business Days,
advise the Servicer as to whether such bill should be sent to the Mortgagor and
of any changes to be made, and return the bill to the Servicer. The Servicer
shall thereafter promptly send the corrected bill to the Mortgagor unless the
Special Servicer has requested that such bill not be sent to the Mortgagor. If a
Mortgage Loan becomes a Rehabilitated Mortgage Loan, the Servicer shall bill the
Mortgagor as it did before such Mortgage Loan became a Specially Serviced
Mortgage Loan or as otherwise appropriate.
(d) All amounts collected by the Servicer with respect to a
Specially Serviced Mortgage Loan (other than a Mortgage Loan as to which the
related Mortgaged Property (or, in the case of a Cross-Collateralized Mortgage
Loan, the related Primary Mortgaged Property) has become an REO Property) shall
be deposited in the Custodial Account. The Servicer shall, upon receipt of any
such payment, notify the Special Servicer by facsimile of the receipt of such
payment and the amount thereof and shall include in such facsimile transmission
a copy of both sides of any check and a copy of any related correspondence. The
Special Servicer shall, within two Business Days thereafter, instruct the
Servicer in writing as to the application of such payment.
(e) On or prior to the Closing Date, the Depositor shall cause
copies of the Mortgage Files for each Mortgage Loan to be delivered to the
Servicer and the Special Servicer.
Section 4.02 FIDELITY BOND AND ERRORS AND OMISSIONS
INSURANCE POLICY.
(a) The Servicer, at its expense, shall maintain in effect a
Servicer Fidelity Bond and a Servicer Errors and Omissions Insurance Policy with
a Qualified Insurer, naming LaSalle National Bank as Trustee on behalf of the
Certificateholders as a certificateholder under such policy as loss payee and
affording coverage for all the Servicer's directors, officers and employees and
other Persons acting on behalf of the Servicer. The Servicer Errors and
Omissions Insurance Policy and Servicer Fidelity Bond shall be in such form and
amount as would meet the requirements of FNMA or FHLMC if FNMA or FHLMC were the
purchaser of the Mortgage Loans that are multifamily Mortgage Loans, and shall
be in such form as is customary for servicers of commercial mortgage loans, in
the case of the Mortgage Loans that are commercial mortgage loans. Copies of the
Servicer Errors and Omissions Insurance Policy and Servicer Fidelity Bond shall
be delivered to the Trustee promptly following the Closing Date.
(b) The Servicer shall promptly report in writing to the
Trustee any material changes that may occur in the Servicer Fidelity Bond or the
Servicer Errors and Omissions Insurance Policy and shall furnish to the Trustee
copies of all binders and policies or certificates
<PAGE>
24
evidencing that such bond and insurance policy are in full force and effect. The
Servicer shall promptly report in writing to the Trustee all cases of
embezzlement, fraud or irregularities of operation relating to the servicing of
the Mortgage Loans by the Servicer and its employees, officers, directors,
agents and representatives. The total of such losses, regardless of whether
claims are filed with the applicable insurer or surety, shall be disclosed in
any such report, together with the amount of such losses covered by insurance.
If a bond or insurance claim report is filed with any of the Servicer's bonding
companies or insurers relating to the Mortgage Loans or the servicing thereof, a
copy of such report (which report may omit any references to individuals
suspected of such embezzlement, fraud or irregularities of operation) shall be
promptly furnished to the Trustee. Copies of any notices furnished to the
Trustee pursuant to this Section 4.02(b) shall be furnished to the Rating
Agencies by the Servicer.
Section 4.03 THE SERVICER'S FINANCIAL STATEMENTS AND
RELATED INFORMATION.
The Servicer shall deliver to the Trustee and the Rating
Agencies, within 90 days after the end of its fiscal year, a copy of its annual
financial statements or the consolidated annual financial statements of its
parent, such financial statements to be audited by a nationally recognized firm
of Independent Accountants. The Servicer shall notify the Trustee, as of the
Closing Date, of the Servicer's fiscal year and shall notify the Trustee
promptly after any change thereof.
Section 4.04 THE SERVICER TO ACT AS SERVICER.
(a) Except as otherwise provided in Sections 4.01, 4.25 or
4.29, the Servicer shall service and administer the Mortgage Loans other than
the Specially Serviced Mortgage Loans and shall, subject to Sections 4.01, 4.25,
4.29, 5.01 and 5.02 and as otherwise provided herein, have full power and
authority to do any and all things which it may deem necessary or desirable in
connection with such servicing and administration. Without limiting the
generality of the foregoing and subject to Sections 4.01, 4.25, 4.29, 5.01 and
5.03 and as may otherwise be provided herein, the Servicer is hereby authorized
and empowered, at such time as the Servicer determines it appropriate in the
exercise of reasonable business judgment and in accordance with Accepted
Servicing Practices, to execute and deliver, on behalf of itself, the Trustee,
the Trust or any of them, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge and all other
comparable instruments, financing statements and continuation statements, with
respect to the Mortgage Loans (other than the Specially Serviced Mortgage Loans)
and with respect to the related Mortgaged Properties. The Trustee shall furnish
to the Servicer, upon request, powers of attorney of the Trustee, empowering the
Servicer to take such actions as it determines to be reasonably necessary to
comply with its servicing, administrative and management duties under the
Transaction Documents, and to execute and deliver instruments of satisfaction or
cancellation, and to appeal, prosecute or defend in any court action relating to
such Mortgage Loans or any related Mortgaged Property, in accordance with its
servicing and administrative duties under the Transaction Documents, and the
Trustee shall execute and deliver or cause to be executed and delivered such
other documents as a Servicing Officer may request, necessary or appropriate to
enable the Servicer to service and administer such Mortgage Loans and carry out
its servicing and administrative duties under the Transaction Documents, in each
case in accordance with Accepted Servicing Practices and the terms of the
Transaction Documents. In the performance of its duties under the Transaction
<PAGE>
25
Documents, the Servicer shall be an independent contractor and shall not, except
in those instances where it is, after notice to the Trustee as provided above,
taking action in the name of any Trustee, be deemed to be the agent of such
Trustee. The Servicer shall not have any responsibility or liability for any act
or omission of the Trustee, the Special Servicer, the Depositor or the Fiscal
Agent that is not attributable to the failure of the Servicer to perform its
obligations under the Transaction Documents.
(b) In servicing and administering the Mortgage Loans (that
are not Specially Serviced Mortgage Loans), the Servicer shall employ procedures
(including, but not limited to, collection procedures) consistent with Accepted
Servicing Practices. The Servicer may advance, as Servicing Advances on any
Defaulted Mortgage Loan, any amounts not specifically provided for under the
Transaction Documents if (i) it determines in its reasonable business judgment,
that advancing such amount will increase the Trust's recovery on the Mortgage
Loan and (ii) it furnishes to the Trustee a Nondisqualification Opinion in
connection with such advance, the expense of which shall be a Servicing Advance.
Section 4.05 COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR
ITEMS.
(a) If under the terms of any of the Mortgage Loans, the
Servicer shall have the right to establish escrow or impound accounts, the
Servicer shall, in addition to the Custodial Account, establish and maintain one
or more custodial accounts, each of which shall be an Eligible Account or an
account designated by the Mortgagor if the terms of the Mortgage Loan so require
(each, an "ESCROW ACCOUNT") and shall deposit therein within one Business Day
after receipt any collections of Escrow Amounts for the account of the
respective Mortgagor and such other amounts as are required to be escrowed or
impounded under the terms of any Mortgage Loan. Subject to the terms of any
related Mortgage Note and Mortgage, and further subject to applicable law, any
funds in any Escrow Account may be invested in Eligible Investments that mature
prior to the date on which payments have to be made out of the related Escrow
Account and any such Eligible Investment shall not be sold or disposed of prior
to its maturity. However, if any loss is incurred on any such investment (unless
the Mortgage Note or Mortgage specifies the investment), the Servicer shall
compensate for the full amount of such loss by depositing into the appropriate
Escrow Account out of its own funds an amount equal to such loss and shall not
be entitled to reimbursement therefor. Withdrawals from any Escrow Account may
be made (to the extent amounts have been escrowed for such purpose and to the
extent permitted by the related Mortgage or Mortgage Note) only (i) to effect
timely payment of Escrow Amounts in connection with the related Mortgage Loan,
(ii) to reimburse the Servicer out of related collections for Servicing Advances
with respect to Escrow Amounts, (iii) to refund to any Mortgagors any sums
determined to be overages, (iv) to pay interest, if any, owed to any Mortgagors
on such account to the extent required by law and the related Mortgage Loan
documents, (v) for application to restoration or repair of the related Mortgaged
Property or (vi) to clear and terminate the Escrow Account on the termination of
this Agreement. The Servicer shall be entitled to all investment income on any
Escrow Account not required to be paid to Mortgagors pursuant to the preceding
sentence. The Servicer shall make Servicing Advances to the extent necessary to
make the payments (to the extent that such payments are required pursuant to any
Mortgage Loan to be paid by the Mortgagor and are not either paid or deposited
in the Escrow Account) referred to in clause (i) above to the extent funds in
the related Escrow Account are insufficient for such purpose. In addition, the
Servicer shall advance any other
<PAGE>
26
amounts necessary to protect the Trust's security interest in any Mortgaged
Property, which amount shall be treated as a Servicing Advance recoverable
pursuant to Section 2.02(a). The Special Servicer shall remit to the Servicer,
within two Business Days after receipt thereof, any amounts the Special Servicer
has received and identified as Escrow Amounts with respect to Specially Serviced
Mortgage Loans.
(b) The Servicer shall maintain, or cause to be maintained,
accurate records with respect to each Mortgaged Property (including Mortgaged
Properties relating to Specially Serviced Mortgage Loans but not including
records with respect to REO Property) reflecting the status of ground rents,
taxes, assessments, water rates, sewer rates and other similar items that are or
may become a lien thereon and the status of Standard Hazard Insurance Policy
premiums payable in respect thereof. The Servicer shall deliver to the Trustee,
on an annual basis, a certification that each Mortgaged Property is covered by a
Standard Hazard Insurance Policy or any other insurance required by the terms of
this Agreement or the related Mortgage Loan. The Servicer shall obtain, from
time to time, all bills for the payment of such items (including renewal
premiums) and shall effect, or cause to be effected, payment thereof prior to
the applicable penalty or termination date, employing for such purpose Escrow
Amounts as allowed under the terms of the related Mortgage Loan. To the extent
that a Mortgage Loan does not require a Mortgagor to make payments for taxes,
Standard Hazard Insurance Policy premiums and similar items in escrow, the
Servicer shall use its reasonable best efforts in accordance with Accepted
Servicing Practices to require that any such payments be made by the Mortgagor.
The Servicer shall use its reasonable best efforts to require the Mortgagor to
reimburse it for any costs incurred by the Servicer in effecting the timely
payment of taxes and assessments on the properties securing the Mortgage Loans
(that are not Specially Serviced Mortgage Loans). Any extraordinary costs (but
not ordinary, routine costs) of effecting the timely payment of taxes,
assessments, and insurance premiums owed by any Mortgagor shall be recoverable
by the Servicer as Servicing Advances pursuant to Section 2.02(a). If a
Mortgagor (including a Mortgagor under a Specially Serviced Mortgage Loan) fails
to make any such payment on a timely basis, or if collections from the Mortgagor
are insufficient to pay any such item when due, the Servicer shall make, in
accordance with Accepted Servicing Practices, a Servicing Advance in the amount
of any shortfall from its own funds, but only to the extent that the related
Mortgage Loan requires the Mortgagor to pay such amounts and the Mortgagor has
failed to do so. Such Servicing Advances shall be recoverable by the Servicer
pursuant to Section 2.02(a). The Special Servicer shall remit to the Servicer,
within two Business Days after receipt thereof, any amounts the Special Servicer
has received and identified as payments in respect of taxes or insurance
premiums with respect to any Specially Serviced Mortgage Loans.
(c) If a Mortgagor under a Specially Serviced Mortgage Loan
fails to make such payments in respect of taxes, assessments, water rates, sewer
rates, Standard Hazard Insurance Policy Premiums or other similar items on a
timely basis, then the Special Servicer shall use its reasonable best efforts in
accordance with Accepted Servicing Practices (as defined in the Special
Servicing Agreement) and the terms of the Special Servicing Agreement, to
require that any such payment be made by the Mortgagor and take such other
actions with respect thereto permitted or required by the Special Servicing
Agreement. The Servicer shall make Servicing Advances to the extent necessary in
order to make the payments referred to in this Section 4.05(c) of amounts that
the Mortgagor is required by the terms of the Mortgage Loan to pay and has
failed to pay with respect to Specially Serviced Mortgage Loans, and the
<PAGE>
27
Special Servicer shall use its reasonable best efforts to recover such amounts
from the applicable Mortgagor. Such Servicing Advance shall be recoverable by
the Servicer pursuant to Section 2.02(a).
Section 4.06 [ RESERVED ]
Section 4.07 RELEASE OF MORTGAGE FILES.
(a) Upon becoming aware of the payment in full of the balance
of any Mortgage Loan, or the receipt by the Servicer of a notification that
payment in full will be escrowed in a manner customary for such purposes, the
Servicer will immediately notify the Trustee by a certification substantially in
the form of EXHIBIT A hereto (which certification shall include a statement to
the effect that all amounts received in connection with such payment that are
required to be deposited in the Custodial Account pursuant to Section 2.01 have
been or will be so deposited) of a Servicing Officer and shall request delivery
to the Servicer of the related Mortgage File. Upon receipt of such certification
and request, the Trustee shall promptly release or cause the release of the
related Mortgage File to the Servicer, and the Trustee shall have no further
responsibility with regard to such Mortgage File. Upon receipt of such payment
in full, the Servicer is authorized to give an instrument of satisfaction (or
assignment of mortgage without recourse) regarding the Mortgaged Property
subject to the related Mortgage, which instrument of satisfaction or assignment,
as the case may be, shall be delivered to the Person or Persons entitled thereto
against receipt therefor of such payment, it being understood and agreed that no
expenses incurred in connection with such instrument of satisfaction or
assignment, as the case may be, shall be chargeable to the Custodial Account. If
the Mortgage Loan with respect to which an instrument of satisfaction is to be
given is a Specially Serviced Mortgage Loan, the Servicer shall not deliver such
instrument of satisfaction unless and until the Servicer has obtained the prior
written approval of the Special Servicer.
(b) From time to time and as appropriate for the servicing of
any Mortgage Loan (other than a Specially Serviced Mortgage Loan) and in
accordance with Accepted Servicing Practices, the Trustee shall execute or cause
to be executed such documents as shall be prepared and furnished to the Trustee
by a Servicing Officer (in form reasonably acceptable to the Trustee) and as are
necessary for such purposes. The Trustee shall, upon request of the Servicer and
delivery to the Trustee of a trust receipt signed by a Servicing Officer
substantially in the form of EXHIBIT A hereto, release the related Mortgage File
to the Servicer. However, at no time may the Servicer have in its possession,
pursuant to this Section 4.07(b), more than 5% of the total number of Mortgage
Files, unless a Servicing Officer certifies to the Trustee that a larger number
is necessary to properly service the Mortgage Loans. Such trust receipt shall
obligate the Servicer to return the Mortgage File to the Trustee when the
necessity of possession by the Servicer no longer exists, unless the Mortgage
Loan shall be liquidated, in which case, upon receipt of a certificate of a
Servicing Officer to that effect, the trust receipt shall be released by the
Trustee to the Servicer.
(c) Upon receipt by the Servicer of a request from the Special
Servicer, the Servicer shall promptly, with respect to any Specially Serviced
Mortgage Loan, release to the Special Servicer documents and instruments in the
possession of the Servicer related to such Specially Serviced Mortgage Loan that
the Special Servicer requests to be delivered to it in
<PAGE>
28
connection with servicing the Specially Serviced Mortgage Loan and cooperate
with the Special Servicer in providing such documents, files, reports and
information and taking such actions (or refraining from taking such actions)
with respect to Specially Serviced Mortgage Loans as the Special Servicer may
reasonably request. However, the Servicer shall not be required to take any
action or provide any information that the Servicer determines will result in
any material cost or expense to which it is not entitled to reimbursement
hereunder or will result in any material liability for which it is not
indemnified hereunder.
Section 4.08 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF
THE SERVICER TO BE HELD FOR THE TRUSTEE.
(a) The Servicer shall transmit to the Trustee such documents
and instruments coming into the possession of the Servicer as are required by
the terms hereof to be delivered from time to time to the Trustee. The Servicer
shall provide access to information and documentation regarding the Mortgage
Loans to the Trustee, the Special Servicer, the Fiscal Agent and their
respective agents and accountants at any time upon reasonable request and during
normal business hours. In fulfilling any such request, the Servicer shall not be
responsible for determining whether such information is sufficient for the
Trustee's, Special Servicer's or the Fiscal Agent's purposes.
(b) All Mortgage Files and funds collected or held by, or
under the control of, the Servicer in respect of any Mortgage Loans, whether
from the collection of principal and interest payments or Principal Prepayments
or from Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds or
otherwise (but excluding any Servicing Fees, and all other amounts to which the
Servicer is entitled to hereunder, and excluding Retained Yield), shall be held
in trust by the Servicer for and on behalf of the Trust and shall be and remain
the sole and exclusive property of the Trust (any Retained Yield to be held in
trust by the Servicer for and on behalf of the related Retained Yield Holder).
(c) The Servicer hereby acknowledges that the Trust owns the
Mortgage Loans and all Mortgage Files representing such Mortgage Loans and all
funds now or hereafter held by, or under the control of, the Servicer that are
collected by the Servicer in connection with the Mortgage Loans, whether as
scheduled installments of principal and interest or as full or partial payments
of principal or interest or as Liquidation Proceeds, Condemnation Proceeds,
Insurance Proceeds or otherwise, and all proceeds of the foregoing and proceeds
of proceeds (but excluding any Servicing Fees and all other amounts to which the
Servicer is entitled to hereunder, and excluding Retained Yield); and the
Servicer agrees that all documents or instruments constituting part of the
Mortgage Files, and such funds relating to the Mortgage Loans which come into
the possession or custody of, or which are subject to the control of, the
Servicer, shall be held by the Servicer in trust for and on behalf of the Trust
(except for any Retained Yield which shall be held by the Servicer in trust for
and on behalf of the related Retained Yield Holder).
(d) The Servicer also agrees that it shall not create, incur
or subject any Mortgage Loans, or any funds that are deposited in any Escrow
Account or the Custodial Account, or any funds that otherwise are or may become
due or payable to the Trust, to any claim, lien, security interest, judgment,
levy, writ of attachment or other encumbrance, and shall
<PAGE>
29
not assert by legal action or otherwise any claim or right of setoff against any
Mortgage Loan or any funds, including those in the Custodial Account, collected
on, or in connection with, any Mortgage Loan. However, the Servicer shall be
entitled to setoff against, and deduct from, any such funds any amounts that are
properly due and payable by the Trust to the Servicer under the Transaction
Documents.
Section 4.09 REPRESENTATIONS, WARRANTIES AND COVENANTS OF
THE SERVICER.
(a) The Servicer hereby represents and warrants to and
covenants with the Trustee, for the benefit of the Certificateholders, as of the
Closing Date:
(i) the Servicer is duly organized, validly existing and in
good standing as a corporation under the laws of the State of
California, and is, and shall remain, in compliance with the laws of
each state in which any Mortgaged Property is located to the extent
necessary to perform its obligations under the Transaction Documents;
(ii) the Servicer has the full power and authority to execute,
deliver, perform, and to enter into and consummate all transactions and
obligations of the Servicer contemplated by, the Transaction Documents.
The Servicer's execution, delivery and performance of the Transaction
Documents has been authorized by all requisite corporate action. Each
of the Transaction Documents evidences the valid and binding obligation
of the Servicer enforceable against the Servicer in accordance with its
terms subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium and other similar laws affecting
creditors' rights generally as from time to time in effect, and to
general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law);
(iii) neither the execution and delivery of the Transaction
Documents, the consummation of the transactions contemplated by the
Transaction Documents, nor the fulfillment of or compliance with the
terms and conditions of the Transaction Documents will: (A) conflict
with or result in a breach of any of the terms, conditions or
provisions of the Servicer's organizational documents or any material
agreement or instrument to which the Servicer is now a party or by
which it is bound, or constitute a default or result in an acceleration
under any of the foregoing, (B) result in the violation of any law,
rule, regulation, order, judgment or decree to which the Servicer or
its property is subject that would materially and adversely affect the
Servicer's ability to perform its obligations under the Transaction
Documents or (C) result in the creation or imposition of any material
lien, charge or encumbrance upon any of its properties pursuant to the
terms of any trust agreement, indenture, mortgage, deed of trust,
contract or other instrument;
(iv) each officer, director, employee, consultant or advisor
of the Servicer with responsibilities concerning the servicing and
administration of Mortgage Loans is covered by errors and omissions
insurance in the amounts and with the coverage required by Section
4.02. Neither the Servicer nor any of its officers, directors,
employees, consultants or advisors involved in the servicing or
administration of Mortgage Loans has been refused such coverage or
insurance;
<PAGE>
30
(v) there is no action, suit, or proceeding pending or, to the
best of the Servicer's knowledge, threatened against the Servicer that,
either in any one instance or in the aggregate, would draw into
question the validity of the Transaction Documents or of any action
taken or to be taken in connection with the obligations of the Servicer
under the Transaction Documents, or which would be likely to impair
materially the ability of the Servicer to perform under the terms of
the Transaction Documents;
(vi) the Servicer is not in default with respect to any order
or decree of any court or any order, regulation or demand of any
federal, state, municipal or other governmental agency, which default
would materially and adversely affect its performance under the
Transaction Documents;
(vii) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Servicer of, or compliance by the
Servicer with, the terms of the Transaction Documents or the
consummation of the transactions contemplated by the Transaction
Documents;
(viii) the Servicer has not filed for relief under any
bankruptcy or similar statute and is not insolvent and does not expect
to file for such relief or to become insolvent;
(ix) the consummation of the transactions contemplated by the
Transaction Documents are in the ordinary course of the business of the
Servicer; and
(x) the Servicer holds all material licenses, certificates and
permits from all governmental authorities necessary for conducting its
business as it is presently conducted. The Servicer is, and, to the
extent necessary to perform its duties under the Transaction Documents,
will take all steps necessary to be permitted to do business in each
state in which the Mortgaged Properties (including the REO Properties)
are located.
(b) It is understood that the representations and warranties
set forth in this Section 4.09 shall survive the execution and delivery of the
Transaction Documents. The Servicer shall indemnify the Depositor, the Trustee,
the Special Servicer and the Trust and hold each of them harmless against any
and all losses, damages, penalties, fines, forfeitures, reasonable legal fees
and related costs, judgments, and other costs and expenses resulting from any
claim, demand, defense or assertion based on or resulting from, a breach of such
Servicer's representations and warranties contained in this Section 4.09. Such
indemnification shall survive any termination or resignation of the Servicer,
the Trustee or the Fiscal Agent under the Transaction Documents.
(c) Any cause of action against the Servicer arising out of
the breach of any representations or warranties made in this Section 4.09 shall
accrue upon discovery of such breach by the Trustee or the Servicer. The
Servicer shall give prompt notice to the Trustee, the Depositor and the Special
Servicer of the occurrence, or the failure to occur, of any event that, with
notice, the passage of time or both, would cause any representation or warranty
in this Section 4.09 to be untrue or inaccurate in any respect.
<PAGE>
31
Section 4.10 STANDARD HAZARD AND FLOOD INSURANCE POLICIES.
(a) To the extent consistent with Accepted Servicing
Practices, for each Mortgage Loan that requires the Mortgagor to, or permits the
Mortgagee to require the Mortgagor to, maintain such insurance, the Servicer
shall cause the related Mortgagor to maintain fire and casualty insurance with
extended coverage in an amount which is not less than the lesser of (i) the full
replacement cost of the improvements securing such Mortgage Loan or (ii) the
Unpaid Principal Balance of such Mortgage Loan, but, in any event, in an amount
sufficient to avoid the application of any co-insurance clause, with a
deductible not to exceed a customary amount for the risk insured and with a
replacement cost rider providing no deduction for depreciation, unless otherwise
specified by the related Mortgage Loan. To the extent permitted by the terms of
the related Mortgage Loan, the Servicer shall require such insurance to be
obtained from a Qualified Insurer. If the Mortgagor fails to maintain the fire
and casualty insurance required by the related Mortgage Loan, the Servicer shall
obtain such insurance (which may be through a master or single interest blanket
insurance policy). The cost (including any deductible relating to such
insurance) of such insurance (or, in the case of a master or single interest
blanket insurance policy, the incremental cost (including any deductible
relating to such insurance) of such insurance related to the specific Mortgaged
Property), shall be a Servicing Advance and shall be recoverable by the Servicer
pursuant to Section 2.02(a). If, at any time, a Mortgaged Property is located in
an area identified in the Flood Hazard Boundary Map or Flood Insurance Rate Map
issued by the Federal Emergency Management Agency as having special flood
hazards or it becomes located in such an area by virtue of a remapping completed
by such agency (and flood insurance has been made available), the Servicer
shall, if and to the extent the Mortgage Loan requires the Mortgagor or permits
the Mortgagee to require the Mortgagor to do so, cause the related Mortgagor to
maintain a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration in the maximum amount of
insurance coverage available under the National Flood Insurance Act of 1968, the
Flood Disaster Protection Act of 1973 or the National Flood Insurance Reform Act
of 1994, as amended, unless otherwise specified by the related Mortgage Loan. If
(i) the Mortgagor is required by the terms of the Mortgage Loan to maintain such
insurance (or becomes so obligated by the terms of the Mortgage Loan by virtue
of the related Mortgaged Property becoming located in such an area by virtue of
such remapping) or (ii) the terms of the Mortgage Loan permit the Mortgagor to
require the Mortgagor to obtain such insurance, the Servicer shall promptly
notify the Mortgagor of its obligation to maintain such insurance. If the
Mortgagor fails to obtain such flood insurance within 120 days of such
notification, the Servicer shall obtain such insurance, the cost of which shall
be a Servicing Advance and shall be recoverable by the Servicer pursuant to
Section 2.02(a). It is understood and agreed that the Servicer shall cause to be
maintained with respect to each Mortgaged Property all other insurance coverage
required by the related Mortgage Loan documents (including, without limitation,
earthquake insurance coverage), and to the extent that such Mortgage Loan
documents provide that the insurance coverage required with respect to such
Mortgaged Property shall be within the discretion of the Mortgagee, the Servicer
shall require all such coverage required by law and consistent with Accepted
Servicing Practices, including, without limitation, insurance relating to
vandalism and malicious mischief, business interruption, loss of rental value,
business automobile liability, liquor liability, personal and advertising
liability, false arrest, libel and slander, as applicable. If the Mortgagor
fails to maintain such other insurance coverage, the Servicer shall obtain such
insurance, the cost of which shall be a
<PAGE>
32
Servicing Advance reimbursable pursuant to Section 2.02(a). All policies
required hereunder shall name the Servicer on behalf of the Trust as loss payee
and shall be endorsed with a standard mortgagee clause.
(b) Pursuant to Section 2.01, any amounts collected by the
Servicer under any insurance policies maintained pursuant to this Section 4.10
(other than amounts to be applied to the restoration or repair of the property
subject to the related Mortgage or released to the Mortgagor in accordance with
the terms of the related Mortgage Loan, applicable law and/or the Transaction
Documents, including, without limitation, Accepted Servicing Practices) shall be
deposited into the Custodial Account, subject to withdrawal pursuant to Section
2.02(a). Any cost incurred by the Servicer in enforcing the obligations of the
Mortgagor to maintain insurance shall be treated as additional amounts owing by
the Mortgagor where the terms of the Mortgage Loan so permit, and shall be
Servicing Advances recoverable by the Servicer pursuant to Section 2.02(a).
(c) In the event that the Servicer shall obtain and maintain a
blanket policy issued by a Qualified Insurer insuring against hazard losses on
all of the Mortgage Loans (other than as provided in Section 4.10(a)), it shall
conclusively be deemed to have satisfied its obligation as set forth in this
Section 4.10 to maintain fire and casualty insurance, it being understood and
agreed that such policy may contain a deductible clause, in which case the
Servicer shall, in the event that there shall not have been maintained on the
related Mortgaged Property an insurance policy complying with the first sentence
of Section 4.10(a) and there shall have been a loss which would have been
covered by such a policy had it been maintained, be required to deposit from its
own funds into the Custodial Account the amount not otherwise payable under the
blanket policy because of such deductible clause. The cost of any such blanket
policy shall be an expense of the Servicer and not of the Trust.
Section 4.11 PRESENTMENT OF CLAIMS AND COLLECTION OF
PROCEEDS.
(a) Subject to Accepted Servicing Practices, the Servicer
shall use its reasonable best efforts to monitor the Mortgaged Properties for
claims to be made under the Insurance Policies with respect to the Mortgage
Loans and shall prepare and present or cause to be prepared and presented on
behalf of the Trustee all claims of which it has knowledge under the Insurance
Policies with respect to the Mortgage Loans, and take such actions (including
the negotiation, settlement, compromise or enforcement of the insured's claim)
as shall be necessary to realize recovery under such policies. Any extraordinary
costs (but not ordinary, routine costs) of taking the actions required by the
preceding sentence shall be recoverable by the Servicer as Servicing Advances
pursuant to Section 2.02(a). Any proceeds disbursed to the Servicer in respect
of such policies shall be promptly deposited in the Custodial Account upon
receipt, except for any amounts realized that are to be applied to the repair or
restoration of the related Mortgaged Property or released to the Mortgagor in
accordance with the terms of the related Mortgage Loan, applicable law and the
Transaction Documents (including, without limitation, Accepted Servicing
Practices).
(b) In connection with the condemnation or casualty of a
Mortgaged Property, to the extent permitted by the terms of the related Mortgage
Loan, Insurance Proceeds and Condemnation Proceeds, after first deducting and
paying to the Servicer or the Trustee, the
<PAGE>
33
Servicer's or the Trustee's costs and expenses of collection, may be used by the
related Mortgagor to reimburse itself for the cost of restoration or repair, if
each of the following conditions are met:
(i) there is no payment default or material performance
default under the related Mortgage Loan;
(ii) if costs to complete full restoration or repair of the
related Mortgaged Property exceed the proceeds available therefor, the
Servicer has received from the related Mortgagor either (A) the amount
of such deficit or (B) a bond of completion or such other evidence
reasonably satisfactory to the Servicer of the Mortgagor's ability to
pay such additional costs;
(iii) (1) if the cost of repairs and restoration will, in the
reasonable estimate of the Servicer, not exceed $10,000, the Servicer
shall have been furnished information, reasonably requested by the
Servicer, regarding such repairs and restoration; and (2) if the cost
of such repairs and restoration will, in such reasonable estimate of
the Servicer, exceed $10,000, the Servicer shall have been furnished:
(A) for approval by it, an estimate of the cost of restoration or
repair of the related Mortgaged Property that has been certified to by
an architect reasonably acceptable to the Servicer; (B) by the
architect referred to in clause (A) above, final plans and
specifications for reconstruction of the building and related
improvements in respect of such Mortgaged Property, such plans and
specifications being reasonably satisfactory to the Servicer; and (C)
evidence to its reasonable satisfaction that there are no zoning or
land use restrictions that would preclude the related Mortgagor from
rebuilding or restoring the Mortgaged Property to its pre-casualty
conditions and characteristics (all documentation required by this
clause (iii) to be delivered within 60 days of receipt of notification
by the Mortgagor of the Servicer's election to apply any Insurance
Proceeds or Condemnation Proceeds to such restoration or repair); and
(iv) all other conditions for release of such Insurance
Proceeds or Condemnation Proceeds set forth in the related Mortgage
Loan documents have been satisfied.
If the foregoing conditions are met, the Servicer shall cause the
related Mortgagor to diligently proceed with the restoration or repair of the
affected Mortgaged Property. If any of the conditions above are not met, then
the Servicer, to the extent consistent with the terms of the related Mortgage
Loan(s), applicable law and Accepted Servicing Practices, shall apply any such
Insurance Proceeds or Condemnation Proceeds against amounts due under the
related Mortgage Loan.
Section 4.12 CONSENT TO THE MORTGAGOR REQUESTS.
Except with respect to Specially Serviced Mortgage Loans, to
the extent that one or more terms of the related Mortgage Loan documents
requires the consent of the Mortgagee thereunder, the Servicer is hereby
authorized, on behalf of the Trust, to so consent to the request by a Mortgagor
to the extent the following conditions have been satisfied:
<PAGE>
34
(i) there is no payment default or material performance
default under the related Mortgage Loan;
(ii) the action to which such consent relates cannot
reasonably be expected to result in the increase of the then current
Loan-to-Value Ratio for the related Mortgage Loan based on the latest
appraisal of the related Mortgaged Property in the Servicer's
possession;
(iii) the action to which such consent relates cannot
reasonably be expected to result in the decrease of the then current
Debt Service Coverage Ratio for the related Mortgage Loan (or, if such
Mortgage Loan is one of a Group of related CrossCollateralized Mortgage
Loans, for such Group), which may be determined on the basis of the
most recent available monthly, quarterly or annual financial statements
of the related Mortgaged Property or Properties if such financial
statements relate to a period ending not more than six months prior to
such determination;
(iv) the action to which such consent relates cannot
reasonably be expected to result in a lien on a related Mortgaged
Property that is not permitted under the terms of the related Mortgage
Loan documents;
(v) the action to which such consent relates complies with all
applicable legal requirements, including, without limitation, all
Environmental Laws, all zoning and building laws, ordinances and
regulations and any condition, easement, right of way, covenant or
restriction of record applicable to each related Mortgaged Property;
(vi) consent to such proposal otherwise is consistent with
Accepted Servicing Practices and is not inconsistent with any other
provisions of the Transaction Documents; and
(vii) to the extent any additional criteria are specified as a
condition to such consent, as set forth in the related Mortgage Loan
documents or otherwise, such criteria have been satisfied.
Section 4.13 TRANSFER OF CONTROL OF A MORTGAGOR.
The Servicer is hereby authorized, with the consent of the
Special Servicer, to approve a request for the transfer of a controlling
interest in a Mortgagor or, if applicable, the substitution of a Mortgagor's
general partner, if the conditions set forth in Section 4.12 above have been
satisfied and, in addition, the following conditions have been satisfied:
(i) the Special Servicer shall have received satisfactory
evidence that the proposed transferee is a creditworthy and suitable
Mortgagor, as determined in accordance with Accepted Servicing
Practices;
(ii) the proposed transferee shall have executed and delivered
to the Servicer for inclusion in the related Mortgage File a
separateness agreement substantially in the form executed and delivered
by the Mortgagor in connection with the origination of the
<PAGE>
35
Mortgage Loan (but only to the extent that such agreement was required
in connection with the origination of such Mortgage Loan);
(iii) the proposed transferee shall have executed and
delivered to the Servicer for inclusion in the related Mortgage File an
indemnity and guaranty agreement substantially in the form executed and
delivered by the Mortgagor in connection with the origination of the
Mortgage Loan (but only to the extent that such agreement was required
in connection with the origination of such Mortgage Loan);
(iv) the Servicer and the Special Servicer shall each have
been paid all sums due it (including, in the case of the Special
Servicer, the Assumption Fees), and shall have been reimbursed in full
for all costs and expenses incurred by it, in connection with such
proposed transfer (provided that in no event shall the total expense
reimbursement and Assumption Fee charged by the Servicer and the
Special Servicer exceed 1.5% of the Unpaid Principal Balance of the
related Mortgage Loan as of the date of the proposed transfer); and
(v) such proposed transfer would not constitute a "significant
modification" within the meaning of Treas. Reg. ss. 1.860G-2(b).
Section 4.14 SERVICER'S COMPENSATION.
The Servicer shall be entitled, as compensation, to the
Servicing Fee for each Mortgage Loan and REO Loan, investment earnings on
amounts in the Custodial Account, and, to the extent in excess of Advance
Interest in respect of the related Mortgage Loans, late payment charges
(exclusive of, in the case of the Mortgage Loans identified on the Mortgage Loan
Schedule by loan numbers 63 and 109, the portion of such late payment charges
payable to the related Retained Yield Holder) and Default Interest collected on
the Mortgage Loans. Subject to the terms of the related Mortgage Loan documents
and applicable law, the Servicer shall also be entitled to investment earnings
on amounts in, and shall reimburse the Trust for any investment losses in, any
Escrow Account maintained pursuant to Section 4.05(a). Reimbursement of all
expenses permitted by the terms of the Transaction Documents to be reimbursed
with respect to the related Mortgage Loan (including Advance Interest and
reimbursement of all Servicing Advances and P&I Advances) shall be governed by
Section 2.02(a) hereof and Article IV of the Trust Agreement. The Servicer shall
be required to pay all expenses incurred by it in connection with its servicing
activities under the Transaction Documents and shall not be entitled to
reimbursement therefor except as expressly provided in the Transaction
Documents. The provisions of this Section 4.14 are subject to the provisions of
Sections 2.02, 2.05 and 3.02(c).
Section 4.15 RESERVE ACCOUNTS.
The Servicer shall 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 to reimburse the related Mortgagor in connection with, the
related repairs and/or capital improvements at the related Mortgaged Property if
the repairs and/or capital improvements have been completed, or to
<PAGE>
36
otherwise be applied for their intended purpose, and such withdrawals are made
in accordance with Accepted Servicing Practices and the terms of the related
Mortgage Note, Mortgage and any other agreement with the related Mortgagor
governing such Reserve Funds. Each Reserve Account shall be an Eligible Account
or, if the terms of the Mortgage Loan so require, an account designated by the
Mortgagor.
Section 4.16 ANNUAL OFFICER'S CERTIFICATE AS TO
COMPLIANCE.
The Servicer shall deliver to the Trustee, the Depositor and
each Rating Agency on or before March 31 of each year, commencing with March 31,
1997, an Officer's Certificate certifying that, with respect to the preceding
calendar year: (i) the Servicing Officer signing such Officer's Certificate has
reviewed the activities of the Servicer during the preceding calendar year or
portion thereof and its performance under the Transaction Documents; and (ii) to
the best of such Servicing Officer's knowledge, based on such review, the
Servicer has performed and fulfilled its duties, responsibilities and
obligations under the Transaction Documents in all material respects throughout
such year, or, if there has been a default in the fulfillment of any such
duties, responsibilities or obligations, specifying each such default known to
such Servicing Officer and the nature and status thereof.
Section 4.17 ANNUAL INDEPENDENT ACCOUNTANTS' SERVICING
REPORT.
On or before March 31 of each year, beginning March 31, 1997,
the Servicer at its expense shall cause a firm of independent public accountants
(which may also render other services to the Servicer) with at least 250
professionals and that is a member of the American Institute of Certified Public
Accountants to furnish a statement to the Trustee, the Depositor and each Rating
Agency stating that (i) it has obtained a letter of representation regarding
certain matters from the management of the Servicer which includes an assertion
that the Servicer 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 (ii) on the basis of an examination
conducted by such firm in accordance with standards established 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.
Section 4.18 MERGER OR CONSOLIDATION OR BUSINESS
SUCCESSOR.
Any Person into which the Servicer may be merged or
consolidated, or any Person resulting from any merger, conversion, other change
in form or consolidation to which the Servicer shall be a party, or any Person
succeeding to the business of the Servicer, shall be the successor to the
Servicer under the Transaction Documents, without the execution or filing of any
paper or any further act on the part of any of the parties to any Transaction
Document,
<PAGE>
37
anything herein to the contrary notwithstanding; provided that: (i) such
successor or resulting Person shall be satisfactory to the Trustee; (ii) such
successor or resulting Person shall execute and deliver to the Trustee an
agreement, in form and substance satisfactory to the Trustee, which contains an
assumption by such Person of the due and punctual performance and observance of
each covenant and condition to be performed or observed by the Servicer under
the Transaction Documents from and after the date of such agreement; (iii) the
Rating Agencies shall be given prior written notice of the identity of the
proposed successor or resulting Person and the Rating Agencies shall have
confirmed in writing that the ratings on the Certificates will not be qualified,
downgraded or withdrawn by reason thereof; (iv) such successor or resulting
Person shall have a net worth of at least $10,000,000; and (v) the Servicer
shall deliver to the Trustee and any other Person designated by the Trustee an
Officer's Certificate and an Opinion of Counsel acceptable to the Trustee (which
opinion shall be an expense of the Servicer) stating that conditions (i) through
(iv) above have been complied with and the succession complies with the terms of
the Transaction Documents. If such conditions are not complied with, the Trustee
may terminate the Servicer's servicing of the Mortgage Loans pursuant to the
Transaction Documents, such termination to be effected in the manner set forth
in Section 3.02 as if an Event of Default had occurred and was continuing.
Section 4.19 RESIGNATION OF THE SERVICER.
(a) Except as set forth in Section 4.19(b), the Servicer shall
not resign from the obligations and duties imposed on it under the Transaction
Documents unless it determines that the Servicer's duties under the Transaction
Documents are no longer permissible under applicable law. Any such determination
permitting the resignation of the Servicer shall be evidenced by an Opinion of
Counsel to such effect delivered to the Trustee. No such resignation shall
become effective until a successor servicer designated by the Trustee shall have
assumed the Servicer's responsibilities and obligations under the Transaction
Documents and the Rating Agencies shall have confirmed in writing that such
designation shall not result in a qualification, downgrading or withdrawal of
the ratings on the Certificates that are then rated. Notice of such resignation
shall be given promptly by the Servicer to the Trustee. The costs or expenses
associated with the transfer of the servicing function upon resignation of the
Servicer under this Section 4.19 shall be borne by the resigning Servicer and,
if not paid within 30 days of its receipt of an invoice regarding such cost,
shall be paid by the Trust Fund.
(b) The Servicer may resign from the obligations and duties
imposed on it under the Transaction Documents at any time on or after October
31, 1997, upon reasonable notice to the Trustee, provided that (i) a successor
servicer is (A) available, (B) reasonably acceptable to the Operating Adviser,
the Depositor, and the Trustee and (C) willing to assume the obligations,
responsibilities and covenants to be performed under the Transaction Documents
by the Servicer on substantially the same terms and conditions, and for not more
than equivalent compensation, as herein provided, and (ii) the Rating Agencies
shall have confirmed in writing that such resignation and designation of a
successor servicer shall not result in a qualification, downgrade or withdrawal
of any rating of any of the Certificates then rated. Any costs of such
resignation and of obtaining a replacement Servicer shall be borne by the
resigning Servicer and shall not be an expense of the Trust. No such resignation
shall become effective unless and until such successor servicer enters into an
agreement with the Trustee, in form reasonably
<PAGE>
38
satisfactory to the Trustee, assuming the obligations and responsibilities of
the Servicer under the Transaction Documents.
Section 4.20 ASSIGNMENT OR DELEGATION OF DUTIES BY THE
SERVICER.
Except as expressly provided in this Agreement, the Servicer
shall not assign or transfer any of its rights, benefits or privileges under the
Transaction Documents as servicer to any other Person or subcontract with, or
authorize or appoint, any other Person to perform any of the duties, covenants
or obligations to be performed by the Servicer under the Transaction Documents.
Section 4.21 SUB-SERVICING.
(a) The Servicer may enter into Sub-Servicing Agreements to
provide for the performance by third parties of any or all of its obligations
under the Transaction Documents. Each Sub-Servicing Agreement shall: (i) be
consistent with the Transaction Documents in all material respects and require
the related Sub-Servicer to comply with all of the applicable provisions of the
Transaction Documents, other than the obligation of the Servicer to make
Advances; (ii) provide that the Trustee, for the benefit of the
Certificateholders, shall be a third party beneficiary under such agreement, but
that none of the Trustee, any successor Servicer or any Certificateholder shall
have any duties under such agreement or any liabilities arising therefrom; (iii)
permit the Servicer or the Depositor to terminate such agreement without penalty
upon the occurrence of an "event of default" thereunder; (iv) permit any
purchaser of a Mortgage Loan pursuant to this Agreement to terminate such
agreement with respect to such purchased Mortgage Loan at its option and without
penalty; (v) provide that if the Servicer ceases to serve as such under the
Transaction Documents for any reason (including by reason of an Event of
Default), the successor servicer may terminate such agreement or succeed to the
rights and assume the obligations of the Servicer thereunder; (vi) prohibit the
Sub-Servicer from entering into or consenting to any modification, waiver or
amendment of any term of any Mortgage Loan without the consent of the Servicer;
(vii) not permit the Sub-Servicer any rights of indemnification that may be
satisfied out of assets of the Trust; (viii) in the case of a
CrossCollateralized Mortgage Loan, cover all other related Cross-Collateralized
Mortgage Loans that are secured by Mortgages on the same Mortgaged Properties;
and (ix) provide for payment of a sub-servicing fee solely from the Servicing
Fee received by the Servicer hereunder. In addition, each Sub-Servicing
Agreement entered into by the Servicer shall provide that such agreement shall
terminate with respect to any Mortgage Loan serviced thereunder at any time (A)
upon such loan becoming a Specially Serviced Mortgage Loan, (B) at the time the
Servicer has made a Final Recovery Determination with respect to such Mortgage
Loan and (C) upon notice from the Depositor and payment to the Sub-Servicer of a
contractual termination fee, if any. However, if a Sub-Servicing Agreement is
terminated with respect to a Mortgage Loan due to the application of clause (A)
above, such Mortgage Loan will resume being sub-serviced pursuant to the related
Sub-Servicing Agreement if such Mortgage Loan ceases to be a Specially Serviced
Mortgage Loan. The Servicer 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.
References in this Agreement to actions taken or to be taken by the Servicer
include actions taken or to be taken by a Sub-Servicer on behalf of the
Servicer.
<PAGE>
39
(b) Each Sub-Servicer (i) shall be authorized to transact
business in the state or states in which the related Mortgaged Properties it is
to service are situated, if and to the extent required by applicable law, and
(ii) if such Sub-Servicer is an approved conventional seller/servicer of
mortgage loans for FHLMC or FNMA on the date such Sub-Servicer enters into a
Sub-Servicing Agreement, then it shall remain at all times thereafter such an
approved conventional seller/servicer.
(c) The Servicer for the benefit of the Trustee and the
Certificateholders, shall (at no expense to the Trustee, the Certificateholders
or the Trust) monitor the performance and enforce the obligations of its
Sub-Servicers under the Sub-Servicing Agreements. Such enforcement, including,
without limitation, the legal prosecution of claims, termination of SubServicing
Agreements in accordance with their respective terms and the pursuit of other
appropriate remedies, shall be in such form and carried out to such an extent
and at such times as the Servicer, in its good faith business judgment, would
require were it the owner of the Mortgage Loans. Subject to the terms of the
related Sub-Servicing Agreement, the Servicer shall have the right to remove a
Sub-Servicer at any time it considers such removal to be in the best interests
of Certificateholders.
(d) If a Sub-Servicing Agreement is to be assumed by the
Trustee or a successor thereto, the Servicer, at its expense shall, upon request
of the Trustee or the Depositor, deliver to the assuming party all documents and
records relating to such SubServicing Agreement and the Mortgage Loans then
being serviced thereunder and an accounting of amounts collected and held on
behalf of it thereunder, and shall use its best efforts to effect the orderly
and efficient transfer of the Sub-Servicing Agreement to the assuming party.
(e) Notwithstanding the provisions of any Sub-Servicing
Agreement, the Servicer shall remain obligated and liable to the Trustee and the
Certificateholders for the performance of its obligations and duties under the
Transaction Documents in accordance with the provisions hereof to the same
extent and under the same terms and conditions as if it alone were servicing and
administering the Mortgage Loans for which it is responsible.
Section 4.22 LIMITATION ON LIABILITY OF THE SERVICER AND
OTHERS.
Neither the Servicer nor any of the directors, officers,
employees or agents of the Servicer shall be under any liability to the
Certificateholders, the Depositor or the Trustee for any action taken or for
refraining from the taking of any action in good faith pursuant to the
Transaction Documents, or for errors in judgment; provided that this provision
shall not protect the Servicer or any such Person against any breach of a
representation, warranty or covenant contained in the Transaction Documents or
any liability which would otherwise be imposed by reason of willful misfeasance,
bad faith or negligence in its performance of duties or by reason of reckless
disregard for its obligations and duties under the Transaction Documents. The
Servicer and any director, officer, employee or agent of the Servicer may rely
in good faith on any document of any kind PRIMA FACIE properly executed and
submitted by any Person (including, without limitation, the Special Servicer)
respecting any matters arising under the Transaction Documents, and the Servicer
shall not be required to recompute, verify or recalculate any information
supplied to it by the Special Servicer under the Transaction Documents. The
Servicer shall not be under any obligation to appear in, prosecute or defend
<PAGE>
40
any legal action which is not incidental to its duties to service the Mortgage
Loans in accordance with the Transaction Documents; provided that the Servicer
in its sole discretion may undertake any such action which it may reasonably
deem necessary or desirable in order to protect the interests of the
Certificateholders and the Trustee in the Mortgage Loans (subject to the Special
Servicer's servicing of Specially Serviced Mortgage Loans as contemplated herein
and in the Special Servicing Agreement), and shall undertake any such action if
instructed to do so by the Depositor or the Trustee unless it reasonably
believes such action would result in a material unreimbursed liability of the
Servicer. All legal expenses and costs of such action shall be expenses and
costs of the Trust. To the extent the Servicer pays any of such expenses and
costs, its payments shall be Servicing Advances recoverable by the Servicer
pursuant to Section 2.02(a).
Section 4.23 INDEMNIFICATION; THIRD-PARTY CLAIMS.
(a) The Servicer and any director, officer, employee or agent
of the Servicer shall be indemnified and held harmless by the Trust out of the
Custodial Account from and against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments and any other costs,
liabilities, fees and expenses incurred in connection with any legal action
relating to (i) the Transaction Documents (unless such legal action is
incidental to the performance of its obligations and duties thereunder, in which
case such items will be reimbursable to the Servicer only as and to the extent
otherwise provided therein), (ii) any defect in the Mortgage Loans or related
documents as of the date hereof, and (iii) any action taken by the Servicer or
the Special Servicer in accordance with instructions delivered in writing to the
Servicer or the Special Servicer by the Trustee pursuant to any provision of the
Transaction Documents or information provided by the Special Servicer, in each
case, other than any loss, liability or expense incurred by reason of the
Servicer's breach of any representation, warranty or covenant in any of the
Transaction Documents, the Servicer's willful misfeasance, bad faith or
negligence in the performance of obligations and duties under any of the
Transaction Documents or by reason of reckless disregard of obligations and
duties under any of the Transaction Documents. The Servicer shall immediately
notify the Trustee if a claim is made by a third party with respect to the
Transaction Documents or the Mortgage Loans entitling the Servicer to
indemnification hereunder, whereupon the Trustee on behalf of the Trust shall
assume the defense of any such claim (with counsel reasonably satisfactory to
the Servicer) and, subject to Section 7.11 and 7.12 of the Trust Agreement and
the first sentence of Section 4.23(b) below, pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree that may be entered against it or them in respect of such
claim. Any failure to so notify the Trustee shall not affect any rights the
Servicer may have to indemnification under this Agreement or otherwise, unless
the Trust is materially prejudiced thereby. The right to indemnification
provided in this Section 4.23(a) shall survive the termination of any of the
Transaction Documents and the termination or resignation of any of the Trustee,
the Fiscal Agent, the Servicer and the Special Servicer under any of the
Transaction Documents. The Trustee or the Servicer shall promptly make from the
Custodial Account any payments certified by the Servicer to the Trustee as
required to be made to the Servicer pursuant to this Section 4.23(a).
(b) The Servicer agrees to indemnify the Trustee, the Fiscal
Agent, the Special Servicer and any director, officer, employee or agent of any
of them, and the Trust, and hold
<PAGE>
41
each of them harmless from and against any and all claims, losses, penalties,
fines, forfeitures, legal fees and related costs, judgments, and any other
costs, liabilities, fees and expenses that any of them may sustain arising from
or as a result of any breach of any covenant in the Transaction Documents by the
Servicer or the willful misfeasance, bad faith or negligence of the Servicer in
the performance of its obligations and duties under the Transaction Documents or
by reason of reckless disregard of obligations and duties under the Transaction
Documents by the Servicer or the Servicer's improper use of a power of attorney
furnished by the Trustee pursuant to Section 4.04(a). The Trustee, the Fiscal
Agent or the Special Servicer, as the case may be, shall immediately notify the
Servicer if a claim is made by a third party with respect to the Transaction
Documents or the Mortgage Loans entitling it (or, in the case of the Trustee,
itself or the Trust) to indemnification hereunder, whereupon the Servicer shall
assume the defense of any such claim (with counsel reasonably satisfactory to
the Trustee, the Fiscal Agent or the Special Servicer, as the case may be) and
pay all expenses in connection therewith, including counsel fees, and promptly
pay, discharge and satisfy any judgment or decree which may be entered against
it or them in respect of such claim. Any failure to so notify the Servicer shall
not affect any rights the Trustee, the Fiscal Agent or the Special Servicer, as
the case may be, may have to indemnification under this Agreement or otherwise,
unless the Servicer's defense of such claim is materially prejudiced thereby.
The indemnification provided by this Section 4.23(b) shall survive the
termination of any of the Transaction Documents and the termination or
resignation of any of the Trustee, the Fiscal Agent, the Servicer and the
Special Servicer under any of the Transaction Documents.
(c) The Depositor shall indemnify and hold harmless the
Servicer and each director and officer of the Servicer and each Person, if any,
who controls the Servicer within the meaning of the 1933 Act from and against
any loss, claim, damage or liability, joint or several, and any action in
respect thereof, to which the Servicer or any such director, officer or
controlling person may become subject under the 1933 Act, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon any untrue
statement or alleged untrue statement of a material fact contained in the
registration statement for the registration of the Registered Certificates under
the 1933 Act as originally filed or any amendment thereof (collectively, for
purposes of this Section 4.23, the "REGISTRATION STATEMENT"), or in the 1996-C2
Prospectus and 1996-C2 PPM (collectively, for purposes of this Section 4.23, the
"DISCLOSURE DOCUMENTS"), or arises out of, or is based upon the omission to
state therein a material fact necessary to make the statements therein (in the
case of a Disclosure Document, in light of the circumstances under which they
were made) not misleading and shall reimburse the Servicer for any legal and
other expenses reasonably incurred by the Servicer or any such director, officer
or controlling person in investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action; provided that the
Depositor shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of, or is based upon, any untrue
statement or omission made in the Registration Statement or the Disclosure
Documents in reliance upon and in conformity with written information concerning
the Servicer furnished to the Depositor by or on behalf of the Servicer
specifically for inclusion therein. The Servicer shall immediately notify the
Depositor if a claim is made by a third party entitling the Servicer to
indemnification under this Section 4.23(c), whereupon the Depositor shall assume
the defense of any such claim (with counsel reasonably satisfactory to the
Servicer) and pay all expenses in connection therewith, including counsel fees,
and promptly pay, discharge and satisfy any judgment or decree which may be
entered against it or them in respect of such claim. Any
<PAGE>
42
failure to so notify the Depositor shall not affect any rights the Servicer may
have to indemnification under this Section 4.23(c), unless the Depositor is
materially prejudiced thereby. The indemnification provided herein shall survive
the termination of the Transaction Documents and the termination or resignation
of any of the Trustee, the Fiscal Agent, the Servicer and the Special Servicer
under any of the Transaction Documents.
(d) The Servicer shall indemnify and hold harmless the
Depositor, each director and officer of the Depositor and each Person, if any,
who controls the Depositor within the meaning of the 1933 Act from and against
any loss, claim, damage or liability, joint or several, or any action in respect
thereof, to which the Depositor or any such director, officer or controlling
person may become subject, under the 1933 Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon, any
untrue statement of a material fact contained in the Disclosure Documents, or
arises out of, or is based upon, the omission to state therein a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and shall reimburse the Depositor
for any legal and other expenses reasonably incurred by the Depositor or any
such director, officer or controlling person in investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action,
but in each case only to the extent that the untrue statement or omission was
made in reliance upon and in conformity with written information concerning the
Servicer furnished to the Depositor by or on behalf of the Servicer specifically
for inclusion therein. The Depositor shall immediately notify the Servicer if a
claim is made by a third party entitling the Depositor to indemnification under
this Section 4.23(d), whereupon the Servicer shall assume the defense of any
such claim (with counsel reasonably satisfactory to the Depositor) and pay all
expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it or
them in respect of such claim. Any failure to so notify the Servicer shall not
affect any rights the Depositor may have to indemnification under this Section
4.23(d), unless the Servicer is materially prejudiced thereby. The
indemnification provided in this Section 4.23(d) shall survive the termination
of any of the Transaction Documents and the termination or resignation of any of
the Trustee, the Fiscal Agent, the Servicer and the Special Servicer under any
of the Transaction Documents.
(e) The Servicer and Depositor expressly agree that the only
written information concerning the Servicer furnished by or on behalf of the
Servicer for inclusion in the Disclosure Documents is the information set forth
in the first paragraph under the caption "SERVICING OF MORTGAGE LOANS--The
Servicer--General" in the 1996-C2 Prospectus Supplement, which information the
Servicer hereby represents and warrants is true and correct in all material
respects as of the date of the 1996-C2 Prospectus Supplement and as of the
Closing Date.
Section 4.24 THE SERVICER'S QUALIFICATION TO SERVICE.
The Servicer shall keep in full effect such qualifications to
conduct business and any necessary licenses as are required in connection with
the performance of its duties under the Transaction Documents.
<PAGE>
43
Section 4.25 SPECIALLY SERVICED MORTGAGE LOANS.
(a) Upon determining that a Servicing Transfer Event has
occurred with respect to any Mortgage Loan, the Servicer shall immediately give
notice thereof to the Special Servicer and the Trustee, and shall deliver a copy
of the related Mortgage File to the Special Servicer within five Business Days
after the giving of such notice. The Servicer shall use its best efforts to
provide to the Special Servicer, within five Business Days of the Special
Servicer's reasonable request therefor, all information, documents and records
(including records stored electronically on computer tapes, magnetic discs and
similar items) relating to such Mortgage Loan to enable the Special Servicer to
assume its duties hereunder with respect thereto, to the extent such information
is in the Servicer's possession. The Servicer, in any event, shall continue to
act as servicer of such Mortgage Loan until the Special Servicer shall have
commenced the servicing of such Mortgage Loan, which shall occur upon the
Special Servicer's receipt of the copy of the related Mortgage File referred to
in the first sentence of this Section 4.25(a).
(b) Prior to the transfer of servicing with respect to any
Specially Serviced Mortgage Loan to the Special Servicer, the Servicer shall
notify the Mortgagor under each Specially Serviced Mortgage Loan transferred to
the Special Servicer, in accordance with Accepted Servicing Practices, in
writing (the form and substance of which written notice shall be reasonably
satisfactory to the Special Servicer) of such transfer.
(c) The Servicer shall be required to continue to make certain
calculations and prepare certain reports required hereunder with respect to all
of the Mortgage Loans, whether or not they are Specially Serviced Mortgage
Loans. Such calculations and reports to the extent they relate to Specially
Serviced Mortgage Loans shall be based on information supplied to the Servicer
in writing by the Special Servicer as provided hereby and by the Special
Servicing Agreement. The Servicer shall not be required to recompute, verify or
recalculate any information supplied to it by the Special Servicer under the
Transaction Documents. The Servicer shall render such services with respect to
the Specially Serviced Mortgage Loans as are specifically provided for herein
and in the Special Servicing Agreement.
(d) The Servicer shall provide to the Special Servicer, in
order to facilitate the Special Servicer's compliance with its obligations under
the Special Servicing Agreement, such information as the Special Servicer may
reasonably request, in writing, from time to time.
(e) Upon determining that a Specially Serviced Mortgage Loan
will, upon the Special Servicer's giving of notice to the Servicer as described
in the definition of "Rehabilitated Mortgage Loan", become a Rehabilitated
Mortgage Loan, the Special Servicer shall immediately give such notice. The
Special Servicer shall use its best efforts to provide to the Servicer, within
five Business Days of the Servicer's reasonable request therefor, all
information, documents and records (including records stored electronically on
computer tapes, magnetic discs and similar items) relating to the Mortgage Loan
during the period that it was a Specially Serviced Mortgage Loan to enable the
Servicer to resume its duties hereunder with respect thereto, to the extent such
information is in the Special Servicer's possession. The Special Servicer, in
any event, shall continue to act as special servicer of such Mortgage Loan until
the Servicer shall have resumed the servicing of such Mortgage Loan, which shall
occur upon the
<PAGE>
44
Servicer's receipt of the information, documents and records relating to such
Mortgage Loan referred to in the preceding sentence.
Section 4.26 THE SERVICER NOT TO OWN RESIDUAL
CERTIFICATES.
The Servicer shall not own any Residual Certificates.
Section 4.27 TAX REPORTING.
From and after the Closing Date, the Servicer shall comply
with all Mortgagor tax reporting requirements, including, without limitation,
the reporting requirements imposed by Sections 6050H, 6050J and 6050P of the
Code.
Section 4.28 THE TRUSTEE, SPECIAL SERVICER AND DEPOSITOR
TO COOPERATE WITH THE SERVICER.
Each of the Trustee, the Special Servicer and the Depositor
shall furnish on a timely basis such reports, certifications, and information as
are in its possession and as are reasonably requested by the Servicer to enable
it to perform its duties hereunder.
Section 4.29 ADDITIONAL DUTIES OF THE SPECIAL SERVICER.
With respect to each Mortgage Loan (whether or not it is a
Specially Serviced Mortgage Loan), the Special Servicer shall, in accordance
with Accepted Servicing Practices (as defined in the Special Servicing
Agreement):
(a) cause to be conducted, at its own expense,
without right of reimbursement, inspections of the Mortgaged
Properties at such times and in such manner as shall be
consistent with Accepted Servicing Practices, including,
without limitation, upon obtaining knowledge that any
Mortgaged Property has been damaged, left vacant, abandoned,
is being subject to waste, or if a default under the related
Mortgage Loan has occurred and is continuing; provided that
the Special Servicer shall (i) conduct inspections of each
Mortgaged Property not less than on an annual basis, (ii)
conduct inspections of each Mortgaged Property within six
months of the related Mortgage Loan's Maturity Date and (iii)
within 30 days of conducting each such inspection, prepare and
provide to the Trustee and the Servicer a copy of the written
report relating thereto;
(b) upon receipt of notification from the Servicer,
which notification shall occur promptly, that a Mortgagor is
delinquent with respect to any Monthly Payment or Balloon
Payment and that the Servicer has made an initial contact (by
telephone or otherwise) with such Mortgagor in connection with
such delinquency (i) make any reasonable efforts to collect
such delinquent payments and any other payments required under
the terms and provisions of the related Mortgage Loan; and
(ii) promptly apprise the Servicer of all collection and
customer service matters and furnish to the Servicer copies of
all written communications between the Special Servicer and
such Mortgagor; and
<PAGE>
45
(c) use its reasonable efforts to obtain copies of
all of the monthly, quarterly and annual operating statements
for each Mortgaged Property and monthly, quarterly and annual
rent rolls for each Mortgaged Property, regardless of whether
the related Mortgage Loan documents require the Mortgagor to
provide such information, and prepare the Operating Statement
Analysis thereon as described in Section 2.03(e).
ARTICLE V
REMIC ADMINISTRATION
Section 5.01 COMPLIANCE WITH REMIC PROVISIONS.
The Servicer shall act in accordance with (i) the Transaction
Documents, (ii) any and all instructions, notices and directions of the Trustee
that are in accordance with the Transaction Documents and (iii) the provisions
of the Code relating to REMICs, in order to create or maintain the status of
each of REMIC I, REMIC II and REMIC III as a REMIC under the Code or, as
appropriate, adopt a plan of complete liquidation for any such REMIC. The
Servicer shall not take any action or cause any of REMIC I, REMIC II or REMIC
III to take any action that could (i) endanger the status of any of REMIC I,
REMIC II or REMIC III as a REMIC under the Code or (ii) result in the imposition
of a tax upon any of REMIC I, REMIC II or REMIC III (including, but not limited
to, the tax on prohibited transactions as defined in Section 860F(a)(2) of the
Code or on prohibited contributions pursuant to Section 860G(d) of the Code),
unless the Servicer and the Trustee have received an Opinion of Counsel (at the
expense of the party seeking to take such action) to the effect that the
contemplated action will not endanger such status or result in the imposition of
such a tax.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.01 BINDING NATURE OF AGREEMENT; BENEFITS OF
AGREEMENT.
This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective permitted successors and assigns and
shall inure to the benefit of the Certificateholders and the Fiscal Agent.
Nothing in this Agreement, express or implied, shall give to any Person, other
than the parties to this Agreement, their permitted successors and assigns
hereunder, the Certificateholders and the Fiscal Agent, any benefit or any legal
or equitable right, power, remedy or claim under this Agreement.
<PAGE>
46
Section 6.02 ENTIRE AGREEMENT.
The Transaction Documents (including, without limitation, this
Agreement) contain the entire agreement and understanding between the parties
hereto with respect to the subject matter thereof, and supersede all prior and
contemporaneous agreements, understandings, inducements and conditions, express
or implied, oral or written, of any nature whatsoever with respect to the
subject matter thereof. The express terms of the Transaction Documents control
and supersede any course of performance or usage of the trade inconsistent with
any of the terms thereof.
Section 6.03 AMENDMENT.
This Agreement may be amended from time to time by the Trustee
and the Servicer by an instrument in writing signed by both of them; provided
that any amendment adversely affecting the obligations or interests of the
Depositor or the obligations of the Special Servicer or the Fiscal Agent under
the Transaction Documents shall require the written consent of the Depositor,
the Special Servicer or the Fiscal Agent, as the case may be, and no amendment
shall adversely affect the status of, or cause a tax to be imposed on, any of
REMIC I, REMIC II or REMIC III as a REMIC for federal income tax purposes. The
costs and expenses associated with any such amendment shall be borne by the
party requesting the amendment.
Section 6.04 GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
Section 6.05 NOTICES.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given when received by: (a) the
Trustee at 135 South LaSalle Street, Suite 1740, Chicago, Illinois 60674-4107,
Attention: Asset-Backed Securities Trust Services Group-LB Mortgage Trust II,
Series 1996-C2, (b) the Depositor at 200 Vesey Street, New York, New York 10285,
Attention: Manager of Commercial Contract Finance, (c) the Special Servicer at
11200 Rockville Pike, Rockville, Maryland 20852, Attention: Frederick R.
Burchill (with copies to David Iannarone, Esq., 11200 Rockville Pike, Rockville,
Maryland 20852) and (d) the Servicer at 100 South Wacker Drive, Suite 400,
Chicago, Illinois 60606, Attention: Master Servicing Manager, with a copy to
GMAC Mortgage Corporation, 100 Witmer Road, Horsham, Pennsylvania 19044-0963,
Attention: General Counsel; or as to each party such other address as may
hereafter be furnished by such party to the other parties in writing.
<PAGE>
47
Copies of all notices, reports, certificates and amendments
delivered to any party hereunder shall be mailed to each Rating Agency as
follows: in the case of Moody's, 99 Church Street, New York, New York 10007,
Attention: Commercial Mortgage Surveillance Group; in the case of D&P, 55 East
Monroe Street, Chicago, Illinois 60603, Attention: Structured Finance -
Commercial Real Estate Monitoring; and in the case of Fitch, One State Street
Plaza, New York, NY 10004, Attention: Commercial Mortgage Surveillance; or as to
each such Rating Agency such other address as may hereafter be furnished by such
Rating Agency to the parties hereto in writing.
Section 6.06 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.
Section 6.07 INDULGENCES; NO WAIVERS.
Neither the failure nor any delay on the part of a party to
exercise any right, remedy, power or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, power or privilege preclude any other or further exercise of the
same or of any other right, remedy, power or privilege, nor shall any waiver of
any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to
any other occurrence. No waiver shall be effective unless it is in writing and
is signed by the party asserted to have granted such waiver.
Section 6.08 HEADINGS NOT TO AFFECT INTERPRETATION.
The headings contained in this Agreement are for convenience
of reference only, and shall not be used in the interpretation hereof.
Section 6.09 COUNTERPARTS.
This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original, and all of which together shall
constitute one and the same instrument.
Section 6.10 REMEDIES OF THE TRUSTEE.
The Trustee shall have the right to take all actions now or
hereafter existing at law, in equity or by statute to enforce its rights and
remedies and to protect its interests, as well as those of the
Certificateholders (including, without limitation, 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
<PAGE>
48
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.
Section 6.11 SUCCESSORS AND ASSIGNS.
Any permitted successor or assign of the Servicer hereunder,
of the Trustee under the Trust Agreement or of the Special Servicer under the
Special Servicing Agreement shall, in each such case, succeed to the rights and
obligations of such party under the other Transaction Documents without the
execution or filing of any paper or any further act on the part of any of the
parties to any of the Transaction Documents, anything herein to the contrary
notwithstanding.
<PAGE>
IN WITNESS WHEREOF, each of the Trustee, the Depositor, the
Servicer and the Special Servicer has caused its name to be signed hereto by its
officer thereunto duly authorized as of the day and year first above written.
LASALLE NATIONAL BANK, as Trustee
By:_________________________________
Name:
Title:
STRUCTURED ASSET SECURITIES
CORPORATION, as Depositor
By:_________________________________
Name:
Title:
GMAC COMMERCIAL MORTGAGE
CORPORATION, as Servicer
By:________________________________
Name:
Title:
CRIIMI MAE SERVICES LIMITED
PARTNERSHIP, as Special Servicer
By: CRIIMI MAE Management, Inc.,
its general partner
By:_______________________________
Name:
Title:
<PAGE>
EXHIBIT A
FORM OF TRUST RECEIPT
To: LaSalle National Bank
135 South LaSalle Street, Suite 1740
Chicago, Illinois 60674-4107
Attn: LB MORTGAGE TRUST II, SERIES 1996-C2
Date:
In connection with the servicing and administration of certain
mortgage loans (each, a "Mortgage Loan") under the Servicing Agreement, dated as
of October 1, 1996, (the "Servicing Agreement") among LaSalle National Bank as
trustee (the "Trustee"), Structured Asset Securities Corporation as depositor,
the undersigned as servicer (the "Servicer") and CRIIMI MAE Services Limited
Partnership as special servicer, the undersigned hereby requests a release of
the Mortgage File held by you, as Trustee (or by a Custodian on your behalf),
with respect to the following described Mortgage Loan, for the reason indicated
below.
Mortgagor's Name:
Address:
Loan No.:
Reason for requesting file:
__ Mortgage Loan paid in full. (The Servicer hereby certifies
that all amounts received in connection with the loan have
been or will be credited to the Custodial Account pursuant to
Section 2.01 of the Servicing Agreement.)
__ The Mortgage Loan is being foreclosed.
__ Other. (Describe)
The undersigned acknowledges that the above Mortgage File will
be held by the undersigned in accordance with the provisions of the Servicing
Agreement and will be returned to you, except if the Mortgage Loan has been paid
in full or purchased (in which case the Mortgage File will be retained by us
permanently) and except if the Mortgage Loan is being foreclosed (in which case
the Mortgage File will be returned when no longer required by us for such
purpose).
<PAGE>
Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Servicing Agreement.
GMAC COMMERCIAL MORTGAGE
CORPORATION, as Servicer
By:_____________________________
Name:
Title:
<PAGE>
EXHIBIT B
FORM OF COMPARATIVE FINANCIAL STATUS REPORT
<PAGE>
<TABLE>
<CAPTION>
COMPARATIVE FINANCIAL STATUS FOR LB COMMERCIAL CONDUIT MORTGAGE TRUST II, SERIES 1996-C2 AS OF ______________________
=========================================================================================================================
- ---------------------------------------------------------- -------------------------------------------------------------
Original Underwriting Information
- ---------------------------------------------------------- -------------------------------------------------------------
Basis Year
- ---------------------------------------------------------- -------------------------------------------------------------
Last Financial
Current Paid Annual Property Info as
Loan Sched Thru Debt Inspect of % Total $ %
Number City State Balance Date Service Date Date Occ Revenue NOI DSC
- ---------------------------------------------------------- -------------------------------------------------------------
<S> <C> <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: $ $ W $ $ WA
- ---------------------------------------------------------- ------------------------------------------------------------
- ---------------------------------------------------------- -------------------------------------------------------------
- ---------------------------------------------------------- -------------------------------------------------------------
RECEIVED
- ---------------------------------------------------------- -------------------------------------------------------------
FINANCIAL INFORMATION: LOANS BALANCE
- ---------------------------------------------------------- -------------------------------------------------------------
# % $ %
- ---------------------------------------------------------- -------------------------------------------------------------
CURRENT FULL YEAR:
- ---------------------------------------------------------- -------------------------------------------------------------
CURRENT FULL YR. RECEIVED WITH DSC LESS THAN 1:
- ---------------------------------------------------------- -------------------------------------------------------------
PRIOR FULL YEAR:
- ---------------------------------------------------------- -------------------------------------------------------------
PRIOR FULL YR. RECEIVED WITH DSC LESS THAN 1:
- ---------------------------------------------------------- -------------------------------------------------------------
QUARTERLY FINANCIALS:
- ---------------------------------------------------------- -------------------------------------------------------------
- ---------------------------------------------------------- -------------------------------------------------------------
- ---------------------------------------------------------- -------------------------------------------------------------
- ---------------------------------------------------------- -------------------------------------------------------------
*NET CHANGE SHOULD COMPARE THE LATEST YEAR TO THE
UNDERWRITING YEAR
=========================================================================================================================
APPENDIX Monthly
</TABLE>
<TABLE>
<CAPTION>
COMPARATIVE FINANCIAL STATUS FOR LB COMMERCIAL CONDUIT MORTGAGE TRUST II, SERIES 1996-C2 AS OF ______________________
============================================================================================================================
- ----------------------------------------------------------- ---------------------------------------------------------------
Prior Full Year Operating Information
- ----------------------------------------------------------- ---------------------------------------------------------------
as of___________ Normalized
- ----------------------------------------------------------- ---------------------------------------------------------------
Last Financial
Current Paid Annual Property Info as
Loan Sched Thru Debt Inspect of % Total $ %
Number City State Balance Date Service Date Date Occ Revenue NOI DSC
- ----------------------------------------------------------- ---------------------------------------------------------------
<S> <C> <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
- ----------------------------------------------------------- ---------------------------------------------------------------
- ----------------------------------------------------------- ---------------------------------------------------------------
- ----------------------------------------------------------- ---------------------------------------------------------------
REQUIRED
- ----------------------------------------------------------- ---------------------------------------------------------------
FINANCIAL INFORMATION: LOANS BALANCE
- ----------------------------------------------------------- ---------------------------------------------------------------
# % $ %
- ----------------------------------------------------------- ---------------------------------------------------------------
CURRENT FULL YEAR:
- ----------------------------------------------------------- ---------------------------------------------------------------
CURRENT FULL YR. RECEIVED WITH DSC LESS THAN 1:
- ----------------------------------------------------------- ---------------------------------------------------------------
PRIOR FULL YEAR:
- ----------------------------------------------------------- ---------------------------------------------------------------
PRIOR FULL YR. RECEIVED WITH DSC LESS THAN 1:
- ----------------------------------------------------------- ---------------------------------------------------------------
QUARTERLY FINANCIALS:
- ----------------------------------------------------------- ---------------------------------------------------------------
- ----------------------------------------------------------- ---------------------------------------------------------------
- ----------------------------------------------------------- ---------------------------------------------------------------
- ----------------------------------------------------------- ---------------------------------------------------------------
*NET CHANGE SHOULD COMPARE THE LATEST YEAR TO THE
UNDERWRITING YEAR
============================================================================================================================
APPENDIX Monthly
</TABLE>
<TABLE>
<CAPTION>
COMPARATIVE FINANCIAL STATUS FOR LB COMMERCIAL CONDUIT MORTGAGE TRUST II, SERIES 1996-C2 AS OF ______________________
=============================================================================================================================
- ----------------------------------------------------------- ----------------------------------------------------------------
Current Annual Operating Information
- ----------------------------------------------------------- ----------------------------------------------------------------
as of___________ Normalized
- ----------------------------------------------------------- ----------------------------------------------------------------
Last Financial
Current Paid Annual Property Info as
Loan Sched Thru Debt Inspect of % Total $ %
Number City State Balance Date Service Date Date Occ Revenue NOI DSC
- ----------------------------------------------------------- ----------------------------------------------------------------
<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
- ----------------------------------------------------------- ----------------------------------------------------------------
- ----------------------------------------------------------- ----------------------------------------------------------------
- ----------------------------------------------------------- ----------------------------------------------------------------
- ----------------------------------------------------------- ----------------------------------------------------------------
FINANCIAL INFORMATION:
- ----------------------------------------------------------- ----------------------------------------------------------------
- ----------------------------------------------------------- ----------------------------------------------------------------
CURRENT FULL YEAR:
- ----------------------------------------------------------- ----------------------------------------------------------------
CURRENT FULL YR. RECEIVED WITH DSC LESS THAN 1:
- ----------------------------------------------------------- ----------------------------------------------------------------
PRIOR FULL YEAR:
- ----------------------------------------------------------- ----------------------------------------------------------------
PRIOR FULL YR. RECEIVED WITH DSC LESS THAN 1:
- ----------------------------------------------------------- ----------------------------------------------------------------
QUARTERLY FINANCIALS:
- ----------------------------------------------------------- ----------------------------------------------------------------
- ----------------------------------------------------------- ----------------------------------------------------------------
- ----------------------------------------------------------- ----------------------------------------------------------------
- ----------------------------------------------------------- ----------------------------------------------------------------
*NET CHANGE SHOULD COMPARE THE LATEST YEAR TO THE
UNDERWRITING YEAR
=============================================================================================================================
APPENDIX Monthly
</TABLE>
<TABLE>
<CAPTION>
COMPARATIVE FINANCIAL STATUS FOR LB COMMERCIAL CONDUIT MORTGAGE TRUST II, SERIES 1996-C2 AS OF ______________________
=================================================================================================================
"Actual"
- ----------------------------------------------------------- ----------------------------------------------------
YTD Financial Information
- ----------------------------------------------------------- ----------------------------------------------------
Month Reported
- ----------------------------------------------------------- ----------------------------------------------------
Financial
Current Paid Annual Info as
Loan Sched Thru Debt of % Total $ %
Number City State Balance Date Service Date Occ Revenue NOI DSC
- ----------------------------------------------------------- ----------------------------------------------------
<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
- ----------------------------------------------------------- ----------------------------------------------------
- ----------------------------------------------------------- ----------------------------------------------------
- ----------------------------------------------------------- ----------------------------------------------------
- ----------------------------------------------------------- ----------------------------------------------------
FINANCIAL INFORMATION:
- ----------------------------------------------------------- ----------------------------------------------------
- ----------------------------------------------------------- ----------------------------------------------------
CURRENT FULL YEAR:
- ----------------------------------------------------------- ----------------------------------------------------
CURRENT FULL YR. RECEIVED WITH DSC LESS THAN 1:
- ----------------------------------------------------------- ----------------------------------------------------
PRIOR FULL YEAR:
- ----------------------------------------------------------- ----------------------------------------------------
PRIOR FULL YR. RECEIVED WITH DSC LESS THAN 1:
- ----------------------------------------------------------- ----------------------------------------------------
QUARTERLY FINANCIALS:
- ----------------------------------------------------------- ----------------------------------------------------
- ----------------------------------------------------------- ----------------------------------------------------
- ----------------------------------------------------------- ----------------------------------------------------
- ----------------------------------------------------------- ----------------------------------------------------
*NET CHANGE SHOULD COMPARE THE LATEST YEAR TO THE
UNDERWRITING YEAR
=================================================================================================================
APPENDIX Monthly
</TABLE>
<TABLE>
<CAPTION>
COMPARATIVE FINANCIAL STATUS FOR LB COMMERCIAL CONDUIT MORTGAGE TRUST II, SERIES 1996-C2 AS OF ______________________
============================================================================================
*
- ----------------------------------------------------------- -------------------------------
Net Change
- ----------------------------------------------------------- -------------------------------
Current and Basis
- ----------------------------------------------------------- -------------------------------
Current Paid Annual %
Loan Sched Thru Debt % Total %
Number City State Balance Date Service OCC Rev DSC
- ----------------------------------------------------------- -------------------------------
<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
- ----------------------------------------------------------- -------------------------------
- ----------------------------------------------------------- -------------------------------
- ----------------------------------------------------------- -------------------------------
- ----------------------------------------------------------- -------------------------------
FINANCIAL INFORMATION:
- ----------------------------------------------------------- -------------------------------
- ----------------------------------------------------------- -------------------------------
CURRENT FULL YEAR:
- ----------------------------------------------------------- -------------------------------
CURRENT FULL YR. RECEIVED WITH DSC LESS THAN 1:
- ----------------------------------------------------------- -------------------------------
PRIOR FULL YEAR:
- ----------------------------------------------------------- -------------------------------
PRIOR FULL YR. RECEIVED WITH DSC LESS THAN 1:
- ----------------------------------------------------------- -------------------------------
QUARTERLY FINANCIALS:
- ----------------------------------------------------------- -------------------------------
- ----------------------------------------------------------- -------------------------------
- ----------------------------------------------------------- -------------------------------
- ----------------------------------------------------------- -------------------------------
*NET CHANGE SHOULD COMPARE THE LATEST YEAR TO THE
UNDERWRITING YEAR
============================================================================================
APPENDIX Monthly
</TABLE>
<PAGE>
EXHIBIT C
NOI ADJUSTMENT WORKSHEET
<PAGE>
EXHIBIT C
METHODOLOGY TO NORMALIZE NOI & DEBT SERVICE COVERAGE
One of the primary purposes of applying the methodology described below is to
arrive at a servicer adjusted or "Normalized" NOI. This will help to facilitate
a meaningful comparison of the property's ongoing performance to its performance
at the time of the original underwriting. The items below highlight some major
categories requiring adjustment. There may however be others and the servicer
will be expected to use its discretion in making the necessary adjustments.
o Always assume a property management fee of at least 3-5%. Usually 5% is
an accurate estimate but on larger properties 3% or 4% may be
sufficient. (For "Normalized" NOI do not use a management fee less than
what was used for the underwriting NOI).
o Remove any capital expenses from any above the line categories (such as
extraordinary repairs and maintenance) and put them below the line in
capital expenses.
o Property Taxes should be the annual amount due, excluding any
delinquent taxes or credits from prior years (which would cause the
number to be higher or lower).
o Non-recurring extraordinary Income should be excluded.
- A tax refund, a lease buyout or income received for a period other
than the year in question should be adjusted. If past due rent for a
prior year was paid and recorded in the current year the servicer
should back it out and footnote it. - Care should be used when
reflecting percentage/overage rents to ensure that it relates to the
appropriate period and that the numbers are supported by tenant sales
information.
o Remove any legal fees or consulting fees not pertaining to the
operation of the property. - Fees for closing the loan restructure.
o Analyze the income and expenses by looking at variances by category.
For significant variances inquire with the borrower and make
appropriate adjustments and/or footnote the reason for the difference.
- i.e., electricity goes down because a major tenant vacates.
o The debt service should be an actual amount the borrower paid as per
the servicer. If the servicer does not have a full year of payments the
servicer should estimate a full year amount with the information they
do have.
The servicer should use the attached NOI Adjustment Worksheets to document the
adjustments made to arrive at Normalized NOI. Footnotes should be used wherever
necessary to guide the reader through the analysis. These Adjustment Worksheets
will then represent the backup for the property's Operating Statement Analysis
(attached), which will contain a historical record of the previous three years'
normalized financial statements and a comparison to the base year results.
<PAGE>
EXHIBIT C
NOI ADJUSTMENT WORKSHEET for "Year"
Commercial - (Property Type)
<TABLE>
<CAPTION>
PROPERTY OVERVIEW
------------------------------------------------
<S> <C> <C> <C>
LB Control Number
------------------------------------------------
Servicer Loan Number
----------------------------------------------------------------------------------------------------
Asset Name
----------------------------------------------------------------------------------------------------
Property Address
----------------------------------------------------------------------------------------------------
Net Rentable Sq. 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.
</TABLE>
<TABLE>
<CAPTION>
INCOME:
Number of Mos. "Year"
Annualized
--------------------------------------------------------------------------------
Period Ended Borrower Adjustment Normalized
Actual
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Statement
Classification
--------------------------------------------------------------------------------
Rental Income
--------------------------------------------------------------------------------
Pass Through/
Escalations
--------------------------------------------------------------------------------
Other Income
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EFFECTIVE GROSS INCOME $0.00 $0.00 $0.00 $0.00 $0.00
--------------------------------------------------------------------------------
Normalized - Full year Financial statements that have been reviewed by the
underwriter or Servicer
</TABLE>
<TABLE>
<CAPTION>
OPERATING EXPENSES:
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Leasing Commissions
--------------------------------------------------------------------------------
Tenant Improvements
--------------------------------------------------------------------------------
Replacement Reserve
--------------------------------------------------------------------------------
TOTAL CAPITAL ITEMS $0.00 $0.00 $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 $0.00 $0.00
--------------------------------------------------------------------------------
CASH FLOW AFTER DEBT SERVICE $0.00 $0.00 $0.00 $0.00 $0.00
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
DSCR: (NOI/DEBT SERVICE)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
DSCR: (AFTER RESERVES\CAP EXP.)
--------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
SOURCE OF FINANCIAL
DATA:
----------------------------------------------------------------------------------------------------
(i.e. operating statements, financial statements, tax return, other)
NOTES AND ASSUMPTIONS:
- ------------------------------------------------------------------------------------------------------------------------------------
This report should be completed by the Servicer for any "Normalization" of the Borrowers numbers Income: Comments Expense:
CommentsCapital Items: Comments
</TABLE>
<PAGE>
EXHIBIT D
FORM OF DELINQUENT LOAN STATUS REPORT
<PAGE>
<TABLE>
<CAPTION>
DELINQUENT LOAN STATUS FOR LB COMMERCIAL CONDUIT MORTGAGE TRUST II, SERIES
1996-C2 as of ____________.
=======================================================================================================
(A) (B) (C) (D) (E)-
A+B+C+D
=======================================================================================================
LOAN # PROPERTY SQ. FT. PAID TO ACTUAL & TOTAL TOTAL OTHER TOTAL
CITY & TYPE OR DATE SCHEDULED OUTSTANDING OUTSTANDING ADVANCES EXPOSURE
STATE UNITS/ LOAN P&I EXPENSES TO (TAXES &
OCC%/ BALANCE ADVANCES DATE ESCROW)
DATE TO DATE
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
90 + DAYS DELINQUENT
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
60 DAYS DELINQUENT
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
30 DAYS DELINQUENT
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
CURRENT & AT SPECIAL SERVICER
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
* STATUS SHOULD CONTAIN A CODE
INDICATING THE CURRENT DIRECTION OF EACH
LOAN SUCH AS (FCL - IN FORECLOSURE, MOD
- - MODIFICATION, DPO - DISCOUNT PAYOFF,
NS-NOTE SALE, BK-BANKRUPTCY, PP-PAYMENT
PLAN, CURR-CURRENT, TBD - TO BE
DETERMINED ETC...)
- -------------------------------------------------------------------------------------------------------
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)
=======================================================================================================
</TABLE>
<TABLE>
<CAPTION>
DELINQUENT LOAN STATUS FOR LB COMMERCIAL CONDUIT MORTGAGE TRUST II, SERIES
1996-C2 as of ____________.
==========================================================================================================
==========================================================================================================
LOAN # PROPERTY SQ. FT. PAID TO CURRENT CURRENT MATURITY MOST MOST APPRAISAL
CITY & TYPE OR DATE MONTHLY INTEREST DATE RECENT RECENT DATE
STATE UNITS/ P&I RATE NOI/ NOI/DSCR
OCC%/ DATE
DATE
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
90 + DAYS DELINQUENT
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
60 DAYS DELINQUENT
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
30 DAYS DELINQUENT
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
CURRENT & AT SPECIAL SERVICER
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
* STATUS SHOULD CONTAIN A CODE
INDICATING THE CURRENT DIRECTION OF EACH
LOAN SUCH AS (FCL - IN FORECLOSURE, MOD
- - MODIFICATION, DPO - DISCOUNT PAYOFF,
NS-NOTE SALE, BK-BANKRUPTCY, PP-PAYMENT
PLAN, CURR-CURRENT, TBD - TO BE
DETERMINED ETC...)
- ----------------------------------------------------------------------------------------------------------
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)
==========================================================================================================
</TABLE>
<TABLE>
<CAPTION>
DELINQUENT LOAN STATUS FOR LB COMMERCIAL CONDUIT MORTGAGE TRUST II, SERIES
1996-C2 as of ____________.
===========================================================================================================================
(F) (G)-(.92 F)-E
===========================================================================================================================
LOAN # PROPERTY SQ. FT. PAID TO MOST APPRAISAL TRANSFER LESS USING DATE NOI STATUS COMMENTS
CITY & TYPE OR DATE ACCURATE BPO OR DATE/ 92% FILED/
STATE UNITS/ PROPERTY INTERNAL CLOSING APPRAISAL OR FCL SALE
OCC%/ VALUE VALUE DATE BPO (F) DATE
DATE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
90 + DAYS DELINQUENT
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
60 DAYS DELINQUENT
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
30 DAYS DELINQUENT
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
CURRENT & AT SPECIAL SERVICER
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
* STATUS SHOULD CONTAIN A CODE
INDICATING THE CURRENT DIRECTION OF EACH
LOAN SUCH AS (FCL - IN FORECLOSURE, MOD
- - MODIFICATION, DPO - DISCOUNT PAYOFF,
NS-NOTE SALE, BK-BANKRUPTCY, PP-PAYMENT
PLAN, CURR-CURRENT, TBD - TO BE
DETERMINED ETC...)
- ---------------------------------------------------------------------------------------------------------------------------
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)
===========================================================================================================================
</TABLE>
<PAGE>
EXHIBIT E
FORM OF HISTORICAL LIQUIDATION LOSS REPORT
<PAGE>
<TABLE>
<CAPTION>
HISTORICAL LIQUIDATION LOSS ESTIMATE FOR LB COMMERCIAL CONDUIT MORTGAGE TRUST II, SERIES 1996-C2
(REO-SOLD or DISCOUNTED PAYOFF) As Of
===============================================================================================================================
(c)-b/a (a) (b) (d) (e) (f) (g)
===============================================================================================================================
Servicer Property State % Rec Latest Effect Sales Amount Scheduled Total P&I Total
Loan ID Name From Appraisal or Date of Price Received from Balance Paid Expenses
Sale Brokers Sale Sale
Opinion
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
THIS REPORT IS HISTORICAL
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Total all Loans:
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Current Month Only:
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
===============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
HISTORICAL LIQUIDATION LOSS ESTIMATE FOR LB COMMERCIAL CONDUIT MORTGAGE TRUST II, SERIES 1996-C2
(REO-SOLD or DISCOUNTED PAYOFF) As Of
==============================================================================================================================
(h) (i)- (k)-i-e (m) (n)-k+m (e)-n/e
d(f+g+h)
==============================================================================================================================
Servicer Property State Servicing Net Proceds Actual Date Minor Date Adj Total Loss Loss % of
Loan ID Name Fees Losses Loss Adj to Passed with Scheduled
Passed Passed Trust Thru Adjustment Balance
thru Thru
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
THIS REPORT IS HISTORICAL
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Total all Loans:
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Current Month Only:
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
==============================================================================================================================
</TABLE>
<PAGE>
EXHIBIT F
FORM OF HISTORICAL LOAN MODIFICATION REPORT
<PAGE>
<TABLE>
<CAPTION>
FORM OF HISTORICAL LOAN MODIFICATION REPORT
HISTORICAL SPECIAL SERVICER LOAN MODIFICATION REPORT FOR DEAL NAME SERIES-C# AS OF
================================================================================================================================
LOAN CITY/STATE MOD/DPO/ EFFECT BALANCE BALANCE AT THE OLD # MTHS/ OLD P&I NEW P&I
ID EXTENSION DATE WHEN SENT TO EFFECTIVE DATE RATE NEW RATE
SPECIAL OF CHANGE
SERVICER
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
THIS REPORT IS
HISTORICAL
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL FOR ALL LOANS:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL FOR LOANS IN CURRENT MONTH:
- --------------------------------------------------------------------------------------------------------------------------------
# OF LOANS $ BALANCE
- --------------------------------------------------------------------------------------------------------------------------------
MODIFICATIONS:
- --------------------------------------------------------------------------------------------------------------------------------
MATURITY DATE
EXTENSIONS:
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
FORM OF HISTORICAL LOAN MODIFICATION REPORT
HISTORICAL SPECIAL SERVICER LOAN MODIFICATION REPORT FOR DEAL NAME SERIES-C# AS OF
===================================================================================================================================
LOAN CITY/STATE MOD/DPO/ EFFECT BALANCE BALANCE AT THE P&I LOSS OLD NEW TOTAL #
ID EXTENSION DATE WHEN SENT TO EFFECTIVE DATE MATURITY MATURITY MTHS FOR
SPECIAL OF CHANGE CHANGE
SERVICER OF MOD
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
THIS REPORT IS
HISTORICAL
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL FOR ALL LOANS:
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL FOR LOANS IN CURRENT MONTH:
- -----------------------------------------------------------------------------------------------------------------------------------
# OF LOANS $ BALANCE
- -----------------------------------------------------------------------------------------------------------------------------------
MODIFICATIONS:
- -----------------------------------------------------------------------------------------------------------------------------------
MATURITY DATE
EXTENSIONS:
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL:
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
===================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
FORM OF HISTORICAL LOAN MODIFICATION REPORT
HISTORICAL SPECIAL SERVICER LOAN MODIFICATION REPORT FOR DEAL NAME SERIES-C# AS OF
====================================================================================================================================
LOAN CITY/STATE MOD/DPO/ EFFECT BALANCE BALANCE AT THE REALIZED INTEREST LOSS COMMENT
ID EXTENSION DATE WHEN SENT TO EFFECTIVE DATE LOSS TO TO TRUST $
SPECIAL OF CHANGE TRUST $ (RATE
SERVICER REDUCTION)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
THIS REPORT IS
HISTORICAL
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL FOR ALL LOANS:
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL FOR LOANS IN CURRENT MONTH:
- ------------------------------------------------------------------------------------------------------------------------------------
# OF LOANS $ BALANCE
- ------------------------------------------------------------------------------------------------------------------------------------
MODIFICATIONS:
- ------------------------------------------------------------------------------------------------------------------------------------
MATURITY DATE
EXTENSIONS:
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL:
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
</TABLE>
<PAGE>
EXHIBIT G
FORM OF OPERATING STATEMENT ANALYSIS
<PAGE>
<TABLE>
<CAPTION>
FORM OF OPERATING STATEMENT ANALYSIS
Commercial - (Property Type)
PROPERTY OVERVIEW
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LB Control Number
-------------------------------------------------------------------------------
Servicer Loan Number
-------------------------------------------------------------------------------
Current Balance/Paid-to-Date
----------------------------------------------------------------------------------------------------
Asset Name
----------------------------------------------------------------------------------------------------
Asset Type
----------------------------------------------------------------------------------------------------
Property Address
----------------------------------------------------------------------------------------------------
-----------------
Net Rentable Sq. Feet
--------------------------------
Year Built/Year Renovated
-------------------------------------------------------------------------------
Year of Operations Underwriting 1993 1994 1995 YTD
-------------------------------------------------------------------------------
Occupancy Rate*
-------------------------------------------------------------------------------
Average Rental Rate
-------------------------------------------------------------------------------
* Occupancy rates are year end or the ending date of the financial statement for the period.
</TABLE>
<TABLE>
<CAPTION>
No. of Mos
------------------
INCOME: Prior Year Current Yr
----------------------------------------------------------------------------------------------------
Number of Mos. Annualized Underwriting 1993 1994 1995 1996 YTD** 1995-Base 1995-1994
Base Line Normalized Normalized Normalized as of / /96 Variance Variance
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Period Ended
----------------------------------------------------------------------------------------------------
Statement Classification
----------------------------------------------------------------------------------------------------
Rental Income
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
Pass Through/Escalations
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
Other Income
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
EFFECTIVE GROSS INCOME $0.00 $0.00 $0.00 $0.00 $0.00 % %
----------------------------------------------------------------------------------------------------
Normalized - Full year Financial statements that have been reviewed by the underwriter or Servicer
** Servicer will not be expected to "Normalize" these YTD numbers.
----------------------------------------------------------------------------------------------------
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 $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 $0.00
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
N.O.I. AFTER CAPITAL ITEMS $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
DEBT SERVICE (PER SERVICER) $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
----------------------------------------------------------------------------------------------------
CASH FLOW AFTER DEBT SERVICE $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
DSCR: (NOI/DEBT SERVICE)
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
DSCR: (AFTER RESERVES\CAP EXP.)
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
SOURCE OF FINANCIAL DATA:
----------------------------------------------------------------------------------------------------
NOTES AND ASSUMPTIONS:
The years shown above will roll always showing a three year history. 1995 is the current year financials; 1994 is the prior year
financials. This report may vary depending on the property type and because of the way information may vary in each borrower's
statement. Rental Income need be broken down whenever possibly differently for each property type as follows: retail: 1) Base Rent
2) Percentage rents on cashflow Hotel: Room Revenue 2) Food/Beverage Nursing.
Income: Comment
Expense: Comment
Capital Items: Comment
</TABLE>
<PAGE>
EXHIBIT H
FORM OF WATCHLIST REPORT
<PAGE>
<TABLE>
<CAPTION>
LB Commercial Conduit Mortgage Trust II, Series 1996-C2
SERVICER WATCH LIST
as of ______________________
==============================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------
CURRENT PAID
LOAN SCHED THRU MATURITY %
NUMBER PROPERTY TYPE CITY STATE BALANCE DATE DATE CURRENT DSC
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
List all loans on watch list and reason sorted in descending balance order.
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Total: $
==============================================================================================================================
Monthly
</TABLE>
<TABLE>
<CAPTION>
LB Commercial Conduit Mortgage Trust II, Series 1996-C2
SERVICER WATCH LIST
as of ______________________
==============================================================================================
- ----------------------------------------------------------------------------------------------
LOAN
NUMBER COMMENT/REASON ON WATCH LIST
- ----------------------------------------------------------------------------------------------
<S> <C>
- ----------------------------------------------------------------------------------------------
List all loans on watch list and reason sorted in descending balance order.
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
==============================================================================================
Monthly
</TABLE>
<PAGE>
EXHIBIT I
FORM OF REO STATUS REPORT
<PAGE>
EXHIBIT I
<TABLE>
<CAPTION>
REO STATUS REPORT FOR LB COMMERCIAL CONDUIT MORTGAGE TRUST II, SERIES 1996-C2 As of _____________
===============================================================================================
(A) (B) (C) (D)
- -----------------------------------------------------------------------------------------------
Loan Property Sq Ft or Paid Actual Total P&I Other Total Total
#/City Type Units/ to & Advances Advances Expenses Exposure
& Occ% Date Scheduled To Date (Taxes & To Date
State Loan Escrow)
Balance
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
===============================================================================================
Monthly
</TABLE>
<TABLE>
<CAPTION>
REO STATUS REPORT FOR LB COMMERCIAL CONDUIT MORTGAGE TRUST II, SERIES 1996-C2 As of _____________
======================================================================================================
(E)-A+B+C+D
- ------------------------------------------------------------------------------------------------------
Loan Property Sq Ft or Paid Actual Current Current Maturity NOI (YTD)
#/City Type Units/ to & Monthly Interest Date Date Most
& Occ% Date Scheduled P&I Rate Recent
State Loan NOI/
Balance DSCR
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Real Estate Owned
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
======================================================================================================
Monthly
</TABLE>
<TABLE>
<CAPTION>
REO STATUS REPORT FOR LB COMMERCIAL CONDUIT MORTGAGE TRUST II, SERIES 1996-C2 As of _____________
===================================================================================================
(F)
- ---------------------------------------------------------------------------------------------------
Loan Property Sq Ft or Paid Actual Appraisal Most Appraisal Transfer
#/City Type Units/ to & Date Accurate BPO Date/Closing
& Occ% Date Scheduled Property Internal Date
State Loan Value Value
Balance
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
===================================================================================================
Monthly
</TABLE>
<TABLE>
<CAPTION>
REO STATUS REPORT FOR LB COMMERCIAL CONDUIT MORTGAGE TRUST II, SERIES 1996-C2 As of _____________
========================================================================================================
(G)-
(92*F)-E
- --------------------------------------------------------------------------------------------------------
Loan Property Sq Ft or Paid Actual Less REO REO Pending Comments
#/City Type Units/ to & using Acquisit- Acquisit- Offers
& Occ% Date Scheduled 92% ion Date ion Date
State Loan Appraisal
Balance or BPO
(Y)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
========================================================================================================
Monthly
</TABLE>
-3-
EXHIBIT 99.3
<PAGE>
================================================================================
STRUCTURED ASSET SECURITIES CORPORATION,
Depositor
LASALLE NATIONAL BANK,
Trustee
GMAC COMMERCIAL MORTGAGE CORPORATION,
Servicer
and
CRIIMI MAE SERVICES LIMITED PARTNERSHIP,
Special Servicer
---------------------------------
SPECIAL SERVICING AGREEMENT
Dated as of October 1, 1996
---------------------------------
================================================================================
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS.................................................... 1
ARTICLE II
ADMINISTRATION OF FUNDS
Section 2.01 APPLICATION OF FUNDS RECEIVED.................................. 5
Section 2.02 SPECIAL SERVICER REPORTS TO THE TRUSTEE, RATING AGENCIES,
SERVICER AND OPERATING ADVISER................................. 6
Section 2.03 THE SPECIAL SERVICER TO REPORT TO THE OPERATING ADVISER........ 7
Section 2.04 THE SPECIAL SERVICER TO COOPERATE WITH THE SERVICER............ 7
ii
<PAGE>
PAGE
ARTICLE III
TERMINATION
Section 3.01 TERMINATION.................................................... 9
Section 3.02 PROCEDURE FOR TERMINATION...................................... 10
ARTICLE IV
ADMINISTRATION AND SERVICING OF
SPECIALLY SERVICED MORTGAGE LOANS BY SPECIAL SERVICER
Section 4.01 DUTIES OF SPECIAL SERVICER.................................... 11
Section 4.02 FIDELITY BOND AND ERRORS AND OMISSIONS INSURANCE POLICY....... 12
Section 4.03 THE SPECIAL SERVICER'S FINANCIAL STATEMENTS AND RELATED
INFORMATION................................................... 13
Section 4.04 THE SPECIAL SERVICER TO ACT AS SPECIAL SERVICER............... 13
Section 4.05 "DUEONSALE" CLAUSES; ASSUMPTION AGREEMENTS; MODIFICATIONS OF
MORTGAGE LOANS................................................ 17
Section 4.06 RELEASE OF MORTGAGE FILES..................................... 21
Section 4.07 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF THE SPECIAL
SERVICER TO BE HELD FOR TRUSTEE............................... 22
Section 4.08 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SPECIAL
SERVICER...................................................... 23
Section 4.09 STANDARD HAZARD AND FLOOD INSURANCE POLICIES.................. 26
Section 4.10 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS.............. 27
Section 4.11 COMPENSATION TO THE SPECIAL SERVICER.......................... 27
Section 4.12 REALIZATION UPON DEFAULTED MORTGAGE LOANS..................... 28
Section 4.13 FORECLOSURE................................................... 30
Section 4.14 OPERATION OF REO PROPERTY..................................... 30
Section 4.15 SALE OF REO PROPERTY.......................................... 34
Section 4.16 REALIZATION ON COLLATERAL SECURITY............................ 35
Section 4.18 ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE................. 36
Section 4.19 ANNUAL INDEPENDENT ACCOUNTANTS' SERVICING REPORT.............. 36
Section 4.20 MERGER OR CONSOLIDATION....................................... 36
Section 4.21 RESIGNATION OF THE SPECIAL SERVICER........................... 37
Section 4.22 ASSIGNMENT OR DELEGATION OF DUTIES BY THE SPECIAL SERVICER.... 38
Section 4.23 LIMITATION ON LIABILITY OF THE SPECIAL SERVICER AND OTHERS.... 38
Section 4.24 INDEMNIFICATION; THIRD PARTY CLAIMS........................... 38
Section 4.25 THE SPECIAL SERVICER'S QUALIFICATION TO SERVICE............... 41
Section 4.26 THE SPECIAL SERVICER NOT TO OWN RESIDUAL CERTIFICATES......... 41
Section 4.27 TAX REPORTING................................................. 41
ARTICLE V
REMIC ADMINISTRATION
Section 5.01 COMPLIANCE WITH REMIC PROVISIONS.............................. 41
iii
<PAGE>
PAGE
Section 5.02 MODIFICATIONS OF MORTGAGE LOANS............................... 42
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.01 BINDING NATURE OF AGREEMENT; BENEFITS OF AGREEMENT............ 42
Section 6.02 ENTIRE AGREEMENT.............................................. 42
Section 6.03 AMENDMENT..................................................... 42
Section 6.04 GOVERNING LAW................................................. 43
Section 6.05 NOTICES....................................................... 43
Section 6.06 SEVERABILITY OF PROVISIONS..................................... 43
Section 6.07 INDULGENCES; NO WAIVERS....................................... 44
Section 6.08 HEADINGS NOT TO AFFECT INTERPRETATION......................... 44
Section 6.09 COUNTERPARTS.................................................. 44
Section 6.10 REMEDIES OF THE TRUSTEE....................................... 44
Section 6.11 SUCCESSORS AND ASSIGNS........................................ 44
EXHIBIT A Form of Trust Receipt
SCHEDULE I Amount of Principal and Interest Collected by the Special Servicer
to be distributed to the Servicer for Application of Funds
SCHEDULE II REO Statement of Earnings
iv
<PAGE>
SPECIAL SERVICING AGREEMENT, dated as of October 1, 1996 (this
"Agreement"), among Structured Asset Securities Corporation as depositor
(together with its permitted successors and assigns, the "DEPOSITOR"), LaSalle
National Bank as trustee (together with its permitted successors and assigns,
the "TRUSTEE") for the LB Commercial Conduit Mortgage Trust II, Multiclass
Pass-Through Certificates, Series 1996-C2, GMAC Commercial Mortgage Corporation
as servicer (together with its permitted successors and assigns, the "SERVICER")
and CRIIMI MAE Services Limited Partnership as special servicer (together with
its permitted successors and assigns, the "SPECIAL SERVICER").
PRELIMINARY STATEMENT
The parties hereto, together with ABN AMRO Bank N.V. as fiscal
agent (together with its permitted successors and assigns, the "FISCAL AGENT"),
have entered into a Trust Agreement of even date herewith (the "TRUST
AGREEMENT"), whereby a trust designated as LB Commercial Conduit Mortgage Trust
II (the "TRUST") is to be created and the LB Commercial Conduit Mortgage Trust
II, Multiclass Pass-Through Certificates, Series 1996-C2 will be issued. The
assets of the Trust (collectively, the "TRUST FUND") will consist primarily of a
segregated pool of Mortgage Loans (as defined herein) and certain related assets
identified in the Trust Agreement.
The parties hereto have duly executed and delivered this
Agreement to provide for the special servicing of the Specially Serviced
Mortgage Loans and the management of the REO Properties (each as defined herein)
by the Special Servicer. The Trustee is entering into this Agreement on behalf
of the Trust for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged.
As provided in the Trust Agreement, the Trustee, on behalf of
the Trust, will make, or will cause to be made, three separate elections for
designated portions of the Trust Fund to each be treated for federal income tax
purposes as a "real estate mortgage investment conduit (a "REMIC").
In consideration of the foregoing and the representations,
warranties, covenants and agreements set forth in this Agreement, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS.
Capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to them in the Trust Agreement or, if not
defined therein, then in the Servicing Agreement. In addition, whenever used in
this Agreement, the following words and phrases, unless the context otherwise
requires, shall have the following meanings:
<PAGE>
2
"ACCEPTED SERVICING PRACTICES" means, with respect to the
Special Servicer, the customary and usual servicing standards and practices and
asset management standards and practices of prudent institutional commercial and
multifamily mortgage loan servicers and asset managers servicing on behalf of
third parties performing and non-performing mortgage loans comparable to the
Specially Serviced Mortgage Loans and/or administering real properties
comparable to the REO Properties in the jurisdictions where the related
Mortgaged Properties and/or such REO Properties are located, and with a view to
the maximization of related Net Collections on a present value basis (the
relevant discounting to be performed at the related Net Mortgage Rate), but
without regard to: (i) any relationship that the Special Servicer or any
Affiliate of the Special Servicer may have with the related Mortgagor; (ii) the
ownership of any Certificate by the Special Servicer or any Affiliate of the
Special Servicer; (iii) the Special Servicer's right to receive compensation for
its services under the Transaction Documents or with respect to any particular
transaction; and (iv) the servicing by the Servicer of the Mortgage Loans that
are not Specially Serviced Mortgage Loans.
"AGREEMENT" means this Special Servicing Agreement and all
amendments and supplements hereto.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
"DELINQUENT LOAN STATUS REPORT" means a report substantially
in the form of EXHIBIT D to the Servicing Agreement.
"DEPOSITOR" means Structured Asset Securities Corporation or
its successor-in- interest.
"DIRECTLY OPERATE" means, 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, the performance of any construction work thereon or any
use of such REO Property in a trade or business conducted by REMIC I other than
through an Independent Contractor; provided, however, that the Trustee (or the
Special Servicer or any Sub-Servicer on behalf of the Trustee) shall not be
considered to Directly Operate an REO Property solely because the Trustee (or
the Special Servicer or any SubServicer on behalf of the Trustee) establishes
rental terms, chooses tenants, enters into or renews leases, deals with taxes
and insurance, or makes decisions as to repairs or capital expenditures with
respect to such REO Property.
"ESTIMATE" has the meaning set forth in Section 4.04(c).
"EVENT OF DEFAULT" has the meaning set forth in Section
3.01(b).
"FINAL RECOVERY DETERMINATION" has the meaning set forth in
the Servicing Agreement.
"FISCAL AGENT" has the meaning set forth in the Preliminary
Statement.
<PAGE>
3
"HISTORICAL LIQUIDATION LOSS REPORT" means a report
substantially in the form of EXHIBIT E to the Servicing Agreement.
"HISTORICAL LOAN MODIFICATION REPORT" means a report
substantially in the form of EXHIBIT F to the Servicing Agreement.
"INDEPENDENT CONTRACTOR" means any Person that would be an
"independent contractor" with respect to REMIC I within the meaning of Section
856(d)(3) of the Code if REMIC I were a real estate investment trust (except
that the ownership test set forth in that section shall be considered to be met
by 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 be at no expense to the Trustee, the
Servicer, the Special Servicer or the Trust, delivered to the Trustee, the
Servicer and the Special Servicer), so long as REMIC I does not receive or
derive any income from such Person and provided that the relationship between
such Person and REMIC I is at arm's length, all within the meaning of Treasury
Regulation Section 1.856-4(b)(5), or any other Person upon receipt by the
Trustee, the Servicer and the Special Servicer of an Opinion of Counsel, which
shall be at no expense to the Trustee, the Servicer, the Special Servicer 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.
"NET COLLECTIONS" means, with respect to any Specially
Serviced Mortgage Loan, Rehabilitated Mortgage Loan or REO Property, the total
of (i) any payments with respect to such Mortgage Loan, (ii) Net Operating
Income with respect to the related Mortgaged Property or such REO Property,
and/or (iii) Net Liquidation Proceeds with respect to such Mortgage Loan or REO
Property, that is, in each such case, allocable as a recovery of principal of
and/or interest (adjusted to the related Net Mortgage Rate) on such Mortgage
Loan or the related REO Loan or as a recovery of a Net Prepayment Premium with
respect thereto.
"NET OPERATING INCOME" means Operating Income minus Operating
Expenses.
"NEW LEASE" means any lease of REO Property entered into on
behalf of REMIC I, including any lease renewed, modified or extended on behalf
of REMIC I if REMIC I has the right to renegotiate the terms of such lease.
"NONRECOVERABILITY NOTICE" means written notice from the
Servicer, the Trustee or the Fiscal Agent stating its determination that any
required Servicing Advance made with respect to all or any part of the expenses
included in an Estimate or a Resolution Estimate, as the case may be, would be a
Nonrecoverable Advance.
"OPERATING EXPENSES" means, with respect to any Mortgaged
Property or REO Property, all expenses incurred in connection with the
ownership, operation, maintenance, repair and leasing of the Mortgaged Property
or REO Property, but shall not include the cost of capital improvements,
depreciation or interest, principal, premiums, penalties and any other amounts
due
<PAGE>
4
under the related Mortgage Loan or any other indebtedness to which such
Mortgaged Property or REO Property is subject.
"OPERATING INCOME" means all income derived from a Mortgaged
Property or an REO Property other than Condemnation Proceeds, Insurance Proceeds
or Liquidation Proceeds and other funds required to be held in trust by the
Mortgagor (i.e, security deposits) for the benefit of a third party until any
such amounts are released to the Mortgagor.
"PROPERTY VALUATION" has the meaning set forth in Section
4.04(b).
"REMIC" has the meaning set forth in the Preliminary
Statement.
"RENTS FROM REAL PROPERTY" means, with respect to any REO
Property, gross income of the character described in Section 856(d) of the Code.
"REO ACCOUNT" has the meaning set forth in Section 4.14(a).
"REO STATUS REPORT" means a report substantially in the form
of EXHIBIT I to the Servicing Agreement.
"REQUIRED APPRAISAL LOAN" has the meaning set forth in Section
4.04(b).
"RESOLUTION ESTIMATE" has the meaning set forth in Section
4.04(c).
"SERVICER" means GMAC Commercial Mortgage Corporation and its
permitted successors or assigns.
"SERVICING AGREEMENT" means the Servicing Agreement, dated as
of October 1, 1996, among the Depositor, the Trustee, the Servicer and the
Special Servicer, as such agreement may from time to time be amended,
supplemented or otherwise modified.
"SERVICING OFFICER" means, with respect to the Special
Servicer, any officer or employee of the Special Servicer involved in, or
responsible for, the administration and servicing of the Specially Serviced
Mortgage Loans and any REO Properties whose name and specimen signature appear
on a list of servicing officers or employees furnished to the Trustee and the
Servicer by the Special Servicer as such list may from time to time be amended.
"SPECIAL SERVICER" means CRIIMI MAE Services Limited
Partnership and its permitted successors or assigns.
"SPECIAL SERVICER ERRORS AND OMISSIONS INSURANCE POLICY" means
an errors and omissions insurance policy with a Qualified Insurer maintained by
the Special Servicer which names the Trustee as loss payee.
"SPECIAL SERVICER FIDELITY BOND" means a bond or insurance
policy with a Qualified Insurer under which the insurer (i) agrees to indemnify
the Special Servicer (subject to standard
<PAGE>
5
exclusions) for all losses (less any deductible) sustained as a result of any
theft, embezzlement, fraud or other dishonest act on the part of the Special
Servicer's directors, officers, employees or other Persons acting on behalf of
the Special Servicer, (ii) which provides for limits of liability under such
bond for each director, officer or employee of not less than the amount that
would be required for the Special Servicer by FNMA or FHLMC with respect to
multifamily mortgage loans and as is customary to servicers of commercial
mortgage loans and (iii) which names the Trustee as loss payee.
"SPECIAL SERVICER REMITTANCE DATE" means the second Business
Day following each Determination Date.
"SPECIALLY SERVICED MORTGAGED LOAN" has the meaning set forth
in the Servicing Agreement.
"SPECIAL SERVICING BASIC FEE" means the amount described in
Section 4.11(a)(i).
"SPECIAL SERVICING COMPENSATION" means the Special Servicing
Basic Fee and the Special Servicing Supplemental Fee.
"SPECIAL SERVICING SUPPLEMENTAL FEE" means the amount
described as such in Section 4.11(a)(ii).
"TRUST" has the meaning set forth in the Preliminary
Statement.
"TRUST AGREEMENT" means the Trust Agreement, dated as of
October 1, 1996, among the Depositor, the Trustee, the Servicer, the Special
Servicer and the Fiscal Agent, as such agreement may from time to time be
amended, supplemented or otherwise modified.
"TRUST FUND" has the meaning set forth in the Preliminary
Statement.
"TRUSTEE" means LaSalle National Bank, as trustee of the
Trust, and its permitted successors and assigns.
ARTICLE II
ADMINISTRATION OF FUNDS
Section 2.01 APPLICATION OF FUNDS RECEIVED.
The Servicer is obligated under the terms of the Servicing
Agreement to collect all payments with respect to the Mortgage Loans (other than
income with respect to REO Property). If, however, the Special Servicer receives
any payments with respect to any Mortgage Loan (other than REO Property) it
shall, within two Business Days of receipt of any amounts attributable to
payments with respect to, or the Net Liquidation Proceeds derived from the
foreclosure (or similar action) in respect of, any Mortgage Loan, and the Net
Liquidation
<PAGE>
6
Proceeds derived from the sale of any Mortgage Loan or REO Property, as well as
any Default Interest, late payment charges and similar items collected on any
Mortgage Loan (but not including amounts attributable to income, Insurance
Proceeds or Condemnation Proceeds from any REO Property, which shall be
deposited in the applicable REO Account as provided in Section 4.14 or, in the
case of Insurance Proceeds or Condemnation Proceeds, applied to the restoration
or repair of the related REO Property), either (i) deliver such amounts to the
Servicer (endorsed, if appropriate, without recourse or warranty, to the order
of the Servicer), or (ii) deposit such amounts, or cause such amounts to be
deposited, in the Custodial Account. The Special Servicer shall notify the
Servicer by facsimile transmission of all such amounts received on or before the
date required for the making of such delivery or deposit, as the case may be,
indicating the Mortgage Loan or REO Property to which any such amount is to be
applied.
Section 2.02 SPECIAL SERVICER REPORTS TO THE TRUSTEE,
RATING AGENCIES, SERVICER AND OPERATING
ADVISER.
(a) On the second Business Day after each Determination Date,
the Special Servicer shall deliver or cause to be delivered to the Servicer and
each of the Rating Agencies a report, on a computer readable magnetic medium or
a computer diskette, setting forth the information required by SCHEDULE I and
SCHEDULE II attached hereto.
(b) The Servicer shall provide to the Special Servicer and
each of the Rating Agencies a report containing, to the extent available to the
Servicer, the information with respect to Specially Serviced Mortgage Loans
required by SCHEDULE I and SCHEDULE II hereto on or prior to each Determination
Date.
(c) Not later than the Special Servicer Remittance Date each
month, the Special Servicer shall forward, in computer readable magnetic medium
in the format set forth on Exhibits D, E, F and I of the Servicing Agreement:
(1) to the Servicer all information the Servicer will be required to include in
the Delinquent Loan Status Report, the Historical Liquidation Loss Report, the
Historical Loan Modification Report and the REO Status Report that the Servicer
is obligated to deliver to the Trustee, to the extent such information relates
to any Specially Serviced Mortgage Loan or any REO Property and (2) to the
Servicer, the Trustee, the Depositor, the Operating Adviser and each of the
Rating Agencies a statement setting forth: (i) the status of each REO Account as
of the close of business on such Special Servicer Remittance Date, (ii)
information, for the period from the day following the preceding Special
Servicer Remittance Date (or, in the case of the initial Special Servicer
Remittance Date, from the Cut-off Date) to such Special Servicer Remittance
Date, as to the aggregate of deposits into and withdrawals from each REO Account
for each category of deposit and each category of withdrawal specified in
Section 4.14, and (iii) a statement that all amounts that the Special Servicer
is required by the terms of this Agreement to deliver to the Servicer or deposit
in the Custodial Account on such Special Servicer Remittance Date have been so
delivered or deposited (or, if any amount required to be so delivered or
deposited has not been so delivered or deposited, information regarding the
nature and status of such amount). The Special Servicer shall also deliver to
the 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 indemnify the Trust, the Servicer and the
Trustee for any liability of or assessment against any of them resulting from
any error
<PAGE>
7
resulting from the bad faith, negligence or willful malfeasance of the Special
Servicer in any of the information the Special Servicer is required to prepare
under this Agreement, but shall have no obligation to so indemnify with respect
to information correctly provided to the Servicer by the Special Servicer but
incorrectly reflected in the information delivered to the Trustee by the
Servicer.
(d) The Special Servicer shall use its reasonable efforts to
obtain copies of all of the monthly, quarterly and annual operating statements
for each Mortgaged Property and monthly, quarterly and annual rent rolls for
each Mortgaged Property, regardless of whether the related Mortgage Loan
documents require the Mortgagor to provide such information.
Not later than the fifth Business Day following the
Determination Date each month, commencing in December 1996, the Special Servicer
shall deliver to the Trustee and the Rating Agencies an Operating Statement
Analysis with respect to all quarterly and annual operating statements and rent
rolls received by the Special Servicer during the related Collection Period
(including attached copies of such operating statements and rent rolls on which
it is based) with respect to Mortgage Loans or Groups of Cross-Collateralized
Mortgage Loans, including, among other things, information regarding the
applicable Debt Service Coverage Ratio. With respect to each Mortgage Loan and
Group of Cross-Collateralized Mortgage Loans for which the Special Servicer
receives monthly but not quarterly operating statements and rent rolls, the
Special Servicer shall deliver to the Trustee and the Rating Agencies an
Operating Statement Analysis based thereon once per calendar quarter. Each such
Operating Statement Analysis will be provided to the Servicer upon request.
(e) Not later than the Special Servicer Remittance Date each
month, the Special Servicer shall deliver to the Servicer, in computer readable
magnetic medium in the format set forth on Exhibit B of the Servicing Agreement,
the information in the possession of the Special Servicer necessary for the
Servicer to complete the Comparative Financial Status Report.
(f) The Special Servicer shall cooperate with the Servicer and
provide the Servicer with the information in the possession of the Special
Servicer reasonably requested by the Servicer, in writing, to the extent
required to allow the Servicer to perform its obligations under the Transaction
Documents with respect to the Mortgage Loans and REO Properties.
Section 2.03 THE SPECIAL SERVICER TO REPORT TO THE
OPERATING ADVISER.
As and to the extent provided in Section 5.10 of the Trust
Agreement, the Special Servicer shall seek the advice and approval of, and take
direction from, the Operating Adviser elected pursuant to Section 5.08 of the
Trust Agreement.
Section 2.04 THE SPECIAL SERVICER TO COOPERATE WITH THE
SERVICER.
(a) The Special Servicer shall furnish reports (including any
property inspection reports), certifications, Appraisals and information
reasonably requested by the Servicer to enable it to perform its duties under
the Servicing Agreement; provided that no such request shall (i) require or
cause the Special Servicer to violate any provision of the Transaction
Documents, including, without limitation, the Special Servicer's obligation to
act in accordance with the
<PAGE>
8
servicing standards set forth in Section 4.01 of this Agreement and to maintain
the REMIC status of each of REMIC I, REMIC II and REMIC III or (b) expose the
Special Servicer, the Trust, the Trustee or the Fiscal Agent to liability or
materially expand the scope of the Special Servicer's responsibilities under the
Transaction Documents. The Special Servicer shall notify the Servicer promptly
of any cost or expense with respect to which the Servicer is required under the
Transaction Documents to make Servicing Advances. The Special Servicer shall
forward to the Servicer promptly upon receipt all invoices relating to Servicing
Advances that the Servicer has made or is obligated to make.
(b) The Special Servicer shall from time to time make reports
and recommendations and provide analyses to the Operating Adviser with respect
to the following matters:
(i) whether the foreclosure of a Mortgaged Property
relating to a Specially Serviced Mortgage Loan would be in the
best economic interests of the Certificateholders (taken as a
whole);
(ii) if the Operating Adviser elects to proceed with
a foreclosure, whether a deficiency judgment should or should
not be sought because the likely recovery will or will not be
sufficient to warrant the expense of obtaining such a
judgment;
(iii) whether the waiver or enforcement of any
"due-on-sale" clause or "due-on-encumbrance" clause contained
in a Mortgage Loan is in the best economic interests of the
Certificateholders (taken as a whole);
(iv) in connection with any proposed assumption
agreement with a Person to whom a Mortgaged Property securing
a Specially Serviced Mortgage Loan is to be conveyed, or the
release of the original Mortgagor from liability upon a
Specially Serviced Mortgage Loan and the substitution of a new
Mortgagor, whether the credit status of the prospective new or
substitute Mortgagor would meet a prudent lender's
underwriting standards for multifamily and commercial mortgage
loans originated by it; and
(v) in connection with the foreclosure on a Specially
Serviced Mortgage Loan secured by a Mortgaged Property which
is not in compliance with all applicable Environmental Laws,
including, without limitation, CERCLA, whether it is in the
best economic interests of the Certificateholders (taken as a
whole) to take the actions and incur the expense that would be
required in order to bring the Mortgaged Property into
compliance therewith and an estimate of the cost of doing so.
(c) In addition to providing assistance to the Operating
Adviser as provided in Section 2.04(b), the Special Servicer shall, with respect
to any proposed modification (which shall include any proposed release,
substitution or addition of collateral), extension, waiver, amendment,
discounted payoff or sale of a Specially Serviced Mortgage Loan, prepare and
deliver to the Operating Adviser a summary of such proposed action and an
analysis of whether such
<PAGE>
9
action is reasonably likely to produce a greater recovery of Net Collections on
a present value basis (the relevant discounting to be performed at the related
Net Mortgage Rate) than liquidation of such Mortgage Loan. Such analysis shall
specify the basis on which the Special Servicer has made such determination,
including the status of any existing material default or the grounds for
concluding that a payment default is reasonably foreseeable.
(d) Any and all reports provided by the Special Servicer to
any of the Servicer and the Operating Adviser shall also be delivered to the
Trustee.
ARTICLE III
TERMINATION
Section 3.01 TERMINATION.
(a) The obligations of the Special Servicer under the
Transaction Documents (other than the obligation of the Special Servicer to make
payments to the Servicer as set forth in Sections 2.01 and 4.14(b) and the
obligations of the Special Servicer pursuant to Sections 4.08(b) and 4.24) shall
terminate on the date which is the earlier of (i) the later of (A) the final
payment or other liquidation of the last Mortgage Loan remaining in the Trust
Fund or (B) the disposition of all REO Property remaining in the Trust Fund; or
(ii) except as otherwise provided in Section 3.02(b), 60 days following the date
on which the Trustee or the Depositor shall have given written notice to the
Special Servicer that such obligations are terminated pursuant to Section
3.01(b) or 3.01(c).
(b) The Trustee or the Depositor may terminate the Special
Servicer's obligations under the Transaction Documents by delivering to the
Special Servicer (with a copy to the other parties hereto) a written notice of
such termination upon the occurrence of any of the following events (each, an
"EVENT OF DEFAULT"): (i) any failure by the Special Servicer to remit to the
Servicer or deposit in the REO Account or the Custodial Account when due any
amount required to be so remitted or deposited under the terms of any of the
Transaction Documents; (ii) any breach on the part of the Special Servicer of
any material obligation set forth in the Transaction Documents which continues
unremedied for 60 days after notice of such breach given by the Trustee or the
Servicer; (iii) the Special Servicer shall have made one or more false or
misleading representations or warranties herein that materially and adversely
affects the interests of the Certificateholders and shall not have remedied each
such false or misleading representation or warranty within 60 days after notice
thereof given by the Trustee or the Servicer; (iv) a trustee, receiver or
conservator or similar person shall have been appointed for the Special Servicer
or its property in any bankruptcy, insolvency or similar proceeding; (v) the
Special Servicer shall have executed an assignment for the benefit of its
creditors; or (vi) a change in the status of the Special Servicer that would
result in a qualification, downgrading or withdrawal of the ratings on the
Certificates that are rated. Any such notice shall specify the reason for the
termination.
(c) The Trustee shall terminate the services of the Special
Servicer under the Transaction Documents by delivering to the Special Servicer
(with a copy to the other parties
<PAGE>
10
hereto) a written notice of such termination if (i) it receives from the
Operating Adviser written notice that the Operating Adviser wishes to appoint a
successor Special Servicer and (ii) such proposed successor (A) shall have
agreed to serve as such, (B) shall be reasonably satisfactory to the Trustee and
to the Depositor, (C) have executed and delivered to the Trustee an agreement,
in form and substance reasonably satisfactory to the Trustee, pursuant to which
the successor special servicer has agreed, upon the termination of the current
Special Servicer, to assume and perform the duties of the Special Servicer set
forth in the Transaction Documents. However, no such successor shall become
special servicer unless the Trustee shall have received written assurance from
each Rating Agency that the succession of such proposed successor would not
result in a qualification, downgrading or withdrawal of the then current ratings
on the Certificates.
Section 3.02 PROCEDURE FOR TERMINATION.
(a) If it involves a Specially Serviced Mortgage Loan or REO
Property, notice of any termination pursuant to clause (i) of Section 3.01(a),
specifying the Special Servicer Remittance Date upon which the final transfer by
the Special Servicer to the Servicer shall be made, shall be given promptly by
the Special Servicer to the Servicer no later than the later of (i) five
Business Days after the final payment or other liquidation of the last Mortgage
Loan or REO Property or (ii) the fifth day of the month of the final remittance.
The Servicer shall give an identical notice to the Special Servicer if such
termination involves a Mortgage Loan other than a Specially Serviced Mortgage
Loan. Upon any such termination, the duties of the Special Servicer (other than
the obligation of the Special Servicer to the Servicer amounts held by the
Special Servicer with respect to the Mortgage Loans and REO Properties as set
forth below and the obligations of the Special Servicer pursuant to Sections
4.08(b) and 4.24) shall terminate and the Special Servicer shall transfer to the
Servicer in accordance with Sections 2.01 and 4.14(b) the amounts remaining in
each REO Account and otherwise held by the Special Servicer with respect to the
Mortgage Loans and REO Properties and shall thereafter terminate each REO
Account and any other account or fund maintained with respect to the Specially
Serviced Mortgage Loans.
(b) Sixty days after a written notice of termination of the
Special Servicer pursuant to clause (ii) of Section 3.01(a) and either Section
3.01(b) or Section 3.01(c), all authority, power and rights of the Special
Servicer under the Transaction Documents, whether with respect to the Specially
Serviced Mortgage Loans or otherwise, shall terminate; provided that in no event
shall the termination of the Special Servicer be effective until the Trustee
shall have succeeded the Special Servicer as successor special servicer (if the
Special Servicer has been terminated for cause) or the Trustee or the Depositor
has notified the Special Servicer that another Person has been designated as
successor special servicer and such successor special servicer shall have
assumed the Special Servicer's obligations and responsibilities under the
Transaction Documents. The Trustee or other successor special servicer shall not
responsible for any liabilities or obligations incurred by the predecessor
special servicer prior the effectiveness of the Trustee's or other successor
special servicer's appointment as special servicer hereunder. The Trustee or
other successor special servicer may not succeed the Special Servicer as special
servicer until and unless it has satisfied the provisions of this Agreement that
would apply to a Person succeeding to the business of the Special Servicer set
forth in clauses (i), (ii) (if such successor special servicer is not the
Trustee) and (iii) of Section 4.20. The Trustee is hereby authorized and
empowered to execute and deliver, on behalf of the Special Servicer, as
attorney-
<PAGE>
11
in-fact or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination. The Special Servicer agrees to cooperate
with the Trustee, the Servicer and the Fiscal Agent in effecting the termination
of the Special Servicer's responsibilities and rights under the Transaction
Documents as special servicer including, without limitation, providing the
Trustee or other successor special servicer with all documents and records in
electronic or other form reasonably requested by the Trustee or such other
successor special servicer to enable the Trustee or such other successor special
servicer to assume the Special Servicer's obligations under the Transaction
Documents and transferring to the Trustee or such other successor for
administration by it of all amounts which shall at the time be or should have
been deposited by the Special Servicer in the Custodial Account, any REO Account
or any other account or fund maintained by or on behalf of the Special Servicer
or thereafter received with respect to the Mortgage Loans and/or REO Properties.
Any costs or expenses associated with the transfer of the special servicing
function under this Agreement shall be borne by the predecessor special servicer
and, if not paid by such predecessor within 30 days of its receipt of an invoice
therefor, shall be paid by the Trust Fund. However, if such transfer occurs upon
termination of the Special Servicer other than for cause, such expenses shall be
paid by the Controlling Class. Notwithstanding anything herein or in any other
Transaction Document to the contrary, the Trustee shall not succeed the Special
Servicer as successor special servicer if the Special Servicer shall have been
terminated without cause.
ARTICLE IV
ADMINISTRATION AND SERVICING OF
SPECIALLY SERVICED MORTGAGE LOANS BY SPECIAL SERVICER
Section 4.01 DUTIES OF SPECIAL SERVICER.
(a) For and on behalf of the Certificateholders and the
Trustee, the Special Servicer shall service the Specially Serviced Mortgage
Loans and manage the related REO Properties in the best interests of the Trust
and the Certificateholders in accordance with applicable law and the provisions
of the Transaction Documents, the respective Specially Serviced Mortgage Loans
and the related Insurance Policies and, to the extent consistent with the
foregoing, in accordance with Accepted Servicing Practices.
(b) Without limiting the provisions of Section 4.01(a), the
Special Servicer shall be obligated to service Specially Serviced Mortgage Loans
and the related REO Properties only to the extent expressly required or
permitted by the Transaction Documents. The Special Servicer's obligations with
respect to the commencement of servicing of any Specially Serviced Mortgage Loan
and the termination of servicing of any Rehabilitated Mortgage Loan are as
provided in Sections 4.25(a) and 4.25(e), respectively, of the Servicing
Agreement.
(c) Upon the occurrence of a Servicing Transfer Event with
respect to a Mortgage Loan, the Servicer shall cause any bills which are
generated for amounts due on such Mortgage Loan to be sent initially to the
Special Servicer before they are sent to the related Mortgagor. Upon receipt of
any such bill, the Special Servicer shall, within two Business Days, advise the
Servicer as to whether such bill should be sent to the Mortgagor and of any
changes
<PAGE>
12
to be made, and return the bill to the Servicer. The Servicer shall thereafter
promptly send the corrected bill to the Mortgagor unless the Special Servicer
has requested that such bill not be sent. If a Mortgage Loan becomes a
Rehabilitated Mortgage Loan, the Servicer shall bill the Mortgagor in the same
manner in which it billed the Mortgagor before such Mortgage Loan became a
Specially Serviced Mortgage Loan.
(d) With respect to each Mortgage Loan (whether or not it is a
Specially Serviced Mortgage Loan), the Special Servicer shall, in accordance
with Accepted Servicing Practices:
(i) cause to be conducted, at its own expense,
without right of reimbursement, inspections of the Mortgaged
Properties at such times and in such manner as shall be
consistent with Accepted Servicing Practices, including,
without limitation, upon obtaining knowledge that any
Mortgaged Property has been damaged, left vacant, abandoned,
is being subject to waste, or if a default under the related
Mortgage Loan has occurred and is continuing; provided that
the Special Servicer shall (A) conduct inspections of each
Mortgaged Property not less than on an annual basis, (B)
conduct inspections of each Mortgaged Property within six
months of the related Mortgage Loan's Maturity Date and (C)
within 30 days of conducting each such inspection, prepare and
provide to the Trustee and the Servicer a copy of the written
report relating thereto; and
(ii) upon receipt of notification from the Servicer,
which notification shall occur promptly, that a Mortgagor is
delinquent with respect to any Monthly Payment or Balloon
Payment and that the Servicer has made an initial contact (by
telephone or otherwise) with such Mortgagor in connection with
such delinquency (A) make any reasonable efforts to collect
such delinquent payments and any other payments required under
the terms and provisions of the related Mortgage Loan; and (B)
promptly apprise the Servicer of all collection and customer
service matters and furnish to the Servicer copies of all
written communications between the Special Servicer and such
Mortgagor; and
(iii) use its reasonable efforts to obtain copies of
all of the monthly, quarterly and annual operating statements
for each Mortgaged Property and monthly, quarterly and annual
rent rolls for each Mortgaged Property, regardless of whether
the related Mortgage Loan documents require the Mortgagor to
provide such information, and prepare the Operating Statement
Analysis thereon as described in Section 2.02(d).
Section 4.02 FIDELITY BOND AND ERRORS AND OMISSIONS
INSURANCE POLICY.
(a) The Special Servicer, at its expense, shall maintain in
effect with a Qualified Insurer a Special Servicer Fidelity Bond and a Special
Servicer Errors and Omissions Insurance Policy, naming LaSalle National Bank as
Trustee on behalf of the Certificateholders, as loss payee, and affording
coverage for all directors, officers, employees and other Persons acting on the
Special Servicer's behalf. The Special Servicer Errors and Omissions Insurance
Policy and Special Servicer Fidelity Bond shall be in such form and amount that
would meet the
<PAGE>
13
requirements of FNMA or FHLMC if FNMA or FHLMC were the purchaser of the
Mortgage Loans that are multifamily Mortgage Loans and in such form as is
customary for servicers of commercial mortgage loans in the case of the Mortgage
Loans that are commercial mortgage loans. Copies of the Special Servicer Errors
and Omissions Insurance Policy and the Special Servicer Fidelity Bond shall be
delivered to the Trustee promptly following the Closing Date.
(b) The Special Servicer shall promptly report in writing to
the Trustee any material changes that may occur in the Special Servicer Fidelity
Bond or the Special Servicer Errors and Omissions Insurance Policy and shall
furnish to the Trustee copies of all binders and policies or certificates
evidencing that such bond and insurance policy are in full force and effect. The
Special Servicer shall promptly report in writing to the Trustee all cases of
embezzlement, fraud or irregularities of operation relating to the servicing of
the Mortgage Loans or management of the related REO Properties by the Special
Servicer and its employees, officers, directors, agents and representatives. The
total of such losses, regardless of whether claims are filed with the insurer or
surety, shall be disclosed in any such report, together with the amount of such
losses covered by insurance. If a bond or insurance claim report is filed with
any of the Special Servicer's bonding companies or insurers relating to the
Mortgage Loans or the servicing thereof, or management of the related REO
Properties, a copy of such report (which report may omit any references to
individuals suspected of such embezzlement, fraud or irregularities of
operation) shall be promptly furnished to the Trustee. Copies of any notices
furnished to the Trustee pursuant to this Section 4.02(b) shall be furnished to
each of the Rating Agencies by the Special Servicer.
Section 4.03 THE SPECIAL SERVICER'S FINANCIAL STATEMENTS
AND RELATED INFORMATION.
The Special Servicer shall deliver to the Trustee and each
Rating Agency within 90 days after the end of its fiscal year, a copy of its
annual financial statements or the consolidated annual financial statements of
its parent, such financial statements to be audited by a nationally recognized
firm of Independent Accountants and certified by the Special Servicer's or its
parent's, as appropriate, chief financial officer. The Special Servicer shall
notify the Trustee, as of the Closing Date, of the Special Servicer's fiscal
year and shall notify the Trustee promptly after any change thereof.
Section 4.04 THE SPECIAL SERVICER TO ACT AS SPECIAL
SERVICER.
(a) The Special Servicer shall service and administer the
Specially Serviced Mortgage Loans and manage the related REO Properties to the
extent expressly provided or permitted herein and shall, subject to the terms of
the Transaction Documents and as otherwise provided in the Transaction Documents
and as provided by the REMIC Provisions, have full power and authority to do any
and all things which it may deem necessary or desirable in connection with such
servicing, administration and management, after consultation with the Operating
Adviser as provided herein. Without limiting the generality of the foregoing,
and subject to the terms of the Transaction Documents, the Special Servicer is
hereby authorized and empowered, at any time and from time to time, if the
Special Servicer believes it appropriate in its reasonable judgment and in
accordance with Accepted Servicing Practices, to execute and deliver, on behalf
of itself, the Trustee, the Trust or any of them, any and all instruments of
<PAGE>
14
satisfaction or cancellation, or of partial or full release or discharge and all
other comparable instruments, financing statements and continuation statements,
with respect to the Specially Serviced Mortgage Loans and with respect to the
related Mortgaged Properties. The Trustee shall furnish the Special Servicer,
upon request, with any powers of attorney of the Trustee, empowering the Special
Servicer to take such actions as it determines to be reasonably necessary to
comply with its servicing, administrative and management duties under the
Transaction Documents, and to execute and deliver instruments of satisfaction or
cancellation, and to appeal, prosecute and defend in any court any action
relating to such Specially Serviced Mortgage Loans or any related Mortgaged
Property, in accordance with its servicing and administrative duties under the
Transaction Documents, and the Trustee shall execute and deliver or cause to be
executed and delivered such other documents as a Servicing Officer may request,
necessary or appropriate to enable the Special Servicer to service, administer
and manage the Specially Serviced Mortgage Loans and any REO Properties and
carry out its duties under the Transaction Documents, in each case in accordance
with Accepted Servicing Practices and the terms of the Transaction Documents.
However, prior to initiating any proceedings in any court of law or equity (but
not defending any proceedings in any court of law or equity) or instituting any
proceeding to foreclose on any Mortgaged Property in the name of a Trustee in
any state, the Special Servicer shall notify the Trustee in writing and the
Trustee may within five Business Days of receipt of such notice advise the
Special Servicer that it has received an Opinion of Counsel, from an attorney
duly licensed to practice law in the state where the related Mortgaged Property
or REO Property is located, to the effect that it is likely that the laws of the
state in which such action would be commenced either prohibit such action if
taken in the name of the Trustee or that the Trustee would be adversely affected
under the "doing business" or tax laws of such state if such action were to be
taken in its name, unless the Special Servicer reasonably believes that such
action must be taken in less than such five Business Day period to preserve the
property of the Trust for the benefit of Certificateholders, in which case the
Special Servicer may take such action; provided that the Special Servicer shall
indemnify the Trustee and any officer, director, agent or controlling Person of
the Trustee and hold them harmless against any and all claims, losses,
penalties, fines, forfeitures, legal fees and related costs, judgments and
expenses that such Persons may sustain because of such action. Upon receipt of
any such response from the Trustee, the Special Servicer shall take such action
in the name of such Person or Persons, in trust for the Trustee, as shall be
consistent with the Opinion of Counsel obtained by the Trustee (the cost of
which shall be payable out of the Collection Account pursuant to Sections
5.05(b) and 7.12 of the Trust Agreement). The Special Servicer shall be entitled
to rely on such Opinion of Counsel in determining to take such action. Such
Person or Persons shall acknowledge in writing that such action is being taken
in the name of the Trustee. In the performance of its duties under the
Transaction Documents, the Special Servicer shall be an independent contractor
and shall not, except in those instances where it is, after notice to the
Trustee as provided above, taking action in the name of the Trustee, be deemed
to be the agent of the Trustee.
(b) With respect to each Mortgage Loan that becomes a
Specially Serviced Mortgage Loan, the Special Servicer shall prepare and deliver
to the Trustee, the Rating Agencies, the Servicer and the Fiscal Agent, as soon
as reasonably practicable, but within two months of the transfer of servicing to
the Special Servicer, a Property Valuation (as defined below) of the Mortgaged
Property or Properties related to such Specially Serviced Mortgage Loan. The
out-of-pocket costs incurred by the Special Servicer in obtaining such Property
<PAGE>
15
Valuation shall be paid by a Servicing Advance recoverable by the Servicer
pursuant to Section 2.02(a) of the Servicing Agreement.
As used in this Section 4.04(b), a "PROPERTY VALUATION" means
an internal valuation by the Special Servicer of any Mortgaged Property,
conducted by an employee of the Special Servicer or an Affiliate of the Special
Servicer with the requisite experience in real estate matters to make such
valuation, and which valuation is based upon the discounted value of the
projected net operating income stream from the Mortgaged Property and determined
in accordance with MAI standards. The projected net operating income stream
shall be based upon stabilized income and expense estimates which take into
account: (i) market vacancy rates; (ii) the operating income and expenses of
similar properties in similar markets; (iii) if possible, specific historical
operating results and current rent rolls; and (iv) the results of a physical
inspection of the property. The stabilized operating income stream amount should
be capitalized by a rate typical for the specific property type and locations
and which properly reflects current mortgage rates and investor expectations
relative to a return on equity; provided that such capitalized rate should be
adjusted for significant deferred maintenance items as well as for excessive
actual vacancy. In calculating expense estimates in connection with any Property
Valuation, the Special Servicer shall include reasonable costs of tenant
improvements, brokerage commissions or other expenses determined to be necessary
in order to bring the vacancy rate of a Mortgaged Property into conformity with
the related market vacancy rate. Notwithstanding the foregoing, if an Appraisal
in respect of the Mortgaged Property or Properties relating to any Specially
Serviced Mortgage Loan has been conducted during the prior 12-month period, or
if at the time any Mortgage Loan becomes a Specially Serviced Mortgage Loan, it
is a Required Appraisal Loan as to which an Appraisal has or is to be ordered in
accordance with the following paragraph, no separate valuation need be performed
by the Special Servicer, and such Appraisal shall constitute a Property
Valuation for all purposes of this Agreement and the other Transaction
Documents.
Upon the earliest of (i) the date on which any Mortgage Loan
becomes a Modified Mortgage Loan, (ii) the 120th day (or, in the case of a
Modified Mortgage Loan, the 30th day) following the occurrence of any uncured
delinquency in Scheduled 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 and (iv) the date on which
the Mortgaged Property securing any Mortgage Loan becomes an REO Property (each
such Mortgage Loan, a "Required Appraisal Loan"), the Special Servicer shall
promptly obtain an Appraisal of the related Mortgaged Property or Properties,
unless an Appraisal thereof had previously been obtained within the prior twelve
months. The cost of such Appraisal shall be paid, or reimbursed to the Special
Servicer, by a Servicing Advance of the Servicer reimbursable pursuant to
Section 2.02(a) of the Servicing Agreement.
With respect to each Required Appraisal Loan (unless such loan
has become a Rehabilitated Mortgage Loan and has remained current for twelve
consecutive Scheduled Payments, and no other Servicing Transfer Event has
occurred with respect thereto during the preceding twelve months), the Special
Servicer shall, within 30 days of each anniversary of such loan's becoming a
Required Appraisal Loan, order an update of the prior Appraisal (the cost of
which will be a paid, or reimbursed to the Special Servicer, by a Servicing
Advance of the Servicer reimbursable pursuant to Section 2.02(a) of the
Servicing Agreement). Based upon such
<PAGE>
16
Appraisal, the Special Servicer shall redetermine and report to the Trustee the
Appraisal Reduction Amount, if any, with respect to such loan.
(c) Within ten Business Days after the Special Servicer shall
have received from the Servicer notice of a Servicing Transfer Event with
respect to a Mortgage Loan, the Special Servicer shall deliver to the Trustee
and the Servicer a statement setting forth an estimate of the expenses to be
incurred with respect to such Specially Serviced Mortgage Loan until the date on
which the Special Servicer expects to deliver the Property Valuation, pursuant
to Section 4.04(b), to the Trustee and the Servicer (the "ESTIMATE").
If, within five Business Days after the Special Servicer has
so delivered the report setting forth such Estimate, the Special Servicer has
not received the related Nonrecoverability Notice, then the Special Servicer may
incur the obligations related to such Specially Serviced Mortgage Loan up to the
amount of the Estimate, and such obligations shall be paid by Servicing Advances
of the Servicer recoverable pursuant to Section 2.02(a) of the Servicing
Agreement. To the extent any required Servicing Advance relating to such
obligations to be incurred by the Special Servicer has been specified as a
Nonrecoverable Advance in the related Nonrecoverability Notice, such obligations
shall not be incurred by the Special Servicer except as allowed by the
succeeding sentence; provided that the Special Servicer may incur the other
obligations specified in the Estimate, and such obligations shall be paid by
Servicing Advances of the Servicer recoverable pursuant to Section 2.02(a) of
the Servicing Agreement. Notwithstanding the preceding sentence, if the Servicer
determines that it would be in the best interest of the Certificateholders
(taken as a whole) for one or more of the obligations specified as a
Nonrecoverable Advance in the related Nonrecoverability Notice to be incurred,
the Servicer shall instruct the Special Servicer to incur such obligations and
the cost thereof shall be reimbursed to the Special Servicer by withdrawal from
funds on deposit in the Custodial Account pursuant to Section 2.02(a)(iv)(B) of
the Servicing Agreement.
Upon delivery of the Property Valuation to the Servicer and
the Trustee, as provided above in this Section 4.04(c), the Special Servicer
shall also deliver to the Servicer, the Rating Agencies and the Trustee an
estimate (the "RESOLUTION ESTIMATE") of the amounts to be expended with respect
to the resolution of such Specially Serviced Mortgage Loan (including amounts to
be expended if the related Mortgaged Property becomes an REO Property) and an
estimate of how such amounts would be expended and the period of time over which
such amounts would be expended. Subject to the provisions of the next paragraph,
neither the Servicer nor the Trustee shall have any right to approve the
estimated amount of such expenditures, the manner in which such amounts are to
be expended or the period of time over which such amounts are to be expended,
and the Special Servicer shall not be obligated to expend amounts included in
the Resolution Estimate or to expend amounts in the manner specified in the
Resolution Estimate. The Resolution Estimate may be increased by the Special
Servicer from time to time upon written notice to the Servicer and the Trustee.
If, within ten Business Days after the Special Servicer has so
delivered the Resolution Estimate (as it may be increased at any time or from
time to time), the Special Servicer has not received the related
Nonrecoverability Notice with respect to all or any part of the expenses
included in such Resolution Estimate, then the Special Servicer may incur
obligations related to such Specially Serviced Mortgage Loan up to the amount of
such
<PAGE>
17
Resolution Estimate, and such obligations shall be paid by Servicing Advances of
the Servicer recoverable pursuant to Section 2.02(a) of the Servicing Agreement.
To the extent any required Servicing Advance relating to such expenses to be
incurred by the Special Servicer has been specified as a Nonrecoverable Advance
in the related Nonrecoverability Notice, such obligations shall not be incurred
by the Special Servicer except to the extent allowed by the succeeding
paragraph; provided that the Special Servicer may incur the other obligations
specified in the Resolution Estimate, and such obligations shall be paid by
Servicing Advances of the Servicer recoverable pursuant to Section 2.02(a) of
the Servicing Agreement. However, the Servicer or the Trustee may send a
Nonrecoverability Notice to the Special Servicer at any time after the end of
such period of ten Business Days. If it does so, then to the extent any required
Servicing Advance related to expenses included in the Resolution Estimate and
not yet incurred is specified as a Nonrecoverable Advance in such notice, such
expenses shall not be incurred by the Special Servicer except to the extent
allowed by the succeeding paragraph.
Notwithstanding the immediately preceding paragraph, if the
Servicer determines that it would be in the best interest of the
Certificateholders (taken as a whole) for one or more of the obligations
specified as a Nonrecoverable Advance in the related Nonrecoverability Notice to
be incurred, the Servicer shall instruct the Special Servicer to incur such
obligations and the cost thereof shall be reimbursed to the Special Servicer by
withdrawal from funds on deposit in the Custodial Account pursuant to Section
2.02(a)(iv)(B) of the Servicing Agreement.
Notwithstanding the provisions of the two immediately
preceding paragraphs, the expenditure of amounts included in the Resolution
Estimate, or obligations incurred with respect to such amounts, prior to receipt
of any Nonrecoverability Notice by the Special Servicer shall be paid, or
reimbursed to the Special Servicer, by Servicing Advances of the Servicer
reimbursable pursuant to Section 2.02(a) of the Servicing Agreement. The Special
Servicer agrees to advise the Servicer and Trustee if an event occurs with
respect to a Mortgaged Property or REO Property which materially affects the
related Property Valuation, and, if such an event occurs, the Servicer or the
Trustee may make a determination that any required Servicing Advances relating
to amounts or obligations not yet expended or incurred with respect to such
Mortgaged Property would be Nonrecoverable Advances.
Section 4.05 "DUE-ON-SALE" CLAUSES; ASSUMPTION
AGREEMENTS; MODIFICATIONS OF MORTGAGE LOANS.
(a) If any Mortgage Loan contains a provision in the nature of
a "due-on-sale" clause, which by its terms:
(1) 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
(2) provides that such Mortgage Loan may not be
assumed without the consent of the related Mortgagee in
connection with any such sale or other transfer,
<PAGE>
18
then, for so long as such Mortgage Loan is included in the Trust Fund, the
Special Servicer shall, subject to the REMIC Provisions and any rights the
Operating Adviser may have pursuant to Section 5.10 of the Trust Agreement to
approve or direct the Special Servicer's actions in such regard, take such
actions as it deems to be in the best economic interests of the
Certificateholders (taken as a whole) in accordance with Accepted Servicing
Practices, and may waive or enforce any due-on-sale clause contained in the
related Mortgage Note or Mortgage.
If a Mortgage Loan permits the Mortgagor to transfer the
Mortgaged Property without the consent of the Mortgagee, or if the Special
Servicer waives compliance with the due-on-sale clause, then the Special
Servicer is authorized, after consultation with the Operating Adviser, to take
or enter into an assumption agreement from or with the Person to whom such
property has been or is about to be conveyed, and/or to release the original
Mortgagor from liability upon the Mortgage Loan and substitute the new Mortgagor
as obligor thereon. However, except as otherwise permitted by Section 4.05(c),
any such assumption or substitution agreement shall contain no terms (including
without limitation alterations in the Mortgage Rate, principal amount,
collateral or other material terms) that would constitute a "significant
modification" within the meaning of Treas. Reg. ss. 1.860G-2(b) from those in
the Mortgage Note or Mortgage prior to such assumption or substitution. To the
extent permitted by law, the Special Servicer shall enter into an assumption or
substitution agreement only if the credit status of the prospective new
mortgagor is in compliance with the Special Servicer's regular commercial
mortgage origination or servicing standards and criteria and the
single-purpose/separateness criteria initially required in connection with the
origination of the Mortgage Loan. The Special Servicer shall notify the Servicer
and the Trustee that any such assumption or substitution agreement has been
completed by forwarding to the Trustee (with a copy to the Servicer) the
original of such agreement, which original shall be added by the Trustee to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. No assumption or substitution shall be undertaken
if such assumption or substitution would be treated as a "significant
modification" of a Mortgage Loan within the meaning of Treas. Reg. ss.
1.860G-2(b).
Any Assumption Fee collected by the Special Servicer for
entering into an assumption or substitution agreement with respect to any
Mortgage Loan may be retained by the Special Servicer, as additional
compensation; provided that no such fee shall be collected (unless the amount
thereof is specified in the related Mortgage Note) and paid to the Special
Servicer if (i) such fee is not commercially reasonable under Accepted Servicing
Practices or (ii) the collection of such fee would cause the assumption or
substitution to be a "significant modification" of the Mortgage Note with the
meaning of Treas. Reg. ss.1.860G-2(b).
(b) If any Mortgage Loan contains a provision in the nature of
a "due-on- encumbrance" clause, which by its terms:
(1) provides that such Mortgage Loan shall (or may at
the mortgagee's option) become due and payable upon the
creation of any lien or other encumbrance on the related
Mortgaged Property, or
(2) requires the consent of the related Mortgagee to
the creation of any such lien or other encumbrance on the
related Mortgaged Property,
<PAGE>
19
then, for so long as such Mortgage Loan is included in the Trust Fund, the
Special Servicer shall, in a manner consistent with Accepted Servicing Practices
and subject to any rights the Operating Adviser may have pursuant to Section
5.10 of the Trust Agreement to approve or direct the Special Servicer's actions
in such regard, either (i) accelerate the payments under such Mortgage Loan,
(ii) withhold its consent to the creation of any such lien or other encumbrance,
or (iii) consent to the creation of any such lien or other encumbrance, provided
that, such lien or other encumbrance shall not be senior to, or on a parity
with, the lien of the related Mortgage. The Special Servicer shall not, in any
event, consent to the creation of any lien on a Mortgaged Property that is
senior to, or on a parity with, the lien of the related Mortgage.
Nothing in this Section 4.05 shall constitute a waiver of the
Trustee's right, as the mortgagee of record, to receive notice of any assumption
of a Mortgage Loan, any sale or other transfer of the related Mortgaged Property
or the creation of any lien or other encumbrance with respect to such Mortgaged
Property.
(c) Except as otherwise expressly permitted by this Section
4.05, the Special Servicer shall not agree to modify, waive or amend (and no
assumption or substitution agreement entered into pursuant to Section 4.05(a)
shall contain any terms that are different from) any term of any Mortgage Loan
or the related Mortgage Note.
If (but, except as otherwise permitted by Section 4.05(a) or
4.05(b), only if) the Special Servicer determines, after consultation with the
Operating Adviser, that a modification, waiver or amendment (including without
limitation the substitution or release of collateral or the pledge of additional
collateral) of the terms of a Mortgage Loan with respect to which a payment
default or other material default has occurred or a payment default is, in the
Special Servicer's judgment, reasonably foreseeable, as evidenced by an
Officer's Certificate of the Special Servicer, is reasonably likely to produce a
greater recovery of Net Collections on a present value basis (the relevant
discounting to be performed at the related Net Mortgage Rate) than liquidation
of such Mortgage Loan, then the Special Servicer may, but is not required to,
subject to any rights the Operating Adviser may have pursuant to Section 5.10 of
the Trust Agreement to approve or direct the Special Servicer's actions in such
regard, agree to a modification, waiver or amendment of such Mortgage Loan,
subject to the other provisions of this Section 4.05(c).
The Special Servicer shall not agree to a modification, waiver
or amendment of any term of any Mortgage Loan if such modification, waiver or
amendment would:
(i) extend the maturity date of any such Mortgage
Loan to a date occurring later than the earlier of (A) two
years prior to the Rated Final Distribution Date and (B) if
such Mortgage Loan is secured by a leasehold estate, the date
ten years prior to the termination of such leasehold;
(ii) extend the Maturity Date of any such Mortgage
Loan, unless, if the related Mortgage Rate is below the then
prevailing interest rate as determined by the Special
Servicer, such Mortgage Rate is modified to equal such then
prevailing interest rate;
<PAGE>
20
(iii) provide for the deferral of interest unless (A)
interest accrues thereon at the related Mortgage Rate and (B)
the aggregate amount of such deferred interest (which for
purposes of the Transaction Documents shall be deemed not to
have been added to the principal of such loan) cannot exceed
5% of the Unpaid Principal Balance of the Mortgage Loan;
(iv) reduce the Mortgage Rate on any such Mortgage
Loan to less than the then prevailing interest rate as
determined by the Special Servicer; or
(v) result in a prepayment (other than from
Liquidation Proceeds, Insurance Proceeds or Condemnation
Proceeds) on a date other than the Mortgage Loan's Due Date.
Notwithstanding any other provision of this Agreement or any
other Transaction Document, the Special Servicer shall not agree to or approve
any modification, waiver (including, without limitation, any waiver of a
"due-on-sale" or "due-on-encumbrance" provision) or amendment of any term of any
Mortgage Loan (other than a modification, waiver, or amendment permitted by this
Section 4.05(c)) unless the Special Servicer has first obtained and delivered to
the Trustee an Opinion of Counsel (at the expense of the party making the
request of the Special Servicer to modify the Mortgage Loan), to the effect that
the proposed modification, waiver or amendment will not (A) cause REMIC I, REMIC
II or REMIC III to fail to qualify as a REMIC for purposes of the Code, (B)
result in a gain on the disposition of a Qualified Mortgage that would be
subject to the 100% tax on prohibited transactions imposed by Section 860F(a) of
the Code or (C) cause any of REMIC I, REMIC II or REMIC III to be subject to any
tax under the REMIC Provisions or equivalent provisions of any federal, state or
local law or ordinance. Any such Opinion of Counsel may relate to more than one
transaction if the Opinion of Counsel by its terms defines a class of similar or
identical transactions to which such Opinion of Counsel applies.
The Special Servicer shall use it reasonable efforts, in
accordance with Accepted Servicing Practices, to collect any Modification Fees
and other expenses relating to a permitted modification of a Mortgage Loan from
the Mortgagor, which Modification Fee may be retained by the Special Servicer,
as additional compensation. The Special Servicer shall charge the Mortgagor for
any costs and expenses incurred by the Servicer, the Special Servicer and the
Trustee in connection with any request for modification, unless the Special
Servicer determines that the Mortgagor cannot reasonably afford such costs and
expenses, in which case such costs and expenses shall be recoverable from the
Custodial Account as Trust Fund expenses. Solely in the case of a Mortgagor that
is in default or with respect to which the Special Servicer has made a
determination that, in its judgment, default is reasonably foreseeable, the
inability of the Mortgagor to pay any costs and expenses of a proposed
modification shall not impair the right of the Special Servicer to be reimbursed
for its costs and expenses by a Servicing Advance of the Servicer recoverable
pursuant to Section 2.02(a) of the Servicing Agreement. No Modification Fee
referred to above shall be collected (unless the amount thereof is specified in
the related Mortgage Note) if (i) such fee is not commercially reasonable under
Accepted Servicing Practices or (ii) the collection of such fee would cause the
related modification, waiver or amendment to be a "significant modification" of
the Mortgage Note within the meaning of Treas. Reg. ss. 1.860G-2(b).
<PAGE>
21
The Special Servicer will promptly deliver to the Servicer,
the Operating Adviser and the Trustee a notice describing any modification,
waiver or amendment granted or entered into with respect to any Mortgage Loan.
In addition, the Special Servicer shall deliver to the Trustee an Officer's
Certificate setting forth the justification for such waiver, modification, or
amendment (including without limitation information such as related income and
expense statements, rent rolls, occupancy status, the results of property
inspections, and an Appraisal), including without limitation, in the case of any
Mortgage Loan modified to permit the deferral of interest, information as to
each Due Date as of which deferred interest is created and the amount thereof.
If such appraisal is performed by an appraiser other than the Special Servicer,
the cost of such appraisal shall be paid, or reimbursed to the Special Servicer,
by a Servicing Advance of the Servicer reimbursable pursuant to Section 2.02(a)
of the Servicing Agreement. The Special Servicer shall also deliver to the
Trustee, for deposit in the related Mortgage File, an original counterpart of
the agreement relating to such modification, waiver or amendment promptly
following the execution thereof.
(d) If it is the judgment of the Special Servicer (as
evidenced by an Officer's Certificate stating such judgment), after consultation
with the Operating Adviser, that any proposed action (other than a modification
of a Mortgage Loan, sale of an REO Property or any other action permitted by any
provision of this Agreement) with respect to a Mortgage Loan with respect to
which a payment default or other material default has occurred or a payment
default is reasonably foreseeable will produce a greater recovery of Net
Collections on a present value basis (the relevant discounting to be performed
at the related Net Mortgage Rate) than failure to take such action (including,
without limitation, the voting by the Special Servicer on behalf of the Trustee
as a creditor or otherwise in any bankruptcy or similar proceeding), then the
Special Servicer, subject to any rights the Operating Adviser may have pursuant
to Section 5.10 of the Trust Agreement to approve or direct the Special
Servicer's actions in such regard, may take such action if the Special Servicer
obtains an Opinion of Counsel, the cost of which shall be paid, or reimbursed to
the Special Servicer, by a Servicing Advance of the Servicer reimbursable
pursuant to Section 2.02(a) of the Servicing Agreement, to the effect that the
taking of such action will not cause any of REMIC I, REMIC II or REMIC III to
fail to qualify as a REMIC for purposes of the Code.
Section 4.06 RELEASE OF MORTGAGE FILES.
(a) Upon becoming aware of the payment in full of the balance
of any Specially Serviced Mortgage Loan, or the receipt by the Special Servicer
of a notification that payment in full will be escrowed in a manner customary
for such purposes, the Special Servicer shall immediately notify the Trustee and
the Servicer by a certification substantially in the form of EXHIBIT A hereto
(which certification shall include a statement to the effect that all amounts
received by the Special Servicer in connection with such payment that are
required to be deposited in the Custodial Account pursuant to Section 2.01 of
the Servicing Agreement have been or will be so deposited) of a Servicing
Officer and shall request delivery of the related Mortgage File to the Special
Servicer. Upon receipt of such certification and request, the Trustee shall
promptly release or cause the release of the related Mortgage File to the
Special Servicer, and the Trustee shall have no further responsibility with
regard to such Mortgage File. Upon receipt of such payment in full, the Special
Servicer is authorized to give, on behalf of the Certificateholders, an
instrument of satisfaction (or assignment of mortgage without recourse)
<PAGE>
22
regarding the Mortgaged Property subject to the related Mortgage, which
instrument of satisfaction or assignment, as the case may be, shall be delivered
to the Person or Persons entitled thereto against receipt therefor of such
payment, it being understood and agreed that no expenses incurred in connection
with such instrument of satisfaction or assignment, as the case may be, shall be
chargeable to the Custodial Account unless the law of the jurisdiction in which
the Mortgaged Property is located requires the lender to pay such cost.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Specially Serviced Mortgage Loan or the management of any REO
Property and in accordance with Accepted Servicing Practices, the Trustee shall
execute or cause to be executed such documents as shall be prepared and
furnished to the Trustee by a Servicing Officer of the Special Servicer (in form
reasonably acceptable to the Trustee) and as are necessary for such purposes,
including without limitation, a power of attorney. The Trustee shall, upon
request of the Special Servicer and delivery to the Trustee of a trust receipt
signed by a Servicing Officer of the Special Servicer substantially in the form
of EXHIBIT A hereto, release or cause the release of the related Mortgage File
to the Special Servicer. Such trust receipt shall obligate the Special Servicer
to return the Mortgage File to the Trustee when the need therefor by the Special
Servicer no longer exists unless the Specially Serviced Mortgage Loan shall be
liquidated, in which case, upon receipt of a certificate of a Servicing Officer
similar to that hereinabove specified, the trust receipt shall be released by
the Trustee to the Special Servicer. After the transfer of servicing with
respect to any Specially Serviced Mortgage Loan to the Special Servicer pursuant
to this Agreement and the Servicing Agreement, the Servicer shall send written
notification of such transfer to the Mortgagor under such Specially Serviced
Mortgage Loan.
(c) The Special Servicer shall send notification in writing to
the Servicer to request any documents and instruments in the possession of the
Servicer related to any Specially Serviced Mortgage Loan, and the Servicer shall
respond to any such request within a reasonable period of time.
(d) The Special Servicer shall release to the Servicer all
documents and instruments in the possession of the Special Servicer related to
any Rehabilitated Mortgage Loan. Prior to the transfer of servicing of any
Rehabilitated Mortgage Loan to the Servicer pursuant to this Agreement and the
Servicing Agreement, the Special Servicer shall send written notification of
such transfer (the form and substance of which shall be reasonably satisfactory
to the Servicer) to the Mortgagor under such Rehabilitated Mortgage Loan.
Section 4.07 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION
OF THE SPECIAL SERVICER TO BE HELD FOR
TRUSTEE.
(a) The Special Servicer shall transmit to the Trustee such
documents and instruments coming into the possession of the Special Servicer as
from time to time are required by the terms hereof to be delivered to the
Trustee. Any funds received by the Special Servicer in respect of any Specially
Serviced Mortgage Loan or that otherwise are collected by the Special Servicer
as Net Liquidation Proceeds (other than Insurance Proceeds and Condemnation
Proceeds) in respect of such Specially Serviced Mortgage Loan shall be
transmitted to the Servicer within two Business Days of receipt. Insurance
Proceeds, Condemnation Proceeds and income with respect to an REO Property shall
be deposited in the related REO Account. The Special Servicer
<PAGE>
23
shall provide access to information and documentation regarding the Specially
Serviced Mortgage Loans and REO Properties to the Trustee, the Servicer, the
Fiscal Agent, the Operating Adviser, each of the Rating Agencies, Holders of the
Controlling Class and their respective agents and accountants at any time upon
reasonable request and during normal business hours. In fulfilling such a
request, the Special Servicer shall not be responsible for determining whether
such information is sufficient for the purposes of the party seeking such
information or on whose behalf such information is being sought.
(b) The Special Servicer hereby acknowledges that the Trust
owns the Specially Serviced Mortgage Loans and all Mortgage Files representing
such Specially Serviced Mortgage Loans and all funds now or hereafter held by,
or under the control of, the Special Servicer that are collected by the Special
Servicer in connection with the Specially Serviced Mortgage Loans, whether as
scheduled installments of principal and interest or as full or partial
prepayments of principal or interest or as Liquidation Proceeds, Condemnation
Proceeds or Insurance Proceeds or otherwise, and all proceeds of the foregoing
and proceeds of proceeds (but excluding any Special Servicing Compensation and
all other amounts to which the Special Servicer is entitled hereunder, and
excluding any Retained Yield); and the Special Servicer agrees that all
documents or instruments constituting part of the Mortgage Files, and such funds
relating to the Specially Serviced Mortgage Loans as come into the possession or
custody of, or which are subject to the control of, the Special Servicer, shall
be held by the Special Servicer for and on behalf of the Trust, as the Trustee's
agent (except for any Retained Yield which shall be held by the Special Servicer
in trust for and on behalf of the related Retained Yield Holder).
(c) The Special Servicer also agrees that it shall not create,
incur or subject any Specially Serviced Mortgage Loans, or any funds that are
required to be deposited in the Custodial Account or any REO Account or any
funds that otherwise are or may become due and payable to the Trust to any
claim, lien, security interest, judgment, levy, writ of attachment or other
encumbrance, and shall not assert by legal action or otherwise any claim or
right of setoff against any Specially Serviced Mortgage Loan or any funds,
collected on, or in connection with, a Specially Serviced Mortgage Loan.
(d) The Trustee shall promptly notify the Servicer and the
Special Servicer as to the sale or disposition of any Mortgage Loan from the
Trust and shall give such prior notice thereof as may be reasonably practicable.
Section 4.08 REPRESENTATIONS, WARRANTIES AND COVENANTS OF
THE SPECIAL SERVICER.
(a) The Special Servicer hereby represents and warrants to and
covenants with the Trustee, for the benefit of the Certificateholders, as of the
Closing Date, that:
(i) the Special Servicer is duly organized, validly
existing and in good standing as a limited partnership under
the laws of the State of Maryland, and is, and shall remain,
in compliance with the laws of each state in which any
Mortgaged Property relating to a Specially Serviced Mortgage
Loan or any REO Property is located to the extent necessary to
perform its obligations under the Transaction Documents;
<PAGE>
24
(ii) the Special Servicer has the full power and
authority to execute, deliver, perform, and to enter into and
consummate all transactions and obligations contemplated by,
each of the Transaction Documents. The Special Servicer's
execution, delivery and performance of each of the Transaction
Documents has been authorized by all requisite corporate
action. Each of the Transaction Documents evidences the valid
and binding obligation of the Special Servicer enforceable
against the Special Servicer in accordance with its terms
subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium and other
similar laws affecting creditors' rights generally as from
time to time in effect, and to general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law);
(iii) neither the execution and delivery of the
Transaction Documents, the consummation of the transactions
contemplated by the Transaction, nor the fulfillment of or
compliance with the terms and conditions of the Transaction
Documents will: (A) conflict with or result in a breach of any
of the terms, conditions or provisions of the Special
Servicer's organizational documents or any agreement or
instrument to which the Special Servicer is now a party or by
which it is bound, or constitute a default or result in an
acceleration under any of the foregoing, (B) result in the
violation of any law, rule, regulation, order, judgment or
decree to which the Special Servicer or its property is
subject that would materially and adversely affect the Special
Servicer's ability to perform its obligations under the
Transaction Documents or (C) result in the creation or
imposition of any lien, charge or encumbrance upon any of its
properties pursuant to the terms of any trust agreement,
indenture, mortgage, deed of trust, contract or other
instrument;
(iv) each officer, director, employee, consultant or
adviser of the Special Servicer with responsibilities
concerning the servicing and administration of Mortgage Loans
and/or REO Properties is covered by errors and omissions
insurance in the amounts and with the coverage required by
Section 4.02. Neither the Special Servicer nor any of its
officers, directors, employees, consultants or advisors
involved in the servicing or administration of Mortgage Loans
or management of the REO Properties has been refused such
coverage or insurance;
(v) the Special Servicer does not believe, and has no
reason to believe, that it cannot perform each and every
covenant and obligation on its part contained in the
Transaction Documents;
(vi) there is no action, suit, or proceeding pending
or, to the best of the Special Servicer's knowledge,
threatened against the Special Servicer that, either in any
one instance or in the aggregate, would draw into question the
validity of any of the Transaction Documents or of any action
taken or to be taken in connection with the obligations of the
Special Servicer under the Transaction Documents, or which
would be likely to impair materially the ability of the
Special Servicer to perform under the terms of any of the
Transaction Documents;
<PAGE>
25
(vii) the Special Servicer is not in default with
respect to any order or decree of any court or any order,
regulation or demand of any federal, state, municipal or other
governmental agency, which default would materially and
adversely affect its performance under the Transaction
Documents;
(viii) no consent, approval, authorization or order
of any court or governmental agency or body is required for
the execution, delivery and performance by the Special
Servicer of, or compliance by the Special Servicer with, the
terms of the Transaction Documents or the consummation of the
transactions contemplated by the Transaction Documents;
(ix) the Special Servicer has not filed for relief
under any bankruptcy or similar statute and is not insolvent
and does not expect to file for such relief or to become
insolvent;
(x) the consummation of the transactions contemplated
by the Transaction Documents are in the ordinary course of the
business of the Special Servicer; and
(xi) the Special Servicer holds all material
licenses, certificates and permits from all governmental
authorities necessary for conducting its business as it is
presently conducted. The Special Servicer is, and will take
all steps necessary to remain, subject to supervision and
examination by any state or federal authorities as may be
applicable and, to the extent necessary to perform its duties
under the Transaction Documents, will take all steps necessary
to be permitted to do business in each state in which the
Mortgaged Properties relating to Specially Serviced Mortgage
Loans and the REO Properties are located.
(b) It is understood that the representations and warranties
set forth in this Section 4.08 shall survive the execution and delivery of the
Transaction Documents. The Special Servicer shall indemnify the Depositor, the
Trustee, the Fiscal Agent, the Servicer, the Operating Adviser and the Trust and
hold each of them harmless against any and all losses, damages, penalties,
fines, forfeitures, legal fees and related costs, judgments, and other costs and
expenses resulting from any claim, demand, defense or assertion based on or
resulting from a breach of the Special Servicer's representations and warranties
contained in this Section 4.08. Such indemnification shall survive any
termination of the Special Servicer as special servicer under the Transaction
Documents, the resignation or termination of the Servicer, the Trustee and the
Fiscal Agent under the Transaction Documents and any termination of this
Agreement.
(c) Any cause of action against the Special Servicer arising
out of the breach of any representations and warranties made in this Section
4.08 shall accrue upon discovery of such breach by any of the Trustee, the
Servicer or the Special Servicer. The Special Servicer shall give prompt notice
to the Trustee, the Depositor, the Operating Adviser and the Servicer of any (i)
untruth or inaccuracy in any of the representations or warranties in this
Section 4.08 of which it becomes aware and (ii) the occurrence, or the failure
to occur, of any event that, with notice, the passage of time or both, would
cause any representation or warranty in this Section 4.08 to be untrue or
inaccurate in any respect.
<PAGE>
26
Section 4.09 STANDARD HAZARD AND FLOOD INSURANCE
POLICIES.
(a) For all REO Property, to the extent consistent with
Accepted Servicing Practices, the Special Servicer shall maintain with a
Qualified Insurer fire and casualty insurance with extended coverage in an
amount equal to the full replacement cost of the improvements of such REO
Property, with a deductible not to exceed a customary amount for the risk
insured. If, at any time, any REO Property is located in an area identified in
the Flood Hazard Boundary Map or Flood Insurance Rate Map issued by the Federal
Emergency Management Agency as having special flood hazards or it becomes
located in such an area by virtue of a remapping completed by such agency (and
flood insurance has been made available), the Special Servicer shall cause a
flood insurance policy to be maintained for such REO Property meeting the
requirements of the current guidelines of the Federal Insurance Administration
in an amount representing coverage not less than the maximum amount of insurance
coverage available under the National Flood Insurance Act of 1968, the Flood
Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of
1994, as amended. It is understood and agreed that the Special Servicer shall
cause to be maintained with respect to each REO Property all other insurance
coverage required by law and consistent with Accepted Servicing Practices,
including, without limitation, insurance relating to vandalism and malicious
mischief, business interruption, loss of rental value, business automobile
liability, liquor liability, personal and advertising liability, false arrest,
libel and slander, and earthquake insurance if required and in place as of the
date of origination of the related Mortgage Loan, as applicable. All policies
required hereunder shall name the Trustee on behalf of the Trust as loss payee
and shall be endorsed with a standard mortgagee clause. The cost of any such
insurance maintained with respect to an REO Property shall be paid, or
reimbursed to the Special Servicer, by a Servicing Advance of the Servicer
reimbursable pursuant to Section 2.02(a) of the Servicing Agreement.
(b) Pursuant to Section 2.01, any amounts collected by the
Special Servicer under any insurance policies maintained pursuant to this
Section 4.09 (other than amounts to be applied to the restoration or repair of
the REO Property in accordance with Accepted Servicing Practices) shall be
deposited into the applicable REO Account. In the event that the Special
Servicer shall obtain and maintain a blanket policy issued by a Qualified
Insurer insuring against hazard losses on all of the REO Properties, it shall
conclusively be deemed to have satisfied its obligation to maintain fire and
casualty insurance as set forth in Section 4.09(a), it being understood and
agreed that such policy may contain a deductible clause, in which case the
Special Servicer shall, in the event that there shall not have been maintained
on the related REO Property an insurance policy complying with the first
sentence of Section 4.09(a) and there shall have been a loss which would have
been covered by such a policy had it been maintained, be required to deposit
from its own funds into the applicable REO Account the amount not otherwise
payable under the blanket policy because of such deductible clause. The cost of
any such blanket policy shall be an expense of the Special Servicer and not of
the Trust, except that any incremental cost attributable to a particular REO
Property shall be paid, or reimbursed to the Special Servicer, by a Servicing
Advance of the Servicer reimbursable pursuant to Section 2.02(a) of the
Servicing Agreement.
<PAGE>
27
Section 4.10 PRESENTMENT OF CLAIMS AND COLLECTION OF
PROCEEDS.
The Special Servicer will prepare and present, or cause to be
prepared and presented, on behalf of the Trustee all claims under the Insurance
Policies with respect to each REO Property, and take such actions (including the
negotiation, settlement, compromise or enforcement of the insured's claim) as
shall be necessary to realize recovery under such policies. Any extraordinary
costs (but not ordinary, routine costs) of taking the actions required by the
preceding sentence shall be paid, or reimbursed to the Special Servicer, by a
Servicing Advance of the Servicer reimbursable pursuant to Section 2.02(a) of
the Servicing Agreement. Any proceeds disbursed to the Special Servicer in
respect of such policies shall be promptly remitted to the applicable REO
Account, upon receipt, except for any amounts realized that are to be applied to
the repair or restoration of the applicable REO Property in accordance with
Accepted Servicing Practices.
Section 4.11 COMPENSATION TO THE SPECIAL SERVICER.
(a) As compensation (the "SPECIAL SERVICING COMPENSATION") for
the performance of its obligations under the Transaction Documents, the Special
Servicer shall be entitled to the following fees payable from the Custodial
Account as provided in Section 2.02(a) of the Servicing Agreement:
(i) as to each Due Period, an administration fee (the
"SPECIAL SERVICING BASIC FEE") equal to one month's interest
(calculated on the basis of a 360-day year consisting of
twelve 30-day months) at 0.05% per annum accrued on the
Scheduled Principal Balance of each Mortgage Loan and REO Loan
as of the first day of such Due Period;
(ii) as to each Due Period, an additional
administration fee (the "SPECIAL SERVICING SUPPLEMENTAL FEE")
equal to the excess, if any of (A) one month's interest
(calculated on the basis of a 360-day year consisting of
twelve 30-day months) at 0.25% per annum accrued on the
aggregate Scheduled Principal Balance of each Specially
Serviced Mortgage Loan and REO Loan as of the first day of
such Due Period, over (B) the aggregate Special Servicing
Basic Fee applicable to entire Mortgage Pool for such Due
Period (such Special Servicing Supplemental Fee for any Due
Period to be allocated among all the Specially Serviced
Mortgage Loans and REO Loans, PRO RATA in accordance with
their respective Scheduled Principal Balances outstanding as
of the commencement of such Due Period); and
(iii) all Modification Fees and Assumptions Fees
collected with respect to all Mortgage Loans.
(b) The Special Servicer shall be entitled to cause the
Servicer to withdraw from the Custodial Account and pay to the Special Servicer
the Special Servicing Compensation in respect of each Mortgage Loan and REO
Property at such time and in such manner as is set forth in Section 2.02(a) of
the Servicing Agreement. The Special Servicer shall be required to pay all
expenses incurred by it in connection with its servicing activities under the
Transaction
<PAGE>
28
Documents and shall not be entitled to reimbursement therefor except as
expressly provided in this Agreement.
(c) The Special Servicer shall not be entitled to receive any
Default Interest or late payment charges or similar items. Such amounts
collected by the Special Servicer shall be transferred by the Special Servicer
to the Servicer within two Business Days of receipt thereof for deposit into the
Custodial Account.
Section 4.12 REALIZATION UPON DEFAULTED MORTGAGE LOANS.
(a) The Special Servicer, in accordance with Accepted
Servicing Practices, and subject to any rights the Operating Adviser may have
pursuant to Section 5.10 of the Trust Agreement to approve or direct the Special
Servicer's actions in such regard, shall use reasonable efforts to foreclose
upon or otherwise comparably convert the ownership of Mortgaged Properties
securing any Specially Serviced Mortgage Loans that come into and continue in
default and as to which no satisfactory arrangements can be made for collection
of delinquent payments thereon. The expenses of such foreclosure or other
conversion of ownership shall be paid, or reimbursed to the Special Servicer, by
a Servicing Advance of the Servicer recoverable pursuant to Section 2.02(a) of
the Servicing Agreement.
(b) The Special Servicer shall not acquire any personal
property relating to any Specially Serviced Mortgage Loan pursuant to this
Section 4.12 unless either:
(1) such personal property is incidental to real
property (within the meaning of Section 856(e)(1) of the Code)
so acquired by the Special Servicer; or
(2) the Special Servicer shall have received an
Opinion of Counsel to the effect that the holding of such
personal property as part of the Trust Fund will not cause the
imposition of a tax on any of REMIC I, REMIC II or REMIC III
under the REMIC Provisions or cause any of REMIC I, REMIC II
or REMIC III to fail to qualify as a REMIC at any time that
any Certificate is outstanding. The cost of such Opinion of
Counsel shall be paid, or reimbursed to the Special Servicer,
by a Servicing Advance of the Servicer recoverable pursuant to
Section 2.02(a) of the Servicing Agreement.
(c) Notwithstanding any other provision of this Agreement, the
Special Servicer shall not, on behalf of the Trustee, obtain title to a
Mortgaged Property as a result of or in lieu of foreclosure or otherwise, and
shall not otherwise acquire possession of, or take any other action with respect
to, any Mortgaged Property, if, as a result of any such action, the Trustee
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 applicable comparable federal, state or local law, or a
"discharger" or "responsible party" thereunder, unless the Special Servicer has
previously determined in accordance with Accepted Servicing Practices, based on
an environmental site assessment which was conducted by a Person (who may be an
employee of the Servicer or the Special Servicer or of an Affiliate of either)
who regularly conducts such assessments and which was performed in accordance
with the standards of FNMA,
<PAGE>
29
in the case of Specially Serviced Mortgage Loans that are multifamily mortgage
loans, and Accepted Servicing Practices, in the case of Specially Serviced
Mortgage Loans that are commercial mortgage loans, for environmental
assessments, that:
(i) such Mortgaged Property is in compliance with
applicable Environmental Laws or, if not, that acquiring such
Mortgaged Property and taking such actions as are necessary to
bring the Mortgaged Property in compliance therewith is
reasonably likely to produce a greater recovery of Net
Collections on a net present value basis (the relevant
discounting to be performed at the related Net Mortgage Rate)
than not acquiring such Mortgaged Property and not taking such
actions and, subject to Section 5.10(c) of the Trust
Agreement, the Special Servicer has obtained the approval or
deemed approval of the Operating Adviser to taking such
actions; and
(ii) there are no circumstances or conditions present
or threatened at such Mortgaged Property relating to the use,
management, disposal or release of any hazardous substances,
hazardous materials, hazardous wastes, or petroleumbased
materials for which investigation, testing, monitoring,
removal, clean-up or remediation could be required under any
federal, state or local law or regulation or, if any such
circumstances or conditions are present for which any such
actions could be required, that acquiring such Mortgaged
Property and taking such actions with respect to the affected
Mortgaged Property is reasonably likely to produce a greater
recovery of Net Collections on a present value basis (the
relevant discounting to be performed at the related Net
Mortgage Rate) than not acquiring such Mortgaged Property and
not taking such actions and, subject to Section 5.10(c) of the
Trust Agreement, the Special Servicer has obtained the
approval or deemed approval of the Operating Adviser to taking
such actions.
The Special Servicer shall deliver to the Trustee an
Officer's Certificate setting forth the justification for each of the
determinations made by the Special Servicer pursuant to this Section 4.12(c).
The cost of any such compliance or other remedial action contemplated by clauses
(i) and/or (ii) above, shall be paid, or reimbursed to the Special Servicer, by
a Servicing Advance of the Servicer recoverable pursuant to Section 2.02(a) of
the Servicing Agreement; provided that such compliance or other remedial action
contemplated by clauses (i) and/or (ii) above shall only be permitted if no
portion of the Servicing Advance that would be required to be made to cover the
cost thereof is determined to be a Nonrecoverable Advance.
(d) If the environmental assessment contemplated by Section
4.12(c) is prepared by a Person other than an employee of the Special Servicer,
the cost thereof may be treated as a Liquidation Expense, or, in the event the
related Specially Serviced Mortgage Loan or any related REO Property is not
liquidated within four months following such environmental assessment or a Final
Recovery Determination is made with respect to such Specially Serviced Mortgage
or the related Mortgagor cures all defaults thereunder, shall be paid, or
reimbursed to the Special Servicer, by a Servicing Advance of the Servicer
recoverable pursuant to Section 2.02(a) of the Servicing Agreement. However, the
Special Servicer shall use its reasonable efforts to recover such cost from the
Mortgagor in connection with any curing of the default under the Specially
Serviced Mortgage Loan.
<PAGE>
30
(e) If the Special Servicer determines, pursuant to Section
4.12(c), that acquiring any Mortgaged Property and taking such actions as are
necessary to bring such Mortgaged Property into compliance with applicable
Environmental Laws, or taking such actions with respect to the containment,
removal, cleanup or remediation of hazardous substances, hazardous materials,
hazardous wastes, or petroleum-based materials affecting such Mortgaged
Property, is not reasonably likely to produce a greater recovery of Net
Collections on a present value basis than not acquiring such Mortgaged Property
and not taking such actions, or if (subject to Section 5.10(c) of the Trust
Agreement) the Operating Adviser objects to effecting such compliance or taking
such actions, then the Special Servicer shall take such action as it deems to be
in the best economic interests of the Certificateholders (taken as a whole),
including, without limitation, releasing the lien of the related Mortgage.
(f) The Special Servicer may maintain any action with respect
to any Specially Serviced Mortgage Loan, including, without limitation, any
action to obtain a deficiency judgment with respect to any Specially Serviced
Mortgage Loan, if it determines that such action is likely to produce a greater
recovery of Net Collections on a net present value basis (the relevant
discounting to be performed at the related Net Mortgage Rate) than not taking
such action.
Section 4.13 FORECLOSURE.
In the event that the Trust obtains, through foreclosure of a
Mortgage or otherwise, the right to receive title to a Mortgaged Property, the
Special Servicer, as its agent, shall direct the appropriate party to deliver
title to the REO Property to the Trustee or its nominee. The Special Servicer
shall consult with counsel to determine when an Acquisition Date shall be deemed
to occur under the REMIC Provisions with respect to the Mortgaged Property. The
expense of such consultation shall be paid, or reimbursed to the Special
Servicer, by a Servicing Advance recoverable by the Servicer pursuant to Section
2.02(a) of the Servicing Agreement.
The Special Servicer, on behalf of the Trust, shall sell the
REO Property in accordance with Section 5.07 of the Trust Agreement within the
time period and, subject to the conditions, set forth in Section 4.15. Subject
to Section 4.15, the Special Servicer shall manage, conserve, protect and
operate the REO Property for the benefit of the Certificateholders solely for
the purpose of its prompt disposition and sale.
Section 4.14 OPERATION OF REO PROPERTY.
(a) The Special Servicer shall segregate and hold all funds
collected and received in connection with the operation of each REO Property
separate and apart from its own funds and general assets and shall establish and
maintain with respect to each REO Property an account held in trust for the
benefit of the Certificateholders in the name of "LaSalle National Bank, as
Trustee for the Holders of LB Commercial Conduit Mortgage Trust II, Multiclass
PassThrough Certificates, Series 1996-C2 - [name of REO Property] (each, an "REO
ACCOUNT"), which shall be an Eligible Account. The Special Servicer shall
deposit all funds received as income and, to the extent not applied to the
restoration or repair of the property, as Insurance Proceeds or Condemnation
Proceeds with respect to an REO Property in the applicable REO Account within
two Business Days of receipt. The Special Servicer shall account separately for
funds received or expended with respect to each REO Property. All funds in each
REO Account
<PAGE>
31
shall be invested only in Eligible Investments in the same manner as funds in
the Custodial Account. The Special Servicer shall notify the Trustee and the
Servicer in writing of the location and account number of each REO Account and
shall notify the Trustee and Servicer prior to any subsequent change thereof.
(b) On or before each Special Servicer Remittance Date, the
Special Servicer shall withdraw from each REO Account and deposit in the
Custodial Account, all Net REO Income, Insurance Proceeds and/or Condemnation
Proceeds on deposit in such REO Account that were received or collected on or
with respect to the related REO Property during the most recently ended
Collection Period, together with any reinvestment income thereon. However, the
Special Servicer may retain in such REO Account such portion of such proceeds
and collections as may be necessary to maintain in the REO Account sufficient
funds for the proper operation, management and maintenance of the related REO
Property, including, without limitation, the creation of reasonable reserves
covering a period not to exceed 12 months for repairs, replacements, and
necessary capital improvements and other related expenses. The Special Servicer
shall notify the Servicer of all deposits into the Custodial Account (and the
REO Properties to which the deposits relate).
(c) Prior to the acquisition of title to a Mortgaged Property,
the Special Servicer shall review the operation of such Mortgaged Property and
determine the nature of the income that would be derived from such property if
it were acquired by the Trust. If the Special Servicer determines from such
review that:
(i) None of the income from Directly Operating such
Mortgaged Property would be subject to tax as "net income from
foreclosure property" within the meaning of the REMIC
Provisions or would be subject to the tax imposed on
"prohibited transactions" under Section 860F of the Code
(either such tax referred to herein as an "REO TAX"), such
Mortgaged Property may be Directly Operated by the Special
Servicer as REO Property;
(ii) Directly Operating such Mortgaged Property as an
REO Property could result in income from such property that
would be subject to an REO Tax, but that a lease of such
property to another party to operate such property, or the
performance of some services by an Independent Contractor with
respect to such property, or another method of operating such
property would not result in income subject to an REO Tax,
then the Special Servicer may (provided that in the good faith
and reasonable judgment of the Special Servicer, it is
commercially feasible) acquire such Mortgaged Property as REO
Property and so lease or operate such REO Property; or
(iii) It is reasonable to believe that Directly
Operating such property as REO Property could result in income
subject to an REO Tax and that no reasonable and commercially
feasible means exists to operate such property as REO Property
without the Trust incurring or possibly incurring an REO Tax
on income from such property, the Special Servicer shall give
written notice to the Trustee summarizing a proposed plan (the
"PROPOSED PLAN") to manage such property as REO Property. Such
notice shall include potential sources of income,
<PAGE>
32
and to the extent reasonably feasible, estimates of the amount
of income from each such source. Within a reasonable period of
time after receipt of such notice, the Trustee shall consult
with the Special Servicer and shall advise the Special
Servicer of the Trustee'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 Trustee shall (to the extent feasible) advise the Special
Servicer of the estimated amount of taxes that the Trust would
be required to pay with respect to each such source of income.
After receiving the information described in the two preceding
sentences from the Trustee, 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 (taken as a whole) by maximizing (to the extent
commercially feasible) the net after-tax income received by the Trust with
respect to such property 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 the respective Mortgaged
Property. Both the Special Servicer and the Trustee may consult with counsel at
the expense of the Trust in connection with determinations required under this
Section 4.14(c). Neither the Special Servicer nor the Trustee shall be liable to
the Certificateholders, the Trust, the Trustee, the Servicer or each other for
errors in judgment made in good faith in the exercise of their discretion while
performing their respective responsibilities under this Section 4.14(c). Nothing
in this Section 4.14(c) is intended to prevent the sale of an REO Property
pursuant to the terms and subject to the conditions of Section 5.07 of the Trust
Agreement or Section 4.15 hereof.
(d) 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 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
result in the receipt by REMIC I, REMIC II or REMIC III of any "income from
non-permitted assets" within the meaning of Section 860F(a)(2)(B) of the Code
(except to the extent permitted by Section 4.14(c) above) or result in an
Adverse REMIC Event. Except as provided in Section 4.14(c), the Special Servicer
shall not enter into any lease, contract or other agreement that causes REMIC I
to receive, and (unless required to do so under any lease, contract or agreement
to which the Special Servicer or the Trust may become a party or successor to a
party due to a foreclosure, deed-in-lieu of foreclosure or other similar
exercise of a creditor's rights or remedies with respect to a Mortgage Loan)
shall not cause or allow REMIC I to receive, any "net income from foreclosure
property" that is subject to taxation under the REMIC Provisions.
(e) If the Trust acquires a Mortgaged Property, the Special
Servicer shall have full power and authority, in consultation with the Operating
Adviser, and subject to the specific requirements and prohibitions of the
Transaction Documents and the REMIC Provisions to do any and all things in
connection therewith as are consistent with Accepted Servicing Practices, and
<PAGE>
33
in such manner as the Special Servicer deems to be in the best interests of the
Certificateholders (taken as a whole); and, consistent with the foregoing, the
Special Servicer shall advance amounts sufficient to cover the following items
from its own funds (which amounts shall be reimbursed to it by Servicing
Advances of the Servicer recoverable pursuant to Section 2.02(a) of the
Servicing Agreement), to the extent such items cannot be paid from related
Operating Income:
(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 could result or have resulted in the
imposition of a lien thereon; and
(iii) all costs and expenses necessary to maintain,
manage, operate, lease and sell such REO Property (other than
capital expenditures);
if, but only if, in the Special Servicer's reasonable judgment, such amounts
will be recoverable from (i) proceeds received in respect of such REO Property
prior to the final liquidation of such REO Property or (ii) Liquidation
Proceeds; provided that notwithstanding the other provisions of this Agreement,
the Special Servicer may, in its sole discretion pay any such amount even if it
is not recoverable from the operation or sale of such REO Property if (A) in the
good faith judgment of the Special Servicer, it is in the best interests of the
Certificateholders (taken as a whole) or (B) it is a necessary fee or expense
incurred in connection with the defense or prosecution of legal proceedings (and
any such expenditure shall be reimbursed by a Servicing Advance reimbursable to
the Servicer pursuant to Section 2.02(a) of the Servicing Agreement, except that
if any required Servicing Advance relating to such expenditure has been
determined to be a Nonrecoverable Advance prior to such expenditure, then such
expenditure, if made, shall be reimbursed as an expense of the Trust pursuant to
such Section 2.02(a)).
(f) The Special Servicer may contract with any Independent
Contractor for the operation and management of the REO Property, subject to the
following conditions:
(i) the terms and conditions of any such contract
shall not be inconsistent with the Transaction Documents;
(ii) any such contract shall require, or shall be
administered to require, that the Independent Contractor in a
timely manner (A) pay all costs and expenses incurred in
connection with the operation and management of such REO
Property and (B) deposit on a daily basis all operating income
in an Eligible Account;
(iii) none of the provisions of this Section 4.14
relating to any such contract or to actions taken through any
such Independent Contractor shall, or shall be deemed to,
relieve the Special Servicer of any of its duties and
obligations with respect to the operation and management of
any such REO Property;
(iv) if the Independent Contractor is an Affiliate of
the Special Servicer, the consent of the Operating Adviser
shall have been obtained prior to contracting with such
Independent Contractor; and
<PAGE>
34
(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 the Trust
pursuant to this Section 4.14(d) for indemnification of the Special Servicer by
such Independent Contractor, and nothing in the Transaction Documents shall be
deemed to limit or modify such indemnification. All reasonable fees of the
Independent Contractor not otherwise payable out of operating income from the
REO Property, shall be paid, or reimbursed to the Special Servicer, by a
Servicing Advance of the Servicer reimbursable pursuant to Section 2.02(a) of
the Servicing Agreement.
Section 4.15 SALE OF REO PROPERTY.
(a) In the event that title to any REO Property is acquired by
the Trust in respect of any Specially Serviced Mortgage Loan, the deed or
certificate of sale shall be issued to the Trust, the Trustee or to their
respective nominees. The Special Servicer, after consultation with the Operating
Adviser, shall in accordance with Section 5.07 of the Trust Agreement use its
reasonable best efforts to sell any REO Property within two years of its
acquisition by REMIC I, unless (i) the Trustee, on behalf of REMIC I, has been
granted an extension of time (an "EXTENSION") by the Internal Revenue Service to
sell such REO Property, in which case the Special Servicer shall continue to
attempt to sell the REO Property for its fair market value for such period
longer than two years as such Extension permits or (ii) the Special Servicer
seeks and subsequently receives, at the expense of the Trust payable pursuant to
Section 2.02(a) of the Servicing Agreement, an Opinion of Counsel, addressed to
the Trustee and the Special Servicer, to the effect that the holding by the
Trust of such REO Property subsequent to two years after its acquisition will
not result in the imposition of taxes on "prohibited transactions" (as defined
in Section 860F of the Code) of any of REMIC I, REMIC II or REMIC III or cause
any of REMIC I, REMIC II or REMIC III to fail to qualify as a REMIC at any time
that any Certificates are outstanding. If the Trustee has not received an
Extension or such Opinion of Counsel and the Special Servicer is not able to
sell such REO Property within such two year period, or if an Extension has been
granted and the Special Servicer is unable to sell such REO Property within the
extended time period, the Special Servicer shall, after consultation with the
Operating Adviser, before the end of such two year period or extended period, as
the case may be, auction the REO Property to the highest bidder (which may be
the Special Servicer) in accordance with Accepted Servicing Practices. The
Special Servicer shall either itself or through an agent selected by the Special
Servicer protect and conserve such REO Property in the same manner and to such
extent as it customarily does in connection with its own real estate acquired
through foreclosure or by deed-in-lieu of foreclosure, incident to its
conservation and protection of the interests of the Certificateholders.
(b) Within thirty days after the sale of the REO Property, the
Special Servicer shall provide to the Trust a statement of accounting for such
REO Property, including, without limitation: (i) the Acquisition Date for the
REO Property, (ii) the date of disposition of the REO Property, (iii) the gross
sales price and related selling and other expenses, (iv) accrued interest
(including interest deemed to have accrued) on the REO Loan to which the REO
Property related,
<PAGE>
35
calculated from the Acquisition Date to the disposition date, and (v) such other
information as the Trustee may reasonably request.
(c) The Net Liquidation Proceeds from the final disposition of
an REO Property shall be deposited in the Custodial Account within two Business
Days of receipt.
(d) The Special Servicer shall prepare and file the reports of
foreclosures and abandonments of any Mortgaged Property and the information
returns relating to cancellation of indebtedness income with respect to any
Mortgaged Property required by Sections 6050J and 6050P of the Code and deliver
to the Trustee an Officer's Certificate stating that such reports have been
filed. Such reports shall be in form and substance sufficient to meet the
reporting requirements imposed by Sections 6050J and 6050P of the Code.
Section 4.16 REALIZATION ON COLLATERAL SECURITY.
In connection with the enforcement of the rights of the Trust
with any of the property securing any Specially Serviced Mortgage Loan other
than the related Mortgaged Property, the Special Servicer and the Trustee shall
consult with counsel to determine how best to enforce such rights in a manner
consistent with the REMIC Provisions and shall not take any action that could
result in the failure of any of REMIC I, REMIC II or REMIC III, to fail to
qualify as a REMIC at any time that any Certificates are outstanding, unless
such action has been approved by a vote of 100% of each Class of
Certificateholders (including, without limitation, all Classes of the Residual
Certificateholders). In determining whether any action could result in the
failure of any of REMIC I, REMIC II or REMIC III to so qualify as a REMIC, the
Special Servicer and Trustee shall obtain a Nondisqualification Opinion
addressed to them (the cost of which shall be paid for by a Servicing Advance of
the Servicer recoverable pursuant to Section 2.02(a) of the Servicing
Agreement).
Section 4.17 SALE OF DEFAULTED MORTGAGE LOANS.
Subject to, and in accordance with the provisions of, Sections
5.06 and 5.07 of the Trust Agreement, upon the occurrence of a payment default
or other material default under any Mortgage Loan, the Special Servicer may, in
lieu of exercising remedies pursuant to the terms of the related Mortgage Note
and Mortgage, sell such Mortgage Loan for cash if it deems such sale to be in
the best interest of the Certificateholders (taken as a whole). Any such sale
shall be on a cash basis only. Following receipt by the Special Servicer of the
sale proceeds and transmittal thereof to the Servicer, the Trustee shall, upon
written instructions from a Servicing Officer of the Special Servicer, release,
or cause the release of, the Mortgage File pertaining to the sold Mortgage Loan
to the purchaser. The purchase price, net of related expenses, shall be
transmitted to the Servicer as Net Liquidation Proceeds to be deposited into the
Custodial Account.
<PAGE>
36
Section 4.18 ANNUAL OFFICER'S CERTIFICATE AS TO
COMPLIANCE.
The Special Servicer shall deliver to the Trustee, the
Depositor, the Servicer and each Rating Agency on or before March 15 of each
year, commencing with March 15, 1997, an Officer's Certificate certifying that,
with respect to the preceding calendar year: (i) the Servicing Officer signing
such Officer's Certificate has reviewed the activities of the Special Servicer
during the preceding calendar year or portion thereof and its performance under
the Transaction Documents; and (ii) to the best of such Servicing Officer's
knowledge, based on such review, the Special Servicer has performed and
fulfilled its duties, responsibilities and obligations under the Transaction
Documents in all material respects throughout such year, or, if there has been a
default in the fulfillment of any such duties, responsibilities or obligations,
specifying each such default known to such Servicing Officer and the nature and
status thereof.
Section 4.19 ANNUAL INDEPENDENT ACCOUNTANTS' SERVICING
REPORT.
On or before March 15 of each year, beginning March 15,
1997, the Special Servicer at its expense shall cause a firm of independent
public accountants (which may also render other services to the Special
Servicer) with at least 250 professionals and that is a member of the American
Institute of Certified Public Accountants to furnish a statement to the Trustee,
the Depositor, the Servicer and each Rating Agency to the effect that (i) it has
obtained a letter of representation regarding certain matters from the
management of the Special Servicer which includes an assertion that the Special
Servicer 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 (ii) on the basis of an examination conducted by such firm in
accordance with standards established 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.
Section 4.20 MERGER OR CONSOLIDATION.
Any Person into which the Special Servicer may be merged or
consolidated, or any Person resulting from any merger, conversion, other change
in form or consolidation to which the Special Servicer shall be a party, or any
Person succeeding to the business of the Special Servicer, shall be the
successor to the Special Servicer under the Transaction Documents, without the
execution or filing of any paper or any further act on the part of any of the
parties to any Transaction Document, anything herein to the contrary
notwithstanding; provided that (i) such successor or resulting Person shall be
satisfactory to the Trustee, (ii) such successor or resulting Person shall
execute and deliver to the Trustee an agreement, in form and substance
satisfactory to the Trustee, which contains an assumption by such Person of the
due and punctual performance and observance of each covenant and condition to be
performed or observed by the Special
<PAGE>
37
Servicer under the Transaction Documents from and after the date of such
agreement; (iii) the Rating Agencies shall be given prior written notice of the
identity of the proposed successor or resulting Person and the Rating Agencies
shall have confirmed in writing that the ratings on the Certificates will not be
qualified, downgraded or withdrawn by reason thereof; and (iv) the Special
Servicer shall deliver to the Trustee an Officer's Certificate and an Opinion of
Counsel acceptable to the Trustee (the cost of such opinion to be an expense of
the Special Servicer and not of the Trust) stating that conditions (i) through
(iv) have been complied with and the succession complies with the terms of the
Transaction Documents. If such conditions are not complied with, the Trustee may
terminate the Special Servicer's servicing and administration of the Specially
Serviced Mortgage Loans and REO Properties under the Transaction Documents, such
termination to be effected in the manner set forth in Section 3.02.
Section 4.21 RESIGNATION OF THE SPECIAL SERVICER.
(a) Except as otherwise provided in Section 4.21(b), the
Special Servicer shall not resign from the obligations and duties imposed on it
under the Transaction Documents unless it determines that the Special Servicer's
duties under the Transaction Documents are no longer permissible under
applicable law. Any such determination permitting the resignation of the Special
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to
the Servicer, the Operating Adviser and the Trustee. No such resignation shall
become effective until (i) a successor special servicer designated by the
Operating Adviser and the Trustee shall have assumed the Special Servicer's
responsibilities and obligations under the Transaction Documents, and (ii) each
of the Rating Agencies shall have confirmed in writing that such designation
shall not result in a qualification, downgrade or withdrawal of any rating of
any of the Certificates then rated. Notice of such resignation shall be given
promptly by the Special Servicer to the Servicer and the Trustee.
(b) The Special Servicer may resign from the obligations and
duties imposed on it under the Transaction Documents at any time on or after
October 31, 1997, upon reasonable notice to the Trustee, provided that (i) a
successor servicer is (A) available, (B) reasonably acceptable to the Operating
Adviser, the Depositor, and the Trustee and (C) willing to assume the
obligations, responsibilities and covenants to be performed under the
Transaction Documents by the Special Servicer on substantially the same terms
and conditions, and for not more than equivalent compensation, as herein
provided, and (ii) the Rating Agencies shall have confirmed in writing that such
resignation and designation of a successor servicer shall not result in a
qualification, downgrade or withdrawal of any rating of any of the Certificates
then rated. Any costs of such resignation and of obtaining a replacement Special
Servicer shall be borne by the Special Servicer and shall not be an expense of
the Trust. No such resignation shall become effective unless and until such
successor special servicer enters into an agreement with the Trustee, in form
reasonably satisfactory to the Trustee, assuming the obligations and
responsibilities of the Special Servicer under the Transaction Documents.
<PAGE>
38
Section 4.22 ASSIGNMENT OR DELEGATION OF DUTIES BY THE
SPECIAL SERVICER.
Except as expressly provided herein, the Special Servicer
shall not assign or transfer any of its rights, benefits or privileges under the
Transaction Documents as special servicer 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 the Special Servicer under
the Transaction Documents; provided, however, the Special Servicer may
subcontract to a third party any site inspections required to be performed by it
under the Transaction Documents (and it will be responsible for the acts and
omissions of such third party in such regard).
Section 4.23 LIMITATION ON LIABILITY OF THE SPECIAL
SERVICER AND OTHERS.
Neither the Special Servicer nor any of the directors,
officers, employees or agents of the Special Servicer shall be under any
liability to the Certificateholders, the Depositor or the Trustee for any action
taken or for refraining from the taking of any action in good faith pursuant to
the Transaction Documents, or for errors in judgment; provided that this
provision shall not protect the Special Servicer or any such person against any
breach of a representation, warranty or covenant contained herein or any
liability which would otherwise be imposed by reason of willful misfeasance, bad
faith or negligence in its performance of duties or by reason of reckless
disregard for its obligations and duties under the Transaction Documents. The
Special Servicer and any director, officer, employee or agent of the Special
Servicer may rely in good faith on any document of any kind PRIMA FACIE properly
executed and submitted by any Person respecting any matters arising under the
Transaction Documents. The Special Servicer shall not be under any obligation to
appear in, prosecute or defend any legal action which is not incidental to its
duties to service the Specially Serviced Mortgage Loans in accordance with the
Transaction Documents; provided that the Special Servicer in its sole discretion
may undertake any such action which it may reasonably deem necessary or
desirable in order to protect the interests of the Certificateholders and the
Trustee in the Specially Serviced Mortgage Loans and the REO Properties, and
shall undertake any such action if instructed to do so by the Depositor or
Trustee. All legal expenses and costs of such action shall be expenses and costs
of the Trust reimbursable to the Special Servicer pursuant to Section 2.02(a) of
the Servicing Agreement.
Section 4.24 INDEMNIFICATION; THIRD PARTY CLAIMS.
(a) The Special Servicer and any director, officer, employee
or agent of the Special Servicer shall be indemnified and held harmless by the
Trust out of the Custodial Account against any and all claims, losses,
penalties, fines, forfeitures, legal fees and related costs, judgments and any
other costs, liabilities, fees and expenses incurred in connection with any
legal action relating to (i) the Transaction Documents (unless such legal action
is incidental to the performance of its obligations and duties thereunder, in
which case such expenses on such items will be reimbursable to the Special
Servicer only as and to the extent otherwise provided therein) and (ii) any
action taken by the Special Servicer in accordance with instructions delivered
in writing to the Special Servicer by the Trustee pursuant to any provision of
the Transaction Documents, in each case, other than any loss, liability or
expense incurred by reason of the Special Servicer's breach of any
representation, warranty or covenant in any of the Transaction Documents, the
Special Servicer's willful misfeasance, bad faith or negligence in the
performance
<PAGE>
39
of duties under the Transaction Documents or by reason of reckless disregard of
obligations and duties under the Transaction Documents. The Special Servicer
shall immediately notify the Trustee if a claim is made by a third party with
respect to the Transaction Documents or the Specially Serviced Mortgage Loans
entitling the Special Servicer to indemnification hereunder, whereupon the
Trustee on behalf of the Trust shall assume the defense of any such claim (with
counsel reasonably satisfactory to the Special Servicer) and, subject to
Sections 7.11 and 7.12 of the Trust Agreement and the first sentence of Section
4.24(b) below, pay all expenses in connection therewith, including counsel fees,
and promptly pay, discharge and satisfy any judgment or decree that may be
entered against it or them in respect of such claim. Any failure to so notify
the Trustee shall not affect any rights the Special Servicer may have to
indemnification under this Agreement or otherwise, unless the Trust is
materially prejudiced thereby. The indemnification provided for in this Section
4.24(a) shall survive the termination of any of the Transaction Documents and
the termination or resignation of any of the Trustee, the Fiscal Agent, the
Servicer and the Special Servicer under any of the Transaction Documents.
(b) The Special Servicer agrees to indemnify the Trustee, the
Fiscal Agent, the Servicer and any director, officer, employee or agent of any
of them and the Trust, and hold each of them harmless from and against any and
all claims, losses, penalties, fines, forfeitures, legal fees and related costs,
judgments, and any other costs, liabilities, fees and expenses that any of them
may sustain arising from or as a result of any breach of any covenant in the
Transaction Documents by the Special Servicer or the willful misfeasance, bad
faith or negligence in the performance of duties under the Transaction Documents
or by reason of reckless disregard of obligations and duties under the
Transaction Documents by the Special Servicer or by reason of the Special
Servicer's improper use of a power of attorney furnished by the Trustee pursuant
to Section 4.04(a) or 4.06(b). The Trustee, the Fiscal Agent or the Servicer, as
the case may be, shall immediately notify the Special Servicer if a claim is
made by a third party with respect to the Transaction Documents or the Specially
Serviced Mortgage Loans entitling it (or, in the case of the Trustee, itself or
the Trust) to indemnification hereunder, whereupon the Special Servicer shall
assume the defense of any such claim (with counsel reasonably satisfactory to
the Trustee, the Fiscal Agent or the Servicer, as the case may be) and pay all
expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it or
them in respect of such claim. Any failure to so notify the Special Servicer
shall not affect any rights the Trust or the Trustee, the Fiscal Agent or the
Servicer, as the case may be, may have to indemnification under this Agreement
or otherwise, unless the Special Servicer's defense of such claim is materially
prejudiced thereby. The indemnification provided for in this Section 4.24(b)
shall survive the termination of any of the Transaction Documents and the
termination or resignation of any of the Trustee, the Fiscal Agent, the Servicer
and the Special Servicer under any of the Transaction Documents.
(c) The Depositor shall indemnify and hold harmless the
Special Servicer and each director and officer of the Special Servicer, and each
Person, if any, who controls the Special Servicer within the meaning of the 1933
Act from and against any loss, claim, damage or liability, joint or several, and
any action in respect thereof, to which the Special Servicer or such director,
officer or controlling person may become subject under the 1933 Act, insofar as
such loss, claim, damage, liability or action arises out of, or is based upon,
any untrue statement or alleged untrue statement of a material fact contained in
the registration statement for the registration of the Registered Certificates
under the 1933 Act as originally filed or any
<PAGE>
40
amendment thereof (collectively, for purposes of this Section 4.24, the
"REGISTRATION STATEMENT"), or in the 1996-C2 Prospectus and 1996-C2 PPM
(collectively, for purposes of this Section 4.24, the "DISCLOSURE DOCUMENTS"),
or arises out of, or is based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein (in the case of a Disclosure Document, in light of the
circumstances under which they were made) not misleading and shall reimburse the
Special Servicer for any legal and other expenses reasonably incurred by the
Special Servicer or any such director, officer or controlling person in
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action; provided that the Depositor shall not be liable in
any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement or
the Disclosure Documents in reliance upon and in conformity with written
information concerning the Special Servicer furnished to the Depositor by or on
behalf of the Special Servicer specifically for inclusion therein. The Special
Servicer shall immediately notify the Depositor if a claim is made by a third
party entitling the Special Servicer to indemnification under this Section
4.24(c), whereupon the Depositor shall assume the defense of any such claim
(with counsel reasonably satisfactory to the Special Servicer) and pay all
expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it or
them in respect of such claim. Any failure to so notify the Depositor shall not
affect any rights the Special Servicer may have to indemnification under this
Section 4.24(c), unless the Depositor is materially prejudiced thereby. The
indemnification provided for in this Section 4.24(c) shall survive the
termination of any of the Transaction Documents and the termination or
resignation of any of the Trustee, the Fiscal Agent, the Servicer and the
Special Servicer under any of the Transaction Documents.
(d) The Special Servicer shall indemnify and hold harmless the
Depositor, each director and officer of the Depositor and each Person, if any,
who controls the Depositor within the meaning of the 1933 Act from and against
any loss, claim, damage or liability, joint or several, or any action in respect
thereof, to which the Depositor or any such director, officer or controlling
person may become subject, under the 1933 Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon, any
untrue statement or alleged untrue statement of a material fact contained in the
Disclosure Documents, or arises out of, or is based upon, the omission or
alleged omission to state therein a material fact necessary to make the
statements therein (in light of the circumstances under which they were made)
not misleading, and shall reimburse the Depositor for any legal and other
expenses reasonably incurred by the Depositor or any such director, officer or
controlling person in investigating or defending or preparing to defend against
any such loss, claim, damage, liability or action, but in each case only to the
extent that the untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information concerning the Special Servicer furnished to the Depositor by or on
behalf of the Special Servicer specifically for inclusion therein. The Depositor
shall immediately notify the Special Servicer if a claim is made by a third
party entitling the Depositor to indemnification under this Section 4.24(d),
whereupon the Special Servicer shall assume the defense of any such claim (with
counsel reasonably satisfactory to the Depositor) and pay all expenses in
connection therewith, including counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or them in
respect of such claim. Any failure to so notify the Special Servicer shall not
affect any rights the Depositor may have to indemnification under this Section
4.24(d), unless
<PAGE>
41
the Special Servicer is materially prejudiced thereby. The indemnification
provided for in this Section 4.24(d) shall survive the termination of any of the
Transaction Documents and the termination or resignation of any of the Trustee,
the Fiscal Agent, the Servicer and the Special Servicer under any of the
Transaction Documents.
(e) The Special Servicer and the Depositor expressly agree
that the only information furnished by or on behalf of the Special Servicer for
inclusion in the Disclosure Documents is the information set forth in the first
paragraph under the caption "SERVICING OF MORTGAGE LOANS--The Special
Servicer--General" in the 1996-C2 Prospectus Supplement, which information the
Special Servicer hereby represents and warrants is true and correct as of the
date of the 1996-C2 Prospectus Supplement and as of the Closing Date.
Section 4.25 THE SPECIAL SERVICER'S QUALIFICATION TO
SERVICE.
The Special Servicer shall keep in full effect such
qualifications as are necessary to conduct business and any necessary licenses
as are required in connection with the performance of its duties under the
Transaction Documents.
Section 4.26 THE SPECIAL SERVICER NOT TO OWN RESIDUAL
CERTIFICATES.
The Special Servicer shall not own any Residual Certificates.
Section 4.27 TAX REPORTING.
The Special Servicer shall provide the necessary information
to the Servicer to allow the Servicer to comply with the Mortgagor tax reporting
requirements imposed by Sections 6050J and 6050P of the Code with respect to any
Specially Serviced Mortgage Loan.
ARTICLE V
REMIC ADMINISTRATION
Section 5.01 COMPLIANCE WITH REMIC PROVISIONS.
The Special Servicer shall act in accordance with (i) the
Transaction Documents, (ii) any and all instructions, notices and directions of
the Trustee that are in accordance with the Transaction Documents and (iii) the
provisions of the Code relating to REMICs, in order to create or maintain the
status of each of REMIC I, REMIC II and REMIC III as a REMIC under the Code or,
as appropriate, adopt a plan of complete liquidation for any such REMIC. The
Special Servicer shall not take any action or cause any of REMIC I, REMIC II or
REMIC III to take any action that could (i) endanger the status of REMIC I,
REMIC II or REMIC III as a REMIC under the Code or (ii) result in the imposition
of a tax upon any of REMIC I, REMIC II or REMIC III (including, but not limited
to, the tax on prohibited transactions as defined in Code Section 860F(a)(2) or
on prohibited contributions pursuant to Code Section 860G(d)), unless the
Special Servicer and the Trustee have received an Opinion of Counsel (at the
expense of the party
<PAGE>
42
seeking to take such action) to the effect that the contemplated action will not
endanger such status or result in the imposition of such a tax.
Section 5.02 MODIFICATIONS OF MORTGAGE LOANS.
Notwithstanding anything to the contrary in this Agreement,
the Special Servicer shall not permit any modification of any material term of a
Mortgage Loan (including the interest rate, the principal balance, the
amortization schedule, or any other term affecting the amount or timing of
payments on the Mortgage Loan, or any other material term thereof, including the
release or substitution of any collateral therefor), unless (i) the Depositor
and the Trustee have received an Opinion of Counsel or a ruling from the
Internal Revenue Service (at the expense of the party making the request of the
Special Servicer to modify the Mortgage Loan) to the effect that such
modification would not constitute a "significant modification" within the
meaning of Treas. Reg. ss. 1.860G-2(b)(ii) or (ii) such modification meets the
requirements set forth in Section 4.05(c).
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.01 BINDING NATURE OF AGREEMENT; BENEFITS OF
AGREEMENT.
This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective permitted successors and assigns and
shall inure to the benefit of the Certificateholders and the Fiscal Agent.
Nothing in this Agreement, express or implied, shall give to any Person, other
than the parties to this Agreement, their permitted successors and assigns
hereunder, the Certificateholders and the Fiscal Agent, any benefit or any legal
or equitable right, power, remedy or claim under this Agreement.
Section 6.02 ENTIRE AGREEMENT.
The Transaction Documents (including, without limitation, this
Agreement) contain the entire agreement and understanding among the parties
hereto with respect to the subject matter thereof and supersede all prior and
contemporaneous agreements, understandings, inducements and conditions, express
or implied, oral or written, of any nature whatsoever with respect to the
subject matter hereof. The express terms of the Transaction Documents control
and supersede any course of performance or usage of the trade inconsistent with
any of the terms thereof.
Section 6.03 AMENDMENT.
This Agreement may be amended from time to time by the Trustee
and the Special Servicer by an instrument in writing signed by both of them;
provided that any amendment adversely affecting the obligations or interests of
the Depositor or the obligations of the Servicer or the Fiscal Agent under this
Agreement shall require the written consent of the Depositor, the Servicer or
the Fiscal Agent, as the case may be, and no amendment shall adversely affect
the
<PAGE>
43
status of any of REMIC I, REMIC II or REMIC III as a REMIC for federal income
tax purposes. The costs and expenses associated with any such amendment shall be
borne by the party requesting the amendment. The Depositor shall forward a copy
of any amendment agreed to under this Section 6.03 to the Servicer.
Section 6.04 GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
Section 6.05 NOTICES.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given when received by: (a) the
Trustee at 135 South LaSalle Street, Suite 1740, Chicago, Illinois 60674-4107,
Attention: Asset-Backed Securities Trust Services Group-LB Mortgage Trust II,
Series 1996-C2, (b) the Depositor at 200 Vesey Street, New York, New York,
10285, Attention: Manager of Commercial Contract Finance, (c) the Special
Servicer, 11200 Rockville Pike, Rockville, Maryland 20852, Attention: Frederick
R. Burchill (with copies to David Iannarone, Esq., 11200 Rockville Pike,
Rockville, Maryland 20852) and (d) the Servicer at 100 South Wacker Drive, Suite
400, Chicago, Illinois 60606, Attention: Master Servicing Manager, with a copy
to GMAC Mortgage Corporation, 100 Witmer Road, Horsham, Pennsylvania 19044-0963,
Attention: General Counsel; or as to each party such other address as may
hereafter be furnished by such party to the other parties in writing.
Copies of all notices, reports, certificates and amendments
delivered to any party hereunder shall be mailed to each Rating Agency as
follows: in the case of Moody's, 99 Church Street, New York, New York 10007,
Attention: Commercial Mortgage Surveillance Group; in the case of D&P, 55 East
Monroe Street, Chicago, Illinois 60603, Attention: Structured Finance -
Commercial Real Estate Monitoring; and, in the case of Fitch, One State Street
Plaza, New York, NY 10004, Attention: Commercial Mortgage Surveillance; or as to
each such Rating Agency such other address as may hereafter be furnished by such
Rating Agency to the parties hereto in writing.
Section 6.06 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.
<PAGE>
44
Section 6.07 INDULGENCES; NO WAIVERS.
Neither the failure nor any delay on the part of a party to
exercise any right, remedy, power or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, power or privilege preclude any other or further exercise of the
same or of any other right, remedy, power or privilege, nor shall any waiver of
any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to
any other occurrence. No waiver shall be effective unless it is in writing and
is signed by the party asserted to have granted such waiver.
Section 6.08 HEADINGS NOT TO AFFECT INTERPRETATION.
The headings contained in this Agreement are for convenience
of reference only and shall not be used in the interpretation hereof.
Section 6.09 COUNTERPARTS.
This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original, and all of which together shall
constitute one and the same instrument.
Section 6.10 REMEDIES OF THE TRUSTEE.
The Trustee shall have the right to take all actions now or
hereafter existing at law, in equity or by statute to enforce its rights and
remedies and to protect its interests, as well as those of the
Certificateholders (including, without limitation, 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.
Section 6.11 SUCCESSORS AND ASSIGNS.
Any permitted successor or assign of the Special Servicer
hereunder, of the Trustee under the Trust Agreement or of the Servicer under the
Servicing Agreement shall, in each such case, succeed to the rights and
obligations of such party under the other Transaction Documents without the
execution or filing of any paper or any further act on the part of any of the
parties to any of the Transaction Documents, anything herein to the contrary
notwithstanding.
<PAGE>
IN WITNESS WHEREOF, each of the Trustee, the Depositor, the
Special Servicer and the Servicer has caused its name to be signed hereto by its
officer thereunto duly authorized as of the day and year first above written.
LASALLE NATIONAL BANK, as Trustee
By:_________________________________
Name:
Title:
STRUCTURED ASSET SECURITIES
CORPORATION, as Depositor
By:_________________________________
Name:
Title:
GMAC COMMERCIAL MORTGAGE
CORPORATION, as Servicer
By:_________________________________
Name:
Title:
CRIIMI MAE SERVICES LIMITED
PARTNERSHIP, as Special Servicer
By: CRIIMI MAE Management, Inc.,
its general partner
By:_________________________________
Name:
Title:
<PAGE>
EXHIBIT A
FORM OF TRUST RECEIPT
To: LaSalle National Bank
135 South LaSalle Street, Suite 1740
Chicago, IL 60674-4107
Attn: Asset-Backed Securities Trust Services Group
Re: LB MORTGAGE TRUST II, SERIES 1996-C2
Date :
In connection with the special servicing and administration of
certain mortgage loans (each, a "Specially Serviced Mortgage Loan") under the
Special Servicing Agreement, dated as of October 1, 1996 (the "Special Servicing
Agreement"), among LaSalle National Bank as trustee (the "Trustee"), Structured
Asset Securities Corporation as depositor, the undersigned as Special Servicer
(the "Special Servicer") and GMAC Commercial Mortgage Corporation as servicer,
the undersigned hereby requests a release of the Mortgage File held by you, as
Trustee (or by a Custodian on your behalf), with respect to the following
described Specially Serviced Mortgage Loan, for the reason indicated below.
Mortgagor's Name:
Address:
Loan No.:
Reason for requesting file:
__ Specially Serviced Mortgage Loan paid in full. (The Special
Servicer hereby certifies that all amounts received in
connection with the loan have been or will be credited to the
Custodial Account pursuant to the Special Servicing
Agreement.)
__ The Specially Serviced Mortgage Loan is being foreclosed.
__ Other. (Describe)
The undersigned acknowledges that the above Mortgage File will
be held by the undersigned in accordance with the provisions of the Special
Servicing Agreement and will be returned to you within a reasonable time after
our receipt of the Mortgage File, except if the Specially Serviced Mortgage Loan
has been paid in full or purchased (in which case the Mortgage File will be
retained by us permanently) and except if the Specially Serviced Mortgage Loan
is being foreclosed or a deficiency judgment is being pursued with respect
thereto (in which case the Mortgage File will be returned when no longer
required by us for such purpose).
<PAGE>
Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Special Servicing Agreement.
CRIIMI MAE SERVICES LIMITED
PARTNERSHIP, as Special Servicer
By: CRIIMI MAE Management, Inc.,
its general partner
By:_______________________________________
Name:
Title:
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
AMOUNT OF PRINCIPAL AND INTEREST COLLECTED BY THE SPECIAL SERVICER
TO BE DISTRIBUTED TO THE SERVICER FOR APPLICATION OF FUNDS
ACTUAL SCHEDULED PAYMENT PAID
LOAN PRINCIPAL PRINCIPAL EFFECTIVE SCHEDULED TO EFFECTIVE
NUMBER NAME BALANCE BALANCE DATE PAYMENTS PREPAYMENTS INTEREST DATE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
REO PROPERTY NAME SCHEDULE II
STATEMENT OF EARNINGS
FOR THE PERIOD ENDING ______________
CURRENT MONTH YEAR TO DATE
ACCOMPLISHED PLANNED VARIANCE ACCOMPLISHED PLANNED VARIANCE
------------ ------- -------- ------------ ------- --------
<S> <C> <C> <C> <C> <C> <C>
INCOME:
RENTAL INCOME
OTHER RENTS
REIMBURSEMENTS
OTHER INCOME
TOTAL INCOME
OPERATING EXPENSES:
SALARIES & WAGES/BENEFITS
ADMIN & GENERAL OH
LEASING & MARKETING
REPAIRS AND MAINTENANCE
JANITORIAL & TRASH
SECURITY & SAFETY
UTILITIES
LEGAL & PROFESSIONAL
INSURANCE EXPENSE
OTHER EXPENSES
TOTAL OPERATING INCOME
NET OPERATING INCOME (LOSS)
DEBT SERVICE:
GROUND LEASE EXPENSES
INTEREST EXPENSE
TOTAL DEBT SERVICE
NOI AFTER DEBT SERVICE
NON OPERATING EXPENSES:
LEASING COMMISSIONS
TENANT IMPROVEMENTS
LEGAL FEES OWNER/LEASING
OTHER NON OPERATING EXPENSES
TOTAL NON OPERATING EXPENSES
NET REO INCOME (LOSS)
Special Servicing Agreement
Sections 2.02(a) and 2.02(c)
</TABLE>
<PAGE>
SCHEDULE II
ASSESSED VALUE
Land_____________________ Owner:______________________________
Improvements_____________ Telephone:__________________________
Other____________________ Property Address:___________________
___________________
Total____________________ ___________________
I certify that the above information contained herein is correct.
